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IEDA Board Minutes - May 2019

Iowa Economic Development Authority

Board of Directors

Meeting Minutes

May 17, 2019

10:15 a.m.

Board Members Present:

Mark Kittrell

Tom Townsend

Doane Chilcoat

Pankaj Monga

Emily Schmitt

Jennifer Cooper

Lisa Hull

Chris Murray

Megan McKay

Ex-Officio Members Present:

Rob Denson

Senator Mark Lofgren

Senator Jackie Smith

Representative Kenan Judge

David Barker

IEDA Staff Present:

Rita Grimm

Terry Roberson

Katie Rockey

Vicky Clinkscales

Alaina Santizo

Kristin Hanks-Bents

Melanie King

Maicie Pohlman

Jacque Matsen

Rick Peterson

Others Present:

Dan McDonald, Greater Dubuque Development

Dean O’Connor, City of Altoona

Kevin Hardy, Des Moines Register

Jeff Mark, City of Altoona

Renae Billings, Sioux City

Marty Dougherty, Sioux City EDD

Chad Schreck, North Iowa Corridor EDC

Aaron Burnett, City of Mason City

Jeff Mark, City of Altoona

Mike Lukan, CRMEA

Daryl Bouwkamp, Vermeer Corporation

Janelle Kruger, Kraft Heinz

Dan McDonald, Greater Dubuque Development

Dave Madsen, EY

Sue Foecke, Iowa Senate Democrats Staff

Stacie LoVan, Greater DM Partnership

John LaMarche, VentureNet

Mallory Stanek, VentureNet

BOARD chair:

  • Welcome and Introductions

Board Chair Jennifer Cooper called to order the meeting of the Iowa Economic Development Board at 10:15 a.m.

  • Roll Call

A quorum of the Board was established with the following members present Chris Murray, Jennifer Cooper, Lisa Hull, Megan McKay, Tom Townsend, Doane Chilcoat, Emily Schmitt, Pankaj Monga and Mark Kittrell

Ex-officio present:  Rob Denson, David Barker, Kenan Judge, Jackie Smith, Mark Lofgren

Approval of Minutes – March 29, 2019 IEDA Board Meeting

MOTION: Chris Murray moved that the IEDA Board approve the minutes of the March 29, 2019 IEDA Board meeting, seconded by Mark Kittrell. Motion carried unanimously.

Approval of Agenda – May 17, 2019 IEDA Board Meeting

MOTION: Chris Murray moved that the IEDA Board approve the May 17, 2019 IEDA Board Meeting agenda, seconded by Emily Schmitt. Motion carried unanimously.

Public Comment Period

Chad Schreck along with Janelle Kruger of Kraft Heinz and David Madsen of Ernst and Young thanked the Board for their continued support with the Kraft Heinz project.

Daryl Bouwkamp of Vermeer Corporation thanked the Board for the continued support to Vermeer, especially after the tornado last year. 

Compliance

120 Day Report

Arconic, Inc.: 90-day extension

Chamness Biodegradables, LLC.: 90-day extension

Northern Tool & Equipment Company: 90-day extension

Sammons Financial Group – 30-day extension

MOTION: Chris Murray moved that the Iowa Economic Development Authority Board approve extensions of the contract execution deadlines for all the companies as recommended by Staff, seconded by Doane Chilcoat. Motion carried unanimously.

Pursuant to Iowa Code section 15.106, Representative Kenan Judge disclosed a conflict of interest and exited the meeting at 10:21 a.m. He did not participate in discussion or action regarding Hormel Foods Corporation.  See the attached copy of written notice of the conflict.

Hormel Foods Corporation: 60-day extension

MOTION: Chris Murray moved that the Iowa Economic Development Authority Board approve a 60-day extension of the contract deadline, as recommended by Staff, seconded by Lisa Hull.  Motion carried unanimously.

Representative Kenan Judge rejoined the meeting at 10:22 a.m.

TCC Amendment Requests

VIDA Diagnostics, Inc. d/b/a VIDA: Coralville – Request to Amend Contract Term

MOTION: Chris Murray moved, seconded by Lisa Hull, that the Iowa Economic Development Authority Board approve the recommendation of the TCC to add a repayment provision to Contract 15-IAFUND-007 providing the award, less any payments made, shall be repaid in a lump sum upon closing one or more funding rounds, the aggregate total of which is $5 million or more, subsequent to the pending $2 million raise.  Motion carried unanimously.

Crossroads Manufacturing, LLC:  Clarksville – Request to Amend Contract Terms

MOTION: Chris Murray moved that the Economic Development Authority Board approve the recommendation of the TCC to deny the request to defer loan repayments until January 1, 2020 and approve payment restructuring by requiring the company to pay one-half the monthly payment amount through December 2019 and pay the full amount each month beginning in January 2020, seconded by Mark Kittrell.  Motion carried unanimously.

Stone Medical Corporation:  Davenport – Request to Amend Contract Terms

MOTION: Chris Murray moved, seconded by Lisa Hull, that the Economic Development Authority Board approve the recommendation of the TCC to approve the request for payment restructuring by amortizing the $42,000 balloon payment due July 1, 2019 over eighteen months at 3% interest with the following payment schedule:

July-December 2019: $2,000/month

January-June 2020: $2,500/month

July-November 2020: $3,000/month

December 2020: $1,239.29

Motion carried unanimously.

Pursuant to Iowa Code section 15.106, Pankaj Monga disclosed a conflict of interest and exited the meeting at 10:24 a.m. He did not participate in discussion or action regarding Higher Learning Technologies, Inc.  See the attached copy of written notice of the conflict.

Higher Learning Technologies, Inc.: Coralville – Request to Amend Contract Terms

MOTION: Mark Kittrell moved that the Economic Development Authority Board approve the recommendation by the TCC to approve the request that IEDA subordinate its UCC filing to a private lender that is providing a line of credit, seconded by Megan McKay.  Motion carried unanimously.

Pankaj Monga rejoined the meeting at 10:25 a.m.

Finkle & Sons d/b/a/ the Oh Ball:  West Des Moines – Request to Amend Contract Terms

MOTION: Chris Murray moved that the Economic Development Authority Board approve the recommendation of the TCC to defer the request for payment deferral until the July 2019 Board meeting, seconded by Mark Kittrell.  Motion carried unanimously.

Financial Assistance Applications

Future Line LLC: Cedar Rapids

MOTION: Megan McKay moved that the Iowa Economic Development Authority Board award a maximum of $107,250 in Investment Tax Credits; a maximum of $78,000 in Sales, Service and Use Tax Refund; and a maximum of $3,125 in Research Activities Credit, seconded by Chris Murray. Roll Call vote was taken. Motion carried unanimously.

Kraft Heinz Foods Company and Subsidiaries: Mason City

MOTION: Chris Murray moved that the Iowa Economic Development Authority Board award a maximum of $210,000 in Sales, Service, Used Tax Credits and a maximum of $22,500 in Research Activities Credit, seconded by Lisa Hull. Roll Call vote was taken. Motion carried unanimously.

Siculus, Inc.:  Altoona

MOTION: Megan McKay moved that the Iowa Economic Development Authority Board authorize the City of Altoona to utilize the Local Property Tax Exemption provision within the High-Quality Jobs Program, seconded by Chris Murray. Roll Call vote was taken. Motion carried unanimously.

Trinity Rail Maintenance Services, Inc.:  Butler County

MOTION: Lisa Hull moved that the Iowa Economic Development Authority Board award a maximum of $2,300,000 in Investment Tax Credit and a maximum of $1,195,000 in Sales, Service and Use Tax Refund, seconded by Chris Murray. Roll Call vote was taken. Motion carried unanimously.

Vermeer Corporation:  Pella

MOTION: Chris Murray moved that the Iowa Economic Development Authority Board award a maximum of $4,800,000 in Sales, Service and Use Tax Refund and a maximum of $990,000 in Research Activities Credit, seconded by Mark Kittrell. Roll Call vote was taken. Motion carried unanimously.

TCC Recommendations

            SBIR/STTR Outreach Program

            Parametric Studio, Inc.

            Ohana Vaccines

            College Raptor

            Solight Solar, Inc.

            SynderBio, Inc.

            Immortagen, Inc.

MOTION:  Mark Kittrell moved that the Iowa Economic Development Authority Board approve an award up to $50,000 to each of the businesses listed above, $25,000 upon receipt of SBIR/STTR award and $25,000 upon submission of Phase II proposal during the 12-month period after the date of the IEDA Board approval as recommended by the TCC, seconded by Chris Murray.  Motion carried unanimously.

Kino Sol SBC: Ames

MOTION:  Chris Murray moved that the Iowa Economic Development Authority Board approve the recommendation of the TCC to award a $25,000 Proof of Commercial Relevance (POCR) loan to be repaid through royalty payments of 3% of total gross revenue for a calendar year with each payment due June 1 of the following calendar year, seconded by Emily Schmitt.  Motion carried unanimously.

KCR2, LLC d/b/a/ Time ReDesigned:  Johnston

MOTION:  Chris Murray moved that the Economic Development Authority Board approve the recommendation by the TCC to deny the application for a $100,000 Demonstration Fund award, seconded by Megan McKay.  Motion carried unanimously.

MC4L, LLC d/b/a TuitionFit:  Davenport

MOTION: Lisa Hull moved that the Iowa Economic Development Authority Board approve the recommendation by the TCC to deny the request for a $100,000 Demonstration Fund award and instead approve a $25,000 Proof of Commercial Relevance (POCR) loan to be repaid through royalty payments at 3% of total gross revenue for a calendar year with each payment due June 1 of the following calendar year, seconded by Doane Chilcoat.  Motion carried unanimously. 

            ClinicNote, Inc.: Des Moines

MOTION:  Chris Murray moved that the Iowa Economic Development Authority Board accept the recommendation of the TCC to deny the application for a $117,000 Innovation Acceleration Propel award, seconded by Megan McKay.  Motion carried unanimously. 

            Ag Manufacturing and Technology: Prole

MOTION:  Chris Murray moved that the Iowa Economic Development Authority Board approve the recommendation of the TCC to award a $250,000 Innovation Acceleration Propel Loan contingent upon securing a $500,000 match and hiring a CEO to be repaid through royalty payments paid back at 3% of total gross revenue for a calendar year with each payment due June 1 of the following calendar year, seconded by Megan McKay.  Motion carried unanimously.

            VIDA Diagnostics, Inc.: Coralville – Request for Innovation Acceleration Expansion Loan

MOTION: Chris Murray moved, seconded by Mark Kittrell, that the Economic Development Authority Board approve the recommendation by the TCC to award a $500,000 Innovation Acceleration Expansion loan contingent upon documenting a match of $1 million and execution of a negotiated distribution agreement with Nuance to be repaid through royalty payments with terms as follows:

  1. Repayment amount is 1.5 times the award amount paid back at 1% of total gross revenue for a calendar year capped at $50,000 per year, with each payment due June 1 of the following calendar year.
  2. Full lump sum repayment of the loan required upon closing one or more funding rounds, the aggregate total of which is $5 million or more, subsequent to the pending $2 million raise. The amount of repayments is based on the length of time since IEDA disbursed funds:

- Less than two years since disbursement: 1.1 times loan amount

- Less than three years since disbursement: 1.2 times loan amount

- Less than four years since disbursement: 1.3 times loan amount

- Less than five years since disbursement: 1.4 times loan amount

- Five or more years since disbursement: 1.5 times loan amount.

Motion carried unanimously.

REAPPOINTMENT OF IOWA INNOVATION COUNCIL MEMBERS

MOTION: Chris Murray moved, seconded by Doane Chilcoat, that the Iowa Economic Development Authority Board reappoint the following eight members to the Iowa Innovation Council as recommended by the IIC Executive Committee: 

  1. Curt Carlson, President and CEO, Body Viz
  2. Mark Darrah, President and CEO, AthenaGTX
  3. Emily Schmitt, General Counsel, Sukup Manufacturing Company
  4. Susie Thomann, V.P., Retirement and Investor Services, Principal Financial
  5. Kevin Gaul, Director Advanced Technology, Industry Affairs, Pella Corp.
  6. Peter Hong, COO, New Tech Ceramics
  7. Susan Wood, President and CEO, VIDA Diagnostics
  8. Allen Bierbaum, VP Technology, Priority 5 Holdings, Inc., seconded by Doane Chilcoat.

Motion carried unanimously.

REINVESTMENT DISTRICTS

Sioux City

MOTION:  Chris Murray moved, seconded by Mark Kittrell, that the Iowa Economic Development Authority Board approve the recommendation of the DDC to approve amending contingencies as follows:

Extend the deadline from December 31, 2018 to May 30, 2019 for the City of Sioux City to approve a final construction contract for the Ag Expo and Learning Center Project;

Extend the deadline from September 30, 2018 to December 20, 2018 for the City of Sioux City to provide documentation that construction financing has closed for the Davidson/Warrior Project; and

Extend the deadline from December 31, 2018 to April 10, 2019 for the City of Sioux City to provide documentation that that construction financing has closed and a development agreement has been executed for the additional hotel component of the Virginia Square Project.

Roll call vote was taken.  Motion carried unanimously.

Mason City:

MOTION: Chris Murray moved, seconded by Lisa Hull, that the Iowa Economic Development Authority Board amend contingencies to the following:

Continue to provide weekly updates to IEDA staff until construction has started on the Downtown Hotel project;

By March 1, 2020, submit to IEDA a commitment letter or other documentation to the IEDA Board that acceptable construction financing has been secured for the Downtown Hotel and a copy of the fully executed Purchase, Sale and Development Agreement between the City of Mason City and Gatehouse;

By January 23, 2020 document that lease agreements have been executed for the Sport/Entertainment/Retail Complex; and

If it is determined that it is necessary to obtain approval of an amended plan, submit a proposed amended District Plan by September 30, 2019.  Roll Call vote was taken.  Motion carried unanimously.

BROWNFIELD AND GRAYFIELD REDEVELOPMENT TAX CREDIT PROGRAM

            Siouxland Expo Center 17-BTC-02

MOTIONChris Murray moved that the Iowa Economic Development Authority Board approve amending Contract 17-BTC-02 to extend the project completion period from 30 to 45 months, seconded by Lisa Hull.  Motion carried unanimously.

Dolly James 2, LLC  17-BTC-09

MOTION:  Lisa Hull moved that the Iowa Economic Development Authority Board approve amending Contract 17-BTC-09 to extend the project completion period from 30 to 50 months, seconded by Chris Murray.  Motion carried unanimously.

Grand Investments, LLC  17-BTC-11

MOTION:  Chris Murray moved that the Iowa Economic Development Authority Board approve amending Contract 17-BTC-11 to extend the project completion date from 30 to 45 months, seconded by Doane Chilcoat.  Motion carried unanimously.

Progression, LC  17-BTC-18

MOTION:  Emily Schmitt moved that the Iowa Economic Development Authority Board approve amending Contract 17-BTC-18 to extend the project completion date from 30 to 36 months, seconded by Chris Murray.  Motion carried unanimously.

Re-allocation of Tax Credits

MOTION: Chris Murray moved that the Iowa Economic Development Authority Board approve the Brownfield Advisory Council recommendations for reallocation of Fiscal Year 2019 Tax Credits, seconded by Megan McKay.  Motion carried unanimously.

Innovation Fund Investment Tax Credit Program

MOTION: Chris Murray moved that the Iowa Economic Development Authority Board approve Applications for Issuance of 29 Tax Credit Certificates, seconded by Doane Chilcoat.  Motion carried unanimously.

Amendments to Rules

            Workforce Housing Tax Incentives Program  

MOTION: Chris Murray moved that the Iowa Economic Development Authority Board adopt Amendments to 261 IAC Chapter 48 Workforce Housing Tax Incentives Program, seconded by Megan McKay.  Motion carried unanimously.

Innovation Fund Tax Credit Program and Targeted Jobs Withholding Tax Credit Program

MOTION:  Mark Kittrell moved that the Iowa Economic Development Authority Board adopt Amendments to the Targeted Jobs Withholding Tax Credit Program rules 261 IAC 71.4, and the Innovation Fund Tax Credit Program rules, 261 IAC Chapter 116, seconded by Chris Murray.  Motion carried unanimously.

Regional Sports Authority Districts

MOTION:  Chris Murray moved that the Iowa Economic Development Authority Board adopt Amendments to Regional Sports Authority District Rules, 261 IAC 38.3 and 38.4, seconded by Megan McKay.  Motion carried unanimously.

Brownfield Redevelopment Program Rules

MOTION:  Chris Murray moved that the Iowa Economic Development Authority Board adopt Amendments to Brownfield and Grayfield Redevelopment Program Rules, 261 IAC 65.8 and 65.11, seconded by Doane Chilcoat.  Motion carried unanimously.

Community Attraction and Tourism Program

MOTION:  Mark Kittrell moved that the Iowa Economic Development Authority Board adopt Proposed Amendments to the CAT Program Administrative Rules and rules pertaining to the Enhance Iowa Board, 261 IAC Chapters 211 and 213, seconded by Chris Murray.  Motion carried unanimously.

Election of Officers and Committee Appointments

            Election of Chair and Vice Chair

MOTION:  Megan McKay moved that the Iowa Economic Development Authority Board elect Chris Murray to serve as Board Chair and Jennifer Cooper to serve as Board Vice-Chair effective upon adjournment of this meeting through the May 2020 Board Meeting, seconded by Lisa Hull.  Motion carried unanimously.

Appointment of Due Diligence Committee

MOTION:  Lisa Hull moved that the Iowa Economic Development Authority Board appoint Mark Kittrell and reappoint, Jennifer Cooper, Linda Crookham-Hansen, Lisa Hull, Megan McKay and Chris Murray to a six-person DDC effective upon adjournment of this meeting through the May 2020 Board Meeting, seconded by Megan McKay.  Motion carried unanimously.

Designate Board Representative to the Technology Commercialization Committee

MOTION:  Emily Schmitt moved that the Iowa Economic Development Authority Board designate Pankaj Monga to serve on the TCC effective upon adjournment of this meeting through the May 2020 Board Meeting, seconded by Mark Kittrell. Motion carried unanimously.

Appointment to the Brownfield Redevelopment Advisory Council

MOTION:  Chris Murray moved that the Iowa Economic Development Authority Board select Emily Schmitt to serve on the Brownfield Redevelopment Advisory Council, seconded by Lisa Hull.  Motion carried unanimously.

Finance Committee

MOTION:  Chris Murray moved that the Iowa Economic Development Authority Board appoint Lisa Shimkat and Tom Townsend to the Finance Committee through the May 2020 Board Meeting, seconded by Doane Chilcoat.  Motion carried unanimously.

Rules Review

MOTION: Chris Murray moved that the Iowa Economic Development Authority Board appoint Linda Crookham-Hansen to review proposed rules through the May 2020 Board meeting, seconded by Megan McKay.  Motion carried unanimously.

Fiscal Year 2020 Tax Credit Allocation

MOTION:  Mark Kittrell moved that the Iowa Economic Development Authority Board allocate the tax credit limits for programs including: High Quality Jobs Program, Workforce Housing Tax Credit Program; Brownfield Redevelopment Tax Credit Program; Innovation Fund Tax Credit Program; and Renewable Chemical Production Tax Credit Program, seconded by Chris Murray.  Motion carried unanimously.

Vendor and Contract Maximum Approval

MOTION:  Chris Murray moved that the Iowa Economic Development Authority Board authorize IEDA to enter into contracts for Fiscal Year 2020 with professional service providers and set a maximum amount to be paid to each contractor, seconded by Megan McKay.  Motion carried unanimously.

Other Business

The next IEDA Board meeting will be held on Friday, June 21, 2019 at 9:30 a.m.

Adjournment

There being no further business at the meeting of the IEDA Board,

MOTION: Mark Kittrell moved that the IEDA Board adjourn, seconded by Lisa Hull. Motion carried unanimously. Meeting adjourned at 11:19 a.m.

Melanie King                                          Jennifer Cooper

Board Administrator                               IEDA Board Chair

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