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City of Kaukauna

Redevelopment Authority Meeting Minutes – January 15, 2019

Posted on Jan 15, 2019 by

A meeting of the Redevelopment Authority of the City of Kaukauna was called to order at 8:30 a.m. on Tuesday, January 15, 2019, by Vice-Chairman VanderWyst.

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

Also Present: Planning Director Jakel, Jean Heim of K-Town Sports Bar and Grill.

Absent and Excused: Landreman.

  • Minutes. A motion to approve the minutes of the September 11, 2018, meeting was made by McGinnis, seconded by Feldt. All members voted aye. Motion carried.
  • Election of Chairperson and Vice Chairperson. A motion to nominate and elect Jeff Feldt as Chairperson was made by McGinnis, seconded by VanderWyst. All members voted aye, motion carried. A motion to nominate and elect Joe Vander Wyst as Vice Chairperson was made by Natrop, seconded by Smith. All members voted aye. Motion carried.
  • Introduction of New Member. Chairman Feldt introduced Carley Windorff as the new Authority member. Ms. Windorff replaces Randy Haak who resigned his appointment when he moved outside the City.
  • Update on CDBG-Close Program. Mr. Jakel explained that under the current CDBG program requirements, municipalities are only allowed to lend funds to projects that meet specific criteria including job creation, environmental review, and using funds strictly for property or equipment acquisition to avoid triggering the Davis-Bacon Act. While Kaukauna’s program is very active, the State’s concern was that municipalities were sitting on funds as projects could not meet the program requirements. The CDBG-Close Program would require municipalities to return cash-on-hand and buy-out existing loan balances; funds would be earmarked and municipalities could submit new loans to be made against the funds. Mr. Jakel explained that RACK would potentially borrow funds to buy out our existing loans, repay the loan with loan repayments and then lend out the revolving funds without any restrictions. Mr. Jakel explained that there is also a provision whereby communities that received funding prior to 1992 (which Kaukauna did) may have their program close-out handled in another way as the funds were granted under different circumstances. Ms. Smith asked if local loans with existing balances would then be serviced by the State. Mr. Jakel explained that they would and that the State would likely not be as flexible as the City has been. Chairman Feldt asked if the changes would eventually dissolve the Redevelopment Authority. Mr. Jakel explained that RACK has other duties including downtown site plan reviews and PACE loan lending but he didn’t see a complete end to the revolving loan program at this time. Staff will be attending informational meetings on the proposed closure and will provide an update at the next meeting.
  • Loan Request – Clay Eiting for 144 East Second Street. Mr. Jakel explained that the loan request was previously reviewed at the June 11, 2018, meeting but was tabled due to questions regarding jobs created, land use, and personal financial statements. Mr. Jakel explained that from the perspective of conventional financing, both of Mr. Eiting’s Second Street projects (150/152 and 144 East Second Street) are part of the same portfolio and additional financial statements were not required. Mr. Eiting completed the renovation of the dilapidated façade and updated the interior on both floors to house commercial space (no residential). The catering business located in 150 East Second Street has leased the entire building at 144 East Second Street for special events, storage, and office space. Ms. Smith asked if the catering business would utilize both locations. Mr. Jakel explained that they would and would generate up to two new jobs. Mr. Jakel explained that Mr. Eiting is requesting $35,000 in reimbursement towards the cost of acquisition.
  • Executive Session – Clay Eiting (144 East Second Street). A motion to adjourn to Executive Session at 8:55 a.m. pursuant to Wisconsin State Statute 19.85(1)(e) to discuss the loan request was made by VanderWyst, seconded by Smith. All members voted aye. Motion carried.
  • Open Session – Clay Eiting (144 East Second Street). A motion to return to Open Session at 9:20 a.m. was made by McGinnis, seconded by Natrop. All members voted aye. Motion carried. A motion to approve the loan request of $35,000 at 2% for five years per the non-binding letter of commitment contingent on funds being issued directly to Abby Bank and applied to the first position loan ahead of RACK was made by VanderWyst, seconded by Natrop. All members voted aye. Motion carried.
  • Loan Request – K-Town Sports Bar and Grill (Jean Heim). Mr. Jakel explained that Ms. Heim received a RACK loan in 2004 for the acquisition of the building. Funding for proposed improvements would be limited by CDBG requirements to avoid triggering Davis-Bacon however the project would be eligible for PACE funding. Ms. Heim explained that her plans to update the facility would include two new refrigerator units and one new freezer for food. The plans would make the entire bar more efficient. Ms. Smith asked how long the business would need to be closed to complete the updates. Ms. Heim explained that they could do the work in four days. Mr. Jakel explained that items eligible for PACE funding would be the 70″ and 90″ coolers, the 48″ freezer, replacement fans and LED lighting. Mr. Feldt asked for an estimate of PACE funds on the project. Mr. Jakel explained that RACK could lend up to 8% of the building’s value and in this case, based on the assessed value of $137,800, $11,000. Ms. Heim explained that she valued the building, business and apartments at approximately $300,000.
  • Executive Session – K-Town Sports Bar and Grill (Jean Heim). A motion to adjourn to Executive Session at 9:35 a.m. pursuant to Wisconsin State Statute 19.85(1)(e) to discuss the loan request was made by McGinnis, seconded by VanderWyst. All members voted aye. Motion carried.
  • Open Session – K-Town Sports Bar and Grill (Jean Heim). A motion to return to Open Session at 9:45 a.m. was made by Smith, seconded by Natrop. All members voted aye. Motion carried. A motion to approve the loan request of $11,000 at 2% for five years based on the current assessed value OR a loan not to exceed $38,000 at 2% for five years provided a higher established value can be demonstrated was made by Natrop, seconded Smith. All members voted aye. Motion carried.

    General Matters. Chairman Feldt recognized former-Chairperson Randy Haak for his 35+ years of service on the Redevelopment Authority and thanked him for his leadership and guidance in making the program as successful as it is.Mr. Jakel updated the Authority on the status of foreclosure proceedings on Quencher’s Food and Spirits (Kathleen Vandenberg). Mr. Jakel explained that a Sheriff’s sale on the property was scheduled for early January and RACK’s attorneys were prepared to offer $83,000 to buy out our position along with $15,000 in back taxes, however, two days before the sale, Ms. Vandenberg filed for Chapter 13 bankruptcy protection. Ms. Vandenberg will now have a set period of time in which to provide documentation on her financial ability to pay the back-taxes, RACK, and her other creditors. RACK’s attorney has expressed doubts that the plan will be submitted and another auction will likely be scheduled.

There being no further business to be brought before the Authority, a motion to adjourn the meeting at 9:55 a.m. was made by McGinnis, seconded by Smith. All members voted aye. Motion carried.

Julianne Schroeder

Community Development Coordinator