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08-19-2002 EDA MIN - SPECIALSPECIAL MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, AUGUST 19, 2002 Members Present: President Gongoll, Commissioners Koenig, Dwyer (5:15 p.m.), Klinzing, Kuester, Tveite and Motin Members Absent: None Staff Present: Director of Economic Development Catherine Mehelich, Economic Development Assistant Heidi Hall, City Administrator Pat I4aers, and Recording Secretan~ Tina Allard 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 President Gongoll. 2. Consider 08/19/02 Agenda COMMISSIONER TVEITE MOVED TO APPROVE THE AUGUST 19, 2002, EDA AGENDA. COMMISSIONER KOENIG SECONDED THE MOTION. THE MOTION CARRIED 6-0. 3. 2002-2004 Strategic Industrial Marketing Plan Economic Development Assistant Heidi Hall stated that Duckor and Associates was hired to assess and update the Strategic Industrial Marketing Plan. She introduced Anita Duckor. Ms. Duckor presented the EDA with an assessment of the 2002-2002 Activities Plan. She suggested strategies and presented a Key Action Plan that should be implemented through 2004. Ms. Duckor stated that the Business Park Design Standards Ordinance should be more fle:dble to be competitive in attracting clients [o Elk River. She stated that companies (like SoftPac) might have a building design unique to their type of business but would not be allowed into Elk River today because of the Business Park Design Standazds Ordinance. Ms. Duckor recommended that a dedicated city-owned industrial park be established with an incentive to potential light industrial clients to help keep land costs low. Pat Dwyer arrived at 5:15 p.m. President Gongoll stated that overall he liked the Plan but indicated that some Key Actions may not be feasible. He stated that the city should present a more "Open for Business Approach." He stated that the Business Park Design Standards Ordinance is an issue that needs to be reconsidered. He also stated that he liked the idea of a city-owned dedicated industrial park to offer potential clients but that it may not be financially feasible. Economic Development Authority Minutes August 19, 2002 Page 2 Commissioner Dwyer slated [hat the city should establish a "Champion" to help promote key accounts and there should be a monthly status report of the key accounts. Commissioner Motin stated that it makes• sense for the city to have dedicated land for Industrial Paxk. He is concerned about changing the design standards fox Business Park property. He stated that it may be okay for some light industrial companies to be in the Business Park but he is concerned about the whole area turning into all light industrial type buildings'. He stated that maybe a portion of the Busines's Park could be designated for industrial purposes. COMMISSIONER DWYER MOVED TO ACCEPT THE STRATEGIC INDUSTRIAL MARKETING PLAN 2002-2002 ASSESSMENT AND 2002-2004 ACTION PLAN. COMMISSIONER TVEITE SECONDED THE MOTION. THE MOTION CARRIED 7-0. 4. Consider for Adoption the City of Elk River Tas Rebate Financing Policy as Amended Director of Economic Development Catherine Mehelich reviewed amendments to the city's Tas Rebate Financing Policy. COMMISSIONER MOTIN MOVED TO ADOPT THE TAX REBATE FINANCING POLICY WITH THE FOLLOWING CHANGES: ANY DEVELOPER RECEIVING TRF ASSISTANCE SHALL PROVIDE A MINIMUM OF TWENTY PERCENT (20%) CASH EQUITY INVESTMENT IN THE PROJECT. PROJECTS UTILIZING THE SBA504 PROGRAM WILL BE REQUIRED TO PROVIDE A MINIMUM OFTEN PERCENT (10%) CASH EQUITY INVESTMENT. (SECTION IV.B.) • TRF PROPOSALS SHALL NOT BE USED TO SUPPORT SPECULATIVE OFFICE PROJECTS. SPECULATIVE PROJECTS ARE DEFINED AS THOSE PROJECTS WHICH HAVE PRE-LEASING AGREEMENTS OR LETTERS OF INTENT FOR LESS THAN 50% OF THE AVAILABLE SPACE. IN ADDITION, LEASIBLE OFFICE PROJECTS MUST MEET THE FOLLOWING GUIDELINES: • EVIDENCE OF THE 50% LEASE COMMITMENT MUST BE REPORTED TO THE DIRECTOR OF ECONOMIC DEVELOPMENT SIX MONTHS FOLLOWING AN ISSUED CERTIFICATE OF OCCUPANCY. • 50% OF THE JOBS WITHIN THE LEASIBLE OFFICE BUILDING SPACE MUST BE CONSIDERED "NEW" JOBS TO THE CITY OF ELK RIVER, MEANING JOBS NOT LOCATED IN THE CITY AT ANY TIME PRIOR TO OCCUPYING SPACE IN THE PROJECT. Economic Development Authority Minutes August 19, 2002 Page 3 • BUSINESS RETENTION JOBS WILL BE CONSIDERED ON AONE-FOR-ONE MATCH TO JOB CREATION ONLY IN CASES WHERE JOB LOSS IS SPECIFIC AND DEMONSTRABLE IN ACCORDANCE WITH THE MN BUSINESS SUBSIDY LAW. EVIDENCE MAY INCLUDE DOCUMENTATION THAT THE COMPANY WILL HAVE TO CLOSE INVOLUNTARILY, OR THE COMPANY HAS RECEIVED AN ATTRACTIVE OFFER TO MOVE TO ANOTHER STATE OR COMMUNITY. (SECTION IV.J.) OFFICE FACILITIES REMAIN ELIGIBLE FOR TRF BUT WITH THE MINIMUM REQUIREMENTS OF 25,000 SQUARE FEET NEW CONSTRUCTION AND RESULT IN A MINIMUM MARKET VALUE OF $1,000,000 UPON PROJECT COMPLETION. (SECTION V.B.) THE DEVELOPER SHALL DEMONSTRATE THAT THE PROJECT IS NOT FINANCIALLY FEASIBLE BUT-FORTHE USE OF TRF. EVALUATION OF THE PROJECT'S FINANCIAL FEASIBILITY WITHOUT TRF SHALL BE PROVIDED BY THE CITY'S FINANCIAL ADVISOR ON REQUESTS OF OVER $25,000 TOTAL. THE COST OF FINANCIAL REVIEW AND LEGAL SERVICES WILL BE DEDUCTED FROM THE $5,000 APPLICATION FEE. (SECTION V.C. & SECTION VII.A.1.) • AN ITEMIZED PROJECT CONSTRUCTION STATEMENT IS AMONG THE LIST OF REQUIRED APPLICATION DOCUMENTATION. (SECTION VIII.E.J.) COMMISSIONER KOENIG SECONDED THE MOTION. THE MOTION CARRIED 7-0. 5. Consider City of Elk River Business Subsidy Policy This item has been postponed until the September 9, 2002 EDA meeting. 6. Consider Cvmbet Corporltion Expansion Siting Proposal Director of Economic Development Catherine Mehelich stated that a preliminary siting proposal has been submitted by staff to Equity Management to provide space for Cymbet's manufacturing facility and fox the EDA's Business Incubator Program. She gave some background information of Cymbet Corporation and discussed the expansion siting proposal and the business incubator concept. She stated that the EDA would not be committed to paying rent and would not have to be involved with any stock participation. Ms. Mehelich stated that the annual expense in the new incubator building would be a retainer fee to Genesis Business Center for providing technical assistance. Mark Wallate, Director of Manufacturing Development for Cvmbet Corporation - Discussed the development and technical path of Cymbet Corporation. Economic Development Authority Minutes August 19, 2002 Page 4 COMMISSIONER DWYER MOVED TO APPROVE THE PROPOSED FINANCE CONCEPT FOR THE CYMBET CORPORATION EXPANSION AND DEVELOPMENT OF SPACE FOR THE EDA'S BUSINESS INCUBATOR PROGRAM. COMMISSIONER MOTIN SECONDED THE MOTION. THE MOTION CARRIED 7-0 7.1. Consider 2003 Budeet Director of Economic Development Catherine Mehelich provided a budget summary Eor the EDA and the Business Incubator. COMMISSIONER TVEITE MOVED TO APPROVE THE 2003 BUDGET FOR THE EDA. COMMISSIONER MOTIN SECONDED THE MOTION. THE MOTION CARRIED 7-0. Commissioner Dwyer stated that there should be accountability of the expense for professional services by Genesis Business Centers (GBC). He stated that the expense should be based on the number of hours worked in assisting the city. Commissioner Gongoll stated that GBC has provided staff with numerous updates and works with the Incubator Advisory Committee. He stated that GBC has brought a substantial number of contacts to the city. Commissioner Kuester suggested that GBC provide a report to justify their expenses. Commissioner Tveite suggested the GBC present an annual report. Ms. Mehelich suggested that the report be presented twice a year due to the number of changes and volume of information collected. COMMISSIONER TVEITE MOVE TO ADOPT THE 2003 BUDGET FOR THE BUSINESS INCUBATOR PROGRAM CONTINGENT UPON GENESIS BUSINESS CENTER PROVIDING A RESULTS REPORT EVERY SIX MONTHS. COMMISSIONER KUESTER SECONDED THE MOTION. THE MOTION CARRIED 6-1. Commissioner Dwyer opposed. 7.2. Consider Resolution Regarding EDA Levy COMMISSIONER KOENIG MOVED TO ADOPT RESOLUTION 02-06 ESTABLISHING THE TAX LEVY FOR THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF ELK RIVER, MINNESOTA. COMMISSIONER MOTIN SECONDED THE MOTION. THE MOTION CARRIED 7-0. S. Other Business There was no other business. Adjournment There being no other business, President Gongoll adjourned the meeting of the Elk River Economic Development Authority at 6:25 p.m. Economic Development Authority Minutes August 19, 2002 Tina Allard Recording Secretary Page 5