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EDA Agenda 11-08-2017 AGENDA REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, November 8th, 2017 – 6:00 p.m. Mississippi Room, Monticello Community Center Commissioners: Bill Demeules, Bill Tapper, Steve Johnson, Tracy Hinz, Jon Morphew, Jim Davidson, Lloyd Hilgart Staff: Jim Thares, Angela Schumann, and Jacob Thunander 1. Call to Order 2. Roll Call 3. Consideration of additional agenda items 4. Consent Agenda a. Consideration of approving Regular Meeting Minutes – October 11th, 2017 b. Consideration of approving payment of bills c. Consideration of Resolution #2017-05 regarding Fifth Amendment to Contract for Private Redevelopment with Master’s Fifth Avenue as it relates to TIF District 1-35 d. Consideration of Resolution #2017-06 Designating a Building in Redevelopment Project No. 1 (Fred’s Auto Building located at 349 West Broadway) as Structurally Substandard e. Consideration of Quotes for development of Downtown Site Marketing Materials Regular Agenda 5. Director’s Report 6. Adjourn 1 MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, October 11th, 2017 – 6:00 p.m. Mississippi Room, Monticello Community Center Commissioners Present: Bill Demeules, Bill Tapper, Steve Johnson, Tracy Hinz, Jim Davidson, and Lloyd Hilgart Commissioners Absent: Jon Morphew Staff Present: Jim Thares and Angela Schumann 1. Call to Order Bill Demeules called the regular meeting of the EDA to order at 6:00 P.M. 2. Roll Call 3. Consideration of additional agenda items None. 4. Consent Agenda a. Consideration of approving Regular Meeting Minutes – September 13, 2017 LLOYD HILGART MOVED TO APPROVE THE REGULAR MEETING MINUTES FROM SEPTEMBER 13TH, 2017. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 4-0-1 WITH BILL TAPPER ABSTAINING. b. Consideration of Workshop Meeting Minutes – September 13, 2017 LLOYD HILGART MOVED TO APPROVE THE WORKSHOP MEETING MINUTES FROM SEPTEMBER 13TH, 2017. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 4-0-1 WITH BILL TAPPER ABSTAINING. c. Consideration of approving payment of bills LLOYD HILGART MOVED TO APPROVE THE PAYMENT OF BILLS THROUGH SEPTEMBER, 2017. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 5-0. Regular Agenda 5. Consideration of 5th Amendment to Contract for Private Redevelopment with Master’s Fifth Avenue for property in TIF District 1-35 Jim Thares stated that a request was made by Barry Fluth to consider extending the performance timeline identified in the 4th Amendment to Contract for Private Redevelopment. Thares stated that the Fourth Amendment to the contract stated that construction needed to commence by December 31st, 2017, with project completion to be the end of 2018. Thares stated that Fluth has been working with interested developers on a potential project. Fluth has asked to extend the time frame to start construction by December 31st, 2018 with final completion by the end of 2019. If the extension is approved, the EDA’s Attorney will draft an amendment document which the EDA would 2 need to approve at its next meeting. Bill Demueles asked if the proposed development would be similar to the past. Thares confirmed, stating it would be a 23-unit market rate apartment with detached garages. Lloyd Hilgart asked if the contract remained the same (no change to the performance dates), would the TIF assistance would be forfeited. Angela Schumann stated that staff would need to consult with the EDA’s Attorney. Hilgart also asked if the TIF assistance has been declining as it was in the past years or if the same amount is still available. Schumann explained that that the developer removed the buildings on the property and must provide evidence of the activities and costs as a part of the completion of the contract for TIF eligibility. The documents related to the district specify the amount of eligible TIF, but the land value hasn’t risen to a point that any increment is being generated. Hilgart inquired if the developer had(s) a three-year time period for removal of the buildings. Schumann stated that this district is somewhat unique. Tammy Omdal, Northland Securities, said that the redevelopment TIF District had buildings that were determined to be substandard and then removed. No increment has been generated at this point. The district is set up for twenty-six years but the collection calendar has not started. The three year rule is applicable if findings are made for the establishment of districts and is not applicable in this case. The five year rule is applicable to either commit or spend the tax increment dollars within that timeframe. Under the terms of the development agreement, as long as it is valid, and the developer is not in default, all of the increment collected can be used to assist with the project per the agreed upon amount. If the EDA decides not to grant an additional extension of the performance dates, the developer may end up in default. The district would not go away, but in the future, the EDA would only be able to use 25 percent of the tax increment to assist any project. Decertification of the district is another option for the EDA at this time. Tracy Hinz asked where the EDA was at with the five-year period. Omdal stated that the five-year timeline is long past. She further added that the contract is still valid and the performance dates could be amended, but, if the dates are not extended the agreement would go away. Jim Davidson confirmed that this project was the only one that could be fully funded using the increment dollars. Omdal confirmed that is correct with the current agreement. Hilgart asked if there was a financial benefit for the City to not extend the contract. Omdal stated that there were findings made and assistance agreed to for this project. If the EDA determined that the proposed project was no longer consistent with the EDA or the City’s objectives, than it may be a reason to not extend it. Whether or not the project could continue would be up to the developer as public financial assistance would not be 3 available if the contract was not amended. Hilgart asked how many years the buildings have been removed. Omdal stated that this would be the Fifth Amendment to the agreement. Schumann stated that the district was established in late 2005. STEVE JOHNSON MOVED TO DIRECT PREPARATION OF AN AMENDMENT TO THE CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN MASTERS 5TH AVENUE AND THE CITY OF MONTICELLO EDA AS IT RELATES TAX INCREMENT FINANCING DISTRICT 1- 35. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 6-0. 6. Consideration of entering into contract with displacement relocation consultant for services for dislocated properties in downtown Jim Thares stated that the displacement assistance as required under the Uniform Relocation and Assistance Act (URAA) was determined to be useful and necessary as the EDA possibly becomes involved with downtown redevelopment projects. Thares noted the challenges that relocation activities can bring in an effort to comply with the Act. Two proposals were received; from Wilson Development and also from SB & Associates. Wilson Development quoted the work at $53,500 while WSB & Associates’ quote was $30,768. The difference was mainly in the amount of hours expected to spend providing technical assistance to the displaced. They actually charge similar hourly rates. Staff recommended working with Wilson Development. Thares noted that the City has worked with Mr. Wilson on previous projects and that any hours not utilized would not be charged to the EDA. Bill Demueles asked how many years WSB has been providing these services. Jim Davidson commented that their main contact has 17 years’ experience. Tracy Hinz asked if the project was a retainer to pay upfront for projects. Thares noted that is specifically for one potential project where a significant amount of displacement may occur. Steve Johnson asked what Wilson Development would be offering for the larger contract compared to WSB. Thares explained that Wilson Development has a lot of experience working in Monticello and within the State. Angela Schumann also added that WSB is estimating their cost at a reduced number of hours compared to Wilson Development. She also said that in the proposal from WSB the hours state “Not to Exceed”, and that it was important to understand that if the hours were to exceed, the costs would be increased. Jim Gromberg, WSB explained that any hours outside of the contract would be consumed by WSB. Johnson asked if Wilson Development would overall save the City of Monticello more money. Schumann stated that the EDA needed to look at references and past experiences. 4 Hinz asked if the EDA should be concerned that the majority of projects that WSB has worked on involve road right-of-ways. Demueles explained that there wasn’t much differentiation as the URAA prescribes the activities and tasks that need to be undertaken. Lloyd Hilgart asked on what other Monticello projects Wilson Development has worked on….other than Block 34. Schumann stated that her personal experience has only been with Block 34, in particular the Montgomery Farms acquisitions, but that the relationship dates farther back. Tracy Hinz and Bill Tapperboth appreciated the prior work that Wilson Development has completed within and for the City of Monticello. Johnson asked if there were any differences in outcomes from the two proposals. Thares stated that both matched up the services requested under a proposed scope of work. BILL TAPPER MOVED TO AUTHORIZE ENTERING INTO A DISPLACEMENT RELOCATION ASSISTANCE SERVICES CONTRACT WITH WILSON DEVELOPMENT IN THE AMOUNT OF $53,500. EXPENSES OVER THIS AMOUNT ARE TO BE AUTHORIZED BY SEPARATE APPROVAL OF THE EDA. TRACY HINZ SECONDED THE MOTION. MOTION FAILED DUE TO A LACK OF MAJORITY VOTE, 2-4 WITH STEVE JOHNSON, JIM DAVIDSON, LLOYD HILGART, AND BILL DEMEULES VOTING IN OPPOSITION. Johnson asked if there was a starting point for this project. Schumann stated the starting point would be defined by the project itself. She also added that in consulting with the EDA’s attorney there is a certain amount of latitude in selecting a contractor for professional services. She also said that the question could be posed to Wilson Development to enter into a “Not to Exceed” contract. Johnson stated if no project happened at all, neither contract would be employed. Schumann confirmed. STEVE JOHNSON MOVED AUTHORIZE ENTERING INTO A DISPLACEMENT RELOCATION ASSISTANCE SERVICES CONTRACT WITH WSB & ASSOCIATES IN THE AMOUNT OF $30,768. EXPENSES OVER THIS AMOUNT ARE TO BE AUTHORIZED BY SEPARATE APPROVAL OF THE EDA. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED, 5-1 WITH TRACY HINZ VOTING IN OPPOSITION. 7. Consideration of WSB Economic Development Assistance Contract for 2018 Jim Thares stated that the WSB Economic Development Assistance Contract from 2017 is coming to a close at the end of the year. Staff proposed to renew the contract for another 12 months. The four principal tasks areas include: market engagement, marketing plan implementation, financial packaging and site review/presentation technical assistance, and communication. Per the WSB proposal, the amount is $50 higher per month than last year at $750 per month. The same work would be completed with a small 5 enhancement with Task 3 (financial packaging and site review/presentation technical assistance). Thares introduced Jim Gromberg. Bill Demeules recalled from last year when the EDA entered into the contact, the costs of individually being members of different associations would exceed the costs of the contract with WSB to be involved. Gromberg confirmed, explaining that the services help to get Monticello’s name out there. Lloyd Hilgart asked if Jim Thares also attended some of the meetings and events with WSB. Gromberg confirmed. Steve Johnson asked for examples of specific items that have benefited the City of Monticello and the EDA through the contract. Gromberg referred to a site location planning. He also added that they are working on identification of companies that can fill niches that the City for or to match up with the workforce. Johnson asked if these examples have brought any type of development to Monticello. Gromberg stated that a couple projects have come from the State and he has helped to put together proposals for specific sites. He also added that WSB has been involved with Thares at various meetings to discuss State programs as a potential assistance package for several prospects. Johnson asked if WSB has worked with Thares on prospect projects included in the Director’s Report. Gromberg confirmed stating they have worked with him on Project Novus, Project #6580, Project Kodiak, and Project Ajjax. Bill Tapper asked Thares for his recommendation. Thares confirmed it would be helpful to continue working with WSB. BILL TAPPER MOVED TO APPROVE THE PROPOSED 2018 WSB ECONOMIC DEVELOPMENT ASSISTANCE SERVICES PROPOSAL IN THE AMOUNT OF $9,000. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED, 6-0. 8. Consideration of TIF Financial Management Plan Policy and Guidance Statements Jim Thares stated that various TIF Districts are generating extra TIF dollars for allocation to various redevelopment or affordable housing projects. Nearly $1.7 million is estimated to be available by 2025 for redevelopment projects as well as another $1.4 million for affordable housing developments. Thares stated that the staff report includes a policy statement that reflects the comments of the EDA workshop that was held in September. Thares introduced Tammy Omdal, Northland Securities. Omdal stated that the policies were meant to be general and not restrictive. In the future, the policies could be changed to reflect the EDA’s direction. Omdal stated that there may be projects that come along that are not listed in the policy statements. This would allow staff to bring these projects forward to the EDA. Bill Tapper stated that he did not understand the reason for doing this and felt limitations would be in place for what the EDA could do or bring forth. Omdal provided an example 6 that if the EDA felt that staff shouldn’t be looking at available TIF dollars for land acquisition, this would be a time to give that direction to staff so that they are not putting time or effort into considering that. At the workshop, the EDA did not indicate an interest in returning any net available dollars not committed to current obligations back to the County for distribution to the County, School, and City. Omdal stated that these policy statements are guidelines so staff has a sense of the EDA’s intent is for using these funds. Tapper asked why there were three statements in the redevelopment policy as they seemed redundant. Thares answered saying at the workshop they were trying to be more specific with identifying Block 34 and Block 52. Tapper also asked why Master’s Fifth Avenue was singled out. Angela Schumann explained that sometimes it is important to be specific to provide staff with direction that’s needed and to provide continuity with the planning efforts. She explained that it was not meant to limit the opportunities, but rather to highlight specific areas. Tapper explained that “policy” seemed more directive rather than suggestive. Johnson stated that it was redundant to have comment three and five from the staff report. Tracy Hinz stated she did not recall calling out Master’s Fifth Avenue at the workshop. Johnson asked if this could be changed at any time. Thares confirmed. Schumann added that it is important to have direction to be able to focus time and effort. The policy statements provide that guidance. Hinz echoed concerns with specifying a specific project. Demueles stated that these policy statements drive the EDA’s vision and support. Hinz did not recall conversations about financing the underground parking for Master’s Fifth Avenue. Demueles added that the policy statements does not strictly prohibit or force the EDA to do anything. TRACY HINZ MOVED TO ADOPT THE 2016 TIF MANAGEMENT PLAN AVAILABLE FUNDS POLICY STATEMENT. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED, 5-1 WITH BILL TAPPER IN OPPOSITION. Steve Johnson suggested removing Item 3 in the Affordable Housing section. Lloyd Hilgart commented that he would not be in favor of returning dollars to the County for redistribution. He asked if the money that was available as of 2016 was spent, if it would be deducted from the 2025 value. Omdal stated that it affects the 2025 amount because it projects the accrual of the interest income. She also added that those balances as of fiscal year 2016, is cash available at the end of 2016. There is also the ability to capitalize or use the future projected increment to issue a bond obligation to fund a 7 project today, but the EDA would assume the risk that the future tax increment will be at the levels estimated to cover any debt obligation. Lloyd Hilgart prefers to call out specific projects. 9. Consideration of Appointing Member to Downtown Zoning Committee Bill Demueles noted that the request was for the EDA select a member to the Downtown Zoning Committee. Angela Schumann stated the City Council authorized a work group for a revision of the zoning ordinance to support the Downtown Small Area Study that was adopted by the City Council. It was expected that the group of seven to eight members would begin meeting in early November and wrapping up the beginning of the year. Schumann stated that a member from the City Council, Planning Commission, and EDA would be represented on the committee. An invitation to interested downtown community members would also be sent by staff. Schumann noted that the meetings would be public and that any zoning ordinance amendments would occur with a Public Hearing. BILL TAPPER MOVED TO RECOMMEND THE APPOINTMENT OF EDA MEMBER STEVE JOHNSON TO SERVE. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 5-0. 10. Director’s Report Jim Thares stated that Industry of the Year was held on Wednesday, October 4th, 2017 to present the award to UMC. The keynote speaker was regional economist, Joseph D. Mahon, from the Minneapolis Federal Reserve Bank. Thares also stated that he was continuing to work with the person interested in relocating the Fred’s Auto building to Hastings, MN. Tracy Hinz asked if the building transfer was closed. Thares explained that a Development Agreement would be presented to the EDA with the specifics of the proposed relocate project. It will include an escrow fund to ensure the individual actually completes the work that is agreed to in the Performance Agreement. He did reiterate that the interested party is not going to pay for the building, but would pay to clean up the site. Thares added that the Wright County broker event was held on September 19th. He continues to follow up with individual contacts from that event. Thares also followed up regarding the sign at Otter Creek Business Park. The City’s Public Works Department would be picking it up and would try to rebuild it. Jim Davidson asked if the sign was effective marketing approach. Bill Demueles commented that having a sign out there may be beneficial to people visiting Monticello. Angela Schumann added that the EDA should make sure that the sign has the most current available information and that it is visible from a distance. She also added that long term the EDA could think about an entrance monument to Otter Creek Business Park. Thares provided an update on the active prospects in Monticello. Thares noted that 8 Project Kodiak had a site tour yesterday and received a call that Monticello was not accepted. Hinz asked if staff received any feedback. Thares responded with location concerns. Project Ajjax would also be removed from the list because of the desire to have outdoor storage which exceeds the amount allowed by ordinance. Steve Johnson asked about Project Basil. Thares explained that they are working with another community, but they may be interested in Monticello again. Thares added that Shred-n-Go has moved on due to the cost of land in Otter Creek Business Park. 11. Adjourn BILL TAPPER MOVED TO ADJOURN THE MEETING AT 7:12 P.M. STEVE JOHNSON SECONDED THE MOTION. MOTION CARRIED, 5-0. Recorder: Jacob Thunander ____ Approved: November 8th, 2017 Attest: ____________________________________________ Jim Thares, Economic Development Director EDA Agenda: 11/08/17 1 4. Consideration of Adopting Resolution No. 2017-05 Approving the Fifth Amendment to the Contract for Private Development between Masters Fifth Avenue and the City of Monticello EDA as it relates to TIF District 1-35.(JT) A.REFERENCE AND BACKGROUND: The EDA is being asked to consider adopting Resolution No. 2017-05 approving the Fifth Amendment to the Contract for Private Development between Masters Fifth Avenue and the City of Monticello EDA. Mr. Fluth recently provided a letter asking to extend the development performance timeline under the Contract for an additional 12 months. As a reminder, the Fourth Amendment to the Contract was approved by the EDA at its regular September 14th, 2016 Meeting. When the Fourth Amendment was approved, performance language specifying project commencement and completion dates was added to the contract. The specific dates are: project commencement by December 31, 2017 and full development completion by December 31, 2018. After considerable discussion at the October 11, 2017 meeting, the EDA authorized staff to prepare a Resolution ratifying approval of the Fifth Amendment at the November EDA meeting. Attached is Resolution #2017-05 for the EDA’s consideration. A1. Budget Impact:Per the Contract language, the developer will be required to cover all costs associated with the Amendment. The EDA Attorney drafted Resolution #2017-05, so the charge of approximately $230.00 will be passed onto to the developer. A2. Staff Workload Impact:An estimate of two hours of staff time has been spent to- date in reviewing and responding to the most recent request (including drafting reports). B.ALTERNATIVE ACTIONS: 1.Motion to adopt Resolution #2017-05 approving the Fifth Amendment to the Contract for Private Development between Masters 5th Avenue and the City of Monticello EDA as it relates to TIF District 1-35. 2.Motion to deny adoption of Resolution #2017-05 regarding the Fifth Amendment to the Contract for Private Development between Masters 5th Avenue and the City of Monticello EDA as it relates to TIF District 1-35. 3.Motion to table this item for additional research and/or information. C.STAFF RECOMMENDATION: The EDA authorized staff to draft the Resolution of Approval for the Fifth Amendment at EDA Agenda: 11/08/17 2 the October 11, 2017 meeting. This follow on step is somewhat of a technical procedure wherein Resolution #2017-05 is presented for ratification by the EDA. It should be noted that when the TIF district was created, it was intended to spur and support private commercial redevelopment. The EDA’s approval of Resolution 2017-05 regarding the Fifth Amendment of the Contract for Private Development between Masters 5th Avenue and the City of Monticello EDA as it relates to TIF District 1-35, will allow the developer the additional time to pull together a team to complete the residential or mixed use project by the end of 2019 (start date of 12-31-2018 and completion date of 12-31- 2019). With that background information, staff hereby recommends Alternative #1. D.SUPPORTING DATA: A.Letter from Master Fifth Avenue requesting extension of timeline B.TIF Plan 1-35, excerpt C.Fourth Amendment to Contract for Private Redevelopment D.Staff Report from the October 11, 2017 EDA Meeting Agenda 509040v1 MNI MN190-115 EDA RESOLUTION NO. 2017-05 RESOLUTION APPROVING A FIFTH AMENDMENT OF A CONTRACT FOR PRIVATE DEVELOPMENT BY AND BETWEEN THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY AND MASTERS FIFTH AVENUE, INC. BE IT RESOLVED BY the Board of Commissioners ("Board") of the City of Monticello Economic Development Authority, Monticello, Minnesota (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority currently administers Redevelopment Project No. 1 (the “Project”), pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the “HRA Act”) within an area located in the City, and administers Tax Increment Financing District No. 1-35 (the “TIF District”) within the Project pursuant to Minnesota Statutes, Sections 469.174 to 469.1794. 1.02. The Authority and Masters Fifth Avenue, Inc. (the “Developer”) executed a certain Contract for Private Development, dated as of September 7, 2005, as amended by a First Amendment thereto dated as of June 7, 2006, a Second Amendment thereto dated as of December 18, 2007, a Third Amendment thereto dated as of December 9, 2015, and a Fourth Amendment thereto dated as of September 14, 2016 (as so amended, the “Agreement”), whereunder the Authority pledged Available Tax Increment (as defined in the Contract) to pay or reimburse certain land acquisition costs incurred by the Developer in connection with the development of an approximately 11,000 square foot retail, housing, or mixed-use facility, with associated parking, to be known as Landmark Square II (the “Minimum Improvements”) on certain property in the TIF District. 1.03. The Developer has requested and the Authority has agreed to extend the schedule of construction of the Minimum Improvements, and to that end, the parties propose to execute a Fifth Amendment to the Agreement (the “Fifth Amendment”) in the form presented to the Authority. Section 2. Fifth Amendment Approved. 2.01. The Fifth Amendment as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. The President and Executive Director are hereby authorized to execute, on behalf of the Authority, the Fifth Amendment. 509040v1 MNI MN190-115 Approved by the Board of Commissioners of the City of Monticello Economic Development Authority this 8th day of November, 2017. _____________________________ President ATTEST: Executive Director Master's Fifth Avenue, Inc. 19577 180th Ave NW Big Lake, MN 55309 763-390-0393 September 20, 2017 TO: Monticello Economic Development Authority 505 Walnut Street Monticello, MN 55362 Attention: EDA members We request consideration at your meeting of October 11th to consider modification of TIF District 1-35 agreement and amending the contract for private redevelopment to modify the date to commence construction of the minimum improvements to read "December 31, 2018". Sufficient progress has been made with interested developers to make this change a credible reality. Thank you for your attention to this matter. Master's Fifth Avenue, Inc. Barry D. Fluth, president EDA Agenda: 10/11/17 1 5. Consideration to direct preparation of an Amendment to the Contract for Private Development between Masters Fifth Avenue and the Monticello EDA and modification of Tax Increment Financing Plan for Tax Increment Financing District 1-35. (JT) A. REFERENCE AND BACKGROUND: Consideration of this item is to determine the EDA’s willingness to amend the Contract for Private Development between Masters Fifth Avenue and the Monticello EDA. Mr. Fluth provided a letter indicating that he would like to extend the development performance timeline for an additional 12 months. As you will recall, the most recent amendment to the Contract (4th Amendment) was approved by the EDA at its regular September 14th, 2016 Meeting. When the 4th Amendment was approved, performance language specifying a timeline to commence construction on a project by December 31, 2017 and fully complete the development by December 31, 2018 was added to the document. In the attached letter, the developer states that he is making progress in discussions with interested parties in completing a development on the site located at the northeast corner of Locust and 3rd Street. He is asking for a reset of the commencement of development to be December 31, 2018. It should be noted that the Developer is not asking for additional tax increment for this project. Additional background information is provided for your benefit. TIF District 1-35 was certified in 2006, and was created to fund $170,000 in costs associated with the development of a proposed 11,000 square foot retail commercial project known as “Landmark Square II”. The tax increment generated in the district was intended to reimburse the developer for land acquisition through “pay-as-you-go” TIF assistance. The EDA approved the third amendment of the contract in October 2015. At that time, the developer indicated there was the potential for an exclusively residential project. The developer then submitted the all residential proposal to the City Council for review of a Development Stage PUD in the spring of 2016. That proposal was a 23 unit residential development. That plan was presented to the EDA as part of the 4th Contract amendment as well. If the EDA is willing to consider the amendment and potential modification of the district again, staff will have the EDA’s attorney prepare the required documents for EDA decision at the November meeting. A1. Budget Impact: Per the contract with the developer, the developer will be required to cover all costs associated with the modification. A2. Staff Workload Impact: An estimate of one hour of staff time has been spent to- EDA Agenda: 10/11/17 2 date in reviewing and responding to the most recent request. B. ALTERNATIVE ACTIONS: 1. Motion to direct preparation of an Amendment to the Contract for Private Development between Masters 5th Avenue and the Monticello EDA and potential modification of Tax Increment Financing Plan for Tax Increment Financing District 1- 35. 2. Motion of no action. 3. Motion to table this item for additional information. C. STAFF RECOMMENDATION: The amendment of the contract and modification of the TIF District is a policy question for the EDA. When the TIF district was created, it was intended to spur and support private commercial redevelopment. If the EDA supports the proposed amendment and potential modification, Alternative #1 is recommended. If the EDA wishes to proceed under the 4th Contract Amendment, approved on September 14, 2016, the developer would be required to begin construction by December 31, 2017. This timeline may not be realistic given the work tasks required to be completed before that date. D. SUPPORTING DATA: A. Letter from Master Fifth Avenue requesting extension of timeline B. TIF Plan 1-35, excerpt C. Fourth Amendment to Contract for Private Redevelopment EDA: 11/08/17 1 4d. Consideration of Resolution No. #2017-06 designating a Building (located at 349 West Broadway) in Redevelopment Project No. 1 as Structurally Substandard (JT) A. REFERENCE AND BACKGROUND: This item is follow up step to the EDA’s approval of LHB Architects, Inc. to complete a TIF Qualification building inspection of Fred’s Auto Building located at 349 West Broadway. As noted at the September EDA meeting, the benefit of completing the inspection is that it will document the substandard and blighted conditions of the building and, in the future, allow the EDA to establish this parcel as a single or multi-parcel TIF District for redevelopment purposes. Acceptance of LHB’s inspection report is required in order to complete the process. It is attached as part of the staff report. A1. STAFF IMPACT:There is a limited staff impact in considering entering into a TIF Qualification Inspection Services Contract with LHB, Inc. to qualify the Fred’s property for a future TIF Redevelopment District.To date, staff time involves reviewing possible steps to ensure that the EDA can retain flexible options in moving forward with potential future redevelopment of the Fred’s site. A small amount of additional time involved reviewing service offerings of LHB, Inc. and asking them to submit a proposal as well as drafting the staff report. A2. BUDGET IMPACT:The cost for LHB’s to perform the inspection work and write up report is $3,200, as per the contract approved by the EDA at the September 13, 2017 EDA meeting.The 2017 EDA budget includes a line item for miscellaneous professional services, which will be the source of funding for the service invoice when it is received. B. ALTERNATIVE ACTIONS: 1.Motion to adopt Resolution #2017-06 designating a Building (located at 349 West Broadway Street) within Redevelopment Project No.1 as Structurally Substandard 2.Motion to deny adoption of Resolution #2017-06 designating a Building (located at 349 West Broadway Street) within Redevelopment Project No.1 as Structurally Substandard. 3. Motion to table consideration of Resolution #2017-06 for further research of information. C. STAFF RECOMMENDATION: Staff recommends alternative 1. By completing the TIF qualifying inspection process, the EDA preserves it’s options for the future redevelopment of this site. If the EDA chooses to use a redevelopment TIF district to redevelop the site, documentation of the blighted and substandard conditions of the structures on the parcel is required. This action will give the EDA the most flexibility for this parcel in the near future. EDA: 11/08/17 2 D. SUPPORTING DATA: a. LHB, Inc. TIF Qualification Inspection Report for Fred’s Auto Building located at 349 West Broadway e. Aerial Photo of Property 510196v1 MN325-31 CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2017-06 RESOLUTION DESIGNATING A BUILDING WITHIN REDEVELOPMENT PROJECT NO. 1 AS STRUCTURALLY SUBSTANDARD BE IT RESOLVED By the Board of Commissioners ("Board") of the City of Monticello Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. Under Minnesota Statutes, Section 469.174, subd. 10(d), the Authority is authorized to deem parcels as occupied by structurally substandard buildings for the purposes of creating a redevelopment or renewal and renovation tax increment financing district, despite prior demolition or removal of the buildings, subject to certain terms and conditions as described in this resolution. 1.02. The Authority intends to cause demolition of the building located on the property described in Exhibit A hereto (the “Designated Property”), and may in the future include the Designated Property in a redevelopment or renewal and renovation tax increment financing district as defined in Minnesota Statutes, Sections 469.174, subd. 10. Section 2. Building Designated Substandard; Other Proceedings. 2.01. The Authority finds that the building on the Designated Property as described in Exhibit A is structurally substandard to a degree requiring substantial renovation or clearance, based upon the analysis of such building by LHB, Inc. entitled “TIF Analysis Findings for 349 Broadway West, Monticello, Minnesota,” dated October 20, 2017, on file in City Hall. 2.02. After the date of approval of this resolution, the building on the Designated Property may be demolished or removed by the Authority, or such demolition or removal may be financed by the Authority, or may be undertaken by a developer under a development agreement with the Authority. 2.03. The Authority intends to include the Designated Property in a redevelopment or renewal and renovation tax increment financing district, and to file the request for certification of such district with the Wright County auditor within three years after the date of building demolition on the Designated Property. 2.04. Upon filing the request for certification of the new tax increment financing district, the Authority will notify the Wright County auditor that the original tax capacity of the Designated Property must be adjusted to reflect the greater of (a) the current net tax capacity of the parcel, or (b) the estimated market value of the parcel for the year in which the building was demolished or removed, but applying class rates for the current year, all in accordance with Minnesota Statutes, Section 469.174, subd. 10(d). 510196v1 MN325-31 2 2.05. Authority staff and consultants are authorized to take any actions necessary to carry out the intent of this resolution. Approved by the Board of Commissioners of the City of Monticello Economic Development Authority this 8th day of November, 2017. President ATTEST: Secretary 510196v1 MN325-31 3 EXHIBIT A Description of Designated Property The South ½ of Lots 1, 2, and 3, in Block 50, Townsite of Monticello, according to the plat on file and of record in the office of the Register of Deeds in and for Wright County, Minnesota; Said South ½ of Lots 1, 2, and 3, Block 50, can also be described as follows: Beginning at the mid-point on the common line between Lots 3 and 4, in said Block; thence Southerly along said common line 82.5 feet to the Southerly line of said Block (being the Southeast corner of said Lot 3); thence Westerly along the Southerly line of Lots 3, 2 and 1 for a distance of 99 feet to the Southwest corner of Lot 1; thence Northerly along the Westerly line of Lot 1 for a distance of 82.5 feet; thence straight Easterly 99 feet to the point of beginning and there terminating. Subject to existing easements, restrictions and reservations of record, if any. October 20, 2017 Jim Thares, Economic Development Manager City of Monticello EDA 505 Walnut Street Monticello, Minnesota 55362 TIF ANALYSIS FINDINGS FOR 349 BROADWAY WEST, MONTICELLO, MINNESOTA LHB was hired to inspect Fred’s Gas Station at 349 Broadway West in Monticello, Minnesota, in order to determine if it meets the definition of “Substandard” as defined by Minnesota Statutes, Section 469.174, subdivision 10. The building parcel may potentially be part of a future Redevelopment TIF District, so will need to be compliant with all of the statutes pertaining to a Redevelopment District. The parcel is located at the East corner of Linn Street and Broadway West (see Diagram 1). Diagram 1 TIF Analysis for 349 Broadway West Page: 2 Date: October 20, 2017 CONCLUSION After inspecting and evaluating the building on October 6, 2017 and applying current statutory criteria for a Redevelopment District under Minnesota Statutes, Section 469.174, Subdivision 10, it is our professional opinion that the building qualifies as substandard. The remainder of this letter and attachments describe our process and findings in detail. MINNESOTA STATUTE 469.174, SUBDIVISION 10 REQUIREMENTS The property was inspected in accordance with the following requirements under Minnesota Statutes, Section 469.174, Subdivision 10(c), which states: Interior Inspection “The municipality may not make such determination [that the building is structurally substandard] without an interior inspection of the property...” Exterior Inspection and Other Means “An interior inspection of the property is not required, if the municipality finds that (1) the municipality or authority is unable to gain access to the property after using its best efforts to obtain permission from the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard.” Documentation “Written documentation of the findings and reasons why an interior inspection was not conducted must be made and retained under section 469.175, subdivision 3(1).” Qualification Requirements Minnesota Statutes, Section 469.174, Subdivision 10 (a) (1) requires two tests for occupied parcels: 1. Coverage Test …“parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, or paved or gravel parking lots” The coverage required by the parcel to be considered occupied is defined under Minnesota Statutes, Section 469.174, Subdivision 10(e), which states: “For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or other similar structures.” The LHB team reviewed parcel 155-010-050011 (349 Broadway West): • The parcel is approximately 8,291 square feet and is approximately 97 percent covered by buildings, parking lots or other improvements. Findings: The parcel is covered by buildings, parking lots or other improvements, exceeding the 15 percent parcel requirement. 2. Condition of Buildings Test Minnesota Statutes, Section 469.174, Subdivision 10(a) states, “…and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance;” TIF Analysis for 349 Broadway West Page: 3 Date: October 20, 2017 a. Structurally substandard is defined under Minnesota Statutes, Section 469.174, Subdivision 10(b), which states: “For purposes of this subdivision, ‘structurally substandard’ shall mean containing defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance.” i. We do not count energy code deficiencies toward the thresholds required by Minnesota Statutes, Section 469.174, Subdivision 10(b)) defined as “structurally substandard”, due to concerns expressed by the State of Minnesota Court of Appeals in the Walser Auto Sales, Inc. vs. City of Richfield case filed November 13, 2001. Findings: The gas station at 349 Broadway West exceeds the criteria required to be determined a substandard building (see the attached Building Code, Condition Deficiency and Context Analysis Report). b. Buildings are not eligible to be considered structurally substandard unless they meet certain additional criteria, as set forth in Subdivision 10(c) which states: “A building is not structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs, or other similar reliable evidence.” “Items of evidence that support such a conclusion [that the building is not disqualified] include recent fire or police inspections, on-site property tax appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence.” LHB counts energy code deficiencies toward the 15 percent code threshold required by Minnesota Statutes, Section 469.174, Subdivision 10(c)) for the following reasons: • The Minnesota energy code is one of ten building code areas highlighted by the Minnesota Department of Labor and Industry website where minimum construction standards are required by law. • Chapter 13 of the 2015 Minnesota Building Code states, “Buildings shall be designed and constructed in accordance with the International Energy Conservation Code.” Furthermore, Minnesota Rules, Chapter 1305.0021 Subpart 9 states, “References to the International Energy Conservation Code in this code mean the Minnesota Energy Code…” • The Senior Building Code Representative for the Construction Codes and Licensing Division of the Minnesota Department of Labor and Industry confirmed that the Minnesota Energy Code is being enforced throughout the State of Minnesota. • In a January 2002 report to the Minnesota Legislature, the Management Analysis Division of the Minnesota Department of Administration confirmed that the construction cost of new buildings complying with the Minnesota Energy Code is higher than buildings built prior to the enactment of the code. • Proper TIF analysis requires a comparison between the replacement value of a new building built under current code standards with the repairs that would be necessary to bring the existing building up to current code standards. In order for an equal comparison to be made, all applicable code chapters should be applied to both scenarios. Since current construction estimating software automatically applies the TIF Analysis for 349 Broadway West Page: 4 Date: October 20, 2017 construction cost of complying with the Minnesota Energy Code, energy code deficiencies should also be identified in the existing structures. Findings: The building has code deficiencies exceeding the 15 percent building code deficiency criteria required to be determined substandard (see the attached Building Code, Condition Deficiency and Context Analysis Report). TEAM CREDENTIALS Michael A. Fischer, AIA, LEED AP - Project Principal/TIF Analyst Michael has 29 years of experience as project principal, project manager, project designer and project architect on planning, urban design, educational, commercial and governmental projects. He has become an expert on Tax Increment Finance District analysis assisting over 100 cities with strategic planning for TIF Districts. He is an Architectural Principal at LHB and currently leads the Minneapolis office. Michael completed a two-year Bush Fellowship, studying at MIT and Harvard in 1999, earning Masters degrees in City Planning and Real Estate Development from MIT. He has served on more than 50 committees, boards and community task forces, including a term as a City Council President and as Chair of a Metropolitan Planning Organization. Most recently, he served as Chair of the Edina, Minnesota planning commission and is currently a member of the Edina city council. Michael has also managed and designed several award-winning architectural projects, and was one of four architects in the Country to receive the AIA Young Architects Citation in 1997. Philip Waugh – Project Manager/TIF Analyst Philip is a project manager with 13 years of experience in historic preservation, building investigations, material research, and construction methods. He previously worked as a historic preservationist and also served as the preservation specialist at the St. Paul Heritage Preservation Commission. Currently, Philip sits on the Board of Directors for the Preservation Alliance of Minnesota. His current responsibilities include project management of historic preservation projects, performing building condition surveys and analysis, TIF analysis, writing preservation specifications, historic design reviews, writing Historic Preservation Tax Credit applications, preservation planning, and grant writing. Phil Fisher – Inspector For 35 years, Phil Fisher worked in the field of Building Operations in Minnesota including White Bear Lake Area Schools. At the University of Minnesota he earned his Bachelor of Science in Industrial Technology. He is a Certified Playground Safety Inspector, Certified Plant Engineer, and is trained in Minnesota Enterprise Real Properties (MERP) Facility Condition Assessment (FCA). His FCA training was recently applied to the Minnesota Department of Natural Resources Facilities Condition Assessment project involving over 2,000 buildings. Attachments We have attached a Building Code, Condition Deficiency and Context Analysis Report, Replacement Cost Report, Code Deficiency Report, and thumbnail photo sheets of the building. Please contact me at (612) 752-6920 if you have any questions. LHB INC. MICHAEL A. FISCHER, AIA, LEED AP SENIOR VICE PRESIDENT O:\17Proj\170668\400 Design\406 Reports\Letter of Finding\170668 20171020 Fred's Gas Station Redevelopment TIF Letter of Finding.docx Fred’s Gas Station TIF Analysis Page 1 of 2 Building Report LHB Project No. 170668 Fred’s Gas Station – 349 Broadway West Fred’s Gas Station TIF Analysis Building Code, Condition Deficiency and Context Analysis Report October 19, 2017 Building Name: Fred’s Gas Station Address: 349 Broadway West, Monticello, Minnesota 55362 Parcel ID: 155-010-050011 Inspection Date(s) & Time(s): October 6, 2017 10:00 am Inspection Type: Interior and Exterior Summary of Deficiencies: It is our professional opinion that this building is Substandard because: - Substantial renovation is required to correct Conditions found. - Building Code deficiencies total more than 15% of replacement cost, NOT including energy code deficiencies. Estimated Replacement Cost: $200,240 Estimated Cost to Correct Building Code Deficiencies: $67,347 Percentage of Replacement Cost for Building Code Deficiencies: 33.63% Defects in Structural Elements 1. None observed. Combination of Deficiencies 1. Essential Utilities and Facilities a. There is no accessible route into all areas of the building. b. There is no ADA compliant restroom. c. There is no code required drinking fountain in the building. d. Door hardware is not ADA code compliant. e. The glass entry door does not have a code required 10-inch kick plate. 2. Light and Ventilation a. The interior lighting does not comply with code for minimum light levels. b. The HVAC system does not comply with mechanical/building code. 3. Fire Protection/Adequate Egress a. Vinyl floor covering is damaged creating an impediment for emergency egress, contrary to code. b. Electric circuit box is not protected per code. c. There are no code required smoke detectors in the building. d. There is no code required emergency lighting in the building. e. There is no code required emergency notification system in the building. f. There is no code required building sprinkler system installed. Fred’s Gas Station TIF Analysis Page 2 of 2 Building Report LHB Project No. 170668 Fred’s Gas Station – 349 Broadway West 4. Layout and Condition of Interior Partitions/Materials a. Interior windows show signs of water intrusion, contrary to code. b. Interior acoustical ceiling tile is damaged/missing. c. Interior ceiling surfaces are damaged from water intrusion, contrary to code. d. Interior walls should be repainted. e. Interior ceilings should be repainted. f. There is no code required hazardous waste collection system. g. Garage door motors are not properly guarded per code. 5. Exterior Construction a. Exterior block work is damaged, allowing for water intrusion, contrary to code. b. Exterior metal surfaces need to be repainted. c. Exterior block surfaces should be repainted. d. Exterior wood surfaces should be repainted. e. Exterior glass block is damaged and should be replaced. f. Exterior downspouts are missing, causing staining to exterior block. g. It is apparent from visible roof leaks that the roofing system has failed to prevent water intrusion. Description of Code Deficiencies 1. An accessible route into all areas of the building needs to be created per code. 2. An ADA code compliant restroom should be created. 3. A code required drinking fountain should be installed. 4. ADA code compliant door hardware should be installed. 5. A code required 10-inch kick plate should be installed on both sides of the glass entrance door. 6. Interior lighting should be upgraded to comply with code. 7. The HVAC system should be replaced to comply with mechanical/building code. 8. Vinyl floor covering should be replaced to create a code required unimpeded means of egress. 9. The electrical circuit box should be fully protected per code. 10. Code required smoke detectors should be installed. 11. Code required emergency lighting should be installed. 12. Code required emergency notification system should be installed. 13. Code required building sprinkler system should be installed. 14. Windows should be replaced to prevent water intrusion per code. 15. A code required hazardous waste collection system should be installed. 16. Exposed gears and belts on overhead garage doors should be protected per code. 17. Damaged/cracked exterior block work should be repaired to prevent water intrusion per code. 18. Roofing material should be replaced to prevent water intrusion per code. Overview of Deficiencies This former gas station/service garage has been vacant for several years. Heat and water have been turned off to the building and as a result, the interior surfaces are failing. The exterior walls need repair and the roof needs to be replaced. There is no accessible route to all areas of the interior building. There are also other numerous accessibility issues. O:\17Proj\170668\400 Design\406 Reports\Building Reports\170668 Gas Station Building Report.docx Fred's Gas Station TIF Analysis Replacement Cost Report Square Foot Cost Estimate Report Date:10/18/2017 Fred's Gas Station City of Monticello 349 Broadway West, Monticello, Minnesota,  55362 Building Type: Garage, Repair with Concrete Block / Wood  Joists Location:MINNEAPOLIS, MN Story Count:1 Story Height (L.F.):14 Floor Area (S.F.):1700 Labor Type:OPN Basement Included:No  Data Release:Year 2017 Quarter 3 Cost Per Square Foot:$117.80  Building Cost:$200,240.74  % of Total Cost Per S.F. Cost 20.93% 22.41 38,100.05 A1010 Standard Foundations 13.60 23,119.11 8.79 14,945.85 4.81 8,173.26 A1030 Slab on Grade 8.47 14,394.95 8.47 14,394.95 A2010 Basement Excavation 0.34 585.99 0.34 585.99 32.17% 34.45 58,561.37 B1020 Roof Construction 8.06 13,699.87 8.06 13,699.87 B2010 Exterior Walls 17.00 28,906.01 17.00 28,906.01 B2020 Exterior Windows 2.70 4,583.80 2.70 4,583.80 B2030 Exterior Doors 4.52 7,686.11 0.61 1,044.86 3.91 6,641.25 B3010 Roof Coverings 2.17 3,685.58 1.69 2,873.00 0.42 715.66 Concrete block (CMU) wall, regular weight, 75% solid, 8 x 8 x 16, 4500 PSI,  reinforced, vertical #5@32", grouted Estimate Name: Costs are derived from a building model with basic components. Scope differences and market conditions can cause costs to vary significantly. A Substructure Foundation wall, CIP, 4' wall height, direct chute, .148 CY/LF, 7.2 PLF, 12"  thick Strip footing, concrete, reinforced, load 11.1 KLF, soil bearing capacity 6 KSF,  12" deep x 24" wide Slab on grade, 6" thick, light industrial, reinforced Excavate and fill, 10,000 SF, 4' deep, sand, gravel, or common earth, on site  storage B Shell Wood roof, truss, 4/12 slope, 24" O.C., 30' to 43' span Windows, aluminum, sliding, standard glass, 5' x 3' Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3'‐0" x 7'‐0"  opening Door, steel 24 gauge, overhead, sectional, manual operation, 12'‐0" x 12'‐0"  opening Roofing, single ply membrane, EPDM, 45 mils, mechanically fastened, batten  strps Gutters, box, steel, galvanized, 28 ga thick, 5", enameled finish Fred's Gas Station TIF Analysis LHB Project No. 170668 Page 1 of 3 Replacement Cost Report Fred's Gas Station - 349 Broadway West 0.06 96.92 12.87% 13.78 23,426.68 C1010 Partitions 5.11 8,689.32 1.75 2,975.41 3.36 5,713.91 C1020 Interior Doors 0.41 694.09 0.41 694.09 C1030 Fittings 0.93 1,580.86 0.93 1,580.86 C3010 Wall Finishes 5.52 9,389.74 4.13 7,021.41 0.77 1,316.24 0.62 1,052.09 C3020 Floor Finishes 1.37 2,322.42 1.12 1,903.58 0.25 418.84 C3030 Ceiling Finishes 0.44 750.25 0.44 750.25 34.03% 36.45 61,948.94 D2010 Plumbing Fixtures 3.25 5,518.20 1.11 1,880.48 0.23 396.46 0.58 984.94 0.58 990.29 0.42 720.38 0.32 545.65 D2020 Domestic Water Distribution 0.74 1,262.70 0.74 1,262.70 D3050 Terminal & Package Units 9.95 16,907.78 9.95 16,907.78 D4010 Sprinklers 4.73 8,048.34 4.73 8,048.34 D4020 Standpipes 1.04 1,765.19 0.95 1,614.95 0.09 150.24 D5010 Electrical Service/Distribution 4.43 7,527.89 1.76 2,987.80 0.84 1,421.94 1.83 3,118.15 D5020 Lighting and Branch Wiring 8.52 14,475.90 2.18 3,708.31 0.30 511.63 0.62 1,060.39 5.41 9,195.57 2 coats paint on masonry with block filler Downspout, steel, rectangular, corrugated, 3" x 4", galvanized, 28 ga thick C Interiors Lightweight block 4" thick Concrete block (CMU) partition, light weight, solid, 8" thick, no finish Door, single leaf, kd steel frame, hollow metal, commercial quality, flush, 3'‐ 0" x 7'‐0" x 1‐3/8" Toilet partitions, cubicles, ceiling hung, stainless steel Water cooler, electric, wall hung, wheelchair type, 7.5 GPH Painting, masonry or concrete, latex, brushwork, primer & 2 coats Painting, masonry or concrete, latex, brushwork, addition for block filler Concrete topping, hardeners, metallic additive, minimum Vinyl, composition tile, minimum Acoustic ceilings, 5/8" fiberglass board, 24" x 48" tile, tee grid, suspended  support D Services Water closet, vitreous china, bowl only with flush valve, wall hung Urinal, vitreous china, wall hung Lavatory w/trim, wall hung, PE on CI, 19" x 17" Service sink w/trim, PE on CI,wall hung w/rim guard, 24" x 20" Shower, stall, baked enamel, molded stone receptor, 30" square Fluorescent fixtures recess mounted in ceiling, 1.6 watt per SF, 40 FC, 10  fixtures @32watt per 1000 SF Gas fired water heater, residential, 100< F rise, 30 gal tank, 32 GPH Rooftop, single zone, air conditioner, factories, 10,000 SF, 33.33 ton Wet pipe sprinkler systems, steel, ordinary hazard, 1 floor, 10,000 SF Wet standpipe risers, class III, steel, black, sch 40, 4" diam pipe, 1 floor floors Overhead service installation, includes breakers, metering, 20' conduit &  wire, 3 phase, 4 wire, 120/208 V, 200 A Feeder installation 600 V, including RGS conduit and XHHW wire, 200 A Switchgear installation, incl switchboard, panels & circuit breaker, 120/208  V, 3 phase, 400 A Receptacles incl plate, box, conduit, wire, 4 per 1000 SF, .5 watts per SF Miscellaneous power, 1 watt Central air conditioning power, 3 watts Fred's Gas Station TIF Analysis LHB Project No. 170668 Page 2 of 3 Replacement Cost Report Fred's Gas Station - 349 Broadway West D5030 Communications and Security 3.69 6,275.58 2.15 3,651.92 1.31 2,222.95 0.24 400.71 D5090 Other Electrical Systems 0.10 167.36 0.10 167.36 0% 0 0 E1090 Other Equipment 0 0 0% 0 0 0% 0 0 100% $107.09 $182,037.04  10.00% $10.71 $18,203.70  0.00% $0.00 $0.00  0.00% $0.00 $0.00  $117.80 $200,240.74 Total Building Cost Communication and alarm systems, fire detection, addressable, 25 detectors,  includes outlets, boxes, conduit and wire Fire alarm command center, addressable with voice, excl. wire & conduit Internet wiring, 4 data/voice outlets per 1000 S.F. Generator sets, w/battery, charger, muffler and transfer switch, gas/gasoline  operated, 3 phase, 4 wire, 277/480 V, 15 kW E Equipment & Furnishings F Special Construction G Building Sitework SubTotal Contractor Fees (General Conditions,Overhead,Profit) Architectural Fees User Fees Fred's Gas Station TIF Analysis LHB Project No. 170668 Page 3 of 3 Replacement Cost Report Fred's Gas Station - 349 Broadway West Fred's Gas Station TIF Analysis Code Deficiency Cost Report 349 Broadway West, Monticello, MN 55362 - Parcel 155-010-050011 Code Related Cost Items Unit Cost Units Unit Quantity Total Accessibility Items Accessible Route Create an accessible route to all areas within the building 1,500.00$ Lump 1 1,500.00$ Restroom Install ADA code compliant restroom 3.86$ SF 1700 6,562.00$ Drinking Fountain Install code required drinking fountain 0.32$ SF 1700 544.00$ Door Hardware Install code compliant door hardware 250.00$ EA 4 1,000.00$ Install code required 10-inch kick plates on glass doors 200.00$ EA 1 200.00$ Structural Elements -$ Exiting Vinyl Flooring Replace damaged vinyl flooring to create an unimpeded means for emergency egress 0.25$ SF 1700 425.00$ Fire Protection Smoke Detectors Install code compliant smoke detectors 2.15$ SF 1700 3,655.00$ Emergency Lighting Install code compliant emergency lighting 500.00$ Ea 3 1,500.00$ Emergency Notification System Install code compliant emergency notification system 1.31$ SF 1700 2,227.00$ Building Sprinkler System Install code required building sprinkler system 5.77$ SF 1700 9,809.00$ Hazardous Waste Collection Install code required hazardous waste collection system 2,500.00$ Lump 1 2,500.00$ Exterior Construction Windows Replace windows to prevent water intrusion per code 2.70$ SF 1700 4,590.00$ Concrete Blocks Repair/replace damaged concrete blocks to prevent water intrusion per code 1.27$ SF 1700 2,159.00$ Fred's Gas Station TIF Analysis LHB Project No. 170688 Page 1 of 2 Code Deficiency Cost Report Fred's Gas Station - 349 Broadway West Code Related Cost Items Unit Cost Units Unit Quantity Total Roof Construction Roofing Material Remove existing damaged roofing material 0.25$ SF 1700 425.00$ Replace damaged roofing material to prevent water intrusion per code 2.17$ SF 1700 3,689.00$ Mechanical- Electrical Mechanical Install code compliant HVAC system 9.95$ SF 1700 16,915.00$ Electrical Install code compliant interior lighting.5.41$ SF 1700 9,197.00$ Protect electrical circuit box per code 150.00$ Lump 1 150.00$ Protect garage door opener moving parts per code 150.00$ Lump 2 300.00$ Total Code Improvements 67,347$ Fred's Gas Station TIF Analysis LHB Project No. 170688 Page 2 of 2 Code Deficiency Cost Report Fred's Gas Station - 349 Broadway West Fred’s Gas Station TIF Analysis Photos: 349 Broadway West Page 1 of 6 P1150752.JPG P1150753.JPG P1150754.JPG P1150755.JPG P1150756.JPG P1150757.JPG P1150758.JPG P1150759.JPG P1150760.JPG P1150761.JPG P1150762.JPG P1150763.JPG Fred’s Gas Station TIF Analysis Photos: 349 Broadway West Page 2 of 6 P1150764.JPG P1150765.JPG P1150766.JPG P1150767.JPG P1150768.JPG P1150769.JPG P1150770.JPG P1150771.JPG P1150772.JPG P1150773.JPG P1150774.JPG P1150775.JPG Fred’s Gas Station TIF Analysis Photos: 349 Broadway West Page 3 of 6 P1150776.JPG P1150777.JPG P1150778.JPG P1150779.JPG P1150780.JPG P1150781.JPG P1150782.JPG P1150783.JPG P1150784.JPG P1150785.JPG P1150786.JPG P1150787.JPG Fred’s Gas Station TIF Analysis Photos: 349 Broadway West Page 4 of 6 P1150788.JPG P1150789.JPG P1150790.JPG P1150791.JPG P1150792.JPG P1150793.JPG P1150794.JPG P1150795.JPG P1150796.JPG P1150797.JPG P1150798.JPG P1150799.JPG Fred’s Gas Station TIF Analysis Photos: 349 Broadway West Page 5 of 6 P1150800.JPG P1150801.JPG P1150802.JPG P1150803.JPG P1150804.JPG P1150805.JPG P1150806.JPG P1150807.JPG P1150808.JPG P1150809.JPG P1150810.JPG P1150811.JPG Fred’s Gas Station TIF Analysis Photos: 349 Broadway West Page 6 of 6 P1150812.JPG P1150813.JPG P1150814.JPG P1150815.JPG P1150816.JPG P1150817.JPG Wright County, MN Developed by The Schneider Corporation Par cel ID 155010050011 Sec/T wp/Rng 11-121-025 Pr oper ty Address 349 BROADWAY W MONTIC ELL O Alternate ID n/a Class 958 - MUNIC IPAL PUBL IC SERVIC E-OTHER Acreag e n/a Ow ner Addr ess C ITY OF MONTIC ELL O EDA %A/P 505 WALNUT ST STE 1 MONTIC EL LO, MN 55362 Distr ict 1101 C ITY OF MONTIC ELL O 882 H Br ief T ax Descr iption Sect-11 Twp-121 Rang e-025 ORIGINAL PLAT MONTIC EL L O L ot-001 Block-050 S1/2 OF LTS 1,2&3 (Note: Not to be used on leg a l documents) Date created: 9/6/2017 Last Data Uploa ded: 9/6/2017 3:07:21 AM 105 ft Overvi ew Legend Roads C SAHC L C TYC L MUNIC L PRIVATEC L TWPC L Highw ays Intersta te State Hwy US Hwy City/T ow nship Limits c t Parcels  EDA: 11/08/17 1 4e. Consideration of Downtown Plan Marketing Flyers (JT) A. REFERENCE AND BACKGROUND: This agenda item is to ask the EDA to consider approving the proposed downtown marketing flyers to help market the development sites and opportunities in the core are of the City and therein take an important step in implementing the Small Area Plan. Staff sought three quotes and received the same number for this creative and design work. The “opportunities flyers marketing pieces” are included as a work component in the 2017-18 Marketing Plan. The EDA approved the Plan at its September 13, 2017 meeting. The three quotes are from: Cuningham Group, Inc. $3,000 WSB & Associates, Inc. $3,250 Majirs, Inc. $ 720 A1. STAFF IMPACT: Staff impacts in considering the Marketing Plan work components such as creating downtown opportunities marketing flyers has been minimal. The primary work task has been to contact the three firms to provide them the scope of work and timeline and ask for the quotes. A2. BUDGET IMPACT: The budgetary impact for the proposed downtown opportunities marketing flyers is approximately $3,250. The 2017-18 Marketing Plan included $2,000 in the budget for the downtown effort. Exhibit D is attached showing the Marketing Plan. Consistent with the previous statements made to the EDA, staff will review any items that cost more than $1,000 with the EDA. This threshold is consistent with the City Council policy for expenditures from the General Fund as well. B. ALTERNATIVE ACTIONS: 1. Motion to approve the preferred and most qualified quote for creating and designing the downtown opportunities marketing flyers. In this case, staff believes WSB & Associates is the most qualified and cost effective quote due to their Community Development Department having a strong understanding of the ultimate goals of the EDA and also due to their intimate and intuitive understanding of the view of developers and their decision making process. 2. Motion to deny approval of WSB & Associates downtown opportunities marketing flyers quote of $3,250. 3. Motion to table consideration of approval of the downtown marketing flyers quote for further review and discussion. 4. Motion of other. EDA: 11/08/17 2 C. STAFF RECOMMENDATION: Staff recommends alternative #1. By approving WSB & Associates as the vendor for the creation and design of the downtown opportunities marketing flyers, the EDA can be assured of receiving a quality product that will carry a strong message to the audience of developers. The message involves more than just the information about the downtown sites that feature significant public ownership. It also involves highlighting information regarding the City of Monticello’s many assets and the development opportunities that exist in the community. WSB & Associates is positioned to understand this and effectively utilize that knowledge in this effort. D. SUPPORTING DATA: a. Cuningham Group, Inc. quote b. WSB & Associates quote c. Majirs, Inc. quote d. Adopted 2017-18 Marketing Plan Page 1 of 4 October 18, 2017 Jim Thares City of Monticello Department of Community development 505 Walnut Street Monticello, MN 55362 Subject: PROPOSAL AND AGREEMENT FOR PROVIDING PROFESSIONAL SERVICES Site Marketing for Downtown Monticello Dear Angela: Cuningham Group Architecture, Inc. (Architect) presents to the City of Monticello (Client) this Proposal and Agreement for professional services to assist you in the Walnut Street Corridor Project (Project). PROJECT UNDERSTANDING We understand that the City of Monticello is in the process of marketing several publicly owned sites for redevelopment in accordance to the recently approved Small Area Plan. Part of this process is attracting developers to invest in Downtown Monticello. The City needs individual sheets or brochures that can be shared with potential developers for the purpose of piquing their interest in Downtown Monticello in general, and three publicly owned sites in particular. APPROACH/SCOPE OF SERVICES Based on our conversations with you to date, we anticipate providing to you the following scope of services: Marketing sheets for the following sites  Block 52,  Block 34,  City owned property at Walnut and 3rd Street. Three individual sheets / packets will contain the following:  Aspirational illustration of each site.  Aerial photograph identifying the site and context, including public and privately owned properties  Market information from the Small Area Plan  Other relevant material necessary to assist a potential developer with due diligence, such as proposed uses, surrounding features. PROJECT TEAM Andrew Dresdner, AICP Jena Stanton FEES Page 2 of 4 Compensation for Basic Services as described herein shall be a stipulated sum of $3,000 SCHEDULE Draft #1: Late October Final Draft: Early November REIMBURSABLE EXPENSES Reimbursable Expenses are in addition to the above fees. They include all normal expenses incurred by Architect for the benefit of the Project, including out-of-town travel (if any and if authorized), mileage, long-distance telephone calls, messenger service, printing, etc. These expenses will be billed at 1.15 times their direct cost to Architect. ADDITIONAL SERVICES Services you may request such as physical models, 3-D computer modeling, additional drawings or any renderings, engineering or special consultants, or other special services not specifically included in the above scope of services shall be invoiced at Architect’s current hourly rates or at 1.15 times the direct cost of consultant’s charges to Architect. In addition, any changes in the scope will also be billed at an hourly rate. Architect’s hourly rates will be per Cuningham Group Hourly Rates, attached as Exhibit A. Additional Services will be performed only upon your written authorization. INVOICING Billings will be issued at 30-day intervals. Payment is due and payable upon invoice receipt. Interest of 1.0% per month will be due on the unpaid balance beginning 30 days after invoice date. Client agrees to reimburse Architect for all costs of collection including attorney fees, costs, and expenses. USE OF SUPPLIED INFORMATION Client agrees to provide and/or obtain all required licenses, including copyright license, to allow Architect to reproduce, use and incorporate all Client-supplied Project-related drawing or other information and agrees to indemnify, defend, and hold Architect and its consultants harmless from or against any and all claims arising out of or relating to Architect’s or its consultants’ Project-related reproduction, use, or incorporation of such information. Client will provide Architect with base map information that accurately indicates existing conditions. OTHER TERMS AND CONDITIONS Except as otherwise modified herein, the terms and conditions of an unmodified AIA Document B101, Standard Form of Agreement Between Owner and Architect, 2007 edition [B727 "Special Services" or B101 "Standard Form" may also be used in appropriate circumstances] (attached as Exhibit B), where Client acts as Owner for purposes of the Agreement, shall apply to all services provided under this Proposal and Agreement. The Client and Architect Page 3 of 4 agree that arbitration, as described in the attached AIA Document, shall be the selected method of adjudicated dispute resolution. Client shall furnish the services of a contractor or cost consultant that shall be responsible for preparing all estimates of the Cost of the Work. If Client does not have such a consultant, Architect can provide a list of qualified contractors or cost consultants for Client’s use. If the Client’s budget at 50% completion of Design Development Phase Services or later is exceeded by Client’s cost estimate or the lowest bona fide bid or negotiated proposal, and modifications to the Design Development or Construction Documents are required to reduce the actual or estimated Cost of the Work to comply with Client’s budget, Architect will provide such modifications as an Additional Service, except to the extent Architect failed to incorporate Client’s or Client’s cost estimator’s previously issued specific cost control directives. Client agrees to provide to Architect utility bills or other utility usage data on an annual basis for the [two to five, as appropriate] years following Substantial Completion. This information would be used to understand the metered performance of the building compared against industry benchmarks and for internal assessment of the design. The summary of associated analysis will be shared with Client upon request. Architect expressly disclaims all express or implied warranties and guarantees with respect to energy performance, and Client agrees to release, hold harmless, and indemnify Architect from any liability or claims related to the energy performance of the building. Architect and its consultants will be using building information modeling for the sole purpose of preparing and coordinating their Drawings, without an expectation that the model will be relied upon by other Project participants. If Client, Client’s contractor or consultants, or other parties as appropriate desire to use the model for any purpose, the Architect, Client, and other appropriate parties will establish and agree to building information modeling protocols, which shall address authorship and ownership, level of development, and authorized uses of the model, processes for exchanging, sharing, and resolving changes to the model, and anticipated authorized uses for facilities management or others, following completion of the Project. Preparation of the protocols and operations and services provided thereunder shall be Additional Services. This Proposal and Agreement shall be subject to and enforced under the laws of the State of Minnesota. With your signature below you are indicating your acceptance of the understandings, terms and conditions of this Proposal and Agreement. This Proposal and Agreement may be terminated by either party upon seven days’ written notice should either party fail to perform substantially in accordance with its terms. Failure of Client to make payments to Architect within 45 days of invoice date shall be considered substantial non-performance and cause for suspension or termination of Architect’s services. If you instruct us to begin, or allow us to continue, performing or providing Project services prior to returning a signed copy of this Proposal and Agreement it will be understood that all of its terms, and the attached or referenced exhibits, are acceptable and all parties will be bound by the terms of this Proposal and Agreement. If this Proposal and Agreement meets with your approval, please sign two copies and return one copy for our records and we will begin the services. Page 4 of 4 Thank you again for this opportunity to be of assistance. We look forward to helping you achieve your goals for Walnut Street and Downtown Monticello. Sincerely, Approved By: CUNINGHAM GROUP ARCHITECTURE, INC. [Replace With CLIENT COMPANY NAME] [Replace With Signer's Name] [Replace With Client Name] [Replace With Signer's Title, include lic. # in CA] [Replace With Client Title] Date: Date: [Replace With Upper Case Preparer's Initials]/[Replace With Reviewer's Upper Case initials] :[Replace With Typist's Lower Case initials] Attachments: Exhibit A – Cuningham Group Hourly Rates Exhibit B – AIA Document B101, Standard Form of Agreement Between Owner and Architect, 2007 edition List all attached exhibits Attach Cuningham Group Hourly Rates on FishNet marked as “Exhibit ‘A’” For Exhibit “B” if B102, “Without Predefined Scope of Services” or B151, “Abbreviated Standard Form” are used as an alternate to B101, update the text for Exhibit “B” NOTE: Exhibits are to be identified by letters that are sequential in order of their reference in the text, e.g. “A” followed by “B” followed by “C,” etc. [double-click to remove this tip] engineering planning environmental construction 701 Xenia Avenue South Suite 300 Minneapolis, MN 55416 Tel: 763-541-4800 Fax: 763-541-1700 Equal Opportunity Employer wsbeng.com November 2, 2017 Jim Thares Economic Development Manager City of Monticello 505 Walnut Avenue, Suite 1 Monticello, MN 56069 Re: Marketing Flyer for the City of Monticello Dear Mr. Thares: Thank you for providing WSB & Associates the opportunity to submit this proposal to provide the marketing pieces for the Monticello Downtown project. As we have discussed, the City would like to create 3 marketing flyers for Block 52, Block 34 and a portion of the block at the corner of Walnut and Third (City owned parking lot). The marketing flyers would include a rendering of the proposed development in accordance with the recently adopted downtown redevelopment plan. The marketing flyers would also include information concerning Monticello’s level of involvement and demographic information concerning the sites. The City would provide the graphics from the plan to allow for their incorporation into the marketing flyer. It is anticipated that the graphic files will be in a format that allows for the information to be transferable for creation of the rendering. Based upon the parameters listed above is anticipated that the cost of the three market fliers would be $3,250. Additionally, if fees for services outside of the above described scope are required they shall be completed at an additional hourly rate. If you are in agreement with the proposed project scope and fee, please sign below and return one copy to our office. If you have any questions or comments regarding the above information, please contact me at (763) 762-2846. Sincerely, WSB & Associates Jim Gromberg Economic Development Coordinator Approval Signature By: ______________________________ Title: _____________________________ Date: ____________________________ 1 PO Box 681 • Monticello, MN 55362 • 763.295.4393 • www.majirs.com Estimate for Downtown Marketing Pieces (Block 52, Block 34 & Walnut and 3rd St.) 763-271-3254 • 11-2-17 • Attn: Jim Thares • Jim.Thares@ci.monticello.mn.us Jim, Thank you for giving MAJIRS! the opportunity to quote your project. My creative service rate is $90/hour. Please note that if the project takes less time than quoted below, we will charge accordingly. Would you be open to discussing some different formats we might use instead of 8.5x11 flyers or 11x17 flyers? Downtown Plan Marketing Pieces – full color, 2-sided Creative Estimate per Flyer 8.5x11, 2 sided, full color: 4-6 hours $360 - $540 11x17, 2 sided, full color: 5-8 hours $450 - $720 Michele Hertwig, MAJIRS! Advertising & Design *Please note: Creative Service prices reflect average design times. Projects may take a shorter or longer time to complete and will be billed accordingly. Shipping and Sales Tax are additional. Please circle Print option and Quantity you would like to order. ___________________________________________________________________________________________________________________________ Client Signature After signing, please fax this form to 763-295-8858 or email to: design@majirs.com Work will begin upon receiving CLIENT’S signed approval of the Policy form and this written estimate 2 ESTIMATE VALID FOR 30 DAYS  TOTAL BUDGET $22,000 INDUSTRIAL Amount Market Matching (separate budget line item)$9,000 Trade show attendance (see list from WSB) Greater MSP Representation State incentive program development and facilitation List purchase: Site selectors, manufacturers, brokers, etc Annual collateral piece update (wrap and sites), base files Direct Mail $4,000 Brokers, site selectors, manufacturers Times Partnership Piece 2018 Digital Update $250 Website Direct URL buildingbusinessinmonticello to City site $100 Build City pages staff Work with partners for links to site staff Business Retention & Expansion Industry of the Year $1,000 Visits staff DOWNTOWN (COMMERCIAL & RESIDENTIAL) Marketing Collateral $2,000 Prep Design of general and site pieces, base files Media Content Articles and press release in MSP journals and magazines staff HOUSING 2018 EDA MARKETING PLAN & BUDGET Program Marketing Materials $1,000 Develop programs then promotional pieces Website staff Developer programs, post to website Developer/Builder Breakfast $1,000 Focus on step-up builder/developers GENERAL Events $7,000 Invitations to larger community events, hosting Broker events Promotional Materials $2,000 Unique and recognizable items with quick-read piece IDEAS: Compass, flash drive, post-its, etc. shove for "shovel-ready" Other Case by case evaluation $3,500 TOTAL $21,850 Total does not include Market Matching as it is separate budget item EDA Agenda: 11/08/17 1 5. Economic Development Report (JT) A. Small Area Study Implementation Process Update A joint meeting of the City Council, EDA, Parks Commission and Planning Commission will be held on November 16, 2017 from 4:30 p.m. until 7:00 p.m. to discuss and gain understanding as to how each committee-commission will be involved in implementing the Small Area Plan. The public realm improvements are under the authority of the public bodies and it is important to engage the committee-commission members and further their understanding in this process. B. Fred’s (349 West Broadway Street) Staff is still trying to determine the timeline for the possible removal of the building. Discussions have been initiated with Mr. (Steve) Bauer, Hasting, MN, the prospective building remover. When a general timeline for the project is determined, a performance agreement governing each party’s role and responsibilities will be negotiated and presented to the EDA for consideration. C. Greater MSP 2017 Annual Meeting The Greater MSP Annual Meeting will be held on November 13, 2017 in St. Paul. Staff is planning on attending the meeting and will bring relevant information back to the EDA. D. CEDS (Comprehensive Economic Development Strategy) Update An update will be presented at the meeting. E. Otter Creek Business Park Sign Update Staff will provide additional information to the EDA at the regular meeting about the sign. F. Industrial Land Survey and Results The survey results are being reviewed and initial analysis is beginning. A report will be compiled and presented to the EDA at a future meeting. G. Prospects – See attached A spread sheet with the active prospects is attached.