EDA Minutes 10-25-2005
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MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, October 25, 2005 - 4:00 p.m.
City Hall - Academy Room
MEMBERS PRESENT:
President Bill Demeules, Vice President Barb Schwientek, Council
Members Wayne Mayer and Tom Perrault, Darrin Lahr, and Susie
Wojchouski.
MEMBERS ABSENT:
Ron Hoglund.
STAFF PRESENT: Treasurer Rick Wolfsteller and Executive Director Ollie Koropchak.
GUEST:
Bruce Hamond, VisiCom.
1. Call to Order.
President Demeules called the EDA meeting to order at 4:05 p.m. declaring a quorum.
2.
Consideration to avvrove the Avril 26. 2005 and the August 9. 2005 EDA minutes.
Barb Schwientek made a motion to approve the April 26, 2005 EDA minutes Seconded
by Darrin Lahr and with no corrections or additions. the minutes were approved as
written.
Darrin Lahr made a motion to approve the August 9, 2005 EDA minutes. With a
correction to the spelling ofhis name, Wayne lviayer then seconded the motion. The
minutes were approved with no further corrections or additions.
3. Consideration of adding or removing agenda items.
None.
4.
Consideration of a vresentation and vrooosal for VisiCom. Inc. DMRF Loan No. Ill.
Koropchak informed the EDA that DMRF Loan No. 111 was the only loan approved and
disbursed by the EDA as a downtown revitalization loan. The $10,644 loan was approved for
VisiCom on August 29, 2000, and disbursed April 10, 2001. for rehabilitation of the building at
212 West Broadway. The extended principal and interest balloon payment is due November
1,2005, in the amount of $5,275.00. Mr. Hamond requested to meet with the EDA to give an
update on the improvements completed and future plans, and to offer two proposals for
payment of the loan.
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EDA Minutes - 10/25/05
Mr. Hamond informed members he purchased the vacant lot next to 212 West Broadway from
Barry Fluth. His investment into the exterior and interior improvements of the 212 property
was approximately $30,000 including the EDA loan of $1 0,000. All Fitness Matters has a
tive-ycar lease. He plans to complete the improvements to the 2"d floor in 2006. With the low
cost purchase, maintained local ownership, and increased rental rates in Monticello, this allows
him to cash flow the property. He plans to start lease-tenants for the commercial 1" floor of the
vacant lot this fall. The type of tenants would complement Fitness Matters meaning
independent health related business owners (not dental otlice.) He hopes to offer an attractivc
leasc progranl. He continued by presenting two options for the principal and intcrest payment:
1. Forgive the remaining balance because of his past investment and planned future investmcnt
in downtown Monticello. Or 2. Pay-off the remaining balance with American Express. This
is not an option as the City only accepts Visa and Master Card.
Demeules stated it is not in the realm of the EDA to forgive loans for credit-worthy businesses.
The EDA asked if he was looking to extcnd the balloon payment date. Hamond replied he was
more intercsted in putting more moncy into the downtown and suggested stop payment in two
months with no interest. EDA members agreed given the fact TIF will not apply to a vacant
parcel and the DMRF program was deleted, the EDA should look into a new program for
downtown.
DWTin Lahr made a motion to call the loan, principal and interest due November rf in
the amount ofS5.275.00, due and payable within 60 days of November 1, 2005. Wayne
Mayer seconded the motion and with no[urther discussion, the motion carried. The
EVA deferred the balloon payment to joster a downtown business and keeps the final
loan payment clean.
5.
Consideration to discuss and to authorize oavback of the EDA Fund.
At the April annual meeting, the commissioncrs requested to discuss payback of the EDA
Funds at their October meeting. Language from the Ordinance and EDA Business Subsidy
Criteria governing the original funds trom the City was prcsented to the commissioners. The
total amount transferred to the EDA was $383,000. Koropchak notcd of the $383,000, the
EDA returned $147,000 and spent $] 43,890.66 on the DMRF, a designated matching grant
program for downtown revitalization. The remaining outstanding balance for consideration to
authorizc payback to the City is $92,109.34; however. the EDA is under no obligation to return
the funds.
The previous paybacks were authorized as a means of the EDA showing good faith effort and
becoming self-sustained. The cash flow projections ending December 2005 were estimated at
$627,850.72 which included disburscment of the Tapper loan in the amount of $200,000. The
majority of the EDA funds came from state and federal grants to the city which are tied to
economic development (job and wage creation and industrial development) plus interest and
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EDA Minutes - 10/25105
intcrest income over the years. Additionally, Koropchak indicated there is an additional
$600,000 from the UMC and TCDC loan paybacks available to the EDA as a future source of
funding.
Koropchak noted that the $92,000+ outstanding balance of the original Liquor Funds is the
only remaining non-restrictive funds or funding source available for future downtown
revitalization. The EDA deleted the DMRF program some years ago after awarding 10
matching facade grants and one loan. The program terminated duc to a lack of interest and
thereaftcr the EDA worked very hard to encourage revitalization of the Block 35 parking lot
and rear facade improvements.
Perrault's original question was: If the dollars are not being used, why not return the money to
the taxpayers? Members agreed given TIF use must meet the substandard redevelopment test,
there appears to be little incentive to encourage downtown revitalization. Members asked:
Where would thc application of the non-restrictive funds result in the greatest bencfit for the
community? All agreed: Not for use as a matching facade grant but to encourage
rcdevelopment of the downtown. Lahr suggested perhaps the best usc is to preserve funds for
a downtown parking lot, as shortage of parking always comes up at the HRA when considering
downtown redevelopment.
Susie Wojchouski made a motion to table any action for authorization to payback any
remaining Liquor Store Fund dollars. Seconded by Wayne lvfayer and with no jz,rther
discussion, the motion carried
6.
Consideration to discuss incentive for use of Fedcral grant dollars.
Koropchak informed members she was looking for input into the idea of offering the Federal
grant dollars at a lower interest rate than the GMEF Guidelines in order to encourage use of the
restrictive dollars. These dollars must be used for purpose to establish or maintain a revolving
loan fund. The recycled dollars must be used by applicants willing to comply with HUD
criteria: Fifty-one percent of the jobs created must be held by low to modern income persons
and Davis-Bacon Act, etc. Upon pay-off of the $500,000 Federal grant to the City to Twin
City Die Castings, the principal and interest payback should total about $595,747. Final
payback date is June 2007, of which, approximately one-half has been paid back to date.
Koropchak thought this could serve as another funding tool for the ncw industrial park. An
applicant could be offered a choice of the GMEF or Federal dollars. The lower interest rate
as a trade-off for greater requirements. Koropchak indicated she had placed a call to the State
representativc to check out further restrictions but had not heard back.
One commissioners agreed stating there is an added cost to the applicant when the Davis-
Bacon Act is applicable. The commissioners discussed various interest rate ranges, deferred
interest, and balloon payment dates. The commissioners agreed with the principal idea,
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EDA Minutes - 10/25/05
encouraged development of criteria as another enhancement for the industrial park, and
suggested usc offunds in the II-A Zone only. This to discourage application by less desirable
users.
Koropchak noted the job information form and the CDBG - HUD objectives and the employee
certification form to be filled out by each employee hired by the applicant. The income levels
are gross wages per family size. Each new employee must complete the form as a certification
of complying with HUD objections. The intent is to hire low to modern income persons and
provide training to increase their skills and wage levels.
Darrin Lahr made a motion to research establishment and preparation olcriteriafor re-
use olthe Federal dol/arsjYom the TCDC loan. Suggested terms. ()% interest rate with
bal/oon payment in three years or up to 3% belo'w prime rate with bal/oon payment in
five years. i"fotion included calling for a special EDA meeting in November andfiirther
research with the State representative and EDA Attorney. Barb Schwientek seconded the
motion and with nofurther discussion, the motion carried.
Tuesday, November 29, 2005, 4:00 p.m. was earmarked as the date of the special meeting.
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7.
Executive Director's ReDort.
Some one noted Barry Fluth had purchased the Opal Stokes' house as potential additional
parking for Landmark Square Plaza.
Tapper's Holding Company - The lender informed Koropchak the construction project cost
increased by $80,000. The permanent financing and EDA loan may close on Friday, October
28. EDA still needs copy of the executed Lease Agreement between Tapper's and Strategic.
8. Other Business.
None.
9. Adiournment.
Barb Schwientek made a motion to adjourn the EDA meeting. Tom Perrault seconded
the motion and with no further business, the EDA meeting adjourned at 5:50 p.m.
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