Local Option Review Team

AGENDA LOCAL OPTION REVIEW TEAM Monday, June 19, 2017 12:00 p.m. Fremont Municipal Building 400 East Military Avenue Fremont, Nebraska 1. Call to Order 2. Approval of minutes from January 26, 2017 meeting. 3. Consider Local Option Economic Development Application for Legacy Post and Beam. 4. Review Fund Balance. 5. Adjourn. This agenda posted at the Municipal Building on June 15, 2017 and was distributed to the members of the Local Option Review Team on June 15, 2017. The official current copy is available at City Hall, 400 East Military Avenue. A copy of the Open Meeting Law is posted for review by the public.  CITY OF FREMONT LOCAL OPTION REVIEW TEAM JANUARY 26, 2017 – 5:00 P.M. A meeting of the Local Option Review Team was held on January 26, 2017 at 5:00 p.m. in the Council Chambers at 400 East Military Avenue, Fremont, Nebraska. The meeting was preceded by publicized notice in the Fremont Tribune and the agenda displayed in the Municipal Building. The meeting was open to the public. A continually current copy of the agenda was available for public inspection at the office of the City Administrator, 400 East Military Avenue. The agenda was distributed to the Local Option Review Team on January 23, 2017 and posted, along with the supporting documents, on the City’s website. A copy of the open meeting law is posted continually for public inspection. ROLL CALL Roll call showed Members Oliva, Leech, George, Landholm, Vobejda, Jacobus present, Horeis absent. 6 present, 1 absent. Others in attendance included Scott Getzschman, Mayor; Brian Newton, General Manager/Interim City Administrator; Jody Sanders, Finance Dir.; Paul Payne, City Attorney; Cecilia Harry, Greater Fremont Development Council; Isaac Boris, Kevin McMann, Chris Goodwin, Christmas Movie, LLC; Scott Schaller, City Councilman; and Stacy Heatherly, Digg Site Productions. APPROVE MINUTES Moved by Member George and seconded by Member Oliva to approve the minutes of the December 13, 2016 meeting. Motion carried 6-0. REVIEW LOCAL OPTION ECONOMIC DEVELOPMENT FUND FILM INCENTIVE APPLICATION Moved by Member Oliva and seconded by Member Landholm to waive the 30 day notice. Motion carried 6-0. Moved by Member Oliva and seconded by Member Jacobus to approve the application of 12 Days of Giving Film Incentive. Motion carried 6-0. REVIEW FUND BALANCE Moved by Member Jacobus and seconded by Member Vobejda to receive fund balance. Motion carried 6-0. ADJOURNMENT Moved by Member Jacobus and seconded by Member Landholm to adjourn at 5:20 p.m. Motion carried 6-0. 1  Local Option Development Plan Loan Fund or Economic Enhancement Fund The purpose of the Local Option Development Plan Loan and Economic Enhancement Fund is to encourage population growth, new industries, and investment in the community. Funds are offered to businesses in the form of low or 0% interest loans and performance-based forgivable loans (grants), based upon creation of new jobs and investment in Fremont. Businesses must provide matching funds for the project. Potential City uses include land improvements; public infrastructure; building acquisition and improvements; retail industry; service industry; service industry; other new industry; equipment, working capital, job training and buy- down leases for Primary Industry; equipment, job training, buy-down leases, land improvements, building acquisition and improvements and infrastructure for Non-primary Industry; and other economic development activities allowed by statue. Eligible activities under the Economic Development Plan may include the following to attract new and existing business and industry development in Fremont. Land purchase/options Infrastructure to new or existing business and industry Site improvements Construction for new or existing business or industry or on a speculative basis The matrix for the two programs include: Interest Rate Qualification Criteria: Jobs Compensation Interest Rate > $12.00/hour and benefits 0% > $ 8.00/hour and benefits 2% < $ 8.50/hour and benefits 4% No benefits offered 6% Benefits” = 50% of the cost of health insurance paid by the employer Investment City Participation Interest Rate <10% 0% 10% - 19.99% 2% 20% - 29% 4% 30% + 6% Sales Tax Based on the initial years taxable sales. Taxable Sales Interest Rate >$999,999 0% $500,000 - $999,999 2% $250,000 - $499,999 4% $50,000 - $249,999 6% Revised May 2014  Page 2 Businesses will be given the benefit of the category under which they meet the requirements for the lowest interest rate. Based on staff discretion, up to a 2% reduction will be provided if multiple categories are met. The interest rate will never be less than 0%. Loans will be structured as at-risk or performance based forgiveness. To qualify for a performance based forgiveness loan, the applicant must: Pay employees at 125% of the Dodge County average wage; and Have taxable investment greater than $2.5 million dollars, or Have taxable sales greater than $2.5 million dollars. NOTE: Based on special circumstances, staff can make recommendations to the City council outside of these parameters. To be considered for financial assistance, applicants must provide a completed application, including all applicable attachments. Return competed application to City of Fremont Attn: Lottie Mitchell 400 E. Military Fremont, NE 68025  Page 3 CITY OF FREMONT, NEBRASKA REQUEST FOR ASSISTANCE AGREEMENT THIS REQUEST, is made on this 12 ____ day of June __________, 17 20____, by Tim Norris , of Legacy Post & Beam and Cross Cut __________________________________________ Holdings _________________________________________________________ (hereinafter referred to as the (“Applicant”) to the City of Fremont, Nebraska (hereinafter referred to as the “City”). WITNESSETH: WHEREAS, APPLICANT has requested the CITY to investigate the feasibility of obtaining an Local Option Development Plan Loan or Economic Enhancement Loan in connection with the financing of a project to be undertaken by Applicant. NOW, THEREFORE, in consideration of the request the following may be done: 1. City agrees to work with the Applicant to investigate the feasibility of obtaining financing through a Local Option Development Plan Loan or Economic Enhancement Loan for the Project. City will investigate the financial condition of Applicant and determine whether or not a Local Option Development Plan Loan Application or Economic Enhancement Loan Application is appropriate. City will submit the needed paperwork for a Local Option Development Plan Loan or Economic Enhancement Loan for the Applicant to the appropriate committees and City Council, if: a. Applicant is within the eligibility criteria and the Project is likely to be approved by the City Council for an Local Option Development Plan Loan or Economic Enhancement Loan, and; b. All other elements of the Project can be financed and /or paid for through the infusion of equity capital by the Applicant. 2. If the City determines, in its sole discretion, that the Applicant is eligible for a Local Option Development Plan Loan or Economic Enhancement Loan, then, and in such event, City will advise and consult with the Applicant in the preparation by the Applicant for a complete set of Loan documents together with supporting exhibits, for the purpose of making applications for an Local Option Development Plan Loan or Economic Enhancement Loan (hereinafter referred to as the “Loan Package”). The Loan Package shall be for the sole benefit of the Applicant provided however, that such Loan Package shall be used by the City in connection with the Application for a City Loan on behalf of the Applicant, provided, however, that the Loan Package may be used by the Applicant in seeking financial assistance or guarantees from other governmental agencies and/or private lenders. 3. Applicant hereby acknowledges that the Applicant is charged with the actual responsibility of preparing the Loan Package, and that the City’s sole responsibility in connection with the preparation of the Loan Package shall be to consult with and advise the Applicant. The Applicant further acknowledges that the Applicant will be required to promptly and accurately supply financial information concerning the Project, the operation of Project, together with the manner, method and terms of financing the Project. Applicant further specifically acknowledges and agrees that the obtaining of a Local Option Development Plan Loan or Economic Enhancement Loan, or any other financing is dependent upon many factors that the City cannot control, including but not limited to economic factors and the decisions of the City Council, accordingly, the City does not guarantee that the Applicant will obtain financing for the Project. Applicant hereby covenants and agrees that City shall not be responsible, in any manner, or liable to the Applicant or any other person in the event that the Applicant is unable to obtain a Local Option  Page 4 Development Plan Loan or Economic Enhancement Loan for the Project, or any other type of financing for the Project, whether from the City or any other governmental or public source, or from any private financing sources. Applicant also further covenants and agrees that the City shall not be liable for any of the debts or obligations incurred in and for the assistance of benefit of the Applicant. Applicant further agrees that Applicant will hold the City harmless, and pay all costs and expenses, including attorney’s fees, in the event that any claim is made or lawsuit is filed by or against the City arising out of any transaction with or assistance to the Applicant which may in any way be connected with the Agreement. IN WITNESS WHEREOF, the parties hereto have executed, caused to be duly executed this Agreement, and have affixed or caused to be duly affixed hereto there seals, this ________ 12 day of _____________, 20____. June 17 APPLICANT BY:___________________________________ Tim Norris  Page 5 Economic Enhancement Fund and Local Option Economic Development Loan Fund Application (Application is an Official Public Document) PART I. A. Business (Borrower) Information: Name of Business to Receive Assistance: Legacy Post & Beam, Inc and Cross Cut Holdings, LLC _____________________________________________________________ Address: 32554 477th Ave _______________________________________________________________________________________ Elk Point SD _______________________________________________________________________________________________ City State Zip Contact Person: Tim Norris ___________________Telephone No. 402 665-8310 (___)__________________ FAX No. ( 402 ) _______________ Business Classification (mark one): x ____ Manufacturing _____ Warehousing and Distribution x ____ Service _____ Research and Development x ____ Administrative Management Headquarters 46-3451422 Federal ID #: ____________________________ Business Organization (mark one): ____Proprietorship X ____Corporation ____Partnership _____Other Does the Company have a Parent or Subsidiaries? _____ Yes X _____ No If Yes, Identify Name: Address: PO Box 970, 32554 477th Ave Elk Point SD City State Zip X Business Type: ____Start-up (0-5 yrs old) ____Buyout ___Existing If existing, years in Business_____ Ownership Identification: List all officers, directors, partners, owner, co-owners and all stockholders with 20% or more of the stock. Name Title Ownership % Tim Norris Partner 25% Heather Norris Partner 25% Brian Wiese Partner 25% Amanda Wiese Partner 25% Employment Information Personnel: (Full-Time-Equivalent, FTE is based upon 2,080 hours per year.) Existing Number of Full-Time Equivalent Positions: 8.5 Full-Time-Equivalent Positions to be Created within 12 ____ months of Application Approval: 12.5 (4 new to the company, 12.5 new to Nebraska) If Jobs Would Be Lost Without Loan Approval, Total Number of Full-Time-Equivalent Jobs Retained: 0 in Nebraska What is the Average Wage for Employees? $22.78/Hour  Page 6 Please describe all benefits which the business provides to employees: Health Insurance- As much as 50% of the monthly insurance premium is covered by Legacy Post & Beam. Percentages vary based on plan selected. ________________________________________________________________________________________________________ Paid Holidays - Employees receive seven paid holidays each year. ________________________________________________________________________________________________________ Paid Time Off - Employees receive 10 paid time off days per year. Time off is accrued on a monthly basis but can be taken at any time. ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ B. Project Information USES OF FUNDS: Total Project Cost Loan Funds Requested Total Funds Land Acquisition $140,010 __________________ ____________________ _______________ Building Acquisition $0 __________________ ____________________ _______________ Renovation $0 __________________ ____________________ _______________ New Facility Construction $450,000 __________________ ____________________ _______________ Acquisition of Machinery/Equipment $68,000 __________________ ____________________ _______________ Acquisition of Furniture/Fixtures $0 __________________ ____________________ _______________ Working Capital (Includes Inventory) $100,000 __________________ ____________________ _______________ Other (Specify) (relocation) $12,000 ___________________ ____________________ _______________ Total: $770,000 ___________________ 60,000 ____________________ _______________ Project Schedule: Land Purchase - Finalized Summer of 2017 ________________________________________________________________________________________________________ Groundbreaking/Construction - Summer/Fall 2017 ________________________________________________________________________________________________________ First Day of Operations - Fall 2017 ________________________________________________________________________________________________________ Hiring Plan - Fall 2017 - 8 new employees to Nebraska (current team), Spring 2018 - 4 additional employees ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ C. SOURCES OF FUNDS: Note: Public sources of financing require the participation of a Bank and/or an injection of equity (non-debt) funds. Participating Lender Information: Name of Lending Institution: First National Bank - Fremont Address: PO Box 970, 32554 477th Ave Contact Person: Matt Mueller (____) 721-1050 Phone 402 Loan Amount: $ 500,000 Loan Term: (Yrs) 20 Interest Rate: 4 % x _____Variable _____Fixed Collateral Required: 20% Down Equity Required: Building Equity Information: Amount available from business or owners for investment: $ 160,000 Source of owner’s equity into project: Cash Reserves  Page 7 Project Location: x Within the City Limits of (Fremont) Outside of City Limits but within the Zoning Jurisdiction of (Fremont) Unincorporated Area (Dodge County) Personal Financial Statement: Complete the Attached Personal Financial Statement Form for Each Person Owning 20% or More of the Business. D. ATTACH THE FOLLOWING: (Items 4-8 shall be considered confidential) (1) Brief description of the business’ Legacy Post & Beam is the premier provider of pre-built post and beam structure kits. A member of Fremont’s targeted industry history._____________________________________________________________________________________ of wood, metal, and plastic manufacturing, we pride ourselves on offering industry-leading customer service, the highest quality materials, ____________________________________________________________________________________________ and customized designs that meet each customer’s exact specifications. Our services include project management, CAD design, customization ____________________________________________________________________________________________ of post and beam kits, manufacturing, and operations. We only use mills that follow responsible timber harvesting practices and build with only ____________________________________________________________________________________________ natural wood materials. Legacy Post & Beam was founded in 2013 and is currently located in Elk Point, SD. ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ (2) Brief description of the proposed project. Has any part of this project been started? X _____ Yes _____ No Legacy Post & Beam is currently renting 7,200 square feet of space in Elk Point, SD. With an exciting opportunity to expand our client base ____________________________________________________________________________________________ and service offerings, we also need to find a new location that will grow with us and help us continue to deliver the exceptional product and customer ____________________________________________________________________________________________ service that our clients have come to expect. We are currently considering two options: staying in Elk Point, SD or relocating to Fremont, NE. There are a lot of ____________________________________________________________________________________________ advantages to relocating to Fremont, NE, but whatever route we choose, it must make short- and long-term financial sense. A successful ____________________________________________________________________________________________ LB 840 application and award would certainly impact the business case for relocating to Fremont, as the South Dakota option is ____________________________________________________________________________________________ stronger in terms of cost of land, cost of labor, and taxes. ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ (3) Description of Impact of Project on Applicant and Community: ________________________________________ See Attached ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ (4)____ X 3-Year historical balance sheets and operating statements. Current statements less than 90 days old. (Existing Businesses Only). Provide the following and reconcile to current balance sheet: X ____ Aging of Accounts Payable and Accounts Receivable. X ____ List of current obligations. (5) X Personal Financial Statement and resumes for each person owning 20% or more of the business. (6) X Credit Report from Credit Reporting Agency. Contact your bank for information. (7) X Monthly cash flow analysis for the next 12 months and for new businesses, 3 months beyond the breakeven point. (8) X Indemnification Agreement Once all documents have been received, the City of Fremont staff will review the application to determine if it meets the Local Option Economic Development Plan Fund or Economic Enhancement Loan Fund eligibility requirements. If eligible, a meeting will be scheduled with you. The above information is accurate to the best of my knowledge and belief. The above information is provided to help you evaluate the feasibility of obtaining public financial assistance. I understand that pages 1-3 of this application are public information and are subject to public disclosure during the application process. Dated: 6/12/17 Signature:  Page 8 REQUEST FOR PROTECTED RECORD STATUS (Business Confidentiality Claim) Name and Address of business and representative making this confidentiality claim (please print or type): Legacy Post & Beam, Inc, PO Box 970, 32554 477th Ave Elk Point, SD 57025 _____________________________________________________________________________________________________________ I request the attached/enclosed information (record) provided to the City of Fremont or any of its agencies (divisions or programs), be considered confidential and given protected status. Description (optional) of the information (record) which is to be covered by this confidentiality claim and which you believe qualifies for protected status ____________________________________________________________________________________________________ _________________________________________________________________________________________________________________ _________________________________________________________________________________________________________________ _________________________________________________________________________________________________________________ The following reasons support this claim of business confidentiality. Please check all of the following which apply: X (______) 1. The record provided is a trade secret. X (______) 2. The record is commercial or non-individual financial information and disclosure of the information could reasonably be expected to result in unfair competitive injury to the provider of the information. (______) 3. The record is commercial or non-individual information and disclosure of the information could reasonably be expected to impair the ability of the City of Fremont, or its agencies, to obtain necessary information in the future. X (______) 4. The record is commercial or non-individual financial information and the interest of the provider in prohibiting access to the information is greater than the interest of the public in obtaining access. (______) 5. The information would reveal negotiations regarding assistance or incentives offered by or requested from the City of Fremont for the purpose of encouraging a person to expand or locate a business in Fremont, but only if disclosure would result in actual economic harm to the person or place the City of Fremont at a competitive disadvantage. NOTICE: Records evidencing a final contract may not be classified protected under this section. Statement (a concise written statement supporting a business confidentiality claim is required, use reverse side of this sheet or attach additional sheets if necessary. NOTE: Claimant shall be notified if a record claimed to be protected is classified public or if the determination is made that the record should be disclosed because the interest favoring access outweigh the interest favoring restriction of access. Records claimed to be protected under this business confidentiality claim will be reviewed by the City Attorney for the City of Fremont for final determination. The City attorney will notify applicant if any documents would be deemed public records. Tim Norris By___________________________________________________________________Date June 12, 2017 ___________________________