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04-13-1998 EDA MIN e MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, APRIL 13, 1998 Members Present: President Duitsman; Commissioners Dwyer. Holmgren, Farber, Gongoll. Thompson, and Bender Members Absent: None Staff Present: Paul Steinman, Executive Director; Sandra Thackeray, City Clerk; Pat Klaers. City Administrator; Steve Ach. City Planner 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 Duitsman. 2. Consider Aaenda Item 7.5.. Larry Morrell, was added to the agenda. e COMMISSIONER FARBER MOVED TO APPROVE THE APRIL 13, 1998, EDA AGENDA AS AMENDED. COMMISSIONER BENDER SECONDED THE MOTION. THE MOTION CARRIED 7-0. 3. Consider Consent Aaenda COMMISSIONER FARBER MOVED TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. MARCH 9, 1998, EDA MINUTES - APPROVED 3.2. CHECK REGISTER - APPROVED COMMISSIONER DWYER SECONDED THE MOTION. THE MOTION CARRIED 7-0. 4. Open Mike No one appeared for this item. 5. Business Park Zonina and Liaht Industrial Zonina e City Planner Steve Ach described the eastern area transportation corridor which was identified for rezoning by the Economic Development Strategic Plan. He explained that the zoning for the area was not specifically defined and the question has risen whether Business Park or Light Industrial zoning would be more appropriate. Steve Ach compared the permitted and conditional uses in Business Park and Light Industrial zones. He also compared landscaping requirements in both zones. The EDA discussed the differences between the two Elk River Economic Development Authority Minutes Aoril13. 1998 Page 2 e zones. The EDA noted that the main difference between the two zonings is the requirement for the exterior finish of the building. The EDA indicated that business park zone was the desired zone however, it did not want to preclude some of the uses that are allowed in the light industrial zone due to the exterior finishing requirements for business park zones. No decision was made at this time, however President Duitsman indicated that the issue would be discussed at the next EDA meeting. 6. Consider $50,000 Micro Loan for The Ink Wizards Executive Director Paul Steinman indicated that the EDA Finance Committee reviewed a request from The Ink Wizards for a micro loan in the amount of $50,000. Paul indicated that The Ink Wizards currently lease approximately 2.500 square feet of space and are planning construction of a 4,000-5,000 square foot light manufacturing facility. The EDA Finance Committee recommended approval of the loan request with the following terms: . 8.5% interest rate, five year balloon, 20 year amortization . Second mortgage position on the land and building . Personal Guarantees . Promissory Note e COMMISSIONER BENDER MOVED TO SUPPORT THE EDA FINANCE COMMITTEE'S RECOMMENDATION TO APPROVE THE $50,000 MICRO LOAN TO THE INK WIZARDS FOR RELOCATION AND EXPANSION OF THEIR BUSINESS OPERATIONS. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0. 7. Consider Modification to Olde Main Eatery and Sweet Shoppe Micro Loan Executive Director Paul Steinman stated that the EDA Finance Committee considered a request by The Olde Main Eatery and Sweet Shoppe for modification of the $50,000 EDA micro loan. He indicated that The Olde Main Eatery is experiencing approximately $36,000 in cost overages. Paul indicated that the Finance Committee recommended approval of the request to modify the $50,000 EDA micro loan. COMMISSIONER GONGOLL MOVED TO APPROVE A SUBORDINATION OF THE EDA MICRO LOAN TO AN ADDITIONAL $36,000 LOAN FROM FIRST NATIONAL BANK OF ELK RIVER FOR THE OLDE MAIN EATERY AND SWEET SHOPPE. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0. 7.5. Larry Morrell President Duitsman indicated that the City Council recently approved a Tax Increment Financing District for Morrell & Morrell, Inc., subject to the EDA specifying the terms and conditions for the tax increment financing dollars. President Duitsman indicated that Larry Morrell has submitted a revised request for more financial assistance than offered in the EDA's proposal. e Elk River Economic Development Authority Minutes Anril13. 1998 Page 3 e Terry Morrell reviewed Option A of the revised request as proposed by Morrell & Morrell, Inc. He indicated that the difference in this proposal versus the EDA's original proposal is that Morrells are requesting to be able to use their present building and site at School Street and Jackson Avenue on a limited basis. He indicated that the building would not be used as a trucking facility. He further stated that he did not feel it was in his best interest to demolish the building. He stated the Morrells did not want to be in a situation where they cannot drive trucks on that property. Commissioner Holmgren stated that the city has a responsibility to move Morrell Trucking from its present location. He indicated he did not want to see one issue hold up the project and further indicated that he felt the existing Morrell building will be gone by the year 2000 whether or not it is required by the city. Commissioner Thompson indicated that the motivating factor for increasing the up front T1F subsidy to the Morrells was to get the existing site cleaned up. He further indicated that this must be one of the conditions for receiving the T1F money up front. Larry Morrell indicated that he would be using the building for limited storage only. e Commissioner Farber indicated that he concurred with Commissioner Holmgren in that he would agree to remove the stipulation that the building be removed by June of 2000 if the lot is only used for storage. Commissioner Dwyer questioned how the site would be cleaned up. Larry Morrell indicated that 85 to 90 percent of the outside storage would be removed. Commissioner Dwyer indicated that he is interested in meeting in a worksession to discuss the issue further and to be more informed as to the stipulations of the Developer's Agreement. COMMISSIONER HOLMGREN MOVED TO CONTINUE THE ADJOURNMENT OF THE EDA MEETING IN ORDER TO FINISH DISCUSSION OF THIS ISSUE UNTIL WEDNESDAY, APRIL 15,1998, AT 5:00 P.M. COMMISSIONER DWYER SECONDED THE MOTION. THE MOTION CARRIED 7-0. 8. Consider Renewal of Business Incubator Lease with Larry Hickman Executive Director Paul Steinman indicated that the EDA has the option of renewing a two year lease with Larry Hickman for approximately 13,186 square feet of space in the former Furniture and Things building. Paul indicated that there is an option to renew the lease for an additional two years which would be from April 15, 1999, through April 14, 2001. Paul Steinman reviewed the parameters of the current lease. e COMMISSIONER GONGOLL MOVED TO EXTEND THE EDA LEASE WITH LARRY HICKMAN FOR AN ADDITIONAL TWO YEARS FROM APRIL 15,1999, TO APRIL 14, 2001, AT A BASE LEASE COST OF $1.65 PER SQUARE FOOT FOR 13,186 SQUARE FEET e e e Elk River Economic Development Authority Minutes April 13. 1998 Page 4 OF SPACE IN THE FORMER FURNITURE AND THINGS BUILDING. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 7-0. 9. School to Work Partnership Update - Jeff Gonaoll Commissioner Gongoll presented information on several programs relating to the education to employment partnership. The programs he discussed included career shadowing. teachers in business. and career expo. He invited the members of the EDA and their businesses to become involved in the programs. 10. Consider Appointments to the EDA Finance Committee COMMISSIONER BENDER MOVED TO APPOINT CLIFF LUNDBERG AND DAN TVEITE TO THE EDA FINANCE COMMITTEE. COMMISSIONER GONGOLL SECONDED THE MOTION. THE MOTION CARRIED 7-0. 11. Other Business Paul Steinman informed the EDA that the next Community Venture Network meeting will be held on Thursday. April 16. He encouraged EDA members to attend. Paul Steinman indicated that SuperMats. Inc. is pursuing a project on the vacant industrial lot which the EDA currently owns. 12. Adiournment The EDA meeting was continued to Wednesday. April 15. 1998. at the City Hall, at 5:00 p.m., to discuss the Morrell issue. Respectfully submitted, ~~~ City Clerk