HRA Minutes 08-03-1994
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, August 3, 1994 - 7:00 p.m.
City Hall
MEMBERS PRESENT:
Chairperson Al Larson, Vice Chairperson Ben
Smith, Everette Ellison, Tom St. Hilaire, and
Brad Barger.
STAFF PRESENT:
Rick Wolfsteller, Jeff O'Neill, and Ollie
Koropchak.
GUESTS:
Developers Rick Murray and Bob Murray and
Attorney Jim Casserly.
1. CALL TO ORDER.
Chairperson Larson called the HRA meeting to order at 7:00
p.m.
2. CONSIDERATION TO APPROVE THE JULY 6, 1994 HRA MINUTES.
Ben Smi th made a mot ion to approve the July 6, 1994 HRA
minutes as written. Brad Barger second the motion and with no
additions or corrections, the motion passed unanimously.
3.
PUBLIC HEARING FOR AND CONSIDERATION TO ADOPT A RESOLUTION FOR
THE ACQUISITION AND DISPOSITION OF RAW LANDS RELATING TO TIF
DISTRICT NO. 1-17.
Chairperson Larson opened the public hearing for comments or
opposition to the HRA1s acquiring and disposing of raw lands
relating to TIF District No. 1-17 (Fay-Mar Metal Fabricators,
Inc. )
The public hearing notice appeared in the local newspaper
satisfying Statutory requirements. The project is proceeding
on schedule. The HRA will acquire the property from
Monticello Industrial, Inc. through an assignment of interest
to the purchase agreement and will dispose of the property via
a quit claim deed to Ronald S. Musich. The land title will be
conveyed upon compliance and execution of the Private
Redevelopment Contract, TIF Plan approval, and SBA
authorization/Bank closing.
With no public comments or opposition, the public hearing was
closed. Tom St. Hilaire made a motion to adopt the resolution
authorizing the acquisi tion and disposi tion of raw lands
relating to TIF District No. 1-17. Brad Barger second the
motion and wi th no further discussion, the motion passed
unanimously.
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4. CONSIDERATION TO ACCEPT THE PRIVATE REDEVELOPMENT CONTRACT
BETWEEN THE HRA AND RONALD S. MUSICH AS PREPARED BY HOLMES &
GRAVEN AND TO AUTHORIZE EXECUTION OF SAID DOCUMENT.
Koropchak informed the HRA that the Private Redevelopment
Contract between the HRA and Ronald S. Musich had the
traditional terms and conditions of other approved contracts.
The land write-down assistance of $50,000 will be paid upon
conveyence of ti tle. Construction to begin no later than
October 20 with minimum improvements completed by December 31,
1994. One major difference to the contract is site
improvements are to be completed one-year from date of
building permit issuance. County Assessor Doug Gruber has
executed the Assessment Agreement which agrees to a minimum
estimated market value of $400,000.
Brad Barger made a motion to accept the Private Redevelopment
Contract between the HRA and Ronald S. Munich as prepared by
Holmes & Graven and authorized HRA execution of the said
document. Everette Ellison second the motion and with no
further discussion, the motion passed unanimously.
5.
CONSIDERATION TO DISCUSS THE PRELIMINARY CONCEPT AND USE OF
TIF (SOILS CONDITION DISTRICT) TO ASSIST WITH THE SOIL
CORRECTION EXPENDITURES ASSOCIATED WITH THE DEVELOPMENT OF A
PROPOSED RESIDENTIAL PROJECT.
Koropchak informed members that the HRA was being asked to
consider the use of Tax Increment Financing to assist with
soil corrections (Soils Condi tion District) necessary for
development of residential property. The HRA is not being
asked to make any formal approvals but only to indicate a
willingness to proceed with interest.
Developers Rick Murray and Bob Murray of Residential
Development, Inc. Chanhassen, MN, are requesting the
consideration of a pay-as-you-go TIF assistance. The
developers have a purchase agreement on the 74.7-acre
Krautbauer property. The current plan shows a completed~
phased project of 87 single-homes, 47 twin-homes, 2 commercial
facilities, 7-acre park, and ponds. Projected base value of
single-home is $95,000 and twin-home is $80,000.
Initially and prior to the HRA meeting, preliminary studies of
the 20-year topographic maps indicated the need for TIF
assistance in the neighborhood of $175,000 for correction of
the mined gravel-pit. The mined gravel-pit is located within
the approximate 35-acre township parcel. Of the total 74.7-
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HRA MINUTES
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acre parcel, approximately 39.7 acres are located within the
city limits and 35 acres are located in the township. The
township parcel would constitute the need for annexation and
modification of the Central Monticello Redevelopment Project
boundaries.
The first issue is to determine the extent of the soil
deficiencies, area requiring remedial action, and physical
preparation costs, in order to meet the Statutory definition
of a Soils Condition District. It is upon the recommendation
of HRA Attorney Steve Bubul that the developer provide the HRA
with soil condition findings as determined by engineer and
survey expertise in order to determine Statutory compliance.
Jim Casserly, attorney for the developers, presented a
Geotechnical Evaluation Report prepared by Braun Intertec
Corporation. He summarized the report stating, "In addition
to necessary gravel-pit remedial action, the report indicates
evidence of soil deficiencies within the entire 74.7 parcel."
Based on the preliminary information received by Attorney
Bubul prior to the HRA meeting, he foresees the informational
findings sufficient for the establishment of the Soils
Condition District.
With the findings of the Geotechnical Evalution Report,
project costs have already escalated. After receipt of the
findings of the updated survey and the County Road 75 Access
Study, the developers may consider other options. Options
being to develop the entire area wi th TIF assistance, to
develop only the area which makes feasible sense without use
of TIF, or to not develop at this time. Valuation of twin-
homes now range between $80,000 to $120,000 and the base value
of a single-home along the bluff is approximately $99,000.
The preliminary grading cost of $250,000 was determined using
a figure of $1.00 per yard.
Jeff O'Neill reported on the Planning Commission preliminary
sub-division approval based on the design plan only and
contingent upon: 1) Favorable report of the County Road 75
Access Study as initiated and paid for by the developers, 2)
Grading and drainage plans to accommodate a feasible
development, 3) Reduction of roadway from 36 ft to 32 ft with
the construction of sidewalks, 4) Development of a seven-acre
park development, 5-acres flat and 2-acres sloped, 5)
Preservation of trees, and 6) Development of three ponds.
Chairperson Larson felt the property had a lesser land value
and suggested re-negotiating with the landowner because the
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HRA MINUTES
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landowner had reaped the revenues from the mined gravel-pit.
Attorney Casserly understood a public entity must be concerned
not to enrich a landownerj however, felt the real question was
"Should the public invest to encourage an end-product?"
HRA members agreed that the development cost were high and
felt the gravel-pit depth was even greater. Tom St. Hilaire
was open-ended without knowledge of numbers. The developers
would like a decision of interest or no interest in TIF
assistance as soon-as-possible.
Jeff O'Neill reported the Planning Commission had not
discussed the development of only one-half the property. He
foresees development of one~half the property as feasible
without the use of TIF or a wait approach until the market
value of land increases to the point the property can develop
later.
Chairperson Larson reiterated that the market should dictate
development in a free-enterprise system. Tom St. Hilaire said
some costs do exist and wondered if this was an opportunity to
remove the gravel-pit.
The HRA reviewed the TIF policy considerations and determined
Items 1, 2, 4, and 5 as yes, Items 3, 7, and 8 as no, and did
not determine the fate of Item 7: The project shall
facilitate the "clean-up" of environmentally unsound property.
Ben Smith made a motion to adopt a resolution in order to
advance the process for development of the property and
pending receipt of further information would the HRA agree to
make a decision. The motion died due to a lack of a second.
Chairperson Larson recommended the item be tabled for two
weeks allowing time for additional information. Tom St.
Hilaire expressed a great interest in the project and the HRA
agreed to Chairperson Larson's recommendation.
Mr. O'Neill asked if the developers would guarantee a certain
value of home.
6. CONSIDERATION TO APPOINT TWO HRA MEMBERS TO THE SENIOR-
CONGREGATE HOUSING COMMITTEE AND A PROJECT UPDATE.
In addi tion to Koropchak agenda background, Chairperson Larson
added the start-up board would be on rotating terms. Tom St.
Hilaire expressed his support of the concept only if the
project was privately owned or a non-profit organization such
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as the Guardian Angels of Elk River. Tom St. Hilaire made a
motion to appoint Al Larson and Brad Barger as HRA
representatives to the Senior-Congregate Housing Committee.
Ben Smith second the motion and with no further discussion,
the motion passed unanimously.
7. CONSIDERATION OF PROJECT UPDATES.
The HRA accepted the written project updates.
8. OTHER BUSINESS.
Again, Tom St. Hilaire reiterated the previous HRA motion: The
HRA authorizes no further payment to Public Resource Group
from the TIF District No. 1-7 or the HRA General Account for
the H-Window Company expansion. HRA members agreed.
9. ADJOURMENT.
The HRA meeting adjourned at 8:30 p.m.
C)~ ~6\~ ~i)~
Ollie Koropchak, HRA Executive Director
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