02-27-2004 EDAMHutchinson HCDC — An EDA
Board of Directors
Minutes of Meeting
Friday, February 27, 2004 at 7:00 a.m.
Members present in bold print:
Members:
Tim Ulrich Bob Windel Jim Haugen Don Walser
Duane Hoversten Keith Fischer Casey Stotts
Guests:
Vi Mayer Tina Vorlicek Ken Merrill Brig Knott, 3M
Mayor Torgerson Gary Plotz
Staff:
Lisa McClure, Interim EDA Director
Susan Rolander, EDA Intern
1. Tim Ulrich called the meeting to order at 7:00 a.m.
2. Review minutes of January 23, 2004 EDA Board meeting.
M/S /P: Haugen, Hoversten to approve the EDA Board minutes of January 23, 2004 as written.
3. Review Minutes February 2004 Finance Team meetings.
M/S /P: Fischer, Hoversten to approve the minutes from the February 2004 meeting as written.
4. Review Minutes of February 2004 Industrial Park meetings.
M/S /P: Windel, Haugen to approve the minutes from the February 2004 meeting as written.
5. Review Financial Statements
Ken Merrill reviewed the Financial Statements for the Board. Ken stated that there was little activity for
the EDA in January 2003. There is cash on hand of $136,831. There was no activity in the Economic
Development Loan Fund. The downtown Loan Fund has cash on hand of $760,999.
M/S /P: Walser, Windel to approve the Financial Statements.
6. Directors Report
Lisa McClure gave the following report:
A. State Theater: Red McMonagle is working on the theater and apartments. Lisa and Susan toured the
theater about three weeks ago and took some updated photos. Some of the original neon lights were
located behind the wall of the theater and are still in working condition. The seats are being reupholstered.
The projected opening of the theater is this summer, with the apartments becoming available this fall.
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B. Highway 7 Project: On Wednesday, February 18`h, a kick -off meeting was held at the HATS facility.
In attendance were city staff, project engineers, and MNDOT. The meeting gave a brief update of the
Highway 7 construction, and then went on to discuss utility issues in detail.
C. Harrington /Merrill House Committee: City staff and members of Historic Hutchinson will be
meeting on a monthly basis to come up with plans for the House. Susan wrote a grant for paint to get the
project started. An asbestos test on the house was negative.
D. Downtown Planning Taskforce: A committee of downtown business and property owners is meeting
on a monthly basis to determine the direction of downtown. A survey will be sent out to all business and
property owners at the end of next week. The Taskforce has also put together a lighting committee to
make a plan to present to the City. They will are looking at coordinating flags, banners, holiday lighting
and decorations with this lighting project. Another focus for downtown is the liquor store. A petition is
being circulated to keep the Liquor Hutch downtown, and to date has almost 150 signatures. A
presentation will be made at the City Council meeting on March 9th
7. Review Commercial Loan Application
A. Dostal Electronics: Larry Dostal of Dostal Electronics is requesting a loan of $11,055.52 for
electrical improvements. He currently has two existing loans. His financials had been previously
reviewed and approved by the Finance Team.
M/S /P: Walser, Windel to approve loan of $11,055.52 for Dostal Electronics.
8. Liquor Store Update
Gary Plotz and Ken Merrill explained the Fro - formas that Ken prepared, which details 3 liquor store
options:
1) 2 stores — current store and south end rented store
2) 2 stores — current store and south end owned store
3) 1 new downtown store
The Pro -forma was based on a store of 10,000 total square feet with 7,000 square feet of sales area at
$6.00 per square foot. A $1.4 million bond would be needed. Dakota Worldwide also did a Pro - forma,
and from their results, and they will likely recommend 2 stores.
There was a great deal of discussion of the pros and cons of 2 stores versus 1 downtown store. It was
mentioned that the liquor store should be near a major draw (i.e. restaurant, grocery store, etc). Possible
locations for the south store option were discussed, which included the Cub Foods building, between
Office Max and Cub, south of Applebee's, or south of Citizen's Bank. At this tome, the option of a rented
second store is probably not being considered. It was also mentioned that the south end of Hutchinson will
grow whether or not the liquor store develops a location there. The cost of land is also higher on the south
end than it is downtown.
9. 3M Expansion
Tim welcomed Brig Knott, Hutchinson 3M Plant Manager, and everyone present introduced themselves.
Brig explained the proposed prof ect to the board and brought aerial photos and a map of the current plant
to indicate where the expansion area was located. The expansion would be about 7'1,000 square feet, or
about 2 '/2 to 3 acres. The expansion area would contain manufacturing processes that are currently
located out of town.
Lisa explained that the EDA and 3M are pursuing a JOB Zone for this expansion. There are ten zones in
the State of Minnesota. In our zone, there are 60 communities and 4,000 acres. Since Hutchinson does
not have JOBZ designated acres, we will need to find a community, or combination of communities, who
would be willing to donate to us a total of 3 acres in order to complete this expansion. Lisa has been in
contact with DEED for assistance on pursuing the JOB Zone.
Benefits to 3M include exemptions of corporate franchise tax, income tax, sales tax, capital gains tax,
property tax, and employment tax credits for a period of 12 years beginning on January 1, 2004.
There needs to be a public notice announcing the JOB Zone. The resolution for the project will also be
presented to the School Board on March Ste, the City Council on March 9th, and the County Board on
March 16th
M/S /P: Stotts, Hoversten to approve EDA Board support of the proposed JOB Zone for 3M
expansion.
10. Industrial Park Team Update
Tim stated that the Wetherell property is being rezoned from R -'1 to I -1, for light industrial use. There is a
minor discrepancy in the legal description for this property that Lisa is working to have fixed. EDA staff
met with Cenex a few weeks ago. They seemed open to further discussion about moving their fertilizer
plant to the Stritesky property. Cenex will present this option to their board and get back to the EDA.
11. Chamber Update
Tina Vorlicek explained that the Chamber is looking into developing an internship position and working
with Ridgewater College to provide potential interns. The Chamber is also considering offering the
Employee Assistance Program (EAP), which would provide mental health services and training to area
businesses.
12. Other Business
Lisa McClure explained that one member on the Finance Team and one member on the Industrial Park
Team want to be excused from each committee. Lisa mentioned that each person had suggested an
alternative member, which will be looked into. Lisa also shared a thank you note from Crown Financial.
13. Set next meeting
The next meeting will be on Friday, March 26th at 7:00 a.m.
14. Adjourn
The meeting adjourned at 8:34 a.m.
Respectfully submitted,
Susan Rolander
EDA Intern