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Home My WebLink About#02 Navigating Your Competitive Future (Urban Land Institute Panel)STAFF REPORT DATE: October 8, 2019 PRESENTATION/DISCUSSION AGENDA ITEM: Urban Land Institute Workshop-Navigating Your Competitive Future SUBMITTED BY: Kristina Handt, City Administrator BACKGROUND: In May Gordon Hughes, Urban Land Institute (ULI) MN, reached out to city staff about their free interactive workshop called Navigating Your Competitive Future. The workshop is comprised of four parts: an overview of national and state trends affecting cities, a review of community change data particular to Lake Elmo, a panel discussion and interaction between the panel and workshop attendees. Panelists are ULI MN real estate professionals composed of developers, public finance experts and planners. These workshops have been held in over 70 Minnesota cities. Staff met with Gordon and the panelists over the summer to provide some background on Lake Elmo. ISSUE BEFORE COUNCIL: Council, Planning Commission and Economic Development Authority members to receive feedback from a panel regarding development in Lake Elmo. PROPOSAL DETAILS/ANALYSIS: The workshop is expected to last two hours. It will begin with some background data compiled from ULI staff. A copy of their presentation is included in your packet. Then panelists will respond to questions about development (commercial, business, and multi-family housing). The members of the panel are:  Kendra Lindahl, Principal, Landform  Tony Kuechle, President of Development, Doran Companies  Keith Ulstad, Senior Vice President, United Properties  Dan Hebert, Vice President of Commercial Accounts, Gaughan Companies ATTACHMENTS:  Copy of Presentation Handout City of Lake Elmo October 8, 2019 ABOUT ULI MN MISSION Urban Land Institute Minnesota engages public and private sector leaders to foster collaboration, share knowledge, and join in meaningful strategic action. VISION Thriving communities. 2 REGIONAL COUNCIL OF MAYORS Minneapolis, Saint Paul and 58 other municipalities are represented in the RCM. “The RCM provides a nonpartisan platform focused on building civic trust through relationships, inquiry, partnerships and action.” FROM 8 MAYORS IN 2004… TO 55 MAYORS IN 2018 3 ADVISORY SERVICES: IT’S ABOUT TRUST Trust is developed across public and private sectors. "The workshops are opportunities for City officials to ask questions of real estate professionals in an environment where neither party has anything at risk. This is a new kind of civic space. The developers are neither seeking anything nor defending anything and City officials are not under any pressure. It allows for a spirit of inquiry and exploration that is too often not possible when both parties are advocating specific positions." ULI MN Governance Chair John Breitinger Cushman & Wakefield/Northmarq More than 83 cities have completed ULI Minnesota workshops. 4 12 34 DEMOGRAPHICS MARKET FORCES TECHNOLOGY RESILIENT INFRASTRUCTURE FOUR MAJOR CHANGE DRIVERS 5 DEMOGRAPHICS GENERATIONAL SHIFTS AGING POPULATION CULTURAL DIVERSITY 6 MILLENNIALS AND BOOMERS COMPRISE 150 MILLION AMERICANS US Census estimates & Minnesota State Demographic Center, August 2015 7 23%23%23%23% 20% 19% 23% 25% 10%10% 0% 5% 10% 15% 20% 25% 30% United States Minnesota Gen Z Under 18 Millennials 18 to 34 Gen X 35 to 50 Baby Boomers 51 to 69 Silent Generation 70 years and older Under 18 population will decline from 23% to 20% of population Over 65 will grow from 17% to 22% "These things usually creep along at the speed of a glacier. Not so with aging. In demographic terms, this is a tsunami. It doesn't get much bigger than this.” Thomas Gillaspy Former MN State Demographer MN’S OVER 65 POPULATION TO EXCEED SCHOOL-AGE BY 2020 U.S. Census Bureau, Decennial Census and Population Estimates. Forecasts: Minnesota State Demographic Center. 65 PLUS 5 TO 17 8 PROJECTED MN POPULATION: AGES 5–17 AND 65+ 500,000 700,000 900,000 1,100,000 1,300,000 1,500,000 1,700,000 56 78 Arthur C. Nelson, TWIN CITIES Metropolitan Council Area Trends, Preferences, and Opportunities: 2010 to 2020, 2030 and 2040, 2014. MOST NEW HOUSEHOLD GROWTH WILL BE AGES 65+ 9 80% 21% NET HOUSEHOLD GROWTH: 1990–2010 Under 35 35–64 Over 65 6% 9% 85% NET HOUSEHOLD GROWTH: 2010–2040 Under 35 35–64 Over 65 MINNESOTA IS BECOMING MORE CULTURALLY DIVERSE Integrated Public Use Microdata Series from the U.S. Census Bureau, American Community Survey 10 CHANGE IN RACE/ETHNIC COMPOSITION OF TWIN CITIES 7%10%11%6%8%10%5% 8% 11% 80% 71%65% 0% 20% 40% 60% 80% 100% 2005 2020 2035 Black Asian and Hawaiian or other Pacific Islander American Indian or Alaska Native alone Two or More Races Hispanic or Latino White All Communities of Color MARKET FORCES MSP REGION COMPARATIVE ADVANTAGES COST-BURDENED HOUSEHOLDS HOUSING AND JOBS MISMATCH WORKFORCE SHORTAGES COMMERCIAL INDUSTRY TRENDS 11 TOP COMPARATIVE ATTRIBUTES OF THE MSP REGION 1. HOUSING: Availability and affordability of housing 2. PROXIMITY: How close to my opportunity is it? 3. MOBILITY: Do I have options to get around? 4. CONNECTIVITY: Can I meet people or be near friends and family? 5. PARKS AND GREEN SPACE: Can I enjoy the outdoors? 12 ALSO RATED HIGHLY: Access to restaurants/bars, arts/culture, safety SITUATIONALLY IMPORTANT: Walkability, school district, bike paths Source: GREATER MSP (Make It. MSP. “MSP Welcome Survey,” 2016) 910 11 12 WHERE THEY LIVE HOW THEY SEE THEMSELVES MILLENNIALS LIVE IN COMMUNITIES OF ALL TYPES AND WANT URBAN-LIKE AMENITIES 13 Downtown/near downtown 13% Other city neighborh oods 35% Dense, older suburbs 13% Newer suburbs 15% Small towns 17% Rural 7% Small-Town Folk 26% Suburbanites 36% City People 37% 14 FEWER RENTERS PLAN TO BUY IF THEY MOVE Source: Freddie Mac Survey of Renters, 2018 15Source: Freddie Mac Survey of Renters, 2018 ESSENTIAL WORKFORCE HAS THE MOST DIFFICULTY AFFORDING RENT MISMATCH BETWEEN AFFORDABLE HOUSING AND LOW- WAGE JOBS 16 Sources: Census LEHD, 2014; Met Council housing affordability estimates 2015, 5 mile radius 13 14 15 16 PROJECTED SHORTFALL OF 100,000+ SKILLED WORKERS BY 2020 17 BABY BOOMER RETIREMENTS STAGNANT LABOR FORCE GROWTH CHALLENGES RECRUITING TO THE REGION 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 $0 $20 $40 $60 $80 $100 $120 2008 2009 2010 2011 2012 2013 2014 2015 2016 EST NE W R E T A I L S Q U A R E F E E T (M I L L I O N S ) E- C O M M E R C E S A L E S $ B E-Commerce Sales in $B New Retail Space in Millions of Square Feet COMMERCIAL INDUSTRY TRENDS 18 E-COMMERCE CONTINUES TO GROW RAPIDLY AS WE BUILD FEWER NEW BRICK AND MORTAR SPACES Sources: New retail space data from JLL Q2 2016 Retail Outlook. E-Commerce sales data from US Economic Census TECHNOLOGY AUTOMATION AND JOBS THE SHARING ECONOMY NEW TECHNOLOGY, REGULATION AND CITIES 19 AUTOMATION IS AFFECTING JOBS AND CREATING CHALLENGES AND OPPORTUNITIES 20 17 18 19 20 THE SHARING ECONOMY IS CHANGING RETAIL AND SERVICES REGULATION IS PLAYING CONSTANT CATCH-UP 21 DRIVERLESS VEHICLES ARE ADVANCING QUICKLY AND ARE A HIGH PRIORITY FOR CAR COMPANIES 22 AUTONOMOUS VEHICLES WILL CREATE LAND USE OPPORTUNITIES AND CHALLENGES 23 RESILIENT INFRASTRUCTURE REUSE OF INDUSTRIAL BUILDINGS DEFERRED MAINTENANCE TRAILS, PATHS AND SIDEWALKS 24 21 22 23 24 25 WAREHOUSE/DISTRIBUTION FACILITIES ARE MUCH LARGER AND REQUIRE GREATER CLEAR HEIGHTS AGING INFRASTRUCTURE AND DEFERRED MAINTENANCE 26 STORMWATER OVERLOADS SEWER SYSTEM FAILURES TRAILS, BIKE PATHS AND SIDEWALKS IMPROVE CONNECTIVITY, INCREASE PROPERTY VALUES, AND ATTRACT ECONOMIC DEVELOPMENT 27 WHAT DOES ALL OF THIS MEAN FOR THE FUTURE OF COMMUNITIES? 28 25 26 27 28 DEMOGRAPHICS HOUSING STOCK AND TENURE EMPLOYMENT AND LABOR INCOME AND WAGES 29 LAKE ELMO COMMUNITY DATA DEMOGRAPHIC CHANGE BY RESIDENT AGE 30 %Total ’17 21% 13% 9% 29% 24% 4% 18% GROWTH (2000-10) 7% GROWTH (2010-17) Sources: Census 2000, 2010, 2017 ACS 0 500 1000 1500 2000 2500 3000 Under 15 15 to 24 25 to 34 35 to 54 55 to 74 75 and Over 2000 2010 2017 19% 2% 29% -9% 23% 17% 6,863 8,069 8,621 TENURE AND HOUSING STOCK 31 81% Single Family Detached 4% Attached Multifamily (1-4 units) 3% Apartments (5 + units) Sources: ACS 2017 Census Estimate 92% 5%3% Sources: ACS 2017 Census Estimate 12% Manufactured Home PEER COMMUNITY TENURE STATUS BREAKDOWN 32Sources: ACS 2017 Census Estimate 89% 73% 83% 84% 92% 6% 23% 10% 12% 5% 5% 4% 7% 4% 3% 0% 20% 40% 60% 80% 100% Victoria Oakdale Orno Hugo Lake Elmo Vacant Renter Owner 29 30 31 32 HOUSING VALUES AND RENT 33 15% 6% 48% 31% Owner Occupied Housing (2017 ACS) Less than $100,000 $100,000-$199,000 $200,000-$499,000 $500,000 or more 43% 21% 36% Gross Rent (2017 ACS) Less than $500 $500 - $999 $1,000 - $1,499 $1,500 or more HOUSING AFFORDABILITY AT AMI LEVELS 34 13%3% 13% 71% 30% AMI or Less 31% to 50% AMI 51% to 80% AMI Over 80% AMI 7.3% LAKE ELMO’S POPULATION BELOW THE POVERTY LEVEL 35% of Cost Burdened Households ( 2000 census, 2010, 2017ACS) 18% 33% 25% 19% 32% 24% 0% 53% 50% 0% 10% 20% 30% 40% 50% 60% 2000 2010 2017 Cost Burdened Households All Households Owner Households Renter Households WAGES AND INCOME IN PEER COMMUNITIES 36 $101,560 $88,800 $130,300 $68,500 $140,900 $54,055 $46,468 $53,960 $50,675 $41,829 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 Lake Elmo Hugo Orno Oakdale Victoria Median HH Income Average Wages Paid by Employers Jobs to Resident Mismatch 33 34 35 36 LAKE ELMO’S EMPLOYMENT BY INDUSTRY Total Jobs = 2,841 37 Finance, Insurance, Real Estate 27% Professional, Technical 12% Accomodation, Food Service 12% Retail Trade 10% Health Care and Social Assistance 10% Education Services, Public Admin 10% Construction 3% Manufacturing 2% Transportation, Warehouse 2% Arts, Entertainment, Recreation 1% Wholesale Trade 0% All Other Industries 10%CITY JOBS/RESIDENT WORKERS 38 Employed in LAKE ELMO Live Outside (2,217) Live in LAKE ELMO Employed Outside (3,910) Live and Work in LAKE ELMO Source: U.S. Census Bureau, OnTheMap Application and LEHD Origin-Destination Employment Statistics (Beginning of Quarter Employment, 2015). (151) WHERE LAKE ELMO WORKERS LIVE 39 2,841 TOTAL 8%7% 6% 6% 5% 3% 2% 2%1% 60% Woodbury Mpls & St Paul Lake Elmo Stillwater Oakdale Cottage Grove Maplewood Hudson White Bear Lake All Other Cities Source: U.S. Census Bureau, OnTheMap Application and LEHD Origin-Destination Employment Statistics (Beginning of Quarter Employment, 2017). WHERE LAKE ELMO RESIDENT WORKERS COMMUTE TO 40 4,061 TOTAL 29% 6% 5% 4%3%3%2%2%2% 44% Mpls & St. Paul Woodbury Stillwater Lake Elmo Oakdale Bloomington Eagan Oak Park Heights Maplewood All Other Cities Source: U.S. Census Bureau, OnTheMap Application and LEHD Origin-Destination Employment Statistics (Beginning of Quarter Employment, 2017). 37 38 39 40 WHAT CAN YOU DO? WHAT CAN WE DO TOGETHER? 41 INDUSTRY LEADER PANEL DISCUSSION 41 42