Minutes
of the
Regular Meeting of the
Detroit Lakes Development Authority
Tuesday, April 7, 2009
4:30 PM
City Administration Building
Conference Room
MEMBERS PRESENT: Jim Anderson, Mark Hagen, Tom Klyve, Dennis Winskowski,
MEMBERS ABSENT: Bruce Imholte, Mary Beth Gilsdorf, Greg Hildenbrand
OTHERS PRESENT: Robert Louiseau, Larry Remmen, Nancy Wichmann, Jake Judd, Pippi Mayfield, Guy Fischer, Bob Bristlin, Dr. Larry Morrison, Scott Sonstegard
I. CALL TO ORDER:
Chairman Jim Anderson called the meeting of the Detroit Lakes Development Authority to order at 4:30 PM in the Conference Room of the City Administration Building, 1025 Roosevelt Avenue on Tuesday, April 7th, 2009. All members of the Authority have been duly notified of the meeting and the business to be transacted.
II. MINUTES:
A motion was made by Commissioner Tom Klyve seconded by Commissioner Dennis Winskowski and carried unanimously to approve the minutes of the regular meeting held March 4th, 2009
III. FINANCIALS:
A motion was made by Commissioner Dennis Winskowski, seconded by Commissioner Mark Hagen and carried unanimously to approve the financial reports and payment of claims for the periods ending January 31, and February 28, 2009.
IV. OLD BUSINESS:
A. None
V. NEW BUSINESS:
A. Public Hearing to give consideration to the request for tax increment financing for the redevelopment of the former Washington School property into a 30 unit residential project (Union Central, LLC)
Chairman Jim Anderson opened the public hearing to give consideration to the request for tax increment financing for the redevelopment of the former Washington School property into a 30 unit residential project. With no public comment, Chairman Anderson closed the public hearing. Larry Remmen reported that Union Central LLC is requesting tax increment financing in the amount of $350,000 for the $2.8 million dollar project. $100,000 of the funding will be up-front with $250,000 on a pay as you go basis. The former Washington School property will be converted into a 30 unit residential project. Ten units of the project will be rehabilitated with twenty units to be newly constructed. The 1895 portion of the facility will be demolished. A substandard structural report was done and the project does qualify as a redevelopment project. The final review and approval will be brought before the City Council at their May meeting. It was noted that a personal guarantee was missing from the documentation. A motion was made by Commissioner Mark Hagen, seconded by Commissioner Tom Klyve and carried unanimously to approve the request for tax increment financing for Union Central LLC as presented, along with the submission of a personal guarantee from the company’s principals.
B. Consideration to the request of Morrison Eye Clinic to reduce their interest rate from 8.25% to 4.95%;
In August of 2007, L & J Morrison Properties LLC applied for and received a loan to assist in the construction of a new building. The interest rate at that time was 8.25%. Since the economy has changed and the interest rates have come down, they are requesting a lower interest rate. Their variable loan with MMCDC is currently at a rate of 4.95%. The original loan was for $90,000 and the balance is $86,000. A motion was made by Commissioner Mark Hagen, seconded by Commissioner Dennis Winskowski and carried with one opposing vote by Commissioner Tom Klyve to reduce the loan percentage for Morrison Eye Clinic from 8.25% to 5.5%,maintaining the present amortization. It was noted that the monthly payment amount will be reduced.
C. Consideration to the loan request of Apex Electric for a $29,410 IRP loan;
Larry Remmen reported that Apex Electric, an electrical and service company, is requesting a $29,410. dollar IRP loan to relocate and purchase the former Novis Auto Glass building on Dan Street. The Authority would be in second position on this loan. The request is for 4% interest with a 5 year balloon and a 20 year amortization. It was agreed that the Authority would like to have a representative from Apex Electric present to answer questions. This item was tabled to be discussed at a future date.
D. Consideration to the request of Becker County EDA to cash out of the Tower Road Industrial Park;
Becker County EDA Director Guy Fischer was present and reported that at the last meeting of the Becker County EDA, the Board requested that he convey its wishes to explore dissolving the cooperative agreement with the Detroit Lakes Development Authority and selling the County’s one-third stake in the R.J. Anderson property, (also referred to as the Tower Road Industrial Park) Becker County EDA is a third owner of the property and paid $50,000 for its third interest in just over 75 acres (excluding the wetland acres). The agreement specified the terms of the distribution of the proceeds. 21 ˝ unimproved acres have been sold for $66,000 to two parties (estimated $234,624 profit). There are approximately 54 unimproved acres that remain for sale and the Becker County EDA has a third interest in the profit and unsold acreage. There are crop payments received from the unimproved acres and there have been fertilizer and property tax expenditures. Additional engineering and platting expenses occurred in 2005. Based upon these facts, the net value of the investment in the Tower Road Industrial Park is estimated at $57,970 on December 31, 2008.
No discussion was held at that time with reference to the length of the County’s investment. One third of the income and expenses of the park would be $22,179. A motion was made by Commissioner Mark Hagen, seconded by Commissioner Dennis Winskowski and carried unanimously to pay the Becker County EDA one third of the income and expenses in the amount of $22,179, with Guy Fischer discussing and negotiating with the Becker County Board, the remainder of the balance.
E. Consideration to the transfer of TIF payments from Dynamic Investment to Meadow’s Edge Apartments, LLP;
Larry Remmen reported that Dynamic Investments, LLC of St. Cloud LLC wishes to transfer and assign all rights in the tax increment financing agreement between Dynamic Investments, LLC to Meadow’s Edge Apartments LLP. This is a routine request for a pay as you go tax increment financing plan. A motion was made by Commissioner Tom Klyve, seconded by Commissioner Mark Hagen and carried unanimously to allow the transfer of TIF payments from Dynamic Investments to Meadows Edge Apartments, LLP.
F. Collateral Change For Team Industries – Detroit Lakes
Scott Sonstegard, Team Industries, was present to request a collateral change on the promissory noted dated March 1, 2006 with the DLDA. TEAM is hoping to move the current collateral a MAZAK Horizontal Machining Center NEXUS 5000-2 to TEAM’s Cambridge facility. The request is for a change in collateral to ZEISS CONTURA G@, COORDINATE MEASURING MACHINE S/N 20071502313. Sonstegard reported that TEAM is re-shuffling and refocusing their business plan. The value of both machines are comparable. A motion was made by Commissioner Tom Klyve, seconded by Commissioner Mark Hagen and carried to allow the collateral change as requested by TEAM Industries – Detroit Lakes.
G. Floral Impressions’ Agreement
Larry Remmen reported that negotiations with Floral Impressions for the sale of their property has resulted into a purchase agreement with the DLDA and Floral Impressions for $270,125, with a closing date of May 28th, 2009. A motion was made by Commissioner Mark Hagen, seconded by Commissioner Dennis Winskowski and carried unanimously to move forward with the purchase agreement with Floral Impressions and the Authority will pay for a Phase I Environmental Study if necessary. The Board also agreed to allow staff to negotiate on the closing date and who pays for the Phase I. Study.
VI. Adjournment
There being no further business to bring before the Board, the meeting was adjourned.
Signed Larry Remmen, Community Development Director