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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-