EDA - SEPTEMBER 1, 2016

Date: 
September 1, 2016

CITY OF SAINT PETER, MINNESOTA
Economic Development Authority
Special Meeting Minutes - September 1, 2016
St. Peter Community Center - Saint Peter Room

Call to Order:
The regular meeting of the Saint Peter Economic Development Authority (EDA) was called to order at 12:00 pm by member Jay Hansen.  EDA members Hansen, James Dunn, Jerry Pfeifer, and Cory Abels were in attendance.  Members Bob Southworth, Marilyn Rundell, and John Kvamme were absent. Community Development Director Wille and Administrative Secretary Cindy Moulton were also in attendance. Visitors present were David Bushaw, owner of 401 South Minnesota and Jesse Schott of Southwest Minnesota Housing Partnership.

Agenda:
A motion was made by Abels, seconded Dunn to approve the agenda as presented.  All members voting aye, the motion was approved.

Minutes:
Wille will provide the July 27, 2016 minutes at the next regular EDA meeting.

Traverse Green – Accept Spec House Bid
The EDA previously authorized the solicitation of bids for the construction of three spec homes within the Traverse Green Subdivision.  The bids were advertised as required.  Notification of the opportunity to bid was also mailed to those contractors that have obtained building permits in Saint Peter in the last 12 months. 

Three bids were publically opened and Schrom Contracting was determined to be the lowest bidder.  Wille along with SWMHP recommended to the EDA that Schrom Contracting of Eagle Lake Minnesota be awarded the bid in the amount of $444,937.  

Wille stated that the bid solicitation also asked for prices for a total of four bid alternates. The base bid for the construction of the three speculative homes came in $35,063 below the pre-bid estimates.    Wille said that there is the ability to include the four alternates at the increase price of $12,840 while remaining within the original pre-bid construction estimates.  Wille and SWMHP recommended the EDA award Schrom Contracting the total bid of $457,777.

A motion was made by Pfeifer, seconded by Abels to introduce Resolution No. 2016-08 entitled, “Resolution Awarding Bid For The Construction of Three Spec Homes Within Traverse Green Subdivision”.  With all members voting aye, the Resolution was passed and adopted.

Traverse Green – Authorize Execution of Construction Contract
The EDA has awarded the bid for construction of three homes in the Traverse Green Subdivision.  

Wille recommended to the EDA that they authorize the President and Executive Secretary of the EDA to sign construction contracts for the spec homes with Schrom Construction.

Abels asked if there were change orders, would they be brought to the EDA for approval.  Wille indicated they would.

A motion was made by Hansen, seconded by Pfeifer to introduce Resolution No. 2016-09 entitled, “A Resolution Authorizing The President And Executive Secretary Of The Economic Development  Authority To Enter into Contracts With Schrom Contracting For The Construction of Three Speculative homes Within Traverse Green Subdivision”.  All members voting aye, the Resolution was passed and adopted.

Traverse Green – Speculative Home Sales Prices
Wille said that sworn construction statements have been prepared for each spec home based upon the bids received August 29, 2016.  Wille said that utilizing the construction statements, soft cost analysis and project history, sales prices for the three homes could be established. 

Wille recommended the following sales prices for the spec homes in Traverse Green be approved:  2101 Lunden Street (lot 11, blk 2) $185,000, 2100 Nelson Street (lot 10, blk 2) $186,500, and 2022 Essler Drive (lot 14, blk 3) $194,000.

A motion was made by Abels, seconded by Dunn to introduce Resolution No. 2016-10 entitled, “A Resolution Establishing Sales Prices For Economic Development Authority Constructed Speculative Homes Within Traverse Green Subdivision”.  With all members voting aye, the Resolution was passed and adopted.

Bushaw Properties- Historic Preservation RLF Review
David and Tressa Bushaw have submitted a Historic Preservation Revolving Loan request in the amount of $20,00 to partially finance the repair and maintenance issues associated with their property at 401 South Minnesota.

Wille explained that Bushaw’s property has settled and that stormwater pools against the exterior foundation of the building. After rainfall events the water penetrates the foundation and seeps into the basement.  Wille explained that with Minnesota’s freeze/thaw cycle it has caused cracks and flaking to the base of the structure’s perimeter.

Bushaws would like to remove the existing parking surface and regrade the lot to provide proper drainage, and re-establish the concrete/asphalt parking.  They would also like to tuck point the west, east and north exterior brick walls of the structure.  Wille added that the Heritage Preservation Commission has authorized the painting of the rear of the building.

Wille stated that he has reviewed the financial performance of the property as well as the personal financial statements of David and Tressa Bushaw and found nothing that would prohibit them from obtaining a loan.  The review showed there is a high liklihood that the note would be honored and that cash flows are sufficient to absorb the additional monthly payments of $166.67 necessary to retire the debt.  Wille added that a promissory note would be secured by a subordinate mortgage. Wille said that Bushaws are eligible for a $20,000 revolving loan with an interest rate of 0%, amortized on a 10 year schedule and also $5,000 forgiveness once the loan is paid down to $5,000.

Hansen asked if the EDA required a Title Opinion or at what point is one required.  Abels stated that was not addressed in the policies but suggested they would be reviewed.

Abels questioned why the committee did not review Bushaws financials as they had reviewed others in the past.  Wille said the application needed to be expedited because of the elements.  Abels requested that the subcommittee meet with future RLF requests.

Reports

Broadway Streetscape – MNDOT and Bolton & Menk have completed the final plan for the Broadway Avenue Streetscape.  Wille informed the EDA that he has arranged a meeting with the property/business owners that will be affected by the project.

Shell Station – Nicollet County is pursuing tax forfeiture on the property located at 804 North Minnesota Avenue (Shell Station).

Chabeans, LLC closed on their loan and will begin repaying it October 1, 2016.

Revolving Loan Wille reported that the five businesses that received revolving loan funds prior to the amended guidelines may be submitting a written request to amend their loan agreement.

Adjournment
A motion was made by Abels, seconded by Dunn to adjourn the meeting.  All members voting aye, the meeting adjourned at 12:41 p.m.