07-10-1995 EDA MIN
MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
HELD AT THE ELK RIVER CITY HALL
MONDAY, JULY 10, 1995
Members Present:
President Gongoll, Commissioners Duitsman, Dwyer, Holmgren,
Scheel
Members Absent:
Commissioners Bender and Farber
Staff Present:
Bill Rubin, Executive Director; Michelle Dwyer, Recording Secretary
1. Call Meetinq To Order
Pursuant to due call and notice thereof, the meeting of the Elk River Economic
Development Authority was called to order at 6:02 p.m. by President Gongoll.
2. Consider July 10, 1995 Aoenda
COMMISSIONER DWYER MOVED TO APPROVE THE JULY 10, 1995 AGENDA WITH
THE ADDITION OF THE FOLLOWING DISCUSSION ITEMS: 11.1 MISSISSIPPI
RIVERFRONT PATHWAY PROJECT, AND 11.2 CBD ISSUES. COMMISSIONER
DUITSMAN SECONDED THE MOTION. MOTION CARRIED 5-0.
3. Consider EDA Consent Agenda
COMMISSIONER SCHEEL MOVED TO APPROVE THE CONSENT AGENDA.
COMMISSIONER GONGOLL SECONDED THE MOTION. MOTION CARRIED 5-0.
5. Open Mike
No one appeared for this item.
6. Consider July EDA Rnancial Statement
Executive Director, Bill Rubin, reviewed the statement of financial activity which
was provided to the EDA by the Assistant City Administrator. The cash balance
as of June 30, 1995 was $3,265.00. The Micro loan fund had a cash balance of
$147,856.00 as of June 30,1995, and the DTED Block Grant Micro loan fund had a
cash balance of $37,701.00 as of June 30, 1995.
8. Consider Options for "Qualifyinq Local Contribution" fMowrey/Neos, Inc. TIF
request) .
Bill Rubin informed the EDA Commissioners that at its June 19 meeting, the Elk
River City Council approved a tax increment financing request from tv\r. Jack
Mowrey/Neos, Inc. to support the proposed construction of a 12,000 square foot
manufacturing facility in the McChesney Industrial Park. In accordance with the
Economic Development Authority Meeting
July 10, 1995
Page 2
TIF policy guidelines, the maximum TIF grant cannot exceed 15 percent of a
project's finished market value. Therefore, the TIF grant will likely range from
$56,250 (based on a finished market value of $375,000) to $67,500 (based on a
finished market value of $450,000).
In approving the TIF grant, the City Council also agreed to explore the
opportunity to opt out of the Local Government Aid - Homestead and
Agricultural Aids (LGA/HACA) reduction by making a "qualifying local
contribution" in an amount equal to a percentage of the tax increment. For an
economic development TIF district, the contribution is 10 percent.
It currently is understood that the local contribution is done on an annual basis.
The City/TIF authority must contribute some of its own "unrestricted" money into
the project according to the required percentage contribution. The
contribution may come from the general fund, a property tax levy or a federal
or state grant-in-aid which may be spent for general governmental purposes.
The local contribution may not be made, directly or indirectly, with tax
increments or developer payments.
Previously, it was offered that the "qualifying local contribution" would simply be
calculated at 10 percent of the TIF grant that was requested. With the
Mowrey/Neos request, the contribution may have been in a range of $5,625
(based on a $56,250 TIF grant) to $6,750 (based on a $67,500 TIF grant). It is now
understood that the contribution must be done on an annual basis and is
calculated as a percentage (10%) of the tax increment (new property tax)
generated from the TIF district. EDA Commissioners reviewed a 1-page summary
marked Exhibit D from the Neos TIF plan to help approximate the estimated
annual payments.
Per Council direction, the EDA is required to come up with a source of funds to
make the annual contributions. At the June EDA meeting, a summary of land
sales in the Elk River Industrial Park was offered as a discussion item. The EDA's
obligation was to generate $210,000 in sales from the publicly owned sites. The
sales and respective values are as follows:
Company Value
Timron Precision Gear $ 50,000 (collected from TIF payments)
Tescom Corporation
(Phase 1)
Tescom Corporation
(Phase 2)
District 728
Total
100,000 (collected from TIF payments)
57,000 (collected from TIF payments)
45,000 (cash)
$252,000
At the June meeting, Commissioner Dwyer suggested that perhaps revenues
from land sales in excess of $210,000 should be held by the EDA to make the
"qualifying local contributions" on an annual basis or for other EDA initiatives.
Economic Development Authority Meeting
July 10, 1995
Page 3
Commissioner Dwyer asked if the annual contribution could be funded from the
EDA's budget as an anticipated expense. Commissioner Gongoll suggested this
be put on the workshop agenda to look at various ways to secure the funds and
future applications.
9. Consider the 1996 EDA Budget and Levy
Based on a maximum statutory levy of .01813 percent of the taxable market
value in the City, it is estimated that the EDA vvill have revenues of
approximately $90,000 in 1996. EDA Commissioners reviewed the draft of the
1996 budget.
No action vvill be taken at this time.
10. Change Auaust EDA Meetinq Date and Workshop Date.
COMMISSION FARBER MOVED TO CHANGE THE MEETING TO TUESDAY, AUGUST 8
AT 5:00 P.M. WITH DINNER PROVIDED FOLLOWED BY A WORKSHOP.
COMMISSIONER DUITSMAN SECONDED THE MOTION. MOTION CARRIED 5-0.
11. Other Business
Mississippi Riverfront Pathway Proiect
The second of three public workshops was held on Thursday, June 29,1995, in
the Training Room of the Elk River City Hall. A variety of individuals attended this
session, including Riverfront Corridor Committee members, residents of the
community, businesses, and representatives of various organizations (i.e. the
Area Chamber of Commerce and Arts Council, etc.). Michael Schroeder and
Paul Paige of Hoisington Koegler Group, Inc., presented workshop attendees
vvith three design options related to the Mississippi Riverfront Pathway Project.
Comments and critiques from the workshop attendees followed. Based on this
feedback, Hoisington Koegler vvill revise its design options into a concept plan
vvith related costs. This concept plan vvill be presented at the Public Workshop
on July 20, 1995 at 6:30 in the training room.
Now that three design options have emerged, individual meetings vvith property
owners along the one and one-half block area, from the Otsego Bridge to King
Avenue, have been scheduled. The initial meetings took place on July 5, 1995;
the second opportunity for property:owner meetings is scheduled for July 11,
1995.
EDA Commissioners expressed support for the projeci.
CSD Issues
The Chamber's central business district task force prepared a document for the
Chamber Board of Directors. It contains the follovving:
-Business related issues - to be presented to the Downtown Develop Corporation
-City related issues - to be presented to the Comp Plan Steering Committee
Economic Development Authority Meeting Page 4
July 10, 1995
The CBD is a delicate issue in light of some of the announced store closings and
what likely will be additional store closings. The City/EDA/HRA needs to start
focusing attention and effort into a plan of action. Every property owner
downtown has made an investment. The City, in partnership with the Chamber
and property owners need to preserve that investment as the CBD represents a
significant portion of the tax base in this community.
10. Adiournment
PRESIDENT GONGOLL MOVED TO ADJOURN THE MEETING. COMMISSIONER
HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0.
The meeting of the EDA adjourned at 6:40 P.M.
Respectfully submitted,
~ D~JV- /au---
Michelle Dwyer
Recording Secretary