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05-09-2005 EDAMMinutes of * ** SPECIAL MEETING * ** EDA Board of Directors fl Main Conference Room — City Center 12:00 PM Monday May 9, 2005 Members present in bold Attendance: Tim Ulrich Casey Stotts Mike McGraw Jim Haugen Don Walser Duane Hoversten Steve Jansick Staff: Miles Seppelt, EDA Director Crystal Foust, EDA Assistant I. Call to Order EDA President Tim Ulrich called the meeting to order at 11:33 AM. II. Director's Report: Update on business prospect EDA Director Miles Seppelt began the discussion by explaining the current situation with the prospective business. The EDA has received a relocation costs/benefits worksheet to fill out and send back to the company. The worksheet includes site preparation costs, JOBZ Zone benefits, TIF financing, customized training, grant and low interest loan availability. The board discussed the JOBZ incentives provided by the DEED (Department of Employment and Economic Development). The JOBZ incentives would be the same her or in Arlington. The Board discussed other possible incentives that could be offered the company. The utility rates for the City of Hutchinson are very attractive. The tax rate in Hutchinson is also lower than Arlington. Mr. Seppelt is going to prepare a comparison sheet between the two communities for the owners of the company. TIF and JOBZ are separate incentives and cannot be used together. The company is looking at JOBZ and has predicted more benefits from that program than TIF. The City of Hutchinson does not have any JOBZ acres at this time, however, two cities have agreed to donate acres, and therefore there is a sub zone modification process that the city needs to go through. Three resolutions need to be passed by the city, county, and school district. We need to gather information about the specific parcels that are going to be designated as JOBZ including the location and legal description, number of acres added, and map showing the current and future zoning of new parcel, location, and access to infrastructure. Certain information regarding the business locating on the site is also needed to send to DEED. The company's accountant is looking at JOBZ and TIF incentives. The City of Hutchinson has access to the Minnesota Community Capital Fund that can be used to offer a low- interest loan. The company is interested in 10.5 acres. The company wants room to expand in the future. The EDA does not want to lie anything out without knowing what Arlington has. With the JOBZ program, the city is giving up local tax from that company for the next 11 years. At a local level, the EDA is not giving any incentives with the JOBZ program; the state is. The Board has to consider if this incentive is good enough. The Board would like to designate both sides of Stn Ave. (Wetherell property) as JOBZ and well as most of Stritesky property. The City of Marshall has agreed to donate 47 acres. Mr. Hoversten that the company is looking at three acres to build the first phase of the building. The EDA may want to give incentives on the three acres the company needs immediately. The Board decided to use a 1/3- 2/3 write -down on three acres. M/S /P: Hoversten /Stotts to recommend to the City Council to proceed to obtain JOBZ acres and JOBZ incentives at a minimum for the Wetherell property with a maximum of 50 acres. M/S /P: Haugen /Walser to approve the package incentive offered by EDA including 1) 1/3 -2/3 write -down at the appraised value for three acres 2) $50,000 loan for equipment at a low- interest rate of 4% 3) JOBZ incentives The EDA Board would like to understand the approximate values of incentives with the JOBZ program and what those incentives are. Mr. Seppelt will also analyze the utility rates for the company before he prepares a response and fills out the worksheet requested by the company. Ms. Foust will prepare a comprehensive list about JOBZ and the sub zone modification process for the next EDA Board meeting on May 27tH III. Other Business EDA Director Miles Seppelt gave the following update: a. Rix Corner: The property on the corner of First Avenue NW and Main Street has been purchased. The developer has more investors to support the project. There is going to be a one - stop -shop meeting on May 10, 2005. The bank still needs to approve the deal. After the bank approval, the EDA will be able to set up a TIF redevelopment district. b. State Theater: Red and Linda McMonagle will be moving in the apartments by the end of the month. The little retail space has been leased out. The owners still plan to have a gala grand opening, but the date is yet to be determined. c. Hutch Liquor expansion: City staff has received the purchase agreement from Nash Finch. City Attorney, Marc Sebora has read through the agreement and has returned it to Nash Finch for modifications. Several items are on the Council agenda for May 10, 2005: • Consideration for approval of authorizing payment to Nash Finch related to the acquisition of property for the expansion of the Municipal Liquor Store • Consideration for approval of lot split to facilitate the acquisition of property for the expansion of the Municipal Liquor Store • Consideration for approval of awarding bid and approving contract with Shingobee Builders • Consideration for approval of purchase agreement between Nash Finch and the City of Hutchinson • Consideration for approval of relocation agreement with Midwest Tae Kwon Do for relocation from the liquor store expansion site d. Prospective business relocation to Hutchinson: The company interested in relocating to Hutchinson is preparing financials. The next step is a meeting with the company officials and representatives from the Hutchinson Workforce Center, Ridgewater College, Hutchinson Public Works Dept., Hutchinson Utilities, Hutchinson Chamber of Commerce, and two EDA Board members. IV. Adjourn The meeting adjourned at 12:45 PM.