3.1 EDSR 11-17-2014 DRAFT MINUTES � s Q � �
ElkMeeting of the Elk River
River Economic Development Authority
Held at the Elk River City Hall
Monday, October 20, 2014
Members Present: President Tveite, Commissioners Burandt, Dwyer,Westgaard,
Wilson, and Motin
Members Absent: Commissioner Provo
Staff Present: Deputy Director, Community Operations and Development Jeremy
Barnhart, Economic Development Specialist Colleen Eddy, and
Recording Secretary Jennifer Johnson
I. Call Meeting to Order
Pursuant to due call and notice thereof, the meeting of the Elk River Economic
Development Authority was called to order at 5:30 p.m. by President Tveite.
2. Consider 10/20/2014 Agenda
President Tveite added Item 6.4-Subordination Agreement.
Moved by Commissioner Westgaard and seconded by Commissioner
Wilson to approve the October 20, 2014, agenda, with the addition of
item 6.4, Subordination Agreement.
Motion carried 6-0.
3. Consider Consent Agenda
Moved by Commissioner Motin and seconded by Commissioner
Dwyer to approve the following consent agenda:
3.1 EDA Minutes
• July 21, 2014, Workshop
• July 21, 2014, Regular
• September 15, 2014, Regular
3.2 Check Register as outlined in the staff report.
3.3 Balance Sheet as outlined in the staff report.
3.4 Revenue/Expenditure Report as outlined in the staff report.
3.5 Resolution #14-06 Authorizing the Transfer of$208,313.70 to
the City of Elk River Street Reserve Fund for Park Dedication
($166,306.02) and Surface Water Management ($42,007.68)
Funding for NEBC Development for the Natures Edge Business
Center Second Addition Funding Authorization as outlined in
the staff report.
Economic Development Authority Minutes Page 2
October 20,2014
3.6 Participation Agreement with Greater MSP for the Salesforce
Program as outlined in the staff report.
Motion carried 6-0.
4. Open Forum
No one appeared for Open Forum.
5.1 Stonesthrow Properties, LLC (Coin-Tainer) Tax Abatement and
Microloan Review
Mr. Barnhart presented the staff report. He stated the Finance Committee met earlier
that day to review Coin-Tainer's tax abatement and microloan application and
determined that the committee was not able to approve the application and were
requesting the applicant resubmit. The committee expressed concerns with
establishing a precedence allowing for 100% abatement for the existing building. Mr.
Barnhart explained that most of the abatements that have been approved were on
vacant land with no building on that land with the exception of The Bank of Elk
River (the city abated the tax increment difference between the value at that time and
the value that was being proposed in 2006,with a major addition).
Mr. Barnhart outlined the questions from the Finance Committee:
1) What are the future projections of both companies.
2) What is the absorption of the lease rates for the existing tenants on the property
and will any cash flow would be impacted.
3) There is concern with the contract for deed terms, and when the balloon
payment is due in 5 years how the permanent financing will impact cash flow.
4) The committee wanted a better understanding of the guarantees of the
microloan.
Mr. Barnhart stated the committee would have a better level of comfort to make a
decision after receiving answers to these questions. He requested the public hearing
be opened and either closed or continued to next month to allow staff time to work
with the applicant. He requested input from the EDA on the question of abatement
for an existing building and the comfort level in abating 100% of the value or a
portion of the increment.
Mikaela Huot from Springsted and the applicant, Dave Walters,were present to
answer questions.
President Tveite opened the public hearing. No one spoke. President Tveite left the
public hearing open during discussion.
Commissioner Motin asked for clarification regarding abatement of existing
buildings.
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Economic Development Authority Minutes Page 3
October 20,2014
Mr. Barnhart provided a handout with a summary of businesses that were abated
since 2004.
President Tveite asked if this would be setting a new precedence for what's been
done in the past. Mr. Barnhart noted that each application is different, and
precendentprecedent can be argued both ways.
Commissioner Wilson felt it would be best to refer back to Finance Committee to
review these issues and provide a recommendation at next month's EDA meeting
next month.
Commissioner Westgaard agreed.
Moved by Commissioner Wilson and seconded by Commissioner
Dwyer to continue the public hearing for Stonesthrow Properties,
LLC (Coin-Tainer) Tax Abatement and Microloan Review to
November 17, 2014.
Motion carried 6-0.
5.2 Sell a 1.31 Acre Portion of Northstar Business Park Lot I, Block I to
Scatman Holdings, LLC (Professional Service Bureau, PSB) to
Facilitate Parking Lot Construction
Mr. Barnhart presented the staff report.
President Tveite opened public hearing. There being no one present, he closed the
public hearing.
Commissioner Westgaard asked if the approval of the resolution covers the
contingency that final authorization comes from the City Council to be heard later
this evening.
Mr. Barnhart confirmed this.
Moved by Commissioner Westgaard and seconded by Commissioner
Motin to approve Resolution 14-07 Approving Conveyance of Real
Property of Lot I, Block I, Northstar Business Park, and Approve the
Purchase Agreement to Scatman Holdings, LLC (Professional Service
Bureau, PSB) to Facilitate Parking Lot Construction as outlined in the
staff report.
Motion carried 6-0.
6.1 Nominate an EDA Member to the Public Art Installation Judging
Panel
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Economic Development Authority Minutes Page 4
October 20,2014
Mr. Barnhart presented the staff report.
President Tveite nominated himself as a member of the public art installation judging
panel.
6.2 Authorize Appraisal for EDA Property
Mr. Barnhart presented the staff report.
Commissioner Dwyer stated he felt the appraisal cost of$5,000 seemed high and felt
it was twice what he would expect to pay for an appraisal.
Mr. Barnhart stated he estimated high to present a worst-case scenario; the cost of a
previous appraisal he recently received was $3400.
President Tveite asked how quickly this property would be able to be on the market.
Mr. Barnhart stated as soon as the appraisal was completed,probably by early spring.
Moved by Commissioner Motin and seconded by Commissioner
Westgaard to Authorize an Appraisal of EDA Property for Natures
Edge Business Center Second Addition and Fox Haven Commercial as
outlined in the staff report.
Motion carried 6-0.
6.3 Consider Support for County Broadband Initiative
Mr. Barnhart presented the staff report.
Moved by Commissioner Dwyer and seconded by Commissioner
Wilson to Approve Resolution 14-08 in support of the City of Elk River
Economic Development Authority Participating in the Establishment
of a Blandin Broadband Community as outlined in the staff report.
Motion carried 6-0.
6.4 Preferred Powder Coating Microloan Subordination Agreement
Mr. Barnhart explained when the Preferred Powder Coating Microloan and
Forgivable loan was approved in 2013,2013;the subordination agreement
documentation was never signed and recorded. Staff is asking for authorization to
have the EDA approve and sign two agreements, one for the $100,000 Industrial
Incentive Microloan, and the other for the $200,000 Forgivable Loan.
President Tveite stated this is a very common practice that the EDA take a
subordinate position to the primary lender and this was a case of missed paperwork.
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Economic Development Authority Minutes Page 5
October 20,2014
Moved by Commissioner Wilson and seconded by Commissioner
Westgaard to Approve Authorization of Signing the Microloan
Subordination Agreements between the City of Elk River Economic
Development Authority and Preferred Powder Coating.
Motion carriedApproved 6-0.
7.1 Sweet P's Update
Mr. Barnhart stated Sweet P's owed one final outstanding payment of$1400 which
has been due since April 2014. He asked the EDA if staff should continue to try and
recover this outstanding payment.
Commissioner Dwyer stated because it's consider taxpayer money and staff should
do whatever they can to try and recover the final payment.
It was the consensus of the EDA to have the Finance Committee to determine a
plan to recover the final payment.
8. Adjournment
There being no further business, Chair Tveite adjourned the meeting of the Elk
River Economic Development Authority at 6:14 p.m.
Minutes prepared by Jennifer Johnson
Dan Tveite, EDA President
Tina Allard, City Clerk
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