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03-13-1995 EDA MIN MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, MARCH 13, 1995 Members Present: President Gongoll, Commissioners; Scheel, Dwyer, Duitsman Members Absent: Commissioners; Holmgren, Bender and Farber Staff Present: Bill Rubin, Executive Director; Sandra Thackeray, City Clerk 1 . Call Meetino To Order Pursuant to due call and notice thereof, the meeting of the Elk River Economic Development Authority was called to order at 5: 15 p.m. by President Gongoll. 2. Consider March 13, 1995 EDA Aqenda Discussion regarding a letter submitted to the EDA by Tony Emmerich was added to the agenda at Item 10.1. COMMISSIONER DWYER MOVED TO APPROVE THE MARCH 13, 1995, EDA AGENDA AS AMENDED. COMMISSIONER DUITSMAN SECONDED THE MOTION. MOTION CARRIED 4-0. 3. Consider February 13, 1995 EDA Minutes COMMISSIONER DWYER MOVED TO APPROVED THE FEBRUARY 13, 1995, EDA MINUTES AS SUBMITTED. COMMISSIONER DUITSMAN SECONDED THE MOTION. MOTION CARRIED 4-0. 4. Open Mike No one appeared for this item. 5. Consider February And March EDA Financial Update Executive Director Bill Rubin indicated that the micro-loan fund had a cash balance of $139,117.79 on January 31, 1995, .and $147,675.29 on February 28, 1995. The Executive Director further indicated that the DTED Loan Fund had a cash balance of $23,600.07 on January 31, 1995, and $26,191.05 on February 28, 1995. 6. Consider Rezonina Of Fairqrounds To Business Park And Amendment To The Comprehensive Plan To Select Liqht Industrial Land Use Executive Director Bill Rubin indicated that the City Council has recently discussed the potential rezoning of the Sherburne County Fairgrounds lying immediately east of the recently rezoned Business Park Area. He stated that the current zoning of this property is R3, Townhouse Multiple Family Residential, and that the City's Economic Development Authority Meeting March 13, 1995 Page 2 comp plan designates the area as High Density Residential. He indicated that it is proposed that this area be rezoned to BP, Business Park. He further stated that Sherburne County does not object to the concept of this rezoning. He informed the EDA that this issue will be considered by the Planning Commission at its meeting in late March and by the City Council at a meeting in mid April. COMMISSIONER DWYER MOVED TO RECOMMEND TO THE ELK RIVER PLANNING COMMISSION AND THE ELK RIVER CITY COUNCIL THAT THE COUNTY FAIR GROUND PROPERTY BE REZONED FROM R3 TO BP (BUSINESS PARK) AND THAT THE COMPREHENSIVE LAND USE PLAN BE AMENDED TO REFLECT AN LI (LIGHT INDUSTRIAL) DESIGNATION. COMMISSIONER DUITSMAN SECONDED THE MOTION. MOTION CARRIED 4-0. 7. Consider A Loan Reauest From T.J. Properties (Office Redevelopment Proiect at Freeport A venue and East Main Street) Executive Director Bill Rubin indicated that the EDA is in receipt of a request for a micro-loan in the amount of $48,000 from T.J. Properties (Tim and Jerry Smith). He indicated that the Finance Committee considered the request and voted to recommend approval of the request based on the following conditions: · The completion of an appraisal to ensure that the loan to value ratio does not exceed 90% · Jerry Smith agreeing to apply proceeds from the sale of his property at 907 Main Street to pay down or payoff the EDA loan on the Freeport Avenue - Main Street office project. Jerry Smith of Century 21 White Dove informed the EDA that the loan would be used by T.J. Properties as secondary financing for its new office building at 403 Main Street. He indicated that the project was expanded to include the second floor of the office building being completely finished as well as tenant improvements to a greater portion of the lower level. Mr. Smith stated that these upgrades resulted in an increase in construction costs. President Gongoll indicated that although this is a very favorable project, he had a concern regarding the normal application process for requesting a micro-loan. He stated that the micro-loan request was submitted after the construction of the project, which is contrary to policy guidelines. President Gongoll further indicated that approving of this micro-loan may set a precedent for the EDA in the future regarding similar requests. Commissioner Dwyer also indicated that the project was a "good project". Commissioner Dwyer stated that the micro-loan fund is set up to assist with projects that are short on equity coming into the project. He further indicated that it is not the intent to cover overage costs on buildings and stated his concern of setting a precedent for other requests similar to this one. Commissioner Dwyer indicated his concern with the amount of equity that would be received from the sale of Mr. Smith's property at 907 Main Street to payoff the EDA loan on the Freeport Avenue and Main Street office project. Commissioner Dwyer indicated he would prefer to see the loan paid off rather than paying down on the loan. Economic Development Authority Meeting March 13, 1995 Page 3 Discussion was held regarding possible payment options for the micro-loan request. COMMISSIONER DWYER MOVED TO APPROVE A $48,000 LOAN TO T.J. PROPERTIES SUBJECT TO THE FOLLOWING CONDITIONS: · THE COMPLETION OF AN APPRAISAL TO ENSURE THAT THE LOAN TO VALUE RATIO DOES NOT EXCEED 90% · AGREEMENT TO APPLY PROCEEDS FROM THE SALE OF PROPERTY AT 907 MAIN STREET TO PAY OFF THE EDA LOAN ON THE FREEPORT AVENUE MAIN STREET OFFICE PROJECT · THAT THE LOAN REPAYMENT BE SET UP WITH A 15 YEAR AMORTIZATION WITH A BALLOON PAYMENT TO PAY OFF THE BALANCE OF THE LOAN IN TWO YEARS PRESIDENT GONGOLL SECONDED THE MOTION. MOTION CARRIED 4-0. 8. Consider Proposed Leqislation Placinq Additional Restrictions On Tax Increment Financina The Executive Director Bill Rubin informed the EDA that House File 147 has been introduced as proposed legislation which would further restrict the use of tax increment financing. Bill Rubin indicated that the legislative restrictions on existing districts may have an adverse effect on TIF Districts No. 1 and NO.3 in Elk River. He further indicated that House File 147 may affect the City's ability to access funds from a TIF District that is already decertified. The Executive Director informed the EDA that he would continue to monitor the legislation. It was the consensus of the EDA that House File 147 has an adverse impact on current or decertified district~ in Elk River and it may be necessary to initiate amendments to respective TIF Plans. 9. Discuss EDA Topics For State Of City Presentation President Gongoll reviewed some topics that may be of interest at the State of the City address to be held on March 21 . 10.1 Discussion Of Letter Submitted To Bill Rubin From Jay Johnson Executive Director Bill Rubin briefly reviewed a letter which he received from Jay Johnson regarding the EDA's proposed assistance to Tony Emmerich. Bill Rubin indicated that it is Mr. Emmerich's feeling that the EDA's assistance of underwriting assessments is of no help to the developer. He indicated that Mr. Emmerich's recommendation to the EDA is to use available funds to pay for the north half of 183rd Street and the utilities, and to pay for the cul-de-sac street and utilities from the Business Center drive south into the Business Park area. Commissioner Dwyer indicated that it was the consensus of the Business Park Task Force that the assistance offered to Mr. Emmerich in the form of underwriting assessments would not be considered a grant. Commissioner Dwyer further indicated he felt this type of assistance would be helpful to the developer and feels that the City and EDA has done its best to offer assistance to the developer. Commissioner Dwyer recommended that Executive Director Bill Rubin contact Mr. Economic Development Authority Meeting March 13, 1995 Page 4 Emmerich and inform him that the EDA reviewed his request and that it was the consensus of the EDA not to modify the original offer. 11. There being no further business, COMMISSIONER SCHEEL MOVED TO ADJOURN THE MEETING. COMMISSIONER DWYER SECONDED THE MOTION. THE MOTION CARRIED 4-0. The meeting of the EDA adjourned at 6:00 p.m. Respectfully submitted, y/~ Sandra Thackeray City Clerk s:minutes:eda03-13