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01-26-2007 EDAMEDA Board of Directors Minutes of Meeting Friday, January 26, 2007 Members present in bold print: Members: Tim Ulrich Steve Jansick Jim Haugen Duane Hoversten Casey Stotts Mike McGraw Staff: Miles Seppelt, EDA Executive Director Brian Warzecha, EDA Assistant Marc Vaillancourt, Chamber /CVB I. Tim Ulrich called the meeting to order at 7:04 a.m. II. Board Organization — Elect New Officers o President — Tim Ulrich o Vice President — Mike Mcgraw o Treasurer — Steve Jansick o Assistant Treasurer — o Secretary — EDA Intern III. Approve Agenda- No action IV. Review and Approve Meeting Minutes a. Review minutes from December 29`h EDA Board Meeting Diane Gordon MIS/P: Jansick, Hoversten to approve the minutes from the December 29th 2006 EDA Board meeting as written. Passed unanimously. b. Review minutes from December 20`h Finance Team Meeting M/S /P: Jansick, McGraw to approve the minutes from the December 20th, 2006 Finance Team Meeting as written. Passed unanimously. V. Review December Financial Statements Mr. Seppelt gave the following report: o On Pg 1 under operations for the EDA, there is $132,947 cash on hand. The total fund balance as of October 31, 2006 is $339,405. Total Mortgages Receivable is $76,608. o Pg 2 and 3 is the statement of revenue and expenses. The EDA continues to collect $500 each month for the Wetherell Property. The EDA spent down a total of $114,801 for the month of December. The EDA has spent down a total of $54,461 for the year of 2006. o Pg 4 under the EDA Loan Fund, the cash on hand is $122,669. The EDA has generated a fund balance of $211,986 for the year of 2006. o Pg 5 under the EDA Downtown Loan Fund, cash on hand is $596,215. Mortgages receivable is currently $633,633. $110,457 has been collected this year for loan repayments. A total of $45,508 has been paid out thus far in 2006 including loans, downtown grant program, and miscellaneous. The balance sheet reflects revenues of $64,946 above expenditures. EDA Board Meeting January 26, 2007 Page 2 of 4 M/S /P: Stotts, Jansick to approve the December financial statements as presented. Passed unanimously. VI. Director's Report Miles Seppelt gave the following report: A. Cornerstone Commons — The interior walls of the Dunn Bro's Coffee Shop have been sheet rocked and there is not much more interior construction to be done. It is expected that they will be open for business in the next 30 days. Americas Pastime Sports Bar has not finished their construction efforts because of financing issues, but the project is still a go. B. Pet Hospital Building — Total demolition cost of the Pet Clinic project was $147,811. The EDA has received one reimbursement from the state for $129,850 and another reimbursement is pending for $15,150. The final cost to the EDA on this project totals $2,810.65. Construction of the parking lot will be the next step in the project. C. Warrior Manufacturing — Building constructions is moving ahead as planned. The steel frame has been completely erected. The entire 8 ft, of the lower wall, has tip up concrete panels in place. The roof and the outer shell have not been completed on the main part of the building. The frame of the office building was erected in the last week and the roof trusts were put into place. D. Cenex Project — Mr. Seppelt met with representatives from Cenex and the Department of Natural Resources last week to discuss the future of the project. A contractor has been selected to do the Phase I environmental study. The Phase I study will determine what will have to be done in the future for the Phase II study. 80% of study cost will be covered by the DNR Ag -Vic program. Seppelt and Warzecha will be performing most of the leg work in the redevelopment project. E. Business Recruitment a. American Energy Systems — Staff met with business officials to discuss an expansion of their current facility. It is planned that the expansion would create 30 -35 new jobs for the company. It was discussed that the Minnesota Investment Fund would be a possible source of funding for this project. b. Nordic Components — Nordic Components contacted Mr. Seppelt about expanding their business. Currently, they are renting building space from Mr. Quade. Their goal is to get their own 10,000 to 15,000 sq. ft. building to run their operations out o£ VII. 2007 Goals and Objectives Mr. Seppelt gave the following report o Business Retention / Expansion: i. Conduct 20 BR &E business visits, or as many as possible in conjunction with the Chamber of Commerce o Downtown: i. Continue Cenex site redevelopment ii. Start the Napa / Train Depot redevelopment project to create more housing in the downtown iii. Recruit a nice sit -down restaurant iv. Construct the Farmers Market Pavilion EDA Board Meeting January 26, 2007 Page 3 of 4 o Industrial Park: i. Make bio science & renewable energy products a development priority ii. Complete Warrior Mfg. expansion project iii. Recruit at least one new company for the industrial park iv. Complete preliminary site layout for the Stritesky Industrial Park v. Working with CALP Team, research & develop a business incubator vi. Build a 30,000 sq. ft. industrial "spec" building o General: i. Support Hwy 7 businesses through construction project ii. Obtain $100,000 in grants (various uses) iii. Pursue development of McLeod County EDA iv. Update EDA marketing brochure and web -site VIII. 2006 Annual Report Mr. Seppelt presented a brief overview of the 2006 annual report. Next step is for Seppelt and the EDA board to present the report to City Council on February 7t' at 12 pm. I. Farmers Market Pavilion Mr. Seppelt informed the board that a feasibility study should be done before any construction begins on a pavilion. The study would evaluate land soil, utilities, design, materials being used in the project and the overall cost of the project. The study will give a realistic picture to how much the project will cost. Seppelt explained that if the cost is between $150k and $175k the project should continue, but if it exceeds $200k it would considered too expensive. Ulrich thought the EDA should notify city council before a feasibility study was performed. With further discussion, the board thought this would be an appropriate action. M/S /P: Jansick, McGraw to authorize $8,000 for Miller Architects to perform a feasibility study. Passed Unanimously IX. Amendment to Rules — Storefront Revitalization Matching Grant Program Mr. Seppelt and Mr. Walser thought it would be appropriate to tighten the language on the Storefront Revitalization Matching Grant. This would eliminate confusion for those interpreting the grant. The Work by Owner section of the grant currently reads, "Work can be performed on a "sweat equity" basis. While grant funds cannot be used to compensate for the owner's labor, the owner's labor can be used as the match for HCDC monies. The owner's labor will be credited at two times the current Federal minimum wage (e.g. 8 hours of labor at $10.30 / hour would be credited as an $82.40 match." The proposed language states, "The rg ant applicant can do their own work and use grant funds to cover 50% of the materials cost, up to a maximum of $5,000. The first sentence of Total Project Cost section currently reads, "The HCDC will contribute up to i/2 of the cost of improvements, up to a maximum award of $5,000. The proposed language says, "The HCDC will contribute up to 1/2 of the cost of materials if the rg ant applicant does their own work, or 1/2 of the cost to hire a contractor to do the work, up to a maximum award of $5,000." EDA Board Meeting January 26, 2007 Page 4 of 4 NVS /P: Hoversten, Stotts to approve change of the grant application language. Passed unanimously. X. Grant & Loan Applications Sinn & Awning Grant Dunn Bros Coffee — Paul and Greg Soukup, et al. $2,000.00 M/S /P: Jansick, Stotts to approve the Sign and Awning Grant as presented for Dunn Bros Coffee Shop. Passed unanimously. XI. Other Business - Mr. McGraw wanted to clarify that if buildings are vacant they are still eligible to apply for the Sign and Awning Grant and Storefront Revitalization Matching Grants. XII. Chamber CVB Update Mr. Vaillancourt gave the reported the following: The 59th annual Chamber awards banquet took place last week. Some of the 2007 goals mentioned at the banquet were membership service and public policy. Vaillancourt stated that he would be at the State Capitol once a month to meet with legislators and the governor. This will assure that the city of Hutchinson is being recognized at the state level. Events taking place in 2007 include: • Author signing on March 14th by Ben McConnell: 11:30am- 1:30pm Keynote $25 /person • Joe Constance will speak about Customer Service Excellence on April 18th • Jeff Munneke, who is the Director of Fan Relations for the Timberwolves / Lynx , will be present on May 16th • First Chamber / CVB golf tournament will be held on July, 11. $75 per - person XIII. The next meeting will be Friday, February 23, 2007 at 7:00 a.m. XIV. Adjourn The meeting adjourned at 8:10 a.m. Respectfully submitted, Brian Warzecha EDA Assistant