Redevelopment Authority Meeting Minutes – December 19, 2017

A meeting of the Redevelopment Authority of the City of Kaukauna was called to order at 9:00 a.m. on Tuesday, December 19, 2017, by Vice Chair VanderWyst.

Members Present: Feldt, Landreman, McGinnis, Natrop, Smith, VanderWyst.

Also Present: Planning Director Jakel, Mayor Rosin, Michelle Johnson of Revive Salon.

Absent and Excused: Haak.

1. Minutes. A motion to approve the minutes of the November 8, 2017, meeting was made by Landreman, seconded by Feldt. All members voted aye. Motion carried.
2. Loan Request – Revive Salon. The applicant, Michelle Johnson, currently operates a salon in Appleton and intends to move all her stylists to the new location. The existing chair rental structure will remain – the stylists pay a lease fee between $350 and $500 per month to Ms. Johnson who maintains the facility and the utilities. The lease on the building space is $1,000 per month for the first year and $1,250 the second. Lease terms will be revisited after that. Ms. Johnson explained that this new location on Plank Road, along with the family diner opening next door in March or April, will improve walk-in traffic. They will also offer boutique sales that will provide a cash-flow cushion. Ms. Smith asked how the loan will be secured. Mr. Jakel explained that it would be secured by a first position on all removable equipment. Mr. VanderWyst questioned the lease term versus the loan term. Ms. Johnson explained that there is a clause in the lease whereby her space at the location is secured. Mr. Natrop asked about existing and potential clients. Ms. Johnson explained that they are largely from Kaukauna or Appleton and primarily female. Ms. Smith asked about the proposed loan terms. Mr. Jakel recommended $8,000 at 2.5% for five years plus $200 towards loan closing and attorney fees.
3. Executive Session – Revive Salon. A motion to adjourn to Executive Session at 9:15 a.m. pursuant to Wisconsin State Statute 19.85(1)(e) to discuss the loan request by Revive Salon was made by Feldt, seconded by McGinnis. All members voted aye. Motion carried.
4. Open Session – Revive Salon. A motion to return to Open Session at 9:20 a.m. was made by Landreman, seconded by Smith. All members voted aye. Motion carried. A motion to approve the loan request of $8,200 at 2.5% for five years with a first position on all removable equipment was made by Natrop, seconded by Smith. All members voted aye. Motion carried.
5. General Matters. Mr. Jakel updated the Authority on the status of on-going delinquent loans and explained that he met with the operators of Image Nutrition who agreed to begin making payments within the week, however, no payment has been received as of the meeting date. Rose Simon-Kazik of 5K6, LLC communicated to the City Clerk that she had not received any notice of delinquency and was not aware of RACK’s intention to begin foreclosure procedures. Mr. Jakel explained that the loan file and all correspondence had been forwarded to RACK’s attorney. Kate Vandenberg of Quencher’s Food and Spirits makes period interest payments however the loan is still in default of contract as it is not open for business. The loan file has been forwarded to RACK’s attorney for review. Ms. Smith asked about the status of personal guarantees on the Plum Hill loan. Mr. Jakel explained that the loan balance has been written off but personal guarantees are still in force. RACK’s attorney has advised that collection fees may exceed the amount that would be collectible. Ms. Smith asked about the status of the USA Academy of Martial Arts loan. Mr. Jakel explained that no payments have been made but the building is being marketed for sale. He was confident that RACK will be paid out upon the sale as the building has value. Ms. Smith suggested that the new and renovated businesses on Wisconsin Avenue may bring in a buyer. Mr. McGinnis asked about the status of the loan to Clay Eiting for the Second Street building. Mr. Jakel explained that the masons have begun work (delayed due to a change in vendor), the upper apartments are framed in, plumbing and electrical upgrades are in progress, and exterior work will progress weather permitting. Getting state-approved plans caused a delay however, there has been no draw on RACK funding as of yet.

There being no further business to be brought before the Authority, a motion to adjourn the meeting at 9:35 a.m. was made by Landreman, seconded by Feldt. All members voted aye. Motion carried.

Julianne Schroeder

Executive Secretary