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Home My WebLink About4.1 Economic Development Update/Business Inquiry Business/ Inquiry To: Honorable Mayor Bailey and EDA Members From: Christine Costello, Economic Development Director Matt Wolf, Economic Development Coordinator Date: August 8, 2020 Activites that have taken place in the community that may have a potential impact on economic development activity: Discussion Staff Action Tuesday, June 9, 2020 Economic Development Coordinator Wolf met with Drew Renewal by Andersen MIF Lindefor of the Minnesota Department of Employment and Meeting Economic Development to discuss the Minnesota Investment Fund for the Renewal by Andersen project. Wednesday, June 10, 2020 Economic Development Director Costello and Economic EDA and Visitors Bureau Development Coordinator met to discuss the Economic Budget Discussion Development Budget for 2021. Thursday, June 11, 2020 Economic Development Director Costello attended the State State of Minnesota Business of Minnesota virtual meeting on the current state of Update on COVID19 businesses regarding the COVID-19 pandemic. Friday, June 12, 2020 Public Works Director/City Engineer Burfeind, Economic Compost Site Meeting Development Director Costello, and Economic Development Coordinator Wolf met to discuss the Compost Site in the Cottage Grove Business Park and options for different locations for the site in Cottage Grove. Tuesday, June 16, 2020 Assistant City Engineer Meyers, Streets Superintendent Jamaica Plaza Discussion Orloff, and Economic Development Coordinator Wolf met at Jamaica Square to discuss the Façade Improvement Program as it relates to the parking lot improvements. Wednesday, June 17, 2020 Economic Development Director Costello met with South Washington County Washington County to the South Washington County Arterial Arterial Study & Mississippi Study as it relates to the Mississippi Dunes Property. Dunes Property Thursday, June 18, 2020 Economic Development Director Costello attended the State State of Minnesota Business of Minnesota virtual meeting on the current state of Update on COVID19 businesses regarding the COVID-19 pandemic. Thursday, June 18, 2020 Economic Development Director Costello met with Small Business Emergency Cedarhurst, Salon 80 and Cottage Grove Florist to have their Grant Applications Small Business Emergency Assistance Grants signed. Friday, June 19, 2020 Cottage Grove Economic Development Staff attended the Washington County Economic Development Work Group Zoom Meeting to Economic Development discuss updates as the relate to the current situation with Workgroup COVID-19. Development Inquiry Update August 6, 2020 Page 2 Thursday, June 25, 2020 Economic Development Director Costello attended the State State of Minnesota Business of Minnesota virtual meeting on the current state of Update on COVID19 businesses in regard to the COVID-19 pandemic. Tuesday, June 30, Special The Economic Development Authority met for a special EDA Meeting meeting to discuss the third round of the Small Business Emergency Assistance Grant Program. Thursday, July 2, 2020 State Economic Development Director Costello attended the State of Minnesota Business of Minnesota virtual meeting on the current state of Update on COVID19 businesses in regard to the COVID-19 pandemic. Thursday, July 2 Cottage Communication Manager Seroka, Economic Development Grove Website Presentation Coordinator Wolf, and Management Assistant Hetland met with CivicPlus with CivicPlus to discuss a new website for the City of Cottage Grove. Wednesday, July 15, In A Economic Development Coordinator Wolf filmed the July Snap Taping with SWCTC edition of In A Snap with SWCTC. Wednesday, July 15, CARES Economic Development Director Costello attended the Act Funding Webinar CARES Act webinar that was hosted by Metro Cities. Thursday, July 16, 2020 Economic Development Director Costello attended the State State of Minnesota Business of Minnesota virtual meeting on the current state of Update on COVID19 businesses regarding the COVID-19 pandemic. Tuesday, July 21, 2020 Staff met to discuss planning for the Business Appreciation Bocce and Beer Event Event regarding Bocce and Beer. Due to COVID-19 and Meeting event restrictions this year the event is cancelled with hopes to reschedule for 2021. Thursday, July 23, 2020 Economic Development Director Costello attended the State State of Minnesota Business of Minnesota virtual meeting on the current state of Update on COVID19 businesses regarding the COVID-19 pandemic. Friday, July 24, 2020 Meeting Economic Development Director Costello and Assistant City with CPR Properties Engineer Meyers met with CPR Properties to discuss multi- family development opportunities in the City of Cottage Grove. Tuesday, July 28, 2020 The City of Cottage Grove held a ribbon cutting for Grove th Grove Nutrition Ribbon Nutrition at 6990 80 Street. Cutting Wednesday, July 29, 2020 Public Works Director/City Engineer Burfeind, Economic Compost Site Discussion with Development Director Costello and Economic Development Washington County Coordinator Wolf met with Washington County officials to discuss opportunities to move the compost if a new industrial developer wanted the current compost site in Cottage Grove. Thursday, July 30, 2020 Economic Development Director Costello attended the State State of Minnesota Business of Minnesota virtual meeting on the current state of Update on COVID19 businesses regarding the COVID-19 pandemic. Tuesday, August 4, 2020 The City of Cottage Grove celebrated the upcoming market Grove80 Groundbreaking rate multi-family develop called Grove80 Apartments with a Event groundbreaking event. Tuesday, August 4, 2020 Mayor Bailey and Economic Development Director Costello Renewal by Andersen attended the ribbon cutting event for the expansion of Ribbon Cutting Event Renewal by Andersen. TO: Economic Development Authority FROM: Christine Costello, Economic Development Director DATE: August 6, 2020 RE: Development Update Building Permits Building Permit Statistics: Between July 1 and July 31, 2020, there were 451 building permits issued with a total valuation of $11,373,111, including 16 new single-family homes valued at $4,578,111 and 4 townhomes valued at $1,124,857. Commercial Permit Valuation Comparison By Month 2019-2020 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 - JanFebMarAprMayJunJulAugSepOctNovDec 2020 Valuation2019 Valuation Economic Development Authority Development Update August 6, 2020 Page 2 of 5 Commercial/Industrial Construction Activity 120000000 100000000 80000000 60000000 40000000 20000000 0 yearvaluation Residential Permits -New Construction 1996 to 2020 350 300 250 200 150 100 50 0 1995200020052010201520202025 Economic Development Authority Development Update August 6, 2020 Page 3 of 5 Current Project Updates Building Construction Projects Grove80 Apartments: The building permit for the construction of site grading, utilities, footing foundation was secured by Anchobaypro, Inc. The construction value for phase one of this project is $2,500,000. Up North Plastics: The contractors are completing interior framing, sheetrock, rough-in plumbing, and rough-in heating. The exterior metal cladding and slab work are substantially complete. Extra Space Storage: The Certificate of Occupancy for the addition three new storage buildings was issued on August 4, 2020. Economic Development Authority Development Update August 6, 2020 Page 4 of 5 Ravine Park Building: The footings and foundation work is substantially complete. Well 7: This project is near completion with exterior site grading still to done. Air Gas: Phase ll of this project consists of the erection of the mechanical cold boxes and tanks being installed. The Phase ll permit has not been secured at this time; a site meeting is scheduled for August 5, 2020. Lindgren Dental: This 3,550-foot interior expansion project is near completion; they are continuing to work on the finishes of the space. Economic Development Authority Development Update August 6, 2020 Page 5 of 5 Planning Division Planning Commission Meeting August 24, 2020 There was only one application received for the August 24, 2020, Planning Commission Meeting, which is for a special use permit to allow a tent in the Hy-Vee parking lot every Thursday through Sunday from August 27 to October 31, 2020. &¤£¤± « 2¤²¤±µ¤ " ª ®¥ -¨¤ ¯®«¨² 4§¤ "¤¨¦¤ "®®ª *´«¸ ͻ͹ͻ͹ Summary of Economic Activity Ninth District economic activity was mixed since the previous report, with declines in most sectors, despite some im- provements due to emergency federal stimulus and gradual reopening of state economies in the District. Employment rose from very contracted levels, wage pressures were flat, and price pressures remained minimal. The District econo- my saw growth in consumer spending and tourism, but decline in services, construction and real estate, manufacturing, energy, and mining; agricultural conditions remained poor. Employment and Wages publicly with employees. Employment rose since the last report, but from very Wage pressures were flat overall since the last report. contracted levels, and labor markets remained volatile. Ad hoc polls by the Minneapolis Fed found that a Solid employment gains were seen in May, and a variety majority of employers have made no changes in wages of sources suggested a continuation in June. The lifting since the onset of the pandemic; slightly more reported of pandemic-related restrictions on many businesses wage decreases than those reporting increases. Faced allowed increased hiring and callbacks of laid-off workers with budget deficits, some local governments have in many sectors. Ad hoc polls in June by the Minneapolis reportedly instituted furloughs or negotiated wage cuts, Fed showed that slightly more firms were hiring than or both. However, some firms that have enjoyed strong those that were cutting staff. A staffing contact in North demand during the pandemic have increased wages. A Dakota said job orders have been Ð much better Ñ since discount retailer raised its starting wage from $13 to $15 hitting lows in April. Volatility remains in the labor market, an hour, and a second discount retailer gave its however. Announcements of temporary and permanent Minnesota employees a $5 million bonus for working mass layoffs rose notably in June in Minnesota and Wisconsin after slowing significantly in May. Initial months. A major health care provider in Minnesota also unemployment claims fell in June across the District ended furloughs and pay cuts to most workers after compared with April and May levels, but remained demand rebounded faster than anticipated. significantly elevated. Monthly job postings plummeted across the District in May, but there was some evidence Prices of stabilizing in June. Numerous sources noted that Price pressures remained minimal. The majority of seasonal hiring over the summer would remain well respondents to a recent poll of Ninth District firms in a below normal levels. A contact in the Bakken region of diverse mix of sectors reported no change in prices North Dakota reported that energy-related firms Ð would charged for their products and services in the second not try to save their employees Ñ as they had during the quarter of 2020 relative to a year earlier; of the downturn in oil prices five years ago, and that wide-scale remainder, more reported decreases in prices than layoffs had begun Ð and will continue at a fairly expedited increases. Contacts reported slightly more pressure on rate.Ñ A workforce contact in northern Minnesota said input prices. Manufacturing contacts generally reported that some businesses expected somewhat higher flat or decreased input prices, with the significant permanent layoffs than they were communicating exception of personal protective equipment, which I-1 &¤£¤± « 2¤²¤±µ¤ " ª ®¥ -¨¤ ¯®«¨² remained in tight supply. Retail fuel prices in District levels of new projects out for bid. Recent permit activity states have climbed appreciably since the previous showed signs of slowing, particularly in the city of report, though they remain below their prepandemic Minneapolis, though not everywhere. Numerous sources levels. Prices received by farmers in May were mixed. also said more firms were competing for available work. Residential construction fell modestly overall, due mostly Consumer Spending to a sizable drop in single-family permits in Minneapolis- Consumer spending improved since the last report, St. Paul; increases were seen in St. Cloud, Minn., boosted by recent federal stimulus and the reopening of Bismarck, N.D., and Rapid City, S.D. many businesses closed by the pandemic. But overall Commercial real estate fell moderately since the last levels remained depressed. Numerous sources reported report. Office space was under pressure given the that consumer-facing businesses (e.g., retail, slower economy and delayed return of remote workers to restaurants, and bars) were seeing increased traffic central business districts. Traditional retail space compared with May. But most were still well below remained under tremendous strain. A major retailer normal seasonal activity, and even below restricted closed six locations across the District. A Minnesota mall capacities. A Minnesota mall said it was seeing about reported that many tenants were still closed in late June. one-quarter of its normal shopper activity in June. Those that were open Ð are really struggling, nowhere Tourism contacts in Minnesota and Montana confirmed near break-even,Ñ and leases for virtually all tenants had that the majority of large events booked for the second been altered or renegotiated. Residential real estate was half of the year have been canceled; one contact called it down across the District, according to the most recent a Ð rolling cascade.Ñ June traffic across the Mackinac (May) sales data available at deadline. Most regions saw Bridge into Michigan Ó s Upper Peninsula was down 18 double-digit declines in closed home sales compared percent over a year earlier, an improvement over May with last year, with many reaching 20 to 30 percent. crossings, which plummeted by 37 percent. Motor vehicle sales were strong. A dealership with Manufacturing multiple locations in the western part of the District saw Manufacturing activity contracted slightly since the last sales growth of 15 percent or more in May and June. report. An index of manufacturing conditions indicated Sales of recreational vehicles were also healthy. Data on decreased activity in June compared with a month earlier motor vehicle sales taxes and title registrations showed in Minnesota; the index for North Dakota and South similar upticks in Minnesota and Wisconsin. Passenger Dakota rebounded to a slightly expansionary level. Some screenings in June at the eight largest District airports contacts reported strong demand in the plastics sector roughly doubled over the previous month, but remained and supporting industries due to the need for personal 75 percent below last year. Airport contacts said that protective equipment. However, numerous other leisure travel was returning faster than business travel. contacts reported a marked slowdown in new orders as customers remained in Ð wait-and-see Ñ mode. Ð Our order Services books have never had fewer future demand orders,Ñ Professional services firms reported decreased activity noted a custom manufacturer, who added that its since the last report. Contacts in advertising and existing demand was Ð nearly immediate.Ñ marketing reported that clients had curtailed spending as they sought to hold on to cash. Vendors providing Agriculture, Energy, and Natural Resources displays, food, or logistics services to support District agricultural conditions remained poor. Producers convention, exhibition, and entertainment events reported that disruptions in trade with China were continued to report a severe contraction in demand. creating Ð headwinds Ñ in grain markets. Recent declines Contacts in trucking and logistics reported steady in milk prices dealt a blow to already suffering dairy business overall, with variation depending on customer producers. In contrast, the majority of the District Ó s corn base. and soybean crops were in good or excellent condition as of late June. Oil and gas activity continued to decline Construction and Real Estate even as crude prices rebounded somewhat. The number Commercial construction was down moderately overall. of active drilling rigs in the District as of late June was The value of May construction starts across District down sharply again from the previous reporting period. states rose compared with April, but was notably down Multiple District iron ore production facilities remained from 2019. The number of active projects was also shuttered as demand for steel was low. trending modestly lower through the end of June. Minnesota construction contacts reported flat or falling I-2