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HomeMy WebLinkAbout2014-05-13 EDA Minutes - Approved CITY OF COTTAGE GROVE E CONOMIC D EVELOPMENT A UTHORITY MINUTES May 13, 2014 Pursuant to due call and notice thereof, a regular meeting of the Economic Development Authority was held at Cottage Grove City Hall, 12800 Ravine Parkway South, Cottage Grove, Minnesota 55016 on the 13th day of May, 2014. I. CALL TO ORDER The meeting was called to order at 7:30 a.m. by EDA President Bailey. II. ROLL CALL Members Present: Myron Bailey, EDA President Laurie Levine, EDA Member Paul Poncin, EDA Member Dave Thiede, EDA Vice President Steve Schmid, EDA Member Ramona Westerberg, EDA Member Members Late: Craig Patterson, EDA Member Staff Present: Ryan Schroeder, EDA Executive Director Danette Parr, Economic Development Director Robin Roland, Finance Director Alicia McMonigal, Economic Development Assistant Others Present: Emily Buess, South Washington County Bulletin III. APPROVAL OF MINUTES A motion was made by EDA Member Westerberg to approve the February 22, 2014 Joint CC and EDA Meeting Minutes. The motion as seconded by EDA Member Poncin, all present were in favor. IV. Business Items Development Update / BR&E Update A. EDA Executive Director Schroeder reported that the market is on an upswing and provided estimated market data values provided by Washington County indicating 2014 total values Economic Development Authority - Minutes May 13, 2014 Page 2 are up over 10% and anticipate similar increase for 2015. These values are below values from five years ago, but will change to positive territory. EDA Executive Director Schroeder also provided summaries of current sales trending up from the last 15-18 months in the sales inventory to be in the 230,000 to 240,000 range. Foreclosures are continuing to trend down throughout the county including Cottage Grove, with the current number at 19 in Cottage Grove through April 2014. EDA Executive Director Schroeder reported that the Maxfield Research Group conducted a housing market study on behalf of the Washington County HRA. The study shows market demand in Cottage Grove between now and 2020 will increase to 350 units per year. We are at a place within our construction process that would support the increase that the Maxfield Study Group conducted. Additional lots need to be brought on line, or home construction will be at a lower level then what was projected. EDA Executive Director Schroeder reviewed ongoing projects, including the rebuilding of the Target parking lot, as well as Burger King & Taco Bell remodels that are scheduled to begin shortly. Residential permits in total through April 2014 are at 23 total units, projecting to keep pace for the year. If construction continues at the current pace, these permits will reach 100 for the year. Values per unit are strong at about the $400,000 range. In total, permits we are at approximately 12.5 million for the year. That is at a pace approximately 20% above what we have experienced over the last five years. EDA President Bailey called attention to the fact that the debt was redefined and the City now has an S & P Bond Rating of AA+ going from good to very good. The City had over ten bidders and accepted a 1.8% interest rate on the refinance. EDA President Bailey stated that he was pleased with the fact that the interest rate was well below market value. B. BEC Solar Array EDA Executive Director Schroeder explained the specifics of the grant giving procedures and changes in the Xcel Solar Rewards Program. It system is now lottery based. The City partnered with Adolfson & Peterson (A&P) and together applied for three installations. The City received an allocation for an 11kW project at Public Works. The City also received authorization for a 40kW project at the BEC. EDA Executive Director Schroeder explained that the proposed systems are solar electric and whatever is generated off of the array bypasses the meter. If the full 40kW doesn’t get used in a day, it gets sold back to the grid. A&P would pay for, own, build and be responsible for the maintenance of the array while they are the owners. The City would experience a reduction in electric bills from Xcel Energy. Overtime, the City would see a net positive gain in how the City buys and sells energy. EDA Executive Director Schroeder recommended that we do a 20 year lease with the option to buy out the infrastructure after six years. The buyout would be reduced depending on the rate year. When the City decides to buy it outright, the City becomes responsible for the maintenance and upkeep. The payback would be immediate. Because the City is marketing the BEC as a tech building, the array would add to the marketability of the BEC as a technology based building. The EDA was not being asked to approve a contract at the meeting, but instead to approve the idea so that A&P can move forward with an evaluation of the BEC roof and the structure to ensure that it is able to adequately support the weight of the load. The panels and hardware is made in MN Economic Development Authority - Minutes May 13, 2014 Page 3 and facilitated by Ten K Solar. In addition, Ten K Solar utilizes 3M components, so it has a Cottage Grove connection. EDA Vice President Thiede moved to approve moving forward with the project. Seconded by EDA Member Laurie Levine, all present were in favor. C. ICSC Update EDA Director Parr discussed the main focus of the ICSC conference and the plan to meet with potential developers for the site near Ruby Tuesday and the Shoppes of Cottage View. A number of meetings have been secured, including meetings with four hotel chains. Director Parr explained that the EDA paid for the study that was conducted to demonstrate an immediate need for business class lodging. The study revealed that approximately 80 units are needed at this time with potentially more in the future. She will be able to share the hard data regarding the study to perspective franchisees, thus allowing them to forward that information along to other entities that are interested in meeting. EDA President Mayor Bailey discussed the recent news regarding Rainbow. HyVee has been contacted to see if there is interest in claiming the Rainbow space. EDA President Mayor Bailey and ED Director Parr will meet with the owner of that portion of the Center at ICSC to discuss potential options for the space. EDA President Mayor Bailey wanted to let people know that some of the ICSC contacts that weren’t interested in our market in previous years, are willing to see us now. D. Hollywood Video Redevelopment EDA Director Parr reviewed the details of the redevelopment of the former Hollywood Video site. Parr shared the rationale provided by the KCR Corporation, the current owner of the site, in relation to “but for” the participation of the EDA trust fund assistance, the project would not have move forward. The tax revenue generated from the redevelopment is estimated to be recouped in approximately 11 years. EDA Member Poncin moved to approve to assistance for the project. Seconded by EDA Member Westerberg, all present were in favor. E. Closed Session Meeting went into private session into an adjacent room to discuss contract negotiations. V. MISCELLANEOUS BUSINESS ITEMS VI. CALENDAR The EDA members were given the calendar to familiarize themselves with upcoming meetings and events. VII. AJOURN EDA Member Levine moved to adjourn the meeting. Seconded by EDA Member Schmid, all present were in favor. The meeting adjourned at 8:10 a.m. Respectfully Submitted, Economic Development Authority - Minutes May 13, 2014 Page 4 Alicia McMonigal Economic Development Assistant