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HomeMy WebLinkAbout2010-11-09 EDA MinutesCITY OF COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY MINUTES November 9, 2010 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 9th day of November 2010. CALL TO ORDER The meeting was called to order at 7:32 AM by EDA Vice President Olsen. R()I I CAI I Members Present: Tony Jurgens, EDA Member Justin Olsen, EDA Vice President Craig Patterson, EDA Member Paul Poncin, EDA Secretary /Treasurer Chris Reese, EDA Member Richard Remackel, EDA Member Members Absent: Myron Bailey, EDA President Staff Present: Howard Blin, Community Development Director Robin Roland, Finance Director Ryan Schroeder, EDA Executive Director Ken Smith, Communications Coordinator Jesse Swenson, Economic Development Coordinator Others Present: Andy Meisner, Capital Recovery Group APPROVAL OF MINUTES A motion was made by EDA Member Jurgens to approve the October 12, 2010 Economic Development Authority minutes. Seconded by EDA Secretary /Treasurer Poncin, all present in favor. Economic Development Authority - Minutes November 9, 2010 Page 2 DEVELOPMENT UPDATE / BR &E UPDATE / BUSINESS LEADS EDA Executive Director Schroeder gave the EDA a development update. Home remodeling continues to have a lot of permit activity with 44.2% of total permit value from these activities. New home construction is at 39 units plus the 44 unit White Pines Senior Housing phase II. The City hosted a Public Safety /City Hall project open house /community meeting on Thursday, October 28 Another open house will be scheduled for December and will include preliminary building concepts and there will be time to include input from the public. Staff has met with a business park prospect that is looking to build a 20,000 square foot building on 5 to 7 acres, which would equate to 6.5 to 9% lot coverage, while the typical lot density in the business park is 20 %. The business is a service repair shop for tank trailers and at any given time there will be 20 to 80 trailers in the lot. The taxes generated would be roughly $8200 per year. EDA Member Jurgens asked how many jobs would be included and the average rate of pay. EDA Executive Director Schroeder indicated that it is approximately 12 jobs with an average rate of pay of $15 /hour. It is a privately held company with several plants and /or service centers nationwide. EDA Member Patterson asked if there would be a problem with soil contamination, and staff stated that would not be an issue. EDA Member Reese asked what the building would look like. It would be a 20,000 square foot building with several big bay doors and there would be a concrete or asphalt parking lot. EDA Secretary /Treasurer Poncin asked if the City would require fencing and staff noted that would not be a requirement. EDA Vice President Olsen asked if the company would look to expand in the future, and staff noted that the company has indicated that they do plan to expand in 2013. Also, the company would not be the owners of the building and would instead enter into a 10 year lease with the building owner. Community Development Director Blin asked the authority to consider whether or not the type of industry would negatively hamper future development in the business park since it might be harder to market the land near this type of industry. The authority agreed they did not have a problem with staff moving forward in discussions with this company. The authority was updated on the 2010 potential business leads. EDA Member Jurgens stated that he believed the authority should be spending a higher percentage of time at the meetings discussing business leads. EDA Vice President Olsen concurred with that statement and added that he would like to see more detail included in the lead sheet with specifics to why a business lead is inactive and also list who the staff person is that contacted the business. COST SEGREGATION PROPOSAL EDA Executive Director Schroeder asked the EDA to provide direction on how best to pursue or not pursue a cost segregation "pilot program" proposal from Capital Recover Group. The firm provides consulting services on a fee basis of approximately $8,000 to $15,000 for cost segregation. The pilot program could include the EDA funding an initial project with a current business park tenant to gauge the financial impact to the participating business. Economic Development Authority - Minutes November 9, 2010 Page 3 Andy Meisner from Capital Recovery Group spoke to the EDA and explained in further detail how the process works and how the EDA can get involved. He noted that engineers, not accountants / CPA's, conduct the cost segregation for companies that have at least $1 million valued property and that the report includes 100% detail of the building. EDA Secretary /Treasurer Poncin stated that the EDA could pay for a pilot program for 1 existing business park tenant and into the future offer the program to a company who is opening a business in town, but not pay for it. EDA Member Patterson stated that he thought if the EDA paid for the pilot program than it should recoup some of the cost from the businesses savings. He also thought it could be viewed as a negative to other existing business park businesses that are not offered the free service, so instead he suggested we market the idea and the business pays for the entire expense. Finance Director Roland said she believed this is a good program and it could be a valuable benefit to one of our existing business park tenants because it is a value -added service. EDA Vice President Olsen added it would be a good retention tool and gives the City a testimonial to use as a marketing piece. EDA Member Remackel asked that the City to include the Chamber of Commerce. A motion was made by EDA Member Remackel to underwrite the pilot program not to exceed $15,000 and to make that offer to Werner Electric. If Werner Electric is not interested the program needs to come back to the EDA 7 s December 2010 meeting for review. Also, the service should be offered to new businesses that open in Cottage Grove. Seconded by EDA Secretary /Treasurer Poncin, upon vote being taken motion passed 5 -1 (Patterson voted nay). WHEELS OF TRAVEL PURCHASE AGREEMENT Executive Director Schroeder presented a purchase agreement between the EDA and Wheels for Travel located at 70 Street and Highway 61. The purchase price is $420,000 with a proposed closing date of 12/31/10 and a property vacation date of 3/1/2011. The SWWD intends to acquire the property from the EDA for purposes of storm water ponding and is scheduled to authorize the purchase at its December 2010 meeting. A motion was made by Secretary /Treasurer Poncin to approve the purchase agreement contingent that the purchase be approved at the December 2010 SWWD meeting. Seconded by EDA Member Reese, all present in favor. BUSINESS ZONING DISTRICTS Item tabled until December 2010 EDA meeting. MD &M CONFERENCE Economic Development Coordinator Swenson noted that staff attended the October 13 -14 MD &M conference in Minneapolis and were currently following -up on leads from that event. Also, DEED approached the EDA to be a sponsor at their LifeScience Alley booth in December for a cost of $250. Economic Development Authority - Minutes November 9, 2010 Page 4 2 ND ANNUAL REAL ESTATE FORUM On October 27 the EDA hosted its 2 nd annual real estate forum at River Oaks Golf Course. The forum was a great success with over 50 realtors in attendance. SPAAR, the forum sponsor, has already asked the EDA to host the forum again in 2011 and the date has been set for October 26, 2011. CALENDAR The EDA was provided a calendar of upcoming events. EDA Vice President Olsen noted that the Holiday Tree Lighting is scheduled for December 1 St and the Holiday Train is scheduled for December 11 t" MISCELLANEOUS BUSINESS ITEMS ADJOURN EDA Secretary /Treasurer Poncin moved to adjourn the meeting. Seconded by EDA Member Reese, all present in favor. The meeting adjourned at 9:37 AM. Respectfully Submitted, Jesse Swenson Economic Development Coordinator