HomeMy WebLinkAboutAgenda Notes - 2022.04.14HASTINGS ECONOMIC DEVELOPMENT & REDEVELOPMENT
AUTHORITY
April 14, 2022 - 6:00 pm.
HASTINGS CITY COUNCIL CHAMBERS
I. Quorum
II. Minutes
Please see the attached HEDRA Meeting minutes from the March 10, 2022
regular meeting for your review and approval.
III. Bills
March Bills
Cedarton LLC $2,675.00 Grant - Façade Imp - 103 2nd St E
Johnson Schofield $1,985.00 Block 1 - ALTA Survey
MN DEED $700.00 Marketing - MN Marketing Ptnshp
Levander Gillen Miller PA $656.50 Legal - General
Centerpoint Energy $231.85 412 Vermillion - Heat
Campbell Knutson, PA $136.46 Legal - General HEDRA
Please see attached general ledger detail from the last two months for further
information.
IV. Business
A. Resolution #2022-13 Approving Revolving Loans to Spiral Foods
Staff is proposing a $25,000 working capital loan which would be payment free
and interest free for 1 year and would then have a fixed interest rate of 3.5% and
a 3 year term. Additionally, a $25,000 machinery and equipment loan of
$25,000 which would also be payment and interest free for 1 year and would
have an interest rate of 3.5% and a 10 year term. If secured, HEDRA loans
would be in a fourth position against any equipment or inventory. Given that
position, it is unlikely that any value would remain if a default were to occur.
As a result, the HEDRA loans are proposed to be unsecured.
Spiral Foods would be providing $155,100 in equity to fully fund the project
after accounting for proposed loans.
Staff received an application for a revolving loan requesting $150,000 to support
expansion of Spiral Foods Co-Op from 2,400 square feet to 5,272 square feet.
The total project uses were submitted as $634,800.00.
Spiral Foods Co-op is a cooperatively owned consumer grocery store which has
been selling natural and organic foods in the Hastings community since 1979.
Spiral Foods currently serves 1,657 member-owners in the Hastings area. Those
members make up 65% of Spiral’s $1.2M in annual sales. Spiral Foods has 12
employees, 7 of which are full time.
Spiral Foods presented an expansion plan that would increase the stores
footprint from 2,400 square feet to 5,272 square feet. Projected sales increases
based on the market analysis and proforma submitted by Spiral Foods places
their sales at nearly $3.0M by year three. The increase in sales would also result
in the addition of at least 5 new jobs including a produce buyer, refrigerated
buyer, deli assistant, and cashiers to the Hastings community.
Based on our review of the past four years of company financials, Spiral Foods
is a stable business with acceptable metrics for accounts payable, accounts
receivable, days payable, and days accrual. The business has a stable cost of
goods sold as well as SGA expenses, and a short operating cycle. It has also
improved its debt to equity ratio and based on anticipated increase in sales
resulting from the expansion, the business appears able to handle new debt
proposed to support the business expansion.
Vermillion Bank has proposed to provide a $180,000 first position loan to the
project. The $180,000 loan would have a fixed interest rate of 7% and be
amortized over 20 years with a balloon date of 5 years.
Since its original application to HEDRA, Spiral Foods was successful in gaining
approval of an Economic Injury Disaster Loan (EIDL) from the U.S. Small
Business Administration (SBA) in the amount of $199,700. That loan has a
fixed interest rate of 3.5% and a term of 30 years. It is payment and interest free
for 24 months and would hold a second position on collateral assets.
Staff connected the Applicant with the Metropolitan Consortium of Community
Developers (MCCD) who operates our Open To Business (OTB) program.
MCCD Staff will be proposing a 3rd position loan of $50,000 at a fixed rate of
7% over 10 years with an introductory 6 month interest only period to their loan
committee on April 14th.
Action – Motion to adopt Resolution #2022-13 Approving a working capital
loan of $25,000 and a Machinery and Equipment loan of $25,000 to Spiral
Foods Co-Op and authorizing Staff to execute loan agreements.
B. Approve 4 Month Extension to Façade Improvement Grant for 215
Sibley Street
On January 13th HEDRA approved a grant totaling $4,927.50 for window
replacement at 215 Sibley Street. The contractor has completed installation of
the storm windows however the historic windows are scheduled for re-furbishing
in late June with installation in July. Terms of the grant are such that the work
and a paid invoice are to be completed within 3 months of grant approval.
Considering the grant was approved in January and that the scope involves
window replacement and specifically refurbishing of historic windows, Staff is
proposing a four month extension to the grant which would permit BMMK, LLC
until August 14th, 2022 to submit a paid invoice and have the work completed.
Action: Motion to approve a 4 month extension to façade improvement grant for
215 Sibley Street.
C. Approve 4 Month Extension to Façade Improvement Grant for 1800
Vermillion Street
On January 13th HEDRA approved a grant totaling $5,000.00 for replacing the
front canopy of lower level and upper level, removal of rotten cedar shakes and
instillation of new standing seam steel siding/canopy. The materials have been
ordered however have not yet been delivered for install. Terms of the grant are
such that the work and a paid invoice are to be completed within 3 months of
grant approval. Due to the unforeseen delay in materials, Staff is proposing a
four month extension to the grant which would permit Doug and Sunshine
Grandahl until August 14th, 2022 to submit a paid invoice and have the work
completed.
Action: Motion to approve a 4 month extension to façade improvement grant for
1800/1806 Vermillion Street.
D. Resolution #2022-14: Approve Façade Improvement Program (FIP) Grant
for Improvements at 118 2nd Street E
HEDRA has received an application from Tatia and Phil Nelson which own the
property at 118 2nd Street E.
The full scope includes the following:
- Perform 50% tuckpointing of all exterior brick mortar joints
- Allowance to replace 5 individuals brick with new closely matching
brick.
- Install new sealant at 2 joints between adjacent buildings
- All repairs to be performed using aerial lifts
- Walk-through scaffolding protection will be provided at entrance for
pedestrians and patrons.
The scope of services is proposed to be completed by Acme Tuckpointing &
Restoration. Staff has reviewed the capabilities and past work of the proposed
contractor and found the company to be capable of correctly performing the
scope of work. Acme is currently completing brick work at The Confluence as
well.
The project has eligible costs totaling $16,500. The maximum grant award based
on current matching funds is $5,000.00. Staff is proposing to allow 4 months for
the work to be completed.
Action: Motion to approve Resolution #2022-14 approving façade improvement
program grant award to Tatia and Phil Nelson for brick and exterior repairs at
118 2nd Street E in the amount of $5,000.00.
E. Resolution #2022-15 Approving Façade Improvement Grant for 119 2nd
Street
HEDRA has received an application from Karl and Jean Hajny who own the
building located at 119 2nd Street E.
The full scope of work includes the following:
- Replacement of rotted trim around windows and door.
- Re-paint failing/peeling paint on the front of building (not brick work),
trim & doors
- Replace broken window above entry door
- Replace window with broken seal to increase energy efficiency
- Install new awnings
The project has eligible costs totaling $12,473.67. The maximum grant award
based on required matching funds is $5,000. Staff is proposing to allow 4
months for the work to be completed.
Action: Motion to approve Resolution #2022-15 approving façade improvement
program grant award to Karl and Jean Hajny for improvements at 119 2nd Street
in the amount of $5,000.00.
F. Resolution #2022-16 Approving Façade Improvement Grant for 2216
Vermillion Street
HEDRA has received an application from River City Interiors which recently
acquired the property at 2216 Vermillion Street.
The full scope includes the following:
- Removal of failing and aged overhead door facing Vermillion Street.
- Installation of new storefront window in place of former overhead door.
- New windows for the front of building to replaced existing cracked
windows.
- Repair damaged stucco and painting blighted paint conditions.
The scope of services is proposed to be completed by River City Interiors. The
project has eligible costs totaling $10,900. The maximum grant award based on
current matching funds is $5,000.00. Staff is proposing to allow 4 months for the
work to be completed.
Action: Motion to approve Resolution #2022-16 approving façade improvement
program grant award to River City Interiors at 2216 Vermillion Street in the
amount of $5,000.00.
G. Resolution #2022-17 Approving Façade Improvement Grant for 209 Sibley
Street
HEDRA has received an application from Barbara Hollenbeck for a FIP grant
award for improvements at 209 Sibley Street. Staff has reviewed the proposed
scope of work and found that it does not require review by the Heritage
Preservation Commission.
The full scope includes the following:
- Tuckpointing on failed mortar joints where prior work was done
- Replacement of missing and/or failed brick and rebuild area of
deteriorated brick.
The scope of services is proposed to be completed by Acme Tuckpointing &
Restoration. The project has eligible costs totaling $14,800. The maximum grant
award based on current matching funds is $5,000.00. Staff is proposing to allow
4 months for the work to be completed.
Action: Motion to approve Resolution #2022-17 approving façade improvement
program grant award to Barb Hollenbeck for work to be completed at 209 Sibley
Street in the amount of $5,000.00.
H. Resolution #2022-18 Approving Façade Improvement Grant for 219 Sibley
Street
HEDRA has received an application from Barbara Hollenbeck for a FIP grant
award for improvements at 219 Sibley Street. Staff has reviewed the proposed
scope of work and found that it does not require review by the Heritage
Preservation Commission.
The full scope includes the following:
- Tuckpointing top 3’ of the wall
- Replacement of 150 individual bricks
- Additional tuckpointing of failed mortar joints
The scope of services is proposed to be completed by Acme Tuckpointing &
Restoration. The project has eligible costs totaling $18,500. The maximum grant
award based on current matching funds is $5,000.00. Staff is proposing to allow
4 months for the work to be completed.
Action: Motion to approve Resolution #2022-18 approving façade improvement
program grant award to Barb Hollenbeck for work to be completed at 219 Sibley
Street in the amount of $5,000.00.
I. Resolution #2022-19 Approving Façade Improvement Grant for 221 Sibley
Street
HEDRA has received an application from Jono Heights, LLC which recently
acquired the historic Masonic Building located at 221 Sibley Street. The scope
of work will require review by the Heritage Preservation Commission.
The full scope of proposed work includes the following:
- Blight elimination by replacing rotten and broken window seals and
faulty windows.
- Replacement of 39 openings with a total of 75 windows mulled together.
The scope of services is proposed to be completed by A Plus Windows. The
project has eligible costs totaling $140,816.20. The maximum grant award based
on matching funds is $5,000.
The Façade Improvement Grant program was set up as a first come, first served
program. At the time that Staff received the application from Jono Heights, LLC,
a total of $2,397.60 in grant funds had not yet been applied for out of the total
$50,000 that HEDRA had budgeted for the program. Staff is proposing to allow 4
months for the work to be completed.
Action: Motion to approve Resolution #2022-19 Approving Façade Improvement
Grant to Jono Heights, LLC for improvements at 221 Sibley Street in the amount
of $2,397.60 contingent upon approval by the Heritage Preservation
Commission.
J. Resolution #2022-20 Terminating and Canceling the Land Credit Sale to
Dream1, LLC (WSI Sportswear)
In November of 2021 HEDRA approved a land credit sale to Dream1, LLC
(WSI Sportswear). Staff was aware at that time that construction of the
proposed 20,000sf facility would likely be delayed due to extended lead times
for construction materials.
After consultation with at least three general contractors to obtain bid pricing,
WSI has elected to not move forward with the proposed project due to the cost
of the facility.
Termination of the current land credit sale does not preclude HEDRA from
approving a future land credit sale should the project become financially viable
in the future.
Action: Motion to approve Resolution #2022-20 terminating and canceling the
land credit sale to Dream1, LLC.
K. Resolution #2022-21 Authorizing Termination of Existing Purchase and
Development Agreement with NJS, LLC and Approving New Purchase
Agreement with Lake Isabelle Flats, LLC for the UBC Property.
The City Attorney’s office was queuing items up for the closing and noticed that
because the property is being Platted we need to adjust the purchase agreement
and development agreement. A combined purchase agreement and development
agreement which we have now will not allow us to record after the plat. So, in
order to account for the plat, and make sure things appear on title correctly we
need to rescind and adopt a new agreement. Another public hearing is not
required. The Developer has also established a project LLC which is reflected in
the proposed action.
Action: Motion to approve Resolution #2022-21 Authorizing Termination of
Existing Purchase and Development Agreement with NJS, LLC and Approving a
New Purchase Agreement with Lake Isabelle Flats, LLC for the UBC Property.
L. Resolution #2022-22 Authorizing Termination of Existing Purchase and
Development Agreement with River City Investments, LLC and Approving
a New Purchase Agreement with River City Investments, LLC for property
located at 317 3rd Street E.
The City Attorney’s office was queuing items up for the closing and noticed that
because the property is being Platted we need to adjust the existing purchase
agreement and development agreement. In order to account for the plat, and
make sure things appear on title correctly we need to rescind the current
development and purchase agreements in favor of a singular purchase
agreement. Another public hearing is not required.
Action: Motion to approve Resolution #2022-22 Authorizing Termination of
Existing Purchase and Development Agreement with River City Investments,
LLC and Approving a New Purchase Agreement with River City Investments,
LLC for property located at 17 3rd Street E.
M. Resolution #2022-23 Approving an Assignment and Assumption Agreement
of TIF Note from NJS Development, LLC to Lake Isabelle Flats, LLC and
NSKW Land, LLC related to the Redevelopment of the Former UBC Site.
Nate Stencil, owner of NJS Development, LLC (Stencil Group) has filed what
will be the ownership entity for the redevelopment project for the former UBC
site. That ownership LLC is “Lake Isabelle Flats, LLC”. Mr. Stencil acquired
the single family home located adjacent to the UBC site, with the entity known
as NSKW Land, LLC. Together those two LLC’s will own the future apartment
project.
As such, the TIF note approved by HEDRA to NJS Development, LLC will
need to be reassigned to Lake Isabelle Flats, LLC and NSKW Land, LLC.
There is still only a singular TIF Note and no additional terms of the TIF
financing would change as a result of this action.
Action: Motion to approve Resolution #2022-23 Approving Assignment and
Assumption Agreement of TIF Note from NJS Development, LLC to Lake
Isabelle Flats, LLC and NSKW Land, LLC.
V. Reports and Information
A. Hastings Entrepreneurship Assessment
HEDRA updated its 2020-2022 Strategic Plan to include assessment of
opportunities to increase tourism and commerce opportunities within the
downtown area. Included in the packet is Staff’s proposal for “Phase 1” of the
assessment. Staff anticipates bringing back a summary of information learned
to the August HEDRA meeting. At that point we will seek HEDRA feedback
on the direction HEDRA should be taking to support entrepreneurship based on
information we have at that time.
Staff is seeking feedback from HEDRA on the proposed “Phase 1” outlined in
the attached report and any revisions or additions it would like to see added.
B. Business Retention & Expansion Visit – Hastings Golf Club
Staff as well as Council Member Jen Fox visited Hastings Golf Club on March
3rd to learn more about the business and its offerings to the Hastings
Community.
The BR&E survey report is included as an attachment to the packet.
C. Business Retention & Expansion Visit – Hastings Beauty School
Staff as well as Mayor Mary Fasbender visited Hastings Beauty School on
March 14th to learn more about the school and the services it offers to both its
students as well as the greater Hastings community.
The BR&E survey report is included as an attachment to the packet.
D. Advertisement for HEDRA Position
HEDRA Commissioner Martha Sullivan has recently sold her home located at
303 5th Street E to Rise Up Recovery and has also joined a law firm which has
resulted in her no longer leasing office space within the building located at 221
Sibley Street. As a result, Commissioner Sullivan will be stepping down as a
HEDRA Commissioner but has agreed to stay on while the search for a new
HEDRA Commissioner takes place. Staff will be advertising for the vacancy
and would appreciate current HEDRA board members sharing the vacancy with
their networks.
E. Development Update
New Information
Jersey Mikes – Framing of the new Jersey Mikes restaurant at 1217 Vermillion
Street is nearly complete.
BIRD Scooters - Bird Scooters launched their Hastings operations on April 1st.
They currently have 25 scooters deployed in various areas of the City with
approval to have up to 100.
Crossroads Site Development – On March 7th, the City Council approved two
apartment buildings containing a total of 211 market rate apartment units by
Enclave Development south of 33rd Street between Terry’s Hardware and a strip
mall. The project has proposed to begin construction in summer 2022 with
completion of the first building in the fall of 2023.
Lake Isabelle Flats (NJS Stencil Apartment) – On March 7th, the City Council
approved an 89 unit market rate apartment building located on the former UBC
site (between 3rd and 4th Streets, west of Bailey Street). Construction anticipated
to begin in early summer 2022 with completion by summer 2023.
The Confluence – Progress continues with interior activities including interior
framing, replacement of fire suppression system, and replacement of windows.
Rise Up Recovery - 303 5th Street E – On March 7th, the City Council approve a
Special Use Permit to Rise Up Recovery to operate a board and lodging facility
with special services for substance use disorder recovery.
Makers Alleyway Market – Staff will again be running a Makers Alleyway
Market to coincide with Music in the Park. Staff is preparing for eight markets.
Façade Improvement Grant Program – The following is a summary of the
grant program and available funds.
Address Scope of Work Total Cost Grant Award
Amount
Approved
On:
Work Status Area
103 2nd
Street
Awning
Replacement
$5,350 $2,675.00 1/13 Completed
and paid out
Downtown
215 Sibley
Street
Window Repair $12,000 $4,927.40 1/13 ½ complete.
Extension
requested
Downtown
1800
Vermillion
Canopy
replacement &
exterior blight
repair
$16,776.88 $5,000.00 1/13 Extension
requested
Vermillion
218 2nd
Street
Window Repair $10,295 $5,000.00 2/10 ½ complete.
Extension
requested
Downtown
311 2nd
Street
Window Repair $20,708 $5,000.00 3/10 ¾ complete Downtown
118 2nd
Street
Masonry repairs $16,500 $5,000.00 4/14* HEDRA
review
Downtown
119 2nd
Street
Awning, window
repair, trim repair
$12,473.67 $5,000.00 4/14* HEDRA
review
Downtown
2216
Vermillion
Street
Remove failed
overhead door.
Replace with new
storefront
windows
$10,900 $5,000.00 4/14* HEDRA
review
Vermillion
209 Sibley
Street
Masonry Repairs $14,800 $5,000.00 4/14* HEDRA
review
Downtown
219 Sibley
Street
Masonry Repairs $18,500 $5,000.00 4/14* HEDRA
review
Downtown
221 Sibley
Street
Window
replacements
$140,816.20 $2,397.60 4/14* HEDRA
review
Downtown
Total: $279,119.75 $50,000.00
Grant Program Budget: $50,000.00
Remaining Funds: $0.00
*denotes not officially approved but will be considered on that date.
PREVIOUS INFORMATION:
UBC North Building Sale & Removal – The 10,000 sf building has been
removed from 415 4th Street E. Building was sold for $45,500. Site is part of the
future Lofts on 3rd Apartment project.
Autobody Shop - 2550 Millard Avenue – On February 22nd, the City Council
approved a special use permit for Matthew Goebel to operate an auto body shop
out of 2550 Millard Avenue (Green Lawn Sprinkler).
The Quill - Schoolhouse Square Senior Housing – Framing work is
progressing and the building is taking shape. Project is on track for fall 2022
opening.
Tyler Street Landing Apartments (Luke Siewert) – The Dakota County CDA
has approved a $250,000 Redevelopment Incentive Grant (RIG) for this project
on November 16th. On October 4th the City Council approved land use actions to
allow construction of the 32 unit apartment building at 3rd and Tyler.
Best Property Annexation - Redwing Blvd - Summergate Development has
terminated its development agreement for purchase and development of the
property. Best Property still seeking a purchaser and developer. Action on the
application tabled at City Council pending identification of a new developer and
concept plan.
Fleet Farm – City has issued permit for interior renovation and is awaiting plans
for the exterior building supply yard.
Villas at Pleasant – Construction of the first model home has commenced on the
32 unit subdivision near Northridge and Pleasant
Quality One Woodwork – Construction continues the 52,000 sf building
expansion. Staff conducted a ground breaking ceremony alongside the Hastings
Chamber of Commerce.
Heritage Ridge – Building permits for over 20 of the lots have been submitted to
the City for review and approval. They will likely seek approval of the 4th and
final phase of the 116 lot development before spring of 2022.
Vermillion Acres – City Council approved the Development Agreement for the
75 unit senior housing facility on September 7th. The Building Department has
concluded review of the plans, which will include modular construction of some
components offsite and moved onto the site for final construction.
315 Pine Street - Former Thorwood Inn - Cleanup work continues on the fire
damaged former building. Partial demolition and renovation plans were
approved by the Heritage Preservation Commission on July 27th.
ATTACHMENTS
• Minutes – March 10, 2022 - Regular Meeting
• Bills - March, 2022
• Loan Agreement for Machinery and Equipment
• Promissory Note for Machinery and Equipment
• Loan Agreement for Working Capital
• Promissory Note for Working Capital
• Resolution #2022-13: Approving Revolving Loan to Spiral Foods
• Resolution #2022-14: Approve Façade Improvement Program (FIP) Grant
for Improvements at 118 2nd Street E
• Grant Application for 118 2nd Street E
• Resolution #2022-15 Approving Façade Improvement Grant for 119 2nd
Street
• Grant Application for 119 2nd Street E
• Resolution #2022-16 Approving Façade Improvement Grant for 2216
Vermillion Street
• Grant Application for 2216 Vermillion Street from River City Interiors
• Resolution #2022-17 Approving Façade Improvement Grant for 209 Sibley
Street
• Grant Application for 209 Sibley Street
• Resolution #2022-18 Approving Façade Improvement Grant for 219 Sibley
Street
• Grant Application for 219 Sibley Street
• Resolution #2022-19 Approving Façade Improvement Grant for 221 Sibley Street
• Grant Application for 221 Sibley Street
• Resolution #2022-20 Terminating and Canceling the Land Credit Sale to Dream1,
LLC (WSI Sportswear)
• Resolution #2022-21 Authorizing Termination of Existing Purchase and
Development Agreement with NJS, LLC and Approving New Purchase Agreement
with Lake Isabelle Flats, LLC for UBC Property
• Resolution #2022-22 Authorizing Termination of Existing Purchase and
Development Agreement with River City Investments, LLC and Approving New
Purchase Agreement with River City Investments, LLC for property located at 317
3rd Street E
• Business Retention & Expansion Survey – Hastings Golf Club
• Business Retention & Expansion Survey – Hastings Beauty School
Next Meeting: Thursday, May 12, 2022