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09-29-2006 EDAMEDA Board of Directors Minutes of Meeting Friday, September 29, 2006 Members present in bold print: Members: Tim Ulrich Steve Jansick Jim Haugen Duane Hoversten Casey Stotts Mike McGraw Staff: Miles Seppelt, EDA Executive Director Dan Sexton, EDA Assistant I. Tim Ulrich called the meeting to order at 7:05 a.m. II. Approve Agenda- No action III. Review and Approve Meeting Minutes a. Review minutes from August 25th EDA Board Meeting Don Walser Marc Vaillancourt MIS/P: Hoversten, Jansick to approve the minutes from the August 25, 2006 EDA Board meeting as written. Passed unanimously. b. Review minutes from August 15th Finance Team Meeting MIS/P: Haugen, Hoversten to approve the minutes from the August 15, 2006 Finance Team Meeting as written. Passed unanimously. IV. Review May Financial Statements Mr. Seppelt gave the following report: o On Pg 1 under operations for the EDA, there is $209,220 cash on hand. The total fund balance as of August 31, 2006 is $208,131. Total Mortgages Receivable is $76,608. o Pg 2 and 3 is the statement of revenue and expenses. The EDA continues to collect $500 each month for the Wetherell Property. The EDA has generated a total of $4,000 to date for the year of 2006. Total expenses for the month of August equal $10,009. o Pg 4 under the EDA Loan Fund, the cash on hand is $120,399. The EDA has generated a fund balance of $145,399 to date the year of 2006. o Pg 5 under the EDA Downtown Loan Fund, cash on hand is $79,644. Mortgages receivable is currently $661,761. $79,644 has been collected this year for loan repayments. A total of $22,280 has been paid out thus far in 2006 including loans, downtown grant program, and miscellaneous. The balance sheet reflects revenues of $57,364 above expenditures. MIS/P: Jansick, Haugen to approve the August financial statements as presented. Passed unanimously. V. Director's Report Miles Seppelt gave the following report: A. Goebel Land Transaction — The City has received confirmation form McLeod County that the EDA does own the two eastern Goebel properties. Some internal filing is still necessary. EDA Board Meeting September 29, 2006 Page 2 of 4 B. Cornerstone Commons — Currently window frames and plumbing is being installed. The streetscape (sidewalk) in front of the building is scheduled to begin work October 9th. C. Warrior Manufacturing — The turnout for the ground- breaking ceremony was a great success. Presently the property has been cleared and further site prep will continue. Warrior is still proposing to be open and in operation April 15th next spring. Mr. Seppelt informed the Board that the MIF grant application was turned in on September 28th. It was discussed the revenues from that grant could be reinvested in the Industrial Park loan fund. D. EDA Budget / Levy — A presentation was given at the September 26th City Council meeting. There will be a public hearing at the next City Council meeting on October l 1tn E. EDAM Third Thursday Event — Thursday September 21St the Economic Development Association of Minnesota had their Third Thursday Event here in Hutchinson, to highlight the revitalization of the downtown and the process of creating the Downtown Master Plan. There was a walking tour of downtown success projects including the Liquor Hutch, State Theater, Cornerstone and many more. F. Update on Industrial Park Lot Development — The preparations of the Wetherell Property are almost complete the EDA should expect another bill for some further grading to the site. Cost of site prep will be incorporated into the final cost of the property. G. Retail Trade Analysis — The EDA will be co- sponsoring the Retail Trade Analysis Event at the Hutchinson Events Center on October 5th. This event will provide business owners with information recourses to further improve their business. H. Business Recruitment a. Nordic Components — This prospect is currently at a stand still with the interest of the company changing with the flow of business. Staff will continue to monitor. b. Alexis Systems — Mr. Seppelt has received a portion of the company's financial plans, however he currently is waiting for historic and personal financial documents on the owner. Contact and discussion between staff and CVN officials are still open. Staff met with Ridgewater officials last week to discuss possibilities of utilizing their East Campus facility. The current proposal to use the facility by Alexis Systems under a 12 -14 month lease contract was well received. c. Baklund Tool & Design — A small business outside of the city limits is currently interested in moving into the industrial park. They are open to various possibilities. VI. Cenex Redevelopment Both parties have organized negotiation committees, which will hopefully meet within the near future. Appraisals for both parties have also been obtained. Mr. Seppelt commented on a DEED sponsored cleanup fund seminar that he had recently attended. He mentioned that there is a $279K Chemical Response & Reimbursement Account that could possibly be utilized for the cleanup of the Cenex site. To access these monies Cenex would have to apply for the funding. After discussions with Ehler's Financial Advisors there are other opportunities possible to off set the cleanup, acquisition, and demolition of buildings from the site. There was further discussion of the scope of this project, whether it should expand beyond its current boundaries. It was mentioned that the EDA should coordinate with other city departments to discuss future plans and goals for this river front area. VII. Partial Release of Mortgage — CGE Properties Mr. Seppelt informed the board that Mark Schiermen has sold the Cellular Building and is requesting a partial release of mortgage to accommodate the new purposed mortgage, which will only include the Hennen's Building. EDA Board Meeting September 29, 2006 Page 3 of 4 MIS/P: Ulrich, Hoversten motioned to approve of the partial release of mortgage. Passed unanimously, with Mr. Jansick abstaining from the vote. VIIL Pet Hospital Building Mr. Seppelt informed the board that there has been an on going open discussion with Mr. Jensen the attorney for the Rieters. They have proposed a value of $125,000 for the property and the inclusion of appraisal and attorney fees. He mentioned the limitations of the grant monies: $135,000 for acquisition and $10,000 for demolish. Those amounts are flexible and monies can be shifted between the two values not to exceed $145,000. Further discussion following concerning the ability to incorporate the attorney and appraisal fees within those grant monies. MIS/P: Hoversten, Jansick motioned to move forward with the purchase of the property for $125,000 with the incorporation of the acquisition and demolition costs being included within the $145,000 grant monies. Passed unanimously. IX. Inquiry to Purchase EDA Land (5.7 acres — former Goebel Lots) Mr. Seppelt informed the board that an investor from Litchfield has inquired about purchasing the eastern two lots of the Goebel Property to construct storage sheds. He questioned whether this type of project was within the goals and vision of the EDA. Mr. Haugen followed by mentioning some of the goals of the EDA: to create jobs, strengthen Hutchinson's economic base, and facilitate business growth, retention and expansion. Further discussion followed with the mention of other available sites for this type of business and the overall availability of property within the industrial park. X. Warrior Mfg. MIF Grant / Loan — set interest rate Mr. Ulrich began by informing the board that Mr. Seppelt had recently given a presentation to the City Council concerning the $200K MIF Grant that he is applying for, for Warrior. Mr. Seppelt followed by discussing the states recommendation to set the interest rate for this grant / loan at between 2 -5 %. The Finance Team has recommended that the rate be set at 2.5% as a result of the perceived administrative burden Warrior Mfg. will have to accommodate by utilizing these funds. MIS/P: Jansick, Ulrich to approve the 2.5% interest rate on the $200K Loan via the MIF Grant. Passed unanimously. XI. Grant & Loan Applications Sign & Awning Grants Performance Chiropractic — Blaine MacDonald $2,000 MIS/P: Haugen, Jansick motioned to approve the $2,000 grant for Performance Chiropractic. Passed unanimously. Quiznos — Lori Kaping $2,000 MIS/P: Jansick, Hoversten motioned to approve the $2,000 grant for Quiznos. Passed unanimously. EDA Board Meeting September 29, 2006 Page 4 of 4 Mainstreet Antiques — Skip Quade $2,000 Was tabled pending further sign bids. Storefront Revitalization Matching Grant Mainstreet Antiques — Skip Quade $1,525 MIS/P: Hoversten, Jansick motioned to approve the $1,525 matching grant for Mainstreet Antiques. Passed unanimously. Bavarian Haus Restaurant — Woody Lamprecht $2,615 MIS/P: Haugen, Hoversten motioned to approve the $2,615 matching grant for the Bavarian Haus. Passed unanimously. 2 Main Street N. — Lorraine Meyer $3,956.52 MIS/P: Ulrich, Jansick motioned to approve the $3,965.52 matching grant for the Meyer Property. Passed unanimously, with Mr. Haugen abstaining from the vote. XII. Other Business Mr. Seppelt informed the board the Mayor had suggested incorporating the new 3M plant manager Mike Retterath to either the Finance Team or the EDA Board. The Finance Team has approved his position on their board. M/S /P: Jansick, Ulrich motioned to approve Mr. Retterath's position on the Finance Team. Passed unanimously. Mr. Ulrich discussed the request of the Mayor and the City Council to be updated on the EDA's actions via minutes. Mr. Ulrich mentioned that in keeping with the goals of the EDA that Bio- Science will continue to be a priority. XIII. Chamber CVB Update Mr. Vaillancourt gave the reported the following: • The revamped Leadership Institute is going great. • The Arts & Crafts Fair went well. The fair is always adapting for the better. Revenues for the vendors were up, however attendance was down. XIV. The next meeting will be Friday, October 27, 2006 at 7:00 a.m. XV. Adjourn The meeting adjourned at 8:30 a.m. Respectfully submitted, Dan Sexton EDA Assistant