HomeMy WebLinkAbout06-15-11 EDC Packet Chair
Ed von Holtum 1245 W. Highway 96
Committee Members -AV EN HILLS Arden Hills, MN 55112
Rob Davidson 651.792.7800
Dan Erickson Arden James Huninghake Arden Hills
Vacant
Vacant Economic Development
Vacant
Vacant Commission
Vacant June 15, 2011
Council Liaison 8:00 am to 9:30 am
Brenda Holden
City Vision
Arden Hills is a strong community that values its unique environmental setting, strong residential neighborhoods,
vital business community, well-maintained infrastructure,fiscal soundness, and our long-.standing tradition
as a desirable City in which to live, work, and la .
Agenda
Call to Order
1. APPROVAL OF THE AGENDA
2. MINUTES
A. April 20, 2011
3. UNFINISHED AND NEW BUSINESS
A. State of the City
B. Tax Increment Financing Draft White Paper
C. Gateway Signage
4. UPDATES
A. TCAAP & Other Projects
B. Commission Members
C. Council Liaison
D. Staff Comments
5. ADJOURNMENT
A quorum of the City Council and the Financial Planning and
Analysis Committee may be present at this meeting.
c
EN HILLS
CITY OF ARDEN HILLS,MINNESOTA
ECONOMIC DEVELOPMENT COMMISSION
APRIL 20,20118:00 AM
CITY HALL -- 1245 WEST HIGHWAY 96
CALL MEETING TO ORDER
Chair von Holtum called the meeting to order at 8:10 a.m.
ROLL CALL
Present: Chair Ed von Holtum, Commissioners James Huninghake and Dan Erickson.
Commissioner Rob Davidson arrived at 8:15 a.m.
Also Present: Council Liaison Brenda Holden, City Administrator Pat Klaers, and Community
Development Director Jill Hutmacher.
Absent: None.
1. APPROVAL OF AGENDA
It was the consensus of the EDC to accept the agenda as presented.
2. APPROVAL OF MINUTES
It was the consensus of the EDC to accept the January 12, 2011 EDC minutes as presented.
UNFINISHED AND NEW BUSINESS
Discussion took place on the interviews with local business owners and managers that the EDC
members conducted in 2009. These business contacts resulted in limited feedback that could
help in forming EDC goals for business development. Good points about the interviews include
having direct contact and "face time" with the owners and managers plus the EDC had an
opportunity to distribute the new City brochures.
Discussion took place on the business breakfast meetings that were held a few years ago. The
first breakfast was well attended but participation dropped off significantly for the follow-up
breakfast meetings. The EDC expressed interest in trying to hold the breakfast meeting again;
but doing only one per year around a "State of the City" address/theme or having high-level
• elected officials as guest speakers.
EDC Minutes
April 20, 2011
Page 2 of 3
•
In order to improve communication between the development committees and commissions in
the City, it was decided to exchange FPAC packets with the EDC and vice versa. Having the
EDC attend the May 10 FPAC meeting to discuss TIF was discussed.
The commission discussed identifying business needs and trying to help the business address
these needs as an EDC goal. The development of plans for the B2 district was offered as an
example of this effort and that now the next step for the City was to implement the B-2 district
plan.
Gateway signage and community identity was discussed as an EDC past and current goal.
Discussion took place as to whether or not the Red Fox/Grey Fox area had any real business
needs that the EDC could help the owners as a group address.
The EDC discussed their role in helping foster business development in the City.
Commissioners stated that they feel comfortable meeting with the business community and being
the"face of the City"to the businesses.
The EDC commented that developing and improving relationships with elected officials at the •
State and Federal levels could help when programs and funding are needed to help local
businesses.
Commissioner Davidson commented that because the City is aging, a goal of the EDC should be
to help advance business redevelopment proposals.
Staff commented that it plans to do some targeted research on development commissions and
structures in other cities to see how Arden Hills compares.
City Administrator Klaers noted that the meeting discussion didn't really follow the agenda and
that the commission conversation generally centered on goals and developing a work plan. It
was the consensus of the EDC to meet in June and to consider meeting more frequently than on a
quarterly basis.
3. UPDATES
A. TCAAP& Other Projects
B. Commission Members
B. Council Liaison
(No discussion took place on these topics)
•
EDC Minutes
April 20,2011
Page 3 of 3
•
ADJOURNMENT
The meeting adjourned at 9:30 a.m.
Minutes approved by:
Ed von Holtum, Chair Jill Hutmacher
Community Development Director
•
EN HILLS
MEMORANDUM
DATE: June 15, 2011 EDC Agenda Item 3.A
TO: Economic Development Commission Chair and Commissioners
FROM: Jill Hutmacher, Community Development Director j14
SUBJECT: State of the City Event
At the May 16, 2011, work session meeting, the City Council discussed the State of the City
event. It was decided that this year's State of the City should be focused on the business
community and will be held as a weekday breakfast event to maximize participation. The City
Council directed the EDC to organize the event and asked that it be held in September prior to
Celebrate Arden Hills.
• Discussion Questions:
1. What are appropriate venues in Arden Hills?
2. How should the event be marketed to the business community?
3. What presentation topics are particularly interesting to the business community?
• City of Arden Hills
Economic Development Commission June 15, 2011
Page 1 of 1
�-A I�E_N�HILLS
MEMORANDUM
DATE: June 15, 2011 EDC Agenda Item 3.13
TO: Economic Development Commission Chair and Commissioners
FROM: Jill Hutmacher, Community Development Director ;5-4
SUBJECT: Tax Increment Financing White Paper
The City Council has asked the Financial Planning and Analysis Committee (FPAC)to draft a
white paper analysis on the use of tax increment financing(TIF). The EDC is asked to provide
feedback on the draft white paper analysis from the perspective of economic development.
•
• City of Arden Hills
Economic Development Commission June 15, 2011
Page 1 of 1
Attachment
Draft White Paper Analysis
June 15, 2011, EDC Meeting
TIF Selection Process Whitepaper
for Arden Hills
February 1, 2011
Summary
We recommend that the City Council:
1. Establish long-term TIF assessment criteria
2. Develop a point-based assessment system
Background
TIF
The original argument made to legislatures to create TIF was that it created a way for cash-
strapped communities to finance the upfront costs associated with redeveloping blighted areas,
most commonly cleanup/remediation costs and infrastructure improvements. Subsidized
• redevelopment in an area could then spur future, unsubsidized redevelopment.
TIF has long-term effects that need to be considered when making a decision about providing
TIF for a project. "Unlike property taxes, increments are not used to pay for the general costs of
cities, counties, and schools. Instead, increments go to the development authority and are used to
repay public indebtedness or current costs the city incurred in acquiring the property,removing
existing structures or installing public services." (League of Minnesota Cities)
FPAC Committee
Arden Hills already has TIF Districts and anticipates the need for more TIF financing. The
Financial Planning and Analysis Committee was asked to look at how the City selects TIF
projects and make recommendations about the process. The Committee addressed three broad
questions:
• How much of the city's tax base can it afford to have in TIF Districts?
• How does the city best allot its TIF dollars to support its long term goals?(First come,
first served may not provide the best outcome for the city.)
• Are there tools or methods that will help city leadership assess each TIF request?
The committee has reviewed cases and policies from other cities around the United States as well
as processes used in corporate America to evaluate long-term strategic options and projects.
TIF Decision Process Overview
There are many tools the City of Arden Hills can use to drive development in the city, including
• preferential use of city facilities, loans,direct subsidies,property tax abatement,and Tax Increment
Page 1 of 6
Financing(TIF). These varying tools have different long-term and short-term costs. •
TIF is one type of business subsidy. Importantly,TIF is a long-term subsidy with long-term cost and
benefit impacts that must be considered.This stands in contrast to some other forms of subsidies where
the costs and impacts tend to be more short-term nature.
The use of TIF can be thought about as having two decision layers. The first layer involves near term
considerations:
• Is the individual project acceptable under the City of Arden Hills business subsidy Policy?
• Is the project financially feasible?
• Is the TIF request currently affordable under the cities TIF Spending Guidelines? (see
recommendation below)
The second layer of considerations involves long-term considerations.
• How does an individual project compare to the stated long-term goals and vision of Arden Hills?
• How does the project compare to other potential long-term projects that are not yet identified?
• How much long term leverage can the City obtain from a particular TIF project?
Before a TIF project is approved,the project should be acceptable under both levels of consideration.
Short-term consideration
The first step is to match the project to the City's Business Subsidy criteria. The project must fall within
the guidelines outlined. The second step is the project must meet the financial thresholds for a TIF
project. Finally,as a third step the project alone or in conjunction with other known projects cannot drive
the city to exceed its total desired TIF limit as defined in this TIF selection process guideline. •
These short-term considerations should be considered a threshold. A project must pass these tests to be
considered for TIF funding. However,TIF funding is long-term,therefore the more important
considerations are the long-term considerations.
Long-term consideration
By its nature TIF has long term impacts. The creation of a TIF District reallocates the tax money the
district creates for a period of time measured in years or even decades. Because only so much TIF is
affordable for the City, at a very minimum any individual TIF District presents a long-term(lost)
opportunity cost—a project today may preclude another different,potentially more beneficial,yet
unknown project tomorrow. Therefore the TIF decision making process should be focused on long-term
considerations.
Recommendation for Creating a TIF Evaluation Process
Develop TIF Spending Guidelines
In order to better manage TIF financing decisions over the long term we recommend the City
debate and set into policy a guideline on the total projected tax capacity of all tax increments in
the City. The City should limit the total projected tax capacity of all tax increments to not exceed
3/4 of the state average of 6.4%of the taxable market value. This would mean a guideline for
projected tax capacity for all tax increments in the City not to exceed X%.
Page 2 of 6
in ar-der-to bet4er- Additionally, we
recommend the FAA Q menifor-s the r#33 regular graphically monitoring of TIF projects either
every other year or after a certain level of new TIF activity.
The items that will be reviewed should include the total projected tax capacity,the percentage of
increase in services since the last review,the number of TIP projects and their respective end
dates,the effectiveness of active TIF projects to their original concept and any other statistics or
benchmarks that the eommittee deemsdeemed to be of importance.
Develop measurement criteria
We recommend that the city debate and approve a set of long-term criteria with which to weigh
potential TIF projects.
The City has already developed a vision statement. The Committee considered whether this
might be adequate as long term measurement criteria. One could simply compare a development
project to the City's stated long-term strategic goals. While the process would be a good first
step, we feel that it is too broadly worded to be used as criteria and would lead to confusion from
both developers trying to assess how the city will view their individual projects and citizens who
wonder why a particular project is or is not approved. We recommend the city develop a set of
more refined, long-term selection criteria with which to weigh development projects seeking TIF.
We further recommend that developing these criteria be done outside the process of considering
• any individual project. This will help ensure, as best as possible, an independent view of the
long-term needs and strategy of the City. These long-term criteria would then be integrated into
the current process of evaluating business subsidies.
Assign points
We recommend using a point based assessment system. There are multiple ways to implement
this,but the goal of any method should be that when a project is assessed it would be granted
points relative to how much it met each criterion and how relatively important that criterion is.
The intent of the points system is not that it would make the decision for the City Council,but
rather that it would focus discussion on the most salient points of the project under consideration.
Any large project is inherently complex and it is important to avoid prematurely debating its
finer points.
It has been suggested that an objective rather than subjective point system be developed,however given
the complexity of redevelopment projects and the mix of short-and long-term costs and benefits involved,
the Committee could come up with no strictly objective measure.That said,where possible we strongly
encourage objective measure wherever feasible.We also recommend that specific minimum requirements
be laid out, including enumerating any specific types of projects that are not considered appropriate for
TIF because by their nature such projects do not provide the necessary long-term benefits.
Scoring would be done by the City Council or its designated representatives.
•
Page 3 of 6
We commend that the following points,taken from our research, be held in mind throughout this
process:
1. The"but for"tests are only the minimum requirements for qualifying for TIF; prudent
communities set more stringent requirements.
2. TIF is there to solve community problems.
3. Use TIF only when truly necessary; it was never designed to be an alternate financing
method for private developers.
TIF Selection Criteria
Below is a draft of what selection criteria might look like. This is for discussion purposes only.
The goal would be to modify the percentages and the specific criteria and have the City Council
eventually,debate, vote and approve the Criteria. Once this is done the Economic Development
Committee(EDC),with any assistance needed from FPAC, should develop a detailed scoring
process and methodology.
Minimum requirements to use TIF
• The long-term viability of the development partner has been reviewed and the City has
determined that the partner has the financial stability and track record to drive the full
benefit of the project over the life of the project
• The objective of the project produces long-term expected benefit that exceeds the length
of the TIF and is at least 15 years in duration.
Selection Criteria (in rank priority order within each section) •
Community Goals 60%
1. Materially enhances the health, safety and well-being of all who live, work and play in
the City.
a. Enhances an interconnected system of trails,pathways and open spaces.
b. Protects and preserves the community's natural resources including open spaces,
lakes, wetlands, other significant natural features and historic resources.
2. Enhances or retains development of TCAAP in a way that accommodates a mix of land
uses that is sensitive to the natural environment, economically sustainable and a benefit to
the community
3. Retains or creates jobs that are long-term in nature and at or above the median for the
State of Minnesota(vs. Business Subsidy Policy standard?)
4. Creates a desirable commercial/retail environment that enhances the long-term vitality of
the City.
5. Provides a transportation system that has convenient and effective multi-modal
connections within Arden Hills and to adjacent municipalities,the remainder of the Twin
Cities Metropolitan Area and greater Minnesota.
Future Leverage Goals 30%
1. Likelihood project will spur other projects that will not require further subsidy.
a. Increases the ability to further develop a healthy and accessible community
b. the center for further business development
c. Increases likelihood of job growth in a growing industry
Page 4 of 6
Regional Goals 10%
2. Moves the region closer to its mix goals for affordable housing
3. Enhances the regional trail system and it's integration with the Arden Hills trail system
Next Steps
1.) Circulate Whitepaper with entire FPAC; debate and modify as appropriate.
2.) Review the City of Bloomington's methodology for creating its TIF spending guidelines.
3.) Place topic on City Council working session agenda for discussion and feedback.
4.) City Council to debate and approve (subject to modifications and amendment) "Long-
term TIF Selection Criteria"
5.) Based on City Council's approved Long-term TIF Selection Criteria, EDC (with
assistance from FPAC)to develop Long-term TIF Criteria point system and revised TIF
approval process
•
Page 5 of 6
6.) City to embody new process and point system into TIF approval policy.what the final
components and process might look like
TIF Assessment Components and Process
City Management Information
(Identified outside any project proposal)
City development goals
Prioritized and weighted
City financial goals
Prioritized and weighted
TIF Budget and plan
TIF Assessment Worksheet
•
TIF Assessment Process
(The 3 steps of the worksheet done for each project)
Initial project screening
Passes City's subsidy criteria?
TIF regulatory qualification?
City has TIF capacity?
Long-term screening
Long term benefits to City?
Long term viability of partner?
TIF assessment
How well does project rank? EDC recommendation?
Matches well enough to continue
Matches well enough to continue
TIF assessment
City Council approval?
Ranks well enough to recommend to City Council
Page 6 of 6
,-A ENHILLS
MEMORANDUM
DATE: June 15, 2011 EDC Agenda Item 3.0
�I
TO: Economic Development Commission Chair and Commissioners
FROM: Jill Hutmacher, Community Development Director J{}
SUBJECT: Gateway Signs
The City Council discussed gateway signs at the April 18, 2011, work session meeting. The
types of signs that have been discussed to date generally fall into three categories:
1. An aluminum or high-density urethane sign mounted on two posts (Attachment A). The
cost estimate for this type of sign is approximately $5,000 to $6,000 including
installation.
• 2. An aluminum sign on a solid aluminum base (Attachment B). The cost estimate for this
type of sign is approximately $12,000 to $14,000 including installation.
3. A sign with a masonry (brick or stone) base (Attachment C). The cost estimate for this
type of sign is approximately $20,000 to $25,000 including installation.
The City Council discussed the types of signs and the importance of the signs making a positive
statement about the community. Although no vote was taken, a majority of Councilmembers
appeared to prefer a sign with a masonry base, and felt that a cost of$20,000 to $25,000 was
acceptable for a high-quality sign.
Potential Sign Locations
Eight proposed sign locations have been identified (Attachment D). At the April 18 meeting,
some Councilmembers expressed a concern that the total cost of signs, assuming masonry-base
signs were chosen, was too high and asked whether some of the eight potential locations had a
lower priority.
A masonry-base sign is proposed at the southwest corner of the intersection of County Road E
and Lexington Avenue. An agreement with the developer stipulates that the developer will fund
and install the sign base, and the City will install the sign face at a cost of approximately$10,000
to $13,000. The sign will be installed when the "pod"buildings are redeveloped. The Planning
• City of Arden Hills
Economic Development Commission June 15, 2011
Page I of 2
Commission and City Council have recently reviewed a concept plan for the Arden Plaza
redevelopment which includes the construction of a CVS pharmacy at the corner of County Road
E and Lexington Avenue. The Planning Commission is expected to formally consider the
development proposal in late summer 2011.
The City has a permanent easement for a sign at County Road D and Cleveland Avenue
(Attachment E). The terms of the easement agreement limit the size of the sign to a height of
four feet, six inches and a width of twenty feet. All three of the signs described above exceed
four feet, six inches. If the City chooses to install a gateway sign at this location, a sign design
that does not exceed the easement limitations must be designed.
As a condition of the development agreement between the City and Presbyterian Homes,
Presbyterian homes will demolish the commercial building located on the triangle parcel at the
intersection of County Road D and Lake Johanna Boulevard. After underground fuel storage
tanks and any related contamination have been removed, Presbyterian Homes will transfer the
triangle parcel to the City at no cost no later than June 30, 2012. If a gateway sign were to be
installed at the intersection of County Road D and Lake Johanna Boulevard, it could be located
on the triangle parcel.
Existing right-of-way is available for signs located on Highway 96 at Round Lake Boulevard and
Lexington Avenue.
• Discussion Question
1. Does the EDC have feedback for the City Council on the priority of the potential sign
locations?
• City of Arden Hills
Economic Development Commission June 15, 2011
Page 2 of 2
Attachment
Aluminum or High-Density
Urethane Sign
June 15, 2011, EDC Meeting
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June 15, 2011, EDC Meeting
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Attachment
Sign with Masonry Base
June 15, 2011, EDC Meeting
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Attachment
Potential Sign Locations
•
•
June 15, 2011, EDC Meeting
Proposed Gateway Sign Locations
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Attachment
Sign Easement
•
•
June 15, 2011, EDC Meeting
qOC# 3777264
O �A
1 � Certified Recorded On
JULY 29,2004 AT 10:0 0AM
OFFICE CD.RECORUER
RAMSEY COUNTY IAN
Fee Amount: 119.50
zoa-11 JIM 1111111 Ill 1111111111111111111
sey Goun�Y.
ti�to esotd
Auditor,Ram
GRANT OF PERMANENT EASEMENT
GATEWAY SIGN
1 MSPIARDEN HILLS, LLC, a Minnesota limited liability company represents that it
is the record fee owner of the following described property situated in Ramsey County,
Minnesota:
I Lot 13, Block 2, Dalsoren Addition (the "Property")
For valuable consideration, the receipt of which is hereby acknowledged, Grantor
does hereby convey to the City of Arden Hills, a Minnesota statutory city ("City") and its
• successors and assigns, a permanent easement for the construction, maintenance,
operation, inspection and repair of a gateway sign; together with a permanent easement
for ingress and egress, at any and all times, with all machinery, tools, equipment,
vehicles and materials necessary for the aforesaid purposes, over, under and across
the following described property:
The South 15.0 feet of the West 15.0 feet of Lot 13, Block 2,
Dalsoren Addition.
The easement conveyed hereby is subject to the following restrictions which shall
remain in full force and effect for the term of the easement:
1. The sign shall be a gateway sign for the City and shall not contain other
advertising.
2. The sign shall not exceed a width of 20 feet nor a height of 4 feet 6 inches,
as measured from the grade of the sidewalkltrailway adjacent to the sign
on Cleveland Avenue and County Road D.
3. The City shall maintain any landscaping installed by the City in conjunction
with the gateway sign. City installed landscaping shall not be of a type
that will substantially reduce the visibility of the building constructed on the
Property from the intersection of County Road D and Cleveland Avenue.
4. The City shall be responsible for sign maintenance anr cgqs� ts.
-As
PETERSON, FRANC
BOX
5. The City shall hold harmless the Grantor and his successors and assigns,
for all claims of damages arising out of the City's negligent use of the
easement area; provided that, the amount of the City's liability shall be
limited by the provisions of Minn. Stat. Chapter 466 and amendments
thereto.
IN WITNESS WHEREQ�F Grantor has caused this document to be executed on
its behalf on the 2-1 day of 2004.
MSP/ARDEN HILLS, LLC
I
i
By: �
Ric and ehr g, President
i
STATE OF MINNESOTA )
ss.
COUNTY OF ��AkW )
On this 4_day of�2004, before me, a notary public within and for said
county, personally Richard H. Zehring, the President of MSP1Arden Hills, LLC, a
Minnesota limited liability company, and owner of the above described property and he
executed the foregoing instrument and acknowledged that he executed the same on
behalf of said company.
Not ry Public
THIS INSTRUMENT WAS DRAFTED BY: F� THERESA LYNN JOW
PETERSON, FRAM & BERGMAN, P.A. (JPF) Notaryt Comma ion . .
50 East Fifth St_ #300 pi es 4131 f°n
M�.,..x Expires 1rs�MoV �
St. Paul, MN 55101
(651) 291-8955
FAusers\Janice\Jerry\Arden HiI1s1MSP CommerdaKGateway Sign Easement.doc