HomeMy WebLinkAbout03 17 2014 EDA Report 7A
4646 Dakota Street SE
Prior Lake, MN 55372
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: March 17, 2014
AGENDA #: 7A
PREPARED BY: Dan Rogness, Community & Economic Development Director
AGENDA ITEM: TECHNOLOGY VILLAGE PHASE II FUNDING REQUEST
DISCUSSION:
Introduction
The purpose of this agenda item is to review a request from the Technology Village
Board of Directors (BOD) to increase funding for Phase II in order to support the
expansion of a Phase I business.
History
One of the current Technology Village program participants, Innovative Computer
Professionals (ICP), is considering relocating their home office from Burnsville to
Prior Lake. ICP is a Veteran Owned Small Business providing custom software and
database development, engineering, and technical project management services.
Although ICP was an established company, they were accepted into the Technology
Village program because they began using its Veteran Business status to focus
some business opportunities on government contracts. ICP leased one Technology
Village office for an employee focused on securing those government contracts.
Current Circumstances
ICP is now interested in moving approximately ten employees, with an average an-
nual wage of $80,000 to $100,000 from their current location in Burnsville to Prior
Lake. The company is considering an office location in the Village Commerce or
Fountain Hills Office Building. ICP has approached the Technology Village Board
of Directors (BOD) and city staff to discuss whether or not this expansion would
allow them to continue as a Technology Village program participant, or to explore
any different forms of financial assistance that may be available. As an existing and
expanding Technology Village program participant, the BOD chose to obligate its
However,
that rental subsidy to ICP leaves no remaining funds to assist new program partici-
pants in 2014.
Conclusion
Technology Village BOD is requesting a 2014 budget amendment that would fully
fund ICP and up to three other planned businesses in Phase II, as supported in the
business plan. The proposed budget amendment equates to $12,000 that would
support ICP with ten employees for nine months in 2014, more specifically shown
as follows:
1. 150 square feet of office space x 10 employees = 1,500 sq. ft. maximum.
2. 1,500 square feet x $12 subsidy per sq. ft. / 12 months = $1,500 per month.
3. $1,500 x 9 months leased during 2014 = $13,500
4. $13,500 total subsidy to be funded by $12,000 new EDA allocation + $1,500
existing Technology Village 2014 budget.
By allowing ICP to expand in Prior Lake and allowing other new businesses to
start/grow, advantages include the following:
ICP would likely move out of their Technology Village office which would open
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that office space up for an additional program participant.
The EDA has previously identified a desire to see existing residents, who are
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company presidents and CEOs, rel
Prior Lake resident.
The goal of the Technology Village program is to attract and grow businesses in
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this community which will ultimately
employment opportunities. ICP would likely not be considering a relocation of
their corporate office to Prior Lake if it were not for this incubator program.
A lease of approximately 3,000 SF of privately-owned office space would help
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address existing vacancy rates in the community.
The city would assist in the creation of well-paying technology jobs, which is an
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identified target industry for Prior Lake.
ISSUES:
The EDA has two options for amending its budget to support this request:
1. Reduce the Professional Services item from $40,000 to $28,000, and in-
crease Technology Village from $26,500 to $38,500, which would not require
City Council approval.
2. Use EDA reserve funds (approx.. $65,000 balance) to increase the Technol-
ogy Village budget from $26,500 to $38,500, which would require City Coun-
cil approval.
FINANCIAL
budget amendment will increase rent subsidies from $10,000 to
IMPACT:
$22,000 within the Technology Village budget.
ALTERNATIVES:
1. Approve a resolution amending the EDA budget by transferring $12,000 from
Professional Services to Technology Village.
2. Approve a resolution amending the EDA budget by requesting to the City
Council an increase of $12,000 from EDA Reserves to Technology Village.
3. Deny an EDA budget amendment.
4. Table action, and request further information from staff.
RECOMMENDED
Staff recommends Alternative #1
MOTION:
ATTACHMENTS:
Memorandum dated 1/21/14 from Dan Rogness, Community and Economic Devel-
opment Director and Technology Village Executive Director
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