11-21-2016 EDAMEDA Board Meeting
Main Conference Room — City Center
11:30 AM Monday, November 21St, 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
Matt Jaunich, City Administrator
Andy Reid, Finance Director
Jeff Page, EDA Program Assistant
I. Call to Order — EDA Vice -President Jonny Block called the meeting to order at 11:33 AM.
II. Approve Agenda — no changes
III. Review Minutes
A. October 19th Finance Team Meeting
M/S/P: Stearns, Cannon to approve the minutes as written. Passed unanimously.
B. October 17th EDA Board Meeting
M/S/P: Christensen, Block to approve the minutes as written. Passed unanimously.
C. October 25th EDA Board Special Meeting
M/S/P: Czmowski, Stearns to approve the minutes as written. Passed unanimously.
IV. Review of October EDA Financial Statements
■ Cash available in operations is $108,701
■ $56,736 is reserved (proceeds from Warrior land sale) and $51,674 is unreserved.
■ The Economic Development Loan fund has $434,237 cash available and two loans receivable, Redline
Systems and Ashwill industries, both having balances of $15,636.
■ Downtown revolving loan fund has $330,447 in cash available.
o Loans receivable total $589,263 and there is $201,329 in capital assets (Cenex & Wright
properties).
o Total assets in the fund are $1,104,860
■ MIF Loan fund has $180,997 in cash available and one loan receivable in the amount of $116,305 (from
NuCrane).
o Unreserved fund balance is $297,302
■ The Hutchinson Enterprise Center Fund has $715,355 in cash available,
o Expenditures totaled $27,961 (advertising for bids for the incubator project, architectural fees)
■ Shopko Development District #4-5 has $181,564 in cash available and an Interfund Loan receivable from TIF
District 4-16 in the amount of $282,648
o Expenditures were $875 — environmental work for the Hotel project (MPCA)
■ TIF District 4-16 had an Interfund Loan Payable to Development District 4-5 in the amount of $282,648.
M/S/P: Cannon, Block to approve the financial report. Passed unanimously.
V. Director's Report
A. Marketing plan FB=150, T = 58 (16 updates on each) plus 3 website updates.
B. Business recruitment / expansions — Staff provided an update on recent prospects and ongoing
conversations.
C. Old Medical Clinic Redevelopment — The site visit from Inland Development Partners had to be rescheduled.
D. Contamination Cleanup Grant Application to DEED
■ Staff has submitted a grant application in the amount of $158,014 to assist with the environmental
cleanup needed for the Hotel project.
■ We should hear back from DEED around December 20�h
E. Workforce Development Plan
■ The focus right now is on maximizing "articulation" (college credit for work done in High School)
between the High School and Ridgewater College
■ Staff is working to organize an event for partners in early February at Zella's
■ There will be a meeting December 14th at 3M headquarters in St. Paul to meet with a German
company that may be interested in partnering on the TigerPath/Tiger Manufacturing project.
VI. Hutchinson Enterprise Center
A. Review options for design & project funding
■ Staff updated the Board on two companies that have signed Letters of Intent to rent space in the
Hutchinson Enterprise Center.
■ Staff went over bid results — which came in high.
o Primary reason was the need for extensive soil corrections on the site.
o Low bid was $2,038,000 from Ebert Construction of Corcoran, MN.
■ Alternatives for advancing the project were discussed. These were:
1. Build the project essentially as planned (20,000 sf, with offices)
2. Build a "bare bones" project (20,000 sf, no offices)
3. Build a smaller project (16,000 sf)
4. Cancel the project
Discussion followed. Given that Hutchinson just lost two major manufacturing prospects for the 237,000
sf Hutchinson Technology building for reasons beyond our control, it was noted that we need to take
advantage of those opportunities that we can control.
■ Staff presented a proposal for funding the project, adding SHOPKO TIF District dollars to help cover the
cost for needed soil corrections.
o This was for 20,000 sf building with the following alternates:
1 — Offices (2,000 sf)
2 — Concrete truck lot (will save on maintenance)
3 — Metal liner inside building (to prevent damage to walls)
5 — windows / sheetrock inside of building (will make the space more attractive to potential clients and aid in
marketing)
o Total cost for the project would be $2,444,955
■ A revised project Sources & Uses statement was reviewed and discussed. Funding would come from:
o DEED grant
o Minnesota Investment Fund dollars
o Development Fund
o Incubator TIF district
o Economic Development Loan Fund (to the extent needed)
■ It will be necessary to borrow internally from the Economic Development Loan Fund to front certain
sources (particularly the Incubator TIF district)
Staff noted that adequate financial resources would be left over to assist the proposed Hotel and Old
Medical Clinic redevelopment projects.
■ Additional discussion.
M/S/P: Stearns, Czmowski to recommend to the City Council that:
(A) Award of the Hutchinson Enterprise Center project be made to Ebert Construction for the Base
Bid plus alternates 1,2,3 & 5 and,
(B) The project financing plan outlined by staff be approved and adopted.
Passed unanimously.
B. Braun Intertec Invoice (soil borings, etc.)
M/S/P: Block, Cannon to authorize payment of the Braun Intertec invoice in the amount of $7,553.75.
Passed unanimously.
VII. EDA 2017 Budget (revised)
Staff proposed some revisions to the 2017 EDA budget to account for increased costs in the "Phone Services" and
"Software & Licensing" line items.
At present the EDA is budgeting for an operating deficit of about $1,800 in 2017, which would leave a fund balance
at 90% of the next year's expenses (50% is the minimum amount that's considered healthy).
M/S/P: Cannon, Christensen to adopt the revised 2017 budget. Passed unanimously.
VIII. Downtown Programs
Staff provided an update on the status of all EDA loans from all programs.
Staff proposed updating some language for the Downtown Commercial Rehabilitation Loan Program to make it more
internally consistent and readable.
M/S/P: Block, Czmowski to adopt the new program language.
IX. Mini-Biff Business
Discussion on the possibility of selling a 3.09 acre lot in the industrial park to Mini-Biff.
■ The lot in question has a gas pipeline crossing it diagonally, and is mostly a hill.
■ Business is considering a 4,800 sf building with offices for 4 or 5 employees.
■ There would also be 7-8 truck drivers as well plus seasonal help.
■ Projected property taxes would be about $10,000 annually.
M/S/P: Cannon, Block to authorize sale of the 3.09 acre lot to Mini-Biff for $92,700, contingent upon a fence being
built around the porta-potties and the parking lot being paved. Passed unanimously.
Staff will follow up with the business to determine if they wish to proceed with acquisition of the lot.
X. Grant & Loan Program Applications
Sign & Awning Grant Program
Farm Bureau Services — Ryan Elbert (George Quast, applicant
149 Main Street South
M/S/P: Czmowski, Cannon to approve the grant request. Passed unanimously.
XI. Other Business — none
XII. Set Next Meeting — 11:30 AM Wednesday, December 281h, 2016.
XIII. Adjourn
M/S/P: Stearns, Christensen to adjourn the meeting at 12:43 PM. Passed unanimously.
Respectfully Submitted,
Miles R. Seppelt
Economic Development Director
$1,000