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-- RpEN HILLS
Approved: July 29, 2013
CITY OF ARDEN HILLS, MINNESOTA
ECONOMIC DEVELOPMENT AUTHORITY MEETING
APRIL 29,2013
6:00 PM—CITY HALL
CALL TO ORDER/ROLL CALL
Pursuant to due call and notice thereof, President Grant called to order the Economic
Development Authority meeting at 6:06 p.m.
Present: EDA President David Grant; EDA Commissioners Brenda Holden, Fran
Holmes, Dave McClung, and Ed Werner
Absent: None
Also present: Secretary Patrick Klaers; Treasurer Sue Iverson; Executive Director Jill
Hutmacher; Community Development Intern Matthew Bachler; and Deputy Clerk Amy Dietl
1. APPROVAL OF AGENDA
MOTION: Commissioner Holmes moved and Commissioner Holden seconded a motion to
approve the meeting agenda as presented. The motion carried unanimously (5-
2. APPROVAL OF MINUTES
A. February 25, 2013
MOTION: Commissioner Holmes moved and Commissioner Werner seconded a motion to
approve the February 25, 2013 Meeting Minutes as presented. The motion
carried unanimously (5-0).
3. CONSENT CALENDAR
None.
4. NEW BUSINESS
ARDEN HILLS EDA MEETING—APRIL 29, 2013 2
None.
5. UNFINISHED BUSINESS
A. Business Subsidy Criteria and City Public Financing Guidelines
Executive Director Hutmacher apologized for the City Council memo and attachments for the
meeting later in the evening having inadvertently been substituted for the EDA memo and
attachments. This material would have provided the EDA with additional background information
for this discussion. This EDA material was then distributed.
Executive Director Hutmacher discussed the business subsidy criteria and City public financing
guidelines with the Commission in detail. Based on a discussion with the County Assessor, the
City's public finance consultant had recommended that the minimum retail value be decreased to
$125 per square foot.
Commissioner McClung questioned if this starting point was too low.
Secretary Klaers indicated the City could return to the $150 per square foot minimum and see how
the market responds.
Commissioner Holmes supported the $125 per square foot minimum.
The Commission was in favor of proceeding with the $125 per square foot minimum as
recommended by Stacie Kvilvang of Ehlers &Associates.
Executive Director Hutmacher reviewed Section 6.2 Desired Qualifications further with the
Commission.
Commissioner Holden suggested further clarification be included in this section regarding the term
"Office". She questioned if the reference to "Office" should be removed.
Commissioner Holmes stated this section could read high-tech, med-tech, and R&D
facilities/offices. This would assure the offices are professional in nature. The Commission agreed
with this suggestion.
Executive Director Hutmacher then reviewed the Grading and Report Card point classification
and bonus point criteria. The TIF Districts and total tax capacity for the City was discussed. She
noted that Mounds View was removed from the analysis of total tax capacity captured by TIF
districts as an outlier. She questioned what range the Commission wanted as a limit on captured tax
capacity.
Secretary Klaers noted the State average was 6.4% and the Financial Planning and Analysis
Committee recommended the City assume 75% of this rate.
Commissioner Holden stated if the recommendation was followed, the TIF rate would be 4.8%.
ARDEN HILLS EDA MEETING—APRIL 29, 2013 3
President Grant stated a TIF District would be going offline in 2015 and this would provide the
City with more of a cushion for future projects.
Commissioner McClung indicated Presbyterian Homes made up a good portion of the City's
captured tax capacity. He commented that Cottage Villas and Round Lake were the other two
districts in place at this time. He expressed concern with the redevelopment taking place in Red
Fox/Grey Fox and how TIF could be used to benefit this area.
President Grant was comfortable with a low captured tax capacity limit. He did not see the need
for TIF in the TCAAP redevelopment.
Secretary Klaers explained prior to Presbyterian Homes, the City captured $590,000 in TIF which
was 3.7% of the City's tax capacity. After adding in Presbyterian Homes, the captured tax capacity
was $773,000 which was 4.8%.
President Grant proposed a 5.8% cap on captured tax capacity be used. He requested comments
from the Commissioners.
Commissioner McClung recommended the cap be set as accurately as possible. He understood the
cap was a guideline that could be adjusted. He suggested 6.0%.
Commissioner Werner was in favor of 6%.
Commissioner Holden agreed with the 6% but recommended this issue be discussed by FPAC in
further detail.
The EDA requested the cap be set at 6% and direct staff to review this item again in six months.
Commissioner Holmes suggested that the language within the criteria read that all "viable"
requests will be reviewed by a third party financial advisor. Several other language revisions were
discussed.
Executive Director Hutmacher questioned if the EDA wanted the Council to approve this
document this evening. The Commission recommended this item move forward to the Council.
B. EDA Revolving Loan Program Update
Executive Director Hutmacher stated the EDA requested the revolving loan fund be investigated
to see where the funds came from. This issue was researched by Community Development Intern
Matthew Bachler.
Community Development Intern Bachler discussed the history of the revolving loan program
noting it was established in 1997 to allow the City to participate in the Minnesota Investment Fund
(MIF). The fund provides industrial and manufacturing businesses with low cost financing for job
creation and retention projects. The loans are administered through local governments and the
program allows local governments to retain a portion of the loan principle and accrued interest to
establish a revolving loan fund.
ARDEN HILLS EDA MEETING—APRIL 29, 2013 4
Community Development Intern Bachler explained that in January of 1997 the Council
authorized the City Administrator to execute an MIF loan agreement with Cardiac Pacemakers, Inc.
(CPI). A $100,000 portion of the state financing was in the form of a low-interest loan that was
repaid to the City. This loan had a five-year term at 3% interest rate. The proposed use for the
funds was a 47,000 square foot expansion project to enhance research and development programs at
CPI. The company estimated an additional 200 high-skill jobs would be created as a direct result of
the investment. Prior to dispersing the MIF grant, the State required Arden Hills to adopt guidelines
for the revolving loan fund. The regulations were designed to set parameters on the use of funds to
ensure consistency with the City's economic development policies. The guidelines were approved
by the EDA(August 25, 1997) and City Council (May 26, 1998).
Community Development Intern Bachler indicated the CPI loan was fully repaid to the City as of
December 31, 2003. The current balance of the revolving loan fund is $154,969 as of December 31,
2012. Staff requested the EDA review the revolving loan guidelines and provide staff with
comments. The Minnesota Department of Employment & Economic Development (DEED)
recommends that, at a minimum, the revolving loan fund guidelines be updated to reference the
State Business Subsidy Law. DEED will need to review and approve any changes to the revolving
loan fund guidelines. Community Development Intern Bachler noted this item would be
discussed further at a future work session meeting.
C. EDA General Fund Budget Discussion
Secretary Klaers noted the EDA budget information was provided to the Commission for review
and that discussion on EDA budget items and issues can take place at the next EDA meeting.
6. EDA COMMISSIONER COMMENTS
None.
7. STAFF COMMENTS
None.
8. ADJOURN
MOTION: President Grant moved and Commissioner Holmes seconded a motion to
adjourn the Economic Development Authority meeting. The motion carried
unanimously (5-0).
Presi nt Grant adjourned the Economic Development Au ority mee in at 6:59 p.m.
Patrick Klaers David Grant
Secretary EDA President