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HomeMy WebLinkAbout3.1a 6-28-2022 EDA Meeting Minutes CITY OF COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY ____________________________________________________________________ MINUTES Economic Development Authority (EDA) Special Meeting June 28, 2022 Pursuant to due call and notice thereof, a meeting of the Economic Development Authority was held on the 28th day of June, 2022, 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 Mann called the roll: EDA President Bailey-Here; EDA Vice President Dennis-Here; EDA Member Carey-Here; EDA Member Krohn- Here; EDA Member Myers-Here; EDA Member Thiewes-Here. Members Present: Myron Bailey, EDA President Steve Dennis, EDA Vice President Chris Carey, EDA Member Joe Krohn, EDA Member Dan Myers, EDA Member Eric Thiewes, EDA Member Members Absent: Kyle Knop, EDA Member Staff Present: Jennifer Levitt, City Administrator Brenda Malinowski, Finance Director Gretchen Larson, Economic Development Director Jaime Mann, Assistant to the City Administrator Others Present: Lisa McCormick, Representing Hemingway Retail (Façade Improvement Program Application) APPROVAL OF MINUTES 3.1 Approval of May 10, 2022, EDA Meeting Minutes EDA Vice President Dennis made a motion to approve the May 10, 2022, EDA Meeting Minutes. Motion was seconded by EDA Member Carey. Motion passed unanimously (6-to-0 vote). BUSINESS ITEMS 4.1 Economic Development Update/Business Inquiry Economic Development Director Gretchen Larson reviewed the Beige Book Report: Employment: Grew strongly since the last report, and demand for labor was hirer, although hiring was restrained by the tight labor market. Inflationary Pressures: Remained elevated since previous report, continue to affect a number of things, including labor. Wage Pressures: Continue to remain strong, with individuals looking for better pay. Consumer spending: Grew slightly, remains at high levels. Retail contacts reported modestly higher revenues from the previous month, but somewhat lower profits, not a surprise with the inflationary pressures. Commercial construction: Grew slightly. Manufacturing activity and agricultural conditions: Remained strong since the last report. It seems like Cottage Grove is ignoring some of the bubble that’s outside of them; we’re kind of on our own path. Project Updates: NorthPoint Development: Groundbreaking was held on May 26, 2022; it was well attended, and a number of elected officials were also there. Brent Miles said that capital goes where capital is welcome; so, you should congratulate yourselves on all the hard work done to get them here. Footings and foundation permits have been issued for both buildings with the first inspection scheduled for June 1. Building #2 will be constructed first. Plumbing plans have been submitted and are waiting on State Plumbing Board approval. Renewal by Andersen: Held a groundbreaking ceremony on June 21, 2022, for yet another expansion of their business. Mayor Bailey stated we’d be back in another two years for your next expansion. It’s awesome to see that all of your strategic planning has paid off. Cottage Grove Apartments: Footings and foundation will start on June 1; there will be an upcoming groundbreaking. The View Apartments: Footings and foundation work continues; the City is waiting for a response on certain portions of the project from the builder before the full permit can be issued. Commercial Projects: Park Place Storage: Plans have been submitted for a fourth building and are being reviewed. Bieter Eye Center: The building and plumbing permits have been issued for their relocation to the Summerhill Professional Building. Design Plus Cabinets: Plans have been reviewed and approved for the tenant improvement project at 8599 West Point Douglas Road South. Tradehome Shoes: Plans have been reviewed and approved for a minor remodel. American Logistics Services: Final inspections are beginning for their office and warehouse space in the Capp Industries building. Park Projects: Oakwood Park Shelter: Plumbing work will begin once State review/approval is received. 4.2 ICSC Recap Director Larson stated this was an exciting year at ICSC; the Board Members who attended stated it was probably one of the most productive ones in the last four-or-five years, although COVID also played a part in that. They visited a number of retailers, including Circle K, Little Caesars, Big 5 Sporting, Qdoba, The UPS Store, and Freddy’s Steakburgers. They also visited with others, who were actually seeking locations: Raising Cane’s, Smoothie King, Famous Footwear, Tommy’s Carwash, Adventure Golf and Sports (whom we connected to our Parks Department for services they offer), and Papa John’s. Others that have expressed an interest include Panera, Michaels, and Five Below. So, there’s a lot of interest in Cottage Grove by those looking for locations and there are some now competing for locations, which is good news. We’ll keep working with them, staff are just Economic Development Authority - Minutes June 28, 2022 Page 2 of 3 fielding questions, trying to figure out ideal places for them and how we could switch or swap buildings, and if anyone is interested in selling buildings that previously they wouldn’t have sold. We’ll keep you informed about that. Hotels are interested in coming to Cottage Grove, and they have to figure out what their ideal location would be and what made the most sense. We will be coming back with a request to update the hotel study that was done in 2014 because that’s the thing they’re most interested in now, what our current hotel study says. So, we’re looking for various groups, not only the previous one that did the hotel study, but some others that were recommended to us just yesterday, to check out their expertise in hotel studies. We’ll be working on that, and we even have a discussion with Marriott tomorrow, so we’ll see how that plays out. Those attending ICSC are not just retailers; investors and developers also attend. A number of them stopped by our booth and expressed an interest in not only hotel locations, but multifamily complexes here as well; they were asking where those could be built. So, we have another new map that we’ve made for them to show them where those opportunities lie. A number of people also expressed an interest in the Shoppes at Cottage View, including River Caddis and Ronn Thomas, of Cushman & Wakefield, who specializes in hotels, with whom we met just yesterday. Again, those conversations are continuing. She likes to tell everyone Cottage Grove has been found, it’s official. ICSC is certainly keeping us busy. EDA President Bailey stated we’ll plan on attending ICSC again next year; he asked EDA Vice President Dennis to comment on how he thought ICSC went this year. EDA Vice President Dennis said overall, he thought it was really good this year. We had a full court press on to especially bring in opportunities for lodging, as we’ve heard that from our Business Park investors, the Athletic Association, various local businesses, such as wedding venues, who need and want to have a place for people to stay; they don’t want to send them outside of Cottage Grove, as that’s where we end up losing all the additional ancillary spending that could take place here. Many present there stated it was great to see Cottage Grove, Minnesota again; we’ve been developing a presence and the brand for recognition purposes so that people have us on their map and want to come here. Regarding the hotel study, we highly recommend that, and hopefully our EDA colleagues will be on board with that because the last time we did that study was 2014; since that time, we’ve had significant population growth and businesses that have come to Cottage Grove, so it’s a completely different city than what it was at that time. He thought we could make the claim and set the groundwork for justifying why these investors want to come here; once we have that done, it’s going to show a very definite need for at least one, if not two, additional opportunities here in the community. EDA President Bailey stated he agreed. In previous years when we went to ICSC, usually it was Cottage Grove, Oregon? Oh, no, Cottage Grove, Minnesota. What was different this year is there were people who searched us out; River Caddis was one that said we’ve been watching Cottage Grove, just like NorthPoint was. As NorthPoint was doing things behind the scenes before we even knew that they were here; now, they’re investing millions of dollars in our community. Now we’re hearing from some of these end users, or they’re coming to town looking for sites before we even go to them. Now, we’re just trying to help them find the right site that makes sense for them. EDA Vice President Dennis noted that Cottage Grove was the only city in the State of Minnesota that was part of ICSC; he thought that spoke to the leadership and the dedication of not just the Council, but also the EDA, and our staff team. So, it was very good. 4.3 Façade Improvement Program Assistant Mann again reviewed the history and details of this program, which is meant to help beautify buildings in Cottage Grove. She detailed the criteria for the awards, as well as the priority zones. The EDA has budgeted $75,000 for the program; in April, the EDA awarded two grants, so there is still one available. We received an application from Hemingway Retail, LLC; Lisa McCormick is here representing the business today, and it is in Priority Zone 1, at 7584 80th Street South, which is right across from the Grove 80 Apartments on Hemingway Avenue. She displayed a photo of the building and noted it’s a big project, including: • Exterior repainting and residing where needed • Replacement of windows and doors • Landscaping • Exterior masonry/stucco repair The estimated project cost listed here is $117,130, but they’re investing more in that building. The additional costs are not included in the eligible façade improvements. They’re requesting the full $25,000 matching grant for the building. Assistant Mann stated she’d take any questions, as would Lisa McCormick, representing Hemingway Retail, LLC. Recommendation: By motion: 1) Award Hemingway Retail, LLC an award letter for the submitted project with matching funds of up to $25,000 for any eligible expenses as part of the City of Cottage Grove Façade Improvement Grant Program. EDA President Bailey stated the building was purchased by Hemingway Retail, but the lessee on the north side will be Dunkin’ Donuts/Baskin Robbins. This went before the Planning Commission last night and it passed, so it will come before the City Council. It sounds like they’re moving forward the project, which is great. EDA Member Myers made a motion to award Hemingway Retail, LLC an award letter for the submitted project with matching funds of up to $25,000 for any eligible expenses as part of the City of Cottage Grove Façade Improvement Grant Program. Motion was seconded by EDA Member Krohn. Motion passed unanimously (6-to-0 vote). 4.4 Thai Garden Purchase Agreement Amendment Assistant Mann stated this site, approximately 0.54 acres, is owned by the EDA. There is currently a Purchase Agreement on it with Thai Garden, which was fully executed at the April 12, 2022, EDA Meeting; the purchase price was $188,179. They’ve run into some delays in their due diligence period, so they are currently asking the EDA for an extension to their Purchase Agreement. They are supposed to close at the end of July, but they’ve not submitted a planning application or submitted items for any approvals yet, so are asking for an extension to their closing date. We’re looking at pushing it out to September 30, 2022; with that, they have committed to depositing an additional $10,000 into their escrow account with the execution of the First Amendment to their Purchase Agreement. The First Amendment would extend the closing date to September 30, 2022, which would allow them time to get the appropriate approvals for their building. Recommendation: By motion: 1) Approve Resolution 2022-007 authorizing the First Amendment to the Purchase Agreement between the City of Cottage Grove and Hang, LLC. 2) Authorize the EDA President and City Administrator to execute the First Amendment to the Purchase Agreement with Hang, LLC, for the sale of 0.54 acres for development purposes. Economic Development Authority - Minutes June 28, 2022 Page 3 of 3 EDA Member Thiewes made a motion to Approve Resolution 2022-007 authorizing the First Amendment to the Purchase Agreement between the City of Cottage Grove and Hang, LLC. Motion was seconded by EDA Vice President Dennis. Motion passed unanimously (6-to-0 vote). EDA Member Carey made a motion to authorize the EDA President and City Administrator to execute the First Amendment to the Purchase Agreement with Hang, LLC, for the sale of 0.54 acres for development purposes. Motion was seconded by EDA Member Krohn. Motion passed unanimously (6-to-0 vote). 4.5 WAG Farms Purchase Agreement Amendment Assistant Mann stated this land parcel totals 25.4 acres; 22.4 acres is currently under a fully executed Purchase Agreement with Syndica, LLP, approved at the February 8, 2022, EDA Meeting. Syndica, LLP, purchased the land from the owners, WAG Farms Trust. The remaining 3 acres is owned by the EDA. The Purchase Agreement includes a purchase price of $3,872,484. Syndica has reported some supply-chain issues with roofing materials, so they will be submitting a notice that they are exercising the first extension option, for a 30-day extension to their closing, which was part of the original Purchase Agreement. Exercising this option means that $35,000 of the original $50,000 earnest money becomes nonrefundable. If we proceed to closing, the earnest money will be applied to the purchase price. With Syndica exercising the first extension option, the EDA needs to amend the original Purchase Agreement with WAG. The First Amendment to the Purchase Agreement extends the closing date for the purchase from WAG to the EDA to be on or before August 31, 2022. This extension covers the two extension options that Syndica has available from their Purchase Agreement. Recommendation: By motion: 1) Approve Resolution 2022-008 approving the First Amendment to the Purchase Agreement between WAG Farms Trust and the Cottage Grove Economic Development Authority. 2) Authorize the EDA President and City Administrator to execute the First Amendment to the Purchase Agreement with WAG to extend the closing date to on or before August 31, 2022. EDA Vice President Dennis made a motion to Approve Resolution 2022-008 approving the First Amendment to the Purchase Agreement between WAG Farms Trust and the Cottage Grove Economic Development Authority. Motion was seconded by EDA Member Myers. Motion passed unanimously (6-to-0 vote). EDA Member Krohn made a motion to Authorize the EDA President and City Administrator to execute the First Amendment to the Purchase Agreement with WAG to extend the closing date to on or before August 31, 2022. Motion was seconded by EDA Member Carey. Motion passed unanimously (6-to-0 vote). PUBLIC HEARINGS - None. OTHER BUSINESS 6.1 EDA Calendar EDA President Bailey stated the July calendar of information was given to the EDA Board. There’s also information there on the Façade Improvement Program. 6.2 EDA Comments - None. 6.3 Response to Previous EDA Comments - None. 7 WORKSHOP - None. 8 ADJOURNMENT EDA Member Thiewes made a motion to adjourn. Motion was seconded by EDA Vice President Dennis. The meeting adjourned at 7:53 a.m. (6- to-0 vote). Respectfully submitted, Jaime Mann Assistant to the City Administrator /jag