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HomeMy WebLinkAbout3.1 02-09-2021 EDA Minutes CITY OF COTTAGE GROVE E CONOMIC D EVELOPMENT A UTHORITY MINUTES EDA Meeting February 9, 2020 Pursuant to due call and notice thereof, a meeting of the Economic Development Authority was virtually held via Zoom at https://cottagegrovemn.zoom.us/j/91575887526 on the 9th day of February, 2021, at 7:30 a.m. CALL TO ORDER The meeting was called to order at 7:30 a.m. by EDA President Bailey ROLL CALL Assistant Wolf called the roll: EDA President Bailey-Here; EDA Vice President Dennis-Here; EDA Member Smoot-Here; EDA Member Thiewes-Here. Members Present: Myron Bailey, EDA President Steve Dennis, EDA Vice President Rachel Smoot, EDA Member Eric Thiewes, EDA Member Members Absent: Erin Pash, EDA Member Chris Carey, EDA Member Dan Myers, EDA Member Staff Present: Jennifer Levitt, EDA Executive Director/City Administrator Robin Roland, Finance Director Matt Wolf, Assistant to the City Administrator Christine Costello, Economic Development Director Others Present: None APPROVAL OF MINUTES 3.1 Approval of the December 8, 2020 EDA Minutes EDA Vice President Dennis motioned to approve the December 8, 2020 EDA Meeting Minutes. Motion was seconded by EDA Member Thiewes. Assistant Wolf called the roll: EDA President Bailey-Aye; EDA Vice President Dennis-Aye; EDA Member Smoot-Aye; EDA Member Thiewes-Aye. Motion passed unanimously (4-to-0 vote). Economic Development Authority – Minutes February 9, 2021 Page 2 of 6 BUSINESS ITEMS 4.1 Economic Development Update/Business Inquiry Christine Costello, Economic Development Director, gave the Beige Book Report for the month of January, 2021. Employment grew modestly as there was an increase in hiring demand, but the labor supply did not respond to the growth. Some labor constraints have been seen, not only with health care benefits and wage concerns, but also the prospect of enhanced unemployment benefits keeping individuals from working. We’ve also heard that from businesses throughout Washington County: People are opting to not take jobs as their unemployment benefits are higher; hopefully, that will change. Wage pressures were moderate. Hospitality and tourism saw little or no increase. Price pressures were modest and shipping costs were up. Consumer spending also rose modestly. Retailers stated the holidays had lighter traffic, but had exceeded their scaled-back expectations. Commercial construction fell since the last report, but residential construction continues to outperform. Manufacturing activity in the State was moderate. Director Costello gave updates on the following: Grove80 Apartments: They’re currently in the framing stage on the third of four floors. The first floor electrical, plumbing, and fire suppression have begun. Ravine Park Trail Head Building: The framing and interior utilities have been approved, and the contractors are completing the interior and exterior finishes. Air Gas: Contractors are completing interior finishes of the occupied area of the project, and most of the exterior racking system is in place. Their newly-hired plant manager, Josh, has relocated to Cottage Grove and is now one of our residents. Grove Plaza: A permit was submitted for a façade improvement and tenant build out. Salons by jc will be in the former MGM Liquor space; they’re proposed to open in 2021. Stylists there will be able to lease a small room from salons by jc and start their own business, though they will share a common lunchroom and laundry room. Caribou Cabin: The site at 7702 80th Street has been vacant for several years; it’s at the corner of 80th Street and Hinton Avenue. Caribou Cabin is planned for that location; Caribou Cabin is a walk- up or drive-thru Caribou Coffee. The building is almost 600 square feet, and will have an exterior patio and bike racks. The Plat, CUP, and Site Plan Review will be discussed at the Planning Commission Meeting in February. Culver’s: A CUP for a second drive-thru lane at Culver’s, 7998 Hardwood Avenue, also will be discussed at the February Planning Commission Meeting. Because they’ve seen an increase in drive-thru traffic, they’re looking to spit their drive-thru lane, similar to McDonald's, with the traffic merging into one lane to pay at the window. EDA Member Smoot asked if the Caribou Cabin would have any indoor seating or if it was just outdoor seating. Director Costello replied that all of their seating will be outdoors; you’d need to drive to their other site, near Walgreens, if the weather wouldn’t allow you to sit outdoors. EDA Member Smoot commented that it will be nice to have something in that location. 4.2 Certificate of Completion for Up North Plastics Director Director Costello gave the background on this project: In 2018, the City Council and EDA approved the development and construction of an additional plastics-manufacturing facility at Up North Plastics. The facility would be over 428,000 square feet, with 28 silos for storage of plastic pellets, and an additional 212 parking spaces for employees. The plant was proposed to make branded garbage bags, which can be found at Lowe’s, Home Depot, Menards, or Target. When Up North Plastics considered their options for expansion, they looked to lower their costs through business subsidies, which is a common practice. We looked at our Business Subsidy Policy to see if they met some of our objectives, which they did:  Encourage development in our Business Park;  Preserve the local tax base and improve the general economy and vitality of the City; Economic Development Authority – Minutes February 9, 2021 Page 3 of 6  Offset increased costs for development over and above the costs that a developer would incur from normal development;  Provide the highest and best desired use for the property;  Afford maximum opportunities, consistent with the needs of the City, for redevelopment of the area by private enterprise. Up North Plastics received business subsidy incentives from the State of Minnesota and the City of Cottage Grove: From the State they received financing from the Minnesota Investment Fund (MIF) and the Job Creation Fund (JCF). From Cottage Grove they received Tax Increment Financing (TIF) in the form of an Economic Development TIF District with a life of nine years; annual tax increment over those nine years totaled $891,675, and provided a pay- as-you-go amount of approximately $68,259 in financial assistance. All of that information is contained in our Contract for Private Development (Contract), which is the formal contract between the City of Cottage Grove EDA and Up North Plastics, Inc., which defines the terms, agreements, improvements, and restrictions that must be made by Up North Plastics, Inc. in order to receive the tax increment. Per the Contract, the EDA must furnish a Certificate of Completion to the developer once the minimum improvements have been completed; per the Contract, minimum improvements is defined as “an expansion to an existing facility, which includes approximately 420,000 square-foot addition of manufacturing and warehousing space”. A letter from the City’s Building Official states that the developer has completed construction of the building, and a Certificate of Occupancy was issued on December 17, 2020. Recommendation: Approve, by motion, that the developer, Up North Plastics, has completed the minimum improvements in accordance with the Contract by executing the Certificate of Completion form. Mayor Bailey stated executing the Certificate of Completion is a formality. As there were no questions from the EDA Members, Mayor Bailey stated he’d need a motion. EDA Member Thiewes motioned that the developer, Up North Plastics, has completed the minimum improvements in accordance with the Contract by executing the Certificate of Completion form. Motion was seconded by EDA Member Smoot. Assistant Wolf called the roll: EDA President Bailey-Aye; EDA Vice President Dennis-Aye; EDA Member Smoot-Aye; EDA Member Thiewes-Aye. Motion carried unanimously (4-to-0). 4.3 Façade Improvement Program Reimbursement – Culver’s Assistant Matt Wolf gave the background of the Façade Improvement Program: It was started in 2019 and is a popular program used throughout the country to help incentivize improvements to the exterior of commercial buildings. The assistance is meant to help beautify buildings, increase consumer awareness of businesses, and sustain a healthy commercial building stock in Cottage Grove. In 2020, the Cottage Grove EDA approved Culver’s for the maximum grant amount of $24,999. With the COVID pandemic and the desire to help businesses and commercial property owners, we also supported two other projects, Jamaica Square and the Shoppes at Gateway North. Culver’s is an owner-occupied restaurant business and is uniquely positioned as one of the properties highly visible to residents and visitors traveling on Highway 61/10. Culver’s application included exterior painting of the building, new gooseneck lights, new main-entrance door, new exterior signage, awning replacement, and patio umbrella replacement. In total, the project had $86,392 in eligible expenses based on project guidelines, representing a 71% private-to-public funding ratio. The application was unanimously approved (7-to-0) by the EDA Economic Development Authority – Minutes February 9, 2021 Page 4 of 6 at their June 9, 2020 meeting; the City Council unanimously approved (5-to-0) the application at their June 17, 2020 meeting. Culver’s submitted all of their paid invoices on January 13, 2021, which totaled $103,296, itemized as follows: McCON Building Corporation, $37, 464: Siding Repairs & Lift; Exterior Painting; New Gooseneck Lights; Door Hardware. Springfield Sign, $55,878: Wall Signs, throughout the building. Baraboo Awning, $9,954: Contemporary Curved Umbrellas and New Fabric Awnings. Recommendation: Approve payment of $24,999 to R & G Endeavors, Inc. based on completion of the façade improvement of their building at 7998 Hardwood Avenue South. EDA President Bailey said that it was nice to see Culver’s reinvesting in our community, especially on 80th Street, because it’s so readily visible. EDA Vice President Dennis motioned to approve payment of $24,999 to R & G Endeavors, Inc. based on completion of the façade improvement of their building located at 7998 Hardwood Avenue South. Motion was seconded by EDA Member Smoot. Assistant Wolf called the roll: EDA President Bailey-Aye; EDA Vice President Dennis-Aye; EDA Member Smoot-Aye; EDA Member Thiewes-Aye. Motion carried unanimously (4-to-0). 4.4 Letter of Support – East Point Douglas Road and Jamaica Avenue Reconstruction and Signal Modifications Project EDA President Bailey stated this letter of support was an opportunity for us to get some additional funding for this intersection. Director Costello stated she’d provide background and some additional detail on this: For almost a decade, the City has been attempting to address the growing congestion and functionality concerns at the East Point Douglas Road/Jamaica Avenue intersection area. The concerns centered on long cue lengths and double cycling, which result in blocking intersections and major traffic backups. Numerous studies and interventions have taken place over this time, including restriping, lane expansions, exchange controllers, split phasing, and signal coordination. Unfortunately, these interventions have had little positive impact on either corridor, and all feasible rehabilitation options have been exhausted. In 2017, community engagement began with the businesses adjacent to the East Point Douglas Road/Jamaica Avenue intersection on needed reconstruction and signal modifications for the intersection. The reconstruction and signal modifications for this intersection are scheduled in the City’s Capital Improvement Plan for construction in 2023; in part, this is due to the age and poor condition of the pavement as well as the continuous traffic congestion with the current roadway and signal configurations. On January 6, 2021, the City Council authorized a feasibility report for this project. The City’s current 5-year Capital Improvement Plan (approved by the City Council on December 2, 2020) estimates a total of $8,000,000 for the project-related costs. The Local Road Improvement Plan (LRIP), which is administered by MnDOT, makes available up to $1.25 million to apply towards projects on local roads that are regionally significant, will result in safety improvements, address transportation deficiencies, and contribute to economic development. That intersection is regionally significant and has shown longstanding traffic and accessibility deficiencies, and the City has implemented many solutions over the years in attempts to resolve those. The proposed improvements included in this project meet the criteria of the LRIP funding Economic Development Authority – Minutes February 9, 2021 Page 5 of 6 opportunity; if funding can be secured through the LRIP grant, it would greatly alleviate the financial burden of this project. Recommendation: Consideration of a motion to recommend approving the Letter of Support for the Local Road Improvement Program administered by MnDOT. EDA President Bailey stated, as noted, this is really a bad intersection, and we often hear about it from our residents. We’re working with the local business owners to find ways to improve traffic in that area. There will likely be a need for a right-of-way, etc. based on schematics that we’ve seen; it might include a roundabout closer to where the bank and the Cub Foods entrance are located. We’re hoping to gain some extra financial support so our businesses and citizens won’t have to pay quite as much from a tax standpoint. EDA Member Smoot motioned for the consideration of a motion to recommend approving the Letter of Support for the Local Road Improvement Program administered by MnDOT. Motion was seconded by EDA Vice President Dennis. EDA President Bailey asked if there were any comments. EDA Vice President Dennis stated he’s heard from people about this intersection, and this is an important opportunity for us because it could potentially get us just under 16% of the funding cost for that project. It’s important for us to have an eye toward the future in terms of planning how we design and lay things out. With no disrespect to our predecessors, they didn’t take a long-term view of how this area would change over time. This is just one of the things that we do; we put in a lot of work to make sure that we’re making decisions that will stand the test of time. Assistant Wolf called the roll: EDA President Bailey-Aye; EDA Vice President Dennis-Aye; EDA Member Smoot-Aye; EDA Member Thiewes-Aye. Motion passed unanimously (4-to-0 vote). PUBLIC HEARINGS 5.1 No public hearings OTHER BUSINESS 6.1 Calendar EDA President Bailey mentioned the River Oaks Golf Course and the Eagles Bar and Grill will be opening for their Fish Fry in a couple of weeks; due to COVID social-distancing space, we’re now asking people to call for reservations. Chef James is ready for some work, and the food- preparation improvements to the kitchen are amazing; we hope you’ll patronize this gem in our community. 6.2 EDA Comments EDA Vice President Dennis stated he’d share a very timely message of appreciation from Ben Gathje, the President of the Cottage Grove Area Chamber of Commerce, which was in their monthly newsletter: “I acknowledge the City of Cottage Grove for their support of our local businesses. They have provided reduced license fees and grants for local businesses, as well as other measures of support. While we have watched other cities enforce increased restrictions, Cottage Grove lends its support for relief.” He felt that was a very important message and it speaks partly to some of the work that we do here, through the EDA. Last year we did a business stabilization program for a number of businesses in our community; so, the work that we do here is great and it’s important. It’s nice to see that we’re getting some recognition for that. Economic Development Authority – Minutes February 9, 2021 Page 6 of 6 EDA President Bailey stated it’s nice that we’re hearing that and also from some of our local businesses who have been supported by the City in a number of ways. Director Costello told him about a business we’d contacted, to inform them that we were refunding their liquor license for the year because of COVID; the person called had became emotional, crying, because they were so happy and appreciative. Sometimes the things that we’re doing as the EDA and the City are making an extremely positive impact on those who are running businesses in our community. He stated he’s glad that we’re able to support them and hope to continue to do so as we move forward. 6.3 Response to Previous EDA Comments None WORKSHOP None AJOURN EDA President Bailey noted that the next EDA Meeting will be held on Tuesday, March 9, at 7:30 a.m. EDA Member Thiewes made a motion to adjourn. Motion was seconded by EDA Member Smoot. Assistant Wolf called the roll: EDA President Bailey-Aye; EDA Vice President Dennis-Aye; EDA Member Smoot-Aye; EDA Member Thiewes-Aye. The meeting adjourned at 7:57 a.m. (4-to-0 vote). Respectfully Submitted, Christine Costello Economic Development Director /jag