HRA Minutes 09-07-1994
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, September 7, 1994 - 7:00 p.m.
City Hall
MEMBERS PRESENT:
Chairperson Al Larson, Vice Chairperson Ben
Smith, Tom St. Hilaire, and Brad Barger.
MEMBERS ABSENT:
Everette Ellison.
STAFF PRESENT:
Rick Wolfsteller, Jeff O'Neill, and Ollie
Koropchak.
GUESTS PRESENT:
Rick Murray and Bob Murray, Residential
Development, Inc.
James Casserly, Developer's Attorney.
Richard Sathre, Developer's Engineer.
Steve Bubul, HRA Attorney.
Lenny Kirscht, Public Resource Group, Inc.
1. CALL TO ORDER.
Chairperson Larson called the HRA meeting to order at 7:00
p.m.
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CONSIDERATION TO APPROVE THE AUGUST 3, 1994 HRA MINUTES.
Ben Smith made a motion to approve the August 3, 1994 HRA
minutes. Brad Barger seconded the motion and with no
corrections or additions, the minutes were approved as
written.
3. CONSIDERATION OF CONTINUED DISCUSSION OF 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.
At the August meeting I the HRA requested the developers
compile grading costs to demonstrate and quantify the need for
TIF assistance.
Mr. Rick Murray updated the HRA members regarding new
developments within the project area. Upon further survey of
the mined-gravel pit and as indicated per the meeting
handouts, it became apparent of the need for an additional
200,000 c.y. of grading. Option L the cadillac, had an
estimated grading cost of $391,000 which appeared out-of-the-
question for the developers.
Option II, had an estimated grading cost of $132,750 which
included a 2-acre soccer field and 4.5-acre trail/slide hill
park at a 3:1 slope (acceptable to MOOT for lawn mowers).
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Option II reduced the impact onto County Road 75 with the
elimination of a through street from County Road 39. However,
Option II decreased the value of some lots and reduced the
immediate development of 25 homes due to the lots landlocked
by the Norrell property. Estimated project size now is 118
single and twin homes. Jeff O'Neill reported the Planning
Commission approved the Option II preliminary plat subject to
OSM approval.
An Edina Market Study projected estimated market values for
single-homes at $95,000 and twin-homes at $85,000 wi th a
three-level market of step-entry, entry, and beyond.
Additionally, Mr. Murray informed HRA members that the
developers have negotiated a reclamation fee of $30,000 with
the existing property owners. This negotiated amount to
address the County's Conditional Use Permit and Reclamation
Plan for restoration of the mined-gravel pit to a 3:1 slope.
Therefore, with the estimated mined-gravel pi t damage of
$132,000 less the $30,000, the total grading cost for Option
II is $102,000.
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Mr. Murray expressed the developers would be very happy to
develop only the city portion; however, with the disappearance
of the city soils suitable for restoration of the township
mined-gravel pit a future project on its own merit may be more
costly due to necessary dirt trucked-in. Attorney Casserly
added that an alternative for the City was to press charges
against the party for non-compliance of the plan and expired
permit.
The developers request is for pay-as-you-go TIF assistance.
According to Lenny Kirscht, Public Resource Group, the risk to
the HRA and City is the quality issue of the proposed homes
and the HACA Penalty loss. In a Soils Condition District the
HAC A Penalty is based on 100%, while in a Economic District
the penalty is phased-in. Of the projected cumulative HACA
Penalty of $141,000 through Year 2000, the city would not
recover the total loss.
Attorney Casserly highlighted the projected HACA Penalty based
on tax increment (TI) generated from the completion of 83
single-homes, 48 twin-homes, and 2 commerical developments at
a maximum of three years. Potential cumulative HACA loss is
$141,000 of which Mr. Casserly indicates the city can recover
25% of TI (Program and Administration Allowance) or $100,000.
The HACA loss of $41,000 is a loss to the City not the HRA.
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HRA Attorney Bubul states the State penalizes a City in order
to recover its loss due to its increased school aid
expenditure. Due to Legislative changes, a City is allowed to
expend 25% of the TI outside the district for public expenses
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HRA MINUTES
SEPTEMBER 7, 1994
on an Economic District. This is not true for a Soils
Condition District which states 100% of the TI ($400,000) must
be used for soil deficiencies within the district. However,
the City can recover 10% for administrative cost. Based on
Mr. Casserly's projections, the city can recover $40,000 of
the $141,000 HAC A Penalty. The HACA loss to the city is
$101,000. The TIF reimbursement could be based on value of
housing, phased development, certification of completion of
soi 1 correct ions and payment, etc. The maximum 1 i fe of a
Soils Condition District is twelve years; however, it is
anticipated this district will be decertified prior to the
twelve years.
With consideration of the land values and the market system,
Jeff O'Neill viewed the project as an opportunity for the
City, dollar amount of request is not excessive, and grading
costs per lot is a small percentage higher than other
developments. Rick Wolfsteller noted the grading costs per
lot within Oak Ridge is $3,125 (wetlands) and Cardinal Hill
Phase IV is $2,400. Wetlands do not qualify for a Soils
Condition District.
In order to delete the public safety hazard associated with
the mined-gravel pit, Tom St. Hilaire made a motion to approve
the preliminary concept for use of TIF as a Soils Condition
District. Pay-as-you-go assistance not~to-exceed $102,000 as
outlined in Option II. Brad Barger seconded the motion and
with no further discussion, the motion passed 3-1. Yeas~ Tom
St. Hilaire, Brad Barger, and Ben Smith. Nay: Al Larson. Mr.
Larson was supportive of the development; however, he voted
against the use of TIF as he fel t the reclamation costs
associated with the mined-gravel pit were the responsibility
of the party who riped the benefits from the mined-gravel pit.
Mr. Casserly mentioned the $132,000 grading costs were only
preliminary projections. Chairperson Larson thanked all
persons for their attendance.
4. CONSIDERATION OF PROJECT UPDATES:
a)
Senior~Congregate Housing Committee - Chairperson Larson
reported the Monticello Senior Housing Alliance selected
the team of BRW Elness Architects, Inc. and Presbyterian
Homes of Minnesota by an unanimous vote. The alliance
toured two projects completed by the each of the three
developers under consideration prior to their selection.
Custom Canopy, Inc. - No comment on the enclosed letter.
b)
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HRA MINUTES
SEPTEMBER 7, 1994
5. OTHER BUSINESS.
a) The HRA accepted the monthly billings from PRG and Holmes
& Graven as presented.
b) Chairperson Larson requested Koropchak take Kevin Boynton
to lunch to express the City's willingness to work with
First National Bank, as well, as Marquette Bank on any
industrial financial proposals.
6. ADJOURNMENT.
The HRA meeting adjourned at 8:30 p.m.
~i~Ch~H~~~ctor
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