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HomeMy WebLinkAbout07 16 2012 EDA MinutesN U 4646 Dakota Street SE Prior Lake, MN 55372 Economic Development Authority Meeting Minutes July 16, 2012 1. CALL TO ORDER President Hedberg called the meeting to order at 4:03 p.m. Present were Hedberg, Morris, Choudek, Chromy and Myser. Also present was EDA Executive Director Boyles, Community & Economic Development Director Rogness, EDA Assistant Treasurer Erickson and Community Development Specialist McCabe. 2. APPROVAL OF AGENDA MOTION BY CHOUDEK, SECONDED BY MORRIS TO APPROVE THE AGENDA AS PRESENTED. VOTE: Ayes by Hedberg, Morris, Choudek, Chromy and Myser. The motion carried. 3. APPROVAL OF MEETING MINUTES MOTION BY CHOUDEK, SECONDED BY MORRIS TO APPROVE THE MINUTES OF JUNE 11, 2012 VOTE: Ayes by Hedberg, Morris, Choudek, Chromy and Myser. The motion carried. MOTION BY CHOUDEK, SECONDED BY MORRIS TO APPROVE THE MINUTES OF JUNE 21, 2012 VOTE: Ayes by Hedberg, Morris, Choudek, Chromy and Myser. The motion carried. 4. PUBLIC HEARING No public hearing was scheduled. 5. OLD BUSINESS A. Technology Village Business Plan, Draft #2. McCabe: summarized the subcommittee's meeting on June 25 that was held to discuss the EDA's request from June 11 to further define client focus and to evaluate possible EDA equity in start-up businesses. McCabe reported that the subcommittee broadened the scope of clients to those having a technology focus in emerging technologies. An escalating rent structure was recommended rather than implementing an eq- uity provision. Myser: asked for a definition of social environment; he also argued for a small investment, even one per- cent, as a hook from the EDA. Hedberg: stated that he sees a positive outcome from the proposed rent structure even though it is not an investment in the businesses. Chromy: felt that the business investment is staying in Prior Lake as a new business. Boyles: suggested that maybe the percentage equity investment increase over the years, from say, one to three percent. Choudek: thought that the ease of a graduated rent increase may be a highly positive action rather than asking for a percent equity. Myser: recommended an alternative whereby the EDA obtains some benefit if the business posts a pos- tive income within five years of start-up. Hedberg: asked about the plan's assumption of the number of clients; he also wondered whether the EDA should add in some cost for the rent subsidies that would be required in Phase 2? Morris: stated that he was uncomfortable with taking some ownership percentage, especially since some businesses will likely be sole proprietorships. Choudek: wants to set up a positive climate to help businesses; maybe the EDA should consider a meth- od to monetize the service component. Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com Morris: supported going out 2-3 more years with the business plan. Hedberg: advocated that the EDA vote and send this on to the City Council for its review. MOTION BY MYSER, SECONDED BY CHROMY TO RECOMMEND SENDING THE BUSINESS PLAN TO THE CITY COUNCIL SUBJECT TO CHANGES DISCUSSED ABOUT MONETIZING MORE SER- VICES INTO THE RENT SUBSIDY. FURTHERMORE, THE MOTION REQUESTS THAT THE CITY COUNCIL AUTHORIZE A TRANSFER UP TO $50,000 FROM GENERAL FUND RESERVES TO FUND THE STARTUP OF THE BUSINESS INCUBATOR, AND THAT THE EDA BUDGET BE AMENDED TO EXPEND THOSE TRANSFER FUNDS FOR STARTUP COSTS IN 2012. VOTE: Ayes by Hedberg, Morris, Choudek, Chromy and Myser. The motion carried. B. Economic Development Plan for Deerfield Business and Welcome Industrial Parks, Draft #2. Rogness: summarized changes that were made since the first draft related to more information about zon- ing code changes that could be made to help this area, proposed changes to a future new intersection on County Highway 21 and Revere Way, and a desire to incorporate the Svoboda corner into the the Deerfield Business Park. Myser: asked that staff attempt to prioritize items identified in the plan, and that the city further emphasize a coordinate effort with property owners to get these parks fully developed. Hedberg: asked about the cleanup status and conditional use permit (CUP) conditions related to the Svo- boda property. Rogness: responded that sewer/water has just been connected to this property, and that city staff would begin to evaluate the current status of this site in relationship to its annexation and previously granted CUP from Scott County. James Hill: representing Gonyea, stated that they are now marketing the property on behalf of the majori- ty of property owners, and that they would support city actions that help them market the property. For ex- ample, an industrial business inquiry related to recycling asphalt shingles ran into city code roadblocks due to business operational hour restrictions in the Industrial Zone. Hill: indicated that the owners have suffered from a downturn in the economy, but that something needs to jumpstart development once again. He supported the need to evaluate some potential building material standard problems that may inhibit some development. Myser: said that the EDA must help identify ways to create benefits versus costs that come from discus- sions like these as part of the city's efforts to support economic development. EDA Commissioners: asked Rogness to keep refining the city's overall direction to support economic growth in these two important business/industrial parks. C. EDA Business Plan — Draft #4. Rogness: summarized changes made in the fourth draft of an EDA Business Plan that provides direction for EDA activities in 2012-2013 and beyond. He emphasized that addition of a new list of "limitations", a change in the Achievement Goals section. EDA Commissioners: agreed that the list of limitations was at the wrong location and that it should reflect challenges rather than limitations. Furthermore, some of the text should be more positive about Prior Lake. Myser: supported having a business plan for each key strategy section, and that the EDA should use the Technology Village Business Plan as a good example. Hedberg: felt that we may want to test certain assumptions along the way as the EDA move forward with initiatives. supports having the achievement goals early in the plan, and it should tie jobs to tasks. He supported having this plan be the basis for the EDA's budget request to the City Council for 2013, and that it should be more of an umbrella document setting overall economic development direction. Finally, he asked that the Achievement Goals section be based on past 10 -year historical data rather than using the Maxfield market analysis. Due to time constraints, he supports ways to approve the plan with changes or distributing it for final review well before the EDA's next meeting. 2 Rogness: said that he could get a final revised draft of the business plan out to all EDA member by the end of July. Myser: asked that staff review where the Business Venture Fair event should be included in the plan since it was not shown in this draft. D. 2013 Budget Discussion — EDA Tax Levy. Erickson: summarized her staff report related to how the 2012 budget was structured and the need for a sustainable funding plan for the EDA starting in 2013. Budget reserves had been used in 2012. Hedberg: supported the need to continue EDA efforts and initiatives in 2012 forward to 2013 and beyond in order to strengthen economic development; the EDA must continue to be active. Chromy: stated that as more service are needed to assist economic development, funding is needed for those efforts. Myser: felt that the EDA must balance its budget request with what it has identified to accomplish in 2013 against having accounts stating general needs. He stated that it's okay to make budget request mid -year, if necessary, as opposed to setting higher budgets at the beginning with unknown uses. Erickson: reiterated that the EDA will likely have about $4,000 in its account at the end of 2012. She stat- ed that continuing to use city reserves is going against other competing needs. Hedberg: asked that the EDA consider stepping over a bridge that will begin to build reserves in the EDA's budget in order to equip it to accomplish economic development goals. Morris: asked why the EDA is not considering a budget allocation to continue fiber design efforts to im- plement the broadband subcommittee's recommendation? Hedberg: responded that the fiber report is still being discussed by the EDA, and it has yet to be dis- cussed by the City Council. Serious negotiations are ahead with the public and existing service providers, and he doesn't see final decisions in 2012 to approve fiber implantation. Erickson: reminded EDA Commissioners that there is a statutory obligation to propose a budget to the City Council on an annual basis. She said that the EDA really needs about $35,000 starting at the begin- ning of the year in a reserve account just for early year cash-flow purposes. Choudek: supported a 2013 EDA levy as the best option to fund its activities and initiatives. Myser: stated that there appears to be a base need for EDA services at $100,000 with other services to be added above that base amount. EDA Commissioners: supported staff to return with a proposed $200,000 EDA tax levy, which would pro- vide the reserve cash-flow account, base funding needs, and an additional $50,000 for professional ser- vices needed in 2013. E. Downtown Redevelopment Acquisition Opportunities. Rogness: summarized his staff report regarding the possible city acquisition of downtown redevelopment property located at 16323 Main Avenue (a rental single family house). Additional information was provided to the EDA about all city -owned downtown properties, and an updated parking study showing no strong need to add public parking in this south downtown area. EDA Commissioners: asked staff to discuss the owner's level of interest in selling the adjacent commer- cial property, which is also under their ownership. If both properties are for sale, then it may make more sense to pursue this area to acquire for future redevelopment opportunities. EDA Commissioners also asked staff to contact the owner of the Mertens' property downtown that includes an older blighted vacant house across from the Carlson dental office as another potential acquisition. 6. NEW BUSINESS A. (1) EDAC Report Rogness: indicated that due to time constraints, it was not necessary to give EDAC, Broadband and Technology Village reports; some of them were discussed previously in the meeting. (2) Broadband Fiber Network Report 3 (3) Technology Village Incubator Report B. Fiber Optic Network Feasibility Report — Question and Answer Time Rogness: asked that Eric Lampland of Lookout Point Communications and members who are present from the Broadband Advisory Committee join the EDA in order to have continued discussion on the sub- committee's June report to the EDA. This second meeting was set up as a question and answer time. Hedberg: opened the floor to have all EDA Commissioners ask questions of Eric, staff and the subcommit- tee members. EDA Commissioners: asked numerous questions related to the report, including topics related to financial feasibility and assumptions, the ability to work with incumbent service providers, the use of Scott County's existing fiber backbone, etc. The commissioners concluded that although numerous questions still need to be asked and answered, overall support is there for the need to have a community -wide fiber network sys- tem in Prior Lake to address current and future economic development goals. Morris: stated how important it is to move this effort forward to the next step in 2012 by funding the second engineering phase; time is of the essence before winter sets in to inhibit field work. Lampland: affirmed the need for Prior Lake not to lose momentum, since he has seen other delays with cities result in no future action to implement a fiber network. He also stated that the EDA will need to fund further consulting services from Lookout Point since his contract has ended with the completion of the sub- committee's report. Hedberg: stated that it is important for the other three non -EDA City Council members to hear the sub- committee's report, and to have an equal opportunity to ask questions. That meeting is set up for July23. 7. OTHER BUSINESS A. Draft August, 2012 Agenda was reviewed by the commissioners; they confirmed that all members were available on the third Monday, August 20. ADJOURNMENT MOTION BY MYSER, SECOND BY MORRIS TO ADJOURN THE MEETING. With all in favor, the meeting ad- journed at 8:30 p.m. C� Frank Boyles, Executive Director 4