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EDA Minutes 06-09-2021MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, June 9th, 2021— 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 a. Consideration of Approving Regular Meeting Minutes — May 12, 2021 Recommendation: Approve Regular Meeting Minutes — May 12, 2021. b. Consideration of Approving Workshop Meeting Minutes — May 12, 2021 Recommendation: Approve Workshop Meeting Minutes — May 12, 2021. c. Consideration of Approving Payment of Bills Recommendation: Approve Payment of Bills through May. d. Consideration of Resolution #2021-06 approving TIF Pre -Application Supportin Affordable Housing TIF District for a 59-unit Multi -Family Low Income Housing Tax Credit (LIHTC) Affordable Housing Proposal by Duffv Development Recommendation: Adopt Resolution #2021-06 expressing support for the proposed use of TIF for a LIHTC multi -family development by Duffy Development Company, Inc. e. Consideration of Resolution #2021-07 Extending Lease Agreement Between the Citv of Monticello Parks Department and the Citv of Monticello EDA for 349 West Broadway Recommendation: Approve Resolution #2021-07 extending the lease agreement between the City Parks Department and the EDA for property located at 349 West Broadway for an additional 15 months, to August 31, 2022. Economic Development Authority Minutes —June 9th, 2021 Page 1 1 5 f. Consideration of Resolution #2021-08 Authorizing EDA to Enter into Preliminary Development Agreement with Deephaven Development in Connection with Block 52 Recommendation: Adopt Resolution #2021-08 authoring entering into a Preliminary Development Agreement (PDA) with Deephaven Development, LLC or its assigns in connection with the EDA's redevelopment goals and visions in Block 52. Regular Agenda 5. Consideration of Pre -Application for GMEF Loan from Cory Kampschroer for Proposed Car Wash Development Proposal Jim Thares explained that a pre -application for GMEF loan was received at the City for a proposed car wash development estimated at about $4,100,000. The proposed location is 1301 Cedar Street. Thares explained the proposed car wash facility and noted that an estimated 4 to 6 jobs would be created. The applicant is seeking a $100,000 GMEF loan to fill a $400,000 funding gap. The project developer is also talking to other lenders to help close that gap. Lloyd Hilgart asked if the estimated costs were over $4 million, how the site would only have a value of $1 million or less. Thares noted that the pre -application indicates a building costs are $1.8 million. Thares explained that some of the numbers may be a little fluid and the applicant would be asked to come back with more precise numbers. Bill Tapper asked what off site development costs included. Cory Kampschroer explained the background of the project and noted that the total project costs are anticipated at $4 to $4.5 million. Broadly speaking about the costs, about $1 million is for equipment, $2 million for construction, and the rest for land or soft costs for development. Tapper asked how the developer would establish priority for the four investors in the project. Kampschroer confirmed that there are some personal guarantees and other assets such as Wright County EDA, the Initiative Foundation, a bank, and SBA. Thares stated that the EDA's loan program does require personal guarantees and they prefer to have second position. Steve Johnson asked if this project has gone through underwriting analysis. Kampschroer indicated it is in progress and there is a feasibility study underway. Johnson asked if it would make sense for the EDA to complete an independent feasibility study or underwriting study or if it would be sufficient to use Kampschroer's independent study. Thares stated it might be possible to utilize the SBA lenders analysis Economic Development Authority Minutes —June 9th, 2021 Page 2 1 5 though it will be dependent on the primary lenders approach to that question. Tapper asked Kampschroer if he has completed a needs analysis due to the location of existing car washes. Kampschroer indicated that the particular model of car wash is unseen in the City. It focuses on convenience, quality, and experience. Hilgart asked if they could view renderings. Kampschroer indicated that he would send those along. Johnson asked EDA members is they were comfortable with the independent underwriting required by SBA for this project. Other members responded that they were comfortable following the SBA's independent analysis. Johnson also asked the applicant if he was comfortable submitting the ancillary documents from the checklist for the GMEF loan. Kampschroer confirmed. Tracy Hinz asked if the applicant has operated other car washes. Kampschroer indicated that his first job was at a car wash, but that the car wash industry has changed since that time. He indicated that he is continuing to do his homework to ensure it is a successful operation. Hilgart assumed that the EDA would not go any further besides this first step unless there are approvals at the County and Initiative Foundation. Thares confirmed. Hilgart was concerned with the amount of time spent on the project if the other two lenders would not approve. Hilgart asked if the City can wait for the other two lending approvals and how quick the EDA can complete the lending process through GMEF. Thares felt the timeline could be done fairly quickly if all the required information is provided by the applicant. There was consensus by the EDA to accept a full application for GMEF. 6. Consideration of Update - Monti Arts Program Use of EDA Owned Properties — Sue Seeger Sue Seeger provided a report on the MontiArts Initiative. The arts program has been in place since the spring of 2018. To date, the program has received 16 grants totaling nearly $92,000. Seeger discussed how the arts program has utilized both EDA properties located at 349 West Broadway and 101/107 Broadway. The EDA members expressed appreciation for the update. 7. Consideration of EDA Authorization for Lease Termination of Billboard Sign Leases on EDA-Owned Land along 71" Street West — Outlot A, Country Club Manor Jim Thares explained the item was an update regarding the lease termination of billboard signs on EDA owned land along 7t" Street West. The parcel contains four billboard sign leases which were approved by the City Council several years ago. Thares Economic Development Authority Minutes —June 9th, 2021 Page 3 1 5 noted that the City would be providing notices to the billboard companies that their leases would be terminated due to multi -family development proposals for the site. A concept proposal of the multi -family development would be reviewed at the EDA's regular meeting on June 23, 2021. The City Council would consider approving the lease termination notices at their upcoming meeting. Thares explained that although the land is owned by the EDA, the City of Monticello entered into the leases with these billboard companies. The land was previously tax forfeit and conveyed to the City of Monticello many years ago. The City then transferred the land to the Monticello HRA and the then the HRA transferred the property to the Monticello EDA. 011ie Koropchak-White asked if the lease money has been going to the City or the EDA. Thares confirmed that the City is receiving the lease payments. 8. Consideration of Authorizing Cedar Square Site Development Timeline and Developer Review and Selection Process Jim Thares noted that over the past several months, staff have been receiving inquiries of interest from developers regarding EDA properties (in particular, the Cedar Square site). The site is 1.39 acres and is listed on Costar at $389,000. Thares explained that staff have had multiple meetings with a developer who are interested in completing a multi -family development (apartments). Recently, two developers have submitted concept plans and letter of interests. Staff is looking for direction from the EDA on the property and the development requests for the property. Jim Davidson asked for the intended use in the Monticello 2040 Comprehensive Plan. Thares noted the Small Area Study shows the land as residential. Tracy Hinz asked for clarification on the direction that staff needed to move forward. Thares explained that the concept sketches matched what was provided in the Small Area Study. The EDA explained that they were not excited for an apartment complex. 011ie Koropchak-White asked if the developers were not interested in townhouses. Thares noted that he provided a townhouse sketch completed by Anderson Engineering to the developers, but neither were interested in such use. Thares noted that the EDA could post a request for qualifications with the sketch completed by Anderson Engineering attached to it. It was understood that at this time there was no interest in an apartment building at this location. Due to current interest in development and a variety of projects happening throughout the City, there was not a rush to sell the land, but the EDA would be open to entertaining a concept that was similar to the sketch provided by Anderson Engineering. Economic Development Authority Minutes —June 9th, 2021 Page 4 1 5 9. Economic Development Director's Report Jim Thares provided the Economic Development Director's Report as provided in the agenda. It was noted that the marketing videos would be included on the City's new website and could be integrated into Costar Loopnet listings. In addition, these links could be sent to prospective buyers. Bill Tapper explained that he would be resigning from the EDA effectively immediately. OLLIE KOROPCHAK-WHITE RELUCTANTLY MOVED TO ACCEPT THE RESIGNATION OF BILL TAPPER ON THE EDA. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 7-0. 10. Adjourn TRACY HINZ MOVED TO ADJOURN THE MEETING AT 7:19 P.M. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED, 7-0. Recorder: Jacob Thunander ir Approved: July 14th, 2021 Attest: res, Economic Development Director Economic Development Authority Minutes —June 9th, 2021 Page 5 1 5