12-14-1992 EDA MIN
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MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT CORPORATION
HELD AT ELK RIVER PUBLIC LIBRARY
MONDAY, DECEMBER 14, 1992
MEMBERS PRESENT: President Gongoll, Commissioners Dietz, Tralle, Schuldt,
Holmgren, and Dwyer
MEMBERS ABSENT: Commissioner Kropuenske
STAFF PRESENT: Patrick Klaers, Executive Director; Bill Rubin, Economic
Development Coordinator; and Sandra Thackeray, City Clerk
1. Call Meeting to Order
Pursuant to due call and notice thereof, the meeting of the Economic
Development Authority was called to order at 7:00 p.m. by President
Gongoll.
2. Consider 12/14/92 City Council Agenda
Item 11.1 - Status of Courthouse was added to the agenda.
COMMISSIONER TRALLE MOVED TO APPROVE
COMMISSIONER SCHULDT SECONDED THE MOTION.
THE AGENDA AS AMENDED.
THE MOTION CARRIED 6-0.
3.1. Consider 11/9/92 EDA Minutes
COMMISSIONER TRALLE MOVED TO APPROVE THE 11/9/92 EDA MINUTES.
COMMISSIONER DWYER SECONDED THE MOTION. THE MOTION CARRIED 5-0-1.
Commissioner Holmgren abstained due to his absence at that meeting.
3.2. Consider 11/23/92 EDA Minutes
COMMISSIONER SCHULDT MOVED TO APPROVE
COMMISSIONER HOLMGREN SECONDED THE MOTION.
THE 11/23/92 EDA MINUTES.
THE MOTION CARRIED 6-0.
4. Open Mike
No one appeared for this item.
5. Financial Update
Bill Rubin, Economic Development Coordinator, informed the EDA that the
Revolving Loan Fund has a cash balance of approximately $192,105.35 as
of November 30, 1992. This amount excluded interest income for
November. He stated that the EDA incurred expenses of $6,101.68 during
the fourth quarter and requested the EDA to approve these expenses.
Bill Rubin indicated that in addition to the $6,101.68 in expenses,
there was an extra expense of $13,400 of which $5,000 was charged to
the City for administrative costs and $8,400 was charged for a portion
of the Economic Development Coordinator's salary and benefits.
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Economic Development Authority
December 14, 1992
Page 2
COMMISSIONER DIETZ MOVED
THE AMOUNT OF $19,501.68.
MOTION CARRIED 6-0.
TO APPROVE THE EDA STATEMENT OF EXPENSES IN
COMMISSIONER DWYER SECONDED THE MOTION. THE
6. Expiration of 60-Day Extension to EDA Main Street Exclusive Option
This item was delayed because the developer was not present at this
time.
7. Policy Guidelines Block Grant Loan Fund
Bill Rubin reviewed a draft of policy guidelines which would govern
future loans made from the Tescom loan repayment. He stated that these
guidelines would not affect the EDA's existing Revolving Loan Fund.
Bill Rubin reviewed the objectives which must be met for activities
funded through the Elk River Block Grant Loan Fund. He stated that all
activities funded through the loan fund must meet at least one of the
following objectives:
a. Benefit to low and moderate income persons.
b. Prevention or elimination of slums and blight.
c. Alleviation of urgent community development needs.
After further discussion, it was
separate guidelines for the
flexibility in the existing loan
the preference of the
Tescom Loan Fund so
fund.
EDA
as
to
to
set up
provide
COMMISSIONER TRALLE MOVED TO APPROVE THE BLOCK GRANT REVOLVING LOAN
FUND POLICY AS PRESENTED BY ECONOMIC DEVELOPMENT COORDINATOR, BILL
RUBIN. COMMISSIONER DWYER SECONDED THE MOTION. THE MOTION CARRIED 6-0.
6. Expiration of 60-Day Extension to EDA Main Street Exclusive Option
Gary Santwire, developer of the EDA Main Street site, was present to
discuss development of the EDA Main Street site. Gary Santwire stated
that he has some concerns regarding the access to the river and the
concept which has been proposed by City staff. He stated that the
concept would have to thoroughly reviewed to see if it would be a
viable option. He indicated that staff's solution may not be the best
option.
Gary Santwire explained to the EDA what is needed for the Main Street
site to be a completed project in order to gain desired occupancy in
the building. He stated that the main goal is to create space with
attractive and competitive finished leasable improvements. He stated
that in addition to the $4 per square foot base rent, $2.50 must be
added for real estate taxes, $1.50 for common area expenses, and $1.50
for utilities. He indicated that in order to make the project work, a
1,200 square foot area would have to lease for $1,200 per month. He
stated that if this project will require more money than $1,200 per
month for rent, it will not be fully occupied.
Economic Development Authority
December 14, 1992
Page 3
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Gary Santwire indicated that the project cost is estimated at $670,000
with the building to cost $420,000 after site preparation to street
grade. He indicated that the land acquisition cost would be $112,000;
site preparation and easement cost $90,000; and administration,
accounting and legal cost $48,000. Gary Santwire stated that in order
to get rents at $4 per square foot, the developers will need a total of
$257,000 in subsidies. He stated that even if the land acquisition was
$1, additional subsidies of $145,000 would still be necessary. He
further stated that the remaining $413,000 would need to be financed at
an annual percentage rate not to exceed seven to eight percent for the
first ten years. He also indicated that if the project cost can be
reduced, the need for subsidy would also be reduced. Gary Santwire
emphasized that if the project cannot rent at $4 to $4.50 maximum per
square foot, the project would not be done. Mr. santwire requested an
additional 30-day extension to meet with staff and to review the
options.
COMMISSIONER TRALLE MOVED TO GRANT
DEVELOPER COULD MEET WITH CITY
PROJECTIONS. COMMISSIONER HOLMGREN
CARRIED 6-0.
A 30-DAY EXTENSION SO THAT THE
STAFF TO ANALYZE THE DEVELOPER'S
SECONDED THE MOTION. THE MOTION
8.
Consider 1993 Work Program
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Bill Rubin reviewed the proposed 1993 Work Program which consisted of
industrial development, downtown redevelopment, marketing, advertising,
economic development newsletter, industrial call program, star city
activities, industrial council, Certified Development Company, and 1993
Legislative issues. It was the consensus of the EDA to act on this
work program in 1993. President Gongoll suggested adding a category to
the work program which would include public information to community,
such as the recent Dr. Stone presentation.
9.
EDA Annual Meeting
Bill Rubin reminded the EDA that the annual EDA meeting will be held on
January 11.
10. Prospect Report
Bill Rubin reviewed the Prospect Status Report which consisted of four
new prospects and which was sent under separate cover.
11.1. Courthouse
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President Gongoll informed the EDA that he attended a meeting regarding
the old courthouse in downtown Elk River. He stated that money is
available from the Federal government at 80% with a 20% matching local
fund for restoration of historical buildings. He stated that the
federal guidelines for this program are not fully written yet but more
information would be available at a later date.
President Gongoll thanked the outgoing
Commissioners Tralle, Kropuenske, and Schuldt.
members of
He stated
the EDA,
that he
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Economic Development Authority
December 14, 1992
Page 4
appreciated their dedication to the EDA and valued their friendship,
help, and confidence.
12. Adjournment
There being no further business, COMMISSIONER TRALLE MOVED
THE MEETING. COMMISSIONER SCHULDT SECONDED THE MOTION.
CARRIED 6-0.
TO ADJOURN
THE MOTION
The meeting of Elk River Economic Development Authority adjourned at 8:14
p.m.
Sincerely,
~~
'Sandra Thackeray
City Clerk