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EDA Minutes 02-12-2020MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, February 12th, 2020 — 6:00 p.m. Mississippi Room, Monticello Community Center Commissioners Present: Steve Johnson, Bill Tapper, Jon Morphew, Tracy Hinz, 011ie Koropchak-White, and Jim Davidson Commissioners Absent: Lloyd Hilgart Staff Present: Jim Thares, Angela Schumann, and Sarah Rathlisberger 1. Call to Order Steve Johnson called the Regular Meeting of the EDA to order at 6:00 P.M. 2. Roll Call 3. Annual Business Meeting a. Consideration to elect EDA Officers BILL TAPPER MOVED TO ELECT 2020 OFFICERS — STEVE JOHNSON AS PRESIDENT. TRACY HINZ SECONDED THE MOTION. OLLIE KOROPCHAK-WHITE MOVED TO ELECT 2020 OFFICERS — BILL TAPPER AS VICE PRESIDENT. JIM DAVIDSON SECONDED THE MOTION. BILL TAPPER MOVED TO ELECT 2020 OFFICERS — JON MORPHEW AS TREASURER. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 6-0. b. Consideration to review EDA Bylaws No changes were made to the EDA Bylaws. c. Consideration to review EDA Enabling Resolution No changes were made to the EDA Enabling Resolution. d. Consideration of EDA Financial Statements and Fund Balance information Sarah Rathlisberger reviewed the EDA Financial Statements and Fund Balances. She noted that the 2019 statements are not final and could change for any payables or receivables not coded to the EDA yet. She reviewed each of the fund balances including the general fund, GMEF, TIF Districts, GAAP Reconciliations, and SCDP. 4. Consideration of additional agenda items Steve Johnson requested adding a discussion item regarding an updated Hospitality Study recommended by the IEDC for the EDA consideration. Economic Development Authority Minutes — February 12th, 2020 Page 1 1 7 5. Consent Agenda BILL TAPPER MOVED TO APPROVE THE CONSENT AGENDA. JON MORPHEW SECONDED THE MOTION. MOTION CARRIED, 6-0. a. Consideration of approving Regular Meeting Minutes — January 8th, 2020 Recommendation: Approve Regular Meeting Minutes — January 8th, 2020. b. Consideration of approving Special Workshop Meeting Minutes — January 8th, 2020 Recommendation: Approve Special Workshop Meeting Minutes — January 8th, 2020. c. Consideration of approving Regular Meeting Minutes — January 221 2020 Recommendation: Approve Regular Meeting Minutes — January 22nd, 2020. d. Consideration of approving Special Meeting Minutes — May 29, 2019 Recommendation: Approve Special Meeting Minutes — May 291h, 2019. e. Consideration of amending language in GMEF Loan Application Recommendation: Approve the proposed amendment to the GMEF Application as indicated in attached Business Subsidy Application. L Consideration of approving payment of bills Recommendation: Approve payment of bills through January, 2020. Regular Agenda 6. PUBLIC HEARING — Land Sale Public Hearing - UMC Expansion Proiect — Proposed sale of EDA property described as Lot 2, Block 1, Monticello Commerce Center, Sixth Addition, Wright County, MN (7.39 -acres) [PID #1551430010201 to UMC for the sole purpose of pursuing a 52,000 square foot expansion project Jim Thares introduced the item and explained the item would be considered to help pursue a 52,000 square foot expansion project at Ultra Machining Company. Thares noted the EDA is being asked to delay action on the UMC items until the February 261h, 2020 Regular EDA meeting to allow UMC to complete its review of various documents. Thares explained that the staff reports for the Purchase and Development Contract and the TIF 1-41 District approval are completed as it was expected that these two items would be considered at this meeting and as such have been attached to this staff report as exhibits. Thares recommended opening the public hearing, but continuing it until the February 26h,2020 EDA meeting. Steve Johnson opened up the public hearing and invited the UMC representative to discuss the project. Tim Dolan, Decklan Group, introduced himself as the representative for UMC. He noted that everything was progressing nicely and they are working with the State and City to line up the remaining items. He noted that the Planning Commission recently recommended to City Council their Planned Unit Development Land Use application. He noted that the extension of the public hearing was necessary due to UMC's lawyers merging with another company. Economic Development Authority Minutes — February 12th, 2020 Page 2 17 Bill Tapper asked why the $40,000 due on February 15th, 2020 in earnest money had not been paid by UMC yet. The earnest money would secure the current rate of the land. Dolan noted that the earnest money was an advance from the City to the landowner. No contract between the City and UMC has been executed as of this date. Tapper requested assurance from UMC that the project would continue to move forward and that the EDA would not lose it's $40,000 already paid to the landowner. Tapper requested a letter stating if the project was cancelled after February 14th, 2020, and prior to UMC entering into the Purchase and Development Agreement with the EDA, that UMC would reimburse the City the costs. Dolan stated that he would present this to UMC for consideration. Thares provided an additional handout to the EDA that should offer a higher level of comfort that the project was moving forward. He informed the EDA that the State (MN - DEED) would not have provided the MIF and JCF award letters to the City without having the financing questions, including equity sources, answered. JIM DAVIDSON MOVED TO CONTINUE THE PUBLIC HEARING TO THE FEBRUARY 26TH, 2020 REGULAR EDA MEETING. OLLIE KOROPCHAK-WHITE SECONDED THE MOTION. MOTION CARRIED, 6-0. 7. PUBLIC HEARING — Business Subsidy Public Hearing — UMC Expansion Project - Proposed Tax Increment Financing (TIF) Land Value Write Down in the amount of $731,000 for development property, EDA advance funding in the amount of $300,000, Minnesota Investment Fund (MIF) Forgivable Loan in the amount of $300,000 and Job Creation Fund (JCF) Grant in the amount of $175,000 to UMC for the sole purpose of pursuing a 52,000 square foot expansion project. Steve Johnson introduced the item and asked Tim Dolan if he had any further comments. Jim Thares reiterated the four business subsidies that are components of the UMC expansion project's financing structure. He again noted that the staff report for this item were completed and attached to this staff report as exhibit and that the public hearing should be continued to the February 26th EDA meeting. Johnson asked for clarification about whether the DEED approved forgivable loan (MIF) only needed execution of a formal contract. Dolan confirmed and further noted that MIF was a two-year job creation figure commitment while the JCF Grant program extends the job creation time period by one more year and counts jobs that are created in the third year after completion of the building (the benefit date). Johnson recognized staff and UMC for their achievements on the project. BILL TAPPER MOVED TO CONTINUE THE PUBLIC HEARING TO THE FEBRUARY 26TH, 2020 REGULAR EDA MEETING. TRACY HINZ SECONDED Economic Development Authority Minutes — February 12th, 2020 Page 3 17 THE MOTION. MOTION CARRIED, 6-0. 8. Consideration of Co -Work Concept Project Update — Crystal Nutt, Crystal Nutt Consulting Jim Thares introduced the topic and explained that Crystal Nutt would be providing an update regarding the co -work space initiative. Thares stated that a monthly committee has been meeting for the past 9 to 10 months. He reminded the EDA that Nutt spoke at a previous EDA meeting about a fellowship grant to further explore the concept of a co -work space. The funding was unsuccessful, but the group has continued meeting. In early January, they took a tour of Cooper Collective in St. Cloud. Thares then invited Nutt to the podium. Nutt explained that there remains a high interest in having a co -working space in Monticello. She also said that the owners of Cooper Collective are interested in bringing the concept to Monticello. Local committee members and the Cooper Collective owners will be involved in tours of several possible building locations; already scheduled for Thursday, February 13, 2020. Nutt reviewed a plan summary and noted that the information was big picture, tentative, and the figures were ballpark and could change. It is the group's intent to have a co -working space by 2022. She explained some of the first steps include hosting a public event that gauges the interest of the concept. Next, the committee would like attend a co -working conference in Willmar, where they would learn additional best practices and develop a 12 to 36 -month business plan. The conference would help to understand the role of a private -public partnership. Bill Tapper asked what the size of the space would be. Nutt responded that they are looking for a space about 4,000 to 6,500 square feet. There could be an estimated 30 to 50 members. Jim Davidson requested more information on the commitment and assistance needed for the project to be successful. Steve Johnson explained there are market studies completed and that she should work with staff on demographic information of the area. He also encouraged the importance of completing pro -forma reports. Davidson asked for information about ownership. Nutt responded that it was not clear at this point. Johnson reminded Nutt of the City's business subsidy programs. Jon Morphew echoed concerns of the City or EDA owning or leading the initiative. Nutt focused on creating an understanding of the public-private partnership and to continue watching what other communities are doing for co -working. Nutt also explained the support they have received from City Staff and community members. Economic Development Authority Minutes — February 12th, 2020 Page 4 17 Tapper reminded the EDA that business subsidy can only be applied if jobs are created. Nutt explained that some jobs could be generated, and others would support existing jobs. Johnson reminded Nutt that the Wright County Economic Development Partnership may be a good opportunity to connect with. Nutt stated that she will continue discussions with that organization as well. Angela Schumann explained the importance of keeping the door open on the concept. Thares echoed Schumann and noted that technology is changing in the workforce and replacing people. Thares indicated that there have been initial discussions with State officials regarding the possibility of removing the job creation requirements from certain funding programs for purposes of business subsidy agreements. Tracy Hinz stated that she was open to the ideas and that the EDA needed to remain open to new partnerships. The EDA thanked Nutt for her time tonight and that they looked forward to receiving more updates on the concept. 9. Consideration of Industrial Land Absorption and Demand Study — Jim Gromberg, WSB & Associates, Inc. Jim Thares introduced the item and noted that early last year, WSB was tasked to complete an Industrial Land Absorption and Demand Study as part of their contracted services. Thares indicated that the draft report was completed subject to several edits. Thares encouraged the EDA to provide comments and any revisions to the report. Thares invited Jim Gromberg, WSB, to review the draft study with the EDA. Gromberg explained the background and contents of the Industrial Land Absorption and Demand Study. He noted it focused on selecting two sites for the next industrial park. Angela Schumann stated that in her view the report required a finer grain research on the potential sites. City Staff would accept comments and edits by the EDA before the second draft was proposed. Comments would be due on February 21 st, 2020 by noon for inclusion in the packet for the Regular Meeting on February 26th, 2020. WSB would have an updated document ready for the EDA by that meeting. BILL TAPPER MOVED TO TABLE ADOPTION OF THE INDUSTRIAL LAND ABSORPTION AND DEMAND STUDY FOR FURTHER RESEARCH AND/OR DISCUSSION. OLLIE KOROPCHAK-WHITE SECONDED THE MOTION. MOTION CARRIED, 6-0. 10. Consideration of proposed 2020 WSB Economic Development Assistance Contract — Jim Grombers!, WSB & Associates, Inc. Jim Thares explained that per the workshop sessions in January, he has revised the Economic Development Assistance Contract with WSB. Thares invited Jim Gromberg to Economic Development Authority Minutes — February 12th, 2020 Page 5 17 the podium. Jim Gromberg explained that 2019 was a very busy year for the Economic Development Department. He noted that Otter Creek Business Park is full if the Prospect List is successful. He also explained the UMC expansion project and the completion of the Industrial Land Study as successes. Gromberg noted with conversations with Thares, they felt it would be of benefit to include site design and illustrations for prospective businesses. They also added a component that would help focus on strategies to keep moving forward. Gromberg also discussed meeting with the EDA quarterly to provide updates. Gromberg noted that no increase for services from the previous year would be added. Bill Tapper asked if the services of WSB are helpful. Thares confirmed and stated it would help him to be more efficient in his role. BILL TAPPER MOVED TO APPROVE THE PROPOSED 2020 WSB ECONOMIC DEVELOPMENT ASSISTANCE SERVICES CONTRACT IN THE AMOUNT OF $9,300. JIM DAVIDSON SECONDED THE MOTION. Steve Johnson noted that much of Economic Development is subjective and asked if any metrics could be applied to show accomplishments. Gromberg responded that some things can be measured, but technical advice is hard to measure. Tracy Hinz expressed the importance of measuring what was completed in the previous year and updating the contract terms annually. MOTION CARRIED, 6-0. 11. Consideration of Adopting 2020 EDA Workplan Jim Thares stated that comments were received to the previous version of the 2020 EDA Workplan. Many of the comments focused on marketing. JON MORPHEW MOVED TO ADOPT THE 2020 EDA WORKPLAN AS PRESENTED. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED, 6- 0. 12. ADDED ITEM — Hospitality Study Discussion Steve Johnson noted an IEDC member has an interested hospitality prospect that would like to develop in Monticello. It was noted that the City's current Hospitality Study is outdated, and it was requested that the EDA fund the cost associated with completing a report. Johnson requested staff to understand the costs associated with the request and respond back to the EDA at their meeting on February 261h. TRACY HINZ MOVED TO AUTHORIZE STAFF TO RESEARCH THE COSTS ASSOCIATED WITH COMPLETING AN UPDATED HOSPITALITY REPORT AND TO REPORT BACK TO THE EDA AT THEIR REGULAR MEETING ON Economic Development Authority Minutes — February 12th, 2020 Page 6 17 FEBRUARY 26TH. BILL TAPPER SECONDED THE MOTION. MOTION CARRIED, 6-0. 13. Director's Report Jim Thares provided the Director's Report. He stated that he attended the EDAM conference. He noted that it was very good. He was able to participate on a mobile tour of the Lifetime Fitness co -work space at the Southdale Mall in Edina. There were also discussions regarding smart cities and 5G technology along with site selector panel interviews. Thares also noted that Prospect List had no additions for the month, but two new concept plans development ideas were reviewed. Thares introduced Dr. Paul Ruffin. Dr. Ruffin, a local resident, who has been involved with the start-up of incubators nationally. On January 9, 2020, Dr. Ruffin sponsored a full day veteran's symposium workshop in Monticello. Dr. Ruffin stated that he owns Global Business Incubation. They focus on working with veterans, youth, and social entrepreneurs in areas of incubation and acceleration. He stated that he was looking forward to learning more about the City of Monticello and Economic Development in the City. 14. Adiourn TRACY HINZ MOVED TO ADJOURN THE MEETING AT 7:42 P.M. BILL TAPPER SECONDED THE MOTION. MOTION CARRIED, 6-0. Recorder: Jacob Thunander Approved:,,-- zrrch 11 th, ,2,020 Attest: im Thar*, Economic Development Director Economic Development Authority Minutes — February 12th, 2020 Page 7 17