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HomeMy WebLinkAboutEDA Packet 10.17.17AGENDA CITY OF HUGO ECONOMIC DEVELOPMENT AUTHORITY TUESDAY, OCTOBER 17, 2017 5:00 PM 5:00 pm 1. Call to Order 5:01 pm 2. Roll Call (Denaway, Gallivan, Houle, Klein, Petty, Puleo, Weidt) 5:02 pm 3. Approval of Minutes • EDA Meeting of September 19, 2017 5:03 pm 4. Discussion on 2040 Comprehensive Plan 5:45 pm 5. Update on Downtown Redevelopment 6:00 pm 6. Adjournment BACKGROUND MEMO FOR THE EDA MEETING OF TUESDAY, OCTOBER 17, 2017 3. APPROVAL OF MINUTES Staff recommends approval of the minutes from the September 19, 2017, EDA meeting as presented. 4. DISCUSSION ON 2040 COMPREHENSIVE PLAN The City has been working on the development of the 2040 Comprehensive Plan. One of the chapters includes economic development. Staff will present to the EDA the draft economic development section of the plan. Staff requests the EDA review and comment on the draft economic development section. 5. UPDATE ON DOWNTOWN REDEVELOPMENT Staff will provide an update on downtown redevelopment at the meeting. MINUTES FOR THE EDA MEETING OF SEPTEMBER 19, 2017 Weidt called the meeting to order at 5:08 pm. PRESENT: Gallivan, Petty, Klein, Houle, Denaway, Weidt ABSENT: Puleo STAFF: Bryan Bear, City Administrator Rachel Juba, Planner Rachel Leitz, Community Development Assistant Sarah Rumppe, Community Development Intern APPROVAL OF MINUTES FOR THE EDA MEETING OF AUGUST 15, 2017 Petty made a motion, Gallivan seconded, to approve minutes for the EDA meeting of August 15, 2017. All Ayes. Motion carried. DISCUSSION ON 1651H- STREET IMPROVEMENTS Juba stated that during the 2040 Comprehensive Plan process staff has been contacted by property owners in the area of 165th Street and Highway 61. They have asked questions on how and when sewer and water services would be extended to the property. Typically, sewer and water services are extended with development. Juba talked about the difficulty of extending utilities due to the physical arrangement of existing infrastructure. Juba outlined a number of ways the project could occur. Juba asked the commissioners to comment regarding holding an informational neighborhood meeting for this project. Weidt supported the idea of holding an informational meeting. Houle asked if the interest from the property owners in this area stems from their desire to develop. Juba responded by stating that the she believes the Comprehensive Plan process has made the property owners think about future development in the area, but some are also interested in City utilities based on needed updates to their septic systems. Klein inquired if the development community has been asking about this area. Juba responded there has been some interest, generally surrounding industrial development. Bear noted people will be asking about how the assessment will be spread amongst the property owners. Juba noted we assess our residential developments by unit, and commercial/industrial projects by linear foot. She noted various zonings in this area, like mixed use, will make it very complicated to make an assessment strategy. The commission concluded by agreeing to hold a neighborhood meeting. DISCUSSION ON 2040 COMPREHENSIVE PLAN — ECONOMIC DEVELOPMENT CHAPTER Juba gave a summary of what the City has heard from the community in regards to economic development and informed the Commission which sections are traditionally included in the Comprehensive Plan's economic development chapter. Juba recommended including the following additions to the chapter: information on economic development in Washington County, the workforce — how to attract talent, and encouraging quality planning and buildings — creating places people want to live. DISCUSSION ON AMAZON H02 RFP Juba informed the EDA that Amazon is currently looking for a second headquarters within the United States. Minneapolis is an area the company has shown interest in, therefore, Washington County has been compiling a list of properties that could be of interest. Bear noted that Washington County will recommend a few sites in the effort of drawing attention to the City and County as a place that encourages economic development. UPDATE ON PROPERTY OWNER MEETINGS Juba updated the commission on the meetings with O'Reilly Auto Parts and the owner of Wagner's Greenhouses. Juba stated that meetings will continue with property owners and staff will be meeting next with the owner of the former Stock Lumber site. UPDATE ON DOWNTOWN REDEVELOPMENT Staff provided an update to the EDA on downtown redevelopment. ADJOURNMENT Klein made a motion, seconded by Houle, to adjourn at 6:26 pm. All ayes. Motion carried. Chapter _: Economic Development DRAFT 2040 Comprehensive Plan Update — Economic Development HUG16015 - September 15, 2017 IM CITY pF HU I:ST. i90fs Contents Chapter _: Economic Development .................................. Introduction..................................................................... Purpose...................................................................... Background and Business Climate ............................. Opportunities and Barriers to Economic Development Community Feedback ................................................. DRAFT 2040 Comprehensive Plan Update — Economic Development HUG16015 - September 15, 2017 0 CFFY C:)F 'HUGO PST. 1906 w .........................................................................................................................1 ......................................................................................................................... 3 ......................................................................................................................... 3 ......................................................................................................................... 3 .........................................................................................................................4 ......................................................................................................................... 7 K rf CITY pF HU I:ST. lAOfs Introduction Economic development is vitally important in every City. Strategic planning, strong partnerships and a clear understanding of the City's goals are important when planning economic resiliency and growth. Collaboration with the City's Economic Development Association (EDA), Hugo Area Business Association (HBA), and Washington County inform this planning process and create strong connections to the City's existing business. This chapter will discuss the City's current business climate, identify strengths and weaknesses, and outline a framework for guiding economic growth. In 2004, the City organized its Economic Development Authority (EDA) into a seven member advisory group including the Mayor and one City Councilmember. As an advisory commission to the City Council, the EDA is responsible for attracting economic growth and development, retaining businesses, and assisting with the expansion of existing businesses within the community. The EDA recommends economic development policies and economic development financing incentives to the Council. The EDA has prepared this long-range strategic plan for economic development for the City. Purpose The purpose of this plan is to expand and enhance the City's commercial and industrial base. The City's goal is to establish a healthy, thriving business community that will maintain and enhance the City's high quality of life. An expanded business community will provide an expanded tax base, increased local employment, a greater variety of jobs, and a full range of goods and services for its citizens. Background and Business Climate Downtown Hugo Hugo's business community is historically concentrated within the downtown district. Some of the City's services and retail are still located in this corridor, despite the loss of many restaurantlentertainment venues. Hugo's downtown contains approximately 41 businesses and 145,000 square feet of commercial space. A variety of neighborhood convenience and specialty retailers can be found here, as well as a handful of automotive businesses. With very few national chains or franchises, most businesses are locally and independently owned. Other community amenities including City Hall, St. John's Church, the American Legion Hall and Hugo Elementary School also contribute to the function and character of this area. The City's expanding population and economy poise downtown Hugo to develop with a rich variety of new entertainment and commercial services that will add vibrancy to the community. Highway 61 A wide variety of businesses are located along Highway 61, particularly north of the downtown area. Many businesses along this road operate out of metal pole barns on gravel lots with outdoor storage, and the majority are still using private well and septic systems. Uses along the corridor include automotive, manufacturing, contractor operations, landscaping businesses, auto salvage yards, and recycling. As a whole, these businesses have minimal investments into buildings or site improvements, and many are likely to be redeveloped when municipal services are extended to these areas. Peloquin Industrial Park This industrial park located at Highway 61 and 152nd Street was originally developed on gravel streets and with no municipal services. In 2004, the City constructed paved city streets with drainage improvements and extended municipal sewer and water to the park. Since that time, the City has seen substantial new investment in the industrial park, resulting in the construction of new buildings, site improvements, and new businesses. Uses generally include manufacturing, warehousing, and contracting businesses, some of which are located in metal buildings on gravel lots, and contain minimal site improvements. Bald Eagle Industrial Park The City began developing this industrial park in 1999 with the help of Tax Increment Financing (TIF). Its location along a rail spur beside Highway 61, and between 130th and 140th Streets has allowed the park to become a major success, and the park is now home to the City's largest concentration of jobs. Construction standards have resulted in higher quality concrete buildings, and paved and landscaped sites. The park is home to the City's largest employers, with uses primarily consist of manufacturing, technical, warehousing and construction. There is also a pet resort and a mini -storage located here. County Road 8 Gateway DRAFT 2040 Comprehensive Plan Update — Economic Development HUG16015 - September 15, 2017 CITY pF IFIUGO 1908 In 2006, improvements were completed on to County Road 8, which resulted in a four-lane divided roadway, including extensive landscaping, street lighting and decorations. The roadway not only improves traffic capacity, it establishes an improved entrance to the City, and new business opportunities. The area near the intersection of CSAH 8 and Victor Hugo Boulevard has been experiencing significant retail development over the past two years. This includes a grocery store, retail shops, several banks, restaurants, medical uses, a gas station, and a day care. The buildings offer a high level of architectural design with quality materials, innovative site planning, landscaping, and attention to detail. In addition to recent improvements of this county road, demand for retail space at this location is mostly due to the recent surge in residential development in Hugo and proximity to Interstate the 35E interchange. The City recognizes this gateway as an opportunity to thread commercial and residential services through to HWY 61, and connect with the downtown corridor. Opportunities and Barriers to Economic Development Since 1999, Hugo has welcomed a variety of new industrial, commercial retail, service and medical businesses to the community. Areas like the Bald Eagle Industrial park have experienced steady development and have brought diverse quality jobs to the City. Today, nearly all the property within the park has been developed, and existing businesses continue to locate and expand. The commercial industry has also found success in Hugo while providing important goods and services to the community. This is due to a number of advantages to locating in Hugo, identified by the business community, which include: • Location and transportation connections, including Highway 61, the BNSF railroad, and the close proximity of I -35E. • Access to major markets and to available infrastructure within the Twin Cities area • Well educated, skilled, and rapidly expanding labor force • Low tax rates • Financial incentives, including Tax Increment Financing • Constructed local infrastructure including roads and utilities • Helpful, effective, and supportive City Council and City staff • Natural resources • Schools • Low crime • Diversity of housing options In 2010, The City completed a Business Retention and Expansion program (BR&E) in partnership with the University of Minnesota Extension Services. The program included business visits that surveyed a variety of retail, service, and industrial businesses in the community. A total of 38 businesses participated in the program. Overall, the survey results indicated that businesses in Hugo are hopeful for the future. The results also identified several reasons for locating businesses into the City including: • Available land • A rapidly growing population with attractive demographics • Improvements to the CSAH 8 corridor • High quality, well planned, and attractive developments • Lack of other similar businesses within close proximity DRAFT 2040 Comprehensive Plan Update — Economic Development HUG16015 - September 15, 2017 4 rf CITY pF ]HU PST. 1908 The City should continue to identify strengths and opportunities in addition to identifying, minimizing and eliminating barriers to new business development. The City should continue this effort by asking existing business owners to identify barriers and opportunities though outreach surveys Identifying Target Business Market A target market should be identified based on the City's strengths and weaknesses. Criteria such as size, type and quality of the business, in addition to the types of jobs and services it provides should all be considered when attracting new business. The City's abundant and adaptable range of development opportunities are one of its greatest strengths, therefore the City will target diverse business markets that will allow the City to grow economically and offer a wide range of services to its residents. One overarching parameter the City values is the quality of a business and the services it provides. Separate parameters may be established for each market sector including office, retail, industrial and medical, which will guide development towards a level of quality deemed acceptable by the City. So far, the EDA has discouraged the development of typical large, "big box," style retailers, but has encouraged the development of smaller neighborhood style shopping centers. This has prevented development from being forced prematurely, and positions the City to welcome a diverse array businesses. The EDA has also recommended that the City provide locations for many of the small home based businesses that are located in some areas of rural Hugo. The EDA has encouraged the City to attract a diversity of businesses that will allow residents to get the services they desire in the community. Guide Land Use for Target Business Market The Land Use Plan Chapter identifies locations for future industrial, retail, and office development. The land use plan should be used to guide new businesses to suitable land for new business development. Land is identified within the land use plan where businesses are likely to succeed with good access to transportation, utilities, and proximity to the workforce. The City's website is intended to become a resource for potential business owners who may wish to locate on developed property. On the website, available commercial land in the City will be listed, and through the listings, property owners may be contacted about available space for sale or lease. The City should provide areas for office and medical development that are distinct from retail areas. Due to the City's support of life -cycle housing, additional housing options are being provided for the senior population, which in turn is creating a demand for additional medical development. In addition, much of the new single-family residential development in the City is affordable only to those earning higher incomes. Many of the professionals now living in the City are creating a demand for professional office and service space. Identifying specific areas for medical and office development will also preserve prime retail space along high traffic corridors for retail development. The land use plan includes a category for "business park" development that will be well suited for office, medical, and light industrial uses along key transportation corridors. Market the City The City should market its strengths and opportunities to desirable businesses through communication and marketing strategies. Simply making the information available to the business community is the first and most important step. The City should prepare annual economic reports of activity within the City, and make them readily available to developers. The City should also continuously update its Economic Development webpage with current and relevant information about activity and incentives and provide helpful community profiles that speak to the development community. Information such as demographic data, community characteristics, and information about the City's workforce, traffic counts, and listings of available land or buildings should be communicated within attractive narratives and graphics. The City of Hugo is commonly described as "an urban environment in a rural setting' which holds many strengths identified by its business community. Branding the City for its strengths, story and success will retain the attention of the development community. The information should be distributed wherever possible, and the City should source creative outlets to market to desirable businesses. The City should continue to cooperate and share information with partners such as the Hugo Business Association (HBA), the White Bear Area Chamber of Commerce, and the state Department of Employment and Economic Development. The City should continue to work with surrounding communities and with Washington County to encourage the creation of an east metro economic development strategy. Establish Financial Incentives to Attract New Business Development The City should evaluate all incentives available for use by the City. Policies should be implemented for the use of incentives, including the use of the City's Tax Increment Financing Policy. The City should evaluate other costs associated with the development or operation of businesses within Hugo. Costs should be compared to other cities and the fee structures or other costs should be reformulated where possible to remain competitive. DRAFT 2040 Comprehensive Plan Update — Economic Development HUG16015 - September 15, 2017 rf CITY pF HU I:ST. lAOfs Ensure Infrastructure is Provided to Meet Business Needs It is important for the City to implement the improvements identified on the City's infrastructure plans illustrated in Chapters 8, 9, 10 and 11 of this document. The important transportation connections and sewer and water improvements that are necessary to accommodate existing and future businesses have been taken into account and are shown in this comprehensive plan. The BNSF rail line serving the Bald Eagle Industrial Park is an important transportation element for existing businesses located there. The rail line should be maintained as long as the businesses rely on it. The City should encourage the eventual conversion of the rail line along TH 61 to a transit corridor that may accommodate both freight and passengers. Provisions for transit will provide businesses with expanded access to the area's workforce. Higher intensity mixed use development and retail development should be encouraged along the transit corridor. The City will cooperate with the Rush Line Corridor Task Force to implement recommended improvements along the corridor. The transportation plan illustrates a future interchange at County Road 4 and 1-35E. The interchange is also identified on MnDOT's Inter -Regional Corridor Plan for 1-35. The timing of the construction of this interchange is critical in implementing the plans for business development in northern Hugo. The City should continue to lobby for the accelerated construction of the interchange though the I-35 W/E Coalition. The City will locate new commercial businesses where municipal utilities are available. Urban services will be made available to the areas guided for business development in accordance with the City's sewer and water plans. The City will strive to ensure that telecommunications needs are met for new or existing businesses. The City will evaluate how fiber optic lines or other telecommunication technology can be extended and used in areas where businesses are located or plan to locate. Downtown Redevelopment The City has adopted a redevelopment plan for downtown Hugo (Chapter 4). The downtown plan strives to maintain the City's business core in downtown with a traditional downtown urban format. For this to become possible, redevelopment of structures in the downtown area must occur. The City has purchased a number of properties in downtown along the east side of Highway 61. As additional properties become available by willing sellers in this area, the City will pursue purchases of those properties. Most of the structures have been be removed, and the properties will be redeveloped by the City as restaurant/entertainment, retail, and office.space. Multiple other property owners in the downtown area have expressed interest in redeveloping their properties in a manner consistent with the downtown plan. In order to facilitate that development, the City has approved a Tax Increment Financing (TIF) District to help ensure that development is feasible in the downtown area. As residential growth continues in the City and commercial development takes interest in Hugo, there is heightened opportunity for the City to guide economic growth to this area. The City should market the downtown aggressively, and source programs and incentives that may make redevelopment more feasible. Gateways The new development along County Road 8 has established a quality atmosphere at the major western entrance to the City. The attractive development there helps create a good first impression and serves to define the image of City. The City will expend extra effort to establish gateways that exude a similar image of quality at all major entrances to the City, including the northern and southern limits of Highway 61, and the western limit of County Road 4. Promote Quality among New Businesses The City has establish and implement Commercial and Industrial Design Guidelines for new and existing business development, including architectural guidelines for retail development, standards requiring quality building materials, and guidance for the preparation of site plans that promote good land planning principles. Proper use of guidelines will ensure that the desired businesses locate in the appropriate areas. DRAFT 2040 Comprehensive Plan Update — Economic Development HUG16015 - September 15, 2017 rF CITY pF HU I:ST. Retain Existing Businesses The City will continue to partner with the HBA, White Bear Chamber of Commerce, and Washington County Community Development Agency (CDA), to identify the needs of existing businesses. This partnership should strive to maintain a sound local business climate that encourages businesses to locate and expand in Hugo. The City will establish and maintain mutually beneficial relationships between business owners and members of the organizations by facilitating open communication and regularly checking in with existing businesses. Through this effort these groups will understand the successes and barriers businesses encounter, and better understand the opportunities and constraints to doing business in Hugo. By making site visits initiating conversation, and providing connections to resources such as Washington County's Open to Business Program, the City will be able to recognize common issues, and assist businesses in overcoming barriers to their success. Technical or financial assistance, when warranted, in the interest of maintaining jobs and creating new jobs will be provided. The City will identify successful business retention efforts within other communities and interview any businesses who decide to leave the City to understand their rationale for departing. Community Feedback The City of Hugo is developing alongside evolving economic markets which are reshaping traditional development models. In its current state, Hugo's growing population and partially developed commercial corridors position the City excellently to welcome new forms of development, which are placing more focus on consumer experience, and creating an attractive business atmosphere. Continuous residential development is increasing demand for services such as restaurants and entertainment venues, align the City's market demands with emerging patterns of development. Adhering to community feedback and staying up to date on market trends will help the City provide more opportunities to its residents and businesses. Hugo residents have told the City they appreciate the diverse and quality development that has occurred over the last decade, but they would like to see more entertainment venues in the City. With this feedback, Hugo should seek quality development that provides entertainment and restaurant services to the community, in addition to retail, commercial and professional office space. The community has also noticed an abundance of medical services but a lack of pharmaceutical businesses. This is another untapped market the City should encourage. The community has a strong desire to see redevelopment in the downtown district, as this was once the commercial hub in the City. Urban Land Institute Feedback The Urban Land Institute (ULI) are cross disciplinary retail and land use experts. Their most recent workshop of the City of Hugo provides insightful feedback regarding future development, including: • Economic development is less about what a community has rather than what it lacks • Hugo has done a great job of not forcing development before the market is ready • Data centers may be an economic development opportunity for the City • Mixed use development, with housing as an integral part, may be a desirable use in the downtown area • Successful communities develop with a clear vision, react appropriately to opportunities, create innovative financial tools and leverage their key assets • It is important to involve the next generation in decision making • Not all communities should look the same, work to preserve Hugo's character • Capitalize on Hugo's assets — "an urban environment in a rural setting." • Hugo should continue to manage its growth in a disciplined way. All good retail is grown "organically" and not forced prematurely. DRAFT 2040 Comprehensive Plan Update — Economic Development HUG16015 - September 15, 2017