Minutes

of the

Regular Meeting of the

Detroit Lakes Development Authority

Tuesday, September 1, 2009

4:30 PM

City Administration Building

Conference Room

MEMBERS PRESENT:              Bruce Imholte, Tom Klyve, Greg Hildenbrand, Mary  Beth Gilsdorf

MEMBERS ABSENT:                Jim Anderson, Dennis Winskowski, Mark Hagen

OTHERS PRESENT:                 Robert Louiseau, Nancy Wichmann, Larry Remmen, Jake Judd, Pippi Mayfield, Brad Wimmer, Mitch Wimmer, Deb Wimmer, Drew
                                                Olson, Carol McCarthy,  Leonard Heltemes, Mark Payne

I.       CALL TO ORDER:

          In the absence of Chairman Jim Anderson and Vice Chairman Mark Hagen, Commissioner Bruce Imholte 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, September 1, 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 Bruce  Imholte and carried unanimously to approve the minutes of the regular meeting held           August 4th, 2009.         

III.     FINANCIALS:

          A motion was made by Commissioner Mary Beth Gilsdorf seconded by Commissioner Greg Hildenbrand and carried unanimously to approve the financial report and           payment of claims through July 31, 2009.

IV.     OLD BUSINESS:

A.      Update on buyout of County on the Ray J. Anderson property

          Larry Remmen reported that the buyout from the County on the Ray J. Anderson property had been completed.

V.      NEW BUSINESS:

A.      Public Hearing to give consideration to tax increment financing for the Waterfront Development at Washington Avenue and West Lake Drive

          Commissioner Mary Beth Gilsdorf inquired whether the conditions of the design changes had been met for the project.  Commissioner Bruce Imholte stated that

          the changes and conditions must be satisfied before funding will be released to the  Developer.

          Larry Remmen read the conditions as follows: 

1.       Upon execution of this Agreement, the Developer shall deposit to the Authority $8,000 for Legal and Administrative Expenses.  If the City has issued a certificate of      occupancy for the Project by December 31, 2010, the Authority shall return the    $8,000 deposit to the Developer; otherwise, the Authority shall retain such amount to  pay Legal and Administrative Expenses.

2.       The Developer shall obtain approval of the PUD not later than March 31, 2010.

3.       The Developer shall grant the City the road right of way designated by the City on  the north end of the Development Property.

4.       The Developer shall obtain a Pelican River Watershed District permit for storm water           run-off from the Development Property prior to the issuance of a building permit         for the Project.

5.       The Developer shall deliver a letter of commitment from a bank or other financial           institution for construction financing for the Project in an amount which the     Developer shall certify is an amount sufficient, together with        equity commitments, to acquire the Development Property and complete the Project in conformance with the PUD not later than May 30, 2010. 

6.       The Developer shall pre-lease or sell at least 50% of the commercial space prior to           commencing construction on the Project.

7.       The Developer will cause the Project to be installed in accordance with the terms of           this Agreement, the Redevelopment Plan, the PUD and all local, state and federal           laws and regulations (including, but not limited to, environmental, zoning, energy           conservation, building code and public health laws and regulations) and all costs of    the Site Improvements and the Project shall be paid by the Developer.

8.       The Project shall include at least 10,000 square feet of commercial space and not           more than 27 condominium housing units.

9.       If more than 2,500 square feet of the commercial space within the Project is used for           restaurant or food service, the Developer shall provide additional parking as set forth in the PUD. 

10.     The cost of the construction of the Project, excluding land acquisition costs, shall be   at least $8,000,000.

Development Authority

09-01-09

Page Three

11.     The construction of the Project will commence not later than May 1, 2010 and, barring unavoidable delays, the Project will be substantially completed by December      31, 2010.

12.     The Developer agrees to utilize high quality materials for the construction of the           Project and agrees to give the Authority final design approval of the Project.

13.     The Authority shall reimburse the Developer for the lesser of $1,180,000 or the costs of the Site Improvements and the Development Property, actually paid by the        Developer (the Reimbursement Amount”) as further provided in Section 3.2 hereof. 

Commissioner Bruce Imholte opened the public hearing.

Tom Harper of 1305 Minnesota Avenue, expressed his concerns about the project.  He inquired why no interest was being charged to the Developer, when the citizens of Minnesota Avenue are being charged for the sewer and water improvements on Minnesota Avenue.  Why would the City want to obtain the street right of way on the north side of the property allowing changes to the street width and which would result in the City having to haul away snow at additional costs to the City.  Larry Remmen replied with clarification that the interest would be a charge to the City to pay the Developer on the tax increment dollars.   

Executive Director Bob Louiseau reported the City has no immediate plans to put an additional street in the area.  The RDG Plan does have a street in their plan, but the final alignment of the street has not been determined. 

Tom Harper inquired why the City would spend money to acquire a right of way when the City has no plans for a street with no traffic study being done and would like a study to be done.  Larry Remmen reported that the Developer is giving the City the right of way at no cost and utilize later if necessary. 

Brad Wimmer of 1225 West Lake Drive, is the seller and part owner of the property that is being developed.  He realizes that the surrounding property owners are apprehensive but feels the project will be a positive impact for the City adding 27 residents.  Using tax increment financing and the project itself will bring tax dollars to the City and pay for itself.

Mitch Wimmer of 1425 Long Avenue, is also the seller and part owner of the property.  He sees the development area as issue that people have been discussing for years, and the RDG Study has provided a road map for the development.     

Commissioner Bruce Imholte closed the public hearing.  A motion was made by Commissioner Mary Beth Gilsdorf, seconded by Commissioner Tom Klyve and carried unanimously to approve the tax increment financing for the Waterfront Development at Washington and West Lake Drive subject to the conditions listed.

Development Authority

09-01-09

Page Four

Executive Director Bob Louiseau reported that he was contacted by Councilman Ron Zeman with concerns regarding the number of variances granted for the project and  the length of the TIF district being twenty five years.  He wanted his concerns to be considered by the Authority. 

Executive Director Bob Louiseau pointed out that the long range plan was reviewed by the Planning Commission and was determined to be consistent with the City’s Comprehensive Plan. 

B.      Consideration to the acquisition of the Macs Building

Larry Remmen reported that the Authority has received a purchase agreement from the DL Downtown Properties to sell the Macs building to the City for the appraised price of $320,000.  A subcommittee of the Authority reviewed the offer received and recommended approval.  This agreement will allow the City to meet with the Veterans to start on the development of a Veteran’s Park which will make the area more attractive to the area and to developers.  The City will request bids for the demolition of the building.

C.      Other

Executive Director Bob Louiseau reported that the City is involved in the development of a Community Based Entrepreneurship Program for Detroit Lakes and the surrounding region.  They are in the process of forming a committee and it was recommended that Commissioners Hagen, Klyve and Winskowski be considered to serve on this board.  Bob Louiseau will contact the Commissioners to determine who will serve.

Commissioner Tom Klyve would like to see the DLDA purchase commercial space in the Waterfront Development to encourage business start ups.  This will be placed on the next agenda.

  VI.   Adjournment

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