Loading...
07-14-1992 HR MIN • MEETING OF THE ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL TUESDAY, JULY 14, 1992 Members Present: Chairman Dick Hinkle, Commissioners Duitsman, Schuldt, Kropuenske (7:03 p.m. ) and Toth (7:30 p.m. ) Members Absent: None Staff Present: Pat Klaers, Executive Director; Bill Rubin, Economic Development Coordinator Also Present: Brad Larson, Elk Terrace Ltd. Partnership 1. Call Meeting To Order Pursuant to due call and notice thereof, the special meeting of the Elk River Housing and Redevelopment Authority was called to order by Chairman Hinkle at 7:00 p.m. 2. Consider 7/14/92 HRA Agenda COMMISSIONER DUITSMAN MOVED TO APPROVE THE 7/14/92 HRA AGENDA. • COMMISSIONER SCHULDT SECONDED THE MOTION. THE MOTION CARRIED 3-0. Commissioner Kropuenske arrived at this time. 3. Consider 1/14/92 HRA Minutes COMMISSIONER SCHULDT MOVED TO APPROVE THE 1/14/92 HRA MINUTES AS PRESENTED. COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 4-0. 4. Open Mike No one appeared for this item. 5. Consider a Request by Elk Terrace Ltd. Partnership for Tax Increment Financing Assistance for a Housing Project at 4th Street and Holt Avenue Economic Development Coordinator, Bill Rubin, indicated that the City was in receipt of a request for Tax Increment Financing assistance from Elk Terrace Ltd. Partnership, Monticello, Minnesota, in the amount of $92,000 to assist with underwriting acquisition costs, demolition costs, utility line capping costs, and site grading costs, for a 23 unit senior apartment project proposed at 4th Street and Holt Avenue. At this time, a revised budget for this project was distributed to the • HRA Commissioners. Based on those revisions, the HRA's proposed project costs had increased sufficiently to require an adjustment in the property tax payback period of this project. It is currently estimated that if a TIF District is created at 4th and Holt, it would • exist for seventeen to eighteen years and the Tax Increment payments will be collected for fifteen to sixteen years. At this time, Commissioner Hinkle asked if the City had a policy of collecting tax increments for an eight to ten year period. Bill Rubin indicated that staff attempted to structure the project to limit the collection of tax increments from eight to ten to twelve years, but with the increased costs, it appeared that tax increments would be collected for at least fifteen years. A basic consideration of extending the life of the TIF District is that this project meets a stated City goal of redeveloping an area that is deteriorating as a residential area and, in turn, providing additional senior housing units. At this time, Commissioner Duitsman asked why the acquisition prices were so high and why the Farmers Home Administration could not finance some of these costs. Brad Larson, Elk Terrace Ltd. Partnership, answered that Farmers Home Administration has limits on the acquisition price of sites it finances. The developer is prepared to pay this price and tax increment assistance would be used to write down the cost of the land from its current purchase price value which reflects land and buildings.. Bill Rubin indicated that the HRA does not have funds sufficient to • incur the cost associated with this project. Rather, staff is proposing that the HRA consider a note that is privately placed through a lender. This note would be repaid by annual tax increment payments collected from the apartment project. Commissioner Duitsman asked if the developer was guaranteeing the repayment of this note or if the developer was guaranteeing the value of the project that is attributable to the finished market value plus increases or adjustments for inflation and time. Bill Rubin indicated that the developer is required to sign an assessment agreement which establishes the completed minimum market value of the project. No consideration is made as to potential changes in the residential formula that is used to determine taxes. Therefore, the developer is not guaranteeing a minimum amount of taxes annually for this project. Chairman Hinkle inquired as to the potential loss of state aid from this project. Brad Larson responded by saying that the Limited Partnership is prepared to have the City-HRA certify to the County Auditor the annual amount of the loss in state aid. This amount would be included in the upcoming year's tax payment. At this time, Bill Rubin reviewed the proposed time frame to establish a Tax Increment Financing District for this project. Staff is proposing that the HRA conduct a public hearing as well as the requirement for the City Council to conduct a final public hearing on • this request. Chairman Hinkle indicated that the HRA's hearing would be much like the Planning Commission's review of items before City Council final action. • Commissioner Duitsman asked about the status of the Guardian Angels expansion project and whether or not the market existed for both projects. Brad Larson indicated that Elk Terrace Ltd. Partnership and Guardian Angels were required to do market studies to determine project feasibility. In addition, Farmers Home Administration and the Department of Housing and Urban Development must sign off on the respective projects. Commissioner Toth arrived at this time. COMMISSIONER KROPUENSKE MOVED TO AUTHORIZE THE PREPARATION OF A TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT DISTRICT NO. 10. COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 5-0. COMMISSIONER DUITSMAN MOVED TO SET AN HRA PUBLIC HEARING FOR TUESDAY, AUGUST 25, 1992, AT 7:00 P.M. AT THE ELK RIVER CITY HALL TO CONSIDER PUBLIC COMMENT ON THE TAX INCREMENT FINANCING PLAN. COMMISSIONER TOTH SECONDED THE MOTION. THE MOTION CARRIED 5-0. COMMISSIONER KROPUENSKE MOVED TO REQUEST THAT THE CITY COUNCIL CONSIDER SETTING A PUBLIC HEARING ON THIS MATTER. COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 5-0. Bill Rubin indicated that staff would also begin work on developing a note to be privately placed in order to help finance the HRA's cost in • this project. 6, 1993 Budget and Levy HRA Commissioners were asked to begin considering items for the 1993 budget and related levy. It is estimated that the HRA's 1993 levy will generate approximately $30,000. This item can be discussed and finalized at the August 25, 1992, HRA meeting. 7. Other Business No other business was brought before the HRA. 8. Adjournment There being no further business, COMMISSIONER KROPUENSKE MOVED TO ADJOURN THE HRA MEETING. COMMISSIONER TOTH SECONDED THE MOTION. THE MOTION CARRIED 5-0. The meeting of the Elk River Housing and Redevelopment Authority was adjourned at 7:45 p.m. Respectfully submitted,/I ice.�-r R • William Rubin Economic Development Coordinator