EDA Minutes 04-28-1992
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MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, April 28, 1992 - 7:00 PM
City Hall
MEMBERS PRESENT:
Chairperson Ron Hoglund, Bob Mosford, Harvey
Kendall, and Al Larson.
MEMBERS ABSENT:
Barb Schwientek, Brad Fyle, and Clint Herbst.
STAFF PRESENT:
Ollie Koropchak.
STAFF ABSENT:
Rick Wolfsteller and Jeff O'Neill.
1. CALL TO ORDER.
Chairperson Hoglund called the EDA meeting to order at 7:02
PM.
2. CONSIDERATION TO APPROVE THE FEBRUARY 5, 1992 EDA MINUTES.
Bob Mosford made a motion to approve the February 5, 1992 EDA
minutes, seconded by Al Larson. Wi th no corrections or
additions the minutes were unanimously approved as written.
3.
CONSIDERATION TO REVIEW AROPLAX LETTER OF INTENT AND PREVIOUS
APPROVED LOAN TERMS.
The EDA members reviewed the executed Letter of Intent for
Aroplax Corporation, noting the proposed changes in dollars
and fund sources. The EDA inquired of the number of jobs with
the Aroplax project, original application was for 27, 16
existing and 11 to be created.
Koropchak noted the Letter of Intent is a commi tment to a
Monticello location from Aroplax and outlines the proposed
funding sources which have not been approved. The State's
Economic Recovery Fund Grant is a grant to the Ci ty of
Monticello and loaned to the company. Depending upon State or
Federal fund availability will the City of Monticello retain
one-half or full loan payback. The original preliminary
State request was for $200,000; however, as the use is only
for "gap" financing all other funding sources must to be
sought first. Thereafter was the Central Minnesota Initiative
Fund preliminary application submi tted wi th a request for
$100,000, the preliminary approval from the Board was reduced
to $30,000; therefore, the request from the State is $170,000.
The GMEF fund request has increased from $30,000 to $55,000 to
$85,000. The first increase was to compete with the Brooklyn
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EDA MINUTES
APRIL 28, 1992
Park financial proposal and the second increase is due to Mr.
Schoen's feeling his original projected numbers were under-
budget. As was indicated in the enclosed letter, any cost
overruns would be reduced proportionally from the GMEF.
The EDA asked about the probability for funding approval.
Koropchak noted if the CMIF Board gives final approval to the
requested $30,000, it will be the first industrial loan
approved wi thin Wright County. The question of new jobs
created has been raised by the State and wi th Aroplax' s
restructured plans an addi tional five to ten jobs will be
created. Also, State funds can not be used for job
replacement from one state communi ty to another; however,
Aroplax ini tially considered vacant buildings in Wisconsin
(incentive to retain) and they can't expand at their current
facility due to the inability to raise their ceiling height
necessary to meet the height of new production machinery
(relocation necessary). BDS, Inc. feels very confident with
obtaining funding approval.
4.
CONSIDERATION TO REVIEW FOR RECOMMENDATION AN AMENDMENT TO THE
GMEF GUIDELINES: A NON-PERFORMANCE PROVISION.
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At the February EDA meeting, members were informed of the
proposed increase in GMEF dollars, $30,000 to $55,000, for
Aroplax financial package. The original loan was approved by
the EDA on June 26, 1991 with no closing or fund disbursement
to-date, some ten months later. Staff was then directed to
research the city's dollar amount invested into the Aroplax
project and to research provision options to amend the GMEF
Guidelines with regards to the length of time between the date
of GMEF loan approval by the EDA and the date of loan
closing/fund disbursement if or when the approved loan should
become null and void. Since the guidelines did not address
non-performance, the EDA wished to make an amendment
recommendation to City Council for consideration prior to any
request for action by Aroplax.
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Koropchak noted that she spoke to a local bank lender, BDS,
Inc., and city administration for suggestions and input. The
EDA briefly discussed the length options of 90, 120, or 180
days. Koropchak further noted that with closer monitoring of
other funding source approvals, the 120 days seemed
reasonable. Harvey Kendall made a motion to amend the GMEF
Guidelines: NON-PERFORMANCE An approved GMEF loan shall be
null and void if funds are not drawn upon or disbursed within
one-hundred (120) days from date of EDA loan approval. Said
motion to be recommended to City Council for consideration to
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EDA MINUTES
APRIL 28, 1992
amend. The motion was seconded
further discussion the motion
Council approval, Aroplax would
application for $85,000.
by Bob Mosford and without
passed unanimously. Upon
need to submi t a new GMEF
As outlined in the agenda supplement, Koropchak reported a
dollar investment by the Housing and Redevelopment Authority
for Aroplax Tax Increment Finance District No. 1-12, $3,850,
BDS for TIF plan preparation; $50, County for TIF
Certification; and $808.82, legal fees for Development
Contract preparation. Engineering fees of $69.75 and
financial packaging fees of $3,937.03 to BDS for a total of
$8,715.60.
5. CONSIDERATION OF PROSPECTIVE GMEF LOANS:
The following two companies are potential candidates for
GMEFs.
a)
Modern Molding, Inc. - This company seriously considered
a New Richmond, Wisconsin location. As the company
decided against Wisconsin due the distance and the
potential lose of employees, BDS, Inc. was able to
suggest a Monticello location. A financial package was
prepared and submitted to the company, after numerous
conversations, the company's decision was of a Buffalo
location. Monticello asked if the pot were sweetened,
would they reconsider and look at Monticello. On April
6th, two company representatives and the IDe prospect
commi ttee toured Monticello in the morning and afternoon.
The luncheon meeting included Mr. Pat Pelstring who
presented alternatives to the original financial package.
The two gentlemen were impressed wi th Monticello and
plans are for a company site location decision around May
1st.
This Long Lake plastics injection molding company with
tool and die making currently employs 21 and would add on
an additional 5-8 within three years. Project size of
20,000 sq ft (3,000 office and 17,000 manufacturing) pre-
stress concrete facility on five acres. BDS, Inc.
considers company financial statements as sound and
strong.
Fund sources include TIF of $80,000 and GMEF of $70,000,
total project costs are $779,000.
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APRIL 28, 1992
b) A-Q Thermo Process, Inc. - This contact from Mr. Bill
King and Lenny Kirscht of Community Venture Networking
and BDS, Inc., respectively, is a start-up company. The
four owners have a combined sixty years of experience in
metal heat-treating process. Blast furnaces are used in
the process which are said not to be dirty. The owners
would invest $100,000+ equity with other funds from the
CMIF, SBA 7a, and GMEF. The total project dollars are
estimated at one million. Plans are to lease a 15,000-
20,000 sq ft facility with high ceilings or a pit for
solvents. Anticipated skilled labor of 12-15 for year
one and 20-25 in second year. Mr. King said communities
of Crookston and Marshall are very interested: however,
he feels a closer proximi ty to the metro would be a
company advantage. The Shingobee proposal was marketed
noting the ini tial request for no start-ups. At this
time, the EDA has not reviewed or approved a start-up
company application for funding; however, guidelines do
allow to approve such. The EDA was in agreement with
Koropchak that no harm done to invite the individuals for
a meeting with representatives of the EDA, HRA, and IDC.
6.
OTHER BUSINESS.
None.
7. ADJOURNMENT.
Al Larson made a motion to adjourn and Harvey Kendall
seconded the motion. The EDA meeting adjourned at 7:30
PM.
G~~lf?O~~
Ollie Koropchak, EDA Executive Secretary
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