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HomeMy WebLinkAbout2009-08-11 EDA MinutesCITY OF COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY MINUTES August 11, 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 11th day of August, 2009. CALL TO ORDER The meeting was called to order at 7:30 a.m. by EDA Vice President Justin Olsen. ROLL CALL Members Present: 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 Myron Bailey, EDA President Staff Present: Joe Fischbach, Management Analyst Ryan Schroeder, EDA Executive Director Ken Smith, Management Analyst Jesse Swenson, Management Analyst Howard Blin, Community Development Director APPROVAL OF MINUTES A motion was made by EDA Member Tony Jurgens to approve the July 14, 2009 Economic Development Authority minutes. Seconded by EDA Member Paul Poncin, all present in favor. Development Update EDA Executive Director Ryan Schroeder informed the EDA about Building Permit Activity. New home permits are now at 45 for the year after adding 10 in July. Total residential permit value is at $11,503,807 for a per unit average of $255,640 with a single family detached unit value at 269,224 for 37 new homes. We are currently on the same pace as 2007 construction which Economic Development Authority - Minutes August 11, 2009 Page 2 ended the year with 67 new attached or detached single family homes. Total permit value through July is at $26,729,220. At about half the pace of 2007/8 that would suggest a year -end total permit value perhaps in the $35 to $40 million range. EDA Executive Director Schroeder went on to state that two properties where available for acquisition: Langdon Land -the former Majestic Ballroom property at 9165 West Point Douglas Road South is listed at 9.26 acres (403,504 SF) at $5 per square foot ($2,017,520). It has a taxable market value (pay 09) of $1,053,700. The adjacent property at 8811 West Point Douglas (Auto Repair facility and adjacent residential property) is offered at $789,000 for 106,962 square feet (2,456 acres). It has a taxable market value (pay 09) of $559,400. EDA Director Schroeder asked the EDA for their level of interest in acquiring the parcels. EDA Member Tony Jurgens said it would make sense to move these properties. EDA Member Richard Remackel stated the Red Rock Railroad was coming through. EDA Vice President Justin Olsen asked what the pros and cons of such a purchase would be. EDA Executive Director Schroeder stated both parties are sellers today and tomorrow. In the future, the Majestic property could be difficult to acquire while the other property would be easier. EDA Member Chris Reese asked if we would do the utility work if we buy it. EDA Executive Director Schroeder replied it depends on how long we hold onto it. EDA Vice President Olsen asked if we are interested in flipping the properties. Community Development Director Howard Blin stated that various users are interested but not identified, there are other issues. EDA Vice President Olsen asked if they approached us and said we'd like to move this. EDA Executive Director Schroeder replied yes; don't want to negotiate unless there is a reasonable level of interest. EDA Vice President Olsen asked the EDA what they wanted to do. EDA Member Tony Jurgens asked if the developers are buying land that they are not using right away. EDA Executive Director Schroeder said no. EDA Member Jurgens asked when the Railroad master plan will be complete. He was told 18 months by Director Howard Blin. EDA Member Chris Reese asked when the service road would be extended. EDA Executive Director Schroeder said they were looking at funding sources and that the City is down on the list. Highway 61 will get overlay in 2013 the City hoped to use some of that funding for the frontage road. EDA Vice President Olsen asked if the EDA wanted to wait a while. EDA Member Chris Reese suggested they see where they're willing to go with it, continue dialogue. EDA Vice President asked what options do we have. EDA Executive Director Schroeder replied they could sell to a speculator or end user. EDA Vice President Olsen asked the EDA if they would be comfortable to find out best price. EDA Member Jurgens mentioned it would have to be a good price. EDA Vice President stated the direction is to find out the price and chat about it at the next meeting. EDA Executive Director Schroeder mentioned that both parcels are $1.5 million. BR &E — EDA Executive Director updated the EDA on business retention and expansion matters. The City is in discussion with a builder regarding 60,000 square feet of manufacturing. They are talking to builder regarding rail users. Referring to the CP /Lyman sites. They are responding to a broker solicitation for 20 acres. It would be 160,000 sq ft. first phase (Data Center). An existing local manufacturer is delaying a project until 2010. EDA Executive Schroeder stated that the last two items referred to Vanguard. EDA Member asked how many Economic Development Authority - Minutes August 11, 2009 Page 3 jobs the manufacturing project would involve. EDA Executive Director stated he didn't know. 2009 Commercial Building Vacancy Report Community Development Director Howard Blin informed the EDA that commercial vacancy rates in Cottage Grove remained unchanged from 2008 with 15% of all commercial space vacant as of July 2009. Retail space had a vacancy rate of 15% compared with 16% in 2008. Office vacancy of 17.1% percent also remained unchanged from the 18% rate in 2008. He mentioned that Home Depot made vacancy rates seem high. He commented that the City has very little office space in total. Nearly all of the vacant office space is in the Summerhill Professional Building. EDA Member Chris Reese asked if MSP is doing an expansion on 70 and Hinton. Blin said yes, the plans call for development of additional retail and restaurant space on the corner. EDA Member Jurgens asked about Home Depot. He was told there are ongoing discussions with brokers. EDA Member Chris Reese left the meeting at 8:03 a.m. Marketing of Vacant Properties EDA members requested a report on marketing efforts on major vacant properties in Cottage Grove. Community Development Director Howard Blin noted that the City needed to find developments retailers could move into like Cottage View, Norris Market Place and Hinton and 70 He discussed four sites where recent activity has occurred: Home Depot, Cottage View Site, Majestic Site, Norris Marketplace and Southpoint Ridge. "Profit From Experience in Cottage Grove" Real Estate Forum Management Analyst Jesse Swenson updated the EDA about the Real Estate Forum. The Economic Development Authority (Growth Partners) is hosting a real estate forum event for local residential real estate agents on Wednesday, October 14, 2009 at River Oaks Golf Course. An application to award continuing education credits to event attendees was submitted to the Department of Commerce on July 27, 2009. The EDA should receive confirmation regarding the approval of credits in the next 6 weeks. In the meantime, staff will begin to promote and advertise the event to our local real estate agents. Ms. Swenson asked the EDA if the agenda was long enough. She stated she checked with the Commerce Dept. and believes there is enough time to get through the agenda. She stated that she planned on giving the most amount of time to HUD. Chamber of Commerce Buy Local Campaign Ms. Swenson explained to the EDA that the buy local campaign that the Cottage Grove Area Chamber of Commerce Economic Development Committee kicked -off in May has been put on hiatus until further notice. There was not enough business or consumer interest to continue the coupon that was used during the months of May and June. The committee is strategizing new ways to promote the campaign and will look to re- introduce it during the fall /holiday season. Economic Development Authority - Minutes August 11, 2009 Page 4 ICSC Chicago Meeting Management Analyst Ken Smith and EDA Executive Director Schroeder explained that planning is underway for the City to send representatives to the ICSC meeting in Chicago, ILL. The memo on the subject included: Individuals attending the meeting (Mayor Bailey, Ryan Schroeder, City Staff Person and a local business person). The City will have a booth to conduct meet and greets and disperse City paraphernalia and information about the City. Maps, brochures, and a video are being produced for the event. EDA Executive Schroeder asked the EDA for additional input, direction and other things to consider. EDA Vice President Olsen mentioned that his company Real Estate Director goes with his City to ICSC conferences. He stated that between 25 and 30 thousand people attended the Vegas meeting and believes attendance at the Chicago meeting will be a little lighter this year. He suggested we contact Herberger's, JC Penny's, Gordman's. He mentioned that Council talked about the conference and that Council Member Mark Grossklaus suggested the Mayor and Ryan go. He would like to see broker /dealer go with residential experience and someone from Community Development. EDA Executive Director Schroeder stated he didn't have a broker in mind yet. EDA Member Jurgens said our focus is Howard Blin, Mayor Bailey, Ryan Schroeder and Craig Patterson. He asked if other cities were members. Management Analyst Ken Smith stated around 15. EDA Member Jurgens stated we should set goals; this number of people, this number of meetings. EDA Executive Director Schroeder stated we should have a statement of work. How do we focus on a message, what's the marketing piece, what's on the zip drive? He was considering a marketing study and gave out samples of their work. He stated that in 2003 the City did one for the East Ravine. We are meeting with Jim McComb to talk about marketing analysis tomorrow. EDA Executive Director Schroeder asked the EDA if they should use the 2003 study of do another. EDA Member Jurgens said don't do a new one. EDA Member Remackel stated to use the current one. EDA Vice President Olsen and Howard Blin suggested Ryan Schroeder should talk to Jim McComb and see what he can do. EDA Member Poncin suggested we forecast the East Ravine development in any market analysis we do. We should do some type of analysis involving number of households and square footage. EDA Member Ramackel said talk to McComb. EDA Executive Director reiterated that he was hearing some level of interest from the EDA and that they wanted him to use his best judgment. River Oaks Update EDA Executive Director Schroeder asked the EDA to review the provided golf information which highlighted YTD golf revenues, expenditures for the golf shop, club house and maintenance expenditures. EDA Executive Director Schroeder stated that the golf course is in the same spot it has been in for the past six years. There is an option to renew the lease at a cost of $1.00 per month. We lease from 3M and we consider it a good deal. At this time they were not prepared to give us an extension. The goal is to have the bonds paid off in 2010 and the next in 2012. We grant internal working capital loans to the golf course. We expect a few more. We will pay off internal debt in 2014. 3M wants to maintain lease control. It was stated that the Club House was built to better compete in the Market Place. There was a conversation about expanding the kitchen in the club house. EDA Vice President Olsen stated that it was not listed on River Oak's Economic Development Authority - Minutes August 11, 2009 Page 5 web page how you pay. He stated that rounds are flat and wondered what the EDA though they could do. EDA Member Remackel said that he talked to other courses and they are down too. People are cutting back. Holding on is good right now. He talked to Bellwood Oaks, Afton Alps, the Preserve in Brainerd and Inverwood Golf Course. Inverwood is static. EDA Vice President Olsen mentioned that overall expenditures this year are down from last year and that helps us. He doesn't want to sacrifice quality. EDA Executive Director Schroeder noted that if equipment at the Golf Course fails, we replace it with new equipment. 2009 EDA Golf Tournament Update Management Analyst Jesse Swenson stated that the 2009 fourteenth annual EDA golf tournament on Tuesday, August 11 t" at River Oaks Golf Course is shaping up to be very successful even though our numbers are slightly down from past years. Currently, 72 people have signed up for the golf outing, including one platinum sponsor, one gold sponsor, 11 silver sponsors, and three bronze sponsors, totaling 16 sponsors. The give away item is a wine stopper. The banquet dinner will feature the winners of the Growth Partner Awards, the many hole contests, and raffle prizes. Council Member Pat Rice will MC. Calendar The EDA members were reminded of upcoming meetings and events. MISCELLANEOUS BUSINESS ITEMS Community Development Director Howard Blin handed out a brochure designed to help with code enforcement around businesses. He asked the EDA for feedback. EDA Member Poncin stated that he thought there were too many "don't do this or that" he wanted the City to think about it from the business's perspective. EDA Member Jurgens agreed and said put support message before enforcement message. EDA Executive Director Schroeder said next months meeting would have ICSC and Norris Square on the agenda. EDA Member Poncin informed the EDA that he heard from some residents of Norris Square on Noon Out and they told him they wanted a restaurant in the Norris Market Square and were unhappy nothing was happening. He also stated that a lease had been signed for a day care facility. ADJOURN EDA Member Remackel made a motion to adjourn the meeting. It was seconded by EDA Member Poncin. All present were in favor. The meeting adjourned at 9:07 a.m. Respectfully Submitted, Kenneth L. Smith Management Analyst