Minutes
of the
Regular Meeting Of
DETROIT LAKES DEVELOPMENT AUTHORITY
Tuesday, July 26th, 2005
4:30 PM
Conference Room
City Administration Building
MEMBERS PRESENT: Dixie Johnson, Tom Klyve, Tim Olson and Jim Anderson,
MEMBERS ABSENT: Greg Hildenbrand, Mark Hagen and Matt Brenk
OTHERS PRESENT: Larry Remmen, Steve Anderson, Dan Hagen, Jerry Schitz and Tom Mack
I. Call To Order:
Chairman Dixie Johnson called the meeting of the Detroit Lakes Development Authority to order at 4:30 PM in the Public Utilities Conference Room of the City Administration Building, 1025 Roosevelt Avenue on Tuesday, July 26th 2005. All members of the Authority having 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 Jim Anderson and carried unanimously to approve the minutes of the regular meeting held July 12th 2005 as presented.
III. Financials:
A. None
IV. Old Business:
A. Old Business was deferred until later in the meeting.
Consideration to the request f Marine Innovations for a 75,000 loan and a the lease of a 13,000 square foot building
Larry Remmen reminded the Board that this request was discussed two weeks ago. The applicant provided the additional information requested including a personal financial statement and personal tax return. Based on this information, it appears that personal guarantees would not be very meaningful for backing a loan. Larry Remmen also stated that he has asked builders for quotes on a building based on the information provided by Marine Innovations. It appears that based on the preliminary information, the 6,000 rent to own payment could possibly work. If a lease is drafted that is really tight, it certainly is possible to do a building lease since we would own the building even if they default on the lease.
Other members of the board stated that they were willing to enter into this type of arrangement. Tom Klyve expressed his view that he would like a buy out in three to five years. Larry Remmen stated that Marine Innovations would probably want a five to ten year lease.
The loan could be granted subject to approval and sale through MCCF which means we would sell the loan and any default would become the risk of the company that bought the loan.
Jim Anderson asked if this building was within the size range we like to do. Larry Remmen reported that our past spec buildings have been 25,000 square feet but we have discussed 10,000 square foot buildings. My preference is for the larger size; however, a small building can work.
Marine Innovations is currently operating out of 6,000 square feet in Frazee. The Board discussed some details of a possible lease agreement with Marine Innovations including the following:
1) Triple net lease;
2) Term of lease- five years;
3) Amortization-To be determined 15 to 20 years
4) Interest Rates-Based on our cost of money;
It was noted that the IDC will be asked to participate in this project. A motion was made by Commissioner Jim Anderson to direct staff to negotiate a lease and bring it back to the Development Authority for final approval. Commissioner Tim Olson seconded the motion, which carried without dissent. Commissioner Tom Klyve abstained from the vote.
A motion was made by Commissioner Jim Anderson, seconded by Commissioner Tim Olson and carried without dissent (Tom Klyve abstaining) to recommend a 75,000 loan for this project, subject to approval and sale by MCCF.
V. New Business
A. Consideration to the request of the Becker County Humane Society relative to the lot the Development Authority agreed to give to the Society
Steve Anderson, President of the Becker County Humane Society stated that the County Board has denied Industrial Zoning for this property and they have also denied a Conditional Use Permit for the Humane Society. This means the lot which the Development Authority so generously donated can not be used to build the facility the Humane Society would like to build. The Humane Society is requesting a deed for the property along with the ability to exchange it or sell it in order to acquire land they can build on. The County Planning Commission viewed this as a stepping stone for the City to get this are zoned for industrial use.
Members of the Authority discussed the request. A motion was made by Commissioner Jim Anderson, to plat the lot and prepare a deed with the following deed restrictions:
1) The lot is not buildable until it is annexed to the City of Detroit Lakes and zoned either industrial or residential at the discretion of the Detroit Lakes Development Authority.
2) The owner of this property will sign a petition for annexation at the request of the Detroit Lakes Development Authority.
A motion also included both parties entering into an agreement clarifying this transaction and requiring any party that is intending to acquire this lot by sale or trade meet with the Development Authority representatives prior to said sale or trade.
The motion was seconded by Tim Olson and carried without dissent. Tom Mack stated that as a resident of this are, he wanted this property to be residential and not industrial.
B. Public Hearing & Consideration To Amending TIF District 8-15 Relative To A 24 Unit Apartment Development
Chairperson Dixie Johnson opened the public hearing. Larry Remmen reported that Pelican River Heights LLC was requesting $324,000 in tax increment financing assistance for a 24 unit apartment building. Harold Jesh, representing Pelican River Heights LLC, stated that the project would have 4) 1 bedroom units 17) 2 bedroom units and 3) 3 bedroom units. There was no public comment and the hearing was closed.
A motion was made by Commissioner Jim Anderson, seconded by Commissioner Tim Olson and carried unanimously to approve the amended TIF Plan for TIF District 8-15 and to approve entering into a Development Agreement with Pelican River Heights LLC for this project. Commissioner Tom Klyve abstained from the vote.
VI. Adjournment
There being no further business to bring before the Board, the meeting was adjourned.
Signed
Larry Remmen
Community Development Director