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12 11 2006 EDA MINMEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, DECEMBER I I, 2006 Members Present: President Gongoll, Comnussioners Dwyer, Farber, Gumphrey, Klinzing, Motin and Tveite Members Absent: None Staff Present: City Administrator Lori Johnson, Director of Economic Development Catherine Mehelich, Assistant Director of Economic Development Heidi Steinmetz, Community Development Director Scott Clark, and Recording Secretary Debbie Huebner Also Present: Casey Scott and Tom LaSalle, representing the YMCA 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 MOTIN AND SECONDED BY COMMISSIONER DWYER TO APPROVE THE DECEMBER 11, 2006 EDA AGENDA. MOTION CARRIED 7-0. 3. Consider Consent Agenda MOVED BY COMMISSIONER DWYER AND SECONDED BY COMMISSIONER TVEITE TO APPROVE THE CONSENT AGENDA AS FOLLOWS AND WITH THE FOLLOWING CHANGE: CONSIDER ITEM 5.3. SEPARATELY 3.1. NOVEMBER 13, 2006 MINUTES 3.2. CHECK REGISTER 3.3. BALANCE SHEET 3.4. REVENUE/EXPENDITURE REPORT 3.5. CONSIDER APPROVAL OF MICRO LOAN POLICY AMENDMENTS TO INCLUDE DOWNTOWN BUSINESES REVITALIZATION LOAN PROGRAM MOTION CARRIED 7-0. 4. Open Mike No one appeared for open mike. Economic Development Authority Minutes Page 2 December 11, 2006 5. Consider Tax Abatement Application and Recommendation to Council -United Healthcare Service, Inc. Director of Economic Development Catherine Mehelich provided background information regarding the proposed 189,000 squaze foot United Healthcare Services, Inc. data center project and their request for tax abatement. She noted that a maximum tax abatemem of 5 percent of the assessed market valuation up to $1-million was previously authorized by the EDA as part of negotiations with the company during its site search process. She explained the terms of the assistance being offered to United HealthCaze. Mr. Dennis Spalla, Director of Real Estate for the corporate health group, expressed his appreciation to staff and the elected officials. He stated that staff has been very informative and cooperative throughout their negotiations. Mr. Spalla stated that the proposed facility will surpass what they have in Plymouth. President Gongoll expressed his appreciation to United Healthcare, stating that they will be a valuable asset to Elk River. MOTION BY COMMISSIONER FARBER AND SECONDED BY COMMISSIONER TVEITE TO RECOMMEND APPROVAL OF PROVIDING TAX ABATEMENT ASSISTANCE TO UNITED HEALTHCARE SERVICES, INC. IN THE FORM OF A PAY-AS-YOU-GO TAX ABATEMENT NOTE FOR UP TO 5 PERCENT OF THE ASSESSED MARKET VALUE UP TO A MA7~MiJM OF $850,000 WITH THE COMPANY RECEIVING 100 PERCENT OF THE ANNUAL CITY PORTION OF REAL ESTATE TAXES FOR A MA~MUM PERIOD OF 10 YEARS. A REQUIREMENT OF THE FINANCIAL ASSISTANCE INCLUDES A COMMITMENT FOR THE CREATION OF 20 NEW FULL-TIME POSITIONS AT A MINIMUM HOURLY WAGE OF $24.00 WITHIN TWO YEARS. MOTION CARRIED 7-0. 6. Consider YMCA Memorandum of Understandine City Administrator Lori Johnson stated chat the EDA is issuing authority for the $12 million in bonds for the construction of the YMCA facility that will be owned by the EDA and leased to the YMCA. She noted that the City Council has made changes in the Memorandum of Understanding (MOLn to increase the benefits to the City residents, to address who pays for capital improvements, and maintenance and operation of the building. Ms. Johnson explained that the YMCA will be responsible for one-third of the $12 million debt, and that the levy will start in taxes payable year 2008, which is when the YMCA will begin occupancy. Ms. Johnson reviewed recent changes to the MOU as listed in her staff report dated December 11, 2006. She noted that the City will work with the YMCA on parking issues including Chamber of Commerce 4~h of July celebration, softball and park usage. Ms. Johnson stated that shared parking will be utilized in order to free up as much green space as possible. Commissioner Tveite asked for clarification on the reimbursement of leasehold improvements. Ms. Johnson explained that reimbursement would be considered for improvements that the YMCA paid for, but would not receive full benefit, if the lease were to expire or be terminated, such as a new roof. She noted that the reimbursement would be for only the City's share of the cost, at which that the City takes possession of the building. Commissioner Tveite asked if the YMCA would be responsible for all utilities. Ms. Johnson explained that those types of details will be addressed in the lease agreement, and that the Economic Development AuthoriryMinutes December 11, 2006 Page 3 YMCA will be responsible for all operating including staffing, programs, cost of operating the building, and maintenance of the grounds and parking lots. Also, the insurance cows will be charged back to the YMCA. Commissioner Farber explained that only ahalf-court gym is included in the preliminary design of the gym and that it is the Council's desire to have afull-coup gym for allow for more activities and room for spectators. He stated that he wanted it clarified in the document that the building will be designed jointly by the EDA, City Council and the YMCA. He stated that he felt the four passes per year was not enough benefit for the Elk River residents, and felt the YMCA could offer more. Councilmember Farber stated he fek that some type of discount in their monthly payment or special hours should be offered for the senior citizens. He did not feel that leaving it to the health insurance companies was the answer. He stated that he supported the YMCA, but that he felt there should have been more of a "give and take" option for the residents. Commissioner Morin stated that it is his understanding that even though the building will be designed jointly by the EDA, City Council and YMCA, the City would not be able to include specific items such as racquetball courts or tennis courts, but rather through the programming, they would have input. Ms. Johnson stated that the YMCA stated it needs to design the facility for the programs that bring in the memberships for them. The agreement with the YMCA is to design it similar to other metro facilities. She stated that the gymnasium is very important to the City and will work jointly with the YMCA to design that. Commissioner Motin stated that it is his understanding that the $2 million Legacy Grant would have to be used for items which are landfill abatement for the entire project. Ms. Johnson stated that grant would be based on using 25 percent of materials that are post- consumer or recyclable to meet the requirements. She stated that there is a timing issue and that the expanded gymnasium would likely bean "add alternate" in the bidding process. She stated that the Legacy Grant would not be for the gymnasium; it would be for designing a building that meets the requirement of the grant which include the use of "green" materials. She stated the estimate to expand the gymnasium to the size that Mr. Maertz would like to see would be closer to $750,000. Ms. Johnson stated that we will not know until the design process is worked through whether or not an expanded gymnasium could be built within the $12 million budget. Commissioner Moon stated that he will be voting against the proposal as a whole because he did not feel that enough information was given to the public regarding the pros and cons of the issue. He did not feel that 10-15 percent voter participation in the primary election was adequate to make a decision by the public. He stated pools and fitness centers are already available in the City, and a half basketball court was not adequate. He did not feel it was a good deal for the City. He questioned whether the result would be the same if all the information was available to the public, and if the question were presented at the general election. He did not feel comfortable with the project as proposed and felt a better job could have been done. Commissioner Farber asked if the building could be designed for what the people in this community want or need, rather than what is successful in other cities. Tom LaSalle, representing the YMCA, stated part of the design process is finding out what will suit the market, and that a market study has been done. He stated that over the years, those needs may change. For example racquetball was once very populaz, and since then, most of the racquetball courts have been converted to fitness centers. He explained that the YMCA does not turn arryone away because of their inability to pay, and fees can be charged on an individual's ability to pay. He stated that a huge amount of that type of assistance is given Economic Development Authority Minutes December 11, 2006 Page 4 out yearly. He stated that one of the goals of the YMCA is not to give out assistance to people who can afford to pay, but to give out larger amounts of assistance to those who cannot. MOTION BY COMMISSIONER KLINZING AND SECONDED BY COMMISSIONER GUMPHREY TO APPROVE THE MEMORANDUM OF UNDERSTANDING BETWEEN THE YMCA, THE CITY OF ELK RIVER, AND THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY. MOTION CARRIED 5-2. Commissioners Moon and Farber opposed. Update on Downtown Redevelopment Plan Taskforce (Commissioner Tveite~ Commissioner Tveite stated that Taskforce feels the surrounding housing areas also should be considered in the study. He stated that the group participated in a SWOT analysis in which they reviewed strengths, weaknesses, oppomurities and threats. He stated that in asking the group if the downtown could survive as it is, the answer was no, and that surviving and prospering are two very different things. The group felt that there needs to be an interest element to draw people who are new to the community to the downtown. The Taskforce is looking at where they are today, and how to come up with a plan. Community Development Director Scott Clark explained that the next step in the process will include inviting a speaker to review the history of the downtown, a developer, and an expert in river development. He stated that the Taskforce will conduct a visioning exercise from a land use perspective in Febnrary. He felt that downtown Elk River has to be a place not of necessity, but of interest to connect people, and also be economically feasible. 8. Other Business -None 9. Adiournment There being no other business, PRESIDENT GONGOLL ADJOURNED THE MEETING. The meeting of the Elk River Economic Development Authority adjourned at 6:05 p.m. Submitted by: .~ - Recording Secretary