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MINUTES/GROWTH FUND AUTHORITY
Monday, August 16, 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, August 16, 1999 at the hour of 7:15 p.m. with Chairman Carpenter presiding. Present at roll call were Council Members Brooks, Lucke, Hamerlik, Bouley, Carpenter, Lunak, Klave, Babinchak, Hafner, Martinson, Owens - 11; absent: Council Members Polovitz, Glassheim, Beyer, Bakken - 4.

APPROVE MATTER OF TENANT IMPROVEMENTS
FOR NOAH’S ARK

The city auditor read the recommendation from the committee to authorize approval of additional project costs in the amount of $2,548.82 for a total project of $27,548.82, that the tenant improvements will be paid for by increased rent to the tenant in the amount of the total improvements amortized over the lease term.

Chairman Carpenter reported that this is an item that was approved up to $25,000, that costs were higher than anticipated and this is to authorize the additional expenditure, all to be paid through increased rents from the tenant, Modern Information Systems.

It was moved by Council Member Hafner and seconded by Council Member Martinson that this recommendation be and is hereby approved. Upon roll call the following voted “aye”: Council Members Brooks, Lucke, Hamerlik, Bouley, Carpenter, Lunak, Klave, Babinchak, Hafner, Martinson, and Mayor Owens - 11; voting “nay”: none. Chairman Carpenter declared the motion carried.

APPROVE MATTER OF TENANT IMPROVEMENTS
FOR 917 SOUTH 46TH STREET

The city auditor read the recommendation from the committee is to authorize approval for an additional 6,440 sq. ft. of concrete to the building at a cost of $3.15 plus curb and gutter to the front parking lot, for an additional cost of $26,385.00, which brings the total cost to $56,565.00.

Chairman Carpenter reported that this is an item that was before committee, that they determined that there was additional sq. footage that had to be done to provide access to all the tenants to the back.

It was moved by Council Member Babinchak and seconded by Council Member Lunak that this recommendation be and is hereby approved.

Terry Hanson, Urban Development, reported that the curb and gutter portion that circles the parking lot in front is approx. $6,100.00, and the balance of the increase is due to the 6,440 sq. ft. in the back

Upon roll call the following voted “aye”: Council Members Brooks, Lucke, Hamerlik, Bouley,
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Carpenter, Lunak, Klave, Babinchak, Hafner, Martinson, and Mayor Owens - 11; voting “nay”:
none. Chairman Carpenter declared the motion carried.

MATTER OF GRANT AND SALE OF 2 AND 4
SOUTH 3RD STREET

The city auditor read the recommendation to approve the sale of the property to Michael Conneran for $107,500.00 contingent upon the execution of a development contract that includes the conditions listed:

1) eligible main floor renovation expenditures must be $185,000 or greater.
2) purchaser must provide 85 percent match to any grant funds.
3) submission of a floor plan and scope of renovation for prior approval by the DDC with any future changes to be approved by the Urban Development staff.
4) at least two bids must be submitted for the proposed scope of renovation.
5) must have selected contractor provide a contractor’s performance bond for the amount of the agreed upon renovations.
6) that the project be completed within 90 days of the acceptance of this offer as indicated in his proposal unless otherwise extended by DDC recommendation.
7) must comply with all CDBG requirements
8) must carry flood insurance on the property greater than or equal to the construction cost, or the maximum available, whichever is lower.
9) tenants must be approved by the DDC or its successor
10) a lien will be placed on the property equal to the amount of any grant funds and the immediate repayment of the grant funds will be required if any conditions of the grant agreement are not met.

It was moved by Council Member Hafner and seconded by Council Member Bouley that this recommendation be and is hereby approved.

Gary Christianson reported that the conversations for that area have focused around specialty shops and significant levels of improvements to the properties, that the proposer did list some businesses that he was specifically trying to put into that location; and his commitment to the level of renovations to that property was part of what wanted to see in that area, and in that proposal there was a requirement for matched funds for the grant money and the level of renovation that Mr. Conneran proposes in that property justifies that extra grant money based on the requirements in that proposal.

Mr. Christianson reported that Mr. Sampson did talk about specialty shops in his proposal but didn’t have any specific ideas of what he was going to do, and his level of investment in the property was substantially less, just enough to get what he was asking for in grant money, and that level of investment was not as significant (would only need to provide at least 80% match
for any grant funds), so Mr. Sampson’s $90,000 would substantiate his request for $50,000 in
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grant money; that Mr. Conneran’s request for $100,000 in grant money would be substantiated
with $180,000 investment but he also committed to 85% match on that.

COUNCIL MEMBER POLOVITZ REPORTED PRESENT

COUNCIL MEMBER GLASSHEIM REPORTED PRESENT

Council Member Lunak questioned what Mr. Conneran would be doing with the second floor of the building. Mr. Christianson stated that he intends to rent those apartments that are rentable and make some improvements to the extent necessary; most of the apartments are in good shape.

Mr. Christianson reported that the JDA has the ability for economic development purposes to negotiate straight with somebody that they to sell a property to, would not have to advertise and

very similar to Economic Development Group going out and negotiating for purchase of property, but have not felt comfortable with that and have chosen to advertise all of these so would an opportunity to view as many proposals as possible.

Upon roll call the following voted “aye”: Council Members Polovitz, Hamerlik, Bouley, Glassheim, Carpenter, Klave, Babinchak, Hafner, Martinson, and Mayor Owens - 10; voting “nay”: Council Members Brooks, Lucke, Lunak - 3. Chairman Carpenter declared the motion carried.

OTHER BUSINESS

Council Member Lunak stated that we gave Agsco a PACE loan buydown of $80,000 about six weeks and about two weeks ago read in the paper that they were going to lay off 10% of their employees, and he promised us 20 jobs until June of 2000, and asked what happens in a position like that and asked if anyone is monitoring these businesses as to jobs that are to be created.

John O’Leary, Urban Development, reported that JDA does monitor all the recipients of Growth Fund funds whether it’s a loan or grant, or whatever the nature of the assistance is, contact all of the businesses each year as to number of employees, average salaries, whether increase or decrease expansion plan, etc. and normally they put out an annual report, and that report should be done very soon, that they didn’t put one out last year as didn’t have the time to do it, that report is in a lot of detail about the total revenues that business brings into the community, both directly through payroll and indirectly through other kinds of sources. He stated that from time to time that a business not only grows but sometimes shrink and sometimes go out of business, and all of those scenarios will be in the report. Council Member Hafner stated that a number of those jobs from Agsco are not in Grand Forks that are being deleted.

ADJOURN

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

Respectfully submitted,



John M. Schmisek
City Auditor