EDA Minutes 09-13-1995
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MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Wednesday, September 13, 1995 - 7: 00 p. m.
City Hall
MEMBERS PRESENT: Chairperson Ron Holgund, Vice Chairperson Barb Schwientek,
Assistant Treasurer Harvey Kendall, Clint Herbst, Tom
Perrault, Al Larson, and Bill Demeules.
EDA STAFF PRESENT: Treasurer Rick Wolfsteller and Executive Director Ollie
Koropchak.
GUEST:
Jim Harwood, Vector Tool & Manufacturing, Inc.
1. CALL TO ORDER.
Chairperson Hoglund called the EDA meeting to order at 7:00 p.m.
2.
CONSIDERATION TO APPROVE THE JULY 25.1995, EDA MINUTES.
Al Larson made a motion to approve the July 25, 1995, EDA minutes. Tom Perrault
seconded the motion and with no corrections or additions, the EDA minutes were
approved as written.
3.
CONSIDERATION TO REVIEW FOR APPROVAL THE PRELIMINARY AND
FORMAL GMEF APPLICATION FROM APPLICANT. VECTOR TOOL &
MANUFACTURING, INC.
Koropchak reviewed the recruitment process for Vector Tool beginning with a
contact from Brad Barger, a second partner of the company, and owner of Suburban
Manufacturing, Inc. The IDe Prospect Team toured the existing Vector Tool leased-
facility in Dayton. The HRA approved the land write-down of $63,000 of the
estimated market value of $96,000 for Lot 5, Block 3, OIP. Purchase price $33,000.
Land write-down was based on job creation and average weighted wages.
Additionally, funds are being requested from the CMIF.
Koropchak continued by reviewing the loan application request with the GMEF
Guidelines and credit analysis as prepared by PRG, Inc. EDA members questioned
the change in the Days Receivables from June 1994 of 9.3 days to June 1995 of 30.9
days and the Days Payable from June 1994 of 9.6 days and to June 1995 of 26.5
days. Mr. Harwood was unable to answer the question, having not seen the PRG
analysis prior to the EDA meeting. Koropchak was to followup on this.
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EDA MINUTES
SEPTEMBER 13, 1995
Mr. Jim HalWood informed the EDA members that Vector Tool recently signed a
three-year contract with Wagner Spray Tech, Inc. for manufacturing their products.
Wagner offers 63 different products. This along with the addition of seven other
new customers gives Vector a projected growth of 87% Realistically, Jim estimates
Wagner to be 30% of Vector's business. Vector's growth from its first year to this
year increased from $700,000 to 1. 5-1.7 million.
4.
CONSIDERATION TO APPROVE OR DISAPPROVE GMEF LOAN NO. 010
FOR VECTOR TOOL & MANUFACTURlNGr INC.
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The EDA found the Vector Tool project to encourage economic development and
that the GM EF application complied with the GMEF public purpose criteria and
policies. The EDA members felt the land write-down of $63,000 and the relocation
costs associated with production shut-down and moving was sufficient to meet the
Business Equity Requirement Provision of the GMEF Guidelines. Al Larson made
a motion to approve GMEF Loan No. 010 in the amount of $50,000 for Vector Tool
& Manufacturing, Inc. This a real estate loan with a 6.75% fixed interest rate
amortized over 20 years, ballooned in five years. Loan fee was set at $750 and paid
at time of GMEF disbursal. GMEF legal fees the responsibility of the applicant.
The EDA preferred a shared second position with the CMIF; however, will accept
a third position behind the lender and the CMIF. GMEF Loan No. 010 becomes
null and void on March 13, 1996 if funds are not disbursed. GMEF is subject to
lender and CMIF commitment and approval. Collateral, guarantees, and other
condition requirements to be determined and prepared by the GMEF attorney. The
EDA will utilize the HRA attorney at Kennedy & Graven. Loan funds to be
disbursed from the Liquor Fund Appropriation account. Barb Schwientek seconded
the motion and with no further discussion, the motion passed 6-0-1 vote. The City
Council will review for ratification the EDA's approval of GMEF Loan No. 010 on
September 25, 1995.
5.
CONSIDERAION OF AN UPDATE RELATING TO THE CLOSING
DOCUMENTS FOR GMEF LOAN NO. 009 FOR THE H-WINDOW COMPANY.
Upon reviewing the closing documents for the H- Window expansion project with
John Babcock and Knut Flakk, it became evident that Steve Lemme was providing
a Personal Guaranty for the GMEF loan. With Mr. Lemme's retirement from the
company, the EDA was requested to consider the requirements of a Personal
Guaranty with the issuance of a $300,000 Letter of Credit. Hopefully, closings for
the approved State Grant/Loan of $250,000 and the GMEF loan of $50,000 will be
soon.
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EDA MINUTES
SEPTEMBER 13,1995
At Larson made a motion to eliminate the Personal Guaranty for GMEF Loan No.
009 subject to the issuance of an Irrevocable Letter of Credit in the amount of
$300,000 from the Christiana Bank of New York for a period of at teast through
December 31, 1997, to the City of Monticello and the Monticello EDA. Tom
Perrault seconded the motion and with no further discussion the motion passed
unanimously. A Corporate Guarantee from the North American Window Company
is still required by the State Grant Agreement.
6. AJOURNMENT.
The EDA meeting adjourned at 8:00 p.m.
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Ollie Koropchak, EDA Executive Director
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