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HomeMy WebLinkAbout05-01-13 EDCDan Altstatt -- Vacant Vacant www.cityofardenhills.org Vacant Vacant Ed Werner Arden Hills is a strong community that values its unique environmental setting, strong residential neighborhoods, vital business community, well- infrastructure, fiscal soundness, and our long-standing tradition as a desirable City in which to live, work, and play. CALL TO ORDER Minutes 3.A.April 3, 2013 EDC Minutes Documents:13 MINUTES.PDF Unfinished And New Business 4.A.State Of The City Documents:MEMO.PDF 4.B.Commercial/Industrial Property Analysis Documents:MEMO.PDF, Economic Gardening Documents:MEMO.PDF 5.A.TCAAP Update Documents:MEMO.PDF 5.B. Documents:MEMO.PDF, Commission Members 5.C.A.New Member Recruitment Council Liaison 5.E.Staff Comments 5.E.A.Summer Meeting Schedule A quorum of the City Council may be present at this meeting. CITY OF ARDEN HILLS, MINNESOTA ECONOMIC DEVELOPMENT COMMISSION APRIL 3,20138:00AM CITY HALL --1245 WEST HIGHWAY 96 CALL MEETING TO ORDER Chair Ed vonHoltum called the meeting to order at 8:15a.m. ROLL CALL Present:Chair Ed von Holtum,Dan Altstatt, and Dan Erickson. Also Present:Council Liaison Ed Wernerand Community Development Director Jill Hutmacher. 1.APPROVAL OF AGENDA It was the consensus of the Commission to accept the agendaas presented. 2.APPROVAL OF MINUTES It was the consensus of the Commission to accept the February 6, 2013,meetingminutes as presented. 3.UNFINISHED AND NEW BUSINESS A.Newsletters Commissioner Erickson inquired whether the City newsletter is distributed to every address including businesses. Community Director Hutmacher responded that the City newsletter is mailed to every physical address in the City. Commissioners discussed whether the EDC would have enough business-related content for a mailer separate than the City newsletter which already includes articles of interest to the business community. Community Director Hutmacher asked whether economic development newsletters should be published on as as-needed or district-specific basis as projects or issues arise. She mentioned the recent Round Lake newsletter that was distributed to alert businesses of the upcoming US EDC Minutes April 3, 2013 Page 2of 4 10/Highway 96 project as well as other business news items. Hutmacher suggestedthat similar newsletters could be created to highlight upcoming projects that affect the Red Fox/Grey Fox or B-2 Districts. Chair von Holtum remarked that he liked the Round Lake newsletter as well as the district map and business list that were created. He thought that creating economic development newsletters on an as-needed or district-specific basis would be the best approach. Community Director Hutmacher inquired whether Commissioners had suggestions for business news item for the City website. Commissioners suggested that new and startup businesses be featured on the website. Commissioners agreed that Now Bikes and Fitness should be featured once they open in their new location on County Road E. B.State of the City Commissioners suggested that the EDC coordinate the State of the City event with the Joint Development Authority since the TCAAP project will bea primary topic of discussion. Chair von Holtum indicated that an event date in the first two weeks of September is preferred. Commissioners discussed potential venues for the event including North Heights Lutheran Church, where the event was held in 2011, the Marsden Room at the Ramsey County Public Works Facility, Flaherty’s, the Army Reserve, and the Bethel facility on Dunlap Street. Staff will research the potential venues and bring back information for discussion at the next EDC meeting. 4.UPDATES A.TCAAP Community Development Director Hutmacher reported thatthe congressional oversight committee and the General Services Administration have approved the Amended Offer to Purchase. The County is preparing for closing which is expected to occur in mid-April. Community Development Director Hutmacher added that five proposals for the TCAAP master planning process were received on March 15. The selection committee, comprised of City and County staff, reviewed the proposals and interviewed two consultant teams. The selection committee unanimously agreed to recommend that the City enter into a contact with one of the interviewed firms. The recommendation will be considered by the City Council on April 8. EDC Minutes April 3, 2013 Page 3of 4 B.Round Lake/Gateway Business Visits Community Development Director Hutmacher reported staff had visited every business in the Round Lake/Gateway Business District. A district-specific newsletter was distributed that highlighted the upcoming construction project and road closure at US 10 and Highway 96. Some businesses were unaware of the road project, and businesses generally expressed appreciation that the City was being proactive with communication. Chair von Holtum indicated that he was happy that the business visits were made and thought that the business list and map were very helpful. C.Commission Members Commissioners reported that they had no problems accessing the new agenda format from the City website. Chair von Holtum indicated that he preferred the new agenda format and website access. Commissioners inquired about the County’s consideration of economic gardening. Community Development Director Hutmacher responded that the City heard very recently that Ramsey County and Hennepin County were in the process of approving a joint economic gardening initiative. Additional information should be available for the May EDC meeting. Commissioners inquired about the status of the City’s existing economic development revolving loan fund. Community Development Director Hutmacher responded that staff is currently researching the history and requirements of the revolving loan fund. The Economic Development Authority will discuss the loan fund at its April 29, 2013 meeting. Additional information will be available for the May EDC meeting. D.Council Liaison Councilmember Werner stated that a brewery and sample room was looking for space in Arden Hills. The City Council amended the zoning and liquor license ordinance to be consistent with a law passed by the State legislature in 2012 that allows sampling of alcoholic beverages brewed on site (the so-called “Surly Bill”). Councilmember Werner reported that the City had applied for a grant to build a trail connection from Lake Valentine to I-35W along County Road E2. The Minnesota Department of Natural Resources has $800,000 of grant funds for fiscal year 2014. The maximum grant EDC Minutes April 3, 2013 Page 4of 4 amount to any City is $150,000. If the City is awarded the grant, it will need to provide matching funds of approximately $212,000. E.Staff Comments None. 5.ADJOURNMENT Chair von Holtum adjourned the meeting at 9:25a.m. _____________________________________________________ Ed vonHoltum, ChairJill Hutmacher Community Development Director  MEMORANDUM DATE:EDC Agenda Item 4.A May 1, 2013 TO: Economic Development Commission Chair and Commissioners FROM: Jill Hutmacher, Community Development Director SUBJECT: State of the City The EDC discussed the 2013 State of the City event at the April 3, 2013, EDC meeting. Commissioners decided that the event should be held in early September and directed staff to research potential locations including: Flaherty’s Arden Bowl Bethel University Northwestern College North Heights Lutheran Church Ramsey County Public Works Facility, Marsden Room U.S. Army Reserve Minnesota National Guard In order to avoid holding the event the week of Labor Day, staff narrowed potential dates to September 10, 11, or 12 (Tues, Wed, Thur). For planning purposes, staff assumed 75 attendees for the 2013 State of the City. Both the U.S. Army Reserve and the Minnesota National Guard declined the request due to security reasons.The Marsden Room was eliminated from further consideration because catering is not available, and other options that offer catering are available at a reasonable cost. Northwestern College has available space and catering, but was eliminated as a preferred location since it is not centrally located in Arden Hills. The availability and cost for the three remaining locations are summarized as follows. Bethel UniversityAvailable Sept 10 or 12$571 Flaherty’s Arden BowlAvailable Sept 10, 11, 12$657 North Heights Lutheran ChurchAvailable Sept 12$1,219 City of Arden Hills Economic Development Commission May 1, 2013 12 Page of At the May 1 EDC meeting, staff will be prepared to answer questions regarding parking, room setup, audio-visual equipment, and catering menu. Discussion Question 1.What is the preferred date for the event? 2.What is the preferred location? City of Arden Hills Economic Development Commission May 1, 2013 22 Page of  MEMORANDUM DATE:EDC Agenda Item 4.B May 1, 2013 TO: Economic Development Commission Chair and Commissioners FROM: Jill Hutmacher, Community Development Director SUBJECT: Commercial/Industrial Property Analysis City staff has begun an analysis of Arden Hills commercial and industrial property. Staff has compiled data from GIS-based property records, the Minnesota Commercial Realtors Association, and real estate industry reports. As the City considers reactivating the EDA revolving loan fund, establishing a business retention and expansion (BRE) program, or developing other long-term strategies for the City’s business districts, it would be helpful to have a deeper understanding ofthe local commercial/industrial market and its opportunities and challenges. Over the course of 2013, staff will continue to refine and expand the analysis. The EDC will be asked to periodically review progress and provide feedback prior to presentation to the EDA and City Council. Discussion Questions 1.What additional information is needed? 2.What information sources should be examined? 3.How should information be presented? City of Arden Hills Economic Development Commission May 1, 2013 11 Page of MEMORANDUM DATE: May 1, 2013 TO: Jill Hutmacher, Community Development Director FROM: Matthew Bachler, Community Development Intern SUBJECT: City of Arden HillsCommercial and Industrial Property Inventory The City recently completed an inventory of all commercial and industrial properties in Arden Hills. Specifically, the study sought to calculate vacancy rates for retail, office, and industrial properties in the City and compare these rates to the metropolitan and northeast submarket averages. in market conditions between the districts were also analyzed. Regional Analysis The vacancy rate for retail properties in the City is currently 16.7%. This compares with a metro- wide retail vacancy rate of 11.9%. Regional vacancy rates have been steadily declining since the 1 end of the last recession and real estate market reports forecast this trend to continue in 2013. Properties offering small-shop spaces of less than 12,000 square feet are one specific retail category expected to see positive absorption. These types of spaces can be found in local retail centers such as Shannon Square and Arden Plaza. However, the greatest amount of activity will likely be focused in regional malls and community centers developments that feature at least two anchor tenants and are approximately 100,000 square feet. The Arden Hills office market is currently outperforming the northeast submarket and metropolitan market. Arden Hills office properties have a vacancy rate of 17.9%, whereas the northeast submarket office vacancy rate is 18.8% and the metro-wide rate is 18.0%. As with the 2 retail property market, office vacancies have declined across the metro over the previous three 1 Cushman & Wakefield/NorthMarq (CW/NM), January 2013. CW/NM retail market reports only cover multi- tenant buildings greater than 20,000 square feet. The reports also divide retail properties into several subcategories based on total square footage, anchor tenants, and tenant mix. For the purpose of this analysis, data for the Neighborhood Center category was used in place of total retail market data, as this category better reflects the types of retail properties in Arden Hills. The total retail market vacancy rate for the metropolitan region is 8.3%. 2 Cushman & Wakefield/NorthMarq, January 2013. The Arden Hills office vacancy rate includes sublease properties. The northeast submarket and metro-wide vacancy rates do not include sublease properties and are slightly lower as a result. City of Arden Hills Economic Development Commission Meeting May 1, 2013 12 Page of years. The northeast submarket, however, is not expected to see significant absorption of vacant office space in 2013, with the greatest demand for office space continuing to be in the west submarket of the metro. A total of 12.8% of industrial property space in the City is vacant. In comparison, the northeast submarket vacancy rate is 13.0% and the metro rate is 12.8%. One impact on industrial vacancy in Arden Hills may be modern, efficient, high-clear buildings. Many properties in the City are older and may have issues related to age, layout, and limited docking space. This overall trend in industrial property usage may help explain the difference in the industrial property vacancy rate in the Gateway District as compared to theRed Fox-Grey Fox District. The Gateway industrial vacancy rate is just 2.8%. In contrast, the Red Fox-Grey Fox vacancy rate is 20.7%. Local Business District Analysis Each of the four business districts in the City has a distinct mix of commercial and industrial land uses. Significant differences exist between the districts in terms of overall vacancy rates and the specific level of vacancy amongst retail, office, and industrial uses. The overall vacancy rate for the B2 District is comparably high at 29.3% as a result of the large amount of office space available 37.8% of office space is currently vacant. The 33.0% vacancy rate amongst retail properties is also high relative to the City average of 16.7%. The Corporate Campus District is comprised almost entirely of commercial office space. Currently, 15.8% of office property in the district is vacant, falling below the vacancy averages for the City, northeast submarket, and metro. The Gateway District is predominantly made up of industrial properties. The district vacancy rate of 2.8% is significantly lower than industrial vacancy averages for the City, northeast submarket, and metro. Between the districts, the Red Fox-Grey Fox District has the greatest variety in land uses. District-wide the vacancy rate for all properties is 14.9%. A high level of vacancy in industrial properties (20.7%) impacts this average rate. Office and retail vacancies are significantly lower; 6.7% of office and 3.6% of retail square footage is available. City of Arden Hills Economic Development Commission Meeting May 1, 2013 22 Page of City of Arden Hills - Commercial and Industrial Property Invento Total Commercial & Industrial Vacancy % of Total Total Square FeetAvailable Vacancy Square FeetCitywideSquare Feet Rate B2 District844,78916.0%247,17129.3% Corporate Campus2,016,41938.2%319,21215.8% Gateway/Round Lake648,95512.3%18,3342.8% Red Fox/Grey Fox1,735,48632.8%258,43214.9% Other39,4800.7%00% Citywide Total5,285,129843,14916.0% Retail Vacancy % of Total Available Retail Retail Square Retail Square Retail Square FeetFeet CitywideFeetVacancy Rate B2 District224,04645.7%73,93833.0% Corporate Campus13,2702.7%00% Gateway/Round Lake5,5501.1%00% Red Fox/Grey Fox222,10845.3%8,1003.6% Other25,3585.2%00% Citywide Total490,33282,03816.7% Office Vacancy % of Total Available Office Office Square Office Square Office Square FeetFeet CitywideFeetVacancy Rate B2 District458,63315.7%173,23337.8% Corporate Campus2,003,55768.6%319,21215.9% Gateway/Round Lake00%00% Red Fox/Grey Fox445,13115.2%29,7176.7% Other14,1220.5%00% Citywide Total2,921,443522,16217.9% City of Arden Hills - Commercial and Industrial Property Invento Industrial Vacancy % of Total Available Industrial Industrial Industrial Industrial Square FeetSquare FeetSquare FeetVacancy Rate B2 District162,1108.7%00% Corporate Campus00%00% Gateway/Round Lake643,40534.3%18,3342.8% Red Fox/Grey Fox1,068,24757.0%220,61520.7% Other00%00% Citywide Total1,873,762238,94912.8% Regional Commercial Real Estate Market Northeast Arden Hills Metro Square PercentMarket Square PercentSquare Feet Percent Feet (Total)VacantFeet (Total)Vacant(Total)Vacant Retail 19,683,26011.9%n/an/a490,33216.7% 71,945,20718.0%7,578,25518.8%2,921,44317.9% Industrial 100,813,73412.8%34,393,83013.0%1,873,76212.8% {šÒ©-;t /Ò­w’“ µ ‘‰;Ez;Œ7 ‰ bš©·wa©¨ 1. Data for the neighborhood center retail subcategory was used does not reflect the total amount of retail square feet in the m metro. 2. Arden Hills vacancy includes sublease properties. Metro regio properties and are slightly lower as a result.  MEMORANDUM DATE:EDC Agenda Item 4.C May 1, 2013 TO: Economic Development Commission Chair and Commissioners FROM: Jill Hutmacher, Community Development Director SUBJECT: Economic Gardening Hennepin, Carver, Scott, and Ramsey Counties are collaborating on an economic gardening initiative.Forty-five businesses will be selected to participate. The program will focus on “stage two” companies with 10 to 100 employees and $1 to $50 million in sales. Participants must have growth potential and should sell products or services outside of Minnesota. Selected businesses will receive 50 hours of research assistance at no cost. Typical research projects include: Internet search optimization On-line marketing strategies GIS-based qualified sales leads Marketand competition analysis Industry trends In order to be selected to participate, the Chief Executive Officer must commit to working directly with the research consultants for a total of approximately 10 to 12 hours over a period of three to four weeks. The CEO must also commit to attendingten CEO round table meetings. The round table meetings convene a small group of non-competing “stage two” CEOs and offer peer-to-peer learning for issues such as employment law and human resources. CEOs may also attend monthly business forums. The economic gardening program is scheduled to be launched in August 2013. Applications will be accepted until early August. Discussion Questions: 1.How can the program be promoted to business service providers? 2.Which Arden Hills businesses are likely to meet the “stage two” criteria? How should local businesses be recruited? 3. City of Arden Hills Economic Development Commission May 1, 2013 11 Page of  MEMORANDUM DATE:EDC Agenda Item 5.A May 1, 2013 TO: Economic Development Commission Chair and Commissioners FROM: Jill Hutmacher, Community Development Director SUBJECT: TCAAP Update Ramsey County closed on the purchase of TCAAP on April 15. The full Notice to Proceed has been issued to Bolander and Sons. Installation of erosion control and the pre-demolition removal of hazardous materials (i.e., fluorescent bulbs/ballasts, asbestos)has begun. Building demolition will begin in approximately two weeks. The gate at Highway Avenue/County Road H will be the main gate, and everyone entering the site will need to check in at the Bolander construction office. The area outside of the perimeter at Highway Avenue/County Road H will be signed No Parking to eliminate conflicts with construction traffic. Barriers will beplaced to separate Rice Creek trail users from construction traffic. The Ramsey County sheriff will be patrolling the property. Trespassing and theft of building materials will be prosecuted. On April 29, 2013, the City Council will consider approving a contract with Kimley-Horn and Associates, Inc. for the TCAAP AUAR, Master Plan, and Regulations & Policies. Work onthe master planning process will begin in early May. Ramsey County will hold a public informational meeting for the demolition and remediation project on Tuesday, May 7, 5:00 to 7:00 pmin the Marsden Room at the Ramsey County Public Works Facility. Postcards have been mailed to residents in Arden Hills and surrounding communities. City of Arden Hills Economic Development Commission May 1, 2013 12 Page of City of Arden Hills Economic Development Commission August 17, 2011 22 Page of  MEMORANDUM DATE:EDC Agenda Item 5.B May 1, 2013 TO: Economic Development Commission Chair and Commissioners FROM: Jill Hutmacher, Community Development Director SUBJECT: Revolving Loan Fund The attached information was presented to the Economic Development Authority on April 29, 2013. At the May 1, 2013, EDC meeting, staff will present background information on the Revolving Loan Fund and summarize the EDA’s April 29 discussion. Attachment Staff memo dated April 29, 2013 Arden Hills Revolving Loan Fund Guidelines City of Arden Hills Economic Development CommissionApril 3, 2013 11 Page of MEMORANDUM DATE: April 29, 2013 TO: EDA President and Commissioners FROM: Matthew Bachler, Community Development Intern SUBJECT: EDARevolving Loan Fund Requested Action Provide direction on the future goals of the EDA Revolving Loan Fund. Summary The EDARevolving Loan Fund (RLF) was establishedby the City in order to participate in the Minnesota Investment Fund (MIF) programmanaged by the Department of Employment and Economic Development(DEED). Grant funding received throughMIF in 1998 was used to provide Cardiac Pacemakers, Inc.with a low-interest loan for an expansion project. A $100,000 portion of thisloan was repaid to the Cityand was used to capitalize the RLF.The CPI loan repayment and investment interest earnings are the only revenue sources currently represented in the RLF’s cash balance. TheexistingRLFguidelines shouldbe updated to meet State Business Subsidy Lawrequirements.Revisions to the RLF guidelines must be approved by DEED. Background The Department of Employment and Economic Developmentestablishedthe Minnesota Investment Fund to provide industrial, manufacturing, and technology-related businesses with low-cost financing to help create or retain high quality jobs. Loans are awarded to and administered by local units of governments; to qualify for financing, a business must complete a joint application with a local government. Generally, the program allowslocal governments to retain a portion of theloan repayment to create an RLF. In January 1997, the City Council authorized the City Administrator to execute an MIF loan agreement with Cardiac Pacemakers, Inc. (CPI). A$100,000portion of thestate financing wasin the form of a low-interest loan that was repaid to the City. This loan hada 5-year term at a3% interestrate.The proposed use for the funds was a 47,000 square foot expansion project to enhance research and development programs at CPI. The company estimated an additional 200 high-skill jobs would be created as a direct result of the investment. ______________________________________________________________________________ City of Arden Hills Economic Development Authority Meeting April 29, 2013 12 Page of Prior to dispersing theMIF grant,the State required Arden Hills to adoptguidelines for the revolving loan fund(attached).Theregulations were designed to set parameters on the use of fundsto ensure consistency with the City’s economicdevelopment policies.The RLF guidelines wereapproved by the EDAon August 25, 1997 and by the City Council on May 26, 1998. The CPI loan principal plus accrued interest was paid off entirely as of December 31, 2003.At this point the RLF cash balance was approximately $140,000. This number represents the CPI loan principal, interest payments, and investment interest earnings. TheRLFbalance was estimated to be $154,969 as of December 31, 2012.Growth in cash reserves in the RLF between 2004 and 2012 was derived entirely from investment interest earnings. The City did administer a second MIF loan through the RLF for Guidant in 2004. However, none of the funds currently in the RLF are associated with this agreement, as the City forgave its portionof the Guidant loan. In April 2004, the City executed an agreement with DEED to provide the company with $250,000 for the purchase of machinery and equipment. The City committed to forgive its $100,000 portion of the loan if the company met certain job creation numbers. Guidant complied with these set terms and its portion of the loan was subsequently forgiven. On April 20, 2005, the City transferred the repaid loan principal and interest ($150,083.30) from the RLF to DEED. Revolving Loan Fund Guidelines Theuseof the EDA Revolving Loan Fundis regulated by the Minnesota Business Subsidy Law. Loans of less than $75,000, however,are not considered business subsidies. The EDA may want to consider revisions to the RLF guidelines that target loan funds to specific types of economic development projects. At a minimum, the RLF guidelines should be revised to state that the Business Subsidy Law applies to RLF loans. Any revisions made to the RLF guidelines will need to be reviewed by the State Department of Employment and Economic Development prior to EDA and City Council approval. As staff drafts revisions to the RLF guidelines, guidance on the following questions is requested: What are some types of business development projects the City would like to finance using RLF loans? What steps could be taken to educate the local business community about the availability of RLF loans and other public financing tools? Do the existing RLF guidelines adequately address the City’s goals and objectives regarding the use of RLF loans? Recommended Action Direct staff to draft revisions to the Revolving Loan Fund Guidelines in accordance with EDA discussion on the goals of the RLF. Attachments City of Arden Hills, EDA Revolving Loan FundGuidelines ______________________________________________________________________________ City of Arden Hills Economic Development Authority Meeting April 29, 2013 22 Page of Attachment A