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HomeMy WebLinkAbout4.2 Business Retention and Expansion MemoCottage Grove 4ere pride 806"Sperity Meet TO: Economic Development Authority FROM: Christine Costello, Economic Development Director Matt Wolf, Assistant to the City Administrator DATE: October 7, 2020 RE: Business Retention & Expansion Program 2020 Background Retaining and expanding businesses is a vital part of Economic Development and often is easier than recruiting new businesses due to their desire to stay or expand in the community. For the 2020 Business Retention and Expansion (BR&E) Program the City of Cottage Grove focused on businesses within the Cottage Grove Business Park. Beginning in March of 2020 staff sat down with 11 businesses to discuss the Cottage Grove business climate and determine how Cottage Grove could continue to serve its businesses moving forward. Towards the end of March after four interviews were complete the COVID-19 pandemic hit delaying many of the interviews. Further the COVID-19 pandemic also became a topic of many of the interviews from that point moving forward. Discussion History of BR&E Program The Cottage Grove Business Retention and Expansion Program began in 2017 with a mix of commercial and industrial businesses. The City of Cottage Grove partnered with the University of Minnesota Extension to implement its first BR&E program. That year 41 business interviews were completed with a 20 -member volunteer task force. There were five key priority projects and initiatives that came out of those interviews. Those initiatives are listed in the table below. Priority/Project Action Items Results Chamber (Marketing Lunch and Learn Events & Chamber of Commerce started Lunch & Community) Partnership in Promoting the Learn Events for members and City worked Community with Chamber to start the Cottage Grove I Visitors Bureau Workforce (Skilled Meet with School District, School District worked with area businesses Professionals) Technical Colleges and work to start the Inventor Space & Renewal by to make connections with Andersen continues a strong relationship businesses. Economic Development Authority Business Retention and Expansion Program 2020 10/26/2020 Broadband (Slow speeds or no high- speed options) Develop solutions with telecommunications companies Enforcement Develop informative videos (Improved regarding ordinances and communication with code requirements. Work to businesses) host lunch and learn events. Advise (Businesses in Continue the Business the Community) Retention and Expansion Program. Work to advise businesses of options to expand in the community. with the School District for training programs. Worked with Comcast to bring high-speed internet down 97th Street and completed the community internet survey. Completed informative videos on the community's sign ordinance and parking lot repair. Hosted a chamber lunch and learn and an informative meeting with area businesses titled Coffee, Code and Croissants. Staff has continued the Business Retention and Expansion Program in 2018 and 2020. Updated the City website to improve information on options available to expand in Cottage Grove. Major projects or programs that have been completed as a result of the 2017 BR&E program in 2017 include the starting of the Cottage Grove Convention and Visitors Bureau, South Washington School District starting the Inventor Space, Comcast running high-speed internet along 97th Street, and continuing the Business Retention & Expansion Program in 2018. In 2018, 12 businesses were interviewed as part of the BR&E program. The focus of the 2018 interviews were any commercial or industrial businesses that were new to the community and existing businesses that were not interviewed as part of the 2017 program. There were four projects and initiatives that came out of the interviews and are listed in the table below. Priority/Project Internet (High-speed Fiber) Housing (Market and Workforce) Action Items Meeting with telecommunications companies to discuss options. Market options in Cottage Grove to develop Workforce & Market Rate Apartments Results Set meeting with Century Link and Comcast to discuss options regarding internet for businesses in Cottage Grove. Created brochures on the Harkness Area to market to developers at events. Completed future planning and brochure on the Shoppes at Cottage View for high density housing. Economic Development Authority Business Retention and Expansion Program 2020 10/26/2020 Commercial Develop a program that can Beautification (Assist help commercial businesses Businesses) make improvements to their buildings Code Enforcement Continue to create information (Signs) that explains the City of Cottage Grove sign ordinance. Developed the Fagade Improvement Program that gives out $25,000 grants to qualifying businesses to make exterior improvements to their building. (Year to date four projects have been approved for a total of $100,000 in support.) Completed and distributed a brochure on the City of Cottage Grove sign ordinance to area businesses As a result of the 2018 program the City of Cottage Grove started the Fagade Improvement Program in 2019. This program has resulted in the approval of four projects for a total of $100,000 of support. Indirectly, the work on marketing the community to developers for high density housing also resulted in the current development of a 120 -unit apartment building called Grove80 Apartments at the site of the former City Hall. The 2020 BR&E Program began in March of 2020 with a focus on the Cottage Grove Business Park. In total 11 interviews were completed, and the interviews were conducted virtually since the COVID-19 pandemic began in March 2020 and impacted the way business was and continues to be conducted. 2020 Participating BR&E Businesses North Star Sheets Cottage Grove Auto & Collision Allina Health Leafline Labs Modern Automotive Performance Aveka Group 3M Renewal by Andersen Innovative Chemical Corporation Gardenworld Werner Electric The businesses interviewed had a total of 1,782 employees in the City with an average rate of pay of $18.50 per hour. When asked if businesses had seen increasing sales, 7 out of 11 of the businesses indicated their sales were increasing with the remaining four indicating their sales were stable. The businesses stated their reasons for increasing sales were due to ecommerce changes as a result of COVID-19, new marketing efforts, premium products, happy customers, and new facilities. Economic Development Authority Business Retention and Expansion Program 2020 10/26/2020 When businesses were asked if they planned to hire in 2020, 8 out of the 11 businesses stated they planned to increase their employee count in the next year or more. The remaining three businesses would be stable for employment. However, 7 out of the 11 businesses indicated that it was hard to find qualified employees due to a lack of candidates that had the technical skills to do the job. When asked if the City of Cottage Grove had enough housing for their employees, two businesses stated that the City of Cottage Grove needed more options. The other nine businesses felt there was enough housing for their employees. As part of the interviews the businesses were asked about their future investment plans. Specifically, whether they intended to make future investments in the next 1-3 years with 7 out of the 11 businesses indicating that they plan to make major equipment purchases or renovate/expand their current facilities within that time frame. Community Factors Survey Results Included in the BR&E survey is a series of community factors that the businesses were asked to rank on a scale of 1 to 5, with 1 being poor and 5 being great. The community factor survey is used to determine what a business knows about the community and if those community factors have an impact on their business. For some of these factors' businesses felt they did not have enough information to answer so they skipped the question. However, each community factor needed to have at least three businesses give an answer to be included. The top three factors included Economic Development Authority, Fire Department, and Planning and Zoning with a score of 4.8. The bottom three factors were Public Transportation at 2.3, Customized Training Programs at 3.3, and Cultural Opportunities at 3.3. A complete list of the community factors and their scores are below. Education and Training K-12 4.6 Higher education Customized Training Progra Overall Workforce Quality Transportation/Location Public Transportation Highway Infrastructure Air Service Proximity to Suppliers Quality of Life Recreational Opportunities Cultural Opportunities Crime Rate 4.0 Economic Development Authority Business Retention and Expansion Program 2020 10/26/2020 Social Organizations and Networks Housing Supply for Workforce Local Access to Capital Lending by local financial institutions Assistance from local governments and/or non -profits Local Business Support Community attitude toward business Chamber of Commerce Economic Development Authority Local Government Fire Department Police Department Planning and Zoning Code Enforcement Government and Regulations Attitude towards business Local Taxes Localfees Telecommunications/Broadband Service Telecommunications/Broadband Rates Electric Rates Electric Reliability 3.7 3.9 3.8 4.2 4.4 4.3 ' 4.8 4.8 4.7 4.8 4.7 4.6 3.6 3.7 4.1 ' 3.9 4.2 4.3 Businesses were also asked to give their opinions on the strengths and weaknesses of the Cottage Grove business climate. The table below provides each individual response given by a business as part of the interview. Duplicate answers/items in the table below indicated that different businesses gave the same response. Strengths 1. Great Staff to Work with at City 2, Strong Workforce 3. Low Traffic for Commute 4. Good Location, no traffic 5. Accessibility to Airport 6. Business Friendly 7. Strong Workforce Weaknesses 1. Response from the Railroad Company and the lack of Consistent Schedule 2. No Public Transportation for Workforce 3. No Public Transportation for Workforce 4. Lack of Housing - Apartments that are affordable 5. No Public Transaortation for Workforce 6. Need Another Hotel 7. No Public Transportation for Workforce Economic Development Authority Business Retention and Expansion Program 2020 10/26/2020 8. Great Incentives, Utilities, and Infrastructure 9. Hero Center is Great 10. Room to Grow 11. Labor Pool is Strong 12. Great High School and Partnership 13. Appreciate the Traffic Light at 95th Street and Jamaica Avenue 14. Workforce and Overall Experience to Attract Talent 15. Great Communication with City 2020 Priorities and Projects 8. Road Construction 9. Only Chain Restaurants No Food Destinations 10. Lack of Housing Options — Higher End Single Family for Executives and Apartments 11. No Public Transportation for Workforce 12. Taxes are High and need to be careful with Spending Transportation — Overwhelmingly businesses indicated this as the highest priority for the City to address. Businesses agree that the workforce they do have is an asset to their organization. However, increasingly it is getting harder for businesses to get employees to Cottage Grove and they are looking for alternative public transportation methods to pull employees from St. Paul and the surrounding area. The City of Cottage Grove is part of the planned Red Rock Corridor, which is a plan to bring Bus Rapid Transit to the community. This will address the businesses needs for public transportation, however there is no immediate timeline for implementation. The City should work to fulfill this planned transportation service through their interactions with committees (i.e. East Metro Strong) and through their state legislatures. A solution that has worked for some businesses, on a limited basis, is the Metropolitan Council Van Pooling program. Further the City of Cottage Grove as part of its 2020 Strategic Plan is working to address development of a bus rapid transit station at the Shoppes at Cottage View. Work has already started with Washington County to potentially add this site to the Red Rock Corridor plan. Training — Businesses indicated that they needed better customized training programs in order to get their employees the skills they need to complete their jobs. Interviews from the 2017 BR&E program and the subsequent work showed that many businesses need specialized training programs. In order to address these concerns from businesses, as part of the 2020 Strategic Plan the Economic Development staff is working on developing workforce education opportunities. This includes working with the school district to raise awareness regarding trades, working with the school district on developing post -secondary EMT courses, engaging with businesses to create a network for job opportunities and finally exploring creation of a higher education campus. Housing — Businesses are looking for more options for their employees for both their executives and entry-level employees. This also will create more options for workforce Economic Development Authority Business Retention and Expansion Program 2020 10/26/2020 to live and work in the City and alleviate some of the need for public transportation. Based on the 2018 BR&E results the City has made a priority of marketing high-density housing opportunities to developers such as the Harkness Area and the Shoppes at Cottage View, which continues to be a priority. This work is also part of the 2020 Strategic Plan that places a focus on policy guided residential growth. As part of that work this includes developing a comprehensive housing plan that includes promoting sustainable development, increasing housing density, and developing public-private partnerships. Commercial Opportunities — Interviews have continued the theme of businesses wanting more options for their employees and clientele for restaurants and hotels. Businesses have indicated this helps with employee retention and makes it easier to conduct their day-to-day business in Cottage Grove. In 2020 the City of Cottage Grove started the Visitors Bureau, which has the goal of increasing visitors to the community for the attraction of new restaurants and hotels. Further the City of Cottage Grove continues to market commercial properties for development to developers and brokers at events like MNCAR and ICSC Recon. Conclusion The 2020 BR&E allowed Cottage Grove to connect with some of the city's top employers to determine how we can continue to help support them grow. The priorities developed in 2020 will allow us to set action steps for 2021 and beyond, not only for the EDA but also the City as part of its continued Strategic Plan. The 2021 program will focus on commercial businesses and allow us to see how businesses are dealing with the COVID-19 pandemic. Attachments 2020 BR&E Survey BR&E Quick Reference Guide