EDA Minutes 06-28-2012 (Special Meeting)MINUTES
SPECIAL MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Thursday, June 28, 2012 — 7:30 a.m.
Commissioners Present: President Bill Demeules, Vice President Bill Tapper, Treasurer Tracy
Hinz, Rod Dragsten, and Council Members Tom Perrault and Brian Stumpf
Commissioners Absent: Matt Frie
Staff Present: Executive Director Megan Barnett - Livgard, Finance Director Tom Kelly, Jeff
O'Neill
1. Call to Order
Bill Demeules called the special meeting to order at 7:30 a.m.
Purpose
The purpose of the special meeting is to consider the option of purchasing commercial
property owned by Mike Krutzig using a Greater Monticello Enterprise Fund (GMEF)
loan.
3. Consideration of utilizing a GMEF loan to purchase property owned by Mike
Krutzi
The EDA had at their June 20, 2012 meeting, decided against utilizing the EDA general
fund to purchase Mike Krutzig's 2.7 acre commercial parcel located in Jefferson
Commons. Mike Krutzig had proposed that the EDA purchase the property, which the City
had originally owned, and allow him the opportunity to repurchase it in 24 months or less
when the economy turns around. He indicated that he had a lead on a buyer who may be
interested in purchasing the parcel this fall for building next spring but that he was unable
to continue to carry the cost of owning the property at this time.
Megan Barnett- Livgard had suggested researching the option of purchasing this parcel
utilizing a GMEF loan. Discussions with the EDA Attorney Kennedy & Graven underlined
that such subsidies are to be tied to wage goals and number of jobs created by a business.
Purchasing the property with a GMEF loan would provide a business subsidy to a
developer with no end user or jobs created. Doing so would be a policy decision that would
set a precedent for future GMEF loan requests.
Rod Dragsten asked for some background about the GMEF. Although the fund was
initially established with liquor store funding in 1988, the $1.2 million currently in the fund
is the result of interest income and repayment of loans and grants according to Bill
Demeules.
Economic Development Authority Minutes 06/28/12
Staff pointed out that GMEF rules allow expenditure of half of the GMEF fund balance for
one applicant at one time to be utilized for development or equipment.
Bill Demeules was concerned that if the EDA were to purchase the property and structure it
with a two -year buyback provision that it could be seen as bridge financing or bailing out a
developer. He pointed out that the EDA would be unable to liquidate those funds to
replenish the fund should other loan needs arise. Staff is currently aware of two other
potential GMEF loan applicants. He indicated that the EDA could make a straight GMEF
loan purchase with no buy back and pursue selling the property to recoup the cost. He
noted that money from the sale would go toward replenishing the GMEF fund.
Brian Stumpf also wondered if it would be appropriate for the EDA to purchase the
property outright and then sell it to someone else within a short time frame.
Bill Tapper shared his concern about the policy impact of purchasing a parcel which is not
an immediate priority for downtown redevelopment. He was also concerned that the EDA
might have to hold the property for some time.
Tracy Hinz indicated that she is not in favor of moving forward with a GMEF loan.
Rod Dragsten noted that the purchase would run the GMEF balance down and limit future
opportunities. He suggested that, although there may be a potential for the EDA to make
money by purchasing the property, there hasn't yet been an indication of a lot of economic
growth in the area.
Mike Krutzig pointed out that he has tried to do his part for development in Monticello by
building three strip malls. He hoped that asking the EDA to support him in this effort
wouldn't be perceived as a bailout.
Jeff O'Neill noted the importance of supporting development throughout the community.
Tom Kelly stated that it may not make sense for the EDA to purchase the property but that
perhaps the city could purchase the land as it already owns other parcels in Jefferson
Commons. He also suggested that the City could consider purchasing the property with the
intention of establishing a second liquor store. However he stated that this location may not
be the ideal location for another liquor store.
There was some consideration of returning the matter to the City Council for further
review.
BILL TAPPER MOVED THAT THE EDA NOT UTILIZE A GMEF LOAN TO
PURCHASE THE PARCEL OWNED BY MIKE KRUTZIG AND RECOMMENDED
Economic Development Authority Minutes 06/28/12
THAT THE ISSUE OF PROPERTY PURCHASE BE FORWARDED TO CITY
COUNCIL FOR FUTHER REVIEW. ROD DRAGSTEN SECONDED THE MOTION.
MOTION CARRIED 5 -1 WITH BRIAN STUMPF VOTING IN OPPOSITION.
4. Adlournnlent
BILL TAPPER MOVED TO ADJOURN THE SPECIAL MEETING AT 8:03 AM.
TRACY HINZ SECONDED THE MOTION. MOTION CARRIED 6 -0.
Recorder:
Approved:
Attest:
Kerry T. Bum
July 11, 2012
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