08-09-2004 EDA MINMEETING OF THE ELK RIVER
ECONOMIC DEVELOPMENT AUTHORITY
HELD AT ELK RIVER CITY HALL
MONDAY, AUGUST 9, 2004
Members Present: President Gongoll, Commissioners Dwyer, Kuester, Tveite (arrived at
5:42 p.m.~ and Motin
Members Absent: Commissioners Klinzing and Koenig
Staff Present: Director of Economic Development Catherine Mehelich, Assistant
Director of Economic Development Heidi Steinmetz, City
Administrator Pat Klaers, and City Clerk Joan Schmidt
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 Agenda
MOVED BY COMMISSIONER DWYER AND SECONDED BY
COMMISSIONER MOTIN TO APPROVE THE AUGUST 9, 2004 EDA
AGENDA. MOTION CARRIED 4-0.
Consider Consent Agenda
MOVED BY COMMISSIONER DWYER AND SECONDED BY
COMMISSIONER KUESTER TO APPROVE THE CONSENT AGENDA AS
FOLLOWS:
3.1. JULY 12, 2004 REGULAR MINUTES
3.2. CHECK REGISTER
3.3. BALANCE SHEET
3.4. REVENUE/EXPENDITURE REPORT
MOTION CARRIED 4-0.
4. Open Mike
No one appeared for open mike.
5.0 Strategic Industrial Marketing Activities Report
Assistant Director of Economic Development Heidi Steinmetz provided an update of
strategic industrial marketing activities. She reviewed the status of the Business
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August 9, 2004
Incubator tenants. She explained that staff is working with consultants to produce a
direct mail piece to promote the Micro-Loan and Technical Assistance Programs. She
brought the commissioners attention to the new Energy City brochure, which was in
their packet.
President Gongoll stated that Incubator Tenant Cymbet has been able to secure
another $10 million from venture capitalists and investors.
Ms. Steinmetz stated that staff and President Gongoll will be conducting a business
retention and expansion visit to Supermats on Wednesday at The Depot and invited
other members to attend.
Commissioner Dwyer inquired to the tax exemptions that go along with the state's
JOBZ program. Ms. Steinmetz explained that includes all taxes, and each city (zone)
can decide the term up to a maximum of 12 years starting year 2004.
5.1 Gradient Technology & Orluck Industries Project Update
Assistant Director of Economic Development Heidi Steinmetz provided an update
regarding Gradient Technology stating that the project is on schedule, there are no
issues foreseen to put the project behind schedule, and the tenants are expected to be in
the building by November or December of this year.
Commissioner Tveite arrived.
Director of Economic Development Catherine Mehelich stated that Mark Orluck,
President of Orluck Industries, has met with staff to review a preliminary site plan for
up to a 20,000 square foot building. Staff anticipates construction to begin in
September for occupancy by early next year. Ms. Mehelich stated that Mr. Orluck has
mentioned difficulty in finding people for new positions.
Commissioner Kuester inquired what qualifications Mr. Orluck is requesting in
regards to jobs.
Ms. Mehelich stated that she does not have the specifications but that he is looking for
some CNC operators. Anoka Hennepin and Anoka Ramsey do have programs for
this type of training and the city will be looking to partner with them.
5.2 Associated Investors Contribution
President Gongoll wished to acknowledge formally the contribution to the Incubator
Program of $7,903.23 from the Elk River Investors, Inc. He stated that 40 years ago
the Elk River Associated Investors pooled their money and purchased property in the
northern part of Elk River to be able to develop industrial sites.
Eventually the city hired a development coordinator to handle the economic
development functions and the city purchased that piece of property from the
investors, which became the Elk River Industrial Park.
Economic Development Authority Minutes
August 9, 2004
Page 3
Most recently this group decided to terminate the corporation and paid off their
investors. A discussion was held and this group wanted to fulfill their mission of
development in the City of Elk River resulting in this remaining money to be given to
the city to be used specifically for the Elk River Incubator Program.
Staff will be sending a thank you letter to the group in care of Dick Gongoll.
6. Consider Finance Committee Appointment
Ms. Steinmetz explained that due to Finance Committee member Tom McNair's
change of employment from First National Bank to The Bank of Elk River, there was
created two representatives from The Bank of Elk River serving on the Finance
Committee, Mr. McNair and Jim Simpson. Mr. Simpson has offered to resign from
the Committee after 18 years of service.
She explained that Dave Rymanowski, President of First National Bank of Elk River,
has expressed interest in becoming a member of the EDA Finance Committee.
MOVED BY COMMISSIONER TVEITE AND SECONDED BY
COMMISSIONER MOTION TO APPOINT DAVE RYMANOWSKI TO THE
EDA FINANCE COMMITTEE. MOTION CARRIED 5-0.
Consider Business Incubator Tenant Lease Extension - K-Netica
Ms. Steinmetz explained that K-Netica became an Incubator tenant in May of 2002
with six-month sublease extensions in Apri12003 and January 2004. Chief
Technology Officer Joe Roushar has requested asix-month sublease extension through
February 2005.
Mr. Roushar gave a presentation illustrating K-Netica's (maker of ISYL Intelligent
Software) progress, technical achievements, actual sales, projections, and employment.
MOVED BY COMMISSIONER TVEITE AND SECONDED BY
COMMISSIONER DWYER TO APPROVE THE SIX-MONTH SUBLEASE
EXTENSION TO K-NETICA EFFECTIVE AUGUST 21, 2004 THROUGH
FEBRUARY 20, 2005 AT THE CASH RENT RATE OF $755.66 PER MONTH.
MOTION CARRIED 4-0. Gongoll abstained; he has a contractual relationship
with Mr. Roushar.
8. Consider 2005 EDA and Business Incubator Bud ets
Ms. Mehelich reviewed the proposed Year 2005 EDA Budget answering questions of
the commission members i.e. how does proposed budget compare wish current 2004
budget; explanation of legal fees; professional services; and Chamber of Commerce 4`h
of July contribution.
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August 9, 2004
Page 4
MOVED BY COMMISSIONER TVEITE AND SECONDED BY
COMMISSIONER DWYER TO APPROVE THE YEAR 2005 EDA BUDGET
AS PRESENTED. MOTION CARRIED 5-0.
Ms. Mehelich reviewed the proposed Year 2005 Business Incubator Budget.
Commissioner Dwyer stated that there is never an accounting of the billable hours in
regards to the amount paid to Harlan Jacobs and that he would not vote for approval
because of that reason. President Gongoll stated that Mr. Jacobs is working towards
improving this situation and will be at next month's meeting. Staff was directed to ask
Harlan Jacobs for a statement defining billable hours.
Commissioner Motin inquired as to the kind of agreement we have with Genesis
Business Centers.
Ms. Mehelich stated that she has not found a formal contract, only an initial contract
for evaluating the feasibility of the program with an initial evaluation fee. For the past
5-6 years he has been paid at the rate of $500 per month and that was adjusted in 2003
to $1,000 per month. She stated that when the rate was increased there was a request
made by the EDA to have semi-annual annual reports on his work with the existing
tenants as well as his recruitment of other tenants. She stated that he is meeting that
request.
MOVED BY COMMISSIONER GONGOLL AND SECONDED BY
COMMISSIONER KUESTER TO APPROVE THE BUSINESS INCUBATOR
BUDGET. MOTION CARRIED 4-1. Dwyer voted nay because of payments to
the consultants; not opposed to the Incubator Program.
9. Other Business
9.1 Advisory Board & Commission PolicX
Ms. Mehelich stated the commissioners should mark their calendar for a joint meeting
with the city council for Monday, October 11, for agoal-setting session.
10. Adjournment
There being no other business, the meeting of the Elk River Economic Development
Authority adjourned at 6:34 p.m.
Joan Schmidt
City Clerk