HomeMy WebLinkAbout2018-02-13 COMPLETED PACKET
CITY OF COTTAGE GROVE
Economic Development Authority
AGENDA
February 13, 2017, 7:30 A.M.
Cottage Grove City Hall, Council Chambers
1. Call to Order
2. Roll Call
3. Approval of Minutes
3.1
December 12, 2018 EDA Minutes
4. Business Items
4.1
Economic Development Update/Business Inquiry
4.2
Consideration of approval of a contract for residential development with Twin Cities
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Habitat for Humanity for 6541 85 Street South
4.3
Certification of Completion for Legends of Cottage Grove
4.4
Resolution of Support for the Job Creation Fund Application in Connection with
Modern Automotive Performance
4.5
Letter of Intent with Modern Automotive Performance
4.6
City of Cottage Grove Community Internet Survey
5. Public Hearings
6. Other Business
6.1
EDA Calendar
6.2
EDA Comments
6.3
Response to Previous EDA Comments
7. Workshop
8. Adjournment
*The next EDA Meeting will be held on Tuesday, March 13, 2018, at 7:30 AM
CITY OF COTTAGE GROVE
E
CONOMIC
D
EVELOPMENT
A
UTHORITY
MINUTES
December 12, 2017
Pursuant to due call and notice thereof, a regular meeting of the Economic Development Authority was
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held at Cottage Grove City Hall, 12800 Ravine Parkway, Cottage Grove, Minnesota 55016 on the 12
day of December, 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
Wayne Butt, EDA Member
Steve Dennis, EDA Vice President
Dan Myers, EDA Member
Eric Thiewes, EDA Member
Members Absent:
Chris Carey, EDA Member
Ramona Westerberg, 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:
None
APPROVAL OF MINUTES
3.1EDA Vice President Dennis motioned to approve the June 13, 2017 EDA Meeting Minutes.
EDA Member Thiewes seconded. Motion passed unanimously (5-to-0 vote)
BUSINESS ITEMS
4.1 Renew Letter of Intent with HAF Architects
Economic Development Authority – Minutes
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December 12, 2017
Page 2 of 3
Economic Development Director Costello gave an overview of the HAF Development project located at
the current vacant Ruby Tuesday parcel, as well as the vacant parcel at the intersection of Harkness
Avenue and Hardwood Avenue.
EDA Vice President Dennis motioned to 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. EDA Member Thiewes Seconded. (5-to-
0 vote)
4.2 Economic Development Year in Review Presentation
Economic Development Assistant Wolf and Economic Development Director Costello gave an overview
of all the economic development projects and work that occurred in 2017.
PUBLIC HEARING
None
OTHER BUSINESS
6.1 Calendar
EDA President Bailey reminded everyone that the Holiday Train would be occurring this Friday,
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December 9 at 5:15 pm. A correction was also made to the EDA Calendar that the State of the City
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Address was February 7 not February 27 as shown on the calendar.
6.2 EDA Comments
EDA Vice President Dennis requested that the Economic Development Review contain a slide or two on
the economic review of the Cottage Grove area found in the Federal Reserve Beige Book.
6.3 Response to Previous EDA Comments
At the October 4, 2017 EDA Meeting a request was made to determine how the lodging tax would be
collected through Airbnb facilities located in Cottage Grove. Economic Development Assistant Wolf
reported that all lodging facilities are subject to the lodging tax but Airbnb does not collect local lodging
tax, so it is up to the owner of the property to collect and remit the appropriate local lodging tax.
WORKSHOP
7.1 None
AJOURN
EDA Member Butt made a motion to adjourn. EDA Member Myers seconded. The meeting
adjourned at 8:14 a.m. (5-to-0 vote)
Economic Development Authority – Minutes
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December 12, 2017
Page 3 of 3
Respectfully Submitted,
Matt Wolf
Economic Development Specialist
Development Inquiry
To: Honorable Mayor Bailey and EDA Members
From: Christine Costello, Economic Development Director
Date: February 6, 2018
Activites that have taken place in the community that may have a potential impact on economic
development activity:
Discussion Staff Action
Chamber Board of Director’s The Chamber Board held their monthly meeting.
Meeting, December 14, 2017
Meeting with Washington Met with Washington County Library and Building Services
County, December 21, 2017 staff along with their Project Manager from HGA to discuss
the timeline for the project. Next step included library visits
for space needs analysis.
Meeting with Events Member of the Events Committee, and discussed ways to
Committee, January 3, 2018 increase chamber business interaction through networking
opportunities.
Meeting with Ambassador Matt is a member of the Ambassador Committee and
Committee, January 4, 2018 attends the meetings to ensure Cottage Grove businesses
are being promoted.
Attended MN Real Estate Attended the MN Real Estate Journal’s Apartment Summit.
Journal Seminar, January 5, Over 500 brokers and developers were in attendance.
2018 Discussion was on current trends in multi-family
development.
Ribbon Cutting, January 9, Rose Bud Early Learning Center at 6875 Jamaica Avenue
2018 held a ribbon cutting for their grand opening.
Conference January 18-19, Matt and I attended the Economic Development Association
2018 of Minnesota’s Winter conference. Topics included
Media Training, January 30, Matt and I attended half-day workshop on media training
2018 provide by the City.
Meeting with Ambassador Matt is a member of the Ambassador Committee and
Committee, February 1, 2018 attends the meetings to ensure Cottage Grove businesses
are being promoted.
Conference Attendance, Attended the Ehlers Public Finance Conference and listened
February 1-2, 2018 to sessions on market trends for retail and restaurants,
successful EDA Strategies, as well as workforce housing
financing.
Meeting with Century Link, Met with Century Link to discuss the results of our internet
February 8, 2018 survey as well as determine if they are planning to expand
their presence in Cottage Grove.
TO:
Economic Development Authority
FROM:
Christine Costello, Economic Development Director
DATE:
February 5, 2018
RE:
Authorize the purchase of 6541 85th Street South to Twin Cities Habitat for Humanity
Background
In 2011 the City of Cottage Grove closed the municipal pool located at 6541 85th Street South
due to a decrease in attendance and increase in operation expenses. The municipal pool was
demolished, backfilled, and seeded while discussions took place on the future of the site. An All
Commissions Meeting was held in January 2014, in which various reuses of the site were consid-
ered but none of the options came to fruition.
Aerial Site Plan
Economic Development Authority
Purchase Agreement for 6541 85th Street
February 5, 2018
Page 2 of 3
In 2017, discussions on the future of the former municipal pool site were discussed by the City
Council. Council considered three potential options for the future of the site, which included selling
the parcel to a developer who would demolish and subdivide the parcel, continuation of using the
building for storage, or convert the parcel to public space. The municipal pool building has asbes-
tos and the environmental remediation is more costly than the value of the building. There is also
not a need to convert the parcel into a public space due to the proximity of Granada and Belden
Parks and the Pine Hill Elementary playground to the site. The direction recommended by the
City Council was to pursue redevelopment for residential purposes.
The site is zoned R-3, Single-Family Residential. Twin Cities Habitat for Humanities (TCHFH)
has proposed an opportunity for affordable workforce single-family homes for families in Cottage
Grove. TCHFH is proposing to construct three single-family homes. The homes are proposed to
be one-story, four-bedroom. Two of the homes will have detached two-car garages and the third
home will be designed to be accessible with an attached two-car garage. The design of the homes
will be in keeping with the architecture standards of the neighborhood but the City’s Zoning
Ordinance.
Proposed Site Plan – Three single-family residential lots
On January 3rd the City Council held a public hearing to convey the property to the EDA. The
City Council cannot conduct economic development activities because they are charged with
conducting public purpose for the community (public health, safety, welfare, security, etc.);
Economic Development Authority
Purchase Agreement for 6541 85th Street
February 5, 2018
Page 3 of 3
therefore, the property was conveyed to the development entity of the City, the EDA. The
conveyance was approved with a vote of 5 to 0. TCHFH held a neighborhood meeting on January
25th for their proposed project. They sent notice of the neighborhood meeting to residents within
the surrounding 500 feet of the property; that consisted of 85 residential addresses. Three
residents attended the neighborhood meeting to ask questions and inquire about TCHFH’s
project.
Discussion
TCHFH and the EDA have completed negotiation for the contract for residential development
(Contract). Due to meeting timelines the Contract will be contingent upon approvals from the
Planning Commission on February 26th for the plat and amendment to the comprehensive plan.
The site is guided for parks and open space; it will need to be re-guided for low density residential.
The land use designation change will be in keeping with the area because the surrounding
properties are guided as low density residential.
As part of the Contract the EDA will remove and undertake the environmental remediation and
demolition of the pool building that remains on the site. The EDA will also subdivide the property
into three residential lots and perform any soil borings if it is warranted. For TCHFH, their
responsibilities as part of the Contract include depositing earnest money with the EDA for the
project (which has been completed) and they will build three single-family homes that will meet
the requirements of the City’s zoning ordinance and State Building Code.
Then on February 26th, TCHFH will go before the Planning Commission for the preliminary and
final plat (the EDA will be the applicant) and for an amendment to the comprehensive plan.
Followed by City Council’s action on March 21st.
Recommendation
By motion approve the contract for residential development for 6541 85th Street South Twin Cities
Habitat for Humanity contingent upon approval from the Planning Commission and City Council
for the plat and amendment to the Comprehensive Plan.
TO:
Economic Development Authority
FROM:
Christine Costello, Economic Development Director
DATE:
February 5, 2018
RE:
Certificate of Completion for Legends of Cottage Grove
Background
In 2016 the Cottage Grove City Council approved the development and construction of a 184-unit
affordable senior rental apartments by Dominium Development (Dominium), called Legends of
Cottage Grove. The apartment building includes four residential floors comprising of 73 one-
bedroom units, 79 two-bedroom units, and 32 three-bedroom units. An underground parking level
in the basement level has 132 parking spaces.
Per the approved Contract for Private Development (Contract) between the developer, Dominium
and the EDA a certificate of completion is to be furnished to the developer once the minimum
improvements have been completed. Per the Contract the minimum improvements are defined
as, “the construction of affordable senior independent living rental housing complex containing up
to 184 rental housing units”.
Discussion
The certification by the EDA will demonstrate that the Developer has satisfied all obligations
related to the construction of the minimum improvements in the Contract. A letter from Bob
LaBrosse, the City Building Official states that the developer has completed construction of the
building and that a certificate of occupancy was issued on December 15, 2017 (see attached
letter).
Economic Development Authority
Purchase Agreement for 6541 85th Street
February 5, 2018
Page 2 of 2
Recommendation
By motion approve that the developer, Dominium has completed the minimum improvements in
accordance with the Contract by executing the certificate of completion form.
Attachment: Letter dated February 1, 2018 from Bob LaBrosse, City Building Official
Exhibit D to the Development Agreement – Form of Certificate of Completion
FORM OF
CERTIFICATE OF COMPLETION
WHEREAS, the Cottage GroveEconomicDevelopment Authority, a public body
corporate and politic under the laws of Minnesota (the “EDA”), and Cottage Grove Leased
Housing Associates I, LLLP, a Minnesota limited liability limited partnership (the “Developer”),
have entered into a certain Contract for Private Development(the “Agreement”) dated the ____
day of ____________, 2016, and recorded in the office of the _______________in Washington
County, Minnesota, on the ____ day of ________________, 20___ as Document No. __________,
which Agreement contained certain covenants and restrictions regarding completion of the
Minimum Improvements, as defined in the Agreement; and
WHEREAS, the Developer has performed said covenants and conditions in a manner
deemed sufficient by the EDAto permit the execution and recording of this certification.
NOW, THEREFORE, this is to certify that all construction of the Minimum Improvements
specified to be done and made by the Developer has been completed and the covenants and
conditions in the Agreement have been performed by the Developer, and the
______________________in WashingtonCounty, Minnesota, is hereby authorized to accept for
recording and to record the filing of this instrument, to be a conclusive determination of the
satisfactory termination of the covenants and conditions relating to completion of the Minimum
Improvements.
COTTAGE GROVE ECONOMIC
Dated: _______________.
DEVELOPMENT AUTHORITY
By:
Myron Bailey, President
By:
Charlene R. Stevens, Executive Director
STATE OF MINNESOTA)
) ss.
COUNTY OF ________)
The foregoing instrument as acknowledged before me this _____ day of _________,
201__, by Myron Bailey and Charlene R. Stevens, the president and executive director,
respectively,of the Cottage GroveEconomic Development Authority, a public body corporate and
politic under the laws of Minnesota, on behalf of the Economic Development Authority.
____________________________________
Notary Public
TO:
Economic Development Authority
FROM:
Matt Wolf, Economic Development Specialist
DATE:
February 13, 2018
RE:
Modern Automotive Performance
Background
In the spring of 2017 Modern Automotive Performance, presented at an entrepreneurial
conference that they were looking to expand operations due to the continual growth of the
company. Modern Automotive Performance were searching throughout the Midwest for a list of
interested communities and their associated options (land/facility, incentives, why their company
would be a good fit). Modern Automotive Performance is an automotive aftermarket distributer,
which is the manufacturing, remanufacturing, distribution, retail and installation of all vehicle
parts, equipment and accessories after the vehicle is sold through the dealership. Modern
Automotive Performance is currently located at 9800 Hemingway Avenue in a 20,000 square
foot building and has 45 employees. In June 2017, the City of Cottage Grove, GreaterMSP and
the Department of Employment of Economic Development (DEED) met with Modern
Automotive, to determine what they were looking for in a new site. Modern Automotive
Performance were looking to expand by 25,000 square feet (SF) with the addition containing 2
loading dock doors and 2 overhead doors. Modern Automotive Performance as part of the
expansion were going to add 20+ jobs. Modern Automotive Performance were transparent that
they were considering sites that could help them lower costs through business subsides during
the construction process and a site that made geographical sense to ship their products around
the US.
In August 2017 the City of Cottage Grove made three proposals to Modern Automotive to
remain in Cottage Grove:
1. Consider buying or leasing the building to the south of their current property (9850
Hemingway Avenue S.), which is currently up for sale/lease for business growth
needs.
2. Expand on their current lot using the approved site plan from 2006 that included a
second building (25,000 SF) to the west of the current building.
3.
Park.
Modern Automotive Performance decided that since they qualified for the Job Creation Fund
(JCF) through DEED and the potential for tax increment financing through the City of Cottage
expanding at their current location was the best option.
Economic Development Authority
December 13, 2016
Page 2 of 6
Proposed Site Plan/Purchase of Land
In 2006 the current 24,000 SF building
was built by Kappa Industries at 9800
Hemingway Avenue and the City of
Cottage Grove Planning Commission
approved the site for a second
building to be built at a later date (see
Figure 1). Due to the nature of their
business operations Modern
Automotive Performance required the
expansion to be attached to their
existing building. Originally Modern
Automotive Performance was going to
fit the expansion on their current
parcel located at 9800 Hemingway
Avenue. However, no layout that
e a variance or impact to
the sites parking plan, or require
semi-trucks driving through employee
parking to get to the loading docks
could be designed.
In order to get a site that allowed for
the loading docks to be on the north
side of the building, separated from
employee parking on the south side of
the building. Modern Automotive
Performance has requested to
purchase 50 foot wide parcel of land
Figure 1 Original site plan approved in 2006
on the north side of their site located
at 9700 Hemingway Avenue. The parcel at 9700 Hemingway Avenue is 3.5 acres and is
currently owned by the City of Cottage Grove (see Figure 2).
The purchase of the 50 foot wide parcel of land to the north would leave the City of Cottage
Grove owned parcel of 9700 Hemingway Avenue a remaining 3.03 acres for development,
which would allow for a building up to 59,394 SF to be developed according to our I-2 zoning
code at maximum building coverage. The proposed expansion is for a 24,080 SF addition to the
existing building that will contain two (2) loading dock doors and one (1) drive in door, which all
face to the north. As part of the site plan approval process, the City of Cottage Grove is
requesting that a berm be constructed on the west side along the exposed parking and drive
lane aisles of the lot and trees be planted on the berm for noise remediation. The site plan
requires a hearing process to the Cottage Grove Planning Commission. The site plan will be
submitted at the end of February for the March meeting for formal site approval.
Letter of Intent
Modern Automotive Performance filed a
Letter of Intent to purchase the 50 foot
wide strip of land to the north of their
current building at 9800 Hemingway
Avenue with $500 earnest money (see
figure 3). With no improvements added
the rate of $1.75/SF was agreed for
purchase of the land. The overall
square feet of the land will be 21,104 or
.484 acres. Resulting in the overall price
of $36,932. The Letter of Intent has a
closing date no later than May 31, 2018.
Business Subsidy Policy
For the City of Cottage Grove to
consider providing a subsidy for a
business to either expand or locate in
Cottage Grove the business has to meet
certain objectives through our Business
Subsidy Policy that was approved by the
EDA in June 2017. Based on the
Subsidy Policy, Modern Automotive
Performance meets the following:
1. Expand and diversify the local
economy and tax base.
2. Increase the number and
diversity of quality jobs and/or
retain local jobs at high wages.
3. Project provides a high ratio of
private investment to City public
investment.
4. Significantly increase the amount
Figure 3 Proposed land to be purchased by Modern Automotive
Performance
of property taxes paid after
redevelopment.
5. -identified redevelopment area: Business
Park
6. Attracts or retains a significant employer within the City
7. Provides opportunities for small businesses (under 50 employees)
8. Creation of jobs at 200% of the State Minimum Wage
As a result the City of Cottage Grove determined the project would qualify for tax increment
financing through our Business Subsidy Po
Ehlers, Inc.
Economic Development Authority
December 13, 2016
Page 5 of 6
Job Creation Fund
The Minnesota Department of Employment and Economic Development has a program called the
Job Creation Fund that offers financial incentives for businesses in manufacturing, warehouse
and distribution that expand through the creation of new jobs and capital investment. To qualify
a business must create at least 10 new full time permanent jobs that pay at least $13.01 in wages
and benefits within two years of becoming a Job Creation Fund business. The business must
also invest at least $500,000 in real property improvements within one year of becoming a
designated Job Creation Fund business.
The Modern Automotive Performance project has real property improvements totaling
$1,486,649. Meeting the criteria for a minimum of $500,000 real property improvements. The
Modern Automotive Expansion will also create a total of 13 new jobs over the first two years after
the project is complete, with another 8 jobs to be created in year 3 after project completion. (see
Figure 4)
Number of Number of Number of
Hourly Cash Wage Hourly Value of Total Hourly Cash
Position TitlePositions Positions Positions
Rate w/o BenefitsBenefitsWage w/Benefits
(Year 1)(Year 2)(Year 3)
Fabricator122$15.75$2.84$18.59
Digital Marketing100$24.00$4.32$28.32
Engine Machinist 100$17.00$3.06$20.06
Customer Loyalty022$16.00$2.88$18.88
CNC Machinist001$18.00$3.24$21.24
Videographer100$16.00$2.88$18.88
Logistics Specialist121$11.00$1.98$12.98
Fulfillment Specialist010$16.00$2.88$18.88
Marketplace Support001$16.00$2.88$18.88
Accounts Payable001$16.00$2.88$18.88
Administrative Assistant100$14.00$2.52$16.52
Total/Average678$16.34$2.94$19.28
Job Titles and Wages to be created in the first 3 years of project completion
Figure 4
As part of the Job Creation Fund application process Modern Automotive Performance must get
a formal resolution of support from the City of Cottage Grove. The resolution of support will be
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brought before the EDA for support at their February 13 meeting before an additional
resolution will be brought before the City Council in March.
Tax Increment Financing
As part of their expansion Modern Automotive Performance is applying for business assistance
in the form of tax increment financing. Their application for assistance will be reviewed by our
ifications. If the project
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qualifies it will be considered at the March 13 EDA meeting.
Attachments
1. Letter of Intent
2. Resolution of support for the Job Creation Fund
3. Business Subsidy Policy
Economic Development Authority
December 13, 2016
Page 6 of 6
Recommendation
Consideration of a motion to:
1. Authorize the EDA Executive Director to execute the Letter of Intent (LOI) with Modern
of EDA owned land for total of 21,104 square
feet along the southern boundary of 9700 Hemingway Avenue.
2. Recommend approval of a resolution to support Modern Automotive Performance in their
application to the Department of Employment and Economic Development Job Creation Fund.
CITY OF COTTAGE GROVE, MINNESOTA
EDA RESOLUTION NO. 00-001
RESOLUTION BY THE ECONOMIC DEVELOPMENT AUTHORITY REGARDING SUPPORT OF A JOB CREATION
FUND APPLICATION IN CONNECTION WITH MODERN AUTOMOTIVE PERFORMANCE
WHEREAS, the City of Cottage Grove, ires to assist Modern Automotive
Performance, an auto parts distribution company, which is proposing to construct a facility in the City; and,
WHEREAS, the City of Cottage Grove understands that Modern Automotive Performance, through and with
the support of the City, intends to submit to the Minnesota Department of Employment and Economic
Development an application for an award and/or rebate from the Job Creation Fund Program; and,
WHEREAS, the City of Cottage Grove Economic Development Authority held a meeting on February 13, 2018,
to consider this matter.
NOW, THEREFORE, BE IT RESOLVED that, after due consideration, the EDA President and EDA Executive
Director of the City of Cottage Grove, Minnesota, hereby express their approval of the project proposed by
Modern Automotive Performance and its application for an award and/or rebate from the Job Creation Fund
Program.
Sworn and Executed Under My Hand this 13th day of February, 2018.
________________________________________
Myron Bailey, President
Economic Development Authority
________________________________________
Charlene Stevens, Executive Director
Economic Development Authority
ATTEST:
________________________________________
Joseph Fischbach, City Clerk
City of Cottage Grove and
Cottage Grove Economic Development Authority
Public Financing Criteria and Business Subsidy Policy
June 2017
INTRODUCTION:
This Policy is adopted for purposes of the business subsidies act, which is Minnesota Statutes, Sections
116J.993 through 116J.995 . Terms used in this Policy are intended to have the same
meanings as used in Statutes. Subdivision 3 of the Statutes specifies forms of financial assistance that
are not considered a business subsidy. This list contains exceptions for several activities, including
redevelopment, pollution clean-up, and housing, among others. By providing a business subsidy, the
City commits to holding a public hearing, as applicable, and reporting annually to the Department of
Employment and Economic Development (DEED) on job and wage goal progress.
1.PURPOSE AND AUTHORITY
A.The purpose of this document is to establish criteria for the City and the Economic
for granting of business subsidies and public financing
for private development within the City.
understood to include the EDA. These criteria shall be used as a guide in processing and
reviewing applications requesting business subsidies and/or City public financing.
B.The City's ability to grant business subsidies is governed by the limitations established in
the Statutes. The City may choose to apply its Business Subsidy Criteria to other
development activities not covered under the statute. City public financing may or may
not be considered a business subsidy as defined by the Statutes.
C.Unless specifically excluded by the Statutes, business subsidies include grants by state or
local government agencies, contributions of personal property, real property,
infrastructure, the principal amount of a loan at rates below those commercially available
to the recipient of the subsidy, any reduction or deferral of any tax or any fee, tax
increment financing (TIF), abatement of property taxes, loans made from City funds, any
guarantee of any payment under any loan, lease, or other obligation, or any preferential
use of government facilities given to a business.
D.The criteria in this Policy are to be used in conjunction with other relevant policies of the
City. Compliance with this Public Finance Criteria and Business Subsidy Policy shall
not automatically mean compliance with such separate policies.
Cottage Grove Public Financing Criteria and Business Subsidy Policy Page 1
E.The City may deviate from the job and wage goals criteria outlined in Section 5 D and E
below by documenting in writing the reason(s) for the deviation. The documentation
shall be submitted to the DEED with the next annual report.
F.The City may amend this document at any time. Amendments to these criteria are subject
to public hearing requirements contained in the Statutes.
2. C OBJECTIVE FOR THE USE OF PUBLIC FINANCING
A.As a matter of adopted policy, the City may consider using public financing which may
include tax increment financing (TIF), property tax abatement, bonds, and other forms of
public financing as appropriate, to assist private development projects. Such assistance
must comply with all applicable statutory requirements and accomplish one or more of
the following objectives:
1.Remove blight and/or encourage redevelopment in designated
redevelopment/development area(s) per the goals and visions established by the City
Council and EDA.
2.Expand and diversify the local economy and tax base.
3.Encourage additional unsubsidized private development in the area, either directly or
-
4.Offset increased costs for redevelopment over and above the costs that a developer
would incur in normal urban and suburban development (determined as part of the
But-For analysis).
5.Facilitate the development process and promote development on sites that could not
be developed without public financing assistance.
6.Increase the number and diversity of quality jobs and/or retain local jobs at high wages
7.Provide the highest and best desired use for the property
8.Improve or add public infrastructure such as roads, utility extensions, storm water
ponding, etc.
9.
3. PUBLIC FINANCING PRINCIPLES
A.The guidelines and principles set forth in this Policy pertain to all applications for City
public financing regardless of whether they are considered a Business Subsidy as defined
by the Statutes. The following general assumptions of development/redevelopment shall
serve as City public financing guidelines:
1.All viable requests for City public financing assistance shall be reviewed by staff, and
a third party municipal advisor who will inform the City of its findings and
recommendations.
establish that the project would not be feasible but for the City financing assistance.
Cottage Grove Public Financing Criteria and Business Subsidy Policy Page 2
2.The City shall establish mechanisms within a development agreement to ensure that
adequate checks and balances are incorporated in the distribution of financial
assistance where feasible and appropriate, including but not limited to, establishment
of a and other performance criteria deemed necessary by the
City.
3.TIF and property tax abatement will be provided on a pay-as-you-go-basis. Any
request for upfront assistance will be evaluated on its own merits and may require
security to cover any risks assumed by the City.
4.The City will set up TIF districts in accordance with the maximum number of
statutory years allowable. However, this does not mean that the developer will be
granted assistance for the full term of the district.
5.The City will elect the fiscal disparities contribution to come from inside applicable
TIF district(s) to eliminate any impact to the existing tax payers of the community.
6.Public financing will not be used to support speculative commercial, office or housing
projects. In general the developer should be able to provide market data, tenant letters
of commitment or finance statements that support the market potential/demand for
the proposed project.
7.Public financing will not be used in projects that would give a significant competitive
financial advantage over similar projects in the area due to the use of public financing
assistance. Developers shall provide information to support that assistance will not
create such a competitive advantage. Priority consideration will be given to projects
that fill an unmet market need as determined by the City.
8.Public financing will not be used in a project that involves a land and/or property
acquisition price in excess of fair market value.
9.Public financing will not be used for single-family residential developments or stand-
alone corporate-owned fast food restaurants. In addition, public financing will not be
used for big-box retail that is not part of a redevelopment project or special purpose
project of the City.
10.The developer will pay all applicable application fees and pay for fiscal and
legal advisor time .
11.The City will consider waiving fees on a case-by-case basis including, but not limited
to, park dedication fees, water and/or sewer/storm sewer connection or area charges.
The City may consider using SAC credits, to the extent they are available, to off-set
12.The developer shall proactively attempt to minimize the amount of public assistance
needed through the pursuit of grants, innovative solutions in structuring the deal, and
other funding mechanisms.
13.All developments are subject to execution and recording of a Minimum Assessment
Agreement and Development Agreement.
Cottage Grove Public Financing Criteria and Business Subsidy Policy Page 3
4.PROJECTS WHICH MAY QUALIFY FOR PUBLIC FINANCING ASSISTANCE
A. All new applications for public assistance considered by the City must meet all the
minimum qualifications in Section 4.1, 4.2 A and B, and as many of the desired
not
qualifications in Section 4.2 C as feasible. However, it should be presumed that a
project meeting these qualifications will automatically be approved for assistance.
Meeting the qualifications does not imply or create contractual rights on the part of any
potential developer to have its project approved for assistance.
4.1 MINIMUM QUALIFICATIONS/REQUIREMENTS:
two
A. In addition to meeting the applicable requirements of State law, the project shall meet
or more
of the public financing objectives outlined in Section 2.
B. The developer must demonstrate to the satisfaction of the City that the project is not
or other public financing.
C.
Ordinances, Design Guidelines and any other applicable land use documents or City
requirements.
D. Prior to approval of a financing plan, the developer shall provide all requested market and
financial feasibility studies, appraisals, soil boring, private lender commitment, and/or
other information the City or its financial consultants may require in order to proceed
with an independent evaluation of the application for public financing.
E. The developer must provide adequate financial guarantees to ensure the repayment of any
public financing and completion of the project. These may include, but are not limited
to, assessment agreements, letters of credit, personal deficiency guarantees, guaranteed
maximum cost contract, etc.
F.Any developer requesting assistance must be able to demonstrate past successful general
development capability as well as specific capability in the type and size of development
proposed. Public financing
judgment of the City, are inadequate
may include, but is not limited to, performance on past projects, general reputation,
project references, bankruptcy and other criteria considered relevant to the City.
G.The developer, or its contractual assigns, shall retain ownership of any portion of the
project long enough to complete the project, stabilize its occupancy, and establish project
management and/or needed mechanisms to ensure successful operation.
4.2 DESIRED QUALIFICATIONS:
A.Projects providing a high ratio of private investment to City public investment will
receive priority consideration. Private investment includes developer cash, government
and bank loans, conduit bonds, tax credit equity, and land if already owned by the
developer.
Cottage Grove Public Financing Criteria and Business Subsidy Policy Page 4
B.Proposals that significantly increase the amount of property taxes paid after
redevelopment will receive priority consideration.
C.Proposals that encourage the following will receive priority consideration:
1.Implements t-identified redevelopment areas
in order of priority;
a.Business Park
b.Gateway North District
c.Cottage View District
d.Langdon Village Area (along portion of West Point Douglas Road) including
the Majestic Ballroom
2.Provides opportunities for corporate campus or medical office development
3.Provides opportunity for hi-tech, med-tech, R & D facilities/office or major
manufacturer
4.Provides for development of limited or full-service hotels
5.Provides opportunities for entertainment venues such as movie theater, family fun
center or larger attraction unique to the City
6.Promotes multi-family housing investment that meets the following City goals:
a.Provides housing options not currently available
b.Provides affordable and/or workforce housing that include amenities similar
to those found in market rate housing
c.Provides market-rate housing with high-end finishes and amenity package
7.Redevelops a blighted, contaminated and/or challenged site
8.Attracts or retains a significant employer within the City
9.Provides significant rehabilitation or expansion and/or replacement of existing
office, manufacturing or commercial facility
10.Provides façade improvements (including building facades, signage, landscaping
and parking lots) for commercial/industrial developments
11.Adds needed road, access, multi-modal improvements and or public infrastructure
12.Provides opportunities for small businesses (under 50 employees)
13.Provides significant improvement to surrounding land uses, the neighborhood,
and/or the City
5.BUSINESS SUBSIDY CRITERIA: PUBLIC PURPOSE, JOBS AND WAGE
REQUIREMENT
A.All business subsidies must meet a public purpose with measurable benefit to the City as
a whole.
B.Job retention may only be used as a public purpose in cases where job loss is specific and
Cottage Grove Public Financing Criteria and Business Subsidy Policy Page 5
demonstrable. The City shall document the information used to determine the nature of
the job loss.
C.The creation of tax base shall not be the sole public purpose of a subsidy.
D.Unless the creation of jobs is removed from a particular project pursuant to the
requirements of the Statutes, the creation of jobs is a public purpose for granting a
one (1)minimum
subsidy. Creation of at least new full time employee (FTE) is a
requirementnot
for consideration of assistance and, it should be presumed that a project
meeting this minimum requirement will automatically be approved for assistance. The
City may require more jobs be created in order for a developer to receive public
assistance.
hours, and be eligible for benefits.
200%
E.The wage floor for wages to be paid for the jobs created shall be not less than of
the State of MN Minimum Wage. The City will seek to create jobs with higher wages as
appropriate for the overall public purpose of the subsidy. Wage goals may also be set to
enhance existing jobs through increased wages, which increase must result in wages
higher than the minimum under this Section.
F.After a public hearing, if the creation or retention of jobs is determined not to be a goal,
the wage and job goals may be set at zero.
6.SUBSIDY AGREEMENT
A.In granting a business subsidy, the City shall enter into a subsidy agreement with the
recipient that provides the following information: wage and job goals (if applicable),
commitments to provide necessary reporting data, and recourse for failure to meet goals
required by the Statutes.
B.The subsidy agreement may be incorporated into a broader development agreement for a
project.
C.The subsidy agreement will commit the recipient to providing the reporting information
required by the Statutes.
7. PUBLIC FINANCING PROJECT EVALUATION PROCESS
A.The following methods of analysis for all public financing proposals will be used:
1.Consideration of project meeting minimum qualifications
2.Consideration of project meeting desired qualifications
3.-/or statutory qualifications
4.
Please note that the evaluation methodology is intended to provide a balanced review. Each
area will be evaluated individually and collectively and in no case should one area outweigh
another in terms of importance to determining the level of assistance.
Cottage Grove Public Financing Criteria and Business Subsidy Policy Page 6
TO:
Economic Development Authority
FROM:
Matt Wolf, Economic Development Specialist
DATE:
February 13, 2018
RE:
Community Internet Survey
Background
In the spring of 2017 the City of Cottage Grove undertook a Business Retention and Expansion
Program. The program found from interviewing area businesses that broadband speed and
reliability were crucial to their success and found gaps in broadband service in the Business Park.
As a result from those findings it was decided to survey the community’s residents and businesses
to determine if other areas exist similar to our Business Park.
Discussion
The survey was conducted on-line for two months through surveymonkey.com and posted via the
City of Cottage Grove’s website, Facebook page, through a promotional YouTube video and in
the City’s monthly newsletter. There were 18 questions in the survey asking individuals questions
regarding their place of residence, speed, reliability and overall experience with their internet.
The survey was completed by 95 residents and found that much like our businesses, residents
are relying more and more on their internet for working from home, social networking,
entertainment, student access and operating a home business. The survey indicated that
respondents are concerned about overall speed, better reliability, rising prices and a desire for
more competition.
Speed, reliability and prices are all set by the internet service providers. However an increase in
options or competition can help offset some of those issues. The complete report (attached) offers
some ideas for helping increase competition in the City.
To: EDA
From: Christine Costello, Economic Development Director
Date: February 6, 2018
Subject: Upcoming Events