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11-30-2007 EDAMEDA Board of Directors Meeting Minutes 7 AM Friday, November 30, 2007 Members present in bold print: Members Tim Ulrich Duane Hoversten Casey Stotts Jim Haugen Staff Miles Seppelt, EDA Director Shan Ghimire, EDA Assistant Ken Merrill, Finance Director Guests Bill Corby Steve Jansick Diane Gordon Mike McGraw I. Mr. Ulrich called the meeting to order at 7:03 AM. II. Approve Agenda: No action. III. Review and Approve Meeting Minutes a. Minutes of November 2nd, Board of Directors M /S /P: Stotts, Hoversten to approve the minutes from November 2nd Board of Director's meeting. Approved unanimously. b. October 17th Finance Team Meeting M /S /P: Hoversten, Haugen to approve the October 17th Finance Team meeting minutes. Approved unanimously. IV. Review October 2007 Financial Statements Finance Director Ken Merrill gave the following report: • As of the end of October, the EDA has $108,309 cash on hand and total fund balance equal to $108,522. • The EDA received $500 in rental revenues for the Wetherell property, $5,009 as the first payment for the homestead tax credit, &38,519 on land sale, $104,511 on reimbursement from Customer Elation; total income for the month being equal to $148,539. • Professional services for the month totaled $7,617. Regular salaries and fringe benefits totaled $13,116, total expenses being equal to $21,141. • The Economic Development (Industrial Park) loan fund has $87,848 in cash available. • The loan to Ashwill industries is performing as required, with an outstanding balance of $23,032. • The EDA is maintaining the outstanding loan balance of $21,560 on the books for the time being from the Allied Mechanical loan. • The EDA continues to have $25,000 on deposit with MCCF. • In the Downtown Loan Fund, the EDA has $548,885 in cash available and holds mortgages totaling $683,022. All loans are performing as required. • For the first 10 months of the year the EDA has received $104,430 in loan repayments and disbursed $38,048 in downtown grants. • In the MIF Loan Fund, year to date payment of $5,200 was received from Warrior manufacturing with total assets being equal to $200,466. M /S /P: Jansick, McGraw to approve the October Financial Statements. Passed unanimously. V. Director's Report CENEX Project • Their new facility in Adams Street is rolling along. The new building provides space for loading and unloading of material inside the building so ground contamination will be avoided in the future. • EDA Staff is working with Brown Intertec on cleaning up the old site. Customer Elation • They started working on foundations and footings. • If the project goes as planned, building will be enclosed by mid January and could possibly open for business by April. • Working on closing the $500,000 loan from the state. Warrior Manufacturing • They are moving ahead with the production. • This week they will receive the permanent certificate of occupancy. Business Recruitment • Global Discware toured the town. They are looking at two other possible places for their expansion. By the end of December they should be narrowing their list of location options. • Information was provided about GR Kreations, a business located in the township that makes things out of Styrofoam. They are looking for expansion and need about 10,000 sq. feet by next summer. Since they are looking for a space to rent, we could possibly move ahead with the Spec Building project. More information will follow next month. New Intern ■ Lee Miller has been hired as the new intern for spring 2008. He will start work on December 10th. VI. Industrial Park Design SEH has submitted the final report. They came up with three options and the consensus for Plan B — which provides the greatest number of lots and has the lowest overall infrastructure cost. Phase I includes the development of about 38 acres of land. General discussions followed on design, timeline and project financing. VII. Pending Board Members Vacancies Mr. Seppelt provided information regarding the EDA Board member's term on the board. The EDA Board terms are governed by City Council Resolution 10969. Per the resolution, there is no term limit for EDA Board members. We will be advertising to fill the board vacancy created by Mr. Hoversten's retirement. VIII. County EDA Mr. Seppelt explained about a recent meeting with the local officials in Glencoe about County EDA. Setting up a countywide EDA would be beneficial for the region and help retain and recruit more businesses in the area. He also presented the funding option by establishing a separate annual levy of $156,000 that would be collected on a county -wide basis. This is the same way of funding applied at city level. Mr. Seppelt requested the board for a resolution to the County Commission to move forward with the plan. Discussions followed on increased taxes because of the separate levy to set up County EDA. M /S /P: McGraw, Hoversten to approve the resolution to the County Board recommending the establishment of a County EDA. Passed unanimously. IX. Recognition Event There was discussion about having an event to recognize the founders, outgoing EDA board members and celebrate success. It will be organized sometime in January or February so that we would have enough time for preparation X. Loan Subordination Request — Wells Fargo Bank The EDA received a request from Wells Fargo Bank looking for a formal subordination from the EDA of the loan on the property located at 137 Main St. South, owned by Mr. George Quast. The loan they are putting against the building is $125,000. The tax assessed value for 2008 is $256,600, which puts loan to value well below the 100% loan -to -value threshold since the outstanding balance on EDA loan is about $38,000 M /S /P: McGraw, Haugen to approve the loan subordination to Wells Fargo Bank. Passed unanimously. Mr. Jansick abstained. XI. SBDC — Bill Corby Mr. Corby explained about recent effort from Chamber of Commerce to bring back SBDC office to Hutchinson. It was mentioned that it would require $10,000 start -up fund and an office space. He mentioned that the plan is to raise $5,000 and request Ridgewater College for a matching fund and an office space. He mentioned that if EDA could contribute $2,500, another $2,500 would be collected form other sources and finally take it to the Ridgewater College. General discussion followed on SBDC and SBM and how it would benefit the community. M /S /P: Stotts, McGraw to provide up to $2,500 for this initiative for one year. Passed unanimously. Mr. Hoversten abstained. XII. Grants & Loan Applications Sign & Awning Grant Program Julie White, White Properties $2,000 23 Main St. North M /S /P: Haugen, McGraw to approve $2,000 Awning Grant to White Properties. The motion passed unanimously. Angela Mattson, Purse -a- nalities (Lillian's) 34 Main St. North $2,000 M /S /P: McGraw, Hoversten to approve $2,000 Sign Grant. The motion passed unanimously. Alan Kock, Kock's Jewelry, 10 Main St. South $2,000 (Sign) M /S /P: Stotts, Haugen to approve $2,000 Sign Grant. The motion passed unanimously. Gus Wurdell, 10 Main St. South $1,796 (Awning) M /S /P: Haugen, McGraw approve $1,796 Awning Grant for the building on 10 Main Street South. Passed unanimously. Storefront Revitalization Matching Grant Brett Oman, 141 Main St. South $5,000 M /S /P: McGraw, Stotts to recommend approval of $5,000 Storefront Revitalization Grant to Brett Oman. The motion passed unanimously. XIII. Other Business None XIV. Chamber Update Mr. Corby updated the Board on the following events: ■ Stress Doctor is presenting next Thursday. ■ Chamber has been calling for nominations for annual banquet. XV. Set next meeting The next meeting will be Friday, January 4, 2008 at 7:00 am in the City Center Main Conference Room. XVI. Adjourn The meeting adjourned at 8:40 a.m. Respectfully submitted, Shan Ghimire, EDA Assistant EDA Board of Directors Minutes of Special Meeting Thursday, December 27th, 2007 Members present in bold print: EDA Board Members Tim Ulrich Steve Jansick Duane Hoversten Casey Stotts Staff Miles Seppelt, EDA Director Ken Merrill, City Finance Director Guests Anthony Hanson, Finance Team Jim Haugen Diane Gordon Mike McGraw A special meeting of the Hutchinson EDA was held to review a request from Beacon Bank for a loan subordination on the Cornerstone Commons project. I. Call to Order Mike McGraw called the meeting to order at 7:04 AM. II. Request for Loan Subordination Staff gave the Board of Directors an update on the Cornerstone Commons project and the request for a loan subordination in favor of Beacon bank. City Attorney Marc Sebora has reviewed the subordination agreement and has found that the city's interests are adequately protected. Beacon Bank has provided a commitment letter indicating that they will provide $2,925,000 in financing for Cornerstone Commons. An updated appraisal has been provided on Cornerstone Commons, indicating an appraised value of $3,900,000. Total project financing is less than the appraised value, so this meets the EDA's loan -to -value guideline. Marcus Construction has provided documentation on TIF eligible project costs. M /S /P: Stotts, Hoversten, to approve the subordination agreement subject to each of the ten clauses of the agreement being met to the satisfaction of the city. The motion passed unanimously. III. Adjourn There being no further business to attend to, the EDA Board adjourned at 7:14 AM. Respectfully Submitted. Miles R. Seppelt EDA Director