M I N U T E S PORT AUTHORITY SPECIAL MEETING WEDNESDAY, FEBRUARY 26, :30 P.M. COUNCIL CHAMBERS ROOM

Transcription

1 M I N U T E S PORT AUTHORITY SPECIAL MEETING WEDNESDAY, FEBRUARY 26, :30 P.M. COUNCIL CHAMBERS ROOM Members Present: Members Absent: Staff Present: Others Present: Commissioners Jerry McCarthy, Jerry Mohrfeld, Michaell Bednar, Roger Boughton, Larry Maus, and Lee Bjorndal. Commissioner Jeff Austin. Port Authority Attorney David Hoversten and Port Authority Secretary Tom Dankert. John Garry and Mark Nibaur (DCA). President McCarthy called the meeting to order at 4:30 pm. Item #2. Approval of the minutes of the December 11, 2013 special meeting: Motion by Commissioner Maus, seconded by Commissioner Boughton, to approve the minutes of the December 11, 2013 Port Authority meeting. Item #3. Claims for Payment: Mr. Dankert discussed the claims paid from July 26, 2013 through February 13, 2014 noting in total payments made were $195, Mr. Dankert noted several of the claims are for costs related to the Hormel Institute project, for which we shall get reimbursed for between the State of Minnesota and the Hormel Foundation. Commissioner McCarthy questioned the reimbursement for duct tape to Mr. Dankert. Mr. Dankert noted this was used to mark the floor of the Robinson Building for tenants as we needed to keep an open space by the dock and an open path to the different leasable areas. Motion by Commissioner Mohrfeld, seconded by Commissioner Bjorndal to approve the claims for payment as presented. Item #4. Election of Officers: President McCarthy noted this is the annual meeting for which officers need to be elected. Motion by Commissioner Mohrfeld, seconded by Commissioner Bednar to approve the officers for 2014 as follows: President Vice President Treasurer Secretary and Assistant Treasurer Jerry McCarthy Jeff Austin Larry Maus Tom Dankert The Interim Executive Director will also remain as is (Dankert) and does not need to be annually approved.

2 Item #5a. Hormel Institute expansion project approval of public infrastructure proposals: Mr. Dankert discussed a request by consultant Jon Erichson to get approval to request proposals from engineering firms to provide professional design services for some public infrastructure. Once the proposals are received and reviewed, the Port Authority will be asked to approve the agreements for such services. Motion by Commissioner Bednar, seconded by Commissioner Boughton to authorize Jon Erichson to begin requesting proposals for the public infrastructure related to the Hormel Institute expansion. Item #5b. Hormel Institute expansion approval of additional survey work, $4,200: Mr. Dankert noted some additional survey work was needed in relation to the Hormel Institute expansion. We did not want to hold the project up, so we internally authorized the expenditure, and are now requesting the approval of such. Motion by Commissioner Bjorndal, seconded by Commissioner Mohrfeld to approve the additional survey work related to the Hormel Institute expansion. Item #5c. Hormel Institute expansion approval of bid out of soft costs: Mr. Dankert stated Mr. Erichson is requesting authorization to start bidding out costs related to some internal equipment and furnishing s for the Hormel Institute project. Motion by Commissioner Boughton, seconded by Commissioner Bjorndal to authorize the bidding out of some of the soft costs related to the Hormel Institute expansion. Item #6. Downtown fire site boundary corrections: Assistant Port Authority Attorney Craig Byram stated staff are working on a development for the downtown fire site, so now may be the time to correct some title defects in the Leon property and Traders Bar property such that in the event a downtown development does come to fruition that the title would be already cleaned up. Mr. Byram stated the issues relate to the following: A 0.8 inch strip of land that runs through the middle of the Traders Bar area that was accidently left out of the deed in A portion of Traders Bar is registered land (Torrens Property) that in essence uses the corner of a building as a legal description. If/when the Traders Bar building is removed, then this legal description will not be valid as the corner of the building will be gone. A small parking lot to the East of Traders Bar has a 1.8 inch gap overlapping the legal description of both the parking lot and the building. The parking lot located at the corner of the alley in Block 29 was dropped from the legal description years ago. Mr. Byram stated he is asking for Port Authority approval to commence legal proceedings to take appropriate action to correct the title defects noted above. There is $2,500 remaining in the Hoversten Trust account to cover most of the expected cost, as we knew there were some title problems when we purchased the Traders Bar building. Commissioner Bednar questioned how much this is expected to cost. Mr. Byram stated he believed it could cost an extra $1,000 to $1,500 above the $2,500 that is currently being held in escrow. 2

3 Motion by Commissioner Boughton, seconded by Commissioner Bednar to authorize Mr. Byram and his office to commence legal proceedings to correct the title defects. Item #7. Tienda Mexico loan: Mr. Dankert noted the Port Authority has a $1, outstanding loan against Tienda Mexico and Lupe Talamantes. The original loan was for $10,000 back in 2002, and many payments have been made, but not any since We have exhausted all efforts to collect on this loan, and for financial statement purposes it appears the remaining balance is uncollectable. Mr. Dankert requested authorization to write-off the Tienda Mexico loan, but we would still continue collection efforts. Commissioner Bednar questioned if we should go after conciliation court for $60 with this loan. Mr. Dankert stated he believes we have a mortgage against the property, and his thoughts were it would be wasting another $60 as the issue is getting payment not securing out loan rights. Mr. Hoversten stated he would look into the property regarding our security interests. Motion by Commissioner Maus, seconded by Commissioner Mohrfeld to write-off the remaining $1, of loan to Tienda Mexico and to use all options possible to secure eventual payment (including conciliation court if we do not have a security interest in the property already). Carried 6-0. Item #8. Robinson Building Status of Ellumilite payment: Mr. Dankert noted we have been having some rent payment issues with Ellumilite at the Robinson Building, a facility we jointly own with the DCA. Mr. Dankert noted we have worked out a possible solution/compromise with the DCA and Ellumilite for the Port Authority s review this evening: Accept a rent payment of $17,000 (cashier s check that the DCA currently has) for all outstanding rents owed in Two payments had been made prior to this, and the additional five months that Ellumilite was actually in our building (before we had them vacate the premises for lack of rent payment) would equate to around $17,000. Draft a new lease agreement with Ellumilite (since the prior lease agreement was broken when they quit paying rent) that is mutually agreeable to all parties, including the right to require Ellumilite to move out of their current space and into other space located within the Robinson Building. A deposit of $15,000 is required no later than March 3 for rent beginning May 1, The Port Authority would keep this payment as a rent deposit and use a portion of it each month. o In the event this building is sold as part of a development deal we are working on, then our thoughts include paying the rent of this tenant to a new building owner with this deposit. o Mr. Dankert noted the $15,000 divided by 8 months (May 1 to December 31) equates to $1,875 per month if they were to move to a smaller space on the other side of the building. In the event the $15,000 cashier s check is NOT received by the end of the day on March 3, then the Port Authority would require the tenant to physically move all of their equipment out of the building no later than March 31, Mr. Dankert did note that being able to require Ellumilite to move to a different part of this building is paramount to this deal, as it has bigger ramifications in the entire development of our downtown. Additionally, there may be some costs that may be requested of us to fund for the move, including equipment move costs, and HVAC and wiring improvements in the event Ellumilite does not have 3

4 the funds to do such. Mr. Dankert stated he is hoping that Ellumilite would have the cash since they would not have to make any rent payments for the remainder of 2014 since we would hold the $15,000 deposit ourselves. If the move is not required, we will still need to work out a new lease agreement for the space they currently occupy. After further discussion, motion by Commissioner Boughton, seconded by Commissioner Mohrfeld to approve the above proposal to Ellumilite and to accept the $17,000 cashier s check as stipulated. Item #9. Unaudited financial statements: Mr. Dankert discussed the unaudited financial statements for the twelve months ended December 31, 2013, as follows: Page 1 Combined Balance Sheet Mr. Dankert noted we have $1,328,232 of cash. Additionally, we have $8,392,468 of long-term assets available (leases, notes, and loans receivable), plus a net book value of $575,364 for our fixed assets (buildings). Page 2 Combined Income Statement We have $413,779 of net income for the twelve months, however this includes $190,000 of contributions towards the Downtown Revitalization process, all of which has not been spent. Additionally there is $166,676 of contributions recorded in relation to the Hormel Institute expansion costs that are owed to us from the State of Minnesota/Hormel Foundation. Page 3 APC Debt Service Balance Sheet We have a note receivable for $693,816 from Bellisio Foods, Inc. on the lease. However, we also owe the City of Austin $395,831 since they paid off the outstanding debt for us. This note was paid off in Page 5 Hormel Institute Balance Sheet This fund will zero out fund balance wise (we won t make any money or lose any money) at the end of the ten-year lease period. Page 7 Property Management Balance Sheet We have $818,384 cash in the bank, $239,413 of which is dedicated to the Downtown Revitalization efforts. Page 9 Walker Building Balance Sheet We have nearly $535,000 of cash in the bank and no outstanding debt against the building. International Paper has indicated an interest in possibly expanding this building during Page 10 Walker Building Income Statement - $88,400 of lease revenues have come in, approximately $26,106 of costs, leaving the Port Authority with net income of $55,471 after interest income and a market value loss on our investments. Page 11 Robinson Building Balance Sheet This fund is still in deficit cash by $47,588 and we will need to get some new tenants to rent the building before we can cash flow this again. However, the extra $17,000 rent payment the Port Authority Board accepted tonight will show up as a receivable on the Balance Sheet, plus will create net income for the facility for Motion by Commissioner Bednar, seconded by Commissioner Bjorndal to approve the unaudited financial statements for the period ending December 31, Item #10a. Executive Director Report Walker Building: Mr. Dankert noted tenant New Dimensions Home Electronics lease terminated in 2013 so that 1,900 square foot of space is available to lease. However, we may need to invest some money into the site to make it more attractable once a new tenant can be found. 4

5 Item #10b. Executive Director Report Robinson Building: Mr. Dankert noted staff are working on a development agreement in the downtown area that may involve selling the Robinson Building to make the deal work. A closed meeting will be scheduled in the near future for further discussions by the Port Authority board. Item #10c. Executive Director Report Correspondence from Southern Minnesota Initiative Fund: Mr. Dankert noted we received two thank yous from the Southern Minnesota Initiative Fund for our $5,000 contribution in 2014 that they recently received. Item #10d. Executive Director Report Bellisio Foods note payoff: Mr. Dankert noted the closing occurred near the end of January as Bellisio Foods paid off the outstanding note related to the APC building. The approximate $681,000 payoff will allow the Port Authority to pay the city the outstanding advance amount (approximately $380,000 at January 31, 2014) and keep the remaining $300,000 for future economic development efforts. Item #11. Any other business: None. Item #12. Adjournment: With no further business, motion by Commissioner Mohrfeld, seconded by Commissioner Boughton to adjourn the meeting at 5:30 pm. Approved: President: Secretary: 5