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06-29-2001 EDAMHutchinson Community Development Corporation - an EDA Board of Commissioners Friday, June 29, 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 May 25, 2001 Don Walser 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 May 2001 Jeff Haag made a motion to approve the financial statements for May 2001. Keith Fischer seconded the motion. Tim Ulrich asked for discussion. Jim Haugen questioned the figure of - $15,785. Christie said she would inquire with Ken Merrill. The motion passed. 4. One - Motion Agenda Bob Windel made a motion to approve the One - Motion Agenda. Haugen seconded the motion. Tim Ulrich asked for discussion. Jim Haugen noted a typo in the letter to the USPS official. The word site was used incorrectly. It should have been sight. 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: Working on a brochure to promote the Economic Development loan program Working on a brochure to explain tax increment financing Continued work on the inventory of property in the downtown area • Followed up on BI — Phase relocation project • Mailed the downtown association membership appeal, wrote thank you letter and site visit script for board members • Working on marketing plan for downtown association • Met with several different consultants regarding the downtown revitalization master plan RFP • Went on business incubator tour to Mankato and Owatonna • Coordinated and facilitated efforts to clean up the asbestos problem at the Miller property • Attended first meeting of the Southwest Minnesota Foundation Business Advisory Committee • Board packets, minutes, meeting notices and agendas 6. Industrial Park Developments American Energy Systems — American Energy Systems started work on it new facility this week. Christine Haefner inquired about the HCDC hosting a groundbreaking ceremony sometime in July. Christie will arrange a date and send a memo to board members, City Council members, the media, and members of the Industrial Park Task Force. BI Phase Technology — Larry Lautt sent a letter to Christie indicating that Schwan's Technology Group had settled on a location in the metro area for Bi -Phase Technologies. Christie distributed the letter to board members for their review. Industrial park land acquisition — Because Bi -Phase has elected not to relocate to Hutchinson, the board felt there was not an urgent need to buy land from Marvin Hackbarth. The board feels there is time now to take a good look at where and when industrial development should occur. Christie will reconvene the Industrial Park Task Force and have them lead the charge for the acquisition and annexation of industrial property. Richard McClure / DAV property — Mr. McClure paid his one -third for the DAV property. He plans to begin construction on the third phase of his business park project soon. 7. Consideration of applications to the Commercial Rehabilitation Loan Program There were two new applications to the Commercial Rehabilitation Loan Program. There was also one tabled application from the previous month's meeting. Discussion continued on that item. Janet Valen: 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 from Dave Skoog Construction, Anderson's Decorating Center, Centimark, and Dean Bemis. Her loan was not approved, because the loan to value ratio exceeds 100 percent. Last month, the Finance Team suggested that Ms. Valen have an appraisal done on her property. Ms. Valen had an appraisal completed. The appraiser took into consideration the value of the building after improvements. He appraised the building at $127,300. Christie has not received a copy of the appraisal. Ms. Valen is buying the building contract for deed from Frank Fay. Jeff Haag made a motion to approve a loan of $33,580.50. This is the difference between the buildings appraised value and Ms. Valen's previous financing. The loan amount is 2 contingent on her completing all of the improvements considered by the appraiser. Ms. Valen must provide invoices proving the work was completed. Bob Windel seconded the motion. Tim Ulrich asked for discussion. Don Walser suggested that Christie speak to the City Attorney about the possibility of providing an attachment to the mortgage that stipulates Frank Fay must notify the HCDC if he terminates the contract with Ms. Valen. The motion passed. Jim Wendling: Wendling Insurance Services is seeking a loan of $8,105 for a new heating and cooling system. Mr. Wendling provided a bid from Allied Services. The Wendling's currently have an outstanding loan with the HCDC with a balance of $10,747.38. Barb Wendling is buying the building contract for deed from Iola Henke. Bob Windel made a motion to approve the loan to Wendling Insurance. Jim Haugen seconded the motion. Tim Ulrich asked for discussion. Don Walser suggested again that Christie speak to the City Attorney about the possibility of providing an attachment to the mortgage that stipulates that Iola Henke must notify the HCDC if she terminates the contract with Ms. Wendling. The motion passed. Steve Barton: Steve Barton, owner of Aquaria Pets, is seeking a loan of $3,700 for roof repairs. Mr. Barton provided a bid from F.W. Roofing and Insulation. Mr. Barton currently has an outstanding loan with the HCDC with a balance of $1,322.83. Steve Jansick and Keith Fischer reviewed this application and recommended approval. Bob Windel made a motion to approve the loan. Jeff Haag seconded the motion. Tim Ulrich asked for discussion. The motion passed. 8. Consideration of application to the Storefront Revitalization Matching Grant Program Steve Barton, owner of Aquaria Pets, is seeking $2,530 from the matching grant program to replace is front windows. He provided a bid from Crow River Glass. Bob Windel made a motion to approve the matching grant. Jeff Haag seconded the motion. Tim Ulrich asked for discussion. The motion passed. 9. Consideration of application to the Sign and Awning Grant Program Nancy Janousek is seeking $530.37 for new awnings for the building she owns on Main Street. She provided a bid from Mankato Tent and Awning. Jeff Haag made a motion to approve the grant. Bob Windel seconded the motion. Tim Ulrich asked for discussion. The motion passed. Christie also mentioned that Paul Koch has submitted an application to both the Sign and Awning Grant Program and the Storefront Revitalization Matching Grant Program. He is seeking $20,000 is Sign and Awning monies and $60,051 in Storefront Revitalization monies. The Finance Team had some questions about his application, so they tabled discussion until their July meeting. The application will likely be approved and be on the Board agenda in July. 10. Consideration of subordination agreement with Citizens Bank for Richard McClure Citizens Bank is requesting a subordination of a loan between the HCDC and Richard McClure for the DAV property. Duane Hoversten wondered whether Tim should sign the subordination agreement, since he works for Citizens Bank. The Board agreed that Vice President Bob Windel should sign the document. Tim removed himself from discussion. Jeff Haag also removed himself from discussion, as he sits on the Board of Directors for Citizens Bank. Duane Hoversten made a motion to approve the subordination request. Keith Fischer seconded the motion. Bob Windel asked for discussion. The motion passed with Tim Ulrich and Jeff Haag abstaining. Duane Hoversten inquired about who pays for the preparation of the subordination agreement. Christie indicated that the City Attorney charges the HCDC an hourly rate for preparing documents. Duane suggested that in the future the requester should have his or her attorney draw up the document at his or her expense. Tim suggested that the fee could be included in the fees the bank charges, and the bank could reimburse the HCDC for its expense. 11. Consideration of sponsoring marketing piece on the city of Hutchinson in Ventures magazine After a brief discussion, the board decided not to pursue a sponsorship at this time. Perhaps after the industrial park is expanded and there are lots available for development to occur. 12. New business Christie explained the situation with the Leonard Miller property and the PCA. There will be a discussion about TIF districts at the Finance Team meeting in July. 13. Chamber report Vi Mayer gave an update of the following Chamber activities: • Dairy Days was a big success. • The fountain for the Crow River will be installed in July. A dedication ceremony will be held on July 13. A test run is expected on July 10. • Music in the Park has had good attendance, despite rain. • Board meeting is scheduled for July 25 — Fish Philosophy presentation 14. Next meeting The next meeting is July 27, 2001. 15. Adjournment A motion was made to adjourn the meeting. The motion was seconded. The meeting adjourned at 8:10 a.m. Respectfully submitted, Jim Haugen, Secretary /Treasurer 11