Committee Minutes

MINUTES/GROWTH FUND AUTHORITY
Monday, October 18, 1999 - 7:15 p.m.______

The city council of the city of Grand Forks sitting as the Growth Fund Authority met at the council chambers at City Hall on Monday, October 18, 1999 at the hour of 7:15 p.m. with Chairman Carpenter presiding. Present at roll call were Council Members Brooks, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, and Mayor Owens - 13; absent: Council Members Hafner, Martinson - 2.

HOLD PUBLIC HEARING ON APPLICATION
FOR FUNDING ASSISTANCE BY NORTH CENTRAL
MANAGEMENT GROUP, INC.

Chairman Carpenter presented the matter of consideration of application for funding assistance by North Central Management Group, Inc. (Blockbuster Video), 525 Demers Avenue.

The city auditor read the recommendation from the Growth Fund Subcommittee as follows: that the recommendation from the Growth Fund is approval of PACE interest subsidy loan of $24,289.42 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 on the application and asked for comments. There were no comments and the public hearing was closed.

It was moved by Council Member Hamerlik and seconded by Council Member Glassheim to approve the motion of the Growth Fund Committee.

Kevin Seeger stated they were purchasing the building at 525 DeMers Avenue; that North Central Management Group did not receive any grant money, but Blockbuster did receive grant money for the south location right after the flood. He stated that North Central Management is a management entity that runs a chain of Blockbuster stores throughout the upper midwest and the Grand Forks locations are two locations that Seegers manage and operate; and that the principals of North Central Management Group are also partners in the various entities that own the Blockbuster stores located throughout the North Dakota/South Dakota and Minnesota areas.

Chairman Carpenter stated they are recommending is in effect sending to the Bank of North Dakota up to $24,289.42, which they will hold in an escrow account to be used to buy down the interest rate, that at the time that North Central Management has repaid their PACE loan through the Bank of North Dakota then they will start making payments to the Growth Fund to repay that $24,289.42, that their monthly payments will be the same monthly payment amount that they would be paying to pay down the full loan, and we would charge them no interest. They ultimately will repay the Growth Fund.

MINUTES/GROWTH FUND AUTHORITY
October 18, 1999 - Page 2________________

Council Member Lucke asked what the Growth Fund is trying to accomplish and why does
this business qualify. Chairman Carpenter stated this business qualifies because it is not a retail business and it’s bringing in out of area dollars as it sells its services. Mr. Seeger stated that what they have created is a data processing center and will be communicating via satellite to Blockbuster Video Stores throughout the region, and the business they are trying to develop is a business that will be communicating via satellite through the data processing center here in Grand Forks with Blockbuster Stores coast to coast, they’ve been participating for the last two years in software development in the industry to be able to get to this point, to be able to service stores via satellite communications and this center will have data storage, payroll functions, financial information functions, and also marketing product in those areas and will be pulling in information from all across the country via satellite.

Mr. Seeger stated that with the program they applied for they can do everything they had planned for that property and building working and operational, and wouldn’t be back for any other grant money concerning this building.

Upon call for the question and upon roll call vote, the following voted “aye”: Council Members Brooks, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Klave, Beyer, Babinchak, Bakken, Owens - 12; voting “nay”: Council Member Lunak - 1. Chairman Carpenter declared the motion carried.

ADJOURN

It was moved by Council Member Polovitz and seconded by Council Member Hamerlik that we do now adjourn. Carried 14 votes affirmative.

Respectfully submitted,



John M. Schmisek
City Auditor