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01-10-2005 EDA MINMEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, JANUARY 10, 2005 Members Present: President Gongoll, Commissioners Farber, Gtunphrey, Dwyer, Tveite and Moon. Cottunissioner Klu~zutg arrived at 5:34 p.m. Members Absent: None Staff Present: Director of Economic Development Catherine Mehelich, Assistant Director of Economic Development Heidi Steinmetz, City Adminis[rator Pat Klaers, and Recording Secretary Debbie Huebner 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 JANUARY 10, 2005 EDA AGENDA WITH THE FOLLOWING ADDITION: 8. OTHER BUSINESS - CYMBET UPDATE MOTION CARRIED 6-0. 3. Consider Consent Agenda Commissioner Dwyer disclosed that he was an officer of the Bank of Elk River. Commissioner Tveite disclosed that he was an officer for Wells Fargo Bank. MOVED BY COMMISSIONER FARBER AND SECONDED BY COMMISSIONER KLINZING TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. DECEMBER 13, 2004 REGULAR MEETING MINUTES 3.2. CHECK REGISTER 3.3. APPOINTMENT OF EXECUTIVE DIRECTOR 3.4. DESIGNATION OF OFFICIAL NEWSPAPER 3.5. DESIGNATION OF OFFICIAL DEPOSITORIES 3.6. COMMISSIONER APPOINTMENTS/ASSIGNMENTS MOTION CARRIED 7-0. 4. Open Mike No one appeazed for open mike. Economic Development AuthoriryMinutes January 1Q 2005 5. Annual Meeting Election of Officers MOTION BY COMMISSIONER KLINZING AND SECONDED BY COMMISSIONER FARBER TO APPROVE THE FOLLOWING APPOINTMENTS /ASSIGNMENTS: PRESIDENT -JEFF GONGOLL VICE PRESIDENT -PAT DWYER SECRETARY - PAUL MOTIN TREASURER - DAN TVEITE ASSISTANT TREASURER -JERRY GLJMI'HREY MOTION CARRIED 7-0. 6. Consider Conceptual Layout for EDA Brown Business Park Property Page 2 Ms. Mehelich provided background information regarding the development of the 60 acres of City-owned land and 45 acres of EDA-owned Brown property, in order to encourage industrial development. She reviewed the City's objectives to put all industrial land in Elk River on a level playing field in price and financing assistance. Ms. Mehelich explained that the EDA directed staff to develop a Request for Proposals (RFP) for the Brown property and the drafr conceptual layouts for both the EDA Brown and City-owned properties. Staff requests the EDA's feedback on the drafr RFP. Ms. Mehelich then reviewed the concept layout for the EDA Brown property, noting possible budding sizes on the various lots, access and site constraints such as the gas line, wetlands, and access points. President Gongoll asked for clarification on the wetlands. Ms. Mehelich responded, noting that the newly adopted wetland buffer ordinance has not been factored in. Discussion followed regarding the proposed YMCA site on the properly, drainage ponding, and costs of improvements. Sid Inman of Ehlers & Associates noted that based on the new tax increment generated by new development on the property, the city can be paid back for the cost of the improvements and land. Commissioner Motin stated he did not see any reason not to include the YMCA site in the RFP. Ms. Mehelich stated that the RFPs could be sent out February 1 for a response by March 1. Mr. Inman noted that developers typically would need plans by March 1~ for development by September. Ms. Mehelich stated that the manufacturing prospect needs to sell their existing property, but they hope to scar[ construction in 9 - 12 months. Commissioner Motin asked if the company site would affect the RFP responses. Ms. Mehelich stated that it may help generate more interest. Commissioner Moon asked if the RFP could be offered both with and without the prospect site. Mr. Inman stated that they debated this issue, since there is some oppommity there and recommended a statement that there is a pending development and knowing this, they may include the lot in their concept with that understanding. Ms. Mehelich asked for comments regarding the RFP. Commissioner Tveite stated that Section 3 regarding goals mentions "increased customer base for retail", and that he would not want any confusion, since their goal is not retail. Economic Development Authority Minutes January lo, zoos Page 3 Commissioner Gumphrey asked if Mr. Inman felt the 30 days was enough time for response to the RFP. Mr. Inman stated that developers typically wait until the last week anyway, and that they would be planning now for fall developments. Commissioner Klinving stated that she was aware of a previous concept for minced use in this area which included property surrounding the transit/commuter rail site. Ms. Mehelich stated that she will check with staff. Commissioner Klinzing stated that the EDA needs to take into consideration that potential high use for this area. Ms. Mehelich asked that the Commission consider a name for the EDA-owned Brown property site. Consider Micro Loan Extension -Minnesota Fabrication & Machine Ms. Steinmetz provided background information on the $50,000, 3.7s% Micro Loan to Minnesota Fabrication & Machine, Inc. She noted that the loan was a participation loan with First National Bank of Elk River and that payments have been consistent. A balloon payment of $41,732.03 was due December 31, 2004. The company is eligible and has requested atwo-year extension at a market interes[ rate of 6.5%. The company has provided the processing fee and necessary documents. Ms. Steinmetz noted that the EDA Finance Committee recommends approval of the Micro Loan extension request at 6s% interest, with a monthly payment of $400. She stated that Kenneth Millslagle of Minnesota Fabrication & Machine, Inc. was present to answer any questions the Commission may have. Commissioner Dwyer asked if the property has been sold to the business owners. Mr. Millslagle stated that he and his brothers have purchased the property to pay off the mortgage to First National Bank and would like to refinance to generate cash and operating expenses. The company then would ask for a subordinate agreement from the EDA for the bank to process them application. MOTION BY COMMISSIONER KLINZING AND SECONDED BY COMMISSIONER TVEITE TO APPROVE THE REQUEST BY MINNESOTA FABRICATION AND MACHINE, INC. FOR A TWO YEAR EXTENSION OF THE $50,000 MICRO LOAN AT AN INTEREST RATE OF 6.5%> WITH MONTHLY PAYMENTS OF $400. MOTION CARRIED 7-0. 8. Other Business President Gongoll noted that Cymbet has received their second round financing of $16 million. Ms. Mehelich will draft a letter of acknowledgement to Cymbet for President Gongoll's and Commissioner KIutzing's signature. 9. Desi ng anon - 6:10 p .m. Su//b~~mitted by, ~(Vo.~ict `~ec~6n.-~~ Debbie Huebner Recording Secretary