HRA Minutes 11-06-1991
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MINUTES
HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, November 6, 1991 - 7:00 PM
City Hall
MEMBERS PRESENT:
Chairperson Al Larson, Ben
Schrupp, Everette Ellison,
Hilaire.
Smith, Lowell
and Tom St.
STAFF PRSENT:
Jeff O'Neill and Ollie Koropchak.
1. CALL TO ORDER.
Chairperson Al Larson called the HRA meeting to order at 7:00
PM.
2. CONSIDERATION TO APPROVE THE AUGUST 21, 1991 HRA MINUTES.
Ben Smith made a motion to approve the August 21, 1991 HRA
minutes. Seconded by Everette Ellison and without any
corrections or additions, the minutes were approved as
written.
3.
CONSIDERATION TO DISCUSS FOR POSSIBLE AUTHORIZATION OF THE
RECOMMENDATIONS MADE BY BDS/INC. ON THE TIF FINANCIAL
ANALYSIS.
Koropchak informed the HRA that the re-ran TIF Analysis
Summary, with the inclusion of the $260,000 bond issuance for
TIF District #2; decertification of TIF District #1 in year
1991; and less the 10% administrative expenses and 5% bond
reserve, projected an excess increment of a little over one
million dollars over the life of the existing eleven
districts.
Based on this analysis which includes the assumptions (less
administrative expense and bond reserve), Mr. Pelstring
recommended the HRA to consider development and implementation
of a policy to transfer 10% of the total TIF project increment
into an HRA revenue fund (Admininstrative Account) for
distribution of expendi tures such as staff time and for
additional marketing dollars. This 10% figure was originally
included within the city's bond issues but no policy exists to
transfer the funds from TIF to the HRA. If these funds are
not expended by the HRA they would be avai lable for debt
service.
Secondly, Mr. Pelstring recommended the HRA consider
development and implementation of a policy to establish a
reserve level (5%) for future potential defaults and/or slow
payments of taxes, thereafter, the remaining excess increment
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HRA MINUTES
11-6-91
would give the HRA some opportunity to fund additional public
improvement projects.
Thirdly, Mr. Pelstring recommended the HRA negotiate a loan
payback with the City for Lots 5 and 6, Oakwood Industrial
Park. Principal amount $136,000 over 10 years at 8% interest
would be an annual debt service of approximately $20,268.
Through the analysis and the implementation of these policies,
the HRA would maintain an accountability of the TIF excess
increments and it would assist the HRA in planning for future
desired projects or goals.
The HRA members fel t the increase of 10% administrative
revenue would only increase the administrative costs with no
increase in productivity. The administrative revenue would
cover staff time and consultants time for marketing Monticello
prior to a Monticello site location commitment. It was the
understanding of the members that the HRA paid for BDS, Inc.
expenses only upon the preparation of the TIF Plan/District or
when staff determined a specific marketing necessity.
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The HRA is pleased with work by BDS, Inc., however, requested
monthly billing statements rather than at random. Koropchak
informed the HRA that the statements are itemized and she will
provide a copy for HRA review.
The HRA tabled any action on this agenda item and requested
Mr. Pelstring be present to provide a clearer understanding of
his recommendations.
4. CONSIDERATION TO DISCUSS FOR POSSIBLE RECOMMENDATION OF THE
CHELSEA LAND USE AND CIRCULATION STUDY/CONCEPTUAL AREA PLAN.
Jeff O'Neill told the HRA that the land use study was the
resul t of concerns raised by Remmele and Tapper I s on the
aesethetic value of the industrial park, the development of
the school campus, the potential limited industrial space, and
talks with property owners and the Planning Commission. The
Chelsea storm sewer system study resulted from city staff's
recommendation for an overall plan prior to further
development of the Farm Credit property.
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The professional planner I s land use map proposed the Farm
Credit Proporty zoned B2, B3, and 1-1 to be Light
Industrial/Business Campus and the northerly 80 acres of Kline
Property to be Multi-Residential with the southerly 80 acres
of the Kline property to be Single Residential. The HRA was
shocked that the planner recommended the northerly 80 acres of
the Kline property for mul ti-residential as they fel t the
school and industrial property were more compatible and they
did not feel people would not want to live next to a school.
Currently, the city has approximately 200 acres of available
industrial land and 400 residential lots for development.
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HRA MINUTES
11-6-91
Based on the current pace of residential development it will
take an estimated 10 years before full development of the
residential lots occur.
Mr. O'Neill stated the Business Campus zone has the same uses
as the 1-1 zone. The ordinance does allow for metal buildings
wi th one-half brick on all wall surfaces. Jeff further
advised the members of the reduction in the original plan for
a big commercial area in the area of Chelsea Road and County
Road 118 which now is proposed as a smaller Neighborhood
Commercial Center.
Tom St. Hilaire made a motion strongly recommending the
norther 1 y 80 acres of the KI ine Property be retained for
industrial use. Seconded by Everette Ellison and wi thout
further discussion the motion passed unanimously. The
recommendation was made to assure that the city maintains an
adequate amount of acreage for future industrial development
with the natural continuation to the south of the industrial
park.
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CONSIDERATION TO ESTABLISH 1992 HRA GOALS.
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Tom St. Hilaire agreed to serve on the HRA for the five year
term, his name will be recommended to the City Council for
appointment by the Mayor and Council in January.
The following 1992 HRA Goals were established:
1. To research the need and feasibility for senior quality
townhome housing. (double garage, no stairs, 1,200 to
1,400 sq ft, $80,000 to $100,000, wi thin ci ty limits
preferably close to commercial).
2. To research and earmark property for future development
of such housing. (Suggestions were old Dino property,
existing Redevelopment District #2, area of Ivan
Anderson1s, or Broadway between Wright and Ramsey).
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To research the probability and to serve as a catalyst
for the City Council to authorize forfeiture procedures
against the Gille Property. (Invite Mayor Maus to the
HRA meeting, research the City1s access of Super Fund
monies for soil testing and soil contamination cleanup,
check on Gille property tax delinquency status, invite
Ci ty Attorney Paul Weingarden to the HRA meeting for
information on forfeiture procedures, and request the
Mayor and Ci ty Council to proceed wi th forfei ture of
Gille property).
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4. To encourage and assist in the development of two
industrial projects of similiar quality to Remmele and
Tapper.
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HRA MINUTES
11-6-91
6. CONSIDERATION OF AN UPDATE ON THE AROPLAX CORPORATION PROJECT.
Koropchak advised the HRA that the City of Brooklyn Park has
presented Mr. Jerry Schoen with a financial proposal.
Although, the exact terms of the proposal are unknown, Mr.
Schoen said the ci ty can finance the project. The Ci ty of
Monticello has certified the TIF District for assistance in
the write down of land and approved a $30,000 GMEF loan at 6.5
percent interest over seven years for machinery and equipment.
The financial package also included an SBA loan and bank
financing.
Koropchak reported she asked the EDA to respond to Mr.
Pelstring's suggestion to ask Aroplax, "What it would take for
a Monticello site location commitment?" It was the feeling of
the EDA that the Aroplax project was one which met the
industrial recruitment objectives of the IDC, the HRA, and the
EDA. Therefore, it was suggested to ask, what it would take
to get the company to Monticello. Koropchak did remind the
EDA that the GMEF policy states the funds are for gap
financing and are not intented as a substitute for commercial
financing. Aroplax had the option of three bank commitments.
Mr. Pelstring met with Mr. Schoen on Tuesday, November 5th
and proposed a financial package with the insertion of the
Minnesota Economic Recovery Grant therebye reducing the debt
service by approximately $15,000. He seemed interested,
however, believes the land values in Brooklyn Park will
maintain or increase its value over a long time. Yet, he also
see the benefits to a Monticello location. He feels he has
made no site location commitment.
The HRA questioned whether he was playing with the City for
additional funds.
7. OTHER BUSINESS.
Koropchak informed the HRA that she had requested Mr. John
Dean of Holmes & Graven to prepare a preliminary agreement
between the HRA and a developer which basically ask the
developer for upfront dollars to cover costs prior to the
execution of a development contact therefore the HRA costs are
covered if for some unknown reason the proposed project did
not develop. The HRA agreed with the concept of the document.
HRA MINUTES
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8. ADJOURNMENT.
Al Larson made a motion to adjourn the HRA meeting, seconded
by Tom St. Hilaire, the meeting adjourned at 9:00 PM.
C5 ~ ~d\ ,,~~
Ollie Koropchak, H A Executlve Dlrector
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