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HomeMy WebLinkAbout2017-12-12 Compele Packet CITY OF COTTAGE GROVE Economic Development Authority AGENDA December 12, 2017, 7:30 A.M. Cottage Grove City Hall, St. Croix Conference Room 1. Call to Order 2. Roll Call 3. Approval of Minutes 3.1 October 4, 2017 EDA Minutes 4. Business Items 4.1 Renew Letter of Intent with HAF Architects 4.2 Economic Development Year in Review Presentation 5. Public Hearings 6. Other Business 6.1 EDA Calendar 6.2 EDA Comments 6.3 Response to Previous EDA Comments – Airbnb and lodging tax 7. Workshop 8. Adjournment *The next EDA Meeting will be held on Tuesday, January 9, 2018, at 7:30 AM CITY OF COTTAGE GROVE E CONOMIC D EVELOPMENT A UTHORITY MINUTES October 10, 2017 Pursuant to due call and notice thereof, a regular meeting of the Economic Development Authority was th held at Cottage Grove City Hall, 12800 Ravine Parkway, Cottage Grove, Minnesota 55016 on the 10 day of October, 2017. CALL TO ORDER The meeting was called to order at 7:30 a.m. by EDA President Bailey. ROLL CALL Members Present: Myron Bailey, EDA President Chris Carey, EDA Member Steve Dennis, EDA Vice President Dan Myers, EDA Member Ramona Westerberg, EDA Member Members Absent: Eric Thiewes, EDA Member Staff Present: Charlene Stevens, EDA Executive Director Jennifer Levitt, Community Development Director/City Engineer Christine Costello, Economic Development Director Robin Roland, Finance Director Matt Wolf, Economic Development Assistant Others Present: John Shardlow, Stantec Senior Principal APPROVAL OF MINUTES 3.1EDA Vice President Dennis motioned to approve the June 13, 2017 EDA Meeting Minutes. EDA Member Westerberg seconded. Motion passed unanimously (5-to-0 vote). BUSINESS ITEMS 4.1 Business Inquiry/Community Development Update Economic Development Assistant Wolf gave an update on the projects that are in development around the City of Cottage Grove. Economic Development Authority – Minutes th October 10, 2017 Page 2 of 3 EDA Vice President Dennis stated he was pleased with the direction the City of Cottage Grove was headed and that permit valuations over the past three years were the greatest period of growth the City of Cottage Grove had seen in its history. 4.2 Presentation on Cottage Grove Business Park AUAR Stantec Senior Principal John Shardlow gave a presentation on the Alternative Urban Area Review (AUAR) in the Cottage Grove Business Park. PUBLIC HEARING None OTHER BUSINESS 6.1 Calendar EDA President Bailey reminded everyone of the Fire Department Open House at Kingston Park on October 13, 2017 and on Sunday, October 15 the Oktoberfest Fundraiser for the Friends in Need Food Shelf at Historic Hope Glen Farm. EDA President Bailey also reminded citizens of the My Future Cottage Grove Launch Party on Wednesday October 25, 2017 at the Furber Farm Event Center. EDA Vice President Dennis spoke about the Cottage Grove Area Chamber of Commerce membership drive the evening of Tuesday October 10, 2017. EDA Vice President Dennis thanked former EDA Member Trent Cole for his service on the EDA. EDA President Bailey stated the Economic Development Authority had an opening on the EDA and that applications for the position are on the website. 6.2 EDA Comments None 6.3 Response to Previous EDA Comments Lodging Tax Discussion – Economic Development Assistant Wolf gave a presentation on lodging tax use in the State of Minnesota and some examples of how lodging tax proceeds have been utilized in other cities in the Metro Area. EDA Member Myers asked how effective the marketing was using the lodging tax in other municipalities that have the Lodging Tax. Economic Development Assistant Wolf stated that all the communities felt their hotels saw an increase in overnight stays due to the marketing that occurred as a result of the lodging tax but overall the community’s success was tied to the amount of funds that were available to market their communities. EDA Vice President stated he supported the use of a lodging tax to market the community but agreed with the recommendation to wait until a third hotel was in place before implementing the tax. EDA Member Westerberg asked if there was a way to implement the tax on facilities that are booked through Airbnb and weren’t necessary hotels. Economic Development Assistant Wolf stated that he was Economic Development Authority – Minutes th October 10, 2017 Page 3 of 3 not sure how Airbnb and other facilities like them worked within the context of the Lodging Tax but would find out for the next meeting. EDA President Bailey said he supported the lodging tax implementation and leaned to the option of partnering with the Cottage Grove Area Chamber of Commerce if the lodging tax were to be implemented. EDA Vice President Dennis stated that he did want the City of Cottage Grove to be thoughtful of how trying to implement a full time staff member through working with the Cottage Grove Area Chamber could affect their organization. Overall recommendation is to wait on the lodging tax until a third hotel is opened in the City of Cottage Grove but to begin working with the Cottage Grove Area Chamber on utilizing the funds to market the City of Cottage Grove. WORKSHOP 7.1 None AJOURN EDA Member Myers made a motion to adjourn. EDA Member Westerberg seconded. The meeting adjourned at 8:19 a.m. (5-to-0 vote). Respectfully Submitted, Matt Wolf Economic Development Assistant TO: Honorable Mayor and City Council Charlene Stevens, City Administrator FROM: Christine Costello, Economic Development Director DATE: December 6, 2017 RE: Re-authorize of the Letter of Intent to Purchase Real Estate Background In 2014 the City of Cottage Grove completed a market study report by Hospitality Marketers International, Inc., to determine if Cottage Grove could support an additional hotel, in particular on the City-owned parcel at the intersection of Harkness Avenue and Hardwood Avenue. The report concluded that an 80-room, limited-service, mid-scale hotel with traditional rooms, a few suites, and a few “extended-stay” style rooms would satisfy the lodging demand for the Cottage Grove market. Based on the findings of the market report, a request for proposal (RFP) was sent to 31 hotel developers to gauge their interest in development of the site. The City received interest from one developer but they did not pursue further interest in the city-owned site. Then in August 2016 the Ruby Tuesday restaurant located next to the site was closed by their corporate headquarters. The Tennessee-based restaurant chain had made a decision earlier that month to close 95 of its 274 locations nationwide, including all but one location in the Twin Cities metro. The City has continued to market both sites at the 2017 ICSC RECon convention for hotel and restaurant/commercial development. Both sites gained interest from developers at the convention and expressed that a smaller format hotel that consisted of less than 80 rooms was more viable for the City-owned parcel since it is under two-acre minimum threshold hotels require for development. Honorable Mayor, City Council, and Charlene Stevens LOI with HAF Development December 5, 2017 Page 2 of 2 On July 11, the City met with HAF Development (HAF) to discuss the development and the redevelopment of the City-owned and former Ruby Tuesday sites. HAF expressed interest in the construction of a hotel and repurposing the former Ruby Tuesday as another restaurant user. Both properties are zoned B-2, Retail Business. A hotel located in this zoning district is a conditional use and a restaurant is a permitted use. The hotel use will require going before the Planning Commission and City Council for final approval. HAF also expressed interest in moving quickly and starting construction on the hotel this year with completion of the project in late 2018. On July 17th the City received a Letter of Intent (LOI) from HAF to facilitate the proposed purchase of the City-owned parcel. The LOI was valid until July 25, 2017, so no additional time under the LOI was available to take the request to the EDA prior to the City Council for consideration. Therefore, the City Council authorized the City Administrator sign the LOI and begin to negotiate a purchase agreement. On August 9th the City-owned parcel was conveyed to the EDA. The EDA is the development entity of the City. The City Council cannot conducted economic development because they are charged with conducting public purpose for the community (public health, safety, welfare, security, etc.) therefore the property was conveyed to the development entity of the City. On September 12th the City met with HAF to continue the discussions of the redevelopment of the parcel at the intersection of Harkness Avenue and Hardwood Avenue. A purchase agreement was also provided to HAF to begin the negotiation process for the parcel. HAF has informed staff that they are continuing to develop their proposal. HAF was also informed that their initial LOI had expired and they needed to submit a new LOI if they wanted to maintain their exclusivity of the site and not have the parcel marketed to other developers. Discussion On November 21st the City received a second LOI from HAF to facilitate the proposed purchase of the parcel. The current LOI is valid until December 15, 2017. A request has been made to HAF to revise their LOI for a date in January 2018 so that it is valid for the remainder of the year. A purchase agreement and developer’s agreement will still need to go before the EDA and City Council for development to take place. Recommendation Authorize the City Administrator to execute the Letter of Intent (LOI) with HAF Development for the purchase of the EDA-owned parcel of land at the intersection of Harkness Avenue and Hardwood Avenue. Development Inquiry Update To: Honorable Mayor Bailey and EDA Members From: Christine Costello, Economic Development Director Date: December 6, 2017 Activites that have taken place in the community that may have a potential impact on economic development activity: Discussion Staff Action MNCAR Expo, October 11, Mayor Bailey, Councilmember Dennis, Economic 2017 Development Assistant Wolf, and Economic Development Director Costello attend the Minnesota Commercial Association of Real Estate/Realtors (MNCAR) Expo. We had an opportunity to interact with over 600+ commercial real estate professionals to discuss various development opportunities in Cottage Grove. Chamber Board of Director’s The Chamber Board held their monthly meeting. Meeting, October 12, 2017 Ribbon Cutting, October 18, Bella Pizza ribbon cutting was held at 7155 80 th Street, Suite 2017 160. Meeting with Chamber Met with Chamber President Jeff Carter to discuss the President, October 23, 2017 potential of a lodging tax in the City of Cottage Grove. The Chamber was very agreeable to the potential tax. Meeting with Mesaba Capital Community Development Director/City Engineer Levitt and Development, October 25, Economic Development Director Costello met with a partner 2017 of Mesaba Capital to discuss various multi-family housing opportunities in Cottage Grove. Follow-up meeting scheduled for December 8th. Meeting with retail Met with franchisee to discuss previous locations staff had franchisee, October 26, 2017 provided as well as potential new locations and their need for being on the a.m. side of the road. Meeting for Park Grove Met with Washington County Building Services and Library Library Redevelopment, staff for a kick-off meeting with Project Manager Jennifer October 30, 2017 McMaster of Hammel, Green, and Abrahamson, Inc. (HGA) Meeting with a business Community Development Director/City Engineer Levitt, looking for an industrial site, Economic Development Assistant Wolf, and Economic October 30, 2017 Development Director Costello met with a business who is looking to expand. A proposal for a four acre site in the Business Park was presented to the business Chamber Board of Director’s City Administrator Stevens and Economic Development Strategic Planning Meeting, Director Costello attended the strategic planning session for October 31, 2017 the Chamber. Meeting with Menards, Community Development Director/City Engineer Levitt, November 3, 2017 Assistant City Engineer Burfeind, and Economic Development Director Costello met with representative from Menards on a proposed expansion that would impact the site Development Inquiry Update December 6, 2017 Page 2 and utilities. Staff provide Menards alternative solutions for their consideration. Chamber Board of Director’s The Chamber Board held their monthly meeting. Meeting, November 9, 2017 Coffee, Code and Croissants, A breakfast lunch and learn was held on common code November 15, 2017 concerns for businesses in Cottage Grove. This was the first session as part of a strategies that were developed from the BR&E Program. East Metro Strong, There is a new representative on the committee for November 27, 2017 Washington County is Commissioner Stan Karwoski. The committee also discussed going to a quarterly meeting. No decisions were made. Meeting with Zumbro House, Community Development Director/City Engineer Levitt, November 27, 2017 Senior Planner Burbank, and Economic Development Director Costello met with representative from Zumbro House and Gonyea Land Company for sites that were available for multi-family housing. Meeting with Highway 61 Community Development Director/City Engineer Levitt, Business Center Property Senior Planner Burbank, and Economic Development Owner, November 29, 2017 Director Costello met with the property owner who owns two parcels next to the storage facility on West Point Douglas Road. Workforce Development Washington County Economic Development Director Chris Meeting, December 6, 2017 Eng, Economic Development Assistant Wolf, and Economic Development Director Costello met with Ling Becker with the City of Vadnais Heights on how they successfully implemented their BR&E strategies. Chamber Holiday Breakfast, Community Development Director/City Engineer Levitt, December 7, 2017 Economic Development Assistant Wolf, and Economic Development Director Costello attended the Chamber Holiday breakfast at Tinucci’s Restaurant. Webinar, December 7, 2017 Economic Development Association of MN held a webinar on current and anticipated future real estate trends among retail, industrial, office and multi-family property uses. TO: Economic Development Authority FROM: Jennifer Levitt, Community Development Director/City Engineer Christine Costello, Economic Development Director DATE: November 7, 2017 RE: Development Update Building Permits Building Permit Statistics: Between November 1 and November 30, 2017, there were 244 building permits issued with a total valuation of $29,378,918, including 7 new homes valued at $2,206,822, and Norris Square, which consists of three buildings (independent living, care center, and town center) that have a combined 142 dwelling units and a total valuation of $24,214,090. As of November 30, 2017, a total of 3,679 building permits have been issued with a total valuation of $160,751,775, including 379 commercial permits valued at $85,244,248 and 104 new residential homes with a valu- ation of $32,322,411. Commercial Permit Valuation Comparison By Month 2016-2017 180000000 160000000 140000000 120000000 100000000 80000000 60000000 40000000 20000000 0 JanFebMarAprMayJunJulAugSepOctNovDec 2017 Valuation2016 valuation Economic Development Authority Development Update November 7, 2017 Page 2 of 10 Commercial/Industrial Construction Activity 180000000 160000000 140000000 120000000 100000000 80000000 60000000 40000000 20000000 0 199719981999200020012002200320042005200620072008200920102011201220132014201520162017 yearpermitsvaluationLinear (permits) Residential Permits -New construction 1996 to 2017 350 300 250 200 150 100 50 0 199520002005201020152020 Economic Development Authority Development Update November 7, 2017 Page 3 of 10 Current Project Updates Oltman Middle School: There are many phases of the project ongoing, including underground plumb- ing, electrical, concrete slab, concrete masonry wall construction, fire suppression, duct installation, roofing, steel stud framing, insulation, and sheetrock. Daily inspections are being conducted for elec- trical, mechanical, framing, and sheetrock. Pictures of various areas of the building are attached. Cottage Grove Middle School: The Certificate of Occupancy was issued. Primrose: The Certificate of Occupancy for this project was issued. CG Sun Solar Garden (McHattie Property): Most of the structural support and underground work is completed with the site being fenced and transformers set. Legends of Cottage Grove: Final inspections are being conducted on the north and middle sections with the final fire alarm system inspection scheduled for December 12. The exterior, including land- scaping, is complete. Norris Square: This project consists of the Town Center, Independent Living, and Care Center build- ings. The Care Center is in the process of completion of underground plumbing and pouring of the concrete slab. For the Independent Living, the contractors are completing the lower level parking con- crete with upper level walls being constructed. The Town Center building is in the process of footing and foundation work. Norris Square Care Center Norris Square Independent Living Economic Development Authority Development Update November 7, 2017 Page 4 of 10 Central Fire Station: The garage doors have been installed. The building is fully enclosed and water tight. The metal framework and glazing are being set. Interior mechanical, electrical, and plumbing work are ongoing. The exterior brickwork is substantially complete. Concrete sidewalks are being poured. The base course of asphalt pavement was placed in early November. The earthwork and utility contractor will continue to work on the stormwater pond and storm sewer utilities as weather allows. The project is scheduled to be substantially complete by May 2018. 65th Street, Geneva Avenue, and Oltman Middle School Improvements: The roundabout concrete was poured the week of October 16. The road was open to traffic the week of November 10. The contractor will continue to work on punch list items, weather dependent. The paved walking trail along the north side of 65th Street will be complete in the spring of 2018. 65th Street at Goodview Avenue Looking eastGoodview at 65th Street Looking northwest Economic Development Authority Development Update November 7, 2017 Page 5 of 10 Calarosa 1st Addition: The Calarosa 1st Addition subdivision includes the development of 71 lots for single and multi-family homes by Lennar, and is located on property east of Pinecliff 5th Addition, south of Military Road, north of 65th Street, and west of Inwood Avenue. This development includes 12 quad style buildings with 48 units and 23 villa-style single family homes. Ideal and Idsen Avenues, north of 65th Street received the initial lift of pavement the first week of November. Ideal Avenue is open to traffic. The developer placed temporary asphalt pavement and temporary curbs along 63rd and 64th Streets within the development to allow for winter construction of buildings. The temporary roads will be removed and replaced with permanent roads in the spring of 2018. Model home con- struction will start in early December and continue through the winter. Idsen Avenue and 63rd Street looking southTemporary Road at 63rd Street looking east Ideal Avenue at 63rd Street looking southSite Plan Well #12: Well 12 is located at 6411 Ideal Avenue South, south of Sunny Hill Park in the green space between the Pinecliff and Calarosa developments. The project is being constructed in two phases. Phase one includes the construction of the well and casing. Phase 2 will include construction of the well house and required site and utilities to bring it into service. Traut Companies began drilling the new well the week of October 23. Drilling of the new well is sched- uled to be complete by December 15. Due to unforeseen geologic conditions, blasting of the well cavern has taken longer than anticipated. Traut will begin well development and test pumping the week of December 4. This process is anticipated to take 10 to 12 days to complete. Phase 2 of the project includes construction of the pump house. Due to delays in well drilling, cavern development, and the upcoming holiday, construction of the new well house will likely not begin until Economic Development Authority Development Update November 7, 2017 Page 6 of 10 the first week of January 2018. The well house is scheduled to be substantially complete and opera- tional by May 1, 2018. Final completion is scheduled by July 1, 2018. Sand removed from well cavern after blastingSamples of separate rock formations encountered during drilling process Well 12 3D Building Rendering Well 12 Location Well #10: Construction on the building enclosure at Well 10 was completed in early November. Con- tractors will continue to work on interior mechanical and electrical components, and they are on sched- ule to be complete in early December. Well 10 Looking northeastWell 10 Looking southeast Well #3: The building enclosure for Well 3 was completed the week of October 9. Internal electrical and HVAC work was completed in November. Economic Development Authority Development Update November 7, 2017 Page 7 of 10 Well 3 treatment plant building rear overviewWell 3 treatment plant entrance and front overview County Highway 19 (Keats Avenue) and East Point Douglas Road: Work on this Washington County project began on May 30. Temporary lights were replaced with the permanent lights in early Novem- ber. The roundabout construction is substantially complete. The contractor will continue to work on punch list items, weather dependent. Wear course paving of the turn lane into the park was completed in early November. Paving of the wear course and a portion of the trails within the park will occur in the spring of 2018, with the park scheduled to be opened by the end of May 2018. East Point Douglas looking northNew Danner Pit entrance at East Point Douglas, north of roundabout New Ravine Park Entrance at County Road 19, County Road 19 and East Point Douglas Roundabout east of roundabout Economic Development Authority Development Update November 7, 2017 Page 8 of 10 2018 Hadley Avenue Reconstruction & Utility Extension: In 2018, the City of Cottage Grove is planning for reconstruction of Hadley Avenue from 65th Street to the Woodbury Border. This will involve replacement of the existing rural section roadway with a new curb & gutter roadway. As part of the reconstruction project, correction of the vertical curves will also be completed to improve the safety of the roadway. Finally, this project will include extension of water main and sanitary sewer north of 65th Street to service the proposed new subdivision on the Amundson parcel. At- tached at the end of this report is a concept layout that provides further details on the road improve- ments. Letters were sent to property owners in the area informing them of the project, and that there could be assessments and easements required. Staff will be meeting with the owners indi- vidually in the coming month to review the project and discuss potential impacts to their property. Planning Division Planning Commission Meeting - tions to the City Council for the following planning applications are summarized below. Kingston Fields D. R. Horton: D.R. Horton has applied for a zoning amendment to rezone 59 acres of land from AG-1, Agricultural Preservation, to R-3, Single Family Residential, with a Planned Development Overlay (PDO). D.R. Horton also applied for a preliminary plat to be named Kingston Fields, which would create 124 single-family residential lots on two lot sizes (79 homes on 65-foot wide lots and 45 homes on 70-foot wide lots) and 14 outlots. This proposed development is located east of Jamaica Avenue, north of Rose of Sharon Lutheran Church, and west of the Cayden Glen and Grayson Meadow residential subdivisions. The Planning Commission held the public hearing on November 27, 2017, for both planning applications. There was no testimony objecting to the project. The Planning Commission was generally supportive of the proposed development plan, but did express some concerns for platting about 66 percent of the lots for smaller rambler homes, the proximity of the rambler homes along Jamaica Avenue, and the average lot size being less than other residential Economic Development Authority Development Update November 7, 2017 Page 9 of 10 subdivisions in the Upper Ravine District. The developer requested that the Planning Commission continue the public hearing to the next Commission meeting so they could have time to review the conditions listed in the planning staff report. The Planning Commission unanimously (9-to-0 vote) recommended that the public hearing be con- tinued to the December 18, 2017, Planning Commission and requested that additional information be provided at that time. After discussion with D.R. Horton, the public hearing is being continued to January 22, 2018. Solar Ordinance Amendment: A draft of a solar ordinance amendment allowing solar energy systems on accessory structures in residential districts was discussed. The draft amendment was prepared based on the Planning Commmission members supported the proposed language to only allow solar energy systems on accessory struc- tures that have a minimum foundation area of 200 square feet and not allow a solar energy system to cover more than the perimeter of the accessory structure roof. The Commission also discussed if the six square feet of cumulative solar energy system not installed on the principal or accessory structure roofs was too small. The range of ancillary solar energy systems that are not roof mounted was 12 square feet to 200 square feet. The Planning Commission unanimously (9-to-0 vote) recommended setting a public hearing date for December 18, 2017, and instructed city staff to modify the draft solar ordinance amendment based on their suggestions. Economic Development Workforce Development: Business Retention and Expansion Program was a focus on workforce development, specifically focusing on the healthcare and manufacturing sectors. Meetings have been setup with Allina Healthcare, Renewal by Andersen, and 3M to discuss workforce issues that are effecting their businesses. Staff is also reaching out to programs around the metro area that are addressing work- force issues with innovative solutions and meeting with them to discuss how those programs were established. As the workforce strategy moves forward, staff will continue to engage key stake- holders (i.e.; School District, DEED, neighboring cities, etc.) on solutions to workforce development and will be working to set up meetings with additional Cottage Grove manufacturing and healthcare businesses. Upcoming Ribbon Cuttings: Economic Development staff has been in contact with The Legends of Cottage Grove and Primrose School on setting up a ribbon cutting date for their grand openings. Both projects are nearing completion, and the owners have indicated they would like to begin plan- in 2018. Economic Development Authority Development Update November 7, 2017 Page 10 of 10 Oltman Middle School Cafeteria Auditorium Gymnasium Pool Lower Level Classrooms Upper Level Classrooms To: EDA From: Christine Costello, Economic Development Director Date: December 5, 2017 Subject: Upcoming Events TO: Economic Development Authority FROM: Matt Wolf, Economic Development Assistant DATE: December 12, 2017 RE: Airbnb and Lodging Tax Background At the October 10, 2017 Economic Development Authority meeting a discussion took place on the implementation of a lodging tax in the City of Cottage Grove. As part of the discussion an inquiry was made on how Airbnb and similar sites worked in regard to the collection of lodging tax. Discussion The MN State Statute 469.10 gives cities the authorization to impose a three percent tax on the gross receipts from lodging at a hotel, motel, rooming house, or resort. This includes any facility that is not rented or leased over a continuous period of 30 days or more. The Cottage Grove City Attorney confirmed that Airbnb facilities do fall under the provision of the MN State Statute as long as they are renting/leasing rooms for a term less than 30 days. Airbnb does not collect local lodging taxes in MN from people renting out their homes or rooms, so it is up to the owner of the property to collect and remit the appropriate local lodging tax. As a result the only way to verify that lodging tax is being submitted by Airbnb lodging facilities in Cottage Grove is to actively watch their website and enforce through the property’s owners.