HRA Minutes 04-03-1996
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, April 3,1996 - 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.
STAFF PRESENT:
Rick Wolfsteller and Ollie Koropchak.
STAFF ABSENT:
Jeff O'Neill.
GUEST:
Steve Bubul, HRA Attorney
Jack Hutchinson, US Postal Service, Monticello
Charles Ehlen, Cinco Corporation
Terry Mick, Developer
John Komerak, Developer
1.
CALL TO ORDER.
Chairperson Larson called the HRA meeting to order at 7:00 p.m.
2.
CONSIDERATION TO APPROVE THE MARCH 6 AND MARCH 20, 1996 HRA
MINUTES.
Brad Barger made a motion to approve the March 6 and March 20, 1996 HRA
minutes. Roger Carlson seconded the motion and with no corrections or additions,
the minutes were approved as written.
3. CONSIDERATION TO REVIEW FOR ACTION THE DEVELOPMENT
CONTRACT BETWEEN THE HRA AND METCALF & LARSON.
Jack Hutchinson, US Postal Service, Monticello, informed HRA members of his
request of the HRA to enforce the filing of record of a 20-foot wide easement for
purposes of ingress and egress in favor of the City of Monticello to be approved by
the City Attorney. With one entrance only and the increase of fender-benders, the
Post Office moved the street drop-off mail boxes 40-feet to the west. Long-term
plans include an August construction of an annex building for carrier and mail
processing located on the property next to Burger King. The existing window and
box service will stay at its present location reported Hutchinson.
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HRA MINUTES
APRIL 3, 1996
Charles Ehlen, Cinco Corporation, asked, if the Development Agreement is a legal
paper and if so, why is it not enforced? Rick Wolfsteller responded no record of
easement was filed. Originally, the City had a 12-foot easement along the northerly
Flake property (Office Building). The HRA or City purchased the David Capp
property/house for a sum of $32,000, demolished the house, and sold the property
to Metcalf/Larson for $10,000 for utilization as parking for the new office building
and as a 20-foot easement for the purpose of inbTfeSS and egress. The 20-foot
easement in exchange for the original 12-foot easement. The City could opt to block
the 12-foot easement.
St. Hilaire felt no action should be taken without the presence of Metcalf/Larson.
Metcalf/Larson were informed of the meeting. Attorney Bubul informed members
if the easement is recorded and assigned to the City of Monticello, the City becomes
a party to the maintenance agreement. As is, the issue remains that of
Metcalf/Larson and the Cinco Corporation/Post Office.
Ehlen recognized and agreed with the safety concerns of the post office and the
inconvenience for customers. He noted the the post office lease expires in year
2000, and felt Metcalf/Larson benefitted from a reduced land purchase of $10,000;
yet, Metcalf/Larson are not forced to follow-through with their agreement to provide
an easement.
The HRA I s objective for not enforcing the contract was to encourage the two
property owners to communicate and negotiate a Maintenance Agreement. Or
secondly, to encourage Cinco Corporation to purchase the City lot (Hass Property);
thereby, providing their tenant with an entrance/exit to Linn Street and increasing
the value and marketability of their rental property. The HRA recommended the
two owners sit-down and discuss the various options or Ehlen consider purchase of
the City lot.
4. CONSIDERATION TO HEAR A PROPOSAL FOR A MULTI-HOUSING
DEVELOPMENT ON THE BRENNAN PROPERTY AND CONSIDERATION
OF TIF ASSISTANCE.
Terry Mick, developer, informed H RA members of a proposal to construct SO-units
of a combination of market and low/moderate income multi-housing on the Brennan
property located to the north of the proposed West 7 Street and to the west of
Minnesota Street. A market study has not been done nor has the Planning
Commission viewed a preliminary concept. A developer cannot get Section 42, Tax
Credits without City or HRA TIF assistance; therefore, Mick requested the HRA I s
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HRA MINUTES
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consideration of TIF. Low/moderate income housing is not subsidized housing. Tax
credit application occurs three times a year beginning in March.
After discussion, the HRA unanimously agreed that the low/moderate income multi-
housing concept did not meet the objective of the Monticello Comprehensive Plan;
therefore, the HRA declined utilization of TIF. The Comprehensive Plan
encourages the development of quality housing. The HRA told Mr. Mick that said
the community would welcome and support the development of upscale housing.
5.
CONSIDERATION OF AN UPDATE ON THE EMINENT DOMAIN PROCESS
OR CONSIDERATION TO ACQUIRE THE KATZMAREK PROPERTY.
Koropchak informed HRA members of a conference call between Komerak, Larson,
Barger, Koropchak, and Attorney Bubul on March 29, relating to Komerak' s further
negotiations with Katzmarek to purchase the property without eminient domain.
Komerak received the go-ahead to negotiate a purchase agreement for the
Katzmarek property in the amountnot-to-exceed $100,000 for the property and
$50,000 for relocation costs for a total of $150,000. Vacation of the parcel to occur
no later than late fall 1996. The relocation consultant was placed on-hold and the
appraiser was to complete the appraisal. It was suggested, the HRA consider
swapping parcels with the City (Katzmarek property for the Gille property.)
Chairperson Larson reported on his initial, somewhat-hostal conversation with
Katzmarek, the potential legal and consultant expenses of eminient domain, and of
Komerak's time and effort negotiating on behalf of the HRA. Larson felt $150,000
was a reasonable amount at the end.
Komerak informed HRA members that he had a signed purchase agreement with
Katzmarek. Five-thousand dollars as earnest money and $140,000 payable upon
closing on or before June 30,1996, contingent upon HRA approval of Komerak's use
of adjoining property.
Until receipt of the Prairie West Plus proforma from Mark Ruff, the need to discuss
swapping of properties is irrelevant stated St. Hilaire. St. Hilaire questioned how the
assistance by the HRA evolved to $145,000 for the Katzmarek property, $160,000
TIF, potential swap of a $32,000 City parcel plus forgiving water and sewer
assessments.
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HRA MINUTES
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Members agreed that Komerak needed to provide a copy of the three purchase
agreements to the HRA and to submit the needed information for the proforma as
required by Mark Ruff prior to further discussions.
6. CONSIDERATION TO REVIEW THE PRELIMINARY ESTIMATE OF THE
CASH BALANCE OF THE TIF SURPLUS FUND.
The preliminary estimates of the TIF Surplus Fund indicates approximately $155,000
at the end of the tax year 1995. Without projecting any new expenditures, the
annual surplus expected over the next ten years is $100,000 to $150,000 per year.
Koropchak noted the expenditures under consideration: Planner consultant fee and
Katzmarek and Fluth properties.
St. Hilaire questioned the $150,000 for (Katzmarek) property located in a flood
plain. Members asked what percentage of the property was buildable? Without
seeing the proforma, Wolfsteller questioned if the amount of TIF and HRA
assistance requested was subsidizing the somewhat high acquisition costs negotiated
by the developer. Koropchak informed members of the need to enter into a Pre- TIF
Agreement with Komerak to insure development and to protect the HRA. HRA
members agreed for the need to define a strategy for redevelopment: Establish
proforma, consider TIF assistance through Redevelopment District, consider
acquisition of Katzmarek property, and consider deeding Katzmarek property to the
City for green space or swapping Katzmarek and City (Gille) properties.
7.
CONSIDERATION TO REVIEW FOR ACCEPTANCE THE APPRAISAL FOR
111 WEST BROADWAY AND AUTHORIZATION TO PREPARE AN OPTION
AGREEMENT.
At a special meeting of the HRA on March 20, the Commissioners authorized John
Farrell to appraise the raw land located at 111 West Broadway. The intent of the
HRA was to present Barry Fluth with an offer to acquire the raw land through an
option agreement. Terms previously discussed were $2,500 earnest money, not-to-
exceed nine months from the date of the option agreement, and first right of refusal.
The BRA reviewed the appraisal which appraised the 111 West Broadway property
at $37,000. Attorney Bubul commented on the HRA cashflow noting the future
need to identify a plan for expenditure of TIF Surplus dollars as Legislators
ultimately may place restrictions eliminating the HRA's ability to collect the T1F
Surplus. Because the initial TIF Surplus appeared lower than originally anticipated,
the HRA could consider an internal loan from the City for acquisition of the Fluth
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HRA MINUTES
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property as the initial cash balance of the surplus dollars maybe spend on the
Katzmarek acquisition and the hiring of Hoisington.
St. Hilaire felt no risk existed to the HRA relating to Mr. Fluth's finding a willing
buyer for the said property. Tom St. Hilaire made a motion to offer a first right of
refusal on the I II West Broadway property. Terms: Not-to-exceed three years at
$100 per year. Attorney Bubul to draft document upon acceptance of offer by Mr.
Fluth. Brad Barger seconded the motion and with no further discussion, the motion
passed unanimously.
8.
CONSIDERATION OF AN UPDATE RELATING TO THE PROCESS TO HIRE
A CONSULTANT FIRM FOR THE PURPOSE TO PREPARE A STUDY/PLAN
FOR THE DEVELOPMENT OF THE COMMUNITY/RIVERFRONT.
Chairperson Larson informed HRA members that Barger and himself along with
MCP Boardmembers Bowen and Maus and Assistant Administrator Wolfsteller will
be meeting with Michael Schroeder of Hoisington Koegler Group, Inc. on April 5
to define the scope of services and negotiate a not-to-exceed fee. Larson will
attempt to negotiate a lower fee based on the team work or participation of MCP
Committees. Chairperson Larson asked HRA members if they wished to hear the
results of the negotiation meeting prior to the HRA hiring the consultant firm.
Commissioners agreed that was not necessary. Tom St. Hiliare made a motion
requesting MCP Chairperson Bowen submit a letter of recommendation to the HRA
recommending the hiring of the consultant firm of Hoisington Koegler Group, Inc.
The negotiation team having free hand to define the scope of services at a fee of
approximately $80,000 plus other services deemed necessary. Roger Carlson
seconded the motion and with no further discussion, the motion passed. Yeas: Tom
St. Hilaire, Roger Carlson, and Brad Barger. Nays: None. Absent: Everette
Ellison. Abstention: Al Larson.
A special meeting was set for April 11, 1996,5:00 p.m., City Hall, to review the
Contract between the HRA and Hoisington for authorization to enter into the
contract. Contract will be prepared by Hoisington and reviewed for approaval by
Attorney Bubul.
Hilaire noted if the HRA elects to expend $145,000 for Katzmarek, $160,000 on the
Banyai and Hanawalt properties, dollars for Gille property and public improvements,
and upfront assistance to Tappers; he would resign from the HRA, January I, 1997.
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HRA MINUTES
APRIL 3, 1996
9. OTHER BUSINESS.
a) Approval of Monthly Bills - HRA members OK'd the March bills from
Kennedy & Graven and Public Resource Group, Inc.
b) Other - None.
10. ADJOURNMENT.
The HRA meeting adjourned at 10:30 p.m.
OL \<d\~g~
HRA Executive Director
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