EDA Minutes 11-08-2000
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MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Wednesday, November 8,2000 - 7:00 p.m.
City Hall - Academy Room
MEMBERS PRESENT:
Chair Bill Demeules, Roger Carlson, Ron Hoglund, and Darrin
Lahr.
MEMBERS ABSENT:
Vice Chair Barb Schwientek, Assistant Treasurer Ken Maus, and
Clint Herbst.
STAFF PRESENT: Treasurer Rick Wolfsteller and Executive Director Ollie Koropchak.
GUESTS:
None.
1. Call to Order.
Chair Demeules called the EDA meeting to order at 7:03 p.m.
2.
Consideration to approve the August 29.2000 EDA minutes.
Ron Hoglund made a motion to approve the August 29, 2000 EDA minutes. Seconded by
Roger Carlson and with no corrections or additions, the minutes were approved as
written.
3.
Consideration of adding agenda items.
Additional information relative to DMRF No. 111 (Bruce Hamond) added under 6.
Director's Report.
4. Consideration to approve extending the balloon payment date for GMEF Loan No. 010
(Blue Chip Development Company).
At the request of Jim Harwood and Brad Barger, the EDA is asked to consider extending
the balloon payment date from December 1,2000, to December 1,2005, for GMEF Loan
No. 010 for Blue Chip Development Company dba Vector Tool & Mfg, Inc. Assuming
the November 1, 2000, payment is received, the remaining principal balance is $42,962.81.
The $50,000 real estate loan was approved on September 13, 1995, at 6.75% fixed
interest rate and amortized over 20 years with a five-year balloon payment. The
conventional lender is Firstar Bank, Gary Taverna.
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EDA Minutes - 11/8/00
The request to extend the balloon payment is not because Blue Chip "the borrower" is
unable to refinance. The request is due to the high cost of refinancing due to unusual
circumstances of the real estate parcel split for Vector Tool and the B&B Metal Stamp
buildings. The EDA Business Subsidy Criteria, GMEF Guidelines state under Deferral of
Payments: 1. Approval of the EDA membership by majority vote. 2. Extend the balloon
if unable to refinance, verification letter from two lending institutions subject to Board
approval.
The EDA noted the following:
1. Firstar Bank submitted a letter of support to extend the balloon payment date and
noted the lenderlBlue Chip loan had been paid to date according to contract terms.
2. The EDA/Blue Chip loan agreement in good standing as of October 30,2000.
3. The CMIFIBlue Chip loan agreement in good standing as of November 8, 2000.
4. Prime rate, November 8, 2000, 2:00 p.m., First Bank, 9.5%.
5. EDA-GMEF current cash balance approximately $600,000.
Because of a timing issue and the unusual high costs associated with refinancing the real
estate loan and cost of appraisals of the split lot, Roger Carlson made a motion to extend
the balloon payment date from December 1, 2000, to December 1, 2003, for GMEF Loan
No. 010 (Blue Chip Development Company) at a fixed interest rate of7.5%. Preparation
costs associated with amending and reaffirming the documents, the responsibility of the
borrower. The motion was subject to submission of credit worthy current year financial
statements or financial summary for Vector Tool from a CPA. Ron Hoglund seconded
the motion and with no further discussion, the motion passed unanimously. The requested
five year balloon date extension was reduced to three years to ensure an adequate funding
balance of the EDA/GMEF and the fixed prime rate was increased to 2% below the
current prime rate to discourage similar request.
5.
Public Hearing - Consideration to adopt a resolution amending the EDA Business Subsidy
Criteria.
Based on the authorization of the EDA at their August 29,2000 meeting, a public hearing
notice appeared in the local newspaper October 26 and November 2,2000, relative to the
proposed amendments to the EDA Business Subsidy Criteria.
The proposed amendments included an increase to the wage level (a wage of the higher of
$9.00 per hour, or at least) and other criteria affected the Legislative action. The
proposed amendments provide consistency between the HRA and the EDA Business
Subsidy Criteria.
Chair Demeules opened the public hearing for comments and hearing no public comments,
closed the public hearing.
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EDA Minutes - 11/8/00
Roger Carlson made a motion to adopt EDA Resolution No. 00-2 amending the EDA
Business Subsidy Criteria as proposed. Darrin Lahr seconded the motion and with no
further discussion, the motion passed unanimously.
6. Executive Director's Report.
The EDA accepted the Director's report and invoice of $204.19 as submitted with the
agenda with the exception to the following addition.
Koropchak provided each commissioner with a copy of the request from Bruce Hamond
relative to the approved DMRF No. 111 and an excerpt of the DMRF Guidelines. After
discussion, the commissioners elected to retain the guidelines for the DMRF rehabilitation
loan as stated: The rehabilitation loan will be in a subordinated position to the lender.
The commissioners agreed the intent ofthe EDA programs are not as competitive dollars
with the lending institutions and felt the combination of the below EDA prime rate and the
lender rate provided for a blended interest rate. Ron Hoglund made a motion that
approved DMRF No. 111 rehabilitation loan remain in second position behind the lender.
The approved loan remains at an amount of $1 0,644, fixed interest rate of 5.5%, 10 year
amortization with balloon payment is 3 years. The non-performance date for DMRF No.
111 to be extended from May 29,2001 to August 29,2001, per the request. Roger
Carlson seconded the motion and with no further discussion, the motion passed
unanimously.
7.
Other Business.
None.
8. Adjournment.
The EDA meeting adjourned at 8:40 p.m.
OL \~"'O ~S)~
Ollie Koropchak, RecorderlExecutive Director
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