12-08-2015 JFC MIN :- ':4 a
ElkMeeting of the Elk River EDA Finance Committee .
River _-Held at the Elk River City Hall
Tuesday, December 8,2015
Members Present: Paul Motin, Nate Ovall,Larry Toth, Dan Tveite,Jennifer Wagner,Ryan
Hardin and Chad Vitzhum
Members Absent: None
Staff Present: Economic Development Director,Amanda Othoudt
Also Present: Richard Lee,Premier Real Estate, Scott Robideau, Robideau Properties,LLC
1. Call Meeting to Order
Pursuant to due call and notice thereof, the meeting of the Elk River Finance Committee
was called to order at 7:35 a.m.
2. Consider Agenda
Motion by Motin and seconded by Wagner to approve the agenda. Motion carried 4-
0. ,
3.0 ' Consent Agenda
Motion by-Toth and seconded by Motin to approve the Consent Agenda including
the October 27,2015 meeting minutes. Motion carried 4-0.
•
4.0 General Business
Ms. Othoudt presented the staff report. Ms. Othoudt indicated that the buyers request for
the sellei to pay the buyer's brokerage fees of 3%, has never been considered in past land
transactions. She indicated that this would result in the property being conveyed for less than
fair market value, thus could be considered a subsidy to the business if coupled with
additional sources of public financing.
Discussion among the members was had as to the types of financial assistance that the
applicant is proposing to apply for.
Member Tveite asked whether 4.34 acres is a bit excessive for a 20,000 square foot facility
and outside storage.
Richard Lee from Premier Real Estate Services and Scott Robideau indicated that the
business has been continuing to grow over the past few years, and they feel as though this
expansion is sufficient enough to continue their growth pattern.
Member Ovall asked if we need to consider a buyers brokers fee as a business subsidy. Ms.
Othoudt indicated that based on the opinion of the EDA legal counsel,if the seller were to
convey the property to the buyer and not apply for additional subsidies,it would not be
considered a business subsidy to the buyer if under$25,000. However the applicant has
indicated that they intend to apply for additional public financing for this project within the -
letter of intent which changes the scope of the project and is then subject to MN State
Statutes regarding the business subsidy law.
Ms. Othoudt indicated that we currently don't have a policy in place to address paying
brokerage fees for buyers requesting to purchase land from the Economic Development
Authority or the city. Ms. Othoudt indicated that this maybe something that the EDA
Finance Committee should consider going forward.
Ms. Othoudt discussed the comments provided by the EDA legal counsel. In addition to the
business subsidy provision, legal counsel mentioned their concern about the "Non-shop"
provision on the letter of intent. The Non Shop provision states it is binding and needs a
clearly stated duration limit, such as "The provisions of this paragraph shall expire upon the
earlier of(i) the date a Purchase Agreement is executed by the Buyer and the Seller or (ii) 60
days after the date the Seller signs this letter of intent."
Discussion among members was had regarding the duration limit Member Ovall indicated
that it should follow the 120 day due diligence period. All.meinbers agreed.
Motion by Member Wagner to recommend the EDA to approve-the Letter of Intent
by Robideau Properties for the purchase of a 4.34 acre parcel located at 17565 Tyler
Street NW, Elk River to include the changes to the Non-Shop provision as suggested
by legal counsel to read: The provisions of this paragraph shall expire upon the
earlier of(i) the date a Purchase Agreement is executed by the Buyer and the Seller
or (ii) 120 days after the date the Seller signs this-letter of intent. Motion was
seconded by Member Motin. Motion carried 4-0.
5. 'Announcements
Verbal update on Sweet Peas Microloan and Ethanol Technology of MN
Ms. Othoudt updated members on the recent collection letters that were sent out to the
applicant's home and place of business for each of the uncollectable'microloans. To date,
staff has received no feedback and no payments.
6. Adjournment
•
There being no further business Member Tveite moved to adjourn the meeting.
The meeting adjourned at 8:05 a.m.
Minutes prepared by Amanda Othoudt.
-4(('
Tina Allard, City Clerk
Ai da r thoudt, Economic Development Director