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HomeMy WebLinkAbout2021 LDFA MinutesLOCAL DEVELOPMENT FINANCE AUTHORITY (LDFA) City of Lansing, City of East Lansing & Ingham County Quarterly Meeting Minutes Wednesday, March 17th, 2021- 3:00 PM Via Zoom Attendees: Luke Hackney, James Tischler, Ben Bakken, Brian McGrain, Dave Washburn, Charles Hasemann, Derrell Slaughter, Jessy Gregg, Thomas Fehrenbach Guests: Jeff Smith (MSU Foundation), Gabriela Allum (MSU Foundation), Adam Cummins (City of East Lansing), Tim Dempsey (Public Sector Consultants), LeTasha Peebles (MEDC), Karri Christie (MSU Foundation), Amber Clark (Meridian Township) Staff: Joe Carr, Anum Mughal, Karl Dorshimer, Jennifer Abood Morris, Debbie Engel Recorded by: Debbie Engel of LEAP ❑ Call to Order & Roll Call Chair Hackney called the meeting to order at 3:02 PM. Carr conducted roll call. All members present. ❑ Project vs audited reconciliation Bakken presented on the projected financials versus audited financials for FY19/20 and explained that the projections of the 4th quarter for the LDFA budget and the actual numbers from the audit vary slightly due to the cost of the strategic planning projections. However, the numbers are still consistent with what they expected. ❑ LDFA Annual Audit Presentation Will Love of Rehmann presented the LDFA SmartZone audit for Fiscal Year ending June 2020. Love discussed the audit process, government auditing standards and the responsibilities of each party to ensure a complete audit and render an opinion on the financial position of the LDFA. Rehmann has concluded that there is no unfavorable news or red flags to note, thus they have rendered a clean opinion of the financials which is the best opinion they can provide. Rehmann was asked to explain the audit process compared to the cost of the audit since there are very few transactions completed by the LDFA throughout the year. Rehmann explained that there is a certain amount of quality control that goes into every audit and much more preparation work is completed before transactions are tested and, thus, time put into the audit is much greater than just transactional analysis. MOTION: Moved by Luke Hackney, and seconded by Ben Bakken, to approve the LDFA SmartZone audit as presented. All in favor. Motion passed unanimously. Luke Hackney - Yes Derrell Slaughter - Yes Ben Bakken -Yes Jessy Gregg - Yes Brian McGrain - Yes Tom Fehrenbach - Yes Dave Washburn - Yes Charlie Hasemann - Yes ❑ Approval of LDFA Minutes -December 18, 2020 MOTION: Luke Hackney moved, seconded by Brian McGrain, to approve the LDFA meeting minutes of December 18, 2020. All in Favor. Motion passed unanimously. ❑ Approval of LDFA Financials Abood Morris presented draft financials through December 31, 2020. Cash flow looks good. No red flags or concerns to report. MOTION: Luke Hackney moved, seconded by Charley Hasemann, to approve the LDFA draft financials as presented. All in Favor. Motion passed unanimously. ❑ TIF Renewal Updates Tim Dempsey/Benjamin Fulton from Public Sector Consultants provided an overview of the updated LDFA SmartZone TIF Development plan. This is a draft at this point, and after review, discussion, and feedback, a final plan will be presented in about 30 days. Financial performance shows the increased revenue generated through the TIF capture the last five years and has dramatically increased from 2009 — 2020. Plans for future performance was also discussed. Long term growth will be focusing on managing progress in target parcels; fostering increased collaboration; ensuring sustainability and self-sufficiency. Joe Carr gave an overview of the entrepreneurial process from a local perspective and how some companies fail, move away the area, and others grow, and that the SmartZone can put forth services to retain and grow local companies. Carr noted there's been quite an uptick in site searches. and a lot of growth in the last five years. Fehrenbach asked about the high-tech focus as well as the "rising tide fund". Gregg asked about the sponsorship and fundraising line of $10,000 and how the proposed revenue growth was generated. Dempsey noted the growth in the budget is based on inflation. Hasemann inquired whether it was necessary to spend down fund balance and whether the LDFA can exist after the TIF expires. Fehrenbach inquired about City of Lansing taxable value of parcels prior to coming off tax rolls. Bakken asked about the City of East Lansing revenue and if it will maintain, decline or continue to grow. Dempsey outlined the reimbursement mechanism and its applicability to the 5 -year TIF extension. Hasemann asked about additional parcels in Merdian Township. Amber Clark noted these parcels are some of the few industrial zoned parcels. Washburn requested to be connected with PSC regarding some of the parcels in the UCRP. Bakken inquired about the remaining part of the renewal process. Dempsey noted the additional feedback before sending to the state for initial review before going to local municipalities. Meridian Township needs to be added to the Joint Local Development Authority first as a preliminary step. It was noted TIF renewal must occur before December 31ST. Bakken noted the LDFA would need to approve a budget without a full year of capture. Dempsey noted that the winter tax capture will cover Jan -June 2022 timeframe. Gregg inquired about the determination regarding the reimbursement mechanism. Gregg brought up racism as a public health issue and how it impacts the SmartZone. Discussion ensued ❑ BAF Updates Carr noted a strong start to 2021 for the BAF program. LEAP has submitted, and won, four approvals for BAFs, two submissions are pending, and three more are ready to submit. Carr thanked Red Cedar Ventures, Spartan Innovation, the MSU Foundation and MSU for taking advantage of LEAP's weekly virtual BAF office hours. LEAP recently renewed its contract with the SBDC to continue providing these services to SmartZone clients. ❑ TIC updates - Technology Innovation Center Jeff Smith and Gabriela Allum presented updates on the TIC and its tenants. They have received funding from the LDFA and renovations have recently been made. The Technology Innovation Center's (TIC) new tenants include: AZ Solutions; ExoForce Robotics; Motion Grazer Al; RedoxBlox; Will Winn 2 Games. They are all virtual tenants right now, however, once the tenants receive grant funding it will change to their utilizing the office space. Jeff Smith updated the board on TIC activity and funding. With the support of the LDFA, City of East Lansing, MSU and the MEDC, they've reached the point that the center is almost completely balanced regarding the amount of revenue that is brought in and the expenses being charged for rent and utilities. From a forecast standpoint they are sitting pretty well through the end of the year and are not anticipating much change. ❑ Other Business: No further business was discussed. ❑ Public Comment: There was no public comment. ❑ Adjournment: Chair Hackney adjourned the meeting at 4:35 PM. Joe Carr Vice President, Entrepreneurship & Innovation Team Lansing Economic Area Partnership (LEAP) 3 A to\s/fir, F t ti e "oy C �4+�.r:...v 4:15 •.T� LOCAL DEVELOPMENT FINANCE AUTHORITY (LDFA) City of Lansing, City of East Lansing & Ingham County Quarterly Meeting Minutes June 30, 2021 Via Zoom Attendees: Luke Hackney, James Tischler, Ben Bakken, Brian McGrain, Dave Washburn, Jessy Gregg, Thomas Fehrenbach, Charlie Hasemann Staff: Joe Carr, Bob Trezise, Anum Mughal Recorded by: Debbie Engel of LEAP ❑ Call to Order & Roll Call Chair Hackney called the meeting to order at 10:30 AM. Carr conducted roll call. Members Present: Luke Hackney - East Lansing James Tischler - Lansing Brian McGrain - Lansing Jessy Gregg - East Lansing Thomas Fehrenbach - East Lansing David Washburn - East Lansing Charles Hasemann - Williamston Ben Bakken - East Lansing Members Absent: Derrell Slaughter Chair Luke Hackney announced that Ben Bakken has resigned from his seat with the City of Lansing but is rejoining the board as a representative of Lansing Community College. ❑ Approval of LDFA Meeting Minutes for May 6, 2021 MOTION: Luke Hackney moved, seconded by Jim Tischler, to approve the LDFA meeting minutes of May 6, 2021 as presented. All in Favor. Motion passed unanimously. ❑ LEAP/LDFA 2020-21 Contract Report - Results & Outcomes Joe Carr discussed the LEAP/LDFA 2021 contract which contains LEAP's services to LDFA. LEAP staff spends approximately 750 hours per year on the LDFA for the contracted services which include: Management of the LDFA Board, creation of the annual reports, management of the Gateway/BAF program, SmartZone activity, annual budget development, and TIF management. In return for LEAP staffs management and expertise, LEAP is paid $35,000 in administrative fees per year. ❑ Gateway Business Accelerator Program 2020-21 Joe Carr provided a report on the Gateway Business Accelerator Program. LEAP's participation of the BAF comes by way of the Gateway Representative program. This program provides access and guidance to a variety of programs for local, regional, and state areas. In order to bring clients to these programs, we have to stimulate interest and awareness through a variety of community engagement programs with the help of LEAP's Department of Equitable Economic Planning (DEEP) in which we utilize the following programs: LevelUp, the DEI Network group, One&All, The Hatching, Youth Startup Expo. Carr also gave an update on the Business Accelerator Fund program and reported that LEAP has currently awarded eight companies in 2021. Compared to other SmartZome regions in Michigan, we are the leading organization in BAF awards. ❑ LDFA Organizational Subcommittee Update Luke Hackney reported on the work of the organizational subcommittee workgroup. This group met a few times to address some of the board governance challenges as well as the TIF renewal and potential staff position moving forward. Hackney indicated work is ongoing and he will be reporting out on this subcommittee when it is completed. Trezise added that the subcommittee has completed some very solid, productive, positive work in order to reach beneficial solutions. ❑ Adoption of LDFA FY 2021/2022 Budget Luke Hackney reported that both city councils (Lansing and East Lansing) have passed the budget proposal and the LDFA can now formally adopt the budget. MOTION: Luke Hackney moved, seconded by Jim Tischler, to recommend approval of the 2021-22 LDFA budget as presented. All in Favor. Motion passed unanimously. Luke Hackney - Yes Jessy Gregg - Yes James Tischler - Yes Thomas Fahrenbach - Yes Ben Bakken - Yes David Washburn - Yes Brian McGrain - Yes Charlie Hasemann - Yes ❑ LEAP 2021/2022 Administrative Contract with LDFA Joe Carr discussed the details of the contract and compared the costs and services contained in the contract with other EDO's who hold similar agreements in the region. Discussion ensued. MOTION: Luke Hackney moved, seconded by Tom Fehrenbach, to recommend approval of the 2021-22 LDFA administrative contract with LEAP as presented. All in Favor. Motion passed unanimously. F) Luke Hackney - Yes James Tischler - Yes David Washburn - Yes Brian McGrain - Yes Jessy Gregg - Yes Thomas Fahrenbach - Yes Charlie Hasemann - Yes ❑ Technology Innovation Center (TIC) Updates Gabriela Allum provided an update on the TIC. Currently there are 14 tenants in the space, which is a mix of five office and nine virtual tenants. They continue to see the office tenants decrease which is most likely due to the tail -end of the pandemic and virtual tenants are increasing. There will be a walk-through next week for potential occupants for traditional office space. It was also stated that current sponsorship funds have covered the TIC's expenses at this point. MSU has also paid extra in the lease expenses which helps offset operational costs for the TIC. ❑ Adjournment: There being no further business before the Commission, Chair Hackney adjourned the meeting at 11:0S AM. Respectfully Submitted, Joe Carr Vice President, Entrepreneurship & Innovation Team Lansing Economic Area Partnership (LEAP) 3 JOINT LOCAL DEVELOPMENT FINANCE AUTHORITY (LDFA) City of Lansing, City of East Lansing & Ingham County Special Meeting Minutes September 28, 2021 Van Camp Incubator, 4942 Dawn Ave, East Lansing, MI 48823 Attendees: Luke Hackney, Ben Bakken, Brian McGrain, Dave Washburn, Jessy Gregg, Thomas Fehrenbach, Charlie Hasemann Staff: Joe Carr, Jennifer Abood Morris Recorded by: Joe Carr of LEAP ❑ Call to Order & Roll Call Chair Hackney called the meeting to order at 3:10 PM. Carr conducted roll call. Members Present: Luke Hackney Ben Bakken Brian McGrain Jessy Gregg Thomas Fehrenbach David Washburn Charles Hasemann Members Absent: Derrell Slaughter James Tischler ❑ Approval of LDFA Meeting Minutes for June 30, 2021 Fehrenbach requested amendments to the minutes related to language around adopting and approval. MOTION: Luke Hackney moved, seconded by Tom Fehrenbach, to approve the LDFA meeting minutes of June 30, 2021 as amended. All in Favor. Motion passed unanimously. ❑ Approval of LDFA Financials MOTION: Luke Hackney moved, seconded by Mayor Jessy Gregg, to approve the draft LDFA financials of June 30, 2021 as presented. All in Favor. Motion passed unanimously. ❑ LDFA/LEAP 2021-2024 Staff Contract 1 Joe Carr provided an explanation of the contract highlighting the primary responsibilities and reporting provided by LEAP related to SmartZone activity. Bakken asked for clarification of who this staff person would answer to. Additional details around the cost of benefits and the source of funds for equipment and office space was requested. An overlap in the activities and responsibilities was noted between the staff contract and the LEAP services contract and with other partners. Fehrenbach noted this position should serve as a convening of the community, MSU and additional resources. Regarding the types of businesses that can be served by the SmartZone Fehrenbach noted that support is limited to high-tech businesses. More explicit language regarding the terms of the services was requested. McGrain noted that there should be some administrative fee from LEAP for conducting the hiring process. MOTION: Fehrenbach moved with amendments, seconded by Luke Hackney, to approve the LDFA/LEAP SmartZone staff contract as amended. Discussion ensued. Motion withdrawn from Fehrenbach. Board outlined additional information to be implemented into contract. ❑ UCRP TIC management contract MOTION: Fehrenbach moved, seconded by Ben Bakken, to recuse Dave Washburn. All in Favor. Motion passed unanimously. Allum presented contract. Bakken noted the change to the formula and item E is new. Hasemann inquired regarding a spending limit. MOTION: Ben Bakken moved, seconded by Luke Hackney, to approve the UCRP TIC management contract as presented. All in Favor. Motion passed unanimously. ❑ TIF renewal timeline Carr reported updates regarding the TIF renewal process. Bakken asked for clairifcation of dates. Fehrenbach explained the statute and capture dates. ❑ Technology Innovation Center (TIC) Updates Smith noted vacancy numbers high in the TIC however it is offset by virtual tenants. In good shape for fiscal year, continue to promote, pipeline has never been better. Plenty of marketing opportunities. No more printed marketing materials available. Consider adding market dollars to future budget for SmartZone and TIC. Gregg discussed marketing strategies moving forward. Hackney noted that virtual tenants could be a good focus. Smith discussed common equipment that is valued by prospective tenants. Some longstanding tenants even downsizing. Washburn questioned the need for a separate website. Gregg asked about the branding of the TIC and noted marketing could be the responsibility of the new staff. McGrain asked if there is an alumni network or returning customers. Fehrenbach noted the need to make it as active as possible and make it geared towards entrepreneurs. Gregg asked about referrals from current tenants. ❑ Adjournment: There being no further business before the Commission, Chair Hackney adjourned the meeting at 4:33 PM. Respectfully Submitted, Joe Carr Vice President, Entrepreneurship & Innovation Team Lansing Economic Area Partnership (LEAP)