EDA Agenda 04-26-2005
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ANNUAL MEETING AGENDA
MONTICELLO ECONOMIC DEVELOPMENT AlJTHORITY
Tuesday, April 26, 2005 - 4:00 p.m.
City Hall - Academy Room
MEMBERS:
Chair Bill Demeules, Vice Chair Barb Schwientck, Coumcil members Wayne Mayer and
Tom Perrault" Ron Hoglund, Darrin Lahr, and Susie Wojchouski.
STAFF:
Treasurer Rick Wolfsteller, Executive Director Ollie Koropchak, Recorder Angela
Schumann.
1. Call to Order.
2. Consideration to approve the October 26, 2004 and February 10, 2005 EDA minutes.
3. Considcration of adding or removing agenda items.
4. Consideration to elect 2005EOA officers.
5. Consideration to review and accept the year-end EDA Financial Statcments, Activity Report, and
proposed 2005 Budget.
6. Consideration to review year-end balances of the GMEF, DMRF, UDAG, and ERG Funds.
7.
Consideration to review ft)!" amendment thc Business Subsidy Criteria and Bylaws of the EDA.
8. Consideration of an update on the approved GMEF Loan No. 024 betwecn the FDA and
Tapper's Holdings LLC.
9. Executive Director's Report.
10. Other Business.
11. Adjournment.
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MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, October 26,2004 - 4:00 p.m.
City Hall - Academy Room
MEMBERS PRESENT:
Chair Bill Demeules, Vice Chair Barb Schwientek, Roger Carlson,
Robbic Smith, Clint Herbst, and Darrin Lahr.
MEMBERS ABSENT:
Ron Hoglund.
STAFF PRESENT: Treasurer Rick Wolfstcller and Executive Director Ollie Koropchak.
GUESTS:
Bruce and Cindy Hamond, VisiCom, Inc.
1. Call to Order.
Chair Demeules called the EDA meeting to order at 4:00 p.m. declaring a quorum.
2.
Consideration to approve the Julv 27,2004 EDA minutes.
Roger Carlson made a motion to approve the July 27, 2004 EDA minutes. Seconded by
Darrin Lahr and with no corrections and additions, the minutes were approved as
wrillen. Robbie Smith abstained (absent July 27th)
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Consideration of adding or removing agenda items.
None.
4. Consideration of a request from Vi siC om, Inc. relative to balloon payment date for DMRF No.
ill
Koropchak provided the background information of the DMRF Loan No. 111 to VisiCom,
Inc. stating the loan was approved by the EDA on April 10,2001, in the amount of $10,644,
5.5% interest rate, amortized over 10 years; provided, however, the entire remaining and
unpaid balance of principal and interest shall be due and payable in full on May 1,2004. In
April 2004, the FDA approved extending the balloon payment date from May I, 2004, to
November 1,2004. The current principal balance of the said loan is $6,073.01.
Bruce llamond explained that due to the soft economy and since the previous tenant left, they
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EDA Minutes - 10/26/04
have been unsuccessful at finding a replacement tenant or additional tenants for the planned
expansion to the adjoining westerly lot. Therefore, without tenants, they are unable to secure
financing for the expansion. Additionally, Hamond noted the three downtown projects which
have not materialized: Walgrecns, Block 35, and Landmark Square n and the vacancies within
the Steve Johnson properties. The Hamonds plan to start a new business called Fitness
Matters which will occupy the existing vacant building located at 212 West Broadway. Due to
the above reasons, they requested the FDA consider a one-year extension to the balloon
payment date on the bOA loan The request was supported by a letter from the lender, First
Minnesota Bank.
Clint Herhst made a motion to approve extending the halloon payment date from
November J, 2004, to November 1, 2005, associated with the Loan Agreement between
the Monticello EDA and VisiCom, Inc. dated April 1 0, 200], and requesting a principal
and interest payment which would result in a remaining principal balance 0./$5,000,
payment due November 1, 2004. Robbie S'mith seconded the motion and with nojiJrther
discussion, the motion passed unanimously. Reasons fiJr motion: DMRF Loan are less
dollars, no !Jpec(/ic guidelines addressing balloon date extensions, sufficient HDA funds,
soli economy and lack oj'downtown economic activity, and letter of support from lender.
5.
Consideration to approve authorization to execute a Satisfactorv ofMortga~e for GMEF Loan
No. 006 (Custom Canopy).
Koropchak informed the EDA commissioners ofa request from Pat Dwyer, Bank of Elk River,
for a Satisfactory of Mortgage relative to GMEF Loan No. 006, a real estate loan, to Stephen
P. Birkeland, Jr. and Joan M. Birkeland, for the construction of Custom Canopy. The balloon
payment had been paid in-full on August] 8, 1998. The Birkeland's are looking to refinance.
Roger Carlson made a motion authorizing execution oj'the S'atisfaction of Mortgage for
GMEF Loan No. 006 between the Monticello EDA and Stephen P. Birkeland, Jr. and
Joan M Birkeland. Seconded by Barb Schwientek and with no./urther discussion, the
motion passed unanimously.
6. Consideration to review terms and expiration dates of EDA Commissioners.
Koropchak noted this was an inf(Jrmation item only and no action was required. Given the
decision of Council Members Carlson and Smith to not run fen re-election, the EDA and
Koropchak thanked them for their years of service. Pending the out-come of the elections will
the EDA position held by Commissioner Herbst be alTected. Commissioner Schwientek
agreed to be considered by the Council for another 6-year term on the FDA.
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EDA Minutes - 10/26/04
7.
Executive Director's Report.
The EDA accepted the report as written. Bill Demeules informed the EDA that closing on the
Standard Iron building and lot to Walboard, Inc. was anticipated for November 18, 2004.
Standard lron will have a 4-year lease on a portion of the building.
8. Other Business.
None.
9. Adjournment.
Robhie S'mith made a motion to adjourn the EDA meeting Seconded by Barb Schwientek
and with nofurther business, the EDA meeting adjourned at 4:45 p.m.
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Ollie Koropchak, Recorder
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MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Thursday, February 101\ 2005 - 4:00 p.m.
City Hall - Academy Room
MEMBERS:
Chair Bill Oemeules, Darrin Lahr, Tom Perrault, Wayne Meyer
ABSENT:
Barb Schwientek, Ron Hoglund
STAFF:
Executive Director Ollie Koropchak, Recorder Angela Schumann, Rick Wolfsteller
GUESTS:
Barb Tapper, Tapper Holdings, Inc.
1. Call to Order.
Chair Demeules called the meeting to order at 4:00 PM, declaring a quorum.
2. Consideration to approve the October 26, 2004 EDA minutes.
MOTION BY COMMISSIONER LAHR TO TABLE APPROV AL OF THE MINUTES OF
OCTOBER 26th, 2004.
MOTION SECONDED BY COMMISSIONER DEMUELES. MOTION CARRIED.
3.
Consideration of adding or removing agenda items.
NONE.
4. Public Hearing - Consideration to review for discussion the preliminarv GMEF application fortn
from Tappers Iloldings, LLC.
Chairman Demeules opened the public hearing.
Koropchak reviewed her report, indicating that a public hearing is required by business subsidy
law relating to job creation, which will be part of the loan agreement.
Koropchak stated that the FDA is asked to review the application from Tapper's Holdings, LLC,
which requests $200,000 in a real property rehabilitation loan for a proposed 25,000 square foot
expansion to the existing facility. The proposed addition is for Strategic Equipment & Supply
Corporation, who will lease the space, as well as an additional 15,000 square feet of the existing
building. Tapper's application indicates the lease is $5.00 per square foot, with taxes paid by
owner. Strategic is committing to 40 new jobs and has indicated that the company intends to hire
50-55 employees. Strategic is a national company. The company intends to use this facility as
the northern region headquarters and control center.
EDA Minutes - 02/10/05
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Koropchak reviewed the required terms of the loan, stating that the estimated cost tl1f expansion
is $1.3 million. The proposed tenant has indicated they will meet job creation and wage goals as
identified. The loan will require that an annual report is completed in terms for the wage goal.
The expansion will generate approximately $18,000 in annual tax base. The loan will assist an
existing businesses expansion. Koropehak noted that the EOA would be in the 2'''' position to the
bank. The HRA will be reviewing pay-as-you go TIF financing assistance.
Koropchak stated that zoning requirements are lnet. Koropchak commented that she has
requested a statement of credit worthiness from the applicant's bank as required. That document
will be provided prior to Council. The EDA is allowed to lend $10,000 per job or $5,000 for
every $20,000 increase in market value. As such, using the job creation calculation, the appl icant
qualifies for $400,000 in a real property rehabilitation loan. The EDA cannot authorize a loan
which exceeds 50% of remaining revolving loan fund. As of December 31, 2004, the revolving
loan fund balance is $825,000. Koropehak stated that, assuming the EDA authorizes a loan of
$200,000, the fund balance would be $625,000.
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Koropehak stated that the loan tenns also require that the applicant provide 10% equity or
$20,000 in the case ofthe requested $200,000 loan. The equity requirement needs to be
determined by EDA. Tapper's prefers to use collateral rather than cash as equity. 'rhe loan
would be amortized over 20 with balloon payment due in 5 years. Koropchak stated that she
believes the prime interest rate is currently at 5.5%. The FDA can do a rate of up to 1.5% below
prime. In terms of a loan fee, there is a minimum fee of $200 and the maximum fee is not to
exceed 5% of project cost. The fee is due not later than March iii, 2005. The loan otfer, if not
disbursed, becomes null and void as of August 10111,2005. The applicant is responsible for the
cost of drafting loan documents.
Perrault asked if the estimated increase in tax base will go specifically to the City, or to the City
and other entities. Koropchak stated that amount is the jusrisdiction 's total tax benefit.
Demueles asked what type of equity is being proposed. Barb Tapper, representing Tapper's
Holdings, stated that she would need to research that matter and provide an updatc to the EOA at
a later date.
Lahr asked if the FDA has any past history with equity. Koropchak stated that it is normally
cash. Mayer asked what the standard for cash cquity has becn. Koropchak responded that it is
generally at least 10% of the EDA loan in the form of cash.
Demeules clarified that the EOA had not done an expansion loan before.
Koropchak noted that Tapper's Holdings has always been current in tenns of payments. This
would be the fourth loan for Tapper's.
Mayer asked ifthere would be a problem with the $20,000 cash equity. Tapper stated she would
need to verify.
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EDA Minutes - 02/10/05
Lahr stated the EDA could reduce the amount of the loan, which reduces the equity needed.
Tapper stated that they have no final commitment on the total amounts, due to the fact that the
bids haven't come in.
Lahr stated that he doesn't necessarily have an issue with using the existing structure as collateral.
Perrault asked ifan approval should be contingent until this matter has been better outlined.
Koropchak stated that the approval will be contingent in any case, based on thc approval of the
company's CUP application and bank financing.
Hearing no public comments, Demeules closed public hearing.
5. Consideration to approve or deny GMEF No. 024, a business subsidy, for Tapper's
Holdings, I,LC.
Mayer clarified that the bank's letter regarding credit would be provided prior to final Council
approval. Koropchak stated that the EDA's motion may also be contingent upon receiving letter,
verification of equity terms, and loan application compliance.
The EDA briefly discussed each term requirements prior to making a formal motion on the terms
of the loan.
MOTION BY COMMISSIONER LAIlR TO APPROVE A GMEF LOAN OF $200,000, WITH
AMORITZA TION OVER 20 YEARS, A BALLOON PAYMENT DUE AT 5 YEARS, AND A
LOAN ORIGINATION FEE OF $200.00. APPROVAL IS SUBJECT TO LENDER
COMMITMENT, STATEMENT OF APPLICANT'S CREDITWORHINESS, ACCEPTANCE
OF THE EXISTINCi BUILDING AS EQUITY, AND APPROV AL OF THE APPLlCAN'r'S
APPLICATION FOR CONDITIONAL USE PERMIT.
MOTION SECONOEO BY COMMISSIONER PERRAULT.
COMMISSIONER LAlIR AMENDED THE MOTION TO INCLUDE AN INTEREST RATE
FOR THE NOTE AT 2% BELOW THE FEBRUARY I IIH, 2005 PRIME RATE.
COMMISSIONER PERRAULT SECONDED THE AMENDMENT.
MOTION CARRIEO UNANIMOUSLY.
6. Executive Director's Report
Koropchak stated that she had met with Dahlheimer representatives to discuss a possible
relocation to the Monticello Business Center. Koropchak stated that it appears that they may
have options in Big Lake, but may still consider a Monticello option. Koropchak reported that
she will be meeting tomorrow with Ken Streetcr (representing Ryan Companies) to go through
what will need to happen to purchase land. Additionally, Koropchak has a meeting sct with A VR
and the Mayor for the 1511i to discuss relocation.
Koropchak indicatcd that she had spoken with an existing local business who will bc looking at
relocating and expanding Oakwood Industrial Park.
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EDA Minutes - 02/10/05
Koropchak stated that she is continuing to respond to leads for the City's business park. The
Council has set a standard for a quality park that produces good paying jobs, authorizing a set of
preferred measures and covenants to create good paying jobs. As such, many ofthe leads do not
qualify for financing.
Commissioner Lahr, representing the Marketing Committee, stated that they had discussed how
to best sell and market the park. Koropehak indicated that WSB currently working on platting
and is expected to have a preliminary plat package for April.
Koropchak mentioned that City representatives had met with Chuck Van Heel to discuss the
potential of redevelopment of the theater block.
Koropchak noted that the April 26th meeting ofthe EDA is the annual meeting.
7. Other Business.
NONE.
8. Adiournment.
MOTION BY COMMISSIONER LAHR TO ADJOURN.
MOTION SECONDED BY COMMISSIONER PERRAULT.
MOTION CARRIED.
Recorder
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EDA AGENDA - 04/26/05
4. Consideration to Elect 2005 EDA Officers.
A. Reference and Backqround.
In order to comply wi th EDA Ordinance Amendment No. 172, Section
2~3~2: The Authority shall annually elect a president, vice
president, treasurer, assistant treasurer, and secretary. The
current list of officers are:
President
Vice President
Treasurer
Assistant Treasurer
Secretary
Bill Demeules
Barb Schwientek
Rick Wolfsteller
Ron Hoglund
Ollie Koropchak
Nominations will be made at the meeting; therefore, any EDA member
unable to attend the meeting and doesn't wish to be re-elected or
nominated, please contact me.
NO ACTION REQUIRED, FOR INFORMATION PURPOSES ONLY
In order to comply wi th EDA Ordinance Amendment No. 172, Section
2-3-1: Creation: (Cl 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.
2005 EDA membership and 6-year term:
Bill Demeules
Tom Perrault, Council
Ron Hoglund
Susie Wojchouski
Wayne Mayer, Council
Darrin Lahr
Barb Schwientek
12-2005
12-2006
12-2007
12-2008
12-2008
12-2009
12-2010
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EDA AGENDA - 04/26/05
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B. Alternative Action:
1.
Motion to nominate and elect the
. . . . Chair, . . . . . . .. Vice Chair, . . . . . . . . .
. . . . . . . . . Assistant Treasurer, and............
2005 EDA officers.
following
Treasurer,
Secretary as
2. A motion to table election of 2005 EDA officers.
C. Recommendation:
No recommendation is given.
D. Supportinq Data:
None.
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EDA Agenda - 04/26/05
5.
Consideration to review and accept the 2004 Year-End EDA Financial Statements.
Activity Report. and 2005 Proposed Bude:et.
A. Reference and Back~round:
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 H:
The Authority shall prepare an annual report describing its activities ffild providing an accurate
statement of its financial condition. Said report shall be submitted to the City Council in May of
each year.
Enclosed are the year-end statements, proposed budget, and activity report.
The EDA will need to review and discuss prior to consideration of the following alternative
action.
B. Alternative Action:
1. A motion to accept the 2004 year-end financial statement and activity report for
submission to the City Council on May 9 or 23,2005.
2.
A motion to accept the 2004 year-end financial statements and activity report subject
to named revisions prior to submission to the City Council.
3. A motion to not accept the 2004 year-end financial statements and report.
4. A motion to table any action.
C. Recommendation:
If the EOA commissioners make a finding that the statements and report are so correct,
recommendation is alternative no. 1. TheEDA financial report are consistent with City year-
end reports. All GMEF loan paybacks arc current.
D. Supportine: Data:
Copies of financial statements and report.
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MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY MONTICELLO
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
Statement of Revenues, Expenditures, and Changes in Fund Balance
For the Year Ended December 31, 2004
REVENUES
Appropriations -
2004 MIF (UMC)
SCERG
Interest Income - GMEF Notes
Interest Income - DMRF Note
Interest Income - Investment GMEF
Interest Income - Investment UDAG
Interest Income - Investment SCREG
Interest Income - Investment MIF
Loan Fees
Legal Fees
Miscellaneous
TOTAL REVENUES
XPENDITURES
GMEF Loans -
GMEF Legal Fees
GMEF Professional Fees
TRANSFER TO LIQUOR FUND
DMRF Loan -
DMRF Grant -
DMRF Legal Fees
DMRF Professional Fees
Service Fees
Miscellaneous Other
Int. Adjustment - Notes
TOTAL EXPENDITURES
Excess of Revenues Over Expenditures
FUND BALANCE - Beginning of Year
FUND BALANCE - End of Year
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$ 13,797.86
$ 16,202.14
$ 17,557.95
$ -0-
$ 36,104.00
$ -0-
$ -0-
$ -0-
$ -0-
$ 200.00
$ -0-
$
83,861.95
$ -0-
$ 419.50
$ 62.50
$ -0-
$ -0-
$ -0-
$ 1,366.00
Co -0-
,?
$ -0-
$ -0-
$ -0-
$
1,848.00
$
82,013.95
$1, 543,971.80
$1,625.985.75
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY MONTICELLO
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
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Balance Sheet
December 31, 2004
ASSETS
Cash in Bank
Accounts Receivable
Notes Receivable - Tapper, Inc. I
Notes Receivable - Muller Theatre
Notes Receivable - SMM, Inc.
Notes Receivable - Aroplax Corp.I
Notes Receivable - Custom Canopy, Inc.
Notes Receivable - Standard Iron
Notes Receivable - Vector Tool
Notes Receivable - Tapper, Inc.II
Notes Receivable - SELUEMED
Notes Receivable - T J Martin
Notes Receivable Mainline Distribution
Notes Receivable - Aroplax Corp II
~otes Receivable - TCDC
"'otes Receivable - IRTI
Notes Receivable - GWJ,LLC
Notes Receivable - VisiCom
Notes Receivable - UMC
Notes Receivable - Tapper's III
Notes Receivable - WSI
Appropriations Receivables -
2004- MIF (UMC)
SCERG
TOTAL ASSETS
FUND EOUITY
Fund Balance
Reserved for Participation Loans *
(Economic Development)
TOTAL LIABILITIES AND FUND EQUITY
$ 978,831.60
$
$ -0-
$ -0-
$ -0-
$ -0-
$ -0-
$ -0-
$ -0-
$ -0-
$ -0-
$ 8,903.14
$ -0-
$ -0-
$ -0-
$ -0-
$ 26,842.60
$ 5,000.00
$ 185,891.50
$ 46,849.60
$ 343,667.31
$ 13,797.86
$ 16,202.14
$1,625,985.75
$1,625,985.75
$1,625,985.75
* 2003 transfer to Liquor Fund $70,000
* 2001 transfer to Liquor Fund $77,000
Original Liquor Fund transfer to EDA $383,000.
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MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
2005 CASH FLOW PROJECTION
.BEGINNING CASH BALANCE, January 2005
RECEIPTS
Appropriations, Expected -
GMEF
Notes Amortization Payments -
Tapper Inc.
Muller Theatre
SMM, Inc.
Aroplax Corp.
Custom Canopy, Inc.
Standard Iron
Vector Tool
Tapper's II
SELUEMED
T.J. Martin ($547.60 Mo.)
Mainline Distrib. ($702.08
Aroplax Corp. II ($730.93
TCDC
IRTI
EDMA ($193.89 Mo.) 9-06
VisiCom 11-05
UMC ($1, 084 .33 Mo.) 3 - 0 8
Tapper III($521.76 Mo.) 5-08
WSI ($1,483.49 Mo) 6-09
Tapper Holdings ($1,417 Mo.) 7-10
Interest Income - Investment (est.)
Loan Fees
Loan Fees Other
Miscellaneous
6-06
Mo.) 6-04
Mo.) 12-04
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TOTAL RECEIPTS
TOTAL BEGINNING BALANCE AND RECEIPTS
EXPENDITURES
GMEF Loans -
Tapper's Holdings
Other
Re-payment to Liquor Fund 2005
DMRF Grants
Professional Fees
Block 35 (Liquor Fund)
Legal Fees
Miscellaneous
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TOTAL EXPENDITURES
EXPECTED CASH BALANCE, December 2005
$ -0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
$ 6,571. 20
$ -0-
$ -0-
-0-
-0-
$ 2,326.68
$ 5,000.00
$ 13,011.96
$ 6,297.12
$ 17,801.88
$ 8,900.94
$ 30,000.00
$ 200.00
$ 3,000.00
$ 1.000.00
$ 200,000.00
$ 100,000.00
-0-
$ 100.00
$ 143,890.66
$ 1,000.00
$ 100.00
$ 978,831.60
$
94.109.78
$1,072,911.39
$ 445,090.66
$ 627,850.72
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2004
ECONOMIC DEVELOPMENT AUTHORITY ACTIVITY REPORT
MEETING DATE
SUBJECTS
January 27,2004
Block 35 - Next steps in process: NAC to prepare final site
plan (to scale) incorporating parking
recommendations/adjustments, agreed-upon building facade
improvements and landscaping detail.
Tabled action to extend the balloon payment date for GMEF
Loan No. 16 (Aroplax) to explore any legal ramifications of the
extension and bylaw amendment.
April 20, 2004
Review the Loan Application, held a pubic hearing and
approved GMEF Loan No. 023 for WSI Industries, Inc. in the
amount of $350,000. Fixed rate of 2%, amortized over 25
years, balloon in 5 years. Job commitment 46 new jobs within
two years at wages between $12 and greater than $22 per
hour excluding benefits.
April 27, 2004
Annual Meeting
The EDA was advised to not extend any balloon payments.
Aroplax is able to re-finance, they were checking out all
options. Aroplax withdrew their request for an extension.
Approved the extension of balloon payment date from May I,
2004 to November I, 2004, for the DMRF Loan Agreement
between the EDA and Visicom, Inc., dated April 10,200].
Supported by Lender letter and that DMRF Guidelines do not
address balloon date extension.
Approved the extension of the compliance date from August
30, 2003, to August 30, 2005, within the Loan Agreement
between GWJ, Inc. and the EDA dated August 30, 2001, for
GMEF No. Loan 019.
Approved a motion requesting the Council approve the
concept f(w Block 35 improvements and authorize a Feasibility
Study.
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2004 EllA Activity Report continued
EDA Officers elected for 2004:
President Bill Demeules
Vice Prcsident Barb Schwientek
Treasurer Rick W olfsteller
Assistant Treasurer Ron Hoglund
Secretary Ollie Koropchak
Acccpted EDA 2003 Year-End Financial Statcments and
Activity Report for submission to thc City Council on May
10,2004. All existing GMEF loan paybacks arc current.
Accepted the Business Subsidy Criteria of the EDA as written
(no amendments.)
June 15,2004
Reviewed the Feasibility Study prepared by WSB, Inc. for
Block 35 alley and plaza improvements. With three options
ranging from $265,000 to $307,000; WSB was requested to
address 6 issues identified to reduce the costs. Research of
other EDA resources of funds was requested.
Junc 22, 2004
With the lowest estimate of$195,000 ($25,700 private),
approved a motion recommending the Council authorize design
and preparation of bids and specs for Block 35 alley and plaza
improvements consisting of a bituminous pavement alley and
parking area and plain four inch concrete plaza with an alternate
bid for exposed aggregate concrete plaza, authorize to go out
for bids, and to call for a public hearing date subject to the
propcrty owners petitioning for establishment of a service
district. It was suggested the city design and authorize bids and
specs for the Block 35 municipal parking lot as a companion as
a means to receive a more favorable bid.
Authorized the execution of a Satisfaction of Mortgage for
GMEF Loan No. 015 for Mainline Distribution.
July 27, 2004
Given the fact that two owners who own four parcels on Block
35 did not want to be assessed, nor be a part of the public
funding improvements and service district, and would not grant
access to their properties; approved a motion canceling the
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2004 EllA Activity Report continued
preparation of the plans and specs and advertising for bids and
requested Council cancel the 429 public hearing of August 9,
2004.
Authorized execution of the Satisfaction of Mortgage for
GMEF Loan No. 016 for Aroplax.
October 26,2004
Given DMRF Loans are less dollars, no specific guidelines
address balloon date extension, sufficient EDA funds, soft
economy and lack of downtown economic activity, and letter
for support irom lender; approved extending the balloon
payment date from November 1,2004, to November 1,2005,
associated with the Loan Agreement between the EDA and
VisiCom, Inc. dated April to, 2001, and requesting a principal
and interest payment which would result in a remaining principal
balance of $5,000, payment due November 1, 2004.
A uthorized execution of the Satisfaction of Mortgage for
G.MEF Loan No. 006 between the EDA and Stephen P.
Birkeland Jr. and Joan M. Birkeland.
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GREATER MONTICELLO ENTERPRISE FUND (GMEF)
LOAN STATUS
. December 31, 2004
Economic Development Authority (EDA) was created in 1989.
APPROVED LOANS
Tapper/Genereux (1990) $88,000.00
Muller/Monti Theatre (1990) $50,000.00
Barger/Suburban #004 (1992) $50,000.00
Schoen/Aroplax #005 (1992) $85,000.00
Birkeland/Custom Canopy #006 (1993) $42,500.00
Demeules/Standard Iron #007 (1993) $75,000.00
Blue Chip DevNector Tool #010 (1995) $50,000.00
Tapper's #011 (1996) $100,000.00
Standard lron/Seluemed #013 (1996) $70,000.00
T J Martin #014 (1998) $87,500.00
Mainline Distr #015 (1999) $100,000.00
Aroplax #016 (1999) $100,000.00
TC Die Cast #017 (2000) $100,000.00
Integrated Recycling #018 (2001) $72,500.00
EDMA #019 (2001) $30,000.00
. Tapper's #021 (2002) $55,000.00
Tomann/UMC #022 (2002) $200,000.00
WSllndustries #023 (2004) $350,000.00
TOTAL APPROVED LOANS $1,705,500.00
APPROVED PAYBACKS
2001 to Hwy Liquor ($77,000.00)
2003 to Hwy Liquor ($70,000.00)
TOTAL APPROVED PAYBACKS ($147,000.00)
TOTAL APPROVED LOANS & PAYBACKS $1,558,500.00
LOAN DISBURSEMENTS (transferred to GMEF)
Liquor Fund:
1991 to Tapper $73,000.00 -
1992 to Suburban $50,000.00 -
1992 to Aroplax $65,000.00 -
1994 to Standard Iron $75,000.00 .-
1995 to Vector Tool $50,000.00 -
1996 to Standard Iron $70,000.00
. 2001 payback from EDA ($77,000.00)
2003 payback from EDA ($70,000.00)
Total Liquor Fund $236,000.00
EDA annual reports.xls: 4/14/2005
~
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
LOAN STATUS
. UDAG Fund:
1991 to Tapper
1991 to Muller
1992 to Aroplax
1993 to Custom Canopy
1996 to Tapper's
1999 to Aroplax (016)
1999 (2000) to Mainline
2000 to TC Die Cast
Total UDAG Fund
UDAG (recycled funds):
2001 to Integrated Recycling
2001 to EDMA
2003 to UMC
2004 to WSI
Total Recycled UDAG
SCERG Fund:
1998 to T J Martin ' \,.000
. 1999 to Mainline
2000 to TC Die Cast
- 2004 to WSI
Total SCERG Fund
SCERG (recycled funds):
2004 to WSI
Total Recycled SCERG
MN INV Fund: ~
..... 2004 to WSI - '-=' V"f\.. c::..
Total MIF
GMEF (recycled funds):
2000 to TC Die Cast
2003 to UMC 022
2003 to Tapper 021
Total GMEF Fund
TOTAL LOAN DISBURSEMENTS
.
EDA annual reports.xls: 4/14/2005
$15,000.00 -
$50,000.00 -
$20,000.00 -
$42,500.00 -
$100,000.00
$100,000.00 -
$39,546.38 --
$56,781.04 .-
$423,827.42
$72,500.00 ..-
$30,000.00
$125,000.00
$260,000.00
$487,500.00
$87,500.00
$60,453.62
$23,198.02 -
$16,202.14
$187,353.78
$60,000.00
$60,000.00
$13,797.86
$13,797.86
$20,020.94--
$75,000.00
$55,000.00
$150,020.94
$1,558,500.00
2
.
.
.
EDA Agenda - 04/26/05
6.
Consideration to review 2004 vear-end balances of the GMEF. DMRF. UDAG.
Minnesota Investment Fund and SCERG Funds.
A. Reference and Baekeround:
GMEF No. 015 (Mainline) and GMEF No. 0016 (Aroplax II) loans were prepaid in 2004.
GMEF No. 023 (WSI) was approved and disbursed in 2004. No balloon payments are due in
2005. GMEF No. 014 (TJ Martin) and GMEF No. 019 (EDAM) have not made April
payments.
Only legal fees were disbursed from the DMRF account in 2004. Current balance of DMRP is
$143,890.66.
Additional funds available for future use by the EOA include the MIF Federal- TCDC (2004
balance $270,130.51). MIF-State-UMC (2004 balance $8,692.15), some monies recycled in
2004. The SCREG Fund was closed out in 2004 and all monies have been recycled. All
UDAG-FSI dollars have been recycled.
The final report for the MIF Federal-City/TCDC grant was submitted to the State earlier this
year and I expect to get a confirmation of close-out. If the confirmation is received, these
dollars become available to recycle; however, the applicant must agree to meet the criteria set
by HUD (family income levels and Davis Bacon Act.) No restriction apply to the MIF-State-
UMC; however, the EDA retains only the first $100,000 plus interest.
If the EDA spend the funds reserved for DMRF (downtown/non-restrictive) funds and upon
disbursement of the $200,000 Tapper Holdings loan, the EOA cash balance of the 26, April,
2005, is $634,940.94.
No action necessary by the EDA.
SOURCES OF FUNDS
April 26, 2005
411rMEF Cash Balance
Less DMRF Cash Balance
TOTAL
LESS DISBURSEMENTS
Tapper's Holdings
BALANCE April, 2005
Other Sources:
MN INVEST FUND (TCDC) Restrictive
MN INVEST FUND (UMC) Non-restrictive
.
.
$ 978,831.60
$ 143,890.66
$ 834,940.94
$ 200,000.00
$ 634,940.94
$ 270,130.51
$ 8,692.15
($595,000 P&I)
($100,000+interest)
.
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
DOWNTOWN MONTICELLO REVITALIZATION FUND
December 31, 2004
Fund Balance, Dccember 31, 1997
Revenues
Appropriations
TOTAL REVENUES
o
.
Expenditures
DMRF 101, Kathy froslie, 2-6-98
8-31-98
DMRF 102, Steve Johnson
DMRF 103, Kathy Froslie, 2-6-98
DMRF 104, Rich Cline, 10-11-98
11-24-98
DMRf 105, Al Loch, 11-6-98
DMRF 106, Dan Olson, 7-27-98
DMRF 107, Steve Johnson
DMRF 108, Bruce Hammond 6-11-99
DMRF 109, Dorothy Topel 7-12-99
DMRF 110, Heaton
DMRf 111, Hamond 8-29-01 ($9,500) extended to 5-29-02
Loan 4-10-01 ($10,644,5.5%,5-04) $]0,644.00
DMRF 112 Thiekpenny 5-22-01 $ 6,960.25
DMRF 113 Chamber 1-10-02 $ 2,172.82
Drayna 5-10-01 $ 1,000.00
Claybaugh 3-00 $ 810.50
4-00 $ ] ,240.00
Grittman -01 $ 822.80
Broadway Inconvenience -02 $ 4,730.55
Legal (Loan document) $ 200.00
-01 $ 240.50
Block 35 -04 $ 1.366.00
TOTAL EXPENDITURES
$ 2,500.00
$ 2,500.00
$ 500.00
$ 2,394.13
$ 180.12
$ 2,610.00
$ 6,814.13
$ 5,41] .80
$ 2,011.74
Fund Ba]ance, December 31, 2004
.
$199,000.00
$199,000.00
$ 55,109.34
$143,890.66
.
.
.
SMALL CITIES ECONOMIC RECOVERY GRANT (SCERG)
FINANCIAL REPORT
December 31 , 2004
GRANT TOTALS. AROPLAX
Payback began in December, 1992 for 7 years ending in November, 1999.
Annual principal and interest payback total is $29,801.40.
First $100,000 principal payback ends January, 1997.
Principal
Interest
TOTAL
ORIGINAL PAID REMAINING
$170,000.00 $175,615.55 ($5,615.55)
$37,969.92 $24,018.99 $13,950.93
$207,969.92 $199,634.54 $8,335.38
Jan, 1997 GMEF STATE
$170,000.00 $100,000.00 $70,000.00
$29,634.75 $24,018.99 $5,615.76
$199,634.75 $124,018.99 $75,615.76
Principal
Interest
TOTAL
Grant must be expended by December 31, 1994, up to $170,000.
EXPENDED:
$116,556.75
$16,996.18
$12,356.59
$4,021.10
$15,132.50
$4,936.88
$170,000.00
1993
1993
1993
1/18/94
4/13/94
7/20/94
GRANTTOTALS-STANDARDIRON
Payback began in July, 1994 for 7 years ending in June, 2001.
Annual principal and interest payback total is $33,306.12.
Grant must be expended by December 31, 1994, up to $250,000.
EXPENDED:
$250,000.00
8/18/94
..,.,~-~-~-~-........_---..,~,.,----------------,,""~"'~"'~I~'~''''''''#_#------__~..~,..
EDA annual reports.xls: 4/14/2005
.
.
.
SMALL CITIES ECONOMIC RECOVERY GRANT (SCERG)
FINANCIAL REPORT
REVENUES
Principal Payback - Aroplax
Interest Payback - Aroplax
Loan Payback - Standard Iron
Grant Administrative Fee - S.1.
Refund 97/98 fee to Wright County
Interest Income - Investment:
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
TOTAL REVENUES
EXPENDITURES
Payback to State - Aroplax
Reimbursement to Wright Co - S.1.
Transfer to GMEF - T. J. Martin
Transfer to GMEF - Mainline Dist
Transfer to GMEF - TC Die Cast
Transfer to GMEF - WSI
TOTAL EXPENDITURES
- \'1.... -
FUND BALANCE FOR SMALL CITIES GRANT
EDA annual reports.xls: 4/14/2005
$175,615.55
$24,018.99,
$321,029.16
$6,260.00
($2,000.00)
$1,061.92
$1,256.00
$5,475.97
$7,381.27
$8,770.56
$9,741.95 >
$10,450.10
$9,058.60
$682.00
$554.00
$513.00
$570.00
$580,439.07
$75,626.64 - "--)
$317,458.65.. I
$87,500.00 >
- $60,453.62
- $23,198.02
$16,202.14
$580,439.07
tA'-~
~
'D
~c(l
;\
()
~ c;. . ':). ,
")l:\ ,? 6
<; 1> .f\8.
\~'\."O
($0.00)
(')g
~ S "':J. '\ C\ =l
\ ~n. t)t<t. ~"
").. '-\ - '-\- .
\ ~~
S':? .
~.
~'t:-.::I"
~,.
ox"'"
tr"~
>0.....
~
t., "f:Y
~o^
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l(v
2
.
URBAN DEVELOPMENT ACTION GRANT (UDAG)
FINANCIAL REPORT
December 31 , 2004
GRANT TOTALS. FSI
Payback began in January, 1988 for 12 years ending in January, 2000.
Annual principal and interest payback total is $27,971.40.
Principal
Interest
TOTAL
ORIGINAL
$256,957.71
$78,700.35
$335,658.06
PAID
$256,957.71
$77 ,315.88
$334,273.59
REMAINING
$0.00
$1,384.47
$1,384.47
"~#~--------~-_~#~'~I~I~~____--------------~--~------____~.
REVENUES
..
Principal Payback - FSI $256,957.71 \.t"'}..
Interest Payback - FSI $77,315.88 ~i)- \) .
Interest Income - Investment: .-1:> . ?.c;. q" ·
1990 $6,342.02 "1? "-\ "')-"" .
~. ~ .
1991 $8,593.59 ~ ~."t
.....
1992 $8,436.32 <7 S ~\
1993 $5,227.10
1994 $3,756.77 t ~ \ \ t') ~v
1995 $12,297.72 ,,>-V'
1996 $9,775.19
. 1997 $9,007.60
1998 $12,989.27 ru'-fA.G-3 ")..C9~O
1999 $13,128.25 .
TOTAL REVENUES $423,827.42
EXPENDITURES
1991 Transfer to GMEF (Tapper & Muller) $65,000.00 -
1992 Transfer to GMEF (Aroplax) $20,000.00 -
1993 Transfer to GMEF (Custom Canopy) $42,500.00 -
1996 Transfer to GMEF (Tapper) $100,000.00 -
1999 Transfer to GMEF (Aroplax) $100,000.00 -
1999 (2000) Transfer to GMEF (Mainline) $39,546.38 -
2000 Transfer to GMEF (TC Die Cast) $56,781.04 -
TOTAL EXPENDITURES $423,827.42
FUND BALANCE FOR URBAN DEVELOPMENT ACTION GRANT
$0.00
.
EDA annual reports.xls: 4/14/2005
.....
..,
MINNESOTA INVESTMENT FUND
FINANCIAL REPORT
December 31,2004
GRANT TOTALS - TWIN CITIES DIE CAST
Payback began in July, 2000 for 7 years ending in June, 2007.
Annual principal and interest payback total is $61,176.72.
Principal
Interest
TOTAL
ORIGINAL
$500,000.00
$95,747.11
$595,747.11
PAID
$198,418.18
$71,712.33
$270,130.51
REMAINING
$301,581.82
$24,034.78
$325,616.60
EXPENDED:
$468,266.60
$20,859.00
$10,874.40
$500,000.00
6/2/00
8/9/00
8/15/00
GRANT TOTALS - UMC/TOMANN
Payback began in October 2003 for 5 years ending in March 2008.
Annual principal payback is $19,280.64.
City keeps first $100,000 plus interest.
ORIGINAL PAID REMAINING
Principal $290,000.00 $12,609.60 $277,390.40
Interest $33,439.16 $9,890.41 $23,548.75
. TOTAL $323,439.16 $22,500.01 $300,939.15
EXPENDED: $92,138.56 4/17/03
$109,377.84 6/26/03
$88,483.60 9/4/03
$290,000.00
F__________________________~_~,~#~#~____________________*~~_4
REVENUES
Principal Payback - TCDC
Interest Payback -TCDC
Principal Payback - UMC
Interest Payback - UMC
Interest Income - Investment:
2000
2001
2002
2003
2004
$198,418.18
$71,712.33
$12,609.60 ) ~:2 ~ ~ e . () 1
$9,890.41
TOTAL REVENUES
$119.19
$3,071.00
$5,356.00
$7,678.00
$9,157.00
$318,011.71
EXPENDITURES
Prof Svc fees - TCDC
Legal fees - TCDC
Transfer to GMEF - 2004 WSI #023
TOTAL EXPENDITURES
$3,306.55
$824.75
$13,797.86
$17,929.16
_ ",~c..
.
FUND BALANCE FOR MN INV FUND
$300,082.55
EDA annual reports.xls: 4/15/2005
.
.
.
CENTRAL MINNESOTA INITIATIVE FUND (CMIF)
FINANCIAL REPORT
December 31, 2004
GRANTTOTALS~STANDARDIRON
Payback began in July, 1994 for 7 years ending in June, 2001.
Annual principal and interest payback total is $13,322.52.
EXPENDED:
$100,000.00
$100,000.00
1994
....,........,...,,--_.........,~---........,~""--_#~I~___...-.'~/____...-.'~I__.oIIIIIIIIII""#~#~I___.....-.'~,...
REVENUES
Loan Payback (incl grant fee) - Standard Iron
Interest Income - Investment:
2001
2002
2003
2004
TOTAL REVENUES
EXPENDITURES
Reimbursement to CMIF - S.1.
CMIF returned last payment #115
TOTAL EXPENDITURES
FUND BALANCE FOR CENT MN INITIATIVE FUND
$127,674.15
$114.00
$92.00
$81.00
$89.00
$128,050.15
$126,524.15
($1,100.21 )
$125,423.94
$2,626.21
....
~
.
.
EDA Agenda - 04/26/05
7.
Consideration to review for amendment the Business Subsidv Criteria and Bvlaws of
the EDA.
A. Reference and backl!round:
EDA Business Subsidy Criteria
This is a housekeeping item. According to the Business Subsidy Criteria: "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 ofthe City Council." "Amendments to these criteria
arc subject to public hearing requirements pursuant to Minnesota Statues, Section 116J. 993
through 116J.994. "
The criteria is attached for your review.
EDA Bv1aws
This a housekeeping item. According to the Bylaws: "The Bylaws of the Authority shall be
amended by a majority vote of the Authority membership at a regular or special meeting. The
amendment must be in written form."
B.
Alternative Action:
EDA Business Subsidy Criteria
1. A motion to recommend amending the Business Subsidy Criteria as follows
............................., requesting approval from City Council, and calling for a public
hearing.
2. A motion to accept the Business Subsidy Criteria of the EDA as written.
EDA Bylaws
1. A motion to recommend amending the Bylaws as follows ............... to be drafted in
written form.
2. A motion to accept the Bylaws of the EDA as written.
EDA Agenda - 04/26/05
.
c.
Recommendation:
Recommendation is alternative no. 2 for both the Criteria and Bylaws.
D. Suoportinl! Data:
Copy of Business Subsidy Criteria and Bylaws of the EDA.
.
.
2
MONTlCELW
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO, MINNESOTA
Business Subsidy Criteria
Public Hearing and Adoption the 31 st day of August, 1999
Public Hearing and Adoption of Amendments the gth day of November, 2000
}lublic Hearing and Adoption of Amendments the 24th day of April, 2001
1. PURPOSE
1 :01 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 1161.994, 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 116.1. 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 Deyelopment Authority ability to grant business
subsidies is governed by the limitations established in Minnesota Statutes
1161.993 through 1161.994.
3. PUBLIC POLICY REQUIREMENT
.
3:01 All business subsidies must meet a public purpose 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.
3
Monticello City Hall, 505 Walnut Street, Suite 1, Monticello, MN 55362-R831 . (763) 295-2711. Fax: (763) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (763) 295-3170. Fax: (763) 27] -3272
EDA Business Subsidy Criteria
4.
BUSINESS SUBSIDY APPROVAL CRITERIA
.
4:01 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 criteria will automatically be approved. Meeting these criteria creates no
contractual right on the part of any potential developer or the Economic Development
Authority.
4:02 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.
4:03 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.
4:04 A recipient of a husiness subsidy must make a commitment to continue operations at the
site where the subsidy is used for 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-hy-case basis, giving consideration to
the nature of the development, the purpose ofthe subsidy, local economic conditions, and
situational circumstances.)
The Economic Development Authority may determine after a public hearing that joh creation or
retention is not a goal of the subsidy. In those cases, the recipient must instead meet at least
one of the following minimum requirements (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, rehabilitation or redevelopment
of "blighted areas" as defined in Minnesota Statues, Section 469.002, Subd.ll ,
or must constitute a cost of correction conditions that allow designation of
redevelopment .districts under Minnesota Statues, Sections 469.174 to 4-69.179;
or
(2) The proposed subsidy must result in improvements to public infrastructure or
public facilities, including without limitations, sewers storm sewers, streets,
parks, recreational facilities, and other City facilities; or
(3) The proposed subsidy must remove physical impediments to development of
.
DAWNIWORD/POLlCIES 10/30/00
2
.a......J.J...--",J.... ............LJ.L#.,,_...~~ _J~~-'~~'~...J ~-------
land, including without limitation poor soils, bedrock conditions, steep slopes, or
similar geotechnical problems.
4:06 For any business subsidy that does not meet the requirements of Section 4:05, the recipient
..... must create or retain jobs as determined by the Economic Development Authority, as must meet
~ the minimum wage thresholds, described in Section 5:03, Greater Monticello Enterprise Fund
Guidelines, 1.(b) (whether or not the source of the subsidy is tax increment financing).
5. GREATER MONTICELLO ENTERPRISE FUND PROJECT EVALUATION CRITERIA
5:01 The Economic Development Authority will utilize the Greater Monticello Enterprise fund
to support the community's long-term economic goals.
5:02 Each Greater Monticello Enterprise Fund subsidy will be analyzed and evaluated by the
Economic Development authority. Each project shall be measured against the general
criteria in Sections 1 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
A uthori ty:
.
.
DAWN/WORDfPOLlCIES 10/30/00
3
tUf\ lillSIl1CSS :'lllDSIClY l.Tllena
GREATER MONTICELLO ENTERPRISE FUND GUIDELINES
CITY OF MONTICELLO
505 WALNUT 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 thi s 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 by complying with four or more of the criteria
noted in the next section. In all cases, it is mandatory that criteria # I be satisfied, which requires the
creation ofncw 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
establishing the definition of public purpose, this document is designed to outline the process involved
in obtaining GMEF financing.
DEFINITION OF PUBLIC PURPOSE
I. To provide loans for credit worthy businesses that create new jobs.
(a) One job is equivalent to a total of 37.5 hours per week.
(b)
At least 90% of the jobs 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 job and wage level goals require partial or full repayment of
the assistance with interest.
.
2. To provide loans for credit worthy husinesses that would increase the community tax base.
3. To assist new or existing industrial or commercial businesses to improve or expand their
operations. Considerations for loans shall take into account factors including, but not limited
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 compatibility of the proposed'
business as it relates to the comprehensive plan and existing zoning policies, and the potential
for adverse environmental effects of the business, if any.
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, federal and state grants, etc.
.
DAWN/WORD/POLICIES 10/30/00
4
.
.
.
EDA Business Subsidy Criteria
THE GREATER MONTICELLO ENTERPRISES
REVOL VING LOAN FUND POLICIES
1.
BUSINESS ELIGIBILITY
*
*
Industrial 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 businesses with worthy feasibility studies (Deny all
historical non~credit worthy husinesses)
$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
*
COMP ANION
DIRECT LOAN -
Example: Equity 20%, RLF 30%, and bank 50%. (All
such loans may be subordinated to the primary lcnder(s) if
requested by the primary lender(s). The RL,F loan is
leveraged and the lower interest rate of the RLF lowers
the effective interest rate on the entire project.)
*
PARTICIPATION LOAN - RLF buys a portion of the loan (the RLF is not in a
subordinate position, no collateral is required by the RLF,
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.)
Ill. USE OF PROCEEDS
*
Real property acquisition and development
Real property rehabilitation (expansion or improvements)
Machinery and equipment
*
*
IV. 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)
[lAWN/WORD/POLICIES 10/30/00
5
*
LOAN TERM -
EDA Business Subsidy Criteria
Minimum 10% equity EDA loan
Personal propeliy 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% 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 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 ofloan fee.
*
*
PREP A YMENT
POLICY -
*
DEFERRAL OF
PAYMENTS -
*
LA TE PAYMENT
POLICY
*
INTEREST
LIMITATION ON
GUARANTEED
DAWN/WORD/POLICIES 10/30100
*Fee to be paid by applicant to the EDA within 5 working
days after City Council approval of GMEF loan.
Nonrefundable.
No penalty for prepayment.
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.
Failure to pay principal or interest when due may
result in the loan being immediately called.
In addition to any other amounts due on any loan, and
without waiving any right of the Economic Development
Authority under any applicable documents, a late fee of
$250 will be imposed on any bon-ower for any payment
not received in full by the Authority within 30 calendar
days of the date on which it is due. FUlihermore, interest
will continue to accrue on any amount due unti 1 the date
on which it is paid to the Authority, and all such interest
will be due and payable at the same time as the amount on
which it has accrued.
.
6
EDA Business Subsidy Criteria
LOANS-
Subject to security and/or reviewal by EDA.
~
....,.
*
ASSUMABILITY
OFLOAN-
None.
*
BUSINESS EQUITY
REQUIREMENTS -
Subject to type ofIoan; Board of Directors will determine
case by case, analysis under normal lending guidelines.
*
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
exempt from bankruptcy).
Personal and/or corporate guarantees (requires
unlimited personal guarantees).
*
COLLATERAL -
*
*
*
*
*
NON-PERFORMANCE - An approved GMEF loan shall be null and void iffunds
are not drawn upon or disbursed within 180 days from
date of ED A approval.
.
*
NON-PERFORMANCE
EXTENSION -
The 180-day non-performance date can be extended up to
an additional 120 days.
1. A written request is received 30 days prior to
expiration of the 180-day non-performance date.
2. Approval of the EDA membership by majority
vote.
*
LEGAL FEE -
Responsibility ofthe GMEF 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.
.
DAWNIWORDIPOLlCIES 10/30100
7
EOA 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 five appointed members. EDA members arc appointed by the Mayor and confirmed by the City
Council. Formal meetings are held on a qUaJierly basis. Please see the by-laws of the EDA for more
information on the structure of the organization that administers the Greater Monticello Enterprise
Fund.
PARTICIPATING LENDING INSTITUTION(S)
1. Participating lending institutions(s) shall be determined by the GMEF applicant.
2. Panicipating lending institution(s) shall cooperate with the EDA 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 the EDA
the level at which the lending institution will participate in the finance package.
LOAN APPIJCA TION/ADMINISTRA TIVE PROCEDURES
The EDA desires to make the GMEF loan application process as simple as possible. However, certain
procedures must be followed prior to EDA consideration of a loan request. Information regarding the
program and procedures for obtaining a loan are as follows: .
City Staff Duties:
The Economic Development Director, working in conjunction with the Assistant City Administrator,
shall carry out GMEF operating procedures as approved by the EDA and Council. Staff is responsible
for assisting businesses 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 Greater Monticello Fund Guidelines. Staff
consideration of the preliminary loan application should take approximately one week.
Staff will ask applicant to contact a lending institution regarding financing needs and indicate to
applicant that fUliher action by the EDA on the potential loan will require indication of support
from a lending institution.
2. If applicant gains initial suppon from lending institution and if the preliminary loan applicati on
is approved, applicant is then asked to complete a formal application. If the preliminary loan
application is not approved by staff, the applicant may request that the EDA consider approval .
of the preliminary application at the next regularly scheduled meeting of the EDA.
DAWN/WoRD/POLlCIES 10/30100
8
.
.
.
EDA Business Subsidy Criteria
..,
.J.
If the preliminary loan application is approved, applicant shall complete a formal application.
Formal application shall includc a business plan which will include its management structure,
market analysis, and financial statement. Like documentation necessary for obtaining the bank
loan associated with the proposal is acceptable. Attached with each formal application is a
written release of information executed by the loan applicant.
4.
City staff will meet with applicant and other participating lender(s) to refine the plan for
financing the proposed enterprise.
5.
City staff shall analyze the formal application and financial statements contained therein to
determine if the proposed business and finance plan is viable. Staff 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 staff shall submit a written recommendation to the
EOA. A decision regarding the application shall be made by the EDA within 60 days of the
submittal of a completed formal application.
6.
The EOA shall have authority to approve or deny loans; however, within 21 days of EDA
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 FUNOING
"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 are
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. If such is the case, such funds must be
transferred to the debt service funds of the City to be 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 report detailing the status of the
Monticello Enterprise Fund.
FUND GUIDELINES MODIFICA TJON
1.
At a minimum. the EOA 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/POLlCIES 10/30/00
9
-
-
.
.
BYLA WS OF THE
ECONOMIC DEVELOPMENT AUTHORITY
ARTICLE I - THE AUTHORITY
Section 1. Name of Authority. The name of the Authority shall be the
"City of Monticello Economic Development Authority."
Section 2. Office of Authoritv. The office of the Authority shall be at the City Hall
in the City of Monticello, State of Minnesota, but the Authority may hold its meetings at such
other place or places as it may designate by resolution.
Section 3. Seal of Authority. The seal of the Authority shall be in the form of a circle
and shall bear the name of the Authority and the year of its organization.
Section 4. Establishment. The City of Monticello Economic Development Authority is e
established pursuant to Minnesota Statutes, Section 469.090 to 469.108, and adopted by Ordinance
Amendment No. 172, Chapter 3, City of Monticello, Wright County, Minnesota.
ARTICLE II - THE COMMISSIONERS
Section 1. Appointment Terms, Vacancies, Pay, and Removal.
Shall be in accordance to the Monticello Ordinance Amendment No. 172, Chapter 3,
Economic Development Authority, Section 2-3-1 : Creation.
ARTICLE III - THE OFFICERS
Section 1. Officers. The Authority shall elect a president, a vice president, a treasurer, a
secretary, and an assistant secretary at the annual meeting. A commissioner must not serve as
president and vice president at the same time. The other offices may be held by the same
commissioner. The office of secretary and treasurer need not be held by a commissioner.
Section 2. Duties and Powers. The officers have the usual duties and powers of
their offices. They may be given other duties and powers by the Authority.
BYLA WS.EDA: 5/13/91
AMENDED: 5/22/01
Page 1
Section 3.
Treasurer's Duties. The treasurer:
(1) shall receive and is responsible for Authority money;
(2)
is responsible for the acts of the assistant treasurer;
.
(3) shall disburse Authority money by check only;
(4) shall keep an account of the source of all receipts and the nature, purpose, and
authority of all disbursements;
(5) shall file the Authority's detailed financial statement with its secretary at least once a
year at times set by the Authority.
(6) shall prepare and submit an mmual report describing its activities and providing an
accurate statement of its financial condition to the City of Monticello by March I
each year.
Section 4. Assistant Treasurer. The assistant treasurer has the powers and duties of the
treasurer ifthe treasurer is absent or disabled.
Section 5.
Public Money. Authority money is public money.
ARTICLE IV - EXECUTIVE DIRECTOR
The Economic Development Director shall be designated as Executive Director of the Authority.
.
Section 1. Duties. The Executive Director shall have general supervision over the
administration of its business and affairs subject to the direction of the Authority. As secretary,
the Executive Director in his own name and title shall keep the records of the Authority, shall
act as Secretary of the meetings of the Authority and record all votes, and shall keep record of the
proceedings of the Authority in a journal of proceedings to be kept for such purpose, and shall
perform all duties incident to the office. The Executive Director shall keep in sole custody the seal
of the Authority and shall have power to affix such seal to all contracts and instruments authorized
to be executed by the Authority.
Any person appointed to fill the office of Executive Director, or any vacancy herein, shall have such
terms as the Authority fixes, but no commissioner of the Authority shall be eligible to this office.
ARTICLE V - MEETINGS
Section 1. Regular Meetings. Quarterly meetings shall be held upon oral or written
notice at the regular meeting place of the Authority on the 4th Tuesday of January, April, July, and
October. '
BYLA WS.EDA: 5/13/91
AMENDED: 5/22101
.
Page 2
Section 2. Annual Meeting. The annual meeting of the Authority shall be held in
conjunction with the regular April meeting at the regular meeting place of the Authority.
.
Section 3. Special Meetim!s. Special meetings of the Authority may be called by the
president or two members of the Authority for the purpose of transacting any business designated in
the call. All commissioners of the Authority shall be notified.
Section 4. Quorum. At any meeting of the Authority, the presence of four
commissioners shall constitute a quorum. If a quorum is not present at any meeting, those present
shall have power to adjourn the meeting from time to time without notice other than announcement
at such meeting until the requisite number of votes shall be present to constitute a quorum. At any
such adjourned meeting at which a quorum is present, any business may be transacted which might
have been transacted at the meeting as originally called. Any resolution, election, Ot other formal
action of the Authority shall be adopted upon the affirmative vote of a majority of the Authority
membership.
Section 5. Order of Business. At the regular meetings of the Authority the foJlowing
shall be the order of business:
.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Call to order.
Roll call.
Reading and approval of the minutes of the previous meeting.
Bills and communications.
Report of the Executive Director.
Report of committees.
Unfinished business.
New business.
Adjournment.
All resolutions shall be in writing and shall he copied in the journal of the proceedings of the
Authority.
Section 6. Unless otherwise specified in the agreement or in these bylaws, all meetings
of the Authority shall he conducted in accordance with Roberts' Rules of Order revised.
Section 7. Manner of Voting. The voting on aJJ questions coming before the Authority
shall be by roll call, and the yeas and nays shall be entered upon the minutes of such meetings.
ARTICLE VI - EMPLOYEES; SERVICES; SUPPLIES
Section 1. Emplovees. Subject to limits set by the appropriations or other funds made
available, the Authority may employ such staff, technicians, and experts as may be deemed proper
and may incur such other expenses as may be necessary and proper for the conduct ofits affairs.
.
BYLA WS.EDA: 5113/91
AMENDED: 5/22/01
Page 3
Section 2. Contract for Services. The Authority may contract for services of consultants,
agents, public accountants, and other persons needed to perform its duties and exercise its powers. .
Section 3. Legal Services. The Authority may use the services of the city attorney or
hire a general counsel for its legal needs. The city attorney or general counsel, as determined by
the Authority, is its chief legal advisor.
Section 4. Supplies. The Authority may purchase the supplies and materials it needs to
carry out Sections 469.090 to 469.108.
Section 5. City Purchasing. An authority may use the facilities of its city's purchasing
department in connection with construction work and to purchase equipment, supplies, or materials.
Section 6. City Facilities, Services. A city may furnish offices, structures and space,
and stenographic, clerical, engineering, or other assistance to its authority.
Section 7. Dele~ation Power. The Authority may delegate to one or morc of its agents
or employees powers or duties as it may deem proper.
ARTICLE VII - POWERS
Section 1. Functions, Powers, and Duties. Shall be in accordance to the Monticello
Ordinance Amendment No. 172, Chapter 3, Economic Development Authority, Section 2-3-4:
Functions, Power, and Duties.
.
Section 2. Limitations of Power. Shall be in accordance to the Monticello Ordinance
Amendment No. 172, Chapter 3, Economic Development Authority, Section 2-3-5: Limitation of
Power.
..
ARTICLE VIII - AMENDMENTS
Section 1. Amendment to Bvlaws. The bylaws of the Authority shall be amended by a
majority vote of the Authority membership a regular or special meeting. The amendments must be
in written form.
Section 2. In any instance where these bylaws are in conflict with the Ordinance
Amendment No. 172, Chapter 3, Economic Development Authority, such Ordinance Amendment
shall control.
BYLA WS.EDA 5/13/91
AMENDED: 5/22/0 1
Page 4
.
Section 3.
These bylaws are effective upon their adoption by the Authority.
..081.
.....
Dated:
,1990.
Signed:
President
(Seal)
Executive Director
.
BYLA WS.EDA: 5/13/91
AMENDED: 5/22/0]
.
Page 5
.
.
.
8.
EDA Agenda - 04/26/05
Consideration of an u date on the a roved GMEF Loan No. 024 between the E))A
and Tapncr's HoJdin2:s LLC.
A. Referenec and baek2:round:
Thc EDA approved GMEF Loan No. 024 on February] 0,2005 for Tapper's Holding LLC.
The $200,000 real estate rehabilitation loan will assist in the financing of the construction of a
25,000 sq ft addition to an cxisting 60,000 sq ft building. Forty jobs will be created by the
tenant, Strategic Equipment and Supply Company, at wages per the Agrcement. Some
changes to the Loan Agreement and Mortgage have been made per the request of Tapper's
attorney (See Attachment A) No action is necessary by the FDA.
No building or site plans have been submitted to the city. According to Mr. Tapper, the plans
prepared by Kinghorn Group are forthcoming in the next few days. Stcel and concrete has
been ordered. Lender has committed to the project and just yesterday, SBA agreed to the
project providing a fixed interest rate to thc developer. Strategic will occupy the existing office
space starting June], 2005. Closing and disbursemcnt of the EDA funds will take place upon
closing of the banklSBA loans and approval of building/site plans. Issuance of building permit
f()llows.
!Vlessage
luge I 01 1
Ollie Koropchak
.
from: Eddington, Julie A [JEddington@Kennedy-Graven.com]
Sent: Th ursday, April 14, 2005 1:45 PM
To: Ollie Koropchak
Subject: FW: Monticello EDA Documents
Ollie,
Attached please find comments to the document you forwarded to the Developer regarding the EDA
Loan Documents. I will review this afternoon and give you a call.
Julie Eddington
Kennedy & Graven, Chartered
470 U. S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
Phone 612-337-9213
Fax 612~337~931O
j edd i ngton@kennedy-graven.com
~-mOriginal Message--m
From: Stefanie Brown [mailto:sbrown@rnoon.com]
Sent: Thursday, April 14, 2005 12:39 PM
To: Eddington, Julie A.
Cc: BilIT@WestlundDistributing.com
Subject: Monticello EDA Documents
.
Please see attached letter.
Stefanie L. Brown
Rinke Noonan
Suite 300, US Bank Plaza
St. Cloud, MN 56302
(320) 251-6700
NOTICE: This electronic mail transmission may contain an attorney-client,
work-product or trade-secret communication that is privileged at law. If
you are not the intended recipient, do not read, distribute, or reproduce
this transmission. It is not intended for transmission to, or receipt by, any
unauthorized persons. This E-mail (including attachments) is covered
by the Electronic Communications Privacy Act, 18 U.s.c. 2510-2521.
If you are not the intended recipient, you are hereby notified that any
retention, dissemination, distribution or copying of this communication
is strictly prohibited. If you have received this electronic mail
transmission in error, please delete it from your system without
copying it and notify the ~eA.de1'by reply e-mail or by calling
320~251 ~6700, so that our address record can be corrected.
.
4/14/2005
.
April 14, 2005
RINKE
NOONAN
ATTORNEYS
A T
l. A W
SUITE: 300. US BANK PL.A~A, f;:i'. O. Box 1497
l 015 W. 8,. GERMAIN STRI;ET
S;T. CLOUD, MtNNESDTA ~e;30:a-f497
T2.t...EPI-IONE 320~251 y6'700, F"AX :320-556-3500
ElvIAI...: MArt.@RNOON.COM
WWW.RNOON.cOM
Julie Eddington
Kennedy & Graven, Chartered
470 US Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
Sent Via Email: ;eddinflton(ipkennedV-fIraVe11..com.
Facsimile (612) 337-9310. & U.S. Mail
Re: Monticell EDA Documents
Our File No. 18608.002
Dear Ms. Eddington:
r am the attorney representing Tapper's Holdings, LLC with regard to the leasing of an addition to
be constructed at their existing Monticello facility. It is my understanding that part of the financing
for such addition shall be obtained through a loan through the Economic Development Authority
for the City of Monticello. We have received copies of the loan documents from the Monticello
EDA, which were provided to my client by Mr. Ollie Koropchak, and our comments regarding
these documents are as follows:
.
1.
~
~
-,
We understand that under Section 3(b)(iv) of the Loan Agreement Tapper's
Holdings will be responsible for paying the full amount ofthe EDA's legal fees. We
would request that you provide us with an estimate of the legal fees prior to the
execution of these documents. We would also request that you include a provision
stating that the EDA agrees to provide a prompt invoice for payment of such legal
fees by Tapper's.
2.
The documents state in several areas that Tapper's warrants that there will be no J'2A,...~ ~~ ..,..~
other liens, charges or encumbrances on the property; however, there is currently a d
loan from Steams Bank encumbering the property and there will he further charges
related to the construction placed against the property. Therefore, the documents
must reference an exception under the relevant paragraphs for future development Y\.~..~, ~
fInancing and the existing loan with Stearns Bank. - ~~
We request the removal of Section 9(b) on indemnification. My client is willing to
include an indemnification paragraph and to pay the indemnification amount upon
demand, however, it is unacceptable to place my client in jeopardy of having the
3.
PApri114. Z005:CZOO\ 04 14
F:IDATAI18608\OO2\L'''.r Julie Eddi"S'on 0414 2005.wpd krp
O. Mich8el Noonan
WIlHam A. SrnOleyl
Kurt A. Oetar'
Bi!;Irrett L. Colombo
James L. WIant
RrN~r:, NOON'AN, SMOLEY. Q[iEfi!. COL0I\.100, WIAN'r, VoN KQR~~ a HOSB!::. LTD.
Gertlld W, Von Korff
Sharon G. Hobbs
Oavid J. M&YBrsUl.J.8
John .J. Meuer!il
Roger C. Justln::!,4
John J. Babcock,
Jill A. Adkins
Igor S. J..lI:nZr'HitrJ
Gary~. L~!Slico4,[;
John C. kolb
SCOtt ~. Ham~k
PLimela A. Steck men I
Jason H. Thomas
Stefanie t..... a"own
Tonya T. Hihkl!!lr'neyer
nya,n J. Hi!tton 1
cra\.ldj~ M, ReVerrtii;mn
RaGheal M. Ho!lend"'l,~
Craig L. Andreason
Benj~min B. Bohnsack;)
t. O'J-sliflnd n"(1((81 tmd,.r F/IJ/9 114.2. A r1d~' PrOperly LlJW S{J~~ilJJj!llt cIJ'lf(irld by rl16 Minn.S;;m8 StatG- B~l" A!iJ~ocllJtll:m. 3. AdmirtolO f(J prDclicel8vv In W,,:;cOr'l'~in.
4. At;lmh:red to pr(lcr/CIt IBIN irI NO!"fh D[lkOUI. o. Af;lm/'r~d to pI"Qc.ri~1t /61W In SOuth DDkortl. 8. ShDrt;Jyrn@ Cot,.!l'lty E)(l!Jrninlilf of Tit/.so.
.-
-
Julie Eddington
April 14, 2005
Page 2
.
entire Note called due upon notice by the EDA.
/
4.
Section 7 contains a paragraph which states that the EDA shall have.;W:g right to
any proceeds relating to taking of any part of the property. We feel this is a very
extreme provision and we request that it be removed. - ~ ~-'-
r ,~.--
We note that under the Guaranty, the EDA has the right to seek damages or 's; ,,"0 \ ~ ~
payment from either Tapper's Holdings, or from Mr. Bill Tapper and his wife, 1]::' ~,..,
Barbara, personally, the discretion of the EDA. We request that this provision, be { -L.., '\
amended so that the EDA first look for repayment from Tapper's Holding, LLC a ~tJ'I, \~'}!(
then to the Tappers, personally, in the event that the LLC does not make timely V\It '.J ~ C\
repayment. /'iLu.)'PI.3-V
5.
6. For the purpose of clarity, we would like to point out that there are couple of
grammatical errors and some misnumbering through out the documents, spccifically
Section 6(b) in the Loan Agreement, which refers to a Section 3.4(c) which is not in V
existence, and the Mortgage, which refers to a Section 19 which also does not exist.
7.
We would also like you to be aware of the fact that Tapper's Holdings, LLC will ./
need to obtain a consent from Stearns Bank for the additional encumbrance and \..0""'"
contractual obligations on the property. We will inform you once we have secured
such consent.
We would appreciate receiving revised copies of the EDA loan documents at your earliest
convenience. If you have any questions or comments regarding our requested changes, please
contact Mike Noonan or me.
Sincerely,
RINKE-NOONAN
By~'~~
~ St~lrue L. Brown
SLBIkrp
cc: Bill Tappcr (Sent Via Email: billt@westlunddistributing.comandU.S.Mail)
FApri114. 2005,C2001 04 I'
F:\DATAI1860SI002ILetter Julie Eddington 04 14 2005,wpd krp
Message
Page 1 of 1
Ollie Koropchak
.
From: Eddington, Julie A [JEddington@Kennedy~Graven.com]
Sent: Tuesday, April 19, 20057:22 PM
To: Stefanie Brown
Cc: Ollie Koropchak
Subject: Monticello EDA/Tapper's Holdings, LLC Loan Documents
Stefanie and Ollie,
Attached please find clean and black-lined versions ofthe Loan Agreement. I have also included a clean
copy of the Mortgage. No changes were made to the Promissory Note or the Guaranty.
In answer to your request for an estimate of legal fees, I estimate all legal fees related to this matter will
be less than $1,500. "<q~~. ~
Ollie, please note that the Tappers' plan on receiving additional financing from the Stearns Bank for the
expansion. As we discussed, the EDA plans on closing its loan at the same time the Tappers' receive
this additional financing. I have included the additional financing from Stearns Bank as a prior lien in
Section 17 of the Mortgage.
Please review and let me know if there are any additional comments. r will be back in the oUice on
Monday, April 25.
.
Julie Eddington
Kennedy & Graven, Chartered
470 U. S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
Phone 612-337-9213
Fax 612-337-9310
j E::dd it)gjon@kE::nnedy-graven.com
.
4/20/2005
3. Disbursement of Loan Proceeds.
.....
(a) The Loan proceeds shall be paid to Borrower on
other date as the parties hereto agree ("Loan Closing Date").
, 2005 or such
-
(b) The following cvcnts shall be conditions prcccdent to the payment of the
Loan proceeds to Borrower on the Loan Closing Date:
(i) Borrower having executed and delivered to EDA, prior to the Loan
Closing Date and without expense to EDA, executed copies of this Agreement
and the Note, and Borrower further having caused to be cxecuted and delivered to
EDA a guaranty in substantially the form set forth hereto at Exhibit C (the
"(-' t ")
.Juarany ;
(ii) Borrower having provided evidence satisfactory to EDA that
Horrower has established a separate accounting system for the exclusive purposc
of recording the rcceipt and expenditure of the Loan proceeds;
(iii) Borrower having paid $200 to EDA as a loan origination fee;
.
(iv) Borrower having paid to EDA the full amount of the legal fees
incurred by EDA in the negotiation and preparation of this Agreement and any
other agreement or instrument securing the Loan (and EDA shall nrovide to
Borrower an invoice for such lel!al fees nromntIv UDon receint);
(v) Borrower having provided evidence satisfactory to EDA that
Borrower has obtained adequate financing to complete all activities related to
Borrower's undertakings on the Property;
(vi) Borrower having obtained a building permit for construction of a
25,000 square foot expansion to the existing distribution facility on the Property;
and
(vii) Borrower having submitted an executed lease agreement between
Borrower and Strategic Equipment and Supply Corporation ("Tenant") for a
portion of the Property with a term of not less than five (5) years.
4. Representations and Warranties. Borrower represents and warrants to EDA that:
(a) Borrower is duly authorized and empowered to execute and dcliverthis
Agreement, perform all obligations hereunder, and to borrow money from EDA.
.
(b) The cxecution and delivery of this Agreement, and the performance by
Borrower of its obligations hereunder, do not and will not violate or conflict with any
provision of law and do not and will not violatc or conf1ict with, or cause any default or
event of dcfault to occur under, any agreement binding upon Borrower.
258817(JAE)
MN325-18
2
.
(iv) If the goals described in clause (iii) are not met, such failure shall constitute
an Event of Default on the part of Borrower.
(v) The subsidy is needed to induce Borrower to continue its business at this site,
induce Tenant to relocate its operations to this site, and to mitigate the cost of the Project.
(vi) Borrower does not have a parent corporation.
(vii) In addition to the Loan, Borrower expects to receive a note issued by the
I-lousing and Redevelopment Authority in and for the City of Monticello in the estimated
amount of up to $] 00,000 to be funded by tax increment financing. This note will also
constitute a business subsidy under the Business Subsidy Act. The Ilousing and
Redevelopment Authority in and for the City of Monticello and Borrower will enter into
a separate business subsidy agreement related to the note.
(viii) The fair market value of the subsidy provided to Borrower is $200,000,
the principal amount of the Loan.
(b) Job and Wage Goals. Within two years after substantial completion of the Project
(the "Compliance Date"), Tenant shall cause to be created at least 40 full-time equivalent jobs on
the Property and shall cause the wages for all employees on the Property to be no less than
amounts shown in the table below, exclusive of benefits.
.
Full- Time Equivalent Jobs Hourlv Wage
8 $12.00
5 $14.00
5 $16.00
2 $18.00
3 $20.00
17 $22.00
Jobs created by Borrower or other tenants within the Project will count toward the requirements
of this Section. Notwithstanding anything to the contrary herein, if the wage and job goals
described in this paragraph are met by the Compliance Date, those goals are deemcd satisfied
despite Borrower's continuing obligations under Sections 6(a)(iii) and 3.1fi(c). The EOA may,
after a public hearing, extcnd the Compliance Date by up to one year, providcd that nothing in
this section will bc construed to limit the EDA' s legislativc discretion regarding this mattcr.
.
(c) Reports. Borrower must submit to the EDA a written report rcgarding business
subsidy goals and results by no later than March 1 of each year, commcncing March 1, 2006 and
continuing until thc later of (i) the date the goals stated Scction 6(a)(iii) are met; or (ii) if the
goals are not mct, the date the Loan is repaid in full. The report must wmply with Section
116.T.994, Subdivision 7 of thc Business Subsidy Act. The EDA will provide information to
Borrower regarding thc requircd forms. If Borrower fails to timely file any report required under
this Section, the EDA will mail Borrower a warning within one week after the required filing
258817(JAF)
MN325-IX
5
~
interest rate on the Note and shall be payable, with interest, upon notice from EDA to Borrower
requesting payment.
......
6. INSPECTION. EDA or its agent may make reasonable entries upon and
inspections of the Property.
7. CONDEMNATION. The proceeds of any award or claim for damages, direct or
consequential, in eonnection with any condemnation or other taking of any part of the Property,
or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to EDA.
In the event of a total taking of the Property, the proceeds shall be applied to the sums
secured by this Mortgage, whether or not then due, with any excess paid to Borrower. In the
event of a partial taking of the Property in which the fair market value of the Property
immediately before the taking is equal to or greater than the amount of the sums secured by this
Mortgage immediately before the taking, unless Borrower and EDA otherwise agree in writing,
if any, the sums secured by this Mortgagc shall be reduced by the amount of the proceeds
multiplied by the following fraction: (a) the total amount of the sums secured immediately before
the taking, divided by (b) the fair market value of the Property immediately before the taking.
Any balance shall be paid to Borrower. In the event of a partial taking of the Property in which
the fair market value of the Property immediately before the taking is less than the amount of the
sums secured immediately before the taking, unless Borrower and EDA othcrwise agree in
writing or unless applicable law otherwise provides, the proceeds shall be applied to the sums
secured by this Mortgage whether or not the sums are then due.
.
EDA acknowledrrcs this Mortrral!e is subordinate to the licns soccificallv referred to
in Section 17 hercof,
8. FORBEARANCE BY EDA NOT A WAIVER. Any forbearance by EDA in
exercising any right or remedy shall not be a waiver of or preclude the exercise of any right or
remedy.
9. SUCCESSORS AND ASSIGNS BOUND. The covenants and agreements of this
Mortgage shall bind and benefit the successors and assigns of EDA and Borrower.
10. LOAN CHARGES. If the loan secured by this Mortgage is or becomes subject to
a law which sets maximum loan charges, and that law is finally interpreted so that the interest or
other loan charges collected or to be collected in connection with the loan exceed the permitted
I imits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the
charge to the permitted limit; and (b) any sums already collected from Borrower which exceeded
permitted limits will be refunded to Borrower. EDA may choose to make this refund by
reducing the principal owed under the Note or by making a direct payment to Borrower. If a
refund reduees principal, the reduction will be treated as a partial prepayment under the Note.
.
11. NOTICES. Any notice to Borrower provided for in this Mortgage shall be given
by delivering it personally or by mailing it by first class United States mail, postage prepaid,
return receipt requested. The notice shall be directed to Borrower at 3935 Walden Lane,
258817(JAE)
MN325-18
A-3
a
-
acceleration following Borrower's breach of any covenant or agreement in this Mortgage. The
notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less
than 30 days from the date the notice is given to Borrower by which the default must be cured,
provided, however, if Borrower is diligently pursuing a cure, Borrower shall have such
additional time as is reasonably necessary to complete the cure; and (d) that failure to cure the
default on or before the date specified in the notice may result in acceleration of the sums
secured by this Mortgage and sale of the Property. The notice shall further inform Borrower of
the right to reinstate after acceleration and sale. If the default is not cured on or before the date
speci1ied in the notice, EOA at its option may require immediate payment in full of any sums
secured by this Mortgage without further demand and may invoke the power of sale and any
other remedies permitted by law. EDA shall be entitled to collect all expenses incurred in
pursuing the remedies provided in this paragraph 15, including, but not limited to, reasonablc
attorneys fees.
If FDA invokes the power of sale, EDA shall cause a copy of a notice of sale to be served
upon any person in possession of the Propcrty. EDA shall publish a notice of sale, and thc
Property shall be sold at public auction in the manner prcscribed by law. EDA or its designcc
may purchase thc Property at any sale. The proceeds of the sale shall be applied in thc following
order: (a) to all expenses of thc sale, including, but not limited to, reasonable attorneys fees; (b)
to all sums secured by this Mortgage; and (c) any excess to the person or persons legally entitlcd
to it.
16. RELEASE OF MORTGAGE. Upon paymcnt of all sums secured by this
Mortgage, EOA shall discharge this Mortgage without charge to Borrower. Borrower shall pay
. any recordation costs.
17. PRIOR LIENS. EDA acknowledQ:es this Mortl!aQ:e is subordinate to
nreviouslv recordcd liens on the Pronertv. includinl! the followin!!:
(a) MortQ:aQ:e in the amount of $3.248.0QO for the benefit of Stearns Bank
National Association. recorded in Wril!ht County on November 16.2004. Document
No. A 935560:
(b) Mort!!al!e in the amount of $162.000 for the benefit of Stearns Bank National
Association. recorded in Wrirrht County on N ovemberl6. 2004. Document No. A
935561: and
( c) Mortrral!e in the amount of $ for the benefit of Stearns Bank
National Association. recorded in WriQ:ht County on .2005. Document
No.
.
258817(JAE)
MN325-18
A-5
Monticello Business Center - The Council accepted the Feasibility Study, held a public hearing,
ordered the project, approved plans and specs, and authorized advertisement for bids. Bids
are to be received on May 6, 2005, for beginning construction May 23, 2005 and substantial
completion November 2005. (Chelsea Road extension [90 Street to CSAH 39], School Blvd
[Chelsea to 1,330 feet south] and northwest lift station and force main, utilities, and appurtenant
work. )
Marketing Committee - Registcrcd for the Twin Cities Advanced Productivity Exposition by
the Socicty of Manufacturing Engineers at the Minneapolis Convention Center, May 3-5,2005.
Signed Contract for billboard rental along 1-94 between Rogers and Maple Grove beginning
July through November, 2005. Website: www.MonticclloLand.com Maps: Location, access
and concept of Business Center in draft form. Brochure inserts updated and about ready for
print. Mailed 75 gratis invitations for the Chamber Golf Outing, May 19, purchased beverage
cart, and will insert granola bars with labels advertising Business Center in Chamber give-away
bag. Next Expo in November is for medical industry. Yet to do radio talk shows, metro area
golf advcrtising, and erect sign along freeway as infrastructure construction begins.
A VR site location - Mayor Herbst and Council member Posusta continue to meet with A VR to
assist in finding an alternative relocation site. Would do temporary site if permanent site
available near proposed 1-94 and Orchard Road interchange. City working with Xccl to site
an interchange loeation aeeeptable to both the City and Xecl (seeurity).
Dahlheimer Distributing - In conversation with Greg Dahlheimcr, thcy have a purehasc
agreement to purchase approximately 40 acres in Big Lake Township at the corner of County
Road 11 and Highway 25. Some things to still work out. Monticello made them an offer on
land for $.95 per acre with no assessments (6 acres) and $1.58 per acres for additional 3
acres.
E) Goal setting and Team Building Meeting - The Council and City Administration staff met on
Saturday, April 16, for 5.5 hours to set goals led by an outside consultant. For your
information, one of the goals of the Council is to research the potential to combine or merge the
HRA and the EDA.
F) Wage and Job Reports to the State of Minnesota - GWJ, Inc, Tapper's, UMC, WSI, and
TCDC (City/Federal dollars) satisfied their job and wage commitments. UMC and WSI both
exceeded their commitments. See attached.
G) April II, the Council authorized to procecd in exploring fiber optic service options for the City
of Montieello as a marketing tool for the industrial park and step-up housing.. Next step to
bring a consultant or experienced community to cducatc the Council and self on provider
options. I DC recommended the Council move ahead after a prcsentation by Council Member
Mayer following attending a MN FiberFirst Conference.
H) April 11, Council withheld authorizing public improvements for Block 35 parking lot.
.
B)
C)
.
D)
.
EDA Agenda - 04/26/05
9.
Executive Director's Report.
A)
.
.
.
I)
J)
K)
L)
M)
EDA Agenda - 04/26/05
Mayor Herbst intcrcstcd in procecding with redevelopment of the four blocks at the intersection
of Ilwy. 25 and Broadway. Fluth continucs to slowly move forward on Landmark Square II.
Will have an update by developer on another potential downtown rcdevelopment.
HRA approved their first Transformation Home Loan. Total of nine inquiries, two more with
possibilities.
Response from Medtronic's. They checked this area for new satellite campus but found thc
demographic was not right. Will request their targeted demographics.
Rainbow Enterprise expanding this year. IRTI plan to construct a small metal structure for
storage of materials.
Companies yet to visit: Bondhus, Walbord, and one lead.
2
03/31/05 THU 16:44 FAX 7632715249
UMC, INC.
141002
~';.
UMC Incorporated
Employment Da 'F Actual
3/31/2005
Actual
Job Job'" Job'"'" Jobs Jobs Jobs
Waae Ranae Retention Creation Creation As of 3/31/2005 Retained Created
$10.00 $11.99 2 1 2 2 0
$12.00 $13.99 5 2 2 6 5 1
$14.00 $15.99 6 4 3 11 6 5
$16.00 $17.99 12 4 6 15 12 3
$18.00 $19.99 8 4 17 21 8 13
$20.00 $21.99 17 4 20 17 3
$22.00 20 1 2 44 20 24
TOTALS 70 20 30 119 70 49
... Job Creation Goals from HRA Agreement
......Job Creation Goals from MIF application
.
.
wc;,~
l
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1':(~J'-';;:;;:-ll-'~)I'liI~~,'II('\~(J-I-0'~\'agc ~(II~g()ri",;,iO;ltcHlc the ntDllher () I adu;d ,i()hs.crealcd >Indi()r rCl>lilled ~"ICC the h~llelil dMe and lhe adll:tI
h()urly valuc ()I' any cmpIO\~r-pl'Ovided heallh insurancc t'tll'lhose ,inbs, U!lJiJ' /I'IIliciI!(')o!! CI'C(II;m In/i,ll-lim(' ('lfllil',,/cn/," il\'o/I (II'I'
1I1111h/(' 10 SC/Ji/l"llIcjO!! (,/'(,/111011 ill/o.fi,';;', om/p"r/-lil/I(' /)O,l'IIiOIl.l',)
1111111'1)' Wa~e
(l,xcluding lIenclih)
Full-time
.foil
Crelltilln
~/
FTE (.'!..!.'.!Y ifllnallle tll
stated as FTIPT)
.filII Creation
.Ioh Hetention
II ou rly Value of
1 ((::dl11 Insur:lncc
f€!U 11...1, nrlO . ,I \. ~"'_
\1r\~ ,GO ""b ~~
$~)$X,')()
")~ \\\.e:JO
~(, 1\~~)~(1;
$1~~t5'O
~,OO l" j;1-49()
,~5,Q~ l1~~:h~l1)
$\ ~'lj ,00
32, Ilns the r~cipi~nl nChi~~~(See 0uestiol1~~and 35) and I\dlillcd nil oblil'.ations stipulated inth~ ~r~Xl (tl~ ~
[] Yes UNo C ~O ~ "'" ,
S'=i:I:'lUII'11/'1'~IIII).
.HrtrfT0Tti () II
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Section 5: Redpicnts Fllilin~ to Fulfill Ohligations
(On 1101 COII//i/elt' Ihis .1'ce/i0I1 1/1'011 COII/plelcd il 0l111110lher MB/IF slIhm;l/('d 10 DEEO,)
33. During the pcriod J:II1UlU'y I. 2004'thl'Ough I)eccmlx;r 31, 2004. did your lIrgllnizationlwve an)' re<:ipicnts who 1:lilcd lO 11.:p("l as required
by Minn, Slat. ~ II (J.I,')<)3 and ~116J_9()4? (Mork 011(',)
DYes (lnt.!II.'(lle I!!I' I1W11(' nf'l'lIch recipil'l7t/ili/il1.\; 10 rC/J(JI'Il/lId Ih~ \'l1//l1' of'suh,l'idy orjinl/ncilllllssi,I'wl1ce IIwl/rded IIJ 111"1
r~cipienl, ,11{(tch addilionl// pages if'l1cccsmn',)
TYIK or subsidy or assiSlallce (Sce ()!I~sllons ;:.1 '" 25,)
Value lIl' subsidy or "ssistanc~
Namc or rccipienl
o No
~- ~ . -.
34, lJid YOUI' organizalion have anv rcciplcnts who rnilcd to achieve any gmils or I'ulllll any other obligatl(JJ1s under ,111 agl'~"melll signed on
or ,llkr .I nnllury I. 2(X14, that wer~ required to be rullillcd by the lime or this l'eport'1 (A/({I'k line,)
[] Yes (( '1JII1p/CIC ,he I'ell/ainder of'lhis sectio!/.)
[J No (Slop hcre ,U1d SlIbmit1()n11to DEED)
For qLl~stiol1s 35-39: !'rovid<: the following inronl1alion 1'01' each recipienl rniling to rulllll goals or ,my other terms 01"<.111 agreemel1tlhlll \\'CI-C
to be attained by the tine ol'reportino., (Alweh "ddiliot1l1/ !JI1,f!,~S i/nec~.Isill'l'.) 'l
135' Inl()rnl<Itiol1 Oil recipient and ,lgreemcnt:
Name 01" recipient in d<:l:llIlt
Inilial value or subSidy or assiswn~c
Type or subsidy or ussislan~~
City/lip "ode or r~cipicn(
Strcel address or n;eipienl
Outstandillg valllc Ill' subsiuy
ur a~sistallc<,:
3(" R~,.lson(s) ((Jr ddaull (AI(lrk II//Ihl/l IIfJfJl\,):
o recipi~nt ceased opel'Cllioll
o re"ipielll relo<:ald to a dilh:rellt conll11llI\ily
U rccipicnl \Vas un,.\hlc 101111 vacalll positions
[] other L)/}('c!/1' /'ellson)
___=,_1
M 11111"::0\" 1 1 11:-: i""::' 1\,,:;i::I:\I\(:C: ['orm (112/0 [/o:i 1
Jl4.lg~' .1 or ')
I )cpl. Ill" J':mplnvlrwll\ :ultll.,l'(l)){}1l11(" I hwd(\pIlH~nl