Local Development Finance Authority

CITY OF STERLING HEIGHTS Regular Meeting of the LOCAL DEVELOPMENT FINANCE AUTHORITY 6633 18 Mile Road, Sterling Heights 586-884-9322 VELOCITY BUILDING April 18, 2023 8:00 AM MEETING CALLED TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL APPROVAL OF AGENDA CONSENT AGENDA A. March 21, 2023 Regular Meeting Minutes B. To accept the proposal by Office Express (1280 E. Big Beaver Road, Troy, MI 48083) for the remodel of Velocity in the amount of $89,218.59 – Glass Breakout Space, Conference Room, Conference Space – Furniture, Painting, Flooring, Wallcovering C. To accept the proposal by Mando Construction (75 Lafayette Street, Suite 100, Mt. Clemens, MI 48043) in the amount of $10,113.60 – extensive drywall repair, remove/replace ceiling tiles NEW BUSINESS 1. Introduction of Brian Evans, Business Development Manager for ADS, Inc. 2. To Consider Approval of the Consulting Agreement between the City of Sterling Heights Local Development Finance Authority and ReGroup Advisors, Inc. Total Compensation shall not exceed $260,000.00 3. To Consider Approval of the Consulting Agreement between the City of Sterling Heights Local Development Finance Authority and Down’s Diversity Initiatives, LLC, a community and economic development consultancy specializing in program design and facilitation focused on real estate, entrepreneurship, and workforce development.  4. Update – April Boyle OLD BUSINESS PUBLIC COMMENT ADJOURNMENT  CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY Draft MINUTES OF THE REGULAR MEETING MARCH 21, 2023 – 8:00 a.m. 6633 18 Mile Road, Sterling Heights, MI 48314 586-884-9322 Velocity Building Phil Hunsberger called the meeting to order at 8:08 a.m. Pledge of Allegiance Members present at roll call: Josephine Attisha, Dr, Michael Balsamo, Phil Hunsberger, Vickie Malinowski, Dominic Patrus, Amy Rencher, Vicky Rowinski, Jeanne Schabath-Lewis, Howard Sizemore, Jill Tomyn Members absent: Ellanore Evans, Bill Holbrook, Josh Hundt, Laurel Johnson, John Lettang, Steve Pomaville Also in attendance: Kathryn Quell, Management Services Specialist – City of Sterling Heights; Jason Castor, City Development Director – City of Sterling Heights; April Boyle, Senior Advisor for Entrepreneurship and Innovation; Jake Parcell, Planning – City of Sterling Heights; Paula MacPherson, Community Engagement Manager - Velocity Motion to Approve the Agenda Moved by Schabath-Lewis, supported by Patrus, to approve the agenda as presented. Ayes: All Nays: None Motion carried. Motion to Approve the CONSENT AGENDA as presented Moved by Patrus, supported by Schabath-Lewis, to approve the Consent Agenda as presented. A. To approve the minutes of the Regular Meeting of February 21, 2023. Ayes: All Nays: None Motion carried. New Business To Approve the 2023/2024 Budget Proposal for the Local Development Finance Authority (LDFA). Ms. Quell presented the proposed 2023/2024 Budget, with supporting documentation, and explained each line item in detail for the Local Development Finance Authority. This proposal will be presented and approved by City Council and then presented to the LDFA in June for adoption. Moved by Attisha, supported by Patrus to approve the 2023/2024 Budget Proposal for the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried. To Consider Approval of the Lease Agreement between Atlantic Diving Supply, Inc. and the Local Development Finance Authority (LDFA). Ms. Quell presented a month-to-month Lease Agreement between Atlantic Diving Supply, Inc. and the Local Development Finance Authority (LDFA) for space #2-C, consisting of 593 square feet, at a rate of $890.00/month. Ms. Quell stated that Atlantic Diving Supply, Inc. is globally recognized for supplying military equipment, army procurement, logistics and supply chain solutions for federal agencies and protective services. Moved by Patrus, supported by Attisha to approve the Lease Agreement between Atlantic Diving Supply, Inc. and the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried. To Consider Approval of the Lease Agreement between ReGroup Advisors, Inc. and the Local Development Finance Authority (LDFA). Ms. Quell presented a month-to-month Lease Agreement between ReGroup Advisors, Inc. and the Local Development Finance Authority (LDFA) for space #2-B, consisting of 633 square feet, at a rate of $897.00/month. Ms. Quell stated that ReGroup Advisors, Inc. offers professional services with focus on all three phases of a business – start up, business growth, and exit strategy through a senior executive leadership team. Moved by Schabath-Lewis, supported by Patrus to approve the Lease Agreement between ReGroup Advisors, Inc. and the Local Development Finance Authority (LDFA). To Consider the Proposal for Velocity Signage Upgrades between the City of Sterling Heights Local Development Authority and Banner Sign Company, in the amount of $11,055.00. Ms. Quell presented the quote from Banner Sign Company to repurpose the old signage at Velocity and create new inserts for each of the tenants and common areas of the building. Ms. Quell stated that if there are changes to tenancy, the inserts can be easily changed to reflect the new tenant. Ms. Quell stated that the quote is also for signage in common areas, as well as a logo film on two areas of glass walls. Moved by Balsamo, supported by Rowinski to approve the Proposal for Velocity Signage Upgrades between the City of Sterling Heights Local Development Finance Authority and Banner Sign Company – 6538 Russell Street, Detroit, MI 48211, in the amount of $11,055.00. Update – April Boyle, Senior Advisor for Entrepreneurship and Innovation Ms. Boyle provided information in regards to recent events and activity since the last LDFA meeting in February. Ms. Boyle introduced Paula Macpherson, Community Manager for Velocity. Ms. Macpherson introduced herself to the LDFA Board and shared her excitement to be a part of the team at Velocity. Old Business Public Comment None Adjournment Moved by Patrus, supported by Attisha to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 8:40am  Business of the Local Development Finance Authority Sterling Heights, Michigan AGENDA STATEMENT Item Title: Consider the Consulting Agreement between the City of Sterling Heights Local Development Finance Authority and ReGroup Advisors, Inc. ReGroup Advisors will provide business analysis and consulting services to The City of Sterling Heights – Local Development Finance Authority, 6633 18 ½ Mile Road, Sterling Heights, MI 48314. Submitted By: Office of Economic Development Contact Person/Telephone: April Boyle, Senior Entrepreneurship and Innovation Advisor Administration (initial as applicable) Attachments City Clerk x Resolution Minute s Finance & Budget Director Ordinance Plan/ Map City Attorney (as to legal form) x Contract x Other City Manager □ Check box if this agenda item requires billing/revenue collection (fees, etc.) by Treasury Office Executive Summary: The overall mission of the Sterling Heights SmartZone and all related services, programs, and events conductedtherein, is to promote the incubation of early stage companies and related local job creation primarily among technology-based entrepreneurial and newly formed companies, and the Authority’s desire to expand the tax base within the geographic boundaries of the Authority District. In furtherance of these missions, experienced leadership is sought to operate an entrepreneurial and incubation services program for the purposes of commercializing technology and fostering the primary growth of new, technology-based businesses within the City, and the surrounding Macomb County community. ReGroup Advisors, inc. will work with Velocity Center to identify a qualified pipeline of companies to enter into the White-boxed /Velocity branded Accelerator program as outlined below with the goal of getting a product launched and to market within 120 days.  Pre-Stage – Development of Business Applicant Pipeline - Included in fees below ReGroup will recruit potential candidates to Velocity using several strategies. Candidatedevelopment includes: • Alignment with the current economic development initiatives, including hosting various seminars, informative podcasts, speaking engagements, and establishingan entrepreneurial introduction class. • Leads from our team's referral sources, including accounting offices, banking relationships, other business owners, peer-to-peer group relationships, privateequity, law firms, and national B2B platforms. • Direct marketing via social media on selected forums frequented by prospectiveentrepreneurs • Leveraging team LinkedIn presence using lead generation software • Integrating into the various college and university business programs • Community engagement – B2B communication plan to existing businesses Stage 1 – Entry into Velocity Program $3000 per company ReGroup Advisors' approach to successfully identifying business concept viability and longevity begins with our CollabortaoryInk program, a facilitated assessment of the proposed concept and strategy. This approach provides both seasoned and new entrepreneurs the opportunity to discuss in a confidential session their vision and designwith a customized team of entrepreneurial experts from multiple disciplines. Our CollabortaoryInk process provides: The visionary approach - assists business owners in tackling complex business proposals to successfully evaluate viability and sustainability before the launch of a model.All of our team members have direct experience in identifying, creating, and successfully launching their own business, in addition to working with other entrepreneurs to achieve the same results. Our process begins with: • Evaluation of the proposed business concept – viability, fundingpotential, sustainability, and investor risk mitigation • Ownership and support team skills assessment • Launch window requirement • Business strategy development • Business structure design/gap assessment • Management structure/governance design and implementation • Profit and operating process development and implementation • Dashboard/KPI and performance/success metric design andimplementation Outcome focus - participants receive a consolidated assessment of their concept, strategy, funding ability, success potential, talent evaluation, and recommendations from the session for continued development of the idea to reduce the risk of failure before launch. If deemed viable, the following steps are to begin moving their concept to market.Acceptable models would be entered into the Velocity program and continue to receive support to achieve success. Stage 2 – Velocity 120-Day Launch to Market $26,000 per company All applicants completing the Stage 1 process will begin their 120-day launch windowwithin the Sterling Heights Velocity program. Upon entry into the formal program, our team will begin assisting the entrepreneur in executing those items identified during the Stage 1 process, including consultative and direct hands-on-assistance in developing and implementing the traditional core businessfunctions such as: Standard Deliverables • Overall business strategy documents with milestone and performance metrics  • Financial plan and statement base format • Sales/marketing – strategy • Market research – targeted B2B or B2C • Legal: contracts, leases, business agreements, and organizational structure • Investor financial proposals • Operational processes, business procedures, and policy manuals • Human Resources – employment agreements, payroll processing, HR Manual • Technology platform – managed services, phones, remote work platforms Entrepreneurial / Talent Education and Skill Development All successful entrepreneurs need to invest in "lifelong learning" programs to meet their goals and objectives. Our program and mentoring initiative will provide new entrepreneurs with real-time guidance to address business and personal transformation from their prior business environment to the new entrepreneurial model. Our team members have all made that transition, including working inside family- owned companies,dealing with partners, and operating within corporate ownership. For seasoned entrepreneurs, our team's diversified skill set provides the entrepreneur with access to new approaches and updated knowledge across several core business knowledge categories. A limited sampling of our core educational programs include: 1. Accountability & responsibility as an entrepreneur 2. Effective personality-based communications 3. Dealing with change – how to implement and manage staff through the process 4. Time management skills 5. Process documentation and flowcharting 6. Decision tools – designed to assist in identifying issues, potential solutions, pitfalls,and implementation stages 7. Dealing with outsourced functions as an entrepreneur 8. General financial skills – management reporting, performance metric, anddashboards 9. How to present to traditional banking and private equity groups Suggested Action: Resolved to approve the contract with Regroup Advisors, Inc. for a Pilot of up to 5 companies entry into the ReGroup Inc. / Velocity Accelerator program authorize the LDFAChairperson to sign all required documents on behalf of the City. Motion to approve Total contract amount: $260,000 annual MOVED BY: SECONDED BY: RESOLVED,  March 31, 2023 Client: The City of Sterling Heights – Local Development Finance Authority 6633 18 1/2 Mile Road, Sterling Heights, MI 48314. Re: Business evaluation and launch program (Velocity Accelerator) This letter will confirm the terms of our representation. Our work will begin upon receipt of a signed copy of this letter. ReGroup Advisors (The FIRM) will provide analysis services to The City of Sterling Heights – Local Development Finance Authority, 6633 18 1/2 Mile Road, Sterling Heights, MI 48314. (CLIENT) and the scope of services we will render, the manner of calculating, billing and collecting legal fees, and other aspects of the proposed representation are mutually agreed to be as follows: Services to be Provided: The FIRM has been engaged to provide the following services: See attached business evaluation and launch program model Fees and Expenses Fees: Stage 1. Entry into Velocity Program evaluation will be conducted at a rate of $3,000.00 per accepted Step 1 Program participant. The fee will be paid at the end of each evaluation and delivery of the final findings regardless of the business entering Stage 2. Stage 2. Velocity 120-day launch to market will be conducted at a rate of $23,000.00 increments for a 120-day launch window. The fee will be billed monthly in four equal increments. Should the launch window be extended, the fees will be billed in equal increments as defined by the new launch window. For example, if the launch requires a window of 150-days, the fee will be billed in five equal increments totaling $23,000.00. If there is a change of status in the business and they are unable to complete the process in full, the fee will be billed through the date of termination of the business relationship with Velocity. Total compensation to THE FIRM for the accepted participants shall not exceed $260,000.00. THE FIRM is also entitled to compensation rate of $3,000.00 per participant who is approved for Stage 1 participation but who does not move to Stage 2. Additional programs and services will be quoted separately based on scope definition. No compensation for additional programs and services shall be due from CLIENT without the prior written approval of the Board of CLIENT.  Expenses: We may incur various expenses in providing services. You agree to pay all such expenses and to reimburse us for all out-of-pocket expenses that we pay on your behalf. All expenses require prior approval from the client. Whenever possible, we will forward bills for any approved expenses incurred on your behalf directly to you and you agree to make prompt payment directly to the originator of these bills. CLIENT Cooperation You authorize THE FIRM to accept instructions from your representative for this engagement. You agree to provide us the information that we request in a timely manner and to disclose any irregularities that could material impact the organizational model development. The CLIENT representative is Sterling Heights, LDFA, which may be changed by the CLIENT upon written notification to THE FIRM. Documentation We will send you copies of documents and correspondence and other information throughout the matter. These copies will be your file copies. We will also keep the information in a file at our office. The file in our office will be our file. Please bring your file to all of our meetings so that we both have all of the necessary information available to us. Once we have completed the work necessary to conclude this matter, we will close our file and return any original documents to you. We will then store the file for approximately 1 year. We will destroy the file after that period of time unless you instruct us in writing now to keep it longer. Your Right to Terminate Representation You may terminate this representation at any time with or without cause by notifying us in writing of your desire to do so. Upon receipt of the notice to terminate representation, we will stop all work satisfactorily performed on your behalf immediately. You will be responsible for paying all fees and expenses incurred on your behalf in this matter before the date of written notice of termination was received by THE FIRM. Our Right to Terminate Representation We may terminate our representation (to the extent permitted by the ethical and court rules) at any time if you breach any material term of this agreement or fail to cooperate or follow our advice on a material matter, if conflict of interest develops or is discovered, or if there exists at any time any fact or circumstance that would, in our opinion, render our continuing representation unlawful, unethical, or otherwise inappropriate. 24901 Northwestern Highway, Suite 609, Southfield, Michigan, 48075 Phone: 888.248.7077 / Fax: 877.445.2073 Email: info@regroupadvisors.com Web: www.regroupadvisors.com  If we elect to terminate our representation, you will take all steps reasonably necessary and will cooperate as reasonably required to free us of any further obligation to perform services satisfactorily, including the execution of any documents necessary to complete our withdrawal from representation. In such case, you agree to pay for all services performed and approved expenses incurred before the termination of our representation in accordance with the provision of this agreement. THE FIRM shall conscientiously and diligently perform the services set forth in the attached proposal. If any of the terms stated in this letter is not consistent with your understanding of our agreement, please contact me before signing the agreement. Otherwise, please sign the agreement and email back to mkaszubski@regroupadvisors.com. Please bring the original to our next meeting. On behalf of ReGroup Advisors, we appreciate the opportunity to assist you in this matter. If you have questions, please feel free to call us at 888.248.7077 or my cell 248.894.0454. Very truly yours, Michael A. Kaszubski, CFE Managing Partner CLIENT ACCEPTANCE OF ENGAGEMENT LETTER TERMS AND CONDITIONS Engagement Letter Dated March 31, 2023 Velocity Accelerator Program City of Sterling Heights – Local Development Financial Authority LDFA consent to the terms contained in this document. Phillip Hunsberger, Chairperson, LDFA [Date] 24901 Northwestern Highway, Suite 609, Southfield, Michigan, 48075 Phone: 888.248.7077 / Fax: 877.445.2073 Email: info@regroupadvisors.com Web: www.regroupadvisors.com  Business of the Local Development Finance Meeting: 4/18/23 Authority Sterling Heights, Michigan AGENDA STATEMENT Item Title: Consider the Consulting Agreement between the City of Sterling Heights Local Development Finance Authority and Down's Diversity Initiatives LLC, a community and economic development consultancy specializing in program design and facilitation focused on real estate, entrepreneurship, and workforce development. Submitted By: Office of Economic Development Contact Person/Telephone: April Boyle, Senior Entrepreneurship and Innovation Advisor Administration (initial as applicable) Attachments City Clerk x Resolution Minutes Finance & Budget Director Ordinance Plan/Map City Attorney (as to legal form) x Contract x Other City Manager □ Check box if this agenda item requires billing/revenue collection (fees, etc.) by Treasury Office Executive Summary: The overall mission of the Sterling Heights SmartZone and all related services, programs, and events conducted therein, is to promote the incubation of early stage companies and related local job creation primarily among technology-based entrepreneurial and newly formed companies, and the Authority’s desire to expand the tax base within the geographic boundaries of the Authority District. In furtherance of these missions, experienced leadership is sought to operate an entrepreneurial and incubation services program for the purposes of commercializing technology and fostering the primary growth of new, technology-based businesses within the City, and the surrounding Macomb County community. Velocity Innovation Center’s (VIC) Executive-in-Residence (EIR) program puts Entrepreneurial technical assistance professionals in an executive-level consulting role to serve as resources to founders, start-ups and SMEs in Sterling Heights and Macomb County. The EIRs work part-time on Velocity's team for one year (renewable). They will work with stakeholders across sectors, serve as a mentor and advisor, and activate resources and networks to accelerate launch and scale of new and existing ventures. They will also provide strategy and knowledge sharing within VIC and beyond. The fee for this service is retainer of $4000 per month for 10 hours per week and $125 per hour over 40 hours per month with pre- approval and is budgeted in the contracted services account. Goals of Executive in Residence: • Catalyze culture change. • Provide leadership and growth opportunities for executives.  • Establish cross-sector collaboration and innovation. • Enable EIRs and systems stakeholders to meaningfully engage with the challenges faced by start-ups and SMEs. • Inform and cultivate organizational and personal development through exposure to new perspectives. You: • Have multiple years of experience leading teams in a highly collaborative environment in any field. • Have consultative/program development expertise. • Are excited about the opportunity to drive innovation and social impact as part of a community of VIC consultants. • Honor community wisdom. • Care deeply about mentoring and building relationships. • Can’t wait to use your expertise to create systems wins. • Have experience presenting at the Executive/Board level. Sample Projects/ Key Responsibilities: • Mentor and accountability coach for business founders • Co-create roadmaps and milestones for success • Robust Referral network and tracking system • Ability to see patterns and identify gaps to inform programming Fine Print: • ~80% of EIR time goes to client services • ~20% goes to VIC strategy, thought leadership and knowledge sharing Suggested Action: Resolved to approve the contract with Down's Diversity Initiatives, LLC. for Velocity Innovation Center’s (VIC) Executive-in-Residence (EIR) program authorize the LDFA Chairperson to sign all required documents on behalf of the City. Motion to approve Total contract amount: $48,000 annual MOVED BY: SECONDED BY: RESOLVED,