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IDC Agenda 11-15-1990 . AGENDA MONTICELLO INDUSTRIAL DEVE Thursday, November 15, City Hall OPMENT COMMITTEE 990 - 7:00AM MEMBERS: Chairperson Shelley J hnson, Don Smith, Ron Hoglund, Ken Maus, Harvey Kend 11, Dale Lungwitz, Jay Morrell, Lowell Schrupp, Arve Grimsmo, Dennis Taylor, Linda Mielke, Dave Peterso , John McVay, Tom pogatchnik, Tom McDermott, and B b Dawson. STAFF: Rick Wo1fste11er, Jeff O'Neill, and Ollie Koropchak. 1. CALL TO ORDER. 2. APPROVAL OF THE OCTOBER 18 1990 IDC MINUTES. 3. CONSIDRATION TO HEAR IDC F NANCIAL REPORT. 4. PROSPECTS: 1.2 million sq ft distribution center Jeff Eastey En erprises, Inc. Circuit Techno ogies, Inc. Arop1ax Others . 5. CONSIDERATION OF THE TIRE SERVICE EQUIPMENT MANUFACTURING, INC. RECEPTION AND TOUR. 6. CONSIDERATION OF BANQUET 7. CONSIDERATION TO HEAR OF RA APPROVAL FOR IDC CONCEPT PLAN ON LEASEABLE INDUSTRIAL S ACE. 8. CONSIDERATION OF IDC MEMB RS CHOICE ON BUSINESS RETENTION AND EXPANSION VISITS. 9. OTHER BUSINESS. 10. ADJOURMENT. . . MINUTES MONTICELLO INDUSTRIAL DEV LOPMENT COMMITTEE Thursday, October 18, 990 - 7:00AM City Hall MEMBERS PRESENT: Vice Chairpe son Don Smith, Dale Lungwitz, Ron Hoglund, Tom Pogatchnik, Jqhn McVay, Ken Maus, Da e Peterson, and Jay Morrell. MEMBERS ABSENT: Shelley Johnson, Harvey Kendall, Bob Dawson, Lowell Schru p, Arve Grimsmo, Dennis Taylor, Linda Mielke, and Tom McDermott. STAFF PRESENT: Ollie Koropch STAFF ABSENT: Rick Wo1fste11 1. CALL TO ORDER. Jeff O'Neill. Vice Chairperson DonSmit called the IDC meeting to order at 7:10 AM. 2. APPROVAL OF THE SEPTEMBER 20, 1990 IDC MINUTES. Dale Lungwitz made a moti n to approve the September 20, 1990 IDC minutes, seconde by Ken Maus, the minutes were approved as written. . 3. CONSIDERATION TO HEAR IDC FINANCIAL REPORT. Treasurer Ron Hoglund re County State Bank of $1, balance in Security Fina of $5,949.40. Dave Pete financial report as give the report was accepted 4. PROSPECTS: Jeff Eastey hasn't secur The company third quarte loan request Yeager, Pine received fro the completi for an indus orted current balances in Wright 57.86 and $48.65, and a current cing of $4.042.89. Total balance son made a motion to accept the , seconded by Tom Pogatchnik, nd filed. nterprises, Inc. - the company d the necessary SBA Bank Financing. s in process of preparing their financia1s for re-eva1ution of and Mundale - No response has been this consulting firm who requested n of an eight page questionaire rial prospect. 1.2 million sq ft Distribution Center - In late Septem er, John McVay submitted the City of Monticel 0 as a possible site location for . . IDC Minutes 10/18/90 Page 2 4. CONTINUED. . . this large dis ribution center. The out of state company s working through NSP and the Department of rade and Economic Development for site se1ec ions. With the one day notice to respond to the company's questions, the city FAXED marketing information and maps. A detailed response was given to the company officials upon their visit to Monticello. Two represenatives from Arkansas, Terrell Towers of MN TED, and staff toured Montic 110 and the two designed sites. The represent tives became interested in a third site during t e tour. The company needs are for an approximat 150 acres with direct access to a major highw y, will employ 500+, and daily truck traffic of about 800. The sites earmarked by staff, abu ted the city limits which should encourage an asier annexation process and would provide easy access t city services. The sites were 160 acres of K1in property to the south of the existing industrial pa k and 150 acres of Wolters, Hoglund, and city prop rty to the west of South Highway 25. Third site wa the Kjellberg property to the south of the east tailer park on South Highway 25. Mayor Maus re uested vertification of truck traffic numbers to assist in valuation of the increased traffic and the impact on the community. The represent tives visited the communities of Faribau1t, Owatonna, La evi11e, Monticello, Paynesvi11e, Sauk Rapids, Anok , Brooklyn Park, and Woodbury. Time frame: Decision in March '91, construction beginning in Fa11'91, and shipping operational in February '93. 15,000-20,00 manufacturer is looking f and expansio employ 50 wi 50,000 sq ft Prefer a lea company with will continu 8,000 sq ft is looking f circuit boar would provid have been ma available sp sq ft 1easeab1e facility - the of potato planters and harvestors r 1easeab1e space for a relocation The established company would h future expansion of up to 40,000- and potential of 100 employees. e with option to purchase. The a soon as possible time frame to look elsewhere. easeab1e facility - Mr. Leo Adams r 1easeab1e space to produce multi s. The company is a start-up and 15 high tech jobs. Arrangements e to view the M&P Transports, Inc. ceo . IDC Minutes 10/18/90 Page 3 4. CONTINUED. 30,000 sq ft 1 direct contact has inquired 0 process produc of their stati response has b 5. CONSIDERATION TO FINALIZE aseable facility - Unable to make with Mr. George Briscoe, Koropchak the service company for food s and pharmaceutical products for relocation by mail. No en received from Mr. Briscoe. IDC BAN UET. Koropchak reported all was in order for the banquet and encouraged members to sell their tick ts. Guest speaker to be Dr. George Karvel, and local testimonies from Tapper's Inc., Remmele Engineering, and Bondhus Corporation. on Hoglund, Dale Lungwitz, and Harvey Kendall volunteered to ser e as greeters. Koropchak is to order name tags for Tom pogatchnik, Dave Peterson, Tom McDermott, John McVay, Ken Maus, and Jay Morrell. Koropchak will call IDe members on Thursday, ctober 25, for number of tickets sold. 6. CONSIDERATION OF FOLLOW-U ON THE POTENTIAL LEASEABLE BUILDING PREPLANS. . Koropchak reported that s to Shingobee and followin herself would tour the in familiarity. The IDC mem preplans be opened to oth the need for HRA concept to preparation of any for 7. CONSIDERATION OF INFORMAT a) Star City Awards: Ko didn't receive an awa Cities selected were Windom, and Plainsvie share first place for The award was shared Honorable mentions we and Fairbault County. and Windom. te location maps had been mailed the IDC meeting Gae Veit and ustrial sites for on-site ers recommended leaseable building r contractors. Koropchak expressed pproval of the use of TIF prior al agreements. ONAL ITEMS: opchak reported that Monticello d as one of the All-Star Cities. hamplin, Two Harbors, Hallock, However, Monticello did its overall marketing program. ith Litchfield and New Brighton. t to Burnsville, Northfield, Fairmont, Video awards went to Lakeville b) GMEF Approval for The tre Expansion: City Council did approve the $50,000 G EF loan for the theatre expansion and also requested the EDA adjust the GMEF Guidelines in the area of what constitutes a full time versus part time job, main thrust of loan for industrial use only, and how the pr ject is tied to blight or under- utilized property. on Smith suggested the original IDC members on the c mmittee be invited to the EDA meeting when the gui elines are adjusted. These are Linda Mielke, Da e Lungwitz, Don Smith, Jeff O'Neill and Koropcha The EDA meeting is scheduled for October 30, 1990 at 7:00 AM. . IDC Minutes 10/18/90 Page 4 . 7. CONTINUED. c) BRE Survey and Visits - that it was time for th is one of the requireme previously, a member or Koropchak on the visit. in late November and ea recommended Koropchak m companies to members in of visit. Members choi meeting. The accompany the effectiveness of th d) Tire Service Equipment for the IDC to tour the facility the first of N be mailed IDC of confi an employment of six. e) PUC Order for Cost Stu ordered Bridge Water T companies serving the cost studies and propo 60 days. Within 45 da report and recommendat 20 days of the PUC rep companies) may file co the soonest the EAS co middle of February. B . oropchak informed IDC members annual industrial visits which ts for Star City Recertification. two of the IDC has accompanied Plans are to visit the companies 1y December. The committee il a list of Monticello industrial rder to prepare for their choice e to be determined at next IDC ng of an IDC member enhances visitation. e1come - Tentative plans are Tire Service Equipment Manufacturing vember, however, a letter will ed date. Currently they have y _ On October 1, 1990, the PUC 1ephone Company and other telephone xisting metro calling area to file ed rates for the proposed EAS within s of the filing the PUC makes a on of costs and rates. Within rt the interested parties (Telephone ents. Which in summary means t would be available is the 110ts would be mailed thereafter. f) REA Loan Criteria - EA loan may be applied for through Bridge Water Telephone Company. n maximum is $100,000, interest free, fo fixed assets. Paul Steinman of BOg Lake, said the application for Cargill's F ed Mill will probably not meet requirements a it's for distressed areas and the money i not received for approximately one year. 8. OTHER BUSINESS. Koropchak reported that i Bank, he explained the co owned Boyle Property. 1) To sell entire 401 2) Upon the company's three interested P middle school fo PUD.' , Boyle's asking price was 4 . talking with John Meyer, Farm Credit pany's objective for the previously acres to one party. 1.9 million dollars decision for needed revenue, they have rties for 40 acres, 109 acres to the south residential development, and 105 for of the million dollars. . IDC Minutes 10/18/90 Page 5 8. CONTINUED. Koropchak further reported th Peach. he told of FSI's expa reduction in employment for S approximately 25-30% (110 job affect Big Lake employment. years, he anticipates the com Minnesota because of the Minn anticipated to Arizonia. 9. ADJOURNMENT. t in talking with Mr. Jack sion to Mexico and the planned . Cloud and Monticello of ). This is not expected to ithin the next two and one-half any to be moved from the State of . sota business climate. Move Dale Lungwitz made a motion to adjourn the IDC meeting, seconded by Tom Pogatchnik, the IDe mee ing adjourned at 8:45 AM. c~oo. ~- ~OI o~Q..<i.- ) Ollie Koropchak IDC Executive Secretary . . ~~cl c...- j.\~. ~ tl. \..a . . . IJfI Mil November 5, 1990 Ollie Koropchak IDC Executive Secretary City of Monticello 250 East Broadway P.O. Box 1147 Monticello, MN 55362 Dear Ollie, Northern States Power Company Northwest Region 3515 3rd Street North Po. Box 808 Saint Cloud, Minnesota 56302-0808 Telephone (612) 255-8600 Congratulations on arranging a fine b nquet and program. All of us from NSP really enjoyed the opportunity to get together with all of you. You have had very good results durin 1990. This is a tribute to your motivated and professional IDC. Keep up the good work. si~rs, Harold Wick General Manager Northwest Region ~~ e..-; -:\:"\ '2rY' . . . -- ~0.-~ 1990 IDC BANQUET TICKETS SOLD AND USED $5,300 TOTAL REVENUE $6,500 TO BE BILLED: The H-Window Sunny Fresh ..-..Bondhus Corpo _ Bridge Water _Kent Kjellber Hospital Dist Reimbuse 1989 Monte Club Bill $1,334.08 73 served NO GRATUITY TICKET DONATIONS $1,200 ompany $ 75.00 150.00 75.00 50.00 25.00 50.00 ation elephone (paid for one) (no spouse) (only paid $50) (no spouse) y Kendall 25.00 (paid spouse n/s) 1990 Monte Club Bill $1,935.64 101 served NO GRATUITY Gartner's Office Product Wood type Minnesota Monticello Printing Little Mountain (balloons and 1 boutonniere) $42.48 52.00 \.\b. \ '")... ? . !Tile Monte Club A Complete E tertainment Facility Route 2, Box 72 l\'~('ntieello; M 55362 STATEMENT N U M B E R 153639 DATE /0 {;J9 fO aunurJER dtUt0- ~ ~t{(116 ~1f:PO ilL. '/),()ft4?ft~uI- t# A1 ('1fe~ 'ZJ (jtilt. Kit20pct AMOUNT ENCLOSED $ PLEA E DETACH AND RETURN UPPER PORTION WITH YOUR REMITTANCE. TO . ORIGINAL WllsonJones . c.....,... MADE IN U,$,A. . 44N-SIO o Wil50nJOr'\&!l, 1989 . ,_,.r- MOlzte Ctub A Complete Entertainment Facm y Route 2 BOlt, 172 M@R"~@H9: MM 55362 \1~0'?7 rrt)V UJ.jOj;j . ate ./C/ -.;x;.- ~_ . . WlIsonJones Carbonles. 89 . -- ~-~ . . , :1:\ ~ \N' t\J 0 ~ '\\ lJ -\ Dear Mr. Schultz: The Monticello Industrial Dev about the lack of available i Monticello. This concern may however, the reverse affect i interested industrial busines expand. Although, we can not businesses would have located guarantee our existing indust occupied in the future. The approach to research a plan t The plan is not to construct approved and ready for constr could offer a new leaseable f three months (construction ti business prospect. The plan under research is to building plans pre-approved b Building plans would have int meet the Minnesota Statutory of a Tax Increment Finance Ec would be assisted through a T would be a direct reduction 0 Although the plan is in its i plan hasn't been reviewed or Redevelopment Authority or th a Preformance Agreement would HRA and the developer prior t party. 3) Plans reviewed Responsibilities of the Devel . ~ Q..;~ 0.-. ~ ~ lopment Committee has concerns dustrial space for lease in be a relief for some communities. that Monticello turns away es looking to relocate and guarantee any of those in Monticello nor can we ial facilities wi~l remain DC has implemented a positive resolve their concern. facility but to have pre-plans ction, in other words, Monticello cility within approximately e) to an interested industrial optional square footage City Building Inspector. rior flexibility and would equirements for establishment nomic District. A developer F Pay-As-You-Go Plan which rent costs. fancy stage and the TIF concept ccepted by the Housing and City Council. we anticipate be entered into between the any expenditures by either may be to: 1) Draft three building pans for a 15.000. 20.000. and 25.000 square foot manufactur"ng/office facility. 2) Draft site plans inclu ing parking, landscaping. drainage. and elevation. etc. oved by the City Building Inspector. 4) Obtain a land purchase option or committment letter from the land owner for the designated industrial site location. 5) Facility to be of conc ete. ~f a ten year ease with option to purchase. . Mr. Sch~Z Page 2 7) Credit-worthy industrial business expanion which will create new jobs. 8) Must be willing to ent a Development Contract. 9) Project must meet City and Building Amendments. And the HRA's responsibi1itie may be to: 1) Authorize Business Dev lopment Services, Inc. to prepare a TIF Plan for the est blishment of an Economic District. 2) BDS, Inc. will distrib te TIF Plan to all necessary taxing jurisdictions f r thirty day notice to comment. 3) HRA will approve TIF Pan. 4) TIF Plan will be a Pay As-You-Go Assistance with a reduction in rent cost 5) Authorize of a Development Contract. . The Preformance Agreement wo ld consist of an agreed upon expiration date. Based on the IDC's plan, wou1 like to be considered as the you have any questions, pleas 333-5739. Please consider th appreciate a response. the Winkelman Building Corporation eve10per for such a project? If call me at (612) 295-2711 or METRO s project as the IDe would Duane, I look forward to hearing from you. Sincerely, CITY OF MONTICELLO Ollie Koropchak Economic Development Directo . ~c1o. ~J~ ~~. ~ 11/81/98 10: 5'3 5127:359834 BUSIHE'3S DEVEUJPMEHT SER\lICES PAGE 01 -IDS Business Development Services, Inc. MEMO TO: Ollie Koropchak, city f Monticello FROM: DATE: -RE: Patr,ick 'Pel string, . Pr November 1, 1990 TIF/SPEC BUILDING . , I have had an opportunity tore isw the letter, to Hr. ' Schultz at Winkelman corporation as, you req _ I wanted to respond to the issues you ident if i ed . -, - OVERALL STROCTURE This, letter is consistent with 0 r previous discussion, in terms of recruiting a developer to canst ucta specu::Lative building- in the Monticello Industrial. Park. A W$ discussed, you have suggested that all the prep w.ork in terms of building design, architectural 'and,t.he. development of the TIt' Ian w:ouldbe completed to serve as an a~tractive' marketing approac to recruit ,new indus,try. ,Th~s' approach is consistent wit our discussions ,to assure that the sufficient flexibility is left in the ou.ilding design to suit the pr1=Jspect's,need5l. The major ad antage of this approach is that it willacce,lerate ~he project t meframe fora' new prospect by at lQ8st.'60 - 90 days. ' . -The use Of Tax .Increment Fi anc.ing 'will 'be' t'ied . to',. the land acquisitio.n and site developm nt costs, ,of the' developer. The ,- diave,lopment incentive, however will be in tl).e 'form 'of a ,lIlease" wri-t!!S down .forthe ,benefitting industry. These two oriteria are . !"ritioal to justify the use ot. .the Tax Increment Financing. . . . 11/01/90 10: 5'3 512785'3034 BUS I HESS DE\/EUJPr'/lEHT SERV ICE'; F'Ar3E 02 TIP/Spec Building Proposal November 1, 1990 Page 2 IIF ISSUES The most important aspect for t e use of Tax Increment Financing for this project will be to e tablish the "incentive" for the ultimate occupant of the buildi 9. We must be very careful to assure that the use of Tax Incr ment Financing does not increase the developer's return. Instead the city's participation must be structured only to provide mark ing/recruitment assistance. Overall, let me review the key IF issues: 1) be structured as pay as you go er. ~s a result, this would or specific letters of credit or 2) The City'S commitment waul assistance to the develo reduce/eliminate the need developer guarantees. A mechanism must be devel ped to assure that the City can verify the lease right down on a dOllar-for-dollar basis with the pay as you go assistan e. 3) Appropriate assurances mus be obtained from the developer on the intended and ultimate anufacturing/warehouse use of the facility. This will assur strict conformance with existing Tax Increment Financing s atutes. I am assuming that this project will qualify only a an Economic Develop.ent District. 4) Overall assistance must be ied to actual land acquisition and site development costs. W can utilize a "net" present value approach to capitalize the e costs. 5) I would expect that we ould develop an addendum to the Development Agreement to be executed by the occupant acknowledging the city's a sistance and verifying the project representations. 6) The use of an Assessment developer. At a minimwn, the anticipated valuation greement would be optional by the e should reach an understanding of i th the County. I would expect that the ulti te Development Agreement would be "pre-negotiated" with the deve oper but not approved or executed until the occupying business i identified. This will serve the integrity of the project fra the HRA's perspective and will provide the opportunity to con ct the necessary verifications. . . , E/01/'30 10: 5'3 51278E,'3034 BUSltIES:3 DE\iELOPlv1E1'H '3ERVICES PAGE 03 TIF/Spec Building Proposal November 1, 1990 page 3 DEVELOPMENT ISSUES This approach to the development project is being considered at a vary opportune time. Oavelopmen activity in the Twin cities has slowed considerably, and as result, you should expect a substantial amount of interest f om area developers. As such, you may wish to enhance the projec from the city's perspective by asking for an initial commitme t fee from the developer (i. e, $5,000 _ $10,000). This will as; ure that the city's cost for the project would be reimbursed if e developer fails to perform. It would De important to solicit multiple bids for the project and negotiate a not to exceed constr ction cost and lease rate with the developer. In the current mark t, you should expect variances in construction costs and seek to egotiate the lowest cost for the benefitting business. Finally, the development P oposal should require direct partioipation by the developer n marketing the project. I would antioipate that the City would t ke the lead but the participation by the developer should increas the likelihood for the project's succeSs. criteria for the selection of t e developer should include: 1) competency/experience. 0 monstrated, successful history of the development of similar size projects. 2) Clear identification of p oject manager and review personal background. 3) Design criteria. I would ecommend that the proposed project design should :be somewhat enhanced to encourage additional quality growth within the industrial park. 4) Cost competitiveness. Th developer should commit to not to exceed construction costs and lease rates. 5) Developer participation - project marketing. The IDC should review and determine th commitment ont he part of the developer to actively pa ticipate in the marketing of the projeot and the City of M nticello. .,... .., ...~.__ _~..-...-.-.--..-r_ 11/01/'30 18: 5'3 512786'3034 . . . TIP/Spec Building proposal November 1, 1990 paqe 4 SUMMARY BUS I t-1E5:3 DEI./ELOPMEHT SER\I ICES PAGE 04 I trust that this response to the issues raised in your fax of this past Monday. I would be happy to meet wi th you or the IDe to review these issues in greater d tail. PWP/ld .q,.'~ .. M ~~lJ- . . Monticello Industrial Developm nt Committee 250 East Bro dway ~ ~ N\J' ~ Monticello, Minnes ta 55362 Phone (612) 2 5-2711 '. Dear IDC Member: smn;r ilII . . , FaR . Eealalle C aEYUa'IEIT First, thanks for your par icipation in the 1990 IDC Banquet. Secondly, the next schedu1 November 15, 1990. Enclos industries for Business Re ation. It is my intent to last week in November and please review and designat preference at the IDC meet And finally, Mr. Ray Schmi the welcome reception and Equipment Manufacturing Co 1990 at 3:30 P.M. The corn Road. d IDC meeting is Thursday, d is a list of the Monticello ention and Expansion Visit- conduct those visits the irst week in December. your industrial visitation ng. t and myself have scheduled our of The Tire Service pany for Thursday, November 15, any is located at 201 Chelsea Please call if you have qu stions or comments. Sincerely, ~ Ollie Koropchak Economic Development Dire tor .. ~ v.r- l ...ry '{'t'\ t, trr-" ~ 0 . "'\ ts"l-' ..q ~ ~~'-~ EMPLOYERS ~ '(1\~ - NSP Nuclear Q CJ"" ~ - Sunny Fresh ~ \.\.G-p Fulfillment - Fingerhut Co ~(1..~- Bondhus Corp ( ONTICELLO INDUSTRIES lant Inc. ~ t'\.a--1 ystems, Inc. poration ration . ) EMPLOYEES 271 144 120 85 75 c. 6ifIr ~~-' ABK, Inc. M & P Transp rts, Inc. -'\ llT<"' ""eo ~. - NSP Training Center ~~ ~~ Electro Industries ~ ~ - The H-Windo Company ~ ~~- Jones Manuf cturing ~ s.~- Automatic G rage Door company NSP Service Center \-\-~ ~~ Rainbow Ent rprises, Inc. The Tire Se vice Manufacturing Co. ~ 44 42 40 38 26 25 16 11 10 10* . Clow Stampi 8 SMA E1evato construction Company 8 ~ ~ WEB Precisi n Machining, Inc. 6 *Projected . -,~,~..