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HomeMy WebLinkAboutDraft MinutesO � PRlq� U txy JNNESO (DRAFT) Economic Development Authority Meeting Minutes June 3, 2013 1. CALL TO ORDER President Hedberg called the meeting to order at 4:10 p.m. Present were Hedberg, Keeney, Morris, and Choudek. Also present was EDA Executive Director Boyles, Community and Economic Development Director Rogness, Community De- velopment Specialist McCabe, and Treasurer Erickson. 2. APPROVAL OF AGENDA MOTION BY CHOUDEK, SECONDED BY KEENEY TO APPROVE THE AGENDA. VOTE: Ayes by Hedberg, Morris, Keeney and Choudek. The motion carried. 3. APPROVAL OF MEETING MINUTES MOTION BY KEENEY, SECONDED BY MORRIS TO APPROVE THE MINUTES OF MAY 20, 2013. VOTE: Ayes by Hedberg, Morris, Keeney and Choudek. The motion carried. 4. CONSENT AGENDA No items were identified. 5. REMOVED CONSENT AGENDA ITEMS No items were removed. 6. PUBLIC HEARING No public hearing was scheduled. 7. OLD BUSINESS No items were identified. 8. NEW BUSINESS A. Economic Development Financing Tools McCabe: summarized the need for the EDA to review and acknowledge a list of typical financing tools that cities use to assist development and redevelopment projects. Each one will be reviewed in more depth, including TIF, sewer /wa- ter fee deferral, conduit bonds, land sale write - downs, special assessments, building leases, business incubator, re- volving loan fund, industrial revenue bonds, tax abatement, DEED loans /grants, and Met Council loans /grants. Choudek: asked that the staffs review of each tool include current and past uses of them. Boyles: for TIF, the city now uses a pay -as- you -go structure rather than bonded debt by the city to be repaid from annual increments. He identified various economic development, downtown redevelopment and housing projects that received TIF assistance. Keeney: expressed concern with the need for jobs versus taxes when basing TIF on the project's increased tax base. Keeney: likes the sewer /water fee deferral program and hopes that an ongoing cash flow from loan repayments will help fund this into the future. Hedberg: stated that conduit bonding puts the city's credit rating at risk. Keeney: thinks that the city's core mission would direct support or non - support for conduit bonding. Hedberg: used NOREX as an example of a successful land sale write -down. Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com Keeney: felt that it was beneficial to use special assessments to grow economic development through infrastructure investments, including this tool being a tool that can better direct outcomes. Morris: reviewed how Technology Village will expand into existing buildings and services to home -based businesses as part of Phase 2, and into a new building as part of Phase 3. McCabe: reviewed other leased spaces the city controls in the downtown area. Hedberg: expressed new insights into the use of tax abatement, including restrictions and opportunities; this tool has not been used in Prior Lake. Morris: in summary, felt that these tools should be used to the greatest extent possible. Keeney: summarized three categories of these financing tools, including (1) cash subsidy to the business in exchange for something beneficial to the community; (2) use of control mechanisms through assessments and bonding; and (3) outside grants and loans. Choudek: feels that the EDA needs to know the extent of benefits achieved as a result of public financing, and the need for some type of grid showing how each one best fits circumstances; she stated a basic question, "incentives used for what ? ". Hedberg: likes Keeney's three categories, but also stated a question, "who ultimately pays ?" Keeney: further asks, "and where does the money go ? ", including the need to measure benefits; he also expressed a desire to stay within a shorter term when providing some direct assistance, such as five years, and to report annually on activity and results. Boyles: discussed how he hears and sees how past applicants for financing assistance have walked away disap- pointed, and how important it is for the EDA and City Council to be supportive to those worthy of the city's support. Hedberg: concluded by saying how there has been a nickel- and - diming mentality at the city that should not happen anymore; the city should be picky about its support, and clearly articulate what it supports. For example, the city could have a 5 -box checklist to make it easy to identify its factors for support. Finally, the city could pursue more executives that live in Prior Lake. B. Business Subsidies Policy. McCabe: expressed staffs desire to amend the current Business Subsidies Policy to more closely match the require- ments in state statutes; for example, statutes define a subsidy as being $150,000 or greater compared to the city's policy of $25,000 or more. Hedberg: suggested the EDA consider viewing the subsidy policy as a state requirement, while the city could have its own policy on all economic development incentives; the subsidy policy would be necessary only to meet state reporting requirements. Choudek: asked that the city consider looking a fees fairly when evaluating them for each type of financing assistance; currently, a TIF application is $12,000 compared to other much smaller fees. Hedberg: asked staff to return with an amended Business Subsidies Policy based on EDA discussion. 9. OTHER BUSINESS The next regular meeting on June 17 has a conflict due to a joint meeting scheduled to review preliminary findings by WSB for the County Road 42 Study from 4:30 -6:00 PM that day. Those invited include the City Council, Planning Commission and EDA. The commissioners agreed to meet at 6:00 p.m. for its regular meeting. 10. ADJOURNMENT MOTION BY KEENEY, SECONDED BY MORRIS TO ADJOURN THE MEETING. With all in favor, the meeting adjourned at 6:15 p.m. VOTE: Ayes by Hedberg, Morris, Keeney and Choudek. The motion carried. Frank Boyles, Executive Director