Committee Minutes

MINUTES/GROWTH FUND AUTHORITY
Tuesday, July 1, 1997 - 4:00 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 Tuesday, July 1, 1997 at the hour of 4:00 p.m. with Chairman Carpenter pre-siding. Present at roll call were Council Members Beach, Hamerlik, Hanson, Glassheim, Carpenter, Klave, Babinchak, Bakken, Hafner, Hagness, Owens - 11; absent: Council Members Polovitz, Sande - 2.

John O'Leary, executive director urban development, reported that the City has an opportunity to apply for a number of grant appli-cations available through the Department of Commerce Economic Development Administration; 1) to re-capitalize the Growth Fund for $2,000,000, which requires a match of $220,000; 2) pre-application which has already been approved, as well as the first one, to con-struct an incubator building in the Industrial Park, in the short term this building would be used to house businesses displaced by the flood, in the longer run would be used by the Economic Develop-ment Foundation and the Growth Fund to house business and industry wishing to locate in Grand Forks, that proposal is requesting $5.167 million from EDA with a match of $1.725 million to be sup-plied by the City of Grand Forks; and 3) for acquisition of land in the Industrial Park, and that pre-application has not yet been sub-mitted, but is anticipated that will involve a $1 million EDA grant with $300,000 in match. He stated he was requesting the council to consider these proposals this afternoon because notice is short, however, recently learned of the successful review of the first two applications from the Economic Development Administration, and EDA staff has indicated they are looked favorably upon by the Depart-ment of Commerce and we do have an opportunity to process these very soon and would allow us to get in the ground in the next couple weeks. He requested authorization to make application to the Department of Commerce and authorize JDA (Jobs Development Authority) request for proposals from local contractors to con-struct building in the Industrial Park rather than going through normal bidding procedures, and authorization for the issuance of an RFP to local lending agencies for terms and conditions under which the funds could be lent to the JDA, that local lending agencies would be requested to give us a proposal on what the interest rate would be and that's the source of the match for the grant applica-tions, and authorization for pre-agreement costs associated with the construction of the building.

COUNCIL MEMBER BEYER REPORTED PRESENT

Mr. O'Leary stated they were requesting authorization to proceed with the construction of the building prior to the approval of EDA, that they feel EDA will act favorably on all three proposals and in order to get the project done in this building season, need to move quickly.

Mr. O'Leary reported that the source of funding for the local match will be a loan to the Jobs Development Authority. He reported
MINUTES/GROWTH FUND AUTHORITY
July 1, 1997 - Page 2

that staff has looked at the cash flow on the building and even with low occupancy on the building would be able to generate enough money from rental to service the debt on the loan, that risk to the City is minimal, and the building could be rented to Economic Development prospects and still give enough flexibility to provide some incentives to new businesses locating in the incubator.

It was moved by Council Member Bakken and seconded by Council Member Hanson to authorize the JDA to make application to EDA for the three grants and authorize the chairperson to sign the proper agreements. Carried 12 votes affirmative.

It was moved by Council Member Babinchak and seconded by Council Member Hafner to authorize JDA to request RFP's from local con-tractors for the construction of the building in the Industrial Park utilizing a short schedule of four days response time. Carried 12 votes affirmative.

It was moved by Council Member Hagness and seconded by Council Member Beach to authorize the issuance of an RFP to local lending agencies for the terms and conditions under which funds can be borrowed to meet the match requirements of the building project grant and the land acquisition grant. Carried 12 votes affirmative.

It was moved by Council Member Hagness and seconded by Council Member Hafner to authorize pre-agreement costs associated with the building project to coincide with the early start approval from EDA. Carried 12 votes affirmative.

ADJOURN

It was moved by Council Member Hamerlik and seconded by Council Member Beach that we do now adjourn.

Respectfully submitted,



John M. Schmisek
City Auditor