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08-13-1990 EDA MIN . e Ie MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, AUGUST 13, 1990 Members Present: Chairman Tralle, Commissioners Kropuenske, Dobel, Schuldt, Holmgren, Gongoll and Dwyer Members Absent: None Staff Present: Pat Klaers, City Administrator; Sandy Thackeray, City Clerk; Lori Johnson, Finance Director; Tim Keane, City Attorney; Mike Mulrooney, Economic Development Consultant 1. Call Meetin~ to Order Pursuant to due call and notice thereof, the meeting of the Elk River Economic Development Authority was called to order by Chairman Tralle at 6:35 p.m. 2. Consider 8/13/90 EDA A~enda Items 9.1, Roma Tool, and 9.2, Ordinance Amendment, were added to the agenda. COMMISSIONER DOBEL MOVED TO APPROVE THE AGENDA AS AMENDED. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0. 3. Consider 7/23/90 EDA Minutes COMMISSIONER DOBEL MOVED TO APPROVE THE 7/23/90 EDA MINUTES AS PRESENTED. COMMISSIONER KROPUENSKE SECONDED THE MOTION. THE MOTION CARRIED 6-0-1. Commissioner Holmgren abstained. 4. Tax Increment Financin~ Update/Workshop Mike Mulrooney introduced Ed Cheetah from his firm, to update the EDA on tax increment financing. Mr. Tschida distributed a handout called "The Mechanics of Tax Increment Financing", and reviewed the handout with the EDA. The following was discussed with the EDA: --The project area and tax increment financing district --Types of tax increment financing districts (redevelopment, housing, renewal and renovation, soils condition, economic development district) --Examples of major eligible project expenditures --Taxable versus tax exempt --1990 Tax Increment Legislation --Loss of local government aid through TIF The EDA thanked Ed Tschida for his update on tax increment financing. Economic Development Authority Minutes August 13, 1990 Page 2 e. 5. Consider TIF Plan #8 Chairman Tralle stated that Tax Increment Financing Plan #8 has been distributed to the School District and the County. He indicated that the plan calls for financial assistance by the EDA in the amount of $70,000 for site preparation and removal of existing substandard housing structure for the dental clinic. The City Administrator informed the EDA that the funds would be recaptured over a five year period. The City Attorney informed the EDA that the applicants for the TIF plan have been notified of the meeting. The City Administrator stated that the application fee for the plan has not yet been received. Chairman Tralle opened the public hearing. There being no one for or against the matter, Chairman Tralle closed the public hearing. COMMISSIONER GONGOLL MOVED TO ADOPT RESOLUTION APPROVING THE TAX INCREMENT FINANCING DISTRICT CLINIC. COMMISSIONER DOBEL SECONDED THE MOTION. 7-0. 90-5, A RESOLUTION #8 FOR THE DENTAL THE MOTION CARRIED 6. Consider Proposal to Prospect 80190 e Mike Mulrooney stated that he has had discussions with a Minneapolis based manufacturer concerning the company's interest in locating in Elk River. He indicated that he has met with the President of the company to determine the exact needs of the company. Mr. Mulrooney stated that the company is looking for proposals from Elk River. Mike Mulrooney stated that the company has a strong history but has been experiencing rising costs in taxes located in Minneapolis. Presently, the company employs thirty people. He stated that there are no available buildings in Elk River that meet the company's needs. Mike Mulrooney suggested that the City either needs a developer to propose a project or the EDA may wish to consider developing a spec building by itself. Mike Mulrooney suggested having the facilities nearly 100% leased before the Ci ty would proceed with any type of construction of a spec building. Mike Mulrooney stated that the company's lease expires on January 1, 1991, and they must make some decision before that time as to where they will be operating. Mike Mulrooney discussed with the EDA the market for industrial and commercial space in Elk River and the fact that the City does not have this type of space available. Discussion pursued regarding whether or not the EDA should consider taking on the responsibility of building a spec building. After discussion regarding this matter, it was the consensus of the EDA that the City consider building a spec building due to the numerous inquiries which the City has received for available commercial and industrial space. e COMMISSIONER KROPUENSKE MOVED TO DIRECT MIKE MULROONEY TO PROCEED TO REPRESENT THE CITY AND TO PREPARE A PROPOSAL FOR PROSPECT 80190 ON A LEASE BASIS. COMMISSIONER GONGOLL SECONDED THE MOTION. THE MOTION CARRIED 7-0. The EDA recessed at 8:05 and reconvened at 8:15. Economic Development Authority Minutes August 13, 1990 Page 3 - 7. EDA 1991 Bud~et and Levy Lori Johnson, Finance Director, reviewed with the EDA the Economic Development Authority Statement of Cash Activity for the period ending July 31, 1990. She stated that the total expenditures have been $19,844.37 and the cash balance as of July 31, 1990, is $40,730.11. Ms. Johnson also reviewed with the EDA the Statement of Expenses Payable up to July 31, 1990. She stated that the total due to the City of Elk River is $9,307.42. COMMISSIONER HOLMGREN MOVED TO PAY THE CITY OF ELK RIVER $9,307.42 FOR EDA EXPENSES PAID BY THE CITY. COMMISSIONER KROPUENSKE SECONDED THE MOTION. The City Administrator stated that this figure contains the expense for the float. THE MOTION CARRIED 7-0. The City Administrator reviewed the EDA budget and stated that anticipated revenues from the .1813% taxable market value levy will be approximately $59,000. The City Administrator reviewed the line items of the budget with the EDA. -- COMMISSIONER HOLMGREN MOVED TO APPROVE THE 1991 EDA BUDGET. COMMISSIONER DOBEL SECONDED THE MOTION. THE MOTION CARRIED 7-0. COMMISSIONER KROPUENSKE MOVED TO ADOPT RESOLUTION 90-6, A RESOLUTION INDICATING THE LEVY FOR 1991 OF .1813%. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0. 8. Executive Director Uodate Pat Klaers, Executive Director, informed the EDA that the City has sent out over 90 applications for the Economic Development Coordinator opening. He questioned how the Council wished to proceed. It was the consensus that City staff weed out those applications that do not qualify. Commissioner Kropuenske stated that he did not feel that Mike Mulrooney should review the applications if he will be presenting a proposal for the job. The Council and EDA concurred. 8a. Reoort from Economic Develooment Consultant Mike Mulrooney reviewed with the EDA the status of the Revolving Loan Fund. He informed the EDA that the Finance Committee has reviewed the cash flow of the Revolving Loan Fund. . Mike Mulrooney indicated that AIltool has been requesting to expand their 40,000 square foot building and that they have requested assistance from the City through the Revolving Loan Fund. He indicated that the Finance Committee reviewed the request and have recommended that the City not provide revolving loan funds for this expansion but to discuss other options with Alltool. Economic Development Authority Minutes August 13, 1990 Page 4 e COMMISSIONER DOBEL MOVED TO ACCEPT THE FINANCE COMMITTEE'S RECOMMENDATION THAT NO REVOLVING LOAN FUNDS BE USED ON THE ADDITION FOR ALLTOOL BASED ON THE FACT THAT THE ADDITION WOULD CREATE NO NEW JOBS. COMMISSIONER SCHULDT SECONDED THE MOTION. THE MOTION CARRIED 7-0. Mike Mulrooney stated that Custom Cutter Grinding has been considering the possibility of building a spec building in the Industrial Park and leasing out a portion of the space. He stated that the Finance Committee reviewed the proposal and found that the company had a negati ve net worth. He stated that the Finance Committee felt that this company would be a candidate for a lease plan and recommended responding to the company by exploring other lease options. COMMISSIONER KROPUENSKE MOVED TO CONCUR WITH THE FINANCE COMMITTEE'S RECOMMENDATION FOR CUSTOM CUTTER GRINDING TO NOT USE THE REVOLVING LOAN FUND BUT TO PRESENT A LEASE OPTION TO THE COMPANY. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0. e, 8b. The Executive Director informed the EDA that the City has received a proposal from Liesch and Associates regarding the oil contamination located at the hole in the ground (Jenne site). He stated that the City is looking at $15,000 to identify the issue plus expenses to clean up the site. The City Administrator indicated that 90% of the $15,000 could be picked up through grants, but the remaining 10% may fall on the City's shoulders. 9.1 Roma Tool Chairman Tralle indicated that Roma Tool has requested forgiveness of a $400,000 loan. He stated that he, Pat Dwyer and Duane Kropuenske had met with Milo Henneman, owner of Roma Tool. He also indicated that a representative from First National Bank and Carol Olson, a representative of the State, were in attendance. Chairman Tralle stated that before the City can proceed to consider forgiveness of the loan, steps must be considered to restructure the loan. He indicated that the next step would be to meet with Roma Tool so that some financial questions can be answered. It was the consensus of the EDA that the City's Auditor and City Attorney be present at this meeting. Mike Mulrooney passed out a proposal for Economic Development Services for the EDA's review. The EDA accepted the proposal and indicated that he would be considered a candidate for the position. 9.2 Ordinance Amendment e Commissioner Kropuenske indicated that it was the consensus of the City Council that the Council review an ordinance which was previously passed by the Council in June relating to the platting of land. He indicated that the Council had second thoughts on this ordinance and would like to find some type of mechanism for exceptions. Commissioner Kropuenske stated that he does not disagree with the intent of the -- -- -- Economic Development Authority Minutes August 13, 1990 Page 5 ordinance but indicated that there must be some way to deal with the exceptions. 10. Adjournment There being no further business, COMMISSIONER KROPUENSKE MOVED TO ADJOURN THE MEETING. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0. The meeting of the Economic Development Authority adjourned at 9:25 p.m. Respectfully submitted, ~Jf1 ~'~7 ~c'eray City Clerk