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HomeMy WebLinkAbout2011-09-13 MINUTESIms el;K0161 im AM �' '• ECONOMIC � ■ • t 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 13th day of September 2011. CALL TO ORDER The meeting was called to order at 7:35 a.m. by EDA President Bailey. ROLL CALL Members Present: Myron Bailey, EDA President Tony Jurgens, EDA Member Justin Olsen, EDA Vice President Craig Patterson, EDA Member Paul Poncin, EDA Secretary/Treasurer Richard Remackel, EDA Member Chris Reese, EDA Member Members Absent: Staff Present: Robin Roland, Finance Director Ryan Schroeder, EDA Executive Director Ken Smith, Communications Coordinator Danette Parr, Economic Development Director Others Present: Alex Sheppard - Cottage Grove Area Chamber of Commerce Jon Avis - Bulletin Newspaper APPROVAL OF MINUTES A motion was made by EDA Member Remackel to approve the August 9, 2011 Economic Development Authority minutes. Seconded by EDA Member Jurgens, all present in favor. DEVELOPMENT UPDATE / BR &E UPDATE / BUSINESS LEADS EDA Executive Director provided the development update. At the September 7`" City Council meeting an individual requested an update on the status of the Quiet Zone project. The project Economic Development Authority - Minutes September 13, 2011 Page 2 was awarded High Speed Rail funding for the safety improvement of a quiet zone. The state has not received the funds from the federal government yet. MNDOT will not authorize the project to be bid until the funds have been received. At this time the deadline for the Federal funds distribution has expired for this construction season, so construction cannot begin until the summer of 2012 pending release of federal funds. He mentioned the City has had four ribbon cuttings: White Pine Senior Housing, El Sol Super Mercado, Carpet Court and WhenEver Fitness Center. He also mentioned that a Halloween store has opened up temporarily in the former CG Bingo Hall. This retailer was met at the ICSC Conference in May 2011. The PSCH groundbreaking will take place Thursday Sept. 29 at 8:30a.m. The Best Value team selected Graham Construction Services to proceed through the Bid Award process. Executive Director Schroeder went into the best value process explaining the blind bidding aspect and how reviewers did not know who the highest or lowest bidders were. Using a matrix the reviews all were very close in their choices. The City interviewed the highest 3 scores and the order did not change. The recommendation was cost effective and unanimous with a final cost of $15.5 million, well below the budgeted 17 million. EDA Vice President Olsen asked about Kimbro land at the PSCH site. Executive Director Schroeder informed the EDA that the deal was done and consummated, the City agreed to reimburse the County for a portion of the land. We have not mitigated for all land on the site, but have until 2015 to do so. EDA Vice President Olsen suggested the Mayor do a write -up for the newsletter to clarify the deal and counter any misinformation. EDA President Bailey mentioned using continuous video at the site. It was not in the current Graham proposal. The Hollywood Video site was brought up and Mr. Schroder stated we've been working as go between for the owner and a restaurant group. In a discussion about the Home Depot site Mr. Schroeder relayed to the EDA that ongoing discussions with the developer have occurred. They have until the end of January to close on real estate and we have until the end of 2012 to contribute tax increment. This will be back next month. EDA Vice President Olsen asked for other examples of TIF districts. He was told Walgreens, TCF, Norris Market Place and Target just to name some. Finance Director Robin Roland, stated that the spending plan is required by law left in place and not allowed to expire this year... this is a tight window and a good opportunity to do this. Building permits were reviewed; as of August we are up to 32 permitted housing units. The good news is that per unit values continue to rise with the average currently at $297,291 per unit which is above those of 2008, 2009 and 2010. In total we have issued $18,255,268 in permit value to date. Retail Focus Group Economic Development Director Danette Parr informed the EDA that the City will be hosting a meeting at River Oaks Golf Course on Sept. 14, 7:30 a.m. for local retailers. The meeting would feature: Welcome and Information Sharing, Roundtable Discussions and Sharing of discussion ideas. She stated that Mayor Bailey would be there to talk about our ideas to capture people traffic when they come to Cottage Grove and to get their ideas. EDA Member Poncin talked about having a list of amenities at all sporting events. EDA Member Reese mentioned a map of all our parks. EDA Vice President Olsen brought up a shop local guide or coupon book. Economic Development Authority - Minutes September 13, 2011 Page 3 EDA Executive Director Schroeder noted the work plan priority setting in their packet. He directed the EDA's attention to number 2 on the memo. Economic Development Director Parr asked the group about their priorities. EDA Vice President Olsen stated he liked the Tech Reviews. He talked about retailers preferring certain partners. Ms. Parr stated that we seek partners that are in line with our demographics. Mr. Schroeder reiterated that the City looked at what restaurants would be most successful here based on our demographics. An analytic report could cost us around $40,000 Mr. Schroeder reported. Data shows all our current restaurants should be here. EDA Member Remackel stated that unlike the 1g century very few companies are building campuses, they are more concentrated on logistics. EDA Vice President Olsen said all staff should be on the same page when it comes to customer service. When the subject of the Rush Nightclub was brought up EDA Executive Director Schroeder stated the owner has the most incentive to make it right. EDA Member Reese asked if the building is a hindrance to marketing the site. He was informed that when a prospective buyer saw the building she lost interest. it was said that we should market ourselves when things are happening like the Halloween store. A brief discussion about fiber lines going to our Business Park culminated with Mr. Schroeder stating that we had sufficient infrastructure going to the Park. EDA Member Patterson asked about Medical Campuses. He mentioned that our day time population was problematic. The subject of universities and state law pertaining to student population and the requirements for a physical structure was mentioned. 2012 ICSC Las Vegas RECON Conference Update The ICSC memo was shared with the EDA. EDA Executive Director Schroeder asked the EDA if they wanted to send representatives to the May meeting. The EDA said yes and that four was a good number. Office Incubator Update EDA Executive Director Schroeder shared his memo with the EDA. At the June EDA meeting staff brought forward a proposal from the Genesis Business Centers, Ltd to conduct a preliminary feasibility study toward a goal of creation of business Incubator from the current City Hall at 7516 80 St. S. The EDA requested additional clarity and outcomes in response to the proposal. On July 8, staff met with representatives from University Enterprise Laboratories which is a St. Paul based bioscience incubator. We needed to reschedule the University Technology Enterprise Center which is located in Dinkytown. According to tax records this building has a value of $2,878,700. If rented that value would incur a tax liability of approximately $85,000 (about $23,000 of which would accrue to the City /tax bill would accrue in the second year of operation.) The current electric /gas estimate for a fully occupied building would be $37,000. The water sewer /street light/storm sewer bill for this building could be estimated at about $5000 /year Janitorial should be budgeted at $23,000. This all totaled at $150,000 or $6.21 /gross square foot ($5.26 excepting the City Tax bill) plus costs to maintain the landscaping /parking lot as well as maintenance, repair and replacement. This suggests perhaps a $7 or $8 /gross square foot in CAM's (to break even) plus any profit, marketing, management and vacancy costs (plus additional for any extras such as IT, Office support Economic Development Authority - Minutes September 13, 2011 Page 4 services and the like). If the EDA/Council believes that the expenditure of effort and potential risk of vacancies, lack of rent payment, maintenance expenses beyond budget and the like are worth the potential upside of growing businesses. It should be mentioned that owners of competing office space may see a potential venture as unfair competition. While this is valid it also seems that our potential tenants may not be as bankable as would tenants attracted to competitive office locations. He also mentioned we could sell the property and should not be surprised to get offers in the $1.2 million range. At this point, the City continues to look for additional feedback from property management professional and will bring any we receive to the Board meeting. It was asked if it was a negative thing to continue down the incubator path and market the building at the same time. Mr. Schroeder commented that people don't want their deals to fall apart once they're in the building. EDA GOLF TOURNAMENT EDA Executive Director Schroeder updated the EDA on the 2011 and 2012 event. We will be making an aggressive focus for the 2012 tournament. It is our goal to use the tournament as a way to enhance our presence as a business destination and viable partner. He asked the members to put Aug 14, 2012 on their calendars and choose one of several ways to participate in next year's event. Staffing Update EDA Executive Director Schroeder informed the EDA that Ms. Parr's responsibilities have changed. She is not longer supervising the Community Development Department. She will concentrate her efforts in the area of economic development. Community Development will be supervised by Finance Director Robin Roland. The City will be hiring an Economic Development Specialist to assist with economic development. CALENDAR The EDA members were reminded of upcoming meetings and events. MISCELLANEOUS BUSINESS ITEMS EDA President Myron Bailey informed the group that the Holiday Train would be December 11, 2011 rolling in at 5:30 — 6:30 p.m. There was a brief discussion about Tiger Grants for the fire station. EDA Vice President Olsen mentioned that last week the City Council approved the 2012 levy. Finance Director Robin Roland stated that there would be a meeting in October to talk about tax rates going up. There was a brief discussion about the use of i Pads for the Council and Commissioners. Dollar savings due to less paper should be about $5,000. ADJOURN EDA Member Jurgens moved to adjourn the meeting. Seconded by EDA Member Reese, all present in favor. The meeting adjourned at 9:30 a.m. Respectfully Submitted, Economic Development Authority - Minutes September 13, 2011 Page 5 Kenneth L. Smith Community Services and Communications Coordinator