10-20-2014 EDA MINMembers Present:
NI ernbers .Absent:
Meeting of the Elk River
Econ IM' -mic D eve I o
Held at the Elk River City Hall
Monday, October 20, 2014
])resident Tvelte, C orni-nis sio tiers Burandt, Dwyer, Westgaard,
Wilson, and Mottil
Comn-ussioner Provo
Staff Present: Deputy Director, Community Operations and Development jeremy
Barnhart, and Recording Secretary Jennifer Johnson
Call Meeting to Order
Pursuant to due call and notice thereof, the niceting of the Elk River Economic
Development A uthority was called to order at 5:30 p.m, by President'Ivelte.
2. Consider 10/2012014 Agenda
President Tv eite added Item 6.4 — Subordination Agreernent.
Moved by Commissioner Westgaard and seconded by Commissioner
W I :
ilson to approve the October 20, 2014, agenda, with the addition of
item 6.4, Subordination Agreement.
3. Consider Consent Agend3,,
Economic Development Authority Minutes Page 2
October 20, 2014
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No one appeared for Open Forum.
5.1 Stonesthrow Properties, LLC (Coin-Tainer) Tax Abatement arL1,
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 1111"croloan application and
determined that the corruTintee was not able to approve the application and were
requesting the applicant resubmit. The committee expressed concerns with
establishing; a precedence allowitig for 1 00"/o 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
nucroloan.
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 EDP on the question of abatement
for an existing building and the comfort level an 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 Tvelte opened the public hearing. No one spoke. President] I veite left the
public hearing open during discussion.
Commissioner Motin asked for clarification regarding abatement of existing
buildings.
Mr. Barnhart provided a handout with a summary of businesses that were abated
since 2004.
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October 20, 2014
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President Tirelte asked if this w(.:)uld be setting a new precedence for what's been
done in the past, Mr. Barnhart noted that each application is different, and precedent
can be argued both ways.
Commissioner Wilson felt it would be best to refer back to Fniance Committee to
review these issues and provide to recon-irnendation at next month's 171DA rneeting
next month.
C 01-1-1missioner Westgaard agreed,
Moved by Commissioner Wilson and seconded by Commissione
Dwyer to continue the public hearing for Stonesthrow Propertiel
LLC (Coin-Tainer) Tax Abatement and Microloan Review to
,November 17, 20 14.
Sell a 1.3 1 Acre Portion of Northstar Business Park Lot I Block I A
Scatman Holdings, LLC (Professional Service Bureau,
Facilitate Parking Lot Construction
-Mr. Barnhart presented the staff report.
Presiderit'I'veite opened public hearing.]-here 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 confirtned this,
6.1 Nominate an EDA Member to the Public Art Installation Judgi
Panel I
Mr. Barnhart presented the staff report.
]'resident lVerte not-lu'liated hil-riself as a rnernber of the public art installation judging
panel.
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October 20, 2014
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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 I'velte 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.
J%oved by Commissioner Motin and seconded by Commissioner
Westgaard to Authorize an Appraisal of EDA Property for Natureis
Edge Business Center Second Addition and Fox Haven Commercial as
outlined in the staff report.
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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 Bla III, in Broadband Community as outlined in the staff report.
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. Mr. Barnhart explained when the Preferred Powdei Coating Microloan and
Forgivable loan was approved in 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 tender and this was a case of missed paperwork.
Moved by Commissioner Wilson and seconded by Commissioner
Westgaard to Approve Authorization • Signing the Microloan
Subordination Agreements between the City of Elk River Economi'v
Development Authority and Preferred Powder Coating.
Econornk Dcvdopmeru,Wt11Or11-�' NfillUtCS Page 5
October 20, 2014
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Motion carried 6-0,.
7.1 Sweet P's Updatz
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 oLit-standing payment.
Comn-iissioner Dwyer stated because it's consider taxpayer money and staff should
do whatever they can to try anti recover the final payn-
ient.
It was the consensus of the UDA to have the Finance Committee to determine a
plan to recover the final payment.
There being no further business, Chair'I'veitc adjourned the meeting of the Elk
Riverl"',conornic Development Authority at 6:14 p,m.
Minutes prepared by Jennifer Johnson
D'an,'l'veite, EDA President
J,
Tula Allard, City Clerk
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