MINUTES
ECONOMIC DEVELOPMENT CORPORATION
August 16, 2011
Members Present: Zwarensteyn, Clanton, DeBruyn, Brandt, Gabrielse, Gaffin, Frederick, Bartz, VanderHeide
Members Absent:
Others Present: Lisa Golder, Economic Development Planner, Mayor Richard Root, Rich Houtteman; Commissioner Mike Brown; Tom Chase, Kentwood Finance Director; Tony DeLuccia, Woodland Mall
1. Financial Report:
There was no financial report available for this month.
2. Approval of Minutes:
The EDC reviewed minutes from June, 2011. After discussion,
A motion was made by DeBruyn with support from Zwarensteyn to approve the EDC minutes from June, 2011.
--Motion Carried—
3. Loan Application – M & D Leasing
Rick Gaffin recused himself from discussion as he is a personal friend of Drs. May and Mallory May.
Lisa said that the loan to M & D Leasing was approved approximately 5 years ago and is to mature in September. Current balance of the EDC loan is approximately $85,954. Normally the applicant would seek refinancing with the bank and the EDC would be paid off. In this case, the bank’s appraisal indicates that the value of the property has declined from 1.2 million in 2006 to $785,000. The policy of the bank is to extend credit to a maximum of 80% of the appraised value. The renewal of the bank loan would exceed the value of the property. M & D Leasing is requesting the extension of the loan for five years at an interest rate of 5% amortized for 15 years. Founders Bank would refinance the other $901,635 remaining on the loan.
Joel Brandt led the discussion regarding options for the EDC. He said that the EDC needs to improve the structure of the loan. We do not want to force the default of the loan. Although the guidelines are flexible enough to allow the extension of a loan, the loan program is not necessarily set up to refinance after the first five years.
Dave asked about employment. Current employment is 14; there may be 2 additional employees added.
Initial projection for employment estimated only 7. Company has shown a good level of growth.
Ed said the company has been a good payee, good to support.
Dr. May said that volume has been better than many dental practices. One reason is visibility. They have made some good decisions regarding training investments with staff.
Joel discussed the loan options with the EDC members.
One option is to offer a 5 year loan to match bank loan but the amortization of the loan is reduced from 15 years to 10 or 5 years.
Another option is offer a 15 year amortization with a four year pay off, or one year earlier than the bank payoff. There would have to be a requirement for the bank to offer a term that is longer than the EDC loan. There was a question as to whether EDC could make this a condition of their loan. Could the bank wait a year before they decide on their loan? Joel said the bank could wait a year but then there would be another appraisal at the cost of approximately $5,000.
After discussion,
A motion was made by Frederick, with support from DeBruyn, to approve the extension of the remaining balance of the EDC loan for M & D Leasing LLC at a rate of 5% amortized over a 10 year period.
--Motion Carried –
Gaffin Abstain
4. MML Reception:
Mayor Root introduced the request. The MML Conference Host City Reception will be held on October 5, 2011 between 6:00PM and 10:00PM. The reception will take place during ArtPrize at DeVos Hall and will draw attention to the event. The 6 cities in the Grand Rapids area are hosting the event. There is an opportunity to partner with the city of Grand Rapids, other municipalities and private businesses. The Mayor would like the Kentwood EDC to take leadership role in this event. This will be an opportunity to get the EDC name out. There has also been funding secured by the law firm that provides the city’s legal counsel and the city’s auditor. The requested contribution is $2,500.
If EDC approves the EDC logo will be displayed along with a sponsor ribbon for attendees from the EDC. At least two tickets will be provided.
Richard Clanton indicated that other cities’ EDCs will participate. The EDC could also place its brochures at the site.
After discussion,
A motion was made by Frederick with support from DeBruyn to approve sponsorship in the amount of $2,500 for the Michigan Municipal League Reception.
--Motion Carried—
Additional discussion ensued regarding the logo to be used. It has to be recognizable as the city of Kentwood, but also have the words “the Economic Development Corporation of the City of Kentwood.”
Rich said that a student from Kendall has assisted the city in developing a logo for its Leadership program; he may be able to assist in this matter.
Lisa said that we have the “Living Working Growing” Logo that we use elsewhere.
5. 2011 Forum
Discussion regarding the 2011 forum:
Lisa said the city spent about $783.13 on the Forum. Costs include the following:
Food: $178.
KCI Postcards: $605.13
TOTAL $783.13
There were three sponsors:
ArcPoint: $100
Express Employment: $100
Miller Canfied: $ to be determined
Attendance fees, less chamber expenses: $172.
TOTAL INTAKE: $372. Plus Miller Canfield Contribution
Wyoming is interested in partnering with the city on next year’s forum. We will need to start earlier than last year, but will target Manufacturing Week, May 1-11, 2012.
Lisa will send a letter of acknowledgment to the sponsors.
6. Brochure: Lisa said she noticed there are still many boxes of brochures. We should send them out. Anyone that wants a box and come and get one. Woodland Mall can display some. We should have them at the library and especially at the Entrepreneurial Center.
Other business: The Mayor commented on a potential upcoming issue with the elimination of the personal property tax (PPT). He said that if this is passed it will be a loss of over $2.5 million dollars in revenue for the city. Replacement revenue is not clear. Cities with manufacturers will be hurt.
Tony said the mall is doing well. A new store Francesca opened and is doing well. JC Penney also recently remodeled. There are still vacancies, but there is some potential for 2012.
The August meeting of the EDC was adjourned.