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HomeMy WebLinkAbout01-14-2003PACKET CITY OF COTTAGE GROVE r ECONOMIC Secretary DEVELOPMENT AUTHORITY AGENDA 14, 2 JANUARY 003 7:30 A.M. 1. Call to Order 2. Roll Call 3. Approval of December 10, 2002 Minutes • 4. Business Items A. Project Updates B. Appointment of Officers C. Gateway North Development District • Authorize land exchange agreement with US Bank • Authorize purchase agreement with Victory Church • Direct staff to nitiate commercial demolition process D. Industrial Park Project: Schmid & Sons Packaging • Authorize Purchase Agreement with SSP Properties LLC E. Marketing and Advertising for 2003 F. Business Breakfast G. Calendar 5. Miscellaneous Business Items 6. Adjourn Next Meeting Date: March 11, 2003 E:\Economic Development\E D A\Agendas\2003\Januaryl4 Regular.doc • CITY OF COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY MINUTES December 10, 2002 Pursuant to due call and notice thereof, a regular meeting of the Economic Development Authority was held at City Hall, 7516 80th Street South, Cottage Grove, Minnesota on the 10th day of December 2002. CALL TO ORDER The meeting was called to order at 7:30 a.m. by EDA President Wolcott. ROLL CALL • Members Present: Jim Wolcott, EDA President Sandy Shiely, EDA Vice-President Glen Kleven, Authority Member Fred Luden, Authority Member Dick Pederson, Authority Member Gerry Weingartner, Authority Member Members Absent: Mike Wennen, Authority Member Others Present: Ryan Schroeder, City Administrator Michelle Wolfe, Assistant City Administrator Scott Johnson, Management Analyst APPROVAL OF MINUTES Authority Member Kleven moved to approve the October 8, 2002 EDA Minutes. EDA Vice-President Shiely seconded. Motion carried unanimously. PROJECT UPDATES The City has received eight new inquiries for economic development projects since October of this year. • Economic Development Authority- Minutes December 10, 2002 • Page 2 Multi-tenant industrial project—Developer will be in soon with a site plan. Wells Fargo—The project proposal is for a new bank near Menards. They are scheduled to be on the next Planning Commission agenda. A number of restaurants and banks have shown interest in their current location. Presbyterian Homes —Looking at building a senior housing/office/ retail project in Cottage Grove. They are currently looking for a retail partner on this project. They are currently negotiating for a piece of property in Cottage Grove. Jim Wolcott asked how the project would be financed. A portion of the project would be paid for through a pay as you go TIF district. Oakwood Park—There has been high interest in the sites. The City would like to see high quality projects built on these sites. The City has rejected a proposal from a restaurant because the proposed layout negatively affected the remainder of the site. In addition, there were access issues with the project. Frattalone Property—This topic will be discussed at the joint meeting with the City Council. They will discuss the possibilities of having a project on the 11 acre parcel near the future Kohls location. A project would be difficult on this site because of the trees • and topography. Smaller stores may work on this site as opposed to big box retailers. Mayor Shiely commented that she would like to see a minimal amount of trees removed and leave the conservation easement as it currently stands. Ryan Schroeder informed the EDA that Eller is interested in selling their land, but would want to keep some of their billboards up. Mr. Schroeder thought this would be a good site for a park and storm water holding site as mitigation for any Frattalone project. GATEWAY NORTH REDEVELOPMENT DISTRICT UPDATE Staff asked the EDA for approval of a purchase agreement for the four condo units on the future Kohls site. The total cost for the purchase agreement with relocation expenses included is about $1 million. Mr. Wolcott asked the staff if the project is still under budget. Ryan Schroeder said the City is still within budget. Dick Pederson made a motion to approve the purchase agreement for the four office condos. Gerry Weingartner seconded the motion and the motion carried unanimously Mr. Schroeder said the US Bank land swap agreement seems to be moving ahead and should be completed in the next 30 days. The City will use its quick take power for the CB/Burnett property. Condemnation will take place soon on that property. There is a dispute over the placement of the access. The current entrance has a grade of 10% and the new proposed entrance would have a grade of 11%, which causes some safety concerns for the City. The City proposed a new entrance 500 ft. away on the new • Hardwood Court. Economic Development Authority- Minutes December 10, 2002 Page 3 The City is still working on acquiring 10,000 square feet of land adjacent to the office condo space and the Citys negotiations with Victory Church seem to be moving forward. PREDEVELOPMENT AGREEMENT WITH SCHMID AND SONS PACKAGING Schmid and Sons is looking at building a 35,102 square foot warehouse project next to CCE. There would be no on site ponding. The predevelopment document is currently being reviewed by Schmid and Sons. The project would employ 20 to 40 employees with an average hourly wage of $11.00. Mayor Shiely would like staff to look into this requirement and possibly raise the minimum requirement. The land price for this project is $2.05 a square foot. $.85 goes to pay for the base parcel and $.15 of the land price goes to deferred assessments. $.30 and $.40 of the square foot cost goes to area charges and grading charges for the project. $.05 is used for overhead costs on the project. Gerry Weingartner made a motion to accept the predevelopment agreement with Schmid and Sons. Dick Pederson seconded the motion and the motion carried. Fred Luden abstained from voting on the project because he felt that he did not know enough about the business and knows the packaging industry has predominantly low paying jobs. • EDA MEMBERS A Council Action Item will be on the next Council Agenda to reappoint Dick Pederson and Gerry Weingartner to the EDA. The EDA will be looking at candidates to fill their one opening in the near future. 2003 MARKETING AND ADVERTISING Michelle Wolfe presented the EDA with advertising options for 2003. The Business Journal reduced its rates for 2003 to attract more ads. She also explained that the Business Journal has a larger audience than the other publications. Mr. Schroeder commented that the City staff receives calls due to the direct post cards. He also explained to the EDA that development is a relationship business and the post cards remind people of that relationship. Glen Kleven thought it would be a good idea to expand direct mailers and the ED mailing list. Mr. Kleven thought seven or eight post cards a year would help more with marketing than ads in publications. He thought the City should look at marketing in other markets. Mayor Shiely did not see much value in advertising outside of the region because of the higher state taxes. Gerry Weingartner mentioned that the post cards are sent out to people who already know about us and we need to look for people who do not know about us. Mayor Shiely mentioned that a certain expectation is associated with the post cards and that we want certain development projects. Jim Wolcott thought the City • should use minimal advertising this year and use the money to put together an event for the current businesses in Cottage Grove. However, they do not want to stop advertising Economic Development Authority- Minutes • . December 10, 2002 Page 4 in any publication until staff knows where the businesses who inquire found out about the City. The issue will be discussed at the joint meeting with the City Council. ANNUAL BUSINESS BREAKFAST The annual business breakfast will be held January 27, 2003 at 3M Cottage Grove. Jim Wolcott thought the event should do something positive for current businesses. Dick Pederson proposed allowing each business to have a commercial taped at the event. Business owners could talk about their businesses and what they do in the community. Mr. Wolcott mentioned that this idea would take a large amount of time and some business owners would not participate. Mayor Shiely suggested bringing in a speaker to talk about the Wakota Bridge project. They could discuss the time-line for the project and other transportation topics. Another idea is to bring in someone to talk about the state budget deficit. Mayor Shiely will ask the State Finance Commissioner to talk about this subject at the breaktist. RIVER OAKS PLAQUE The plaque to welcome visitors to River Oaks Golf Course from the City Council will be • installed with a current Council photo in January. GATEWAY CENTER A ribbon cutting will be held for the Gateway Center at 1:00 PM on Saturday, December 14, 2002. The Applebee's ribbon cutting will be held at 10:30 AM on Monday, December 16, 2002. ADJOURN The EDA adjourned at 9:10 a.m. Respectfully submitted, l� 1 -PIAAw/ Scott Johnson Management Analyst • City of Cottage Grove . Memo To: Economic Development Authority Members From: Michelle Wolfe, Assistant City Administrator Date: 1/7/2003 Re: Project Updates Attached is the list of active projects. Staff will provide a verbal update regarding all current active leads at the meeting. Since the December meeting we received four new inquiries. • Attachment • G:\Economic Development\E D A\Documents\2003\Jan Proj Update.doc ACTIVE LEADS QUERY EDA PACKET 1/10/2003 Proposal ID Project Description SF/Acres Needed ED-00-31 Grove Plaza NA • ED-00-64 Manufacturing/Distribution 8-10 acres ED-01-001 90,000 SF Retail 90,000 ED-01-002 Manufacturing ED-01-006 Re- Development ED-01-010 Restaurant#2 ED-01-018 Commercial ED-01-021 Remodel ED-01-030 Distribution 25-30 acres ED-01-032 Distribution 400,000 SF distribution center ED-01-034 Distribution Center 9 acres ED-01-037 Multi-tenant Industrial 80,000- 100,000 SF ED-01-038 Commercial 40,000- 50,000 SF ED-02-004 Office 2 acres ED-02-007 Restaurant ED-02-008 Manufacturing ED-02-009 Steel Fabricator 20,000 SF ED-02-013 Office ED-02-015 Remodel ED-02-016 Bank ED-02-017 Bank ED-02-018 Manufacturer 30 acres ED-02-020 Light Industrial 2-3 acres • ED-02-021 Retail 75,000 - 100,000 sf retail ED-02-023 Restaurant ED-02-025 Office/Warehouse ED-02-026 Biotech ED-02-027 Redevelopment ED-02-028 Commercial ED-02-029 Manufacturing ED-02-030 Commercial ED-02-031 Commercial ED-02-032 Restaurant ED-02-033 Restaurant ED-02-034 Restaurant ED-02-035 Multi-tenant Office/Warehou 20-30 acres ED-02-036 Restaurant 3,500-5,000 SF ED-02-037 Truck Repair 40,000 to 50,000 SF on 4-6 acres ED-02-038 Restaurant ED-02-039 Restaurant ED-02-040 Mixed-use 50-300 acres ED-02-041 Commercial ED-02-042 Industrial 10 acres/80,000 SF ED-02-043 Industrial 250,000 to 300,000 sf ED-02-044 Industrial 3 -4 acres ED-02-045 Light Manufacturing 3-4 acres • Page 1 ACTIVE LEADS QUERY EDA PACKET 1/10/2003 Proposal ID Project Description SF/Acres Needed • ED-02-046 Industrial 2 acres ED-02-047 Redevelopment Commercial • • Page 2 City of Cottage Grove • Memo To: Economic Development Authority Members From: Michelle A. Wolfe,Assistant City Administrator,,,i Date: 1/7/2003 Re: Election of EDA Officers BACKGROUND Per the by-laws, there needs to be an annual election of EDA Officers. The positions are as follows: President, Vice-President, Secretary, Treasurer, Assistant Treasurer, and Executive Director. The Authority by also designates a Deputy • Executive Director who shall perform the duties of the Executive Director in the absence or incapacity of the Executive Director. The Secretary and Assistant Treasurer need not be members of the Board. The President, Treasurer and Secretary shall be elected annually. Terms for those appointed Assistant Treasurer and Executive Director (and Deputy) could be on going until changes are necessary or recommended. Attached is a copy of the 2002 officers. ACTION Elect the positions of President, Vice-President, Secretary, Treasurer and Assistant Treasurer. Review and accept or change the current list of appointed positions. Attachments • G:\Economic Development\E D A\Documents\2003\Jan Officers.doc 2002 EDA Officers • President Jim Wolcott Vice President Sandy Shiely Secretary/Treasurer Gerry Weingartner Assistant Treasurer City Finance Director Executive Director City Administrator • Deputy Executive Director City Assistant City Administrator • G:\Economic Development\E D AVvlember Information\2002 EDA Officers.doc • , City of Cottage Grove S Memo To: Economic Development Authority From:Ryan R. Schroeder 4/9 CC: Mayor and City Council i 4/1 Date: 01/08/03 Re: Gateway Redevelopment District Update/ Proposed Action Property acquisition activities continue for the Gateway project. In total there are twenty-seven total parcels impacted for which all or a portion of the property needed to be acquired or packaged for either a development parcel, roadway, or other • infrastructure. Of these, four are MNDOT owned parcels which will be deeded to the City by the end of February, six are yet to be acquired, and the other seventeen are currently within City/ EDA ownership. Of those yet to be acquired are: 1. Two parcels owned by US Bank (one remnant, which we will be acquiring in total and one easement off the main bank parcel). We have received preliminary approval of a land exchange but do not currently have a signed agreement. However, given that we believe final approval from US Bank is imminent we are recommending EDA approval of the land exchange pursuant to the attached memorandum from Steve Barrett. 2. One is known as the Ruvelson parcel (vacant parcel attached to the office condominium) on which we are currently negotiating and for which eminent 9 9 domain is scheduled for February if a purchase agreement cannot be achieved. 3. Oneisfour ou condominium unitsn which ch we have a purchase agreement with closing scheduled for January 31, 2003. 4. Another is for right of way for Hardwood to be acquired from the 1501 Partnership (Bumet Realty)for which eminent domain is scheduled for February but on which we continue to negotiate. The primary issue here is the exchange of access for 1 • the property from the west to the north side of the parcel. • Page 1 • 5. The final is the Victory Church (McCann) parcel for which we have a • recommended purchase agreement. If the agreement were approved, we would close on this parcel in January. The negotiated agreement is in the amount of $349,900. Upon approval of the agreement, we have immediate access to the property. In exchange for this right of access (testing, demolition and the like), we are compensating the owner for one month rent in the amount of $3600. The owner is waiving all rights to relocation and payments for fixtures. This acquisition cost is above our initial acquisition estimates based upon a 2002 appraisal. However, it is within expected costs should a market purchase not be accomplished in favor of eminent domain (due to legal and other costs of that process). Therefore, we are recommending approval of the acquisition. Upon approval of the above we would contemplate demolition of the Pet Clinic and Church buildings in late March 2003 with demolition of the condominium structure in May 2003. Our acquisition budget has been $150,000 within the district with $138,981 left within that line item. It is expected that demolition of these three structures will be below that amount with the difference allocated toward acquisition. Total acquisition/demolition expenses are expected to exceed initial cost estimates by approximately 7.5% which will be covered by the contingency account, if need be and by excess TIF revenues not originally allocated toward expense line items. Ehlers and Associates have projected project revenues not allocated toward project • expenses (excess TIF) at $815,321 (net present value) which could be allocated toward overages in acquisition or infrastructure costs. As you most likely know the Home Depot project is ahead of schedule and is currently projected to be complete in February 2003. The on-site and off-site pylon signs are presently under construction and will be substantially similar to the Walgreen's Gateway pylon sign upon completion. Additionally, the Grove Plaza ownership has requested elevation change to the interior small tenant spaces. Following the lead of the EDA and Council we have instructed Grove Plaza to provide enhancements beyond their revised facade proposal. We have not yet received additional sketches on their facade. Requested action: 1. Authorization of the land exchange agreement with US Bank 2. Authorization of the purchase agreement with Victory Church 3. Direct staff to initiate the commercial demolition process pursuant to the above. • • Page 2 City of Cottage Grove • Memo To: EDA MEMBERS From: Steven Barrett, Management Analyst SZ1OV`t--. Date: Wednesday, January 8, 2003 Re: LAND SWAP AGREEMENT— US BANK As part of the Gateway Development District, and specifically the Kohls development, the City is negotiating with US Bank on a land swap agreement and various easement and right of entry agreements to facilitate the Kohls • development. Although negotiations are still underway, the City and US Bank have agreed on most of the conditions. Attorneys at US Bank are now reviewing the final draft agreements, and signatures should be exchanged very shortly. Below is a summary of the terms of the draft agreements. Please note that the final agreements may differ slightly, but this summary will provide a general flavor of what is being agreed to. 1. Purchase Agreement. US Bank and the City will be trading parcels of land to facilitate the construction of Hardwood Avenue. The square footage of the exchanged property will be nearly equal. The agreement includes provisions that ensure US Bank will continue to have reasonable access to its site. 2. Access Easement. Provides an easement for vehicular and pedestrian ingress, egress and access purposes for the benefit of the Bank Parcel over and across a portion of the EDA Parcel. Essentially this agreement provides US Bank with access to Hardwood Avenue once the road construction is completed. The City will be responsible for maintenance and repair of the easement area. 3. Road Construction Easement. US Bank will convey an easement to allow the City to construct Hardwood Avenue. This agreement is a basic document • that is necessary to facilitate the construction of the new road. 4. Temporary Access Easement. Provides an easement for temporary access to US Bank while Hardwood Avenue is constructed. Essentially, US Bank • customers will turn north off 80th Street, then proceed east along a temporary road to the US Bank Property. This easement is essential to provide US Bank's customers easy access off 80th Street. • • City of Cottage Grove • Memo To: Economic Development Authority From:Ryan R. Schroeder -.-jl .- CC: Mayor and City Council Date: 01/08/03 Re: Acquisition WAG FARMS/SSP properties parcel At the December Economic Development Authority meeting the Board approved a letter of intent with SSP Properties for the Schmid Packaging project (proposed just east of CCE Technologies on 95th Street). As the EDA is not the fee owner of the • industrial park in order to provide for the transfer of property to SSP the land must be acquired from the fee owner which is a family trust collectively referred to as WAG Farms. Due to the complexity of the real estate transaction process with the Trust (due to multiple owners) and as a result of our positive relationship with that trust our process has included acquisition of the property by the EDA from WAG Farms with a simultaneous closing with the end user. The purchase agreements, in form and price per square foot of land have not changed since we began development of the industrial park in 1998. The proposed purchase agreement follows that same form and price. The price is $1/square foot of which $0.15 or any greater amount as determined by the fee owner is retumed to the City to pay off deferred assessments that were created due to City sponsored infrastructure projects in past years. Hence, with each project completed by the EDA the City general and project/construction/debt funds receive a cash flow advantage over what would exist absent the development process (as the deferred assessments would continue as interest bearing receivables). The development process includes preparation of the land by construction of utilities and roadway and preliminary grading of the development parcels. In order to cover those costs plus City utility area fees and other costs the EDA must recover $2.05/square foot in either project revenues (TIF) or purchase price on the land, or both. Projects generally include a cash acquisition price with any gap between that • •Page 1 1 price and the $2.05/square foot covered by TIF revenues. That same Performa is 1111 followed with the SSP properties project. The EDA previously approved the Letter of Intent with SSP properties that follows the above development program. Additional steps toward project completion include approval of the development agreement contemplated by the letter of intent, a business subsidies resolution and formal approval of the site plan by the City (which was included in concept form within the December packet). The only other Board action is to enter the purchase agreement with WAG Farms, which is contingent upon the SSP project. The parcel size is 123,197 square feet. Hence, the parcel cost is $123,197 of which at least$18,479.55 will be returned to the City toward deferred assessments. Resale of this parcel will exceed our purchase price pursuant to the letter of intent and the development process noted above. Board Action: By motion enter into a Purchase Agreement with WAG Farms et al for a land parcel of 123,197 square feet in size in the amount of$1/square foot pursuant to the above. • • •Page 2 I City of Cottage Grove Memo To: Economic Development Authority Members From: Michelle Wolfe, Assistant City Administrator Date: 1/10/2003 Re: 2003 Marketing and Advertising OPTIONS FOR 2003 The amount budgeted for marketing in 2003 includes the following: Advertising $25,000 Printing $ 5,500 • Postage $ 2,200 $32,700 A number of options were reviewed at the December EDA meeting. A final decision was not reached, but many ideas were discussed. After reviewing comments made by the EDA and discussion at the staff level, we would recommend the following: Advertising: 13 ads in Business Journal (fka City Business) $ 13,260 (six 1/4 page and six 1/8 page) 6 ads in Minnesota Real Estate Journal (6 1/4) $ 4,830 (six 1/8 page would cost $3,000) Direct Mail: 6 Post Cards — Printing (1,500 Pieces) $ 8,250 Postage $ 3,300 Total $ 29,640 Total Budgeted $ 32,700 • G:\Economic Development\E D A\Documents\2002\Jan Marketing.doc Recommendation represents Option 1A from the options presented at the December • meeting, with addition of two additional post cards mailings. The reasons for this • recommendation include: 1. Stays within budget amounts. 2. Increases the number of direct mail pieces. 3. Continues the same level of advertising. (We had originally anticipated reducing the number of ads somewhat, but with the cost reduction for ads in The Business Journal and the way price breaks work in both publications, we felt this was the best option.) REQUESTED ACTION Approve the 2003 advertising and direct mail program proposed by staff. Attachments • • G:\Economic Development\E D A\Documents\2002\Jan Marketing.doc , City of Cottage Grove • Memo To: Economic Development Authority Members gliCt1.1) From: Michelle Wolfe, Assistant City Administrator Date: 1/8/2003 Re: 2003 Business Breakfast Attached is the invitation that has been mailed out for the January 27 business breakfast. We are very excited about the speaker, Finance Commissioner Dan McElroy. I've already heard many positive comments from people anxious to hear him speak and have the opportunity to ask questions. 0 The program will be: 7:00 Registration and Breakfast 7:30 Program • Welcome Fred Luden • Introduction of Speaker Sandy Shiley • Presentation Commissioner McElroy 8:00 Conclusion Attachment • G:\Economic Development\E D A\Documents\2003\Jan Bus Breakfast.doc e 1 • TO THE ANNUAL BUSINESS RECOGNITION BREAKFAST In appreciation for your commitment to the business community, we invite you and your key personnel to a complimentary breakfast. The key note speaker will be Mr. Dan McElroy, former State Representative and new MN State Finance Commissioner. Mr. McElroy served the Burnsville area as a State Representative from 1994 until 2002. He served as an Assistant Majority Leader during the 2001- 02 sessions and was the Chair of the Committee on Jobs and Economic Development Finance from 1999 through 2002. He also served on the Taxes, Commerce, and Ways & Means Committees. He had served on the Legislative Audit Commission since 1995 and was the Commission Chair in 1999-2000. DATE: Monday, January 27, 2003 TIME: 7:00 am to 9:00 am PLACE: 3M Cottage Grove Center, Building 116 Space is limited, so please call ahead and make reservations for this event. RSVP to City Hall at 651-458-2800 or e-mail to sjohnson@cottage-grove.org by January 17, 2003 with the names of those attending. Due to security reasons all RSVP's must be received by January 17th. Don't miss this opportunity! Sponsored by: 3M Cottage Grove Center Cottage Grove Economic Development Authority Cottage Grove Area Chamber of Commerce f GR. PARTNERS COTTAGE GROVE AREA CHAMBER OF COMMERCE City of Cottage Grove • Memo To: Economic Development Authority Members From: Michelle Wolfe, Assistant City Administrator Date: 1/9/2003 Re: Calendar EDA Meeting January 14 Chamber Business Luncheon January 15 11:30 a.m. (at County Inn and Suites) 110 Annual Business Breakfast January 27 7:00 a.m. EDA Meeting February 11 EDA Meeting March 11 Chamber Business Luncheon March 19 11:30 a.m. (Location TBA) Business Day at the Capitol March 25 Volunteer Banquet TBA (3rd Week in April) Chamber Spring Banquet May 2 6:00 p.m. Chamber Golf Classic June 16 • EDA Golf Tournament August 19 G:\Economic Development\E D A\Documents\2003Uan Calendar.doc