EDA Agenda 08-31-1999
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AGENDA
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, August 31, 1999 - 7:00 p.m.
City Hall
MEMBERS: Chair Ron Hoglund, Vice Chair Barb Schwientek, Assist Treasurer Ken Maus,
Clint Herbst, Roger Carlson, Bill Demeules, and Darrin Lahr.
STAFF:
Treasurer Rick Wolfsteller, Executive Director Ollie Koropchak, and Recorder
Lori Kreamer.
GUEST:
Steve or Paul Schoen, Aroplax Corporation
Call to Order.
Consideration to approve the February 23, 1999 EDA minutes.
Consideration of adding agenda items.
Consideration to review the GMEF Guidelines for possible amendment.
Public Hearing - Consideration to adopt the EDA Business Subsidy Criteria for the GMEF
pursuant to Minnesota Statutes, Sections 1161.993 through 1161.994.
Consideration to review for approval the preliminary GMEF loan application from Schoen
Properties Limited Partnership dba Aroplax Corporation.
7. Consideration to approve or deny GMEF No. 016 for Schoen Properties Limited
Partnership dba Aroplax Corporation.
8. Consideration to review the DMRF Guidelines for possible amendment.
9. Consideration to discuss EDA requests for City Budget Process Year 2000.
10. Executive Director's Report.
11. Other Business.
12. Adjournment.
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MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, February 23, 1999 - 7 p.m.
Members Present:
Chair Ron Hoglund, Vice Chair Barb Schwientek, Bill Demeules, Clint
Herbst and Darrin Lahr.
Absent:
Assistant Treasurer Ken Maus and Roger Carlson
Staff Present:
Executive Director Ollie Koropchak, Treasurer Rick Wolfsteller
Guest:
Pam Campbell, DAT, and Steve Groebner, Jane Covart and Scott Glisner,
Mainline Distribution.
1. Call to Order.
Chair Ron Hoglund called the EDA meeting to order at 7:00 p.m.
2.
Consideration to approve the November 17. 1998 EDA minutes.
A MOTION WAS MADE BY BILL DEMEULES AND SECONDED BY DARRIN
LAHR TO APPROVE THE NOVEMBER 17, 1998 EDA MINUTES. Motion carried
with Clint Herbst abstaining from the vote due to his absence from the November 17,
1998 EDA meeting.
3.
Consideration of adding agenda items.
Executive Director Ollie Koropchak stated she would like a brief discussion regarding
commercial loans.
4. Consideration to review for approval the preliminary GMEF loan application from
Mainline Distribution Properties. LLC.
Executive Director Ollie Koropchak introduced the partners in Mainline Distribution
Properties. Steve Groebner, operation managers; Scott Glisner, territory manager in
sales; Jane Covart, controller. Steve Groebner gave a brief background of the company.
They are a manufacturers representative and a distributor of materials and equipment to
natural gas utilities and their contractors. They are presently working more with
contractors who are doing the work for utilities. They stock and sell the things that are
usually not seen. They are a full service operation from well head to furnace.
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Darrin Lahr asked if they subcontracted out. Scott Glisner stated they did not, there were
contractors to do that.
Ms. Koropchak gave a project summary. Mainline is asking for a $100,000 real estate
loan with the shareholders committing to $145,000 of equity into the purchase of the
property. They are hoping to close in May 1999.
The relocation and expansion will add 11 new full-time jobs to the City at an average
wage per hour of $19.90 without benefits. They will add two new full-time jobs to the
S tate of Minnesota and City of Monticello at an average wage per hour of $1 0-12 without
benefits within the next two years.
Ollie Koropchak stated she felt that the loan should be a 20-year amortization with
balloon payment in five years. Interest rate not less than 2% below Minneapolis prime
rate which was at 7.75% on Friday, February 19, 1999. Also a loan fee of a minimum of
$200. Loan would become null and void within 180 days from the date of EDA
approval which would be August 23, 1999 if approved at this EDA meeting. The
applicant shall be responsible for the legal fees.
Clint Herbst asked what was previously in the building and whether or not it was a fair
price. Ollie Koropchak stated that Midwest Graphics was in the building before and that
the bank would be doing an appraisal.
Darrin Lahr asked if there was significant outside storage. Steve Groebner stated that
there was some and they were still renting warehouse space in Golden Valley because
they are not completely moved up to Monticello. Ollie Koropchak reminded them about
the screening requirements.
5.
Consideration to approve or deny GMEF Loan No. 015 for Mainline Distribution
Properties. LLC dba Groebner & Associates. Inc.
After review of the application, A MOTION WAS MADE BY BARB SCHWIENTEK
AND SECONDED BY BILL DEMEULES TO APPROVE GMEF LOAN NO. 015 FOR
MAINLINE DISTRIBUTION PROPERTIES, LLC, DBA GROEBNER &
ASSOCIATES, INC., IN THE AMOUNT OF $100,000 WITH THE FOLLOWING
TERMS: AMORTIZATION UP TO 20 YEARS AND A FIVE YEAR BALLOON
PA YMENT, INTEREST AT A FIXED RATE OF 5.75%. COLLATERAL,
GUARANTEES, AND OTHER CONDITION REQUIREMENTS TO BE
DETERMINED AND PREPARED BY THE GMEF ATTORNEY. THE GMEF LOAN
APPROV AL IS SUBJECT TO LENDER APPROVAL AND SUBMISSION OF
FINANCIAL STATEMENT. APPLICANT SHALL PAY $200 LOAN FEE AND
LEGAL FEES. Motion carried unanimously.
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6. Consideration to elect 1999 EOA officers.
A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY CLINT
HERBST TO APPROVE THE NOMINATIONS AS PRESENTED IN THE 2/23/99
AGENDA. THEY ARE AS FOLLOWS:
President
Vice President
Treasurer
Assistant Treasurer
Secretary
Ron Hoglund
Barb Schwientek
Rick Wolfsteller
Ken Maus
Ollie Koropchak
Motion carried unanimously.
7.
Consideration to review and accept the vear-end EDA Financial Statements. Activity
ReDort. and proposed 1999 Budget.
Executive Director Ollie Koropchak reviewed with the EDA members the year-end EDA
Financial statement, activity report and proposed 1999 budget as follows:
Cash in Balance ending 12/31/98: $133,145.03, and
a Projected Cash Flow balance of$569,855.72 ending December of 1999.
A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY BILL
DEMEULES TO ACCEPT THE YEAR-END FINANCIAL STATEMENT AND
REPORT FOR SUBMISSION TO THE CITY COUNCIL ON MARCH 8,1999.
Motion carried unanimously.
8. Consideration to review year-end balances of the GMEF. DMRF. UDAG. and ERG
Funds.
Ms. Koropchak reviewed with the EDA members the year-end balances in GMEF,
DMRF, UDAG, and ERG Funds as follows:
GMEF Cash Balance:
DMRF Cash Balance:
UDAG Cash Balance:
SCREG - Aroplax Cash Balance:
TOTAL
$373,544.51
$181,501.62
$170,209.90
$ 60.453.62
$785,709.65
No EDA action was required on this report.
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9.
Consideration to review the GMEF Guidelines for possible amendments.
Ms. Koropchak stated to comply with the GMEF Guidelines, Fund Guideline
Modification; at a minimum, the EDA shall review the Fund Guidelines on an annual
basis. She questioned whether the issue of the wage goals should be spelled out in the
application form.
Barb Schwientek stated she felt it was important that information be up-front.
Darrin Lahr agreed that the guidelines need to be known to the applicant.
Ollie Koropchak stated that Mayor Belsaas wants to see more jobs in Monticello but at
decent wages.
Clint Herbst wanted to know if a company would be eliminated because it doesn't have
enough jobs.
Ollie stated that it was the wage level not the number of jobs.
Bill Demeules wanted to know if a company could also get TIF assistance.
Ms. Koropchak stated that a company can get both ifproject meets requirements.
Darrin Lahr stated he personally did not like putting criteria on companies. You could
conceivably get a company you do not want if they meet all the criteria.
The rationale for the EDA members was for informational purposes to the company.
A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY BARB
SCHWIENTEK TO AMEND THE GMEF GUIDELINES TO INCLUDE THE
FOLLOWING LANGUAGE UNDER CRITERIA 1 (B) AT LEAST 90% OF THE JOBS
TO PAY A RATE EQUAL TO OR GREATER THAN 160% OF THE FEDERAL
MINIMUM WAGE, EXCLUSIVE OF BENEFITS, FOR INDIVIDUALS OVER THE
AGE OF 20 DURING THE TERM OF THE ASSISTANCE. Motion carried
unanimously.
10.
Consideration to review the DMRF Guidelines for possible amendments.
Executive Director Ollie Koropchak introduced Pam Campbell from OAT to the EDA
members. To comply with the DMRF Guidelines, Fund Guidelines Modification: the
EDA shall, at a minimum, review the Fund Guidelines on an annual basis. It was
suggested to consider deleting the name MCP on Page 4, Application Process and second
paragraph on page 5. The Design Advisory Team is a commission of the City and the
commissioners are appointed by the Council which is independent of the MCP.
However, at this time, the commissioners of OAT are members of the MCP Design
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Committee.
Also, members of the EDA wanted to clarify the verbiage for insurance and maintenance
verus revitalization.
Barb Schwientek felt that to try to define everything would get too complicated. The
EDA should deal with it as it comes up. The EDA has been successful thus far.
Darrin Lahr stated he wanted to make sure the EDA got all the information. He also felt
that routine maintenance and insured losses should not be covered and we should put this
on the application form.
Barb Schwientek agreed that it should be on the application form.
A MOTION WAS MADE BY DARRlN LAHR AND SECONDED BY BARB
SCHWIENTEK TO AMEND THE DMRF GUIDELINES TO DELETE MCP FROM
PAGE 4 AND 5, AND TO AMEND PAGE 4, NO.1 UNDER APPLICATION
PROCESS TO READ: THE APPLICANT WILL MEET WITH CITY STAFF TO
OBTAIN INFORMATION ABOUT THE DMRF, DISCUSS THE PROPOSED
PROJECT, AND OBTAIN A FUNDING APPLICATION FORM AND A COPY OF
SECTION 3, 4, AND 5 OF THE DESIGN GUIDELINES OF THE DOWNTOWN AND
RIVERFRONT REV IT ALIZA TION PLAN OF THE MONTICELLO
COMPREHENSIVE PLAN. THE APPLICATION FORM SHOULD STATE THAT
ROUTINE MAINTENANCE AND INSURED LOSSES WILL NOT BE COVERED.
Motion carried unanimously.
11.
Consideration to adopt priorities for redevelopment of the North Anchor (riverfront) and
appoint two representatives to the Subcommitte
Darrin Lahr read his list of five priorities:
1. Land Acquisition.
2. Increased Park Amenities.
3. Develop a Purpose for the Park.
4. Boundary Line Between Commercial & Residential.
5. Create Accessible River (Pathway).
Ron Hoglund felt it was important to know how much land to acquire. What are the
boundaries of the North Anchor.
Clint Herbst felt he did not want to buy up land and turn it over to a developer.
Barb Schwientek stated that once residents know you are interested in their property you
have to pay top dollar.
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Darrin Lahr stated that should not be setting a time limit and we need to decide how
much land we need. He would like to see park land with commercial surrounding the
park.
Clint Herbst felt it was important to have a vision for that area. It should be a area for
families. It does not have to be done right now.
Barb Schwientek felt that some type of business was needed to attract people.
Darrin Lahr was concerned that it would become less public.
Ron Hoglund felt it was important to decide what we wanted in the park. He felt that
some type of eating establishment was important.
Darrin Lahr voiced concern about preserving the land along the river. Once it is gone it is
gone forever.
Barb Schwientek also felt it necessary to define what the park was to be used for. Public
funds may be needed to help maintain the park.
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Ollie Koropchak reminded the EDA members that there needs to be three components
considered:
1. Market driven.
2. Economics
3. Meeting the residents needs.
Darrin Lahr stated that it would be necessary to create a tax base to help create what we
wanted in the North Anchor.
Bill Demeules stated the City can't do the park and then let it sit, it will not generate any
taxes.
Clint Herbst stated he did not want to spend a lot of money to acquire property. He again
stated that he did not want to buy up a house and give the land to a developer for a
restaurant.
A MOTION WAS MADE BY CLINT HERBST AND SECONDED BY BARB
SCHWIENTEK TO ADOPT THE FOLLOWING FIVE PRIORITIES TO ACHIEVE IN
REDEVELOPMENT OF THE NORTH ANCHOR.
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Define the boundaries of the North Anchor and define the boundaries of
the public and private spaces within the North Anchor.
Establish a purpose for the public space and establish an endowment fund
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for maintenance of the public space.
Preserve and expand the public space (riverfront and park space).
Development of a plan which is accountable to the taxpayers and citizens.
Establish a time-line for development of the North Anchor.
AND TO APPOINT COMMISSIONER BILL DEMEULES AND DARRIN LAHR TO
THE NORTH ANCHOR SUBCOMMITTEE. Motion carried unanimously.
12. Executive Director's Report.
Executive Director Ollie Koropchak reviewed her report to the EDA Commissioners.
13. Other Business.
A. Discussion of Commercial Loans.
Ollie Koropchak stated that she had received a call from the Monte Club
regarding the possibility of expansion once they came into the City. They wanted
information on commercial loans.
After discussion, it was decided that the Executive Director, Ollie Koropchak
should not pursue commercial businesses. If they did approach the City, the EDA
would handle on one by one basis.
14.
Adiournment.
A MOTION WAS MADE BY BILL DEMEULES AND SECONDED BY DARRIN
LAHR TO ADJOURN THE EDA MEETING AT 9:15 P.M. Motion carried
unanimously.
Nancy C. Whalen, Recording Secretary
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EDA Agenda - 8/31/1999
4.
Consideration to review the GMEF Guidelines for oossible amendment.
A. Reference and Background:
First, this item relates to the next agenda item as it is part of the new rules set by
legislators. It is recommended to amend GMEF Guidelines, DEFINITION OF PUBLIC
PURPOSE, l.(b) to add: Annual written reports are required until termination date.
Failure to meet the job and wage level goals require partial or full repayment of the
assistance with interest. This recommendation is consistent with the new business
subsidy criteria rule which became effective August 1, 1999.
You will recall the EDA recently amended the guidelines to include language relating to
wage level goals for consistency with state requirements. The GMEF wage level goals are
consistent with requirement for use of TIF on Green Acres properties which today
includes the Monticello Commerce Center and Market Place industrial properties. 160%
of the federal minimum wage is $8.24. The EDA Attorney wants the EDA to think about
this. Given this example: Ifa warehousing facility of300,000 sq ft were interested in
Monticello and certainly, the project would increase the tax and employment base.
However, a warehousing facility does not typically pay high wages or more than likely
90% of their work force may be paid wages ofless than $8.24 excluding benefits. This
does not prohibit a facility from locating in Monticello, the project just may not be eligible
for public financial assistance. The attorney wants the EDA to be aware of this.
Secondly, EDA Treasurer Wolfsteller and Koropchak briefly discussed the option to
suggest amending the GMEF Guidelines to add a Late Penalty Fee as an incentive to
ensure timely monthly payments. As reported under the Executive Director's report one
business has consistently been late on payments, otherwise, the other GMEF loan
payments and balloon payments have been quite timely. Most GMEF loan payments are
due the first day of each month. W olfsteller and Koropchak dismissed the idea because a
late penalty fee creates a negative criteria to a once positive program, number of late
payments relatively small, requires additional monitoring and collection time, and would
we collect the penaly. If the EDA members have a difference view point, please bring it
up at the meeting to consider amending prior to the next agenda item as in the future a
public hearing will be required to amend the guidelines within the business subsidy criteria.
B. Alternative Action:
1.
A motion to amend the GMEF Guidelines, DEFINITION OF PUBLIC
PURPOSE. 1.(b) to add: Annual written reports are required until termination
date. Failure to meet the job and wage level goals require partial or full repayment
of the assistance with interest.
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C.
EDA Agenda - 8/31/1999
A motion to amend the GMEF Guidelines to add a Late Penalty Fee.
A motion to leave the GMEF Guidelines as written.
A motion to table any action.
Other.
Recommendation.
Recommendation is Alternative NO.1 for consistency with the Minnesota Statutes.
D. Supporting Data:
An excerpt of the GMEF Guidelines highlighting the recommendation.
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EDA Business Subsidy Criteria
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GREATER MONTICELLO ENTERPRISE FlJND GlJIDELINES
CITY OF MONTICELLO
250 EAST BROADWAY
MONTICELLO, MINNESOTA 55362
(612) 295-2711
INTRODUCTION
The purpose of the Greater Monticello Enterprise Fund (GMEF) is to encourage cconomic
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 next section. In all cases, it is mandatory that criteria # 1 be satisl1ed, which
requires the creation of new jobs. It is the responsibility of the EDA 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
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1.
To provide loans for credit worthy businesses that create new jobs.
(a) One job is equivalent to a total of 37.5 hours per week.
(b) At least 90% of the jobs to pay a rate equal to or greater than 160% of the federal
minimum wage, exclusive of benefits, for individuals over the age of20 during the
term of the assistance. Annual written reports are required until termination date.
j'ailure to meet tile job and wage level goals require partial or full repayment of
tile assistance witll interest.
2. To provide loans for credit worthy businesses that would increase the community tax base.
3. To assist new or existing industrial or commercial businesses to improve or expand their
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 service within the city of Monticello, the compatibility of the
proposed business as it relates to the comprehensive plan and existing zoning policies, and
the potential 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).
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5.
To provide loans in situations in which a funding gap exists.
6. To provide funds fix economic development that could be used to assist in obtaining other
funds such as Small Business Administration loans, federal and state grants, etc.
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KAREN\OFFICE\POLICIES\GMEF:~
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EDA Agenda - 8/31/99
5.
Public Hearin2 - Consideration to adoot the EDA Business Subsidy Criteria for the GMEF
pursuant to Minnesota Statutes. Section 1161.993 throu2h 1161.994.
A. Reference and Back2round:
PUBLIC HEARING
Effective August 1, 1999, the legislature repealed existing Section 1161.991 and enacted
new rules governing all business subsidies granted by state and local governments. In
summary and first, all business subsidies must meet a public purpose other than increasing
tax base. Job retention is a public purpose only where job loss is imminent and
demonstrable. Before granting any subsidy, a grantor (ED A) must adopt criteria for
awarding business subsidies at a public hearing. The EDA public hearing notice appeared
in the Monticello Times, August 19 and 26, 1999.
CRITERIA FOR ADOPTION
Since the EDA has Guidelines for the GMEF, the attached addition will be added to the
guidelines as part of the criteria for consideration to adopt. Additionally, the new rule
states a subsidy agreement must be approved by the local elected governing body. In the
case of the GMEF loans, legal counsel will prepare a subsidy agreement between the
developer and the EDA for Council to approve. This agreement will be in addition to the
Loan Agreement or other closing documents. A public hearing with 10 days published
notice is required for any local governmental subsidy over $100,000. Since the maximum
amount of the GMEF loan is $100,000, this will not be applicable.
The new rule states the criteria must include a policy regarding job and wage goals,
specific target to attain the goals, and at a minimum, requires the recipient failing to meet
the stated goals to repay the assistance plus interest at a defined statutory rate except that
repayment may be prorated to reflect partial fulfillment of goals. A recipient must file
detailed reports to the grantor for two years after the benefit date or until goals are met.
A recipient must commit to continue operations at the site for at least five years after the
benefit date.
The new rule excludes a subsidy ofless than $25,000. In the case of the DMRF
Guidelines this would apply only if a business would maximize the $20,000 loan and
maximize two sides of the facade matching grant. Since this appears highly unlikely, it is
not recommended to establish new criteria and hold a public hearing for the DMRF
program at this time.
After opening and closing the public hearing, the EDA should consider the following
action.
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EDA Agenda - 8/31/99
B.
Alternative Action:
1.
A motion to adopt the EDA Business Subsidy Criteria for the GMEF pursuant to
Minnesota Statutes, Section 1161. 993 through 1161. 994.
2.
A motion to deny adoption of the EDA Business Subsidy Criteria for the GMEF.
3.
A motion to table any action.
c.
Recommendation:
Recommendation is Alternative No.1.
D. Suoporting Data:
Copy of the public hearing notice and criteria for adoption.
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MONTICELLO
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO, MINNESOTA
Business Subsidy Criteria
Public Hearing and Adoption the _ day of
, 1999.
1. PURPOSE
1:01 The purpose of this document is to establish the Economic Development Authority's
criteria for granting of business subsidies, as defined in Minnesota Statutes 1161. 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 subsides that vary from
the criteria stated herein if the Economic Development Authority determines that the
subsidy nevertheless serves a public purpose.
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 1161.993 through 1161.994.
2. STATUTORY LIMITATIONS
2:01 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
1161. 993 through 1161. 994.
3. PUBLIC POLICY REQUIREMENT
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3:01 All business subsides must meet a public purpose other than increasing the tax base. Job
retention may only be used as a public purpose in cases where job loss is imminent and
demonstrable.
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Monticello City Hall, 250 E. Broadway, PO Box 1147, Monticello, MN 55362-9245 . (612) 295-2711 . Fax: (612) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 · (612) 295-3170 . Fax: (612) 271-3272 5 A
. EDA Business Subsidy Criteria
4. BUSINESS SUBSIDY AFPROV AL CRITERIA
4:01 All new projects approved by the Economic Development Authority should meet the
following minimum approval criteria. However, it should not be presumed that a project
meeting these criteria will automatically be approved. Meeting these criteria creates no
contractual right on the part of any potential developer or the Economic Development
Authority.
4:02 The project must be in accord with the Comprehensive Plan and Zoning Ordinance, or
required changes to the plan and ordinances must be under active consideration by the
City at, the time of approval.
4:03 Prior to approval of a business subsidies financing plan and when deemed appropriate by
the Economic Development Authority, the developer shall provide any required market
and financial feasibility studies, appraisals, soil boring, iniormation provided to private
lenders for the project, and other information or data as requested.
4:04 A recipient of a business subsidy must make a commitment to continue operations at the
site where the subsidy is used for a least five years after the benefit date.
. 4:05 Recipients of any business subsidy will be required to meet wage and job 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.
5. GREATER MONTICELLO ENTERPRISE FUND PROJECT EVALUATION
CRITERIA
5:01 The Economic Development Authority will utilize the Greater Monticello Enterprise Fund
to support the community's long-term economic goals.
5:02 Each Greater Monticello Enterprise Fund subsidy will be analyzed and evaluated by the
Economic Development 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
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GREATER MONTICELLO ENTERPRISE FUND GUIDELINES
CITY OF MONTICELLO
250 EAST BROADWAY
MONTICELLO, MINNESOTA 55362
(612) 295-2711
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 arc 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 next 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 EDA 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
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1.
To provide loans for credit worthy businesses that create new jobs.
(a) One job is equivalent to a total of 37.5 hours per week.
(b) At least 90% of the jobs to pay a rate equal to or greater than 160% of the federal
minimum wage, exclusive of benefits, for individuals over the age of 20 during the
term of the assistance. Annual written reports are required until termination date.
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 increase the community tax base.
3. To assist new or existing industrial or commercial businesses to improve or expand their
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 service within the city of Monticello, the compatibility of the
proposed business as it relates to the comprehensive plan and existing zoning policies, and
the potential for adverse environmental effects of the business, if any.
4. To provide loans to be used as a secondary source offinancing 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 Business Administration loans, federal and state grants, etc.
KAREN\OFFICE\POLlCIES\GMEF: 8/31/99
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1.
EOA Business Subsidy Criteria
THE GREATER MONTICELLO ENTERPRISES
REVOLVING LOAN FUND POLICIES
BUSINESS ELIGIBILITY
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Industrial businesses
Non-competitive commercial businesses which enhance the community
Businesses located within the city of Monticello
Credit worthy existing businesses
Non-credit worthy start-up businesses with worthy feasibility studies (Deny 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.
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II. FINANCING METHOD
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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 effective 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 required by the
RLF, and the loan provides a lower interest rate).
*
GUARANTEE LOANS -
RLF guarantees a portion of the bank loan. (Personal
and real estate guarantees handled separately.)
In. USE OF PROCEEDS
*
*
*
Real property acquisition and development
Real property rehabilitation (expansion or improvements)
Machinery and equipment
KARENIOFFICEIPOLlCIESIGMEF: 8/31/99
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EDA Business Subsidy Criteria
IV.
TERMS AND CONDITIONS
*
LOAN SIZE - Minimum of$5,000 and maximum not to exceed 50% of the
remaining revolving loan fund balance; for exanlple, 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)
Minimum 10% equity FDA loan
*
LOAN TERM - 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.
*
LOANFEE-
Minimum fee of$200 but not to exceed 1.5% of the total loan
project. * Fees are to be documented and no duplication of
fees between the lending institution and the RLF. Loan fee
may be incorporated into project cost. BDA retains the right
to reduce or waive loan fee or portion ofloan fee.
*Fee to be paid by applicant to the EDA within 5
working days after City Council approval of GMEF
loan. Nonrefundable.
*
PREP A YMENT
POLICY -
No penalty for prepayment.
*
DEFERRAL OF
PAYMENTS -
Approval of the EDA membership by majority vote.
1.
2. Extend the balloon if unable to refinance, verification
letter from two lending institutions subject to Board
approval.
KARENIOFFICEIPOLlCIESIGMEF: 8/31/99
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*
INTEREST
LIMITATION ON
GUARANTEED
LOANS-
*
ASSUMABILITY
OFLOAN-
*
BUSINESS EQUITY
REQUIREMENTS -
*
COLLATERAL-
*
NON-PERFORMANCE -
*
NON-PERFORMANCE
EXTENSION -
*
LEGAL FEE -
EDA Business Subsidy Criteria
Subject to security and/or reviewal by EDA.
None.
Subject to type of loan; Board of Directors will
determine case by case, analysis under normal lending
guidelines.
*
Liens on real property in project (mortgage
deed).
Liens on real property in business (mortgage
deed).
Liens on real property held personally (subject
to Board of Directors - homestead exempt).
Machinery ffild equipment liens (except
equipment exempt from bankruptcy).
Personal and/or corporate guarantees (requires
unlimited personal guarantees).
*
*
*
*
An approved GMEF loan shall be null and void if
funds are not drawn upon or disbursed within 180
days from date of EDA approval.
The 180-day non-performance 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-performance
date.
2. Approval of the EDA membership by majority
vote.
Responsibility of the GMEF applicant.
The Greater Monticello Enterprise Fund is operated as an equal opportunity program. All applicants
shall have equal access to GMEF funds regardless of race, sex, age, marital status, or other personal
characteristics.
KARENIOFFICEIPOLlCIESIGMEF: 8/31/99
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FDA Business Suhsidy Criteria
ORGANIZA TION
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. EOA 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 ofthe EDA for more
information on the structure of the organization that administers the Greater Monticello Enterprise
Fund.
PARTICIPATING LENDING INSTlTUTION(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 APPLICATION/ADMINISTRATIVE PROCEDURES
The EDA desires to make the GMEF loan application process as simple as possible. However,
certain procedures must be followed prior to EDA consideration of a loan request. Information
regarding the program and procedures for obtaining a loan are as follows:
City Staff Duties:
The Economic Development Director, working in conj unction wi th the Assistant City Adm inistrator,
shall carry out GMEF operating procedures as approved by the EOA 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. Staff will review application for
consistency with the policies set forth in the Greater Monticello Fund Guidelines. Staff
consideration of the preliminary loan application should take approximately one week.
Staffwill ask applicant to contact a lending institution regarding financing needs and indicate
to applicant that further action by the EDA 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. If the
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 meeting of
the EDA.
KARENIOFFICEIPOLlCIESIGMEF: 8/31/99
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EDA Business Subsidy Critcria
3.
If the preliminary loan application is approved, applicant shall completea formal application.
Formal application shall inelude a business plan which will include its management
structurc, market analysis, and financial statement. Like documentation necessary for
obtaining the bank loan associated 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 Jar
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 ofa banking institution regarding applicant credit and financial viability
of the project. After analysis is complete, City staff shall submit a written recommendation
to the EDA. 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 2 1 days of EDA
approval, the City Council may reverse a decision by the EOA 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 review is complete, 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 needed loan amount from existing accounts at such time that individual loans are
approved. Revenue created through this program shall be under the control of the EDA and shall
not be transferred to City funds unless the City Council determines that reserves generated are not
necessary for the successful operation of the Authority. If such is the case, such funds must be
transferred to the debt service funds of the City to be used solely to reduce tax levies for bonded
indebtedness of the City (see Section 5 B of the ordinance establishing the Monticello EDA).
REPORTING
1.
Staff shall submit quarterly summaries and/or annual report detailing the status of the
Monticello Enterprise Fund.
.
FUND GUIDELINES MODIFICATION
1.
At a minimum, the EDA shall review the Fund Guidelines on an annual basis. No changes
to the GMEF guidelines shall bc instituted without prior approval of the City Council.
KARENIOFFICEIPOLlCIESIGMEF: 8/31/99
8
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EDA Business Subsidy Criteria
LOAN ADMINISTRATION
I.
City staff shall service City loan, shall monitor City position with regard to the loan, and
shall assurc City compliance with intcrcreditor agreement.
2.
All loan documents shall include an intercreditor agreement which must include the
[ollowing:
A. Definition of loan default, agreemcnts regarding notification of default.
B. Agreements between lending institution and City regarding reproduction of pertinent
information regarding the loan.
3. All loan documentation shall include agreements bctween borrower and lenders regarding
release of privacy regarding the status of the loan.
KARENIOFFICEIPOLlCIESIGMEF: 8/31/99
9
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EDA Agenda - 8/31/99
6.
Consideration to review the second GMEF loan application from Schoen Properties
Limited Partnership dba Aroplax Corporation.
A. Reference and Background:
GMEF Loan Request:
$100,000 Real Estate Property Loan.
Project Summary:
Aroplax Corporation was started in 1943 by Edward Schoen. In 1979, Edward Schoen's
sons, Jerald Schoen and Donald Schoen purchased the company. Jerald Schoen later
purchased Donald's share of the company in 1989. In 1992, the company began making
plans to relocate and expand their facility and in February 1993, Aroplax moved into their
new19,000 sq ft facility with a 4,000 sq ft mezzanine located in the Oakwood Industrial
Park in Monticello. Today, Jerald Schoen and his two sons, Paul Schoen and Steve
Schoen, are equal partners in the business with the day to day operation under the
management of the two sons.
In 1992, the EDA approved GMEF Loan No. 005 for Aroplax. The amount of the loan
was $85,000 for machinery and equipment and overrun/contingencies. The terms were
6% over 7 years. After two years, Aroplax was to employ a total of35 full-time
personnel with an annual estimated market value of $562, 100. The remaining unpaid
balance ofGMEF No. 005 as of August 1999 is $3,372.26. The payback on the $170,000
State's Small Cities Economic Development Grant has been paid in-full. For payable
1999, the estimated market value of the land and building is $626,7000.
In 1999, Aroplax's plans to begin construction of a 14,000 sq ft tip-up panel
manufacturing/warehousing addition to their existing building and to increase their
employment base by the addition of 10 individuals within two years. Current employment
base is 35. The new GMEF loan will be to Schoen Properties Limited Partnership and
leased to Aroplax. The expansion is due to added growth within their existing customer
base. One such company is Interacting Learning Group, a division of AItron, Inc., which
produces educational toys. Following construction, the company plans to purchase one to
two pieces ofreplacement machinery adding new technology.
Uses of Funds
Building Construction/Soft Costs
$450,000
TOT AL USES OF FUNDS
$450,000
.
EDA Agenda - 8/31/99
Sources of Funds
Stearns Bank
Equity
GMEF
$340,000
$ 10,000
$100,000
TOTAL SOURCES OF FUNDS
$450,000
The company currently has an SBA 504 loan on its existing facility. The outstanding
balances on those loans are as follows:
Bank - $280,000
SBA debenture - $235,000
Therefore the overall sources of financing, with a subordination of the first SBA loan, will
be as follows:
Overall Sources of Funds
.
Stearns Bank (first lien)
SBA 504 (second lien)
City of Monticello (third lien)
Equity
$620,000
$235,000
$100,000
$ 10,000
GREATER MONTICELLO ENTERPRISE FUND GUIDELINES
PUBLIC PURPOSE CRITERIA: Must comply with four or more of the criteria listed
below, criteria #1 being mandatory.
1.
Job Goal:
Ten new full-time jobs to the City of Monticello within two years of
the benefit date.
Wage Goal:
At least nine of the new jobs must be at a rate equal to or
greater than $8.24 excluding benefits.
2. Increases the community tax base: The construction ofthe 14,000 sq ft
manufacturing/warehousing space ($336,000
EMV) is estimated to increase the tax base
by $14,800 annually.
.
2
.
EDA Agenda - 8/31/99
3.
Factors:
To assist an existing manufacturing business to expand their
manufacturing operations.
Other factors for consideration but not limited to: Nature of
business (manufacturing), present availability of service and
product (plastic injection molding), potential adverse environmental
effects (none), and compatibility to the comprehensive plan and
zoning policy (yes, expansion tip-up panel).
4. Used as a secondary source to supplement conventional financing:
The GMEF will be the secondary source of funding to the lender, Stearns
Bank, St. Cloud, and the SBA debenture.
5. Used as gap financing: Used as gap financing (see Letter from Lender) and
as an incentive to encourage business retention and
expansion development.
6. Used to assist other funds: In addition to the lender, the equity is consistent
with the GMEF guidelines.
.
GREATER MONTICELLO ENTERPRISE FUND POLICIES
I.
BUSINESS ELIGIBILITY:
Industrial business:
Yes.
Located within city limits:
Yes, Zoned 1-2.
Credit worthy existing business:
For determination by Stearns Bank. (See
enclosed letter)
$10,000 loan per each job created. $10,000 X 10 = $100,000.
$5,000 per every $20,000 increase in property market valuation, whichever is
higher. $336,000 divided by $20,000 = $16,800 X $5,000 = $84,000.
Criteria: $100,000.
II. FINANCING METHOD:
Companion Direct Loan:
All such loans may be subordinated to the primary
lender(s) if requested by the primary lender(s). The
GMEF is leveraged and the lower interest rate of the
.
3
.
EDA Agenda - 8/31/99
GMEF lowers the effective interest rate on the entire
project.
Criteria: The GMEF take a third position behind Stearns Bank and SBA debenture
on the real estate property.
III. USES OF PROCEEDS:
Real property expansion.
IV. TERMS AND CONDITIONS:
Loan Size: Maximum not to exceed 50% of the remaining GMEF balance.
Annual GMEF Appropriation Balance, August 20, 1999, is
$100,000. Request: $100,000. Criteria: $50,000. Remaining
1999 GMEF $25,000.
Leveraging: Minimum 60% private/public non-GMEF. Maximum 30% GMEF.
Minimum 10% equity of GMEF loan.
.
Stearns Bank
Equity
GMEF
TOTAL
$340,000(76%)
$ 10,000 (2%)[10% EDA]
$100,000(22%)
$450,000(100%)
Loan Term: Real estate property maxmium of 5-year maturity amortized up to
30 years. Balloon payment at 5 years.
Criteria: 20-year amortization with balloon payment in five years.
Interest Rate: Fixed rate not less than 2% below Minneapolis prime rate. Prime
rate per National Bank (First Bank) of Minneapolis on date of ED A
loan approval. Prime rate August 31, 1999 is %.
Criteria: % fixed rate.
Loan Fee:
Minimum fee of $200 but not to exceed 1.5% of the total loan
project. Paid by applicant to the EDA within five working days
after City Council approval of GMEF loan. Nonrefundable. Loan
.
4
.
EDA Agenda - 8/31/99
fee may be incorporated into project cost. EDA retains the right to
reduce or waive loan fee or portion ofloan fee.
Criteria: Minimum fee of $200.
Prepayment Policy: No penalty for prepayment.
Deferral of Payments: 1. Approval of the EDA membership by majority vote.
2. Extend the balloon if unable to refinance,
verification letter from two lending institutions
subject to Board approval.
Interest limitation on guaranteed loans:
Not applicable.
Assumability ofloan: None.
Business equity requirements:
Subject to type ofloan; Board of Directors
will determine case by case, analysis under
normal lending guidelines.
.
Collateral:
Machinery and equipment liens (except equipment exempt from
bankruptcy) and personal and/or corporate guarantees (requires
unlimited personal guarantees) as per the GMEF attorney.
Non-performance: An approved GMEF loan shall be null and void iffunds are
not drawn upon or disbursed within 180 days from date of
EDA approval.
August 31, 1999 EDA approval-loan becomes null and void February 29,
2000.
Non-performance extension: Not applicable.
Legal Fee:
Responsibility of the GMEF applicant.
B. Recommendation:
Recommendation is to review this information prior to the EDA meeting for discussion
and potential questions. Steve or Paul Schoen will be present at the EDA meeting.
Consideration to approve or or deny GMEF Loan No. 016 is the next agenda item.
.
5
.
.
.
EDA Agenda - 8/31/99
c.
Supporting; Data:
Preliminary GMEF application. Letter of intent or credit analysis from lender
provided at meeting.
6
.
.
.
GREATER MONTICELLO ENTERPRISE
250 EAST BROADWAY
MONTICELLO, MINNESOTA
PRELIMINARY APPLICATION FOR LOAN
APPLICANT: S~e.r......J - S~e..r....
FIRM OR TRADE NAME: At'2..J::>?l..A-K (aiL?,
BUSINESS ADDRESS: ~ c....h~S~ (~
CITY/STATE: VV\o",--\:-lt--e....lLo \ W\I""'\.. ZIP CODE: C;;-S3b2-
TELEPHONE: (BUS.) ,=>12--LQ-S;- SeaL (HOME) Co\2--Lt20--2J;::;'~'l
'J.?-4
DA TE ESTABLISHED: \ 9 ~ EMPLOYER I.D.#
_SOLE PROPRIETOR CORPORATION _PARTNERSHIP
MANAGEMENT
NAME ~ TITLE OWNERSHIP %
~~ '-~-~~d&--+ ~;:
W. \ 'S!")
PROJECT LOCATION: ~ Ch..e...l s..e.o... (l.co...al
NEW LOCATION .-.-LEXISTING BUSINESS
TOTAL PROJECT COST ESTIMATE: $ 4lf So ooc:::> _t SSo ~
I 1
PROPOSED USES:
REQUEST:
LAND $
EXISTING BUILDING ~ ~
CONSTRUCTION $. 4So - ,000 Jf?
MACHINERY CAPITAL
WORKING CAPITAL
OTHER
TOTAL USES: ~SD-~s.sol~ f'5"
AMOUNT OF LOAN $J 00.. 0 0 0
MATURITY & TERMS
REQUESTED
APPLICANT'S EQUITY
LOAN PURPOSE <.D~ .u ~ 0..-.......
PROPOSED BEGINNING DATE:
ESTIMATED COMPLETION DATE:
~-..+h..s. +.-0........... S+ov.-t
TITLE TO
PROJECT ASSETS TO BE HELD BY:
OPERATING ENTITY
ALTER EGO
PARTICIPATING LENDER: id- \.... be- J..~ Y\o"'\::. _~
c ~. \----\ (Name) . (Address)
~ ~ 'J~ ()2 ?~-~~ l.,\."'g,?
(Contact Person) <:;~" ...-:0/:;1.0 _ '':2,.0';). - l- l4 D (Telephone #) .
. '3- .<; L',^- ? '-( ~ - S f\ ':)... \...\
PRESENT # OF F.T. EMPLOYEES:~_]S"ROJECTED # OF F.T. EMPLOYEES(within 2 years) ~
PROJECTED AVERAGE WAGE PER HOUR: 't- 'g ,..-0 - $' I.iL <:>0/ h,r-Q.. ~c...\ <J ~ ,'\(\. ~ ~ ~ ,-t-S
/
ADDITIONAL PROJECT INFORMATION:
APPLICANT SIGNATURE: ~ ~'>,J. ~ Sc ~
DATE SIGNED: ~- --z...s- -9:..'\
--
~~ W~,?.\.l
iflA
.
.
GOALS OF BUSINESS RECEIVING ASSISTANCE
Please indicate number of employees at each level and indicate the corresponding benefit level.
Number of jobs created is over the first two years.
. .::~'~.}; ~- T::~~~'(
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..
....r,..,.I~.......~..,.<<
&-iJ
.
.
.
BDA Agenda - 8/31/99
7.
Consideration to approve or denv GMEF No. 016 for Schoen Properties Limited
Partnership dba Aroplax Corporation.
A. Reference and Background:
After review and discussion of the preliminary application from Schoen Properties Limited
Partnership, the BOA is asked to consider approval of denial of the request for a $100,000
GMEF loan. One of the Schoens will be present at the BOA meeting and perhaps, Steve
Domine, Stearns Bank, St. Cloud. Stearns Bank will submit to the EOA Office a copy of
the requested financial and company data per the BDA final application. Additionally, the
bank will submit a letter determining the financial credibility of Schoen Properties or
Aroplax.
First, the BDA needs to determine if this GMEF loan application from Schoen Properties
will encourage economic development. Secondly, the BDA must determine if the
proposed construction of real estate property and the application comply with the BDA
Business Subsidy Criteria - GMEF Guidelines. Lastly, the BDA must determine the
amount and terms of the loan for approval.
The City Council will consider ratification of the BDA's action and approval of the
Subsidy Agreement for GMEF No. 016 to Schoen Properties on September 13, 1999. If
approved, the GMEF will be disbursed at the bank closing. It is recommended, the
approved dollars be disbursed from the UDAG funds.
B. Alternative Action:
1. A motion to approve GMEF Loan No. 016 for Schoen Properties Limited
Partnership, dba Aroplax Corporation in the amount of $80,000 with terms and
conditions as recommended. Collateral, guarantees, and other condition
requirements to be determined and prepared by the GMEF attorney. The GMEF
loan approval subject to lender commitment and submission of financial statements
and Council approval of the Subsidy Agreement.
2. A motion to approve GMEF Loan No. 016 for Schoen Properties Limited
Partnership, dba Aroplax Corporation in the amount of $ with
terms and conditions as recommended and determined.
3. A motion to deny GMEF Loan No. 016 for Schoen Properties Limited
Partnership.
4.
A motion to table any action.
1
.
EDA Agenda - 8/31/99
c.
Recommendation:
Recommendation is for Alternative NO.1 or 2 with terms and conditions as recommended
per the criteria, with the exception to review the Loan Size Criteria. The EDA needs to
consider the Loan Size language. When the GMEF program started the $200,000 balance
was based on the annual Liquor Fund Appropriation and not on the GMEF balance.
Please review the EDA Fund balances under the Executive Director's report. Also note
the potential request from Twin City Die Casting for $100,000 GMEF and the State Grant
application of$250,000 to $400,000 of which the payback will be recycled into the
GMEF. Staffhas no problem with $80,000 or $100,000. This loan supports assisting an
existing industrial business and this company was instrumental in providing two successful
industrial leads to the City of Monticello. However, the wage goals could be greater.
Approval subject to lender commitment and Council approval.
D. Supporting Data:
None.
.
.
2
.
.
,
EDA Agenda - 8/31/99
8,
Consideration to review the DMRF Guidelines for possible amendment.
A. Reference and Background:
At the Design Advisory Team (DAT) meeting, the discussion arose about the possibility of
amending the Guidelines to extend the DMRF boundaries to include the blocks or
businesses along Walnut Street between the North and South Anchors. This would
encourage business facade improvements along Walnut Street and accelerate the use of
the funds. The focus of the MCP for 2000 is the revitalization, rear store entrances, and
new busineses with less concentration on community activities. The MCP has hired a
new director and she'll start October 1. At the conclusion of the last DAT meeting, DAT
members agreed with Koropchak to concentrate on marketing the DMRF for year 2000
through one-to-one meetings with Broadway business owners and present drawings of
facade improvement options. Unless the EDA disagrees with the conclusion of the DA T
members, no action is required for amending the Guidelines. However, the following
action is recommended.
B. Recommendation:
The EDA should make a motion to extend the use of the remaining DMRF balance of
$174,078.08 through year-ending, December 31, 2000,
1
.
.
.
GMEF No. 015 - This real estate loan for Mainline Distribution dba Groebner &
Associates closed on June 1, 1999. The $100,000 was disbursed from the
SCREG, $60,453.62 (now closed) and the UDAG, $39,546.38. A check for $650
from the company reimbursed the EDA for costs associated with the preparation
of the EDA loan documents. Previously the company had submitted the $200 fee.
DMRF No. 108 and 109 - DMRF No. 108 to Bruce and Cynthia Hamond was
disbursed on June 11, 1999, in the amount of$5,411.80. And DMRF No. 109 to
Dorothy Topel was disbursed on July 12, 1999, in the amount of$2,0I1.74.
GMEF No. 014 - Attached is a letter mailed to T. 1. Martin, Inc. dba Lake Tool
giving notice of payment due. You will note the remitted payment was for June
and July only. Previously, I had called the company regarding late payment for
January through June and they remitted a check for January through May. The
existing payback is for interest only with the principal payback starting at a later
date per the loan agreement. The company has not paid their first lf2 year of
property taxes of which they received up-front TIF assistance in the amount of
$37,900. HRA addressing that issue. EDA agenda item 4 addressed the late
penalty fee.
Twin City Die Casting, Inc. - This manufacturing company has selected Monticello
for the site of their new Phase I 40,000 sq ft facility. The company plans to add 50
new jobs (perhaps 75) at wage goals between $10 to $16 excluding benefits. The
company looked at 10 other communities. The planned funding sources include
Industrial Revenue Bonds, Lender, State Grant, GMEF, and TlF. The State Grant
application will be between $250,000 to $400,000 and the GMEF application
request will be $100,000. Site selection is 6 acres along the south side of Chelsea
Road, the most easterly site next to the new high school entrance.
Current Sources of Funds - Please see the attached Sources of Funds to assist with
the determination of the loan size for Schoen Properties.
Resolution supporting acquisition of industrial lands - Rick and I have met with the
Goeman Group and John Chadwick relating to discussion of price for acquisition
and costs for infrastructure development. No firm numbers at this point and no
time frame outlined. Infrastructure development costs for the 225 acres of the
Gold Nugget parcels are also being obtained for comparison.
SCREG Aroplax - Note the Grant Adjustment Notice from the State satisfYing all
repayment requirements ofthe $170,000 grant/loan.
10.
Executive Director's Reoort.
a)
b)
c)
d)
e)
f)
g)
EDA Agenda - 8/31/99
1
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MAINLINE DISTRIBUTION PROPERTIES LLC
9530 FALLON AVENUE NE 612-295-5355
MONTICELLO, MN 55362
17-114/910
2583235
1002
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lJOOm"isdcll AIt, S. . Minncafloll~. MN ,1),5404 . (!1I;!)8H 6111)0
1:3605 27th Av, N. . rlymlluth, MN 554-11. (612)$~O-05OU
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KENNEDY & GRAVEN
Chartered
200 South Sixth Street, Suite 470
Minneapolis, MN 55402
(612) 337-9300
CLIENT SUMMARY June 8, 1999
Monticello EDA
Ollie Koropchak
PO Box 1147
Monticello, MN 55362-9245
Through May 31, 1999 ~
MN325-00005: Mainlin Distrinution prop~rties Lo~
Services Rendered:
Disbursements:
Balance Due:
.
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$
518.00
$
$
480.20
37.80
$
518.00
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KENNEDY & GRAVEN
Chartered
200 South Sixth Street, Suite 470
Minneapolis, MN 55402
(612) 337-9300
June 8, 1999
Monticello EDA
Ollie Koropchak
PO Box 1147
Monticello, MN 55362-9245
MN325-00005: Mainline Distrinution Properties Loan
Invoice # 30602
Through May 31, 1999
For All Legal Services As Follows:
OS/26/99 DJG Draft loan agreement.
OS/27/99 DJG Draft loan agreement and related documents.
Total Services:
For All Disbursements As Follows:
OS/27/99
Photocopies
Total Disbursements:
Total Services And Disbursements:
0.10
4.10
$
$
$
11.43
468.77
480.20
37.80
37.80
518.00
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.
KENNEDY & GRAVEN
Chartered
200 South Sixth Street, Suite" 70
Minneapolis, MN 55402
(612) 337.9300
May 10, 1999
rc~~r
Monticello EDA
Ollie Koropchak
PO Box 1147
Monticello, MN 55362-9245
MN325-00005: Mainline Distrinution Properties Loan
Invoice # 30029
Through April 30, 1999
For All Legal Services As Follows:
04/14/99 DJG Draft loan documents for Mainline Distribution
1.10
Total Services:
$
132.00
132.00
.
Total Services And Disbursements:
$
132.00
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CITY OF MONTICELLO
GENERAL FUND
250 EAST BROADWAY
MONTICEllO, MN 55362
75-1664
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NO. 44877
MAROUETTE BANK - MONTICELLO
PO. BOX 729
MONTICEllO. MN 55362
DATE
6/11/99
CHECK NO.
44877
AMOUNT
$5,411.80
FIVE THOUSAND FOUR HUNDRED ELEVEN DOLLARS AND 80/100*******Fi*,********
PAYlO
THE
ORDER
OF
BRUCE A. AND CYNTHIA M. HAMON>>
1021 WEST RIVER STREET
MONTICELLO, MN 55362
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.90732
ACCOUNT I P.O. I INVOICE I DESCRIPTION I AMOUNT
250.46501.4340
DMRF NO. 108
$5,411.80
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CITY OF MONTICEllO
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August 2, 1999
MONTICELLO
Mr. Eric G. Bondhus, Vice President
T. 1. Martin, Inc.
1347 Dundas Circle
Monticello, MN 55362
Re: GMEF Loan No. 014
Dear Eric:
.
Per the Loan Agreement between T. 1. Martin, Inc. and the Monticello Economic Development
Authority dated February 18, 1998, the Borrower received a loan in the amount of $87,500 from
the Lender. The interest payment on the repayment of the loan is due and payable the first day of
each and every month thereafter until paid in full.
No payment has been received for the months of June, July, and August of 1999, the total past
due amount is $1,453.48. Please remit this amount to the Monticello EDA, PO Box 1147,
Monticello, MN 55362. Should you have any questions, please do not hesitate to call me at 271-
3208.
Sincerely,
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR lHE CITY OF MONTICELLO
Qj~ ~o ~~~
Ollie Koropchak:
Executive Director
c: GMEF No. 014 File
.
Monticello City Hall, 250 E. Broadway, PO Box 1147, Monticello, MN 55362-9245. (612) 295-2711 . Fax: (612) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362. (612) 295-3170. Fax: (612) 271-3272
CJf-}
.
T J MARTIN, INC.
5048
Vendor:
City of Monticello
Check Date:
Aug 6, 1999
Item to be Paid - Description
6/1/99 Invoice: 6/1/99
7/1/99
Check Amount: $963.72
Discount Taken Amount Paid
489.76
473.96
, ". ~ ,,- "~ \ ....". - .!.... rr _- ,~ ;to. 1,.;:;;:;;:..Lj.. l i.'::::;' .....~..j~;~ L-.~ _ ~ ..~ _ . _ _;;^ .,F:.;:~.,'~ "', - :::
. :)1:'", 11"'..".... -",,"?t;'l'!ffi~}"-""':~Jll:":'-'''-'-''!>;;?-' -;&1' ~=- 'tl:w-~rr"'2'l.1iE..;# 1--. -- ". .; - -." .=.... ,,"..!,"..'-- . --":5 048
"~~J;~~,.~li~~R~i"':t~ ~';.-~~;t:~~~~{~'i";2t~~'~?!if? - ";;"" . . .
""",I;;;C'~<:'.. ':", ~:!;.' ".TJ.MARTlN, INC. c c-- .-,'.'P,Ji'.-."'",...: ':....'C? --:'r'-""""""" .MARQUETTEBANKS
'.+t~{.~{ ::-,,~~: '- :.~:~i~~cl:~Mb~~g~~9.~M~R~2 . . ..;<~;~~~~~[tl~Jo'~=:;i~~~--;.~~!:!'~-}-~' ". ;:' :~~.664-g10
Nine Hundred Sixty-Three and 12/10G Dollars
DATE
AMOUNT
~
PAY
TO THE
ORDER
OF
City of Monticello
Monticello, MN SS3b2
Aug La, 1999
**********$963.72*
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.
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.
.
SOURCES OF FUNDS
GMEF Cash Balance (Jan 1999)
DMRF Cash Balance (Aug 1999)
UDAG Cash Balance (Aug 1999)
SCREG Aroplax Cash Balance (Aug 1999)
TOTAL
January 1, 1999 Balance
$373,544.51
$174,078.08
$130,683.12
$ 0
$678,305.71 *
$785,709.65
* This total does not include any revenues (principal or interest paybacks from 1999), only loan or
grant disbursements.
* Twin City Die Casting - GMEF request of$100,000 and State Grant perhaps $250,000 to
$400,000 plus interest payback to GMEF.
CiS
GRANT ADJUSTMENT NOTICE
ECONOMIC DEVELOPMENT PROGRAM
Department of Trade and Economic Development
Grant # CDAP-91-0274-H-FY93
Grantee: City of Monticello
Project Title: Aroplax Corporation
Adjustment # 5
THE FOLLOWING ADJUSTMENT IN THE ABOVE GRANT PROJECT IS APPROVED
A. The status of this grant is now
CODE:
Former status was
CODE:
B. The award amounts for this grant are changed and/or final as
follows:
Former
Chanqe
Final
Small Cities
,ERF
Grantee
Other
Total
~ C. Other (Narrative)
This GAN acknowledges that the Department of Trade and Economic
Development has received from the City of Monticello a total of
$75,626.64 in loan repayments required under the Grant
Agreement for the Aroplax Corporation project, thus satisfying
all repayments requirements to the Department of Trade and
Economic Development.
mont81399gan.
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