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10-18-2007 EDA MINMEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, OCTOBER 8, 2007 Members Present: President Gongoll, Commissioners Dwyer, Farber, Klinzing, Motin, Tveite, and Zerwas Members Absent: None Staff Present: City Administrator Lori Johnson, Community Development Director Scott Clark, Director of Economic Development Catherine Mehelich, Assistant Director of Economic Development Heidi Steinmetz, Finance Director Tim Simon, Planning Manager Jeremy Barnhart, and Recording Secretary Jessica Miller Call Mee ~ € To Order Pursuant to due call and notice thereof, the meeting of the Economic Development Authority was called to order at 5:30 p.m. by President Gongoll. 2. n id r Agenda MOVED BY COMMISSIONER TVEITE AND SECONDED BY COMMISSIONER MOTIN TO APPROVE THE OCTOBER 8, 2007 EDA AGENDA. MOTION CARRIED 7-0. 3. Consider Consent A ~~~ MOVED BY COMMISSIONER DWYER AND SECONDED BY COMMISSIONER FARBER TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. CONSIDER SEPTEMBER 10, 2007 REGULAR MEETING MINUTES 3.2. CHECK REGISTERS 3.3. BALANCE SHEET 3.4. REVENUE/EXPENDITURE REPORT MOTION CARRIED 7-0. 4. n Mik No one appeared for open mike. 5. YMCA Bond Pre-Sal Repor R vi w Finance Director Tim Simon presented his staff report. MOVED BY COMMISSIONER FARBER AND SECONDED BY COMMISSIONER ZERWAS TO CALL A SPECIAL MEETING OF THE ECONOMIC DEVELOPMENT AUTHORITY FOR OCTOBER 1S, 2007, AT 6:30 Economic Development Authority Minutes October 8, 2007 Page 2 P.M. TO AWARD THE SALE OF $10,000,000 GENERAL OBLIGATION BONDS, SERIES 2007. MOTION CARRIED 7-0. 6. Director of Economic Development Catherine Mehelich presented her staff report. MOVED BY COMMISSIONER TVEITE AND SECONDED BY COMMISSIONER KLINZING TO ADOPT RESOLUTION 07-OG APPROVING THE DECERTIFICATION OP TAX INCREMENT FINANCING DISTRICT NO. 17 WITHIN DEVELOPMENT DISTRICT NO. 1 IN THE CITY OF ELK RIVER. MOTION CARRIED 7-0. MOVED BY COMMISSIONER TVEITE AND SECONDED BY COMMISSIONER MOTIN TO ADOPT RESOLUTION 07-07 APPROVING THE DECERTIFICATION OF TAX INCREMENT FINANCING DISTRICT N0.20 WITHIN DEVELOPMENT DISTRICT NO. 1 IN THE CITY OF ELK RIVER. MOTION CARRIED 7-0. lpdate on at wav Bu ins enr r Planning Manager Jeremy Barnhart presented his staff report. Mr. Barnhart stated that staff continues to work with the adjacent property owners to agree on the needs for the area. 1-Ie noted that both of the major property owners ace working on developing their own plans and are not ready to offer more specific information at this time. Mr. Barnhart indicated that staff has learned that there is a possibility of one or two major land uses that wish to locate within the Gateway property. He stated that staff is taking a flexible approach to the layout and design of the Gateway property because the needs in terms of size, access, visibility are not known at this time. $ C~.pt Revie~~ Ent ~ inment (' t Director of Economic Development Catherine Mehelich presented her staff report. Richardt Fleischmann, Energy Entertainment Enterprises, LLC - presented a PowerPoint oudining the details of the proposal For Energy Entertainment City Hotel and Conference Center. Mr. Fleischmann explained that in an attempt to ensure a successful venture for all affected, Energy Entertainment Enterprises, LLC is requesting certain concessions and considerations to assist them in initiating their venture as follows: • Grant of 14 acres of land and waiving of associated assessments and fees • Site engineering and preparation assistance to include wetland mitigation, tree removal, and addition ox removal of any required fill • Three year tax abatement on completed project • Negotiations on SAC, WAC, and other fees • Waiving of park dedication fees Economic Development Authority Minutes Page 3 Ocrober 8, 2007 • Discounts on certain fee schedules such as plumbing and electrical • Curb and gutter, walking paths, and area illumination • Applicable rebates, financing, or incentive programs Ms. Mehelich stated that staff is looking for EDA feedback and direction on how to proceed. Commissioner Klinzing stated that this is an exciting project. She indicated that normally, the tax rebate financing would be inclusive of all the financial considerations and questioned why that approach was not taken. Mc Fleischmann explained that Energy Entertainment Enterprises, LLC did not wish to be presumptious but would be interested in pursuing that option. Commissioner Dwyer questioned if the estimated constmcton costs were known. Mr. Fleischmann indicated construction is estimated at upwards of $20 million. David Sorenson, Energy Entertainment Enterprises, LLC -explained that the Gateway site was chosen due to its close proximity to the Northstar Rail and the park and ride. He noted that he is a long-time resident of Elk River. Commissioner Motin stated that the project sounds intriguing. He questioned the estimates on the proposed incentives. Mc Clark indicated that the incentive costs are difficult to gauge but he would estimate between $2 - $3 million. Commissioner Motin stated that he would like to see an extension of the abatement period. Cor~unissioner Tveite indicated that he also finds the project intriguing but expressed concerns over the request for a letter of intent prior to completion of the architecmral work. Mr. Sorenson explained that the letter of intent would be necessary to secure funding for the architectural work. Discussion took place on the timing of the letter of intent and the land grant. It was the consensus of the EDA that they were in favor of the project but that the letter of intent would need to be structured so that if approved, financial considerations would be contingent upon progress of the project. Mr. Clark indicated that staff will come back at the November EDA meeting with the following information: • Full analysis of the city's overall costs • Analysis of the incentive request • Initial findings on the but for analysis • Staff wdl work with the EDA attorney and Energy Entertainment Enterprises, LLC to draft a letter of intent Commissioner Motin indicated that he would like staff to compile a list of pros and cons for this project. Commissioner Zetwas stated that he would also like staff to project how this project would affect the remaining Gateway property. 9. Update on U S Post Offi e Prop Community Development Director Scott Clark presented his staff report. Mr. Clark stated that the U.S. Post Office will be selling their Line Avenue property through a sealed bid process. Mr. Clark explained that staff recognizes that the subject property is a very attractive Economic Development Authority Minutes October 8, 2007 Page 4 commercial piece and the city may wish to guide the ultimate development of this parcel. Mr. Clark stated that discussions should be held regarding whether or not the EDA is desirous of entering into the bidding process. 10. Co~ept Review -Fine Dining Prosper; Assistant Director of Economic Development Heidi Steinmetz presented her staff report. Abed Lawabni, Umbria La Cucina Italiana -presented his concept to bring a fine dining Italian restaurant to Elk Rivet He stated that their preferred site is located on Lot 1 Block 1 of Mulvaney Point located at the corner of Line Avenue and County Road 12 (the U.S. Post Office property). Ms. Steinmetz indicated that staff is requesting that the EDA provide staff with direction. She questioned if the EDA wishes to enter into the bidding process in an attempt to purchase the Post Office property. President Gongoll questioned what uses aze allowed on this site. Mr. Clazk stated that the site would allow a broad array of uses including office, auto repair, and manufacturing. He stated that he believes a restaurant would be allowed under a Conditional Use Permit but noted that the area could be rezoned if necessary. Cortunissioner Tveite questioned if the company would be seeking assistance from the city in the form of tax abatement or something similar. Mr. Lawabni stated that they ace in the early stages of planning and have not thought about tax abatement or SAC and WAC assistance yet. He explained that the location is what is important to them right now. President Gongoll also questioned if the EDA can legally enter into the bidding process. Mr. Clazk explained that he consulted with the attorney and state law allows an EDA to enter into closed negotiations on property. It was the consensus of the EDA to enter into the bidding process in an attempt to purchase the Post Office property. Ms. Steinmetz then questioned if the EDA is interested in entering into an agreement or submitting a letter of intent to Mr. Lawabni stating that the EDA would ultimately sell the property to Mr. Lawabni. President Gongoll indicated that he would like parameters included in the letter for both parties to ensure that if the property is sold to Mr. Lawabni's company the project is followed through with as proposed. It was the consensus of the EDA that they were interested in drafting a letter of intent to be brought back at the November EDA meeting. 11. C nsid .r Proposal from Recrauranr Broke s of Minn ota Assistant Director of Economic Development Heidi Steinmetz presented her staff report, including the proposal from Restaurant Brokers of Minnesota. It was the consensus of the EDA that winter is not the ideal time to enter into a three month agreement with a restaurant broker and that the proposal should be revisited early next year. 12. Aijjoumment Economic Development Authority Minutes October 8, 2007 Page 5 There being no other business, President Gongoll adjoumed the meeting of the Elk River Economic Development Authority adjoumed at G:55 p.m. Minutes prepared by Jessica Miller. ~.~ // 1 Tina A1lazd City Clerk