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EDA Meeting Minutes - 5/8/2024MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, May 08, 2024 — 6:00 p.m. Mississippi Room, Monticello Community Center ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING Academy Room 4:30 p.m. Review and Discussion of Block 34 Area Redevelopment Concept Meetings and Next Steps 5:30 p.m. Follow-up Discussion of Retail Market Analysis Proposal Question Responses Commissioners Present: President Steve Johnson, Vice President Jon Morphew, Treasurer Hali Sittig, 011ie Koropchak-White, Rick Barger, Councilmember Tracy Hinz, Mayor Lloyd Hilgart Staff Present: Executive Director Jim Thares, Angela Schumann, Hayden Stensgard 1. General Business A. Call to Order President Steve Johnson called the regular meeting of the Monticello EDA to order at 6:08 p.m. B. Roll Call 6:00 p.m. Mr. Johnson called the roll. 2. Consideration of Additional Agenda Items Executive Director Jim Thares noted that an additional item was provided to the EDA and the public at the beginning of the meeting. That item was to be considered as part of the agenda as item 6B. 3. Consent Agenda A. Consideration of Payment of Bills B. Consideration of Approving Regular Meeting Minutes — March 27, 2024 C. Consideration of Approving Joint Workshop Meeting Minutes — April 10, 2024 D. Consideration of Approving Regular Meeting Minutes — April 10, 2024 E. Consideration of Resolution 2024-08 Requesting the City Council call a Public Hearing for the proposed Modification of Tax Increment Financing District 1-42 CHC -Headwaters Development 22 Unit Villa Twin Home Proposal F. Consideration Approving a Certificate of Completion for Wiha Tools, Inc. 75,000 square foot facility expansion in connection with TIF District 1-46 G. Consideration of Authorizing the Wright County Sherriff's Office to use Lot 1 and Lot 2, Block 1, 7t" Addition, as a K-9 Training site TRACY HINZ MOVED TO APPROVE THE CONSENT AGENDA. OLLIE KOROPCHAK- WHITE SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. 4. Public Hearing A. PUBLIC HEARING — Consideration of adopting Resolution 2024-09 Extending UMC Business Subsidy Agreement in connection with Purchase and Development Contract (TIF Dist. 1-41) related to 2022 Facility Expansion Executive Director Jim Thares presented an overview of the item, UMC IS requesting to extend the purchase and development contract and specifically the Business Subsidy and TIF agreement. State Statue allows the extension to April 5, 2025. Per State Statue UMC was required to add 43 jobs by April 5, 2024. As of April 19, 2024, they were short of this number by 10. They are currently hiring, having 20+ openings. Staff are confident they reach the 43 new jobs by the extended time of April 5, 2025 . Rick Barger noted that he was impressed that UMC was able to hire that number of people during this challenging hiring climate. President Steve Johnson opened the public hearing asking for public comment. There were no comments from the public as no public was in attendance, Mr. Johson closed the Public Hearing. HALI SITTIG MOVED TO APPROVE CLOSING THE PUBLIC HEARING. RICK BARGER SECONDED THE MOTION TO APPROVE CLOSING THE PUBLIC HEARING. MOTION CARRIED UNANIMOUSLY, 7-0. LLOYD HILGART MOVED TO ADOPT RESOLUTION 2024-09 AMENDING THE UMC PURCHASE AND DEVELOPMENT CONTRACT (TIF DISTRICT 1-41) BUSINESS SUBSIDY TERMS TO EXTEND THE JOB CREATION PERFORMANCE TIMELINE FROM APRIL 5, 2024, TO APRIL 5, 2025. TRACY HINZ SECONDED. MOTION CARRIED UNANIMOUSLY, 7-0. B. PUBLIC HEARING — Consideration of authorizing a Greater Minnesota Enterprise Fund Loan and a related Business Subsidy Agreement in the amount of $250,000 with Excelsior Tool Company, Inc. in connection with the purchase of property and relocation of equipment Mr. Thares informed the EDA that Excelsior Tool is pausing the pursuit of its relocation and property purchase due to problems reaching a viable property transaction with the building owner. The EDA will not need to open the Public Hearing as the proposed Business Subsidy funding arrangement is paused for an indeterminate amount of time. Mr. Thares will reach out to Excelsior Tool for further conversation of viable sites or building options and update the EDA as needed. Steve Johnson clarified the Public Hearing is not tabled; it is cancelled. If Excelsior Tool decides to move forward a new PH will be called. 5. Regular Agenda A. Consideration of Adopting Resolution 2024-10 authorizing a Purchase Agreement with Civil Engineering Site Design, LLC for the acquisition of 118 Broadway East in the amount of $665,000 and authorizing a Property Management and Lease Agreement for 118 Broadway East with Civil Engineering Site Design, LLC Mr. Thares presented the item, asking for consideration of a purchase agreement with Civil Engineering Site Design for 118 Broadway East in Block 34 and a lease agreement with the seller allowing Civil Engineering Site Design to remain in that location after the sale. The EDA held a closed meeting on 12/13/2023 to discuss the proposed property purchase and by consensus suggested staff move forward with negotiations of purchase terms at the purchase price at $665,000. This purchase amount also includes relocation benefits to the seller. Mr. Thares estimated that closing costs are estimated to be $4,300. This property is a critical parcel in Block 34 as it is currently between two properties which are owned by the EDA. Acquiring this site will make future redevelopment of Block 34 significantly more viable in a variety of options. The earnest money is proposed at $5,000, and the closing is targeted for June 14, 2024. Mr. Thares reviewed the terms of the purchase agreement and lease agreement which were attached to the report. Mr. Hilgart inquired if the EDA is responsible for maintenance costs. Mr. Thares clarified that the tenant is responsible for damage and the EDA is responsible for basic wear and tear of property. Mr. Hilgart inquired if the EDA could terminate the lease should a developer wish to develop the property. Mr. Thares clarified that the EDA could terminate the lease at any time, giving a 90 -day notice; the plan is to allow CESD to relocate to the old DMV building on the same block. Mr. Johnson said the current lease says we can terminate the lease only for tenant default or damages. Mr. Morphew concurs. Mr. Hilgart said it is reasonable to give a 60 -day notice so the EDA can take occupancy. Mr. Thares recommended the lease be adjusted and the EDA could approve. Jon Morphew questioned the terms of expiration covers the current site at 118 Broadway East. The expiration of the lease agreement for 119 3rd Street is not defined in the Purchase Agreement. Section 9 c. should be made clearer as to the lease follows termination of lease on property 118 Broadway East and entering into 1193 d Street lease. Mr. Barger clarified that the 10 -year lease agreement covers 10 years between the 2 properties, 118 Broadway Eats and 119 3rd Street, and this should be made clearer in the purchase agreement. Ms. Hinz would like the termination by the landlord to be adjusted from 90 days to 60 days written notice clarifying the there be no reason for termination in Section 18 a. of the EDA lease. Angela Schumann, Community Development Director, went through the exhibit pages and clarified what each was and that the exhibits were not inserted for this packet. Ms. Schumann listed the clarifications the EDA would like changed in the Purchase Agreement. • Section 9 — Clarify there are 2 leases • Sections 9 c. Clarify Expiration date relating to 118 Broadway E, City's lease at 1193 rd Street is executed when 118 Broadway E is terminated. • Clarify that the 10 -year period timeline of lease for both buildings begins at closing. • Review all portions of 119 3rd Street East lease specifying the amount if the property to be leased. Ms. Schumann listed the clarification the EDA would like changed in the EDA Leaseback • Section 18 — Allow the termination of the lease be their discretion of the EDA and change to a 60 -day notice. Mr. Johnson wanted clarification if the business stops being active, when the City would terminate the lease. TRACY HINZ MOVED TO TABLE 5A TO BE CONTINUED AT THE MAY 26TH MEETING TO REVIEW DOCUMENTS AS AMENDED, NOT TO DELAY CLOSING. MOTION SECONDED BY JON MORPHEW. MOTION CARRIED UNANIMOUSLY, 7-0. B. Consideration of adopting Resolution 2024-11 Authorizing an Interfund Loan for Advance of Certain Costs in Connection with a Tax Increment Financing District in Block 34 related to the acquisition of the 118 Broadway East Mr. Johnson suggested this item be tabled until May26 and contingent on approval of 5a. OLLIE KOROPCHAK-WHITE MOVED TO TABLE THIS ITEM UNTIL THE MAY 26TH MEETING. SECONDED BY RICK BARGER. MOTION CARRIED UNNIMOUSLY. 6. Other Business A. Consideration of Economic Development Manager's Report Mr. Thares provided an overview of the agenda item to the EDA and the public. B. Leasing ODPT Mr. Thares introduced the item. Matt Leonard, Public Works Director/City Engineer approached Mr. Thares of the idea of Michels Construction leasing a lot in Otter Creek Business Park (OCBP) for use as a temporary Concrete Batch Plant. The batch plant is being activated to service constructions materials -supplies for the 1-94 Gap Improvement Project. The Monticello OCBP sites are near the 1-94 Gap project. It is estimated to be three years as well as ballpark per month lease price ($10,000 or likely less). Mr. Hilgart shared concern that this may disrupt other businesses located in Otter Creek Business Park or along Chelsea Road. Ms. Hinz asked if there would be any environmental impact. Mr. Barger is concerned about the traffic impact. He inquired if the City owned property closer to the freeway. Ms. Schumann confirmed there is property closer. The EDA instructed staff to get clarification on the listed concerns. 7. Adjournment TRACY HINZ MOVED TO ADJOURN THE MEETING. SECONDED BY HALI SITTIG. MOTION CARRIED UNANIMOUSLY, 7-0. Recorder: Vicki Leerhoff V4 - Approved: July 10, 2024 Attest: 71, mes Thares, Economic Development Manager