Committee Minutes

Minutes of Grand Forks City Council/Growth Fund
Authority (JDA) - Monday, May 19, 2008 - 5:30 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, May 19, 2008 at the hour of 5:30 p.m. with Vice Chairman Glassheim presiding. Present at roll call were Council Members Hutchison, Christensen, Kreun, Glassheim, Mayor Brown - 5; absent: Council Members Gershman, Bakken - 2.

HOLD PUBLIC HEARING ON FUNDING REQUEST FROM
PRIBULA ESTATES, LLC AND APPROVE PACE LOAN

Council Member McNamara reported present.

The staff report from Urban Development director relating to Application from Pribula Estates, LLC with recommendation to hold public hearing on the funding request from Pribula Estates, LLC and approve a PACE loan to Pribula Estates, LLC of up to $97,000.

Vice Chairman Glassheim opened the public hearing.

Keith Lund, Grand Forks Regional Economic Development Corporation, reported that the project before council is the Pribula Estates, LLC on behalf of American Defense Industries, prime contractor for the Department of Defense, and that American Defense specializes in manu-facturing of metal components for military vehicles, the company is owned by Tim Pribula, and that American Defense is a young company opening in late 2004, and in its first year's operation in 2005 the company realized $800,000 in sales and last year, 2007, sales had grown to $3 million with over 280% increase. The company has invested nearly $1.8 million in equipment and automation to maximize production capabilities over their short tenure, the company is on the path of managed but strong growth and adding between 10 and 11 new employees a year and currently have 34 employees. The company's future growth is limited now by the size of their manufacturing facility and is planning to construct a 19,000 sq.ft. addition to its existing plant. The First State Bank in Grand Forks with participation from the Small Business Administration has approved a $610,000 financing project, packaged for the project; Pribula Estates, the real estate holding company of American Defense is requesting an approx. $96,235 PACE loan from the Growth Fund with a leverage and approx. $178,723 grant from the Bank of North Dakota that will be used collectively to reduce interest rate on First State Bank's loan. The PACE Program will allow for the construction of the larger addition to support the company's future growth, the expansion will permit the addition of 6 additional employees in the first year with a minimum of 10 planned in two years. The Growth Fund Committee considered this request at their meeting on May 7 and recommended its approval with the terms outlined in the staff report.

There were no comments from the general public and Vice Chairman Glassheim closed the public hearing.

It was moved by Mayor Brown and seconded by Council Member Kreun to approve the recommendation and to approve the terms outlined in the staff report. Carried 6 votes affirmative.

ADJOURN

It was moved by Mayor Brown and seconded by Council Member Kreun that we adjourn. Carried 6 votes affirmative.

Respectfully submitted,



John M. Schmisek
City Auditor