07-27-2007 EDAMEDA Board Meeting
Minutes of Meeting
Friday, July 27th 2007
Members present in bold print:
Members:
Tim Ulrich Steve Jansick Jim Haugen Diane Gordon
Duane Hoversten Casey Stotts Mike McGraw Bill Corby
Staff:
Miles Seppelt, EDA Director
Shan Ghimire, EDA Assistant
Ken Merrill, Finance Director
I. Mr. Ulrich called the meeting to order at 7:05 a.m.
II. Approve Agenda: No action.
III. Review and Approve Meeting Minutes:
a. Minutes of May 16th Finance Team Meeting and the notes from the June
20th meeting.
M /S /P: Hovertson /Gordon to pass May 16th Finance Team minutes
and the notes from June 20th meeting. Approved unanimously.
b. June 291h EDA Board Meeting
M /S /P: Gordon / Haugen to pass June 29th EDA Board minutes.
Approved unanimously.
IV. Review June 2007 Financial Statements
Mr. Merrill gave the following report:
• For operations we have cash available of $124,019 — this is different from
the May 31" balance of $212,851 because of adjustments being made
dating back to December 31st
• Also in operations we have $56,736 remaining from the proceeds of the
Warrior land sale of 2005.
• In June the EDA received its first levy dollars: $64,946. In addition we
had $500 in rental revenue from the Wetherell property.
• Expenditures were just the typical items; "Professional Services" was
higher due to payments to SEH for their work on the industrial park
feasibility study.
• In addition, $3,950 was paid for our membership in the Community
Venture Network (CVN) and this is reflected in "Dues & Subscriptions."
• Also $4,557 in improvements were made to the Wetherell lot — where the
Call Center is to be located. This is shown in "Improvements to Land."
• For the month total expenditures were $19,565.
• We have a total of $129,305 in cash available Economic Development
Loan Fund with one outstanding loan (to Ashwill Industries) which is
performing as required.
• The Downtown Loan Fund has $510,904 in cash available with mortgages
totaling $715,779.
• Thus far in 2007, we have made loans totaling $136,400 and grants
totaling $31,694 in the downtown.
It was mentioned that once Customer Elation and Warrior manufacturing fulfill their
obligation, EDA will be receiving $100,000 back from the grants made available to
them. Further discussion was to throw some infrastructure in 77 acre industrial park
from that repayment.
M /S /P: Haugen, Hoversten to approve financials for June 2007. Passed
Unanimously
V. Director's Report
a. Cornerstone Commons
- They should be paying back the loan soon.
- American Pastime BBQ is planning to be open by Wednesday.
- Snap Fitness is expanding the facility towards the north end of the
building
- They are working on individual office suites in the west end of the
building
b. Warrior manufacturing
Mr. Miles noted that he toured the production facility. They are already
into production; however, offices are yet to be done. He also mentioned
that we could throw a Board Meeting at the facility later this year once the
offices are done.
c. Nordic Components / Spec Building
Mr. Miles is regularly chatting with Nordic components to move the
project a head
d. Family Video
They should be working on Hutchinson project once they are finished with
their store in New Ulm.
e. Industrial Park Design
Mr. Miles is meeting with city engineer and neighbor. He also talked with
3M about running services straight through the west of the industrial park.
f. Midwest Tool Grinding
They are very interested in Cenex Site. They have not decided whether
they will be renting Spec Building Site.
g. Cenex Redevelopment Project
Phase II environmental inspection report should be ready by following
week. Mr. Miles is working with Mr. Sebora to put a purchase agreement
together. He also noted the structure of financing for this project. The
proposed structure is as follows:
- $150,000 to be invested from Downtown Development Fund and
- $150,000 from City Development Fund
- $200,000 will be paid at signing of Purchase Agreement
- $99,999 on January 1st, 2008
- $1 at closing
While repaying, Downtown Development Fund will be paid back first and
the City Development fund will be paid later.
M /S /P: Hoversten, Gordon to move with proposed funding structure. Passed
Unanimously
VI. Structure of Customer Elation Deal
Mr. Seppelt provided an update on the Customer Elation Deal. As per the plan, the
EDA would own the call center building and lease it to the City. The City would then
sub -lease the building back to the EDA, which in turn would sub -lease it to the
company. The purpose of this arrangement is to get the City into the equation, as it
will be the city's credit rating that the bond - holders will be looking at. The city
leasing the facility provides much more financial strength for the deal, whereas
having just the company & EDA involved would not interest bond holders.
Current plan will have a 5 -year lease with the company; however, most of the board
members thought that the agreement should be lengthened for more than five years.
M /S /P: Gordon, Haugen to recommend at least 8 year agreement in exchange of
personal agreement. Passed unanimously.
VII. EDA/Spec Building — Nordic Components
Mr. Seppelt provided a preliminary funding option for Spec Building. Nordic
Components is proposing to fund about $520,000 while $835,000 would come through
TIF bond. Also, $200,000 could be used from Economic Development TIF District.
VIII. Grants & Loan Applications
Downtown Revolving Loan Fund
10 Main Street — McKraut Holdings (Gus Wurdell) $35,000
The board wanted to make sure that the total outstanding obligation secured by the
property is less than 100% of the assessor's estimated market value. So, the application
will be tabled in next meeting or will go through e -mail voting, if need be.
IX. Funding Request — Southwest Initiative Foundation
Tabled for next meeting.
X. Other Business
The board was informed that Mr. Seppelt is going to be on vacation between August 17
and August 30th, 2007.
XI. Chamber Update
a. Chamber has received a state grant for tourism development. They are
working on bringing other cities together, including Litchfield and
Glencoe, to form a group.
b. CVB is working on organizing a `lady's night' probably in November.
c. Arts and Crafts Festival is on September 14th and 15th.
XII. Set next meeting
The next meeting will be Friday, September 7, 2007 at 7:00 am in the City Center
Main Conference Room.
XIII. Adjourn
The meeting adjourned at 8:31 a.m.
Respectfully submitted,
Shan Ghimire, EDA Assistant