HRA Minutes 03-05-1997
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, March 5, 1997 - 7:00 p.m.
City Hall
MEMBERS PRESENT:
Vice Chairperson Brad Barger, Tom St. Hilaire, Steve Andrews,
and Darrin Lahr.
MEMBER ABSENT:
Dan Frie
COUNCIL LIAISON PRESENT: Roger Carlson (tardy)
GUESTS PRESENT: Mark Ruff, Ehlers and Associates
Steve Bubul, Kennedy & Graven
Bob Murray, HRA commissioner-elect
Bill Grassel, Domino's Pizza
1. Call to order.
Vice Chairperson Barger called the HRA meeting to order at 7 :00 p.m.
2.
Consideration to approve the February 5 and February 19 r 1997 HRA minutes.
Tom St. Hilaire made a motion to approve the February 5 and February 19, 1997 HRA
minutes. Seconded by Steve Andrews and with no corrections and additions, the HRA
minutes were approved as written.
3.
Consideration to adopt a resolution modifYing the Plan for Central Monticello
Redevelopment Project No 1; modi(ying the Plan for TIF District No. 1-17: and
establishing TIF District No. 1-22 and adopting the plan relating thereto.
Mark Ruff informed the BRA members that modification or establishment of a TIF
District gives the HRA the legal authority to collect the tax increment within the
geographic boundary ofthat district. Additionally, beginning in 1990, the Legislators
placed a penalty on new TIF District created. The penalty to the city amounts to
approximately 35% of the tax increment of a district. In 1995, Legislators passed a bill
which allows for an alternative, a city or HRA can make a local contribution match. By
making the local match of 5% or 10% of the tax increment, the city is exempt from the
penalty.
HRA members discussed the penaltyllocal match, the "but for"test, and the fmdings for
the "blight" criteria requirement as substantiated by the Chief Building Official.
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HRA MINUTES
MARCH 5,1997
HRA members agreed to approve the modification of the plan for TIF District No. 1-17 if
the developer submitted evidence satisfying the "but for" test. Approximately $23,000 of
additional annual tax capacity wi11 be captured from the 20,000 sq ft manufacturing
expansion proposed by Fay-Mar. The company projects an increase of20 new employees
at an average wage of$8.50 ph. Commissioner Andrews felt the average wage-level of
the new employees was not good enough to warrant additional TIP assistance. Others felt
the proposed wages met the "liveable" wage standard. Members agreed the wage-level
issue should be considered with the re-assessment ofthe TIF Policies.
The HRA members agreed to transfer the annual HACA Penalty from the TIF Surplus
Fund to the city. The estimated penalty is an annual increase of up to $14,000 due to the
expansion. It appears the additional increment is sufficient to assist the developer with an
additional $60,000 for site improvement costs. The $60,000 pay-as-you-go method at 7%
would be payable after retiring the original HRA debt of$50,000. However, no level of
TIP assistance was approved by the HRA.
Although the city, not the HRA, approves the findings satisfying the "blight criteria"
requirement for establishment of a redevelopment district, HRA reviewed the fmdings by
the Building Official for establishment ofTIF District No. 1-22. HRA members noted the
valuation of the 12 permits issued within the proposed redevelopment district totaled only
$59,500 since June 1995. In good faith judgement, the HRA found the findings by the
Chief Building Official to satisfy the "blight" criteria requirements.
The "but for" test applies to the whole district, not by parcels. HRA members felt the "but
for" test was obvious due to the fmdings by the Building Official.
Given the size of the district, did the HRA feel comfortable? St. Hilaire felt the proposed
geographic boundaries for District No. 1-22 should be enlarged. Mark Ruff informed
members the boundary was determined after an area survey by he and Koropchak,
consideration of the study area of Hoisington Redevelopment/Riverfront Plan, likelihood
of potential development or redevelopment within the next five years, and the ability to
share increment within the district for redevelopment. Proposed redevelopment activity
within the district is the riverfront, Walnut, Broadway, and Mall redevelopments.
The local contribution match of 5% for a redevelopment district can be made from the
City or HRA general fund. The local match is 5% ofthe annual tax increment. Because
the HRA general fund is supplemented predominantly through a small levy approved by
the City Council and because the match cannot be made from TIP surplus dollars, the
HRA requested the Council consider contributing the 5% local match.
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HRA MINUTES
MARCH 5,1997
Tom St. Hilaire made a motion to adopt the resolution modifying the plan for Central
Monticello Redevelopment Project No.1; modifying the plan for TIF District No. 1-17,
and establishing TIF District No. 1-22 and adopting the plan relating thereto.
Modification ofthe plan for TIF District No. 1-17 was subject to submittal of evidence
satisfying the "but for" test. Darrin Lahr seconded the motion and with no further
discussion, the motion passed 3-1. Yeas: St. Hilaire, Lahr, and Barger. Nays: Andrews.
Absent: Dan Frie. Andrews opposed modification of the TIP District No. 1-17 because of
the projected wage-level of the new jobs, he did not oppose the establishment of District
No. 1-22.
4. Consideration to determine level of assistance for modification ofthe Contract for Private
Redevelopment between the BRA and Ronald S. Musich.
Tabled.
5.
Consideration to review for endorsement a fee increase for Ehlers and Associates.
Mark Ruff addressed the HRA concern of the 12.5% increase in the hourly rate from $105
to $120. Ehlers' increase from $90 to $105 was seven years ago and Ehlers began
working with the Monticello HRA about one and one-half years ago. Ehlers prefers and
generally works without a contract. Because of the level of activity in Monticello and the
recent date of Monticello as a new client, Ehlers retracted the immediate request for a fee
increase and will resubmit the request in one to two years.
6.
Consideration to discuss the future redevelopment ofthe Cohen and Fluth parcels.
Bill Grassel, Domino's Pizza, informed HRA members of his purchase option with Vie
Cohen to purchase the site after demolition ofthe burned structure. Grassel secured the
option because he wants his business to stay downtown. Currently, he leases from Dr.
Carty and the 5-year lease is up for renewal in July, 1997. The purchase option serves as
an alterative. HRA members asked ifhe could provide a service of selling pizza by
individual pieces in a small indoor/outdoor restaurant atmosphere. Grassel responded
Domino's contract is no restaurant business, only carry-out and delivery. The company's
concern is parking requirements for restaurants. Members asked if Grassel could
approach company headquarters with a special request on behalf of the HRA and Mep?
Grassel was unfamiliar with the use ofTIF and was uncertain ifhe would own or lease a
newly constructed facility. HRA members suggested he meet with a lender to determine
his ability to own or lease. Members encouraged Grassel's business to stay downtown
and the HRA was open to further discuss a possible swap ofthe Cohen and HRA
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HRA MINUTES
MARCH 5,1997
Broadway parcels or perhaps other assistance after Mr. Grassel has met with a lender.
The potential project supports the redevelopment concept ofthe downtown/riverfront
1udy.
7. Consideration to discuss acquisition of the parcel located at 218 Front Street and potential
authorization thereof.
Given a willing seller and the 218 Front Street property unoccupied and somewhat
deteriorated, HRA members were interested in exploring the acquisition ofthe parcel for
future redevelopment. The 1996 Tax Book EMV for the parcel and structure is $65,900;
however, Carlson felt the property would appraise at less than the EMV. Additionally,
Carlson informed members the comer property to the immediate east of 218 Front Street
is also unoccupied. The contact person would be Larry Schlief. Steve Andrews made a
motion authorizing an appraisal ofthe 218 Front Street property and an appraisal ofthe
corner property to the immediate east of 218 Front Street. Tom St. Hilaire seconded the
motion. Deb Otten and Larry Schlief to be contacted prior to appraisal for right to enter
property. With no further discussion, the motion passed unanimously.
8.
Consideration to approve modification of the Contract for Private Redevelopment
between the HRA and T.J. Martin, Inc.
Brad Barger made a motion to amend the Contract for Private Redevelopment between
the BRA amd TJ. Martin, Inc. The amendment as follows: Disbursement of the land
acquisition costs ($29,098) at 30% completion of the minimum improvement upon receipt
of evidence and signed by its duly authorized representative and site improvement costs
($8,802) disbursed upon completion and evidence of payment. Construction
commencement date amended from April 1, 1997 to May 1, 1997 and completion date
amended from September 1,1997 to October 1,1997. Steve Andrews seconded the
motion and with no further discussion, the motion passed unanimously.
9.
Other Business:
a) Brad Barger made a motion to approve the HRA monthly bills. Darrin Lahr
seconded the motion and with no further discussion, the motion passed
unanimously.
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HRA MINUTES
MARCH 5, 1997
10. Adjournment.
The BRA meeting adjourned at 9:20 p.m.
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Ollie Koropchak, Executive Director
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