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HomeMy WebLinkAbout04-13-2009PROCEEDINGS OF THE MOUNDS VIEW EDA CITY OF MOUNDS VIEW RAMSEY COUNTY, MINNESOTA Regular Meeting April 13, 2009 Mounds View City Hall 2401 Highway 10, Mounds View, MN 55112 6:03 P.M. 1. CALL MEETING TO ORDER 2. ROLL CALL: President Flaherty, Vice President Stigney, Commissioner Hull, Commissioner Mueller, Commissioner Gunn, and Executive Director Ericson. NOT PRESENT: None. 3. APPROVAL OF AGENDA MOTION/SECOND: Mueller/Hull. To Approve the April 13, 2009, Agenda as presented. Ayes – 5 Nays – 0 Motion carried. 4. PUBLIC INPUT None. 5. APPROVAL OF MINUTES A. EDA Minutes, Monday, February 23, 2009. The following correction was requested: Page 2, Reports, Line 52, “Economic Development Specialist Steinmetz stated the EDC appreciates that the Council will consider these priorities.” MOTION/SECOND: Mueller/Gunn. To Approve the Monday, February 23, 2009, Minutes as corrected. Ayes – 5 Nays – 0 Motion carried. 6. CONSENT AGENDA None. 7. EDA BUSINESS A. Resolution 09-EDA-252, Approving First Amendment to Development Assistance Agreement between Mounds View Economic Development Authority and MoundsVista, Inc. Mounds View EDA April 13, 2009 Regular Meeting Page 2 Economic Development Specialist Steinmetz presented the past consideration of the MoundsVista, Inc. (dba The Mermaid) TIF revenue bond agreement for assistance of $631,897 and request to modify the Development Assistance Agreement to allow for the sale of the hotel and continuation of semi-annual payments to the bondholders. In response to the suggestion that MoundsVista pay off one-third of the outstanding balance of the bonds, they indicated they are not in a financial position to do so. Economic Development Specialist Steinmetz presented staff’s recommendation to approve the first amendment to the Development Assistance Agreement, allow for the sale of the hotel, and continuation of semi-annual payments to the bondholders. If approved, the Council will consider the final plat to divide the property into one lot for the hotel and a second lot for the restaurant and banquet center. President Flaherty opened the floor for public comment. None was offered and it was noted the applicant was not in attendance. Commissioner Mueller noted if they wish to sell, the contract requires payment of the bond note. Economic Development Specialist Steinmetz explained the MoundsVista attorney alluded to that requirement; however, the contract does not contain such a requirement. In early negotiations between staff and MoundsVista, several options were discussed but MoundsVista has clearly indicated they need to sell the hotel and transfer those funds to their other property. In addition, when the final plat is recorded, Ramsey County will require payment of taxes. Vice President Stigney referenced a letter from the MoundsVista attorney indicating their intention to sell only the hotel and that the Agreement requires payment in full of the note if any portion of their property is sold. Executive Director Ericson clarified that the letter from the MoundsVista attorney is incorrect because there is no such requirement in the Development Assistance Agreement. Executive Director Ericson stated the EDA is under no requirement to amend the Agreement but if an amendment is considered, the EDA can place a condition for partial or full payment of the bond note. Vice President Stigney stated his understanding the Agreement may not “require” payment but the EDA can place that condition. He indicated he had asked staff to negotiate at least partial payment in consideration for an amendment so the TIF District is reduced in some manner. Commissioner Gunn stated even if they don’t pay down the note, payments will continue and all that would be accomplished by payment of one-third of the note is to move up the District’s close date. She noted that a lot is owed in back taxes, which may be equivalent to the one-third amount. Economic Development Specialist Steinmetz stated she is not aware of the amount of back taxes owed. Commissioner Gunn stated a willingness to approve the amendment since the TIF District will continue, she would like the business to stay in Mounds View, and if approved they would be able to pay their current and back taxes. Commissioner Hull stated support to consider the amendment with no contingencies since it would result in the hotel being sold, The Mermaid would be in a better financial position, Mounds View EDA April 13, 2009 Regular Meeting Page 3 expansion of the hotel would occur to increase the value and tax base, and additional jobs may be created. Currently, it would be a burden on The Mermaid if required to pay one-third of the bond note. Vice President Stigney stated that expanding the tax base will not matter until the TIF District is paid off. He stated support to shorten the life of the TIF District and pointed out that no information has been provided regarding The Mermaid’s financial position so he is not able to consider that matter. He stated he is not in favor of an “all or nothing” position but would like to know what MoundsVista will offer to accomplish the amendment. Commissioner Mueller noted that one bondholder has indicated no objection to not paying off the bond and the other bondholder has indicated they want to be bought out. Economic Development Specialist Steinmetz explained that when MoundsVista was considering an earlier amendment, Western Bank indicated a willingness to buy out First Bank. However, noting has been submitted in writing to confirm that remains the case. President Flaherty stated he had hoped The Mermaid owners would be in attendance to answer questions. However, they did relate to staff that they are unable to pay off one-third of the bonds. He noted that The Mermaid is a struggling business, they are making attempts to gain solvency, and that revenue may be needed to pay property taxes. President Flaherty asked whether Mounds View assumes any risk by modifying the Agreement. Executive Director Ericson stated it would not. President Flaherty asked what is the benefit to retire a portion of the District. Executive Director Ericson explained the EDA can selectively decertify parcels but could not decertify any Mermaid parcels while a TIF note is associated with those parcels. The drawback is that the TIF dollars otherwise generated on those parcels would no longer be available for street and utility projects and the City’s budget anticipates those dollars will be available. Vice President Stigney stated again he would like to know what MoundsVista is willing to do if the EDA considers the requested amendment. He noted when the hotel expansion occurs, they may request it to also be in the TIF District. President Flaherty commented on the importance of balancing the needs of the City with the needs of the property owner. He stated he would take that stance for any Mounds View business, not just The Mermaid. Commissioner Gunn stated she had asked for written confirmation from the bond holders in addition to other information. She stated she is willing to table consideration until that confirmation is received. Commissioner Mueller stated she would like to hear from the business owners before the EDA makes this decision. Mounds View EDA April 13, 2009 Regular Meeting Page 4 Commissioner Mueller noted there may be timing issues because license renewals are coming due for The Mermaid and one condition for renewal is being current on tax payments. President Flaherty noted The Mermaid owners had just arrived and asked Mr. Hall to address the questions raised why MoundsVista was not able to pay off one-third of the bond note. Dan Hall, 2200 Highway 10 and owner of The Mermaid, explained that they do not have funds available to pay the note early. He stated they have placed personal guarantees so the City will not be out any money and bringing in another owner for the hotel assures there will be no shortfall in taxes so the TIF payments can be made. Mr. Hall stated this is a calculated move to solidify their business and there is no reason to accelerate the note payments since their request is miniscule in the broad scope of things and does not place a burden on Mounds View. Commissioner Mueller asked how many people MoundsVista presently employs. Mr. Hall stated they average 150 employees with 125 during summer months and up to 175 during the holiday season. They have 65-70 full-time employees. The new prospective owner wants to construct an addition to the hotel, which would increase property taxes paid. Commissioner Mueller asked about the property value on which the TIF note was originated. Mr. Hall stated it was $8.4 million to $8.6 million and their property taxes just increased by 10% so he does not believe the property value will go down if this passes. Vice President Stigney asked what they would be willing to do. Mr. Hall stated he cannot afford to pay on the note, his family still personally guarantees payment of the TIF, and Mounds View would not have any additional burden. Vice President Stigney asked if The Mermaid will go bankrupt if no TIF payment is made on the hotel parcel. Mr. Hall stated he does not want to use the word “bankruptcy” but he is out of money and this sale will put money back into the coffers of The Mermaid. He advised they have not paid property tax from last fall because they do not have the money. Vice President Stigney asked if they can submit supportive documentation of The Mermaid financials to show that is the case. President Flaherty stated The Mermaid is trying to make a sale to gain solvency and if any portion of the TIF bond is required, even 1/10th, it would come from operating revenue. Mr. Hall stated it would come from money needed to pay delinquent and current taxes. He pointed out that if taxes are not paid, he will not be able to obtain a liquor license. Commissioner Hull stated that 1/6th would be $68,000 and if Mounds View needs it that bad, it should close its doors. He stated he has no problem with the amendment approval without contingencies because The Mermaid is an excellent business and hires many people including residents. Mounds View EDA April 13, 2009 Regular Meeting Page 5 MOTION/SECOND: Gunn/Hull. To Waive the Reading and Approve Resolution 09-EDA-252, Approving First Amendment to Development Assistance Agreement between Mounds View Economic Development Authority and MoundsVista, Inc. Commissioner Mueller asked when the closing date would be if this is approved without requirement for advance bond payment. Mr. Hall stated the scheduled closing is April 30, 2009, and the buyer owns seven other hotels in the Twin Cities area. The appraisal will be completed this Wednesday. Commissioner Mueller asked if property taxes will be paid by May 15 if the sale does not go through. Mr. Hall stated taxes would not be paid. President Flaherty stated this business is attempting to reorganize to be more viable and payment of taxes is an important consideration. He stated he would consider the same action for any business in Mounds View that came before the Council. Vice President Stigney noted that Mr. Hall has indicated that he cannot pay 10% or the deal would fall through. Mr. Hall stated he did not make that implication. Vice President Stigney stated the motion establishes a precedence by granting a request of a business and its offering absolutely nothing to the City. He noted the tax payers would gain benefit if the TIF District is shortened. Mr. Hall suggested that would be a windfall for the taxpayers since the money would come from his pocket. Vice President Stigney stated if they cannot support 10% then he questions whether the business is even viable. President Flaherty stated he understands it would not stop the project from moving forward but could impact The Mermaid’s operation, future hiring, and cause a possible reduction in staff. AMENDMENT MOTION/SECOND: Stigney/Mueller (for discussion purposes). To Waive the Reading and Approve Resolution 09-EDA-252, Approving First Amendment to Development Assistance Agreement between Mounds View Economic Development Authority and MoundsVista, Inc., as amended to require a minimum 10% payment of the one-third TIF bond, which gives the taxpayers some benefit. Vice President Stigney stated he has seen no written documentation supporting Mr. Hall’s comments about their financial insolvency. Commissioner Mueller stated she understands the desire for “give and take” by both parties but when she thinks about the jobs involved and the business owner coming before the EDA with a “cry for help,” the $13,666 (10% of one-third) will not make that great of an impact to the City’s budget. However, it could make a great impact to the jobs of the employees at the business. Commissioner Mueller stated she would like to see some “give and take” in the negotiation but this business has been creatively trying to solve fiscal issues during difficult economic times to stay afloat in an entertainment business. She stated the EDA needs to see some “gray” between Mounds View EDA April 13, 2009 Regular Meeting Page 6 the “black and white” so she does not favor the amendment. Ayes – 1 (Stigney) Nays – 4 Amendment failed. Ayes – 4 Nays – 1 (Stigney) Motion carried. RECESS AND RECONVENE MOTION/SECOND: Mueller/Gunn. To recess the EDA at 7:08 p.m. so the Council meeting can be called to order. Ayes – 5 Nays – 0 Motion carried. President Flaherty reconvened the EDA meeting at 7:28 p.m. B. Adopt Brand Strategy and Select New City Logo. Economic Development Specialist Steinmetz presented staff’s recommendation to formally adopt the final Brand Strategy developed by Risdall Marketing. She read the Brand Promise and advised the objectives and recommendations are included in the Brand Strategy. MOTION/SECOND: Mueller/Gunn. To Approve Adoption of the Brand Strategy and Recommendations. Commissioner Mueller stated her support for Objective #5 addressing active and healthy lifestyles, including the creation of a Mounds View Garden Club. President Flaherty read the five objectives contained in the Brand Strategy aloud. Objective One - Develop a new look and tagline Objective Two - Keep residents and businesses informed Objective Three – Capitalize on the County Road 10 corridor Objective Four – Develop a long rang vision for future development Objective Five – Support active and healthy lifestyles Vice President Stigney noted the Risdall Marketing work cost $23,000 and no funds have been budgeted to implement this plan. He stated he does not support that expenditure or the motion on the floor. Commissioner Mueller stated that she doesn’t want the public thinking that it cost $23,500 for a few objectives. She asked Ms. Steinmetz to explain what the City received for the contract amount. Ms. Steinmetz explained that so far the City received resident and business surveys, a research report and a logo. They City will also receive a tagline and a marketing/communications plan in the next few weeks. Mounds View EDA April 13, 2009 Regular Meeting Page 7 Ayes – 4 Nays – 1 (Stigney) Motion carried. Economic Development Specialist Steinmetz stated the EDA is also asked to choose the final logo design. She reviewed that seven logo designs had been submitted for consideration at April 2, 2009 Workshop. Commissioner Mueller noted the City paid for professional branding which involved a lot of work, research, and surveying of residents and businesses. Economic Development Specialist Steinmetz reviewed the history of the brand strategy consideration and detailed the steps taken by Risdall Marketing during its survey and research reports and creation of logo designs and taglines. A Communications Plan will also be developed to define how the City can better communicate with its residents and business owners. Economic Development Specialist Steinmetz stated it is correct that money was not budgeted to phase in a new logo design; however, it is the intent to first deplete the stationary and supplies on hand and staff will research corporate sponsorship to cover implementation costs. Patrick Bettenburg, Risdall Marketing Project Manager, stated the new logo will create a new identity for Mounds View. He presented the three final logo designs and explained the modifications made to each. Community Development Director Roberts noted visual samples were also provided of street signs and the water tower showing each logo. Commissioner Hull stated support for Option 2. Commissioner Mueller stated support for Option 2 with the lettering remaining black and the lines green. Commissioner Gunn stated supported for Option 2, especially after seeing how it would appear on the water tower. Vice President Stigney stated he likes Option 1 with heavier lettering because it is more artistic and not the same classic design (Option 2) used by all other cities. Economic Development Specialist Steinmetz stated in January of 2008, the EDC began the branding project and had presented recommendations to the EDA. Also, an article was included in the Mounds View Matters inviting resident participation. Two residents, Val Amundson and Cindy Carvelli, responded and were helpful during the process. EDC members offered comment on the logo designs. Val Amundson, 3048 Woodale Drive, noted the survey found that residents believe that Mounds View is a fun community. She found Option 2 to be more “business” or “stuffy” in design so she Mounds View EDA April 13, 2009 Regular Meeting Page 8 supports Option 1 with tweaks to make it more outstanding. She also felt a tagline would fit nicely under the arched bottom line. President Flaherty stated support for Option 1 if tweaked to make the design more bold. Mr. Bettenburg stated the final art phase will fine tune those tweaks; however, use of a different font would change the impact. MOTION/SECOND: Mueller/Hull. To Approve Logo Design Option 2, which will be unveiled at the Town Hall meeting, and to direct staff to work with Risdall Marketing to fine tune the design. Vice President Stigney stated he found Option 2 to be “corporate” and “stuffy” in appearance and Option 1 to be more free-flowing and relaxed. He stated he does not support Option 2 and suggested resident input be received at the Town Hall meeting prior to a final decision. Ayes – 4 Nays – 1 (Stigney) Motion carried. Mr. Bettenburg stated taglines will be developed with the Marketing/Communications Plan. 8. REPORTS None. 9. NEXT EDA MEETING: Monday, April 27, 2009 10. ADJOURNMENT President Flaherty adjourned the meeting at 8:01 p.m. Respectfully submitted, Recorded and transcribed by: Carla Wirth TimeSaver Off Site Secretarial, Inc.