05-08-2003 EDAMHutchinson HCDC — An EDA
Board of Directors
Minutes of Meeting
Friday, May 8, 2003
Members present in bold print
Members:
Tim Ulrich Bob Windel Jim Haugen Don Walser
Jeff Haag Duane Hoversten Keith Fischer
Guests:
Gary Plotz, City Administrator
Ken Merrill, Finance Director
Staff:
Amanda Alfson, EDA Intern
Miles Seppelt, EDA Director
1. Tim Ulrich called the meeting to order at 11:45 a.m.
2. Review of Financial package for State Theater
Miles updated the Board on the financial package for the State Theater including the breakdown of package
as listed below:
Equity:
$160K
Bank:
$400K
SBA 504
$240K
Downtown Loan
$130K
Redevelopment TIF
$165K
Downtown Grants
$7K
Utilities Grant
$29K
Other Grants
$50
After the selling of his business in Wayzata, Mr. McMonagle plans to invest an addition $150K of equity.
The money will be allocating in many areas including $50K for each of the three theaters, $65K for
cosmetic changes to the lobby, $450K to renovate the apartments, $59K for theater equipment, $125K for
an elevator, $20K for sprinkler system, $97K for the marquee and purchase price of $130K.
Throughout his estimate, Mr. McMonagle built in a cushion of 10% on top of already conservative figures
to ensure that he would not run short. Miles also shared with the Board Mr. McMonagle's net worth
statements from 2002. Mr. McMonagle's net worth for both home /land & business totaled $910,191.00 in
2002.
The Finance Team gave preliminary approval upon the discussion of 15,20 & 25 year TIF District terms.
Miles explained that 15 year district would provide $137,689, 20 years would produce $159,871 and lastly,
25 years would produce $178,143. As a redevelopment district it would also be considered a pay -as- you -go
district. Discussion about the length of the district followed.
Ken Merrill suggested setting up the TIF District as a 25 -year program but include that the district will cease
immediately once the set amount is received.
Miles added that allowing this project to continue will add vitality to the downtown while removing blight
and will also serve to create the vision for Downtown.
M /S /P: Hoversten, Fischer to proceed with the pay -as- you -go TIF District for the State Theater for 25
years, but not to exceed $165K in principle repay.
Miles will contact the consultant and start the TIF District process. He will also get the timeline and
checklist from Ehlers & Associates. At the next EDA Board meeting the EDA financing will be discussed.
The appraisal of the property is currently in progress. The SBA approval is contingent on the appraisal.
Ken asked about the upfront fee (approximately $5K) that was a required part of the policy from 1994. It
was determined that the 10% Administrative fees that are figured into the TIF District may be used to pay
for consulting services for the State Theater which is what the upfront fee usually covered in the past. This
item will be discussed at the May EDA Board meeting.
3. Other Business
The Liquor Store site is in the process of getting appraised. Hopefully we will have it completed by July.
On Monday, the Liquor Store team will choose an architect for the project. Duane Hoversten mentioned
that he is in the process of writing a letter to the editor explaining the process up to this point with the
Liquor Store. Miles informed the Board that he would check with a traffic consultant to determine traffic
pattern issues with the selected location.
4. Adjourn
The Board adjourned the meeting at 12:45 p.m.
Respectfully submitted,
Amanda Alfson, EDA Intern