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05-08-2006 EDA MINMEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, MAY 8, 2006 Members Present: President Gongoll, Comaussioners, Dwyer, Farber, Gumphrey, Klu~zing and Motin Members Absent: Commissioner Tveite Staff Present: Director of Economic Development Catherine Mehelich, Assistant Director of Economic Development Heidi Steinmetz, Community Development Director Scott Clark, 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 FARBER AND SECONDED BY COMMISSIONER DWYER TO APPROVE THE MAY 8, 2006 EDA AGENDA. MOTION CARRIED 6-0. 3. Consider Consent Agenda MOVED BY COMMISSIONER DWYER AND SECONDED BY COMMISSIONER FARBER TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. APRIL 10, 2006 MINUTES 3.2. CHECK REGISTER 3.3. BALANCE SHEET 3.4. REVENUE/EXPENDITURE REPORT MOTION CARRIED 6-0. 4. Open Mike No one appeared for open mike. 5. Strategic Industrial Marketing Activities Update Assistant Director of Economic Development Heidi Steinmetz noted that the Business Financing Forum has been scheduled for May 24~ at Rockwoods in Otsego. She reviewed highlights of the Update regarding the Technical Assistance Program, Economic Development Newsletter, and the updated Community Profile. She noted that the Community Profile is now available in hard copy and also as a PDF on the City's website. Economic Development Authority Minutes Page 2 May 8, 2006 5.1. Consider EDA Marketing Committee Member Appointments for Update of Strategic Industrial Marketing Plan Ms. Steinmetz explained that Daryl Thompson and Jim Simpson have resigned from the Mazketing Committee and the EDA is asked to consider appointing Jerry Gumphrey and David Ehlers to serve. She expressed thanks on behalf of the EDA to Daryl and Jim for their years of service on the committee. MOTION BY COMMISSIONER FARBER, SECONDED BY COMMISSIONER KLINZING TO APPOINT THE FOLLOWING TO THE 2006 EDA MARKETING COMMITTEE: • JERRY GUMPRHEY TO SERVE AS THE CITY COUNCIL RESENTATIVE • DAVID EHLERS OF METAL CRAFT MACHINE & ENGINEERING MOTION CARRIED 6-0. 6.1. ~ Business Subsidy Policy Director of Economic Development Catherine Mehelich reviewed the amendments to the Business Subsidy Policy. She. noted that the Business Subsidy Policy, Tax Abatement Policy, Tax Increment Financing Policy, and the Micro Loan Policy will be presented to the City Council for adoption later this month. MOTION BY COMMISSIONER GUMPHREY, SECONDED BY COMMISSIONER FARBER TO ADOPT THE AMENDED BUSINESS SUBSIDY POLICY. MOTION CARRIED 6-0. 6.2. Cirv Tact Abatement Policy Ms. Mehelich reviewed the amendments discussed at the Mazch 13, 2006 EDA meeting. MOTION BY COMMISSIONER KLINZING, SECONDED BY COMMISSIONER DWYER TO ADOPT THE AMENDED TAX ABATEMENT POLICY. MOTION CARRIED 6-0. 6.3. City Tax Increment Financing Policy Ms. Mehelich noted that the final policy includes amendment discussed at the April 1Q, 2006 EDA meeting, including changes to the scoring sheet for Industrial properties. MOTION BY COMMISSIONER MOTIN, SECONDED BY COMMISSIONER GUMPHREY TO ADOPT THE AMENDED TAX INCREMENT FINANCING POLICY. MOTION CARRIED 6-0. 6.4. Economic Development Micro Loan Policy Economic Developmenx Authority Minutes Page 3 May 8, 2006 Ms. Mehelich highlighted changes to the Micro Loan Policy, including changing the rate for Industrial to 2 percent below prime; and increasing the ma,nmum available financing for Downtown Rehabilitation from $50,000 to $75,000 with a fixed rate at 2 percent. Commissioner Motin asked if Tax Abatement could be requested, and then a Micro Loan, or if the City would require both applications up front. Also, he questioned if additional fees would be collected to cover costs. Ms. Mehelich referred to Page 3 of 14, ntunber 1 under Criteria, and also, Page 11 of 14 under Line Items. MOTION BY COMMISSIONER KLINZING, SECONDED BY COMMISSIONER GUMPHREY TO ADOPT THE AMENDED MICRO LOAN FUND POLICY AND APPLICATION. MOTION CARRIED 6-0. 7. Ms. Steinmetz provided background information regarding the proposed Encroachment Agreement between the EDA and Northern Natural Gas (NNG) for the Northstar Business Park property. She noted that in summary, the Encroachment Agreement states that if something goes wrong within the encroachment area (unless caused by NNG), the EDA would be held entirely responsible for any damages/claims. MOTION BY COMMISSIONER DWYER, SECONDED BY COMMISSIONER MOTIN TO APPRVE THE ENCROACHMENT AGREEMENT WITH NORTHERN NATURAL GAS FOR LOT 1, BLOCK 1 OF NORTHSTAR BUSINESS PARK FOR THE FOLLOWING REASONS: • THE OCTOBER 2005 MUTUAL DRIVEWAY EASEMENT AGREEMENT BETWEEN THE EDA AND CDI HOLDS CDI LIABLE IF THEY DISRUPT THE GAS LINE WITHIN THE ENCROACHMENT AREA. • THE ENCROACHMENT AGREEMENT IS AUTOMATICALLY ASSIGNABLE WHEN THE EDA SELLS THE PROPERTY. MOTION CARRIED 6-0. Commissioner Moon asked if NNG will be increasing the size of their gas lines in this area. Ms. Mehelich stated that was not offered as an option by NNG. Commissioner Moon felt that it would make sense to shift the lines to the west as part of the expansion project. 8. Other Business Ms. Mehelich noted the Crystal Distribution, Inc. and Alliance Machine have moved into their buildings. Also, Classic Acrylics has moved into their building and is fully operational. They have extended an offer to the Commission to come in for a tour. CDI and Alliance have hired 5 or 6 new employees from the Elk River area. The EDA will host an open house with CDI since a ground breaking ceremony was not held due to weather. Commissioner Kluizuig noted that she received a letter from Sherburne County Administrator Brian Bensen stating the County is looking for City representation to serve on an ad-hoc committee. The committee's purpose is to make a recommendation as to what type of entity would best serve thew needs for economic development. The time Economic Development Authority Minutes May 8, 2006 Page 4 commitment for serving on the corrunittee would be approximately 90 days. The County proposes appointing one City official and EDA/HRA representative to serve on the comrittee. EDA Commissioners are asked to notify Commissioner Klinzing if they are interesting in serving. Community Development Dueaor Scott Clark stated that he discussed this issue with CityAdministratorLori Johnson, and an item has been included on a later City Council agenda, recommending a representative from the EDA, HRA, City Council and City staff be appointed to serve on the ad-hoc committee. 9. Adjournment There being no other business, CHAIR GONGOLL ADJOURNED THE MEETING. The meeting of the Elk River Economic Development Authority adjourned at 6:05 p.m Submitted by: q/~ `,<.- Debbie Huebner Recording Secretary