09-09-2002 EDA MINMEETING OF THE ELK RIVER
ECONOMIC DEVELOPMENT AUTHORITY
HELD AT THE ELK RIVER CITY HALL
MONDAY, SEPTEMBER 9, 2002
Members Present: President Gongoll, Commissioners Koenig, Dwyer, I{linzing,
I{uester, Tveite and Motin
Members Absent: None
Staff Present: Director of Economic Development Catherine Mehelich, Economic
Development Assistant Heidi Hall, Ciry, Administrator Pat Klaers,
and Ciry Clerk Sandra 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 President Gongoll.
2. Consider 9/9/02 EDA Agenda
COMMISSIONER KUESTER MOVED TO APPROVE THE
SEPTEMBER 9, 2002 EDA AGENDA. COMMISSIONER TVEITE
SECONDED THE MOTION. THE MOTION CARRIED 7-0.
3. Consent Agenda
Commissioner blotin indicated that in regard to the second paragraph from the
bottom of page 2, of the August 19, 2002 minutes, he thought it was the intent of
the EDA to reflect that 50% of the space must be actually occupied rather than just
showing a commitment to lease.
Commissioner Dwyer requested the following amendment to the August 19, 2002,
EDA 1Minutes: Page 1, Item #1 - "The meeting was called to order at 5:00 p.m.
rather than 6:00 p.m."
It was the consensus of the EDA to cable action on the August 19, 2002, minutes
until the next EDA meeting to allow staff to research this issue.
COMMISSIONER MOTIN MOVED TO APPROVE THE CONSENT
AGENDA AS FOLLOWS:
3.1. AUGUST 12, 2002 EDA MINUTES -APPROVED
3.2. AUGUST 19, 2002 EDA MINUTES -TABLED
3.3. CHECK REGISTER -APPROVED
Economic Development Authority Minutes
September 9, 2002
3.4. REVENUE/EXPENDITURE REPORT -APPROVED
3.5. BALANCE SHEET -APPROVED
COMMISSIONER KOENIG SECONDED THE MOTION. THE
MOTION CARRIED 7-0.
4. Ogen Mike
No one appeared for open mike.
5. Consider Initiative Foundation Year 2003 Contribution Request
Page 2
Executive Director Catherine l~Iehelich indicated that the Initiative Foundation is
requesting the City's consideration fox a contribution of $5,000 in the year 2003.
Catherine noted that the City Council recently reviewed the request and directed the
request to be considered by the EDA.
Catherine indicated that the Foundation does provide several economic programs
that are ox could be of assistance to the City of Elk River. She noted that the
program of the most use over the past two years has been the Seed Capital Program.
She stated that the Foundation has funded two of the City's Incubator companies.
Catherine reviewed other programs that the Foundation offers.
COMMISSIONER DWYER MOVED TO APPROVE A $5,000
CONTRIBUTION TO THE INITIATIVE FOUNDATION IN YEAR 2003.
COMMISSIONER KLINZING SECONDED THE MOTION. THE
MOTION CARRIED 7-0.
6. Review First Draft of the Citv of Elk River Business Subsidv Policv
Director of Economic Development Catherine blehelich indicated that the 2000
MN Business Subsidy Law requires subsidy grantors to establish "Business Subsidy
Criteria" by May 2003. Catherine indicated that the first draft of the City's Business
Subsidies Policy establishes a minimum wage across the board fox all business
subsidies that the City, HRA, and EDA provide. Catherine recommended that the
policy be reviewed by the EDA Finance Committee.
Catherine reviewed the draft policy. Discussion was held regarding the $15.00 per
hour minimum wage criteria proposed in the draft policy. The EDA questioned the
criteria far determining the average wage.
Catherine indicated that the Central Minnesota Initiative Foundation average wage
rate is $13.25. President Gongoll indicated his concern that wage rates that axe too
high could cause companies to look at locating in cities other than Elk River.
Catherine noted that according to the MN Business Subsidy Law the City may
deviate from the policy wage with a public hearing on the specific project.
Economic Development Authority Minutes
September 9, 2002
Page 3
It was the consensus of the EDA that the criteria of $15.00 pex hour be set as the
wage criteria if it is considered an average wage for jobs created or retained.
It was the consensus of the EDA that the policy be reviewed by the Finance
Conunittee.
Consider Business Incubator Lease Extension for Vertical Publishing
Economic Development Assistant Heidi Hall provided the background on the issue
of Vertical Publishing and the lease extension fox the Incubator space. She indicated
that for the past year Vertical Publishing has been charged $345.15 pex month for
subleasing the Incubator space. Heidi indicated that the company had not occupied
the space between October 2001 and July 2002 and therefore did not pay the rent
for the time the space was unoccupied. Heidi stated that the company is now
requesting that a third sublease be considered. Heidi stated that staff recommends
that the outstanding rent be waived fox the past nine months because the company
did not actually occupy the space.
Ben Moyer, the new CEO of Vertical Publishing addressed the EDA regarding the
issue and status of the company.
COMMISSIONER DWYER MOVED TO APPROVE THE INCUBATOR
SPACE LEASE EXTENSION FOR VERTICAL PUBLISHING WITH
THE STIPULATION THAT $200 PER MONTH BE PAID ON THE
BACK RENT AND THAT ANY REMAINING PAST DEBT BE DEALT
WITH AT THE END OF THE SIX MONTH PERIOD. COMMISSIONER
THOMPSON SECONDED THE MOTION.
President Gongoll stated that he would like to waive the outstanding rent since the
company did not occupy the space. Commissioner Klinzing concurred.
COMMISSIONER KLINZING MOVED TO AMEND THE MOTION TO
WAIVE THE OUTSTANDING RENT. COMMISSIONER KUESTER
SECONDED THE MOTION.
Commissioner Dwyer indicated that since the company has proposed to pay a
portion of back rent, the EDA should see that it is collected because of the
responsibility to the taxpayers. Commissioner Tveite indicated his concern regarding
the precedent that would be set by dismissing the back rent.
THE AMENDMENT FAILED 4-3. PRESIDENT GONGOLL AND
COMMISSIONER KLINZING AND KOENIG VOTING AYE AND
COMMISSIONERS DWYER, KUESTER, TVEITE, AND MOTIN
VOTING NAY.
THE MOTION CARRIED 7-0.
Economic Development Authority Minutes Page 4
September 9, 2002
8. Strategic Industrial Marketing Activities Update
Economic Development Assistant Heidi Hall provided an update on the following
Strategic Industrial Marketing activities:
• Features from the August 2002 Minnesota Real Estate Journal Leasing Guide
• Public Relations Strategy
• I{ey accounts and Lead generation strategy
• blanufactuxers and Technology Week, October 21-25, 2002
• Economic Development and Site Selection Conference
• Advertising
9. Other Business
There was no other business.
10. Adjournment
There being no other business, COMMISSIONER TVEITE MOVED TO
ADJOURN THE MEETING. COMMISSIONER MOTIN SECONDED
THE MOTION. THE MOTION CARRIED 7-0.
The meeting of the Elk River Economic Development Authority adjourned a[ 7:25
p.m.
~......~..~ Q ~.~--r
Sandra Peine
Citv Clerk