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EDA Minutes 04-09-2008 (Workshop Meeting)WORKSHOP MINUTES CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Wednesday, April 9th, 2008 1. Call to Order. Chairman Demeules called the meeting to order and noted a quorum of the Authority present. 2. Roll Call. Commissioners Dan Frie, Bill Tapper, Bill Fair, Bob Viering and Wayne Mayer present upon roll call: Commissioners Herbst absent. 3. Add On Item — GMEF Loan No. 021 Status Update Koropchak reported that one of the GMEF loans would be coming due on May 1St. She had received a request to extend the balloon payment for that loan. This request has to be extended by a majority of the Commissioners and requires lender support to be provided by applicant. Koropchak explained that there could be a potential conflict of interest with a Commissioner, as that Commissioner is involved with the project for which the loan was issued. She noted that this conflict arose partially due to the merger of the EDA and HRA. She explained that with the HRA, a declaration can be signed and the Commissioner could exclude themselves from the discussion. However, the EDA does not have that provision and the Commissioner would need to resign for the item to be considered. She noted that another City has brought forward to the legislature the idea of the HRA provision also applying to the EDA to the legislature for consideration. The question becomes will that legislation be passed and signed by Governor by May 1St, which is when the balloon payment is due. Koropchak discussed options available to the EDA regarding this issue, which included delaying action to the May meeting in relationship to the possible legislative change, or calling for a special meeting on 30th of April. Koropchak stated that she had talked with the EDA attorney. She stated that in this situation, he lead her to believe it was acceptable to delay the action, because the decision of the legislature was relatively soon. MOTION BY COMMISSIONER VIERING TO DELAY ACTION ON GMEF LOAN No. 021 AS RELATED TO BALLOON PAYMENT. MOTION SECONDED BY FRIE. MOTION CARRIED, 4 — 0 - 1, WITH COMMISSIONER TAPPER ABSTAINING. 4. New Business. a. Consideration to review and complete revisions to the City of Monticello EDA Business Subsidy Criteria. Koropchak stated that the revised criteria include should be representative of all of the changes that were made to the document at the previous meeting. Tapper stated that he had understood that under clause 5.03C that the decision was to delete all references to the current federal minimum wage law and just index to the law. Fair confirmed that statement indicating that the clause was to reference formulas only, not dates or amounts. Viering stated that the wages could be provided as an attachment to this document. Fair noted that the language needs to be clear that the wages are at the time the application is made, or when agreement is entered into. Demeules noted that for as long as the TIF is in place, those wages need to be adhered to. These clauses should be consistent. Demeules inquired if annual reports are required by TIF, as well as GMEF. Koropchak confirmed that is required for both and is noted in the documentation. Koropchak referred to the language stating that the applicant will execute and submit the non-refundable fee per approved fee schedule. She stated that whatever the Authority decides in terms of fees and deposits, the language should be consistent. Frie stated that if the funds aren't used, it should be returned. Tapper agreed that in that case, it should be called a deposit. Finance Director Tom Kelly recommended that the statement should simply read "deposit per approved fee schedule". The Commissioners reviewed the guidelines for GMEF. Tapper referenced the confusion caused by including both the GMEF and TIF regulations, guidelines and criteria as one document. He suggested that it may serve better as two documents. Fair asked what the criteria is for waiving loan fees. Demeules stated that in the past EDA has always only required the minimum. Fair asked why not just make it $200 in that case. Koropchak stated that there may be some unusual circumstances where the EDA would like to charge more. This fee is just an administrative item. Fair recommended leaving it as it is. Fair asked if Demeules thought there was anything glaring that should be changed. Demeules stated that the EDA had gone through it each year. He noted that some of the items cannot be changed as they are federally mandated. Viering noted that the language in these guidelines referring to interest rate should also read "as published in the Wall Street Journal." Fair asked if it is clear when the prime rate is implemented. Koropchak confirmed it would be on the date the EDA approves the loan. Koropchak stated that when the changes to the documents are done, she will send them to the attorney for review, as they had drafted the originals. Koropchak noted that when a loan is approved by the EDA, it is sent to the Council. The Council criteria is written such that they ratify the loan as approved by the EDA unless they find that EDA hasn't followed the guidelines. The guidelines require ratification within 21 days. Mayer noted that there is only one time each year that the Council wouldn't hold meetings within 21 days, which is at the end of year. Koropchak explained that the original revolving loan fund was established by a letter of credit of $200,000 from the City liquor store fund. In 2007, the EDA had made a motion that the last remaining $100,000 replayment from the liquor store loan be applied toward debt service for 2008. As of now, there isn't any debt for this program. Fair noted that as there is no longer a revolving loan from the City, that clause may not need to remain in there. Viering agreed. Tapper asked what the implication is of leaving it in. He questioned whether there could be a scenario where it would be needed again. Fair stated it was a one- time fund. Mayer commented that if the issue comes up again, the EDA could just address it again. Koropchak stated that the revolving loan fund and business subsidy guidelines have to go to the Council prior to any amendment. Fair asked who receives the quarterly and annual report. Koropchak stated that the EDA reviews the documents and then they go on to the City Council. b. Consideration to review and authorize Kennedy & Graven to review proposed amendments to the Preliminary Development Agreements. Koropchak stated that there are two preliminary development agreements used by the EDA; both apply to TIF. They were developed by Kennedy & Graven. The first is used for redevelopment, housing and economic districts. The other is used for the City's industrial park. It was noted by the commissioners that some of the pages were missing from the documents. Koropchak stated the item could be tabled in that case. Fair asked if the item could be placed on the next regular agenda. Koropchak confirmed. Koropchak stated that the main item of concern related to the costs referred to in the document in terms of fees and deposits. Fair stated that the EDA needs to make sure developer understands that they are paying a deposit. Frie asked if Kennedy & Graven use these in other communities. Koropchak stated that it may depend on the project. MOTION BY COMMISSIONER FAIR TO TABLE ACTION ON PROPOSED AMENDMENTS TO THE PRELIMINARY DEVELOPMENT AGREEMENTS, PENDING REVIEW OF FULL DOCUMENTS, TO THE REGULAR MAY MEETING OF THE EDA. MOTION SECONDED BY VIERING. Frie stated that he doesn't see that the EDA should make a lot of changes to what the attorney has drafted other than the deposit language. MOTION CARRIED, 6-0. c. Consideration to establish EDA objectives, strategies, and tasks (Action Plan) supporting the Economic Development Chapter of the Comp Plan. Koropchak referenced language from the draft comprehensive plan, which cites attracting jobs and expanding tax base as the primary goals for economic development in Monticello. She noted that the comprehensive plan has not yet been adopted. She indicated that the comp plan calls for the comprehensive plan and its strategies to be updated annually. The Economic Development chapter identifies land use as "Places to Work'. Koropchak explained that she took four developed strategies from the comprehensive plan for the EDA to review. Koropchak explained that the EDA, and the comprehensive plan, have not yet addressed new goals and objectives for the downtown. Koropchak stated that the plan identifies Monticello as a regional commerce center. Tapper noted that Monticello's advantage is being an independent City, with residential, commercial and industrial components present. Tapper also commented on Monticello's natural opportunities, which are missed by not capitalizing on the river. Fair noted that existing development prohibits that capitalization. Tapper referenced that a function of the EDA is the downtown development and perhaps an objective should be to actively buy up land adjacent to the river and convert it to other uses. Fair stated that he understands that objective, but practical experience has been that those on the river don't want public access. Tapper stated that the 1997 plan for downtown is unrealistic. He commented that if you are going to have a downtown, you need an anchor. Demeules noted that traffic patterns have changed and this also greatly impact the downtown. Tapper stated that the City should abandon Highway 75 as a major thoroughfare as 7th Street is the natural thoroughfare. Tapper noted redevelopment should include housing with amenities that attach to the river. He commented that part of the restriction under the current plan is that you can't change the blocks and most anchors don't want to be up against the street. Fair noted that property owners don't necessarily agree with this plan. Tapper stated that eventually those businesses will cease. Frie noted that it has taken decades for that to happen. Fair also noted that there are absentee landlords and financial limitations to redevelopment. Without condemnation as an option, the only way to acquire property is to buy it, and these property owners are not willing sellers. Fair noted that it will also take political direction and support. Koropchak stated that this is good discussion for the downtown. However, this exercise is intended to develop an action plan for Places to Work and how to attract jobs and expand the tax base. She stated that her recommendation is to start identifying desired jobs and wages and appropriate locations. Koropchak explained that there are also non- industrial businesses that provide support to industry, including lodging, office, etc. Ultimately, the goal is allowing more people to live and work in Monticello, supporting other comp plan goals such as move -up housing. Tapper suggested that what Monticello is actually striving for is a good mix of employment, ranging from the executive level, down to those who do the work. There is then a need to plan for the facilities that meet the needs of all of those people. He indicated that the group should think about the next wave and who might be the next company with an idea that will revolutionize. Fair agreed, noting the support of venture capital firms who make these investments. Demeules noted Chaska has incubator and suggested reviewing strategies. Koropchak noted that there are so many different facets of bioscience, the City will need to determine what to concentrate on. Koropchak referenced that strategies may be different for the different segments of the comp plan, but all facets of the City need to be on the same page in identifying what we are trying to attract. Tapper stated that he is concerned about using the comp plan structure because of duplication in strategies. He stated that he would like to boil them down to a more succinct level and then assign tasks. He also stated that he is concerned about the designations of Places to Work and Places to Shop. He noted that this seems to imply that Places to Shop are not Places to Work and creates a mentality that there is not a compatibility between the two. Koropchak stated that it is her goal to have the EDA write an action plan based on comp plan. However, if there are concerns with the comp plan in terms of designation, those should be addressed as part of the public hearing. The group ended discussion on this topic due to time constraints. d. Other. NONE. 5. Adj ournment. MOTION BY COMMISSIONER FAIR TO ADJOURN. MOTION SECONDED BY COMMISSIONER VIERING. MOTION CARRIED, 5-0. President