HRA Agenda 07-05-1989AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
1 Wednesday, July 5, 1989 - 7:OOPM
--hair,-^rsen Al Lareen Ber "Ith, J -PPI Srhrnpp,
Everette Ellison, and Tom St. Hilaire.
CITY STAFF: Rick Wolfsteller, Jeff O'Neill, and 011ie Xoropchak.
GUESTS: Pat Pelstring, David Ficek, Russ Martie, and Jim Boyle.
1. CALL TO ORDER.
2. APPROVAL OF THE JUNE 7, 1989 HRA MINUTES.
3. CONSIDERATION TO HEAR RUSS MARTIE'S CONCEPT PLANS AND REQUEST
FOR THE USE OF TIP.
4. CONSIDERATION TO REVIEW THE LETTER OF INTENT WITH MR. FICEX
AND PLANS TO PROCEED.
5. CONSIDERATION TO REVIEW MR. JIM BOYLE'S PLANS FOR CONSTRUCTION
OF MANTEQ'S BUILDING AND REQUEST FOR THE USE OF TIF.
6. CONSIDERATION TO REVIEW TAX INCREMENT DISTRICT NO. 1-8 PLANS.
7. CONSIDERATION TO DISCUSS AND REVIEW PLANS FOR BRIDGEWATER's
RELOCATION.
8. CONSIDERATION TO REVIEW THE TABULATION RESULTS FROM THE JOINT
GOVERNMENTAL UNITS MEETING.
9. OTHER BUSINESS.
10. ADJOURN.
MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, June 7, 1989 - 7:00 PM
City Hall
.La.,ngoc PRESENT: Cbsirrerson Al Leraen, Ron Smith, L-01 Srh n,rn,
and Everette Ellison.
MEMBERS ABSENT: Tom St. Hilaire.
STAFF PRESENT: 011ie Koropchak.
GUEST: Pat Pelstring.
1. CALL TO ORDER.
The HRA meeting was called to order by Chairperson Al Larson
at 7:04 PM.
2. APPROVAL OF THE MAY 5, 1989 HRA MINUTES.
Ben Smith inquired of why an escrow account had been established
by the NRA for the repair of Topel's building. Chairperson
Larson responded that the HRA was declared responsible as
owners of the Stelton property at time of demolition. With
no further questions, Ban Smith made a motion to approve
the May 5, 1989 HRA minutes. Seconded by Everette Ellison,
the HRA minutes were approved as written.
3. CONSIDERATION TO REVIEW AND ACCEPT THE TAX INCREMENT FINANCE
APPLICATION.
The HRA members briefly discussed the TIF Application stating
It was very complete and no different than a FRA or SBA
loan application. Also, noting the clause stating that the
submitted information are accurate and complete to the
boat of the Undersign's knowledge and belief. The general
consensus of the HRA was to accept the now TIF application.
4. CONSIDERATION OF HRA ALTERNATIVES FOR TIF DISTRICT NO 1-8
(NORTHERN STATES POWER COMPANY).
The HRA was advised of the last meeting between Jerry Zimmer
and the city staff which ended with Mr. Zimmer to contact
private developers for potential build/lease and Koropchak
was to check the probability of the HRA as a developer
with an option to buy lease for the NSP maintenance building
proposed to be located in the industrial park. Mr. Pat
Palstring informed the HRA that other HRA/communities have been
successful as developers with a loaeo/option to purchase.
The proposals are drafted to recover all costs, pro set
purchase price, tan year lease with option to purchase,
build to loasoe specifications, can specify purchase date,
and inclusive of a triple not lease. If the HRA's decision is
to proceed as developer for the NSP project Mr. Polstring
will draft a package proposal. The general consensus of
HRA Minutes 6/7/89
4. CONTINUED.
the !LRA was that the; cnc no real kick tack as a dcvclepa ,
the project eliminates no blight, creates few additional
jobs, and felt it was not their main game plan. The final
decision by the HRA was they would consider that project
only after all other NSP alternatives had been explored
and denied for a 1989 construction.
5. CONSIDERATION TO REVIEW DAVID FICER'S REDEVELOPMENT HOUSING
PROJECT PLAN AND FINANCIAL PROPOSAL.
At the HRA May meeting the HRA made the following recommendations
and plane which were agreeable with Mr. Ficek. One, that the
developer (Ficek) negotiate and acquire the properties; Two,
redevelopment project O1 will concentrate on a portion of
site location Area A.; Three, the developer's guideline
density of 7 units per acre be followed; Four, BDS, Inc, will
prepare a redevelopment district and/or economic district in
accordance with statutory requirements; and Five, BDS, Inc.
will prepare two alternative financial feasibility studies
for the HRA's June meeting.
Mr. Pelstring presented a copy of the Preliminary Analysis-
Townhouse/Housing Redevelopment Project to each HRA member
and highlighted its content. He reiterated that it makes
particular good sense to have no outside discussion of the
earmarked neigborhood. Mr. Peletring explained his process
to arrive at the estimated annual tax increment of $23,000.
He estimated existing homes to be acquiired at 1252 of their
existing market value and vacant lots to be acquired at
$15,000 each, which indicates total TIP assistance of $113.000
for Phase I of Area A. Phase I is the proposed construction
of 22 townhome unite on approximately 3.15 acres. Project
coat inclusive of demolition cost plus other coat would
require a tax bond issue estimated at $205,000 retired at
16-17 years. Mr. Pelstring's conclusion was the project
clearly qualifies as a redevelopment district.
With the some analysis applied to Phase I1 of Area A. the
combination of both redevelopments I and II is not feasible
because of the higher market valuations on the existing Phase II
properties which results in an approximate $3,700 par year
additional increment.
A motion was made by Everette Ellison directing Mr. Polstring
to proceed with drafting a latter of intent and understanding
between Mr. David Ficek and the HRA for the proposed Phase I
project with an astimated write down of $7,000 par unit and
an acquisition time table of 90 days. The motion was seconded
by Ben Smith and with no further discussion passed 4-0.
HRA Minutes 6/7/89
6. CONSIDERATION TO REVIEW LEONARD BABINSRI AND/OR DONALD
BABINSRI'S REDEVELOPMENT HOUSING PROJECT PLAN PROPOSAL.
In addition to the background and reference information
provided in your agenda supplement, Mr. Pelstring informed
the HRA how he met the two developers, Donald Babinski
and Leonard Babinski, who are brothers but are separate
developers. Pat reiterated that Donald Babinski was
most interested in a Monticello redevelopment project.
He develops more standard apartments with high quality
or the upscale market end. He was most interested
in Block 29 for 1) luxury apartments, 2) tovnhome rentals,
or . 3) townhome sales. Mr. Pelstring said he would
make a followup contact with both developers. The HRA
advised him to keep the communications open and to
reconsider another site location than Block 29.
Mr. Pat Pelstring advised the HRA members of the Manteq
International, Inc. Financial Package Proposal. The
project includes the construction of a 30,000 square foot
building with a lease write down from the developer/builder
to Manteq through the use of Tax Increment Financing.
Example a $5.50 per sq ft lease reduced to $4.60-4.65 per
square foot. Site location proposed on Mr. Jim Boyles
property. Manteq's package includes the State Recovery Grant
program, SBA Loan, Central Minnesota Initiative Fund, the Greater
Monticello Enterprise Fund, and Bank Financing for the $1,000,000
project cost, $750,000 equipment and machinery, $250,000
working capital. Equity requirement of $100,000. The
company's financial statements indicate a very profitable
88-89 year compared to the previous years, Mr. Pelstring
will contact the owner, Norman Strand and Accountant
Stuart Wilson in Midland, Michigan. Next step is to
prepare a letter of Intent. Potential 50 jobs.
The HRA was also informed of the financial proposal as
prepared by BDS. Inc. and presented to Tapper, Inc. for
a relocation of a manufacturing company, inclusive of
potential 50 jobs.
7. CONSIDERATION OF UPDATES: Pledgo Agreement Relinafshment Between
the City and the HRA.
City approved the relinquishment of the Pledge Agreements between
the City and the HRA thereby reducing the debt service leverage
to 1052, meeting statutory requiromment, rather than the previous
1501. However, the resolutions have not arrived from John
Green at Holmes 6 Graven.
HRA Minutes - 6/7/89
7. CONTINUED.
DeveopmeaL AKfeeLmilL Between BLuadway SquHLe Limned
Partnership and the HRA. At this time the development
agreement hasn't been signed. Tod FmHA closing
was schedule for this morning in St. Cloud, however,
the date has been rescheduled for June 14. .
TIP District 02 Demolition Completion. The demolition
contractor. Veit 6 Company did complete demolition and
bill the HBA, however, John Simola, Public Works Director,
Fred Topel, and myself viewed the site for final
inspection. Thereafter a letter was written Mr. Veit
listing approximately ten items which aren't completed-
to specifications. No payments have been made.
TIF District 04 Guarantee. At the Board of Appeal in
May, 1988, Mr. John Plaisted, owner of the previous IXI
Complex, appeared to contest the market value placed
on this property .as he had a purchase agreement for
$500,000, market value was $879,400. Because there
is an Assessor Agreement filed on the property for
the latter amount, Mr. Plaisted was given copies of
an agreement to release the present Assessor's Agreement
and establish a new Assessor's Agreement guaranteeing
the HRA a sufficient annual tax increment of $28,000.
Mr. Plaisted never returned the copies with signatures.
The taxes were reduced without the signed agreements,
therefore, Mr. Wolfateller wrote a letter to Mr.
Plaisted stating unless the signed agreements were
returned for filing and establishing the new tax increment
guarantee the market value would return to the original
amount of $879.400. By the reduction of the market
value our annual tax increment was short by approximately
$500.00 this year and with no agreement stating if the
annual tax increment shall ever go below $28,000 the
ower pays the difference. Mr. Plaieted came in and
signed the necessary agreements and will pay the gap
upon billing.
8. OTHER BUSINESS.
None.
9. ADJOURNMENT.
Lowell Schrupp made a motion to adjourn the HRA meeting and
Al Larson seconded the motion. The HRA meeting adjourned.
011ie Koropchak
HRA Executive Secretary
HRA Agenda - 1/5/89
3. CONSIDERATION TO HEAR RUSS MARTIE'S CONCEPT PLANS AND
REQUEST FOR THE USE OF TIF.
A. RACKrRniMn A" RFFERE CE.
Within the past year the HRA gave a preliminary acceptance
for the use of TIF if the project met the Central Monticello
Redevelopment Plan Objectives. Mr. Martie will attend the HRA
meeting to present his preliminary ideas and time table.
TIF Policy considerations met by this development:
(1) The project shall be consistent with the City's
Comphensive Plan.
(2) The proejct shall demonstrate long-term economic
benefits to the community.
(3) The project shall create and/or retain employment
for Monticello residents.
(4) The project shall be deemed to promote additional
desired "spin-off" development.
TIF funds would be used for the acquisition of land. Other
things to consider is the increased market value to the
community and the assistance to a local business. Questions
may be the number of employment or increase and if non-
competitive commerical or industrial (requires manufacturing
or production).
Enclosed aro preliminary estimates of the expected Tax
Increment to be generated by this project. NOTE: The
project is designed to stand on it's own, use of an
internal loan, and is not sufficient to write down the
land cost to $1.00. SUPPORTING DATA NO. 1
4. CONSIDERATION TO REVIEW THE LETTER OF INTENT WITH MR. FICEK
AND PIANS TO PROCEED.
Mr. Fleck may attend the HRA meeting, however, he will call
me on Friday. Having received the Letter of Intent a few
days ago hasn't allowed Mr. Ficek ample time for site plan
design. Please review the Lotter of Intent which was
executed by Chairperson Larson and myself, the only notation
of difference was allowable acquisition of 60 days compared
the HRA meeting minutes of 90 days. SUPPORTING DATA NO. 2
5. CONSIDERATION TO REVIEW MR. JIM BOYLE'S PIANS FOR CONSTRUCTION
OF MANTEQ'S BUILDING AND REQUEST FOR THE USE OF TIP.
Mr. Boyle may be present at the meeting to present us with an
update on the construction alto, building plans, and designated
devoloper/contractor. In confidentiality.. Mr. Boyle has til
December of 1989 before foreclosure of hie property, therefore,
it was the suggestion of the Industrial Development Committee
to have an alternative alto location and davelopor/buildor.
It is my understanding from the County Auditor's Office that
at the time a subdivision is filed at the county all delinquent
taxes, special assessments, interest, filing face, and ponalitles
plus current years taxes and assessments must be paid in full.
This a concern because the potontiol alto location does have
delinquent taxes and assessments.
HRA Agenda - 7/5/89
6. CONSIDERATION TO REVIEW TAX INCREMENT DISTRICT NO. 1-8 PIANS.
in a conversation rich Hr. Jerry Zlusuer, NvcLLoru SLatae
Power Company, this past week, he reports that NSP has
gone out for bide for a third time for the construction
of the approximate 5,400 eq ft maintenance building
planned for the industrial park. Bide are for both
lease/build and build and date of bid opening is
Monday, July 10, 1989. Mr. Zimmer will call me that
week.
7. CONSIDERATION TO DISCUSS AND REVIEW PLANS FOR BRIDGEWATER'S
RELOCATION.
After running numbers with the use of TIP based on Bridgewater's
preliminary assumptions and using as an example one of the
City's subdivided lots the projected annual adjusted tax
increment of $1,192.00 only allows for a $7,000 loan. This
is without capital interest, plan/development costs, and
administrative costs deducted. Estimated Market Value on
Bridgewa ter's current property is :59,700. The HRA's
purpose of interest in this project was to
assist Bridgewater to relocate to a suitable zoned site
as they plan to expand their cold storage facility located
on West County Road 39 (PZM Zoned). Two problems exist
to continue this project: 1) Cost to acquire the existing
i property plus how to control the use of the property without
City or HRA owership and 2) feasibility of the project
for Bridgewater. I have a meeting set for 10:00 AM
on July 5 with Mr. Riorson. SUPPORTING DATA NO. 3
8. CONSIDERATION TO REVIEW THE TABULATION RESULTS FROM THE JOINT
GOVERNMENTAL UNITS MEETING.
Mr. Jeff O'Neill will inform the HRA of the floormat used at
the meeting, the voting technique, and explain the tabulation
process used and the results. SUPPORTING DATA NO. 4
N
TAX INCREMENT FINANCE PROPOSAL
CITY OF MONTICELLO
on behalf of
Y:P.TI. S FAIL. ,,ErVSCC
ASSUMPTIONS:
1. A 7,164 square foot metal office/cold storage facility to be
constructed in fall of 1898 and completed by.January 2, 1990.
48 X 48 - 2,304 sq ft office/display
54 X 90 - 4,860 aq ft cold storage (concrete floor, 14 ft side walls).
2. Site: Westerly 1.937 acres or 84,365.36 sq ft of Lot 1, Block 3,
Oakwood Industrial Park.
3. Employment of
4. TIF District certification, September, 1989.
2,304 sq ft X $30.00 - $69,120.00 Office
4,860 aq ft X $ 8.00 - 38,880.00 Cold Storage
84,365 aq ft X $ .35 - 29,527.87 Land
$137,527.87 ENV
A. New Capacity Value $5,232.68
B. Original Capacity Value 442.83
C. Captured Capacity Value 4,789.85
D. Capacity Rate .82091
E. Annual Tax Increment $3,932.03
F. Tax Bill $4,295.56
C. Adjusted Annual TI $3,222.01
CONCLUSION:
Tax Increment is eufficant to retire a $19,000 loan at 7E over 8 years,
Debt Service $3.181.93 (167.47).
Estimated TIF Use TIF Donation $11,000.00 (Acquisition of Land)
Plan/Davol 4,080.00
Administ 1,260.00
Cap Inc (24 mos) 2,660.00
TOTAL $19,000.0U
LAND ACQUISITION: $20,000.00 CONTRACT FOR DEED
3,000.00 LESS DOWN PAYMENT
1 $17,000.00 BALANCE
181.78 2ND HALF TAXES (Portion of Lot 1)
492.19 26D HALF ASSESS'e FN-rS
863.50 REMAINING BALANCE ASSESSMENTS
$18,537.47 TOTAL REMAINING ACQUISITION
11,000.00 LESS TIF DONATION
$ 7,537.47 GAP
ADJUSTMENT FACTOR:
A. September, 1989 Establishment Date
B. January 2. 1988 Base Year Capacity Date
C. $442.83 Base Year Capacity Value
D. January 2, 1983 Fifth Preceding Year Capacity Date
E. $221.44 Fifth Preceding Year Capacity Value
F. $221.39 Five Year Capacity Value Increase
G. .99977 Five Year Total Increase Ratio
H. .19995 Five Year Average Increase Ratio
d
I. 1.19995 Annual Base Year Adjustment Factor
Year Base CV Ada Factor ACV NCV CR Annual TI
89/90 $442.83 1.199 $530.95 $5,232.68 .82091
90/91 636 4,597 $3.773.46
91/92 763 4,470 3,669.20
92/93 915 4.317 3,544.42
93/94 1,097 4,136 3.395.02
94/95 1,315 3,918 3,216.06
95/96 1.577 3.656 3,000.98
96/97 1,891 3,342 2,743.21
97/98 2,268 2.965 2,433.73
$25,776.08
$25.776.08 divided by 8 years - $3.222.01 Annual Adjusted Tax Increment
t
Minnesota
DEPARTMENT OF ECONOMIC LEVEL no ;.ENT
Industrial Park Profile
Oakwood Industrial Park
Monticello, Minnesota
O 200 400 FEET AVAILABLE PARCELS
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THOMAS PARK
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M Fast Broadway
Mond"11% MN 55362-9245
Phone:(612) 295.2711
Mena (612) 333.5739
kt—
Kmwth M6
Mr. David Picek
,;.,,;.rd
Scottwood Corporation
MmUmiyrn
1649 Stinson Boulevard
Fm FW,
Now Brighton, MM 55112
W'"M smkh
Be: Housing Project –TIP Assistance
AJ -
Rick 4fafud4+
City of Monticello
A-- ti►— a
Q—IV,6
Dear Mr. Picek:
hff area
P"WAA,
The Monticello Housing and Redevelopment Authority has had an
F,hn SMAM
opportunity to review your request for assistance dated May 1,
PWU,OkLA
1989. That request was reviewed with City staff and our TIP
G,"A L"m
Consultant, Business Development Services, in late May. In
� �-KF*"►
addition, preliminary financial analysis has been conducted on
your "first priority" project to determine the potential of
City assistance.
Based upon our review and analysis, we have prepared this
Letter of Intent to serve as our preliminary understanding of
project structure. We have also established appropriate time
frames.
DEVELOPER RUMSENTATIONS
1. The developer, Scottwood Corporation, would intend to
proceed with the acquisition of an estimated 3.15 acres
located adjacent to Pourth Street and Palm Street. The
purpose of this acquisition would be to construct 22
townhmm units.
2. The developer will proceed with the acquisition of
property from the property owners on a private basis and
report actual acquisition and redevelopment coats back
to the Monticello Housing and Redevelopment Authority.
Mr. David Picek
June 27, 1989
Page 2
3. The developer will agree to participate with the Monticello HRA,
to write down acquisition and site development costs such that
the repurchase of the property shall be based upon a $7,000 per
unit price, after the BRA has provided tax increment assistance.
4. The developer will agree to provide a preliminary site plan of
the proposed site within 45 days after acceptance of this Letter
of Intent. The developer will agree to coWlete the development
consistent with this preliminary site plan subject to review by
the Monticello Housing and Redevelopment Authority.
S. The developer will agree to construct an estimated 22 single
level townhomes, described as follows:
2 bedroom units with 2 car attached garage, estimated 1,200 aq ft
of living area, estimated price range $64,500 to $69,500.
HOUSING AND REDEVELOPMENT AUTHORIW REPRESENTATIONS
1.
The Monticello Housing and Redevelopment Authority will agree to
participate in the development by creating a Redevelopment Tax
Increment District on the site. The establishment of this
Redevelopment District shall be established and contingent upon
meeting the appropriate process required by state law.
2.
The Monticello Housing and Redevelopment Authority will agree,
subject to verification of cost and financial feasibility, to
provide a project cost "write down" which will reduce the
acquisition and redevelopment cost to the developer to a fixed
price of $7,000 per unit.
3.
As part of the project, the Housing and Redevelopment Authority
will agree to seek City support for the vacation of Palm Street,
identified as part of the development site.
4.
The Monticello Housing and Redevelopment Authority will agree to
provide overall ongoing guidance concerning the financial
feasibility of the project.
5.
This Lotter of Intent shall serve as evidence of the HRAla
willingness to proceed with this project. Nothing contained
herein, however, shall serve as a binding commitment or serve to
supeccede any HRA or City Council statutory requirements. The
parties shall be deemed to be operating in good faith to complete
the project.
SCHEDULE
PROJECT
1.
The first phase of the project shall be for the developer to
Initiate discussion with the affected property owners to seek the
acquisition of properties within the development site.
1
Mr. David Picek
June 27, 1989
Page 3
2. The developer shall also, within 45 days of execution of this
letter, prepare a preliminary site plan for review and approval
by the HAA of the proposed development site. This site plan
shall also include typical elevations and floor plan layouts of
the townhomes.
3. She developer shall have 60 days to complete preliminary
negotiations for site acquisitions.
4. Upon completion of preliminary negotiations for the site
acquisitions and the development of the site plan, the developer
and the City will agree to meet to prepare a draft developer
agreement consistent with this Letter of Intent. This
development agreement shall supercede this Letter of Intent in
terms of the proposed financing structure of this project.
This letter of intent shall, expire on September 1, 1989, unless
mutually amended and/or modified by the Monticello Housing and
Redevelopment Authority and Scottwood Corporation.
Sincerely,
J11
Chairman
011ie Koropchak
Secretary
Monticello Housing and Redevelopment Authority
GU/kd
ccs Pile
TAX INCREMENT FINANCE PROPOSAL
CITY OF MONTICELLO
on behalf of
BRIDGEWATER TELEPHONE COMPANY
ASSUMPTIONS
Lot 3. Block 1, Oakwood Industrial Park Second Addition.
1.9258 acres or 83.887.84 square feet
Construction of a 10,200 square foot metal storage facility.
Unheated, concrete floor, and 12 It sidewalls.
10,200 sq It x $7.00 - $71,400 Building
83,887 sq ft x .35 - 29,360 land $9,100 (.108)
$100,760 Total EMV
A. New Capacity Value $3,340
B. Original Capacity Value $ 478
C. Captured Capacity Value $2,862
D. Capacity Rate .82091
E. Annual Tax Increment $2,349.44
F. Adjusted Average TI $1,192.00
G. Tax Bill $2,741.83
CONCLUSION:
$7,000 internal loan at 7% over 8 years, Annual Debt Service $1.173.29
(167.47)
PRESENT PROPERTY LARSON MFG NSP PROPERTY
155-500-101415 155-500-101101
EMV - $59,700 EMV o $45,800 $75,000
(61Z)
Bldg 11,940 (6.61) Bldg 36,400 ($14.96)59,625
(24.51;
Land 47,760 (1.10) $38,600 (.41) Land 9,400 (.1715) 15,375
(.28)
43,560 aq It 93,000 sq ft 54,800 aq ft
Taxes $1,970.10 Taxes $1,974.30
Block 1, Lot 3, OLP 2nd Add. Oakwood Industrial Park
Land $ 9,292.17 (.1107) Land $21,200 (.1535)
lmpr. 12,090.00 improve. 1,800
Total $21,382.00 Total $23,000
83,887.84 (1.92acres) Land 138,085 sq ft (3.17
acres)
.2548 per aq It .1665 par aq It
/r
RCONOMIC DEVELOPMENTAOJSING/REDEVELOPMETIT
S. Recruitment and Retentlm-Retail/Commercial
NET VETO
1ENERAL GOVERNMENT
POINTS POINT
A. Summary of City Ordinance in Booklet form by general topic.
67
0
A. Review effectiveness and cost of consulting services.
50
0
A. Improve communication amng employees re: City activities.
38
0
A. Bring branch office of County to City.
25
-5
A. Better Follow-up or r-molutien of public nuisance problems.
24
0
A. Development booklet describing City requirements to developers.
23
-5
A. Improve Public relations with Developers - Group meetings
23
0
A. Mire City inspector.
19
-5
A. Recodificatien of City Ordiances.
19
0
A. Separate Deputy Registrar from City Hall
13
0
A. Notify individuals affected by ordinance amendments.
10
0
A. Explain to public what the "Publics Hearing" process is.
9
0
A. Increase/alter City Hcurs for commuters.
3
-5
A. Continue City Beat Info column
6
-5
A. Summer Job program for teens
3
-5
A. Increase Deputy Registrar hours.
3
-5
A. Hire additional clerical staff.
2
-5
A. Weekly article to citizens an City activities.
-3
-10
A. City Newsletter
0
-15
A. Public Hearing Notices 1n Shopper.
-5
-5
A. E3tabl ish space for Chamber of Ccmrerce.
-16
-20
A. Create Employee break cr lounge area.
-23
-25
RCONOMIC DEVELOPMENTAOJSING/REDEVELOPMETIT
S. Recruitment and Retentlm-Retail/Commercial
67
0
S. Persue extended area telephone service..
53
-5
B. Most/Visit at least 10 industrial prospects.
40
0
S. Update promotional amatariale.
29
0
S. Research and compere market values with other communities
26
0
B. Continue Business Expo
21
0
B. Conduct business retantion survey.
17
0
B. Encourage Job Creation or expansion
16
0
S. Establish intermediate care facility for elderly.
14
O
S. Study Mock -app fees for industry.
14
-5
S. Most Joint Mtn - City/State Dept of Eecn Dev.
10
0
B. Compare City Econ Deo Strat with other Communities
10
0
S. Conduct Annual Banquet.
6
0
S. Higher quality elederly houa4ng downtown.
5
0
S. Target Marketing activity
3
0
S. Levy for HRA activities.
2
0
8. Continue Star City Program.
2
0
S. Improve rail transpor-tation
-14
-15
8. Rehab program for low income homes.
-17
-20
8. Continue Airport Devalcom t Research.
-20
-25
S. Participate in deuelonent of Industrial Spec Building.
-23
-35
CAPITAL IMPROVEMENTS/EQUIPMENT PURDIASES
C. Sidewalks in developnnont areas. Main Traffic areas 6 Highways
57
0
:. Install signal at 75/39/118 intersection.
42
0
C. Freeway Access - 116/Orchard Rd. 36 -15
NET
VETO
C. New Public Works Building.
32
-5
C. City Entrance Signs.
29
0
C. I_. - --- to Hwy 75 to Prairie Road/River st.
26
0
C. Tree planting and stump removal program 'egressive'
25
0
C. Save old water tower.
25
0
C. Develop Lauring Lane/7th st.
24
0
C. Relocation of information Center.
22
0
C. Side walk - Brdwy, to Mall.
1B
-5
C. City Hall Exparoion
5
-15
C. Use Capital funds to retire Bonds.
-12
-15
C. Vacuum for leaves in Park.
-15
-15
PUBLIC FACILITIES/PUBLIC SAFETY
0. Establish Joint Effort with School district - Civic Center/Arena
90
0
D. Be firm regarding cruizing problem.
52
0
D. Develop public transportatim system.
40
-10
0. Improve Enforcement of nuisance ordinance
24
-5
D. Public Awareness Pgm of Pblc Safety services.
16
-5
D. Information regarding proper disposal of variety of refuse
14
-5
0. More Leaf Pick-uo Days
9
-10
D. Develop Cut-door Municipal Pool
4
-40
D. Contract for 24 hour police protection
3
-25
D. Purchase Special Event Banners - Highway 25/Broedway.
3
-10
D. Explore development of City Police force.
-35
-50
LAND USE PLANNING/CIVIL DEFENSE/COOE ENFORCEMENT
E. Establish land-use plan for OAA 0-5 yrs.
74
0
E. Sutdy Housing Mix/Impact of MF Housing
67
0
E. Nuclear Accident Preoarednsss.
50
0
E. Slight ordinance - Comparative study.
51
0
E. Study Apartment Mix - Subs vs. Mrkt rate.
37
0
E. Print up to date zming map.
26
-5
E. Annexation of land across river.
15
-20
E. Communicate park needs to developers better.
6
-5
E. Update zming ordinance
3
-20
E. City Involvement in improving Balboul est
2
-15
E. Planning Commission Minuteo published.
-7
-10
PARKS AND RECREATION
F. Glorify river parks and elxpand use of river.
64
0
F. Bike trails through-wt City. le Mid schl/RR ROW
49
-10
F. Develop park building for rent (fam reunions. etc).
49
-5
F. Do not accept substandard park lend.
39
0
F. Sall field expansim (lights).
32
0
F. Went bridge restreams.
20
0
F. Park benches in areas outside of down-torn.
19
0
F. Skating Rink for General Public.
16
0
o. Park shelter W.Basketball and Lights.
16
0
` '. Develop sliding hill ( longer and gentler).
13
-5
F. User fee for park facilities.
7
-5
S
NET VETO
Update Electricity in Parks. 1 -10
Tennis Courts with lights. -2 -15
Bike trail development to St. Cloud (work with State) -29 -30
ATV trails. ` -70 -70
0�0
[sib
- Businm Development Sendces Inc.
•'• M E M G R A N D U M "•
TO: Monticello Housing and Redevelopment ((Authority
FROM: Patrick W. Pelstring, Vice Presidentli/►JJ�
Business Development Services, Inc. \�\`
DATE: June 7, 1989
RE: PRELIMINARY ANALYSIS--TOWNHOME/HOUSING REDEVELOPMENT PROJECT
INTRODUCTION
At the request of the Monticello Housing and Redevelopment
Authority, I have been conducting a review of the potential of
encouraging a redevelopment project in the downtown area. The
primary purpose is to identify a housing developer who would
construct townhome units for resale on the redevelopment
property.
In conjunction with 011ie Roropchak and Jeff O'Neil, I have
introduced three separate developers to the City. City staff and
I have met with each of the developers to review the potential
of City assistance, and the potential available sites in the
downtown Monticello area.
Mr. Picek previously submitted a proposal to the HRA indicating
his preferences for specific areas and outlining the types of
townhome developments he would propose for those various sites.
Representatives of the City and BOS have met further with Mr.
Ficek to identify a specific site and to begin preliminary
analysis of the potential of Tax Increment Financing assistance.
This report has been prepared to provide an update on the
discussions to date and to review our preliminary findings.
DEVELOPMENT PROPOSAL
We have suggested to Mr. Picek that it would be most appropriate
to begin discussions on his top priority project. That area is
identified by City staff as Area A, and has been further refined
into a potential phase 1 and phase 2 development. The specific
properties identified will be outlined by City staff at the HRA
meeting.
8090 SPNIId ROM DRIWi 0 SM M 0 MUNNERPOUS, MN MU 0 PWOIII: 6108"I51
Monticello ARA
June 7, 1989
Page 2
Mr. F icek has proposed the construction of 22 townhome unite,
with an estimated future market value of $65,000 each on the
phase 1 property. Total acreage available to Mr. Ficek is
estimated at 3.15 acres. On phase 2 of the project, encore passing
an additional 1.21 acres, Mr. Ficek would construct 8 2 -story
townhomes with an estimated market value of $55,000. Mr. Ficek
also indicates that he has budgeted $7,000 per unit for land
costs for these developments.
FINANCIAL ANALYSIS
Based upon the information provided by Mr. Ficek, we have
researched existing City tax records to determine the potential
financial feasibility of participation with Mr. Ficek on phases 1
and 2 of the proposed project.
Attachment A has been developed to detail, on a lot -by -lot basis,
the estimated requirement for TIP funding to provide the
appropriate subsidy for the project.
Phase 1 consists of 13 separate parcels which would be combined
into the 3.15 parcel. Several of the proposed lots are currently
vacant and, as a result, the estimated existing tax capacity pro-
vides sufficient revenue to support the required tax increment
insertion.
For purposes of this review, we have assumed that the City would
dedicate the requested Palm Street right-of-way at no cost for
the development. We have estimated that exiating homes would be
acquired at 125 percent of the existing estimated market value
and that the vacant lots could be acquired at $15,000 each, or
$1.01 per square foot.
The not result in phase 1 indicates total TIP assistance required
for acquisition at $113,000. The estimated annual increment
generated off of phase I would be approximately $23,000.
Attachment B outlines an estimated bond issue to support phase
1 development only. In addition to the acquisition costs we
have added $25,000 for demolition and the appropriate sof t
coats, capitalized interest and discaunt. This would require
a total bond issue estimated at 0205,000. Based upon the
axis ting annual increment, the bond could be retired in approxi-
mate ly 16 - 17 years.
The project clearly would qualify as a redevelopment district
and, as a result, the City would potentially have 25 years to
retire the bond.
Monticello HRA
June 7, 1989
Page 3
When phase 2 is added to the project, the financial feasibility
is much more uncertain. Due to the higher level of existing
market valuations, we have estimated that phase 2 would only add
approximately $3,700 per year of additional increment to the pro-
ject.
The TIP subsidy required to support the acquisition costs total
$205,000, which would increase the total required TIP subsidy to
complete both phases to $318,000.
The projected bond issue for both phases 1 and 2, adding a total
of $50,000 of demolition costs would require approximately
$475,000 (see Attachment C) of issuance. Based upon existing
anticipated increment, the project would not be feasible, even
within the 25 year district.
RECOMMENDATION
At this time, we would recommend the consideration of only phase
1 of the proposed project. We would request the HRA's review of
the proposed site layout and financial assumptions to confirm
r the feasibility of the project.
Additional information will be available at the meeting for your
review and discussion.
PWP/ld
Attachments
EXHIBIT A
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COMMUNITY:
TYPE OF DISTRICT
DATE. OF ISSUE:
INTEREST RATE:
PROJECT REF:
TAX INCREMENT BOND ISSUE
MONTICELLO
REDEV
JAN 01,90
0.07
FICEK - PH I
LAND ACQUISITION
113,000.00
PUBLIC IMPROVEMENTS (OFF SITE)
STREET
SEWER
WATER
SANITARY SEWER
DEMOLITION
25,000.00
ON-SITE UTILITIES
PARKING/LANDSCAPING
SUBTOTAL
138,000.00
CONTINGENCY
10,000.00
ADMINISTRATION
10,000.00
PROFFESSIONAL SERVICES
15,000.00
SUBTOTAL
I73,OOU.00
CAPITALIZED INTEREST
28,000.00
DISCOUNT
4,000.00
TOTAL BOND ISSUE:
6205,UUU.OU
E'HLBIT C
9
COMMUNITY:
TYPE OF DISTRICT
DATE. OF ISSUE:
INTEREST RATE:
PROJECT REF:
TAX INCREMENT BOND ISSUE
MONTICELLO
REDEV
JAN 10,90
0.07
F10EK PH 1&I1
LAND ACQUISITION
318,000.00
PUBLIC IMPROVEMENTS (OFF SITE)
STREET
SEWER
WATER
SANITARY SEWER
DEMOLITION
50,000.00
ON—SITE UTILITIES
PARKING/LANDSCAPING
SUBTOTAL
368,000 00
CONTINGENCY
10,000.00
ADMINISTRATION
10,000.00
PROFFESSIONAL SERVICES 15,000.00
SUBTOTAL 403,000.00
CAPITALIZED INTEREST 1;5,000.00
DISCOUNT 7,000.00
¢¢c aee¢ea=aaaa�
TOTAL BOND ISSUE 5475,000.00
250 Fast Broadway
Monticello, MN 55362.9245
Phone: (612)295.2711
Metro: (612) 333.5739
Mr
Acn—th Mew
Mr. David Picek
,;.,G,,,,•d
Soottwood Corporation
1), [U ig.•n
1649 Stineon Boulevard
Fran Fri,
New Brighton, MN 55112
n
%,L y A,.1,—n
ub e.. Smirh
Re: Housing Project — TIP Assistance
''k """"
Ri.k �YidJ"e14•r
City of Monticello
A... AJ...—.....6
u,.ru..•�
Dear Mr. Picek:
JeJJ U•Ned
Nf,6% t.
The Monticello Housing and Redevelopment Authority has had an
fih.. si—u
opportunity to review your request for assistance dated May 1,
n,,,w. "-ftw
1989. That request was reviewed with City staff and our TIP
Consultant, Business Development Services, in late May. In
t••�-- �� �+�"•
addition, preliminary financial analysis has been conducted on
your "first priority" project to determine the potential of
City assistance.
Based upon our review and analysis, we have prepared this
Letter of Intent to serve as our preliminary understanding of
project structure. We have also established appropriate time
frames.
DEVELOPER REPRESENTATION
1. The developer, Soottwood Corporation, would intend to
proceed with the acquisition of an estimated 3.15 acres
located adjacent to Fourth Street and Palm Street. The
purpose of this acquisition would be to construct 22
townhome unite.
2. The develorer will proceed with the acquisition of
property from the property owners an a private basis and
report actual acquisition and redevelopment costs back
to the Monticello Housing and Redevelopment Authority.
Mr. David Picek
June 27, 1989
Page 2
1. The developer will agree to participate with the Monticello BM,
to write down acquisition and site development costa such that
the repurchaBe of the property shall be based upon a $7,000 per
unit price, after the BM has provided tax increment assistance.
4. The developer will agree to provide a preliminary site plan of
the proposed site within 45 days after acceptance of this Letter
of Intent. The developer will agree to complete the development
consistent with this preliminary site plan subject to review by
the Monticello Housing and Redevelopment Authority.
S. The developer will agree to construct an estimated 22 single
level tamhomes, described as follows:
2 bedroom units with 2 car attached garage, estimated 1,200 aq ft
of living area, estimated price range $64,500 to $690500.
HOUSING AND RMBVHLC2MW AUTHORITY RHARBBBNUTIONS
1. The Monticello Housing and Redevelopment Authority will agree to
participate in the development by creating a Redevelopment Tax
Increment District on the site. The establishment of this
Redevelopment District shall be established and contingent upon
meeting the appropriate process required by state law.
2. The Monticello Housing and Redevelopment Authority will agree,
subject to verification of oust and financial feasibility, to
provide a project coat *write down" which will reduce the
acquisition ane redevelopment cost to the developer to a fixed
price of $7,000 per unit.
7. As part of the project, the Housing and Redevelopment Authority
will agree to seek City support for the vacation of palm Street,
Identified as part of the development site.
4. The Monticello Housing and Redevelopment Authority will agree to
provide overall ongoing guidance concerning the financial
feasibility of the project.
S. This Letter of Intent shall serve as evidence of the HM's
willingness to proceed with this project. Nothing contained
herein, however, shall serve as a binding commitment or serve to
superoode any eM or City Council statutory requirements. The
partied shall be deemed to be operating in good faith to complete
the project.
PRDJF7Cf SMUMULB
1. The first phase of the project shall be for the developer to
Initiate discussion with the affected property owners to seek the
acquisition of properties within the development alto.
Mr. David Picek
June 27, 1989
Page 3
2. The developer shall also, within 43 days of execution of this
letter, prepare a preliminary site plan for review and approval
by the HRA of the proposed development site. This site plan
shall also include typical elevations and floor plan layouts of
the townhouse.
3. The developer shall have 60 days to complete preliminary
negotiations for site acquisitions.
4. Upon completion of preliminary negotiations for the site
acquisitions and the development of the alto plan, the developer
and the City will agree to meet to prepare a draft developer
agreement consistent with this Letter of Intent. This
development agreement shall superceds this Letter of Intent in
terms of the proposed financing structure of this project.
This letter of intent shall, expire on September 1, 1989, unless
mutually amended and/or modified by the Monticello Housing and
Redevelopment Authority and Scottwood Corporation.
Sincerely,
�• u
Chairman
011ie Roropchek
Secretary
Monticello Housing and Redevelopment Authority
OlAd
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