JFC MEETING PACKET 04-26-2022
Meeting
of the
Joint Finance
Committee
AGENDA
Tuesday, Tuesday, April 26, 2022
7:30 a.m.
Elk River City Hall
Upper Town Conference Room
1. CALL MEETING TO ORDER
2. CONSIDER AGENDA
3. CONSENT AGENDA
Considered to be routine and noncontroversial by the Economic Development Finance Committee and will be approved by one
motion. There will be no separate discussion of these items unless a Committee member, staff member, or citizen so requests, in
which case the item will be removed from the consent agenda and considered under the regular agenda.
3.1 November 30, 2021, Meeting Minutes
4. GENERAL BUSINESS
4.1 Orluck EDA Loan
5. ANNOUNCEMENTS
6. ADJOURNMENT
Meeting Protocol
No sidebar discussions
No interruptions
State your concern
Ensure you understand
Don’t take things personally
Adhere to time limits
Come prepared
Ensure all are heard
Elk River Joint Finance Committee
Held at Elk River City Hall
Tuesday, November 30, 2021
Members Present: Charlie Blesener, Ryan Hardin, Rhonda Magnussen, Dan Tveite, Nate Ovall,
Larry Toth and Jim Gromberg
Members Absent: Chad Vitzthum
Staff Present: Brent O’Neil, Economic Development Director
Others Present: Mikaela Huot, Baker Tilly (via phone conference) and Patrick Briggs, Briggs
Companies
1. Call Meeting to Order
Pursuant to due call and notice thereof, the meeting of the Elk River Joint Finance
Committee was called to order by Chair Tveite at 7:38 a.m.
2. Consider Agenda
Motion by Blesener and seconded by Gromberg to approve the Joint Finance
Committee agenda. Motion carried 7-0.
3. Consent Agenda
Motion by Hardin and seconded by Ovall to approve the October 26, 2021, Joint
Finance Committee meeting minutes. Motion carried 7-0.
4.1 TIF Application Jackson Hills Second Addition
Mr. O’Neil introduced Mikaela Huot and Patrick Briggs to present on the TIF application
for Jackson Hills II. Mr. Briggs spoke to the site and his vision for the project. Ms. Huot
gave a presentation summarizing the project and her analysis of the request. Ms. Huot
highlighted the qualifications of the project as a Housing TIF district, the use of funds, and
the “but-for” analysis. The analysis indicated soil conditions necessitating remediation are
the major contributor to extraordinary project costs anticipated for the project up to
$850,000. The developer could be reimbursed for those costs over the life of a 15-year TIF.
It also found that the project could not support debt service payments without TIF, and the
debt service coverage ratio and projected returns are under market standards.
Several elements of the project were discussed by the committee. Site layout was confirmed
to be on the southern portion of the property, immediately across 6th Street from Jackson
Hills I. Mr. Briggs confirmed that approximately six feet of peat, on average, would need to
be removed and refilled on site. He also indicated that current pavement of 6th Street would
remain, without additional improvements needing to be made.
Ms. Huot was asked about project viability and debt coverage ratios, and she indicated that
the project is feasible with TIF, but project returns and debt coverage ratios are below
prevailing standards.
Mr. Briggs indicated that Jackson I reached stabilization a little slower than expected and
current occupancy is about 90 percent. He also indicated the likely construction schedule
would be summer of 2022.
Mr. Briggs also stated that the project is subject to volatility in the construction market and
he is also looking at other possible programs to strengthen the feasibility of the project.
Motion by Oval and seconded by Blesener to recommend approval of the application
to the Housing and Redevelopment Authority. Motion carried 7-0.
5.1 Announcements
There were no announcements.
6. Adjournment
There being no further business, Mr. Tveite adjourned the meeting at 8:11 a.m.
Minutes prepared by Brent O’Neil.
_____________________
Tina Allard
City Clerk
___________________
Brent O’Neil
Economic Development Director
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional
service, and community engagement that encourages and inspires prosperity
Request for Action
To
Joint Finance Committee
Item Number
4.1
Agenda Section
General Business
Meeting Date
April 26, 2022
Prepared by
Brent O’Neil, Economic Development Director
Item Description
Orluck EDA Loan
Reviewed by
Reviewed by
Action Requested
Provide advice regarding the EDA’s Jobs Incentive Microloan to Orluck Industries.
Background/Discussion
In 2018, Orluck Industries was awarded a Jobs Incentive Microloan for their operations in Elk River. Orluck is
primarily in the aerospace industry as a manufacturer of seating, cargo, sensors, propulsion, and engine parts.
They also provide medical, locomotive, and manufacturing industry services. The loan was for $200,000, and
received an extension in 2021 of their loan repayment through July 2025. The loan was secured by two pieces
of equipment, a Zeiss Contura Q2 Inspection Machine, and an Okuma Genus M560V Machining Center.
Orluck has been in contact with the economic development office regarding the status of its business and loan,
and the potential sale of equipment securing the loan.
Financial Impact
N/A
Mission/Policy/Goal
The EDA offers loan programs to support local business.
Attachments
None