EDA Agenda 02-23-1999
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ANNUAL MEETING AGENDA
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, February 23, 1999 - 7:00 p.m.
City Hall
MEMBERS: Chair Ron Hoglund, Vice Chair Barb Schwientek, Assist Treasurer Ken Maus,
Clint Herbst, Roger Carlson, Bill Demeules, and Damn Lahr.
ST AFF:
Treasurer Rick W olfsteller and Executive Director Ollie Koropchak.
GUEST:
Joe Groebner, Mainline Distribution Properties, LLC
1. Call to Order.
2. Consideration to approve the November 17, 1998 EDA minutes.
3. Consideration of adding agenda items.
4. Consideration to review for approval the preliminary GMEF loan application from
Mainline Distribution Properties, LLC.
5.
Consideration to approve or deny GMEF No. 015 for Mainline Distribution Properties,
LLC.
6. Consideration to elect 1999 EDA officers.
7. Consideration to review and accept the year-end EDA Financial Statements, Activity
Report, and proposed 1999 Budget.
8. Consideration to review year-end balances of the GMEF, DMRF, UDAG, and ERG
Funds.
9. Consideration to review the GMEF Guidelines for possible amendments.
10. Consideration to review the DMRF Guidelines for possible amendments.
11. Consideration to adopt priorities for redevelopment of the North Anchor (riverfront) and
appoint two representatives to the Subcommittee.
12. Executive Director's Report.
13. Other Business.
14.
Adjournment.
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MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, November 17, 1998 - 7 p.m.
Members Present:
Absent:
Staff:
Chair Ron Hoglund, Assistant Treasurer Ken Maus, Bill Demeules and
Darrin Lahr.
Vice Chair Barb Schwientek, Clint Herbst and Roger Carlson.
Executive Director Ollie Koropchak, Recording Secretary Nancy Whalen.
1. Call to Order.
Chair Ron Hoglund called the EDA meeting to order at 7 p.m.
2. Consideration to approve the August 11. 1998 EDA minutes.
3.
4.
A MOTION WAS MADE BY BILL DEMEULES AND SECONDED BY DARRIN
LAHR TO APPROVE THE AUGUST 11, 1998 EDA MINUTES. Motion carried
unanimously.
Consideration of adding agenda items.
A. Chair Ron Hoglund stated that it was not always possible for him to stay for the
entire DA T meetings every two weeks. He asked if anyone on the EDA wished to
replace him as a representative on the DA T Committee. No one expressed an
interest in being part of the committee; therefore, Ron Hoglund will continue to
serve on the DA T Committee.
B. No other new business.
Consideration to review for ap~roval/disapproval the DMRF application for 219-225
West Broadwav.
Executive Director Ollie Koropchak stated that the DMRF application was from Dorothy
Topel, property owners of the building occupied by Antiques of Monticello and Barbara
Lee Dance Studio. DA T met on two separate occasions regarding the Topel's
application. DA T recommended approval pending completion of the application
incorporating DA T recommendations, artwork, and cost estimates. Also, with the
recommendation that the rear accessory building closest to the 225 entrance be included
in the grant application based on the finding that its proximity makes it visually a part of
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EDA Minutes - 11/17/98
the rear facade.
Chair Hoglund questioned the window replacement for $450. DA T requested the Topels
get two bids for the window replacement. Damn Lahr also asked if the window had been
broken and whether this was routine maintenance. Ollie Koropchak stated that OAT had
requested replacement of the window.
Executive Director Ollie Koropchak stated that the existing sign would be removed and a
new sign placed on the front of the building. Also, the entire building will be painted and
an identification sign will be hung at the back of the store. Ms. Koropchak is asking the
EDA to approve up to $2500 for each front, side and rear facade improvements of the
building so upon completion she will be able to distribute the funds.
Chair Hoglund asked the type of sign that was planned and who was doing the painting.
Ms. Koropchak stated that Randy Salo was doing the signage and Jon's Painting was
doing the painting.
The $2500 per front and rear would allow coverage of any additional items such as
lighting and rear facade costs.
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Chair Hoglund asked if possibly insurance would cover the painting because of storm
damage. Also, questioned whether the EDA should be paying to fix a broken window
just because it is broken.
Ken Maus stated the need for the EDA to define the difference between revitalization as
opposed to maintenance.
Ms. Koropchak stated the Topels had approached DA T after commencing to paint their
building.
Darrin Lahr expressed his concern with what is considered maintenance and what is
considered revitalization. He felt there was a problem in identifying the two.
Rita Ulrich, MCP, stated the entire facade is being changed; color scheme, lighting and
signage. DA T had asked the Topels look into doing other things to the building;
therefore, DA T did not feel this should be considered maintenance.
Bill Demeules asked Ollie Koropchek for clarification on Alternative #1.
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Ms. Koropchek stated Alternative #1 would approve up to $2500 for the front facade and
signage, up to $2500 for the rear facade, $377.28 for side facade improvements and up to
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EDA Minutes - 11/17/98
$500 for fee reimbursements.
Ken Maus requested that the EDA not get involved in storm damage. That recipients
should acknowledge receipt of insurance monies they receive.
Bill Demeules stated that he questioned whether or not window replacement was a
general maintenance item in this case.
Darrin Lahr stated he had a problem with fixing broken windows.
Rita Ulrich stated that DA T looked at the total package, not just the broken window.
Darrin Lahr stated again that he not did feel it was fair to fix windows. He also asked
Rita Ulrich if she felt the Topels were committed to doing the project. Ms. Ulrich stated
that it was her feeling that the Topels were committed to doing the project.
Ken Maus asked about the importance of rear signage. Ms. Ulrich stated the Dance
Studio uses the back entrance and the signage in the rear was important.
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A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY KEN MAUS TO
APPROVE DMRF NO.1 09 UP TO THE AMOUNT OF $2500 FOR FRONT FACADE
AND SIGNAGE, UP TO $2500 FOR REAR FACADE AND SIGNAGE AND $377.28
FOR SIDE FACADE IMPROVEMENTS. ALSO UP TO $500 FOR FEE
REIMBURSEMENT. THIS WOULD EXCLUDE THE REPLACEMENT OF THE
WINDOW AND PROOF OF PERFORMANCE. Motion carried unanimously.
Ken Maus asked that an agenda item for the next meeting deal with the verbiage for
insurance and maintenance verus revitalization.
5. Consideration to review for aporoval/disapproval the DMRF application for 124 West
Broadway.
Item tabled. Rita Ulrich, MCP, stated that DA T does not yet have complete estimates
and they should have concrete costs soon. Ken Maus suggested that they look at hanging
panes of stained glass on walls rather than painting. Also, they should look at the life
expectancy of fabric awnings.
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EDA Minutes - 11/17/98
6.
Consideration to ratify the execution of a Partial Release of Mortllage and Consent to
Easement for the property described as the East 161.00 feet of Lot 5. Block 3. OIP.
according to the recorded plat thereof.
Executive Director Ollie Koropchak stated that this was a housekeeping item. The EDA
attorney, Steve Bubul, suggested the EDA ratify the execution of the documents by the
EDA Chair and Executive Director.
A MOTION WAS MADE BY KEN MAUS AND SECONDED BY BILL DEMEULES
TO RATIFY THE EXECUTION OF THE PARTIAL RELEASE OF MORTGAGE
AND CONSENT TO EASEMENT FOR THE PROPERTY DESCRIBED AS THE
EAST 161.00 FEET OF LOT 5, BLOCK 3, OIP, ACCORDING TO THE RECORDED
PLA T. Motion carried unanimously.
7. Consideration of executive director's report.
Executive Director Ollie Koropchek reviewed the executive director's report. There were
no questions.
8.
Adiournment.
Chair Ron Hoglund adjourned the meeting at 7:55 p.m.
Nancy C. Whalen, Recording Secretary
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EDA Agenda - 2/23/99
4.
Consideration to review for approval the preliminary GMEF loan application from
Mainline Distribution Properties. LLC.
A. Reference and Background:
GMEF Loan Request:
$100,000 Real Estate Property Loan.
Project Summary:
In January 1999, Groebner & Associates, Inc. relocated from Plymouth and has a three-
month lease with option to purchase the real estate property located at 9530 Fallon
Avenue. The property is currently owned by Midwest Graphics, Inc. The business
became aware of Monticello and the available building through the City's Office of
Economic Development and Steve and Paul Schoen of Aroplax. The company supplies
materials and equipment to natural gas utilities and their contractors. Mainline
Distribution Properties, LLC (MDP) was formed in December 1999, to purchase the
property and lease to Groebner & Associates. MDP has six shareholders, all of which are
key employees of Groebner & Associates. Groebner & Associates is a family-owned
business which was started by Joe's father, Charles, in 1976.
The real estate property consist of2.20 acres ofland and a 14,080 sq ft metal building,
1,280 sq ft office space and 12,080 sq ft manufacturing/warehousing space. The
estimated market value of the property for payable 1998 was $254,700. The purchase
price is $550,000. The shareholders have committed $145,000 of equity into the
purchase of the property (26.36%). Closing is anticipated in May 1999.
Legal description: Monticello Commerce Center, 1st Addition, Lot 001, Block 001. PID#
155-081-001010.
The relocation and expansion will add 11 new full-time jobs to the City of Monticello
immediately at an average wage per hour of $19.90 without benefits (non-owners) and
will add 2 new full-time jobs to the State of Minnesota and City of Monticello at an
average wage per hour of $1 0-12 without benefits within the next two years.
Uses of Funds
Real Estate Property
$550,000
TOTAL USES OF FUNDS
$550,000
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EDA Agenda - 2/23/99
Sources of Funds
Franklin National Bank
Equity
GMEF
$305,000
$145,000
$100,000
TOTAL SOURCES OF FUNDS
$550,000
GREATER MONTICELLO ENTERPRISE FUND GUIDELINES
PUBLIC PURPOSE CRITERIA: Must comply with four or more of the criteria listed
below, criteria #1 being mandatory.
1.
Creates new jobs:
Eleven new jobs to the City of Monticello at an average
wage per hour of $19.90 without benefits (non-owners) and
project the addition of two full-time jobs at an average wage
per hour of $10-$12 without benefits within two years.
2.
Increases the community tax base: The acquisition of the real estate property
does not increase the tax base.
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3.
Factors:
To assist a new industrial business to expand their operations.
Other factors for consideration but not limited to: Nature of
business (industrial but not manufacturing), present availability of
service and product (none), potential adverse environmental effects
(none), and compatibility to the comprehensive plan and zoning
policy (yes).
4. Used as a secondary source to supplement conventional financing:
The GMEF will be the secondary source of funding to the lender, Frankilin
National Bank.
5. Used as gap financing: Used as gap financing (see Letter from Lender) and
as an incentive to encourage economic development.
6. Used to assist other funds: In addition to the lender, the equity amount exceeds
the GMEF guidelines. The CMIF does not apply as
the company is relocating from outside the 14-
county CMIF region.
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EDA Agenda - 2/23/99
GREATER MONTICELLO ENTERPRISE FUND POLICIES
I. BUSINESS ELIGIBILITY:
Industrial business:
Yes.
Located within city limits:
Yes, Zoned 1-1.
Credit worthy existing business:
For determination by Franklin National
Bank. (See enclosed letter)
$10,000 loan per each job created. $10,000 X 5 = $50,000.
$5,000 per every $20,000 increase in personal property used for business
purposes, whichever is higher. $10,000 X 13 jobs = $130,000.
Recommendation: $100,000.
II. FINANCING METHOD:
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Companion Direct Loan:
All such loans may be subordinated to the primary
lender(s) if requested by the primary lender(s). The
GMEF is leveraged and the lower interest rate of the
GMEF lowers the effective interest rate on the entire
project.
Recommendation: The GMEF take a second position behind Franklin
National Bank on the real estate property.
III. USES OF PROCEEDS:
Real property acquisition.
IV. TERMS AND CONDITIONS:
Loan Size:
Maximum not to exceed 50% of the remaining GMEF balance.
Annual GMEF Appropriation Balance, February 23, 1999, is
$200,000. Request: $100,000. Recommendation: $100,000.
Remaining 1999 GMEF Appropriation Balance: $100,000.
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Leveraging: Minimum 60% private/public non-GMEF. Maximum 30% GMEF.
Minimum 10% equity of GMEF loan.
Franklin National Bank
Equity
GMEF
TOTAL
$305,000(56%)
$]45,000(26%) $10,000 required
$100,000(18%)
$550,000(100%)
Loan Term: Real estate property maxmium of 5-year maturity amortized up to
30 years. Balloon payment at 5 years.
Recommendation: 20-year amortization with balloon payment in five years.
Interest Rate: Fixed rate not less than 2% below Minneapolis prime rate. Prime
rate per National Bank (First Bank) of Minneapolis on date of ED A
loan approval. Prime rate February 19, 1999 - 7.75 %.
Recommendation: % fixed rate.
Loan Fee:
Minimum fee of $200 but not to exceed 1.5% of the total loan
project. Paid by applicant to the EDA within five working days
after City Council approval of GMEF loan. Nonrefundable. Loan
fee may be incorporated into project cost. EDA retains the right to
reduce or waive loan fee or portion of loan fee.
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Recommendation: At least, the minimum fee of $200.
Prepayment Policy: No penalty for prepayment.
Deferral of Payments: 1. Approval of the EDA membership by majority vote.
2. Extend the balloon if unable to refinance, verification
letter from two lending institutions subject to Board
approval.
Interest limitation on guaranteed loans:
Not applicable.
Assumability ofloan: None.
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EDA Agenda - 2/23/99
Business equity requirements:
Subject to type ofloan; Board of Directors
will determine case by case, analysis under
normal lending guidelines.
Collateral:
Machinery and equipment liens (except equipment exempt from
bankruptcy) and personal and/or corporate guarantees (requires
unlimited personal guarantees) as per the GMEF attorney.
Non-performance:
An approved GMEF loan shall be null and void iffunds are
not drawn upon or disbursed within 180 days from date of
EDA approval.
February 23, 1999 EDA approval - loan becomes null and void August 23,
1999.
Non-performance extension: Not applicable.
Legal Fee:
Responsibility of the GMEF applicant.
B.
Recommendation:
Recommendation is to review this information prior to the EDA meeting for
discussion and potential questions. Joe Groebner and perhaps, Randy Bednar,
Franklin National Bank will be present at the EDA meeting. EDA members were
invited to tour the facility on Friday, February 19. Consideration to approve or
disapprove GMEF Loan No. 015 is the next agenda item.
c.
Supporting Data:
Preliminary GMEF application, letter of intent and credit analysis from lender,
copy of purchase agreement.
5
JAN. 20. 1999 4:20PM GROEBNER & ASSOCIATE
GREATER MONTICELLO ENTERPRISE
250 EAST BROADWAY
MONTICELLO, MINNESOTA
PRELTMINARY APPLICATION FOR LOAN
NO. 345
P.2/5
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APPLICANT: JDS8Dh M. Groebner
FIRM OR. TRADE NAME: M;i~liue D1.s tri bn Hen PrQ9P..~dp.s r T.I.r.
BUSINESS ADDRESS: 9530 Fallon Ave.. NE
CITYISTATE: Monticello. MN ZIP CODE: 55362
,TELEPUONE: (BUS.) (612) 295-5355 (HOME) (612) 494-4710
EMPLOYER I.D.#
CORPORATION .A.-P ARTNERSHIP
MANAGEMltNT
TITLE OWNERSHIP .....
Geueral Msua~er ai%
DATE EST ABLISBED: !Il2UJ /9 8
_SOLE PROPRIETOR
NAME
Joseph M. G~oebuer
PROJECT LOCATION:
9530 Fallon Ave. ~, Monticello) MN 55362
.-!..-NEW LOCATION ' ~EXlSTING BUSINESS
TOTAL PROJECT C;:OST ESTlMATE; S 550) 000.00
,
\
LAND S
EXlSTrnG BUILDING ~O, 000 . 00
CONSTRUCTION '
MACHINERY CAPITAL
woRKING CAPITAL
oTHER.
. TOTAL USES: S 550 rOOD. no
~OUEST:
AMOUNT OF LOAN $ 1(!10000ooo~q
MATURITY & TERMS
REQUESTED
APPLICANT'S EQUITY
LOAN PURPOSE
.
PROPOSED USES;
PROPOSED BEGINNING DATE:
ESnMATED CO~LETION DATE;
2/1/99
Close ou'pu~ld1ng ~/l/~9
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TITLE TO
PROJECT ASSETS TO BE HELD B~: ..-!..... OPERA!1NG ENTITY AL nR EGO
PARTICIPATING LENDER: Fiiml.U1n National Bank 18605 27th Ave No, Plymouth, MN 55441
budy Beduar (Neme) (Aciriress) ~ 550"0500
(Contact Person) (Telephone #)
PRESENT # OF F.1'. EMPLOYEES: 11 PROJECTED # OF F.T. EMr1.0YEES(within:Z years) 15
PROJi:CTED A VEllAGE WAGE PER ~OtJR; $19 i9Q unn-o"".< W} 6 ~ ~0'1" S
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DATE stGNED:
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fEB_,S_SS
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15,58 FROM,FRANKLIN-PLYMOUTH
ID,6125509951
FRANKLIN NATIONAL BANK
February 18, 1999
Ollie Koropchak
Monticello City Hall
250 East Broadway
P.O. Box 1147
Monticello, Minnesota 55362-9245
RE: Groebner & Associates Agreement (Mainline Distribution Properties, LLC)
Dear Ollie Koropchak:
Pending receipt of acceptable final year-end financials from the company and
approval from our loan committee our bank is interested in helping to [mance the
commercial property for Groebner & Associates. With your help we would be
interested under the following terms and conditions:
Amount:
$305,000.00
Up to 20 years amortization
Company has option to go with a variable rate starting at
prime to 8.5% fixed with an adjuster of Prime + %% at
four years.
Loan would have a call feature at seven years.
First secured position in property.
No prepayment penalties would apply.
1 % to be paid upon acceptance of terms.
Bank would require an acceptable appraisal along with an
environmental report clean of problems. We would also
require full insurance naming us as loss payee.
Your loan proceeds coupled with ours will help this company out immensely.
Their sales are growing strongly and surpassed $9MM this past year. Even
though they had the most profitable year ever at $185,000 (preliminary), their
growing need for cash, inventory, etc. has also created the company's highest
Term:
Rate:
Balloon:
Collateral:
Prepayment:
Fee:
Other:
13605 27th Avenue No. . Plymouth. Minnesota 55441 · (612) 550-0500
PAGE
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L\/:}
FEB-18-99 15.56 FROM,FRANKLIN-PLYMOUTH
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Ollie Koropchak
February 18, 1999
Page 2
10,6125509951
borrowing levels. As a small bank we are stretched to our limits with this fine
company and are appreciative of your efforts to work with them and us. With
your lower interest financing plus regular bank financing the company will obtain
a good blended rate that will benefit their long term prosperity and your
community's as well. We look forward to working with you on this project.
Sincerely,
~Jdfk~
Randall A. Bednar
Vice President
PAGE
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JRN.20.1999 4:20PM
GROEBNER & RSSOCIRTE
NO. 345
P.3/5
MONtICELLO
250 East Broadway
:po O. Box 1147
Monticello, MN
55362-9245
Phone'! (612) 295~271l
Metro: (612) 333..5739
Fax: 'l'{11512) 295.-4404
Name of
AUTHORIZATION RELEASING INFORMATION
,
Frauklin National Bank
Financial Institution
12605 27th A~e. No.
Street
Plymouth, MN 55441
City
State
Zip
.
\
I hereoy authorize any person to furnish to the Mont~cello Economic
Development Authority, 250 Ea~t Broadway, PO Box 1147, Monticello,
Minnesota 55362, any and all financial records, reports,
statements, or 9ther documenta~ion or information in their
possession regarding: Ma:ln'i11A no{ ~tl"ih"t-inn ppnp...rti ~R I U.c
Developer's name(s)
~6160 - RAt" Ave'. liIn_. Maole Grove",MN 55311
Developer'S address
upon presentation of this authorization or an exac~ copy thereof,
you are directed to pe,l:mi t the perSQnal review, copying, or
photostating of such records, information, and evidence and provide
same to the Monticello Economic Development Authority.
I, the undersigned, acknowledge the said above information may
become public.
This authorization shall be valid
the entire term of the loan.
Dated:
1/20/99
.
One copy for each principal of a
partnership or corporation as
well as the entity itself.
\
V(C\
.. .
.
.
.
EDA AGENDA - 2/23/99
5.
Consideration to approve or deny GMEF Loan No. 015 for Mainline Distribution
Properties. LLC dba Groebner & Associates. Inc.
A. Reference and Background:
After review and discussion of the preliminary application from Mainline Distribution
Properties, LLC, the EDA is asked to consider approval or denial ofthe request for a
$100,000 GMEF loan. Joe Groebner, President, will be present at the EDA meeting and
perhaps, Randy Bednar, Franklin National Bank, Plymouth. Franklin National Bank will
submit to the EDA Office a copy of the requested financial and company data per the
EDA final application. Additional1y, the bank will submit a letter expressing need for gap
funding and determining the financial credibility of Groebner & Associates.
First, the EDA needs to determine if this GMEF loan application from Mainline
Distribution will encourage economic development. Secondly, the EDA must determine if
the proposed acquisition of real estate property and the application comply with the
GMEF public purpose criteria and policies. Note: the loan will not increase the tax base
of the community; however, this in not a mandatory requirement of the guidelines. Lastly,
the EDA must determine the amount and terms of the loan for approval.
The City Council will consider ratification of the EDA's action ofGMEF Loan No. 015
for Mainline Distribution on March 8, 1999. If approved, the GMEF will be disbursed at
the closing in May. It is recommended, the approved dol1ars be disbursed from the
SCREG (close-out fund) and the UDAG funds.
B. Alternative Action:
1. A motion to approve GMEF Loan No. 015 for Mainline Distribution Properties,
LLC, dba Groebner & Associates, Inc. in the amount of$100,000 with terms and
conditions as recommended. Collateral, guarantees, and other condition
requirements to be determined and prepared by the GMEF attorney. The GMEF
loan approval subject to lender approval and submission of financial statements..
2. A motion to approve GMEF Loan No. 015 for Mainline Distribution in the amount
of with terms and conditions as recommended or determined.
3. A motion to deny GMEF Loan No. 015 for Mainline Distribution.
4. A motion to table any action.
1
.
EDA AGENDA - 2/23/99
c.
Recommendation:
Recommendation is for Alternative NO.1 or 2 with the terms and conditions as
recommended within the supplement of agenda item no. 4 or as determined and subject to
lender approval. The application meets the criteria of the GMEF Guidelines. Although
the acquisition does not increase the tax base, the project encourages occupancy of a
14,.080 sq ft industrial building with the future potential for building expansion or
improvements. No TIF assistance was ever approved or requested for this property.
D. Supoorting Data.
None.
.
.
2
.
.
.
EDA Agenda - 2/23/99
6.
Consideration to Elect 1999 EDA Officers.
A. Reference and Backaround.
In order to comply with 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
Ron Hoglund
Barb Schwientek
Rick Wolfsteller
Ken Maus
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.
In order to comply with EDA Ordinance Amendment No. 172,
Section 2-3-1: Creation: (C) Thereafter the initial
appointment, all commissioners shall be appointed for six-year
terms, except that any person appointed to fill a vacancy
occurring prior to the expiration of the term which his/her
predecessor has been appointed shall be appointed only for the
remainder of such term.
1999 EDA membership and 6-year term:
Bill Demeules
Ron Hoglund
Roger Carlson, Council
Ken Maus
Darrin Lahr
Barb Schwientek
Clint Herbst, Council
12-1999 (05)
12-2000 (06)
12-2000 (04)
12-2001 (07)
12-2002 (08)
12-2003 (09)
12-2002 (06)
B. Alternative Action:
1. Call for nominations from the floor, cease nominations,
and approve the nominations as elected 1999 EDA officers.
2. Table election of 1999 EDA officers.
Page 1
.
EDA Agenda - 2/23/99
c.
Recommendation:
Recommendation is for the 1999 officers to consider accepting
nomination to their respective office.
.
.
Page 2
.
.
.
EDA Agenda - 2/23/99
7.
Consideration to review and accept the Year-End EDA Financial Statements. Activitv
Report and 1998 Proposed Budget.
A Reference and Background:
In order to company with EDA Ordinance Amendment No. 172, Section 2-3-6: The
Authority shall prepare an annual budget projecting anticipated expenses and sources of
revenue. And B: The Authority shall prepare an annual report describing its activities
and providing an accurate statement of its financial condition. Said report shall be
submitted to the City Council by March 1 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 year-end financial statement and report for submission to
the City Council on March 8, 1999.
2.
A motion to accept the year-end financial statements and report subject to named
revisions prior to submission to the City Council.
3. A motion to not accept the year-end financial statements and report.
4. A motion to table any action.
C. Recommendation:
If the EDA commissioners make a finding that the statements and report are so correct,
recommendation is alternative no. 1.
D. Supporting Data:
Copies of financial statements and report.
.
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, 1998
REVENUES
Appropriations -
1997 GMEF
1998 SCREG
Interest Income - Notes
Interest Income - Investment
Loan Fees
Legal Fees
Miscellaneous
$ -O~
$ 87,500.00
$ 22,065.47
$ 22,815.31
$ 200.00
$ 564.25
$ -0-
TOTAL REVENUES
$ 133,145.03
EXPENDITURES
Downtown Monticello Revitalization Fund
Legal Fees
$ 17,498.38
$ 564.25
$ 34.32
$ -0-
$ -0-
$ -0-
$ 0
.
Professional Fees
Service Fees
Miscellaneous Other
Int. Adjustment - Notes
TOTAL EXPENDITURES
$ 18,096.95
Excess of Revenues Over Expenditures
$ 115,048.08
FUND BALANCE - Beginning of Year
$ 976,278.70
FUND BALANCE - End of Year
$1, 091, 326.78
.
~,\
.
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY MONTICELLO
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
Balance Sheet
December 31, 1998
ASSETS
Cash in Bank
$555,046.13
Notes Receivable - Tapper, Inc.
Notes Receivable - Muller Theatre
Notes Receivable - SMM, Inc.
Notes Receivable - Aroplax Corp.
Notes Receivable - Custom Canopy, Inc.
Notes Receivable - Standard Iron
Notes Receivable - Vector Tool
Notes Receivable - Tapper, Inc.
Notes Receivable - SELUEMED
Notes Receivable - T J Martin
Appropriations Receivables -
1998 GMEF
1998 SCREG
-0-
-0-
$ -0-
$ 12,992.69
-0-
$ 45,791.61
$ 45,943.34
$ 93,319.39
$ 50,733.62
$ 87,500.00
$100,000.00
$100,000.00
.
TOTAL ASSETS
FUND EQUITY
Fund Balance
Reserved for Participation Loans
(Economic Development)
TOTAL LIABILITIES AND FUND EQUITY
.
$1, 091, 326.78
$1, 091, 326.78
$1, 091, 326. 78
~/d-
.
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
1999 CASH FLOW PROJECTION
BEGINNING CASH BALANCE, January 1999
RECEIPTS
Appropriations, Expected -
SCERG
UDAG
Notes Amortization Payments -
Tapper Inc.
Muller Theatre
SMM, Inc.
Aroplax Corp. ($1,241.73 Mo.) 11~99
Notes Receivable
Custom Canopy, Inc.
Standard Iron ($795.49 Mo.) 7~01
Vector Tool ($380.18 Mo.) 11-00
Tapper's II ($760.36 Mo.) 4-01
SELUEMED ($1,031.01 Mo.) 9-03
. T.J. Martin (Avg In $473.95 Mo) 3~05
nterest Income - Investment (est.)
Loan Fees
Miscellaneous
TOTAL RECEIPTS
TOTAL BEGINNING BALANCE AND RECEIPTS
EXPENDITURES
GMEF Loans -
Groebener (SCREG)
(UDAG)
B & B Metal Stampings (UDAG)
Other (UDAG)
DMRF Grants
Loans
Legal Fees
Miscellaneous
TOTAL EXPENDITURES
EXPECTED CASH BALANCE, December 1999
.
$ 60,453.62
$139,546.38
-0-
~O-
-0-
$ 13,338.57
-0-
-0-
$ 9,545.90
$ 4,562.16
$ 9,124.32
$ 12,372.12
$ 5,766.52
$ 10,000.00
$ 600.00
$ 1,000.00
$ 60,453.62
$ 39,546.38
$ 50,000.00
$ 50,000.00
$ 30,000.00
$ 20,000.00
$ 1,000.00
$ 500.00
$555,046.13
$266,309.59
$821,355.72
$251,500.00
$569,855.72
<\/~
..
1998
ECONOMIC DEVELOPMENT AUTHORITY ACTIVITY REPORT
MEETING DATE
SUBJECTS
1-20-98
Approved GMEF Loan No. 014 for T. 1. Martin, Inc. dba
Lake Tool, Inc., $87,500 M&E. Five jobs at wages
between $30,000 to $40,000.
Approved DMRF No. 103 disbursement of $500 fee
reimbursement to Kathy Froslie.
2-17 -98 Annual meeting
Approved DMRF No. 104 to Rich and Sylvia Cline in the
amount of $2,500 facade grant and $500 fee reimbursement.
EDA officers elected for 1998:
President Ron Hoglund
Vice President Barb Schwientek
Treasurer Rick W olfsteller
Assistant Treasurer Ken Maus
Secretary Ollie Koropchak
~.
Accepted EDA 1997 Year-End Financial Statements and
Activity Report. AIl existing GMEF loan paybacks are
current.
4-14-98
Approved DMRF No. 105 to AI Loch in the amount of
$2,500 facade grant and $500 fee reimbursement.
Approved DMRF No. 106 to Dan and Andra Olson in the
amount of $6,467.42 facade grant and $500 fee
reimbursement.
5-20-98
Approved DMRF No. 107 to Steve Johnson in the amount
of $2,450 facade grant and $200 fee reimbursement.
Approved modifications to the DMRF Guidelines and
application form.
6-23-98
Approved DMRF No. 108 to Bruce Hamond in the amount
of $7,500 facade grant and $500 fee reimbursement.
8-11-98
Approved a 37-day non-performance extension for DMRF
No. 101.
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EDA Agenda - 2/23/99
8.
Consideration to review Year-end cash balances of the GMEF. DMRF. UDAG. and ERG
Funds.
A. Reference and Background:
All GMEF loan payback payments are current as accounted for in the 1998 year-end
statements and all approved loans have been disbursed with the exception of the one under
consideration. The balloon payment for GMEF No. 006, Custom Canopy, became due in
1998 and was paid in August 1998.
Of the nine approved DMRF Matching Facade Grants, five facade grants were completed
and EDA dollars disbursed, two approved facade grants became null and void, and two
approved facade grants are still under construction. Total amount disbursed in 1998 from
the original $200,000 DMRF Appropriation is $17,498.38. No one has applied for the
DMRF Revitalization Loan. The two approved facade grants which became null and void
are DMRF No. 102 - Applicant Steve Johnson, date of expiration December 31, 1998 and
DMRF No. 107 - Applicant Steve Johnson, date of expiration February 20, 1999. The
remaining balance in the DMRF Appropriation is $181,501.62. Previously, the EDA
extended the DMRF Appropriation for downtown revitalization through December 31,
1999.
Fulfillment Systems, Inc. requested prepayment of the FSI-UDAG. Within the grant/loan
agreements, prepayment was allowed without penalty. Final payback of the amortization
schedule was January 1999. The principal and interest prepayment received was
$31,250.09 on November 17,1998.
The Aroplax-SCREG payback to the city ended in January 1997. Final payback to the
state will end in November 1999. Payback payments are current.
With the payback from Federal Grant and State GrantILoan completed and no
appropriations from the Liquor Fund, the EDA has no outside revenue producing sources
of funds. However, the EDA has cash balances in the GMEF, UDAG, and ERG Funds.
The EDA has not requested funds from the Liquor Fund in the past few years as the intent
was to be self-sustaining. As you recall, the City Council committed an annual $200,000
from the Liquor Fund for the next 20 years to retire the Community Center Debt.
No EDA action is required on this report.
.
.
.
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
DOWNTOWN MONTICELLO REVITALIZATION FUND
December 31, 1998
Fund Balance, December 31, 1997
$199,000.00
Revenues
Appropriations
TOTAL REVENUES
o
o
Expenditures
DMRF 101, Kathy Froslie, 2-6-98
8-31-'98
pMRF 102, Steve Johnson
DMRF 103, Kathy Froslie, 2-6-98
DMRF 104, Rich Cline, 10-11-98
11-24..98
DMRF 105, AI Loch, 11-6-98
DMRF 106, Dan Olson, 7-27-98
DMRF 107, Steve Johnson
DMRF 108, Bruce Hammond
DMRF 109, Dorothy Topel
TOT AL EXPENDITURES
$2,500.00
$2,500.00
$ 500.00
$2,394.13
$ 180.12
$2,610.00
$6,814.13
$ 17,498.38
Fund Balance, December 31, 1998
$181,501.62
'bA
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SMALL CITIES ECONOMIC RECOVERY GRANT (SCERG) - AROPLAX
FINANCIAL REPORT
December 3 I, 1998
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.
GRANT TOTALS
Principal
Interest
TOTAL
ORIGINAL PAID REMAINING
$170,000.00 $157,272.96 $12,727.04
$37,969.92 $24,018.99 $13,950.93
$207,969.92 $181,291.95 $26,677.97
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
.
REVENUES
Principal Payback
Interest Payback
Interest Income - Investment:
1993
1994
1995
1996
1997
TOTAL REVENUES
$157,272.96
$24,018.99
$1,061.92
$1,256.00
$5,475.97
$7,381.27
$8,770.56
$205,237.67
.
EXPENDITURES
Payback to State
Transfer to GMEF
TOTAL EXPENDITURES
$57,284.05
$87,500.00
$144,784.05
FUND BALANCE FOR SMALL CITIES GRANT
SCERG-A.xls: 2/18/99
$60,453.6~.... J.
.
URBAN DEVELOPMENT ACTION GRANT (UDAG) - FSI
FINANCIAL REPORT
December 31, 1998
Payback began in January, 1988 for 12 years ending in January, 2000.
Annual principal and interest payback total is $27,971.40.
GRANT TOTALS
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
REVENUES
Principal Payback $256,957.71
I nterest Payback $77,315.88
Interest Income - Investment:
1990 $6,342.02
. 1991 $8,593.59
1992 $8,436.32
1993 $5,227.10
1994 $3,756.77
1995 $12,297.72
1996 $9,775.19
1997 $9,007.60
Transfer from GMEF - [company]
TOTAL REVENUES $397,709.90
EXPENDITURES
1991 Transfer to GMEF $65,000.00
1992 Transfer to GMEF $20,000.00
1993 Transfer to GMEF $42,500.00
1996 Transfer to GMEF (Tapper's) $100,000.00
TOTAL EXPENDITURES $227,500.00
.
FUND BALANCE FOR ECONOMIC DEVELOPMENT
UDAG.xls: 2/18/99
$170,209.90
~3
.
GMEF Cash Balance
DMRF Cash Balance
UDAG Cash Balance
SCREG-Aroplax Cash Balance
TOTAL
.
.
SOURCES OF FUNDS
January 1, 1999
$373,544.51
$181,501.62
$170,209.90
$ 60,453.62
$785,709.65
~A
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EDA Agenda - 2/23/99
9.
Consideration to review the GMEF Guidelines for possible amendments.
A. Reference and Background:
To comply with the GMEF Guidelines, page 7, Fund Guideline Modification: At a
minimum, the EDA shall review the Fund Guidelines on an annual basis; therefore,this
agenda item appears before the ED A. And no changes to the GMEF Guidelines shall be
instituted without prior approval ofthe Council.
Enclosed is a copy of the current GMEF Guidelines for your review. I suggest the EDA
consider amending the guidelines to include wage goals, as each government agency must
report wage and job goals and the results for each project in achieving those goals. See
attached 1999 Minnesota Business Assistance Form.
The EDA might consider amending the Definition of Public Purpose to include wage goals
- hourly wage level. The GMEF application form was previously changed to include
projected average wage per hour without benefits for full-time employees, perhaps it
would be best to amend the guidelines to coincide with the application form. Secondly,
to meet the requirements of the amended "Green Acres" Laws, a business must agree to
meet the criteria below for TIF assistance. The Monticello Commerce Center owners
have requested removal of Green Acres (five- year window) classification status and the
Monticello Market Place is still under Green Acres. The amended law allows an industrial
business to construct a facility with greater than 15% office space or less than 85%
manufacturing space. Warehousing and distribution is included. Lastly, the requirement is
at a rate equal to or greater than which is obtainable and non-threatening. The federal
minimum wage today is $5.15, therefore, the 160% is $8.24.
Requirement for TIF assistance:
(b) At least 90% of the jobs to pay a rate equal to or greater than 160% of the federal
minimum wage, exclusive of benefits, for individuals over the age of20 during the term of
the assistance.
No other suggestions are given.
B. Alternative Action:
1. A motion to amend the GMEF Guidelines to include the following language under
Criteria 1 (b) At least 90% of the jobs to pay a rate equal to or greater than 160%
of the federal minimum wage, exclusive of benefits, for individuals over the age of
20 during the term of the assistance.
2.
A motion to amend the GMEF Guidelines to include the following language under
.
EDA Agenda - 2/23/99
Criteria 1 (b) At least 90% of the jobs to pay a rate equal to or greater than
% of the federal minimum wage, exclusive of benefits, for individuals over
the age of20 during the term of the assistance.
3. A motion to amend the GMEF Guidelines to include the following language under
Criteria 1 (b) Each job at an average hourly wage of at least $ per
hour, exclusive of benefits.
4. A motion of no action or no need to amend the GMEF Guidelines.
5. A motion to table any action.
C. Recommendation:
If you select alternative 1 or 2, this is consistent with TIF assistance requirements for the
majority ofthe industrial land. Alternative 3 is certainly doable. Recommendation is for
Alternative No.1, 2, or 3. Additionally, this informs the applicant of the wage level
requirement and is consistent for reporting purposes.
D. Supporting Data:
.
Guidelines, assistance form for reporting, and excerpt from a TlF Redevelopment
Contract.
.
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~.
~
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,.....
1999 Minnesota Business Assistance Form
(Please return by April 1, 1999)
+or~
-lrade&-
Economic
Development
Please complete lines 1 through 16 for all agreements.
1. Funding government agency name 2. Contact name
3. Agency street address 4. City
5. Zip code 6. Phone number (area code) 8. Type of government agency
7. Fax number (area code) _ City _County _Regional _State
_ Other (please indicate)
9. Name of business receiving assistance 10. Industry of recipient (SIC code)
11. Type of assistance (e.g. loan. TIF, grant, infrastructure. etc.) 12. Name of TIF district (if applicable)
B. Date of business 14. Date assistance fIrst 15. Date project (building! 16. Dollar value of business
assistance agreement provided machinery/etc.) was assistance
placed in service
For assistance agreements signed between July 1, 1995 and December 31, 1997, complete lines 17 through 20. For
agreements signed during 1998 and future years, please complete lines 21 through 24.
17. Job creation goals for business receiving assistance 18. Average hourly wage level goals for business receiving
assistance
19. Actual jobs created since business received assistance 20. Actual average hourly wage paid to employees hired since
business received assistance
Goals of business receiving assistance: (please indicate Actual performance since project placed in service: (please
number of employees at each wage level and indicate the indicate number of employees at each wage level and indicate
corresponding benefit level.) the corresponding benefit level.)
21. Job Creation Hourly Wage 22. Hourly Valut 23. Job Creation Hourly Wage 24. Hourly Value
Level of Voluntary Level of Voluntary
Full-time part-time (excl. benefits) Benefits ($) Full-time part-time (excl. benefits) Benefits ($)
less than $7.00 less than $7.00
$7.00 to $7.99 $7.00 to $7.99
$8.00 to $9.99 $8.00 to $9.99
$10.00 to $11.99 $10.00 to $1 1.99
$12.00 and higher $12.00 and higher
If necessary. please attach additiorial documentation. If necessary, please attach additional documentation.
Please complete lines 2S through 27 for all agreements.
25. Last date actual wage and job creation levels documented 26. Date this Minnesota Business Assistance Form completed
27. Have all wage and job goals been achieved? U y cs ~ do not submit future forms for this project.
o No ~ please submit the 2000 Minnesota Business Assistance Form.
Thu form rtplaces all previous forms. Please complete one form for each business assistance agreement your
agency signtd between July 1, 1995 and December 31, 1998 which provided $25,000 or more in public funds
or used taX incrtmenJ financing. A fonn should be submitted annually for each assistance agreement until a
submilledfonn indicaJes that all wage andjob creation goals have been achieved. Do not submit this form if
your agency Iuu nol agreed to provide assistance to a business since July 1, 1995.
(over)
q/\
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~\~ NESOl'-1
0.,
-
-Trade&-
Economic
Development
Please send completed form annually by April 1, 1999 to:
Minnesota Business Assistance Form - ABO
Minnesota Department of Trade and Economic Development
Analysis and Evaluation Office
500 Metro Square
121 East 7th Place
St. Paul, Minnesota 55101
or fax report to:
(651) 215-3841
For information, call:
(651) 297-2335 or 1-800-657.3858
j
1
Minnesota Statutes 116J.991:
A business that receives state or local government assistance for economic development
or job growth purposes must create a net increase in jobs in Minnesota within two years of
receiving the assistance.
The government agency providing the assistance must establish wage level and job creation
goals to be met by the business receiving the assistance. A business that/ails to meet the goals
must repay the assistance to the government agency. -
-
Each government agency must report the wage and job goals and the results for each
project in achieving those goals to the department of trade and economic development. The
department shall compile and publish the results of the reports for the previous calendar year
by June 1 of each year. The reports of the agencies to the department and the compilation
report of the department shall be made available to the public.
For the purposes of this section, "assistance" means a grant or loan in excess of $25,000,
or tax increment financing. -
q/d-
.
or other project supervisor showing in adequate detail that the Site Improvement Costs have been
incurred and paid by the Developer.
(g) The Authority makes no warranties or representations that Available Tax Increment
will be sufficient to pay the Land Acquisition Costs or the Site Improvement Costs. The
Developer agrees and understands that Available Tax Increment is subject to calculation by the
County and change in State law, and that a significant portion of Land Acquisition Costs and Site
Improvement Costs may remain unpaid after the Termination Date. The Developer further agrees
and understands that TIF estimates provided by the Authority and its agents, officers, or
employees are estimates only and not intended for the Developer's reliance.
., Section 3.7. Job and Wa'il.e Covenants. (a) By no later than two years after the first date
(/o~ which the Developer receives any tax increment payment under Article III hereof, the
Developer shall cause to be created on the Development Property at least 37 new jobs in
Minnesota, each such job to pay an hourly wage of at least $8.24, exclusive of benefits. The
Developer shall submit or cause to be submitted to the Authority a written report by April 1 of
each year during the term of this Agreement after completion of the Minimum Improvements
describing employment and salaries in sufficient detail to enable the Authority to determine
compliance with this section. If the Developer fails to comply with any of the terms of this
Section 3.7(a), the Developer shall repay to the Authority any payments made by the Authority
to the Developer pursuant to this Agreement. Nothing in this Section 3.7(a) limits any other
remedy available to the Authority under this Agreement or any other agreement between the
Authority and the Developer.
.
(b) At all times prior to the Termination Date, the Developer shall cause at least 90%
of the jobs at the Minimum Improvements to pay a rate equal to or greater than 160% of the
federal minimum wage for individuals over the age of 20. The Developer shall submit or cause
to be submitted to the Authority a written report by April 1 of each year during the term of this
Agreement after completion of the Minimum Improvements describing employment and salaries
in sufficient detail to ~nable the Authority to determine compliance with this section. If the
Developer fails to comply with any of the terms of this Section 3. 7(b), the Developer shall repay
to the Authority any payments made by the Authority to the Developer pursuant to this
Agreement to the extent required by law. Nothing in this Section 3.7(b) limits any other remedy
available to the Authority under this Agreement or any other agreement between the Authority
and the Developer. -
Section 3.8. Use of Tax Increment. Except as set forth herein, the Authority shall have
no obligation to the Developer with regard to its use of Tax Increment and may use Tax
Increment for any lawful purposes, whether set forth herein or otherwise.
.
Section 3.9. Local Contribution. (a) As the local contribution required by subsection 24-
27 of the TIF Plan, the Authority shall pay, cause to be paid or forgiven by the City, or any
combination of the foregoing, up to $25,000 of the storm sewer trunk and sanitary sewer and
water trunk fees (the "Fees") that would otherwise be due to the City and borne by the Developer.
(b) Upon any Event of Default (as defined in Section 9.1 of this Agreement) by the
Developer that results in a repayment by the Developer to the City of the assistance provided
DJG142690
MN19o-n
9
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GREATER MONTICELLO ENTERPRISE FUND GUIDELINES
CITY OF MONTICELLO
250 EAST BROADWAY
MONTICELLO, MINNESOTA 55362
(612) 295.2711
INTRODUCTION
The purpose of the Greater Monticello Enterprise Fund (GMEF) is to encourage
economic development by supplementing conventional financing sources available to
existing and new businesses. Through this program administered by the Economic
Development Authority and participating lending institution(s), loans are made to
businesses to help them meet a portion of their financing needs. All loans must serve
a public purpose by complying with four or more of the criteria noted in the next
section. In all cases, it is mandatory that criteria #1 be satisfied, which requires the
creation of new jobs. It is the responsibility of the EDA to assure that loans meet the
public purpose standard and comply with all other GMEF policies as defined in this
document. Along with establishing the definition of public purpose, this document is
designed to outline the process involved in obtaining GMEF financing.
DEFINITION OF PUBLIC PURPOSE
1.
To provide loans for credit worthy businesses that create new jobs.
-II-
2.
(a) One job is equivalent to a total of 37.5 hours per week.
~~1rovide loans for credit worthy businesses that would
community tax base.
Increase the
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 ana 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.
GMEF: 8126/96
Page 1 ~,A
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I.
THE GREATER MONTICELLO ENTERPRISES
REVOLVING LOAN FUND POLICIES
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 businesses)
$10,000 loan per each job created, or $5,000 per every $20,000 increase
in property market valuation, or $5,000 per every $20,000 increase in
personal property used for business purposes, whichever is higher.
*
II. FINANCING METHOD
*
COMPANION
DIRECT LOAN -
Example: Equity 20%, RLF 30%, and
bank 50%. (All such loans may be
subordinated to the primary lender(s) if
requested by the primary lender(s).
The RLF 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.)
III. USE OF PROCEEDS
GMEF: 8/26/96
*
*
*
Real property acquisition and development
Real property rehabilitation (expansion or improvements)
Machinery and equipment
Page 2
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IV. TERMS AND CONDITIONS
GMEF: 8/26/96
*
LOAN SIZE-
*
LEVERAGING -
*
LOAN TERM -
*
INTEREST RATE -
*
LOAN FEE -
*
PREPAYMENT
POLICY -
*
DEFERRAL OF
PAYMENTS -
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.
Minimum 60% private/public non-GMEF
Maximum 30% public (GMEF)
Minimum 10% equity EDA loan
Personal property term not to exceed life of
equipment (generally 5-7 years). Real estate
property maxunum of 5-year maturity
amortized up to 30 years. Balloon payment at
5 years.
Fixed rate not less than 2% below Minneapolis
prime rate. Prime rate per National Bank of
Minneapolis on date of EDA loan approval.
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.
*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.
Extend the balloon if unable to
refinance, verification letter from two
lending institutions subject to Board
approval.
2.
q).~
Page 3
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*
INTEREST
LIMITATION ON
GUARANTEED
LOANS-
*
ASSUMABILITY
OF LOAN -
*
BUSINESS EQUITY
REQUIREMENTS -
*
COLLATERAL -
Subject to security and/or reviewal by EDA.
None.
Subject to type of loan; 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 bankrnptcy).
Personal and/or corporate guarantees
(requires unlimited personal
guarantees).
*
*
*
*
* NON-PERFORMANCE - An approved GMEF loan shall be null and
void if funds are not drawn upon or disbursed
within 180 days from date of EDA approval.
*
NON-PERFORMANCE
EXTENSION -
*
LEGAL FEE -
The l80-day non-performance date can be
extended up to an additionall20 days.
1. A written request is received 30 days
prior to expiration of the l80-day non.
performance date.
2. Approval of the EDA membership by
majority vote.
Responsibility of the 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.
GMEF: 8126/96
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ORGANIZATION
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 are appointed
by the Mayor and confirmed by the City Council. Formal meetings are held on a
quarterly basis. Please see the by-laws of the EDA for more information on the
structure of 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. Participating 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.
LOAJ."\J" APPLICATION/ADMINISTRATIVE 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 StHff 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.
ApplicHtion 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 further action by the EDA on the potential
loan will require indication of support from a lending institution.
~A
GMEF: 8126/96
Page 5
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2.
If applicant gains initial support from lending institution and if the preliminary
loan application 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.
3. If the preliminary loan application is approved, applicant shall complete a
formal application. Fonnal application shall include 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. Staffmay, 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 EDA. A
decision regarding the application shall be made by the EDA within 60 days of
the submittal of a completed formal application.
6.
The EDA 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 FUNDING
"LETTER OF CREDIT" FROM MONTICELLO CITY COUNCIL - $200,000
SOURCE - City Liquor Store Fund
City shall transfer needed loan amount from existing accounts at such time that
individual loans 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 detennines 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
'\/C\
GMEF: 8/26/96
Page 6
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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 swnmaries and/or annual report detailing the
status of the Monticello Enterprise Fund.
FUND GUIDE LINER MODIFICATION
1. At a minimum, the EDA shall review the Fund Guidelines on an annual basis.
No changes to the GMEF guidelines shall be instituted without prior approval
of the City Council.
LOAN ADMINISTRATION
1. City staff shall service City loan, shall monitor City position with regard to the
loan, and shall assure City compliance with intercreditor agreement.
2. All loan documents shall include an intercreditor agreement which must include
the following:
A.
Definition ofloan default, agreements regarding notification of default.
B. Agreements between lending institution and City regarding reproduction
of pertinent information regarding the loan.
3.
All loan documentation shall include agreements between borrower and lenders
regarding release of privacy regarding the status of the loan.
GMEF: 8/26/96
Page 7
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Under the GMEF Guidelines use of proceeds for real property acquisition and
development, real property rehabilitation (expansion or improvements) and
machinery and equipment. The following commentary is intended to assist
developers with those costs typically considered eligible:
Real Pronertv Acquisition and Imnrovement Costs
Land Acquisition
Building Permit Fees
Building materials
Construction labor
Landscaping
Grading
Curbing/Parking Lot
Engineer/Design/Inspection Fees
Architect Fees
Soil borings
Appraisal Fees
Legal Fees
Environmental Study
Recording Fees
Title Insurance
Machinerv and EQuiument Costs
Personal property used as an integral part of the manufacturing or commercial
business, with a useful life of at least three years. Acquisition costs would
include freight and sales taxes paid. As a general rule, office equipment would
not qualify.
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EOA - 2/23/99
10.
Consideration to review the OMRF Guidelines for oossible amendments.
A. Reference and background:
To comply with the OMRF Guidelines, page 5, Fund Guideline Modification: At a
minimum, the EDA shall review the Fund Guidelines on an annual basis: therefore, this
appears before the EOA. No changes to the DMRF guidelines shall be instituted without
prior approval of the City Council.
Two suggestions for consideration to amend the guidelines. First, on page 4, Application
Process: 1. Second paragraph and page 5, 5. Suggestion: To delete MCP. The reason
being the Design Advisory Team (DAT) is a commission of the City and the
commissioners are appointed by the Council which is independent of the MCP. However,
at this time, the commissioners ofDAT are members of the MCP Design Committee.
Secondly, at the November meeting, The EDA requested that at the next meeting, the
EOA deal with the verbiage for insurance and maintenance verus revitalization. This
resulted in discussions for approval to fund broken windows. Such added verbiage may
be added to the guidelines and perhaps, also, to the application form.
B.
Alternative Action:
1. A motion to amend the DMRF Guidelines to delete MCP from page 4 and 5,
application process: 1. Second paragraph and 5.
2. A motion to amend the DMRF Guidelines to add determined verbiage relating to
insurance and maintenance verus revitalization.
3. A motion of no action or no need to amend the DMRF Guidelines.
4. A motion to table any action.
C. Recommendation:
Recommendation is for alternative 1 and 2.
D. Supporting Data:
Copy of guidelines.
. DOWNTOWN MONTICELLO REVITALIZATION FUND GUIDELINES
CITY OF MONTICELLO
250 EAST BROADWAY, POBOX 1147
MONTICELLO, MN 55362
(612) 271-3208
.
.
PURPOSE
The Monticello Downtown and Riverfront Plan provides a guide for development in the
downtown area. As part of its efforts to implement the Plan, the Monticello Economic
Development Authority (EDA) offers financial assistance and incentives to property owners
through a program known as the Downtown Monticello Revitalization Fund (DMRF).
The DMRF seeks to promote the revitalization of downtown Monticello by:
*
Enhancing storefronts and facades in accordance with the design guidelines in the
Plan.
*
Encouraging the rehabilitation of building interiors to bring them into compliance
with local codes and ordinances.
*
Encouraging building rehabilitation to provide space suitable for the proposed use.
*
Providing funding to close the "gap" between financing needed to undertake the
project and the amount raised by equity and private loans.
*
Providing economic incentives to locate businesses in the Downtown.
These guidelines describe the funding parameters and eligibility criteria for programs offered by
the EDA Meeting the eligibility criteria does not entitle an applicant to funding. The distribution
of funds is the sole decision of the EDA
TARGET AREA
These financial incentives and assistance will be available for existing buildings within the planning
area described in the Downtown and Riverfront Plan. Preference will be given to property
located in Lots 6 through 15, Block 34, Lots 1 through la, Block 53, and Blocks 35,36,51, and
52, Original Plat, City of Monticello.
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. DMRF GUIDELINES
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FACADE GRANTS
The EDA may provide matching grants in the following amounts:
*
Up to $2,500 for eligible improvements to the front facade and signage.
*
Up to $2,500 for eligible improvements to promote improvements to the rear
sections of the buildings.
*
Up to $2,500 for eligible improvements to the side facade (if applicable).
To be eligible for grant funds, projects must meet the following criteria:
*
Improvements must comply with applicable design guidelip.es and all codes and
ordinances including building permits and inspections.
*
The grant will match private investment up to the stated limit.
*
Grant funds will be provided after completion of the improvements.
*
Applicants will provide the EDA with documentation of the actual cost of the
improvements.
Meeting the eligibility criteria does not entitle an applicant to funding. The distribution of grant
funds is the sole decision of the EDA.
REHABILIT A TION LOAN
The EDA may provide loans for the rehabilitation of existing buildings. The maximum loan
amount is the lesser of25% of total cost of improvements or $20,000. To be eligible for
rehabilitation loans, projects must meet the following criteria:
*
Improvements must comply with applicable design guidelines and all codes and
ordinances including building permits and guidelines.
*
Applicants must provide proof of financing for costs not funded by the grant.
*
Loan amortization schedule not exceed ten (10) years, balloon payment in five (5)
years.
2
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. nMRF GUIDELINES
*
The interest rate on the loan will be two percent (2%) below the Prime Rate. The
EDA may reduce the interest rate to encourage the reuse of a currently vacant
building, the retention of an existing business, or the creation of a new business.
*
The rehabilitation loan will be in a subordinated position to the lender.
FEE REIMBURSEMENT
The EDA may grant reimbursement of City fees associated with undertaking improvement and
revitalization projects in the downtown area. The amount of the reimbursement will be the
equivalent often percent (10%) of the total cost of the improvements up to a maximum of$500.
Fees eligible for reimbursement include building permits, other city inspections, and land use
ordinances. To be eligible for fee reimbursement, projects must meet the following criteria:
*
Projects must comply with applicable design guidelines and all codes and
ordinances including building permits and inspections.
*
Reimbursement will be made after completion of the improvements.
*
Reimbursement will be based on documentation of actual improvement costs and
fees paid.
.
MAXIMUM FINANCIAL ASSISTANCE
The maximum amount of financial assistance available to each rehabilitation property is an amount
not to exceed $25,000.
NON-PERFORMANCE
Approved DMRF shall be null and void if funds are not drawn or disbursed within 270 days from
date of ED A approval.
ORGANIZATION
The Downtown Monticello Revitalization Fund is administered by the City of Monticello
Economic Development Authority (EDA), which is a seven-member board consisting of two
Council members and five appointed members. EDA members are appointed by the Mayor and
confirmed by the City Council Formal meetings are held on a quarterly basis. Please see the
by-laws of the EDA for more information on the structure of the organization that administers the
Downtown Monticello Revitalization Fund (DMRF).
.
3
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D!vIRF GUIDELINES
PARTICIPATING LENDING INSTITUTION
1. Participating lending institution shall be determined by the DMRF applicant.
2. Participating lending institution shall cooperate with the EDA and assist in carrying out
the policies of the DMRF as approved by the City Council.
3. Participating lending institution shall analyze the funding application and indicate to the
EDA the level at which the lending institution will participate in the finance package.
LOAN APPLICATION/ADMfNTSTRATTVE PROCEDURES
The EDA desires to make the DMRF application process as simple as possible. However, certain
procedures must be followed prior to EDA consideration of a loan request. Infoffilation
regarding the program and procedures for obtaining funding is as follows:
City Staff Duties:
The Economic Development Director, working in conjunction with the Assistant City
Administrator, shall carry out DMRF operating procedures as approved by the EDA and Council.
Staff is responsible for assisting an applicant in the application process and will work with the
applicant in development of the necessary information.
Application Process:
1. The applicant will meet with city staff to obtain information about the DMRF, discuss the
proposed project, and obtain a funding application form and a copy of Section 3, 4, and 5
of the MCP Design Guidelines of the Monticello Downtown and Riverfront Plan.
Staffwill direct the applicant to contact t~esign Advisory Team as a resource for
suggestions and review of improvements~;PIY with the design guidelines, codes,
and ordinances of the Monticello Downtown and Riverfront Plan.
StaffwiIl request the applicant contact a lending institution regarding financing needs and
indicate to applicant that further action by the EDA on the potential loan will require
indication of support from a lending institution.
2. The applicant shall complete a DMRF application. Staffwill review the application for
consistency with the policies set forth in the Downtown Monticello Revitalization Fund
Guidelines.
4
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. DMRF GUIDELINES
3. City staff will accept the findings of a lending institution regarding applicant credit and
financial viability of the project. EDA approval will require a letter of support from the
lending institution. Upon receipt of the letter of support, City staff shall submit a written
recommendation to the EDA and a decision regarding the application shall be made by the
ED A within 14 days of submittal of the letter of support from the lending institution.
4. The EDA shall have authority to approve or deny the financial assistance of the
Downtown Monticello Revitalization Fund.
5. The EDA shall not disburse approved DMRF without a written acknowledgment from the
.@rtDesign Advisory Team that construction of the improvements are complete and
comply with applicable design guidelines and all codes and ordinances.
6. The EDA shall not disburse approved DMRF (grants and reimbursement) without certified
documentation of the actual costs of the improvements and completion of the
improvements.
7. The EDA shall not disburse the approved DMRF (loan) without proof of financing for
costs not funded by the grant and execution of the loan closing documents.
. ORIGINAL FUNDING
SOURCE - Economic Development Authority, Greater Monticello Enterprise Fund
AMOUNT - $200,000 (For Year Ending December 31, 1999).
The EDA shall disburse approved DMRF dollars from the payback ofGMEF Liquor Fund dollars
at such time the approved DMRF is disbursed.
REPORTING
Staffshall submit quarterly summaries and/or an annual report detailing the status of the DMRF.
FUND GlJIDELINE MODIFICATION
At a minimum, the EDA shall review the Fund Guidelines on an annual basis. No changes to the
DMRF guidelines shall be instituted without prior approval of the City Council.
.
5
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. DMRF GUIDELINES
LOAN ADMINISTRATION
1. City staff shall service and monitor all loans, matching grants, and fee reimbursements.
2. All loan documents shall include at a minimum, a note and mortgage.
.
DMRF Guidelines 7/97
DMRF Guidelines amended 2/98
DMRF Guidelines amended 5/98
.
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EDA Agenda - 2/23/99
11.
Consideration to adopt priorities for redevelopment of the North Anchor (riverfront) and
to appoint two representatives to the Subcommittee.
A. Reference and Background:
ADOPTION OF PRIORITIES
At the conclusion of the joint Council and Commission Workshop held January 20, 1999,
Michael Schroeder of Hoisington-Koegler suggested the City Council and each City
Commission in attendance develop and list five priorities to achieve in the redevelopment
ofthe North AnchorlRiverfront for submission to a North Anchor Subcommittee.
Thirdly, the process criteria for redevelopment of the North Anchor to be determined after
discussion and determination of priorities by the Subcommittee. The EDA is the last
commission to establish their priorities.
Please use the attached worksheet - Each commissioner is asked to list their five priorities
to achieve in the redevelopment of the North AnchorlRiverlTont prior to the February 23
EDA meeting. Each commissioner's priorities to be discussed at the meeting for
consideration to adopt the EDA's five priorities for redevelopment of the North Anchor.
APPOINTMENT OF TWO EDA COMMISSIONERS
Per the direction of Michael Schroeder, please appoint two EDA commissioners to the
North Anchor Subcommittee. A date for the subcommittee meeting has not yet been
scheduled.
B. Alternative Actions:
ADOPTION OF PRIORITIES
1. A motion to adopt the following five priorities to achieve in redevelopment of the
North Anchor.
2. A motion to deny adoption offive priorities to achieve in redevelopment of the
North Anchor.
3. A motion to table any action.
.
EDA Agenda - 2/23/99
APPOINTMENT OF TWO EDA COMMISSIONERS
1. A motion to appoint Commissioner and Commissioner
to the North Anchor Subcommittee.
2. A motion to table any action.
C. Recommendation:
No recommendation is given for development of the EDA's priorities or appointment of
commissioners to the North Anchor.
D. Supporting Data:
Form for use to list five priorities.
.
.
.
.
.
EDA Agenda - 2/23/99
FIVE PRIORITIES TO ACHIEVE IN REDEVELOPMENT OF THE NORTH ANCHOR
Economic Development Authority
Please use this form as a worksheet to select five priorities you would like to achieve in the
development of the North Anchor area. At the meeting each Commissioners choices will be
discussed and then one list offive items will be compiled to submit to the North Anchor.
Subcommittee.
1.
2.
3.
4.
5.
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EDA Agenda - 2/23/99
12.
Executive Director's Report.
a) DMRF No. 107 - Enclosed is a reminder letter to Steve Johnson relating to the
approved funding non-performance date. No response was heard from Steve.
b) UDAG Prepayment - Copy of the check received from FSI for final payoff of note
payable to City.
c) B&B Metal Stampings, Inc. is interested in a M&E loan. And A&E Michaels has
expressed interest in the DMRF. They suggested the EDA run a summer special
for more grant dollars to encourage facade improvement. Brad Larson's (Country
Travel) application is still pending.
o ,J!
January 14, 1999
MONTICELW
Steve C. Johnson
P.O. Box 598
Monticello, MN 55362
Re: Downtown Monticello Revitalization Fund No. 107
Dear Steve:
.
On behalf of the Economic Development Authority (EDA), this letter serves as a reminder of the
Non-Performance Provision within the Downtown Monticello Revitalization Fund (DMRF)
Guidelines. The provision states: An approved DMRF shall become null and void if funds are not
drawn or disbursed within 270 days from date of EDA approval.
DMRF No. 107 was approved for the property located at 107 West Broadway on May 20, 1998,
therefore, the approved funding becomes null and void on February 20. 1999.
Should you wish to receive the not-to-exceed $2,650 approved funding, please contact DA T at
295-0999 to schedule a construction completion review for compliance with design guidelines and
submit evidence of payment tor the approved facade improvements to the EDA office.
I thank you for participation in the revitalization program and hope you will take this opportunity
to maximize the funding approved for your facade improvements. Should you have any
questions, please do not hesitate to call me at 271-3208.
Respectfully yours,
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
~~\<:~~~
Ollie Koropchak
Executive Director
.
c:
DAT
File
\7~
Monticello City Hall, 25() E. Broadway, PO Box 1147, Monticello, MN 55362-9245' (612) 295-2711' Fax: (612) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (612) 295-3170 . Fax; (612) 271-3272
,- OUR REf!. ~O. ,
i li I ,I 11.1.,'>1 I.,', i ., I' ,
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: '1, ",".A~PU~ p~IO,~ .".':
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YOUR INVOIC~ ~~!
INvOICE OAf!
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, INVOICE A.MO~~f. ''''
Payoff of Note Payable with City of Monticello
as stated by Ms Olive Koropchal< on 11-17-98
'---~,- ~.., -"._-
.. PLEASE OETACH rHIS STUB lJLfUH[ UlPOSlllNG ...
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FULFILLMENT SYSTEMS INC.
PC) I;, 1\ (J.J()
1\1, )~IKIII (), I\IN SS:H)2
STEARNS BANK. N.A.
ST CI.OUD. MN
N;CT. NO. 206-519-0
Thirty One Thousand Two Hundred Fifty Dollars and 9/100
eAY
TO THE
ORDER OF
I
.
City of Monticello
250 E Broadway
Monticello, MN 55362
"--lii-O' (rtf7oI;ii.'~J:' Og . g . 0 ~-S- 5 I: "-'111 20 b
5 . g 0 III
1"" :~lseouN'l'.rA~~N ;,
75/1045
91"
31, 250.09
009704
DAII:
11-17-98
AMOUNT
$31,250.09
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