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05-10-1993 EDA MIN . . . MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL CONFERENCE ROOM A MONDAY, MAY 10, 1993 Members Present: President Gongoll, commissioners Dwyer, Duitsman, Dietz, Scheel, Holmgren and Farber Members Absent: None Staff Present: Bill Rubin, Economic Development Coordinator; Pat Klaers, Executive Director; Sandra Thackeray, City Clerk 1. Call Meeting To Order Pursuant to due call and notice thereof, the meeting of the Elk River Economic Development Authority was called to order at 7:30 p.m. by President Gongoll. 2. Consider 5/10/93 EDA Agenda COMMISSIONER DUITSMAN MOVED TO APPROVE THE 5/10/93 EDA AGENDA. COMMISSIONER DWYER SECONDED THE MOTION. THE MOTION CARRIED 6-0. 3. Consider 4/12/93 and 4/26/93 EDA Minutes AND 4/26/93 EDA MOTION CARRIED COMMISSIONER DWYER MOVED TO APPROVE THE 4/12/93 MINUTES. COMMISSIONER FARBER SECONDED THE MOTION. THE 6-0. 4. Open Mike No one appeared for this item. 5. Financial Update Bill Rubin informed the EDA that the Revolving Loan Fund had a cash balance of $201,997.65 as of April 30, 1993, excluding interest. Councilmember Holmgren arrived at this time (7:33 p.m.). 6. EDA Main Street site Chris and Linda Bulow, representing the Bruce Company, provided the EDA Commissioners with an update on the progress of the EDA Main Street site. Mr. Bulow presented the Council with a rendering of the front and rear elevations of the proposed site. Mr. Bulow's proposal revealed a five level building which included condos on the first two levels, retail on the Main Street level, condos on the fourth level, and underground parking on the bottom level. Commissioner Holmgren indicated his concerns regarding access to the garages as the present access is privately owned. He further indicated his concern regarding . . . Economic Development Authority Meeting May 10, 1993 Page 2 the effect the shore land ordinance may have on the plan regarding the encroachment to the river. Chris Bulow reviewed the cost and financing of the proposed project. Mr. Bulow indicated that he is anxious to move ahead with the project and requested comments from the EDA regarding the proposal. He indicated that he is considering a completion date of April or June, 1994. Commissioner Gongoll indicated that he felt the proposal was a good use of the space. He further stated that there has been other developers interested in this site, however, no one has come forward at this time. Bill Rubin indicated that the EDA and staff have an obligation to the developer regarding the property. He suggested that the EDA consider offering some type of option to take the site off the market to give the developer the assurance he needs before he spends limited time and financial resources on the project. It was the consensus of the EDA to consider this at its next meeting. 7. Proposed Revisions to Loan Policy Guidelines Bill Rubin informed the EDA that two rev~s~ons are proposed to the EDA Revolving Loan Policy Guidelines. Bill Rubin explained that the first change deals with what occurs when a company relocates out of Elk River after a loan has been approved. He suggested offering the following language to revise the policy: "A loan shall become due and payable in full if a business relocates out of the City of Elk River prior to the maturity date of the EDA loan." Bill Rubin indicated that the second revision relates to the adjustment in the EDA's interest rate. He suggested the following revision to the Revolving Loan Fund Guidelines: "The interest rate may be adjusted at intervals that are mutually agreed to by the EDA and the business." Commissioner Duitsman indicated that he supports the repayment of the loan if a business moves out of town. However, he questioned the purpose of adjusting the interest rate. He indicated that this would not benefit the City as interest rates would never be adjusted upward, only downward, and therefore benefit the borrower. Commissioner Dwyer suggested tying the interest to the prime rate. Bill Rubin indicated that the reason for adding the language is to eliminate any notion by the borrower that the interest rate is locked over the life of the loan and, further, that it is not the intention to renegotiate the interest. Commissioner Duitsman indicated that he would not have a the language if the interest is negotiated up front development. Bill Rubin indicated the rate was disclosed documents. problem with at the time of in the loan PRESIDENT GONGOLL MOVED TO ACCEPT THE FIRST REVISION TO THE REVOLVING LOAN FUND POLICY GUIDELINES AS STATED IN THE MEMO TO THE EDA FROM BILL . . . Economic Development Authority Meeting May 10, 1993 Page 3 RUBIN DATED MAY 5, 1993, AND WITH THE SECOND REVISION TO STATE AS FOLLOWS: THAT THE INTEREST RATE BE TIED TO THE LOWEST PRIME RATE AS PUBLISHED IN THE WALL STREET JOURNAL AND THE INTEREST RATE MAY BE ADJUSTED AT INTERVALS THAT ARE MUTUALLY AGREED TO BY THE EDA AND THE BUSINESS. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0. 8. Business Park Concepts Bill Rubin stated that at its April meeting, Commissioner Dwyer suggested that the EDA explore a second Industrial Park location. He indicated that the issue regarding the course that the EDA will take in developing the second Industrial Park should be discussed. He stated that issues such as ownership, the role of the EDA financing, and business park standards will need to be discussed by the EDA. President Gongoll suggested establishing a task force to discuss these issues. He suggested that Commissioner Dwyer chair the Task Force and that Commissioner Dietz serve as a City Council representative. COMMISSIONER HOLMGREN MOVED TO APPOINT A TASK FORCE CONSISTING OF BILL RUBIN, PRESIDENT GONGOLL, COMMISSIONER DWYER, COMMISSIONER DIETZ, A CHAMBER REPRESENTATIVE, AND THE EDA RESEARCH AND DEVELOPMENT COMMITTEE, TO RESEARCH THE CONCEPT OF DEVELOPING A SECOND INDUSTRIAL PARK AND THAT THE TASK FORCE REPORT BACK TO THE EDA IN NINE MONTHS. COMMISSIONER GONGOLL SECONDED THE MOTION. THE MOTION CARRIED 7-0. 9. Finalize Marketing Project Bill Rubin reviewed a draft of the puzzle that was discussed at the EDA meeting. The puzzle is a marketing concept which would be mailed to a variety of industry specific companies. It was the consensus of the EDA to approve the puzzle marketing concept. 10. Prospect Report The EDA reviewed the Prospect Report which was sent under separate cover. 11. Other Business There was no other business. 12. Staff Updates Bill Rubin informed the EDA that the closing on the Tescom Project is scheduled for May 14. Bill Rubin informed the EDA that the Minnesota Housing Finance Agency intends to make $47.5 million dollars available for the first time homebuyer program. He indicated that each applicant requesting funds will more than likely receive a lower amount than requested. He stated . . . Economic Development Authority Meeting May 10, 1993 Page 4 that it is likely that Elk River's final approximately $950,000. allocation will be Bill Rubin distributed a letter from the Minnesota Extension Service regarding seminars on building your communities future. 13. Adjournment There being no further business, COMMISSIONER HOLMGREN MOVED TO ADJOURN THE MEETING. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED 7-0. The meeting of the Elk River Economic Development Authority adjourned at 8:55 p.m. Respectfully submitted, ~J!A-~ ::JIta.df::VLfV1;- Sandra Thackeray J'~) City Clerk