Loading...
05-25-2001 EDAMHutchinson Community Development Corporation - an EDA Board of Commissioners Friday, May 25, 2001 7:00 a.m. at City Center Conference Room Minutes Board Members present are in bold print Don Walser Bob Windel Jeff Haag Jim Haugen Keith Fischer Duane Hoversten Tim Ulrich Chamber Rep: Vi Mayer, Hutchinson Chamber of Commerce HCDC Staff. Christie Rock, Executive Director 1. Call to order... President Tim Ulrich Tim Ulrich called the meeting to order at 7:05 a.m. 2. Approval of EDA Board of Commissioners minutes for April 27, 2001 Bob Windel made a motion to approve the minutes. Duane Hoversten seconded the motion. Tim Ulrich asked for discussion. The motion passed. 3. Approval of financial statements for March and April 2001 Bob Windel made a motion to approve the financial statements for March and April 2001. Jim Haugen seconded the motion. Tim Ulrich asked for discussion. Duane Hoversten inquired about the negative accrued payroll. Ken Merrill indicated that it was a glitch in the new accounting software the city is using. He will note the error and make the correction in the May financial statements. The motion passed. 4. One - Motion Agenda Don Walser made a motion to approve the One - Motion Agenda. Keith Fischer seconded the motion. Tim Ulrich asked for discussion. The motion passed. 5. Executive Director Update Christie provided an update of the projects she has been working on over the past month. Projects include the following: • Completed brochure promoting grants and loan for downtown business and property owners. • Began work on a brochure promoting the Economic Development loan program • Continued work on the inventory of property in the downtown area. • Followed up on BI — Phase relocation project — called Larry Lautt and Gene Goddard. • Started the 2002 budget process. • Completed work on the Hutchinson Downtown Association membership appeal letter, dues structure and questionnaire. • Met with several different consultants regarding the downtown master plan RFP. • Sent letters to delinquent borrowers. • Board packets, minutes, meeting notices and agendas. 6. Industrial Park Developments American Energy Systems — American Energy Systems has not started construction on their new facility as of May 25. Christie spoke with Christine Haefner this past week and she said that Mike is still trying to secure financing for the project. The bids for the building came in over the original estimates, so they have had to request more SBA financing. Furthermore, Mike is concerned about the fees charged by the SBA. BI Phase Technology — Christie has not heard anything from Larry Lautt in the past month. He has not returned her telephone call of two weeks ago, and he is not returning Gene Goddard's telephone calls either. Tim commented that it might be taking longer than expected to make the decision, due to the downtown in the economy. Vi indicated that his contact person heard that Larry was concerned about the availability of land. Christie said she would follow up with that concern. Industrial park land acquisition — Tim updated the board on the status of the option agreement with Marvin Hackbarth. He explained that he had unintentionally misinformed the board at its last meeting. Apparently, Mr. Hackbarth decided that he wanted more than $18,000 an acre. Consequently, he refused to sign the option agreement. He is now asking $23,000 an acre. Christie and Tim made an executive decision to continue pursuing the option agreement anyway. Ron McGraw is working with Frank Fay to get the agreement signed promptly. Richard McClure / DAV property — Mr. McClure has approached the city about constructing the third phase of his business park. The planning staff held a predevelopment meeting with him this past week. Christie provided the staff with a memo outlining the EDA's concerns about his lack of payment for the land. The memo requested that the Building Department not issue a building permit until Mr. McClure pays the $5,533 he owes the EDA. 7. Consideration of applications to the Commercial Rehabilitation Loan Program There was one tabled application from the previous month's meeting to review. Discussion continued on that item. Janet Valen at REMAX Realtors is seeking a loan for a new roof, general remodeling improvements to the interior of the building, as well as additional exterior work to her storefront. Ms. Valen provided bids Dave Skoog Construction, Anderson's Decorating Center, Centimark, and Dean Bemis. She is seeking a loan of $43,187.92. Last month, the Finance Team requested that Ms. Valen provide some additional information including a copy of her most recent property tax statement and a copy of her contract for deed agreement with Frank Fay. The Finance Team wanted to know how much of the contract for deed was building and how much was business. At this point, her outstanding loan balance exceeds the market value of the building, thus not meeting the loan to value ratio guideline. 2 After a conversation with Don Walser, Frank Fay submitted a letter to the HCDC stating that he would inform the organization if Ms. Valen defaulted on her contract for deed with him. Ms. Valen provided Christie with a copy of her most recent property tax statement, as well as a breakdown of the contract for deed. The estimated market value of the building according to the most recent property tax statement from the county is $80,400. Ms. Valen estimated that the building accounts for approximately 48 percent of the $95,822 outstanding loan balance, or $45,994. Because the original contract for deed with Frank Fay includes real estate and intangibles, Janet's loan to value ratio exceeds 100 percent as it stands now. The Finance Team concluded they could approve the loan only if Janet could meet the following conditions: Frank Fay agrees to subordinate his position on the mortgage to the HCDC; or Frank Fay agrees to rewrite the intangible portion of the contract for deed into a separate note (business and fixtures separated from building); or Janet gets an appraisal on the building that includes the value after improvements. This does not need to be a full appraisal, but it does not to be more than a market evaluation. It can be in letter format, but must come from a certified appraiser. Christie provided the board with a letter she planned to send to Ms. Valen that outlined the reasons for denying the loan at this time. She requested the board's support to send it. Keith Fischer made a motion to support the letter to Ms. Valen. Bob Windel seconded the motion. Tim Ulrich asked for discussion. The motion passed. The EDA received two new applications to the loan program since the Finance Team meeting on May 15. Christie is not seeking approval of the loans, she simply wanted to make the board aware of the applications. The first application is from Steve Barton at Aquaria Pets and the second is from Jim Wendling at Wendling Insurance Services. 8. Consideration of participating in Minnesota International publication Christie reviewed the information that she provided in the board packet regarding Minnesota International. She explained that she had a meeting with the publication's coordinator this past week. The cost of advertising the community in the publication is the cheap. A two -page spread is over $7,000. Christie indicated that she thought it was a good idea in theory, but that it was much too expensive for a community the size of Hutchinson. The coordinator offered the two page spread for the price of the one page. Christie requested that he speak with Sherry Ristau at the Southwest Minnesota Foundation to see if they would be willing to pay for a spread that highlights the entire 18 county region. 9. New business Vi invited the board to the July Chamber board meeting to participate in the Fish Philosophy presentation that the school is doing. 10. Chamber report Vi Mayer gave an update of the following Chamber activities: • Dairy Days — June 8 • No Lunch with the Governor • Jefferson Bus Line is still waiting for $50,000 DOT subsidy • Greyhound will resume bus service to Hutch soon • Office relocation — moving next to Realty Plus (2 year lease) • The June Chamber board meeting has been cancelled 11. Next meeting The next meeting is June 29, 2001. 12. Adjournment A motion was made to adjourn the meeting. The motion was seconded. The meeting adjourned at 7:55 a.m. Respectfully submitted, Jim Haugen, Secretary /Treasurer 11