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EDSR MEMORANDUM 05-12-1997 ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY • MEMORANDUM TO: Economic Development Authority iFROM: Paul T. Steinman, Director of Economic Development DATE: May 8, 1997 SUBJECT: Agenda Memo for May 12, 1997, Meeting 5. Business Center Foreclosure As described on the attachment to this memo, a majority of property identified as the Country Crossing Business Center is being foreclosed upon. The Sheriffs sale for this property is scheduled to occur on Thursday, May 22, 1997, at 10 a.m. • After discussion with the attorney representing the mortgagee, the property will proceed through the following steps prior to becoming free and clear of back taxes/assessments, liens, and other mortgages which may have been placed on the property: • Sheriff sale on May 22 • Six month redemption period during which the mortgagor can redeem by paying all outstanding debts against the property. Essentially, the legal representative indicated the property would be unsaleable until the end of the redemption period which will be approximately November, 1997. At present there are no industrial users who have indicated a desire for this property, however, if there were, we would be directing them toward the Gagne property due to this current foreclosure situation. Staff has had discussions with other EDA members and intends to meet with the owners of this property after the Sheriffs sale has been completed to begin working out a cooperative marketing agreement. Given the time frame identified above, this agreement would be able to take effect in November, at the end of the six month redemption • period. 13065 Orono Parkway • P. O. Box 490 • Elk River, MN 55330-1743 • (612) 441-7420 • Fax (612) 441-7425 Equal Opportunity Housing and Equal Opportunity Employment It also appears the petition for improvements out to the County property have stalled. The improvements would open up approximately 18 acres of Gagne property. It is staffs intention to meet with Mr. Gagne to discuss the same type of cooperative agreement which might be undertaken with the new owners of the Country Crossing Business Center. Unfortunately all of this makes it more difficult to locate an industrial user in the West Business Park. For most prospects, it would be unlikely to assume they would wait for the city to complete construction of the improvements in order to facilitate their project. Prospects for the West Business Park property have been relatively slim over the past several months so these issues haven't become a great concern at this point. It appears there has been a significantly higher level of interest in the one remaining lot in the Industrial Park than there has been in any land in the West Business Park. 6. Industrial Park Lot Staff has researched issues regarding the EDA's potential purchase of this last Industrial Park lot. It appears that the price would be significantly lower than the current listing price of$90,000. Staff ID would propose a modification of the Alltool tax increment district if the EDA wished to pursue purchase of this lot. The Alltool TIF district will have approximately $170,000 available in it at the end of 1997. Since this district was created prior to 1990, it appears that a simple budget modification would allow the EDA to use these funds elsewhere to accommodate economic development projects. There is a bill pending in the legislature however, that states any expenditure of funds over $50,000 would need to meet the but-for analysis in order to qualify. This would disqualify the EDA's use of these funds to purchase the Industrial Park lot unless a business was prepared to commit to completing a construction project on the site. These TIF funds, or a portion of these funds, could also be used in the West Business Park for various eligible activities. 7. Energy City Update The Minnesota Environmental Initiative recently hired Sara Coppock to, in part, undertake activities associated with Energy City. Ms. Coppock and city staff determined this meeting would provide a good Ak opportunity to update the EDA (which also acts as the Energy City Economic Development Subcommittee) on the various activities of the . subcommittees: • Marketing Subcommittee • Demonstration Subcommittee • Energy Use Subcommittee Although the EDA, acting as the Energy City Economic Development Subcommittee, has not taken a real high profile role in this process as yet, economic development staff has been working closely with the Marketing Committee to help establish a direction for the overall Energy City program. Once this groundwork has been established and implemented, I feel it will provide the positive effect which the EDA is anticipating from this program. Implementation of the marketing plan will also signal the start of what is likely to become a higher profile Economic Development Subcommittee. It has been somewhat difficult to this point to use Energy City as a marketing tool because of the lack of a marketing plan. Now that that plan will soon be implemented it will hopefully help to provide energy related industrial/business prospects, which is a primary goal of the EDA through this program. 8. Marketing Video The purpose of this agenda item is to provide an opportunity to view the six minute marketing video which was put together several years ago to see if there might be the need to update the video at this time. Staff circulated approximately 25 copies of this video to various prospects this past year. Some are kept by industrial brokers for future use and others are returned to the city as requested by staff.