EDA - September 6, 2017

Date: 
September 6, 2017

 

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

 

Call to Order

The meeting was called to order at 12:02 p.m. by President Bob Southworth. 

EDA members Southworth, James Dunn, John Kvamme, Jerry Pfeifer, and Marilyn Rundell were in attendance.  Members Cory Abels and Jay Hansen were unable to attend as scheduled.  Community Development Director Russ Wille and Administrative Secretary Cindy Moulton were in attendance.  Visitor Tamika Bertram, (Azure Skye, LLC) was also present.

Approval of Agenda

Motion by Pfeifer, 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 Dunn to approve the minutes of the July 6, 2017 meeting as prepared and presented.  All voting in favor the motion was carried and the minutes were approved.

Revolving Loan Segregation

The Minnesota Department of Employment and Economic Development (DEED) has been working with Minnesota communities and economic development authorities to ensure that the loan dollars are being utilized according to the applicable state and federal rules.

Wille reported that the current revolving loan fund guidelines meet the State guidelines.  He indicated that the reuse of Federal funds was regulated by rules adopted by the Department of Housing and Urban Development (HUD). 

He stated that the initial information provided by DEED did not identify any Federal dollars within the Saint Peter revolving loan funds.  Willie said that the City received CDBG funds in the 1990’s for a mall project which never developed.  Wille indicated that he is waiting for confirmation from DEED that the CDBG funds have been released from the Federal requirements and that the money can be borrowed under the current revolving loan guidelines adopted by the City Council.

Revolving loan funds determined to be from a “local” source can be used to accomplish any of the EDA activities authorized by State Statute.  These local funds would have the greatest flexibility for reuse and relending.

DEED has identified that $235,000 of our revolving loan funds were provided by the (MIF) Minnesota Investment Fund program and are considered to be State funds.  These funds must be administered and borrowed in conformance with the guidelines recently adopted by the Council.

Wille stated that if the City of Saint Peter would return 20% of its MIF funds, (plus interest) to DEED, the remaining 80% of the funds could be used for any “lawful purpose”.  Wille added that if that were the case, and it is determined that the Federal regulations are not applicable, the entire revolving loan fund(s) of the City of Saint Peter would be unencumbered by the DEED or HUD regulations.  If the City wished to return the 20%, a decision would need to be made by June 30, 2018.

The City Administrator and Finance Director will consider the matter along with the Community Development Director.  The three of them will make a recommendation to the EDA and City Council at a later date.

Azure Skye, LLC (HPC/ADA Revolving Loan Application)

Tami Bertram (aka Tamika Bertram), Chief Manager and sole owner of Azure Skye, LLC, purchased 301 & 303 South Minnesota Avenue in 2016.  Azure Skye, LLC has submitted a CBD/Accessibility Enhancement Loan application in the amount of $25,000 in order to partially finance the exterior repair of the building and roof at 301 South Minnesota.

Wille stated the cost to complete the roster of repairs for 301 South Minnesota has been quoted at $41,828.20 by R. Henry Construction, Inc. of Mankato.  If the $25,000 revolving loan is approved, Ms. Bertram would be responsible for the remaining balance.

The Heritage Preservation Commission has reviewed and considered the exterior alterations to the structure.  They have provided the necessary approvals to undertake the work.

Upon approval, the loan guidelines would provide for a 0% interest loan repaid over the next 10 years.  The loan would have a $5,000 principle forgiveness provision pending a qualifying repayment history.

Pfeifer reiterated his feelings of a 0% interest rate and partial loan forgiveness.  He noted that he intended to bring up this topic at an upcoming City Council workshop.

The loan would be secured by a subordinate mortgage recorded against the 301 and 303 South Minnesota Avenue real estate owned by Azure Skye, LLC.  The loan shall also be secured by a personal guarantee from Tami M. Bertram (aka Tamika M. Bertram). 

Dunn made a motion to amend the resolution with the addition of condition # (5) “The real estate shall be insured for its full replacement cost and the EDA shall be designated as a loss payee of the insurance policy.”  Rundell seconded the motion.

A motion was made by Dunn, seconded by Rundell to introduce Resolution No. 2017-05 entitled, “A Resolution Recommending Approval Of A $25,000 Central Business District/Accessibility Enhancement Revolving Loan To Azure Skye, LLC To Partially Finance The Repair And Renovation To 301 South Minnesota Avenue” as amended.  With all members voting aye, the Resolution was approved as amended.

Reports

Lodging Study – The City has received the second phase of the Lodging Study.  Wille and City Administrator Todd Prafke will review the information and meet with Brenda Patek, Patek Hospitality Consultants, to discuss the results.

Speculative Homes – The City has yet to sell any of their spec homes in Traverse Green Subdivision. The homes continue to be marketed.  Wille plans to meet with Pam Schreier and Ali Joens from SWMHP to discuss additional marketing strategies.  SWMHP has sold 2 of 3 spec homes and is currently constructing 3 additional homes. 

Carol Hayes – Carol Hayes has paid her revolving loan in full.

Event Center – The event center is scheduled to host their first event on September 23, 2017.

Carnegie Library – A renovation is planned for the Carnegie Library.

Adjournment 

With no further business, a motion was made by Pfeifer, seconded by Dunn to adjourn.  All voting in favor, the meeting adjourned at 12:41.