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12-23-2009 EDAMEDA Board Meeting Main Conference Room — City Center 11:30 AM Wednesday, December 23rd, 2009 Meeting Minutes Members present in bold. Tim Ulrich Steve Jansick Mike Retterath Daron Vanderheiden Chad Czmowski Jim Haugen Mike McGraw Staff Miles Seppelt, EDA Director Ryan Miller, EDA Assistant Patrick Brama, EDA Assistant Steve Heintz, Assistant Finance Director Liaison Bill Corby, Chamber President I. Call to Order Tim Ulrich called the meeting to order at 11:37AM. II. Introductions A. New Board Members ■ Mike Retterath ■ Daron Vanderheiden B. New Intern — Patrick Brama Introductions were made of the new EDA Board members as well as the new EDA intern. The Board thanked Ryan Miller, the outgoing intern, for all his good work and wished him well. III. Approve Agenda — No action. IV. Review Meeting Minutes A. October 27th EDA Board of Directors M /S /P: Haugen, Retterath to approve the minutes as written. Passed unanimously. B. October 30th EDA Board of Directors (Special Meeting — Hackbarth Land Purchase) M /S /P: Jansick, McGraw to approve the minutes as written. Passed unanimously. C. October 21St Finance Team M /S /P: Ulrich, Haugen to approve the minutes as written. Passed unanimously. D. November 25th EDA Board of Directors (notes only) M /S /P: Jansick, Haugen to accept the notes as presented. Passed unanimously. E. November 18th Finance Team M /S /P: Czmowski, Retterath to approve the minutes as written. Passed unanimously. V. Review of November Financial Statements — Finance Director Assistant Finance Director Steve Heintz presented the November EDA financials: • Operations had a total of $62,137 in cash available. $33,008 was unreserved and $22,736 was reserved for future land purchases, being proceeds from the sale of land to Warrior Mfg. in 2005. • For the month, $5,730 in revenue was received and expenditures totaled $10,114 — primarily salary expense. • The Economic Development loan fund has $85,435 in cash available, loans receivable totaling $62,747 and $25,000 on deposit with MCCF. Loan repayments totaled $1,732 for the month. • The Downtown Loan Fund has $387,644 in cash available and loans receivable totaling $691,786. Loan repayments totaled $8,175 for the month. • The MIF loan fund has $162,535 in cash available and loans receivable totaling $549,748. Loan repayments totaled $8,553 for the month. M /S /P: Retterath, Haugen to accept the financial report as presented. Passed unanimously. VI. Director's Report Staff provided an update on the status of current projects: A. Industrial Park— nearly DONE • Fall construction on the new industrial park is essentially complete. • The only remaining item is to complete the storm water connection beneath Stn Avenue. • Construction should pick up again approximately May 1St with about 90 days of street construction. • The entire industrial park should be completed by August 1St, 2010. B. Warrior Mfg. Land Sale — DONE ■ The sale of industrial park land to Warrior Mfg. has been completed. C. Hackbarth Property — closed 12/18 ■ The purchase of 5.65 acres from the Hackbarth's was completed on December 18tH D. NuCrane Manufacturing • Construction on NuCrane's 51,000 sf building is about a month ahead of schedule. • The company is in the process of ordering equipment. • NuCrane hopes to begin manufacturing operations by late spring, 2010. E. County EDA • Currently a January meeting of the County EDA exploratory committee is planned to begin reviewing several items as requested by the County Board. • A draft enabling resolution, budget, project list & staff job description has been prepared. F. Company "X" • Staff has not received any update from the company. • Mike Retterath indicated that meetings between the company and 3M were continuing and that there should be some activity in January. G. Board of Directors Compensation ■ Board member annual compensation was distributed. VII. Ratify November Agenda Items Because there was no quorum, and hence no official meeting in November, several actions were made official by a vote of the full EDA Board. Staff provided a very brief explanation of each item: A. Lease of Stritesky Property (accept high bid) M /S /P: Jansick, Haugen to accept a bid of $227.20 per acre (totaling $16,669.66) from Randy Luthens for the rental of the Stritesky Property. Passed unanimously. B. MIF Loan for NuCrane Manufacturing (set terms) M /S /P: McGraw, Czmowski to set the loan terms for the $500,000 MIF loan to NuCrane Manufacturing at 2% for 8 years, per the recommendation of the EDA Finance Team. Passed unanimously. C. Additional Infrastructure for Industrial Park M /S /P: Haugen, McGraw to approve utilizing proceeds from the sale of land to Warrior Mfg. to pay for additional infrastructure in the industrial park and to recoup the investment by setting the price of the two industrial lots fronting 5th Avenue at $35,000 per acre. Passed unanimously. D. Grant Application (Sign grant: Complete Self Defense / 126 Main Street South / $1,300) M /S /P: McGraw, Retterath to approve the sign grant. Passed unanimously. VIII. EDA Board Membership — Recommend reappointment of Steve Jansick (1st full 6 -year term) Steve Jansick's term on the EDA Board is up at the end of the year and he will need to be reappointed by the City Council. M /S /P: McGraw, Haugen to recommend that the City Council reappoint Mr. Jansick to a new 6 -year term. Passed unanimously. IX. Land sale to McLeod County Solid Waste The sale of 3.09 acres in the industrial park to McLeod County Solid Waste was discussed. They have concerns over the EDA's asking price for the lot. The development potential of the lot was also discussed. Even with the gas pipeline easement that is present, there is sufficient room for a 20,000 + sf building on the site. It was agreed that this topic will be revisited at a future EDA meeting. X. Economic Development Loan Fund — Loan Application An early stage company called NEW EDGE is seeking funding for working capital / inventory. The company has developed a new type of lawn mower blade that features replaceable plastic edges. It is proposed that the actual manufacture of the blades & tips be done in China, due to lower costs. The total project is $105,000; with $35,000 being requested from the EDA. Home State Bank and the Southwest Initiative Foundation are the other projected funding partners. They have each approved their loans to the company. Job creation in the US would consist of the owner and potentially some warehouse / shipping help. It was noted that there is no apparent patent protection for the product. There was no collateral available for the EDA loan. After discussion, the Board took no action — the loan request was not approved. XI. Cenex Site Redevelopment — Final Report / Next Steps Staff provided a final report on the costs incurred in the acquisition and clean -up of the Cenex and Wright properties on 3 d Avenue NW. To date, the EDA has $194,008.56 invested in the site from the downtown revolving loan fund, and the city has $150,000 invested from its Community Improvement Fund. One item to be resolved is the amount of compensation due to the McLeod County Rail Authority for the 1.75 acres of former railroad right -of -way that is to be included in the final plat of the site. The city purchased all of the railroad right -of -way within city limits from the McLeod County Rail Authority on a contract - for -deed back in 2004 and is making $30,000 annual payments for 19 years. Thus far, five years have been paid with 14 remaining. To complete the re- platting of the site, it will be necessary to obtain a partial mortgage release from the Railroad Authority. Based upon the purchase price and the number of acres acquired by the city, it was determined that the price for the railroad right -of -way was $32,967 per acre. This works out to $57,692 for the 1.75 acres the EDA desires to add to the redevelopment site. Payment would be due to the rail authority at the time the property was sold. Discussion followed about the desirability of having the area replatted into one lot so as to have the property as ready as possible for sale and redevelopment. Further discussion will take place at a future meeting of the Board XII. Disposition of TIF District 4 -15 (former Goebel Property) Several years ago steps were taken to establish TIF district 4 -15 on the former Goebel property to provide part of the financing for a joint EDA / Nordic Components building project. Ultimately, the project did not move forward. No projects are currently planned for the site, and the TIF District is not serving any useful purpose. M /S /P: Jansick, Haugen to take down TIF District 4 -15. Passed unanimously. XIII. Discussion of potential 2010 projects Proposed 2010 EDA projects were discussed. Board members were asked to notify staff if they wanted any changes or additions made to the proposed program of work. XIV. Grant & Loan Applications Sign & Awning Grant State Farm Insurance — Kim Kotzer 132 Main Street South $2,000 M /S /P: Haugen, Czmowski to approve the grant request, subject to the required second bid being obtained. Passed unanimously. Storefront Revitalization Matching Grant Dostel Electronics — Larry Dostel $1,050 147 Main Street South M /S /P: Jansick, Retterath to approve the grant request. Passed unanimously. XV. Other Business ■ Miles will be on vacation January 1St — 10th XVI. Chamber Update Chamber President Bill Corby updated the Board on current Chamber of Commerce activities. XVIL Set Next Meeting — January 27th XVIII. Adjourn With no further business to attend to, the meeting was adjourned at 12:56 PM. Respectfully Submitted, Miles R. Seppelt EDA Director