MEETING NOTICE

CHATFIELD ECONOMIC DEVELOPMENT AUTHORITY 5:30 p.m., Thursday March 26, 2015

Chatfield Center for the Arts Chatfield, Minnesota

AGENDA

I. Call To Order

II. Approval/Acceptance/Statutory A. Minutes of the February 26, 2015 Meeting

III. Business

A. EZ Fabricating Public Utility Extension: Request to Revise Invoice B. Downtown Façade Improvement: Review C. Journey 2 Growth: Discuss Request for Support D. Revolving Loan Fund E. Prospects/Community Update

i. Chatfield Center for the Arts ii. Twiford Street Redevelopment Area

iii. Cabin Coffee TIF Request iv. Hotel Market Study

IV. Other Business

V. Adjourn

Chatfield Economic Development Authority Thurber Community Center - Chatfield Municipal Building 21 Second Street SE Chatfield, MN 55923 Voice 507.867.1523 Fax 507.867.9093 www.ci.chatfield.mn.us

CITY OF CHATFIELD

ECONOMIC DEVELOPMENT AUTHORITY MEETING MINUTES THURSDAY FEBRUARY 26, 2015

MEMBERS PRESENT: M ICHAEL TUOHY, SUE KEEFE , RANDY PAULSON , , PAUL NOVOTNY, AND M IKE

URBAN

MEMBERS ABSENT : MOLLY BAUM AND CANDI HARE

OTHERS PRESENT: GREG SCHAITEL AND CHRIS G IESEN

With a quorum present, the regular & annual meeting was called to order at 5:30 PM at the Chatfield Center for the

Arts by Tuohy.

A. The board held elections for 2015 board officers. Motion by Paulson, second by Keefe to cease

nominations and cast a unanimous ballot as follows: Michael Tuohy, Chair; Mike Urban, Vice Chair; Sue

Keefe, Secretary; Randy Paulson, Treasurer. The board discussed. Motion carried unanimously.

B. Tuohy appointed the following board members to serve on the following standing EDA committees:

Randy Paulson, Paul Novotny, Michael Tuohy to serve on the loan committee; Molly Baum and Candi

Hare to serve on the Chatfield Center for the Arts advisory committee. No other appointments were

made or standing committees created.

Novotny entered the meeting at 5:37 PM.

C. The minutes of the January 29, 2015 meeting were reviewed. Motion by Keefe, second by Urban to

approve the minutes as presented. Motion carried unanimously.

D. Mr. Greg Schaitel presented a request to support a project he and other local volunteers were working

on. He told the board that an effort was moving forward to secure grant funding and donations to

procure the creation of a Fillmore County master trail plan. The master plan would include existing trails

as well as potential future routes and would consider all the various obstacles in order to outline the best

route options. He said that in order to get funding for acquisition and construction of future trails, a

master plan must be in place. He listed various other organizations that had given support including

Fillmore County, as well as some that have given financial support. He asked the EDA to consider

approving a resolution of support. Motion by Keefe, second by Paulson to resolve as follows:

RESOLUTION

SUPPORTING CONNECT TRAILS:

A REGIONAL TRAIL CONNECTIONS INITIATIVE

WHEREAS, the Southern Minnesota Initiative Foundation is

providing up to $100,000 in funding for Regional Community

Growth Initiatives, and;

WHEREAS, the Regional Community Growth Initiative Core

Leadership Team is seeking initiatives that showcase the quality of

life in the region, and;

WHEREAS, Southern Minnesota is uniquely positioned to provide

an extensive compliment of recreational activities and amenities, and;

WHEREAS, Connect Trails has been designated as one of four

project teams to present their project plans to the Regional

Community Growth Initiative Core Leadership Team and community

members in a public forum on Saturday, February 21, 2015 at the

Rochester International Event Center, and;

WHEREAS, the Connect Trails Project Team seeks to take

advantage of the strength found in working together to achieve

mutually beneficial outcomes within Southern Minnesota,

NOW, THEREFORE BE IT RESOLVED, that the Chatfield

Economic Development Authority supports the Connect Trails

Project Team’s regional initiative.

Adopted this 26th day of February 2015.

E. Giesen presented a request for assistance from Alicia Hinckly and EB Allen. They plan to build a Cabin

Coffee restaurant franchise in Chatfield, near Hwy 52 and Union Street. The project is expected to cost

about $650,000-$750,000 depending on final design but the project has identified $81,000 needed for site

redevelopment and are requesting tax increment financing to assist. Giesen said that if the EDA wishes

to consider moving forward with considering this assistance, the board should adopt a motion to initiate

the process. He mentioned that the type of TIF district to be created would be under EDA authority

similar to the Twiford TIF district which will require a joint meeting with the City Council on April 27,

2015. He also mentioned that per policy, the applicants will be responsible to pay TIF district set up fees.

Motion by Paulson to move forward with the request as proposed, second by Keefe. Motion carried

unanimously.

F. Giesen gave an update on the Family Dollar project. He said nothing had changed in the past month and

that the developer is still waiting for renewed lease contracts from the new owners. Urban asked if the

new owners would have the same site layout parameters that might allow the project to move forward

involving less cost. Giesen said he would investigate with the developer.

G. Giesen discussed the second lot, “Parcel B,” in an effort to clarify the board’s intentions regarding it. He

said that he had received a few calls and wanted to confirm that the message he was relaying to prospects

was accurate. The board confirmed that it would consider offers for redevelopment for commercial

purposes only.

H. Giesen presented the next proposed contract agreement for the design phase of the Chatfield Center for

the Arts with architect, LHB, Inc. The board discussed. The total amount of the proposal was $89,952

plus expenses. Giesen said it was covered by the state grant and that the CCA advisory committee had

recommended the contract’s approval. Motion by Keefe, second by Novotny, to approve the contract

with LHB, Inc. as presented.

Giesen also mentioned that the final contract approved earlier for the construction manager came in at a

slightly lower than expected.

I. Giesen gave an update on the status of loans.

J. The board discussed a request to contribute financially to the Journey 2 Growth project that is happening

in conjunction with DMC. The board discussed potential benefits, especially if there was an appointed

person to stay in touch with the project, but no decision was made. Consensus of the board was to bring

it up again at the next meeting.

K. Motion to adjourn by Paulson, second by Keefe. Motion carried unanimously. The meeting adjourned

at 6:28 PM.

Respectfully submitted by: Chris Giesen

EDA President Signature: ____________________

Michael P. Tuohy

March 26, 2015 To: Chatfield EDA From: Chris Giesen RE: EZ Fabricating Public Utility Extension: Request to Revise Invoice

Background: In 2013, the EDA recommended approval of several items in relation to EZ Fabricating’s expansion. Per the development agreement with the business, the city agreed to extend water and sewer to the business’ property. At the time the agreement was negotiated and signed, this public infrastructure project had not been fully designed so the exact locations of water/sewer mains, location of the building’s service line, extent of rock to excavated, etc…was unknown. All estimates were based on the city engineer’s desktop estimates. Staff communicated to the business that it would be responsible for the cost of extending water and sewer from the current location to the building’s point of service (wherever that might end up being, as at the time it was unknown) and that the city’s responsibility would be “anything beyond extending water and sewer from its existing location to your property’s point of service.” The city received $90,753 from the state to extend water, sewer, and improve St. Albans Place. The grant would not be available if all three aspects were not included. The intent always communicated was that the grant funds would be pro-rated across the project accordingly. Based on the project as built, EZ Fabricating was sent an invoice for $36,666.88 which covers the utility extension to its point of service, less grant. EZ Fabricating disagrees with this invoiced amount. It contends that the city’s intention was to have the business only be responsible for an amount that would have installed water and sewer from the existing location near the Lonestone lift station to the nearest point of its property, less grant. The owners request that the EDA review the invoice and reduce the amount.

Chatfield Economic Development Authority Thurber Community Center - Chatfield Municipal Building 21 Second Street SE Chatfield, MN 55923 Voice 507.867.1523 Fax 507.867.9093 www.ci.chatfield.mn.us

Recommendation & Action: Staff recommends affirming the invoiced amount of $36,666.88 because:

1. It was always the communicated intention of the city to invoice for the cost of extension to the building’s service line, wherever it might end up being, less the pro-rated amount of grant.

2. When the exact location of the service was determined by the business, city staff was not consulted on the potential financial impact that location might have under the development agreement.

3. As a hypothetical, staff recalculated the business’ expense under their proposed

option. It would actually result in a cost more than what was invoiced:

a. The service line to the building would be much longer, costing approx. $23,479 instead of $6,472.

b. The service line is not eligible to receive any grant funds. c. Fewer linear feet of water/sewer main from the lift station to the point of

service reduces the amount of grant pro-rated to the project even further. d. Because of issues noted in B & C, the total grant awarded to the business

would be pro-rated to $15,914 instead of $29,222.61. e. The estimated net cost to connect EZ Fabricating to water and sewer under its

interpretation of the development agreement would be $40,189.50 instead of $36,666.68.

Please see the attached supporting documentation.

Historic Downtown Façade Improvement Program Guidelines

Chatfield Economic Development Authority

Program Intent: The Chatfield Economic Development Authority (EDA) was established to attract, promote, and develop an economically sound future for the community. The EDA is a professional advocate for the business community. We provide ideas, information, venture capital, financial packaging, and expertise in business development and retention, focusing on projects that aim to make the Chosen Valley a better place to live, work, and do business. In keeping with this mission, the EDA created the following program to enhance and improve the aesthetics of the core historic downtown business district. This program is designed to encourage owners to restore existing properties and enhance the general character of Chatfield’s downtown.

Part 1: Forgivable Loan: Up to $2,500 per building Match Requirement: None

Part 2: For Projects >$2,500: Revolving loan available for balance of project over $2,500 at 0% APR;

RLF limit and term determined on a per project basis. Participation in Part 1 satisfies owner equity requirements of the loan program.

Eligible Properties: B-1 zoned (General Commercial) commercial buildings only. Eligible Projects: Any project that meets the design guidelines set for historic downtown

buildings and receives a “Certificate of Appropriateness” from the Chatfield Heritage Preservation Commission (HPC).

To Apply, Please Submit: All Applicants:

1. Completed application form. 2. Cost estimates.

3. Project plans AND drawings/sketches. 4. Digital picture of property BEFORE work

begins.Part 2 Applicants Only:

5. Completed Chatfield EDA Revolving Loan Application & supporting documents.

Review Process:

1. Applicant submits all application materials to EDA staff at City Hall. 2. EDA staff reviews application. 3. EDA staff submits project scope & plans to HPC for review. 4. HPC reviews project to ensure that it meets design criteria set in the “Building Design

Guidelines” as published on the City website. 5. HPC awards a “Certificate of Appropriateness” and notifies EDA staff. 6. EDA staff makes recommendation to EDA loan committee. (Part 2 applicants only) 7. EDA makes final review and Applicant is notified.

8. Project work may begin at this point. Payment will be processed as a rebate to the Applicant once all work is complete. Applicant must provide invoices, proof of payment, and a digital picture (please submit all pictures in the .jpeg file format to: cgiesen@ci.chatfield.mn.us) of the building once completed.

All Applicants:

Incomplete applications will not be reviewed.

$25,000 of the “Rochester Sales Tax Economic Development” project fund will be dedicated to fund this program. The program will run until all funds are expended, or until cancelled by the

EDA.

Forgivable loan under Part 1 is structured on a 3 year term. Buildings sold within 3 years of award date must immediately repay the full amount awarded.

Applicants have 6 months to complete their project and claim their rebate, unless an extension

is granted by the EDA upon a written request of the Applicant.

Applications will be denied if, in the sole opinion of either the EDA or HPC, the proposed improvements do not follow these guidelines.

Applicants must be current on property taxes, utility accounts, loan payments, zoning

violations, and/or other citations issued by the City of Chatfield. Applicant’s past performance with any City matter will be considered and may be the sole factor for denial of any application.

The EDA reserves the right of ultimate review. The EDA may, at its discretion, approve projects that deviate from these guidelines if the proposed project is deemed within the general intent

of these guidelines and in the best interest of the community.

NO WORK MAY BEGIN PRIOR TO EDA APPROVAL.

Eligible Project Items: • Rehab/replacement of exterior windows visible from public areas that enhance the character of the building • Rehab/replacement of exterior doors visible from public areas that enhance the character of the building • Replacement of missing decorative building features • Rehabilitation or replacement of historic rooflines (such as corbels, parapets or other decorative or historic features of materials consistent with the historic nature of the building) • Rehabilitation or replacement of roof covering materials if visible from public areas and decorative or historic in nature • Historic preservation-related items that require specialized care or expertise such as tuck-pointing and cleaning. • Removal of non-historic materials or additions to otherwise historic buildings • Awnings with either historic qualities or that add to the character of the building • Signage • Ancillary decorative lighting • Screening of unsightly features such as utility connections, dumpsters, etc… • Other permanent, fixed, above ground decorative features that enhance the visual aesthetics of downtown Ineligible Project Items: • Any interior work • New construction and building additions • Acquisition • Improvements not visible from public areas • Parking lots • Painting and siding (except if allowable above) • Roofs (except if allowable above) • Plants and other movable, non-permanent landscaping features • Improvements already completed or in progress at time of application • Routine building maintenance

Historic Downtown Façade Improvement Program Application

Chatfield Economic Development Authority

Name: ______________________________________________ Date: _____________________ Phone: _______________________________ Email: _______________________________________ Project Address: _________________________________________________________________ Project Summary: _________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ Forgivable Amount: ___________________ Total Amt. Requested: ___________________ 0% Loan Amount: ___________________ Total Project Cost: ___________________

Applicant Certification We, the undersigned certify that the information submitted is true and accurate to the best of our knowledge, that we have read, understand, and that we will comply with the program guidelines. We understand that this application will be reviewed based on the information provided herein and that if the final project does not meet minimum program guidelines, the City reserves the right to deny payment. But for the assistance provided through this program by the Chatfield Economic Development Authority, we would not have the resources to take on this project or to the extent that we will with assistance.

_____________________________________ _____________________________________ Name/Title (Printed) Name/Title (Printed) _____________________________________ _____________________________________ Signature Date Signature Date

NO WORK MAY BEGIN PRIOR TO EDA APPROVAL.

EXTRACT OF MINUTES OF A MEETING OF THE

EDA OF CHATFIELD, MINNESOTA

HELD: March ___, 2015 Pursuant to due call and notice thereof, a meeting of the EDA of Chatfield, Minnesota, was duly held at City Hall on the ___ day of March, 2015, at ____ o'clock _.m. for the purpose, in part, of requesting that the City call for a public hearing on the proposed modification of Redevelopment District No. 2 and the establishment of Tax Increment Financing District No. 2-6 therein. The following Members were present: and the following were absent:

Board Member introduced the following resolution and moved its adoption;

RESOLUTION REQUESTING A PUBLIC HEARING ON THE MODIFICATION OF REDEVELOPMENT DISTRICT NO. 2,

THE APPROVAL OF THE MODIFIED DEVELOPMENT PLAN RELATING THERETO, THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 2-6,

AND THE APPROVAL OF A TAX INCREMENT FINANCING PLAN RELATING THERETO

WHEREAS the EDA has determined that the redevelopment of the Cabin Coffee site is beneficial to the City; and WHEREAS the EDA has requested David Drown Associates, Inc., to prepare a preliminary Tax Increment Financing Plan to enable and assist this redevelopment; therefore BE IT RESOLVED by the EDA of Chatfield, Minnesota, as follows:

1. Public Hearing. The Authority requests that the City Council of the City of Chatfield schedule a

public hearing on the following matters; (a) the proposed modification of Redevelopment Project No. 2, (b) the approval of the modified Development Plan relating thereto, (c) the establishment of Tax Increment Financing District No. 2-6 therein and (d) the approval of the Tax Increment Financing Plan relating thereto, pursuant to and in accordance with Minnesota Statutes, Sections 469.001 to 469.047 and 469.174 to 469.1794, inclusive, as amended (the "Act").

The motion for the adoption of the foregoing resolution was duly seconded by Board Member _____________and upon vote being taken thereon, the following voted in favor: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted.

STATE OF MINNESOTA ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CHATFIELD COUNTY OF OLMSTED I, the undersigned, being the duly qualified and acting Secretary of the EDA of the City of Chatfield, Minnesota, DO HEREBY CERTIFY that the attached resolution is a true and correct copy of an extract of minutes of a meeting of the Chatfield EDA, Minnesota duly called and held, as such minutes relate to the request for a public hearing on the redevelopment project and tax increment financing district. Secretary, EDA of the City of Chatfield Date