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02-23-2001 EDAMHutchinson Community Development Corporation - an EDA Board of Commissioners Friday, February 23, 2001 7:00 a.m. at City Center Conference Room Minutes Board Members present are in bold print Don Walser Bob Windel Jeff Haag Jim Haugen Keith Fischer Duane Hoversten Tim Ulrich Chamber Rep: Vi Mayer, Hutchinson Chamber of Commerce HCDC Staff. Christie Rock, Executive Director 1. Call to order... President Tim Ulrich Tim Ulrich called the meeting to order at 7:03 a.m. 2. Approval of EDA Board of Commissioners minutes for December 21, 2000 Bob Windel made a motion to approve the minutes. Jeff Haag seconded the motion. Tim Ulrich asked for discussion. The motion passed. 3. Approval of January financial statements The financial statements were not available. Discussion was tabled until the March meeting 4. One - Motion Agenda Bob Windel made a motion to approve the One - Motion Agenda. Jim Haugen seconded the motion. Tim Ulrich asked for discussion. The motion passed. 5. Executive Director Update Christie provided an update of the projects she has been working on over the past month. Projects include the following: • Main Street Hutchinson organization — Visioning workshop • RFP for downtown comprehensive plan • RFP for feasibility study for industrial park expansion • American Energy Systems development proposal • Post office relocation project • Hutch Hotel redevelopment • Promotional brochures for grant and loan programs 6. Update on the USPS relocation project The United States Postal Service recently implemented a freeze on all capital expenditures. Effective immediately, the USPS has suspended all approval authority for all capital commitments until further notice. This means the Hutchinson post office relocation project is temporarily on hold. The United States Postal Service Board of Governors directed the Postal Service to undertake a thorough review of all programs and projects, and curtail or eliminate all nonessential activities. "Projected cash availability in fiscal years 2001 and 2002 will determine what capital commitments can be made in fiscal year 2001," says Richard Strasser, USPS Chief Financial Officer and Executive Vice President. The USPS is currently developing a formal process to address capital commitments for safety, health, legal and emergency situations. Once finalized, the USPS will communicate the process to cities working on post office relocation projects. 7. Considerations of applications to the Commercial Rehabilitation Loan Program There were two applications to the Commercial Rehabilitation Loan Program. Richard Peterson is seeking a loan for $1,612.34 for new insulation. Mr. Peterson provided a bid from Northern Insulation Products. Jeff Haag made a motion to approve the loan to Richard Petersen. Keith Fischer seconded the motion. Tim Ulrich asked for discussion. The motion passed. Quade Family Partnership is seeking $19,545 to remodel 101 Park Place. Kirk Quade submitted a bid from John Goldschmidt Construction. Keith Fischer made a motion to approve the loan. Bob Windel seconded the motion. Tim Ulrich asked for discussion. The motion passed. 8. Consideration of employment agreement with HRA Christie indicated that she would like to contract with the HRA for 10 hours of staff time per week. Christie offered the following as job responsibilities for the HRA staff person: • Attend monthly board meetings of the downtown planning and development organization • Assist with the preparation and distribution of board packets • Help organize initial meetings of the committees (Physical Appearance, Economic Development, and Marketing and Promotions) • Help with administrative duties such as preparing meeting notices and agendas for committee meetings, minutes and other correspondence as necessary • Help market and promote the new grant programs and the revised loan program • Work in partnership with the EDA director to conduct site visits with downtown business owners • Assist with the preparation of an RFP for a comprehensive plan for downtown Hutchinson • Help organize opportunities for citizen involvement in the comprehensive planning process • Work in partnership with the City's Planning and Zoning Department and Historic Hutchinson to establish an historic preservation district and commission • Work in partnership with the City's Planning and Zoning Department to revise the Zoning Ordinance to allow mixed use development in downtown Hutchinson Help prepare a Small Cities grant for downtown redevelopment projects Research other possible funding sources for the downtown planning and development organization Other miscellaneous projects as assigned After explaining the scope of the position, Christie presented an employment agreement to the Finance Team for their consideration. The agreement specifies what hourly wage and benefits the position would pay. The total hourly rate for wages and benefits is approximately $19.00 per hour. Jeff Haag made a motion to approve the employment agreement with the HRA. Bob Windel seconded the motion. Tim Ulrich asked for discussion. The motion passed. 9. Review proposed project for Miller /McGraw property Michael and Christine Haefner, owners of American Energy Systems, have inquired about the possibility of purchasing a portion of the remaining Miller /McGraw property. American Energy Systems makes corn stoves and fireplace inserts. The rising costs of gas and electricity have increased sales for this company, and they need to expand to accommodate demand. AMS provided Christie with a business plan and a potential site plan for the remaining Miller/McGraw parcel. AMS would like to build a 30,000 square foot facility and have land available for an additional 20,000 square feet. In order to accommodate the needs of AMS and not compromise the value of the property, the Finance Team suggested that the EDA plat the remaining parcels into two viable lots. Christie is having Jeff Rausch do another survey of the parcels to start the platting process. Christie also schedule a one -stop shop meeting with AMS and city staff for March 6, to review their site plan. Duane Hoversten made a motion to approve platting the land into two viable lots. Jim Haugen seconded the motion. Tim Ulrich asked for discussion. The motion passed. Christie indicated that the Haefner's had also inquired about financial incentives. She wanted the Board's perspective on the use of the Land Write -Down for this project. The land is valued at $20,750 an acre. The proposed development needs approximately three acres. Under the Land Write -Down program, the Haefner's would pay for 1/3 of the value of the land. They would finance the remaining 2/3 through a deferred forgivable mortgage. The Board also concluded that assessments and demolition costs be added into the value of the property. Jeff Haag made a motion to approve the use of the Land Write -Down program, and recommended that assessments and demolition costs be included in the value of the property when determining the purchase price. Bob Windel seconded the motion. Tim Ulrich asked for discussion. The motion passed. 10. Development inquiries A company called RAM Center is looking to relocate and expand an existing subsidiary business to Hutchinson. They are seeking approximately a 50,000 square foot facility. The company plans to retain 43 existing employees and hire an additional 30. The new employees would include production workers and management. They would like the local development authority to construct the facility and sell it back to them for $1.00. Hutchinson is competing with Granite Falls and Red Wing, Minn. Christie would follow up with the CEO. 11. Chamber report Vi Mayer gave an update of the following Chamber activities: • Continued search for new office space • Arts and Crafts • Leadership Development Program • Agri- Business • Windows on Main • Crow River Quality Council • Jefferson Bus Line 12. Next meeting The next meeting is March 30, 2001. 13. Adjournment A motion was made to adjourn the meeting. The motion was seconded. The meeting adjourned at 8:10 a.m. Respectfully submitted, Jim Haugen, Secretary /Treasurer