Economic Development Authority Meeting Minutes July 9, 2014

Date: 
July 9, 2014

CITY OF SAINT PETER, MINNESOTA
Economic Development Authority
SPECIAL MEETING MINUTES – JULY 9, 2014
Saint Peter Community Center – Governors Room

Call to Order

The meeting of the Saint Peter Economic Development Authority was called to order by President Bob Southworth at approximately 12:02p.m.  Roll call was taken with Southworth, James Dunn, Cory Abels ,Jay Hansen, and Marilyn Rundell, were present.  Chuck Zieman was absent.  City staff present was Community Development Director Russ Wille and Administrative Secretary Cindy Moulton.  Guests present were Dr. Carrie Stelter.

Approval of Agenda

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

The Fair Emporium – RLF Application

Keith and Carrie Stelter purchased 213 South Minnesota Avenue.  At the last EDA meeting a façade renovation loan of $5,000 was approved for the Stelters  which will be repaid in 5 years at 0% interest.  Stelters will contribute $4,566 towards the façade renovation.  Wille indicated that the Heritage Preservation Commission approved the improvements at their last meeting.

Stelters have fully prepared their business plan and are seeking additional funds to partially finance the renovation of the interior of the building purchase furnishings and secure an appropriate point-of-sale system.

Wille stated that Stelters purchased the building for $120,000 with a loan secured from the Nicollet County Bank.  The owners contributed $30,000 towards the purchase.

With the bank financing, façade monies and the owner contribution towards the project, an additional $23,198.15 is necessary to fully finance the business start-up.  The Stelters are asking to finance $20,000 through a revolving loan from the City and they would contribute the remaining $3,198.15.

To provide for acquisition of inventory, Nicollet County Bank has agreed to provide a $30,000 line of credit.  Funds would be drawn from this account as vendors need to be paid and then replenished as merchandise is sold.

Wille said that to collateralize the $25,000 EDA loan, he suggested that the City secure a mortgage on the 213 South Minnesota Avenue real estate.  The City’s mortgage would be subordinate to the first mortgage held by NCB.  He also suggested that the Stelter’s execute a personal guarantee of the note upon execution of the associated promissory note.

Stelters indicated they would like to be open by “Ladies Night Out”.

Wille recommended that the façade and revolving loan be combined.  The interest rate on the loan shall be fixed for the duration of the loan at 2.4 %, amortized on a ten-year repayment schedule with a balloon payment after five years.
  
A motion was made by Kvamme, seconded by Abels to introduce Resolution No. 2014-10 entitled, “Resolution Recommending That The City Council Approve a $25,000 Revolving Loan To Keith And Carrie Stelter To Partially  Finance The Renovation, Rehabilitation And Furnishing Of The Building Located At 213 South Minnesota Avenue”.  Abels, Southworth, Dunn, Kvamme, and Rundell  voting aye, Hansen abstaining, the Resolution was passed and adopted.

A motion was made by Zieman, seconded by Kvamme, to introduce Resolution No. 2014 – 11 , entitled “A Resolution Modifying The Terms Of A $250,000 Revolving To Mark & Geri Steele”  with the following changes; the interest rate be lowered to 4.5% and keep the loan payment the same to accelerate the debt, and to extend the balloon payment to two years”.  All members voting aye, the Resolution was passed and adopted.

REPORTS

Tour of Manufacturing – Southern Minnesota Showcase – Wille was going to contact Jaraff Industries and Alumacraft to see if they were interested in participating.  It would cost $400 per business to place a full page ad in the publication.  Wille indicated the EDA could pick up the $800 fee.

EI Microcircuits -  EI Microcircuits is signing a Purchase Agreement to purchase the land east of their facility.

Mowing -  Hansen asked whether the City mowed the Industrial Park.

Adjournment
A motion was made by Abels,  seconded by Dunn to adjourn.  All in favor of the motion, the meeting adjourned at 12:23 pm.