02-28-2024 EDAM EDA Board Meeting
Hutchinson Enterprise Center
11 :30 AM Wednesday, February 28th, 2024
MEETING MINUTES
Members present in bold.
EDA Board Members
Operations,
Mike McGraw Cash Available $210,623
Jonny Block Reserved $56,736
Mike Cannon Unreserved $180,677
Corey Stearns Economic Development Loan Fund
Chad Czmowski Cash Available $219,806
Pat May
Jack Daggett Zephyr Wind Services $46,297
Jeremy Carter FireLake Mfg. $28,117
Laser Dynamics Balance (partially forgiven) $0
Staff Innovative Foam Balance (2025) $8,355
Miles Seppelt, EDA Director Downtown Revolving Loam Fund
Matt Jaunich, City Administrator Cash Available $430,705
Andy Reid, Finance Director Loans Receivable $290,633
Guest Capital Assets 201 329
Liz Danielson, McLeod County Economic Total Assets $1,070,160
Development Coordinator M'IF Loan,Fund
Cash Available $13,421
I. Call to Order MOXY Loan Receivable $5,006
Meeting called to order at 11:30 AM. Enterprise Center Fund
II. Review Agenda Cash Available $29,870
SH RKO°TIF District(T,IF 4-5)
Liz Danielson gave an update on county economic Cash Available $13,730
development activities. Interfund Loans Receivable $434,772
Ill. Review Minutes
a. January 17th Finance Team meeting
MIS/P: Cannon, Czmowski to accept the minutes as written. Passed unanimously.
b. January 24th EDA Board Meeting
MIS/P: Block, May to accept the minutes as written. Passed unanimously
IV. Review of EDA Financial Statements(Please refer to table)
A. 2023 Year-end
■ EDA finished the year with a positive cash balance in operations of$94,833. This is made up of$35,000
childcare grant, savings from not having Maddie on staff, unused dollars from the Project 9500 employee
recruiting initiative.
■ Enterprise Center finished the year with a negative cash flow of$371 and cash on hand of$27,155.
Discussion of transferring$5,000 to the Building Maintenance Fund.
MIS/P: Block, Cannon to transfer$5,000 in Enterprise Center cash to the Building Maintenance Fund. Passed
unanimously.
B. January 2024
■ Line items for the EDA's downtown programs have been added to the EDA Operations Budget. Any
remaining dollars in those line items will be transferred to the DT Loan Fund at year end.
M/S/P: May, Cannon to accept the financial report as presented. Passed unanimously.
V. Director's Report
A. Marketing Plan—883 likes' on FB; 4 website updates, 12 FB postings
B. Business recruitment/expansions-Staff provided an update on recent prospects and ongoing
conversations
C. Enterprise Center/AURI opportunity—The Agricultural Utilization Research Institute(AURI) is very
interested in partnering with the Enterprise Center to create a mid-size contract manufacturing facility for food &
beverage manufacturers. Currently they're planning a research study to assess the need for such a facility in
Minnesota.
D. Jorgensen Hotel-$150K redevelopment grant application submitted to DEED
E. FEMA reimbursement-$51,375 received
F. Enterprise Center Card Reader replacement—coming in cheaper than expected, should be less than
$10K
G. Enterprise Center painting—being done this week, estimated cost of$2,675
H. Human Resources Roundtable—meeting held earlier this month, 10 in attendance, next meeting in April
I. The Day's Inn has a new owner who will be making significant investments to modernize the facility.
VI. Report on TIF District 4-16
Staff provided a report on the status of TIF District 4-16/Clinic Site Redevelopment:
■ 11 copies of the RFP have been distributed to various developers
■ At least four developers have conducted site visits
■ Funding for acquisition/demolition/site improvements was planned to come from the Redevelopment TIF District
established on the site in 2016.
■ Ehlers &Associates, the city's TIF Consultant, indicated that the proposed apartment project would generate
about$4.1 million in tax increment over the life of the TIF District.
■ What they failed to tell us however was that expenses can be only be incurred within the first five years of the TIF
District. August 2021 was the cutoff date.
■ With that limitation, we have$437,396 of tax increment to use plus another$248,294 of"pooling"we can access.
Total available from TIF is$685,690.
■ Past expenses incurred are covered, with the exception of some engineering costs related to the planned
stormwater retention pond. These will be covered by the city's stormwater fund instead.
■ Future expenses, which we had planned to cover with TIF, (stormwater pond, sewer realignment&street
improvements)will have to be funded in some other way instead.
■ Staff is looking into grant resources to offset some of these costs.
■ Another option would be to take down the existing TIF District and putting up a Housing TIF District in its place.
The Project Timeline was reviewed:
■ The TIF District was established in early 2016
■ Clinic building was purchased in late February 2016 and demolished that May. Franklin House was acquired in
December 2021 and the five houses on the west side of the block during the summer of 2023.
■ The five-year deadline to incur TIF-reimbursable expenses was the end of August, 2021.
■ Expenditures made up to that date(property acquisition/demolition)are covered
■ Several developers looked at the site from mid-2016 thru 2019
■ In September 2020 the Mullins Group(Matt Ward) submitted a development proposal that was accepted by the
EDA. Purchase and Development Agreements were signed in mid-2021.
■ In the midst of this, FEMA approached the City with a grant opportunity to acquire properties on the west side of
the block.
■ The grant was tentatively approved, pending the completion by McLeod County of an updated Hazard Mitigation
Plan. This delayed final approval of the grant by nearly 18 months.
■ Several months later a global pandemic struck, which led to supply-chain disruptions, higher material costs due to
inflation and higher interest rates.
• With the$672K FEMA Grant approved, the city began the process of acquiring five properties to expand the
project area in 2023.
• At the close of 2023 the Developer, Hutch Uptown Grand, indicated they could not move ahead for at least two
years because of continued high materials prices and high interest rates. The existing Development Agreement
expired on December 31st and the property will revert back to the City.
■ In early February a new RFP was distributed with a due date for proposals of May, 2024.
■ Once the City has a new developer on board, they will move ahead with needed site improvements in the first half
of 2025.
Discussion.
VII. Jump-Start Downtown Discussion
■ Staff did a survey of downtown storefront vacancies and didn't find too many.
■ Finance Team suggested we revisit the idea in six months or so—EDA Board concurred.
VIII. Proposed Child Care Business Initiatives
A. The Childcare Business Lab
B. Childcare Business Grant Program
Background information on the childcare situation was provided:
■ Definitions of Family Childcare, PODs &Childcare Centers were reviewed
■ The cause of the shortage in childcare slots is a significant decline in the number of Family Childcare
Businesses operating. This is true in both rural and metro areas.
■ In the Twin Cities however, this gap is being filled with new Childcare Centers.
■ In rural areas, the number of Childcare Centers is staying basically the same. Combined with the decline in
Family Childcare businesses we get a net loss of childcare slots.
Staff provided an update on current activities:
■ The Childcare Business EXPLORE workshop was held last week: 7 people registered, 3 showed up and 1
has decided to launch a new family childcare business.
■ Renee Graff will be opening a new Family Childcare business in the next two months or so. She is working
her way through the licensing process now. This will create about 10 new slots in the community.
■ In addition, discussions are underway with Ridgewater College to potentially start either a childcare pod on
the main campus or possibly a childcare center at Ridgewater East.
■ A local church is exploring how to reopen their childcare center(about 70 slots)
■ The Childcare Coalition is looking at a building owned by Rich Westlund as a possible location for two
childcare pods. This may not work out however due to economic considerations.
■ DEED has a Childcare Grant program that could provide up to$300,000 to fund needed renovations
The proposed Childcare Business Lab would be a sustained effort to create new childcare businesses,
basically a"virtual" childcare business incubator. Existing resources would be used, so the EDA's role would
primarily be marketing and organizing future workshops. Childcare experts would deliver the content/training.
The next step in this effort would be to organize another Childcare Business EXPLORE workshop about 90 days
from now.
Staff outlined the proposed Childcare Business Grant Program
■ This would be a one-year pilot program to test the concept
■ $10,000 would be allocated to fund up to five$2,000 grants to assist childcare business start-ups
■ Funding would come from the EDA Operations budget.
■ The existing rules and paperwork from our Childcare Forgivable Loan program would be repurposed
■ The goal is to lower the barriers to entry for new childcare business start-ups
Finance Team directed staff to frame up the program and bring it back next month for consideration.
IX. Grant& Loan Program Applications
Sign &Awning Grant Program
North Star Foundation Properties, LLC—Josh Fahey $661
6 Franklin Street NW
M/S/P: Block, Czmowski to approve the grant. Passed unanimously.
X. Other Business—NONE
XI. Set Next Meeting— 11:30 AM Wednesday March 27th 2024.
XII. Adjourn-M/S/P: May, Block to adjourn the meeting at 1:00 PM. Passed unanimously.
Respectfully Submitted,
Miles R. Seppelt
Economic Development Director