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EDA Minutes 02-23-1999 . . . MINUTES MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Tuesday, February 23, 1999 - 7 p.m. Members Present: Chair Ron Hoglund, Vice Chair Barb Schwientek, Bill Demeules, Clint Herbst and Darrin Lahr. Absent: Assistant Treasurer Ken Maus and Roger Carlson Staff Present: Executive Director Ollie Koropchak, Treasurer Rick Wolfsteller Guest: Pam Campbell, DA T, and Steve Groebner, Jane Covart and Scott Glisner, Mainline Distribution. 1. Call to Order. Chair Ron Hoglund called the EDA meeting to order at 7:00 p.m. 2. Consideration to approve the November 17. 1998 EDA minutes. A MOTION WAS MADE BY BILL DEMEULES AND SECONDED BY DARRIN LAHR TO APPROVE THE NOVEMBER 17, 1998 EDA MINUTES. Motion carried with Clint Herbst abstaining from the vote due to his absence from the November 17, 1998 EDA meeting. 3. Consideration of addin2: agenda items. Executive Director Ollie Koropchak stated she would like a brief discussion regarding commercial loans. 4. Consideration to review for approval the preliminary GMEF loan application from Mainline Distribution Properties. LLC. Executive Director Ollie Koropchak introduced the partners in Mainline Distribution Properties. Steve Groebner, operation managers; Scott Glisner, territory manager in sales; Jane Covart, controller. Steve Groebner gave a brief background of the company. They are a manufacturers representative and a distributor of materials and equipment to natural gas utilities and their contractors. They are presently working more with contractors who are doing the work for utilities. They stock and sell the things that are usually not seen. They are a full service operation from well head to furnace. . . . Darrin Lahr asked if they subcontracted out. Scott Glisner stated they did not, there were contractors to do that. Ms. Koropchak gave a project summary. Mainline is asking for a $100,000 real estate loan with the shareholders committing to $145,000 of equity into the purchase ofthe property. They are hoping to close in May 1999. The relocation and expansion will add 11 new full-time jobs to the City at an average wage per hour of $19.90 without benefits. They will add two new full-time jobs to the State of Minnesota and City of Monticello at an average wage per hour of $1 0-12 without benefits within the next two years. Ollie Koropchak stated she felt that the loan should be a 20-year amortization with balloon payment in five years. Interest rate not less than 2% below Minneapolis prime rate which was at 7.75% on Friday, February 19, 1999. Also a loan fee of a minimum of $200. Loan would become null and void within 180 days from the date of ED A approval which would be August 23, 1999 if approved at this EDA meeting. The applicant shall be responsible for the legal fees. Clint Herbst asked what was previously in the building and whether or not it was a fair price. Ollie Koropchak stated that Midwest Graphics was in the building before and that the bank would be doing an appraisal. Darrin Lahr asked if there was significant outside storage. Steve Groebner stated that there was some and they were still renting warehouse space in Golden Valley because they are not completely moved up to Monticello. Ollie Koropchak reminded them about the screening requirements. 5. Consideration to approve or deny GMEF Loan No. 015 for Mainline Distribution Properties. LLC dba Groebner & Associates. Inc. After review of the application, A MOTION WAS MADE BY BARB SCHWIENTEK AND SECONDED BY BILL DEMEULES TO APPROVE GMEF LOAN NO. 015 FOR MAINLINE DISTRIBUTION PROPERTIES, LLC, DBA GROEBNER & ASSOCIATES, INC., IN THE AMOUNT OF $100,000 WITH THE FOLLOWING TERMS: AMORTIZATION UP TO 20 YEARS AND A FIVE YEAR BALLOON PA YMENT, INTEREST AT A FIXED RATE OF 5.75%. COLLATERAL, GUARANTEES, AND OTHER CONDITION REQUIREMENTS TO BE DETERMINED AND PREPARED BY THE GMEF ATTORNEY. THE GMEF LOAN APPROV AI, IS SUBJECT TO LENDER APPROVAL AND SUBMISSION OF FINANCIAL STATEMENT. APPLICANT SHALL PAY $200 LOAN FEE AND LEGAL FEES. Motion carried unanimously. . . . 6. Consideration to elect 1999 EDA officers. A MOTION WAS MADE BY DARRlN LAHR AND SECONDED BY CLINT HERBST TO APPROVE THE NOMINATIONS AS PRESENTED IN THE 2/23/99 AGENDA. THEY ARE AS FOLLOWS: President Vice President Treasurer Assistant Treasurer Secretary Ron Hoglund Barb Schwientek Rick Wolfsteller Ken Maus Ollie Koropchak Motion carried unanimously. 7. Consideration to review and accept the year-end EDA Financial Statements, Activity Report, and proposed 1999 Budget. Executive Director Ollie Koropchak reviewed with the EDA members the year-end EDA Financial statement, activity report and proposed 1999 budget as follows: Cash in Balance ending 12/31/98: $133,145.03, and a Projected Cash Flow balance of$569,855.72 ending December of 1999. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY BILL DEMEULES TO ACCEPT THE YEAR-END FINANCIAL STATEMENT AND REPORT FOR SUBMISSION TO THE CITY COUNCIL ON MARCH 8,1999. Motion carried unanimously. 8. Consideration to review year~end balances of the GMEF, DMRF, UDAG, and ERG Funds. Ms. Koropchak reviewed with the EDA members the year-end balances in GMEF, DMRF, UDAG, and ERG Funds as follows: GMEF Cash Balance: DMRF Cash Balance: UDAG Cash Balance: SCREG - Aroplax Cash Balance: TOTAL $373,544.51 $181,501.62 $170,209.90 $ 60.453.62 $785,709.65 No EDA action was required on this report. . . . 9. Consideration to review the GMEF Guidelines for possible amendments. Ms. Koropchak statcd to comply with the GMEF Guidelines, Fund Guideline Modification; at a minimum, the EDA shall review the Fund Guidelines on an annual basis. She questioned whcther the issue of the wage goals should be spelled out in the application form. Barb Schwientek stated she felt it was important that information be up-front. Darrin Lahr agreed that the guidclines need to be known to the applicant. Ollie Koropchak stated that Mayor Belsaas wants to scc more jobs in Monticello but at deccnt wages. Clint Herbst wanted to know if a company would be climinated because it doesn't have enough jobs. Ollie stated that it was the wage level not the number of jobs . Bill Demeules wanted to know if a company could also get TIF assistance. Ms. Koropchak stated that a company can get both if project meets requirements. Darrin Lahr stated he personally did not like putting criteria on companies. You could conceivably get a company you do not want if they meet all the criteria. The rationale for the EDA members was for informational purposes to the company. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY BARB SCHWIENTEK TO AMEND THE GMEF GUIDELINES TO INCLUDE THE FOLLOWING LANGUAGE UNDER CRITERIA 1 (8) AT LEAST 90% OF THE JOBS TO PAY A RATE EQUAL TO OR GREATER THAN 160% OF THE FEDERAL MINIMUM WAGE, EXCLUSIVE OF BENEFITS, FOR INDIVIDUALS OVER THE AGE OF 20 DURING THE TERM OF THE ASSISTANCE. Motion carried unanimously. 10. Consideration to review the DMRF Guidelines for possible amendments. Executive Director Ollie Koropchak introduced Pam Campbell from DAT to the EDA members. To comply with the DMRF Guidelines, Fund Guidelines Modification: the EDA shall, at a minimum, review the Fund Guidelines on an annual basis. It was suggestcd to consider deleting the name MCP on Page 4, Application Process and second paragraph on page 5. The Design Advisory Team is a commission of the City and the commissioners are appointed by the Council which is independent of the MCP. However, at this timc, the commissioners of D A T are members of the M CP Design . . . Committee. Also, members of the EDA wanted to clarify the verbiage for insurance and maintenance verus revitalization. Barb Schwientek felt that to try to define everything would get too complicated. The FDA should deal with it as it comes up. The EDA has been successful thus far. Darrin Lahr stated he wanted to make sure the bDA got all the information. He also felt that routine maintenance and insured losses should not be covered and we should put this on the application form. Barb Schwientek agreed that it should be on the application form. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY BARB SCHWIENTEK TO AMEND THE DMRF GUIDELINES '1'0 DELETE MCP FROM PAGE 4 AND 5, AND TO AMEND PAGE 4, NO.1 UNDER APPLICATION PROCESS TO READ: THE APPLICANT WILL MEET WITH CITY STAFF TO OBTAIN INFORMATION ABOUT THE DMRF, DISCUSS THE PROPOSED PROJECT, AND OBTAIN A FUNDING APPLICATION FORM AND A COPY OF SECTION 3, 4, AND 5 OF THE DESIGN GUIDELINES OF THE DOWNTOWN AND RIVERFRONT REVITALIZATION PLAN OF THE MONTICELL,O COMPREHENSIVE PLAN. THE APPLICATION FORM SHOULD STATE 'fEAT ROUTINE MAINTENANCE AND INSURED LOSSES WILL NOT BE COVERED. Motion carried unanimously. 11. Consideration to adopt priorities for redevelopment of the North Anchor (riverfront) and appoint two representatives to the Subcommitte Darrin Lahr read his list of five priorities: 1. Land Acquisition. 2. Increased Park Amenities. 3. Develop a Purpose for the Park. 4. Boundary Line Between Commercial & Residential. 5. Create Accessible River (Pathway). Ron Hoglund felt it was important to know how much land to acquire. What are the boundaries of the North Anchor. Clint Herbst felt he did not want to buy up land and turn it over to a developer. Barb Schwientek stated that once residents know you are interested in their property you have to pay top dollar. . Darrin Lahr stated that should not be setting a time limit and we need to decide how much land we need. He would like to see park land with commercial surrounding the park. Clint Herbst felt it was important to have a vision for that area. It should be a area for families. It docs not have to be done right now. Barb Schwientek felt that some type of business was needed to attract people. Darrin Lahr was concerned that it would become less public. Ron Hoglund felt it was important to decide what we wanted in the park. He felt that some type of eating establishment was important. Darrin Lahr voiced concern about preserving the land along the river. Once it is gone it is gone forever. Barb Schwientek also felt it necessary to define what the park was to be used for. Public funds may be needed to help maintain the park. . Ollie Koropchak reminded the EOA members that there needs to be three components considered: 1. Market driven. 2. Economics 3. Meeting the residents needs. Darrin Lahr stated that it would be necessary to create a tax base to help create what we wanted in the North Anchor. Bill Demeules stated the City can't do the park and then let it sit, it will not generate any taxes. Clint Herbst stated he did not want to spend a lot of money to acquire property. He again stated that he did not want to buy up a house and give the land to a developer for a restaurant. A MOTION WAS MADE BY CLINT HERBST AND SECONDED BY BARB SCHWIENTEK TO ADOPT THE FOLLOWING FIVE PRIORITIES TO ACHIEVE IN REDEVELOPMENT OF THE NORTH ANCHOR. . l. Define the boundaries of the North Anchor and define the boundaries of the public and private spaces within the North Anchor. Establish a purpose for the public space and establish an endowment fund 2. . . . ,., .J. for maintenance of the public space. Preserve and expand the public space (riverfront and park space). Development of a plan which is accountable to the taxpayers and citizens. Establish a time-line for development of the North Anchor. 4. 5. AND TO APPOINT COMMISSIONER BILL DEMEULES AND DARRIN LAHR TO THE NORTH ANCHOR SUBCOMMITTEE. Motion carried unanimously. 12. Executive Director's Report. Executive Director Ollie Koropehak reviewed her report to the EDA Commissioners. 13. Other Business. A. Discussion of Commercial Loans. Ollie Koropchak stated that she had received a call from the Monte Club regarding the possibility of expansion once they came into the City. They wanted information on commercial loans. After discussion, it was decided that the Executive Director, Ollie Koropchak should not pursue commercial businesses. If they did approach the City, the EDA would handle on one by one basis. 14. Adjournment. A MOTION WAS MADE BY BILL DEMEULES AND SECONDED BY DARRIN LAHR TO ADJOURN THE EDA MEETING AT 9:15 P.M. Motion carried unanimously.