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01-11-1993 EDA MIN . . . MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, JANUARY 11, 1993 Members Present: Chairman Gongo11, Commissioners Dwyer, Scheel, Duitsman, Farber, Dietz, and Holmgren Members Absent: None Staff Present: Bill Rubin, Economic Development Coordinator; Sandra Thackeray, City Clerk; Pat K1aers, Executive Director 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 Chairman Gongo11. Chairman Gongol1 recognized the new Commissioners and welcomed them to the EDA. 2. Consider 1/11/93 EDA Agenda COMMISSIONER HOLMGREN MOVED TO APPROVE THE 1/11/93 EDA AGENDA. COMMISSIONER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 7-0. 3. Consider 12/14/92 EDA Minutes COMMISSIONER DWYER MOVED TO APPROVE THE 12/14/92 EDA MINUTES. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0. 4. Open Mike No one appeared for this item. 5. Financial Update Bill Rubin reviewed the financial status of the EDA. The Economic Development Authority had a December 31, 1992, cash balance of $61,646.23. The Revolving Loan Fund had a balance of $199,741.75 as of December 31, 1992, excluding interest. Bill Rubin stated that the Revolving Loan Fund made three lo~ns in 1992. 6. Annual Meeting Items a. Election of Officers The EDA discussed the e1$ction of officers for the offices of President, Vice President, Treasurer, Secretary, and Assistant Treasurer. Commissioner HQlmgren suggested that the officers for President and Vice President remain the same as 1992. . . . Economic Development Authority Minutes January 11, 1993 Page 2 COMMISSIONER DIETZ MOVED TO NOMINATE JEFF GONGOLL AS PRESIDENT; PAT DWYER AS VICE PRESIDENT; ROGER HOLMGREN AS TREASURER; LARRY FARBER AS SECRETARY; AND HANK DUITSMAN AS ASSISTANT TREASURER. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0. b. Appointment of Executive Director APPOINT PATRICK KLAERS AS EXECUTIVE COMMISSIONER DIETZ SECONDED THE PRESIDENT GONGOLL MOVED TO DIRECTOR OF THE EDA FOR 1993. MOTION. THE MOTION CARRIED 7-0. c. Designate Official Newspaper COMMISSIONER DWYER MOVED TO APPOINT THE ELK RIVER STAR NEWS AS THE OFFICIAL NEWSPAPER FOR THE EDA FOR 1993. COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 7-0. d. Designate Official Depositories PRESIDENT GONGOLL MOVED TO DESIGNATE THE FOLLOWING BANKS AS THE OFFICIAL DEPOSITORIES FOR ITS FUNDS FOR 1993: THE BANK OF ELK RIVER, FIRST NATIONAL BANK OF ELK RIVER, METROPOLITAN FEDERAL OF ELK RIVER, PRIMEVEST, MERRILL LYNCH, PRUDENTIAL BACHE, SHEARSON LEHMAN HUTTON, NORWEST BANK, DAIN BOSWORTH, AND PAINE WEBBER. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0. e. Committee Appointments/Assignments The EDA reviewed the list of Economic Development Authority Committees for 1992 which consisted of a Finance Committee, Marketing Committee, and R & D Committee. Commissioner Duitsman suggested contacting the Metropolitan Federal Bank to see if they would be interested in being represented on the Finance Committee. He also suggested contacting other people in the community, if needed, for the committees. PRESIDENT GONGOLL MOVED THAT THE 1993 EDA COMMITTEES REMAIN THE SAME AS IN 1992 CONSISTING OF FINANCE, MARKETING, AND R & D COMMITTEES. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0. f. Discuss Enabling Resolution and By-laws commissioner Scheel suggested changing the section of the by-laws pertaining to appointment of Commissioners so that the decision regarding the composition of the EDA would be made prior to the election of Councilmembers. After discussion regarding this issue, it was the consensus of the EDA to look at this issue at a later date prior to the next City election. 7. Expiration of 30-day Extension to EDA Main Street Exclusive Option . . . Economic Development Authority Minutes January 11, 1993 Page 3 President Gongoll requested information from Gary Santwire as to his progress regarding the 30-day extension to the Main Street property. Gary Santwire stated that he became involved in this project to assist the City to do something with the site. He indicated that this is not a market or developer driven project. He stated that the City needs to lead the project because it is owned by the City. He further stated he has no desire to receive any free money for the project. He further indicated that although the City has invested $112,000 in the site, the project will need more money from the City than it has already invested. Gary Santwire stated that he will assist the City, but will not front the project. He further indicated that he is opposed to Tax Increment Financing, but feels that this property does need assistance. Discussion was held between Gary Santwire and the EDA regarding the fact that Gary Santwire had stated that he would meet with staff prior to this EDA meeting to determine a dollar amount involved in the project. Gary Santwire stated that he did meet with staff, however, when trying to discuss the project he received no clear answer from staff. Pat Klaers, Executive Director, stated that staff needs to see a project with dollar amounts prior to responding to a proposal. Gary Santwire stated that there has been no effort made on the Economic Development Authority to front this project. stated that the figures the City had, which he presented EDA meeting, were enough to calculate the tax levels. the part of He further at the last It was suggested that a meeting be held with President Gongoll, Vice President Dwyer, Gary Santwire, the Executive Director, and Bill Rubin to resolve this issue. Gary Santwire indicated he would like to receive input from the new EDA members regarding this issue. Commissioner Dietz indicated that he felt the City should be open to receiving other offers on the site. President Gongoll indicated that he felt the EDA should allow Gary Santwire time to continue with the proposal that he had previously presented to the EDA. COMMISSIONER HOLMGREN MOVED TO DIRECT PRESIDENT GONGOLL, VICE PRESIDENT DWYER, GARY SANTWIRE, EXECUTIVE DIRECTOR PAT KLAERS, AND BILL RUBIN TO MEET AND DISCUSS THIS ISSUE TO DETERMINE WHETHER OR NOT GARY SANTWIRE IS INTERESTED IN DOING THE PROJECT AND TO PRESENT THIS INFORMATION AT THE FEBRUARY 8, EDA MEETING. COMMISSIONER SCHEEL SECONDED THE MOTION. Commissioner Duitsman indicated he was interested in other offers for the site. Commissioner Duitsman also indicated that if the project cannot be developed an alternative would be to create a park out of the site. THE MOTION CARRIED 7-0. . . . Economic Development Authority Minutes January 11, 1993 Page 4 8. Consider Loan Request from Allegiance Realty Bill Rubin, Economic Development Coordinator, indicated that the City is in receipt of a request for a loan from the EDA Revolving Loan Fund from Allegiance Realty, 823 Main street. The EDA Finance Committee met to review the request and recommended that the EDA consider approval of a loan for $27,500 from the Revolving Loan Fund to Allegiance Realty. Commissioner Holmgren stated that this project has been previously assisted by the EDA through TIF regarding site preparation costs. Commissioner Holmgren questioned whether the $6,000 being requested for the phones was a legitimate use of the Revolving Loan Fund. He stated that the phone company should be willing to finance the phones. Bill Rubin indicated that the telephone equipment would fall under the category of machinery and equipment, and therefore, was an eligible item for funding. Marilyn VanPatten stated that separate from the Chuba Company received funds previously. the Allegiance Realty is completely and, further, Allegiance Realty has not PRESIDENT GONGOLL MOVED TO ACCEPT THE FINANCE RECOMMENDATION TO APPROVE A $27,500 REVOLVING LOAN REALTY. COMMISSIONER DWYER SECONDED THE MOTION. THE 5-2. Commissioners Holmgren and Scheel opposed. COMMITTEE'S TO ALLEGIANCE MOTION CARRIED Commissioner Holmgren requested that staff look into the issue of whether Revolving Loan Funds should be used for items such as telephone equipment in the future. Commissioner Dietz indicated that he has a problem with the way the Revolving Loan Funds are being used and feels that the loans should be used for projects that cannot be done without the City's assistance. Commissioner Dwyer suggested that staff research other cities regarding the use of Revolving Loan Funds. 9. Consider Alternatives for Tax Increment Financing Grant Request Bill Rubin indicated that staff is seeking direction regarding the potential availability of TIF to assist a manufacturing company with its relocation program into the City of Elk River. Bill Rubin explained the Perf-form Products, of Big Lake Township, is proposing the construction of a 6,000 square foot facility that can be expanded in the future. He stated that the company is tentatively looking at Lot 2, Block 2, Elk River Industrial Park as the potential site for this project. Bill Rubin further explained that after reviewing the potential sources of assistance available, it was decided that the creation of a new TIF District may not be feasible. He indicated that the alternatives to the creation to a new TIF District include: No TIF assistance or amending an existing district. He suggested that the EDA and Council consider an amendment to TIF Districts No. 1 and No. 3 to provide a TIF grant to Perf-form Products. Commissioner Holmgren stated he preferred amending an existing district over creating a new TIF district. Commissioner Duitsman stated that he would like to identify all of the City's capital needs prior to using . . . Economic Development Authority Minutes January 11, 1993 Page 5 the funds of the TIF districts for economic development. He stated that he is in favor of economic development. It was the consensus of the EDA to pursue TIF funds from Districts No. 1 and No. 3 to assist, but the City's capital needs should first be identified before this project is funded. 10. 1993 Work Program The EDA reviewed the 1993 Work Program presented Development Coordinator. The EDA ~iscussed the issue on Program related to certified ~evelopment companies. explained that the use of an SBA company may answer concerns regarding Revolving Loan Fund uses. by the Economic the 1993 Work Bill Rubin some of the COMMISSIONER HOLMGREN MOVED TO ADOPT THE 1993 WORK PROGRAM. COMMISSIONER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 7-0. 11. Prospect Report The EDA reviewed the Prospect Report which Commissioners under separate cover. sent to the was 12. Other Business There was no other business presented. 13. Adjournment There being THE MEETING. CARRIED 7-0. no other business, COMMISSIONER HOLMGREN MOVED TO ADJOURN COMMISSIONER DIETZ SECONDED THE MOTION. THE MOTION The meeting of the Elk River Economic Development Authority adjourned at 8:45 p.m. ~~y submitted, Sandra Thackeray City Clerk