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PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY
AGENDA
Monday, July 16, 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 Lake\Ecanomic Development Authority12012�July 16, 2012
1. CALL TO ORDER�INTRODUCTION
2. APPROVAL OF AGENDA
3. APPROVAL OF MEETING MINUTES
A. June 11, 2012
B. June 21, 2012
4. PUBLIC HEARINGS
A. No public hearing is scheduled.
5. OLD BUSINESS
A. Technology Village Business Plan — Draft #2
B. Economic Development Plan for Deerfield Business and Welcome Industrial Parks — Draft #2
C. EDA Business Plan — Draft #4
D. 2013 Budget Discussion — EDA Tax Levy
E. Downtown Redevelopment Acquisition Opportunities
6. NEW BUSINESS
A. EDAC Report and Subcommittee Reports:
(1) EDAC Report
(2} Braadband Fiber Network Subcommittee Report
(3) Technology Village Subcommittee Report
B. Fiber Optic Network Feasibility Report — Question & Answer Time at 5:30 p.m.
7. OTHER BUSINESS
A. Draft August _, 2012 Agenda (date to be determined by the EDA)
8. ADJOURNMENT: 7:00 p.m.
Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com
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PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY
DRAFT AGENDA
Monday, August _, 2012
4:00 p.m.
Reports included with this agenda can be found in the Document Center at www.cityof�riorlake.com
Please follow this file path: City of Prior Lake\Economic Development Authority120121August _, 2012
1. CALL TO ORDERIINTRODUCTION
2. APPROVAL OF AGENDA
3. APPROVAL OF MEETING MINUTES
A, July 16, 2012
4. PUBLIC HEARINGS
A. No public hearing is scheduled.
5. OLD BUSINESS
A. Fiber Optic Network Discussion and Recommendation
6. NEW BUSINESS
A. EDAC Report
B. Business Friendly Recommendations from the EDAC
7. OTHER BUSINESS
A. Draft September 17, 2012 Agenda
8. ADJOURNMENT: 6:00 p.m.
Phone 952.447.9800 / Fa�c 952.447.4245 / www.cityofpriorlake.com
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ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: July 16, 2012
AGENDA #: 5A
PREPARED BY: Casey McCabe, Community Development Specialist
AGENDA ITEM: TECHNOLOGY VILLAGE BUSINESS PLAN — DRAFT #2
DISCUSSION: introduction
At the June 11, 2012 meeting of the Economic Development Authority, the Technoi-
ogy Village subcommittee presented a first draft of the Technology Village Business
Plan for EDA review and comment. The EDA requested the Technology Village
subcommittee revise or clarify the following:
• Review the Client Focus section to ensure the program focus is not too narrow;
and
� Review the rent structure and the EDA's level of business support. Consider
providing the lease space and services rent free in exchange for the EDA ob-
taining a small percentage of business ownership or future revenues. If the
business remains in Prior Lake, then they would get that ownership percentage
back.
The EDA made a motion to recommend moving the Technology Village Business
Plan forward to another meeting of the EDA to address comments identified above.
Hi StON
The EDA appointed the Technology Village subcommittee in the fall of 2011 in an
effort to assemble and organize human resources to establish a business incubator;
which is a key objective of the EDA. The EDA provided the subcommittee with di-
rection to begin evaluating options to implement a technology business facility (in-
cubator) in Priar Lake, including a report that covers these primary issues:
• Identify models of business incubation (public, private, or combination);
• Outline financial models to support start-up and ongoing operating costs;
• Evaluate opportunities for business incubation in Prior Lake; and
• Identify a preferred plan for Prior Lake.
Conclusion
The attached Technology Village Business Plan has been revised by the Technolo-
gy Village subcommittee based on EDA discussion and recommendations from the
June 11, 2012 meeting.
All revisions to the previous draft of the Technology Village Business Plan are
shown as Track Changes in the attached document. Major revisions to the previous
draft include:
• The Client Focus section has been revised to broaden the scope of clients
served by this program. The first business plan draft identified companies in-
volved in technology related fields as software, telemedicine, biotechnology, or
instrumentation. The client focus has been revised to identify a technolagy fo-
cus that targets companies involved in emerging technologies, which is defined
as any technology product or service that is currentiy developing or will be de-
veloped that can be commercialized and has the ability to alter a business or so-
cial environment.
The Technology Village subcommittee feels this language will ensure the pro-
gram will be available to serve all technology related fields and the reference to
"targets companies" will provide an opportunity for the Board of Directors to ap-
prove a wide variety of companies with high growth potential that may not have
fit the client focus identified in the original draft business plan.
• A new section titled Rental Rates was added to the business plan detailing the
preferred rental structure option and the other options that were considered.
After reviewing the strengths and challenges of multiple rent compensation op-
tions, the subcommittee recommends an escalating rent structure where the cli-
ent business would pay an escalating rent payment over the lease term and the
payment received would be used to subsidize Technology Village program op-
erations. For example, the Board of Directors may determine the standard lease
rate is $15 per square foot; however, a client may only pay $5 per square foot for
the first year, $10 per square foot for the second year, followed by $15 per
sq�are foot during the third year of the lease term.
The client cost savings of $10 per square foot during the first year and $5 per
square foot during the second year would be considered the City of Prior Lake's
"equity investment" in the client business. The equity investment would be re-
quired to be repaid to the City of Prior Lake should the business operate outside
of the City after graduating or leaving the program.
ISSUES: If the EDA approves of the current draft of the Technology Village Business Plan,
the EDA should approve a mation and second adopting the Business Plan as pro-
posed and a motion and second authorizing staff to prepare the necessary Econom-
ic Development Authority budget amendments for EDA review and approval to im-
plement the Technology Village incubator program.
FINANCIAL The subcommittee has developed an estimated operating budget for years one
IMPACT: through three of program operation. The Technology Village program will require a
short and long-term financial commitment by the EDA, and it will have an impact on
the EDA budget.
ALTERNATIVES: 1. Motion and second adopting the Technology Village Business Plan as proposed
or with amendments.
2. Motion and second authorizing staff to prepare the necessary Economic Devel-
opment Authority budget amendments for EDA review and approval to imple-
ment the Technology Village incubator program.
3. Provide direction to the Technology Village Incubator Subcommittee.
4. Continue Discussion at a future meeting.
5. Take no action.
RECOMMENDED As determined by the EDA.
MOTION:
ATTACHMENTS: 1. Technology Village Business Plan — Draft #2
,
BUSINESS PLAN
TECHNOLOGY VILLAGE
CITY OF PRI4R LAKE
ECONOMIC DEVELOPMENT AUTHORITY
Formatting of the document and Table ofContents will be corrected upon approval o revisions
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TABLE OF CONTENTS
SECTION TITLE PAGE
1.0 EXECiTI'IVE SUMNIARY ............................................................... 2
2.0 MISSION AND OBJECTIVES ......................................................... 4
3.0 CL�NT FOCUS ........................................................................... 4
4.0 ORGANIZATIONAL STRUCTI7RE .................................................. 5
5.0 BOARD COMPOSITION ................................................................ 6
6.0 SERVICES AND PROGRAMS ......................................................... 7
6.1 Direct Business Development Assistance ....... ........................... ........ 7
6.2 Professional Network and Relationship Support .................................. 8
6.3 Educarional and Training Programs ................................................. 8
6.4 Facility Based Services ................................................................ 9
7A MARKETING, PUBLIC RELATIONS, AND CLIENT RECRUITMENT ... 9
7.1 Marketing and Public Relations Plan ................................................ 9
7.2 Website Development ................................................................. 10
7.3 Client Recruitment Strategy .......................................................... 10
8.0 CLIENT APPLICATION, SELECTION, AND GRADUATION PROCESS,. 11
8.1 Application Process .................................................................... 11
8.2 Selection ................................................................................. 12
8.3 Graduation Policy ...................................................................... 13
9.0 STAFFING PLAN .......................................................................... 13
10.0 FACILTTY ................................................................................... 14
11.0 BIIDGET AND FINANCIAL ............................................................ 14
11.1 Facility Development Budget ....................................................... 15
11.2 Capital Expenditures ................................................................. 15
11.3 Operating Budget ..................................................................... 16
11.4 Operating Budget Assumptions .................................................... 17
11.5 City of Prior Lake 1n-Kind Contributions ......................................... 17
12.0 FUNDING SOURCES ..................................................................... 17
13.0 SUCCESS CRITERIA ..................................................................... 18
14.0 NEXT STEPS ................................................................................ 18
Appendix A- Proposed Technology Village Floor Plan ............................... 19
Appendix B- Sample Tenant Application Form ........................................ 20
Appendix C- Sample Technology Village Logos ....................................... 22
Techno7ogy Village Business P1an Page 1
1.0 EXECLiTIVE SIJMMARY
This business plan was drafted by the City of Prior Lake Technology Village subcommittee. The
subcommittee was appointed by the Prior Lake Economic Development Authority (EDA) in the fall of
2011 in an effort to assemble and organize human resources to establish a business incubator; which is
a key objective of the EDA. The EDA provided the subcommittee with direction to begin evaluating
options to implement a technology business facility (incubator) in Prior Lake, including a report that
covers these primary issues:
• Identify models of business incubation (public, private, or combination);
• Outline financial models to support start-up and ongoing operational costs;
• Evaluate opportunities for business incubation in Prior Lake; and
• Identify a preferred plan for Prior Lake.
The subcommittee completed its initial Report and Recommendations, which was presented to the
EDA on February 13, 2012, The report identified models of business incubation, outlined financial
options to support start-up and ongoing operational costs, evaluated opportunities for business
incubation in Prior Lake and identified a prefened plan for the City. This business plan serves as the
next step toward implementation of the Technology Village business incubator program in the City of
Prior Lake.
The Bylaws of the Prior Lake EDA state, "The business of the Economic Development Authority shall
include but not be limited to: promoting growth, development and redevelopment of retail, commercial
and industrial properties in Prior Lake; diversifying the City's tax base; providing tools and incentives
to achieve the Economic Vision Element in the City's 2030 Vision and Strategic Plan; and providing
an incubator to generate ideas and initiatives to support economic growth and vitality."
It is the subcommittee's belief that the impiementation of the proposed Technology Viilage program
will not only achieve the EDA's goal of estabiishing a business incubator in the community but the
program will also assist in achieving the EDA's overall objectives of promoting growth, diversifying
the City's tax base, and providing the tools and incentives necessary to achieve key elements in the
2030 Vision and Strategic Plan.
The subcommittee does not view the Technology Village program as a"stand alone" project; rather,
the subcommittee views this program as a small piece of the puzzle. Together with the other initiatives
of the EDA, such as the community wide broadband fiber network and ensuring adequate pad ready
development sites, Technology Village wiil benefit from and enhance these other objectives and ensure
the greatest opportunity for all objectives to positively impact and guide the development of our
community.
The National Business Incubator Association (NBIA) defines business incubation as a business support
process that accelerates the successful development of start-up and fledgling companies by providing
entrepreneurs with an anay of targeted resources and services. These services are usually developed or
orchestrated by incubator management and offered both in the business incubator and through its
network of contacts. A business incubator's main goal is to produce successful firms that will leave
the program �nanciaily viable and freestanding. Graduates of incubator programs have the potential to
create jobs, revitalize neighborhoods, commercialize new technologies, and strengthen local, regional
and national economies.
Technology Vi!lage Business Plan Page 2
Critical to the definition of an incubator is the provision of management guidance, technical assistance,
and consulting tailored to young growing companies. Incubators generally provide clients access to
appropriate rental space and flexible leases, shared basic business services and equipment,'technology
support services, and assistance in obtaining the 6nancing necessary for growth.
In order to achieve its goal of assisting in the creation of new desirable job opportunities, contributing
to the growth and success of emerging technology businesses, and providing a new source of tax
revenue for Prior Lake and Scott County, the Technology Village subcommittee has developed a three
phase plan for the implementation of the Technology Village incubator program.
Phase I of the Technology Village plan will be housed on the main floor of Prior Lake City Hall within
an existing underutilized office space of approximately 2,000 square feet. The space consists of five
hard-walled offices, one conference room and a 775 square foot open office area. Initiating the
program in the existing City Hail building will help minimize start-up costs and wiil also allow for the
shared use of services already in place serving City of Prior Lake staff, including; internet, phone, fax,
copy machine, printer, meeting space, cafeteria/break room, etc. Another major locational benefit is
the proximity to city staff who will be administering the day-to-day activities of the program.
Phase II of program implementation would involve expanding the program and the amount of clients
served, either by (i) vacating the City Hall space and relocating the entire program into a larger faciliry
within the community; or (ii) relocating a portion of the clients, those who are ready to operate more
independently, into another facility within the community while maintaining the City Hall space to
house clients in the early stages of incubation.
Both phase II options would allow the program to maintain its client base and provide the necessary
space to serve additional ciients as Technology Village develops. Phase II of the program would
require additional approvals and financial commitments, such as the hiring of an Executive Director
and/or additional support staff. Prior to proceeding with Phase II implementation, additional
Economic Development Authority review and approval wiil be required.
Should the Technology Village incubator program prove successful through its first two phases, Phase
III implementation may involve expanding the program through construction of an incubator office
building and the development of a Technology Village campus. As is the case with Phase II
development, additional studies, EDA discussions and City of Prior Lake financial commitments
would need to be secured prior to Phase III implementation.
The subcommittee's vision for the Technology Village campus is a mutti-acre, multi-building
development that would not only house the incubator building but would be designed as an ideal
location for new and emerging technology businesses. Public investment in a Technology Village
campus, together with a proposed broadband fiber network, could place Prior Lake at a great
advantage when attracting business from outside the region and would also provide an ideal location
for existing businesses to stay and grow in Prior Lake. Aithough construction of an office building and
public development of an office park may seem somewhat daunting at this time, the subcommittee
feels very strongly that public financial participation in the development of a Technology Village
campus may be necessary to entice desirable technology related commercial and office development
and attract the related private investment dollars.
Technology Vi!lage Business Plan Page 3
The City of Prior Lake has become a corporate member of the National Business Incubator
Association (NBIA). NBIA is a valuable resource which provides the EDA, Technology Village
subcommittee and city staff with up to date practical information gleaned from existing business
incubators throughout the nation. Information and materials for this business plan were gathered from
multiple sources; including NBIA, published NBIA articles, government data sites, previous City of
Prior Lake studies, and published incubator business plans and articles completed by ather entities;
specifically the Business Plan for a Technology Incubator, Lane County OR, prepared by KJ Smith
Associates, and the National Security Tech�ology Incubator Business PJan, prepared by Arrowhead
Center, New Mexico State University,
2.0 MISSION AND OBJECTIVES
Technology Village Mission Statement - The Prior Lake Technology Village is dedicated to providing a
diverse sustainable environment as an incubator in which new and emerging companies can develop
and achieve, with the end result being profitable business, job creation, capital generation, economic
diversity, and a positive impact in Prior Lake and the Scott County communities.
In general, the mission of any business incubator is to aid in the successful development of emerging
businesses. Ideally, businesses that graduate from an incubator move out into the community and
contribute to the overall vitality, diversity, and growth of the economy. Not only will the incubator
companies benefit from the networking and mentoring, reduced baniers to the market, and increased
visibility and stature, but the entire community will benefit from the business development through
new employment opportunities, enhanced community image, increased entrepreneurialism and
additional ta� revenues.
3.0 CL�NT FocUs
Incubators vary in the way they deliver their services, in their organizational structure, and in the types
of clients they serve. There are many examples of incubator programs throughout the nation with a
specific client focus; however, for the purposes of the Technology Village subcommittee's research,
the members chose to focus on the strengths and challenges of the four main Nortl� American incubator
focuses, which according to 2006 State of the Business Incubation Industry, are mixed-use, followed
by technology, service/professional, and manufacturing.
Following their research, the Technology Village subcommittee determined the clients of the program
should be of a complimentary use to each other to best utilize available resources and allow clients the
opportunity to share information on business related subjects to fully capture the business incubator
concept and provide the greatest opportunity for program success. For these reasons, the
subcommittee determined a technology focus that targets , companies involved in
emerging technologies, which is defined as any technology nroduct or service that is current�
developin� or will be developed that can be commercialized and has the ability to alter a business or
social environment. ,,;,:: u„ ��:'�..,.. ���.,_. °a;�, ,'-��*°�'-�-�'� °�� ��°+: would provide
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the greatest opportunity to positively impact the community and assist with high quality job growth.
I Due to size limitations, Technology Village will focus its efforts on developing emer�ina technology
related businesses ��:,°"-� °��r�,�;~� �-°°-° � °'c�°r• ° *��°-�-°a:�:�° �,:°°*� T'however,
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the program will be designed so it does not discourage or restrict the program benefits to only those
businesses housed within the Technology Village facility. The program's Executive Director and
Technology Vi!lage Business Plan Page 4
Board of Directors will work within their network of service providers to offer educational
opportunities, provide mentoring and business assistance, monitor progress, and provide the necessary
business development resources through a virtual incubator styled program for any client interested in
participating in the Technology Village program and establishing their business in Prior Lake.
In addition to the physical program location within City Hall, the Technology Village program will
also offer a virtual incubatar approach, which involves the maintenance of a network of incubator
client needs and an active list of services available to incubator clients, such as low-cost lease space,
accounting, legal, financial, marketing and mentoring services. The program's main function under this
scenario will be to manage the portfolio of incubator services and act as an honest broker between
service providers and incubator clients. The Technology Village subcommittee and the City of Prior
Lake want to ensure that every entrepreneur interested in starting a business in Prior Lake can receive
the necessary support and mentoring to provide the greatest opportunity for success, no matter what
type of specific industry focus.
4.0 ORGAIVIZATIONAL STRUCTURE
During the planning and recommendation stage, the Technology Village subcommittee evaluated
organizational structure alternatives; inciuding, public/private partnership, private for-profit
corporation, independent non-profit corporation and host non-profit corporation. The subcommittee's
evaluation of each incubator configuration included financial obligations, non-monetary opportunities
for public assistance, legal requirements, incubator management structure, staffing requirements, and
the City of Prior Lake's role in program implementation.
Following review of each organizational structure, the Technology Village subcommittee
recommended the program operate as a public/private partnership. However, the public/private
method requires a financial or equity contribution from a private party and the subcommittee was not
able to secure a sufficient private investment to proceed under that model. Upon further research into
the required public financial commitment and available space alternatives within the community, the
subcommittee chose to recommend a public sponsorship structure during the initial phase of program
development.
The primary reason for the shift in recommended organizational structure is the Technology Village
subcommittee determined its preferred site for Phase I program implementation is located within Prior
Lake City Hall, which lessens the need for a private financial commitment. By utilizing existing space
within the Prior Lake City Hall and capitalizing on the proximity of City staff who will be managing
the day-to-day operations, the subcommittee feels strongly that Phase I of the Technology Village
program will have the greatest opportunity to develop and succeed within City Hali.
This subcommittee recommends an independent non-profit 501 (c)(3) organization be established for
Technology Village. The non-profit model seeks increased job creation and economic benefit, not a
return on investment, and therefore is well-suited to serve incubator clients. The non-profit structure
will also allow for access to public funding and private donations that will be solicited during program
start-up and through the early years of operation.
The organizational structure of Technology Village will include a Board of Directors, which will
establish program goals and guidelines, and an Executive Director, who will be charged with
Technology Village Business Plan Page 5
implementing the goals of the organization and managing day to day activities with the assistance of
City of Prior Lake staff.
5.0 BoaRn Co�osiTioN
The initial board composition is very important. When determining the make-up of the Board of
Directors, economic development or relevant business expertise are critical components. In the
formation of the Baard, Prior Lake must differentiate between economic development and communiry
development; they are not the same and should not be confused. Economic development is generative;
having the power or function of generating, originating, producing, or reproducing and community
development is distributive; serving to distribute, assign, allot, or divide. The subcommittee's mission
and focus for the Technology Village program is not a community development initiative; rather, an
economic development initiative designed to create business and employment opportunities.
The initial Board of Directors will consist of individuals and organizational representatives that share
the vision of Technology Village as an economic development initiative and those who are able to
provide expertise that will help fulfill the program's mission. It is recommended that the Board consist
of representatives from the Technology Village service providers, members of the private sector with
notable expertise relevant to the program's technology focus, and representatives of public sector
economic development groups. The full Board of approximately ten to twelve members will operate
under an established set of bylaws approved by the Prior Lake City Council and it is recommended that
members will be appointed to the Board by the City Council based on the recommendations provided
by the Technology Village selection committee.
A preliminary List of the types of suggested representatives for the incubator wouid include members
or representatives of the following organizations:
• GovernmendSponsorship Organization
• Citizen & Business Community
• Professional, Technological and Financial Expertise
o Technology Industry Representative/Technology Entrepreneur
o Venture Capital Financial InstitutionBank
o Legal
o Marketing
o Accounting
o Administration
• Econornic Development Agents & Service Organizations
The primary functions of the Board will be to plan and formulate policy to guide the programming and
direction of the Technology Village program, hiring of the Executive Director position, assist in
screening prospective incubator clients, and ensuring the overall financial viability of the program.
Board members should have the ability to provide network connections that will assist the program's
Executive Director in creating links to investment and professional resources that support the success
of Technology Village clients. The Board will be instrumental in promoting Technology Village in the
community and generating awareness and understanding of the Technology Village program as an
important economic development tool for the City of Prior Lake and surrounding Scott County
communities.
Technology Village Business Plan Page 6
6.0 SERVICES AND PROGRAMS
Incubator services and programs are designed to increase a client's likelihood of successful
development and growth beyond what the client company could achieve on its own. Offering value-
added services is key to the incubator's ability to successfully graduate clients into the community to
generate jobs and wealth in the region.
Incubator offerings are divided into four categories:
• Direct Business Development Assistance
• Professional Network and Relationship Support
• Educational and Training Programs
• Facility-Based Services
The Executive Director and Board of Directors will work to develop cooperative agreements and
referral relationships with existing resource partners throughout Prior Lake, Scott County, and the
southern metro which provide services that support the growth of early stage businesses. These
resource partners shall include, but are not limited to, Prior Lake Chamber of Commerce, South Metro
Service Corps of Retired Executives (SCORE), Small Business Development Center (SBDC) — Apple
Valley, Small Business Administration (SBA), Women's Business Development Center, the National
Business Incubator Association (NBIA), and the State of Minnesota Department of Employment and
Economic Development. Cooperation between these organizations will avoid redundancy and provide
an efficient method of directing clients to resources and services that address their specialized needs.
The Technology Village program will complement the mission of all organizations listed above and
will provide these service organizations with expanded outreach and enhanced image. Service
organizations will be able to extend their service base by serving Technology Village clients through
educational seminars, training ciasses, and counseling. Additionally, support of the Technology
Village project will enhance the image of the organization and provide tangible evidence to the
community of how these organizations are ful�lling their mission and supporting their community.
61 Direct Business Development Assistance
Business development assistance is the direct support provided to clients from the time of acceptance
through graduation. The Technology Village Executive Director, with the assistance of city staff and
identified service provider organizations, will provide oversight and facilitate access to resources that
meet the client's needs.
Direct business development assistance includes ongoing business assessment, which is the process of
evaluating a client's business plan, identifying areas of need, developing a work plan to address those
needs, determine the services needed to move the business plan forward, and identify timeframes for
completion of major tasks. The initial assessment is expected to be completed in cooperation with one
of the service provider organizations, likely SCORE, and wili occur upon acceptance to the program;
additional assessments will follow on a quarterly basis or as needed.
Technology Vi((age Business P1an Page 7
6.2 Professional Network and Relationship Support
Networking and relationship support is the active role the program will take to develop connections to
resources that clients might not otherwise have access to as a start-up business; this type of support is
an important aspect of the Technology Village program.
The Board and Executive Director will develop a pool of volunteers from the community and service
provider arganizations willing to serve as mentors and business counse(ors for clients of the
Technology Village program. Mentors will be selected, likely with the assistance of SCORE, based on
their experience with the client's industry sector and stage of development. The Executive Director
will meet with mentors on a regular basis to track company development and suggest resources that
will help the mentor best serve the client. The Board of Directors will develop a mechanism to receive
client feedback to ensure the mentor is providing a valuable service to the client.
The Technology Village Board of Directors will develop a broad pool of experienced professionals
that have the technicai and business skills needed to support clients. Services for this support will be
negotiated on a pro bono or reduced fee basis with established guidelines for the level of service to be
provided. The incubator wiii screen service providers, facilitate the interaction between the service
provider and the client, and establish a method to assess client progress and satisfaction.
The program will also develop pools of small advisory boards consisting of business professionals
willing to volunteer as an advisary board member for Technology Village client businesses. The
advisory boards will consist of two to four volunteers with experience and expertise in the client's
specific technology. The advisory boards will agree to meet with incubator clients on a regular
schedule and provide counsel at various stages of businesses development. The Executive Director,
with assistance from the Board of Directars, will screen board members, meet to monitor client
progress, and establish a method to assess client satisfaction.
The Techno]ogy Village Board of Directors and Executive Director will work to establish and maintain
a capital and financing network consisting of banks, angel investors, venture capitalists, and corporate
equity investors, brokers, and other personal contacts. The program will introduce clients to this
financing network when the mentor and advisory board determines the client's business is at an
appropriate point and properly prepared to seek financing.
6.3 Educationa! and Training Programs
Technology Village wili work with existing service providers to provide clients with access to a range
of general business related topics that are applicable to any start-up operation, including; financial,
legal, organizational, marketing, insurance, technology commercialization, licensing, etc. The
Executive Director and Board of Directors will use connections to resource partners and service
providers, through marketing efforts and financial assistance, to provide clients of Technology Village
the opportunity to attend educational and training classes offered throughout the southern metropolitan
area. Educational programs wiil include off-site seminars and training sessions and may include
hosted, on-site seminars based on specific interest to program clients.
Technology Village Business P7an Page 8
The Technology Viilage subcommittee had an opportunity to meet with representatives from the South
Metro chapter of the Service Corps of Retired Executives (SCORE). SCORE has approximately thirty
volunteers in the south metro who provide mentoring services and advice on all aspects of starting and
growing a business. In addition, SCORE offers a wide variety of classes; including, sessions on how
to start your business, marketing strategies and ideas, financial management of your business,
developing your business plan, and more; beginning in 2012, SCORE plans to begin offering classes in
the Prior Lake — Savage Area schools.
The Technology Village subcommittee was very impressed by the discussion with the SCORE
representatives and the variety of services offered by their organization. The subcommittee feels a
strong relationship between Technology Village and SCORE will be extremely beneficial to both
organizations.
6.4 Facility Based Services
Facility based services include flexible leases and other site based services that are included in the
basic rental agreement. The Technology Village program will provide access to office space that
inciudes telephone, local area network, high-speed intemet access, and basic office furnishings.
Technology Village clients wili have access to shared conference rooms, printer/copy machine,
restrooms, and a kitchen/lounge. Costs associated with janitorial service, landscaping, parking,
property taxes, utilities, basic office supplies, property insurance, and program administration are
included in the proposed rental rate.
er��-g�eFr. >
.7.0 RENTAL RATES Formatted: Fom: 14 pt
While manv incubators charge below market rent, others charge market rate or higher. Higher rental
rates underscore the value of added services cliants receive as weil as reduce the subsidp required for
incubator operations. This plan's financial analysis has conservatively estimated that rents will
initially be offered at a below-market rental rate with monthlv payments escalatin� on a lap nned
schedule throughout the lease term. Escalatin¢ rental rates are intended to foster client orientation
toward �rowth and eraduation.
When determining the recommended rent structure the Technolo�v Village subcommittee reviewed
multiple o�tions; including req.uirin�a nercentage stake in the client business or future revenues in lieu
of a rent �ayment, an escalating or consistent rent structure where a portion of the funds were captured
Technology Village Business Plan Page 9
for future disbursement to the client business, and an escalating or consistent rent structure where the
rent payment received would be used to fund current and future pro rg am operations.
,7.1 �'referred Ootion .- Formattea: Fonc: eow
--------
-------------------------------------
� Fwmatted: Font: Bold
After reviewing the strengths and challenges of each rent compensation option, the subcommittee
recommends an escalatin� rent structure where the client business wouid pay an escalatine rent
�avment over the lease term and the pavment received would be used to subsidize Technolo�,v Vilia�e
�rogram operations. For example, the Board of Directors mav determine the standard lease rate_ is $15
ner sc�uare foot; however, a client may only�ay $5 per square foot for the first year. $10 per square
foot for the second year, followed by $15 per square foot during� the third vear of the lease term.
The ciient cost savings of $10 per square foot during the �rst year and $5 per square foot durin� the
second vear would be considered the City of Prior Lake's "e�uity investment" in the client
business. The �uity investment would be rec�uired to be revaid to the City of Priar Lake should the
business operate outside of the City afrer graduating or leaving the pro rg am•
Sample Technolog�lla�e Client Rent Schedule
a e °tq �� M nthl �tt' of Prior
Square Ren � Annual Lake
im 1' e Rent/ of Base Rent
� s_£ � ent � Paid Rent 'd 'B ui
s.£ Investment"
I Year 1 180 15. 0 �/3 5.00 75 00 900.00 800.00
(mm/dd/yy - mm/dd/wl
I Y— 180 I5.00 � 10.00 150.00 1 00 00 900.00
(mm/dd/w - mm/dd/w)
I Ye�3 �80 15.00 100 5.00 225.00 2 700.00 $0.00
(mm/dd/yy - mm/dd/w)
5 400.00 2 700.00
The Technology Village client will be required to reimburse the Cit,y of Prior Lake for all deferred
base rent durin� the lease term if the client relocates outside of the City within a term equal to the term
in the lease agreement. Reimbursement of the Citv's "equit,y investment" based on the scenario above
would be reduced on a standard amortized schedule. If the client chose to relocate its business upon
graduation thev would be required to reimburse the full egu� investment, durina the second vear after
graduation the reimbursement amount would $1,800, durin� the third�ear the reimbursement would be
$900. Following the fourth year, or term eqnal to the term in the lease apreement, the client business
would not be reguired to reimburse any�ortion of the eauity investment.
� Sam le Technolo Villa e Client E ui Invest e t Reimbursem nt chedui
I Reimbursed
Timeline to the Citv of
Prior I.ake
I Year 4
(mm/dd/yy - mm/dd/yy� 2 �00.00
I Y-�-
(_mm/dd/yy - mm/dd/}�l 1 800.00
I � 900 00
�,mm/dd/yy - rrun/dd/wl
I TechnologyVillpge Business Pfan Page 10
Ye � 0.00
I � (mm/dd/yy - mm/dd/yy] I I
The major benefit of an escalatin� rental rate is the client business' cost savings durin� the first few
years of business start-up. Additional benefits of the of this preferred structure are the rent pa�ments
received bv the Citv will reduce the overall public financial contribution. an escalatin�rental rate will
encoura�e and prepare the client to �raduate and move into a market lease �ace, and the client
business will have an incentive to locate in Prior Lake upon graduation to earn back the equitX
investment.
The subcommittee felt that if the prog�ram were to char�e no rent the client may not have a�reat
incentive to �raduate and leave the pro ram space for market rate lease space elsewhere in the
communitv. Additionallv, if no rent was required a client mav not be prenared to make regular rent
pavments as they would have not been required to budget for rent�payments durin� the initiai start-up
ey ars.
.7.2 __ Additional�tent Options � Formatted: Font: Bold, No undedine
-------------------------------------------<.
•----------------------------------------------- --- - -
� Formatted: Font: Bold, No undedine
In addition to the preferred escalating rentai rate option, the subcommittee considered the option of �'�;° �,,,att� Font: Bold, No undedine
acquiring a percentage stake in each client business or a share of future revenues in lieu of a monthly
rent payment. The initial thou h� t was to acquire a share of the company and allow the client business
the opportunitv to earn back the CitY's interest in their company should the� choose to continue
�erations within the Citv upon graduation frorn the program.
The benefits of the percentage stake o�tion are the client's cost savin�s due to no rent being�aid
during, the initial start-u�years. The client business would also have a financial incentive to locate in
Prior Lake upon,program eraduation to earn back its share of oumership or pro�ts pled¢ed to the Citv
of Prior Lake.
The challenges with this option include the le�al costs associated with the percentage stake or future
revenue negotiations. In addition, the subcommittee assumed as start-up businesses, manv of the
program ciients would not have le a� 1 representation to provide counsel or review of the le�ai
documents and the idea of securine lease space with a share of com�any�rofits maYdiscoura eg some
clients from participatin in the�rog _ram.
Another option that was considered was maintaining a consistent rental rate over the lease term of
$15.00 per spuare feet of lease space for the hard-walled office areas and $12.00�er sc�uare foot for the
open work station area. While man�incubators char�e below market or escalating rentai rates, a
higher rental rate underscores the value of added services clients receive as well as reduce the public
subsid�quired for incubator operations.
Under this scenario, the rent payments would be collected bv the Citv and either held in an escrow
account and made avai(able to client businesses for future rent subsidies or operating expenses after
the�graduate from the program or capture the rent pavments for future operatin� costs of the
Technolo�v Village business incubator pro ra am•
The streneth of the consistent rental rate o�tion is a stable rent nayment would be available to fund
cunent and future pro rg am operations. The challenge of this option is requirine an initial ren�avment
Technology Village Business Plan Page 11
which maY be higher than many start-up comoanies mav be able to �av. It may also be more difficult
to attract clients to the program if thev do not receive an immediate financial benefit.
8.0 MARKETING, PUBLIC RELATIONS, AND CLIENT RECRUITMENT
The potential success of the Technology Village program will depend largely on the effort and
resources that are dedicated to marketing. The primary marketing focus will be to attract new clients
to Technology Viltage. However, effective marketing also has additional benefits, such as attracting
service providers and program sponsors to Technology Village and helping establish and maintain
Technology Village's reputation and status in the community as an important piece of the overall
Economic Development strategy for Prior Lake.
81 Marketing and Public Relations Plan
The majority of the marketing campaign during the initial stages of program development will include
low- and no-cost marketing strategies; such as capitalizing on networking opportunities at Chamber of
Gommerce and other community and regional events. The Technology Village subcommittee will
develop a"hot sheet" which will be provided to City staff, elected officials, service providers and key
stakeholders that will summarize the Technology Village program and highlight significant program
features to be used for reference during these networking opportunities.
The marketing campaign will also utilize existing City of Prior Lake and other community group
websites and newsletters, press releases will also be issued by the Executive Director to provide
information to the public which will likely result in the Technology Village program receiving
coverage in local newspapers. All resources that may shed a positive light on the Technology Village
program and the City of Prior Lake's effort to assist in the development of new businesses and the
creation of desirable employrnent opportunities for its residents will be explored as a potentiai
marketing strategy.
There will be some cost associated with marketing in the early stages, such as website development,
logo design, and print advertising in the form of brochures, business cards, or other promotional
materials. The Board of Directors will attempt to work with service providers to co-prornote services
and share in this marketing cost.
The Technology Village subcommittee has proposed to develop a logo (brand) for the Technology
Village program which incorporates a new Technology Village logo with the existing City of Prior
Lake logo. Once the new logo has been approved, this brand will be used for program letterhead,
business cards, website, and other promotional materials. The subcommittee's proposed logo designs
are attached as Appendix C for reference.
8.2 Website Development
The Technology Village subcommittee was successful in reserving the domain name
www.technologyvillage.net. The possible content for the Technology Village website is endless; the
proposed content at program implementation will include:
• Program's history;
• Mission statement;
• Photographs of the facility, conference rooms, office space, building exterior, etc.;
Technology Village Business Plpn Page 12
• Primary staff contact information;
• Board of Directors biographies;
• Links to service provider websites (for those that provide low- and no-cost services to
Technology Village clients}, inciuding contact information and promotional materials
• Downloadable brochures and promotional materiai; and
• Program Application for Admission.
Once the Technology Village program is more established the website will include information related
to the economic impact client businesses have had on the region, Technology Village client success
stories, a press room with links to related newspaper articles and program press releases, and links to
Technology Village client websites.
8.3 Client Recruitment Strategy
In order for the Technology Village program to prove successful, the Executive Director and Board of
Directors wiil need to effectively recruit clients to the program. Potential clients will be recruited
through a variety of efforts, which will include direct marketing with the development of promotional
materials to be mailed to regional professional associations, universities, and specific targeted
industries. These promotional materials will highlight the facility and its technology capabilities along
with the business assistance services and mentoring programs available. Technology Village will also
utilize existing newsletters, such as The Wavelength, the Economic Development Advisory
Committee's City of Prdor Lake Business Pages, or the Prior Lake Chamber of Commerce's Chamber
News to provide information related to the services available through the program.
The Technology Village subcommittee also plans to capitalize on the City of Prior Lake's positive
relationship with the local Chamber of Commerce to ensure all chamber members are aware of and are
provided with program literature and marketing materials.
9.0 CLIENT APPLICATION, SELECTION, AND GRADUATION PROCESS
Client selection and graduation are critical to the success of the Technology Village program. The
screening process should be customized to meet the Technology Village mission and ensure the
selected businesses will benefit from the services provided through the program.
9.1 Application Process
The proposed application process for prospective Technology Village clients involves two to three
steps and the entire appiication process should be completed within five to seven business days.
Step 1: Complete Application - All prospective clients will complete a brief application form. A
completed application provides the Executive Director with a brief description of the applicant's
current business status and a preliminary sense of the applicant's service and facility needs. The
application also includes the submission of a business plan (if available) and business summary,
company and project literature, and management team biographies; the preliminary application is
attached as Appendix B.
Step 2: Review of Application, Business Description, and/or Business Plan - The Executive Director
and a board member with expertise in the applicant's industry will review the appiication and
Technolagy Village Business Plan Page 13
documents submitted by the prospective client. The business description and business plan should
provide more in-depth information about the stage of business development, the management team,
market potential, and probability of success.
If the business description and/or business plan adequately addresses the screening criteria established
by the Board, the Executive Director can approve the applicant for acceptance and inform the Board.
If the Executive Director needs additional assistance to determine if approval is appropriate for an
applicant, an additionai step would be added. The additional step involves a brief presentation to an
incubator panel as described below.
Step 3: Present to Incubator Panel — If the Executive Director determines Step 3 is necessary the
prospective client will present their business case to a small panel of three to four people comprised of
Board members, appropriate industry experts, and the Executive Director. The panel's role is to assist
the Executive Director in understanding the business and determining if the applicant should be
approved for acceptance into the Technology Village program. Based on the panePs input, the
Executive Director will rnake a decision regarding acceptance and inform the Board.
9.2 Selection
To determine which business start-ups fit the preferred focus of the Technology Village plan and to
help identify which companies have a strong potential to succeed, the following eligibility
requirements were drafted by the Technology Village subcommittee after review of best practices of
existing incubator organizations. The proposed eligibility reyuirements are subject to review and
modification by the Board of Directors.
• The applicant must be in target industry as identified by the Technology Village Board of
Directors.
• The applicant must be in the early stages of business development (first three years). Small
companies involved in a significant change in direction or launching a new business product
are alsa eligible to apply.
• The applicant must be a for-profit business with growth potential.
• The applicant must demonstrate strong market for products and services.
• The applicant must have potential for positive economic impact on the community through:
o A technology, product, or service deemed to have a high marketplace potential.
o A potential for cornpany growth and the associated creation of well-paying jobs within
Prior Lake or surrounding Scott County communities.
• The applicant must have a product or service that can be commercialized within the time set
forth in the lease agreement.
• The applicant must plan to rernain headquartered within the City of Prior Lake or Scott County.
• The applicant must have a written description of the business; a draft business plan, inciuding a
draft financial forecast is desired.
• The applicant must show ability to pay incubator rents while they develop positive cash flow.
• The applicant must have a management team that the Executive Directar feels can handle the
technical aspects of the business. The management team should have entrepreneurial business
acumen or be willing to accept advice from an established Technology Village advisory board.
• The applicant must desire to take advantage of and be able to benefit from the value-added
services and guidance provided through the Technology Village program. The applicant
business must be willing to take advice from the professional network and/or the Executive
Director.
Technology Village Business Plan Page 14
This business plan notes the proposed eligibility requirements above were designed for clients who
will physically be located within the Technology Village facility. As stated above, the Executive
Director and Board of Directors will work very diligently within their network of service providers to
offer educational opportunities, provide mentoring and business assistance, monitor progress, and
provide the necessary business development resources through a virtual incubator styled program for
any client interested in participating in the Technology Village program, even if the client does not
meet the preferred eligibility requirements above.
The City of Prior Lake Economic Development Authority and the Technology Village subcommittee
will provide the necessary assistance to any client interested in establishing or growing their business
within the City of Prior Lake. This preferred focus criteria should not be viewed to discourage
potential Technology Village clients or restrict program benefits to only those businesses housed
within the physical Technology Village facility.
9.3 Graduation Policy
Graduation policies, based on a set of graduation criteria established by the Board, wiil be written into
tenant lease agreements. Graduation criteria will include reaching milestones such as establishing a
complete management team, acquiring investments or financing to accommodate the next stage of
business, achieving annual sales goals, being acquired by a larger company, or growing to a point that
exceeds the capacity of the program. The graduation criteria will give companies concrete goals and
help ensure they will be ready for life outside the incubator when it's time to graduate.
Although the Board will set a recommended amount of time a client may receive services at three
years, this term may be customized by type of business and extended on a month-to-month basis for
one additional year if approved by the Board of Directors. The Technology Village subcommittee is
aware that all companies do not develop at the same pace and companies will enter the program at
different stages of development. One company may take three or more years to develop, while another
company may want an accelerated timetable, such as eighteen months or less. The Technology Village
subcommittee and Board of Directors will want to ensure the company will be ready to bring their
technology to market at the time of graduation so the graduation policy will be flexible enough to
ailow the incubator to accelerate or delay graduation on a case by case basis.
The Technology Village program will assess its ability to provide value to a client. Clients who have
progressed beyond the program's ability to provide sufficient value should graduate and begin using
private sector providers. Business development assessments between the advisory board and client
will be the basis for this assessment.
10.0 STAFFING PLAN
At start-up, Phase I staffing will be accomplished with existing City of Prior Lake staff. Dan Rogness,
Community and Economic Development Director for the City of Prior Lake, will serve as the Interim
Executive Director. The Interim Executive Director will be assisted by Prior Lake Community
Development staff and existing City of Prior Lake support staff. Additionally, members of the Board
of Directors will take a more "hands-on" approach to assist in the program's staffing needs during
Phase I. The Interim Executive Director and city staff will coordinate and provide services to ciient
businesses, cultivate resource networks, manage facility development, and manage ongoing operations.
Technology Village Business Plan Page 15
Subsequent increases in staffing hours and levels will depend on program success, increases in
workload, and funding availability. It is anticipated that Phase II of the program would involve hiring
a fuli-time Executive Director position and would likely include the hiring of a part- or full-time
administrative support position.
Should the Technology Village program prove successful, a full-time, on-site Executive Director may
be hired in year three or four to manage the operations of the incubator and provide direct business
assistance to clients. The Executive Director must be experienced in technology start-ups, have a well-
rounded understanding of business management, leadership ability, and interpersonal skills. A strong
Executive Director will develop a network of venture capitalists, angel investors, and bankers to
support new venture 6nancing. The ideal Executive Director would be well connected to professional
and technical knowledge networks in the community and would develop a strong network of service
providers that provide expert assistance to incubator clients. If recruited from outside the area, this
person must have credibility to rapidly establish those networks and enhance community support.
The part- or full-time Administrative Assistant would answer telephones, greet visitors, provide
administrative support to clients, and maintain equipment and supplies. Based on the number of
tenants projected, this would likely begin as a part-time position in year three ar four and could
increase over time as tenant occupancy and revenues increase.
11.0 FAC�r.TTY
The business plan recommends Phase I of the Technology Village program would initially be housed
on the main floor of Prior Lake City Hall within an approximate 2,000 square foot area. The proposed
site (Attached as Appendix A) provides five hard walled offices, a large conference room, and a large
open office area which will be furnished with cubicles and work stations. The mixture of hard walled
office and open work space ailows the area to be creatively structured to take m�imum advantage of
its location.
Client space would consist of five hard-walled offices ranging from 126 to 186 syuare feet, a 775
square foot open cubicle/work station space, and a 264 square foot conference room. Common areas
within the proposed site include hallways and one meeting/conference room. Clients of the program
will also have shared access to City Hall restrooms, the City Hall cafeterialbreak room, parking, and
reception area.
Suite Square Feet (est.) Descri tion
C 102 180 Office
C103 264 Conference Room
C104 155 Office
C 105 126 Office �
C106 126 Office
C 108 186 Office
C 111 775 Open Office
N/A 197 Hallway
Total 2,009
Techno[ogy Village Business Plan Page 16
Although many studies and industry literature indicate an incubator size of 30,000 square feet is
typicaily required for incubators to achieve self-sufFiciency. The proposed site, consisting of
approximately 2,000 square feet, was determined by considering several factors: i) proximity to
program administration, ii) subsidized costs for lease of existing office space, iii) existing shared
services available with the City of Prior Lake, and iv) minimal financial start-up costs. If the
Technology Village program is successful, Phase II will identify additional space in existing office
buildings throughout the City of Prior Lake at locations yet Yo be determined; additional financial
commitments would be anticipated for Phase II implementation.
12.0 BUDGET AND FINANCIAL
The budget presented in this plan includes a facility development budget, an estimate of start-up capital
expenditures, and a preliminary operating budget for years one through three of Technology Village
operations.
12.1 Facility Development Budget
The facility development budget is estimated at $3,850 and includes construction of a demising wall
within the existing office space, installation of one door, relocafron of key card access readers, signage,
installation of a storage cabinet or other itcm to secure private property within the facility, and
electrical repairs.
ITEM ESTIMATED
EXPENSE
Deminsing Wall Construction $900
Door $650
Key Card Access Readers $600
Signage $600
Storage Locker (secure equipment) $600
Electrical $500
Total Estimated Facility Development Costs $3,850
12.2 Capital Expenditures
The capital expenditures estimate of $38,200 represents a one-time expense associated with program
start-up costs.
ITEM ESTIMATED
EXPENSE
Administrative Equipment
5 computers, far machine, existing printer, existing $7,000
scanner, software, etc.
Furniture/Furnishings $20,000
Technology Village Business Plan Page 17
5 desks, 10 chairs, 5 file cabinets, shelving,
existing conference tables, AV equipment, white
boards, reception furnishing, etc.
Break Room (existing} $O
Kitchen appliances, tables, chairs, etc.
Telephone System
Equipment, switch, phones, install and configure, $1,200
etc.
Network Wiring $2
Network Equipment $5,000
Server, router and hub, install and configure, etc.
Internet Access
Firewail, cabling, install and configure, etc. �2,500
TOTAL Estimated Capital Expenditures $38,200
12.3 Operating Budget
The estimated operating budget identi�es a shortfall of $35,425 over the first three years of operation.
THREE YEAR OPERATING BUDGET
REVENUE Year 1 Year 2 Year 3
Incubator client rents $6,075 $12,150 $16,200
Service fees $0 $400 $600
EXPENSES Year 1 Year 2 Year 3
Subscriptions (NBIA Membership) $1,000 $1,d00 $1,000
Business assistance offerings $608 $1,215 $1,620
(10% of Rental Rates)
Marketing/PR $2,500 $1,500 $1,500
Office supplies/printing $500 $500 $500
Postage/shipping $0 $0 $0
Telephone/fax/internet $500 $500 $500
Property Ta�c Payment $0 $0 $3,500
Facility Development Costs $3,850 $500 $500
Capital Expenditures $38,200 $0 $0
Other Expenses (misc.} $500 $500 $500
3 � �
�;., �� t �
Technology Vi!lage Business Plan Page 18
12.4 Operating Budget Assumptions
Rental rates and occupancy assumptions for the 2,009 square feet space dedicated to the Technology
Village program include: approximately 509 square feet dedicated to common areas such as hallways
and conference room; occupancy assumes 1,500 total square feet dedicated to leasable client space.
Proposed rental rates are $15.00 per square foot of lease space for the hard-walled office areas and
$12.00 per square foot for the open wark station area.
Incubator Clients Year 1 Year 2 Year 3
Number of Ciients 2 4 5
Percent of Space Leased 30% 60% 80%
Square Feet of Space Leased
(assumed 50% hard-walled 450 900 1,20Q
and SQ% cubicle)
Rental Rate per Square Foot
($15/sq. ft. for hard-walled $3,375 $6,75Q $9,000
office space)
Rental Rate per Square Foot
($12/sq. ft. for work station / $2,700 $5,400 $7,200
cubicle space)
Annual Rental Revenue $6,075 $12,150 $16,200
(est.)
12.5 City of Prior Lake In-Kind Contributions
In addition to the capital and operational expenses identified above, the City of Priar Lake wili be
providing in-kind services to the Technology Village program through City costs already provided for,
including: a portion of city staff time dedicated to the program and facility costs related to property
insurance, janitorial service, grounds maintenance, building maintenance and repairs, of�ce equipment
maintenance, trash removal and utilities.
13 .0 FUNDING SOURCES
Funding is required to develop the incubator facility, fund start-up expenses, and subsidize the early
years of incubator operations. The Technology Village subcommittee anticipated that all, or a
majority, of the start-up funding costs will be provided by the Prior Lake Economic Development
Authority. During the planning and recomrnendation process, the subcommittee identified additional
sources that may participate in program funding.
Identified potential funding sources for Technology Village program development included excess ta}c
increment financing revenues, EDA revolving loan fund (State and Federal), EDA levy, private
corporate support or program sponsorship, or an equity pledge investment fund whereby client
Technology Village Business Plan page 19
businesses would pledge a very small percentage of their equity to Technology Village. These
potential funding sources will be further explored during the implementation phases as it is likely
additional funding will be required to move to Phase II and Phase III implementation.
14.Q SUCCESS CRITERIA
A formal progress evaluation of the Technology Village program will be completed every six months
and reports will be provided to the Board of Directors and the Economic Development Authority.
Performance indicators for the program will be reviewed and approved by the Board and it is
anticipated these indicators will be modified as the program evolves; suggested indicators include:
• The number of clients within the incubator;
• Evaluation of services by incubator clients;
• Growth in the number of applicants;
• The number of companies that successfully graduate as measured against the target established
by the Board;
• The number of jobs created on an annual basis within the incubator•,
• The percentage of incubator graduates that stay in the community;
• The calculation of tax revenues generated by technology incubator clients and graduates;
• The level of community support for Technology Village; and
• The capital raised by companies being served.
15.0 NEXT STEPS
This business plan identifies the implementation steps and financial contributions necessary to execute
Phase I of the Technology Village incubator program. Upon approvai of the EDA, it is anticipated that
the City of Prior Lake will take the necessary steps to prepare the Technology Village space within
City Hall following the successful approval of a minimum of two Technology Village clients. Tbe
subcommittee feels it can complete the tasks identified herein and recruit eligible Technology Village
clients by a targeted "grand opening" date of October 1, 2012.
Following presentation of this business plan to the City of Prior Lake Economic Development
Authority, the Technology Village subcommittee will make revisions to the plan as directed by the
EDA and the Technology Village planning phase will be complete.
Technology Village Business Plan Page 20
APPENDIX A
Proposed Technology Village Floor Plan
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Technology Village Business Plan Page 21
APPENDIX B
Sample Tenant Application Form
Technology Village
Application for Admission
Information submitted will be held in confidence
Business Name:
Principals and Titles:
Addresses:
Telephone: Celi:
E-Mail:
Form of Ownership: � Corporation Partnership _ Sole Proprietor
Company form (C-Corp, S-Corp, LLC, etc.):
Nature of business - include a brief description of producdservice and nature of market. Submit
product brochures and company literature, if available.
Brief background of Principal Officer(s); please attach resume:
Date Business was established:
Current status or stage of development of Business (e.g., working on prototype, product in advanced
development, etc.):
Current sales revenue (dollar volume per month): $
Number of employees (include principals): Full-Time Part-Time
Projected number of employees within 12 months: Full-Time Part-Time
Projected number of employees within 24 months: Full-Time Part-Time
Technology Vilfage Business Plan Page 22
Type of �nancing used to operate Business to-date:
_ Venture Capital Firms
Private Investors
Personal Resources
_ Other (indicate nature):
Status of Business Plan:
_ Completed (please attach a copy)
_ In Preparation & Available by:
Not Yet Started
Would you like help in writing a business plan? _Yes No
Approximate square feet of space requirements:
Type of space (i.e. number of offices, open space area, cubicle, etc.):
Any speciai facility requirements such as electrical, security, technology, etc. If yes, please specify:
Other relevant information:
Applicant Name(s):
Title(s);
Signature(s):
Date:
NOTE:
Please attach or mail a business plan and summary, company and project literature, and management
team biographies to:
Technology Village
Attn: Dan Rogness
4646 Dakota Street SE
Prior Lake, MN 55372
Technology Vi!lage Business Plan Page 23
APPENDIX C
Sample Technology Village Logos
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Technology Village Business Plan Page Z4
O � PRIp�
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v �' 4646 Dakota Street SE
Prior Lake. MN 55372
�
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: July 16, 2Q12
AGENDA #: 5B
PREPARED BY: Dan Rogness, Community � Economic Development Director
AGENDA ITEM: ECONOMIC DEVELOPMENT PLAN FOR DEERFIELD BUSINESS AND WEL-
COME INDUSTRIAL PARKS — DRAFT #2
DISCUSSION: Introduction
Since the city has approved the new Revolving Loan Fund Guidelines, and dis-
cussion is now underway about the future use of TIF 1-1 funds, staff developed
a business assistance matrix showing a comprehensive list of available funding
sources for economic development. In addition, staff proposed a target area as
key lacations for industrial growth, including Deerfield and Welcome Avenue.
Hi StOry
The Prior Lake EDA discussed the Business Assistance Matrix on May 14, 201 Z
and directed staff to initially develop a policy or plan targeting the two industrial
parks. Staff developed a draft policy for EDA discussion on June 11. The EDA
directed staff to return with a revised plan that expanded some topics further.
Conclusion
Staff made the following changes to Draft #1:
1. This document changed from a"Policy" to "Plan" in order to recognize
actions vs. policies that must be taken to address needs at DeerField and
Wetcome.
2. Two EDA strategies were added, expanding the list from 6 to 8. Num-
bers 2 and 7 were added regarding the northeast corner of Deerfield and
future potential city code changes the address business friendliness.
3. Exhibits D through F were added.
ISSUES: The city will be adopting an economic development plan that requires staff and
financial resources in order to achieve success.
FINANCIAL Resources as identified in the proposed Plan.
IMPACT:
ALTERNATIVES: 1. Approve the plan with or without amendments identified by the EDA.
2. Continue discussion to a future meeting.
3. Take no action.
RECOMMENDED As determined by the EDA
MOTION:
�CONK3MIC DEVELOPMENT PLAN
DEERFI�I.D BU5iNES5 and W�LC�ME INDUSTRIAL PARKS
Prior Lake, Minnesota
Draft #2 -Ju1y 9, 2012
Purpose:
Economlc development is a higi� priority of the Pr1or Lake City Council. The City of Frior Lake, through
its Economic Development Authority (EDA), has developed initiatives that wili help add businesses,
jobs and tax base to the community. One such initiative is to assist the praperty owners of two
industrial parks to create opportunities for development on vacant fand, primarlty in Deerfieid Business
Park. The EDA is also wan#s to assist with the redevelapment of underutilized industrial sites, primarily
9n Welcome Industrial Park,
Deerfield Business Park [Exhibits A and B]:
The following summary describes all property within Deerfieid zaned tndustrial or Business Park, nat
including tt�e Svoboda site (which is gutded for commercial}:
o Totai developed property = 14 acres (32%!
o Totai undevelvped property - 30 acres (689�b)
o Total praperty (rounded} = 44 acres
The summary above is further divided into the two zoning categories of Industriai and Business Park:
• Develaped �ndustrial property = 9 acres
� Undevelaped industria( property - 18 acres
• Tota( industriai property - 27 acres
� Developed business park land - 5 acres
• Undevelaped business park land - 12 acres
• Total buslness park praperty - 17 acres
Vacant undeveioped industriaf and business park praperty in Deerfield �30 acres) is further divided into
"pad-read�/', which refers to property that can be purchased easity by someone to build a project by
submitting a building permit application. There are no zaning, piatting, street or utifity issues to deal
with ahead af time:
• 13 acres is pad-ready
•�.7 acres is neariy pad-ready (i.e., out[ots need to be platted to lo#s)
The existing patential buiiding space is summarized below based on an assumpti4n that 15% of a site
wili become building space, and 1.5 empioyees will work in that space for every 1,000 square feet:
� i
;
�
�
• Existing total buiiding space - 84,500 square feet {27%)
• Potential new building space - 225,000 square feet {73%)
• Total future est, building space - 309,500 square feet
Wefcame Industrial Park [Exhiblts A and C]:
The following summary describes all property within Welcome, which ls zoned Industriai:
o Total developed property - 38 acres (88%)
o Total undeveloped property - 5 acres (12°r6)
o Tatal property (rounded) - 43 acres
EDA Strategies to Help Create Development Oppartunities:
1. Evaluate options to improve trartsportation and access to/from both industria) parks; exampfes
include constructing a new intersection at CSAN 21, CSAH 87 and 17Q Street, and providing
urban streets thrc�ughaut Welcome industrial Park. [Exhibit D shows an intersection canceptj
2. Consider faciiitating the consolidation of properties at the northeast �ortian of Deerfieid in
order to include that key corner into the fu(1 deveiopment plan of Deerfield Business Park; this
concept wouid inciude the extension of Industrial Lane to serve that expanded 12.5-acre area.
[Exhibits E-1 & E-2 show an 8.5-acre site expanding to a combined 12.5- acre site]
3. Determine ways to improve the overall image of this industria[ area a[ong CSAN 21 by
enhancing visua! entrances along the highway, including measures related to property
maintenance, screening, tandscaping and signage.
4. �xpiore locations and sign ordinance amendments that can accommodate monument entrance
signage for botM industria! parks along CSAH 21.
5. Target public financing assistance to support businesses that create #argeted tevels of jobs and
tax bese.
6. Assist with marketing efforts related to both industria! parks. (Exhibit F is new from Gonyea]
7. Evaluate and implement zaning ordina�ce changes that wili create a more "business friendly"
process for businesses to (ocate in Deerfield or Welcome.
8. Work with property awners in Welcome to achieve future iand uses that have a higher
tax/market value and that generate job creation {i.e., new industrial bui�ding vs, existing
outside storage}.
Public Financtng Assistance:
Prior Lake wiil target public financing assistance based vn the folfowing general guidelines. The key
factar in all negotiations far financing is that a partnership is created be#ween the EDA, property owner
and developer. This means there wil! be full open disclosure on costs associated wit�► vacant property
(e.g,, assessments and fees}, the praposed sales price af property at a fair market value, and the
propased praject benefits related to jobs and tax base.
1, Tax lncrement Financin� (TIF): The city will support the use of Tlf as an impartant economic
development #ool in Deerfield Business and Welcome Indus#rial Park areas for new
development and redevelopment, TlF will be evaluated on a case-by-case basis for each
praposed industrial proJect based on the city's TiF Poficy. TIF is typically used to help pay costs
associated with land acquisition, pubic infrastructure and site improvements. The type of TIF
District to be created is an "Economic Oevelopment" District, established for up to nine years.
The Municipal Deveiopment District boundaries to support the use af TIF was established to be
equal to the city limits.
2. Tax A6atement: 7he city will support the use of Tax Abatements as an important economic
development tool in both industrial park areas for new deve(opment and redevelopment. Tax
abatement wili be evaluated on a case-by-case basis for each proposed industria{ project based
on the city'S Tax Abatement Policy. Tax A4�atement can be used for a broad range of uses based
on a local determination of public benefits, but It is typically used to help pay casts associated
with public infrastructure and redevefopment. i'he city's portion of property taxes is captured
to pay eligible costs up to fifteen years, and the city may request the same from abatement
period from the county and school district taxing jurisdictions.
3. Citv �ees: The city wiil evaluate its fees that are associated with the development of industrial
property, and determine whether any fees can be deferred to support econamic development
in both industrial park areas for new development and redevefopment. An example includes
the city's park dedication fee per acre for commercial/industrial property.
4. City Assessments: The city will evaluate the use of speciai assessments {MN Chapter 429) as a
way for a property owner to pay certain development costs using the city's bonding authority.
Using an assessment method, the property owner can finance those costs at a lower interest
rate over a specified time period, which is typicaliy ten years. The special assessment is added
to the praperty's annual tax statement.
��►�ti-�r �
Deerfi�ld 8c WeEcom� Industrial Park Vacant Land Surrtrnary
Prior Lake, MN
Pay 2Q13 Pay 2013 Pay 2013
C�un#y Est. EMV EMV
Lot Acres ��nrnership Market Value Per Acre Per Sq.Ft.
� � � � -� �����1��.�:�" � ��
�.8 1.5�4 Priar i.ake 5tate Bank $185,000 $120,13t7 $2.76
20 7.07 Mesenbrink $664,000 $93,352 $2.14
S 2.00 J. Sexe $3Z5,000 $162,500 $3.73
6 2.61 Mesenbrink $3t10,000 $214,943 $2.64
a �.00 ausse ��.�o,000 �s�o,000 �3.��
9 1.21 Meser�brink $160,00� $132,2�1 $3.04
11 ' 2.70 Mesenbrink $265,000 $98,148 $2.25
23 5.73 Mesenbrink $560,�0(} $97,731. $2.24
19 �.�Q TupY/Kowalslti $160,p00 $160,OflCJ $3.67
13 2A0 Mesenbrink $195,000 $97,50Q $2.24
3 1.5� Mog Holdings $240,OD0 $160,000 $3.67
1 3.51 Credit Union $160,OQ0 $1q5,960 $2.4�
29.$7 TQTALS/A'VERAGE5 $3,37U,000 $112,8Z2 $2.59
W�LCOM�: ;
57 1.00 Berens $100,000 $1pQ,QQO $2.30
58 1.35 Clausen $125,000 $92,593 $2,13
59 ' �.28 Berens $125,000 $97,656 $2;24
60 1.12 Mickelsan $125,000 $111,647 $2.56
4.75 TOTALS/AVERAGES ;$475,U00 $100,OQQ $2.30
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�'C7R S1�LE--CCJMMERCZAL / ZNDUSTRIAL LQTS & OUTLOTS
Bui1d-t�-Suit C)ptions and
Sellex Financinc� �vailable for qualafied bu�texs.
Ci�ky Incenfives Available.
Seller will dividle.
De��elo�merit Features:
Zoued: C-3 Blxsiness P�rk & C-2 General B�xsi�iess nortl� of Acielrnaun, a�ld
I-1 Gerlet•al Industrial soutl� ofAdeimann �see �g 2)
��itdoo�� �tor�ge perinittecl {CUP).
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Liilkage to T3S and I-TighG��ay 169 via CSAH 21 (Eagle C��eek Ave SE},
Outlots Pricec� at $2.10 l sq.ft, ; Lats starting �t $2.50 / sq. ft.
Far Mare Informatian:
jim Hill •612-?09-8891 •Jim@gonyealand.com / Tom Evenson •651-387-2I04•Tom c�i gonyealand.com
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bttt we do not guarantee it. Tl�e pros�ective Purctiaser should carcfniiy verif}' 111 iuformation contlined hereir� aud
cl�eck �vitli the r�arious go��ern�nental autliorities;srior ta 6r�al pizr�has�.
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Prior Lake. MN 55372
�INIVESO�
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: July 16, 2012
AGENDA #: 5C
PREPARED BY: Dan Rogness, Community & Economic Development Director
AGENDA ITEM: EDA BUSINESS PLAN — DRAFT #4
DISCUSSION: Introduction
Based on EDA discussion at the June 11 meeting, staff has made additional
changes to the third draft of the EDA Business Plan.
Histo
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 and a business incubator concept. This plan is
necessary in order to establish priorities and to assure continued support for on-
going economic development efforts.
Conctusion
The fourth draft plan incorporated the following changes:
•"Unique Limitations for Prior Lake" section was added on pages 1-2.
• The "Achievement Goals" section was moved to page 2, and the overall
goals were increased.
• The "Implementation Plan" section now includes a revised #4 on page 4
related to targeted geographic areas.
• A list of additional reports was added to page 10.
•"Economic Landscape" was removed from the Business Plan, which is
now provided as a separate information piece.
ISSUES: This business plan provides strategic direction for the EDA priorities.
The Economic Landscape document can be used by the EDA, EDAC, City
Counci( and city staff to promote the community in numerous venues.
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. Continue discussion to a future meeting.
3. Take no action at this meeting.
RECOMMENDED As determined by the EDA.
MOTION:
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��NNES'��`�
"A Wonderful Place to Live, Work and Play for a lifetime"
PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY (EDAj
BUSINESS PLAN — DRAFT #4, 7/09/12
Purpose
The City's mission, as stated in 2030 Vision and Strategic Plan, is to "enhance the quality of life for
current and future citizens by providing quality services which result in a safe and healthy
community; recreation and leisure opportunities; preservation and effective use of lakes, parks and
other naturai resources; economic vitality; and the promotion of partnerships, volunteerism and civic
pride for the community's diverse population." This business plan will guide the Prior Lake Economic
Development Authority (EDA) as it develops and implements strategic initiatives in 2012-2Q13 and
beyond to 2020 and 2030.
Primary "economic vitality" goals relate to: (1) job creation/retention, {2) services for businesses and
residents, and (3} a stable and reliable tax base. Prior Lake is very desirable for many reasons, but
before establishing strategies to further our economic development goals, we must understand our
limitations and the unique obstacles they create. These limitations help us identify what we need to
help increase jobs, businesses, services and tax base necessary to support this community as a
wonderful place to live, work and play.
Unique .Limitations for Prior Lake
1. limitation: Lack af Historical Investments in Commercial/Industrial Development The city
has invested most of its public resources in supporting a healthy and vibrant residential lake
community, which has been very successful. Residential property values are well above
average as a result, but the value of commercial/industrial (C/t) property is below average.
For example, Prior Lake's percent of C/I market value showed a small increase from 4.36% in
Z002 to 4.849'o in 2011. This compares to an increase in Savage from 9.85% to 15.079'o during
that same time period.
2. Limitation: Lack of Direct Access to Maior Principal Arterial Transportation Svstems. Prior
Lake's location well outside of the metro's major highway system means that it has limited or
Page 1 of 10
no access to Interstate, US and State Highways. Businesses look elsewhere when highway
access is important. Although important improvements have occurred recently on County
Highway 21 north and east, many other cities have commercial and industrial property
located directly on major highway systems. For example, Scott County's principal arterial
roadways are located primarily in Savage and Shakopee. As a corollary, there is no rail service
to Prior Lake, and there is no high-speed fiber network throughout the city to help
compensate for its lack of highway and rail infrastructure.
3. Limitation: Lack of Pad-Readv Commercial/Industrial Sites. Prior Lake has a heatthy overall
supply of property guided for commercial, business park, and industrial development.
However, a very small percentage of that designated land can be made ready for
development within 30-90 days ... which is considered to be pad-ready. Prior Lake has nearly
200 acres of vacant commercial property with only 20 acres being pad-ready (10%). The city
has nearly 240 acres of vacant business park/industrial property with only 12 acres being pad-
ready (5%a).
4. Limitation: Lack of a Stron� Corporate Business Identitv or Focus. Prior Lake is home to the
county's largest employer, Mystic Lake Casino and Hotel. However, Prior Lake seems to share
Mystic's "home" location with Shakopee based on public perception. No other significant
business presence in the Twin Cities calls Prior Lake its home despite the city's unique
presence related to recreation and entertainment. There is no high-speed fiber network
throughout the city to help attract a corporate office here.
S. Limitation: Lack of a Direct Business Connection or Link to the Lakes Prior Lake is known for
its fourteen lakes as an extremely important asset for city residents. However, it has very
little lake connections for the business community. With one restaurant and few commercial
marinas located here, people don't spend much money associated with commerce or
business-related ventures located on Prior or Spring Lakes. White Bear Lake would be an
example of a community having more focused commerce located on a prominent lake.
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Page 2 of 10
Achievement Goals —1obs, Businesses and Market Value
Considering our strengths and our limitations, the following goais are established for Prior Lake
related to jobs, businesses and taxable market value increases. The "Base" job creation, new
businesses, and increased value estimates are based on the results of the Prior Lake Commercial and
Industrial Demand Analysis completed by Maxfield Research, Inc. The "Base" projections assume jobs
and businesses will be added due to normal market demand. "E.D.", or Economic Development
goals, show an increase in jobs, new businesses and market value, over and above the Maxfield
Research projections. The "E.D." goals assume policy changes and an increased public investment by
the Prior Lake EDA and City Council (i.e., public financing assistance, business incubation, public land
sales). With increased public investment in commercial and industrial development, the E.D. goals
estimate an increase of 50% above the base line figures.
Time Period Base Jobs Created / Base Businesses Added / Base Value Increase /
+ E.D Jobs Created + E.D. Businesses Added + E.D. Value Increase
2011-2015 300 / 450 45 / 70 $9.6 /$14.5 million
2016-2020 675 / 1,000 95 / 145 $21.2 /$32.0 million
2021-2025 625 / 925 85 / 125 $20.8 /$31.0 million
2026-2030 625 / 925 85 / 125 $20.8 /$31.0 million
Total 2,225 / 3,300 310 / 465 $72.4 /$108.5 million
Base Assumptions: 1. Base retail jobs created per 1,000 building square feet = 2.5
2. Base office jobs created per 1,000 building square feet = 3.3
3. Base industrial jobs created per 1,000 building square feet =1.5
4. Base additional building square feet in Prior Lake based on the 2011Maxfield
Commercial/Industrial Demand Analysis report.
5. Base retail businesses added is based on 1 per 3,000 square ft. average.
6. Base office businesses added is based on 1 per 1,800 square ft. average.
7. Base industrial businesses added is based on 1 per 12,000 square ft. average.
8. Total site/building market value increase is based on $90.00 per building square ft. average.
2012/2013 Implementation Plan
The following actions shall be accomplished during 2012 and 2013 as key initiatives of the EDA. All
initiatives can work together to support a business community that is focused on technology and
Prior Lake's strengths in entertainment and recreation. By moving forward with these initiatives,
Prior Lake will have a more significant business presence in the Twin Cities.
1. Broadband (Communitv 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.
• Accomplishment: Prior Lake will be more competitive economically by connecting
existing/future businesses and residents to high-speed fiber network.
• Timeline: The subcommittee will make a recommendation to the EDA, and the EDA will
make its recommendation to the City Council by August 1, 2012; a decision to move
forward fully or partially should be made by the EDA and City Council during its 2013
budget deliberations.
Page 3 of 10
• Budget: $80,000 budget by the EDA for the consultant in 2012; $35+ miilion needed to
fuily implement community-wide fiber, including interest and personnel costs.
• Metrics: New business/job growth as a result of fiber availability.
2. Technalo�v 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 were
evaluated in terms of space, locatian, partnerships and funding.
• Accomplishment: Business incubator space will strengthen Prior Lake as a place to start
and grow small software/technology businesses.
• Timeline: The subcommittee will make a recommendation to the EDA, and the EDA wil)
make its recommendation to the City Council by August 1, 2012; a decision to move
forward fully or partially should be made by the City Council during its 2013 budget
deliberations.
• Budget: $50,000 estimated city support in the first year of operations as start-up costs;
business rents will support operational costs years 2-3 in Phase 1 at City Hall.
• Metrics: New business/job growth in incubator location.
3. Propertv Supplv and Demand. The EDA has compiled a commercial and industrial land
inventory in order to determine the availability of pad-ready sites. The 2011 Maxfield C/I
demand analysis report has been 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.
• Accomplishment: Prior Lake will have more pad-ready commercial and industrial sites
starting in 2013.
• Timeline: The EDA should deliberate actions necessary with corresponding costs that will
move more nearly pad-ready sites into pad-ready condition in preparation of making a
recommendation to the City Council by the end of 2012.
• Budget: Unknown.
� Metrics: New business/job growth and tax base increase on available sites.
4. Tar�eted Geo�raphic Areas for Development Assistance. The EDA will help evaluate ways
to achieve development goals on vacant land in targeted areas of the city. For example, the
EDA has begun discussions with property owners in Deerfield Business Park in order to create
a stronger partnership. A feasibility report has been completed for Welcome Avenue
Industrial Park to identify casts associated with providing water, sewer and streets to all
parcels. Large tracts of prime vacant commercial and business park property are ideal for
future development along the County Highway 42 corridor, which are currently being farmed
rather than owned by developers.
• Accomplishment: The City will consider partnership opportunities within targeted
commercial/industrial locations in order to assist and market business opportunities.
• Timeline: Complete a process to identify target areas and corresponding levels of public
support by the end of 2012.
• Budget: Unknown.
• Metrics: New business/job growth and retention, and tax base increase on the improved
industrial property.
Page 4 of 10
5. Economic Development Resources. The EDA has evaluated funding resources that are
available and necessary to assist businesses and heip it achieve economic development
objectives. Example resources include tax increment financing, tax abatement, revolving loan
funds and the EDA budget. The EDA will propose to the City Council that it establish a list of
resources for businesses, including a permanent funding source for the EDA starting in 2013.
• Accomplishment: Prior Lake will be more proactive by identifying resources that can be
used and supported for future commercial and industrial development.
� Timeline: Ongoing during the year.
• Budget: Approximately $575,000 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 $ 12,500
Business Revolving Loan Fund (Federal) $ 112,500
Business Revolving Loan Fund (State) $ 87,500
TIF District 1-1 Excess Increment $ 195,000
TOTAL $ 575,250
6. Redevelopment. The EDA will identify redevelopment opportunities that include the
downtown area and other potential (commercial/industrial) sites. For example, the "Digger's
Site" is a candidate for redevelopment outside the downtown, which is one site of many that
will enhance Prior Lake's retail sector. The analysis will review existing constraints that inhibit
redevelopment to occur (i.e., site contamination) and associated costs that may require public
sector involvement.
• Accomplishment: Sites will be targeted with necessary resources in order to improve the
likelihood that future redevelopment will occur in Prior Lake.
• Timeline: Staff will submit a plan to the EDA by September 30, 2012 to be reviewed and
forwarded to the City Council.
• Budget: Unknown.
• Metrics: New business/job growth and tax base increase on redeveloped sites.
7. Citv Codes & Fees. The EDA will complete a comprehensive analysis of city codes and fees
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 including rationale
nexus, as well as an evaluation of the internal application/permit review process. Staff will
develop initial recommendations for EDA consideration, to be first reviewed and
recommended by the EDAC.
• Accomplishment: Prior Lake will be more business friendly by making changes to city
codes, fees and/or processes that help achieve development in Prior Lake.
• Timeline: The EDAC will provide preliminary recommendations to the EDA by September
30, 2012.
• Budget: Unknown.
• Metrics: New business/job growth based on a more business friendly codes and the
corresponding permit review process.
Page 5 of 10
Summary of Short-Term Funding Needs and Resources
2012 EDA and Economic Development Bud�et (Approved):
o Expenses= $182,000
o Uses: 0.5 ED Director salary/benefits ($69,000); broadband study ($80,000);
Venture Fair ($10,000); legal/training, etc. ($23,000).
o Revenue = $182,000
o Sources: $14,000 tax levy +$148,000 reserves +$15,000 grant +$5,000 interest
2013 EDA Bud�et (Estimatedl: '
o Expenses = $220,000
o Uses: 0.5 ED Director salary/benefits ($72,500); business incubator
set-up and operations ($50,000); redevelopment assistance ($75,000);
miscellaneous ($22,500).
o Revenue = $220,000
o Sources: $125,000 tax levy +$75,000 TIF 1-1 +$6,000 incubator leases
+$12,000 revolving loan fund +$2,000 revolving loan administration
2014+ Future EDA Bud�et (Proiectedl:
o Expenses= $200,000
o Uses: 0.5 ED Director salary/benefits ($75,000); business incubator
operations ($6,000); pad-ready sites and/or redevelopment
assistance ($100,000); miscellaneous ($19,000).
o Revenue = $200,000
o Sources: $100,000 tax levy +$15,000 incubator leases +$70,000
redevelopment grant +$13,000 revolving loan fund +$2,000 revolving
loan administration
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 shoutd 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?
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
Page 6 of 10
Business Pian. To begin this process, the foliowing key economic development objectives are being
identified and prioritized one through five:
1. Assist in the creation of desirabte employment opportunities for the citizens of Prior Lake;
2. Identify opportunities where the EDA can assist in attracting and developing new businesses
within the community;
3. Provide the necessary support mechanisms to retain and aid in the expansion of existing
businesses;
4. Broaden and diversify Prior Lake's tax base; and
5. Develop a foundation which will establish Prior Lake as a community full of economic
opportunity now and well into the future by embracing the motto; Prior Lake: A
Wonderful P1ace to Live, Work and Play for a Lrfetime.
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 residential permits and remaining lot inventory. [quarterly 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]
• Track change in commercial/industrial market value using County data [annual evaluation].
• Track the number and acreage of pad-ready commercial/industrial sites [annual evaluation].
• Track zoning permit approval process associated with commercial/industrial projects.
[quarterly evaluation]
• Track speed of processing development/zoning applications (bi-annual evaluation).
2030 Vision and Strategic Plan
Prior Lake has significant strength as a hub of recreation and entertainment amenities in the
southwest Twin Cities metro region. A key economic strategy is to continue to create initiatives that
strengthen this aspect of Prior lake in conjunction with business technology. The most recent
revision of the city's strategic plan was adopted by the City Council on February 21, 2012. It includes
twelve key characteristics and seven strategic elements shown as follows:
Kev Characteristics:
1. Parks, trails and natural resources (that provide year-round recreational activities).
2. Lakes and water quality.
3. Small town feel (downtown; urban & rural mix).
4. Comprehensive planning and infrastructure investment.
5. Positive financial stability.
6. Suburban fringe location; not on a major highway.
7. Home to Mystic Lake Casino/Hote) and SMSC tribal community.
8. Community that struggles with growth options.
Page 7 of 10
9. Minimal zoned areas for businesses (very few pad-ready sites).
10. Collaborative community orientation.
11. Innovative local government.
12. Limited local staff resources.
Strate�ic Elements:
Economic and community development Strong financial management
Natural resources. Community assets
Safe and heatthy community Transportation
Communication
Employment
With job and employment growth being key factors for economic development success, it is
important to understand the current status within Prior Lake. Data from the Metropolitan Council
and the Minnesota Department of Employment and Economic Development (DEED) show the
following employment and business characteristics for 2011. City staff has estimated the number of
total employees that work for the Shakopee Mdewakanton Sioux Community (SMSC).
Industry Employees Percent SMSC Est.
Construction 352 4.5% 25
Wholesale Trade 112 1.4%
Retail Trade 353 4.5�0
Finance, Insurance and Real Estate 223 2.9%
Professional and Technical Services 162 2.1% 25
Management, Admin. and Other Services 659 8.4% 25
Accommodation and Food Service 3,533 45.2% 3,250
Arts, Entertainment and Recreation 149 1.9% 75
Public Administration 919 11.7%
Other 1,361 17.4% 400
TOTAL EMPLOYEES 7,823 100% 3,800
Industry Establishments Percent
Construction 93 16.6%
Trade, Transportation and Utilities 101 18.0%
Financial Activities 72 12.9%
Professional and Business Services 120 21.4�0
Education and Health Services 59 10.5%
Leisure and Hospitality 29 5.2% .
Other Services 52 9.3%
Public Administration 4 0.7�0
Other 30 5.4%
TOTAL BUSINESS ESTABLISHMENTS 560 100%
Page8of10
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 identitv — 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 sateltite 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. Public 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.
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 deveiopment.
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".
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 10
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.
5. Begin to implement actions necessary to redevelop key opportunity areas as identified
in a Redevelopment Plan for Prior Lake,
6. Begin the first implementation stages of a Technology Village campus with an
estimated 100,000 square feet of building space.
7. Cooperate with a private developer to build a data center facility in Prior Lake.
2021-2030 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.
4. Complete all supporting infrastructure improvements that results in over 100 acres
being developed as commercial and business park uses.
5. Develop plans for the expansion of commercial and industrial development in the
Southwest annexation area of Spring Lake Township.
6. Achieve key redevelopment objectives within the city related to the downtown area
and other priority redevelopment sites.
Additional Reaorts:
1. Fiber Optic Network Feasibility Report for Prior Lake, June 2012
2. Business Plan, Technology Village, Prior Lake, 2012
3. 2030 Vision and Strategic Plan, City of Prior Lake, February 21, 2012
4. Report of the SCALE Economic Development Strategy Group, June 20, 2011
Page 10 of 10
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4646 Dakota Street SE
'�INI�rgS�� Prior Lake, MN 55372
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: July 16, 2012
AGENDA #: 5D
PREPARED BY: Jerilyn Erickson, Assistant Treasurer
AGENDA ITEM: 2013 BUDGET DISCUSSION — EDA TAX lEVY
DISCUSSION: Introduction
The purpose of this agenda item is to continue discussion on a preliminary
2013 budget and possible funding sources for the Economic Development
Authority Special Revenue Fund.
Hi StOry
The 2012 EDA budget reflects 50% of the personnel costs associated with
the Economic Development Director position (formerly budgeted in the
General Fund Economic Development Department) as well as other
operational costs such as professional services, training, memberships,
etc. The 2012 EDA budget was funded primarily by using fund balance
reserves. The EDA board recognized that a sustainable funding source
would need to be implemented when considering the 2013 budget.
Current Circumstances
Cify staff has begun preparing their department budget requests for 2013.
The original 2012 budget included some basic operational expenses which
totaled about $138k, which was later amended to $168k.
Staff anticipates that initial ongoing operational and project expenses will
be in the range of $200k-$250k each year. Until there is some solid history
of expenditure activity, this amount may vary.
Staff has prepared an EDA Business Plan which is intended to establish a
framework for economic development initiatives that will require one-time or
ongoing funding. EDA Business Plan Draft #4 identifies estimated 2013
EDA funding needs in the amount of $222k will be necessary to operate the
EDA and fund the business incubator and (re)development assistance.
See attached report with budgeUactivity details.
The report doesn't address cashflow needs for the EDA. Since it is
anticipated that the EDA will exhaust its reserves by the end of 2012 and
property taxes will not be received until June, 2013, the EDA will have a
negative cashflow during the first six months of 2013. Similarly, 2014 will
have a negative cashflow during the first six months unless the 2093
funding sources are adjusted in order to build a reserve balance for year
ending �2/31/2013.
Conclusion
The EDA should provide direction to staff regarding expenditures and
funding sources for the 2013 budget.
Based on direction provided, staff will present an updated proposed budget
at the EDA's August meeting for further consideration and adoption.
ISSUES: Article 10.2 of the EDA bylaws requires that the EDA budget by approved
by the City Council.
A proposed 2013 budget will be presented to the EDA in August. This
budget will be based on direction provided to staff at today's meeting and
any subsequent. Upon approval by the EDA, the preliminary budget will be
presented to the City Council at the September 10, 2012 meeting.
FINANCIAL There are a number of funding sources that could be considered for
IMPACT: funding the EDA's operational expenses such as:
• Transfer of General Fund reserves;
• Transfer from General Fund tax levy;
• Economic Development Authority tax levy.
As with using the EDA's reserves, utilizing the General Fund reserves is a
short-term solution that doesn't address long-term, ongoing operational
activities that will be necessary to achieve economic development goals. In
addition, the City Council may have other planned uses in mind for the
General Fund reserves such as technology upgrades, land acquisitions,
etc; therefore, General Fund reserves may not be available to fund the
EDA's operational expenses.
The City could increase the general tax levy and authorize a transfer of
those revenues to the EDA Fund.
The City could also consider an EDA property tax levy. Per State Statute
469.107 subd. 1, a city may, at the request of the EDA, levy a tax in any
year for the benefit of the authority. The tax must be not more than
0.01813 percent of the taxable market value. The estimated taxable
market value for taxes payable in 2013 is $2,350,346,800; therefore, the �
maximum tax levy could be $426,117. If the City were to consider an EDA
levy that is greater than 0.01813 percent of taxable market value, the levy
would be subject to reverse referendum provisions as outlined in State
statute 469.107 subd. 2.
All of the above options must also be approved by the City Council.
ALTERNATIVES: The following alternatives are available to the EDA:
1. Provide direction to staff regarding expenditures and funding
sources for preparation of the 2013 proposed budget.
2. Discuss alternatives and provide direction to staff at a later date.
RECOMMENDED Alternative 1.
MOTION:
ECONOMIC DEVELOPMEWT AUTHORITY EDAMeeting0J.26.2012
EDA � N�N-Bi�A$�TEa �UN�iS Total
2013 TIF Fund Rev State Rev Fed 2013
Proposed Proposed Loan Proposed Loan Proposed Proposed
Budget Activity Activity Activity Activity Comments
Revenues / Sources:
Intergovernmentalrevenues
31010 PropertyTaxes $ 125,OQ0 $ - $ - $ - $ 125,OOQ
33630 GrantRevenue - - - - -
Charges for Services
IncubatorLeases 6,000 6,000
RevLoanAdministration 2,000 ReimEDAforstafftimeto
administerrevolvingloans
Miscellaneous revenues
36210 InterestEarnings - - _ _ _ eoawmProbabiynecnar�ed
interest during first S months for
negative cashflow; offset by
interest earned remaining 7
mos.
Transfers from Other Funds
39203 General Fund - - - - -
Total Revenues / Sources $ 133,000 $ - $ - $ - $ 131,000
Expenditures / Uses:
101 Personnel $ 72,500 $ - $ - $ - $ 72,500
201 Office Supplies 500 - - - S00
304 Legal Fees 7,000 - - - 7,000
314 Professional5ervices 10,�00 - - - 10,OOQ
331 Training & Certification 3,500 - - - 3,500
351 Legal Notices 500 - - - 500
433 Dues & Subscriptions 1,000 - - - 1,000
Business Incubator 38,000 12,000 50,000
Redevelopment Assistance - 75,000 - - 75,000
Loan Administration - - 2,OD0 - 2,000
Total Expenditures / Uses $ 133,000 $ 75,OOQ $ 14,000 $ - $ 222,000
Change in Fund Balance $ - $ (75,000) $ (14,000) $ - $ (91,000)
O: �EDA�2013 EDA 8udgei: 2073 7/11/2012
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Prior Lake_ MN 55372
`�INxESO��'
ECONOMIC DEVELOPMENT AUTH4RITY AGENDA REPORT
MEETING DATE: July 16, 2012
AGENDA #: 5E
PREPARED BY: Casey McCabe, Community Development Specialist
AGENDA ITEM: DOWNTOWN REDEVELOPMENT ACQUISITION OPPORTUNITIES
DISCUSSION: Introduction
Two downtown area property owners have approached City staff asking if the
City of Prior Lake has an interest in purchasing their properties. The two resi-
dential properties are located at 4664 Dakota Street (home next to the Rotary
Gateway to Lakefront Park) and 16323 Main Avenue (white house at the north
east quadrant of Main and Pleasant).
During the June 11, 2012 meeting, City staff asked the EDA if they had any in-
terest in further evaluating either of the properties available for acquisition with
the goal of enhancing redevelopment opportunities in the downtown area. The
EDA indicated an interest in further evaluating the 16323 Main Avenue property
as a future redevelopment site. The EDA did not have an interest in pursuing
the Dakota Street property as a future redevelopment site at this time.
The EDA asked staff to provide additional information about the status and
needs in the downtown area, including a map identifying al! parcels owned by
the City of Prior Lake in the downtown area.
Histarv
Downtown redevelopment opportunities can include "friendly" acquisitions of un-
derutilized properties. Often, this includes older residential property that will
eventually be redeveloped to a commercial or institutional use during the follow-
ing 5-10 years. Prior Lake has been involved in previous downtown property
acquisitions, including the site for City Hall and public parking lots; it also sold
property for an office building. The source of funding for this activity would
come from the TIF 1-1 fund balance of nearly $200,000; pending a future modi-
fication approved by the City Council.
Conclusion
The property at 16323 Main Avenue is a 4 bedroom, 1 bathroom single family
residential rental property. The total lot area is 20,500 square feet (0.471
acres); however, the lot area includes approximately 9,590 square feet within the
Pleasant Street right-of-way. The Scott County estimated market value for this
property is $119,000 ($65,000 land); the total value per square foot is $10.91
(not including the Pleasant Street right-of-way).
Staff evaluated the property as a potential redevelopment site and as a tempo-
rary parking area until future redevelopment. Based upon the results of a recent
Downtown Area Parking Study survey completed by City staff, the on-street
parking area adjacent to the subject property (east side of Main Avenue) had an
average occupancy of 67% of available parking stalls; however, the on-street
parking area located south of the subject property along Pleasant Street only
had an average occupancy of 12% of the available parking stalls. Although a
public off-street surface parking lot may receive some use, the parking study
results do not indicate a parking shortage in the immediate area.
As a future redevelopment site this property is somewhat desirable for commer-
cial or office development due to its location at the intersection of Main Avenue
and Pleasant Street. However, if this property were combined with one or both
of the parcels located immediately north of the subject property, staff believes
there would be a great opportunity for redevelopment.
Excluding that portion of the property in the Pleasant Street right-of-way, the
subject property totals 0.25 acres. When combined with the parcel located im-
mediately north, which has the same property ownership, the development site
totals .035 acres. When the subject property is combined with the two parcels
located north, the redevelopment site totals 0.41 acres. As a comparison, the
old gas station site with the day care property are .36 acres combined (at the
northwest corner of Main and Dakota).
The EDA should evaluate a potential public property acquisition in downtown
Prior Lake based on the following criteria:
1. Does acquisition of this site meet a public purpose? In this case, the city
would be "land banking" property for future commercial, institutional, or
public redevelopment opportunities at a key location. Removing blighted
or underutilized structures is often viewed as a public purpose for munic-
ipal government.
2. Does downtown property acquisition meet a key strategy of the EDA? In
the draft EDA Business Plan, redevelopment is a strategy for economic
deveiopment. In this case, the EDA may want to discuss concentrated
versus scattered downtown property acquisition as most appropriate for
its downtown redevelopment strategy.
3. What is the cost and associated risk of downtown property acquisition?
Cost is based on the property's fair market value (typically obtained from
an independent appraisal), demolition (typically $15,000 per house), and
annual property maintenance. Risk includes unknown property issues,
such as poor soils or underground contamination, as well as having va-
cant property. In addition, the Uniform Act may require the city to pay re-
locaton costs for the existing rental tenant.
ISSUES: If TIF 1-1 funds are ultimately used to acquire this site, the EDA will have com-
mitted those funds in the downtown area in 2012. Other opportunities will then
not have the same funding source available.
FINANCIAL The TIF 1-1 balance will provide public resources to assist with an appraisal (es-
IMPACT: timated at $1,200 per property) and redevelopment costs.
ALTERNATIVES: 1. Direct staff to secure an appraisal on the subject property located at 16323
Main Avenue and then to use that information to develop a corresponding
R
budget to be brought back to the EDA.
2. Estabiish a maximum total cost the EDA is willing to pay for the property and
direct the staff to negotiate the acquisition of the property for that amount or
not at aii.
3. Continue discussion at a future meeting.
4. Direct staff to take no further action to acquire these properties.
RECUMMENDED As directed by the EDA.
MOTION:
ATTACHMENTS: 1. Parcel Information —16323 Main Avenue
2. City of Prior Lake Owned Parcels in the Downtown Area.
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16323 Main Avenue
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Property Information
Parcel ID: 250020030 Bathrooms: 1
Taxpayer M11ame: JOHNSON ROBERT W� Year Built: 19Q0
Taxpayer Address1: 9601 RIVERVIEW RD Deeded Acreage: 0
Taxpayer Address2: EDEN PRAIRIE, MN GIS Acreage: 0.47074
Property Addressl: 16323 MAIN AVE SE Zoning Classification:
Property Address2: PRIOR LAKE MN 55372 Legal Description: SubdivisionName CATES
ADDN Lot 002 Block 001 SubdivisionCd 25002
N1/2 OF EX COM NW COR, SW 2.35 SE
104.85' TO E LINE, N 31.1' TO NE COR, W
School District: 719 Plat Name: PLAT-25002 CATES ADDN
Estimated Land Value: $65,000 Block: 001
Estimated Buildings Value: $54,000 Lot: 002
Total Estimated Market Value: $119,000 Unique Well & Boring No.:
Home Style: TWO STORY Well Depth Drilled:
Bedrooms: 4 Well Date Drilled:
This drawing is neither a legally recorded map nor a Survey and is not Map Scale N
intended to be used as one. This drawing is a compilation of records, �
information, and data located in various city, county, and state offices, and 1 inch = 105 feet .
other sources affectinq the area shown, and is to be used for reference �/,/ E �!�;
purposes only. Scott County is not responsible for any inaccurecies herein �* — °
contained. If discrepancies are found, please contact the Scott Counry Map Date ������, ..._���
Surveyors Offce. 7�6�2� � 2 S ��
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Ci#y of Prior Lake Parcels
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v � 4646 Dakota Street SE
Prior Lake. MN 55372
�INNES��
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: July 16, 2012
AGENDA #: 6A (1) (2) (3)
PREPARED BY: Casey McCabe, Community Development Specialist
AGENDA ITEM: EDAC REPORT AND SUBCOMMITTEE REPORTS
DISCUSSION: EDAC Report
The EDAC met on June 28, 2012 with a quorum present. The meeting agenda
included the following items: (1) CR 21 speed limit study discussion; (2) down-
town bus stop location discussion; (3) Downtown South Study update; (4) Envi-
sion Minnesota Downtown Vitality Technical Assistance; (5) Downtown Area
Parking Study update; and (6) EDA updates. The next regular meeting will be
July 26 h .
Broadband Fiber Network Subcommittee Report
The Broadband Advisory Committee presented its report during a special meet-
ing of the EDA on June 21, 2012. The committee presented its findings and
recommendations and held a brief question and answer period. Due to the
complexity of the subject matter the EDA requested City staff coordinate a se-
cond question and answer meeting, which has been scheduled for 5:30 p.m. on
Monday, July 16, 2012.
Technoloqy Villaqe Subcommittee Report
This Technology Village subcommittee met most recently on Monday June 25,
2012 to review the EDA's recommended business plan modifications. The
Technology Village subcommittee made changes to the business plan based on
EDA recommendations. The revised business plan will be presented to the EDA
during the regularly scheduled EDA meeting on July 16.
ISSUES: None
FINANCIAL No additional budget impact at this time.
IMPACT:
ALTERNATIVES: 1. (no alternatives are provided at this time)
RECOMMENDED Discussion only.
MOTION:
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v �' 4646 Dakota Street SE
Prior Lake_ MN 55372
'�trjV�gpR
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: July 16, 2012
AGENDA #: 66
PREPARED BY: Casey McCabe, Community Development Specialist
AGENDA ITEM: FIBER OPTIC NETWORK FEASIBILITY REPORT — QUESTION 8� ANSWER
DISCUSSION: Introduction
The Broadband Advisory Committee (BAC) presented its Fiber Optic Network
Feasibility Report during a special meeting of the EDA on June 21, 2012. The
BAC presented its findings and recommendations and held a brief question and
answer period. Due to the complexity of the subject matter, the EDA directed
City staff to make arrangements for a future EDA/BAC informational meeting.
Hi StOry
The Broadband Advisory Committee was formed by the EDA in September 2011
for the purpose of completing a feasibility study for a community wide broadband
fiber network. The EDA hired a consultant, Lookout Point Communications, in
January 2012 to work with the BAC to complete the fiber optic network feasibility
report. Eric Lampland with Lookout Point Communications and the BAC have
been meeting for two hours every two weeks since January 27, 2012.
Conclusion
Eric Lampland and members of the BAC will be available to provide additional
information related to the Fiber Optic Network Feasibility Report and answer
questions from the EDA.
A City Council Work Session has been scheduled for Monday, July 23, 2012 to
allow the BAC to present its report to the Prior Lake City Council.
ISSUES: EDA members may want to consider providing its recommendation to the City
Council at its meeting on July 23, or it may want to provide direction to the BAC
regarding key topics and content to include in the City Council Work Session
presentation.
FINANCIAL Potential $35+/- million revenue bond issue by the City for full fiber build-out;
IMPACT: Phase 2 requires Outside Plant Design to begin at a cost of nearly $500,000.
ALTERNATIVES: 1. Provide a recommendation to the City Council.
2. Provide direction to the BAC for its presentation to the City Council.
3. Defer further action by the EDA to a future meeting.
RECOMMENDED As directed by the EDA.
MOTION: