HRA Minutes 12-04-1996
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, December 4, 1996 - 7:00 p.m.
City Hall
MEMBERS PRESENT:
Chairperson Al Larson, Vice Chairperson Brad Barger, Tom St.
Hilaire, Roger Carlson, and Steve Andrews.
STAFF PRESENT: Rick Wolfsteller, Jeff O'Neill, and Ollie Koropchak.
GUEST:
Bill Fair, Mayor-elect
Mark Ruff, Publicorp, Inc.
Dan Reed
1. CALL TO ORDER.
Chairperson Larson called the HRA meeting to order at 7 :00 p.m.
2.
CONSIDERATION TO APPROVE THE NOVEMBER 6, 1996 HRA MINUTES.
Steve Andrews made a motion to approve the November 6, 1996 HRA minutes.
Seconded by AI Larson and with no corrections or additions, the minutes were approved
as written.
3.
CONSIDERATION TO AMEND THE PRIVATE REDEVELOPMENT CONTRACT
BETWEEN THE HRA AND CEDRUS CREEK CRAFTSMAN, INC.
Redeveloper John Komarek reported three twin home units have been sold and feedback
is positive. Meeting the deadline for [mal plat approval is unlikely because ofthe need to
contact Burlington Northern RR for easement rights for ponding or drainage. Koropchak
reported based on that information, Attorney Bubul preferred the HRA amend the [mal
plat approval and recording date in addition to the commencement date for construction of
Phase I. Komarek requested the commence to construct date be amended to July 1,
1997, and acknowledged no problem with meeting the completion date of four twin home
units in Phase I by December 31, 1997.
Per the request ofthe redeveloper and to prevent default of the contract, Roger Carlson
made a motion to amend the Private Redevelopment Contract between the HRA, City of
Monticello, and Cedrus Creek Craftsman, Inc. amending the commencement date for
construction ofthe twin home units for Phase I from December 31, 1996, to July 1, 1997
and allowing the Prairie West 2nd Addition final plat to be approved and recorded by
April 1 , 1997. Tom 51. Hilaire seconded the motion and with no further discussion, the
motion passed unanimously.
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BRA MINUTES
DECEMBER 4, 1996
4. CONSIDERATION TO ESTABLISH A REDEVELOPMENT DISTRICT ALONG
WEST SIXTH STREET IN EXCHANGE FOR PROPERTY LOCATED AT 220
FRONT STREET.
HRA members were informed ofthe one-year moratorium on the issuance of building
permits in the designated redevelopment study area. The moratorium approved by City
Council on November 25, 1996, has placed a hardship on the Dan Reed family who had
applied for a building permit on the property located at 220 Front Street. Mr. Reed had
intended to construct an earth berm home for his handicap niece. Since the property lies
within the redevelopment area under study by Hoisington, Council requested the HRA
take a positive position to purchase the Front Street property and to assist Mr. Reed in
finding an alternate location to construct the proposed new home. The Front Street parcel
was purchased for approximately $24,500 and was an ideal location west of Highway 25
and within walking distance of family. Since the Council meeting, Mr. Reed has found a
willing seller of the parcel at 601 West 6 Street. The seller purchased the property a few
years ago for $51 ,000.
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Assuming acquisition and demolition costs of $67,000 for the 6 Street property and an
exchange value of $27,000 for the Front Street property, the immediate gap would be
$40,000. If a TIF Redevelopment District was established the total TIF revenue over 25
years was estimated at approximately $16,000 reducing the gap to $24,000.
HRA members had various opinions. The redevelopment and exchange would meet two
goals of the BRA; the removal of blight and acquisition for future riverfront development.
Meets the objective ofthe City and Mr. Reed. Not identified parcel for use ofTIF surplus
money, City can assist or end moratorium. Assist Reed in finding an alternate lot. BRA
only purchase Front Street property at a favorable price. Key area for the MCP. Council
established moratorium, their responsibility. Mr. Reed informed members that he had
searched for some time unsuccessfully prior to purchase of the Front Street parcel.
O'Neill felt the redevelopment and exchange was a long-term investment for the city with
the projected increase in market values. To avoid setting a precedence for acquisition of
property prior to establishment of a housing program, Mark Ruff suggested the BRA
purchase outright the Front Street parcel. Members agreed it was good social business to
assist Mr. Reed in fmding an alternate lot and asked Mr. Reed what he considered a fair
price for the Front Street lot including his time and investment. Reed responded $30,000.
Brad Barger made a motion authorizing the HRA to acquire the 220 Front Street property
outright for a sum of$30,000 and in good faith assist Mr. Reed in finding an alternate site.
The $30,000 purchase price expended from the TIF Surplus Fund. Steve Andrews
seconded the motion and with no further discussion, the motion passed unanimously.
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HRA MINUTES
DECEMBER 4, 1996
5. CONSIDERATION OF A PRESENTATION ON HOUSING REDEVELOPMENT
PROGRAMS BY MARK RUFF.
O'Neill reported as of September 1996, the City of Monticello had approximately 115
new home starts and according to the certificate of real estate the average home sale is
$107,900. Additionally, O'Neill noted a housing program in St. Louis Park where homes
under code must be brought up to code prior to selling.
Mark Ruff, Ehlers and Associates, Inc., distributed two handouts to those in attendance:
An outline of Housing Finance Programs and the Proforma Analysis of 1997 TIF
Estimates. Following the outline, Mark expanded on the Richfield program for single
family housing. They established guidelines which included no income levels, placed a
minimum value for new home construction, and developed architectural standards, a
developer's list, and a seller must approach the city policy. Generally, the City purchases
a home for around $50,000-$60,000 and after demolition sells the lot for $35,000 or
more. The net present value (NPV) does not cashflow; however, over time is the benefit
seen. It is not uncommon to combine two lots. St. Hilaire felt the value of the new homes
should range between $120,000 to $150,000. Mark recommended the HRA visit other
cities to see completed projects and inquire of marketing strategies, etc. Mayor-elect Fair
inquired to the need for an inventory of rental and older homes and the age of the
population. St. Hilaire felt the community needed high market value housing (rental and
owner-occupied) for seniors. Barger recalled the two major objectives identified at the
workshop for updating the comprehensive plan as up-scale housing and higher wage
paying jobs. Mayor-elect Fair saw a need for independent high-scale, high-density, co-op
housing. HRA members recommended obtaining from the County a printout list of single
residential properties within the City with EMV of less than $60,000 and greater than
$120,000. Secondly, the recommendation was to arrange a visit to Richfield to see results
of the completed housing programs and to hear how it works. Visit after the first ofthe
year.
6.
CONSIDERATION OF AN UPDATE ON THE TIF PROFORMA.
Mark estimated the annual net expected increment from all TIF District as $137,742 and
the expected HACA Penalty as $39,497. Anticipated cash surplus for 1997 is about
$100,000 minus the $30,000 for the Front Street property results in a cash balance of
$70,000. Using the net expected increment of $137,742 for 1997, the cumulative cash
surplus is $364,500. Mark again noted the need to obligate surplus dollars because State
Legislators may propose changes which could further restrict the use ofTIF surplus
dollars.
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BRA MINUTES
DECEMBER 4, 1996
Chairperson Larson reminded members of the MCP annual meeting on January 8 at the
Senior High Auditorium and noted Workshop IV would include fmancing options for
implementation of the Downtown/Riverfront Revitalization Plan.
7. CONSIDERATION TO APPROVE THE CERTIFICATE OF COMPLETION FOR
VECTOR TOOL & MFG. me.
Koropchak noted that Vector Tool satisfied the job and wage requirement one-year ahead
of schedule and exceeded the weighted average wage requirement. Additionally, she
noted the building official has not issued an occupancy permit because the facility lacks the
installation of a mechanical unit. Brad informed members the issue is being resolved as the
State requires certification by an electrical engineer and not certification by a mechanical
engineer. AI Larson made a motion to approve the Certificate of Completion for Vector
Tool & Mfg, Inc. Roger Carlson seconded the motion and with no further discussion, the
motion passed 4-0-1. Yeas: Larson, Carlson, St. Hilaire, and Andrews. Nays: None.
Abstention: Barger. The voting members considered the mechanical unit as an accessory
to the minimum improvements (construction of the 15,000 sq ft manufacturing facility.)
8.
CONSIDERATION OF UPDATES:
a - f) BRA members accepted the written updates as submitted with the agenda.
g) Relating to the proposed improvements to the Site Development Process, Barger
suggested state and city codes be identified at staff level and that other cities be contacted
for development of a competitive site development process.
9. OTHER BUSINESS:
a)
The January 1 BRA meeting was canceled and to be rescheduled upon need.
Barger out-of-town beginning January 13 for two weeks.
Monthly bills from Kennedy & Graven and Ehlers were ok'd.
Tom St. Hilaire submitted a letter ofresignation terminating his position on the
HRA. Chairperson Larson read the letter and acknowledged an appreciation of
Tom's input and contribution to the community as a commissioner. St. Hilaire
agreed to a resignation date effective April 1, 1997. Al Larson made a motion to
accept the letter of resignation. Seconded by Brad Barger and with no further
discussion, the motion passed 4-0-1. Yeas: Larson, Barger, Carlson, and
Andrews. Nays: None. Abstention: St. Hilaire. HRA members noted the
importance of replacing St. Hilaire with an individual who has skills in the area of
of financing or is a numbers person. This to maintain a good balance of skills
among the commissioners of the HRA.
b)
c)
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HRA MINUTES
DECEMBER 4, 1996
d) Brad Barger made a motion appointing AI Larson as the HRA representative to
the board of directors of the Monticello Community Partner for a term of three
years. Tom St. Hilaire seconded the motion and with no further discussion, the
motion passed 4-0-1. Yeas. Barger, St. Hilaire, Carlson, and Andrews. Nays:
None. Abstention: Larson.
e} Brad Barger made a motion to approve payment of the Hoisington Koegler
November 18, 1996 invoice in the amount of$13,914.83 for completion of Task
3: Explore What Is Possible. Motion subject to approval ofthe MCP for
satisfaction of work completed. Steve Andrews seconded the motion and with no
further discussion, the motion passed 4-0-1. Yeas: Barger, Andrews, St. Hilaire,
and Carlson. Nays: None. Abstention: Larson.
to. ADJOURNMENT.
The HRA meeting adjourned at 10:00 p.m.
\)L ~d[. ~S--
Ollie Koropchak
Executive Director
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