REGULAR MEETING
ECONOMIC DEVELOPMENT AUTHORITY
May 13, 2011
12:00 NOON
PRESENT: Vern Peterson, Mark Hanson, Audi Nickel, Jerry Haberman, Brian Harder, Dean Janzen, Steve Syverson and Clara Johnson, Advisory
ABSENT: Jim Sneer and Jaque Radtke, Advisory
STAFF PRESENT: Rob Anderson
CITY ADMINISTRATOR: Wendy Meyer
GUESTS: Brent Hanson; Ron Veenker-Balzer
1. Call to Order: Mark Hanson
2. Consent Agenda. Addition to agenda is Brent Hanson loan application. Motion made and seconded by Audi and Brian to approve the consent agenda with the addition of the loan application. Carried.
3. Hanson Plumbing Loan request: Brent is buying the back part of the old Jungas building is he would like a loan from the Small Cities fund to remodel it for his shop for the plumbing business. The total project cost would be $17,546.00 and the repayment requirements on the loan would be 1/3 loan, 1/3 forgivable loan and 1/3 equity. Motion was made by Brian and seconded by Audi to approve the loan as presented. Carried.
4. Balzer loan request: Balzer is asking for money to purchase new equipment. The total project cost is $900,000.00. They are requesting a loan from the EDA in the amount of $250,000.00. They have secured a bank loan and also have company equity. The new equipment would bring currently out sourced work back into the company. They are requesting terms of interest at 2 ½% for 12 years. The monthly payment would be $2,011.32. Several questions were asked Ron V. about Balzer and the other entities they have created and also the future of the business. Ron was then excused from the meeting for a short period while the board discussed some issues. The board would require collateral and the note would be due and payable if the business is sold and also personal guarantees from the owners. Ron was invited back in to the meeting. A motion was made by Vern and seconded by Audi to approve the loan for $250,000.00 at 2 ½% for 12 years and to use the same language as the bank for guarantees with the other entities of the company. Carried.
5. Delinquent loans: Chuck Wolle has agreed to pay of the note if we would accept $1,000.00. The board agreed. Dave Dodge loan-still not able to contact him yet. If we can’t get him to respond, we could write off the note. There was brief discussion about rumors of Dave selling his business to his son. This can’t be done legally until we are paid off.
6. BB’s Diner. They are ready to go to the bank for refinancing. Rob asked if the EDA would be open to help with the refinancing on $45,000.00 (includes CD in the amount of $30,000.00 and $15,000.00 short term note). More discussion by the board led to discussion about Parkside Depot’s status. After more discussion the board stated they would like to see a business plan before they would agree to it but they are open to the idea.
7. Hardline Asphalt/Loan Status. Loan closing has been postponed due to some financial issues but will still move forward as soon as the legal issues are cleared up. The EDA will be paid in full when this is completed.
8. Custom Motors: payment was received in the amount of $4,250.00 from a vendor of Custom Motors. Rob showed the board how the payment was applied to the rent and loans. A new lease was signed for a year. Rob stated that he received word that Bill’s wife Lisa was hospitalized but he will be in on Monday to pay the rent and loan payments. Discussion ensued. No action.
9. Good Sam Update: Rob talked about the project update. USDA financing won’t be available now. They are asking the City to issue GO bonds and TIF financing. City has authorized them to put a plan together. Construction could start this year if all goes well. Bill Freitag is interested in the Eventide Suites building. He is looking at financing options for the building. Good Sam is willing to give the property to the City or EDA.
10. Garrett Wall has resigned as maintenance person for our apartments. We are trying to find a replacement for this position.
11. MSC-potential expansion: They are talking to Balzer’s about possibly purchasing some property owned by Balzer for their expansion and asking Bill Freitag to be the developer. The city will help if needed. Bill Freitag has now indicated that the project is on hold right now so not sure when it will happen.
12. Watonwan Enterprises-balloon on loan due July 1st: They will need to refinance the loan and would like the same terms. The board would like to see a financial statement from them.
13. King Eggroll possible sale: Business may have a new owner soon and they are interested in EDA assistance. Currently the sale is off as the current owner is unwilling to share his tax returns. Discussion took place but no action.
14. GENERAL DISCUSSION:
a. Chamber Shop Local campaign update- Campaign is just getting started with 5 businesses involved. EDA money has been put towards advertising this program. Program will be reviewed in 6 months to see how things are going and if anything needs to be changed.
b. Downtown is looking good with the pavers being installed in the Memory Park.
c. Discussion about Lakeview Estates lots ensued. Some felt the covenants need to be changed to allow spec homes or cheaper housing. There was also discussion about possibly trying to sell Heritage Estates apartments. No action. More discussion about housing in Mt. Lake continued.
d. Next meeting is June 10th. No other business, meeting adjourned.
Date: Signed: