EDA Agenda 04-08-2009AGENDA
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Wednesday, April 8, 2009
6:00 p.m.
Mississippi Room - 505 Walnut Street, Monticello, MN
Commissioners: President Bill Demeules, Vice President Dan Frie, Treasurer Bill Tapper, Bill Fair, Bob
Viering, and Council members Tom Perrault and Brian Stumpf
Staff: EDA Executive Director Megan Barnett
Call to Order
2. Approve Minutes: March 11, 2009
3. Consideration of additional agenda items
4. Approval of the EDA Invoices
5. Request from WSI to extend terms related to their Greater Monticello Enterprise Fund
Loan
6. Annual Meeting
7. Report of committees: Higher Education Committee, Marketing, Fiber Optics
8. Report of the Executive Director
9. Adjournment (immediately proceed to workshop)
MINUTES
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Wednesday, March 11, 2009
6:00pm
1. Call to Order:
Chairman Demeules called the meeting to order and declared a quorum at 6:00pm.
Roll Call:
The following Commissioners were present:
Chair Bill Demeules
Vice President Dan Frie
Commissioner Bill Fair
Commissioner Bob Viering
Council Member Brian Stumpf
Council Member Tom Perrault
Absent:
Commissioner Bill Tapper
Also present Executive Director Megan Barnett
2. Approve minutes:
MOTION BY FAIR TO APPROVE MINUTES WITH CORRECTIONS TO THE VOTES
SECONDED BY FRIE. MOTION CARRIED. 6 -0
3. Consideration of additional agenda items:
Staff requested discussion regarding EDA members volunteering on the Higher Education
Committee and lenders /realtors group.
Commissioner Perrault stated he would like to discuss the MN Homeownership monthly
telephone seminar on Foreclosures.
4. Approval of EDA invoices:
MOTION BY VIERLING TO APPROVE EDA INVOICES INCLUDING THE
MONTICELLO TIMES INVOICE SECONDED BY FAIR. MOTION CARRIED.
6 -0.
5. Public Hearing and adoption of Resolution No. 2009 -01 establishing a Business Subsidy
Policy.
Director Barnett stated the Business Subsidy Criteria presented tonight is the document that
was presented and discussed at the February EDA workshop.
Chair Demeules opened the public hearing. There was no public comment. The public
hearing was closed.
MOTION BY FAIR TO APPROVE THE BUSINESS SUBSIDY CRITERIA SECONDED
BY VIERLING. MOTION CARRIED. 6 -0.
Commissioner Viering questioned if the EDA and City has the authority to issue business
subsidy for working capital purposes. Director Barnett stated Kennedy and Graven provided
clear legal opinion on this topic. EDA's do have statutory authority to issue loans for
working capital. Furthermore, it is questionable if City Councils can issue loans for this
purpose.
6. Recommend the City Council approve the adoption of Business Subsidy Criteria
related to: Tax Increment Financing, Greater Monticello Enterprise Fund, and
Monticello Small cities Economic Development Set -aside Revolving Loan Fund:
Tax Increment Financing (TIF):
Director Barnett handed out a grammar and sentence structure revised GMEF criteria.
Director Barnett stated City Staff and Martha Ingram from Kennedy and Graven made minor
sentence clarification changes as directed by the EDA during the workshop.
MOTION BY STUMPF TO APPROVE BUSINESS SUBSIDY CRITERIA RELATED TO
TAX INCREMENT FINANCING SECONDED BY PERRAULT. MOTION CARRIED. 6-
0.
Greater Monticello Enterprise Fund (GMEF)
Director Barnett stated changes were made to the Greater Monticello Enterprise Fund criteria
as directed by the EDA during the February workshop. Staff met with Council Member
Perrault to review a few additional sentence clarifications. Under Loan Application
Procedures, b , #5 the sentence is being proposed to include the word "action" instead of
approval.
Commissioner Fair stated the word "issued" should be changed to say "approved or denied."
The EDA generally agreed to this modification.
MOTION BY FAIR TO APPROVE THE GREATER MONTICELLO ENTERIPSE FUND
GUIDELINES AS MODIFIED SECONDED PERRAULT. MOTION CARRIED. 6 -0.
Perrault stated a period needed to be inserted between "viable" and "city."
Monticello Small Cities Economic Development Set -Aside Fund Guidelines.
Director Barnett stated changes were made to clarify the fact that the City Council is the
governing body of these funds until the funds are paid back into the GMEF. At this time the
EDA becomes the governing body. Barnett also stated a few additional modifications were
changed throughout the document to clarify that "city" means "city council."
Chair Demcules questioned if the EDA is a reviewing body of the application. Barnett stated
the guidelines are not set up to have the EDA review applications, however this would be an
appropriate step.
Commissioner Fair stated he did not see the need for the EDA to review these applications.
Commissioner Viering stated he would rather see the applications come through the EDA.
The consensus of the EDA was to include language under the process section stating the
EDA will review the applications and provide a recommendation to the City Council.
MOTION BY FAIR TO APPROVE THE MONTICELLO SMALL CITIES ECONOMIC
DEVELOPMENT FUND AS AMENDED SECOND BY FRIE. MOTION CARRIED. 6 -0.
Commissioner Fair questioned how staff plans to market the availability of these funds. Staff
stated every intention will be made to market this loan program through network meetings
and the business newsletter (Business Insider).
7. Recommend the City enter a Listing Agreement with Nelson Realty:
Director Barnett reviewed the staff report and stated the positive reasons why the City should
list city owned land with a commercial broker and more specifically, Nelson Realty. Barnett
stated she did contact four firms and they stated they were not interested in listing Monticello
owned land at this point.
Barnett stated Andy Larson with Nelson Realty has stepped up to the plate and worked with
staff on creating a listing agreement that is flexible yet fair to both parties. She stated a few
changes are being proposed, change the land price from $3.00 to $2.75 /square foot and
remove "before economic incentives are applied" under #7 Compensation of Agent.
Commissioner Frie asked how Monticello's land price compared with surroundings cities.
Andy Nelson realty stated prices range from $6.00 to $2.00 per square foot.
Commissioner Viering stated a minimum compensation should be included. This relates to
situations where the City decides to sell the land for zero dollars, the commercial broker should
still have an incentive to bring the city a potential buyer.
Director Barnett stated she would work with Andy on including a transaction fee.
Council Member Stumpf asked how we assure that property is not sold on speculation and held
for years. Barnett stated that the timeline desired for development can be built into the purchase
agreement.
Commissioner Viering asked what would happen in situations where inquiries came through the
City and not through Nelson Realty. Director Barnett stated tracking this type of accountability
would be difficult. A standard listing agreement gives the commercial broker exclusive rights to
market the property and handle all inquiries.
Commissioner Viering asked Andy Larson to provide a summary as to why the City should list
with Nelson Realty. Mr. Larson stated that they have good networks and a good understanding of
the community. Mr. Larson also stated they focus on the Wright County area. Director Barnett
stated that based on the networks and associations Nelson and the City are involved in, it appears
that a partnership between Nelson and the City will be a good fit.
MOTION BY VIERING TO ENTER INTO A LISTING AGREEMENT WITH NELSON
REALTY BASED ON REDUCING THE LAND PRICE TO $2.75 AND INSERTING A
TRANSACTION FEE SECONDED BY FRIE. MOTION CARRIED. 6 -0.
Council member Perrault questioned whether we should solicit additional commercial brokers,
like Coldwell Banker who may have the potential for a bigger network. Commissioner Frie
stated he has asked the same question over the years and has come to realize the bigger firms are
just not interested in coming to this area. These companies have been asked several times in the
past and they just do not have interest. It is not in the best interest of the City to list with
someone that is not enthusiastic to market Monticello.
8. Consideration of additional items:
Director Barnett asked for a volunteer from the EDA to serve on the Higher Education
Committee. Commissioner Frie stated he would serve on the Higher Education Committee and
Commissioner Viering stated he would be willing to replace Commissioner Frie on the
Marketing Committee.
Director Barnett updated the EDA regarding the current marketing efforts.
Director Barnett informed the EDA that the City was awarded the Neighborhood Stabilization
Grant. It is anticipated that the required contract will be signed in April. After the contract is
signed, the City and CMHP will aggressively market these available funds. Director Barnett also
updated the EDA on the local group of lenders /realtors/WCCA/title companies that meet on a
regular basis to try to generate ideas and venues to promote foreclosure prevention events and
information.
Director Barnett asked if any commissioner would like to attend these meetings. Commissioner
Fair stated he would attend with advance notice and Commissioner Frie stated he would be a
back -up.
Commissioner Viering passed out information regarding the Cities that we were awarded the
NSP grant.
MOTION BY DEMULUES TO ADJORN SECONDED BY FAIR. MOTION CARRIED. 6 -0.
ADJORN 7:15pm
4. Approval of EDA Invoices.
a. Kennedy & Graven:
Revisions to Business Subsidy.
b. Northland Securities: TIF Analysis Project
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City of Monticello
January 31, 2009
MN190 -00001 General
Through January 31, 2009
Page: 1 >
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470 I�
Minneapolis, MN 55402 ;
MAR - 9 2009
CITY Off- lhA; NN 9, GELL.O
For All Legal Services As Follows:
Hours
Amount
1/26/2009
MNI
Review revised GMEF documents from community
1.20
210.00
development director.
1/27/2009
MINI
Review GMEF guidelines document
2.00
350.00
1/27/2009
MNI
Phone conversation with M Barnett regarding business
0.30
52.50
subsidy policy.
1129/2009
MINI
Review of business subsidy documents; office conference
1.50
262.50
with S Bubul regarding same.
1/29/2009
MINI
Phone conversation with M Barnett regarding business
1.50
262.50
subsidy policy; create blackline of GMEF document as
reviewed; research model business subsidy policy
documents.
1/30/2009
MINI
Revise and send GMEF guidelines to M Barnett.
1.00
175.00
Total Services :
$
1,312.50
Total Services and Disbursements:$ 1,312.50
NORTHLAND`SECUYIITIES INC
45 SOUTH 7TH STREET
SUITE 2500
MINNEAPOLIS, MN 55402
USA
Voice: 612- 851 -4915
Fax: 612 -851 -5951
NORTHLAND 0 SEC
Sold To:
City of Monticello
Megan Barnett, Econ Devel Dir.
505 Walnut Street, 41
Monticello, MN 55362
Customer PO Payment Terms
3trat TIF Mgmt Study Net 30 Days
Invoice
Invoice Number:
1864
fl Invoice Date:
2/5/09
F E B 1 0 2009 a• Pag`':
1
Sales Rep ID Due Date
3/7/09
Description
Amount
(Services provided related to Strategic TIF Management Study - January 2009
1,711.89
(please see attached detail)
1
rlt
Subtotal 1,711.89
Sales Tax
Total Invoice Amount 1,711.89
Check No: Payment Received
TOTAL 1,711.89
Northland Securnies, Inc. 45 South 7tb Street, Suite 2500, Minneapolis, MN 55402 'roll F,.. 1- 800 -851 -2920 atm. 612 -851 -5900 Ear 612- 851 -5987
www. norrhl andsecurities xum
Member FINRA x.d SIPC
NORTHLAND 0 SECURITIES
INVOICE SUPPLEMENT
Client: City of Monticello
Project: Strategic TIF Management Study
Contact: Megan Barnett
Economic Development Director
City of Monticello
505 Walnut Street #1
Monticello, MN 55362
Billing Period: January 2009
Services Performed
• Work day in Monticello (January 12)
• EDA meeting (January 14)
• Organize district data
• Make report outline
• Obtain district data from County
• Travel (50 %)
0 /ss,
Staff Time
Position
Hours
Rate
Billable
Senior Professional
9.00
$160
$1,440.00
Professional
1.00
$135
$135.00
Support
-
$105
$0.00
Total Staff
10.00
$1,575.00 v
Expenses
Mileage
$136.89
Printing
$0.00
Other
$0.00
Total Expenses
$136.89
Total This Period
$1,711.89
Project Summary
Total Budget
$9,250.00
Billed This Period
($1,711.89)
Billed Previous
($2,048.45)
Budget Remaining
$5,489.67
Northland Securities, Inc.
Page 1 of 1
i M I -109
5. Review and approve amendment to agreement between the Monticello Economic
Development Authority and WSI:
A. REFERENCE AND BACKGROUND:
Paul Sheely from WSI submitted a letter requesting an extension of terms for the Greater
Monticello Enterprise Fund (GMEF) loan between WSI Industries and the Monticello
EDA. WSI is asking the EDA to amend the agreement to extend the current principal and
interest payment another three years. This would put their final balloon payment in the
amount of $257,855.71 due in 2012.
The EDA awarded a five year loan in the amount of $350,000 in 2004 to WSL As part of
the agreement WSI was required to create 46 new full -time jobs. The final balloon
payment in the amount of $274,730 is due in May of 2009 in order to satisfy the loan
agreement.
B. ATTACHMENTS:
1. Letter from Paul Sheely formally requesting an extension
2. First Amendment to Loan Agreement
3. Amended Promissory Note
4. Amortization Schedule
5. Resolution 2009 -02 Approving Amendment
C. STAFF RECOMMENDATION:
Staff recommends the EDA approve the request by WSL Everyone is aware of the
challenging economic climate. WSI is a machining company that is feeling the effects of
certain divisions slowing down resulting less customized machining products being
produced. WSI has always been on time with their monthly principal and interest
payments and they have added great value (jobs & tax base) to the City since moving to
Monticello in 2004. Extending the loan an additional three years appears to be a
reasonable request.
D. ALTERNATIVE ACTION:
1. Motion to adopt Resolution #2009 -02 approving an amendment of the loan agreement
between the Monticello EDA and WSI.
2. Motion to deny Resolution #2009 -02 based on findings of fact.
3. Motion to table action.
1
wn
March 20, 2009
Ms. Megan Barnett
Economic Development Director
City of Monticello
505 Walnut Street, Suite 1
Monticello, MN 55362
Dear Megan:
This letter is to formally request an extension of the terms of the loan between WSI Industries,
Inc. and the Monticello Economic Development Authority. WSl Industries is requesting that the
term of the loan be extended another 3 years from its current maturity date of May 1, 2009 to
May 1, 2012. WSI Industries is also requesting that the current monthly principal and interest
payments of $1,483.49 continue until the entire balance is due and payable on May 1, 2012.
The Company is making the request to extend the term of the original agreement due to the
current economic conditions. In the original loan agreement, the Company agreed to create at
least 46 new full -time equivalent jobs within 2 years and tc provide at least 16 of these jobs with
pay rates of at least $22.00 per hour. Since that time, we have grown the Company and
currently have 69 full -time equivalent employees and 25 employees have a base rate of at least
$23.00. The Company is requesting an extension to the original loan is order to help preserve
these jobs.
WSI Industries looks forward to continued growth in the City of Monticello. The Company has
invested over $1 million in a building addition since last summer and has invested in new
machinery and equipment of $5 million in the past 3 years. We appreciate the consideration the
Economic Development Authority will give our request for an extension of the original loan.
L�Paul D. Shealy
VP /CFO
WSI Industries, Inc.
WSI INDUSTRIES, INC.
w .wsiindustrias.com NASDAQ:wsci
213 Chelsea Road • Monticello, Minnesota 55362 • Phone (763) 295.9202 • Fax (763) 295 -9212
FIRST AMENDMENT TO LOAN AGREEMENT
This First Amendment to Loan Agreement (the "Amendment ") is made this th day of
2009, by WSI Industries, hic., a Minnesota corporation (the `Borrower") and the
City of Monticello Economic Development Authority, a public body corporate and politic
(the "Authority").
RECITALS
A. The Borrower and the Authority entered into a loan agreement (the "Loan
Agreement ") dated as of May 3, 2004, for the acquisition of certain real property described on
Exhibit A attached hereto (the "Property") to be used as a precision machining and job shop
manufacturing facility in the City of Monticello (the "City").
B. Pursuant to the Loan Agreement, the Authority loaned to the Borrower the sum of
$350,000 (the "Loan"), evidenced by a promissory note (the "Note ") and a mortgage (the
"Mortgage'), both dated as of May 3, 2004 (the "Loan Closing Date'), and executed and delivered
to the Authority by the Borrower. The Mortgage was recorded on May 13, 2004 in the office of the
Wright County Recorder as document no. A908908.
C. The Loan Agreement provides for a sixty-month term of the Loan, which is due and
payable on May 1, 2009.
D. The Loan Agreement contained a business subsidy agreement consisting of certain
job and wage goals to be met by May 3, 2006, and such job and wage goals have been duly satisfied
by the Borrower.
E. The parties desire to extend the term of the Loan beyond the term provided in the
Loan Agreement, and have agreed to modify certain terms and conditions of the Loan
Agreement as set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
1. Amendment of paragraph 2 of the Loan Agreement. Paragraph 2 of the Loan
Agreement is amended to read as follows:
Repayment of Loan. The Loan shall be repaid with interest as follows:
(a) Interest at the rate of two percent (2.0 %) per annum shall accrue from the
Loan Closing Date until the Loan is repaid in full.
(b) Payments of principal and interest shall continue on the third day of each and
every month until the Loan is repaid in full. Such payments shall fully amortize any
outstanding balance of the Loan over twenty-five (25) years from the Loan Closing Date;
348988v1 MNI MN325 -20
provided, however, the entire remaining unpaid balance of principal and interest shall be due
and payable on the first day of the ninety -sixth (96`h) month following the Initial Payment
Date of June 3, 2004.
2. Miscellaneous. Except as amended by this Amendment, the Loan Agreement
shall remain in full force and effect. Upon execution, Borrower shall reimburse the Authority for
all out -of pocket -costs incurred by the Authority in connection with negotiating, drafting and
approval of this Amendment.
348988v1 MM MN325 -20 2
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the
proper officers thereunto duly authorized on the day and year first written above.
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
By:
President
By:
Executive Director
[Signature page to First Amendment to Loan Agreement - Monticello EDA, Monticello, Minnesota]
348988vl MM MN325 -20
BORROWER
WSI INDUSTRIES, INC.
By:
Its
[Signature page to First Amendment to Loan Agreement - Borrower]
348988v1 MNI MN325 -20
Exhibit A
Description of Property
Lot 1, Block 1, Remmele Addition
348988A MNI MN325 -20
City of Monticello Amortization Schedule
WSI Indistries
Principal Amount of Debt:
$ 294,240.58
Interest Rate:
2.000
Term (Years):
3
First Payment Date:
5/312009
Principal Distibution Code: -
Interest Distribution Code:
$993.09
Distibution Codes: 101.18306 101.36216
Period -"
Number.
Payment Date
Receipt Number
Month
Principal - Interest
Total Payment
Balance After
Payment
1
5/3/2009
$993.09
$490.40
$1,483.49
$293,247.49
2
6/3/2009
$994.74
$488.75
$1,483.49
$292,252.75
3
7/3/2009
$996.40
$487.09
$1,483.49
$291,256.34
4
8/3/2009
$998.06
$485.43
$1,483.49
$290,258.28
5
9/3/2009
$999.73
$483.76
$1,483.49
$289,258.56
6
1013120091
$1,001.39
$482.10
$1,463.49
$288,257.16
7
11/3/20091
$1,003.06
$480.43
$1,463.49
$287,254.10
8
12/3/20091
$1,004.73
$478.76
$1,483.49
$286,249.37
9
1/3/2010
$1,006.41
$477.08
$1,483.49
$285,242.96
10
2/3/2010
$1,008.09
$475.40
$1,483.49
$284,234.88
11
3/3/2010
$1,009.77
$473.72
$1,483.49
$283,225.11
12
4/3/2010
$1,011.45
$472.04
$1,483.49
$282,213.66
13
5/3/2010
$1,013.13
$470.36
$1,483.49
$281,200.53
14
6/3/2010
$1,014.82
$468.67
$1,483.49
$280,185.71
15
7/3/2010
$1,016.51
$466.98
$1,483.49
$279,169.19
16
8/3120101
$1,018.21
$465.28
$1,483.49
$278,150.98
17
9/3/2010
$1,019.91
$463.58
$1,483.49
$277,131.08
18
10/3/2010
$1,021.60
$461.89
$1,483.49
$276,109.47
19
11/3/2010
$1,023.31
$460.18
$1,483.49
$275,086.17
20
12/3/2010
$1,025.01
$458.48
$1,483.49
$274,061.15
21
1/3/2011
$1,026.72
$456.77
$1,483.49
$273,034.43
22
2/3/2011
$1,028.43
$455.06
$1,483.49
$272,006.00
23
3/3/2011
$1,030.15
$453.34
$1,483.49
$270,975.85
24
4/3/2011
$1,031.86
$451.63
$1,483.49
$269,943.99
25
5/3/20111
$1,033.58
$449.91
$1,483.49
$268,910.41
26
6/3/2011
$1,035.31
$448.18
$1,483.49
$267,875.10
27
7/3/2011
$1,037.03
$446.46
$1,483.49
$266,838.07
28
8/3/2011
$1,038.76
1
$444.73
$1,483.49
$265,799.31
29
9/3/2011
$1,040.49
$443.00
1
$1,483.49
$264,758.82
30
10/3/2011
$1,042.23
$441.26
$1,483.49
$263,716.59
31
11/3/2011
$1,043.96
$439.53
$1,483.49
$262,672.63
32
12/3/2011
$1,045.70
$437.79
$1,483.49
$261,626.93
33
1/3/2012
$1,047.45
$436.04
$1,483.49
$260,579.48
34
2/3/2012
$1,049.19
$434.30
$1,483.49
$259,530.29
35
3/3/2012
$1,050.94
$432.55
$1,483.49
$258,479.35
36
4/3/2012
$1,052.69
$430.80
$1,483.49
$257,426.66
37
5/3/2012
$257,426.66
$429.04
$ 257,855.71
Page 1 of 1
EDA RESOLUTION NO. ZW� r6�
RESOLUTION APPROVING AN AMENDMENT OF THE
LOAN AGREEMENT BETWEEN THE CITY OF
MONTICELLO ECONOMIC DEVELOPMENT
AUTHORITY AND WSI INDUSTRIES, INC. AND OF THE
PROMISSORY NOTE MADE BY WSI INDUSTRIES, INC.
BE IT RESOLVED BY the Board of Commissioners ( "Board ") of the City of Monticello
Economic Development Authority (the "Authority' or "Holder ") as follows:
Section 1. Recitals.
1.01. The Authority and WSI Industries, hie. (the "Maker") entered into a loan agreement
(the "Loan Agreement ") dated as of May 3, 2004, for the acquisition of certain real property for a
precision machining and job shop facility in the City of Monticello.
1.02. Pursuant to the Loan Agreement, the Authority loaned to the Borrower the sum of
$350,000 (the "Loan"), evidenced by a promissory note (the `Mote ") and a Mortgage (the
"Mortgage "), both dated as of May 3, 2004, and executed and delivered to the Authority by the
Borrower. The Mortgage was recorded on May 13, 2004 in the office of the Wright County
Recorder as document no. A908908.
1.03. The Loan Agreement and Note provide for a sixty-month term of the Loan, which is
currently due and payable on May 1, 2009.
1.04. The Maker has requested modification of the Loan Agreement and Note to
provide for an extension of the term of the Loan for an additional 36 months.
Section 2. Amendment of Loan Agreement and Note Approved.
2.01. The Authority hereby approves amendment of the Loan Agreement in
substantially the form attached hereto as Exhibit A, and authorizes execution of the amended
Loan Agreement, subject to modifications that do not alter the substance of the transaction and
that are approved by the President and Executive Director, provided that execution of the
amended Loan Agreement by those officials shall be conclusive evidence of their approval.
2.02. The Authority further authorizes delivery to the Maker of the original Note upon
receipt of a replacement Note, amended as described in this resolution, from the Maker.
Approved this 8th day of April, 2009, by the Board of Commissioners of the City of Monticello
Economic Development Authority.
President
ATTEST:
Executive Director
348990vl NMI MN325 -6
EXHIBIT A
FIRST AMENDMENT TO LOAN AGREEMENT
This First Amendment to Loan Agreement (the "Amendment") is made this _
' 2009, by WSI Industries, hic., a Minnesota corporation (the `Borrower")
City of Monticello Economic Development Authority, a public body corporate and
(the "Authority").
RECITALS
day of
and the
politic
A. The Borrower and the Authority entered into a loan agreement (the "Loan
Agreement ") dated as of May 3, 2004, for the acquisition of certain real property described on
Exhibit A attached hereto (the "Property") to be used as a precision machining and job shop
manufacturing facility in the City of Monticello (the "City").
B. Pursuant to the Loan Agreement, the Authority loaned to the Borrower the sum of
$350,000 (the "Loan "), evidenced by a promissory note (the "Note ") and a mortgage (the
"Mortgage "), both dated as of May 3, 2004 (the "Loan Closing Date"), and executed and delivered
to the Authority by the Borrower. The Mortgage was recorded on May 13, 2004 in the office of the
Wright County Recorder as document no. A908908.
C. The Loan Agreement provides for a sixty-month term of the Loan, which is due and
payable on May 1, 2009.
D. The Loan Agreement contained a business subsidy agreement consisting of certain
job and wage goals to be met by May 3, 2006, and such job and wage goals have been duly satisfied
by the Borrower.
E. The parties desire to extend the term of the Loan beyond the term provided in the
Loan Agreement, and have agreed to modify certain terms and conditions of the Loan
Agreement as set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
1. Amendment of paragraph 2 of the Loan Agreement. Paragraph 2 of the Loan
Agreement is amended to read as follows:
Repayment of Loan. The Loan shall be repaid with interest as follows:
(a) Interest at the rate of two percent (2.0 %) per annum shall accrue from the
Loan Closing Date until the Loan is repaid in full.
(b) Payments of principal and interest shall continue on the third day of each and
348990v1 MM MN325 -6 A -1
every month until the Loan is repaid in full. Such payments shall fully amortize any
outstanding balance of the Loan over twenty -five (25) years from the Loan Closing Date;
provided, however, the entire remaining unpaid balance of principal and interest shall be due
and payable on the first day of the ninety -sixth (96h) month following the Initial Payment
Date of June 3, 2004.
2. Miscellaneous. Except as amended by this Amendment, the Loan Agreement
shall remain in full force and effect. Upon execution, Borrower shall reimburse the Authority for
all out -of pocket -costs incurred by the Authority in connection with negotiating, drafting and
approval of this Amendment.
348990v1 MM MM325 -6 A -2
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the
proper officers thereunto duly authorized on the day and year first written above.
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
By:
President
By:
Executive Director
[Signature page to First Amendment to Loan Agreement - Monticello EDA, Monticello, Minnesota]
348990v1 MM MN325 -6 A -3
BORROWER
WSI INDUSTRIES, INC.
By:
Its
[Signature page to First Amendment to Loan Agreement - Borrower]
348990vl MALI MN325 -6 A -4
Exhibit A
Description of Property
Lot 1, Block 1, Remmcle Addition
348990v1 MNI MN325 -6 A -5
AMENDED PROMISSORY NOTE
$350,000
2.0%
'2009
WSI Industries, Inc., a Minnesota corporation ( "Maker"), for value received, hereby
promises to pay to the City of Monticello Economic Development Authority (the "Authority"), a
public body corporate and politic or its assigns (Authority and any assigns are collectively referred
to herein as "Holder"), at its designated principal office or such other place as the Holder may
designate in writing, the principal sum of Three Hundred Fifty Thousand and no /100th Dollars
($350,000) or so much thereof as may be advanced under this Note, with interest as hereinafter
provided, in any coin or currency that at the time or times of payment is legal tender for the payment
of private debts in the United States of America. The principal of and interest on this Note is
payable in installments due as follows:
1. Interest at the rate of two percent (2.0 %) per annum shall accrue from the Loan
Closing Date, as defined in the loan agreement dated as of May 3, 2004, between Maker and
Holder, as amended by the First Amendment thereto dated as of 2009 (together, the
"Loan Agreement ") until the Loan is repaid in full.
2. Payments of principal and interest commenced on June 3, 2004 (the "Initial Payment
Date ") and shall continue on the third day of each and every month until the Loan is paid in full.
Such payments shall fully amortize any outstanding balance of the Loan over twenty -five (25)
years; provided, however, the entire remaining unpaid balance of principal and interest shall be due
and payable on the first day of the ninety -sixth (96th) month following the Initial Payment Date.
3. The Maker shall have the right to prepay the principal of this Note, in whole or in
part, on any date a principal and interest payment is due and payable.
4. This Note is given pursuant to the Loan Agreement and is secured by a mortgage
dated May 3, 2004 and recorded on May 13, 2004 in the office of the Wright County Recorder as
document no. A908908 (the "Mortgage "). If the Loan Agreement or Mortgage are found to be
invalid for whatever reason, such invalidity shall constitute an Event of Default hereunder.
All of the agreements, conditions, covenants, provisions, and stipulations contained in the
Loan Agreement, the Mortgage, or any other instrument securing this Note are hereby made a part
of this Note to the same extent and with the same force and effect as if they were fully set forth
herein. It is agreed that time is of the essence of this Note. If an Event of Default occurs under the
Loan Agreement, the Mortgage, or any other instrument securing this Note, then the Holder of this
Note may at its right and option, without notice, declare immediately due and payable the principal
balance of this Note and interest accrued thereon, together with reasonable attorneys fees and
expenses incurred by the Holder of this Note in collecting or enforcing payment hereof, whether by
lawsuit or otherwise, and all other sums due hereunder or any instrument securing this Note. The
Maker of this Note agrees that the Holder of this Note may, without notice to and without affecting
348989v1 NM MN325 -20
the liability of the Maker, accept additional or substitute security for this Note, or release any
security or any party liable for this Note or extend or renew this Note.
5. The remedies of the Holder of this Note as provided herein, and in the Loan
Agreement, the Mortgage, or any other instrument securing this Note shall be cumulative and
concurrent and may be pursued singly, successively, or together, and, at the sole discretion of the
Holder of this Note, may be exercised as often as occasion therefor shall occur; and the failure to
exercise any such right or remedy shall in no event be construed as a waiver or release thereof.
The Holder of this Note shall not be deemed, by any act of omission or commission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the
Holder and then only to the extent specifically set forth in the writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a
subsequent event. This Note may not be amended, modified, or changed except only by an
instrument in writing signed by the party against whom enforcement of any such amendment,
modifications, or change is sought.
6. If any term of this Note, or the application thereof to any person or circumstances
shall, to any extent, be invalid or unenforceable, the remainder of this Note, or the application of
such term to persons or circumstances other than those to which it is invalid or unenforceable shall
not be affected thereby, and each term of this Note shall be valid and enforceable to the fullest
extent permitted by law.
7. It is intended that this Note is made with reference to and shall be construed as a
Minnesota contract and is governed by the laws thereof. Any disputes, controversies, or claims
arising out of this Note shall be heard in the state or federal courts of Minnesota, and all parties to
this Note waive any objection to the jurisdiction of these courts, whether based on convenience or
otherwise.
8. The performance or observance of any promise or condition set forth in this Note
may be waived, amended, or modified only by a writing signed by the Maker and the Holder. No
delay in the exercise of any power, right, or remedy operates as a waiver thereof, nor shall any
single or partial exercise of any other power, right, or remedy.
9. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things
required to exist, happen, and be performed precedent to or in the issuance of this Note do exist,
have happened, and have been performed in regular and due form as required by law.
348989v1 AM MN325 -20
IN WITNESS WHEREOF, the Maker has caused this amended Note to be duly executed as
of the _ day of 2009.
WSI INDUSTRIES, INC.
Lo
Its
[Signature page for Promissory Note — WSI Industries, Inc.]
348989v1 MNI MM325 -29
I : l
6. Annual Meeting:
A. REFERENCE AND BACKGROUND:
The Economic Development Authority Bylaws establishes an annual meeting shall be
held in April of each year. Since the current Economic Development Director was not
present for a majority of 2008, staff will be requesting input as to what type of
information and format the EDA would like to see in the future for their annual meeting.
Election of Officers:
Currently Bill Demeules serves as President, Dan Frie is Vice President, and Bill Tapper
is Treasurer. The EDA should appoint a Chair, Vice Chair, and Treasurer for the 2009-
2010 time frame.
Motion to appoint as the President, as the Vice President,
and as the Treasurer.
GMEF:
The Finance Director should be commended for the amount of time and effort he has put
into gathering and balancing the GMEF. Please see attached spreadsheet.
TIF:
Attached is a spreadsheet that summarizes all TIF Districts and includes an overall HRA
activity fund column.
Rusty Fifield will be presenting the results of the TIF Analysis & Management Plan
immediately following the regular meeting.
Bylaws:
Staff would like to discuss the option of revising the current by -laws to change when the
annual meeting is held. Staff would like to solicit discussion from the EDA regarding
holding the annual meeting in January or February in order to coincide with the setting of
the yearly goals and objectives.
B. ATTACHMENTS:
1. GMEF summary
2. TIF /HRA summary
8. Report from Executive Director.
General:
1. The St. Cloud State Students are in the final phase of gathering data to complete the higher education
survey and needs assessment project. The students will present their findings to the community on April
28, 2009 at 6:OOpm. The EDA is welcome to attend.
2. The City Council adopted the Business Subsidy, GMEF, TIF, and Small Cities criteria at their
Monday, March 23, 2009 meeting. Staff will begin marketing the availability of these funds in the
Spring Business Insider.
3. The Sign Ordinance will be placed on the April 27, 2009 city Council meeting
4. Congratulations to UMC! They are a recipient of a Minnesota Job Skills Partnership Grant. The
signing ceremony is Wednesday, April 8, 2009 at 4:OOpm.
5. Zoning Code Rewrite: Staff received ten RFP's to complete the Zoning Code rewrite. Staff will be
asking a member from the EDA to volunteer to serve on a committee to help determine which firm
should be selected to complete this exciting project.
IEDC: The IEDC continues to be proactive in meeting within their individual planning groups. Planning
is underway for a summer and fall business event.
Business Retention: The Business Newsletter is under production and is anticipated to be distributed
mid April. Staff is also researching a Business Retention & Expansion program through the University
of Minnesota extension services. Upon further research, staff will bring the item forward for EDA
consideration.
Business Initiative: The City Council authorized entering into a 1 year listing agreement with Nelson
Realty. The City and Nelson Realty will continue to initiate an aggressive marketing plan.
Housing Initiatives: The City of Monticello was awarded the NSP Grant through the Minnesota
Housing Finance Agency. Staff will be required to complete training and contracts will need to be
signed prior to any distribution of funds occurs. Staff and CMHP will conduct an informational meeting
in late April to market and inform all realtors, lenders, and builders about the NSP grant opportunities.
Staff continues to work in close coordination with Wright County Community Action to achieve the best
method of informing Monticello residents about foreclosure prevention options.
Future Agenda Items: The next EDA meeting will be Wednesday, May 13, 2009.
Upcoming agenda topics (not necessary on the next agenda) will include: 1.Transformation Loan 2.
Consideration to review Development Agreement /Private Contact administrative costs and
fees /deposits.
1