Committee Minutes

MINUTES/GROWTH FUND AUTHORITY (JDA)
Tuesday, September 16, 2002 - 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 Tuesday, September 17, 2002 at the hour of 7:00 p.m. with President Gershman presiding. Present at roll call were Council Members Brooks, Glassheim, Hamerlik, Gershman, Christensen, Kerian, Kreun, Mayor Brown - 8; absent: none.

HOLD PUBLIC HEARING ON APPLICATION BY
LM GLASFIBRE FOR PROPOSED PURCHASE OF
FACILITY AT 1580 SOUTH 48TH STREET

The city auditor read the staff report from the Grand Forks Growth Fund submitted through the Office of Urban Development relating to the LM Glasfiber purchase offer with the following recommendation of the grand Forks Growth Fund Committee to:
1. Enter into a purchase agreement with LM Glasfiber for the sale of the facility at 1580 South 48th Street that requires closing by March 31, 2002.
2. The purchase price shall be in the approximate amount of $4.8 Million required to satisfy the outstanding Industrial Revenue Bonds and EDA Revolving Loan. The purchase price is subject to adjustment to actual balances, plus accrued interest and any penalties, etc. on the closing date.
3. Lease payments held in excess of debt service requirements by the Grand Forks Growth Fund and Economic Development Corporation (EDC) will be applied to the p9urchase of the property.
4. To forgive the estimated land value of $225,000 and to forgive the $500,000 CDBG loan used in the financing package for the original facility construction.
5. LM Glasfiber will directly assume the remaining principal balance of the MATCH load of $3.3 Million, plus accrued interest, plus any associated fees.
6. To provide $200,000 to LM Glasfiber for the installation of a paved parking area removed for the construction of the 38,000 square foot expansion facility.
7. A Letter of Intent will be signed by all parties agreeing to the above purchase terms.

It was moved by Council Member Hamerlik for approval of the recommendation as read; seconded by Council Member Glassheim.

President Gershman opened the public hearing, there were no comments and the public hearing was closed.

Jim Melland, Economic Development Corporation, reported he has worked with LM Glasfiber for the last three years, the company manufactures blades which are used in wind-powered generator turbines, these are the big blades that you see out in the fields that generate electricity from the wind. The company is based in Denmark and their plant in North Dakota is their only North American presence, they are in several other companies internationally and are the leader in their field in manufacturing these fiberglass blades for wind-turbine generators, and the company was established here a little over three years ago and have been manufacturing the blades and supplying the US and Canadian market and working in the Mexican market also from this location. They have had growth and expect that their growth is going to boom - industry and project a five-fold increase in the installation of these types of generators over the next 8 years, through the year 2010. The company internationally enjoys a commanding market share in this field and we are very pleased to have them here with their North American presence in Grand Forks.

Mr. Melland reported that upon the completion of the purchase of this property, the company will have an investment in excess of $10 million at their site in Grand Forks, they currently are employing about 125 people, and as part of this deal they need to reconfigure part of the existing facility because the original configuration was for a certain size blade and as the industry keeps changing, the length of the blade is getting much longer and they could not manufacture the new-market demanded blades of the exact length without doing some reconfiguration in the plant. The company has already invested $5 million in the facility out there on their own money that they have brought into this facility. He stated they are currently employing about 120-125 people and are one of the premier employers in our manufacturing sector, that their average pay for production workers amounts to something in the $30,000 annual salary range, they also provide a tremendous benefit package equal to or exceeding other employers in this sector. They have permanent management, professional and technical staff with average salaries in the upper end of that range in the industrial and manufacturing sector in our community.

Council Member Brooks stated that this is a company we are familiar with and came to economic development for a partnership and been a success story for us in a booming industry. Mr. Melland stated that Mr. Craig Hoiseth, CEO of LM Glasfiber, Inc. made the presentation to the Growth Fund Committee but could not be here this evening.

Council Member Glassheim stated that at the presentation he was extremely impressed and he presented a philosophy that happy employees and decently paid employees were by design were better for their business than the reverse and it was the right attitude and right approach to business and because employees have been treated well, they have made some improvements in the blade configuration, which saved the company money. It is a good company and pleased that we are to support this.

President Gershman stated it was a real testimony, not only to the company, but also to the employee base we have in Grand Forks too that they have decided to start their North American headquarters here and expand in Grand Forks. He stated on tonight's news there was a Florida company that will be building 40 wind towers in SE North Dakota and one of the reasons they are doing that is because of the legislation, the tax benefits passed at the State Legislature, and because the blades are here and could become a very important business and could continue to grow.

Upon call for the question on the motion and upon roll call the following voted "aye": Council Members Brooks, Hamerlik, Glassheim, Gershman, Christensen, Kerian, Kreun, Mayor Brown - 8; voting "nay": none. President Gershman declared the motion carried.

ADJOURN

It was moved by Council Member Hamerlik and seconded by Mayor Brown that we adjourn. Carried 8 votes affirmative.

Respectfully submitted,


John M. Schmisek, City Auditor