EDA MINUTES - August 28, 2014

August 28, 2014

Economic Development Authority
Saint Peter Community Center – Governors Room

Call to Order

The meeting of the Saint Peter Economic Development Authority was called to order by President Bob Southworth at approximately 12:02p.m.  Roll call was taken with Southworth, James Dunn, Cory Abels ,Jay Hansen, Chuck Zieman and Marilyn Rundell, were present.  John Kvamme was absent.  City staff present was Community Development Director Russ Wille and Administrative Secretary Cindy Moulton.  Guest present was Paul Tanis.

Approval of Agenda

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

Approval of Minutes

A motion was made by Hansen, seconded by Zieman, to approve the Minutes of the June 26, 2014 and July 9, 2014.  All voting aye, the motion carried.

Sweat Equity – Subordination Request

Sweat Equity , LLC owns 301 (River Rock Coffee)  and 303 South Minnesota Avenue (Sticks n Stones). Sweat Equity is attempting to refinance and consolidate a portion of their debt.  The City provided a $92,122.22 revolving loan to them to partially finance the construction of 303 South Minnesota Avenue Property.  The loan is secured by a promissory note, mortgage and personal guarantee.  Sweat Equity has been perfect on their loan repayment and have paid down the loan to $73,968.01.

Nicollet County Bank has consented to provide the requested funds but would require the City Subordinate its mortgage to the new $87,000 mortgage proposed by Nicollet County Bank and Sweat Equity, LLC.  At this time the City’s mortgage is in the third position behind two NCB mortgages.

The City’s mortgage is currently subordinate to the two NCB mortgages totaling $199,712.  If the City consents to the requested subordination and allows NCB to position its new mortgage ahead of the City, the City’s mortgage would be subordinate to $286,712.

The properties were appraised in 2011 at $415,000.  If the City consents to the subordination the four mortgages would total $378,834.  Wille indicated the EDA guidelines suggest that the collateralization is sufficient to adequately secure the EDA loan.

Southworth stated that the banking industry would require an updated appraisal.  He stated he would like to see an appraisal.  Zieman didn’t see the need for one because there is $19,000 worth of equity in the building.

Abels asked if the City would want to take a fourth mortgage to something not doing with the building.   Zieman felt that it wouldn’t make a difference if the City was third or fourth.  He suggested it wasn’t the position but the dollar amount.

A motion was made by Zieman, seconded by Dunn to introduce Resolution No.11, entitled, “Resolution Recommending The Subordination Of City Mortgage To Facilitate The Refinancing of the Sweat Equity, LLC Debt”.  Members Southworth, Zieman, Dunn, Abels and Rundell voting aye, member Hansen abstaining.  The Resolution was passed and adopted.

Fair Emporium -  Will be open in a couple of weeks.

Saints Laundry Co. – Will be open in a couple of weeks.

Tanis Brothers – The two apartments above Comfort Systems have been approved for occupancy.

Municipal Parking Lot #5 -  Wille stated that there was an interested party in Parking Lot #5.  Wille will bring a purchase option to the September City Council Workshop to discuss.  The developer wishes to use the bottom floor as commercial space and the top three floors as apartments.

Mom & Pops –The HPC consented to have the old 214 South Minnesota building demolished.  They have required the creation of a historic narrative before demolition.  Wille stated that it has been difficult to find a photographer that carries the old black and white 35 mm cameras.  The HPC decided to allow digital film.

430 Ritt Street –Wille indicated that the City will be extending MRCI’s lease through mid month as they are behind schedule on the remodeling of their new space in Kasota.

Daycare -  St. Peter Childcare continues to have struggles.  The City has been meeting with the Childcare committee.  The City should have their financials soon.

Dirt Pile – The dirt pile north of Shopko remains on the Con Ag property.

4 the Team – Continues to look for a larger space.  The building owner has not been making any improvements to the building Bridget Blaido currently occupies, which causes her insurance issues.

Hwy 169 Detour – The hwy 169 detour should be removed today.  The North Washington detour in about a week away from completion.

Diamonds in the Rust –Will be closing and consolidating with Playing Possum.

A motion was made by Abels, seconded by Zieman to adjourn.  All in favor of the motion, the meeting adjourned at 12:45 pm.