EDA Agenda 07-24-1990AGENDA
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, July 24, 1990 - 7:00 A.M.
City Hall
MEMBERS: Chairperson Ron Hoglund, Vice President Barb Schvientek,
Assistant Treasurer Bob Mosford, Fran Fair, Warren
Smith, Harvey Kendall, and Al Larson.
STAFF: EDA Treasurer Rick Wolfsteller, EDA Executive
Director 011ie Koropchak and Jeff O'Neill.
1. CALL TO ORDER.
2. APPROVAL OF THE APRIL 24, 1990 EDA MINUTES.
J. CONSIDERATION TO HEAR ADJUSTED REDUCTION OF THE GMEF
ALLOCATION FOR TAPPER'S INC.
4. CONSIDERATION TO REVIEW PRELIMINARY GMEF LOAN APPLICATION
FOR EASTEY, INC.
5. OTHER BUSINESS.
6. ADJOURNMENT.
HI
MINUTES
MONTICELLOECONO:SIC DEVELOPMENT AUTHORITY
Tuesday, April 24, 1990 - 7:00 AM
City Hall
MEMBERS PRESENT: Chairperson Ron Hoglund, Warren Smith,
Harvey Kendall, Fran Fair, and Bob Mosford.
I
MEMBERS ABSENT: Barb Schwientek and Al Larson.
STAFF PRESENT: 011ie Koropchak, EDA Executive Director
STAFF ABSENT: Rick Wolfsteller, EDA Treasurer.
1.
CALL TO ORDER.
Chairperson Ron Hoglund called the EDA meeting to order
at 7:04 AM.
2.
CONSIDERATION TO APPROVE THE APRIL 3, 1990 AND APRIL 4, 1990
EDA MINUTES.
Warren Smith made a motion to approve the April 3 and April 4,
1990 EDA minutes, seconded by Harvey Kendall. With no corrections
and an unanimous vote, the minutes were declared approved as
written by Chairperson Hoglund.
3.
CONSIDERATION TO APPROVE EDA COMMISSIONERS EXPIRATION OF
'GERMS.
A motion was made by Harvey Kendall to approve the following
EDA Commissioner's expiration term date.
Fran Fair - December 31, 1990
Warren Smith - December 31, 1990
Harvey Kendall - December 31. 1991
Al Larson - December 31, 1992
Barb Schvientek - December 31, 1993
Bob Mosford - December 31, 1994
Ron Hoglund - December 31, 1995
Fran Fair seconded the motion and without further discussion
the motion passed unarimously.
4.
CONSIDERATION TO REVIEW AND/OR ADJUST CMEF LOAN APPLICATION
PROCEDURE.
Harvey Kendall inquired of the assistance received in
drafting the guidelines and forme. Koropchak responsod
that BDS. Inc., other EDA's, state agencies, and Wright
County State Bank all gave input into the development
of forme, etc. Koropchak will remove (and conditions)
from the approval loan form.
EDA Minutes - 4/24/90
Page 2
5. CONSIDERATION OF ANY FOLLOW-UP TO THE TAPPER'S INC. GMEF
LOAN.
Koropchak reported that Mr. Tom Hayes was drafting necessary
documents for the GMEF Loan to William and Barbara Tapper.
He will contact Kevin Doty or Tapper's attorney for
necessary information to complete documents for the
SBA closing. The development agreement has been
received from Holmes b Graven drafted for the HRA
in and between the Tapper's. The GMEF fund will he
in monthly payments. The current balance of the
GMEF is $100,000 which means an availability to loan
out no greater than $50,000.
6. OTHER BUSINESS.
None.
7. ADJOURNMENT.
Harvey Kendall made a motion to adjourn the EDA meeting,
seconded by Warren Smith, Chairperson Hoglund adjourned
the EDA meeting at 7:3OAM.
011ie Koropchak
EDA Secretory
®' 3. EDA AGENDA (WRITTEN FOR COUNCIL AGENDA) Council Agenda - 7/23/90
10. Consideration of adopting a resolution calling for a public
hearing on the proposed modification of the tax increment
financinq_ plan relating to Tax Increment Finance District
No. 1-9 (Tapper's, Inc.). (O.K.)
REFERENCE AND BACKGROUND:
At the July 11 HRA meeting, the Authority adopted a resolution
approving the proposed modification for the TIF plan relating
to the Tapper's project. Such modification of the TIF plan
includes an increase in the budget, increase of bond issuance,
and increase of bond indebtedness. The budget's direct
assistance to the developer was increased by $12,000 while the
Economic Development Authority's revolving loan (GMEF) was
reduced by $12,000 from the original loan of $100,000 to
$88,000. This became necessary, as the Small Business
Administration (SBA) officers would not accept the
recommendation of Bob Heck, Business Development Services,
Inc., as given to the EDA upon the GMEF loan approval. SBA
loan requirements state that any subordinated debt must have
a maturity equal to or greater than the 504 debenture. The
subordinated debt gap is the $12,000 discrepancy; therefore,
it is recommended to inject equity (TIF) to rectify the
® problem. The developers, Wright County State Bank, SBA, and
Tom Hayes agreed with the TIF increase and agreed with staff
recommendation to reduce the level of assistance from the
revolving loan fund (GMEF). This meets SBA requirements and
allows for a greater remaining balance in the City's revolving
loan fund and reduces the City's loan amount which is a third
position loan. The minimum market value placed in the
assessment agreement of the redevelopment agreement is
sufficient to cover the increased proposed budget, bond
issuance, and bond indebtedness.
As you know, the closing for this project was completed on
Friday, July 13, 1990, at Wright County State Bank. This was
able to occur because the development agreement reads that if
for some unknown reason the modification is denied, the
$12,000 gap will be transferred from another TIF district.
The HRA did approve the transfer of $12,000 if the
modification was denied.
At this time, the Council is asked to call for a public
hearing, said public hearing to be scheduled for Monday,
August 13, 1990. This will allow time for local newspaper
notice and allows 30 -day notice to the county, school
district, and hospital, which were sent notices on July 6,
1990. Now legislation rulings on TIF do not apply to this
modification according to Attorney Bob Doiko, Holmes 6 Graven.
II
Council Agenda - 7/23/90
B. ALTERNATIVE ACTIONS:
I. To adopt the resolution calling for a public hearing on
August 13, 1990, on the proposed modification of the TIF
plan relating to TIF District No. 1-9 (Tapper's Inc.).
2. To deny adoption of the resolution calling for a public
hearing on the proposed TIF plan relating to TIF District
No. 1-9 (Tapper's Inc.).
C. STAFF RECOMMENDATION:
Recommendation is to approve alternative it calling for a
public hearing on August 13, 1990. Discussion of the
modification will occur at that time.
D. SUPPORTING DATA:
Copy of resolution for adoption.
GREATER MOtTTICELLO ENTERPRISE
250 EAST BROADWAY
MONTICELLO, MINNESOTA
PRELIMINARY APPLICATION FOR LOAN
APPLICArT: Jeff EasteY Enterprises, Inc.
FIRM OR TRADE NAME: Jeff Eastev Enterprises, Inc.
BUSINESS ADDRESS: 21480 147th Avenue North, Rogers, 1414 55174
(# 6 Street) (City 6 State) (Zip Code)
TELEPHONE: BUSINESS (61P-428-11846 HCME ( )
DATE ESTABLISHED: Mav 1. 1Q86 EMPLOYER I.D. 1: 111-1557839
SOLE PROPRIETOR X CORPORATION PARTNERSHIP
MAVAGEMMIT
NAME TITLE OWNERSHIP 8
Jeff Eastev Pres. -CEO 89X
Sallv, Eastev Vice Pres. - Finance 20%
Branch Miller Pales Manager
Charles W. Rogers Vice Pres. - Develooement- Leval
PROJECT LOCATION: 1401 Fallon Avenue, Monticello. PIN
NEW BUSINESS X EXISTING BUSINESS
TOTAL PROJECT COST ESTIMATE: $ 450.000.00
PROPOSED USES: REQUEST:
LAND 5
EXISTING BUILDING
CONSTRUCTION
MACHINERY CAPITAL 50.OQQ.00
WORKING CAPITAL $200.000.00
OTHER 1200000.00
TOTAL USES 58450.000.00
PROPOSED BEGINNING DATE: Ortohor 1
ESTIMATED COMPLETION DATE:
TITLE TO
1000
AMOUNT OF LOAN $450.000.00
MATURITY 6 TERMS
REQUESTED
APPLICANT'S
EQUITY
LOAN PURPOSE FL nnnlon-
RelOCatiOn
PROJECT ASSETS TO BE HELD BY: OPERATING ENTITY
ALTER EGO
PARTICIPATING LENDER:
(Name)
(Addreast
�h. rlp,j 14. Rnaora
(Contact Person)
�Q?5
(Telephone 1
PRESENT ! OF EMPLOYEES:
PROJECTED
/ OF EMPLOYEES r -)0
ADDITIONAL PROJECT INFORMATION:T111a no%a alto I4 nn
nrnnnalnn of nur
nppronn(nnntr cm po1rrnn�t inn
APPLICAm",hIGtfA'TITRE:
/TI)))) //I)n hnn—' In ttmn to —1—
* r t•
4 / 1 � i/�iq
nntl— nA non Linn
DATE SIGNED: 71iJ 9�/
• Includes Parent
f11JJ
Pant - Rogori7mN