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HomeMy WebLinkAbout2014-02-22 MINUTES Minutes for Joint CounciVEDA meeting of February 22, 2014 Mayor Myron Bailey called the meeting to order at 8:35 AM In Attendance: Mayor Bailey, Council members Thiede, Olsen, Peterson, Lehrke (8:45 arrival), EDA members Schmid, Poncin, Patterson, Levine, Administrator Schroeder, ED Director Parr, Finance Director Roland Guest: Geoff Benedict, Vanguard Construction The Mayor introduced the agenda and format for the day explaining that we were looking for general direction on various items. Existing Conditions Director Parr introduced this subject summarizing that essentially Cottage Grove is home to 4.4 million square feet of commercial and industrial space which is 94% occupied in total and as such our C/I sector should be considered healthy. There isn't any existing vacancy within industrial space. Commercial vacancies are primarily within four buildings, three of which are redevelopment opportunities. Through the discussion it was suggested that our vacancy analysis perhaps should not include structures that are "knock down" properties but no consensus was gained on that point. Business Park Administrator Schroeder Introduced Geoff Benedict, President of Vanguard Construction. Vanguard has constructed the following buildings within the Business Park: American AgCo, American AgCo II, Advance Corporation, Resorts & Lodges, DMC (former Ichor building), PRI, ICC. Administrator Schroeder also noted that Tom Ryan, co-President of RJ Ryan, which has constructed Werner Electric MN, Schmid Packaging, and Aveka CCE was invited to the meeting but was unable to attend and submitted a letter with observations regarding the Business Park. Mr. Benedict presented that Industrial development is a relationship business in which referrals are gained from law firms, accounting firms and the like. He presented that Cottage Grove is a place he wants to bring businesses to because it has welcoming staff and is a welcoming City. He noted that business was brisk but then the recession happened. People are currently trying to figure out the future tax situation, bank regulation is still a tough issue and many potential end users are thinking they should be able to get existing buildings dirt cheap which is becoming less and less possible. He noted that the smaller projects are a great niche to pursue. He mentioned the beauty of the Cottage Grove system is that we have been able to control the business park without owning land. Further, that what the City provides results in soft equity for the end users. He noted that he saw mention of a possible spec building within the agenda materials and recommended against pursuing such a venture. He also mentioned that the property was priced appropriately and that lot price was not a hindrance in the marketplace for development of the Cottage Grove Park. He noted that the Cottage Grove "get it done" process was a great attribute. Cottage Grove presents that it wants business here; he doesn't want to try to push a project into a place that doesn't want it. He mentioned that taxes and inflation are being looked at closely, but things are getting better. He also mentioned a concern for all Minnesota business parks is the warehouse tax which needs to be repealed. In response to questions he mentioned that City marketing ought to include "six miles south of 494" as the location is misunderstood. He also offered that he would be happy to provide a testimonial for our marketing programs to add to other testimonials that we should be sure to include. Administrator Schroeder noted that within the agenda packet we had included that the best return on investment for tax dollars per square foot are the smaller 20,000 to 50,000 square foot projects and that Council/EDA should take notice of that. Lodging Study Administrator Schroeder submitted that we have a preliminary draft of the lodging study and once the final document is available we will forward it to Council/EDA and lodging industry contacts. It was further presented that the HMI study shows a market for an 80 room business hotel with a per room cost in the neighborhood of$100,000. This would be similar to a Hilton Garden, Hampton Inn, or Holiday Inn Express. Tacit direction was that we pursue lodging opportunities within the Gateway or elsewhere should an operator select other site opportunities. Development Opportunities Director Parr introduced the development opportunities agenda item. Finance Director Roland walked through the financial aspects of existing monetary resources noting that there are currently three TIF districts. We do not have the ability to create more revenues in any of these districts. She noted that we have $2.87 million in the ED Trust Fund and that we do not budget revenues into that fund given that the source is elective grant funds. Director Parr noted that we have various redevelopment and development opportunities that have to be fit within our limited resources. Consensus of the group appeared to be that the Business Park and redevelopment of Home Depot ought to be our top priorities and that most of the rest will take care of themselves. It was suggested that Home Depot repurposing could include a retail only scenario or with a fitness component there would be interest in evaluating how a YMCA might fit into the pro-forma; it was suggested that a survey asking for financial support for a Y may be a path to take. It was noted that a development scenario of the former golf dome property (West Point Douglas Road) is anticipated in the near term which would be instructive for future prospects for other vacant and redevelopment parcels within the corridor. It was also noted that a streetscape project was currently being planned for that corridor. Staff provided an explanation of the HERO Center project that was currently being pursued with a State Bond fund request. It was suggested that staff provide development tours similar to what Woodbury currently does. Events/Outreach Efforts Director Parr presented the myriad of efforts having occurred and currently underway in the areas of conferences, events, outreach and marketing materials. Consensus appeared to be that attendance of the national ICSC conference should be continued but that we do not need to purchase booth space at any events of this nature. It was suggested that an online MHTA sponsorship perhaps could be considered but that their conference didn't provide the networking opportunity we would need. It was suggested that staff pursue additional business sector training opportunities within the BEC. Washington County Economic Development Efforts Director Parr presented a summary of the current conversations the County is having regarding more influence from the County in economic development. She shared that the County does not want to duplicate what the cities are already doing. Administrator Schroeder directed attention to the strategies portion of the agenda memorandum requesting affirmation for the position suggested within the memo. He added that we had failed to note a desire to have County support for use of TIF and Abatement tools which the County has historically opposed. Staff noted that they will bring this item back to an EDA agenda for consideration. Housing Administrator Schroeder presented that the most recent Met Council 2040 population forecast (2/19/14) had a Cottage Grove projected population of 49,300. This compares to the former official Met Council 2030 estimate of 53,000 and the HRA contracted Maxfield Research 2030 estimate (2013) at about 50,000. Staff presented that within ' the West Draw, Mississippi Dunes area, and East Ravine we have sufficient land resources and guiding to meet the housing demands within all segments over the next 20 years as projected within the Maxfield Study. In response to questions staff opined that the best opportunity for higher density and apartment projects would be at 70t" and Keats which is guided for those uses with at least some interest from property owners to market their properties. Upcoming Events Director Parr alerted the group to the training calendar presented within the agenda packet. Motion by Council member Olsen, second by Council member Peterson. All voted aye and the Mayor adjourned the meeting at 11:50 AM Respectfully Submitted, Ryan R. Schroeder City Administrator