EDA Agenda 04-27-2004
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ANNUAL MEETING AGENDA
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, April 27, 2004 - 4:00 p.m.
City Hall - Academy Room
MEMBERS:
Chair Bill Demeules. Vice Chair Barb Schwientek, Roger Carlson, Robbie Smith, Clint
Herbst, Ron Hoglund, and Darrin Lahr.
STAFF:
Treasurer Rick Wolfsteller, Executive Director Ollie Koropchak, Recorder Angela
Schumann.
GUEscrs:
Al Loch, Block 35 property owner.
Bruce Hamond, Visicom, Inc.
Pat Jensen, GWJ, LLC
I . Call to Order.
2. Consideration to approve the April 20, 2004 EDA minutes.
3. Consideration of adding or removing agenda items.
4. Continued - Consideration of a request from Aroplax Corporation to extend the balloon payment
date for GMEF No. 016.
5.
Consideration of a request from VisiCom to extend the balloon payment date of DMRF Loan No.
III.
6. Consideration of a request from GWJ, LLC to extend the Compliance Date ofGMEF Loan No.
019.
7. Consideration to review Block 35 facade improvement concept and costs, contract, final site
improvement concept, public/private ratio for approval of ED A funding and to request Council to
approve the concept and to order a feasibility study.
8. Consideration to elect 2004 BOA officers.
9. Consideration to revicw and accept thc year-end EDA Financial Statements, Activity Report, and
proposed 2004 Budget.
10. Consideration to review year-end balances of the GMEF, OMRF, UOAG, and ERG Funds.
II. Consideration to review for amendment the Business Subsidy Criteria and Bylaws of the EOA.
12. Executive Director's Report.
13. Other Business.
14.
Adjournment.
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EDA Agenda - 04/27/04
4.
Continued - Consideration of a reauest from Aroplax Corporation to extend the
balloon payment date for GMEF No. 016.
A. Reference and background:
At the EDA meeting in January 2004, the commissioners discussed a request by Aroplax to
extend the balloon payment date of Deeember 1,2004, for GMEF No.016. The request was
made purely for the purpose as an incentive and not because the company is unable to
refinance. Some commissioners felt the extension may be an opportunity for the city to
demonstrate interest in promoting a pro-business climate. The EDA directed staff to explore
any legal ramifications of the extension and criteria changes reporting back at the next EDA
meeting. Additionally, to communicate with Aroplax on the EDA's consideration of the matter.
Following the January meeting, I contacted Aroplax and reported on the EDA's discussion and
requested follow-up. I then contacted EDA Attorney Bubul for his input. He was surprised
and did not recommend the EDA consider amending the Business Subsidy Criteria for this
purpose as an amendment of this sort would open the door for every loan balloon payment date
to be extended. The purpose of the balloon payment is to recycle the GMEF dollars so more
loans can be approved for existing businesses or new businesses. The EDA has approved two
loans for Aroplax, three loans for Tapper's, and two loans for Standard Iron, all existing
businesses. The City and EDA are promoting a pro-business climate by approving new loans
for existing businesses provided that new jobs are being created. Back in January 2003, the
EDA denied a request from B&B Metal Stamping to amend the Business Subsidy Criteria for
the purpose of job retention.
Given the recommendation of EDA Attorney Bubul, I contacted Aroplax a second time and
noted per the Business Subsidy Criteria, the balloon payment date could only to extended if
Aroplax was unable to refinance and the request must be accompanied by a verification letter
from two lenders or the EDA would need to amend the Business Subsidy Criteria. The EDA's
attorney recommendation was noted and Aroplax again said "They only asked assuming a
something was already in place". With no hard feelings, Aroplax withdrew their request for
an extension of the balloon payment date. The company is able to refinance in December
2004.
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EDA Agenda - 04/20/04
5.
Consideration of a request from VisiCom to extend the balloon payment date of
DMRF Loan No. llt.
A. Reference and backeround:
Bruce Harnond, VisiCom, Inc., is requesting the EDA extcnd the balloon payment date for
DMRF Loan No. Ill. This interior rehabilitation loan in the amount of $l 0,644 was the only
DMRF loan approved by the EDA. Unlike the GMEF Guidelines and Business Subsidy
Criteria, the DMRF Guidelines for rchabilitation loans are less restrictive only stating: Loan
amortization schcdule not to exeeed ten years, balloon payment in five years. There is no
reference to extending the balloon payment, perhaps, because the maximum loan amount is the
lesser 01'25% of total cost of improvements or $20,000.
The request is to extend the balloon payment date until such time the lender, First Minnesota
Bank, has approved a ncw loan combining the existing bank loan and the new loan for the
proposed construction of a building on the vacant lot located on the second block along West
Broadway. ft is Mr. Hamond's plan to construct a two-story 1,600 sq ft per floor, retail/office
building. Second floor being rental housing or office. The exterior facade of the existing
building and the new constructed building is proposed to have a uniform look. The facade
design has not been submitted to DAT. I did request Mr. Hamond provide a letter from First
Minnesota stating an application for funding has been requested and the anticipatcd approval
date by the bank. See Attachment A. Letter from Paul Kleinwachter, First Minnesota Bank.
TheEDA approved DMRF Loan No. 111 on August 29, 2000, and the rehabilitation loan was
disbursed on April 10, 2001, in the amount of$10,644, 5.5% interest rate, amortized over 10
years; provided, however, the entire remaining unpaid balance of principal and interest shall be
due and payable in full on May 1,2004. The payments of principal and interest shall
commcnce on May 1, 2001 and continue on the first day of each and every month thereafter
until paid in full. On July 19,2001, thc EDA approved an ammal payment of principal and
interest. The attached invoice was mailed March 18, 2004, relative to the balloon payment due
May 1, 2004. A check in the amount of $2,000 was receivcd on April 6, 2004, leaving a
balance of $6,073.01 due May 1,2004.
U. Alternative Action:
1. A motion to approvc extending the balloon payment datc from May l, 2004, to
November 1,2004, for the Loan Agreement between the Monticello EOA and
VisiCom, Inc. dated April lO, 2001.
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EDA Agenda - 04/20/04
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2.
A motion to deny approval to extend the balloon payment datc of May 1, 2004, for the
Loan Agreement between the Monticello EDA and VisiCom, Inc., dated April 10,
2001.
3. A motion to table any action.
c. Recommendation:
The City Administrator and Executive Director recommend alternative no. 1. The reasons
being:: This a DMRF Loan will less dollar risk, no specific DMRF Guidelines relating to
balloon date extension, sufficient EDA funds, encourages spin-off downtown redevelopment,
given lenders letter stating approval for construction financing subject to bank appraisal and first
floor tenant lease, and recommendation by lender to extend for six months.
D. Supporting Data:
Excerpts from Loan Agreements and DMRF Guidelines, balloon payment invoice of March
2004, and Letter from Lendcr.
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MINNETONKA
4625 County Road 101
(952) 933-9550
BROOKLYN PARK
8500 Edinbrook Pkwy, #A
(763) 488-1568
MONTICELLO
106 East 4th Street
(763) 271-7200
BUFFALO
555 Highway 55
(763) 682-0555
MAYER
101 Ash Avenue North
(952) 657-2500
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GLENCOE
606 East 11th Street
(320) 864-3161
HUTCHINSON
308 Main Street South
(320) 587-8800
STEWART
737 Hall Street
(320) 562-2553
SHOREWOOD
24000 Highway 7
(952) 474-2126
FIRST MINNESOTA
MORTGAGE
SHOREWOOD
24000 Highway 7, #210
(952) 392-3682
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FIRST
MINNESOTA
BANK N.A.
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Ollie Koropchak
Economic Development Director
City or Monticello
505 Walnut Street
Suite 1
Monticello, MN
April 20, 2004
RE: EDA Loan/Hammond Property
Dear Ms Koropochak;
Weare currently processing a financing package for Mr. Bruce Hammond
related to improving his real estate property located at 215 and 220 West
Broadway. We are aware that the EDA has provided financing related to
improvements to the property located at 212 West Broadway and that there is a
principal balance outstanding.
Mr Hammond has informed us that the referenced EDA financing package
provided to him has a balloon maturity of May 1,2004 with an estimated
principal balance of $6,073 remaining. We would respectfully request an
extension ofthe EDA Joan balance on Mr. Hammond's behalf for a period of six
months.
The six month extension will provide ti.me for Mr. Hammonpto proceed with a
construction financing package with First Minnesota Bank which will payoff
the EDA loan. The financing will also fund a construction project on the
adjacent vacant lot at 220 West Broadway with additional funds for construction
improvements to 212 West Broadway.
The financing project is currently awaiting receipt of an appraisal and
verification of tenant occupancy and cash flow information. If you have any
further qt;9stions, please feel free to contact me directly.
S' Jid"J'" ~ ,~
mc.. e.. Ie y. . .' ,/.,,.,.,/'
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P'!.U.....J e' . wac~ter
President '--__----".....
Established 1881
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LOAN AGREEIVIENT
This I.oan /\gn.:ell1ent ("Agreel11ent"') is madl' this /a_._ day of.4L'___~! . 200 I. hy
VisiCom. Inc.. a iVlinnl'sota corporation ("Burrll\vcr") and tl1L' i'vlonticl'llo Ec~ornic Dl'\'l'lopml'nt
Authority ("Lenckr"). a puhlic hody corporate and politic under the lavvs or Minnesota,
RECllf\[,~
i\. In consideration Il.)!' thc loan cOlltemplated by this Agrl'erl1l'nL Borrower is l':\l'cuting
and delivering to Lemler this LO~ll1 !\gnXl11l'llt.
B, I ,endl'r agrees to loan to Borrower the ma:\illlUIl1 amnunt or $1 0,644 tn pay a portion
ur the costs ("Prnjl:ct (usts") related tu the rl'hahilitation uf a building located within the City at 216
West Broadvvay (""Propl'rty""),
Aceo R DI N C; L Y. to induce Lender to make the Loan to Burrower. and fl.)!' goud and
valuable consideration. the receipt and sutlicil'llCY of which are hereby ad,nov\blged. the parties
hereto agree ~IS t()llo\\s:
1, The Loan Amount. Subject to and upon the telms ami conditions ur this Agreement.
Lender :lgre'?S to loantu BOITU\ver the sum of Tell 'rhousand Si:\ I Iundr..:d Fnny-Fulll' and no! I OOths
I)ull~w; (S 10.(44), or so much thereof as is dishursl'd to BorrU\\er in accurdanee vvith thiS
,\grl'l'ml'nt ("l.uan") The Loan shall be cvidencl'd by a promissory nole ("Nutc") payable by
Bornml'r to Lender and substantially in the form of F:\hibit ^ attached tu this Agreel11el1L vvhich
shall hl' dated as of the date 01' this Agreement. Proceeds or the Loan shall be disbursl:d in
accordance vvitll Section 3 hl'reof
l
Repavlllent OrLO~l!J' The Loan shall be r('paid with intl'rl'st as Il.lllows:
(a) Interl'st at thl' rate of live and one-half pl'rcent (5,50%) per annum shelll
:lccrue I'rom thl' Loan Closing Date (as hereinalkr ddined) until the Loan is repaid in t'ul!.
(h) PaYlllents ('I' principal :\Ild interest shall COnHlll'nCl' on May 1. 2001 a III I
conti nul' on (he lirst lby 01' l'ach and every ll10nth thl'rl'alkr until paid in I'ul!. Sueh
paYTlll'IHS slwll I'ully illl1urti/e the LOiln over ten (10) years; provided. 110Wl'Vl'l'. the entire
remaining unpaid balance oC principal and interest shall be dul' and paYilbil' in I'ull on Ivl~IY
I . 2004,
I ) i sb U rsl' ml' n t oLl_J.!_illlJ~L(l<;_I,~~ds,
(il) The I.oan pnlcel'ds slwll he paid to Bmrovver on /\prill0. 200! or such otller
date as the pilrlil's hereto agrl'e ("Loelll Closing I)il(e"),
(b) The 1()llmving events shall he conditions prl'eedent to thl' paynlL'nt or the
I,(lelll proceeds to 1~()JT()\\l'r on the [,oan ('losing I )ate:
I ll( j.. III 'kill \ I
,\I~.\,?'-I (I
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FACADE GRANTS
The EDA may provide matching grants in the following amounts:
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Up to $2,500 for eligible improvements to the front facade and signage.
*
Up to $2,500 for eligible improvements to promote improvements to the rear
sections of the buildings.
*
Up to $2,500 for eligible improvements to the side facade (if applicable).
To be eligible for grant funds, projects must meet the following criteria:
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*
Improvements must comply with applicable design guidelines and all codes and
ordinances including building permits and inspections.
*
The grant will match private investment up to the stated limit.
*
Grant funds will be provided after completion of the improvements.
*
Applicants will provide the EDA with documentation of the actual cost of the
improvements.
Meeting the eligibility criteria does not entitle an applicant to funding. The distribution of grant
funds is the sole decision ofthe EDA.
REHABILITATION LOAN
/ The EDA may provide loans for the rehabilitation of existing buildings. The maximum loan
i amount is the lesser of25% of total cost of improvements or $20,000. To be eligible for
{ rehabilitation loans, projects must meet the following criteria:
I
I
I
L,
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*
Improvements must comply with applicable design guidelines and all codes and
ordinances including building permits and guidelines.
*
Applicants must provide proof of financing for costs not funded by the grant.
*
Loan amortization schedule not exceed ten (10) years, balloon payment in five (5)
years.
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DMRF GUIDELfNES
*
The interest rate on the loan will be two percent (2%) below the Prime Rate. The
EDA may reduce the interest rate to encourage the reuse of a currently vacant
building, the retention of an existing business, or the creation of a new business.
*
The rehabilitation loan will be in a subordinated position to the lender.
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FEE REIMBURSEMENT
The EDA may grant reimbursement of City fees associated with undertaking improvement and
revitalization projects in the downtown area. The amount of the reimbursement will be the
equivalent often percent (10%) of the total cost of the improvements up to a maximum of$500.
Fees eligible for reimbursement include building permits, other city inspections, and land use
ordinances. To be eligible for fee reimbursement, projects must meet the following criteria:
*
Projects must comply with applicable design guidelines and all codes and
ordinances including building permits and inspections.
*
Reimbursement will be made after completion of the improvements.
*
Reimbursement will be based on documentation of actual improvement costs and
fees paid.
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MAXIMUM FINANCIAL ASSISTANCE
The maximum amount of financial assistance available to each rehabilitation property is an amount
not to exceed $25,000.
NON-PERFORMANCE
Approved DMRF shall be null and void if funds are not drawn or disbursed within 270 days from
date of ED A approval.
ORGANIZATION
The Downtown Monticello Revitalization ~Fund is administered by the City of Monticello
Economic Development Authority (EDA), which is a seven-member board consisting of two
Council members and five appointed members. EDA members are appointed by the Mayor and
confIrmed by the City Council. Formal meetings are held on a quarterly basis. Please see the
by-laws of the EDA for more information on the structure of the organization that administers the
Downtown Monticello Revitalization Fund (DMRF).
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crrv OF !viONTICELLO
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4/20/2004
P,L\YfViENT DUE
..is 1
J.,I.I<l
l'h()I1(::
F;:lx:
(7(iJ) ::I)S 2711
(7(il) N') 44(14
(I '>~, irilc-lIesl pm rnol1th will bc' cllarqed
uttUI' tlIC: clue Clillt,,)
'-OMER_ArIDRESS====J
Visi Com Inc.
PO Box 488
Monticello MN 55362
Mclke checks payable to Ci1V of Monticello
(
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CUSTOMER ACCOUNT
5858
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PEOlJECT
PID NUMBER
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~SCRI PTION
-~1:1J7IT61l-Cj5T8-S---'
NSF CHECKS ARE SUBJECT TO
ELECTRONIC RECOVEEY W/ AN
ADDITIONAL SERVICE FEE
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AMOUNT
CATEGORY
MIse -LOAN
A - DMRF Loan No. 111
terest payment 37
E MAY 1, 2004
250.18601
36.83
A Loan Agreement
incipa.l balance
1--': MAY 1, 2004
250.18601
8036.18
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TOTAL TO PAY
8073.01 *
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VISICOM, INC.
BRUCE A. OR CYNTHIA M. HAMOND 75~a6~~~9j9, 4060
LlC_ H"553-098'067-298 .H-S53.132-S85-S43 ij-~. 'illl-
P,O, BOX ',S8 _'-
MONTICELLO, ,"IN 55362 l' \Tri' ,
,1\~~' ~ :o~~~~o
FIRST
:- MINNESOTA ~.
BANI( N.A. .
M'M'~+LL~06~ (It,.., rnc>,-/
I: 0 q l. q 0 2 :) 5 3 I: 7 a 0 0 l. 2 3 /I- l. 0 b 0 .
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EDA Agenda - 04/27/04
6.
Consideration of a request from GWJ. LLC to extend the Comolianee Date of GMEF
Loan No. 019.
A. Reference and background:
The EDA entered into a Loan Agreement with OWJ, LLC on August 30, 2001, and on that
date the $30,000 real estate/construction loan funds wcre disbursed at the closing. Within the
Business Subsidy Agreement portion of the Loan Agreement, the company committed to create
at least three new full-time equivalent jobs within two years from the date any funds were
disbursed, the "Compliance Date". Therefore, the "Compliance Date" is August 30, 2003.
As reported on the 2004 Job and Wage Level Form and the 2004 Minnesota Business
Assistance Form, the company has created the two jobs which satisfied one of the wage level
criteria: At least 2 new jobs shall pay no less than $18.00 per hour, exclusive of benefits. You
will note, those jobs exceed the criteria one paying more than $20 per hour and the other more
than $22 per hour. The company has yet to create at least one new job at pay of no less than
$10 per hour, exclusive of benefits.
OWJ, LLC is in default of the Loan Agreement and is requesting an extension of the
"Compliance Date" from August 30, 2003, to August 30, 2005, a two-year extension. Please
note page 4, questions 35-39, of the completed 2004 Minnesota Business Assistance Form
(Attachment C).
According to Pat Jensen who will be present at the EDA meeting, the default of the Agreement
is due to the economy and the down~turn in manufacturing the past couple of years. The HRA
and City previously extended the compliance date for the TIF and Loan Agreements,
respectively, for Twin City Die Castings.
B. Alternative Action:
1. A motion to approve extending the Compliance Date from August 30, 2003, to August
30,2005, within the Loan Agreement between OWJ, LLC and the Monticello EDA
dated August 30, 2001, for OMEF Loan No. 019.
2. A motion to deny approval to extend the Compliance Date within the Loan Agreement
between OWJ, LLC and the Monticello EDA dated August 30, 2001.
3. A motion to table any action.
EDA Agenda - 04/27/04
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c.
Recommendation:
The City Administrator and Executive Director recommend Alternative No. 1 because the loan
is of good standing, down-turn in the economy hit the manufacturing sector hard, other city
agencies extended the compliance date, promotes a pro-business climate, and is consistent with
MN DEED's position.
D. Supoorting Data:
Excerpt horn Loan Agreement, Job and Wagc Level Report, and MN Business Assistance
Form.
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extension of such time prior to its expiration; provided, however, if the failure stated in the
notice cannot be corrected within the applicable period, Lender will not unreasonably
withhold its consent to an extension of such time if corrective action is instituted by
Borrower within the applicable period and is being diligently pursued until the Default is
corrected, but no such extension shall be given for an Event of Default that can be cured by
the payment of money (i.e., payment of taxes, insurance premiums, or other amounts
required to be paid hereunder);
(f) any breach by Borrower of any other agreement between Borrower, and
Lender, the City of Monticello, Minnesota, or the Housing and Redevelopment Authority in
and for the City of Monticello, Minnesota (the "HRA").
6. Business Subsidy Al!reement. The provisions of this Section constitute the
"business subsidy agreement" between Borrower and Lender for the purposes of Minnesota
Statutes, Section l16J.993-.995 (the "Business Subsidy Act").
(a) General Terms. The parties agree and represent to each other as follows:
(1) The subsidy provided to Borrower by Lender consists of the Loan made
pursuant to this Agreement.
(2) The public purposes of the subsidy are to promote a machining facility in the
City, increase net jobs in the City and the state of Minnesota (the "State"), and increa<>e the
tax base of the City and the State.
(3) The goals for the subsidy are: to secure development of improvements of the
Property; to maintain such improvements as a machining facility for at lea<>t 11ve years as
described in clause (6) below; and to create the jobs and wage levels in accordance with
Section 6(b) hereof.
(4) If the goals described in clause (3) are not met, such failure to meet the goals
will constitute an Event of Default on the part of Borrower.
(5) The subsidy is needed because land acquisition and development costs make
development of the Property infeasible without public assistance.
(6) Borrower must continue operation on the Property of a machining facility for at
least 11ve years after the date of issuance of the certit1cate of completion.
(7) Borrower does not have a parent corporation.
(8) In addition to the assistance provided under this Agreement, Borrower does not
expects to receive any additional assistance in connection with the Property.
(b) Job and Wage Goals. Within two years after the 11rst date on which any funds are
disbursed pursuant to this Agreement (the "Compliance Date"), Borrower shall cause to be created
D1G~ I 98137v3
MN325-Il
4
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at least 3 new full-time equivalent jobs on the Development Property (the "New Jobs") and shall
cause the wages for the New Jobs to be as follows: (i) at least 1 New Job shall pay no less than
$10.00 per hour, exclusive of benefits; and, (ii) at least 2 New Jobs shall pay no less than $18.00 per
hour, exclusive of benefits.
(c) Reports. Borrower must submit to Lender a written report regarding business subsidy
goals and results by no later than January 25 of each year, commencing January 25, 2002 and
continuing until the later of (i) the date the goals stated Section 6(a)(3) are met; or (ii) if the goals
are not met, the date the Loan is repaid in full. The report must comply with Section 116J.993-.995,
subdivision 7 of the Business Subsidy Act. Lender will provide information to Borrower regarding
the required forms. If Borrower fails to timely ftle any report required under this Section, Lender
will mail Borrower a warning within one week after the required ftling date. If, after 14 days of the
postmarked date of the warning, Borrower fails to provide a report, Borrower must pay to Lender a
penalty of $100 for each subsequent day until the report is filed. The maximum aggregate penalty
payable under this Section $1,000.
(d) Audits. Upon written request of Lender or City in any year, Borrower shall retain at its
expense an independent, third party accountant to audit any job and wage report submitted by
Borrower under paragraphs (d) or (f) of this Section. Borrower must deliver to Lender a written
report from the accountant promptly upon completion of such audit.
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7. Lender's Remedies upon Borrower's Default. Upon an Event of Default by
Borrower and after provision by Lender of written notice, Lender shall have the right to exercise
any or all of the following remedies (and any other rights and remedies available to it):
(a) declare the principal amount of the Loan and any accrued interest thereon to
be immediately due and payable upon providing written notice to Borrower;
(b) suspend its performance under this Loan Agreement;
(c) take any action provided for at law to enforce compliance by Borrower with
the tenus of this Agreement and the Note;
(d) exercise its rights under the Guaranty; and
(e) exercise its rights under the Mortgage.
In addition to any other amounts due on the Loan, and without waiving any other right of
Lender under any this Agreement or any other instrument securing the Loan applicable
documents, Borrower shall pay to Lender a late fee of $250 for any payment not received in full
by Lender within 30 calendar days of the date on which it is due. Furthermore, interest will
continue to accrue on any amount due until the date on which it is paid to Lender, and all such
interest will be due and payable at the same time as the amount on which it has accrued.
. 8. Lender's Costs of Enforcement of Agreement. If an Event of Default has occurred
as provided herein, then upon demand by Lender, Borrower shall payor reimburse Lender for all
DJG~198I37v3
MN325-Il
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DEVELOPMENT SERVICES
I'holle:
Fa:\:
FIlHlil:
Economic Dcycluplllent DirectPI-
MONTICELLO
CITY OF MONTICELLO, MINNESOTA
JOB AND WAGE LEVEL - EXISTING JOBS
(763) nl-32ok
(7(,3) :N5-IW4
n.!.lLsl~!w~!i.!hc!.!..!iQl()'ll i cc:ll,)_mn .1IS
Please indicate number of current employees at eaeh level and indicate the corresponding benefit level.
Number of Jobs
Hourly Wa~e
Level
Ful i-time
Part-time
(Excl. benefits)
.---"'-----
Less than $7.00
$7.00 to $7.()<)
$8.00 to $9.99
$Io.no to$II.99
$12.00 to $13.99
$14.00 to$15.99
$16.00 to $17.99
$18.00 to $19.99
-A-
X
$20.00 to $21_99
$22.00 and higher
('Ulllrany Name .L.o/!?~_~...________________________
.1()IISW/\(,J.~
Houri\' Value
of V olJlntill}:
Benefits (S)
1-._
. DJ.
~--
Monticello City Hilll, 505 Walnut Street, Suite I. Monticello, MN 55362..XX3! . (763) 295-2711 . Fax: (763) 295-4404
Ollie;(: of Public Works, 90<) (Jolf Course Rd., Monticello, MN 55.162 . (763) 295-3170. FilX: (76.1) 271-3272
8/30/2001. .. d ( . 21) i
Please fillm date agreement Slgne same as question ~
Minnesota Business Assistance Form RttA~ ~ ~
.
The Minnesota Business Assistance Fonn (MBAF) is used to report each business subsidy and financial assistance
agreement signed from Aueust ]. 1999 throueh December 3],2003 unless goals have been achieved and reported
in a MBAF per Minn. Stat. 91161.993 to gI16J.995.
· The following government agencies must submit a MBAF: 1) any local government/agency that signed a business
subsidy agreement since January 1, 1999, or represents a population of more than 2,500; 2) all state government
agencies authorized to provide business subsidies.
.
· If a local or state government agency that is required to report has not done so by April 1, DEED will mail a
warning. If it fails to report by June I, it may not award any business subsidies until a report has been filed.
· Questions? Call (651) 296-0580. Infonnation on where to mail or fax your completed MBAF(s) is on page 4.
Section 1 Grantor Information
I. Name of grantor (funding entity)
2. Name of person completing this form
3. Street address
4. City
5. ZIP code
6. County
WRIGHT
7. Phone number
8. Fax number
9. E-mail address
ollie. koro
d. onticello.
ron.us
63-271-3208
763-295-4404
10. Please indicate wbo in your organization should receive the MBAF if different from tbe person in Question 2.
NamerritIe
Phone number
Street address
City
ZIP code
.
11. Classification of grantor (Mark one. lj'grantor is entity
created by gov't agency, please indicate affiliation. For
example. a city EDA would check "Ci~y government. 'j
12. Has your organization held a public bearing on and
adopted criteria for awarding business subsidies in
compliance with Minn. Stat. S I 1 61.994? (Mark one)
c::Pelity government
DYes, in 2004 (attach criteriu)
D Yes, in 2004 but have not yet adopted criteria
Yes, prior to 2004
D County government
D Regional government
lfYes: 8/31/19Qq
Hearing Date: 'fear Criteria Submit/ed.-
AMENDED lf78/2000
DNo AMENDED 4/24/2001 YES
D Other (Pleuse attach explanation.)
D State government
D Other (Please specify.)
13. Has your organization signed any agreements to award a business subsidy or financial assistance from August I, 1999
through December 31, 2003 unless goals have been achieved and reported in a previous filed MBAF? (Mark one.)
DYes (Complete the remainder of theform unless goals have heen achieved and D No r.StolJ here. go to section 5 on page 4)
reported in a previously filed MBAF per Minn. Stat. iil16J.993 and ./y'll6J.994.)
S
2 R . .
I f
.
ectlOn eClplent n ormatIOn
14. Name of business or organization 15. Address where business subsidy or financial assistance
receiving subsidy or financial assistance will be used
1335 DUNDAS CIRCLE MONTICELLO 55362
GWJ. LLC Street address City State ZIP code
J6. Does the recipient have a parent corporation? (Mark one.)
DYes (indicate name and address oj'parent corporation below. lj'more than one. indicate ultimate owner.)
DNo
XX
Name of parent corporation Street address City State ZIP code
Minnesota Business Assistance Form (1/14/04)
Page 1 of4
DcpL of Employment & Economic Development
.
.
.
17. Industry of recipient's faciliry (Mark one.):
~ Manufacturing D Services o Finance, Insurance, Real Estate
D Retail Trade D Wholesale Trade o Construction o Other (please specifY)
18. Did the recipient relocate as a result of sit.,'lling this agreement? (Mark one.)
~ '( es (Indicate city and state o.f'previous address and reason recipient did not complete this project at that address.)
No (Go to Question 19)
'RnFN pRATR)E, MN LEAC:TNG pI MTTLTI-TENANT BTTILDING, WANTED OWNERSHIP CLOSE .
City/State of previous address Reason project not completed at previous address
19. Would the recipient have remained in previous location or relocated elsewhere if not awarded this business subsidy or
financial assistance? (Mark one)
o Remained at previous location o Relocated to different Minnesota location D Relocated outside Minnesota
o HOME
S t'
3
I f
ec IOn A2reement n ormatIon
20. Total dollar value of business subsidy or financial 21. Date agreement signed (In addition to the agreement
assistance (Please sepClrate vulue by type in Questiofls 24 date. indicate any dates the agreement WClS amended.)
and 25.)
$30,000 REALESTATE/CONSTRUCTION LOAN AUGUST 30. 2001
22. Benefit date (Indicate the date the recipient will henefitfrom the business subsidy orfinancial assistance. For example,
indicate the date improvements were finished, equipment was placed into service, or the recipient occupied the property,
whichever is earlier)
DECEMBER 2001
23. Does the agreement provide a business subsidy or one of the four types of financial assistance (see Question 25) required to
be reported? (Mark OIlC)
~business subsidy D financial assistance
24. If the agreernent provided a business subsidy, please 25. If the assistance was one of the four types of financial
indicate the type(s) and total dollar value for each type. assistance, please indicate the type(s).
D not applicable, agreement provided financial assistance JBCnot applicable, agreement provided a business subsidy
~Ioan (only principal) $ 30,000 o assistance for property polluted $
D grant (i.e., forgivable loan) $ by contaminants
o tax abatement $ D assistance for renovating building $
o TIF OF other tax reduction or deferral $ stock or bringing it up to code, and
o guarantee of payment $ assistance provided for designated
o contribution of property or infrastmcturc $ historic preservation districts, when
o preferential use of governmental facilities $ 50% or less of total cost
o land contribution $ o assistance for pollution control or $
o other (Specijil subsidy type.) $ abatement
o assistance for a TIF soils condition district $
26. If the assistance included tax increment financing, please 27. Are any other grantors providing a business subsidy or
indicate the type ofTIF district? (Mark one.) financial assistance to the same project? (Mark one.)
~t applicable, assistance was not in the form ofTIF DYes (Speciji' each grantor and the value oj'their
assistance below; attClch an additional sheet if'necessary.)
o redevelopment
D renewal and renovation ENo
D soils condition
o economic development Grantor(s) and value of the agreement(s):
o mined underground space
D hazardous substance subdistrict
Grantor Value ($)
Grantor Value ($)
Minnesota Business Assistanec Form (1/J4/04)
Page 2 of4
Dept. of Employmcnl & Economic Development
-'
Section 4 Goa s and Public Purpose Identified in the A2reement
.
28. Minn. Stat. ~ 1161.994 requires that business subsidy and financial assistance agreements state a public purpose. Which
of the following public purposes were stated in the agreement? (Mark all that apply.)
o Enhancing economic diversity
jQ{Creating high-quality job growth
o lob retention
o Stabilizing the community
~ncreasing tax base (cannot be only purpose)
o Other (please spec(/j1
29. Indicate whether the agreement included the following types of goals, and whether the recipient had attained those goals
at the time of this report. (Fill in the boxes and attainment dateM for each goal.)
A) Specific wage and job goals to be attained within 2 years
B) Other job~creation and/or retention goals
C) Other wage goals
D) Other goals other than wage and job goals
Goals
~blishcd?
O"Yes D No
DYes DNo
DYes ONo
DYes DNo
Target attainment
daty !~5n/~ ~d'~r)
All goals
attai~@
DYes ttNo
o Yes DNa
DYes DNa
DYes DNo
(Please attach descriptions 0.1' goals and progress toward
attainment if'not documented in Questions 30 and 3i.)
30. For each ofthc following wage categories, indicate the job creation and/or retention goals stated in the
agreement and the average hourly value of any employer-provided health insurance goals for those jobs. (.Onlv indicatejob
creation goals in fill/-time equivalent.I' if'you are unable to separate goals byfill!- and part-time positions.)
Full-time Part-time/ FTE (!!.!!!.y jf goals not
Hourly Wage Job Seasonalrremp. stated as FT/PT) Job Retention Hourly Value of
(excluding benefits) Creation Job Creation Job Creation Health Insurance
.no hourly wagc-Icvcl goal - -- -. - $ -
Icss than $7.00 - ~~~.. ~-~- - s -
$7.00 to $8.99 - - - - s -
. $9.00 to $ I 0.99 - - - - $ -
NOT LESS THAN $10.00 1
$11.00 to $12.99 - - - - s --
$13.00 to $14.99 - ~-~. -.- - $ -
NOT LESS THAN $18.00 2
$15.00 and highcr - -- - - $--
31. For each ofthe following wage categories, indicate the number of actual jobs created and/or retained since the benefit
datc al1d the actual hourly value of any employer-provided health insurance for those jobs. (Onlv indicatejob creation in
filII-time equivalents if'you are unable to separalejob c'realion intofill!- and pari-time positions.)
Full-time I'art-time/ FTE ~ if unable to
Hourly Wage Job Seasonalrremp. separate FT/I'T) Job Retention Hourly Value of
(excluding bcnefits) Creation Job Creation Job Creation Health Insurance
Icss than $7.00 - -~ --- - s -
$7.00 to $8.99 - - - - ~ -
$9.00 to $10.99 - - ~~._. - s -
NOT LESS THAN $10.00 0
$11.00 tu $12.99 - - ~u,~,_ - $-
$13.00 to $14.99 $18.00 - - - s_._
NOT LESS THAN 2
$ ] 5.00 and highcr --- - - --- S '_~J~~_
32. Has the recipient achieved all goals (see Questions 29, 30 and 31) and fulfilled all obligations stipulated in the agreement?
(Mark one.)
DYes q..~o
.
Minnesota Business Assistance Fonn (1/14/04)
Page 3 of 4
Dept. of Employment & Economic Development
ijllf
.
.
-
-
Section 5 Recipients Failing to Fulfill Obligations
(Do not complete this section if you completed it on another MBAF submitted to DEED.)
33. During the period January I, 2003 through December 31,2003, did your organization have any recipients who failed to
report as required by Minn. Stat. ~] 161.993 and ~ 116J.994? (Mark one.)
L ,.es (Indicate the name of each recipientfailing to report and the value (if'subsidy orfinancial assistance awarded to that
recipient. Attach additional pages if necessary.)
~No
Name ofrecipient Type of subsidy or assistance (See Questions 24 and 25.) Value of subsidy or assistance
34. Did your organization have any recipients who failed to achieve any goals or fulfill any other obligations under an
agreement signed on or after August I, 1999, that were required to be fulfilled by the time of this report? (Mark one.)
J8c Yes (Complete the remainder of'this section.) o No (Stop here and submit form to D}''ED .)
35. - 39. Provide the following information for each recipient failing to fulfill goals or any other terms of an agreement that
were to be attained by the time of reporting. (Attach additional pages ifnecessary.)
35. Information on recipient and agreement:
GWJ, LLC REAL ESTATE/CONSTRUCTION LOAN $30,000
Name of recipient in default Type of subsidy or assistance Initial value of
subsidy or assistance
1335 DUNDAS CIRCLE MONTICELLO 55362 $27,616
Street address of recipient City/ZIP code of recipient Outstanding value of
subsidy or assistance
36. Reason(s) for default (Mark all that app(v.):
o recipient ceased operation o recipient relocated to a different community
o recipient was unable to fill vacant positions o other (.S'pe(:ify reason.) ECONOMY
37. To date, has the recipient fulfilled its repayment obligation? (Mark one.)
:JQcYes o No, recipient has begun to repay the assistance. o No, recipient has not begun to repay the assistance.
38. Has the agreement been amended to extend the recipient's deadline for fulfilling its obligations? (Mark one.)
DYes -JArNo
39. Descrihe the steps being taken to bring recipient into compliance or recoup the subsidy:
THE EDA WILL ADDRESS AT ANNUAL MEETING ON APRIL 27, 2004
Return your completed MBAF(s) by Avril]. 2004, to:
Minnesota Business Assistance Form
Minnesota Department of Employment and Economic Deve]opment - AEO
500 Metro Square, 121 East 7th Place
St. Paul, MN 55101-2]46
Or fax to: (65]) 2]5-3841
Minnesota Business Assistance Fonn (1/14/04)
Pagc 4 of 4
Depl. of Employment & Economic Development
.
.
.
EDA Agenda - 04/27/04
7.
Consideration to review Block 35 facade imvrovement costs and concept. contract.
final site improvement concept. public/private ratio for avvroval of EDA funding and to
reQuest Council to approve the concept and to order a feasibilitv studv.
A. Reference and backe:round:
On April 23, 2002, the EDA approved a motion to discontinue the Downtown Revitalization
Program and to reserve the dollars for Block 35 project. Since that time, the property owners
led by Al Loch, the EDA, and city staff and consultants have met several times to arrive at a
design and cost concept acceptable to both the private and public sector.
The purpose identified within the original DMRF Guidelines states the EDA ofTers financial
assistance and incentives to property owners to promote the revitalization of downtown
Monticello. The Block 35 goals and objectives as defined by the BOA:
1. Create a customer friendly parking and plaza-like rear entrance.
2. Consistent and eye-focus cosmetic facade design.
3. Roof and alley drainage improvements.
4. Relocate and consolidate trash into enclosed and detached containers.
5. Ratio of public to private investment. (1.35: 1.0)
See Attachment A. Definition of uses and sources of funds (Financial Package.) Attachment B.
Final site improvement concept.
The EDA requested a 100% commitment from property owners and a Maintenance Agreement
in recordable form addressing the following: Unrestricted parking spaces (designated loading
zones), common trash, snow plowing, and landscaping.
I spoke with Mr. Loch and he will present to the EDA an update, cosmetic facade
improvements and costs, property owner commitment, and Maintenance Agreement.
At site review on April 21, 2004, the city staff and consultants reviewed the final site
improvement concept as prepared by Consultant Grittman. They agreed with the concept as
presented and to remove tall trees from islands to increase rear storefront visibility. Simola
suggested moving the westerly trash enclosure to the cast a few feet to avoid power source.
One thing not addressed is the need for a document stating the right to enter private property
for construction of site improvements.
.
EDA Agenda - 04/27/04
The questions for the EDA is three-fold:
1. Does the cosmetic facade design and site improvement concepts meet the EDA
goals and objectives?
2. Does the public to private ratio of investment meet the public purpose?
3. Did the private sector satisfy the requests of the EDA?
If the EDA agrees to approve the funding, then the City Council will be asked to approve the
facade and site improvement concept and to authorize the City Engineer to prepare a feasibility
study. Once the feasibility study is complete and assuming acceptable, the Council would then
authorize the City Engineer to design the project and go out for bids and specs. Last step,
Counci I awards bid.
B. Alternative Action:
1.
A motion to accept the Block 35 cosmetic facade design concept and estimated costs,
the site improvement concept and estimated costs, and the public/private investment
ratio; to approve EDA funding in an amount not-to-exceed $145,000 as defined in the
Financial Package, and to request Council to approve the concept and to authorize a
feasibility study. State reasons. (The EDA may include that the EDA Attorney review
the Maintenance Agreement and address the right of entry for construction.)
.
2. A motion to deny moving forward the Block 35 project as outlined. State reasons.
3. A motion to table any action.
4. A motion of other.
C. Recommendation:
Without the facade improvement concept and cost estimates from the private scctor, it makes it
difficult for the City Administrator and Executive Director to make a recommendation. The
Administrator and Director foresees the determining question for the EDA is the ratio of public
to private investment. The EDA must feel comfortable with the ratio of tax payers dollars for
private improvements compared to dollars invested by the private sector. In other words,
what's the public purpose? You will recall the DMRF program consisted of a matching grant
facade program of up to $2,500 per front and rear and side when applicable. It is also
suggested that perhaps a construction completion datc for the facade improvements be
determined.
.
2
.
.
.
~1t t ~~ ~ ft..
(This a proposal created and offered by the Monticello Economic Development Authority
(EDA) to foster a partnership with a portion of the owners of Block 35.)
BLOCK 35 AND EDA PARTNERSHIP
FINANCIAL PACKAGE
USES OF FUNDS - Based on estimates.
Common Area -
Parking to rear of buildings, plaza, trash improvements
(with sidewalk and curb)
Replace alley and add a seeond eatch basis
(Without engineer fees or cost to slope private surface to
match alley)
(Engineer fees/sloping)
Block 35 Public Parking Lot Improvements
Cosmetic Facade Improvements to rear of buildings
Swiecichowski (Dino's)
Monticello Lodge #16 (Vacuum Center)
Loch Jewelers and (I't National Bank of Elk River)
Schneider (previous Office Supply)
Agosto (Law Office)
Schneider (Vacant Lot)
Larson Properties (Carlson Travel/Carlson Agency)
Schneider (Drapery Center and Pizza)
McCarty (Computer/Mexican Grocery)
Subtotal of Rear Cosmetic Facade Improvements
TOTAL USES OF FUNDS
$ 15,100.00
$ 21,100.00
$ 17,500.00
$ 18,000.00
$ 10,500.00
$ 20,500.00
$ 10,500.00
$ 16,500.00
$ 75,000.00
$ 50,000.00
$ 20,000.00
$ 30,000.00
$129,700.00
$304,700.00
SOURCES OF FUNDS
. EDA - Common Area $ 75,000.00
Alley $ 50,000.00
Engineer Fees/Sloping $ 20.000.00
Subtotal EDA Investment $145,000.00
City of Monticello - Public Parking Lot Improvements
Budget 2000 $ 10,000.00
Budget 2002 $ 20.000.00
Subtotal City Investment $ 30,000.00
Business Owners - Rcar Cosmetic Facade Improvements
S wi ecichowski $ 15,]00.00
Monticello Lodge #] 6 $ 21,100.00
Loch Jewelers $ 17,500.00
Schneider $ ] 8,000.00
Agosto $ 10,500.00
Larson Propcrties $ 20,500.00
Schneider $ 10,500.00
McCarty $ 16.500.00
Subtotal Business Owners Invcstment $129,700.00
. TOTAL SOURCES OF FUNDS $304,700.00
.
EDA AGENDA - 04/27/04
.
8. Consideration to Elect 2003 EDA Officers.
A. Reference and Backqround.
In order to comply wi th EDA Ordinance Amendment No. 172, Section
2-3-2: The Authority shall annually elect a president, vice
president, treasurer, assistant treasurer, and secretary. The
current list of officers are:
President
Vice President
Treasurer
Assistant Treasurer
Secretary
Bill Demeules
Barb Schwientek
Rick Wolfsteller
Ron Hoglund
Ollie Koropchak
Nominations will be made at the meeting; therefore, any EDA member
unable to attend the meeting and doesn't wish to be re-elected or
nominated, please contact me.
.
In order to comply wi th EDA Ordinance Amendment No. 172, Section
2-3-1: Creation: (C) Thereafter the initial appointment, all
commissioners shall be appointed for six-year terms, except that
any person appointed to fill a vacancy occurring prior to the
expiration of the term which his/her predecessor has been
appointed shall be appointed only for the remainder of such term.
2004 EDA membership and 6-year term:
Barb Schwientek
Bill Demeules
Roger Carlson, Council
Ron Hoglund
Clint Herbst
Robbie Smith, Council
Darrin Lahr
12-2004
12-2005
12-2006
12-2007
12-2008
12-2008
12-2009
B. Alternative Action:
1.
Motion to nominate and elect the
... .Chair,........ Vice Chair, .........
. . . . . . . .. Assistant Treasurer, and. . . . . . . . . . . .
following
Treasurer,
Secretary as
.
Page 1
EDA AGENDA - 04/27/04
.
2004 EDA officers.
2. A motion to table election of 2004 EDA officers.
C. Recommendation:
No recommendation lS given.
D. Supportinq Data:
None.
.
.
Page 2
.
.
.
EDA Agenda - 04/27/04
9.
Consideration to review and accept the 2003 Year-End EDA Financial Statements.
Activity Report. and 2004 Proposed Bude:et.
A. Reference and Backl!round:
In order to comply with EDA Ordinance Amendment No. 172, Section 2-3-6: The Authority
shall prepare ffil annual budget projecting anticipated expenses and sources of revenue. And B:
The Authority shall prepare an annual report describing its activities and providing an accurate
statement of its financial condition. Said report shall be submitted to the City Council in May of
each year.
Enclosed are the year-end statements, proposed budget, and activity report.
The EDA will need to review and discuss prior to consideration of the following alternative
action.
B. Alternative Action:
1. A motion to accept the 2003 year-end financial statement and activity report for
submission to the City Council on May] 0, 2004.
2.
A motion to accept the 2003 year-end financial statements and activity report subject
to named revisions prior to submission to the City Council.
3. A motion to not accept the 2003 year.end financial statements and report.
4. A motion to table any action.
C. Recommendation:
If the EDA commissioners make a finding that the statements and report are so correct,
recommendation is alternative no. ]. The EDA financial report are consistent with City year-
end reports. All GMEF loan paybaeks are current.
D. Supporting Data:
Copies of financial statements and report.
.
.
.
THE BALANCE SHEET AND STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE WILL BE PRESENTED AT EDA MEETING.
INCLIJDED IN THE ACTIVITY REPORT AND 2004 PROJECTIONS.
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
2004 CASH FLOW PROJECTION
.a
~BEGINNING CASH BALANCE, January 2004
RECEIPTS
Appropriations, Expected -
GMEF
Notes Amortization Payments -
Tapper Inc.
Muller Theatre
SMM, Inc.
Aroplax Corp.
Custom Canopy, Inc.
Standard Iron
Vector Tool
Tapper's II
SELUEMED
T.J. Martin ($547.60 Mo.) 6-06
Mainline Distrib. ($702.08 Mo.)
Aroplax corp. II ($730.93 Mo.)
TCDC
IRTI
EDMA ($193.89 Mo.) 9-06
visiCom ($115.78 Mo.) 5-04
UMC ($1, 084 . 33 Mo.) 3 - 0 8
Tapper 111($524.76 Mo.) 5-08
WSI ($875.00 Mo) 6-09
Interest Income - Investment (est.)
Loan Fees
Loan Fees Other
Miscellaneous
$
-0-
$
6-04 $
12-04 $
$
$
$
$
$
$
$
$
$
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
6,571.20
88,759.08
94,303.80
-0-
-0-
2,326.68
6,073.01
13,011.96
6,297.12
6,125.00
30,000.00
200.00
3,000.00
1,000.00
.
TOTAL RECEIPTS
TOTAL BEGINNING BALANCE AND RECEIPTS
EXPENDITURES
GMEF Loans -
WSI - (GMEF Interest)
Other
Re-payment to Liquor Fund 2004
DMRF Grants
Professional Fees
Block 35
Legal Fees
Miscellaneous
$ 350,000.00
$ 100,000.00
-0-
$ 3,000.00
$ 145,000.00
$ 3,000.00
$ 1.000.00
.
TOTAL EXPENDITURES
EXPECTED CASH BALANCE, December 2004
$ 924,198.55
$ 257,667.85
$1,181,866.64
$ 602,000.00
$ 579,866.64
.
.
.
2003
ECONOMIC DEVELOPMENT AUTHORITY ACTIVITY REPORT
MEETING DATE
SUBJECTS
January 29, 2003
Planner Consultant Grittman informed EDA that the Block 35
sketches were designed as framework or idea to create an
attractive and appealing rear entrance and plaza. The design
sketch addressed elevations and function. Requested the
consultant provide cost estimates.
Denied amending the EDA Business Subsidy Criteria for the
purpose of job retention for reasons stated. (Request by B&B
Metal Stamping.)
April 1, 2003
Approved subordinating GMEF Loan No. 018 (IRTI) to take-
out the existing bank loan of $340,377 subject to execution of
documents as deemed necessary and prepared by the EDA
Attorney at the cost of the Borrower.
Accepted a settlement of an $18,000 loan at 6.0% interest rate
over three years effective June 1, 2003 for GMEF I,oan No.
014 (T. J. Martin), Borrower to pay all EDA Attorney fees,
costs, and expenses up-front for preparation of documents
deemed necessary by the EDA Attorney.
April 22, 2003
Annual Meeting
Accepted the Business
Subsidy Criteria for the Monticello EDA without amendments.
EDA Officers elected for 2003:
President Bill Demeules
Vice President Barb Schwientek
Treasurer Rick Wolfsteller
Assistant Trcasurer Ron Hoglund
Secretary Ollie Koropchak
Accepted EDA 2002 Year-End Financial Statements and
Activity Report. All existing GMEF loan paybacks are current.
.
.
.
2003 EDA Activity Report
Authorized a 2003 repayment of the Liquor Funds in the
amount of $70,000 for use solely to reduce tax levies for
bonded indcbtedness of the city of the year 2004.
Approved the execution of a Satisfaction of Mortgage for
GMEF Loan No. 018 (IRTI) subject to repayment in full of the
remaining principal balance 01'$69,377.01, with document
preparation at the cost of the borrower. This is lieu of the April
2, 2003 motion.
2003 EDA Goals for City Vision & Governing Policies:
Continue to provide inccntives to attract industrial businesses to
Monticello and facilitate or provide inccntives for Block 35.
May 27,2003
Accepted the cosmetic design sketches for rear facade
improvements and cost estimates as submitted by NAC,
determine what the EDA is willing to fund and invite the
busincss owncrs to a presentation.
Accepted the pre-payment of GMEF Loan No. 0 l7 (TCDC.)
July 29, 2003
Prcsentation by EDA to Block 35 property owners including
the Block 35 and BDA Partnership Financial Package
(1.35:1.0 ratio), 100% commitment, and Maintenance
Agrcement for recording. Block 35 propcrty owner to
respond to the EDA at Octobcr meeting.
October 28, 2003
Al Loch reported the owncrs agrecd to scale back in order to
maintain participation at 100%. The trick to keep 100% land
owner participation while balancing an acceptable rear facade
improvemcnt with an acceptable price. Property owners will
be at the J alluary 2004 meeting.
2
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EDA Agenda - 04/27/04
to.
Consideration to review 2003 year-end balances of the GMEF. DMRF. UDAG.
Minnesota Investment Fund and SCERG Funds.
A. Reference and Backl!round:
GMEF No, 017 (TCDC) and GMEF No, 0018 (lRTI) loans were prepaid in 2003. Although
GMEF Loan No, 021 (Tapper 1lI) and Loan No, 022 (UMC) were approved in 2002, the
loan closings and disbursements took place in 2003, The EDA showed a loss of $27,886,66
for the T. 1. Martin Loan ($45,886.66 minus $18,000 settlement), Three balloon payments are
due in 2004: Aroplax, Mainline, and VisiCom, All GMEF loans are current.
No disbursements from the DMRF account in 2003, Current balance ofDMRF is
$145,256,66,
Additional funds available for future use by the EDA include the MIF Federal- TCDC (2003
balance $208,953,79), SCREG-Aroplax/Standard Iron (2003 balance $15,617,16), and MIF
State-UMC (2003 balance $3,219,37), All UDAG-FSI dollars have been recycled, Due to
the economy and foreign competition, TCDC has not lilled their job and wage requirements for
the MIF Federal loan, Although the time for creation of jobs and wages was extended to July
2004, we are advised not to spend the MIF Federal dollars until job/wage level satisfied,
Please note the total dollars available to the EDA for GMEF and DMRF progranls less the
paid commitment of $350,000 is $574,198,55 as of April 27, 2004,
No action necessary by the EDA.
SOURCES OF FUNDS
April 27, 2004
. GMEF Cash Balance
DMRF Cash Balance
$ /78,941.89
$ 145,256.66
TOTAL
$ 924,198.55
LESS DISBURSEMENTS
WSI
$ 350,000.00
BALANCE April, 2004
$ 574,198.55
.
.
.
.
.
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
DOWNTOWN MONTICELLO REVITALIZATION FUND
December 31,2003
Fund Balance, December 31, 1997
$199,000.00
Revenues
Appropriations
TOTAL REVENUES
o
$199,000.00
Expenditures
DMRF 101, Kathy Froslie, 2-6-98
8-31-98
DMRF 102, Steve Johnson
DMRF 103, Kathy froslie, 2-6-98
DMRF 104, Rich Cline, 10-11-98
11-24-98
DMRF 105, AI Loch, 11-6-98
DMRF 106, Dan Olson, 7-27-98
DMRF 107, Steve Johnson
DMRF 108, Bruce Hammond 6-11-99
DMRF 109, Dorothy 'Topel 7-12-99
DMRF 110, Heaton
DMRF 111, Hamond 8-29-01 ($9,500) extended to 5-29-02
Loan 4-10-01 ($10,644,5.5%,5-04) $10,644.00
DMRf 112 Thickpenny 5-22-01 $ 6,960.25
DMRFl13Chamber1-1O-02 $ 2,172.82
Drayna 5-10-01 $ 1,000.00
Claybaugh 3-00 $ 810.50
4-00 $ 1,240.00
Grittman -01 $ 822.80
Broadway Inconvenience -02 $ 4,730.55
Legal (Loan document) $ 200.00
-01 $ 240.50
$ 2,500.00
$ 2,500.00
$ 500.00
$ 2,394.13
$ 180.12
$ 2,610.00
$ 6,814.13
$ 5,411.80
$2,011.74
TOTAL EXPENDITURES
$ 53,743.34
Fund Balance, December 31, 2003
$145,256.66
.
MINNESOTA INVESTMENT FUND
FINANCIAL REPORT
December 31, 2003
GRANT TOTALS - TWIN CITIES DIE CAST
Payback began in July, 2000 for 7 years ending in June, 2007.
Annual principal and interest payback total is $61,176.72.
Principal
Interest
TOTAL
ORIGINAL
$500,000.00
$95,747.11
$595,747.11
PAID
$150,352.51
$58,601.28
$208,953.79
REMAINING
$349,647.49
$37,145.83
$386,793.32
EXPENDED:
$468,266.60
$20,859.00
$10,874.40
$500,000.00
6/2/00
8/9/00
8/15/00
___.___________________w_._______________________w_p__------
GRANTTOTALS-UMCITOMANN
Payback began in October 2003 for 5 years ending in March 2008.
Annual principal payback is $19,280.64.
.
Principal
Interest
TOTAL
ORIGINAL
$290,000.00
$33,439.16
$323,439.16
PAID
$1,128.94
$2,090.43
$3,219.37
REMAINING
$288,871.06
$31,348.73
$320,219.79
EXPENDED:
$92,138.56
$109,377.84
$88,483.60
$290,000.00
4/17/03
6/26/03
9/4/03
----------_.~,~-~--------,~,~,--------~_____~I~~-----,~#____
REVENUES
Principal Payback - TCDC
Interest Payback -TCDC
Principal Payback - UMC
Interest Payback - UMC
Interest Income - Investment:
2000
2001
2002
2003
$150,352.51
$58,601.28
$1,128.94
$2,090.43
TOTAL REVENUES
$119.19
$3,071.00
$5,356.00
$7,678.00
$228,397.35
EXPENDITURES
Prof Svc fees - TCDC
Legal fees - TCDC
$3,306.55
$701.75
.
TOTAL EXPENDITURES
$4,008.30
FUND BALANCE FOR MN INV FUND
$224,389.05
EDA annual reports.xls: 4/14/2004
.
SMALL CITIES ECONOMIC RECOVERY GRANT (SCERG)
FINANCIAL REPORT
December 31, 2003
GRANTTOTALS-AROPLAX
Payback began in December, 1992 for 7 years ending in November, 1999.
Annual principal and interest payback total is $29,801.40.
First $100,000 principal payback ends January, 1997.
Principal
Interest
TOTAL
ORIGINAL PAID REMAINING
$170,000.00 $175,615.55 ($5,615.55)
$37,969.92 $24,018.99 $13,950.93
$207,969.92 $199,634.54 $8,335.38
Jan. 1997 GMEF STATE
$170,000.00 $100,000.00 $70,000.00
$29,634.75 $24,018.99 $5,615.76
$199,634.75 $124,018.99 $75,615.76
Principal
Interest
TOTAL
Grant must be expended by December 31,1994, up to $170,000.
EXPENDED:
$116,556.75
$16,996.18
$12,356.59
$4,021.10
$15,132.50
$4,936.88
$170,000.00
1993
1993
1993
1/18/94
4/13/94
7/20/94
.
-----------------~------------------------------------------
GRANTTOTALS-STANDARDIRON
Payback began in July, 1994 for 7 years ending in June, 2001.
Annual principal and interest payback total is $33,306.12.
Grant must be expended by December 31, 1994, up to $250,000.
EXPENDED:
$250,000.00
8/18/94
-.-_......,.--,.......-..-.._-'--...--.._-,~-..........-..-....._-"'--'-'...._,..-.._<ifI'.-..-__""'~__'.......__,___'__.-.__..-
.
EDA annual reports.xls: 4/14/2004
.
SMALL CITIES ECONOMIC RECOVERY GRANT (SCERG)
FINANCIAL REPORT
REVENUES
Principal Payback - Amplax
Interest Payback - Aroplax
Loan Payback - Standard Iron
Grant Administrative Fee - S.1.
Refund 97/98 fee to Wright County
Interest Income - Investment:
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
$175,615.55
$24,018.99
$318,268.65
$6,245.00
($2,000.00)
$1,061.92
$1,256.00
$5,475.97
$7,381.27
$8,770.56
$9,741.95
$10,450.10
$9,058.60
$682.00
$554.00
$513.00
$577,093.56
TOTAL REVENUES
.
EXPENDITURES
Payback to State - Aroplax
Reimbursement to Wright Co - S.1.
Transfer to GMEF - 1. J. Martin
Transfer to GMEF - Mainline Dist
Transfer to GMEF - TC Die Cast
TOTAL EXPENDITURES
$75,626.64
$314,698.14
$87,500.00
$60,453.62
$23,198.02
$561,476.42
FUND BALANCE FOR SMALL CITIES GRANT
$15,617.14
.
EDA annual reports.xls: 4/14/2004
2
.
URBAN DEVELOPMENT ACTION GRANT (UDAG)
FINANCIAL REPORT
December 31, 2003
GRANT TOTALS - FSI
Payback began in January, 1988 for 12 years ending in January, 2000.
Annual principal and interest payback total is $27,971.40.
Principal
Interest
TOTAL
ORIGINAL
$256,957.71
$78,700.35
$335,658.06
PAID
$256,957.71
$77,315.88
$334,273.59
REMAINING
$0.00
$1,384.47
$1,384.47
---------#~------------~~,~.__________________~'~_~N~#~~~_~
.
REVENUES
Principal Payback - FSI
Interest Payback - FSI
Interest Income - Investment:
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
$6,342.02
$8,593.59
$8,436.32
$5,227.10
$3,756.77
$12,297.72
$9,775.19
$9,007.60
$12,989.27
$13,128.25
$423,827.42
$256,957.71
$77,315.88
TOTAL REVENUES
EXPENDITURES
1991 Transfer to GMEF (Tapper & Muller)
1992 Transfer to GMEF (Aroplax)
1993 Transfer to GMEF (Custom Canopy)
1996 Transfer to GMEF (Tapper)
1999 Transfer to GMEF (Aroplax)
1999 (2000) Transfer to GMEF (Mainline)
2000 Transfer to GMEF (TC Die Cast)
TOTAL EXPENDITURES
$65,000.00
$20,000.00
$42,500.00
$100,000.00
$100,000.00
$39,546.38
$56,781.04
$423,827.42
FUND BALANCE FOR URBAN DEVELOPMENT ACTION GRANT
$0.00
.
EDA annual reports.xls: 4/14/2004
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
. LOAN STATUS
December 31, 2003
Economic Development Authority (EDA) was created in 1989.
APPROVED LOANS
Tapper/Genereux (1990) $88,000.00
Muller/Monti Theatre (1990) $50,000.00
Barger/Suburban #004 (1992) $50,000.00
Schoen/Aroplax #005 (1992) $85,000.00
Birkeland/Custom Canopy #006 (1993) $42,500.00
Demeules/Standard Iron #007 (1993) $75,000.00
Blue Chip DevNector Tool #010 (1995) $50,000.00
Tapper's #011 (1996) $100,000.00
Standard lron/Seluemed #013 (1996) $70,000.00
T J Martin #014 (1998) $87,500.00
Mainline Distr #015 (1999) $100,000.00
Aroplax #016 (1999) $100,000.00
TC Die Cast #017 (2000) $100,000.00
Integrated Recycling #018 (2001) $72,500.00
EDMA #019 (2001) $30,000.00
. Tapper's #021 (2002) $55,000.00
Tomann/UMC #022 (2002) $200,000.00
TOTAL APPROVED LOANS $1,355,500.00
APPROVED PAYBACKS
2001 to Hwy Liquor ($77,000.00)
2003 to Hwy Liquor ($70,000.00)
TOTAL APPROVED PA YBACKS ($147,000.00)
TOTAL APPROVED LOANS & PAYBACKS $1,208,500.00
LOAN DISBURSEMENTS (transferred to GMEF)
Liquor Fund:
1991 to Tapper $73,000.00
1992 to Suburban $50,000.00
1992 to Aroplax $65,000.00
1994 to Standard Iron $75,000.00
1995 to Vector Tool $50,000.00
1996 to Standard Iron $70,000.00
2001 payback from EDA ($77,000.00)
. 2003 payback from EDA ($70,000.00)
Total Liquor Fund $236,000.00
EDA annual reports.xls: 4/14/2004
1
.
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
LOAN STATUS
UDAG Fund:
1991 to Tapper
1991 to Muller
1992 to Aroplax
1993 to Custom Canopy
1996 to Tapper's
1999 to Aroplax (016)
1999 (2000) to Mainline
2000 to TC Die Cast
Total UDAG Fund
$15,000.00
$50,000.00
$20,000.00
$42,500.00
$100,000.00
$100,000.00
$39,546.38
$56,781.04
$423,827.42
"Recycled" UDAG Money:
2001 to Integrated Recycling
2001 to EDMA
2003 to UMC
Total Recycled UDAG
$72,500.00
$30,000.00
$125,000.00
$227,500.00
.
SCERG Fund:
1998 to T J Martin
1999 to Mainline /
2000 to TC Die Cast
Total SCERG Fund
$87,500.00
$60,453.62
$23,198.02
$171,151.64
GMEF (recycled funds):
2000 to TC Die Cast
2003 to UMC
2003 to Tapper 021
Total GMEF Fund
$20,020.94
$75,000.00
$55,000.00
$150,020.94
TOTAL LOAN DISBURSEMENTS
$1,208,500.00
.
EDA annual reports.xls: 4/14/2004
2
.
.
.
11.
EDA Agenda - 04/27/04
Consideration to review for amendment the Business Subsidy Criteria and Bylaws of
the EDA.
A. Reference and background:
EOA Business Subsidy Criteria
This is a housekeeping item. According to the Business Subsidy Criteria: "At a minimum, the
EDA shall review the Fund Guidelines on an annual basis. No changes to the GMEF guidelines
shall be instituted without prior approval of the City Council." "Amendments to these criteria
are subject to public hearing requirements pursuant to Minnesota Statues, Section 116J.993
through 116J. 994. "
The criteria is attached for your review.
EDA Bvlaws
This a housekeeping item. According to the Bylaws: "The Bylaws of the Authority shall be
amended by a majority vote of the Authority membership at a regular or special meeting. The
amendment must be in written form."
B.
Alternative Action:
EOA Business Subsidy Criteria
1. A motion to recommend amending the Business Subsidy Criteria as follows
............................., requesting approval from City Council, and calling for a public
hearing.
2. A motion to accept the Business Subsidy Criteria of the EDA as written.
BOA Bylaws
1. A motion to recommend anlending the Bylaws as follows ............... to be drafted in
written form.
2. A motion to accept the Bylaws ofthe EDA as written.
EDA Agenda - 04/27/04
.
c.
Recommendation:
Recommendation is alternative no. 2 for both the Criteria and Bylaws.
D. Supportine Data:
Copy of Business Subsidy Criteria and Bylaws of the EDA.
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2
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l--I
MONTICELLO
ECONOMIC DEVELOPMENT AUTHOIDTY
IN AND FOR THE CITY OF MONTICELLO, MINNESOTA
Business Subsidy Criteria
Public Hearing and Adoption the 31st day of August, 1999
Public Hcaring and Adoption of Amendments the 8th day of November, 2000
Public Hearing and Adoption of Amendments the 241h day of April, 2001
1. PURPOSE
1:01 The purpose of this document is to establish the Economic Development Authority's
criteria for granting of husiness subsidies, as defined in Minnesota Statutes 116.1.993,
Subdivision 3, for private development. This criteria shall be used as a guide in processing
and reviewing applications requesting business subsidies.
..... 1 :02 The criteria set forth in this document are guidelines only. The Economic Development
...... Authority reserves the right in its discretion to approve business subsidies that vary from
the criteria stated herein if the Economic Development Authority determines that the
subsidy nevertheless serves a public purpose. The Authority will file evidence of any deviation
from these criteria with the Department of Trade and Economic Development in accordance
with Minnesota Statues, Section 116.1.994, Subd. Z.
1 :03 The Economic Development Authority may amend the business subsidy criteria at any
time. Amendments to these criteria are subject to public hearing requirements pursuant to
Minnesota Statutes, Sections 116.1. 993 through 116.1.994.
2. STATUTORY LIMITATIONS
2:0 I In accordance with the business Subsidy Criteria, Business Subsidy requests must comply
with applicable State Statutes. The Economic Development Authority ability to grant business
subsidies is governed by the limitations established in Minnesota Statutes
116.1.993 through 116.1.994.
3. PUBLIC POLICY REQUIREMENT
.
3:01 All business subsidies must meet a public purpose in addition to increasing the tax base. Job
retention may only be used as a public purpose in cases where job loss is imminent and
demonstrahle.
3
Monticello City Hall, 505 Walnut Street, Suite 1, MonticeJIo, MN 55362-8831 . (763) 295-2711 . Fax: (763) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (763) 295-3170. Fax: (763) 271-3272
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4.
4:01
4:02
4:03
4:04
EDA Business Subsidy Criteria
BUSINESS SUBSIDY APPRO V AL CRITERIA
All new projects approved by the Economic Development Authority should meet the
following minimum approval criteria. IIowever, it should not be presumed that a project
meeting these criteria will automatically be approved. Meeting these criteria creates no
contraetual right on the part of any potential developer or the Economic Developmcnt
Authority.
The project must be in accord with the Comprehensive Plan and Zoning Ordinanee, or
requircd changes to the plan and ordinances must be under active consideration by the
City at the time of approval.
Prior to approval of a business subsidies financing plan and when deemed appropriate by
the Economic Developmcnt Authority, the developer shall provide any required market
and financial feasibility studies, appraisals, soil boring information provided to private
lenders for the project, and other information or data as requested.
A recipient of a business subsidy must make a commitment to continue operations at the
site where the subsidy is lIsed for at least five years after the benefit date.
4:05 (Recipients of any business subsidy will be rcquired to meet wage and joh goals determined
by the Economic Development Authority on a case-by-case basis, giving consideration to
the nature of the development, the purpose of the subsidy, local economic conditions, and
situational circumstances.)
The Economic Development Authority may determine after a public hearing that joh creation or
retention is not a goal of the subsidy. In those cases, thc recipient must instead meet at least
one of the following minimum requirements (in addition to all other criteria in this document
other than those relating to johs and minimum wages):
(1) The proposed subsidy must accomplish removal, rehabilitation or redevelopment
of "hlighted areas" as defined in Minnesota Statues, Section 469.002, Subd.l1,
or must constitute a cost of correction conditions that allow designation of
redevelopment -districts under Minnesota Statues, Sections 469.174 to 4-69.179;
or
(2) The proposed subsidy must result in improvements to public infrastructure or
public facilities, including without limitations, sewers storm sewers, streets,
parks, recreational facilities, and other City facilities; or
(3)
The proposed subsidy must remove physical impediments to development of
DAWN/WORD/POLICIES 10/30/00
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EDA Busincss Subsidy Criteria
land. including without limitation poor soils, bedrock conditions, steep slopes. or
similar geotechnical problems.
4:06 For any business subsidy that docs not meet the requirements of Scction 4:05, the recipient
must create or retain jobs as determincd by the Economic Development Authority, as must meet
the minimum wagc thresholds, described in Section 5:03, Greater Monticello Entcrprise Fund
Guidelincs, l.(b) (whether or not thc source of the subsidy is tax increment financing).
5. GREATER MONTICELL,O ENTERPRISE FUND PROJECT EV ALUATION CRITERIA
5:01 The Economic Developmcnt Authority will utilize the Greater Monticello Enterprise fund
to support the community's long-term economic goals.
5:02 Each Greatcr Monticello Enterprise Fund subsidy will bc analyzed and evaluated by the
Economic Dcvelopment authority. Each project shall be measured against the general
criteria in Sections 1 through 4 and the specific criteria in this Section 5 applicable to the
Greater Monticello Enterprise Fund subsidies.
5 :03 Following are the evaluation criteria that will be used by the Economic Development
Authority:
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EDA Business Subsidy Criteria
GREATER MONTICELLO ENTERPRISE FUND GUIDELINES
CITY OF MONTICELLO
505 WALNUT STREET, SUITE #1
MONTICELLO, MINNESOTA 55362
(763) 271-3208
INTRODUCTION
The purpose of the Greater Monticello Enterprise Fund (GMEF) is to encourage economic
development by supplementing conventional financing sources available to existing and new
businesses. Through this program administered by the Economic Development Authority and
participating lending institution(s), loans are made to businesses to help them meet a portion of their
financing needs. All loans must serve a public purpose by complying with four or more of the criteria
noted in the ncxt section. In all cases, it is mandatory that criteria #1 be satisfied, which requires the
creation of new jobs. It is the responsibility of the EOA to assure that loans meet the public purpose
standard and comply with all other GMEF policies as defined in this document. Along with
establishing the definition of public purpose, this document is designed to outline the process involved
in obtaining GMEF financing.
DEFINITION OF PUBLIC PURPOSE
1. To provide loans for credit worthy businesses that create new jobs.
(a)
One job is equivalent to a total of37.5 hours per week.
(b) At least 90% of the jobs created must pay a wage of the higher of $9.00 per hour, or at
least 160l)lo of the fcderal minimum wage, exclusive of benefits, for individuals over the
age of20 during the term of the assistance. Annual written repOlis are required until
termination datc.
Failure to meet the job and wage level goals require partial or full repayment of
the assistance with interest.
2. To provide loans for credit worthy businesses that would increasc the community tax base.
3. To assist new or existing industrial or commercial businesses to improve or expand thcir
operations. Considerations for loans shall take into account factors including, but not limited
to, the nature and extent of the business, the product or service involved, the present availability
of the product or scrvice within the city of Monticello, the compatibility of the proposed.
business as it relates to thc comprehensive plan and existing zoning policies, and the potcntial
for adverse environmental effects of the business, if any.
4. To provide loans to be used as a secondary source of financing that is intended to supplement
conventional financing (bank financing).
5.
To provide loans in situations in which a funding gap exists.
6. To provide funds for economic development that could be used to assist in obtaining other
funds such as Small Busincss Administration loans, federal and statc grants, etc.
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I.
EDA Business Subsidy Criteria
THE GREAfER MONTICELLO ENTERPRISES
REVOLVING LOAN FUND POLICIES
BUSINESS ELIGIBILIT'Y
*
Industrial businesses
Non-competitive commercial businesses which enhance thc community
Businesses located within the city of Monticello
Credit worthy existing businesses
Non~credit worthy start-up businesses with worthy feasibility studies (Dcny all
historical non-credit worthy businesses)
$10,000 loan per each job created, or $5,000 per every $20,000 increase in property
market valuation, or $5,000 per every $20,000 increase in personal property used for
business purposes, whichever is higher.
*
*
*
*
*
II. FINANCING METHOD
*
COMPANION
DIRECT LOAN -
Example: Equity 20%, RLF 30%, and bank 50%. (All
such loans may be subordinated to the primary lender(s) if
requested by the primary lender(s). The RLF loan is
leveraged and the lower interest rate of the RLF lowers
the efTective interest rate on the entire project.)
*
PARTICIPATION LOAN - RLF buys a portion of the loan (the RLF is not in a
subordinate position, no collateral is requircd by the RLF,
and the loan provides a lower intercst rate).
*
GUARANTEE LOANS - RLF guarantees a portion of the bank loan. (Personal and
real estate guarantees handled separately.)
III. USE OF PROCEEDS
*
*
*
Real property acquisition and development
Real property rehabilitation (expansion or improvements)
Machinery and equipment
IV. TERMS AND CONDITIONS
*
*
LOAN SIZE -
Minimum of $5,000 and maximum not to exceed 50% of the
remaining revolving loan fund balance; for example, if the
remaining revolving loan fund balance is $50,000, the maximum
loan issuance is $25,000.
LEVERAGING -
Minimum 60% private/public non-GMEF
Maximum 30% public (GMEF)
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*
LOAN TERM -
EDA Business Subsidy Criteria
Minimum 10% equity EDA loan
Personal property term not to exceed life of equipment (generally
5~ 7 years). Real estate property maximum of 5-year maturity
amortized up to 30 years. Balloon payment at 5 years.
INTEREST RATE - Fixed rate not less than 2(% below Minneapolis prime rate. Prime
rate per National Bank of Minneapolis on date of EDA loan
approval.
*
LOAN FEE - Minimum fee of$200 but not to exceed 1.5% of the total loan
project. * Fees are to bc documented and no duplication of fees
between the lending institution and the RLF. Loan fee may be
incorporated into project cost. EDA retains the right to reduce or
waive loan fee or portion of loan fee.
*
*
PREP A YMENT
POLICY -
*
DEFERRAL OF
PA YMENTS-
*
LA TE PAYMENT
POLICY
*
INTEREST
LIMITATION ON
GUARANTEED
DAWN/WORD/POLICIES 10/30100
*Fee to be paid by applicant to the EDA within 5 working
days after City Council approval of GMEF loan.
Nonrefundable.
No penalty for prepayment.
1.
Approval of the EDA membership by majority vote.
2. Extend the balloon if unable to reJinance, verification
letter from two lending institutions subject to Board
approval.
Failure to pay principal or interest when due may
result in the loan bcing immediately called.
In addition to any other amounts duc on any loan, and
without waiving any right of the Economic Development
Authority under any applicablc documents, a latc fcc of
$250 will be imposed on any borrower for any payment
not received in full by the Authority within 30 calendar
days of the date on which it is due. Furthermore, interest
will continue to accrue on any amount due until the date
on which it is paid to the Authority, and all such interest
will be duc and payable at thc same time as the amount on
which it has accrued.
6
EDA Business Subsidy Criteria
LOANS-
Subject to security and/or reviewal by EDA.
.
*
ASSUMABILITY
OF LOAN -
None.
*
BUSINESS EQUITY
REQUIREMENTS -
Subject to type of loan; Board of Directors will detcrmine
case by case, analysis under normal lending guidelincs.
* COLLAfERAL - * Liens on real property in project (mortgage deed).
* Liens on real property in business (mortgage
deed).
* Liens on rcal property hcld personally (subject to
Board of Directors - homestead exempt).
* Machinery and equipment liens (except cquipment
excmpt from bankruptcy).
* Personal and/or corporate guarantees (requires
unlimited pcrsonal guarantees).
* NON-PERFORMANCE - An approved GMEf loan shall bc null and void if funds
. are not drawn upon or disbursed within 180 days from
date of ED A approval.
* NON-PERFORMANCE
EXTENSION - The 180-day non-performanee date can be extended up to
an additional 120 days.
1. A written request is received 30 days prior to
expiration of the 180-day non-performanee date.
2. Approval of the EDA membership by majority
vote.
* LEGAL FEE - Responsibility of the GMEF applieant.
The Greater Monticello Enterprise Fund is operated as an equal opportunity program. All applicants
shall have equal access to GMEF funds regardless of raee, sex, age, marital status, or other personal
eharacteristics.
.
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EDA Business Subsidy Criteria
ORGANIZA'fION
The Greater Monticello Enterprise Fund is administered by the City of Monticello Economic
Development Authority (EDA), which is a seven-member board consisting of two Council members
and five appointed members. EDA members are appointed by the Mayor and confirmed by the City
Council. Formal meetings are held on a quarterly basis. Please see the by-laws of the EDA for more
inf()rmation on the structurc ofthc organization that administers the Greater Monticello Enterprise
Fund.
PARTICIPATING LENDING INSTITUTION(S)
1. Participating lending institutions(s) shall be determined by the GMEF applicant.
2. Participating lending institution(s) shall cooperate with the EDA and assist in carrying out the
policies of the GMEF as approved by the City Council.
3. Participating lending institution(s) shall analyze the formal application and indicate to the EDA
the level at which the lending institution will participate in the finance package.
LOAN APPLICA TION/ADMINISTRAfIVE PROCEDURES
The EDA desires to make the GMEF loan application process as simple as possible. However, certain
procedures must be followed prior to FDA consideration of a loan request. Inf()rmation regarding the
program and procedures for obtaining a loan are as fl)llows:
City Staff Duties:
The Economic Development Director, working in conjunction with the Assistant City Administrator,
shall carry out GMEF operating procedures as approved by the EDA and Council. Staff is responsible
for assisting businesses in the loan application process and will work closely with applicants in
developing the necessary information.
Application Process:
1. Applicant shall complete a preliminary loan application. StaiT will review application for
consistency with the policies set forth in the Greater Monticello Fund Guidelines. Staff
consideration of the prehminary loan application should take approximately one week.
Staff will ask applicant to contact a lending institution regarding financing needs and indicate to
applicant that further action by the FDA on the potential loan will require indication of support
from a lending institution.
2.
If applicant gains initial support from lending institution and if the preliminary loan application
is approved, applicant is then asked to complete a formal application. lfthe preliminary loan
application is not approved by staff, the applicant may request that the EDA consider approval
of the preliminary application at the next regularly scheduled mecting of the EDA.
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EDA Business Subsidy Criteria
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~.
If the preliminary loan application is approved, applicant shall complete a formal application.
Formal application shall include a business plan which will include its management structure,
market analysis, and financial statement. Like documentation necessary for obtaining the hank
loan assoeiated with the proposal is acceptable. Attached with each formal application is a
written release of information executed by the loan applicant.
4. City staff will meet with applicant and other participating lender(s) to refine the plan for
financing the proposed enterprise.
5. City staff shall analyze the formal application and financial statements contained therein to
determine if the proposed business and finance plan is viable. Staff may, at its discretion,
accept the findings of a banking institution regarding applicant credit and financial viability of
the project. After analysis is complete, City staff shall submit a written recommendation to the
EOA. A decision regarding the application shall be made by the EDA within 60 days of the
submittal of a completed formal application.
6. The EDA shall have authority to approve or deny loans; however, within 21 days of EDA
approval, the City Council may rcverse a decision by the EDA to approve a loan if it is
determined by Council that such loan was issued in violation of GMEF guidelines.
7.
Prior to issuance of an approved loan, the City Attorney shall review and/or prepare all
contracts, legal documents, and intercreditor agreements. After such revicw is completc, the
City shall issue said loan.
ORIGINAL REVOLVING LOAN FUNDING
"LETTER OF CREDIT" FROM MONTICELLO CITY COUNCIL - $200,000
SOURCE - City Liquor Store Fund
City shall transfer needcd loan amount from existing accounts at such time that individual loans are
approved. Revenue crcated through this program shall be under the control of the EOA and shall not
be transferred to City funds unless the City Council dctermines that reserves gcneratcd are not
necessary for the successful operation of the Authority. If such is the casc, such funds must be
transferred to the debt service funds of the City to be used solely to reducc tax levies for bonded
indebtedness of thc City (see Section 5 B of the ordinance establishing thc Monticello EDA).
REPORTING
1. Staff shall submit quartcrly summaries and/or annual report dctailing the status of the
Monticello Enterprise Fund.
FUND GUIDELINES MODIFICATION
1.
At a minimum, the EDA shall rcview the Fund Guidelincs on an annual basis. No changes to
thc GMEF guidelines shall be instituted without prior approval ofthc City Council.
DAWN/WORD/POLICIES 10/30/00
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EDA Business Subsidy Criteria
LOAN ADMINISTRATION
1.
City staff shall service City loan, shall monitor City position with regard to the loan, and shall
assurc City compliance with interereditor agreement.
2. All loan documents shall include an intercreditor agreement which must include thc following:
A. Definition of loan default, agreements regarding notification of default.
B. Agreements between lending institution and City regarding reproduction of pertinent
information regarding the Joan.
3. All loan documentation shall include agreements between borrower and lenders regarding
release of privacy regarding the status of the loan.
DAWN/WORD/POLICIES 10/30/00
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BYLAWS OF THE
ECONOMIC DEVELOPMENT AUTHORITY
ARTICLE I - THE AUTHORITY
Section 1. Name of Authority. The name of the Authority shall be the
"City ofMonticeUo Economic Development Authority."
Section 2. Office of Authority. The office of the Authority shall be at the City Hall
in the City of Monticello, State of Minnesota, but the Authority may hold its meetings at such
other place or places as it may designate by resolution.
Section 3. Seal of Authority. The seal of the Authority shall be in the form of a circle
and shall bear the name of the Authority and the year of its organization.
Section 4. Establishment. The City of Monticello Economic Development Authority is e
established pursuant to Minnesota Statutes, Section 469.090 to 469.108, and adopted hy Ordinance
Amendment No. 172, Chapter 3, City of Monticello, Wright County, Minnesota.
ARTICLE II - THE COMMISSIONERS
Section 1. Appointment. Terms, Vacancies, Pay, and Removal.
Shall be in accordance to the Monticello Ordinance Amendment No. 172, Chapter 3,
Economic Development Authority, Section 2-3-1: Creation.
ARTICLE III - THE OFFICERS
Section 1. Officers. The Authority shall elect a president, a vice president, a treasurer, a
secretary, and an assistant secretary at the annual meeting. A commissioner must not serve as
president and vice president at the same time. The other offices may be held by the same
commissioner. The office of secretary and treasurer need not be held by a commissioner.
Section 2. Duties and Powers. The oHicers have the usual duties and powers of
their offices. They may be given other duties and powers by the Authority.
BYLA WS.EDA: 5/13/91
AMENDED: 5/22/01
Page 1
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Section 3.
Treasurer's Duties. The treasurer:
(1)
shall receive and is responsible for Authority money;
(2) is responsible for the acts of the assistant treasurer;
(3) shall disburse Authority money by check only;
(4) shall keep an account of the source of all receipts and the nature, purpose, and
authority of all disbursements;
(5) shall file the Authority's detailed financial statement with its secretary at least once a
year at times set by the Authority.
(6) shall prepare and submit an annual report describing its activities and providing an
accurate statement of its financial condition to the City of Monticello by March 1
each year.
Section 4. Assistant Treasurer. The assistant treasurer has the powers and dutics of the
treasurer if the treasurer is absent or disabled.
Section 5.
Public Monev. Authority money is public money.
ARTICLE IV - EXECUTIVE DIRECTOR
The Economic Developmcnt Director shall be designated as Executive Director of the Authority.
Section 1. Duties. Thc Executive Director shall have general supervision over the
administration of its business and affairs subject to the direction of the Authority. As secretary,
the Executive Director in his own name and title shall keep the records of the Authority, shall
act as Secretary ofthe meetings of the Authority and record all votes, and shall keep record of the
proceedings of the Authority in a journal ofprocecdings to be kept for such purpose, and shall
perform all duties incidcnt to the office. The Executive Director shall keep in sole custody the seal
of the Authority and shall have power to affix such seal to all contracts and instruments authorized
to be executed by the Authority.
Any person appointed to fIll the office of Executive Director, or any vacancy herein, shall have such
terms as the Authority fixes, but no commissioner of the Authority shall bc eligible to this office.
ARTICLE V - MEETINGS
Section 1. Regular Meetings. Quarterly meetings shall be held upon oral or written
notice at the regular meeting place of the Authority on the 4th Tuesday of January, April, July, and
October.
BYLA WS.EDA: 5/13/91
AMENDED: 5/22/01
Page 2
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Section 2. Annual Meeting. The annual meeting of the Authority shall be held in
conjunction with the regular April mecting at the regular meeting place of the Authority.
Section 3. Soecial Meetings. Special meetings of the Authority may be called by the
president or two members of the Authority for the purpose of transacting any business designated in
the call. All commissioners of the Authority shall be notified.
Scction 4. Quorum. At any meeting of the Authority, the presence of four
commissioners shall constitute a quorum. If a quorum is not prescnt at any meeting, those prescnt
shall have power to adjourn the meeting from time to time without notice othcr than announcement
at such meeting until the requisite number of votes shall be prescnt to constitute a quorum. At any
such adjourned mceting at which a quorum is present, any business may be transacted which might
have been transactcd at the mecting as originally called. Any resolution, election, or other formal
action of the Authority shall be adopted upon the affirmative vote of a majority of the Authority
membership.
Section 5. Order of Business. At the regular meetings of the Authority the following
shall be the order of business:
1.
2.
Call to order.
Roll call.
Reading and approval of the minutes of the previous meeting.
Bills and communications.
Report of the Executive Director.
Report of committees.
Unfinished business.
New business.
Adjournment.
..,
~.
4.
5.
6.
7.
8.
9.
All resolutions shall be in writing and shall be copied in the journal of the proceedings of the
Authority.
Scction 6. Unless othcrwise specified in the agrecment or in these bylaws, all meetings
of the Authority shall be conducted in accordance with Roberts' Rules of Order revised.
Section 7. Manner of Voting. The voting on all questions coming before the Authority
shall be by roll call, and the yeas and nays shall be entered upon the minutes of such meetings.
ARTICLE VI - EMPLOYEES; SERVICES; SUPPLIES
Section I. Emplovees. Subject to limits set by the appropriations or other funds made
available, the Authority may employ such staff, technicians, and experts as may be deemed proper
and may incur such other expenses as may be necessary and proper for the conduct of its afIairs.
BYLAWS.EDA: 5/13/91
AMENDED: 5/22/01
Page 3
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Section 2. Contract for Services. The Authority may contract for services of consultants,
agcnts, public accountants, and other pcrsons needed to perform its duties and exercise its powers.
Section 3. Legal Services. The Authority may use the services of the city attorney or
hire a general counsel for its legal needs. The city attorney or general counsel, as determined by
the Authority, is its chief legal advisor.
Section 4. Supplies. The Authority may purchase the supplies and materials it needs to
carry out Sections 469.090 to 469.108.
Section 5. City Purchasing. An authority may use the facilities of its city's purchasing
department in connection with construction work and to purchase equipment, supplies, or materials.
Section 6. City Facilities, Services. A city may furnish offices, structures and space,
and stenographic, clerical, enginecring, or other assistance to its authority.
Section 7. Deleg:ation Power. The Authority may dclegatc to onc or more of its agents
or employees powers or duties as it may deem proper.
ARTICLE VII - POWERS
Section 1. Functions, Powers. and Duties. Shall be in accordance to the Monticello
Ordinance Amendment No. 172, Chapter 3, Economic Devclopment Authority, Section 2-3-4:
Functions, Power, and Duties.
Section 2. Limitations of Power. Shall be in accordance to the Monticello Ordinance
Amendment No. 172, Chapter 3, Economic Development Authority, Section 2-3-5: Limitation of
Power.
ARTICLE VIII - AMENDMENTS
Section 1. Amendment to Bylaws. The bylaws of the Authority shall be amendcd by a
majority vote of the Authority membership a regular or special meeting. The amendments must be
in written form.
Section 2. In any instance where these bylaws are in conflict with the Ordinance
Amendment No. 172, Chapter 3, Economic Development Authority, such Ordinance Amendment
shall control.
BYLA WS.EDA 5/13/91
AMENDED: 5/22/01
Page 4
.
.
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Section 3.
These bylaws are effective upon their adoption by the Authority.
Dated:
,1990.
Signed:
President
(Seal)
Executive Director
BYLAWS.EDA: 5/13/91
AMENDED: 5/22/OJ
Page 5
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,.,
EDA Agenda - 04/27/04
12.
Executive Director's Report.
a) Purchase Agreement for Chadwick property - The Small Industrial Group, Attorney Brokl,
and Engineer Bret Weiss met on April 14, 2004, and reviewed the prepared Purchase
Agreement. Bret was to submit the Chelsea Road and utility improvement costs to Matt.
Assessment at a 2: 1 ratio (developer to city) and construction of Chelsea Road within 36
months. Matt Brokl was to complete the Purchase Agreement for submission to John
Chadwick by April 26, 2004. Brokl suggested submitting the Agreement to Chadwick prior to
the Council approval to enter into a Purchase Agreement. Council tabled approving
authorization to enter into a Purchase Agreement for acquisition of land for industrial
development (120 acres of Chadwick property) at their meeting of April 12,2004.
b) CoHee roasting company ~ Looking for acreage to construct a 4,000 sq ft building. Now
leases in Buffalo. Maple Lake offering land for $1 with $60,000 Assessment on two acres.
Can do steel building.
c) WSI Industries Loan approved by EDA on Council Agenda for April 26, 2004.
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