Doing Business in Nelson County: August 2006

August 2006

Economic Development Authority
August 3, 2006

Present:
Barbara Powell
Alphonso Taylor
Natt Hall
Greg Kelly
Stu Armstrong
Steve Crandall

Absent:
Erwin Berry

No public comment.

Chairperson Barbara Powell called the meeting to order.

Motion: To approve the June 15, 2006 meeting minutes. Hall-Kelly (5-0) Crandall not able to vote.

Stu Armstrong presented the treasurer’s report, noting total funds available as $133,984.93. He also reported on the year-end FY05-06 budget, noting that the EDA spent $1,462 over budgeted amounts primarily due to the expenses related to the Business Appreciation Evening which were not originally included in the adopted budget. Mr. Armstrong presented the final proposed budget for FY06-07, which included the same expenses as budgeted in the previous year with slight increases in each line item. Members agreed to include a Business Appreciation Evening, while agreeing to work on finding businesses to help sponsor the event to lower the expenses (budgeted at $10,000).
Motion: To adopt the FY 2007 budget totaling $39,950.

Dan Siegel, attorney representing Kappa Sigma Endowment Fund in Albemarle County, reviewed the process that allows the Nelson EDA to issue bank qualified tax exempt bonds, noting that each locality has the ability to issue up to $10 million in tax exempt bonds each calendar year. He explained that Albemarle County typically issues its full amount of the bonds each year and the applicant has applied to have up to $7.7 million in bonds issued through the Nelson County EDA. Mr. Siegel noted that the issuance of the tax exempt bonds does not affect the county's ability to issue other bonds for economic development or manufacturing businesses. Chad Gebhardt, representing Kappa Sigma Endowment Fund, reported that the group is requesting the funding to complete the construction of a 22,000 square foot museum and conference center to accommodate 300 people on Route 20 in Albemarle County.

Natt Hall asked what the EDA's liability would be. Mr. Siegel said that the bank documents will clearly state that the EDA and Nelson County have no liability or moral obligation, noting that the EDA's bond counsel will verify that prior to the actual signing. Stu Armstrong asked about the revenues to the EDA from the bond issuance. Mr. Siegel noted that the EDA, in addition to the $1,000 filing fee, will receive 1/8 of 1% of the outstanding bonds each year - approximately $9,000 annually decreasing with the balance over an 8-10 year payoff period.

Motion: To adopt a resolution declaring its official intent to issue the bonds in an amount not to exceed $7.7 million with the borrower to pay all costs and expenses connected to the financing and with neither the Nelson County EDA nor the County of Nelson to be legally responsible for the debt of any costs related to the debt. Hall-Armstrong (5-0) Crandall not able to vote.

Natt Hall reported that the EDA has received a bid on the Callohill property, noting that staff will provide each member with a copy of the bid before discussion in closed session at the next EDA meeting. Barbara Powell suggested that the bidder be present at that meeting in case there are questions. Bo Delk, a property owner at Callohill, asked what process was followed to advertise the property for sale. He noted that he and Doug Long, as Callohill property owners, had responded to the first RFP but never heard anything back from the EDA. Ms. Powell noted that, per code, an RFP was issued in February to seek a purchaser to acquire and develop the property to its highest and best use. She said that two proposals were received and rejected at the next EDA meeting, at which time another RFP was issued to enter a negotiation process with prospective developers. Mr. Delk asked how the second RFP was advertised. Ms. Powell said that the second RFP did not require advertisement and was sent to targeted developers. Stu Armstrong said that, while notification to the first two bidders may not have been required, it should have been given as a matter of courtesy.

Doug Long said that staff has received an invitation to a September 8, 2006 meeting of the property owners at Callohill to discuss the needed road improvements. He asked that the EDA send a representative to the meeting.

There being no further business, the meeting was adjourned.

Meeting notes excerpted from Rural Nelson, Inc.