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Home My WebLink About08 26 2024 EDA Agenda Packet Phone 952.447.9800 / www.priorlakemn.gov 4646 Dakota Street SE Prior Lake, MN 55372 PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY AGENDA Monday, August 26, 2024 – 4:00 p.m. Parkview Community Room Prior Lake City Hall, 4646 Dakota St. SE Reports included with this agenda can be found on the City of Prior Lake website at www.cityofpriorlake.com Please follow this file path: Agendas & Minutes / Economic Development Authority / 2024 / August 26, 2024 1. CALL TO ORDER 2. APPROVAL OF AGENDA 3. APPROVAL OF MEETING MINUTES A. June 10, 2024 4. PRESENTATIONS A. Cora Project Update – The Beard Group 5. CONSENT AGENDA A. Monthly Development Update (7/31/2024) B. Appoint Arts and Culture Committee Members 6. REMOVED CONSENT AGENDA ITEMS 7. OLD BUSINESS 8. NEW BUSINESS A. Proposed 2025 EDA Tax Levy and Budget B. Community Artist Sculpture 9. OTHER BUSINESS A. Staff Updates i. Next Scheduled Meeting September 9, 2024 B. Commissioner Comments 10. ADJOURNMENT PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY MINUTES Monday, June 10, 2024 – 4:00 p.m. Parkview Conference Room Reports included with this agenda can be found on the City of Prior Lake website at www.cityofpriorlake.com Please follow this file path: Agendas & Minutes / Economic Development Authority / 2024 / June 10, 2024 1. CALL TO ORDER Vice Chair Boucher-Hoese called the meeting to order at 4:06 p.m. In attendance were Marco, Boucher-Hoese and Braid. Absent Prchal and Briggs. Also present were Executive Director Wedel, staff Liaison McCabe, and Deputy City Clerk / Administrative Assistant Kooiman. 2. APPROVAL OF AGENDA MOTION BY BRAID, SECONDED BY MARCO TO APPROVE THE AGENDA. Ayes by Boucher-Hoese, Braid, and Marco. The motion carried 3-0. 3. APPROVAL OF MEETING MINUTES MOTION BY MARCO, SECONDED BY BRAID TO APPROVE THE March 11, 2024, MEETING MINUTES. Ayes by Boucher-Hoese and Marco. Abstain by Braid The motion carried 2-0. 4. CONSENT AGENDA A. Monthly Development Update (5/3/2024) MOTION BY BRAID, SECONDED BY MARCO TO APPROVE THE CONSENT AGENDA. Ayes by Boucher-Hoese, Braid, and Marco. The motion carried 3-0. 5. REMOVED CONSENT AGENDA ITEMS None 6. PRESENTATIONS None 7. OLD BUSINESS None 8. NEW BUSINESS A. EDA Property Tax Exemptions Commissioners discussed four parcels owned by the EDA acquired for economic development purposes and their eligibility for property tax exempt status under Minnesota Statutes, Section 272.02, Subdivision 39, Economic Development; Public Purpose. MOTION BY MARCO, SECONDED BY BRAID TO APPROVE THE RESOLUTION CERTIFYING FOUR PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY OWNED PARCELS ARE BEING HELD FOR ECONOMIC DEVELOPMENT PURPOSES AND THEREFORE ARE ELIGIBLE FOR PROPERTY TAX EXEMPT STATUS. Ayes by Boucher-Hoese, Braid, and Marco. The motion carried 3-0. 4646 Dakota Street SE Prior Lake, MN 55372 B. EDA Request for city to transfer ownership of Colorado St. Vacant Lot. Commissioners discussed the transfer of ownership from City Council to the EDA of 0.34-acre parcel at the southwest corner of the CH21/Arcadia Avenue for future economic redevelopment purposes. MOTION BY MARCO, SECONDED BY BOUCHER-HOESE TO REQUEST THE CITY COUNCIL TRANSFER OF OWNERSHIP OF PID 250011220 TO THE EDA FOR FUTURE ECONOMIC REDEVELOPMENT PURPOSEs. Ayes by Boucher-Hoese, Braid, and Marco. The motion carried 3-0. 9. OTHER BUSINESS A. Staff Updates Wedel updated commissioners on the status of the orderly annexation agreement with Spring Lake Township. B. Commissioner Comments 10. ADJOURNMENT MOTION BY BOUCHER-HOESE, SECOND BY BRAID TO ADJOURN THE MEETING. Ayes by Boucher-Hoese, Braid, and Marco. The motion carried 3-0. The meeting adjourned at 4:44 p.m. Submitted by Megan Kooiman 4646 Dakota Street SE Prior Lake, MN 55372 ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT MEETING DATE: August 26, 2024 AGENDA #: 4A PREPARED BY: Casey McCabe, Community Development Director AGENDA ITEM: Cora Project Update – The Beard Group DISCUSSION: Introduction Representatives of The Beard Group will be in attendance to discuss the status of the proposed Cora mixed use apartment project on Dakota Street SE. ALTERNATIVES: ATTACHMENT: Discussion Only 1. Status, Issues and Next Steps 2. Financing Information The Cora City Update: Current Status: • Project Entitlements 95% complete • The project was bid out to 3 general contractors. We have selected a general contractor but haven’t entered into a construction contract (intentionally) • Have a restaurant group selected and the terms and conditions of a Letter of Intent have been agreed to. • Have equity investor(s) • Have 3 Banks that have indicated they are prepared to lend upon appropriate conditions (reduced interest rates) o Sunrise Bank o American National Bank o Bridgewater Bank The Problem Project Budget Review: TIF Approval August 2022 (baseline) v August 2023 Problem/Issues: • Project Costs: Increased $3.7 million (TIF Budget $31.8 mil project to a $35.5 mil project) o Construction Costs increased $2.935Mil o Loan Costs increased $567K o Entitlement Costs increased $129k • Financing/Interest Rates: Increased 38% from 5.25% to 8.5% Moving Forward: (Not 1 answer) o Construction Costs: Rebid the project and expect to reduce Construction Costs by $1.73mil ▪ Subcontractors are more aggressive because of the slow down ▪ Supply Chain issues have been dramatically reduced ▪ Key raw material costs are normalizing o Loan Costs: Interest Rates have to fall to around 6%. This will reduce the construction interest by $235k. o Owner Equity: Increase $1mil (+/-) o Exploring participating debt o Staregic Partnerships ▪ Other Developers ▪ Contractors Bright Spots: o Demand remains very strong (Projected rental rates will increase) o Feds are rumored to lower rates in September and December 2024 o Community attractiveness just gets better Effective Federal Funds Rate 2022 -2024 Secured Overnight Financing Rate 2022-2024 10-Year Treasury 2022-2024 (Yahoo Finance) 4646 Dakota Street SE Prior Lake, MN 55372 ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT MEETING DATE: August 26, 2024 AGENDA #: 5A PREPARED BY: Casey McCabe, Community Development Director AGENDA ITEM: Development Update DISCUSSION: Introduction The purpose of this agenda item is to review the year to date residential and commercial development update as of July 31, 2024. History EDA Commissioners requested an update of residential and commercial activity at each meeting. Conclusion The attached memorandum provides a summary of the residential and commer- cial development in the City of Prior Lake as of July 31, 2024. 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 / www.priorlakemn.gov Memo Date: August 26, 2024 To: City of Prior Lake Economic Development Authority From: Casey McCabe, Community Development Director Subject: Residential & Commercial Activity Update Below is an update of the year to date residential and commercial development in the City of Prior Lake as of July 31, 2024. Single Family Dwellings 38 $18,308,085.00 48 $20,624,001.00 Townhouses (# units)4 $672,000.00 0 $0.00 Multiple Units 1 $28,733,056.00 0 $0.00 New Commercial Industrial & Commercial 2 $3,950,000.00 2 $5,194,460.00 Residential 591 $15,940,810.88 606 $10,293,505.59 Industrial & Commercial 10 $3,147,228.00 14 $1,075,739.00 tMechanical 564 $0.00 339 $0.00 ttMechanical (SF & TH)168 $0.00 192 $0.00 TOTALS 1,378 $70,751,179.88 1,201 $37,187,705.59 90.25% -23.96% 54.86% 192.56% n/a n/a 2024 Year to Date 2023 Year to Date New Residential 66.37% -12.50% Number of Permits % Increase / Decrease Increase/Decrease Declared Value % Increase / Decrease -11.23% 100.00% #DIV/0! t Mechanical permits include but are not limited to furnaces, water heaters, softeners, and fireplaces. They are flat-rate permit fees. 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 Additions and Alterations Number of Permits Declared Value -20.83% 100.00% #DIV/0! 0.00% -2.48% -28.57% Number of Permits Declared Value 14.74% 4646 Dakota Street SE Prior Lake, MN 55372 ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT MEETING DATE: August 26, 2024 AGENDA #: 5B PREPARED BY: Casey McCabe, Community Development Director AGENDA ITEM: Appoint Arts and Culture Committee Members DISCUSSION: Introduction The purpose of this agenda item is to approve a resolution reappointing Erin Belanger Braid, Alejandra Pelinka, and Jeanine Bigalk to the Arts and Culture Committee (ACC). Background ACC members Belanger Braid, Pelinka, and Bigalk were appointed to the ACC on November 1, 2021 to serve a term expiring on October 31, 2024. Members of the ACC serve three-year terms and are term limited to three terms, or nine years. Current Circumstances Belanger Braid, Pelinka, and Bigalk have all indicated interest in serving a sec- ond term on the ACC. The ACC Bylaws state, if a Committee member reaches the end of a term and is eligible for reappointment, the Committee member appointed by the EDA and the Committee Chair shall determine if eligible incumbents shall be put forward for reappointment or if the vacancy shall be opened for public application. Conclusion The ACC member appointed by the EDA and the Committee Chair and Vice Chair are recommending the reappointment of Belanger Braid, Pelinka, and Big- alk. ALTERNATIVES: RECOMMENDED MOTION 1. Motion and second, as part of the consent agenda, approving a resolution appointing Belanger Braid, Alejandra Pelinka, and Jeanine Bigalk to the Arts and Culture Committee. 2. Remove this item from the Consent Agenda for additional discussion. Alternative No. 1 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 24-04 EDA A RESOLUTION APPOINTING ERIN BELANGER BRAID, ALEJANDRA PELINKA, AND JEANINE BIGALK TO THE ARTS AND CULTURE COMMITTEE Motion By: Briggs Second By: Marco WHEREAS, As of October 31, 2024 the current terms of the City of Prior Lake Arts and Culture Committee (ACC) members Erin Belanger Braid, Alejandra Pelinka, and Jeanine Bigalk will expire; and WHEREAS, Belanger Braid, Pelinka, and Bigalk have served a three-year term on the ACC and are eligible for reappointment to a second three-year term; and WHEREAS, The ACC Bylaws state, if a Committee member reaches the end of a term and is eligible for reappointment, the Committee member appointed by the EDA and the Committee Chair shall determine if eligible incumbents shall be put forward for reappointment or if the vacancy shall be opened for public application; and WHEREAS, Belanger Braid, Pelinka, and Bigalk have indicated interest to serve a second three-year term on the ACC; and WHEREAS, The ACC member appointed by the EDA and the Committee Chair have determined Belanger Braid, Pelinka, and Bigalk should be put forward for reappointment. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The following individuals are appointed to fill the following term on the Arts and Culture Committee: Appointee Date Appointed Appointment Ends Term Limit Erin Belanger Braid November 1, 2024 October 31, 2027 October 31, 2030 Alejandra Pelinka November 1, 2024 October 31, 2027 October 31, 2030 Jeanine Bigalk November 1, 2024 October 31, 2027 October 31, 2030 PASSED AND ADOPTED THIS 26th DAY OF AUGUST 2024. VOTE Prchal Braid Briggs Boucher- Hoese Marco Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ ______________________________ Jason Wedel, Executive Director 4646 Dakota Street SE Prior Lake, MN 55372 ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT MEETING DATE: August 26, 2024 AGENDA #: 8A PREPARED BY: Casey McCabe, Community Development Director AGENDA ITEM: Resolution Approving a Request for 2025 EDA Tax Levy and Budget DISCUSSION: Introduction The purpose of this agenda item is to consider approval of the attached reso- lution approving the 2025 Prior Lake Economic Development Authority (EDA) tax levy and budget. History The EDA annually reviews and requests City Council approval of the EDA tax levy and budget. The EDA cannot levy a tax without city council approval, as Article 10.2 of the EDA Bylaws requires city council approval of the EDA annual budget. Current Circumstances City staff has proposed a draft 2025 budget for EDA review, which is summa- rized as follows: ➢ The budget includes estimated revenues of $439,388 and estimated expenditures of $724,838. ➢ Estimated revenues include an EDA tax levy of $405,000, interest earn- ings of $9,800 and facility rentals of $24,588, based on anticipated rental revenues from the 16298 Main Avenue SE property. ➢ The EDA tax levy is proposed to increase $15,000 over 2024. ➢ The budget includes a planned use of EDA fund balance of $285,450. ➢ The budget includes 50% personnel support for one staff member and 25% personnel support for two staff members. ➢ The budget includes a planned expenditure of $385,000 for property acquisition; a specific property(ies) has not been identified. ➢ The proposed 2025 budget includes a $150,000 expenditure in the Pro- fessional Services – General. $75,000 of this expenditure is to be used as matching funds for a CDA grant to analyze infrastructure to serve the orderly annexation area and $75,000 is included should the EDA wish to conduct or participate in any economic development related studies. Minnesota Statutes 469.107 provides authority to levy taxes for an Economic Development Authority. A city may, at the request of the authority, levy a tax in any year for the benefit of the authority. The tax must be not more than 0.01813 percent of estimated market value. Based on 2025 preliminary valua- tion data, Prior Lake is anticipating a total estimated market value of $6,504,177,300 which would allow for a maximum EDA tax levy of $1,179,207. City staff is proposing an EDA tax levy of $405,000. 2 Arts and Culture Committee Funding The EDA established the Arts and Culture Committee (ACC) in 2021. Since that time, the EDA has annually allocated a portion of its Professional Services – General funding to the ACC to help achieve mutually agreed upon strategic priorities. Staff is requesting direction from the EDA related to a funding alloca- tion to the ACC in 2025. ISSUES: The recommended 2025 EDA budget and tax levy will be presented to the City Council as they consider adoption of the preliminary 2025 budget and tax levy at their September 24, 2024 meeting. FINANCIAL IMPACT: Staff is estimating the EDA 2024 year-ending fund balance will be $1,754,000; however, $1,316,000 of this balance is restricted as it represents assets held for resale. The estimated EDA 2024 year-ending cash balance is $483,000. The proposed budget estimates a 2025 year-ending fund balance of $1,468,000 with $1,316,000 represented by assets held for resale. Should the EDA move forward with the sale of the 4662 and 4664 Dakota Street properties as anticipated, the fund balance represented by assets held for resale will de- crease and the available cash balance will increase. ALTERNATIVES: 1. Motion and a second to approve a resolution requesting City Council ap- proval of the proposed 2025 EDA tax levy of $405,000 and a total budget of $724838. 2. Motion and a second to approve a resolution requesting City Council ap- proval of alternative 2025 EDA tax levy and budget amounts as determined by the EDA. RECOMMENDED MOTION: As determined by the EDA. ATTACHMENT: 1. Proposed 2025 EDA Budget 08/09/2023 Economic Development Authority 2020 2021 2022 2023 2024 2025 CHANGE AMENDED AMENDED AMENDED AMENDED AMENDED PROPOSED 2024 to GL NUMBER DESCRIPTION BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET 2025 Dept. 46500.00 - ECONOMIC DEVELOPMENT Revenue 240-00000.00-31010.00 Current Property Taxes - General Purpose 274,750 349,750 360,000 370,000 390,000 405,000 15,000 240-46500.00-33610.14 County-City Aids/Grants - Operating EDA 0 240-46500.00-34760.02 Facility Rental - EDA 24,360 24,588 24,588 24,588 0 240-46500.00-36220.14 Prof Service Fee Deposit - EDA 0 240-00000.00-36210.00 Interest Earnings 7,560 5,300 5,400 2,600 3,700 9,800 6,100 240-00000.00-39203.00 Transfer from Other Funds 161,250 0 Total Revenue 443,560 355,050 389,760 397,188 418,288 439,388 21,100 Expenditures 240-46500.00-51100.01 Wages - Full Time 103,534 106,202 112,027 114,525 124,287 128,154 3,867 240-46500.00-51100.05 Wages - Commissioners 3,000 3,000 3,000 3,000 3,000 3,000 0 240-46500.00-51110.01 Overtime - Full Time 240-46500.00-51208.01 Sick Leave - Buy Down 0 0 0 0 1,421 1,331 (90) 240-46500.00-51301.00 Accrued Comp Time 240-46500.00-51400.00 Compensated Absences 621 637 728 744 808 961 153 240-46500.00-51450.00 Social Security Contributions 6,606 6,771 7,132 7,287 7,980 8,214 234 240-46500.00-51451.00 Medicare Contributions 1,545 1,583 1,668 1,704 1,866 1,921 55 240-46500.00-51460.00 PERA Contributions 7,825 8,025 8,462 8,649 9,381 9,672 291 240-46500.00-51470.00 Health Insurance 8,232 7,850 8,455 10,643 13,493 13,038 (455) 240-46500.00-51472.00 Retiree HCSP Contributions 240 240 240 300 300 360 60 240-46500.00-51473.00 Dental Insurance 540 540 540 540 457 489 32 240-46500.00-51474.00 Life Insurance 68 68 68 68 68 68 0 240-46500.00-51477.00 Workers Compensation Insurance 582 628 737 655 773 680 (93) 240-46500.00-52010.00 Office Supplies 0 240-46500.00-53020.00 Legal Services 2,000 2,000 1,000 1,000 1,000 1,000 0 240-46500.00-53100.80 Professional Services - General 311,492 380,000 78,300 75,000 75,000 150,000 75,000 240-46500.00-53210.00 Telecommunications 250 250 0 240-46500.00-53310.10 Training and Employee Development 500 500 500 500 500 500 0 240-46500.00-53510.00 Required Notice Publication 0 240-46500.00-53510.01 Maint Agreements Misc Bldg & Structures 5,000 5,000 5,000 1,500 (3,500) 240-46500.00-54310.00 Memberships and Subscriptions 500 500 500 500 500 250 (250) 240-46500.00-54320.00 Miscellaneous Expense 500 500 10,500 19,000 19,000 18,700 (300) 240-46500.00-55040.00 Projects - Property & ROW Acquisit'n 385,000 385,000 385,000 385,000 0 240-46500.00-55050.00 Projects - Professional Services 0 Total Expenditures 448,035 519,294 623,857 634,115 649,834 724,838 75,004 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 24-05 EDA A RESOLUTION APPROVING THE 2025 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 Prior Lake Economic Development Authority (EDA), levy a tax in any year for the benefit of the EDA in an amount not to exceed 0.01813 percent of estimated market value; and WHEREAS, The EDA proposes a 2025 tax levy for economic development purposes in the amount of $405,000; and WHEREAS, The EDA proposes a 2025 annual budget in the amount of $724,838. 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 $405,000 to be collected in 2025 pursuant to Minnesota Statutes 469.107. 3. The EDA requests that the Prior Lake City Council adopt the 2025 EDA annual budget in the amount of $724,838. Passed and adopted this 26th Day of August 2024. VOTE Prchal Braid Marco Briggs Boucher-Hoese Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ ______________________________ Jason Wedel, Executive Director 4646 Dakota Street SE Prior Lake, MN 55372 ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT MEETING DATE: August 26, 2024 AGENDA #: 8B PREPARED BY: Casey McCabe, Community Development Director AGENDA ITEM: Community Artist Sculpture DISCUSSION: Introduction The Prior Lake Arts and Culture Committee (ACC) identified a 2024 Community Artist through a Request for Qualifications process in the spring of 2024. A Com- munity Artist has been selected to: ● Research and consider the local history of Prior Lake while developing project design. The concept can consider, for example: a historical event, theme, person, culture, or moment. ● Provide a conceptual design for the sculpture, with up to three revisions, for approval by the Committee. ● Identify a preferred location(s) for the artwork. The City will initially pro- vide potential locations and will review and approve the Artist’s desired location(s). ● Fabricate and install a permanent outdoor public art sculpture that re- flects the history of Prior Lake in downtown Prior Lake, this may include one piece or multiple small-scale pieces. All mediums will be considered. The artwork should have a minimum life span of 10 years and require minimal maintenance. ● Participate in promotional videos, materials, interviews, etc. to document and promote the artwork. The 2024 Community Artist has researched the local history of Prior Lake, pre- pared a concept design and identified a preferred location with assistance from the ACC. City staff will present the artists conceptual design to the EDA on Au- gust 26th for review and approval prior to the Community Artist engaging in the next steps, which include fabrication and installation. ALTERNATIVES: Discussion Only