07-08-2002 EDA MINMEETING OF THE ELK RIVER
ECONOMIC DEVELOPMENT AUTHORITY
HELD AT THE ELK RIVER CITY HALL
MONDAY, JULY 8, 2002
Members Present: Vice President Dwyer, Commissioners Koenig, Klinzing, ICuester,
Tveite and Moon
Members Absent: President Gongoll
Staff Present: Director of Economic Development Catherine Mehelich, Economic
Development Assistant Heidi Hall, City Administrator Pat Klaexs,
Finance Director Loxi Johnson, and City Clerk Sandia Peine
1. Call Meeting To Order
Pursuant to due call and notice thereof, the meeting of the Economic Development
Authority was called to order at 6:00 p.m. by Vice President Dwyer.
2.
3
Consider 7/8/02 EDA Agenda
COMMISSIONER TVEITE MOVED TO APPROVE THE JULY 8, 2002,
EDA AGENDA. COMMISSIONER MOTIN SECONDED THE MOTION.
THE MOTION CARRIED 6-0.
Consider Consent Agenda
COMMISSIONER KLINZING MOVED TO APPROVE THE CONSENT
AGENDA AS FOLLOWS:
3.1. June 10, 2002 EDA Minutes
3.2. Check Register
3.3. Revenue Expenditure Report
3.4. Balance Sheet
COMMISSIONER MOTIN SECONDED THE MOTION. THE MOTION
CARRIED 6-0.
4. Open Mike
No one appeared fox open mike.
Economic Development Authority Minutes Page 2
July 8, 2002
5. Consider Participation in Minnesota Community C2pitil Fund (MCCF)
Director of Economic Development Catherine Mehelich reviewed the staff report.
She indicated that staff has evaluated the Minnesota Community Capital Fund
(1~ICCF) as requested by the Economic Development Authoxiry. She explained that
the MCCF is a loan fund that the City may access for development activities. She
stated that the City's commitment would include a membership deposit, which
would allow the City to borrow up to 10 tunes of the deposit amount. Catherine
recommended that the City contribute $50,000 far a Class B membership. She
suggested that the $SQ,000 come from the City's Micro Loan Fund.
Vice President Dwyer indicated that the City is making a three-year commitment. He
noted that the City does not receive interest revenue off of the investments. Vice
President Dwyer further noted that this is another potential tool fox projects;
however, it could require more funds than the city is putting in.
Commission Tveite stated that this was a low cost way to create another financial
tool fox development.
COMMISSIONER TVEITE MOVED TO RECOMMEND TO THE CITY
COUNCIL THAT THE CITY PARTICIPATE IN THE MINNESOTA
COMMUNITY CAPITAL FUND BY DEPOSITING $50,000 FROM THE
MICRO LOAN FUND. COMMISSIONER MOTIN SECONDED THE
MOTION. THE MOTION CARRIED 6-0.
6. Consider Amendment to the City's Tax Rebate Financing Polio
Catherine Mehelich reviewed the amended Tax Rebate Financing Policy. She
reviewed the five major changes to the policy as directed by the joint Council and
EDA discussion June 24, 2002.
1. Speculative office development is not eligible for TRF assistance. Speculative
office defined as projects having less than 50 percent of the available space
preleased.
2. Office facilities remain eligible fox TRF, but with minimum requirements.
3. Applications should be reviewed by City's financial advisors.
4. Reduction of requirement for minunum cash equity investment from 20
percent to 10 percent.
5. Those receiving TRF assistance axe subject to the provisions and
requirements of the City's subsidy criteria and the 1Vlinnesota Business
Subsidy Law.
Economic Development Authority Minutes
July 8, 2002
Page 3
Following discussion of the proposed amendments to the policy, the EDA requested
further amendments to the policy as Eollows.
• A six-month review of occupancy goals on office developments with
prelease agreements.
• Projects requesting less than $25,000 would not need to be reviewed by the
City's financial advisor. Project applications require an itemized construction
statement.
• Minimum equity uivestment would be 10 percent when applied with an
SBA504 project or 20 percent when not using SBA504 financing.
• The job retention issue should be made clearer.
Lynn Caswell - 584 Dodge Avenue - Mr. Caswell spoke about the requirement of
50% occupancy of the buIlding. He indicated that at that point the project does not
need TRF financing. He indicated that eliminating speculative office space prohibits
expansion of existing office space. Catherine responded to Lynn Caswell's concerns.
f ohn Weicht - blr. Weicht spoke about the proposed policy. He indicated that he
does not agree with the minimum 20 percent cash equity requirement.
Gary Santwire - Mx. Santwixe indicated that he concurs with the proposed policy.
He stated that speculative office space should be market driven.
COMMISSIONER KLINZING MOVED TO TABLE THE TAX REBATE
FINANCE POLICY TO ALLOW STAFF TO MAKE THE
RECOMMENDED AMENDMENTS. COMMISSIONER TVEITE
SECONDED THE MOTION. THE MOTION CARRIED G-0.
Consider Ordinance Amendment to Business Paxk District
Catherine Mehelich indicated that the City Council directed staff to prepare an
ordinance amendment allowing athletic and training facilities as a conditional use
permit in the Business Paxk District As the amendment affects the goals of the
Business Paxk District, Catherine stated that staff is requesting the EDA review the
ordinance language.
Coxrunissionex b4otin questioned if the City can set a termination date fox the use
with the ordinance.
COMMISSIONER TVEITE MOVED TO SUPPORT THE REQUEST OF
THE PROPOSED ORDINANCE AMENDMENT. COUNCILMEMBER
KUESTER SECONDED THE MOTION. THE MOTION CARRIED 6-0.
Economic Development Authority Minutes ~ Page 4
July 8, 2002
8. Consider Resolution Providing for the S11e of Public Project Kevenue Bonds Series
2002A
Finance Director Lori Johnson requested the ED A to consider a resolution to set the
sale for the lease revenue bonds in the amount of $9,70Q,000 ro finance the
construction of the public safety facility and the Elk River Municipal Utilities
building. She noted that the public safety portion of the bond is ~$B,000,OOQ which
will be repaid with property taxes, and the Elk River Municipal Utilities addition is
1,700,000, which will be repaid with utility revenues.
Mark Ruff from Ehlers and Associates presented some information regarding the
bond sale and new financing techniques.
COMMISSIONER MOTIN MOVED TO ADOPT RESOLUTION 02-03
PROVIDING FOR THE SALE OF PUBLIC PROJECT REVENUE
BONDS, SERIES 2002A. COMMISSIONER KOENIG SECONDED THE
MOTION. THE MOTION CARRIED 6-0.
Other Business
Catherine indicated that the City has received an award from the Economic
Development Association of Minnesota fox the City's local advertising campaign.
Catherine noted the City of Cottage Grove was also nominated.
10. Adjournment
There being no other business, COMMISSIONER KOENIG MOVED TO
ADJOURN THE MEETING. COMMISSIONER KUESTER SECONDED
THE MOTION. THE MOTION CARRIED 6-0.
The meeting of the Elk River Economic Development Authority adjourned at 7:25
p.m.
Sandia Peine
City Clerk