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HomeMy WebLinkAbout09 09 2019 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 9, 2019 – 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/2019/September 9, 2019 1. CALL TO ORDER 2. APPROVAL OF AGENDA 3. APPROVAL OF MEETING MINUTES A. August 12, 2019 4. CONSENT AGENDA A. Development Update (8/31/2019) 5. REMOVED CONSENT AGENDA ITEMS 6. PRESENTATIONS A. None 7. PUBLIC HEARINGS A. None 8. OLD BUSINESS A. Public Arts Update (verbal) B. #PLWorthIt Wish Book 9. NEW BUSINESS A. Business Incentives Report 10. OTHER BUSINESS A. Staff Updates a. 2020 EDA Budget Request B. Commissioner Comments a. Committee Liaison, Activity & Initiatives Update 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 12, 2019 1. CALL TO ORDER PRESIDENT CHROMY called the meeting to order at 4:00 p.m. Present were Chromy, Boucher-Hoese, Sheehan- Kerber, Braid and Briggs. Also present were Executive Director Plante, Community Development Director McCabe and Planner Schwabe. 2. APPROVAL OF AGENDA MOTION BY BRIGGS, SECONDED BY SHEEHAN-KERBER, TO APPROVE THE AGENDA. Ayes by Chromy, Bou- cher-Hoese, Braid, Briggs and Sheehan-Kerber. The motion carried 5-0. 3. APPROVAL OF MEETING MINUTES A. July 22, 2019 MOTION BY SHEEHAN-KERBER, SECONDED BY BOUCHER-HOESE TO APPROVE THE JULY 22, 2019 MEET- ING MINUTES. Ayes by Boucher-Hoese, Braid, Briggs and Sheehan-Kerber. The motion carried 5-0. 4. CONSENT AGENDA A. Development Update (07/31/2019) MOTION BY BRAID, SECONDED BY BRIGGS TO APPROVE THE CONSENT AGENDA. Ayes by Chromy, Bou- cher-Hoese, Sheehan-Kerber, Briggs, and Braid. The motion carried 5-0. BRIGGS suggested communicating the development update to residents as it represents productivity as well as EDA work. 5. REMOVED CONSENT AGENDA ITEMS None 6. PRESENTATIONS None 7. PUBLIC HEARING No Public Hearings 8. OLD BUSINESS A. Public Arts MCCABE provided an update on public arts discussions since the last EDA meeting. He stated that EDA members have communicated with other area communities regarding the formation of public art committees and engaging artists. He shared that the other communities recommended soliciting a muralist first and empowering the artist to obtain feedback from a subcommittee/small group, rather than forming a subcommittee and then trying to select a muralist. BRIGGS shared a reference from an artist who works in a “paint by number” format which allows for community participation. MCCABE stated that in addition to other area communities he had reached out to local artists also. He shared that based on those conversations, staff believes it may be more productive for the EDA to solicit input from a muralist, designate a theme, and then develop an arts committee. SHEEHAN-KERBER shared that a mural with more historic references may be more appropriate for a downtown wall at this time. A second mural with a focus on community participation may be more appropriate for another location and could perhaps be in partnership with the school district. BRIGGS stated that the mural should be complimentary to the proposed streetscaping elements on CSAH 21. He shared that the masts, as proposed, may be lit which may shed light onto the wall. He continued to share that the timing of the project is critical. MCCABE shared that the EDA has many options: 1) Engage muralist and direct project; 2) Engage muralist and solicit input on theme from subcommittee and obtain mock-ups; 3) Request Nuvera take the lead; 4) Other MCCABE stated that some artists solicit donations from local businesses for wall space and materials along with grants. BOUCHER-HOESE suggested the mural be completed by November 1, 2019. Discossion followed. MOTION BY SHEEHAN-KERBER, SECONDED BY BOUCHER-HOESE TO AUTHORIZE STAFF UP TO $2,500 TO ENGAGE A MURALIST AND SOLICIT 8.5”x11” CONCEPT OPTIONS AND COST ESTIMATES FOR PRESENTA- TION AT THE SEPTEMBER 9th EDA MEETING. Ayes by Boucher-Hoese, Braid, Briggs and Sheehan-Kerber. The motion carried 5-0. 9. NEW BUSINESS A. Resolution to Approve the Proposed 2020 EDA Tax Levy and Budget MCCABE provided an overview of the proposed 2020 EDA Tax Levy and Budget. MOTION BY CHROMY, SECONDED BY BOUCHER-HOESE TO APPROVE A RESOLUTION REQUESTING CITY COUNCIL APPROVAL OF THE PROPOSED 2020 EDA TAX LEVY OF $311,250 AND A TOTAL BUDGET OF $489,575, WHICH INCLUDES A TRANSFER OF $161,250 FROM THE GENERAL FUND. Ayes by Boucher-Hoese, Braid, Briggs and Sheehan-Kerber. The motion carried 5-0. CHROMY stated that he would be available to present regarding this item to the City Council on September 16th. B. #PLWorthIt Wish Book MCCABE provided an update on the #PLWorthIt Wish Book as part of an enhanced #PLWorthIt program that pro- motes public/private partnership investments in the community. He explained that the Wish Book would identify pro- jects and amenities that are desired by the community but which are not likely to be funded without private sponsor- ship(s). He stated that he and Mayor Briggs met recently with the PL Rotary and discussed the wish book concept which was well received. BRIGGS shared that the Rotarians were very favorable to the wish book concept. He explained that they were most interested in items in and around our parks (e.g. accessible parks similar to Miracle Field Park in Lakeville, MN). He continued to share that proper acknowledgment of contributions is important including, but not limited to, a thank you on item(s) selected/funded. SHEEHAN-KERBER questioned if the wish book would be available online. MCCABE explained that an electronic version of the wish book would allow for the document to be updated, although periodic printing could still be an option. MCCABE questioned if the EDA would consider a budget line item for a wish book match. The EDA indicated that they would support a budgetary line item for match opportunities. MOTION BY BRIGGS, SECONDED BY SHEEHAN-KERBER DIRECTING STAFF TO CREATE AND ESTABLISH A PLWORTHIT WISH BOOK TO BE USED TO COMMUNICATE NEEDS THROUGHOUT OUR COMMUNITY WHERE PUBLIC/PRIVATE PARTNERSHIPS ARE AVAILABLE AND SOUGHT. Ayes by Boucher-Hoese, Braid, Briggs and Sheehan-Kerber. The motion carried 5-0. 10. OTHER BUSINESS A. Staff Updates i. MCCABE provided an update on ongoing redevelopment opportunities. B. Commissioner Comments i. Committee Liaison, Activity & Initiatives CHROMY shared that the Fast-Track Business Challenge applications are open until the end of August and judges are set. BRIGGS and BRAID shared recent communciations from businesses related to roadwork impacts. SHEEHAN-KERBER shared that recent BEC meetings have light attendance and she encouraged mem- bers provide updates on their commercial liaison areas. 11. ADJOURNMENT MOTION BY BRIGGS, SECONDED BY BRAID TO ADJOURN THE MEETING. With all in favor, the meeting ad- journed at 5:33 p.m. Ayes by Chromy, Boucher-Hoese, Sheehan-Kerber, Braid and Briggs. The motion carried 5-0. ___________________________ Lori Olson, Interim Executive Director 4646 Dakota Street SE Prior Lake, MN 55372 ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT MEETING DATE: September 9, 2019 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, 2019. History EDA Commissioners requested an update of residential and commercial activity at each meeting. Conclusion A memorandum will be provided at the September 9th meeting summarizing res- idential 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 (provided at meeting) Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 4646 Dakota Street SE Prior Lake, MN 55372 ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT MEETING DATE: September 9, 2019 AGENDA #: 8B PREPARED BY: Amanda Schwabe, Planner AGENDA ITEM: #PLWorthIt Wish Book DISCUSSION: Introduction The purpose of this agenda report is to discuss possible items for inclusion in the community ‘wish book’ and assembling a subcommittee as part of an expanded #PLWorthIt campaign. History To help area businesses during 2019/2020 construction activities, the EDA has identified opportunities to assist with customer attraction efforts in the downtown and South Lake Village area as part of the #PLWorthIt campaign. At previous EDA meetings, members discussed the expansion of the #PLWorthIt campaign beyond its current focus of generating customer traffic in areas affected by road construction to a program which promotes public/private partnership investments in the community, including but not limited to a Wish Book which would identify projects and amenities that are desired by the community but are not likely to be funded without private sponsorship. Current Circumstances Staff has reviewed recent community surveys, other community wish book style documents and had conversations with public works staff regarding items for inclusion in the Wish Book. Over 65 items have been identified to date for your consideration. Conclusion Staff is looking for direction on the assembled list of Wish Book items as well as direction on the formation of a Wish Book subcommittee to finalize the initial list (with the understanding that the list will evolve as projects are funded and other needs/wants are identified), estimate costs, and assist with the creation and promotion of the Wish Book in an electronic and/or printed format. ISSUES: The development of the Wish Book may require the engagement of a marketing professional to produce both an electronic and print worthy document that can be easily updated by Staff as projects are funded and/or other items are added. Is the EDA’s expectation this initiative will be completed by staff, an existing advisory committee or the EDA? FINANCIAL IMPACT: Some financial support from the EDA is anticipated to assemble some form of printed material. EDA members should provide direction to staff related to the potential financial contribution for this project. ALTERNATIVES: 1. Motion and second providing direction to staff related to the development of a Wish Book, including but not limited to participants (EDA or existing advisory committee), anticipated costs and process. 2. Continue discussion at a future meeting. RECOMMENDED MOTION: ATTACHMENT: Alternative #1 1. Draft Wish Book Idea List DRAFT Prior Lake Wish Book Idea Opportunity Request From 1 Splash Pad*-$ 2017 Community Survey 2 Water Park*-$ 2017 Community Survey 3 CSAH 21 Aesthetic Enhancements (Masts)-$ 13/21 Inter. Improvement Plan 4 LCD Kiosk (Downtown)-$ 13/21 Inter. Improvement Plan 5 Trailhead with Restrooms -$ 6 Fire Memorial 25,000.00$ 7 Off Leash Dog Park -$ 8 Accessible & Inclusive Parks (Ex. Miracle Park in Lakeville, Madison's Place in Woodbury, Lions Park in Shakopee, Chase's Warriors Foundation) $ - 9 Native American themed playground and educational plaques 350,000.00$ 10 Amphitheater Canopy 250,000.00$ 11 Pickleball Courts -$ 12 Restoration of Grainwood Depot -$ 13 Library Fountain 200,000.00$ 14 Downtown Street Lighting -$ 15 Murals*-$ 16 Heritage Plaques (ea.)2,500.00$ 17 Wedding area improvements at Lakefront Park 50,000.00$ 18 Artistic Bicycle Racks 19 Mobile community police station/emergency command post and response trailer*35,000.00$ 20 Jaws of Life 15,000.00$ 21 Defibrillator for city service vehicles 4,000.00$ 22 Holiday lights on Main Avenue 20,000.00$ 23 Disc golf course at Lakefront Park and Signage 10,000.00$ 24 Street banners featuring local art 3,000.00$ 25 Historical plaque for designated local properties 2,500.00$ 26 Trees for Life (Tree)*100.00$ 27 Bicycle racks 500.00$ 28 Boulevard trees 75.00$ 29 Benches 1,500.00$ 30 Interpretive Plaques (ea.)2,500.00$ 31 Pet Waste Station and bags -$ 32 Hockey Rink at City Parks -$ PLSPC 33 Warming Houses at City Parks -$ PLSPC 34 Restrooms at Parks -$ PLSPC 35 Shade structures at parks with limited tree cover -$ PLSPC 36 Tennis Courts at City Parks -$ PLSPC 37 Lights at City Parks -$ PLSPC 38 Community Pool -$ PLSPC 39 Butterfly Garden -$ PLSPC 40 Drinking fountains at City Parks -$ PLSPC 41 Single Track Mountain bike park/trail -$ PLSPC 42 Update Skate Park (design-build pour concrete style)-$ PLSPC 43 Solar Panels at City Parks for Tech Educational area in partnership with schools -$ PLSPC 44 Teen Center -$ PLSPC 45 Climbing Structure (Mark Mahoney Memorial Foundation)-$ PLSPC 46 Tow rope for sledding at Lakefront Park -$ PLSPC 47 Musical instrument Park -$ PLSPC 48 Park equpiment for older teens (Example: French Park Plymouth)-$ PLSPC 49 Paint games (Example: 4 Square, Hopscotch) at parks -$ PLSPC 50 Extend portable restrooms beyond Memorial Day - Labor Day -$ PLSPC 51 Increased Park Signage at Pike Lake Park -$ PLSPC 52 Sidewalk/Path on shady beach trail, Aspen Ave for pedestrian access to Sand Point Beach -$ PLSPC 53 Add Café/Restaurant to Sand Point (Example: Tin Fish at Lake Calhoun)-$ PLSPC 54 Lifeguards at Beaches -$ PLSPC 55 Outdoor Archery Range -$ PLSPC 56 Connections to Spring Lake Regional Park Trail system -$ PLSPC 57 Upgrade to The Ponds Bridge -$ PLSPC 58 Replace grass with turf fields for athletics -$ PLSPC 59 Add sidewalk for pedestrians from Toronto Ave into Ponds Park -$ PLSPC 60 Water hook-up behind each mount to water fields at Thomas Ryan, Ponds, etc.-$ PLSPC 61 Repair/replace bridge in Timbercrest -$ PLSPC 62 Shower/Mister/Water sprayer to wash off sandy feet at Watzl's -$ PLSPC 63 Updated Park Equipment in City Parks -$ PLSPC 64 Trail connections within Prior Lake to Cleary Lake Regional Park -$ PLSPC 65 Pedestrian Bridge on 21 over 13 -$ PLSPC 66 Trail connection between 150th Street and Fish Lake Road to facilitate access to middle schools -$ PLSPC 67 Nature Center -$ PLSPC 68 Signage indicating how city trails connect to existing regional trail system -$ PLSPC Estimated Subtotal:971,675.00$ PLSPC = Prior Lake Social Pinpoint Comments from WSB *Opportunity based on project scope Resources https://www.cityhpil.com/government/city_departments/city_manager_s_office/administration/muni cipal_service_wish_list.php http://brettonridge.com/?page_id=231 https://www.mankatomn.gov/about-mankato/wishbook Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: September 9, 2019 AGENDA #: 9A PREPARED BY: Casey McCabe, Community Development Director AGENDA ITEM: 2019 Business Incentives Report DISCUSSION: Introduction Attached to this report is the 2019 Economic Development Business Incentives Report. History In an effort to provide greater transparency and increase community awareness of available programs and incentives and provide detail of how the City Council and EDA are utilizing business assistance resources, the EDA directed staff to prepare a business incentives report which details the status of the currently active economic development incentives. Current Circumstances The attached report was prepared by the City of Prior Lake Community Devel- opment Department. The information within this report is intended to provide the EDA, City Council and Prior Lake residents with a summary of economic development programs and the amount of incentive provided by the City of Prior Lake. Staff included a general overview of the available programs and incentives, guidelines for review and approval of incentives, and information related to the City of Prior Lake’s historical use of incentive programs. ISSUES: The intent of the report is to provide greater transparency related to the use of business incentives, identify all active City of Prior Lake economic development incentives, offer a list of available resources and programs, and provide infor- mation related to the historical uses of the available incentives. FINANCIAL IMPACTS: No direct cost or impact related to the preparation of the report. ALTERNATIVES: 1. Motion and a second, as part of the consent agenda, accepting the 2019 Economic Development Business Incentives Report, as presented or fur- ther amended by the EDA, and direct staff to place the report on a future City Council meeting agenda. 2. Provide direction to staff and continue discussion at a future meeting. RECOMMENDED MOTIONS: Alternative No. 1 2 ATTACHMENT: 1. 2014 Annual Business Incentives Report 2019 Economic Development Business Incentives Report Prepared By: Community & Economic Development Department September 2019 Prepared For: City of Prior Lake Economic Development Authority City of Prior Lake City Council 4646 DAKOTA STREET SE PRIOR LAKE, MN 55372 1 | P a g e TABLE OF CONTENTS Section Title Page 1.0 INTRODUCTION 2 2.0 OVERVIEW OF ECONOMIC DEVELOPMENT INCENTIVES 2 2.1 Definition of “Business Subsidy” 2 2.2 Public Purpose Objectives of Business Subsidies 2 2.3 Guidelines for Commercial / Industrial Business Subsidies 3 3.0 BUSINESS SUBSIDY POLICIES & GUIDELINES 3 4.0 EDA BUSINESS PLAN 4 5.0 AVAILABLE INCENTIVES 5 6.0 USE OF INCENTIVES 7 6.1 Tax Increment Financing 7 6.2 Economic Development Revolving Loan Fund 8 6.3 DEED Loans/Grants 9 6.4 Conduit Bonds 9 6.5 Land Sale Write Downs 9 6.6 Special Assessment 9 6.7 Tax Abatement 10 6.8 Sewer and Water Fee Deferral Program 10 6.9 Summary of Recent Incentives 12 6.10 New Commercial Development 13 2 | P a g e 1.0 INTRODUCTION This report was prepared by the City of Prior Lake Community Development Department. The information within this report is intended to provide the Economic Development Authority (EDA), City Council and Prior Lake residents with a summary of economic development programs and the amount of incentive provided by the City of Prior Lake in recent years. To provide greater transparency and increase community awareness of available programs and incentives, this report provides a detailed status of the currently active incentives and includes a general overview of historical incentives. 2.0 OVERVIEW OF ECONOMIC DEVELOPMENT INCENTIVES The fundamental purpose of providing business subsidies in the City of Prior Lake is to encourage desirable development or redevelopment that may not otherwise occur; not to enhance the return on investment for individual projects. It is the policy of the City of Prior Lake to provide subsidies and incentives in the most limited fashion possible to assure that the project will proceed. The City reserves the right to approve or reject projects on a case-by-case basis, considering established policies, specific project criteria, and demand on city services in relation to the potential benefits to be achieved from a proposed project. This process is inherently subjective, and whether a project receives a business subsidy or not may be as much a function of the City’s budget as the merit of the project. While it is recognized that the creation of good paying jobs is a desirable goal that benefits the city, it must also be recognized that not all projects assisted with business subsi dies derive their public purposes solely by virtue of job creation. The City believes that each economic development opportunity offers its own unique benefit to the city, whether it be retail, commercial or industrial in nature. These benefits may be in the form of added tax base, new or retained jobs and higher incomes, overall investment in the area, business diversification and/or increased economic activity and vitality. It is the desire of the City to promote job creation, redevelopment and investment as well as to expand the city’s tax base and diversify the city’s industrial, commercial and retail base. 2.1 DEFINITION OF “BUSINESS SUBSIDY” The following types of assistance are defined as a “business subsidy” within the Minnesota Business Subsidy Law: ➢ A state or local government agency grant; ➢ Contribution of personal property, real property, or infrastructure; ➢ The principal amount of a loan at rates below those commercially available to the recipient; ➢ Any reduction or deferral of any tax or fee; ➢ Any guarantee of any payment under any loan, lease, or other obligation; or ➢ Any preferential use of government facilities given to a business. 2.2 PUBLIC PURPOSE OBJECTIVES OF BUSINESS SUBSIDIES In accordance with the MN Business Subsidy Law, the City considers using business subsidies to assist private development projects to achieve one or more of the following public purpose objectives: 3 | P a g e ➢ To retain local jobs and/or increase the number and diversity of jobs that offer stable employment and/or attractive wages and benefits. ➢ To enhance and diversify the City of Prior Lake’s tax base. ➢ To encourage additional unsubsidized private development in the area, either directly or indirectly, through “spin-off” development. ➢ To achieve development on sites that may not be developed without business subsidies assistance. ➢ To remove blight and/or encourage development of commercial and industrial areas in the city that result in higher quality development or redevelopment and private investment. ➢ To offset increased costs of development for specific properties when the unique physical characteristics of the site may otherwise preclude private investment. 2.3 GUIDELINES FOR COMMERCIAL / INDUSTRIAL BUSINESS SUBSIDIES ➢ Business subsidies will not be used for on-site retail or service business unless it is a redevelopment project that demonstrates that it will result in a substantial increase in tax base and/or a significant improvement in quality employment or is eligible for a specific program (e.g. SAC/WAC Deferral). ➢ The project must be consistent with the City’s Comprehensive Plan, Land Use Plan and Zoning Ordinances. ➢ Projects that result in the retention of existing jobs that may be lost without the proposed development or result in an increase and diversification in local jobs that may not otherwise occur without the proposed development will be strongly considered. ➢ If wage and job goals are required by the City, the City will determine such goals considering the particular form of the subsidy, nature of the development, the purpose of the subsidy, local economic conditions and similar factors. The recipient will have up to two years after the Benefit Date to meet the job and wage goals established by the City. The City's goal in this area is to assist in the creation of jobs at wage and benefit levels that will support families. The minimum wage for a job to be considered a new or retained job shall be established at 120% of the federal poverty level for a family of four, as determined annually by the U. S. Department of Health and Human Services, exclusive of benefits. Deviations less than the wage floor will be considered on a case- by-case basis and in accordance with the requirements of the MN Business Subsidy Law. In projects where a business subsidy provided by the City is secondary to a business subsidy provided by another granting agency, such as the State or federal government, the wage guidelines set by that agency shall be used. ➢ Business subsidies will not be given to commercial/industrial projects or applicants that have a history of inconsistent compliance with applicable environmental rules and regulati ons, or failure to comply with State and Federal Regulations regarding Equal Opportunity and Occupational Safety Standards. 3.0 BUSINESS SUBSIDY POLICIES & GUIDELINES The City of Prior Lake has established guidelines and policies related to financing or incentive programs. Examples include: ➢ City of Prior Lake Business Subsidies Policy. This policy establishes guidelines and criteria regarding the use of business subsidies, such as tax increment financing, tax abatement, loans and other business subsidies for private development projects within the City of Prior Lake. These 4 | P a g e guidelines and criteria are in addition to the requirements and limitations set forth by provisions of Minnesota Statute 116J.993 – 116J.995 (MN Business Subsidy Law). ➢ Local Business Incentives Policy. This policy establishes guidelines and criteria regarding the use of local business incentives that are not subject to the requirements and limitations set forth by provisions of Minnesota Statute 116J.993 – 116J.995 (MN Business Subsidy Law). ➢ Economic Development Revolving Loan Fund Guidelines. These guidelines establish policies and procedures to regulate, coordinate and facilitate the workflow for underwriting new financing requests, servicing revolving loans and ensuring borrower compliance with loan terms and conditions; including regulations established by the U.S. Department of Housing and Urban Development for use of Federal funds. ➢ Technology Village Business Accelerator Business Plans. The Technology Village Business Accelerator business plan helps guide the programming and direction of the Technology Village program as well as ensuring the overall financial viability of the business accelerator program. ➢ EDA Business Plan. This business plan helps guide the Prior Lake Economic Development Authority as it develops and implements strategic economic development initiatives. ➢ City of Prior Lake Sewer and Water Fee Deferral Program Policy. This policy governs the use of two programs, including the Metropolitan Council’s “SAC Deferral Program” for certain sewer fees (Regional Program) and the City of Prior Lake’s “Payment of Permit Fees” for certain sewer and water fees (Local Program). The policy establishes procedures to regulate, coordinate and facilitate the approval of certain sewer and water fee deferrals for eligible businesses or properties. 4.0 EDA BUSINESS PLAN In April 2018, the Economic Development Authority adopted an EDA Business Plan. The business plan establishes guidelines and criteria regarding the use of EDA Special Revenue Fund to achieve economic development initiatives of the City of Prior Lake and objectives of the EDA. The guidelines and criteria are in addition to the requirements and limitations set forth by provisions of Minnesota Statute 116J.993 – 116J.995 (“MN Business Subsidy Law”) and City of Prior Lake policies and guidelines with respect to any form of subsidy. The following actions have been identified in the Business Plan as key EDA initiatives. All initiatives work together to support a business community that is focused on technology, job creation, diversification of tax base and Prior Lake’s strengths in entertainment and recreation. 1. Special Revenue Fund Economic Development Initiatives. Periodically the EDA will request that the City Council allocate funds from the Prior Lake General Fund (Fund 101) to the EDA Special Revenue Fund (Fund 240). The EDA will utilize funds from the EDA Special Revenue Fund to accomplish the following economic development initiatives in 2018 and beyond. Initiatives include but are not limited to: i) property acquisition; ii) storefront rehabilitation; iii) direction and promotional signage such as banner poles, visitor kiosks, or wayfinding signage; iv) economic development and redevelopment loans and incentives; v) new business attraction through website enhancements and marketing; vi) effo rts to facilitate commercial development and redevelopment; and vii) enhancing the character of commercial areas. 2. Technology Village Business Accelerator. Technology Village opened in January 2013 on the main floor of Prior Lake City Hall within a previously underutilized office space of approximately 2,000 square feet. Initiating the program in the existing city hall building helped minimize start - up costs and allowed for the shared use of services already in place serving City of Prior Lake staff, 5 | P a g e including; internet, phone, meeting space, cafeteria/break room, etc. The office space within city hall also provided the added locational benefit of allowing the program participants to be near city staff who administer the day-to-day program operations. The Technology Village Board of Directors developed a ‘virtual’ participant program in 2016. The virtual program is designed to provide support to emerging technology and professional service businesses located in Prior Lake, or throughout Scott County, which are not physically located in the designated Technology Village space. The virtual program provides an opportunity for businesses, which may be home-based or are already established in an office space, to participate and benefit from the Technology Village Business Accelerator program. In 2018, the EDA will focus on shifting the Technology Village program from a City of Prior Lake program into a county-wide model, which will be managed by First Stop Shop staff within the Scott County CDA. 3. Targeted Areas for Development. The EDA will help facilitate commercial development in three targeted areas around highway intersections, including: (i) CH 21 / TH 13; (ii) CH 21 / CH 42; and (iii) CH 42 / TH 13. It will also help facilitate full development of the remaining lots within the 50-acre Deerfield Business Park and maximize development potential within the 40 -acre Welcome Industrial Park. Redevelopment opportunities also exist in certain locations, such as Welcome Avenue and downtown Prior Lake. 4. Downtown Parking. In 2015, SRF Consulting Group completed a Downtown Parking Analysis. The purpose of the study was to build upon previous parking studies by identifying downtown sites that will best accommodate future public parking demand, including structured parking facilities. Prior Lake is fortunate to not only have very little downtown vacancy, but the downtown is also seeing some significant commercial development and redevelopment activity. With the increased activity and occupied storefronts, convenient municipal parking stalls will become more difficult to locate. The EDA will review the Downtown Parking Analysis and determine which short, mid and long-term implementation steps should be pursued. 5. Commercial Activity During Construction. Prior Lake will see some significant road improvement projects in 2018 and 2019 along key transportation networks. The EDA will work with commercial businesses and stakeholders in these areas, as well as the Chamber of Commerce, Business Engagement Committee and other groups to maintain and encourage the economic vitality of our businesses before, during and after these construction projects. 5.0 AVAILABLE INCENTIVES Economic development incentives come in several forms to help facilitate an economic development project. A thorough evaluation of the project’s needs as compared to the eligibility requirements of various incentive programs helps determine which economic development assistance programs may, or may not, be utilized. The following economic development incentives are available for use by the City of Prior Lake for certain economic development projects. Not all incentives are available for each project and projects may be offered more than one incentive. The type and number of incentives is the sole discretion of the City of Prior Lake. Incentives are as follows: 6 | P a g e Tax Increment Financing – A development tool whereby the taxes generated by a development or redevelopment project are used to pay the costs of the project. Four types of Tax Increments Districts are used for different projects: Economic Development District – for new industrial expansion and job creation purposes. Redevelopment District – to redevelop or reuse previously developed land and/or buildings. Usually used for building code issues, base value purchase, demolition and/or infrastructure purposes. Soils Condition District – used to make land with unstable soils usable for development. Also used to address situations involving pollution. Housing District – used to develop affordable housing by acquiring land, buildings and or funding infrastructure. Economic Development Revolving Loan Fund – Provides gap financing through low interest loans to small and medium size businesses for a variety of economic development activities. DEED Loans/Grants – Numerous grant and loan programs are available from the Minnesota Department of Employment and Economic Development to assist with development and redevelopment projects. The city must serve as the applicant in partnership with a company or developer. Conduit Bonds – City issued revenue bonds on behalf of a private developer. These “conduit” borrowers agree to repay the issuer, who pays principal and interest on the securities from the revenues generated from a specific project or source. Liability for repayment of the bonds is solely that of the developer. Land Sale Write Downs – Land owned by the City, acquired either through purchase or through property tax default, is occasionally sold at less than what an appraisal determines to be i ts estimated market value. This can be done either because of unique conditions on a site, such as soils, rock, pollution, wetland, or it can be done purely as an incentive. Special Assessment – The levying of a charge for public costs against property that has received a benefit from a project or activity. The special assessment becomes a part of the funding mechanism to defray the cost of the project. Commercial Property Leases – Commercial property owned by the City may be leased at less than estimated market value. Business Accelerator Space Write Downs – Below market lease rates available to qualifying companies or program participants in city owned office space. Other options include reimbursement for a portion of quarterly rent payments for program participants in privately owned Prior Lake office space. Tax Abatement – Minnesota law authorizes political subdivisions to grant property tax abatements for a broad range of economic development purposes. Economic development tax abatements should be 7 | P a g e distinguished from property tax abatements that are granted by the county board primarily to correct errors. Sewer and Water Fee Deferral Program – Deferral of a portion of certain Metropolitan Council sewer availability charge (SAC) fees and certain City of Prior Lake sewer and water fees for eligible commercial and residential properties. 6.0 USE OF INCENTIVES Below is a summary of the current and historical use of economic development incentives in the City of Prior Lake. Every effort was made to include all recent and currently active incentives granted by the City. References to the historical uses of incentives were provided for background; this list is not intended to be a complete record of all previous incentives granted by the City of Prior Lake. 6.1 TAX INCREMENT FINANCING Tax Increment Financing is a development tool whereby the taxes generated by a development or redevelopment project are used to pay the costs of the project. The City of Prior Lake has six (6) active Tax Increment Financing (TIF) districts; three (3) housing districts, two (2) redeve lopment districts, and one (1) economic development district. District 1-3, Lakefront Plaza, is a redevelopment district approved to assist with the construction of an 80-unit owner-occupied senior housing facility and 12,000 SF of retail space and related improvements. District 1-4, River Valley Vet Clinic, is an economic development district approved to assist with the construction of a 7,000 SF addition to an existing veterinary clinic facility. District 3-1, Creekside Commons, is a housing district approved to assist with the construction of a 54- unit senior housing facility. District 5-1, Premiere Dance, is a redevelopment district approved to assist with the construction of a 10,000 SF commercial facility to be used as a dance studio. District 6-1, Shepherds Path, is a housing district approved to assist with the construction of 442 senior housing units, a YMCA facility, other commercial uses, park area, trails and companion uses to an existing church. District 1-5, Gateway Center, is a housing district approved to assist with the acquisition, construction and equipping of a 170-unit, multi-family senior housing development. 8 | P a g e 6.2 ECONOMIC DEVELOPMENT REVOLVING LOAN FUND The Economic Development Revolving Loan Fund was created to provide gap financing through low interest loans to small and medium size businesses for a variety of economic development activities; primarily to assist in the attraction of new businesses and the expansion of existing businesses. The primary funding source for the Economic Development Revolving Loan Fund is the EDA Special Revenue Fund. In addition to the EDA Special Revenue Fund, the City of Prior Lake has revolving loan funding available through program income available through repayment of previous State and Federal Revolving Loans. These State and Federal fund repayments may be used for the same purposes as the Economic Development Revolving Loan Fund; however, more stringent rules may apply to the reuse of these funds. On August 8, 2016, the Prior Lake City Council approved a resolution approving a business subsidy agreement, which included a $95,000 forgivable Economic Development Revolving Loan to assist Versatile Vehicles, Inc. with the construction of a 58,000 SF building within the Deerfield Business Park. On December 11, 2017, the Prior Lake City Council approved a business subsidy agreement, which included a forgivable Economic Development Revolving Loan in the amount not to exceed $116,800 to assist with demolition, site preparation and construction costs related to the PLate on Main restaurant at 16323 Main Avenue SE. On September 10, 2018, the EDA approved an Economic Development Revolving Loan in an amount not to exceed $37,131 to assist SR Property Development, LLC with construction of an approximate 11,200 SF building 17098 Adelmann Street SE. These funds have been committed, but not yet expended. On March 11, 2019, the EDA approved an Economic Development Revolving Loan in an amount not to exceed $149,900 to assist Mana Brewing, LLC with construction of an approximate 7,000 SF TIF District Number 1-3 1-4 3-1 5-1 6-1 1-5 TIF District Name Lakefront Plaza River Valley Vet Clinic Creekside Commons Premiere Dance Shepherds Path Gateway Center District Type Redev. Ec. Dev. Housing Redev. Housing Housing TIF Plan Approval Date 12/14/2001 9/19/2011 12/17/2001 3/6/2006 6/26/2006 5/11/2015 Certification Date 3/29/2002 3/27/2012 3/29/2002 7/18/2006 7/18/2006 6/6/2016 Month/Year of First Increment June 2004 July 2013 June 2004 June 2009 June 2007 July 2017 Required Decertification Date 12/31/2029 12/31/2022 12/31/2029 12/31/2034 12/31/2034 12/31/2035 Total Estimated Increment Revenue $3,000,000 $96,000 $1,600,000 $330,000 $6,186,000 $2,270,000 Land/Building Acquisition $0 $0 $311,600 $200,000 $0 $0 Site Improvements/Preparation Costs $950,000 $87,900 $74,400 $25,000 $2,388,000 $0 Utilities $0 $0 $29,200 $0 $0 $0 Other Qualifying Improvements $665,000 $0 $41,600 $20,000 $0 $0 Construction of Affordable Housing $0 $0 $114,200 $0 $0 $1,637,000 Administrative Costs $70,000 $8,100 $160,000 $33,000 $640,000 $113,500 Estimated Tax Increment Project Costs $1,685,000 $96,000 $731,000 $278,000 $3,028,000 $1,750,500 Interest Expense $1,315,000 $0 $869,000 $52,000 $3,158,000 $517,000 Total Proj/Financing Costs Paid from Tax Inc. $3,000,000 $96,000 $1,600,000 $330,000 $6,186,000 $2,267,500 Total Amount of Bonds to be Issued $1,685,000 $96,000 $731,000 $330,000 $6,186,000 $1,750,500 9 | P a g e brewery building at the corner of West Avenue and CSAH 21. These funds have been committed, but not yet expended. 6.3 DEED LOANS/GRANTS The Minnesota Department of Employment and Economic Development (DEED) has programs in place to provide financial assistance to communities for the following types of projects: ➢ Business Development Funding - for projects likely to result in economic growth, stimulate business startups and expansions, create and retain jobs. ➢ Community Development Funding - to preserve or improve community vitality and economic growth, including residential and commercial redevelopment. ➢ Infrastructure Funding - for basic infrastructure, including drinking water, wastewater treatment, roads, housing and other public facilities. ➢ Site Cleanup and Redevelopment - to redevelop contaminated and blighted properties. The City of Prior Lake must serve as the grant/loan applicant in partnership with a company or developer. The City has no active loan or grant agreements with DEED. 6.4 CONDUIT BONDS Conduit debt obligations are certain limited obligation revenue bonds or similar instruments issued for express purpose of providing capital financing for a specific third party. The City has issued revenue bonds to provide funding to private sector entit ies for projects deemed to be in public interest. Although these bonds bear the name of the City, the City has no obligation for such debt. Accordingly, the bonds are not reported as liabilities in the financial statements of the City. The City of Prior Lake issued two bonds in 2006 to assist with the construction of the Shepherd’s Path Senior Housing project (dba McKenna Crossing Senior Housing). Shepard's Path refunded conduit debt in 2016. As of December 31, 2018, the portion of the note outstanding was $4,811,065. 6.5 LAND SALE WRITE DOWNS The City of Prior Lake may sell land owned by the City, acquired either through purchase or t hrough property tax default, at less than what an appraisal determines to be its estimated market value. This can be done either because of unique conditions on a site, such as soils, rock, pollution, wetland, or it can be done purely as an incentive. Over the years, the City of Prior Lake has acquired a significant amount of commercial property in the downtown area. Although the City of Prior Lake has not recently sold property for economic development purposes, the City may elect to sell its commercial property at less than market rate in the future to incentivize commercial development or redevelopment in the downtown. 6.6 SPECIAL ASSESSMENT The City of Prior Lake may levy a charge for public costs against property that has received a benefit from a project or activity. The special assessment may become part of the funding mechanism to defray project costs. 10 | P a g e Prior to the establishment of the Sewer and Water Fee Deferral Program, the City had entered into agreements with private developers or businesses for deferral of payments for sewer and water service associated with development and redevelopment activities. Although not used in recent years, the ability for the City of Prior Lake to specially assess for certain development or redevelopment costs is an available economic development incentive. 6.7 TAX ABATEMENT Minnesota law authorizes political subdivisions to grant property tax abatements for economic development. Abatements can serve similar purposes to tax increment financing (TIF). The legislature enacted the abatement law in 1997 to provide an alternative to TIF and to supplement it. These economic development tax abatements should be distinguished from property tax abatements that are granted by the county board primarily to correct errors. The law allows abatements to be used for a broa d range of projects and purposes, if the political subdivision finds that public benefits exceed the costs. Permitted uses of abatements include the following: ➢ General economic development, such as increasing the tax base or the number of jobs in the are a. ➢ Construction of public facilities or infrastructure. ➢ Redevelopment of blighted areas. ➢ Providing access to services for residents. ➢ Deferring or phasing in a large (over 50 percent) property tax increase. ➢ Stabilizing the tax base resulting from the updated utility valuation administrative rules. ➢ Providing relief for businesses with estimated market value of $250,000 or less who have disrupted access due to public transportation projects. On August 8, 2016, the Prior Lake City Council approved a resolution approving a tax abatement and business subsidy agreement to assist Versatile Vehicles, Inc. with the construction of a 58,000 SF building within the Deerfield Business Park. The maximum amount of tax abatement payable shall be $180,000 over a maximum of 15 years. On June 12, 2017, the Prior Lake City Council approved a resolution approving a tax abatement and business subsidy agreement to assist Prior Lake Revival, LLC with the construction of a 12,400 SF building on Duluth Avenue. The maximum amount of tax abatement payable shal l be $125,000 over a maximum of 15 years. The tax abatement to be paid to Versatile Vehicles and Prior Lake Revival shall be the net amount of property taxes received by the City from the project site. The “net amount of property taxes” shall be the actual annual amount of property taxes received by the City attributable to an increase or increases in the property taxes as a result of the projects. The net amount of property taxes shall not include any value or increase or decrease in value attributable to the land only. 6.8 SEWER AND WATER FEE DEFERRAL PROGRAM The Sewer and Water Fee Deferral Program allows for the deferment of Sewer Availability Charge (SAC) fees for eligible businesses that receive SAC determinations between three (3) and of 25 units. Eligible businesses or properties can apply for the deferral of a portion of one or more sewer/water fees, including: 11 | P a g e ➢ Metropolitan Council Sewer Availability Charge (SAC) – Regional Program sewer fee; ➢ Prior Lake Sewer Connection Charge – Local Program sewer fee; ➢ Prior Lake Water Connection Charge – Local Program water fee; and ➢ Prior Lake Water Tower Charge – Local Program water fee. The Sewer and Water Fee Deferral Program is divided into three subgroups: ➢ Met Council SAC Deferral Program: 5-year term; 2.23% interest [interest rate varies and is determined annually]; 20% paid up-front; secured by assessment agreement against the property; eligible only to business with a SAC unit determination between three (3) and twenty-five (25) units. This program is established and regulated by a master deferral agreement executed between the city and Metropolitan Council. ➢ City Sewer/Water Fee Deferral Program A: 5-year term; same interest rate as Met Council program; 20% paid up-front; secured by assessment agreement against the property; eligible only to business with a SAC unit determination between three (3) and twenty-five (25) units. This program is established by city ordinance and is intended to parallel the Metropolitan Council program guidelines. ➢ City Sewer/Water Fee Deferral Program B: 5-year term; interest established identical to the assessment rate method; 20% paid up-front, secured by assessment agreement against the property; eligible to anyone with a SAC unit determination greater than twenty-five (25) units. This program is unique to the City of Prior Lake and is established and regulated by city ordinance. For any SAC deferral, the three (3) unit minimum and the twenty-five (25) unit maximum are determined before application of any credits on the site. The Local Program also allows anyone to apply for a deferral of sewer/water fees when the SAC determination is gr eater than twenty-five (25) units, before application of any credits on the site. The structure of the Regional and Local Program deferrals includes, but is not limited to, the following provisions: ➢ The deferral amount can equal up to eighty percent (80%) of the total sewer and/or water fees due. ➢ The deferment term is five (5) years. ➢ Each deferment liability will be effective the first day of the subsequent month (e.g., for an April building permit that is due and typically reported in May, intere st will begin accruing June 1). ➢ Interest rates for the Regional Program and Local Program A are determined using the Metropolitan Council’s SAC Deferral Program rate, which is determined annually and set for the deferment period. Interest is amortized over the term of the deferment period using whole months. ➢ Interest rates for Local Program B are determined using a rate of two (2) percentage points higher than the net interest cost of the most recent bonds sold by the City. ➢ A Payment Agreement will be executed between the eligible business, the fee property owner, and the City stating all conditions and requirements of the parties for the Regional and Local Programs; this document shall be recorded. 12 | P a g e The following conditions create ineligibility for a business or property to apply for the Regional or Local Programs: ➢ The fee owner’s property taxes are delinquent. ➢ The business is not in good standing with the State of Minnesota or is in violation of a Prior Lake City Code. ➢ The SAC determination (before credits) is less than three (3) units. ➢ The business does not meet the definition of eligible commercial properties in the Metropolitan Council’s SAC Deferral Program (for the Regional Program and Local Program A). ➢ The property is not located within the City of Prior Lake. ➢ The property is located on tribal lands. As of December 31, 2018, the City of Prior Lake has approved four SAC/WAC deferral agreements. Recipients were Artisan Bistro Café, Honest-1 Auto Care, Water Street Restaurants Group [Charlie’s on Prior], and PLate on Main. Honest-1 Auto Care and Artisan Bistro Café has paid off their fee deferral in full. Below is a summary of the two active sewer and water deferral agreements: 6.9 SUMMARY OF RECENT INCENTIVES It has been a primary goal of the Prior Lake City Council and Economic Development Authority to enhance and diversify the city’s commercial and industrial tax base. To that end, the City Council and EDA have entered into several agreements to assist with business growth, retention and expansion since 2016; including, Prior Lake Revival On June 12, 2017, the Prior Lake City Council approved a resolution approving a tax abatement and business subsidy agreement to assist Prior Lake Revival, LLC with the construction of a 12,400 SF building on Duluth Avenue. The maximum amount of tax abatement payable shall be $125,000 over a maximum of 15 years. Versatile Vehicles On August 8, 2016, the Prior Lake City Council approved a resolution approving a business subsidy agreement, which included a $95,000 forgivable Economic Development Revolving Loan and a tax abatement in the maximum amount of $180,000 over a maximum of 15 years to assist Versatile Vehicles, Inc. with the construction of a 58,000 SF building within the Deerfield Business Park. PLate on Main On December 11, 2017, the Prior Lake City Council approved a business subsidy agreement, which included a forgivable Economic Development Revolving Loan in the amount not to exceed $116,800 to assist with demolition, site preparation and construction costs related to the PLate on Main restaurant at 16323 Main Avenue SE. Business Deferral Amount Interest Rate Term (months) Agreement Date First Payment Due Met Council P/I City of Proir Lake P/I Water Street Restaurants Group $75,772.00 2.25%60 8/8/2015 10/1/2015 $39,932.09 $40,252.93 PLate on Main $70,464.00 2.23%60 5/25/2018 7/1/2018 $31,510.17 $43,020.57 13 | P a g e SR Property Development On September 10, 2018, the EDA approved a forgivable Economic Development Revolving Loan in an amount not to exceed $37,131 to assist SR Property Development, LLC with construction of an approximate 11,200 SF building 17098 Adelmann Street SE. These funds have been committed, but not yet expended. Mana Brewing On March 11, 2019, the EDA approved an Economic Development Revolving Loan in an amount not to exceed $149,900 to assist Mana Brewing, LLC with construction of an approximate 7,000 SF brewery building at the corner of West Avenue and CSAH 21. These funds have been committed, but not yet expended. #PLWorthIt On March 11, 2018, the EDA approved an allocation of up to $46,420 from the EDA Special Revenue Fund to implement events and construction communication efforts to promote customer traffic in commercial areas affected by the 2019 road reconstruction projects. Other EDA Professional Services Expenditures In addition to the business subsidy programs outlined above, the EDA has utilized its Professional Services Fund to provide business assistance in recent years; including, ➢ An allocation of $990 to support a ‘Talk of the Town’ business mixer event in cooperation with the Business Engagement Committee. ➢ $19,437 to assist with costs of relocating and burying overhead power lines near the intersection of Main Ave. SE and Pleasant St. SE. ➢ Assist with electrical upgrade costs in a city-owned building at 16220 Main Ave. SE to support a new ice cream shop. ➢ $2,426 for the development and hosting of a City of Prior Lake economic development focused website as well as hosting of a Technology Village Business Accelerator website. 6.10 NEW COMMERCIAL DEVELOPMENT In addition to the many new businesses that have made Prior Lake home in recent years and occupying previously vacant buildings, the city has been fortunate to add nearly 330,000 square feet of new commercial/industrial property to the city over the past few years; in part due to the support of the Prior Lake City Council and Economic Development Authority. Business Address New SF Versatile Vehicles, Inc. 17136 Adelmann St. SE 58,650 Pro Service Auto Repair 16921 Panama Ave. SE 6,590 Blahnik Law Office 4617 Colorado St. SE 2,700 Universal Motors 16720 Welcome Ave. SE 15,000 Select Space Self-Storage 4400 Fountain Hills Dr. NE 92,600 Prior Lake Revival 16250 Duluth Ave. SE 12,400 SDDI Sign Systems 5702 Graystone Ct. SE 10,000 Port City Bakery 5832 Industrial Lane SE 45,000 PLate on Main 16323 Main Ave SE 3,900 Berens Bus 16765 Welcome Ave. SE 5,676 Rainbow Child Care 5565 Credit River Road SE 10,782 Iron Clad Self-Storage 17230 Adelmann St. SE 66,424 14 | P a g e This new commercial and industrial square footage results in an estimated $120,000+ in annual property tax payments to the City of Prior Lake. In addition, the property tax paid by these commercial properties provides support to Scott County and the local school districts. The assistance provided by the City of Prior Lake in recent years to support business development, retention and expansion has helped the city achieve its stated public purpose objectives. ➢ To retain local jobs and/or increase the number and diversity of jobs that offer stable employment and/or attractive wages and benefits. ➢ To enhance and diversify the City of Prior Lake’s tax base. ➢ To encourage additional unsubsidized private development in the area, either directly or indirectly, through “spin-off” development. ➢ To achieve development on sites that may not be developed without business subsidies assistance. ➢ To remove blight and/or encourage development of commercial and industrial areas in the city that result in higher quality development or redevelopment and private investment. ➢ To offset increased costs of development for specific properties when the unique physical characteristics of the site may otherwise preclude private investment.