Local Option Review Team

AGENDA LOCAL OPTION REVIEW TEAM Thursday, February 1, 2018 8:00 a.m. Fremont Municipal Building 400 East Military Avenue Fremont, Nebraska 1. Call to Order 2. Approval of minutes from June 19, 2017 meeting. 3. Review Fund Balance 4. Consider Local Option Economic Development Application for Greater Fremont Development Council. 5. Consider Film Incentive Rebate Program Application for Pathfinder Motion Picture Company. 6. Adjourn. This agenda was posted at the Municipal Building on January 30, 2018 and was distributed to the members of the Local Option Review Team on January 30, 2018. 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 JUNE 19, 2017 – 12:00 P.M. A meeting of the Local Option Review Team was held on June 19, 2017 at 12:00 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 June 15, 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, Horeis present, Vobejda and Jacobus absent. 5 present, 2 absent. Others in attendance included Brian Newton, City Administrator; Jody Sanders, Finance Dir.; Cecilia Harry, Greater Fremont Development Council; Lottie Mitchell, City of Fremont; Tim Norris, Legacy Post and Beam, and Heather Norris, Legacy Post and Beam. APPROVE MINUTES Moved by Member Oliva and seconded by Member Landholm to approve the minutes of the January 26, 2017 meeting. Motion carried 5-0. REVIEW LOCAL OPTION ECONOMIC DEVELOPMENT APPLICATION FOR LEGACY POST AND BEAM Moved by Member George and seconded by Member Oliva to approve the application of Legacy Post and Beam. Motion carried 5-0. REVIEW FUND BALANCE Moved by Member Oliva and seconded by Member Landholm to receive fund balance. Motion carried 5-0. ADJOURNMENT Moved by Member Landholm and seconded by Member George to adjourn at 12:35 p.m. Motion carried 5-0. 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; 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 > $ 18.00/hour and benefits 0% > $ 16.00/hour and benefits 2% < $ 14.00/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: Grant Coordinator 400 E. Military Fremont, NE 68025  Page 3 CITY OF FREMONT, NEBRASKA REQUEST FOR ASSISTANCE AGREEMENT THIS REQUEST, is made on this 26 ____ day of January 18 by Garry Clark, Executive Director __________, 20____, Greater Fremont Development Council , of __________________________________________ _________________________________________________________ (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 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:_____________________________________________________________ Greater Fremont Development Council Address: 1005 E 23rd Street, Suite 2 _______________________________________________________________________________________ _______________________________________________________________________________________________ Fremont NE 68025 City State Zip Contact Person: Garry Clark, Executive ___________________Telephone Dir. (___)__________________ FAX No. (402) _______________ No. 402 753-8126 Business Classification (mark one): ____ Manufacturing _____ Warehousing and Distribution ____ Service _____ Research and Development ____ Administrative Management Headquarters Federal ID #: ____________________________ 23-7402311 Business Organization (mark one): ____Proprietorship ____Corporation ____Partnership _____Other X Does the Company have a Parent or Subsidiaries? _____ Yes NO _____ No If Yes, Identify Name: Address: City State Zip Business Type: ____Start-up (0-5 yrs old) ____Buyout ___Existing X If existing, years in Business_____ 43 Ownership Identification: List all officers, directors, partners, owner, co-owners and all stockholders with 20% or more of the stock. Name Title Ownership % Bill Vobejda President NA Mike Arps VP NA Chris Walz Treasurer NA Employment Information Personnel: (Full-Time-Equivalent, FTE is based upon 2,080 hours per year.) Existing Number of Full-Time Equivalent Positions: 3 Full-Time-Equivalent Positions to be Created within ____ months of Application Approval: If Jobs Would Be Lost Without Loan Approval, Total Number of Full-Time-Equivalent Jobs Retained: What is the Average Wage for Employees?  Page 6 Please describe all benefits which the business provides to employees: ________________________________________________________________________________________________________ NA ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ B. Project Information USES OF FUNDS: Total Project Cost Loan Funds Requested Total Funds Land Acquisition __________________ ____________________ _______________ Building Acquisition __________________ ____________________ _______________ Renovation __________________ ____________________ _______________ New Facility Construction __________________ ____________________ _______________ Acquisition of Machinery/Equipment __________________ ____________________ _______________ Acquisition of Furniture/Fixtures __________________ ____________________ _______________ Working Capital (Includes Inventory) __________________ ____________________ _______________ Other (Specify) ___________________ ____________________ $500,000 _______________ Total: ___________________ ____________________ $500,000 _______________ Project Schedule: ________________________________________________________________________________________________________ See Addendum ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ 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: Address: Contact Person: Phone (____) Loan Amount: $ Loan Term: (Yrs) Interest Rate: % _____Variable _____Fixed Collateral Required: Equity Required: Equity Information: Amount available from business or owners for investment: $ Source of owner’s equity into project:  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) D. ATTACH THE FOLLOWING: (Items 8-13 shall be considered confidential) (1) Brief description of the business’ history. ____________________________________________________________________________________________ See Addendum ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ _____________________________________________________________________________________ (2) Brief description of the proposed project. Has any part of this project been started? _____ Yes _____ No ____________________________________________________________________________________________ See Addendum ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ (3) Description of Impact of Project on Applicant and Community: ________________________________________ ____________________________________________________________________________________________ See Addendum ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ NA ____________________________________________________________________________________________ (4) Have you ever declared bankruptcy? NO______ No NO ______ Yes If yes, Bankruptcy Chapter __________ Case # __________ Date of Deposition/Discharge ___________________________________________ (5) Are there any unsatisfied judgments against you? _______ NO No _______ Yes Amount per month ______________ To Whom _____________________________________________ (6) Have you defaulted on any previous loan? ______ NO No _______ Yes Give details _________________ _____________________________________________________________________________________ _____________________________________________________________________________________ (7) Are you a party to a lawsuit? ______ NO No ______ Yes Give details _____________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ (8)____3-Year NA 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: ____ NA Aging of Accounts Payable and Accounts Receivable. ____ List of current obligations. NA (9) NA Personal Financial Statement and resumes for each person owning 20% or more of the business. (10) NA Credit Report from Credit Reporting Agency. Contact your bank for information. (11) NA Monthly cash flow analysis for the next 12 months and for new businesses, 3 months beyond the breakeven point. (12) NA Indemnification Agreement (13)_____Tax NA Returns for the last two years Addendum.LB840 Application.1.26.18.Greater Fremont Development Council Brief Description of GFDC History Greater Fremont Development Council (GFDC) is a 501(c)6, public-private partnership founded in 1974 with the mission to provide leadership for Greater Fremont Area economic growth initiatives and to aggressively pursue targeted growth opportunities that will result in quality job creation and retention. We market the community to the world to bring new businesses to Greater Fremont, engage existing businesses to help them expand and thrive, and ensure we have a diverse workforce that meets the needs of current and future employers. GFDC delivers services in collaboration with our partners and allies in economic development, including but not limited to: City of Fremont Fremont Department of Utilities Dodge County Board of Supervisors Greater Omaha Economic Development Partnership (GOEDP) Nebraska Department of Economic Development Northeast Nebraska Economic Development District Fremont Area Chamber Our Program of Work encompasses four areas: 1) Business Attraction 2) Business Retention and Expansion 3) Workforce Development and Preparedness 4) Quality of Life Enhancement Description of Proposed Project The Greater Fremont Development Council (GFDC) is proposing an application to the Nebraska Rural Workforce Housing Fund (RWHF) in which a match of 1:1 is required. GFDC is eligible to apply for up to $1,000,000 and has a goal of raising matching funds of that amount. GFDC respectfully requests $500,000 from the Local Option Economic Development fund to be used as a portion of the matching funds for the application to the RWHF. If granted, the RWHF would in turn be used to create a revolving loan fund (RLF) for housing to be used for workforce housing as defined by LB518. As an example, the definition of workforce housing as described in LB518 includes “housing that meets the needs of today’s working families; housing that is attractive to new residents considering relocation to a rural community; owner-occupied housing units that cost not more than two hundred seventy-five thousand dollars to construct or rental housing units that cost not more than two hundred thousand dollars to construct, rehabilitation…and upper-story housing…” Other qualified activities for the RLF as defined by LB518 “include, but are not limited to, purchase and rental guarantees, loan guarantees, loan participations, and other credit enhancements or any other form of assistance designed to reduce the cost of workforce housing related to eligible activities of the nonprofit development organization.” Addendum.LB840 Application.1.26.18.Greater Fremont Development Council Potential Impact on Community Receiving a grant from RWHF has a potential for tremendous impact on our community. Due to existing issues of housing supply/demand as detailed in a recent Dodge County Housing Study completed by Hanna:Keelan Associates, PC of Lincoln, NE, strategies for affordable housing are an urgent need for Fremont. As is the case across many communities, current economic conditions and limited availability of modern housing units is impacting the ability of Fremont to recruit and retain workforce that will ultimately spend their payrolls within our community borders. Having a housing inventory that is competitive to our nearest neighbors, i.e. Elkhorn & Omaha, is essential for growing our economic base through retention of current employers and attracting new employers and their respective workforce. The retail and service establishments of Fremont rely heavily on residential rooftops, existing and future, to sustain and prosper. Both public and private education as well as non-profits within our community will also see an impact as housing units become more plentiful and more affordable. It is absolutely vital to the future of Fremont to bring supply and cost more in line with the surrounding communities in order to stay competitive, grow our economic base and thus provide for the various public services required of a community our size. Through the presence of a RLF, GFDC will be actively engaged with the developers interested in Fremont. Having a representative organization able to react to the needs of prospective developers brings relief to the burden of public government, in particular the burden of staff to guide and solicit the interest of developers. In turn there will be checks and balances in place because applicants will have to stay within the guidelines of the grant. For example, the RLF fund guidelines may have home construction cost guidelines of approximately $200,000 minimum and up to maximum cost of $275,000 in order to be eligible for accessing the fund. Developers and businesses with housing projects will also be tied to State and NIFA requirements. The RLF will likely be administered by Northeast Nebraska Economic Development District and potentially assisted by the Midwest Development Housing Fund (MHDF). As mentioned above, a goal for matching funds has been set at $1,000,000. In an effort to help achieve the Workforce Housing Mandate set by LB518 and the Department of Economic Development, which is on behalf of Governor Pete Ricketts; the Nebraska Investment Finance Authority (NIFA) has agreed to accept applications for matching funds to go toward any RWHF application. NIFA will provide a maximum of $250,000 to applicants who are approved, or 1/3 of their overall local match. GFDC has agreed in principle to receive assistance from both NENEDD and MHDF, to complete both the State RWHF application process and the NIFA match application. The deadline for the RWHF application is March 30, 2018.    Pathfinder  Motion  Picture  Company,  LLC.                 th 4930  Strohm  Ave.           1881  E  16  St.   North  Hollywood,  CA    91601         Fremont,  NE    68025   (310)  995-­‐3909         City  of  Fremont     ATTN:    Lottie  Mitchell   400  E.  Military   Fremont,  NE    68025   Dear  Lottie  Mitchell:   Attached  please  find  my  application  for  the  LB840  Film  Incentive  program  for  my  film  CARRY  ON.    We  are  currently  in  the  financing   stages  of  the  process.    In  order  to  successfully  get  through  this  process  and  secure  the  financing  for  the  film  I  need  to  get  some   financial  information.    This  information  is  shared  with  companies  that  monetize  these  amounts  up  front.    This  is  how  most   independent  films  get  fully  funded.    In  this  case  I  am  looking  to  get  a  number  approved  very  soon  so  that  I  can  share  that  with  a  debt   finance  company  that  specializes  in  monetizing  tax  credits  and  rebates.    They  will  then  front  the  money  based  on  the  estimate  and   thereby  funding  that  portion  of  the  film.      Other  portions  of  the  film  are  financed  through  monetizing  the  foreign  sales  MG   (minimum  guarantee)  and  domestic  distribution  contracts.   I  am  also  requesting  that  this  film  be  approved  for  a  30%  rebate  for  the  estimated  local  spend.    The  overall  budget  of  the  film  is   $2,842,303  and  the  estimated  qualifying  Fremont  spend  is  $1,466,425.      This  will  all  be  injected  into  the  community  in  a  time  frame   of  two  months.    I  am  asking  that  $440,000  or  30%  be  approved  for  the  tax  rebate  for  this  film.   At  this  point  there  is  no  Payroll  Service  or  Insurance  Policy  contracted  or  Completion  Bond  in  place.    This  is  because  of  the  film  being   at  the  current  stage  of  financing.    Once  more  of  the  financing  elements  fall  into  place  these  services  will  be  contracted.   Once  I  receive  a  letter  from  Fremont  that  outlines  what  the  approved  refund  can  be  the  rest  of  the  financing  will  start  to  domino   into  place.    We  hope  to  move  fast  enough  to  secure  financing  by  late  spring  and  start  our  preproduction  in  early  summer  2018.   Sincerely,   Kevin  McMahon   Producer  /  Writer                    4930  Strohm  Ave.  N.  Hollywood,  CA  91601              Phone:  (310)  995-­‐3909       E-­‐Mail:  kevin@pathfindermotionpictureco.com       Web:  WWW.pathfindermotionpictureco.com