HRA Agenda Packet 02-09-1983AGENDA FOR THE MEETING OF HRA
February 9, 1983
Monticello City Hall - 6:30 P. M.
Members: Phil White, Chairman, Don Cochran, Vic Vokaty, Bud
Schrupp and Jack Reeve.
1. Call to Order.
T. Approval of the Minutes for the meetings of January 5, 1983
and January 19, 1983.
New Business
3. Consideration of a Housing Proposal from Construction V.
4. Consideration of an Offer to Sall tho "Old Ford Garage".
5. Consideration of a Request to Amend the Redevelopment Plan
Boundaries.
old Business
6. Consideration of Establishing a Regular Format for Con-
ducting HRA Buoinoea.
7. Consideration of Eotablinhing Finance Guidelineo for
T.I.F. Proposals.
S. Adjournment.
MINUTES
HOUSING 6 REDEVELOPMENT AUTHORITY MEETING
January 19, 1983 - 8:00 P.M.
Membara Present, Jack Reeve, Don Cochran, Bud Schrupp, Vic Vokaty,
Phil White and Tom Eidem.
Members Absent, None.
Acting Chairman Cochran called the meeting to order. There was a
motion by White to appoint Cochran the Chairman of the HRA for 1983.
A point of information was raised concerning the potential conflict
that is being investigated as to whether or not Cochran can serve
on both the Planning Commission and the HRA. White withdrew the
motion, motion by Reeve, seconded by Schrupp and carried unani-
mously appointing Phil White as Chairman of the HRA for the year
of 1983. Administrator Eidom reviewed the reason for the special
meeting. Cochran and Reeve, who had taken the Poehler housing
proposal to the Planning Commission reported that there were no
objections voiced by that Commission. The Planning Commission
also noted that if rezoning will be required, they are likely to
look favorably upon it. Eidem discussed various possibilities for
acquiring and/or granting options on Lots 13, 14 and 15, Block 51,
to promote this development. A motion by Cochran, seconded by
Reeve and carried unanimously to offer the City Council $1.00 and
other good and valuable consideration in exchange for a contingency
option on Lots 13, 14 and Lot 15, less the south 15 feet of Block 51,
City of Monticello, said option to have a term of one year. Eidem
noted that he will take this offer to the City Council on January 24th.
Considerable discussion again followed regarding Mr. Pochler's request
not only for an option, but that his project be considered for tax
increment financing. When Mr. Pochlor came before the HRA on Jan-
uary 5th, he noted that his request for an option also included the
request for tax increment financing since according to his figures
at that time, he would need both to make it financially operative.
Eidem pointed out that any motion now by the HRA to grant Mr.
Poohlor an option on the land would at least imply that Mr. Poohlor
has boon given tentative approval for a tax increment financing
package. Eiden did nolo that when the data bocomos more finalized,
it still will be abuolutoly critical that all the numborn make the
plan a workable plan and that the HRA is not bound by going ahead
with this if it becomes economically unfeasible. A motion by Schrupp,
second by Vokaty and carried unanimoualy to offer to Joe Poehlor, a
developer, a contingent option on Lots 13, 14 and 15, lose the south
15 feet of Block 51, City of Monticello, for the amount of $200, said
option for the express purpose of preparing and sulmitting a loan
- 1 -
HAA Minutes - 1/19/83
application to Farmers Home Administration for the purpose of construc-
ting low/moderate income elderly housing, and further, said option shall
expire at SOO P.M. on May 9, 1983. A motion by Reeve, seconded by
Cochran and carried to set the next HRA meeting for February 9th, 1983
at 630 P.M. in the City Hall. There being no other business, White
adjourned the meeting for the HRA.
Thomas A. Hidem
City Administrator
- 2 -
TO: ARA COMMITTEE, Phil White, Jack Reeve, Vic Vokaty,
Bud Schrupp, Don Cochran.
FROM: Tam Bidem, City Administrator
DATE: Wednesday, January 19, 1983.
TIME: 8:00 P.M.
PLACE: Monticello City Ball Conference Room.
SUBJECT: We aro having a meeting this evening to discuss pur-
chasing from the City the Option on Lots 13 and 14 and
part of Lot 15 and also the Joe Poehler proposal.
MINUTES
HOUSING 6 REDEVELOPMENT AUTHORITY MEETING
January 5, 1983 - 7:00 P.M.
Members Present: Jack Reeve; Don Cochran, Bud Schrupp and Vic
Vokaty.
Members Absent: Phil White.
The meeting was called to order by consensus. A motion by Reeve,
seconded by Schrupp and carried unanimously appointing Cochran as
acting chairman in the absence of Dr. White. A motion by Schrupp,
seconded by Vokaty and carried unanimously to approve the minutes
of November 29, 1982 meeting as read.
Cochran raised the question concerning items 03 and 04 on the agenda
and whether or not they should be handled as separate issues or as
a single combined issue. Eidem explained that item 04, Pochler's
request for an option really seemed to came after a discussion of
whether or not an option on Lots 13, 14 and 15 of Block 51 was of
interest to the HRA. Cochran raised a question as to whether or
not a discussion of this option would have come up if there were
no proposal by a developer also on the agenda. Eidem indicated
that in his estimation it would not be a critical issue, although
it might fall into the category of general discussion. It was
the consensus of the HRA that discussion on whether or not to
pursue an option on the land be postponed until after the dia-
cuseion with Mr. Poohlor on the grounds that if the development
proposal did not meet with the HRA's approval, the item relating
to the option became irrelevant. Mr. Joe Poohlor introduced
himoolf and provided some background into hie development pro-
posal. He indicated that he was interested in developing a
Farmers Homo Administration 515 Housing Project for moderate
income elderly persons. He stated that he was very interested
in Lots 13, 14 and 15 in Black 51. fie said that he had conducted
an extensive survey to gauge interest in such a project and of
109 respondents, 56 stated that they would definitely move into a
facility of this sort wore it constructed. Pochlor also provided
background concerning his previous project in Waterville and his
proposals in Goodhuo, Minn000tq and a development project he is
working on in Colorado. Pochlor also provided came personal back-
ground 90 that the NRA might have a better fool for the character
of the development. Poohlor noted that he wan formally requesting
an option agreement on the land, since that would be required for
him to subait his preapplication to Farmers Homo Administration and
further, he was also requesting that the HRA utilize tax increment
for the acquisition of the above referenced parcels, since the
- 1 -
HRA Minutes - 1/5/83
market price for the land seemed unusually high for the nature of
this project. He explained that the return on the investment in
land would be severely limited were he required to pay the full
asking price whereas a alightly reduced cost through tax increment
financing would make the project financially feasible. The HRA
conceded that they could not really grant the option since
action had not been taken earlier and the land was not yet in the
L HRA's name. A motion by Reeve, seconded by Schrupp that agenda
item 03 be deferred to January 19, 1983, and that City Staff pre-
pare the following data for consideration at that time.
1. A complete range of option alternatives on the above men-
tioned parcel.
2. A preliminary type tax increment finance budget which would
illustrate possible land Gales alternatives.
This was carried unanimously.
A motion made by Schrupp, seconded by Vokaty and carried unani-
mously to postpone action on agenda 14 until January 19, 1983,
so that a preliminary presentation of the project can be made
by the HRA members to the Monticello Planning Commission. By
concensus, a special meeting of the HRA was Get for 8,00 P.M.,
Wednesday, January 19, 1983. A motion by Reeve, seconded by
Schrupp and carried unanimously to move items 15 and 6 to the
regular February moeting of the HRA. The date for which will
be set by consensus at the January 19th mooting.
Acting Chairman Cochran adjourned the meeting.
-:K� __
.- "�' - L
Thomas Bidam
City Administrator
- 2 -
AGENDA SUPPLEIENT
Preliminary Comment.
HRA Agenda - 2/9/83
It might be wise to adjust the format of the agenda for this
meeting. Because items 6 and 7 are primarily work related
items, I automatically put them at the end after the general
public questions had been addressed. However, considering the
nature of the requests, it might be best to address the work
items prior to the decision making matters that come up in
items 3, 4 and S. Frankly, and based on the limited amount
of knowledge I have of the proposals, items 3 and 5 to me are
not particularly attractive. Item p4 is an interesting pros-
pect, but the dollar amount makes the entire proposal absurd.
At any rate, you may wish to amend the agenda so as to address,
especially item 07, before addressing the proposals.
3. Consideration of a Housing Proposal from Construction V.
Late last fall, I spoke with two representatives of Construction
V, Inc., about their proposal to construct a 12 unit apartment
house and possibly some office space in the City of Monticello.
They inquired at that time as to the workings of tax increment
financing and whether it would be appropriate. In our pre-
liminary discussions I said that tax increment financing does,
in fact, work for private financing housing units and that we
could surely investigate it. The one problem with the proposal
is that the developers already own the land involved. It was
thought at that time that it would be possible for them to sell
the land to the HRA at its market rate and then buy it back from
the HRA at a much lower rate, thereby creating some up -front
capital to assist in their construction. This is a legal me-
nouver, but I am not sure we want to got involved with it. I
have done this type of tax increment financing wherein we buy
and sell to the same party in another community and while legal,
it sots an uncomfortable procodont for other developers and also
croatca soMO animosity amongst the local developers. I think
that in tho dovolopment of guidelines for tax incromont financing
proposals, this particular gambit should not be eliminated, but
should be clearly defined whore it can and cannot be used. I
think there might be in the future special typo circumstances
that we may want to utilize ouch a maneuver. However, I am
not sure this is one of those typos of circumstances. I got
the improocion from the developers that they intend to go
through with construction regardless of tax increment financing.
As you may recall, part of the IXI proposal and one of the
integral concepts to tax increment is that the development would
M_
HRA Agenda - 2/9/83
more than likely not occur if the City did not intervene in some
manner. I am not sure that we can use this criteria for this
proposal.
The proposal that Construction V has submitted is substantial
in length and therefore I have not made copies for each of you.
I will bring them along. It is difficult for me to prepare any
kind of recommendation in the absence of fo=mual guidelines being
established. I find it to be crucial that the direction and the
method of proceeding in that direction be clearly established be-
fore I can make any type of recommendation or defend any type of
position.
REFEREHCES3 Site maps of the proposed project.
=Wl=
r�
a"
........ ......
! . �^ /+•+ rw''""� � • a . 4 j •a! �� • ��. � �, ��� r, `r: -ter! �,r,� ;..� 0.�
•+tea!
• . �.•,,,,. '= ;y. '4� _'� .'. Q,a. ` iii• •• a16 •.'.' �?
.s� �•' +y �
.40
+ .V� ice• • 1est.
.t',M p►SA' • `
04
`� v
1
AQ agriculture -open space T
RI single family residential
R2 single & two family res.
R3 medium density res.
R4 mobile home park
RB residential business
61 neighborhood bList6ss
�• B2 limited business
;" �., ;' • ` • .�__ A, w 83 highway business
F 84 regional business
I1 light industrial
f �•: -" `, / 12 heavy industrial
wild & scenic river
:e all
war -
i►sUB![CT
B3
y
83
" f
12
HAA Agenda - 2/9/83
4. Consideration of an Offer to Sell the "Old Ford Garage".
Attached as a reference is a letter from Monticello Ford re-
ferring to an offer to sell the land that was made over a year
ago. I spoke with the Mayor about this and he said that since
the City did not respond to the offer at the amount stated he
thought at that time the matter had ended. I suggested
to the Mayor that since the property is within the redevelop-
ment district, we take this before the HAA. I think this is
important property for the HRA to consider for redevelopment.
I do think the asking price is outrageous. The other difficulty
is that regardless of what the price is, we are not sitting with
a potential developer in hand at this time. I realise that this
property meets several of the criteria to qualify for tax in-
crement in that it is a substandard building that is a hazard
to health and public safety, is a blighted property and would
certainly be expensive to be developed effectively. The only
decision the HRA is faced with at this time is whether or not
to pursue negotiations with this particular piece of property,
and I think perhaps we should. Considering the asking price,
however, I don't think we have to move with undue speed. If
the owner is insistent that the property is worth the asking
price, I suspect we will have considerable time before it
changes hands.
REFERE;NCESt A copy of the latter from Monticello Ford, a copy
of my response, end a copy of the site in question.
=1C
® ,�Iadty Monticello
tam° Ford, Inc.
MONTICELLO, MINNESOTA 55362-0068
1-94 & Highway 25 Box 68
PHONES: Monticello - 295.2056: Twin Cities - 421-6595
"In the Land of Lakes, get your Ford at Flake's"
Jamuuy 12, 1983
Mayor Arve Orimamo
City of Monticello
City Hall
Monticello, Minnesota 55362
Dear Arvet
A year ago we had a meeting and at that time I indicated to you that
I had parties interested in the purchase of our downtown property. You
informed me at that time that the city night be interested in purchasing
this property. At that time I offered to sell the property to the city
for $100,000.00. This past year I have not listed the property so that
I might be able to meet my commitment in the event you decided to take
my offer.
A realty company has again approached the and they have someone that would
be interested in the property for repair and use it as is. After this
length of tine I must assume the city does not wish to pick up the offer
made in my Jan. 25, 1982 letter.
I will hold my offer of $100,000.00 to the City open for 30 days from the
above date. After that date I will be listing the property for $115,000.00
and would have to have that amount to pay the real estate commission.
I would certainly appreciate your letting me know if there is any interest
on the part of the City of Monticello so that I can get on with the disposal
of this property. With kindest personal regards, I am....
Yours very truly,
MCNTICELLO FORn, INC.
c•
Aawren a V. Plake
Preeidbht
LVvrvm
J
Now 18121 295- 2111 n eeDD UM 18121 373-5198
of Mo.Eice[[o
2bO East Broadway 1
1.. RI.4. Box 83A 1
W)NML10. MIN. 55382
TO: I,arry :'lake
Do, January 24, 1983
FROM: Tom Eidem, City Administrator
RE: Your letter of January 12, 1983 Feyarding Downtown Puking.
MESSAGE: I will Lo taking your latter to the City Itouaing t: Rodovelopmant
t.utllority at their meeting inrLPabruary in ardor to guago their
Intoreut in thio prol,orty for redevelopment. I will got back
in touch with you after their mooting.
Fee Copy
1
tx.`NCH .
GE -
1
CO `•ry.rv�u..� uqr�
i
WOMtCN'S '4xcv A Nw
t�rT�X�/L GLINIG
tlannswalb p�nr.� � 9
_lam
r%-64-rTlN*j Arm^
�y.
VCNC
1 Cm
'BP.fiIOQ� g�firp I�,j,�,IGO CO.
• i
R I V E R
i. 3.. t�
FRONT 0 3T
6 t0 6 10 6—
a w
5
g5-- 54--- �P,O v:ql+ �Q `lob
n
in wl w Q 0P P
5a —t 5— a1 5— Q
66 60 66 66 60 66 66 60 !
60 - 66 66 60 66 66 60 66 66 66
CI� �15 tt" �5 1{� �i5 IIS �i5
a ur
N fA (1) a
In m a �_ a
IL
10 1 10 1 0 t 10
33- 336, 60
(C 0. HWY. 75 )
3jSS -33 33 S 3
g 15 I6 t5 6 15 6 15 {
., n ., E
IE
5e ai 5 ffi1 a a1 5a at
6G 66 as JAL -e6 66 66 66
co
66 66 66 66 66 66 66 66
0 t4 6 In 10 6.+ 10 6 10
r
30- 3i
r l98 �IS2
r �
1
I
I I ! �4ifi
hr dti>; cEc ' Uusras�.., o
DE71Ez-v on �E��
dl
I I 12�uY
13
I M a��aveh..p� I I 1 I
j I T�n�F• C fI j
Moarlcv�co I� w � n+'Y I � 3
w fa�o,r+yc. o"cq yo� tolvEL
io6.6 ���11—�.-it.t T9 +— sty-.L�►
&oc,t &
HILA Agenda - 2/9/83
5. Consideration of a Request to Amend the Redevelopment Plan
Boundaries.
Mr. Warren Olson of Olson Electric called me last week to
again investigate tax increment financing for them to construct
a new building, expand their business and theoretically create
new jobs. The property they would like to build on is on the
west side of Hwy 25 near Gould Chevrolet. When he called, he
said he was very interested in tax increment financing and
perhaps industrial development revenue bonds. I informed him
that IDR's might not be effective unless they were looking at
a project in the half million dollar range or above. I also
.inotod that since they already own the land the tax increment
probably would not be well accepted. His response was that
they would gladly sell it to a relative or someone else that
the HRA could buy it from and then he in turn could buy it
from the HRA. The area in question also has no sewer and
water services which would shed some light on the development.
I also pointed out to him that not being in the redevelopment
area, it was not eligible for tax increment financing. He
wanted to know what it would take to have his property in-
cluded in the redevelopment area and I told him that he would
have to coma before the HRA. It is my personal opinion that
the area does not really meet the requirements or criteria
of the redevelopment plan. It 1s indeed vacant land at this
time but that is the only problem out there. Mr. Olson also
indicated that it would be doubtful that he would have a very
comprehensive proposal to show the HRA, since he did not wish
to spend money in developing an oxtonsive proposal if the
general feeling is to deny it. He did state at one point that
the scope of the development would be somewhat dependent on
the amount of assistance that he could gain, in that the greater
amount of assistance the larger the development. Based on the
vary limited information that I have on this proposal, I can-
not at this time land my full support to it. There are no
roforencoe for this agenda item.
Items 6 and 7 will be discussed at the moctine.
-a-