03-10-2008 EDA MINMEETING OF THE ELK RIVER
ECONOMIC DEVELOPMENT AUTHORITY
HELD AT THE ELK RIVER CITY HALL
MONDAY, MARCH 10, 2008
Members Present: President Gongoll, Commissioners Dwyer, Farber, Motin, Tveite, and
Zerwas
Members Absent: Commissioner Klinzing
Staff Present: Director of Economic Development Catherine Mehelich, City
Administrator Lori Johnson, Finance Director Tim Simon, Planning
Manager Jeremy Barnhart, and Recording Secretary Debbie Huebner
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 Agenda
MOVED BY COMMISSIONER FARBER AND SECONDED BY
COMMISSIONER ZERWAS TO APPROVE THE MARCH 10, 2008 EDA
AGENDA. MOTION CARRIED 6-0.
3. Consider Consent A eg nda
MOVED BY COMMISSIONER MOTIN AND SECONDED BY
COMMISSIONER DWYER TO APPROVE THE CONSENT AGENDA AS
FOLLOWS:
3.1. FEBRUARY 11, 2008 REGULAR MEETING MINUTES
3.2. CHECK REGISTERS
3.3. BALANCE SHEET
3.4. REVENUE/EXPENDITURE REPORT
3.5. PAY ESTIMATES (YMCA)
MOTION CARRIED 6-0.
4. Open Mike
No one was present for open mike.
Consider Resolutions Approving the Decertification of TIF District No 6 and TIF District
No. 7 in the City of Elk River
Director of Economic Development Catherine Mehelich explained that the EDA is asked to
consider two resolutions; the first is to approve the decertification of TIF District No. 6 for
Mork Clinic, and the second is to approve decertification of TIF District No. 7 for
AmericInn. Ms. Mehelich provided background information on both projects. She stated
that the bond obligations have been recently paid and it is necessary to decertify the TIF
Economic Development Authority Minutes
March 10, 2008
Page 2
Districts at this time. Ms. Mehelich noted that after decertification, all local property taxes
generated by these properties (estimated at $61,000 combined) will be distributed to the
school, county and city in the same manner as all other property taxes.
MOTION BY COMMISSIONER DWYER AND SECONDED BY
COMMISSIONER FARBER TO APPROVE RESOLUTION 08-01, A
RESOLUTION APPROVING THE DECERTIFICATION OF TAX
INCREMENT FINANCING DISTRICT NO. 6 WITHIN DEVELOPMENT
DISTRICT N0.1 IN THE CITY OF ELK RIVER. MOTION CARRIED 6-0.
MOTION BY COMMISSIONER DWYER AND SECONDED BY
COMMISSIONER MOTIN TO APPROVE RESOLUTION 08-02, A
RESOLUTION APPROVING THE DECERTIFICATION OF TAX
INCREMENT FINANCING DISTRICT NO.7 WITHIN THE DEVELOPMENT
DISTRICT NO.1 IN THE CITY OF ELK RIVER. MOTION CARRIED 6-0.
6. Call Public Hearing for Disposition of EDA Property (Lot 4, Block 1 Northstar Business
Park) for Sportech. Inc. Expansion Project
Ms. Mehelich reviewed Sportech, Inc.'s proposed project to relocate their business in the
Northstar Business Park. They are looking at an 80,000 square foot facility, which could be
expanded up to 120,000 square feet. Spring 2008 constructed is proposed, with occupancy
in the fall. Sportech is working with Amcon Construction on their project. They have
indicated they will retain the existing 68-full time positions and create 25 new full-time jobs
within 2 years of project completion.
Ms. Mehelich explained that Sportech proposes purchasing Lot 4, Block 1 Northstar
Business park for $1 and that the EDA would reimburse itself through city and county tax
abatement revenues generated over the approximately 10-year period. Staff is working with
Tom Bray of Briggs & Morgan to draft a purchase agreement for sale of the EDA property.
Ms. Mehelich stated that the expansion project will involve finance participation from the
company's lender and the following public financing applications:
• City of Elk River Tax Abatement (land purchase)
• Sherburne County Tax Abatement (land purchase)
• EDA Micro Loan (equipment)
• City application to the MN Dept. of Employment & Economic Development
(DEED) for a MN Investment Fund loan (equipment)
Ms. Mehelich explained that state statute requires a public hearing prior to the sale of
property, review building plans and specs, and a reversion clause if the project is not
completed as agreed. Therefore, the EDA is asked to call this hearing for April 14, 2008.
She noted that all requests will be coordinated so that they can be reviewed for approval at
one time.
Commissioner Motin asked if the tax revenue over the 10-year projection amount was close
to the $800,000 range, in order to fully recoup the land cost. Ms. Mehelich stated that the
project costs have changed slightly and inflation rates need to be factored in. This will be
part of the due diligence analysis when it comes back for final approval next month.
Economic Development Authority Minutes
March 10, 2008
Page 3
Ms. Mehelich stated that staff supports the request since the special assessments have been
paid off and the EDA is in a good cash position. Also, The City is able to retain a viable
business in the community.
MOTION BY COMMISSIONER TVEITE AND SECONDED BY
COMMISSIONER FARBER TO CALL A PUBLIC HEARING FOR MONDAY,
APRIL 14, 2008 AT 5:30 P.M., REGARDING THE PROPOSED DISPOSITION OF
9.29 ACRES OF EDA PROPERTY LOCATED AT LOT 4, BLOCK 1
NORTHSTAR BUSINESS PARK FOR THE SPORTECH, INC. EXPANSION
PROJECT. MOTION CARRIED 6-0.
Update on Proposed Entertainment Center Project
Ms. Mehelich stated that staff has received an application for tax abatement from the
developers of the proposed entertainment center and hotel project. She stated that the
application is currently under review by the City's finance advisors, Ehlers & Associates, and
they will report back to the EDA on the application in April.
President Gongoll asked if there have been any substantial changes to the proposal. Ms.
Mehelich stated that originally, the developers were looking at only the city-owned (14 acre
of 60 acre parcel) portion of the property, and now they are also considering adding adjacent
privately owned property for better visibility from Highway 10. Also, the original request for
$3 million in assistance is now approximately $7 million. Ms. Mehelich stated that since this
is such a large public financing assistance project, there are a number of public polity
questions that will need to be addressed prior to proceeding.
8. Update on Gateway Business Center Project
Planning Manager Jeremy Barnhart reviewed the sketch of the Gateway plat comprised of
three outlots. Mr. Barnhart noted that they can still replat the property with adjacent
properties in the future if that is desired.
Commissioner Motin asked if the access to Highway 10 was still there. Mr. Barnhart stated
yes.
MOTION BY COMMISSIONER TVEITE AND SECONDED BY
COMMISSIONER ZERWAS TO ACCEPT THE FINAL DRAFT OF THE
GATEWAY PLAT AS PRESENTED IN THE MARCH 10, 2008 MEMO TO THE
EDA. MOTION CARRIED 6-0.
Other Business -None
10. Adjournment
There being no other business, President Gongoll adjourned the meeting of the Elk River
Economic Development Authority at 5:47 p.m.
Minutes prepared by D bie Huebner.
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Tina Allard. City Clerk