Uh good evening everyone. Uh and I say evening because normally our EDA meetings are in the morning, but we do have a special meeting this evening on December 2nd, 2025. Uh which I will go ahead and call the this uh EDA meeting uh for the city of Cottage Grove to order. Our first order of business will be though the pledge of allegiance. So, if you please rise. >> I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. >> All right. Well, uh, Jamie, please do the role. >> EDA President Bailey >> here. >> EDA Vice President Olsen >> here. EDA member Jean Baptiste, EDA member Kada >> here, >> EDA member Latac >> here, >> EDA member Scott >> here, >> EDA member Cheetah >> here. >> All right. Thank you. All right. So, we'll move to number four uh which and I'm going to be making some changes a little bit after this just to let you know because we have somebody that's stuck in traffic that has to get here to to talk about uh the business items. But we'll start with number four which is appro approval of the minutes. And what we are approving is the 1119 2025 EDA meeting minutes. If there were no corrections or changes, I'll look for a motion in a second. >> I move to approve the meeting minutes from our last meeting. >> All right. Second. >> So I have a a motion by uh EDA member Cheetah, seconded by EDA member Kada. All those in favor signify by saying I. >> I. >> I. Opposed. >> Motion carries. And again, uh, due to, uh, an individual that's going to be here, um, to go over some of the, uh, financial information, uh, with regards to the TIFF, uh, descertification, uh, which is Stacy from Ellers. Uh, we'll go ahead and move to number six, which is, uh, two public hearings. Uh, and we'll start with those first. And so I will go with uh, A, which is the 2026 H levy public hearing. And Brenda Melanowski, our finance director, will take us through this. And if the record would show, uh, Jean Baptiste, EDMA member is now, uh, with us. Welcome. >> Good evening, EDA president, members of the EDA. Uh, before you hold your public hearing, uh, regarding the HA levy for 2026, I have a short presentation. Um, as a reminder, when the city um established uh the EDA, uh they afforded uh the EDA both HA and EDA powers in the bylaws. And so that is why in front of you this evening, uh because you establish that HA levy component. Um as a reminder, the EDA levy it is we use that for those traditional economic development type activities uh that we do um in the city. um specifically regarding the business park and helping businesses. Uh the HA levy on the other hand uh it can be used for housing and development for low to moderate income families. Um in 2025 we established the HA levy for the first time here in Cottage Grove. The reason we did that, the activities that we were doing uh regarding uh that housing development for those low to moderate uh families, we were had been doing in the past, but we felt it was more transparent uh to do a separate levy so that our property taxpayers, whether it's our businesses or our residents, that they can see how much they're paying for those activities. And so that's why we did that in 2025. uh we simply took the EDA levy uh from 2024 and we took 50% of it and we called it the EDA levy and 50% of it we called the HA levy. We also moved 50% of the salaries from the EDA fund over to the HR fund to recognize those activities that had already been happening in the city uh that we would continue uh to do. Uh here uh is the allowable uses for the HR um and specifically to remedy that shortage of housing for low and moderate residents and to redevelop blighted areas. uh the city or the city the state uh sets the maximum levy that we can set at the city for HA activities or the H levy. It's 0185% of our market value. For 2026, that's $1.25 million. Uh in 2025, the HA levy was 137,500. For 2026, we're proposing to increase it by $5,000 up to 142 142,500. The 142,500 is the same amount that you set uh in June for that preliminary property tax levy for the HA. Uh the 2026 budget uh here's on the screen. Uh it is showing the 2025 budget and 2026 for comparison. And just as a reminder, uh we had moved those salary and benefits from the EDA fund. Uh we had first established it in 2025. So that is shown on here. And we're proposing to do a modest increase of $5,000 to the H levy. Um just over uh 3% increase 3.6% uh from 2025. uh because we have growth in the community, the median home in Cottage Grove will see about a dollar decrease on the HR levy and that is because of the new construction in the community. Uh the thing that um I really thought about in the last month um as we didn't have an EDA manager who would typically do some of these affordable housing type of activities. Uh we had two uh projects coming in at the same time. We had roars with the affordable housing and we had real estate equities and so we had city staff time whether it was the community development director or the finance director um or administration or the planners uh working with those developers to get those wellqualified affordable uh projects across the finish line. So this really came into f fruition for me to realize that those activities that we've been doing in the past that by having this H levy that we're really recognizing what we're doing in the community. Uh we are not the only community in the metro that is uh establishing that H levy. So on your screen um and in your packet uh were the other metro communities uh that established those HR levies in the past and are proposing to do that for 2026. Uh with that um the recommendations are on the screen and I'm happy to stand for any questions. >> Okay. Uh thank you uh Brenda. Um I I have two real quick questions if you if you would. the I know you mentioned it was 5,000 for the salary and benefits and that's you said about 3%. Is that correct? >> Um the the levy went up about 3.6% and salaries went up about the same. >> Yeah. And didn't we do and and maybe um I'm not sure if it's you or whoever, but isn't the levy or I'm sorry, isn't our cola for this year 3%. >> It is a 3% um cola and a 3% market. >> Right. So it's actually more. I just I just wanted to put the connection of the 3% in there. >> Yes. >> Uh that that was there. So, okay. Um yeah. Uh Council Member Olsen. >> Thank you, Brenda. Thanks for the explanation here. Uh I like the fact that you [clears throat] mentioned at the outset, you know, the attempt to be more transparent in terms of, you know, where these funds will be designated and what they can be used for, which is important. I always um want to mention when we talk about anything related to the EDA that uh we have two separate EDA funds. One of which is funded through the levy and another one that is funded differently. I wondered if you might take a moment and just revisit that to ensure that anybody watching at home who may have any questions um has a clear understanding of the way that uh that financing works from the EDA side. And then when you mentioned splitting the the number between EDA and HA, which fund are we talking about? >> Okay. Yep. Um, great question. Uh, >> I thought so too. Thanks. Appreciate [laughter] that. >> EDA member Olsen. Yeah. Say, [clears throat] Council Member Olsen. Um, so yes. So really three funds. And so anybody that's worked in government or looked at government, we like to have lots of funds because we like to segregate um an account for our taxpayers. We want to be transparent on how we're utilizing our fund. Our general fund is our chief operating budget for the city. Pays for police, fire services, snowplowing, all those sorts of activities. Uh but when we talk about EDA, uh we have the EDA special revenue fund which has that EDA levy component and that is more of those operating activities. It it funds our our EDA manager um and some of those uh yearly operating activities. um the HRA fund also a special revenue fund funded now with this uh HR levy um and still accounting for that EDA manager and staff and those site sorts of HR activities um and then specifically uh the ED trust fund um that is a capital project fund. It is funded uh with a donation that we receive um at the city uh for um a taxpayer uh that we helped get legislation uh through many many years ago. And so they uh give the city uh that donation and we utilize it for uh projects. Most recently uh we had used it uh to help uh in the south district to do some utility work. uh we did uh had some money in that fund to fund those street projects in that that area. And now as those parcels develop in that south district, those special assessments that we levied are replenishing that ED trust fund. >> Perfect. So, just to be clear, uh we've got an EDA and an HA levy, and our uh economic development team has the opportunity to essentially use those funds for um very specific purposes that are statutory in terms of the direction that we can go. And then we also have an EDA trust fund that is funded through a business donation that the city receives every year. And that's not taxpayer money. And those funds can be used for kind of a wider array of events, whether we need to help support a development that's trying to come online or I know sometimes we do facade improvement grants out of that fund for local businesses that are trying to improve the way that this the business looks. I know when we go to our um ICS events each year, that's also funded through that ED trust. So that has no bearing whatsoever on our taxpayer or the the tax levy that we certify each year. Is that correct? >> That is correct. And I I just want to make one clarification. The facade improvement uh we do fund that out of the EDA special revenue fund. However, we are doing a transfer from the ED trust fund over to the EDA special revenue fund. And so part of that transfer that occurs um funds those facade improvements. So net net, it's a zero impact >> to the taxpayer. Yes. >> Perfect. That's what I needed. Thank you. >> All right. Yes. Uh uh EDA member LTE, >> thank you. Uh thanks for your presentation. Um so one question I have is it looks like um the burden on the taxpayer will actually go down a little bit because of uh the development of other buildings. Correct. And other residents. Okay. >> The new construction. And so when we look um at the property tax levy and the impact uh we look at the existing properties. So our individual properties went up about 3% in the community. Um and then new construction and so that new construction in the community also went up 3% and because of that new construction the median home will see a decrease in 2026 regarding the H levy. Okay. >> Thank you. Okay. Any other comments, EDA members? >> All right. So, uh, this is the opportunity for a public hearing. So, I am going to go ahead and open the public hearing. Is there anybody in the audience that would like to speak on the H levy for fiscal year 2026? Nobody at all. All right. Then, I guess I'll go ahead and close the public hearing. And, uh, EDA [clears throat] members, we do have, uh, one motion uh, that's up on the screen. If somebody wants to take it. >> Motion to approve resolution [clears throat] 2025- Z002 setting an HR levy on taxable property of the city of Cottage Grove, Washington County, Minnesota for fiscal year 2000 or 2026, a special benefit tax levy not to exceed 142,500 per the proposed 2026 budget on file with the city. >> All right. So, I have a a motion by EDA member Kada. Do I have a second? >> Second. Second by uh EDA Vice President Olsen. Any further discussion? All right. Seeing none, all those in favor signify by saying I. I. >> I. >> Opposed? >> No. >> Motion carries. Is that 61? >> Yeah. >> Okay. All righty. So, next we'll move to B. You're good with that going to B? Okay. Um, so we have the uh B under public hearings is the Cedarhurst Event Center, which is the financial assistance request and our city administrator, Jennifer Levit, is here. And then I do believe Stacy is now here. There we go. >> Well, thank you, EDA president and members of the EDA. Uh, tonight we're here to talk about the Cedarhurst Event Center. Um, just to give you a little bit of timeline because I know some of you may be wondering how things changed. So, I'm going to give you a little timeline of how we got here this evening. So just a reminder uh 360 uh real estate purchased the property uh that is located at uh 70th and 19 which included the mansion and the gardener's cottage. And at that time they had proposed a mixeduse development. If you'll recall they had a highdensity product that sat on one part of the parcel. They had town homes, road town homes behind it abuing uh the single family residential and then they had a mixeduse product uh sitting uh parallel to 70th street. So, a lot of density and at that time uh we did have our um historic uh consultant review the proposal and felt that the density was actually too great and detracted from the actual character of the mansion because one of the characteristics that was making it on the national registry was actually related to the lawn and the activities that took place there. And so they were not uh adhering to the character. And so at that time the mansion um essentially has sat vacant since that time. And then Bella Gala, who we heard from uh earlier this year, uh was interested in moving that property forward. So in August, you'll recall as the EDA, you approved a business subsidy for $100,000 as a forgivable loan to offset the project cost. You'll recall they had what we envisioned as um the really most appropriate historic preservation project, right? It was keeping the mansion intact. It was providing a usable space and event center. And some of you know that we have a convention and visitors bureau. And so it really fed into our strategic plan and vision and kept the integrity of the mansion. So it was a proposal we were very excited about. Unfortunately, in October, one of Bellagala's uh investor profile kind of changed and it caused the project to go um into a little bit of limbo and uh we didn't want Bella Gala to walk away because we felt that their product really was what our community uh wanted and also it preserved this really uh unique historical feature we had in our community. And so at that time, Bella Gala requested a $2 million loan uh from the EDA with $600,000 forgivable. Um and so I will eventually turn it over to Stacy from Ellers to talk more about the loan and how all that will work. But I also have to remind you then as part of tonight's action, you would actually be rescending that approval of that first request for the 100,000. So that uh will go away. So in essence, all of this will enable us to preserve the mansion, keep the historical integrity, and all of the improvements um that we had originally uh viewed uh would still be uh able to go forward. And so with that, I'm going to ch turn it over to Stacy with Ellers and she can talk a little bit about the loan and the financing of it. >> Thank [clears throat] you, President Commissioners. Nice to see you, and thank you for accommodating the switch around on the schedule. So, I appreciate that. Um, as Jennifer had stated, uh, before you tonight is the consideration of a $2 million loan to Bella Gala to bring Cedar Hearse back to its natural, right, original state. And before I go into the details of that, I just have to say, you know, you guys know this project well in your community knows it well. You know, when we talk amongst ourselves back at the office or with other people and they hear about this, you know, about Cedar Hearse about, it's like everyone's like, "Oh my gosh." You know, they have a lot of love and passion for it as well. So, people are excited that potentially it's going to come back to its its original. It'll be open for events and everything as well. Um, essentially what they are providing is a $2 million loan uh to them and it is an eight-year loan. So, the first year is going to be uh no payments. So, that's giving them that first year to get in get the venue up and running, right, and cash flowing. So, it gives them a little bit of a you know um a buffer, right? So, that they have the opportunity to pay in the future. Then in the years 2 through the eighth year, they will be paying principal and interest on the $1.4 million portion of the loan. And then the $600,000 portion that's forgivable, that will be interestonly payments that will they'll be making on that as well. So at the end of the day, when we look at what's really repaid on that loan, because it's at a 5% interest rate, is essentially your $2 million loan that you're making of which you are forgiving 600,000. you're basically gonna get your principal back, right? Because that 600,000 is pretty much coming back in interest back to you. It's about $572,000. Now, the thing also to know about this is that that note is forgiven at the end of uh year 8, that $600,000. But if for whatever reason, if they are wildly successful, they have the ability to prepay on this note sooner. So, that amortization can move up. So, say it they knock it out of the park, it does a great job, and they want to pay it off in year six, they can. and then that $600,000 would be forgiven at that point as well. So those two are tied together essentially. Uh the interest rate is where we're at right now with the statutory maximum that we have for interfund loan rates. It's a good market rate uh for them as well for help them actually move forward and get this project underway. And your protections really that you have is you have a mortgage on the property. You'll be second position to the bank. But you know at the end of the day when you look at this, it's kind of one of those once in a lifetime opportunities that comes before you. So your investment really is about bringing this back as a community asset that can be utilized. And because you are acting as a lender, there is risk, right? There is risk that the developer doesn't become successful, that they can't make a go of the project and potentially you may not get your original $2 million repaid or the 1.4 that you're anticipating to get repaid. That's your risk profile, but we think that we have mitigated it. The other good thing is you have a a event uh coordinator or group that has experience, right? So, it's not somebody who's never done this before. They're not new to the business. They get it and they actually understand it. So, with that, um, Mr. President, I will turn it back over to you to open the public hearing because this is considered a business subsidy, which you did the hearing before, but since we have a higher amount, we are reholding that as well, and I'll be happy to answer any questions. >> All right. First, uh, just is there any questions for her at this point? >> Yes. Uh, EDA member Jen Jean Baptiste. >> Yeah. Um, thank you for the presentation. So, one quick question is, are we at all worried about um excuse me, their capital position? So, it seems like they would be at less than 5%. Um, which seems a little bit low given that you know it's close to a $9 million project. Most of the time if you're doing multifamily, even if you're doing um residential owner occupant, you can't get a duplex for less than 5%. Yet, these guys are doing a $9 million project with less than 5% with the city having a 23% position. Are we concerned that they might be overleveraged at all? >> Uh EDA president uh commissioner, that's a great question. And so yeah, their equity investment is low, right? And that's one of the things that we noted, but that's what they have to bring to the table today. But you know, they are also signing on a loan with the bank that they're going to have to be responsible for repayment of as well as this loan as well. And at the end of the day, in your traditional um projects that we would look at, you know, we would probably have a different opinion on how to move this forward, but this is a really um kind of a once in a lifetime of special circumstance. So, at the end of the day, this is what helps get it over the hump, right? To get this project moving forward to actually get the bank loan closed and get the project moving forward. >> Got it. Um one more question on the do do they have any sort of prepayment penalty? So, I know in um in the file had mentioned that we could potentially get very close to that $2 million back, about 1.9, but close to about I think a little over half million of that is in interest. And that's assuming that they pay for the full eight years. But to your point, if this project is wildly successful and decided to pay off early, you know, is there a prepayment penalty that gets us at least close to that 1.9 or are we going to be close to that 1.4? President, commissioner, there is no prepayment penalty on the city's loan. >> Okay. What I what I might just uh mention out there just for the for the group, what what is interesting or unique about this, let alone put aside Cedars at this moment um is the bank that they're going through. literally had us a meeting with us uh to talk about the entire project, which is frankly having a bank talk to you about the a loan that they're going to give to a business is like completely I've never seen it in all the years I've been the mayor. Um so that was kind of interesting to see that and and I don't think it's in here, but we did get to see some of their financials, if you will, on the other venues that they're they run around the Twin Cities. They've been extremely successful, very well respected and well known. Um, and even what they're proposing on our on this site here for what their cash flow is going to be, it's going to be based on what we saw, even if it's half, it's going to be wildly successful for them. So, uh, which means it's going to be good for us, too. Uh, and then the last thing I'll mention, um, and and I agree that my comment at the very beginning of all this is if we're going to give a $2 million loan and [clears throat] the interest rates basically, you know, $600,000, if you think about when it's all in, uh, and we're going to give a $600,000 loan, I know it's a little bit different. Before, this is going to sound weird, but I'm just going to say it. We were going to give them a hundred grand just off the cuff, right? But that was what we approved before. So, in the grand scheme of things, we're going to be pre we're we're good. Do you follow what I'm saying? And I mean, originally, we were going to take a hundred grand and just give them a hundred grand to help with the project. In the end here, we're going to give them a loan. Uh, as long as we get the money back, which, you know, obviously there's risk in that. Uh but we're gonna we're basically going to be whole and have a project with a higher taxable value and a venue that's going to be, you know, second to none in the in the east metro. So that's there is risks and I appreciate you bringing those risks up because you know especially the equity piece of it but between us and the bank um and talking with them as a as a a a vendor or whatever or an owner I think we're going to be personally I believe we're going to be fine. Good questions though. >> Al >> Oh yeah. Uh uh EDM member Cheetah, >> are we at all concerned about saturating the market on wedding venues here in Cottage Grove and we've got a couple other private ones. The city has River Oaks. I mean, I guess my concern with this is we're going to have this group that owns six or seven venues across the metro come in and push out a couple of the mom and pop who are already here. I guess we looked at the market here in town to see if we can like I I want to see Cedar Horse restored and back to everything. I just I don't want to lose a couple of our great businesses that are already here because of that. So I guess have we looked at that at all or no? Go ahead. >> Well, EDA members, one thing that I might ask is JJ from Abella Gala is here and he could probably speak to the the the uh market conditions because obviously he's making a huge investment. and his company is coming here to make a huge investment. And maybe I would just ask if he could maybe speak a little bit uh to that. If he could come up to the mic and he could probably answer a little bit more of that question for you. >> Good evening, Eden. Thank you. Um you know, our pressure is on here. We have technically in Chaza three locations on 200 acres and we call it cannibalism. like is this going to cannibalize uh a different venue? Uh we haven't actually experienced that at all. Uh specifically in those Chaza uh locations. Uh we had multiple owners of Cottage Grove as well venues show up to our open house shaking hands, hugging, sharing excitement and enthusiasm about us coming. Um one of the biggest reasons is that they're like hopefully we can get a hotel. if we can get this additional stuff, maybe what we can do is we can get a hotel uh across the finish line because that is actually one of their biggest concerns um from a uh getting people to come to Cottage Grove because Still Water is kind of the closest thing and um so they were hopeful, they were excited um and they're pumped to have us here. So, you know, I don't think uh you know, there's uh 20,000 people basically get married every year in the state of Minnesota. And so, three venues, you know, in a similar community on the eastern suburbs, I don't think is going to be crazy competition. Uh we each offer a different product. We each offer a different, you know, uh range of budgets and and and inclusions and everything else. So, I personally feel confident that, you know, the more the marrier a little bit and uh with three of them, I don't I don't see that being a problem personally. >> I think uh EDA Vice President Wilson had a question for you. >> Thanks for being here tonight. >> My pleasure. Thanks for >> you've been here a few times and it's great to see you and I'm >> I don't need GPS anymore. I can just get here now. Yeah. >> Right. [laughter] Right. And I'm I'm very encouraged um by uh the potential outcomes here. I did want to mention um you know from the convention and visitors bureau perspective uh as I am the chair of the CVB um we very much feel like uh this is a opportunity for the proverbial rising tide to float all boats uh and what's neat is when you look at all of the various venues that are in the city that cater to that wedding and event sort of crowd uh and that includes River Oaks, they all have unique elements that um people are going to want to take advantage of. For example, uh River Oaks is a fantastic facility and I've been to dozens of weddings there and receptions, but they're limited with how many people they can host. They're not as large as say the Madison. And then if the Madison uh is looking at, you know, kind of marketing themselves, the the barn venue business, and please correct me if I'm wrong, but uh the the barn venue business continues to grow very rapidly. Seems like that's the hot thing right now. So, um you know, I'm pretty confident they're going to be okay. Uh they also do a lot of events. I was just there for their winter market on Saturday and the place was packed. You could not get a parking spot. In fact, they had to make an announcement not to park on Lamar Avenue, otherwise things were going to get out of hand. Um, and then I know Hope Glenn and and I know the owners of Hope Glenn quite well. You know, their their niche is very unique as well, and [clears throat] they're the first ones to actually reach out and say, "Hey, can we help you get off the ground? We'd we'd like to to see you be successful." because there again the idea is from a marketing perspective based on CVB and their point of view this is going to bring more people to the community and I also have a very strong belief that uh it'll be the tipping point for us to get that hotel that everybody's been talking about. We've been working on that for several years. We've got several interested parties. Um you know it all comes down to do the investors have the money and want to take the risk in the current economy as I'm sure you're well aware of. Uh but um I have very high degree of confidence that uh Bella Gal is simply going to be an addition to the menu. It's certainly not going to uh force anybody to you know have to go on a diet. I I think it'll be really good for everybody and especially with some of the drawings and schematics that we've seen over time. Um you know you present a great product but it's a different product than the others. So I think it's complimentary in nature. That was part of our plan, too. Like, we don't want to come into a town and serve the same menu item to use your analogy. Like, we want to be unique and um because there's a lot of cities and a lot of towns that that that have old historic buildings and that need additional venues, but the the niche, the opportunity here was just, you know, once in a lifetime, I think you had said. And um that isn't just from a community standpoint, it's from a a business standpoint for us, too. >> Right. And I know that your other venues have been extremely successful and uh that is also very encouraging obviously. So uh thanks again for being here tonight and for addressing that issue for me. I appreciate it. >> Of course. >> Uh Ed member Kada. So my I guess my my questions were just kind of on the and kind of in line with what uh Baptist had said which was you know from a [clears throat and cough] from a like a leverage and liability standpoint um you know where do we stand in line with other creditors if if the project doesn't go as planned you know like are we are we are we going to you know have a lean against the building or are we just taking on the full liability that if if this project doesn't come to fruition, we're going to absorb the the cost of this or is there what levels of recourse do we have there? And then um my second question was in terms of a you know like a contingency you know if this 2 million is the 2 million that gets the project over the finish line and as we found out during COVID when we were every RFP we had was coming back five or 10% higher than we had anticipated. you know, what what kind of contingency is built into that to make sure that, you know, there's not going to be another ask down the road or not not just an ask, but but a genuine need for additional funding and if so, you know, what contingencies are in place to make sure that that funding can get procured so the project gets done. Yeah, maybe Ellers can help support a little bit, but I'm happy to answer the a part of question two perhaps. Um the reason that the loan has been structured the way it has the the to support the performer that we presented um it has given us confidence to know that this is going to be successful that we are going to make this happen that we are going to you know pay the bill and and uh create a very successful business. So um you know what tangible contingencies do you have? Um, again, maybe uh Ellers can come on up in here and >> I'll stay close just in case. [laughter] >> Thank you, President Commissioner. Um, you're in second position or last, right? Because the bank is always going to have first position because they have the larger loan that's out there on this. So, at the end of the day, let's say the bank puts in their money, you put in their money, they put in their equity, and they do the construction, right? You get the everything all rehabilitated, and for whatever reason, it is not successful, right? So again, you'll be in last position basically for any recourse on your loan, even though it is um does have a mortgage on it, right? It's going to be in second position, but essentially what you have at the end of the day is now you have a facility that's actually been fully renovated, right? So it's back up and it's fully functioning. So, what's going to happen if the bank has to foreclose? Then they're going to sell and there's probably going to be a secondary operator that comes in that's going to get it probably for a better price uh than what was invested in it and then make it a go at that point in time. So, again, at the end of the day, you may not get your investment back, but you have invested dollars into a capital project that's actually going to be producing higher taxes and then somebody else can step in and and hopefully make that successful. >> And I don't think he wants to speak after that topic. >> [laughter] >> We're expecting he's going to be >> question. >> Yeah. >> Yes. Uh so ED member Oh, sorry. Did you have any more questions or uh ED member lit? >> Uh yes. Did we I'm sure we ran some projections on the annual tax revenue uh projection for this or has that been done at all? Uh, president, commissioner, I don't think we ran the tax revenue projections of that, but we're happy to do that and staff can provide that information as to what the city's portion of the taxes would be. >> Thank you. All right, sounds good. Uh, any more question? Oh, yeah. I'm sorry. Uh, Jean Baptiste, EDA member. >> Same thing along those lines. not just a a costbenefit analysis on the tax revenue but also on you know the projected employment to see you know essentially we're going to we're investing somewhat close [clears throat] to 600k on that how does that compare to the return not just with the tax revenue but the jobs um that it's supposed to create you know how does that look over the course of eight years so on and so forth >> uh president commissioner I believe what you have is if I recall it's 35 full-time employees and 40 part-time employees generally and that will e flow as you have different events that come on site there. Is that approximately right? >> Uh not the full-time, not not Yeah. So full-time it's actually just a handful and it depends. It's very seasonal uh is how our business operates. Uh but we're running you know close to 50 uh potential part-times with line cooks, valet people, uh front of the house, etc. Um you know, dozens of servers and everything else. And then we would have uh three or four full-time employees, whether it be uh you know, general manager or venue director, executive chef, uh lead planner, and uh typically an additional full-time person in there as well. So, >> okay, that good. >> All right. Anybody else questions? Yes. Uh ED member Scott. So, Cedarhurst, of course, is a historic, you know, buildings. And, uh, how many of of your other venues are historic buildings that have been renovated by you? >> Yep. Uh, so Van Dusen Mansion in uh, Minneapolis is uh, ours. Uh, also the, uh, Edward An estate technically is not legally historic, but it's a, you know, historic style building. And then uh our newest venue or one of our newest venues Leven array uh is actually a Cass Gilbert uh build as well which is part of the property uh here in Cottage Grove and we just opened that one this last May actually too. So half of the portfolio is got some history about it. So >> Okay, good. All right. Thank you. Thank you for uh pleasure. I do have one quick question for our staff. I don't know if it's you for um you know, it's funny that earlier uh when we were talking about the HA levy and that we talked about the different funds that we have the EDA, the EDA trust. Um do you want to speak or does Brenda want to speak on where where is this 2 million coming from? >> Uh yes, the the 2 million would be coming out of that ED trust fund that we talked about. Um and at the end of 2025, we're projecting that that has um sufficient cash uh in there. uh for that. >> Okay. And that and again just for the clarity of the public, the EDA trust fund is non-t taxpayer dollars. >> Correct. >> Okay. Yep. I just thought I'd throw that out there just be because I know people may be concerned that we're utilizing taxpayer dollars to to do something, but Okay. All right. So, with that, oh, I'm sorry. Yes. Uh Mr. uh Cheetah. >> Yeah. I just wanted to follow up on the ED trust fund. I guess I don't know a ton about it. So obviously there's sufficient funding to do this in there, but you know, are we is this is there $3 million in there and we're doing two million for this or is there significant amount in there and this is not we're not going to feel any pain doing this? >> Uh the cash balance at the end of the year uh we're estimating that to be $4.2 million uh before this loan. >> Okay. So about half. >> Yep. And then there's about uh 1.6 million coming in special deferred assessments back into that fund. uh we had talked about that south district street and utility project that we had done and so when those come in uh as part of these developments uh in that south district uh we would add to that fund balance there too. >> Okay. So we'll still have some you know some money to play around with as we go about our business. So that's good to know. Thank you. >> Awesome. All right. So what I'm going to do then is I'm going to go ahead if no other questions for the EDA um for anybody. I'm going to go and open the public hearing. Uh this is the opportunity if anybody wants to speak on this project or this uh this uh uh loan uh is welcome to do so. Anybody at all? All right, I'm going to go ahead and close the public hearing and um EDIA members uh we do have two motions before us. Uh if anybody wants to take the first one. I would first like to compliment Commissioner Cheetah on a very well pointed question about the overall fund balance. >> I was going to ask that. [laughter] >> Great minds [clears throat] think alike. >> Um I would like to motion to approve the business subsidy agreement with Bellagala to provide a loan in the amount of $2 million subject to minor modifications by the city attorney. >> All right. So we have a motion by ED member Kada. Do I have a second? >> Second. Second by Ed member Cheetah. Any further discussion? Seeing none, all those in favor signify by saying I. I. >> I. Opposed. >> One. No. Down there. Okay. All right. Motion does carry. And then I have number two. Who would like to take number two? >> I will. >> Okay. >> I u make a motion to approve the loan agreement with Bellagala in the amount of $2 million subject to minor modifications by the city attorney. >> All right. So, we have a motion by ED member Scott. Do I have a second? Second. >> Second by EDM member LTE. Any further discussion on this one? Seeing none, all those in favor signify by saying I. >> I. >> I. Opposed. >> Nay. >> Uh motion does carry. >> All right. Good luck. Do you have a closing date yet or no? >> I think January 2 is what we're shooting for. >> Okay. Right after the first. >> This was a big moment. So yeah, working with 360. They want to push it in next year. So just >> Okay. So I should know more by the end of the week theoretically. >> All right. Sounds good. Thank you. >> Thank you. >> Yep. Take care. >> Good to see you. >> Mr. Chair, do we need to make a separate motion to resend the previous loan? >> Do we need to do a separate >> or was that wrapped into those two? >> It was actually wrapped in the first uh business subsidy agreement. >> Oh, it was good. Good call, Mr. Cheetah. All right. So, now we'll move back up to five, which is our business item, which is the fourth amendment to the contract for private private development and tiff 1-20 uh descertification. And uh Stacy from Ellers is back. >> Uh thank you, president, commissioners. So, I'm going to do a little history, right? Because a few of you were here when this was done, but not everybody that's sitting on the board today was around when this project came together. So, back in 2021, you created TIFF District 1-20 for North Point Industrial, which is an economic development district. And so, those economic development districts have a 9-year term for them, and it's all about creating jobs, right? Buildings and jobs is what's allowable in those types of districts and for assistance. And so, you entered into a tax increment financing agreement with North Point Industrial, uh, essentially to provide them a pay as you go tax increment financing note for 12 uh 12.1 million. And that was really to take care of all of the construction of all the roads, the roundabouts, utilities, and everything to service that 236 acre site, which you see that's located on the the map that's up here. And so they have come back now and we've had three amendments to date. So we'll talk a little bit about those. So they came back for the first amendment um which was after they had completed all the construction and they had proved up their qualified costs. So they spent approximately $1.8 million to put in all those improvements that you had requested of them. And then in addition to that, they had constructed their first phase of buildings, which is about 775,000 square feet of the plan 3.4 million square feet of industrial buildings. But their timelines were getting pushed out uh for the future phases, phases two through four. And that was really indicative of what was happening in the metro and basically over the state of Minnesota. So that's when we started to see interest rates were rising, right? Uh inflation was high, costs for construction were higher. So things were not getting constructed as anticipated. So between the first, second, and third amendment to that agreement, it was all about pushing out the dates uh for commencement and completion of those future um projects. So when they came in on that first amendment um when we were going to issue the tax increment note, we reduced that from the 12 million that we had originally uh propri said we provide for the 11.8 million in improvements that they had put in down to 7.166 million. And the reason for that is because we updated the projections. Okay, so your timing is sliding. So, we're going to see what it's going to generate over those eight years now. And that's where it was reduced and that's what we issued the note on. So, in 2024, um, in the first half of 2025, we did make payments on the notes. So, they've received about a million dollars in tax increment payments to date. In addition to that, they've created the first uh phase of development, and they've created 77 jobs in accordance with the agreement that we had. And for those that are newer to this, your business subsidy policy says that you have to create at least one job at 200% of the area median income or state or sorry 200% of the state minimum wage. Right? So all 50 or actually all 77 of their jobs are all at and above uh those creation levels that they have. Uh earlier this year in discussions with staff um it became pretty clear that they weren't going to move forward to finalize out the full industrial park. uh they have been talking with uh some different end users about selling that land for other future development in that site. And so then we agreed that well we need to do a fourth amendment uh to that tiff agreement and we need to part ways at the end of the day. So the fourth amendment that is before you today would be acknowledging the fact of what they have constructed to date. So they constructed all the improvements that they said that they would as far as the public improvements. They constructed the first phase and they created the jobs that they're required to in that first phase. And because of that, what they've been paid to date for the million dollars is all that they'll get. And we're going to terminate the TIFF note as well. So the motion or the action before you tonight is to terminate not only the TIF agreement, but the TIFF note as well. And then what corresponds with that is what the state law says on tax increment districts. If you don't have an outstanding obligation in a district, you have to descertify it. We just can't keep it open and keep collecting that increment. Okay? So because you're terminating the tiff note, uh we will go into the county to descertify that district. So that value that's in that district today will be there captured for 2026 and you'll get the taxes that are coming into your benefit. So that's part of your whole plan that you have uh with your budget for 2026 that's coming forward. So with that, uh president, I will be happy to stand for any questions. >> Okay. Thank you, Stacy, for explaining that. Uh EDA members, any questions at this point? Um many of you were here for the different one, two, three or whatever in a lot of cases. So uh EDM member Kada, >> can you briefly explain how the difference in the amount of money that's been collected on the TIF versus the amount of money that was spent on the improvements gets reconciled when one of these TIF districts is dissolved or descertified? President, Commissioner, I'm not sure if I understand your question. >> So, so they said they spent what $12 million constructing this. Um, is there do they have recourse to come back for the other $1 million uh if we descertify? >> Uh, President, commissioner, no, that's what the termination is all about. So, essentially, you invested a million dollars to get 11.8 million in infrastructure that's going to service that interior area and some of the surrounding area as well. So there's no recourse for them to come back and ask for more. >> Okay. >> Okay. Any other comments? EDA. Okay. Stacy, thank you for the update. >> Do you want to hit that? >> You just forward the slide. Um, we'll be able to get the motions for you. >> I just want to make sure that we get the right motion there. >> All right. So, uh, EDA members, uh, we have actually three separate motions. That's what I figured. Um so um if somebody is so uh interested we can start with number one. >> I'd like to motion to approve the fourth amendment to the amended and restated contract for private development buy and between Cottage Grove Economic Development Authority and NPBGO Cottage Grove Logistics Park LLC subject to minor modifications by the city attorney. I think I read that name a few times. [clears throat] >> Yes, you have. >> Um so we have a motion by Edie Member Kada. Do I have a second? Second. >> Second by Edie Bammerita. Any further discussions? Seeing none, all those in favor signify by saying I. I. Opposed. Motion carries. Who would like to do number two? Go ahead. Like to make a motion to approve resolution 2025-003 terminating amended and restated contract for private development and tax increment financing note for North Point project and tiff district number one-20. All right. Uh, we have a motion by ED member Jim Baptist. Sorry about that. Uh, do I have a second? >> I'll second that. >> Second by ED member Kada. Again, any further discussion? >> Seeing none, all those in favor signify by saying I. >> I. >> I. Opposed. >> Motion carries. And then finally, number three, >> I would move to approve resolution 2025- Z004 requesting descertification of tax increment financing district number 1-20, North Point Industrial. >> All right. So, I have a motion by uh C almost called council member. We almost got a promotion there. EDA member uh Cheetah, do I have a second? >> I'll second. >> Okay. We have a second by ED member Scott. She beat your Mr. L. [laughter] Any further discussion? Seeing none, all those in favor signify by saying I. I opposed. >> Motion carries. All right. Uh seven is other business. I don't know if there's anything particular uh anybody has or our staff. No. Other than we do have the hometown holiday celebration uh Thursday this week. So looking forward to seeing you guys coming out here and enjoying your time if you will with family and friends. Uh we do not have a workshop. Uh no presentations this evening. So I'll look for a motion to adjurnn. >> Move to adjurnn. We have a motion by council council member ed vice president Olen. Do I have a second? Second by edia member Kada. See I got you that time. All those in favor signify by saying I. >> I opposed. >> Uh merry Christmas everybody. By the way we are we are jjoured.