HomeMy WebLinkAbout02 18 2014 EDA Report 6B Attach1
“A Wonderful Place to Live, Work and Play for a Lifetime”
PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY (EDA)
BUSINESS PLAN – 2014 DRAFT #2
February 18, 2014
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 natural 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 2014 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 the
city needs an active and entrepreneurial entity such as the EDA to work directly with new and existing
businesses to fulfill Prior Lake’s vision as a wonderful place to live, work and play. This business plan
develops a framework for the EDA, which will be reviewed and approved by the EDA and City Council
annually.
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Achievement Goals – Jobs, Businesses, Values and Taxes
Considering the city’s strengths and challenges, the following goals are established for Prior Lake
related to jobs, businesses and taxable market value increases. The “Base” figures are estimates
based on the past 10-year history of commercial and industrial development. These base projections
assume jobs and businesses will be added due to normal market demand. “New” goals show an
increase in jobs, new businesses and market value, over and above the historical average. These new
goals assume an increased public investment by the EDA and City Council (i.e., public financing
assistance, business incubation, public land sales). With increased public investment in commercial
and industrial development, the new goals show an estimated increase of 50% above the Base
figures. All figures are considered to be conservative for estimating economic growth in Prior Lake.
5-Year Base Jobs Plus Base Plus New Base Value Plus
Time Created New Jobs Businesses Businesses C/I Increase New Value
Periods (Historical) Created Added Added (Historical) Increase
2001-10
235 XXX 10 XXX $17 M XXX
5-Year Avg.
2011-2015 250 125 10 5 $20 M $10 M
2016-2020 350 175 15 8 $25 M $12 M
2021-2025 300 150 12 6 $22 M $11 M
2026-2030 300 150 13 6 $23 M $12 M
Total 2011+ 1,200 600 50 25 $90 M $45 M
Assumptions: 1. 2000-10 ‘Base’ information is based on city building permit activity reports for new commercial and
industrial construction, not including public facilities and multi-family rental housing
2. Annual increases in base jobs, businesses and value continue trends from 2000-2010
3. Estimated increases due to Economic Development (‘New’) uses the Base times 1.5
The following table shows progress to achieve job, business and C/I market value goals during three
years, including 2011, 2012 and 2013.
5-Year Base Jobs Plus Base Plus New Base Value Plus
Time Created New Jobs Businesses Businesses C/I Increase New Value
Periods (Historical) Created Added Added (Historical) Increase
2001-10
235 XXX 10 XXX $17 M XXX
5-Year Avg.
2011-2013 150 75 6 1 $12 M $6 M
3-Yr. Goal
2011-2013 190 95 3 1 $5 M $1 M
Achieved
Notes: 1. Job creation data is provided by MN DEED, QCEW Reports, Quarter 2, for 2011, 2012 and 2013; data
is received from Unemployment Insurance reports by all businesses.
2. Business data is provided by MN DEED, QCEW Reports, Quarter 2, for 2011, 2012 and 2013.
3. Value data is provided by Prior Lake building permit reports for 2011, 2012 and 2013.
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5-Year Time Base Taxes Plus Total City Portion
Periods Created E.D. Taxes Estimated 30%
(Historical) Created New Taxes Estimate
2000-10 Avg. x
$85 K XXX $85 K $25.5 K
5 Yrs.
2011-2015 $100 K $50 K $150 K $45.0 K
2016-2020 $130 K $65 K $195 K $58.5 K
2021-2025 $120 K $60 K $180 K $54.0 K
2026-2030 $120 K $60 K $180 K $54.0 K
Total 2011+ $470 K $235 K $705 K $211.5 K
Assumptions: 1. Total city/county/school taxes is estimated using $3.50 per
square foot of building space
2014 Implementation Plan
The following actions shall be accomplished during 2014 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.
1. Broadband (Community Fiber Network). The EDA supported the City entering into a joint
powers agreement with Scott County and Integra to complete a fiber build-out to include CH
21 from CH 42 to TH 13, and CH 21 from TH 13 to CH 27, with laterals to Welcome, Deerfield
and Waterfront Passage industrial areas and to the Commerce Avenue commercial area. The
EDA will continue to support further expansion of this system throughout Prior Lake, and to
support Integra’s efforts to connect businesses to the new high-speed fiber system.
Accomplishment: Prior Lake will be more competitive economically by connecting
existing/future businesses and residents to high-speed fiber network.
Timeline: Complete new fiber connections, and market high-speed network to existing
businesses and new business prospects during 2014.
Budget: Expended in 2013.
Metrics: New business/job growth and retention, and tax base increase on C/I property,
including an estimated 8 new businesses and 275 new jobs by 2020.
2. Technology Village (Business Incubator). The EDA completed Phase I of the business plan
for Technology Village to build out 2,000 square feet of leasable space in City Hall during 2013.
This space became fully occupied in 2013 with six technology businesses. Phase II has been
supported by the EDA to include private office space throughout Prior Lake for more
businesses to participate.
Accomplishment: Business incubator space will strengthen Prior Lake as a place to start
and grow small software/technology businesses.
Timeline: The EDA and Technology Village Board of Directors will continue to support full
occupancy of space in City Hall, expand the Phase II program to vacant office space, and to
assist all businesses through referral and mentoring by 12/31/14.
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Budget: $26,500 in EDA budget for 2014.
Metrics: Sustained businesses/jobs at City Hall (6 businesses / 9 jobs), and growth within
other commercial buildings (3 businesses / 4 jobs).
3. Targeted Areas for Development. The EDA will help facilitate commercial development in
three targeted areas around highway intersections, including: (a) CH 21 / TH 13; (b) CH 21 /
CH 42; and (c) CH 42 / TH 13. It will also help facilitate full development of the 50-acre
Deerfield Business Park (2/3 being vacant) and the 40-acre Welcome Industrial Park (1/10
being vacant). The EDA will help establish an expedited platting and permitting process to
assist in the timely development of vacant property in these key areas. Redevelopment
opportunities also exist in certain locations, such as the Digger’s site and downtown Prior
Lake.
Accomplishment: The City will evaluate opportunities to expedite development of vacant
property within targeted locations in order to assist business opportunities.
Timeline: Complete a process to identify target areas and corresponding levels of public
support by 9/30/14.
Budget: Unknown.
Metrics: New business/job growth and retention, and tax base increase on the improved
industrial property, including an estimated 8 new businesses and 275 new jobs by 2020.
4. City Codes & Fees. The EDA completed a comprehensive analysis of city codes and fees in
light of making Prior Lake more “business friendly” with assistance from the EDAC and
Planning Commission. Amendments were made to the Industrial Use District as a start to
changes to city regulatory standards.
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 continue to evaluate the Business Park and Commercial Use
District and make preliminary recommendations to the EDA by 7/31/14.
Budget: Unknown.
Metrics: New business/job growth based on more business friendly codes and the
corresponding permit review process, all in support of the business and job figures
identified in 1-3 shown above.
5. Marketing of Prior Lake. The EDA will utilize the EDAC’s help to complete a full update of
marketing materials for Prior Lake in terms of facilitating economic development. The EDAC
will provide a recommendation to the EDA, including but not limited to, folders, brochures,
website and advertisement. In addition, the City of Prior Lake will participate in discussions
with other public/private partners to explore a regional entertainment and recreation
marketing effort being spearheaded by Mystic Lake Hotel & Casino.
Accomplishment: The City will complete new marketing materials related to economic
development and participate in a regional marketing effort with SMSC, Canterbury, Valley
Fair, Chambers, First Stop Shop, Shakopee, Savage and Scott County.
Timeline: Complete the city marketing materials by 5/31/14.
Budget: $2,000+.
Metrics: New business/job growth and retention, and tax base increase on C/I property,
including an estimated 8 new businesses and 275 new jobs by 2020.
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6. Building a Customer Centric City/EDA Culture. The Carlson School of Business conducted a
study of all seven cities in Scott County to determine the degree to which the processes,
regulations, attitudes embraced by the cities were in line with economic development. The
results were mixed. The approval process in many communities were long; no one person in
each organization was responsible for development from start to finish; and some attitudes
were regulatory versus problem solving in nature. The First Stop Shop has contracted with
the Carlson School of Business to conduct three workshops with an objective to simplify and
improve consistency across all cities for high-quality customer service.
Accomplishment: The City and EDA will participate in the workshops as scheduled.
Timeline: Complete the participation process and follow-up actions by 12/31/14.
Budget: Unsure.
Metrics: Improved customer service as demonstrated by customer comments and
supplemental data gathering.
Unique Challenges for Prior Lake
1.Historical Investments in Commercial/Industrial Development. The city has invested much 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/I) property is below average. For example, Prior Lake’s
percent of C/I market value showed a small increase from 4.36% in 2002 to 4.84% in 2011.
This compares to an increase in Savage from 9.85% to 15.07% during that same time period.
2.Direct Access to Major Principal Arterial Transportation Systems. Prior Lake’s location outside
of the metro’s major highway system results in limited access to Interstate, US and State
Highways. Businesses look elsewhere when highway access is important. Important
improvements have occurred recently on County Highway 21 north and east, resulting in
much better access to and from Prior Lake. In addition, rail service is absent in Prior Lake, and
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there is limited high-speed fiber network throughout the city to help compensate for its lack
of highway and rail infrastructure.
3.Pad-Ready Commercial/Industrial Sites. Prior Lake has a healthy 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%).
4.Strong Corporate Business Identity 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.
5.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.
Summary of Funding Needs and Resources
Budget Premise: The following key premises are accepted by the EDA for future budgeting:
Support one-half of the Community & Economic Development Director position.
Support one-fourth of the Community Development Specialist position.
Provide other necessary operational expense support (e.g., legal, communications, training).
Utilize professional services to move certain initiatives forward closer to implementation.
Maintain a reserve balance allowing the EDA to be entrepreneurial in assisting C/I growth.
Economic Development Resources. The EDA has evaluated funding resources that are available and
necessary to assist businesses and help it achieve economic development objectives. Example
resources include tax increment financing, revolving loan funds, and the EDA budget. The EDA will
use current resources shown below to assist businesses, and it has established a more permanent
funding source for EDA operations starting in 2013.
2014 EDA Special Revenue Fund Budget $ 189,170
Business Revolving Loan Fund (Federal) $ 112,500
Business Revolving Loan Fund (State) $ 87,500
TIF District 1-1 Excess Increment $ 200,000
TOTAL $ 589,170
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2014 EDA Budget (Approved):
TOTAL EXPENSES = $316,170 ($278,450 in 2013)
General Expenses = $189,170 ($151,450 in 2013)
o
Staff salary/benefits @ 0.75 FTE ($90,670);
Commissioner per diem ($3,000);
Professional services ($40,000) for planning and/or assistance;
Legal/training/misc. ($9,000);
SAC deferral loans ($20,000); and
Business incubator operations ($26,500).
Special Project Expenses = $127,000
o
Redevelopment project assistance ($75,000); and
Revolving loan fund assistance ($50,000) & expenses ($2,000).
TOTAL REVENUE = $322,065
General Revenue = $197,065
o
$150,000 EDA tax levy + $7,185 incubator leases + $2,000 revolving loan
admin. + $3,000 SAC loan payments + $280 interest earnings + $34,600
General Fund transfers
Special Project Revenue = $125,000
o
$75,000 TIF 1-1 + $50,000 revolving loans
2015+ Future Projected EDA Budgets:
TOTAL EXPENSES = $317,500
General Expenses = $190,500
o
Staff salary/benefits ($92,500);
Commissioner per diem ($3,000);
Professional services ($40,000);
Legal/training/misc. ($10,000);
SAC deferral loans ($20,000); and
Business incubator operations ($25,000).
Special Project Expenses = $127,000
o
Redevelopment project assistance ($75,000); and
Revolving loan fund assistance ($50,000) & expenses ($2,000).
TOTAL REVENUE = $319,000
General Revenue = $165,000
o
$175,000 EDA tax levy + $7,500 incubator leases + $2,000 revolving loan
administration + $5,000 SAC loan repayments + $500 interest
Special Project Revenue = $129,000
o
$75,000 TIF 1-1 + $50,000 revolving loans + $4,000 loan repayments
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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 2013. City staff has estimated the number of
total employees that work for the Shakopee Mdewakanton Sioux Community (SMSC).
Industry Employees Percent SMSC Est.
Construction 410 5.0% 25
Trade, Transportation and Utilities 480 5.9% 50
Information 64 0.8%
Financial Activities 322 3.9% 25
Professional and Business Services 432 5.3% 50
Education and Health Services 1,153 14.1% 25
Leisure and Hospitality 3,704 45.4% 3,500
Other Services 500 6.1% 325
Public Administration 965 11.8%
TOTAL EMPLOYEES 8,163 100% 4,000
Industry Establishments Percent
Construction 95 17.1%
Trade, Transportation and Utilities 90 16.2%
Information 10 1.2%
Financial Activities 72 12.9%
Professional and Business Services 123 22.1%
Education and Health Services 60 10.8%
Leisure and Hospitality 30 5.4%
Other Services 54 9.7%
Public Administration 4 0.7%
TOTAL BUSINESS ESTABLISHMENTS 557 100%
Notes: Data is provided by MN DEED, QCEW Reports, Quarter 2, for 2013; data is received from
Unemployment Insurance reports by all businesses.
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 metrics is being utilized for all city
operations in Prior Lake beginning in 2012, and therefore, metrics will be incorporated into the EDA
Business Plan. To begin this process, the following key economic development objectives are being
identified and prioritized one through five:
1.Assist in the creation of desirable 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;
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3.Provide the necessary support mechanisms to retain and aid 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 Place to Live, Work and Play for a Lifetime.
In order to measure progress toward achieving these objectives, the following metrics will be used for
measurement purposes; all measures will be done annually:
Track building permits issued for commercial/industrial projects; determine business and job
growth that may tie to each permit.
Track residential permits and remaining lot inventory.
Track lease inventory of available commercial/industrial building space; determine business
and job growth that may tie to newly leased space.
Track business membership with the local Chamber of Commerce in order to assess additional
business and job growth.
Track change in commercial/industrial market value using County data.
Track the number and acreage of pad-ready commercial/industrial sites.
Track zoning permit approval process associated with commercial/industrial projects.
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.Encourage 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
Integra.
3.Work in partnership with major property owners in the targeted areas to implement
an expedited platting/permitting process for new commercial and industrial
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 sites 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.Complete all supporting infrastructure improvements that results in over 100 acres
being developed as commercial and business park uses.
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4.Develop plans for the expansion of commercial and industrial development in the
Southwest annexation area of Spring Lake Township.
5.Achieve key redevelopment objectives within the city related to the downtown area
and other priority redevelopment sites.
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