Committee Minutes

MINUTES/GROWTH FUND AUTHORITY
February 5, 1996 - 7:00 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 Monday, February 5, 1996 at the hour of 7:00 p.m. with Chairman Carpenter presiding. Present at roll call were Council Members Beach, McCabe, Hoeppner, Hamerlik, Hanson, Glassheim, Sande, Klave, Beyer, Babinchak, Hagness, Carpenter and Mayor Polovitz - 13; absent: Council Members Geller, Johnson - 2.

HOLD PUBLIC HEARING ON APPLICATION BY CIRRUS
DESIGN CORPORATION

An application by Cirrus Design Corporation for funding through the Growth Fund of a project to expand to a manufacturing plant in the Grand Forks Industrial Park to build "flat" components for their aircraft (i.e., wings, flaps, rudders, etc.), and to build an assembly facility in 1997 at the Grand Forks International Airport, was presented. The Cirrus request is as follows: 1) City financing of a building in the Industrial Park to be leased to Cirrus; 2) the purchase of $1.4 million in equity by the Grand Forks Growth Fund; 3) participation by local lending institutions; 4) participation by the Bank of North Dakota; 5) participation in the amount of $150,000 by the local State revolving loan fund; 6) equity purchase in the amount of $500,000 by the State Development Fund; and 7) a $100,000 Development Fund relocation grant; total project cost exceeds $13 million. Cirrus is also requesting a five-year tax exemption on the manufacturing facility in the Industrial Park.

The recommendation from the Growth Fund Committee to the Grand Forks Growth Fund Authority was as follows: (see attachment)

Chairman Carpenter opened the public hearing on the application for Growth Fund monies from Cirrus Corporation and asked for comments.

Bill King and Alan Klapmeier, representatives of Cirrus Corporation, were present.

Dick Olson, Grand Forks Development Foundation, commented briefly on prior application by Cirrus and criticism that this body didn't do enough to bring Cirrus in at that time, which is not true; that the council and growth fund left Cirrus with a good feeling and feeling of trust and that is why they are back here today.

Chairman Carpenter closed the public hearing.

It was moved by Council Member Hanson and seconded by Mayor Polovitz that the application by Cirrus Design Corporation be approved and that the recommendation of the Growth Fund Committee be and is hereby approved.
Council Member Hagness thanked Cirrus for coming back to Grand Forks, that the

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February 5, 1996 - Page 2

council and growth fund did take lot of criticism in the past, and thanked Mr. Olson for his comments. He asked what prevents City from losing Cirrus in next few years and going to another location if offered incentives to move. Mr. Klapmeier stated he did not like to see companies play "economic development" games, that they are here because of what Grand Forks has to offer, combination of the University of North Dakota and the Aerospace Center, the work force in the area, and the building and investment in the location; that this project far too complex to pick up and move around; that companies should make business decision that's best for the long term growth of the company; and they think that long term growth of their company is tied to Grand Forks. He also stated that reason they did not come into Grand Forks before was not anything that the City of Grand Forks did, and that is why they are back now.

Chairman Carpenter stated that the City is receiving common-stock for money being provided, and would ultimately recoup investment if they did leave, will have an equity interest in the company.

Mr. Klapmeier stated that they expect the airplane to be certified by second quarter of 1997 and would be in production at that time.

Council Member Beach stated that New Flyer (who is moving to Crookston) has broken no agreements, they fulfilled contractual arrangement before deciding to move on; and stated City looks forward to long relationship with Cirrus.

Upon roll call the following voted "aye": Council Members Beach, McCabe, Hoeppner, Hamerlik, Hanson, Glassheim, Sande, Klave, Beyer, Babinchak, Hagness, Carpenter and Mayor Polovitz - 13; voting "nay": none. Chairman Carpenter declared the motion carried.

HOLD PUBLIC HEARING ON APPLICATION BY
DOUBLE L MANUFACTURING FOR GROWTH
FUND MONIES

An application by Double L Manufacturing for funding through the Growth Fund of a project to construct a 10,000 sq.ft. facility this summer, that during construction a temporary office will be located here and equipment will be moved to the site, and that Double L plans to hire 8 employees at start-up and expand to 12 during the first year; and 16 employees by the end of the second year, was presented. Double L Manu- facturing is requesting $40,550 to be used for a PACE buy-down on a $240,000 building and site loan and a $50,000 equipment loan. Double L is also requesting that the City purchase a 22-acre site of land for $165,000 and they will repurchase 10.5 acres for $75,000, with the balance of the land to be held and managed by the Growth Fund Authority.

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February 5, 1996 - Page 3

The city auditor read the recommendation from the Growth Fund Committee as follows: 1) approve a PACE buydown in the amount of $40,550; 2) approve the purchase of 22 acres of land for the amount of $165,000 contingent upon a purchase agreement with Double L to repurchase 10.5 acres of land for $75,000; and 3) approve an amount to
exceed $2,000 for incidental expenses associated with the land purchase.

Chairman Carpenter opened the public hearing on the application by Double L Manufacturing for Growth Fund monies, and asked for comments. There were no comments, and Chairman Carpenter closed the public hearing.

It was moved by Council Member Beyer and Council Member Glassheim to approve the recommendation of the Growth Fund Committee.

John O'Leary, executive director of the urban development office, reported that this company needed and wanted to be in the vicinity where other potato processors and vendors are located, that they are located on corner of I-29 and Hwy. 81 and as a consequence buying more land than what the company needs and selling back to them at our cost exactly what they need to build a manufacturing plant; the remainder of the land is zoned industrial, that the zoning proper for that area and City should be able to market the land, and in the interim will be leased as farmland.

Upon roll call the following voted "aye": Council Members Beach, McCabe, Hoeppner, Hamerlik, Hanson, Glassheim, Sande, Klave, Beyer, Babinchak, Hagness, Carpenter and Mayor Polovitz - 13; voting "nay": none. Chairman Carpenter declared the motion carried.

COUNCIL MEMBER JOHNSON REPORTED PRESENT

HOLD PUBLIC HEARING ON APPLICATION BY YOUNG
MANUFACTURING

An application by Young Manufacturing was presented requesting that the Growth Fund provide an additional $3,512.29 to their PACE Interest Buydown, increasing it from $60,000 to $63,512.29; that the First American Bank and the Bank of North Dakota are providing $75,000 in additional funding and Young Manufacturing has spent an additional $35,000 on materials and another $24,750 on in-kind labor.
The city auditor read the recommendation from the Growth Fund Committee as follows: to increase the interest buydown to Young Manufacturing in the amount of $3,512.29 (from $60,000 to $63,512.29).

Mr. O'Leary reported that this is a proposal that the Growth Fund Authority has already approved in the amount of $60,000 for Young Manufacturing to assist in the
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February 5, 1996 - Page 4

purchase of equipment and construct an expansion to their building on North 42nd
Street; the original proposal was for $60,000 to reduce the interest rate on the money they were borrowing from First American Bank, however, found that amount was short of the amount required for the total interest buydown requested for both loans to the
amount requested is $10,507.53. He stated this money leveraged against the State of North Dakota's money. Mr. Young was present, as was Mr. Ramsey from First American Bank to answer any questions of the council.

Chairman Carpenter opened the public hearing on the application and asked for comments. There were no comments and Chairman Carpenter closed the public hearing.

It was moved by Council Member Sande and seconded by Council Member Hoeppner to approve the $10,507.53 increase. Upon roll call the following voted "aye": Council Members Beach, McCabe, Hoeppner, Hamerlik, Hanson, Glassheim, Sande, Klave, Beyer, Babinchak, Johnson, Hagness, Carpenter and Mayor Polovitz - 14; voting "nay": none. Chairman Carpenter declared the motion carried.

ADJOURN

It was moved by Council Member Hamerlik and seconded by Council Member Beach that we do now adjourn. Motion carried and meeting adjourned at 7:25 p.m.

Respectfully submitted,



John M. Schmisek
City Auditor