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Home My WebLink About3.A. EDA Minutes 11111116111 Consent Business 3. A. SHAK.OPPEE TO: Economic Development Authority FROM: Julie Linnihan,Finance Director/City Clerk DATE: 10/21/2014 SUBJECT: EDA Minutes Action Sought Move to approve the EDA minutes from September 16,2014 and October 7,2014. Attachments: 09-16-14 Minutes 10-07-14 Minutes OFFICIAL PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY REGULAR SESSION SHAKOPEE MINNESOTA SEPTEMBER 16,2014 Present: President Matt Lehman;Commissioner Brad Tabke; Commissioner Kathi Mocol;Commissioner Mike Luce; Commissioner Jay Whiting Staff City Administrator Mark McNeill;Community Development Director R.Michael Leek;Public Works Present: Director/Engineer Bruce Loney;Finance Director/City Clerk Julie A Linnihan;Economic Development Coordinator Samantha DiMaggio;City Attorney Jim Thomson 1. Roll Call 2. Approval of the Agenda Moved by Kathi Mocol,seconded by Jay Whiting to approve the agenda. Vote: 5 -0 Carried 3. Consent Business A. EDA Minutes Moved by Jay Whiting, seconded by Brad Tabke to approve the EDA minutes of August 19,2014. (Motion approved under the Consent Agenda) Vote: 5 -0 Carried B. EDA Bill List Moved by Jay Whiting,seconded by Brad Tabke to approve bills in the amount of$ 14,035.38 for the EDA Fund. (Motion carried under the Consent Agenda) Vote: 5 -0 Carried 4. General Business A. Approval of Resolution No.2014-4,A Resolution Authorizing the Establishment of a Policy and Procedures for the Commercial Exterior Improvement Program. Ms.DiMaggio said the that due to lack of use,the Facade Program was recommended for modification and renaming by the EDAC. A new Commercial Exterior Improvement program was then adopted by the EDA on September 17,2013. Although program modifications were made, a formal written policy was not adopted.The EDAC reviewed and made revisions to the formal policy. Ms. DiMaggio discussed the criteria for the policy and the application process as well as provided the following loan amounts and terms. AMOUNT LOAN TERM up to $25,000 5 years $25,001 - $35,000 7 years $35,001 - $50,000 10 years $50,001 -$75,000 15 years 1$75,001 - $100,000120 years Commissioner Tabke asked the EDA to consider an application process where business owners would need to have applications in by March. The EDA could then prioritize projects using the money in the best possible way moving forward. Moved by Brad Tabke,seconded by Mike Luce offer Resolution No. 2014-4,A Resolution Authorizing the Establishment of a Policy and Procedures for the Commercial Exterior Improvement Program as presented. Discussion followed. President Lehman suggested an amendment to not allow a business,that currently has a Commercial Exterior Improvement loan,to apply for another loan until they fulfilled the first loan term. Commissioner Tabke does not agree with the amendment and gave circumstances to support his argument. He would be willing to entertain a cap of$100,000. Vote: 4- 1 Carried Opposed: Matt Lehman Moved by Jay Whiting,seconded by Matt Lehman to amend the motion to include that an applicant that has an outstanding loan cannot exceed a total loan amount of$100,000 in multiple years. Discussion followed. President Lehman has concerns of businesses continuously asking the EDA to provide loans. Ms. DiMaggio suggested that the EDA not approve loans higher than the property is worth. President Lehman stated he doesn't agree that government should be loaning money out to improve private property. Commission Luce believes there should be a$100,000 cap as long as the owner owns the building. Mr.McNeill clarified that the motion states that if a business can ask for a commercial Exterior Improvement loan up to$100,000. If the business is over$100,000,the business would not qualify for any additional money. If the business is given a loan under$100,000 additional loan(s)could be considered up to$100,000. President Lehman withdrew his second because he disagreed on the motion. Vote: 4- 1 Carried Opposed: Matt Lehman Moved by Jay Whiting,seconded by Kathi Mocol to amend that the use of the$100,000 loan is only used in extreme cases and only when it's of great public benefit. Discussion followed. Cncl. Lehman asked for clarification of what public benefit means. Cncl. Whiting said said the pet store would be an example. The idea of the program is to help people fix up their buildings and not to be putting out$100,000 all the time. Commissioner Tabke called the question. Vote: 4- 1 Carried Opposed: Matt Lehman B. Consideration of a Commercial Exterior Improvement Program Loan for the Scott County Development Agency(CDA) Ms.DiMaggio said the Scott County Community Development Agency(CDA)has requested assistance in the form of a forgivable/deferred loan from the City's Commercial Exterior Improvement Program to partner in the exterior improvements of the River City Center and it's tenants which include The Haven Chemical Health,CA Nails, Saks Salon on First,and Paragon Bank. The River City Center is located at 275 First Avenue East, Shakopee,MN. If the application is approved,the following work will be done: •Purchase and installation of new awnings •Brick Repair/Restoration Two estimates were received:the first was for$420,396 and the second was for$832,198. The program covers 50%of the total costs or a maximum amount of$15,000. Due to the extensive renovation costs exterior of this property and the number of businesses occupying this building,the CDA is requesting a deferred/forgivable loan in the amount of$60,000. The Commercial Exterior Improvement Committee met on Thursday, September 11,2014 and recommended the forgivable loan be approved in the amount of$15,000 for the purchase of new awnings and exterior painting. Commissioner Whiting asked why the EDA would consider giving a loan to the CDA which is a government entity. He also stated that the age of the building doesn't qualify for the criteria of the newly adopted Commercial Exterior Improvement Program. Moved by Kathi Mocol,seconded by Mike Luce to deny a Commercial Exterior Improvement Loan in the recommended amount of$15,000 to the CDA. Vote: 5 -0 Carried C. Consideration of a Commercial Exterior Improvement Program Loan for Booyaah Properties,LLC Ms. DiMaggio said Booyaah Properties,LLC has requested assistance in the form of a deferred loan from the City's Commercial Exterior Improvement Program for the property located at 321 1st Avenue West, Shakopee,MN.If the application is approved,the following work will be done to the exterior of the building: •Roof Replacement •Koncote and Cultured Stone Application Two estimates were received:the first was for$70,803 and the second was for$77,330. Booyaah Properties,LLC is requesting a deferred/forgivable loan in the amount of$35,401.50 which is half of the low estimate. This property is currently vacant but the building owner feels the improvements will help secure a tenant for the property. The Commercial Exterior Improvement Committee met on Thursday, September 11,2014 and recommended this forgivable loan be approved in the amount of$25,000. Moved by Jay Whiting,seconded by Mike Luce to approve a Commercial Exterior Improvement Loan in the recommended amount of$25,000. The EDA should also authorize the appropriate officials to enter into Repayment Agreement with Booyaah Properties,LLC,321 1st Avenue West, Shakopee. Vote: 4- 1 Carried Opposed: Matt Lehman D. Consideration of Commercial Exterior Improvement Program Loan for Shakopee One26 1st St.,LLC Ms. DiMaggio said Shakopee One26 1st St.,LLC has requested assistance in the form of a deferred/forgivable loan from the City's Commercial Exterior Improvement Program. If the application is approved,the following work will be done to the exterior of the building: •Purchase and installation of new doors and windows •Roof Replacement • Structural Repair Two estimates were received:the first was for$223,700 and the second was for$233,650.Due to the extensive renovation costs associated with both the interior and exterior of this property, Shakopee One26 1st St,LLC is requesting a deferred/forgivable loan in the amount of $105,000. The Commercial Exterior Improvement Committee met on Thursday, September 11,2014 and recommended this forgivable loan be approved in the amount of$105,000 for the renovations of the property. Scott O'Brien, owner of the building addressed Council,and stated he does not own the building but has it under contract. He stated that the building needs significant cleanup and rehabilitation due to the significant mold and asbestos. The facade needs extensive rehabilitation also . Moved by Kathi Mocol,seconded by Jay Whiting to approve a Commercial Exterior Improvement Loan in the recommended amount of$105,000 and authorize appropriate officials to enter into Repayment Agreement with Shakopee One26 1st St.,LLC, 126 1st Street, Shakopee.Discussion followed: Commissioner Luce asked about$100,000 cap that was previously approved. Jim Thomson,City Attorney,also understood that the policy previously approved had a$100,000 cap but the EDA has the authorization to approve what they see fit. Commissioner Tabke also agreed upon the$100,000 cap. Commissions Mocol and Whiting agree to amend the motion to recommend the amount$100,000. Vote: 4- 1 Carried Opposed: Matt Lehman 5. Adjourn to Tuesday,October 21,2014 at 7:00 p.m. Moved by Brad Tabke,seconded by Kathi Mocol to adjourn to Tuesday,October 21,2014 at 7:00 p.m. Vote: 5-0 Carried Julie A Linnihan Finance Director/City Clerk Kim Weckman Recording Secretary