EDA SPECIAL MEETING MINUTES – February 9, 2015

Date: 
February 9, 2015

CITY OF SAINT PETER, MINNESOTA
Economic Development Authority
SPECIAL MEETING MINUTES – February 9, 2015
Saint Peter Community Center – Governors Room

Call to Order

The special meeting of the Saint Peter Economic Development Authority was called to order by Vice President Marilyn Rundell at approximately 5:30 p.m. Community Development Director noted that the notice of the meeting was posted at City Hall as per the requirements of Statute.  Roll call was taken with Rundell, John Kvamme, Chuck Zieman, James Dunn, Jay Hansen and Cory Abels in attendance. President Bob Southworth was unavailable to meet in special session due to previous obligation.  Community Development Director Russ Wille was also in attendance. 

Approval of Agenda

A motion was made by Hansen, seconded by Dunn to approve the agenda.   All voting in favor of the agenda, the motion carried.

New Business

Community Development Director indicated that he has drafted a proposed lease of 5,000 square feet of the 430 Ritt Street building to Quality Products, LLC (MRCI) who had previously occupied the building subject to a lease executed April, 2014. 

At this time, following their relocation to the former ROLCO property in Kasota, Quality Products has determined that they are in need of additional storage space.  Quality Products would use the Ritt Street facility as a shipping and storage site.

The new lease would establish a lease rate of $3.60 / square foot / year.  The rental rate would be $1,500 per month.

Given that the structure has been vacant since September, 2014, the temperature inside the building has been maintained at 50◦F.  Quality Products has indicated that they could operate their storage and shipping at that minimum temperature.

If the lease is approved, Quality Products would be obligated to reimburse the EDA for 20% of the monthly electric, water, sewer and natural gas billings.  That amount is a pro rata share of the portion of the building that they intend to occupy.

The proposed lease is a month-to-month lease.  Either party can terminate the lease following 30 days notice to the other party.  The EDA would intend to continue to offer the building for sale and would provide notice to vacate if a potential buyer is identified.

Jay Hansen inquired if the Community Development Director knows how long Quality Products would intend to lease the 5,000 square feet.  Wille noted that neither he nor MRCI know for sure how long the site will be needed.  The uncertainty necessitated a month-to-month lease.

EDA member Zieman asked if the tenancy of the structure would hinder opportunities to market and sell the property.  Wille noted that the short term nature of the lease wouldn’t be expected to curtail sales opportunities. 

Kvamme noted that Quality Products would seek to maintain an internal temperature of at least 50◦F which would work well during the winter months.  Kvamme questioned what would Quality Products expect to maintain as a temperature during the summer months? 

Community Development Director Wille acknowledged that the lease did not contemplate the “cooling” of the building during the summer months.  Wille suggested approval of the lease as it is currently written to allow Quality Products to move forward with the proposed tenancy.  Wille would negotiate an amendment to the lease which would address the need to cool the building during warmer weather.  If an agreement cannot be negotiated, Quality Products would be given 30 days notice to vacate the structure.

Zieman suggested that the Community Development Director contact Chippewa Packaging to inquire as to their desire to partially lease space at 430 Ritt Street.  Wille suggested that he had been reluctant to enter in to a lease with Chippewa given the company’s existing municipal debt and loan payment delinquencies.  Zieman and others cited the improved financial condition of the company identified the financial reports submitted to the EDA.  Wille said he will contact Mike Steele at Chippewa and ask about future storage needs.

A motion was made by Hansen, seconded by Dunn to introduce RESOLUTION No. 15-,02 “Resolution Recommending That The  City Council Authorize The President Of The EDA To Execute A Month-To-Month Lease By And Between The Saint Peter Economic Development Authority And Quality Products, LLC”.   With no further discussion, all voted in favor, the Resolution was passed and adopted.

Wille noted that the City Council will consider the lease at their meeting later this evening.

With no further business to conduct Hansen moved to adjourn.  The motion was seconded by Dunn.  The motion was approved and the meeting was adjourned at approximately 5:50 p.m.