Redevelopment Authority Meeting Minutes – July 27, 2018

A meeting of the Redevelopment Authority of the City of Kaukauna was called to order at 9:00 a.m. on Friday, July 27, 2018, by Chairman Haak.

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

Also Present: Planning Director Jakel, Principal Planner Watson, Applicant.

• Minutes. A motion to approve the minutes of the June 11, 2018, meeting was made by McGinnis, seconded by Feldt. All members voted aye. Motion carried.
• Loan Request – Action Chiropractic (Gerald Gomm). Mr. Jakel explained that Dr. Gomm’s practice is a long-time presence in the Fox Cities and is now returning to Kaukauna to locate in a rental facility in Jerry Van Dyn Hoven’s new building at STH 96 and 55. The facility will be a good fit at the location – high visibility at a busy intersection and just down the road from medical facilities in Commerce Crossing. As RACK cannot fund operating expenses or rental costs, the loan would be secured by a position on equipment. Mr. Jakel recommended a loan of $8,500 at 2% for four years. Dr. Gomm explained that along with his chiropractic service, they will be offering blood work and a nutrition questionnaire to target individual treatments. Mr. McGinnis asked about a start-up date. Dr. Gomm explained that he would like to open in early to mid-September. Ms. Smith asked about road construction outside the facility. Dr. Gomm explained that the opening of the road should coincide with his opening timeline. Mr. Natrop asked about rent on the facility. Dr. Gomm explained that rent is approximately $1,600 month for 1,400 square feet. Chairman Haak asked about potential new jobs. Dr. Gomm explained that he anticipates hiring front desk staff right away – either one full-time or two part-time positions. Mr. Landreman asked for clarification on the profit and loss statement. Dr. Gomm explained that the rent at his previous location was significantly higher, however, it included front desk staff in the cost. While the rent on the new facility will be lower, he will have to factor in the cost of additional staff. Ms. Smith asked if current patient were aware of the planned move. Dr. Gomm explained that the majority of his patients are from the Kaukauna/Wrightstown/Freedom area so the new location will be less of a drive with less traffic.
• Executive Session – Action Chiropractic (Gerald Gomm). A motion to adjourn to Executive Session at 9:10 a.m. pursuant to Wisconsin State Statute 19.85(1)(e) to discuss the loan request was made by Feldt, seconded by VanderWyst. All members voted aye. Motion carried.
• Open Session – Action Chiropractic (Gerald Gomm). A motion to return to Open Session at 9:15 a.m. was made by McGinnis, seconded by Landreman. All members voted aye. Motion carried. A motion to approve the loan request of $8,500 at 2% for four years contingent on a first positon on equipment and the signature of Dr. Gomm’s wife if deemed appropriate by RACK’s counsel was made by McGinnis, seconded Feldt. All members voted aye. Motion carried.
• 
  Update on Foreclosure Proceedings for Quencher’s Food and Spirits (Kate Vandenberg). Mr. Jakel explained that Ms. Vandenberg is contesting the foreclosure on the grounds that the building is her retirement savings, however, RACK’s counsel does not believe Ms. Vandenberg has the grounds to appeal. Mr. Jakel explained that while the appeal has delayed the process, he is confident that RACK will prevail and ultimately, will end up owning the Second Street building. Mr. Jakel explained that there are already two parties interesting in purchasing the building. Mr. Landreman asked why Ms. Vandenberg didn’t market the building for sale to avoid the foreclosure. Ms. Smith agreed and explained that it would have been preferable for Ms. Vandenberg to sell the property. Mr. Jakel explained that he had attempted to put potential buyers in contact with Ms. Vandenberg however she indicated that she had no desire the sell the building. Mr. Haak asked if there was any equity in the building. Mr. Jakel explained that there are a number of loans in positions behind RACK and it is very doubtful that any equity exists.
• 
  Mandatory Changes to RACK Program by WI DOA. Ms. Watson explained that the State’s CDBG program has come under fire from HUD as funds are not revolving as required. The State’s Department of Administration decided to follow a program implemented in Illinois that would close out the program – effectively ending RACK’s revolving loan fund program. Staff is working to determine a close out number by the October deadline including outstanding loans, interest generated, and delinquent loans. Ms. Watson explained two options – returning our cash-on-hand with DOA taking over collection of our loans; or RACK buying out some or all of our loans with the funds earmarked for future non-competitive grants with a quick turn-around. Ms. Watson explained that she is still looking into the specifics on how delinquent loans or loans in foreclosure would be handled. Ms. Smith asked if RACK chose to buy out our loans, would we lose control of our money. Ms. Watson explained that we would and that the money was never totally in our control to begin with as we were bound by specific requirements as well. Ms. Watson explained that it might be beneficial for us to keep funding projects – even if it’s via a one-time grant and that upcoming capital projects should be kept in mind. Mr. Feldt expressed his concern that while our program has been highly successful, we are being penalized for issues in other communities. Mr. Jakel suggested an option where we turn over our cash-on-hand, put funds in a Redevelopment Authority fund and restart a program on our own. While finding the initial funds to begin the program could be difficult, a TIF specifically for the downtown could be an option if we limit loans to energy improvements and businesses. Mr. Jakel explained that he was not 100% sure the State would follow through on the closure as larger communities are gearing up to fight back. Mr. Haak explained that he has been working with the program since it began in the early 1980’s and he’d like to find a way to hang on. The lack of success in other communities should not punish us as our program has been a model of success. Mr. Jakel explained that the State attempted to regionalize CDBG funds nine years ago and communities rallied against that. Mr. Haak suggested contacting legal counsel on dealing with the mandate.

There being no further business to be brought before the Authority, a motion to adjourn the meeting at 9:45 a.m. was made by Feldt, seconded by McGinnis. All members voted aye. Motion carried.

Julianne Schroeder

Executive Secretary