05-30-2003 EDAMHutchinson HCDC — An EDA
Board of Directors
Minutes of Meeting
Friday, May 30, 2003
Members present in bold print:
Members:
Tim Ulrich Bob Windel Jim Haugen Don Walser
Jeff Haag Duane Hoversten Keith Fischer
Guests:
Matt McMillan Vi Mayer Cary Linder
Staff:
Marc Sebora, City Attorney
Miles Seppelt, EDA Director
1. Tim Ulrich called the meeting to order at 7:06 AM
2. Review minutes of EDA Board meetings.
M/S/P: Walser, Haugen to approve the EDA Board minutes of April 25, 2003.
M/S/P: Hoversten, Fischer to approve the minutes of the EDA Board special meeting held on May 8,
2003.
3. Review minutes of Industrial Park Team meetings.
M/S/P: Windel, Haag to approve the Industrial Park Team Meeting minutes of April 30, 2003.
4. Review minutes of Finance Team meetings.
M/S/P: Ulrich, Haag to approve the Finance Team meeting minutes from May 1, 2003.
M/S/P: Fischer, Windel to approve the Finance Team meeting minutes from May 21, 2003.
5. Review Financial Statements
Miles had forgotten to bring the report to the meeting. The report ending April 30, 2003 will be
reviewed at the June meeting of the HCDC.
The EDA Director noted that the Finance Team had reviewed and approved the report for April.
1
City attorney Mark Sebora updated the Board on the acquisition of land for the Industrial Park:
On June 11 & 12 there will be a meeting with the Commissioners in Glencoe.
Mr. Hackbarth's attorney is trying to use past offers for the land as a basis of determining its
value. By statute, this is not admissible as evidence.
Mark will meet with Jim Robinson to review the Hackbarth appraisal and see what flaws it might
have.
There was general discussion about the process.
Tim Ulrich reported that he had been left a message by Marvin Hackbarth, but that he has not called him
back.
M/S /P: Walser, Hoversten to authorize Tim Ulrich to contact Marvin Hackbarth to discuss the situation.
Depending on the result, there may be a special meeting of the EDA Board.
6. Directors Report
Miles Seppelt gave his report:
A) There have been no BR &E visits in the last month due to time constraints and an abundance of
projects.
B) A new HCDC web -site has been put together (Miles gave a brief demonstration) and should be
posted to the internet later that day.
The Board indicated that they would like the "Goebel" land next to the industrial park added to the
web -sites industrial park map.
C) The Petition Drive is underway for the Special Services District. The Hutchinson Downtown
Association is spearheading this and there is a June 20`h deadline for petitions to be in. If enough
petition signatures are collected to bring the matter to the City Council, then any opposition to the
district will have a 45 -day window in which to assemble a counter petition.
D) Tushie — Montgomery has been chosen as the architect for the new municipal Liquor Store.
Appraisals for the lots that the city needs to aquire for the project are due in the first week of June and
we hope to purchase the properties by July 1.
E) We are currently working with a number of prospects. These are:
1. Standard Process Equipment, Inc. — needs 5,000 square feet of manufacturing space and is
currently look at leasing space in the "Pro- Maintenance" building. Would very much prefer
to build a facility of their own.
2. Water Monitor, Inc. — needs 5,000 square feet of office space for a customer serves & Billing
Center. A CVN Company.
3. Measurement Technology Laboratories Corporation — needs 5,000 square feet of office space
for a research & development lab. A CVN Company.
We are looking at the Hotel as a possible location for the companies needing office space and will
try to get representative out to Hutchinson ASAP for a tour.
Miles reported that finding prospects is the least of his worries; finding available land and building
space was the major stumbling block.
F) The State Theater project is moving forward, although the closing on the property will have to be
delayed for a couple of weeks. The appraisal on the completed project was due any day now, and that
is the last piece needed for the SBA to approve their portion of the financial package.
G) Miles reported that he has been called up to active duty in the Army for peacekeeping operations
overseas. He will work until June 27`h and then have two weeks to prepare for deployment. He ships
out in mid -July.
This last item was discussed briefly and it was agreed that we should bring Lisa McClure in as the
interim EDA Director as soon as possible. Miles will work with Brenda Ewing to make this happen.
8. Grant & Loan Applications
A. Grants — Sign & Awning
1) Maria Oman
$1,015
This was to authorize the full $2,000 for her sign & awning improvements; she had mistakenly
requested only $985 — which was approved last month.
M/S/P: Haag, Windel to approve the requested amount of $1,015 to bring her total grant up to the
$2000 limit.
2) Red McMonagle (State Theater) $2,000
M/S/P: Fischer, Haag to approve the grant request for the State Theater in the amount of $2,000 —
pending closing on the property.
3) Family Rexall Drug (Brad Lueneburg)
$2,000
4) Hanjam Law Office (Brad Lueneburg)
$2,000
5) MinnSewTaVac (Brad Lueneburg)
$2,000
M/S /P: Haugen, Windel to approve the requested amount of $2,000 for each of the three
businesses located at that property.
B. Grants — Storefront Matching
Red & Linda McMonagle (State Theater) $5,000
M/S /P: Hoversten, Haag to approve the requested amount of $5,000 for the State Theater,
pending closing on the property.
C. Loans
Red & Linda McMonagle (State Theater) $130,000 @ 2% for 10 years
M/S/P: Windel, Haag to approve a loan in the amount of $130,000 at 2% for 10 years for the
State Theater, contingent on Mr. McMonagle closing on the property.
9. Industrial Park Team Update
Cary Linder provided a brief update:
The industrial park team is in the process of doing some research to determine the current
market for land. As part of this process, they will bring in a builder (possibly from Raske
Builders) to talk about current demand.
The Team discussed placement of infrastructure and determined that it would be best to
place the north/south road on the Hackbarth property line.
The next step in developing the industrial park is getting a preliminary plat done of the entire
area and this is what the Industria Park team is recommending.
The EDA Board discussed development of the industrial park and placement of infrastructure. There
was agreement that the north/south road should be placed on the property line if it is feasible to do so.
The Board also agreed that a preliminary plat is the appropriate next step, as it will provide the
information needed for future planning of the industrial park.
The EDA Director noted that it would cost approximately $14,000 to have a preliminary plat prepared
and that this money could come out of the EDA operating budget. We will then track these
expenditures and reimburse ourselves as the land is sold for industrial development.
M/S/P: Walser, Windel to approve the expenditure of up to $14,000 to have a preliminary plat of the
area put together.
10. Special Services District Update
Matt McMillan provided a brief update on the Special Services District initiative and
listed the property owners who had already signed the petition to create the special services district.
There was some brief discussion of the special services district in general.
11. Review and Update TIF Policy
The EDA Director reported that the HCDC had in place a policy that required the payment of $5,000
from developers requesting financial assistance from the city, specifically for the use of tax
increment financing. Since the city has the legal authority to take 10% of the tax increment for
administrative expenses already, do we still need to ask developers for the $5,000? Also, is the
policy "customer friendly ?" Perhaps the policy should be repealed.
The EDA Board discussed this.
Duane Hoversten suggested that it would be a good idea to retain the policy to insure that we are
dealing with serious developers only.
Other members of the Board indicated that perhaps the policy should be modified, at least as it
relates to Redevelopment TIF Districts, to make the imposition of the fee optional — to be decided by
the EDA Board on a case -by -case basis.
C!
The EDA Director asked if we retain the policy, would we still take 10% of the tax increment for
administrative purposes, as this would be — in effect — double charging?
Further discussion ensued.
M/S /P: Walser, Haugen to recommend to the City Council that EDA Policy A006 be modified to
give the HCDC the authority to waive the $5,000 developers fee for "Redevelopment Tax Increment
Financing" projects. Passed unanimously.
The EDA Board agreed to review the entire policy at a future date.
12. Discussion of revising the designated boundaries of the Downtown
The EDA Board briefly discussed the idea of revising the designated boundaries of the downtown to
match those of the proposed special services district. This would expand the boundaries of the
downtown loan & grant programs as well.
The consensus was that the Board would consider this question if and when the Special Services
District is actually established.
13. Adjustment of Downtown Commercial Rehabilitation Loan Program Rule
The EDA Director reported on a possible "quirk" in the rules for the Downtown Commercial
Rehabilitation Loan Program.
There is a rule that states:
"The applicant can use no more than $20, 000 of the loan for interior improvements. "
Presumably the rule was enacted to ensure that the majority of the funds provided would be spent on
improvements that could be seen from outside.
However, if an applicant received a loan for just $20,000 — or any amount less than that — they could
spend the entire amount on interior improvements.
Would it make sense to amend the rule to say:
"The applicant can use no more than 30% of the loan for interior improvements. "?
This would ensure that most of the funds provided would be used for exterior improvements.
The EDA Board discussed this and decided to reconsider the question at next month's meeting.
14. Other Business
A) The EDA Director asked for guidance on an invoice.
B) Keith Fischer reported on his trip to see the Community Venture Network
C) Tim Ulrich reported that there was a 250' x 200' lot available on the north edge of the current
industrial park, just north of the Luce Line Trail and east of Michigan Street.
D) Jeff Haag provided a brief update on plans to renovate the Hotel.
E) Vi Meyer reported on Chamber activities.
15. Set next meeting
The next board meeting is scheduled for June 27, 2003 at 7:00 a.m.
16. Adjourn
The meeting adjourned at 9:14 AM.
Respectfully submitted,
Miles R. Seppelt
EDA Director