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7.2. EDSR 08-19-2002 Item f 7.2. • Elk ..r•. River MEMORANDUM TO: Economic Development Authority FROM: Catherine Mehelich, Director of Economic Developmen /, DATE: August 19, 2002 SUBJECT: Resolution Regarding EDA Levy Attachment * Resolution Establishing the.Tax Levy for the Elk River EDA for year 2003 • Issue As in previous years, the EDA requests that the City Council levy the maximum amount for economic development in the year 2003. The City must certify its proposed maximum levy, including EDA and HRA levies, to Sherburne County by September 17,2002. Recommendation Staff is recommending the EDA approve the resolution establishing the tax levy for the Elk River Economic Development Authority and requesting that the City Council of the City of Elk River levy a tax in the amount of.01813 percent of the taxable market value in the city for the year 2003 for the benefit of the Authority to be used for Economic Development Authority purposes as provided by the statute. 110 RESOLUTION 02 - • A RESOLUTION OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY A RESOLUTION ESTABLISHING THE TAX LEVY FOR THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF ELK RIVER, MINNESOTA WHEREAS, Minnesota Statutes, Section 469.107, Subdivision 1, authorizes the Economic Development Authority to levy an amount not to exceed .01813 percent of the taxable market value in the city to fund the Authority's anticipated budget needs for the fiscal year 2003;and, WHEREAS, the Elk River Economic Development Authority will adopt and approve its budget and will forward such to the City of Elk River pursuant to Minnesota Statutes, Section 469.100, Subdivision 2. NOW,THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Elk River,Minnesota, that it hereby requests the City Council of the City of Elk River to levy a tax in the amount of.01813 percent of the taxable market value in the city for the year 2003 for the benefit of the Authority to be used for Economic • Development Authority purposes as provided by the statute. Passed and adopted by the Elk River Economic Development Authority this 19th day of August,2002. Jeff Gongoll,President ATTEST: Catherine Mehelich, Executive Director • • City of Elk River MEMORANDUM TO: Mayor & City Council CC: Economic Development Authority FROM: Catherine Mehelich, Director of Economic Developme DATE: August 19, 2002 SUBJECT: Consider Property Tax Abatement for Elk Path, LLC Professional Office Building Project Background The City Council held a public hearing on June 10,2002 regarding the Tax Rebate Financing (tax abatement) application by Elk Path,LLC for the construction of a professional office building. Following the public hearing the City Council held a joint meeting on June 24, 2002 with the Economic Development Authority to discuss policy issues related to the use of tax rebate financing for office developments. It was the consensus of the Council and EDA that the Elk Path,LLC project be evaluated based on the city's amended Tax Rebate Financing policy. Analysis & Recommendation The proposed Elk Path,LLC professional office building project does not meet the city's new minimum requirement for 50% of the available office space to be pre-leased. Since the Elk Path LLC project, as proposed, does not meet the minimum requirement staff recommends the application be denied. The project may be reconsidered once 50% of the space is pre-leased, or the project scope is revised. • S:\Eda\TAXABA 1'E\E1kPathLLC\8-19-02.doc August 16,2002 THE BUSINESS JOURNAL I twincities.bizjournals.com 9 ro JLT G p utakes "or! y stake in tech startup HiddenMiund .. St. Paul-based JLT Group trouble attracting new invest- speeds the digital transfers of large images .. Inc., the real-estate and ment when the tech market online. Prolatus says its technology helps M��••• investment companybacked �.J fell apart. Like many institu- shorten the time needed to polish and color �' Finn:HiddenMind Inc. . by Jerry Trooien, has taken * tional investors viewing their correct large picture files,which often are sent City Gary,N.G. over as the majority owner of a portfolios with new skepti- back and forth between a company and its Top official:Ken Walters,CEO North Carolina-based wire cism,Warburg decided not to production house. Business:Wireless access to business software less-technology firm with a put more money into the ven- When the company expanded internation Founded:1999 $10 million recapitalization ture when HiddenMind ally earlier this year with an office in Leeds ,°: Employees:65 deal. . sought new financing this England, it expected to generate business I Web site;www.hiddenmind:corn JLT Group and Trooien had spring. Trooien, though, kept mostly from the United Kingdom, said Tom previously invested about$6.5 k '' his hand in and said he'd fund Stallings,director of marketing for Prolatus In Firm:Prolatus Inc; million in HiddenMind Inc.of ,,,,,._,,,,..,S;;,.;,!•,' a„,, t the company going forward, fact, half the customers came from other s' City:Golden Valley Cary,which is located in North In Private Kenneth Tyra said. countries. ;Fop official' Hoekstra ” Carolina's Research Triangle "We were fortunate to have To take advantage of that interest,Prolatus Business:Pre-production printing software Park area. The new round of Mark Reilly a committed investor," said is considering distribution and sales partnerFounded:1999 funding, made after Senior reporter Tyra, chairman of ships in such markets as Australia, though it i+Web site:www.prolatus.corn HiddenMind's institutional w= HiddenMind and now the might not establish actual sales offices. '' investors decided to bail out, president of JLT Group. "Because we're primarily a software company l Firm:Bixby Energy Systems;Inc. effectively restarts the tech firm as a new corn- He said HiddenMind was reformed as a lim- people can just download our product and J;City:Elk River pany,with JIT as the dominant shareholder ited liability company for tax reasons;Trooien install it,"Stallings said. a Top official:Robert Walker Founded in 1999, HiddenMind integrates will be able to treat some of his investment as , Business_Biomass-burning'stoves and heaters standard business software applications into a passive loss. ,Bixby Energy targeting$2.25M for biomass stove i Founded 1999 wireless devices,letting a user access compa- Tyra said he's confident in HiddenMind's ' Bixby Energy Systems Inc.,which has devel Web site:www.bixbyenergy.cam ny databases and the like on a handheld corn- prospects, noting that the company has oped a highly efficient heating stove that puter.Customers include General Electric and begun to see some evidence of renewed tech- burns biomass materials (also see page 14) is , . St.Jude Medical Inc. nology spending by corporations."It's certain- working to finish off its latest round of fund- The company was founded by networking ly not a big increase,but it's in the right direc- ing. But Robert Walker, Bixby's CEO and the consultant Kristopher Tyra and his brother, tion,"he said. The Elk River company hopes to raise founder of Select Comfort Corp., is aiming Kenneth, formerly an attorney with roughly$2.25 million from investors. higher.The company plans to introduce a line Minneapolis-based Dorsey&Whitney.At the Prolatus thinking global after UK office success The funding will help Bixby continue to of fuel pellets made from other biomass types law firm, Kenneth Tyra had advised Trooien Imaging software firm Prolatus Inc.is work- develop its concept of a biomass-fueled heat- —cranberry stems, grape leaves, etc.—and on several real estate deals. When Trooien ing to build a global presence after scoring an ing-and-energy system. The company's first develop burners that will power water heaters heard about the startup,he decided to invest unexpected hit with its first foreign office in model, the size of a typical wood-burning or even air conditioners. in an early round. the United Kingdom earlier this year. stove, bums dry shelled corn at a more effi- HiddenMind later raised $25 million from The Golden Valley company, formerly cient rate than either wood stoves or other mreilly@biijoumals.com}(612)288-2110 New York-based Warburg Pincus, but had known as Colorcentric, sells software that biomass burners. $� La Set i �,• ?• 2ad .�;x aay , ,.. f .e r ttre": , Some banks � ,a a .E \ s ��aa . � , ; i r% t y ti k4d \�rftay \�. t& ;fi, F \ �, a � �wr a� Sp'�� s•ay face-to-face a; r �, r I interaction 1's t®® tk _- e. 7 4d-, r cO,, costlymaintain. .,..ier .,..,,, ,,,,t,„...1.?_,..,.7.1,„,,,,w,„. .. ,:4, ,. , ... .,,. ,.,: :,.:,,,;,.i,,...,.. ,. -_,4,1„,,i,4,,,,:i,,,,,,..,..1:i.,,,z,,c,,„, , ,,,,„,,. .,404,,., ,, \ Tesay its priceless .,.,,. .,,,,.„ , .. .. ,.i. .:.,...„,,, .„,... _ ....„:„ ,.,,,:.„ :.:„....,. .:,.:....,.„,...,,,,,,, , ,,,,,. t,..., , .. .....,,:„ ._ .:„ „.„,"„:441,0. A,,,..?4-,43-trr,04.ft.,,,-,.. `'.. ''P.-7;-W.,, Iti,. .. ... .',,r,•,•,.,‘: . --, -- w 11 You can see the difference at Voyager Bank a 1'w , # H" in our faces.You'll see someone ready and �^ ..''', ''' i : willing to help.You'll find people that work with you and products that work for you. ..,i ,v x If it's been a while since you encountered ki'. fl `" if „ a cheerful,positive attitude in a bank, ' . 1 maybe it's time for a different bank. ` . . 11110 ., . ., ...... ...„,, ,__ . ., .,...V.r,-,...IIt.,••'..I.,..I.,...I..r.I....I,..W.I.a".,,..-Sr,...154,W.,....I., ,dI.r.,,A,'•-A`.....—4,,,,,,,,,ES,,,,,,,..0....-.....,........5.....TY7.9.....S.W.0.......1......943.54 14 ilivewitors axid W I I, OIC THE BUSINESS JOURNAL I twincities.bizjoumals.com August 16,2002 Inventions reflect innovation, • patience, even humor ; power to cool rather than heat,"said Walker. Patent office spokeswoman Brigid Quinn said it is against office policy to discuss patent merits. Sa : } 4 , mreilly@IViumals.com I(612)288-2110 Local patent attorneys also were hesitant to """�" a -. discuss this particular patent,not wanting to -� -- '` upset officials at the USPTO. t�k � s Childhood lesson teaches patent issues "The office needs to be a little more careful : � BY JIM MARTYKA in how they do their work," said one local CONTRIBUTING WRITER patent attorney who asked to remain anony- E' ` ,k ,�. .�� 5 Warning to little children on playgrounds mous."Patents like this make for a pretty big �� p , everywhere:when playing on a swing set,do egg in the face." ik not swing side to side.That method of swing- Still, Olson said the process was satisfying g ing has been patented.,,, ,,,i‘l because it helped teach his son about patents. w , . -;' a" Really.What started as a parent/child lesson And the patent language shows this was a : ` ,„ s y x -. s , in the patent meant to be as fun as swinging itself. ,�.r „ � , ,i -5,1,t. process has "p "The swinging method of the present inven- x , :t I 4 ., ', resulted in �� tion may be referred to by the present inventor k x " s ' :, patent and his sister as'Tarzan'swinging,"the patent .:.-44.1-1.-,--.A-:.,°,..-2.: '°7i, 6,368,227 for reads."The user may even choose to produce ,� , f ,.- , 4 ,s 6-year-old St. _ — a Tarzan-type yell while swinging in the man ` 1* Paul native ner described, which more accurately repli Steven Olson, cates swinging on vines in a dense jungle for- x ,,-- • . i est.Actual jungle forestry is not required." k -y o I METHOD Q1011111NGING � 'Qi i. A k ON A SWING Ten-year process pays off si �' . Descri tion:A method of swinging side to side in Sometimes the right packaging requires p 0 g g P g g q �',' -; z� ' M which the user pulls alternately on one chain and patience. ��>t.. �, y then'the other. Henry"Buck"Huot Jr.of St.Paul based Huot �._ :° 1 j Patent holder:Steven Olson,age 6,St.Paul Manufacturing, spent the better part of the 4. Patent granted:April 2002 '90s designing packaging for drill bits—pack- „tet - ~' aging that would eliminate several protective *�k ”' layers that can be costly and damaging to the - ,, ; , relating to"a method of swinging on a swing. environment.He has spent the last s ;, The boy's father,Peter Olson,said children two years attempting to . - _.".u:`._r ` �` ; ''''" 3° ''''.2 -- '-' i I should rest assured that his family won't be patent the product, £ � r DIANA WAITERS I THE BUSINESS JOURNAL enforcing the patent.However,other industry dubbed Securitab,which .� 1 ' Robert Walker became interested in the Bixby heater when energy prices rose. officials said as humorous as this story is, it he said will change how ;! , , could set a dangerous precedent. his company does BY MARK REILLY "It was simply a matter of teaching my son a business.Just this pasts SENIOR REPORTER , = BIOMASS-BURNING little about the process and it made it ,L Two innovators are spearheading a push to ; SPACE HEATER through," said Olson, a patent attorney for t build a market for home-scale biomass stoves : Description:Biomass-burning space heater,us- Maplewood-based 3M Co."I cant believe the & SECURITAB that burn shelled corn waste for energy. 1 ing a mechanism that regulates flow of oxygen. attention it has drawn and not all positive." 1 Description:A hard,one-layer reusable plastic The company, Bixby Energy Systems Inc., fi Also developing biomass"pellets"for fuel. For that reason,the elder Olson is hesitant 1 packaging case with a locking tab rolled out its first product, a moderate-sized ° Inventor:Marion Mast to talk about the experience.However,he has J Patent holder:Henry Huot Jr.,president of Huot space heater, last fall.Officials plan to build -t Patent granted:pending said in previous articles that he was extremely Manufacturing ilarger units that could generate electricity and Company:Bixby Energy Systems Inc. , surprised that the idea made it through the ; Patent granted:Summer 2001 heat water for homes — all at a lower cost - Top executive:Robert Walker,CEO patent process,and at not too high of a price. 1 Customers:The manufacturing industry(also than conventional energy. I Price:$2795 The whole process ended up costing only I" working on variations to be applied to medical, Other corn-burning stoves have been l 4 about$1,000,and the family only saw the idea 1 electronics and retail industries), unveiled,but Bixby's stoves include a propri- rejected once. Patent experts said a patent 1 Cost:Varies with each agreement.Huot its licens- etary technology that regulates oxygen intake Corp., Plymouth. The Bixby partners share request, especially for a method, can some- t ing the product,and each deal is negotiable. and yields roughly 25 percent more energy rights to the biomass-burning space heater, times take years and end up costing thou- 1 Factors such as quantity,type and even color de- with the same amount of fuel, officials said. for which a patent is still pending. sands in fees. termine cost. They also hope to broaden the technology to The leap from air-filled bed to corn-fed The patent itself is for a method of swinging other forms of biomass. stove may seem a large one, but Walker said that involves the user alternately pulling back "There have been corn-burning stoves the two companies share many elements: and forth on the chains of a swing so that it ,, j. =i before,but they were so uneconomical [that] Both took an existing idea and refined it with swings side to side, instead of, or in ,t,;f v4' i year , they only made sense if you were an environ- technology then aimed the products at a larg- addition to, going backward and for- ,},'i`'t 4 t,8 ' ` t- Securitab mentalist," said co-founder Robert Walker, er market. ward.The patent is quite unique,often !i e`t- 4 i�4 , received "Ours makes economic sense to operate." Walker saw Mast demonstrate a concept ver- filled with humorous language and } ,, ' ' �t p a t e n t Corn provides one of the lowest-cost fuels sion of the stove in 1999,then watched as ener- detailed descriptions on methods of � � \ approval per BTU(British Thermal Unit),according to gy prices skyrocketed during the next winter. swinging,which"although of consider- t_ i • a n d the U.S.Department of Agriculture. He decided that a biomass stove would appeal able interest to some people, can lose - became a registered According to a report by trade magazine to consumers tired of high energy costs. their appeal with age and experience." trademark. Hearth&Home,quoted byWalker,to generate 1 Using the current generation of heater as a Not everybody finds it humorous,however. "It was a lengthy process, difficult and million BTUs of heat,it takes more than$26 of foundation, Walker plans to build Bixby by When the patent was granted in April, intel- expensive, but it was rewarding," said Huot, electricity, $11 of natural gas, or$6 of shelled marketing special biomass fuel pellets. The lectual property experts blasted it and the U.S. president of the 76-year-old, family-owned corn. company has been working with the Patent and Trademark Office,saying it showed company,which manufactures storage units The company, based in Elk River, is the Agricultural Utilization Research Institute to how overworked the patent office had for cutting tools."We're already getting posi- product of years of research by engineer develop the pellets, which are made from a become. The patent office, which patent five feedback on the product,and we're look- Marion Mast of Bixby,who hit on the current variety of biomass material. attorneys have for years described as under- ing forward to seeing what it will do for the design in 1996. "We're even building an air-conditioning unit funded and understaffed, issues more than company's future." Mast found a business partner who shared for the southeast, using extra heat to power a 187,000 patents a year.The less staff,the less Securitab is a one-layer packing system for his vision in Walker,founder of Select Comfort compressor ... we spend more on generating likely patents such as this are challenged. INVENTORS PAGE 20