EDA 12:00 Gov Rm

Date: 
July 6, 2017

 

CITY OF SAINT PETER, MINNESOTA
Economic Development Authority
SPECIAL MEETING MINUTES
July 6, 2017
Saint Peter Community Center – Saint Peter Room

 

Call to Order

The meeting was called to order at 12:00 p.m. by President Bob Southworth. 

EDA members Southworth, James Dunn, Cory Abels, John Kvamme, Jerry Pfeifer, and Jay Hansen were in attendance.  Member Marilyn Rundell was unable to attend as scheduled.  Community Development Director Russ Wille and Administrative Secretary Cindy Moulton were in attendance.  Visitor Dave Schooff (Building Good Communities, LLC) was also present.

Approval of Agenda

Motion by Abels, seconded by Dunn to approve the meeting agenda as prepared and presented.  With all voting in favor the motion was passed.

Approval of Minutes

Motion by Kvamme, seconded by Abels to approve the minutes of the March 23, 2017 meeting as prepared and presented.  All voting in favor the motion was carried and the minutes approved.

Building Good Communities (419 S MN Ave.)  Revolving Loan Application

Building Good Communities, LLC has applied for a Revolving Loan to partially finance the extension of a six inch water main and interior pipefitting for the installation of a fire suppression system for their building located at 419 South Minnesota (The Capitol Room-event center). 

Wille explained that in order for the structure to be used for a public assembly, a fire suppression or sprinkler system would need to be installed and operational.  He said the establishment of the sprinkler system would require a six inch waterline be extended to provide sufficient flow for the planned suppression system.  The waterline would be provided from Front Street within the east-west alley that bisects the block.

Wille noted that along with the waterline extension, sprinkler piping would also need to be installed within the interior the building.  He indicated that both projects would be eligible for the revolving loan program.

Wille stated that Alliance Contracting, Inc. quoted the cost for the waterline extension at $44,000 and the interior pipefitting $55,586.  The total project cost is identified to be $99,586.00.  He stated Building Good Communities, LLC is requesting the maximum allowed by the Revolving Loan Fund guidelines (40%). 

Wille stated that the Board of Zoning Appeals and Adjustments granted a Conditional Use Permit to allow for the operations of the building to be used as a public assembly (event center). The Conditional Use was approved with the following conditions: that the Building Official post each space within the building at the maximum occupancy load, that a loading/unloading zone be requested in front of the building and that the six spaces in the rear of the property be designated as handicap parking during events in the building.

Wille said that he and members Southworth, Hansen, and Abels reviewed the Schooffs’ and Fees’ financials and had no concerns.  They agreed the collateral was sufficient to cover the revolving loan request.   

Wille said that the Revolving Loan Guidelines suggests a twenty (20) year loan amortization with the note due via balloon payment after five (5) years.  Wille stated that should the loan be approved, the City would obtain a promissory note, personal guarantees from the Schooffs’ and Fees’, and a subordinate mortgage.

Pfeifer expressed his dissatisfaction with the position of the EDA mortgage. He also was concerned with the lower interest rate imposed by the EDA.

Hansen replied that the banks interest are very close to that imposed by the EDA.

Southworth felt that the ultimate goal of the EDA is to help cash flow a business.

Abels added that the structure is in good shape, the cash flow will be sufficient as well as the personal guarantees. 

Motion by Pfeifer, seconded by Abels to introduce Resolution No. 2017-04 entitled, “Resolution Recommending Approval Of A $39,834.00 Revolving Loan To Building Good Communities, LLC To Partially Finance The Installation Of A Fire Suppression System At 419 South Minnesota Avenue”.  All members voting aye, the Resolution was passed and adopted.

Reports

Speculative Homes (Traverse Green)Wille reported that SWMHP will be closing on their second spec home on July 13, 2017.  He added that they will be soliciting bids for six additional homes.  Three of those homes will be delayed construction. 

The City has yet to sell any of their three spec homes.  Wille indicated that the City will take possession of these homes once a Certificate of Occupancy is issued.

Lodging Study - Brenda Patek, Patek Hospitality Consultants Inc., will be conducting Phase 11 of the Lodging Study in the near future.

Greatermankatojobs.com/katoX – Wille stated that a demo was held and EDA members and local businesses were invited to attend.

Kaduce Properties – Wille said that the loan closing for Megan Willette of Kaduce Properties, LLC, will not take place until the project is completed.

Broadway Avenue Reconstruction – The reconstruction of Broadway Avenue started and July 5, 2017 and is scheduled to be completed by October 19, 2017.

Federal Government Request  - Wille stated that the Federal Government is requesting that the Revolving Loan Funds be segregated into Federal, State and Local monies.  The Federal money would be loaned under the Federal Guidelines, the State funds under our current Revolving Loan guidelines and the local money as determined.

Adjournment

With no further business, a motion was made by Abels, seconded by Dunn to adjourn.  All voted in favor and the meeting was adjourned at approximately 12:43 p.m.