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Gardiner Economic Development Committee
Gardiner City Hall Council Chambers
Tuesday, February 11th, 2003, 8:00 a.m.
Minutes
Attending: Randy Clark, Rebecca Colwell, Norman Gardner, Norman Gosline, Kim Greenleaf, Andrew MacLean, Glenna Nowell, Patricia Rideout, Geri Robbins-Doyle, Norman Temple, Francis Grey, Chris Paszyc
1) Approval of Minutes from Previous Meeting
The minutes were accepted as rendered.
2) Loan Applications
a) Kennebec Brewing Company
Kennebec Brewing would add $42,000 worth of equipment to the $50,000 worth of equipment they already have, making $92,000 worth. Chris said he's not buying, he's leasing. Patricia said it might be better for him to buy some good second-hand equipment than to lease. Area Leasing has agreed to invest $25,000 in the building for renovation for this project. Norman Gosline asked if the applicant owns a home that could be used for collateral. He doesn't, but his father does. We have looked through our records for similar companies, and his projection for gross sales is reasonable. Kim said she is amazed at how many people from out of state are his clients. Chris said he is listed through the Maine Brewer's Guild, so he benefits from their marketing efforts. The parking area offers a certain amount of privacy. Patricia said sometimes there's a difference between having great ideas versus having management skills, such as using an automated payroll system. Chris said that Lever
recognizes that he needs to bring in outside help for some functions. The fact that he has an accountant is a good thing. Randy said he has a B.S. degree in Business Management. Patricia said a new restaurant would do a lot for the community. Too few are available currently. "The Depot" is an example of a place that serves a definite niche. This place would be more like a "Gritty McDuff's." The Brewer's Guild provides an excellent network for marketing. Andy said if they get a new sign, it would help their marketing effort a lot.
Becky motioned, and Randy seconded, to recommend the loan at $60,000. Patricia moved, and Andy seconded, to approve the loan for $75,000, with a 25% limited guarantee on a home, for Kennebec Brewing to acquire the assets needed to start its new business. Andy said he has enough personal property to offer as collateral, but that doesn't have as much value as real estate. With a guarantee, both him and his father would put their names on the note as well as that of the corporation. Norman Gosline said that he has gone as far as he can with his business without an investment being made. He needs this loan. On the other hand, we need more than equipment that's worth 25¢ on the dollar as collateral. Patricia said, we have not had many losses on our loans. We've been extremely lucky. Making loans to new business ventures is risky, but it's why we are here. We can find lots of reasons not to do it if we want to. Kim said, does he understand the risks involved? Restaurants have
a high failure rate. Patricia moved, Andy seconded, to amend the previous motion to include: "In addition to require a secured guarantee to be negotiated but no less than 25%." The members present voted unanimously to approve the motion as amended.
b) Black Diamond Consultants
Chris said this firm is located in the basement of the Knights of Columbus Hall now. Their main client is Maine Yankee. They have ten engineers working for them now. They want to establish a more visible professional presence. Their plan is to locate at 312 Water Street, the former site of Mystical Wind & Water and Bull's Motorcycle shop. Patricia asked why their revenue increased so substantially in one year. Chris said that that was when they started getting a lot more work from Maine Yankee. They plan to offer home design services in a retail-accessible space. Randy said, if five young engineer types are willing to put their names on the line and fix up one of our tacky old buildings, we should do everything we can to help. We would require
personal guarantees from all of them. Randy moved, Becky seconded, to approve the loan application as presented. The members present voted unanimously to approve the motion.
3) Tax Increment Financing Request
Chris said that we now have options with two competing bidders to develop an 18,000 square foot office building for the State at Libby Hill. One is from Bangor, and the other is from Houlton. They are both very qualified developers. If either one of them gets the bid, we will execute their option. If they don't get it, then the option goes away. They can't do something else with their lot. We want to do everything we can to help make them competitive so they can win the bid. A TIF will help them reduce their lease rate. Property taxes do play a role in determining their per-square-foot cost. We've done a TIF for every other building in the business park. This is not the project we want to put the "strangle-hold" on. We first looked at downtown
as a location, but we don't have 18,000 contiguous feet in the downtown. Patricia said, if we make the recommendation and the Council approves it, in ten years we will have a fully taxed building. Chris said we agreed on one option to sell for slightly less than our full asking price because the developer first wanted a cheaper lot actively being considered for another use. He said, "I just lost $30,000 because you have a verbal agreement with someone else." So we dropped our price by 4%. These two developers wanted mutually exclusive options. They are paying 1% per month non-refundable "earnest money" to offset our opportunity cost. The members present voted unanimously to approve the recommendation.
4) Regular Review of RLF Accounts
All accounts were current.
5) Other Business—There was none.
6) Economic Development Director’s Report
Chris said that after some pretty heavy negotiations, lots 8 and 9 at Libby Hill will be placed under contract with Pine State. We have an option to re-purchase if they decide not to build. They now have an April start date to commence construction. There have also been rumors about the Eagles club developing a facility in the area. Kevin Mattson has proposed a 20,000 square foot banquet and conference facility. The Eagles club would have been part of it, but the membership voted it down. Maple Hill Farm wants to build a banquet and conference center. They have been looking at the Winery Building. Purbeck Isle is going to be building new and moving. We expect to hear about the pending downtown grant any day. We just submitted our housing grant application for the "Northwest Quadrant." The Waterfront Task Force has met, and work on the waterfront will be getting under way soon.
7) Schedule Next Meeting—March 11, 2003.
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