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HomeMy WebLinkAbout2011-10-19 PACKET 04.A.i.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # y DATE 10/19/11 PREPARED BY Administration Ryan Schroeder ORIGINATING DEPARTMENT DEPARTMENT HEAD COUNCIL ACTION REQUEST Approve EDA Minutes STAFF RECOMMENDATION Approve EDA Minutes � � d u[�I�P►��G[•lr�L'L�G1uN10►;t1 DATE REVIEWED APPROVED DENIED ❑ PLANNING ❑ ❑ ❑ ❑ PUBLIC SAFETY ❑ ❑ ❑ ❑ PUBLIC WORKS ❑ ❑ ❑ ❑ PARKS AND RECREATION ❑ ❑ ❑ ❑ HUMAN SERVICES /RIGHTS ❑ ❑ ❑ ® ECONOMIC DEV. AUTHORITY 6/11 -9/11 ❑ ❑ ❑ ❑ ❑ ❑ ❑ SUPPORTING DOCUMENTS ❑ MEMO /LETTER: ❑ RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: ❑ OTHER: Minutes ADMINISTRATORS COMMENTS fs ,11, mig.701 X Date http: // 156. 142.9.31intranet /Administration Forms /City Council Action Form - Read Only.doc b=e Ui06T4RtC0I 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 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 7th 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 Mark€ t - Puce - aid- TargetVst -to -name some— Finance- Direeter- Robin -Rofand- statedd -tttat --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 WORK PLAN PRIORITY SETTING DISCUSSION 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 I g th 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 1year 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. 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 ECONOMIC MINUTES August 9, 2011 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 August 2011. CALL TO ORDER The meeting was called to order at 7:30 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 Members Absent: Chris Reese, EDA Member Staff Present: Robin Roland, Finance Director Ryan Schroeder, EDA Executive Director Joe Fischbach, Human Resources Coordinator Others Present: Perry de Stefano, President- Cottage Grove Area Chamber of Commerce APPROVAL OF MINUTES A motion was made by EDA Member Remackel to approve the July 12, 2011 Economic Development Authority minutes. Seconded by EDA Member Patterson, all present in favor. DEVELOPMENT UPDATE / BR &E UPDATE / BUSINESS LEADS EDA Executive Director provided the development update. The Wheels for Travel property Economic Development Authority - Minutes August 9, 2011 Page 2 closing is expected within the week. The EDA purchased the property and concurrently entered in to a purchase agreement with the South Washington Wastershed District. The South Washington Wastershed District will be reimbursing the EDA for its acquisition and relocation costs. The Blair Building has been issued a certificate of occupancy. Thirteen contractors showed up for the mandatory pre -bid meeting on August 3 rd for the Public Safety /City Hall project. EDA Executive Director discussed the proposed square footage of the building and how it compares to the space needs study conducted by Hay Dobbs in 2006. That study recommended needs for 2010. The proposed square footage is 3,455 square feet larger, with the building expected to meet needs through 2040. Staff has been working with a developer to reposition The Home Depot site. The main tenant would be LA Fitness. Staff is working on a draft development agreement and running financing numbers. If the project goes through a new TIF district would be created and some EDA Trust Fund monies would be used. Two other tenants would also occupy the building once the repositioning is completed. Those two tenants have not been specified yet. With the news of a possible LA Fitness, the Community Center Task Force has recommended that the referendum be delayed on a possible community center. The Task Force would like to see if the LA Fitness project comes to fruition before deciding on a next step. The City Council is expected to affirm that decision at its' next meeting. Twenty -eight new home permits have been issued thus far in 2011. The average permit values of these homes are up significantly over the past two years. The ICHOR building is currently bank owned but has purchase agreement of $1,650,000. A closing is anticipated within the week. WORK PLAN PRIORITY SETTING DISCUSSION CONTINUED FROM 8/3 WORKSHOP EDA Executive Director Schroeder brought this item back to the EDA for more discussion. The draft EDA Work Plan and Goals is a significant document. Staff would not be able to get it all done in a reasonable time frame. Staff is looking for direction from the EDA regarding specific initiatives and targets. This is where staff would spend a considerable amount of time. It was the consensus of - to - bring - the - document back every month - and - put - priorities on - ach - section. EDA GOLF TOURNAMENT The EDA Golf Tournament is today at River Oaks Golf Course. Sixty -three golfers were signed up to golf. There are 3 Bronze, 10 Silver, 1 Gold and 1 Platinum sponsors. CALENDAR The EDA members were reminded of upcoming meetings and events. MISCELLANEOUS BUSINESS ITEMS Two articles in the Cottage Grove Area Chamber of Commerce newsletter were highlighted. ADJOURN Economic Development Authority - Minutes August 9, 2011 Page 3 EDA Vice President Olsen moved to adjourn the meeting. Seconded by EDA Member Jurgens, all present in favor. The meeting adjourned at 8:45 AM. Respectfully Submitted, Joe Fischbach Human Resources Coordinator A UTHORITY f� I' Cottage Grove City Hall, 7516 80 St. S. Cottage Grove, MN 55016 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 12` day of July, 2011. CALL TO ORDER The meeting was called to order at 7:31 AM by EDA President Myron Bailey. ROLL CALL Members Present: Justin Olsen, EDA Vice President Tony Jurgens, EDA Member Richard Remackel, EDA Member Chris Reese, EDA Member Craig Patterson, EDA Member Members Absent: Myron Bailey, EDA President Staff Present: Ryan Schroeder, EDA Executive Director Ken Smith, Community Services and Communications Coordinator Danette Parr, Economic Development Director Others Present: Justin Fox, REMAX Cottage Grove Area Chamber of Commerce APPROVAL OF MINUTES A motion was made by EDA Member Richard Remackel and seconded by Secretary /Treasurer Paul Poncin, to approve the June 14, 2011 Economic Development Authority minutes. All present were in favor. The EDA greeted Justin Fox. Economic Development Authority - Minutes July 12, 2011 Page 2 DEVELOPMENT UPDATE / BR &E UPDATE / BUSINESS LEADS EDA Executive Director Schroder explained with 8 permits for July we are now at 24 new homes for 2011. This compares to an average since 2001 of 102 units year to date, 2007- 09 performance of 49 units YTD and 2010 of 19 units YTD. In a comparison to 2010 performance the 2011 activity puts us a on a pace of 56 units for the year although given our restricted lot count it should be expected that we will drop below that activity level. He explained that he was tracking unemployment #'s lately; our numbers are different then national numbers. In 1991 national unemployment was 7.8 and ours was 4.5. Currently, we are about 3 percent lower than the national unemployment. As of April 2011 we had 5.7 percent unemployment and the national number was 8.9 percent. Home Depot — the developer is doing soft marketing. They have letter of intent to rent the property for a fitness facility. Cottage View — Not a lot of developers are looking at the site at this time. There is a letter of intent on 22 acres of the larger parcel. It is a long way between LOI and an agreement he warned. No planning submittals expected until at least the 4 quarter. EDA Vice President Olsen asked if the Cottage View owners have expressed a sense of urgency to sell. EDA Executive Director Schroeder stated that if the theater required a significant investment it would close. Owner is concerned about his Agricultural tax status. PSCH / Community Center — EDA Executive Director Schroeder stated that on June 24 the City Council provided direction to the bid stage for this project. As a best value bid process this stage will take a bit longer than the more traditional low bid process. As a result it is anticipated that a bid award will occur on September 21, 2011. Mr. Schroeder explained that if the financing choice does not require a referendum then Council will not go to referendum. Private Placement financing is typically used for smaller projects. Bank of America created a new mechanism to bring our cash heirinvestment pool- Castbasis is very Some otherl�anks - h contacted us to get in on it. EDA Vice President Olsen said the Mayor stated he will not raise taxes. It's cheaper to use private placement. EDA Member Reese left the meeting at 8:10. EDA Vice President Olsen mentioned that the referendum on financing option is not on this project. Mr. Olsen, in response to the question by Justin Fox replied that a community center is a want, an extra and will result in a tax increase. General Government is a core function of Government. EDA Remackel commented that individuals expressing opposition to the PSCH were doing so for political reasons. It was felt that all the commotion around this topic might hurt the City's reputation in the long run. The City Council is a non partisan body. There was concern that staff had been treated with disrespect by certain parties during this process. EDA member Jurgens asked Ms. Parr how this debate affects selling Cottage Grove. She mentioned that currently it was difficult to quantify. Unfortunately, a lot people know about our situation, hopefully we can move through it. EDA Vice President Olsen stated in spite of the situation we will continue to answer all questions honestly. Economic Development Authority - Minutes July 12, 2011 Page 3 Ribbon Cuttings — EDA Executive Director Schroeder stated that on July 15 we will be hosting a ribbon cutting at El Sol Mercado located on the private drive south of 80 St, 7155. This Mexican grocer has been in business for four months. We have also scheduled a ribbon cutting at White Pines Phase II for August 12 during their grand opening. The ceremony will be at 10:00 a.m. Tom Moy Restaurant is celebrating 50 years in business. We should come up with a way to recognize long standing businesses. Ms. Parr suggested a plaque or certificate. ICHOR Building — Mr. Schroeder mentioned that the ICHOR building has a purchase agreement on it. This is an end user that we initially began working with back in the 2003 — 2005 time frame. Instead of relocating from their existing building they expanded and will continue to operate out to that building in a nearby community. The ICHOR building will become their corporate headquarters with a portion of their production activity. Business Incubator — EDA Executive Director Schroeder stated that he didn't bring back Mr. Jacobs at this time because the City has been interviewing other interested parties first. Paul Poncin has been a great resource in this effort. Ms. Parr stated that the City met with two individuals from a St. Paul, a bio tech operation. They will tell us what we need to do to our building. EDA Treasurer Paul Poncin mentioned that Mr. Jacobs name came up a lot in his discussions about business incubators. Ms Parr said she would tour facilities and is curious to see numbers on how many really turn into success stories. EDA Executive Director Schroeder explained to Justin Foxx what our plans are for the current City Hall Public Safety building. EDA Member Jurgens asked about the Library. EDA Executive Director Schroeder said that the County Capital Improvement plan currently denotes a project for 2015. They don't know what model of a new library will look like in future; books vs technology. Ms Parr handed out her department's work plan. Its topics were Owned Property and the Growth Partners Website. EDA Vice President Olsen stated the plan meets our Council goals and objectives. Ms. Parr talked about marketing folders. EDA Vice President Olsen brought up the idea of highlighting businesses and EDA activity on a cable TV show. The group talked about the Growth Partner's web site. Mr. Foxx said it was not engaging and not user friendly. Ms. Parr thought more pictures were needed. EDA Vice President Olsen said he wants the City to work with Chamber of Commerce to sell what's good about being in Cottage Grove. Mr. Fox stated he thought that was a good idea. He likes seeing Ryan at meetings and sharing info. He would like to know about current use of vacant spaces. EDA Member Poncin suggested we have business commercials on cable. EDA Executive Director Schroeder stated we did this two years ago and showcased all the Industrial Park business. Mr. Smith mentioned that he interviewed many of the businesses and that the business aspect of the Cottage Grove Spotlight show was moved to another cable business show that has since been discontinued. Mr. Schroeder mentioned we will be having a meeting in September with local businesses. EDA Member Jurgens suggested talking to people at the drive -in. It was suggested that we identify which businesses draw people to town. EDA Member Poncin stated a giant strawberry would help bring people to town. EDA Vice President Olsen suggest Ms. Parr hang on to suggestions for the next meeting. He then asked Mr. Foxx what is the Economic Development Authority - Minutes July 12, 2011 Page 4 perception out there about Cottage Grove as a place to do business. Mr. Foxx replied he didn't hear anything negative. EDA Member Jurgens mentioned he would like to find a way to get people to spend their money in Cottage Grove. Mr. Foxx said the buy local campaign had a limited budget. At ICSC our delegates heard a lot of feedback about day time population deficits as a determining factor. Housing — Economic Development Director Danette Parr directed the EDA to her handout about housing. She stated that when a business considers locating within a community, they often evaluate numerous factors, some of which include: the quality of the workforce, access to key transportation corridors, taxes and availability of shovel ready land. In the case of service oriented businesses, a factor of concern can involve access to affordable housing for their workforce. Typically, economically vibrant communities have a healthy mix of uses, including housing options that meet the full spectrum of the demographics that exist within the community. Problems can arise when service businesses have difficulty attracting workers, due to limited affordable housing within the community. According to the Metropolitan Council, housing is considered affordable /attainable when a family with a moderate or low income pays no more than 30 -40% of its monthly income for housing. She shared housing stock data: JiOUSING -UNITS BY.TYPE Number of Units Percentage Single -Famil Detached 9,734 80% Single - Family Manufactured 132 1% Twinhomes 94 1% Attached Townhouses 1,337 11% Detached Townhouses 20 0% _ Muffi le Family 812 7% Total 12,129 SINGLE-FAMILY DETACHED PROPERTY VALUES (Land arid, Building Values) # of SF Units % < $200,000 2,301 23.6% $200,001 - $300,000 5,643 58.0% $300,001 - $400,000 1,288 13.2% $400,001 - $500,000 373 3.8% $500,001 - $600,000 94 1.0% > $600,001 35 0.4% Average Value $250,939 Median Value $229,000 Economic Development Authority - Minutes July 12, 2011 Page 5 She asked for feedback on the following questions: • Does the City of Cottage Grove currently offer an adequate amount of affordable housing? • Should we engage the Washington Co HRA in investigating ways to more proactively create affordable housing? • Are there other segments of housing stock that should more actively be encouraged? • If certain housing needs exist, what role should the City play in creating this type of housing? Mr. Fox said Cottage Grove is a first ring suburb and we have affordable housing, so we seem to be ok. EDA Vice President Olsen mentioned that the Met Council thinks we don't have enough affordable housing. It was stated that there are townhomes in the City selling for $60,000 - $80,000. EDA Golf Tournament Community Services and Communication Coordinator Ken Smith gave an update of the planned EDA golf tournament. As of July 8, 2011 there were seven foursomes registered for the August 9' EDA golf tournament, and this includes 4 Silver and one Bronze level sponsor. This is in line with last year's pace. EDA Member Poncin and EDA Vice President Olsen agreed to play in the tournament. Growth Partner's Award Members of the EDA were given a voting sheet to select their preferences for the 2011 award. White Pines, Hoeft Builder, Inc., Pulte Homes of MN LLC and Lennar Homes Calendar Members reviewed the calendar. Miscellaneous Busine�l$ ems The EDA was directed to an article that talked about the number of rounds Eagle Valley Golf Course hosted for 2010 and this was compared that to River Oaks. We picked up market share and Eagle Valley was down for the same time period. ADJOURN EDA Member Jurgens moved to adjourn the meeting, seconded by EDA Member Poncin. All present were in favor. The meeting adjourned at 9:32 a.m. Respectfully Submitted, Kenneth L. Smith Community Services and Communications Coordinator ECONOMIC DEVELOPMENT FAVIffews MINUTES June 14, 2011 Cottage Grove City Hall, 7516 80" St. S. Cottage Grove, MN 55016 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 14` day of June, 2011. CALL TO ORDER The meeting was called to order at 7:32 AM by EDA President Myron Bailey. ROLL CALL Members Present: Myron Bailey, EDA President Tony Jurgens, EDA Member Paul Poacirr EDA - &ecretaryFrreasure Richard Remackel, EDA Member Chris Reese, EDA Member Members Absent: Justin Olsen, EDA Vice President Craig Patterson, EDA Member Staff Present: Robin Roland, Finance Director Ryan Schroeder, EDA Executive Director Ken Smith, Community Services and Communications Coordinator Danette Parr, Economic Development Director Others Present: Alex Sheppard, Cottage Grove Area Chamber of Commerce APPROVAL OF MINUTES A motion was made by EDA Secretary/Treasurer Paul Poncin, and seconded by EDA Member Economic Development Authority - Minutes June 14, 2011 Page 2 Tony Jurgens to approve the May 10, 2011 Economic Development Authority minutes. All present were in favor. Introduction of Danette Parr New Cottage Grove Economic Development Director, Danette Parr was introduced to the EDA. She mentioned she intendeds to take an active role within the Chamber of Commerce. DEVELOPMENT UPDATE / BR &E UPDATE / BUSINESS LEADS EDA Executive Director Schroder explained that building permits are down this year. With our limited residential lot availability we do anticipate a rehash of 2010 (at 45 new homes not counting the 44 White Pines Phase II). We also do not anticipate significant strength in commercial activity during most of the 2011 construction season. EDA Member Jurgens asked about permits due to hail damage and was told activity was not significantly affected. Last time we noticed anything from weather was 2001. PSCH Project - EDA Executive Director Schroder explained that there will be a special meeting on June 24`" and that bids would be awarded in late August. The City wants to choose a financing path that has no impact upon tars, We would like to use private placement a mechanism that has been around forever and used for smaller issues. EDA President Bailey explained that if interest rates are cheaper it will save taxpayers money and if we had a lower bond rating we could not do this. EDA Member Jurgens asked if there is a time issue. EDA President Bailey stated yes, delays increase the likelihood of interest rates and materials going up. EDA Executive Director Schroeder mentioned that there are no front end expenses with private placement. Finance Director Robin Roland stated that the City Council wanted us to see if other banks would look at the project. Three banks have contacted us and she and Ryan will nTeet them — ICSC - EDA Executive Director Schroeder explained that Mayor Bailey, Paul Poncin, Justin Olsen and himself had 29 scheduled meetings but probably met with 40 folks in Nevada for the ICSC meeting. Follow -up letters went out and they've received some follow -up from contacts. Myron Bailey mentioned that a hard ware store owner would be in town next week. The question relating to an attached second letter regards the EDA Golf Tournament and if we should offer to comp contacts from the ICSC exhibition and to what extent. The EDA agreed to offer to those contacts a comp as far as the golf outing was concerned. 7460 80 St. Signage – Owners of this property (American Account Advisors) have converted their temporary signage to a permanent sign as of June 3, 2011. EDA Executive Director Schroeder mentioned that we are still in the running for a large industrial Park tenant. He believes we are # 2. There is a purchase agreement for the Ichor building. Cottage View is moving forward and nothing new from Home Depot yet. EDA President Bailey stated that other's have shown interest in the Cottage View site now that smaller parcels are available. EDA Member Jurgens asked if anyone was interested in building an entertainment complex. Ryan stated not at this time. EDA President Bailey said the owner of the theatre doesn't want to keep it open. EDA Executive Director Schroeder said there were significant costs in maintaining the property. Economic Development Authority - Minutes June 14, 2011 Page 3 YMCA EDA Executive Director Schroeder mentioned that the attached material contains the Task Force report and the Market Study for the project. Also enclosed is a preliminary development agreement (LOI) along with site information. A majority of those surveyed are in favor of a joint City /YMCA community center. We would like the EDA to signal they have some level of comfort issuing financial instruments with this partnership. There will be a Council workshop and a referendum will accompany this project. A question about the location of the Community Center near PSCH with three sites being mentioned was brought up by EDA member Remackel. The Y wants the community to provide the site for free. East Ravine site has lower cost basis. According to Ms. Roland we cannot spend public funds on pro or con efforts surrounding the referendum. EDA Member Jurgens asked what the FDA's role is. Ms. Roland replied if the City funds the project, the EDA would issue the revenue bond which the Y will make payment to City for. The City would be expected to pay the other portion. EDA Executive Director Schroeder stated that if we are the building owner, than the Y would be our tenant. EDA Member Reese asked if they would be 20 year bonds. Ms. Roland said yes if not longer. EDA Executive Director Schroeder said we need the letter of intent to have as a basis for the referendum. EDA Member Poncin made a motion authorizing adoption of the proposed LOI between the City and the YMCA. The motion was seconded by EDA Member Remackel. All present were in favor. Business Incubator - As of October 2012 the current City Hall on 80 St. is expected to become excess property. The property could be marketed generally, could become part of a site for future YMCA, could be delivered to the County for use as future Library, or could become part of a larger redevelopment project. An alternative to these would be to maintain ownership of the building for alternative uses such as a business incubator. EDA Executive Director Schroeder stated he spoke with Harland Jacobs about this issue. I ask the EDA do you think it would make sense to use this building as an incubator or another building. Economic Development Director Parr stated that her previous city did the same thing for medical uses. s he- said -it isa- great- way -tfl- help- busmesses -grow.— EDA- E-xecut+ve�rector -Sch- roederstat€d -a person could find a space in the building to do his work. He doesn't need central services. Home based business incubator allows them to move forward without going too far. A brief discussion about competition and separation of business and personal use occurred. We would be responsible for repairs and maintenance. A build -out would not be necessary. EDA Member Poncin mentioned that one home run in the incubator would pay for the project. A brief discussion about location occurred and Paul Poncin mentioned that start ups care about cheap space. EDA Member Jurgens said he likes idea but doesn't want to be locked in because of possible library use. EDA Member Poncin suggested we go forward with looking into it. Phase 1 would be a $10,000 feasibility study, then we could go forward or stop said Mr. Schroeder. EDA President Bailey exclaimed he was ok with phased. Mr. Schroder mentioned that Phase II would involve going out to banks and lining up credit. EDA Member Poncin offered to get us someone from the University of Minnesota for help and advice. Mr. Schroeder said he would bring Mr. Jacobs to the next meeting and follow up. EDA Golf Tournament Community Services and Communication Coordinator Ken Smith gave an update of the planned EDA golf tournament. He mentioned there were four levels of sponsorship and that 1300 Economic Development Authority - Minutes June 14, 2011 Page 4 invitations had been mailed out. He spoke about the grilled dinner, various prizes and suggested changes. EDA Member Poncin suggested we raise the amount of the gift certificate given to each golfer from $20 to $25. EDA Executive Director Schroeder invited all EDA members to play in the tournament. He also said they would have the Growth Partner Award for the next meeting. Calendar — Members reviewed the calendar. Miscellaneous Business Items It was mentioned that Minnesota foreclosure outlook was still flat according to MN Association of Realtors. In Cottage Grove, $183,000 was the average sale price for single family home in May which is above many other cities. EDA Member Poncin suggested we think about constructing a large strawberry as a signature sculpture for Cottage Grove like the giant snowman and teapot water tower. Members said they would think it over. Chris Reese said he liked the River Oaks sign. ADJOURN EDA Member Jurgens moved to adjourn the meeting, seconded by EDA Member Remackel. All present were in favor. The meeting adjourned at 8:59 AM. Respectfully Submitted, Kenneth L. Smith Community Services and Communications Coordinator