EDA MEETING MINUTES JANUARY 28, 2016

Date: 
January 6, 2016

 

CITY OF SAINT PETER, MINNESOTA
ECONOMIC DEVELOPMENT AUTHORITY

REGULAR MEETING MINUTES – JANUARY 6, 2016
SAINT PETER COMMUNITY CENTER - GOVERNORS ROOM

 

Call to Order:
A Special meeting of the Saint Peter Economic Development Authority (EDA) was called to order at 12:02 p.m. by President Bob Southworth.

EDA members Southworth, Cory Abels, Chuck Zieman, James Dunn, Jay Hansen and John Kvamme in attendance, member Marilyn Rundell was absent. Community Development Director Russ Wille and Administrative Secretary Cindy Moulton were also in attendance.  Visitor present was Gary Miller from Nicollet County Bank.

Agenda:
Motion by Abels, seconded by Dunn to approve the meeting agenda as prepared.  All voted in favor of the motion.  The motion carried.

Minutes:
Motion by Abels, seconded by Zieman to approve the minutes of the October 22, 2015 meeting of the EDA as prepared and presented.  All voted in favor, the motion carried.

Hey Diddle Diddle Daycare, LLC (Heidi Scheurer) RLF Application Review

Heidi Scheurer is interested in expanding her daycare business from her home to a leased space at River of Life Lutheran Church, 830 Sunrise Drive.  Ms. Scheurer has submitted a revolving loan fund application request in the amount of $42,400 to partially finance the remodeling of the structure and to provide for the purchase of life/safety equipment.

Wille explained that Nicollet County Bank has approved a $53,000 loan towards the project and Ms. Scheurer has demonstrated that she has access to $10,800 to contribute to the planned project.  Wille added that Ms. Scheurer needs a total of $106,200 in order to start up the daycare center.

Ms. Scheurer is seeking to open the daycare April 1, 2016.  The daycare will be licensed for 41 children.  At this time, Ms. Scheurer has a commitment to provide daycare for 20 children and has approximately 3 ½ months to find additional children.  Wille stated that the SBDC cash flow projections suggest that 30 enrollments will be necessary to establish a “break even” monthly cash flow.  Ms. Scheurer is confident that she will have at least 30 children enrolled when the operation begins.

Wille explained that a subcommittee consisting of Abels, Southworth and himself reviewed Ms. Scheurer’s personal financial documents and recent tax returns filed by the applicant and her spouse.  Following the review the subcommittee discussed the collateralization for the proposed $42,400 note.

Wille indicated that because Hey Diddle Diddle Daycare will lease space, there is no associated mortgage to secure the note.  Nicollet County Bank has indicated they will file a UCC Statement obtaining a first security position on the equipment, inventory, accounts receivable and general intangibles of Hey Diddle Diddle Daycare, LLC.  The subcommittee suggests the note be secured by obtaining a second security position against the equipment, inventory, accounts receivable and general intangibles of the daycare center.  They also recommend the EDA be provided a subordinate mortgage position on the equity in the Scheurer residence located at 1103 West Traverse Road.  In addition, Ms. Scheurer said that she and her husband would consent to the requested collateralization by the EDA.

Gary Miller of Nicollet County bank has been working with Ms. Scheurer on her financing.  He commented on the EDA’s requirements to secure the revolving loan.  He asked if the requirements were consistent with past loans awarded.  Southworth said they were consistent.

Wille said the subcommittee recommends the approval of the $42,400, amortized over a straight five year period with no balloon payment and bear an interest at the Wall Street Journal Prime Rate of 3.5%.  Monthly payments of $771.33 would be established in order for the note to be successfully retired after five years.   

Zieman asked why it was a straight five year amortization without a balloon payment.  Wille said that was the request made by Ms. Scheurer.

A motion was made by Abels, seconded by Kvamme to introduce Resolution No. 2016-01 entitled, “A Resolution Recommending Approval Of A $42,400 Revolving Loan To Hey Diddle Diddle Daycare, LLC To Partially Finance The Furnishing Of A Daycare Center And The Renovation Of The Structure At 830 Sunrise Drive”.    Members Kvamme, Dunn, Southworth, Zieman, and Abels voting aye, Member Hansen abstaining, the Resolution was passed and adopted.

Reports:

Commercial Baker – RLF Application:  Wille said he is waiting for a revolving loan application from an intersted commercial baker.

Revolving Loan Fund Policies Amendment:  The Revolving Loan Fund Policy Amendments will be on the agenda of January 28, 2016 EDA meeting.

Municipal Parking Lot #5: There are 3 to 4 potential developers interested in Parking Lot #5.  The individual developers will meeting with City Administrator and Wille.

Community Core Partners – Heritage Preservation Revolving Loan:  The window replacement is nearing completion.

Building Better Neigborhoods: The City Council has directed staff to begin residential development policies, plans, purchase, annexation, etc. for the proposed housing development.  As part of the project, the City will be soliciting a private developer for 12 acres adjacent to the City development.

Broadway Streetscape:  The City is exploring the opportunity to undertake a streetscape improvement to Broadway between Minnesota Avenue and Front Street.  Wille explained there maybe grant funds available to help with costs.

Willys Bar has been leased for one year to Matthew Carney dba MC Hammer’s LLC.  Carney will have an option to buy the property after one year.

Adjourn:
With no further business before the EDA, a motion was made by Abels, seconded by Hansen to adjourn.  The meeting adjourned at 12:32 p.m.