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02-25-2005 EDAMHutchinson EDA Board of Directors Minutes of Meeting Friday, February 25, 2005 at 7:00 a.m. Members present in bold print: Members: Tim Ulrich Steve Jansick Jim Haugen Duane Hoversten Casey Stotts Mike McGraw Staff: Miles Seppelt, EDA Executive Director Crystal Foust, EDA Intern L Tim Ulrich called the meeting to order at 7:04 a.m. II. Approve Agenda Agenda not revised. No action taken. III. Review and Approve Meeting Minutes a. Review minutes of January 28th, EDA Board meeting. Don Walser MIS/P: Haugen, Hoversten to approve the minutes from the December 23rd, 2004 EDA Board meeting as written. b. Review minutes of January 19th, EDA Finance Team meeting. M/S /P: McGraw, Haugen to approve the minutes from the January 19th, 2004 EDA Finance Team meeting as written. c. Review minutes of December 28th and February 1st, 2004 Industrial Park Team meeting. M/S /P: Hoversten/Jansick to approve the minutes from December 28th and February 1", 2004 Industrial Park Team meeting as written. IV. Review January Financial Statements — Miles Seppelt gave the following report: • Pg. 1 is the balance sheet for EDA Operations listing the cash available as $102,951. • Pg. 2 and 3 is the statement of January revenues and expenditures. Every line item is within the budget. The only revenue for January was rental income of $500 from the Wetherell property. The only expenses were salaries and fringe benefits totaling. • Pg. 4 EDA currently has a balance of $141,910 for cash available. $7,500 can be added to the balance that was received from Allied Mechanicals recently. • Pg. 5 Currently for the Downtown Loan Fund, the cash available is $607,484. This balance does not reflect recently approved funds for multiple loans totally $147,154. The actual unencumbered balance is $460,329. M/S /P: Walser, Jansick to approve the January Financial Statements as presented. V. Directors Report Miles Seppelt gave the following updates: A. Liquor Hutch: The architects at Tushie Montgomery are working on the design details of the project. The geotechnical report and survey have been completed on the site. Miles anticipates going to the City Council March 8th to get permission to close on the adjacent property. B. Rix Corner Redevelopment: The project has shown a lot of activity in the last six months. Miles has a business plan for the project. Miles should receive confirmation of a bank approval for the project in the next week to week and a half. The Finance Team will have to meet for approval from the EDA. C. State Theater: The theater is about 95% complete. The concession is done and tiling needs to be done in the lobby. Apartments are finished and the cabinets are being put in. In the theaters, the chairs, screen, and drapes need to be put in. April 1St is the anticipated date for total completion. D. Hutchinson Hotel: The construction is moving forward. All the ductwork and the electrical work are finished. The project should be completed by May 1St — May 15tH E. Downtown Streetscape Project: The project got approval from the City Council on February 11th to proceed to the design phase and to get bids. City staff had the first kick -off meeting to discuss design elements of the project. The exact prices and assessments quantity will come in the end of May. The project will be presented to the City Council for the final approval in June. August 1St will be the intended start date. F. Spec Building Project: The Spec Building Team and the Industrial Park Team have discussed the business plan. The Industrial Park Team approved the concept of the spec building and present the business plan to the EDA Board in February's monthly meeting. The next step is to bring the business plan to the Finance Team for approval. There are other issues to discuss first. G. Cenex consolidation project: Research is currently being done to find out the cost of relocation. H. New business recruitment: Miles has a couple of prospects for the industrial park. VI. 2004 Annual Report The report is a summary of what happened in the year 2004 for the EDA. Project updates are included in the report including business retention, state theater, Rix corner redevelopment and downtown streetscape project. The Finance Team and Industrial Park Team activities are included as well. A spreadsheet demonstrating the grant and loans distributed in 2004 is also included in the report. In 24 months, a total of $10 million will be invested into the downtown. M/S /P: Walser, McGraw to approve the 2004 Annual Report as presented. VII. Subordination Request from Citizens Bank Miles read through a letter from Citizens Bank requesting subordination. The board agreed to have the Finance Team review it at the March monthly meeting. The item was tabled. VIII. Midwest Tae Kwon Do Midwest Tae Kwon Do currently occupies the space where the Liquor Store will be expanding. The City of Hutchinson would buy the property. The city is then entitled to fund relocation expenses under the law. A request was proposed to the EDA for an additional $7,000, which is equivalent to 1 Storefront Matching Grant and 1 Sign Grant. The $7,000 would be used for leasehold improvements in the building. Discussion took place about the proposal. The Finance Team recommended approval for the $7,000 supplemental funding. WHEREAS the Hutchinson City Council requested that the Economic Development Authority look for ways to provide additional financial assistance to Midwest Tae Kwon Do, and; WHEREAS Midwest Tae Kwon Do will face an undue financial hardship resulting from this relocation, and; WHEREAS it is important that Midwest Tae Kwon Do cooperate with the City on its Liquor Store expansion and relocate in a timely manner, and; WHEREAS the expansion of the municipal Liquor Store in Downtown Hutchinson is a priority of the EDA and must be completed by November 1St, and; WHEREAS an incentive made to Midwest Tae Kwon Do will greatly facilitate these efforts, M/S /P: Hoversten /Jansick to approve the contribution to the city up to $7,000 in grants to facilitate the Liquor Hutch project. IX. Prioritizing Economic Development Projects (Discussion) The current cash on hand in the EDA Downtown Loan Fund is $460,329. There are not enough funds to contribute to all the projects anticipated for 2005. The board discussed what the EDA sees as a priority and also some funding alternatives. The cost of building a spec building is larger than anticipated. Discussion took place about the direction of the Industrial Park. The Spec Building business plan needs to be reviewed for future reference. X. Chamber Update a. The building committee is working with the Chamber weekly to set up the hotel space that they are going to occupy in May. b. Next week there is a Connections Meeting. c. On March 7th. Marc Kohl is coming to speak at the Ag Seminar 2005 at the Peace Center. d. The Sportsman's Show that took place 2 weeks ago was a success. e. The SnoCross took place at the fairgrounds last weekend. It was a major success. The show in Wabasha has been canceled due to lack of snow and moved to Hutchinson this weekend. (February 25- 27). f. The Home and Garden Show will take place this weekend (February 25 and 26) at the fairgrounds. g. The Crow River Area Quality Council will present a seminar on the future of genetics at the Event Center on March 16tH XI. Other Business • Crystal Foust is applying for a grant through Valspar and Southwest Minnesota Foundation. It was requested to have the EDA be the sponsoring agent for the mural for the grant application. M/S /P: Jansick, McGraw to approve to be the sponsoring agent for the mural grant. XIL Next meeting March 30th, 2005, 7 am. XIII. Adjourn The meeting adjourned at 8:25 am. Respectfully submitted, Crystal Foust EDA Intern 4