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HRA Agenda 08-05-1992AGENDA MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, August 5, 1992 - 7:00 PM City Hall MEMBERS: Chairperson Al Larson, Ben Smith, Lowell Schrupp, Everette Ellison, and Tom St. Hilaire. STAFF: Rick Wolfstelle r, Jeff O'Neill, and 011ie Koropchak. 1. CALL TO ORDER. 2. CONSIDERATION TO APPROVE THE JULY 6. 1992 HRA MINUTES. 3. PUBLIC HEARING ON THE ACQUISITION AND DISPOSITION OF LANDS RELATING TO TIF DISTRICT NO. 1-14 AND ADOPTION OF RESOLUTION THEREOF. 4. PUBLIC HEARING ON THE ACQUISITION FOR FUTURE DISPOSITION AND REDEVELOPMENT OF LANDS RELATING TO OUTLOT A, COUNTRY CLUB MANOR AND ADOPTION OF RESOLUTION THEREOF. 5. CONSIDERATION TO REVIEW AND ACCEPT THE FINAL PRIVATE REDEVELOPMENT CONTRACT BETWEEN JERALD J. AND MARY E. SCHOEN AND THE HRA. 6. CONSIDERATION TO REVIEW AND ACCEPT THE PRELIMINARY PRIVATE REDEVELOPMENT CONTRACT BETWEEN BRADLEY D. AND MARY E. BARGER AND THE HRA. 7. CONSIDERATION TO REVIEW THE KNOCK -DOWN RULE RELATING TO TIF DISTRICT NO. 1-7. a. CONSIDERATION TO ACCEPT THE JULY 25, 1992 BDS, INC. BILLING. 9. OTHER BUSINESS. 10. ADJOURNMENT. MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Monday, July 6, 1992 - 7:00 PM City Hall MEMBERS PRESENT: Chairperson Al Larson (tardy), Vice Chairperson Ben Smith, Lowell Schrupp, and Tom St. Hilaire. MENDER ABSENT: Everette Ellison. STAFF PRESENT: 011ie Koropchak. STAFF ABSENT: Rick Wolfsteller and Jeff O'Neill. GUEST PRESENT: Bradley and Mary Barger, Suburban Machine & Manufacturing, Inc. 1. CALL TO ORDER. The HRA meeting was called to order by Vice Chairperson Ben Smith at 7:18 PM with three HRA members present. 2. CONSIDERATION TO APPROVE THE MAY 6, MAY 13, and JUNE 26, 1992 HRA MINUTES. A motion was made by Lowell Schrupp to approve the May 6, 1992 NRA minutes, seconded by Ben Smith, and with no corrections or additions the minutes were approved as written. A motion was made by Tom St. Hilaire to approve the May 13, 1992 HRA minutes, seconded by Lowell Schrupp, and with no corrections or additions the minutes were approved as written. A motion was made by Lowell Schrupp to approve the June 26, 1992 HRA minutes, seconded by Den Smith, and with no corrections or additions the minutes were approved as written. Al Larson arrived at the NRA meeting and chaired the remaining meeting. 3. CQNSIDELAT;ON TO ADOPT A RESOLUj'a0N &PPJRQVENG THE TXF PLAN FOR T;F DISJ&1PT Fp%. 1-14, SUBURBAN MACHINE A MANUFACTURING, ;HC. AND TO CALL FOR A PUBLIC HEARING FOR THE DISPOSITION OF LANDS. Koropchak briefly gave a background of the propooed project and noted the importance of a timely development to meet the company's expected occupancy date of November 1, 1992. This requires a City Council TIF public hearing and the adoption of the TIF Plan for District No. 1-14 and the approval of the final plat, the execution of a Private Redevelopment Contract HRA MINUTES JULY 6, 1992 between the Bargers and the HRA, the approval of the building and site plans, and the completion of financial package by August 10, 1992. Brad and Mary Barger present at the meeting informed the HRA that their company originated in 1980 as a machine shop iri Plymouth, expanding and becoming quite d lversified through development of product -lines. They became Monticello residents in 1987 and within the last year the company bought— out WED Precision Machining. The proposed 11,000 sq ft structure will comply with the Business Campus Ordinance having a 50% contrasting material on the metal building. They expect the preliminary building and site plans to be completed within a week or two. Koropchak presented members with a copy of the TIF Plan for TIF District No. 1-14 and the resolution thereof as prepared by Business Development Services, Inc. (BDS) for SuburbarA Machine & Manfacturing, Inc. (SMM) to review. Direct TIB assistance to the company is $50,000 for land write-down and site improvements, inflated site improvement costs in the budget plan include the HACA factor. Projected annual tax increment is $12,500. Lowell Schrupp made a motion to adopt the resolution approving the modification of Redevelopment Project No. 1 of the Central Monticello Redevelopment Plan and approval of the TIF Plan fox* TIF District No. 1-14. The motion was seconded by Tom St . Hilaire and without further discussion the motion passed unanimously. The HRA adopted the resolution because the proposed SMM project complied with all but one (does not eliminate blight) of the City's TIF policies. Traditionally, Koropchak said, "For TIF budgets of under $100,000, the City has not sold bonds but an internal loan has been issued by the City to the HFA." Administrator Wolfsteller advised Koropchak that the City would loan the IiRA the funds at an interest rate of 6.5%. However, the HRA was also made aware of its projected Excese TIP Funds. Tom St . Hilaire made a motion authorizing the acceptance of either/or sources of funds, whichever, keeps the SM project moving. First consideration to be the acceptance of a City loan to the HRA at 6. 5% interest rate, as recommended by Pat Pelstring , BDS, Inc. Second consideration being the authority to use Excess TIF Funds. The motion was seconded by Ben Smith and without further discussion the motion pasoed unanimously. Page 2 HRA MINUTES JULY 6, 1992 Next, Lowell Schrupp made a motion calling for a public hearing on August 5, 1992, for the acquisition and disposition of lands relating to TIF District No. 1-14. This the date of the regular LIRA meeting. The motion was seconded by Ben Smith and without further discussion the motion passed unanimously. Asked of the Bargers, by a HRA member, to their reaction of the Business Campus Ordinance: Not less than 30% of a lot, plat, or parcel must be as a grass plat and shall be landscaped. The Bargers responded they had little reaction to the ordinance after hearing the definition as given by the Building Official. Landscaping including stones, rocks, etc. and grass meaning and not limited to grass but a covering maintained at a six inch level. CONSXDERATION TO ADOPT A MEMORANDUM OF UNDERSTANDING BETWEEN WRIGH-' COUNTY AND THE MONTICELLO HRA REGARDING OUTLOT A, COUNTRY CLUB MANOR. Koropchak referred to the agenda contents as prepared and written by Administrator Wolfsteller. Additionally, Mr. John Dean of Holmes & Graven, advised Koropchak that the HRA should hold a public hearing on the acquisition of said land for future disposition and redevelopment even if acquisition is through the tax forfeiture process as led by the city. The property is zoned as R-3 (Medium Density Residential). The members viewed the [IRA, as a holding company of the said property for the City of Monticello. Lowell Schrupp made a motion to adopt the Memorandrum of Understanding between Wright County and the Monticello HRA regarding Outlot A. County Club Manor, subject to no opposition or negative comments at the authorized HRA public hearing of August 5, 1992. The motion was seconded by Tom St. Hilaire, further discussion included the suggestion to market the property as soon as possible. The motion than passed unanimously. 5. gONSID9FATI0F9g JA J+OLLOW-UP TO THE JUNE 10 WORKSHOP PRESENTED @Y MR. PAT PELSTRING. Chairperson Larson summarized the workshop as a brainstorming session outlining alternative sources of funds to aaoist with future economic development projects. Chairperoon Larson and Ben Smith were in attendance at the workshop from the [IRA. Enclosed is a copy of Koropchak'e summary. Page 3 HRA MINUTES JULY 6, 1992 6. CONSIDERATION OF PROJECT UPDATES: AROPLAX CORPORATION AND JM OIL. Koropchak reported the Aroplax funding package slowly continues to come together, announcing the public hearing scheduled for July 27, 1992, 7:00 PM at the City Council Chambers relating to the city application for funding to the State of Minnesota. JM Oil update as prepared and written by Jeff O'Neill, and submitted in the HRA agenda. 7. CONSIDERATION TO REVIEW SDS, INC. BILLINGS. The HRA reviewed and acknowledged payment of the Business Development Services, Inc. (BDS) billing statements of May 22 and June 23, 1992. Asked of the relationship between the City and BDS, it was suggested to review this with city staff and Pat Peletring. 8. OTHER BUSINESS. Chairperson Larson and Koropchak outlined the proposed agricultural product manufacturer's plan and product as presented to the Economic Development Team by Mr. Nick Stockwell. The HRA supported the concerns raised by the IDC and the local team, and endorsed Monticello's withdrawal as an Interested community for the planned agri-product development project. 9. ADJOURNMENT. The 1IRA meeting adjourned at 8:38 PM. C,� \<013--6.J0 1'� 011ie Noropchak, HRA Executive Director Page 4 SUMMARY MONTICELLO HOUSING AND DEVELOPMENT AUTHORITY SPECIAL INFORMATIONAL WORKSHOP Wednesday, June 10, 1992 - 7:00 PM City Hall PRESENT: City Council - Ken Maus, Mayor HRA - Al Larson, Chairperson Ben Smith IDC - Ron Hoglund Mary Mlcke Merrlyn Seefeldt City Staff - Jeff O'Neill Gary Anderson 011ie Koropchak Guest - Pat Pelstring, BDS, Inc. Koropchak presented the group with a brief background of available Industrial properties in Monticello and the proposed land uses and transportation systems, and updated the group on the status of the potential Farm Credit auction. Mr. O'Neill informed members that representatives from Farm Credit have presented city staff with a preliminary subdivision concept for the Business Campus area only. The concept does not allow for a road easement which would cause some of the parcels to become landlocked. Pat Pelstring gave examples of private/public partnerships: Coon Rapids, soil corrections; Forest Lake, utilities; New Richmond; Little Canada, marketing study and development research; and Burnsville, rezoning, etc. Available funding sources In Monticello would be excess TIB, utility taxes/revenues, EDA levy, CDBG/UDAG, and Local Development Corporation/SDA. Additionally, Mr. Pelstring projected substantial growth in Monticello In the next five to ten years and informed members that today metro developers think of Monticello, not as metro, but as on the way to St. Cloud. A community must determine whether to spend money on coopeA ive developments, stake level of risk, and market. Mr. Pelstring encouraged a cooperative partnership be created between the city and Farm Credit to prepare a preliminary plat. He agreed with Koropchak that the mental image of unplatted property to a prospect is very negative. The group felt the need to take a pro -active role in development of a partnership to prepare a preliminary plat for the Farm Credit property. Also, to take a pro -active role to create a partnership with the Hoglunds to encourage the extension of East Seventh Street. This came about ae Mayor Maus told of a citizen's suggestion for the city to develop the existing industrial lands within the city limits prior to any consideration of future annexation for industrial use. The meeting resulted in the planting of seeds: a fresh look and directions. HRA AGENDA AUGUST 5, 1992 Public hearing on the acquisition and disposition of lands relating to TIF District No. 1-14 and adoption of resolution thereof. A. Reference and Backqround: The HRA Chairperson is requested to open the public hearing allowing for public comments, questions, or opposition. The said public hearing notice has appeared in the Monticello Times the past two weeks which satisfies the Minnesota Statutory requirements. The public hearing and resolution for adoption relate to the property described within TIF District No. 1-14. Brad and Mary Barger will acquire 3.95 acres from AgricBank and the TIF assistance for the land write-down totals $29,625. The property is located to the east of the Remmele Addition and to the north of Chelsea Road. The projected annual Tax Increment of $12,565 will be used to retire the district's debt service over the collectible eight-year life of the district commencing in 1994. Direct TIF assistance to the Barger's is $50,000 for land and site improvements. The HRA will finance the TIF budget costs through a loan from the City at a 6.5% d interest rate. Again, Suburban Machine & Manufacturing, Inc. will construct an 11,000 sq ft facility, 8,000 sq ft for manufacturing and 3,000 sq ft for office with a 3,000 sq ft mezzanine. Currently, the company has 15 full-time employees and expects to employ an additional 8 people within the next two years. On July 27, 1992, the City Council set a public hearing date of August 10 for TIF District No. 1-14, approved the GMEF Loan No. 004 for 550,000, and adopted the Sponooring Government Units Resolution which is necessary prior to submission of the Central Minnesota Initiative Fund application (request IG for $50,000). The Barger's preliminary plat has been approved by the Planning Commisoion and the City Council. After diocuoolon, public comments, and the aooumption of no opposition, the NRA Chairperoon is requooted to close the public hearing and to ask for a motion to adopt the resolution relating to the TIB asoiotance of the described raw land. Page 1 HRA AGENDA AUGUST 5, 1992 B. Alternative Actions 1. A motion to adopt the resolution authorizing to assist with the acquisition costs of the described raw lands to Bradley D. and Mary E. Barger. 2. A motion to deny adoption of the resolution authorizing to assist with the acquisition costs of the described raw lands to Bradley D. and Mary E. Barger. 3. A motion to table the agenda item. C. Staff Recommendation: Staff recommends Alternative Action No. 1. The recommendation Is given because the Barger project fits the community's economic development objectives, the State Statutory, the local TIF policies, and the GMEF guidelines. D. Su000rtlna Data: Copy of the published public hearing notice. Copy of the resolution for adoption. Page 2 Page 12—Monticello (Minn.) Times, Thursday, July 23, 1992 10 AreaN' Public o ices NOTICE OF PUBLIC HIARNO The City o1 MMtkWo wig hold pingo hearhq tM Monday. !JY i7. 1882. at 7 p.m.. In the Coundl C 250 Eat firaedwaV. Mtamta6o, halm - 51"27.1992. 636. to eondder rtukktg a appBesdpn for furMktg to NO Stste W Mlnrtaaota urtdw tM SmaE CnMa Etan«nlo DaysloPntsrtt R aPr 1« an ec Kwnfe devalopnMnt projaet. TTM Po�am arld Ila roPdtanenb w8 Wawlavtad. Comerants and Watlom w0 bo wokoe Under eomNaraOon win be a propoW to aaM tN Aroplaw Corporation. The Sum's pam B dasigrwd to provide usistowe to plwu Oualneaaoa In gstttrlp atoned « N e ga ewwRlkag IoW and modasto I cps Dvaona. F« Nf soon, ea8 011ie R«opchsit 411175.2711. Hkk WdNte6a. Clry Adminlarator Uuty 16 end 23. 18821 f 4 items OF PUBLIC NEANt110 CITY OF MONTICELLO MOUSING AND REDEVELOPMENT AUTHORITY COUNTY OF WRIGHT STATS OF MINNESOTA NOTICE IS HERESY GIVEN that the +Ing told Rsdewkipmem Authwitv IfM "Authority') o1 the CltV1� of Mo licoflo, County of Wright. Slate of MMr tat, will hold a public rowing August 5. 1897, at apWpshnatatv 7 p.m., at ltM CHV Hap, MOmkago, MYwaw raLtng to the pe�pos. eo KilWailion end Olapoaltadn W popwtr a autMrlaad In tIM To. loerartant Matclrtg Ran 1« To Im,owent ilmntYtg Dlaelot No. 1.11. TM property a la aeelllalilart and waeeaglton tmt dlspoawitWn Tea hx of am Financing O.Fict No. 1.14 is ea follows: LSM Loudon Dsscripllon Thra sera of tab localad M Lot 10 o1 AUD1TOR'll SUBDIVISION NO. 1, according to the rtueard- e0 meg 0 woof, bhang N tho Northwat Ou lw of nM N«dlwast Ouatw Of Satlon 13, Townahrp 121, Raargtpee 75. WrIgM Courcy. Mhmaaoto tvft satwty of REMMELE ADDITION according to that r,e«dad pat eMral, Netg muthwast of totwtista No. 94 aha hMg norSMaatoty of that n«• lhanyrpM of Way en Cmtaa Road. (PtrglsMd Jtov 23 aha Juty 30. 1992). DINING andr, " K� i i �tfappy 80th Birthday to Our Birt_ A vary specW Mend! 7uly 24 We love you! Fri.-Thurs., League of Their Owr For and Away (PG Sister Act (PO) Money, l slew up the : BOOmerang (R) ".No E MATIN 5 Wnees on Set, St July 25,26 at 1, S 8 5 pp. n. for'81eter Act." 2 Mattrim at t & 330 p. HRA RESOLUTION NO. 92-3 A RESOLUTION BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA, AUTHORIZING TO ASSIST WITH THE ACQUISITION COSTS OF LANDS TO BRADLEY D. AND MARY E. BARGER WHEREAS, both the Housing and Redevelopment Authority in and for the City of Monticello (the "Authority") and Bradley D. and Mary E. Barger (the "Redeveloper") shall agree to the terms of the Contract between the Housing and Redevelopment Authority in and for the City of Monticello and Bradley D. and Mary E. Barger and all the convenants therein; and WHEREAS, the Housing and Redevelopment Authority In and for the City of Monticello has adopted the Tax Increment Finance Plan relating to Tax Increment Finance District No. 1-14; and WHEREAS, the Council in and for the City of Monticelllo shall hold a Public hearing and consider adoption of a resolution for the Establishment of Tax Increment Finance District No. 1-14 and the approval and adoption of the Tax Increment Finance Plan on August 10, 1992, and WHEREAS, both the Housing and Redevelopment Authority in and for the City of Monticello and Bradley D. and Mary E. Barger shall agree to Twenty-nine Thousand Six Hundred Twenty-five Dollars and no Cents (929,825) as the level of Tax Increment Finance assistance for the acquisition of raw lands described as: Three acres of land located in Lot 10 of AUDITOR'S SUBDIVISION NO. 1, according to the recorded map thereof, being in the Northwest Quarter of the Northwest Quarter of Section 13, Township 121, Range 25, Wright County, Minnesota lying easterly of RE14MBLE ADDITION according to the recorded plat thereof , lying southwest of Interstate No. 94 and lying northeasterly of the northerly right of way of Chelsea Road. Part of PID Number: 155-011-000101 NOW, THEREFORE, BE IT RESOLVED by the governing body of the HuuUing and Redevelopment Authority in and for the City of Monticello finds the redevelopment to be in the public interest because: 1. It will discourage commerce, industry, or manufacturing tram moving their operutiono to another utato; or 2. It will result In increooed employment in the municiplaity; or HRA RESOLUTION PAGE 2 It will result in preservation and enhancement of the tax base of the municipality. The Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, does hereby authorize to assist with the acquisition costs in the form of a land write-down for the said described raw lands to Bradley D. and Mary E. Barger. Adopted by the Monticello Housing and Redevelopment Authority this 8 day of August, 1992. HRA Chairperson ATTEST: HRA Executive Director HRA AGENDA AUGUST 5, 1992 6. Public hearina on the acquisition for future disposition and red eveloi2ment of lands relating to Outlot A. Country Club Manor and adoption of resolution thereof. A. Reference and Backqround: Again, the HRA Chairperson is requested to open the public hearing allowing for public comments, questions, or opposition. The said public hearing notice has appeared in the Monticello Times the past two weeks which satisfies the Minnesota Statutory requirement. On July 6, the HRA approved the Memorandum of Understanding between County of Wright and the Monticello Housing and Redevelopment Authority which conveyed the described lands to the HRA through tax forfeiture (Minnesota Statutory 282). The motion was approved subject to no opposition at the public hearing. The approximate twelve acres of land 1s described as Outlot A, Country Club Manor. Minnesota Statutory 069.027 requires the HRA to hold a public hearing and adopt a resolution of findings for early acquisition of lands. Basically, the enclosed resolu tiun e states the HRA authorizes the acquisition of said property and that the described land lies within Redevelopment No. 1 of the Modified Central Monticello Redevelopment Plan, that the acquisition was through the Memorandum of Understanding, that acquisition was necessary to relieve hardship, and that the HRA assumes the responsiblity of the costs related to the acquisition. In the July HRA agenda supplement, Administrator Wolfate ller referred to the City Council's intent to use the IIRA'a name for property transfer purposes and that the HRA would assume no obligation of associated coats. Although, the City's Intent may be good, the memorandum and Statutory 469, both, identify that the IIRA assumeo aosociatod costs and reoponsibility related to described land. It was suggested by tor. Pelstring if the City is using the IIRA'a name for convenience and if the NRA wishes to be relieved of any asoociated costa (including environmental), ao well as, potential benefito, then the HRA should requeat the City prepare an indemnity agreement between the City and the 1111A. Thio as a recorded accountable follow-through and not as a comment in the agenda oupplement. If tho IIRA has no problems with the assumed responsibilities than Mr. Pelotring'o suggestion Is not applicable. Pago 1 I 11RA AGENDA AUGUST 5, 1992 After discussion, public comments, and the assumption of no opposition, the HRA Chairperson is requested to close the public hearing and to ask for a motion to adopt the resolution relating to the acquisition of Outlot A, Country Club Manor. B. Alternative Actions: 1. A motion to adopt the resolution authorizing the acquisition of Outlot A, Country Club Manor, City of Monticello. 2. A motion to deny adoption of the resolution authorizing the acquisition of Outlot A, Country Club Manor, City of Monticello. 3. A motion to table the agenda item. Secondly, the HRA should consider the following alternative actions: 1. A motion requesting the City to prepare an Indemnity Agreement between the City and the LIRA. 2. A motion acknowledging no need to prepare an Indemnity Agreement. 3. A motion to table the agenda item. C. Staff Recommendation: Recommendation for the first consideration is Alternative Action No. 1. Recommendation given because the action is a follow-up necessitated by memorandum of understanding, the property is suitable for redevelopment, and eatisfies a statutory requirement for HRA acquloition. Next, no recommendation Is given for the second conoideration, thio depending on the level of responsibility the HRA is willing to assume. However, if the HRA assumes reoponsibil..1ty than the HRA should also capturo all potential benefits such as future revenues from the freeway billboards. D. Supportina Data: Copy of the published public hearing notico. Copy of the resolution for adoption. Copy of the memorandum of understanding. Copy of the July agenda supplement. Page 2 HRA RESOLUTION NO. 92-4 A RESOLUTION BY THE HOUSL NG AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, AUTHORIZING ACQUISITION FOR FUTURE DISPOSITION AND REDEVELOPMENT OF LANDS DESCRIBED AS OUTLOT A, COUNTRY CLUB MANOR WHEREAS, the Housing and Redevelopment Authority (the "Authority") in and for the City of Montice 11o, Minnesota shall affirm that the described raw lands lie withlra Redevelopment Project No. 1 of the Modified Central Monticello Redevelopment Plan; and WHEREAS, both the Housing and Redevelopment Authority in and for the City of Monticello and County of Wright (the "County") have agreed to the terms of the Memorandum of Understanding between the Housing and Redevelopment Auttaority and the County of Wright; and WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello shall agree to Four Thousand Three Hundred Twenty-seven Dollars and Twenty-six Cents ($4,327.26) as the acquisition price and shall assume responsibility of associated costa relating to the described raw lands; or WHEREAS, the Housing and Redevelopment in and for the City of Monticello shall propose the preparation of an Indemnity Agreement between the Housing and Redevelopment Authority and the City of Monticello; and WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello and the Ci ty of Monticello (the "City") shall agree to the terms of the proposed Indemnity Agreement between the Housing and Redevelopment Authority and the City of Monticello relating to the raw lands described as: Outlot A, Country Club Manor. NOW, THEREFORE, BE IT RESOLVED by the governing body of the Housing and Redevelopment Authority in and for the City of Monticello find() the early acquisition to be in the public intere of because: 1. The proposed acquioaton is necessary to carry out public improvements in the area, or that the acquisition will contribute to ttae oliminination of blight or deterioration within the area or that the acquisition Is nocesoary to reliev© hardship; and HRA RESOLUTION NO. 92-4 Page 2 2. There is a feasible method for the relocation of families and individuals to be displaced by the proposed acquisition. The Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, does hereby authorize acquisition for future disposition and redevelopment of the said described raw lands. Adopted by the Monticello Housing and Redevelopment Authority this 5th day of August, 1992. HRA Chairperson ATTEST: 11 HRA Executive Director t NOTICE OF PUBLIC NEARING CITY OF MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY COUNTY OF WRIGHT STATE OF MINNESOTA N0710E IS HEREBY GIVEN Mu at the Noaing and R t Aor uthity (the "AhMority'•) of the City of Monticello of Wriphi. Stine of mr iba ,o will hold a public hearing AugustS, 1992. n approabnatery 7 p.m., n the City Hall. Monticello. Myehasots, rslaWng to the ppapm• ad acquisincer and dositispm of property as authorised in the Tet Increment FlnarhWhp Plsrh la Tu Increment Finehcir District No. 1-14. The property propofed for acgwshion end suDwpuent dhpodthon within Tat Increment FirhancYhg District No. 1-14 is as folbws: Land Location Description Tlhree otters of Iwo located in Lot 10 of AUDITOR'S SUBDIVISION NO. 1 • accordirhg to the record• ad into thereof• being in the Northwest Quarter of the Nortnvoat Quarter of Section 13. Towndep 171• Range 28. Wright Count V. MYvrosots tft* ant" of REMMELE ADDITION according to the reeordad plot thereof, lylrng seahweat of interstate No. 94 and" northeast" of the nor- tlherfy right of wry on Chelsea Road. IPuEWhod MY 23 and J* 30. 10921. rZ J�! r" •i \ •' '.' _ f�' it?.�; r •e J/ a •:/ ('9 !�� $) -�•% •.? / 4 y� �� t�"r��at'': i/l�i�i`•.'j l�, r� •a 27 j, A b NOTICE OF MOLIC HEA;MO CITY OF MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY COUNTY OF WRIGHT STATE OF MINNESOTA NOTICE IS IQ`REOY GIVEN that IM Housing and lipleyolnprnant Authority itho "Aulhally"1 al the COY o, Monticano, CtwgY cf Wrigtht, Stas of Mehrhesota, wa hold • pubo Marhhg Ahpun S. 1902, n appoa Ialy 7 p.m., n the City' Half, MontkNb, Ministate. ratnhhg to IM propos• ad acquisitions of popehty as Whorled In Rodeveloprhhml Project No. 1 of the Montkaao Rcdevnbprnont Plan, The poppty proposed for acquisition and future awbilegwnt disposition within Rsdavalopnwnl project was as fow": Logit Description Qalot A. Cantly Club Manei, OhNishod Jury 23 and Jug 30. 19921 r w say, 1 Ulm up llaa Boomerang (fa) sorry, me MATT 9 iAeJnms� ppa�ne SeL, w•"T 25, at 1.9 & S M. for'SISW AM 2 WOMB at I III SM Even More ft Pont l7q:-MIJ a� §011111 . wY wM abLoI mooch, The A10 &db Kmat ha YYedh,8a1. 1 > mby e01Q am tIpRIn Maa- Wi w lardzl 1,; `kitinvie Rea my in a 1parbus• "hill room jtM !a the 1 .14, ouaLa4 ald tw;o ham. Ur yo:r itis flint to 0 rein 6 till lelna and Oat risu"ta M an patupa an Cow ytw trawl s CROWN SMT�E In 8 SIA Raaat h 4121 LU Jl 11 HRA Agenda - 7/6/92 4. Consideration of authorizing memorandum of understanding between Wriqht County and HRA. (R.W.) REFERENCE AND BACKGROUND: The City Council is requesting the HRA to use its authority to enter into an agreement with Wright County for the eventual purchase of Outlot A, Country Club Manor. The City of Monticello in 1978 constructed Country Club Road and installed sewer and water improvements to Outlot A, Country Club Manor. The special assessments on this parcel have grown through delinquencies to a total of over $550,000; and as a result, the parcel has been tax forfeited to the County for nonpayment of taxes. The City Council has, for a number of years, been trying to acquire this property in lieu of the special assessments owing in an effort to promote development of the parcel to recapture some or all of our special assessment debt. Since the tax forfeited parcel would soon be coming up for public sale, the Council felt it would be in the best interest of the City to acquire the parcel directly and work with future developers for developing the property either residentially or commercially ourselves. When parcels are tax forfeited and the County wishes to turn over the property to the City in lieu of taxes and assessments, state statutes allow for this procedure to take place through a housing and redeveloped authority. By the HRA entering into this memorandum of understanding with the County, the City Council did not intend for the HRA to assume any obligation for repayment of the special assessments or any associated cost with this acquisition, only to use the HRH's authority allowing the City to acquire title to the property. It is hoped by the City Council that the City will be able to recapture more of its special assessment debt by owning the property and working with future developers than we would have by allowing the County to proceed under the tax forfeiture sale method. Basically, the memorandum of understanding will require the City to pay $4,327.26 in property taxes upon issuance of a state deed for the property. Excluding the property from the normal tax forfeiture proceedings and turning it over to the City requires the use of the HRA's authority. From the City's standpoint, the HRA is not being asked to become involved in marketing the proporty in an attempt to reimburse the City for our special assessments outstanding, although if the HRA had a development proposal, I'm sure the City Council would be very interested. In the meantime, any cost associated with this transfer of ownership to the City from the County would be either picked up by the general fund or reimbursed to the HRA. At the time the City is able to find a developer interested in residential or commercial development for this parcel, the HRA will be asked to transfer their interest in the property. WHEREAS, The parcel of land known as Outlot A, Country Club Manor, Parcel No. 155-033-000010, is among those properties being prepared for public sale under the tax forfeit land sales procedures of Minnesota Statutes Chapter 282; and WHEREAS, Outstanding taxes through 1992 on this parcel total $6,402.39, with penalties and interest; and WHEREAS, Outstanding special assessments on the property total $554,494.73 with penalties and interest; and WHEREAS, This parcel is contained within an R-3 medium density residential zoning district of the City of Monticello; and WHEREAS, The Monticello Housing and Redevelopment Authority (HRA) is interested in seeing residential development occur on this property; and WHEREAS, It appears unlikely that a private developer would acquire this property because of the magnitude of special assessments owed to the City of Monticello; NOW, THEREFORE, The County of Wright and Monticello HRA agree as follows: 1. That the above described parcel is to be conveyed to the Monticello ERA, as per Minnesota Statutes Section 282.01, Subd. 1, contingent, of course, upon the approval of a State deed by the Department of Revenue. 2. That the basic sale price for said parcel is to be waived, with the understanding that the Monticello HRA may reconvey the property to a private party in hopes of recovering the special assessments due on the property. 3. That any fees for the State deed and any other miscellaneous costs related to this conveyance shall be the responsibility of the Monticello HRA. 4. That the outstanding real estate taxes, without penalties and interest, totaling 14,327.26, shall be paid by the Monticello HRA to the County upon issuance of the State deed for the property. 5. That, in light of the Close proximity of this parcel to Interstate 94, the City of Monticello may construct an sartben baro on the property for the purpose of providing visual and sound screening from the freeway. q 6. That the construction of said berm may be undertaken prior to the actual conveyance to the Monticello HRA. r 7. That the fill material used to construct the berm may include such items as brick, concrete, asphalt, and other inert materials, but that any items such as appliances or tires must be removed from the source of the fill prior to placement in the berm. S. That the parties to this Memorandum of Understanding may make such modifications and amendments as will properly carry out the intent of this Agreement. Such modifications and amendments shall be in writing. Dated: June _9 , 1992. COUNTY OF WRIGHT By Wes Wittkowski Chairperson Wright County /Board Bp Hie rd W. No n� coup y Coordinat Dated: June , 1992. MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY By Al Larson Chairperson Monticello HRA By 011ie Roropchak Executive secretary Monticello HRA HRA AGENDA AUGUST 5, 1992 5. Consideration to review and accept the final Private Redevelopment Contract between Jerald J. and Mary E. Schoen and the HRA. A. Reference and Backaround: On Monday, July 27, 1992, the City Council held the public hearing and adopted the resolution on the City's application for the Minnesota Ecomonic Recovery Grant Fund on behalf of the Aroplax Corporation. The resolution was adopted subject to the fact that the funding application for $170,000 would not be submitted to the State until the Private Redevelopment Contract between the Schoens and the HRA was executed by the Redeveloper. After weeks of negotiation the contract terms and conditions were agreed upon late Friday, July 31, between the Schoens and their Attorney Ed Chanin, and the HRA Executive Director and HRA Attorney John Dean of Holmes & Graven. Execution of the contract is anticipated Monday, August 3, 1992. Highlights of the contract are: Tax Increment Assistance: $85,000 disbursed at time the building is 30% complete as determined by the Redeveloper's Construction Lender. Land write-down is a grant of $70,000, the remaining $15,000 is a loan at an 8% interest rate over 7 years. Collection of the loan payback will commence in 1994. (This means the IIRA will collect two-thirds of the HACA penalty originally thought lost.) Time of Payment: 30% must be completed on or before December 31, 1992 or contract becomes null and void unless due to unavoidable delays such as an act of God. Minimum Estimated Market Value: $562,052. Insurance and Condemnotion: Builder's risk insurance, Comprehensive general liability insurance, and Worker'o compensation insurance. Tax Increment Guarantee: Commencing 1990, tax increment guarantee of 021,500. Letter of Credit: $21,800. Page 1 HRA AGENDA AUGUST 5, 1992 Defaults, financing, construction of minimum improvements (23,000 sq ft office/manufacturing facility), etc., as determined by Holmes & Graven. The Ecomonic Development Authority and the City Council have approved an $85,000 Greater Monticello Enterprise Fund Loan for the Aroplax project ($55,000 equipment and $30,000 overrun/contingency of fixed assets over seven years at 6% Interest rate.) Proposed equity into the total project costs is $75,000. Last Monday, word was received from the Central Minnesota Initiative Fund Board that the Aroplax final application was denied ($30,000) because the Board's overall concept for funding has changed and that Aroplax, in itself, was financially strong. In conversation with Mr. Schoen, the total project cost has been reduced from $1,030,000 to $1,000,000 or the total equipment cost has been reduced from $255,000 to $225,000. After discussion or questions, the HRA Is requested to act on the following alternative actions. B. Alternative Actions: 1. A motion to accept the negotiated terms and conditions of the Private Redevelopment Contract between the HRA and Jerald J. and Mary E. Schoen as prepared by Holmes & Graven. 2. A motion to deny acception of the negotiated terms and conditions of the Private Redevelopment Contract between the HRA and Jerald J. and Mary E. Schoen as prepared by Holmes & Graven. 3. Table action of this agenda item. C. Staff Recommendation: The HRA Executive Director outlined the negotiated termo and conditions with the City Administrator and received approval, therefore, staffs recommendation Is Alternative Action No. 1. D. Suaoortina Data: None. Page 2 HRA AGENDA AUGUST 5, 1992 Consideration to review and accent the ureliminary Priviate Redevelopment Contract between Bradlev D. and Mary E. Baraer and the HRA. Reference and Backaround: The Economic Development Authority and the City Council have approved a $50,000 Greater Monticello Enterprise Fund Loan for the Suburban Machine & Manufacturing, Inc. project (real property development at 4.5% interest rate amortized over 20 years with balloon payment in five.) Also, the City Council approved the Barger's preliminary plat and a Sponsoring Governmental Units Resolution for application of the Central Minnesota Initiative Fund. This final application was submitted on Friday, July 31 for $50,000. On Monday, August 10, the City will hold the public hearing for TIF District No. 1-14 and adopt the resolution thereof providing the Private Redevelopment Contract between the Bargers and the HRA has been negotiated and executed. The Bargers and their Attorney Tom Racette did receive a copy of the preliminary contract a couple of weeks ago as prepared by Holmes & Graven. It is anticipated the representative attorneys will negotiate this week. The only issued raised by the Bargers to Koropchak was the request for a $50,000 bond, of which, Koropchak cannot identify within the contract. Highlights of the preliminary contract draft are: Tax Increment Assistance: $50,000 for land write-down and site improvements (land $29,025 and site improvements $20,375.) Time of Payment: Land write-down payment upon 30% of building completion as determined by the Authority and site improvements payment upon certification of evidence. Minimum Estimated Market Value: $300,000 Insurance and Condemnation: Builder'o riok insurance, Comprehensive general liability insurance, and Worker's compensation insurance. Tax Increment Guarantee: Commencing 1994, tax increment guarantee of $12,565. Letter of Credit: $12,565. a Page 1 HRA AGENDA AUGUST 5, 1992 r_ After discussion, questions, and updated information of changes, the HRA is requested to act on the following alternative actions. B. Alternative Actions: 1. A motion to accept the negotiated terms and conditions of the Private Redevelopment Contract between the HRA and Bradley D. and Mary E. Barger as prepared by Holmes & Graven. 2. A motion to deny acception of the negotiated terms and conditions of the Private Redevelopment Contract between the HRA and Bradley D. and Mary E. Barger as prepared by Holmes & Graven. 3. Table action of this agenda item. C. Staff Recommendation: The HRA Executive Director and City Administrator agree with the preliminary Private Redevelopment Contract as prepared by the HRA Attorney, however, since Barger's attorney has not contacted John Dean, no comments or negotiations have been necessary. This as of Monday, August 3. An update will be given at the HRA meeting. D. Sunoortino Data: None. Page 2 HRA AGENDA AUGUST 8, 1992 Consideration to review the Knock -down Rule relatina to TIF District N. 1-7. A. Reference and Backaround: No action is required of this agenda item by the HRA and Is intended as as informational item only. Enclosed is a copy of a letter and the Knock -down Rule as received from the Wright County Auditor/Treasurer per Statutory requirements. This rule applies in 1992 to TIF District No. 1-7 (The H -Window Company, formerly known as NAWCO.) Since the certification only requires a minimum amount of evidence of parcel development activity, Mr. Pat Pelstring suggested, if at all possible, to retain all original parcel values as certified within the district. Therefore, the enclosed letter was drafted and submitted to the County on behalf of the HRA. Page 1 DARLA M. GROSHENS Wright County Auditor / Treasurer Wright County Government Center 10 N. W. 2nd Stmt Buffalo. Minnesota 56913.1193 Phone: (612) 662.7678 Metro: (612) 3996881 FAX: (612) 6826178 10 July 1992 To: City of Monticello HRA Official From: Darla M. Groshens, Wright County Auditor/Treasurer RE: Knock -down Rule, pertaining to Tax Increment Financing This is being sent a bit late; but we would appreciate it if you would read the enclosure and send us an update on your TIF districts certified between January 1. 1987 - December 31. 1987. We require only the minimum amount of evidence. That is: a 'knock -doer' certification from you stating that development activity hes taken place on all parcels except those you list on the certification. (This evidence is to be certified the fifth year following the year in which the parcel was certi- fied as being part of the district.) Please send the Knock -down Certification for the following as soon as possible. Thank you for your co-operation. County TIP 0 Certified City Name 28 5-06-87 NAWCO EQual Oppr rtrsily I Affi,n Iivw Arlu,n Rmpinw, Knock -down rule Knock -down rale — A parcel located in a tax increment district on which no development activity has taken place in the first four years since the district was certified is to have its value excluded from the original value and the current value of the increment district. The value to be excluded from the original value is the value that is included in the original value for the property. Similiary, the value to be excluded from the currentvalue is the value that is included in the current value for the property. A parcel that has been excluded from an increment district under the knockdown provision, may be once again included in the district if development activity takes place on the parcel. This parcel add back can take place at any time and only requires that the increment district advise the county auditor that development activity is taking place on the property. Formal hearings are not required. The add back parcel does not have the sarne original value that it had when the district was established. Its original value becotmes its most recently finalized value at the time that it is added back to the district. Parcelsthathavebeen droppedfromanincrement districtbecausenodevelopmentactivity occurred on them in the fust four years of the increment district and have been added back to the district after development activity commences on them do not constitute a district expansion They were part of the original district As such, any district expansion rules do not apply. The development activity provision in the knockdown statute relates to the activity specified in the increment plan. If for instance, a road improvement adjacent to the parcel is part of the increment plan, then this is considered development activity. If the Highway Department improves the highway next to an increment parcel and this activity is not included in the increment plan, then this is not considered development activity for purposes of the knockdown rule. A parcel that has been eliminated from an economic development district under the knockdown provision cannot be included in another tax increment district for a period of 20 years from the certification request date for the original economic development district. This does not preclude the recertification of the parcel to the original economic develop• mens district when development activity takes place on the parcel within the life of the original economic development district. (M.S. 469.176, Subd. 7) Development activity is defined as demolition, rehabilitation, and other site preparation Including qualified improvement of a street adjacent to a parcel but not installation of utility services including sewer or water systerns. The county auditor is required to enforce the knock -down provision in the tax increment financing law. The tax increment district authority is to provide the county auditor with evidence that the required activity has taken place for each parcel in the district. 7be county auditor can prescribe the type of evidence to be required as proof that development activity has taken place on a parcel. A minimum amount of evidence would be a certifica- tion from the authority that development activity had taken place on all parcels except those listed on the certification. This evidence is to be provided by February l of the fifth year following the year in which the parcel was certified as being part of the district. This enforcement requirement became effective May 1, 1988 with the first evidence reports filed February 1, 1989. • The provision does not apply to tax increment financing districts for which certification was requested prior to August 1, 1979. It does apply to all districts for which certification was requested on or after August 1, 1979 and to the expanded portion of a pre -August 1, 1979 district where the expansion certification request was made on or after August 1. 1979. • For purposes of the February 1 reporting, a cutoff date of December 31 has been established for determining development activity. The following report schedule reflects the December 31 cutoff date. It should be noted that although this report schedule runs through February 1, 1997 only, development activity reports are required on February 1 of each year after 1997 as well. Development January 1, 1990 - December 31. IM Activity Driate ReRprt �iinn District riMeatin Request:7ate February 1, 1989 August 1. 1979 - December 31,1984 February 1, IM January 1. 1985 - December 31, 1985 February 1. 1991 January 1, 1986 - December 31, 1996 February 1. 1992 January 1, 1987 - December 31, 1987 February 1. 1993 January 1, 1988 - December 31, 1988 February 1, 1994 January 1, 1989 - December 31,1989 February 1, 1995 January 1, 1990 - December 31. IM February 1, 1996 January 1,1991- December 31, 1991 February 1, 1997 January 1. 1992 - December 31, IM (M.S. 469.176, Subd. 6) 250 East Broadway P.O. Box 1147 Monticello, MN 55362.9245 Phone: (612) 295-2711 Metro: (612) 333-5739 Fax: (612) 295-4404 Ms. Darla M. Groshens Wright County Auditor/Treasurer Wright County Government Center 10 Northwest 2 Street Buffalo, NN 88313-1193 Dear Ms. Oroshens: E: KNOCK -DOWN RULE CERTIFICATION, PERTAINING TO TAX INCREMENT FINANCING The City's Tax Increment Finance District No. 1-7 (HAWCO) known as County Tax Increment Finance District No. 28 was certified by Wright County on May 4. 1987. The certified district consisted of two parcels, PID# 158-018-002110 and PIDW 16b-018-002120. As of today, July 30, 1992, construction of the original proposed 20,400 square foot office/manufacturing facility with site improvements was completed by January 2, 1908. Although, the facillty was constructod on PIU# 155-010-002120, site impruvemetits were developed on both parcels. PID* 155-018-002110 and PID# 155-018-002120. Site improvements an P21)# 133-010-992110 consisted, mainly, of grading for the development of the project area's storm water drainage. Submitted on behalf of the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, as evidence for Certification of the Knock- down Rule. Respectfully, CITY OF 14ONTICRLLO Q Wn, \<CA 0-6 D 15 011ie Karopchak IIRA Executive Director cc: Rick Wolfeteller. City Administrator Pat Pelstring. Business Development Services, Inc. TIS District No. 1-7 File ' am __ Business Development Services, Inc. July 25, 1992 Ms. 011ie Koropchak City of Monticello 250 East Broadway P.O. Box 1147 Monticello, MN 55362 STATEMENT Consulting Services—June 15, 1992 through July 14, 1992 A=Iax Hours 6/15/92 EO—Initiative Fund Application Processing for Aroplax 3.50 LPK—Aroplax visit for Jerry's signature; SBA 504 revisions; Financial projections of balance sheets; P & L; Cash Flow 5.25 6/16/92 UK—Projected balance sheets; P & L's and cash Flows; SBA 504 2.75 6/22/92 LPK--CMIF Application; 504 Follow-up; Follow-up with Harvey Becker, Marquette Bank re: Aroplax .75 6/23/92 LPK--Aroplax financing; Mating with Carol Presley -Olson, Jerry, 011ie. and Eric re: DIED financing; Fax info to 011ie 3.75 6/24/92 LPK--DTED Package; Follow-up on Aroplax 1.75 6/25/92 LPK—DTED, CMIF, 504 Financing Packages; Follow-up with Harvey Becker re: Aroplax 3.50 6126/92 LPK—DTED Application; Aroplax follow-up with Jerry and 011ie 1.50 6/29/92 LPK--CMIF; DIED Applications for Aroplax 2,25 6/30/92 LPK—Aroplax follow-up with Harvey Becker and Jerry Schoen .25 7/1/92 LPK—Aroplax Applications for CMIF. ERG 3.75 Ms. 011ie Koropchat Page 2 7/2192 LPK—Aroplax CMIF and ERG Applications 2.25 7/7192 LPK--CMIF and FRG Applicatimts for Aroplax 2.50 7/8/92 LPK—SBA 504 follow-up with Dick Nadeau, Jerry Schoen; ERG Application Zor Aroplax 4.25 7!!QtCv? LPK—ERG Application for Aroplax 2.50 7/13/92 LPK--ERG Application for Aroplalt Total Aroplax Hours: 43.75 Nb�•��l Suburban 4achine FICUrs 6/16/92 LPK-•Subu.tan nwehua&.Alanufacturing; lG:view TIF with Pat; 'talked to 011ie 1.25 6/22/92 12K—Suburban Machine Package .75 6/25/92 LPK—Suburban Machine Package; Mating with Brad & Mary Barger and 011ie at Rogers 3.25 6/26/92 LPK--Project Summary Narrative; Preliminary Application for CMIF; Financing Package oreWdtiuo for lubur m Ntach:ne 2.75 6129/92 LPK•-Follow-up; CMIF Pre -application inforrratim. Project summary .o 011ie re: Suburban Whine .75 7/1/92 LPK--Subuebmi Machine .75 7/10/92 LPK--Credit Analysis for 011ie; Report sent to 011ie 1.25 7/13/92 LPK—Folltrm-up wO Suburban Macnint• Total Suburban Machine Hours: IIAO Ma 011ie Kotopchak Page 3 Marketing—Not Billed 7/14/92 LPK—QA Thermal 1.4Q Total Marketing Hours: 1.00 NET CHARGEABLE HOURS: 54.75 Net Chargeable Hours ® S75/Hour &4.146,25 TOTAL AMOUNT DUE $4,106.23 CURREOVER OVER 60 OVER 90 $4,106.25 F TERMS: NET DUE UPON RECEIPT, 1.33% PER MONTH SERVICE CHARGE ON PAST DUE ACCOUNTS