HRA Minutes 06-12-1991
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, June 12, 1991 - 7:00 PM
City Hall
MEMBERS PRESENT:
Chairperson Al Larson, Ben Smith, Everette
Ellison, and Tom St. Hilaire.
MEMBERS ABSENT:
Lowell Schrupp
STAFF PRESENT:
Ollie Koropchak
GUESTS:
Brad Larson, West Prairie Partnership
Pat pelstring, BDS, Inc.
1. Call to Order.
Chairperson Al Larson called the HRA meeting to order at 7:10
PM.
2.
Consideration to Approve the May 1, 1991 HRA Minutes.
Tom St. Hilaire made a motion to approve the May 1, 1991 HRA
minutes, seconded by Everette Ellison, and with no comments or
corrections the minutes stand approved as written.
3.
Consideration to Hear Potential Redevelopment Area Option
Inclusive of the West Praire Partnership and Gille property.
Mr. Brad Larson with the West Prairie Partnership appeared at
the HRA meeting upon the request from City Council for HRA
input on the potential swap of properties. The Council being
aware of the HRA' s interest to clean-up the area (Gille
property) in close proximity to the 2.5 acres owned by the
Partnership and in consideration of the potential land swap,
wanted to know if the 2.5 acres would serve as a beginning
piece of the puzzle for any future HRA redevelopment plans.
Mr. Larson explained that the partnership has acquired
interest in the Marvin George property (Outlot A, other parcel
in potential land swap) which is in tax foreclosure.
Assessments and taxes against the property are between
$500,000 to $600,000 including delinquent penalties, interest,
etc. In 1978, the construction cost for the public
improvements was $280,000. Originally, the partnership
presented the city with a plan for residential development on
the 16.7 acres; however, the city declined the plan as the
property is zoned R-3 (Medium Density Residential), the plan
called for a non-permitted amount of driveways onto a
collector road (Country Club Road), and the city needed an
area for ponding.
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HRA Minutes
6-12-91
Thereafter, the partnership offered the city the partnership's
currently owned 2.5 acres along West County Road 75 and the
east 6.7 acres of Outlot A for ponding in even exchange for
the west 10 acres of Outlot A for future multi-residential
development and the right to maintain rental collection from
the freeway sign(s). HRA members inquired of the
partnership's interest to acquire Outlot A for $250,000 or
$300,000 and dedicate to the city the 6.7 acres for ponding,
and the partnership retain their 2.5 acres along Cty Rd 75.
Mr. Larson responded the partnership wouldn't be interested
because there is no market for multi-residential development
in Monticello presently and potentially not for another five
years. Mr. Larson responded the partnership wouldn't be
interested in a $200,000 acquisition cost as they are not
interested in a cash deal and the city may not be interested
either as no appraisal has been completed.
Mr. Pe1string reminded the HRA members that the real question
here is the value of the 2.5 acres to the HRA for any
potential redevelopment of the area with its close proximity
to the Gille property. Koropchak questioned whether the
inclusion of the 2.5 acres in addition to the Gille property
would then qualify for a Redevelopment TIF District. The HRA
remained firm in that they consider the Gille property as a
liability and they expect the property to revert back to the
city in the near future.
Tom St. Hilaire made a recommendation to the City Council
that the city obtain an appraisal on Outlot A to establish the
land value and the HRA agreed with the City Council's lack of
interest or desire of an even land swap between the
partnership and the city. Mr. St. Hilaire's recommendation
was a consensus of the HRA members.
Consideration to adopt a resolution for modification of the
Redevelopment Plan re1atinq to Redevelopment proiect No.1,
the modification of TIF Plans relatinq to TIF District Nos. I-
I throuqh 1-12, and the approval and adoption of the TIF Plan
re1atinq to TIF District No. 1-13, all located within
Redevelopment proiect No.1.
Koropchak reported that the executed Letter of Intent as
drafted by the City Attorney and a commitment fee of $5,000
have been received from Shingobee, Inc., and the preliminary
building and site plans have been reviewed and adopted by the
City Building Inspector and OSM. A copy of the land
commitment between the developer and the Oakwood Partnership
is yet to be received. The HRA inquired of the risk to the
HRA or the city, actual risk to the city is virturally none as
the commitment fee of $5,000 should cover the cost for BDS,
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6-12-91
Inc. (agreed to one-half their normal $3,600 fee) for
preparation of the TIF Plan and District, and other costs will
include the preparation of the Development Agreement and
publication of public hearing notices. If the project is not
successful (no qualified leasee is found within one year) the
developer's commitment fee will cover the preparation costs
and if the project is successful the commitment fee will be
returned to the developer and the preparation fees are then
covered within the TIF Budget.
Pat Pelstring reminded t~ HRA that the major renegotiation
issue of no leasehold improvement costs to a leasee were
resolved and the leasehold improvement costs are now
incorporated wi thin the TIF Budget as project costs. The
financial method is pay-as-you-go, therefore, the city will
not bond for the project. The maximum rental reduction cost
is $.90 per square foot with a suggested allowance of $.15 per
square foot for the TIF or HAC A Penalty, this leaves an actual
rental reduction to the 1easee of $.75 per square foot which
should be incorporated into the Development Agreement.
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Torn St. Hilaire made a motion to adopt the resolution for
modification of the Redevelopment Plan relating to
Redevelopment Project No.1, the modification of TIF Plans
relating to TIF District Nos. 1-1 through 1-12, the approval
and adoption of the TIF Plan relating to TIF District No. 1-
13, all located within Redevlopment Project No. I, and
requesting the City Council call for a public hearing date of
July 22, 1991. The motion was seconded by Ben smith and
without further discussion the motion passed unanimously.
5.
Consideration to set a policy to recapture the HACA Penalty
Payment for Shinqobee, Inc. District with recommendation to
the City Council.
Based on Mr. Pelstring recommendation, Everette Ellison made
a motion to incorporate into the Development Agreement between
the HRA and shingobee, Inc. that the HAC A Penalty be the
responsibility of the developer which is allowable and
accountable within the maximum $.90 per square foot assistance
of TIF Plan and Budget. Tom St. Hiliaire seconded the motion
and without further dicussion the motion passed unanimously.
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Consideration to review an Updated Report on the TIF Reserve
Funds as prepared by BDS, Inc.
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Pat Pelstring informed the HRA that he recently received the
information from Wright County necessary to prepare the
detailed report on TIF reserves. The report will be submitted
for the July meeting.
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6-12-91
7. Consideration of an updated report on Aroplax and Maid of
Scandinavia.
Koropchak reported that the City Council approved the TIF Plan
and District No. 1-12 for Arop1ax and she anticipates EDA
review and approval for the GMEF this month.
President Dahlquist of Maid of Scandinavia was definitely
interested in a Performance Purchase Agreement for acquisition
of the HRA-owned industrial lot. He has received the
topography maps and contact information on the Ron and Lee
Johnson property. Koropchak is to contact him after the 4th
of July.
8. Other Business.
None.
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Adiournment.
The HRA meeting adjourned at 8: 10 PM by censensus of its
members.
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Ollie Koropchak, HRA Executive Secretary
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