Committee Minutes

MINUTES/GROWTH FUND AUTHORITY (JDA)
Monday, October 25, 2004 - 7:00 p.m.____________

The city council of the City of Grand Forks sitting as the JDA (Growth Fund Authority) met in the council chambers in City Hall on Monday, October 25, 2004 at the hour of 7:00 p.m. with Chairman Gershman presiding. Present at roll call were Council Members Brooks, Hamerlik, Glassheim, Christensen, Kerian, Kreun, Brown, Gershman - 8; absent: none.

Public Hearing and consideration of Growth Fund Application
for Acrylon Composites, Inc.

The staff report from the Urban Development director relating to Acrylon Composites, Inc. with recommendation to hold a public hearing on the proposed funding for Acrylon Composites, Inc. and approve the loan to Acrylon Composites, Inc. for $250,000 at 4% , with a ten year amortization, and a balloon payment after 3 years proceeds of which will be used to acquire assets of New Vision Fiberglass manufacturing division and for use as working capital.

Chairman Gershman opened the public hearing.

Jim Melland, Economic Development Corporation, stated that this is a ND Company established about a year ago, which is a wholly owned subsidiary of a Winnipeg based company that has been manufacturing fiberglass parts for various companies in North America for the last 20 years. They are acquiring the manufacturing division of New Vision Fiberglass, a local company that has been manufacturing and selling pickup toppers in our community for several years. New Vision is divesting itself of its manufacturing division in order to concentrate on their strongest area which is retail sales of their topper products. Acrylon will take over the manufacturing and the contract to continue manufacturing products for New Vision, in addition to bringing down some of their other contracts from their Winnipeg parent company such as Bombardier and FONAR, making parts primarily for boats that those companies make. Mr. Melland added that the company currently employs three people, and following the acquisition this will be increased to a total 38 employees by the end of December 2005 with average wages of $14-15 per hour across the spectrum of employees. Mr. Melland stated that the proposal before the group was for a $250,000 loan from the Growth Fund, to be used to acquire molds to make the parts and additional equipment to produce the parts. The terms of the loan are to be amortized over ten years with a three year call and will be coming from designated funds of the Growth Fund called the EDA Revolving Loan Funds.

Council Member Kerian inquired whether the Growth Fund has any existing financial relationship with New Vision. Keith Lund, Office of Urban Devleopment, stated that there was no current existing relationship with New Vision. Council Member Kerian inquired in regards to the form and the current and projected employment and the gender makeup that was listed and whether the jobs would require that gender makeup or if it was just our form that causes that breakdown. Mr. Lund stated that this is purely a function of our form, which is currently under review to determine whether it is appropriate to continue having such a breakdown in the application. He added that to his knowledge the jobs will all be listed openly. Mr. Melland added that the three female employees that are listed are existing employees of New Vision that will be coming on board with Acrylon and that the remaining positions will be openly advertised.

Council Member Brooks stated that the loan is for $250,000 and the report shows this will be secured by the equipment and machinery as well as by a guarantee from the principal. Mr. Melland clarified that the guarantee is from the parent company, not an individual owner of the company. Council Member Brooks stated that in reviewing this deal it appears this is a very good loan and pure economic development for the community. Mr. Melland stated that both a local bank and the North Dakota Development Fund also have a loan with this company.

Chairman Gerhsman asked for clarification on the interest rate, as some forms stated 4% and there was also a reference to a 4.5%. Mr. Melland stated that it is a 4% loan. Chairman Gershman stated that Growth Fund loans often times help leverage other funds that the banks can assist businesses.

Chairman Gershman declared the public hearing closed.

It was moved by Council Member Kerian and seconded by Mayor Brown that this recommenda-tion be approved. Carried 8 votes affirmative.

ADJOURN

It was moved by Council Member Kreun and seconded by Council Member Brooks that we adjourn. Carried 8 votes affirmative.

Respectfully submitted,



Saroj Jerath
Deputy City Auditor