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EDA Meeting Minutes - 02/12/25MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, February 12, 2025 — 6:00 p.m. Mississippi Room, Monticello Community Center ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING (Academy Room) 4:45 p.m. Country Club Villa Senior Housing Development Status Update Commissioners Present: President Steve Johnson, Vice President Jon Morphew, Treasurer Hali Sittig, Rick Barger, Councilmember Tracy Hinz, Mayor Lloyd Hilgart Commissioners Absent: Hali Sittig Staff: Executive Director Jim Thares, Rachel Leonard, Angela Schumann, Tyler Bevier, Sarah Rathlisberger 1. General Business A. Call to Order B. Roll Call 6:16 p.m. 2. Annual Business Meeting Economic Development Manager opened the meeting with the election of 2025 officers of president, vice-president and treasurer, and reminded policymakers that city staff may serve as the secretary roll. A. Consideration of Electing EDA officers MAYOR HILGART MADE THE MOTION TO KEEP THE OFFICERS OF STEVE JOHNSON AS PRESIDENT AND JON MORPHEW AS VICE PRESIDENT ALONG WITH HALLI SITTIG SERVING AS TREASURER. CITY STAFF WILL CONTINUE AS THE EDA SECRETARY. MOTION SECONDED BY TRACY HINZ. MOTION CARRIED, 5-0. B. Consideration of Reviewing EDA Bylaws Mr. Thares asked the EDA if they wanted any changes in the Bylaws. He noted staff have no recommended changes. C. Consideration of Reviewing EDA Enabling Resolution Jim Thares indicated that the resolution when referring to the Greater Monticello Enterprise Fund (GMEF) states guidelines, yet it should now state policies. He said at some point in the future, this should be adjusted. A public hearing would need to be held as part of that consideration. Steve Johnson stated that this has been the case for 13+ years and can remain. This was echoed by Rick Barger. D. Consideration of EDA Financial Statements and Fund Balance Information Jim Thares stated that Sarah Rathlisberger, City Finance Director, could not be in attendance this evening. She is willing to attend the March EDA meeting to present the 2024 Year End Financial Statements. Jim Thares spoke about the newly created spreadsheet with information about the GMEF and Small Cities Development Program (SCDP) loans. It contains loan balances and the original loan amount for the borrowers, including Rustech, Bondhus, RRG Holdings, LLC (Due North Car Wash), Block 52 Holdings, and Hair Obsession. Jim noted the GMEF current fund balance. He indicated that there is one application in the early - stage review. He also noted the SCDP Fund balance. Steve Johnson tabled the financial presentation until the March meeting. Mayor Lloyd Hilgart indicated that he would like to see the monthly payment amount for each loan added to the spreadsheet. 3. Consideration of Additional Agenda Items None 4. Consent Agenda A. Consideration of Payment of Bills B. Consideration of Approving Regular Meeting Minutes — September 11, 2024 C. Consideration of Approving Workshop Meeting Minutes — November 13, 2024 D. Consideration of Approving Regular Meeting Minutes — November 13, 2024 E. Consideration of Authorizing an Interfund Loan Resolution No. 2025-01 related to Block 34 Redevelopment efforts F. Consideration of Authorizing Northland Securities Professional Services Contract related to Block 34 Redevelopment TIF Analysis and Plan Preparation G. Consideration of Authorizing Northland Securities Professional Services Contract related to a potential TIF District Plan and Analysis for Karlsburger Foods proposed facility expansion located at 3236 Chelsea TRACY HINZ MOVED TO APPROVE THE CONSENT AGENDA, ITEMS A. THROUGH G. MOTION SECONDED BY RICK BARGER. MOTION CARRIED UNANIMOUSLY, 5-0. 5. Public Hearing None. 6. Regular Agenda A. Consideration of WSB & Associates' Phase II Environmental Site Assessment (ESA) Work Scope Proposal for 216 Pine Street and adiacent City owned parcel PID # 155010034020 Jim Thares reviewed the Phase II Environmental Site Assessment contract proposal submitted by WSB. He reminded policymakers that the EDA authorized seeking the Phase II ESA proposal at its January meeting. He further noted that a Phase I was completed at the 216 Pine Street parcel in April 2024. The final report indicated the presence of REC (Recognized Environmental Condition) related to a former gas station located immediately north of the parcel. Angela Schumann spoke about a future proposal from WSB as well as a review of comprehensive past environmental studies in Block 34 with the goal of noting and recommending any additional future environmental studies. LLOYD HILGART MOVED TO AUTHORIZE THE PHASE II ESA CONTRACT WITH WSB. SECONDED BY JON MORPHEW. MOTION CARRIED UNANIMOUSLY, 4-0. B. Consideration of LHB's Tax Increment Financing TIF Blight and Substandard Findings Work Scope Proposal related to Block 34 Redevelopment efforts. Jim Thares reviewed the required study to be completed before establishing a TIF District and reminded policymakers of the prior authorization at the January meeting to seek a proposal from LHB. The proposal cost is $20,600. The study will entail review of previous development coverage and building structures for dilapidated blighted conditions. He also noted the TIF statutory requirements regarding blight designation. The work tasks may take several days and will involve entering buildings. The first phase of the work activities will be $17,400 with a potential second phase priced at $3,200. The EDA has sufficient funding in its General Fund to cover the cost of the LHB study. TRACY HINZ MOVED TO APPROVE THE LHB STUDY AT A COST NOT TO EXCEED $20,600. MOTION SECONDED BY RICK BARGER. MOTION CARRIED UNANIMOUSLY, 5-0. C. Consideration of Authorizing Rights of Entry for LHB Inc. and WSB & Associates related to TIF Qualification Inspections and Environmental Investigations in Block 34 Jim Thares spoke about the need for a right of entry for both WSB and LHB to access the EDA properties, with the City Council to receive the equivalent document for the city owned property. Rick Barger noted that LHB is noted in each Right of Entry document, and it should be changed on one of them to read WSB. RICK BARGER MOVED FOR APPROVAL OF RIGHTS OF ENTRY TO LHB INC. AND WSB & ASSOCIATES AND ITS SUBCONTRACTOR(S) INTO AND ONTO EDA AND CITY OWNED PROPERTIES LOCATED IN BLOCK 34 FOR THE PURPOSE OF COMPLETING TIF QUALIFICATION INSPECTIONS AND ENVIRONMENTAL INVESTIGATIONS. JON MORPHEW SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 5-0. D. Consideration of Authorizing a Mortgage Loan Subordination to First Dakota National Bank related to mort awe refinancing by RRG Holdings, LLC's car wash facility located at 1301 Cedar Street, Monticello, MN Jim Thares reviewed the loan subordination request from RRG Holdings dba Good Day Car Wash regarding a proposed subordination of the EDA GMEF Loan. It is proposing to refinance its current mortgage debt in the amount of $4,200,000 with Cor Trust Bank. The new lender is First Dakota National Bank. They are seeking a new mortgage loan in the amount of $6,289,000 and asking the EDA to subordinate the $123,215 GMEF Loan balance to the new mortgage financing. Jim noted the recent ownership change at RRG Holdings and indicated that a review of the PFS of the ownership group was collectively extremely strong and that the risk of a loan default or non-payment of the GMEF Loan was relatively low. City staff did not do a financial analysis of the cash flow of the business. Mayor Lloyd Hilgart asked if there was a reason for the additional mortgage debt. Rick Barger asked what would happen if subordination was not changed. Jim Thares stated the loan would likely be paid off. JON MORPHEW MOVED TO DENY THE GMEF LOAN SUBORDINATION REQUEST BY RRG HOLDINGS -FIRST DAKOTA NATIONAL BANK. MOTION SECONDED BY LLOYD HILGART. MOTION CARRIED UNANIMOUSLY, 5-0. 7. Other Business A. Consideration of Economic Development Manager's Report Jim Thares spoke about the upcoming meeting protocol training for the Chair and Vice Chair roles and the basic meeting procedures. He asked the President and Vice President to reach out to Vicki Leerhoff for the dates that work the best. Jon Morphew noted he had potential conflicts though he would provide input to Vicki about the date that works best for him. Jim Thares also noted that the EDA Attorney, resigned from Kennedy & Graven and is now working at Kutack Rock, a Minneapolis law firm with an extensive amount of experience in public bond.issuance and economic development finance and Tax Increment Financing (TIF) activities. A consensus was to remain with Gina for the completion of current work and go for a Request for Proposals in the spring or summer of 2025. Jim Thares highlighted the recent EDAM Development Project of the Year (2024) Award to the City of Monticello (including the EDA) for the $28,500,000 Block 52 Redevelopment project. He played the EDAM produced video summarizing the hallmarks of the award -winning project. He noted the award presentation took place at the EDAM Conference luncheon on January 23, 2025. Jim Thares provided an update on the development prospects and projects. Tracy Hinz asked for an update on the Fairfield Inn site. Jim Thares stated they are expected to break ground in late March or early April. They have submitted their building plans for review and are awaiting permit issuance sometime in late March. 8. Adiournment TRACY HINZ MOTIONED TO ADJOURN AT 7:13 P.M. MOTION SECONDED BY RICK BARGER. MOTION CARRIED UNANIMOUSLY, 5-0. Recorded By: Vicki Leerhoff _ Date Approved: 03/12/2025 ATTEST: im Thares, EDA Executive Director