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07-13-1998 EDA MIN e e e MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, JULY 13,1998 Members Present: President Duitsman, Commissioners Bender, Dwyer, Farber, Gongoll and Holmgren Members Absent: Commissioner Thompson Staff Present: Paul Steinman, Director of Economic Development; Pat Klaers, City Administrator; Debbie Huebner, Recording Secretary Also Present: Jim Winkels, AMCON; Tony Gleekel, Associates Builders 1. Call Meetina To Order Pursuant to due call and notice thereof, the meeting of the Economic Development Authority was called to order at 6:00 p.m. by President Duitsman. 2. Consider 7/13/98 Aaenda COMMISSIONER DWYER MOVED TO APPROVE THE JULY 13,1998, EDA AGENDA. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED 6-0. 3. Consider Consent Aaenda COMMISSIONER DWYER MOVED TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. JUNE 8, EDA MINUTES - APPROVED 3.2. EDA CHECK REGISTER - APPROVED COMMISSIONER BENDER SECONDED THE MOTION. THE MOTION CARRIED 6-0. 4. Open Mike No one appeared for open mike. 5. Presentation bv AMCON/ Associated Builders Reaardina East Business Park (Hohlen mixed use developmentl Paul Steinman introduced Jim Winkels, representing AMCON, and Tony Gleekel. representing Matt Fischer of Associated Builders. Jim Winkels of AMCON, 200 West Highway 13, Burnsville, reviewed a site plan for the proposed development. He indicated AMCON has worked with McCombs- Roos to delineate the wetlands on the site (approximately 10 acres or 25%). EDA Minutes July 13, 1998 Page 2 e Also, they are working with staff regarding the alignment of the road to the east to layout the site. He explained that the project consists of multi-tenant buildings and single user buildings. Mr. Winkels indicated the total gross square footage of the proposed buildings is estimated at 350,000 square feet. He expects these buildings will generate annual property taxes in the $2.00 per square foot range. AMCON proposes to begin construction of a 50,000 sq. ft. building to the west on or before April 1, 1999. Mr. Winkels stated he anticipates the total industrial park to be completed in 5 years or less. In order to meet tenant expectations, the roads and sewer and water would need to be completed by August 1, 1999. President Duitsman expressed his support for the industrial park project. A discussion followed regarding the wetlands on the property. Pat Klaers, City Administrator, noted one of the wetland issues involves abandoning part of a county ditch system and piping the surface water through the new storm drainage system. e Commissioner Gongoll questioned what the anticipated occupancy of the first phase building is expected to be. Mr. Winkels indicated he is confident enough of the market that they are prepared to construct a "spec" building. Commissioners Gongoll and Dwyer questioned if the original request for TIF District No. 19 included the industrial park improvements. Paul indicated that the $4.4 million original request did not include any of the business park and no revenues were anticipated from the industrial component. Paul indicated that the $1.2 million in streets, utilities, curb and gutter and grading, as well as the cost of the land, would be eligible for TIF financing. Commissioner Dwyer questioned who would be the owner of the industrial park. Mr. Winkels indicated Matt Fischer will be buying the property. Tony Gleekel indicated the ownership of the property will be negotiated between AMCON and the entity purchasing the Vandenberg property, and Associated Developers will not be an owner of the industrial park. Also, ownership will depend on how the income for the projects are generated. Since the money will be coming from two different sources, they will be handled as two separate projects. Paul explained that it will be one TIF project with one developer agreement with Associated Developers. Mr. Gleekel indicated that he anticipates the end product of the industrial park to be a combination of owner-occupied and leased tenants. Commissioner Bender questioned whether it is realistic for the developer to complete the project in 5 years. Mr. Winkels explained the activity and growth he is observing in the area indicates a strong market for industrial park interest. He also felt the property was very attractive for this type of use. e President Duitsman questioned the status of negotiations with the mobile home owners in the Hohlen park. Mr. Gleekel explained they have worked with a number of the residents for sale of their homes. He noted that the developer has made a decision to accept the appraisals and is not attempting to offer a lesser amount to the owners of the mobile homes. He indicated that 4 or 5 homes were bought out in the last 10 days, and that there are only a couple EDA Minutes July 13,1998 Page 3 e owners that have not yet agreed to a buyout. He noted that it will not affect the project if any of the owners want to stay for the full 90 days. Mr. Gleekel indicated he anticipates closing the property sale with Mr. Hohlen sometime this summer. 6. Consider Resolution 98- ,Approvina TIF Plan forTIF District No. 19 Paul Steinman indicated Tax Increment Financing District No. 19 includes approximately 108 acres of privately owned property identified for commercial and business park mixed use development. Paul asked that the comments received from Sherburne County Commissioners received on July 13, 1998. expressing their concerns for loss of tax revenues due to the TIF project. be entered into the public record. He noted that approval of the resolution does not guarantee assistance from the city. COMMISSIONER BENDER MOVED APPROVAL OF RESOLUTION NO. 98-2, MODIFYING DEVELOPMENT DISTRICT NO.1 AND ADOPTING THE DEVELOPMENT PROGRAM THEREFOR; AND ESTABLISHING WITHIN DEVELOPMENT DISTRICT NO.1, TAX INCREMENT FINANCING DISTRICT NO. 19. AND ADOPTING THE RELATED TAX INCREMENT FINANCING PLAN THEREFOR. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED 6-0. 7. Consider Resolution 98- , Askina that the City Council Call Public Hearina For TIF District No. 20 e Paul Steinman explained that Supermats. Inc. is proposing to construct a 35.000- 40,000 square foot facility on the lot which is owned by the EDA in the Elk River Industrial Park. Supermats. Inc. is a manufacturer and distributor of rubber mat products made from recycled tires. Currently, Supermats, Inc. is leasing 5,000 square feet in the building behind E & 0 Tool. The company proposes to combine its manufacturing, warehousing, and distribution to one location in the Industrial Park. Supermats. Inc. is asking that the lot be provided at zero land cost; in order to use the equity in the land to minimize "up front" dollars into the project. Paul estimated that the EDA should be able to recoup its dollars within an approximate two to three year time period. COMMISSIONER FARBER MOVED APPROVAL OF RESOLUTION 98-3, ASKING THE CITY COUNCIL TO CALL A PUBLIC HEARING FOR TlF DISTRICT NO. 20 ON AUGUST 24. 1998. AT APPROXIMATELY 6 P.M. IN THE CITY COUNCIL CHAMBERS AT CITY HALL. COMMISSIONER GONGOLL SECONDED THE MOTION. THE MOTION CARRIED 6-0. 8.1. County Fair Board reauest to use EDA lot bv fairarounds for parkina COMMISSIONER DWYER MOVED APPROVAL TO ALLOW USE OF THE EDA PARKING LOT BY THE FAIRGROUNDS FOR PARKING DURING THE SHERBURNE COUNTY FAIR. COMMISSIONER BENDER SECONDED THE MOTION. THE MOTION CARRIED 6-0. e e e e EDA Minutes July 13, 1998 Page 4 9. Adioumment There being no other business. COMMISSIONER HOLMGREN MOVED TO ADJOURN THE MEETING. COMMISSIONER GONGOLL SECONDED THE MOTION. THE MOTION CARRIED 6-0. The meeting of the Elk River Economic Development Authority adjoumed at 6:40 p.m. Respectfully submitted. ~ 1i~).~ Debbie Huebner Recording Secretary