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HomeMy WebLinkAbout2017-12-04 SEDA Meeting Minutes MINUTES OF THE MEETING OF THE SPRINGFIELD ECONOMIC DEVELOPMENT AGENCY HELD MONDAY, DECEMBER 4,2017 The Springfield Economic Development Agency met in the Council Chambers,225 Fifth Street, Springfield, Oregon on Monday, December 4,2017 at 8:19 p.m.,with Board Chair Sean VanGordon presiding. ATTENDANCE Present were Board Chair Sean VanGordon, Board Vice-Chair Sheri Moore and Board Members Marilee Woodrow, Christine Lundberg, Hillary Wylie and Leonard Stoehr. Also present were City Manager Gino Grimaldi,Attorney Mary Bridget Smith, and Administrative Specialist AJ Ripka. Board Members Joe Pishioneri and Sid Leiken were absent(excused). CONSENT CALENDAR 1. MINUTES a. Minutes of November 13, 2017 2. RESOLUTIONS IT WAS MOVED BY BOARD MEMBER LUNDBERG WITH A SECOND BY BOARD MEMBER WOODROW TO APPROVE THE CONSENT CALENDAR.THE MOTION PASSED WITH A VOTE OF 6 FOR AND 0 AGAINST(2 ABSENT—PISHIONERI AND LEIKEN). COMMUNICATIONS 1. Business from the Audience—None. 2. Correspondence—None. 3. Business from the Staff—None. REPORT OF CHAIR—None. REPORT OF COMMITTEES—None. PUBLIC HEARINGS NEW BUSINESS 1. SEDA Downtown Urban Renewal Loan Program. Management Analyst Vahana Keene presented the staff report on this item. Ms. Keene said she is before the Board to get approval to move forward with the implementation of the SEDA Springfield Economic Development Agency Minutes December 4,2017 Page 2 Downtown Loan Program. In October,she presented the original concept for the program to the Board.The program was developed through a series of meetings held with City staff,business owners and other agencies with interest,such as NEDCO and the Chamber of Commerce. During those meeting,they asked the businesses what they would like the City to focus on,and the overwhelming answer was this type of loan program. Ms.Keene said the proposed program is a 50%matching loan with amounts ranging from $50,000 to$200,000. It is meant for substantial, structural,aesthetic improvements to buildings that are located within the boundaries of the Downtown urban renewal district. She described the boundaries of the urban renewal district.The parameters of the program were to include items and updates that were to stay with the building should a vacancy occur.The City balanced the funds we offered with low interest rates.Those interest rates will be revisited annually,but will be set at the time of the loan. The program includes manageable repayment terms,which includes no penalty for early payoff and allowances for lack of substantial business financial history. In creating parameters for this program,great care was taken to balance desirability with fiscal responsibility and ease of access for those interested. This program will be more accessible than a traditional business loan through a bank,but with more consistent presence and standardized rules than with previous SEDA activity. SEDA funds were included in the FY18 budget in an amount of$200,000 to support this proposed building/facade improvement activity. As part of the FY19 budget process, staff will request a renewal of this program if it is successful. Ms.Keene said once the Board approves,staff will work to finalize application materials and begin advertising the program in January.Advertising efforts will be made to businesses located outside the downtown area that may be looking to move or expand to a second location. Initial program activities will be reviewed in the spring of 2018 to see how the program is going.This intentional investment into our community is meant to spur ongoing and substantial business growth in our downtown for years to come. Board Member Woodrow asked if those taking out the loans include only for-profit businesses or also non-profit businesses that own the building. Ms.Keene said they don't have to own the building, but must have written approval from the building owner. Both for-profit and non-profit businesses are eligible. Board Member Lundberg asked who was going to track the loans. Ms. Keene they are considering if it will run through the City Manager's Office or Finance Department. Board Member Lundberg asked if they had considered staffing and the time it will take. Ms.Keene said it will be a very small amount of staff time. Mr.Grimaldi said there won't be many loans to track. Board Member Lundberg said there could be a potential for an issue with nonpayment. Ms.Keene said staff would also be working with the City Attorney's office to address that issue. Springfield Economic Development Agency Minutes December 4,2017 Page 3 City Attorney Mary Bridget Smith said the loans would be secured with a promissory note. They will have processes in place for any issues. It should be manageable at these amounts. Board Member Moore said there was a concern about default. She confirmed it would be written in the contract what would be considered a default. Ms. Smith said that was correct. They may have a small business with other loans that will be higher priority than the City's loan. Securing it to the property is a good way to ensure some performance. Board Chair VanGordon asked who would have the final decision making power on the applications. Ms. Keene said they would convene a board of approvers consisting of herself, Economic Development Manager Courtney Griesel, City Attorney Mary Bridget Smith, Accounting Manager Nate Bell, and possibly someone from the Planning Department. Board Chair VanGordon asked what would happen if that group couldn't come to a decision. Ms.Keene said that is something they will need to determine. Mr. Grimaldi said it is likely that if that group can't come to an agreement, it is not a loan that should be made. Board Chair VanGordon said it sounds like they are asking all of the right compliance questions. It only takes one loan to cause a big problem. He would like staff to look at the interest rate and make sure it will cover our staff expenses. If it shows we are giving a substantial subsidy, it's something we need to discuss further Board Member Moore asked if the payback money would go back into the SEDA loan funds. Ms. Keene said staff would need to make that determination. Board Member Lundberg said she hopes that all of these things are worked out before it goes out to the public. Mr. Grimaldi said as they do a loan, staff will inform the Council with details.At that time, Council can provide input or share concerns. Board Chair VanGordon said if the Board gives approval tonight, it is with the understanding that all of the questions and processes will be worked out. IT WAS MOVED BY BOARD MEMBER WOODROW WITH A SECOND BY BOARD MEMBER MOORE TO APPROVE THE SEDA DOWNTOWN URBAN RENEWAL LOAN PROGRAM FOR THE SUBSTANTIAL BUILDING AND AESTHETIC IMPROVEMENTS IN THE DOWNTOWN URBAN RENEWAL AREA. THE MOTION PASSED WITH A VOTE OF 6 FOR AND 0 AGAINST(2 ABSENT—PISHIONERI AND LEIKEN) Springfield Economic Development Agency Minutes December 4,2017 Page 4 THE MOTION WAS AMENDED BY BOARD MEMBER WOODROW WITH A SECOND BY BOARD MEMBER WYLIE,ADDING "WITH PROPER GOVERNANCE IN PLACE". THE MOTION PASSED WITH A VOTE OF 6 FOR AND 0 AGAINST (2 ABSENT—PISHIONERI AND LEIKEN). OLD BUSINESS—None. ADJOURNMENT The meeting was adjourned at 8:32 p.m. Minutes Recorder—Amy Sowa i1110011 eri Moore Secretary