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HomeMy WebLinkAbout01-26-15 'It -AIPEN�HILLS Approved: April 27, 2015 CITY OF ARDEN HILLS,MINNESOTA ECONOMIC DEVELOPMENT AUTHORITY (EDA)JOINT MEETING WITH THE ECONOMIC DEVELOPMENT COMMISSION (EDC) JANUARY 26, 2015 6:00 PM—ARDEN HILLS CITY HALL CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, President Grant called to order the Economic Development Authority meeting at 6:07 p.m. Present: EDA President David Grant; EDA Commissioners Brenda Holden, Fran Holmes, Dave McClung, and Robert Woodburn Absent: None Also present: Secretary Patrick Klaers; Executive Director Jill Hutmacher; Associate Planner Matthew Bachler; City Clerk Amy Dietl; and Economic Development Commission(EDC) Members Steve Heikkila, Dan Erickson and David Radziej 1. APPROVAL OF AGENDA MOTION: EDA Commissioner McClung moved and EDA President Grant seconded a motion to approve the meeting agenda as presented. The motion carried unanimously (5-0). 2. APPROVAL OF MINUTES A. December 8, 2014 MOTION: EDA Commissioner Holden moved and EDA Commissioner McClung seconded a motion to approve the December 8, 2014, Economic Development Authority Meeting minutes as presented. The motion carried unanimously (5_0). ARDEN HILLS EDA JOINT MEETING WITH EDC—JANUARY 26, 2015 2 3. NEW BUSINESS A. EDC 2014 Annual Report and 2015 Work Plan Executive Director Hutmacher stated that the EDA approved the 2014 EDC Work Plan at the January 27, 2014,joint meeting with the EDC. The EDC made significant progress on its 2014 goals as summarized below. New Member Recruitment • EDC members continue to recruit new members. Business Retention and Expansion Program • Attended training offered by University of Minnesota Extension. • Met with several communities which have completed BRE programs. • Discussed program objectives and processes. • Obtained quotes from University of Minnesota Extension and St. Paul Area Chamber of Commerce. • Prepared recommendation for EDA. Marketing and Outreach • Worked with Newsletter Committee to write and publish business-related newsletter topics. • Preparing a business inventory and contact list for the Red Fox/Grey Fox Business District. • Planned and promoted State of the City events on September 18 and 23. • Drafted script for City video tour. Worked with CTV on filming locations and Mayoral introduction/wrap-up. • Working with CTV on editing, voiceover, and scheduling testimonials for City video tour. • Working with SPACC to schedule business visits. Revolving Loan Program • Research on existing revolving loan funds completed. • Communicated with DEED to determine program requirements. • Met with several local commercial bankers and SBA loan providers. • Provided information to EDC and EDA. • Working with lenders to determine underwriting, program costs, and processes. Executive Director Hutmacher reported that the EDC approved their 2015 Work Plan on December 3, 2014. She reviewed the proposed work plan and noted that EDA review and approval of the work plan was requested. ARDEN HILLS EDA JOINT MEETING WITH EDC—JANUARY 26, 2015 3 EDC Commissioner Heikkila discussed a video that the Commission was working on. He explained that this professional video would be posted on the City's website for viewing in the near future. EDA Commissioner Holden asked if the EDC has received any feedback on the newly installed gateway signs. She believed that the signs were a great addition to the City and that the EDC played an important role with this project. EDC Commissioner Heikkila agreed that the signs are a positive statement for the City. EDA President Grant believed it was important to hear from area residents and local businesses on projects and activities. MOTION: EDA Commissioner McClung moved and EDA President Grant seconded a motion to approve the 2015 EDC Proposed Work Plan as presented. The motion carried unanimously (5-0). B. Business Retention Expansion Program Associate Planner Bachler stated that the Economic Development Commission Work Plan for 2014 included completing research on Business Retention and Expansion (BRE) programs and presenting recommendations to the EDA to gauge interest in developing a formal program. Over the course of the year, staff and the EDC discussed the role of a BRE program in the context of the City's economic development goals and how this type of program should be structured to ensure successful outcomes. Associate Planner Bachler indicated that retaining and facilitating the expansion of existing businesses is an important component of any city's strategic plan for economic development. Studies have shown that as much as 80 percent of new jobs are created by existing businesses rather than by new businesses attracted to a community. From a financial and staff-time perspective, focusing on the growth of existing businesses can be more efficient than enticing a new business to move into a community with public financing commitments or other public subsidies. BRE programs help address these broad economic development policies as well as the following specific goals: • Demonstrate to businesses that the community appreciates their presence. • Help existing businesses solve immediate problems. • Increase businesses' ability to compete in regional, national, and global markets. • Establish a strategic plan for economic development. • Build community capacity to sustain growth and development over the long term. Associate Planner Bachler stated that BRE programs are usually organized around a phased process of completing research, analyzing results and identifying issue areas, and implementing priority projects. Before this, however, the community needs to coalesce around a set of goals for ARDEN HILLS EDA JOINT MEETING WITH EDC—JANUARY 26, 2015 4 the BRE initiative. For example, programs can be city-wide efforts or can have a more limited scope looking at a specific industry sector, such as manufacturing, or a particular business district. Associate Planner Bachler reported that the focus of step one is gathering information on current conditions in the business community. This is completed by relying on existing economic data sources and conducting interviews with selected businesses using a survey instrument. A leadership group comprised of elected officials, city staff, residents, and members of the business community is usually responsible for completing these interviews. In step two, community strengths and weaknesses are identified through an analysis of the collected research. This review process also allows cities to address short-term problems that may come up in the business interviews, such as the threat of a business relocating to another community. A summary report is completed that highlights issue areas and makes suggestions for actions to respond. Associate Planner Bachler indicated that the final step of a BRE program is implementation. Following the review of the summary report and deliberation by the City Council, priority projects are selected. Publicity is important during this phase to demonstrate to the business community that concrete steps are being taken to address their concerns. Following the completion of these steps, it is beneficial for a community to develop a business visitation cycle in order to maintain an ongoing BRE effort. Staff completed a ten-week long course with the University of Minnesota Extension in 2014 on developing a local BRE program. This class focused on the economic benefits of undertaking these initiatives and on the BRE services available through the Extension office. Following the completion of this course, staff contacted three cities in the metro that have contracted with the Extension on BRE programs to ask for feedback on these efforts. Staff also reached out to the Saint Paul Area Chamber of Commerce (SPACC), which has a long history of providing BRE services to the communities it serves in suburban Ramsey County. As one of the founding members of the Minnesota Chamber of Commerce "Grow Minnesota!" BRE program, they have helped contribute to more than 8,200 business visits, which have resulted in direct assistance to over 1,200 companies. Associate Planner Bachler commented that the EDC and staff evaluated preliminary BRE program proposals from both the University of Minnesota Extension and SPACC. The initial cost estimate provided by the Extension for the program was approximately $8,800. SPACC has proposed a not-to-exceed cost of $5,000. For several reasons, the proposal from SPACC was selected as a better fit for Arden Hills. Key advantages of the SPACC proposal are: • A significant advantage to working with SPACC is that the Chamber has an established relationship with many businesses and other stakeholders in Arden Hills and will be better positioned to carry out the business outreach efforts. SPACC will also be able to leverage its existing databases to compile a comprehensive list of businesses in the City and prioritize which companies to visit. ARDEN HILLS EDA JOINT MEETING WITH EDC—JANUARY 26, 2015 5 • BRE efforts can require a large time commitment from the leadership group. SPACC anticipates that it will be able to provide a program overview and complete the training for the leadership group over the course of a one hour session. • SPACC would use a survey instrument developed by the Minnesota Chamber of Commerce and Greater MSP. This survey is relatively short and direct, which is important considering the limited amount of time business owners have. Additionally, data collected on Arden Hills businesses could be compared with data collected from other communities using this same survey. • The proposal from SPACC emphasizes putting in place a sustainable approach for on- going BRE efforts after the first round of business visits is completed. This is critical as cities need to regularly assess conditions in their business community and engage with new businesses that have recently relocated to the City. Associate Planner Bachler requested that the EDA approve the Business Retention and Expansion Service Proposal submitted by SPACC. He explained the EDC reviewed this proposal at their meeting on October 1, 2014, and voted to recommend that the EDA contract with SPACC to implement a Business Retention and Expansion program. Jonathan Weinhagen, Vice President of St. Paul Area Chamber of Commerce, thanked the EDA and EDC members for their time. He was excited to talk about business retention with this group and commended the City for engaging in this conversation prior to the development of TCAAP. He discussed the role the City can take within the initiative along with the information that should be gathered over the next year. He then provided comment on the two phases for SPACC's business retention and expansion plan. EDA Commissioner Holden questioned what would be the size of the businesses contacted. Mr. Weinhagen commented that the program would focus on the growth industries and businesses that are in Arden Hills. The goal would be for the City and staff to build long-term relationships with these local businesses. This would help ensure that business owners would contact the City first if additional space or an expansion was needed. EDA President Grant inquired how the City would measure the success of this program. Mr. Weinhagen stated that once the City has identified the core set of businesses and a relationship has been established, this would be considered a success. He indicated that long term, the program would provide the City with powerful business relationships and a sustainable business retention strategy. EDA Commissioner Holmes discussed Smiths Medical noting that this company recently relocated to Plymouth, Minnesota due to economic incentives that were provided by that community. She asked if the proposed plan would assist in avoiding this scenario in the future. ARDEN HILLS EDA JOINT MEETING WITH EDC—JANUARY 26, 2015 6 Mr. Weinhagen stated that he believed that a BRE program could have helped with this situation because it would have established a relationship between Smiths Medical and the City of Arden Hills. It was his hope that after the BRE plan was in place, the first call for companies in need of additional space would be to the City and not to a broker. Further discussion ensued regarding the Smiths Medical situation, and he noted that relationships play a major role in where companies decide to locate. Commissioner Heikkila stated that the $5,000 cost for the BRE plan was quite small when compared to the loss of an Arden Hills business. Commissioners Erickson and Radziej stated their support for undertaking the BRE program in 2015. EDA Commissioner Holden wanted to see the information gathered for the plan remain secure in the City for years to come. MOTION: EDA Commissioner Holden moved and EDA Commissioner McClung seconded a motion to approve the Business Retention and Expansion Service Proposal submitted by the St. Paul Area Chamber of Commerce (SPACC). The motion carried unanimously (5-0). C. 2015 EDA Work Plan Secretary Klaers stated that last year the EDA met four times. In January, the EDA met jointly with the EDC to review the activities undertaken the previous year and to review the upcoming work plan. In April, the EDA discussed the EDA Budgets and the Revolving Loan program. Also in April, the EDA discussed having fewer EDA meetings while the City Council concentrates on and dedicates time to the TCAAP redevelopment project. In September and in December,the EDA considered the 2015 EDA budgets. Secretary Klaers commented that, with the April 2014 EDA discussion in mind, he was looking for EDA input on an acceptable 2015 work plan. Items that could be included are as follows: TIF District 42 — This District is scheduled to be decertified in 2015. Staff will monitor this District and recommend EDA action as necessary to be in compliance with State law. TIF District #3 — This District is for the Cottage Villas project. This District has up to $500,000 that can be used for qualified housing projects. The EDA should consider options for how to best use these funds. The District is scheduled to be decertified in 2019. EDA General Fund Operating Budget — The 2016 EDA budgets will need to be reviewed and approved. A sustainable revenue source needs to be identified to finance EDA operating expenses. These operating expenses are mainly: staff time and overhead, supplies, and contracts for services. ARDEN HILLS EDA JOINT MEETING WITH EDC—JANUARY 26, 2015 7 Business Expansion and Retention Program — Subject to EDA approval, the EDC is planning to take the lead with the Business Expansion and Retention (BRE) program. In order for the BRE to be successful, EDA support and involvement will be necessary. Revolving Loan Program — The update of the Revolving Loan program has not been completed. Staff anticipates getting final recommendations to the EDA in 2015. MOTION: EDA Commissioner McClung moved and EDA President Grant seconded a motion to approve the 2015 EDA Work Plan as presented and discussed. The motion carried unanimously (5-0). 4. EDA COMMISSIONER COMMENTS None. 5. ADJOURN MOTION: EDA President Grant moved and EDA Commissioner McClung seconded a motion to adiourn the Economic Development Authority meeting. The motion carried unanimously (5-0). EDA President Grant adjourned the special Economic Development Authority meeting at 6:59 p.m. Jill utmac er David Grant E ecutive Director EDA President