HRA Agenda 10-04-1989AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, October 4, 1989 - 7:OOPM
City Hall
MEMBERS: Chairperson Al Larson, Ben Smith, Lovell Schrupp,
Everette Ellison, and Tom St. Hilaire.
STAFF: Rick Wolfsteller, Jeff O'Neill, and 011ie Koropchak
GUEST: Pat Pelstring and David Ficek.
1. CALL TO ORDER.
2. APPROVAL OF THE SEPTEMBER 6 AND SEPTEMBER 14, 1989 HRA MINUTES.
3. CONSIDERATION TO HEAR AN UPDATE OF THE GILLS PROPERTY.
4. CONSIDERATION TO REVIEW THE AGREEMENT BETWEEN THE HRA
AND BDS, INC.
S. CONSIDERATION TO REVIEW DAVID FICEW S HOUSING REDEVELnPMENT
PROJECT AND SURVEY RESULTS.
6. CONSIDERATION TO HEAR TIP CONCEPTS AND PRELIMINARY APPROVAL
FOR THE USE OF TIP: Manteq International, Inc.
Tapper, Inc.
Remmele Engineering
Cardinal IG
7. CONSIDERATION TO REVIEW CITY COUNCIL TIF DISTRICT FOR
SEVENTH STREET ALIGNMENT AND EXPANSION.
8. OTHER BUSINESS.
9. ADJOURNMENT.
MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, September 6, 1969 - 7:OOPM
City Hall
MEMBERS PRESENT: Chairperson Al Larson, Ben Smith, Tom St. Hilaire,
Everette Ellison, and Lovell Schrupp (late).
STAFF: Jeff O'Neill, Rick Wolfsteller, and 011ie Koropchak.
GUEST: Jerry Zimmer and Pat Pelstring.
1. CALL TO ORDER.
Chairperson Al Larson called the HRA meeting to order at
7:05PM.
2. APPROVAL OF THE AUGUST 2, 1989 HRA MINUTES.
Chairperson Al Larson made one addition to the August 2, 1989
HRA minutes, Item 10. Consideration to Review and Discuss the
Billing Statement from Business Development Services, Inc.
addition to include that the HRA would like to be advised
up front as to when BDS. Inc. billing clock begins to run on
individual projects other than TIF projects.
Ben Smith made a motion to approve the amended August 2, 1989
HRA minutes, seconded by Everette Ellison. Passed 4-0.
3. CONSIDERATION OF A HSP PRESENTATION AND REVIEW OF FINAL PLANS.
Mr. Jerry Zimmer of the NSP St Cloud Region Office informed
the HRA of the 5,124 square foot maintenance building to
be constructed in the Oakwood Industrial Park, construction
to begin within days. The building will include a small
office and have six garage stalls, with employment of
eleven. The maintenance building serves . the areas of
Monticello, Big Lake, Becker, Rogers, St. Michael, Hanover,
and rural Dayton. Storage will consist of poles, wire,
street lights and some transformers, and be screened with
a cyclone fence. Chairperson Larson thanked Mr. Zimmer
for his time and presentation.
4. CONSIDERATION TO HEAR A PRELIMINARY CONCEPT FOR USE OF TIF
FOR COSTS ASSOCIATED WITH THE GILLS PROPERTY.
Jeff O'Neill informed the HRA members that the city has taken
a pro active approach on the Gillo property stating that
Gille's Auto hes an illegal auto license, constitutes
blight and public nuisance, and is in violation of the
City Zoning rdinance (expansion of an existing non-
conforminges nce 1976). The City has two options:
1) Enforce City Ordinance or 2) for the City or NRA
to work with the property owner on a relocation site and
to research lend and soil correction costs. The HRA
could seek land permission entry from the owner for soil testing and
substract the testing costa from the land acquisition costs,
HRA Minutes 9/6/89
Page 2
4. CONTINUED.
The HRA recalled when Mr. Metcalf appeared before the NRA
about a possible multi housing project in that area and the reslstence
from the neigbhorhood. It was projected that the increment
generated from single housing wouldn't cover the anticipated
project costs. The HRA felt it was the sellers responsibility
to disclose of any underground tanks to a buyer. The HRA
requested City Staff to confirm seller/buyer responsibility of
disclosure, check on state funds available for clean-up, and
investigate the time frame for development of a PCA plan
for abandon tank removal. The HRA members recommended that
Jeff O'Neill, Gary Anderson and the City Attorney continue
applying pressure on Gille's Auto for the violation of
the City Ordinance (expansion of a non -conforming use since
1976). The HRA concluded that this was not the time for HRA
involvement however wants to be kept informed. The HRA
hasn't turned down the project.
S. CONSIDERATION OF AN UPDATE ON MANTEO INTERNATIONAL, INC.
(BOYLE PROPERTY).
Pat Pelstring informed the HRA that he has spoke with Stewart
Wilson regarding the uncompleted business plan and the updated
financial statements. Plans were to meet the October Omni
financial meeting. Norman Strand indicated that Manteq
plans do include expansion to Monticello. Koropchak indicated
a letter was mailed to Mr. Boyle of the TIF requirements and
the HRA position for a County recorded copy of the subdivision
and the need for a drainage plan. Other builders have been
contacted for alternative sites.
6. CONSIDERATION TO REVIEW SITE LOCATIONS FOR DAVID F10EK PROJECT.
Pat Polstring responded to David Ficaks Master Plan which
included four districts and recommended the HRA commit to
only Area A. Mr. Ficek researched the market price with
a conclusion of $60,000-$80,000. He is researching the
possibility of continued vacant property further to the
cast for project feasibility. Mr. Pelstring would need
to verify the area as a qualified Redevelopment District.
Koropchak informed the HRA that some 500 surveys were mailed
out and a first look of a good return. Mr. Ficak will tabulate
the survey and present the HRA with a copy of the results.
Mr. Ficek needs to develop a site plan and acquisition/
redevelopment costs for NRA review.
7. CONSIDERATION OF AN UPDATE FOR THE EXPANSION OF SEVENTH STREET.
Jeff O'Neill informed the HRA members that The Lincoln Companies
has a signed letter of intent from K -Mart but no signed lease.
City Council has two alternative for the seventh street aligment.
One, original plan of a curved road aligment and second, a
straight road alignment with a estimated $200,000 acquisition
cost for an additional approximate 50,000 eq ft of retail/
HRA Minutes 9/6/89
Page 3
7. CONTINUED.
commercial development. The Lincoln Companies can live with
either alignment, however, K -Mart has not approved
parking spaces constituted by either road alighment. Lincoln
does agree that the larger retail /commercial lots to the
west would encourage larger developments. Staff pointed
the straight road alignment would also serve as a buffer
between the retail/commercial zoning to the south and the
PZM zoning to the north. The original road alignment
was approved by previous owner, Rosewood Corporation, and
not The Lincoln Companies.
Mr. O'Neill presented the HRA with the curved project costs:
Road to Minnesota Street, $161,000; land value of Lincoln
Property, $43,000 plus excess land, $8,000 for a total
of $212,000. Straight project
costs: Road to Minnesota Street. $151,000; Pratt, 12,000
sq ft $61,000 (.51), Holthaus, 28,000 sq ft $56,320 ($2.00).
Demolition $3,000, subtotal $271.320 plus Kraemer 1.9 acres
$197,000 ($1.41), Demolition $7,000, subtotal $204,000
for a total of $475.320.
Mr. O'Neill suggested the HRA consider the use of TIF for
the acquisition of the Pratt, Holthaus, and Kraemer properties
plus demolition costs for a total of $307,320 less the
lend sales of Kraemer ($70,000) and Holthaus ($17,000) for
net cost of $237,320. Road construction would be assessed
the benefitting property owners. Mr. Polstring suggested
the land owners negotiate with their renters for a
signed renters compensation agreement for hardship or
relocation cost.
The HRA felt the benefitting developer could purchase the
Holthaus and Pratt property (plus demolition) and put the
road in and still recover the approximate $235,000 ($233,250)
through the K -Kart and future larger commercial developments.
The NRA was not convinced that the proposed $307,320 cost
for the acquisition of land could be justified or
recovered by the HRA in exchange for an approxiate addition
of 50,000 aq ft of land. Staff was unable to put a
dollar value on the anticipated future larger developments.
Staff indicated the project was the straight road alignment,
a public purpose (public improvements) which would encourage larger
development of Monticello retail/commercial area which
the approximate annual $100,000 increment would retire the
debt service in 3-31 years. The Lincoln Companies project
would create some 165-180 part time and full time jobs
and consist of 86,000 sq ft.
HRA Minutes 9/6/89
Page 4
7. CONTINUED.
Additional commence by the HRA: City Council can establish a
TIP District, how would the HRA look, Lincoln Companies have
not indicated a no go on the project without the use of TIP,
acquisition for street improvements and assessment should be
handled under the normal city process, K -Mart lease decreases
and Lincoln Companies values and revenues increase, if
had choice would rather see a Target, do the right thing
up front, HRA is drivers seat, relatively small cost to
the City for curved road alignment.
Mr. Pelstring reminded the HRA that the key issue tonight
was to make a finance decision on the use of TIP as
Lincoln Companies anticipate a September 27 beginning
grading date. Staff informed the HRA that its suggested
recommnedation was not for direct assistance to the
developer,hovever, did agree it was an indirect assistance
which encourages the future retail/commercial development in
Monticello. Hopefully opening the City of Monticello
as a Regional Retail/Commerical Area.
The HRA considered the TIP policies which determines the
project valuation. Out of the eight considerations:
4 were yea, 2 were no, and 2 were maybe.
The HRA recommended the benefitting property developer
(The Lincoln Companies) acquire the Holthaus and Pratt
properties and put in the Seventh Street straight road
alignment to Minnesota Street. Also, the HRA
recommended the use of TIP for the acquisition of the
Kraemer property (;197,000) with an anticipated land
resale of $70,000 to $100,000. The City then to assess
the benefitting property owner (Hornig) for street
improvements along Seventh Street with an approximate
coat to the tax payers (TIP) of $100,000.
B. OTHER BUSINESS.
Mr. Pelstring presented the HRA with a revised Agreement
between the HRA and BDS, Inc. The HRA tabled the itom
to the next meeting.
9. ADJOURMENT.
Everette Ellison made a motion to adjourn the HRA meeting,
seconded by Tom St. Hilaire. The meeting adjourned at 10:30PM.
011ie Koropchak
HRA Executive Secretary
LINCOLN COMPANIES, INC. (K -MART)
r
92,000 aq ft facility (86,000 eq ft K -Mart)
12 acres acquired (TIF using 9 acres)
92,000 aq ft per $20.00 - $1,840,000
392,040 aq ft per $ 2.00 - $ 784,080
TOTAL EMV $2,624,080
$100,000 $2,524,080
X .0330 x .0515
$ 3,300 $ 129,990
New Capacity Value $133,290 Taxes $109,419
Original Capacity Value 2,636
Captured Capacity Value $13(..654
Tax Capacity Rate 82091
lax Increment annually J107.255
Eight year tax increment $858,040.
(5"/ \0.%N
SOURCES MIO USE STATEMENT - ALTERNATIVE TWO
K -MART FACILITY GENERATES f IN ANNUAL TAXES
1?4 V4 M V-0 'SO 4A f
VV I
I
PROUECT ITOTAL ITIF ILAND (ASSESSMENTS
I TOTAL
COMPONENTS ICOST I ISALE ILINCOLN RIDGE RIDGE
KRAMI
I I I 7S$I MONT VIEW
ER 1
I I
I I I I
I SO
K -MART STRUCTURE I�..�. I I I
I $0
7TH - LOCUST TO MN 1$151,000 I I I
I $O
7TH - Md TO ELM 1 (167000)1 1 1
1 $0
MINNESOTA AVE 1 I I I
$0
—
LAND ACOUSITION/PER FT 1$314.J2U I I 1I
1 �.. .. a7 1�
�
$0
PRATT $0.57 $61,000 1 1 $61,000 1Z f0 I
$61,000
HOLTHOUS $2.00 $56,320 I 1 $39.320 617,000 I ,i,,�oo �1
�•a
1 $56.320
KRAMER $1.41 $197,000 1 1$127,000 1$70.000 1
I $197,000
SPRINGBOARD $0 $0
DEMOLITION EXPENSE 1 $10,000 I 1 I
$O
PRATT $3,000 I 1 $3,000 1 1
I $3.000
KRAMER $7,000 1 I $7,000 I I
$7,000
RELOCATION COSTS 1 1 I I r
$0
STORM SEWER I �� I I I
$0
SEWER I I I I
`
I $0
_
WATER
— 1$475.320 5237,320 x`$87,000 * $0 $0 $0
$0 "*$324,3200
Pratt house now vacant, no relocation cost expocted
Kramer house contains two rental units, one rented to son.
i• Lincoln Company expressed Interest in remaining Holthous prop at $1.00 sii ft
Remaining Kramer property estimated sale value at $1.00 souaro foot.
1
K -MART DEVELOPMENT MEETING - 9/6/85
DISCUSS CRITICAL PROJECT COMPONENTS - TIME LINES
TIMETABLE
1989 1990
SEPT IOCT NOV DEC JAN FEB MARCH APRIL MAY JUNE JULY AUWS'
I I I I I I I I I I I I
Council Meeting Dates1�119i31/3.171Nas'IR/a a. I��I"
Publication Deadlines ICV 9q 1' 1� Y. /!.)� 1�'�:�I• s, 1;9" 1_1_____1_1_-_
HRA meeting dotes Ilt_—ISL_I_S-3_I7_IZ_II_I_I_I�_
CRITICAL EVENTS 1 I I I I I I I I I 1 I
I I I I I I i I I I I
BUILDING CONSTRUCTION I
Submit Bldn Permit App1_1_I�I�I___I�I�I I_I_1—I
Receive euildng Permt
Initiate Site Prep
Intitiate Bldng Const
Receive Occup. permit
PUBLIC IMPROVEMENTS
Establish Rd
Order Feas Study
Publish Hearing
Order Plans/Specs
Approve Plans/specs
Develop Finance Plan
Conduct Public
Authorize Bid
Award Bids
Order Project
Complete Project
Assessment
Adopt Aaaesament Roll
BONDING REQUIREMENT I I I I I I I I I I I I
Pub'ish Hearing
Establish Financo
Authorize bid
Award bid
TIF REQUIREMENTS 1 1 1 I 1 1 1 I I I I I
Establish Finance Planl_____I_�_I_____I_____I�I_—_I_____I
Acquire properties
11
September 6, 1989 HRA Meeting
Chairperson Al Larson, Ben Smith, Tom St. Hilaire,
Lovell Schrupp, and Everette Ellison.
The HRA recommended the benefitting property owners
(The Lincoln Companies) acquire the Holthaus and Pratt
properties and put in the Seventh Street straight
road alignment to Minnesota Street. Also, the NRA
recommended the use of TIF for the acquisition of the
Kraemer property (;197,000) with an anticipated land
resale of $70,000 to $100,000. The City then to
assess the benefitting property owner (Hornig) for
street improvements along Seventh Street with an
approximate coat to the tax payers (TIF) ofA100,000.
Lincoln TIF
Seventh Street
Straight alignment $151,000
$151,000
Pratt 12,000 sq ft 61,000
Demolition 3,000
Holthaus 28,000 sq ft 56,000
Kraemer 1.9 acres $197,000
Demolition 7,000
Relocation
Total $271,000 $204,000
Less assess Hornig 37,750 1nn_nnn lees Resale
$233,250 $104,000
The HRA considered the TIF policies which determines the
project's valuation. 4 - yes 2 - no 2 - maybe
1i
RDS
i euinen Denwpment &Nw m Inc.
AGREEMENT BY AND BMWEEN BUSINESS DEVELOPMENT SERVICES INC.
and the
CITY OF MONTICELLO
HOUSING AND REDEVELOPMENT AUTHORITY
This Agreement made and entered into on the _ day of
April, 1989, by and between the Housing and Redevelopment
Authority of the City of Monticello, a Minnesota Municipality,
(hereinafter referred to as •HRA•), and Business Development
Services, Inc., a Minnesota corporation (hereinafter referred to
as •BDS•).
WHEREAS, the City of Monticello believes that communities
are dynamic In the sense that they are constantly changingt and
WHEREAS, the City of Monticello believes that the economy of
its community is shaped by its active economic development
programs and
WHEREAS, the City has initiated its economic development
program through its Housing and Redevelopment Authority and
utilises Tax Increment Financing as a key component of its
economic development program( and
WHEREAS, DOS seeks to assist the continued growth of the
City of Monticello to provide economic development services
and technical, professional assistance for its Housing and
Redevelopment Authority and its Tax Increment Financing program.
MW SPF M BM M OW • R= 00 0 AWN Aon A MM UM 0 MM 6108&6151
NOW, THEREFORE, BASED UPON THE MUTUAL PROMISES AND
CONSIDERATIONS CONTAINED HEREIN, THE PARTIES HERETO AGREE AS
FOLLOWS:
I. SCOPE OF SERVICES
A. BDS will provide ongoing consultation services as
requested, to the Housing and Redevelopment Authority
and the City of Monticello to assist these agencies in
the appropriate design of the economic development
program.
B. BDS will provide marketing assistance on behalf of the
City to identified prospects on a case-by-case basis.
Those services would not be reimbursed. At City's
option BDS will be reimbursed on an hourly or fixed fee
basis.
C. BDS will provide preliminary financial review, analysis
and recommendations for the structuring of specific TIP
development proposals.
D. BDS will assist City staff and/or its designate in
negotiating specific provisions of the development and
assessment agreements associated with the City's TIP
projects.
E. BDS will assist in maintaining communications between
City staff members and project developers utilising the
City's TIP assistance.
ol
r
P_ BDS will assist in the collection of the required
technical and financial data, draft modified TIP plans
and coordinate the dissemination of the plans and
related materials to other public agencies and will
review and confirm data with the City's bond counsel
and fiscal consultant.
G. BDS will assist in the preparation of materials for
public hearings and the presentation of the appropriate
information with the City and the Rousing and
Redevelopment Authority.
R. BDS will monitor and assist in the collection of
developer repayments, lettere of credit and/or
securities as required.
I. Other duties related to the City's economic
development program and TIP programs as directed
by the City and/or Rousing and Redevelopment
Authority.
II. PAYMENT FOR SERVICES
A. The City agrees to payment for services as described
in Section I, as followsi
1. 14arkotina Assistance. BDS will provide marketing
assistance to the City of Monticello's prospects at
no charge through the preparation of proposal
information. Once a prospect has reached the stage
where a letter of intent is to be mailed or a
prospect has requested a meeting, the City at its
discretion agrees to hire BDS at its standard fee
of $75 per hour, or on a negotiated fee schedule.
2. Establishment of Tax Increment Pinancinq Projects.
At the City's determination, BDS will be utilised
to assist in the design and preparation of TIP
documents for the community's major projects.
Fees for these services are as follows:
a. For completion of data preparation, processing
and certification of newly established or
amended Tax Increment Financing District -
$3.850.00.
b. For the completion of related development and
assessment agreements - 0850.00.
c. The City and BDS recognize that the development
of tax increment financing projects will be
conducted on a contingency basis. City payment
for services shall include all variable staff
time and expenses associated with each project.
3. Consultation for TIP projects.
The City will, at its discretion, seek to complete
the data and structuring for the community's
smaller TIP projects. on this basis, BDS will be
retained on an hourlv fee of $75.00 to support the
-4-
process and to complete the appropriate
documentation.
B. BDS also agrees to provide an overall accounting of
hours expended and fees that have been generated
through this contract. It shall be BDS' and the HRA's
intent to provide an overall hourly average rate, con-
sistent with BDS staff fee schedule.
I
-5-
III. ADDITIONAL PROVISIONS
A. The City and BDS reserve the right to terminate this
Agreement upon 60 days written notice.
B. Each party to this Agreement binds himself and his
partners, successors, executors, administrators, and
assigns to the other party of this Agreement and to the
partners, successors, executors, administrators, and
assigns of such other party, in respect to all
covenants of this agreement. Except as above, neither
party shall assign, sublet, or transfer his interest in
this agreement without the written consent of the
other. Nothing herein shall be construed as creating
any personal liability on the part of any officer or
agent of any public body which may be party hereto, nor
shall it be construed as giving any rights or benefits
hereunder to anyone other than the parties to this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CITY OF MONTICELLO
HOUSING AND REDEVELOPMENT
AUTHORITY BUSINESS DEVELOPMENT SERVICES INC.
BY BY
ITS Michael J. Mulrooney, President
ATTEST BY
ITS Petrick M. Pelstring, Vice President