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HomeMy WebLinkAbout10 21 2013 EDA Report 4A attach 1 CPL ITY OF RIOR AKE BR&EP USINESS ETENTION XPANSION ROGRAM SR UMMARY EPORT PB: REPARED Y CPL ITY OF RIOR AKE EDAC CONOMIC EVELOPMENT DVISORY OMMITTEE PF: REPARED OR CPL ITY OF RIOR AKE EDA CONOMIC EVELOPMENT UTHORITY O14,2013 CTOBER 4646DSSE AKOTA TREET PL,MN55372 RIOR AKE 952-447-9813 drogness@cityofpriorlake.com www.cityofpriorlake.com ES XECUTIVE UMMARY The City of Prior Lake Economic Development Advisory Committee (EDAC) has completed a Business Retention and Expansion (BR&E) survey program for the primary Industrial and Business Park areas of the community. As part of its mission, the EDAC conducts BR&E visits with local company officials. BR&E visits are an economic development tool used to recognize the importance of existing business in the community. The EDAC and City of Prior Lake understand the success and growth of existing businesses is extremely important for the economic vitality of the community. While attracting business from outside Prior Lake and encouraging new business start-ups are important priorities of the City Council, EDA and EDAC, studies have shown that up to 80 percent of net new job growth comes from existing businesses. Through BR&E visits, and additional conversations with business leaders at events like the Business and Industry Forum, the EDAC is able to identify challenges, opportunities or barriers to the growth of businesses in our community. The EDAC uses the BR&E surveys as a tool to gather data which is used by the committee to provide information and make policy recommendations to the EDA. Another benefit of the surveys is they provide opportunities for EDAC and city staff members to follow-up with expansion and development assistance or respond to concerns of local business leaders they may otherwise not be aware of. Deerfield Business Park, Waterfront Passage, and Welcome Avenue Industrial Park as the primary target area for BR&E surveys. The EDAC compiled a list of approximately forty-five businesses within the target area and established a goal to contact all businesses on the list and provide each company with an opportunity to complete the survey. The EDAC was successful in contacting nearly every business in the target area. Twenty-three businesses chose to complete the surveys with a total of twenty-seven businesses in the community represented. H ISTORY In 2012, the EDAC identified the target area for BR&E surveys, developed their own questionnaire and began completing the surveys. In early 2013, EDAC members reviewed new BR&E reporting forms developed by GREATER MSP which were recommended by the Scott County Association for Leadership and Efficiency (SCALE). GREATER MSP is a non-profit Minneapolis / St. Paul regional economic development partnership dedicated to providing public and private sector leadership, coordination and engagement to grow the economy of the 16-County Minneapolis Saint Paul region. With its economic development partners from throughout the region, GREATER MSP is advancing a coordinated regional a coordinated regional business retention, expansion, and recruitment program to stimulate capital investment and job creation in the region. The EDAC endorsed the new survey forms; however, committee members still desired to have Prior Lake specific questions included in the survey. The EDAC determined that the specific Prior Lake questions asked on the original survey would still be requested, in addition to the questions on the revised surveys. Instead of each individual community or organization conducting separate BR&E surveys, the new coordinated and organized approach developed by GREATER MSP will result in the sharing of information and aggregate survey results throughout the entire Minneapolis / St. Paul area. Surveys are currently being completed by City and County officials, Department of Employment and Economic Development (DEED) workforce and business development representatives, MNSCU custom training, utility companies and association trade organizations throughout the entire metropolitan region. The information collected by GREATER MSP will then be combined with survey information collected by regional chamber organizations through the Minnesota Chamber of Commerce Grow Minnesota! Program to stimulate capital investment and job creation in the region. O BJECTIVES Visiting current businesses and understanding their concerns is only one part of the BR&E process. The EDAC also uses the BR&E program to build awareness of existing projects that may impact businesses, recent changes to City ordinances or policies that the business may not be aware of and to provide information related to available incentives or other programs that may assist a There are many objectives of the Prior Lake BR&E Program, including: To demonstrate support for local businesses and appreciation for the contributions these To help businesses solve their unique challenges. To assist local businesses in gaining awareness of available resources. To identify opportunities where the City of Prior Lake can support local businesses growth and expansion. To establish and maintain ongoing communication between the City and the local business community. To develop a clear understanding of the businesss view To identify any obstacles which may discourage a business from continuing operations or expanding in Prior Lake. KI EY NFORMATION Below are a few examples of community strengths and challenges identified on the surveys from the twenty-seven companies interviewed. Strengths and successes reported: 84% of responders indicated that sales were either stable or increased over the past 12 months. None of the existing businesses reported a change in ownership over the past 12 months. No businesses indicated a decline in employment over the last year. None of the businesses felt their employment numbers would decrease over the next year. Many company representatives expressed a desire to grow their business. 85% of responders indicated the labor supply is adequate in the community. 70% of the responders stated their overall opinion of Prior Lake as a place to do business was good or very good; 25% ranked Prior Lake as fair. Many businesses commented that the increased population in Prior Lake was good for business. Business leaders ranked the local K-12 school district very high. Recreational opportunities were ranked very high in Prior Lake. Challenges or areas for improvement: A need for additional building space and/or land options in Prior Lake was noted for businesses looking to expand. Many responders commented on high local property tax rates and City fees. 21% of responders did not see an opportunity for growth in Prior Lake. A concern about signage restrictions was expressed by a few of the businesses. The lack of recent commercial growth is an area for improvement identified by a few businesses. A need for better communication from the City was identified. A feeling the City has not been fair in providing incentives and enforcing zoning ordinance requirements was expressed. There was a desire to feel more support from the community (both from City Hall and residents of Prior Lake). P ARTNERSHIP The Prior Lake BR&E program is included in an overall effort organized by GREATER MSP. The BR&E visits are completed locally by City of Prior Lake Economic Development Advisory Committee volunteers. EDAC members donate their time to contact business representatives, schedule meetings, complete the surveys and compile results. BV USINESS ISITS The EDAC conducted a total of twenty-three BR&E visits which represented contact with twenty- seven individual Prior Lake businesses; however, the original Prior Lake EDAC survey questionnaire was amended during the interview process to mirror the GREATER MSP recommended survey form. Because the EDAC used two separate survey forms during the interview process, not all businesses were asked the exact same questions. In addition, some business representatives chose to only complete a portion of the survey. The full survey packet included three separate survey forms; 1) a general reporting form; 2) a local business climate community ranking form; and 3) a Prior Lake specific questionnaire developed by the EDAC. The general reporting form requested: i) general company/contact information; ii) business details, such as business sector and company ownership; iii) local employment and workforce information, such as employment numbers and training needs; iv) primary market information; local, statewide, national or international; and v) a future facility or equipment investment plan. The community ranking form asked business to rank (1-5) the local business climate related to: i) education and training; ii) transportation/location; iii) quality of life; iv) local access to capital; v) local government; and vi) utilities. The Prior Lake specific questionnaire asked businesses to share their rankings of Prior Lake as a place to do business. BV USINESSES ISITED Twenty-three surveys were completed representing twenty-seven separate businesses during the BR&E interview process. The EDAC appreciates the willingness of local business leaders to give their time to help the City of Prior Lake understand its strengths and challenges. Although the individual survey responses will be kept confidential, the EDAC felt it was important to acknowledge the participation of the following businesses. Above All Distribution Metro Cabinets Co. Inc. Above All Hardwood Floors & Carpet Minnesota Valley Millwork American Glass & Mirror NOREX Inc. Anderson Bus Co. OnSite Engineering & Forensic Services Inc. Boevaag Plumbing Inc. Paws & Pals Pet Resort Cifelli's Salon & Spa Performance Construction Confidential Prior Lake Mini-Storage Diversified Snack Distribution Schoenberger Drywall Inc. Dorrel-Torsch Sales The Cutting Edge Moulding Co. EM Products Phillips & Temro The Laker Store Insulfoam Technical Center The Pointe Grill & Bar J. Hage Construction Co. Inc. Triple Play Sports Key Land Homes Zenith Exteriors Inc. Metro Air Inc. PLBR&ESQR RIOR AKE URVEY UESTIONS AND ESPONSES Below is a list of BR&E survey questions and the responses provided by the local company officials. The survey questionnaire was amended during the interview process so not all businesses were asked the exact same questions during each interview and some businesses chose not to answer all questions on the survey. General Report Form Q1: What is the primary business sector at this location? imminent? This question was asked during twelve of the completed BR&E visits and only one business, which is a new business in Prior Lake, identified a change in ownership. Q 3: Is this facility owned or leased? Q 4: Has this company introduced new products or services during the last year? This question was asked during twelve of the completed BR&E visits. Seven businesses responded that they have introduced new products or services during the past year, five businesses responded they have not introduced new products or services. Among the businesses that expanded products or services, four companies described additional products and three businesses identified additional services provided by their business. Q 5: Over the past year, have total company sales: increased, decreased, been relatively stable, or fluctuated widely? Q 6: What is the total number of full-time equivalent (FTE) employees at this facility? Business owners identified a total of 249 FTE employees working at their businesses with a high of 50 FTE and a low of 0 FTE. The mean (average) number of employees, based on a total of 27 businesses, is 10.8 FTE per business and the median is 8 FTE. Q 7: Have the number of jobs at this facility changed in the last year? If so, have they: increased, decreased, or stayed the same? This question was asked during twelve of the completed BR&E visits. Six businesses indicated the number of jobs has increased over the past year, six businesses indicated the number of jobs has stayed the same and zero businesses identified a decrease in employment over the past year. Q 8: In the next year, do you expect the number of jobs at this facility to: increase, decrease, be relatively stable, or unsure? None of the businesses surveyed stated they plan to decrease employment over the next twelve months. For those companies that responded they plan to increase employment, follow up questions related to the types of jobs they expect to hire and the anticipated need to train employees within the next twelve months were asked. Minnesota, or United States? Q 10: Does this company export? This question was asked on twelve of the BR&E surveys and two businesses indicated they export. One business exported to Canada and one businesses exported to multiple international locations. Q 11: Does this company plan to (check all that apply): invest in new facilities, make major equipment purchases, or renovate/expand current facilities? Six companies indicated they planned to make major investments over the next twelve months. Four of the six companies stated they plan to make major equipment purchases. Three of the six stated they plan to renovate or expand their current facility; one plans to invest in a new facility and one stated they plan to expand their offerings. Q 12: Does this company require follow up? If yes, what organization(s) should assist: city, chamber, college, state, workforce, or other? The EDAC identified four businesses which required immediate follow up from the City of Prior Lake and/or the Prior Lake Chamber. City and Chamber staff have followed up with the four identified businesses to discuss issues identified during the survey. Follow up discussion primarily related to additional space needs and Chamber involvement. Community Ranking Form The survey included an optional questionnaire which asked the businesses to rank the Prior Lake business climate. Businesses were asked to rank the following features of the community on a scale of 1 to 5; 1 being least favorable for business, 3 being neutral and 5 as most favorable for business. Below are the results of the survey which were completed by eleven businesses. Note, this questionnaire was not available when the EDAC began completing the surveys, some businesses chose not to complete this optional questionnaire and some businesses only completed a portion of the rankings. # of Responses Average Education and Training K-12 9 4.1 Higher education 6 3.5 Customized Training Programs 5 3.2 Overall Workforce Quality 8 3.5 Transportation/Location Public Transportation 9 3.1 Highway Infrastructure 11 3.6 Air Service 6 2.5 Proximity to Suppliers 10 2.5 Quality of Life Recreational Opportunities 9 3.9 Cultural Opportunities 10 3.3 Crime Rate 9 3 Social Organizations and Networks 10 3 Housing Supply for Workforce 9 3 Local Access to Capital Lending by local financial institutions 9 2.4 Assistance from local governments and/or non-profits 8 2.25 Local Government Attitude towards business 10 2.4 Permitting/Zoning 9 2.22 Local Taxes 11 1.2 Local fees 9 1.7 Utilities Telecommunications/Broadband Service 9 2.6 Telecommunications/Broadband Rates 8 2.25 Electric Rates 10 2.7 Electric Reliability 10 3.3 Prior Lake as a Place to do Business The third section of the survey was specific to the City of Prior Lake as a place to do business. Q 1: What are the Characteristics of Prior Lake that appeal to you? The survey provided seven options for businesses to choose (as many as they wish) including: hometown feel, business environment, transportation, support of local community, workforce, local amenities, or other. Comments from the other category primarily inc home. Q 2: What were your primary expectations when your business moved to Prior Lake? The responses varied but many expected to run a successful business and proximity to home was also mentioned often. Q 3: Have those expectations been met, how so? Among the responses, fourteen businesses indicated their expectations have been met, 2 indicated their expectations have not been met and 3 either stated their expectations have somewhat been met or did not indicate whether or not they were met. Q 4: Do you see an opportunity for future growth in Prior Lake? Among the responses that indicated no opportunity for future growth, only one comment listed a reason why, which indicated they would move to a community with lower taxes and less restrictions. Q 5: Is the labor supply at this location adequate to fulfill your current and future needs? Seventeen of the twenty surveys which answered the question regarding labor supply indicated the labor supply at this location adequate to fulfill their current and future needs. Three businesses felt the labor supply was not adequate at this location. Among those that indicated a less desirable labor supply were businesses which employ workers with a specific skill set such as plumbers, welders or fabricators. Q 6: What is your overall opinion of Prior Lake as a place to do business: very good, good, fair, poor, or very poor?    Q 7: How has Prior Lake changed since you started your business here and has it affected your business? If so, in what way? Responses to question seven varied and included the following: Prior Lake has grown, business has grown. Infrastructure. Prior Lake has changed; no effect on business. Slower growth but is still growing. CR21 build-out is positive. Prior Lake has grown, no effect on business. Prior Lake has pushed for more business but has changed little. Prior Lake has almost doubled in size since we started in housing. The increased population has been very beneficial to our business. I have a retail store. When the decisions are made to buy from the internet, out of state or other cities, I am forced as well to go elsewhere to support my business. We have shortened our retail hours because we are going to other communities to build a relationship with them moving forward. We want, more than anything, to continue to grow with this community. Growth, no effect. No, business has been here three years; resident here since 2008. Continued to grow and develop. Added new roads. Economic downturn changed the construction of new buildings in Deerfield. I do not want to see zoning changed because of that. Not much. New construction has helped the City. The City is very hard to work with [e.g.] garage doors [in industrial districts]. No. No. Business has grown as the city grows. No. Q 8: What changes, if any, would make this location more appealing to your company? Among the responses, the EDAC received six comments related to lowering property taxes, five comments related to relaxing signage standards, four comments related to infrastructure improvements, two responses mentioned the need for new businesses or improvements to existing commercial areas, two mentioned providing incentives to businesses and one commented on the need for available buildings or land for expansion. Three businesses responded no changes are needed. Q 9: What can the City of Prior Lake do to help your business prosper and grow? Five responses mentioned less restrictions, three responses were related to attracting new businesses and three were related to better communication, two comments were shared for each of the following: lowering property taxes, loosening signage requirements and ensuring buildings and land were available for expansion. One comment was received for improved infrastructure and for providing incentives to businesses. Three businesses responded by saying the city cannot help their business prosper and grow.