HRA Minutes 05-06-1996
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Monday, May 6, 1996 - 4:00 p.m.
City Hall
MEMBERS PRESENT:
Chairperson Al Larson, Vice Chairperson Brad Barger, and
Roger Carlson.
MEMBERS ABSENT:
Tom St. Hilaire.
STAFF PRESENT:
Ollie Koropchak.
GUEST:
Barry Fluth.
I. CALL TO ORDER.
Chairperson Larson called the HRA special meeting to order at 4:30 p.m.
2.
CONSIDERATION TO ADOPT A RESOLUTION AUTHORIZING
ACQUISITION OF THE PROPERTY LOCATED AT 111 WEST BROADWAY.
Previously HRA members had been informed that Mr. Fluth did not accept their
offer of April 3: First right of refusal for a period not-to-exceed three years, $100
per year. Mr. Fluth felt the offer was an insult and he understood the intended-offer
was at appraisal value (negotiable), $2,500earnest money, not-to-exceed nine months
from date of option agreement, and first right of refusal.
At the May 1 HRA meeting, Administrator Wolfsteller informed HRA members that
a local business-owner had made inquiries relating to city parking requirements for
development of 111 West Broadway. With the results of the TIF Surplus Proforma
and a recommendation from the H RA financial consultant to consider land banking
properties within the potential redevelopment project area, the HRA approved an
offer of $37,000 (HRA appraisal value), $2,500 earnest money, not-to-exceed nine
months for acquisition of the III West Broadway property. Koropchak to contact
Fluth for acceptance of offer prior to preparation of the purchase option.
Upon Koropchak contact with Mr. Fluth for acceptance of the HRA' s May I offer,
Fluth acknowledged the interest of a potential (private) buyer with no need for
government approvals at a greater purchase price. The seller would consider an
HRA purchase agreement inclusive of an in lieu of condemnation clause, the buyer
accepts the property "as is", and without prolonged public hearings or council
approval. Therefore, a special HRA meeting notice was posted for May 6, 1996,
4:00 p.m. for consideration to execute a prepared purchase agreement at a purchase
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HRA MINUTES
MAY 6,1996
price of $50,000, $1 ,000 earnest money, and closing date on or before May 31, 1996
inclusive of an attached addendum.
Koropchak reported St. Hilaire was unable to attend the special meeting and
informed commissioners of St. Hilaire's non-support for acquisition of the 1 I 1 West
Broadway parcel.
Additionally, Koropchak reported Mark Ruff, Publicorp, advises the HRA against
involvement in any purchase bidding-wars and a rule-of-thumb for purchase price
consideration: Not-to-exceed 120% of the appraisal. Koropchak reported Attorney
Bubul expressed two concerns: One, the in lieu of condemnation request, although,
perhaps workable. To accommodate this request Bubul recommended the HRA
adopt a resolution finding that the HRA was prepared to acquire III West
Broadway property through eminent domain inorder to eliminate a blighted
condition and to carry out a redevelopment project. The in lieu of condemnation
gives the seller a three-year window for re-investment of capital gains. Bubul 's
second concern was acquisition without a Phase I, Environmental Study. Also,
because the III West Broadway property was not identified in the modificiation of
the Central Monticello Redevelopment Plan for Project No. I, the purchase dollars
must be disbursed from the HRA General Fund, not TIF Surplus Funds.
Commissioner Barger felt the HRA ownership of the parcel was a necessary,
temporary thing until such time the Revitalization Study was completed and the
redevelopment of the downtown occurred. Additionally, he felt the HRA would
receive some heat because an acquisition by the HRA may be viewed as
discouraging an interested private business-owner from investing in the downtown.
Lastly, Barger felt a Phase I, Environmental Study should be completed as this is a
common practice. Fluth inquired to "why"the addendum did not reference the "as
is" clause as requested. Koropchak responded that Attorney Bubul preferred not to
include the "as is" clause as normally it is understood the buyer assumes such
liability. Attorney Bubul has conversed with Brad Larson, Attorney for Fluth.
Commissioner Carlson felt HRA ownership of the property ensured management of
the downtown area which is currently under study by Hoisington. Commissioner
Larson felt the acquisition was a timing issue which required the HRA taking a risk.
Fluth expressed he had a verbal purchase commitment, a clean deal with no
government acquisition requirements, at a price greater than the HRA appraisal of
$37,000.
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HRA MINUTES
MAY 6,1996
Roger Carlson made a motion to adopt the resolution authorizing the HRA to
acquire the III West Broadway property, including by exercise of the powers of
eminent domain, real property that is necessary to eliminate blight or to carry out
the project. In lieu of acquisition, authorizing the execution of the Standard
Purchase Agreement between the HRA and Barry D. Fluth and Barbara A. Fluth.
Al Larson seconded the motion and with no further discussion, the motion passed
unanimously for the reasons stated above.
Fluth r~quested his attorney review the purchase agreement prior to execution by
Barbara Fluth.
3. OTH ER BUSINESS.
None.
4. ADJOURNMENT.
The special HRA meeting adjourned at 4:50 p.m.
~~ "~nu~~
Ollie Koropchak, Executive Director
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