01-27-2016 EDAMEDA Board Meeting
Main Conference Room — City Center
11:30 AM Wednesday, January 27, 2016
Members present in bold.
MEETING MINUTES
Members
Mike Cannon Corey Stearns Daron Vanderheiden Chad Czmowski
Mary Christensen Mike McGraw Jonny Block
Staff
Miles Seppelt, EDA Director
Andy Reid, City Controller
Matt Jaunich, City Administrator
IV
LTA
Call to Order - The meeting was called to order at 11:34 AM.
Election of 2016 Officers
After discussion, nominations were as follows:
EDA President
Vice -President
Treasurer
Assistant Treasurer
Secretary
Mike McGraw
Jonny Block
Chad Czmowski
Andy Reid
Miles Seppelt
M/S/P: Block, Vanderheiden to elect the slate of candidates as proposed. Passed unanimously.
Approve Agenda — no action
Review Minutes
A. December 16, 2015 Finance Team Meeting
M/S/P: Stearns, Cannon to approve the Finance Team minutes as presented; passed unanimously.
B. December 23rd, 2015 EDA Board Meeting
M/S/P: Stearns, Block to approve the EDA Board minutes; passed unanimously.
Review December EDA Financial Statements — Andy Reid
Some minor revisions were made to the financial report since the Finance Team meeting:
■ Cash available in operations is $174,882
0 $56,736 is reserved (proceeds from Warrior land sale) and $111,753 is unreserved.
o For the year the EDA had a $10,448 deficit in operations. This was due to lower revenues
from hay land rental, the $5,000 allocated for the DEED magazine advertising and going
somewhat over budget on developing the on-line application forms for the EDA website.
■ The Economic Development Loan fund has $426,638 in cash available, of which $1,915 was loan
interest income YTD.
■ Downtown revolving loan fund has $231,984 in cash available; loans receivable total $709,480 and
$201,329 in capital assets (Cenex & Wright properties). $30,000 is reserved for the EDA contribution
to the Signage & Wayfinding project.
■ Downtown loan repayments yielded $1,407 in interest income for the month.
■ MIF Loan fund has $902,583 in cash available and loans receivable of $175,623 (from NuCrane).
$300,000 is reserved for the CTE Equipment Purchase initiative.
■ Tax Increment Financing Fund has $415,916 in cash available.
M/S/P: Block, Czmowski to approve the financials as presented; passed unanimously.
VI. Director's Report
■ Marketing Plan Report: Website updates = 0, Facebook updates = 17, Twitter activity = 17. At present
the EDA has 137 followers on Facebook and 33 on Twitter.
■ BR&E visits were made to MITGI, Redline Manufacturing and HTI. All very good visits.
■ Business recruitment / expansions: Staff provided an update on recent prospects and ongoing
conversations. Summary:
MITGI looks more like 2017
Prospect for Cub Foods building is about 50/50
■ The Cornerstone Commons sale appears to have been delayed until February 1 st. Their downtown
loan (about $80,000) would be paid off at that time.
■ Hotel project seems to be moving ahead. Staff will be meeting with the developers this coming
Wednesday. Their goal is to break ground by April and wrap up the project by the end of October.
■ Workforce Development Plan Update
o Five local companies had agreed to contribute to the CTE equipment fund
o One is pending and won't be decided until June
o Staff has an additional five letters out now, and will be following up shortly.
o The planned Welding Camp is all set for June
o Staff is working on lining up company internships for students.
■ Staff is talking with a "Company V that is looking at the HTI manufacturing building.
VII. Old Medical Clinic
■ Redevelopment TIF District should be established by February 23rd
■ Closing on the purchase of the property will be February 24th
■ A Request for Proposal will be put together and distributed to developers hopefully in March.
■ Plan is to demo the building in April — staff will obtain quotes for that work for the Board to consider.
■ Staff reported that they have already had a conversation with a potential developer.
■ Staff noted that as part of the process of establishing the TIF District the EDA will have to pass a
resolution making that recommendation.
M/S/P: to approve EDA Resolution 2016-01, recommending to the City Council that TIF
District 4-16 be established. Passed unanimously.
VIII. Hutchinson Enterprise Center
■ Staff reviewed the project source & use statement
o Total funds available for the project (assuming the minimum allowed local match) would
be $1,665,000.
o Estimated project costs would be about $1,776,161.
■ A 10% contingency fund of $161,470 is included.
o Funding gap is projected to be $111,161.
■ Staff reviewed the Enterprise Center operating pro -forma
o The primary expense would be property taxes, estimated to be $2.50 psf.
o Staff has contacted the county to see if vacant spaces and EDA offices could be exempt
from property taxes, due the facility being municipally owned.
At 33% occupancy (1.5 bays) there would be a net operating loss of about $4,110 per
year.
At 56% occupancy (2.5 bays) there would be a net profit of $3,450 per year.
At 77.8% occupancy (bays) there would be a net profit of $11,010 per year.
All of these assume that only those bays occupied by `for profit' business would be
subject to property taxes.
■ Staff indicated that bids for architectural and engineering services had been obtained when the
project was being planned three years ago and that the low bid came in from ZRT Architects &
Engineers.
■ EDA Board concurred with the proposal go with ZRT if their proposed fee does not significantly
change.
■ Discussion followed.
M/S/P: Czmowski, Vanderheiden to authorize the project and direct staff to take all necessary steps for
its implementation, contingent upon receiving a favorable answer to the property tax question currently
being considered by the McLeod County assessor's office. Passed unanimously.
Staff indicated that they'd be contacting members of the Finance Team and EDA Board to establish a
project team to oversee implementation of the project.
IX. Grant & Loan Program Applications — None
X. Other Business
■ Manufacturer's Summit: February 16th
■ Consider additions to Finance Team — to be discussed next month
■ Merge the two EDA website into one — EDA Board concurred
XI. Set Next Meeting — 11:30 AM Wednesday, February 24, 2016.
XII. Adjourn — 1:03 PM
Respectfully Submitted,
Miles R. Seppelt
Economic Development Director