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EDA Minutes 07-22-2020MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, July 22nd, 2020 — 7:00 a.m. Academy Room, Monticello Community Center 505 Walnut Street, Monticello, MN 55362 The EDA meeting was held both remotely and in-person. Commissioners Present: Steve Johnson, Bill Tapper, Jon Morphew, Tracy Hinz, 011ie Koropchak-White, Lloyd Hilgart, and Jim Davidson Staff Present: Jim Thares, Angela Schumann, and Matt Leonard 1. Call to Order Steve Johnson called the Regular Meeting of the EDA to order at 7:00 a.m. 2. Roll Call 3. Consideration of additional agenda items None. 4. Consent Agenda None. 5. Consideration of Approving Small Business Emergency Grant Agreements in the amount of $5,000 to: Salon Tuscan LLC; Monti Nutrition; Palmetto Fitness LLC (DBA: Fitness Evolution); and Sweet Dreams LLC to mitigate COVID-19 economic impacts Jim Thares explained that four additional applications for the Small Business Emergency Grant have been received. Thares mentioned that Palmetto Fitness (DBA: Fitness Evolution) has the most employees (3 1) of the submittals, but fits within the EDA guidelines. He also noted that Monti Nutrition has not been in business for more than a year, but was still eligible and impacted by COVID. Thares added that several of these businesses have received other forms of assistance, such as the State's Emergency Loan Program as well as EIDL and/or PPP. Thares explained that all of the businesses were eligible for the EDA's grant and recommended approval. JIM DAVIDSON MOVED TO APPROVE SMALL BUSINESS EMERGENCY GRANT AGREEMENTS BETWEEN THE EDA AND: SALON TUSCAN, LLC; MONTI NUTRITION; AND PALMETTO FITNESS LLC (DBA: FITNESS EVOLUTION); AND SWEET DREAMS LLC IN THE AMOUNT OF $5,000 TO MITIGATE COVID-19 ECONOMIC IMPACTS. OLLIE KOROPCHAK-WHITE SECONDED THE MOTION. MOTION CARRIED, 7-0. Economic Development Authority Minutes — July 22i1, 2020 Page 116 6. Consideration of EDA Resolution #2020-08 authorizing Interfund Loan for Advance of Certain Costs in Connection With Small Business Emergency Grant Assistance Program wherein the GMEF account is reimbursed by CARES Act pandemic funding for previously approved grants provided to assist businesses negatively impacted by the COVID-19 pandemic Jim Thares explained that by adopting the Interfund Loan Resolution, the EDA has the opportunity to be refunded the previously approved grant awards through the GMEF set aside Small Business Emergency Grant Assistance Program through the Federal CARES Act to the extent that the specific expenditures for which the businesses are using the funds for are eligible. Thares noted that it was critical that the EDA consider a resolution authorizing an Interfund loan for advance of the costs of the grant program within 60 days of establishment of the EDA's grant program, which was implemented on May 27, 2020. Thares mentioned the importance to reimburse the GMEF loan program as a variety of prospects are still interested in developing in Monticello and using the program as a resource. Thares added that a subsequent companion action by the City Council was also necessary, as the CARES Act funding must go through the City of Monticello and then be assigned to the Monticello EDA. Jim Davidson asked if the number of available grants in the Small Business Emergency Grant Assistance Program could be increased. Thares confirmed and noted that all money would need to be spent by November 15, 2020. Thares added that the City would receive a little over a million dollars in CARES Act funding and that the City had some expenditures that they would utilize the money for, but any unused funds would be sent to the County and then the State. Thares noted that the EDA can also decide to increase the size of the grants at a future meeting if they so choose. Lloyd Hilgart mentioned the importance of holding a discussion with the City's Finance Department to ensure that the EDA doesn't overspend if the City has intended uses of the CARES funding. Angela Schumann explained that during the August EDA meetings, the Small Business Emergency Grant Assistance Program would bring forward updated guidelines and an application. She noted that businesses cannot "double -dip" and use funding for expenses from one agency and apply for funding from another agency and use the same expenses. The revised guidelines would note this as the City is the responsible grant administrator and will be audited later on. BILL TAPPER MOVED TO ADOPT EDA RESOLUTION #2020-08 AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH SMALL BUSINESS EMERGENCY GRANT ASSISTANCE PROGRAM WHEREIN THE GMEF ACCOUNT IS REIMBURSED BY CARES ACT PANDEMIC FUNDING FOR PREVIOUSLY APPROVED GRANTS PROVIDED TO ASSIST BUSINESSES Economic Development Authority Minutes — July 22nd, 2020 Page 2 16 NEGATIVELY IMPACTED BY THE COVID-19 PANDEMIC RESPONSE EFFORTS. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 7-0. 7. Consideration of GMEF Pre -Application from Vikram Aggarwal for development of a proposed Daycare Facility Jim Thares explained that Project Panda #3 was a childcare provider (Goddard Child Care School) that has been talking with City Staff for several months. Thares noted that several childcare providers have approached the City previously, but have been unable to move forward with their concepts for a variety of reasons. Thares explained that Mr. Aggarwal has developed a couple of similar childcare facilities in Albertville and Maple Grove. Thares explained that the pre -application for GMEF assistance was in the amount of $400,000 for the proposed $4 million dollar project. He stated that approximately $1,030,000 was remaining in the GMEF program. Thares discussed the proposed project and impacts in detail. He noted that the facility would be located on a tax forfeited property on School Boulevard near RiverCity Extreme and Emagine Theatres. The total parcel is 4.58 acres, with the development proposed to utilize approximately 2 acres. The remaining acreage could be utilized for future development. Staff recommended support of the pre -application and noted a survey completed in 2018 by First Children's Finance of Minnesota indicating the need for additional childcare options in Monticello. Lloyd Hilgart noted the need for this type of facility in the community as this type of business is not already in Monticello. Hilgart stated his support for the proposal despite the projected low wage levels of staff. Hilgart also asked what else was in line for funding through the GMEF program and how to prioritize projects that are ready to go. Thares explained that Project Gia -Saurus and Project #6580 have noted interest in the program. Project #6580 is on hold until next spring due to the current economic impacts from the pandemic. Thares estimated that they would request around $250,000 to $300,000, but have a focus on creating good paying jobs and considerably more tax base. Tracy Hinz noted financial support for the project and the need for both childcare services and childcare workers. She expressed caution to put this project ahead of other projects that focus more on job development. Jim Davidson noted support of the project and for support of the larger projects, too. Thares also noted the City's Small Cities Development Program (SCDP) Loan Fund has approximately $800,000 available for businesses to seek equipment related expenses. Project Gia -Saurus would have the opportunity to utilize this fund along with GMEF. Hinz asked if the EDA can approve a lesser amount than requested on a GMEF application. Thares confirmed. Economic Development Authority Minutes — July 22nd, 2020 Page 3 16 011ie Koropchak-White suggested staff check with the County on their loan programs to support the childcare proposal. Angela Schumann noted that the parcel is tax forfeited and the County asked if the City was interested in the parcel. The City declined at that time due to its commercial zoning designation. The City did ask the County to put a six month hold on the parcel for the prospect to work through due diligence and site plan development. It was believed that the prospect was also going through the process for certification by franchise. It was noted that the project would help to keep childcare in Monticello especially for people that work in the community. Thares indicated that he would inform the prospect of the EDA's preliminary support of a GMEF application and would urge him to continue in the formal loan process. Steve Johnson asked for clarification on the funding for the project. Thares noted that the prospect could utilize the SBA 504 loan program and that any support received through the EDA's GMEF loan program could be considered equity towards the required 10 percent down. The GMEF funds would be subordinate to any bank or SBA loans received. Johnson mentioned the importance of being a franchise as the sustainability of the business in Monticello would be long-term. 8. Consideration of Discussion of Revised Beard Group, Inc. Block 52 Redevelopment Concept Proposal Illustration Jim Thares introduced the discussion item for a revised concept of Block 52 that was submitted by the Beard Group. Thares mentioned that the concept was revised to be more realistic following meetings with property owners in the block. It was noted that the properties in the southwest corner of Block 52 would likely not participate in the proposed redevelopment plans. A lengthy discussion with the EDA occurred about their impressions and suggested revisions from the proposed concept. Lloyd Hilgart noted he would like to see more commercial spaces designated in the plan, especially along Broadway and Highway 25. He also suggested shortening the planned concept building facing River Street to have room for a restaurant or brewery (for example). The developer could then lengthen the building on the Broadway side of the concept for additional residential. Tracy Hinz noted the importance of the existing buildings blending in with the redevelopment. Bill Tapper noting the importance of ensuring there were realistic levels of parking given the water table. Angela Schumann responded that tests were completed of the area and the Economic Development Authority Minutes — July 22nd, 2020 Page 4 16 parking could be completed, but may be costly. Jim Davidson asked about the Small Area Study's plan to have Walnut Street connect to River Street and was concerned with having two access areas next to each other. Steve Johnson mentioned street improvements that could impact the development area, including an additional right turn lane on south bound Highway 25 to Broadway and the possibility of an additional lane on Broadway West. Matt Leonard said the City and developer would need to understand MnDOT and the County's plans for these roadways and the projected future traffic generation on both roadways. It was noted that the current proposed concept redevelopment does not accommodate future roadway improvements. Angela Schumann said when the redevelopment begins, platting will be required and notice will be sent to MnDOT and Wright County for comment. Schumann noted that the Beard Group would be informed for the need for additional space at the corner of Highway 25 and Broadway. Space would also needed for a sidewalk along Highway 25. Potential right of way impacts were noted as a future discussion factor as well. Davidson noted on the concept that he was less concerned about having an office space along Broadway and more about having retail along on the river. Discussion about parking and access then occurred in length. It was noted that all of the residential units shown on the concept would be able to park underground. The parking shown on the surface could accommodate some public parking. A next step would be to see proposed building elevations to better understand the proposal. Leonard proposed that the developer design the Walnut Street extension to River Street to show how it would tie into the development. Combining the roadway extension and the access to the development was also discussed. Hinz asked if any financial information on the project was provided. Thares indicated that would be part of the next steps for the developer to prepare. Steve Johnson asked about the need for opening Walnut Street to River Street. Schumann responded that the developer would want it for more access to amenities such as the park. More discussion would be needed with the developer to understand how the street entrance could be combined with the parking lot entrance. Leonard indicated that some on -street parking on Broadway would be lost because of the development and possible future improvements to the City and County roadways. Schumann noted the importance of having some on street parking. Discussion occurred about having a large sidewalk or patio face in front of the commercial places. It was noted that if the building was shifted to extend further along the south side to the west, the office space would shrink and allow additional parking behind the building. The office Economic Development Authority Minutes — July 2211, 2020 Page 5 1 6 space was likely included in the concept design stemming from conversations from property owners in the downtown and trying to accommodate their needs. Thares mentioned that the City Administrator requested that the developer try to incorporate public art into the project. Davidson requested that the developer be creative with the development rather than having the City design that aspect of it. There was a worry about losing too much space with any changes brought forward to the developer. Bill Tapper entertained the idea of shifting the building to the west and recommended removing the office space in favor of a wider entrance to the parking. He suggested making the space inviting for people to sit or walk through that area and to ensure the parking area didn't feel too concealed. It was noted that the County may require a shift to the access. In summary, the next steps were to follow up with the Beard Group regarding the comments of the EDA. Staff would also continue to work on property acquisition. 9. Economic Development Director's Report Jim Thares provided the Economic Development Director's Report. He noted that the fire training burn would occur on September 12, 2020. During the August meeting, the EDA would consider approving payment of the $2,500 fire training fee. A portion of that cost is expected to be paid back through State funds. Thares also mentioned work continues on Project Gia -Saurus. Jim Davidson stated concerns about the amount of local assistance and the return on investment. It was indicated that a preliminary TIF run was completed by Northland Securities. City Staff will continue to meet to discuss the project and prepare information to review with the City Council and EDA. 10. Adiourn BILL TAPPER MOVED TO ADJOURN THE MEETING AT 8:18 A.M. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED, 7-0. Recorder: Jacob Thunander r Approved: ('-�gust 12th, 2020 Attest: /f& &I A .s , Economic Development Director Economic Development Authority Minutes — July 22nd, 2020 Page 6 16