SHEBOYGAN COUNTY REVOLVING LOAN FUND COMMITTEE MINUTES. Administration Building 508 New York Avenue Sheboygan, WI

Transcription

1 SHEBOYGAN COUNTY REVOLVING LOAN FUND COMMITTEE MINUTES Administration Building 508 New York Avenue Sheboygan, WI Called to Order: 12:00 Noon Adjourned 1:15 P.M. MEMBERS PRESENT: MEMBERS ABSENT: ALSO PRESENT: Tom Wegner,,,, (via phone) Carl Buesing Sheboygan County Corporation Counsel Jim Schuessler Sheboygan County EDC Mark Maglio Safety Fresh Foods, LLC Mike Hannes 931 Millersville, LLC d/b/a Lakeshore Pallet Kay Hannes 931 Millersville, LLC d/b/a Lakeshore Pallet Derek Klahn Bank First Call to Order Meeting was called to order by Charnon at 12:00 Noon Certification of Compliance with Open Meeting and Public Hearing Laws Charnon certified compliance with applicable open meeting law. The meeting notice was posted on January 15, 2018 at 2:45PM. Approval of Minutes June 13, 2017 Motion made by Wegner second by TeStroete to approve the minutes. Motion carried unanimously voice vote. Correspondence None relevant to applications. Revolving Loan Fund Update and Fund Balance Schuessler stated the current loan fund availability is $990, as of 1/9/2018. Outstanding loan balances are currently $627,517. Consideration of Request to Provide a Loan to Safety Fresh Foods, LLC. Introduction by Schuessler, presentation by Maglio provided an overview of Safety Fresh Foods, LLC (SFF) and high pressure pasteurization (HPP). HPP is a cold pasteurization technique by which products, already sealed in its final package, are introduced into a vessel and subjected to a high level of isostatic pressure ( MPa/43,500-87,000psi) transmitted by water. This is a technology already in use by many area companies; however, since technology is not local companies are forced to ship it in/out of places such as Milwaukee. Schuessler explained that SFF was approved by Plymouth RLF for $305,000, but only had $255,000 available at this time. This application would address the $50,000 gap. Jobs would be counted separately. Buesing asked if Plymouth RLF understood that this loan would share subordination with Sheboygan County RLF. Blanke believes that this will be acceptable.

2 Page 2 of 5 TeStroete asked if there would be scientists hired for the project. Maglio explained that two hires had already been made, the General Manager, an individual with significant food science background formerly employed by Reinhart, and a maintenance technician. Most jobs would be loading and unloading the machine. Wegner asked if the business would take up the entire facility, the former DFA building. Maglio explained that they were only leasing a portion of the facility. Closed Session A motion was made by Wegner, seconded by TeStroete to move into closed session in order to discuss the investing of public funds or conducting other specified public business whenever competitive or bargaining reasons. Motion carried by roll-call vote. The committee went into closed session at 12:22 PM. Open Session The Committee returned to open session at 12:25 PM with the following vote: Wegner made a motion, seconded by Goehring to grant Safety Fresh Foods, LLC an RLF Loan from the County of Sheboygan with following terms: Loan Terms $50,000 loan 5-year fully amortized loan 3.0% fixed interest rate Collateral position taken will be behind First Business Bank and concurrent with City of Plymouth RLF 2 nd on equipment purchase by the loan Personal guarantee All other requirements required by the RLF Handbook

3 Page 3 of 5 Motion carried by roll-call vote. Consideration of Request to Provide a Loan to 931 Millersville, LLC d/b/a Lakeshore Pallet. Introduction by Schuessler, presentation by Mike Hannes provided an overview of Lakeshore Pallet. Lakeshore Pallet Inc. is presently owned by Mark and Beverly Bender, and services many companies in the mid-lakeshore area. The company specializes in heat-treated pallets that meet ISPM compliance. The Benders desire to retire, and Mike Hannes, who has served as the company s Production Manager for the past 11 years. The Bender s have agreed to provide training support and provide a non-compete agreement. The Benders are providing $1,000,000 in seller financing, which will subordinate to the BFN, SBA, and SC RLF. Charnon asked about the concentration of clients. Four customers represented a significant portion of Lakeshore s customer base. Mike Hannes explained that they recently added a new customer, Alliance Laundry that would represent $1,000,000 in new work and is expected to grow by 20% per year. Klahn added that a couple new hires were coming from Thunder Pallet, Alliance s former supplier. Buesing asked Mike Hannes to verify that they would be adding 12 new employees over three years. Hannes verified this number. Klahn noted that the senior lender s agreement included a covenant to maintain owner s maximum compensation to be $95,000 per year. Closed Session A motion was made by Goehring, seconded by Struck to move into closed session in order to discuss the investing of public funds or conducting other specified public business whenever competitive or bargaining reasons. Motion carried by roll-call vote. The committee went into closed session at 12:38 PM. Open Session The Committee returned to open session at 1:02 PM with the following vote:

4 Page 4 of 5 Wegner asked if the loan amortization could be revised from 10 to 7 years. Klahn responded that there was enough operating income to shorten the repayment period. Goehring made a motion, seconded by Struck to grant 931 Millersville, LLC an RLF Loan from the County of Sheboygan with following terms: Loan Terms $300,000 loan 7-year fully amortized loan 3.0% fixed interest rate Collateral position taken will be behind SBA and Bank First and ahead of Bender seller financing 3 rd on real estate and equipment Personal guarantee All other requirements required by the RLF Handbook Motion carried by roll-call vote. Other Business 1. Sheboygan County funds in an entitlement community Schuessler reviewed determination letter from State of Wisconsin Department of Administration (DOA) on criteria to provide loan within entitlement community, for our purposes, within the city of Sheboygan. DOA recommends validation through the United States Department of Housing and Urban Development (HUD). 2. Mueller Motorwerks bankruptcy Review of Chapter 7 filing. Schuessler stated that the RLF fund is in first position on a forklift. Buesing stated the forklift has gone missing, but the senior lender may have it. Buesing agreed

5 Page 5 of 5 to gather additional information to be discussed at a subsequent meeting, possibly in a few weeks. 3. Professional services bill: Hopp Neumann Humke LLP A motion to approve was made by Struck, second by Goehring. Motion carried unanimously voice vote. 4. Professional services bill: SCEDC A motion to approve was made by Struck, second by Goehring. Motion carried unanimously voice vote. Adjournment A motion to adjourn was made by Wegner, second by TeStroete. Motion carried unanimously voice vote. The Revolving Loan Committee adjourned at 1:15 P.M. Jim Schuessler RLF Administrator