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City of Kaukauna

Redevelopment Authority Meeting Minutes – January 8, 2020

REDEVELOPMENT AUTHORITY OF THE CITY OF KAUKAUNA

A meeting of the Redevelopment Authority of the City of Kaukauna was called to order at 9:00 a.m. on Wednesday, January 8, 2020, by Chairman Feldt.

Members Present: Feldt, Kohne, Landreman, Smith, VanderWyst, Verhagen, Windorff.

Also Present: Planning Director Jakel, Principal Planner Brunette, Mayor Penterman, Applicants.

  1. Minutes. A motion to approve the minutes of the November 22, 2019, meeting was made by VanderWyst, seconded by Smith. All members voted aye. Motion carried.

 

  1. Move Out of Order. A motion to move out of order was made by Verhagen, seconded by Landreman. All members voted aye.  Motion carried.

 

  1. Code of Ethics/Conflict of Interest.   Brunette explained that Redevelopment Resources created the forms which are typical of other municipalities and asked that Authority members review them and adhere to them when making lending decisions.  The forms would be re-signed annually.

 

  1. Set 2020 Interest Rates. Brunette suggested that interest rates remain at 2% for projects within the downtown area and 4% outside.  Rates would be reviewed annually to keep pace with market rates. Mr. Jakel explained that the enclosed map outlines areas throughout the City that are eligible for the lower rate.  Mr. Kohne asked for clarification on the different rates.  Mr. Jakel explained that the original loan funds were earmarked for industrial development and the creation of the revolving loan fund was designed to assist businesses in the downtown.  RACK eventually expanded to include all Kaukauna businesses however the focus remains on the downtown.  Mr. Kohne explained that any project looking to be established in Kaukauna could benefit from RACK assistance.  Mr. Jakel explained that even RACK’s higher interest rate is still lower than conventional financing.  Ms. Brunette explained that assisting business has always been RACK’s emphasis and making money is not the focus of the program.  A motion to set the 2020 loan rates at 2% for properties located in the designated downtown area and 4% for properties outside was made by Landreman, seconded by Windorff.  All members voted aye.  Motion carried.
  2. Loan Request – Dong Sheng Chen of New China Wok. Brunette explained that the existing Second Street business was looking to relocate to the former Eagle Graphics retail store on Crooks Avenue.  There are some challenges at the current facility including the kitchen and dining space and the lack of energy efficiency. The proposed facility will significantly increase visibility as well as expanding the business from primarily carry-out to dining in with a buffet.  Ms. Brunette explained that there are significant costs associated with outfitting the proposed facility as a restaurant.  Ms. Brunette explained that the applicant’s conversation with Mayor Penterman made them aware of RACK’s program.  Mr. VanderWyst asked about the ownership of equipment at the current facility.  Ms. Schuh (owner of the proposed new location) explained that the current landlord owns the restaurant equipment which is very old.  Ms. Chen explained that the building owner at her current location is not willing the make repairs so she is paying for them out of pocket.
  3. Executive Session – New China Wok (Sheng Chen). A motion to adjourn to Executive Session at 9:15 a.m. pursuant to Wisconsin State Statutes 19.85(1)(e) to discuss the loan request was made by Kohne, seconded by Landreman.  All members voted aye.  Motion carried.

 

  1. Open Session – New China Wok (Sheng Chen). A motion to return to Open Session at 9:50 a.m. was made by Smith, seconded by Verhagen.  All members voted aye.  Motion carried.   A motion to approve the loan request in the amount of $70,000 at 4% for seven years contingent on the following:  a first position on the range hood via a security agreement assigned to RACK by the landlord; an agreement between RACK and the landlord to purchase the range hood from RACK for $35,000 in the event of default within the three year lease term; a maximum salary draw (not including new employees) for the principals not to exceed $35,000 for the first year; and loan funds being dispersed by RACK directly to the equipment vendors, was made by Landreman, seconded by Kohne.  All members voted aye.  Motion carried.
  2. Disposition of 147 East Second Street (Former Quencher’s Building) – Kim and Brian Mischler. Brunette explained that there was some confusion regarding the ownership structure of the project.  RACK previously approved an offer by Brian Mischler for $50,000 when the project proposal listed $22,500 for building acquisition due to an increase in the cost of construction.  The proposed project would rehab the entire building and create two one-bedroom apartments on the second floor and commercial space on the first floor.  Ms. Smith asked about subcontractor estimates.  Mr. Mischler explained that he would be doing the majority of work himself except for electrical and plumbing and he wouldn’t know the extent of those services until demolition.  Mr. Kohne asked if the catering business would offer lactose-free options.  Ms. Mischler explained that she could accommodate dietary requests.  Ms. Brunette explained that a second offer on the property was rescinded by the buyer.
  3. Executive Session – 147 East Second Street (Brian Mischler). A motion to adjourn to Executive Session at 10:15 a.m. pursuant to Wisconsin State Statutes 19.85(1)(e) to discuss the disposition of property was made by Smith, seconded by Verhagen.  All members voted aye.  Motion carried.

 

  1. Open Session – 147 East Second Street (Mischler). A motion to return to Open Session at 10:25 a.m. was made by VanderWyst, seconded by Smith.  All members voted aye.  Motion carried.   A motion to accept the business plan and proposed offer submitted by Brian Mischler Construction in the amount of $22,500 for the acquisition of 147 East Second Street was made by Kohne, seconded by VanderWyst.  All members voted aye. Motion carried.

 

  1. Loan Request – Sticky Fingers Catering (Kim Mischler). Brunette explained that business plan details the catering business and café to be located on Second Street.  Ms. Mischler has applied for an SBA loan with Associated Bank but applications to that program have a longer turn-around time.  Ms. Brunette explained that the full amount of the project is $101,123 with $10,000 pledged in personal equity.  Mr. Jakel asked if the applicant had a relationship with Associated Bank.  Ms. Mischler explained that she did not but wanted to pursue local financing first.
  2. Executive Session – Sticky Fingers Catering (Kim Mischler). A motion to adjourn to Executive Session at 10:30 a.m. pursuant to Wisconsin State Statutes 19.85(1)(e) to discuss the loan request was made by Verhagen, seconded by Landreman.  All members voted aye.  Motion carried.

 

  1. Open Session – Sticky Fingers Catering (Kim Mischler). A motion to return to Open Session at 10:45 a.m. was made by Smith, seconded by VanderWyst.  All members voted aye.  Motion carried.   A motion to table the loan request until a decision on the conventional financing loan application has been received was made by   Smith, seconded by Verhagen.  All members voted aye.  Motion carried.

 

  1. Other Business. Kohne asked about the City’s or RACK’s authority to address building conditions and absentee landlords relative to health and safety issues.  Mr. Kohne explained that it is difficult to recruit new business when buildings are in disrepair and landlords need to be held accountable.  Ms. Brunette explained that she is appalled at the condition of some of the downtown buildings she has seen and suggested creating criteria for the certification of landlords with an incentive for buildings downtown.  Landlords and buildings could be designated as “gold star” and the City and RACK could assist in marketing those buildings.  Ms. Brunette also suggested a vacancy tax essentially fining landlords who won’t repair their buildings.  Chairman Feldt suggested the possibility of a tip line to protect tenants. Mr. Kohne offered to bring the item up before the Common Council.  Ms. Windorff explained that currently building codes are not being enforced and that the tools are in place but are not being used.  Mr. Jakel suggested bringing the item up for formal action at a future meeting.

There being no further business to be brought before the Authority, a motion to adjourn the meeting at 11:05 a.m. was made by VanderWyst, seconded by Smith. All members voted aye. Motion carried.

 

Julianne Schroeder

Community Development Coordinator