2014 EDA MINUTES

Date: 
March 27, 2014

   

CITY OF SAINT PETER, MINNESOTA

Economic Development Authority

REGULAR MEETING MINUTES – March 27, 2014

Saint Peter Community Center – Traverse des Sioux Room

 

Call to Order

 The meeting was called to order at 12:00 p.m. by President Bob Southworth.  Roll call was taken and it was determined that all members of the EDA were present.  Community Development Director Russ Wille, Brad DeVos, Casey West and Jessica Bies were also present.

 Oath of Office

 Cory Ablels has been appointed to the EDA by the Mayor and City Council.  Mr. Ablels will assume the Board seat recently vacated by Mike Favre.  Mr. Ablels recited and signed the appropriate Oath of Office which will be maintained on file.

 Approval of Agenda

 A motion was made by Rundell and seconded by Dunn to approve the meeting agenda as presented.  With no further discussion, all voted in favor, motion carried.

 Approval of Minutes

 Motion was made by Kvamme to approve the minutes of the February 27, 2014 meeting of the EDA as prepared and presented.  The motion was seconded by Hansen.  With no noted corrections, all voted in favor, motion carried.

 Motion was made by Zieman to approve the minutes of the special EDA meeting held March 20, 2014.  The motion was seconded by Dunn.  With no further discussion, all voted in favor, motion carried.

 Saint Peter Community Childcare Center

 The Community Development Director noted that a balloon payment is due from the Saint Peter Community Childcare Center (SPCCC) to repay their revolving loan to the EDA.  The Board of Directors of the SPCCC has requested that the balloon payment date be extended.

 A $35,000 loan was provided to the SPCCC in December, 2007 when the center opened in the former Saint Peter Community Hospital.  Recognizing the need for daycare services in town, the repayment of the note was established at $200 per month.  The note was secured by a UCC filing against the fixtures, furnishings and equipment of the SPCCC.

 The note was to be repaid in full on February, 2012.  At that time, the scheduled balloon payment of the note was extended to February, 2013.  At that time, the payment was once again delayed until due on April 1, 2014.

 The Director noted that the SPCCC has made every loan payment as due and when due.  While they are delinquent on the financial obligations due to others, they have had no delinquencies with the EDA.’

 Kvamme questioned the enrollment levels maintained by the SPCCC.  DeVos noted that enrollment is at its highest rate ever.  They would like to add a few more children to bring them up to the capacity of 74 enrollees.

 Zieman questioned that if there is a continued need for day care slots, why isn’t the SPCCC filled to capacity.  DeVos and West noted that they have attempted to raise awareness of the SPCCC and its vacancies.  The SPCCC participated in the St. Patrick’s Day parade and have held fundraisers in an attempt to raise their local profile.

 Both DeVos and West suggested that enrollment is hampered by operating out of two locations.  Parents are remiss to want to make two drop offs before work if their children are not to be located at the same day care facility.  Combining into a single site, while unrealistic at this time, would be expected to enhance enrollments.

 Southworth noted that the meal supplier (Gustavus Adolphus College) would not provide the appropriate documentation of the meals which would allow participation in the federal meals program.  DeVos noted that GAC’s denial is not associated with SPCCC’s delinquent meal account but rather a matter of GAC policy.  They do not provide the documentation for any of the meals served.

 With no further disussion, Zieman moved the RESOLUTION RECOMMENDING THE EXTENSION OF A BALLOON PAYMENT OF A REVOLVING LOAN PREVIOUSLY PROVIDED TO THE SAINT PETER COMMUNITY CHILDCARE CENTER.  The motion was seconded by Rundell.  Hansen noted that he must abstain from the vote due to the involvement of his employer as primary project lender.  All other members of the EDA voted in favor of the motion.  Motion carried.

 With no further business to conduct, Zieman moved to adjourn.  The motion was seconded by Dunn.  All voted in favor, motion carried.  The meeting was adjourned at approximately 12:50 p.m.

CITY OF SAINT PETER, MINNESOTA

Economic Development Authority

REGULAR MEETING MINUTES – February 27, 2014

Saint Peter Community Center – Traverse des Sioux Room

 

Call to Order

 The meeting of the Saint Peter Economic Development Authority was called to order by President Bob Southworth at approximately 12:04p.m.  Roll call was taken with Southworth, Marilyn Rundell, John Kvamme, Chuck Zieman, and James Dunn in attendance. Member Corey Abels was absent.  City staff present was Community Development Director Russ Wille and Administrative Secretary Cindy Moulton.  Guest present was Paul Tanis representing Tanis Brothers, LLC.

 Approval of Agenda

 A motion was made by Rundell, seconded by Zieman to approve the agenda.   All voting in favor of the agenda, the motion carried.

 Approval of Minutes

 A motion was made by Zieman seconded by Rundell to approve the minutes of the January 23, 2014 EDA meeting.  With all voting aye, the motion carried.

 Tanis Brothers – Revolving Loan Request

 Wille reviewed the project.  He stated that the Tanis Brothers, LLC purchased the commercial property located at 309 South Minnesota Avenue for $90,000.  The bottom portion of the building is leased by Comfort Systems and the second floor property has been vacant since the 1998 tornado. 

 Tanis Brothers, LLC would like to renovate the second floor to create two apartments that will be offered for lease.  The creation of the new units will generate additional cash flow once occupied.  To make the space habitable, a significant construction project is required. 

 Tanis Brothers, LLC submitted a Revolving Loan Fund Application for partial EDA financing of the improvements Wille stated that during the interim period, final quotes from local contractors to complete the renovations were obtained.

 The original purchase financing included a $70,000 loan from Nicollet County Bank and $20,000 in cash provided by the Tanis Brothers, LLC at closing.  The applicant has requested that the original $20,000 be considered as the applicant’s equity contribution towards the project.

 Wille proposed that the loan be secured through the acquisition of a second mortgage against the 309 South Minnesota property.  NCB holds the first mortgage associated with the December, 2012 purchase of the property.  NCB is also being asked to provide a new loan of $60,000 to match the funds requested from the EDA.  The total NCB financing would be $130,000 and would be secured by a first mortgage on the property.

 An appraisal of the property and proposed construction has recently been completed by Appraisal Services out of Mankato.  The current appraised value is $105,000 and the appraised value after the renovation of the property will increase by $150,000 to $255,000.

 Discussion took place.  Zieman expressed his concerns based on the guidelines.  He indicated that Nicollet County records suggest that the building was purchased for $85,000 and not the $90,000 indicated in the prepared agenda.

 Paul Tanis, representing Tanis Brothers, LLC noted that the $90,000 acquisition price would include closing costs and other buyer expenses.  He was of the opinion that an additional $5,000 in expenditures by Tanis Brothers could easily be documented.

 Kvamme stated that if you stick to the guidelines an additional $7,000 would be needed from the applicant to meet the 10% owner equity suggested in the Revolving Loan guidelines of the EDA.

 Tanis stated that they were delayed for a year because the appraisal had been delayed and not otherwise available until recently.  Tanis said that Tanis Brothers, LLC has already put a significant amount of their own money in the project with gutting the upstairs and the cost of the dumpsters. He asked if the would count towards the extra equity requirements.  Tanis felt that this project was good for the downtown and tax base.

 A motion was made by Rundell, seconded by Dunn, to introduce Resolution No. 2014-02 entitled, “A Resolution Recommending The Approval Of A $60,000 Revolving Loan To Tanis Brothers, LLC To Partially Finance The Renovation And Rehabilitation Of A Commerical Structure Located At 309 South Minnesota Avenue” with the additional stipulation that the Community Development review the Tanis Brothers project expenses to ensure that the owner is contributing the required 10% equity in the project. Members Southworth, Dunn, Zieman, Favre, Kvamme and Rundell voting aye, Member Hansen abstaining.  The Resolution was passed and adopted. 

 REPORTS

 430 Ritt Street Negotiations – Wille reported that he will be meeting with a potential buyer on Friday to draw up a draft copy of a contract.

 430 Ritt Street  -Wille reported on the 430 Ritt Street building.  He stated that there was a gas leak at 430 Ritt Street (a regulator which may cost approximately $250 plus labor).  He also stated there was a frozen water service and a small roof leak.

 Don’s Applicance -  As of present, the Orth’s will not be seeking Revolving Loan Funds and will alternatively finance their project utilizing internal resources.

 SPCCC – Wille announced that the next EDA meeting will include a request from the St. Peter Community Childcare Center to extend their Revolving Loan.  He stated that they have made progress with their financial obligations.

 GMG – Economic Development SummitEconomic Development Summit – An Economic Development Summit will be held on April 29 & 30th at the Verizon Center.  There will be someone from the Federal Reserve as a speaker.  Any EDA members interested in attending should contact Wille who will arrange for payment of attendee registration.

 Rural Economic Development Alliance (REDA):  Kvamme joined the REDA staff as they visited with representatives of the City of Waseca and the Waseca Chamber of Commerce.  Waseca has made preliminary overtures to seek a REDA membership.  While the REDA board voted to maintain the current membership within Blue Earth and Nicollet Counties, they will seek opportuntities to partner with Waseca where appropriate.

 Gatzke House – The bids for the Gatzke home initially closed on January 31, 201.  The bid was initially $5,500 but the bidder backed out.  He was from Canada and did not understand the process The bidding reopened and will close February 28th.

 Bike Trail – The DNR has taken over the project and the local units of government will assist as requested, necessary and appropriate.

 Adjournment

A motion was made by Hansen, seconded by Zieman to adjourn.  All in favor of the motion, the meeting adjourned at 12:53 p.m.

 

 

 

 

CITY OF SAINT PETER, MINNESOTA

Economic Development Authority

REGULAR MEETING MINUTES – January 23, 2014

Saint Peter Community Center – Traverse des Sioux Room

 Call to Order

 The meeting of the Saint Peter Economic Development Authority was called to order by President Thorstensson at approximately 12:02p.m.  Roll call was taken with Bob Southworth, Marilyn Rundell, John Kvamme, and Ken Eichmann in attendance. Members James Dunn, Jay Hansen, and Mike Favre were absent.  City staff present was Community Development Director Russ Wille, Administrative Secretary Cindy Moulton, and City Attorney Jim Brandt.  Guests present were Jerry Pfeifer and Chuck Zieman.

 Approval of Agenda

 A motion was made by Rundell, seconded by Zieman to approve the agenda with the addition of A.  River Valley Birth Center Collateralization.  All voting in favor of the agenda as amended, the motion carried.

 Approval of Minutes

 A motion was made by Kvamme, seconded by Favre to approve the minutes of the December , 2013 EDA meeting.  With all voting aye, the motion carried.

 Election of Officers

 A motion was made by Zieman, seconded by Kvamme to nominate Southworth as President.  Rundell moved that nominations close, seconded by Kvamme.  All members voting aye, the motion carried.  A motion was made by Kvamme, seconded by Zieman to nominate Rundell as Vice President.  All members voting aye, the motion carried.  Wille explained that the Treasurer position is held by the City Finance Director and the Secretary by the City Community Development Director.   A motion was made by Southworth, seconded by Rundell to appoint the City Finance Director as Treasurer.   All members voting aye, the motion carried.  A motion was made by Kvamme, seconded by Zieman to appoint the City Administrator as Executive Secretary.  All members voting aye, the motion carried.

 Beaudry Creative., Inc (Envision) – Balloon Extension Request

 Beaudry Creative (Envision) Inc. received a $50,000 revolving loan in 2007 to partially finance the acquisition of Envision, Design that Works business, equipment, furnishings and client roster.

 On February 1, 2012 the note was to be paid in full via balloon payment.  Beaudry made a request to the EDA to extend the balloon payment for 2 years.  The EDA recommended, and the City Council granted a 24 month extension of the balloon date of February 1, 2014.  The balance due at that time is $18,149.46.

 Beaudry has again requested the City grant her a second 24 month extension on her scheduled balloon payment.  Payment of the above stated balance, at this time, would create a cash flow hardship.  Beaudry has sought additional bank financing to allow for repayment of the EDA loan but Hometown Bank, the primary lender, has provided correspondence indicating they are unable to extend additional credit or otherwise refinance their debt at this time.

 Wille recommended that that the EDA recommend to the City Council to extend the loan an additional 24 months, with a balloon payment due February 1, 2016.  He also recommended that all other terms, conditions and security of the loan remain unchanged.

 Wille indicated that the loan history has been impeccable.  EDA members discussed the possibility of lowering the interest rate.  Zieman stated that if the EDA was not comfortable with lowering the rate, he would introduce the suggestion at the City Council level.  

 A motion was made by Kvamme, seconded by Rundell, to introduce Resolution No. 2014-01 entitled, “A Resolution Recommending Modification Of Loan Terms For A Revolving Loan Previously Provided To Beaudry Creative, Inc. (Envision, Design That Works).  Members Zieman, Favre, Kvamme and Rundell voting aye, Member Southworth abstaining.  The Resolution was passed and adopted. 

 River Valley Birth Center Collateralization  

 Wille reported that SBA committed to Pioneer Bank as long as the SBA receives the first Mortgage on the Birthing Center and first UCC on the fixtures, furnishing, and equipment.

 Wille contacted the SBA and requested that the SBA take a second position on the UCC and allow the City the first.  The SBA informed Wille they put together the Patriot Act program which expired on December 31, 2013.  They indicated that they would honor all previous commitments.

 REPORTS

 St. Peter Community Childcare Center

The childcare revolving loan balloons in April 2014.  Wille stated their financial situation is improving.  He stated that the EDA will be asked to extend their balloon payment 12 or 24 months at their April meeting.

 430 Ritt Street

The EDA directed Wille to list the building for sale.  Wille stated that the City Council was the only one that can enter into a listing agreement.  The City Council discussed the listing at workshop and encouraged staff to negotiate either a lease or sale of the building to an alternative party that has expressed an interest in the property.

 Zieman said he would like the City out of ownership and felt the City would be better off selling the building for $7 - $800,000.

 The EDA instructed Wille to meet with EDA member Favre to determine the break even point of a potential sale.

 Don’s Appliance

Orth’s are obtaining quotes for the remodel/renovation of the former Volk Electric building.  They plan to do a substantial renovation that includes windows on the east portion of the building.

 Building Permit Activity (2011 – 2013)

Wille indicated that these statistics are included in the Comprehensive Plan.

 Welco West - Redevelopment

Wille stated that a Development Agreement was provided to Drummer Development.  The City Council will act on the Agreement at their February 10, 2014 meeting.  Drummer will be required to obtain all of the building permits for the property be December 31, 2016.

 Building Permit (2013)

Commercial projects $12,493,662 (included remodels & new); Residential – 20 new homes total $3,702,000

 Adjournment

A motion was made by Rundell, seconded by Zieman to adjourn.  All in favor of the motion, the meeting adjourned at 12:58 p.m.