Committee Minutes

MINUTES/GROWTH FUND AUTHORITY
Monday, October 19, 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, October 19, 1998 at the hour of 7:00 p.m. with Chairman Carpenter presiding. Present at roll call were Council Members Brooks, Lucke, Hamerlik, Bouley, Carpenter, Lunak, Klave, Babinchak, Bakken, Hafner, Martinson and Mayor Owens - 12; absent: Council Member Glassheim, Beyer - 2.

HOLD PUBLIC HEARING AND CONSIDER APPLICATION
BY LM GLASFIBRE

a) LM Glasfibre

Chairman Carpenter opened the public hearing on the request before the Authority to approve an additional grant of $300,000 to the Grand Forks Development Corporation for purpose of securing per-manent financing to the LM Glasfibre building, and was approved unanimously by the Growth Fund Subcommittee on October 14.

There were no comments and the public hearing was closed.

It was moved by Council Member Babinchak and seconded by Council Member Klave to authorize the additional grant of $300,000 to the Grand Forks Development Corporation for the purpose of securing permanent financing for the LM Glasfibre building.

Pat Downs, Grand Forks Economic Development Corporation, stated they are asking for additional financing due to the project cost going up as they received bids to construct the building and need additional backup financing in the event their tax exempt bonding reaches a limit where they can't do the project. It was noted that the lenders required 25% equity for the project and may change that to 20% required. It was stated that they are waiting for the com-mitment letter from the bank - 80% of the construction cost and if that were to happen this backup financing probably wouldn't be necessary unless some unforeseen construction problems. Chairman Carpenter stated that what has occurred to date is the Economic Development Corporation has advanced the funds to continue the project so it can meet the deadline for occupancy of the building by April 1, 1999, and this will provide backup for that if the lenders don't come through.

Mr. Downs stated that they didn't use cost estimate, but were using per sq. ft. basis to estimate what the building might be and it was $15.00 sq.ft., bids higher than estimate ($5.5 million), that they have never built a building like this nor has anyone else in town, and are pushing schedule to get completed. He stated that the company was allowing them to go under the premise they were using with the per sq.ft. and LM and Development Corporation were in concert on this. It was noted that the rents LM Glasfibre will be paying will be enough to service the debt on the increased cost. MINUTES/GROWTH FUND AUTHORITY
October 19, 1998 - Page 2

Mr. Downs stated that the rental agreement was based on whatever the debt was going to be and very open ended, and their lease payments have gone up considerably.

Upon call for the question and upon roll call the following voted "aye": Council Members Brooks, Lucke, Hamerlik, Bouley, Carpenter, Lunak, Klave, Babinchak, Bakken, Hafner, Martinson and Mayor Owens - 12; voting "nay": none. Chairman Carpenter declared the motion carried.

APPROVE CHANGE ORDER FOR NOAH'S ARK

The city auditor read the recommendation from the Growth Fund Sub-committee who considered the matter of Change Order #5 for Noah's Ark building, and recommended approval of installation of smoke and heat removal vents and curtain boards in the amount of $182,630.00.

It was moved by Mayor Owens and seconded by Council Member Bouley to approve the recommendation to meet fire code requirements in the amount of $182,630.00.

Chairman Carpenter reported that the amount in the motion is slightly higher than in the information provided to council, that this is cost that actually came back from the contractor. It is hoped that this cost will be less and are still negotiating with the fire marshall not to have to do some of this in certain areas of the building. He stated this is something that came late in the process and have been working on for a number of months to try to prevent this from happening but to prevent it from happening needs to have a change in the National Fire Code; they have been moving very slow to make the change because of potential ramifications. He stated we are at the point where we need to proceed with the building so that the tenants can be in and if don't would be jeopardizing period of time for rents and have to find ways of funding our costs.

Upon call for the question and upon roll call the following voted "aye": Council Members Brooks, Lucke, Hamerlik, Bouley, Carpenter, Lunak, Klave, Babinchak, Bakken, Hafner, Martinson and Mayor Owens - 12; voting "nay": none. Chairman Carpenter declared the motion carried.

Chairman Carpenter asked if there was any other business.

Council Member Lucke stated that there's been a lot of discussion as far as economic development and its future in Grand Forks and that he's not sure if he fully understands the interplay of Grand Forks Economic Development Corporation, Jobs Corps. He stated he received a report from a predecessor on the Growth Fund - 1995 8th Annual Report, that looked very detailed, wealth of very good information, and asked if there is a current report that could be
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October 19, 1998 - Page 3

obtained and a position paper as to how these interplay with each other along with a complete list of commitments and contingent assets and liabilities that these funds have; have talked about funding sources being Noah's Ark revenues, rental rehab amounts and yet budget was pretty much usurped last year because there are commitments that we've made to projects, and would appreciate any information they could get on that.

John O'Leary, Urban Development, reported they missed a year in their annual report, were nearly completed in 1997 and staff is now preparing the report to cover the 2-year period, 1996 and 1997. He stated the report should be in detail and which includes assets and liabilities, status of each project going back to day one and com-plete financial picture of where JDA is at. Chairman Carpenter stated that the report doesn't get into relationships between entities and asked if possible to prepare a memo that talks about the different entities, the Corporation, Office of Urban Develop-ment and the Growth Fund. Mr. O'Leary stated that he and Mr. Olson had talked about that in terms of perhaps having a noon luncheon to walk the council through some of the projects that have been done and discuss the relationship between the Development Corporation and progress report as not everything you see in the Growth Fund report includes all the projects that have actually happened and have been lining up a luncheon to address those issues.

COUNCIL MEMBER POLOVITZ REPORTED PRESENT

Dick Olson, Grand Forks Economic Development Foundation, stated he would like to follow up with what Mr. O'Leary just said, by inviting the Mayor or Chairman Carpenter as JDA chair to set up a meeting, that sometime ago they passed out the five-year strategic plan and would like to walk committee through that, and inter-actions and not just their office but a lot of other agencies in the city that get together to make things happen, have talked about having a committee of the whole meeting or whatever format they would like and to do soon as there are a lot of things going on now in decision making process. He stated they would be delighted to host a meeting or to provide speakers in a presentation.

ADJOURN

It was moved by Council Member Hamerlik and seconded by Council Member Brooks that we do now adjourn. Carried 13 votes affirmative.

Respectfully submitted,


John M. Schmisek, City Auditor