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HomeMy WebLinkAbout2003.06-10 PACKET f CITY OF COTTAGE GROVE ECONOMIC Secretary DEVELOPMENT AUTHORITY AGENDA JUNE 10, 2003 7:30 A.M. 1. Call to Order 2. Roll Call 3. Approval of May 13, 2003 Minutes 4. Business Items • A. Project Updates B. Gateway Update C. Oakwood Commercial Sites D. 2004 Proposed Budget (EDA and Trust Fund) E. Business Subsidies F. Highway 61 Drainage Project—Appraisal Update G. Golf Tournament Update H. 2002 EDA Annual Report I. 2003 Development Update J. Property Database Update K. Calendar 5. Miscellaneous Business Items i6. Adjourn Next Meeting Date: July 8, 2003 G:\Economic Development\E D A\Agendas\2003\June 10 Regular.doc CITY OF COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY MINUTES May 13, 2003 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 13th day of May 2003. 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 Gerry Weingartner, Authority Member Glen Kleven, Authority Member Dick Pederson, Authority Member Mike Wennen, Authority Member Members Absent: Others Present: Ryan Schroeder, City Administrator Michelle Wolfe, Assistant City Administrator Steve Barrett, Management Analyst Scott Johnson, Management Analyst Colby Johnson, South Washington County Bulletin Dr. Bob Kretchmer Roger Jensen Alan Kretmer APPROVAL OF MINUTES Authority Member Sandy Shiely moved to approve the April 8, 2003 EDA Minutes. Dick Pederson seconded the motion and the Motion carried unanimously. • Economic Development Authority- Minutes • May 13, 2003 Page 2 PROJECT UPDATES The Schmid and Son groundbreaking took place on Thursday, May 1st. The groundbreaking was well attended by local officials and staff. The city has received three inquiries since the last meeting. One is a possible manufacturing project. The second project is from MEDP that chose Cottage Grove as a possible site. The third inquiry is for an office project. Staff also put together a mailer to projects that are currently on hold. The response to this mailer has given staff the opportunity to update the files on numerous projects. OAK PARK COMMONS This project has been approved by the EDA and City Council. Roger Jensen, the owner of the Oak Park Commons property, is requesting financial assistance for the utilities needed for this project. Mr. Jensen asserts that the property was zoned commercial by the city and the utilities should be ready for this type of use. The Oak Park Commons project is able to access utilities through the new Hardwood Court, but it is more expensive to do this than if they were accessible from 80th Street. He is asking for the EDA's assistance with the cost of utility connections. Also, he would like help with • grading his site lower to help with the grade of Hardwood Court. To lower the parcels grade from two to three feet would cost between $10,000 to $20,000. Mr. Jensen was joined by Dr. Bob Kretchmer, who will be a future tenant in the space, and Alan Kretmer who is the architect on the project. Mr. Kretmer told the EDA that it would cost $60,000 to stub in the utilities at 80th St. It would cost approximately the same to hook up the utilities on Hardwood Court because they need to push the storm sewer water up the hill and place the pipe 23 feet deep. It makes sense to bring the grading down for this project to help with the cost of the utilities. Ryan Schroeder said that Mr. Jensen's main argument is that the utilities should have been stubbed in because the land was guided for commercial development. Mr. Schroeder pointed out to the EDA members that not every graded site in the Industrial Park has had enough utility stubs to accommodate each project as the city makes decisions ahead of projects on utility stubs. Mr. Kretmer explained to the EDA that the lower level of the project will be facing 80th St. The initial design of the project called for the storm water to go to 80th St., but 80th St. is not designed to accommodate the storm water ponding for this project. Mr. Kretmer said the project was forced to bring everything north to Hardwood Ct. The depth of the pipe exaggerates the cost of the project. Mr. Schroeder commented that the project cannot be reduced in grade lower than three feet because it will cause other problems for surrounding properties. Jim Wolcott asked what size the storm sewer pipe was off of 80th Street. Mr. Kretmer said the pipe is currently 12 inches and the site requires an 18 inch pipe. Mr. Wolcott asked if still more pipe needed upgrading near Grove Plaza. Mr. • Schroeder said that some smaller pipe still exists at the Grove Plaza site. Mr. Wolcott o- • Economic Development Authority- Minutes May 13, 2003 Page 3 stated that the grade change does make sense on this project, but he still needs to see the numbers on the other parts of the project. Mr. Schroeder informed the EDA that the city is paying $135,000 for the construction of Hardwood Court. Oak Park Commons is paying $60,600 for the utility connections and area charges. Mr. Schroeder also informed the EDA that the Walgreen's/Gateway Center had a utility expense of over $400,000 to make the site work. Mr. Kretmer told the EDA that the total cost for the utilities and grading will be about $134,000. Mr. Wolcott wanted to know who paid for the 80th St. improvements. Mr. Schroeder said the improvements were paid for out of the storm water area funds. Roger Jensen wanted to know why he was being assessed area charges. Mr. Schroeder said the charges help to pay for the trunk utility extensions. Mayor Shiely wanted to know how Hardwood Court is being financed. Mr. Schroeder said the $135,000 for the road is paid for out of the Gateway Fund. The road will help with future development opportunities. Mayor Shiely wanted to know if the opportunities would be as good for a commercial project without a new road. Ryan Schroeder thought this would create deficient space on the back side of the project and it would make the project less feasible. Mayor Shiely thought this was a city paid benefit to the new businesses. Mr. Schroeder said that the roadway will be paid for through gateway revenues generated by the Kohls project. Dr. Kretchmer thought that a subsidy would be warranted for his project because the Kohls project had forced his business to move. This move has created additional costs and hardships for his business. • Mr. Kretmer stated that residential development is a net deficit for the city. The city is only able to gain money through commercial and industrial projects to pay for new residential projects. Mr. Schroeder clarified Mr. Kretmer's point by explaining that not all residential property is subsidized by commercial/industrial projects. Residential projects over a certain amount will generate tax revenues exceeding city operational expenses. The point is to have projects of significant value in Cottage Grow. Glen Kleven did not think the EDA should make a recommendation on this issue because it should be considered by the City Council. He was also unsure of what revenues were available to help with this project. Ryan Schroeder explained that it is an EDA project. Mr. Kleven thought it might make sense to adjust the area charges. Roger Jensen made the point that Kohls is subsidized and they had to move so Kohls would receive their site. Glen Kleven said that Mr. Jensen agreed to the final buy-out number. Mr. Jensen said he had no choice but to take the offer or face condemnation proceedings. Mr. Kleven asked Mr. Schroeder what options were available to the EDA. Mr. Jensen, Dr. Kretchmer, and Mr. Kretmer left the meeting at this time and were told that the EDA would respond to them. Mr. Wolcott was uncomfortable with the comments made by Mr. Jensen and his associates that the city did not do their job on 80th Street. He did not think it was right for taxpayers to subsidize their property because they did not do their homework to find out if the utilities were in place. Mr. Schroeder commented that Mr. Jensen could have researched this before buying the property. It is unfortunate that the utilities were not . constructed to the benefit of this panel. Mayor Shiely commented that the construction of Hardwood Court will help their project. She also mentioned that she thought they were asking for $134,000 to subsidize the project. Jim Wolcott thought the EDA should not Economic Development Authority- Minutes • May 13, 2003 Page 4 waive area charges because they have already paid for Hardwood Court. Mike Wennen thought it might be a possibility to waive the area charges on the project. Mr. Wolcott thought the developer paid a reasonable price for the property. If the project is not moving forward because of only $40,000 maybe the EDA should reconsider how important the project is for the city. He also thought waiving the area charges would be a bad precedent for the city. Glen Kleven also did not think it would be a good idea to subsidize this project. Gerry Weingartner made a motion to ask for Council's permission to split the cost of lowering the site. The EDA would pay 50% of the site lowering cost capped at $10,000. Mr. Schroeder clarified that that would become a cost increase to Hardwood Court that is funded by the EDA. Dick Pederson seconded the motion and the motion passed unanimously. HARKNESS AVENUE The haulers who are removing the fill from the Kohls site will now use Harkness Avenue to haul their fill to Woodbury. They will continue to use 80th St. as their return route. The city will reconstruct Harkness Avenue at the end of the project. Gerry Weingartner made a motion to approve the road reconstruction of Harkness Avenue after the project is completed. Dick Pederson seconded the motion and the motion carried unanimously OAKWOOD COMMERCIAL AGREEMENT • Ryanexplained Schroeder ex lained the changes that were made to the Oakwood Commercial agreement to the EDA. Some language on sign specifications and 360 degree architecture has been added to page 3. All the "mays and "shoulds" have become "shalls." The zoning ordinance for the city has also been added to the agreement. Mr. Wolcott thought nursery schools and day cares should not be included on the list. Plus, the EDA decided to not allow uses 13, 18, 33, 40, 44, 47, 49, 50, 59, 69, 72 from the draft of zoning ordinances allowed uses in this agreement. Mr. Schroeder also asked the EDA members if a list of restaurants should be included with the agreement. The EDA decided not to include the list because it will limit what restaurants developers are looking for and the EDA may be unhappy with some of the choices on the list. Staff will bring the purchase agreement template on the next EDA meeting for final adoption prior to going to Council for approval. GROVE PLAZA Mr. Schroeder informed the EDA that Roundy's has made an offer to purchase Rainbow Foods. Grove Plaza still intends to renovate the small tenant space in the near future. They have two letters of intent and will hopefully have a few signed leases in the upcoming month. One of the anchor stores wants to wait so they can open up all three stores in Washington County at the same time. In addition, Gorve Plaza owners are planning to construct a 4,200 square foot small tenant space on the site adjacent to Hollywood Video. • � I Economic Development Authority- Minutes • May 13, 2003 Page 5 HIGHWAY 61 DRAINAGE Steve Barrett informed the EDA that the city has retained Roger Rohrer to appraise properties for stormwater retention. Options being considered are to obtain drainage easements or buy parcels in fee. Mayor Shiely wanted to know if the city would need to keep the billboards. Mr. Schroeder said the current owner is interested in keeping five faces on the billboards and the city would assume the remaining leases. Gerry Weingartner asked about the concrete that has been piling up near the site. Jim Wolcott said the concrete is from the pavement management program and will be removed this fall. GATEWAY NORTH REDEVELOPMENT Ryan Schroeder informed the EDA that the city did not need to go to condemnation for any of the parcels in the Gateway North Redevelopment area. There were 27 parcels packaged in total. The city will retain most of the businesses displaced during the Kohls store. Only two nonprofit organizations will not stay in Cottage Grove. The projections on county market values appear to be on course. There will also be a number of spin-off projects from the Kohls store. The Oakwood site owned by the city is estimated at $1.5 • million for sales proceeds. The Kohls project appears to be on schedule. Mr. Wolcott wanted staff to make sure the store has an exit in the back. EDA GOLF OUTING PROMOTION Staff updated the EDA on the 2003 golf outing. Invitations will be sent out in the near future. Also, staff has put together a promotion for Chamber of Commerce members and people who sign up for anything higher than a silver sponsorship. They will receive the same benefits as the Industrial Park businesses from the EDA's current promotion. Glen Kleven made a motion to approve the promotion. Mike Wennen seconded the motion and the motion carried unanimously. Ryan Schroeder also mentioned that the River Oaks revenues are significantly higher compared to last year at this time. ENABLING RESOLUTION Michelle Wolfe updated the EDA on the changes to the enabling resolution. There is a quick window of opportunity to make the changes. The changes coincide with the EDA terms and reappointments. The changes need to be ready for public viewing when the public hearing notice is published. Glen Kleven wanted staff to clarify the language in Section 4. Jim Wolcott agreed that some clarification was needed. Michelle Wolfe will make the changes. Glen Kleven made a motion to ratify the proposed language in the EDA Enabling Resolution with the changes in language to section 4. Mike Wennen seconded the motion and the motion passed unanimously. .. Economic Development Authority- Minutes • May 13, 2003 Page 6 CALENDAR May 17th Park Grove Pet Clinic ribbon cutting EAST RAVINE The East Ravine project will have a Technical Advisory committee. A member from the EDA has been invited to sit on the committee. It was decided that Dick Pederson will be the EDA representative with Mayor Shiely serving as back-up. ANNUAL REPORT Jim Wolcott liked the new format for the new EDA Annual Report. Glen Kleven thought a bulleted list or outline would be helpful in each section. Ryan Schroeder agreed that it would be a good idea to add a few bullet points in each section. EDA VACANCY Al Boche Jr. has expressed interest in the vacant seat on the EDA. Mr. Boche Jr. will • give up his current seat on the Parks Commission. Mr. Boche installs computers in restaurants for a living. Glen Kleven made a motion to formally recommend Al Boche Jr. for the EDA vacancy. Dick Pederson seconded the motion and the motion carried unanimously. The recommendation will be considered at the May 21st City Council Meeting. BUSINESS SUBSIDIES A public hearing will take place at the next EDA meeting. A similiar hearing will take place at a future City Council meeting. Both will have hearings on the statutory changes for business subsidies, to establish revised criteria. RIVER OAKS LIQUOR SALES AT GGGT Ryan Schroeder informed the EDA that for River Oaks to sell beer at the Great Grove Get Together a motion needs to be made to request the Council's permission. Jim Wolcott asked if more food vendors would be present. Mayor Shiely informed the EDA that there are 9 vendors at this point. River Oaks is also proposing to sell hamburgers at the event. Mayor Shiely made a motion to ask the Council to permit River Oaks Golf Course to sell beer at the Great Grove Get Together. Dick Pederson seconded the motion and the motion carried unanimously. 111 Economic Development Authority- Minutes • May 13, 2003 Page 7 ADJOURN The EDA adjourned at 9:35 a.m. Respectfully submitted, - Scott Johnson Management Analyst • • CITY OF COTTAGE GROVE MINNESOTA • To: EDA Members From: Michelle A. Wolfe, Assistant City Administrator (L Date: June 2, 2003 Subject: 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 May meeting we received one new inquiry. The grand opening for the new Park Grove Pet Clinic was held on Saturday, May 17. The groundbreaking ceremony for the new Wells Fargo Bank was held on Friday, May 23. Footage from both ceremonies will air on the next edition of the Economic Development TV show. (The same show will include a segment regarding the Cottage Grove College Center.) We have been in the process of checking in with contacts for projects on the active list and "hold" list to determine current status. We have received many responses and therefore are list is becoming more up-to-date. • Attachment S ACTIVE LEADS QUERY EDA PACKET 6/2/2003 Proposal ID Project Description SF/Acres Needed ED-00-31 Grove Plaza NA ED-01-001 90,000 SF Retail 90,000 ED-01-006 Re- Development ED-01-021 Remodel ED-01-037 Multi-tenant Industrial 80,000 - 100,000 SF ED-02-004 Office 2 acres ED-02-007 Restaurant ED-02-009 Steel Fabricator 20,000 SF 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-02-023 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 ED-02-046 Industrial 2 acres ED-02-047 Redevelopment Commercial ED-03-001 Light Manufacturing ED-03-002 Manufacturing 30,000 sf facility ED-03-003 Manufacturing 2 acres ED-03-004 Light Manufacturing 10,000 sf ED-03-005 Warehouse/Indoor Storage ED-03-006 Manufacturing 7.25 acres/90,000 sf ED-03-007 Restaurant ED-03-008 Manufacturing 40,000- 50,000 sf ED-03-009 Manufacturing 25,000 - 35,000 sf • Page 1 ACTIVE LEADS QUERY EDA PACKET 6/2/2003 Proposal ID Project Description SF/Acres Needed iED-03-010 Light Industrial 2 acres ED-03-011 Office Building 5,000-15,000 sf ED-03-012 Car Dealership/Senior Housi ED-03-013 Distribution Center 15-40 acres • • Page 2 City of Cottage Grove • Memo To: Economic Development Authority From: Ryan R. Schroeder CC: Mayor and City Council Date: 06/05/03 Re: Gateway North Update A great deal of last minute details have been occurring in preparation for the real estate closing on the Kohl's redevelopment. You are already aware that the demolition and hazard abatement began on the commercial properties in early May with the final building coming down beginning on May 31. The day before, May 30 • we received the site plan from Westwood Engineering representing Kohl's with grade and other minor site changes. We can react to these late changes and they are relatively minor (for instance the pad was slightly higher in elevation from what we had contemplated and the building had shifted ten feet to the west). We also have had myriad title issues to deal with such as legal description overlaps (such as the Oakwood Commons property abstract included two inches of Oakwood Park...which might not seem like a huge problem but the County will not approve the plat with that overlap regardless how small...that issue and several similar issues have been resolved but the example represents some of the nuances of packaging 27 separate parcels into one coordinated development). We also need temporary access and drainage easements back from Kohl's after closing in order to assure continuous access to Bumet Realty, US Bank, Tutor Time and the 3 residential properties to the west. We have yet to receive final plat approval by the County and we cannot finish the ALTA survey required by Kohl's before recording of the plat...but we are getting close. Our schedule is that everything has to be in place, including preparation of the pad by June 15 in order to close by July 1. The grading likely will not be perfect at that point in time but it may yet be close enough to close on the real estate shortly after the July 1 date (the grading changes noted above impacted that schedule). We have been informed by the City Attorney of the need for a public hearing to sell the development parcel. Hence, we have scheduled this hearing for May 24 at 7:30 AM. •Page 1 • We are continuing to receive interest in spin-off developments as a result of the favorable improvements to the Gateway. For example, we are coordinating with Gene Stoltz on preparing a grading plan for his 2.5-acre development parcel north of Kohl's. At the corner of Hardwood Avenue and Harkness Avenue, the roadway will be at approximately the same elevation as the Kohl's rooftop and the Stoltz property is approximately 20 feet above that. While that provides his property with wonderful visibility from the Highway 61 northbound off ramp and from 80th Street, the site should be taken down somewhat to improve access from Harkness Avenue. Our coordination of that plan allows us to borrow excess fill from that site in order to raise the Kohl's pad from what had early been contemplated. We expect that the Stoltz property will be receiving development proposals for the 2004 construction season. Grove Plaza has informed us that they wish to begin reconstruction of their small tenant space yet this year and that they will be following the same elevation design has most recently approved by the EDA and Council. They also intend to apply for a building permit for a 4200 square foot small tenant space on the old Applebee's outlot (28,000 square foot site) at the same time using the same elevation concept. You are aware that the Flemming bankruptcy court has approved the sale of thirty- one Rainbow Stores to Roundy's Grocery chain. The Cottage Grove Rainbow is one of the stores approved for sale. The real estate closing is expected in June. The Oak Park Commons project has begun to move forward. Tree harvesting began on June 4. The grading plan has been revised pursuant to the May EDA discussion with the pad elevations reduced two feet (we had presented that two, maybe three feet might be possible). The site grades outside the pad locations are at 2%. We expect to receive the grading permit submittal on June 5. We have again turned our attention to the western side of the Gateway District and expect some proposals in the near term. For the G-Will Center, we expect to receive proposals for minor remodeling and some exterior enhancements. The owners of Cottage Square have expressed a renewed interest in a rehabilitation or redevelopment project as well. Our intent at this point would be to provide a phased project in order to minimize short-term impacts to existing tenants. However, it should be noted that this project continues to be speculative at this time. We also continue to strive for aesthetic improvements in the Gateway. As a reminder to all, as part of the Thompson Grove Pavement Management Project we will create a similar entry monument location as occurred on the eastern side of the highway. While an exact location has not yet been chosen it will be included in that project as promised. We also are ready to proceed with acquisition of the streetscape banners. One such banner had been hanging on a light pole outside City Hall for a few weeks for review. Comments received have been positive. We also will be integrating other streetscape improvements into the Gateway as occurred on 80th Street as part of the Hardwood project. Included will be use of the same streetlight standards and fixtures • • Page 2 • and washed concrete in the boulevards between the sidewalk and the curbing. This same treatment is intended to replace existing sidewalks south of 80th Street to the intersection at Super America. In addition, you may have noticed that the landscaping in the Grove Plaza pond has begun to take shape. Those plant materials that did not survive the winter will be replaced under the existing contract. All of the above streetscape enhancements are funded out of the existing Gateway budget. Finally, we have hired two summer part time employees in Public Works with horticulture / landscaping background. While they will conduct maintenance duties as required by the department we specifically sought landscaping background to ensure that our maintenance efforts on the 80th street planting beds are improved over 2002 (Council would recall that a full time maintenance position had been allocated 50/50 to Ice Arena/ 80th Street maintenance; that did not work as positively has hoped; with additional expertise available from these temporary positions we expect to realize a more positive result). Board Action: Based on discussion. F:\USERS\RSCHROED\June 03 Gateway EDA.doc • • •Page 3 City of Cottage Grove Memo To: Economic Development Authority From: Ryan R. Schroeder Date: 05/13/03 Re: Oakwood Commercial Purchase Agreement At your meeting of May 13, 2003, you again considered the template purchase agreement to be recommended for use by the City Council in sale and development of the 3.846-acre Oakwood commercial site. At that meeting you ratified staff proposed changes in section 3D on page three regarding signage, architectural features and 360-degree architecture. You also ratified changes within the • architectural guidelines making those provisions prescriptive rather than permissive. Finally, you amended allowable uses on this parcel by disallowing eleven additional uses that would otherwise be allowed under the zoning ordinance. Our goal is to provide the EDA another opportunity to review this template before consideration by Council. If ratified by the EDA we would present this to Council shortly. We believe that we can successfully market this property for a 2004 construction project. Chances of doing so increase as the Kohl's project and other Gateway development proceeds. EDA Action: By motion grant final approval of the Oakwood purchase agreement template with a recommendation to Council to consider same. F:\USERS\RSCHROED\Oakwood PA memo.doc • • Page 1 PURCHASE AGREEMENT AND AGREEMENT FOR OPTION • This Purchase Agreement (the "Agreement") is made this day of , 2003 by and between CITY OF COTTAGE GROVE, a Minnesota municipal corporation (the "Seller") and a corporation (the"Buyer"). 1. SUBJECT PROPERTY AND OPTION PROPERTY. The Seller is the fee owner of certain real estate (the "Property") located in Washington County, Cottage Grove, Minnesota, which is depicted on the attached Exhibit B. The Property consists of approximately acres that is a part of land to be platted as Lot 2, Block 3, GATEWAY NORTH FIRST ADDITION, and the legal description of the Property will be determined by survey as provided in paragraph 7 of this Agreement. The Seller also owns additional real estate adjacent to the Property, consisting of approximately acres (the "Option Property"), which is the remainder of the land to be platted as Lot 2, Block 3, GATEWAY NORTH FIRST ADDITION. 2. OFFER/ACCEPTANCE. In consideration of the mutual agreements herein contained, Buyer offers and agrees to purchase and Seller agrees to sell and convey the Property and all improvements thereon, together with all appurtenances,pursuant to the terms of this Agreement. In addition, Buyer and Seller agree to execute an Option Agreement for the Option Property as provided in this Agreement. 3. CONTINGENCIES. This Agreement is subject to contingencies as identified in subparagraphs A through D below. The provisions of subparagraph A may not be waived. The . provisions of subparagraph B are for the mutual benefit of Buyer and Seller and may not be waived except by the parties' mutual written consent. The provisions of the first sentence in subparagraph C are for the sole benefit of the Buyer and may be waived only in writing by Buyer. The provisions of the final sentence in subparagraph C and of subparagraph D are for the sole benefit of the Seller and may be waived only in writing by Seller. If any of the contingencies are not satisfied or waived, this Agreement shall be null and void and Buyer shall be entitled to return of Buyer's earnest money. A. SELLER ACCEPTANCE. This Agreement shall be presented to the Seller's city council within 30 days of the date it is submitted to Seller, fully executed by Buyer. If the Seller's city council does not approve this Agreement within thirty (30) days of the date of this Agreement, this Agreement shall be deemed automatically null and void and of no further force or effect and Seller and Buyer shall immediately execute a written acknowledgement that this Agreement has been terminated in its entirety. B. GOVERNMENT APPROVALS. This Agreement is contingent upon Seller obtaining the subdivision approval contemplated at paragraph 7 of this Agreement and upon Buyer obtaining necessary governmental approvals for the construction of a shopping center of at least square feet. • CA1-1-225312v6 1 CT 160-91 C. TENANTS. • 1. Anchor Tenant. Seller's obligation to close is contingent upon its approval of the restaurant selected by the Buyer to serve as the initial anchor tenant for the shopping center. Seller will not approve any restaurant that does not meet the following minimum qualifications: a. seating capacity for sit-down dining of at least seats, and covering at least square feet of gross floor area or square feet of interior seating area; b. intoxicating liquor to be served to patrons; and c. restaurant is one of the regional/national brands named as "Restaurant Users" in the attached Exhibit D, or is judged to be an equivalent by Seller. As a further precondition to closing Buyer will furnish Seller with evidence, reasonably acceptable to Seller that the selected restaurant is obligated to proceed with the restaurant following the closing. 2. Other Tenants. In addition to the Anchor Tenant, the Buyer understands that the Seller views both the uses and the mix of uses to be established in • the shopping center to be of great significance. It is Seller's goal that the proposed shopping center contains top quality tenants and uses; and provides a diverse variety of shopping opportunities for the community. Seller has selected Buyer as purchaser of the property, in part because Buyer accepts Seller's vision and has agreed to comply with the provisions of this paragraph. Specifically, Buyer represents to the Seller as follows: a. Buyer will not enter into initial leases for any uses that are not included in the list of permitted uses described in the attached Exhibit D. b. Buyer will seek the advice and counsel from Seller regarding the mix of initial uses to be established in the shopping center; and Buyer agrees that it will attempt, in good faith, subject to its reasonable discretion and sound business considerations, to implement, wherever possible the advice and suggestions of Seller regarding initial use mix. D. SELLER APPROVAL OF DEVELOPMENT CONCEPT. This Agreement is contingent upon the Seller's approval of the final design plan for the Property. The Seller requires that the Property be developed with a high quality commercial development that is acceptable to Seller. Buyer will provide Seller with building • renderings identifying the materials to be used in the construction of the shopping center within sixty (60) days following the date that the Purchase Agreement is executed by both parties for the purpose of obtaining Seller's approval of the CAH-225312v6 2 CT160-91 development, and said approval shall not be unreasonably withheld by Seller. At a minimum, and without limiting the Seller's discretion to approve the final design plan, such a development must meet the following criteria: (i) the exterior II/ treatments on all structures must use materials and colors that are substantially similar to the Walgreen's/Gateway Center/TCF development located at East Point Douglas Road and 80th Street; (ii) at least 80 percent of the non-glass exterior building material on the front and side façades, and any side of the building facing a street must be brick or material deemed superior by Seller, and on the rear façade up to 15 percent of the rear façade may be rock face block provided it is located along the base of the building, and the remaining 85 percent of the rear façade must be brick or material deemed superior by Seller; (iii) any development on the Property must be consistent with the Gateway architectural controls policy, a copy of which is attached as Exhibit C (but the enumerated criteria in this paragraph supersede any inconsistent provisions in Exhibit C); (iv) landscaping for the development must exceed the minimum requirements under City ordinances in quantity of plantings by at least 20 percent and at least 50 percent of the plant materials must exceed minimum required plant sizes; (v) the site design must positively impact the development opportunity for the adjacent Option Property and must provide for cross-access and cross-parking easements over the Property and the Option Property; (vi) exterior lighting must be consistent with the Hardwood Corridor street lighting or the lighting along the sidewalk at Home Depot and Grove Plaza and meet city required footcandle standards; (vii) the development must have ground monument signage substantially similar to the Gateway Center or TCF monument signage at East Point Douglas Road and 80`h • Street, except that all signage must be of the same color and style; (viii) the Buyer must agree to pay one third of the cost of any off-premises monument signage that the Seller constructs at Hardwood Avenue and 80th Street, not to exceed the sum of Ten Thousand and no/100ths Dollars ($10,000.00); (ix) each tenant is permitted one 26" tenant identification of individual internally illuminated letters, with 36" x 36" logo which will not include project advertising except as part of the tenants trade name or logo . Wall signs must be located within the designated sign bands delineated by the structure architecture and cannot extend closer than two feet from the tenants lease line. All letters in the tenant identifications shall be of uniform color, except for the logo which can be multi-colored; (x) the development must include publicly accessible outdoor spaces such as a pedestrian plaza, park, pavilion or courtyard. A water feature, fountain sculpture, clocktower, or other art feature maybe considered in lieu of a larger outdoor space. (xi) the development must be designed in a manner to create the impression of a unified project with the Option Property and overall sense of a unique or identifiable place; (xii) "360 degree " architecture is required, meaning that all sides of all buildings must be treated with the same architectural style, use of materials, and details as the front elevation of the building. E. PURCHASE PRICE AND TERMS: A. PURCHASE PRICE. The purchase price (the "Purchase Price") for the Property 411 shall be determined based upon the survey to be provided under paragraph 7 of this Agreement. Buyer agrees to pay per square foot for the first CAH-225312v6 3 CT160-91 square feet of land area in the Property and per square foot for each • square foot or portion thereof in excess of square feet. B. TERMS. 1. EARNEST MONEY. Within two business days after Seller's acceptance as provided at paragraph 3.A. above, Buyer agrees to pay to Seller contemporaneous the amount of Twenty Thousand Dollars ($20,000.00). Seller may deposit the amount in an interest-bearing account pending Closing. Seller is entitled to all interest that accrues on the $20,000.00, and said interest shall not be credited against the Purchase Price, except that Seller shall be required to return accrued interest to Buyer if this Purchase Agreement is terminated due to any of the following: non-marketability of title to the Property; Seller's default; or inability of Buyer to obtain the necessary governmental approvals required to construct a shopping center of at least square feet. 2. BALANCE DUE. At Closing, Buyer shall pay Seller any remaining Balance Due under the terms of this Agreement by certified check or other immediately available funds. C. DOCUMENTS TO BE DELIVERED AT CLOSING. At Closing Seller shall deliver to Buyer: 40 1. Warranty Deed conveying good, marketable and insurable title to the Property to the Buyer free and clear of all liens and encumbrances except the following items (allowable encumbrances): a) Building and zoning laws, ordinances, state and federal statutes or other governmental regulations; b) Easements and restrictions of record which have been approved by Buyer in writing; c) Real estate taxes for which the Buyer is responsible under paragraph 5; d) Reservation of any minerals or mineral rights in the State of Minnesota; e) Covenant by Buyer (i) that within one year of the date of the deed, Buyer will construct improvements on the Property consistent with the final design plan approved by the Seller under paragraph 4.D of this Agreement, provided that Buyer is able to obtain approval from all the necessary government authorities and (ii) granting to Seller a • reverter that includes the right to re-enter and take possession of and title to the Property if Buyer fails to construct the improvements within the one-year period as required. CAH-225312v6 4 CT 160-91 f) Cross-easement and cross-parking easements in favor of the Option • Property which has been approved in writing by Buyer and Seller prior to the date of closing. g) Declaration of covenants and restrictions as provided at 4.C.3. below. 2. Standard form Affidavit of Seller. 3. Declaration of covenants and restrictions that prohibits the use of the Property for a gasoline station or automotive-related use, including but not limited to automobile service or repair or retail sales of auto parts. Seller at its option may prepare and record the declaration of covenants and restrictions prior to Closing. 4. Option Agreement as provided at paragraph 14 of this Agreement. In lieu of recording the Option Agreement, the parties may elect to record a Memorandum of Option Agreement. 5. Such other documents as may be reasonably required by Buyer's title examiner or title insurance company. 4. REAL ESTATE TAXES AND SPECIAL ASSESSMENTS. A. The real estate taxes due and payable in the year of closing shall be prorated between the parties as of the Closing Date. B. Seller shall pay all special assessments levied against the Property prior to or on the Closing Date. C. Seller shall provide for payment of all special assessments for which an improvement has been ordered but assessments have not yet been levied as of the Closing Date, by escrowing an amount equal to two times the estimated amount of special assessments. D. Buyer shall be responsible to pay taxes and special assessments that are levied or become pending after Closing. 5. TITLE AND REMEDIES. Within thirty (30) days after Buyer's acceptance of the survey required by paragraph 7 of this Agreement, Seller shall deliver to Buyer a commitment for an owner's policy of title insurance, certified to a date that is on or after the date of this Agreement and including proper searches covering bankruptcies, state and federal tax liens, judgments and special assessments. The title commitment must commit to insure that, at closing, Buyer will have good, marketable, and insurable title of record to the Property, free and clear of all liens, encumbrances, leases, claims and charges, all material easements, rights of way, • covenants conditions, and restrictions and any other matters affecting title, except as approved by Buyer in writing. The title commitment must commit to insure that the property does not violate CAH-225312v6 5 CT160-91 any zoning or other use restrictions; and that the property is properly zoned for Buyer's use, • which is to develop and construct a shopping center. The title commitment must either waive or commit to insure against the following standard exceptions: facts which would be disclosed by an ALTA/ACM Land Title Survey of the Property, rights and claims of any parties in possession, and mechanic's contractor's and materialman's liens and lien claims. The title commitment shall be certified to the legal description of the Property as established by the survey required at paragraph 7 of this Agreement. Buyer shall be allowed ten (10) days after receipt of the commitment to review the same and provide Seller with Buyer's written objections. Objections not made in writing will be deemed waived. If the title to the Property or any part thereof, is found to be unmarketable, Seller agrees to cure such defects and render the title marketable, by action to quiet title if necessary, within six (6) months after receipt of Buyer's written objections. Pending correction of title, the payments required by this Agreement shall be postponed, but upon the correction of title and within fifteen (15) days after written notice to Buyer, the parties shall perform this Agreement according to its terms. It is further understood and agreed that if the title to the Property or any part thereof is found to be unmarketable and has not been corrected within the six (6) month period, then this Agreement shall be null and void and all monies paid under this Agreement from Buyer to Seller, including accrued interest on earnest money, shall be refunded and neither Buyer nor Seller shall be liable for damages hereunder. If the title to the Property is found marketable or will be made so within the required time period, and Buyer defaults in any of the covenants or agreements herein provided and continues in default for a period of fifteen (15) days, then and in that case, Seller may at its option, deem this Agreement terminated by giving 1111 written notice thereof to Buyer, and on such termination, all the payments made upon this Agreement, including accrued interest on earnest money, shall be retained by Seller as liquidated damages, time being of the essence hereof. This Agreement may be enforced by either party by specific performance; provided that: (i) the Agreement has not been terminated; (ii) any action for specific performance must be commenced within six (6) months after the right of action arises; and (iii) nothing in this Agreement shall obligate the Seller to exercise its power of eminent domain for the purpose of making title marketable, but Seller at its option may do so. 7. SUBDIVISION APPROVAL AND SURVEY. The transaction contemplated by this Agreement requires the subdivision of land. The Seller has already initiated an application for approval of the proposed plat of GATEWAY NORTH FIRST ADDITION. The Seller will obtain subdivision approval or waiver of subdivision requirements for the further subdivision of the Property from Lot 2, Block 3, GATEWAY NORTH FIRST ADDITION. The Seller agrees to bear the sole cost of obtaining necessary government approvals of the subdivisions contemplated by this Agreement. Buyer agrees to cooperate with Seller as necessary to obtain the necessary approvals. If Seller obtains a subdivision waiver that is conditioned upon a subsequent replat that includes the Property and Option Property, Buyer agrees to cooperate with Seller in connection with the replat. The provisions of this paragraph shall survive closing. Within 30 days after acceptance of this Agreement, Seller will provide Buyer with a boundary survey of the Property, prepared at the Seller's sole expense. The survey provided will be a staked survey made in accordance with the Minimum Standard Detail Requirements for ALTA/ACM Land Title Surveys, and (a) certified to Buyer and Seller and Title insurer; (b) prepared by a registered land surveyor in form and substance satisfactory to Buyer and Seller and sufficient to enable the Title Insurer to issue extended coverage, (c) containing a legal description CAH-225312v6 6 CT160-91 of the Property; (d) detailing all easements, encroachments and utility rights-of-way upon the Property (e) showing the location of private driveways and public streets so as to affirmatively • show rights of ingress to and egress from the Property, and (f) certifying the area of the Property both in acres and in square feet. Buyer must make any objections to the survey and legal description within fifteen (15) days of receipt. If Buyer's inspection of the survey reveals conditions unsatisfactory to Buyer in its sole discretion, Buyer may rescind this Agreement, in which case the Earnest Money will be returned to Buyer. 8. ENVIRONMENTAL. Seller agrees to provide Buyer with a current Phase I Environmental Report prepared in accordance with ASTM standard E-1527-00 covering the property within thirty (30) days after acceptance of the purchase Agreement by Buyer and Seller, at Seller's sole cost and expense. Seller will provide soil tests, if available. If Seller does not have soil tests available, Buyer has the right to obtain soil samples at its sole cost and expense. If Buyer's inspection of the Phase I Environmental Report reveals conditions unsatisfactory to Buyer in its sole discretion, Buyer may rescind this Agreement, in which case the Earnest Money will be returned to Buyer. 9. BUYER'S DUE DILIGENCE. For a period of one hundred eighty (180) days following the approval of this Agreement by Seller's city council and the recording of the plat of GATEWAY 1ST ADDITION and Seller providing Buyer with a Survey and Phase I Environmental Report as referenced in paragraphs 6 and 7 of this Agreement, Buyer will be allowed to conduct such due diligence reviews, tests, inspections and investigations with respect to the Property as Buyer deems necessary, including, but not limited to, the following: 11111 A. Obtaining soil tests and conducting other environmental investigation as Buyer deems advisable, at Buyer's sole expense. Buyer agrees to indemnify the Seller against any liens, claims, losses or damage occasioned by Buyer's exercise of its right to enter an work upon the Property. Buyer agrees to provide Seller with a copy of any and all reports or test results prepared as a result of such examination and tests. B. Applying for and receiving necessary government approvals (up to and including the issuance of a building permit) to build a shopping center that will satisfy the contingencies at paragraphs 3.B. and 3.D. of this Agreement. C. Preparing and presenting to Seller a master plan for the Property and the adjacent Option Property, to she w layout and use for the entire 3.846 acres. Buyer agrees to exercise due diligence and best efforts to complete all of the activities contemplated by this paragraph within the 180-day time-frame provided herein. 10. SELLER'S COVENANTS AND WARRANTIES. Seller covenants and warrants to Buyer that: A. There are no other options or written agreements with respect to the sale of the Property. B. From and after the date of approval of this Agreement by Seller's city council, CAH-225312v6 7 CT160-91 Seller will not transfer or encumber any part of the Property or permit any changes to the zoning classification of the Property. C. Seller will not negotiate or enter into a purchase agreement with a third party for the sale of the Option Property until Buyer has completed the master plan required under paragraph 9.C. of this Agreement and until Buyer has been given the opportunity to exercise its option to purchase the Option Property as referenced in paragraph 14 of this Agreement. D. Seller will join in the execution of documents required by the Buyer to obtain government approvals which may be necessary to develop the property and construct a shopping center on the Property. The parties expressly agree, however, that the scope of the preceding sentence is limited to the execution of documents that evidence Buyer's consent as a property owner to the processing of applications for government approvals. Nothing in this paragraph shall limit or restrict the Seller's exercise of the Seller's legal authority and discretion with respect to any application which Buyer may submit to Seller in its capacity as a government entity and regulatory agency. In addition, nothing in this paragraph shall limit or restrict the Seller's exercise of discretion under paragraph 3.D. of this Agreement. E. Upon completion of the Hardwood Avenue street improvement project, which is scheduled for construction in 2003, sewer and water will be located within 4111 Hardwood Court or Hardwood Avenue and within 100 feet of the Property. F. The Seller has not engaged or consulted with a broker or agent concerning this transaction. G. The Hardwood Avenue Street improvement project will be completed on or before October 1, 2004, with the first lift of completed asphalt on or before P October 31, 2003. H. The Seller will complete site grading of the Property on or before 2004, with approximately a three percent slope, north to south. I. Between the date of acceptance of this Agreement and the date of closing on the Property, Seller will: (1) promptly notify Buyer in writing if any material change occurs in the conditions affecting the Property; and (2) promptly, after receipt, furnish Buyer copies of all notices of violation by Seller or Buyer of federal, state, or municipal laws, ordinances, regulations, orders or requirements of any governmental authorities. 11. BUYER'S COVENANTS AND WARRANTIES. Buyer covenants and warrants to Seller that: • A. Buyer is a corporation organized under the law of the State of Minnesota and is in good standing. CAH-225312v6 8 CT 160-91 B. The person executing this agreement on behalf of Buyer has the authority to bind Buyer to this Agreement. C. The Buyer has not engaged or consulted with a broker or agent concerning this transaction. 12. CLOSING. The closing ("Closing") of the sale of the Property shall take place within 30 days after removal of all contingencies, but no later than , 2004. The Closing shall take place at the offices of Old Republic National Title Insurance Company, 400 Second Avenue South,Minneapolis,Minnesota or such other location as mutually agreed upon by the parties. 13. CLOSING COSTS AND RELATED ITEMS. Seller will be responsible for payment of the cost of commitment for an owner's policy of title insurance, the title insurance policy premium, state deed taxes, the cost of recording the cross-easement instrument and any instrument necessary to establish marketable title in Seller, and the closing fee. Buyer shall be responsible for recording the deed from Seller to Buyer and the Option Agreement or Memorandum of Option Agreement. Each party shall be responsible for its own attorneys fees. 14. OPTION TO PURCHASE OPTION PROPERTY. At Closing, Seller agrees to grant to Buyer an Option for the Option Property, and the parties agree to execute the Option Agreement at closing on the sale of the Property. The Option Agreement shall contain the following essential terms: A. OPTION PRICE. Buyer agrees to pay Seller the amount of $ as1111 consideration for the option, contemporaneous with execution of the Option Agreement. The option price shall be applied toward the purchase price of the Option Property if the Option is timely exercised. B. OPTION TERM. The Option expires one year after the date of execution of the Option Agreement. Failure to exercise the Option within the option period terminates the Buyer's rights to purchase the Option Property. To exercise the Option, Buyer must notify Seller in writing of Buyer's intent to exercise the Option, in the manner provided in paragraph 24 of this Agreement. Buyer's written notice of intent to exercise the Option must be accompanied by the earnest money payment of$20,000.00. C. PURCHASE PRICE AND TERMS. The Option shall provide for a purchase price for the Option Property in an amount of per square foot. The other terms of sale for the Option Property shall be the same as those for the sale of the Property, with the following modifications: (1) all references to a shopping center of at least square feet shall be changed to square feet; (2) delete paragraph 3.D.(viii); (3) the closing date must be within 30 days after removal of contingencies but not later than days after exercise of the Option. D. OPTION NOT ASSIGNABLE. The Option may not be assigned to a third party by Buyer without the prior written consent of the Seller. • 15. NO PARTNERSHIP OR JOINT VENTURE CREATED HEREBY. Nothing in this CAH-225312v6 9 CT160-91 Agreement shall be interpreted as creating a partnership or joint venture between the Seller and • Buyer relative to the Property. 16. POSSESSION/CONDITION OF PROPERTY. Seller shall deliver possession of the Property to Buyer at Closing. 17. DAMAGES TO REAL PROPERTY. In the event that the Property is destroyed or substantially damaged by fire or other casualty before the Closing Date, this Agreement shall be null and void at the Buyer's option and all sums paid by Buyer to Seller pursuant hereto shall be promptly refunded to Buyer. In the event that the Property is less than substantially damaged by fire or any other cause on or before the Closing Date, then Property shall be promptly and diligently repaired, and if repairs cannot be completed by the Closing Date, then at the option of either party, the Closing Date may be postponed until repairs are completed. In the alternative, the parties may proceed to closing and Buyer may accept the Property in its damaged condition, provided the parties are able to reach mutual agreement concerning an adjustment to the purchase price to reflect the Property's damaged condition. 18. DISCLOSURE; INDIVIDUAL SEWAGE TREATMENT SYSTEM. Seller represents that to Seller's knowledge there is no individual sewage treatment system or systems on or serving the Property. 19. WELL DISCLOSURE. Seller represents and advises Buyer that to Seller's knowledge there are no wells located upon the Property. Buyer acknowledges receipt of Seller's well • disclosure statement. 20. CUMULATIVE RIGHTS. Except as may be otherwise provided elsewhere herein, no right or remedy herein conferred on or reserved to Buyer or Seller is intended to be exclusive of any other right or remedy provided herein or by law, but such rights and remedies shall be cumulative and in addition to every other right or remedy given herein or elsewhere or hereafter existing at law in equity, or by statute. 21. NO MERGER OF REPRESENTATIONS, WARRANTIES. No representations or warranties contained in this Agreement shall be merged into any instruments or conveyance delivered at Closing, and the parties shall be bound accordingly. 22. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the entire agreement among the parties, and no other agreement prior to this Agreement or contemporaneous herewith shall be effective except as expressly set forth or incorporated herein. Any purported amendment shall not be effective unless it shall be set forth in writing and executed by the parties or their respective successors or assigns. 23. NO ASSIGNMENT. Neither party to this Agreement may assign this Agreement without the prior written consent of the other party. 24. NOTICE. Any notice, demand, request or other communication which may or shall be • given or served by the parties shall be deemed to have been given or served on the date the same is deposited in the United States Mail, registered or certified, postage prepaid and addressed as follows: CAH-225312v6 10 CT160-91 a. If to Seller: City of Cottage Grove Attn: Ryan Schroeder, City Administrator • 7516— 80th Street South Cottage Grove, MN 55016 b. If to Buyer: 25. CAPTIONS, HEADINGS OR TITLES. All captions, headings, or titles in the paragraphs or sections of this Agreement are inserted for convenience of reference only and shall not constitute a part of the Agreement or a limitation of the scope of the particular paragraphs or sections to which they apply. 26. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this agreement as of the date written above. SELLER: CITY OF COTTAGE GROVE By Sandra Shiely, Mayor By Ryan Schroeder, City Administrator BUYER: By Its • CAH-225312v6 11 CT160-91 • EXHIBIT A Legal Description of Property A part of the following described property: That part of the Southeast Quarter of the Southwest Quarter of Section 8, Township 27,Range 21,Washington County, Minnesota, lying West of the East 440.13 feet thereof and lying North of the South 330.00 feet thereof. Said property consists of a 2.2 acre tract which is part of Lot 2, Block 3, in the proposed plat of GATEWAY NORTH FIRST ADDITION, Washington County, Minnesota and is depicted on the attached Exhibit B. • CAH-225312v6 CT160-91 EXHIBIT B • Map Depicting Property 110 • CAH-225312v6 CT 160-91 EXHIBIT C • Gateway Aesthetic Controls Policy • • CAH-225312v6 CT 160-91 ARCHITECTURAL GUIDELINES BUILDING ORIENTATION • Site planning concept of multiple buildings with an emphasis on pedestrian connections through the site, front of storefronts, and to adjacent residential neighborhoods. • The corner sites at the major intersections along 80th Street shall incorporate groupings of small buildings near the road with site amenities such as plazas or fountains. • The orientation of buildings shall take advantage of available view sheds of future development sites where possible. • Development shall try to achieve an aggregate of green area throughout the site of 30 percent or more. • Fronts of buildings shall orient toward major roadways where feasible and service areas of tenants shall orient to the rear of the buildings where feasible. • Buildings should be located adjacent to roadways where feasible and practical. • BULDING DESIGN Building Mass • Varying scale of buildings shall be encouraged. • Varying rooflines to create interest in design styles shall be encouraged on multi- tenant centers. • Large areas of blank wall surface facing street frontages is discouraged. Facade Design • Canopies and specific architectural accents will be encouraged on a case-by-case basis. The style and characteristics must be included on all tenants within a multi- tenant project. • Architectural character will be consistent on all buildings within master plan. • A variety of storefront designs are encouraged in order to enhance the pedestrian shopping experience. • The appearance of two stories through the use of upper windows shall be CAH-225312v6 CT 160-91 • encouraged on one-story shops, particularly in centers with higher wall façades such as big box users. • Masonry detailing such as soldier coursing or patterning is encouraged. • Building character shall reflect the attractive and pleasant nature of the desired shopping and dining experience. • The use or cornices, ornamental lights, and other architectural details is encouraged. Building Materials • Materials shall be selected for suitability to the type of buildings and the design in which they are used. Building walls shall be finished in aesthetically acceptable tones and colors that complement the tones and color of neighboring buildings. A rich reddish brick color shoall predominate in the Grove Plaza area. Earth tones shall be the predominate colors within redevelopment districts. • Materials shall be a durable quality. • Exterior wall treatment, on all four sides, such as brick, natural stone, decorative concrete block, stucco, and EFIS, shall be encouraged. Decorative metal panels • may be used as architectural accents but not as the primary exterior material. • All wood treatment shall be painted and weather proofed. • Colors and specifications of masonry and stucco colors shall be consistent throughout the development district or project. • Blank single masonry walls must consist of 25 percent decorative masonry variation in color, texture, or surface. • Rear of buildings shall be integrated colored rockface block in a color to match predominant brick color. • All sloped roof elements must be simulated architectural shingles or acceptable architectural metal roofing, such as a standing seam metal roof. Doors and Windows • Canopies shall be encouraged at entryways where appropriate. • Window openings may be modulated to scale and proportion complementary to the architectural style. Maximize storefront opportunities to avoid long expanses of blank walls at street fronts. A minimum eight feet of clear space shall be provided from sidewalk elevation to the CAH-225312v6 CT160-91 lowest point of a canopy. • Window frames shall be constructed of prefinished metal. • Windows and doors shall be glazed in clear glass. Mirrored windows are prohibited. SCREENING • Loading areas, mechanical equipment, or other utility hardware on ground, roof, or building shall be screened from public view with materials similar to the adjacent building material or landscaping. When natural materials are used as a screen, the screen shall achieve 75 percent opacity year round. LANDSCAPE AND SITE TREATMENT Planting • Plant material is to be utilized within the master plan area as an aid to provide continuity within the area and to provide a recognized definition of its boundaries. • Parkway-like street trees will be utilized along all external and internal roadways. • Unity of design shall be achieved by repetition of certain plant varieties and other streetscape materials and by correlation with adjacent development. • • Entry points into the site are to be significantly landscaped and are to be designed with a common theme. • Plant materials are to be utilized within parking lot islands with grouped massing of landscape encouraged in parking lots. • All loading service and utility areas shall be screened from public roads. When natural materials are used as a screen, the screen shall achieve 75 percent opacity year round. • Preservation of natural areas is encouraged where possible. • Plant material shall be selected in regard to its interesting structure, texture, color, seasonal interest, and ultimate growth characteristics. • Where building sites limit planting, the placement of plant materials in planters or within paved areas is encouraged. STREETSCAPE • Benches, trash receptacles, and ashtrays shall be of a color and style compatible • with the project architecture. CAH-225312v6 CT 160-91 • Sidewalks in front of retail shops shall incorporate planting beds or planters up against blank wall areas. . Ornamental pedestrian light fixtures shall be of a color and design compatible with the established city streetscape. . Brick inlay, exposed aggregate, colored concrete, or similarly enhanced pavement treatment is encouraged. PARKING . When determined appropriate, commercial buildings are to accommodate bicycle/motorcycle parking areas and bike rack. . Cross parking between sites is encouraged. The parking needs of individual tenants will be reviewed to determine the amount of shared parking estimated. . Parking stalls shall be 9 feet by 20 feet and drive aisles 24 feet ( 64-foot bay spacing) . Parking lot layout shall include clear, direct traffic movement throughout the site. • LIGHTING . Lighting shall provide continuity and consistency throughout the area. All parking lot lights shall be uniform in style, color, and height. Maximum pole height of 40 feet in parking areas, with lower light standard elevations for pedestrian-based locations. . Exterior wall lighting shall be encouraged to enhance the building design and the adjoining landscape. . Lighting styles and building fixtures shall be of a design and size compatible with the building and adjacent areas. Ornamental lighting shall be encouraged. . Excessive brightness shall be avoided; lighting shall be downward directed and comply with ordinance lighting standards. SIGNAGE . All signage must meet existing code standards. Signs not allowed include: ♦ Rooftop signage ♦ Signs painted on building ♦ Electronic reader boards • ♦ Flashing or motion signs ♦ Pole signs CAH-225312v6 CT160-91 • Signage must maintain consistent metal surround color throughout the development district or project. • Pylon signs shall be consistent in height and square footage with the ordinance. • Pylons must be of masonry brick to match buildings and reflect architectural character and detailing of the project. Exceptions will be considered if the pylon is constructed of higher quality materials that complement the buildings. • Building signage shall not overpower architectural character, but serve as identity. • Low entry monuments not to exceed 8 feet may be placed at major entries for identification of center. • Freestanding signs must be located outside of public right-of-way and cannot negatively impact traffic sight distances. • H:\Oakwood Commercial PA 0403 kims revision.doc • • CAH-225312v6 CT160-91 • EXHIBIT D Permitted Uses 1. Art studios, interior decorating studios, photographic studios and music studios 2. Banks and other financial institutions without drive-through facilities 3. Barbershops or beauty shops 4. Business Offices 5. Clinics for human care 6. Collection offices or public utilities 7. Computer services, sales, and the sale of office machines other than at retail. It is the intent of this entry that such uses will be permitted where customers come to the office to observe demonstrations of the use of equipment, but that it does not permit retail sales or show rooms for walk-in trade 8. Dance studios 9. Employment agencies 10.funeral homes or mortuaries 11.Medical and dental office/clinic services 12.municipal uses where the use conducted is customarily considered to be an office use 13.Offices for administrative, executive, professional, research or similar organizations, and laboratories having only limited contact with the general public; where these uses are permitted, no merchandising is permitted to be sold on the premises 14.Opticians and optometrists • 15.Radio and television studios 16.Travel bureaus/agencies 17.Antique shops 18.Apparel shops 19.Appliance sales and service 20.Bakery goods and baking of goods for retail sales on premises and limited distribution and catering 21.Bicycle sales and repair 22.Books, magazines and stationery and newsstands 23.Business machine sales and repair establishments 24.Camera and photographic supplies 25.Candy, ice cream, popcorn, nuts, frozen dessert, soft drinks or confectionery stores, excluding drive-up type 26.Carpet, rug, linoleum and floor coverings 27.China and glassware 28.Clothing dry cleaning and laundry pick-up stations, including incidental pressing and repair 29.Clothing stores, including dressmaking, millinery and tailor shops 30.Costume and formal wear rental/sales 31.Delicatessens 32.Department and variety 33.Drugs 110 34.Dry goods and fabrics 35.Electrical appliance sales and repair • 36.Florists 37.Fur goods 38.Furniture, upholstering, picture framing, interior decorating studios 39.G ifts 40.hardware 41.Hobby supplies 42.Jewelry, time pieces, collectibles, silverware sales and repairs 43.Leather goods and luggage 44.Locksmiths 45.Music/record stores 46.Musical instrument sales and repair 47.0ff-sale liquor 48.Office supply and equipment 49.Orthopedic and medical appliances 50.Paint and wallpaper 51.Photographic studios, including the development of film and pictures 52.Print shops/photographic copying 53.Radio and television sales and service 54.Restaurants, classes 1, 2, and 3, except for drive-through 55.Sewing centers, machine sales, and sewing classes 56.Shoe sales and repair 57.Sign shops, limited to over-the-counter retail sales of signs, banners or other related 41111 graphic imagery 58.Signs in accordance with provisions of Title 9, Chapter 8 of Zoning Code 59.Sporting goods 60.Accessory uses to the above in accordance with City ordinances 61.Financial, photo processing or restaurant drive-through facilities as a conditional use and with Council CUP approval 62.0ff street parking F:\USERS\RSCHROED\Gateway Permitted Uses.doc • • CITY OF COTTAGE GROVE MINNESOTA To: EDA Members From: Michelle A. Wolfe, Assistant City Administrator Date: June 4, 2003 Subject: Proposed 2004 Budget 2004 EDA Budget Staff has begun preparation of the 2004 budget. Attached is a proposed EDA budget for your consideration. The budget as proposed represents a 13.95% decrease, or $24,850 less than the 2003 budget. There are several reasons why we were able to accomplish a budget decrease. • At this time, a salary freeze is assumed. • We took a hard look at actual expenditures over the past two years. In the line items 4300, 4301, and 4302 we have been spending significantly less than budget. These are • often difficult line items to budget, since one project can require enormous costs. However, we have found over the past several years of doing projects that most of our costs in these areas can be assigned to specific projects, and are therefore not paid from the EDA fund. • The advertising budget has been significantly reduced for 2004. This was at the direction of City Council, but staff is comfortable with the proposal. The EDA has discussed for a few years a strategy to hit advertising pretty hard for a few years, and then drop back once our theme and logo are well-established. We will be able to continue our marketing efforts through our very successful direct-mail campaign in 2004; all the costs associated with the direct mail campaign have been preserved in the proposed budget. • Major membership dues (Metro Economic Development Partnership and the Chamber) will not increase for 2004. • Increasing golf tournament revenues have offset our expenses for hosting the tournament. 2004 Trust Fund Budget The only known potential expense for the Economic Development Trust Fund budget is Gateway North expenses. At this time it is estimated that $400,000 will be expended as per • the approved budget for the project. In addition, both this budget and the EDA budget reflect the $30,000 transfer from the Trust Fund to the EDA fund that began in 2002. NA CITYNESOTOF COTTAGE GROVE • .. MI __AC ACTION REQUESTED By motion, approve the proposed 2004 EDA and Trust Fund budgets, including any changes recommended by the EDA. G:\Economic Development\E D A\Documents\2003\June Budget.doc • • I FUNCTION DEPARTMENT DIV NO ACTIVITY General Gov't Economic 285-12 EDA Development MISSION The Economic Development Authority works with its partners to encourage business and industry, and the creation of quality jobs in the City of Cottage Grove using all tools and methods that are appropriate. As we implement this mission, we will be mindful of the following guiding principles: Encourage quality commercial and industrial development that enhances the quality of life for Cottage Grove's citizens and is compatible with the City's Comprehensive Plan. Utilize sound financial practices in using incentives to attract and expand businesses in the community. Consider the use of incentives in instances where they will promote quality jobs and development for the City. Recognize the interdependence of the private and public sector in a healthy community and foster a spirit of cooperation between the two • sectors. DESCRIPTION OF ACTIVITY The Economic Development Authority is a paid group of citizens or businesspersons that provide public development in various activities to promote economic growth in the City. Activities include strategic planning, program implementation, financial program management, and industrial park development. The Economic Development Team is responsible for the administration, coordination and implementation of all activities included in the Economic Development Authority 2000-2005 Strategic Plan. Time is focused around business retention, expansion, attraction and resource management. MAJOR OBJECTIVES FOR 2004 1. Attract at least three new businesses per year to the Industrial Park. 2. Secure at least two new restaurants. 3. Complete a master plan for redevelopment (including Cottage Grove Plaza, G-Will • Plaza). 4. Develop a master plan for single-family residence - $350K + - for each section of town; a different (one) section will be completed each year. 5. Develop an annual Marketing Plan to heighten awareness of Cottage Grove in the development community. 6. Provide ongoing support to the Economic Development Authority by coordinating meetings and events in 2004. 7. Continue to work with Industrial Park owners in developing and promoting the Cottage Grove Industrial Park. 8. Maintain the City's Economic Development WEB Page. 9. Implement business retention and expansion program. 10. Monitor changes in legislation regarding Economic Development tools and other areas that impact the City's ability to attract and retain jobs and tax base. 11. Successfully market the Oakwood commercial properties to create a high-quality development 12. Coordinate the redevelopment of Cottage Square mall. 13. Continue the joint business appreciation program with River Oaks Golf Course and • Cottage Grove businesses. 14. Continue working with the Cottage Grove College Center to promote the permanent location of a college center in Cottage Grove. IMPACT MEASURES Actual Actual Projected Projected Item 2001 2002 2003 2004 Proposals prepared 38 47 30 Developer visits 6 8 8 EDA Meetings 16 15 12 Land (acres) Developed— 11.2 0 3.5 Industrial Land (acres) Developed — 17 21.6 11 Commercial Square feet constructed- 97,696 187,000 35,000 Industrial Square feet constructed- 71,577 166,000 97,000 Commercial • A • OUTCOME MEASURES 1999 2000 2001 2002 2003 1) Number of Businesses expanding in Cottage 12 4 4 7 Grove 2) Number of new businesses locating in 8 2 3 11 Cottage Grove Regular Status Personnel Schedule- FTE's Actual Actual Recommend Adopted Position Title 2002 2003 2004 2004 City Administrator .20 .20 .20 .20 Assistant City .30 .30 .30 .30 Administrator Management Analysts .54 .54 .54 .54 Admin. Secretary .10 .10 .10 .10 Total 1.14 1.14 1.14 1.14 Temporary Status • Personnel Schedule Adopted Adopted Recommend Adopted Position Title 2002 2003 2004 2004 None Summary Budget Program No 9285 Six Month 2001 2002 2003 2003 2004 2004 Actual Actual Budget Actual Recommend Adopted Revenue Taxes 110,356 103,008 125,000 90,000 MVHC 25,512 11,995 Interest 48,179 - 32,000 30,000 Loan - 4,700 4,700 1 Miscellaneous 43.200 81,129 - - Total revenue 227.247 226,517 161.700 124,700 Expenditures Personnel 61,992 79,116 85,700 89,000 Commodities 867 935 600 1,150 Contractual 62,567 52,120 91,800 63,100 Other charges - 500,000 Capital outlay - - - IIITotal 125.426 632.171 178,100 153.250 Fund balance • Beginning 1,376,974 1,477,195 1,101,541 1,115,141 balance Revenue 227,247 226,517 161,700 142,700 Expenditure (125,426) (632,171) (178,100) (153,250) Transfer in (1.600) 30,000 30,000 30.000 Ending balance 1.477.195 1.101.541 1.115.141 1.116.591 1:120038 UDINar9285.DOC • • City of Cottage Grove Department Budget Request O Fund 285 Pera rate 0.0553 I:\2004 Budget\Budget Detail Pages4DET1135.x Department Econ Dev Authority FICA rate 0.0765 Program 1135 Group ins W/C rate 0.0047 Percent 2004 Over(Under) Detail Totals Totals With Prior year Budget 2001 2002 2002 2003 Before Before Budget Budget Before Budget After Budget Object Code Description Actual Actual Budget Budget Budget Adds Budget Adds Additions Additions Additons Additons Personal Services 4100 Salaries/Wages Reg Updated by Finance Wolfe,Asst Admin at 30% Schroeder,City Admin at 20% Barrett,Analyst at 27% Johnson,Scott at 27% Belscamper,Neil at 10% Total Regular FT 70,300 Total 4100 55,752 71,628 64,950 68,100 70,300 70,300 4110 Overtime Total 4110 230 83 100 100 1 100 1 100 1 1 100 4120 Salaries/Wages PIT • Total4120 144 - 1,800 - - - 4141 PERA 1,663 2,216 3,700 3,800 3,900 3,900 - 3,900 4142 FICA 3,903 4,889 5,100 5,200 5,400 5,400 - 5,400 4144 Insurance - - 8,200 9,000 9,000 - 9,000 4148 Workers Comp 300 300 300 300 300 300 - 300 Total Personal Svcs 61,992 79,116 75,950 85,700 89,000 89,000 3.85% 3.85% O Commodities 4200 Office Supplies $720 YTD-CD color printer 1,000' supplies Total 4200 293 452 300 450 1,000 1,000 4210 Operating Supplies 1 1501 1 1 Total 4210 574 483 300 150 150 150 Total Contractual Svcs 867 935 600 600 1,150 1,150 91.67% 91.67% Contractual Services 4300 Professional Svcs Marketing,Brochure design, 15,000 $0 ytd Aerial photos Total 4300 4,027 - 21,000 21,000 15,000 15,000 $0 ytd 4301 Engineering Svcs 5,000 J I $182 vtd Total 4301 451 1,602 7,500 7,500 5,000 5,000 4302 Legal service I 10,000 I $174 ytd Total 4302 8,231 538 12,000 12,000 10,000 10,000 4305 Fees For Service EDA Per Diem: 7 a$30/mtg•12 mtgs. 2,500 Misc.as needed 3,000 Total 4305 2,734 3,972 5,900 5,500 5,500 5,500 4311 Postage Annual Report,Golf Tournament, 2,500 • Mailings Total 4311 1,678 2,216 1,800 2,200 2,500 2,500 Page 1 City of Cottage Grove Department Budget Request Fund 285 Pera rate 0.0553 I:\2004 Budget\Budget Detail Pages\(DF .x Department Econ Dev Authority FICA rate 0.0765 Program 1135 Group ins W/C rate 0.0047 Percent 2004 Over(Under) Detail Totals Totals With Prior year Budget 2001 2002 2002 2003 Before Before Budget Budget Before Budget After Budget Object Code Description Actual Actual Budget Budget Budget Adds Budget Adds Additions Additions Additons Additons 4340 Printing Annual Report 1,500 Marketing Brochure&Post Cards 5,000 Total 4340 - 4,373 6,500 5,500 6,500 6,500 4341 Advertising City Business - Minn Real Estate Journal - Chamber Misc. 500 Public Hearing Notices 300 Misc.Ads 5,000 Total 4341 24,615 20,137 21,400 25,300 5,800 5,800 4350 Insurance 700 (500) Total 4350 300 700 700 200 200 200 4401 Dues&Subscriptions Metro East Development 2,600 Metro East and Chamber dues Business Journal Subs. 100 not increasing Chamber 1,550 EDAM(CA&ACA @175 ea.) 350 misc 150 III Total 4401 4,500 4,541 4,700 4,750 4,750 4,750 4403 Travel:'Training Ass't National Conference(1500'25%) 400 Asst,State Conference(500'25%) 150 TIF Seminar 200 Mileage Reimbursement 300 Local Meetings/Seminars 500 Analyst Seminar 500 2,195 1,986 1,600 2,050 2,050 2,050 4434 Special Events Golf Tournament Expenses 4,700 Misc.Plaques,Etc. 100 Forrnus for Locl Business 500 Tota14434 13,386 11,705 5,300 5,300 5,300 5,300 4445 Sa.as Tax 450 350 500 I 500 I 600 I 500 I I 500 1$321 ytd Total Contractual Svcs 82,567 52,120 88,900 91,800 83,100 63,100 -31.26% -31.26% Captial Outlay 4520 Furniture and Office Equipment 1 1 I 7 Total 4520 - - - - - - Total Capital Outlay - - - - - - #DIV/0! #DIV/01 Other Financing Uses: 4700 Transfers III Total 4700 1,600 - - - - - Page 2 City of Cottage Grove Department Budget Request 0 Fund 285 Pera rate 0.0553 112004 Budget\Budget Detail Pages\DET1135.x Department Econ Dev Authority FICA rate 0.0765 Program 1135 Group ins W/C rate 0.0047 Percent 2004 Over(Under) Detail Totals Totals With Prior year Budget 2001 2002 2002 2003 Before Before Budget Budget Before Budget After Budget Object Code Description Actual Actual Budget Budget Budget Adds Budget Adds Additions Additions Additons Additons 4730 Refunds and reimb Total 4730 - 500,000 - - - Renewal by Andersen DTED Grant Total Other Financing - 500,000 - - - - #DIV/01 #DIV/0! Total Department 125,426 832,171 185,450 178,100 153,250 153,250 -13.95% -13.95% FOOTING ERROR FOOTING ERROR • III 1 Page 3 FUNCTION DEPARTMENT DIV NO ACTIVITY General Economic 12 Economic • Government Development Development Trust MISSION Funds donated or accumulated into this fund are to be used for the furtherance of economic development within the City. The purpose is to enhance economic development opportunities for commercial entities desiring to locate, expand or improve commercial property within the City. DESCRIPTION OF ACTIVITY To further economic development within the City. MAJOR OBJECTIVES FOR 2004 None Personnel Schedule Adopted Adopted Recommend Adopted Position Title 2002 2003 2004 2004 None • Summary Budget Program No 9286 Six Month 2001 2002 2003 2003 2004 2004 Actual Actual Adopted Actual Recommend Adopted Revenue Donation 395,000 385,000 Intergovernmental 250,000 - Rents - 175 Interest 65,199 43,606 25.000 - 30,000 Total Revenue 710,199 428,781 25,000 - 30.000 Expenditure Capital Outlay 99,105 237,842 570,400 240,930 400,000 Contractual 2,250 30.259 - 351 - Total 101.355 268.101 570,400 241.281 400.000 Fund Balance Beginning balance 801,255 1,410,099 1,540,779 965,379 Revenue 710,199 428,781 25,000 30,000 Expenditure 101,355 268,101 570,400 400,000 Transfer Out - (30,000) (30,000) - (30,000) • Ending balance 1,410,099 1,540.779 965.379 - 565.379 BUDGET ADDITIONS None CAPITAL OUTLAY $400,000 Gateway North Redevelopment ADMINISTRATOR COMMENTS 1:12003BUD1Nar9286 • • City of Cottage Grove Department Budget Request Fund 286 1:12004 Budget\Budget Detail Pages4DET928, - Department Future Econ Development III Program 9286 Percent 2004 Over(Under) Detail Totals Totals With Prior year Budget 2001 2002 2002 2003 Before Before Budget Budget Before Budget After Budget Object Code Description Actual Actual Budget Budget Budget Adds Budget Adds Additions Additions Additons Additons Contractual 4302 Legal service Total 4302 2,250 122 0 0 0 0 4350 Insurance 0 0 0 0 0 0 0 Total Contractual Svcs 2,250 122 0 0 0 0 #DIV/0! #DIV/0! Capital Outlay Grove Plaza Pond Advertising/Other 2,702 Streetlights 5,778 Landscaping/Fence 64,703 Contractor 130,437 Engineer 35,094 238,714 Park Grove Pet Hospital Development Fee 29,265 Land acquisition Redevelopment Industrial Park Total 99,105 0 400,000 0 0 Infrastructure Redevelopment-Gateway 159,070 400,000 1111, Other Economic Development 411,330 Total 0 0 400,000 400,000 400.000 Total Capital Outlay 99,105 267,979 800,000 570,400 400,000 400,000 -29.87% -29.87% Other Financing Uses 4700 Transfers out ( 30,000 Total 0 30,000 30,000 30,000 30,000 30,000 Total Financing Uses 0 30,000 30,000 30,000 30,000 30,000 0.00% 0.00% Total Department 101,355 298,101 830,000 600,400 430,000 430,000 -28.38% -28.38% • Page 1 CITY OF COTTAGE GROVE MINNESOTA • To: EDA Members From: Michelle A. Wolfe, Assistant City Administrator (/ Date: June 2, 2003 Subject: Business Subsidies Criteria BACKGROUND The Business Subsidies Act was originally enacted in 1999 and substantially amended in 2000. While the 1999 Act contained a requirement that grantors adopt a set of criteria for awarding business subsidies, the only specific requirement was that the set of criteria contain a policy regarding wages. The 2000 amendments to the Business Subsidies Act specifically require that "criteria may not be adopted on a case-by-case basis" but instead must "set specific minimum requirements that recipients must meet in order to be eligible to receive business subsidies". • DISCUSSION Grantors of business subsidies that had adopted criteria prior to May 1, 2000 are required to have updated criteria in place by May 1, 2003. The EDA cannot grant any business subsidies until the updated criteria have been adopted. We do not currently have any projects that would be affected by this so we have time to conduct the appropriate process and review our criteria. Since the EDA and City of Cottage Grove adopted its criteria in 1999, we must adopt updated criteria. This requires a process of publishing appropriate notice and holding a public hearing. The City Attorney has prepared draft criteria for your review (attached). The document complies with the statutory amendments and meets the requirements of the law. It is slightly lengthier than the existing criteria (also attached) and contains a number of provisions not in the existing criteria. In some cases, the law has changed since the original criteria were drafted and the modifications are required. In other instances, the attorney simply included in the criteria certain statutory provisions which apply whether they are stated or not. This makes the document more comprehensive and reduces the need to refer back to the statute. One area that will require some discussion is the wage target. Typically, the development agreement requires the creation of new jobs at a certain wage level. When we send out intial project porposals, we have been using the minimum wage rate of$11.00 since the beginning • of 2003. During preparation of the devleopment agreement, the wage rate has sometimes been enogitated to a higher rate. The EDA may want to discuss whether or not $11.00 is an appropriate minimum rate to include in the criteria. The attached article provides data CITY OF COTTAGE GROVE MINNESOTA • regarding living wages. It could seem reasonable, given the information in the article, to set the minimum wage rate higher than $11.00. However, in order to ensure that,we do not eliminate the possibility of a good project, staff suggests leaving the minimum in the criteria at $11.00, with the direction to negotiate higher minimum rates whenever possible in development agreements. We have been able to negotiate a higher rate in individual agreements in the past, and anticipate we would be able to continue doing so. It should be noted that while creation of at least one job was a requirement prior to the statute changes, it is now recognized that a project may create benefits that qualify for a subsidy without job creation. The public hearing for the attached criteria is scheduled for the July 8 EDA meeting (notice to be published June 25). This provides the EDA with time to review and discuss the proposed resolution thoroughly. Any changes recommended by the EDA can be prepared prior to the July meeting. The City Council is scheduled to review the criteria and adopt by separate resolution at their July 16 meeting. ACTION REQUESTED Review the attached resolution with proposed criteria and provide direction to staff regarding • preparation of the final resolution for consideration at the July 8 public hearing. Attachments II COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY • BUSINESS SUBSIDY CRITERIA (Revised July 18, 2003) SECTION I. PURPOSE; STATUTORY COMPLIANCE 1.01. The purpose of this document is to establish criteria to be considered by the Cottage Grove Economic Development Authority (the "EDA") in processing, evaluating and reviewing applications for business subsidies for private development. It is the intent of the EDA to comply with Minnesota Statutes, sections 116J.993 through 116J.995, as amended (the "Act"). The EDA hereby adopts the definitions contained in the Act for application in the criteria. 1.02. Business subsidy criteria were adopted on April 19, 2000 and are hereby revised. The EDA has the option to amend these criteria again in the future if doing so is determined necessary or appropriate. Amendments to these criteria are subject to the public hearing requirements of the Act. 1.03. These criteria are intended to set specific minimum requirements which recipients must meet to be eligible to receive business subsidies. The EDA will not adopt business subsidy criteria on a case by case basis. 1.04. In accordance with the Act, all business subsidy requests must comply with the Act and other applicable Minnesota statutes. The EDA's ability to grant business subsidies is subject to the limitations established in the Act. SECTION II. GOALS AND OBJECTIVES 2.01. It is the EDA's intent to advance the following measurable and specific goals and objectives in granting business subsidies: A. Projects must be consistent with the city of Cottage Grove's comprehensive plan and other land use plans or guides for development of the community. B. Business subsidies will not be provided for projects which have the financial feasibility to proceed without a public subsidy. C. Potential recipients will be required to provide such studies, reports, appraisals, financial information or other data as may be requested by the EDA prior to consideration of a request for a business subsidy. 2.02. Business subsidies must be justified by evidence that the project cannot proceed without the subsidy. If tax increment financing is used to grant a subsidy, the • recipient must demonstrate compliance with all statutory requirements of the TIF Act, including the "but for" test. The recipient will be required to provide all RHB-232597v 1 1 CT165-1 documentation necessary for the EDA to make the requisite findings under the TIF Act and the Act. 2.03. Recipients will be required to enter into an agreement with the EDA which is consistent with statutory requirements and which contains measurable, specific and tangible goals. The agreement shall include a commitment for the business to remain in Cottage Grove for a minimum of five years after the benefit date, unless waived by the EDA, and a requirement to comply with the specific job and wage goals established for the project, if any. The agreement must also be approved by the Cottage Grove city council. SECTION III. BUSINESS SUBSIDY CRITERIA 3.01. The EDA recognizes that every proposal is unique. Nothing in these criteria shall be deemed to be an entitlement nor shall these criteria establish a contractual right to a subsidy. The EDA may modify these criteria from time to time and reserves the right to evaluate each project on its individual merits. The EDA may deviate from these criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to the Minnesota state agency charged with administration thereof. 3.02. The following criteria shall be utilized in evaluating a request for a business subsidy: A. Public Purpose. A business subsidy must meet a public purpose, including • but not limited to increasing the tax base. Job retention may only be considered a public purpose if the loss of jobs is specific and demonstrable. B. Increase in tax base. While an increase in the tax base cannot be the sole grounds for granting a subsidy, the EDA believes it is a necessary condition for any subsidy. C. Jobs and Wages. In those instances in which job creation is determined to be a goal, it is the EDA's intent that the recipient create the maximum number of qualifying jobs at the site. This may include jobs to be retained but only if job retention is specific and demonstrable. The wage and job goal must be attained within two years of the benefit date. The EDA may, after a public hearing, extend for up to one year the period for meeting the wage and job goal. A qualifying job is defined as one which pays at least $11.00 per hour. Any deviation from the established wage floor must be documented in conformity with the requirements set forth in the Act. If the EDA, following a public hearing, determines that job creation or retention is not part of the public purpose of the subsidy, the wage and job goal may be set at zero. • RHB-232597v1 2 CT165-1 D. Economic Development. Projects must promote one or more of the following: 1. Encourage economic and commercial diversity within the community; 2. Contribute to the establishment of a critical mass of commercial, industrial or manufacturing development within the area; 3. Increase the range of goods and services available or encourage fast-growing or other desirable businesses to locate or expand within the community; 4. Promote redevelopment objectives and removal of blight, including pollution cleanup; 5. Promote the retention or adaptive reuse of buildings of historical or architectural significance; 6. Promote additional or spin-off development within the community; or 7. Encourage full utilization of existing or planned public infrastructure improvements. SECTION IV. MINIMUM REQUIREMENTS. 4.01 In order for a recipient to be eligible for a business subsidy, the following minimum requirements must be met: A. Compliance with Sections 2.01 A, B and C; B. Compliance with Section 3.02 B; and C. Compliance with Sections 3.02 C or D. SECTION V. COMPLIANCE AND REPORTING REQtiIREMENTS. 5.01. Any subsidy granted by the EDA will be subject to the requirement of a public hearing, if necessary. 5.02 It will be necessary for both the recipient and the EDA to comply with the reporting and monitoring requirements of the Act. 5.03. A recipient may be authorized to move from Cottage Grove within five years of the benefit date only if, after a public hearing, the EDA approves the request to move. RHB-232597v 1 3 CT165-1 2002Annual Report o PARTNERS CO ECONOMIC DEVELOPMENT AUTHORITY CD Jim Wolcott,;President eat Sandy Shiely, Mayor poirt ,, Glen Kleven, Mem ber .• Dick Pederson, Member till "� , ,— -- Gerry Weingartner, Member ,k '� Dike Wenner, Mem ber ini -.4',71 .----2.1.t. ,.,.' .•b :1a ' '+�, e)_ _- r .- 0 nt ... :a With the advent of 2002, and a softening of the national economy beginning in 2001, new dustrial starts slowed from the prior year. In exchange, however, the local retail sector t el lilt a renaissance of sorts. Combined, a total of.$25,989,351 in commercial, industrial, and institutional building permit value was realized during 2002. Over the 2001- CD 2002 period C/I permit value has totaled $85,302,583 exceeding that of any other two year period in Cottage Groves history. To this we added 296 new housing starts in 2002 up from the prior year total of 182 units. Total building permit value for the year was $91,526,613. This rate of value growth was slightly behind that of 2001. As with C/I permit value the 2001-2002 tb period in total value production also exceeded all other prior like periods with a period total of $196,367,622. On February 12, 2002 the Economic Development Authority (EDA) identified six primary goals for the next four years. These goals were reflected upon by the City Council, which in turn 'NS identified five primarygoal areas for 2002 on March 10, 2002. These were revisited on November 26, 2002 for the 2003 fiscal year. Both the Council and the EDA are continuing an emphasis on commercial and industrial development, transportation and transit, housing development, and maintenance and enhancement of public facilities. New Council priorities pit have been added for additional operational strategic and fiscal planning and governance. Facilitation and attraction of quality development within all sectors continues, therefore, to Z receive a high level of priority by both the EDA and City Council. Following is a brief description of projects and project areas currently under development within the community. 0 ®, ; For''information on development opportunities an Cottage Grave call Michelle at (651),456-2882 orR an, at(651) 45 82822 wuvuw.cottage-grove .og econdevcota> ee=govorg '!®1111■ Cottage Grove EDA GROWTH PARTNERS • New 8U44:44.erf.se'Inclade.}fom,e'Depot, Wakrr-ee414; gat-mTCF Bank, anc'the incat'-tenaMtGc tewc y Center! • Major redevelopment pro ecta-underway '^"d ''no'Kohler Department Stored The Gateway North Redevelopment District is a 365- acre area located at the interchange of Highway 61 and 801" _ Street. Originally proposed by the City Council on February 13, 2001 it was formally designated in a joint meeting of the City Council and Economic Development Authority on March 28, 2001, and followed by creation of a redevelopment tax incre- mert district on July 26,2001. The redevelopment x district includes all four quadrants of the Highway 61/80"' Street interchange which included 506,674 square feet of retail and office buildings in addition to public properties and a small a `; amount of residential property at the time of District creation. w Creation of the Redevelopment District was intended to signal , to property owners, and others,the City's intent to pursue rede velopment activities within the district as opportunities arise. plow, ,-r— Further - Further, creation of the smaller tax increment district is intended to provide a financing mechanism for publics . expenditures associated with infrastructure construction or land acquisition within the project area. Development activities have occurred quite rapidly following designation of the district. The City entered into a development agreement with Kohl's Department Stores in July 2001, which will result in a construction start of July 2003. During the inte� period the City has packaged the property required for the project site in addition to construction of a new roadway corridor for Hardwood Avenue that will connect the 80'"Street commercial area to the residential development area at 70th Street. Infrastructure construction began during the fourth quarter of 2002. The 170,000 square foot Grove Plaza Shopping Center is currently being reconstructed following an April 2002 development approval. Included is removal of approximately 60,000 square feet of the existing shopping center in exchange for an 116,000 square foot Home Depot store with a February 13,2003 grand opening. The remaining 42,000 square feet of small tenant space will be renovated and a 28,255 square foot outlot remains available for future development. The City provided enhancements to the storm water system as part of this redevelopment and will provide partial funding toward rehabilitation of the small tenant spaces. Sandwiched in between the Kohl's and Grove Plaza developments is a 5.1-acre site that up until November 2001 was home to the Rose of Sharon Church.The church has since constructed a new facility 70th Street and Jamaica Avenue. On its'previous site is a new 15,120 square foot Walgreen's store that opened in July, 2002,a 12,700 square foot retail center and a 4,500 square foot TCF banking facility, both which opened in December 2002. As a result of these three developments, taxable market values within the tax increment district will at least double to $26,324,300. Additionally,the City is currently working on two more redevelopment phases,the first of which is expected to add over$11,000,000 in taxable market value within the next two to three years. Included in the,_next phase are three new development parcels adjacent to the Kohl's project, one of which is under the control of the City. 'Development review of three additional parcels is currently underway within the same quadrant. A third phase, should the opportunity present itself,would be redevelopment or rehabilitation within the southwestern quadrant of the District. • New}fotel—New Re4taurant! S ' '' Prof- . AddWio a,Commerci.c2j Another commercial hub of the City is located at the Highway 61 interchange with u �wcyyi Jamaica Avenue, one mile south of 80th Street. Up until 2002 there was 561,779 square feet of retail and office users in this area. At the periphery of this area is a new 76 room Country Inn and Suites Hotel which opened in July 2002. Additionally a 4974 square foot Applebee's Restaur� opened in December in front of the'Hotel. These two projects are located on a former 3.1-acre remnant parcel,which had beeW owned by the school district on East Point Douglas Road.The City brokered the initial real estate transaction that provided the opportunity for these two developments. Within the same district is the Pine Grove Development,which contains five commercial parcels. Two of these parcels were developed in 2001'with a total of 23,047 square feet of office/showroom space. A third parcel has been purchased by Wells Fargo Bank with construction of a new facility scheduled for 2003. The other two pads are developed with a future office use and restaurant use in mind At nrpspnt thnsP dPvAlnnmpnt nnnnrtunitiPs remain avaiiahlp ii ,. Cottage Grave EDA GROWTH PARTNERS 3 ,, rir With the adoption of a new Comprehensive Plan in 2000 the City s _ Council created a new Neighborhood Commercial land use ", designation. As a result,in 2001 and 2002 two Planned Unit Developments including approvals for just under 30,000 square �" �� feet of commercial square footage were made available at 70"' { 7" Street and County Road 19 and again at 70`h Street and Hinton -AlAvenue. The County road 19 location, the Shoppes at Almar, is currently under construction. a.. G it k"'j'f'` ,' ,` ,, `a ,n„ -am 1: 'nor I . .. , • 1 vvricorrcca, Park.Contu1.ue4-to-Graw arta/Add/ --- New 13u4uvu ,a4 • Graded/Sites-a re/Now Avow:ladrle! !i4:71:7* 1r a Ithe City has designated the land south of Highway 61 and west of the 1750 acre 3M campus as the Cottage G e Industrial Park for decades, development of the Park did not move forward-until 1998 after the City had op- tioned 40 acres in the prior year. As a result of that land option the 227,000 square foot Renewal by Andersen facil- ity opened in 1999 on 30 acres at Jamaica Avenue and 100"'Street. The Renewal project won the 1998 Business Retention Project of the Year from the Economic Development Association of Minnesota(EDAM). The 11,000 square foot United States Postal Service Annex followed this project on 2.206 acres and the 15,200 square foot CCE Technologies manufacturing facility on 2.468 acres on 95 Street. This past year(2001-2002)three more projects were completed including the 70,000 square foot distribution/office facility for Tradehome Shoes on 4.59 acres,the 42,000 square foot Advance Corporation on 6.6 acres and the 80,000 square foot American AgCo facility on 5.97 acres. These three projects, all located along 97th Street,jointly won the EDAM Best Business Attraction Award for 2002. The industrial park also realized a 187,000 square foot expansion of the Up North Plastics facility, located north of 95th Street and west of Jamaica Avenue. Further,the City has prepared for additional opportunities by grading twenty acres for future development along both 95th Street, east of CCE Technologies, and along 97"'nitiStreet,west of Ameri- can AgCo. As a result we have several lot configurations available ranging in lot depth from just over 300 feet to just under 700 feet. For larger projects,the City can make parcels available off 100"'Street ranging up to 100 acres in size. As of the end of the year the City had entered a letter of intent for construction of the 30,000 square foot Schmid Packaging plant for 2003 construction on 95'Street east of CCE Technologies. ceti-eto ,. Er • New TreatrnevrtPlantUvraler Corr4tructtan4 Wast, _ cuter Treatment • New Interceptor by wu,d'-2004! The Metropolitan Council Environmental Services Division(MCES) provides wastewater treatment for the entire Minneapolis/St. Paul metropolitan area. One of the nine metro treatment plants is located in Cottage Grove within the per er of the 3M Cottage Grove campus at the east end of 110"'Street, east of Ideal Avenue(two miles south of the incl park). This 2.5 million-gallon per day(mgd)plant is currently under reconstruction which will result in a 10 mgd capacity early in 2003 with an ultimate capacity in the 15-20 mgd range upon completion of the project. Concurrent with that development is a new MCES wastewater interceptor to be completed along County Road 19 by mid 2004. As a result of this project the City is preplanning for development opportunities and phasing, the completion of which is timed with availability of the interceptor. Cottage Grove EDA .. ARTNERS n.• . nuof .4 0 • Mui-P y local/rocs,ivprovements4 • New Park/Er RCA&facility! ty!' The two major projects impacting Cottage Grove over the next few years are the$252 million MnDot Wakota Bridge/Highway 61 improvement and the Washington County Hinton/Tower project. Additionally, among municipal improvements the City is in the midst of the next phase of our local pavement rehabilitation project in 2002-2003. These same years also include construction of the new$3 million Hardwood Avenue, which will connect the Gateway North Commercial Redevelopment District with the West Draw residential development area at 70th Street. Construction on the Wakota Bridge/ Highway 61 project began in May 2002. The project includes reconstruction of Trunk Highway 61 from Carver Avenue in St. Paul to St. Paul Park Road in St. Paul Park. All three of the signalized intersections within the City of Newport will be removed in favor of a new interchange near Glen Road. North of 1-494 the existing signal at Highway 61 and Carver Avenue will be replaced with a right-out to northbound 61 with a new interchange at a new Maxwell Avenue/Bailey road connection. All of this will upgrade Highway 61 to freeway standards within the entire project area by the end of 2003.The St. Paul Park interchange will be completed one year later. The entire project, which includes doubling the size of 1-494, will be complete by 2007. The Washington County Hinton/Tower project includes construction of a north-south highway connection between 65th Street in Cottage Grove to north of Military Road in Woodbury. With reconstruction of Hinton Avenue between 65th and 70th the result will be a 4-lane roadway from 80th Street in Cottage Grove to 1-94 providing an enhancement to area commuters desiring an alternative to Highway 61. The project is scheduled for completion during 2003-2004. The$9.5 million Cottage Grove Thompson Grove pavement rehabilitation project completes a multi-year pavement reconstruction program within the community. Included will be complete reconstruction of every municipal roadway within th� southwest portion of the community. Underground infrastructure will be replaced as necessary throughout the project as well. Construction will be complete by the end of 2003, as will that of Hardwood Avenue. Hardwood Avenue is being facilitated by the Gateway North redevelopment, providing a conduit for residents on the north side of the community to access retail opportunities within the central business district of town. Also transportation related is the creation of an approximate 500 stall permanent park and ride. The park and ride will be located along West Point Douglas Road, near the Highway 61/80"'Street intersection. This improvement, coupled with the expansion of express bus service to downtown Minneapolis is projected to further increase ridership from the community. Over 290 New HoU -Uvtity CIA/2002! S LAMIA/14100,1DeveLop ,,- Residential construction in 2002 was somewhat more rapid than that experienced in 2001,which included 182 new residential units. In both years the split between new townhome versus single family homes has been almost even. Although new townhome projects such as the 38 unit Almar Village, located at County Road 19 and 70th Street,and the 124 unit Pine Grove at Cottage Grove project by D. R. Horton, north of East Point Douglas are almost complete, there have been new attached housing projects approved.Orrin Thompson will be finishing up their 138 unit Lodges at Pine Summit most likely in 2003, but will continue providing attached doubles,townhomes and lodges in their new 290 unit project located at the corner of 70th Street and Hinton Avenue. As of year-end 2002 we saw construction of 296 new housing units, 175 of which were attached units. The West Draw area of the community has also seen an increase in new single family development approvals as Pulte Homes received approval for a 116 lot-3rd phase of their Timber Ridge project. The 1St and 2nd phases are under construction and contain 49 units at the corner of Harkness Avenue and 70th Street. Newland Communities received approval for 175 urban and 9 rural lots within the Highland Hills project, located north of 65`h Street.This project, as well as the Pulte project will have sites graded and infrastructure installed to permit home construction in early spring 2003.Orrin Thompson continues to construct within their 205 unit, 177-acre, single family development, Pine Summit. They are in their 5`h phase of construction with approximately 54 home sites still available.Two local builders, Custom One Homes and Kingsborough Homes have sites available in their two projects, Hidden Valley and Kingsborough Woods. The City is developing plans for the next MUSA expansion within the community,which will be located in the eastern portion i the community.The East Ravine will open up approximately 3,500 acres for future development opportunities, primarily residential. Timing for completion of the planning exercise is scheduled to coordinate with the expansion of the regional treatment plant and interceptor construction. • 2003 Development Update Introduction The first half of 2003 has brought with it the opportunity to build on the creations of the past few years. Included has been continued emphasis by the City Council on maintenance of our A-1 bond rating and fiscal stability enhanced by tax base and economic opportunity growth along with continued quality commercial, industrial and housing developments. Transportation and transit projects, and maintenance and enhancement of public facilities are also primary goal areas. Responding to these policy dictates the City has facilitated the completion of • $85,302,583 in commercial, industrial, and institutional building permit value during 2001-02; exceeding that of any other two-year period in our history. Moreover, the $121,571,368 in C/I/I permit value from 1998 to 2002 exceeded that of the entire prior sixteen years at three times the annual average rate of construction value from the prior period (data is unavailable beyond that point) pointing out just one of many signals that the Cottage Grove economy and fiscal future is on an upswing. In the housing market, Cottage Grove has attempted to maintain a consistent rate of development. Over the 30 years of the 1970's through the 1990's, the typical annual housing unit average constructed within the community was 242 units. The range was from a low of 46 in 1982 and 77 in 1983 to a high of 410 units in 1992 and 406 in 1994. However, over that time, only 10% of the years exceeded 400 units and another 13% represented years with construction below 150 units. From 1998 through 2002, we realized average annual housing construction of 206 units. From these five years 2002 was the peak year with 296 new homes. The Council continues to target past housing rate trends into the foreseeable future. The result is that our estimated 2004 population of 32,760 is forecasted to hit 38,870 for 2010 and 44,866 by 2020. Facilitation and attraction of quality development within all sectors continues to receive a high level of priority by both the City Council and its' Economic Development Authority (EDA). Enhancements of aesthetic and quality guidelines for City facilitated • developments is the#1 priority within the development arena. P. R . A na a i x, a., .F 4 ..l .c am. _ta v ff ...G.,t3 •,=6f. 4z, • The next thirty years will be an exciting period in Cottage Grove as amenities; job and retail offerings grow within the community and nearby locales. Following are the more recent enhancements currently under development within the community. We're Redeveloping our Gateway North District ! The Gateway North District is a 365-acre commercial redevelopment area created by the City Council and its EDA on March 28, 2001. Comprising the four quadrants of State Highway 61 and 80th Street an underlying tax increment redevelopment district was created on July 26, 2001 to provide a revenue stream for municipal costs associated with redevelopment contemplated for the area. At the time of district creation 506,674 square feet of retail and office uses were contained within the district. Since then, we developed the 5.1 acre Gateway Center, which contains 32,320 square feet in three buildings on the former site of the Rose of Sharon Church at East Point Douglas Road south of 80th Street (store openings from July to December 2002). Further, a new 116,000 square foot Home Depot store opened on February 13, 2003 as part of the adjacent Grove Plaza shopping center redevelopment. The City is completing the land development for a new 86,000 square foot Kohl's store across from these projects north of 80th Street, which will begin construction during 2003 for an October 2004 opening. This project included the packaging of twenty- • seven separate land parcels that will become not only part of the Kohl's development but also provide land for a new mile long 70th to 80th Street Collector(Hardwood Avenue), a commercial access street (Hardwood Court), realignment of East Point Douglas Road, and additional commercial development parcels. Included will be a 3.846 acre City owned site east of Kohl's plus an additional 3.87 acres in two parcels just north of Kohl's. To the west of this development is additional property being considered for additional commercial expansion. In 2003 we celebrated the opening of the 4590 square foot Park Grove Pet Clinic at 7663 79th,Street, which was relocated from the Kohl's project area and we anticipate the ground breaking for the 28,000 square foot Oak Park Commons development at 7420 80th Street, a multi-tenant project also generated out of the Gateway redevelopment. Of the six businesses dislocated by the Gateway project all either have relocated or plan a new location within Cottage Grove. We also anticipate a new 4,200 square foot small tenant retail building on the remaining Grove Plaza property along with redevelopment of the small tenant spaces between Home Depot and Rainbow Foods completing the repositioning of that 20 acre property far into the future. We also continue to work with property owners toward redevelopment or rehabilitation of additional large parcels within the Gateway. At present additional projects are expected but not under contract. S GPOWTH u • We're Building Out Our Commercial Amenities ! A second commercial hub for the community exists at the eastern quadrants of the intersection of State Highway 61 and Jamaica Avenue, one mile south of 80th Street. Located in the geographic center of the community this district was created in the early 1990's and contains just over 600,000 square feet of commercial space. Included are the 2002 developments of the 76 room Country Inn and Suites Hotel and 4974 square foot Applebee's Restaurant, both on the former 3.1 acre School District 833 Program Center outlot. Also included is the five lot Pine Grove development, southeast of Target, of which two parcels were constructed in 2001 totaling 23,047 square feet of small tenant space. Of the remaining three parcels a new Wells Fargo Bank Building broke ground in May for a fall 2003 scheduled opening. In addition, within the district we realized the reuse of an existing property off East Point Douglas Road, north of Jamaica with the Chiropractic Partners and Regina Medical Clinic as new tenants in February 2003. We also anticipate the new construction of a relocated Subway store and reconstruction of the BP Amoco at the intersection of East Point and Jamaica yet this year. Upon the adoption of the 2000 Comprehensive Plan the City Council created a new Neighborhood Commercial land use designation. As a result, in 2001 and 2002 two neighborhood centers were approved for development. The first of these, the 18,600 square foot Shoppes at Almar is under construction and will open with nine small tenant • spaces in 2003. The Council also approved a "C" store for the corner of this development located at the southwest quadrant of County Road 19 and 70th Street, with construction expected yet in 2003. Two additional building pads beyond these exist at this development site. A similar neighborhood center has been approved at the intersection of 70th Street and Hinton Avenue. It is expected that we will see a 2004 construction project at this site after completion of the Hinton/Tower road improvement project. We're Diversifying our Industrial Base ! The City is now home to approximately 2,550,000 square feet of manufacturing and other industrial facilities of which about 1.6 million is contained on the 1750 acre 3M Cottage Grove campus. Cottage Grove is extremely fortunate in being home to one of three pilot plants in the 3M system. With that significant presence, however, comes a need to diversify our tax base and employment opportunities within the community. Such being the case, the City Council created a venture in 1997 to aggressively pursue additional manufacturing presence within the community. As a result, since 1998 the _ City has realized 668,560 square feet of new industrial growth outside of the 3M campus within the industrial district. Included is the 1998 EDAM (Economic Development Association of Minnesota) Business Retention Project of the Year (Renewal by Andersen) and the 2002 EDAM Best Business Attraction award (for the coordinated TradeHome, Advance, and AgCo projects). For 2003 we realized the rt a.W opening of the Up North Plastics 187,000 square foot expansion in February and theII ground breaking for the Schmid and Sons packaging plant due to open on July 14 located just east of CCE Technologies on 95th Street. We have also prepared additional sites for development with infrastructure completed. In 2003, we became the first City to win back to back EDAM awards, this year with recognition as having the best marketing program among all entries. We're Providing Infrastructure for our Future 1 Starting in 2002, we have arrived at, perhaps, the most significant infrastructure Wakota / million In 2002 the $252Bridge construction period in our history! May, Highway 61 improvement project began. This project includes reconstruction of Trunk Highway 61 from Carver Avenue in St. Paul to the St. Paul Park interchange at 70th Street. Only a small portion of that project is actually within Cottage Grove, but the , construction period impacts and the resulting improvement to the Highway 61 and i of this project through , Highway 494 corridors will be dramatic. The Highway 61 portionp 1 9 the City of Newport is scheduled for completion by the end of 2003. The St. Paul Park interchange (70th Street) is due to be complete one year later. The entire project, which 1 includes doubling the size of 1-494, will be complete by 2007. At the same time Washington County is improving Military Road through Cottage Grove and is constructing the long awaited Hinton-Tower connection between Cottage Grove ,„ and Woodbury. With the latter construction project, we will have a 4-lane roadway fromID 80th Street to 1-94, providing an enhancement to area commuters desiring an alternative to Highway 61. Both projects will be complete by the end of 2004. Breaking ground in May 2003 was the new 5-acre Park and Ride facility on West Point Douglas Road between Jamaica and 80th Street. This facility, including almost 500 parking stalls, is constructed to allow for integration of rail transit service once the Red Rock Rail corridor commuter rail transit project is funded in the future. In 2002, with approval of the Transit lot came an expansion of bus transit to include express service to and from Minneapolis. This route was put into place in June 2002 and with each month to date, ridership continues to increase. In 2002, we began another phase of the pavement management project (reconstruction of municipal roadway infrastructure). The current $9.5 million two-year project will complete reconstruction of every roadway within the Thompson Grove neighborhood south of highway 61. Subsequent to project completion, by fall 2003, we are not projecting additional pavement reconstruction projects until the 2007-08 timeframe. However, new construction, with development of new neighborhoods, is an annual occurrence and one, which is managed by the departments of Community Development, Engineering and Public Works. Additionally, we currently have a new mile long collector, Hardwood Avenue, connecting 70th Street to 80th Street just west of Harkness Avenue under construction. While this project began at the tail end of 2002, • and while it will open for traffic by the fourth quarter of 2003 it will not be entirely complete until mid-year 2004. The City is also benefiting by the expansion of the Eagles Nest wastewater treatment facility due to be complete during 2003. This expansion from 2.5 million gallons per day (mgd) to 10 mgd will provide for our sanitary sewer treatment needs through the entire buildout of the community. Also under construction is a new primary waste interceptor through the community and into Woodbury along County Road 19. The Cottage Grove portion of this project is scheduled for 2003-04 completion and will open the East Ravine portion of the community to development pressures. Both of these projects are owned by the regional Metropolitan Council Environmental Services. We Are Adding Housing Choices Residential construction in 2003 brings a variety of housing styles and types to the City. Approximately 1,000 new homesites were created in the last year, providing single family homes, townhome, and twinhome development opportunities. The west draw area continues to be the primary area of residential growth. Located in the northwest section of the city, the rolling hills, wooded slopes, and open fields provide differing environmental settings for each of the projects. Pulte Homes continued their single family home construction obtaining approval for the • Timber Ridge 5th development located south of 70th Street and another 61 unit upscale single family project, Timber Ridge 4th, north of 70th Street. US Homes' Pine Arbor project will be ready for construction late summer. The project combines 64 twinhomes, 42 townhomes and 184 lodge units on a 70 acre site located in the northwest quadrant of 70th and Hinton. The Highland Hills project second phase is open with 48 urban single family lots and 8 rural single family sites. Home construction continues in the Hidden Valley project with the lith Addition adding eleven lots to the existing inventory. In the southwestern portion of the city, a new mixed residential project was approved, entitled Mississippi Dunes Estates. The predominant housing style is single-family with 178 units, however there are 134 multi-family units also; 20 patio homes, 12 on-level twinhomes, 55 two-story townhomes and 48 back to back townhome units. To prepare for future development in the East Ravine area of town, the city has embarked on a pre-design project that will address future land use in the area, as well as needed infrastructure and area amenities. The process began in early spring and will continue for approximately 18 months. As part of the planning process, an AUAR will be conducted that will cover all lands within the East Ravine Area. •