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08-11-2003 EDA MINMEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, AUGUST I I, 2003 Members Present: President Gongoll, Commissioners Dwyer, Klinzing, Kuester, Tveite and Motin Members Absent: Commissioner Koenig Staff Present: Director of Economic Development Catherine Mehelich, Economic Development Assistant Heidi Hall, City Administrator Pat Klaers, City Attorney Peter Beck, and Recording Secretary Jessica Miller 1. Call Meeting 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. Consider 8/11/03 Agenda COMMISSIONER KLINZING MOVED TO APPROVE THE AUGUST 11, 2003, EDA AGENDA. COMMISSIONER MOTIN SECONDED THE MOTION. THE MOTION CARRIED 6-0. Consider Consent Agenda COMMISSIONER MOTIN MOVED TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. JULY 14, 2003 REGULAR MEETING MINUTES with the minutes changed to reflect that Commissioner Klinzing was present for the meering on-rime. 3.2. CHECK REGISTER 3.3. REVENUE/EXPENDITURE REPORT 3.4. BALANCE SHEET COMMISSIONER TVEITE SECONDED THE MOTION. THE MOTION CARRIED 6-0. 4. Open Mike No one appeared for open mike. Economic Development Authority Minutes August 11, 2003 5. Comprehensive Plan Update Page 2 No Comprehensive Plan update was necessary because all EDA Commissioners were present at the July 31, 2003 Comprehensive Task Force meeting with the exception of President Gongoll who has already received an update. Director of Economic Development Catherine Mehelich noted that the fmal Task Force meeting and public open house is scheduled for August 21, 2003 at River of Life Church. 6. Strategic Industrial Marketing Activities Update Economic Development Assistant Heidi Hall indicated that the Marketing Committee has met three times to discuss the industrial land issue. Ms. Hall noted that staff will be attending an event sponsored by the Manufacturer's Alliance and MN Technology on August 14, 2003 entitled "Responding to Foreign Competition". Ms. Hall stated that staff has met with local banks to provide information on the MN Community Capital Fund and the city's new partnership program with MN Technology. Ms Hall explained that this is a program to help retain and recruit companies and assist with technical assistance through a grant provided by the Initiative Foundation to the City of Elk River. Ms. Hall played a short radio interview that Director of Economic Development Catherine Mehelich conduced at the end of July with KCCO (950AM) Minneapolis. In the interview Ms. Mehelich explained the partnership program and how to contact the city if interested. President Gongoll questioned what the next step in the process is. Ms. Hall explained that staff hopes to have a direct mail announcement sent out next week to a targeted list put together by staff and MTI. Ms. Hall stated that staff and the ACE Marketing Committee/Special Events Task Force have begun planning an event tentatively scheduled for mid-October to recognize the new high performance Rogers High School. Ms. Hall noted that at the August 25, 2003 HRA meeting, staff will report the status of their research regarding the follow-up issues requested by the HRA and members of the public regarding the proposed Downtown Revitalization Project. Ms. Hall also noted that the August edition of the Downtown Revitalization Q&A Newsletter will be distributed on August 20 as an insert in the Elk River Star News. An announcement telling people to look for the Q&A in the August 20`h will be in the August 13 Star News. Economic Development Authority Minutes Augur 11, 2003 6.1. Semi-Annual Inquiry/Prospect Report Page 3 Director of Economic Development Catherine Mehelich reviewed the 2003 semi- annual inquiry/prospect report. Ms. Mehelich noted that staff has had as many prospects to date this year as in the entire 2002 year. Ms. Mehelich also noted that approximately 60% of the prospects were industrial and were primarily seeking general information rather than specific siting proposals. She stated that this suggests businesses are researching options for when the economy improves. She stated that since 2001, three industrial businesses have located to Elk River, while 131ocated elsewhere. She stated that reasons included allowing more warehouse and outside storage, land price, available sites, and financial incentives. Industrial Land Development Strategy Update Director of Economic Development Catherine Mehelich stated that as directed by the EDA in June, staff and Sid Inman of Ehlers & Associates have met with the following four landowners to gather information that will assist staff in developing a process for each landowner that reduces the price competition between landowners within the city, while at the same time allowing them to be competitive with land outside of the city: • Elk Path Business Center -west business park • Gagne Properly -west business park • Elk River Business Park -east business park • Cascade Industrial Park -southeast industrial park In addition, staff gathered information and research on property special assessments and the estimated costs to prepare the sites for immediate sale and development. Ms. Mehelich stated that after the meetings, staff and Mr. Inman presented a Matrix Comparison of Key Industrial Client Requirements by the City of Elk River Product Offering, to the EDA Marketing Committee for discussion. The Committee concluded that only three of the properties are realistic for competitive industrial marketing in the short term: • Elk Path Business Center (Phase n • Elk River Business Park • EDA -Brown Property (Phase n Mr. Inman stated that the Marketing Committee also recommends the following conclusions and requests direction from the EDA: • Landowners should be provided an equal base amount per square foot for their property, then the city should write down to zero dollars to be competitive. • The city should consider using special assessments and, if necessary, write down improvement costs with tax increment financing (TIF) or tax rebate financing ('TRh~. Economic Development Authority Minutes August 11, 2003 Page 4 • The city should consider using TIF/TRF to pay for park dedication fees. In addition, upon direction from the EDA, the Marketing Committee recommends that staff complete the analysis which will include strategy for which to determine the basis to which the city may participate for industrial development on each site, including established goals for the type of user, building standards, and level of assistance needed to make the site competitive within the market. The analysis and strategy would be presented to the EDA at its regular September meeting. Marketing Committee member Gary Santwire reported to the EDA that the city needs "industrial pazk" property that is ready for development. He encouraged the city to proceed with Phase I of the EDA Brown property. Commissioner Motin stated that he doesn't think the city needs to write down land price to $0. Commissioner Tveite agrees that some businesses would need TIF to be competitive with other cities and that the city needs to provide options for industrial companies to locate to Elk River, or change the EDA mazketing budget. COMMISSIONER TVEITE MOVED TO HAVE STAFF COMPLETE THE ANALYSIS AS RECOMMENDED BY THE ECONOMIC DEVELOPMENT AUTHORITY MARKETING COMMITTEE. COMMISSIONER KUESTER SECONDED THE MOTION. THE MOTION CARRIED 6-0. 8. Business Incubator Prospect Update Economic Development Assistant Heidi Hall stated that there is a Business Incubator Advisory Committee meeting on August 12, 2003 to discuss two new prospects: IntelliPatch and Lap2 Technology. Ms. Hall stated that the recommendation from the Incubator Committee will come to the EDA in September. Ms. Hall reported that staff had not received a request from IntelliPatch to extend the 30-day lease in the Incubator building. 9.1. Consider Year 2004 Budeet Director of Economic Development Catherine Mehelich stated that begituling in 2003, the EDA and HRA levies have been sufficient to balance the Economic Development Department without the General Fund. Revenues aze estimated at 10% growth in market value for 2004. Ms. Mehelich stated that personal services (salazies and benefits) are proposed to be divided the same as in 2003; EDA 70% and HRA 30%. President Gongoll questioned if the personal services budget could be split more equally between the HRA and the EDA. City Administrator Pat Klaers acknowledged that in 2003 and 2004 that staff maybe spending more time on HRA activities with the downtown revitalization project but stated that for budget reasons staff prefers to keep the numbers consistent and that the 70-30 split balances out over the years. Economic Development Authority Minutes Angus[ 11, 2003 Page 5 Ms. Mehelich stated that the proposed budget does not include a contribution to the Initiative Foundation in 2004. The EDA budgeted $5,000 for 2003. Ms. Mehelich stated that staff recommends that commencing in 2004, the EDA consider either a biannual contribution of $5,000 or an annual contribution of $2,500 to the Initiative Foundation, up to the total amount requested from the City of Elk River ($9,929 net balance). It was decided that the EDA will contribute $2,500 in 2004 and review the request annually. Mr. Klaers noted that it maybe more appropriate for the EDA to approve the tax levy and wait on approval of the EDA budget until September after the HRA has a chance to discuss their budget as it related to sharing personal services. 9.2. Consider Resolution Regarding EDA Levy COMMISSIONER MOTIN MOVED TO APPROVE RESOLUTION 03-O1 ESTABLISHING THE TAX LEVY FOR THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF ELK RIVER, MINNESOTA. COMMISSIONER TVEITE SECONDED THE MOTION. THE MOTION CARRIED 6-0. 10. Consider Steve Whiting (Northstar Die Casting) Micro Loan Settlement City Attorney Peter Beck stated that Steve Whiting (Northstar Die Casting) contacted him and offered to settle for $3,000. Mr. Beck indicated that the total amount now owed by Mr. Whiting is $17,487.50 plus costs and interest. Mr. Beck stated that it was not his intent to settle for such a small amount but he would like some direction from the EDA. President Gongoll stated that the offer made by Mr. Whiting to settle for $3,000 is totally unacceptable. Commissioner Tveite suggested that the EDA waive the legal costs and interest and obtain judgment on the original amount owed. President Gongoll concurred. Director of Economic Development Catherine Mehelich noted that staff did agree to a $1,000 per month settlement with Mr. Whiting but no payments have been received since March 2002 and so judgment was filed. It was the consensus of the Commission for Mr. Beck to offer Mr. Whiting a counter settlement offer of $12,000 cash payment with the condition that if not paid within 30 days the amount will revert back to the total owed of $17,487.50 plus cost and interest and judgment will be transcribed in Florida, where Mr. Whiting currently resides. liconomic Development Authotity Minutes August ] 1, 2003 I1. Other Business Pagc G Director of Economic Development Catherine Mehelich asked City Attorney Peter Beck to provide the EDA with an update on the Riverside Manufacturing case. Ms. Mehelich stated that Riverside Manufacturing cuxrendy owes over $40,000. City Attorney Peter Beck stated that a complaint has been filed against Riverside Manufacturing and that there has been no response. Mr. Beck indicated that he is looking far EDA direction for the next step. It was the consensus of the EDA to file default judgment. 12. Adjournment There being no other business, PRESIDENT GONGOLL ADJOURNED THE MEETING. The meeting of the Elk River F,conomic Development Authority adjourned at 6:47p.m. Respectfully submitted, ~~ Jessica Miller Recording Secretary