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EDA Minutes 03-15-2001 . . . EDA M il1utes - 3/15/0 I MINUTES MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Thursday, March 15,2001 - 7:00 p.m. City Hall - Academy Room Members Present: Chair Bill Demeules, Vice Chair Barb Schwientek, Roger Carlson, and Darrin Lahr Absent: Ken Maus, Ron Iloglund and Clint I Icrbst S talT: Executive Director Ollie Koropchak and Recorder Lori Kraemer Guests: Pam Campbell, DAf Chair 1. Call to Order. Chair Bill Demeules called the meeting to order at 7:00 p.m. ! Consideration to approve the November 8. 2000 EDA minutes and the January 30, 2001 EDA summary of discussion. A MOTION WAS MADE BY DARRIN LAIlR AND SECONDED BY ROCil~:R CARLSON TO APPROVE '1'1 II': MINUTES OF THE NOVEMBER 8, 2000 EDA MEETING. Motion carried unanimously. A MOTION WAS MADE BY ROGER CARLSON AND SECONDED BY BILL DEMEULES TO APPROVE THE SUMMARY OF THE DISCUSSION HELD AT THE JANUARY 30, 2001 EDA MEETING. Motion carried unanimously. 3. Consideration of addin~ or removin~ agenda items. Koropchak added a discussion regarding expanding the target area fix the downtown revitalization plan. 4. Consideration to review li)r discussion the preliminary CiMI.:F application fi)l' Inte~rated ReevcIinl.! TechnoloQies, Inc. Steve Budd, Applicant Ollie Koropchak. Executive Direction. provided a copy or the GMEF Loan Application from Steve Hudd requesting an $80,000 real estate loan, and provided a summary of the proposed project. -I ~ . . . EDA Minutes - 3/1510 I Koropchak provided a brief description of the company. noting that Steve Budd is President and 1/3 owner of the company. The liRA approved the preliminary concept for $40.000 ofTlF pay-as-you-go assistance fl)r land write-down and the City Council gave their approval at their March 12111 meeting. The company proposes to purchase 2 acres of I-I property along rallon A venue to the immediate north of Pipeline Supply. The 10,000 sq ft steel structure with some brick will consist of production and otTice space. Proposed contractor is Tricon, Inc. Construction to begin soon as possihle. The company requires no outdoor storage. The company plans to create 5 new jobs tl1r the City of Monticello within two years. Koropchak also provided a list of uses and sources and the fund guidelines. and asked the melnhers to revievv the application Ii)r compliance with the EDA-GMEr Business Suhsidy Criteria. The EDA members discussed this project, noting their approval. No action was necessary. The members inquired ahout the late payment policy now in place and asked if this was standard, or mayhe needs to be changed to affect all future loans. 5. Consideration to review GMI':F No. 014 relative to late payments for action to call loan. Koropchak provided the background from the January agenda and the discussion at that meeting. Koropchak advised that she had since sent a letter to TJ. Martin regarding their late payment status and that she then received payment. She also noted that this item had been tabled from the January meeting hecause of the lack of quorum, however the members did discuss the potential to amend the GMEF Guidelines to include a penalty fee which would apply to future approved loans. Koropchak was requested to inquire with the local lenders as to the amount and type of penalty fees. Koropchak contacted several banks regarding their penalties for late fees and fi:mnd that one bank had a flat rate of $1 00 at 15 days plus accrued interest. and another bank had a tlat rate of $25 alter 10 days. Their was discussion that possibly when a loan is getting toward 60 days past due, the EDA should take some type of action. It was also stated that a late fee penalty could not he added on existing loans, but if they were to call a loan it could he added as part of the renegotiated terms. Koropchak explained that the GMEF Guidelines read: LkfE PAYMENT POLICY: railure to pay principal and interest when due may result in the loan being immediately called. Events of debult under the Loan Agreement: (a) f~lilure to pay when due any principal or interest on the Loan. -2- . . . FJM M illlltCS - 3115/0 I A MOTION WAS MADE BY BARB SCHWIEN'rEK AND SECONDED BY DARRIN I ,AHR TO AMEND TilE GMEF (iUIDELINES TO ADD LATE PAYMENT PENALTY FEE OF $250 AFTER PAST DUE AT 30 DA YS PLUS ACCRUED INTFREST. LANGUAGE DRAFT!;:D BY T1-IE EDA ATTORNEY. Motion carried unanirnously. 6. Consideration to approve or deny GME'" No. 018 for Inte!.!rated Recvclinl!: Technolof,!,ics. Inc. After review and discussion of the preliminary application fi'om Integrated Recycling Technologies. Inc. (lRTI). the EDA was asked to consider approval or denial of the request for a $80.000 GMEF loan. Koropchak noted that she had spoken with the lender who infi:mned her that the bank finds the company to be sound, although the bank also infixmed that they had not received sufficient information relative to the project to rnake a commitment fiJr funding.. Koropchak advised that first. the EDA must determine if this GMEF loan application from IR'rr will encourage economic development; second, they must determine if the proposed construction real estate project application complies with the EDA Business Subsidy Criteria - GMEF Guidelines, and lastly. the EDA must determine the amount and terms of the loan for approval. The City Council will consider ratification of the EDA 's action f()r compliance of the EDA-GMFF Business Subsidy Criteria on March 26, 2001. If approved, the GMEF will be disbursed at the closing date yet to be determined. It is recommended the approved dollars be disbursed from the (;MEF funds. The UDAG and Aroplax State Grant should be closed out. A MOTION WAS MADI': BY ROGER CARLSON AND SECONDED BY BARB SCHWIENTEK TO APPROVE GMEr LOAN NO. 018 fOR INTEGRATED RECYCLING TECI INOLOGIES, INC., AN "s" CORPORATION, IN THE AMOUNT OF $72,500 WITH A 1,'IXED INTEREST RATE OF 6.50;{), LOAN FEE APPLICATION OF $200, AND AMORTIZATION NOT TO EXCEI'D 30 YEARS. WITI I A BALLOON IN 5 YEAI.zS. COLLATERAL (J{JARANTFES, AND OTHER CONDITION REQUIREMENTS TO BE DFTI':RMINI~D AND PREPARED BY THE (;MEF ATTORNEY. THE GMEF LOAN APPROVAL SLJBJECT TO LENDER COMMITMENTS, VERIFICATION OF COMPANY FINANCIAL CREDIT ABII.ITY. AND COUNCIL RATIFICATION OF EDA ACTION. EXECUTIVE DIRFCTC)R TO NOTIFY APPLICANT OF /'I IF AMI':NDMI':NT TO /'I IE FDA GUIDI:L,INES REGARDING LATE r''EE PENALTY. Motion carried unanimously. -3- . . . EDA Minutes - 3/1 5/0 I 7. Consideration to review for approval/disapproval the second DMRF application f(x 113 West Broad\vav. Koropchak advised the members of previous discussion regarding this item which was tabled from the January 30 meeting because of the lack of quorunl. Mr. Ileaton was present at the January meeting and informed those EDA members present of the high cost to remove paint. repair brick and repaint; remove paint and repair brick; or IT-brick. lie also 111entioned it was his understanding the awning was approved f(Jr funding with the first application. Koropchak also provided copies of DA T minutes. After the approvals by DA T and ED^. Heaton elected not to move forward with the brick facade options and proceeded with a front facade treatment of stucco retaining the cornice and installing a canvas awning. Prior to applying the stucco, Mr. Ileaton informed the Building Official and FDA Otlice of his change in plans and the OAT Chair was notified. Mr. Heaton inquired if the awning would qualify f(Jr funding. he was advised to re-apply with the knowledge of no promises. The awning was included with the three (brick L1cade) plans and bids approved by the DAT and FDA. On January 2, 2001 OAT was requested to review the design of the awning associated with the second funding application. DA T did not accept the application as the request came after the installation of the awning. It was the Office of the FDA that suggested Mr. Ileaton submit a new application for funding. It appears that the first approved DA T plans include awnings with either of the brick facade options. In review of the approval for the design and funding of DMRF No.1 07, it appears Mr. Johnson received approval for design and funding for the awning on the Mep office at the time the stucco was applied. The DAT review noted stucco would not be recommended if this were a restoration but for rehabilitation purposes it is just fine. However. Mr. Johnson was never reimbursed because he did not complete the cornice treatment as approved. Mr. Heaton stopped by the Office of the FDA on October 17 or November 1.2000 relative to his change in plans. DAT and Bob Claybaugh were both notified f(H" input and to encourage the brick Llcade as well as city staff. 'lhe building permit I(Jr the stucco was issued October 23.2000. and the permit I()r the awning was mailed December 21. 2000. The DMRF application is dated December 27.2000. It is unclear as to the commencement or completion date of the installation of the awning. Certainly every effort was made by the city staff and DA T to encourage a brick facade treatment. Pan1 Campbell, DAT Chair. advised that the other two options approved by DAf were less expensive. but Heaton chose to do something that he knew DA T would not approve. -4- EDA Minutes - 3/15/0 I . Pam also advised that there is an appeals process and it was stated that the applicant can take that action which goes directly to the Planning Commission. [t was clarified that Dkr approves a whole plan versusjust pieces of a plan. and also DAT/I.:DA would not approve something aileI' it was already done, stating it may set a had precedence. Roger Carlson stated that the applicant may have known that the stucco wasn't going to he approved. and therefore re-applied for just the awnings. Again it was stated that it was the timing of the application, which was after the l~lCt. Panl also noted that a OAT member had previously asked whether OAT should have asked a different question. that being "did the awning meet the design standard sT'. and she stated it probably would have. Campbell stated she asked if DAT wanted to review this again and they stated they did not. Darrin Lahr stated that possibly there was verbage that OAT could use in their "application" stating that it has to be f()lIowed in full or it would not be funded. Further discussion stated that the applicant could argue that the awnings were always a part of the plan and therefore he should be reimbursed. . Although it is very important for the EDA to endorse the DAT design findings, it is also important that the design approvals he consistent. Everyone worked very hard to encourage this project as a prime example for downtown revitalization and was let down with the stucco l~lCade; however, the second application is for funding of the awning only. similar to another application. Whether OATs request to review the application came after completion of the installation of the awning is unclear to the Ortice of the ED^- Koropchak noted it was her lack of responsibility f()r not having Mr. Heaton fill out the application or give him an application on October 17. The issue is not the timing but "docs the awning meet the Design Guidelines?". A MOT[ON WAS MADE BY BARB SCHWIENTECK AND SECONDED BY DARRIN LAI-IR TO DENY APPROVAL OF DMRF FOR I 13 WEST BROADWAY. AND THAT THE APPLICANT BE INFORMED OF TI IE APPEALS PROCESS. Motion carried 3 to I with Roger Carlson voting in opposition. 8. Executive Director's Report. Koropchak advised that she had talked with Ryan Companies who was gathering inllll'll1ation regarding conlmunities located on 1-94; also stated he was interested in the proposed Chadwick property if acquired by the City. Re(hving Foods - offer not accepted by [I-Windows. Advised of the [DC meeting held earlier that day and Carlson added that regarding the . -5- . . . FDA Millutcs-3/15/01 Chadwick property. it had been a long negotiation process and an offer has been made so it is moving forward, 9. Other Business. a) Annual meeting orthe FDA - Tuesday. April 24.2001. b) Koropchak added a discussion regarding expanding the target area !()r the downtown revitalization plan. noting that someone had contacted her requesting extending the downtown revital ization boundaries as this person owns property outside of the area. and was looking to restore fix commercial use. Koropchak advised that it would not fit as the zoning is R-2. so the point is Illute as far as expanding the boundaries. Koropchak stated the members might want to discuss proceeding with the downtown revitalization fund program. want to consider extending boundaries of the targeted areas. advising that these questions would be asked at the annual meeting. Carlson requested maps be provided ]()r that meeting showing the boundaries. 10. Adjournment. A MOTION WAS MADE BY BILL DEMEULES AND SECONDED BY BARB SCHWIFNTEK TO ADJOURN THE MEETING AT' 8: 15 PM. Motion carried. ~'~ -6-