HRA Minutes 05-15-1995
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Monday, May 15, 1995 - 6:30 p,m,
City Hall
MEMBERS PRESENT:
Chairperson Al Larson, Everette Ellison, Tom
St. Hilaire, and Brad Barger.
STAFF PRESENT:
OlLie Koropchak.
HRA CANDIDATE PRESENT:
Roger Carlson.
1. INTERVIEW OF CANDIDATES FOR COMMISSIONER OF THE HRA.
HRA Commissioners received a copy of Roger Carlson and John
Duffy's resumes prior to the meeting. From a list of prepared
questions, HRA members and Councilmembers Clint Herbst and Tom
Perrault conducted an interview with Mr. Carlson. Mr. Duffy
withdrew his name as a candidate stating increased demands of
time and commi tment to his employer, Mr. Carlson is "'-
candidate for the five-term term which was vacated by Ben
Smith. The expiration dato of the five-year term is December,
1995,
Following a brief discussion and the decision not to re--
advertise for the vacated seat, Tom st. Hilaire made a motion
recommending the Ci ty Counci I consider the name of Roger
Carlson for appointment to the HRA Commission. Brad Barger
seconded the motion and with no further discussion, the motion
passed unanimously. The HRA felt Mr. Carlson's resume was
well-written, his responses to interview questions were well
thought-out, and he has some experience wi th governmental
entities. Additionally, he runs a local business and was born
and raised in Monticello. Mr. Carlson's name will appear on
the June 12 agenda of the City Council for appointment.
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"R~90GNITION OF BEN Sf'1ITH L HRA CO~MI.SSION.[13- RESgiNED...:_
HRA Chairperson Larson presented Ben Smith a plaque in
recognition of his 10-years of volunteer service as a
commissioner of the HRA. Mayor Fyle also thanked Bcn for his
dedication and service to the community.
3, MEETING WITH CITY .90UN9IL I PL~NNING COMMISSION r "AND PA~Y~_
C0l1MI2s>ION MEMBERS FOR A REPORT OF THE UPDATED MONTICELLO
COMPREHENSIVE PLAN AND ITS RELATIONSHIP TO THE E;I{P~r-{Q.I'tURE-9K
fPOLED TIF DOLLARS.,
HRA members attended the joint-governmental meeting in the
Council Chambers from 7:00 to 10:00 p.m.
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HRA MINUTES
MA Y 1 5, 1 995
4 . .,gALL ~O ORQ_ER."
Chairperson Larson called the HRA meeting to order at 10:15
p.m.
5 , CONS I DERA T I ON TO APPROl{E THUfJiJJ._q} 1995 _ HJ1~~~J1LUT~~_"
Tom St. Hilaire made a motion to approve the April 5, 1995 HRA
minutes. Chairperson Larson requested a correction to page 6,
paragraph 4 of the minutes, wi th the insert of the word
"excess". (Chairperson Larson felt the excess_pooling dollars
should return to the taxing jurisdictions who approved the
original TIF Districts.) Tom St. Hilaire amended the original
motion to include the requested correction. Brad Barger
seconded the motion and with no further corrections or
additions, the minutes wero approved as amended.
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MODIFICATION TO ENLARGE THE REDEVELOPMENT PROJECT BOUNDARIES.
Koropchak reiterated the information provided in the agenda
supplement for the enlargement of the redevelopment project
boundaries to include the Monticello Business Center and the
East Kjellberg Mobile Court. The request did not come from
the Landowners Emmerich or Kjellberg, The recommendation was
from Attorney Bubul and staff because a combination of
modifications ~s both convenient and cost-effective.
Additionally, with the unknowns of State Legislative changes,
this would secure the opportunity to use TIF in the future for
the Q'Cello Business Campus area.
HRA members inquired as to the cost for the modification to
enlarge the boundaries. Koropchak did not have an actual
cost; however, Koropchak estimated a not-to-exceed figure of
$5,000 for PRG and Holmes & Graven services. The cost would
be less than the fees to create a new TIF district and less
for a combination of modifications then an individual
modification.
HRA membcrs requcsted a cost estimate be obtained from PRG and
Holmes & Graven prior to HRA author iza t ion to enlarge the
redevelopment project boundaries.
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HRA MINUTES
MAY 15, 1995
MODIFICATION OF TIF PLAItS FOR TIF DISTRICT NOS. 1-1 THROUGH I-
ll.
Again, Koropchnk reiterated information provided in the agenda
supplement relating to the modification of TIF Plans for
District Nos. 1-1 through 1-11. Members were provided with an
Legislative update on TIF, a line-item list of potential
projects for the pooling TIF dollars from pre-1990 Districts,
and a proposed schedule for modification of the plans. Per
Attorney Bubul, the HRA was advised to continue discussions to
define a line,-item budget which would safeguard against any
action by the State Legislation.
Earlier in the evening at the joint governmental me;;~ting,
commissioners responded and voted on questions to establish
goals for economic development in relationship to the
Comprehcnsive Plan Update. Additionally, the commissioners
were exposed to the prel iminary concepts of two proposed
projects: an outlet mall and a Minnesota Sports Federation
arena.
Of the estimated 3.5 million pooling dollars, the HRA
recommended the following budget: 1) Retire the debt
(estimated $90,OOO) on the 8% loan from the City for Lot 5,
Block 3, alp. 2} $100,000 for redevelopment of the Katzmarek
Property. Due to the fact the property lies within a flood-
zone and is non-buildable. no tax increment can be generated.
3) $2,000,000 for the Fallon Overpass as an alternative route
for local traffic (Koropchak felt the estimated dollars for
this was $1.400,000). 4) Remaining pooling dollars for the
Waste Water Treatment Plant.
The HRA saw an immediate need to upgrade the intersection of
Highway 25 and Oakwood Drive to eliminate traffic congestion
and an unsafe area. Wi th no estimated dollars for the
intersection upgrade and no designated parcels for
realignment, the BRA did not rccommend dollars for this public
improvement. The interchange at 1-94 and County Road 118 was
marketed to thc outlet mall dcveloper =~ an upgrade of
$400,000 (on and off ramp) and not the $3,000,000 (full
interchange) .
MODIFICATION OF THE TIF PLAN FOR TIF DISTRICT NO. 1-19.
Again, Koropchak reiterated the information providod in the
agenda supplement stating this is a housekeeping item. This
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HRA MINUTES
MAY 15, 1995
modification ratifies the April HRA approval to increase the
budget of TIF District No. 1-19 (Mississippi Shores) by
$42,000. Total of the budget approvcd is $367,830.
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Everette Ellison made a motion to adopt the resolution
authorizing PRG to prepare the modification of the TIF Plans
for TIF District Nos. 1-1 through 1-11 and the TIF Plan for
TIF District No. 1-19, all located within Redevelopmcnt
pr'oject No.1. Brad Barger seconded the mot ion and wi th no
furthcr discussion, the motion passed unanimously, SEE
RESOLUTION 95--3.
Koropchak added prior to May 25, PRG will notify the taxing
jurisdictions of the fiscal impact only relating to the
modifications for the pooling TIF dollars which allows the HRA
flexibility to further define the line-item budget or to delay
any action pending the outcome of Legislative action by May
22. The taxing jurisdictions will be notified of the approved
budget relating to the modification of the TIF Plan for TIF
District No. 1-19, The HRA will adopt the resolution
approving the modifications at their June meeting. On June
12, the City Council will call for a public hearing date of
June 26, 1995 to adopt a resolution approving the named
modifications,
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CONSIDERATION TO. APPROVE A RIGHT--OF-ENTRY TO ENTER LOT 5,
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The HRA received a request from Brat Weiss, City Enginecr, to
approve a right-of-entry to enter Lot 5, Block 3, DIP, which
is owned by the HRA, Grading is necessary for devclopment of
a swale along the common property line of the southerly
boundary of the HRA lot and the northerly boundary of the
Klein Farm property, The swale wi 11 be located along the
common property line. The site will be restored by seeding
and at no cost to the HRA; however, the fence is not proposed
to be reinstalled.
After a brief discussion, Brad Barger made a motion granting
OSM a right-of-entry to enter Lot 5, Block 3, DIP. Everette
Ellison seconded the motion and with no further discussion,
the motion passed unanimously. SEE RESOLUTION 95-4,
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HRA MINUTES
MA Y 1 5, 1 995
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Koropchak explained the need for a preliminary concept
approval for the use of upfront TIF in the amount of $50,000.
Upfront TIF is necessary to both produce a rate-of-return
which is attractive to a developer and produce rents which are
affordable to the tenant.
Hoglund and Schwartz withdrew as interested developer after a
second review of the project and wi th the lack of no TIP
assistance for the HRA lot.
The tenant, a Monticello manufacturing business, has outgrown
the space it leases. The company's new owner is hard working
and appears to know the business. The most current P&L
statements indicate the eompany profits are ahead of
projections. The company has excellent accounts and has
turned-down business. The company has one-year remaining of
high worker I s compensation premiums for a portion of the
business which has been sold.
PRG has found a developer from the metro who is interested in
the project. A meeting is scheduled for tomorrow 'V.d th the
proposed deve loper, tenant, PRG, and Koropchak. Following
that meeting, a meeting has been scheduled with First Bank.
The tenant needs to make a decision by mid-May whether to
relocate in 1995 to Becker or Monticello or to rent for an
additional year. Additionally and again, the project is not
financially doable without TIF. The proposed project is for
the construction of a 13,500 to 15,000 sq ft metal
office/manufacturing facility for lease to the tenant. The
tenant/company currently employs 28 full-time and plans to
hire: an additional 10-12 people with the expansion. The
project both supports the BRE objective of the IDe and truly
meets the TIF "but for" test and the GMEF "gap financing"
criteria.
Without complete financial data, HRA members agreed the
project was marginal and felt the project did not meet the
objectiv~s outlined at the joint-governmental meeting. They
encouraged the company to lease for another year allowing time
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HRA MINUTES
. MAY 15, 1995
to increase their profits in ordcr to afford industrial market
rental rates. The HRA would reconsider the use of TIF next
year.
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HRA members agrecd the comments from the refcrence checks were
positive and suggested the use of Publicorp, Inc. when the HRA
has a now project. This would be on a trial basis, PRG is to
complete the projects and modifications in progress.
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11. OTHER BUSINESS:
a:)~ HRA'-in-embe-r:-s accepted the monthly PRG and Holmes & Graven
bills. Koropchak noted legal expenditures, today, for
the Senior Housing project were approximately $5,000.
b) HRA members agreed and went on record stating the highest
and bost use of the Monticello Commerce Conter property
was for the utilization of industrial businesses and
qUulity jobs,
c) Chairperson Larson requested Koropchak review with
Attorney BubuI for any legal ramifications the addition
of a nineth cr iter ia to the local TIF pol ic iee: The
project shall be deemed to demonstrate community
involvement and/or encourage local residency.
d) Koropchak noted a manufacturing business interested in
Monticello for construction of a 100,000 ~~ ft
office/production facility. 125 jobs and the need for 20
acres. Hopefully, the IDe Prospect Team will visit or
host the company in early June.
e) The June HRA meeting was changed to Tuesday, June 6, 1995
in order to accommodate schedules.
12 . ~P.19J1B1'JM,!;NL_
The HRA mceting adjourned at 11:45 p.m.
C)~ ~ ~~1) ~Cb
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Ollie Koropchak, Executive Director
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