HRA Agenda 06-17-1987AGENDA
MONTICELLO HOSUING AND REDEVELOPMENT AUTHORITY
Wednesday, June 17, 1987 - 7:OOAM
City Hall
Members: Acting Chairperson Bud Schrupp, Ren Maus, Ben Smith,
Marlys Erickson, and Al Larson.
1. Call to Order.
2. Approval of the May 13 and May 20, 1987 BRA Minutes.
3. Consideration for the HRA to Adopt the Development Agreement
for NAWCO Minnesota, Inc.
4. Consideration of Letters of Resignation.
5. Consideration to Review the Proposed Flake Project.
6. Other Business.
7. Adjournment.
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, May 13, 1987 - 9:OOAM
Monticello Council Chamber
Members Present: Acting Chairperson Bud Schrupp, Ken Maus, Ben
Smith, and Al Larson.
Members Absent: Marlys Erickson.
1. Call to Order.
The HRA meeting was called to order by Acting Chairperson
Bud Schrupp at 9:01AM.
2. Approval of the April 20, 1987 HRA Minutes.
Ken Maus made a motion to approve the April 20, 1987
HRA minutes, Ben Smith so seconded the motion. Minutes
stand approved.
3. Public HearinA on the Disposition of Public Lands for
NAWCO Minnesota, Inc. Tax Increment District 07.
Acting Chairperson Bud Schrupp opened the public hearing and
with no comments from the public, the public hearing was
closed. Ben Smith motioned to close the public hearing
for NAWCO Minnesota, Inc. Tax Increment District 07.
Seconded by Al Larson, the motion carried 4-0.
4. Consideration to Execute the Purchase of Public Lands
from the Oakwood Industrial Park Partnership.
Ken Maus made a motion to execute the purchase agreement
for Lots 11 and 12, Block 2, Oakwood Industrial Park,
City of Monticello from the Oakwood Industrial Park
Partnership for the sum of $104,000 plus $1.00 earnest
money. The purchase agreement is contingent upon the
execution of a purchase agreement between the Monticello
HRA and NAWCO Minnesota, Inc. and contingent upon the
execution of a Development Agreement on or before June 8,
1987, between the HRA and NAWCO Minnesota, Inc. Ben
Smith seconded the motion. The motion passed 4-0.
5. Consideration to Execute the Salo of Above Said Property
to NAWCO Minnesota, Inc.
Bon Smith made a motion to execute the purchase agreement
for the sale of Lots 11 and 12, Block 2, Oakwood Industrial
Park, City of Monticello to NAWCO Minnesota, Inc. for the
sum of $15,000 inclusive of $1,000 earnest money. This
purchase agreement is contingent upon the buyer (NAWCO
Minnesota, Inc.) executing the Devolopemnt Agreement on
or before Juno 8, 1987, with the HRA. The Development
Agreement shall road that the improvements proposed for
this property shall be sufficient to generate a tax
increment not lees than $30,000. par annum. If for any
reason a Development Agreement satisfactory to the City of
Monticello cannot be completed by Juno 8, 1987, this
purchase agreement shall be null and void and the sellers
HRA Minutes - 5/13/87
shall have no further obligation to sell or the buyers to
purchase. This purchase agreement selling price is cont-
ingent upon an 8} percent interest rate on the bonds.
In the event the interest rate would increase to 9 percent
the selling price would be $25,000 or in the event the
interest rate would increase to 9} percent the selling price
would be $30,000. The motion was seconded by Al Larson.
Motion passed 4-0.
6. Consideration to Review the HRA Budget for the Possible
Purchase of Public Lands from Larry Flake (Old Monticello
Ford Building.)
Finance Director Rick Wolfsteller recaped the 1986 HRA
General Fund with a balance of approximately $71,860.00;
however, has a deficit of $3,600 from Key Tool and a
deficit of $28,600 from Lot 5, Block 3, Oakwood Ind-
ustrial Park, from the IXI property. 1986 taxes being
delinquent. Therefore, Mr. Wolfsteller suggested a
spendable balance of $39,640. Ken Maus suggested Lot 5
to be marketable as soon as possible. Mr. Wolfsteller
suggested possible use of the UDAG repayment which is begin
the year of 1988 or ad valoram as means for the HRA to
pay off a loan for the above project. The estimated
amount of the UDAG repayment would be about $20.000.
Koropchak is to continue working on the project after
receiving the appraisal from St. Cloud Appraisers.
�.0 7. Other Business.
None
8. Adjournment.
Ban Smith made a motion to adjourn the HRA meeting, seconded
by Ken Maus. Meeting adjourned.
Olive M. Koropchak
Rxecutive Secretary
Housing and Redevelopment Authority
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
SPECIAL MEETING
Wednesday, May 20, 1987 - 7:30AM
City Hall
Members Present: Acting Chairperson Bud Schrupp, Ben Smith, and
Marlys Erickson.
Members Absent: Ren Maus and Al Larson.
1. Call to Order.
The HRA special meeting was called to order at 7:30AM by Acting
Chairperson Bud Schrupp.
2. Consideration to Adopt and Authorize the Execution of a
Subordination Agreement for Construction Five Tax Increment
District 05.
The execution of a subordination agreement by the HRA was necessary
because the Quit Claim Deed included various covenants to protect
the HRA in case of default by the developer. One such covenant
gave the HRA first lien position on the proeprty which did not
allow the completed financing package for Construction Five by
Twin City Federal. TCF's attorney Lyle Ward of Faegre 6 Benson
advised TCP against financial approval until the adoption and
execution of the Subordination Agreement by the 11RA. Bob Daike
of Holmes 6 Graven, legal representation for the City of Monticello,
advised the NRA to so adopt and execute the said agreement. Tha
agreement gives TCF first lien on the property, and the HRA
second lien. Therefore, if the developer defaults. TCP acquires
the property and TCF can sell the property with or without the
approval of the HRA. TCP does not have to complete the construction
but the new buyer must complete construction of the improvements
to not lose than the assessed market value of $1,350,000.00 and
will be consistent with the Development Contract. Ben Smith
made a motion to adopt and authorise the execution of a subordination
agreement for Construction Five Tax Increment District 05. The
motion was seconded by Marlys Erickson and passed 3-0.
3. Adjournment.
It was a consensus of the HRA to adjourn. Meeting adjourned.
Olive M. Koropchak
Executive Secretary
Monticello Housing and Redevelopment Authority
3. CONSIDERATION FOR THE HRA TO ADOPT THE DEVELOPMENT AGREEMENT
FOR NAWCO MINNESOTA, INC.
A. REFERENCE AND BACKGROUND.
On April 4, 1987, the HRA adopted the Tax Increment Finance
(TIF) Proposal Plan and requested the City Council to set a
public hearing. On April 13, 1987, the City Council set a
public hearing date for the concern of the Tax Increment
District and Plan. On April 18, 1987, notification was
delivered to School District 882 Supetintendent Shelly
Johnson and the County Assessor. On hpril 27, 1987, the
City Council held the public hearing on the Tax Increment
District, with no opposition, the hearing closedi thereafter,
the City Council adopted the Tax Inc-ement Finance District 07 Plan.
Public hearing on the disposition of public lands was held
on said property. May 13, 1987. Total project cost being
$170,000.00, bonds at $155,000.00 and ..ost to the developer
at $15,000.00 (contingent upon a 8} percent interest rate.)
Upon completion of the project an anrua) tax increment of
approximately $30,000.00 shall be collected off the project,
and increment to be 10OZ dedicated to the retirement of the
$155,000.00 Bond Issuance. No tax levy is required for said
retirement. The Development Agreement having been negotiated
between Holmes 6 Graven and Faegre b Benson, legal represent-
ation for the City of Monticello and for HAWCO Minnesota, Inc.,
respectively. NAWCO Minnesota, Inc. has completed a construction
contract with Winkelman Building Corporation, St. Cloud, for
the proposed 22,400 aq ft manufacturing!office facility on .
Lot 12, Block 2, Oakwood Industrial Park, City of Monticello.
Lot 11 purchased for future expansion. Construction of
the project is to be completed by December 1, 1987. The
County Assessor certified that the marxet value assigned to
such land and improvements upon completion of the improve-
ments to be constructed thereon shall not be less than
$865,000.00 until termination of the agreement. Adoption
of the Development Agreement includes the execution of
the Assessment Agreement.
B. ALTERNATIVE ACTIONS.
1. Adopt the NAWCO Minnesota, Inc. Development Agreement.
2. Deny the adoption of the NAWCO Minnesota, Inc. Development
Agreamnt.
C. STAFF RECOMMMENDATION.
Staff recommends the adoption of the NAWCO Minnesota, Inc.
Development Agreement, this being completed by the HRA
and NAWCO Minnesota, Inc. and the purchase agreements being
executed, the award of bond sales will be on the City
Council agenda, Juno 22, 1987.
D. SUPPORTING DATA.
Copy of tho Development Agreement and the Developer's site plane.
4. CONSIDERATION OF LETTERS OF RESIGNATION.
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v" A. REFERENCE AND BACKGROUND.
Enclosed is a letter of resignation from City Administrator
Tom Eidem. Also, enclosed is a letter of resignation from
Marlys Erickson. Marlys' resignation comes after a short
duration with the NRA. yet one that was served well. Marlys
and her husband will be moving out of state. The expiration
date of this appointed position is December 1987. Consideration
must be give for a new HRA member. Dr. C. McCarty had accepted
consideration for the HRA appointment earlier this year.
No alternative action or staff recommendation at this time.
B. SUPPORTING DATA.
Letter of resignation from Tom Eidem.
Letter of resignation from Marlys Erickson.
IN
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Office a the
City Ad"w 4vow
6-ty o/ .. ti" IL
9 June, 1987
TO: Planning Commission, BRA, City Staff, and
Citizens of Monticello
Plane: (61Z2852711
Metro: (612) 3333739
It is with mixed emotion that I respectfully submit my resignation
from the position of City Administrator for the City of Monticello,
Minnesota, effective at 4:30 p.m., Friday, July 31, 1987. I tender
this resignation in order to accept the position of Director of
Development Services for the City of Brea, California.
The decision to leave Monticello was an extremely difficult one
to reach, both personally and professionally. The position with
the City of Brea offers significant new challenges, and affords
me the opportunity to expand and improve my professional capabilities.
This past five years has boon a time of tremendous growth for the
City and for me. The next five yearn will be even more active.
In a very real way. I -ll mise being a part of that growth. I do
�o not envy you the choices you'll have to make. The near future,
perhaps more than any other time, will require constant guidance
and leadership founded in value. Physical growth will always happen;
the true measure of growth is in the principles and sense of community
which arise from value -based leadership.
I extend my sincerest gratitude and heartfelt beet wishes to the
citizens, to the staff, and to the City Councils, past and present,
of the City of Monticello. Do good; stay wall.
Sincerely,
Imo_
Thomas A. Bidem
City Administrator
TAEAd
NOTE: Based on my accumulated vacation, my last full day in the
office will be Friday, July 10, 1987.
I
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5. CONSIDERATION TO REVIEW THE PROPOSED FLARE PROJECT.
A. REFERENCE AND BACKGROUND.
Since the last HRA meeting, Mr. Mike Aio, St. Cloud Appraisal
Inc., has completed the appraisal of the former Monticello
Ford Building, 249 West Broadway, Mouticello, MN. He
estimated the Market Value of the subject, in fee simple
and as of May 26, 1987 to be $67,000.00. Estimated
demolition and removal cost of $11,000.00. SITE: 14,872.5
square feet of contiguous commerical land on the corner of
Locust and Braodway Streets in the west end of Downtown
Monticello City. HIGHEST AND BEST USE: Demolition of
existing improvements and conversion of the site to a retail
gales and service business location. :o my knowledge, as of
now, Mr. Larry Flake hasn't seen a copy of the appraisal.
Availability for repayment:
1. Liquor Store Transfer Fund (1987) $43,000.00
2. HRA General Fund (spendable) 40,000.00
3. UDAG Grant (repayment collectible
1988, approximately) 20,000.00
4. Estimated TI from District 62
(collectible 1988) 20,000.00
The HRA willing to offer $67,000, $70,000, or $75,000 for said
property, this an assumption.
Estimated Project Cogt:
Acquisition of Property $75,000.00
Demolition 11,000.00
City Contingencies 1,000.00
TOTAL 87,000.00
LESS demolition cost 11,000.00
" City contingencies 1,000.00
Downpayment 25,000.00
BALANCE TO FINANCE 50,000.00
One option is to finance the demolition, contingencies, and
downpayment which totals $37,000.00 from the HRA General
Fund. The balance may be financed with a commerical loan
from a bank or by a contract for dcod which could be paid off
from the excepted TI from District 02.
Example:
Bank Loan: $50,000 for 31 years at 112 interest rate.
Contract for Dead: $50,000.00 for 3 years at 102 interest rate.
This would allow for the cronies in Liquor Store Transfer Fund
and UDAG Grant repayment as options for an Economic Development
Revolving Loan Fund.
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