7. EDSR 09-16-2013 Elk Request for Action
River
To Item Number
Economic Development Authority 7.
Agenda Section Meeting Date Prepared by
Other Business October 7, 2013 Brian Beeman, Director of Economic
Development
Item Description Reviewed by
Project Updates Jeremy Barnhart, Deputy Director, CODD
Reviewed by
Action Requested
None
Background/Discussion
The purpose of this report is to provide an update on the Economic Development Division's ongoing
projects of interest to the EDA.
Professional Services Bureau (PSB) Land Purchase
Staff is exploring the possibility of utilizing tax abatement to assist with funding of the purchase of the
building and land and the development of a parking lot for PSB. Staff has contacted both PSB and Mr.
Pat Briggs. Staff was instructed to coordinate all efforts through Mr. Briggs. A conference call was held
with Staff,Mr. Briggs, Springsted, and the EDA attorney to review the tax abatement process. Mr. Briggs
will review the material then decide if he will submit a formal tax abatement application. Staff is waiting
for a response from Mr. Briggs in order to continue discussions about the tax abatement possibility.
PPC TIF and Land Sale
Final documents are being drafted. We are waiting for the SBA loan application to go through,which
should take about 8 to 10 days. If everything goes through as planned, construction will commence once
the documents are signed and the money has been transferred.
Ralphie's Victory Lane
Staff completed the loan closing September 10, 2013.
Orluck Industries
Staff is working with the attorney to draft closing documents. It is anticipated that closing will occur mid-
October.
Sweet P's Microloan
Sweet P's microloan was recently in default. Staff had made several attempts to communicate and meet
with the owner. The owner recently paid the City his past due payments. However, the client has missed
his next payment which,was due September 4, 2013.
FMMEAES IT
NATURE
The Bank of Elk River— Business Subsidy job Goals
In 2006 The Bank of Elk River was provided a tax abatement for renovation of its existing facility and
the construction of an approximately 20,000 square foot expansion.As part of the Tax Abatement and
Business Subsidy Agreement between the City and the Bank of Elk River, certain job goals were outlined
which, falls under the Business Subsidy Law,Minnesota Statutes, Section 116J.993 through 1161995.
Those job goals have not been met. The EDA allowed two extensions due to extenuating circumstances
caused by a weak economy and reorganization.The last extension expires September 2013. EDA staff
has contacted the State to determine the next course of action.The State is of the understanding that no
further extensions are allowed, and it is questionable whether the Tax Abatement and Business Subsidy
Agreement can be amended. The EDA attorney is researching this possibility. However,preliminary
research has determined that amending the agreement to revise the wage and job goals is not specifically
authorized under the statute.A notice has been drafted to the Bank of Elk River as per the agreement. If
the Bank of Elk River is not allowed to receive another extension and if the agreement cannot be
amended, then the bank would be forced by statue and per the agreement to pay back a portion of the
tax abatement with interest. That portion will be determined as soon as staff has heard back from the
attorney and the state on the next course of action. Staff plans to have a recommendation ready for the
October EDA meeting.
Assistant Director of Economic Development Position
Recently, Clay Wilfahrt accepted a position as a City Administrator in Winsted,MN. Since that time, staff
conducted interviews for an EDA Marketing Intern. One candidate rose to the top and that person is
being recommended at the September 16, 2013 City Council meeting to be hired for 32 hours per week
until Dec 31, 2013. Due to time spent on various projects and the time needed to train the new intern,
job application materials for the Assistant Director of Economic Development has been delayed. Staff
will continue to update the application materials and seek Council approval once the documents are
ready. The intern will be assisting the Director in preparing for the Minnesota Commercial Association of
Realtors (MNCAR) Expo,Realtor's Day,Manufacturer's week and tours, and a variety of other
marketing efforts.
Updated Bylaws
Staff would like to remind the EDA Members to sign the updated bylaws following this meeting.
Financial Impact
N/A
Attachments
• N/A
N:\Departments\Community Development\Economic Development\EDA\Adminstrative\Agenda\Agenda\Year2013\9-16-2013\7 Project
Updates.docx