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HomeMy WebLinkAbout03-09-1998 EDA MinutesCITY OF LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY MINUTES DATE: March 9, 1998 MEMBERS PRESENT: K. Sullivan, C. Lyden, J. Bergeson, A. Neal, C. Dahl MEMBERS ABSENT: None OTHERS PRESENT: B. Wessel, R. Batty, M. Divine CONSIDERATION OF MINUTES EDA Member Neal moved to approve the minutes of October 13, 1997. EDA Member Bergeson seconded the motion. Only two current members of the EDA were present at that meeting. Motion passed with Lyden, Dahl and Sullivan abstaining. CONSIDERATION OF ANNUAL APPOINTMENTS Mr. Wessel explained to the board that the EDA by-laws require the EDA elect a president, vice president, secretary, treasurer and assistant treasurer. The EDA should also appoint a new executive director to replace Randy Schumacher. EDA Member Sullivan asked if the city administrator position could be appointed to executive director, without specifically appointing Dave Pecchia, interim city administrator. Mr. Batty said yes, the position could be named so that the new city administrator would automatically assume the position. EDA Member Neal moved to appoint EDA Member Sullivan as president, EDA Member Dahl as vice-president, EDA Member Neal as Treasurer, Ms. Divine as secretary, Marilyn Anderson as assistant treasurer, and the position of city administrator as executive director. EDA Member Lyden seconded the motion. Motion passed unanimously. CONSIDERATION OF EDA OFFICIAL NEWSPAPER Mr. Wessel explained the EDA is required to publish public notices and needs to designate an official newspaper. EDA Member Bergeson moved to approve the Quad Community Press as the official newspaper. EDA member Dahl seconded the motion. Motion passed unanimously. CONSIDERATION OF OFFICIAL DEPOSITORIES Mr. Wessel explained that on occasion the EDA and the city have financial transactions and the EDA will need official depositories. EDA Member Lyden moved to approve Norwest Bank, First Bank NA, Firstar Bank, Merrill Lynch, Dain Bosworth, Juran and Moody, and Prudential Bache. EDA Member Dahl seconded the motion. Motion passed unanimously. CONSIDERATION OF CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN LINO LAKES EDA AND NOL-TEC, INC. Mr. Wessel explained that in 1996 the EDA approved a development agreement with Nol- Tec to build a 16,000 square foot facility in the Apollo Business Park. In the agreement, TIF was used to pay for 1.6 acres and all the assessments. Nol-Tec paid for the remaining 1.4 acres of the 3-acre parcel. The agreement the city made with Nol-Tec was that TIF would be used to subsidize the remaining 1.4 acres if the company expanded. The company is now planning to double the size of its Lino Lakes facility. This decision is based, in part, on the commitment of $54,000 in additional pay-as-you-go TIF to pay for the remaining 1.4 acres. This expansion will increase the industrial tax base and provide the capacity for 25 additional high -quality jobs. This development contract between the EDA and Nol-Tec outlines the conditions for public assistance for the additional TIF. In this agreement, the city will continue to be reimbursed for assessments first from available tax increment, and Nol-Tec will be reimbursed the additional $54,000 from the remaining available tax increment. Payback on the entire project will be complete in 2004. EDA Member Bergeson asked when the original payback was to occur. Ms. Divine said it was scheduled to go on the tax rolls in 2004, the same as with the expansion. The additional increment from the expansion would pay for the additional TIF. EDA Member Bergeson moved to approve the development contract. EDA Member Lyden seconded the motion. Motion passed unanimously. CONSIDERATION OF AGREEMENT RELATING TO DEVELOPMENT CONTRACT AND MORTGAGE FINANCING, F&G, INC. Mr. Wessel explained that in 1997 the EDA entered into a development agreement for financial assistance with F&G, Inc. regarding a project within TIF District 1-7, the Apollo Business Park. The agreement called for the construction of two buildings in 1997, and a third in 1998. The first two buildings have been completed and the developer has arranged for a permanent mortgage on the project. The development agreement contains a provision which prohibits any liens (including a mortgage) against the property without the EDA's permission, if the project is not complete. Because the development agreement also calls for construction of a third building, which has not yet occurred, the EDA's permission for financing is necessary. This agreement focuses on two matters. It partially subordinates the EDA's development agreement with F&G, Inc. to the new financing. This means that the new mortgage will be treated as if it had been recorded prior to the development agreement. The EDA's position with the developer will remain unchanged, and none of the EDA's significant protections will be weakened by this action. The second matter in the agreement concerns various representations about what has or has not happened with regard to the project. The lender is asking the city for assurance that there have been no violations of the development agreement. Staff and legal counsel have reviewed the representations. The project has gone very well, the buildings are 100% occupied with excellent tenants, and, to staffs knowledge, there are no defaults or violations. According to legal counsel the agreement is reasonable and represents standard procedure for refinancing. EDA member Bergeson moved to authorize the president and executive director to execute the agreement. EDA Member Neal seconded the motion. Motion passed unanimously. ADJOURNMENT EDA Member Neal moved to adjourn. EDA Member Dahl seconded the motion. Meeting adjourned at 6:20 p.m.