10-24-2018 EDAM
EDA Board Meeting
Main Conference Room – Enterprise Center
11:30 AM Wednesday, October 24, 2018
____________________________________________________________________________
MEETING MINUTES
Members present in bold.
Economic Development Authority
Financial Summary as of September 2018
EDA Board Members
Operations
Mike McGraw
Cash Available $105,450
Jonny Block
Reserved $56,736
Mike Cannon
Unreserved $46,213
Corey Stearns
Economic Development Loan Fund
Daron Vanderheiden
Cash Available $103,696
Chad Czmowski
Redline Systems Balance $10,079
Mary Christensen
Ashwill Industries Balance $10,564
Laser Dynamics Balance (forgivable) $23,000
Innovative Foam Balance (forgivable) $14,355
Downtown Revolving Loan Fund
Staff
Cash Available $470,043
Miles Seppelt, EDA Director
Loans Receivable $451,314
Matt Jaunich, City Administrator
Capital Assets $201,329
Andy Reid, Finance Director
Total Assets $1,122,686
Maddie Christie, EDA Program Manager
MIF Loan Fund
Cash Available $0
MOXY Loan Receivable $20,000
Enterprise Center Fund
Guests
Cash Available $26,843
Gus Wurdell
SHOPKO TIF District (TIF 4-5)
Cash Available $46,706
Interfund Loans Receivable $446,992
MEDICAL CLINIC TIF District (TIF 4-16)
Interfund Loan Payable $300,257
I. Call to Order
EDA Vice-President Jonny Block called the meeting to order at 11:34 AM.
II. Approve Agenda – no action.
III. Review Minutes
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a. September 19 Finance Team meeting:
M/S/P: Cannon, Stearns to approve the minutes as written. Passed unanimously.
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b. September 26 EDA Board Meeting
M/S/P: Block, Christensen to approve the minutes as written. Passed unanimously.
IV. Review of EDA Financial Statements
Finance Director Andy Reid provided an update on the EDA financials. (please refer to table)
Operating Supplies line item was $1,003 for September due primarily to Consul-General
Ito’s visit. About $800 will be reimbursed by the Minnesota Trade Office.
Overall EDA expenditures are up, primarily due to unemployment payments.
MIF Loan Fund: MOXY paid for three months ($714) and is now set up for monthly
electronic payments of their loan. This will show up in the October financials.
SHOPKO TIF – December will be last tax increment payment of about $50,000.
M/S/P: Czmowski, Vanderheiden to approve the financial report as presented. Passed
unanimously.
V. Director’s Report
A. Marketing Plan:
Facebook updates = 9 Twitter activity = 9, Website updates = 0
Social media has 291 likes on Facebook and 82 followers on Twitter.
B. Business Recruitment / Expansions – staff updated the board on recent contacts and conversations.
C. UPONOR Street Project Waiting for action from MN office of boundary adjust.
D. Farmer’s Market Board in place / writing up by-laws
E. Skilled Workforce Development Plan Numerous presentations & tours
F. DEED MN Magazine Advert Done.
G. Elena’s Bakery Closing in December.
H. BR&E Visits Six completed
VI. Medical Clinic Site Redevelopment
Staff presented a funding model for the Clinic site redevelopment project:
For the basic project (on the existing 1-acre lot):
Titanium Partners would invest $4-6 million for the residential-commercial
development
Costs for the city would include engineering design and construction of a new trail
segment & relocation of an existing sanitary sewer line. The city would also look to
recoup $300,257 in sunk costs incurred in the acquisition & demolition of the old
medical clinic. Total costs plus at 25% contingency would come to about $897,000.
Sources of revenue would be tax increment totaling over $1.1 million.
The larger version of the project would encompass the entire city block (2 acres),
assuming five privately owned houses could be purchased.
Titanium Partners would invest $8 - $12 million for a residential-commercial
development.
Costs would include the trail segment, sanitary sewer line, property acquisition &
demolition and recouping existing sunk costs. With a 25% contingency added total
costs would be approximately $2.14 million.
Sources of project funding would include a potential FEMA grant of about $438,000
and tax increment totaling about $2.2 million.
Staff worked with the developer, county assessor and the city tax increment financing
consultants to arrive at a projected amount of tax increment. To be conservative, this number
was reduced by 50% for the pro forma project budget.
Because the tax increment would flow in over 25 years, a combination of city bonding (for the
trail) and private bank financing (principle & interest to be paid via tax increments) would be
needed.
Staff also reported on the meeting with the property owners: meeting went well, there is a
level of interest from the property owners, none were willing to make a commitment at this
time, but all agreed that the process should move forward.
Staff has started work on the FEMA grant application.
Discussion followed.
VII. Hutchinson Enterprise Center
Staff reported that it was necessary to add a second key card reader to three doors entering
the Enterprise Center office area from surrounding production spaces. This is needed to
effectively secure the two separate tenant spaces abutting the offices. Currently the doors
cannot be secured from the office side and this creates a liability issue for the City. Finance
Team has reviewed the proposal and are recommending approval.
Discussion followed.
M/S/P: Czmowski, Stearns to authorize the needed improvements at a cost of $6,878.
Passed unanimously.
VIII. Grant & Loan Program Applications
Sign & Awning Grant
Main Clips (Gail Cox) – 43 Main Street N. $1,000
M/S/P: Cannon, Christensen to approve the grant. Passed unanimously.
Staff noted that sometime in the next 1-3 months there will probably be a loan application
for the Economic Development Loan Fund. Innovative Foam is looking at buying a
second foam cutting machine.
IX. Other Business – None.
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X. Set Next Meeting – 11:30 AM Wednesday, November 28, 2018
XI. Adjourn
M/S/P: Christensen, Cannon to adjourn the meeting at 12:29 PM. Passed unanimously.
Respectfully Submitted,
Miles R. Seppelt
EDA Director