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1999-08-10MINUTES -MOUND HRA -AUGUST 10, 1999 • The Housing and Redevelopment Authority of the City of Mound, Hennepin County, Minnesota, met in a regular session on Tuesday, Augustl0, 1999, at 6:00 PM, in the Council Chambers at 5341 Maywood Road, in said City. Those present: Mayor Pat Meisel; Councilmembers Bob Brown, Mark Hanus, and Leah Weycker; Councilmember Andrea Ahrens was absent and excused. Also in attendance were Acting City Manager Fran Clark; HRA Director Pinky Charon; Assistant City Planner Bruce Chamberlain, City Attorney John Dean; and Secretaries Carla Wirth and Sue McCulloch. Mayor Meisel called the meeting to order at 6:09 p. m. T.I.F. MEETING AGENDA Gt,t~L~h~ ~ ~ ~ `~'~ 1. QUALIFYING SCHOOL DISTRICT SITE FOR TAX INCREMENT TREATMENT. City Attorney John Dean presented this case. Attorney Dean stated it was necessary to qualify the school district site for tax increment treatment due to the fact this would be a significant generator of tax increment for the development of the site. Attorney Dean restated that although the use of tax increment to cover such demolition expenses may not, by itself, provide the district with significant funds, the qualification of the site for tax increment treatment through the process described previously will create the opportunity to provide additional finding to the district to cover other legitimate items in addition to the demolition. Attorney Dean provided all councilmembers a draft Contract for Private Redevelopment By and Between The HRA and the Independent School District for their review tonight and approval. This Agreement will provide a mechanism of furnishing assistant to school district to defray costs. Attorney Dean briefed that the whereas section restated the facts as we know them. Attorney Dean also stated that Article II mentions thoroughly the demolition process on the site and how they will proceed. As the demolition occurs, the City will reimburse costs to the school district that are not reimbursable from any other source. The only portion of property that does not qualify is the house the school district bought a while ago. The amount of the reimbursement will have a maximum of $20,000 unless further discussed and it would be payable by a note. Attorney Dean reiterated the Agreement and stated it exclusively meets the statutory criteria for tax increment development but also leaves the door open for the school district in terms of assisting economically in developing the site. Attorney Dean recommended the HRA favorably consider the Agreement at present and approve the Resolution. Attorney Dean stated the Resolution states the agreement has been approved and the execution and delivery of the contract should proceed. Attorney Dean apologized for the Agreement being presented tonight and not a sooner date. There was no discussion at this time regarding the above-noted Contract, but rather Sid Inman, a consultant with Ehlers and Associates, Inc. presented the financing part of the Contract. ' Mr. Inman commented that his rough calculations show that the site could hold 180,000 to 200,000 square feet of development and he is confident that any development in this location will generate the amount of money needed from minimal taxes. Hanus asked if the City was considering the whole parcel or just part the parcel for development with his calculations and the whole parcel is being considered according to Mr. Inman. Also according to Mr. Inman, the tax increment that this parcel would generate over a period of 25 years would be $3-4 million dollars at present value. Attorney Dean also stated a waiver for the County and school district should be under consideration. Typically no action can be taken until a specific timeframe has occurred, but the waiver that Attorney Dean is presenting will allow the tax increment plan to be looked at now. The waiver has been sent to Mound's local representative and the County commission, and the local representative indicated by her silence that the waiver was agreeable to her and at present Attorney Dean has not heard from the County. Attorney Dean stated yet a third item which needs to be considered tonight and that is having the HRA make an election with regard to fiscal disparities. Sid Inman discussed fiscal disparities with the HRA. He stated a document entitled Fiscal Implications needs to be sent to the County and school district by August 11, 1999, which calculates what the tax increment would be and then a budget would need to be attached as well. Fiscal disparities at present are 24 percent if the district chooses to pay it. Another option is to have everyone outside the district to pay for it so that $.24 gets applied to every other commercial and industrial property in Mound. Mr. Inman recommended that the City spread it outside the district and if they do not see the dollars coming in that way, then the City can change its mind and then take it from inside the district. If the City chooses the second way first, you cannot decide at a later date to take it from the outside, but the visa versa way can occur. Attorney Dean asked if Mound agrees with fiscal disparities and it was noted that Mound does agree with this scenario. Mr. Inman stated there would be a chance of losing monies if the City would only stay within the district to pay for the fiscal disparities so he is again recommending to go outside the district and then calculate at a later date if a change needs to be made. Weycker stated that the above tax increment would only be charged to commercial and industrial companies. Attorney Dean stated again that he recommends to adopt the Resolution above stated and also to direct the Finance Director to prepare materials to be submitted to exclude the school district from being a contributor of fiscal disparities. Hanus wanted to make sure the opportunity for any involved party to manipulate the numbers in their favor would be unforeseeable. Attorney Dean stated that this is a federal statute which those parties involved must follow. Also Attorney Dean stated there is opportunity in the future to change this agreement in the future if needed. Mayor Meisel stated she is comfortable with this Agreement, with the $20,000 cap, and also we need to assume that school district would go along with this Agreement as well. Weycker wanted to know if the $20,000 was the maximum the developer could get for this site. Attorney Dean stated this is not the maximum as a whole but it is the maximum that the HRA is obligated to pay at this time under the Agreement noted because of the $20,000 cap. • Brown moved and Weycker seconded the followingresolution: RESOLUTION NO. 99- - I A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF CONTRACT FOR PRIVATE DEVELOPMENT. The voted was unanimously in favor. Motion carried. 4-0. Attorney Dean stated also that he would like approval for Mr. Inman to proceed with the notification of the school district and the County showing that the taxes generated within the district there will not be a deduction of fiscal disparities from those taxes. MOTION made by Hanus, seconded by Brown, to direct Sid Inman to prepare materials for not cation of the school district and to the County to exclude the school district site as a contributor to fiscal disparities. MOTION carried. 40. 2. TAX INCREMENT POLICY. Attorney Dean addressed the Tax Increment Policy. The purpose of the Folicy is to establish the Housing and Redevelopment Authority's position as it relates to tax increment financing for private development. He generally feels this is an appropriate policy, but not mandatory. Attorney Dean also stated that the HRA does not need to adopt the policy yet, but to use it as a guideline. Hanus had a question regarding what is required from statute and Attorney Dean stated that a large portion of the document is statute and the HRA will know when it is time to get a policy at hand in the near future. Hanus and Mayor Meisel stated this may be appropriate in the near future with the newly diverse development area coming ahead. 3. PRELIMINARY DEVELOPMENT AGREEMENT WITH COAST TO COAST. Assistant City Planner Bruce Chamberlain presented this case. Mr. Chamberlain stated that the Agreement Attorney Dean is passing out to each councilmember states basically that the Coast to Coast building would be potentially moved west along the railroad tracks toward County Road 110. Mr. Chamberlain outlined the property lines on a map. He stated there are portions of property that needed to be included and others that do not. The Preliminary Development Agreement allows the HRA and Coast to Coast to work toward a final development agreement. This basically protects Coast to Coast for the rights to work exclusively with the Mound HRA on this development. He stated there are no requirements for the developer to put funds into an escrow at this time. Attorney Dean stated that the developer would have site control and he is very comfortable with the developer. • Tfie recommendation by Ivir. Chamberlain is that the HRA adopt the preliminary development agreement with Mound Family Hardware, Inc. Attorney Dean did make a notation that on page 1, paragraph 4, the words "and Auditor's Road District respectively" should be removed from the Agreement. A deadline in hopes of getting this Agreement signed is the end of November according to Mr. Chamberlain. Mayor Meisel stated the only concern she has is listed on 4A and clarified. Brown stated if the HRA approves this Agreement tonight, what timeframe will it be before it comes to the Planning Commission and have it start being looked at further. Mr. Chamberlain stated no definite answer, but the developer needs a purchase agreement for the land the City owns first before he can go through with the approval process. MOTION made by Weycker, seconded by Brown, to accept the Preliminary Development Agreement with Mound Family Hardware, Inc., as revised above. MOTION carried. 40. 4. PURCHASE AGREEMENT FOR VACANT PROPERTY ON SHORELINE DRIVE (BY SUPER AMERICA) • Attorney Dean handed out the Purchase Agreement for the Shoreline Drive property. The Agreement is the same as presented at the August 3 meeting with the exception of the Comprehensive Plan part stated on page 3, number f. Mr. Chamberlain stated the property for purchase is about 1.3 acres and is located near the Super America location. The price in the Agreement is noted to be $500,000. Attorney Dean stated the contingencies of the Agreement are environmental conditions, suitable soils for building, making sure there is a source of permanent financing, and a survey would need to be accomplished. He stated the rest of the agreement, with the Comprehensive Plan an exception and above notations, it is a standard purchase agreement. Attorney Dean also stated that Balboa appears not to have any concerns with the Agreement at this time. Weycker stated the history of the property is that it may be a dump site and asked if the City would be protected from clean-up costs. The Assistant City Planner noted the agreement, as drafted, provides time to determine and detect if there are any environmental issues that need to be addressed. Weycker also stated a concern regarding the T1F money. Attorney Dean stated there are a number of approaches to take when with money starts generating. MOTION made by Hanus, seconded by Brown, to execute the Purchase Agreement. MOTION carried. 40. Iv 1. CONSENT AGENDA HRA Director Pinky Charon presented the minutes and monthly bills for approval. A. HRA BOARD MINUTES -TUNE 22. 1999 AND TULY 13. 1999. MOTION by Brown, seconded by Hanus to accept the HRA Board Minutes dated June 22, 1999, and July 13, 1999. The vote was unanimous. MOTION carried. 40. B. MONTHLY BII,LS. MOTION by Brown, seconded by Hanus, to accept the monthly bills. The vote was unanimous. MOTION carried. 40. 2. ACTION ITEMS A. REVISED BUDGET. Ms. Charon presented the revised budget. She stated there were some "hard" expenses but is looking for approval of the revised budget. Hanus commented on the Budget Progress Report. He noted receipts and expenses and expressed some concern. Hanus posed the question if the reason for the revised budget is due to the expenses that appear to be growing. Ms. Charon stated this is partly true but certainly acceptable. She did want to clarify that if the budget does go over you need to send a letter to HUD stating why this occurred. Hanus stressed again his concern of over spending. Ms. Charon assured that there are big expenses, but those are one-time expenses and are being taken care of. Brown commented that he would very much appreciate getting information pertaining to items on the agenda before the actual meeting has started. Ms. Charon assured that in the past she has been very good about this and apologized for the revised budget arriving late tonight. MOTION by Hanus, seconded by Brown, to accept the Revised August Budget as proposed by staff. MOTION carried. 40. B. RESOLUTION APPROVING CIAP BUDGET. Ms. Charon presented information regarding the CIAP grant. Of the monies that she receives from the grant, she intends to spend about 95 percent of it for the ventilation system in the building and then maybe some window shading and vent cleaning, along with stronger ventilation fans on the roof. • Hanus and Brown had some concern regarding administrative costs. Ms. Charon stated it would be about 1.5 percent of the budget for administrative expenses. Ms. Charon stated she is very excited about this grant since something of this large amount has not happened for a long time. She also stated there would • automatically be a certain amount of monies sent each year after having applied for this grant this year. Ms. Charon stated this amount was received without being asked for and now she wants to divide it appropriately. Hanus moved and Weycker seconded the following resolution: RESOLUTION #99- ~ PHA BOARD RESOLUTION APPROVING CIAP BUDGET Motion carried. 4-0. 3. DISCUSSION Ms. Charon stated she is concerned about the long-lasting TIF meetings. She asked if they continue to be so long, would the HRA consider having only TIF meetings. This may be brought up again for discussion at a later date. 4. INFORMATION ITEMS A. Accountant Reports. B. Bank Statements. 5. TENANT REPRESENTATIVE REPORT Ms. Charon stated currently there are three vacancies that she is hoping to fill. In the past year and one-half there were 10 vacancies. Things have progressed, but there is still room for improvement. ADTOIIIZNMENT MOTION by Brown, seconded by Hanus to adjourn meeting at 7:20P.M. The vote was unanimous. MOTION carried. .- Francene C. Clark, Acting City Manager I~ MOUND HOUSING AND REDEVELOPMENT AUTHORITY Indian Knoll Manor L~ U C7 # Check No. Vendor/Merchant Amount Comments 1 3647 Sterne Electric $1 061.02 2 3648 B F 1 263.53 3 3649 N S P 1,839.35 4 3650 Glenwood In lewood 13.42 5 3651 Ko sa S Ivester 81.00 6 3652 NAHRO 270.00 fall conference 7 3653 Ko sa S Ivester 175.00 accountin seminar 8 3654 Coast to Coast 198.63 9 3655 Verified Credentials 100.00 10 3656 J.R. O tics 181.50 11 3657 Uni Dial 2.33 12 3658 G T E 125.71 13 3659 M E I 138.00 14 3660 Peachtree 88.00 forms 15 3661 Babcock Lan bein 450.00 auditin fee 16 3662 AT SST Universal 109.76 office su lies aol 17 3663 Servicemaster 143.78 ca et cleanin 18 3664 Minne asco 847.39 19 3665 Cit of Mound 1 096.86 20 3666 Housin Authorit Ins 1 234.00 workmans com ins 21 3667 Westonka Mechanical 257.75 re lace check # 3618 22 3668 4 M Fund 500.00 lev loan 23 3669 Paul Kronholm 5.16 asoline 24 3670 Geor a Hisken 100.77 S.D. Refund 25 3671 Steve Ke ke 109.35 S.D. Refund 26 3672 I R S 650.00 27 3673 Bett Kronholm 192.12 28 3674 Paul Kronholm 1 070.02 29 3675 Karol Charon 904.49 30 31 32 33 34 35 TOTAL: TOTAL ACC. PAYABLE Begining Bank Bal. Deposits MTD ENDING BANK BALANCE /, Signature: /1 $12,208.94 $12,208.94 $35,748.69 $9,000.00 $32,539.75 AccPay 08/09!99