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HomeMy WebLinkAbout2008-08-12 EDA MinutesCITY OF COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY MINUTES August 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 8th day of July 2008. CALL TO ORDER The meeting was called to order at 7:31 a.m. by EDA President Fred Luden. Rnl I CAI I Members Present: Tony Jurgens, EDA Member Fred Luden, EDA President Richard Remackel, EDA Member Paul Poncin, EDA Member Gerry Weingartner, EDA Secretary /Treasurer Sara Westall, EDA Member Members Absent: Sandy Shiely, EDA Vice President Staff Present: Ryan Schroeder, EDA Executive Director Ken Smith, Management Analyst Joe Fischbach, Management Analyst Jesse Swenson, Management Analyst Others Present: Bill Simoni Marathon Ashland Petroleum / Eco. Dev. Committee Member for the Cottage Grove Area Chamber of Commerce APPROVAL OF MINUTES A motion was made by EDA President Fred Luden to approve the July 8, 2008 Economic Development Authority minutes. Seconded by EDA Member Tony Jurgens, All Present in Favor. Economic Development Authority - Minutes August 12, 2008 Page 2 DEVELOPMENT UPDATE EDA Executive Director Schroeder provided the development update. Construction of the new Culver's restaurant on 80 St. and Hardwood Ave. is progressing well with an October opening projected. The US Bank retaining wall and sidewalk was completed in early August with the monument sign, restoration of the parking lot and landscaping to follow. He went on to say that the contractor working on The White Pines Senior Housing project is scheduled to turn over the building to the owner on August 26 The owner is suggesting that they are preparing a submittal for the second building but the City does not yet have a schedule for this second project. OPUS NW has walked away from the project and no longer has the 15 acres at Jamaica Ave. and 95 St. under contract. They continue to have an option on the remainder of the WAG Farms property west of Jamaica through August 2010. On August 4 th , Werner Electric Minnesota held its grand opening ribbon cutting. They held similar events for the community throughout the week which included tours for about 150 people. Zitzloff Auto Body's new building on 95 St. is nearing completion. It should be completed in the next couple of months. The former Home Depot location is attracting interest from developers. It is anticipated that a development proposal may come forward to the EDA. EDA President Fred Luden asked Executive Director Schroeder what the City's role is. Executive Director Schroeder explained that the City's role is to facilitate the process. Home Depot is marketing the land. The City could provide small site improvements. EDA Member Toni Jurgens asked if Home Depot owns the land. Executive Director Schroeder replied yes. The Ice Arena project is on schedule with completion date scheduled for September 2008. He also said it was fascinating to watch the construction and the hockey co -exist in the same area. In terms of building permits, the 15 new home permits issued during July was the highest single month since October 2006 and the third consecutive month above 2007 permit levels. However, permit values for permits issued in July dropped. Executive Director Schroeder wasn't sure why permits were up. It was remarked that individuals can get more house for the money in Cottage Grove than in some other communities. BUSINESS RETENTION AND EXPANSION EDA Executive Director Schroeder explained that the list is an ongoing compilation of activity surrounding business retention and expansion. EDA President Luden asked if there was any activity at the old golf dome site. Executive Director Schroeder said there was nothing at this time. Community Director Howard Blin speculated that the owners of the property were holding onto the land for a better deal. EDA member Sara Westall inquired as to whether business activity was low or is this "normal". She was informed that the retail side of business is slow when compared to past years. President Luden asked how EDA members should respond to questions about Gold's Gym. Director Schroeder stated that the EDA took no formal action on the plan and just gathered facts. EDA President Luden was interested in establishing a procedure to clarify the boards action on any given issue. He also stated that he would like to see something about the quality of jobs that come with new proposals, such things as health benefits, wages and job training. Also, a capital component listing how much the City's investment is going to be. EDA member Richard Remackel agreed the information would be helpful. EDA member Westall asked if the City had goals. Executive Director Schroeder replied Economic Development Authority - Minutes August 12, 2008 Page 3 yes and mentioned the EDA Strategic Plan. EDA member Tony Jurgens remarked that primary plants bring secondary jobs to a community. COTTAGE GROVE TRAINING CENTER On the issue of the Center for Professional and Workforce Development, EDA Executive Director Schroeder directed Board attention to the support letter in the packet material. He noted that the training center is in the hands of Inver Hills Community College and they were responsible for marketing. COMMERCIAL VACANCY REPORT Community Development Director Howard Blin informed the EDA that he would be updating this document on a regular basis. This report was created to determine the amount of vacant commercial space in Cottage Grove. The retail rate in the city is 16 percent vacancy, compared with approximately 8 percent for the region. Most of the retail vacancy, however, is due to the vacant Home Depot building. Occupancy of the Home Depot site would bring the overall Cottage Grove rate down to 6 percent. Total office vacancy in Cottage Grove is 18 percent of the total space, compared with a rate of 15 percent in the region. Approximately, one half of all vacant office space is in one building, the Summerhill Professional Office Building located at 70 St. and Hinton Avenue. They are on a 3 — 4 year lease -out. EDA President Luden mentioned that Staples will be opening a store near Sam's Club in Woodbury. EDA member Jugens stated that a 16 percent vacancy is lower than what people perceive. CONSTRUCTION and INFRASTRUCTURE UPDATE EDA Executive Director Schroeder informed the EDA that the attached Power Points on new construction and infrastructure in Cottage Grove were presented to staff at July's Third Thursday by Community Development Director Howard Blin and City Engineer Jennifer Levitt. It is similar to the Development Update to help members get a handle on this year's activities. Much of the building activity is the result of 2007 deals. It was noted that a lot of the activity was due to School District 833. EDA President Luden commented it was good to have construction on the education side. He also wanted to know if the Ice Arena grand opening date had been set. EDA Executive Director Schroeder said not at this time and that a date would be picked closer to opening day. UPDATE ON FORECLOSURES EDA members viewed Power Point presentations shown to EDA Executive Director Schroeder at an earlier meeting which included information on the current state of foreclosures in Minnesota. In summary, the Twin Cities is driving much of the increase. Foreclosures are not just in the central cities. One of every 5 loans is currently delinquent, there are more REOs than foreclosures. Half of all subprime loans with ARM features have yet to reset. Many Alt -A loans (60 %) with ARM features have yet to reset. Housing prices have not helped the situation with Minnesota comparing to other states by being in a second tier of states with mortgage concerns. Economic Development Authority - Minutes August 12, 2008 Page 4 He went on to state that much of the discussion centered on what municipalities can do about foreclosures, or should the market take care of the problem? According to Community Development Director Blin, there are 160 foreclosures in Cottage Grove. EDA Executive Director Schroeder noted that there is a new round of foreclosures coming just as EDA member Poncin predicted some months ago. Community Development Director Blin also noted that many of the foreclosures in Washington County, according to their HRA, are due to unemployment. EDA member Jugens suggested that if a home appears empty the City should monitor that house to make sure it doesn't look bad. Community Development Director Blin concurred and stated the hard part is finding out who is responsible for the house. His inspectors were checking on these houses. EDA Executive Director Schroeder noted that community land trusts are buying properties, fixing them up and reselling while retaining ownership of the land the property is on. Community Development Director Blin informed the EDA that a Bill is heading to the Legislature to help with the problem. EDA Executive Director Schroeder stated that the past legislative session had a bill that dealt with water and electricity shut -offs. EDA member Jurgens wondered if educational institutions had programs that allowed students to work on these foreclosed homes to fix them up and perform maintenance. MINNESOTA DOT LAWS 2008, CHAPTER 152 UPDATE (LMC) EDA Executive Director Schroeder discussed the key points of the legislation and stressed the impact the legislation would have on local bridges. The legislatively mandated bridge program is currently estimated at 2.5 billion dollars over 10 years. According to MNDOT, once the bridges in our area are fixed there are not plans to replace or repair bridges in the southeast metro for the next 30 years. EDA GOLF TOURNAMENT UPDATE Management Analyst Swenson reported that the 2008 13 annual EDA golf tournament on Tuesday, August 12 at River Oaks Golf Course is shaping up to very successful. Currently, 104 people have singed up for the golf outing, including one platinum sponsor, three gold sponsors, 13 silver sponsors, and one bronze sponsor, totaling 18 sponsors. Dinner following play will be at 5:30. The premium is a golf hat and a golf ball marker hat clip. The banquet dinner will feature the winners of the Growth Partners Award's, the many hole contests, and raffle prizes. CALENDAR The EDA members were reminded of upcoming meetings and events. MISCELANEOUS BUSINESS ITEMS A. Blue Vessel - EDA Executive Director Schroeder outlined the lien issue for the EDA, and stated the goal of the City was to get out of the middle of the mechanics lien actions. EDA member Westall explained that this issue was about her company and stated that her lawyers were working to resolve the issue. Economic Development Authority - Minutes August 12, 2008 Page 5 B. News Articles — the EDA discussed the articles included in the packet. It was noted that the Starbucks in Cottage Grove was not one of the stores slated for closure. EDA member Paul Poncin asked about administrative costs associated with the utility water bill now that we are on monthly billing. The information would be forwarded to him and it was noted that water use and delinquencies are down. Management Analyst Swenson noted that it was easier to track house vacancies through delinquent water bills. EDA Executive Director Schroeder explained that there is a late fee associated with delinquencies. EDA President Luden brought up the closing process for Blackies in Oakdale and noted that we should know that process in order to deal with the "Rush." EDA member Jurgens asked how the City's marketing efforts were doing. EDA Executive Director Schroeder said that we did not have any new prospects yet as a result of the mailer. Management Analyst Swenson reported that 1,200 post cards and 600 letters were sent out. It was asked if as a result of the Cogentrix plant that we had a marketing advantage. Community Development Director Blin explained that we could feed electricity to the industrial park from two directions. EDA member Westall noted that she is selling more products to Cottage Grove residents who state they are proud her company is here. ADJOURN EDA President Luden moved to adjourn the meeting. Seconded by EDA Secretary /Treasurer Weingartner, All Present in Favor. The meeting adjourned at 8:40 AM. Respectfully Submitted, Kenneth L. Smith Management Analyst