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12-23-2005 EDAMHutchinson EDA Board of Directors Minutes of Meeting Friday, December 23, 2005 at 7:00 a.m. Members present in bold print: Members: Tim Ulrich Steve Jansick Jim Haugen Don Walser Duane Hoversten Casey Stotts Mike McGraw Marc Vaillancourt Staff: Miles Seppelt, EDA Executive Director Erin Eberdt, EDA Assistant L Tim Ulrich called the meeting to order at 7:02a.m. II. Approve Agenda No action taken III. Review and Approve Meeting Minutes a. Review minutes from December 2nd EDA Board Meeting M/S /P: Stotts/Hoversten to approve the minutes from the December 2, 2005 EDA Board meeting as written. Passed unanimously. b. Review minutes from November 16th Finance Team Meeting M/S /P: Walser /Stotts to approve the minutes from the November 16, 2005 Finance Team Meeting as written. Passed unanimously. IV. Review November Financial Statements — Ken Merrill Miles Seppelt gave the following report: o On Pg 1 under operations for the EDA, there is $213,289 cash on hand. The total fund balance as of November 30, 2005 is $213,577. Total Mortgages receivable is $90,238. o Pg 2 and 3 is the statement of revenue and expenses. The EDA continues to collect $500 each month for the Wetherell Property. $7,884 was collected for EDA Board Meeting December 23, 2005 Page 2 of 5 the annual rent for 2006 on the Stritesky Property. The EDA has spent down a total of $3,802 for the month of November. The EDA has generated a total of $89,227 for the first eleven months of 2005. o Pg 4 under the EDA Loan Fund, there is $115,879 as cash on hand. The payments to Ashwill Industries are now coming in. The principal is tracked under assets and the interest is tracked under Revenues -Loan Repayment - Interest. • Pg 5 under the EDA Downtown Loan Fund, there is $523,225 as cash on hand. Mortgages receivable is $732,618. $118,522 has been collected this year for loan repayments. A total of $214,589 has been paid out thus far for 2005 including loans, downtown grant program, and miscellaneous. The balance sheet reflects spending down a total of $96,067. Under the expenses on the Downtown Loan Fund, $10,000 was transferred to the operations of the EDA. • The transfer from the City's general fund of $100,000 will show up on December's financial statements. M/S /P: Stotts/McGraw to approve November financial statements as presented. Passed unanimously. V. Director's Report Miles Seppelt gave the following report: A. Liquor Hutch — This project is more or less complete. The signage and banners for the exterior of the building are still needed and there is a small amount of tile work that is left. The parking lot failed the strength tests in multiple aspects. It is expected that when it gets warn, it will be torn out and reconstruction to the correct specs as far as strength and dimensions go. B. Cornerstone Commons — Rix Corner Redevelopment — The soil improvements have been completed. The next step will be the footings and foundation. The steel has been ordered and it is expected that by late February it will arrive and construction of the building will begin. C. Proposed Downtown Redevelopment Project — In the past month it was determined that this project would not be feasible. There would not be enough tax increment generated to pay for the necessary costs. Other options are now being researched. D. Downtown Streetscape Project — The tall lights are starting to go up. The Regional Vice President from Hallophane Lighting came to the last city council meeting to explain what happened with the order. There was discussion about the slipperiness of the sidewalks. Mr. McGraw asked if there had been any complaints. Mr. Seppelt stated that he has not heard any, but he could look into it. Mr. Seppelt stated that when it warms up, there is EDA Board Meeting December 23, 2005 Page 3 of 5 another coat of sealer that needs to be applied that will have some sort of grit in it. Mr. Stotts mentioned that he would be working on a proposal to change the snow removal process downtown. Mr. Ulrich and Mr. McGraw did not think that the City plowed the sidewalks along Main Street other than by Library Square. There was further discussion about this topic. The Board asked Mr. Stotts to keep them informed about this matter. E. Industrial Park Development — 1. Industrial Park Signage — Mr. Seppelt still needs to get some more bids. There is still a lot of interest for the project from the companies in the Industrial Park. Until it warms up, it cannot really move ahead. 2. Goebel Property — There was no new information to report on this topic. F. Business Recruitment — 1. Company "X" — This is moving forward. Ms. Eberdt received a call from DEED stating that this project was determined to be an expansion and not a relocation — therefore there is no relocation agreement needed. In February, the company will most likely start the planning process. By June or July the construction should begin. G. Other — Mr. Seppelt did a BRE visit with Cenex this week. He will keep the board updated on that as information becomes available. Mr. Seppelt is applying for a Redevelopment grant through the state. It would be to acquire some land for a parking lot that would support the Cornerstone Commons Redevelopment Project. A new intern has also been hired. Her name is Jessica Evans and she will start in a couple of weeks. The exact dates are not yet known. VI. Election of Officers for 2006 (required by statute M.S. 469.096) A. President 1 -year term B. Vice President C. Treasurer 1 -year term D. Secretary 1 -year term (can be non - Commissioner) E. Assistant Treasurer (can be non - Commissioner) Mr. Ulrich felt that the board should be in some sort of rotation. The President could serve for a couple of years, with the Vice President taking over that position then. Mr. Seppelt stated that the Secretary and Assistant Treasurer could be non- Commissioners. This could mean that the intern is the secretary and that Mr. Merrill is the Assistant Treasurer. EDA Board Meeting December 23, 2005 Page 4 of 5 Mr. Ulrich stated that this item should be tabled until January so that he can get in contact with the members of the board and discuss who is interested in what position. Mr. Seppelt provided the group with a chart showing the term lengths for the board members. VIL State Theater On Wednesday Mr. McMonagle contacted Mr. Seppelt about some problems he is having with not meeting the projections on attendance and cash flow. One of the problems is that there are still people that do not realize that the State Theater is open. Another is that the other movie theater is holding onto movies longer than normal, so that by the time they get released to be used at the State Theater, too much time has gone by and people have already seen them. Mr. McMonagle has requested to extend the interest only payments for 12 months. Mr. Ulrich stated that the Finance Team felt that this was fine, but they thought that the McMonagle's need to figure out their business plan. Mr. Vaillancourt stated that Teresa Pejsa and him are working on ideas to spark more interest for the theater. VIIL Review of DRAFT 2005 Annual Report & 2006 Work Program Mr. Seppelt passed out copies of the draft 2005 Annual Report for the EDA. There is still some work to be done with it, but he asked the board to review it and give him their comments. He stated that he would be getting in touch with each board member in the next couple of weeks to get feedback on the report. It will be presented at the January Board meeting for approval and will then be presented at the first City Council meeting in February. He also discussed the tentative list of projects for 2006. He asked for any feedback the board had. He also pointed out an idea he added under the general projects. He is suggesting some sort of reception to salute the founding fathers of "Hutchinson Growth" since the 45th anniversary will be in 2006. IX. Grant and Loan Applications * ** NONE * ** X. Loan Subordination, Cornerstone Commons M & I Bank sent Mr. Seppelt a letter asking the EDA to have their loan be subordinate to the bank loan. Since the EDA has not closed on this loan yet, nothing can be done. The Finance Team suggested that Mr. Seppelt send a letter to M & I stating that after the EDA funds have been dispersed, that the EDA will do a loan subordination. No action was taking at this time. EDA Board Meeting December 23, 2005 Page 5 of 5 XI. Chamber CVB Update The Board of Directors approved the program of work and budget for 2006. The annual meeting will be January 26tH XII. Other Business Mr. Seppelt reminded the board that he would be on vacation next week. XIIL The next meeting will be January 27, 2006 at 7:OOa.m. XIV. Adjourn The meeting adjourned at 7:56a.m. Respectfully submitted, Erin Eberdt EDA Assistant