02-14-2005 EDA MINMEETING OF THE ELK RIVER
ECONOMIC DEVELOPMENT AUTHORITY
HELD AT THE ELK RIVER CITY HALL
MONDAY, FEBRUARY 14, 2005
Members Present: President Gongoll, Cotmnissioners, Dwyer, Farber, Klinzing, Moon and
Tveite. Commissioner Gumphrey amved at 5:33 p.m.
Members Absent: None
Staff Present: Director of Economic Development Catherine Mehelich, Assistant
Director of Economic Development Heidi Steinmetz, City Engineer Terry
Maurer, and Recording Secretary Debbie Huebner
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 TVEITE AND SECONDED BY
COMMISSIONER FARBER TO APPROVE THE FEBRUARY 14, 2005 EDA
AGENDA WITH THE FOLLOWING ADDITION:
ITEM 9.OTHER BUSINESS -COMMISSIONER MOTION - NORTHSTAR
CORRIDOR
MOTION CARRIED 6-0.
3. Consider Consent Agenda
MOVED BY COMMISSIONER KLINZING AND SECONDED BY
COMMISSIONER MOTIN TO APPROVE THE CONSENT AGENDA AS
FOLLOWS:
3.1. MINUTES
• JANUARY 10, 2005 REGULAR MEETING MINUTES
• JANUARY 10, 2005 SPECIAL MEETING MINUTES
3.2. CHECK REGISTER
3.3. JANUARY 2005 BALANCE SHEET
3.4. JANUARY 2005 REVENUE/EXPENDITURE REPORT
MOTION CARRIED 6-0.
4. Open Mike
No one appeared for open mike.
Commissioner Gumphrey arrived at this time (5:33 p.m.~
Economic Development AuthonryMinutes Page 2
February 14, 2005
5. Strategic Industrial Marketing Update
Assistant Director of Economic Development Heidi Steinmetz reviewed the Strategic
Industrial Marketing Activities Report, highlighting the following items:
-The 2005 Community Profile is now available and can be downloaded from the City's
website.
-Staff attended the January 19, 2005 Sherburne County Economic Development Alliance
(SCEDA) Strategic Planning Session. SCEDA anticipates a summary of the strategic
planning efforts will be available this Spring.
-EDA members are asked to advise staff which companies they are interested in visiting, as
listed on the 2005 Business Retention and Expansion (BRE) visit list provided in their
packet. Ms. Steinmetz noted that a BRE visit with Metal Craft Machine & Engineering is
scheduled for Febmary 28~h.
Chair Gongoll asked if Sherburne County has hired an Economic Development Director
yet. Ms. Steinmetz stated no. President Gongoll asked how often the BRE visits are
scheduled. Ms. Steinmetz stated that visits are scheduled with a different company
approximately every 1 -2 months.
6. Industrial Land Development Update
Director of Economic Development Catherine Mehelich reviewed the recent activities
related to planning for improvements and development of the City-owned Cargill land and
the EDA-owned Brown land. She explained that Request for Proposals (RFP's) were
prepared and mailed to 20 developers and brokers and that the deadline for proposal
submission is March ls~. Ms. Mehelich noted that Ehlers and staff will review the proposals
received and report the results to the EDA at its March 14~h regular meeting.
Ms. Mehelich noted that City Engineer, Terry Maurer, has recommended that the existing
pond on the Brown property be expanded to handle the drainage for the entire business
park, thereby allowing Lot 9 to be used for development, rather than for ponding.
Ms. Mehelich discussed the July 2000 Northstar Comdor Development Association study to
evaluate the long range transit-oriented development potential surround the proposed depot
station site. She also discussed the City's land use map which was adopted as par[ of the
Comprehensive Plan, noting that high-density residential and light industrial uses
surrounding the depot site are indicated. Ms. Mehelich explained that she spoke with Rusty
Fifield of Hoisington Koegler, consultant for the Comprehensive Plan Update, and he stated
that a new mixed-use land use designation was discussed for the area from the Brown
property up to the Home Depot location, but ultimately was not supported.
Chair Gongoll asked if the EDA would be reviewing the RFP's. Ms. Mehelich stated that
the EDA will review them at their March meeting, and make a recommendation to the City
Council, if necessary to authorize a feasibility study and star[ the public improvement
process.
City Engineer Terry Maurer stated that the dirt placed on the site was from the Twin Lakes
Road project and that a grading plan still needs to be done.
Economic Development AuthoriryMinutes
February 14, 2005
Page 3
Commissioner Moon asked if this site would be easier to develop than the Cargill site. Mr.
Maurer stated yes, that it would be much easier from a grading standpoint to get buildable
sites.
Consider Renewal of Business Incubator Lease
Ms. Steinmetz noted that the lease with Larry Hickman of the Business Incubator budding
will expire April 15, 2005. Staff requests that the EDA consider renewing the lease so that
prospective tenants may consider sub-leasing space in the building for a period of at least
one year.
Ms. Steinmetz provided history of the Business Incubator lease. She noted that K-Netica
and Lap2 Technology Corporation are the current tenants. Ms. Steinmetz stated that finding
a new building with city sewer and water has been discussed. She then reviewed the terms of
the proposed lease renewal with Mr. Hickman.
Cotmissioner Dwyer stated that before the next lease term comes up, he would be in favor
of looking at a broader base for tenants. Currently, prospective tenants are required to be
incorporated and have a stock option available, which elimurates the sole proprietor who
may have no intention of going public. Chair Gongoll added that a tenant may meet the
high tech requirement, but cannot meet those items mentioned by Commissioner Dwyer.
Discussion followed regarding the Incubator requirements. Ms. Mehelich suggested that the
EDA may wish to discuss this issue with the Business Incubator Advisory Committee.
MOTION BY COMMISSIONER DWYER AND SECONDED BY
COMMISSIONER TVEITE TO RENEW THE BUSINESS INCUBATOR LEASE
WITH MR. LARRY HICKMAN FOR UP TO 2 YEARS FOR 6,569 SQUARE FEET
(3 SUITES) AT LEASE RATE OF $2.10/SF AND A MAINTENANCE RATE OF
$0.09/SF. MOTION CARRIED 7-0.
8. Consider Business Incubator Tenant Lease Extension: K-Netica
Ms. Steinmetz provided background information regarding K-Netica's lease of 2,267 square
feet of Incubator space since May of 2002. She noted that the EDA has granted three
sublease extensions to K-Netica and that in addition to stock offering, the company has
made timely cash rent payments. K-Netica has requested a fourth sublease extension for six
months.
Joe Roushar, Chief Technology Officer for K-Netica -Provided information on the
company's current status and growth. He noted that they have recently closed a deal with
Blue Cross for a pilot program of software. Mr. Roushar stated that they hope to find a
larger space at the end of the lease period in August 2005.
MOTION BY COMMISSIONER KLINZING AND SECONDED BY
COMMISSIONER MOTIN TO GRANT ASIX-MONTH SUBLEASE
EXTENSION TO K-NETICA EFFECTIVE FEBRUARY 21, 2005 -AUGUST 20,
2005 AT THE FOLLOWING CASH/STOCK RENT RATE:
$4 PER SQUARE FOOT CASH RENT ($755.66 PER MONTH); $7 PER SQUARE
FOOT STOCK VALUE (DIVIDED AMONG BUILDING OWNER, INCUBATOR
CONSULTANT &EDA; FOR A TOTAL OF $11 PER SQUARE FOOT TOTAL
RENT VALUE. MOTION CARRIED 7-0.
Economic Development Authority Minutes Page 4
February 14, 2005
Norths[ar Comdor -Commissioner Motin
Commissioner Motin stated that the Northstar Comdor maintenance facility will not be
located in Elk River on 20 - 25 acres of the city-owned Cargill site, and will instead be
located in Big Lake.
Ms. Mehelich noted that the Chamber of Commerce "State of the City" luncheon will be
held on March 15, 2005. Issues to be discussed include the downtown, transportation, and
the EDA Business Park.
10. Adjournment
There being no other business, Chair Gongoll adjoumed the meeting.
The meeting of the Elk River Economic Development Authority adjourned at 6:20 p.m.
Submitted by:
ltd( `.---~
Recording Secretary