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HomeMy WebLinkAbout2009-07-14 EDA MinutesCITY OF COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY MINUTES July 14, 2009 Pursuant to due call and notice thereof, a regular meeting of the Economic Development Authority was held at Cottage Grove City Hall, 7516 80 St. S., Cottage Grove, Minnesota 55016 on the 14th day of July 2009. CALL TO ORDER The meeting was called to order at 7:33 a.m. by EDA President Myron Bailey. ROLL CALL Members Present: Myron Bailey, EDA President Tony Jurgens, EDA Member Justin Olsen, EDA Vice President Paul Poncin, EDA Secretary /Treasurer Richard Remackel, EDA Member Chris Reese, EDA Member Members Absent: Sarah Westall, EDA Member Staff Present: Joe Fischbach, Management Analyst Ryan Schroeder, EDA Executive Director Ken Smith, Management Analyst Jesse Swenson, Management Analyst Howard Blin, Community Development Director Others Present: Bob Van Slyke, Senior Housing Partners Len Sutherland, VSI Construction, Inc. APPROVAL OF MINUTES A motion was made by EDA Secretary /Treasurer Poncin to approve the June 9, 2009 Economic Development Authority minutes. Seconded by EDA Member Jurgens, all present in favor. Economic Development Authority - Minutes July 14, 2009 Page 2 PHM Development Agreement Notice of Default EDA Executive Director Schroeder gave a brief history of the project. Presbyterian Homes was selected as the preferred developer. The EDA and the City entered a development agreement with Presbyterian Homes. Within the agreement, it was stated that the site would be cleared, environmental issues would be addressed, businesses would relocate or compensated if relocation did not occur, and a development to include a senior housing project and adjacent retail would be constructed. The housing portion was completed in December, 2007 and the commercial portion was to be completed by December 31, 2008. This latter requirement was not met by the developer. As a result, Presbyterian Homes was put on notice of development agreement default. The EDA can take a position to terminate, rescind, or suspend EDA performance and obligations under the agreement to include elimination of any obligation for financial performance. However, it would be preferable to work with the developer to resurrect the performance under the agreement. EDA Executive Director Schroeder asked the EDA for a discussion on the topic and or possible direction regarding the Norris Marketplace development parcel. Bob Van Slyke expressed his regret at having to come before the EDA. He stated that he had a long partnership with the City. He stated that the senior housing part of the project is a success but regretted that they have not been able to bring retailers to the site and emphasized that they are not experts in retail. Len Sutherland mentioned that they were close to closing with Aldi Grocery Store when Aldi backed out at the last minute. They also contacted CVS, Culvers, some banks, Health Partners and a day care provider. What they heard was that their site was on the wrong side of Hwy 61. Mr. Sutherland stressed that retailers were in a wait and see mood. They are being assisted by Christianson & Company Commercial Real Estate Service, to help market the site. An LOI was sent out yesterday. They contacted 250 retailers nationwide and some Mom and Pop type businesses as well. Mr. Sutherland mentioned that the dirt pile outside Norris Square would be gone by Friday. Also, they were planning to replace the silt fence, seed the dirt and grow grass. EDA President Myron Bailey asked if the members had any questions. EDA Vice President Justin Olsen asked what advice their new broker gave them. Mr. Sutherland replied they were told to look at alternative uses. He stated that he met with Howard Blin and Ryan Schroeder and discussed the possibility of sharing a City Center or the construction of a little hotel. He said he contacted the Chamber of Commerce. EDA Vice President Olsen asked is they advised him to remove the dirt pile. Mr. Sutherland replied in the affirmative. EDA Vice President Olsen asked what type of user profile did they identify? Mr Van Slyke stated they suggested quite a bit. He noted that the previous broker went to retailers of the world. EDA Vice President Olsen asked why Aldi backed out. Mr. Sutherland replied that they were on the wrong side of the road. EDA Vice President Olsen asked if they had conversations about building a connection or skyway between Norris Square and the retail site. Mr. Sutherland said they have not had any conversation about this but that they did talk about shared parking. He went on to say he would like to bring a Keys Restaurant. EDA Member Tony Jurgens asked Mr. Sutherland where the majority of Norris Square residents come from. He replied the majority are from Cottage Grove and the East Metro. Mr. Van Slyke warned that a restaurant so close to Norris Square would compete with the restaurant in Norris Square. EDA Vice President Olsen asked what type of businesses they were after with the latest Economic Development Authority - Minutes July 14, 2009 Page 3 LOI. Mr. Sutherland told him a service related business. EDA Member Tony Jurgens mentioned that a Mom and Pop type business seemed most suited for the space. EDA President Myron Bailey inquired as to the relevance of placing a nursing home on the site. Mr. Van Slyke stated that it was currently off the table. We looked at a small skilled nursing home facility but there were problems because of the state imposed moratorium on nursing home beds. EDA President Bailey asked the two gentlemen to include the City in any future conversations to share insight about Cottage Grove. He told them that the site clean up will be helpful. Mr. Sutherland stated that Community Development Director Howard Blin and his staff have been helpful when they come in with their plans. EDA Member Paul Poncin suggested that they not be too aggressive with restaurants. They could rearrange plot and put senior apartments or a nursing home to increase the population in the area to attract other businesses. EDA Member Chris Reese asked if there was a demand for senior housing. Mr. Van Slyke said they were pleased at the pace they were filling up. Brown Stone type housing was mentioned and Mr. Van Slyke replied that they were having problems accessing credit to build more senior housing. EDA Vice President Olsen asked the gentlemen if they were going to the ICIS meeting in Chicago. They said no. Mr. Van Slyke stated that developers don't visit the site when traffic is heaviest. EDA President Myron Bailey asked Executive Director Schroeder what he needs the EDA to do. Mr. Schroeder stated they could take a position to terminate, rescind or suspend EDA performance and obligations under the agreement to include elimination of any obligation for financial performance. EDA Member Poncin asked if we could get approval to sub divide the parcel. EDA Executive Director Schroeder mentioned there was no reason why it wouldn't make sense. EDA Vice President Olsen asked Community Development Director Howard Blin what his opinion was. He replied that it was a shame that the site hit the market at the wrong time. He thought it was tough right now to market that side of the road. He noted a lack of roof tops as you head west. He suggested that we reposition it beyond just retail. EDA Vice President Justin Olsen asked Executive Director Schroeder what the time line was. He replied the first payment was due next year. EDA President Myron Bailey asked Executive Director Schroeder to work with the two gentlemen and keep the EDA updated. He also stated that the nursing home and brownstone ideas were okay and he would try to get the City's legislative delegation to help. Executive Director Schroeder re stated that he was hearing they were open to site plans that included brownstones, nursing homes and targeted marketing. He believes the site is too small for a community center. EDA Member Richard Remackel told the EDA he liked the idea of service oriented businesses at the site. EDA Member Chris Reese brought up the idea of small medical clinics. Mr. Van Slyke mentioned that clinics are downsizing too in this economy. DEVELOPMENT UPDATE EDA Executive Director Schroeder gave the EDA a development update: Building Permits - New home construction is at 35 units of which 8 units were permitted in June. This compares to 42 units YTD in each of 2007 and 2008 which ended the year at 67 and 89 respectively. The per unit value is at $257,974 for the year with an average of $270,661 for the detached single family units of which there have been 29. Permit values for detached housing units are continuing at levels that would be considered strong in this market at an average of Economic Development Authority - Minutes July 14, 2009 Page 4 $270,661 which is down just 8% from 2008 production. 2009 per unit values are significantly above those of every year prior to 2006. Total construction activity through June, 2009 is at $22,004,313. Year to date, C/I permits are at $7,864,462 compared to the 8 year average of $15 BUSINESS LEADS EDA Executive Director Schroeder stated that PRI has outgrown its space and is working with Vanguard Construction. EDA Member Jurgens asked what on the list has the best chance of materializing. Executive Director Schroeder replied the top two, Cold Storage Warehouse and Industrial (Plastics). He noted that the bottom of the list represented our cold calls. EDA Member Jurgens asked how many jobs the top two represented. EDA Executive Director Schroeder stated he didn't know at this time. He stated PRI is looking for machinery and product storage space. MARKETING CAMPAIGN FOR COMMERCIAL, INDUSTRIAL AND RESIDENTAL BUILDERS AND DEVELOPERS This was an oral presentation with no handouts. Jesse Swenson, Management Analyst told the EDA that Howard Blin and she were meeting to finalize the application after today's meeting. They were waiting to hear from the Commerce Department to find out if Continuing Education credits were available for attendees. EDA President Myron Bailey told the EDA it was their intention to do a market campaign of the City and to take participants on a tour. He said our intention is to bring people to town and market the community. Community Development Director Howard Blin was asked what benefit this was to the City. He replied it would give a positive view of the City and show what we can do and what we have to offer. Executive Director Schroeder stated it was their intention to hand them something they could take away and use. Ms. Swenson stated that the material would be on a zip drive. GROWTH PARTNERS Each year since 2003, the EDA has been acknowledging development partners by presenting "Growth Partners Awards" at the annual golf outing (held this year on August 11, 2009 at River Oaks Golf Course). To date, 36 awards to 27 winners have been handed out. Executive Director Schroeder asked the EDA to participate in the award process by ranking the list of nominees. Final selection would be made by the EDA President. The nominees were: • Commercial / Industrial / Institutional: South Washington County Schools (owner), Kraus Anderson Construction (builder), Allina Clinic (Owner), Culvers Restaurant (owner) • Residential: K Hovnanian Homes, Lennar, McDonald Homes, Pulte Homes, • Architectural: 011man Ernest Architects, Krech, O'Brian Mueller & Associates, BDH & Young, Rego & Youngquist, RSP Economic Development Authority - Minutes July 14, 2009 Page 5 NEIGHBORHOOD STABILIZATION The EDA is requested to authorize a funding agreement with the Washington County Housing and Redevelopment Authority (HRA) for the Neighborhood Stabilization Program (NSP). The agreement calls for the EDA to provide up to $150,000 in funding to the HRA for use in the NSP. On January 13, 2009 the EDA approved providing the funding. The agreement requires the HRA to repay the EDA funding as houses are sold. For houses on which EDA funds are used, the City has the ability to select the houses to be acquired. It was recommended that the EDA authorize the President and Executive Director to execute a funding agreement with the HRA to provide funding for the NSP program. Community Development Director Howard Blin explained that the City could not direct bids to only local businesses. But he stated the City can make sure they know about the opportunity to bid. EDA Member Chris Reese asked how resale of the houses will be handled. Mr. Blin informed him the HRA would handle sale and resale of houses. A motion was made to approve the funding by EDA Member Richard Remackel and seconded by EDA Member Chris Reese. All were in favor except EDA Member Tony Jurgens who opposed the motion. The motion carried. EDA Member Tony Jurgens asked what other communities were doing. Mr. Blin informed EDA Member Jurgens that they were holding onto property until the market is better and then would resell. EDA Member Remackel noted that local developers would buy construction items at our local stores. BRU UPDATE EDA Executive Director Schroeder gave a BR &E update. ICSC 2009 CHICAGO CONFERENCE EDA Executive Director Ryan Schroeder informed the EDA it would cost about $1,200 to send someone to the ICSC meeting in Chicago. The meeting will take place on October 28 -30, 2009 at the Hyatt Regency in Chicago. Executive Schroeder asked if the EDA was interested in sending someone. EDA President Myron Bailey explained the purpose of the meeting is to market ourselves into certain communities. Funding would come from the EDA budget. He explained that other Cities will be there. EDA Vice President Olsen stated that there were four meetings per year throughout the country and the purpose was to schedule meetings, do meet and greet and show what your community has to offer. EDA Member Tony Jurgens asked what a reasonable goal would be. EDA Vice President Olsen replied that you talk to 100 persons to maybe get 10 to 20 meeting. EDA Member Jurgens stated he would like EDA President Myron Bailey and EDA Vice President Justin Olsen to go. EDA Member Tony Jurgens made a motion to send two people to the meeting. EDA Member Chris Reese asked if we could send three (possible Staff member) and seconded the motion. All were in favor. 2009 EDA GOLF TOURNAMENT UPDATE Management Analyst Swenson provided an update for the EDA. As of July 8, 2009 there were ten foursomes registered. There are a total of nine sponsors (1 bronze, 8 silver). Economic Development Authority - Minutes July 14, 2009 Page 6 CALENDAR The EDA members were reminded of upcoming meetings and events. MISCELLANEOUS BUSINESS ITEMS River Oaks Golf Course Update information was handed out by Management Analyst Ken Smith who stated he would have more up to date info at the next EDA meeting. It was noted that the specialty bread at River Oaks was not selling. ADJOURN EDA Vice President Justin Olsen moved to adjourn the meeting. Seconded by EDA Member Chris Reese, All present were in favor. The meeting adjourned at 9:28 AM. Respectfully Submitted, Kenneth L. Smith Management Analyst