02-10-1997 EDA MIN MEETING OF THE ELK RIVER
ECONOMIC DEVELOPMENT AUTHORITY
HELD AT THE ELK RIVER CITY HALL
MONDAY FEBRUARY 10, 1997
Members Present: President Dwyer, Commissioners Holmgren, Farber, Thompson,
Duitsman, Gongoll and Bender
Members Absent: None
Staff Present: Paul Steinman, Executive Director; and Debbie Kleckner,
Recording Secretary
1. 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 6:00 p.m. by President Dwyer.
2. Consider Agenda
COMMISSIONER FARBER MOVED TO APPROVE THE FEBRUARY 10, 1997 EDA
AGENDA. COMMISSIONER BENDER SECONDED THE MOTION. THE MOTION CARRIED
7-0.
5 3. Consider Consent Agenda
COMMISSIONER BENDER MOVED TO APPROVE THE CONSENT AGENDA AS FOLLOWS:
3.1 CHECK REGISTER - APPROVED
3.1 JANUARY 13, 1997 EDA MINUTES - APPROVED
3.2. JANUARY 21, 1997 SPECIAL EDA MEETING MINUTES - APPROVED
COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0.
4. Open Mike
No one appeared for this item.
5. Micro Loan Request- Eastey Enterprises
Paul Steinman introduced Jeff Eastey and Sally Johnson of Eastey and Johnson,
Inc. Eastey and Johnson are requesting a $50,000 loan to finance improvements
for a building they recently purchased in Rail 10 Industrial Park (former Osseo
Brake building). The EDA Finance Committee has recommended approval of the
loan for a term of five years at a fixed interest rate of 8.25 percent.
Jeff Eastey stated they are outgrowing their facility in Rogers and plan to move
the assembly portion of the business to the Elk River. Eventually they hope to
• move the machining process here, as well. Mr. Eastey explained the company
manufactures shrink-wrapping and bundling equipment. He stated there will be
EDA Meeting Minutes
February 10, 1997
Page 2
• 3 new employees at the Elk River location in addition to 17 employees who will be
moved from Rogers.
COMMISSIONER BENDER MOVED THE EDA APPROVE THE LOAN REQUEST BY EASTEY
AND JOHNSON, INC. IN THE AMOUNT OF $50,000. COMMISSIONER HOLMGREN
SECONDED THE MOTION. THE MOTION CARRIED 7-0.
6. Discuss Business Incubator Project
Paul Steinman reviewed issues associated with proposed Business Incubator
project as follows:
Lease
The EDA will lease approximately 13,186 square feet, of which 11,072
square feet is leasable and 2,114 square feet is common area. The base
rent is $19,779 ($1.50 per sq. ft. x 13,186), for a term of 2 years (April 1, 1997
to March 31, 1999). The EDA proposes the possibility of extending the term
by six years. Paul noted he would expect only a minimal increase in the
base rent for each additional two year lease period (approximately 10-
15%).
Sublease
Paul explained that the sub-lease incorporates all of the responsibilities of
the EDA primary lease. The base rent will be negotiated individually with
each tenant, and sub-leases will not be longer than the term of the EDA
• primary lease or additional renewal terms.
Memorandum of Understanding
This document describes details of the companies' participation in the
Business Incubator program.
Paul reviewed financial projections for the Business Incubator as outlined in his
report. Discussion followed regarding leasehold improvements and associated
costs. Paul noted Larry Hickman has indicated he will pay for the leasehold
improvements up front, but would require the EDA to reimburse him prior to
occupancy. If the EDA were to vacate the space in two years, Mr. Hickman
would reimburse the EDA for the improvements based upon a seven year
depreciation schedule.
Paul reviewed the requirements for use of the CDBG dollars related to job
creation and retention.
COMMISSIONER DUITSMAN MOVED TO APPROVE THE BUSINESS INCUBATOR
CONCEPTS PROPOSED BY THE ECONOMIC DEVELOPMENT EXECUTIVE DIRECTOR AS
PRESENTED IN HIS REPORT TO THE EDA DATED FEBRUARY 6, 1997. COMMISSIONER
HOLMGREN SECONDED THE MOTION.
In response to Commissioner Bender's questions, Paul explained that the EDA's
commitment could be a maximum of$85,000. All the space will be finished off at
once for economic reasons, and if a tenant requires more than one bay, two
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could be combined.
EDA Meeting Minutes
February 10, 1997
Page 3
• Commissioner Bender asked Paul to negotiate the lease rate for the additional 4
years with Mr. Hickman, if the EDA were to continue the lease at the end of the
initial two year period.
THE MOTION CARRIED 7-0.
Paul stated he will attempt to schedule additional product presentations with
potential business incubator tenants.
7. Prospect Report/Activity Update
Paul reviewed the prospect report and activity update with the EDA
Commissioners.
8. Other Business
-Paul noted the Business Retention survey referred to on the update is being
partnered with Sherburne County Economic Development Alliance (SCEDA).
Paul will be attending the SCEDA meetings. Also, he has provided names of all
the local manufacturers to Michael Darger, Sherburne County Economic
Development Coordinator.
-Chair Dwyer requested information be provided for the next EDA meeting
regarding structuring and recommendations for appointments to the proposed
Business Incubator Advisory Council.
• -Paul suggested the EDA may wish to consider purchasing the one remaining 2.4
acre lot in the Elk River Industrial Park. Chair Dwyer noted that city sewer and
water is available to the site. It was the consensus of the EDA Commissioners for
staff to contact the landowner to further investigate the possibility. Commissioner
Bender stated he felt the EDA should wait to make any decisions until the
Strategic Plan has been presented to the City Council.
9. Adjournment
There being no further business, COMMISSIONER BENDER MOVED TO ADJOURN THE
MEETING. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION
CARRIED 7-0.
The meeting of the Elk River Economic Development Authority adjourned at 6:50 p.m.
Re ctfully submitted,
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Debbie Kleckner
Recording Secretary
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