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HomeMy WebLinkAbout08-26-13 ,.It ,fiI�EN HILLS Approved: October 28, 2013 CITY OF ARDEN HILLS,MINNESOTA SPECIAL ECONOMIC DEVELOPMENT AUTHORITY MEETING AUGUST 26,2013 CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, President Grant called to order the special Economic Development Authority(EDA)meeting at 7:38 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; Executive Director Jill Hutmacher; Community Development Intern Matthew Bachler; and Deputy Clerk Amy Died 1. APPROVAL OF AGENDA MOTION: President Grant moved and EDA Commissioner Holmes seconded a motion to approve the meeting agenda as presented. The motion carried unanimously (5-0). 2. UNFINISHED BUSINESS A. EDA Revolving Loan Program Community Development Intern Bachler stated that the EDA Revolving Loan Fund (RLF) was discussed at two previous EDA meetings. At these meetings, general background information on the RLF was provided. Topics covered included the establishment of the RLF, the use of funds for business expansion projects, the current financial status of the RLF, and how the Minnesota Business Subsidy Law will impact the use of the RLF going forward. The RLF currently has a cash balance of approximately $155,000. ARDEN HILLS SPECIAL EDA MEETING—AUGUST 26, 2013 2 Community Development Intern Bachler indicated that the guidelines for the use of the RLF were first adopted in 1997, and since then, have not been updated. At the end of July 29, 2013, meeting, the EDA began to discuss how the funds in the RLF could be used to achieve the City's economic development goals and whether the RLF guidelines should be updated to reflect changes in priorities. Community Development Intern Bachler noted that loans issued through the RLF will be regulated by the Minnesota Business Subsidy Law. Loans less than $75,000 are not considered business subsidies and are exempt from the provisions of this law. Any revised guidelines will need to be reviewed by the State Department of Employment and Economic Development prior to EDA and City Council approval. Staff reviewed several questions and requested guidance from the EDA on the City's goals and policies for the RLF. Executive Director Hutmacher commented that the City's current RLF policy is stricter than the State's policy. She stated that the two key components within the policy at this time are for the City to avoid loans over $75,000 and grants over $25,000. With these parameters in mind, she questioned how the Commission wanted to proceed with the program. Discussion ensued regarding the State Business Subsidy Law, the City Business Subsidy Policy, and the size and scale of potential loans within the RLF program. President Grant was in favor of proceeding with smaller loans as this would allow the program to reach more businesses within the community. EDA Commissioner McClung was not sure where he stood on this issue because the City had little experience with the RLF program. In response to the questions in the staff memo, EDA Commissioner Holden stated that she supports loans for commercial fagade improvements, that projects should have a grade of B or better, and that she was open to discussing forgiving a percentage of some loans. EDA Commissioner Holden stated that one goal of the program may be to encourage home occupations to expand into commercial areas within the City. She questioned if the EDC had discussed this issue. Executive Director Hutmacher explained that the EDC was waiting for EDA policy direction. She questioned if the EDA wanted to consider partial forgiveness on the loans or the parameters that should be set on the loans. EDA Commissioner McClung envisioned that this program would assist small businesses with expansion or to bring new businesses into the City. He noted that section 6.2.1) of the City Business Subsidy Policy identifies priorities for giving subsidies. President Grant saw greater benefit in moving businesses to the community. ARDEN HILLS SPECIAL EDA MEETING—AUGUST 26, 2013 3 Discussion ensued regarding the PACE building and business. EDA Commissioner Holmes asked if it was worth the Authority's time to review and revise this program. President Grant was in favor of giving the program a try and making the loans attractive enough to small business owners to be pursued. EDA Commissioner McClung recommended that the Authority allocate the funds available with half set aside for fagade improvements and the other half for business retention or expansion. President Grant asked if the Authority supported this recommendation. EDA Commissioner Holmes recommended that the funds not be split in half because the City cannot anticipate who will make requests for the funds. President Grant and EDA Commissioner Werner agreed. President Grant inquired if the Authority wanted to push the program to the community or wait for requests to come to the EDA. EDA Commissioner Holmes wanted the loans to be selective with no high risk candidates. She was not supportive of loans for equipment acquisition, working capital, or professional fees. President Grant agreed with these suggestions, but recommended that the loans be low interest and that they be repaid in five years. He was not supportive of grants or equipment loans. EDA Commissioner Holden suggested that the loans have few restrictions so as to remain attractive to business owners. EDA Commissioner McClung wanted to see 1%-2% interest rates to assure the City is keeping a balance in the revolving loan fund. Executive Director Hutmacher thanked the EDA for their input this evening. 3. EDA COMMISSIONER COMMENTS None. 4. STAFF COMMENTS None. 5. ADJOURN ARDEN HILLS SPECIAL EDA MEETING—AUGUST 26, 2013 4 MOTION: President Grant moved and EDA Commissioner McClung seconded a motion to adiourn the special Economic Development Authority meeting. The motion carried unanimously (5-0). EDA President Grant adjourned the special Economic Development Authority meeting at 8:38 p.m. O 144 �� 6C-e �! --// Patrick Klaers David Grant Secretary EDA President It' ---A EN HILLS Request for Special Economic Development Authority (EDA) Meeting A special meeting may be called by the President of the EDA or by any two EDA Members. Reason for meeting: 9 c'V a 1 V-I!m Low -Pr0!5 rzx_� Requested Date: 8/26/13 Requested time: Immediately following the regular City Council meeting. Open meeting X Closed meeting Signa$ re of perso (s) making request: President or EDA Member Date EDA Member Date -This section to be completed by City staff- Date received: ( / 13 Date meeting to be held: 8/26/13 Time of meeting: Immediately following the regular City Council meeting. Location: Council Chambers, City Hall All necessary posting and notices have been completed. Signature of Deputy Jerk Date City of Arden Hills 1245 West Highway 96 Arden Hills,MN • 55112-5743 Phone 651.792.7800 * Fax 651.634.5137 www.ci.arden-hills.mn.us