Loading...
HomeMy WebLinkAbout2009-01-12 Correspondencer ~~i~. p f~r~ CITY O F [ 0 1N A C I T Y ~.~ ~w.~~ RAN D U M M EMC. Date: December 31, 2008 To: City Council From: Tracy Hightshoe, Associate Planner Re: CDBG Economic Development Funding Recommendation Atlas Home Service LLC Applicants, Leah and John Lee, owners of Atlas Home Service LLC are requesting funds to expand their home based business. The business offers home and property maintenance and repair. Existing services include painting, drywall, plumbing, windows and doors, and general handyman assistance. John began this service on a part-time basis in the fall of 2006 as asole-proprietorship and by 2007 was able to establish the business as his full time means of employment. The business hopes to expand their services and grow their customer base. They have immediate plans to hire a full time employee this January to support already acquired snow removal contacts. The owners request $35,000 for working capital such as equipment, uniforms, salary expense and related items to support expansion. The owners plan on leasing a commercial space on Highland Court in April 2009 if there is sufficient cash flow. The applicant secured a private loan with First American Bank for $33,250 that will be secured by a deposit account held at the bank. Based on conversations with First American Bank, their commercial lender considers Atlas's financial projections realistic. The business office would remain in their home in Iowa City, but any new commercial space must be leased or purchased in Iowa City as a condition of the award. The business qualifies as amicro-enterprise under the CDBG program. Both owners qualify as low-to-moderate income persons. Amicro-enterprise is a commercial enterprise that has five or fewer employees, one or more whom owns the enterprise. 51 % of the employees and owners must be low-to-moderate income. The Council Economic Development Committee recommended a $35,000 loan at 3% interest for a maximum term of 7 years. Due to high owner commitment, the owner's completion of a detailed business plan with market research, and a history of paying loan obligations, the committee recommended funding this business even though the loan will not be fully secured. The loan will be partially secured by a lien on the owner's rental property and a financing statement on all business assets. As a condition of the award, business assistance will be required based on an evaluation completed by the Small Business Development Center on December 15, 2008. draft MINUTES CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE DECEMBER 16, 2008 CITY HALL, LOBBY CONFERENCE ROOM, 8:00 A.M. Members Present: Regenia Bailey, Connie Champion, Matt Hayek Staff Present: Wendy Ford, Jeff Davidson, Tracy Hightshoe, Michael Lombardo Others Present: John and Leah Lee, Brenda Pearson (Englert President), Paul Burns (Englert incoming President), Bill Thomasson (Englert Finance Committee Chair), Beth Bewley-Randall (Executive Director Englert), Jeff Charis-Carlson (Press-Citizen) RECOMMENDATIONS: Champion moved to approve the CDBG Economic Development Fund application as recommended by staff for Atlas Home Service, LLC; seconded by Hayek. Motion carried 3-0. Champion moved to grant the request of $50,000 annually to the Englert Theater for three years, with annual reviews; seconded by Hayek. Motion carried 3-0. CALL MEETING TO ORDER: Chairperson Regenia Bailey called the meeting to order at 8:00 A.M. CONSIDER APPROVAL OF THE MINUTES OF THE OCTOBER 13, 2008 ECONOMIC DEVELOPMENT COMMITTEE MEETING: Champion moved to approve the minutes of the October 13, 2008, Economic Development Committee as presented; seconded by Hayek. Motion carried 3-0. CONSIDER CDBG ECONOMIC DEVELOPMENT FUND APPLICATION: Atlas Home Service, LLC Hightshoe stated that they received a CDBG' application for this home-based business, and that this is the first home-based business they will have considered. This is a "handyman" type of service that started in the fall of 2006. She briefly touched on the history of Atlas Home Service LLC, stating that they have been quite successful to date. She also stated that the company now has a web site. Hightshoe noted that this business is eligible as a microenterprise. She continued to fill the Committee in on the details of this assistance, noting that in 2009 the business hopes to rent some commercial space. The owner spoke to the Committee, stating that they are working on furthering the image of their business, and that they are looking to move out of their home, as they do have a location in mind. Champion stated that she really likes this application and feels this is exactly the kind of business they need to be helping. Hayek asked about the bank loan that the owner has, and she explained the details of the loan briefly. Hayek stated what some of his concerns are, adding that he believes this is a very good application as well. Champion moved to approve the CDBG Economic Development Fund application as recommended by staff (staff recommendation was included in meeting packet) for Atlas Home Service, LLC; seconded by Hayek. Motion carried 3-0. CONSIDER ENGLERT THEATER ANNUAL FUNDING REQUEST: Davidson noted that Members have a letter regarding the Englert Theater's request of $50,000 in annual funding, for three years, renewal each year. He noted that in discussions with Englert Economic Development Committee Meeting December 16, 2008 board and staff members, it became obvious that they were talking about funding that is clearly different than the standard annual "aid to agencies" funding. Davidson noted that the $50,000 would be used to support the Englert in its operations. Davidson continued, stating that the theater is an asset to the downtown and is in line with the goals for the downtown area. He noted that staff met with the Englert recently and were very impressed with the operations and financial management there. Davidson noted that the timing for this request is not good, considering budget constraints, but that staff does support the request at this time of $50,000 per year for three years, and that this be renewable based on an accountability report that would be submitted in November of each year. Bailey asked those in attendance from the Englert to introduce themselves. Hayek noted for the record that he previously was a Member of the Englert Board of Directors; and Ford noted that she is a current Member of the Englert Board of Directors. The discussion began with Champion stating that she does not believe it is unusual for a municipal government to support a theater, and that her only concern is obligating the City to pay out $50,000 a year for the three years. She added that she would certainly consider the request on ayear-to-year basis, but does believe they need to be cautious due to budget cuts. Bailey asked questions regarding the financial forecast for the Englert, and how other similar theaters are operating. Bill Thomasson addressed some of Bailey's financial questions, noting that they have presented these same reports to their bank. The discussion continued, with Beth Bewley-Randall noting that during the first four years, the Englert concentrated on programming and finding their niche in the market. Now that they have found it and are managing operations with very respectable margins, the Board believes it is time to improve on fundraising and financial development to fortify the Theater's future. Bailey asked about the fundraising portion of the Theater's budget, and why this has dropped. Bewley-Randall explained the costs and revenues associated with the year's fundraiser - a Randy Newman concert and that while revenues were high, costs were also high. The 2009 numbers reflect a different fundraiser with more conservative aspirations. The Friends of the Englert campaign was mentioned, as well. Hayek stated his thoughts about the request, noting that he understands Champion's concerns but he believes this is something where the asset of having the Theater means something. Bailey suggested they talk about what accountability measures they would want to see, if they do approve this request. Bewley-Randall stated that they have updated their ticket program and can track more information about their patrons, which will help in generating report data. Paul Burns noted that they have the capability of tracking most anything the Committee might be interested in. Bailey noted that the main interest is in getting people to come downtown, not only to the Englert, but also to the many restaurants and other businesses downtown. Brenda Pearson noted that they have been working on a concept around partnering with restaurants where an Englert ticket combination would offer a show and a meal. The discussion continued with various ideas about accountability and partnerships shared. Bailey noted that measurements such as attendance, Englert parking ramp discount uses, restaurant increases, that type of data, would give some measurement of what is happening downtown. She stated that she believes they need to come up with as many quantitative measures as possible, given that this will be an investment for the City. Hayek stated that he agrees the timing is bad, given the budget situation, and he questioned if Champion would be interested in more than cone-year commitment. Bailey asked that they get a motion on the table so they can further discuss this. Champion moved that they grant the annual request of $50,000, reiterating that she believes this needs to be done on an annual basis. Hayek then stated his concerns, asking for more clarification of the Englert's budget process. Bailey stated that she would support the three-year request, that she believes this is an investment for the City. She believes they need to invest now in order to keep the downtown thriving. It was noted that the annual $50,000 would come through the Economic Development Division budget from a biannually funded $200,000 budget line Economic Development Committee Meeting December 16, 2008 reserved for business development. Discussion continued among the Members, with all agreeing that this is an important investment for the City. Hayek then asked Lombardo if he had anything to add. Lombardo stated that he agrees that this is an important economic development move, and that this would be a good investment. Bailey reiterated her concern that they come up with some definite measurements for this request. After further discussion, Champion amended her motion to the three-year request. She noted that they need to have this discussion at the Council level, as well. Champion moved to grant the request of $50,000 annually to the Englert Theater for three years, with annual reviews; seconded by Hayek. Motion carried 3-0. STAFF TIME: None. COMMITTEE TIME: None. ADJOURNMENT: Hayek moved to adjourn the meeting at 8:50 A.M., seconded by Champion.