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HomeMy WebLinkAbout2016/03/21 - ADMIN - Minutes - Economic Development Authority - RegularIOl0 St. Lous Park OFFICIAL MINUTES MINNESOTA ECONOMIC DEVELOPMENT AUTHORITY ST. LOUIS PARK, MINNESOTA MARCH 21, 2016 1. Call to Order President Mavity called the meeting to order at 7:16 p.m. Commissioners present: President Anne Mavity, Tim Brausen, Steve Hallfin, Gregg Lindberg, Susan Sanger, Thom Miller, and Jake Spano. Commissioners absent: None. Staff present: Executive Director (Mr. Harmening), City Attorney (Mr. Mattick), Deputy City Manager/Human Resources Director (Ms. Deno)Economic Development Coordinator (Mr. Hunt), Senior Planner (Mr. Walther), and Recording Secretary (Ms. Batra). 2. Roll Call 3. Approval of Minutes 3a, Economic Development Authority Meeting Minutes February 16, 2016 It was moved by Commissioner Hallfin, seconded by Commissioner Miller, to approve the EDA minutes as presented. The motion passed 7-0. 4. Approval of Agenda It was moved by Commissioner Lindberg, seconded by Commissioner Brausen, to approve the EDA agenda as presented. The motion passed 7-0. 5. Reports - None 6. OId Business - None 7. New Business 7a. Establishment of St. Louis Park Revolving Loan Fund and Amendment to the EDA Bylaws. Resolution Nos. 16-04 and 16-05 Mr. Hunt presented the staff report. The proposed Revolving Loan Fund (RLF) program was discussed at the February 16 Study Session. Under this program, the EDA would offer fixed rate gap financing to new and expanding St. Louis Park businesses in conjunction with loans offered through the Central Minnesota Development Company (CMDC) and local lenders. Economic Development Authority -2- March 21, 2016 Mr. Hunt explained that financing would be available for such uses as land, buildings, machinery and equipment. The benefit to borrowers would be lower down payments. The proposed guidelines are attached to the staff report. The guidelines encourage women, minority and veteran -owned businesses to apply. Staff would make a final determination of the loan application and would report to the EDA on any loan approvals. The proposed loan could be brought back to the EDA for discussion if there is ambiguity in the application's conformance with the program's guidelines. Mr. Hunt stated that the authorization for the RLF requires an amendment to the EDA By-laws. It is proposed that the EDA establish a RLF capitalized with $400,000 from the Development Fund and contract with CMDC to administer the initiative. There would be no direct charge to the EDA as it would be incurred by borrowers and the administrative fees would be offset by interest income. CMDC would access a small fee of 1112 of 2% of the balance on the loans outstanding in the EDA's portfolio. The president of CMDC is here for questions. Staff recommends adoption of the proposed resolutions on the agenda this evening. It was moved by Commissioner Brausen, seconded by Commissioner Lindberg, to 1vaive the reading and adopt EDA Resolution No. 16-04, establishing the St. Louis Park Revolving Loan Fund; and to waive the reading and adopt Resolution No. 16-05 amending the EDA By-laws. Commissioner Brausen stated he is really excited for this program as it encourages small businesses to acquire financing to maintain their facilities and creates more economic development for the City. The program incorporates green building and contains an equity clause so the owners are also putting in money. Commissioner Lindberg stated that he agrees with Commissioner Brausen's statements. In addition, this program really puts into action, items that the Council has discussed. The program is a great trove forward on behalf of the City as it gives small businesses extra help. Commissioner Miller also voiced his support of this program. He explained this program complements the Open to Business Program. As a small business owner for 11 years, he sees great benefit and would have reached out to the city had this program been in place during the time that he was a business owner. He looks forward to the city increasing the amount of support down the road and also looks forward to the city marketing this program. Commissioner Sanger explained that she is also very supportive of this program as she has had small businesses specifically ask for this program. CMDC is a nonprofit that provides support for small businesses in Minnesota. When she met with CMDC, she asked the CEO if there were any defaults on loans through this program and the answer is none. This is very impressive. Commissioner Mavity explained that she echoes the other Commissioners' statements. This program helps maintain a healthy local small business community for the city. She asked if the language in the proposed amendment is outlined with specific steps in order to encourage women -owned and minority-owned businesses. Mr. Hunt responded that staff will be reaching out to a number of organizations that provide services to various groups to make them aware of the program and encourage applications. The motion passed 7-0. Economic Development Authority -3- March 21, 2016 7b. Establishment of the Wayzata Blvd Tax Increment Financing District. Resolution Nos. 16-06 and 16-07. Mr. Hunt presented the staff report. In early 2012, it was determined that the former Santoripi's restaurant located at 9920 Wayzata Boulevard was structurally unsafe, and it was set for demolition. The building was demolished in February, 2013, and the garage was removed in July, 2014. Statutorily, the EDA has three years from demolition to establish a Tax Increment Financing (TIF) district. At the January 11 Study Session there was a consensus of support from the EDA for establishing such a district. Mr. Hunt explained that the primary issue with redeveloping the property is unstable structural soils. Due to these soils, a developer would most likely apply for assistance from the EDA in order for redevelopment to occur. In order to provide assistance for development, a new TIF district needs to be established. In summary, Mr. Hunt stated these resolutions call for the creation of a new TIF district called the Wayzata Boulevard TIF District. The proposed TIF district consists of two parcels: 9808 and 9920 Wayzata Boulevard. Within the proposed TIF plan, the boundaries of the City's redevelopment project area are being modified to be coterminous with the city's corporate boundaries. Mr. Hunt explained that authorization of the TIF district does not in itself commit the EDA to provide financing. Rather, the proposed TIF district creates the funding vehicle to reimburse the developer for a portion of its qualified project costs. The EDA will have four years after the district is certified to utilize tax increment created by the district. If by that time no project materializes, the TIF district must be decertified. Staff recommends adoption of the two proposed resolutions on tonight's agenda. It was moved by Commissioner Brausen, seconded by Commissioner Miller, to waive the reading and adopt EDA Resolution No. 16-06, approving the establishment of the Wayzata Blvd. Tax Increment Financing District within Redevelopment. Project No. I (a redevelopment district); and to waive the reading and adopt EDA Resolution No. 16-07, authorizing an Interfund Loan for advance of certain costs in connection with the administration of Wayzata Blvd. TIFDistrict. Commissioner Brausen clarified that this property is the old Santorini's property. He explained that the property is currently worth $2.5 million, but could be worth a lot more if developed. He supports these resolutions and encourages the City to find a developer to enhance the property. The motion passed 7-0. S. Communications - None 9. Adjournment The meeting adjourned at 7:32 p.m. Melfi sa Kennedy, Secretary , Anne Mavity, President C