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02-11-2008 EDA MINMEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, FEBRUARY 1 I, 2008 Members Present: President Gongoll, Commissioners Dwyer, Klinzing, Motin, Tveite, and Zerwas Members Absent: Commissioner Farber Staff Present: Director of Economic Development Catherine Mehelich, City Administrator Lori Johnson, Public Works Director Terry Maurer, Finance Director Tim Simon, Planning Manager Jeremy Barnhart, and Recording Secretary Jessica Miller 1. Call Meeting To Order Pursuant to due call and notice thereof, the meeting of the Economic Development Authority was called to order at 5:30 p.m. by President Gongoll. 2. Consider A eg nda ,MOVED BY COMMISSIONER KLINZING AND SECONDED BY COMMISSIONER TVEITE TO APPROVE THE FEBRUARY 11, 2008, EDA AGENDA. MOTION CARRIED 6-0. Consider Consent Agenda MOVED BY COMMISSIONER MOTIN AND SECONDED BY COMMISSIONER DWYER TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. JANUARY 14, 2008 REGULAR MEETING MINUTES 3.2. JANUARY 22, 2008 SPECIAL MEETING MINUTES 3.3. CHECK REGISTERS 3.4. BALANCE SPIEET 3.5. REVENUE/EXPENDITURE REPORT 3.6. PAY ESTIMATES (YMCA) MOTION CARRIED 6-0. 4. Open Mike No one was present for open mike. 5. Consider Tax Abatement for E&O Tool and Plastics Inc Expansion Director of Economic Development Catherine Mehelich stated that staff has been working with E & O Tool over the last year to identify a site and financing assistance to retain the company's expansion in Elk River. Ms. Mehelich stated that the company would like to construct a 55,000 square foot light industrial facility on 7.31 acres of the easterly portion of Economic Development Authority Minutes February 11, 2008 Page 2 the 17.11-acre Sandpiper Business Park. Ms. Mehelich outlined the company's request for up to $411,000 City assistance in the form of pay-as-you-go tax abatement for a time period of up to 13 pears. She noted that the company is also requesting a County match of up to $411,000 for up to ten years (per County policy). She indicated that staff has evaluated the company's application and the company scored as a "highly desirable" project based on the City's assistance priorities. She stated that in addition, the City's financial advisor Ehlers and Associates has completed a "but-for" analysis and determined that the level of assistance requested is necessary for the project to proceed. She stated that Sid Inman of Ehlers and Associates is present if the EDA has any questions. Tim Osterman, President of E & O Tools -explained that the company needs a new facility in order to acquire higher end work. Councilmember Motin questioned the estimated annual amount of taxes to be abated. Mr. Inman indicated the City's portion is approximately $30,000 a year. MOVED BY COMMISSIONER TVEITE AND SECONDED BY COMMISSIONER ZERWAS TO RECOMMEND APPROVAL TO THE CITY COUNCIL OF THE REQUEST BYE & O TOOL FOR TAX ABATEMENT AND BUSINESS SUBSIDY IN THE FORM OF APAY-AS-YOU-GO TAX ABATEMENT NOTE IN THE AMOUNT OF UP TO $411,000 TO BE PROVIDED AT A RATE OF 100% OF THE TAX ABATEMENT FOR A MAXIMUM PERIOD OF UP TO ]3 YEARS. MOTION CARRIED 6-0. 6. Update on Gateway Business Center Project Planning Manager Jeremy Barnhart explained that staff is at the point where they are ready to begin preliminary platting of the Gateway Business Park project. He stated that a financial analysis is being conducted to identify potential costs and funding sources at the staff level. Mr. Barnhart indicated that staff is looking for authorization for the engineering department to begin the platting process with a final draft to be presented at an upcoming meeting. President Gongoll questioned if staff is comfortable enough with the project to begin platting. Mr. Barnhart explained that staff is proposing to plat the outlots and the roads and that there is not much flexibility to move the road elsewhere due to the gas line and the north and south touchdown points. He noted that staff is comfortable that the proposed layout maintains flexibility to redraw the lateral property lines if necessary to meet the needs of users. MOVED BY COMMISSIONER DWYER AND SECONDED BY COMMISSIONER KLINZING TO AUTHORIZE STAFF TO PREPARE THE PRELIMINARY PLAT FOR GATEWAY BUSINESS PARK INCLUDING THE OUTLOTS AND THE ROADS, AND TO BRING BACK THE FINAL DRAFT AT AN UPCOMING MEETING. MOTION CARRIED 6-0. Ms. Mehelich stated that several months ago an initial proposal for the Gateway Business Park was presented by an entertainment center group. Ms. Mehelich stated that staff is awaiting the group's detailed proposal for analysis based on EDA direction in October 2007. Economic Development Authority Minutes February 11, 2008 Page 3 She stated that while the EDA has not authorized any letter of intent or exclusive rights for the entertainment center group to the City's portion of the property, staff would like clarification on whether or not the EDA would like staff to begin marketing the property to other potential anchor users that would be consistent with the EDA's vision for big box retail. President Gongoll questioned how the property is currently being marketed. Ms. Mehelich indicated that at this time the property is only listed on the City's website and staff would like to entertain discussions with developers more aggressively. Commissioner Dwyer stated that he believes that staff should continue to market the property until anon-refundable deposit is received. President Gongoll stated that he would like to see at least the application fee paid before the property is taken off the market. Commissioner Motin concurred with Commissioner Dwyer that he would like to see a large deposit put down on the property. He questioned if staff is continuing to work with the adjoining property owners on visions of how the property should be developed. Ms. Mehelich indicated that staff maintains contact with the property owners but there has been no discussion of a joint project. Commissioner Tveite concurred with Commissioners Dwyer and Motin that he would like to see a deposit and a plan for the property before it is taken off the market. Commissioner Klinzing also concurred noting that the EDA like the proposal of the entertainment center and that the continued marketing of the property is in no way meant to deter the entertainment proposal. 7. Update on Economic Development Assistant Position Ms. Mehelich indicated that the City Council recently authorized advertising for the economic development assistant position. She stated that the advertisement was posted on the City's website, League of Minnesota Cities website, EDAM website, and in the StarNesvr and will run through March 7. 8. Other Business President Gongoll noted that Cymbet's product is going to market. He also commended City staff on the redesigned City website. Adjournment There being no other business, President Gongoll adjourned the meeting of the Elk River Economic Development Authority at 5:54 p.m. Minutes prepared by Jessica Miller. -~ Tina Allard City Clerk