Committee Minutes

MINUTES/GROWTH FUND AUTHORITY
Monday, July 6, 1998 - 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, July 6, 1998 at the hour of 7:00 p.m. with Chairman Carpenter pre-siding. Present at roll all were Council Members Brooks, Lucke, Hamerlik, Bouley, Carpenter, Lunak, Klave, beyer, Babinchak, Bakken, Owens - 11; absent: none.

HOLD PUBLIC HEARINGS ON APPLICATIONS FOR
FUNDING

a) Telpro, Inc.

The city auditor read the recommendation from the Growth Fund Sub-committee to approve of a loan of up to $75,000 at 6% interest for a term of 5 years, and approval of a PACE interest subsidy loan of an amount up to $134,600 at zero interest to Oakwood Associates to be repaid starting at the time the PACE loan is paid in full at the same payment rate as the PACE loan.

COUNCIL MEMBER HAFNER REPORTED PRESENT

Chairman Carpenter called for the public hearing. There were no comments and the public hearing was closed.

It was moved by Council Member Babinchak and seconded by Council Member Beyer to approve the recommendation of the Growth Fund. Upon roll call vote the following voted "aye": Council Members Brooks, Lucke, Hamerlik, Bouley, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner, Owens - 12; voting "nay": none. Chairman Carpenter declared the motion carried.

b) Master Potato

The city auditor read the recommendation from the Growth Fund Sub-committee to approve a PACE interest subsidy loan of an amount up to $4,000 at zero interest to be repaid starting at the time the PACE loan is paid in full at the same payment rate as the PACE loan.

Chairman Carpenter called for the public hearing. There were no comments and the public hearing was closed.

It was moved by Council Member Babinchak and seconded by Council Member Bakken to approve the recommendation of the Growth Fund. Upon roll call vote the following voted "aye": Council Members Brooks, Lucke, Hamerlik, Bouley, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner, Owens - 12; voting "nay": none. Chairman Carpenter declared the motion carried.

CONSIDER MATTER OF UPGRADE OF VENTILATION
SYSTEM IN FTZ BUILDING
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July 6, 1998 - Page 2

The city auditor read the recommendation from the Growth Fund Sub-committee to upgrade the ventilation system in the Foreign Trade Zone building with the cost being shared 50% by the Growth Fund and 50% by an increase to Hood Manufacturing's lease.

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

COUNCIL MEMBERS POLOVITZ AND GLASSHEIM
REPORTED PRESENT

Terry Hanson, Urban Development, reported that this motion came through the committee at $75,000, that they received bids from McFarlane Sheet Metal to do work and it came in at $81,225 which was discussed. It was noted that the motion is to approve increase of $6,225.00.

Upon roll call vote the following voted "aye": Council Members Brooks, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner, Owens - 14; voting "nay": none. Chairman Carpenter declared the motion carried.

HOLD PUBLIC HEARING ON APPLICATION FROM
GRAND FORKS REGIONAL ECONOMIC DEVELOPMENT
CORPORATION

The city auditor read the recommendation to approve the following items contingent upon receipt of a three-year letter of credit for lease payments on a ten-10 year lease review of the Company financial statements in U.S. currency: 1) $400,000 loan at 4.50% for a period of 15 years, 2) land grant of approx. 6 acres in the Industrial Park for a value of $200,000, 3) approval for the JDA to enter into a 15-year lease with the Economic Development Corpora-tion and a 10-year, triple net lease, with cost sufficient to cover debt, with LM Glasfiber; and $500,000 equity participation grant from the City of Grand Forks CDBG funds.

Chairman Carpenter called for the public hearing.

Pat Downs, Economic Development Corporation, stated that one of the caveats was that this was a proposal to the Company from our side of the table and in discussions earlier today the Company was in agreement with the recommendation except for the term of the lease
and gave us an option of going to 5-year lease of which they would guarantee with a letter of credit or other instrument for the whole five years.

Council Member Hamerlik questioned how CDBG money became involved in this. Mr. Downs reported that was part of the equity package from the Development Corporation to go forth to the banks to get the debt financing to finance the building, and they will be
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July 6, 1998 - Page 3

financier of the building, and needed some assistance in getting enough down payment to make it a good debt for the banks. He stated that if hey were to own the building for 15 years and pay off their debt, get deed to the building, and will deed building to City; if they sell the building within the zero to 15 years, part of the caveat was to get that grant money back, $500,000, which would be returned to the City with 6% interest.

COUNCIL MEMBER MARTINSON REPORTED PRESENT

Mr. Downs stated this is loan and not a grant, money will come back to the City, by paying off the building and building deeded to City or sell the building and return the money. It was reported that money would go back into Community Development Block Grant Program income and has stipulations on it.

There was some discussion re. use of the building if this company did not stay, Mr. Downs stated footprint of the building is 120'x 480', pre-stressed concrete building, and useable for other pur-poses; could be used for warehousing, manufacturing or other pur-poses, could be cut in half. It was noted they would start with 80 jobs before end of first year, 7 administrative jobs.

It was moved by Council Member Beyer and seconded by Council Member Brooks to approve the recommendation of the Growth Fund, with five-year lease with letter of credit.

It was reported that the Subcommittee recommended using the $500,000 equity participation grant, but Authority doesn't have the spending control over the CDBG and has to go through the council and not through the Jobs Development Authority; that the Subcommit-tee is recommending to commit the $500,000 out of the Economic Development monies that has been allocated from CDBG. Mr. Downs reported that is on the council agenda under the Flood Response items.

Upon roll call vote the following voted "aye": Council Members Brooks, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner, Martinson, Owens - 15; voting "nay": none. Chairman Carpenter declared the motion carried.

CONSIDER MATTER OF ECONOMIC DEVELOPMENT
ADMINISTRATION REVOLVING LOAN FUND,
MATCHING FUNDS

The city auditor read the recommendation to approve utilizing $222,223 of Growth Fund budgeted dollars matching funds for the EDA Revolving Loan Fund.

Chairman Carpenter reported that this recommendation from the
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Subcommittee is that when the money comes back in don't have the restrictions that would be on the CDBG money if that was utilized.

It was moved by Council Member Bakken and seconded by Council Member Polovitz to approve the recommendation. Upon roll call vote the following voted "aye": Council Members Brooks, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner, Martinson, Owens - 15; voting "nay": none. Chairman Carpenter declared the motion carried.

CONSIDER NOAH'S ARK PROJECT SUMMARY

The city auditor read the recommendations from the Subcommittee for approval of 1) installing a 50 pair phone line to provide phone access to warehouse bays 5 through 11; 2) to recommend establishing a budget of up to $100,000 for the landscaping, signing and painting of the building and to request the appropriate bidding of these items with an amendment to accept going ahead with the sod and seeding being done in-house; and 3) to approve Change Order #3 for $665.00.

It was moved by Council Member Hafner and seconded by Council Member Klave to approve the recommendation. Upon roll call vote the following voted "aye": Council Members Brooks, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner, Martinson, Owens - 15; voting "nay": none. Chairman Carpenter declared the motion carried.

CONSIDER REFERRAL FROM DDC RE. SETTING
ASIDE FUNDS FOR RENOVATING THE FIRST
NATIONAL BANK BUILDING

John O'Leary, Urban Development, reported that a referral from the DDC should have been on the agenda, that the DDC and Jobs Develop-ment Authority had discussed setting aside $250,000 towards reno-vating the First National Bank Building, because of the Historical Preservation regulations involved the developer of that building has requested that instead of the $250,000 being put into the First National Bank Building renovation, that money be used to open up a walkway between 402 DeMers (building under construction) on the northwest corner of 4th and DeMers and the old parking ramp, and this was not part of the original plan because both of these buildings were to be served by the new parking ramp which is under construction on South 4th Street. By doing that, the developer feels that the necessary parking that he needs to make redevelop-ment of that building a realty will be provided by the existing ramp on North 4th Street. The motion that came out of DDC was that the DDC dedicate $250,000 in funds to be put in cantilevered walk-way on the Corporate Building using funds from the $2.8 Million that was set aside for Downtown Redevelopment. He stated he has a memo to this effect directed to the DDC from himself, that this
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item needs to be referred to the council from the JDA.

It was moved by Mayor Owens and seconded by Council Member Glassheim to recommend to the city council to allocate $250,000 of part of the $2.8 Million for Rehab Downtown.

It was noted that this could be placed on the July 20 council meeting agenda.

Upon call for the question and upon voice vote, the motion carried 15 votes affirmative.

ADJOURN

It was moved by Council Members Hamerlik and Polovitz that we do now adjourn. Carried 15 votes affirmative.

Respectfully submitted,



John M. Schmisek
City Auditor