August 2011Albert Lea Post Authority Minutes

By Tyler Golberg | August 3, 2011

August 2011

ALBERT LEA PORT AUTHORITY

MINUTES

August 3, 2011

Albert Lea Business Development Center

  1. CALL TO ORDER & NOTATION OF ROLL

The Regular Meeting of the Albert Lea Port Authority was called to order on Wednesday, August 3, 2011 at 7:30 a.m. by President Vern Rasmussen.  Roll was noted by the Board Secretary.

COMMISSIONERS PRESENT:  Jerry Ehn, Vern Rasmussen, Jr., Al Brooks, Keith Fligge, Mike Moore and Nancy Skophammer

COMMISSIONERS ABSENT:  Ellen Kehr

EX-OFFICIO MEMBERS PRESENT:  Chad Adams, City Manager; Mike Lee, Freeborn County Representative; and Randy Kehr, business community representative

EX-OFFICIO MEMBERS ABSENT:  None

STAFF MEMBERS PRESENT:  Dan Dorman, Executive Director; Ryan Nolander, Assistant Director; Julie Dandrea, Board Secretary

STAFF MEMBERS ABSENT:  None

GUESTS:  Greg Steil, Chuck Paczkowski, Rebecca Gisel from Alliant, Dan DeBoer and Chad Vogt representing AZ-One, Inc.

2.  APPROVAL OF MINUTES FROM JULY 6, 2011 MEETING

The minutes from the July 6, 2011 meeting were reviewed.  Commissioner Fligge made a motion to approve the minutes as presented, seconded by Commissioner Moore.  President Rasmussen asked for any discussion and hearing none, the motion carried 6 in favor; 0 opposed.

3.  RESOLUTION PA-11-11 AUTHORIZING PAYMENT OF CLAIMS

The claims were presented for review.  Commissioner Ehn motioned to accept the claims as presented in the amount of $11,498.55, seconded by Commissioner Fligge.  President Rasmussen asked if there were any questions and hearing none, the motion carried 6 in favor; 0 opposed.

4.  MCHS PROJECT UPDATE

Executive Director Dorman and City Manager Chad Adams met with Pat Waddick, a representative from Springsted & Assoc., last week and went over areas of financing.  Another look will be taken at the Federal New Market Tax Credits which were originally thought of as too expensive for this size of a project.  Mayo continues through their approval process with optimism.  The project will go through the rest of their boards this month.  If approved by Mayo, detailed plans will be submitted to the Minnesota’s State Historic Preservation Office (SHPO).  SHPO will review the plans for historic tax credit use.  The SHPO process will take longer.  If federal tax credits can be used, there won’t be as much need for the city revolving loan funds.

5.  APPROVE PROPOSED 2012 BUDGET

A revised 2012 budget was handed out.  Executive Director Dorman noted the only changes were in the Port Authority Real Estate Fund because now there is a new tenant in the Ring Can middle section.  Vision Processing Technologies will warehouse there starting in August.  Also, on the expense side, depreciation expense increased to $242,000.  If the Port had no real estate fund to generate income, a levy would be used as some other cities do.  The Port has the authority to levy up to $160,000.  Commissioner Moore asked about the fluctuation in personnel services and Dorman said that was from changes in how staff’s salaries are allocated between the Port Authority’s general and real estate funds.  Commissioner Moore made a motion to approve the 2012 budget as presented, seconded by Commissioner Ehn.  The motion passed 6 in favor; 0 opposed.

6.  RESOLUTION PA 11-11 BROADWAY RIDGE RENEWAL GRANT – AZ-ONE APPLICATION

Executive Director Dorman reviewed for the board the change in the BRRG Fund.  Last year the loan fund became a grant fund up to $50,000 per building downtown.  The city buys a façade easement from the applicant to ensure preservation is done to historic standards in turn for the grant.  Interim city manager at the time, Pat McGarvey, asked the Port Authority to review the projects. The historic committee has already reviewed this project.  Dan DeBoer and Chad Vogt, representing Az-One, Inc., gave a recap of the proposed project.  Their project is the old St. Paul Clothiers building they would like to develop into transitional housing.  The third floor would be for individuals who have completed a treatment program, are working with a mentor and are employed.  The middle floor would be a place for struggling people to gather for clean entertainment and the basement would be a place to obtain a GED, get counseling, and possibly for leadership development.  DeBoer handed out the blueprints of the façade and estimated costs involved. All the windows and doors would be replaced, the stairway and railing on the outside replaced and the exterior would be soda blasted.  The cost would be $121,956.  Az-One, Inc. has enough money to offset the difference.  Randy Kehr asked how long individuals would live upstairs and the goal is at least one year, but each case would be looked at individually.  President Rasmussen said it looks like a great project and thanked Dan and Chad for the chance to partner with them.  Commissioner Fligge made a motion to approve the project as submitted, seconded by Commissioner Moore.  The motion carried 6 in favor; 0 opposed.

7.  EXECUTIVE DIRECTOR’S REPORT

  • Vision Processing Technologies – This is the company who looked at the ALEDA spec building, but ultimately bought a building in Owatonna that Interstate Packaging was considering before making their decision to stay in Albert Lea. They are renting the middle section of the Ring Can building.
  • Ventura Foods – They are under lease until next year and the Port would like extend it to a 5-7 year lease and update the refrigeration and lights.  This will be discussed during lease negotiations.
  • Carpenter lease – Their two-year lease is up at the end of the year.  They are the Port’s oldest tenant.  The building has been expanded to meet their needs.  In retrospect, they believe they should have bought the building as they’ve paid as much in rent.  Winnebago Industries is their largest customer and Albert Lea was the closest community with available space they could find to them at the time.  Their rent was at $1.50/SF for years and was increased to $1.80/SF in the current lease.  In a meeting with them it was discussed going to $2.00/SF.  However, they expressed an opportunity to relocate to Forest City, Iowa.  Executive Director Dorman discovered that Winnebago owns an empty building near their plant.  Even if their rent was not increased, better language could be put into the lease. Carpenter would pay accordingly for capital improvements; e.g., the rent would go up according to a depreciation schedule.  We would not like to see them leave; however, it’s a nice building and very marketable.  Commissioner Moore asked how many employees they have.  Currently, they have 12 and have been as high as 90.

There are a few options to consider in negotiating a new lease:

    1. Don’t make any changes.
    2. Leave rate at $1.80/SF and make language changes in lease.
    3. Increase rent to $2.00/SF and make language changes in lease.
    4. No longer than a two-year lease if not increasing the rental rate.

Commissioner Skophammer asked who drafted the leases we are using and Executive Director Dorman said both John Hareid and Dan Kolker have done work for ALEDA.  Most leases have been renewals so staff makes the changes, but to change the language an attorney should start from scratch.  It will be more expensive upfront, but the new lease could be a template to be used for other tenants.  Executive Director Dorman is looking for feedback on the lease options discussed and asked the commissioners to call him with any ideas.

  • ZRB Lease Update – The spec building roof is leaking and ZRB is hesitant to move in until it’s remedied.  The leak has been hard to determine where it’s coming from, but the contractor is standing behind it
  • Alliant Meeting Update – Tom Aller, President of Interstate Power spoke to a group of city and county officials at the ALBDC a couple weeks ago.  Historical rates between Minnesota and Iowa were compared and everyone left with a better understanding of how their rates are calculated.  Alliant also said they would like to sell their buildings around town and build a new one.  Commissioner Fligge asked about the number of employees in Albert Lea and there are 45.  They plan to rebuild the power station south of the courthouse and tear down the carwash they own on Newton Avenue.  President Rasmussen commented that it was a good meeting and there is commitment on both ends to be successful and partner with each other.
  • Gametec Bldg – Executive Director Dorman recently showed the building to someone interested in opening a call center and mixed martial arts studio.  He liked the building and Dorman also suggested the old Walmart building. Tom Leland is also showing this building to a company who does maintenance on wind towers.

8.  EX-OFFICIO UPDATE

Freeborn County – Mike Lee

    • The recent shutdown slowed work being done on the jail exercise area.
  • The county has received the first production tax check from the Bent Tree Wind Farm.
  • The county staff will sit down in September with officials from the Shell Rock Wind Farm to start talking about the project.
  • The new radio tower will be connecting with the state tower sometime this fall.
  • The county passed a mortgage subordinate agreement with USRG Holdco IX, LLC (new owners of the bio-diesel plant).

City of Albert Lea – Chad Adams

  • Chad Adams reported the city will be facing a million dollar budget cut for 2011-12.  The city can make it through 2011 without major cuts, but 2012 will be more of a problem.  There is a budget workshop planned to discuss staff cuts, property tax levy, and other options.
  • The city will receive one million dollars in state bonding for the Broadway streetscape project, but it’s not guaranteed yet as there are things that need to be done.
  • With the Broadway Ridge Fund turning from a loan to a grant, the paperwork can be expedited quicker and is not as risky.

Chamber of Commerce – Randy Kehr

  • The sign ordinance is coming back and will be discussed at an upcoming council workshop.
  • The Chamber golf outing was a good day even though it was so warm.
  • Randy commented on the good, respectful meeting with Governor Dayton.
  • Leadership training starts August 16.
  • At the National League of Cities Conference, Vern, Randy and Ellen will be presenting the Blue Zone/Vitality Project.

9.  COMMISSIONER ITEMS – None

10.  ADJOURNMENT

Commissioner Brooks made a motion to adjourn the meeting, seconded by Commissioner Moore.  The motion carried 6 in favor, 0 opposed.  The meeting adjourned at 8:40 a.m.

 

Filed and attested August 3, 2011.

 

_____________________________                    __________________________

President                                                               Board Secretary

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