HRA Agenda 04-06-1988MONTICELLO ROUSING AND REDEVELOPMENT AUTHORITY
l Wednesday, April 6, 1988 - 7:OOAM
City Hall
MEMBERS: Chairperson Ken Maus, Lowell Schrupp, Ben Smith,
Al Larson, and Everette Ellison.
STAFF: Administrator Rick Wolfsteller, Assistant Administrator
Jeff O'Neill, and RRA Director 011ie Koropchak.
1. Call To Order.
2. Approval of the Regular February 10, 1988 BRA Minutes, and
Special February 19, February 24, February 26, 8:OOAM and
12:15PM HRA Minutes.
3. Consideration to Approve Modification /3 of the Tax Increment
Finance Plan for Tax Increment Redevelopment District /2.
4. Consideration to Determine Demolition Options for the Stelton
and Jones' Properties.
5. Consideration to Proceed with Cost Estimates for Block 51 Alley.
6. Consideration to Establish Policy Guidelines for the Use of
Tax Increment Finance.
7. Consideration of preliminary concept approval for the Moriarty
Development.
8. Other Business.
9. Adjournment.
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY SPECIAL MEETING
Friday, February 19, 1988 - 10:00 AM
City Hall
Members Present: Chairperson Ken Maus, Al Larson, Ben Smith,
Everette Ellison, and City Administrator Rick Wolfsteller.
Members Absent: Lowell Schrupp.
The special meeting of the HRA was called to order by Chairperson
Ken Maus. The purpose of the meeting was to establish purchase
prices for the properties of O'Connor, Stelton's, and Jones'.
The Planning Commission held a public hearing and approved the
rezoning request to rezone platted lots from B-4 (regional business)
to PZM (performance zone mixed) zoning, thereafter, approved a
condiitional use permit to allow construction of an apartment
building in excess of the maximum number of units allowed. The
rezoning approval is good for a period of time not to exceed
December 31, 1988 or sooner if the applicants do not receive
approval of their subsidized elderly housing project. The HRA
received the appraisal of the Jones' Manufacturing property
from St. Cloud Appraisal, Estimated Market Value, $52,000.00
(land $13,000 and building $39,000), based on the beat use of
the property as presently improved for Commercial/Retail Light
Industry.
Koropchak had prepared a comparison of appraisals, city estimated
market values with projected 1988 taxes and statue of assessments
due on the three above properties. The Old Ford Garage Building
was included in the comparisons plus information on it's project
cost. (See Supporting Data). At the meeting. Koropchak said she
had run estimated project cost numbers based on the total acquisition
of the three properties at $150,000 and an additional $30,000 for
relocation and moving expenses, and using the $56,000 from
Metcalf and Larson to pay off the Ford contract for deed. With
an estimated total project cost of $260,000 the Debt/Service
on a bond issuance would be $30,200 (18 years at 9.251, $116.13
per one thousand dollars equal annual payment). The tax increment
projected per year is $39,600 with the construction of a second
elderly project.
After some discussion by the HRA, the consensus of the committee
was to offer Monti Truck Repair, $47,000.00; Stelton's, $58,000.00;
and Jones' Manufacturing, $57,000.00 which includes relocation and
moving expenses, 1988 taxes to be pro rated between the seller and
buyer, assessments to be paid in full by the seller. Contingent
upon 1) approval of the Monticello Housing and Redevelopment
Authority, and 2) approval of Farmers Home Administration (FmHA)
funding. The option for 120 days or through Juno 30, 1988 and a
returned excuted option to the City Hall by February 26, 1988,
inorder to moot FmHA application deadline of March 1, 1988.
HRA Minutes - 2/19/88
Continued.
Whether to use a purchase agreement or an option agreement
is to be determined by legal counsel. The agreements must be
prepared and delivered to Al Larson and Ken Maus on this date
to allow the sellers one week for their response.
The rationale the HRA used to arrive at the above purchase prices
was using the same per square foot land price as the Old Ford
Garage Building (=5.04 per sq ft). Since the three above
parcels are existing businesses the City's EMV on the buildings
were added plus $5,000 for relocation and moving expenses.
The purchasing prices and contingencies as discussed and the consensus of
the HRA members was made into a motion by Al Larson and seconded
by Everette Ellison. The motion passed 4-0.
011ie Koropchak
HRA Executive Secretary
I
•
MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY SPECIAL MEETING
Wednesday, February 24, 1988 - 7:OOPM
City Hall
Members Present: President Ken Maus, Al Larson, Lowell Schrupp,
and Ben Smith. City Administrator Rick Wolfsteller.
Member Absent: Everette Ellison.
The special meeting of the HRA was called to order by Pres. Maus.
The purpose of the meeting was to inform the HRA members of the
City Council decision of approval of a conditional use request
to allow construction of an apartment building in excess of a
maximum number of unite allowed for both applicants, Dave Hornig
and Metcalf 6 Larson. Both applicants proposed projects include
subsidized elderly housing; Mr. Hornig's project a 36 unit located
on the Lucius Johnson property and Metcalf 6 Larson's project a
28 unit located off Broadway on a portion of Block 51. The
council based their decision on that since both request were presented
at the same meeting and both applicants had their development plana
in order, the council had no just reason for denial of either
request. The continuation of either projects survival will be
determined on FmHA funding. At the council meeting, Administrator
Wolfsteller pointed out reasons why the council could deny either
request and Koropchak expressed the HRA'a support of the Metcalf
6 Larson project based on five points. Both applicants expressed
funding is determined by several factors; however, funding applications
are handled on a first come, first served basis. Ken Maus expressed
according to Mr. Metcalf that funding may be determined on the
city's position of up -front paid assessments against the Hornig
development. As proposed, the development is treated as one plat,
Phase I (1-12 unit family and 1-36 unit elderly) which public
services are off sixth street, and Phase II (2-12 unit family)
with the city being granted an easement for future development
of 7th Street. Would this mean future assessments against the
sold project or is the City requesting up -front payment at this
time? If treated as a sub -division, Phase I and I1, a simple
sub -division has not boon requested by Mr. Hornig. Mr. Hornig has
submitted his application to FmHA.
With the above said knowledge and unknown of FmHA funding to
which applicant, does the HRA want to continua securing option
agreements with Stalton's. O'Connor, and Jones? Koropchak
advised the members that Mr. Da Boor would be meeting with Stolton'a
that evening and would be in contact with her on Thursday evening.
Al Larson has been 1n contact with Joe O'Connor and with Mr. Jones.
The consensus of the HRA members was to proceed with negotiations
on the option agreements because tho HRA has worked hard, secured
appraisals, written and presented option agreements to the owners,
and earmarked this as a HRA goal to eliminate blight. The members
further felt if the elderly project falls, they may wish to
proceed and purchase the O'Connor and Jones properties anyway.
011io Koropchak
HRA Executive Secretary
•
MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY SPECIAL MEETING
Friday, February 26, 1988 - 8:OOAM
City Hall
Members Present: President Ken Maus, Lovell Schrupp, Ben Smith,
and Al Larson. Administrator Rick Wolfsteller.
Members Absent: Everette Ellison.
The special HRA meeting was called to order by President Ken Maus.
The committee was updated on the status of the option agreements.
The Stelton's made a counter-offer of $65,000.00 on a purchase
agreement inclusion of relocation and moving expenses and contingencies,
the HRA's original option agreement was $58,000.00 inclusion of
relocation and moving expenses and contingencies. The option agreement
on the Jones' property was executed at the original offer of $57,000.00.
O'Connor's counter-offer of $55,000.00 is for raw land inclusion of
demolition of said building according to city specifications,
relocation and moving expenses and contingencies with exclusion of
collar paying off current and remaining balance of assessments.
The HRA's original option agreement was $47,000.00 inclusion of
relocation and moving expenses and contingencies.
A motion was made by Lowell Schrupp for the HRA President and
HRA Director to execute the option agreements for Jones' property
at $57,000.00 ($52,000 for property and $5,000 for Ra Expenses)
and for the O'Connor's counter-offer of $55,000.00 ($50,000 for
raw land, building demolished according to city specifications and
$5,000 for R&M Expenses). The HRA counter -offered Stelton's
$65,000.00 ($60,000 for raw land, they negotiate demoliton contract
and $5,000 for R&M Expenses). The HRA granted Pres. Maus the power
to negotiate the HRA's counter-offer and if not acceptable by the
Stelton's to execute the original purchase agreement offer by
Stalton'e. The motion was seconded by Al Larson and passed 4-0.
Lovell Schrupp offered his support of further HRA decisions as he
had to leave the meeting.
Metcalf and Larson had drafted an option agreement (Supporting Data)
between Broadway Square Limited Partnership (OPTIONEE) and the
Monticello Housing and Redevelopment Authority (OWNER) for Lots
1, 2, 3, 4, and 5 and the South 15 fact of Lot 15, Block 51,
Original Plat of Monticello. The HRA reviewed the option agreement
and agreed on the following additions or changes. Al Larson
made a motion to 1) under terms and conditions 91 to read the total
purchase price to be paid to the OWNER shall be 167,200.00
(28 X $2,400.) and so on; 2) under terms and conditions /B to read
all parties hereto are advised and aro on notice that the OPTIONEE
intends to use the promisee herein for the purpose of at least
a 28 -unit elderly development and so on; and 3) under terms and
conditions the addition of I11 to read this agreement to contingent
upon the OWNERS obtaining approval for Modification 13 of the
Tax Increment Finance Plan for Redevelopment District 02, The
motion was seconded by Ban Smith and passed 3-0.
11
HRA Minutes - 2/26/88
CONTINUED.
Administrator Wolfsteller suggested an additional term and
condition for HRA protection to read that if for some unknown
reason the HRA (OWNER) did not secure option agreements on the
properties of Stelton's. O'Connor's, and Jones' on or before
March 15, 1988 that the OPTIONEE agrees to void the said agreement
and not take legal action against the OWNER. Ben Smith made this
a motion and Al Larson seconded the motion. With further discussion
to include that the above motion be inacted only upon legal
counsel support. Motion passed 3-0.
Koropchak is to make the above additions and changes, thereafter,
deliver the option agreements to Metcalf and Larson's office
for approval. At this time, executed documents from O'Connor
and Steltons have not been returned to Koropchak's office.
nn
011ie Koropchak
HRA Executive Secretary