03-10-1997 EDA MIN
e
MEETING OF THE ELK RIVER
ECONOMIC DEVELOPMENT AUTHORITY
HELD AT THE ELK RIVER CITY HALL
MONDAY, MARCH 10, 1997
Members Present:
President Dwyer, Commissioners Holmgren, Farber, Thompson,
Duitsman, Gongoll and Bender
Members Absent:
None
Staff Present:
Paul Steinman, Executive Director; and Debbie Kleckner,
Recording Secretary
Also Present:
John Weicht
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 6:00 p.m. by President Dwyer.
2.
Consider Aqenda
e
COMMISSIONER HOLMGREN MOVED TO APPROVE THE MARCH 3, 1997 EDA
AGENDA. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED
7-0.
3.
Consider Consent Aqenda
COMMISSIONER HOLMGREN MOVED TO APPROVE THE CONSENT AGENDA AS
FOLLOWS:
3.1. CHECK REGISTER - APPROVED
3.2. FEBRUARY 10, 1997 EDA MINUTES - APPROVED
COMMISSIONER BENDER SECONDED THE MOTION. THE MOTION CARRIED 7-0.
4. ODen Mike
No one appeared for this item.
5.
ADDrove Business Incubator Financinq and Budqet
e
Paul provided a brief overview of the Business Incubator project to lease
approximately 13,00 square feet of the former Furniture & Things building. He
reviewed the lease rate, leasehold improvement costs, schedule for repayment
of the improvement costs by Larry Hickman, and the EDA's total investment in the
project. Paul also reviewed proposed financial projects for up to eight years of
incubator operation including revenues, expenses and annual cash flow. Paul
noted that in approximately 18 months, the EDA will need to make a decision
whether or not to continue their support for the project for an additional two
years.
EDA Meeting Minutes
March 10, 1997
Page 2
e
Discussion followed regarding the amount of cash rent which would be required
from prospective tenants. Chair Dwyer and Commissioner Duitsman felt that a
minimum amount of cash rent should be established. Paul felt the EDA needed
to work with each tenant individually and determine a starting rent and increase
the amount as the business becomes established.
COMMISSIONER DUITSMAN MOVED APPROVAL OF THE BUSINESS INCUBATOR
FINANCING AND BUDGET AS DETAILED IN THE STAFF REPORT TO THE EDA DATED
MARCH 5, 1997. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE
MOTION CARRIED 7-0.
6. Approve Final Lease Aareement and Repavment Aareement with Larry Hickman
Paul reviewed the major parameters of the final lease agreement with Larry
Hickman as follows:
e
· EDA to lease approximately 13, 186 square feet within the former Furniture
and Things building
· Net leasable space equals approximately 11, 072 square feet
· The term of the lease is from April 15, 1997 to April 14, 1999
· Base rent is $1 .50 per square foot or $19,779.00 per year
· EDA has option to extend the Lease Term by six full years at the following cost:
-First renewal term (two years) $1.65 per sq. ft. or $21 ,757.00 per year
-Second renewal term (two years) $1.85 per sq. ft. or $24,394.00 per year
-Third renewal term (two years) not to exceed $3.00 per sq. ft. or
$39,558.00 per year
· Leasehold improvements will be completed by Larry Hickman at a cost not to
exceed $81,253.00 and paid for by the EDA as follows:
-$25,000.00 at beginning of the Lease Term
-The balance over the initial two years, together with interest at the rate of
of 8.5% per year.
Paul noted if the EDA decides to terminate its lease, Larry Hickman will reimburse
the EDA for leasehold improvement costs as follows:
At the end of the initial two year term
A t the end of four years
A t the end of six years
$58,038.00
34,823.00
11,608.00
COMMISSIONER GONGOLL MOVED APPROVAL OF THE FINAL LEASE AGREEMENT
AND REPAYMENT AGREEMENT BETWEEN THE EDA AND LARRY HICKMAN, AND
AUTHORIZE EXECUTION OF SUCH AGREEMENTS. COMMISSIONER BENDER
SECONDED THE MOTION. THE MOTION CARRIED 7-0.
Commissioner Gongoll expressed his thanks on behalf of the EDA to Larry Hickman
for his efforts and cooperation in making the Business Incubator Project possible.
7.
Approve Business Incubator Advisory Committee
e
CHAIR DWYER MADE THE FOLLOWING APPOINTMENTS TO THE BUSINESS INCUBATOR
ADVISORY COMMITTEE:
EDA Meeting Minutes
March 10. 1997
Page 3
e
HANK DUITSMAN
JEFF GONGOLL
DARYL THOMPSON
LARRY HICKMAN
KERMIT BODE
RICH DUGGAN
JIM BARTHEL
JACK MOWRY
HARLAN JACOBS
PAUL STEINMAN
Paul noted the first meeting of the Business Incubator Advisory Committee will be
March 25, 1997 at 5:00 p.m. at the Elk River City Hall. Chair Dwyer requested that
a report on actions taken by the Business Incubator Advisory Committee be listed
as an agenda item for future EDA meetings.
8. Prosoect Report/Activity Update
Informational item.
9. Other Business - Updates
Industrial Park Lot - Paul noted the 2.4 acre lot is still available in the industrial
park at a listing price of $90,000. It was the consensus of the EDA to continue
research on the possibility of the EDA purchasing the lot. but no action would
likely be taken until the Strategic Planning Task Force completes their work and
the Plan is presented to the City Council.
e
Chamber of Commerce State of the City. March 18,9197. 5:30 p.m. at the Elk
River Country Club -
Eastey & Johnson Micro Loan - Discussion followed regarding the length of the
closing documents which were presented to Eastey & Johnson and their decision
to not pursue the micro loan. Chair Dwyer felt the amount of paperwork could
be decreased significantly. Paul indicated Dean Bussey of Doherty Rumble did
reduce size of the closing documents for the LeFebvre loan to 7 legal pages.
Chair Dwyer asked staff to research simplifying the documents even further to
make the process less complicated.
10.
Adiournment
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 6:37 p.m.
R~ectfullY submitted.
Ue.!J/1te' ~'t~d--U
Debbie Kleckner
Recording Secretary
e