EDA Minutes 09-14-2011MINUTES
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, September 14,2011 - 6:00 p.m.
Commissioners Present: President Bill Demeules, Treasurer Bill Tapper, Tracy Hinz, Matt Frie,
Bruce Hamond, and Council Members Tom Perrault and Brian Stumpf
Staff: Executive Director Megan Barnett- Livgard, Finance Director Tom Kelly
Others: Brad Barger, Linda Jacobson
1. Call to Order
Bill Demeules called the meeting to order at 6 p.m.
2. Approve Meeting Minutes
TOM PERRAULT MOVED TO APPROVE THE AUGUST 10, 2011 SPECIAL JOINT
EDA -CITY COUNCIL MINUTES AS CORRECTED. MOTION WAS SECONDED BY
BILL TAPPER. MOTION CARRIED 7 -0.
BILL TAPPER MOVED TO APPROVE THE AUGUST 15, 2011 EDA MINUTES.
MOTION WAS SECONDED BY TOM PERRAULT. MOTION CARRIED 6 -0.
3. Consideration of additional agenda items None
4. Approval of EDA Invoices
BILL TAPPER MOVED TO APPROVE THE INVOICES. MOTION WAS SECONDED
BY BRUCE HAMOND. MOTION CARRIED 7 -0.
5. Continued Public Hearing — Consideration of Adoption Resolution #2011 -73 and
#2011 -74 approving a purchase and redevelopment contract between the EDA and
Suburban Manufacturing, the Business Subsidy Agreement, the conveyance of land,
and an Interfund Loan.
This public hearing had been introduced during the EDA's August 10`b meeting and was
continued to the September meeting to provide additional time for negotiations. It is
associated with the establishment of TIF District No. 1 -39 as an Economic Development
District to assist in the write -down of land and infrastructure costs to Suburban
Manufacturing and approval of the TIF Plan. A proposed interfund loan would assist in
writing down the purchase. The EDA would repay the loan over nine years with funds
from the newly established TIF District.
Economic Development Authority Minutes 09/14/11
At their August 22ad meeting, the City Council approved Otter Creek 4`h Addition
creating a 4.4 acre site along Chelsea Road and Dalton Way for the development of
Suburban Manufacturing's new facility.
According to Ehler's, Otter Creek cost the EDA $2.41 /square foot based on land purchase
price and improvements. In the past the EDA has attempted to structure business
subsidies that would result in a payback equal to the cost of the land and improvements.
Banks are now requiring higher loan to value ratios, land appraisals are coming in lower,
and developer cash requirements are higher. These conditions require that participating
parties need be more creative and aggressive in order to make new projects happen.
The proposed business subsidy will consist of selling 4.4 acres at a price of .25 cents per
square foot. The approximate "write down" is $413,994 and the project will generate
approximately $375,736 of TIF dollars over nine years.
While the EDA may not be fully reimbursed for the initial land cost of Otter Creek, the
benefits of assisting a local company with an expansion are great. The project will
generate 14 new livable wage jobs, create new long tern tax base, and allow Suburban to
lease to a company that will locate in Monticello.
Brad Barger spoke about Suburban's intention to lease or sell their existing property.
Several companies have already inquired about the space.
The public hearing was opened. Hearing no public comment, the public hearing was
closed.
BRIAN STUMPF MOVED TO ADOPT RESOLUTION #2011 -73 APPROVING THE
PURCHASE AND REDEVELOPMENT CONTRACT BETWEEN THE CITY OF
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY AND SUBURBAN
MANUFACTURING INC., THE BUSINESS SUBSIDY AGREEMENT AND
CONVEYANCE OF LAND; AND RESOLUTION #2011 -74 AUTHORIZING AN
INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH
TAX INCREMENT FINANCING DISTRICT 1 -39. MOTION WAS SECONDED BY
TRACY HINZ. MOTION CARRIED 7 -0.
6. Consideration of approving a Greater Monticello Enterprise Fund (GMEF) loan for
Jacobson Veterinary Properties LLC
Linda Jacobson spoke briefly in support of her request that the EDA grant a GMEF loan in
the amount of $50,000 to assist in the purchase of property and construction costs
associated with the development of a new 6,800 square foot veterinary clinic. The clinic
will create three new jobs and has the potential to create an additional twelve jobs in the
future.
Economic Development Authority Minutes 09/14/11
GMEF guidelines allow funds to be allocated towards real estate purchases and
construction associated costs. The loan terms are 3% interest rate with a three year pay off.
BILL TAPPER MOVED TO ADOPT RESOLUTION # 2011- 96APPROVING A GMEF
LOAN FOR JACOBSON VETERINARY PROPERTIES LLC IN THE AMOUNT OF
$50,000. MOTION WAS SECONDED BY MATT FRIE. MOTION CARRIED 7 -0.
7. Consideration of Decertification of Tax Increment District 1 -31 (UMC)
Finance Director Tom Kelly outlined the status of Tax Increment District 1 -31 - an
economic development district which was created for Ultra Machining Company (UMC)
in 2002 - and noted the restructuring option available at this time.
The EDA could consider retiring the existing pay -as- you -go note payable to UMC with the
December payment and decertify TIF District 1 -31 as of 12/31/11. Choosing to decertify
the district one year early would add tax capacity to the City's general tax base and
possibly lower future tax rates. It would also reduce pay -as- you -go note commitments and
save $623.68 in interest costs in 2012. The EDA could consider transferring its remaining
cash balance of $69,273 in TIF District 1 -31 to TIF District 1 -38 to help pay a portion of
the cash shortage projected on its interfund loan.
BILL TAPPER MOVED TO APPROVE PAYING OFF THE UMC PAY -AS- YOU -GO
NOTE AT END OF 2011; AND TO ADOPT RESOLUTION # 2011 -97 APPROVING
DECERTIFICATION OF TIF DISTRICT 1 -31 AND TRANSFER THE CASH
BALANCE TO TIF DISTRICT 1 -38. MOTION WAS SECONDED BY BRIAN
STUMPF. MOTION CARRIED 7 -0.
8. Director Report
Staff noted that the public hearing notice to amend TIF District 1 -5 would be re- published
so that the EDA could move forward in its determination about how to utilize those funds.
It is anticipated the public hearing will occur at a City Council meeting in late October.
9. Adiournment
BILL TAPPER MOVED TO ADJOURN THE MEETING AT 6:24 PM. MOTION WAS
SECONDED BY TOM PERRAULT. MOTION CARRIED 7 -0.
Recorder:
Approved:
Attest:
Kerry T. Burri