Committee Minutes

MINUTES
Growth Fund Committee Meeting
Office of Urban Development Conference Room
1405 First Avenue North
Grand Forks, ND 58203

March 16th, 2010

1. Roll Call

Present: Eliot Glassheim, Terry Smith, Dwight Thompson and Doug Christensen. Also present: Greg Hoover, Meredith Richards, Klaus Theissen, Keith Lund, Judith Stevens, Sean O’Leary, Bill Burga, Jr., Gerald Muizelaar, and Melanie Richardson. Absent: Mike McNamara

2. Approval of Minutes – January 19, 2010: Motion by Terry Smith, second by Dwight Thompson to approve minutes from previous meeting on January 19, 2010. All present voted aye. MOTION CARRIED.

3. Other Business:

Request for Modification of PACE Loan Agreement with Oakwood Associates: The request is for the Growth Fund to suspend the job creation requirements through December 2010. Bank of North Dakota has already agreed to the modification of the loan terms and we generally follow the same or similar guidelines.

Motion by Dwight Thompson, second by Terry Smith to suspend the job creation requirements in the Oakwood Associates PACE Loan through December 2010. All present voted aye. MOTION CARRIED

Proposed Leases and Purchase: Bill Burga, Jr., the Plant Director from LM Glasfiber in Grand Forks, presented a slide show that outlines the business practices and future of LM Glasfiber. The Grand Forks location employs over 700 people and has contributed 10,000 blades since 1999. Grand Forks is the largest and most productive location with 20% of LM Glasfiber’s revenue being generated in the Grand Forks facility. Bill also stresses that the opportunity for expansion in Grand Forks is a very real possibility as the market for this particular product is on the rise.

Sean O’Leary presented the two options that LM is interested in pursuing for the primary building: one is to change from an operating lease to a capital lease for the last 4 years of the original agreement; the other is to purchase the building outright for the principal balance of the loan at present which is approximately $1.7 million. Sean also addresses the new lease proposal for the secondary building which is to sign a new 5-year lease instead of a 3-year lease, and they are requesting a 25%-30% reduction of the monthly rental payment.




A lengthy discussion followed addressing the pros and cons of each scenario. Doug suggests that we hold off on putting forward our proposal ideas to LM Glasfiber representatives until we are able to get together and discuss the matter privately to decide on what is in the best interest of both parties. No motion at this time. Representatives from LM Glasfiber

Growth Fund Committee members continued discussing the options proposed. The Committee is leaning towards selling the primary building for $2,345,000 and a 25% rent reduction on a new 5-year lease on the secondary building with the provision that the City has first option to purchase the primary building back for $2,345,000 if the company decide to leave Grand Forks.

EDA Revolving Loan Fund: Greg received a letter from the EDA about not meeting our capitalization/utilization requirements. We have a few options available, and Greg has suggested the 4th option, which is to remove the suspension and give us 90 days to utilize the EDA funds. If we are not able to use the funds within the next 90 days, we will need to pay the money back to the EDA which is $1.8 million. Greg is confident that if we can show that we have some projects in the works that the EDA will give us 120 days to use these funds. Keith and Klaus will give an update at the next Growth Fund Committee meeting regarding the prospective business ventures.

Motion by Terry Smith, second by Eliot Glasheim to request the 90 day extension from the EDA. All present voted aye. MOTION CARRIED.

4. Project Update: None

5. Adjournment: Meeting adjourned at approximately 6:26 pm



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Melanie R. Richardson Doug Christensen