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09-30-2005 EDAMHutchinson EDA Board of Directors Minutes of Meeting Friday, September 30, 2005 at 7:00 a.m. Members present in bold print: Members: Tim Ulrich Steve Jansick Jim Haugen Duane Hoversten Casey Stotts Mike McGraw Staff: Miles Seppelt, EDA Executive Director Erin Eberdt, EDA Assistant L Tim Ulrich called the meeting to order at 7:02am. II. Approve Agenda No action taken III. Review and Approve Meeting Minutes a. Review minutes from August 26th EDA Board Meeting Don Walser Marc Vaillancourt M/S /P: Jansick/Hoversten to approve the minutes from the August 26th EDA Board meeting as written. Passed unanimously. b. Review minutes from August 17th Finance Team Meeting M/S /P: Hoversten/Haugen to approve the minutes from the August 17th Finance Team Meeting as written. Passed unanimously. IV. Review August Financial Statements — Ken Merrill Miles Seppelt gave the following report: o On Pg 1 under operations for the EDA, there is $41,212 cash on hand. The total fund balance as of August 31St, 2005 is $41,433. There is the continuation of the land write down. Total Mortgages receivable is $90,238. o Pg 2 and 3 is the statement of revenue and expenses. Total expenses for August are $19,483. The EDA has spent down a total of $18,983 for the month of EDA Board Meeting September 30, 2005 Page 2 of 5 August. The EDA has spent down a total of $82,105 for the first eight months of 2005. o Pg 4 under the EDA Loan Fund, there is $147,314 as cash on hand. o Pg 5 under the EDA Downtown Loan Fund, there is $501,571 as cash on hand. Mortgages receivable is $767,393. $79,634 has been collected this year for loan repayments. A total of $199,382 has been paid out thus far for 2005 including loans, downtown grant program, and miscellaneous. The balance sheet reflects spending down a total of $119,748. M/S /P: Haugen/McGraw to approve August financial statements as presented. Passed unanimously. V. Director's Report Miles Seppelt gave the following report: A. State Theater — One retail space is just about ready to be rented out. It will be some kind of antique store. The apartments should be ready to rent out this coming week. B. Liquor Hutch — The construction is about one week behind schedule. During the coming week, the pavement will be poured and the building exterior will be painted to match Econo Foods. In two to two and half weeks, the new part will open, and from there it will take about four weeks to renovate the old side. C. Rix Corner Redevelopment — The property has been closed on and it is all paid for. The Pawn Shop should be moving in the next couple of days. The wrecking ball is set to come through on October 4th to demolish the buildings. D. Downtown Streetscape Project — This project will be almost 10 days ahead of schedule. Phase 3 will be completed by Wednesday with Phase 4 beginning on Thursday. They will have 15 days to complete this phase. Some of the lights will start arriving at the middle to end of October. It will take about one month to get all the lights in. That part should be complete by the middle of November. The Washington Ave and Rix Corner portion will be completed in the spring. E. Industrial Park Development — 1. Wetherell Property Site Prep — This project is complete except for the cleanup and the removal of the cistern that was found on the site. 2. Industrial Park Signage — Mr. Seppelt sent letters to all of the business within the Industrial Park to see which ones would be interested in getting a monument sign for the intersection of Highway 22 and 5th Ave. Five businesses have already shown interest. One quote has been collected and one more is needed. Once it is decided how many businesses are interested, the cost will be split evenly. 3. JOBZ & Signage — A letter was received from the Commissioner at DEED approving Hutchinson's request for JOBZ acres. There is a total of 51.9 acres. Ms. Eberdt is working with the Southwest Zone Administrator to get JOBZ signs ordered that would be placed under the population signs coming into town and be used as a marketing tool. EDA Board Meeting September 30, 2005 Page 3 of 5 F. Business Recruitment 1. Company "X" — The purchase agreement is in the final stages. It is taking a while due to the fact that the Company's attorney lives in California. 2. Company "Y" — Mr. Seppelt spoke with this company and Hutchinson is still at the top of their list. Right now they are just trying to get the financials in place. 3. Ashwill Industries — This will be discussed in detail below. VI. Ashwill Industries Mr. Ashwill had an unexpected expense come up due to the hard water in Hutchinson. Because of this, he needs to purchase a reverse osmosis water purifier. He sent a letter asking if the EDA would increase the loan to cover this expense. Mr. Seppelt stated that this still fits within the rules of the program. At, the Finance Team, Mr. Merrill asked if Mr. Ashwill could possibly lease this equipment if the new city water system that will be complete in 2007 will have a sufficient enough quality of water. Mr. Seppelt discussed this with Mr. Ashwill, but Mr. Ashwill stated that the improvement would still only better it by half of his necessary needs. He is asking for $32,000 instead of $25,000. This will raise the EDA portion to about 14% of the total project cost. MIS/P: Jansick/McGraw to authorize a total of up to $32,000 for the Ashwill Industries loan. Passed unanimously. VIL Assessments on Wetherell Property Mr. Merrill had asked if the EDA would look into paying off the remainder of the assessments on the Wetherell Property using the money from the sale of the portion of the land to Company "X." The total amount of the assessments on the property right now is almost $223,000. After Company "X" pays their assessments, the remainder would be approximately $76,610. The Finance Team was apprehensive to this idea because the property is for sale and if the EDA were to pay off the remainder of the assessments, it would be hard to get that money back when the property sells. Also, it would be better to keep the cash from the sale of the property in case the EDA were to need to buy any more land for the Industrial Park. No action taken. VIIL Assessments on Goebel Property Mr. Seppelt, Mr. Ulrich, and John Rodeberg had a meeting with Virgil Goebel's attorney. Mr. Goebel is in the process of selling the two western lots to Dick McClure. The assessments on the land have been deferred for many years and have started to pile up. One of the conditions to selling the land is that Mr. McClure wants the assessments paid before he makes the purchase. One of the options discussed was having the EDA pay off the assessments, and in return the EDA would then own the other two properties and the pond. Mr. Ulrich gave the history behind these properties. Mr. Goebel's land was never EDA Board Meeting September 30, 2005 Page 4 of 5 included in the TIF district and has never been able to get any incentives. The EDA has been trying to find a way to help Mr. Goebel, but they have never been able to help. Mr. Ulrich stated that the EDA has done something like this before and it was successful. Mr. Jansick also mentioned that these parcels are now designated as JOBZ and that the finance team felt having these two lots would be helpful. The board stressed that this is a good opportunity to move forward with and to get something done with this land that has sat empty for 30 years. More information will be brought back to the board at the next meeting. IX. HCDC 2006 Budget Mr. Seppelt provided a handout with the budget he is proposing. The Finance Team suggested changing where the ED Loan Transfer comes from. Typically $5,000 is taken out of both the Downtown Loan Program and the Economic Development Loan Program for a total of $10,000. The Finance Team felt that since there is more money and activity in the Downtown Loan Program that the entire $10,000 should come out of that fund. This money has also not been transferred yet for 2005, so it was also recommended that this be retroactive to 2005 as well. Mr. Hoversten stated that there is a chance that the SBDC will not be coming to the EDA. There are matters that are being considered at the state level. The budget will be brought back at a later date for approval. M/S /P: Jansick/Haugen to allocate all $10,000 of the EDA Loan Transfers from the Downtown Loan Fund and for this to be retroactive to January 1St, 2005. Passed unanimously. X. Project Ideas for 2006 — Part 1 Mr. Seppelt asked the board for any input for project ideas for 2006. This will be brought back each month • Cornerstone Commons • Downtown Streetscape • Wetherell Property • Industrial Park Signage • JOBZ • Company "X" • Company "Y" • Goebel Land • Post Office • Brown's Greenhouse • SWMF — renewable energy • Site visits to businesses XI. Grant and Loan Applications Sign and Awning Grant Program A. Titan Cleaners $2,000 M/S /P: Haugen /Stotts to approve the Sign and Awning Grant for $2,000 for the Titan Cleaners. Passed unanimously. EDA Board Meeting September 30, 2005 Page 5 of 5 B. Kock's Jewelry $2,000 M/S /P: Stotts/Hoversten to approve the Sign and Awning Grant for $2,000 for Kock's Jewelry with the encouragement to coordinate it with the other signs on the Hotel. Passed unanimously. Storefront Revitalization Matching Grant Program A. Kock's Jewelry $5,000 M/S /P: McGraw /Stotts to approve the Storefront Revitalization Matching Grant for $5,000. Passed unanimously. XIL Chamber CVB Update Marc Vaillancourt gave the following report: The new sign was put up last week. Arts and Crafts was a successful event and it is estimated that it brought 18,000- 20,000 people to downtown for the event. The leadership program has begun. There are 26 participants. Next year it will be expanded to allow 28 participants and 2 high school students. Currently, the budget for 2006 is being worked out along with future plans. Sue Mortensen has put in her letter of resignation. There are new directors coming to the board — Dan VanOverbeke, Paul Nordin, and Mr. Vaillancourt is working on getting Dan Carlson from 3M on the board of directors. The merger of the two boards is just about complete. XIII. Other Business Mr. Seppelt mentioned that the HDA will be having its First Annual Meeting event. A guest speaker will be coming in to give a presentation on Downtown "Sense of Place." The event will take place on November 3rd at 5:15pm. Mr. Vaillancourt told the board that there were only 14 of the 450 tickets available for the Gala in November. XIV. The next meeting will be October 28r", 2005 at 7:00am. XV. Adjourn The meeting adjourned at 8:10am. Respectfully submitted, Erin Eberdt EDA Assistant