HRA Minutes 12-06-1995
.
.
.
MINUTES
HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, December 6, 1995 - 7:00 p.m., City Hall
MEMBERS PRESENT: Chairperson Al Larson, Vice Chairperson Brad Barger, Tom St.
Hilaire, and Everette Ellison.
MEMBER ABSENT: Roger Carlson.
STAFF PRESENT: Rick WoIfsteller, Jeff O'Neill and Ollie Koropchak.
GUESTS: Steve Bubul, HRA Attorney
Rich Carlson
1. CALL TO ORDER.
Chairperson Larson called the HRA meeting to order at 7:00 p.m.
2. CONSIDERATION TO APPROVE THE OCTOBER 4, 1995. AND THE
NOVEMBER 1, 1995~ HRA MINUTES.
Brad Barger made a motion to approve the October 4, 1995, HRA minutes.
Seconded by Everette Ellison and with no corrections or additions, the October
minutes were approved as written.
Al Larson made a motion to approve the November I, 1995, HRA minutes.
Seconded by Brad Barger and with no corrections or additions, the November
minutes were approved as written.
3. CONSIDERATION TO CONTRACT WITH PUBLICORP, INC. FOR SERVICES
RELATING TO TIF.
Through a general consensus of the HRA members, preparation for establishment
and modification of TIF related issues will be contracted through Publicorp, Inc.
Having experienced some problems with Public Resource Group, Inc. (PRG) in the
area of TIF Plan modification and creation, the BRA had previously interviewed
Mark Ruff and two others from PublicoIp. Mark prepared the financial impact
analysis for the Katzmarek and Olson properties. They appear knowledgeable in the
area of TIF and recent changes adopted by Legislation, and have a good working
relationship with Attorney Bubul. With the proposed riverfront/downtown
redevelopment project under consideration, the HRA felt it was a good time to
switch companies. PRG will continue to prepare fmancial packages (uses and
sources) and SBA, CMIF, and State loan applications. One HRA member felt PRG
had served the HRA well and was happy with their perfonnance.
Page 1
.
.
.
HRA MINUTES
DECEMBER 6, 1995
4. CONSIDERATION OF AN UPDATE RELATING TO MODIFICATION OF THE
CENTRAL MONTICELLO REDEVELOPMENT PLAN POR ACQUISITION OF
ADDITIONAL PROPERTIES WITHIN THE REDEVELOPMENT PROJECT NO.
1 BOUNDARIES AND MODIFCA TION OF THE TIP PLANS FOR TIF
DISTRICT NOS. 1-1 THROUGH 1-19.
Based upon Attorney Bubul' s review of the Central Monticello Redevelopment Plan,
the plan lacked authorization. Authorization to acquire properties within the
boundaries of the Project No. 1 but without the creation of a TIF District.
Additionally, the Plan (budget) did not clearly identify the TIF Penalty and amount
or method for reimbursement. Therefore, the preparation for condemnation of the
Katzmarek property has been delayed by a month or two. Properties for possible
acquisition, acquisition costs, and consulting fees will be identified within the
modification of the the Plan. The HRA will adopt the resolution for modification
on January 10 and the public hearing and adoption by the City Council is schuduled
for January 22. Thereafter will the condemnation process begin.
Attorney BubuI informed members that modification of the plan would broaden the
HRA 's criteria for redevelopment. Additionally, he informed members of the two
approaches for condemnation. Quick-take approach is a 90-day process which locks
the HRA into a condemnation price established by the commission. The settlement
approach is a six-month or longer process which allows the HRA the option to
backout. Estimated attorney fees above acquisition is approximately $20,000-
$25,000. HRA members anticipate "money" is not the issue with Katzmarek.
5.
CONSIDERATION OF AN UPDATE RELATING TO THE
DOWNTOWN/RIVERFRONT REVITALIZATION PRESENTATION BY
THERESA WASHBURN AND THE CONSIDERATION TO DISCUSS THE
POTENTIAL OP THE HRA LOAN TO FUND ONE- YEAR CONSULTING
FEES.
Since the presentation of Theresa Washburn on November 16, the coalition group
met on November 28. Based on the time being right and upon hearing positive
comments, the coalition decided to move forward. Direction was given to continue
utilizing the consulting services of Theresa Washburn, to establish a second meeting
date in January with the consultant, for the HRA to research the potential of a loan
for the consultant's fees, and to research the availability of an intern from SCSU or
other qualified individuals for possible employment as a project manager. All
individuals in attendance at the November 16 meeting were to receive an update
relating to the move forward d~ision, and surveyed for the area of volunteer service
Page 2
.
.
.
HRA MINUTES
DECEMBER 6, 1995
of their desire and to suggest others who may be interested in the revitalization
project. The cost to date for Theresa's November 16 visit was $1,078.75. Bills from
the Monticello Times for advertisement and distribution of fliers have not been
received.
Attorney Bubul informed HRA members that the authority can hire a consultant for
a public putpose project located within the redevelopment project boundaries.
Consultant fees qualify as part of the available 10% administration cost from all TIF
Districts. Wolfsteller estimated the TIF Surplus at approximately $200,000.
Koropchak contacted the Cities of Pine Island and Waseca. Both communities had
utilized Theresa as a consultant. Both revitalization projects were tied to existing
structures (community reinvestments) and were funded by various public and private
dollars. Both coummunities agreed that Theresa's strengths were motivation, energy,
and an aggressive approach. "An outsider with a leadership ability to lay things out
from an objective viewpoint, non-political." The volunteer levels were high, then
fall, and rose again to a median constant.
Everette Ellison made a motion for the HRA to lend a not-to-exceed amount of
$lO,OOOto a borrower (undetermined organization) for Theresa Washburn's one-year
consultant fee, this to encourage the continuation of the riverfront/downtown
revitalization project. The loan has a one-year payback, is interest-free and
unsecured. The HRA will not hire the consultant, the interest.free loan is a loan to
the consultant's employer. Brad Barger seconded the motion and with no further
discussion, the motion passed unanimously. The one-year consulting proposal
includes five periodic workshops with unlimited telephone consulting service for a
total of $7,600 plus accommodations.
Secondly, the BRA considered the purchase of the "J" Corporation warehouse
facility behind the vacated Johnson Department Store. It was understood a private
individual offered $35,000 for the facility with an EMV of $22,600. The cold storage
facility obstructs the view of the river reported O'Neill. With the potential of a
revitalization project which is outlined in the proposed comprehensive plan update,
an opportune time may exist for purchase and demolition. This to add value to the
downtown or riverfront redevelopment project, a good investment. St. Hilaire
objected to the City purchase of downtown property when a private individual is a
willing buyer or perhaps the coalition would be interested as a buyer. If an
economic benefit exists, developers would be here. Riverfront/downtown
redevelopment has not been defined as an BRA goal nor does a plan exist for a
riverfront/downtown redevelopment project said St. Hilaire. Chaitperson Larson
informed members of his repeated concern by citizens relating to the declining status
Page 3
.
.
.
HRA MINUTES
DECEMBER 6. 1995
of the downtown area. People are interested in their community and Larson felt in
the past a greater emphasis was placed on housing and industrial development than
the downtown redevelopment. A community needs a mix of all three. The January
visioning workshop with Theresa will begin to establish the goals and objectives for
the revitalization project.
O'Neill stated one objective of an BRA is redevelopment. St. Hilaire agreed,
redevelopment with revenues, not with expenditures. It appears the focus of staff
is to spend rather than create revenues. O'Neill said the Comprehensive Plan
Update identifies the downtown as a problem area. Theresa being a follow-through
to address the identified problem area.
Brad Barger agreed that the HRA not expend dollars for redevelopment prior to
adoption of the Comprehensive Plan Update and establishment of goals by the
coalition group. O'Neill said the purchase price of the Johnson warehouse may go
up. Ellison felt the Johnson property would be part of a redevelopment plan now
or later and felt the HRA should purchase the warehouse and lease it out. St.
Hilaire felt without a plan, any revitalization/redevelopment becomes a piece-meal
project. (Amended 1-10-96: Deletion.) Barger suggested Johnson be encouraged to
lease out the building for one-year, O'Neill responded that was not an option.
Although the HRA was concerned with the declining status of the downtown area,
the HRA recommended a short-term rental of the Johnson warehouse and
recommended the Council consider hiring an individual to focus on redevelopment
of the riverfront/downtown. Additionally, Larson reiterated the comment by Bill
Demeules: Standard Iron looked at communities with a vital downtown.
6. CONSIDERATION TO REVIEW THE APPRAISAL FOR LOTS 1.2,3,4,& 5.
BLOCK 64, AND THE N 40 FT OF THE V AC RIVER ST L Y S OF BLK 64 AND
TO AUTHORIZE PREP ARA TION OF A PURCHASE AGREEMENT.
Without a plan for riverfront/downtown redevelopment, Brad Barger made a motion
to table any action for purchase on this property. Everette Ellison seconded the
motion. Further discussion revealed the HRA felt the property was not worth
$163,500. The motion passed unanimously.
Rich Carlson said time was of the essence from the prospective of the seller and
stated market prices are typically 20-25 % greater than the tax value. This property's
marketing price is $180,000. This property has 330 ft of river frontage and a typical
Page 4
.
.
.
HRA MJNUTES
DECEMBER 6, 1995
of the downtown area. People are interested in their community and Larson felt in
the past a greater emphasis was placed on housing and industrial development than
the downtown redevelopment. A community needs a mix of all three. The January
visioning workshop with Theresa will begin to establish the goals and objectives for
the revitalization project.
O'Neill stated one objective of an HRA is redevelopment. St. Hilaire agreed,
redevelopment with revenues, not with expenditures. It appears the focus of staff
is to spend rather than create revenues. 0' Neill said the Comprehensive Plan
Update identifies the downtown as a problem area. Theresa being a follow-through
to address the identified problem area.
Brad Barger agreed that the HRA not expend dollars for redevelopment prior to
adoption of the Comprehensive Plan Update and establishment of goals by the
coalition group. O'Neill said the purchase price of the Johnson warehouse may go
up. Ellison felt the Johnson property would be part of a redevelopment plan now
or later and felt the HRA should purchase the warehouse and lease it out. St.
Hilaire felt without a plan, any revitalization/redevelopment becomes a piece-meal
project. Larson suggested the Kjellberg building be a future agenda item for
consideration. Barger suggested Johnson be encouraged to lease out the building for
one-year, O'Neill responded that was not an option.
Although the HRA was concerned with the declining status of the downtown area,
the HRA recommended a short-term rental of the Johnson warehouse and
recommended the Council consider hiring an individual to focus on redevelopment
of the riverfront/downtown. Additionally, Larson reiterated the comment by Bill
Demeules: Standard Iron looked at communities with a vital downtown.
6. CONSIDERATION TO REVIEW THE APPRAISAL FOR LOTS 1.2.3,4~& 5,
BLOCK 64, AND THE N 40 FT OF THE V AC RIVER ST L Y S OF BLK 64 AND
TO AUTHORIZE PREPARATION OF A PURCHASE AGREEMENT.
Without a plan for riverfront/downtown redevelopment, Brad Barger made a motion
to table any action for purchase on this property. Everette Ellison seconded the
motion. Further discussion revealed the HRA felt the property was not worth
$163,500. The motion passed unanimously.
Rich Carlson said time was of the essence from the prospective of the seller and
stated market prices are typically 20-25 % greater than the tax value. This property's
marketing price is $180,000. This property has 330 ft of river frontage and a typical
Page 4
.
HRA MINUTES
DECEMBER 6, 1995
river lot has 100 ft of river frontage. St. Hilaire felt the property was worth between
$50,000 to $55,000 minus demolition. Ellison felt the property was worth $129,000.
O'Neill repeated results from the focus group meetings and the need for the Parks,
Planning, and HRA to focus on the downtown, river, and blight.
St. Hilaire questioned if we had the money, it appears taxes are increasing by 20 % .
We do not need more parks, we need revenues. Ellison supported some intangibles
with good planning and felt the extension of the Bridge Park to the west was good.
O'Neill stated with city growth comes recreational growth. Barger suggested
purchase of the non-buildable three easterly lots. St. Hilaire repeated the need for
a plan.
.
Chairperson Larson suggested the HRA consider hiring a planner who specializes in
riverfront/downtown redevelopment for preparation of a plan and study. Attorney
Bubul informed members this expenditure qualified as a use of TIF Funds. The
completed plan/study would need approval of the Planning Commission and would
be an implementation of the Comprehensive Plan Update. Al Larson made a
motion to <Amended 1-10-96: to begin the interviewing process of consultants) with
expertise in the area of riverfront/downtown redevelopment for preparation of a
plan and study. The specialized planner is independent of Steve Grittman. The
plan/study is an implementation of the Comprehensive Plan Update and Theresa
Washburn's efforts; is to focus on traffic, road, and pedestrian circulations; and to
include but not limited to design/architect and a market feasibility analysis.
<Amended 1-10-96: The plan/study to determine the northerly/southerly boundaries
and the easterly/westerly boundaries of the proposed project area for
redevelopment.) Brad Barger seconded the motion and with no further discussion,
the motion passed unanimously. Attorney Bubul and the Leaque of Minnesota
Cities will supply references. The planner must have the ability to give motivating
presentations. Estimated cost, less than $50,000. Koropchak is to review this motion
with Theresa Washburn.
7.
CONSIDERATION TO RATIFY THE EXECUTION OF THE SUBORDINATION
AGREEMENT BETWEEN THE HRA AND FIRST AR BANK AND THE
LICENSE AGREEMENT BETWEEN THE HRA AND VECTOR TOOL.
Koropchak informed HRA members that since the original approval of the
Subordination Agreement, the lender requested two changes. Upon the advise of
the BRA Attorney and in order to avoid termination of the project, the Chair and
Director agreed to the request. Changes: First, the HRA terminates its right of
reversion relating to default of the mortgage; however, the mortgagee agrees to use
.
Page 5
.
.
.
HRA MINUTES
DECEMBER 6,1995
river lot has 100 ft of river frontage. St. Hilaire felt the property was worth between
$50,000 to $55,000 minus demolition. Ellison felt the property was worth $129,000.
O'Neill repeated results from the focus group meetings and the need for the Parks,
Planning, and HRA to focus on the downtown, river, and blight.
St. Hilaire questioned if we had the money, it appears taxes are increasing by 20 % .
We do not need more parks, we need revenues. Ellison supported some intangibles
with good planning and felt the extension of the Bridge Park to the west was good.
O'Neill stated with city growth comes recreational growth. Barger suggested
purchase of the non-buildable three easterly lots. St. Hilaire repeated the need for
a plan.
Chairperson Larson suggested the HRA consider hiring a planner who specializes in
riverfront/downtown redevelopment for preparation of a plan and study. Attorney
Bubul informed members this expenditure qualified as a use of TIF Funds. The
completed plan/study would need approval of the Planning Commission and would
be an implementation of the Comprehensive Plan Update. Al Larson made a
motion authorizing the HRA to hire a planner with expertise in the area of
riverfront/downtown redevelopment for preparation of a plan and study. The
specialized planner is independent of Steve Grittman. The plan/study is an
implementation of the Comprehensive Plan Update and Theresa Washburn's efforts;
is to focus on traffic, road, and pedestrian circulations; and to include but not limited
to design/architect and a market feasibility analysis. Plan/study defined within the
northerly/southerly boundaries of the Mississippi River/I-94 and the
easterly/westerly boundaries of approximately the Senior High/Pinewood
Elementary. Brad Barger seconded the motion and with no further discussion, the
motion passed unanimously. Attorney Bubul and the Leaque of Minnesota Cities
will supply references. The planner must have the ability to give motivating
presentations. Estimated cost, less than $50,000. Koropchak is to review this motion
with Theresa Washburn.
7.
CONSIDERATION TO RATIFY THE EXECUTION OF THE SUBORDINATION
AGREEMENT BETWEEN THE BRA AND FIRSTAR BANK AND THE
LICENSE AGREEMENT BETWEEN THE HRA AND VECTOR TOOL.
Koropchak informed BRA members that since the original approval of the
Subordination Agreement, the lender requested two changes. Upon the advise of
the HRA Attorney and in order to avoid termination of the project, the Chair and
Director agreed to the request. Changes: First, the HRA terminates its right of
reversion relating to default of the mortgage; however, the mortgagee agrees to use
Page 5
.
.
.
HRA MINUTES
DECEMBER 6, 1995
reasonable efforts to provide the HRA with a copy of the notice of default.
Secondly, the BRA terminates its first right of refusal relating to foreclosure;
however, the mortgagee will consult with the HRA and make good faith efforts to
cooperate with the BRA is locating and selling the property to a third party.
Next, the HRA Chair and Director executed a License Agreement on November 9,
1995, between the HRA and Vector Tool which allowed the company to begin
construction prior to land conveyance and the closing. The closing was held
November 21,1995.
Tom St. Hilaire made a motion ratifying the execution of the Subordination
Agreement of November 21, 1995, between the HRA and Firstar Bank and the
execution of the License Agreement of November 9,1995, between the HRA and
Vector Tool & Manufacturing, Inc. Everette Ellison seconded the motion and with
no further discussion, the motion passed unanimously.
8.
CONSIDERATION TO AUTHORIZE PAYMENT OF THE TIF PAY-AS-YOU-
GO REIMBURSEMENTS FOR MARTIE'S FARM SERVICE AND CUSTOM
CANOPY. INC.
Tom St. Hiliare made a motion authorizing the 1995 reimbursement payment of
$2,500 to Russ and Sharon Martie upon receipt of the $2,735.74 from the county.
The motion also approved execution of the Certificate of Completion and authorized
the 1995 reimbursement payment of $7,426.59 to Stephen and Joan Birkeland, Jr.
upon the City receiving $2,426.59for HACA Penalty less $1 ,065.960f the available
tax increment ($12,618,86). Brad Barger seconded the motion. Per an inspection by
the building official on December 5, 1995, Custom Canopy had completed the
requirements of the December 7,1994, HRA motion. However, the building official
noted that the company is now in violation of the outdoor storage ordinance as
vehicles are parked outside the screen-fenced area. Reimbursement payment to
Birkeland is for 1995 only, 1996 reimbursement is subject to compliance of the noted
outdoor storage violation. Birkeland should be advised of the HRA requirement for
1996 reimbursement. With no further discussion, the motion passed unanimously.
Attorney Bubul noted upon default of a contract, the developer receives a Notice of
Default with 30 days to cure.
Page 6
.
.
.
HRA MINUTES
DECEMBER 6, 1995
9 . CONSIDERATION TO REVIEW REQUEST BY THE H- WINDOW RELATING
TO TIF REIMBURSEMENT.
Al Larson made a motion authorizing reimbursement payment of $1 0,000 beginning
February 1996 to the B-Window Company subject to receipt of evidence for
completion of the site improvements as required. Parking, lighting, and fencing have
been completed as it relates to the expansion. Planting of bushes and installation
of curbing will be completed in the spring 1996. Cold weather prohibited completion
this fall. Tom St. Hilaire seconded the motion and with no further discussion, the
motion passed unanimously.
10.
CONSIDERATION TO REVIEW REQUEST BY RON MUSICH RELATING TO
ADDITIONAL TIF ASSISTANCE.
With the HRA's interest to increase the tax base and create new jobs, Tom St.
Hilaire made a motion that the HRA would welcome the opportunity to consider
additional TIF assistance for a proposed Fay-Mar expansion upon the company's
compliance of the city ordinance relating to out-door storage and upon resolving the
problem with Schluender Construction Company. Al Larson seconded the motion
and with no further discussion, the motion passed unanimously.
11.
CONSIDERATION OF ACCEPTANCE FOR 1996 APPOINTMENTS AS
COMMISSIONERS OF THE HRA FOR SUBMITTAL TO THE CITY COUNCIL.
Chairperson Larson advised BRA members of the EDA recommendation relating
to consolidation of the HRA and EDA. The EDA recommended to the Council that
the existing two-organizational commission structure remain and that the Council
consider waiving the residency requirement for commissioners. Commission
members must have a vested interest in the community.
Everette Ellison made a motion of recommendation to the City Council endorsing
the re-appointment of Roger Carlson for a five-year HRA term, expiration date of
December, 2000, and re-instating the four remaining BRA members as follows:
Tom St. Hilaire
Everette Ellison
Al Larson
Brad Barger
Roger Carlson
December 1996
December 1997
December 1998
December 1999
December 2000
Page 7
.
.
.
HRA MINUTES
DECEMBER 6, 1995
Al Larson seconded the motion and with no further discussion, the motion passed
unanimously.
12. OTHER BUSINESS:
a) By a consensus of the HRA members, the October and November bills from
Publicorp, PRG, and Kennedy & Graven were ok'd.
b) Other business - None.
13. ADJOURNMENT.
The HRA meeting adjourned at 9:30 p.m.
O~ ~(/\~~
Ollie Koropchak, HRA Executive Director
Page 8