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HomeMy WebLinkAbout2015-04-14 PACKET 04.B.01. To: Economic Development Authority From: Ryan R. Schroeder, City Administrator Date: April, 2015 Subject: Development Update 2015 Building Permit Activity Building permit numbers for the year-to-date are off to a great start at just over $18.8 million in total volume for the first three months of the year. This compares to an average for the first three quarters 2003-2014 of $11.8 million. A significant portion of this activity relates to the air handling and odor suppression equipment for the Leafline project which represents just under $4 million of this total. As the Board is aware, however, we have other significant Business Park projects in the queue which represent continued escalation in commercial activity for the year (see below). From a residential perspective we continue at the same pace we have realized since 2007. We continue to recognize, however, an escalation in the permit values for new single family construction which now averages over $320,000/unit; a significant improvement over all prior years. To date we have permitted 16 homes with 10 more in the queue. Business Park Expansions / Additions Werner Electric On February 26, 2015 Werner received notification from the Minnesota Department of Employment and Economic Development (DEED) that it will provide up to $244,000 in Job Creation Funds and $81,250 in a capital investment rebate over the next four years to assist with their expansion project. Werner has submitted a building permit application for a 65,279 square foot addition to their existing building with a construction value of $4,000,000. This project is anticipated to create up to 46 jobs. Renewal by Andersen On March 20, 2015 Renewal by Andersen received notification from the Minnesota Department of Employment and Economic Development that it will provide up to $647,000 in Job Creation Funds and $800,000 in a capital Investment rebate over the next five years to assist with their expansion project. On March 27, 2015 the City received notification from DEED that we will receive $500,000 from the Minnesota Investment Fund in order to grant a loan to Renewal to assist with this same project. Renewal is anticipated to construct a 125,000 square foot expansion with a value up to $16 million which will facilitate the creation of up to 200 jobs. The announcement of this project occurred at an event held in Bayport on April 6, 2015. th As part of this project the storm pond at the intersection of 97 Street and Jamaica will need to be expanded. The City has requested South Washington Watershed District Coordinated Capital Improvements funds to assist with this pond expansion. American Logistics th This approximate 100,000 SF expansion of an existing building at 7800 97 Street is contingent upon creation of a TIF District which is scheduled to occur at the City Council meeting of April 15, 2015. Additionally, the EDA will be holding a public hearing on April 14, 2015 to approve an application by the City for DEED Minnesota Investment Funds which is anticipated to result in the availability of about $300,000 in project funding. The development agreement has previously been approved, however, the project site has expanded to 9.2 acres and therefore the project proforma has been adjusted accordingly. 2015 Pavement Management The City Council awarded bids for the 2015 pavement management project on March 18, 2015. The award was granted to McNamara at $4,636,572.58. This bid was almost 20% below engineers estimate, due in large part to the recent reduction in oil prices. The bid th impacts EDA efforts in that the completion of 97 Street within the Business Park was part of the bid package and project scope. On March 1, 2015 the City Council held a workshop to review a portion of the pavement management schedule for future years. Enclosed, please find a map of projected projects between now and 2027. Of note is that the modern era of pavement management began in 1994. The earliest projects completed with initiation of this project are re-appearing within this th next 12 years as well. The most significant of these are East Point Douglas and 80 Street, the latter of which will likely receive a major maintenance procedure in the 2016-2018 timeframe. Rush On February 18, 2015 the City Council ordered abatement of hazardous and health concerns at the former Rush Night Club at 7359 West Point Douglas Road South. Concerns related to the need for mold mitigation, unsecured intrusion areas from water and animals, electrical hazards and the like. Since that time the owner of the property has been undertaking mitigation of these concerns. Included has been removal of flooring, ceiling tiles, and miscellaneous debris. The property owner has reported that there appears to be an increasing level of interest in the property from prospective tenants and/or purchasers. River Oaks Lease Extension The River Oaks Golf Course operates on both land owned by the City of Cottage Grove and on land leased by the 3M Company. The 3M lease comprises approximately 7 holes of the golf course. On March 4, 2015 the City Council approved entering the next five year lease extension which runs through April 2020. Upon the 2020 expiration the City is entitled to one final five year extension absent negotiation of additional extensions or a new lease. This lease has been of significant benefit to both parties. The lease payment is in the amount of $1/month (we paid all five years in advance!). On the other side River Oaks provides ground maintenance of this 3M buffer property which otherwise would likely be a fenced security responsibility of the 3M Company.