2007 Economic Development Authority Minutes

CITY OF SAINT PETER, MINNESOTA
OFFICIAL PROCEEDINGS
MINUTES OF A REGULAR MEETING OF THE ECONOMIC DEVELOPMENT AUTHORITY
November 29, 2007

Pursuant to due call and notice thereof, a regular meeting of the Economic Development Authority (EDA) was called to order at 12:00 p.m. in the Governors Room of the Saint Peter Community Center on November 29, 2007.

Roll was taken with members Mike Favre, John Kvamme, Greg Seitzer, and Ken Eichmann in attendance.  Community Development Director Russ Wille was also present.  Members Paul Tanis and Sam Gault, Jr. were absent.

Approval of Agenda

Motion by Kvamme, seconded by Seitzer to approve the agenda as presented.  With all members voting in favor the motion was carried.

Approval of Minutes

Motion by Kvamme, seconded by Eichmann to approve the minutes of the November 9, 2007 special meeting of the EDA as presented.  All voting in favor, motion carried.

New Business

Saint Peter Childcare Center, Inc. – Revolving Loan Request

Wille stated that Saint Peter Community Childcare Center, Inc. (SPCCC) has submitted a revolving loan fund application in the amount of $35,000 to partially finance the acquisition and furnishings and supplies associated with the start-up of a new childcare center to be located at the former nursing home site.

Wille stated that there is a lack of available daycare in Saint Peter and that the service is vital to providing an available workforce for industrial and commercial expansion projects.  Wille stated that 40% of the market is denied care services due to the lack of licensed, in-home providers and/or daycare centers; and families are forced to seek daycare in the surrounding area.  Wille stated that City Administration and the City Council are of the opinion that the availability of workers can be enhanced by ensuring that child care is readily attainable in St. Peter.   

Wille stated that SPCCC is in the process of obtaining its 501(c) (3) status as a non-profit.  He stated that SPCCC has identified cost of opening a licensed daycare center to be $52,100.  He stated they have requested $35,000 from the EDA and are in the process of obtaining the balance of funds through loan or grant commitments and $1,000 in donations.   

Jim Stenson, Treasurer of SPCCC, gave an overview of the organization and the goals they would like to accomplish.  He stated that the SPCCC directors have met with officials from the county, school, GAC and the City and all are in agreement that the shortage of daycare needs to be addressed.

Calie Afdahl-Doble, President of SPCCC, explained the nature of the daycare and said that it would be structured somewhat like a preschool with planned curriculum.  She indicated that the daycare would provide care for children from 6 weeks old to kindergarten. Afdahl-Doble said she has taken names down of the parents that have contacted her interested in daycare.  She said that of those contacts, there are 35 children in need of daycare.  Afdahl-Doble said she intends to get in touch with those parents and find out whether or not they are still in need of daycare.  She indicated once the initial families have been contacted, families will be selected on a first come first serve basis as openings permit.  She stated that in order to secure a spot in the daycare, a registration fee would need to be paid.

Wille recommended approval of the $35,000 request.  He reviewed the terms of the loan; 0% interest; repayment shall be established at $100/month the first two years, $200 / month for years three, four, and five, the note be repaid in full via a balloon payment due after 5 years; terms and conditions of the City of Saint Peter financing may not be assigned without written consent of the Council; loan shall be secured by a lien recorded against all assets of the SPCCC, Inc.; loan shall be immediately due and payable should the applicant wholly or partially move operations to a location outside of the city limits; and the applicant shall prove that the $6,000 financing gap identified in the application be secured through the receipt of additional donations, grants, loans or other acceptable financing.  Kvamme asked if property insurance was going to be required.         

A motion was made by Favre, seconded by Eichmann, to introduce Resolution No. 2007 -12, entitled, “A Resolution Recommending Approval Of A $35,000 Revolving Loan To Saint Peter Community Childcare Center, Inc. To Partially Finance The Acquisition Of Equipment And Furnishings For The Business Start-Up”.  A motion was made by Favre, seconded by Eichmann to amend the Resolution by adding “9) The Saint Peter Community Childcare Center, Inc. shall obtain and maintain property, casualty, and liability insurances in an amount sufficient to secure its debt to the EDA and the policy shall list the City of Saint Peter”.  All members voting aye, the motion carried.  All members voting aye, the Resolution was passed and adopted.


MS & GS Enterprises, Inc. – Modification of Loan Terms

Wille stated that the $250,000 loan to MS & GS Enterprises, Inc. to partially finance the acquisition of the western Onan building was to be considered a “bridge” loan that would be replaced by permanent financing by the Minnesota Community Capital Fund (MCCF) and Community Reinvestment Fund (CRF).  The loan was approved by MCCF and denied by CRF.

Wille stated that it is necessary to consider the modification of the terms of the $250,000.  Wille suggested the terms of the loan be amended to extend the balloon payment until June 18, 2009 to allow Exceed Packaging to continue operations at 907 North Swift Street.  He stated that MS & GS could re-apply to the MCCF/CRF or could seek conventional financing at that time.

A motion was made by Kvamme, seconded by Eichmann, to introduce Resolution No. 2007 - 12, entitled, “A Resolution Modifying The Terms Of A $250,000 Revolving Loan To Mark & Geri Steele”.  All members voting aye, the Resolution was passed and adopted.

Unfinished Business

Child Care Loan Program Discussion

City Administrator Prafke addressed the EDA through a memo regarding child care assistance proposals.  Wille said that he agreed with Prafke’s goal in that the EDA could help facilitate an increase in day care slots for those that wanted to become a licensed daycare or expand.  Prafke said that an option to assist daycare license holders would be for the EDA to provide short term loans under a program exclusively for day cares. 

Wille stated that he would work with Prafke and put together guidelines similar to the Façade Enhancement program.  Favre said he preferred that the loan bare no interest versus a forgivable loan.

Wille stated that the daycare subject was discussed at the Development Corporation and they did not feel that a grant or forgivable loan was appropriate.

Kvamme felt that the “use of the proceeds” needed to be monitored. 
    
Reports

A motion was made by Eichmann, seconded by Favre to move the December 27th meeting to December 13, 2007.  All members voting aye, the motion carried.

Wille reported that the revolving loans have been dispersed to Rachel Moore (The Pulse) and Jody Evenson (NAPA).

Adjournment

With no further business to conduct, motion by Favre, seconded by Seitzer to adjourn.  All voting in favor, motion carried, meeting adjourned at 12:58 p.m.


CITY OF SAINT PETER, MINNESOTA
OFFICIAL PROCEEDINGS
MINUTES OF A SPECIAL MEETING OF THE ECONOMIC DEVELOPMENT AUTHORITY
November 9, 2007

 

Pursuant to due call and notice thereof, a special meeting of the Economic Development Authority (EDA) was called to order at 12:00 p.m. in the Conference Room at City Hall on November 9, 2007.

Roll was taken with members Mike Favre, John Kvamme, Sam Gault, Jr., and Ken Eichmann in attendance.  Community Development Director Russ Wille was also present.  Members Greg Seitzer and Paul Tanis, Jr. were absent.

Approval of Agenda

Motion by Kvamme, seconded by Gault to approve the agenda as presented.  With all members voting in favor the motion was carried.

Approval of Minutes

Motion by Kvamme, seconded by Gault to approve the minutes of the November 1, 2007 meeting of the EDA as presented.  All voting in favor, the motion carried.

Unfinished Business – none

New Business

Rachel More – Revolving Loan Request

Wille stated that Rachel More, d.b.a. The Pulse, has submitted a revolving loan request in the amount of $40,000 in order to help finance the start up of a fitness center.  Wille stated that More intends to lease the retail space previously occupied by Mary Lou’s.  He said services to be offered by The Pulse include, but are not limited to; personal training, aerobics group exercise, and weight training.  More intends to sub-lease space to Saint Peter Martial Arts to provide additional project income.

Wille said total project and business start-up costs are anticipated to be $49,800.  Wille stated that a $10,000 line of credit has been approved by Nicollet County Bank.  He indicated that the line of credit is intended to finance the working capital and operating needs of the business until the business becomes profitable.  The line of credit is established as “interest only” for the first twelve months of financing.

Wille stated that NCB would require the recording of a security agreement covering the assets of The Pulse, Inc. as well as obtaining a first lien position against the assets of the corporation.  Wille indicated the City is expected to receive a second lien position.  NCB is also requiring Rachel and Charlie More to execute a personal guarantee further securing the note.

Wille stated that the second lien position would not provide sufficient loan collateralization.  Wille stated that after review of the More’s financial statement, the personal guarantee would provide satisfactory collateralization of the loan as recommended.

Wille said that according to Revolving Loan Program Guidelines, “a minimum threshold of $1 private funds for $1 Saint Peter Economic Development Revolving Loan Funds will be required, and all applications failing to meet the minimum threshold standards may be reviewed on a case-by-case basis; the EDA reserves the right to waive certain requirements of this program and may request additional information and documentation as deemed necessary”.  Wille suggested that the EDA recommend approval of a portion of the requested funding in the amount of $24,900.

Wille stated that eh Mores expect to contribute existing equipment with an estimated value of $6,920 as well as $2,900 in furnishings.  They also intend on providing numerous hours in sweat equity rehabilitating, remodeling and installing equipment.

Kvamme said he was not comfortable with setting a precedent of being the primary lender.

Wille stated that if the $24,900 revolving loan were approved, there would be a $15,090 financial gap.  He suggested alternative sources of funding such as private bank financing, Region Nine Development Commission or Southern Initiative Fund loans.  Wille stated that the personal financial statement suggest the ability to seek additional bank financing secured by the equity in the More homestead.

Wille stated his initial concern regarding the fitness club was the competition.  Rachel More stated their club would be set aside from others in the community by offering a work out studio versus a gym, and providing a friendly and welcoming atmosphere.  Charles More said they have received a lot of inquiries regarding The Pulse.  He stated that Rachel has numerous dedicated clients that would take advantage of workout studio. 

A motion was made by Favre, seconded by Kvamme, to introduce Resolution No. 2007-10 entitled, “Resolution Recommending Approval Of A $24,900 Revolving Loan To Rachel More d.b.a. The Pulse, Inc. To Partially Finance The Acquisition Of Equipment And Furnishings For The Business Start-Up”.  A motion was made Favre, seconded by Kvamme to amend the resolution by adding, “A loan to finance 50% of the project costs, not to exceed $24,900 be approved for Rachel More d.b.a. The Pulse, Inc. to partially finance the acquisition of equipment and furnishings for the start-up of a training and fitness studio in the downtown commercial district”.  Members Kvamme, Favre and Eichmann voting aye, Member Gault abstaining, the Resolution was passed and adopted.

Reports

Wille reported that the EDA will discuss a revolving loan request from a potential daycare, at the next meeting.

Adjournment

With no further business to conduct, motion by Favre, seconded by Gault to adjourn.  All voting in favor, motion carried, meeting adjourned at 12:33p.m.
 

CITY OF SAINT PETER, MINNESOTA
OFFICIAL PROCEEDINGS
MINUTES OF A SPECIAL MEETING OF THE ECONOMIC DEVELOPMENT AUTHORITY
November 1, 2007

Pursuant to due call and notice thereof, a special meeting of the Economic Development Authority (EDA) was called to order at 12:00 p.m. in the Governors Room of the Saint Peter Community Center on November 1, 2007.

Roll was taken with members Mike Favre, John Kvamme, Greg Seitzer, Sam Gault Jr. and Paul Tanis, Jr. in attendance.  Community Development Director Russ Wille and City Administrator Todd Prafke were also present.  Member Ken Eichmann was absent. 

Approval of Agenda

Motion by Gault, seconded by Seitzer to approve the agenda as presented.  With all members voting in favor the motion was carried.

Approval of Minutes

Motion by Tanis, seconded by Seitzer to approve the minutes of the October 4, 2007 meeting of the EDA as presented.  All voting in favor, motion carried.

Unfinished Business - none

New Business

NAPA (Jody Evenson) – Revolving Loan Request

Wille stated that Jody and Gina Evenson purchased the Saint Peter NAPA business from Paul Young in 2006.  He stated that although Evenson purchased the business, he continues to lease the building from Young.  Wille stated that in early October, Evenson and Young executed and Earnest Money Contract providing the details of the proposed sale of the building to Evenson.

Wille stated that Evenson has applied for a revolving loan in the amount of $140,000 to partially finance the purchase of the building.  He stated that Nicollet County Bank has approved a $200,000 loan.  Wille indicated that Evenson has asked that the EDA and Nicollet County Bank to finance the entire acquisition cost because Evenson’s equity in the business is currently encumbered by an additional loan on business inventory and is not able to be liquidated to provide financing for he building purchase.

Wille stated that he had reviewed the submitted income statements and balance sheets of the NAPA operations and recommended that the EDA further recommend that the City Council provide the loan as requested.  Wille proposed the loan be secured by a second mortgage recorded behind the first mortgage to be held by Nicollet County Bank and that the note is secured by a personal guarantee to be executed by Jody and Gina Evenson.

Tanis asked Evenson if he had secured a renter for the warehouse space in the rear of the building.  Evenson said he was in the process of negotiating a lease with a local industry.

A motion was made by Tanis, seconded by Kvamme, to introduce Resolution No. 2007 – 10 entitled, “Resolution Recommending Approval Of A $140,000 Revolving Loan To Evenson Real Estate Management, LLC To Partially Finance The Acquisition Of The Commercial Property Located At 311 South Front Street”.  Members Favre, Seitzer, Kvamme, Tanis voting aye, Member Gault abstaining, the Resolution was passed and adopted.

Creation Technologies

Wille stated that Creation Technologies (CT) purchased the Taytronics business, real estate and assets from Taylor Corporation earlier this year.  Wille reported that he, Favre, Tanis and St. Peter Community Development Corporation Vice president Doug Miller met with representatives from Creation Technologies regarding the plans for their Saint Peter business.

Wille stated that Creation Technologies disclosed they intend to increase sales of the Saint Peter plant within the next 4 years and increase employees from 110t0 200 plus within the same time frame.  Wille said they expressed interest in a new facility as the existing production facility and site does not meet the company’s needs.  He said they indicated they do not want to won real estate but would like to lease a facility.

Wille said he has been working with the St. Peter Development Corporation (PDC) preparing an economic development package that would assist the company in their expansion plans.  He said he also introduced management of CT to Lee Carlstrom of R.W. Carlstrom Construction.  He indicated that Lee and partners would propose to finance the construction of a new 50,000 plus square foot plant in the North Industrial Park.  He said upon completion, the facility would be leased to CT.

Wille stated that CT would see to sell their existing plant prior to incurring a new lease.  Wille said that correspondence has been provided to CT indicating a scenario whereas the EDA and/or SPDC would purchase the existing 37,000 square foot building if it has not been sold prior to relocating the business to the North Industrial Park.

Members asked if CT would be seeking any financial help from the City.  Wille stated that they maybe seeking Tax Increment Financing (TIF).  He also said they may request a 0% loan on the price of the lot.

Tanis stated he sent a letter thanking CT for their visit.

Reports

Daycare – Revolving Loan Program (Todd Prafke) – Prafke indicated the strong need for daycare within the Saint Peter community.  He stated that the City has received a revolving loan request from a group to help finance the start up of a daycare in the old nursing home located on Park Row.  Prafke felt that the City could help facilitate an increase in day care slots through a number of efforts, not just in one place, but through out the current license holders or those that want to become licensed or expand.  Prafke suggested setting aside a sum of money, not to exceed $30,000, from the revolving loan fund, to help daycare providers make improvements to their homes which meet licensing guidelines, in order to increase the number of children allowed at their daycare.

Special Meeting – Wille stated that the EDA has received a revolving loan request from Rachel More to help finance the start up of a fitness center.  Wille said he would like to hold a special meeting on November 7th or 9th to act on the request.  Seitzer indicated he would be gone during that week.

Adjournment

With no further business to conduct, motion by Tanis, seconded by Gault to adjourn.  All voting in favor, motion carried, meeting adjourned at 12:55 p.m.


CITY OF SAINT PETER, MINNESOTA
OFFICIAL PROCEEDINGS
MINUTES OF A SPECIAL MEETING OF THE ECONOMIC DEVELOPMENT AUTHORITY
October 4, 2007

Pursuant to due call and notice thereof, a special meeting of the Economic Development Authority (EDA) was called to order at 12:00 p.m. in the Governors Room of the Saint Peter Community Center on October 4, 2007.

Roll was taken with members Mike Favre, John Kvamme, Greg Seitzer, Ken Eichmann and Paul Tanis, Jr. in attendance.  Community Development Director Russ Wille was also present.  Member Sam Gault, Jr.  was absent.

Approval of Agenda

Motion by Kvamme, seconded by Eichmann to approve the revised meeting agenda as presented.  With all members voting in favor the motion was carried.

Approval of Minutes

Motion by Kvamme, seconded by Seitzer to approve the minutes of the April 26, 2007 meeting of the EDA as presented.  All voting in favor, motion carried.

Motion by Kvamme, seconded by Eichmann to approve the minutes of the August 23, 2007 meeting of the EDA as presented.  All voting in favor, motion carried.

Unfinished Business - none

New Business

Saint Peter Greenhouse – Mortgage Subordination Request

Wille stated that Jerry Lunderberg dba St. Peter Greenhouse currently has two revolving loans with the City of Saint Peter.  He stated the $35,000 loan is secured by a second mortgage against the residential/commercial property and the $25,000 loan is secured by a fourth mortgage against the same property.

Wille informed EDA members that Nicollet County Bank holds the first mortgage in the amount of $68,000 and Minnesota Housing Finance Agency currently has a third mortgage in the amount of $15,000.  Wille explained that the entire $15,000 MHFA loan would be forgiven and the mortgage satisfied if the Lunderberg’s maintain their personal residence at the subject property. 

Wille stated he received correspondence from Tim Grabow of Hometown Bank indicating their desire to refinance the greenhouse debt through a new loan with the principal debt of $125,000.   Wille said the proceeds of the new loan would be used to payoff the existing Nicollet County Bank loan as well as the revolving loan with the lowest balance.  Wille added that the new loan will also pay business related consumer debt improving Lunderberg’s monthly cash flow by more than $1,000.  Wille indicated an appraisal has established a value of $390,000 for the commercial/residential property and was based upon the sales and cost approach.

Kvamme asked if the property on the west end of town was that valuable.  Wille stated it was a large piece of property.

Favre said without viewing the appraisal, it is difficult to determine what the appraiser is using to drive the property worth up.

Kvamme suggested amending the revolving loan guidelines requiring the appraisal to be reviewed by the EDA. 

Tanis suggested that the EDA receive a full copy of appraisals for requests over $100,000.

Tanis requested that the guidelines be amended at the next regular meeting.

A motion was made by Tanis, seconded by Kvamme, to introduce Resolution No. 2007 – 09 entitled, “Resolution Recommending The Subordination Of City Held Mortgage For The Refinancing Of The Saint Peter Greenhouse (Lunderberg) Debt”.  With All members voting aye, the Resolution was passed and adopted.

Reports

EI Microcircuits - Wille reported that EI Microcircuits is interested in expanding their business in St. Peter.  Wille stated that on September 13, 2007, he presented a proposal to Eric and Rob Else consisting of a $400,000 note at 0% interest amortized on a fifteen year schedule.

Wille stated that the company would be required to maintain forty-one full time employees and hire an additional 15 employees.

Creation Technologies – Wille stated that Tanis, Doug Miller, Favre and himself met with John Makela of Creation Technolgies (purchased by a Canadian firm) formerly known as Taytronics.  Wille said they were informed that the Canadian firm did not feel St. Peter was maximizing its potential and that they intend to grow from a $13M company to a $40M company that employs 200.  Willed said the company desires for someone to construct a facility and lease it to Creation Technologies.  The company would also like assistance in finding employees and training assistance programs.  Wille stated that he has spoken to Mike Hennek of Saints Bus Service regarding employee transportation.

Super 6 -  Wille reported that staff expected the Super 6 revolving loan to be paid off September 15, 2007.  Wille stated that the outstanding utility bill was included in the revolving loan payoff as well as attorney’s fees that have been accrued.  A motion was made by Tanis, seconded by Favre to express the EDA’s deep concerns regarding the process of collection and felt the City should be more aggressive.  All members voting aye, the motion carried.

St. Peter Food Coop  - Wille stated that the Saint Peter Coop is proceeding with expansion plans on their own.  He indicated that Margo Brown is working with Carlstrom Construction.  Tanis expressed his concern with parking if Parking Lot 5 is developed.  Wille said that the foot print of the building is the only property that will be sold.  He indicated there would be parking available behind the building.

NAPA -  Wille reported that Jody Evenson is in the process of purchasing the NAPA building located at 311 South Front Street.  Wille said that Evenson would be speaking to Jay Hanson of Nicollet County Bank regarding financing.  Wille indicated that Evenson would also be seeking a revolving loan from the City.     

Zoning Ordinance -  Wille stated that ISJ Mayo Health Systems has purchased the property located on the northwest corner of Sunrise Drive and Broadway.  He stated they have delayed the annexation process until the new zoning ordinance is passed.  Wille indicated that the new ordinance will include an office/medical facility zoning.

Adjournment

With no further business to conduct, motion by Tanis, seconded by Seitzer to adjourn.  All voting in favor, motion carried, meeting adjourned at 12:51 p.m.

 

CITY OF SAINT PETER, MINNESOTA
OFFICIAL PROCEEDINGS
MINUTES OF REGULAR MEETING OF THE ECONOMIC DEVELOPMENT AUTHORITY
August 23, 2007

Pursuant to due call and notice thereof, a regular meeting of the Economic Development Authority (EDA) was called to order at 12:03 p.m. in the Governors Room of the Saint Peter Community Center on August 23, 2007.

Roll was taken with members Mike Favre, Sam Gault Jr., John Kvamme and Ken Eichmann in attendance.  Community Development Director Russ Wille and Bob Wright (Whiskey River) were also present.  Members Paul Tanis Jr. and Greg Seitzer were unable to attend and were absent.

Approval of Agenda

Motion by Gault, seconded by Kvamme to approve the meeting agenda as presented.  With all members voting in favor the motion was carried.

Approval of Minutes

Motion by Kvamme, seconded by Gault to approve the minutes of the July 11, 2007 special meeting of the EDA as presented.  All voting in favor, motion carried.

Motion by Kvamme, seconded by Gault to approve the minutes of the August 9, 2007 special meeting of the EDA as presented.  All voting in favor, motion carried.

Unfinished Business

Wille reported that the City Attorney continues to seek collection of the Super 6 Wash and Lube debt.  No significant progress has been reported by the City Attorney due to his absence from the office.  A more thorough report will be provided at a subsequent meeting of the Authority.

New Business

The balance of the Java Central loan has come due at the conclusion of the five year loan term.  Bob Wright of Java Central has requested that he be allowed to continue to make $350 monthly payments until the note is repaid in full.  Wille noted that Java Central no longer operates at the Community Center and that the agreed upon term has expired.  He recommended that the EDA require repayment of the note at this time.

Gault had previously recommended that the loan terms be amended to reflect an interest rate of 1% above the Wall Street prime and that $350 monthly payments be accepted until such time as the note is repaid in full.  Other members of the EDA agreed that Gault’s suggestion would be appropriate.  Motion by Favre, seconded by Gault to introduce Resolution NO. 2007 - 08, “RESOLUTION RECOMMENDING THAT THE CITY COUNCIL AMEND THE TERMS OF A REVOLVING LOAN PREVIOUSLY MADE TO JAVA CENTRAL, LLP TO PARTIALLY FINANCE THE START-UP COSTS OF A COFFEE / SNACK BAR AT THE SAINT PETER COMMUNITY CENTER”.  With no further discussion a roll call vote was taken.  Gault, Favre, Eichmann and Kvamme voted in favor of the motion.  No members opposed.  The Chair declared the motion to have passed.  The Community Development Director will prepare materials for an upcoming City Council meeting.

Reports

Wille reported that EI Microcircuits is contemplating an expansion of their operations.  The expansion will occur in either Saint Peter or at their current Mankato location.  The ownership of EI Microcircuits has asked that the City prepare a proposed financial incentive package to entice them to expand in Saint Peter in lieu of their Mankato operation.

EDA members suggested working with the Saint Peter Community Development Corporation or Minnesota Community Capital Fund to put together a financing package that provides for an attractive blended interest rate to the company.  Wille indicated that he would make contact with both organizations and work with the Administration to develop a proposed deal.

Wille reported that he and the City Administrator are continuing to work with the Saint Peter Food Coop to result in a new building on Municipal Parking Lot #5.  A request to the EDA may be forthcoming.

Wille noted that the $700,000 loan from the Greater Minnesota Housing Fund is due September 1, 2007.  The note will be repaid as per the terms and any remaining speculative home debt will be rolled into the regular Washington Terrace accounts.

Adjournment

With no further business to conduct, motion by Gault to adjourn.  All voting in favor, motion carried, meeting adjourned.
 

CITY OF SAINT PETER, MINNESOTA
OFFICIAL PROCEEDINGS
MINUTES OF THE SPECIAL MEETING ECONOMIC DEVELOPMENT AUTHORITY
July 11, 2007

Pursuant and due call and notice thereof, a special meeting of the Economic Development Authority (EDA) of the City of Saint Peter was conducted in the Governor’s Room at the Saint Peter Community Center on July 11, 2007.

A quorum present President Mike Favre called the meeting to order at 12:00 p.m.  The following members were present: Paul Tanis, Jr., Mike Favre, Sam Gault Jr., Ken Eichmann, and John Kvamme.  City staff present was Director of Community Development Rosten Wille and Administrative Secretary Cindy Moulton.  Present was guest Carol Hayes. 

Approval of Agenda

A motion was made by Tanis, seconded by Gault, to approve the agenda.  With all in favor, the agenda was approved.

Approval of Minutes

A motion was made by Kvamme, seconded by Gault to approve the minutes of May 8, 2007 with the following amendment; “Tanis made a motion to adjourn”.  All members voting aye, the minutes were approved as amended.

Unfinished Business  - None

New Business

Carol Hayes (Contents) – Revolving Loan Request

Wille stated that Carol Hayes has submitted a revolving loan request in the amount of $99,000 to partially finance the acquisition of 304 South Minnesota Avenue. 

Wille stated that Ms. Hayes has entered into a purchase agreement to purchase 304 South Minnesota at a price of $269,000.  He stated that an evaluation of the building had been done and that the estimated value is $275,000.

Wille stated that Ms. Hayes intends to relocate Contents to the larger 304 South Minnesota Avenue building.  She is contemplating the use of the store front of 316 South Minnesota Avenue.  

Wille said the project will be financed with $40,000 owner equity, $130,000 Wells Fargo Bank and $99,000 EDA – RLF.  Wille indicated that in addition to the $40,000 owner equity, Hayes would be financing additional renovation costs as well as sweat equity.

Wille recommended that the $99,000 loan be approved at 3% interest, amortized on a 20 year schedule with a balloon payment due after 10 years.    He said the loan would be collateralized by a second mortgage, a personal guarantee executed by Hayes and her spouse, and a second lien position secured against fixtures, furnishings, accounts receivable and inventory.

Ms. Hayes thanked the EDA for the opportunity.  She stated that she intends to use as many Saint Peter businesses as possible during the renovation of the store.  She indicated that she would like to make Contents a signature store.  She did express a concern with China Town’s vents blowing directly into 304 South Minnesota and the smell of fried food.  Wille stated that the building permit was issued in error and that the City is responsible for remedying the problem.  

A motion was made by Tanis, seconded by Eichmann to introduce Resolution No. 2007 – 05 entitled, “A Resolution Recommending Approval Of A $99,000 Revolving Loan To Carol Hayes d.b.a. Market Properties, LLC To Partially Finance The Acquisition Of A Commercial Building At 304 South Minnesota Avenue.  All members voting aye, the Resolution was passed and adopted.

Reports

Wille stated that City Attorney Brandt has mailed correspondence to Super Six.  Tanis said it was his understanding that a summons & complaint were to be issued.

Wille reported that Door Engineering is contemplating relocation into a new facility.  He indicated they would prefer to lease rather than own a building.  Wille said that R.W. Construction has drawn up a proposal to build a structure and lease it back to Door Engineering.

Wille stated that Bob Wright is currently repaying a revolving loan for Java Central.  He said that a balloon payment was due on July 1, 2007.  Wright was contacted regarding the balloon payment.  Wright requested that he be able to continue the monthly payments until the loan was paid in full.  Wille stated that Wright had entered into a Promissory Note which set up the current terms.  Wille indicated that he would recommend denial of Wright’s request.

Wille reported that a special EDA meeting will be held on July 18, 2007 to act on a revolving loan request that has been submitted by David Olson in the amount of $569,000 to partially finance an upper scale restaurant.

Gault stated he would be absent from the July 18, 2007 meeting.
 
Adjournment

A motion was made by Tanis, seconded by Gault to adjourn the meeting.  The meeting adjourned at 12:59 p.m.
 

CITY OF SAINT PETER, MINNESOTA
OFFICIAL PROCEEDINGS
MINUTES OF A SPECIAL MEETING ECONOMIC DEVELOPMENT AUTHORITY
May 8, 2007

Pursuant and due call and notice thereof, a special meeting of the Economic Development Authority (EDA) of the City of Saint Peter was conducted in the Governor’s Room at the Saint Peter Community Center on May 8, 2007.

A quorum present, Vice President Paul Tanis called the meeting to order at 12:00 p.m.  The following members were present:  Paul Tanis, Jr., John Kvamme, Greg Seitzer, Ken Eichman, and Sam Gault Jr.  City staff present was Director of Community Development Rosten Wille and Administrative Secretary Cindy Moulton.  Guests present were Mike and Mark Steele. 

Approval of Agenda

A motion was made by Kvamme, seconded by Gault, to approve the agenda.  With all in favor, the agenda was approved.

Unfinished Business  - None

New Business

Chippewa Packaging – Modification of Loan Terms

Wille stated that Chippewa Packaging has requested a $100,000 revolving loan from the EDA for additional working capital.  He stated that Chippewa is beginning to garner the contracts necessary to provide for the growth predicted in the original 2005 business plan.  He said they recently signed contracts with Heinz to package and ship food products to markets in the United Kingdom and Canada, with potential to grow.

Wille stated that at this time, Chippewa suffers from a lack of available working capital and equity.  He said the Heinz contract(s) require Chippewa to purchase the food product and shipping cartons.  Wille indicated that this arrangement has become the norm in the packaging industry when working with multi-national companies.  Wille said the contract stipulations tie up precious capital. 

Wille stated that a review of the Chippewa income statement and balance sheet indicates that if the loan were approved, it would considered to be essentially unsecured due to the company’s negative equity position and the City’s security position behind Nicollet County Bank.

Wille recommended that the EDA approve the $100,000 request for additional working capital.  He further recommended that the loan bear an interest rate of 5%, that the loan be amortized on a ten year schedule and that the borrower pay interest only for the first twelve months with regular principal and interest payments commencing in the thirteenth month.

Wille also recommended that the EDA approve the terms of the existing Chippewa loan with an outstanding principle balance of $84,489 be amended to allow interest only payments between June 1, 2007 and May 1, 2008 with regular payment commencing at that time.

Members asked where Chippewa Packaging planned to borrow additional money in the future if needed.  Steele stated they would seek additional funds from the bank if they have a profit increase.  He said they know the company will need additional space and equipment as they grow.

Wille stated that the Development Corporation is working with Chippewa on the possibility of obtaining the spec building. 

A motion was made by Kvamme, seconded by Seitzer to introduce Resolution No. 2007 - 02 entitled, “A Resolution Recommending Approval Of A $100,000 Revolving Loan To Chippewa Packaging, Inc. To Provide Additional Working Capital”.    Tanis suggested that, the interest on the loan be fixed at 3% as it is in an existing loan, the loan be amortized on a 10 year schedule with a balloon payment due after 1 year, the payment be established as “interest only” for the first twelve months, and that the company’s financials are reviewed in twelve months to consider and extension and modifications of the terms.  A motion was made by Kvamme, seconded by Seitzer to amend the resolution to include Tanis’s suggestions.  Members. Kvamme, Seitzer, Tanis, Eichmann voting aye, Member Gault abstaining, the Resolution was passed and adopted. 

A motion was made by Kvamme, seconded by Eichmann to introduce Resolution No. 2007-03 entitled, “A Resolution Recommending Modification Of Loan Terms For A Revolving Loan Previously Provided To Chippewa Packaging, Inc.”.  Tanis suggested amending the resolution by adjusting the interest rate to 3%, the payment be established as “Interest Only” for twelve months, and to review the financials in twelve months.  Members Kvamme, Seitzer, Tanis, Eichmann voting aye, Member Gault abstaining, the Resolution was passed and adopted.
 
Adjournment

A motion was made by Kvamme, seconded by Eichmann to adjourn the meeting.  The meeting adjourned at 12:55 p.m.
 

CITY OF SAINT PETER, MINNESOTA
OFFICIAL PROCEEDINGS
MINUTES OF THE REGULAR MEETING ECONOMIC DEVELOPMENT AUTHORITY
April 26, 2007

Pursuant and due call and notice thereof, a regular meeting of the Economic Development Authority (EDA) of the City of Saint Peter was conducted in the Governor’s Room at the Saint Peter Community Center on April 26, 2007.

A quorum present President Mike called the meeting to order at 12:00 p.m.  The following members were present: Paul Tanis, Jr., Mike Favre, Greg Seitzer, and John Kvamme.  City staff present was Director of Community Development Rosten Wille and Administrative Secretary Cindy Moulton.  Present was guest Mark Hanson. 

Approval of Agenda

A motion was made by Tanis, seconded by Sietzer, to approve the agenda.  With all in favor, the agenda was approved.

Approval of Minutes

A motion was made by Tanis, seconded by Kvamme to approve the minutes of January 25, 2007.  All members voting aye, the minutes were approved as presented.

Unfinished Business  - None

New Business

Collection Proceedings – Super 6 Wash & Lube

Wille stated that the City provided a $40,000 revolving loan to Super 6 Wash & Lube, LLC to partially finance the acquisition of equipment and furnishings for the start-up of the quick lube and car wash operations. 

Wille said that the note was amortized on a ten year schedule with the final payment due on November 1, 2008.  Wille indicated that several delinquencies have occurred within the last year.  He indicated that Myron Erstad of Super 6 Wash & Lube, LLC was contacted and at that time Erstad indicated that the note would be made current by the end of February.  Wille said that Erstad has not provided any payment, as he had verbally indicated.

Wille stated that he had sent a letter to Mr. Erstad on March 13, 2007 stating that if payment had not been received before the March 21, 2007 EDA meeting, the EDA would be asked to consider the initiation of collection proceedings.  Wille indicated that Erstad has made no effort to contact the City.

A motion was made by Tanis, seconded by Seitzer, to authorize City Attorney Jim Brandt to serve a summons and complaint to sue on the deficiencies of the note.  Favre suggested that a courtesy copy of the letter be provided to Round Bank to inform them of the EDA’s intentions.  He also suggested that a demand letter be sent to all of the partners of Super 6 Stop & Wash LLC before Brandt proceeds.  Wille stated that the business has been sold but that Erstad and partners still owned the property. Tanis asked if the new owners of the business were buying the property on a “contract for deed”.  Tanis asked City Attorney Brandt to conduct a search at the courthouse to determine whether there has been a transfer of property.  With all members voting aye, the motion carried.

Mark Hanson – Revolving Loan Request

Wille stated that Mark Hanson has submitted a request for a revolving loan in the amount of $75,000 to partially finance the acquisition and operations of the “Gustie” Basketball and Leadership Camp (GBLC).

Wille said Hanson has been the Associate Director of the GBLC for the past 20 years and has been intimately involved in all operations of the camp. Wille said Hanson has proposed to pay $400,000 for the camp.  He said Hanson has proposed to finance the purchase the camp through the following; $25,000 cash contribution, $300,000 loan – NCB, and $75,000 EDA Revolving Loan.

Mark Hanson said that he would like the influx of families during camp to make a positive financial impact on the community.  He stated that he intends to contact local restaurants in town to encourage them to run specials during these times.  

Wille recommended the $75,000 loan be approved at 5% interest, amortized on a 10 year schedule, and to be repaid in full via a balloon payment due after five (5) years. 
  
A motion was made by Kvamme, seconded by Eichmann to introduce Resolution 2007-02 entitled, “A Resolution Recommending Approval Of A $75,000 Revolving Loan To Mark Hanson To Partially Finance The Acquisition And Operations Of The “Gustie” Basketball And Leadership Camp”.  Members Kvamme, Seitzer, and Favre voting aye, Member Tanis abstaining, the Resolution was passed and adopted.
 
Reports

Wille stated that a joint advertisement between the four local banks and the City of Saint Peter will be coming out for the Housing Loan Program fix up fund.

Tanis reported that he continues to receive inquiries from businesses looking for office space. 

Wille stated the City has attempted to obtain an option on the Dranttel property north of the North Industrial Park.  At this time the terms of any option are being negotiated with Dranttel.

Adjournment

A motion was made by Tanis, seconded by Seitzer to adjourn the meeting.  The meeting adjourned at 1:00 p.m.

 

CITY OF SAINT PETER, MINNESOTA
OFFICIAL PROCEEDINGS
MINUTES OF THE REGULAR MEETING ECONOMIC DEVELOPMENT AUTHORITY
January 25, 2007


Pursuant and due call and notice thereof, a regular meeting of the Economic Development Authority (EDA) of the City of Saint Peter was conducted in the Traverse Des Sioux Room at the Saint Peter Community Center on January 25, 2007.

A quorum present President Sam Gault called the meeting to order at 12:00 p.m. The following members were present:  Sam Gault, Jr., Paul Tanis, Jr., Mike Favre, Greg Seitzer, Ken Eichmann and John Kvamme.  City staff present were Director of Community Development Rosten Wille and Administrative Secretary Cindy Moulton.  Guest present was Bryan Kuiper of Nicollet County Bank.

Approval of Agenda

A motion was made by Kvamme, seconded by Seitzer, to approve the agenda.  With all in favor, the agenda was approved.

Election of Officers

A motion was made by Tanis, seconded by Kvamme to elect Favre as president.  All members voting aye, the motion carried.

A motion was made by Gault, seconded by Kvamme, to electing Tanis as Vice-President.  All members voting aye the motion carried.

A motion was made by Tanis, seconded by Gault, to elect Director of Finance Paula O’Connell as Treasurer.  All members voting aye, the motion carried.

Approval of Minutes

A motion was made by Tanis, seconded by Gault to approve the minutes of July 26, 2006, November 30, 2006 and December 6, 2006 with the following amendments; November 30, 2006 – add “Joel” Brinker under Resignation; and December 6, 2006 – change uncollateralized to “under collateralized”.  All members voting aye, the minutes were approved as amended.

New Business

Saint Peter Development Corporation (SPDC) Revolving Loan Deferral – Spec Building

Wille stated that in 2004, the SPDC received a $260,000 revolving loan from the EDA to partially finance the construction of a 10,000 square foot speculative building.  Wille explained that a Single Pay Promissory Note (deferral) was provided at the time of the note.  The note was to be paid upon sale of the property or September 1, 2006 which ever occurred first.  He indicated that the repayment of the note was also to be negotiated if the SPDC found a suitable tenant to lease the structure.  Wille said a similar deferral was provided under the same term for the cost of the land.

Wille stated to date, the building has not been sold or leased.  He said the President of the SPDC has requested an eighteen month extension of the deferrals.  Wille recommended that the EDA grant the request.

A motion was made by Kvamme, seconded by Eichmann to introduce Resolution 2007-01 entitled, “A Resolution Modifying The Terms Of The $260,000 And $54,781 Deferred Revolving Loans Made To The Saint Peter Development Corporation”.  Members Kvamme and Eichmann voting aye, Members Seitzer, Gault, Tanis and Favre abstaining, the Resolution was passed and adopted.

Unfinished Business

Wille stated the City of Saint Peter and EDA have been promoting construction of single family homes since 2000.  One criticism of the City’s affordable entry level housing programs is that the sale of existing single family homes has been adversely impacted by the availability of similarly priced new housing units.  Wille said some have suggested that many of the existing homes are in need of improvement or updating.

Wille stated that a focus group made up of city staff and representatives from the four local banks, created a draft loan program tentatively name the Residential Sales Enhancement Loan Program.  The proposed program would provide 0% deferred loans to finance improvements to homes that are currently offered for sale.

Wille indicated the proposed guidelines were presented to a group of local realtors.  The realtors were concerned with the ability of sellers to receive additional financing up to 100% off the appraised value of the property.  It was their opinion additional debt could serve to hinder the ability to sell the home.  It was also suggested that if the program allows 100% financing, the City must be reasonably sure of the accuracy of any appraisal.
Kuiper said the realtors suggested that a low or no interest loan program be made available to buyers to finance improvements following the purchase of older homes.  Kuiper explained that Minnesota Housing Financing Agency (MHFA) already administers a “Fix Up Fund”.  Kuiper informed the EDA that the local banks have access to the MHFA program.  Kuiper said it was agreed that local realtors would benefit from a continuing ed program regarding available loan programs targeting home improvements or repairs.

Kuiper said the realtors were grateful for the efforts of the City and lending reps but they agreed the program is premature or unnecessary at this time.  Wille stated that without the realtors support, he doesn’t see the program being successful.

Wille said that he and City Administrator Todd Prafke felt the program should be “put out on the shelf”.  Wille also suggested that a representative from MHFA be invited to meet with the realtors to educate them on the buyers program.  Kuiper stated there are brochures available with the information.

Tanis suggested that the letters be mailed to qualifying home owners explaining the MHFA program as well as the Residential Sales Enhancement Program.  Kuiper stated that realtors did not want to be put into the position of asking a homeowner what their income is in order to qualify for the Residential Sales Enhancement Program.

Members felt that the City should proceed with the program and contact DEED to get approval to use Revolving Loan money for the program.  Wille stated the City Council will review the guidelines for the Residential Sales Enhancement Program at a workshop.  It was suggested that Kuiper and the local realtors be invited to attend the workshop.

Report

Wille reported that Super Six Wash & Lube has had serious deficiencies repaying their revolving loan.  He stated that a partial payment was made in January for the late payments from 2006.  Myron Erstad stated he would catch up with the rest of the payments in February.    Wille stated that if the late payments continue, he will contact City Attorney Jim Brandt and have him draft a letter calling the note.

Wille announced that the Small Business Administration has approved financing for Liz Beaudry.  She will be closing on January 31, 2007.

Wille said that Brick, Zen & Mortar will be scheduling their closing in the near future.

Wille reported that the Planning and Zoning Commission held a public hearing regarding the Revised Zoning Ordinance.  Wille stated the hearing was well attended by those property owners affected by the Gateway Overlay and Gustavus Adolphus College affected by the Educational/Institutional District.  Wille said the Planning and Zoning Commission will hold a workshop at 5:30 on February 6, 2007 to take into consideration some of the concerns of the public.  The regular meeting will be held at 7:00 p.m. at which time a recommendation will be made regarding the revised ordinance.

Tanis suggested that Wille schedule presentations with the EDA and Development Corporation to explain the revised ordinance. 

Adjournment

A motion was made by Tanis, seconded by Eichmann to adjourn the meeting.  The meeting adjourned at 12:50 p.m.