Loading...
HRA Agenda 02-03-1988i AGENDA MONTICELLO HOUSING AND REDEV%OPMENT AUTHORITY MEETING Wednesday, Februa 8; 1988 — 7:00 AM City Hall Members: Chairperson Ren Maus, Lovell Schrupp, Ben Smith, Al Larson, and Everette Ellison. 1. CALL TO ORDER. 2. APPROVAL OF THE JANUARY 6, 1988 AND THE JANUARY 26, 1988 HRA MINUTES. 3. UPDATE ON THE NEGOTIATIONS FOR TAX INCREMENT DISTRICT t2 PARCELS FOR A POSSIBLE ELDERLY HOUSING PORJECT 92. 4. NOTIFICATION OF MEETING AT THE SENIOR CITIZEN'S LOUNGE. S. RECAP OF 1988 MONTICELLO TAX INCREMENT DISTRICTS. 6. OTHER BUSINESS. 7. ADJOURNMENT. i MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY SPECIAL MEETING Tuesday, January 26. 1988 - 12:00 NOON Monticello Country Kitchen Members Present: President Ken Maus, Vice President Lowell Schrupp, Ben Smith. Al Larson, and Everette Ellison. Koropchak called a HRA special meeting for direction from the committee since another developer had contacted the HRA office for available assistance of Tax Increment Financing for a low to moderate income elderly housing project. Koropchak informed the committee of 1) Metcalf and Larson's proposed development for a 24 unit elderly housing project on the southwest corner of City Block 51. The project can materialize with or without the acquisition of the Jones' property if negotiations are unsuccessful. With the appraisals completed by St. Cloud Appraisal, Inc. , Stelton's property, Market Value of $15.500.00 and Monti Truck Repair's property, Market Value of $17,500.00. The described area is zoned B-4 and would require amending the zoning to PZM by the developer. 2) David Hornig. developer of a proposed 40 unit elderly housing project and three 12 unit low to moderate income family units on the Lucius Johnson property near the Monticello Mall. This property outside the Central Monticello Redevelopment Plan boundaries eliminates the use of TIP. 3) Professional Planning and Development Cumpany of North Mankato has requested the possible use of TIF to acquire the Eck property along Cedar Street and across the street from the Roindance Properties Project for a proposed development of two 24 elderly housing unite or four 12 elderly housing units. Ken Maus informed the committee that preapplicatlon deadline for FmHA loans is March 1, 1988. Koropchok was aware of Mr. Hornig's plan approval on the Planning Commission Agenda for February 9, 1988. If the HRA's goal is to proceed with the elimination of a blighted area on Block 51 then negotiations with involved property owners should be initiated and a request for rezone made preferably fortho February 9th Planning Commission meeting since they meet only once a month, and the Minnesota Statutories request a two week publication notice for a public hearing. A motion was made by Bon Smith that the HRA make the development of Block 51 it's first choice to assist an elderly project with TIP based on 1) this area had been earmarked by the HRA as a primo concern for some years. 2) it's In the created Redevelopment Tax Increment District 02, 3) it eliminates blight, and 4) it would help create pedestrian traffic for the retail /commoricaI businesses. The motion was seconded by Everette Ellison, with no further discussion, the motion passed 5-0. If this project is unforeseeablo. the HRA would consider assistance to the Professional Planning and Development Company. HRA Minutes - 1/26/88 Page 2 Everette Ellison made a motion electing Al Larson and Ken Maus to contact Joe O'Connor and the Stelton's for selling concepts of their respective properties (possible relocation sites, time limits, and fixed numbers). The motion was seconded by Ben Smith and without further discussion the motion passed 5-0. Koropchak will research moving and relocation expense requirements set by the Minnesota Statutory. Ben Smith is to contact Karen Hanson at the Senior Citizen Lounge to set up a meeting at the center with interested elderly persons for the higher quality townhouse livning concept. By general concensus of the HRA members, the HRA special meeting adjourned. 011ie Koropchak HRA Executive Secretary i MINUTES MONTICELLO HOUSING AND REDEVELOPEMNT AUTHORITY MEETING Wednesday, January 6, 1988 - 7:OOAM City Hall Members Present: Chairperson Ken Maus, Lovell Schrupp, Ben Smith, and Everette Ellison. Members Absent: Al Larson. 1. CALL TO ORDER. Chairperson Ken Maus called the HRA meeting to order at 7:03 AM. 2. APPROVAL OF THE DECEMBER 2, 1987 HRA MINUTES. Everette Ellison made a motion to approve the December 2, 1987 HRA minutes with Ben Smith second to the motion and with no further discussion the motion passed 4-0. 3. CONTINUATION OF THE ELDERLY HOUSING CONCEPT. Koropchak explained to the HRA members that Mr. Dan Carlson of Foster, Franzen, and Carlson had given her information he received from a Mr. 8111 Haldy of Monticello. The information was from Reallfe Cooperative of Mankota which appealed personally to Mr. Haldy's housing needs and also indicated Realife Cooperative's interest for such a project in the Minneapolis northwest suburbs/area. However, as per the HRA goals the committee will proceed to accomplish or explore it's first priority of elderly housing needs/options. Koropchak then presented the HRA members with a townhouse design prepared by Johnson, Sheldon, and Sorensen Architects, Inc. based on the input Mr. Sheldon received at the joint meeting with the HRA on December 8th. The general response from HRA members was good but a few comments were made about the two baths, 3 bedrooms, and double garages. Koropchak reminded the committee this was only a preliminary design and we must keep in mind our target investors. This particular design would need a one foot reduction par width of each six inside unite inorder to accommodate the required setbacks allowed by the city if constructed on a portion of Block 33 with front doors facing Cedar Street. Other block options discussed were Block G and Blocks 11 and 13 on the west side of Highway 25. The HRA needs to consider comparable cost to purchase vacant land versus the cost to purchase land and building which would mean demolition coat therefore raising the purchase price per townhouse unit. Ken Maus estimated the coat to purchase the three homes on Block 33 to be approximately 1160,000.00-5115.000.00. Kan asked Koropchak to check the appraisal of Block 13 which the City had appraised some years ago. The HRA role would be to convoy the concept to the present property owners, negotiate a purchase (three to six months option on property, possible trade, etc.), acquire and demolish property, and sell to a davoloper/buildor. Bon Smith is to contact the Crandall's HRA Minutes - 1/6/88 3. CONTINUED. and the Lindberg's for their input or expressed interest. Koropchak is to call Elk River Realty for the selling price of the Olson property, to check with local contractors for interest of concept, and to check with local banks for general guidelines for approved financing. 4. CONSIDERATION OF THE STATUS OF THE IXI PROPERTY. In addition to the reference and background information written in the agenda supplement on the IRI property, Koropchak reported to the HRA members that a Certificate of Sheriff (foreclosure time exceeded) has been placed on the property for $425,000.00, however, I assume this is for total buildings and Lot 7 only, as this bank does not hold the mortgage on Lot 6. The committee agreed with Mr. Wolfsteller and myself to have the City Attorney review the matter. With the HRA being informed that no written agreement regarding the landscaping and berming could be found, the HRA dismissed the agreement as a small matter. The NRA option to hold Lot 5 for five years for the Johnsons expires December, 1987, and because the Johnsons have defaulted on the Tax Increment Development Contract the HRA retains the Lot 5 property. Although, the HRA has invested at this time an approximate total of $103,745.70 for Lot 5 or $16,169.84 per acre inorder to market the property and to remain competitive the HRA may need to absorb the loss. OTHER BUSINESS. Koropchak advised the HRA members of a request by Mr. David Hornig for a letter from the HRA on the award of the Lucius Johnson property for a low to moderate income elderly and family housing development. This part of an application process for FmHA funding and is similiar to the request by Metcalf and Larson. The committee advised Koropchak to contact Metcalf and Larson of Mr. Hornig's request and as both projections are of equal feasibility and at the same stags the HRA remains unbins to either developer and to address both letters. Koropchak informed the HRA of the Housing Voucher Questionnaire received from HUD and asked the HRA of it's interest. The committee didn't see the need to provide additional rental housing subsidies to the very low income families, however, felt is may be more appropriate for the county. 6. ADJOURNMENT. The HRA meeting adjourned by consensus of the committee at 8:30 AM. Q AQ- a. 401-l(, Q 011ie Koropchak HRA Executive Secretary HRA Agenda - 2/3/88 3. UPDATE ON THE NEGOTIATIONS FOR TAX INCREMENT DISTRICT /2 PARCELS FOR A POSSIBLE ELDERLY HOUSING PROJECT 02. A. REFERENCE AND BACKGROUND. Tax Increment District /2 includes the parcels of the former Monticello Ford Garage building, O'Connor's, Stelton's, and Jones' Manufacturing. Since the HRA met on January 26, Ken Maus, Rich Wolfsteller, and myself metwith Ervin and Donna Stelton and their real estate agent, Gary DeBoer. No numbers were talked about only the concept of the HRA plans. A verbal consensus among the persona present was that 1) the HRA is interested in the purchase of the property (land and building) only, not the purchase of the business (equipment) or the goodwill. 2) In the best interest of all parties and since the sellers have two potential interested buyers which were not pleased with the present condition of the building a possible agreement could be reached by the HRA purchasing the land and building, the HRA paying for relocation cost, and the sellers finding a new location to retain the business for themselves or to sell the business and goodwill to a willing buyer. Mr. DeBoer will be contacting property owners for a lease/purchase options for a relocation site and Koropchak is to research guidelines on relocation expenses. These guidelines are established by the Federal government and if Federal monies are not used for the acquisition than they transfer to State Statutorles which apply to local monies no to be used with the tool of tax increment financing. Negotiations with Steltons are contingent on acquisition of O'Connor's parcel. In a conversation with Al Larson, he has contacted Joe O'Connor's daughter who informed Mr. Larson that Mr. O'Connor is in Florida for another week or two. Mr. Larson has O'Connor's phone number In Florida and he and Ken Maus may place a conference call to him. According to Metcalf and Larson, application for FmHA (Farmers Home Administration) funding must be submitted by March 1, 1988. A request to amend the toning from B-4 to PZM for this project is on the Planning Commission agenda, Tuesday, February 9, 1988, 7:30 PM. I received the appraisal on the Jones' Manufacturing Company last Friday, estimated Market Value is $52,000.00. Appraisal will be available for review at the meeting. On Janurary 27, 1988, 1 was on a conference call with key persons from Professional Planning and Development Company of North Mankato. They aro the developers interested in the Eck property for a elderly housing project with a total of 48 units (2 units of 24 or 4 units of 12). I informed them of the HRA's decision to proceed with assistance of tax increment financing for an elderly housing project that was earmarked by the HRA as an area of prime concern for a number of years, wherabye, an established TID has boon created, the intent to eliminate blight, and to enhance pedestrian traffic for the downtown businesses. If for some reason acquisition of properties in TID /2 does not seem realistic Profession Planning and Dovolopmont Company to still HRA Agenda - 2/3/88 3. CONTINUED. interested to proceed with their project. I informed them the HRA would be willing to work with them, they plan to call again on Thursday. February 4 to check on the acquisition progress for parcels in TID /2. B. ALTERNATIVE ACTIONS. The HRA needs to review the Jones' Manufacturing Company appraisal and plan negotiation strategies. C. SUPPORTING DATA. Estimated tax increment generated by the construction of a second elderly housing project in TID /2. (Based on a 24 unit project). TAX INCREMENT DISTRICT 02 Increment projected with the construction of a 24 unit elderly housing project. Building - 24 units at ;27,500.00 per unit $660,000.00 Land - 28,215 sq ft at $2.50 per sq ft $ 70,537.50 1660,000.00 $70,537.50 .20 of building .34 of land $132,000.00 $23,982.75 Total equals New Assessed Value - $155,982.75 New Assessed Value of parcels in TIDO 2 $ 14,424.00 15,908.00 73,798.00 Metcalf, Larson Office 9,550.00 155,983.00 Proposed Elderly 02 6,173.00 193,800.00 Elderly Project 01 $469,636.00 New Assessed Value 87,022.00 Original Assessed Value $382,614.00 Captured Assessed Value .097876 1988 Mill Rate $ 37,448.72 TI payable 1990 DEBT SERVICE FOR TID02 Metcalf, Larson Office (Securities) - $ 3,200.00 Annual for 12 years (Ends Year 1997) Acquisition of former Ford Property - 14,000.00 Annual for 7 years (Enda Year 1995) $17,200.00 Total Debt Service $20,249.00 Projected Remaining Bal. However, if Metcalf and Larson would purchase the 28,215 sq ft for at least, $57,600.00 02,400.00 x 24 units) the HRA could apply this money to pay off the contract of dead therebye reducing that debt service to 2.5 years to replenish HRA funds which would and in Year 1991. Estimated increment in Year 1991 be would $34,249.00. Duration of this district ends in Year 2010. Additional information received late Friday. February 5. 1988 to the proposed site plan for the Metcalf b Larson project. NOTE: the site plan is for a 28 unit facility so the above number would incroase, however, the coat of the project would also increase. HRA Agenda - 2/3/88 4. NOTIFICATION OF MEETING AT THE SENIOR CITIZEN"S LOUNGE. A. REFERENCE AND BACKGROUND. Ben Smith has scheduled a meeting with interested persons of a higher quality elderly townhouse concept close to downtown at the Senior Citizens Lounge, Wednesday, February 3, 1988 at 2:00 PM. In a conversation with Mr. Smith this AM, he was not certain on the expected turnout. Also, Mr. Smith asked if I would include this information in our agenda. In a meeting with Jack Maxwell, I outlined our plans for a townhouse development. He liked the concept, but pointed out thatthe high site acquisition and up -scale design costs would put our larger units in the $85,000.00 price range. He suggested that we check to see if prospective buyers would be interested after comparing that price with other available townhouses. I believe at one time we discussed compiling a list of prospective persons who might be interested and inviting them to a meeting to present our plan. If you agree this Is a good way to proceed, please bring your list of names to the February HRA meeting. Ben Smith I called Elk River Real Estate regarding the property at 4th Street amd Cedar Street. Mr. Dan Reed (441-7670) said the asking price was $74,900.00 and indicated the inside was completely remodeled including now wiring and plumbing. I contacted Mr. Gary LaFromboise of Construction Five who indicated an interest in the construction of the proposed concept. Also, I talked to Jay Miller of Miller Construction before he left for a warmer climate and his son, John Miller, was to stop in my office, however, has not done so. I called a local bank and inquired about the need to have 752 of the units sold on the proposed project tnorder for a builder to receive financing. This most certainly enhances the project, however, is not always the case nor to not the only requirement of a bank. The crediability of the builder to also a high priority among many other factors. HRA Agenda — 2/3/88 5. RECAP OF 1988 MONTICELLO TAX INCREMENT DISTRICTS. A. REFERENCE AND BACKGROUND. Based on the Captured Assessed Value for Monticello Tax Increment Districts for 1988 and with the 1988 Mill Rate of 97.876 the following increment is projected for each district, however, this does not always mean we collect this amount. DISTRICT CAV PROJECTED INCREMENT TID O1 $102.485.00 $10,030.82 IXI County 02 TID 02 $258,693.00 $25,319.84 Metcalf 6 Larson County 010 TID 03 $521,233.00 $51,016.20 FSI County 011 TID 04 $264,980.00 $25,935.18 ' IXI County 012 TID 05 $168,595.00 $16,501.40 Construction Five County 016 TID 06 $610.300.00 $59,733.72 Raindance Properties County 023 TID 07 Year 1989 NAWCO Minnesota, Inc. i County 0 These figures obtained from the Wright County Auditors Office. The currant balance and debt service of each district will be reported to the HRA at the March or April meeting.