EDA Minutes 10-09-2013MINUTES
ECONOMIC DEVELOPMENT AUTHORITY (EDA) MEETING
Wednesday, October 9, 2013 - 6:00 p.m., Mississippi Room
Present: Bill Demeules, Bill Tapper, Tracy Hinz, Matt Frie, Rod Dragsten, Tom Perrault,
Brian Stumpf
Absent: None
Others: Jeff O'Neill, Wayne Oberg, Angela Schumann, Dan Wilson, Tom Scott, Jim
Peterson, Rusty Fifield, Garry Ekegren
1. Call to Order
Bill Demeules called the meeting to order at 6:00 p.m.
2. Acce tance of Minutes — August 6th 2013 Special Meetinjj Minutes August 14th
2013 ReLrular Meeting Minutes Sej2 tember 11th 2013 Regular Meeting Minutes and
September 23�d, 2013 Special Meeting Minutes
BILL TAPPER MOVED TO ACCEPT THE AUGUST 6', 2013 SPECIAL MEETING
MINUTES AS CORRECTED. MATT FRIE SECONDED THE MOTION. MOTION
CARRIED 7 -0.
BILL TAPPER MOVED TO ACCEPT THE AUGUST 14', 2013 REGULAR
MEETING MINUTES AS PRESENTED. BRIAN STUMPF SECONDED THE
MOTION. MOTION CARRIED 7 -0.
MATT FRIE MOVED TO ACCEPT THE SEPTEMBER 11', 2013 REGULAR
MEETING MINUTES AS PRESENTED. ROD DRAGSTEN SECONDED THE
MOTION. MOTION CARRIED 6 -0. (Bill Tapper did not vote as he was absent on that
date.)
TRACY HINZ MOVED TO ACCEPT THE SEPTEMBER 23RD, 2013 SPECIAL
MEETING MINUTES AS CORRECTED. BRIAN STUMPF SECONDED THE
MOTION. MOTION CARRIED 5 -0. (Bill Demeules and Bill Tapper did not vote as
each was absent on that date.)
3. Consideration of additional agenda items None
4. Consideration of approving payment of bills
BILL TAPPER MOVED TO APPROVE THE PAYMENT OF BILLS THROUGH
SEPTEMBER 2013 IN THE AMOUNT OF $19,701.56. MATT FRIE SECONDED THE
MOTION. MOTION CARRIED 7 -0.
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5. Consideration to proceed with unlawful detainer action for 100 Broadway East
Angela Schumann briefly highlighted events that led the EDA to consider legal action
related to the property at 100 Broadway East. After 16 months of tenant relocation
services, Garry Ekegren had not yet finalized plans for vacating the building and re-
establishing his business (The Pizza Factory) at a new location. As a result, the EDA has
been unable to move forward with redevelopment goals, as established in the Embracing
Downtown Plan, which include preparing the site for demolition and facilitating the
construction of intersection improvements at CSAH 75 and TH 25.
City Attorney Tom Scott confirmed that the EDA had provided the tenant proper 90 -day
notice to vacate the space and a 30 -day lease termination as was required to initiate
unlawful detainer action.
Although Ekegren had been working with Jim Peterson from Bullseye Properties to
review plans and cost scenarios for buildout at several potential sites, no substantial
relocation progress had been made. It was noted that the tenant holdover lease agreement
had been previously been extended by two months contingent on a signed lease
agreement. Without the signed lease for a new space, the lease for 100 Broadway East
expired on October 1 't, 2013.
Relocation expert Dan Wilson indicated that the precise funding gap between anticipated
construction costs for the new space and the relocation benefits for which the tenant
would be eligible had not been identified. He said that, although there was a proposal in
which the owner of the site would pay for approximately half of the funding gap, Ekegren
had struggled to take action without a business plan or financing in place to address the
additional costs.
Wilson explained that vacating tenants had the option of either receiving a fixed payment
based on the average net business income over the past two years or a $20,000 cash
payment if opting to go out of business. He noted that the EDA would be responsible for
moving the tenant's personal property and associated storage costs for up to 12 months if
a lease agreement was not yet in place upon vacation of the premises. There were,
however, some questions about replacing several pieces of equipment that were not code
compliant. Ekegren would be eligible for relocation expenses up to 18 months after he
vacated the premises.
Angela Schumann pointed out that there is currently no City or EDA subsidy program in
place to address the funding gap. She suggested that the EDA be cognizant of setting
precedent.
Peterson stated that Ekegren had been concerned about finding an affordable site for his
business and had chosen the proposed location based on his cash flow. He indicated that
Ekegren is looking to the EDA for help or ideas in resolving the estimated $40,000
funding gap.
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EDA Minutes - 10/09/13
Ekegren said that he had not looked into obtaining a bank loan to address the funding gap
for the new site.
Tom Perrault said that he'd prefer that the EDA allow Ekegren one more month to
arrange for bank financing to address the funding gap and finalize the relocation process.
BILL TAPPER MOVED TO PROCEED WITH ACTION OF UNLAWFUL
DETAINER AGAINST THE REMAINING TENANT AT 100 BROADWAY EAST,
AS A RESULT OF FAILURE BY THE TENANT TO ENTER INTO AN ALTERNATE
LEASE AGREEMENT BY THE REQUIRED DEADLINE OF SEPTEMBER 30, 2013;
AND THAT THE EDA PROCEED TO UNLAWFUL DETAINER AFTER A ONE
MONTH PERIOD TO ALLOW THE TENANT TIME TO RESOLVE ISSUES
RELATED TO A CURRENT RELOCATION OPPORTUNITY AND THAT SHOULD
THE TENANT HAVE RESOLVED THE NOTED ISSUES, THE EDA REVISIT THE
ACTION TO PROCEED TO UNLAWFUL DETAINER AFTER A ONE MONTH
PERIOD. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 5 -1
WITH TOM PERRAULT VOTING IN OPPOSITION. (Matt Frie did not vote due to a
stated conflict of interest.)
6. Consideration to request that the City Council call for a public hearing on
Modifications to the Tax Increment Mnancing Plan for Tax Increment Financin
District No. 1 -6
Angela Schumann summarized the proposed modifications to the TIF Plan for TIF
District 1 -6, which will allow that additional land be authorized for acquisition and will
reallocate tax increment expenditures within the budget. These modifications must be
made by the district's year end decertification date.
The proposed TIF plan modification supports the adopted 2013 EDA workplan, which
places a priority on redevelopment consistent with the Embracing Downtown Plan. The
modifications enable increment to be used for acquisitions throughout the Central
Monticello Redevelopment Project Area and can also be used to facilitate demolition, site
grading, and utility or other site improvements needed to support a redevelopment
project.
Brian Stumpf asked if it would be an option to loan out increment. Schumann pointed out
that increment expenditures must tie back to the general purpose of the district.
Rusty Fifield, from Northland Securities, indicated that, as long as there is a plausible
reason for retaining increment, and demonstrable progress has been made to move a
project forward, it may be reasonable to wait a year or so to expend TIF 1 -6 funds.
Tracy Hinz noted that it had proven to be a barrier in the past that the EDA did not have
property ready for development and wondered if buying property in anticipation of
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development would be a useful strategy.
Jeff O'Neill agreed that it was important that the EDA have the flexibility to take action
as redevelopment opportunities arise.
Bill Tapper pointed out that a small group has been working to create a methodology by
which the EDA could facilitate the availability of property rather than purchase it.
BILL TAPPER MOVED TO REQUEST THAT THE CITY COUNCIL CALL FOR A
PUBLIC HEARING ON A RESOLUTION FOR MODIFICATION TO THE TAX
INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT
NO. 1 -6 AND TO DIRECT STAFF TO WORK WITH KENNEDY & GRAVEN AND
NORTHLAND SECURITIES TO PREPARE REQUIRED MODIFICATION
DOCUMENTATION. MATT FRIE SECONDED THE MOTION. MOTION CARRIED 6-
0. (Brian Stumpf did not vote as he had left to attend a Monticello Orderly Annexation
meeting in the township prior to the vote.)
7. Consideration_ to approve 2014 Wrip_ht County Economic Development Partnership
annual membership dues
The Wright County Economic Development Partnership ( WCEDP) recently partnered
with WSB's Market Matching Team for two site selector networking events which
provided Monticello direct access to national site selectors. Staff recommended that the
EDA approve funding 2014 WCEDP membership dues to ensure that the organization
will continue to make connections on behalf of Monticello.
BILL TAPPER MOVED TO APPROVE AUTHORIZING PAYMENT IN THE
AMOUNT OF $2,431.40 FOR 2014 MEMBERSHIP DUES TO WRIGHT COUNTY
ECONOMIC DEVELOPMENT PARTNERSHIP. ROD DRAGSTEN SECONDED THE
MOTION. MOTION CARRIED 6 -0.
8. Consideration of the Director's Report
Corridors of Commerce — City Council will submit a letter in support of request for
inclusion of an I -94 expansion project in the Corridors of Commerce program.
Market Matching — Matt Frie noted that the recent WSB Market Matching update was
very informative. John Uphoff will provide updates every few months.
Block 34 Update — Angela Schumann has an appointment on October 23rd to walk Block
34 with LHB consultants to discuss the scope of redevelopment qualification.
Industry of the Year — Suburban Manufacturing was named 2013 Industry of the Year
and will be presented with an award at a breakfast event on October 23'd.
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413 4`h Street – The buyer decided not to purchase the property.
9. Adjournment
TRACY HINZ MOVED TO ADJOURN THE MEETING AT 7:19 P.M. BILL TAPPER
SECONDED THE MOTION. MOTION CARRIED 6 -0.
Recorder: Kerry Burri —K--&
Approved: Nove ber 13, 2013
Attest:
Jef fo6X 1, City Administrator