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Home My WebLink About2008-03-19 PACKET 04.A.i.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # DATE 03/19/2008 = « � . PREPARED BY: Finance and Administrative Services Ryan Schroeder ORIGifVATIfVG DEPARTMENT STAFF AUTHOR 'k :F 'k 'k # �F 'k :F �F :F :F W 'k :Y :F Y: :Y :F Y: :F :F * fF � :F :F k :F :F :F 'k :F :F :F :F * :F f: :k :F :F * Y: t :k fF k :F COUNCIL ACTION REQUEST: Accept and place on file the February 2008 Economic Deveiopment Authority Minutes. STAFF RECOMMENDATION: Accept and place minutes on file. BUDGET IMPLICATION: $ BUDGETED AMOUNT ADVISORY COMMISSION ACTION: ❑ PLANNING ❑ PUBLIC SAFETY ❑ PUBI.IC WORKS ❑ PARKS AND RECREATION ❑ HUMAN SERVICES/RIGHTS � ECONOMIC DEV. AUTHORITY ❑ SUPPORTING DOCUMENTS: DATE ❑ MEMO/LETTER: ❑ RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATiON: � OTHER: EDA Minutes: 02/08 ADMINISTRATORS COMMENTS, $ ACTUA� AMOUNT FUNDING SOURCE REVIEWED ❑ ❑ ❑ ❑ ❑ � ❑ APPROVED ❑ ❑ ❑ ❑ ❑ � ❑ DENIED ❑ ❑ ❑ ❑ ❑ ❑ ❑ � �ia �08 Date ��.��,��,��,��.� COUNCIL ACTION TAKEN: `� APPROVED ❑ DENIED ❑ OTHER CITY OF COTTAGE GROVE �CONOMIC DEVELOPMENT AUTHORITY MINUTES February 12, 2008 Pursuant to due call and notice thereof, a regular meeting of the Economic Development Authority was held at City Hall, 7516 80th Street South, Cottage Grove, Minnesota on the 12th day of February 2008. CALL TO ORDER The meeting was called to order at 7:33 a.m. by EDA Secretary / Treasurer Gerry Weingartner. RO�L CALL Members Present: Fred Luden, EDA President (appointed on this date) Tony Jurgens, EDA Member Paul Poncin, EDA Member Mayor Sandy Sheily, EDA Vice President (appointed on this date) Gerry Weingartner, EDA Secretary / Treasurer (re-appointed on this date) Sara Westall, EDA Member Members Absent: Jim Wolcott, EDA Member (resigned) Others Present: Howard Slin, Community Development Director Joe Fischbach, Management Analyst Ron Hedberg, Director of Finance & Administrative Services Ryan Schroeder, EDA Executive Director Kenneth Smith, Management Analyst Jesse Swenson, Management Analyst APPROVAL OF MINUTES A motion was made by EDA Secretary / Treasurer Winegartner to approve the December 11, 2007 Economic Development Authority minutes. Seconded by EDA Member Jurgens, Ali Present in Favor. Economic Development Authority - Minutes February 12, 2008 Page 2 Election of Officers Executive Director Schroeder informed the EDA that they must elect new officers. He informed them that the President and Vice President must be Councii Members. The Board nominated and approved Council Member Fred Luden as EDA President and Mayor Sandy Shiely as EDA Vice President. EDA Secretary / Treasurer Gerry Weingartner was nominated and approved for another term as Secretary / Treasurer. DEVELOPMENT UPDATE EDA Executive Director Schroeder gave the EDA a development update. He remarked the City Council has awarded contracts for various portions of the Ice Arena expansion project and that the project is scheduled for completion on or about September 1, 2008. He also said there will be a groundbreaking ceremony on March 5`" 2008 at 4:00 p.m. at the Ice Arena. He explained that there was a bid today for the 2008 pavement management project. The Councii will award this bid on February 20 which will consist of pavement reclamation with scattered improvements to utilities, parks and trails. In January, 2008 the Councii received preliminary results from the joint City/County transportation study which looked at conceptual roadway alignments for a potential future cross- town roadway south of highway 61 from Cty Rd. 19 west to the City border with St. Paul Park/Grey Cloud Island Township. EDA Member Jurgens asked if they looked at the East Point Douglas side. EDA Executive Director Schroeder answered yes. EDA Executive Director Schroeder spoke about the ongoing development construction projects and asked if anyone had questions about them, EDA Vice President Shiely inquired as to what the Blair building was. She was informed it was the former athletic club. EDA Executive Director Schroeder presented information on 2007 building permit data. In totai the City issued 67 new single family home permits at a value of $326,809. Per unit values are up 21% from the prior year and 60% from 2005. All told the City finished the year with $75,935,840 in activity which was down only 7.2% from an average of the prior four years and 12.7% below the average of the past six, due to 2001-02 high years. It was noted that the two senior housing projects (Norris Square and White Pines) heiped our permit numbers. United Properties Market Outlook On the subject of the published United Properties Market Outlook EDA Executive Director Schroeder reported that as with virtually all recent market projects the outiook is lukewarm with some submarkets or product categories trending up but most are flat or trending down. However he noted that industrial land properties are escalating. A good year in multifamily housing market is expected due to failout from the sub prime problem. EDA President Luden noted that we had a good stock of affordable housing. Community Development Director Blin stated that we had 220 in our residential lot inventory, He also felt that once the market comes back activity should occur in Cottage Grove first because Washington County as a whole has fewer affordable lots. EDA President Luden asked what our lead time is, and was told 18 months. EDA Vice President Shiely inquired as to what can be done about retail vacancies. � Economic Development Authority - Minutes February 12, 2008 Page 3 EDA Executive Director Schroeder stated that it is private sector problem connected to zoning and their determination whether or not locating is a good business idea. He noted that smaller retail foot prints have spun off larger projects like Kohl's. EDA Member Jurgens noted that the Goodwill Center is full. Management Analyst Jesse Swenson informed him that there is 1000 sq. ft. available. Member Jurgens suggested that it wouid be good to use existing retail space before adding new space. President Luden asked Jesse to look into what is the cost per square foot other cities (like Woodbury) charge compared to us. Tax Capacitv Per Capita Comparison This item was brought before the EDA for informational purposes only. Executive Director Schroeder explained that the tax capacity is the measure on which cities create revenue. Cottage Grove has a long history of a relative lack of property weaith. This is due to the development pattern that occurred within the community from the late 1950's when we had moderate priced homes with minimal commercial and industrial development. The Council's goal is to ratchet up property wealth. He reviewed Cottage Grove's tax capacity history and noted that we have moved up from last to 6`" from the bottom of like cities. He noted it is unlikely we will go from last to first because we have 10,000 or so moderately priced houses. EDA President Luden asked about factoring taxable value out when doing projections. EDA Member Westail recommended we be patient as a City and stick to the plan for larger houses. President Luden asked if we saw growth in 2004 — 2007 because of property valuation or tax capacity. Mr. Schroeder replied both (a happy accident). EDA President Luden suggested we spend more time this year on analysis to get to where we want to be. EDA Executive Director Schroeder noted that tax data is always lagging in time. EDA Vice President Shiely agreed with Member Westall that we shouid be patient and stick to our housing plan. Industrial Park Land Pricinp This item required 4he Board to acknowledge the Industrial Park land pricing for 2008. EDA President Luden called the vote and EDA Secretary / Treasurer Weingartner made the motion and it was seconded by EDA Member Pouncin to acknowledge the bare land cost increases. It passed unanimously. EDA Executive Director Schroeder reviewed the memo. Some land pricing highlights were: 1. 95`" St. property west of the OPUS option parcel and east of the future Ideal storm pond: $2.25/ square foot (plus there is expected to be on $.50/ square feet assessment on this property when the City constructs the adjacent storm pond resulting in an actual cost of $2.75. 2. Hemingway parcel was acquired at $1.75 per square foot 3. Jamaica Ave. property was acquired at $2.00 per square foot EDA Executive Director Schroeder mentioned that the land owned by OPUS not in the Memo. They will sell 14 acres to the City. 3 Economic Development Authority - Minutes February 12, 2008 Page 4 2008 Housinq Market EDA Executive Director Schroeder stated that this while we may believe that all real estate is local we endeavor to pay attention to larger regional and national trends in adjudging Iocal relationships or impacts of broader trend data on the local market. While the EDA does not focus on issues strictly related to housing the housing market does impact other development market segments (retail and industrial trends in particular). Moreover, as the City Council forecast where future resources might be directed, financial impacts upon the City driven by the housing market will play a role. Housing market info from the Minneapolis Association of Realtors, National Association of Realtors memo on Housing Market, Freddie Mac and the Wachovia Group were presented. Some findings included: 1) Closed sales prices in Cottage Grove in 2007 were 5.64% below those from 2006 with the sales price declining 2.36%. 2) Inventory of listed single family homes in Cottage Grove is up 24.5% from 2006. 3) The NAR is projecting slight market value increase in 2008 after a drop in 2007 with an increase in sales of existing housing stock in 2008. 4) Freddie Mac reported that housing starts deciined by 13% nationally from 2005 to 2006 and another 27% in 2007. 4) Wachovia conducted foreclosure reporting and noted that foreclosures are highest in states with active investor purchasing, which includes Minnesota. The sunny side of the street wouid project flat market value growth for residential properties with value increases realized for new construction and commerciai price appreciation. EDA Executive Director Schroeder predicts a 2% to 3% annuai inflationary increase in taxable values. No EDA action was required with this item. Multiple Tenant Retail & Office Vacancv Rates This item is for information only and was presented by Jesse Swenson. Ms. Swenson reported that existing vacancy rates for multiple tenant retail and office locations are listed below with the total amount of square feet and total amount of square feet that is vacant. Totai Vacant Percent Retail 309,006' sq. ft. 47,544 sq. ft. 15% Office 136,068 sq. ft. 39,366 sq. ft. 29% Inciudes only multiple tenant space The retail portion excluded big box retailers such as Home Depot, Rainbow Foods, Cub Foods, Target, and Kohl's. The retail vacancy rate of 15 percent compares with a metro wide average of approximately 8 percent. Community Director Howard Blin added that you don't want a zero vacancy rate. You always want space to attract new businesses. EDA Member Westall commented that too many empty retail stores just looks bad and sends the wrong message about the health of the community. EDA Vice President Shiely concurred. -t Economic Development Authority - Minutes February 12, 2008 Page 5 EDA Goif Tournament Update Management Analyst Jesse Swenson reported to the Board that on February 1, 2008 the EDA golf tournaments "save the date" post cards were mailed to over 1400 EDA contacts. Bruce Anderson, Golf Manager is gathering price quotes on several possibie golf tournament gifts to give each of the golfers at the tournament. No EDA action was required. 5`" Annual Business Showcase Ms. Swenson reported to the EDA that she had been working on the Business Showcase and to mark their calendars for the Thursday, March 27` from 4:30 - 7:30 PM at the Cottage Grove Armory (8180 Belden Boulevard). All are invited to learn more about their favorite local businesses and discover some new favorites from the Cottage Grove, Newport, and St. Paul Park area. The Business Showcase will feature free admission, free refreshments, give-aways, door prizes, and dozens of locai businesses. Last year an impressive 52 vendors participated in the event representing various businesses and this year the Planning Committee has set a goal of 50 vendors. In 2004 the EDA sponsored for $200 In 2005 the EDA sponsored for $200 In 2006 the EDA sponsored for $275 (included was a booth for the Golf Course) In 2007 the EDA sponsored for $275 (included was a booth for the Golf Course) The Cottage Grove Area Chamber of Commerce would greatly appreciate the continued support of the EDA for this year's event and asks the EDA consider supporting this event through sponsorship. Option 1: $200 sponsorship with no booth Option 2: $275 sponsorship with booth for the Golf Course Option 3: No sponsorship EDA Vice President Shiely suggested that the booth be shared between the Golf Course and the ice Arena and that they do the $275 sponsorship. EDA Vice President Sheily asked that a motion be made, EDA Secretary / Treasurer Weingartner made the motion and it was seconded by EDA Member Pouncin and passed in favor by all present. Annual Business Recoqnition Breakfast Ms. Swenson reported to the EDA that the date of Tuesday, March 25`" has been reserved for the Annual Business Recognition Breakfast held at 3M Cottage Grove. The invitation for the event will be mailed this month to Cottage Grove, Newport and St. Paul Park businesses. The speaker at this year's event is David Olson, President of the Minnesota Chamber of Commerce. The Minnesota Chamber represents over 2,600 Minnesota companies, 130 local chambers and 65 business trade associations at the Minnesota �egislature on a variety of Economic Development Authority - Minutes February 12, 2008 Page 6 issues that impact Minnesota's economy. We have asked Mr. Olson to focus his presentation on retaining current businesses and recruiting new businesses to our community, and to offer his vision of business growth in the east metro area. No action was required on this item. C�3\w��17\:7 Management Analyst Joe Fischbach, reminded the EDA members of upcoming meetings and events. He noted that the Volunteer Banquet, which will be held April 22, 2008 at River Oaks Golf Course, was not on the Calendar and would be added. MISCELANEOUS BUSINESS ITEMS Commission Appointments With the resignation of EDA Member Wolcott there is an opening on the EDA. Severai candidates have submitted their names and EDA President Luden, EDA Vice President Shiely and EDA Executive Director Schroeder will conduct interviews and recommend a candidate for Council ratification. Joint Council and EDA meetinq EDA Executive Director Schroeder stated that each year the Council meets with each Commission to check in and discuss hot button items. He asked the EDA when they want to meet with the Council. EDA President Luden suggested that staff pick two dates and see if they work for EDA members. Aii agreed with this suggestion. EDA Tuxedo Adds 2008 Director Schroeder informed the EDA that this campaign has not sent out marketing materiais in over two years and that the City Council thinks iYs time to do it again. EDA Vice President Shiely remarked that the original campaign was an award winning campaign. It was noted the Director Blin's first day of employment with the City was shooting the campaign. EDA Annual Report Mr. Fischbach, told the EDA that they now had a draft of the 2007 EDA Annual Report. He asked them if they saw anything that jumped out at them that he should change. Hearing no comments, he suggested they review the document and email him any changes or suggestions they might have. EDA President Luden asked Executive Director Schroeder was there one thing they were trying to highlight in the EDA Annual Report. EDA Executive Director. Schroeder replied nothing in particular, just that the City is in growth position. EDA Executive Director Schroeder mentioned that the City's Annual Report would be out this month. Management Analyst Ken Smith informed the EDA that they were shooting for a distribution date of February 18, 2008. 6 Economic Development Authority - Minutes February 12, 2008 Page 7 EDA Vice President Shiely, explained to the EDA why only the EDA President and Vice President are Council members. First, the Council wanted more input from business people and the generai public, offering five seats was a way to do this. Secondly, it was a big job for the Council to handle with their other responsibilities, especially in light of the amount of development that was going on in the past few years. Thirdly, no one on the Council feeis the EDA is doing things they don't know about. EDA Member Westall asked what the EDA's role should be. EDA Vice President Shiely replied, exactly what you are doing. Member Jurgens remarked that he liked the setup the way it was. EDA Secretary / Treasurer Weingartner informed the Board that he would be out of town next month and would miss the next meeting. le\�1�[�1q:7�1 EDA President Luden moved to adjourn the meeting. Seconded by EDA Member Jurgens, All Present in Favor, the meeting adjourned at 8:40 AM. Respectfully Submitted, Kenneth Smith Management Analyst