Committee Minutes

Minutes of Grand Forks City Council/Growth Fund
Authority (JDA) - Tuesday, February 22, 2011 - 5:30 p.m.____

The city council of the city of Grand Forks sitting as the Growth Fund Authority met in the council chambers in City Hall on Tuesday, February 22, 2011 at the hour of 5:30 p.m. with Chairman Gershman presiding. Present at roll call were Council Members Bjerke, Grandstrand, Glassheim (teleconf.), Gershman, Christensen, Sande, Kreun (teleconf.), Mayor Brown - 8; absent: none.

APPROVE FLEX PACE LOAN REQUEST FROM ADVANCED
ENGINEERING AND ENVIRONMENTAL SERVICES, INC.

The staff report from the director of urban development relating to Flex PACE loan request from Advanced Engineering and Environmental Services, Inc. with recommendation to approve the request.

Keith Lund, vice president of Grand Forks Region Economic Development Corporation, reported that AE2S is a civil and environmental engineering consulting firm established in 1991 and specializing in water, wastewater and stormwater systems, and their principals are Charles Vein and Steve Burian. The company has had very strong growth over the last several years and now has 6 offices in North Dakota, Minnesota, and Montana, with total staff of 125, 57 of which are in Grand Forks at company headquarters. Over 80% of the company's revenues are derived from outside our trade region, the executive management and financial staff are located in Grand Forks to support that business activity.
The company has outgrown its existing location on South Washington Street and is constructing a 40,000 sq.ft. facility on South 42nd Street; building financing has been secured and AE2S is seeking financing to support the acquisition of the equipment and furnishings of about $2.25 million for their new facility; Choice Financial has approved $1.8 million loan to support this purpose and the company is seeking a $107,692.00 flex PACE loan from the Growth Fund. Approval of this loan will secure $200,000 grant from the Bank of North Dakota, and the Growth Fund and the Bank of North Dakota's combined investment of over $307,000 will be used to lower the interest rate on the Choice Financial loan from 6% to 1%. If approved the Growth Fund loan would be deferred for 7 years with no interest, loan would be repaid in 12 equal monthly installments after the deferral period. Loan would be secured by subordinate's security interest in equipment and furnishings as well as personal guarantees from the principals, Mr. Vein and Mr. Burian; these terms are consistent with the Growth Fund recently approved PACE loan policies. The Economic Development Corporation and the Growth Fund Committee recently met and both recommended approval of this application.

It was moved by Mayor Brown and seconded by Council Member Christensen to approve the request. The motion carried 7 votes affirmative, with Council Member Bjerke voting against the motion.

APPROVE MORGAGEE WAIVER AND CONSENT REQUEST
FROM NORTHERN TIER SEED, INC.

The staff report from the director of urban development relating to mortgagee waiver and consent request from Northern Tier Seed, Inc., with recommendation for approval of the request.

Greg Hoover, director of urban development, reported that the request from Northern Tier Seed, Inc., who had received a PACE loan from the JDA in 2001, is now in an expansion mode and the First State Bank is going to set a lease for them for the construction of 25 hopper bins at their facility and to secure that they need a waiver on the mortgage from us, the Growth Fund Committee recommended approval.

It was moved by Council Member Sande and seconded by Mayor Brown to approve the request as submitted. Carried 8 votes affirmative.

ADJOURN

It was moved by Mayor Brown and seconded by Council Member Bjerke to adjourn. Carried 8 votes affirmative.

Respectfully submitted,



Saroj Jerath
City Auditor