HomeMy WebLinkAbout040912 Agenda Packet O� p ��+�
� �
v � 4646 Dakota Street SE
Prior Lake, MN 55372
'�
PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY
AGENDA
Monday, April 9, 2012
4:00 p.m.
Reports included with this agenda can be found in the Document Center at www.cityofpriorlake.com
Please follow this file path: City of Prior LakelEconomic Development Authority120121April 9, 2012
1. CALL TO ORDERIINTRODUCTION
2. APPROVAL OF AGENDA
3. APPROVAL OF MEETING MINUTES
A, March 12, 2012
4. PUBLIC HEARINGS
A. No public hearing is scheduled.
5, OLD BUSINESS
A. Venture Fair Promotional Material
(1) Telephone Script and Contact List
(2) Draft Letter/Email to Potential Angel Investors
6. NEW BUSINESS
A. EDAC Report and Subcommittee Reports:
(1) EDAC
(2) Broatlband Fiber Network
(3) Technology Village Incubator
B. EDA Business Plan — Draft #1
C. Consider Approval of the Economic Development Revolving Loan Fund Guidelines and its
Recommendation to the City Council
D. Consitler Approval of the Amended EDAC Bylaws and its Referral to the City Council for Final
Approval
E. Business Inquiry List (through 3/31/12; to be handed out)
7. OTHER BUSINESS
A. Draft May 14, 2012 Agenda
8. ADJOURNMENT: 6:00 p.m.
Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com
O � PRIp
� �
v �" 4646 Dakota Street SE
Prior Lake, MN 55372
�SD�
Economic Development Authority Meeting Minutes
March 12, 2012
1. CALL TO ORDER
Vice President Morris called the meeting to order at 4:04 p.m. Present were Morris, Choutlek and Myser, Ex-
ecutive Director Boyles, Community & Economic Development Director Rogness and Community Development
Specialist McCabe. Absent was Hedberg.
2. APPROVAL OF AGENDA
MOTION BY CHOUDEK, SECONDED BY MYSER TO APPROVE THE AGENDA AS PRESENTED.
VOTE: Ayes by Morris, Choudek and Myser, The motion carried.
3. APPROVAL OF MEETING MINUTES
MOTION BY MYSER, SECONDED BY CHOUDEK TO APPROVE THE MEETING MINUTES OF FEBRUARY
13, 2012
VOTE: Ayes by Morris, Choudek and Myser. The motion carried.
4. PUBLIC HEARING
No public hearing was scheduled.
5. OLD BUSINESS
A. Venture Fair Contract.
Rogness; explainetl the proposed contract with RAIN Source Capital, Inc. to provide professional services
for the proposed Venture Fair. This contract uses the standard city template. The $7,500 contract cost will
be divided into two equal payments with the first payment made once the contract is executed followed by
the second payment at the conclusion of the event. The Venture Fair will take place before June 30, 2012.
Myser: suggested that an email and letter be pre-written for potential angel investors. These should be
reviewed by EDA members and timed to gain early interest.
Rogness: discussed ways to gain names for the Venture Fair mailing list, including a potential source
through the Minnesota Department of Commerce.
B. Status Report on EDA Member Recruitment.
Boyles: reportetl that the deadline for applications is Friday of this week. Although some interest has
been expressed by people to fill the vacant position, more names are desired to get an adequate pool of
candidates. Boyles also reviewed the process to fill the position as describetl in the EDA bylaws,
Myser: suggested that an email blast be used though the Chamber of Commerce, if possible.
MOTION BY MYSER, SECONDED BY CHOUDEK TO APPOINT MORRIS TO BE THE EDA REPRE-
SENTATIVE ON THE SELECTION COMMITTEE.
VOTE: Ayes by Morris, Choudek and Myser. The motion carried,
6. NEW BUSINESS
A. (1) EDAC Report
Rogness: informed the EDA that a quorum was not present for the second time this year; however, they
did continue discussion on matters related to the 2011 Meet-N-Greet event and other topics. It appears
that absences are related to other prior commitments rather than a level of non-interest,
Phone 952.4479800 / Fax 952.447.4245 / www.cityofpriorlake.com
(2) Broadband Fiber Network Report
Rogness; informed EDA that the subcommittee is continuing to have productive meetings every two
weeks with the consultant, Eric Lampland.
(3) Technology Village Incubator Report
Rogness: indicated that the subcommittee is continuing to review space options with a new business plan
to be presented to the EDA in before the end of June.
B. EDA Business Plan Outline
Rogness: summarized an EDA Business Plan that will be presented to the members at the regular April
meeting. The outline includes the following topics: (1) Purpose, (2) Economic Landscape of Prior Lake, (3)
Measuring Success, (4) SCALE Initiatives, (5) Implementation Plan for 2012/2013, (6) Looking Ahead to
2020 and 2030, (7) Summary of Funding Needs & Resources, and (8) Achievement Goals for Jobs, Busi-
nesses antl Tax Base.
Myser: asked for further clarification of the economic landscape section, noting a desire to have infor-
mation that establishes a base of information for moving forward in certain strategic directions.
EDA Members: supported the business plan outline as provided by staff.
MOTION BY MYSER, SECONDED BY CHOUDEK TO APPROVE THE EDA BUSINESS PLAN OUTLINE
WITH EIGHT TOPICS AS PRESENTED BY ROGNESS.
VOTE: Ayes by Morris, Choudek and Myser, The motion carried.
C. Business Inquiry List
Rogness: distributed the business inquiry list updated through February of 2012, which was provitled as
information only.
7. OTHER BUSINESS
A. Draft April 9, 2012 Agenda was reviewed by the commissioners. The commissioners also discussed the
need to have further information and discussion on pad-ready commercial/industrial sites in Prior Lake.
ADJOURNMENT
MOTION BY MYSER, SECOND BY MORRIS TO ADJOURN THE MEETING. With all in favor, the meeting ad-
journed at 5:30 p.m.
Frank Boyles, Executive Director
DRAFT 12 12 11 EDA meeting minutes
2
04 PRIp
1� �
v �'' 4646 Dakota Street SE
,y, �� Prior Lake_ MN 55372
''ryTTES��
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: April 9, 2012
AGENDA #: 5.A
PREPARED BY: Dan Rogness, Community & Economic Development Director
AGENDA ITEM: VENTURE PROMOTIONAL MATERIAL
DISCUSSION: Introduction
The First Annual Prior Lake Venture Fair event is scheduled for Wednesday,
May 23 at the Wilds. This half-day event will begin with a lunch and conclude
with a dinner for prospective investors to a local community angel fund. Two
tracks of seminars are planned for the afternoon.
History
The EDA can fund a local business event that includes an opportunity for inves-
tors to meet and discuss angel investing opportunities. The EDA agreed to or-
ganize and host a local "venture fair" that would include session topics such as
entrepreneur seed capital, the investment process, fundraising strategies and
business incubation.
Conclusion
Staff is putting the pieces together to market the Venture Fair event. Two of
those key items include: (1) a telephone script and corresponding contact list,
and (2) a draft letter/email to potential angel investors( attached). Coordination
and speaking services are being provided by RAIN Source Capital, Inc. Staff is
estimating 50 attendees for the afternoon seminar and up to 30 attending the
reception and dinner for potential angel investors.
ISSUES: Adequate time to gain the interest of persons to attend this event.
FINANCIAL The City Council has approved an EDA budget amendment that provides
IMPACT: $10,000 for this event in 2012.
ALTERNATIVES: 1. (no specific alternative is identified)
RECOMMENDED Discussion Only.
MOTION:
FIRST ANNUAL PRIOR LAKE VENTURE FAIR
Prior Lake, Minnesota
Wednesday, May 23, 2012
Location: The Wilds in Prior Lake
Start Time: 11:30 AM Sign-up
Lunch: 12:00 —1:30 PM (with a featured speaker)
End Time: 4:45 PM
Reception: 5:00 PM (for potential angel investors)
Dinner: 6:00 PM (for potential angel investors)
***********************************
12:00 PM: Lunch with Featured Speaker, Mac Lewis, CEO of FieldSolutions
Track 1 for Entrepreneurs and New Businesses (Bob Voss, Dakota County Technical College):
1:30 — 2:30 Why Starting a Business Works in a Bad Economy
2:30 — 3:30 Five Reasons Start-up Businesses Fail, and Five Things to Enhance Business Success
3:30 — 3:45 Break
3:45 — 4:45 The Importance of Business Planning, and Business Plan Writing Made Easy
Track 2 for Entrepreneurs and Angel Investors (Steve Mercil, RAIN Source Capital):
1:30 — 2:30 What Do Angels Look for in Investment Opportunities, and How to Pitch to Angel Investors
2:30 — 3:30 Private and Public Sources of Capital for Your Business (panel discussion)
3:30 — 3:45 Break
3:45 — 4:45 Is Angel Investing Right for You?
5:00 PM Reception and Dinner for Potential Angel Investors Onlx
(Steve Mercil, RAIN Source Capital)
EDA Venture Fair Telephone Script
2012
Hello, my name is from the Prior Lake Economic Development Authority.
The Economic Development Authority is trying to retain existing and attract new businesses.
One of our major efforts is sponsoring the "First Annual Prior Lake Venture Fair" on
Wednesday, May 23, 2012 beginning with a lunch at noon at the Wild's clubhouse.
We hope you can participate in one of two ways.
First, beginning at 1:00 p.m., you have an opportunity to attend one of two session tracks
with speakers that include hereby we have arranged for Bob Voss of Dakota County Tech-
nical College and Steve Mercil of RAIN Source Capital to lead topics of interest for new busi-
nesses, entrepreneurs and angel investors.
Second, at 5:00 p.m. we invite you to join us for a reception and dinner on Angel Investing —
a private means of raising capital for fledgling businesses in Prior Lake. Specifically, we are
looking for investors who can venture $50,000 together with twenty others to help our busi-
nesses grow and prosper.
We would like you to be our guest for dinner and then stay to hear Steve Mercil explain An-
gel questions.
There is no obligation, but we prefer that only serious investors attend.
Can we count on you to join us?
Potential Venture Fair Investors:
Harry Alcorn 612-618-1002
Dan Anderson 952-451-2372
Bob Barsness 952-447-2101
Bernie Paul 619-507-8240
Dave Bergeron 612-720-0976
Bruce Boe 612-865-1999
Phil Cameron 952-447-6060
Dave Card 612-386-7885
Dave Chromy 612-616-3695
Joe Dean 952-496-6128
Rod Dehmlow 612-839-6226
Warren Erickson 612-702-0410
Bob Facente 952-440-0925
Gene Happe 952-334-3311
Jack Haugen 952-240-3211
Paul Hofslien 952-226-5737
Bryce Huemoeller 952-447-2131
Bob Jader 952-447-2716
Rick Kathan 952-226-3868
Richard Keeney 612-889-7114
Chad LeMair 612-328-8136
Steve Mattson 612-867-8018
Tom Meyers 651-234-8887
Steve M i I I a r 612-743-8149
Bill Perron 952-894-9711
Dick Pyle 952-496-1501
Dan Ringstad 612-618-7891
Bill Rudnicki 952-496-6145
�
INVITATION LETTER FOR INITIAL MEETING WITH POTENTIAL INVESTORS
TO BE ISSUED BY THE PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY. THIS MAY BE
SENT VIA EMAiL AND/OR AS A FORMAL LETTER; PREFERABLY THE EMAIL/LETTER SHOULD
BE SIGNED BY ALL EDA MEMBERS.
Dear �
The Prior Lake Economic Development Authority (EDA) invites you to an informational meeting on
Wednesday, May 23, 2012 to discuss the formation of a community-based Angel Fund in Prior Lake
to support local entrepreneurs.
Research shows that a major contributor to job growth in the U.S. economy is start-up and early
stage businesses. Yet these businesses frequently have difficulty raising equity capital and finding
mentors who can guide them.
In response, a number of communities formed an angel fund to help remedy this problem for local
entrepreneurs. An angel fund is a limited liability company formed by local investors (angels). Angel
funds invest their capital, and the members invest their time, in high potential, early stage companies.
After a period of time, the investments are sold, the capital (hopefully with a good return) is returned
to the investors and the fund is liquidated.
We are working with RAIN Source Capital0 of Minneapolis in an attempt to organize an angel fund in
Prior Lake. RAIN Source Capital is a proven leader to organize investors into formal angel funds,
with 24 Angel Funds active in the RAIN Network which spans six states, and more funds in develop-
ment. Comprehensively, those funds have invested in 80+ local businesses providing the capital they
need to launch and/or grow their businesses.
Investors in angel funds must be qualified as "Accredited Investors" which means that you must have
a net worth of $1 million of more, exclusive of the equity in your primary residence.
If you qualify as an accredited investor and if you would like to learn more about creating an angel
fund in Prior Lake please join us.
DATE: Wednesday, May 23, 2012
TIME: 5:00-6:00 p.m. Reception (cash bar), 6:00 p.m. Dinner (no charge)
PLACE: The Wilds, 3151 Wilds Ridge, Prior Lake, Minnesota 55372
Please RSVP by X date, via phone at x's phone number or email address.
NOTE: You are also invited to attend the First Annual Prior Lake Venture Fair event
that afternoon at The Wilds (see enclosed invitation).
Sincerely,
Prior Lake Economic Development Authority Members
O � PRIp
H �
v �'' 4646 Dakota Street SE
Prior Lake_ MN 55372
��NNES��
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: April 9, 2012
AGENDA #: 6.A (1) (2) (3)
PREPARED BY: Dan Rogness, Community 8� Economic Development Director
AGENDA ITEM: EDAC AND EDA SUBCOMMITTEE REPORTS
DISCUSSION: EDAC Report
The EDAC met on March 29 with a quorum for the first time this year (all but one
member was there). Bylaw amendments were proposed, which is on this meet-
ing's agenda under New Business. Discussion took place about city codes in
relationship to evaluating them from a"business friendly" perspective. An EDAC
subgroup of three will work with city staff on this topic. Staff presented infor-
mation from the Maxfield Commercial/Industrial Demand Analysis, along with the
city's listing of all C/I parcels. This information will be the start of future dialogue
on getting more marketable pad-ready sites in Prior Lake. The next regular
meeting will be April 26.
Planninq Commission/City Council Concept Review
While this is not a normal subcommittee report, the EDA should be aware that
the Planning Commission and City Council we soon be reviewing a concept
which proposes to use approximately 9 acres of land previously designated for
business in Deerfield and use it for workforce housing. If the Planning Commis-
sion and City Council do not support this change in use, the EDA could consider
what steps it could take to help the developer to market the property for busi-
ness rather than convert it for housing.
Broadband Fiber Network Subcommittee Report
This subcommittee held its fourth meeting with Eric Lampland of Lookout Point
Communications on March 22. A regional partner meeting was held on March
29 to explore a larger joint government effort. The subcommittee has initially
selected a"hybrid model" for the service structure, whereby the city provides
basic triple-play services, and other service providers can provide all other ser-
vices through open access. The next regular meeting is scheduled for April 5.
Technoloav Villaqe Subcommittee Report
This subcommittee met most recently on March 28. They have focused their
plan to three stages, including: (1) Stage 1 starts with space in City Hall; (2)
Stage 2 expands to space in existing commercial office buildings; and (3) Stage
3 results in a future large Technology Village. Michelle Choudek is now serving
as chair of the subcommittee. They plan to submit a new business plan to the
EDA on May 14.
ISSUES: None
FINANCIAL No additional budget impact at this time.
IMPACT:
ALTERNATIVES: 1. (no alternatives are provided at this time)
RECOMMENDED Discussion only.
MOTION:
O � PRIp�
ti
v � 4646 Dakota Street SE
Prior Lake_ MN 55372
`�INxESO��
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: April 9, 2012
AGENDA #: 6.B
PREPARED BY: Dan Rogness, Community & Economic Development Director
AGENDA ITEM: EDA BUSINESS PLAN — DRAFT #1
DISCUSSION: Introduction
Staff has complete a first draft EDA Business Plan that describes proposed
strategies, activities and estimated budget needs for 2012/13, and then it looks
out more broadly to 2020 and 2030. An outline of this plan was approved by the
EDA at its March 12 meeting. The Business Plan is based on the approved
2030 Vision and Strategic Plan. It incorporates economic development strate-
gies developed by SCALE, metrics proposed by city staff, an implementation
plan, and a summary of funding resources to consider for implementing future
EDA strategic initiatives.
Historv
The City Council appointed members to the (new) EDA for 2011. Since early
2011, staff changes slowed the progress of the EDA establishing a business
plan to help guide strategic directions. Some initiatives have moved forward,
including a broadband analysis, a business incubator concept, and an event for
entrepreneurs and investors. This plan is necessary in order to help assure con-
tinued support for ongoing economic development efforts.
Conclusion
An draft plan is based on the following general categories:
• Purpose
• Economic Landscape of Prior Lake
• Measuring Success (Metrics)
• SCALE Initiatives
• Implementation Plan — 2012 / 2013
• Looking Ahead — 2020 and 2030
• Summary of Funding Needs and Resource Options
• Achievement Goals — Jobs, Business, C/I Tax Base (5-year increments)
ISSUES: This business plan provides strategic direction for the EDA priorities.
FINANCIAL Resources, including those related to time and money, will be necessary in order
IMPACT: to implement the proposed business plan.
ALTERNATIVES: 1. Adopt the plan as proposed or with amendments.
2. Begin review of the document at this meeting; continue to a future meeting
3. Take no action at this meeting and schedule a separate work session for re-
view of the document.
RECOMMENDED
MOTION: As determined by the EDA.
O P�
�
�
�
V £ crl
��`
�IN�so��'
PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY (EDA)
BUSINESS PLAN - DRAFT #1, 4/04/12
Purpose
This business plan is intended to guide the Prior Lake Economic Development Authority (EDA) as it
develops and implements certain strategic initiatives in 2012 and 2013, as well as looking ahead to
2020 and 2030. These strategies are guided primarily by the adopted 2030 Vision and Strategic Plan,
including the following five goals related to Community and Economic Development:
1. Develop a plan to provide a community-wide fiber optic network.
2. Prepare and evaluate plans with private parties to establish a technology village/incubator.
3. Develop plans for a data center with fiber optic access.
4. Develop a redevelopment plan, including priorities, timelines and incentives for the
downtown area and for underutilized commercial properties in the City.
5. Review the existing City Code and Zoning Ordinance provisions to assess their impact on
achieving economic development objectives.
The 2030 Vision states that for Community and Economic Development, the EDA's primary
responsibility is to assure that shops and services are provided to residents, to provide employment
opportunities, and to ensure a strong and diversified tax base. Prior Lake also encourages high
quality residential and business development.
Economic Landscape of Prior Lake
Prior Lake exhibits the following attributes that contribute to the overall economic development
landscape of the community. The "top ten" characteristics include:
1. Location and Transportation. Prior Lake is located in northern Scott County between Savage and
Shakopee. The city is accessed by two Principal Arterial highways, including CSAH 18 and 42 in the
northeast quadrant of the city; TH 13 also extends from that northeast area to the southwest. CSAH
21 now extends from State Hwy. 169 to CSAH 42, with a full connection southeasterly through
downtown Prior Lake to Interstate 35. Prior Lake's location surrounding three beautiful and
prominent lakes results in it being home to many Twin Cities' business owners and executives. This
"home" connection can provide future economic growth opportunity.
Page 1 of 11
N
� Eden P►airie s
Bloomingcon
;-
___ ,,e� ,o, Savage
__'_.�-.-- - ' 13 —
._:.. .-�� �'.._., .
. Burnsvilte
Shakopee - ,. 4 �
i
4 ? � � .s .__... �
''_i�'`�� ._ � _
_._._ `� __
.. --- -
.. . _
■:�:_-_. n,,..P..,,.
Prior Lakc � ' � "'^`�"'^
o...�
- s s �"o�..r . .
a�4e
��� ��`' � � Crcdlt FT�vcr
8 Townsh�p
c 1a4�
�;r
W k�vil l�
2. Entertainment/Recreation Focus. Prior Lake hosts various entertainment and recreation
amenities, including The Wilds Goif Club, The Meadows at Mystic Lake golf course, Dakotah! Ice
Center, 4,000-slot Mystic Lake Casino, 600-room Mystic Lake Hotel, Captain Jack's on the Lake, Mystic
Lake's 2,100 seat indoor showroom and 8,350-seat outdoor amphitheater, and two regional parks.
An extensive city park system exists in Prior Lake, including 54 neighborhood and 5 community parks,
and 60 miles of trails and sidewalks. The city's 14 lakes are a summer mecca for residents and visitors
alike for boating, swimming and fishing.
� ��� �; � -
=w �_ .,,�., � <. -:_ � m ..: ,
','.a. _�a.-ii_ � �t .-: i i}2�X`�. �4.�� �'�»�w+�^ 'St..:cr.«, �^:� -•b;,�� �.`` �� ' a �; °
e #' Lr
'R" 9�Qyj ' � fi.- �t.
�
"� �'� �y.= � �`°�-� �. .�,� � � � � . � � xg �,,,��-�� , . ��'~� +�_� .
4 �� � �"�� �'?_ .r^� f:7 a.'� � "'�. �,^t �.i+_..�.���, r` ..���
i�
�'-� � �'. *.:� ','�'� �" r`. ey� :;. '�,_..,x . ` . .
' "al�t � �� , " ,.`�- �. . � �"'�.i��'.� ' .���" '�r� ��
l� - : � � .'"` "4F�':. ,�--. .:'''
.�.«.. .
' � • +�.h �� . � ,t i �;r s.-�...; � =,. .. . ... ..
�r �`` ` . .' .
. ,
� � �
,` � — . . >.. � �li1� � - � r,�+r _
�"'��y* i ' .�„ �� r' ��' ' f w, �°'
� a � , � �
_�{ .
. .1i".
..
, _
� • �^+..
-lF � � ,' r �� ` �� ,. x r ; � }-a. `.� �,���
t �� '` i �
� , ` _ 3 . _ _ .. , - .r,�.-:r� ��..
4� - �,,,: ;`.,
3. Market Value. The city's commercial/industrial market value as a percent of the total market
value is 4.8% compared to Savage at 15.1% and Shakopee at 23.4%; the statewide city average is
18.2%. However, the city has a higher total market value of $115.8 million per capita compared to
Savage at $98.7 million and Shakopee at $96.6 million. Another positive indicator shows Prior Lake
growing its total market value by 149% (from 2002 to 2011) compared to Savage with a 95% increase
and Shakopee with a 103% increase.
Page 2 of 11
4. Fiscal Disparities. As a sign of its low commercial/industrial market value, the city is in the top 20
metro area list of fiscal disparities 'recipients' with a ranking of 17; Shakopee is in the top 20 list of
fiscal disparities 'contributors' with a ranking of 16 (note: Fiscal Disparities is a redistribution pool
equal to 40% of the growth in commercial/industrial value since 1971 in the Twin Cities).
5. Employment/Workforce. Prior Lake currently has 560 business establishments and 7,735
employees working within the city. The city's employment level decreased 3.0% from 2000-2010
compared to growth in the neighboring cities of Savage (+25.5%) and Shakopee (+34.9%). Scott
County's employment level increased 18.8% while the Twin Cities' level decreased 3.0% during that
same time period. Overall, 6% of all businesses in Prior Lake are associated with "arts,
entertainment, recreation, accommodation and food services" while 64% of all employees work
within those sectors. The city has its employment concentrated at Mystic Lake Casino/Hotel with
3,800 employees, followed by ISD No. 719 with 740 and Southlake Village with 105 employees.
Workforce characteristics show that 40% of Prior Lake residents 25+ years of age have received
Bachelor's Degrees or higher compared to 31% in Minnesota and 28% nationally. Median income of
Prior Lake households in 2010 was $89,400 compared to $57,000 as the Minnesota average.
Employment Levels
Jurisdiction 2000 2005 2010 2000-10 Change 2000-10 Change
Prior Lake 7,972 8,415 7,735 -237 -3.0%
Scott County 34,980 41,290 41,566 +6,587 +18.8%
Twin Cities 1.61 m. 1.60 m. 1.54 m. -65,830 -4.1%
Source: Metropolitan Council, Metro Stats, September 2011, "Employment in the Twin Cities Region, 2000-2010
6. Buildin� Activity. The city had an average annual building permit value of $9.6 million/year from
2000-2011 for commercial/industrial new construction projects compared to an average of $50.2
million/year for residential new construction. In addition, new C/I value decreased significantly in
2010-2011 with an annual average new construction value of $280,000 compared to an average of
$11.5 million during 2000-2009.
Commercial/Industrial Building Permit Value, 2001
$60,000,000 � _ _ ________ ______.___.__ __ _ .__ _. _._ _ ____s__
I
sso,000,000 j __--_ _�-- ---.... _ _ _ _ _ _ _ _ _ __
�
�
$40,000,000 i ___._____.._ _.___.___.__ _ _ _ _ _
i
$30,000,000 � � Prior Lake
; • Savage
$20,000,000 � - __ __. � __ ___ ___ .. _._--- - --- �__.___ ��, Shakopee
i
$10,000,000 i _ _
_
� ; ,
$0 ; , , ;�_ , , P�,�
cP�'' cP�' cP�' cP d��' cP� cA cP� cP� O'y O'y�''
ti ti ti ti ti ti ti ti ti ti ti
Page 3 of 11
7. Commercial Propertv. The city has various commercial areas that include downtown, North TH 13,
Gateway, South TH 13 and the future CR 18/42 and CR 21/42 areas. Approximately 200 vacant
commercially-zoned acres exist in Prior Lake. However, only 12 parcels with 19 acres are pad-ready
(building permits can be issued), while 8 more parcels with 21 acres are nearly pad-ready (sites that
have minimal processing, such as platting of outlots into lots).
Downtown Prior Lake
0. ��` _ _ - }� ,} �e�1L'r .�, fr��f _ - �: ;� �. -��
�, r , = .� ��� ,�� -- �`�.-T�' � f .��` x �
,�}� �� � - ¢! �� �•� r
� �_ �� / ��e� � �i° � ,�r'�.
�A . � / / � . . I—/ y
`'' ''� �`� � ,_ '+'^+� � ;1_.�`7 i.Mv.r� .�[�� j � -� �•.���� �Y
�9.
�`` : � T � '; — i` r > � 1/ �Jr �� s.
� � �°���. ����{ r � r'',l'��;� - �1�+�� r,
- - �..�� � - _ _ �'�-� � '.,�, _ {_�� r, _ /
,
�.-
_ /�.
- -�w , -
� -1 :—. ��� 1 L,-i'' ,' ��- • �`�' '- / -I' li- �' `` �
s� �� ^ � ��f-� . , i � �,� �,L 7�� � + _ � r - ���' =-
,� •.�. , , �- _
. ..,
.-- � , � _ � � � ���/�-,�� 7 %. ,
; .
- � �. �. _ . � yp ,.. .
..' f ...��,"`� �j' + w . ?j. � Tr_
� �� . _
� •, �' �•,
a f _ ,, r , � ,�� ,� z . 4 _,– � �
r, r_. J +
7 ,/
; - -
- _
. .
J �_
f � - � I .. ' '� ' '� qy,- � r �
� :.1 .� t + .. ` r � i .,/ � a . a /'-- 4 ». „�,.:,
� _ � t ° � A � � .�` ''�`��� I °, `
I "�' \'X�...
� � . ' � ` . � :�' „ ,e ( Yt aa. ,,,.
_.ye �,
7'' � / 4)
�+� �, �e � �� ,� 7.,i '' �� . . � � �.�.,; ``
1'ii� � ��� �d� N ��..� (�'^� .. s"� ._.. ..: .[ . .. �`�J,��a.s �F
r ���'�!'�Rr��.'����J
8. Industrial and Business Park Propertv. Prior Lake has three industrial parks (Waterfront Passage,
Deerfield and Welcome Ave.) that include 95 acres of developed property and 65 acres of vacant
property; developed land includes 542,500 square feet of building space. All three areas are located
in the southeast portion of the city with immediate access to CSAH 21. Of all vacant industrial sites,
only 8 parcels with 12.4 acres are pad-ready, while 4 more parcels with 17.5 acres are nearly pad-
ready. Another 200 acres of vacant land exists for business park development, none of which is close
to being ready for development.
2012 Industrlal Sites �
�� CheriMld Ind PaAc . .
. . � lv fertront Paauqs � ��, �
WNCOme Ind Pa�k .
� y
\;:. �. � . .�:�.�� f� �'��� � � Jj� � � ,�'� ` �� ..
� +
1-
� �Y� � �,2.�t�i� ,}��.
�
�� �'�` � � ��i�-t� _
lI
� �� �
a r
�. �� G �, t� �+` ��t� ,�' �,$ y�H`��i.' ; .
. Y `�,�� + . � ,
R v
. . � �n�: �' �. `�� � � � � „�..��. . . .
.. : � x '` M�
.�� rv '� �rn �"�,.. . .�
s� o ; "� �Q�c� � � �
� � �
� SF�" � LY ✓�� �. Y � .
��, � �Cl��. w��. . �..r�x� . .
, . .. � . ., � i
s_�.'_ ___-�M�1<s .. ;
0 0:'. 0'� 1 IS .
Page 4 of 11
9. Future Business Park. Industrial and Commercial Areas. Approximatley 200 acres are designated in
the 2030 Comprehensive Plan for future business park development near the northerly CSAH 18/42
and CSAH 21/42 intersections. Prior Lake has an orderly annexation agreement with Spring Lake
Township to annex nearly 600 acres of property for future commercial and industrial development
southwest of Prior Lake.
10. Market Demand. The city's 2011 market analysis shows retail, office and industrial space
demand of 120,000 square feet from 2011-2015; 260,000 square feet from 2016-2020; 260,000
square feet from 2021-2025; and 260,000 square feet from 2026-2030, for 20-year average annual
demand of 45,000 square feet (combined for retail, office, industrial). Further breakdown of each
land use type is shown as below:
TYPE 2010-2015 2016-2020 2021-2025 2026-2030 TOTAL
Retail — Bldg. Sq.Ft. 55,000 125,000 125,000 125,000 430,000
Retail — Acres 9.0 20.0 20.0 20.0 69.0
Office — Bldg. Sq.Ft. 45,000 100,000 75,000 75,000 295,000
Office — Acres 8.0 16.0 12.0 12.0 48.0
Industrial — Bldg. Sq.Ft. 20,000 40,000 60,000 60,000 180,000
Industrial — Acres 4.0 7.0 10.0 10.0 31.0
Source: Maxfield Research, Inc. "Prior Lake Commercial and Industrial Demand Analysis, March 2011
Building square feet is converted to acres by dividing one acre by 6,250 square feet (acres rounded up to X.0)
Measuring Success (Metrics)
The EDA will develop performance measurements that allow continuous reporting on important
aspects of its services, programs and processes. The use of inetrics is being utilized for all city
operations in Prior Lake beginning in 2012, and therefore, metrics will be incorporated into the EDA
Business Plan. To begin this process, the following key economic development objectives are being
identified and prioritized one through five:
1. Add new jobs to expand the employment base of Prior Lake; �
2. Add new businesses to the Prior Lake economy; wE�coME
3. Retain jobs and businesses in Prior Lake; , To
4. Increase the commercial/industrial tax base within Prior Lake; and ((,
5. Improve the perception of Prior Lake as a positive place for �`""
PRtO i LAKE �
economic opportunity.
�
;:
In order to measure progress toward achieving these objectives, the following metrics will be used for
measurement purposes:
• Track building permits issued for commercial/industrial projects; determine business and job
growth that may tie to each permit. [monthly evaluation]
• Track lease inventory of available commercial/industrial building space; determine business
and job growth that may tie to newly leased space. [quarterly evaluation]
• Track business membership with the local Chamber of Commerce in order to assess additional
business and job growth. [quarterly evaluation]
Page 5 of 11
• Track change in commercial industrial market value using Scott County data. [annual
evaluation]
• Track the number and acreage of pad-ready commercial/industrial sites. [bi-annual
evaluation]
• Track zoning permit approval process associated with commercial/industrial projects.
[quarterly evaluation]
SCALE Initiatives
� _ _ _�
, `�� ��-'� �
� � ��' �� ' =�=
_ _ , . . � -�,_ � ' ��'��
` ; :.� �
�
' `"' � � _�
� . -_ .. ..�......���.'�
A report from the Scott County Association of Leadership and Efficiency (SCALE) Economic
Development Strategy Group, June 2011, has ten recommendations. The Prior Lake EDA should
evaluate these in terms of being a significant partner in future accomplishments.
1. Countv ima�e and identity — create and promote a specific, consistent, positive identity to
establish its unique competitive advantages; Prior Lake's identity must be a key part.
2. Education — investigate and pursue additional post-secondary education options; Prior Lake
must be a location to consider for satellite campuses and virtual education.
3. Site Availabilitv — identify and support locations for large industrial sites and business parks
that include timely development approvals; Prior Lake must be an active participant to add
sites to this inventory.
4. Infrastructure — focus infrastructure planning and improvements to maximize job creation
opportunities; Prior Lake must contribute its existing/future infrastructure to help achieve
county-wide economic growth potential.
5. Marketin� — prepare a marketing plan that builds on common public/private sector interests
in order to promote and grow the economy of Scott County; Prior Lake must highlight its
assets as important contributions to the regional effort.
6. Collaboration/Coordination — participate in all aspects of regional economic development
efforts; Prior Lake should also participate fully in this effort.
7. Pub�ic Sector Culture — prioritize customer service, timeliness, accountability and creativity;
Prior Lake's customer service level must be implemented so that customers can "expect to be
greeted courteously, with respect, a prompt offer of assistance, and a can-do attitude".
8. Amenities — identify strategies to support a vibrant entertainment industry, executive housing
and higher-end retail/dining opportunities; of all Scott County cities, Prior Lake has the
greatest opportunity to enhance these amenities.
Page 6 of 11
9. Development Incentives — define and promote existing incentives available to qualified
businesses and explore additional incentives; Prior Lake should identify a list of incentives that
it is willing to provide for economic development.
10. Zonin� and Land Use Re�ulations — provide opportunities for commercial and industrial
development with zoning districts and development standards; Prior Lake should evaluate its
codes and ordinances in relationship to making the city "business friendly".
2012/2013 Implementation Plan
The following actions shall be accomplished during 2012 and 2013 as key initiatives of the EDA:
1. Broadband (Community Fiber Network). The EDA hired a consultant, Lookout Point
Communications, to move this initiative forward. A subcommittee was formed to work with
the consultant in order to fully evaluate options to provide fiber to homes and businesses
throughout Prior Lake, including Mystic Lake Casino/Hotel and other tribal property.
• Timeline: The subcommittee will make a recommendation to the EDA by July 1, 2012.
• Budget: $80,000 for the consultant (approved by EDA for 2012 budget).
• Metrics: New business/job growth as a result of fiber availability.
� =,
��� ���
�
. � , .Et'... � 4`%' � � .• .
�
l � J �� � �' I����I, i
f ���'
n <
i
� � ' 1
��, . . . . , ,
2. Technolo�y Villa�e (Business Incubator). The EDA formed a subcommittee to explore
opportunities in Prior Lake to create and/or support a new business incubator. Options will be
evaluated in terms of space, location, partnerships and funding.
• Timeline: The subcommittee will make a recommendation to the EDA by July 1, 2012.
• Budget: $25,000-$50,000 estimated support over a 3-year period.
• Metrics: New business/job growth in incubator location.
3. Propertv Supply and Demand. The EDA will compile a commercial and industrial land
inventory in order to determine the availability of pad-ready sites. The 2011 Maxfield C/I
demand analysis report will be used to establish a projected demand for sites based on
building size and acreage through 2030. An evaluation will be made to determine necessary
steps to ensure that Prior Lake has an adequate supply of pad-ready sites.
• Timeline: Staff will make a report to the EDA by July 1, 2012.
• Budget: Unknown.
• Metrics: New business/job growth and tax base increase on available sites.
4. Welcome Avenue Industrial Park. The EDA may be involved with an evaluation of
infrastructure improvements to this industrial area. A feasibility report has been completed
Page 7 of 11
to identify the cost associated with providing water, sewer and streets to all parcels. It is
possible that funding sources may be needed from an economic development perspective in
order to successfully complete all improvements.
• Timeline: City Council has reviewed the feasibility report in March of 2012; EDA
involvement may be possible after that date.
• Budget: Unknown.
• Metrics: New business/job growth and retention, and tax base increase on the improved
industrial property.
5. Economic Development Resources. The EDA will evaluate funding resources that are
available and necessary to assist businesses and help it achieve economic development
objectives. Example resources include tax increment financing, tax abatement, revolving loan
funds and the EDA budget. New and expanded resources will also be explored by the EDA,
including a permanent funding source for the EDA starting in 2013.
• Timeline: Ongoing during the year.
• Budget: Approximately $588,000 total potential resources (see table below).
• Metrics: New business/job growth and tax base increase with city financial assistance.
2012 EDA Special Revenue Fund Budget $ 167,750
2012 General Fund Economic Development Budget $ 24,000
Business Revolving Loan Fund (Federal) $ 112,500
Business Revolving Loan Fund (State) $ 87,500
TIF District 1-1 Excess Increment $ 195,000
Scott County CDA Grant (for broadband study) $ 15,000
TOTAL $ 601,750
6. Redevelopment. The EDA will identify redevelopment opportunities that include the
downtown area and other potential (commercial/industrial) sites. For example, the "Diggers"
and "Svoboda" are candidates for redevelopment outside the downtown. The analysis will
review existing constraints that inhibit redevelopment to occur (i.e., site contamination) and
associated costs that may require public sector involvement.
• Timeline: Staff will submit a plan to the EDA by September 30, 2012.
• Budget: Unknown.
• Metrics: New business/job growth and tax base increase on redeveloped sites.
� ��„ .� _.� -.�.�{'� ». � � �� �4� ;�� � -�
}" ' r�r '.` � �' � � *��} ' � x �
'�v. „� . " � S�,";Es� ` "� �', � ' � , ar
. ±�9tt
i ��.
"S <' .� ��!� .+�I ^ �� , � ,? ..
i.� ', 4y�a } 'l h .; _ . . � � ! �. �
� y^ f
� _ ! �. i1 � -i . `a € A �'�' �.
q_�S. �`�. _ s
� 7 7' � ' � �;°R s ?' .,x ''�
� � , ., s . ti ' � O . �^. ,�. x 8.� '��;
� � ry . � �� .� i /. ���� ..1 � -
.����� "';� �,° _ F � " �Y/ - , /� 1,"�
, .� . �
�� �r� I _ � _ ,�;,�'�` !°• ":° _ �
�. ;�
� ,�,� , �: i _ � • ., �� —
_
. : � :
,� �" �, : ( . �.. _
' *� _.�__ :�I►t � _ � _ ! _ -�. ..
. ��' _`�� y � .._.
� ��-e�i r r
y �-' �,/�% .�:i�... -! � gr ��� 'v _
Redevelopment, "Diggers" Site—Trunk Highway 13 and Anna Trail
Page 8 of 11
( � �'� � �� � �r � �t� `-`..� "�'� # • �
� �' ��a,w�s ^�� ` c� � � .��' ��� • -
� , .� �� $ `�. � p � � 4� ' �
� ��. �� � r. � � �
� n'" +� ��_ ;"" �. ° v::�� �
€� -� -
" ?,� � ' � ,a�tt^ ,�''i: � � .. f,
�... `���� � �.,;-
"r",�" �'� G� _,,;s� �'.._ � ';' " � ��.,,� ,�
� .a, , a. ,��, �. c. = � • �\.� \ � � � ^:.;
<' t . /" ,, R,
�;, � ;:. � �_ f � �
� � ' ' �, �°`
. ��� �t
. � , � � 'sSt�' r-� '� ��;:� , � � .
♦ . <� �' '`� i � : � ;�&v ' �,
� .. ��, `,� " ,�Y. � ��y�� �' ,
,.� ,x �`"} r J I�-_. �:, � 4.k ry �� e
� \ �`� � ���,. �+ �'. � � • ��� ,. � ,, ��� �
� �� ,..�'A�"` �` !� r�,F ��i : t— r . � : . . s � ?° ' .
�..,,, � — � ,.0 �, t. - 4 y � 1 ���� �" � � �
'� �. a �`' k ��+ ���'P��.�,'.N►4, ^ !' � pr�� t � ` � � .
«: .
,
,
. �' .
a�.�es � ,.=.,�, - s «a . -��d �» . °' . -N �X. �"�� i� �
.
� w,. ,.. . .' ^�. , �v ,�� . , , ... .p . ....,. —� :.
:: _. .
�—�.,� ... , . .- . .. �.aa,.,Y�I','a:w'ek!°s"�Y.... _—_ _ .�_.
Redevel�opment, "Svoboda" Site—County Road 21 and Revere Way�
7. Business Venture Fair. The EDA will organize and host a business seminar event for one-
half day that provides information for start-up businesses and entrepreneurs, and for angel
investors. This event aims to begin a series of regular business seminars in Prior Lake that will
focus on ways to encourage economic growth. Angel fund investing may also lead to a local
investment fund to support new business development.
• Timeline: Event will occur on May 23, 2012.
• Budget: $10,000 (approved by EDA for 2012 budget).
• Metrics: New business/job growth using angel investment funding or other business
financing resources.
8. City Codes. The EDA will review a comprehensive analysis of city codes by staff in light of
making Prior Lake more "business friendly". This analysis will include examples such as the
design standards in the zoning code and a comparison of permit fees, as well as an evaluation
of the internal application/permit review process. Staff will develop initial recommendations
for EDA consideration, which will also receive EDAC input.
• Timeline: Staff will provide preliminary recommendations by June 30, 2012.
• Budget: No immediate impact due to city staff oversight.
• Metrics: New business/job growth based on a more business friendly codes and the
corresponding permit review process.
Looking Ahead — 2020 and 2030
2014-2020 Timeframe Goals:
1. Continue the successful implementation of a Technology Village Incubator program in
partnership with existing commercial office building owners in Prior Lake, and develop
a plan to expand this to a larger Technology Village campus.
2. Complete the full build-out of a community-wide (ultra-high-speed) fiber optic
network system to all residents and businesses in Prior Lake in cooperation with SMSC;
utilize system to support a data center proposal.
Page 9 of 11
3. Work in partnership with major property owners in the CR 42 corridor to begin
implementing a plan to have pad-ready commercial and business park property
available for development.
4. Work in partnership with property owners in the Deerfield and Welcome Ave.
industrial areas to fully develop these areas to their maximum potential.
S. Begin to implement actions necessary to redevelop key opportunity areas as identified
in a Redevelopment Plan for Prior Lake.
2021-2025 Timeframe Goals:
1. Begin the first implementation stages of a Technology Village campus with an
estimated 100,000 square feet of building space.
2. Cooperate with a private developer to build a data center facility in Prior Lake.
3. Complete all supporting infrastructure improvements that results in over 100 acres
being developed as commercial and business park uses.
4. Develop plans for the expansion of commercial and industrial development in the
Southwest annexation area of Spring Lake Township.
5. Achieve key redevelopment objectives within the city related to the downtown area
and other priority redevelopment sites.
2026-2030 Timeframe Goals:
1. Continue to implement and expand upon all stages of economic development
strategies that were underway from 2014-2025.
2. Successfully attain a strong business presence within the Twin Cities as a community
full of smaller high technology that have built their home base around a place with
numerous amenities and a desirable lifestyle.
3. Fulfill many aspects of the 2030 Vision Statement for Prior Lake.
Summary of Short-Term Funding Needs and Resources
2012 EDA and Economic Development Bud�et (Approved):
o Expenses = $191,750
o Uses: 0.5 ED Director salary/benefits ($70,000); broadband study ($80,000);
Venture Fair ($10,000); legal/training/etc. ($31,750).
o Revenue = $191,750
o Sources: $40,000 tax levy +$132,000 reserves +$15,000 grant +$4,800 interest
Summary of All Available Resources:
2012 EDA Special Revenue Fund Budget $ 167,750
2012 General Fund Economic Development Budget $ 24,000
Business Revolving Loan Fund (Federal) $ 112,500
Business Revolving Loan Fund (State) $ 87,500
TIF District 1-1 Excess Increment $ 195,000
Scott County CDA Grant (for broadband study) $ 15,000
TOTAL $ 601,750
Page 10 of 11
r
2013 EDA Bud�et (Estimated):
o Expenses = $232,500
o Uses: 0.5 ED Director salary/benefits ($72,500); business incubator
operations ($10,000); pad-ready sites and/or redevelopment
assistance ($150,000). Add broadband engineering?
o Revenue = $232,500
o Sources: $75,000 tax levy +$140,000 TIF 1-1 +$7,500 incubator leases
+ $10,000 revolving loan admin
2014+ Future EDA Bud�et (Prolected):
o Expenses = $250,000
o Uses: 0.5 ED Director salary/benefits ($72,500); business incubator
operations ($10,000); pad-ready sites and/or redevelopment
assistance ($100,000); misc. ($17,500). Add broadband engineering?
o Revenue = $250,000
o Sources: $75,000 tax levy +$60,000 TIF 1-1 +$7,500 incubator leases
+ 100,000 redevelopment grant +$7,500 revolving loan admin
Key Bud�et Issues:
1. Should the EDA continue to fund city staff time devoted to economic development?
2. What ongoing operations should be funded, if any (i.e., incubator)?
3. What special projects should be anticipated each year related to city assistance for
redevelopment or economic development?
4. How much should the EDA levy, if any, and should that amount be offset by reductions
in other city functions/programs?
Achievement Goals — Jobs, Businesses and Market Value
Time Period Jobs Created Businesses Added Market Value Increase
2011-2015 385 55 $9.6 million
2016-2020 855 120 $21.2 million
2021-2025 790 105 $20.8 million
2026-2030 790 105 $20.8 million
Total 2,820 385 $72.4 million
Assumptions: 1. Retail jobs created per 1,000 building square feet = 3.0
2. Office jobs created per 1,000 building square feet = 4.1
3. Industrial jobs created per 1,000 building square feet = 1.8
4. Additional building square feet in Prior Lake based on the 2011Maxfield
Commercial/Industrial Demand Analysis report.
5. Retail businesses added is based on 1 per 2,500 square foot average.
6. Office businesses added is based on 1 per 1,500 square foot average.
7. Industrial businesses added is based on 1 per 10,000 square foot average.
8. Total site/building market value increase is based on $80.00 per building square foot
average (which then includes the land value).
Page 11 of 11
O � PRIp�
� �
v � 4646 Dakota Street SE
Prior I.,ake_ MN 55372
�
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: April 9, 2012
AGENDA #: 6.0
PREPARED BY: Casey McCabe, Community Development Specialist
AGENDA ITEM: CONSIDER APPROVAL OF THE ECONOMIC DEVELOPMENT REVOLVING
LOAN FUND GUIDELINES AND ITS RECOMMENDATION TO THE CITY COUN-
CIL.
DISCUSSION: Introduction
The purpose of this agenda item is to request EDA approval of the proposed Eco-
nomic Development Revolving Loan Fund Guidelines and refer the guidelines to the
City Council for final approval.
H istorv
The current Prior Lake Revolving Loan Fund Plan was approved by the City Council
in May of 1995 in connection with a grant application submitted to the Minnesota
Department of Trade and Economic Development (DEED) for the benefit of EM
Products. The repayment of those loan funds stay with the city under a revolving
loan fund program to be used for future business assistance. The Revolving Loan
Fund Plan for these federal funds has not been updated since its approval in 1995,
nor have funds been re-loaned for eligible business uses.
Later in 1998, the city also received state funds from DEED in order to assist NBC
Products; however, no revolving loan fund plan was approved for these funds. Alt-
hough each funding source (federal and state) has different requirements for estab-
lished revolving loan funds, they are not substantially different. Therefore, staff is
proposing to combine both funds into one combined set of guidelines.
The purpose of the revolving loan fund guidelines is to establish policies and proce-
dures to regulate, coordinate, and facilitate the workflow for underwriting new financ-
ing requests, servicing revolving loans, and ensuring borrower compliance with loan
terms and conditions.
Conclusion
City staff has completely revised the previous 1995 revolving loan fund plan to in-
corporate the goals and objectives of the 2030 Vision and Strategic Plan and to pro-
vide one master document for the administration of State and Federal revolving loan
funds.
ISSUES: The proposed Economic Development Revolving Loan Fund Guidelines were for-
warded to the Minnesota Department of Employment and Economic Development
(DEED) for review. DEED supported the new guidelines without further changes.
FINANCIAL None; existing city staff will administer this program.
IMPACT:
ALTERNATIVES: 1. Motion and second to approve the Economic Development Revolving Loan
Fund Guidelines as proposed or with further amendments.
2. Upon approval, forward recommended Economic Development Revolving Loan
Fund Guidelines to City Council for final approval.
3. Take no action and provide direction to staff.
RECOMMENDED Alternatives Number 1 and Number 2
MOTION:
ATTACHMENT: 1. City of Prior Lake Economic Development Revolving Loan Fund Guidelines.
2. Prior Lake Revolving Loan Fund Plan — 1995
w
2�12
CITY OF PRIOR LAKE, MINNESOTA
ECONOMIC DEVELOPMENT REVOLVING LOAN FUND GUIDELINES
Adopted April 16, 2012
Sections I through XII of this document govern the use of Federal Economic Development
Revolving Loan Funds ("Federal Funds"). Section XIII of this document applies to the use of
State Economic Development Revolving Loan Funds ("State Funds").
I. Purpose for Federal Funds.
The purpose of these guidelines is to establish policies and procedures to regulate,
coordinate, and facilitate the workflow for underwriting new financing requests,
servicing revolving loans, and ensuring borrower compliance with loan terms and
conditions.
II. Authorization and Funding Sources.
Chapter 469 of the Minnesota State Statutes, as amended, authorizes the City of Prior
Lake Economic Development Authority (EDA or Board) to make grants or loans to
prospective private businesses. The Federal Fund was capitalized through funds made
available to the City of Prior Lake from the Minnesota Department of Employment
and Economic Development (DEED).
In addition to these guidelines, Federal Funds are subject to the rules and regulations
established by the U.S. Department of Housing and Urban Development (HUD) for
the State of Minnesota's Community Development Block Grant (CDBG) program.
III. Mission for Federal Funds.
The mission of the Federal Funds is to increase the City's tax base, create and retain
permanent private sector jobs, alleviate economic distress, address urgent community
development needs, and improve economic opportunity for the citizens of Prior Lake
by promoting local business development and expansion, by attracting out-of-state
business expansion, leveraging private sector funds, and assisting the development of
new technologies.
IV. Program Objective for Federal Funds.
The objective of Federal Funds is to fill the financing gap between project costs,
private debt financing, and private equity by making direct deferred or low-interest
loans for certain approved activities that otherwise may not occur, to businesses
within the city limits of Prior Lake.
Page 1 of 12
I
�
V. Equal Opportunity and Affirmative Action.
A. Non-Discrimination. No one shall be denied assistance based upon race, color,
creed, religion, national origin, sex, marital status, age, familial, status, or
disability. All grant/loan recipients, developers, contractors and subcontractors
must agree:
l. Not to discriminate directly or indirectly in any manner against an
employees or applicants on the basis of race, color, religion, sex, national
origin, age, familial status, or disability.
2. To post and to cause subcontractors to post in conspicuous places
available to employees and applicants for employment, notices setting
forth the substance ofthis clause.
VI. Eligible Activities for Federal Funds
Certain projects, applicants, activities and costs are eligible for revolving loan funds.
A. Eli ib��plicants. Applicants may be a small business or developers who are
organized as proprietorships, partnerships, or a corporation whose business sales
are less than $5 million annually for each of the last two years. The City of Prior
Lake may make exceptions to this rule on a case by case basis. Moreover, the
successful applicant must also demonstrate proofofthe following:
1. Ownership or lease agreements of the subject property; and
2. Property insurance; and
3. Property taxes paid and current; and
4. Freedom from all judgments, liens, agreements, consent decrees,
stipulations for settlements, or other such actions which would prevent the
applicant from participating in any program administered by the City of
Prior Lake; and
5. Compliance with all applicable City of Prior Lake ordinances and plans.
B. Eli�ible activities. Revolving loan funds may be used to assist small businesses
primarily by providing financial assistance for the following types of activities,
including but not limited to: growth and expansion, rehabilitation, code
compliance, and microenterprises. When using federal funds, national objectives
and other program requirements must be met as identified in the federal Housing
and Urban Development (HUD) program requirements for Small Cities
Community Development Block Grants (CDBG).
C. Eli�ible costs. Federal Fund eligible costs may include the following:
l. Building demolition and/or environmental remediation. Demolition of
existing structures on commercial or industrial zoned property deemed by
the City of Prior Lake to be in blighted condition. Remediation of known
environmental contamination of commercial or industrial zoned property
' as evidenced by certified reports. [National Objective: Slum/Blight Spot]
� 2. Renovation of buildings. Renovation of existing industrial or commercial
facilities; improvements fiinded by the revolving funds must be limited to
Page 2 of 12
�
�
the correction of code violations, and funds must address improvements to
public health and safety. [National Objective: SlumBlight Spot]
3. Building expansion. Revolving loan funds may be used for the expansion
of existing buildings in conjunction with business job creation. [National
Objective: Low/Mod Jobs]
4. Microenterprise. A range of eligible microenterprise activities are eligible
for revolving funds. [National Objective: Low/Mod Limited Clientele]
a. Definition. A microenterprise is defined as a commercial
enterprise that has five (5) or fewer employees, one or more of
whom owns the enterprise; the owner must meet the Federal
Funds program requirements as being low/moderate income.
b. Exemption. Microenterprise loan applicants may be exempt
from certain requirements of these guidelines on a case-by-case
basis, but within HUD CDBG program requirements.
VIL Ineligible Activities. Certain applicants, projects, activities, and cost are ineligible for
revolving loan funds.
A. Ineli ib� le a�plicants. Any applicants not meeting the eligibility rec�uirements
outlined in Section VI, subsection A shall be ineligible to receive revolving loan
funds.
B. Ineligible activities. Funds may not be used to directly assist retail businesses,
non-profit institutions, gambling organizations, lending or investment
organizations, land speculation, or any use deemed illegal by federal, state, or
local law or ordinance. However, eligible costs, as identified in Section VI.C.
may include building improvements that house these activities (i.e., retail uses in
a commercial building that meets all rehab project cost eligibility).
C. Ineli�ible costs. Ineligible costs include, but are not limited to: management fees,
financing costs, franchise fees, debt repayment or consolidation, moving costs,
refinancing, and operating costs or working capital.
VIII. Loan Terms and Conditions.
The City shall make available to eligible applicants direct deferred or low-interest
loans for the purpose of encouraging economic development, downtown
development, job creation and job retention, and preservation of business districts in
the City of Prior Lake.
A. Loan amount. There are maximum and minimum loan amounts for eligible
projects.
1. Maximum loan amount. The maximum loan available from the revolving
loan fund for each eligible project is limited to $50,000.00 or 50% of total
project cost, whichever is less.
Page 3 of 12
2. Minimum loan amount. The minimum loan amount available from the
revolving loan fund for each eligible project is $10,000.00.
3. Micro-enterprise loan. The maximum amount of a micro-enterprise loan
shall be $10,000.00 and the minimum amount shall be $2,000.00.
B. �pe of loan. The EDA will review all loan requests and decide whether a
business needs a low-interest loan, a deferred loan, or a combination of both
loans. This decision will be based on its own underwriting analysis with the
exception that microenterprise/incubator businesses will be eligible for deferred-
only loans.
1. Low-interest loan. Interest rate shall be a fixed-rate established at 70
percent of the bank prime rate as quoted in the Wall Street Journal at the
date of application but shall not be less than three (3) percent. Principal
and interest collected from loan repayments will be returned to the
revolving loan fund for relending.
2. Deferred loan. Interest rate shall be zero (0) percent and the loan principal
repayment shall be deferred based on conditions established for each
business. For example, microenterprise/incubator deferred loans may not
have to be repaid until three (3) years from the date of assistance.
Incentives could also include partiaVfull loan forgiveness based on the
business meeting certain thresholds. Principal collected from loan
repayments will be returned to the revolving loan fund for relending.
C. Administrative costs. Administrative costs will be financed through:
1. The EDA will charge a one (1) percent loan origination fee to Borrowers
participating in the revolving loan fund program. The use of these funds
will be to pay the costs associated with the preparation and structuring of
applications and related costs; and
2. In addition, the EDA may authorize up to ten percent (10%) of the
revolving loan fund account to be utilized for staff administrative costs.
D. Term. The term of the loan will be tied to the useful life of the assets being
financed, except that deferred loan terms shall be established by the EDA based
on the needs of each business. The following general terms apply:
1. Building demolition or environmental remediation. The term of the low-
interest loan shall not exceed ten (10) years; the EDA has the option to
approve a deferred loan for building demolition or environmental
remediation.
2. Building expansion/renovation. The term of the low-interest loan shall not
exceed fifteen (15) years.
3. Microenterprises. All microenterprise loans shall be deferred loans with
terms to be determined by the EDA.
4. Balance due. All balances will be due and payable if and when the loan
recipient sells or otherwise transfers any or part of his/her interest in the
property, or fails to meet any of the guidelines established within this
Page 4 of 12
document before the maturity date of the loan, or relocates any part or all
of the business outside the City of Prior Lake.
E. Job creation. A minimum of fifty-one percent (51%) ofall jobs created or retained
must be held by individuals determined to be of low-or-moderate income in
accordance with the rules and regulations established by the U.S. Department of
Housing and Urban Development (HUD) for the Community Development Block
Grant (CDBG) program.
1. One permanent full-time job must be created or retained within two years
of the loan closing for up to each $20,000 borrowed from the revolving
loan fund; and
2. A business that receives revolving loan funds must agree to list any vacant
or new position with the WorkForce Center of the Department of
Employment and Economic Development.
F. Slum and bli�ht. Funds may be expended for economic development activities
which aid in the elimination of slum or blight as designated by the City of Prior
Lake. Designations must meet the definition of slum or blight under state or local
law.
G. Equit,Lparticipation. There shall be a minimum 10 percent private equity
investment of total project costs required of all applicants.
H. Collateral requirements. All low-interest loan agreements will be secured by one
or more of the following: mortgage, promissory note, UCC filing on equipment,
inventory, and/or deliverables, or other security agreement as required by the
EDA. Collateral requirements for deferred loans shall be at the discretion of the
EDA.
1. The revolving loan fund may take a subordinate position to the primary
lender on the assets financed; and
2. Surety deposits shall be required for certain construction contracts as set
forth in Minnesota Statutes 290.9705.
L Letters of commitment. Letters of commitment from all funding sources must be
submitted for the application to be deemed complete.
J. Personal u�; arantX. Personal guarantees of persons with ownership interest of
twenty (20) percent or greater may be required by the EDA.
K. Loan repavments. Repayments shall be specified in an EDA loan agreement. In
general, the loan repayment must begin within one month of completion of
construction and/or demolition. The EDA may make exceptions to this rule on a
case by case basis.
L. Loan pre�pavment. Prepayments are permitted where the Borrower makes the
EDA whole for any losses or costs associated with the prepayment.
Page 5 of 12
M. Notice of award or denial. Applicants will be notified in writing not more than
fourteen (14) days after final action has been taken by the EDA on their revolving
loan fund application. Borrowers are responsible for associated legal fees relating
to closing ofthe revolving loan fund loan.
N. Loan closing documents. The City will close the loan within sixty (60) days of
final EDA approval of the loan application. At that time, the City will deliver to
the Borrower all closing documents and a final debt service schedule. In
exchange, the Borrower will deliver to the City its loan obligation which is
defined as a bond, note, or other evidence of obligation issued by the Borrower to
evidence its indebtedness under the loan agreement.
O. Post-closin� amendments and modifications. Requests for amendments and
modifications following award, closing, or disbursement of funds to the
underwriting ofthe original request requires EDA approval and shall be presented
at the next scheduled meeting ofthe Board for review.
P. Loan declination The EDA will not make a loan if it determines that the loan
amount would place an undue burden on the financial resources of the Borrower
or the Borrower cannot demonstrate adequate financial capacity to repay the loan
or the EDA otherwise determines that making the loan is not in the best interest of
the City.
Q. Anpeal. There will be a complaint and appeal procedure for aggrieved applicants:
1. Written notice. Applicants will receive written notice ofthe denial ofthe
loan and the reason(s) for the determination within fourteen (14) days of
the determination.
2. Petition. The aggrieved applicant may petition the EDA in writing for
reconsideration within fourteen (14) days from the date of the written
notice of denial. Any request to appear before the Board must be in
writing and must be submitted at least seven (7) days prior ro the
Board's scheduled meeting. Upon receipt of the written petition for
reconsideration, the EDA shall consider the petition at its next scheduled
meeting and advise the petitioner in writing of its decision within
fourteen (14) days ofthat meeting. The Board's decision will be final.
3. Re-application. Applicants aggrieved by the Board's final decision may
re-apply for revolving loan funds after ninety (90) days if the concerns
in the preceding application are adequately and appropriately addressed.
IX. Administration.
A. Loan review committee The Prior Lake EDA will serve as the loan review
committee. The final determination on all revolving loan applications rests with
the EDA, which is acting on behalf of the City of Prior Lake.
Page 6 of 12
B. Staff responsibilitX. Community development staff shall have the general
responsibility for coordinating the application process, reviewing loan
applications, preparing applications and recommendations for review by the EDA,
and coordinating the loan approval and service process as set forth in Subsections
C— F of this section.
C. Pre-a�plication process. All parties seeking revolving loan funds must file a pre-
application. Pre-application forms may be obtained from the Community and
Economic Development Department.
1. The pre-application form must be completed and submitted to the
Department for review and approval.
2. The pre-application form will request information regarding the
applicant, project scope, and project costs.
3. Upon Department approval, the applicant will be forwarded a revolving
loan fund application.
4. Pre-application forms may be submitted on an open basis throughout the
year.
D. Application process. All parties seeking revolving loan funds must file an
application. Application forms may be obtained from the Community and
Economic Development Department.
l. Components of application. Only completed applications will be
reviewed for consideration by community development staff. A
completed application is one that satisfies the checklist provided below:
a. Business plan describing the scope of the project, including site
plans, building plans, renderings, or blueprints; and
b. Project budget; and
c. Private financing commitment; and
d. Equity investment commitment; and
e. Proposed security; and
f. Company financial statements (3 years, if available); and
g. Personal financial statement; and
h. Credit check release; and
i. Mortgage of property to be improved; and
j. Proof of insurance of property to be improved; and
k. Number of jobs to be created or retained; and
l. Wage information for created and retained jobs; and
m. Amount of loan request; and
n. Other documentation as requested.
2. lncomplete applications. Community development staff, in its sole
discretion, will determine if the application is complete and actionable.
Incomplete applications will be assigned pending status and the
applicant will be informed in writing ofthe missing documentation.
3. Transmittal. Applications transmitted by oral, telegraphic, facsimile, or
e-mail will not be accepted.
Page 7 of 12
4. Determination of eligibility. Applicant eligibility will be determined by
community development staff using criteria enumerated in Subsection D
(1) (a-n) ofthis section.
5. Site inspection. As part of the eligibility determination process, the city
will inspect the property or building designated for improvements for
compliance with the city administrative ordinances and zoning codes.
6. Credit check. A credit check for the company and each of its principal
owners may be conducted by community development staff.
E. Loan ap�roval process. Community development staff will prepare loan
applications and make recommendations to the EDA, which acts on behalf of the
City of Prior Lake.
1. EDA agenda. Upon determining the eligibility of the completed
application and reviewing for credit worthiness and soundness of plan,
community development staff will place the loan application on the
agenda for the EDA's next scheduled meeting.
2. Criteria. The EDA will base its decision on the economic benefit to the
City of Prior Lake and credit underwriting typical to the lending
community including the borrower's ability to repay the loan, the
collateral offered to secure the loan, the number of jobs to be created or
retained, wage rates of jobs created or retained, and increase in the local
tax base.
3. EDA action. Upon placement on the agenda, the EDA shall approve the
application request, deny the application request, or table the application
request for consideration at a future meeting.
4. Notification of EDA action. The applicant shall be notified in writing
within fourteen (14) days ofthe EDA's decision in accordance with the
requirements set forth in Section VIfI, Subsection M ofthese guidelines.
5. Approval. If approved, the applicant will be sent a written commitment
letter that will outline the terms and conditions of the loan approval. A
copy of the commitment letter will be signed by the Borrowers and
Guarantors signifying acceptance ofthe terms and conditions ofthe loan
proposal and the conditions for funding. Upon the return of the executed
commitment letter, community development staff will begin the loan
closing process with the community development staff.
6. Closing. Community development staff, in cooperation with the city's
attorney, will prepare documentation and coordinate the closing with the
Borrower.
F. Loan servicin�. Community development staff will coordinate loan servicing
act ivit ies.
l. Monitoring. Community development staff will monitor loans for
compliance with the accepted terms and conditions including job
creation statistics and wage and benefit levels.
2. Reports. Community development staff and finance staff are responsible
for ensuring that all required reports are filed in a timely manner.
Page 8 of 12
3. Records. Computer files and conventional paper files will be maintained
for the purpose of documenting, tracking, and monitoring program and
project activities. Program records will be maintained primarily by the
Community and Economic Development Department and financial
records will be maintained primarily by the Finance Department. Where
applicable, the following records will be maintained:
a. Program records. The following program information will be
maintained in the program project file, including but not limited
to:
i. Environmental report; and
ii. Eligibility determination records as set forth in Section
IX, Subsection D (1) (a-n); and
iii. Property inspection report; and
iv. Progress reports; and
v. EDA Resolutions; and
vi. Correspondence; and
vii. Loan documents; and
viii. Executed loan agreement.
b. Financial records. The following financial information will be
maintained in the financial project file, including:
i. Copy ofthe executed loan agreement; and
ii. Disbursement data; and
iii. Progress reports; and
iv. Repayment data; and
v. Amortization tables.
4. Record retention. All program and financial records, supporting
documents, statistical records, environmental review records and other
records pertinent to the revolving loan program shall be maintained for a
period of at least three (3) years from the final project report and project
closeout date.
X. Delinquency. There shall be a notification procedure for delinquent loans.
A. The Finance Officer is responsible for the timely posting and accounting of all
loan repayments.
B. Thirty day notice. Upon thirty (30) days delinquency, the Finance Officer will
notify the Community and Economic Development Director (CEDD) of the
delinquency and the CEDD shall send the Borrower a delinquency notice
requesting payment within fifteen (15) days. A copy of the letter shall be
maintained in the financial project file.
� C. Forty-five day notice. If payment has not been received by the 45 day, a second
delinquency notice will be sent to the Borrower by the CEDD requesting payment
within fifteen (15) days. A copy of the letter shall be maintained in the financial
project file.
Page 9 of 12
D. Sixty day notice. If payment has not been received by the 60` day, the CEDD will
attempt to contact the Borrower by telephone to discuss the delinquency. The
CEDD shall also send a notice of default to the Borrower via certified mail
requesting immediate payment and advising the Borrower the delinquency will be
placed on the EDA agenda for discussion at the next scheduled meeting.
E. Ninety day notice. If no repayment plan is submitted by the Borrower, or if there
is no attempt by the Borrower to negotiate the amount due, the CEDD will contact
the City Manager and the City Attorney to discuss sending a ninety (90) day letter
calling due the loan in full.
F. Negotiation. Throughout this process, every attempt will be made to preserve the
company, the jobs and the loan funds.
XL Default. If the EDA determines a loan to be in default it will pass a resolution
declaring the entity in default and convey the matter to the City Attorney for
disposition.
XII. Other Federal and State Requirements.
Revolving loan fund recipients must also comply with all applicable federal and state
laws, executive orders and regulations governing:
A. Equal Opportunity, including:
1. Title VI of the Civil Rights Act of 1964, as amended (42 U.S.C. 2000d
et seq.) (24 CFR Part 1);
2. Age Discrimination Act of 1975, as amended (42 U.S.C. 6101) (24 CFR
Part 146);
3. Section 109 of Title I of the Housing and Community Development Act
of 1974;
4. Americans with Disabilities Act of 1990, as amended;
5. Section 504 ofthe Rehabilitation Act of 1973; .
6. Architectural Barriers Act of 1968; and
7. Equal Employment Opportunity, Executive Order 11246, as amended
(41 CFR Part 60).
B. Labor Requirements, including:
1. Davis-Bacon and Related Acts (40 CFR U.S.C. 276 (A)-7);
2. Contract Work Hours and Safety Standards Act, as amended (40 CFR
U.S.C. 327-333);
3. Copeland Anti-Kickback Act (40 U.S.C. 276c); and /
4. Fair Labor Standards Act of 1938, as amended (29 U.S.C. 201, et seq.) 1
C. Environmental Review. The City will be responsible for undertaking
environmental reviews in accordance with the Minnesota Department of
Page 10 of 1 ".'
Employment and Economic Development Environmental Manual. The
environmental review must be complete before funds are committed.
D. Air and Water Quality: Applicants will be required to comply with all federal,
state, and local laws and regulations concerning air and water quality. All
required review must be completed and permits must be issued prior to funding.
E. Flood Insurance. Section 202 of the Flood Disaster Protection Act of 1973 (42
U.S.0 4106) apply.
F. Anti-Piracy: Subsection 105(h) of the Housing and Community Development Act
of 1974 (42 U.S.C. 5305) specifically prohibits the use of CDBG funds to
facilitate the relocation of for-profit businesses from one labor market to another
if the relocation is likely to result in significant job loss.
G. Historic Preservation: All loans for demolition or rehabilitation activities must be
submitted to the State of Minnesota Historic Preservation Office (SHPO) for
review and consent.
XIII. Guidelines for State Funds.
The following rules, regulations, policies, and procedures govern State economic
development revolving loan funds.
A. Incorporation bv reference. The dissemination, use, and regulation of State
economic development revolving loan funds shall be generally governed by
guidelines including:
1. Prior Lake Economic Development Authority guidelines governing the
use of Federal Funds Sections 1 through XII of this document; and
2. The Minnesota Investment Fund (MS.] 16J.8731).
B. State Funds requirements. The following general conditions apply through the
Minnesota Investment Fund provisions:
1. Revolving funds must not finance more than one-half (50%) of the cost
of the project.
2. Businesses receiving revolving funds must pay each employee total
compensation that is equal to or greater than at least 110% of the current
federal poverty level for a family of four, as determined annually by the
U.S. Department of Health and Human Services.
3. Assistance must be evaluated on the existence of certain conditions,
including: (a) creation/retention of jobs; (b) increase the tax base; (c)
public funds induce private funds; (d) project has excessive public
infrastructure or improvement costs; and (e) provides higher wage levels
or adds to the workforce skills.
Page 11 of l2
4. Revolving loan funds may be used for land acquisition, building
construction or rehab, site improvements, public utilities &
infrastructure, and machinery & equipment.
C. Additions. The following additional provisions to Federal Funds Sections I
through X11 shall apply for State Funds:
1. Section VI, B— additional eligible activities include public/private
infrastructure and business incubators; and
2. Section VI, C— additional eligible costs include:
a. Infrastructure improvements. Costs associated with public
and/or private infrastructure associated with a development
project on commercial or industrial property. [National
Objective: N/A]
b. Business incubators. Costs associated with a business incubator
in Prior Lake, including building equipment, interior renovation
of building space, and direct assistance to eligible incubator
businesses. [National Objective: N/A]
D. Exceptions. The State economic development revolving loan guidelines shall be
exempt from the following requirements set forth in the Federal guidelines
referenced in Section XIII A(1) above:
1. Section VIII, E; Job creation
2. Section VIII, F; Slum and blight; and
3. Section XII, A through G.
Page l2 of 12
PRIDR LAKE REVOLVING L4AN FUND PLAN
I. Program Elements
A. Goals and Objectives '
1. The RLF will be used to assist businesses which wlll create jobs and alleviate
economic distress or adclress other urgent community development needs, ,
�
2. 70 leverage private fnvestment and provide debt financing to projects that
otherwise may not occur; especialIy, Eo leverage financing for development or
redevelopment resulting in the preventlon or eUmination of slums and blight,
3. To stimulate development for the purpose of job creation with specitic empha-
sis on benefits to low and moderate income individuals. i
�
B. Identlfication of the Areas Flnancing Problems
Like many communities, businessas 3n Prior Lake have ditfEculty securing capital to
undertake deve(opment ventures. Due to poor returns in distress sale situations
area lenders are reluctant to make loans €n excess ot 50•70% of value. In acldition
to conservat(ve loan to value ratios area Ienders are reEuctant to provide long-term
flnancing, even if the procesds of the #inancing are to be used for the purchase of
long-term flxed assets. These Issues are magnlfled for firms that are embryonic or
do not have a long history of operations and profitability. i
C, Targeting Crlteria
Requests for loans from the RLF are expected to be many and diverse. The use of
the fund should therelore be directed to those businesses whlch will do the most to �
soiidlty and strengthen the economic base of the area, provide permanent full-time i
employment to persons who are unemployed/underemployed. In its marketing and (
review process, the RLF will target the follow3ng and glve funding priority to them, i
1. Manufacturing and distribution businesses which serve to dlversity the [ocal
economy or add value to products. 'ft�ese businesses tend to build on
existing resources, diversify and strengthen the econamy {manufacturing and
dfstrlbutfon). These businesses can also serve as magnets for other business-
es especfally in the servica sector.
I
2. Businesses with a hfgh number ot tull-time permanent jobs at good wages. j
7his meets with the goal of increasing employment for under/ unemployed '
.persons and raising the average (ncome.
3. Loans will not be mada for retaii or commercial activitfes. Loans to retail ;
businesses may harm existing retailers and, thus not constitute a wise use of
public Tunds. i
4. Businesses that provide jobs to persons who are currently unemployed or ;
underempfoyed. Applicants wil! be urged to work wlth Job Training Programs ;
to help persons qualify for available jobs. Again, the goal is tul!-time perma- ;
nent employment,
I
i
�
5. Businesses owned by minorities, women, and Vietnam era veterans. These
, persons historically have had difficulty locating capital for business start up
and expansion.
_ D. Standards for the RLF Porttolio � !
i
The RLF porlfolio taken as a whole will meet the iollowing standards. At times �
Individual loans may vary from these standards due to high{y unusual circumstances
or overriding factors which make deviatfon a necessity.
Following are the mfnimum standards for the RLF portfolio:
1, A minimum ratEo of $15,000 in RLF proceeds per job created or retained.
2. Requirement that 51% of all the jobs to be created through the use of RLF �
proceeds will result in the hiring or be made avaflable to low and moderate �
fncome lndividuals pursuant to 24 CFR Part 570,208 (a)(4), The determination
of fncome levels wi{I be pursuant to HUD Sectlon Eight guidelines,
3. Job creation with the ftLF wilf be directed toward skiiled craft-persons and
technicians; semi-skillec! workers; and service trade lndustry workers, rather
than part-time or minimum wage jobs.
4. The requirement that $2 of private sector funding be contributed for every
dollar ot RLF funds. The private tunding is defined as financing frorn banfcs, i
investment companies or private investment on the part of the borrower for
other firms as a result of the ALF loan. Private funding does not include city,
state, or other public funding.
5, RLF tunds may be used for acqulsitlon of land, construction or rehab oi
manufacturingJwarehouse facilities, site improvements, professiona! fees, utilities
or inirastructure, purchase of machinery and equlpment and working capital.
6. Eligible businesses must be a"for profit' business. tVo loans will be made fot
commercial/retall activities.
7. The RLF will strive to encourage the development af the following types of ;
enterprfses: I
- Minority owned businesses, i
- Women owned businesses, j
- 8usinesses owned by Vietnam ara veterans. �
- Susinesses owned by physicalfy handicapped persons. '
- Business which propose to use foan proceeds for poliutian abatement and i
energy conservation.
8. Prior to approval of a loan request the RLF Board will make a determination �
that the proposed loan is deemed necessary or approprlate pursuant to HUD �
gufdelines as detalled on the attachec[ Exhibit A. This determinatfon must be i
evidenced through a written analysis that is to accompany any request or i
recommendation for approval by the RLF Board.
i
z
I
, - ,� _- - _�`-_ __... ... .- ---
_ _ �. . -- - - - -- - -- - �
E. Financing Pollcies
1. A minimum loan size of $15,000 and a maximum loan size of $100,000. It Es
anticipated thai tlte average size of subsequent loans wlEl be approximately _ •
$25,000 - $50,000.
2. RLF funds are to be used for fixed asset purchases. Loan guarantees will not
be made.
3. Loan terms for iixed assets are anticlpated to range befween 10-20 years for
fand and buildEng and 7-10 years tor machinery and equ(pment.
4. Interest rates are to be negotiated ranging irom four percentage polnts below
the current money center bank prime rate as quoted in the Wal! Street
Journal but no less than 4% or the maximum interest rat� allowed under state
law,
5. The RlF E3oarcE msy provide deferments on principal repayments and subordi-
nation of loans to meet the credit needs of borrowers.
B. 7he minimum equity requirement for par#icipation on an RLF loan is equai to
10% of project cosis. It is the intention of the RLF Board to secure each
loan with a iirst or second mortgage on real estate or a UCC filing on I
equipment, inventory and/ar receivables.
i
7. RLF loa�s will only be restructured if the restructuring improves the borrowers
repayment abilfty. �
8. White the R�F Board Is prepared to considor long-term loans, attempts wi[I be
made to structure debt (n such a manner as to encourage prepayment or I
early recapture of the proceeds. One method that this may accomplished is �
to provide a 5 year t0rm with a 20 year amortization period and work with the ;
borrower to find private sources of capital to �eplace the RLF loan at the end
of the initlal ierm.
9. Interest earnings or other profits earned from the saie of foan will be returned
to the RLF tund for relenciing. An exception to thfs is that ttse RLF Board i
may authorize that up to 25% of the interest earnings or profits may be �
utflized for administrative casis, i
i0. The RLF 6oarc! may charge a 1,6p/o foan origination fee to borrowers partici- ;
pafing in the RLF program. 7he use of these Tunds wil! be to pay the costs :
associated wlth the prepara#ion and st�ucturing of applEcations and retated ;
cos#s such as accounting to conduct an appropriate review of such applica-
tlons. Borrowers are also responslble for associated legal fees refating to j
closing the RLF loan. i
i
11. 7he RL� Board wlll require that proposed borrowers provide bank turn down �
letters and bank commitment letters evidencing the limitation of private capital
to their project,
12. Applicants to the RLF fund must also provide evidence ot their attempts to
utilize and coordinate the use of other public tunding sources suah as SBA, �
tax (ncrement financing and other state or local programs, i
3 �
�
�
�
--- --• --- �
i
F. Related Activities '
' 1. Technical and management assistance. The RLF Board will provide tAChnicai I
� and management assistance to existing or start-up companles by referring ',
them to approprfate organizations such as the Small Business Management -
Program or SmaEl Business Develvpment Center. 7hese organizations all have
profesaionally tralned stafE that can provide technical and management
consultation to buslness owners and thefr executives.
2. Loan packaging. Companies seeking assfstance with loan packaging services �
may be aided by the RLF statt and/or other approprlate public or prlvate ;
sourcas includfng Smal) Business Adminfstration, Prior Lake Business Develop-
ment Committee, Minnesota Department of Trade and Economlc Devefopment
or private consult€ng firms. I
3. Linking jobs to the long-term unemployed. The AL� Board will worEc closely
with the State af Minnesota's Department of Jobs and Training Offices to
ensure that reciplents of RLF loan proceeds receive referrafs with a placement
of unemployed and underemployed Indfviduals. !n additlon the Job Training
Ofiices and the area VocationaE Technica( Institute can provide other benefits
to these companies by (dentifying and designing speciallzed training programs �
to meet both the needs ot the companles and thelr employees,
II. Administrative Elements Of The Plan
A. Loan Administration Baard
The l.van Administration Board will conslst of representatives ot the Prior Lake
Business Developmeni Committee who will serve as the board of directors and the
loan revlew committee. These directors are appointed by the Prior Lake City
Council. The dutfes of the RLF board and (oan review commiltee are as follews:
1. Review and approve or deny ali appEications for loans under the terms ot this
program.
2. �rom time to time, amend the RLF program rules as required by necessity.
3, Report to the City Council, �
B. Staft Capacity
Staffing tor the RLf will be provided by the City of Prior Lake, Staff dutles for the
tund (nclude the following; '
i
1. Program Marketing - Staif will market the RL� through local msdia, speaking
engagements, Efterature, and business visits. 7he goal is to have every !
elfgible business aware of the program. �
2. Loan Structuring and Packaging - Staff wilt assist applicants in structuring the I
financial package to coordinate with loans from other programs, bank invofva• �
ment, equity, and other necessary components. Staff will also assist appli- �
cants in completing the necessary form and documentat(on for the loan.
3, Management Assistance - Sta#i will assist applfcants in locating additlonal ,
business, financial and management training as may be needed by the '
business.
q i
I
. ... --- �.. - -- -- ----- - • --_ �_i _ ... .. . —�-----. ._.._
4. Linking jobs to long term unemployed - in order to insure ihat long term
unemployed and low and moderate lncome persons have maximum opportunity
to be considered for Jobs, statt will encourage all applfcants to work with the `
Mfnnesota Department of Emptoyment Services and Local Employment and -
Yraining provfders. _ "
i
5. FinanclaE Management - statf wifl provEde all tinancfat management of ihe RLF i
including, loan disbursements, loan servicing, audits and record keeping. �
The economic development staff ot the City of Prior Lake is currently comprised of 1
Bonita Carlson, Asslstant Clty Manager anc! Roger Guenette and Ed 7schlda, �
I
Development Consultants, All ihree of these indfv€duaEs have received protessional �
training in the marketing and fmplementation of eoonomic development. Between F
them they have 40 years of experlence In economic deveiopment financing, loan
packagfng and grant preparation/adminlstration. �
C. Marketing Strategy
The RLF Board will publlsh an announcement and hold a press conierence promot-
Ing th� RLF program. Since the lnitfaf strategy of the RLF program Is to make a
lump sum loan to E M Products, Inc, additional marketfng and publicity wlll be
(imited until such time as foan proceeds are recaptured and avallabie for relending. ,
tlpon the recefpt of recaptured proceeds the RLF Board and staff will publlclie the
program through local media contacts, direct mallings to selected businesses and
presentation to local buslness associatlons.
D. Loan Seiection and Approval Process
The seteciion and approvaf processes wiil be as foliows:
f . Pre-applicatlon !
�
- A brfef pre-application will be required of all potential cifents in order to �
determine the proposed struciure and eligibifity of the proJect (see at- �
tached).
- Ail pre-appllcatlons wfll be screened by RLF staff for efigibility and written �
inviiations for full applications or denials will be provlded w{thin two weeks ;
of receipt. If denied, the applicant may appeal to the Loan Review i
Commfttee. �
I
2. Full application �
- No form is provided. Applicants wili need to rrieet all requirements on
RLF checklist,
- When a full applicat(on is invited, a RLF statf site visit and discussion with
the business about tull applicaUon detalis will take place.
- When completed applications are received, RLF staff wfll conduct a
thorough review including:
* eligibiHty with RLF plan ''�
* economic benefits of the proposect project
* balance sheet/ratio analysis
* repayment abllity
5
i
* management skill
* collateral and ifen posltion
� * credit risk of applicant
; * need for special requirements, i,e. insuranoe, personal guarantee
, * environmental review -
* civif rights review
- RI.F staft wili prepare recommendatlon to be presented to the l.oan Review
Board based on its review.
- The Loan Review Committea reviews full appllcatEon, staff recommendations
and makes declslon on the applicatlon.
- RLF staff informs applicant in writing of the Board decision.
E, i.oan Servicing.
Loan closings wifl be handled by RLF staff and the Prior Lake Cfty Attorney in
conJunctton with the attorney of the borrower.
Loan servlcing will be handled by RLF statt in conJunction with the City's Finance
Department. A separate aocounting system wfthin the City's general ledger will be
established. Sanking services will be provided through the Cfty of Prior Lake wlth
separate accounts establlshed tor the RLF tunds. RLF staff will monitor and keep
recards of all accounts in terms ot repayments and speclal provisions. Monthly
reports will be generated for all individual loans including principal, interest, fee
payments, etc,
Dellnquency will be handied in a tirm yet llexibie way with provisions for moditying
or restructuring conslstent tvith program objectives and rasponsible money manage-
ment. Any moditications af loan terms and conditions must be requested in writing
by the appllcant and approved by the Loan Revfew Board.
Defaufts wif! be handled on a case by case basis. Specific action will depenct on
the nature and circumstances, amount and avaiSability of collateral and costs versus
benetit of liquidating assets or other collateral, Any action taken will be handled by
RLF staff and at the direction of the Loan Review Board.
F. Sources Of Funding 7o Cover Admfnistrative Costs
Administrative costs wil{ be financed through applicatlon fees of 1.5% chargad to
the borrower and up to 25% o# the interest ear�ings realized from RI.F loans.
Initiai administrative costs wiil be financed by the City of Prior Lake.
G. Cspital Management Strategy
As previousiy mentioned, the initia! use of RLF proceeds witl be to capitalize the
E,M. Praducts, Inc. develapment. Upon recapture of those loan praceeds the RLF
wili have additional capital for relending. One optfon that may be considered is for
the RLF to sell off {oans in order to more quickly replenish capital. In additlon to
the increase in the capital account due to the return on interest the RLF board will
attempt to expand the capital base by soliciting additlonal contributions irom various '
pubilc and private sources.
ln the event that the Prior Lake RLF has difiicuEty (dentifying enough borrowers to
effectively impact the economic distress 3n the area the use of the recaptured RLF ',
6 '
...___._--•.�... . _ --� -- - , • -- •--, - - �. . -•--------- - -- - - -� - - ...___._--------r---�---- -._.._.__ .._ _._ _.._ _ !
'
proceed may be reallocated for other economic adjustment purposes as allowed by
HUD. To acaomplish the alEernative use of RLF proceeds, the Baard of Qirectors
wlli tteed to clevelop a Reuse Plan which includes an analysis oi the economic
adjustment needs for Prior Lake at that point and tfine and identifies the specific �
economic adjusiment activiifes which would be undertaken with the proceeds. 7his - !
Reuse Plan must be d�atted and submitted to the regional F{UD office within 36
months from the date of originai grant award, Specific activlties whfch could be
Identified in the Aeuse Plan Include the acquisiEion of property and intrastructure
improvements to facifitate development of industrial parks, the development of
specialized training programs to meet the needs of disiocated workers and other
activities as allowed by HUO,
H. Other Hequlrements
1. Civil Rights
IVo applicant may be denied a loan on the basis of race, color, national
origfn, rel(gion, age, handicap or sex. All advertisement and promot[on of this
program will emphasizs this civil rights provision and the targeting criteria
establfshed to promote affirmative actfon.
Borrowers from the RLP will be required to complete ihe Assurancs of
Cornpliance tor this in Ep540 and E0612. FiLF will promote this provision on
an angoing basis.
2. Certificate of Non-Relocatian
Each applican# will be requlred to complete an "Employers Certificate of
Nonrelocation' statfng that the project for which funds are being sought will
not relocate )obs from ons labor market to anothe�.
3. Historical Preservation
All loans for constructlon must be submitted to the State of Minnesota Historic
Preservatlon Oftice for review and consent.
4, Davis-Bacon
Ali laans tor construction must meet the requirements oi the Dav'ss-Hacon Aot
as amended {40 U,S.G. 276a-276a.5j.
b. Access for the Handfcapped
ff the RLF finances a construction proJect to which the public will have
access, provEslons for access to the handicapped must be (ncluded,
6. Flood Ptains and Wetlands
The Loan Fleview Board shall not approve loans made for construction In, or
alteration of, a wetland or 100 year flood plafn as determined by soils
mapp9ng, USGA studies or other accepted means if adverse efiect would be
caused by that constructlon.
7
, The Loan Fieview Board shall not approva projects which would result in
' constructtan of other than underground utlllties in the 100 year iloodplain as
_ de4Jned by FEMA unless all capacity removed irom the iloodplaln is restored
. by excavation or other appropriate means. -
Wo project shall be approved which results in the atteration of any wetland, or
in any adverse impact on a wetland, without prior consultation with, an
consent of the U,S. Department of the Interfor, Fish and Wiidlite Service.
When applEcable, applicants will be required to purchase f�ood hazard insur-
ance.
7. Air and Water Quality
Applicattts will be required to comply wlth a!I federal, state, and Eocal faws
and regulatfons concerning air and water quality. All required reviews will be
compfeted and permits issued prlor to iunding.
8. Environmental Review Procedure
The staff of the RLF will review each applicatfon for conformance with sections
E.1 through 7 above, To conduct its review, the staff will contact locai (city
and county) planning and zoning authorities, site specific ma�s and the
regulatlons of FEMA, USGS, SCS, SHPO and other applicable agencies will
also be consulted, All local, state and federal regulations must be compliec!
wfth pr3or to granting a loan.
For each ioan application, the staff must make a finding of compliance or no
adverse impact. !f there is a tinding of non-compllance, a plan for mitigation
acceptabla ta the regulatory agancy must be tiied with RLF Board. RLF staff
wil! monitnr complianoe with the mittgation plan.
8
.... . . . -�-- -• --... �. .._.,_ - --------- . _ — - .. _.- - ------r -------------• -
PAGE 1
" PRIOR LAKE REVOLVIIVG LOAN FUND PRE-APPLICA'fION �
' I
, NAME AND ADDRESS OF BUSINESS 7ype of Business - �
Date Established �
I
• Telephone No.
Structure of Business:
i
Proprietorship Corporation Partnership �
Business Owners Names and Addresses:
1. Title:
�wnership Percent
2, Title:
Ownership Percent I
i
3, 7itle:
Ownership Percent
Describe the details of the [oan you are applying #or:
Loan Amount:
Interest Fiate: �
i
(
7erm: i
�
Collateral available and market value:
f
Spec3al payment terms or conditians: �
Are the owners of the company wlll(ng to disclose their personal financiai conditfon and sign ;
persona! guarantees? ;
APPLfCAN7'S NAME (type or print): SEgnature ot Appllcant: �
�
;
;
�
Date of pre-application:
�
�
.,.._....__..__.. . _. _. . . ..-- , ., .
.. . . __ _ . . . . ------
- --- - J
,
PAG E 2
PRIOR LAKE REVOI.VING LOAN FUND PRE-APPI.ICA710N ,
Briefly describe the project you are praposing and your current business activity, lndicate
information on any existing flnanciai condltions/sftuatlons whlch mlght aNect the credit worthiness
af the application. Also describe !he reasons that you believe RLF proceeds are necessary to
complete your proposed proJect,
i
i
i
PAGE 3
� PR10R LAKE REVOLViNG LOAN FUND PRE-APPL{CATiON
� -
PROJECT COSTS: FUNDING SOURCES:
Property acquisitlon $ Owners Investment $
Slte Improvements eank
Renovation of an Other financial
existing building institutions
New Cflnstruction Other publfc funding
Purchase machinery
and equipment TOTAL $
Professional Fees
Working Capital
Adminfstratlon
Other (Infrasfruciure
Relooa#ion expense, etc.)
TOTAI. $
BANK NAME AND ADDRESS: Contact Person:
Telephone Number:
Job lmpac# (do not include owners)
Jobs created Jobs retained*
_ Full time year around Full time year around
Pa�t time Part time
_ Toial hours per year for all Total hours per year for aIl
part time employees part time ernpioyees
_ Average wage or salaty Average wage or saiary
* Jobs that would be iost if this project is not funded
---�---..._..--------- ----�------__.-------------- _ __---- --- ;
,--t-
O � PRlp�
ti �
v �' 4646 Dakota Street SE
Prior Lake_ MN 55372
`�IHrvESO'�
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: April 9, 2012
AGENDA #: 6.D
PREPARED BY: Casey McCabe, Community Development Specialist
AGENDA ITEM: CONSIDER APPROVAL OF THE AMENDED EDAC BYLAWS AND ITS RE-
FERRAL TO THE CITY COUNCIL FOR FINAL APPROVAL.
DISCUSSION: Introduction
The purpose of this agenda item is to request EDA approval of the proposed
EDAC bylaw amendments and direction to refer the bylaws to the City Council
for final approval.
History
As stated in the EDAC bylaws, the Bylaws shall be reviewed annually by the
Economic Development Advisory Committee, and any changes or amendments
agreed to by a majority vote of the Committee shall be recommended to the City
Economic Development Authority and ultimately to the City Council for final ap-
proval.
Conclusion
The EDAC reviewed the bylaws on Thursday, March 29, 2012 and unanimously
recommended approval of the following modifications:
1. Section 205. Reference to City Council has been deleted and Economic De-
velopment Authority has been inserted.
2. Section 401. Reference to regular meetings shall be held on a quarterly ba-
sis has been revised to read, "Regular meetings shall be held on a minimum
of a quarterly basis during the calendar year...."
With no regularly scheduled meeting dates, the reference to, "In the event
that such a date shall fall on a legal holiday, the meeting shall be held on the
next succeeding day," does not apply and has been deleted.
The last sentence stating, "Regular meetings may be rescheduled, canceled
or changed depending upon unique circumstances and subject to the ap-
proval and consent of both the Chair and/or Vice-Chair," is a duplicate sen-
tence and has been deleted.
3. Section 402. With no regularly scheduled Monday meetings the reference to
"a copy of the notice, agenda and accompanying materials... shall be re-
ceived by the Wednesday prior to the Monday meeting," has been deleted.
This reference has been replace with, "a copy of the notice, agenda and ac-
companying materials shall be received... no later than three business days
prior to the next scheduled meeting."
4. Section 402. The EDAC approved the recommendation to modify the
amount of inembers that constitutes a quorum from a majority of committee
members to fifty percent of committee members.
ISSUES: The proposed amendments to the bylaws are proposed by the EDAC for correc-
tion and clarification purposes only.
FINANCIAL None.
IMPACT:
ALTERNATIVES: 1. Motion and second to approve the EDAC Bylaws revisions as proposed or
with further amendments.
2. Upon approval, forward recommended amendments to City Council for final
approval of the EDAC Bylaws.
3. Take no action and provide direction to staff.
RECOMMENDED Alternatives Number 1 and Number 2
MOTION:
ATTACHMENT: 1. City of Prior Lake Economic Development Advisory Committee Bylaws with
proposed amendments.
CITY OF PRIOR LAKE ECONOMIC DEVELOPMENT ADVISORY COMMITTEE BYLAWS
Amendment Approval
EDA City Council
April 9 2012 d�ly=����8� � A�ril 16, 201,2 '� ��" ��''n� �
SECTION 100
PURPOSE
101. The purpose of the City of Prior Lake Economic Development Advisory Committee By-
laws is to provide a set of operating procedures for the Economic Development Advi-
sory Committee, and to establish a code of ethics and conduct.
102: The Bylaws shall be reviewed annually by the Economic Development Advisory Com-
mittee, and any changes or amendments agreed to by a majority vote of the Commit-
tee shall be recommended to the City Economic Development Authority and ultimately
to the City Council for final approval.
SECTION 200
STRUCTURE OF COMMITTEE
201. COMMITTEE CREATED: The City Council has established an Economic Develop-
ment Advisory Committee. The Committee is advisory and its purpose is to study and
provide reports, analysis and recommendations to the Economic Development Authori-
ty on economic development matters as assigned.
Members to the Economic Development Advisory Committee shall be appointed by the
Economic Development Authority. Members shall serve three (3) year-terms begin-
ning November 1 S ` and ending October 31 St
The members of the Economic Development Advisory Committee shall annually elect
officers in accordance with the procedures of paragraph 205 herein.
202. DUTIES OF THE COMMITTEE: The duties and responsibilities of the Committee in-
clude:
1. Serve as a liaison between city government and the community;
2. As requested, review and comment on economic development and redevelop-
ment policies to the Economic Development Authority.
3. Make recommendations to the Economic Development Authority regarding
economic development issues, strategy development and implementation and
other initiatives that can be undertaken by the EDA to expand and strengthen
business retention & expansion.
4. Conduct Public Hearings, as requested, by the Economic Development Au-
thority.
5. In conjunction with EDA members or staff, introduce potential or new business
representatives to others in the commercial community.
203. APPOINTMENT: The Committee shall consist of a number of inembers as may be
determined and appointed by the Prior Lake Economic Development Authority for a
term of three (3) years from November 1 to October 31. The Committee shall consist
of one City Council liaison, the City Manager or designee, and a number of residents
or no more than 40% non-residents, but affiliated with a business located within the
City of Prior Lake, as may be determined and appointed. Committee members may
serve based upon attendance and participation, continued residence or affiliation with
a business in Prior Lake and in accordance with the term limit policy established by the
City Council.
204. VACANCIES: If the office of Chair becomes vacant, the Economic Development Advi-
sory Committee shall appoint a replacement in accordance with Section 204. If the Of-
fice of Vice-Chair becomes vacant, the Committee shall elect a successor from its
membership at the next regular meeting, and such election shall be for the unexpired
term of said office.
If an appointed member of the Economic Development Advisory Committee resigns, is
terminated, reaches a term limit, or otherwise vacates a seat of the Committee, the
Prior Lake Economic Development Authority shall appoint a replacement in the follow-
ing manner:
1. Applications are solicited. A Notice of the vacancy is made public and individuals
may be encouraged to consider the position.
2. The City Manager or his designee, the Economic Development Authority member
who has been appointed as the liaison to the Economic Development Advisory
Committee, or who has been appointed to serve on the work group, and the com-
mittee chair (unless the appointment is the committee chair appointment or re-
appointment, or in the case where no chair has been determined) shall interview all
candidates and make a recommendation to the full Economic Development Author-
ity. No person will sit on any advisory authority charged with the selection of the
successor for that person.
3. The recommendation of the interview panel shall be presented to the Economic
Development Authority and the Economic Development Authority may accept or re-
ject the recommendation. If the recommendation is rejected, the Economic Devel-
opment Authority shall appoint another individual or decide to reopen the vacancy
to the public for new candidates.
205. OFFICERS: The Officers of the Prior Lake Economic Development Advisory Commit-
tee shall be a Chair, Vice-Chair and a Secretary. The City Manager or his/her design-
ee shall serve as Secretary of the Committee. The selection of the Chair or Commit-
tee members will be filled in accordance with City Council Bylaws.
Chair: The Chair of the Committee shall be appointed from among the Committee's
membership for a two-year term in November by majority vote of the Economic Devel-
opment Advisory Committee. The duties of the Chair include:
1. Review and approve meeting agendas.
2. Preside at meetings.
3. Participate with the Economic De_v_elopment Authorit� ��1:�-Ge��+4 in the selection
---__-- --__----__ _ ------ -
of Committee members.
4. Represent the Committee as appropriate.
Vice-Chair: The Vice-Chair shall be selected annually by the Committee and shall per-
form the duties of the Chair in his/her absence. The Vice-Chair shall assume such
other duties as assigned by the Chair.
Secretarv: The City Manager or his/her designee shall act as the Secretary and shall
be responsible for recording and compiling a written summary of all official activities of
the Committee.
206. TERM LIMIT: It is the policy of the Prior Lake City Council to impose a three term (or 9
year) service limitation for all appointed positions within the committees and commis-
sion. Partial terms do not count toward the term limitation. The purpose of the term
limit policy is to encourage resident participation on City advisory bodies and provide
community members with the opportunity to participate in their local government.
207: REMOVAL OF MEMBER: Any member of the Economic Development Advisory Com-
mittee may be removed from office for just cause by a four-fifths (4/5) vote of the entire
Economic Development Authority. Such member shall be entitled to a public hearing
before such a vote is taken. In addition, any member may be removed for nonattend-
ance at Economic Development Advisory Committee meetings by action of the Eco-
nomic Development Authority.
SECTION 300
STATEMENT OF ETHICS
301: POLICY STATEMENT: The City of Prior Lake recognizes our system of democratic
representative government is dependent in large measure upon people having trust
and confidence in their public officials. The public rightfully expects governmental offi-
cials will conduct City of Prior Lake business in ways which benefit the public generally
and public office will not be used chiefly or improperly to advance personal interest.
The City of Prior Lake has pledged the goals of fair, efficient and honest government
will be fostered and that it will strive for integrity and objectivity from all of its officials.
1. The City of Prior Lake finds that the proper operation of democratic representative
government requires that:
• Elected and appointed officials be independent, impartial and responsible to the
people;
• Governmental decisions and policy be made in the proper channels of the gov-
ernmental structure;
• Public office not be used for personal gain; and
• The public have confidence in the integrity of its government.
2. The City of Prior Lake shall adhere to the highest ethical standards that enhance
public trust in local government by:
• Creating transparency in its actions through honest and open communication;
and
• Basing decisions and adopting public policies based on what is in the best in-
terest of the public and overall community;
• Supporting the public's right to know the public's business;
• Exercising fairness, optimism, responsiveness and respect in communicating
with the public.
• Providing a forum and periodic training for public officials and staff to discuss
organizational values that reflect high standards and current conditions and
concerns.
3. The City's Statement of Ethics shall be liberally construed in favor of protecting the
public's interest in full disclosure of conflicts of interest and promoting ethical
standards of conduct.
302: GIFTS AND FAVORS: No public official shall accept any valuable gift, favor or thing of
value, regardless of amount whether in the form of money, service, loan, thing or
promise from any person which to the official's knowledge is concerned, directly or in-
directly in any manner whatsoever in business dealings with the City.
303: USE OF EQUIPMENT AND FACILITIES: No public official shall request or permit the
unauthorized use of City-owned vehicles, equipment, materials, property, labor or ser-
vices for personal convenience or profit.
304: CONFLICT OF INTEREST: Except as authorized in Minn. Stat. 471.88, a public of-
ficer who is authorized to take part in any manner in making any sale, lease, or con-
tract in official capacity shall not voluntarily have a personal financial interest in that
sale, lease, or contract or personally benefit financially therefrom. (Minn. Stat. Section
471.87)
305: A public official or local official elected to or appointed by a metropolitan governmental
unit who in the discharge of official duties would be required to take an action or make
a decision that would substantially affect the official's financial interests or those of an
associated business, unless the effect on the official is no greater than on other mem-
bers of the official's business classification, profession or occupation, must take the
following actions:
1. Advise the City Attorney of the potential conflict of interest as soon as possible,
preferably before the meeting; and
2. The City Attorney shall determine whether a disqualifying conflict of interest exists.
3. Orally inform the Committee of the potential conflict and abstain from any participa-
tion in that agenda item.
306: The purpose behind the creation of a rule, which would disqualify public officials from
participating in proceedings in a decision-making capacity when they have a direct
conflict of interest in its outcome, is to insure that their decision will not be an arbitrary
reflection of their own selfish interests. There is no settled general rule as to whether
such an interest will disqualify an official. Each case must be decided on the basis of
the particular facts present. Among the relevant factors that should be considered in
making this determination are: (1) nature of the decision being made; (2) the nature of
the pecuniary interest; (3) the number of officials making the decision who are inter-
ested; (4) the need, if any, to have interested persons make the decision; and (5) the
other means available, if any, such as the opportunity for review, that serve to insure
that the officials will not act arbitrarily to further their selfish interests.
307: MISUSE OF OFFICIAL POSITION: No elected or appointed official may use his or her
official position for a purpose that is, or would to a reasonable person appear to be
primarily for the private benefit of the official.
SECTION 400:
CONDUCTING MEETINGS
401: REGULAR MEETINGS: In conformance with the Minnesota Open Meeting Law all
meetings of the Committee are open to the public. Regular meetings shall be held on
a minimum of a quarterly basis during each, calendar vear at Prior Lake City Hall, 4646
- _ . __
Dakota Street SE, Prior Lake, Minnesota. a 4ho o„o.,++h-,+�������}�}_{�{��
�+da��f��r�o�+� ,9 j;-;a;�e�ie4d � 4ho .,o.,+ �, ,�„ tid+� Regular meetings
may be rescheduled, canceled or changed depending upon unique circumstances and
subject to the approval and consent of both the Chair and/or Vice-Chair. '^ +",T, °�T
�y chnll f�ll nn � Iorr�� hr�lirl��r 4ho moo+inrv ch�ll ho holrl nri �ho nov4 ��^�_
, ,,,.,�.,,, „�„ w� „�.� ..,. ...� ..�
�
402: NOTIFICATION: All regular meetings of the Committee shall be noticed by:
1. Posting at City Hall for at least two (2) days prior to the meeting.
2. A copy of the notice, agenda and accompanying materials shall be received by the
Committee, Economic Development Authority, staff and others designated by the
City Council, no later than three. business davs prior to the next scheduled t�ie-
meeting and in no case later than two (2) days
prior to a special meeting.
3. Notice of any Public Hearing must be published in the official newspaper a mini-
mum of ten (10) days prior to the date of the hearing.
403: SPECIAL MEETINGS: Special Meetings of the Committee may be called by the Chair,
or two (2) members of the Committee for the purpose of transacting any business des-
ignated in the call. Staff may recommend calling a special meeting, but must receive
approval from either the chair or two members of the Committee. The call for a special
meeting may be delivered prior to the time of the proposed meeting to each Committee
member of the Committee at least two (2) days prior to the special meeting. At such
meetings, no business shall be considered other than as designated in the call.
404: QUORUM FOR REGULAR AND SPECIAL MEETINGS: Fif��ercent of Committee,
members A r-r�a� � mf�ers shall constitute a quorum for the purpose
of conducting its business, but a smaller number may adjourn from time to time until a
quorum is obtained. When a quorum is in attendance, action may be taken by the
Committee upon a vote of a majority of the Committee present.
405: CONDUCT OF BUSINESS AT MEETINGS: The agenda for a regularly scheduled
meeting shall include the following in order of business:
1. Call to Order
2. Approval of minutes of previous meeting(s)
3. Old Business
4. Other Business
5. Staff Update
6. New Business
7. Adjournment
406: PUBLIC HEARINGS: The Economic Development Advisory Committee may, at the
request of the Economic Development Authority, conduct a Public Hearing on any sub-
ject or issue relating to matters within the scope of its jurisdiction. The EDAC will pre-
pare a report to the Economic Development Authority based regarding public input re-
ceived on the subject or issue.
FORMAT: Public hearings shall be conducted in the following manner:
1 The presiding officer announces the subject of the public hearing.
2 The Economic Development Advisory Committee should open all public hearings
at the time indicated in the public hearing notice, or as soon as possible thereafter.
From a practical standpoint, not all hearings can be opened at their designated
time. If the Public Hearing is being conducted as part of a regular meeting of the
Economic Development Advisory Committee the start of the Public Hearing may be
delayed until any pending business is acted upon. However under no circumstanc-
es may a public hearing be opened prior to the time specified in the notice and
published in the official newspaper.
3 Staff and/or a consultant make a presentation or report on the subject matter of the
public hearing.
4 At the conclusion of any presentation or remarks by Staff and/or a consultant, the
presiding officer asks the Economic Development Advisory Committee members if
they have questions of the Staff or consultant.
5 The presiding officer requests a motion and second from a member of the Eco-
nomic Development Advisory Committee to open the public hearing and calls for a
vote.
6 The presiding officer declares the public hearing opened, announces the time and
then proceeds to ask for citizen input, comments and questions.
6.1 Members of the public, interested parties or their authorized representatives
may address the Economic Development Advisory Committee orally. If the
speaker intends to present written or hard copy materials to support their
presentation to the Economic Development Advisory Committee, they must
provide the Staff, at the time of their presentation or before, copies of the
original for distribution to Committee members, City Staff and the Recording
Secretary. The materials will be included in the public record. If the speaker
intends to present audio or video materials to support their presentation to the
Economic Development Advisory Committee, such materials must be in an
electronic format that is compatible with the City's existing equipment. An
audio or video presentation may not introduce testimony from any person
other than the author. The electronic materials must be submitted to the Staff
by 12:00 noon of the day of the meeting.
6.2 If unable to attend the meeting, members of the public, interested parties or
their authorized representatives may submit written comments and supporting
materials. Nine (9) copies of the comments and materials must be submitted
to the City Staff prior to the Economic Development Advisory Committee
meeting. The comments and materials will be distributed to Committee
members, City Staff, and the Recording Secretary. The written comments
and materials will become part of the record, but will not be read aloud at the
meeting
6.3 Recorded testimony if unable to attend a meeting. Members of the public, in-
terested parties or their authorized representatives may submit testimony to
the Economic Development Advisory Committee using a prerecorded audio
or video communication. An audio or video communication must be in an
electronic format that is compatible with the City's existing equipment. An
audio or video presentation may not introduce testimony from any person
other than the author. The author of the recorded testimony must provide
nine (9) copies to the City Staff at least seven calendar days prior to the
meeting in order to allow Staff an opportunity to view the presentation on the
City's equipment to make certain there are no technical difficulties with the
equipment. It is the responsibility of the individual using an audio or video
format to consult with the City to determine compatibility. The City Depart-
ment responsible for the agenda item will also prepare a brief summary of the
audio or video presentation. The video presentation will not be played at the
Economic Development Advisory Committee meeting, but the presentation
and the summary will be provided to the Economic Development Advisory
Committee as part of the agenda package. The presentation and the sum-
mary will become a part of the public record. Generaily, agenda packages
are distributed to members of the Economic Development Advisory Commit-
tee on the Wednesday preceding the meeting.
7. After all persons have been heard, the presiding officer will ask twice whether there
are any other persons in attendance who want to be heard on the matter pending.
If there is no other testimony, the presiding officer requests a motion to close the
public hearing. Once the vote is taken, the public hearing is closed. The presiding
officer announces, for the record, the time the public hearing is closed
8 The Economic Development Advisory Committee addresses the subject matter
through deliberation. The Economic Development Advisory Committee may ask
questions of the Staff. If the public hearing has been closed Committee members
should refrain from calling upon a member of the public except for the sole purpose
of asking a question that can be answered by a"yes" or "no" response.
The presiding officer will call upon each member of the Economic Development
Advisory Committee for their comments and reaction to information received from
the Staff presentation or public hearing comments.
407: VOTING: All members of the Committee have equal voting authority.
SECTION 500
SCOPE OF POWERS AND DUTIES
501: POWERS AND DUTIES: The Committee shall act in an advisory capacity to the Prior
Lake Economic Development Authority and shall advise on Economic Development
matters identified in Section 100 or as assigned to the committee by the Economic De-
velopment Authority. The Committee Chair shall give an accounting of the Committee's
activities with respect to its purposes, goals and objectives. Additionally, specific pow-
ers, duties and responsibilities may be assigned to the Committee upon approval of
the Economic Development Authority.
502: SUBCOMMITTEES: The Committee may divide its membership into Subcommittees
as it deems necessary to implement its goals and objectives.
SECTION 600
AMENDMENTS
601: AMENDMENTS: These bylaws shall be reviewed by the Committee annually. The
Committee may recommend revised bylaws to the Economic Development Authority
who will act upon them and submit to the City Council for final approval.
O � PRIp�
F� � v 4646 Dakota Street SE
Prior Lake, MN 55372
' � 1 INNESp� CA
PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY
DRAFT AGENDA
Monday, May 14, 2012
4:00 p.m.
Reports included with this agenda can be found in the Document Center at www.cityofpriorlake.com
Please follow this file path: City of Prior LakelEconomic Development Authority120121May 14, 2012
1. CALL TO ORDERIINTRODUCTION
2. APPROVAL OF AGENDA
3. APPROVAL OF MEETING MINUTES
A. February 13, 2012
4. PUBLIC HEARINGS
A. No public hearing is scheduled.
5. OLD BUSINESS
A. Amended Plan for TIF District 1-1
B. Technology Village Incubator Business Plan
C. Final Update for Venture Fair
6. NEW BUSINESS
A. EDAC Report and Subcommittee Reports:
(1) EDAC
(2) Broadbantl Fiber Network
(3) Technology Village Incubator
B. Business Inquiry List (through 3/31/12)
7. OTHER BUSINESS
A. Draft June 11, 2012 Agenda
8. ADJOURNMENT: 6:00 p.m.
���� Yhone 9�2.447.9800 / Fax 9�2.447.4245 / �vww.cityofpriorlake.com