03-28-2003 EDAMHutchinson EDA
Board of Directors
Minutes of Meeting
Friday, March 28, 2003
Members present in bold print
Members:
Tim Ulrich Bob Windel Jim Haugen Don Walser
Jeff Haag Duane Hoversten Keith Fischer
Guests:
Matt McMillan
Marc Sebora, City Attorney
Cary Linder, Hutchinson Telephone Co, Industrial Park Team Chair
Staff:
Amanda Alfson, EDA Intern
Miles Seppelt, EDA Director
1. Tim Ulrich called the meeting to order at 7:05 a.m.
2. Consideration of minutes from the February 28, 2003 meeting.
Don Walser was not present at the February meeting. The Industrial Park Update should not read that the
primary commissioners were appointed because they had not been officially appointed yet at that time. At
that time, they were only preliminary commissioners.
M /S /P: Walser, Windel to approve the minutes from February 28, 2003 with the above corrections.
3. Review and approval of Finance Team minutes from March 19, 2003.
M /S /P: Fischer, Windel to approve the minutes from March 19, 2003.
4. Review Financial Statements
Ken Merrill was unable to attend the meeting. Miles Seppelt summarized the included statements. As of
February 28, 2003 the Operations budget on page one listed $152,723 as cash. Total assets were $293,802.
Total revenue on page two was $1,000.00 YTD. On page two it is also showing expenditures for the month
of February as $22,174. Page four is showing $164,118 as available money for new loans. Allied
Mechanical is continuing to make regular monthly payments. Total assets on page five list $1,316,921.
Available funds are totaling $535,012. Revenues for the downtown loan fund equal $12,573.00. Miles has
checked with Ken Merrill regarding the unreserved and reserved funds. Ken informed Miles that money
was set -aside in the past from the Prince of Peace payments to be allocated for a special project. The money
listed as reserved will hopefully be transferred to the unreserved fund soon. Miles also informed the Board
that HKGi services are almost completely paid for once the last few small bills arrive from their last
presentations.
M /S /P: Haugen, Haag to approve the February 28, 2003 financial statements.
5. Directors Report
Miles Seppelt gave his report
A) All loans are up to date.
B) Business visits
• Miles has met with 3 -D CNC, Inc. and Pride Solutions (Plastic Specialties).
C) State Theatre
• The prospect from Wayzata will be putting in a bid next Thursday. Miles has talked to the
bank and has worked out a tentative financial package for the project. Possible funding
sources may include a redevelopment TIF, Downtown Loan, MCCF, and a SBA 504 Loan.
D) Liquor Store
• The Liquor Store project is on hold pending review by the City Council in April. The project
can be done from the financial standpoint but the political issues remain. Rix Gas Station has
been chosen as the official site.
E) Industrial Park Team
• The new Industrial Park Team has been formed and met on Wednesday, March 26. The
group will continue to meet on the last Wednesday of the month. The goal of the group is to
create a business plan for the new addition to the Industrial Park.
F) Project List
1) Municipal Liquor Store
2) State Theater
3) Industrial Park
4) Business Subsidies Criteria
5) Downtown Revitalization Plan and Special Services District
6) Develop new EDA Web -site
7) BR &E & Business Recruitment
8) Administration / Requests for Information
6. Grant & Loan Applications
A. Grants (Storefront Matching)
1. Lorraine Meyer $946.40
Jim Haugen abstained from the vote.
M /S /P: Walser, Haag to approve the grant to Lorraine Meyer in the amount of $946.40.
B. Loans
1. John Schutt $15,000.00 @ 2% for 10 years
M /S /P: Haag, Fischer to approve loan to John Schutt in the amount of $15,000.00.
2. George Quast $65,000.00 @ 2% for 10 years
The Board moved to table this application to the next meeting so that the Finance Team would have the
opportunity to review the O & E. Staff will get the O & E and will bring the new information to the next
Finance Team meeting.
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M /S /T: Windel, Haugen to table the Quast loan request until additional information is gathered.
7. Business Recruitment Update
A. Community Venture Network (CVN)
Miles informed the Board that we are now officially members of CVN.
8. Industrial Park Team Update
Marc Sebora gave the board an update on the condemnation process. At the first court hearing the
opposing attorney worried about disinterested parties on the commission. All commissioners signed
affidavits. We have been given permission to start preliminary actions, but once the order is signed we will
be able to do whatever we would like to do with the property. Hopefully the order will be signed in the
next week or two.
Cary Linder spoke about the newly formed Industrial Park Team. Cary and Miles have asked the following
individuals to be part of the team and they have all accepted:
Jim Haugen Buzz Burich Steve Jansick Mark Jorgenson Sr.
Don Glas Diane Gordon Jeff Haag Phil Graves
Bob Windel Ron McGraw
As mentioned above, the goal of the team is to create a business plan for the extended Industrial Park area.
The group is in favor of growth and is looking to fill the area with a proactive approach. Miles has been
speaking with John Rodeberg, City Engineer, about infrastructure. Infrastructure could be installed as
early as this fall pending sketch plan and preliminary plat. An option for assessing the costs of the
infrastructure would be to hold the assessments until the area is filled with businesses.
Right now the group is working to gather the historical data of the group. Potentially, this land could be a
revenue source for the EDA. Marc mentioned that the new gas pipeline would be going through that
property and to keep that in mind as the layout is being designed. Marc also mentioned that he has spoken
with the property owner regarding not farming the land this year. Keith Fischer mentioned a local farmer
who may be interested in planting alfalfa on the property until it is developed. Miles clarified a question
about whether or not MCCF monies could be borrowed to put up a spec building. The EDA would not be
able to borrow MCCF monies to build a spec building, however, MCCF monies could be used for a
prospective business to put up a structure.
9. Modify Business Subsidies Criteria
In the past, cities passed very generic criteria regarding business subsidies. Last year, the law was amended
to require specific wage and job goals. The law does allow for cities to amend their guidelines for specific
cases. The packet included policy research from other MN cities. The guidelines that Miles proposed were
liberal enough to not limit our flexibility. Keith mentioned adding "and /or retention" to the wording of job
creation goal.
M /S /P: Windel, Haag to move the proposed business subsidy criteria forward.
10. Consider Amendment to Downtown Loan Program Guidelines
The goal of the program is to provide the same amount of assistance to projects of the same value.
Adding "10% of the total project cost" will help large projects that happen to be located only on one lot,
such as the State Theater.
M /S /P: Walser, Haugen to amend the loan program guidelines.
11. Update on Special Services District
Selected HCDC members joined the HDA at their board meeting on Thursday to discuss assessment
options and the forming of a steering committee. At the meeting, Julie Wischnack and Miles Seppelt
discussed the research that had been done to determine the best way to assess the Special Services District
(SSD). The options are to assess by the taxable market value of the property or per square foot of
commercial property. Due to state law, residential properties cannot be assessed.
As proposed, the district would generate approximately $105,000.00 per year. In order for this assessment
to be on the 2004 tax roles, everything must be in place by August 1. A team consisting of Joey Willmert,
Matt McMillan, Mike Cannon, Cary Linder, Skip Quade and Duane Hoversten was formed to create a
marketable plan that would be "sellable" to downtown businesses. This plan will identify how we can
"sell" this concept which will include determining the length of the SSD (5, 10, 15 years) and the projects
the collected money would be used for. Tim Ulrich suggested setting up this plan and budget prior to
forming a team but with the time constraints it was determined that it would be better to do these tasks
simultaneously. Possible projects include building a Farmer's Market Pavilion, downtown streetlights and
hiring staff for the HDA. The newly formed SSD team will be meeting on April I & 8 to continue
discussion. The group will have a final package ready for the HDA Board to review at their April meeting.
Jeff Haag recommended talking to the City to see if funds could be reallocated for one year to go towards
the downtown.
12. HCDC as Legal Entity
Miles reported that the Hutchinson Community Development Corporation still exists as a legal entity. The
question is whether or not it serves a purpose? The EDA supercedes the legal powers of the Hutchinson
Community Development Corporation. Don and Miles discussed whether or not the Hutchinson
Community Development Corporation should be dissolved while keeping the Hutchinson Community
Development Commission name and logo. They did not find any reason to sustain the legal entity.
M /S /P: Walser, Fischer to dissolve the Hutchinson Community Development Corporation as a legal
entity.
13. Other Business
There was not any other business.
14. Set Next Meeting
The next board meeting is scheduled for April 25, 2003 at 7:00 a.m.
16. Adjourn
Board meeting was adjourned at 8:45 a.m.
Respectfully submitted,
Amanda Alfson, EDA Intern