Minutes

of the

Regular Meeting of the

Detroit Lakes Development Authority

Tuesday, June 2, 2009

4:30 PM

City Administration Building

Conference Room

MEMBERS PRESENT:              Jim Anderson, Mark Hagen, Dennis Winskowski, Bruce Imholte, Mary Beth Gilsdorf, Tom Klyve

MEMBERS ABSENT:                Greg Hildenbrand

OTHERS PRESENT:                 Robert Louiseau, Larry Remmen, Nancy Wichmann,  

                                                Mitch Wimmer, Leonard Heletemes, Drew Olson

  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, June 2, 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 Mark Hagen seconded by Commissioner Bruce Imholte and carried unanimously to approve the minutes of the regular meeting held May 19, 2009.     

III.     FINANCIALS:

          None

IV.     OLD BUSINESS:

A.      None

V.      NEW BUSINESS:

A.      Consideration to the request for Tax Increment Financing for the Waterfront Development at Washington Avenue and West Lake Drive (Modev, Inc.)

          Drew Olson, Modev, Inc. introduced the proposed Water Front Project which would be a mixed use development at the northwest corner of West Lake Drive and Washington Avenue.  The project will be residential condominiums; one, two and   three bedroom with various designs with a price range starting at $189,000 for a one bedroom unit. Olson proposed a conference center on the second floor.   Several members of the Authority do not think a conference center is a good idea, and perhaps that area could be developed into retail space.  Modev, Inc is requesting $2 million dollars in tax increment financing either in up-front funding or a pay as you go option.  They would prefer the up front option or a    combination of the two.   Detroit Lakes Waterfront, LLC is formed for the purpose of building the proposed development and will dissolve upon sell-out.  The LLC will make a one million two hundred and fifty thousand dollar cash investment.  The money will be raised through various investors, including their development team.  They have a strong           financial plan, and no construction will take place until 60% of the project is sold.  The funding sources of the project will be:  tax increment financing, Detroit Lakes           Waterfront, LLC, Mo-Dev/Development Team investment, Detroit Lakes Revolving Loan Fund, Bank Financing  B & I USDA Guarantee – Pre-Sold Non-refundable Deposits, Rural Energy For America Grant.  Commissioner Winskowski strongly recommended that MoDev contact MMCDC for funding.  The land acquisition is $1.2  million dollars.  The marina portion will be in partnership with J & K Marine. 

          Drew Olson reported he felt confident about the residential sale of the property, but not as confident about the commercial portion.  The allowance for the convention center area would be 10,000 square feet but they are flexible. 

          The group agreed that it is a good project and would like further details, such as revising the financing taking out the convention center portion and replacing with           commercial retail space.  After Modev’s meeting with MMCDC, the whole financing request could be changed so more solid information is needed.  They are in favor of a pay as you go TIF  with a maximum of $1,325,000 and would like to see the financial revision source and uses based upon a mixed retail and residential project.  More solid information is needed.  The Authority will place this item on the agenda for the next meeting.

B.      Consideration to the use of a QZAB Fund Loan @ 4% for the acquisition of the Floral Impressions property

C.      Consideration to converting the PU Loan @ 7% to a QZAB Fund Loan @ 5%

          A motion was made by Commissioner  Mark Hagen, seconded by Commissioner Marty Beth Gilsdorf and carried unanimously combining item B & C to use $620,000  at 5.77% interest only both maturing in June of 2014 of the QZAB Fund for the acquisition of the Floral Impression’s Property and for the conversion of the Public Utilities Loan to a QZAB loan.  Motion carried.

VI.     Adjournment

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

                                                                             Signed                                                                                                                                                                                                                                                                                    Larry Remmen 
                                                                            Community Development Director