11-13-1995 EDA MIN
MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
HELD AT THE ELK RIVER CITY HALL
MONDAY, NOVEMBER 13, 1995
Members Present:
President GongolL Commissioners, Dwyer, Duitsman, Holmgren
(6:07), Farber and Bender
Members Absent:
Commissioner Scheel
Staff Present:
Bill Rubin, Executive Director; Michelle Dwyer, Recording Secretary
1 . Call Meetina To Order
Pursuant to due call and notice thereof. the meeting of the Elk River Economic
Development Authority was called to order at 6:03 p.m. by President Gongoll.
2. Consider Aoenda
COMMISSIONER DUITSMAN MOVED TO APPROVE THE AGENDA AS FOLLOWS:
9. CONSIDER A LOAN REQUEST FROM INTERNET FIVE, INC. -- DELETED
10. CONSIDER A CONTRACT FOR PRIVATE DEVELOPMENT BY AND BETWEEN THE
ELK RIVER eDA AND NEOS, INC. (TAX INCREMENT FINANCING DISTRICT NO.
12) -- DELETED
12.1 REQUEST A SPECIAL EDA MEETING MONDAY, NOVEMBER 20, 1995
COMMISSIONER DWYER SECONDED THE MOTION. THE MOTION CARRIED 5-0.
3. Consider Minutes
COMMISSIONER FARBER MOVED TO APPROVE THE CONSENT AGENDA AS
FOLLOWS:
4.0 OCTOBER 9, 1995 MINUTES -- APPROVED
7.0 EDA CHECK REGISTER -- APPROVED
COMMISSIONER BENDER SECONDED THE MOTION. THE MOTION CARRIED 5-0.
4. Open Mike
No one appeared for this item.
6. Consider November EDA Financial Statement
Assistant City Administrator, Lori Johnson submitted the statement of financial
activity for the period ending October 31. 1995. As of this date, the EDA had a
cash balance of $69,335.00. As of October 31. 1995 the micro-loan fund had a
cash balance of $131.491.00 and the block grant micro loan fund had a cash
balance of $48.455.00.
Economic Development Authority ,Meeting
November 1;3, 1995
Page 2
8. Consider a Loan Request from Frank and Jodv Galli (The Vault Hearth Baker'll
Bil! Rubin, Executive Director stated Frank and Jody Galli (The Vauit Hearth
Bakery) requested a micro loon in the amount of $50,000 to launch a gourmet
bread bakery and coffee shop in the lower level of the Elk River Travel building
located at 315 Jackson Avenue. Frank and Jody Galli would purchase the
building and renovate the lower level of the building for The Vault Hearth
Bakery. Elk River Travel agency will continue to operate and rent space. A two-
bedroom apartment on the upper level would also provide monthly income for
the Gallis.
The $50,000 micro-loan would be used to help purchase the building and to
help purchase the necessary equipment for the gourmet bread shop. The Gallis
requested a $17.500 loan for the real estate and a $32,500 loan for the
equipment. A fixed rate of 6 percent was requested for both loans.
The Finance Committee voted 4-0 (with committee member Bud Houlton
absent) to recommend approval of this loan at a fixed rate of 6 percent for 15
years for the real estate loan and 7 years for the equipment loan.
President Gongoll thinks this is a good project and is glad that Mr. Galli is willing
to become a downtown business owner,
Commissioner Dwyer stated concerns regarding the proposed interest rate on
the real estate loan.
Frank Galli would like a 6 percent fixed rate for 15 years because of all the
remodeling and code changes for the lower level of 315 Jackson Avenue. This
amounts to more dollars than was expected.
COMMISSIONER DWYER MOVED TO APPROVE A $32,500.00 EQUIPMENT lOAN TO
FRANK AND JODY GALLI (THE VAULT HEARTH BAKERY) FOR A TERM OF 7 YEARS AT
A FIXED RATE OF 6 PERCENT; PLUS A $17.500.00 REAL ESTATE LOAN FOR A PERIOD
OF 15 YEARS WITH A FIVE YEAR BALLOON AT AN INITIAL INTEREST RATE OF 6
PERCENT FIXED; AT THE END OF THE FIFTH YEAR THE NEW INTEREST RATE Will NOT
EXCEED 2.75 POINTS BElOW THE PRIME RATE AT THAT TIME. COMMISSIONER
HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 6-0.
11. Consider a Resolution Requestinq Central Minnesota Development Comoany
Exoand its Service Territory to Include Sherbuf'le County
Bill Rubin, Executive Director explained that the EDA is jn receipt ,of a request
from the Centrcl Minnesota Development Company (CMDC), The CMDC is
considering a service territory expansion to include Sherburne, Chisago. and
Isanti counties and is seeking resolutions or letters of support from cities, banks
and s'lioll business concerns.
Bill Rubin further explained the background of a Certified Development
Company (CDC) and its ability to package Small Eusiness Association loans.
Economic Development Authority l\leeting
November 13. 1995
Page 3
The EDA considered a similar resolution in 1993 to support the Coon Rapids
Development Corporation (CRDC) and its desire to expand its service territory.
Since that time CRDC has changed its name to Central Minnesota Development
Company (CMDC) and has expanded its board of directors.
At its fall planning workshop, CMDC resolved to explore a service territory
expansion beyond Anoka County. Although Elk River and Sherburne County is
currently serviced by a statewide CDC, Bill Rubin suggested that a locally-
oriented CDC could better serve the needs of cities, EDA's, lenders, and small
businesses in Sherburne County. As a result he supports CMDC's territory
expansion into Sherburne, Chisago, and Isanti Counties.
Commissioner Dwyer also stated his support for CMDC's expansion into Elk River
and Sherburn County.
COMMISSIONER DWYER MOVED TO ADOPT EDA RESOLUTION 95-5, A RESOLUTION
REQUESTING THAT CENTRAL MINNESOTA DEVELOPMENT COMPANY EXTEND ITS
SERVICE TERRITORY TO INCLUDE THE CORPORATE LIMITS OF ELK RIVER, MINNESOTA.
COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 6-0.
12. Other Business
12.1 Request for Special EDA Meetinq Monday, November 20,1995
COMMISSIONER HOLMGREN MOVED TO CALL A SPECIAL MEETING OF THE ELK
RIVER ECONOMIC DEVELOPMENT AUTHORITY FOR MONDAY, NOVEMBER 20, 1995
AT 5:45 P.M. TO CONSIDER A LOAN REQUEST FROM INTERNET FIVE, INC..
COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 6-0.
13. Adiournment
There being no further business, COMMISSIONER HOLMGREN MOVED TO
ADJOURN THE MEETING. COMMISSIONER FARBER SECONDED THE MOTION. THE
MOTION CARRIED 6-0.
The meeting of the Elk River Economic Development Authority was adjourned at
6:37 p.m..
Respectfully submitted,
),0 thLUt, J)u~
Michelle Dwyer
Recording Secretary