EDA Minutes 07-10-2019MINUTES
REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, July 10th, 2019 — 6:00 p.m.
Mississippi Room, Monticello Community Center
Commissioners Present: Steve Johnson, Bill Tapper, Jon Morphew, Tracy Hinz, 011ie
Koropchak-White, Lloyd Hilgart, and Jim Davidson
Staff Present: Jim Thares and Angela Schumann
1. Call to Order
Steve Johnson called the regular meeting of the EDA to order at 6:00 p.m.
2. Roll Call
3. Consideration of additional agenda items
None.
4. Consent Agenda
BILL TAPPER MOVED TO APPROVE THE CONSENT AGENDA. LLOYD
HILGART SECONDED THE MOTION. MOTION CARRIED, 7-0.
a. Consideration of approving Regular Meeting Minutes — June 12, 2019
Recommendation: Approve the Regular Meeting Minutes — June 12, 2019.
b. Consideration of allowing Public Works Department temporary use of EDA
Property located at 112 West River Street for storage of equipment
Recommendation: Authorize staff to prepare a MOA outlining terms and
conditions of the Parks Department's temporary usage of EDA owned property
located at 112 West River Street.
Bill Tapper confirmed that the EDA would not incur any legal expenses. Thares
confirmed.
c. Consideration of Block 52 WSRR Survev Ouotes; Authorization to enter into
a Professional Services Contract with Anderson Engineering in the amount
of $4,920.00
Recommendation: Authorize the lowest qualified quote (Anderson Engineering of
Minnesota, LLC ($4,920) for WSRR surveying services for Block 52.
d. Consideration of approving payment of bills
Recommendation: Approve payment of bills through June, 2019.
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Regular Agenda
5. Consideration of Presentation of Co -Work Space Concept - Crystal Nutt
Jim Thares introduced the item and explained that Monticello resident, Crystal Nutt, is
interested in starting up a co -work space.
Crystal Nutt explained that the idea of a co -work space had begun in the winter. Nutt has
located a fellowship program through the Initiative Foundation. The main focus of the
fellowship is for social enterprise which fits well with the co -work concept. She noted
that the fellowship would support the research stage of the project. Nutt stated that she
was hoping for feedback from the EDA on whether they were interested in this concept.
Lloyd Hilgart asked if the co -work space would be privately or public owned. Nutt
explained that she would help facilitate the process, but did not want to own the space.
She noted that other communities such as Willmar and Bemidji have launched their own
co -work space successfully. Nutt added that she has seen the spaces owned privately, by
the City, or by business investors.
Steve Johnson asked if Nutt had calculated the need for a space in Monticello or if it was
all speculation. Nutt stated it was speculative, but based on her experience and
colleagues, coupled with a national trend. Johnson asked if Nutt has looked more into a
space that would work for the concept. Nutt explained the fellowship would allow her to
further research available sites, but she was interested in locating in downtown.
Johnson asked how the project would be funded. Nutt explained that the Bemidji project
received DEED funding and likely receives on-going funding.
The EDA was supportive of the concept.
6. Consideration of Preview of GMEF Loan Application, Ausco Design (Jason Kisner)
Jim Thares introduced the item and noted that the EDA received a GMEF loan request
from Ausco Design in the amount of $75,000.
Jason Kisner introduced himself. He explained that he started his business out of his
home in Monticello. Since then, his business has been growing. They moved to a site on
Chelsea Road in 2018 but have now out -grown that too. Kisner is seeking gap financing
from the EDA to support the purchase of an 11,000 square foot building located at 218 W
3rd Street.
Jim Davidson asked how many full-time employees are at the business. Kisner indicated
that there are 4 full time employees. He explained that his business does embroidery,
screen printing, and graphic design. Kisner stated that they are need to hire two more
employees.
Jim Thares indicated that the EDA guidelines require that the applicant provide 5-10%
owner equity to the project. It was not indicated that the applicant would provide any
equity. Tracy Hinz indicated that there was another EDA loan program that may be a
better fit. Kisner stated the reason why they couldn't put the 5% down. He noted that he
has paid for most of his start up fees with cash.
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It was noted that the 5% is on the total cost of the project. Thares estimated it to be at
$34,000.
Thares provided the options the EDA could take. If the EDA decided to award Ausco
Design the loan, they could proceed with the normal application process.
Bill Tapper asked if the SBA loan had been approved. Kisner responded that he was
working with the lender on Thursday (7-11-2019).
Steve Johnson was interested in seeing additional underwriting documentation to better
understand cash flow.
Jon Morphew asked what other collateral would mean. Thares indicated that could
include things like a second real estate mortgage on other property such as a home or un-
encumbered equipment.
Thares indicated that the request would have to come back to the EDA, but that he was
seeking input since there would be no equity. Johnson asked that the applicant find some
creative ways for equity. Hinz suggested looking into the equipment loan program.
TRACY HINZ MOVED TO AUTHORIZE PREPARATION OF A GMEF LOAN
AGREEMENT AS WELL AS FURTHER EXPLORATION OF THE SCDP LOAN
PROGRAM AND RELATED DOCUMENTS BETWEEN THE EDA AND AUSCO
DESIGN FOR CONSIDERATION AT THE AUGUST 2019 EDA MEETING. JON
MORPHEW SECONDED THE MOTION. MOTION CARRIED, 7-0.
7. Consideration of Preliminary Development Agreement with Beard Group, Inc. for
prospective Block 52 Redevelopment Project
Steve Johnson gave the gavel to Bill Tapper.
Jim Thares introduced the item and noted that this was the first step in the development
agreement phase. He explained that the Beard Group supplied a $5,000 escrow to the
city.
Angela Schumann brought attention to the first "whereas" and Exhibit A in the
predevelopment agreement. It noted the development area all of Block 52. Schumann
explained that the EDA could negotiate with the remaining property owners on the block,
but it was noted that if the property owner isn't willing to sell, the developer could revise
their plans.
An error was noted in the staff report regarding the escrow. Thares confirmed it was in
the amount of $5,000.
Tracy Hinz asked if there was an expiration to the agreement. Thares indicated it was
March 31, 2020.
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JIM DAVIDSON MOVED TO ADOPT RESOLUTION #2019-05 APPROVING A PDA
BETWEEN BEARD GROUP, INC. OR ITS ASSIGNS AND THE EDA IN
CONNECTION WITH THE POTENTIAL MIXED-USE REDEVELOPMENT IN
BLOCK 52. OLLIE KOROPCHAK-WHITE SECONDED THE MOTION. MOTION
CARRIED, 7-0.
The gavel was returned to Steve Johnson.
8. Consideration of proposed 2020 EDA Marketing Budget
Jim Thares introduced the item. He noted that the proposed 2020 budget for marketing is
$24,400.
Steve Johnson questioned the Times Partnership Piece. Staff would check if this cost was
for a digital and print version. Staff would evaluate the estimated amount of staff time for
this item.
Tracy Hinz asked if the marketing pieces would come back to the EDA for final
approval. Thares confirmed. Bill Tapper questioned the Direct Mail or Media -Ad Buys.
BILL TAPPER MOVED TO ADOPT PROPOSED 2020 MARKETING PLAN AND
BUDGET. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED, 7-0.
9. Consideration of 2020 Target HRA Property Tax Lew
Jim Thares indicated that the EDA met previously to discuss the 2020 target HRA levy. It
was noted that the County is working on providing a taxable market value in the next 30
days. Monticello's present market value is estimated at $1.923 billion, The allowable
levy by statue is $355,000. Staff recommended that the EDA set the maximum amount by
state. Thares explained that the EDA was a recommending body to the City Council for
the HRA levy.
LLOYD HILGART MOVED TO SET THE LEVY AT THE MAXIMUM LEVY PER
STATE STATUTE. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED,
7-0.
10. Director's Report
Jim Thares indicated that two meetings would need to occur in the coming weeks. One
would be a closed meeting to discuss negotiations for a prospect. Thares also asked the
EDA for their interest in holding two monthly meetings due to the increase activity level
and desire to respond to proposal request in a more -timely manner.
Thares also reviewed the prospect list. Thares indicated that he highlighted prospects are
making steps for final site selection subject final EDA approval.
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11. Adjourn
BILL TAPPER MOVED TO ADJOURN THE MEETING AT 7:18 P.M. TRACY HINZ
SECONDED THE MOTION. MOTION CARRIED, 7-0.
Recorder: Jacob Thunander
Approved: August 14, 2019
Attest:
Economic Development Director
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