Council Minutes

COMMITTEE OF THE WHOLE MEETING
Monday, February 7, 1994 - 12:00 noon.

Mayor Polovitz announced that because of need for confidentiality in putting package together with GFG Food Services, this meeting has been called to make council members aware of what is happening. He reported this matter had been presented to the Planning and Zoning Commission last Wednesday. Mayor Polovitz called for the roll: Present were Beach, McCabe, Kulas, Hanson, Glassheim, Carpenter, Lien, Beyer, Hagness - 9. Staff members present were: John O'Leary, community development; Bob Bushfield, city planner; Ken Vein, city engineer; Mel Carsen, city assessor; John Schmisek, city auditor; Dick Olson, Economic Development Foundation; and Pat Owens, mayor's office.

Mayor Polovitz presented Jim Kennelly, chief executive officer of Grand Forks Food Service and asked him to present their proposal. Mr. Kennelly distributed copies of handout giving brief history of their business and key management positions, and introduced the following individuals to the committee of the whole: Mike Eischeid, chief operating officer; Dave Cooley, vice president of operations; James Craigmile, vice president of finance/CFO; Scott Opdahl, vice president of sales; Paul Brewinski, vice president of merchandising and marketing; and Bill Haunz of the Bismarck office.

Shores reported present.

Mr. Kennelly stated that GFG is proposing to construct a new facility on a 20-acre site west of I-29 and south of 32nd Avenue South, consisting of an L-shaped warehouse of approx. 78,000 sq.ft., including a truck maintenance garage of 4,000 s.f. Mr. Kennelly stated this is a very competitive industry - their competition is out of Minneapolis, Nebraska, etc. and they will be retaining 115 jobs in this area (plus 150 in Bismarck area); plans are to maintain the Bismarck facility but not East Grand Forks; corporate headquarters will be in Grand Forks. He also noted that expect to have 3 - 10 new jobs over the next few years; he stated that because of the existing facility unable to add new projects and open new geographic territory - 2 this year and 3 additional in next few years. Mr. Kennelly stated they would make themselves available for any questions.

Geller present.

Mayor Polovitz stated that one of the purposes of the Growth Fund is retention of jobs; they will work with East Grand Forks to put that property back to use. Mayor Polovitz asked Ken Vein to outline points in the letter.

Ken Vein, city engineer, handed out packets of information; and reported there is no infrastructure in place west of I-29; and proposed project includes 16" waterline on north side of 32nd; sanitary sewer - tying new system into master forcemain at 17th
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Ave.S; reconstruct 32nd Ave.S.; that in the next month they are going to be bidding reconstruction - bridge widening and concrete curb structure; and paving 4-lane urban section.

Mr. Vein reviewed the information and infrastructure financing package, including GFG and Travel Plaza immediately adj. to this, as follows: 1) Travel Plaza to pay its fair share; 2) minimize effects to undeveloping adjacent property (no costs at this time, and will pay their fair share when they develop via tapping charges), 3) minimize use of City funds; 4) use Greenberg TIF (tax increment financing) funds when necessary, and if possible, make them recoverable by using tapping charges; 5) GFG TIF to be used for their own on-site infrastructure and for any necessary infrastructure along S. 48th Street; GFG will not pay for any infrastructure along 32nd Ave.S. or the sanitary sewer to the north.

Mr. Vein noted that the City will pay for portion of the street on the north side of 32nd in front of GFG site, and recover through tapping charge; City will pay cost of street over 37 ft. He also noted that the figures presented in the packet are preliminary figures. It was noted that the Greenberg tax increment financing issue will be spread over approximately 18 years; to generate $1.2 Million; land value frozen with increased value to generate monies to pay debt. Mr. Schmisek reported of the $1.2 Million TIF, City would recover $1 Million with tapping charge.

Mr. Bushfield stated that biggest problem is getting access off I-29; N/S street west of I-29. Mr. Hagness asked if this will be industrial park setting for the future; Mayor Polovitz stated he talked to Dick Olson, thought it would be to the west. Dick Olson stated that he had talked to his Board, and to expand have to buy land within next year.

The question was raised as to whether this project could be financed through general obligation bond issue using Growth Fund monies, and it was stated that was viable option. Mr. Shores stated he was not sure they have policy set up to handle commercial projects per se; Mr. O'Leary stated a policy developed in finance committee for review of financing requests.
Moved by Hagness and Lien to endorse concept of the proposed project and to continue to work with GFG for development of the project. Motion carried.

Beyer stated that if S. 48th Street developed for commercial traffic, would create problem if open area to residential use.

Moved by Beyer and Shores to adjourn. Motion Carried.

Alice Fontaine, City Clerk
Dated: 2/07/94.