Committee Minutes

MINUTES/JDA/Growth Fund Authority
Monday, September 19, 2005 - 7:00 p.m.

The city council of the City of Grand Forks sitting as the JDA-Growth Fund Authority met in the council chambers in City Hall on Monday, September 19, 2005 at the hour of 7:00 p.m. with Chairman Gershman presiding. Present at roll call were Council Member Hamerlik, Glassheim, Kreun, Gershman - 4 ; absent: Council Members Brooks, Kerian, Brown - 3.

HOLD PUBLIC HEARING ON NORTHWOOD MILLS,
LLC - GROWTH FUND APPLICATION

The staff report from the Office of Urban Development relating to Northwood Mills LLC, Growth Fund application, with recommendation to hold public hearing on the proposed funding for Northwood Mills, LLD, and to approve a PACE loan to Northwood Mills, LLC as summarized in this report.

Jim Melland, Grand Forks Region Economic Development Corporation, noted the project before the Authority tonight is Northwood Mills and is a soy-bean crushing plant that is a start-up plant that will be operating out of Northwood, ND which is in the southwest corner of Grand Forks County,

COUNCIL MEMBER CHRISTENSEN REPORTED PRESENT

the plant is going to be run by two principals, Paul Sproule, who is a local businessman, and he is partnered with a gentleman from southern Manitoba who has been in the soybean crushing business for several years in the Winkler area. He stated the plant to be built just outside of Northwood is about a $7.6 million facility and will employ 17 people when up and running, and the request before the Authority is to participate in a PACE loan which will help buy down the interest rate on part of the loans on the facility and equipment, lead bank is out of Northwood, American Federal Bank, and participation request of the Growth Fund is $130,000 and that is matched by $250,000 from the Bank of North Dakota in a grant, and the Growth Fund's investment will be paid back at the end of the underlying loan which is 10 years. He stated that Mr. Bruce Uglem who is the chairman of the Northwood Economic Development organization.

Mr. Uglem stated on behalf of the City of Northwood and the Northwood Economic Development Committee stated he is pleased to be here and to ask for support and contribution towards this project, Northwood Mills for their region, it will have a great impact on the economy at all levels because of the farm dollars that will be coming in and generated. It is an exciting project and should be very good for employment and the businesses and economy of the whole area. He stated they appreciate the City's support and cooperation of the Grand Forks Region EDC and thanked them for their consideration.

Chairman Gershman opened the public hearing. There were no comments from the audience or council, and the public hearing was closed.

It was moved by Council Member Glassheim and seconded buy Council Member Kreun that the recommendation to approve a PACE loan to Northwood Mills, LLC in the amount of $130,000, at 0% interest rate; payments deferred until maturity of bank loan for equipment (10 years); monthly payments will be at the same rate as the bank loan and to be made until debt is satisfied, interest rate buy-down applied to bank loan for the acquisition of equipment, and personal guarantee from the two principle investors. Upon voice vote the motion carried 5 votes affirmative.

ADJOURN

It was moved by Council Member Glassheim and seconded by Council Member Kreun that we adjourn. Carried 5 votes affirmative.

Respectfully submitted,



John M. Schmisek
City Auditor