HRA Minutes 10-04-1995
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTIlORITY
Wednesday, October 4, 1995 - 7:00 p.m.
City Hall
MEMBERS PRESENT: Chairperson Al Larson, Vice Chairperson Brad Barger, Tom St.
Hilaire, and Roger Carlson.
MEMBERS ABSENT: Everette Ellison.
EXECUTIVE DIRECTOR: Ollie Koropchak.
CITY STAFF:
Jeff O'Neill.
GUESTS:
Steve Bubul, HRA Attorney
Mark Ruff, Publicorp, Inc.
Dick Frie, Planning Commission Chair
Rich Carlson, Planning Commission Member
1. CALL TO ORDER.
Chairperson Larson called the HRA meeting to order at 7:00 p.m.
2.
CONSIDERATION TO APPROVE THE SEPTEMBER 14. 1995.HRA MINUTES.
Brad Barger made a motion to approve the September 14, 1995, HRA minutes.
Roger Carlson seconded the motion and with no corrections and additions, the
minutes were approved as written.
3. OLD BUSINESS:
a)
Confirmation of TIF Reimbursement to Russell and Sharon Martie.
HRA members acknowledged that the $7,500 TIF Reimbursement due
Russell and Sharon Martie was paid via a copy of the check dated September
12,1995. The reimbursement was for 1992,1993, and 1994 as per the Private
Redevelopment Contract.
Consideration to review for followup the second notice mailed Jay Morrell
relating to the TI Guarantee deficiency.
Chairperson Larson asked if this was a matter to be resolved between the
developer and the City Councilor Administrator. Attorney Bubul responded,
"No, the original Redevelopment Contract was between the HRA and Ron
and Dee Johnson." The original TI Guarantee was $20,000 and was later
modified to $28,000. When the property was later sold to Plaistad/Morrell
and later to Morrell; the redevelopers, City, HRA, and Asssessor agreed to
reduce the EMV to within a range of the foreclosure/purchase price.
b)
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HRA MINUTES
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However, the TI Guarantee remained at $28,000. The problem with the
modified agreement is no provision exist stating if the redeveloper defaults,
the redeveloper is liable for the BRA legal fees. Attorney Bubul continued
if the HRA filed a claim against Morrell, the legal costs to collect may
outweight the TI Guarantee shortfall of $12,517.93 for expired TrF District
Nos. 1-1 and 1-4. The modified agreement was drafted by the 1989 City
Administration. With the given information, the HRA elected not to file a
claim and directed Koropchak to contact Morrell for a personal conversation
to resolve to the shortfall.
c) Consideration to review for followup the September 6,1995, letter from Brad
Larson.
Mr. Brad Larson's letter indicated a willingness to provide the 20-foot
easement for ingress and egress per the contract; however, since this was a
public easement they felt the maintenance might be borne by the city. The
BRA members agreed to continue the "wait and see approach" since the
maintenance item is between the two property owners Larson/Metcalf and
Cinco Corporation. Koropchak drafted the September 27, 1995 letter to
Cinco Corporation for clarification purposes only.
4.
NEW BUSINESS:
a) Consideration to discuss for potential purchase the property described as Lots
1,2,3,4,&5, Block 64 and N 40 ft of vac River St ly S of Blk 64 -
Jeff O'Neill reported that the Parks Commission was supportive of the HRA
acquiring this parcel along the Mississippi River for use as a public park
because of the high demand for parks, increased useage of the Bridge and
Ellison Parks, and green space would compliment an area redevelopment
project or a downtown redevelopment project. Additionally and although
purchase price is unknown, this may be an opportunity for use of TIF Surplus.
Rich Carlson, representing the seller, informed HRA members of his
awareness as a Planning Commission member that this property or area was
identified as a problem within the City Comprehensive Plan. At first the
sellers were reluctant to accept the idea of their home being purchased for
possible demolition; however, more recently the sellers have different
thoughts. Additional comments by Rich Carlson were the couple were
reluctant to attach a purchase price. The lot has 330 feet of river frontage
which runs $400-$600 per linear foot. Time frame is good. Do not push
sellers allowing adequate time for the sellers to fmd new place. The tum-of-
the-century home could be moved. The garage was totaling destroyed in
wind storm.
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HRA MINUTES
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Attorney Bubul informed members that the HRA could acquire the property l
deed the property to the City for public park (public purpose)l and must
inform the sellers of their rights to relocation costs. As willing sellers the
relocation costs would be waived, otherswise, a relocation consultant is hired
to establish relocation costs. It was highly advised that an appraisal be
obtained to establish some reasonable basis of a price as this is a public
purpose project. A resolution would be adopted prior to demolition to
establish a three year window which allows the demolished structure to
qualify within the test for establishment of a Redevelopment District.
Tom St. Hilaire voiced a middle-of-the-road position to move forward with
acquisition. This an expenditure and he prefers promoting new business, a
revenue. The remaining three members voiced an opinion to proceed
because the property would compliment a potential riverfront/downtown
redevelopment project or a redevelopment project of high-rate townhomes
as identified as a goal of the HRA two years prior.
A figure of $180,000 with garage was mentioned by the seller's agent as not
out-of-line for starts.
b)
Brad Barger made a motion authorizing an appraisal of the described
property. Tom St. Hilaire seconded the motion and without further
discussion, the motion passed. Yeas: Brad Bargerl Tom St. Hilairel and Al
Larson. Nays: None. Abstention: Roger Carlson (Potential conflict of
interest. Rich Carlson, the seller's agent, is brother to Roger.) Rich Carlson
advised the HRA that the property is not available for public auction up to
a maximum of one year.
Consideration to review the feasibility study and recommendations as
prepared by Mark Ruff of Publicorp, Inc. relating to the Prairie
West/Katzmarek and Olson properties -
Mark Ruff reviewed the written information provided in the agenda and
informed members the Olson property in the 500 block of East Broadway is
a likely parcel for redevelopment. Patterned after the Richfield program,
single parcels are purchased by the HRA from volunteer sellers. Demolition
occurs and parcels sold to pre-arranged interested builders. The HRA creates
a Redevelopment District through cooperation with the County which
includes about 10 identified parcels for redevelopment. Average purchase
price is $40,000 to $50,000with demolition costs of a couple thousand dollars.
The builder purchases the raw land for approximately $25,000from the HRA
and the new home generates about $25,000 over the life of 25-year district.
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A new home of greater market value is build and encourages the
neighborhood to make improvements. Mark recommended local criteria be
established: Define the market, market volunteer sales, find builders,
establish minimum new market values, and identify several parcels for district
which are agreeable to Council and staff.
Downsides are a parcel may contain soils with environmental issues. HRA
members recognized this programs works based on all assumptions and the
market being right, an HRA may re-gain the value but not the cost. Planning
Commissioner Carlson felt redevelopment of single homes along Broadway
was not marketable because of the heavy traffic and felt the area should be
rezoned to enlarge the downtown area as part of the updated comprehensive
plan.
c)
Next, Mark Ruff informed the HRA members that the Katzmarek property
in itself qualified as a redevelopment district. However, if the properties to
the east were included to increase the tax increment revenue, the area would
not qualify as a redevelopment district because a resolution was not adopted
by the City prior to demolition of the old Gille structures and removal of
tanks. However, the HRA can acquire, demolish, and deed the Katzmarek
property to the City for a public park as it lies within the Redevelopment
Project NO.1 boundaries. Rich Carlson and Koropchak informed the HRA
members of the conversation between Mr. Katzmarek and John Kamerek
relating to an interest for a trade/purchase arrangement. Mr. Katzmarek was
not interested in relocating to the township on property similiar to his current
surroundings. HRA members recommended Koropchak contact Mr.
Katzmarek for a meeting between Chairperson Larson, Katzmarek, and
Koropchak relating to the HRA' s interest of redevelopment and Mr.
Katzmarek's interest to sell. If Mr. Katzmarek has no interest to sell, Tom
St. Hilaire made a motion for the HRA to move forward with condemnation
and relocation of a blighted property for redevelopment. The property
known as the Robert Katzmarek property. Al Larson seconded the motion
and with no further discussion, the motion passed 4-0. The HRA members
agreed not to act on the Olson property along East Broadway until
completion of the City Comprehensive Plan Update.
Consideration to review the descrepancy between the estimated TIF Penalty
and the State's TI Aid reduction -
HRA members accepted the written explanation provided by Lenny Kirscht
of PRG, Inc. The descrepancy resulted because of the combination of a
decrease in the sales ratio and an increase in the estimated tax rate between
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HRA MINUTES
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the date the post 1990 TIF Districts were created and the actual reported aid
reduction.
d) Consideration to amend the City of Monticello TIF Policies for addition of
the proposed nineth criteria -
Al Larson made a motion amending the TIF Policies for the addition of the
nineth criteria: The project shall demonstrate "community involvement"
including demonstrated degrees of the various factors:
a) Local residency of the company's owners and employees, or
b) Local residency of the contractors involved in the project, or
c) Membership in local business organizations, or
d) Other similiar factors.
Roger Carlson seconded the motion and with no further discussion, the
motion passed 4-0.
5.
CONSIDERATION TO REVIEW HRA BILLS FOR APPROVAL:
a) Acknowledgement of Letter of Adjustment - Members accepted the
adjustment from $1 ,389.80to $300 relating to the Kennedy & Graven billing
for research of the TIF Policy criteria.
b) Authorize payment of Vector Tool bills for reimbursement - Al Larson made
a motion fOf payment of the public hearing notice publication of $171.05 and
preparation of purchase agreement of $773.40 relating to the Vector Tool
project. Roger Carlson seconded the motion and with no further discussion,
the motion passed. Yeas: Al Larson, Roger Carlson, and Tom St. Hilaire.
Nays: None. Abstention: Brad Barger (Potential conflict of interest.) All
HRA costs associated with the land sale are the responsibility of the buyer
and the HRA will be reimbursed by the title company at the time of closing.
c) Authorization of other bills - Members authorized payment of the $31.00
Kennedy and Graven bill.
6. OTHER BUSINESS.
Chairperson Larson requested Attorney Bubul inform the HRA members to the
general powers of an HRA and the general powefS of an EDA. This a reiteration
of the special COlUlcil meeting of October 4, 1995, which was requested by the (DC
to consider consolidation of the HRA and the EDA and to define the role of the
IDC as a possible subcommittee of either organizations. As a subcommittee of a
governmental entity, the IDC would be subject to the open meeting law and
restrictions would apply to expenditure of IDC flUlds. The IDC officers felt their
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function was best served as a subcommittee of the Chamber of eommerce for
utilization of the Chamber's non-profit tax exempt status.
HRA members individually verbalized their opinion to the strengths and weaknesses
to consolidate the BRA and the EDA. They Ullanimoulsy agreed and recommended
that the HRA and EDA not consolidate and that the existing two-commission
organizational structure continue. HRA members felt the two-commission structure
was the best long-term organizational structure for the eity of Monticello because
the structure offers a checks and balance system, works well to the benefit of the
developers and the city, and the preservation of the HRA preserves the non-tangible
HRA assets of historical value, experience, and familiarity of projects.
Subject to Attorney Bubul' s verification that the HRA can legally administer the
GMEF and if the eity eOUllcil saw the roles of the HRA and EDA as a duplication
of efforts and elected to consolidate the HRA and EDA, then the HRA
recommended that the HRA be preserved and the EDA consolidate into the HRA.
Members felt that the HRA was in a better position to address project issues
because of the HRA' s historical value, experience, and familiarity of projects and the
preservation of the HRA would best retain a checks and balance system.
After Mr. Bubul verifies the HRA can legally administer the GMEF, Koropchak was
requested to draft a letter to COUllcilmembers stating the HRA's recommendations.
Letter to be signed by HRA members in attendance.
Also, HRA members requested HRA minutes be submitted to Planning Commission
Chairperson Dick Frie.
7. ADJOURNMENT.
The HRA meeting adjourned at 10:00 p.m.
O~ \<O\"'~
Ollie Koropchak, HRA Executive Director
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