HomeMy WebLinkAbout1999.06.08 PACKET CITY OF COTTAGE GROVE
•
ECONOMIC Secretary
DEVELOPMENT
AUTHORITY
AGENDA
TUESDAY, JUNE 8, 1999
7:30 A.M.
1. Call to Order
2. Roll Call
3. Approval of May 11, 1999 Minutes
• 4. Business Items
A. Project Updates
B. EDA Annual Report
C. Economic Development Trust Fund Policy
D. Comprehensive Plan
(a). Grey Cloud Island
(b). Economic Development Section
E. Genesis Business Center Site Visit
F. Fiscal Impact Study—Grey Cloud Island
G. Resignation of Donna Boehm
H. Golf Course Lease Approval
I. For Sale/Lease Information
5. Miscellaneous Business Items
6. Adjourn
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Next Meeting: July 13, 1999
F:\GROUPS\PER_ECON\KEB\EDA Packets\1999Wgendas\June.doc
City of Cottage Grove
•
Memo
To: Economic Development Authority Members
From: Michelle A. Wolfe, Assistant City Administrator
Date: 06/04/99
Re: Project Updates Item 4A
METRO EAST
We did not receive any Metro East RFP's in May. We do not have any new information
about any pending projects. Staff has been working with Metro East in relation to a
DTED project. We can provide more information at the meeting.
411
HOTEL/RESTAURANT/OFFICE
Discussions continue between the hotel developer and the owner of the site. An offer
has been made on the property. We can provide more information at the meeting.
WAREHOUSE PROJECT
Discussions continue on the warehouse project for the Industrial Park. Welsh Company
has provided a rendering of the potential project. Currently proposed is a first phase
150,000 square foot warehouse on property to the west of Renewal, with an intent for a
future similarly sized project if this one is successful. The concept is non-owned
warehousing several vendors.
In addition, I have had some inquiries about space to lease. I connected the inquiries
with those who have expressed interest in building in the industrial park.
FACTORY OUTLET CENTER
Mayor Denzer, Councilmember Wolcott, City Administrator Schroeder and I spoke with
a consultant who specializes in locating factory outlet centers. At this time, it appears
this was a consultant offering his services to assist the city with attracting an outlet mall.
• We indicated we were not interested in these services. However, I did forward a letter
to the consultant with information about the city, inviting him to visit anytime he is in the
Twin Cities area.
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POST OFFICE
Work continues on the site plan. Staff is working with the property owner on the •
drainage issue and expects that this will be resolved in the next couple of weeks. This
issue is key to moving ahead with the project.
GROVE PLAZA
Staff met with EBL&S, KKE Architects, and attorney Peter Coyle on May 12. It was
determined during the meeting that there would be four conditional use permits and a
variance required for the project as outlined. Work is being done on Phase I and Phase
II site plans. I am working to set up a meeting with Peter Coyle regarding the possibility
of creating a redevelopment district. I may have more information at the EDA meeting.
RENEWAL BY ANDERSEN
The opening of the new Renewal facility was held on Wednesday, June 2. Some
members of the EDA, along with city staff, were in attendance. Mayor Pro Tern Jim
Wolcott participated in the ceremony. The City's gift of hats for the employees at the
facility has been delivered. Tours of the plant were provided to those in attendance.
In July, the next DTED Progress Report will be due. I will be working with
representatives from Renewal to complete the report. This will include updated
information on hiring and expenditures. •
MISCELLANEOUS
We had an inquiry regarding a truck transport company. We have not heard anything
further since sending out the information and doing a follow-up call. There has been
some interest in the vacant Pizza and Pasta retail space. A graphics center expressed
interest in locating in Cottage Grove. We have had contacts with brokers looking for
existing buildings as well as lots for sale in industrial zoning. We will follow up on these
contacts in the coming week.
We are evidently one of four communities being looked at for a business expansion
project that I do not have much information about at this time. Key decision-makers are
out of the office until June 9, so I hope to find out more after that time.
Planning Update: The grading permit was issued for Kingsborough Woods. Site
grading to begin week of June 7. The Julkowski's withdrew the application relating to
the building of three twin homes.
TIF Update: Finance Director Liz Johnson is working on the decertification of TIF 1-7.
We can provide more information at the EDA meeting. •
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• 4: iCity of
Cottace Grove MEMO
Minnesota
TO: Michelle Wolfe, Assistant City Administ ato
FROM: Steve Barrett, Management Analyst
DATE: June 4, 1999
RE: EDA ANNUAL REPORT
Here is the status of the 1998 EDA Annual Report:
• The pictures for the cover and inside pages were taken during the weeks of May 24 and
May 31.
411 • The best pictures were chosen, and the report was delivered to Graphic Design, Inc. on
Thursday, June 3.
• The printer will do a quick scan of the pictures and lay out the report. They will send me a
preliminary layout for review in 1-2 working days. (June 4 — 8)
• Once the layout is satisfactory, the printer will produce a color proof copy for our review.
This will take 2 — 3 working days. (June 8 — 10)
• If the proof is satisfactory, they can begin mass production. This will take 2 — 3 working
days. (June 10 — 12)
The printing time is taking a little longer than expected due to the addition of pictures on the
cover of the report.
•
• City of Cottage Grove
Memo
To: Economic Authority Members
From: Michelle A. Wolfe, Assistant City Administrator
Date: 06/04/99
Re: Economic Development Trust Fund Item 4C
At the May 19, 1999 City Council meeting, action was taken regarding the
creation of an Economic Development Trust Fund. The City Council adopted a
Resolution creating the Trust Fund, and adopted another resolution accepting the
donated funds from LSP Cottage Grove.
• The donation of funds to the City by LSP Cottage Grove has been contingent
upon the city confirming and assuring that any donated funds would be restricted
solely to economic development purposes. Therefore, the City has set up a
designated fund that restricts use of any donated funds.
At the June 2 City Council meeting, the City Council adopted an Economic
Development Trust Fund Management Policy. I have included a copy of the
adopted policy for your information.
Attachment
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G:\MAw\EDA Memos\June 99 Trust Fund.doc
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1111
Memorandum
To: Honorable Mayor and City Council
Ryan Schroeder, City Administrator
From: Elizabeth Johnson, Finance Director l
Date: 06/01/99
Re: Trust fund management policies
Introduction
The City accepted a donation from LSP Cottage Grove Limited Partnership at the
regular meeting of May 19,1999. In doing so, the Council also accepted placing the
donation in the newly created Economic Development Trust Fund and abiding by trust
fund management policies. •
The attached document is the proposed trust fund management policy for discussion.
Discussion
The intent behind the policy is to provide a structure for use of funds that allows for
economic development activity, but also seeks to preserve a portion of the initial
donation. The reasoning for this is that the core portion of the initial donation will
generate investment income in the future. In essence, it acts like a"seed"that will grow
future funds.
The proposed policy only allows economic activity. It specifically disallows using the
funds for residential or general government purposes. It also does not allow using funds
to reimburse the City for projects already committed.
It is hoped that the policy as proposed may serve as a model for future fund
management policies
Requested Action
Adopt policy as proposed . ..
•
I'CLER QTnmt Furtf Management Memo.doc 1
CITY OF COTTAGE GROVE
ECONOMIC DEVELOPMENT TRUST FUND MANAGEMENT POLICY
411 I Fund Created
There is hereby created a separate fund to be designated as the Economic
Development Trust Fund. This fund shall be used for the furtherance of economic
development within the City. The purpose of the fund is to enhanc cono • oC,a12•
development opportunities for commercial entities desiring to xpand or improve
commercial property within the City. Further, the City Administrator, Assistant
City Administrator and the Finance Director shall administer this fund in
accordance with the provisions set forth. All sources of funds received shall
remain in the fund, except for authorized expenditures, as described below. The
Fund shall be composed of a permanent reserve and a non-permanent reserve.
II. Sources of Funds
The permanent reserve in the fund shall be $150,000. The permanent reserve
may be adjusted from time to time. In no case shall the permanent reserve be
adjusted downward from the above level. The permanent reserve shall be
defined as the principal of the fund. The following sources of funds shall be
deposited into the Economic Development Trust Fund:
A. Donations.
B. Investment Earnings.
Investment earnings shall be transferred to the fund on the basis of
average cash balance during the year. This shall be done in accordance
with accounting and auditing standards and City policies then in place.
C. Funds transferred from the Economic Development Fund and/or the
Economic Development Authority as approved by City Council resolution.
D. Any other money appropriated, transferred or loaned to the Economic
Development Trust Fund by the City Council for the purposes of this fund.
III. Uses of Funds
Use of Fund resources must be for projects that could not occur or be funded but
for the use of Fund resources. Uses of Fund resources are not intended to
replace funding from another previously programmed source. Expenditures from
the Fund may be made from the monies deposited, transferred or loaned to the
fund. Expenditures may also be made from the permanent and non-permanent
reserve according to the following restrictions. Uses of funds shall be the
following:
A. Land purchase to develop the commercial/industrial taxable market value in
the City.
B. Infrastructure improvements in the Industrial Park as in existence at May 19,
1999 and any future designated Industrial Parks except as provided below.
• C. Infrastructure improvements in the retail space as in existence at May 19,
1999 and any future retail space except as provided below.
l:CLERK/Trust fund management policy
CITY OF COTTAGE GROVE
ECONOMIC DEVELOPMENT TRUST FUND MANAGEMENT POLICY
D. Repayment of inter-fund loans that are a direct obligation of the Economic •
Development Trust Fund.
E. Exceptions:
1. No expenditures shall be made from the fund for general governmental
purposes. General governmental purposes shall mean operating or
capital expenditures for general government, parks and recreation,
public safety or public works.
2. No expenditures shall be made from the fund for bonded debt
repayment.
3. No expenditures shall be made from the fund to reimburse
expenditures/expenses incurred prior to May 19, 1999.
4. No expenditures shall be made from the fund to reimburse an inter-
fund loan payable that is not a direct obligation of the Economic
Development Trust Fund.
5. No expenditures shall be made for residential purposes. Residential
purposes shall mean establishing, maintaining or reconstructing
residential infrastructure.
Expenditure Procedure
Expenditures from the fund shall be included in the Capital Improvement
Planning process.
•
Expenditure Limitation
In the general activity of the fund, total amounts expended in any one year or
during the life of the Fund shall not infringe upon the permanent reserve
(principal). Expenditures shall be made in the following priority:
A. First from accumulated unspent investment earnings.
B. Expenditures shall then be made from funds transferred into the Economic
Development Trust Fund.
C. Expenditures may be made from the non-permanent reserve funds.
1. Allowable expenditures that can be reimbursed to the Fund.
2. As a match for allowable expenditures.
3. Allowable expenditures from the non-permanent reserve that has no
other reasonable funding source.
D. Expenditures may be made from the permanent reserve only if the amount is
repaid to the Fund.
N. Amendments
Amendments to this policy made be made from time to time upon the affirmative
vote of four-fifths of the City Council members. •
I:CLERK/Trust fund management policy
.w Aii City of Cottage Grove
Memo
To: Economic Authority Members
From: Michelle A. Wolfe, Assistant City Administrator
Date: 06/04/99
Re: Comprehensive Plan: Grey Cloud Island Item 4D(a)
Several meetings ago, the EDA approved a motion recommending some
commercial designation on Grey Cloud Island. I forwarded this information to the
Community Development Department and Planning Commission. Community
Development Director Kim Lindquist has provided me with a draft of the
• Comprehensive Plan section dealing with Transition Zones. Transition Zone 5 is
Grey Cloud Island. In bold print, you can see that this recommendation has been
incorporated into the plan.
Attachment
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F:\GROUPS\PER_ECON\MA\MEDA Memos\June 99 Grey Cloud.doc
DRAFT— 5/27/99
Cottage Grove has developed a long-range comprehensive plan that portrays the ultimate land •
uses for the community to the year 2020 and beyond. With that understanding, it becomes
clear that some areas will develop or redevelop over time into the land use designation. To
ensure that existing property owners are not burdened by the future land use designation, the
City has implemented designated transition zones. These zones are not defined by size or
shape but are being developed in recognition of existing land uses and their current viability
versus the future potential land use. The following presents a map and brief narrative for each
of the City designated transition zones:
TRANSITION ZONE 1
• Guide Plan designation: Low density residential, Multi-family residential, and Commercial
• Current Land Use: Agricultural and Rural Residential
This area is the largest transition zone in the City approximating 3,861 acres. The boundaries
of this zone were developed in recognition of the area that will be available over time for
urbanized development. This development pattern is consistent with the Regional Blueprint
adopted by the Metropolitan Council. At the present time (1999) a good portion of this property
is unable to be served by public systems due to limited sewage capacity at the existing
regional wastewater treatment plant. Met Council Environmental Services has initiated a
process for expansion of the existing plant to provide additional service to these areas of
Cottage Grove, and it is anticipated that the new plant will be on-line by 2003. A key
component of the treatment plant upgrade is the installation of an interceptor system that •
brings sewage from Woodbury and will also service the unserved areas of eastern Cottage
Grove. The ability and ultimate staging of future development is dependent upon the
interceptor alignment chosen. The alignment will also significantly impact the phasing of
development within this transition zone. Due to the complexity of the issue, the City is not
prepared at this time to designate this entire zone urban reserve. It is expected that the City
will initiate future comprehensive plan amendments that will provide a more complete phasing
plan and will define near-term areas for urbanized development. Future rezonings will occur to
portray the staging plan.
This transition zone is currently comprised of a wide variety of uses. The predominate land use
is agriculture and the current zoning is reflective of that use. The City intends to maintain the
agricultural zoning until such time as the interceptor alignment is decided and necessary local
infrastructure plans defined. After that time, the City will begin the process of rezoning property
to low density residential along with expanding the MUSA boundary. The City will also commit
to rezoning of properties to urban reserve to provide appropriate staging for future
development.
TRANSITION ZONE 2
• Guide Plan Designation: Low density residential
• Current Land Use: Agricultural
This area is bounded by existing urbanized development to the east and a severe downslope •
to west. It has generally been assumed that the property to the west, due to its topography and
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location, would remain unsewered. Previous plans had portrayed Zone 2 to be developed after
41) installation of a new trunk sewer main that would traverse the south to southwest portion of the
City. Current study now indicates that this area may have access to existing capacity within the
system. If further review confirms the ability to provide urban services within the current
system, the southern portion of this zone may be one of the first areas brought into the MUSA
under this comprehensive plan.
This transition zone contains only agricultural uses. The northern portion of the zone is
enrolled in the Metropolitan Agricultural Preserves program and therefore must retain its
agricultural zoning. This program requirement will mean that the zoning and guide plan
designation will be inconsistent in the short-term. Upon redevelopment of this property, which
would be initiated by the property owner, the zoning would be brought into compliance with the
designated land use.
TRANSITION ZONE 3
• Guide Plan Designation: Mixed use — commercial, medium density residential,
office/service
• Current Land Use: Low density residential, commercial
This zone is also widely known as the Langdon area. Once the center of commerce within the
village of Cottage Grove, existing land uses are a combination of commercial and residential.
. This area encompasses five structures, which are commercial and 15 residential dwellings.
Public sewer and water are not available to the area. This area has been seen as one possible
location for the multi-modal transit hub within the community. Its central location within the City,
along with ease of access to Highway 61 and the Burlington Northern railroad, prompted this
idea. The land use designation applied to this area reflects the projected change in land uses
through redevelopment, most likely spearheaded by the introduction of a transit hub. Should
the transit hub be located elsewhere, it is still expected that area-wide redevelopment would
occur in the future. In concert with the transit hub, the City expects commercial services to
locate near the hub. There is also expressed interest in having medium density residential,
perhaps senior housing, within walking distance of the hub. Without the transit hub,
development may be less intensive and more highway-oriented, given this zone's location
along Highway 61.
Previous City Comprehensive Plans had indicated a mixed, commercial/residential, land use
designation. This Plan is consistent with previous plans, although it envelops a wider area as
the transition zone. Due to the uncertainty of redevelopment, the City recognizes the existing
land uses and will rezone properties appropriately upon receipt of a viable redevelopment plan,
with or without the transit hub. The City will not consider redevelopment on a piecemeal basis.
A viable plan would include enough parcels within the area to provide for adequate buffering to
remaining uses and development of a site plan that meets or exceeds zoning performance
standards.
TRANSITION ZONE 4
•
• Guide Plan Designation: Industrial
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• Current Land Use: Agricultural
4110
This 124-acre strip has one property owner who currently farms the site as well as leases
adjoining property for farming. The adjoining land to the east is wholly owned by 3M and is
guided for industrial uses befitting the landowner's long-term intentions. It is assumed that in
the future, this transition zone too, will become industrial and be combined with 3M land
holdings. In order to readily define the future industrial zone from residential properties, the
City is delineating the boundary along Ideal Avenue. It is not expected that industrial land uses
will "leapfrog" over the roadway and begin to expand into the area west of Ideal Avenue,
designated and zoned for low density residential uses. Because this property is in the
Metropolitan Agricultural Preserves program, the zoning must be maintained as agricultural. In
the future, upon acquisition of the land by an industrial user, the City will bring the site's zoning
into compliance with the Comprehensive Plan.
TRANSITION ZONE 5
• Guide Plan Designation: Rural Residential and Commercial
• Current Land Use: Rural Residential and Industrial
This zone encompasses the entire Grey Cloud Island, which all but approximately 93 acres is
located within the City of Cottage Grove. Currently 14 residences are located on the island with
the vast majority of the land being used for mining and reclamation. Washington County has
designated the Island as a regional park within their comprehensive plan and the Minnesota •
Department of Natural Resources has shown interest in the Island as a state park. Likewise,
the Metropolitan Council has indicated the Island is a priority for parkland acquisition. The
County has purchased some land on the island, although the majority of their holdings are
within Grey Cloud Township. The City recognizes the Park as a key resource in the
metropolitan area and the community, and therefore has applied a sensitive area overlay on
the Island. This means that the City will work with future development entities, either public or
private, to ensure some portion of the Island remains dedicated to open space.
The current land use on the island is primarily mining. It is estimated that there are enough
aggregate resources to continue mining for another 15-20 years. Therefore, the City is
designating the island rural residential with the understanding that the zoning will continue to
reflect industrial to permit continued mining. Upon cessation of the mining operation and
completed reclamation, the City will rezone portions of the Island rural residential. The City
also envisions some commercial land use designation on the Island. The commercial
designation would be to reflect a Marina and ancillary services associated with the
Marina. Both the State and the property owner have indicated an interest in having a
Marina located on the Island, whether associated with a park or private residential
development. There is no intent by maintaining the industrial zoning that any other industrial
user would be allowed to commence operations on the Island.
TRANSITION ZONE 6
411
Guide Plan Designation: Low Density Residential
Current Land Use: Agricultural and Low Density Residential
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410 This zone is located in the southwest section of the City and is currently outside of the City
MUSA. Although it is expected that urban services would be available to the area, preliminary
costs indicate a new trunk sanitary sewer line would be costly. For this reason, the City
expects that urban development will occur in this region after land in the north and east
portions of the City are developed. The interceptor would access properties south of 100th
Street and east of the river bluffline. It may be possible to serve properties below the bluffline if
a lift station is installed. At this time there have not been any studies to assess lift station
feasibility and therefore areas west of the zone are designated as rural residential.
The current land use in this area is primarily agricultural and larger lot residential. Some of the
residential lots pre-date the City's zoning ordinance and may be undersized as compared to
rural residential standards. Due to the expected timing of urban services, this area is
designated a transition zone. The City wants to recognize that the area will be served in the
future, and that urban development patterns would be established, however, infrastructure
phasing would most likely place this area as one of the last to develop. The exception would
be if a majority of the landowners wanted to develop and could finance the sanitary interceptor
extension sooner. The City would like to make urban services available to existing home within
this area although does not anticipate that all residences would hook-up immediately upon
extension of the sanitary sewer.
S
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City of Cottage Grove
411/
Memo
To: Economic Authority Members
From: Michelle A. Wolfe, Assistant City AdministratorNO
Date: 06/04/99
Re: Comprehensive Plan: Economic Development Section Item 4D(b)
At the end of 1998, the EDA approved text for an Economic Development
Section of the City's Comprehensive Plan. That document was forwarded to the
Community Development Department and Planning Commission. Several
elements of this document have been incorporated into the draft plan.
0 Since that time, Community Development has requested that we re-write the
Economic Development Section to be in the same format as the rest of the plan.
What this entails is developing goals and policies. Therefore, I used the EDA's
Strategic Plan as a basis for developing goals and policies, and supplemented
with additional polices reflecting some of the recommendations found in the
previously developed EDA document. In addition, I wrote an Introduction that is
basically taken from the previous document.
I would like the EDA's acceptance of this new document so that it can be
forwarded for inclusion in the draft plan. I anticipate adding a few summary
paragraphs at the end, just to "flesh-out" certain areas such as land use and
transportation, to further explain the goals and policies. I would again use the
previously developed EDA document as the basis for this additional verbiage.
Attached is a copy of the new document, as well as a copy of the original
document for your reference.
Attachment
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0
w ECONOMIC DEVELOPMENT (NEW) 110
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INTRODUCTION
Cottage Grove is poised for additional economic growth in the commercial and
industrial sectors. As a city with an urbanized area of thirty percent of its
landmass, opportunities for further economic development will continue to drive
the local economy.
In 1987 the city deemed that creation of an Economic Development Authority
would better serve the public than the Economic Development Commission
which was in place. In recent years, the EDA has been very active in promoting
the community. They meet every month and often have special meetings to
accommodate development projects. Annually, the members adopt a work plan,
publish an annual report and host a development tour. A guiding principal of the
EDA mission links the directive of the EDA to the city's Comprehensive Plan.
In 1991, the city leaders recognized the need to formalize their economic
development process that culminated in a strategic plan titled Vision 2002.
Accomplishment of many of the Vision 2002 directives occurred within the first
few years. In 1996, the Economic Development Authority revisited the Vision
2002 strategic plan and developed a new mission and corresponding goals to •
carry Cottage Grove into the new millennium. The new plan continues to
reinforce key marketing strategies, business retention, business attraction and
collaborative partnerships.
The Cottage Grove Industrial Park is the fourth largest contiguous industrial park
in the Twin Cities Metropolitan Area. Its total landmass is 700 acres, with
approximately 500 acres remaining for development. Designated for light
industrial users, the Industrial Park has been slowly developing over the last
twenty years, with increased activity taking place at the end of the 1990's.
Industrial park development has been a focal point for the EDA since the mid-
1990's. During this time the city and the EDA invested resources for marketing,
analysis, and improvements of the Cottage Grove Industrial Park.
With approximately 2,200 acres zoned for industrial uses including the 3M
Cottage Grove campus, industrial development will continue to be an integral
part of the city's development evolution.
S
• GOALS AND POLICIES
GOAL: Enhance the strength of the Cottage Grove economy through
the support of local industry and the attraction of new
industries which bring quality jobs, an enhanced tax base and
new capital into the region.
POLICY: Support existing industry and assist them with expansion
opportunities. Implement a business retention and expansion
process.
POLICY: Work to attract new industry to the community by responding to
requests for proposals and actively marketing the city and its
industrial park.
POLICY: Maintain and enhance the economic development "tools" which
support successful retention/expansion and business attraction
• efforts. This would include maintaining a strong industrial park
partnership with the private sector owners/brokers, development of
the spec building program, laying the groundwork for a work force
development effort, creating a telecommunications policy and plan,
and continuing to research and develop other economic
development tools.
POLICY: Focus staff and volunteer efforts through effective planning,
reporting, development and training activities.
S
•
GOAL: Address local and regional issues critical to business site
location decisions.
POLICY: Enhance the image and perception of Cottage Grove internally
(With City residents and businesses) and externally (within the
Metro area).
POLICY: Improve highway access to Cottage Grove by continuing staff
representation on key transportation task forces and working in
collaboration with area legislators to lobby for the placement of
local transportation concerns on the key funding lists maintained
and implemented by MnDOT. In terms of proposed transportation
solutions that may not be in the best interest of the community,
publicly present our disapproval and alternate solutions
POLICY: Strongly support the investigation of a regional river bridge
crossing.
POLICY: Evaluate alternatives to the single vehicle commute, including the
development of a transit center to offer Park-n-Ride, bus, and
commuter rail service.
POLICY: Secure expansion of MUSA capacity and expansion of the •
southeast wastewater treatment plant in a manner that supports
community growth and development. Work with planning staff to
examine areas in the community that can support a MUSA
expansion.
POLICY: Ensure appropriate infrastructure such as reoadways, sewer and
water is readily available to designated commercial and industrial
properties.
POLICY: Support designation of additional land for commercial/retail use.
Encourage centralization of these designations along Highway 61,
but include neighborhood centers.
POLICY: Identify and evaluate redevelopment opportunities within the City,
with focus on larger commercial shopping centers. Consider mixed
uses for these redevelopment areas, in addition to retail use.
GOAL: Enhance the appeal of Cottage Grove as a place to live and
work.
POLICY: Enhance retail opportunities in Cottage Grove. Support retail task
force efforts.
POLICY: Identify and explore opportunities for improving access to the
Mississippi River for commercial/industrial, housing and
recreational opportunities. Work with task forces, explore the
current planning and regulatory framework, and identify potential
opportunities, infrastructure requirements and market feasibility.
POLICY: Balance and diversify Cottage Grove housing stock by increasing
options for "move up" market and upscale segments. Develop an
approach to attract this market of housing.
POLICY: Make appropriate policy and administrative adjustments, prepare
information and a "community support" package to motivate
development and promote Cottage Grove to targeted housing
developers.
•
GOAL: Support efforts to improve statewide "business climate" and
legislative issues which impact Cottage Grove's ability to
attract and retain jobs and tax base.
POLICY: Participate in metropolitan or statewide initiatives that address
"business climate" issues such as commercial/industrial property
taxes, workers' compensation, and a statewide vision/strategy for
economic development.
G:\Economic Development\CompPlan\ED Section.doc
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opo
1
Section : Economic Development
INTRODUCTION
During the 1990's, Cottage Grove established itself as one of the ten fastest
growing communities in the Twin Cities Metropolitan Area. With a population
increase of thirty-one percent during this period, the community is poised for
additional economic growth in the commercial and industrial sectors. As a city
with an urbanized area of thirty percent of its landmass, opportunities for further
economic development will continue to drive the local economy. Residents will
have greater access to both local employment and retail service facilities.
Economic development in Cottage Grove has not been approached haphazardly,
but with calculation and planning. In 1991, the city leaders recognized the need
to formalize their economic development process that culminated in a strategic
plan titled Vision 2002. Through this process, the coordination and hiring for a
full-time economic development professional emerged. Working with the city's
Economic Development Authority, the newly hired city staff would help administer
the goals and objectives derived from Vision 2002.
•
Accomplishment of the Vision 2002 directives occurred within the first few years.
The framework for attracting new development was evaluated through two critical
studies: A Study of the Retail Potential for Cottage Grove and Land Use &
Market Feasibility Study-Cottage Grove Industrial Park. Both projects leveraged
resources from parties with vested interest in promoting community growth and
diversity. The retail component has served as a base for direct marketing to
desired retail companies. It measured the local economy and examined the retail
needs of the community. The industrial park study reaffirmed the city's vision for
industrial growth and has provided a roadmap for phased development and
infrastructure improvements. A direct result of the industrial park study was the
restructuring of the city's industrial zoning ordinance.
Business retention was also a key element of the Vision 2002 strategic plan.
Local retention practices were solidified by sponsoring special events for local
businesses such as the Manufacturer's Breakfast and also by formalizing the
community's business visitations. Contact with local businesses is enhanced by
active participation in the Cottage Grove Area Chamber of Commerce and by
having a city staff member serve on the Chamber's Board of Directors.
In 1996, the Economic Development Authority revisited the Vision 2002 strategic
plan and developed a new mission and corresponding goals to carry Cottage ID
Grove into the new millenium. Building on the successes of the previous
strategic plan, the new plan incorporates cutting edge strategies for addressing
I:\COMMDEV\EconDev Comp9-98.doc
2
• emerging economic development issues concerning School-to-Work Initiatives,
Labor Force Retention, and Customized Training. The new plan continues to
reinforce key marketing strategies, business retention, business attraction and
collaborative partnerships. Through careful guidance and thoughtful
recommendations from the Economic Development Authority, Cottage Grove's
economic development program will be strong and flexible, allowing for continued
economic growth.
COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY
Economic Development in Cottage Grove is directed and implemented by the
Economic Development Authority, with supervision by the City Council. In 1987
the city deemed that creation of an Economic Development Authority would
better serve the public than the Economic Development Commission which was
in place. The decision was based on the flexibility of economic development
authorities to accomplish economic development efforts through powers afforded
them by Minnesota State Statutes.
Throughout its brief history the Cottage Grove Economic Development Authority
(EDA) has evolved from the initial five member board to seven members. Two
members are from the City Council, per statute, one being the Mayor, who also
serves as the EDA's President. The remaining five members are from the
community at large and must either be a citizen of Cottage Grove or own a
business within the city.
In recent years, the EDA has been very active in promoting the community. They
meet every month and often have special meetings to accommodate
development projects. Annually, the members adopt a work plan, publish an
annual report and host a development tour. All of their activities relate to the
organization's adopted Mission Statement, which reads:
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 and redevelopment
which 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 business in the community.
Consider the use of incentives in instances where they will promote
quality jobs and development for the City.
I:\COMMDEV\EconDev Comp9-98.doc
3
Recognize the interdependence of theprivate and public sector in a 111
9 P
healthy community and foster a spirit of cooperation between the two
sectors.
The first guiding principal mentioned above links the directive of the EDA to the
city's Comprehensive Plan. Recognizing the need for coherent planning, the
Economic Development Authority actively participated in the Comprehensive
Plan process, focusing their energy on the land use recommendations, especially
in the areas of commercial and industrial development.
LAND USE RECOMMENDATIONS
Commercial and Retail
Evaluation of existing commercial areas led to the conclusion that commercial
property within the existing Metropolitan Urban Service Area is limited. The
scarcity of commercial property is a direct result of the intense retail growth
taking place since the early 1990's. In the Jamaica Avenue commercial district,
the city has experienced a large absorption of land. Numerous retailers,
anchored by Target Stores, Menards, and Cub Foods, have entered the market.
With limited capacity to accommodate additional retail and commercial growth,
additional sites throughout the city were considered for their retail and
commercial potential. As part of the Comprehensive Plan process, the EDA
recommended to the Planning Commission the following sites for commercial
designation:
• Highway 61 and County Road 19
• Current Drive-in Theater site
• East side of Highway 61 from Jamaica Avenue to County Road 19
• Highway 61 and Highway 95
Attention was also given to establishing smaller scale neighborhood centers,
which would provide convenience items for the immediate area. Suggestions for
this type of use were:
• 70th Street and County Road 19
• 80th Street and County Road 19
• 100th Street and Hadley Avenue
• Hinton and Tower Connection
• The West Draw
S
I:\COMMDEV\EconDev Comp9-98.doc
4
Overall, the EDA recommended that additional land be designated in the 2000
Comprehensive Plan for commercial/retail use. Centralization along Highway 61
was encourage, while at the same time the importance of neighborhood
convenience was recognized. These two philosophies appear polarized, but
both meet the needs of the citizens by providing opportunity for continued growth
in common community needs such as restaurants and additional retail services,
and access to convenience items such as gasoline, minor groceries, and other
goods.
Redevelopment Opportunities
Commercial development in Cottage Grove has occurred during and after major
population growth in the community. This phenomenon occurred in the late
1960's and early 1970's and again in the early and mid- 1990's. As a result,
larger commercial projects such as shopping centers were built to meet the
needs of local consumers.
In the late 1960's, the hub of commerce centered around the intersection of 80th
Street and Highway 61. Peripheral development took place on the frontage
roads of East Point Douglas Road and Hadley Avenue. At the time, three
shopping centers were built to accommodate the community's needs.
Over the past 30 years, minor aesthetic improvements have been made to the
buildings. However, the inconsistency of maintenance, coupled with the tenant
mix, has caused all the shopping centers in the area to appear distressed. The
area's prime location next to a major highway intersection and near dense
residential development makes the entire commercial district a viable
redevelopment project.
Redevelopment of the area need not be solely retail oriented, but could be
comprised of mixed uses including housing, service providers, healthcare and
transportation. With the changing demographics of the population, an increase in
businesses and services for the baby-boomers' is the most likely tenant mix.
Industrial
The development of industrial property has been an integral part of the city's
economic vitality. For 50 years the community has seen investment in this
sector. Primarily, 3M Cottage Grove Center has been the main contributor;
however, in the recent past other companies have also been making capital
investments in Cottage Grove.
3M Cottage Grove Center is a pivotal point in the history of industrial
development within the city. Fifty years ago, in 1948, 3M located Chemolite in
Cottage Grove. The plant's purpose was to manufacture adhesive, scotchlite,
and other chemicals for the parent company. Over the years, 3M has diversified
•
I:\COMMDEV\EconDev Comp9-98.doc
5
the Cottage Grove site and positioned it to be one of the company's primary pilot
plant facilities. During the past 50 years, 3M purchased over 1,500 acres in
Cottage Grove. Currently, 3M is determining a land use plan for the property
which will hopefully include additional manufacturing and research and
development facilities.
In order to build on 3M as the major employer, the City of Cottage Grove
designated an area for additional industrial development. The site is contiguous
to 3M, and is significant in size to allow for employment diversification. The area
is located south of the Jamaica Avenue and Highway 61 intersection and is
referred to as the Cottage Grove Industrial Park.
The Cottage Grove Industrial Park is the fourth largest contiguous industrial park
in the Twin Cities Metropolitan Area. Its total landmass is 700 acres, with
approximately 500 acres remaining for development. Designated for light
industrial users, the Industrial Park has been slowly developing over the last
twenty years, with increased activity taking place at the end of the 1990's.
Industrial park development has been a focal point of the EDA since the mid-
1990's. During this time the city and the EDA invested resources for marketing,
analysis, and improvements of the Cottage Grove Industrial Park. Partnerships
with the landowners and brokerage firms were cultivated with joint funding of
projects as a natural outcome. In 1995, the EDA, in conjunction with the three •
industrial property owners, sponsored the Land Use & Market Feasibility Study-
Cottage Grove Industrial Park. All participants along with Northern States Power,
provided funding.
As a result of the six-month study, additional infrastructure improvements were
completed and a cooperative marketing campaign launched. In 1997, the
relationship evolved, and with the influx of excess tax increment the EDA
optioned 40 acres within the Cottage Grove Industrial Park.
A few short months later, Renewal by Andersen selected Cottage Grove as the
site of their Division Headquarters and new manufacturing pilot plant. The
project functioned as a catalyst and the parties continue to partner on creative
land options for assisting development in the area. Increased activity and
interest is occurring and revised absorption goals have been identified.
With approximately 2,200 acres zoned for industrial uses, industrial development
will continue to be an integral part of the city's development evolution. Its impact
on the community is being measured as Cottage Grove participates in a pilot
program sponsored by the Metropolitan Council, which measures the fiscal
impacts of development on a city. Industrial development has been identified as
its own fiscal analysis zone and employment projections have been developed
based on low and high absorption goals.
411/
I:\COMMDEV\EconDev Comp9-98.doc
6
The employment trend is:
Trend Level 1999 2000-2005 2006-2010 2011-2015 2016-2020 TOTAL
Low 233 565 415 415 415 2,043
High 706 2931 2781 2781 2781 11,980
Assumptions regarding the absorption rate for the low trend are 1,000 s.f. for
office, 20,000 s.f. for light industrial, and 20,000 s.f. for heavy industrial
(classified as 3M Cottage Grove Center). The high trend absorption rates are
8,000 s.f. for office, 200,000 s.f. for light industrial and 60,000 for heavy
industrial. Employment multipliers were supplied by the Urban Land Institute and
are calculated on an employment density by type of workplace analysis.
(Washington D.C.:ULI, 1986. ULI Catalog Number: E13)
The most likely outcome will be between the low and high parameters, but the
analysis does provide a benchmark from which the EDA can evaluate the results
of their efforts. Overall results from the fiscal impact study will be used to guide
resource allocation in promoting certain types of development. It is anticipated
that industrial development is a critical contributor to the city's tax base and
generates more in revenues than it takes in services.
• TRANSPORTATION
In considering potential development scenarios, the EDA evaluated the existing
transportation and road network within Cottage Grove. Three road systems were
marked for further evaluation:
• Potential Jeffery Avenue extension to East Point Douglas Road.
• Expansion of County Road 19 into a four-lane divided parkway.
• Regional River Bridge Crossing.
The EDA examined the possible extension of Jeffery Avenue South to East Point
Douglas Road. Initially, it was considered to be an alternate route for the
neighborhood to access the commercial district. However, the EDA was
concerned that the extension could cause Jeffrey Avenue to function as a
collector street and disrupt the neighborhood. The issue should be evaluated
and discussed at the time the Drive-in Theater site develops.
County Road 19 is a critical link from the community to Interstate 94. Given the
possibly that the regional interceptor may travel this route, there is an opportunity
to widen the road and capitalize on its status as a major arterial. The road
currently serves as a major north-south route for businesses and residents and
its existing capacity will be challenged as Cottage Grove continues to grow. With
• an expansion, comes the potential for additional commercial development,
I:\COMMDEV\EconDev Comp9-98.doc
7
particularly at the intersection of Highway 61 and County Road 19, and possibly
along the corridor to 90th Street. 1111
A significant discussion revolved around the suggestion of incorporating a
regional river crossing into the Comprehensive Plan. The idea is generally
supported without defining the exact location. Conceptually, the river crossing is
supported by the City of Inver Grove Heights and is depicted on Map 1,
Thoroughfare Plan of the Inver Grove Heights Comprehensive Plan. It is the
understanding of the EDA that the river crossing is an important part of the
regional system and its construction would have an impact on the land use
designations connected to it.
TRANSIT HUB
Transit has long been a concern for Cottage Grove and with the upgrades to the
Wakota Bridge and Highway 61 between the years 2002 and 2008, it will become
a pressing concern. In anticipation of future congestion, the city has evaluated
alternatives to the single vehicle commute. Planning efforts have commenced for
a transit hub, which would facilitate both bus and potentially commuter rail traffic.
The approximate location is in the Langdon area, near the center of the
community. Access for both vehicles and passengers is adequate and land
availability is good.
The initial concept allows for a transit station large enough to accommodate a S
significant Park-n-Ride and parking for commuter rail. Surrounding the transit
station is property for a mixed-use development: retail and commercial services,
medium to high-density housing, and industrial development. It is feasible that
the transit station would not only be used for local commuters working outside of
the city, but for employees traveling to work in the Cottage Grove Industrial Park.
Funding for the project has been committed for conceptual planning, especially
for the commuter rail component. Grant applications to a variety of funding
agencies have been and are being submitted. The city hopes to complete the
project prior to the Highway 61 expansion.
•
I:\COMMDEV\EconDev Comp9-98.doc
City of Cottage Grove
Memo
To: EDA Members
From: Dan King
CC: Ryan Schroeder, Michelle Wolfe, Kim Lindquist
Date: 05/26/99
Re: Genesis Business Center visit.
After discussions with many of the EDA members and City staff, the date of
Thursday, June 24th was decided for the tour of the Genesis Business Center in
Columbia Heights. I confirmed this date with Harlan Jacobs of the Center. The
tour will be from 8:30 to 10:00 AM, beginning in the 2nd floor conference room.
The address is 3989 Central Ave. N.E., 2 miles south of hwy 694 on Central.
Mr. Jacobs is sending over some literature and possibly a video for review, I'll let
you know when it arrives.
Document3
4rE
City of Cottage Grove
Memo
To: Economic Authority Members
From: Michelle A. Wolfe, Assistant City Administrator jA0-
11)
Date: 06/04/99
Re: Fiscal Impact Study—Grey Cloud Island Item 4F
For those members of the EDA who have not yet received a copy of the draft
report, we are including it in your packet. Included for all EDA members is a
letter and information regarding meetings held after the draft report was received.
Attachment
•
F:\GROUPS\PER_ECON\MA\MEDA Memos\June 99 fiscal grey cloud.doc
C: City of
Cottage Grove
Minnesota
•
7516 80th Street South/Cottage Grove,Minnesota 55016-3195 651.458-2800 Fax 651.458-2897
www.cottage-grove.org TDD 651.458-2880
June 2, 1999
Ms. Julia Cuchna
Minnesota Department of Natural Resources
500 Lafayette Road
St. Paul, MN 55155
Dear Julia:
The following is an attempt to address the requested modifications to the April 16, 1999, draft
Fiscal Impact Analysis for Grey Cloud Island as discussed at the May 25, 1999 meeting with
representatives from DNR, Washington County, Met Council and the City of Cottage Grove.
This information is from the notes City representatives keep. At this time, I have not received
your detailed notes or any additional information from the Met Council or Washington County.
1. Additional information will be noted in the utility portion of the report to more accurately re-
flect the cost to the City enterprise funds. Additional acreage will be factored into the cost of •
sanitary sewer installation to reflect the other benefiting properties within the community.
This acreage, 796 acres, will decrease the estimated cost per developed lot on the island.
The City will also estimate the cost for bringing public water service to the Island. All
property owners benefiting from the utility installation would also share this cost. The cost
for this line will be an estimate only, as no engineering has been done to date, on this water
main extension.
The report should clarify that the current area charge rates would not be adequate for the
utility installation. However, the estimated rates would be based upon the estimated cost
divided by the total number of benefiting acres. Having an area charge rate different than
other portions of the community is consistent with City policy that new development pay for
itself, and was done in the West Draw area of the community.
2. The Critique of the Analysis, pages 41-42, will be removed from the Report text. This is
related to the economic analysis information provided by the Met Council. The information
found under the Metropolitan Council Economic Impact Analysis Summary will remain
within the Report.
3. The traffic volume tables found on pages 17 & 18 will be modified to reflect estimated Peak
Daily Park traffic volume.
A disclaimer will be added to the information relating to the tables on pages 14 & 15 about lb
the fiscal impact cost participation for DNR. Suggested language is as follows:
EQUAL OPPORTUNITY EMPLOYER
Ms. Julia Cuchna
June 2, 1999
Page 2
110
The cost participation for the DNR was developed by using an average of that estimated by
the City and that estimated by the DNR based upon each agencies' traffic generation cal-
culations for the park. The cost participation figure is being used for purposes of this study
only and does not represent a cost sharing agreement by either the DNR or the City.
4. Section V. County/DNR costs and revenues will be moved to the appendix of the report.
Care should be taken to reiterate that these costs are not costs to the residents of Cottage
Grove exclusively. Additional information, provided by the DNR on May 27, 1999, regarding
sources of financing for acquisition and development of the park will be incorporated into
the Report.
5. The appendix will include a listing of the anticipated permits and approvals that would be
required for development on the Island. This listing will include permits necessary for resi-
dential development as well as park development. This list is being compiled by the DNR
and is not presently available.
6. Requested changes listed in the Met Council letter dated May 14, 1999 listed under Other,
and do not substantively change the Report analysis, should be incorporated into the Re-
port. These changes generally relate to wording changes within the text of the report and
would not include modifications to the development scenarios previously agreed to by the
four agencies.
If you have any comments or questions, please call me at 651-458-2824.
Sincerely,/ 1:4; .<
Kim Lindqui
Community Development Director
cc Jack Perkovich, Washington County
Ame Stefferud, Metropolitan Council
Bill Beyers, Metropolitan Council
Paul Tischler, Tischler&Associates
•
Sent By: Minnesota Dept of Natural Resou; 651 215 9036; Jun-3-99 8:47; Page 2/2 _
;N; •
r
Minnesota Department of Natural Resources G 0 �,'
Division of Parks and Recreation �" 3 '99� k
Office Memorandum
Date: May 25, 1999
Re: Meeting to review Draft Fiscal Impact Study, 5/25/99 at Cottage Grove.
Present: Ryan Schroeder, Kim Lindquist,John McCool, Cottage Grove;Jack Perkovich, Washington
County; Arne Stcffcrud, Bill Byers, Guy Peterson, Metropolitan Council; Bill Morrissey, Julia Cuchna,
Department of Natural Resources, State Parks.
Group agreed to review concerns point by point. Question was raised about the sewer and water
assessments. Water delivery had not addressed in study_ The city felt that the sewer to the island would
allow other areas to be "beneficed" by the utility, and these would be assessed for sewer costs. However,
there was question about whether the sewer and water was important for the study as the costs are
covered by enterprise funds, not general funds. Consensus that the study should include material to
explain the enterprise funds,and include the additional lands that would be benefitted by utilities.
Will use "simple math" based on land area and cost in other areas of the city,not formal evaluation of
costs. The report needs to clearly show that assessments equal costs, to avoid the appearance of a "flush"
enterprise account based on overcharging for utilities,
Discussion about the economic and social benefits of parks and residential development,and agreed
to include an appendix (or opening) to help policy makers see other factors to consider beyond the city
general fund impact.
•
Arne indicated the Jeff front Tischler will do a break-even analysts for housing costs, rather than
assigning a housing value to use. This will allow readers to see the minimum value needed to collect
sufficient revenue to cover city costs.
Lengthy discussion on the roadway issues.City said that there would be road development needed only
on a few sections if no development occurred on the island. Ryan mentioned these areas as Hadley Ave
from 80th(Grange Ave?) - 90'", and a portion of 100th St. Bill M. wanted the report to clearly show that a
state park would pay all roadway development costs attributable to park use, and thus will have no
impact, over the long run, CO the city. Question was raised if the study should be run again with only the
DNR proposed numbers used,knowing this will increase the costto city sources. Consensus to leave as
an average estimate,and dearly state that negotiations can/will work out details of cost shares to
ensure minimum fiscal impact to city,but that the city will have some cost in any scenario.
Discussion about the County/DNR analysis of development costs.Felt this was unclear, appearing to be a
direct cost to city residents,rather than a cost spread among county-wide sources, or state-wide sources.
Consensus to separate this into an appendix,more clearly define the sources of funding and
revenue,and state that this is not a city general fund expense.Would be analogous to the spending by
visitors in that the impact is borne across a broad area, except that some impact will be felt in the city as
county or state funds are spent in the local community.
Suggested to have a summary that shows each scenario highlighting issues and benefits.This would
include a bullet listing Of permits required, indirect benefits anticipated,etc.
Notes by Julia Cuchna, 651-296-5080
•
City of Cottage Grove
Memo
To: Economic Authority Members
From: Michelle A. Wolfe, Assistant City Administrator
Date: 06/04/99
Re: Resignation of Donna Boehm Item 4G
EDA Member Donna Boehm has resigned from her position on the EDA.
Therefore, the City Council will need to appoint someone to complete this term,
which is through 12/31/03. I have asked Mayor Denzer to recommend someone
for appointment. Hopefully, this can be accomplished at the June 16 City Council
• meeting.
F:\GROUPS\PER_ECON\MAW\EDA Memos\June 99 Resign.doc
City of Cottage Grove
•
Memo
To: Economic Authority Members
From: Michelle A. Wolfe, Assistant City Administrator k
Date: 06/04/99
Re: Approval of Lease Amendment for River Oaks Golf Course with 3M
Company Item 4H
At the May 19 City Council meeting, City Council authorized the Mayor to enter
into a lease amendment with 3M Company. As you know, approximately 59
acres of the golf course is owned by 3M. The current lease is for $14,964 for
1999 with rent adjustment periods provided for within the lease. IN addition, the
• City is responsible for property taxes under the lease. The new proposal if for a
$1/month lease payment, and ongoing responsibility for property taxes. In
exchange for this, 3M requested some language changes within the document.
The changes are more fully explained in the attached documents.
This lease amendment also requires approval by the EDA. We are requesting
such action at your June 9 meeting.
Attachment
\\CG FS1\SYS\GROUPS\PER ECON\MAW\EDA Memos\June 99 Golf Course.doc
REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
MEETING ITEM
ep
DATE 5/19/99 . G ,
•
PREPARED BY: Administration Ryan Schroeder
ORIGINATING DEPARTMENT STAFF AUTHOR
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
COUNCIL ACTION REQUEST:
Authorize Mayor to enter into lease amendment for River Oaks Golf Course with 3M
Company.
STAFF RECOMMENDATION:
Authorize Mayor to enter into lease amendment.
BUDGET IMPLICATION:
BUDGETED AMOUNT ACTUAL AMOUNT
SUPPORTING DOCUMENTS:
® MEMO/LETTER: Memo from Ryan Schroeder dated May 13, 1999
❑ RESOLUTION: •
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
® OTHER: Attachments
ADMINISTRATORS COMMENTS:
le -(1 \SVI Yi?7
City Administrator Date
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER
111,
Document4
Office of the City
• Administrator
Memo
To: Mayor and City Council
From: Ryan R. Schroeder
CC: B.Anderson
Date: 05/13/99
Re: Land Lease for Golf Course
As Council is aware, we have been meeting with 3M in a joint effort to negotiate a new lease for the
River Oaks Golf Course property. As you also know, approximately 59 acres of the Golf Course is
owned by 3M and utilized by the City for a portion of the Course. At this time,we have an amendment
to the existing lease for which we are requesting your ratification.
• Enclosed, please find a transmittal letter and three page lease amendment for your consideration. As
you know,the existing lease is for$14,964 for 1999 with rent adjustment periods provided for within the
lease. In addition to that, the City is responsible for property taxes under the lease. The new proposal
is for a$12/annum lease payment($1/month). The tax payment will continue to be the responsibility of
the City. As noted to Council in a past meeting,for payable 2000 we expect that obligation to be about
$5,000.
In exchange for the concession on the rent payment 3M is requesting language changes within the
document. Under paragraph 3(b)of the amendment,the owner is suggesting a"statement of purpose"
that reflects their concern that the City not commit actions detrimentally affecting their business or use
of the balance of their property. 3M has represented that reguiding the Golf Course leased premises
within the Comprehensive Plan from its existing designation would be detrimental to the use of their
land.
I have also enclosed a spreadsheet identifying the long-term value of this lease proposal. Depending
on ones assumptions this table shows that this proposal has a value to the City of probably greater
than $500,000 and potentially as great as $1.2 million over the life of the agreement. Given that, we
are recommending Council ratification of the document.
By the way, I would love to pat myself on the back for this lease amendment proposal. However, the
Mayor and Councilmember Wolcott made this happen.
Council Action:
By motion,authorize the Mayor to enter into the lease amendment for the River Oaks Golf Course with
3M Company as presented.
S
•Page 1
3M Real Estate Building 42-8W-06
900 Bush Avenue
PO Box 33331
St. Paul,MN 55133-3331
612 778 4389
612 778 6054 Fax •
3MMay 11, 1999
Ryan Schroeder, City Manager
City of Cottage Grove
7516 South 80th Street
Cottage Grove,MN 55016
RE: Meeting with 3M and Cottage Grove
Dear Ryan:
We were pleased to meet with you, Mayor Denzer and Councilmember Wolcott last
week to discuss your concerns regarding the ground lease for the golf course. I
believe that through these efforts we now have a better understanding of each other's
needs and objectives. At this meeting we learned that the City's concerns regarding
the lease focused on the step increases in the rent schedule, the unforeseen obligation
of the City to pay property taxes on this parcel, and some operational difficulties. •
We propose that 3M bring the rent for the ground lease from the current rate of
$14,964 per year to the nominal rate of $12.00 a year. A Third Amendment to
Ground Lease reflecting this is enclosed. We believe that this proposal solves not
only the City's budgeting difficulties with the stepped rent stream, but also more
than compensates for the unbudgeted property taxes currently being imposed by the
County on the land. Under the terms of the lease the City is also free to pursue
further resolution of the property tax matter directly with the County.
This offer is made by 3M as a good faith measure to work with the City to resolve
the City's concerns, while reaffirming the fundamental premises under which the
lease was originally granted that 3M does not wish to sell the land, that the
underlying function of this land is in support of the primary industrial purpose of the
site, and that the land will be used only for a municipal golf course.
At our meeting we also discussed several operational concerns of the City's with
respect to what is permitted under the lease. I will be happy to work through these
items with the golf course Manager on an individual basis —please have him phone
me at 651-778-6555 at his convenience so we can discuss these items is fuller detail.
S
We trust that this proposal will meet with your approval and we look forward to
hearing from you.
Sincerely,
Jill Smith
Real Estate Department
/j s
cc: Mayor Jack Denzer—City of Cottage Grove
Councilmember Jim Wolcott—City of Cottage Grove
S
410
THIRD AMENDMENT TO GROUND LEASE •
THIS THIRD AMENDMENT TO GROUND LEASE ("this Amendment") is made
and entered into this day of May, 1999 (the "Effective Date"), by and between
Minnesota Mining and Manufacturing Company, a Delaware corporation ("Lessor") and the
City of Cottage Grove Economic Development Authority, a public body corporate and
politic ("Lessee") and the City of Cottage Grove, a Municipal corporation under the laws of
Minnesota ("Assignee").
RECITALS
A. Lessor and Lessee entered into a certain Ground Lease dated February 8, 1990,
as amended by an Amendment to Ground Lease dated March 26, 1991, and an Addendum to
Ground Lease dated May 1, 1995 (the "Addendum"), (collectively, the "Lease") pursuant to
which Lessee leased certain real property located in the City of Cottage Grove, County of
Washington, State of Minnesota, as more particularly described in the Lease (the
"Property").
B. Lessee assigned its interest in the Lease to Assignee by entering into an
Assignment of Lease dated February 8, 1990.
C. It is expressly understood between Lessor and Assignee that Lessor's main •
purpose and intent in entering into this Amendment is to accommodate Assignee in its
pursuit of using the Property as a municipal golf course for the benefit of the general public.
Lessor recognizes there are additional costs involved in maintaining a public municipal golf
course and in a desire to relieve Assignee from some of its financial burdens and to ensure
the continued use and development of the municipal golf course for public golf course
purposes only, Lessor has determined that the interests of both parties are best served by
significantly reducing the monthly base rent payable by Assignee under the Lease.
NOW THEREFORE, for good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree and covenant as follows:
1. Monthly Base Rent for Remaining Term. Commencing on the Effective
Date, the Addendum shall be deleted in its entirety and Sections 3.01, 3.02, 3.03 and 3.04 of
the Lease shall be deleted in their entirety and replaced with the following:
"3.01. Monthly Base Rent. During the remainder of
the Lease term, Assignee agrees to pay to Lessor a
monthly base rent equal to $1.00 per month payable
annually upon the anniversary date of the Lease at the
rate of$12.00 per year." •
•
2. Monthly Base Rent for Renewal Terms. That portion of Section 2.02 of the
• Lease, line 4, providing "the rental set forth in Sections 3.01 and 3.02 hereof." shall be
deleted in its entirety and replaced with the following :
"an annual base rental equal to $12.00 per year."
3. Other Terms And Conditions:
(a) Defined Terms. Capitalized terms not otherwise defined in this
Amendment shall have the meanings set forth in the Lease.
(b) Ratification. Except as expressly amended hereby, all other terms and
conditions of the Lease shall remain unchanged and in full force and effect, and are ratified
and confirmed in all respects. In addition to the "Statement of Purpose" stated in Recital B
of the Lease, the parties reaffirm the intent that the title to the land will remain permanently
vested in 3M so that the use enabled by the Lease in no way will detrimentally affect 3M's
main business purpose which is manufacturing at its 3M Cottage Grove plant. The city
further acknowledges that any loss of title to this land by 3M would have a detrimental effect
on its ability to develop the remainder of its property.
(c) Entire Agreement; Conflict. This Amendment, together with the Lease,
constitutes the entire Agreement between the parties hereto with respect to the matters stated
• herein and may not be amended or modified, unless such amendment or modification shall
be in writing and signed by the party against whom enforcement is sought. In the event of
any conflict between the terms, provisions and covenants of the Lease and this Amendment,
the terms, provisions and covenants of this Amendment shall supersede and govern the
actions of the parties hereto.
(d) Successors. The terms, covenants and conditions contained in this
Amendment shall bind and inure to the benefit of the parties hereto and their respective
successors and assigns.
-2-
IN WITNESS WHEREOF, the parties hereto have caused to be executed and
delivered this Amendment as of the Effective Date. •
• St
LESSOR:
MINNESOTA MINING AND
MANUFACTURING COMPANY
By:
Its:
LESSEE:
CITY OF COTTAGE GROVE
ECONOMIC DEVELOPMENT
AUTHORITY
By:
Its:
ASSIGNEE: .
CITY OF COTTAGE GROVE
By:
Its:
M 1:496497.01
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• City of Cottage Grove
Memo
To: Economic Authority Members
From: Michelle A. Wolfe, Assistant City Administrator
Date: 06/04/99
Re: For Sale/Lease Information Item 41
Management Analysts Dan King and Steve Barrett have completed an update of
for sale and for lease information in the city. We frequently receive calls from
businesses interested in space for lease or for sale. Dan and Steve completed a
"windshield" survey of the city to find current available sights, then followed-up
• with calls to the appropriate leasing agents, brokers, or owners. This information
has been compiled into a database. We plan to keep it up to date, so that we
can quickly and efficiently assist those who call us.
In an effort to keep the information up to date, we are sending a letter to the
various parties to introduce ourselves, and to ask their assistance in keeping this
information current. We hope to improve our customer service with these efforts.
Copies of the current information and draft letter are attached.
Attachment
•
F:\GROUPS\PER ECON\MAW\EDA Memos\June 99 For Sale.doc
•
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•
°RAFT
[Date]
[Name]
[Address]
[City, State Zip]
Dear [Name],
The City of Cottage Grove Economic Development Authority would like to work
with you and your office to facilitate the growth of business within our city. To
this end, we would like your assistance in maintaining up-to-date data of
available commercial property within the city, which will be used to refer potential
clients to you.
The Economic Development Department receives numerous inquiries every
week regarding available retail and office space for sale or lease in the city. To •
respond to these, our goal is to have an accurate, current, availability list with
square footage and general lease/sale terms. This list could then be shared with
the inquiring parties, who can contact you directly for more information. By
referring possible clients to your agency, we can work toward the overall goal of
attracting and expanding business in the community. Therefore, your
cooperation in this effort will be beneficial to all involved.
To accomplish this, a member of our staff may be contacting your office
requesting this information, and we will periodically call to assure its continued
accuracy. Additionally, it would be helpful for you to inform our office when any
changes occur, such as filling vacancies, new openings, or pending lease
changes.
The organization of the Economic Development Department has changed
recently, and I would like to take this opportunity to briefly introduce the members
to you. Leading the Development Team is Michelle Wolfe, Assistant City
Administrator; who along with Ryan Schroeder, City Administrator, will coordinate
development efforts. Other key members include Kim Lindquist, Community
Development Director; John McCool and John Burbank, City Planners; and
Elizabeth Johnson, Finance Director. Support staff includes Steve Barrett and
Dan King, Management Analysts; and Neil Be!scamper, Secretary. The above
individuals work in collaboration to support the efforts of the Economic •
Development Authority Board.
F:\GROUPS\PER ECON\Dan\memo to brokers.doc
a •
Thank you in advance for your cooperation in this matter, I look forward to
working with you in the future to facilitate the growth of business in the Cottage
Grove area. If you have any questions or concerns, feel free to contact any of
the above at the phone number on top.
Sincerely,
CITY OF COTTAGE GROVE
ECONOMIC DEVELOPMENT DEPARTMENT
•
•
MEMORANDUM
TO: Planning Commission
Parks, Recreation, and Natural Resources Commission
Economic Development Authority
FROM: Kim Lindquist, Community Development Director
DATE: June 4, 1999
RE: Fiscal Impact Analysis of Grey Cloud Island
The draft Fiscal Impact Analysis of Residential & Park Development on
Grey Cloud Island, which was prepared by Tischler and Associates, is
attached. The City of Cottage Grove, Washington County, Minnesota
Department of Natural Resources, and the Metropolitan Council
contracted with Tischler and Associates to study various development
scenarios for Grey Cloud Island.
•
On May 25, the four agencies met to discuss changes to the study. The
attached letter and memo reflect the discussion and the agreed upon
changes to the analysis, which is currently being worked on.
The final report will be distributed to the Planning Commission, Parks
Commission, and the EDA when it has been completed.
•
FISCAL IMPACT ANALYSIS
OF
RESIDENTIAL & PARK-
DEVELOPMENT
ON
GREY CLOUD ISLAND
City of Cottage Grove, Minnesota
0=4 Prepared for:
City of Cottage Grove, AFT
Washington County,
Minnesota Department of Natural Resources &
the Metropolitan Council
April 16, 1999
Prepared by:
Tischler and Associates, Inc.
Bethesda,Maryland
Pasadena, California
•
F?
TABLE OF CONTENTS •
TISCHTER& I. EXECUTIVE SUMMARY 1
ASSOCIATES,INC. A. DEVELOPMENT SCENARIOS 1
4701 Sangamore Road B. LEVEL OF SERVICE ASSUMPTIONS 1
Suite N210 C. COTTAGE GROVE FISCAL IMPACT RESULTS 2
Bethesda,MD 20816 1. General Fund Fiscal Impacts 2
(301)320-6900 2. Sewer System Fiscal Impacts 4
Fax:(301)320-4860 D. COUNTY/DNR COSTS AND REVENUES 6
E. ECONOMIC IMPACTS OF PARK VISITORS 6
80 Annandale Road II.DEVELOPMENT SCENARIOS 8
Pasadena,CA 91105-1404
(81 8)790-6170
Fax (818)79090-66 235
III.LEVEL OF SERVICE ASSUMPTIONS 10
A. DEVELOPMENT CHARACTERISTICS 10
(800)424-4318 B. REVENUES FROM PAYMENT IN-LIEU OF TAXES 1 1
tischlerassociates.com C. POLICE CALLS FOR SERVICE RELATED TO THE PARK AND THE MARINA 12
D. MAJOR ROAD COSTS 13
E. SANITARY SEWER COSTS AND REVENUES 18
IV. COTTAGE GROVE FISCAL IMPACT RESULTS 20
A. FISCAL IMPACT RESULTS--DEVELOPMENT PHASE(2000 TO 2020) 20
1. Average Annual Results 20
2. Annual Results 22 •
3. Cumulative Results 24
B. FISCAL IMPACT RESULTS--BEYOND DEVELOPMENT PHASE TO 2025 25
C. COST AND REVENUE DETAILS 28
1. Net Revenues 28
2. Operating Revenues 29
3. Operating Costs 30
4. Capital Costs 32
D. SANITARY SEWER FISCAL IMPACT RESULTS 33
1. Net Capital Costs 33
2. Net Operating Revenues 34
V. COUNTY/DNR COSTS AND REVENUES 36
A. REGIONAL PARK PURCHASE AND DEVELOPMENT COSTS 36
B. REGIONAL PARK OPERATING COSTS AND REVENUES 38
VI. ECONOMIC IMPACTS OF PARK VISITORS 40
A. METROPOLITAN COUNCIL ECONOMIC IMPACT ANALYSIS SUMMARY 40
B. CRITIQUE OF THE ANALYSIS 41
APPENDIX Al
A. ROAD SEGMENTS GRAPHIC A 1
Fiscal Impact Analysis B. 20 YEAR ANNUAL NET REVENUE CHARTS A2
• C. 25 YEAR ANNUAL NET REVENUE CHARTS A5
Capital Facility Analysis D. ANNUAL COST,REVENUE,AND NET REVENUE CHARTS A8
' E. SEWER CAPITAL AND OPERATING CASH FLOWS A 13
Impact Fee Systems
•
Growth Policy Planning •
•
Economic and Market Analysis
MUNIES,FISCALS&CRIM
Fiscal impact systems tailored
for each community
I. EXECUTIVE SUMMARY
Tischler and Associates, Inc. (TA) is under contract with the City of Cottage
TIsctR& Grove to conduct a fiscal impact analysis of potential park and residential
SOCIA ,INCAS
development on Grey Cloud Island.' This work coincides with TA's fiscal
analysis of two growth scenarios in Cottage Grove as part of the Metropolitan
4701 Sangamore Road Council Fiscal Study. The majority of this current study focuses on the fiscal
Suite N210 impacts of the Island development on the City of Cottage Grove. Other parts of
Bethesda,MD 20816
(301)320-6900 the study include a summary of the County/DNR costs and revenues associated
Fax:(301)320-4860 with the park, and a review and critique of an economic impact analysis of park
visitors that was prepared by the Metropolitan Council.
80 Annandale Road
Pasadena,CA 91105-1404
(818)790-6170 A. Development Scenarios
Fax:(818)790-6235
(800)424-4318 Three main development scenarios have been analyzed as part of this study:
1) Scenario 1 -- All Park (no residential), 2) Scenario 2 -- Low Density
tischlerassociates.com Residential with Park, and 3) Scenario 3 -- High Density Residential with Park.
For Scenario 2, Low Density Residential, a total of 157 single family detached
units are to be built. For Scenario 3, High Density Residential, a total of 343 units
are to be built (228 single family detached units and 115 townhouses). A Private
marina is also proposed for Scenarios 2 and 3.
• There are two options for Scenarios 2 and 3. Option A assumes that 16 single
family units are built on the eastern end of the island between years 2000 and
2005, and the remaining units are built on the western end of the island between
2015 and 2020. Option B assumes no initial eastern units and that all the units are
built on the western end of the island between 2015 and 2020. For both options
(and for Scenario 1), the park is also built from 2015 to 2020.
Furthermore, for each of the above 5 described scenarios and options, two more
sub-scenarios have been analyzed: 1) the park is built and operated by the State
DNR, and 2) the park is built and operated by the County. The only fiscal
difference to the City under each of these sub-scenarios is that the City would
receive a small amount of In-Lieu Taxes from a County park and no In-Lieu Taxes
from a State park. These revenues are minor, however, resulting in a negligible
fiscal difference. Refer to Section III of this report for further details on the
various scenarios.
B. Level of Service Assumptions
Fiscal Impact Analysis As part of the fiscal study process, TA interviewed the City of Cottage Grove
Capital Facility Analysis department heads and staff and reviewed the FY99 City budget and other relevant
• financial documents. This was done for purposes of both the Metropolitan
Impact Fee Systems
erowth Policy Planning
Economic and Market Analysis ' The Minnesota State Department of Natural Resources(DNR)and the Washington County
Department of Public Works are also contributing to the cost of the study.
MUNIES,FISCALS&CRIM
Fiscal impact systems tailored
for each community Page 1
Council Fiscal Study and this current Grey Cloud Island Fiscal Analysis. A Service Level, Cost, •
and Revenue Assumptions (LOS) report was then written. The LOS report, dated March 10,
1999, outlines all cost and revenue assumptions and projections used to determine future fiscal
impacts on the City of Cottage Grove to the year 2020.
In general, the same cost and revenue assumptions outlined in the LOS report are used for this
analysis. There are some unique additions and/or alterations to the costs and revenues
assumptions related to the development of Grey Cloud Island, however. These include road
improvement operating and capital costs, public safety costs, and In-Lieu Tax revenues. Cost
and revenue assumptions for various island sewer systems are also included. The sewer costs are
based on the Rieke Carroll Muller Associates, Inc. Conceptual Wastewater Cost Study for Lower
Grey Cloud Island. Refer to the LOS document and Section III of this report for details.
C. Cottage Grove Fiscal Impact Results
1. General Fund Fiscal Impacts
The charts below summarize the average annual net revenues (revenues minus operating and
capital costs) for various time periods during the construction phase for each scenario analyzed.
The results include all General Fund operating and capital costs and revenues. Capital costs
include costs for roads, public safety, public works, and parks and recreation. The first chart
assumes a County owned and operated park and the second chart assumes a State DNR owned •
and operated park. For each chart there are five scenarios -- Scenario 1, Scenario 2A, Scenario
2B, Scenario 3A, and Scenario 3B -- for a total of ten scenarios.
Grey Cloud Island Fiscal Analysis
City of Cottage Grove Average Annual Net Revenues
Scenario Comparisons with County Park
$300
$222 $232
$200
$100 - - _ _ - 71 . . .
$2 so $24 $5'S'
$0 1
cS Sce = 2A SceilliPitt 2B Scenario 3A Scenario 3B
($100) - - - - ($14) - ; - - _ _ _
9) �
($200)
($300)
110
($400) (xS69)
❑2000 to 2015 112016-2020 ■2000-2020
Page 2 Tischler & Associates, Inc.
• III
Grey Cloud Island Fiscal Analysis
City of Cottage Grove Average Annual Net Revenues
Scenario Comparisons with DNR Park
$300
$2i 5
$200
$100 - $69
$o f ,
. S 2A Sce o Scenario 3A Scena$226rio 3B
c Sc
o ($100) - - -
x
($200)
($300) - - - .
($400) - -($3($37.8)-
($500)
❑2000 to 2015 ®2016-2020 ■2000-2020;
• The following is a summary of the results:
• The worst results occur for Scenario 1, which assumes that the park is developed from 2015
to 2020 and no residential units are built on the island. From 2000 to 2015, the average
annual fiscal impacts are zero because the park is not developed until after 2015. From 2016
to 2020, however, deficits occur. This is because there are no net revenues generated from
any residential units on the island and the City would incur the various costs for roads, public
safety, etc., related to the park as outlined in the LOS assumptions. The majority of these
costs are for road improvements. The cumulative debt under this scenario is never recovered,
growing slightly worse each year after the construction phase ends in 2020. (Refer to Section
IV, Part D for details on post construction phase results.)
• Scenario 2 generates better fiscal results compared to Scenario 1. This is because, in addition
to the park being developed after 2015, there are also 157 low density residential units built
on the island. The relatively high assessed values of these units help to generate a net
positive cash flow to the City even after accounting for all the associated capital and
operating costs. Small deficits occur, however, during the construction phase. These deficits
are relatively minor, however, and any cumulative debt is recovered shortly after the
construction phase ends in 2020. (Refer to Section IV, Part D for details on post construction
phase results.)
• • Scenario 3 generates the best results of all the scenarios generating net revenues for all time
periods. This scenario assumes more residential units at a higher density compared to
Page 3 Tischler & Associates, Inc.
Scenario 2 (228 single family units and 115 townhouses for a total of 343 units). It is clear •
from the results that the additional units assumed in Scenario 3 more than pay for themselves
and the park costs during the primary construction phase (2015 to 2020).
General conclusions of the results can be summarized as follows:
• From a fiscal standpoint, residential development on the park is necessary to generate
sufficient revenues, primarily from property taxes of the relatively highly valued homes, to
offset park-related costs to the City. (Refer to Section III, Part A for market value
information.)
• The majority of the park-related costs to the City are for the associated road improvements.
Thus, the assumption of who pays for the road improvements -- the City General Fund, an
MSA or Assessment District, or the County/State -- is critical to the fiscal results. The above
results only include the City General Fund portion of the road costs. (Refer to Section III,
Part D for details on the road improvement cost breakdown used in the analysis.)
• Of the two residential development scenarios, Scenario 3 shows the best results. This is
because there are more than twice the number of units compared to Scenario 2. These units
are at a higher density resulting in lower street maintenance costs, although they still generate
a lot in property tax revenues given their relatively high value. Under this scenario, the
townhouses have a market value at $250,000 and the single family units have a market value
•
of$425,000 each. (Refer to Section III, Part A for development characteristics, and refer to
Section IV, Part C for details on the results for the various costs and revenues.)
• Scenario 2, although resulting in deficits between 2015 and 2020, can still be considered
feasible from a fiscal standpoint. This is because: 1) the deficits are small at an average
annual amount of about $70,000 or only 0.7 percent of the total $8.7 million General Fund
budget, and 2) any cumulative debt is recovered shortly after the construction phase ends in
2020. (Cumulative debt only occurs in Option B, given that the 16 eastern units built from
2000 to 2020 under Option A generate net surpluses. Refer to Section IV, Part D for details
on post construction phase results.)
• Whether the park is State-owned or County-owned is insignificant from a fiscal perspective.
The In-Lieu Taxes that the City would receive if the park were County-owned is relatively
minor and would result in a negligible fiscal benefit.
2. Sewer System Fiscal Impacts
The chart below summarizes the net capital costs for the two sanitary sewer options for each
residential development scenario. The first option assumes an Island Wastewater Treatment
Plant, and the second option assumes a Lift Station and Forcemains to the existing City sewer
system. The net results are calculated by subtracting the 20 year cumulative total area and
connection charge revenues collected at the time of residential construction from the 20 year •
cumulative total capital cost estimates. Given that the total number of units are the same for
Page 4 Tischler & Associates, Inc.
' . Option A and Option B for each scenario, the cumulative results are the same for both options.
(The Rieke Carroll Muller Associates, Inc. study also did not distinguish between Option A and
B for the two scenarios.)
Grey Cloud Island Fiscal Analysis
Cumulative Net Capital Sewer Costs (2000 to 2020)
Island WWTP versus Lift Station/Forcemain
$3,050 53,032
$3,000 - - -
$2,570
$2,950^c, 9i2
$2,900 -- $2,890
$2,850
$2,800
Scenario 2 Scenario 3
0 Island WWTP ■Lift Stat. & Forcemain
The chart below summarizes the average annual net operating revenues from 2000 to 2020 for
the island sewer system options for each residential development scenario. The net revenues are
calculated by subtracting the estimated sewer system operating costs as determined in the Rieke
Carroll Muller Associates study from the user charges that would be collected based on the
current City charge of$2.10 per 1,000 gallons.
Grey Cloud Island Fiscal Analysis
Average Annual Sewer Net Operating Revenues (2000 to 2020)
Island WWTP versus Lift Station/Forcemain
$5,000 -
$1,016 $819
$0 .�.■. ' ,
Scenario 2A Scenario 2B Scenario 3A Scenario 3B
($5,000) - ($6.3.9) $418)
($10,000) -
($11,390) I($1 x,298)
($15,000) {$12;7;$)
($20,000) ($17,387)
• ['Island WWTP ■Lift Stat. & Forcemain
Page 5 Tischler & Associates, Inc.
•
The above results can be summarized and conclusions can be drawn as follows:
• The current City collection and area charges that would be collected from the new residential
units on the island are not enough to pay for either sewer system option. This implies that a
separate sewer district would need to be established on the island in order to recover the
associated sewer capital costs. Otherwise the remaining City would in essence be subsidizing
the sewer needs for the Grey Cloud Island residents. (It should be noted that the Rieke
Carroll Muller Associates study did not include the costs for a potential third sewer option
representing on-site individual sewage treatment (septic) for the single family units. These
costs would be borne directly by the developer/homeowner, however, and not impact the City
sewer system.)
• Average annual operating deficits result for all scenarios and options with the exception of
the Lift Station]Forcemain option under Scenario 3, where about $800 to $1000 in average
annual net revenues are generated depending on Option A or Option B. The worst results
occur for the WWTP option generating deficits for all scenarios given that operating costs are
significantly more expensive. Similar to the capital cost results, these results imply that
depending on the development scenario and the sewer system option, a separate sewer district
with correctly calibrated user charges would need to be established on the island in order to
recover the associated sewer operating costs. •
D. County/DNR Costs and Revenues
As part of this study, TA held discussions with the Minnesota Department of Natural Resources
(DNR) and Washington County staff and reviewed data provided by the County estimating park
purchase, development, and operating costs as well as the operating revenues for each of the
development scenarios. Park related sewer costs were also estimated in the Conceptual
Wastewater Cost Study for Lower Grey Cloud Island prepared by Rieke Carroll Muller
Associates, Inc. Although the information that was provided is considered preliminary, TA
reviewed and summarized the results in order to provide a composite and summary
understanding of the development options provided to date. Please refer to Section V of this
report for details.
E. Economic Impacts of Park Visitors
As part of this study, TA also reviewed and provided a summary of an economic impact report
prepared by the Metropolitan Council. The Metropolitan Council study estimates that about $4.6
million in annual expenditures would be spent in the Twin Study Metropolitan area by an
estimated 415,000 annual park visitors. However, the analysis also concludes that it is not
possible to estimate how much of the $4.6 million would be spent in Cottage Grove without
further study. Furthermore, the analysis appears to have overestimated the visitation rate, and
hence the resulting annual expenditure amount, by not taking metropolitan-wide park supply and •
demand characteristics into account. Also, based on their methodology, the $4.6 million is a
Page 6 Tischler& Associates, Inc.
• calculated average between a high and low extreme, limiting accuracy and enhancing potential
error.
Regardless of the lack of any relatively accurate quantitative estimate of expenditures that would
be spent in Cottage Grove, however, there is no doubt that there would be some degree of
enhanced economic activity in the City as a result of the Grey Cloud Island Park. There will be
visitors, and these visitors will pass through Cottage Grove. This will provide opportunities for
economic development in the City enhancing retail, hotel, restaurant, and other service related
business prospects. Overall, the City should plan for this opportunity and develop policy to meet
its objectives.
Please refer to Section VI of this report for further details on the Metropolitan Council study,
TA's critique of the study, and further information on how any potential economic impacts would
be related to fiscal impacts in the City of Cottage Grove.
S
•
Page 7 Tischler & Associates, Inc.
II. DEVELOPMENT SCENARIOS S
Three main development scenarios have been analyzed as part of the Grey Cloud Island Fiscal
analysis. These scenarios are summarized in the table below. (Note that a fourth scenario,
assuming high density residential development with no park, will also be analyzed with the
results shown in a separate memorandum. This scenario will be run because the DNR has
recently indicated that it would not develop a park under the high residential scenario.)
Development Scenarios
Grey Cloud Island Fiscal Analysis
Scenario 1 Scenario 2 Scenario 3
All Park Low Density Res.w/Park High Density Res.w/Park
Option A Option B Option A Option B
Total Park Acreage 1,400 1,100 1,100 1,000 1,000
Western SF Detached Units 0 141 157 212 228
Eastern SF Detached Units 0 16 0 16 0
Total SF Detached Units 0 157 157 228 228
Western SF Attached Units 0 0 0 115 115
Eastern SF Attached Units 0 0 0 0 0
Total SF Attached Units 0 0 0 115 115 •
Total Residential Units 0 157 157 343 343
Total Residential Acreage 0 300 300 327 327
Source: City of Cottage Grove
Scenario I is the All Park Scenario. Under this scenario, no residential development occurs and
the park is built from 2015 to 2020. Development of the park commences after 2015 because
mining on the island ends at this time. The park will either be built and maintained by the
County or by the State. Both options will be analyzed. The State will own and operate the outer
islands in both cases. The owner and operator of the park will not significantly affect the fiscal
impact on Cottage Grove, with the minor exception of the amount of payment in-lieu of taxes
received. (Section V of this report summarizes the associated costs and revenues of the park to
the County or State.)
Scenario 2 is the Low Density Residential Scenario. This scenario includes low density
residential development in addition to a park, which is reduced in size from the All Park Scenario
by about 300 acres to accommodate the units. Two options under this scenario will be analyzed.
Option A assumes 141 single family units will be built on the western end of the island between
2015 and 2020 at the same time the park is developed. In addition under Option A, 16 single
family units will be built immediately between 2000 and 2005 on the eastern end of the island. •
Option B assumes all 157 units will be built on the western end of the island from 2015 to 2020
Page 8 Tischler & Associates, Inc.
• in addition to the park. No eastern units will be developed under Option B. This scenario also
assumes the development of a relatively small private marina located on the western end of the
island at the time the western units are built. Similar to the All Park Scenario, the park will
either be built and maintained by the County or by the State. Both options will be analyzed. The
State will own and operate the outer islands in both cases.
Scenario 3 is the High Density Residential Scenario. This scenario includes higher density
residential development in addition to a park, which is reduced in size by about 400 acres from
the All Park Scenario to accommodate the units. Like the Low Density Residential Scenario, two
options under this scenario will be analyzed. Option A assumes 212 single family units and 115
attached or townhouse units will be built on the western end of the island between 2015 and 2020
at the same time the park is developed. In addition under Option A and similar to Scenario 2, 16
single family units will be built immediately between 2000 and 2005 on the eastern end of the
island. Option B assumes all 228 single family and 115 townhouse units in the west will be built
from 2015 to 2020 in addition to the park. Similar to Scenario 2, no eastern units will be
developed under Option B. This scenario also assumes the development of a relatively small
private marina located on the western end of the island at the time the western units are built.
Similar to the first two scenarios, the park will either be built and maintained by the County or by
the State. Both options will be analyzed. The State will own and operate the outer islands in
both cases.
(It should be noted that the City had prepared revised scenarios on February 9 reducing the
• number of units built between 2015 and 2020 by about 5 to 15 percent, depending on the
scenario, and assumed that these remaining units would be built between 2020 and 2025 for
market absorption reasons. However, to remain consistent with the Conceptual Wastewater
Cost Study (discussed in Section III, Part E of this report) and the Metropolitan Council Fiscal
projection which goes to 2020(discussed in Part III below)all units were assumed to be built by
2020.)
•
Page 9 Tischler & Associates, Inc.
III. LEVEL OF SERVICE ASSUMPTIONS •
A Service Level, Cost, and Revenue Assumptions (LOS) report has been written for the City of
Cottage Grove as part of the Metropolitan Council Fiscal Study. This report, dated March 10,
1999, outlines all cost and revenue assumptions and projections used to determine future fiscal
impacts on the City of Cottage Grove to the year 2020. Assumptions for two growth scenarios —
a Slow/Trends growth scenario and a High/Compact growth scenario— are outlined in this March
10 report.
In general, the same cost and revenue assumptions outlined in the March 10 LOS report are used
for the Grey Cloud Island analysis. The Trends/Slow growth scenario is also assumed for the
City. This scenario is used because it is the likely development pattern of Cottage Grove to the
year 2020. (The other scenario, High/Compact growth, reflects a more aggressive development
pattern and is used for comparison purposes for the Metropolitan Council Study. Refer to the
LOS report for details.)
The Trends/Slow growth scenario for the Metropolitan Council Study assumes no development
on Grey Cloud Island. For purposes of this current study, the development scenarios described in
Section II above are therefore added to the Trends/Slow growth scenario to determine the fiscal
impacts of the development of Grey Cloud Island. The fiscal impacts outlined in this report are
only those associated with Grey Cloud Island, but the entire model was run for the whole City to
2020 to derive an accurate set of results in the context of Citywide development. For example, as
outlined in the LOS report, new a new police officer is "triggered" in the fiscal model when a
•
particular population threshold is reached. The model therefore adds an officer and the
associated costs to the City budget when the threshold is reached based on citywide population
growth (including growth on Grey Cloud Island). The cost associated with development on Grey
Cloud Island, however, is based on its percentage share of Citywide population growth.
The sections below describe the particular cost and revenue assumptions related to the Grey
Cloud Island development scenarios that are either not included or different from in the
Metropolitan Council Fiscal Study LOS. For example, a major fiscal component of development
on Grey Cloud Island are roads, both in the City and on the island. These road costs as well as
who pays (i.e. City or County/State) are discussed below. Other unique costs are for Public
Safety services resulting from the park and the proposed private marina. In-Lieu taxes are unique
revenues associated with the island development.
A. Development Characteristics
The table below summarizes the unique development characteristics of the residential units and
the marina that will be utilized in the fiscal model. This includes the assessed values of the units
and marina (used to calculate property taxes and intergovernmental aid) as well as the front
footage of new road per unit (used to calculate local street maintenance and related costs). One-
time building permit fee revenues, based on the assessed values, are also shown in the table.
Refer to the LOS report for details on how the associated costs and revenues are calculated.
•
Page 10 Tischler& Associates, Inc.
u • Development Characteristics
Grey Cloud Island Fiscal Analysis
Scenario 2 Scenario 3
Low Density Res. w/Park High Density Res. w/Park
Option A Option B Option A Option B
Assessed Values (Including Land)
Western SF Detached Units $450,000 $450,000 $425,000 $425,000
Eastern SF Detached Units $450,000 NA $425,000 NA
Western SF Attached Units NA NA $250,000 $250,000
Eastern SF Attached Units NA NA NA NA
Marina $2,200,000 $2,200,000 $2,200,000 $2,200,000
Building Permit Revenues
Western SF Detached Units $3,961.75 $3,961.75 $3,755.50 $3,755.50
Eastern SF Detached Units $3,961.75 NA $3,755.50 NA
Western SF Attached Units NA NA $2,570.50 $2,570.50
Eastern SF Attached Units NA NA NA NA
Marina $4,814.90 $4,814.90 $4,814.90 $4,814.90
Road Front Footage
Western SF Detached Units 220 200 100 85
Eastern SF Detached Units 220 NA 100 NA
Western SF Attached Units NA NA 30 30
Eastern SF Attached Units NA NA NA NA
NA = Not Applicaple, because no units built under that scerario.
Source: City of Cottage Grove
411
B. Revenues from Payment In-Lieu of Taxes
Once the regional park is developed, the City of Cottage Grove will receive a Payment In-Lieu of
Taxes from the County. The table below summarizes this payment by scenario. The data is
based on a January 19, 1999 memorandum prepared by a Property Acquisition Specialist
working for the Washington County Department of Transportation & Physical Development.
Note that the In-Lieu Payment from the County is a one-time payment. For purposes of the fiscal
analysis, this payment will occur in 2016, when the park is first developed under all three
scenarios.
County Payment In-Lieu of Taxes (One-time Payment)
Grey Cloud Island Fiscal Analysis
Scenario In-Lieu Payment
Scenario 1 $48,000
Scenario 2 * $36,052
Scanario 3 * $34,252
The difference in In-Lieu Payments between Option A
(including 16 eastern SFDU's)and Option B(not including
16 eastern SFDU's)is not significant.
• Source: Washington County Department of Transportation
& Physical Development
Page 11 Tischler & Associates, Inc.
According to the above noted memorandum, the State DNR Payment In-Lieu of Taxes would be •
an annual payment which is shared between the county and township (if any). Cities do not share
in this payment. Therefore, under the options for each scenario where the park is owned by the
State DNR, the City will receive no Payment-In-Lieu of Taxes.
C. Police Calls for Service Related to the Park and the Marina
The fiscal model automatically calculates police operating and capital costs related to the
additional residential units based on calls for service as indicated in the Metropolitan Council
Study LOS document. However, there will be additional calls as a result of the new marina and
the development of the park.
Based on research conducted by City staff, the following table outlines the annual police calls for
these two land uses. For purposes of the fiscal analysis, it will be assumed that the number of
calls will be the same for all scenarios. Based on data received from the Police Department,
there were a total of 15,517 calls in 1998. Based on the total Police Department budget of
$3,023,100, the resulting cost per call is $194.83. This includes all staff time as well as other
operating costs. This factor will be used to determine the additional cost associated with the park
and the marina. For the park, the annual cost will be $4,870.75 (25 annual calls times $194.83
per call). For the marina, the annual cost will be $3,896.60 (20 annual calls times $194.83 per
call).
•
Police Calls for Service for Marina and Park
Grey Cloud Island Fiscal Analysis
Annual
Land Use Calls
Park (1) 25
Marina (2) 20
(1) This is based on the current number
of local police calls in Ravine Park.
(2)This is based on an estimate provided
by a local marina nearby Cottage Grove.
The County or State (depending on who owns and operates the park) will be primarily
responsible for public safety in the park. However, given 1) the park's location at the southern
end of Cottage Grove, and 2) that City residents will be living on the island with shared access
roads to the park, it is likely that Cottage Grove Police (including Police EMS services) will need
to respond. It is acknowledged by all parties that the details of public safety response will
ultimately need to be worked out in an inter jurisdictional agreement. It should be noted that the
small number of annual Cottage Grove police calls (25) is a conservative estimate based on data •
Page 12 Tischler & Associates, Inc.
from Ravine Park, which currently has a much smaller visitation rate than the Grey Cloud Island
Park will have.
D. Major Road Costs
The table below summarizes the additional road improvements required in Cottage Grove due to
the development of Grey Cloud Island. The reference numbers refer to the map located in Part A
of the Appendix of this report.
Road Improvments for Grey Cloud Island Development
Grey Cloud Island Fiscal Analysis
REF.N PROJECT NAME SEGMENT LINEAR FT. NEW ROAD MILES TYPE OF IMPROVEMENT
A Hadley Avenue(MSA) Grange Ave.to 90th St. 4,830 0.0 Re-construct 2-lane collector street,urban
design,&trail
B Hadley Avenue(MSA) 90th St.to 100th St. 5,400 0.0 Re construct 2-lane collector street,urban
design.turnlanes&bypass lanes
C Hadley Avenue(MSA) 100th St.to 103rd St. 1250 0.0 Re-construct 2-lane collector street,rural
design,and trail
T.H.10/61 to 100th Street 95th Re-construct 4-lane and 2-lane minor arterial .
D Jamaica Avenue(MSA) St.to E.Pt.Douglas Rod. 4,000 0.0 roadway,urban design,turn-lanes&bypass
lanes,and trail
E 100th Street(MSA) Jamaica Ave.to Ideal Ave. 2,200 0.0 Re-construct 2-lane roadway,urban design,
turn-lanes&bypass lanes,and trail
Re-construct 2-lane(52-ft.shoulder to
F 100th Street(MSA) Ideal Ave.to Hadley Ave. 5,312 0.0 shoulder)collector street,turn-lanes,bypass
lanes.rural design,and trail
G 103rd Street(MSA) Hadley Ave.to Grey Cloud Trail 2,582 0.0 Re construct 24'wide roadway with shoulders 2
lane collector street,rural design,and trail
H B.N.RR.Bridge 103rd Street N/A 0.0 Re-construct Bridge
1110 I Grey Cloud Trail 103rd St.to north shore of Grey 3,030 0.0 Re-construct 2-lane collector street,rural
Cloud Slough design.and trail
Grey Cloud Trail between north
Grey Cloud Trail& shore of Grey Cloud Slough to Bridge Improvements and re-construct 2-lane
Bridge the CAMAS entrance,including 1,500 0.0 local road,rural design,and trail
bridge replacement
K Grey Cloud Trail CAMAS entrance to south end of 7 454 0.0 Reclamation/Cold inplace of a 2-lane local
local road street,rural design,and trail
L New Road Grey Cloud Trail 3,000 0.6 Construct new local road,urban design
Capital Costs
The three tables below show the City's cost estimates for the road improvements for each of the
three scenarios. The tables also show the percentage of the cost of each road segment that DNR
estimates it is responsible for. The actual percentage assumed in the fiscal analysis is also
shown, which is based on the average of the City's estimated percentage and DNR's estimated
percentage of DNR responsibility. The fourth column of the table shows DNR's portion of the
cost based on the resulting average percentage. The remaining road costs will be paid for by:
1) the developer of the residential properties on Grey Cloud Island (for Scenarios 2 and 3 only),
and 2) the City. The City portion of the costs will be paid for with General Fund, MSA, or
Assessment revenues. For the purposes of the fiscal analysis, only the General Fund portion of
the costs will be included as indicated in the tables. This is because all of the other costs will be
paid for with special MSA and Assessment taxes, which are levied in proportion to user impacts
and needs and will not impact the City's General Fund budget. For purposes of the fiscal analysis
• these roads will be built and the costs incurred in equal yearly increments from 2015 to 2020
when the park and the majority of the residential units are built.
Page 13 Tischler & Associates, Inc.
Public Road Improvements-Scenario 1 •
Grey Cloud Island Fiscal Analysis
CITY'S COSTS FISCAL IMPACT DNR's COST FISCAL IMPACT NEW
ESTIMATES COST(%) PARTICIPATION COST DEVELOPM
MAD_ (REVISED PARTICIPATION PROPOSAL PARTICIPATION gNT'S CITY'S GENERAL
SEGMENT AMOUNTS) FOR DNR 3/23/99 FOR DNR COSTS COSTS FUND MSA ASSESSMENTS
A $780,000 5% 0% $39,000 $0 $741,000 $491,000 $250,000
B $860,000 14% 0% $120,400 $0 $739,600 $739,600
C $94,500 51% 40% $48,195 $0 $46,305 $46,305
O $712,000 43% 40% $306,160 $0 $405,840 $120,840 $285.000
E $509,300 43% 40% $218,999 $0 $290,301 $90,301 $200,000
F $1,229,728 43% 40% $528,783 $0 $700,945 $700,945
G $116,190 51% 40% $59,257 $0 $56,933 $46,933 $10,000
H $3,000,000 57% 53% $1,710,000 $0 $1,290,000 $1,270,000 S20,000
I $136,350 64% 60% $87,264 $0 $49,086 $49,086
J $1,112,500 98% 100% $1,090,250 $0 $22,250 $22,250
K $223,620 100% 100% $223,620 $0 $0 $0 $0 $0
L $180,000 0% 0% $0 $0 $0 $0 $0 SO
Total Used in Fiscal Model $1,783,250
Source: City of Cottage Grove
•
Public Road Improvements-Scenario 2
Grey Cloud Island Fiscal Analysis
CITY'S COSTS FISCAL IMPACT DNR's COST FISCAL IMPACT
ESTIMATES COST(%) PARTICIPATION COST NUL
MAP_ (REVISED PARTICIPATION PROPOSAL PARTICIPATION DEVELOPMENTS CITY'S GENERAL
AMOUNTS) FOR.DNR 32218$ =MB COSTS COSTS FUND MSA ASSESSMENTS
A $780,000 4% 0% $31,200 $22,467 $726,333 $476,333 $250,000
B $860,000 10% 0% $86,000 $87,812 $686,188 $686,188
C $94,500 32% 20% $30,240 $27,409 $36,851 $36,851
D $712,000 25% 20% $178,000 $168,423 $365,577 $80,577 $285.000
E $509,300 25% 20% $127,325 $119,118 $262,857 $62,857 $200,000
F $1,229,728 28% 20% $344,324 $347,841 $537,563 $537,563
G $116,190 32% 20% $37,181 $33,700 $45,309 $35,309 $10,000
H $3,000,000 35% 25% $1,050,000 $980,841 $969,159 $949,159 $20,000
I $136,350 39% 30% $53,177 $46,215 $36,958 $36,958
J $1,112,500 55% 50% $611,875 $427,466 $73,159 $73,159
K 62
$223. 0 100% 50% $223,620
$0 $0 $0 $0 $0
L $180,000 0% 0% $0 $180.000 $0 $0 $0 $0 •
Total Used In Fiscal Model l $1,498,651
Source: City of Cottage Grove
Page 14 Tischler & Associates, Inc.
Public Road Improvements-Scenario 3
IIGrey Cloud Island Fiscal Analysis
CITY'S COSTS FISCAL IMPACT DNR's COST FISCAL IMPACT
j:STIMATES COST(%) PARTICIPATION COST NEW
IREVISED FARTICIPATION PROPOSAL PARTICIPATION DEVELOPMENTS CITY'S GENERAL
SEGMENT AMOUNTS) FOR DNR 3/23/99 FOR DNR COSTS COSTS FUND KU ASSESSMENTS
A $780,000 3% 0% $23,400 $47,461 $709,139 $459,139 $250,000
B $860,000 9% 0% $77,400 $171,102 $611,498 $611,498
C $94,500 24% 0% $22,680 $44,567 $27,253 $27,253
D $712,000 19% 0% $135,280 $287,411 $289,309 $4,309 $285,000
E $509,300 19% 0% $96,767 $203,775 $208,758 $8,758 $200,000
F $1,229,728 21% 0% $258.243 $569,192 $402,293 $402,293
G $116,190 24% 0% $27,886 $54,796 $33,508 $23,508 $10,000
H $3,000,000 27% 0% $810,000 $1,544,581 $645,419 $625,419 $20,000
I $136,350 37% 0% $50,450 $72,040 $13,861 $13,861
•
J $1,112,500 38% 0% $422,750 $641,755 $47,995 $47,995
K $223,62 100% 0% $223,620 $0 $0 $0 $0 $0
L $180.00 0% 0% $0 $180,000 $0 $0 $0 $0
Total Used In Fiscal Model I I I 1 $1,132,5531
Source: City of Cottage Grove
0 The data in the above tables are estimates for Scenario 1, Scenario 2-Option B, and Scenario 3-
Option B. DNR has recently indicated that the park would not be built if the 16 eastern dwelling
units were built (as reflected in Scenario 2-Option A and Scenario 3-OptionsA). Therefore, the
percentages for these scenarios are not shown in the table. The City has indicated, however, that
they would still like to see the fiscal results of these scenarios for informational purposes. The
City has also indicated that there would not be much difference in road costs if the 16 eastern
units were to be included. Therefore, the same percentages as shown under the Option B
scenarios (which include the 16 eastern units) are used for the Option A scenarios (which don't
include the 16 eastern units).
Operating Costs
For the majority of the road improvements, no new lane miles will be added. Rather, the existing
roads will be reconstructed and improved to meet the future traffic demands resulting from the
park and residential development on Grey Cloud Island. For the Metropolitan Council Fiscal
Analysis, operating costs for new major roads are based on new lane miles. That is, as City lane
miles increase, maintenance costs will increase proportionately. Given that the road
improvements associated with Grey Cloud Island, however, do not generate new lane miles (with
the minor exception of the new road heading west on the Island, Ref. #L) a different
methodology will need to be utilized. The additional traffic on these roads from park visitors and
Grey Cloud residents will impact road maintenance costs. For purposes of the analysis, projected
. traffic volumes will therefore be used to determine maintenance costs.
Page 15 Tischler & Associates, Inc.
The table below summarizes the current estimated residential and nonresidential vehicle trips in
the City of Cottage Grove. (Refer to the March 10, 1999 LOS report for details on trip
generation calculations). The total number of trips, 73,177, is then divided into the current 1999
Public Works Street Maintenance budget, $1,679,500. The result, $22.95, is the annual operating
cost per trip. This cost will be applied for all new trips generated. The three tables on the
following pages summarize the daily traffic volumes for each of the scenarios. These daily
traffic volumes will be multiplied times the cost per trip factor to determine the associated major
road maintenance costs for traffic generated from the new park and new residential units.
1999 Vehicle Trips on An Average Weekday
City of Cottage Grove Fiscal Analysis
Residential Units
Single Family Units 8,995
Townhouse Units 1,349
Average Weekday Vehicle Trip Ends per Unit(2) Trip Factors
Single Family Units 9.57 50%
Townhouse Units 6.63 50%
Residential Vehicle Trips on an Average Weekday
Single Family Units 43,041
Townhouse Units 4,472
TOTAL RESIDENTIAL TRIPS 47,513 •
Non-Residential Gross Floor Area (Sq. Ft.x 1,000)(1)
Retail 661
Office 594
Light Industrial 237
Heavy Industrial 679
Warehousing 36
Average Weekday Vehicle Trip Ends per 1,000 Sq. Ft. (2) Trip Factors
Retail 87.31 29%
Office 22.64 50%
Light Industrial 6.97 50%
Heavy Industrial 3.82 50%
Warehousing 4.96 50%
Non-Residential Vehicle Trips on an Average Weekday
Retail 16,730
Office 6,725
Light Industrial 824
Heavy Industrial 1,296
Warehousing 89
NONRESIDENTIAL VEHICLE TRIP TOTAL 25,664
TOTAL RESIDENTIAL AND NONRESIDENTIAL TRIPS 73,177
(1) Derived from number of employees times square feet per employee by employment type.
(2) Factors based on ITE Manual. Refer to Building n and Employee g p oyee Ratio Table.
•
Page 16 Tischler & Associates, Inc.
Estimated Traffic Volumes on Road Improvements-Scenario 1
111 Grey Cloud Island Fiscal Analysis
PERCENT OF
E$T.PARK EST.NON-PARK EST.NON-PARK PERCENT OF X1,2
TRAFFIC, TRAFFIC VOLUME TRAFFIC VOLUME TOTAL EST. TRAFFIC, ATTRIBUTED TO
$492 PROJECT VOLUME PER PER DAY PER DAY(ADDING TRAFFIC ATTRIBUTED TO NEW RESIDENTIAL
MEW MtE ROAD SEGMENT DAY !PRESENTLY) NEW GROWTHI VOLUME PARK USE GRO
A Hadley Ave. Grange Ave.to 90th St.
(MSA) 242 5052 0 5294 5% 0%
B Hadley Ave. 90th St.to 100th St. 242 1139 0 1381 17% 0%
(MSA)
C Hadley Ave. 100th St.to 103rd St. 2416 1427 0 3843 63% 0%
(MSA)
0 Jamaica T.H.1OV61 to 100th St. 2174 2386 0 4560 48% 0%
Ave.(MSA)
E 100th St. Jamaica Ave.to Ideal Ave. 2174 2454 0 4628 47% 0%
(MSA)
F 100th St. Ideal Ave.to Hadley Ave. 2174 1408 0 3+82 61% 0%
(MSA)
Cl 103rd St. Hadley Ave.to Grey Cloud Trail 2416 1427 0 3843 63% 0%
(MSA)
H BNRR 103rd St. 2416 816 0 3232 75% 0%
Bridge
Grey Cloud 103rd St.to north shore of Grey Cloud 2416 646 0 3062 79% 0%
Trail Slough
Grey Cloud Grey Cloud Trail between north shore of
J Trail Grey Cloud Slough to the CAMAS 2416 100 0 2516 96% 0%
entrance,including bridge replacement
K Grey Cloud CAMAS entrance to south end of local Trail 2416 0 0 2416 100% 0%
road
L New Road West of Grey Cloud Trail 0 0 0 0 0% 0%
Source: City of Cottage Grove
0
Estimated Traffic Volumes on Road Improvements-Scenario 2
Grey Cloud Island Fiscal Analysis
PERCENT OF
EST.NON-PARK TRAFFIC
EST.NON-PARK 1139mC PERCENT OF ATTRIBUTED
EST.PARK TRAFFIC VOLUME VOLUME PER TOTAL EST. TRAFFIC TO NEW
8462 PROJECT TRAFFIC VOLUME PER DAY PAY(ADDING TRAFFIC ATTRIBUTED RESIDENTIAL
=MI LIAME TOAD SEGMENT PER DAY 'PRESENTLY) NEW GROWTH VOLUME TO PARK USE GROWTH
A Hadley Ave. Grange Ave.to 90th St.
(MSA) 242 5052 157 5451 4% 3%
B Hadey Ave. 90th St.to 100th St.
(MSA) 242 1139 157 1538 16% 10%
C Hadley Ave. 100th S1.to 103rd St. 2416 1427 1570 5413 45% 29%
(MSA)
O Jamaica Ave. T.H.10/61 to 100th St.
-
2174 2386 1413 5973 36% 24%
(MSA)
E � )00th� Jamaica Ave.to Ideal Ave. 2174 2454 1413 6041 36% 23%
F 100th St. Ideal Ave.to Hadley Ave. 2174 1408 1413 4995 44% 28%
(MSA)
G 103rd St. Haley Ave.to Grey Cloud Trail
(MSA) 2416 1427 1570 5413 45% 29%
H BNRR Bridge 103rd St.
2416 816 1570 4802 50% 33%
I Grey Cloud 103rd St.to north shore of Grey Cloud Slough
Trail 2416 646 1570 4632 52% 34%
Grey Cloud Grev Cloud Trail between north shore of Grey
J Trail Cloud Slough to the CAMAS entrance, 2416 100 1570 4086 59% 38%
inducing bridge replacement
K Grey Cloud CAMAS entrance to south end of lova!road
Trail 2416 0 0 2416 100% 0%
L New Road West of Grey Cloud Trail 0 0 1570 1570 0% 100%
Source: City of Cottage Grove
•
Page 17 Tischler & Associates, Inc.
Estimated Traffic Volumes on Road Improvements—Scenario 3
Grey Cloud Island Fiscal Analysis111/
FST.NON-PARK PERCENT OF
EST.PARK TRAFFIC FST.NON-PARK PERCENT OF TRAFFIC
TRAFFIC VOLUME PER TRAFFIC VOLUME TOTAL EST. TRAFFIC ATTRIBUTED TO
ROAD PROJECT VOLUME PAL PER DAY(ADDING TRAFFIC ATTRIBUTED TO NEW RESIDENTIAL
,SEGMENT Ma ROAD SEGMENT PER DAY (PRESENTLY) NEW GROWTH) VOLUMt PARK USF GROWTH
A SMSA)Ave. Grange Ave.to 90th St. 242 5052 343 5637 4% 6%
B (MSA)Hadley Ave. 90th St.to 100th St. 242 1139 343 1724 14% 20%
O Hadley Ave. 100th St.to 103rd St. 2416 1427 3430 7273 33% 47%
(MSA)
D Jamaica T.H.10/61 to 100th St. 2174 2386 3087 7647 28% 40%
Ave.(MSA)
E 100th St. Jamaica Ave.to Ideal Ave. 2174 2454 3087 7715 28% 40%
F 100th St. deal Ave.to Hadley Ave. 2174 1408 3087 6669 33% 46%
(MSA)
G (MSA) 2416
Hadley Ave.to Grey Cloud Trail 2416 1427 3430 7273 33% 47%
H BNRR 103rd St. 2416 816 3430 6662 36% 51%
Bridge
Grey Cloud 103rd St.to north shore of Grey Cloud 2416 646 3430 6492 37% 53%
Trail Slough
Grey Cloud Grey Cloud Trail between north shore of
J Trail Grey Cloud Slough to the CAMAS 2416 . . 100 3430 5946 41% 58%
entrance,including bridge replacement
K Grey Cloud CAMAS entrance to south end of local 2416 0 0 2416 100% 0%
Trail road
L New Road West of Grey Cloud Trail 0 0 3430 3430 0% 100%
Total Used in Fiscal Model
E. Sanitary Sewer Costs and Revenues
•
Rieke Carroll Muller Associates, Inc. prepared a Conceptual Wastewater Cost Study for Lower
Grey Cloud Island using the development scenarios outlined in Section II of this report. The
table below summarizes the capital and operating costs associated with the residential units and
marina for each scenario as indicated in their February 1998 report.
Sewer Capital and Operating Costs Associated with Residential Units
Grey Cloud Island Fiscal Analysis
Scenario 2 Scenario 3
Total System Capital Costs Low Density Res. High Density Res.
Collection System on Island $590,000 $960,000
Island WWTP $2,740,000 $3,080,000
Lift Station/Forcemain to City Sewers $2,660,000 $2,670,000
Total Island WWTP (1) $3,330,000 $4,040,000
Total Lift Station/Forcemain to City Sewers (1) $3,250,000 $3,630,000
Scenario 2 Scenario 3
Annual Operating Costs Low Density Res. High Density Res.
Total Island WWTP $105,000 $121,000
Total Lift Station/Forcemain to City Sewers $28,200 $43,200
(1) Inlcudes Collection System on Island.
SI
Source: Conceptual Wastewater Cost Study for Lower Grey Cloud Island Using City of
Cottage Grove Development Scenarios, Rieke Carroll Muller Associates, Inc.
Page 18 Tischler & Associates, Inc.
4111
There is no distinction between Options A and B, which include or do not include the small
amount of residential development on the eastern end of the island. There are two sewer and
resulting cost options shown: 1) an Island Waste Water Treatment Plant, and 2) Lift Stations/
Forcemains to City Sewers. Sewer costs associated with the park are not included below given
that these costs will be incurred as part of the park development. Costs for a third option
representing on-site individual sewage treatment (septic) for the single family units are not
outlined in their report. These costs would be borne directly by the developer/homeowner,
however, and not impact the City sewer system.
The fiscal impacts of both sewer development options above will be analyzed for each scenario
by subtracting the capital and operating costs from the sewer area, connection, and usage charges.
For purposes of the analysis, the current City charges will be used as outlined in the table below.
The net results will indicate the level of subsidy (if any) needed from the remaining City to pay
for the sewer system under the current revenue structure. A separate sewer district may need to
be created to pay for the Grey Cloud Island system in order to avoid inequities. The results are
discussed in Section IV, Part D of this report.
Sewer Area, Connection, and User Charges
Grey Cloud Island Fiscal Analysis
Capital Cost Recovery
• Area Charge $882,00 per acre (1)
Connection Charge $210.00 per residential unit (1)
Operating Cost Recovery
User Charge $2.10 per 1,000 gallons (1)
32,970 gallons per day for Scenario 2 (2)
63,840 gallons per day for Scenario 3 (2)
(1) Source: City of Cottage Grove
(2) Based on maximum daily wastewater flow from Rieke Carroll Muller
Associates, Inc. report.
S
Page 19 Tischler & Associates, Inc.
IV. COTTAGE GROVE FISCAL IMPACT RESULTS0
The fiscal impacts on the City of Cottage Grove are discussed in Parts A through D below. Part
A discusses the General Fund net fiscal impacts (revenues minus costs) for each of the scenarios
during the development phase from 2000 to 2020. An extended look of the net fiscal impacts
beyond 2020, after development is complete, is discussed in Part B. Part C discusses the
projected General Fund operating revenues and costs as well as the capital costs in more detail.
Part D discusses the fiscal impacts on the sanitary sewer system for each of the scenarios.
A. Fiscal Impact Results -- Development Phase (2000 to 2020)
The fiscal impacts are discussed in terms of average annual, annual, and cumulative results. The
average annual results are discussed first because it is a good way of comparing multiple
scenarios and summarizing the general impacts over time. Annual results show the impacts from
one year to the next, whereas cumulative results show the total impacts into the future.
1. Average Annual Results
The charts below summarize the average annual net revenues (revenues minus operating and
capital costs) for various time periods for each scenario analyzed. The results include all General
Fund operating and capital costs and revenues. Capital costs include costs for roads, public
safety, public works, and parks and recreation as outlined in the LOS document and in Section III
above. The first chart assumes a County owned and operated park and the second chart assumes •
a State DNR owned and operated park. For each chart there are 5 scenarios -- Scenario 1,
Scenario 2A, Scenario 2B, Scenario 3A, and Scenario 3B -- for a total of ten scenarios.
Grey Cloud Island Fiscal Analysis
City of Cottage Grove Average Annual Net Revenues
Scenario Comparisons with County Park
$300
$232 f
$222 E
$100 - - - - - - - = - -. - - = - - - - - - T1 - - -'
$ $24 •=$2 $24 $55
$0 $0
S Sce 2A Sce - • 2B Scenario 3A Scenario 3B
($100)
see)
($200) -
($300) - -
i
($400) - (' 369) .
•
L❑2000 to 2015 ■2016-2020 ■2000-2020
Page 20 Tischler& Associates, Inc.
0 Grey Cloud Island Fiscal Analysis
Cityof Cottage Grove Average Annual Net Revenues
9 9
Scenario Comparisons with DNR Park
$300
$215 $226
$200
$69
4
$0 i$0) 00 ' S° L
c ( ) S 2A See " if Scenario 3A Scenario 3B
S $100 ) 6) ( ) )
X
($200) - - - - - - - - - = - - - - - - - - - - - - - - - - -
($300) -
($400) - - -($378)
7
($500)
❑2000 to 2015 ■2016-2020 ■2000-2020
• It is clear that the worst results occur for Scenario 1, which assumes that the park is developed
from 2015 to 2020 and no residential units are built on the island. From 2000 to 2015, the
average annual fiscal impacts are zero because the park is not developed until after 2015. From
2016 to 2020, the City will incur average annual net deficits of$369,000 assuming a County park
and a slightly greater deficit of$378,000 assuming a State park. The reason deficits occur is
because there are no net revenues generated from any residential units on the island and the City
would incur the various costs for roads, public safety, etc., related to the park as outlined in the
LOS assumptions. The reason a State park is slightly worse than a County park is because the
City would receive no In-Lieu Tax revenues from the State. Over the entire analysis period from
2000 to 2020, average annual net deficits of about $90,000 result.
Scenario 2 generates better fiscal results compared to Scenario 1. This is because, in addition to
the park being developed after 2015, there are also 157 low density residential units built on the
island. The relatively high assessed values of these units help to generate a net positive cash flow
to the City even after accounting for all the associated capital and operating costs. For Scenario
2A, 16 of the units are built on the eastern end of the island from 2000 to 2005 and the remaining
141 units are built on the western end of the island from 2015 to 2020. For Scenario 3A, all 157
units are built from 2015 to 2020 on the western end of the island. Scenario 2A generates
average annual net revenues of about $24,000 from 2000 to 2015. This results from the 16
eastern end units. For Scenario 2B, there are no fiscal impacts between 2000 and 2015 because
no units are built (and no park)until after 2015. From 2015 to 2020 for Scenario 2A, the City
0 will incur an average annual net deficit of about $69,000 assuming a County park and about
$78,000 assuming a State park. This indicates that for that time period, the development of the
Page 21 Tischler & Associates, Inc.
141 residential units and the park results in greater costs to the City than revenues, primarily as a
411
result of the relatively high costs for road improvements during that time period. For Scenario
2B, slight deficits also result for that time period (about $57,000 assuming a County park and
$65,000 assuming a State park), although the deficits are not as quiet as great compared to
Scenario 2A. Over the entire 2000 to 2020 analysis period, Scenario 2A breaks even, and
scenario 2B generates only slight net deficits of about $15,000.
Scenario 3 generates the best results of all the scenarios generating net revenues for all time
periods. This scenario assumes more residential units at a higher density compared to Scenario 2
(228 single family units and 115 townhouses for a total of 343 units). The difference between
Scenarios 3A and 3B is the same as described for Scenario 2 above, where 16 of the single
family units are built initially on the eastern end of the island units under 3A. It is clear from the
results that the additional units assumed in Scenario 3 more than pay for themselves and the park
costs during the primary construction phase (2015 to 2020), generating average annul net
revenues of more than $200,000. Over the 20 year analysis period from 2000 to 2020, average
annual net revenues of about $50,000 are generated.
2. Annual Results
The charts below shows the total annual net revenues to the City for each of the scenarios.
Similar to the average annual results above, the annual results include all General Fund costs and
revenues. The first chart reflects the results assuming a County Park and the second chart shows
the results assuming a State DNR Park. (Refer to Part B of the Appendix for additional charts
reflecting the results for each of the three major scenarios independently, where any small
differences are more clearly delineated.)
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
County Park-- ALL SCENARIOS
$400
$300 -
$200 -
$100
$0 - — 1■K-- 1� m awor tow low
r ` / v."1'($ict •i - '-, ' � �� �+ '' 4' :ice '- ,a -i'- •_
($200) - -
($300)
($400) - 111 -ice--
i
-F Scenario 1 -4-Scenario 2--Option A f-Scenario 2--Option B
--3*-Scenario 3--Option A -0-Scenario 3--Option B
Page 22 Tischler & Associates, Inc.
111 GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Net Operating Revenues
DNR Park-- ALL SCENARIOS
$400
$200 -
$100
($300) - -
�
($400) -
—a-Scenario 1 Scenario 2--Option A Scenario 2--Option B
-SIF-Scenario 3--Option A —II—Scenario 3--Option B
In general for both charts, the significant impacts do not occur until after 2015 when the park and
• most of the residential units are built. All the road improvement costs are also incurred after
2015. For Scenario 1, net annual deficits of between $300,000 and $400,000 begin in 2016 when
the park begins to be developed. Most of these costs are for the road improvements as indicated
in Section III, Part D. The annual deficits grow slightly worse each year from 2016 to 2020 due
to increasing street maintenance costs resulting from an increase in park related traffic volumes
on the improved roads.
Scenario 2 also shows annual deficits after 2016, although the deficits are not as great as
Scenario 1. This indicates that the residential development on the island helps to offset the net
park cost to the City. The annual deficit starts out at about $100,000, with only slight differences
between the State DNR or County park options (as a result of the In-Lieu Tax differential
discussed earlier). From 2016 to 2020, the end of the development phase, the annual deficits
become less. This is because as more residential units are built, annual property tax revenues
accrue. From 2000 to 2015, for Option A annual net revenues of between $20,000 and $40,000
occur(see Page A2 for a more detailed chart). This results from the 16 eastern residential units
built between 2000 and 2005. For Option B, which assumes no initial eastern units, annual net
revenues are zero until the park and residential development begin in 2015.
Scenario 3 shows the best results, with increasing annual net revenues from 2015 to 2020. This
indicates that the larger number of units more than offsets the park cost to the City. In 2016, the
annual net revenues are about $100,000 and grow to more than $300,000 by 2020 when
• development is complete. A large portion of the revenues come from one-time building permit
revenues at the time of construction and accrued property tax revenues. These, and other minor
Page 23 Tischler & Associates, Inc.
revenues, are greater than the operating and capital costs associated with the units themselves and
the park. As a result, increasing net revenues occur to 2020. Similar to Scenario 2, Option A
under Scenario 3 results in annual net revenues of between $20,000 and $40,000 for years 2000
to 2015 resulting from the initial construction of the 16 eastern units. Refer to Part C below for
further details on the cost and revenue breakdown.
3. Cumulative Results
The tables below summarize the total cumulative net revenues over three time periods for each
scenario. The first tables shows the results assuming a County Park, and the second table
assumes a State DNR park.
Cumulative Net Revenues-- Grey Cloud Island with County Park
City of Cottage Grove Fiscal Analysis--(X 1,000)
Scenario 2000 to 2015 20.16-2020 2000-2020
Scenario 1 $0 ($1,843) ($1,843)
Scenario 2A $380 ($345) $35
Scenario 2B $0 ($287) ($287)
Scenario 3A $377 $1,110 $1,487
Scenario 3B $0 $1,162 $1,162
•
Cumulative Net Revenues--Grey Cloud Island with DNR Park
City of Cottage Grove Fiscal Analysis--(X 1,000)
Scenario 2000 to 2015 2016-2020 2000-2020
Scenario 1 $0 ($1,891) ($1,891)
Scenario 2A $380 ($381) ($1)
Scenario 2B $0 ($323) ($323)
Scenario 3A $377 $1,076 $1,453
Scenario 3B $0 $1,128 $1,128
Over the park development phase, from 2016 to 2020, Scenario 1 generates a cumulative net
General Fund deficit of$1.84 million assuming County park and $1.89 million assuming a State
park. This represents the net costs to the City assuming a park with no residential development.
These costs include the General Fund portion of the capital outlay for road improvements and
other more minor operating costs for public safety and street maintenance. (Refer to Part C
below for cost and revenue details.)
Scenario 2, Option A just about breaks even over the entire development phase from 2000 to
2020. Cumulative net revenues of about $35,000 result assuming a County park, and a negligible
cumulative net deficit of about $1,000 results when a State park is assumed. This difference
occurs because under the State park option, the City will not receive any In-Lieu Tax revenues.
The results also indicate that the cumulative net revenues that are generated from 2000 to 2015 1111
Page 24 Tischler & Associates, Inc.
from the 16 eastern units are approximately equal to the net deficits generated between 2016 and
2020 when the western units and park are built. When the eastern units are not constructed
(under Option B), there are zero net revenues. There is therefore no offset to the cumulative net
costs that occur from 2015 to 2020 resulting in cumulative net deficits of about $300,000 over
entire the 2000 to 2020 analysis period.
Scenario 3 generates the best results, producing between $1.13 million and $1.49 million in
cumulative net revenues during the 2000 to 2020 construction phase depending on the various
development and park options. Option A generates more revenues than Option B for both park
options, resulting primarily from the accrued property tax revenues of the initial 16 eastern units
that are built between 2000 and 2005.
B. Fiscal Impact Results --Beyond Development Phase to 2025
After development of the residential units and the park is complete in 2020 the fiscal picture
changes. This is because: 1) one-time building permit revenues from the residential construction
are no longer generated, 2) property tax and other minor revenues continue, and 3) the capital
costs for road improvements no longer continue given that the model assumes that all road
construction is to be completed by 2020. (Although the fiscal model generates results to 2020 in
conjunction with the Trends scenario associated with the Metro Council Regional Fiscal Study,
the three factors indicated above have been calculated separate from the model in order to show
the longer term impacts associated with the Grey Cloud Island development scenarios.)
The charts below show the extended annual results beyond the constructionP hase to 2025. The
first chart reflects the results assuming a County Park and the second chart shows the results
assuming a State DNR Park. (Refer to Part C of the Appendix for additional charts reflecting the
long term results for each of the three major scenarios independently, where any small
differences are more clearly delineated.)
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
County P cr k -- ALL SCE NAR IOS
$400
S100 -
$0 — ®. ow >_ Mk MX rm MR w PM — Ms rep
($10e-tsee.freetto .*.*-** * *- kcc9, rtSv-
-
($300) -
($400)
-�-S oenai o 1 —A—S cenan o 2--Option A--AC—S cenai o 2--Option B
• S canaria 3--Opflon A --f-S oenaio 3--Option B
Page 25 Tischler & Associates, Inc.
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS 41
Cottage Grove Net Operating Revenues
DNR Park --ALL SCENARIOS
$400 00
$200 -
_ $100
$0
�r 4 "• wry �t 4'O.},. q • 1 ' r ♦ .
($400)
tScenario 1 - -Scenario2--Option A - Scenario2--Option B
L-
♦-Scenario 3--Option A - --Scenario 3--Option B
The annual results above are the same as those shown earlier in. Part A2 for years 2000 to 2020.
The above charts, however, show the fiscal results for an additional five years after construction
is complete to the year 2025. For Scenario 1, the all park and no residential development
scenario, the peak annual deficit of about $400,000 in 2020 grows less to a constant annual
deficit of only about $33,000 after 2020. This is because the road improvements and associated
•
City General Fund costs have been completed by 2020. The $30,000 net annual cost after 2020
is to pay for park-related public safety and street maintenance services (based on traffic volume
on improved streets).
For Scenario 2, the small annual deficits of about$20,000 to $40,000 in 2020, depending on the
scenario option, increase to about a $200,000 annual surplus every year thereafter. This change
from a small deficit to a fairly significant surplus is due to: 1) like Scenario 1, road improvement
costs end in year 2020, and 2) accrued property tax and other small revenues continue after 2020.
For Scenario 3, the significantly increasing net annual revenues from 2015 to 2020 ends after
2020, leveling off at an annual net revenue amount of about$370,000 or$380,000, depending on
the scenario option. The reason the net revenues level off is because development ends, which
results in no additional one-time building permit revenues and accrued property tax and other
minor revenues. Road improvement costs also end after 2020 although other operating costs
continue. Stabilized revenues are greater than stabilized costs, however, resulting in net revenues
beyond the end of the construction phase.
Cost Recovery Period for Deficit Scenarios
Based on the long term results shown in the charts above, the question arises of how long it
would take for the City to recover accrued net deficits. That is, for those scenarios generating net
deficits for a number of years and then generate net revenues later on, when are the cumulative •
costs recovered by the cumulative surpluses? The charts below answer this question. The charts
Page 26 Tischler & Associates, Inc.
• depict the cumulative net revenues from 2000 to 2025. The first chart reflects the results
assuming a County Park and the second chart shows the results assuming a State DNR Park.
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottoge Grove Cumuldive Net Operding Revenues
County Pork --Al.L SCE NAR IOS
$3,500
-
c
8 $500 e .a =sw 1i _
I
($2,500)
—�S oencrio 1 f S cenalo 2
—C)rifi on A—SIE—S oencri o on B
—+•—S cencri o 3—cptl on A—III--S cencri o 3--qu1 on B
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Curruldive Net Operding Revenues
DNR Pak --ALL SCENARIOS
$4,000
$2,000
S2 $1,000
2x $0 — 1 !—$-4ra,
($1.001 '.e r z,? NAY
($3,000)
--4--S cenor i o 1 S cencri o 2—Cption on A—*—S cencri o 2--C)pti on B
f S cencrto 3—Cpfton A S oencrio 3—C ption B
S
Page 27 Tischler & Associates, Inc.
For Scenario 1, net annual revenues are never generated. As a result, the cumulative costs are •
never recovered, and the cumulative net deficit continues to grow worse over time. For Scenario
2, Option B, cumulative costs begin in 2016 and are fully recovered sometime around 2021 or
2022, depending on which park option is chosen. For Scenario 2, Option A, however, there are
no (or very minor) cumulative deficits for any year given that the 16 initial eastern residential
units help to generate cumulative surpluses between 2000 and 2015 which offset any deficits
during the bulk of the construction between 2015 and 2020. Since Scenario 3 never generates
annual deficits, they do not need to be recovered and cumulative surpluses therefore continue to
grow each year.
C. Cost and Revenue Details
The tables and charts in Parts A and B above compared the net fiscal impacts by scenario. These
net impacts are calculated by subtracting General Fund operating and capital costs from General
Fund operating revenues. This section describes the various cost and revenue components of the
General Fund in more detail. The results shown are for Scenario 2, Option A, assuming a
County Park. Similar results summarized in chart format for the other scenarios and options can
be found in Part D of the Appendix.
1. Net Revenues
The chart below shows the General Fund net revenues (revenues minus all operating and capital
costs).
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
Scenario 2, Option A-- County Park
$500
$300 — _ ■ -�[ �_ i
Q $200
$100
$0
($100 J 1i! SSI. , t .41 �° .' C5' glee
e
($200)
-�—Revenues --e—Costs -4—Net Revenues
•
Page 28 Tischler & Associates, Inc.
From 2000 to 2015, revenues from the 16 eastern residential units are greater than capital and
operating cost resulting in positive net revenues. After 2015, however, when the park and the
majority of the residential units are built, annual costs are greater than annual revenues resulting
in net deficits. The majority of these costs are for road capital improvements. (Refer to Part 4
below for capital cost details.) After the construction phase ends in 2020, stabilized annual
revenues are greater than stabilized annual costs resulting in net revenues of about $200,000 for
this scenario. Parts 2 through 4 discuss the revenue and cost components in more detail.
2. Operating Revenues
The chart below shows the General Fund annual revenues from 2000 to 2025. As expected,
Property Taxes are the greatest revenue source. Licenses and Permits are also significant,
particularly during the years the residential units are constructed when building permit revenues
are collected. The remaining revenue sources are relatively minor in comparison.
General Fund Revenues
Scenario 2, Option A -- County Park
$300
$250
$200
x $150
$100
$5011.
11,11,11 31
• ."1"' 44. 11111111.1argarrop
, ", ,. p. Win. 41++4,,�r,.7� 4,L. 'r
10,
•
•
'• �,0 ♦�` ,ry g ^ 411P 1111. Pro perry Taxes
4//p 1111, 411. Licenses/Permits
'`1. ,h Intergovernmental
♦1 4 # Charges for Service
,65 , ♦4 X41 4. Miscellaneous
41. Fines
,fyti" oaor P Public Safety
S
Page 29 Tischler & Associates, Inc.
The table below shows the numerical results for each of the revenue components from 2000 to
2025 at five year increments. In addition, the percentage each revenue is of the total is also
shown.
City of Cottage Grove General Fund Revenues
Grey Cloud Island Fiscal Analysis-Scenario 2,Option A,County Park
2000 -2005 2010 2015 2020 2025
Revenue Category Amount Percent Amount Percent Amount I Percent Amount Percent Amount Percent Amount :Percent
Property Taxes $3,252 19.9% $27,971 63.1% $28,994 88.9% $29,340 91.2% $287,402 68.1% $287,402 93.0%
Licenses/Permits $10,582 64.6% $10,669 24.1% $105 0.3% $105 0.3% $113,673 26.9% $989 0.3%
Intergovernmental $2,437 14.9% $5,068 11.4% $2,906 8.9% $2,109 6.6% $14,876 3.5% $14,876 4.8%
Charges for Service $50 0.3% $300 0.7% $300 0.9% $300 0.9% $2,823 0.7% $2,823 0.9%
Public Safety $14 0.1% $86 0.2% $86 0.3% $86 0.3% $810 0.2% $810 0.3%
Fines $36 0.2% $213 0.5% $213 0.7% $213 0.7% $2,005 0.5% $2,005 ! 0.6%
Miscellaneous $4 0.0% $23 0.1% $23 0.1% $23 I 0.1% $213 0.1% $213 0.1%
Total $16,376 100.0% $44,331 100.0% $32,627 , 100.0% $32,176 1 100.0% $421,802 100.0% $309,118 100.0%
In year 2000 total annual revenues amount to about $16,000. By 2010, half way through the
construction phase, total annual revenues amount to about $33,000. In 2020, the last year of the
constructionhase total annualrevenues re enues are about $422,000. They drop to a stable $309,118
thereafter given that building permit revenues are no longer collected. About 93 percent of the
total stabilized revenues come from Property Taxes. Close to 5 percent of the total are from •
Intergovernmental revenues. About 1 percent come from Charges for Service. The remaining 1
percent of the total stabilized revenues are from Licenses and Permits, Public Safety Fees, Fines,
and Miscellaneous revenues.
3. Operating Costs
The chart below shows the General Fund annual operating costs from 2000 to 2025. The
majority of the operating costs are for Public Works, which reflects the street maintenance costs
on the local residential roads as well as the improved major roads based on traffic volume
estimates. Police costs are the next greatest, followed by General Government, Fire, Parks and
Recreation, and Other Public Safety costs, respectively. The costs increase significantly from
2015 and 2020 when the park and the majority of the residential units are built. The costs then
stabilize after 2020 when construction is complete.
•
Page 30 Tischler & Associates, Inc.
• General Fund Operating Expenditures
Scenario 2, Option A -- County Park
$so
$70
$so
$50
x,.....:. $40
$30
$20
_ 111111 0 MI!IIIIiiII
$ 4'' 1� '' �~ Public Works
'L� 5 • • -' r� f Pollee
� � 4. ' Genesi Government
♦e ,, Fire
•
'�1 A1 . 41 Parks and R ec,eotion
.. ,(� Other Publl CSOtefy
M1
The table below shows the numerical results for each of the cost components from 2000 to 2025
at five year increments. In addition, the percentage each cost is of the total is also shown.
City of Cottage trove General Fund Expenditures
Grey Cloud Island Fiscal An lysis-scenario 2,Option Al County Park
Expenditure 2000 2005 2010 2015 2020 2025
Category A aunt Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
General GOvetrmatlt $159 21.0% $897 16.4% $953 11.4% $1,246 12.0% $13,014 10.8% $13,014 10.8%
Police $86 11.3% $1,488 279..42°0i/0° $3,267 39.0% $4,409 42.6% $23,629 19.6% $23,629� 19.6%
Are $86 11.3% $515 $515 6.2% $515 5.0% $4,839 4.0% $4,8391 4.0%
Other Public Safely $17 2.2% $102 1.9% $102 1.2% $102 1.0% $956 0.8% $956 0.8%
Public Works $349 46.1% $2,097 38.4% $3,162 37.8% $3,716 35.9% $74,140 61.4% $74,140 61.4%
Parks and Flee reation $61 8.1% $368 6.7% $368 4.4% $368 3.6% $4,116 3.4% $4,116 3.4%
Total $758 100.0% $5,467 100.0% $8,366 100 0% $10,355 100.0% $120,694 i 100.0% $120,694 100.0%
•
Page 31 Tischler& Associates, Inc.
In year 2000 total annual costs amount to $758. By 2010, half way through the construction
411
phase, total annual costs amount to about $8,400. In 2020, the last year of the construction
phase, total annual costs are about $120,000. They stabilized at that level and continue annually
thereafter. About 61 percent of the total stabilized costs are for Public Works (street
maintenance). Close to 20 percent of the total are for Police services. About 11 percent are for
General Government expenditures, and 4 percent are for Fire services. The remaining 4 percent
of the total are for Parks and Recreation and Other Public Safety.
4. Capital Costs
The chart below shows the capital costs from 2000 to 2025. It is clear that the majority of the
capital costs are for the General Fund portion of the road improvements associated with the park
and residential units. (Refer to Section III, Part D for details on these costs and the assumptions
used.) Other capital costs, which are incurred in one-time increments when threshold values are
reached as indicated in the LOS, include equipment, vehicles, and improvements for Public
Works, Public Safety, and Parks and Recreation.
Capital Expenditures
Scenario 2 , Option A -- County Park
$300
•
$250
$200
1111
S $150
$100
50 ` :
4110. 41111.
^ 411P 41041/14;0.1110 4110
41101.
411, ildr,
4P e
,11. 41IP 411'
�►
41 �h 6
43 �1 ! Rb lic Works
,15
Public r pfery
4j�' Parks antl R Boreonon
•
Page 32 Tischler & Associates, Inc.
The table below shows the cumulative capital costs from 2000 to 2025 at five year increments.
In addition, the cumulative percentage each cost is of the cumulative total is also shown.
City of Cottage Grove Cumulative Capital Expenditures
Grey Cloud Island Fiscal Analysis-Scenario 2,Option A,County Park
Expenditure To Year 2000 To Year 2005 To Year 2010 To Year 2015 To Year 2020 To Year 2025
Category Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
Parks and Recreation $239 100.0% $2,722 75.2% $9,916 69.9% $13,932 54.9% $13,645 0.9% $13,645 ! 0.9%
Public Safety $0 0.0% $269 7.4% $1,271 9.0% $5,359 21.1% $21,710 1.4% $21,710 1.4%
Public Works $0 0.0% $629 17.4% $2,996 21.1% $6,108 24.0% $35,779 2.3% $35,779 2.3%
Road Improvements $0 0.0% $0 0.0% $0 0.0% $0 0.0% $1,498,651 95.5% $1,498,651 95.5%
Total $239 , 100.0% $3,621 , 100.0% $14,183 j 100.0% $25,399 I 100.0% $1,569,785 100.0% $1,569,785 100.0%
By 2020, at the end of the construction phase, about$1.6 million in total capital expenditures are
incurred. The clear majority of these costs, about 96 percent or$1.5 million, are for major road
capital improvements. Of the remaining 4 percent, 2.3 percent or$35,000 is for Public Works,
1.4 percent or about $22,000 is for Public Safety, and about 1 percent or$13,600 is for Parks and
Recreation. Refer to the LOS assumptions on how each of these costs are projected.
Based on the above results and the operating cost and revenue results discussed in Parts 2 and 3
above, it is clear that the road capital improvements are critical to the net fiscal impact results.
The $1.6 million in total road capital improvement costs associated with the General Fund
4110 represent a significant majority of all capital and operating costs during the construction phase
between 2015 and 2020 and is the major reason why net deficits occur for those years.
D. Sanitary Sewer Fiscal Impact Results
As discussed in Section III, Part E, the cost assumptions for two sanitary sewer system options to
accommodate residential development on Grey Cloud Island are based on the February, 1998
Conceptual Wastewater Cost Study for Lower Grey Cloud Island prepared by Rieke Carroll
Muller Associates, Inc. Revenues are based on the current fee structure in the City of Cottage
Grove. Part 1 below summarizes the net capital cost results for each scenario. Part 2 discusses
the net operating revenues.
1. Net Capital Costs
The chart below summarizes the net capital costs for the two sanitary sewer options for each
residential development scenario. The net results are calculated by subtracting the 20 year
cumulative total area and connection charge revenues collected at the time of residential
construction from the 20 year cumulative total capital cost estimates. Given that the total number
of units are the same for Option A and Option B for each scenario, the cumulative results are the
same for both options. (The Rieke Carroll Muller Associates, Inc. study also did not distinguish
between Option A and B for the two scenarios.)
Page 33 Tischler & Associates, Inc.
The total net cost is greatest at $3.03 million under Scenario 2 assuming an Island Wastewater40
Treatment Plant (WWTP). Under Scenario 2, the net cost for the WWTP option is slightly less
at $2.97 million. For the Lift Station/Forcemain option, the total net cost is $2.95 million and
$2.89 million for Scenario 2 and Scenario 3, respectively. Refer to Part E of the Appendix for
detailed cash flow tables for each scenario and option.
Grey Cloud Island Fiscal Analysis
Cumulative Net Capital Sewer Costs (2000 to 2020)
Island WWTP versus Lift Station/Forcemain
$3,050 3,tl32
$3,000 -
$2,970
c $2,950 - 952
0
O f
$2,900 - $2,890
$2,850 - -
•
$2,800
Scenario 2 Scenario 3
0 Island WWTP ■Lift Stat. & Forcemain
It is clear from the results that the current City collection and area charges that would be
collected from the new residential units on the island are not enough to pay for either sewer
system option. This implies that most likely a separate sewer district would need to be
established on the island in order to recover the associated sewer capital costs.
2. Net Operating Revenues
The chart below shows the average annual net operating revenues from 2000 to 2020 for the
island sewer system options for each residential development scenario. The net revenues are
calculated by subtracting the estimated sewer system operating costs as determined in the Rieke
Carroll Muller Associates study from the user charges that would be collected based on the
current City charge of$2.10 per 1,000 gallons. Refer to Part E of the Appendix for detailed cash
flow tables for each scenario and option.
•
Page 34 Tischler& Associates, Inc.
Average annual deficits result for all scenarios and options with the exception of the Lift Station/
Forcemain option under Scenario 3, where about $800 to $1000 in average annual net revenues
are generated for Option B and Option A, respectively. The worst results occur for the WWTP
option generating large deficits for all scenarios given operating costs are significantly more
expensive. Similar to the capital cost analysis, these results imply that depending on the
development scenario and the sewer system option, a separate sewer district with correctly
calibrated user charges may need to be established on the island in order to recover the associated
operating costs.
Grey Cloud Island Fiscal Analysis
Average Annual Sewer Net Operating Revenues (2000 to 2020)
Island WWTP versus Lift Station/Forcemain
$5,000
$1,016 $819
$0 ,
mommm m� i 1E1101 moms
Scenario 2A Scenario 2B Scenario 3A Scenario 3B
� 9).
($5,000) - - ($418) - - - `- - - - -
• ($10,000) - - - -- -
($11,390) ($10,295)
II
($15,000) - ($i2,776)-
($17,x'
($20,000)
0 Island WWTP ■Lift Stat. & Forcemain
•
Page 35 Tischler & Associates, Inc.
V. COUNTY/DNR COSTS AND REVENUES
As part of this analysis, TA held discussions with the DNR and Washington County and
reviewed data provided by the County estimating park purchase, development, and operating
costs as well as the operating revenues for each of the development scenarios. The park purchase
and development costs are summarized in Part A below, and the park operating costs and
revenues are summarized in Part B for each of the scenarios.
A. Regional Park Purchase and Development Costs
The table below shows the estimated park purchase and development costs for each of the
development scenarios. This data should be viewed as preliminary based only on conceptual
design plans. (It should be noted that the data below was provided in January, 1999.
Subsequent to that time, the DNR has indicated that it would not develop a park under the high
residential scenario, Scenario 3. The information is provided, however,for informational
purposes.)
Park Development Costs
Grey Cloud Island Fiscal Analysis
Scenario 2 Scenario 3
Purchase and Scenario 1 Low Density Res High Density Res
•
Development Costs All Park Land and Park and Park
Total Park Acreage 1,400 1,100 1,000
Land Purchase $11,879,300 $7,558,300 $7,479,300
Development $6,550,000 $5,567,500 $5,240,000
Capital Equipment $8,000 $8,000 $8,000
Total Capital Cost $18,437,300 $13,133,800 $12,727,300
Source: Washington County Department of Transportation& Physical Development,
January 19, 1999 Memoranda
The most expensive scenario is Scenario 1, the All Park scenario, which assumes no residential
development. The total cost for this approximate 1,400 acre park is about $18.4 million,
comprised of $11.9 million for land purchase and $6.6 million for development and capital
equipment costs. For Scenario 2, which assumes low density residential development and an
approximate 1,100 acre park, the total cost is $13.1 million. This is about $5.3 million less than
the All Park scenario. About $4.3 million of this difference is due to a smaller land purchase
price for a smaller park, and about $1 million of the difference is due to a reduced development
cost. For Scenario 3, which assumes high density residential development and an even smaller
1,000 acre park, the total cost is $12.7 million, not significantly different than Scenario 2.
Page 36 Tischler & Associates, Inc.
The purchase price of the park land is based on the estimated value of the Schilling properties
and the value of the property owned by others on the island. The Schilling property value is
based on the Mardel, Amundson, Johnson, &Liemess, Inc. appraisal. The remaining property
values are estimated to be 1.5 times their assessed value which is outlined in the County's
January 1999 memorandum.
Given that the Grey Cloud Island Regional Park Master Plan does not have a capital development
program the park development and capital equipment costs are based on a review of existing park
properties in the Washington County Park system. Development costs include all infrastructure
(in-park roads &utilities), site development, buildings, and associated support facilities. The
development costs do not include bridges onto the island or any capital improvements of roads
and bridges off the island. (Refer to Section III, Part D for details on off-site road cost
estimates.) Capital equipment costs are minor representing maintenance equipment such as
mowers, a small tractor, and other minor equipment. It can be assumed that the costs would not
vary significantly if the park were to be developed by the DNR versus the County.
The funding source for the purchase of the park land is not in the memoranda provided by the
County. It is indicated, however, that the funding for the development of the park would be
provided by the Metropolitan Council, and the capital equipment purchases would be funded by
the County.
Conceptual Wastewater Cost Study for Lower Grey Cloud Island
The park development costs outlined in the table above include utility costs based on a review of
the existing park system in the County. Separate from this, sewer costs for the park were also
estimated in the Conceptual Wastewater Cost Study for Lower Grey Cloud Island prepared by
Rieke Carroll Muller Associates, Inc. The table below summarizes the costs outlined in the study
for each development scenario. Only the park portion of the costs are shown based on the
marginal increment necessary in excess of the residential development sewer costs. The
residential component of the sewer costs are discussed in Section III, Part E.
Sewer Capital Costs Associated with Park Development
Grey Cloud Island Fiscal Analysis
Scenario 1 Scenario 2 Scenario 3
Capital Costs All Park Low Density Res. High Density Res.
Collection System on Island $0 $10,000 $10,000
Island WWTP(ind. sewage treat.sys.for Scenario 1) $390,000 $280,000 $230,000
Lift Station/Forcemain to City Sewers(2) $0 $0 $0
Total Island WWTP(ISTS for Scenario 1)(1) $390,000 $290,000 $240,000
Total Lift Station/Forcemain to City Sewers(1) $0 $10,000 $10,000
(1) Inlcudes Collection System on Island.
(2)Assumes Lift Station/Forcemain costs are born by residential development.
. Source: Conceptual Wastewater Cost Study for Lower Grey Cloud Island Using City of
Cottage Grove Development Scenarios, Rieke Carroll Muller Associates, Inc.
Page 37 Tischler & Associates, Inc.
The Rieke Carroll Muller Associates study indicates that under the All Park scenario with no 11110
residential development that the sewage would be handled by an on-site individual sewage
treatment system at a total cost of$390,000. Two sewer options are shown for Scenarios 2 and
3 which do include residential development: 1) an Island Waste Water Treatment Plant
(WWTP), and 2) Lift Stations/Forcemains to City Sewers. The marginal park portion of the
costs for the WWTP option are $290,000 and $240,000 for Scenarios 2 and 3, respectively. The
park portion of the costs for the Lift Station/Forcemain option are minimal, only accounting for
the collection system, given that there are no marginal costs associated with this system due to
the park. Refer to the Rieke Carroll Muller Associates study for details.
B. Regional Park Operating Costs and Revenues
The table below summarizes the estimated annual operating costs and revenues for the park
under each scenario.
Annual Park Operating Costs and Revenues
Grey Cloud Island Fiscal Analysis
Scenario 2 Scenario 3
Operating Costs Scenario 1 Low Density Res High Density Res
and Revenues All Park Land and Park and Park
•
Total Park Acreage 1,400 1,100 1,000
Annual Operating Cost $250,000 $237,500 $237,500
Annual Operating Revenue $100,000 $90,000 $85,000
Net Operating Cost $150,000 $147,500 $152,500
Source: Washington County Department of Transportation& Physical Development,
January 19, 1999 Memoranda
For Scenario 1, the All Park scenario, total annual operating costs amount to $250,000. Annual
revenues are estimated to be $100,000 for a net annual operating cost of$150,000. For Scenario
2, the annual costs are reduced slightly to $237,500 due to the smaller park. Annual revenues
under this scenario are estimated to be $90,000 for a net annual operating cost of$147,500. For
Scenario 3 the annual operating costs are the same as costs under Scenario 2 at an estimated
$237,500. Revenues are reduced slightly, however, to $85,000 resulting in a net annual
operating cost of$152,500.
The operating and maintenance costs include all permanent and seasonal staffing, the
maintenance of grounds and facilities, and supplies and programming. The costs from Lake
Elmo Park Reserve and St. Croix Bluffs Regional Park were analyzed in order to estimate the
park costs for Grey Cloud Island. The County's memorandum indicates that funding for •
Page 38 Tischler & Associates, Inc.
operations and maintenance would primarily come from the County, with approximately 8 to 10
• percent provided by the Metropolitan Council.
Revenues would come from two basic sources: 1) an increase in the purchase of daily and
annual car permits, and 2) user fees generated by camping and picnic shelter use. Similar to
costs, revenues for the Grey Cloud Island park were estimated based on fee structures and
revenues from Lake Elmo Park Reserve and St. Croix Bluffs Regional Park.
Conceptual Wastewater Cost Study for Lower Grey Cloud Island
Sewer operating costs for the park were also estimated in the Conceptual Wastewater Cost Study
for Lower Grey Cloud Island prepared by Rieke Carroll Muller Associates, Inc. The table below
summarizes the costs outlined in the study for each development scenario. Only the park portion
of the costs are shown based on the marginal increment necessary in excess of the residential
development sewer costs. The residential component of the sewer costs are discussed in Section
III, Part E.
Sewer Operating Costs Associated with Park Development
Grey Cloud Island Fiscal Analysis
Scenario 1 Scenario 2 Scenario 3
Annual Operating Costs All Park Low Density Res. High Density Res.
• Island WWTP(ind. sewage treat.sys.for Scenario 1) (1) $22,000 $23,000
Lift Station/Forcemain to City Sewers (2) NA $11,600 $11,700
(1)OM&R costs for the individual sewage treatment system for Scenario 1 have not been estimated.
(2) For the All Park Scenario,this would not be an option.
Source: Conceptual Wastewater Cost Study for Lower Grey Cloud Island Using City of
Cottage Grove Development Scenarios, Rieke Carroll Muller Associates, Inc.
The Rieke Carroll Muller Associates study indicates that under the All Park scenario with no
residential development that the sewage would be handled by an on-site individual sewage
treatment system. The operating cost for this system has not been estimated. Two sewer options
are shown for Scenarios 2 and 3 which do include residential development: 1) an Island Waste
Water Treatment Plant (WWTP), and 2) Lift Stations/Forcemains to City Sewers. The marginal
park portion of the costs for the WWTP option are $22,000 and $23,000 for Scenarios 2 and 3,
respectively. The marginal park portion of the costs for the Lift Station/Forcemain option are
$11,600 and $11,700 for Scenarios 2 and 3, respectively. Refer to the Rieke Carroll Muller
Associates study for details.
Page 39 Tischler & Associates, Inc.
VI. ECONOMIC IMPACTS OF PARK VISITORS
As part of this analysis, TA has been asked to review and provide a summary of economic impact
data resulting from the proposed park that had been prepared by the Metropolitan Council. Part
A below provides a general summary of the memorandum provided by the Council. A brief
critique of the analysis in general and in context of fiscal impacts on Cottage Grove is discussed
in Part B.
A. Metropolitan Council Economic Impact Analysis Summary
The methodology used to determine the economic impacts resulting from the proposed Grey
Cloud Island Regional Park was based on the following steps:
1. Park visitation rates were estimated based on rates from four comparable parks including St.
Croix Bluffs Regional Park, Lillydale-Harriet Regional Park, Battle Creek Regional Park, and
Fort Snelling State Park. The average visitation rate in 1997 of these four parks was 353,961,
which is the base average estimated for Grey Cloud Island.
2. The base visitation rate, 353,961, is multiplied times the estimated percentage increase in
population in the seven county metropolitan area from 1997 to 2020 (17 percent increase).
The resulting estimated visitation rate at Grey Cloud Island in 2020 is therefore 415,000
(353,961 times 1.17).
3. The total estimated visits are then divided between day visits and camp visits based on the
average current breakdown at three nearby regional parks with camping facilities -- St. Croix
Bluffs, Lake Elmo, and Lebanon Hills. The average is about 90 percent day visits and 10
percent camp visits for these parks, resulting in 374,068 estimated day visits and 40,932
estimated camp visits for Grey Cloud Island.
4. The visits were then further broken down by visitor origin -- between 1) metropolitan
residents, 2) non-metropolitan Minnesota residents, and 3) non-Minnesota residents. This
breakdown is based on a 1998 Metropolitan Council survey of regional parks. Ninety percent
of the visitors originated in the metropolitan area, and the remaining 10 percent were split
between non-metropolitan Minnesota and non-Minnesota residents.
5. The final breakdown of Grey Cloud Island visitors by visitor type were then multiplied times
average daily expenditures. The expenditure estimates are from a DNR study conducted in
the late 1980s, which estimates how much is spent in local communities by both day and
camp visitors to state parks. The study also estimated expenditures by origin as described in
point 4 above. The result, in 1999 dollars, was a total annual expenditure amount of$6.4
million resulting from the estimated 415,000 annual visitors.
6. This total was then broken down by type of expenditure based on the original survey results
of the DNR study. Of the total annual $6.4 million: 31 percent would be spent on food, 25
percent on transportation, 18 percent on lodging, 15 percent on entertainment/activities, and
Page 40 Tischler & Associates, Inc.
11 percent on miscellaneous.
The study then provided an analysis of where the expenditures would be spent. This is of interest
to all parties involved given that the Grey Cloud Island Park would be located in Cottage Grove.
The DNR expenditure study assessed the geographic expenditures within a minimum of thirty
miles from the parks analyzed. This radius covers the majority of the metropolitan area. The
Metropolitan Council analysis therefore indicates that it is difficult to estimate the geographic
distribution of expenditures due to a wide array of services and products available throughout the
metropolitan area and the relatively short travel distances to reach those goods and services.
Thus, the Metropolitan Council assessment concludes that it is not possible to estimate how
much of the estimated$4.6 million would be spent in Cottage Grove without further study.
B. Critique of the Analysis
General Considerations
The conclusion of the Metropolitan Council analysis speaks for itself, that it is not possible to
estimate how much of the total expenditures from visitors to Grey Cloud Island Park would be
spent in Cottage Grove based on the DNR expenditure study. There are a number of other issues
and questions that arise from the analysis that should be taken into consideration including:
• The estimated 415,000 visitors to Grey Cloud Island Park assume that these all will be net
• new park visitors based on current park visitation rates from selected parks in the area. This
assumption does not take into account that, by developing Grey Cloud Island Park, total park
capacity in the metropolitan area increases. Park visitation demand will not necessarily
increase as park capacity increases. It may be that total metro area park visitation remains
constant or only marginally increase, thereby reducing the average number of visitors per
park, including the estimates given for Grey Cloud. The only way to resolve this problem is
to obtain more information regarding park capacity and demand in the metropolitan area.
The Metropolitan Council analysis does indicate that regional park visitation has increased
more rapidly than the population of the seven county metropolitan area. Any quantitative
assessment of this should be taken into consideration when estimating total net new park
visitors.
• The Metropolitan Council analysis is based on the average visitation rates of four parks as
indicated in Step 1 above. The actual visitation rates for each of these four parks, however,
vary widely: St. Croix Bluffs Regional Park-- 86,700 , Lillydale-Harriet Regional Park --
283,300, Battle Creek Regional Park--488,200, and Fort Snelling State Park -- 579,845.
These parks are also each unique with different amenities and capacities. To take an average
hides these differences. The analysis does provide an expenditure range for Grey Cloud
Island visitors based on these varying visitation rates. The low is $1.5 million and the high
is $10.3 million. The concluded average of$6.3 million estimated for Grey Cloud Island is
quite arbitrary. Again, the capacities and sizes of these parks in relation to the projected
capacity and size of the proposed Grey Cloud Island Park is not taken into consideration.
•
Page 41 Tischler & Associates, Inc.
• The Metropolitan Council analysis does acknowledge that any estimated expenditures within
Cottage Grove would be dependent on the types of services and attractions available. Any •
estimate of the percentage spent in Cottage Grove would have to take into consideration the
amount of available retail space, restaurants, hotels, and other services. Both demand and
supply need to be understood as part of any further analysis.
Considerations In Relation to Fiscal Impacts
Regardless of the lack of any relatively accurate quantitative estimate of expenditures that would
be spent in Cottage Grove, there is no doubt that there would be some degree of enhanced
economic activity in the City as a result of the Grey Cloud Island Park. There will be visitors,
and these visitors will pass through Cottage Grove, This will provide opportunities for
economic development in the City enhancing retail, hotel, restaurant, and other service related
business prospects. The City,should plan for this opportunity and develop policy to meet its
objectives.
Section IV of this report describes the direct fiscal impacts to the City from the development of
the park and residential units on Grey Cloud Island. It does not.attempt to measure the indirect
or spin-rfj fiscal impacts from ancillary retail and other service related development resulting
from park visitors. As indicated earlier, more information is necessary for any further analysis.
Some general issues related to potential indirect fiscal impacts can be summarized, however.
First, any increase in business activity will not necessarily translate into a substantial or even a .
positive fiscal outcome. Retail and other development will increase property taxes to the City,
but costs for public safety and other City services will also increase. Furthermore, the City does
not directly receive sales tax revenues, the major revenue benefit of retail development. Sales
taxes are collected by the State. The City also does not collect hotel (or transient occupancy)
taxes. As part of the Metropolitan Council Fiscal Study, TA is conducting a prototype fiscal
impact analysis, which measures the fiscal impacts by type of land use prototype. When this
study is complete, it will provide better insight into the fiscal impacts of retail. office, and
industrial development in Cottage Grove. (The study will not include the fiscal impacts of hotel
development.)
Second, fiscal considerations are only one aspect of economic development policy and
objectives. Providing jobs for local residents is another major consideration, An increase in
business opportunity in the City resulting from Grey Cloud Island Park will certainly enhance the
potential job base in Cottage Grove. Local job needs and desires should therefore also be part of
any City policy decisions.
1111
Page 42 Tischler & Associates, Inc.
APPENDIX
A. Road Segments Graphic
ROADWAY IMPROVEMENTS
'..'747::-li'sil.r.:11'
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r ;. ,���,.
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Water.shp s
Page Al Tischler & Associates, Inc.
B. 20 Year Annual Net Revenue Charts
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
County Park -- SCENARIO 1
$o ■ a ■: a a ■ ■ a ■ . . ■ ■ ■ ■ a
.4,404,40,40,40b,,,,,i). ft:4 - -
($100) — _
- - - - - - - I
($250) -
($300) — -
($350) — -
($400)
—�—Scenario 1
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
County Park -- SCENARIO 2
$60
$40 - - -
$20 - -
$0
($60) � ;
($80)
($100) -
($120)
—�Scenario 2--Option A—0—Scenario 2--Option B
•
Page A2 Tischler & Associates, Inc.
•
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
County Park -- SCENARIO 3
$400
$350
c $250 - - _ - -
g
x $150
$100
$0 • `i • i
cP' o°�' cP° oc t' °°`' o°cO o°4 e e e °`, °'`� °`° °'`° °'``' °`° °`� °'`° °�° oti°
'� ti ti ti °l. ti 9. ti ti L ti L ti °L �L ti ti ti �L �L 4.
—A--Scenario 3--Option A—0—Scenario 3--Option B
40
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
DNR Park -- SCENARIO 1
$0 ■ ■ • • U • a m w U ■ ■ ■ ■ ■ ■
($100> -
($150) -
($250) _ -
($300)
($350) . ,
($400)
—IA—Scenario 1
I
Page A3 Tischler & Associates, Inc.
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
DNR Park-- SCENARIO 2
•
$20 —
$0
($80)
($100) - •
($120) -
($140) —
($160)
—A—Scenario 2--Option A—0--Scenario 2--Option B
S
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
DNR Park-- SCENARIO 3
$400
$350 -
$300
- - - - - - - .
0
x j
$150
$100 -
$50
$0
09
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�—Scenario 3--Option A—0—Scenario 3--Option B
S
Page A4 Tischler & Associates, Inc.
• C. 25 Year Annual Net Revenue Charts
GREY CLOUD ISL AND DE VE L OP AIE NT SCE NAR IOS
Cottcge Grove Annud Net Operding Revenues
County Pak -- SCE NAR IO 1
$0 • • . • • . • • • • • . • •
(„,,f4#.e.e. .#.., e‘f.-#eky_,,,_ct:,,,VR .,si? <9 .‘ ?9' -
($100) -
($150) - - - - -
($200) - - - - - -
($250) - - -
($300) - -
($350) -
($400)
-Scencrio 1
•
GREY CLOUD ISLAND DE VE L OP ME NT SCE NARIOS
Cottage Grove Annud Net Operding Revenues
County Pak -- SCE NAR IO 2
$250
$150
$100 _
g $50 - - -
x
$0 ell . .# 11/ i• • 0 =
1.if_tiesteeit,e)to\e,e.4.-- ,,tz- etl" ,e"
($100) -
($150)
--S cenvi o 2--cpfi on A--♦-S cenori o 2--cpii on B
•
Page A5 Tischler & Associates, Inc.
GREY CLOUD ISLAND DE VE L OP NE NT SCE NAR IOS •
Cottage Grove Annud Net Operding Revenues
County P cr k -- SCENARIO 3
$400
deQ - -
/ $200 -- -
$100 - - - - - - - - - -
$50 - _ , - - - - -
$0 i ice-i
Vry V �� V^ '\O • try "D 'v 1h '.b -:• -:° 1Q gcsv k, ry
-,�S cencrio 3--Cption A-I-S cencrio 3--C ption B
•
GR E Y CL OU D ISLAND DE VE L OP ME NT SCE NAR IOS
Cottage Grove Net Operding Revenues
DNR Pak -- SCENARIO 1
$0 . • •_ • • . • •. • • • •_ • • • • ;
.
($100)
_ - - - - - -
($200)
($250)
($300)
($350) - -
($400)
-4-S cencrio 1
•
Page A6 Tischler& Associates, Inc.
• GREY CI.OU D IS LAND DE VE LOP ME NT SCE NAR IOS
Cottcge Grove Net Oper ding Revenues
DNR Pcrk -- SCE NAR IO2
$250
$200 -
$150
$100 !
g $50
so a i . :. . . i 'e e • •
($100
, , N ..,` -17'` ...(;) '0 '\ q) :•*``Ir--• 's. A f') c. (0
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4, ,, ,,, ,
. ,....
i
($200)
I--i—S cencrio 2--Option A— --S cenaio 2--Option B
410 GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottoge Grove Net Oper cling Revenues
DNR Pcrk -- SCE NAR IO3
$400
- MINIM -
{
0
g
X
$100
$0 �'-
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(9 r1 r, (9 .,§- (9 �1 (9- (9,- 41 (9 c-,9 ,9 c-, (,,, r,
—a—S cenaio 3--Option A--ID—S cencrio 3--Option B
•
Page A7 Tischler & Associates, Inc.
D. Annual Cost, Revenue, and Net Revenue Charts
•
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
Scenario 1 -- County Park
$500
$300 - - - -
�
O $0
ss : s
Z` ($104$' : �' . „y, Q. A
fir 4: <�? �V `a �v #e -&
200
($ ) - - - _
($300) -
($400) - -
($500)
--a-Revenues Costs -0-Net Revenues
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
Scenario 2, Option A-- County Park
$500
$400 -
i
$300 - . -�f "■ •
$200
Zc $100 " ♦ ,► •
$0 - - -
447
$10
.4; 111- L. `if- fl qtr_ 41,/IL" fV tli_
($200)
�-Revenues Cos is -40-Net R evenues •
Page A8 Tischler & Associates, Inc.
•
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
Scenario 2, Option B -- County Park
$500
$400 /
$300 _ .! I
c $200
C
X $100 - - - - - - - -
so • , ,„, .. ,
A' d cy cy
($100 ,v- -- - �u. ' ° � Q �v° ' ' n° ° n° rya ti
1
($200)
-f-Revenues -,k-
Costs a-
0 Net Revenues I
•
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
Scenario 3, Option A-- County Park
$800
_
-
$soo
MI ■ • ■
$400 _
$300 -
$200 -
$100 -
$0:z0o ds8^ 8v So &,' o0 cP% 0°0 So o�0 % 0 0'0 0 0 0"0 0" o"0 0 otio o`ti^ otic oeo otib otic
cv cv ,L �L cL ,v cv cL cL cv ry cL 4L cIr �L 1 (V cL �L �v <L (L cv cL <v cL
-a-Revenues -,k-Costs -•-.Net Revenues
•
Page A9 Tischler & Associates, Inc.
.
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
Scenario 3, Option B -- County Park
$900
$s0o -
$700
$600 - _ _
■ ■ ■ a
$500 — - -
-
-
$200 - �
♦ a J ,a i
$100 — - - - - - .
$0 • • • •
• •,gyp• i • • • • •`• i
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--E—Revenues --r—Costs —CNet Revenues
•
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
Scenario 1 -- DNR Park
$400 — _ - - _ _
$300 —
$200 _ _
$100 ,
s
($100 i3 A), �i s1r 7 C� '�
($200) ..
($300)
($400) -
($500)
--3—Revenues —,k—Costs —f—Net Revenues
11
Page A10 Tischler & Associates, Inc.
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
Scenario 2, Option A-- DNR Park
$500
-
i
$300 _a _R _■
$100 - - ► a .a
$04111116. — - -
� �, - (If (1 ,tea • ( o
Q
($100 N�fL. . 5L t, +b N� N �L� �i - +1+ p V.g&ifo qti pti pry
F. ti- �Y. R�- +b. fL- iL_ SL-
($200)
t Revenues —a—Costs —0—Net Revenues
• GREY CLOUD ISLAND DEVELOPMENT O MENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
Scenario 2, Option B -- DNR Park
$500
$300 - -` - - - - ■ .■ _7It _III
-
Z^5
$100 � .♦ .♦ a
$01114 4111 . 411-114. 00111111 • 110- *
�' rye' fib' ryh
($100 - ° '• ° '- �*,. ® '' '" °" �° �)
($200)
-f—Revenues --a—Costs -CNet Revenues
•
Page Al l Tischler & Associates, Inc.
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
Scenario 3, Option A-- DNR Park
$800
- - -
$soo
$500 - i
$400
$200
$100 -
Oma' 00 O ti Oh b h do O^ 00 O ^ ^ �ti ,�^ c0 ,^ �O ^°j O cL 0, b h
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—•—Revenues --i—Costs -♦—Net Revenues
•
GREY CLOUD ISLAND DEVELOPMENT SCENARIOS
Cottage Grove Annual Net Operating Revenues
Scenario 3, Option B -- DNR Park
$900
$800 -
$700 _
$soo
$500 - i ■ s
X $400
$100 A •
$0 • i • i i •' • "•'i •'• • `• i • i
ooch e c4'v e g� cPh d� � `vo oti otic otio orb otih
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—u—Revenues —A—Costs --0—Net Revenues
•
Page Al2 Tischler & Associates, Inc.
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