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HomeMy WebLinkAbout01-15-2016 Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota Regular Meeting January 15, 2016 City of Mounds View, Council Chambers 2401 County Road 10, Mounds View, MN 55112 1. CALL TO ORDER Chair Jason Helgemoe called the meeting to order at approximately 7:30 a.m. 2. ROLL CALL Members Present: Chair, Jason Helgemoe, Vice Chair, Jim Freichels, Commissioners, Jessica Rieland, Dan Larson, Royal Dahlstrom & Laurie Shoop Members Absent: Gary Stevenson Staff Present: Business Development Coordinator, Brian Beeman & City Administrator, Jim Ericson Meeting Attendees: N/A 3. APPROVAL OF JANUARY 15, 2016, AGENDA Motion/Second: Commissioner Freichels moved and Commissioner Shoop seconded the approval of the January 15, 2016 EDC agenda. Motion Carried: 6 Ayes, 0 Nays 4. APPROVAL OF DECEMBER 18, 2016, EDC MINUTES Motion/Second: Commissioner Larson moved and Commissioner Dahlstrom seconded the approval of the December 18, 2015 EDC minutes, as presented. Motion Carried: 6 Ayes, 0 Nays 5. EDC BUSINESS Administer Oath of Office Chair Helgemoe and Vice Chair Freichels took the oath of office. Commissioner Stevenson will conduct the oath of office at the next meeting. Elect Chairperson and Vice Chairperson Next, Chair Helgemoe asked for nominations of Chair and Vice Chair. Commissioner Freichels suggested that Jason Helgemoe remain as Chair. Chair Helgemoe asked for EDC Minutes January 15, 2016 Page 2 of 8 nominations of Vice Chair. Hearing none, Helgemoe asked if Freeichels would accept the position. Freichels confirmed that he would accept the positon. Motion/Second: Commissioner Freichels moved and Commissioner Larson seconded the approval of Commissioner Helgemoe as the Chair and Commissioner Freichels as Vice Chair. Motion Carried: 6 Ayes, 0 Nays Review Combined Tax Abatement &TIF Policy (Public Assistance Policy &Application) Chair Helgemoe asked Business Development Coordinator Beeman to provide a background to the Commission. Beeman informed the Commission that the Business Subsidy Policy will be moving forward January 25, 2016 in a joint Council/EDA meeting and Public Hearing. The new Public Assistance Policy & Application will be reviewed February 1, 2016 at a Council Workshop meeting then if confirmed; it will go to the EDA for approval at their February 8, 2016 meeting. No Public Hearing will be required for the new Public Assistance Policy. Beeman explained that both the city's legal and financial consultants suggested that the TIF and Tax Abatement Policies be combined into one policy, as this makes it simpler for city staff, developers, consultant, and all involved, and it is what the consultants are seeing as a trend in other metro city's policies. The TIF policy was last updated in 2000 and the Tax Abatement Policy was last updated in 2003. The new combined policy is now called, City of Mounds View Economic Development Authority, Public Financing Policy & Application. Ehler's, the city's financial consultant, combined the city's existing policies and is suggesting the EDC and EDA review the new version for consideration of approval at the February 8, 2016 EDA meeting. By combining the two policies, the new policy is condensed into essentially five pages with the rest being the application and criteria for scoring. This simplifies the policy and attempts to reference Minnesota State Statues as much as possible so that when the statutes change, the policy also changes automatically without the need to change the policy each time. Section I Policy Purpose, of the new policy is very similar to the original policies. Any reference to TIF or Tax Abatement was changed to Public Financing. Section II Objectives for the Use of Public Financing was simplified from the former technical and detailed language naming square footage etc. to a more basic guideline providing an overview for policy makers. Other areas of the old policy referenced TIF pooling of funds and other confusing concepts that are often changed by legislators. The consultants felt that getting too technical in policies will only confuse and convolute the intent of the policy. Section III dealing with Business Subsidies was cleaned up by removing redundancies and simplifying the language to sync with the Business Subsidy Policy. Section IV and V are virtually the same as the old policies. In Section VI Application Process for Public Financing, the fees have been updated to a $3000 non-refundable application fee. This fee will be used for any type of public financing and will cover the initial legal and financial consulting fees to determine if the project qualifies or not. If the project doesn't qualify, the developer isn't out much financially. If the project does qualify EDC Minutes January 15, 2016 Page 3 of 8 and it is determined that it should move forward, then the developer would submit the $10,000 deposit. This is when the financial consultants and legal team would conduct a detailed analysis of financial statements and other documents including the "But-For" analysis and other required documentation. An example of the "But-For" analysis is found on page 17. Ehler's changed the Total Return on Equity column with assistance from 12% which they felt was unrealistic in the current market to the 7.93%. Ehler's doesn't recommend projects that would provide more than a 12% return anyway. Overall, Ehler's ended up combining the TIF and Tax Abatement application. The Tax Abatement application had a stand-alone agreement with the developer and the TIF application had a section where the developer was required to sign giving approval to move forward. The application was combined to use the signature approach. Ehler's also kept the housing and commercial/industrial development worksheets separate because the commercial/industrial worksheet is heavy on the job creation scoring while the housing worksheet is focused more on the added valuation, livability, location, amenities, etc. Ehler's also had some concern about the Confidentiality Agreement on page 15 stating that while the initial information the developer submits could be considered confidential, at some point when the project has been approved and/or completed, some of the developer's information may be considered public. Staff had the city's attorney review the agreement and it was determined that it is acceptable and should remain in the application packet. Beeman stated that staff feels this is a good policy and a good way to approach the policy by combining them into one five page policy. The combined policy simplifies it for everyone involved. Beeman informed the EDC that if they see anything in the policy that is a concern, is glaring, or would raise any red flags then this is a good time to bring up those concerns before the policy goes to the EDA for approval. This policy would not require a Public Hearing to be approved. However, the Business Subsidy does require a Public Hearing to be approved. The Business Subsidy also is virtually 50% verbatim from Minnesota State Statute. The combined policy has more flexibility in what local governments can formulate as their policy. However, cities must still closely follow the State Statutes. Chair Helgemoe asked for the next steps in the process. Beeman informed the EDC that if there were not changes then a motion would need to be made recommending the combined policy to the EDA for approval. Vice Chair Freichels asked how the combined policy relates to other cities and their policies. Beeman stated that this policy is close in content to many other cities because Ehler's and Kennedy & Graven work with several other cities in developing their policies and they are able to see the most current versions and trends and they ensure that the policy is following the most current State Statutes. Both consultants have also recommended that the TIF and Abatement policies be combined because this is what they are seeing other cities do in order to simplify the process. Commissioner Dahlstrom asked if the EDC could set a date to review the document providing an example of every two, five or seven years. Beeman stated that he tries to watch any statutes that are related to economic development as well as Ehler's and the EDC Minutes January 15, 2016 Page 4 of 8 city's legal team. Beeman also hears regular updates from the Economic Development Association of Minnesota. However, the city hasn't set a formal review date for these policies. Beeman said establishing a regular review date is a good idea and he will continue to stay updated as much as possible to changing Statutes. Dahlstrom suggested that regular updates may be less costly than waiting a long time then having to redo the entire policy. Helgemoe stated that even though the review of the policies is more of an internal process and the attorneys review the statutes, it is ultimately up to staff to make the changes. Beeman suggested that the EDC place it as one of the goals for the 2016 EDC list of goals that will be discussed at the February meeting. Helgemoe thought this was a good idea to place the review of policies as one of the goals. Beeman agreed that this is something the EDC should discuss at the next meeting. Helgemoe asked for any other comments on the policy. Hearing none, Commissioner Freichels made a motion. Motion/Second: Commissioner Freichels moved and Commissioner Dahlstrom seconded the motion recommending that the combined policy move forward to the EDA for consideration. Motion Carried: 6 Ayes, 0 Nays 6. REPORTS OF STAFF Crossroad Point Redevelopment Prosect Business Development Coordinator, Beeman provided the Commission with an update on the Crossroad Pointe redevelopment site. Beeman stated that staff has met with The Beard Group to discuss the Preliminary Development Agreement. The Beard Group was hung up on a few of the clauses but has since agreed to move forward in recommending the Predevelopment Agreement to the EDA on January 25. Helgemoe asked if The Beard Group was the only developer for the site. Beeman informed the EDC that he had contacted approximately 40 or so developers with about twelve showing interest and only one actually submitting a proposal. Helgemoe asked if The Beard Group was one of the developers that the city had toured last summer. Beeman confirmed that The Beard Group was the developer that the group had toured at the Osseo site. Beeman stated that after the joint meeting with Council, EDC, and the Planning Commission, that The Beard Group is the developer that the group seemed to like the most as far as the product and since that time, the Council has instructed staff to work with the developer to bring forward a Predevelopment Agreement. Beeman clarified that the Predevelopment Agreement protects the developer buying them time to do their due diligence so another developer can't come in after the proposal deadline. The agreement for the most part is non-binding as for the terms, but rather identifies main areas where both parties can preliminarily come to a consensus before the formal Development Agreement is finalized. EDC Minutes January 15, 2016 Page 5 of 8 Helgemoe asked about the timeline for development. Beeman said the developers originally wanted to be in the ground this spring, it depends on how long it takes to get the Development Agreement in place, the due diligence, and financing, etc. The financing process could take two to three months. Beeman also thought that the land needed to be rezoned to a PUD before development can occur as well as the bids, subcontractors, materials, etc. Beeman noted at this rate, the earliest the development could begin may be summer or fall. Helgemoe asked about the phased development. Beeman informed the Commission that Phase I is the three story 119 unit apartment building while Phase II is the triangular shaped property next to County Road 10. The Beard Group is only interested in Phase I at this time and may be interested in Phase 11 depending upon market demand. The city would be on-the-hook to market and find a developer for Phase 11. A restaurant with outdoor seating and/or a medical office building has been suggested with possible underground parking. The lack of parking may still be a concern so the Development Agreement may need to identify a shared parking area between the Phase I & 11 development. Beeman mentioned that he had talked to a developer who was interested in constructing a three story medical office space that would be in a triangular shape in the northwest corner and would be a modern glass building. However, the developer has since lost interest because they require a 70% prelease agreement for occupancy before they will commit to the project. Since they were unable to secure enough interest in the building, they have backed out of any negotiations on the site. Dahlstrom asked if the Crossroad Pointe development was the land near the old Robert's site. Beeman confirmed that it was the site and is about 4.25 acres. With the split development of Phase I & 11 one site will be 1.76 acres leaving the other phase a little more than two acres. Business Retention & Expansion Visit (BR&E) Updates Coordinator Beeman informed the Commission that due to his involvement with updating the financial policies, he was only able to complete one business retention visit this month. Technical Life Care presented at an EDC meeting about a year ago. They are currently talking about a possible second floor build-out. They are looking for more warehouse space and less office space and they are using some of the office space as storage. They like being around other medical companies in the Mounds View area and they continue to grow with plans to stay in Mounds View long-term. They would like to start a branch in Michigan and Wisconsin, however currently, 90% of their market share is from Minnesota. The company has 18 fulltime employees and four part-time with plans to hire two more fulltime employees this year. Last year they hired four fulltime and one part-time employee. They hire technicians who are already certified and who are graduates of the local technical colleges. EDC Minutes January 15, 2016 Page 6of8 Rice Creek Commons (TCAAP) Development Update Next, Coordinator Beeman provided an update on anticipated improvements relating to Rice Creek Commons. He informed the Commission that with the current 53,000 to 127,000 vehicles on 1-35, MNDOT is looking to add MNPASS lanes, one each direction due to the increased traffic. If funding can be secured, the preliminary engineering process would start as soon as 2018. Mounds View Prosect Updates Beeman provided an update on the Mounds View Area Regional Sewer Improvements being completed by the Metropolitan Council. A half mile section is being replaced in Mounds View running diagonally from the northeast to the southwest corner through the city. Snyder Building Beeman informed the Commission that there is no change with the Snyder building stating that there is continued interest, however it is overpriced. County Road 10 Addressing Next, Beeman updated the Commission that he has met with the company that Commissioner Rieland has put him in touch with to discuss the electronic syncing of addresses with the phone map applications, websites, and other sources. The company is able to pin point the latitude and longitude of the actual building then sync the address so that their clients and customers can find them. This gives local businesses a temporary solution until Ramsey County can come up with the resources to replace the signs with the correct signage. Beeman said the company may also put in a bid for updating the city's website and assisting with the quarterly newsletter. Another meeting has been set for staff to meet with County officials to discuss the signage issue later this month. Commissioner Freichels asked if the US Post Office had continued to deliver mail after discontinuing service to the Bel Rea residents due to the incorrect signage. Beeman informed the Commission that he believes the Post Office has continued delivery. Beeman said the County recently had mentioned that they wanted to shorten the name to County 10 because of the cost. However, at this time staff is telling all local businesses that the correct name is County Road 10 until the County decides to change the name. Commissioner Helgemoe stated that he had asked a County Commissioner last week about the naming of County Road 10. The County official said that there was a meeting scheduled to discuss the matter. City Administrator, Jim Ericson who was in the audience stated that the meeting had not happened yet and was scheduled for the last week in January. EDC Minutes January 15, 2016 Page 7 of 8 Beeman said he is trying to get the address location company to speak at the next Mounds View Business Council meeting which will be held March 9, 2016 at the Community Center. Other Upcoming Events Beeman informed the Commission that the next Annual North Metro Home & Garden Show is scheduled to be held Saturday, February 6, 2016 from 9:00 a.m.-3:00 p.m. at the Sports Expo Center in Blaine. This year Columbia Heights is also participating in addition to the original cities of Blaine, Mounds View, and Fridley. There are only a couple of booths left. Helgemoe asked about what the expo involves. Beeman stated that it will be a conglomeration of business vendors relating to landscaping, gardening, roofs, windows, siding, and other home improvement businesses. Residents are welcome to attend the free event. Helgemoe stated that they are working with the Chamber to get PRIME Design & Advertising to present at the next Mounds View Business Council meeting. As soon as it is confirmed, Beeman will inform the Commission. 7. REPORTS OF COMMISSIONERS Chair Helgemoe asked for updates from Commissioners. Hearing none, Helgemoe informed the Commission that he will be participating in the upcoming Polar Plunge at the end of January. Helgemoe asked if Beeman had any more BRE visits scheduled. Beeman does not, but is working on a few companies that haven't returned his phone calls. Helgemoe thanked Beeman for his work with businesses and stated that he believes there has been good participation by EDC Commissioners. Beeman also mentioned that the Mayor and Council Member Gary Meehlhause have also been on a few visits. With Beeman's involvement on the policy updates this has slowed him down but he anticipates starting up again this spring. Helgemoe asked about the senior housing and if there were any updates. Beeman said the Bel Rae Senior Living is now at 70% which is right on track with company goals. The Bel Rae staff has purposefully filled the vacancies in phases. This has allowed their staff and residents to adjust to increased numbers of residents and also helps to hire more staff in phases. Beeman said they were looking at a Phase II development at one point. However, they have decided to look at other cities as possibilities. EDC Minutes January 15, 2016 Page 8of8 Helgemoe asked about the Zep building. Beeman said that Zep Manufacturing was a public company that was recently bought out by a private equity firm who has moved the Mounds View operations to Chicago. Mid-West Medical Supply has purchased their existing building and has also inquired about purchasing the Zep building. However, the owners of the Zep building are only interested in leasing at this time. In the meantime Mid-West Medical is looking for a 25,000 SF building somewhere near Mounds View to buy. They are also looking to place a new sign in front of their property. Beeman said it is amazing how many companies in Mounds View are tied to Medtronic either directly or indirectly. Beeman said this helps Mounds View because it creates jobs and fills local buildings. 8. NEXT REGULAR EDC MEETING Chair Helgemoe asked about the upcoming EDC meeting. Beeman informed the Commission that the next meeting will consist of the Oath of Office for Gary Stevenson and reviewing the 2016 EDC priorities & annual bylaws. Helgemoe mentioned that we should make note to address Commissioner Dahlstrom's suggestion to review the financial policies on a regular basis as one of the EDC goals. 9. ADJOURN There being no further business, Chair Helgemoe adjourned the January 15, 2016, meeting at 8:30 a.m. Respectfully submitted, 9Y& --- Brian Beeman Business Development Coordinator