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HRA Agenda 01-07-1998 . . . AGEND MONTICELLO HOUSING & RED VELOPMENT AUTHORITY Wednesday, January 7 1998 - 7:00 p.m. City H II MEMBERS: Chair Brad Barger, Vice Chair Steve Andrews, Darrin Lahr, Bob Murray, and Dan Frie. COUNCIL LIAISON: Roger Carlson. STAFF: Rick Wolfsteller, Jeff O'Neill, and E ecutive Director Ollie Koropchak. GUESTS: Barry Fluth, Monticello Mall Brad Johnson, Lotus Realty Service , Inc. Irwin Hawkins Kacey Kjellberg, MN Northland Re ty Mark Ruff and Rusty Fifield, Ehlers Associates, Inc. Dan Greensweig, Kennedy & Grav ,BRA Attorney Charles Malkerson, Community Ca ital 1. CALL TO ORDER. 2. CONSIDERATION TO APPROVE THE ECEMBER 3 AND DECEMBER 10, 1997 BRA MINUTES. 3. CONSIDERATION OF ADDING ITEMS TO THE AGENDA. 4. CONSIDERATION TO ACCEPT THE P RCHASE AGREEMENT BETWEEN THE HRA AND IRWIN HAWKINS, 225 WES RIVER STREET. 6. 5. CONSIDERATION TO APPROVE THE RIV ATE REDEVELOPMENT CONTRACT BETWEEN THE BRA AND BBF, INC. CONSIDERATION OF AN UPDATE GUARD/COMMUNITY CENTER. ( Andrews) LATING TO THE PROPOSED NATIONAL representative, Rusty Fifield,and Steve 7. CONSIDERATION TO APPROVE THE PRELIMINARY DEVELOPMENT AGREEMENT BETWEEN THE BRA, ITY, AND MINNESOTA STATE ARMORY BUILDING COMMISSION. (Attorney an Greensweig) 8. CONSIDERATION TO HEAR A SECO D PROPOSAL FOR DEVELOPMENT OF AFFORDABLE HOUSING UTILIZING TAX CREDITS. . . . HRA AGENDA JANUARY 7, 1998 PAGE 2 9. CONSIDERATION TO REVIEW THE RE RNED REQUEST FOR PROPOSALS AND APPRAISAL FOR OUTLOT A, CO RY CLUB MANOR FOR RECOMMENDATION. 12. OTHER BUSINESS. a) Annual Appointment ofHRA Co 10. CONSIDERATION TO AUTHORIZE PA MENT OF THE HRA MONTHLY BILLS. 11. CONSIDERATION OF EXECUTIVE DI CTOR'S REPORT. 13. ADJOURNMENT. . . . MlNU. S MONTICELLO HOUSING & RE EVELOPMENT AUmORITY Wednesday, December 10,1997 -7:00 p.m. City all MEMBERS PRESENT: Chair Brad Barger, ice Chair Steve Andrews, Darrin Lahr, Bob Murray, and Dan F . . COUNCIL LIAISON: Roger Carlson. STAFF PRESENT: -RickW.olfstellef, Jetf-O' GUESTS: Attorney Steve Bubul, Kennedy & Mark Ruff, Ehlers & Associates Barry Pluth, M.onticello .Mall Brad Jo~on, Lotus Realty Servic s Joan Ahrens, Real Estate Manager f SuperValu 1. Call 19 Order. Chair Barger called the BRA meeting to 0 der at 7:05 p.rn. 2. J Not submitted for approval. 3. 1= Koropchak requested adding an agenda it m: Permission to use the lIRA Lot on West Broadway, Item No. 7d. 4. Brad Johnson representing .owner Barry th introduced Joan Ahrens, Real Estate Manager for SuperValu. Since the HRA d questions relating to "community involvement", Johnson felt Joan was the st person to answer those questions. Secondly, Johnson informed members that Barry co tinues to work on tenant relocation. Joan Ahrens told members that Cub takes pride in their involvement within the community. She verbally presented a list rCub's communityattnbutes and submitted the . '. . HRA MINUTES DECEMBER 10, 1997 list to the Executive Director. Generally, th store manager, not the foundation, has the discretion to respond to local fundraisers. ub's decision to locate in Monticello results because no store exists between S1. Cloud d Maple Grove, shoppers are going outside the area for groceries, community benefits, d request from individuals within the community. Also, through a market analysi the community appears staple and growing with easy accessibility to 1-94. Cub services will include a deli, pharmacy, and bank:; however, the structure will have no video 0 card areas. She ended stating "Cub works with communities relating to design". Barry reported tenant relocation is in proces and some progress is being made. Barry reviewed a tenant list stating most would re cate downtown, perhaps Hallmark and Wright Way will remain at the mall, not sur about the Skillet, and not much information from the dance studio. Barry hopes to have the tenants relocated for project starting in March. Johnson reiterated the request for $ 00,000 with the major expense being relocation costs. Harder numbers will be fo coming to the HRA. HRA members received a copy of the letter om Ken Maus relating to TIP assistance for the Monticello Mall. This mailed as suppoing data to the agenda supplement. Barb Esse, MCP Chairperson, felt the redev lopment of the mall would serve as a southern gateway to pull people into the co unity. She stated that the MCP did not solicit Cub Foods. However, in asking the uestion, "Could any other business better fit the plan? She believed "not" and acknowle ged the emotional concern for the local grocer and tenants proposed for relocation. She noted the MCP is willing to work with Cub Foods and the developer to assist with elocation of the displaced tenants. The biggest impact Elk River has seen since the . g of the Cub store, is that Cub serves as a selling card to other developers. Esse's 0, y question was "how good of a citizen is Cub?" and that question was previously ered. Mark Ruff explained his December 5 letter sing three approaches to qualify the '"but for" test. The test being the redevelopment of e mall would occur solely on private dollars without public assistance. There is a need fi r TIP but how much is the question continued Ruff. First approach - Lease rates of $7.25 er sq ft for the grocery store and $12 per sq ft for the smaller tenants appear within the ket and expected sales. Second approach - Demolition, tenant relocation, and site impr vement costs are all eligible TIP expenditures. Although the costs are estimates at this tim and are subject to change, Ruff felt the site improvement costs of $200,000 were diffic t to justify as the current value of the site includes site improvements. Therefore until such time evidence is provided, Ruff suggested TIP assistance in the amount of$ 00,000 for demolition and relocation costs. These estimated costs appear reasonable. . d approach - The rate of return to the developer is estimated at 15%, typical for r al estate, assuming the value of the parcel 2 . . . HRA MINUTES DECEMBER 10, 1997 prior to demolition is $1,070,000. Currenty, the county assessor has the parcel valued at $800,000. Administrator Wolfsteller rec d when the mall was valued at two million. Utilizing a value of$1,070,000 less the out tanding debt of $350,000 leaves $720,000. Assuming an annual TIF assistance of$45, 00 at 7.5% over 20 years plus an annual cash flow of$63,000, an equity requirement of 720,000 is needed for a rate of return of 15% continued Ruff. The real question: "Does e lIRA believe the value of the mall parcel prior to demolition is $1,070,0001" Based on the County Assessor's value of$ 2.85 per sq ft or $3,000,000; the estimated annual tax increment would be approximat ly $90,000. Ruffrecommends the 50/50% split with the BRA receiving the first $45, for other district redevelopment costs and the second $45,000 to the redeveloper. Pr viously, the City Council agreed to ~e the annual local contribution for the district w 'ch is estimated at $4,500 annually for redevelopment of the mall. Steve Andrews made a motion authorizing consultants to prepare a draft copy of the Private Redevelopment Contract between e HRA and BBF, Inc. for approval by the lIRA on January 7, 1998. TIF assistance', an amount not-to-exceed $400,000 pay-as- you-go for demolition and tenant relocatio costs associated with the redevelopment of the Monticello Mall. Details of the doc t to be negotiated by the consultants and the Executive Director. Other conditions ofth documents but not-limited-to for consideration: Final site improvement cost in 30-days; lease signed between BBF, Inc. and SuperValu (Cub Foods, Inc.); line-it relocation costs; indemnifY agreement from redeveloper and a relocation waiver fr-ome ch tenant. Bob MWTay seconded the motion. The motion was subject to execution ofth TIF Preliminary Agreement and receipt of $5,000 cashier check. With no further dis , ssion, the motion passed nmmimously. Pluth informed HRA members he may approach e HRA as a separate issue to request additional assistance to purchase property r relocation of tenants. 5. HRA members reviewed the c-orrected ap aisal for -outl-ot A, the corrected appraised value was $171,000 for 16.7 acres. The D cember 3 appraisal was $204,000 for 20 acres. HRA members questioned as to the num of returned RFPs for the development of Outlot A. The RFP was mailed in search 0 the highest and best use of the property as moderate-high density residential. Korope' responded the RFPs are due December 12, 4:30 p.rn.. Members noted affordable hous' g using tax credits require a noise test and the need for a berm. For conventional financin , a noise test is not required. 3 . . . HRA MINUTES DECEMBER 10, 1997 HRA members mentioned the inconsistenc ofthe $8-$12 average wage-level and the desired $150,000 home values. Frie remin ed members that Mayor Fair approached him with the need for affordable housing as a eans of available housing for the employees of industries and to place Outlot A back on e tax roll. Frie believes the City should develop the parcel and not be land specula ors. Wolfsteller informed members that the City Council turned down an offer ofappr ximately $225,000 three years ago. Plus the City receives annual billboard lease reven s of $10,-000. Brad Barger made a motion to table any action until the January 7, 1998 eeting for review of the returned RFPs. Darrin Lahr seconded the motion and with no er discussion, the motion passed ~manimously. 6. Chair Barger informed member IDC Chair us contacted him regarding the potential of a joint meeting as the HRA and IDC appe to have similar goals: Purchase of land for future industrial use and development of a ketmg -pr-ogram. Darrin Lahr made a motion accepting the invitation and direct' g staff along with the IDC to determine a date for an evening meeting with the agenda . ed one-week in advance of the meeting date. Steve Andrews seconded the motion and ..th no further discussion, the motion passed unanimously. Murray will be out-of-town ecember 19 to the 30. Other Business. a. and b.) Accepted. c.) NG/Comm1lnityCenter Update - HRACommunity,C-enter Representative Steve Andrews reported on the December 5 tour to Maplewood, Shoreview, North St. Paul, Rosemount, and Chaska. Andrews sees Lease Revenue Bonds which has a higher impact on businesses as a stop-gap: A me to finance the core facility utilizing the 1.5 million NG dollars and perhaps the additio of a sales tax. It is proposed the core facility will not include ice but perhaps an aquatic enter as a family attraction. Barger questioned the duplication of uses and membership pr vided by the school and the health club. Koropchak noted the aquatic center may t include a lap pool but consist of a leisure pool only for use by all ages. Additionally the multi-use of the core facility could be used for walk-in basketball and volleyball rather than scheduled games. 7. The MCP represents community involve t but has not voted on the community center reported Lahr. If the proposed cost inclu g an aquatic center is seven to ten million without operations: How far is one willing to drive? Becker is ten miles. Could the lIRA ask for an advisory vote? Two questions sked the most of some HRA members: The city purchased land adjoining the city hall som years ago for future expansion of the city hall at the current site. Why not expand as p ed? Or what happened to that plan? Secondly, if the city hall was not included, hat would be in the community center? Or if the project is estimated at $6 million and e NG contributes $1.5 million and the city hall 4 . . . HRA MINUTES DECEMBER 10, 1997 $800,000 (not land), what is the $4 millio for? Wolfsteller estimated to expand the city hall on the current site would costs about 400,000. Andrews said the proposed NG/city hallIcommunity center is consistent with Revitalization Plan and the City Council's direction to the HRA was to issue Leaseevenue Bonds for the core facility. The bonds are a City levy and only the HRA name is sed. Some members questioned the lIRA's responsibility to citizens. Estimated costs f 6 million for NG/city hall/community center and 7 to 10 million with aquatic center. B ger would prefer seeing the greater impact on his home than his business. HRA member agreed and recommended that Andrews advise the Community Center Task Force of the oncerns of the lIRA at the upcoming task force meeting prior to the next HRA meeting. e community presentation is scheduled for January 20. d) lIRA West Broadway Lot - Dan Frie de a motion allowing the MCP to utilize the HRA lot described as Lots 7 and 8 except or ..., Block 52, at no liability to the lIRA. Brad Barger seconded the motion and wi . no further discussion, the motion passed llmmlmously. 8. Ad1ournment. ~ The lIRA special meeting adjourned at 9:10 p.rn. C)~ KO\.~~ Ollie Koropchak, Executive Director 5 . . . CUB FOODS STORE CO MUNITY ATTRIBUTES Campbell Soup's Label for Education program (g nerates huge amounts) DARE program in partnership with schools and I cal police departments. Contributes to school's graduation lock-in parties Donates to elementary and secondary schools Supports fundraising events by donating brats & ot dogs for sale at stands outside the Cub Food store Generally, the store manager joins the chamber 0 commerce and becomes active in the community. We plan to have our store manager r side in the Monticello community. All our division stores are members of the Minnesota Gro ers Association (MGA) and the Minnesota Retail Merchants Association (MRMA). Store Managers participate in "Career Days" and eceive requests from local schools or groups to tour a store or speak about the grocery industry. In excess of 75% of employees would be local res dents. Cub will create opportunities for advancement. Usually Cub becomes one ofthe I est employers in the community. Cub strives to contract with local providers of mai tenance services, i.e., lot sweeping, snow plowing, electrical repair, etc. Supports Boy Scout and Girl Scout programs On a local level, community dollars, employing s nior citizens, church groups, sport teams, veterans to help bag groceries "bagging for tips", ing Christmas carols, etc., for a donation to the group, and food bins for the local food shelves, ar just a few of the activities the stores participate in. Store managers can use their own iscretion when approached by local fundraising groups. Large donation requests are required to go throug our Minnesota Division Donation Committee for their review. Our division stores support vario s charitable groups listed below by hosting many fund raising events. United Way, March of Dimes, Cystic Fibr sis, Big Brother/Big Sister organizations, American Cancer Society, Walk for Anim Is, Special Olympics, MS Society, Children's Heartlink, Toys for Tots, St. Paul Winter arnival, Crusade against Hunger, Salvation Army, Flood Relief, Leukemia Society, erican Heart Society, University Children's Foundation. --- -...... . . Office Copy WHITE C stomer Copy GREEN - D~posit Copy PINK- . "'%j o ""I ~ ~ .... <: ~ a. I: ~. ~ I. \! \: \ t I I \ I i I I ! 'I . CJ to-'. \ (""t-- ! 3: N ~ \ o V> ::s ""00 0 g., tT'l ~ fr.9~ ~ OO,'l'" ~ .Oo:lO 3::'<(3 loot Z-~ joooI' !. - 0. (""t-- I,'. . ""':=; to-'. ~-.l~ n I ~ '< ('t) N ~ i o r ~ I I I Z -:> I \'. . , \ t'-'I N! w~ 00 I t'-'l I I I _, . .,_,~~~"..._.....o.J..~__ . . . . MINU ES MONTICELLO HOUSING AND DEVELOPMENT AUTHORITY Wednesday, Decembe 3, 1997 - 7:00 p.m. City aU MEMBERS PRESENT: Vice Chair Steve drews, Darrin LaM, Bob Murray, and Dan Frie. MEMBERS ABSENT: Chair Brad Barger. COUNCIL LIAISON PRESENT: Roger Carls n. STAFF PRESENT: Rick Wolfsteller and Ollie oropchak. GUESTS: Mayor Bill Fair Brad Johnson, Lotus Realty Servic s Barry Fluth, Monticello Mall Mark Ruff, Ehlers & Associates Steve Johnson, Monticello Ford/M cury Ken Maus, AI Larson, Dan Goman and David Bell. 1. Call to Order. Vice Chair Andrews called the BRA meet" g to order at 7:00 p.rn. 2. Dan Frie asked if the motion by Lahr on p ge 3., agenda item 4., was recorded correctly or was the motion to go out for RFPs to . elude or target affordable housing development. Other members felt the min tes as written, correctly recorded the motion. Lahr requested a correction to the minutes on page 3, agenda item 5., third line from the bottom. Correction to read "The would like the entire TIF monies." Dan Frie made a motion to approve the Nove 5, 1997 HRA minutes with the above stated correction. Bob Murray seconded the mo ion and with no further corrections or additions, the amended minutes were appr ved. 3. No items were added to the agenda. 1 . . . HRA MINUTES DECEMBER 3, 1997 4. Koropchak reported Chuck Risenberg of ommunity Capita4 a development organization, was unable to secure options on parcels w . ch were suggested by city staff as the best use for development of affordable housing. C ently, the developer is exploring other site options. Mr. Risenberg requested their pr sentation be tabled to the January HRA meeting. Bob Murray made a motion to ta Ie the presentation by Community Capital for development of affordable housing utilizin tax credits until the January 7 meeting of the HRA. Darrin Lahr seconded the motion d with no further discussion, the motion passed unanimously. 5. Brad Johnson representing Monticello M owners Barry and Barbara Fluth, informed HRA members that the owners. plan to de olish the existing Monticello Mall structure and construct a new facility to lease to Cu Foods, Inc. liRA members received a written request for $600,000 ofTIF assistance for osts associated with demolition, relocation of tenants, and site improvements. Redevelo ment of the mall is consistent with the downtown/riverfront revitalization plan, . encourage other spin-off development opportunities, and will increase the market alue of the City of Monticello continued Johnson. If the proposed tenant, Cub Foo s, does not locate in Monticello they will locate in another community. Cub's plan' to circle the twin cities, one such proposal includes development in Buffalo. The pro osed Monticello grocery store is 65,000 sq ft and will create 150 jobs. Fifty of the 150 j bs will be full-time with wages ranging between $8.00 to $12.00 per hour plus fits. The proposed tenant supports a community through community sponsorshi s. Currently, negotiations between Fluth and Cub Foods and between Fluth and the CUff t mall tenants is underway. The proposed tenant wishes to occupy the facility in fall f 1998; therefore, construction is anticipated to begin in March 1998. The proposed groc store will be a corporate store. The proposed project includes 5,000 sq ft f other retail space in addition to the 65,000 sq ft. of grocery space. The proposed grocery store will be a full Cub operation and includes a bank, pharmacy, etc. Mr. Johnson report Cub controls the cost or rent expense and felt the $600,000 TIF assistance or one- the TIF was a reasonable request from the owner. He expects the preliminary lease a eement with Cub to be completed December 19. It is anticipated that two existing te s will occupy the 5,000 sq ft and the other tenants will relocate in the downtown area esulting in no loss of businesses. 2 . i. . HRA MINUTES DECEMBER 3, 1997 HRA members asked if the requested $600 000 was a level playing-field and how the amount of the request was determined. M k Ruffresponded that Koropchak checked with the Wright County Assessor who sug ested a $42.86 per sq ft value by using the comparative approach. The existing Maus tructure is valued at $42.09 per sq ft and the existing mall is valued a $11.48 per sq ft. . Johnson assumed the income approach as used in Elk River and other metro areas us' g $60.00 per sq ft resulting in approximately 50% ofthe tax increment or $600,000 of a sistance over time. Mark suggested an Assessment Agreement as one-way to mak this work assuming the County Assessor would sign-off at $60.00 per sq ft. Brad J hnson informed HRA members the purpose of redevelopment is to increase property valu s and felt if the original value was low perhaps the HRA would not maximize the full tax' crement potential. The life duration of the district is another option for the HRA to c nsider. Mark suggested the details of the TIF assistance be determined after the HRA co iders the request for TIF assistance and authorizes the lIRA consultants to further xplore the TIF options. Koropchak provided members with a copy ofthe level ofTIF assistance approved for similar projects: Lincoln Properties (K-M as tenant), Raindance Properties (Maus Foods as tenant), and Demeules Family L' . ed Partnership (Standard Iron as tenant). Ruffprovided members with TIF Cash Flo s using both a $42.86 and $60 per sq ft market value. lIRA members analyzed and evaluated the roposed mall redevelopment project against the lIRA-TIF Policies. The proposed proj ct met consideration nos. 1,2,3,5, 7 (50/50 split), and 8 (Walnut & West 7 Street) of e policies. Nos. 4 and 6 were not applicable. lIRA members questioned Mr. Johnson re ting to Cub Foods involvement in a community and requested more informatio . No.9 being an important issue to the lIRA, Mr. Johnson suggested a Super Value rep sentative be present at the next lIRA meeting; however, he noted the TIF assistance requ st is from the developer/owner of the mall, Barry Fluth, and not from the proposed te t, Cub Foods. Koropchak requested the developer/own provide the lIRA with. written evidence satistying the "but for" test, an updated pr forma, a line-item request of the $600,000, and a list of the tenants with relocation destina ions. Lahr expressed interest in redevelopment fthe south anchor; however, he was not interested in the lIRA buying the anchor. e asked if the developer could show the cost to develop on raw land compared to the c st for redevelopment of the mall. Johnson indicated because the proposed project ha only one or two small tenants, the profit margin to the owner is less. 3 . HRA MINlITES DECEMBER 3, 1997 HRA members recognized the proposed te t, Cub Foods, Inc., has other options. Monticello options: The mall site or sites so th of the interstate with the potential of other strip mall tenants. Or other communities: B ffalo, Albertville, or Rogers. Members agreed the proposed redevelopment project and site was consistent with the TIF Redevelopment District Plan, City Compre nsive Plan, andMCP Revitalization Plan and provides opportunity for other spin-offbus. ess. Johnson indicated the proposed tenant is interested in Monticello because of the gr wth and transportation system. Cub looks at the trade area not the community size. Vic Chair Andrews asked if anyone in the audience had questions or would like to e comments. Being none, the commissioners proceeded. Because the proposed mall redevelopment oject and site is consistent with the above named Plans, the TIF Policies, increases the tax base, and eliminates substandard/blighted property; Bob Murray made a motion autho . . g Ehlers & Associates and Kennedy & Graven to further explore the request for assistance and called for a special meeting of the HRA on December 10, 1997, 7:00 p.m. The motion was subject to receiving a cashier check in the amount of$5,000 from the dev loper and a list of the existing mall tenants with proposed relocation destinations. Dan Frie seconded the motion and with no further discussion, the motion passed lJDanlmously. ). 6. n With the completion of the 9,000 sq ft man acturingloffice facility (minimum improvements), Damn Lahr made a motion to approve the Certificate of Completion for Lake Tool, Inc. (T.J. Martin, Inc.fTIF Dis ct No. 1-23). Bob Murray seconded the motion and with no further discussion, the otionpassed unanlmously. 7. rmme Rod Dragsted, a local appraiser, appraised e 20-acre parcel at $204,000 or $10,200 per acre. Dan Frie thought the comparatives w e good; however, he noted the discrepancy between the 20-acre parcel of the appraisal the 16-acre parcel reference in the RFP for development of moderate-high density resi entia! housing. Bob Murray made a motion to return the appraisal to the appraiser for re' and correction. The corrected appraisal available for HRA consideration at the spe meeting of December 10 and to withhold payment of invoice no. 3103. Steve Andr s seconded the motion and with no further discussion, the motion passed unanimously. . 4 . HRA MINUTES DECEMBER 3,1997 8. With no response from the sellers, Richard d Marian Carlson; Steve Andrews made a motion to table any action until the January , 1998 BRA meeting. It was noted the use of the garage at 220 Front Street should co' cide with the life duration of the 225 Front Street purchase option. The use of the gara e means in its "as is" condition. Darrin Lahr seconded the motion and with no further di cussion, the motion passed lJJumimously. 9. With no response from the seller, Irwin Ha kins; Steve Andrews made a motion to table. any action until the January 7, 1998 BRA eeting. Darrin Lahr seconded the motion and with no further discussion, the motion pass d nmmlmously. Steve Johnson representing the Monticello ord/Mercury dealership informed BRA members that the car industry today is very focused and with the growth of the local dealership comes the need to expand on or ear the present site. He continued with a brief history of the dealership stating in 1977, L Flake relocated the dealership from its West Broadway location. Two years ago, eterson planned to remodel and expand the facility from 15,000 to 35,000 sq ft as the ealership tripled its sales of new cars out- selling three metropolitan dealers. Howev , the current site is a little less than 5 acres and a 10-acre site is ideal for expansion. e dealership has learned it wi11lose its direct access via West Oakwood Drive and High ay 25 with the new 1-94 easterly exist and enter ramps. The dealership's new access'; proposed via the alignment of proposed West Chelsea Road and Highway 25 and then' t on Sandberg Road. Lastly, the dealership was hit with two million dollars of damage 0 vehicles and property with the July 1997 storm. 10. . The dealership needs the property to the s uth for expansion and accessibility. The dealership is attempting to negotiate a land sale with the owners of the Hart Clinic building; however, the Clinic appears not' terested in a quick turn-around time continued Johnson. An appraisal of the property has en obtained. The State is negotiating with the dealership via an appraisal ofthe value [the closed access. Johnson requested the BRA serve as a facilitator to assist in ret '.' g the dealership at its present location perhaps to facilitate the procurement ofth land or utilizing its power of condemnation. . 5 . . . HRA MINUTES DECEMBER 3,1997 The dealership can grow or die continued J hnson. To grow the company options are to expand at the present site or relocate and e and elsewhere in Monticello or outside Monticello. lIRA members noted the financial standings of the dealership: Increased sales, insurance settlement for storm damage, and State sett ement for closed access. Mark Ruff informed Johnson that in order for an HRA to conde property there needs to be a public purpose or to create a Redevelopment District the operty must qualify as blighted. Neither option fit nor qualified. HRA members sug ested perhaps if another site in Monticello was found, an exchange of properties could occur. Mayor Fair suggested the EDA's revolving loan fund as another option. 11. o r ur Council Vision and Policies. Commissioners Darrin Lahr and Bob Murra informed the other commissioners that they and Koropchak met a couple oftimes to dr ft the enclosed action plan which supports the vision and policies of the Council. The p as presented is not in detailed form, this was the intent of the sub-group. In addition to e $75,000 matching fund for future industrial land, the sub-group requested of the City B dget another $30,000 for marketing and $35,000 to assist with land acquisition asso iated with the downtown revitalization plan. Final budget approval by the City Council. anticipated early December. Darrin Lahr made a motion to accept the Economic De lopment Action Plan as written and the amount of the budget request. Steve Andr s seconded the motion and with no further discussion, the motion passed unanimously. Commissioners noted the plan includes partnering with the EDA and IDC. Subject to approval of the City Council for Steve Andrews made a motion authorizing development of a marketing program for th further discussion, the motion. passed un . becoming a team member. keting funds in the amount of $30,000, oropchak select a marketing team for City. Seconded by Darrin Lahr and with no ously. Andrews expressed an interest in In the absence of Chair Barger whom IDC ir Ken Maus contacted relating to establishing a date for a joint meeting betw en the IDC and lIRA, members agreed to table any action until the special meeting of ecember 10, 1997 or the regular meeting of January 7, 1998. 6 . . . lIRA MINUTES DECEMBER 3, 1997 12. Koropchak noted the Community Center F' cing bill is an expenditure of the City. Bob Murray made a motion to approve the monthly bills. Seconded by Steve Andrews and with no discussion, the motion passed 'ous1y. 13. The commissioners accepted the Director's report and requested Andrews give a report on the tour of community centers at the ne HRA meeting. 14. Other Business. a) Special meeting of December 10, 1997, 7:00 p.m. was called. b) 401 Front Street - Although the pro y has river frontage and the price was lowed, the commissioners agreed the timing was n t right for purchase of the parcel because two parcels with structures lie between the 401 ront Street parcel and targeted Blocks 54 and 64 and with the lack of excessive HRA fun s and no foreseeable project for the parcel. HRA members agreed they were not intere ed at this time. 15. Acljournment. The HRA meeting adjourned at 9:50 p.m CJ~ \<~~9~ Ollie Koropchak, ExecUiive Director 7 . HRA AGENDA JANUARY 7,1998 4. A. Reference and Background: hwin Hawkins and Realtor Kacey Kjellberg . attend the BRA meeting and present a counter-offer or respond to the BRA offer of 50,000 "as is" for the property located at 225 West River Street. As mentioned earlier, e County Assessor's office did increase the market value oftms parcel from $49,500 ayable 1997 to $55,700 payable 1998. The BRA appraisal valued the parcel at $69,000. B. L 2. 3. . 4. 5. C. . Alternative Action~ Hold firm on the November 5, 1997 offer of $50,000 "as is". Accept the offer-counter of <<as is" . Make a counter-offer of$55,700 <<as .s", the 1998 taxable value. Void the offer as non-negotiable. Table any action. Recommendation~ Since at this time, I have no knowledge as t the amount ofthe counter-offer assuming there is a counter-offer; therefore, the reco endation is Alternative No.1 or 3. One and three appear to be within reason. D. Su,pportin~ Data: Copy ofthe Purchase Agreement. . . . \\-\C\ -'\f\ ,./.:.......\ :'< ."'"', :':'~;"): PURCHASE A REEMENT 1. PARTIES. This Purchase Agreement is made this _ day of , 1997 by and between IRWIN HAWKINS, a single per on ("Seller") and HOUSING AND REDEVEL- OPMENT AUTHORITY IN AND FOR THE CI Y OF MONTICELLO, a public body corporate and politic ("Buyer"). 2. SUBJECT PROPERTY. Seller is the wner of that certain real estate (the "Property") located at 225 West River Street, Monticello, right County, Minnesota and legally described as follows: . South 1/2 of Lots 1 and 2, Block 54, T [Note: legal subject to verification] 3. OFFER/ACCEPTANCE. In considera ion of the mutual agreements herein contained, Buyer offers and agrees to purchase and Seller agrees to sell and hereby grants to Buyer the exclusive right to purchase the Property and all improvements thereon, together with all appurtenances, including, but not limited to, g den bulbs, plants, shrubs, trees, and grass. 4. PERSONAL PROPERTY INCLUDE IN SALE. The following items of personal' property and fixtures owned by Seller and curre tly located on the Property are included in this sale: refrigerator, washer, dryer, storm windo s and inserts, storm doors, screens, awnings, window shades, blinds, curtain-traverse-drape rods, attached lighting fixtures with bulbs, plumbing fixtures, sump pumps, water heates, heating systems, built-in appliances, water softeners, garbage disposals, installed carpeting, ork benches, television antennas and hood-fans and the following personal property: . Upon delivery of the deed, Seller shall also deliver a Bill of Sale for the above personal property. 5. PURCHASE PRICE AND TERMS: A. PURCHASE PRICE: The tota Purchase Price for the real estate and personal property included m this sale is Fifty Thousand and No/I00ths Dollars ($50,000.00). B. TERMS: (1) EARNEST MONEY. Sel er acknowledges receipt of One Hundred Dollars ($100.00) as earnest mon y. (2) BALANCE DUE SELLE S. Buyer agrees to pay by check on the Closing Date any remaining Bal ce Due according to the terms of this Purchase Agreement. ASSUMPTION OF EX! TING INDEBTEDNESS. The Buyer, in its discretion and in partial ayment of the purchase price, may, to the extent assumable, assume or t e title subject to any existing indebtedness (3) CAH133353 MN195-7 ,. . . encwnbering the Property, in which case the cash to be paid at the time of closing shall be reduced b the then remaining indebtedness. (4) DEEDIMARKETABLE T TLE. Subject to performance by Buyer, Seller agrees to execute and deli er a Warranty Deed conveying marketable title to the Property to Buyer, ubject only to the following exceptions: a. Building and zonin laws, ordinances, state and federal regulations. b. Reservation of min rals or mineral rights to the State of Minnesota, if any. c. Utility and draina e easements that do not interfere with existing improvements on he Property. (5) DOCUMENTS TO BE D LIVERED AT CLOSING. In addition to the Warranty Deed required t paragraph 5B(4) above, Seller shall deliver to Buyer: c. Bill of Sale requir d at paragraph 4 above. Standard form Af Idavit of Seller. Waiver of Relocat on Benefits, as required by paragraph 14 of this Agreement. Such other docu ents as may be reasonably required by Buyer's title examiner or t tle insurance company. a. b. . d. 6. REAL ESTATE TAXES AND SPEC L ASSESSMENTS. B. Buyer and Seller shall prorate al estate taxes due and payable in the year of closing as of the Closing Date. A. Seller shall pay at or prior to cl sing all real estate taxes due and payable in the years prior to closing. C. Seller shall pay at or prior to cl sing all special assessments levied prior to the Closing Date, including any deti rred special assessments. D. Buyer shall asswne all special sessments levied after the Closing Date. . 7. MARKET ABILITY OF TITLE. The Seller, within a reasonable time after acceptance of this agreement, shall furnish Buyer with an a stract of title or registered abstract of title to the Property, certified to a current date and in luding proper searches covering bankruptcies. judgments and tax liens. Buyer shall have enty (20) days after receipt of the abstract to examine the same and to deliver written objec ions to title, if any, to Seller. Seller shall ha\'e sixty (60) days after receipt of written objectio s to cure title defects, at the Seller's cost. In the event that title to the Property cannot be mad marketable by the Seller by the Closing Date. CAR133353 MN195-7 2 . . . then, at the option of the Buyer, this Purchase A reement shall be null and void and the Earnest Money shall be refunded to the Buyer. 8. CLOSING DATE. The closing of the s Ie of the Property shall take place on or before May 1, 1998 or at such earlier or later date as ay be mutually agreed upon by the Seller and Buyer. The closing shall take place at , or such other location as mutually agreed upon by the parties. 9. POSSESSION/CONDITION OF PRO ERTY. The Seller shall deliver possession of the Property to Buyer by 4:00 p.m. on the Clos'ng Date, in the same condition as the Property existed on the date of this Purchase Agreement, easonable wear and tear excepted. Seller shall remove all debris and all personal property fro the Property prior to the date of possession. 10. DAMAGES TO REAL PROPERTY. I the Property is damaged prior to closing, Buyer may rescind this Purchase Agreement by notice t Seller within twenty-one (21) days after Seller notifies Buyer of such damage, during which 21- ay period Buyer may inspect the real property, and in the event of such rescission, Seller agr es to execute a cancellation of this Purchase Agreement and return the Earnest Money to Bu er. 11. DISCLOSURE; INDIVIDUAL SEW A E TREATMENT SYSTEM. Seller discloses that there (IS) (IS NOT) an individual sewage t eatment system on or serving the Property. If' there is an individual sewage treatment system n or serving the Property, Seller discloses that the system (IS) (IS NOT) in use, and Seller rther discloses that the type of system is a system, and Seller agre s to furnish the Buyer with a map showing the location of the system within five days of the d te of this Agreement. 12. WELL DISCLOSURE. Buyer ackno ledges receipt of a well disclosure statement, which is attached to this Purchase Agreement Exhibit A. 13. SELLER'S WARRANTIES. Seller wants that buildings, if any, are entirely within the boundary lines of the Property. Seller wants that there is a right of access to the real property from a public right-of-way. Seller wants that there has been no labor or material furnished to the Property for which payment h not been made. Seller warrants that there are no present violations of any restrictions relatin to the use or improvement of the Property. These warranties shall survive the closing of thi transaction. 14. RELOCATION BENEFITS. Seller ac owledges that this Purchase Agreement is not made under threat of acquisition by eminent do ain proceedings and that the Purchase Price is sufficient to cover Seller's relocation expenses. Seller agrees to waive any and all relocation benefits, assistance and services, related to the roperty. Seller agrees to provide to Buyer at Closing a waiver of relocation benefits executed by all owner(s) of the Property. 15. BROKER COMMISSIONS. The Selle represents and warrants that Seller's broker is of , that Seller has no other broker, and that Seller is responsible for paying y commission due to and . Buyer represe ts and warrant to Seller that there is no broker involved in this transaction with whom Buyer has negotiated or to whom Buyer has agreed to pay CAH133353 MN19S-7 3 ../ . . . a broker commission. Buyer agrees to inde ify Seller for any and all claims for brokerage commissions or fmders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Buyer, and Seller agrees to indemnify Buyer for any and all claims for brok rage conunissions or finders' fees in connection with negotiations for purchase of the Prope arising out of any alleged agreement or commitment or negotiation by Seller. 16. NO MERGER OF REPRESENTATI NS, WARRANTIES. All representations and warranties contained in this Purchase Agreeme t shall not be merged into any instruments or conveyance delivered at Closing, and the partie shall be bound accordingly. 17. ENTIRE AGREEMENT; AMENDM NTS. This Purchase Agreement constitutes the entire agreement between the parties, and no ot er agreement prior to this Purchase Agreement or contemporaneous herewith shall be effectiv except as expressly set forth or incorporated herein. Any purported amendment shall not be e fective unless it shall be set forth in writing and executed by both parties or their respective suc essors or assigns. 18. BINDING EFFECT; ASSIGNMENT. his Purchase Agreement shall be binding upon and inure to the benefit of the parties and th ir respective heirs, executors, administrators, successors and assigns. 19. NOTICE. Any notice, demand, request or other communication which mayor shall be given or served by the parties shall be deemed to have been given or served on the date the same is deposited in the United States Mail, registere or certified, postage prepaid and addressed as follows: a. If to Seller: b. If to -Buyer: Monticello RA Attn: Ollie Koropchak P. O. Box 1147 250 East Br adway Monticello, 55362 20. SPECIFIC PERFORMANCE. This P chase Agreement may be specifically enforced by the parties, provided that any action for spec fic enforcement is brought within six months after the date of the alleged breach. This paragra h is not intended to create an exclusive remedy for breach of this agreement; the parties reserve 11 other remedies available at law or in equity. CAH1333S3 MNUS -7 4 . . . IN WITNESS WHEREOF, the parties h ve executed this agreement as of the date written above. CAH133353 MN195-7 SELLER Irwin Hawkins BUYER HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO By Its Chairperson By Its Executive Director 5 ,. [mJ MINNESOTA DEP"R"MI::NT OF HEALTH WELL DISCLOSURE CERTIFICATE PLEASE TYPE OR PRh TALL INFORMATION STREET ADAESS CITY STATE ZIP CODE B. PROPERTY BUYER MAILING ADDRESS AFTER CLOSING FIRST NAME MIDDLE INITIAL LAST NAME COMPANY NAME (IF APPLICABLE) ADDRESS ADDRESS CITY STATE ZIP CODE TELEPHONE NUMBER ( ) C. CERTIFICATION BY SELLER I certify that the information provided on this certificate is accurate and com lete to the best of my knowledge. Signature of SeUer or Otsignated. Representative of SeUer Date D. CERTIFICATION BY BUYER The buyer or person authorized to act on behalf of the buyer. must sign a WI U Disclosure Certificate for aU deeds given in fulfillment of a contract for deed if there is a well on the property. In the absence of a seller's signature. the buyer. or person authorized to act n behalf of the buyer may sign this weU certificate. No signature is required by the buyer if the seUer has signed above. Based on diSClosure information provided to me by the seller or other availalle information. I certify that the information on this certificate is accurate and complete to the best of my knowledge. Signature of Buyer or Designated Representative of Buyer Date ( 'WEft .._". ...,," . rmJ MINNESOri. OEPA HMEHT OF HEALTH WELL INf ORMATION PLEASE TYPE OR PR NT ALL INFORMATION .. Fill out a separate we/~ information page if more than t !1! wells are located on the property. WELL LOCATION '1 COUNTY QUARTER SECTION NUMBER TOWNSHIP NUMBER' RANGE NUMBER WELL STATUS YEAR 'NELL WAS SEALEO III' (NOWNI WElllS: DIN USE (1) o NOT IN USE (2) o SEALED BY lICEN ED WELL CONTRACTOR (3) WELL LOCATION #2 COUNTY QUARTER SECTION NUMBER TOWNSHIP NUMBER RANGE NUMBER WEll STATUS YEAR WELL WAS SEALED (IF KNOWNl WELL IS: DIN USE (1) o NOT IN USE (2) c: SEALED BY LIGEN ED WELL CONTRACTOR (3) WELL LOCATION #3 COUNTY QUARTER SECTION NUMBER TOWNSHIP NUMBER RANGE NUMBER WELL STATUS YEAA WELL WAS SEALED (IF (NOWNI WELL IS: DIN USE (1) o NOT IN USE (2) Q SEALED BY LIGEN' ED WELL CONTRACTOR (3) I SKETCH MAP - Sketch the location of the well(s) and includ estimated distances from roads, streets, and buildings. IF MORE THAN ONE WEL.L. ON PROPERTY, USE THE WEL.L OCATlON NUMBER ABOVE TO IDENTIFY EACH WELL. I I Information provided on this form is classified as public information l nder Minnesota Statutes. Chapter 13. M:/WMGROUP/ORtGS/DtSClOSU FRM J'i/gt R . - - . - ..__._....____..__n._. . . . . . HRA AGENDA JANUARY 7,1998 5. A. Reference and Background: At the HRA meeting of December 10, the approved $400,000 ofTIF assistance to Developer Barry Fluth (BBF, Inc.) for rede elopment of the Monticello Mall. The pay-as- you-go assistance at 7.5% interest rate for emolition and relocation costs. Other terms and conditions of the contract to be det ed by the HRA consultants. Enclosed is the first draft ofthe Contract which was receiv today. At this point, I have not had the opportunity to review the contract. For yo information, ARTICLES III and IV may be of most interest to HRA members. The ot er sections are generally pretty boiler plate. Terms and conditions to consider: Capped amount ofTIF assistance - 400,000 for demolition and tenant relocation costs. Construction of 65,000 sq ft groc Commencement and completion co Executed Lease Agreement betwe Indemnification release by BBF_ Waiver by tenants. 7.5% interest rate and length of not . Pay-as-you-go upon evidence of co pletion and payment of demolition and relocation costs. Local contribution match by City_ BRA administration fee of$5,000. Commitment of lender financing. Updated proforma to satisfy "but D r" test. List oftenants for relocation and poposed destination. store and 5,000 sq ft other retail. struction dates. BBF, Inc. and Cub Foods, Inc. I have also enclosed an updated copy ofth estimated relocation costs and proposed destination oftenants. As of last week, th e were no written relocation agreements between the developer and the tenants and no executed lease agreement between the developer and Cub Foods. Lease agreem t rescheduled for January 9. A meeting has been scheduled for Wednesday, January 7, 5 :30 p.rn. at City Hall between Barry Pluth, Brad Johnson, Mark Ruff, Mayor Fair, Ri Wolfsteller, and Koropchak. Mr. Johnson suggested the meeting and my assumption . s the developer may request additional TIF assistance. I . . . HRA AGENDA JANUARY 7, 1998 B. Alternative Action: 1. Approve the Private Redevelopmen Contract between the HRA and BBF, Inc. assisting the developer with an amo t not-to-exceed $400,000 for demolition and tenant relocation costs. 2. Approve the Private Development ontract between the HRA and BBF, Inc. subject to modifications defined by he liRA. 3. Deny the approval of a Private Red velopment Contract between the HRA and BBF. 4. Table any action. C. Recommendation: Recommendation is Alternative No.1. If the developer request an additional amo t ofTIF assistance, the recommendation is to keep an open mind and to keep in mind the purpose of the district: Redevelopment of blighted or substandard properties. Certa' y, the "selling card" of a CUb Foods as tenant has an economic benefit to the developm t of Monticello. What is the best return of investment as it relates to the proposed 5050 split ofTIF? Would the HRA see a greater and faster return of investment if the split ere 60% mall redevelopment and 40% Walnut or community center redevelopment? Per ps, the ma111and value should be increased from its present value of$64,164 per acre 7.18 acres) to the asking price of surrounding raw lands of$lOO,OOO to $150,000 per a through an Assessment Agreement. Lastly, Dan Wilson, Expert on Relocation Issues, oted there is a difference between relocation costs and acquisition costs. He recommen s when public dollars are involved with relocation costs, the assistance be distribut d somewhat equal among tenants. An exception to this may be when special eq . ment or machines require dismantling, moving, and setup by specialist. Alternative NO.2 Y need to be considered. D. Supporting Data: Copy ofthe Private Redevelopment Contr ct and new estimated relocation costs. 2 Monticello HRA: 53,000. 00 Market Value on New Retail T.I.F. CASH FLC W ASSUMPTIONS 7.000% 1.12 Pay 97 Rate 0.0000% Interest Rate Tax Extension Rate: Inflation Rate: . BASE VALUE INFORMATION M rket Class \ alue Rate 8 n,400 2.7%/4.Q''Io 8 n,400 Tax Capacity 30,146 30,146 Estimated Pay 98 Tax Capacity PIN Monticello Mall Total PROJECT VAL Type of Tax Increment District: Type of Development: Number of Building Square Feet: E INFORMATION Redevelopment Retail 70,000 Estimated Market Value of New Project: Class Rate on first $150,000 of Market Value Class Rate Markel Value> $150,000 Estimated Tax Capacity: Estimated Taxes: Annual Tax Increment: Assessor's Market Value/s.f. Taxes/s.f. 3,000,000 Pay 00 2.70% 4.00% 118,050 Pay 00 132,216 98,452 $42.86 $1-89 TAX INCREM NT CASH FLOW ----, I PERIOD ENDING J Yrs. Mth. Yr. 0.5 08-01 1998 I 1.0 02-01 1999 I 1.5 08-01 1999 I 2.0 02-01 2000 2.5 08-01 2000 I 3.0 02-01 2001 3.5 08-01 2001 4.0 02-01 2002 4.5 08-01 2002 5.0 02-01 2003 5.5 08-01 2003 6.0 02-01 2004 6.5 08-01 2004 7.0 02-01 2005 7.5 08-01 2005 8.0 02-01 2006 8.5 08-01 2006 9.0 02-01 2007 9.5 08-01 2007 10.0 02-01 2008 10.5 08-01 2008 11.0 02-01 2009 11.5 08-01 2009 12.0 02-01 2010 12.5 08-01 2010 13.0 02-01 2011 13.5 08-01 2011 14.0 02-01 2012 14.5 08-01 2012 15.0 02-01 2013 15.5 08-01 2013 16.0 02-01 2014 16.5 08-01 2014 17.0 02-01 2015 Captured Semi-Annual Tax Gross Tax Capacity Increment o 0 o o o 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 49,226 1,476,787 788,979 A min. Semi-Annual at Net Tax 5 00% Increment o 0 o 0 o 0 o 0 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 (2,461) 46,765 73,839) 1,402.948 39,449) 749,530 NPV ofTax Increment 7.00% Local Match at 5.00% o o o o 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 2,461 73,839 Years Of Increment 0.0 0,0 0.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 12.5 13.0 13.5 14.0 14.5 15.0 Base Tax Capacity 30,146 Project Tax Capacity 30,146 PERIOD BEGINNING Yrs. 0.0 0.0 0.0 0.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 12.5 13.0 13.5 14.0 14.5 Mth. 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 02-01 08-01 Yr. 1998 1998 1999 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 o o o o 39,375 77,418 114,175 149,689 184,002 217,154 249,186 280,134 310,036 338,926 366,840 393,809 419,867 445,043 469,368 492,871 515,578 537,518 558,716 579,197 598,986 618,105 636,578 654,426 671,670 688,331 704,429 719,983 735,010 749,530 o 30,146 30,146 87,904 30,146 118,050 118,050 87,904 30,146 . 87,904 30,146 118,050 87,904 30,146 118,050 118,050 87,904 30,146 118,050 87,904 30,146 87,904 30,146 118,050 118,050 87,904 30,146 118,050 87,904 30,146 87,904 30,146 118,050 87,904 30,146 118,050 87,904 30,146 118,050 118,050 87,904 30,146 87,904 118,050 30,146 118,050 87,904 30,146 Totals Present Values . Page 2103197 Ehlers and Associates, Inc. . . . Monticello HRA: $4,201 ,000 MlIII<e1 Value on New Reta,1 T.I.F. CASH FL lW ASSUMPTIONS Interest Rate 7,000% Tax Extension Rate: 1,12 Pay 97 Rate Inflation Rate: 0,0000% BASE V ALU INFORMA TION arket Class Tax PIN Value Rate Capacity Monticello Mall 802400 2.7%/4_0% 30146 Total 802,400 30,146 Estimated Pay 98 Tax Capacity PROJECT V Al UE INFORMATION Type of Tax Increment District Redevelopment Type of Development Retail Number of Building Square Feet 70,000 Estimated Market Value of New Project 4,200,000 Pay 00 Class Rate on first $150,000 of Market ValuE 2,70% 'Class Rate Market Value" $150,000 4_00% Estimated Tax Capacity: 166,050 Pay 00 Estimated Taxes: 185,976 Annual Tax Increment 152,212 Assessor's Market Value/s, f. $60,00 Taxes/s,f, $2.66 -. TAXINCREJ\i ENT CASH FLOW Base Project Captured Semi-Annual dmin. Semi-Annual NPV ofTax i Local Years i PERIOD BEGINNING Tax Tax Tax Gross Tax at Net Tax Increment I Match at Of PERIOD ENDIt<tG I Yrs. Mth. Yr. Capacity Capacity Capacity Increment ,00% Increment 7.00% I 5.00% Increment Yrs. Mth. Yr_ ! -----' 0.0 02-01 1998 30,146 30,146 0 0 0 0 0 0 0.0 0.5 08-01 1998 i 0.0 08-01 1998 0 0 0 0 0 0.0 1_0 02-01 1999 I 0.0 02-01 1999 30.146 30,146 0 0 0 0 0 0 0.0 1.5 08-01 1999 ! 0.0 08-01 1999 0 0 0 0 0 0_0 2.0 02-01 2000 ! 00 02-01 2000 30,146 166,050 135,904 76,106 (3,805) 72.301 60,875 3.805 0.5 2_5 08-01 2000 i 0.5 08-01 2000 76,106 (3,805) 72.301 119,692 3.805 1.0 3,0 02-01 2001 i I 1.0 02-01 2001 30,146 166,050 135.904 76,106 (3,805) 72,301 176,520 3,805 1.5 3.5 08-01 2001 ! 1.5 08-01 2001 76,106 (3,805) 72,301 231.426 3,805 2.0 4.0 02-01 2002 i I 2.0 02-01 2002 30,146 166,050 135,904 76.106 (3,805) 72.301 284.476 3,805 2.5 4_5 08-01 2002 I I 2.5 08-01 2002 76.106 (3,805) 72.301 335,731 3,805 3.0 5.0 02-01 2003 i I 3.0 02-01 2003 30,146 166,050 135,904 76,106 (3,805) 72,301 385.253 3,805 3.5 5.5 08-01 2003 ! 3.5 08-01 2003 76,106 (3,805) 72.301 433,101 3,805 4.0 6.0 02-01 2004 I 4.0 02-01 2004 30,146 166,050 135,904 76,106 (3,805) 72,301 479,331 3,805 4.5 6.5 08-01 2004 4.5 08-01 2004 76,106 (3,805) 72,301 523,997 3,805 5_0 7.0 02-01 2005 5.0 02-01 2005 30,146 166,050 135,904 76,106 (3,805) 72.301 567,152 3,805 5.5 7.5 08-01 2005 5.5 08-01 2005 76,106 (3,805) 72,301 608,849 3,805 6.0 8.0 02-01 2006 6.0 02-01 2006 30,146 166,050 135,904 76,106 (3,805) 72,301 649,135 3,805 6.5 8.5 08-01 2006 6.5 08-01 2006 76,106 (3,805) 72,301 688,059 3.805 7.0 9.0 02-01 2007 7.0 02-01 2007 30,146 166,050 135,904 76,106 (3,805) 72,301 725,667 3,805 7.5 9.5 08-01 2007 7_5 08-01 2007 76,106 (3,805) 72,301 762,003 3,805 80 10.0 02-01 2008 8.0 02-01 2008 30.146 166,050 135,904 76,106 (3,805) 72,301 797,110 3.805 8.5 10.5 08-01 2008 8.5 08-01 2008 76,106 (3,805) 72,301 831,030 3,805 9.0 11.0 02-01 2009 9.0 02-01 2009 30,146 166,050 135,904 76,106 (3,805) 72,301 863.803 3,805 9.5 11.5 08-01 2009 9.5 08-01 2009 76,106 (3,805) 72.301 895,468 3,805 10.0 12.0 02-01 2010 10.0 02-01 2010 30,146 166,050 135,904 76,106 (3,805) 72,301 926,062 3.805 10.5 12.5 08-01 2010 , 10.5 08-01 2010 76,106 (3,805) 72.301 955,621 3.805 11.0 13_0 02-01 2011 11,0 02-01 2011 30.146 166,050 135,904 76,106 (3,805) 72.301 984.181 3,805 11.5 13.5 08-01 2011 11.5 08-01 2011 76,106 (3,805) 72,301 1,011,775 3,805 12.0 14.0 02-01 2012 12.0 02-01 2012 30,146 166,050 135,904 76,106 (3,805) 72,301 1,038,436 3,805 12,5 14,5 08-01 2012 12.5 08-01 2012 76,106 (3,805) 72,301 1,064,195 3,805 13,0 15.0 02-01 2013 13.0 02-01 2013 30,146 166,050 135,904 76,106 (3,805) 72,301 1,089,083 3.805 13.5 15.5 08-01 2013 13.5 08-01 2013 76,106 (3,805) 72,301 1,113,130 3,805 14.0 16.0 02-01 2014 14.0 02-01 2014 30,146 166,050 135,904 76,106 (3.805) 72.301 1,136.363 3,805 14.5 16.5 08-01 2014 14_5 08-01 2014 76.106 (3,805) 72,301 1,158,811, 3,805 15_0 17_0 02-01 2015 Totals 2,283.187 (114,159) 2,169.028 I 114,159 .. Present Values 1.219,801 (60,990) 1,158,811 i I Ehlen and Associates. Inc. 12JD3197 Page .--..-.--.......---.- ...- m ..____ 0___ . . -:"--.' . . -,". '~-:'. . . ..- .....:-: :- ',--. " WHITE - Office Copy GREEN - Customer Copy PINK - Deposit Copy ) r;: \~ , , '~ :z 'I-- e:. ........ I-- > -, -, 3 :z -j > 3: 52 z -j , ..- i ~. l' f' ~ ~ ~ \ ~ ~ ~ >'1j o ., 7'. ,.,.... ~~-.:. ~ n ~ .... < 3.. o ..... ::--\ -..;: . \ ?\ ,~ ="'" ,Q l ~ '\' ~..:I f-- ';" f'\ :...;, \ "'" /- ~ ..... ~~ \" .::.. \_.'...... : ,.~,~ '-' ~ \" ~ p ~ '";:-... C~ ,,~ t:l 0 t"" t"" > ::tl en -E.9 ~\ G ...... c CO ~ ~() , (5 1'-J . ____,~__ ~,.~,.._ ~_~,...;.~_,_~,~~_. ..........:.....~.,............_J..___ 3:: o tv :=''"tl~ 0'. tTl 2.0~ -' '" 9 O'J.... ::;>,0 t::tl ...X""' Z-~ , - c.. VI"""'~ VI -.J ~ ...., '< \?J I I; f I" ,! j' \; \' \ r i I I [ Cl ""'" . M'- ~ o ~ s= o ~ M'- ""'" . ~ ('t) ~ o y \ z j' .~ N N W ex) i Nt I I , I ,",,_~___~J . CUB FOODS STORE CO MUNITY ATTRIBUTES Campbell Soup's Label for Education program (g nerates huge amounts) DARE program in partnership with schools and 10 al police departments. Contributes to school's graduation lock-in parties Donates to elementary and secondary schools Supports fundraising events by donating brats & t dogs for sale at stands outside the Cub Food store Generally, the store manager joins the chamber of commerce and becomes active in the community . We plan to have our store manager r side in the Monticello community. All our division stores are members ofthe Minnesota Gro ers Association (MGA) and the Minnesota Retail Merchants Association (MRMA). Store Managers participate in "Career Days" and r ceive requests from local schools or groups to tour a store or speak about the grocery industry. . In excess of 75% of employees would be local res dents. Cub will create opportunities for advancement. Usually Cub becomes one of the lar est employers in the community. Cub strives to contract with local providers of mai tenance services, i.e., lot sweeping, snow plowing, electrical repair, etc. Supports Boy Scout and Girl Scout programs On a local level, community dollars, employing s ior citizens, church groups, sport teams, veterans to help bag groceries "bagging for tips", ing Christmas carols, etc., for a donation to the group, and food bins for the local food shelves, ar just a few of the activities the stores participate in. Store managers can use their own iscretion when approached by local fundraising groups. Large donation requests are required to go throug our Minnesota Division Donation Committee for their review. Our division stores support vario s charitable groups listed below by hosting many fund raising events. . United Way, March of Dimes, Cystic Fibr sis, Big Brother/Big Sister organizations, American Cancer Society, Walk for Anim Is, Special Olympics, MS Society, Children's Heartlink, Toys for Tots, St. Paul Winter arnival, Crusade against Hunger, Salvation Army, Flood Relief, Leukemia Society, A erican Heart Society, University Children's Foundation. . 7~ P.Ol MONTICELLO MALL REDEVELOPMENT TENANT RELOCATI N POSSffiILITIES TENANT RENAISSANCE WEST H&R BLOCK MONTICELLO OPTICAL COI\.1P ANION PETS . NORTHSTAR CAPITAL CONCEPTS BARBARA LEE'S STUDIO OF DANCE WRlGHTWAY,INC HALLMARK SKILLET MASTER'S . (;Je l{,fl1 WAic~({(5 Renov ed Stella's building Goem Building Hairdresser Building Coloni 1 Square office building Goe Building Hairdr sser Building Other nding location downtown I 4/Q....:...( S~-- 9~ :;/ ,.,;/~j may bOld new building or relocate to other part of own, or ? close ~ r inunediate future, possible reopen with e ployee ownership ? MONTICELLO MALL EDEVELOPMENT . RELOCATION EXPENSES 1230 SKILLET $285,000 00 OPTICAL $3,000 00 H& R BLOCK $20,000 00 HALLMARK $100,000 00 WRIGHT WAY $30,000 00/ NORTHST AR $5,000 00 PET STORE $3,000 00 DANCE STUDIO $3,000 00 WEIGHT WATCHERS $200 00 RENAISSANCE WEST $3,000 00 . ESTIMATED TOTAL $452,200 00 . . BRA AGENDA JANUARY 7, 1998 6. . . A. Reference and Background: The purpose oftms meeting with the HRA is to review design and financing alternatives as recommended by the NG/Community Cent Task Force. First, a member of the architectural team from , Inc. will review design alternatives for the proposed NG/Community Center. Se nd1y, Rusty Fifield, Ehlers & Associates, financial consultant for the project, will review the financial alternatives. And lastly, Steve Andrews, BRA representative on the NG/Co unity Task Force, will infonn the commissioners as to the design and financing ternatives recommended by the task force at their meeting of January 6. The recommen ations of the task force will be forwarded to the City Council for consideration on Janu 12 prior to the first public community presentation on Tuesday, January 20, 1998, at 7:00 p.m. ..--.. HRA AGENDA . JANUARY 7,1998 7. - . ...--... . A. Reference and Back~ound: Enclosed is a copy of the first draft of the eliminary Development Agreement between the HRA, City, and Armory Commission as prepared by Dan Greensweig of Kennedy & Graven. You will note this is a preliminary greement and is subject to change. "Preliminary" is key as the described buil . g square footage and construction financing means may be inconsistent with the updat information provided under Item No.6. The intent of the preliminary agreement is to est blish the rights and responsibilities of the parties with respect to the preliminary p . g and development of the NG/Community Center. Attorney Greensweig will explain e process of Lease Revenue Bonds, review the enclosed agreement, and answer questi ns of the HRA. The Preliminary Agreement was distributed at the architect, consultants and staff meeting of December 30. I have not heard any feedback from the Armory Co . ssion via Attorney Greensweig, the Council will address the prellminary agreement at t Council meeting of January 12. B. Alternative Action: 1. Approve the first draft of the Pre. . ary Development Agreement between the HRA, City, and Armory Commissi 2. Approve the first draft ofthe Pre. . ary Development Agreement between the HRA, City, and Armory subject to escribed modifications. 3. Deny approval of the first draft oft e Preliminary Development Agreement. 4. Table any action. C. Recommendation: In lieu of the HRA concerns that Lease Re enue Bonds eliminates the need for referendum, what happened to the expansi n plans for City Hall at its existing site, what is included in the 4-million dollars of the pro sed 6-million core facility, and with information gathered from the community enter tours; the first recommendation is that the HRA raise these questions and cone prior to the Council meeting of January 12 and public meeting of January 20. Additio y, does the proposed budget include construction, land, and equipment/fixture sts, operational costs, and replacement costs? Second recommendation, perhaps it is wis to honor the City Council's decision for the . . . HRA AGENDA JANUARY 7,1998 BRA to issue Lease Revenue Bonds and to a vise the City Council because there is no referendum (no tax payer's choice), the core acility be controlled in size and by cost. The lIRA does have the legal right to withdraw ough non-approval of the future Lease Agreement. D. Supporting Data: Copy of the Preliminary Development Agre ent. . PRELIMINARY DEVELO MENT AGREEMENT THIS AGREEMENT, dated as of , 1998, by and among the HOUSING AND REDEVELOPMENT AUTHORITY IN D FOR THE CITY OF MONTICELLO (the "Authority"), the CITY OF MONTICELLO (t e "City"), and the MINNESOTA STATE ARMORY BUILDING COMMISSION (the "Co ission"). WHEREAS, the Armory and the City Fac'lity as proposed will consist of space dedicated solely to use by the Commission, space dedicate solely to use by the City, and space dedicated to joint use by the Commission and the City; an WHEREAS, the Commission desires to co struct and operate a Minnesota National Guard armory facility (the "Armory") on a site within t e City and legally described at Exhibit A (the "Property"); and ' WHEREAS, the City desires to const t and operate a city hall and multipurpose community center (the "City Facility") on the Pr perty; and . WHEREAS, the Authority desires to furt er the ability of the Commission and the City to construct and operate the Armory and City Fa ility on the Property (collectively, the Armory and City Facility shall be known as the "Project'); and WHEREAS, the Commission, the City and the Authority desire to enter into this Agreement to establish the rights and responsibili ies of the parties with respect to the preliminary planning and development of the Project, u til a definitive development agreement (the "Development Agreement") is negotiated, prep ed, and executed; IT IS A REED: 1. Conce t A roval' Details of Pro'e t. Subject to the terms and conditions of this Agreement, the Commission, the City, and the uthority shall undertake during the term of this Agreement to establish the details of the Pr . ect and to negotiate, prepare, and execute a Development Agreement with respect to the Project. The Project is currently anticipated to result in construction of an approximately square foot building, the space to be allocated as follows: (a) 4,000 square feet for us solely by the Commission as offices by the Minnesota National Guard; (b) 1,300 square feet for joi t Commission and City use as a kitchen; 9,000 square feet for use solely by the City as municipal offices; . (c) (d) 7,000 square feet for joi t Commission and City use as a gymnasium; DJG135726 MN190-66 1 1st Draft December 30, 1997 . . . (e) 3,000 square feet for joint Commission and City use as classrooms and public meeting space; (f) square feet fo joint Commission and City use for mechanical functions and storage space designed to s rve the Project; and (g) square feet fo joint Commission and City use for corridors, hallways, and other secondary common eas designed to serve the Project. The square footages and uses described herein are approximations and may change prior to execution of the Development Agreement. 2. Proiect Construction Financing. T e Commission, the City, and the Authority currently anticipate that construction costs for th Project will total $ which will be financed through the following means: (a) $400,000 in cash to be paid by the Commission at the time the Development Agreement is executed and ntended to pay for the cost of constructing the portion of the Project dedicated solely fo use by the Commission; (b) $1,100,000 to be paid fr cash reserves of the Commission as lease payments for the Commission's use of th portions of the Project intended for joint use by the Commission and the City, as pay ents of operating expenses of the Project, or as any combination of lease and operating e pense payments; (b) $810,000 in cash to be p id by the City at the time the Development Agreement is executed; (c) $50,000 to be paid by the innesota Department of Transportation to pay certain road costs expected to be incurre in connection with the Project; (d) $ to be financ d through the sale of lease revenue bonds sold by the Authority and secured by lease pay ents from the City and, if deemed appropriate by the parties, by all or a portion of e $1,100,000 to be paid by the Commission pursuant to paragraph 2(b) of this Agree ent (the "Bonds"). These costs are estimates only, are subject to c ange prior to execution of the Development Agreement, and neither the amounts nor the me hods of financing shall be considered binding during the term of this Agreement. 3. Acquisition of Property. The Propert is currently owned by third parties. The City shall undertake to acquire the Property through negotiations with such third parties and shall negotiate with the Commission regarding the te s and conditions pursuant to which the City shall convey to the Commission the portion of he Property that shall serve as the site of the facilities dedicated solely for use by the Commiss.on; provided, however, that title to the Property shall be held in such a manner to permit and fu her the sale of the Bonds. Prior to acquisition DJG13S726 MN190-66 1st Draft December 30, 1997 2 . . . of title to the Property, the City shall consult with the other parties to this Property regarding the terms and conditions pursuant to which the Prop rty can be acquired. 4. Content of Development Agreement. In addition to any other provisions deemed necessary or desirable by the Commission, th City, and the Authority, the Development Agreement shall address the following issues: (a) an operating agreement p suant to which the Commission, the City, and the Authority allocate financial and 0 er obligations pertaining to operation and maintenance of the Project, and furth r agree to a system of joint or delegated decisionmaking with regard to manageme t of the Project; (b) a ground lease and any 0 er documents and agreements necessary to ensure the marketability of the Bonds; (c) operational rules and st dards governing use of the Project by the Minnesota National Guard, residents of th City, and any other persons who may use the Project for any purpose; (d) the final site plan, buildin plan, number of levels, building profile, and other related matters; (e) responsibility for remedia ion of environmental contamination on the Property, if any; and (f) any other terms and conditi ns deemed necessary or desirable by the parties to this Agreement. 5. Preliminary Expenses. Each party will undertake its obligations under this Agreement at its own cost and expense, and no party will be ntitled to indemnity or reimbursement for such costs and expenses from any other party, regar less of any circumstances, including without limitation (a) whether the Project is complete or abandoned, (b) whether a Development Agreement is or is not entered into, or (c) the expiration or termination of this Agreement; provided, that the Development Agreement ma provide for payment or reimbursement of preliminary costs or expenses of the City and th Authority from the proceeds of the Bonds or from other sources. 6. Termination. (a) Unless earlier terminated p rsuant to paragraph 6(b), this Agreement shall terminate on the earlier of (a) the effecti e date of the Development Agreement; or (b) , 1998. (b) This Agreement may be te the Commission, the City, or the Authori DJG135726 MN190-66 inated upon 10 days' written notice by the by to the other parties to this Agreement if: 3 Ist Draft December 30, 1997 . . . (i) an essential preco dition to the execution of the Development Agreement cannot be met; (ii) an impasse has been reached in the negotiation of any material term or condition of the Development greement; or (iii) any party determin s in its sole discretion that execution of the Development Agreement is not in its best interests, financial or otherwise. 7. Governin ents. Miscellaneous. (a) by the laws of the State of Minnesota. (b) This Agreement may be ex cuted in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute only one agreement. (c) This Agreement may be amended only by a writing signed by the Commission, the City, and the Authority. (d) In the event any covenant c ntained in this Agreement should be breached by one party and subsequently waived by another party, such waiver shall be limited to the particular breach so waived and shallot be deemed to waive any other concurrent, previous, or subsequent breach. (e) Notice or demand or other communication between or among the parties shall be sufficiently given if sent by mai , postage prepaid, return receipt requested or delivered personally: (i) As to the Authority: P.O. Box 1147 Monticello, MN 55362-9245 Attn: Executive Director (ii) As to the City: P.O. Box 1147 Monticello, MN 55362-9245 Attn: City Administrator (iii) As to the Commissi n: (f) This Agreement is intended solely for the benefits of the parties and shall not be construed to create any right in an person not a party hereto. DJG135726 MN190-66 1st Draft December 30, 1997 4 . . . - THE REMAINDER OF THIS PAGE I INTENTIONALLY LEFT BLANK - DJG135726 MN190-66 1st Draft December 30, 1997 5 . . . IN WITNESS WHEREOF, the Commissi n, the City, and the Authority have executed this Preliminary Negotiating Agreement as of the day and year first written above. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA By Its Chair By Its Executive Director CITY OF MONTICELLO By I ts Mayor By Its City Administrator MINNESOTA STATE ARMORY BUILDING COMMISSION By Its By Its DJG135726 MN190-66 1st Draft December 30, 1997 6 . . . EXHIB T A DESCRIPTION F PROPERTY NEED LEGAL DESCRIPTION HERE DJG135726 MN190-66 Al 1st Draft December 30, 1997 . Kennedy & (_;ravell CHARTERED 470 l"ilJ"\>'lry Cl:ntcT 200 SouTh SilrUt 5;trc:Cl Minneapolis MN 50;402 (612) ~.'57-9300 tdcrhonc (612) 337-'7'110 ~.. c-I,uil "ttr'P>kc.nl:lcdY-J:T.lYcn" '"'' D4NTEL.1. GREENSWtJG Attorney at La.... Dum Ill'll (6121 ~37-9231 MEMOR UM February 16. 1995 TO: HRA Commissioners FROM: Daniel J. Greensweig RE: Lea!\e Purchase Financing . 1 have been al'ked to provide you with a brief exp ation of lea"~e purchase financing as it would relate to the proposed Monticello cotnmunity cent r/dty hall/armory (the "Community Center"), and the implications that this type of financing procedun: would have for the Housing and Redevelopment Authority in and for the city of onticello (the "HRA "). While a defInitive description of the way the process would work in e specific context of the Community Center depends in part on the form of any final agree ent reached among the HRA. the: dty of Monticello (the "City"). and the state. it is pOl'sibl to offer a general overview. A lease purchase agreement is authorized by inn ota Statutes. section 465.71. As this financing mechanism is used in most situations. v' ually the only role of the lessor (in this case. the HRA) is to issue the bonds nece!\sary to financ the project. It i~ the lessee (in thi~ ca!'e the City) that handles construction. operation and m intenance of the facUity. It is worthwhile. however. to more fully consider how a lease purch e agreement would function with regards to the Community Center project- . A housing and redevelopment authority's relevant ower to issue bonds is set forth in Minnesota Statutes. Section 469.034. That authority includes e power to issue bonds payable solely from revenUes derived from the project fmanced by the b nd sale, and to do so without conducting an election on the issue. The HRA is therefore legally authorized to sell bonds: for the Community Center that wilt be repaid solely out of revenue.o;; d .ved from the Community Center. In other words. the bonds can be structured in such a way that they are not general obligations of the HRA or the City. ClJ"Gl'5??S "~1?O-O;6 811-~ SO/EO"d 691-1 OIE6lEE+ N3^V~~ , Aa3NN3~-WOJ~ wd~9:Z0 B6-90-uer . . . For 1m' bonds to be saleable. however. the HR.A ust ha.ve some source of revenue from which the bond~ can be repaid. Tn the case of the Co unity Center. the proposal has been that the City would lease a substantial portion of the Co munity Center for a variety of purposes. The state of Minnesota may also be making lease pa ents in e'tchange for its right to use a portion of the Community Center. although it has not yet been dctennined whether it is best to structure payments by the state as lea~e payments. con .butions to operating expenses. or something similar. In any event it i:s these lease paymen s that would be pledged to repayment of the bonds. (For the !\alee of ~impHcity, T am ignoring tho revenue!; that might be generated by an ice rink or aquatic facility that could also be applied toward bond repayments.) The important point is that the City would retain the annual right to refu~ to appropriate funds for the lease. Because of this right to nonapprop .ate. the lea~ between the City and the HRA would not be considered a long-term obligation 0 the City a,nd no election is required before the City enters into the lease. Nevertheless. the marketability of the bond'i d end~ in large part on how certain potential bondholders are that the City wilt make the ann al appropriation necessary to make payments on the bonds. In general, a bondholder will feel ore secure that a city will make appropriations for municipal necessities than for facilities only arginally related to the city's core functions. In other words. it will usually be ea&ier (and the fote cheaper) to !'ell lea~e revenue bonds to finance a city hall. for which the city will ost certainly make the necessary annual appropriations. than for a golf course. which a cl may later decide i~ an unnecessary expense. Here, it appears likely that the rest of the Comrnu ity Center will be integrally related to the city hall. and Rusty Fifield. the city's financial adviso , bell eves that selling the bonds wi11likely be made easier by this fact. After the bonds have been sold, the lease agree ent between the HRAand the City can be terminated in either of two ways. First. the City ould refuse to appropriate during the term of the lease. Ii this should happen. the City would J se its right to use the Community Center and the HRA (or the bond trustee) would attempt to find another entity to rent the space. Alternatively, the City could make all pa.yments Ue under the lease. resulting in full payment of the bonds and the acquisition by the City of titl to the Community Center. leaving aside the 'itate's owncr!\hip of certain parts of the armory th would be construc.."ted with state funds. This is a.gain something of an oversimplification. igno . g as it does the role of the trustee with regard to management of the Community Center in the ent of the City"s non appropriation and the impact of the state.s involvement. Nevertheless. t should be reiterated that the HRA will not be required to make payments out of its general fu d~ to cover the outstanding bonds regardless of whether the City decides to appropriate in any iven year. It is also important to keep in mind that the will presumably not have any obligations concerning the day-to.day operationl\ of the Co unity Center, at least $0 long as the City continue!' to make its annual appropriation~. B ng some presently unfore~een reason for the HRA to participate in management of the Community Center. the expectation is that the City and the National Guard would enter into an agreement a.11ocating operational responsibilities and costs between those two entities. L\!G':'3=Q~~ lft::Qr.-l>S Bll-~ SO/~O'd aSI-! OIEBlEE+ N3^V~~ , Aa3NN3~-WOJ~ WdvS:ZO Ba-so-uer . . . Mr. Fifield and I will both be at the January 7, 998 HRA meeting and will be happy to ansWer any Questions that you may have. In the mean. c. r hope that thisrnemorandurn wiJI provide some basic background information as you con ider the HRA's role in this projcct cc: Ollie Koropchak Rusty Fifield :lJG13599:\ H:Il'90-66 611-~ SO/SO"d 6SI-l OIE6lEE+ N3^V~~ , Aa3NN3~-WOJ~ WdSS:ZO 86-S0-uer . . . lIRA AGENDA JANUARY 7,1998 8. A. Reference and Back~round: Chuck Malkerson, Community Capital, will e the second presentation for development of affordable housing utilizing ax credits. In November, Mr. David Ben of Freedom Development and Consulting mad a presentation to the HRA. Development of affordable housing was brought to the fore- ont at the request of the Mayor to provide affordable housing for the employment base of Monticello industries. It is my understanding Community Capital r searched the availability and feasibility of the City Staff suggested-sites for redevelopmen: or development of an affordable housing project. I believe the proposed one project . include two sites. Project details will be presented at the meeting. The HRA may requested to assist with the tax credit program not by creating a TIF Housing Dis rict but through Pilot Taxes. This is something new for the HRA and Executive Director to consider and weigh the pros and cons. Tax credit application deadline for d velopers is February 12, 1998. The first decision by the HRA is whether t endorse or support the affordable housing concept? Does affordable housing meet t City Vision and Policies? B 1. Alternative Action. 1. Approve the concept of an afforda Ie housing project and assisting with project costs for tax credit application. 2. Deny approval of the concept of an affordable housing project and assisting with costs tax credit application. B2. Alternative Action. Assuming the lIRA approved Alternative 0.1 ofBl, the BRA would need to consider the following action. If Alternative No.2 s approved, no need to proceed. 1. Endorse both projects and let the rit of each project be ranked for tax credit funding by the agency. (In this cas , the HRA doesn't eliminate any project. However, if one or more applicati ns were submitted and because tax credit applications are very competitive, ould this hinder the approval for funding a project in Monticello?) I . . . HRA AGENDA JANUARY 7,1998 2. Endorse one project only. (Perhaps only one project meets the community objectives and this may increase the chance for tax credit funding.) a. David Bell's proposed atTor able housing project is tied to the purchase and returned RFPs for devel pment of Outlot A, Country Club Manor. This may be out of the juris . iction of the HRA as the HRA will make a recommendation to the City Council as outlined in the next agenda item. b. Community Capital's propo ed affordablehousmg project needs additional time to research and for consideration to assist through a pilot tax program. (Table and schoo e a special lIRA meeting. Next regular meeting of the HRA is Fe ary 4.) C. Recommendation: It appears if the HRA endorses the concep of an affordable housing project, the endorsement for one proposed project is ei! er out of the jurisdiction of the HRA or lacks information for a decision (premature). D. Supporting Data. None. . . . HRA AGENDA JANUARY 7, 1998 9. raisa! for Outlot A. Reference and background: The deed for this parcel is in the name ofth HRA and through previous agreements between the HRA and City, the HRA gave p all rights associated with the property. Because the HRA is owner via the deed, t lIRA will need to hold a public hearing for the disposition ofraw lands at the time the ouncil elects to sell the parcel. As it was the desire to place the Outlot A parcel back of e tax roll and at the advise of Mark Ruff, the HRA recommended RFP be mailed for dev lopment of moderate-high density residential. Of about 12 ~ RFP mailed, two develo s returned RFPs. RETURNED REQUEST FOR PROPOS Quick assessment of the two returned RFPs. Hornig Companies - Proposed development of 7 buildings with 56 two-bedroom units and 21 one-bedroom units and 4 buildings with 4 two-bedroom units and 8 one-bedroom units for a total of 109 market-rate rental .ts. Offer $300,000,20% down at closing and $240,000 contract for deed @ 7% inter st rate. See excerpt. Freedom Development and Consulting - Pr posed development of Park Side Court Townhomes - 6 six-plex buildings consistin of 12 two-bedroom units and 24 three- bedroom units for a total of 36 affordable using rental unit-s.Pr-oposed development for :Pine View Estates - 36 units of market-rat rental townhome units and 42 units of for sale townhome units. Total proposed project is 114 units. Offer $151,675 and request the City waive the per acre trunk storm sewer c' ges. TIP assistance suggested to repay the City for the per acre storm sewer charge, th installation of the sidewalks on 7 Street, and for the per acre land price for the 1.73 acre ity park. See excerpt. APPRAISAL The lIRA appraisal valued the 16.7 acre p el at $171,000. Enclosed is the agenda supplement from the December HRA meeting. You will note an earlier developer informed HRA members 0 the high cost ofraw land in Monticello. $100,000 to $150,000 per acre asking. The HRA may wish to make a recommenda ion to the City Council. . . . HRA AGENDA DECEMBER 3, 1997 7. A Reference and background: At the November meeting, Rod Dragstad was authorized to complete an appraisal of Outlot A for the HRA. Enclosed is a copy of the appraisal. ~ Also enclosed is a copy of a resolution, memorandum, and agreement between or by the City and HRA relating to this parcel. In lieu f the agreements between the City and lIRA, it is the recommendation of Administra or Wolfsteller and Koropchak: that the lIRA review and recommend a disposition price for consideration of approval by the City Council. A few years ago when the City req ested RFPs, the City was offered approximately $225,000 for the 16-acre parc 1. However, the project fell through. Of the 16-acre parcel, 10.4 acres is available for hou ing development as 2.5 acres is required for parkland and 3.1 acres for storm sewer pond evelopment. . Per the request ofthe HRA in November, RF s were mailed on November 14 to ten developers and Realtors and are due back no ater than December 12. B. Alternative Action: 1. A motion recommending a dispositio consideration of approval. for City Council C. Recommendation: without City Council 2. A motion recommending a dispositio consideration of approval. 3. A motion to hold the property until d velopment of West 7 Street creating a linkage to County Club Road. (Perh s land value will increase) 4. A motion to table a decision until ret ofRFPs. In preparation of the anticipated return of s and the desire to place the parcel back on the tax roll, perhaps a recommendation of a isposition price is in order. Although it has not been determined who will benefit from t sale, it is recommended that the Council consider for approval any recommendation b the HRA: therefore, recommendation is Alternative No.1. The Council needs to be pdated on this item. 1 .___ I THE HORNIG C MPANIES, INC. 01 IRVING AVENUE SOUTH, MINNEAPO IS, MINNESOTA 55408 · (612) 824-7503 . D. Financing: 1. Construction funding will be from our own r sources. Permanent financing will be conventional from the most competitive sour e we can find. 2. We anticipate no funding subsidy 3. No subsidy 4. Any family income that exceeds our basic g idelines ( 30% of household income available for rent). There will be no maxim level. 5. We believe the growing Monticello area will provide the base of our residents. 6. Our present thought is to develop the land n ar County Rd. #39 first and work towards the pond. Developer agrees to shar the cost of the pond development as it benefits this parcel. 7. We offer $300,000 for the parcel, payable as follows: 20% down payment at closing, $240,000 contract for deed @ 7% interest 0 ly, $1400 per month payable semi- annually ($8400). First 2 building sites wou d be owned by developer; subsequent buildings would pay a prorated share ofrem ining balance (approximately $27,000) prior to construction start for release of Title Payments on contract would reflect lower principal amounts so that interest onl payment would remain. Not withstanding the above proposal, the entire maining principal balance would be due 5 years from original closing. -- E. References: 1. Enclosed please find the list of vendors we ave relationships with. Experience is the best reference and we hope our experience i Monticello will speak well on our behalf. We look forward to working with you on this p oposal. . MANAGEMENT · DEVEL PMENT · BROKERAGE THE HORNIG C MPANIES, INC. 101 IRVING AVENUE SOUTH, MINNEAP LIS, MINNESOTA 55408. (612) 824-7503 City of Monticello C/O Jeff O'Neill Dear Jeff, Thanks for the RFP packet. I am enclosing a oposal for your review. Unlike 2 years ago when we were selected to develop the site, I have tried to make this as simple as possible - no contingencies and no requests for city participation! This proposal is based on our belief that current market rents and inte est rates will allow us to do what we did not feel we could earlier-- i.e. produce a marke rate community that will carry itself. This plan is a modified Town house design th includes covered parking and largely separate entries. The unit mix is designed to a commodate families as well as single or senior citizens. We think it is attractive from t e highway and the nearby residential community. We can close this transaction im ediately! Proposal Requirements: . . A. Developer Background Information: We own and manage over 1000 rental units in Minnesota. About 300 of those are in smaller outstate communities. The remaining 700+ are in the metropolitan area. We have personally developed over 400 units thro ghout the state. B. Developer Qualifications: I have enclosed a list of properties that we ow and manage. Approximately 300 units have been financed by FMHA or MHF A. Th balance have been owner financed or lender financed at market rate. . C. Development Concept: Site plan: see enclosed plan from Jim Cooper an, our architect. 10. We propose to purchase the entire parcel r our project, and will work with city staff to create pond area and park. 11. The buildings are 8 or 11 units in size. W plan to develop one building at a time using our own funds - filling it, place con entional financing on it, then immediately develop the second building. Demand wi 1 determine whether the project will be completed in 1-2 years or more. Building Design: 2. Pre finished materials will be used whene er possible. Exterior siding will be metal or vinyl with vinyl windows. The exterior ill be totally maintenance free. 3. Noise Mitigation: Building design and la out of site will attempt to minimize exposure to freeway noise. Only 3 of the 11 buildings will directly face the freeway and they will act to shield the balance of uildings from direct traffic. All neighbors will benefit. See detail for proposed ber along the freeway. MANAGEMENT · BROKERAGE -"'II - ~. - - -~ - - -- ,. . - ,. . -- ----- -- ------ --- __ca. -- ~.... SEcrION D: FINANCING 1). CONCEPT' FOR FINANCING lea.:... Construction and permane t financing will be provided through Zapp National B ~, St, Cloud. Zapp National Bank has provided the fi ancing for numerous similar developments completed t e by the development team. For sale townhames: Construction financing w'll be provided through Zapp National Bank, St. Cloud. As stated above, Zapp National Bank has financ d numerous similar developments for the deV' lopment team. Permanent mortgage will be provide by the purchasers of the townhomes utilizing lend rs of their choice. Description of ownership: The rental townhomes wil be owned by a Minnesota Limited Partnership. The General Partner will be a Minnesota Limited Liabil'ty Company with members (owners) from Lumber One Avon Inc., Podawiltz Development Corporation nd or Freedom Development. Initial rents: The initial rents for th moderate income townhomes are estimated to be $550 per nunth for the 1,085 square foot two bedroom townho and $625 per month for the 1,250 square foot three edroom townhomes. The rent for the townhomes include th attached single stall garage and individual washer an dryers in each unit. Please refer to page one of the proforma included in this section for a more compl te descriI?tion and to the plans included in the bu'lding deslgn section for a pictorial description. ; I J i t t 2). FORM OF FUNDING SUBSIDY ; . . ~ ~ The moderate income rent 1 townhomes will be utilizing tax credits as an equity source to reduce the mortgage size and the rents. I ~ I For sale townhomes: It is not anticipated th t any fonn of subsidies will be utilized by the devel pment team. Individual purchasers may utilize IT rtgage sources such as VA, F1-IA, F'NMA or MHFA for th ir respective mortgages. :1 I, \"h , : ~, l ~ ..... ~ ;., ~ ""'~'.'" . "'.. ~~.. 1 ~'."..~.. ~~ ~._.. _ page 2 3) ._ Moder leS.l. Tenants income adjusted for family size caIU10t exceed 30% of 60% of medlan income for wright County. The incomes are established ann ally by the federal government. Rents are limited to 30% of 55% of the adjusted annual incomes noted above. Pleas refer to the page 6 of the proforma in this section specifics. for sale tnwnhomes: Their are no anticipated re subsidies on the for sale t resulting from ,0 II ~ r' n "I ~ ~\ 'I . Moder The development team does subsidy of tenant rents. For sale tnwnhanes: Not Applicable. 4). MAXIMUM AND MINI anticipate any direct Moderate income ren The maximum is established by section 42 of the IRS regulations which restrict occupancy to individuals or families with family inca s over 60% of the median income for the county in wlich the development is constructed. . For sale townhomes: The only antici~ated rest ictions would be those imposed by the lndividual purchasers lender of choice. The minimum is establishe by policy of the development team which requires the t nants income to exceed the monthly rent by 2.3 times. please refer to page 6 of the profonna in this section for the current maximum t nant income limits. ... .- - . - - -- - .-. --- ..~ J.. T- Market data and experient'al history indicates that approxirnately 75% of the enants will come form the imlBdiate Monticello area The balance of the tenants will be neW Monticello ar a residents that typically move for reasons of emplo nent. For sale tnwnhomes: Market data and experient'al history indicates that the majority of purchasers wi 1 be from the Monticello area. The balance will be new Monticello residents that move for reasons of empla nent, life style chan$es, locational consideration, and based on the quallty of the townhome product. Page 3 5). MARKET AREA 6) . ___ '7). PURC1IASE PRICE OFFER Appraised price per Total acreage: Park Acreage: Development & Pond Acre Offering Price: 14.87 x 10,2 0 ; ~ , ~ -T -~ nJ -~ t'~ :) ~ V tr I I \., L ... 1'"" r-" r: ~ [ ~ K t: ~ ~ f E II;~.. \ i ! The development team is roposin$ to install the retention pond with no c st sharlng with the City of Monticello. 1he developn nt team respectfully requests that the city waive the er acre trunk- storm sewer charges. pLEASE NOTE: The develoI? ent team suggests that the city of Monticello utill e pay-as-you-go tax increment financing to repay itsel for the per acre storm sewer charge, the installation of the sidewalks on 7th Street and for the per acre Ian price for the 1.73 acre city I?ark. The repayment would be economically beneflcialto the Clty nd would be of assistance to the I?rojects selection .or tax credits by the Minnesota HouSlng Finance Agency. $10,200.00 16.60 1.73 14.87 $151,675 . . . HRA AGENDA JANUARY 7, 1998 10. Recommendation is to approve authorization or payment of the BRA monthly bill with the exception ofthe Ehler's bill for the Anno . This paid by the City. . r Monticell HRA PO Box 147 Monticello MN 5362-9245 December ,1997 MC10o-06 ARMORY Previous Balance: . 11/13/97- Payment - thank you Total Balance Due: . Hours Amount 2.00 240.00 2.00 240.00 2.00 240.00 0.50 60.00 1.25 131.25 2.00 240.00 9.75 $1,151.25 $1,098.75 ($1,098.75) $1,151.25 10/7/97 RF 10/9/97 RF 10/24/97 RF 11/4/97 RF 11/5/97 MTR 11/25/97 RF Attend Task Force Meeting Research on sales tax and finance optio s Meet with Staff and National Guard Review 10/29 letter from TAG/research ptions Meeting on community center at City Meet with Staff and National Guard Total Due This Month: EHLERS AND AS OCIATES, INC. 2950 Norwe t Center 90 South Sev nth Street Minneapolis. MN 55492-4100 PLEASE KEEP WHITE COPY FOR YOUR FILE A 0 REMIT PINK COpy WITH PA YMENT TO: . . . . \\ Q,. ~ MC10o-01 GENERAL Monticell HRA PO Box 1147 Monticello MN55362-9245 December 8, 1997 Hours Amount 11/11/97 MTR Prepare background for RFP for housi g 11/17/97 MTR Discussions with Ollie 0.50 52.50 0.50 52.50 Total Due This Month: Total Balance Due: 1.00 $105.00 $105.00 PLEASE KEEP WHITE COpy FOR YOUR FIL AND REMIT PINK COpy WITH PA YMENT TO: EHLERS AND A SOCIATES, INC. 2950 No est Center 90 South S venth Street Minneapolis. N 55402-41_00 . . . ~C< ~ -~ {:J .~ 7 \" ?- Monticell HRA PO Box 1147 Monticello MN 55362-9245 MC100-23 December 8, 1997 MALL REDEVELOPMENT 11/5/97 MTR Meeting on Mall redevelopment 11/16/97 MTR Discussions on Mall Total Due This Month: Total Balance Due: ( I Hours Amount 1.25 131.25 0.25 26.25 1.50 $157.50 $157.50 PLEASE KEEP WHITE COpy FOR YOUR FILE AND REMIT PINK COpy WITH PA YMENT TO: EHLERS AND A SOCIATES, INC. 2950 No est Center 90 South S venth Street MinneCiPolis, N 55402-:4100 KENNEDY & Chartere 200 South Sixth Stre t, Suite 470 Minneapolis, MN 55402 (612) 337.9 00 . .. (;.:::r: ,-, . ~',\ ;"'! ". .,# CLIENT SUMMARY ecember 9, 1997 Monticello HRA City Hall 250 East Broadway PO Box 83A Monticello, MN 55362 Through November 30, 1997 MN195-00006: Purcahse of 225 Front Street MN195-00007: Purchase of225 West River Stre t Services Rendered: Disbursements: Balance Due: . .;8. ilndt..h" ~'I:J!"I::--::'ty (,1: !~1t ,:~ ~coun:, cl<:iim ,-,r ck::r:z!'c ic ius! ::nd c . t aile: lhat ll<') put of it ha.; I"":Y \-- '} ~l> /\>-y $ $ 162.90 231.90 $ $ 375.30 19.50 $ 394.80 . . . RAVEN Chartere 200 South Sixth Str t, Suite 470 Minneapolis, M 55402 (612) 337. 300 December ,1997 Monticello HRA City Hall 250 East Broadway PO Box 83A Monticello, MN 55362 MN195-00006: Purcahse of 225 Front Street Invoice # 9516 Through November 30, 1997 For All Legal Services As Follows: 11/10/97 CHT Review title commitme t; phone call with 0 Koropchak; revise agre ments; letter to 0 Koropchak 11/13/97 CHT Phone call with 0 Kor pchak Total Services: For All Disbursements As Follows: 11/18/97 Photocopies Total Disbursements: Total Services And Disburse ents: 0.90 0.20 $ $ $ 125.10 27.80 152.90 10.00 to.OO 162.90 . . . KENNEDY & RAVEN Chartere 200 South Sixth Su t, Suite 470 Minneapolis, M 55402 (612) 337. 300 December 9 1997 Monticello HRA City Hall 250 East Broadway PO Box 83A Monticello, MN 55362 MNI95-00007: Purchase of225 West River Street Invoice # 1 517 Through November 30, 1997 For All Legal Services As Follows: 11107/97 CHT Phone call with 0 Koro chak re purchase 1.10 agreement; prepare opti n agreement and purchase agreement 11/14/97 CHT Phone call with 0 Koro chak; proofread agreement 0.50 and fax to 0 Koropchak Total Services: For All Disbursements As Follows: 11/14/97 Fax Total Disbursements: Total Services And Disbursem nts: $ $ $ 152.90 69.50 222.40 9.50 9.50 231.90 KENNEDY & RAVEN . Chartere 200 South Sixth Stre t, Suite 470 Minneapolis, MN 55402 (612) 337- 300 CLIENT SUMMARY City of Monticello Ollie Koropchak City Hall P.O. Box 1147 Monticello, MN 55362-9245 Through November 30, 1997 MN190-00041: Redevelopment - General Services Rendered: Disbursements: Balance Due: . ~'~ '1:-' ,:\ j.... < oW' '.. .. ',1. .,~: ~~~ ~:,: ~-~ $ $ $ $ 234.50 234.50 0.00 234.50 . . . KENNEDY & RAVEN (hartere 200 South Sixth Str t, Suite 470 Minneapolis, M 55402 (612) 337- 300 December 9, 1997 City of Monticello Ollie Koropchak City Hall P.O. Box 1147 Monticello, MN 55362-9245 MN 190-00041: Redevelopment - General Invoice # 9029 Through November 30, 1997 For All Legal Services As Follows: Phone call with 0 Kor pchak re various redevelopment and TI issues Phone call with 0 Kor pchak re various issues Phone call with 0 Kor pchak re various TIF Iredevelopment iss es Total Services: 10/31/97 SJB 11/07/97 SJB 11/18/97 SJB Total Services And Disburse ents: t~ ~,:-.... l . w.~ -..Ii. ...,: . ~.. '.: . ....~ 0.75 0.50 0.50 $ $ 100.50 67.00 67.00 234.50 234.50 . . . HRA AGENDA JANUARY 7, 1998 It. n i n fir a) 225 Front Street - Marian Carlson calle while I was on vacation the week of December 15. In responding to messages, s. Carlson was very upset and inquired to why the 1997 offer of $130,000 was $33,00 less than the 1996 offer of$163,000 when the assessed value increased and the inside as immaculate. She was disgusted with the suggestion to use the lIRA garage in its pre ent condition. Upon leaving the lIRA meeting in October, she understood LiaisonCarlson to imply there would be no problem to reconstruct the garage. Unable to recall he lIRA minutes, I thought the November 1997 offer was lower because the January 1 96 offer was prior to the damage resulting from the fire and the July storm and neither surance claims have been settled. Checking the minutes, the HRA was not satisfied wit the comparatives used by the appraiser in the second appraisal and neither the first or sec nd appraisal listed the property within the flood plain. Reconstruction of the garage ould require construction at a level equal to or above the flood plain. Reconstruction oft garage was an issue for the Planning Commission or City Council and Koropch was directed to refer this to the Planning Commission. Koropchak encouraged Mrs. Carlson to make a counter-offer to the lIRA and/or to contact the HRA Chair. Mrs. C Ison plans to have the property appraised therefore does not plan to attend the Janu 7 BRA meeting. FACTS: On January lO, 1996, the HRA a oved a purchase option in the amount of $163,000 with an option fee of$2,500 and the right to exercise the option within six months. The October 1995 appraised valu was $163,000. The purchase option was offered or presented on January 12. The e occurred on February 6, 1996. On February 14, 1996, the HRA-declared the January 1 offerof$163,OOO null and void as the HRA did not receive a copy ofthe written respo se of the February 5, 1996 counter-offer which increased the option fee from $2,500 to $5000. Deadline for the written response to the January 12 offer was February 7. The No ember 1997 appraised value was $165,000. b) 3 Walnut Street -In a conversation will Mr. Schliefon December 31, they are attempting to clear the title defects throu Quit Claims. One party has been unwilling to sign that being O'Connor. In the meant' , I have received an application for rent from Adam and Truda Boler for your considera ion. Not knowing the date of ownership, I have not attempted to contact the given re erences. They are aware ofthe uncertain ownership date and that the HRA plans to clean the carpets only. c) Potential second TIF District No. 1-22 edeve10pment project - Jeff and I have had preliminary discussions with a developer r construction of a 6,000 sq ft print two-story building. Two sites were identified within he boundary of District 1-22. The proposed redevelopment project could increase the ket value by approximately $550,000 and the annual tax increment is estimated at abou $22,000. One site would require acquisition and demolition and the second site acquis tion, demolition, and relocation. Is the HRA interested in the concept for possible TIF ssistance? . . . HRA AGENDA JANUARY 7, 1998 d) Seminar - Enclosed is the agenda for a 'IF 1998 Seminar sponsored by Publicorp (Ehlers) in February 5 and 6, 1998. Is any; ne interested in attending? Cost $150 per person. . . . 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Commission embers heard a request for TIF assistance from owner Barry Fluth. Mr. F th plans to demolish the existing mall structure, relocate the existing te ants, and construct a new 70,000 sq ft facility with a major tenant pro osed as Cub Foods, Inc. TIF District No. 1-22 was established by the Cit in early 1997 for the purpose of assisting with redevelopment of sub stand rd and under- utilized property within the district boundaries and as a me ns to imple- ment the MCP Downtown/Riverfront Revitalization Plan. r. Fluth re- quested $600,000 of TIF assistance. The HRA approved TIF assistance in the amount of $400,000 for demolition and tenant relocation costs associ- ated with redevelopment of the mall. The proposed redevel pment project is projected to increase the anual tax base by $99,000 and cr ate other spin- off business. In addition to assisting with the redevelopmen of the mall, the HRA plans to use the remaining 50% of the tax increme t from the redeveloped mall for other eligible redevelopment costs within the TIF district. ,. . Pictured above: Mayor Bill Fair, Eric Bondhus, and Ca Congratulations, Lak by Ollie Koropchak Economic Development Director Tool From the well by Matt Theisen Water Superintendent Did you know... In late November, members of the City Council and staff, I C, and HRA gathered to recognize and congratulate Eric, Carl, and De nis Bondhus, owners of Lake Tool, Inc. Mayor Fair presented the owner with an Appre- ciation Plaque from the City of Monticello and expressed t e City's appre- ciation for expanding in Monticello. The group continued 'th a tour of the new facility. Lake Tool is a tool shop which builds plastic i jection molds. The growing company constructed a new 9,000 sq ft offic anufacturing .Cility on Dundas Circle. The company received TIF assi tance from the "ity in the amount of $37,900. The expansion project is e pected to in- crease the local tax base by $10,000 annually and within t 0 years create at least five new jobs at a weighted average wage of at least 40,000.,., . The average bath uses 30-50 gallons of water. . An average showerhead delivers 5-7 gallons per minute. . The average top-loading washing machine uses 19 gallons on the low setting and 45 gallons on the high setting. . A faucet dripping one drop of water per second will waste 190 gallons per day. . An average toilet uses 3-5 gallons per flush - older toilets up to 7 gallons. . An average family of four uses 250 gallons per day. . 1000 gallons of water run through a garden hose per hour. ., . . . BRA AGENDA JANUARY 7, 1998 12. Other Business: a) Annual appointment of BRA Co HRA commissioners are appointed each yar by the Mayor and -City Council at the first Council meeting held in January. The se t held by Commissioner Andrews expired on December, 1997. If Steve Andrews agrees to remain on the the BRA may want to endorse Mr. Andrew's appointmept. On January 12, the Mayor and ouncil will consider appointing all commission membe5including Steve Andrews to a five- ear HRA term: Dan Frie (Larson) Brad Barger Bob Murray (Carlson) Darrin Lahr (St. Hilaire) Steve Andrews (Ellison) December 1998 December 1999 December 2000 December 2001 December 2002 Recommendation is a motion endorsing Ste e Andrews for a five-year BRA term, expiration date of December, 2002. Pa e 1