HRA Minutes 04-06-1994
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, April 6, 1994 - 7:00 p.m.
City Hall
MEMBERS PHESENT:
Chairperson Al Larson, Vice~ Chairperson Ben
Smith, Everette Ellison, Tom St. Hilaire, and
Brad Barger.
STAFF PRESENT:
Rick Wolfsteller and Ollie Koropchak.
STAFF ABSENT:
Jeff O'Neill.
GUESTS:
Pat Pelstring and Lenny Kirscht,
Resource Group, Inc.
Steve Bubul, Holmes & Graven.
Pllblic
1. CALL TO ORDER.
Chairperson Larson called the HRA meeting to order at 7:05
p.m.
2. CONSIDERATION TO APPROVE THE MARCH 2, 1994 HRA MINUTES.
Ben Smi th made a motion to approve the March
minutes. Brad Barger seconded the motion
corrections or additions, the minutes were
written.
2, 1994 HRA
and wi th no
approved as
3. CONSIDERATION TO REVIEW THE CONTRACT BETWEEN THE HRA AND
PUBLIC RESOURCE GROUP, INC.
Mr. pelstring distributed a summary of 1993-94 hourly billings
to HRA members which were within proximity of the HRA totals.
Upon clarifying questions regarding billable and non-billable
consul tant and marketing fees, coordination roles, etc., it
was suggested that the contract between the parties be
updated and for Mr. Pelstring and Koropchak to determine a
date to define administrative roles. Chairperson Larson
expressed an interest to be present. Tom St. Hiliare made a
motion authorizing the payment of the January, February, and
March PRG billings. Everette Ellison seconded the motion and
without further discussion the motion passed unanimously.
4. CONSIDERATION TO HEAR AND DISCUSS THE POWERS OF AN HRA AND
LEGAL CHANGES IN TAX INCREMENT FINANCING.
Koropchak informed HRA members that with several unresolved
development issues within the City of Monticello, Chairperson
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Larson and herself invited HRA Attorney Bubul to this meeting
to discuss the powers of an HRA and legal changes in TIF.
This meant as aD informative agenda item.
First, Attorney Bubul informed members that HRA's have a
maximun levy power of .0131% of the city's estimated market
value. It is not part of the truth-in-taxation process and
the City Council has the power to veto any HRA request. Levy
dollars generated can be expended on projects much the same as
TIF doLlars for public purpose involving blight, housing,
infrastructure, land acquisi tion, administration, etc. ;
however, do not need to satisfy the "but for" test. Examples
of who uses the levy power are Counties, and the Cities of
Brooklyn Park, Red Wing, and St. Cloud. The levy power is
used more in the metro for housing project and is the
collateral for bonds or as development assistance. An BRA
must certify a budget prior to August 1. A levy gives an HRA
the means to acquire real estate; however, is an additional
tax levy.
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Secondly, Mr. Bubul informed members that in the mid 90's the
State added the TIF Penalty which is the school aid
difference. Although property tax is increased, the school
aid is reduced. To compensate, the State takes away
approximately 30% of a City's LGA or HACA. Prior to August 1,
1993, a City's General Fund recovered its 30% loss through the
Private Redevelopment Contract either by a public improvement
loan to the developer or a:3 a payback on a pay-as~you'-go
assistance.
After July 31, 1993, a City's ability to recapture the penalty
loss became more restricted. An HRA can utilize 10% of
district's increment for administrative cost which can be
utilized by the City to recover a portion of the its 30% loss.
Or 25% of a TIF District's increment can be used outside the
district and within the Redevelopment Project area. The 25%
maximum increment must be a TIF-eligible activity, payments
deposited in the TIF District account and not deposited in the
City's general fund. This must be certified upon approval of
a TIF Plan.
Thirdly, Mr. Bubul outlined several TIF amendments being
considered by 94 Legislators. Most are considered positive
amendments by attorneys, one being the consideration to
eliminate the TIF Penalty on Economic District.
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HRA MINUTES
APRIL 6, 1994
It was suggested that Mr. Bubul talk wi th Public Resource
Group, Inc. to encourage communication and coordination
efforts between the financial consul tant and the attorney
regarding of the estimated TIF Penalty calculation and its
relationship to the development of a TIF Plan or Private
Redevelopment Contract.
The HRA thanked Mr. Bubul for his time and shared knowledge.
5.
CONSIDERATION FOR APPROVAL TO AMEND THE CONTRACT BETWEEN THE
HRA AND JAY MORRELL AND TO AMEND THE PURCHASE AGREEMENT
BETWEEN THE HRA AND RON AND DEE JOHNSON.
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As per the request of Mr. Jay Morrell, the HRA agreed to serve
as a catalyst (gopher) at no expense to the HRA in an attempt
to acquire Lot 6, Block 3, alP from Ron and Dee Johnson for
Morrell's M & P Transport expansion. Previous direct attempts
by Mr. Morrell were unsuccessful. At no expense to the BRA,
a purchase agreement was prepared and submitted to the
Johnson, the expired purchase agreement has not been
returned. Although Mr. Morrell has expressed an interest of
a counter~offer, Tom St. Hilaire made a motion denying the
approval to amend the original contract between the HRA amd
Jay Morrell and the original purchase agreement between the
HRA and Ron and Dee Johnson. Ben Smith seconded the motion.
The HRA felt they acted in good faith, made a fair offer,
recognized the unsuccessful attempt of a willing seller/buyer
purchase agreement, and elected not to participate in any
historical property controversy. The motion passed
unanimously.
6.
CONSIDERATION TO APPROVE A PRELIMINARY CONCEPT FOR^THE USE OF
TIF FOR THE GENEREUX FINE WOOD PRODUCTS EXPANSION.
Based on the estimated tax increment to be generated from a
19,000 sq ft building addition, the creation of 15 new jobs,
a 1994 expansion completion date, and to encourage existing
business expansions; Brad Barger made a motion approving the
use of additional TIF District 1~9 revenues for the proposed
Genereux expansion. This being preliminary concept approval
only, no exact dollars were designated for assistance.
Everette Elli:30n seconded the motion and wi th no further
discussion, the motion passed unanimously. If expansion plans
proceed, the HRA will need to modify the Plan/Budget for TIF
District 1--9 and amend the existing Private Redevelopment
Contract.
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BRA MINUTES
APRIL 6, 1994
7. CONSIDERATION OF BRA UPDATES;
a) Custom Canopy, Inc. - It was reported that Mr. Birkeland
Jr. has taken positive steps to comply with the City
Ordinance; however, the TIF assistance is subject to
completion of the screening requirement by July 1, 1994.
b) Outlot A, Country Club Manor - Council has not reviewed
the returned multi-housing development request for
proposals. Upon Council selection of a developer and
prior to land purchase, the BRA will hold a public
hearing on the land acquisition.
c) Standard Iron Certificate of Completion - The company
moved in the end of March and has received a temporary
occupancy permit. The Certificate of Completion must be
approved by December, 1994.
d) Next BRA meeting, May 4, 1994.
8.
OTHER BUSINESS.
By general consensus of its membership, the BRA made a
recommendation for the Planning Commission and City Council to
preserve the 160-acre Klein parcel, directly south of the OIP,
for industrial use. Additionally, they recommended the City's
Comprehensive Guide Plan be reviewed and updated by an
independent/impartial planner and recommended the
authorization of a long-'range land use study focusing on
freeway access and transportation circulation. The
recommendation was made to ensure that the City's land~use
plan supports the City's objectives.
An BRA member referred an industrial lead to Koropchak. A
plastic fabricator and thermo former company with 12-18
employees looking to relocate from a metro Broadway/Central
area. John Dunbar, 379-2018.
9. ADJOURNMENT.
The BRA meeting adjourned at 10:20 p.m.
2~o~:,~~rector
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