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Home My WebLink About09 10 2018 EDA Agenda Packet FULL Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 4646 Dakota Street SE Prior Lake, MN 55372 PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY AGENDA Monday, September 10, 2018 – 4:00 p.m. Reports included with this agenda can be found in the Document Center at www.cityofpriorlake.com; please follow this file path: City of Prior Lake/Economic Development Authority/2018/September 10, 2018 1. CALL TO ORDER 2. APPROVAL OF AGENDA 3. APPROVAL OF MEETING MINUTES A. August 13, 2018 4. CONSENT AGENDA A. Development Update (08/31/2018) 5. REMOVED CONSENT AGENDA ITEMS 6. PRESENTATIONS A. None. 7. PUBLIC HEARINGS A. No Public Hearings Scheduled 8. OLD BUSINESS A. Development Assistance Request 9. NEW BUSINESS A. Resolution to Approve the Proposed 2019 EDA Tax Levy and Budget 10. OTHER BUSINESS A. Staff Updates a. Economic Development Website Update b. Commercial Development Update B. Commissioner Comments a. Downtown Redevelopment Discussion b. Ribbon Cutting / Grand Opening Event Attendance C. Construction Projects Business Impact Game Plan 11. ADJOURNMENT: 6:00 p.m. Those items on the EDA Agenda which are considered routine and non-controversial are included as part of the Consent Agenda. Unless the President or an EDA member specifically requests that an item be on the Consent Agenda be removed and considered separately, Items on the Consent Agenda are considered under one motion, second and a roll call vote. Any item removed from the Consent Agenda shall be placed on the EDA agenda under “Removed Consent Agenda Items” Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 4646 Dakota Street SE Prior Lake, MN 55372 Economic Development Authority Meeting Minutes August 13, 2018 1. CALL TO ORDER PRESIDENT CHROMY called the meeting to order at 4:00 p.m. Present were Chromy, Sheehan-Kerber, Braid, Briggs and Boucher-Hoese. Also present were Executive Director Boyles, Community Development Director McCabe, Planner Schwabe, Craig Patterson, Vice-President of Development at Krause Anderson, and Dan Stan- ley. 2. APPROVAL OF AGENDA MOTION BY CHROMY, SECONDED BY BRIGGS, TO APPROVE THE AGENDA AFTER MOVING ITEMS 9A AND 9B TO EARLIER IN THE AGENDA AND NEW ITEM 10D FOR A DULUTH AVE/TH 13 INTERSECTION IMPROVEMENT UPDATE. Ayes by Chromy, Sheehan-Kerber, Braid, Briggs, and Boucher-Hoese. The motion carried 5-0. 3. APPROVAL OF MEETING MINUTES A. July 9, 2018 MOTION BY BRIGGS, SECONDED BY SHEEHAN-KERBER, TO APPROVE THE JULY 9, 2018 MEETING MINUTES AS WRITTEN. Ayes by Chromy, Sheehan-Kerber, Braid, Briggs and Boucher-Hoese. The motion carried 5-0. 4. CONSENT AGENDA A. Development Update (07/31/2018) An overview of the residential and commercial building permit year to date totals were provided. BRIGGS shared that the average declared value in 2017 median Single-Family dwelling of $325K has in- creased to $355K for 2018 permits year to date. MCCABE explained that declared value when a builder builds a home only includes the construction costs, therefore the land value is not included. For commercial and residential projects, the applicant declares the value and the city’s building inspectors have a formula to verify or reestablish the declared value. For property tax purposes, the total value includes the land and buildings. B. EDA Revenue & Expenditure Report No discussion. MOTION BY BRIGGS, SECONDED BY BRAID, TO APPROVE THE CONSENT AGENDA. Ayes by Chromy, Braid, Briggs, Sheehan-Kerber and Boucher-Hoese. The motion carried 5-0. 5. REMOVED CONSENT AGENDA ITEMS None 6. PRESENTATIONS None 7. PUBLIC HEARING No Public Hearings 2 8. OLD BUSINESS A. Economic Development Website Update SCHWABE explained the progress made since the last meeting and shared that Staff communicated with five vendors and received 3 quotes for a stand-alone economic development website. Quotes ranged from $1,700-$3,700. SCHWABE reviewed the examples provided by the vendors. MOTION BY BRIGGS, SECONDED BY BRAID TO DIRECT STAFF TO ENGAGE IN A WEBSITE VENDOR OF THEIR SELECTION FOR THE DEVELOPMENT OF A CITY OF PRIOR LAKE ECONOMIC DEVELOP- MENT WEBSITE. Ayes by Chromy, Braid, Briggs, Sheehan-Kerber and Boucher-Hoese. The motion carried 5-0. B. Downtown Property Map MCCABE reviewed the Downtown Property Map to show the changes requested at the last EDA meeting. MOTION BY BRIGGS, SECONDED BY BOUCHER HOESE TO ACCEPT THE DOWNTOWN PROPERTY MAP AS PRESENTED. Ayes by Chromy, Braid, Briggs, Sheehan-Kerber and Boucher-Hoese. The motion carried 5-0. 9. NEW BUSINESS A. City of Prior Lake Void Analysis PATTERSON explained that a void study is a commonly used by real estate professionals and developers to determine what types of businesses are missing in a specific market. The study can provide insight into what type of businesses is not in Prior Lake; however, it cannot dictate how successful that business may be or bring the desired retailers to the table. BRIGGS questioned the effect of daytime traffic as it relates to development. PATTERSON explained that a majority of the traffic is leaving Prior Lake for the day and returning in the evening. The daytime population and traffic is important for retailers, including restaurants. He shared that most national retailers perform their own research and know what they are looking for. Discussion ensued related to gateway framing, renderings, connectivity, economic attraction tools, etc. EDA will continue discussions at a future meeting. B. Development Assistance Request MCCABE shared that Staff has received a request from Dan Stanley for financial assistance related to the con- struction of a retaining wall for a new 11,200 square-foot commercial project at 17098 Adelmann Street. Mr. Stanley feels that assistance, if provided, would help toward achieving a competitive market lease rate for his leasable space. STANLEY explained the topography of the property, including wetlands, and proposed building details. He shared that the retaining wall is his only option to address the site conditions. MCCABE explained that the applicant would be eligible for the SAC/WAC deferral program. STANLEY shared that they are hoping to participate in the SAC/WAC deferral program. BRIGGS stated that there are serious challenges with market rate leasing and that the taxable value for the pro- posed building will have a positive impact on our community. 3 Discussion ensued regarding permitting status, setting a precedence and financial assistance opportunities. BRAID shared that the EDA must utilize their limited funds in a thoughtful manner. MCCABE explained that Stanley will be requesting an extension to the Variance which was approved in 2017 for this project at the September 4, 2018 Planning Commission meeting. MOTION BY BRIGGS, SECONDED BY SHEEHAN KERBER TO CONTINUE DISCUSSION OF THIS ITEM AT THE SEPTEMBER 10, 2018 EDA MEETING. Ayes by Chromy, Braid, Briggs, Sheehan-Kerber and Boucher- Hoese. The motion carried 5-0. C. Credit River Township Annexation Request MCCABE explained the Annexation Request by the property owners of 6010 170th Street and the documents associated with the proposed annexation. He stated this property as a logical addition to the Welcome Ave- nue Industrial Park. MCCABE stated that while the City is not actively pursuing annexation of parcels adjacent to the Welcom Avenue Inudstrial Park, the City has now received two applications in recent months from property owners in this area requesting annexation. BRIGGS shared that he had conversations with the Chair of the Credit River Township regarding the City’s potential interest in the four parcels east of the Welcome Avenue area. The Credit River Township repre- sentative indicated they would not support an annexation in that area. BRIGGS questioned the statement in the documentation regarding the timing for the extension of utilities. MCCABE explained that the property owner can request utilities to be extended to their property; however, the City will not require utilities to be extended until the subject property is proposed to be developed. MOTION BY CHROMY, SECONDED BY BOUCHER-HOESE TO RECOMMEND CITY COUNCIL APPROVE THE AGREEMENT AND ANNEXATION REQUEST INCLUDING RECOMMENDED AMENDMENTS. Ayes by Chromy, Sheehan-Kerber, and Boucher-Hoese. The motion carried 3-0-2 with Briggs and Braid abstaining as the public hearing on the request, scheduled for August 20, 2018, has not been held. 10. OTHER BUSINESS A. Staff Updates MCCABE shared that he will be meeting with a developer for a senior living transitional/memory care facility west of Prior Lake Revival building. MCCABE stated that Prior Lake Revival is fully leased. MCCABE explained that Lakeside Eats & Treats (former Urbanhalo property) was appreciative for the assis- tance recently approved by the EDA for electrical work and they have entered into a new two-year least agreement with the City. MCCABE shared that the City Council will be reviewing a Concept Plan at the August 20, 2018 meeting for a residential use in the northwest corner of CSAH 42/CSAH 21. B. Commissioner Comments BRIGGS shared that he participated in the Business Investment Summit hosted by Greater MSP at Mystic Lake Center on August 9, 2018. The event was well attended by local officials as well as City and County staff across the metropolitan area and offered insight from panelists and guest speakers alike. 4 C. Construction Projects Business Impact Game Plan None D. Duluth Ave/TH 13 Intersection Improvement Update MCCABE shared that in the absence of the Communication Liaison, Jason Wedel sent out information re- garding the delay of the Duluth Ave/TH 13 project because of the bids exceeding the anticipated project costs. Concern was raised that not all parties were notified with that communication. Staff anticipates discussing the topic of communication distribution at a future EDA meeting. 11. ADJOURNMENT MOTION BY BRIGGS, SECONDED BY SHEEHAN-KERBER TO ADJOURN THE MEETING. With all in favor, the meeting adjourned at 6:20 p.m. Ayes by Chromy, Braid, Briggs, Sheehan-Kerber and Boucher-Hoese. The motion carried 5-0. ___________________________ Frank Boyles, Executive Director 4646 Dakota Street SE Prior Lake, MN 55372 ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT MEETING DATE: September 10, 2018 AGENDA #: 4A PREPARED BY: Casey McCabe, Community Development Director AGENDA ITEM: DEVELOPMENT UPDATE DISCUSSION: Introduction The purpose of this consent agenda item is to review the residential and com- mercial development update as of August 31, 2018. History EDA Commissioners requested an update of residential and commercial activity at each meeting. Conclusion The attached memorandum provides a summary of residential and commercial development in the City of Prior Lake. ALTERNATIVES: RECOMMENDED MOTION ATTACHMENT: 1. Motion and a second, under the consent agenda, to accept the development update. 2. Remove this item from the consent agenda for additional discussion. Alternative No. 1. 1. Development Update Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com Memo Date: September 5, 2018 To: City of Prior Lake Economic Development Authority From: Casey McCabe, Community Development Director Subject: Residential & Commercial Activity Update Below is an update of residential and commercial development in the City of Prior Lake as of August 31, 2018. Number of Permits Declared Value Number of Permits Declared Value Number of Permits % Increase / (% Decrease) Declared Value % Increase / (% Decrease) Single Family Dwellings 77 $26,851,890.00 55 $18,232,000.00 40.00 47.28 Townhouses (# units)47 $7,709,927.00 0 $0.00 4700.00 ### Multiple Units 0 $0.00 1 (68 units)$8,787,000.00 (100.00)### New Commercial Industrial & Commercial 1 $1,600,000.00 7 $9,066,500.00 (85.71)(82.35) Residential 610 $4,854,027.00 550 $2,995,400.00 10.91 62.05 Industrial & Commercial 20 $322,400.00 9 $710,500.00 122.22 (54.62) Mechanical 459 $0.00 339 $0.00 35.40 n/a Mechanical (SF & TH)496 $0.00 220 $0.00 125.45 n/a TOTALS 1710 $41,338,244.00 1125 $39,791,400.00 52.00 3.89 t Mechanical permits include but are not limited to furnaces, water heaters, softeners, and fireplaces. They are flat-rate permit fees. Increase / (Decrease)2018 Year to Date 2017 Year to Date New Residential Additions and Alterations tt Mechanical (SF & TH) permits include required plumbing, heating, sewer and water and fireplace permits for new single family residences They are flat-rate permit fees 4646 Dakota Street SE Prior Lake, MN 55372 ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT MEETING DATE: September 10, 2018 AGENDA #: 8A PREPARED BY: Casey McCabe, Community Development Director AGENDA ITEM: DEVELOPMENT ASSISTANCE REQUEST DISCUSSION: Introduction The City of Prior Lake received a request to assist with costs related to retaining wall construction or soil corrections for a new industrial project proposed at 17098 Adelmann Street SE. History Dan Stanley and Larry Raasch, on behalf of the property owner, SR Property De- velopment LLC, received a front yard setback variance on September 11, 2017 to allow for construction of an approximate 11,200 square foot building on a site lo- cated at 17098 Adelmann Street. Current Circumstance Mr. Stanley intends to construct and occupy most of the building but also lease a portion of the space to another business or businesses. He is finalizing plans to construct the building but is having difficulty keeping the lease rates reasonable for his future tenant(s) due to some site-specific costs. The property slopes down from Adelmann Street to a wetland located on the southern property line. Due to the existing grade and proposed site improve- ments, a significant retaining wall is needed to provide an adequate parking area. The property owner has indicated that the cost of the retaining wall skews the total construction cost which greatly impacts the developability of the site and reflects into the required lease rates. The applicant feels the cost of the retaining wall pushes the costs above the market lease rate making it hard to provide affordable warehouse/office space to our community. The EDA discussed this request for assistance during their August 13th meeting. EDA members understood the challenges of constructing a new building while maintaining affordable lease rates; however, there was concern over the prece- dent that may be set if the EDA were to assist with retaining wall costs. EDA members also expressed a desire to utilize their limited funds in a thoughtful man- ner. The EDA approved a motion to continue discussion of this item at their Sep- tember 10th meeting. In the past, the city of Proir Lake has assisted commercial and industrial projects through soil corrections. Following the EDA meeting, at the request of City staff, the property owner provided a soil correction estimate in the total amount of $37,131 ($24,888 in the building pad and $12,243 elsewhere on the lot). The EDA 2 ISSUES: may consider providing assistance for soil correction costs as opposed to retaining wall costs. Conclusion If the EDA feels it is appropriate, funds from the EDA Special Revenue Fund may be used to assist with this industrial development. These funds are available for use by the EDA to accomplish certain economic development initiatives, including: economic development and redevelopment loans and incentives; efforts to facili- tate commercial development and redevelopment; and enhancing the character of commercial areas. City staff has provided information to the property owner related to the SAC De- ferral Program which is expected to be utilized if the applicant moves forward with the project. The EDA may wish to discuss the relative merits of a grant versus a loan. A grant would not have to pay for the full costs of the retaining wall or soil corrections; a loan could pay for the full costs with an expectation that some repayment schedule could be fashioned as the property owner recovers costs through the lease over time. FINANCIAL IMPACT: Potential costs related to financial assistance with retaining wall construction costs would impact the EDA Special Revenue Fund balance. ALTERNATIVES: 1. Motion and second to provide financial assistance from the EDA Special Rev- enue Fund in an amount deemed appropriate by the EDA to assist with retain- ing wall construction costs at 17098 Adelmann Street SE. 2. Motion and second to provide financial assistance limited to the actual amount of soil correction costs for the building and retaining wall in an amount not to exceed $37,131. 3. Motion and second to decline assisting with soil correction or retaining wall construction costs at 17098 Adelmann Street SE. 4. Provide direction to staff and continue discussion at a future meeting. RECOMMENDED MOTION: ATTACHMENT: Alternative 2. 1. General Location Map 2. Proposed Site Plan Location Map 17098 Adelmann Street SE 4646 Dakota Street SE Prior Lake, MN 55372 ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT MEETING DATE: September 10, 2018 AGENDA #: 9A PREPARED BY: Casey McCabe, Community Development Director AGENDA ITEM: RESOLUTION TO APPROVE THE PROPOSED 2019 EDA TAX LEVY AND BUDGET DISCUSSION: Introduction The purpose of this agenda item is to consider approving a proposed 2019 EDA tax levy and budget. Staff has provided a resolution for approval. History The EDA’s 2018 budget was approved by the City Council last December to in- clude the following primary factors: 1. The budget included a special EDA tax levy of $140,000. 2. The budget included 50% personnel support for Community Development Director and Community Development Specialist [City Planner]. 3. The budget included $7,820 in expenditures and $7,820 in revenues for Technology Village. 4. $3,077 of EDA reserves was used to balance the budget. 5. The total 2018 EDA budget was $153,597. 6. The 2017 fiscal year ended with EDA reserves of $254,039, with some of these funds being allocated to a downtown redevelopment project. Current Circumstances City staff has proposed a draft 2019 budget for EDA review, which is summarized as follows: 1. The tax levy remains at $140,000. 2. Revenues of $7,820 are anticipated from Technology Village leases which will offset the proposed Technology Village expenses of $4,350. Technol- ogy Village expenses do not include a rent subsidies. 3. The use of EDA reserves are not proposed to balance the budget. 4. $20,000 is budgeted for Professional Services. 5. As of August 31, 2018, the EDA reserve balance was $552,877, including the general fund reserve allocation of $300,000. ISSUES: Staff would appreciate direction from the EDA related to the proposed 2019 budget. The 2018 budget included an allocation of $750 to the BEC for commu- nication purposes. Instead of creating a line item within the EDA budget, this funding was made available to the BEC from the EDA Professional Services Fund. City staff anticipates the same amount of funding would again be made available to the BEC in 2019 from the EDA Professional Services Fund. 2 FINANCIAL IMPACT: The approved 2019 EDA budget will be forwarded to the City Council for review and approval. ALTERNATIVES: 1. Motion and a second to approve a resolution approving the proposed 2019 EDA tax levy of $140,000 and budget of $150,227, or as further amended by the EDA. 2. Provide direction to staff and continue discussion at a future meeting. RECOMMENDED MOTION: Alternative #1. ATTACHMENT: 1. Proposed 2019 EDA budget Comments Revenues / Sources: Intergovernmental revenues 33010 Property Taxes 155,000$ 140,000$ 140,000$ 140,000$ EDA Tax Levy 33610 Grant Revenue - - Charges for Services 34760 Incubator Leases 10,000 8,500 7,820 7,820 85% of Expected Occupancy ($9,200) xxxxx Revolving Loan Administration - - - - Miscellaneous revenues 36210 Interest Earnings - 2,500 2,700 3,300 xxxxx SAC Loan Interest 500 - - - 36225 Unrealized Inv. Gain (Loss)- - - - Transfers from Other Funds xxxxx EDA Reserves - - - Total Revenues / Sources 165,500$ 151,000$ 150,520$ 151,120$ Expenditures / Uses: 46500 Economic Development 51XXX.XX Personnel 123,225$ 125,041$ 120,277$ 122,027$ 50% CD Director 50% Planner 52010.00 Office Supplies 250 250 250 - 53020.00 Legal Fees 2,500 2,500 2,500 2,500 53100.80 Professional Services 24,350 20,000 20,000 20,000 53210.00 Communications 250 250 250 100 53310.10 Training & Certification 1,200 1,000 500 - 53510.00 Legal Notices 500 500 250 - 54310.00 Dues & Subscriptions 750 750 750 500 54320.00 Miscellaneous 750 1,034 1,000 750 SUBTOTAL 153,775 151,325 145,777 145,877 46503 Technology Village Incubator 52010.00 Office Supplies 500 250 250 100 52400.10 Small Equipment - General - 500 500 1,000 53020.00 Legal Fees - 500 500 250 53210.00 Communications 5,000 2,000 2,000 750 54310.00 Dues & Subscriptions 2,500 1,000 1,000 750 54320.00 Miscellaneous 2,500 500 500 500 55520.00 Building & Structures - - - - 55560.00 Furniture & Fixtures 1,000 - - - 55570.00 General Equipment 1,000 - 1,250 xxx Business Assistance 3,000 2,500 1,820 1,000 xxx Rent Subsidies 12,150 2,250 - - SUBTOTAL 27,650 9,500 7,820 4,350 Total Expenditures / Uses 181,425$ 160,825$ 153,597$ 150,227$ - Use of Reserves (15,925) (9,825) (3,077) 893 ECONOMIC DEVELOPMENT AUTHORITY 2016 Budget 2017 Budget 2018 Budget 2020 Proposed Budget http://finance1/teams/EDA/Shared Documents/September 10, 2018/09 10 2018 EDA Report 9A_Attach1 : 2019 Proposed-8.14.17 CE 9/7/2018 RESOLUTION 18-01 EDA A RESOLUTION APPROVING THE PROPOSED 2019 ECONOMIC DEVELOPMENT AUTHORITY TAX LEVY AND BUDGET Motion By: Second By: WHEREAS, State Statute 469.107 subd. 1 provides that a city may, at the request of the Economic Development Authority, levy a tax in any year for the benefit of the authority in an amount not to exceed 0.01813 percent of taxable market value; and WHEREAS, The EDA proposes a 2019 tax levy for economic development purposes in the amount of $140,000; and WHEREAS, The EDA proposes a 2019 annual budget in the amount of $150,227. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE ECONOMIC DEVELOPMENT AUTHORITY OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The EDA requests that the Prior Lake City Council levy a special tax of $140,000 to be collected in 2019 pursuant to Minnesota Statutes 469.107. 3. The EDA requests that the Prior Lake City Council adopt the 2019 annual budget in the amount of $150,227. PASSED AND ADOPTED THIS 10th DAY OF SEPTEMBER 2018. VOTE Chromy Braid Sheehan- Kerber Briggs Boucher- Hoese Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ ______________________________ Frank Boyles, Executive Director