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HomeMy WebLinkAbout1998/04/20 - ADMIN - Minutes - Economic Development Authority - RegularAffh C ITY O F ST. LOUIS PARK OFFICIAL MINUTES ECONOMIC DEVELOPMENT AUTHORITY ST. LOUIS PARK, MINNESOTA April 20, 1998 1. Call to Order President Jeff Jacobs called the meeting to order at 7:00 p.m. 2. Roll Call l ) J The following Commissioners were present at roll call: Jeff Jacobs, Chris Nelson, Sue Sanger, Robert Young, Jim Brimeyer, and Mayor Gail Dorfman. Commissioner Ron Latz arrived at 7: 10 p.m. Also present were the Executive Director (Mr. Meyer): Deputy City Manager (Ms. Kutzler); Director of Community Development (Mr. Harmening); Economic Development Coordinator (Mr. Anderson); and EDA Attorney (Mr. Bubul). 3. Approval of minutes of April 6, 1998 meeting The minutes were approved as presented. 4. Approval of agenda of April 20, 1998 meeting It was moved by Commissioner Sanger, seconded by Commissioner Young, to approve the agenda. The motion passed 6-0. 5. Reports - None 6. Old Business - None 7. New Business a. Small Business Development Loan Guarantee Program Commissioner Dorfman asked staff if it was appropriate to target women and minority owned businesses since 25% of the program guarantee reserves have been set aside for that use. Mr . Anderson, Economic Development Coordinator stated that this was appropriate because the city was developing their own loan program and it was not the same as adopting a regulation that would put this requirement in place for private contractors. ) Commi ssioner Sanger asked what would result if a recipient of a loan went out of business before the loan was paid off Mr . An derson stated that the goal was to have no losses, so if the security didn't cover the am ount of the loan or the guarantee, some potential loss would be experienced. Commi ssioner San ger noted that the document didn't address if a business ceased operations, but only if a business moved out of town and questioned whether the document needed to be amended. Mr . Anderson stated that this language could be modified. Commi ssioner Jacobs recommended that this be made part of a security agreement either between the City or the bank. Commi ssioner Brimeyer questioned production contracts and receivables as business related needs that required financing and asked if staff was aware of the number of loans that the bank rejected because they considered the loan too risky an d desired to have the city involved. Mr . An derson stated that discussions wi th the bank s had tak en place regarding this issue and there was a market fo r this typ e of lending an d role fo r EDA, but exact numbers were not available. Commi ssioner Brimeyer asked if the reason why the bank didn't want to bother wi th them was because the am ount of the loan was so small. Mr . An derson stated that this may be the case in some situations, but this program addressed businesses who had been in business for three years simi lar to the bank . In cases where business are relatively young banks may discourage this typ e of lending. The Small Business Development Loan Pro gram could help fo ster this typ e of business. Commi ssioner Brimeyer asked if approval would be based on strict ratio or would flexibility exist in the pro gr am, and comm ented on an anticipated higher default ra te. Mr . An derson stated that the banks would provide ratios through underwriting, but since the program objectives considered other items such as tax base and job creation there was lending flexibility. Commi ssioner Nelson asked if Commi ssioner Brimeyer questioned the use of receivables as loan guarantee proceeds or collateral. Commi ssioner Brimeyer stated he questioned them as collateral and desired to see receivables be financed by standard bank procedures to provide security. SCANNED C ommi ssioner N elson believed that the C ity should take a position on everyt hi ng, an d not exclude ) receiv ables. I C ommi ssioner N elson asked staff how the am ount of25% of pro gr am gu ar an tee reserv es set aside fo r w om en an d mi nority ow ned businesses w as determi ned. Mr . An derson stated that the num ber w as determin ed to represent a signifi can t effort to in clude w om en an d mi nority ow ned busin esses into the pro gram . C ommi ssioner N elson w as concern ed about thi s concept an d believed it m ay lead to in appro priate use of fu nds an d suggested that if a percentage w as going to be used, it should be onl y fo r the first half of the year an d then fu nds avai lable fo r every one. Mr . An derson stated that it w ould m ak e sense to at som e point in tim e m ak e that m oney available to busin esses in St. L ouis P ar k, regar dless of if they ar e w om en or min ority own ed busin esses. Mr . M eyer, C ity M an ager suggested an other al tern ative that if hal fw ay thr ough the year , there appear ed to be an im bal an ce betw een the set aside fu nds an d the non-set aside fu nds, the E D A could consider increasing the am ount of the loan pool. H e noted that the ini tial am ount w as set aside wi thout kn owi ng the level of interest in the pro gram an d the fu nds w ere comi ng from the developm ent fu nd an d w ould be pai d back to that fu nd. ) S teve B ubul, E D A Attorn ey stated that these w ere onl y gu idelin es an d subject to the discretion of ) the E D A as the pro gr am w as admi ni stered an d not a legal ly bin ding docum ent. J l O C ommi ssioner San ger suggested that instead of m odifyi ng the lan gu age in the gu idelines that it w ould be m ore appro pri ate to ask fo r a report back to the E D A aft er six m onths of the operation of the fu nd and m ak e som e fu rt her choices at that tim e as to how that fu ndin g mi gh t be used. C ommi ssioner D orfm an cl arifi ed that regar dless if the percentage of pro gr am gu ar an tee reserv es set aside w ere used up befo re the end of the year , additional w om en or min ority ow ned business in need of a loan w ould still be considered. It w as m oved by C ommi ssioner B ri m eyer, seconded by C ommi ssioner D orfin an, to appro ve the S m al l B u siness D evelopm ent L oan G uar an tee Pro gr am gu idelines an d the L oan Pro gr am G uar an tee A gr eem ent, an d authorize the President an d Executive Director to im plem ent the pro gram an d execute L oan G uar antee Agr eem ents as necessary in accordan ce wi th the gu idelines. T he m otion passed 7-0. b. Purchase of Single Family Home at 3750 Ottawa Ave S It w as m oved by C ommi ssioner N elson, seconded by C ommi ssioner Y oung, to authorize the President an d E xecutive D irector to enter into a purchase agreem ent an d lease w ith the Seller an d ex ecute other necessary docum ents to com plete the acquisition. The m otion passed 7-0. 8 . C o m m u n ic a t io n s a n d B ill s a . V e n d o r C la im s It was moved by Commissioner Young, seconded by Commissioner Dorfinan, to approve and authorize payment. The motion passed 7-0. 9. Adjournment It was moved by Commissioner Sanger, seconded by Commissioner Dorfinan, to adjourn the meeting at 7:20 p.m. The motion passed 7-0.