Minutes of the

Regular Meeting of the

Detroit Lakes Development Authority

Tuesday, May 6^th, 2008

4:30 PM

City Administration Building

Conference Room

MEMBERS PRESENT:       Jim Anderson, Tom Klyve, Mary Beth Gilsdorf, Mark

                                            Hagen, Greg Hildenbrand , Dennis Winskowski,  Matt Brenk,

MEMBERS ABSENT:          None

OTHERS PRESENT:          David Spies, Larry Remmen, Bob Louiseau, Nancy Wichmann,  Leonard

                                            Heltemes, Bruce Imholte, Ron Zeman, Pippi Mayfield, Jake Judd

  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,

            May 6, 2008.  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 Mark Hagen seconded by Commissioner  Mary Beth Gilsdorf and

            carried unanimously to approve the minutes of the regular meeting held April 15^th, 2008 subject to the

            correction on page two, first sentence, It should read:  Reconstruction of the bowling alley could only

            support investment of $600,000-$700,000 to reconstruct another bowling alley with new lanes and

            equipment, based on current cash flow of the bowling center. 

III.        FINANCIALS:

            A motion was made by Commissioner Dennis Winskowski, seconded by  Commissioner Matt Brenk and

             carried unanimously to approve the financial report and payment of claims for the period ending March 31,

             2008.

 IV.      OLD BUSINESS:

            A.        UPDATE ON BUSINESS CORRIDOR STUDY

            The Commissioners received the preliminary report on the Conference Center Study and Larry Remmen

            would like to receive all input from the Commissioners  as soon as possible to prepare for a May meeting

            with the consultants.  Commissioner Mary Beth Gilsdorf reported that Kathy Dixon of Central Market

            should be contacted to obtain their input on the Business Corridor Planning that is taking place.

            B.        UPDATE ON CONFERENCE CENTER STUDY

                        The Authority unanimously agreed that more specific information should be provided in the

                        Conference Center Study to include the following criteria:

·        Establish cost (averages of cost of construction);

·        List of conference center users that would be attracted so they could be contacted;

·        List of conventions that travel in our area and how often would they host a convention;

                        Councilman Ron Zeman suggested contacting a State Tourism member from Thief River Falls that

                         has all of the statistics for northwest Minnesota, such as who attends conventions, where they

                        are held, and how much money is spent .   Councilmember Bruce Imholte suggested contacting

                        the City of Bemidji who is in the process of developing an events center. Larry Remmen will

                        contact both.

                        Chairman Jim Anderson, requested  the Authority contact Larry Remmen with comments, questions

                         and  suggestions regarding the Conference Center Study within the next 24 hours, and Larry Remmen

                         will write a letter to RDG requesting the information discussed.  

              V.      REVIEW DEVELOPMENT AUTHORITY PRIORITIES

                        Larry Remmen reported that the City has approximately $375,000 annually left in tax increment

                        financing funds. 

                        The Authority’s Mission Statement was reviewed and it was agreed that Housing needs to be

                        more specifically defined. 

                        It was agreed that the Authority needs to revisit and re-establish their  priorities.  At the next meeting,

                        May 20^th, the Authority will set up a date for a meeting and tour of the City to redefine and update

                        the priorities.  We will try to do this prior to the City Council’s Strategic Planning Session.

      VI.         CONSIDERATION TO THE REQUEST FOR TAX INCREMENT FINANCING FOR

                     A  REDEVELOPMENT PROJECT AT 1377 WEST LAKE DRIVE

           Larry Remmen reported David Spies is requesting $789,500 in tax increment financing, on a pay as you go

           basis to demolish a bowling alley and construct 21 condominium units at 1377 West Lake Drive.  Spies

           would like to reconstruct a new bowling alley at another location.  The project qualifies as a

           redevelopment district.  Study and documentation of Code deficiencies has determined the bowling

           alley has substandard Code requirements in the amount of $345,300 which is over the required 15% of  

           new construction costs which would be $2.2 million dollars.  The development fits the criteria and is

           clearly a redevelopment area.

          Council member Ron Zeman feels if this project is approved, the Authority  will be setting an example

         to other building contractors who will want to  use tax increment financing for their projects.  Council member

         Bruce Imholte does not think the two projects should be tied together and the Authority should refer back to

         their priorities.  Council member Leonard  Heltemes suggested looking at the project differently by finding a

         site and building a bowling alley, using TIF to redevelop a blighted area, and then finance the

        condominiums regularly, as the bowling alley project has to be dealt with first. 

        Larry Remmen reported that he called the Lakes Country Association of  Realtors and was told there

        were  221 homes for sale at the end of April  and none of the homes were for sale for over $320,000.

           David Spies addressed the Authority with the following comments:

• This property is different than most other property.  We most likely would not be permitted to put industrial on it.
• Changing its use to other commercial, it more than likely would be difficult to acquire a water shed permit.
• Its location only lends itself to lakeside residential.  Expensive pilings are required for this location.
• With our plan of 27 units being denied and a 21 unit plan being accepted by the Planning Commission.  This meant the new bowling center was dependent on tax increment financing.
• With the stipulation or contingency that a TIF would be only if a new bowling lanes is established, you folks stay in control.  You can control the location.  I am sure you would like to see a new bowling facility for the City.  You folks have a safety net on this TIF.
• There are subjects that have not been discussed.  What I can do, but what I would not do.
• We could sell off individual lots on this property and realize about the same net as condo units without risk.  This would destroy the wetlands.  I, myself would not do that.  You might want to ask Larry on this.
• So here we are.  I will not do something I could do.  This would be bad for the City but good for me.  I will not do it..
• You folks can do something good for the Detroit Lakes Bowling Community and the City of Detroit Lakes.
• Please if you don’t see a positive vote for this project today, please table it, at least until Marty and Cory of RDG come to town the week of the 19^th. 
• I want to thank each of you for the time you gave me for the visits I made to you.  Thank you.

            A motion was made by Commissioner Dennis Winskowski to deny the request  for tax increment financing

            based on the fact that it was for market rate housing, seconded by Commissioner Mark Hagen. The motion

             was on the table  for discussion.  David Spies asked that the motion be  tabled.

            Commissioner Matt Brenk reported he wanted to see the project go through and have the blighted area

             cleaned up as a positive factor for the City of Detroit  Lakes  and use the increment on a pay as

            you go basis.   He sees no reason why this project should not go through.

            Commissioner Tom Klyve agrees with Commissioner Brenk and reports there are not tax dollars lost; taxes

            on the property will still be collected as they always have been;  two projects will be created; and the

            project meets all statutory requirements so that the standards for blighted area can be redeveloped.  He

            asked why the project doesn’t qualify. 

            Commissioner Greg Hildenbrand suggested tabling the motion to give David Spies some time, and feels

             a nice bowling alley would be an asset to our community.

            Executive Director Bob Louiseau suggested linking the projects by creating a single tax increment financing

            district in two locations.

            Chairman Jim Anderson called for a roll-call vote:  The motion before the board  is to deny the request for

            tax increment financing for a redevelopment project  at 1377 West Lake Drive, David Spies:

            Mark Hagen, Mary Beth Gilsdorf and Dennis Winskowski voted to approve the motion to deny the request

            for tax increment financing with Commissioners Matt  Brenk, Tom Klyve and Greg Hildenbrand

            opposing the motion.  Chairman Jim Anderson voted yes, motion denied.

  V.      Other

            Larry Engel made an offer on Lot 1 Block 1 Detroit Lakes North Industrial Park.  He would like to pay

            $25,000 down and would like the $46,000 of special assessments to be deferred for three years to build

            a warehouse.  The Authority is asking $71,000 with $49,000 down and special assessments of

            $22,000.  The Development Authority request was tabled until the next meeting.  Larry Remmen will

           obtain more detail on the type of business to be located in the warehouse.

VI.      Adjournment

          There being no further business to bring before the Board, the meeting was adjourned.                                

Signed  

 Larry Remmen  

Community Development Director