EDA Minutes 09-28-1999
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MINUTES
MONT'ICELLO ECONOMIC DEVELOPMENT AUTHORITY
'fuesday, September 28, 1999 - 7:00 p.m.
City Hall
Members Present:
Chair Ron Iloglund, Viee Chair Barb Schwientek, Assistant Treasurer Ken
Maus, Roger Carlson, Bill Demeules, and Darrin Lahr
Absent:
Clint Herbst
Staff:
Executive Director Ollie Koropchak, City Administrator Rick Wolfstellcr and
Recording Secretary Lori Kraemer
Guests:
Jay Eller, Twin City Die Castings and Pam Campbell, DA T
1. Call to order
Chair Ron Hoglund called the meeting to order at 7:00 p.m.
2.
Consideration to approve the August 31, 1999 EDA minutes
A MOTION WAS MADE BY BILL DEMEULES AND SECONDED BY BARB
SCHWIENTEK TO APPROVE THE AUGUST 31, 1999 EDA MINUTES. Motion carried.
3. Consideration of adding agenda items
Nothing added.
4. Consideration to review the preliminary GMEF loan application from Twin City Die
Castings Company for compliance with the EDA Business Subsidy Criteria
Ollie Koropchak provided the staff report giving the members a brief background for this
company. Twin City Die Castings site location in Monticello is a six acre parcel lying south
of Chelsea Road and immediately west of the new high school entrance road. The company
is proposing the establishment of a Magnesium Casting division in Monticello and
anticipates that it will be able to provide cast parts at a very competitive level in this fast
growing market.
Ollie Koropchak provided the members with a copy of the estimated uses and sources
statements as prepared by Lenny Kirscht who is packaging the application for the Minnesota
Investment Fund. The GMRF will be a part of the machinery and equipment financial
package and the GMEF will be in a shared second-position with the Minnesota Investment
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Eeonornie Development Authority Minutes - 9/28/99
Fund behind the industrial revenue bonds. Ollie also provided a list of the equipment for
purchase.
Mr. Jay Eller of Twin City Die Castings provided background of the company. Mr. Eller
also stated that they would be bringing approximately three employees from their
Minneapolis facility, but that the majority of the employees will be new and the company
will be providing extensive training as this is a new field they are starting.
Koropchak provided financial reports from 1997 and 1998. She also informed the members
that the company meets all criteria and the City Council did adopt a resolution for
application of State dollars. No action was necessary.
5.
Consideration to approve or deny GMEF No. 017 for Twin City Die Castings Companv.
Ollie Koropchak asked the EDA members to consider the approval or denial of the request
for a $100,000 GMEF loan. Ollie also explained the Minnesota Investment Fund to the
members noting that this is a grant to the City of Monticello from the Minnesota Department
of Trade and Economic Development. The City will loan the $500,000 grant to TCDC, thc
EDA will rctain the full principal and interest payback on the loan for future projects which
increase the state and local tax base and job and wage-levels. She also noted that it is
anticipated that the State will award the $500,000. The City negotiates the terms and
conditions with the company.
Ollie stated that first, the EDA needed to determine if this GMEF loan application from
TCDC will encourage economic development and secondly, the EDA needed to determine if
the proposed construction real estate project and the acquisition of personal property
application complied with the EDA Business Subsidy Criteria - GMEF Guidelines. Third,
the EDA needed to determine the amount and terms of the loan for approval.
Ollie Koropchak also advised the members that the City Council would be considering
ratification of the EDA's action for compliance of the EDA - GMEF Business Subsidy
Criteria on October 11,1999, and would approve of the Subsidy Agreement for GMEF No.
017 between the EDA and TCDC on October 25, 1999. If approved, the GMEF would be
disbursed at the closing date yet to be determined.
A MOTION WAS MADE BY BARB SCHWIENTEK AND SECONDED BY DARRIN
LAHR TO APPROVE GMEF LOAN NO. 017 AT 6.25% FIXED RATE FOR 7
YEARS FOR TWIN CITY DIE CASTING COMPANY, A MINNESOTA
CORPORA TION, IN THE AMOUNT OF $100,000 WITH TERMS AND
CONDITIONS AS RECOMMENDED. COLLATERAL, GUARANTEES, AND
OTHER CONDITION REQUIREMENTS TO BE DETERMINED AND PREPARED
BY THE GMEF ATTORNEY. THE GMEF LOAN APPROVAL SUBJECT TO
LENDER, SBA, AND THE STATE COMMITMENTS, VERIFICATION OF
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Economic Development Authority Minutes - 9/28/99
COMPANY FINANCIAL CREDIT ABILITY, AND COUNCIL RATIFICATION OF
EDA ACTION. Motion carried.
6.
Consideration to review the returned request for proposals relative to cost estimates for
preparation of design concepts and approval to fund through DMRF.
Ollie Koropchak noted that at the EDA meeting of August 31, 1999, the commissioners
directed Pam Campbell, DA T Chair, to prepare a letter to architects soliciting request for
proposals. This proposal was to include costs for preparing design concepts for facade
improvements to three identified buildings as well as six identified buildings. The intent of
the EDA was to obtain cost estimates prior to EDA' s consideration to fund the costs to
prepare the designed concepts. The building owners have been reluctant to invest dollars for
architectural design options only to find if it may be cost prohibitive to complete. DA T
members feel unqualified, yet they recognize pictures are worth a thousand words. Design
concepts would be a great asset as a marketing tool to promote the downtown revitalization
facade improvement program.
Ollie also noted that at a DA T meeting which followed the last EDA meeting, the DA T
members elected to add to the RFP a third option which included the cost for preparing
design concepts for facade improvements to an entire block of buildings. The RFP's were
due back Monday, September 27 with only one response from Claybaugh Preservation
Architecture Inc.
Ollie requested that after review ofthe returned RFP's, the EDA members should discuss
their level of interest to fund the architect's proposed fees for preparing the design concepts
and whether to consider funding three, six, or an entire block of buildings. Ollie suggested
that if the members desired to fund the fees, the expenditure should be earmarked from the
EDA-DMRF fund as this is not tied to job creation or the business subsidy criteria.
Pam Campbell, DA T Chair, presented comments to the EDA members regarding the
returned proposal from Claybaugh. Pam noted that some of the sites DAT had looked at
were Cent Com/Dominos; Vacuum Store/Masonic Hall; and Monti Liquors/Zoo Lounge,
which included both older and newer buildings. AE Michaels has also been asking for ideas
for his building. Pam also noted that rear entrances to the downtown businesses were also
being considered. She stated DA T also asked Claybaugh about redesigning a whole block
at once. Some of theEDA members thought Mr. Claybaugh's hourly rates were reasonable,
but noted that its hard to keep the cost down when its hourly.
It was the consensus of the EDA members to talk to business owners and tenants first to see
if they have an interest and to advise the approximate cost to them. Once they determine the
likely candidates, DA T would target three businesses at a time and get sketches from the
architect to take back to the business owners. After the owners have the sketches it would be
up to them to proceed with the actual improvements. It was also noted that the EDA could
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Economic Development Authority Minutes - 9/28/99
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this project. It appeared they were Llnaware that the property taxes were not paid.
The lender followed through and did talk to the company relative to the seriousness
of non-payment of property taxes. A second letter was addressed to Lake Tool, Inc.
from the HRA with copies to the lender stating the HRA at their October 6 meeting
will consider employing an attorney relative to defaulting on the contract. The
company is now current with GMEF payments.
Acquisition of industrial land - City Staff and Council are proceeding with
discussions with Goeman group and Chadwick. Estimated infrastructure costs are
being obtained from city engineer. With inconsistency between the Comprehensive
Plan and MOAA Plan, perhaps the Gold Nugget parcel is another option for future
industrial development. Another meeting is scheduled f(Jr next week.
PROSPECTS - The Prospect Team visited Systematic Refrigeration on Tuesday,
September 28. This manufacturing company is looking to relocate and expand.
Initial building size 60,000 sq ft with potential to expand to approximately 160,000
sq ft. 42 jobs currently, anticipate a total employment of 80 in ten years, Wage-
levels yet to be determined, DL stated appro x $10 to $15. They've been in business
for approximately 25 years, Clean site, no outside storage no toxins, Will meet
again October 7, 1999 to show them around Monticello, Will also provide them wla
Uses & Sources statement. Ramsey, Albertville, and Monticello are the three site
options under consideration, Potential user of GMEFs, Darrin cautioned that a fair
amount of their employees are from the Anoka/Ramsey area and Ramsey is near the
Anoka Tech which is where the company goes to hire new employees.
Design and assembly of high-pressured coolants for industrial use - Start-up
company, Has business plan completed. Looking to lease 5,000 sq ft from Brad
Barger. Seeking financing. Potential user of GMEFs, 12 jobs by November, 2000.
$10-12 per hour wlo benefits.
EDA fund balance - Ollie enclosed a current accounting of the EDA fund balance
after disbursal of the $100,000 to Aroplax.
Industrial Banquet - The Industrial Fundraiser Banquet will be held Tuesday,
October 26 at the Monte Club, Tickets will be mailed out the week of September 27
by the Chamber. If you need tickets, please call Brenda, 295-2700, at the Chamber
Office.
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10. Adiourn
A MOTION WAS MADE BY BILL DEMEULES AND SECONDED BY DARRIN
LAHR TO ADJOURN THE MEETING AT 8:30 P.M. Motion carried.
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