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HRA Minutes 04-03-1991 . . . . I . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, April 3, 1991 - 7:00 PM City Hall MEMBERS PRESENT: Chairperson Al Larson, Ben Smith, Lowell Schrupp, and Everette Ellison. MEMBERS ABSENT: Tom St. Hilaire. STAFF PRESENT: Rich Wolfsteller and Ollie Koropchak. GUEST: Deb Gustafson, Business Development Services, Inc. 1. CALL TO ORDER. Chairperson Al Larson called the HRA meeting to order at 7:05 PM. 2. CONSIDERATION TO APPROVE THE FEBRUARY 6, 1991 HRA MINUTES. Ben smith made a motion to approve the February 6, 1991 HRA minutes, seconded by Lowell Schrupp. Without further discussion the minutes were approved as written. 3. CONSIDERATION OF AGENDA ITEMS 3, 4, 5, AND 6. Agenda Items 3, 4, 5, and 6 were tabled until such time as the completed TIF analysis by Mr. Pelstring can be discussed between Mr. Pelstring, Shingobee, Mr. Weingarden, and Koropchak. Upon receiving the construction cost numbers the TIF analysis indicates no benefit to the lease holder which is a must for use of TIF in this project. Also, Mr. Weingarden (City Attorney) is unclear of the project objectives and has concerns with the city entering into a joint marketing venture. 7 . CONSIDERATION TO ACCEPT THE 1990 YEAR END REPORT. Koropchak presented the HRA members with a summary of the 1990 HRA activities. Mr. Wolfsteller highlighted the written HRA financial report noting the HRA General Fund and the TIF/Debt Service Fund. The general fund shows the tax increment received from each TIF District as revenue and the payments (principal and interest) paid on project loans and the amounts transferred to the debt service fund for bonds issued. The HRA General Fund indicates a surplus of $173,830.87. The TIF/Debt Service Fund shows the transferred debt service amount from the general HRA and interest income as revenue and the debt service payments made for each of the six HRA bond issuances plus the City's K-Mart bond issuance. . . . . I . HRA MINUTES 4-3-91 The question was asked, if the surplus funds can be used to payoff the bond debt service therebye allowing the increment to be placed back on the general tax roll? The response was no, as a district is established for a designated time in accordance with the TIF Budget, the bonds are sold to the general public based on that designated time therebye securing the public's investment and if the debt were paid off the County Auditor has the right to terminate the district. The City has two accounts, the general fund and the Liquor Store, the HRA fund being a part of the general fund which allows the City a greater return on their investments. Lowell Schrupp made a motion to accept the 1990 HRA Financial Report, seconded by Ben Smith, the report was accepted and filed. 8. CONSIDERATION OF PROSPECT UPDATE: a) Arop1ax see agenda item 11. b) 1.2 million sq ft distribution center Koropchak reported that Monticello was cut from the final list of three Minnesota communities for the potential site location of this large distribution center. The main reason given by the company representatives for the Monticello cut was the site abutted an existing trailer park and the close proximity of the proposed land uses (R-1 and R-3) to the east and west. c) Towle Real Estate - This company represents a client (Maid of Scandinvia) which is looking for a 45,000 to 65,000 sq ft existing facility for sale or approximately eight acres of free land. The company's current location at Hwy 100 and Hwy 7 is for sale. This mail order catalog and office facility would employ approximately 100 personnel. Along with marketing information sent, acquisition of land through the use of TIF was marketed, however, the company has a negative attitude toward the use of TIF. A meeting was suggested to discuss the use of TIF and the possible myths associated with its use. 9. CONSIDERATION TO RECEIVE THE 1990 ECONOMIC DEVELOPMENT REPORT AND 1991 ECONOMIC DEVELOPMENT WORK PLAN. The HRA members acknowledged their receiving the written report and work plan. 10. OTHER BUSINESS. None. . . . . I . HRA MINUTES 4-3-91 11. CONSIDERATION TO APPROVE THE USE OF TIF FOR THE AROPLAX CORPORATION PROJECT. The HRA reviewed the agenda supporting data which included criteria of the company's project, estimated market value, and a proposed TIF budget. Thereafter, the HRA proceeded to review the requirements for establishing a TIF Economic District. The project was determined to have met the three requirements: 1) the company has considered a site in Wisconsin, 2) the project will increase jobs in the state, and 3) the project will increase the state tax base. Secondly, the Aroplax office space was determined to be of direct relationship to the manufacturing business therefore the revenues derived from the increment met the required purpose use for an Economic Development District. And thirdly, the HRA determined the Aroplax project satisfied the local TIF guidelines. Everette Ellison made a motion approving the use of TIF for the Aroplax project, seconded by Ben Smith, and without further discussion the motion passed. Deb Gusfafson reported that BDS has not received a copy of the purchase agreement between the developer and Oakwood Partnership nor written construction costs which are necessary to complete the SBA application. Ms. Gustafson hopes the application can be submitted to the SBA board on May 8th. With the planned SBA schedule, Schedule III of the TIF Process, as outlined in the agenda will be targeted. Deb and Koropchak having visited Aroplax's current facility on Chestnut Avenue reported the low ceilings and two-level facility reduces the company's production efficiency. Some accounts now held by the company are Good Year, Medtronics, Wanger, etc. 12. CONSIDERATION TO SET A POLICY TO RECAPTURE THE HACA PENALTY FOR AROPLAX TIF DISTRICT WITH RECOMMENDATION TO THE CITY COUNCIL. Koropchak informed the HRA that the reference and background information for this agenda item is referenced under Agenda Item 5. Since the TIF Plan for this project will not be reviewed and approved until the May meeting, the HRA requested this item be tabled. . HRA MINUTES 4-3~91 13. ADJOURNMENT. . The HRA meeting adjourned at 8:10 PM. ~ \<(J\O~~~ Ollie Koropchak, HRA Executive Secretary . - I . , .