EDA Minutes 06-09-2010EDA Meeting Minutes 6/09/10
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
MEETING MINUTES
Wednesday, June 9, 2010
6:00 p.m.
Mississippi Room - 505 Walnut Street, Monticello, MN
Commissioners Present: President Bill Demeules, Vice President Dan Frie, Treasurer Bill
Tapper, Bill Fair, Tracy Hinz and Council Members Tom Perrault and Brian Stumpf
Staff Present: Executive Director Megan Barnett, Finance Director Tom Kelly
1. Call to order
2. Approve Meeting Minutes
a. May 12, 2010
MOTION BY FAIR TO APPROVE MAY 12, 2010 MINUTES, SECONDED BY
TAPPER. MOTION CARRIED 7 -0.
3. Consideration of additional agenda items: None
4. Approval of EDA Invoices
Barnett stated that the Department of Employment Shovel Ready application invoice
involved the cost of participating in the state certification program to better position the
City for site selector evaluations. She pointed out that this designation indicates that the
City is prepared to proceed to more immediately locate businesses and would put
Monticello on a higher priority list. She noted that the $2950 expenditure included the in
depth consultant assistance in the application process. Barnett indicated that the City would
receive its certification in a few weeks and that she would provide a full report at that time.
MOTION BY TAPPER TO APPROVE INVOICES, SECONDED BY FRIE. MOTION
CARRIED 7 -0.
5. Consideration of adopting Resolution approving a Greater Monticello Enterprise Fund
(GMEF) for Hoglund Body and Equipment, LLC
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Barnett summarized that Hoglund Body and Equipment recently purchased property at 307
Chelsea Road with plans to utilize this facility for body repair, painting, sandblasting, and
custom fabrication. She noted that they are looking to remodel the building for these
specific needs. She indicated that Hoglund is asking the EDA to grant a GMEF loan of
$198,281 or 30% of total cost of project to remodel and purchase necessary equipment.
Hoglund proposed to create 17 new jobs at two to four times the minimum wage. GMEF
guidelines allow funds to be loaned for remodeling and purchase of equipment. The loan
terms include 3% interest rate and 5 year term with no balloon for equipment. EDA would
ask that Hoglund create ten new jobs within three years.
Barnett stated that the City Attorney has reviewed the application and supporting data and
has recommended that EDA enter into a security agreement using purchased equipment as
collateral. Staff recommended approval of the project because it is supportive of a local
business trying to expand in Monticello and it meets GMEF loan criteria. Barnett indicated
that the applicant was present and would be glad to answer any questions.
Barnett explained that the EDA would be taking first position on the value of equipment to
be purchased to cover the loan and that the bank would take second position with the
property under contract for deed and cover the remaining collateral of equipment.
Barnett pointed out that Hoglund would be leasing a portion of the building to another
company. Tapper cited that he is in favor of making the loan but that he had a few
questions. Barnett clarified that such a body shop would be allowed in the district
according to the City's Community Development Director. Also, the applicant indicated
that all of the sandblasting would be done inside.
Barnett assured the EDA that staff had looked at other financing options and that neither
tax abatement nor TIF really fit the project. The applicant indicated that they are satisfied
with the proposal.
MOTION BY STUMPF TO APPROVE ALTERNATIVE 1 WITH CORRECTIONS OF
NO BALLOON AND THE REVISED DOLLAR AMOUNT OF $198,281, SECONDED
BY FRIE. MOTION CARRIED 7 -0.
Barnett stated that Kennedy & Graven will next draft the loan agreement, security
agreement, promissory note, the applicant will sign and staff will work with the Finance
Department to cut the check.
6. Consideration of approving a Spending Plan for TIF District 1 -22
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Economic Development Director Barnett and Finance Director Tom Kelly provided an
overview of the Semper Development/Walgreens project and related Transportation
Feasibility Study.
Barnett stated that the subject project area is located within EDA's TIF District No. 1 -22. She
pointed out that the legislature recently passed a law loosening up eligible TIF expenses in
order to encourage private development. She noted that the EDA is being asked to utilize
surplus TIF funds of $378,680 for this development project. She indicated that TIF District No.
1 -22 has a significant surplus balance, but unfortunately the ability to spend the funds is quite
restrictive due to the fact the district was created in 1997 under strict regulations. The new law
passed now allows TIF to be utilized in ways to help spur private development. The proposed
infrastructure project meets the objectives of TIF District No. 1 -22, which is redevelopment.
The Planning Commission reviewed Walgreens land use applications and recommended that
the City Council approve use applications. Therefore, the proposed use of funds complies with
the City Comprehensive Plan.
She summarized that the EDA is being asked to consider a preliminary TIF Spending Plan. The
City Council will hold the required public hearing regarding this request and make a
recommendation to the EDA to be considered at the July meeting.
Barnett stated this is a great opportunity to take advantage of an otherwise very restricted pool
of money. The redevelopment of this intersection could continue to spur further
redevelopment. It is important to note that construction must commence by July 1, 2011.
Walgreens would like to be open for business in that location by spring of 2011.
Stumpf asked if the funds would be used for actual road improvements and if these are
different funds than what has been discussed in the past. Kelly replied that the funds could be
used for infrastructure improvements as long as they were tied to a private development.
District No 1 -22 funds have been discussed in the past, however a specific use has never been
identified due to state law restrictions. He stated the City would lose 60% of fund balance if it
isn't used when the City decertifies the district. Kelly also noted that, if the City receives funds
from the county or state to complete the improvement project, the required amount by the city
would be reduced.
Hinz inquired as to whether the developer could still develop the site if the EDA did not
approve the Spending Plan. Barnett stated the developer could still develop, however due to
the high cost of redeveloping, it is likely the development would not occur. Kelly stated
Walgreens needs these intersection improvements in order to proceed.
Tapper asked if it was really necessary to make this improvement now. He wanted to make
sure the EDA spends public money prudently. Barnett stated that this is a catalyst project and
that a developer is currently willing to put investment into this property. She stated the new
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TIF law encourages this type of development to utilize TIF dollars. She pointed out that the
project will also address continual regional traffic flow concern.
Demeules stated that the old movie theater building has six parking spots; from a development
point of view this configuration has limited potential.
Frie asked if staff had calculated the increase in tax value after the development was
completed. Kelly stated it really wasn't a huge increase as it would only add about $14,000.
Stumpf commented that the project would result in an occupied building that would create
pedestrian traffic.
In general, the EDA agreed that this was a good opportunity to utilize surplus TIF dollars. They
reiterated that they'd like to see the downtown developed in a pedestrian friendly manner and
do not want to cut corners on improvements. Barnett stated such conversations have occurred
with the developer and that she will relay the message again.
Barnett reiterated that this development has both a downtown and regional redevelopment
benefit. State law requires that in the official documents, this project be tied to a specific
private development.
Fair stated that he sees this as an opportunity to clean up a vacant block of blight.
MOTION BY FAIR TO ADOPT SPENDING PLAN FOR TIF 1 -22 ALTERNATIVE 1,
SECONDED BY FRIE. MOTION CARRIED 7 -0.
Barnett assured Tapper that the proposed TIF Spending Plan would be in conformance with the
recently amended Comprehensive Plan.
7. Consideration of joining MNCAR Exchange
Barnett is a currently a member of the Economic Development Director's Association of
Minnesota (EDAM). She stated that the MN Commercial Association of Realtors ( MNCAR)
partners with EDAM to find out what is happening in the industry, how to market the City,
who are the contacts, and how to go after them. MNCAR will now allow economic
development professionals to become members. This will provide the EDA access to land,
property and legal listings. In addition, the EDA will be able to send out monthly information
to 2,500 realtors. Barnett pointed out that it is a great opportunity to join at an extremely
discounted price. The membership fee is $1,000 for the year. She indicated that MNCAR has a
strong presence in St. Cloud and Minneapolis markets and is planning to provide statewide
coverage. Barnett noted that the City has already gotten some leads from having initial free
access to the Exchange since February. She indicated that she will be able to track MNCAR
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leads. She assured the EDA that the contract to list properties with Wayne Elam will continue
to be honored. Barnett noted that the marketing budget is $20,000 and so far this year only
$2,000 has been expended.
MOTION MADE BY FAIR TO JOIN MNCAR EXCHANGE AT A COST OF $1,000,
SECONDED BY TAPPER. MOTION CARRIED 6 -0 WITH PERRAULT ABSENT.
8. Marketing Update:
Barnett indicated that she has done a lot of research on conferences which might be useful to
attend to provide some productive economic development leads. She noted that the EDA
would be represented as an exhibitor at these conferences in order to increase visibility in front
of key leaders. She clarified that it would be an opportunity to market Monticello and cited the
FiberNet system as well as access to I -94 as great benefits. She indicated that it would be
helpful to also use the EDA marketing budget for an updated banner for the exhibitor booth at
a cost of $600 as well as for new printed marketing materials at a cost of $1,000.
Barnett recommended attendance at the Wind Industry Supply Chain Workshop at a gold
sponsorship level of $500. This workshop is scheduled for July 14`s and will be hosted by
Positively MN. She also suggested attendance at the Medical Design and Manufacturing
Conference in Minneapolis on July 13 -14. Additionally, she noted that the Life Science Alley
held in December in Minneapolis would expose Monticello to a potential technology
development emphasis at a cost of $2400. Finally, Barnett pointed out that the EDA has the
option of expanding its scope outside of Minnesota. She suggested that CoreNet Global is
hosting a conference in Phoenix in September for a fee of $1,100. She noted that Positively
MN (DEED) gets some great contacts from this conference.
There was discussion about how it might be beneficial to take a more global outlook toward
economic development. Barnett noted that the state has also been focusing on key industries
outside of Minnesota.
MOTION BY TAPPER TO AUTHORIZE EXPENDITURE OF UP TO $10,000 FOR
CONFERENCES, SECONDED BY FAIR. MOTION CARRIED 6 -0 WITH PERRAULT
ABSENT.
9. Director Report
Barnett reported that DEED is doing an annual summer road show visiting eleven different
cities to present New Tools for New Times - initiatives designed to encourage economic
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growth in Minnesota. She stated that she has the list of cities and schedule and encouraged
EDA attendance.
10. Adjournment
MOTION BY FRIE TO ADJOURN, SECONDED BY STUMPF, MOTION CARRIED 6 -0
WITH PERRAULT ABSENT.
The meeting adjourned at 7:04 p.m.
Bill Demeules, President