EDA MINUTES- SEPTEMBER 24, 2015

Date: 
September 24, 2015

 

CITY OF SAINT PETER, MINNESOTA

Economic Development Authority

REGULAR MEETING MINUTES – September 24, 2015

Saint Peter Community Center – Saint Peter Room

Call to Order:

The regular September 24, 2015 meeting of the Saint Peter Economic Development Authority (EDA) was called to order at 12:03 p.m. by President Bob Southworth.

EDA members Southworth, Cory Abels, Jay Hansen, Chuck Zieman, and John Kvamme in attendance, members James Dunn and Marilyn Rundell absent. Community Development Director Russ Wille and Administrative Secretary Cindy Moulton was also in attendance.

Agenda:

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

Minutes:

Motion by Zieman, seconded by Abels to approve the minutes of the August 27, 2015 meeting of the EDA as prepared and presented.  All voted in favor, the motion carried.

Revolving Loan Fund Guidelines

Wille reviewed the proposed amendments to the Revolving Loan Guidelines.  He stated that the City Council reviewed the changes recommended by the EDA.  Wille indicated that the City Council asked the EDA to reconsider the recommendation to amend the Façade Renovation loan program. 

The EDA also recommended to the City Council to eliminate the Façade Renovation Revolving Loans due to the policy’s lack of required business and personal financial disclosure.  They also recommended to roll the Façade Renovation Loans into the regular revolving loan policies.  If rolled in, the applicant would be required to submit detailed financial information to allow the EDA to determine the creditworthiness of the borrower.

Discussion followed. 

Hansen agreed with merging the loans.  He felt the maximum amount for façade improvements should be raised to $25,000 and financials should be obtained.  He mentioned that the EDA is borrowing the public’s money.

Southworth agreed.  He said that all applicants should be treated the same.

Abels concurred.  He said that financials should be reviewed by a committee and kept private. After reviewing, the recommendation should be brought to the EDA to take action. 

Zieman said that if financials are required, the applicant may not follow through with the project, or will obtain financing somewhere else. 

Southworth stated that he would like to see the projects take place, as it would enhance the downtown.

Kvamme asked if financials are not required, if it is possible to assess the property if the applicant does not make payments and has not furnished a personal guarantee. Wille stated he would research the idea.

Members were in agreement that Revolving Loan Funds should be available to applicants to enable them to make improvements and become ADA compliant.

Hansen asked what the purpose was of voting on a loan if the financials are not reviewed.  He stated that if the financials are reviewed and they meet the City objectives, the loan would be approved.

Zieman indicated that he did not want to discourage applicants. 

Abels commented that the applicants that are scared away, are usually those that wouldn’t necessarily qualify.      

Wille did not think that requiring financials would hinder the applicant.

Kvamme reviewed the current Façade Renovation Guidelines.  He said the maximum loan amount is $10,000 with a 50% contribution, paid over 5 years at 0% interest.  He said that if the EDA raised the loan amount to 75% of the project, the Façade Renovation Loan could be kept separate from the Revolving Loans.

Wille reiterated that loans under $10,000 do not require the financials of the applicant.

Southworth recommended financing 95% of a Façade Loan.

Hansen stated the guidelines would need to be rewritten.

Kvamme said that not many business/building owners are utilizing this type of loan.

It was agreed to raise the Façade Renovation Loans to $25,000, finance 90% of the project, require financials, and include ADA improvements into the Façade Loan.

Schettler Repayment Agreement Extension

Wille stated that in August, 2013, Greg and Neysa Schettler accepted the City’s offer to extend the repayment of their debt to the City.  The Schettler’s abided by the terms of the Agreement and made interest free, monthly payments of $50.  The Loan Extension Agreement began September 1, 2013 and expired on August 1, 2015. The Agreement states that after two years, the Loan Extension Agreement is to be reviewed.

Wille said that he discussed the repayment plan with Schettler via phone.  Schettler asked that the Agreement be extended an additional twenty-four months. He said that he would be able to increase the monthly payments to $100.

Wille recommended the Loan Extension Agreement be extended by an additional twenty-four months and that the monthly repayment be increased to $100.

Discussion followed. 

Zieman commented that if the monthly payments were increased to $150, the loan would be paid off in twenty-eight (28) years.  Zieman added that the City should encourage Schettler’s to pay more or to tack interest onto the loan.

Although Dunn agreed with Zieman, he asked at what point does the City want to raise the payment before Schettler files bankruptcy?

Hansen added that Schettler could have walked away from the loan two years ago but wanted to make things right.

A motion was made by Hansen, seconded by Abel to introduce Resolution No. 2015- 11, “Resolution Extending The Terms And Conditions Of The Loan Extension Agreement Previously Provided To Greg & Neysa Schettler And Reaffirming Terms Of Repayment”.  Members Hansen, Southworth, Kvamme and Abels voting aye, Member Zieman voting nay, the Resolution was passed and adopted.

Reports:

O’ Reilly Auto Parts: They have closed on the property and have submitted their building permit application.

Adjourn:

With no further business before the EDA, a motion was made by Abels, seconded by Zieman to adjourn.  The meeting adjourned at 12:35 p.m.