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06-02-2008 HRA MINMEETING OF THE ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, JUNE 2, 2008 Members Present: Chair Wilson, Commissioners Kuester, Toth, I.ieser, and Morin Staff Present: City Administrator Lori Johnson, Community Development Director Jeff Gongoll, Director of Economic Development Catherine Mehelich, Economic Development Assistant Annie Deckert, Recording Secretary Debbie Huebner Call Meeting To Order Pursuant to due call and notice thereof, the meeting of the Elk River Housing and Redevelopment Authority was called to order at 5:30 p.m. by Chair Wilson. Chair Wilson introduced two new employees; Jeff Gongoll, Community Development Director, and Annie Deckert, Economic Development Assistant. 2. onsider une 2 200 HRA A nda MOVED BY COMMISSIONER MOTIN AND SECONDED BY COMMISSIONER TOTH TO APPROVE THE JUNE 2, 2008, HRA AGENDA AS PRESENTED. MOTION CARRIED 5-0. 3. Consider Consent Agenda MOVED BY COMMISSIONER MOTIN AND SECONDED BY COMMISSIONER LIESER TO APPROVE THE CONSENT AGENDA AS FOLLOWS: • APRIL 7, 2008 REGULAR MEETING MINUTES -APPROVED • APRIL 14, 2008 SPECIAL MEETING MINUTES -APPROVED • CHECK REGISTER -APPROVED • BALANCE SHEET -APPROVED • REVENUE/EXPENDITURE REPORT -APPROVED MOTION CARRIED 5-0. 4. en Mike There was no one present for Open Mike. 5. Downtown Revitalization Project Update Ms. Mehelich provided updates on the following The Bluffs of Elk River - MinnWest Bank owns the Bluffs and the property is being marketed by Stephanie Danielson and Avalae MN Real Estate. The foreclosure process is Housing & Redevelopment Authority Page 2 June 2, 2008 complete and the units will be sold through the bank. A grand opening/open house is scheduled for June 19~. There are no new leads for the commercial space at this time. Jackson Place -The apartments have been filled. No new leads on the commercial space. Commissioner Toth asked what status was of the drq cleaning facility. Ms. Mehelich stated .that the business is moved in and operating. 716 and 720 Main Street Buildings -The Arts Alliance is utilizing the space at 716 Main Street. They have an event scheduled this week, and the Riverfront Concert series will be starting soon. Staff is working with a client who is interested in the former O'Reilly/Bumper-to-Bumper space (720 Main Street). She noted that the building is in rough condition and there are items that need to be addressed such as the flooring and bathroom facilities. She discussed possible enhancements to the exterior of the building including painting the wooden head. She suggested purchasing vertical blinds for windows faring the street, at a cost of $300. Ms. Mehelich asked for feedback from the commission. Commissioner Toth stated that he was not opposed to the enhancements. Commissioner Motin stated that he is-not in favor of spending a large sum of money, but felt painting of the header was a necessary maintenance item. Commissioner Lieser felt it was worthwhile to make the improvements. Chair Wilson was in agreement with the commissioners. He stated that the header definitely needs attention and a building owned by the city should not be an eyesore. He suggested that the prospective tenant be informed of the interior unprovements that need to be made and see if they have any interest in doing them. He stated he also did not want to make a huge investment in the building, but felt it needs to be made presentable. Staff will proceed with the improvements to the head and purchase of the blinds, and will contact the prospective tenant interested in leasing the space at 720 Main Street. 6. Discuss Status of Bowling Alley Property Ms. Mehelich provided background information regarding the former bowling alley property located a 13161 Highway 10. She noted that Commissioner Toth requested that the HRA discuss the status of the property and what role, if any, the HRA could play in redevelopment of the property. Ms. Mehelich discussed setback issues related to Lake Orono and Highway 10, ownership of adjacent properties, zoning, and purchase price (current property owner, George Larson asking $2,250,000). She noted that staff has received a number of inquiries on the property for proposed uses ranging from bar/restaurant to residential condos, as well as questions regarding setbacks, DNR regulations, permitted uses, and availability of financing assistance for redevelopment or rehabilitation. Ms. Mehelich stated that if the HRA were looking at acquisition of the property, they would need to complete a redevelopment plan. She stated she was not sure if the parcel would qualify for tax increment financial assistance. Commissioner Toth asked if there is enough buildable area for a restaurant. Ms. Mehelich stated that an engineering study would be needed to make that determination. Chair Wilson asked what the cost would be to complete a TIF redevelopment evaluation. Ms. Mehelich stated that the most recent study was done by SEH Engineering for the Bluffs of Elk River for 3 - 4 buildings, at a cost of $15,000 - $20,000. She explained that the study would have to be contracted out and she was not sure of the cost; estimates would need to be obtained. Ms. Mehelich noted that the property does not have to meet a statutory definition of "substandard" to qualify for tax abatement. Chair Wilson asked what the requirements are for tax abatement. Ms. Mehelich stated that Housing & Redevelopment Authority June 2, 2008 Page 3 the project would need to increase the tax base as well as provide another public benefit e.g. job creation. Commissioner Kuester asked if there is information on the property. Ms. Mehelich stated that she did not have information on the condition of the building. Commissioner Toth stated that it would seem that the building would need to be removed. He stated he felt the site would be more advantageous to the city as a restaurant. Commissioner Kuester asked where a frontage road could go, since MnDOT is looking at closing accesses. She stated that this information would be important to a potential buyer. Commissioner Toth stated he felt the city should have this information available for inquiries. Commissioner Kuester asked if the property owner is looking for assistance from the city. Ms. Mehelich stated that the owner is looking for any type of assistance the city could provide, since he wants to sell the property and retire. Commissioner Motin asked if the owner is looking to the city to buy the property. He stated that this parcel and adjoining parcels were all considered for a possible redevelopment project at one time. He stated he had a problem with using tax abatement, and felt that the property could be redeveloped without the HRA's involvement. He stated that the only reason the business closed is because the roof collapsed. He did not feel it was the city's responsibility to help. He stated he did not see a frontage road happening anytime soon, and that he did not believe MnDOT has any plans to close the access. Commissioner Toth stated that the whole area needs to be redeveloped, and that the property owner may need to lower his price. Ms. Mehelich stated that the adjacent parcels are similarly priced and are being marketed separately. She stated that staff has offered to keep listing the property on the city's website, and the site was included in the marketing packet that was sent out to restaurants. Commissioner Toth asked if more information could be obtained on the property to provide to potential buyers. Ms. Mehelich explained that the city typically provides zoning, PID, parcel size and contact information. Commissioner Toth noted that there are two vacant homes on School Street (east of Jackson) and asked if staff had any information on them. Mr. Gongoll stated that he would check on the properties and provide information at the next HRA meeting. There being no other business, Chair Wilson adjourned the meeting of the Elk River Housing and Redevelopment Authority at 6:10 p.m. Minutes prepared by Debbie Huebner Tina Allard, City Clerk