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HRA Minutes 10-04-1989 . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, October 4, 1989 - 7:00 PM City Hall MEMBERS PRESENT: Chairperson Al Larson, Ben Smith, Everette Ellison, Tom St, Hilaire, and Lowell Schrupp (late). STAFF PRESENT: Jeff O'Neill and Ollie Koropchak GUEST: Pat Pe1string 1. CALL TO ORDER. Chairperson Al Larson called the HRA meeting to order at 7:25 PM. 2. APPROVAL OF THE SEPTEMBER 6, 1989 HRA MINUTES. Ben Smith made a motion to approve the September 6, 1989 HRA Minutes, seconded by Everette Ellison, the minutes stand approved as written. Vote 4-0. 3. CONSIDERATION TO HEAR AN UPDATE OF THE GILLE PROPERTY. . Jeff O'Neill reported to the HRA members that upon city attorney advise and HRA support, continued enforcement of the City Ordinance (illegal use of an existing non- conforming use) has been applied within reason. At this time no report has been received from the PCA or EPA regarding the time frame for development of a PCA plan for abandon tank removal. The HRA suggested the city staff consider the possibility of consulting an outside attorney who specializes in areas of environmental issues in business operations and commercial transactions. This with Mr. Tom Hayes acknowledgement. 4. CONSIDERATION TO REVIEW THE AGREEMENT BETWEEN THE HRA AND BDS, INC. . Mr. Pat Pelstring acknowledged that the original contract between the HRA and BDS, Inc. provided marketing services at no cost to the HRA. The initial contact and the pre- paration of proposals will not be charged as originally, however, once the prospect visits the community BDS will request payment for efforts in structuring and completing the financing. The HRA would retain BDS on an hourly basis at $75 per hour. or on a negotiated fixed-fee basis for prospect presentations and financial packaging. The City/HRA could bill the services back to the benefitting company. See Page 2 Section I-B. in the agreement. The HRA may want to provide a letter to proceed to BDS, Inc. HRA Minutes - 10/4/89 Page 2 . 4. CONTINUED. Ben Smith noted that of page 4 Section 3 of the agreement should include on a timely basis. Tom St. Hilaire made a motion to approve the Agreement between the Monticello Housing and Redevelopment Authority and Business Development Services, Inc. with the noted above correction. Everette Ellison seconded the motion and passed unanimously. The HRA approved payment of services to BDS. 5. CONSIDERATION TO REVIEW DAVID FICEK'S HOUSING REDEVELOPMENT PROJECT AND SURVEY RESULTS. Mr. Pe1string advised the HRA that Mr. Ficek has been ill for the last several days therefore a new proposal has not been prepared for the HRA's review. Mr. Pe1string also informed the HRA that Mr. Ficek has not received his financing for the Princeton project. CONSIDERATION TO HEAR TIF CONCEPTS AND PRELIMINARY APPROVAL FOR THE USE OF TIF: 6. . Manteq International, Inc. - A research and developemnt firm from Midland, Michigan proposing a 30,000 sq ft building with approximately 50 employees. TIF use would reduce the lease rate by $1.00 per square annually. The use of TIF is built into the proposed finance package as prepared by BDS. Tapper, Inc. - A wood cabinet manufacturer with a proposed approximate 30,000 sq ft building and potential of 50 employees. TIF use for write down of land cost and other determined improvement costs. The use of TIF is built into the proposed finance package as prepared by BDS. Remmele Engineering - a supplier of high quality, technolog- ically advanced services proposing a minimum of a 25,000- 30,000 sq ft building with an approximate 50 employees. TIF use for write down of land cost and other determined improvement costs. The use of TIF is built into the proposed finance package as prepared by BDS. Cardinal IG - specializes in a patented insulating glass process and supplies 65% of their product to Andersen Corporation. Proposed 135,000 sq ft facility with an approximate 150 employees. TIF use would reduce the lease rate by 70 cents per square foot. The HRA concensus was for preliminary approval of TIF concept use for the four industrial companies. . 7. CONSIDERATION TO REVIEW CITY COUNCIL TIF DISTRICT FOR SEVENTH STREET ALIGNMENT AND EXPANSION. The HRA members were concerned by either the accuracy . HRA Minutes - 10/4/89 Page 3 7. CONTINUED. of newspaper reporting or the accuracy of conveying HRA recommendations to the City Councilor newspaper. The HRA members recalled leaving the meeting with a good feeling because their recommendation was to have the developer purchase the Pratt and Holthaus properties and put in the straight line street improvements. The end result to the taxpayer was subsidized in the area of $70,000 to $100,000. The cost for demolition, relocation, and assessing process were not clearly defined to the HRA. The paper reported the HRA approval of an approximate $235,000 TIF use for the project. Mr. O'Neill expressed that he may have overstepped his administrative powers for the City in his recommendation to the City Council on September 11, 1989. The HRA recommendation of September 6 only included the use of TIF for the purchase of the Kraemer property. . A special HRA meeting was held September 14 to receive HRA approval of the City Council's proposed TIF plan and to authorize the development of the finance plan. The Sept. 11th City Council's motion was TIF assistance of $238,250, City $42,885 and The Lincoln Companies #134,000 cQnbingent upon the approval of the HRA, if no HRA approval the road alignment would revert back to the curved road alignment. The City Council TIF proposal was the results of a negotiated proposed plan between BDS and the city staff. The HRA saw very little public benefit and made a motion relinquishing the determination for the use of TIF to the City Council with the recommendation that the benefitting parties acquire the land and be assessed for Seventh Street improvements of which the HRA recommended the straight alignment to Minnesota Street, and the HRA recommended that the Kraemer property not be acquired at this time as the Seventh Street improvement demands to the west of Minnesota Street will be determined by the property development and market. In summary the HRA recommended no use of TIF for the project. Mr. Chuck DuFresne of the Lincoln Companies was present but did not present Lincoln Companies proposed use of TIF. . City Council approved the use of TIF and authorized a TIF plan be drafted for presentation to the School District and County Commissioners for a total project cost of $588,300: TIF $298,563, City $53,741, and Lincoln Companies $191,025. The September 25 approval include purchase of the Kraemer, Holthaus, and Pratt property; related demolition costs; and a portion of the Seventh Street improvements . HRA Minutes - 10/4/89 Page 4 7. CONTINUED. for TIF use. The Lincoln Companies cost included purchase of a portion of the Holthaus property, on site ponding cost, and San/St sewer costs. The City portion included the resale of the Kraemer property less Hornig's assessment. A couple of HRA members expressed their thoughts of possible resignation from the HRA because of the inaccurate newspaper reports and _ staff recommendations. They were concerned that city staff really wanted this project to go. The HRA has always supported a K-Mart coming to Monticello, however, did not see the use of TIF to support a private developer, The Lincoln Companies. The approved TIF use was the best alternative as negotiated between the Lincoln Companies. city staff and council. 8. OTHER BUSINESS. None. 9. ADJOURNMENT. . Everette Ellison made a motion to adjourn the HRA meeting, seconded by Ben Smith. the meeting adjourned at 8:30 PM. ~ ~ltf.l ~~~~ Ollie Koropchak HRA Executive Secretary .