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HomeMy WebLinkAboutItem 09January 3, 2014 Item No. 2014 -16 Strategic Plan for Economic Development January 6, 2014 Council Meeting Proposed Action Staff recommends adoption of the following motion: Move to accept the 2014 -16 Strategic Plan for Economic Development as recommended by the Economic Development Commission. Passage of this motion will result in this recommended plan becoming the basis for the City's Economic Development Work Program for the next three years. Overview The City of Lakeville has been preparing Strategic Plans for Economic Development since 1995 with plans being reviewed and updated every 2 -3 years. Craig Rapp LLC was retained to facilitate the process for the current plan since his firm had worked with the City to complete the Envision Lakeville Community Visioning process earlier in 2013. The EDC began the process with a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis, and reviewed this analysis along with identifying the highest priority issues facing the City at a half - day work session on October 8T h . The EDC met a second time on November 12Th to identify the Strategic Priorities for further consideration. A portion of this work session included a joint work session with the City Council. This process resulted in identifying the following six Strategic Priorities: 1) High Skill - High Wage Job Creation, 2) Infrastructure to Leverage Opportunities, 3) Business Retention and Expansion, 4) Incentives and Tools to Achieve Success, 5) Enhancing a Pro Business Environment, and 6)High Density Housing. The EDC also recommended Key Outcome Indicators for each priority and Strategic Initiatives to ensure that priorities are addressed and Key Outcome Indicators are achieved. The EDC recommended acceptance of the attached strategic plan at their November 26' Meeting. Primary Issues to Consider • What is the next step in the process? Staff will begin preparing a focused work plan for each of the adopted initiatives and review it with the EDC. Supporting Information • Proposed 2014 -2016 Strategic Plan for Economic Development Summary Report David L. Olson Community & Economic Development Director Financial Impact: $ 0 Budgeted: Y/N Source: Related Documents (CIP, ERP, etc.): Notes: CITY OF LAKEVILLE JOINT CITY COUNCIL /EDC WORK SESSION MINUTES November 12, 2013 Mayor Little called the meeting to order at 5:05 p.m. in the Marion Conference Room at City Hall. Council Members Present: Swecker, LaBeau, Anderson and Mayor Little; Council Member Davis participated via videoconference EDC Members Present: J. Matasosky, J. Emond, G. Tushie, S. Longie, J. Schubert; and T. Bornhauser Staff Present: Steve Mielke, City Administrator; Dave Olson, Community and Economic Development Director; Adam Kienberger, Economic Development Specialist; Judi Hawkins, Deputy City Clerk 2. Citizen Comments There were no citizen comments. 3. Joint discussion regarding Strategic Plan for Economic Development The Lakeville Economic Development Commission had previously discussed the next three -year Strategic Plan for Economic Development. Strategic Plans are prepared and adopted by the City for the purpose of prioritizing efforts and programs relative to economic development. The EDC reviewed the strategic priorities that had been identified at their October 8, 2013 work session, including Key Outcome Indicators and Strategic Initiatives. The discussion was facilitated by Craig Rapp of Craig Rapp, LLC. He stated that the EDC had utilized the Envision Lakeville results as a guide for the work on the Strategic Plan. EDC and City Council members focused on the six strategic priorities which had been identified, including Key Outcome Indicators and Strategic Initiatives to recognize and measure success. 1) High quality job creation EDC and Council preferred this be changed to, "high skill, high wage" job creation. The goal is the addition of 200 jobs with an annual salary of over $60,000 within a three -year period. Some of the initiatives would be to conduct a market analysis to determine target industries and markets and to examine incentive package for these companies. Little asked how the EDC arrived at this specific salary. Matasosky stated that the average household income is $90,000, but a salary of $60,000 would help create opportunities for head of household jobs for residents. Mielke stated that this goal helps prioritize economic incentives so that funds can be used to target companies with high paying jobs. City Council/ EDCJoint Meeting November 12, 2013 Page -2- 2) Infrastructure to leverage opportunity Key outcomes would be to monitor infrastructure to ensure that it meets or exceeds the needs of over 95% of business prospects. Also, that 90% of the time, Dakota County shares costs for public improvements on a proportional basis. Different funding or financing options might also need to be explored in order to be prepared with a response if a potential new business submits a proposal or a request for other incentives. Swecker asked if the EDC had discussed technology infrastructure. Matasosky stated that the availability of technology was an important part of the plan. Anderson added that Lakeville has some distinctive features that should be leveraged and marketed such as the airport. 3) Business retention and expansion During the three -year period of the strategic plan, the City will monitor existing businesses for square footage expansions and employment growth, with a goal of 300 additional jobs and retention of 90% of existing businesses. EDC and Council believed it is important to expand and enhance the business outreach program to provide a personal contact or visit to business on a regular basis. Outreach can be done by staff or by an EDC or Council member. Alternative methods of contact can be explored. Davis suggested the Council become more pro- active with the business community. Little believes a structured, well - prepared approach would get the best results. Anderson added that developing relationships and following up with the businesses' concerns is also essential. 4) Incentives and tools to achieve success One measurement of success would be three new businesses choosing to locate or expand in Lakeville based on leveraged financial incentives over the three -year period. Initiatives to consider might be to identify Lakeville's advantages and drivers of success, identify all the options available as incentives, expand the marketing strategy, establish a consensus on incentive policies, and identify priority locations for incentive use. It was suggested that Dakota County could be invited to become a more active partner. Davis added that resources need to be maximized and new and unique incentives explored. LaBeau stated that simplifying the process is important for developers, as was learned through the developers' forum. 5) Creating a pro-business environment Surveys could be conducted of the real estate development community and the existing business community in order to measure satisfaction. Success would be measured with a 95% favorable approval rating from surveyed businesses. Anderson suggested revised wording from "create" to "enhance" the business friendly climate. Swecker asked if businesses are surveyed after they have gone through the development or building process to determine areas for improvement. Staff and EDC will resume sending brief surveys to new commercial /industrial businesses on a regular basis. City Council IEDCJoint Meeting November 12, 2013 Page -3- 6) High density housing The three -year strategic plan recommends 12 scattered high density housing sites by 2016. This would require re- guiding or rezoning of land in commercial /industrial zones in order to allow high density housing. Tushie stated that high density can imply various lifestyles and types of housing, but includes high -end, luxury housing, often occupied by empty- nesters, near retail opportunities. Swecker asked what the current market is for high density. Tushie stated that people want to have the option of living near their work, or near public transit, so those amenities are critical. Council members did not totally support high density housing in industrial zoning because of potential incompatibility. High density can indicate subsidized or market rate units; allowing high density housing in commercial and industrial areas provides additional opportunities and options. To recap, Mr. Rapp stated that the Strategic Plan for Economic Development consists of priorities, indicators of success, and a set of initiatives. Staff will discuss an action plan with the EDC. 3. Adjourn Mayor Little adjourned the meeting at 6:15 p.m. Respectfully submitted, J J Hawkins, Deputy Clerk Ma ittle, Mayor 0 Economic Development Commission Strategic Plan Outline 2014 -2016 Strategic Key Outcome Measure Target Strategic Initiatives Priority Indicator (KOI) High Skill, High High quality jobs New jobs over 200 btwn 1/1/14- a) Conduct mkt. analysis to determine target Wage Jobs $60k 12/31/16 mkts. - special emphasis- higher ed b) Develop strategy to leverage existing business partners, vendors, alliances for job creation c) Correlate incentive packages for high skill /high wage jobs with overall incentive strategy Infrastructure to Infrastructure Developer need 95% of time- has a) Develop detailed infrastructure plans to Leverage capacity and meet developer needs Opportunities mechanisms to b) Explore infrastructure financing methods meet needs c) Analyze provider -city partnership /relationship opportunities County support Cost sharing County supports & d) Initiate and participate in city- county shares cost 90% of discussions time Business Existing businesses Square footage 500k sq. ft. added a) Expand /enhance the business outreach Retention and of expansions 1/1/14 — 12/31/16 program Expansion Existing businesses Employment 300 jobs added b) Analyze expanded methods for increased growth 1/1/14 — 12/31/16 business contacts Existing businesses Retention 90 % of existing c) Evaluate city business expansion non - retail requirements for streamlining businesses retained opportunities Incentives and New business Leveraged 3 new businesses a) Expand marketing strategy to ensure Tools to Achieve development investment via tools /leverage alignment w/ Lakeville success factors and Success btwn 1/14 -12/16 current incentive policies b) Establish EDC /City Council consensus on incentive policies, assumptions, ROI, priority locations Enhancing a Pro- RE Developers Satisfaction w/ 90% satisfied- a) Continue and enhance surveys of Business Climate city processes survey contractors, developers, and businesses b) Develop a concise "development review process" document Existing businesses Business 90% good place to c) Conduct a professionally administered environment operate, expand, and statistically valid business survey locate every 3 years d) Create "internal brand champions" to market /communicate Lakeville's benefits internally High Density Housing Sites reguided for 12 scattered sites a) Adopt city "housing goals" Housing high density btwn 1/1/14- b) Develop an economic development 12/31/16 housing strategy C/I zoned districts C/I districts with All C/I zones c) Determine C/I high- density housing hsg allowed changed to permit demand hsg by 12/31/16 d) Create a plan to address expanded housing options in C/I zoning districts Economic Development Commission 2014 -2016 Strategic Plan for Economic Development Summary Report November 2013 CRAIGIRAPP,LLC IMPROVING ORGANIZATIONS & THE PEOPLE WHO LEAD THEM Lakeville EDC Strategic Planning Summary November 2013 Date: November 22, 2013 To: David Olson, Community & Economic Development Director From: Craig Rapp Subject: Strategic Planning Summary The following is a summary of the strategic planning sessions held at City Hall on October 8, and November 12, 2013 with the Lakeville Economic Development Commission, City Administrator and EDC staff. The sessions focused on establishing strategic direction and focused outcomes. A facilitated process was used that produced six strategic priorities, a set of key outcome indicators for each priority, and a list of strategic initiatives that will guide follow -up action. Prior to the meeting, each participant was asked to complete a questionnaire - providing opinions on the strengths, weaknesses, opportunities and threats (S.W.O.T.) facing the community and organization. In addition, they were also asked to identify the highest priority issues confronting the city. The group process included three rounds of review and discussion: In the first round, the group identified the most frequently mentioned attributes in each category. In the second round, the groups compared strengths with opportunities and weaknesses with threats- to determine which opportunities would maximize strengths, and which weaknesses would be exacerbated by the threats. From this round, each group identified strategic priorities for further consideration. The full group then engaged in a discussion centered on determining which priorities were most important- based upon both the SWOT analysis and their own sense of community needs. In addition, they considered the Envision Lakeville guidance regarding economic sustainability - listed below: • Emphasize the attraction of businesses that can provide higher skill, higher wage, head of household jobs. • Retain existing businesses and facilitate growth and expansion • Provide a broad range of financial incentives to attract businesses that employ higher skilled, high wage jobs. • Support the aggressive transportation program that is in place to enhance economic development opportunities What emerged is a set of six strategic priorities. The priorities are: 2 Lakeville EDC Strategic Planning Summary November 2013 Strategic Priorities 1. High Skill, High Wage Job Creation 2. Infrastructure to Leverage Opportunities 3. Business Retention and Expansion 4. Incentives and Tools to Achieve Success 5. Enhancing a Pro Business Environment 6. High Density Housing The next step in the process was the development of Key Outcome Indicators (KOI's) for each strategic priority. Key Outcome Indicators reflect performance connected to a desired outcome. They are defined or each priority and include specific measures and targets related to a desired end state. The KO I's are: Key Outcome Indicators 1. High Skill, High Wage Job Creation a) Create an additional two hundred jobs with an average salary of $60,000 or greater by 12/31/2016 2. Infrastructure to Leverage Opportunities a) The City has the capacity and mechanisms to meet the needs of 95% of business prospects. b) Dakota County is engaged and supportive of our Economic Development efforts - reflected in polices and cost sharing for public improvements that impact our projects. 3. Business Retention and Expansion a) Existing businesses have expanded by 500,000 square feet by 12/31/2016 b) An additional 300 jobs have been added at existing businesses by 12/31/2016 c) 90% of non - retail businesses have been retained between 1/1/2014- 12/31/2016 Lakeville EDC Strategic Planning Summary November 2013 4. Incentives and Tools to Achieve Success a) Three new businesses choose to locate /expand based upon leveraged financial incentives by 12/31/2016 5. Enhancing a Pro Business Climate a) 90% of real estate developers doing business in Lakeville indicate satisfaction with city processes- determined by survey b) 90% of existing businesses indicate that Lakeville is a good place to operate, expand and /or locate a business- determined by survey 6. High Density Housing a) 12 scattered sites reguided /zoned for high density housing by 12/31/2016 b) High density housing is allowed in C/I zoning districts by 12/31/2016 Following the development of K0I's, the group developed a preliminary set of strategic initiatives. Strategic initiatives are focused activities that ensure that priorities are addressed and that outcomes specified in the KOI's are achieved. Strategic Initiatives 1. High Skill, High Wage Job Creation a) Conduct a market analysis to determine target markets with a special emphasis on higher- education b) Develop a strategy to leverage existing business partners, vendors, and alliances for job creation c) Correlate incentive packages for high skill /high wage jobs with overall incentive strategy 2. Infrastructure to Leverage Opportunities a) Develop a detailed infrastructure plan to meet developer needs b) Explore infrastructure financing methods c) Analyze provider -city partnership /relationship opportunities to provide for infrastructure needs d) Initiate and participate in city - county economic development discussions 4 Lakeville EDC Strategic Planning Summary November 2013 3. Business Retention and Expansion a) Expand and enhance the business outreach program b) Analyze expanded methods for increased business contacts c) Evaluate city business expansion requirements- for streamlining opportunities 4. Incentives and Tools to Achieve Success a) Expand the marketing strategy to ensure alignment with Lakeville's success factors and current incentive policies b) Establish EDC /City Council consensus on incentive policies, assumptions, ROI, and priority locations 5. Enhancing a Pro Business Climate a) Continue and enhance surveys of contractors, developers, and businesses b) Develop a concise "development review process" document c) Conduct a professionally administered and statistically valid business survey every three years d) Create "internal brand champions" to market and communicate Lakeville's benefits internally 6. High Density Housing a) Adopt city "housing goals" b) Develop an economic development housing strategy c) Determine C/I high - density housing demand d) Create a plan to address expanded housing options in C/I zoned districts Next Steps To successfully address the strategic priorities and reach the intended outcomes, a focused work plan will need to be developed. Following the adopted strategic initiatives, detailed action plans will be developed for each - specifying steps, timing and accountabilities. The strategic plan, while subject to periodic review and revision over the performance period, provides a solid foundation for action and accountability. Lakeville EDC Strategic Planning Summary November 2013 Appendices SWOT Analysis Data In order to clarify the strategic challenges confronting the community, the EDC, City Administrator and EDC staff conducted a review of the current operating environment using a SWOT analysis methodology. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. The internal strengths and weaknesses and the external opportunities and threats were assessed. This was done in two parts: (1) in advance of the retreat, all participants completed a SWOT questionnaire; and (2) the group participated in a facilitated process that used the questionnaire results as the basis for analysis and decision - making. The following Appendices contain both questionnaire responses (Appendices I -V), and the strategic challenges that emerged as a result of the process (Appendix VI). 0 Lakeville EDC Strategic Planning Summary November 2013 Appendix I SWOT Results - Strengths Most frequently mentioned: • Schools and quality education • Location • Quality of life /community feel /reputation • Options for development • Transportation access and options Aggregate responses • Recognized Statewide and possibly upper Midwest to have a good school district. • Presently experiencing growth in residential units • Access to I35 • Good number of developable industrial /commercial sites • Part of an internationally known region for business /commerce • Geographic Location and proximity to major transportation corridors • Educated work force • Quality schools • Desirable neighborhoods • Location • Schools • Parks • Interstate access • High quality of life • Land availability • Quality of Schools • Fiscally responsible government • Access to major transportation hubs. • Location - proximity to Twin Cities yet suburban feel. 7 Lakeville EDC Strategic Planning Summary November 2013 • Community - strong values, security and quality • Strong local schools • Location • Room for growth and development • Strong community feel • Good schools • Parks • Housing options • Great options for road rail and air! • Resident base - labor force, volunteerism, active community. • Good schools. • Available land for development, zoned and located properly. • Great access to Twin Cities markets and regional markets. • Transportation system is good. • Great balance of commercial / residential and industrial development - SELDOM seen in other communities. • Lakeville is viewed as a great place to live and raise a family. • Large amount of land with sewer /water access • Projected population growth • Easy access to transportation major systems- bus station, hwys, etc • Location to major interstate • Modest but stable industrial park • Quality school district • Parks, trails, lakes, golf courses • Abundant land for development • Geographical proximity to I -35 • Existing partnerships and relationships • Professional staff and stable political climate Lakeville EDC Strategic Planning Summary November 2013 Appendix II SWOT Results - Weaknesses Most frequently mentioned: • Image • Education /Schools • Factors out of our control • Site /building concerns • Workforce • Incentives /Business attraction goals Aggregate responses • Not recognized globally. • Financial challenges within school district • Presently lack support from the county to get a deal done • Limited available buildings • Potential threats to quality schools as a result of insufficient funding • Lack of different styles, types and more affordable housing choices • Lack of a sufficient number jobs that match the education level of average residents • Access to high tech • Development costs and process • Lack of compelling /distinguishing feature that sets Lakeville apart • Lack of incentives for business - what's in our "tool box'. • Citizen's survey - only 32% said employment opportunities in Lakeville were good. • Citizens survey - 75% indicated job growth too slow • Citizen's survey - 72% indicated jobs were essential or very important for the future. • Lack of retail development. • Low profile - unknown benefits • Reputation of high costs to develop land commercially • Reputation of being difficult to move the process along in development of both commercial and residential. • Lack of diversified housing - primarily entry market and apartments. Lakeville EDC Strategic Planning Summary November 2013 • No defined economic development incentive plans / tools. • Perceived by real estate and TC business community as "way out there." • No land zoned for high density residential • High cost of doing business in Lakeville • No densely populated cities south of Lakeville • No policies in place to financially assist potential development • Not willing to provide infrastructure to encourage development such as roads and utilities • Inability to attract businesses (competition) • Incentives • Focus on who we want to be /or what business types we would like to attract • Perception of being "too far out" geographically • Lack of ingenuity and too much risk aversion • Slow to adapt to change 10 Lakeville EDC Strategic Planning Summary November 2013 Appendix III SWOT Results - Opportunities Most frequently mentioned: • Educate community, city staff and business partners on how best to encourage economic growth • Promote high skill jobs, education and housing options • Continue to pursue redevelopment of existing commercial /industrial /housing areas • Continue to promote commercial and industrial growth by providing necessary tools • Promote airport expansion • Redevelopment of downtown Aggregate responses • Developing the most efficient economic development, local government department in the upper Midwest. • Continuing to turnover committee members. • Educating the city on how Lakeville is positioned within a robust region and how that translates into activity. • To attract additional higher skilled and high wage job to the community • To continue to pursue redevelopment opportunities for the redevelopment of Downtown properties • To offer incentives, financial and otherwise, to businesses willing to create head -of- household jobs • To work with residential developers to provide a wide range of housing choices • Availability of sites • Access to the twin cities • Access to interstate • Expansion of usage of local airport. • Increase the variety of housing options available including work force housing. • To attract high quality business to our community. • To foster growth of current business partners. 11 Lakeville EDC Strategic Planning Summary November 2013 • Get crystal clear on what we want to be in the next 10, 20 and 30 years and make sure we are willing and able to attract the right businesses to complement that vision. What will County Road 70 look like in 10 years? • Get the runway at the airport extended. • Existing Industrial and commercial base to build from. (Expansion of existing businesses and engage them to recruit others - vendors, competitors, etc.) • Desire of young people to want to live and work here. Let's get them suitable and affordable housing stock. • Engaged City Council and elected officials who REALLY want what is best for Community in the long run. • Staff is also engaged and enthusiastic - but need the tools and room to work opportunities. • To utilize the EDC and Lakeville's "Thrive" marketing program to promote our town! • High density housing • Business park growth • Industrial park growth • Higher education facilities • Business growth (land mass) • Raw land available to meet business growth plans • Quality of life (Parks, Lakes, trails, etc.) • Growing /maturing business relationships • Capitalize on fast residential growth 12 Lakeville EDC Strategic Planning Summary November 2013 Appendix IV SWOT Results- Threats Most frequently mentioned: • A lack of existing robust infrastructure (fiber, roads, etc.) • Focus on retention of existing business • Development related costs (fees, taxes, etc) • Not having a streamlined process • Highly incentivized business climate Aggregate responses • Not looking to change /re- evaluate. Becoming static. • Comparable cities in the region competing for the same business development projects • Another housing bubble burst • Insufficient funding for needed state and county highway improvement projects • An unwillingness to fund "quality of life" type facilities, infrastructure improvements and programs at the local level • Incentives used by other communities • Land cost • Budget policies, economic policies and financial policies that are enacted by our county, state and federal governments that will impact Lakeville's ability to thrive. • Loss of existing businesses. • Less than attractive state tax structure. • Over protective local attitude • Economic challenges • Workforce needs and external pressures to develop housing based on current /short- term strategies. 13 Lakeville EDC Strategic Planning Summary November 2013 • Slow process to react to opportunities. "Always starting from scratch." • Empty bag of business incentives available to new inquiries and existing business expansions. • A changing tax / city operating budget - higher costs, higher maintenance can lead to higher taxes, and inability to draw new businesses. • Cities that surround Lakeville that are closer to the metro that draw on a population base to promote commercial /industrial growth • High cost of doing business in Lakeville -city fees, infrastructure costs, low density development • Incentives neighboring cities are offering • Business leaving the state • Taxes • Road systems - keeping pace with growth • Lack of competitiveness • Stagnation /lack of uniqueness • Political change /instability 14 Lakeville EDC Strategic Planning Summary November 2013 Appendix V Highest Priorities - from Questionnaire Responses • Increasing the operating budget • Building capacity so that on a moments notice, a deal could be executed. • Staff participate in a national recruitment trip. • To continue to aggressively market the City for business development • To work with local, regional and state partners to provide appropriate incentives for business development projects that meet the City's economic development vision and goal. • To continue to advocate for funding for needed county and regional transportation improvement and expansion projects Lakeville • Technology upgrades • Tax climate • Transportation • Develop marketing tools and financial incentives that will place Lakeville as one of the first communities that developers, site selectors and business owners will look at locating. • Develop business incentive tools to help revive and attract new business opportunities • Remain attractive to existing business with local tax structure • Raise profile of Lakeville's reputation to help attract new business formation • Put the "Tools" in our toolbox to work for us in attracting some major tenants in Lakeville. • County Rd 70 development • Development around 35 and Cnty Rd. 70. • Create a plan and process to be "The number one choice" as a place to locate or expand a business. 15 Lakeville EDC Strategic Planning Summary November 2013 • Identify a way to respond to business inquiries, in their language, and reacting to their needs, on their timeframe. • Create an incentive model that studies ALL impacts of a project and potential incentives to create a more consistent and productive process for the client and the City of Lakeville. • High density housing • Policies to promote commercial industrial growth • Get word out to development community that Lakeville is OPEN for business • Strengthen Incentives for businesses • Become business friendly • Fill toolbox • Strengthen marketing (Products) • Be Pro - active. Don't wait for the businesses to come to us. • Refine Lakeville's "brand" and continue marketing /relationship building • Increase head of household jobs • Facilitate new office park development and development ready industrial park sites 16 Lakeville EDC Strategic Planning Summary November 2013 Appendix VI Strategic Challenges and Opportunities The group assessed how organizational strengths could leverage opportunities and how weaknesses could be exacerbated by threats. This provided a context for the leadership team to establish the six Strategic Priorities STRATEGIC ISSUES TO MINIMIZE /AVOID • Cost of development (combines both external and internal issues) • Image /perception (combines an external threat w/ issue that can be addressed via internal action) • County's negative impact on development (external situation which impacts /limits success) STRATEGIC ISSUES TO MAXIMIZE • High quality /high skill /high tech (leverages good schools /quality of life) • Housing density /diversity (leverages transportation options /access) • Educate community regarding economic development (leverages motivated & skilled staff, EDC) • Economic development incentive toolbox (leverages motivated & skilled staff) • Match infrastructure with goals 17