HRA Agenda 10-04-1988AGENDA
MONTICELLO HOUSING AND REDEV&LOPMENT AUTHORITY
Wednesday, October 1988 - 7:OOAM
City Hall
MEMBERS: Chairperson Ken Mausy Lovell Schrupp; Ben Smith;
Al Larson; Everette Ellison; and 011ie Koropchak,
HRA Director.
CITY STAFF: Rick Wolfeteller and Jeff O'Neill
GUEST: Pat Pelstring, Business Development Services, Inc.
1. CALL TO ORDER.
2. APPROVAL OF THE SEPTEMBER 7, 1988 HRA MINUTES.
3. CONSIDERATION OF TAE INCREMENT FINANCING PROPOSAL TO ASSIST
THE CITY OF MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY.
4. UPDATE ON TAX INCREMENT REDEVELOPMENT DISTRICT 02 PROJECT.
5. OTHER BUSINESS.
0
6. ADJOURNMENT.
MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY SPECIAL MEETING
Friday, September 16, 1988 - 1:30 PM
City Hall
MEMBERS PRESENT: Chairperson Ken Maus, Ben Smith, Al Larson,
Everette Ellison, and 011ie Koropchak, HRA Director.
STAFF PRESENT: Rick Wolfeteller
MEMBERS ABSENT: Lowell Schrupp
1. CALL TO ORDER.
Chairperson Maus called the NRA special meeting to order at
1:55 PM.
2. CONSIDERATION OF ALVIN JONES COUNTER-OFFER FOR PROPERTY
LOCATED AT 110 NORTH LOCUST.
The purchase agreement between the HRA and Joseph and Clarice
O'Connor, and the purchase agreement between the HRA and
Elvin and Donna Stelton have been executed as directed by the
HRA motion of September 7, 1988.
Mr. Alvin Jones requested that Rick Wolfeteller and Koropchak
ask the HRA to consider his counter-offer of an additional
$1,175. His rationale of the purchase agreement price of
$57,000 less earnest monies released of $10,000 equals $47,000
times 10% interest rate divided by 4 is $1,175. The $1,175
being the quarterly intereston a $47,000 mortgage.
The HRA briefly discussed the counter-offer and could find
arguments for and against the rationale. The HRA felt no
extra dollars were requested nor given the other two property
owners of the set option agreements. Rick Wolfeteller reminded
the HRA of the already high investment into this project.
Everette Ellison made a motion for the HRA to remain firm on
it's original purchase agraeemnt offer of $57,000 with earnest
money of $10,000 released at time of execution with remaining
balance due at closing date on or before March 1, 1989. Option
agreement contingencies included except caller pays 1988 full
taxes. The motion was seconded by Ban Smith, with no further
discussion, the motion passed 4-0. The motion was made based
on the rationale that the other two purchase agreements were
settled without extra monies and in all fairness to those
parties and to Al Jones, himself, the HRA's decision was to
remain firm on their original option agreement price.
3. ADJOURNMENT.
The HRA special meeting adjourned at 2:15 PM.
C / n
011ie Koropchak, HRA Executive Secretary
MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, September 7, 1988 - 7:00 AM
City Hall
MEMBERS PRESENT: Chairperson Ken Maus, Lowell Schrupp, Ben Smith,
Al Larson, and Everette Ellison.
CITY STAFF PRESENT: Rick Yolfsteller; Jeff O'Neill; and 011ie Koropchak,
HRA Director.
GUEST: Brad Larson, Broadway Square Limited Partnership.
1. CALL TO ORDER.
Chairperson Ken Maus called the HRA meeting to order at 7:05AM.
2. APPROVAL OF THE AUGUST 10, 1988 HRA MINUTES.
Lowell Schrupp made a motion to approve the August 10, 1988 HRA
minutes, seconded by Ben Smith, the motion carried unanimously.
3. CONSIDERATION TO EXECUTE THREE OPTION AGREEEMNTS, SEPTEMBER 30, 1988.
Brad Larson of Broadway Square Limited Partnership, one developer
i of the proposed 28 -unit elderly housing project and applicant for
FmHA funding updated the HRA on the statue of funding progress.
Mr. Larson reported that their project ranked in the top one-
third for 1989 funding allocation. Progression steps are as
follows: 1) Pre-closing conference set for next week, 2)
advertise for bide, 3) bids in January, 4) spring construction,
and 5) final closing in February or March, 1989. 95% assured
verbal approval. The final site plan and the public hearing
for a variance request is scheduled for the Planning Commission
Agenda on October 4, 1988.
The HRA and Mr. Larson briefly discussed the alignment of Block
51 alley as proposed on the site plan, as designed the HRA viewed
the alley as non-functional because truck turn movements would
need more space. Mr. Larson stated that the Topol's didn't
care if the allay was closed off and Mr. Larson expressed this would
not create any land locking of sorts. The HRA felt the
elderly housing plan should be designed to accommodate the future
with a straight through alloy. It was suggested that the
City present the Topol's with a purchase agreement for the
shed.
The HRA having addressed the question directly to Brad Larson.
if the private partnership would consider additional funds to fill
the project finance gap? Mr. Larson responded that was not
possible. He suggested Koropchok call Joe Folsum at the FmHA
Office in St. Cloud to obtain the appraisal value.
HRA Minutes - 9/7/88
The HRA discussed the option to execute the three option agreements
to the three property owners prior to expiration date, September 30,
1988. It was a consensus of the HRA members to execute the option
agreements with the rationale that the long term merits of the
project will outweight the finance gap. Koropchak told the HRA
members that the Stelton's would consider a contract for deed
interest free through end of December, 1988. Also, the NRA recognizes
the holding costs associated with the extended option agreements
and recognizes the anxiety created to the property owners by the
unknown.
With the FmHA funding update and knowledge of possible final closing
in February or March, the HRA discussed purchasing methods without
the need to consider a loan from the city. A motion was made by
Lowell Schrupp for the HRA to purchase the Jones. O'Connor, and
Stelton properties for the amount agreed upon in the respective
option agreements with the seller to pay the full 1988 taxes.
Purchase agreements will be drawn -up by Metcalf b Larson, Attorneys
at Law, with 110,000 earnest money (released) and closing date on
or before March 1, 1989. Previous contingencies of the respective
option agreements to be included. The motion was seconded by
Everette Ellison, with no further discussion, the motion passed
5-0.
4. CONSIDERATION OF MODIFICATION 03 FOR TAX INCREMENT FINANCE PLAN
DISTRICT 02.
The NRA recognising the Option A expenses would be reduced because
of the deletion of the city loan and interest, Al Larson made a
motion to execute a NRA Resolution for Modification Plan 03 for
Tax Increment Finance District 02, therebye, requesting the
City Council to set a public hearing date for modifying the
plan. The modification plan to recover all expenses incurred
by the HRA for TI District 02. The motion was seconded by Ban
Smith, with no further discussion, the motion passed 5-0.
Project cost, projected tax increment, and bond indebtedness
were part of the agenda supplement.
A motion was made by Ben Smith requesting the City Council to
sot a public hearing date for moving and relocation expanses
pertaining to the acquisition of the Jones. O'Connor, and
Stalton properties. The motion was seconded by Everette Ellison,
with no further discussion, the motion passed 5-0. The HUD -Uniform
Act states that parson (a) or business(s) who undergo displacement
due to acquisition of property by a government entity are entitled
to compensation of moving and relocation expenses. According to
Tom Hayes, City Attorney, if a fixed agreeable moving and relocation
expense is established by o willing seller and willing buyer there
need only ba a public hearing because it onvolvas taxpayers monies.
The fixed agreed upon moving and relocation expense (15,000) is
acceptable by the HRA (buyer) and the Stelton'e. O'Connor's, and
Jonas' (sellers) and is included in the purchase prices.
HRA Minutes - 9/7/88
The HRA recognizes the high coat associated with this project;
however, they agree that the long term benefits to the City are
justifiable; 1) Eliminates blight in a distressed downtown area;
2) Eliminates the potential hazards of health, safety, and general
well-being of the community; 3) Creates a use of a portion of under-
used land (approximate 10 years without a retail/commercial developemnt
interest); 6) Creates needed subsidized elderly housing; 5) Creates
pedestrian traffic for existing businesses; and 6) Enhances the
Downtown Rehabilitation Project.
5. CONSIDERATION TO CHANGE THE HRA MEETING DATE/TIME.
With mixed opinions to changing the HRA meetings from morning to
evening, the HRA consensus was for the HRA Director to make a
judgement call for meeting time based on the length of the agenda
or time element of each agenda item. Guideline established was
if over one hour agenda go to evening meeting.
6. REPORTS.
Reports veto accepted by the HRA as written in the agenda supplement.
Koropchak was asked to contact Floyd Markling as a pooaible elderly
project developer. Jeff O'Neill reported that the Monticello Attitude
Survey completed indicated in the age group of 55-60 and over, 852
were satisfied with their housing and were not considering moving.
Fifteen percent were open to moving. It was suggested that
Koropchak contact realtors with letter of our interest in high
quality elderly housing close to downtown. Al Larson gave
Koropchak a lead of a builder to contact. A question by the HRA
mezbers was, Can the HRA buy land and hire a developer?
7. OTHER BUSINESS.
Lovell Schrupp was asked to set a meeting with property owners:
John Sandberg, Scott Douglas, Dennis Taylor, and Fred and Dorothy
Topol regarding the realignment and upgrading of Block 51 alley.
Ken Maus volunteered to chair the meeting and Koropchak will take
minutes. This to be eat up within two weeks.
8. ADJOURNMENT.
Everette Ellison made a motion to adjourn the HRA meeting, seconded
by Al Larson. the HRA meeting adjourned at 9:00AM.
011ie Koropchak
HRA Executive Secretary
C
HRA Agenda — 10/4/88
3. CONSIDERATION OF TAX INCREMENT FINANCING PROPOSAL TO ASSIST
THE CITY OF MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY.
A. REFERENCE AND BACKGROUND.
The City Staff presents to the HRA a copy of the proposal and
an agreement as prepared by Business Development Services, Inc.
for URA consideration. Jeff O'Neill will explain to the
HRA, the City Staff's rationale and need for Business Development
Services, Inc. services. Mr. Pat Pelstring, Vice President of
BDS, will review the proposal and agreement with the NRA.
The HRA will need to consider execution of the agreement or
deny execution of the agreement.
B. ALTERNATIVE ACTIONS.
1. Execute the presented agreement by and between Business Development
Services, Inc. and the City of Monticello Housing and Redevelopment
Authority.
2. Deny the execution of the agreement by and between Business
Develpment Services, Inc. and the City of Monticello Housing
and Redevelopment Authority.
C. STAFF RECOMMENDATION.
City Staff will recommend the execution of the agreement as per
the rationale and needs presented by Jeff O'Neill at the HRA
meeting.
D. SUPPORTING DATA.
Copy of proposal and agreement.
4. UPDATE ON TAX INCREMENT REDEVELOPMENT DISTRICT 12 PROJECT.
A. REFERENCE AND BACKGROUND.
To be presented at meeting. Enclosed is a copy of Modification 03
for Tax Increment District /2.
Jb",, ,
Businm Development Somvlass-L
September 19, 1988
Mr. Jeff O'Neil
Assistant City Administrator
City of Monticello
250 East Broadway
P.O. Box 83A
Monticello, MN 55362
Dear Mr. O'Neil:
Mike Mulrooney and I appreciated the opportunity to meet with
you last week to discuss the City of Monticello's Tax Increment
Financing program.
Business Development Services, Inc. (BDS) wishes to offer this
proposal to assist the Housing and Redevelopment Authority and
the City of Monticello in its existing and future Tax Increment
Financing efforts.
TAX INCREMENT FINANCING CLIENTS
Business Development Services, Inc. has an extensive amount of
direct experience throughout the State of Minnesota in developing
Tax Increment Financing programs. We offer our experience in
working with the Cities of Vadnais Heights, Woodbury, Marshall,
Montevideo, Baxter, Edgerton, Forest Lake, and White Bear
Township as examples of our experience and innovative approaches
to Tax Increment Financing.
We pride ourselves in our ability to work with tax increment
projects early in the process and identify methods which
ultimately benefit both the community and the developer. Our
firm is considered a leader in utilising developer paybacks, 'pay
as you go' and loan/equity funding approaches to Tax Increment
Financing.
We are willing to take an active role in all facets of the pro-
cess and would prefer to also be involved in the design of a
community's program rather than on just a project -by -project
basis. We strongly recommend that the community select competent
legal counsel in addition to utilising our firm. We prefer to
use this 'team approach,' combining the design, legal and fiscal
expertise in the development of a community's tax increment
program.
8900 SPIYN0BROW DM • sum 230 • MOg1O1PM MM WU • PMOW 619/7966131
Mr. Jeff O'Neil
September 19, 1988
Page 2
PERSONNEL
The expertise available through BDS is quite diverse, ranging
from marketing to finance. Business Development Services would
propose to utilize one of its principals, Patrick Pelstring, as
the project manager, with technical support from Deborah Grams.
The backgrounds and expertise of Mr. Pelstring and Ms. Grams is
detailed in the enclosed information.
TIF DEVELOPMENT PROPOSAL
Representatives of our firm had the opportunity to meet and
review the key Tax Increment Financing issues with the City and
HRA's professional staff. We have also had the opportunity to
review preliminary financial summaries and TIF plan information.
This information has given us a basic understanding of the key
issues associated with Monticello's existing Redevelopment Plan.
It is our understanding that the initial Redevelopment Plan was
established in November of 1982, and ie was subsequently modified
in November of 1985. Within the Redevelopment District, the City
K( has established seven separate Tax Increment Financing Districts.
City staff raised several questions and requested our response.
After review of the information and consultation with legal
counsel, we suggest the followings
1. We feel that the HRA has established a Redevelopment
District which would entitle the HRA to pool all existing Tax
Increment Financing Districts with respect to debt service
and future improvement projects.
2. The existing Redevelopment District could be expanded to
include additional property within the City. All existing
and subsequent Tax Increment Financing Districts' revenue
could be shared as referenced in item number one.
3. Within the City's Redevelopment District, the HRA could
establish either an economic development, redevelopment,
soils condition, or housing tax increment financing
districts.
a. We would further recommend that no existing Tax Increment
Financing Districts be modified or amended as they would
immediately become subject to statutory changes that were
made in June of 1988.
Mr. Jeff O'Neil
September 19, 1988
Page 3
t.
These recommendations would suggest the need to modify the
existing Redevelopment Plan into a *master project" document.
This form of Tax Increment Financing plan appropriately
integrates all of the existing and future TIF districts under the
existing Redevelopment District. This will facilitate the
appropriate *sharing" of revenues.
i
As an initial step in our proposal, we would recommend that our
firm undertake three specific responsibilities. These would be
as follows:
1. BDS will conduct a workshop to review the various options with
the existing Housing and Redevelopment Authority and City
staff and to develop overall policies and procedures for the
HRA's Tax Increment Financing program. we anticipate that
this review will require a minimum of two sessions with the
HRA and would result in a clearly defined program and policy.
2. BDS will modify the existing Redevelopment Plan and
Tax Increment Financing plane into a master project. The
appropriate public hearing and notifications will have to be
�I conducted as though it were a new TIP District. This will
1� provide the ability to share revenue between districts.
3. BDS will analyze existing bond documents, debt service
requirements and financial forecasts and develop an
integrated NRA cash flow summary. This will provide valuable
information in the HRA's planning and budgeting efforts.
FEES FOR SERVICES
Business Development Services would envision establishing a long-
term relationship with the Monticello Housing and Redevelopment
Authority to assist with their Tax Increment Financing efforts.
we wouldexact, that all fees for our services would be reim-
Yursse�ihrH— CEi CTiy bona saes ass—oc rated with ttmax increment
projects.
we would propose that the initial phase, including the steps as
outlined above, would be conducted on an hourly basis at the
following rateso
Senior Staff 875/Hour
Technical Support Staff 865/Hour
Mr. Jeff O'Neil
September 19, 1988
Page 4
As future Tax Increment Financing Districts are established and
development agreements negotiated, BDS would provide its services
on a contingent basis, according to the schedule found in the
enclosed contract. These fees represent standard contractual
arrangements consistent with our existing contracts.
SUMMARY
We appreciate the opportunity to provide this proposal to the
City of Monticello's Housing and Redevelopment Authority.
Enclosed for your review are additional items including a draft
contract, company profile, client list and professional staff
resumes.
We look forward to having Monticello as a valued client.
Sincerely,
US NESS DEVE P T ERVICES INC.
Patrick W. Pelstring
Vice President
PWP/ld
Enclosures
0uskm s Dswebpnront Samos: Inc.
AGREEMENT BY AND BETWEEN BUSINESS DEVELOPMENT SERVICES INC.
and the
CITY OF MONTICELLO
HOUSING AND REDEVELOPMENT AUTHORITY
This Agreement made and entered into on the _ day of
September, 1988, by and between the Housing and Redevelopment
Authority of the City of Monticello, a Minnesota Municipality,
(hereinafter referred to as "City*), 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 changing; 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
utilitee Tax Increment Financing as a key component of its
economic development programs and
WHEREAS, BOB 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.
8A90 SPRMOR008 DW 0 SUR14i0 0 MOWN& MM SSW 0 NOW 61QI7B&6131
NOW, THEREFORE, BASED UPON THE MUTUAL PROMISES AND
CONSIDERATIONS CONTAINED HEREIN, THE PARTIES HERETO AGREE AS
FOLLOWS:
I. SCOPE OF SERVICES
A. BOB will provide ongoing consultation services to the
Housing and Redevelopment Authority and the City of
Monticello to assist these agencies in the appropriate
design of their economic development program.
B. BDS will provide preliminary financial review, and
analysis and recommendations for the structuring of
specific TIF development proposals.
C. BOB 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.
D. BDS will assist in maintaining communications between
City staff members and project developers utilising the
City's TIP assistance.
E. BOB will assist in the collection of the required
technical and financial data, publication of required
notices, dissemination of plans and related materials
to other public agencies and review and confirmation of
data with the City's bond counsel and fiscal con-
sultant.
-2-
F. BDS will assist in the preparation of materials for
public hearings and the presentation of the appropriate
information with the City and the Housing and
Redevelopment Authority.
G. BDS will monitor and assist in the collection of
developer repayments, letters of credit and/or
securities as required.
H. Other duties related to the City's economic
development program and TIF program as directed by the
City and/or Housing and Redevelopment Authority.
II. PAYMENT FOR SERVICES
A. The City agrees to payment for services as described in
Section I, as followsi
1. Onqoinq Consultation Services.
The City agrees to compensate BDS at a rate of
per hour, plus direct expenses for professional
staff time and marketing activities devoted to the
establishment and ongoing operation of the
City's economic development program.
T. Establishment of Tax Increment Financinq Proiects.
a. For completion of data preparation, processing
and certification of newly established or
amended Tax Increment Financing District
$7.850.00
-3-
b. For the completion of specific development and
assessment agreements S 850.00
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.
B. Payment for ongoing consultation services shall be
billed on a periodic basis and due within 30 days of
Ireceipt. Payment for preparation of Tax Increment
IFinancing Plans and Development and Assessment
Agreements shall be tied to the ultimate bond sale(s)
Iassociated with the TIP projects.
III. ADDITIONAL PROVISIONS
A. The City and SOS reserve the right to terminate this
Agreement upon 60 days written notice.
1 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
Ipartners, 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
_d.
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.
ACITY
OF MONTICELLO
HOUSING AND REDEVELOPMENT
AUTHORITY
'
BY
ITS
'
ATTEST
ITS
1
1
BUSINESS DEVELOPMENT SERVICES INC.
BY
BY
Michael J. Mulrooney, President
Patrick W. Pelstring, Vice President
-5-
MODIFICATION 03
TAE INCREMENT FINANCE PLAN
REDEVELOPMENT DISTRICT 02
I
MODIFIED TAR INCREMENT FINANCE PLAN
A. STATUTORY AUTHORITY
The Monticello Housing and Redevelopment Authority (the "Authority")
and the City of Monticello are authorized to modify the tax increment
finance plan for Redevelopment District 02 pursuant to Minnesota
Statutes, Section 273.74, Subdivision 4.
B. STATEMENT OF OBJECTIVES
1) Provide opportunites for development and expansion of new business ;
2) Provide opportunites for growth of the tax base;
3) Eliminate blight or deterioration within an area;
4) Create a use for currently under-utilized land;
5) Provide needed subsidized elderly housing.
C. DEVELOPMENT PROGRAM FOR THE PROJECT
1) Modification 03, the Housing and Redevelopment Authority will 1
acquire the Jones Manufacturing Company property, parcel 155-010-
051011, and will raze the existing blighted structure and;
2) Modification 03, the Housing and Redevelopment Authority will
acquire the Monti Truck Repair property (raw land), parcel
155-010-051040 and;
3) Modification 03, the Housing and Redevelopment Authority will
acquire the Ste lton Laundromat property, parcel 155-010-051050,
and will rate the existing blighted structure and;
4) Modification 03, the Housing and Redevelopment Authority will
convey the three above said parcels plus parcels 155-010-051010 and
155-010-031020 (Modification 02) to the developer, Broadway
Square Limited Partnership, for construction of a 28 -unit
subsidized elderly housing project.
D. DEVELOPMENT ACTIVITIES
A purchase agreement has been executed between Alvin and Shirley Jones.
Jones Manufacturing Company, (the "Sollor") and the Housing and Re-
development Authority (the "Buyer") for $57,000, inclusive of moving
and relocation expenses ($5,000) for the property located 110 North
Locust, Monticello, Minnosota. The HRA released earnest money of
$10,000 with the remaining balance of $47,000 due at closing date,
on or before March 1, 1989. Earnest money was a debit to the HRA
General Fund.
C
155-010-051010 Lot lexc Nly 30 ft Block 51
155-010-051011 Nly 30 ft of Lots 1 b 2 d Nly 30 ft
of W 24 ft of Lt 3. Also S 15 ft of
Lot 15. Block 51
155-010-051020 Lt 2 exc Nly 30 ft b Lt 3 exc Nly
30 ft of W24ft&W71/2 ft of Lot 4.
Block 51
155-010-051040 E 25 1/2 ft of Lot 4 & W 5 1/2 ft Lot
5, Block 51
155-010-050111 S 1/2 of Lots 11 6 12, Block 50, Original
Plat
155-010-051050 Lot 5, Block 51, exc W 5 1/2 ft (50Mis-92)
Original Plat
155-010-051111 Lots 11 b 12. Block 51, eac S 65 ft and
exc tr sesc in Bk 266-795 Original Plat
155-010-051130 Lots 13, 14, b Nly 150 ft of Lot 15,
Block 51. Original Plat
F. CLASSIFICATION OF THE TAR INCREMENT FINANCING DISTRICT
< The tax incrememnt financing district established within the area
designated as the Central Monticello Redevelopment Areae is classified
as a Redevelopment District.
The property included in the district is as follows: (by PIN)
a. 155-010-050010 (City of Monticello)
b. 155-010-050011 (Culp)
c. 155-010-050081 (Metcalf 6 Larson)
d. 155-010-050101 (City of Monticello)
o. 155-010-050100 (Broadway Partners)
f. 155-010-051010 (Monticollo Housing and Redevelopment Authority)
g. 155-010-051011 (Jonas)
h. 155-010-051020 (Monticello Housing and Redevelopment Authority)
J. 155-010-051040 (O'Connor)
J. 155-010-050111 (Hollenback)
k. 155-010-051050 (Stalton)
1. 155-010-051111 (Gustafson)
m. 155-010-051130 (River Park View)
G. ESTIMATE OF COSTS
The estimate of public coats associated with the modified tax increment
finance plan aro as follows:
BUDGET
Jones Acquisition
Proper ty 3 52,000
Moving and Reloction Exp. 5,000
Demolition 5,000
O'Connor Acquisition
Property (Raw Land) $ 50,000
Moving and Relocation Exp. 5,000
Stelton Acquisition
Property $ 60,000
Moving and Relocation Exp. 5,000
Demolition 5,000
Old Ford Garage (Recover cost)
Contract for Deed (pay off) $ 50,000
Interest Paid (6/88, 12/88,
6/89) 6,716
Demoli t ion 6.500
Administrative 2,000
Assessments 980
Downpayment 25,000
Modification /3 Administrative 10,954
Bond Discount 11,250
Plan Modification 2,500
Bond Issuance 12,000
Capitalized Interest (24mos) 48,100
TOTAL PROJECT COST $363,000
LESS FmRA 58,000
LESS Bond Issuance 260,000
REMAINING BALANCE $ 45,000
H. ESTIMATED AMOUNT OF BONDED INDEBTEDNESS
An estimate of the maximum amount of bonded indebtedness is expected
to be $260,000, estimated annual debt service of $30,193.80. The maximun
term of the issue is 18 years, and the interest rate is expected to be
9.25 percent. The capitalized interest amount for approximately 24 months
is catdmatod to be $48,100. The difference between the project
cost ($363.000). the bond indebtedness ($260,000), and the Farmare Homo
Administration Funding ($58,000) is $45.000. Bond sale Spring of 1989.
I. SOURCE OF REVENUE
This three sources of revenue used to finance public costs aso6ciated with
the public dov elopmont projects in the redevelopment project aro $58,000
Farmers Home Administration Funding, $45,000 Monticello Housing and
Redevelopment Authority 1989 Tax Levy, and the tax increment generated
48a result of the taxation of the land and building expansion in the
Ij tox inc rament financing redevelopment district. Tax increment financing
refers to a funding technique that utilises increases in assessed valuation
and the property taxes attributed to now development to finance, or assist
in the financing of public development costs.
The improvements to the land acquired by the Broadway Square Limited
Partnership and the previous improvements of Redevelopment District 02
are expected to generate an average annual tax lacrement of $36,084.81
payable in year 1991. The estimated annual tax increment is sufficient
to retire the annual bond debt service of $30,193.80 plus Metcalf and
Larson Securities annual debt service of $4,285.00. Duration of the
District Life is 2010.
J. ORIGINAL ASSESSED VALUE
Pursuant to Minnesota Statutes 273.74, Subdivision I, and 273.76,
Subdivision 1, the Original Assessed Value as modified for the
Revelopment District 62 and certified by the County Auditor of
Wright County on the 2nd day of January, 1988. This value is a total
of $87,783.00. Individual parcel assessed values are as follows:
PARCEL ASSESSED VALUE
155-010-050010 EXEMPT
155-010-050011 $ 9,860
155-010-050081 $13,574
155-010-050100 $10,536
155-010-050101 EXEMPT
155-010-050111 $ 8,960
155-010-051010 EXEMPT
155-010-051011 $12,070
155-01x051020 EXEMPT
155-010-051040 $ 6,630
155-010-051050 $10,276
155-010-051111 $ 6,271
155-010-051130 $ 9,600
Each year the Office of the County Auditor will measure the amount
of increase or decrease in the total assessed value of the tax
increment Redevelopment District to calculate the tax increment
payable to the Monticello HRA. Each year the County Auditor shall
also add to the original assessed value of the Redevelopment District
an amount equal to the original assessed value for the preceding
year multiplied by the average increase in the assessed valuation of
all property included in the Redevelopment District during the five
years prior to district certification. In any year in which there
is an increase in total assessed valuation in the tax increment
Redevelopment District above the annual percentage increase, a tax
increment will be payable. In any year in which the total assessed
valuation in the tax increment Redevelopment District is less than
the original assessed value, no assessed valuation will be captured
and no tax increment will be payable.
The County Auditor shall certify in each year after the date the
original assessed value was certified, the amount the OAV has increased
or decreased as a result of any of the following:
1) Change in tax exempt status of property;
2) Alteration of the geographic boundaries of
the district;
3) Change due to stipulations, adjustments, negotiated
or court ordered abatements.
K. ESTIMATED CAPTURED ASSESSED VALUE
Pursuant to Minnesota Statutes 273.74, Subdivision 1 and 273.76,
Subdivision 2, the estimated Captured Assessed Value (CAV) of the
tax increment Redevlopment District will be $369,138.00. Changes
in assessed values are shown in Exhibit A. The City of Monticello
requests 1002 of the available increase in assessed value commencing
in 1990 for taxes payable in 1991 be captured for repayment of debt
and currant expenditures.
L. DURATION OF THE DISTRICT
The City of Monticello expecte to terminate the Monticello Tax
Increment Redevelopment District 02 on January 2, 2010. The 25
year duration of the district is based on the ability of the City to
collect tax increments for 25 years commencing in 1985 and ending
in 2010.
M. ESTIMATED IMPACT ON OTHER TARING JURISDICTIONS
The impact of the lose of tax dollars represented as tax increments
is estimated below for each taxing jurisdiction. This estimate
to based on the existing redevelopment proposals and does not include
the possible tax increments derived from any other future developments,
mill changes, or inflation factors.
Total Asneeoed Value
Tax increment Finance District 1/2/88 Total 187,022
LATEST ASSESSED VALUE OF EACH GOVERNMENT BODY:
2 of District
to Total
Wright County 1407,743,709 .021
School District 0882 $140. 784,4 33 .Obi
City of Monticello 1114,339,670 .076
Other 1190,334,664 .045
Considering all the districts, it can be seen from the above that
the school city, and country districts will have over 992 of each
respective district available for normal growth of tax base or
valuation. Applying the percentage of the total mill rate in 1988
levied by each taxing jurisdiction to the projected mill rate and
the estimated tax increment received reveals the annual loss of
tax dollars by each taxing jurisdiction as listed in the table
below assuming development would occur without public assistance.
The modified finance plan indicates we anticipate a tax increment at
build out as follows:
Captured Assessed Estimated Tax
Valuation Increment Received
Tax Increment Finance District $369,138 $36,084
Based on the current mill rate, the estimated taxes received would
be as follows for the taxing bodies:
Mills percent Tax Increment
City 15.932 16.28 $ 5,874
Wright County 22.728 23.22 $ 8,379
School District 0882 55.069 56.26 $20,301
Hospital District 4.147 4.24 $ 1,530
Total 97.876 100.00 $36,084
'r
The following table represents the additional mills that would
have to be levied to compensate for the lose of tax dollars in
estimated tax increments for each taxing jurisdiction. The tax
increments derived from the total Redevelopment District 02
improvements alluded to in the tax increment district would not be
available to any of the taxing jurisdictions were it not for
public intervention by the City. Although the increases in assessed
value due to development will not be available for the application
of the mill levy for the duration of the tax increment financing
district, this new assessed value could eventually permit a mill
levy decrease. If it could be assumed that the captured assessed
value was available for each taxing jurisdiction, the non-recaipt
of tax dollars represented as tax increments may be determined.
This determination is facilitated by estimating how much the mill
levy for property outside of the tax increment financing district
would have to be increased to raise the same amount of tax dollars
in each taxing jurisdiction that would be available if the projects
occurred without the assistance of the City.
Adjusted* Required Tax
Assessed Value Mille Increment
Wright County $407,656,687 .02 $ 8,379
School District 0882 $140,687,411 .14 $20,301
City of Monticello $114,252,648 .05 $ 5.874
Hospital District $190,247,642 .00 $ 1,530
e Tax Increment District assessed valuation subtracted
N. ASSUMPTIONS
It was necessary in the preparation of this plan to make certain
assumptions regarding income, costa, and timing of the redevelopment
district. These assumptions are listed below:
1. Income
a. Original Market and Assessed Valuation of Tax Increment
District 02 (provided by office of County Assessor).
Market Value (1988) $1,464,600
Assessed Value (1988) $346,474
b. New Market and Assessed Valuation of Tax Increment District
02 (provided by office of the City and County Assessor).
Market Value ;1,967,247.00*
Assessed Value $456,160.00
Leas OAV $ 87.022.00**
Total CAV $369.138.00
Leas Credits $ 456.13
$368,678.87
1988 [sill Rate .097876
Annual Tax Increment $ 36,084.81
Redevelopment District 12 Annual Debt Service
Metcalf and Larson Securities $ 4,285.00
1989 Bond Issuance 130,193.80
Total Annual Debt Service $34,478.80
* Market Value docrc►ase for subsidized apartment unite from $27,500
to $24,500.
*• 28,215 aQ ft considered vacant land at time of land conveyance from
MRA t o developer. (after demolition)
IN
14
EXHIBIT A
O
OAV
NAV
155-010-050010
Exempt
Exempt
155-010-050011
S 9,860
$ 14,420
155-010-050081
$13.574
$ 15,904
155-010-050100
$10.536
1 73,775
155-010-050101
Exempt
Exempt
155-010-050111
$ 8,960
$ 9,548
155-010-051010
$ 4.455
155-010-051011
$ 3.690
155-010-051020
$10.418
155-010-051040
$ 5.115
155-010-051050
$ 4,537
$161,182
155-010-051111
$ 6.277
S 6,171
155-010-051130
9,600
$175,160
TOTALS
$87,022
$456,160
O