EDA Agenda 04-25-2000
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AGENDA
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, April 25, 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.
ST AFF:
Treasurer Rick Wolfsteller, Executive Director Ollie Koropchak, and Recorder
Lori Kraemer.
GUEST:
Pam Campbell, DAT Chair.
1. Call to Order.
2. Consideration to approve the February 22,2000 EDA minutes.
3, Consideration of adding agenda items.
4.
Consideration to hear an update relative to the design concepts from Claybaugh
Preservation Architecture, Inc. for three building facade improvements.
5.
Consideration to adopt a resolution ratifYing the agreement to extend the Non-
Performance Date for GMEF Loan No. 017.
6. Consideration to review for approval the preliminary loan application from J. J. Company,
Inc. (dba Profile Powder Coating, Inc.).
7. Executive Director's Report.
8. Other Business.
9. Adjournment.
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MINUTES
ANNUAL MEETING
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, February 22, 2000 - 6:00 p.m.
City Hall
Members Present:
Chair Ron Hoglund, Vice Chair Barb Schwientek, Roger Carlson and Bill
Demeules
Members Absent:
Darrin Labr, Ken Maus & Clint Herbst
Staff Present:
Treasurer Rick Wolfsteller and Executive Director Ollie Koropchak.
Guest:
Pam Campbell, DAT Chairperson
I. Call to Order.
Chair Ron Hoglund called the meeting to order at 6:00 p.m.
2.
Consideration to approve the Seotember 28. 1999 EDA minutes.
A MOTION WAS MADE BY BARB SCHWIENTEK AND SECONDED BY BILL
DEMEULES TO APPROVE THE SEPTEMBER 28,1999 EDA MINUTES. Motion
carried.
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Consideration of addin~ agenda items.
None
4.
Consideration to hear an uodate relative to the design concepts from Clavbaugh
Preservation Architecture. Inc. for three building facade improvements.
Pam Campbell, DA T Chairperson, presented an update. She stated they had a hard time
getting people interested, however they did get a response from three property owners
who are interested in facade improvements. Kevin & Cindy Heaton, Preferred Title;
Bruce & Cindy Hammond, (former Pet's Companion building); and Dennis & Myrna
Anderson who plan to purchase the former Senior Citizen building for possible upscaled
office space, conference center, or maybe expand their laundry mat. Mr. Bob Claybaugh
will be in town to discuss the improvements and meet with the property owners on design
concepts and budgets on Thursday, March 9, 2000. Campbell noted she advised the
property owners that they were not under any obligation, however they will need to meet
DA T approval of design criteria to get the matching grants, whether they go through Mr.
Claybaugh or elsewhere. Campbell noted they will have a much better idea as far as a
timetable after the March 9 meeting. No action was required by the EDA.
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EDA Mlnutes- 2/22/00
5.
Consideration to elect 2000 EDA officers.
Ollie Koropchak advised the members that in order to comply with EOA Ordinance
Amendment No. 172, Section 2-3-2: The Authority shall annually elect a president, vice
president, treasurer, assistant treasurer, and secretary.
In order to comply with EDA Ordinance Amendment No. 172, Section 2-3-1: Creation:
(C) Thereafter the initial appointment, all commissioners shall be appointed for six-year
terms, except that any person appointed to fill a vacancy occurring prior to the expiration
of the term which his/her predecessor has been appointed shall be appointed only for the
remainder of such term.
Chair Ron Hoglund nominated Bill Oemeules for president; Barb Schwientek, vice
president; Rick Wolfsteller, Treasurer; Ken Maus, Assistant Treasurer; and Ollie
Koropchak, Secretary. Roger Carlson seconded the nominations. The nominations were
approved unanimously.
6.
Consideration to review and accept the year-end EDA Financial Statements. Activity
Report. and proposed 2000 Budget.
Ollie Koropchak provided the report advising that in order to comply with EDA
Ordinance Amendment No. 172, Section 2-3-6: The Authority shall prepare an annual
budget projecting anticipated expenses and sources of revenue. And B: The Authority
shall prepare an annual report describing its activities and providing an accurate statement
of its financial condition. Koropchak stated the report shall be submitted to the City
Council by March 1 of each year. Year-end statements, proposed budget and activity
report were provided. Koropchak made a correction to the 2000 Cash Flow under
appropriations, from SCERG to GMEF.
A MOTION WAS MADE BY BILL DEMEULES AND SECONDED BY BARB
SCHWIENTEK TO ACCEPT THE YEAR-END FINANCIAL STATEMENT AND
REPORT FOR SUBMISSION TO THE CITY COUNCIL ON FEBRUARY 28,2000.
Motion carried.
7. Consideration to review year-end balances of the GMEF. DMRF. UDAG. and ERG
Funds.
Ollie Koropchak provided the report providing the members with a review of the year-
end balances for the GMEF, DMRF, UDAG and SCREG funds. No action necessary by
the EDA.
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EDA Minutes - 2/22/00
8.
Consideration to review the GMEF Guidelines for possible amendments.
Ollie Koropchak presented the report advising the EDA of the need to review the Fund
Guidelines on an annual basis, and no changes to the GMEF Guidelines can be instituted
without prior approval of the Council. A copy of the guidelines was provided.
Koropchak then updated the members on a Lender's Breakfast that was recently held and
asked Ron Hoglund to let the members know some of the suggestions that were brought
up at this meeting. The lenders suggested increasing the GMEF loan size to $200,000 for
market purposes only.
A MOTION WAS MADE BY BARB SCHWIENTEK AND SECONDED BY BILL
DEMEULES OF NO NEED TO AMEND THE GMEF GUIDELINES, EDA BUSINESS
SUBSIDY CRITERIA. Motion carried.
A MOTION WAS MADE BY BARB SCHWIENTEK AND SECONDED BY BILL
DEMEULES OF SUPPORT TO MARKET THE GMEF LOAN SIZE AS A
MAXIMUM AMOUNT OF $200,000. Motion carried.
9.
Consideration to ratify the Target Area of the DMRF Guidelines and review for other
possible amendments.
Ollie Koropchak provided the report advising the members the need to review the Fund
Guidelines on an annual basis and that no changes to the DMRF guidelines shall be
instituted without prior approval of the City Council.
The EDA is requested to ratify an earlier poll of members agreeing to enlarge the Target
Area, page 1, of the DMRF Guidelines. As preliminary discussions began with the
potential purchase of the current Senior Citizen Lounge on Cedar Street by Dennis
Anderson trom the City, DAT and the MCP began marketing the DMRF. Knowing the
target area description did not include the current senior lounge, some members of the
EDA were polled by telephone or in person. At least 4 members saw no problem did
amending the guidelines, one member opposed.
As indicated earlier by Pam Campbell, DA T Chair, Dennis Anderson is with the
understanding the guidelines will be ratified to include all of Block 53 or at least the
senior building property, and is one of the three buildings on-line for design concept
drawings from Claybaugh. Additionally, the EDA was advised of the Lender's
suggestion to increase the matching facade grant per side from $2,500 to $5,000. Their
rationale: $2,500 small amount compared to owner's investment.
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EDA Minutes - 2/22/00
The EDA might also consider including all of Block 34 in the Target Area. The Council
will need to approve amending the DMRF Guidelines.
A MOTION WAS MADE BY BILL DEMEULES AND SECONDED BY BARB
SCHWIENTEK TO RATIFY AMENDING THE TARGET AREA OF THE DMRF
GUIDELINES TO INCLUDE ALL OB LOCK 34 AND ALL OF BLOCK 53. Motion
carried.
A MOTION WAS MADE BY BARB SCHWIENTEK AND SECONDED BY ROGER
CARLSON TO TABLE ANY ACTION RELATIVE TO INCREASE OF THE
MA TCHING FACADE GRANT UNTIL AFTER THE ARCHITECT MEETS WITH
THE THREE PROPERTY OWNERS ON MARCH 9, 2000. Motion carried.
Executive Director's Report.
Ollie Koropchak provided her report and shared an e-mail she received from Towell Real
Estate noting an interest in larger users looking to move out of the metro, and also
wanting information from the City regarding what we have to offer. Koropchak also
advised the members of a possible interest by Intercomp in locating in Monticello; Profile
Powder Coating, Inc. which has a facility in Rogers doing metal finishing has expressed
interest to develop a wood finishing business here; Sunny Fresh Recognition on March 9;
Bus Tour/Golf Outing on June 14; TCDC project moving ahead; and negotiations
continue between the City and Chadwick/Goeman for the industrial land swap. Rick
Wolfsteller advised that right now Chadwick is working on the first draft of the
agreement and proposing to set up parameters for whenever the need arises, not
necessarily to take action immediately. Could be possibly 3 to 4 months before proposals
are done.
11.
Other Business.
None
12.
Adjournment.
RON HOGLUND CALLED THE MEETING TO CLOSE AT 7:00 P.M.
Lori Kraemer, Recording Secretary
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EDA Agenda - 4/25/00
4.
Consideration to hear an update relative to the desis!D concents from Clavbaueh
Preservation Architecture. Inc. for three buildine facade improvements.
A. Reference and Backeround:
Pam Campbell, DAT Chair, will update the EDA commissioners on the progress for
preparation of the facade design concepts for the Companion Pets, Preferred Title, and
previous Senior Center buildings.
You will note, enclosed is a copy of an invoice from Claybaugh for his one-day visit and
observation of the three designated buildings. Additional invoices will follow for
preparation of concepts, etc. The EDA previously authorized a not-to-exceed amount of
$3,000 for the concept drawings.
No action required by the BDA.
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~CLAYBAUGH PRESERVATION ARCHITECTURE INC
L... 361 W. Government St. Taylors Falls, Minnesota 55084 ("/ I/"n. (') \"I
ED f\ - yr" '-." '1
STATEMENT
CLIENT:
STATEMENT NO.: ONE
DATE:MARCIIIO,200
ECONOMIC DEVELOPMENT AUTHORITY
MONTICELLO CITY HALL
250 E. I3ROADW A Y, PO BOX 1147
MONTICELLO, MN 55362
PROJECT NO.:
200001
PROJECT NAME: MONTICELLO F Al;ADE DESIGNS
A IT: OLLIE KOROPCHAK, EXECUlWE DIRECTOR
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SERVICES
TOTAL
COMPENSATION
PREVIOUSL Y
BILLED
CURRENT
AMOUNT DUE
Site visit on March 9, 2000
Preparation I hr (g1 $90
On site 6 Ius @ $90
Travel 3 Ius @ $45
$90.00
$540.00
$135.00
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$765.00
SERVICES TOTAL
REIMBURSABLE EXPENSES
PREVIOUSL Y
DILLED
CURRENT
AMOUNT DUE
Mileage 140 mi @ $.325
$45.50
RE~URSAI3LEEXPENsESTarAL
$45.50
TOTAL AMOUNT DUE:
$810.50
Payment in rull is duc upon receipt or statement. Intercst or .67% pcr month may be charged on all balances remaining
unpaid 30 days rrom date or this statement
FILE:mcp-1
tel 651.465.7900 . fax 651.465.3505
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~CLAYBAUGH PRESERVATION ARCHITECTURE INC
L... 361 W. Government St. Taylors Falls, Minnesota 55084
STATEMENT
CLIENT:
STATEMENT NO.: TWO
DATE:APR 13,2000
ECONOMIC DEVELOPMENT AUTHORITY
MONTICELLO CITY HALL
250 E. BROADW ^ Y, PO BOX 1147
MONTICELLO, MN 55362
PROJECT NO.:
200001
A IT: OLLIE KOROPCHAK, EXECUTIVE DIRECTOR
PROJECT NAME: MONTICELLO F Al;ADE DESIGNS
SERVICES
TOTAL
COMPENSATION
PREVIOUSL Y
BILLED
CURRENT
AMOUNT DUE
Facrade designs for 212 and 113 W. Broadway
4 hrs@ $90; 16 Ius @ $55
SER VICES TOTAL
$765.00
$765.00
$1,240.00
$1,240.00
REIMBURSABLE EXPENSES
PREVIOUSL Y
BILLED
CURRENT
AMOUNT DUE
Mileage 140 mi @ $.325
$45.50
REIMI3URSABLE EXPENSES TOTAL
TOTAL AMOUNT DUE;
$1,240.00
Payment in full is due upon receipt of statement. Interest of .67% per month may be charged on all balances remaining
unpaid 30 days from date of this statement.
FILE:mcp-2
tel 651.465.7900 . fax 651.465.3505
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EDA Agenda - 4/25/00
5.
Consideration to adopt a resolution ratifvinf! the aereement to extend the Non-
Performance Date for GMEF Loan No. 017.
A. Reference and Backeround:
Via a polling, six of the seven EDA commissioners replied and agreed to extend the Non-
Performance Date from March 28,2000, to September 28,2000, for GMEF Loan No.
017. GMEF No. 017 was approved by the EDA for Twin City Die Castings Company on
September 28, 1999, in the amount of $100,000. The loan is for machinery and
equipment and shares a second position with the $500,000 Minnesota Investment Fund
and behind the $4.8 million Industrial Revenue Bond.
Attorney Bubul did not see extending the Non-Performance Date as setting a precedent
because of the involvement and complexity of the State and Bond dollars. Although the
die casting machines and CNC machines are on order, until delivery, there was no
collateral unless we proceeded with a temporary mortgage on the real estate.
Management agreed, this was not practical. Therefore, the reason to extend the
performance date. The EDA loan closing documents are prepared and have been
reviewed by TCDC and the State. The closing for the EDA and State loans are
anticipated to close upon delivery of the equipment. Invoice attached is for preparation of
the EDA loan closing documents which will be reimbursed by TCDC at time of closing.
For your information, the Bonds were closed on April 3 or 4; however, the Bond and
State closing documents appear to contradict one another as it relates to the disbursement
clause. This is in the process of being resolved. The City Council has approved the
Grant Agreement and the Loan Agreement for the $500,000.
B. Alternative Actions:
1. A motion to adopt a resolution ratifYing the agreement to extend the Non-
Performance Date for GMEF Loan No. 017.
2. A motion to deny adoption of a resolution ratifYing the agreement to extend the
Non-Performance Date for GMEF Loan No. 017.
3. A motion to table any action.
C. Recommendation:
It is the recommendation of the EDA Attorney that the Commissioners adopt a resolution
ratifYing their previous polling agreement. This more or less a housekeeping item, the
recommendation is Alternative No.1.
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ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO, MINNESOTA
Resolution No.
RESOLUTION RATIFYING THE AGREEMENT TO EXTEND
THE NONwPERFORMANCE DATE FOR
GMEF LOAN NO. 017.
WHEREAS, the Monticello Economic Development Authority ("Authority") approved
Greater Monticello Enterprise Fund (GMEF) Loan No. 017 on September 28, 1999, for Twin
City Die Castings Company (the "Applicant"); and
WHEREAS, the Authority approved the loan for machinery and equipment in the amount of
$100,000 at a fixed interest rate of6.25%; and
WHEREAS, the Applicant agreed to create 85 new jobs for the City of Monticello within two
years at wage goal of at least 90% of the jobs to pay a rate equal to or greater than 160% of the
Federal minimum wage, exclusive of benefits, for individuals over the age of 20 during the term of
. the assistance; and
WHEREAS, the Applicant agreed to construct an 36,000 square foot office/manufacturing
facility in Phase I with construction completed by September 1, 2000, and an addition consisting
of 16,000 square feet by June 1,2002; and
WHEREAS, the Authority Staff and Applicant had determined the need to extend the Non-
Performance Date from March 28,2000, to September 28,2000, for GMEF Loan No. 017; and
WHEREAS, the Authority via a polling on March 3, 2000, agreed to extend the Non-
Performance Date from March 28, 2000, to September 28,2000, for GMEF Loan No. 017;
NOW THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Monticello
Economic Development Authority as follows:
1. The Non-Performance Date of September 28, 2000, for GMEF Loan No. 017 is
approved.
2. The GMEF Loan No. 017 Criteria as approved September 28, 1999, is in no other way
modified and the amount of the loan and rate are not increased by this modification.
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3. Authority staff is authorized and directed to attach a copy of said resolution to the
approved loan criteria and to forward a copy to the Applicant.
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Approved by the Board of Commissioners of the Monticello Economic Development
Authority this 25th day of April, 2000.
EDA Chair
ATTEST:
Executive Director
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Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
(612) 337-9300
April 7, 2000
Statement No. 32553 ~ _ \ ~
ED\\- G fY\ E\=- ~ 0
Monticello EDA
Ollie Koropchak
505 Walnut Street
Suite 1
Monticello, MN 55362
Through March 31
MN325-00008 win City Die and Casting GMEF Loan
Expenses
727.67
22.33
Total Current Billing:
I declare, under penalty of law, that this
account, claim or demand is just and correct
and that no part of it has been paid.
Signature of Claiment
IC'~
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750.00
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APR 1 1 2COO
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Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
(612) 337-9300
41-1225694
April 7, 2000
Invoice # 32553
Monticello EDA
Ollie Koropchak
505 Walnut Street
Suite 1
Monticello, MN 55362
MN325-00008 Twin City Die and Casting GMEF Loan
Through March 31, 2000
For All Legal Services As Follows:
10/25/1999 DJG Draft revolving fund documents.
10/28/1999 PJC Review and draft loan agreement; meeting with D
Greensweig
10/28/1999 DJG Intraoffice conference with Peter Culp re revolving loan
documents.
11/2/1999 PJC Continue to draft and revise loan documents
11/3/1999 PJC Continue to revise loan agreements
11/4/1999 PJC Continue to draft and revise loan documents; intraoffice
conference with D Greensweig
11/17/1999 DJG Prepare loan documents
Total Services:
For All Disbursements As Follows:
Photocopies
Postage
Fax
Total Disbursements:
Hours Amount
2.70 233.66
4.20 212.03
0.70 60.58
0.50 25.24
0.90 45.43
1.10 55.53
1.10 95.20
$ 727.67
$
6.40
1.43
14.50
22.33
Total Services and Disbursements: $
750.00
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EDA Agenda w 4/25/00
6.
Consideration to review for approval the preliminary loan application from J. J.
Company. Inc. (dba Profile Powder Coatine. Inc.)
GMEF Loan Request:
$150,000 Machinery and Equipment.
Project Summary:
Profile Powder Coating, Inc. is a service company that specializes in providing metal
fabricators with a quality service at a competitive price. The service provided at the
Rogers facility is a metal powder coat finishing. The Rogers facility has been in operation
since 1989 and was started by Steve Dejong and his father. Steve has been the sole
proprietor the last five to six years. The proposed facility in Monticello will be a wood
powder coating process. Please refer to Exhibit B for a brief description of this new
process.
The real estate property consist of 3 .15 acres of land and the construction of a 30,000 sq
ft block office/manufacturing facility. The estimated market value of the property for
payable 2002 is $960,000.
Proposed Legal description: Lot 1, Block 1, Monticello Commerce Center 5th Addition.
The proposed expansion will create at least 30 new jobs for the City of Monticello, State,
and Region at an hourly wage of between $12 to $16 or higher excluding benefits.
REAL ESTATE
Uses of Funds
Land
Building
Soft Costs
TOTAL USES OF FUNDS
$ 110,250
$1,198,463
$ 17.000
$1,325,713
Sources of Funds
Bank Loan
SBA 504
TIF (Trunk Fees)(Land $11O,250payg)
Equity
TOTAL SOURCES OF FUNDS
$ 662,857
$ 503,286
$ 25,450
$ 107.120
$1,325,713
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EDA Agenda w 4/25/00
MACHINERY/EQUIPMENT
Uses of Funds
Paint Equipment
Wood Equipment
Office Equipment
TOTAL USE OF FUNDS
$ 610,000
$ 88,000
$ 52.000
$ 750,000
Sources of Funds
SBA 7A
State MIF
CMIF
GMEF
TOTAL SOURCES OF FUNDS
$ 50,000
$ 450,000
$ 100,000
$ 150.000
$ 750,000
GREATER MONTICELLO ENTERPRISE FUND GUIDELINES
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PUBLIC PURPOSE CRITERIA: Must comply with four or more of the criteria listed
below, criteria #1 being mandatory.
1.
Creates new jobs:
At least 30 new full-time jobs to the City of Monticello at an
average wage per hour of $14.00 without benefits (non-
owners) within two years.
2. Increases the community tax base: EMV increase of $960,000
Estimated annual tax increase $41,000.
3.
Factors:
To assist a new industrial business to expand their operations.
Other factors for consideration but not limited to: Nature of
business (manufacturing), present availability of service and
product (none), potential adverse environmental effects (none), and
compatibility to the comprehensive plan and zoning policy (yes).
4. Used as a secondary source to supplement conventional financing:
The GMEF will be the secondary source of funding to the lender, Security
State Bank, Albertville.
5.
Used as gap financing:
Used as gap financing (see Letter from Lender) and
as an incentive to encourage economic development.
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EDA Agenda - 4/25/00
6. Used to assist other funds: In addition to the lender, SBA programs 504 and
7 A, State and Regional funding.
GREATER MONTICELLO ENTERPRISE FUND POLICIES
I. BUSINESS ELIGIBILITY:
Industrial business: Yes.
Located within city limits: Yes, Zoned Il-A.
Credit worthy existing business:
Letter of Commitment and credit worthiness
forthcoming from lender.
$10,000 loan per each job created. $10,000 X 30 = $300,000.
$5,000 per every $20,000 increase in personal property used for business
purposes, whichever is higher. $5,000 X 48 = $240,000.
.
Recommendation: $150,000.
II.
FINANCING METHOD:
Companion Direct Loan:
AIl such loans may be subordinated to the primary
lender(s) if requested by the primary lender(s). The
GMEF is leverageq and the lower interest rate of the
GMEF lowers tqe effective interest rate on the entire
project.
Rec~~Ulfndation: The ~MEF may s"are ~ sf~ond posit.o" with tbe State
and ~egiQn behind the SBA on the l\'I~E. \
III. USES OF PROCEEDS:.
Machinery and equipment.
IV. TERMS AND CONDITIONS:
Loan Size:
Minimum of $5,000 an,d maximum opt tQ exceed 50% oft~e rentflining
GMEF ~al&nce. Req4~st: $150,000. Re~oq1mendation: $150,000
Remaining QMEF Bal&nce ~s of April 20; 2000: $515,000.
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EDA Agenda - 4/25/00
Please refer to the attached letter from Mr. Dejong relative to financing proposals and my
response, I did mention to Mr. Dejong the only thing I could offer additional was the
consideration to increase the GMEF from $100,000 to $150,000. No change or increase
of TIF.
Leveraging: Minimum 60% private/public non-GMEF. Maximum 30% GMEF.
Minimum 10% equity of GMEF loan,
Security State Bank
SBA 504
TIF
Equity
SBA 7 A
State
Region
GMEF
TOTAL
.
$ 662,857 (31.9%)
$ 503,286 (24.2%)
$ 25,450 ( 1.2%)
$ 107,120 (9.95%)($15,000)
$ 50,000 ( 2.4%)
$ 450,000 (21.67%)
$ 100,000 (4.8%)
$ 150,000 ( 7.2%) (20%)
$2,075,713(100%)
Loan Term: Personal property term not to exceed life of equipment (generally
5-7 years.)
Recommendation: No recommendation at this time.
Interest Rate: Fixed rate not less than 2% below Minneapolis prime rate, Prime
rate per National Bank (First Bank) of Minneapolis on date of ED A
loan approval.
Recommendation: No recommendation at this time.
Loan Fee:
Minimum fee of $200 but not to exceed 1,5% of the total loan
project. Paid by applicant to the EDA within five working days
after City Council approval of GMEF loan. Nonrefundable. Loan
fee may be incorporated into project cost. EDA retains the right to
reduce or waive loan fee or portion ofloan fee.
Recommendation: At least, the minimum fee of $200.
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Prepayment Policy: No penalty for prepayment.
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EDA Agenda - 4/25/00
Deferral of Payments: 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.
Interest limitation on guaranteed loans:
Not applicable.
Assumability ofloan: None.
Business equity requirements:
Subject to type ofloan~ Board of Directors
will determine case by case, analysis under
normal lending guidelines.
Collateral:
Machinery and equipment liens (except equipment exempt from
bankruptcy) and personal and/or corporate guarantees (requires
unlimited personal guarantees) as per the GMEF attorney.
Non-performance:
An approved GMEF loan shall be null and void if funds are
not drawn upon or disbursed within 180 days from date of
EDA approval.
.
GMEF Loan No. 018 will not be approved on April 25 to avoid default of the
non-performance date which would be October 25. The new equipment
serves as the collateral.
Non-performance extension: Not applicable.
Legal Fee:
Responsibility of the GMEF applicant.
B. Recommendation:
Recommendation is to review this information prior to the EDA meeting for discussion
and potential questions. Steve Dejong, Profile Powder Coating, Inc. or Brad Stevens,
Security State Bank, be present at the EDA meeting. Consideration to approve or
disapprove GMEF Loan No. 018 will take place at a later date. However, company may
appreciate an approval of the preliminary application and the loan amount subject to
review of lender's commitment and analyst and submitted final GMEF application. Rate
and term approved later.
C. Supporting Data:
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Preliminary GMEF application, gap financing letter from lender, letter from company.
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GREATER MONTICELLO ENTERPRISE
250 EAST BROADWAY
MONTICELLO, MINNESOTA
PRELIMINARY APPLICATION FOR LOAN
APPLICANT: J. J. Company LLC
FIRM OR TRADE NAME:
BUSINESS ADDRESS: PO Box 21050
CITY/STATE: Rogers. Mn.
TELEPHONE: (BUS.) 763-428-0990
Commerce Blvd.
ZIP CODE: 55374
(HOME)
DATE ESTABLISHED: March, 2000 EMPLOYER I.D.#
_SOLE PROPRIETOR ~CORPORATION PARTNERSHIP
MANAGEMENT
NAME
Steve DeJong
TITLE
President
OWNERSHIP %
100%
PROJECT LOCATION: SE Corner of Fallen & Chelsea Ave. Monticello, Mn.
~NEW LOCATION EXISTING BUSINESS
TOTAL PROJECT COST ESTIMATE: $ 2,075.713.00
PROPOSED USES:
REOUEST:
LAND
EXISTING BUILDING
CONSTRUCTION
MACHINERY CAPITAL
WORKING CAPITAL
OTHER
TOTAL USES:
$ 110,250.00
$ 150,000.00
AMOUNT OF LOAN
MA TURITY & TERMS
REQUESTED
APPLICANT'S EQUITY
LOAN PURPOSE
equipment
1,215,463.00
750,000.00
$2,075,713.00
PROPOSED BEGINNING DATE: June, 2000
ESTIMATED COMPLETION DATE: October, 2000
TITLE TO
PROJECT ASSETS TO BE HELD BY: ~ OPERATING ENTITY
ALTER EGO
PARTICIPATING LENDER: Security State Bank
(Name)
Brad Stevens. Vice President
(Contact Person)
of Maple Lake Albertville,
(Address)
(763) 497-8224
(Telephone #)
Mn.
PRESENT # OF F.T. EMPLOYEES: 0 PROJECTED # OF F.T. EMPLOYEES(within 2 years)~
PROJECTED AVERAGE WAGE PER HOUR: $14.00
ADDITIONAL PROJECT INFORMATION:
APPLICANT SIGNATURE:~ [0 to
DATE SIGNED: k\ - \8 -00
b -- I
.
.
.
Exhibit B
Steve Dejong is establishing a wood powder coating operation. The operation is
proposed to be placed in Monticello, Minnesota. The operation will provide plastic
powder coating for commercial clients. The process includes treating the wood on an
automated production line, adhering plastic powder to the wood through a static electrical
charge and heating the wood to melt the plastic to the metal. The plastic is sprayed onto
the wood in a spray booth. The particles that are not adhered to the wood are fully
recycled. Powder coating has advanced to a point where the client can cpoose the color
and texture desired. The end product is similar to Fonnica in durability. Parts that are
powder coated can be utilized in office furniture applications, cabinetry and other wood
applications, which have been routered during a finishing process.
The process is supported by Morton International, Inc., which has perfected the wood
powder coating process. Morton International has patented the process. They are
currently seeking regional production sources for the process. Please refer to the attached
letter from Morton detailing their interest in this operation. Steve has worked with
Morton to secure exclusive rights to the local market. Attached are two Internet articles
explaining the process. The project proposed includes a production facility of 30,000
square feet along with a full complement of equipment.
Steve Dejong has been involved in the metal powder painting field through his
ownership of Profile Powder Coating Company. Steve opened Profile in 1989 to provide
powder coating services to commercial customers. The firm has grown steadily through
expansion of its client base along with the greater acceptance that the powder coating
process has achieved in the market. Specific uses include exercise equipment, light
boxes for streetlights, machine parts and equipment parts. Specific uses in the
automotive sector are currently being tested.
10_.;)
P.O. Box 449
Maple Lake
Minnesota 55358
320~963~3161
Fax: 320~963~6163
PO. Box 220
Albertville
Minnesota 55301
612~497~8224
Fax:: 612~497~8048
Tuesday, April 18, 2000
Ollie Koropchak
City of Monticello
505 Walnut St.
Suite 1
Monticello, MN 55362-8831
Dear Ollie:
.
Security State Bank has been working with Steve Dejong from J. J. Company LLC. in
structuring the financing for a wood powder coating production facility in Monticello,
MN.
In reviewing the complete project, the funding needs, the equipment required, the
collateral to be pledged, the cash flows for the project, the real estate development
costs and the operating forecast for the firm, it has become evident that gap financing
is required. The need for gap financing is primarily related to the level of equity
required on the equipment. Without the assistance of the Greater Monticello Enterprise
and the Tax Incremental Financing package, the bank would be unable to consider the
project for financing.
If you have any questions, please contact me at 497 -8224. I look forward to working
with you and Steve to bring this project to completion.
s.~~ereI1
~,kdf/ &.u?ir5
Brad Stevens
Vice President
.
~-3
~~~~~I
l\-fember
FDIC
.
GOALS OF BUSINESS RECEIVING ASSISTANCE
Please indicate number of employees at each level and indicate the corresponding benefit level.
Number of jobs created is over the first two years. .
Job Creation Hourlv WaRe Hourly Value
Level of Voluntary
Benefits (S)
Full-time Part-time N~ (Excl. benefits)
Less than $7.00
$7.00 to $7.99
$8.00 to $9.99
$10.00 to $11.99
16 Package I Hanger $12.00 to $13.99 1.30
. 8 Painter I QC I Ship $14.00 to $15.99 1. 10
6 Sup I QC I See. I $16.00 and higher 1.30
Mach.
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:i' BY'. Profile Powder CoaUng Inc.;
.
.
.
612 428 8237j
Mar-28-00 11:23AMj
Page 1/2
PROFILE POWDER COATING.INC.
21050 COMMERCE BLVD
PO BOX 69
ROOERS. MN 55374-0069
(763)428-4990 FAX (763) 428-8237
March 28. 2000
Ollie Koropchak
Economic Development
50S Walnut Street, Suite 1
Monticello, MN 55362-8831
Dear Ollie Koropch.ak.
In the pursuit of choosing a location for our business. we have narrowed down our
options to Big Lake and Monticello. with Monticello being the location of choice.
I have enclosed a list of incentiw commitments that Big Lake has offered us. In
speaking with you, I am reasonably sure that you had offered to us the same list of
incentives,
This letter is to serve as a confirmation to these incentives.
Providing that the enclosed list of incentives is agreed upon and confirmed by
you; we arc pleased to annoWlce at this time that we will commit to you, our obligation
and decision of choosing Monticello as our new business location,
Sincerely,
~og [);7
President
EncI.
Providing Quality and Service with Integrity
fc.l.o
Sent By.: Profile Powder Coating Inc. j
.
.
.
612 428 8237j
TIP Pay as you go 8% Interest
3 - Acres
SAC/W AC
Soil Correction
Landscape
Hard Surface
Forgive
Trunk
Interest Rate
$105,000
S 20,000
$ 15,000
S 20,000
$ 36.0QO
$196,000
S 20.0QQ
~
City Money 2% below Prime
liederal Money 4% Interest
Mar-28-00 11:23AMj
Page 2/2
~-(
March 28, 2000
--
MONTICELLO
Steve Dejong, President
Profile Powder Coating, Inc.
21050 Commerce Blvd.
PO Box 69
Rogers, MN 55374-0069
"
Dear Steve:
Thank you for the fax and the list of incentives offered by the City of Big Lake. The City of
Monticello would be delighted to welcome Profile Powder Coating, Inc. and Steve Dejong to our
community. After running TIP Cashflow numbers for the proposed 30,000 sq ft building with a
new market value of $940,000, the Commissioners of the Housing and Redevelopment Authority
suggested a range of$100,000 to $125,000 (NPV) ofTIF pay-as-you-go assistance subject to
compliance of the business subsidy criteria.
.
A summary of the City of Monticello offer:
3.15 acres land @ $35,000 per acre
Estimated SAC/W AC
Total TIF (NPV)
$110,250
$ 20,575
$130,825
Forgive:
Estimated Trunk Fees
$ 25,450
City Money 2% below prime <J \ Sc ,0 c:.. c
Central Minnesota Initiative Money below prime
State/Federal Money 4% interest rate
Application to the State prepared for and at the expense of the City.
Relative to the soil correction costs of$15,000. To my knowledge, any past development that
has occurred in the Oakwood Industrial Park or on the property marketed by Charlie Pfeffer, soil
corrections is not an issue and therefore not a cost.
.
~-8
Monticello City Hall, 505 Walnut Street, Suite I, Monticello, MN 55362-8831' (763) 295-2711 . Fax: (763) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362' (763) 295-3170' Fax: (763) 271-3272
.
Mr. DeJong
March 28, 2000
Page 2
Steve, in addition to the financial incentives offered by the City of Monticello, the City of
Monticello offers a community filled with many quality of life assets for your future employees:
affordable housing, community center, hospital and health care services, school facilities with the
latest technology, and recreational opportunities. The Monticello site is located along 1-94 and
Trunk Highway 25 for easy and quick access to your proposed market areas. The electrical
provider for the Monticello industrial site is Northern States Power Company which offers energy
and rebate programs to qualifYing businesses such as Profile Powder Coating. Inc. Lastly, the
City of Monticello has both experience and a success rate at obtaining dollars from the State and
the Initiative Board on behalf of a business. Once you locate in Monticello, the City of
Monticello has a Business Retention and Expansion Program to ensure your business remains part
of the community. I believe the City of Monticello offers a total package for Profile Powder
Coating, Inc. for today and for the future.
I look forward to working with you, Steve. Please call me at 271-3208 with any questions
regarding the offer by the City of Monticello.
With warm regards.
. CITY OF MONTICELLO
.
Ollie Koropchak
Director of Economic Development
c: Roger Belsaas. Mayor
Rick Wolfsteller, City Administrator
Jeff O'Neill, Deputy Administrator
File
~...8
.
.
.
EDA Agenda - 4/25/00
7.
Executive Director's Report:
a) T. 1. Martin Loan - Attached is a letter written to Eric Bondhus relative to the change
of monthly payments as per the Loan Agreement. As you recalI, the first two years of
loan payback was for interest only. Beginning April 1,2000, the montWy payment
includes principal and interest. As of April 20, the April payment has not been submitted.
This loan payback has been repeatedly late.
b) Twin City Die Castings - The $500,000 grant to the City from the State will be loaned
to TCDC at an interest rate of 4% over 7 years. The payback will go into a separate
account established by the City and will be accounted for independent of the EDA -
GMEF. In the future, the City Council will approve revolving loans that utilize this
money not the ED A. The Profile dolIars will also be Federal dolIars and must comply with
Federal regulations.
c) Lender, HRA, Council Workshop - Scheduled for May 3, 5:30 p.m. Discussion about
downtown redevelopment.
1
March 24, 2000
--
MONTICELLO
Mr. Eric G. Bondhus, Vice President
T. J. Martin, Inc.
1347 Dundas Circle
Monticello, MN 55362
Re: GMEF No. 014 Loan Agreement between T. J. Martin, Inc. and the Monticello Economic
Development Authority.
Dear Eric:
This is a letter to remind you that the loan repayment commencing the first day of April, 2000, shall
include principal and interest. Per the Loan Agreement, the loan repayments for the first 24 months
following the date of the loan closing were for interest only.
. The Loan Agreement of February 18, 1998,2. Reoavrnent of Loan, (c) reads: Payment of principal shall
commence on the first day of the twenty-five month immediately following the Loan Closing Date, and
continue on the first day of each and every month thereafter until paid in full. Such payment shall fully
amortize the principal over five years, provided, however, the entire remaining unpaid balance of principal
shall be due and payable in full on the first day of the eighty-fifth month following the Loan Closing date.
I have enclosed the amortization schedule. Please note the principal and interest loan payment amount is
$1,716.12 effective the pI of April, 2000, continuing through the eighty-fifth month.
Should you have any questions, please do not hesitate to call me at 271-3208.
Sincerely,
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
()~<L \~cI\ G ~.9~
-..
Ollie Koropchak
Executive Director
c:
Jim Amundson, Marquette Bank, Monticello
Rick Wolf steller, City Administrator
File
.
I-I
Monticello City Hall, 505 Walnut Street, Suite 1, Monticello, MN 55362-8831 . (763) 295~2711 . Fax; (763) 295~4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362. (763) 295-3170. Fax: (763) 271-3272