EDA Agenda 11-08-2000
.
.
.
AGENDA
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Wednesday, November 8, 2000 - 7:00 p.m.
City Hall - Academy Room
MEMBERS: Chair Bill Demeules, Vice Chair Barb Schwientek, Assistant Treasurer Ken Maus,
Clint Herbst, Roger Carlson, Ron Hoglund, and Darrin Lahr.
STAFF:
Treasurer Rick Wolfsteller, Executive Director Ollie Koropchak, and Recorder
Lori Kraemer.
GUESTS:
Jim Harwood or Brad Barger, Blue Chip Development Company.
I . Call to Order.
2. Consideration to approve the August 29, 2000 EDA minutes.
3, Consideration of adding agenda items.
4. Consideration to approve extending the balloon payment date for GMEF Loan No. 010
(Blue Chip Development Company).
5.
Public Hearing - Consideration to adopt a resolution amending the EDA Business Subsidy
Criteria.
6. Executive Director's Report.
7. Other Business.
8. Adjournment.
.
.
.
EDA Minutes ~ 08/29/00
MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, August 29, 2000 - 7:00 p.m.
City Hall - Academy Room
Members Present:
Vice Chair Barb Schwientek, Assistant Treasurer Ken Maus, Clint Herbst,
Roger Carlson, and Ron Hoglund.
Bi] I Demeules and Darrin Lahr
Executive Director Ollie Koropchak and Recorder Lori Kraemer.
Members Absent:
Staff:
Guests:
Kevin Heaton, Preferred Title property
Bruce Hamond, The Sweetest Things property
Susie Wojchouski, OAT representative
1.
Call to Order.
Vice Chair Barb Schwientek called the meeting to order at 7 PM.
2.
Consideration to approve thc April 25. 2000 EDA minutes.
A MOTION WAS MADE BY RON HOGLUND AND SECONDED BY CLINT
HERBST TO APPROVE THE MINUTES OF THE APRIL 25, 2000 EDA MEETING.
Motion carried with Roger Carlson abstaining.
"
.J.
Consideration of addim! agenda items.
None
4.
Consideration to review for approval/disapproval the DMRF application for 113 West
Broadway.
Ollie Koropchak, Executive Director, provided a briefreview of the DMRF application
from Kevin and Cindy Heaton, property owners of the building occupied by Preferred
Title and Mountain Top Christian Books and Gifts. Mr. Heaton informed the EDA of his
revitalization improvement plans and asked for the EDA's direction. DAT minutes of the
August 2, 2000 meeting stating the design approval and review were provided. On
August 16,2000, DA T approved one written cost estimates for this proposed
revitalization improvement as well. Koropchak noted that OAT approved three design
options and recommended the EDA to consider amending the DMRF Guidelines to
accommodate their Plan C. Koropchak stated that if Plan C is the desired plan of the
EDA and property owner, the EDA should consider agenda item #5 first so DMRF No.
110 is approved in compliance of the guidelines.
Mr. Heaton noted a concern with stripping off the old paint on the building and the
possibility of running into problems at that point. His conccrn was if the EOA and OAT
would have a problem with them re~painting if necessary. Putting in new brick was
-1-
.
.
.
EDA Agenda - 8/29/00
suggested by Mike Cyr, local contractor. as well as OAT, but timing for the work is
another concern.
The EDA members discussed increasing the amount of matching funds due to the size of
this building and its prime location. It was stated that the language would have to be
worded very carefully so as not to set a precedence with other potential businesses.
Koropchak also stated the remaining costs of this project could be financed through the
EDA loan at approximately 2% below the prime interest rate along with a lender.
It was also discussed that the EDA could possibly change the guidelines stating that the
amount of matching funds could not exceed a determined amount of dollars per foot. It
was also discussed that if an owner was to replace brick it, which is much more
expensive, the amount of matching funds would be higher, with a stipulation that it not
exceed a determined amount. The members discussed amounts based on square footage
of buildings.
A MOTION WAS MADE BY KEN MAUS TO APPROVE DMRF NO. 110 FOR UP
TO 50 PERCENT OF THE REHABILITATION COSTS, NOT' TO EXCEED $11,000,
FOR FRONT FACADE AND SIGNAGE AT 113 WEST BROADWAY. RON
HOGLUNO SECONOED THE MOTION. Motion carried unanimously.
This is a one time exception due to unusual circumstances; length of linear front footage,
prominent location (heart of town), and extreme per square footage rehabilitation costs.
There was further discussion by Koropchak who explained that if the project were to
exceed the $11,000 limit, the EOA could go up to $25.000 with the building owner
getting a loan through the bank with EDA backing at 2% below prime interest rate.
5.
Consideration to discuss and adOPt a resolution amending thc OMRF Guidelines.
FACADE GRANTS and REHABILITATION LOAN.
This item was not necessary.
6. Consideration to review for approval/disapproval the DMRF application for 216 West
Broadwav.
It was stated that this building has two addresses, 212 W Broadway is for the lower unit
and 216 W. Broadway is the uppcr unit.
Ollie Koropchak, Executive Director, provided the staff report regarding the DMRF
application from Bruce and Cynthia Hamond. property owners of the building to be
occupied by The Svveetest Things on Broadway. Mr. Hamond informed the EOA of his
revitalization improvement plans. Also provided were the August 2, 2000 DA T minutes
stating the design approval and the DAT review. On August 16, 2000, OAT approved one
written cost estimate for this proposed revitalization improvement.
-2-
.
EDA Agenda - 8/29/00
Koropchak also noted that if the EDA elected to amend the DMRF Guidelines under
agenda item #5, this may affect the approval amount of this application as well.
Hammond explained that this project will be done in two phases, the second phase would
be to change the windows/door layout. Sweetest Things on Broadway will be open fl)f an
amount of time prior to the start of the second phase. Mr. Hammond stated some questions
which he has for his architect as to needing the two staircases to meet fire code and also
stated he spoke with Fred Patch, Building 0f1'icia1 about this. Hammond noted that the
electrical, plumbing and handicap accessibility also needed to be updated to bring it up to
code. Also looking at installing a door on the west side in front of building if it was
determined that the staircase can be removed. This would enable them to expand this
building as well. Hammond stated he has been in contact with the City inquiring on the
property next to his building for additional outside seating and parking.
Phase I would include removing the shutters but the awning would stay during this phase.
Hammond stated they are looking at October for their time frame. He also stated that
Masonite was recommended by the Architect and it was noted by staff and EDA that this
was in the City's camp plan and is also more aesthetically pleasing and cost would be
comparable.
.
After further discussion, Hammond requested a change from 2 points below prime to 4
points which would bring the interest rate back down to where it would have been back in
April when he first started looking into this project. Koropchak advised that the EDA
could do this. Hammond also noted that he would be open to an amortization schedule of
10 years with a balloon payment in 3 years versus 5, in exchange for the interest points.
A MOTION WAS MADE BY CLINT I-IERBST 'ro APPROVE DMRF NO. 111 IN THE
AMOUNT OF $2,500 FOR FRONT FACADE AND SIGNAGE IMPROVEMENTS, IN
THE AMOUNT OF $2,375 FOR THE REAR FACADE IMPROVEMENTS. IN THE
AMOUNT OF $1,625 FOR THE WEST SIDE FACADE IMPROVEMENTS, IN THE
AMOUNT OF $2,500 FOR THE EAST SIDE FACADE IMPROVEMENTS, IN THE
AMOUNT OF UP TO $500 FOR FEE REIMBURSEMENT, AND IN THE AMOUNT OF
$10,644 FOR A REHABILITATION LOAN AT 212 WEST BROADWAY WITH
INTEREST RATE AT 5.5%; AMORTIZATION SCHEDULE OF 10 YEARS WITH A
BALLOON PAYMENT IN 3 YEARS. KEN MAUS SECONDED THE MOTION.
Motion c::UTied unanimously.
7. Consideration of Executive Director's Report:
a)
GMEF Loans - Payback on all loans are current. T.J. Martin continues to drag their
feet with payments one to two months behind, however, they are eUHently current
(See attached payment schedule.) Property taxes for first-half of 2000 were also
paid. Copy of the May I check after follow-up discussion with Bondhus per the
.
-3-
.
.
.
EDA Agenda - 8/29/00
b)
direction of the EDA on April 25, 2000.
Twin City Die Castings - Attached copy of invoice from EDA Attorney for drafting
closing documents for the EDA loan. Copy of check from TCDC for EDA
expenditures. Copy of the EDA check of $1 00,000. Closing for the EDA and
City/State Loan actually took place June 8, 2000, at the headquarters of TCDC.
Our attorney attended the EDA and State/City loan closing at no cost because of the
attitude toward TCDC by State's attorney due to the discrepancy between the State
Bond and State Loan agreements. Also attached is a summary of the EDA and
State/City Loan disbursement and list of equipment. All loan funds have been
disbursed to TCDC. Loan paybacks are on schedule. $500,000 was paid to TCDC.
EDA Business Subsidy Criteria - The BRA has elected to increase the wage level
for 'I'IF funding. The HRA decision came as the State of Minnesota increased the
wage threshold from $8.00 per hour to $9.00 per hour for non-metro. Additionally,
the HRA attorney is reviewing the business subsidy criteria for other possible
changes for compliance with the latest Legislature changes. Koropchak suggested
the EDA authorize amending the EDA Business Subsidy Criteria and increase for
the wage levels for funding consistent with the HRA and other necessary changes if
so necessary. Wright County Partnership's threshold is $10.00 per hour.
c)
A MOTION WAS MADE BY RON HOGLUND TO AUTHORIZE AMENDING THE
EDA BUSINESS SUBSIDY CRITERIA AND INCREASE FOR THE WAGE LEVELS
FOR FUNDING CONSISTENT WITH THE HRA. ROGER CARLSON SECONDED
THE MOTION. Motion carried unanimously.
d) Proflle Powder Coating Company - Copies of letter relative to this project wcre
provided. The EDA did not formally approve the request for dollars so no costs
were incurred by the EDA. It is the hopc the project will move forward 2001.
e) IDC Banquet - Tuesday, September 26, Vintage Grill, Wine Tasting/Speaker: Norm
Coleman. Invitation and tickets going out week of August 28.
There was fUliher discussion on the status of the former senior center but there was nothing
further at this point. Koropchak also advised of the !-IRA agreement with Barry Fluth/Brad
Johnson regarding the Amoco site.
8.
Other Business.
None
9.
Adjournment.
The meeting w
~s; eta~
-4-
.
.
.
EDA Agenda - 11/8/00
4.
Consideration to approve extendine the balloon payment date for GMEF Loan No.
010. (Blue Chip Development Company)
A. Reference and Back~round:
At the request of Jim Harwood and Brad Barger, the EDA is asked to consider extending
the balloon payment date from December 1,2000, to December 1, 2005, for GMEF Loan
No. 010 for Blue Chip Development Company dba Vector Tool. Assuming the November
1,2000, payment is received, the remaining principal balance is $42,962.81. The loan was
approved on September 13, 1995, at 6.75% fixed interest rate and amortized over 20
years with a five-year balloon payment. The conventional lender is Firstar Bank, Gary
Taverna. The GMEF payback payments are current as of October 30, 2000.
The EDA Business Subsidy Criteria, GMEF Guidelines, IV. Terms and Conditions,
Deferral of Payments reads: 1. Approval ofthe EDA membership by majority vote. 2.
Extend the balloon if unable to refinance, verification letter from two lending institutions
subject to Board approval.
The request to extend the balloon payment is not because Blue Chip ''the borrower" is
unable to refinance. The request is due to the high cost of refinancing and a timing issue.
The EDA loan is in third position behind the lender and the Central Minnesota Initiative
Fund (CMIF). The CMIF $50,000 real estate loan was amortized over 15 years, balloon
payment in 7 years @ 8.0% interest rate. There is no fourth mortgage.
According to EDA Attorney Greensweig if the EDA approves extending the balloon date,
the EDA loan agreement and promissory note will need to be amended or restated and the
guaranty agreement reaffirmed.
A letter from the lender, Firstar Bank, has been requested stating the lender has no
problems with the EOA extending the balloon payment date and no default exists with the
lenderlBlue Chip loan agreement. Also, a current copy of the financial statements for
Vector Tool & Mfg, Inc. was requested.
Prior to the EDA agreeing to extend the balloon payment date to December 1, 2005,
please consider these questions:
1. Is Blue Chip (Vector T ool)/lender loan agreement in good standing and
acknowledgment of request to extend submitted?
2. Blue Chip (Vector Tool)/EDA loan agreement in good standing?
3. Blue Chip (Vector Tool)/CMIF loan agreement in good standing?
1
.
EDA Agenda ~ 11/8/00
5.
6.
7.
Re-negotiate EDA interest rate for balloon extension: Original loan 6.75%. Prime
interest rate the week of October 23,2000 was 9.5%. Two percent below prime
would be 7.5%.
Borrower pays cost to amend or reaffirm EDA documents.
Negotiate extension date ofless than 5 years.
Consideration ofthe current fund balance of the EDA-GMEF?
4.
I anticipate Jim Harwood or Brad Barger to attend the EDA meeting.
B. Alternative Action:
1. A motion to deny extending the balloon payment date for GMEF Loan No. 010
(Blue Chip).
2. A motion to extend the balloon payment date from December 1,2000, to
December 1, 2005, for GMEF Loan No. 010 (Blue Chip) at an interest rate of
%. Preparation ofthe amendment and reaffirmation documents the
responsibility of the borrower.
3.
A motion to extend the balloon payment date from December 1,2000, to
, for GMEF Loan No. 010 (Blue Chip) at an interest rate of
%. Preparation of the amendment and reaffirmation documents the
responsibility of the borrower.
.
4. A motion to table any action.
C. Recommendation:
Ifthe EOA's desire is to extend the balloon payment for another reason than the borrower
unable to refinance, it is recommended the interest rate be re-stated at a rate which does
not encourage requests to extend balloon payment dates. Upon request for reasons other
than unable to refinance, the recommendation is that the re-stated interest rate be
approved at the greater of the original approved interest rate, the current prime rate, or
the current prime rate less up to 2% below prime rate. This subject to letter from lender,
good standing of the EDA loan, sufficient EDA-GMEF balance, and agreement of
borrower to pay attorney fees.
D. Supportine; Data:
Excerpt of the EDA Business Subsidy Criteria. Letter from lender and current financial
statements submitted at EDA meeting.
.
2
.
.
;f::
.
IV.
EDA Business Subsidy Criteria
TERMS AND CONDITIONS
*
LOAN SIZE - Minimum of$5,000 and maximum not to exceed 50% of the
remaining revolving loan fund balance; for example, if the
remaining revolving loan fund balance is $50,000, the
maximum loan issuance is $25,000.
*
LEVERAGING - Minimum 60% private/public non-GMEF
Maximum 30% public (GMEF)
Minimum 10% equity EDA loan
*
LOAN TERlv1 - Personal property term not to exceed life of equipment
(generally 5-7 years). Real estate property maximum of 5-
year maturity amortized up to 30 years. Balloon payment at
5 years.
*
INTEREST RATE - Fixed rate not less than 2% belmv Minneapolis prime rate.
Prime rate per National Bank of Minneapolis on date of ED A
loan approval.
*
LOAN FEE -
Minimum fee of$200 but not to exceed 1.5% ofthe total loan
project. * Fees are to be documented and no duplication of
fees between the lending institution and the RLF. Loan fee
may be incorporated into project cost. EDA retains the right
to reduce or waive loan fee or portion of loan fee.
*Fee to be paid by applicant to the EDA within 5
working days after City Council approval of GMEF
loan. Nonrefundable.
*
PREP A YMENT
POLICY -
No penalty for prepayment.
*
DEFERRAL OF
P A Yl'vIENTS -
1.
Approval of the EDA membership by majority vote.
2.
Extend the balloon if unable to refinance, verification
letter from two lending institutions subject to Board
approval.
*
LA IE PAYMENT
POLICY
Failure to pay principal or interest when due may
result in the loan being immediately called.
KAREN\QF'FICE\PQLlCIES\GMEF: 8/31/99
5
GfVLE F ~ 010
Beginning J.~O.. 3t:,;X/7 ;J.SO. J 8307 Ending Yearly Yearly
Index Balance Interest Principal Payment Balance Interest Principal
======== ::;::::::=========== =============== ====::========= ==c:::;;;;======== ===::::========= ==:::;:;;.========= ======:=:=======
12/1/95 I'iJ8J.. $50,000.00 $98.93 vi $380.18 $49901.07
lid'll,. ...1/9.11i1?;;1....,. . . v 380.18 49,801.58
2.jlflqi,2/1/96j(j'!J81 $49,801.58$280.1:3'/' --''-."f1b().o5'~ $380.18 $49,701.53
3/1;" 311/96 J '''I(P~ $49,701.53 $279.57 ./ $100.6r-? $380.18 $49,600.92
1/1"1 4/1/96 11{6S $49,600.92 $279.0-0 v - '$1()1.18 'j/' $380.18 $49,499.74
S /10 5., 11/961 Q7/f$49,499.74 $278.-e vJ$1100-21'.'73.52-Y7' $380.18 $49,398.00
(../1/ ---6/1/96)~f~3$49,398.00 $277.86./ V' $380.18 $49,295.68
1//1 711/96119 ~ $49,295.68 $277.29 v $102.89;:'; $380.18 $49,192.79
t//;z... 811/96 ;2.00'1 $49,192,79 $276.71 o/$10-3:4'r7' $380.18 $49,089.31
qh~.-. 9/1/96 J.o1lJ3 $49,089.31 $276.13.,.$104.05;::'; $380.18 $48,985.26
/"/11 10/1/96;'1 'II{ s' $48,985.26 $275.54.... $104.64.1 $380.18 $48,880.62
ll/te._ 1211/1/1996~bXf'7 $$4488,880.62 $274.95""- $105.23.? $380.18 $48,775.39
;>-- 1 1 6.to" ,775.39 . .. --$274:36":/$105:82;;':-- 380.18
'j I Z. I.l 'b . ' ..' 380.18
_..H /1. .- 2.. ./1./97 .;2-.. .' D 3...t. $48. ,5.6.3,.-1.5. $273,17/$101:01";/'" $380.18
"'1 h _ 3/1/97 ~JO'1), $48,456.14 $272.51. v$101.s::r7 $380.18
If/It ",4/1/91';11/91 $48,348.52 $211.96 v- '---"'$1(ja:2:r;;- $380.18
t;po 5/1/97 ;/37f $48,240.30'$271.35li'- ""'^$10!fa'3''':; $380.18
~~~ 5 ~~~~~~ ~~Y:A1Z ~:~:6~i:6~ ~~~~:~~:" -.. -- ~~~~:6:::::~ ~~~~: ~~
S/~S' ,8/1/97 d-jl/~ $47,911.97$269.50V$HO:ss'v" $380.18
rZ;(~ 196J~;:7~J2.~fJ ~1~:~~~:~~ ...~~~:~-~~S:':. "'-'-~~.....1.1'.~:.:.~.:~..-..~{~=" ~;:~:~:
'1/1.1 11/1/97 ,;.lJ 'fd- $47,578.07 $267:6~v - $n2:56~';::;' $380.18
il/.;}:; 12/1/97;;U Yl..S. $47,465.51 $266.99'..V' $113.19~" $380.18
;T4.' ;JT~7~llrjJ--Si1-$47J'S'~2 --~IS i7 $113.83v ~$380.18
,.q!2: 11/98;c.;i.& 71$47,238.50 $265.7.1 ".-/ $114.41;;'-- $380.18
'II is 11/98;>>'7Sb $47,124.03 $265.07' v' $115.1T;...-----. $380.18
'i/~1 ,4/1/98J).S1r... $47,008.92 $264.4~ v $115.76..... $380.18
rj!.'Fi---?!J!'i~2:?~'ik $_46~~9~.~.7__ ____..__ _ _$..?l:!3:?:I ~ __,' .$11.6,11 r ... $380.18
aj,d,T ,6/1/_9?.{3L?,).. $46,776.76 ,_, __ $263.12:-- ,$,117.9,6.....-:'..., $380.18
V~1__~~-~'~~~~ tiT. ~1~:~~;:~~" ~~~t:~ ~ n~~:;~ ~G" ~;~~: ~ ~
:yZ~'f-~~/1:i98j.:3.;7 ~'.S- $46,423.59 . $261 :'1'3". $_119:Q.5',~: $380.18
~':I2:c.l_~OI1/98 J. 3 3.2.1 $46,304.54 $260.46 v.. $119,72<('. $380.18
~ 1111l98j31< 146,1 B4,8'- . $259,79'; $120.39 L, $380.18
..l-:; 12/1/98:t'f&S-~ $46,064.43 ""..._ ..W 259..11 v 121.07 v .. 380.18
'~'};;',J~~~~~1~~a-:~:~~.~~~~:~~-_-'----'----1~~-Hi~;i?.~--'---~HHt:7_ ~~~~: ~:
$1t_~~~~_~~~t~:1;~1:~':~~~~6~~~-,~-=~-.......,~~~:g~.z::":':.:*~ ~U.~_~t:". ~;~~: ~~
aL ~/1/9~Zi\O. $45,452.24... .. ..$255,67/$1?4A>tV.. $380.18
c,,7il_.67179/d 11,/)"-$45,3202 6f17} $254.97 v $125.21~ $380.18
~t-fJ;j.~~~::::::::::~iii7::11;'~ i::!li
~."L l1-,'-fCfI17991? ...... '. .$44,822.63'. ... .. ... ......-$252:13'~/ .. '$12S:Cls'i/ ~,. $380.18
1~f~~~HH~g~'-zfi=~~1-:~~~:-~~'~~~:':~' "'=-~:~-~'6':~::>'-::' ~1~~~~~f5=-- ~;:~: ~:
YL?,L~: 2/1/00jAl.L'i,$44':306:-01-...... $249 :22 ;,; ..--..--', "'$ ~36\j6'~ ..--. ~~~~: ~:
~il~--311lO0"LE;JJ,$44,175.11 $2.48AS.;;.'....---$131.iac7"" $380.18
-. ...~-4hio6....1..- $44.043.41 $247.74V' '---$132044:;'; $380.18
~';'5 ~ro--5mOOhl) . .......$43,910.97. $24t.ao........~'--$133:laV ,. . $380.18
~J--'~--6/1/00..1J~ $43,777.79$24R25V""--- '$133.93~ $380.18
. "tAP ... '7!.~m,(d~if$43,643:86'- ..$24.5:.'o/i---'-~-"$T3,n~tr...-- $380.18
~~j__g...IJ!q9~. .._' $43,509.17'$24474';;";V:::::'-"l135A4';? $380.18
C) g 11100 ;;. bll-~.$43,313.73 $243.98;/""-'''$'136:20'7''-- $380.18
L "fO/1/0 'J. 0';'; '$.r3,237.53'H----.'$2'r:r217'-----"-.-l1'3If97t7'. $380.18
l!;}!/;},.,un/1/00 'I. $43;100.56 $242.44-' m" ..--$T37:U.-'-. $380.18
CLIENT NAME:
BLUE CHIP DEVELOPMENT COMPANY (for Vector Tool)
FUNDING:
. PRINCIPAL:
INTEREST:
CITY OF MONTICELLO
$50,000.00 TERM
6.75% PAYMENT:
(5'1(" b<>--IL.o,,)
20.00 YEARS
$380.18
$48,563.1.5
$48,456.14
$48,348.52
$48,240.30
$48,131.47
$48,022.03
$47,911.97
$47,801.29
$47,689.99
$47,578.07
$47,465.51
$47,352.3/
$47,238.50
$47,124.03
$47,008.92
$46,893.17
$46,776.76
$46,659.70
$46,541.98
$46,423.59
$46,304.54
$46,184.82
$46,064.43
45943.36
$45,821.61
$45,699.18
$45,576.0.5
$45,452.24
$45,327.72
$45,202.51
$45,076.59
$44,949.96
$44,822.63
$44,694.57
$44,565.80
44436.30
$44,306.07
$44,175.11
$44,043.41
$43,910.97
$43,777. 79
$43,643.86
$43,.509.17
$43,373.73
$43,237.53
$43,100.56
$42,962,81
3,337.57
3,252.31
3,161.10
3,063.55
2,959.20
1,224.61
1,309.88
1,401.08
1,498.64
1,602.98
.
.
.
EDA Agenda - 11/8/00
5.
Public Hearine - Consideration to adopt a resolution amendin2 the EDA Business
Subsidy Criteria.
A. Reference and back2round:
At the last EDA meeting, the commissioners approved a motion calling for a public
hearing to consider amending the EDA Business Subsidy Criteria. The recommendation
was to amend the criteria relative to the wage level provision and other criteria affected by
Legislative changes. Also, the proposed amendments would provide a consistency
between the HRA and EDA Business Subsidy Criteria.
The public hearing notice appeared in the local newspaper October 26 and November 2,
2000, meeting the requirements of the law. The proposed additions are in bold print and
deletions in parentheses within the attached criteria.
Please open the public hearing for comments.Of questions. Upon hearing comments or no
comments, please close the hearing prior to taking action.
B. Alternative Action:
1.
A motion to adopt a resolution amending the EDA Business Subsidy Criteria.
2. A motion to deny adoption of a resolution amending the EDA Business Subsidy
Criteria.
3. A motion to table any action.
C. Recommendation:
Recommendation is alternative no. 1.
D. SuPportinl Data:
Copy of the criteria with proposed amendments, public hearing notice, and resolution for
adoption.
1
.
.
o Q 35~Ng.
~ llD:r>~ s::g 8ro
N 0'< ~ - (i; -, - 0 () Z
~=o ::::1,5-- 5 2'~;::;:0
(D.... =_0 (b __'<-t
z^~::::I'ro _Ul O'il> 0 0-
OO~<O(j)::rO. -0-
:<aO' UlroSi~-o~m
l"-g = [ g. 22 5' ~ g (j)
N ::r i6 -0 ~ !!!. i5 3-' g. I
o il> ro -. <:: Ul ro m
8?"W Ci)il>(i)Q.!!!.=:Il
~mo 05lnil>!!!.,Om
~ is iil au,:.. '< ~lD Z~
03 ro<D!!!.-.Js'-< >0
<::_. 3il>!l!!!.'?::::IGl ZZ
~~ ~ g.c5's:3 * <: COz
lllro il>-o1jl<O' om ~i:0
0< ::g (i) _5!!!.a;Z~OOo:::!
::;-!!!. <l> a.-il> 0" g.>0::D 0
lll.g Ill!:!l e 3 ;::;::;. III -; I: -; 0 m
53 ~ <D ",ro'< ==mz:::rmO
~ro !!!.Ill<oaI5::r0-;mrii~
3. g. Di w 5' ~ a: <D ~ ~ 0 r- 'tI
> ro =g.<o - ~ :::0-01:
c ::T1ll~_<.nIllO-~-;'tIlD
g. <l> '2: 0 ::T 0-0 ::::I Z c -< "" r-
Illro.gro<.n<::OZ<O;;o,-
g. S' 0' ::T CD :::;; g ~_ In :!! ~ ~ 0
-< <o~_<::il>oocn(j)3:-;:::r
~~.~~.~~~~~~~~
a.<l> "'~ en5'~ -;-;:!!
~ g.~~@<O.g ~5~
l{l:>....a!2.g3 r::D
::::I1ll::TS!!.-:....Cro r-::j
__lDo.......::::::I 0-<
- 0-0 '< ~ ro -
i6;::;:'"'oo.a.>
::;.'<.g :::!. CD ffi s.
<Io<ii3Ul5
(D" s>> (f) :!:'< Co......
~ :=~Ill JJ~~
In Ill-oO--.
o 3=;oz",
iil roUl3olll
- ::::I <::. :<::::1
-< a.~ ceo.
I _ - Q"
.
o g.~~5'
~I~gc:ro
N:Il<::=:il>OZ
O)fra~':< :::+:2-
- ><"""=z'< o'
N:Ef'.o08.ro
8 0 ;s::< s:: 1ij'
..9~ :i"5,a;,o =r
_ ::::I '" '" ro
~ . o~r-m
lD -loroa
,;"'f. ::J 0 ='<
o ro III 0.<0
~ iD = ~ ~'
)> !ei5iil::J
C. ~S:~:T
3 e.oo!!!.
5' -2 ~..
1ij' g- 0' 0 -g
a 0 ~~(i;"'O
Q gO<D~c
roOO::::l~
~~gso
a.iif2.~Z
~"=~ Cn~
O~ g:~ ;" n
<.nUl om
ro:EiD~
iil1ll3ce
!ls-cnfA
g'5- 5flll
_. en =-g
a;gS!:
~!2.0 0'
Ul. 0 III
III g'a8
a~~S
_. ro <ii III
In :: a.~
.g. !!!.iD
~ --602!.
5 't;I 0
}3 -
o ::r en'"
~o I Ciii" ~~
NIll:035"<I>C
CDCD'o-CO,< ::ll)
. a.;><-,!2.-o - -
Z" :ES'<D a'
~??Q.<o~:p.:
NO(j) :;:1:::::1.=
_ cr- C1)
",ro~ !cnc
g~(1) o:;or;
ow.'"' ::;;~s:
~Ng 1ij",-ii:
0'< ::T c:;
O:J> ro g:
00. Ul
3 5
5' 0
!2 ~
iil 3
Q (b
3.
o
::::I
g.
CD
-0
a
-0 S
o
Ul
ro
a.
r
~ ~
!!!.
o'
::::I
cr
1::
c
L
C
"
([
c
~
,
~
f
3
III
'<
0-
o
Ul
o
2i
.
.
.
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF MONTICELLO, MINNESOTA
RESOLUTION NO.
RESOLUTION AMENDING THE BUSINESS SUBSIDY CRITERIA
OF THE
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FORTHE CITY OF MONTICELLO, MINNESOTA
WHEREAS, the Economic Development Authority in and for the City of Monticello,
Minnesota, held a public hearing on August 31, 1999, and approved the Business Subsidy Criteria
for the Economic Development Authority in and for the City of Monticello, Minnesota, pursuant
to Minnesota Statues, Section 1161.993 through 1161.994; and
WHEREAS, the 2000 Minnesota Legislators enacted amendments to the Business Subsidies,
Minnesota Statutes, Section 1161.993 through 1161.995; and
WHEREAS, the Economic Development Authority in and for the City of Monticello,
Minnesota, has performed all actions required by law to be performed prior to approval and
adoption of the proposed amendments to the business subsidies, including the holding of a public
hearing upon published notice as required by law 0 Public Hearing Date November 8, 2000.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and
for the City of Monticello, Minnesota, that the business subsidy criteria, contained in Exhibit A of
this resolution are hereby approved and adopted and shall be placed on file at the Office of the
Economic Development Authority, 505 Walnut Street, Suite 1, Monticello, Minnesota.
Dated
ATTEST:
It's Chair
It's Executive Director
.
.
.
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO, MINNESOTA
Business Subsidy Criteria
Public Hearing and Adoption the 31't day of August, 1999
Puhlic Hearing and Adoption of Amendments the 8th day of November, 2000
1. PURPOSE
1 :0 I The purpose of this document is to establish the Economic Development Authority's
criteria for granting of business subsidies, as defined in Minnesota Statutes 1161.993,
Subdivision 3, for private development. This criteria shall be used as a guide in processing
and reviewing applications requesting business subsidies.
1 :02 The criteria set forth in this document are guidelines only. The Economic Development
Authority reserves the right in its discretion to approve business subsidies that vary from
the criteria stated herein if the Economic Development Authority determines that the
subsidy nevertheless serves a public purpose. The Authority will file evidence of any
deviation from these criteria with the Department of Trade and Economic Development in
accordance with Minnesota Statues, Section 116.J.994, Subd. Z.
I :03 The Economic Development Authority may amend the business subsidy criteria at any
time. Amendments to these criteria are subject to public hearing requirements pursuant to
Minnesota Statutes, Sections 1161.993 through 1161.994.
2. STATUTORY LIMITATIONS
2:01 In accordance with the business Subsidy Criteria, Business Subsidy requests must comply
with applicable State Statutes. The Economic Development Authority ability to grant business
subsidies is governed by the limitations established in Minnesota Statutes
1161. 993 through 116J. 994.
3. PUBLIC POLlCY REQUIREMENT
3:01 All business subsidies must meet a public purpose (other than) in addition to increasing the tax
base. Job retention may only be used as a public purpose in cases where job loss is imminent
and demonstrable.
.
.
.
4.
4:01
4:02
4:03
4:04
r~DA Business Subsidy Criteria
BUSINESS SUBSIDY APPROVAL CRITERIA
All new projects approved by the Economic Development Authority should meet the
following minimum approval criteria. However, it should not be presumed that a project
meeting these eriteria will automatically be approved. Meeting these criteria creates no
contractual right on the part of any potential developer or the Economic Development
Authority.
The project must be in accord with the Comprehensive Plan and Zoning Ordinance, or
required changes to the plan and ordinances must be under active consideration by the
City at the time of approval.
Prior to approval of a business subsidies financing plan and when deemed appropriate by
the Economic Development Authority, the developer shall provide any required market
and financial feasibility studies, appraisals, soil boring information provided to private
lenders for the project, and other information or data as requested.
A recipient of a business subsidy must make a commitment to continue operations at the
site where the subsidy is used fl)f at least five years after the benefit date.
4:05 (Recipients of any business subsidy will be required to meet wage and job goals determined
by the Economic Development Authority on a case-by-case basis, giving consideration to
the nature of the development, the purpose of the subsidy, local economic conditions, and
situational circumstances.)
The Economic Dcvelopmcnt Authority may determine after a public hearing that job
creation or retention is not a goal ofthe subsidy. In those cases, thc recipient must instead
meet at least one of thc following minimum requircments (in addition to all other criteria
in this document other than those relating to jobs and minimum wages):
(1) The proposed subsidy must accomplish removal, rchabilitation or
rcdevclopment of "blightcd arcas" as defined in Minnesota Statues, Scction
469.002, Subd.ll, or must constitute a cost of correction conditions that
allow designation of redevelopment districts under Minnesota Statucs,
Sections 469.174 to 469.179; or
(2) The proposed subsidy must result in improvements to public infastrueture
or public facilitics, including without limitations, sewers storm sewers,
streets, parks, rccreational facilities, and other City faeilitics; or
(3)
The proposed subsidy must remove physical impcdiments to developmcnt
of land, ineluding without limitation poor soils, bedrock conditions, steep
slopes, or similar gcotechnical problems.
DAWNIWORD/POLlCIES 10/30/00
2
.
.
..
FDA Business Subsidy Criteria
4:06 For any business subsidy that docs not meet the requirements of Section 4:05, the
recipient must create or retain .jobs as determined by the Economic Developmcnt
Authority, as must meet the minimum wage thresholds, described in Section 5:03, Grcatcr
Monticello Entcrprise Fund Guidclincs, l.(b) (whethcr or not the source of the subsidy is
tax incrcment financing).
5. GREATER MONTICELLO ENTERPRISE FUND PROJECT EVALUATION CRITERIA
5:0 I The L':conomic Development Authority will utilize the Greater Monticello Enterprise fund
to support the community's long-term economic goals.
5:02 Each Greater Monticello l':nterprise Fund subsidy will be analyzed and evaluated by the
Economic Development authority. Each project shall be measured against the general
criteria in Sections I through 4 and the specific criteria in this Section 5 applicable to the
Greater Monticello Enterprise Fund subsidies.
5 :03 Following are the evaluation criteria that will be used by the Economic Development
Authority:
DAWNIWORD/POLlCIES 10/30/00
3
EDA Business Subsidy Criteria
GREATER MONTICELLO ENTERPRISE FUND GUIDELINES
.
CITY OF MONTICELLO
505 W ALN1JT STREET, SUITE #1
MONTICELLO, MINNESOTA 55362
(763) 271-3208
INTRODUCTION
The purpose of the Greater Monticello Enterprise Fund (GMEF) is to encourage economic
development by supplementing conventional financing sources available to existing and new
businesses. Through this program administered by the Economic Development Authority and
participating lending institution(s), loans are made to businesses to help them meet a portion of their
financing needs. All loans must serve a public purpose hy complying with four or more of the criteria
noted in the next section. In all cases, it is mandatory that criteria #1 be satisfied, which requires the
creation of new jobs. It is the responsibility of the EDA to assure that loans meet the public purpose
standard and comply with all other GMEF policies as defined in this document. Along with
estahlishing the definition ofpuhlic purpose, this document is designed to outline the process involved
in ohtaining GMEF financing.
DEFINITION OF PUBLIC PURPOSE
1. To provide loans for credit worthy businesses that create new jobs.
.
(a)
One joh is equivalent to a total of 37.5 hours per week.
(b) At least 90% of the johs (to pay a rate equal to or greater than) created must pay a
wage of the higher of $9.00 per hour, or at least 160% of the federal minimum wage,
exclusive of benefits, for individuals over the age of 20 during the term of the
assistance. Annual written reports are required until termination date.
Failure to meet the joh and wage Icvel goals require partial or full repayment of
the assistance with interest.
2. To provide loans for credit worthy businesses that would increase the community tax base.
3. To assist new or existing industrial or commercial husinesses to improve or expand their
operations. Considerations for loans shall take into account factors including, hut not lilnited
to, the nature and extent of the business, the product or service involved, the present availability
of the product or service within the city of Monticello, the compatihility of the proposed
business as it relates to the comprehensive plan and existing zoning policies, and the potential
for adverse environmental efl'ects of the husiness, ifany.
4. To provide loans to be used as a secondary source of financing that is intended to supplement
conventional financing (bank financing).
.
5.
To provide loans in situations in which a funding gap exists.
6. To provide funds for economic development that could be used to assist in obtaining other
funds such as Small Business Administration loans, fedcral and state grants, etc.
DAWNIWORD/POLlCIES 10/30100
4
.
.
.
1.
EDA Business Subsidy Criteria
TilE GREATER MONTICELLO ENTERPRISES
REVOLVING LOAN FUND POLICIES
BUSINESS ELlGlBII JTY
*
I ndustrial businesses
Non-competitive commercial businesses which enhance the community
Businesses located within the city of Monticello
Credit worthy existing businesses
Non-credit worthy start-up husinesses with worthy l'easibility studies (Deny all
historical non-credit worthy businesses)
$10,000 loan per each job created, or $5,000 per every $20,000 increase in property
market valuation, or $5,000 per every $20,000 increase in personal property used for
business purposes, whichever is higher.
*
*
*
*
*
II. FINANCING METHOD
*
COMPANION
DlRI.:CT I DAN -
Example: Equity 20%, RLF 30%, and bank 50%. (All
such loans may be subordinated to the primary lender(s) if
requested by the primary lcnder(s). The RLF loan is
leveraged and the lower interest rate of the RLF lowers
the effective interest rate on the entire project.)
*
P ARTICIP A nON LOAN - RLF huys a portion ofthe loan (the RLF is not in a
subordinate position, no collateral is required by the R LF,
and the loan provides a lower interest rate).
*
GUARANTEE LOANS - RLF guarantees a portion of the bank loan. (Personal and
real estate guarantees handled separately.)
III. USE OF PROCEEDS
*
*
*
Real property acquisition and development
Real property rehabilitation (expansion or improvements)
Machinery and equipment
IV. TERMS AND CONDrrlONS
*
LOAN SIZI': -
Minimum of$5,000 and maximum not to exceed 50% of the
remaining revolving loan fund balance; for example, if the
remaining revolving loan fund balance is $50,000, the maximum
loan issuance is $25,000.
*
LEVeRAGING -
Minimum 60% private/public non-GMEF
Maximum 3011<) puhlic (GMEF)
DAWNIWORD/POLlCIES 10/30100
5
.
.
.
EDA Business Subsidy Criteria
Minimum 10% equity FDA loan
*
LOAN TERM - Personal property term not to exceed life of equipment (generally
5-7 years). Real estate property maximum of 5-year maturity
amortized up to 30 years. Balloon payment at 5 years.
*
INTEREST RATE - Fixed rate not less than 2(1<) below Minneapolis prime rate. Prime
rate per National Bank of Minneapolis on date of EDA loan
approval.
*
LOAN FEE - Minimum fee of $200 but not to exceed 1.5% of the total loan
project.* Fees are to be documented and no duplication offces
between the lending institution and the RLF. Loan fee may be
incorporated into project cost. EDA retains the right to reduce or
waive loan fee or portion of loan fee.
*Fee to be paid by applicant to the EDA within 5 working
days after City Council approval of GMEF loan.
Nonrefundable.
*
PREPA YMENT
POLICY -
No penalty for prepayment.
*
DEFERRAL OF
PAYMENTS -
1.
Approval of the FDA membership by majority vote.
2. Extend the balloon if unable to refinance, verification
letter from two lending institutions subject to Board
approval.
*
LATe PAYMENT
POLICY
failure to pay principal or interest when due may
result in the loan being immediately called.
*
INTEREST
LIMITATION ON
GUARANTEl.:!)
LOANS-
Subject to security and/or reviewal by EDA.
*
ASSUMABILITY
OF LOAN-
None.
*
BUSINESS EQUITY
REQUIREMENTS -
Subject to type of loan; Board of Directors will determine
case by case, analysis under normal lending guidelines.
DAWN/WORD/POLlCIES 10/30/00
6
.
.
.
*
COLLATERAL-
*
NON-PERFORMANCE -
*
NON-PERfORMANCE
EXTENSION -
*
LEGAL FEE -
FDA Business Subsidy Criteria
*
*
Liens on real property in project (mortgage deed).
Liens on real property in business (mortgage
deed).
Liens on real property held personally (subject to
Board of Directors - homestead exempt).
Machinery and equipment liens (except equipment
eXell1pt from bankruptcy).
Personal and/or corporate guarantees (requires
unlimited personal guarantees).
*
*
*
An approved GMEF loan shall be null and void if funds
are not drawn upon or disbursed within 180 days from
date of FDA approval.
The 180-day non-performance date can be extended up to
an additional I20 days.
I. A written request is reeeived 30 days prior to
expiration of the ISO-day non-performance date.
2.
Approval of the FDA membership by majority
vote.
Responsibility of the (i-MEF applicant.
The Greater Monticello Enterprise Fund is operated as an equal opportunity program. All applicants
shall have equal access to GMEF funds regardless of race, sex, age, marital status, or other personal
characteristics.
DAWNIWORD/POLlCIES 10/30/00
7
.
.
.
EDA Business Subsidy Criteria
ORGANIZA TION
The Greater Monticello Enterprise Fund is administered by the City of Monticello Economic
Development Authority (EDA), which is a seven-member board consisting of two Council members
and fivc appointed members. EDA members are appointed by the Mayor and confirmed by the City
Council. Formal meetings are held on a quarterly basis. Please see the by-laws of the EDA for more
information on the structure of thc organization that administers the Greater Montieello Enterprise
Fund.
PARTICIPATING LENDING INSTITUTION(S)
1. Participating lending institutions(s) shall be determincd by the GMEF applicant.
2. Participating lending institution(s) shall cooperate with the l:T)A and assist in carrying out the
policies of the GMEF as approved by the City Council.
3. Participating lending institution(s) shall analyze the formal application and indicate to thc EDA
the level at which the lending institution wi 11 participate in the finance package.
LOAN APPLICATION/ADMINISTRATIVE PROCEDURES
The EDA desires to make the GMEF loan application process as simple as possible. I Iowever, certain
procedures must be followed prior to EDA consideration of a loan requcst. Information regarding the
program and procedurcs for obtaining a loan arc as follows:
City Staff Dutics:
The Economic Development Director, working in conjunction with the Assistant City Administrator,
shall carry out GMEF operating procedures as approved by thc EDA and Council. Staff is responsible
for assisting busincsses in the loan application process and will work closely with applicants in
developing the necessary information.
Application Process:
1. Applicant shall complete a preliminary loan application. Staff will review application for
consistency with the policies set forth in the Grcater Monticello Fund Guidelines. Staff
consideration of thc preliminary loan application should take approximately one week.
Stall will ask applicant to contact a lending institution regarding financing needs and indicate to
applicant that further action by thc EDA on the potential loan will requirc indication of support
fr0l11 a lending institution.
2.
If applicant gains initial support from lending institution and if the prcliminary loan application
is approved, applicant is then asked to complete a formal application. If thc preliminary loan
application is not approved by stall, the applicant may requcst that the FDA consider approval
of the preliminary application at the ncxt regularly scheduled meeting of the EDA.
DAWNIWORD/POLlCIES 10/30/00
8
.
.
.
EDA Business Subsidy Criteria
"
-) .
If the preliminary loan application is approved, applicant shall complete a limna] application.
Formal application shall include a busincss plan which will includc its management structure,
market analysis, and financial statement. Like documentation necessary l(n obtaining the bank
loan associated with the proposal is acceptable. Attached with each J(mna] application is a
written release of information executed by the loan applicant.
4. City staff will meet with applicant and other participating ]ender(s) to refine thc plan for
financing the proposed enterprise.
5. City staff shall analyze thc formal application and financial statements containcd therein to
determine if the proposed business and finance plan is viable. StaJf may, at its discretion,
accept the findings of a banking institution regarding applicant credit and financial viability of
the project. After analysis is complete, City stair shall submit a written recommendation to the
EDA. A decision regarding the application shall be made by the EDA within 60 days of the
submittal of a completed f(lfInal application.
6. The EDA shall have authority to approvc or deny loans; however, within 21 days of ED A
approval. the City Council may reverse a decision by the EDA to approve a loan if it is
determined by Council that such loan was issued in violation of GMEF guidelines.
7.
Prior to issuance of an approved loan, the City Attorney shall review and/or prepare all
contracts, legal documents, and intercreditor agreements. After such review is complete, the
City shall issue said loan.
ORIGINAL REVOLVING LOAN FUNDING
"LETTER OF CREDIT" FROM MONTICELLO CITY COUNCIL - $200,000
SOURCE - City Liquor Store Fund
City shall transfer needed loan amount from existing accounts at such time that individual loans arc
approved. Revenue created through this program shall be under the control of the EDA and shall not
be transferred to City funds unless the City Council determines that reserves generated are not
necessary for the successful operation of the Authority. lfsuch is the case, such funds must be
transferred to the debt service funds of the City to he used solely to reduce tax levies for bonded
indebtedness of the City (see Section 5 B of the ordinance establishing the Monticello EDA).
REPORTING
1. Staff shall submit quarterly summaries and/or annual rcport detailing the status of the
Monticello Enterprise Fund.
FUND GUIDELINES MODIFICATION
I.
At a minimum, the EDA shall review the Fund Guidelines on an annual basis. No changes to
the GMEF guidelines shall be instituted without prior approval of the City Council.
DAWN/WORD/POLICIES 10/30/00
9
FDA Business Subsidy Criteria
LOAN ADMINISTRATION
.
City staff shall service City loan, shall monitor City position with regard to the loan, and shall
assure City compliance with intercreditor agreement.
All loan documents shall include an interereditor agreement which must include the following:
A. Definition of loan default, agreements regarding notification of default.
B. A groemen ts between lendi n g insti tuti on and C it y regarding rcproduct; on of pert in en t
information regarding the loan.
1.
2.
3. All loan documentation shall include agreements between borrower and lenders regarding
release of privacy regarding the status of the loan.
.
.
10
DAWNIWORD/POLlCIES 10/30/00
.
.
Under the GMEF Guidelines use of proceeds for real property acquisition and development,
real property rehabilitation (expansion or improvements) and machinery and equipment. The
following commentary is intended to assist developers with those costs typically considered
eligible:
Real Propertv ACQuisition and Imorovement Costs
Land Acquisition
Building Permit Fees
Building materials
Construction labor
Landscaping
Grading
Curbing/Parking Lot
Engineer/Design Inspection Fees
Architect Fees
Soil borings
Appraisal .Fees
Legal Fees
Environmental Study
Recording Fees
Title Insurance
Machinerv and EQuipment Costs
Personal property used as an integral part of the manufacturing or commercial business, with a
useful life of at least three years. Acquisition costs would include freight and sales taxes paid.
As a general rule, office equipment would not qualify.
.
.
EDA Agenda - 11/8/00
6.
Executive Director's Report
.
Twin City Die Castings Company - I met Doug and Steve Harmon at the Monticello facility on
September 29 to see inside of the manufacturing facility and get serial numbers for the 2 die cast
machines and 2 melt furnaces in order to release the Letter of Credit associated with the GMEF
loan. It is there hope to start casting zinc the week of October 23. They were excited about
having received approval as a supplier for General Motors. You will note Steve Harmon and Jay
Ellers are panelist at a session (Bringing Metro Growth to Rural Minnesota) at the Annual
Minnesota Development Conference, November 2 and 3. Steve, Doug, and Maggie Olson were
at the IDC Banquet and enjoyed it. I'll be working with Maggie on an open house of the facility.
We have targeted April. Having heard the frustrations in the development process, I asked them
frankly about their thoughts. Both agreed to put things behind them. However, these were their
comments: They like Monticello as a location: good work force - (looking for the cream ofthe
crop employees). Relative to frustrations: 2/3 State of Minnesota - Strict building codes
compared to other states. IRB's (legal firm). 1/3 divided between their company/architect and
building official (interpretation of the codes). They are excited about their facility; however, if
had to do over again, they would get building permits prior to purchasing land. They were
excited and in a hurry. Lastly, with the increased building costs from $5.4 million to $7 million
and the IRB's have a cap of$10 million. Their future second expansion was projected at another
$5 million and they were thinking of a third expansion. The difficulty is a lender won't be in
second position behind the IRBs.
Request from Wright County Partnership to become board member. Willing to change meeting
date.
Prospects
300,000 sq ft office/production facility. Relocation/expansion from St. Cloud. Currently employ
800, additional 200. $40 to $50 million capital investment in land, building and equipment. RFP
to Julien 1. Studley, Inc., Chicago, IL., priority mail October 11. Message 10-17. Company
name Bankers Systems Incorporated.
100,000 sq ft, three-story office headquarter - Monticello continues to be in the running along
with St. Cloud. Company name unknown. 10 acre site south ofI-94. 400 people. Message 10-
17.
25,000-30,000 sq ft facility - Likes Monticello. May be getting cold feet. Worked with Tricon,
Inc. Was invited to banquet.
Tricon, Inc. - Tom Feaski attended IDC Banquet. Purchased Value Plus building after viewing
site for the above manufacturer. Tom and his wife have purchased a house in Monticello. Have a
. meeting with him this afternoon about a different company. Invite Tom to IDC meeting.
I
.
.
.
EDA Agenda - 11/8/00
Profile Powder Coating Company - Invited to banquet. Kind of cool.
100,000 sq ft manufacturing oflouvers. Currently 70 employees, additional 30. Average Wage
$12 per hour plus benefits. 14-16 acres ofland. Currently have 58,000 sq ft in Delano, no room
to expand. Response date October 17. Heidi Peper.
10,000 sq ft building - Coffee bean roasting. Meeting with Tricon and company, October 13.
Met with Tom, Red Wing Foods owners. May build larger for lease. 7 full-time $12 per hour
average excluding benefits.
5,000 sq ft office/warehousing for company specializing in in-store advertising. Looking for
existing or new construction. Currently, six employees, anticipate adding 4-5 more. Average
wage $30,000-$40,000 includes benefits. Same as last month. Responded a second time.
Turkey processing facility - Cargill is looking to establish a bag bird processing facility. 125,000-
150,000 sq ft on 25-30 acres. 275-350 permanent jobs in two years. Did not respond. The
Monticello Waster Water Treatment Plant would immediately need to expand because of the
amount of water usage and BOD discharge.
6,000-7,000 sq ft office space - This is a manufacturing and distribution company. New space for
sales and marketing. Purchase oflease, prefer lease. Want January 2001. 28 jobs and 5-10 more
in six months. Average wage $9 per hour. Willing to increase. Responded. Working with
Tricon and Silver Creek Development.
100,000 sq ft Fridley machine shop (sheet metal parts) 4,000 sq ft office. Lead from brochure.
Builder Warren Hokanson called. 150 employees. Relocation from Fridley. 15-20 acres. Invited
out or us in.
4,000 sq ft start-up machine shop. Looking to lease space.
200,000 sq ft non-production facility. Collier International, Toronto. Questions: is land privately
or publicly owned? How far from St. Cloud? Labor rates? Population? Appeared to be cool
after City under negotiation to acquire land.
EDA
DMRF - As you recall the EDA approved funding for the Kevin Heaton at the August 2000
meeting. The amount approved was 50% of rehabilitation costs for the front facade and signage
or up to $11,000. DAT recommendations: First and least complicated was to simply repaint
brick. Second, chemically remove the existing paint on the brick, repair damaged brick and
retuckpoint the mortar joints where necessary. Third, if the historic brick is so damaged as to be
unrepairable, the front ofthe building will be ref aced with new brick. On October 17,2000, Mr.
2
.
.
.
EDA Agenda - 11/8/00
Heaton informed me of his plans to stucco the front facade at a cost of$3,500. This alternative
was agreeable with his new tenants, Handy Enterprise, Inc. He was advised to call Pam
Campbell, DAT Chair, which he did. A building permit has been issued as there was no grounds
to deny a permit if Heaton was not interested in the EDA grant.
DMRF - At the EDA meeting in August, you also approved grant money for Bruce Hamond,
"The Sweetest Things on Broadway" and a loan in the amount of $10,644 at 5.5% fixed interest
rate, 10 year amortization and balloon payment in 3 years. The EDA loan in second position
behind the lender. I've left messages with Bruce that he needed to take the lead role with the
lender. On October 27, Bruce asked if the EDA loan could be in first position and the only loan if
the lender (Kevin Doty) said OK and based on a positive credit report from the lender. In order
to do so, the EDA would need to consider amending their DMRF Guidelines, Rehabilitation
Loan: The rehabilitation loan will be in a subordinated position to the lender. The City
Administrator and Executive Director do not recommend this amendment because public dollars
(loans) are not intended to take away the role oflenders (private dollars). Even if Doty says OK,
the EDA still must consider the position of all lending institutions. More later.
EDA Invoice - Attached is an invoice from Kennedy & Graven for the preparation ofloan closing
documents for the DMRF Loan. This was authorized in anticipation of the loan closing for the
Hamond building. This is a one time expense for the EDA.
3
. DMRF GUIDELINES
FACADE GRANTS
The EDA may provide matching grants in the following amounts:
*
Up to $2,500 for eligible improvements to the front facade and signage.
*
Up to $2,500 for eligible improvements to promote improvements to the rear
sections of the buildings.
*
Up to $2,500 for eligible improvements to the side facade (if applicable).
To be eligible for grant funds, projects must meet the following criteria:
.
*
Improvements must comply with applicable design guidelines and all codes and
ordinances including building permits and inspections.
*
The grant will match private investment up to the stated limit.
*
Grant funds will be provided after completion of the improvements.
*
Applicants will provide the EDA with documentation ofthe actual cost of the
improvements.
Meeting the eligibility criteria does not entitle an applicant to funding. The distribution of grant
funds is the sole decision of the EDA.
REHABILITATION LOAN
The EDA may provide loans for the rehabilitation of existing buildings. The maximum loan
amount is the lesser of25% of total cost of improvements or $20,000. To be eligible for
rehabilitation loans, projects must meet the following criteria:
*
*
.
*
Improvements must comply with applicable design guidelines and all codes and
ordinances including building permits and guidelines.
Applicants must provide proof of financing for costs not funded by the grant.
Loan amortization schedule not exceed ten (10) years, balloon payment in five (5)
years.
2
. DMRF GUIDELINES
FACADE GRANTS
The EDA may provide matching grants in the following amounts:
*
Up to $2,500 for eligible improvements to the front facade and signage.
*
Up to $2,500 for eligible improvements to promote improvements to the rear
sections of the buildings.
*
Up to $2,500 for eligible improvements to the side facade (if applicable).
To be eligible for grant funds, projects must meet the following criteria:
.
*
Improvements must comply with applicable design guidelines and all codes and
ordinances including building permits and inspections.
*
The grant will match private investment up to the stated limit.
*
Grant funds will be provided after completion of the improvements.
*
Applicants will provide the EDA with documentation of the actual cost of the
improvements.
Meeting the eligibility criteria does not entitle an applicant to funding. The distribution of grant
funds is the sole decision of the EDA.
REHABILIT ATION LOAN
The EDA may provide loans for the rehabilitation of existing buildings. The maximum loan
amount is the lesser of25% of total cost of improvements or $20,000. To be eligible for
rehabilitation loans, projects must meet the following criteria:
*
*
*
.
Improvements must comply with applicable design guidelines and all codes and
ordinances including building permits and guidelines.
Applicants must provide proof of financing for costs not funded by the grant.
Loan amortization schedule not exceed ten (10) years, balloon payment in five (5)
years.
2
eD:MRF GUIDELINES
The interest rate on the loan will be two percent (2%) below the Prime Rate. The
EOA may reduce the interest rate to encourage the reuse of a currently vacant
building, the retention of an existing business, or the creation of a new business.
* The rehabilitation loan will be in a subordinated position to the lender.
*
FEE REIMBURSEMENT
The EDA may grant reimbursement of City fees associated with undertaking improvement and
revitalization projects in the downtown area. The amount of the reimbursement will be the
equivalent often percent (10%) of the total cost of the improvements up to a maximum of$500.
Fees eligible for reimbursement include building permits, other city inspections, and land use
ordinances. To be eligible for fee reimbursement, projects must meet the following criteria:
*
Projects must comply with applicable design guidelines and all codes and
ordinances including building permits and inspections.
*
Reimbursement will be made after completion of the improvements.
*
Reimbursement will be based on documentation of actual improvement costs and
fees paid.
.
MAXllvfUM FINANCIAL ASSISTANCE
The maximum amount of financial assistance available to each rehabilitation property is an amount
not to exceed $25,000.
NON-PERFORMANCE
Approved DMRF shall be null and void iffunds are not drawn or disbursed within 270 days from
date of ED A approval.
ORGANIZATION
The Downtown Monticello Revitalization Fund is administered by the City of Monticello
Economic Development Authority (EDA), which is a seven-member board consisting of two
Council members and five appointed members. EDA members are appointed by the Mayor and
confirmed by the City Council. Formal meetings are held on a quarterly basis. Please see the
by-laws of the EDA for more information on the structure ofthe organization that administers the
Downtown Monticello Revitalization Fund (DMRF).
.
3
e
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
(612) 337-9300
October 12, 2000
Statement No. 34939
Monticello EDA
Ollie Koropchak
505 Walnut Street
Suite 1
Monticello, MN 55362
Through September 30,2000
MN325-00008 Twin City Die and Casting GMEF Loan
MN325-00009 Revitalization Loan Fund Agreement
Expenses
. I declare, under penalty of law, that this
account, claim or demand is just and correct
~
Signature of Claiment
.
~~9
o ~
"2/<::)
0.00
200_00
4.19
Total Current Billing:
204.19
o 1E~{gn~{gr'!
OCT 1 6 2000 \
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
.
Monticello EDA
Ollie Koropchak
505 Walnut Street
Suite 1
Monticello, MN 55362
(612) 337-9300
41-1225694
October 12, 2000
Invoice # 34939
MN325-00008 Twin City Die and Casting GMEF Loan
For All Disbursements As Follows:
postage
Photocopies
.
.
Total Disbursements:
$
Total Services and Disbursements: $
0.99
3.20
4.19
4.19
.
Page: 2
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
Monticello EDA
Ollie Koropchak
September 30,2000
MN325-00009 Revitalization Loan Fund Agreement
Through September 30, 2000
For All Legal Services As Follows:
9/27/2000 DJG Draft model loan agreement
Total Services:
Hours
1.60
$
Total Services and Disbursements: $
.
.
Amount
200.00
200.00
200.00