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03-25-14
Lake lle AGENDA Economic Development Commission March 25, 2014 — 4:30 p.m. City Hall, Marion Conference Room 1. Call to order 2. Approval of February 18, 2014 minutes 3. Review of Proposed Tax Increment Financing Assistance for Proposed Menasha Packaging LLC Expansion 4. Discussion of 2014 -16 Strategic Plan for Economic Development Work Program 5. Directors Report 6. Adjourn Attachments February, 2014 Building Permit Report February 2014 Foreclosure Report "Shakopee is rethinking tax incentives for prospective employers," StarTribune 2/20/2014 "Brooklyn Park targets `good' jobs along 610," St. Paul Business Journal 2/28/2014 "Companies announce 34 expansion projects in 4 th quarter," Minnesota News Release 3/3/2014 "State employers add 600 jobs in January," Minnesota News Release 3/13/2014 CITY OF LAKEVILLE ECONOMIC DEVELOPMENT COMMISSION MEETING MINUTES February 18, 2014 Chair Starfield called the meeting to order at 4:30 p.m. in the Marion Conference Room at City Hall. Members Present: Comms. Starfield, Matasosky, Schubert, Longie, Emond, Akason, Vlasak (5:15 p.m.), Mayor Matt Little, Ex- officio member Lakeville Area Chamber of Commerce Executive Director Todd Bornhauser, Ex- off icio member City Administrator Steve Mielke. Members Absent: Comms. Smith, Tushie. Others Present: David Olson, Community & Economic Development Director; Adam Kienberger, Economic Development Specialist; Mark Ulfers, Andrea Brennan, Leah Petricka, Dakota County CDA; Mary Bujold, Maxfield Research. 2. Approval of January 28, 2014 meeting minutes Motion Comms. Matasosky / Emond moved to approve the minutes of the January 28, 2014 meeting as presented. Motion carried unanimously. 3. Presentation of Dakota County Comprehensive Housing Study Ms. Bujold of Maxfield Research reviewed the Dakota County Comprehensive Housing Study materials with a specific focus on Lakeville trends and demographics. She noted that there continues to be strong growth and demand for traditional housing, but there is also a strong demand for special needs housing in Lakeville. The EDC discussed current housing trends and development patterns based on the statistics presented in the study. Ms. Bujold noted that it is important to keep a broad spectrum of housing in the community. 4. Discussion of 2014 -2016 Strategic Plan for Economic Development Work Program Mr. Kienberger provided an update on the next steps for the 2014 -2016 Strategic Plan for Economic Development. A revised Work Plan was discussed based on key Strategic Initiatives from the Strategic Plan Outline document and comments from the January EDC meeting. The EDC clarified the term "higher education" in Strategic Priority 1 to mean an increased focus on attracting higher education providers and partnerships. • Economic Development Commission Meeting Minutes, February 18, 2014 _ Page 2 Motion Comms. Longie /Emond moved to proceed with the 2014 Strategic Plan for Economic Development Work Plan as proposed. Motion carried unanimously. Mr. Olson added that based on this direction, staff will include target dates for meeting the action items outlined in the work plan. Progress will be noted at monthly EDC meetings 5. Director's Report Mr. Olson reviewed the Director's Report and highlighted the upcoming Open To Business event, Realtors Forum, and an upcoming discussion on the Menasha Packaging TIF proposal. 6. Adjourn Meeting adjourned at 5:45 p.m. Respectfully submitted by: Aaam Kienberger, Kecoraing Secretary gem No. Lc�kevrIle City of Lakeville Community & Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community and Economic Development Director// Copy: Steven Mielke, City Administrator Adam Kienberger, Economic Development Specialist Date: March 21, 2014 Subject: Menasha Packaging Co. Tax Increment Financing Request Menasha Packaging contacted the City in late 2013 to present plans for a proposed123,000 square foot expansion of their 238,000 square foot manufacturing facility located at 8085 220 Street West. Menasha is experiencing considerable growth and needs to add additional warehouse, manufacturing, and office space at their Lakeville facility. The company has submitted a request for Tax Increment Financing (TIF) to assist in the $1.3 million TIF eligible site development costs associated with the project. Menasha Packaging has operated in Airlake since 1970 as a packaging manufacturing facility and currently has 221 employees with an annual payroll of approximately $15.2 million. In addition to retaining the existing 221 jobs in Lakeville, the proposed expansion will create an additional 15 jobs within the next two years. The wage rates for the new jobs will range from $15 - $20 per hour for the 10 warehouse jobs and from $48,000 to $80,000 for the five salaried positions. Menasha employees also receive 401 K, vacation, health insurance educational opportunities and other benefits. One of the requirements of the TIF statutes is that the City prepare a Tax Increment Financing Plan. Attached is a copy of the TIF Financing Projections for the Menasha Project as prepared by Springsted Inc. and dated March19, 2014. The City designated most of Airlake Industrial Park as a Redevelopment Project Area in 1984 and has approved a number of TIF Districts for various projects over the years. The primary purpose of designating this redevelopment project area was to provide the impetus for private development, maintain and increase employment, and to increase the tax base for the City. The last new TIF District in the industrial park was created in 1998 for the DHY project (now owned by Midwest Veterinary Supply). The proposed Menasha expansion will involve a 123,000 square foot expansion to the west of their existing manufacturing facility. The current total Estimated Market Value of the Menasha property for taxes payable in 2014 is $4,477,700. The plans for the proposed expansion were provided to the County Assessor's Office and it was determined that the Estimated Market Value of the Menasha site upon completed of the expansion project will be $8 -8.75 million. Based on this range of market values, the amount of available tax increment that would be available to assist the project using 95% of available captured increment is estimated to be between $527,000 and $626,000 over the next 11 years. This proposed level of financial assistance is considered appropriate given the total investment being made by the company and the number of new jobs along with the number of existing jobs that will be retained. Staffs analysis of this proposed project also indicates that it is consistent with the City's Business Subsidy and TIF policies, and thus recommends approval of the proposed level of financial assistance for the proposed Menasha Packaging Co. LLC expansion. Representatives of Menasha will be in attendance at the Work Session to answer questions specific to their business growth and expansion plans and Mikaela Huot from Springsted will be in attendance to answer questions regarding the TIF process. The City Council is scheduled to discuss this project at their March 24th Work Session and will hold a public hearing on this proposed TIF Project on Monday, April 7tn ACTION REQUESTED Provide any questions or comments on the proposed TIF assistance for the Menasha Packaging Co. project and forward a recommendation to the City Council. Exhibit I -B Map of Boundaries of Proposed Tax Increment Financing (Economic Development) District No. 18 Menasha Packaging Company Location SPRINGSTED Page 18 Disclaimer: Map and parcel data are believed to be accurate, but accuracy is not guaranteed. This is not a Map scale Legal document and should not be substituted for a title search,appralsal, survey, or for zoning 1 inch = 398 Feet verification. Dakota County assumes no legal responsibility for the information contained in this data. ziza/zoia 0 D 713 m I o (p am 0 Ilz -u w� f o' 0 m K a7D °s m n n O X 0 V Eli b x $ N '_ 1D n s m A A O A AA z • T PROPOSED EXPANSION FOR: AIRLAKE INDUSTRIAL PARK CLIENT #I3- 02-0086 LAKEVILLE. M 55044 71416 GRENADA AVE SITE PLAN LAKEVILLE. MN 550M PH: 957 -461 -7111 DEVELOPMENT PAX 157 -469 -7113 '�'V.IWN.. +"'Y EMAIL dIK.Eepprod"e6pn tm 6 T] ^^ N� K DA �D O 5 D Z Oz DRAM ET N DXJ�O JgDDAX TO mm 10 A P N C � A -1 -1 00 11 Dr DTKZ 3Dp1DX0 OAKEdIK 'S EA1t00 A m c mm z E30 X P DD O Q Evpm 7p DA TO mg(T1A 25 I O j zz �zrDZr P 7c ^y Jui=a T-1 m OTl(1 ° xg mm A0 - NI AA m m C il = n mm T xDm i x mill o m T T � f� D 33 PP 0pI 03 -D m cn�N. O 0 T 00 cf1D P D DA 0 C-1 - Na S P c O O j AA pmKN�O m � ^Tr X mAm C n op A m ? III mg. OI ,rr��See Er " ?e z0 t1 p m p 0 y D 07 0 p p =' i D p A 14(1 C C C p �< 3= n ryaTC m z D mA•' N Gr 0 m D D D mN D ill t? K p N 0 i T� vpnDnm D i m 0 m N III m D 00 0,028gD D D �� D m m D D m Nm mu NO'KZ'mo I l a 1 1 O rN p 1 - m D 00 Om�p�rLl Z w Nm 0 ==u .. D 0 zz PKKZmK N Z 4 i DD AA mmc4Pm D ()ASP C1 pjNNJ, ^ W m -bbi m a W � w O NNN T1IT DDD W f OF mm n 1 n m^i n O J J N;IN to JOB In a a x W O ° - ' I 'm � O mmm �I I i NiH am DmNI NNN r N ?T IIT 0 ill? 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E O K ^ X T 10 � gN = D � 3 > x y A ; A o s K m Oz p D nm� I $ O mD nip Gr C Exhibit I A Map of Tax Increment Financing (Economic Development) District No. 18 within Airlake Redevelopment Project No.1 SPRINGSTED Page 17 Springsted DRAFT MEMORANDUM TO: David Olson, Community & Economic Development Director FROM: Mikaela Huot, Vice President/Consultant Julian Bradshaw, Analyst DATE: March 19, 2014 SUBJECT: Financing Projections for Menasha Packaging Company Project Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101 -2887 Tel: 651 - 223 -3000 Fax: 651 - 223 -3002 www.spdngsted.com The purpose of this memo is to outline the financial components of a proposed economic development tax increment financing (TIF) district in the City of Lakeville. The City has asked Springsted to evaluate the tax increment financing (TIF) request submitted by the developer, Menasha Packaging Company, LLC., for its proposed development of an approximately 123,000 square foot industrial warehousing facility expansion adjacent to the existing building located within the City. The project would be constructed on land currently owned by the developer. In order to estimate potential tax increment revenues, we have made assumptions based on the information that is currently known. We have assumed the developer would be reimbursed for certain eligible costs associated with the project through pay - as- you -go financing. We have also assumed that the proposed project would qualify under the Tax Increment statute as an economic development district. Tax Increment Financing (TIF) District - Economic Development Tax Increment Financing (TIF) uses the increased property taxes generated by new real estate development within a tax increment financing district to pay for certain eligible costs associated with the development. The value that is "captured" (i.e., the increase in value over the year the TIF district was established) generates property taxes. These "incremental" taxes go to the development authority or the city authority rather than to the city, county, school district, or other taxing jurisdictions that normally share in the total property tax bill. Economic development districts are a type of tax increment financing district which consist of any project, or portions of a project, which the City finds to be in the public interest because: • It will discourage commerce, industry, or manufacturing from moving their operations to another state • It will result in increased employment • It will result in preservation and enhancement of the tax base City of Lakeville, Minnesota Menasha Packaging Company TIF Project March 19, 2014 Page 2 Revenue derived from tax increment from an economic development district may not be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or assistance in any form to developments consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and facilities (determined on the basis of square footage) are used for a purpose other than: • the manufacturing or production of tangible personal property, including processing resulting in the change in condition of the property; • warehousing, storage, and distribution of tangible personal property, excluding retail sales; • research and development related to the activities listed in bullets (1) or (2); • telemarketing if that activity is the exclusive use of the property; • tourism facilities; • qualified border retail facilities; or • space necessary for and related to the activities listed in bullets (1) to (6). Tax Increment Assumptions To estimate the amount of TIF revenues generated by the proposed development, certain assumptions were made based on the value of the project, construction schedule, and anticipated financing terms. • Maximum TIF District term — 9 years o 5% withheld for administrative expenses • Existing value of property (calculated as 'base') • PID:22- 11100 -03 -050 • Total Estimated Market Value: $4,477,700 ■ Estimated Land Value: $2,652,400 ■ Estimated Building Value: $1,825,300 • Estimated total market value (provided by Dakota County) o Existing value of property plus new building value upon construction completion ■ Scenario 1: $8,000,000 ■ Scenario 2: $8,750,000 • Construction commences in 2014 o Construction 100% complete by December 31, 2014 0 100% assessed in January of 2015 for taxes payable in 2016 • Proaosed 2014 tax rates remain constant through term (Rates Provided by Dakota County) o City: 41.255% o County: 31.832% o School: 33.006% o Other: 5.536% Total 111.629% City of Lakeville, Minnesota Menasha Packaging Company TIF Project March 19, 2014 Page 3 • Class rates remain constant through term o Commercial- industrial 0 1.5% first $150,000 and 2.0% value above $150,000 • Proaosed2014 disparities contribution of 39.0392% o Must betaken from property within Economic Development District • 3% annual market value inflator assumed • Present Value Assumptions o 4% Discount Rate o Dated Date of June 30, 2014 The above table illustrates the projected net revenues (and present value) that an Economic Development TIF district is estimated to generate over the course of nine years (the maximum term), assuming an estimated taxable market value between $8 million and $8.75 million at completion. It is important to note that the proposed pay 2014 tax rates were used to produce these estimates. Depending on the difference between the proposed and final tax rates the projected revenues could increase or decrease by some unknown amount. The estimated taxable market values were provided by the Dakota County Assessing department. Any changes to the estimated value of the project or changes to the proposed tax rates could have an impact on the revenue estimates. As such, the above estimates are subject to change as new information becomes available or the current information is refined. All revenues derived from a tax increment district shall be used in accordance with a tax increment financing plan. Typical eligible costs of economic development tax increment districts include acquisition, demolition, site preparation, public improvements including utilities such as water, storm water, and sewer, streets and sidewalks, foundations and footings, parking and related administrative expenses. Thank you for the opportunity to be of assistance to the City of Lakeville. Please let us know how we can best assist you as this project moves forward and should you have any questions please feel free to contact us. 00 �( 0 0 0 0M�CaR N die (Ohf�(O�N vvv�v�vv� vmn M�(00 r_ v LO co co Q m O' O O CO 0 0 O1 01 M Cn M f m M In 1- 0 O N (O 0 r O N N N N m m M N M I- 4'i C O O to M 1n N 1n h g I- co 01 Q �O1 n 00N(c v�i1 1n(o(n(or - ui Lo m (O 0 J M G CM M N O (O CO 114 01 r M m m 01 N N M M M M M C 00 r.— 0NN M�( O F o 7 N NNNN N O C9 m (O 0 J M G CM M N O (O CO 114 01 r M m m 01 N N M M M M M h _M x_ C0 pp p,D �� OO MO{� O pp � "COOr 0f N In O (0 N Of O) � t0 1p F C N � 0 i'n co (o CD �IU c Spa if v c S o0 �D A M (O (O (O 0D 0D (O (O (O (D (O 0:U�U C .s _a C C t a 3 0 1 L ; L �E I e m M d G O O O I'- Lo f In Q m _ @ to (� p N L M 0 m N co CM M N O (O CO 114 01 r M m m 01 N N M M M M M _M F C� c Spa if v c S o0 �D A N a 0 0 a a c t ac a ac a 0 a 0 C .� $ 0p a 0p 0p .0 W a0 a 0 o a0 a0 a0 a 0 m M J O U O. ooh �+ Cl O D N M, ` C D O O V _ a 00 (7) Cl) pN �Cp70Mi CCI in C� C d (pM a (0 o��i 010 N 0 E U +. c o � >' v � d1 E - O. 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Olson, Community & Economic Development Director Steven Mielke, City Administrator Date: March 21, 2014 Subject: Strategic Plan for Economic Development Work Plan Update The City Council accepted the EDC's 2014 -2016 Strategic Plan for Economic Development at their January 6, 2014 meeting. This plan provides the EDC and staff with a basis to focus on specific initiatives during this three -year period. The Work Plan discussed at the EDC's February meeting serves as the foundation for the activities staff will pursue in 2014. Please review the attached Work Plan for an update on the progress of the actions identified by the EDC. Target dates for completion have been included to provide a suggested timeframe for these actions to be undertaken. Recommended Action: No action required. 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O N = � � � S 4-J E § k § E 0 .� 2 > k D �� kJ �E$ § 2 CZ § j ■ 0 / U LU ■ c � ©a ■ g 0. 4 o 0 E « 4-J u ■ ° ° � � � to ° 2 o Co 2� 11 �§ 2 R § /°% . § k �§ "10 cu (D - ■ R �§ k / 0 u o u R 2 2 « � § O 0 k 0 u § 0 c 0 u y � �2 � M M a u K \ k � 0 4 q C14 � g § 0. 0 � g c u § 0 r 0 u 3 � \2 a co n � u q k � � � 0 � C) q t q ¥ r-4 / % 4.6 & E � 7 7 7 2 CU � / o � g § 0. 0 � g c u § 0 r 0 u 3 � \2 a co n � u q k � � � 0 � C) q ■ p c 2 7 7 7 2 O . � . 2 bm O ° . k 4-J � 2 k 3 2 0 K \ z § k \ » § a / p u 2« § k cz 4 2 0 0 > c b\ t 0 CZ § E k � § u § u W 0 s w u w» 3 ■ bo ® tko u \ o v 3 q § ■- A � c� L-- k B il v k / V) 0 0 3 t / u *0 /2 vq n o 3 t/ 6V (1) 0 ° ƒ 2 f 6 M k §3 )� R��k 2�ƒ % E © �k� 9§ n W E C r k w u 2 in 2 rz E 2 � g § 0. 0 � g c u § 0 r 0 u 3 � \2 a co n � u q k � � � 0 � C) q :gym No. S Lakeville City of Lakeville Community & Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community and Economic Development Director Copy: Steven Mielke, City Administrator Adam Kienberger, Economic Development Specialist Date: March 21, 2014 Subject: March Director's Report The following is the Director's Report for March, 2014. Building Permit Report The City has issued building permits with a total valuation of $17,226,431 through February. This compares to a total valuation of $22,362,000 through February of 2013. The City issued commercial and industrial permits with a total valuation of $1,565,000 through February compared to a total valuation of $4,734,750 during the same period in 2013. The City has also issued permits for 43 single family homes through February with a total valuation of $14,342,000. This compares to 41 single family home permits through February of 2013 with a total valuation of $13,064,000. The 43 single family home permits issued through February, 2014 was the highest in the Metropolitan Area based on figures released by the Builders Association of the Twin Cities. Open To Business Event The Open to Business program held a special event on March 6th to highlight the program's successes throughout its first year in Dakota County. Nearly 80 people attended including small business owners, lenders, government officials and city and county staff. The overview provided by Open to Business noted that the program served 136 businesses /entrepreneurs, provided $278,429 of direct capital for 19 businesses, and facilitate capital for another two businesses in 2013. Lakeville continues to be a contributor and active participant in the Open to Business program. Dakota County CDA Grant Approval The Dakota County CDA Board approved a Redevelopment Incentive Grant (RIG) for the City of Lakeville at their March 18th Meeting. These grant funds will be used to fund a portion of the Downtown Parking Lot reconstruction project in the Ben Franklin block and possibly streetscape and sidewalk improvements to the Holyoke Avenue parking lot adjacent to the Art Center. Realtors Forum The City hosted a residential Realtors Forum on Thursday, March 6 from 9:00 a.m. to Noon at City Hall with approximately 100 realtors attending. The event was coordinated with the St. Paul Area Association of Realtors (SPAAAR) and was last held in 2011. SPAAR had to close registration after 100 Realtors signed up because of space limitations in the City Hall Council Chambers. The event included informational presentations by numerous City departments along with Lakeville School District, Lakeville Area Chamber of Commerce, and the Dakota County CDA. The goal of the event is to promote Lakeville to area realtors and provide them with updated information on our community that will allow them to better inform potential real estate buyers about the City. We have received positive feedback on the event and will plan to host another event in a couple of years. Foreclosure Update There were a total of eight sheriff sales in Lakeville in February and a total of 14 through the first two months of the year. There were a total of 108 Sheriff Sales in Lakeville in 2013. N � w 8�n �8�888S8S88 ° oS8888888888888 0 SSSSS p 5 C N C C C C C C C C C C C C C C G C C C C G C C C o O O O O O M G� .• , -r r" ON O �y 00 M vi C a a w� o 58888SSS888888S888S8888SSS888 88$85 o o (=5 O O a o6 tK W) N W) o� N O .-r F� N a a gri�$�o8 °8s88888ss�888°8 s 88° 88 M N W .r h h � M It ON Cl) N .r rr o0 00 �+ O ON v) O c•) cc N O 0 a 0 0 0 0 0 0 0 0 0 kn e* to 0 0 0 0 N O O .-. O O F a vy 3 O o o jSS NBSrSSSSBS SSS O8 8SS888SSS . 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Not all of these result in Sheriff Sales. Mapping Using Dakota County GIS http://eis.co.dakota.mn.us/website/dakotanetEris/ The Dakota County Office of GIS is updating the 2014 Foreclosures and Notice of Pendency layers on a monthly basis. If you need assistance using this Web page, please call Randy Knippel or Mary Hagerman with the Office of GIS at (952) 891 -7081. If you have any concerns, please call me at (651) 675 -4467 or send me an email at IhenningCcDdakotacda.state.mn.us rl+ W4 "'" • < N = W z o� r C E O. _O r C� O U 'c - 3 U O C OUQ �Q u c L. w � co 0 � EV � On DO 10. 7 IV 0 W 0 C d U) LL N � � co � � On DO 10. 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O td y C y C td CL L O -0 y E V_ z .rj y 0 z� y W OL z y �7 V y C O C N C O � a LM L d - V1 N E u 2 O cm tw co Q O U d o tv A c O . fd y E > c L O E O L - i aqua ,, arc 4W StaAr1bune Shakopee is rethinking tax incentives for prospective employers Article by: Susan Feyder Star Tribune February 20, 2014 - 11:26 PM littp://www.startnbune.com/pnntarticle/7id=246460771 After more than a year of dishing out millions in sometimes controversial financial incentives, Shakopee is weighing more explicit rules for what it will ask of employers looking for tax subsidies in the future. The city wants to peg financial packages to things like how many jobs a company creates, the wages it offers and how much a new or improved factory or office building bolsters the tax base. Shakopee has considered those things in the past, but there's been no formal policy that specifies requirements. It's not uncommon for cities to lack clear rules on when tax assistance is appropriate; Shakopee City Administrator Mark McNeill says the city's staff checked other communities' guidelines and found some were equally vague. "Many of them have left it very flexible," he said. The city made headlines in 2013 by landing a Shutterfiy distribution center, an Emerson Process Management site that will employ 400, and several other large employers. There's a mixed feeling of pride and uneasiness in Shakopee regarding its aggressive push to lure new employers. The city stands to gain more than 1,600 jobs from five companies that are pouring hundreds of millions of investment dollars into new and improved buildings. But the series of deals has civic leaders in Shakopee and Scott County wondering if financial breaks to newcomers shift too much of the tax burden onto existing businesses and residents. "Who is left to pay for city services ?" said Council Member Matt Lehman, who has voted against two of the deals. "We've had some good success with economic incentives, but the question has been unresolved as to whether there needs to be hard - and -fast rules on what you need to do — things like the number of jobs and how much they pay — to qualify," McNeill said. The city already requires businesses getting subsidies to pay at least 200 percent of the federal minimum wage, or $14.50 an hour. The new policies would require projects getting tax- increment financing to create one job for every $15,000 they receive and build at least 50,000 square feet of space. New businesses getting tax abatements would have to invest at least $10 million while those expanding would have to invest at least $5 million. Projects seeking tax abatements also would have to outline what they would do to increase and diversify the workforce, encourage unsubsidized spinoff investments, and improve the city's transportation and other infrastructure. The city would use the information to score businesses and determine if they qualify for assistance. The scoring already has taken place informally. Last year, Compass Datacenters withdrew its request for incentives for a facility it's building in Shakopee because it cut the number of jobs it would create. McNeill said that next month the council could consider policies on tax abatements and tax- increment financing that recently were approved by the city's Economic Development Advisory Committee. Mayor Brad Tabke, who has supported the financial incentives, says the new policy should encourage more businesses to consider locating in Shakopee. "We'll be able to respond to inquiries faster, give these companies a very clear road map," he said. Tabke considers the financial packages a short-term sacrifice needed to accomplish the long -term goal of having more jobs for Shakopee residents. That's also a goal for Scott County, which last year said just 24 percent of its residents were locally 1 of 2 2/24/2014 8:44 AM uup.ii w w w.buu uivuue.c,vm/pnnuuucle/ aa L4o4bu / / 1 employed, with more than 40 percent traveling to Hennepin County. The county wants to create enough jobs so that half of the county's residents would be locally employed by 2030. Lehman, a council veteran who ran against Tabke last fall, is concerned a policy could be used to extend benefits to businesses regardless of their financial need. He voted against tax abatements for Datacard Group and Shutterfly because he didn't think either lacked the financial wherewithal to do the projects on its own. He also said he opposed the financial package for Shutterfly, which makes personalized photo books, calendars and cards, because 200 of its 529 employees in Shakopee will be seasonal workers. "I'm a little apprehensive," he said. "If you have a policy that's in place all the time, there's a question whether we offer these incentives even when the economy is flying high." Susan Feyder • 952 - 746 -3282 ® 2014 Star Tribune 2 of 2 2/24/2014 8:44 AM Brooklyn Park targets 'good'jobs along 610 - Minneapolis / St. Paul Business Journal Page 1 of 5 From the Minneapolis I St. Paul Business Journal :http: /lwww. bizjournals. com /twincities /print- edition 12014 /02128 / brooklyn- park - targets -good jobs.html SUBSCRIBER CONTENT: Feb 28, 2014, 5:00am CST Cover Story 9 Brooklyn Park targets 'good' jobs along 610 Basking in new development prospects along hwy 610, city gets selective. Sam Black Senior reporter- Minneapolis /St. Paul Business Journal Email I Twitter I Goo le+ Development along Highway 610 in Brooklyn Park is on the entrance ramp to something big. That's been expected before, but little happened. However, this time, there's true momentum. Expansions are underway or nearing completion at Target Corp., Baxter International Inc., Olympus Surgical Technologies America and a PrairieCare new workers t mental-health area. hospital along 610 that, combined, will bring a wave of about 5, Developers have tied up hundreds of acres in the area where they are discussing plans to construct a mixture of office, industrial, retail and residential buildings. The activity that now is going on in Brooklyn Park is a far cry from 2008 and 2009. When the recession hit, properties began depreciating, new projects stalled and two key development sites went into foreclosure. The jump -start in activity is affirmation of the city's insistence that it can attract well - paying jobs and higher - density development than many outer -ring suburbs, even if it sometimes means saying no or ruffling feathers. "We have been trying to work with the developers to say there's so much more potential then what you're giving it," said Brooklyn Park Mayor leffrev Lunde "The results are bearing out the plan. It's working, so were going to ride this out as hard as we can." i.ft, .ii.xAuw hi7.iournals.comltwincities/ print - edition / 2014 /02 /28/brooklyn -park- targets- goo... 2/28/2014 trooklyn Park targets 'good' Jobs along 61 U - Minneapolis / St. Paul Business Journal Page 2 of 5 The city hasn't said exactly what kind of jobs it wants, but it has welcomed and subsidized the medical technology jobs created by the Olympus and Baxter deals in the past year. Lunde, a former City Council member who won a 12 -way race to replace Mayor Steve Lampi who died in 2011, wants Brooklyn Park to become the job center of the northwest metro and lead the Twin Cities in job creation over the next decade. His self - described "realistic" estimate is that one day Highway 610 will boast 30,000 jobs. "We're a quarter of the way there and have lots of land left," Lunde said. What's prompting demand? Demand in the area is heavily fueled by the availability of land and freeways "There are very few places with as large of tracts of land that are as close to the metro as Brooklyn Park," said Casey Hankinson vice president at Ryan Cos. US Inc., who led the Olympus project and is spearheading the development of a mixed -use site known as Astra Village. There's demand from medical groups for ground -up development, which is what fueled Ryan's interest there, Hankinson said. Ryan has been the general contractor for Target's huge office campus on Highway 610. Roads are a big asset for the corridor, too, said Mark Sims senior vice president, principal at Cassidy Turley in Minneapolis, who is marketing land in Astra Village. The 2009 federal economic stimulus bill contributed $27 million that local officials needed to construct a three -mile extension of Highway 610 between highways 169 and 81 that opened in 2011. Also, the state and city have worked to remove all stoplights along Highway 169 between Highway 610 and Interstate 94. The city also attributes some of its success to its focus on fast development approvals and offering financial incentives where it can. And officials tout a diverse workforce that's more reflective of the country's overall demographics than other areas of the Twin Cities. Another development catalyst has been Minnesota's largest retailer, Target. It doesn't have a retail store in the area yet, but by the end of this summer, Target's Northern Campus will have doubled in size over six years and grown to more than 1 million square feet and 5,500 office workers. Target is working on a long -range expansion plan for the campus that includes a hotel, retail and office space and light rail transit station for the Bottineau Transitway or Blue Line (see photo slide show and list at the end of this story) that could begin operating before 2020. Only about one - fourth of Target's land has been developed so far. Target has brought the corridor some big- company credibility and prompted the addition of services, such as banks, restaurants, fitness facilities and a Cub Foods grocery store. http: / /www.bizjoumals.comltwincitiesl print - edition / 2014 /02l281brooklyn- park - targets- goo... 2/28/2014 rsroomyn rarx Targets gooa' ions along eiu - Minneapolis fit. Paul Business Journal Page 3 of 5 Few of those retailers were open in 2006 and 2007, when the city last had a rush of development plans along 610. Things are humming now. During the past two years, the city often canceled its Planning Commission meetings. This February, it had a full agenda with multiple projects, including Prairie Care's new hospital. Ability to say no Whether Lunde's jobs goals are possible may depend on the city's development restrictions, according to developers and brokers who know the area well. Brooklyn Park officials have said they're looking for good - paying jobs and buildings that are at least two stories tall along 610. Basically, they don't want big warehouses in that part of town. The Brooklyn Park City Council has had the luxury of saying "no" to two projects that didn't fit this vision, including a rare rejection in a Twin Cities suburb of a Fortune 500 company. Indianapolis -based Scannell Properties had pitched a 303,000- square -foot distribution center on a site for Memphis, Tenn. -based FedEx. It would have meant 64 full -time jobs in a new building at Highway 169 and 109th Avenue North. It's just outside the city's zoning district for the Highway 610 corridor. The City Council rejected the plan for a variety of reasons, including the projected truck traffic and the small number of jobs it would create. FedEx ended up going to Rogers. In early February, the City Council also turned down plans for a 340 -unit townhome -style apartment development proposed by Milwaukee -based Continental Properties Co. Inc. The developer wanted to build on a site on Zane Avenue North and Highway 610 owned by TCF Financial Corp., which acquired the land after foreclosing on a different developer. The City Council didn't approve the apartments, called Springs at 610 Crossings, because the site was zoned for commercial uses and because some officials thought the apartments would be too spread out over the 25 -acre site. Causing some heartburn With the growth, of course, there are some growing pains The city's development restrictions along 610 are causing consternation for Scott Moe vice president of leasing and development at Minneapolis -based CSM Corp., which owns a parcel near 93rd Avenue North and Zane and has a contract to buy a next -door parcel. Moe said the city's language for the 610 district seems ambiguous and is making it difficult to predict exactly what can be built on the land CSM is about to buy. The fact that the City Council disagreed with its staff and Planning Commission recommendations on the FedEx deal especially gives Moe heartburn. http:/ /www.bizjoumals.comltwincitiesl print - edition / 2014 /02l281brooklyn- park - targets- goo... 2/28/2014 trooklyn nark targets 'good' jobs along 610 - Minneapolis / St. Paul Business Journal Page 4 of 5 "It means you have to come in there every time with a building and see which way the wind is blowing, and that's tough for us to do," he said. Tim Elam development manager at Scannell, who failed to get the FedEx deal approved, isn't holding a grudge. Scannell is trying to develop Martin Harstad farmland along Highway 169 into a 227 -acre business park with about 3 million square feet of industrial and office space. Scannell may begin construction this year on a 173,000- square -foot speculative warehouse building, with 32 -foot ceilings, on a 15 -acre parcel of Harstad's land. It's also chasing some build -to -suit deals for the development site, Elam said. "The buildings we put up will be very aesthetically pleasing to the eye and very functional," Elam said. "They won't be down - and -dirty warehouses." United Properties plans to start a mixed -use project on 610 this year. The Bloomington - based company owns a 35 -acre site at highway 610 and 169 and is marketing space to potential users, said Brandon Champeau assistant vice president of development. He doesn't anticipate any trouble meeting the city's design criteria. "We've had a couple of meetings with the city on it. We're clear of the idea of what we need to be looking for," Champeau said. "They clearly don't want to see a giant distribution facility that only has 15 or 20 jobs." Champeau said the city's requirements aren't that different than other cities that want to see details about potential users and what a project is going to look like. Moe, at CSM, said he's had a good experience with other projects in Brooklyn Park, including at the 610 Business Center, which he helped develop when he worked for Indianapolis -based Duke Realty Corp. Those projects took a little bit extra "lipstick" on the exterior finishes to appeal to the city, but they were feasible, he said. "I've got no issue ... building that kind of product," Moe said. "The question that I have today is, will they allow us to continue with that ?" Moe said he thinks the city is trying really hard to be pro- business, and he understand's the city's goal for attracting certain kinds of jobs. "The question is, will the market deliver [what they want], and I'm not sure that it will at this point in time," Moe said. 'They're off to a good start, but there's a lot of land up there." More developers with sites along Highway 610 (See photo slideshow for 1 -5) 6 - Ryan Cos. http: / /www.bizj oumals.comltwincitiesl print - edition / 2014 /02l281brooklyn- park - targets- goo... 2/28/2014 tsrooklyn Park targets 'good' jobs along 610 - Minneapolis / St. Paul Business Journal Page 5 of 5 announced in January that it has a deal to buy and develop into a business park a site owned by the Seed family called Astra Village. 7 - CSM Corp. has control of two parcels and is looking at industrial and office /warehouse uses. The Metropolitan Council is eyeing part of the site for a light rail transit park- and -ride 8 - Scannell Properties is marketing land in Martin Harstad 227 -acre NorthPark Business Center. Scannell may begin a speculative or build -to -suit office /warehouse project this year. This is where the city rejected a FedEx distribution center. 9 - Dale Properties controls 41 acres where it plans a mixed -use project. 10 - Bruce Paddock bought the 40 -acre site in 2002 with plans to move his former pharmaceutical company, Paddock Laboratories, there. He sold the company, but held onto the land and has no immediate plans. 11 - Michael Gresser in Eagan bought this foreclosed site from TCF Bank as an investment in 2011. Gresser hasn't announced plans but it's a logical fit for a mixed -use project. 12 - United Properties controls the site and is looking at a variety of uses, including office /warehouse space. It could start building this year. 13 - Capstone /Quadrangle Development Co. controls a 20 -acre parcel zoned business park and can build up to 350,000 square feet office /warehouse space Sam Black covers real estate, manufacturing and economic development http: / /www. bizi oumals. com/twincities /print- edition/2014 /02/2 8/brookly, Olson, David From: DEED Media <MNDEED @public.govdelivery.com> Sent: Monday, March 03, 2014 11:47 AM To: Olson, David Subject: Fourth Quarter Business Expansions MnMir.M eA Fmsa.m�M r+d F rnnw.e 11..+kanrM E ws E L EASE For Immediate Release March 3, 2014 Contact: Madeline Koch, 651 -259 -7236 madeline.koch(abstate.mn.us Companies Announce 34 Expansion Projects in 4 Quarter NA total of 146 expansion projects were announced in 2013, projected to create 7 jobs statewide— ST. PAUL — Companies announced 34 expansion projects in Minnesota in the 2013 fourth quarter with plans to create more than 1,100 jobs, according to a new report from the Minnesota Department of Employment and Economic Development (DEED). Altogether in 2013, 146 expansion projects were announced that will create 7,700 jobs statewide. The agency said the expanding companies include APAC Customer Services, which is adding 230 new jobs at its call center in Mendota Heights; Imagine! Print Solutions, which is hiring 200 new workers at its Shakopee headquarters; and Charter Communications, which is expanding with 140 new workers in Rochester. "Companies are choosing Minnesota for their expansion projects because of the state's outstanding workforce and healthy business climate," said DEED Commissioner Katie Clark Sieben. "With leading indicators pointing to continued growth in the state, we anticipate the expansion trend to continue in 2014." DEED participated in 15 of the 34 projects announced in the fourth quarter, and roughly half of the total expansion projects announced in 2013. In the latest round, half of the expansion projects were in the Twin Cities and the other half were in Greater Minnesota. New Ulm led Greater Minnesota with four expansion projects: 1 Frontier Labs, Zinniel Boring, United Commercial Upholstery and DLC Manufacturing. Manufacturing led all sectors with 16 expansion projects in the quarter. The industry also was the clear leader in total expansions in 2013, with 88 projects reported across a broad array of industries, including agricultural machinery, avionics, electronics and medical devices. While the Twin Cities led the state in total projects last year, other locations also had a significant number of expansions. Seven Duluth companies reported expansions, particularly in the city's avionics industry. Jackson reported three significant projects, including a major expansion at the AGCO manufacturing facility. St. Cloud had four projects, including a large expansion of New Flyer's manufacturing facility. The full fourth quarter business expansion report and a map showing where the expansions will occur can be found here. DEED is the state's principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and our services, visit us at http: / /mn.gov /deed/ . Follow us on Twitter at twitter.com /mndeed . -30- Upon request, the information in this news release can be made available in alternative formats by contacting the DEED Communications Office at 651- 259 -7161. Minnesota Department of Employment and Economic Development Communications Office Phone 651 - 398 -9459 or 1- 800 - 657 -3858 • TTY 1- 800 - 657 -3973 An equal opportunity employer and service provider. i SG Questions? Contact Us Depariment of Employment and Economic Devebpment STAY CONNECTED: MD © SHHRE SUBSCRIBER SERVICES: Manage Preferences I Unsubscribe I Help 2 Olson, David From: DEED Media <MNDEED @public.govdelivery.com> Sent: Thursday, March 13, 2014 9:47 AM To: Olson, David Subject: January 2014 Employment For Immediate Release Contact: Madeline Koch, 651 - 259 -7236 March 13, 2014 madeline.koch(@state.mn.us Steve Hine, 651 - 259 -7396 steve.hineCabstate.mn.us State Employers Add 600 Jobs in January —Employment tops 2.8 million for the first time in state history— ST. PAUL — Minnesota employers added 600 jobs in January, according to figures released today by the Minnesota Department of Employment and Economic Development (DEED). The agency also released revised figures that show the state gained 12,661 more jobs than originally reported over the previous 21 months. The upward revision put total employment in the state over 2.8 million in December for the first time in history. The state unemployment rate in January was unchanged from the seasonally adjusted revised rate of 4.7 percent in December. The U.S. unemployment rate in January was 6.6 percent. The sixth consecutive month of job gains in January brought total job growth in the state during the past year to 52,160, a growth rate of 1.9 percent compared with a U.S. growth rate of 1.8 percent. Minnesota has regained 190,400 jobs since the low point of the recession and is 31,400 jobs above the state's pre- recessionary peak. "Even with January's extremely cold weather, hardworking Minnesotans continued to generate jobs," said DEED Commissioner Katie Clark Sieben. "We're particularly encouraged by the breadth of the labor market recovery, with all 11 of the state's industrial sectors gaining jobs in the past year." 1 ��S NEWS RELEASE Leisure and hospitality led all sectors in January with 3,000 new jobs. Other job gains occurred in manufacturing (up 2,000), education and health care (up 1,200), professional and business services (up 900) and other services (up 200). Logging and mining held steady. Job losses occurred in trade, transportation and utilities (down 3,200), financial activities (down 1,200), information (down 1,100), construction (down 900) and government (down 300). Over the past year, education and health services led all sectors with 11,448 new jobs. Other job growth occurred in trade, transportation and utilities (up 10,245), construction (up 9,562), professional and business services (up 6,337), manufacturing (up 4,809), leisure and hospitality (up 3,597), other services (up 2,874), government (up 1,600), information (up 1,434), financial activities (up 201), and logging and mining (up 53). In the state Metropolitan Statistical Areas, job gains occurred in the past 12 months in the Mankato MSA (up 2.6 percent), St. Cloud MSA (up 1.7 percent), Minneapolis -St. Paul MSA (up 1.5 percent) and Duluth- Superior MSA (up 0.9 percent). Job losses occurred in the Rochester MSA (down 0.3 percent). DEED is the state's principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and our services, visit us at http: / /mn.clov /deed/ . Follow us on Twitter at twitter.com /mndeed . Over The Year Em to ment Growth By Industry Sector NSA Seasonally adjusted Not seasonally adjusted Unemployment Rate January 2014 December 2013 January 2014 January 2013 Minnesota 4.7 4.7 5.7 6.4 U.S. 6.6 6.7 7.0 8.5 Employment January 2014 December 2013 Jan. '13- Jan. '14 Level Chan e Jan. '13- Jan. 1 14 % Change Minnesota 2 2,811,700 52 160 1.9 U.S. 137,524,000 1 137,395,000 2,359,000 1.8 Over The Year Em to ment Growth By Industry Sector NSA OTY Job Change OTY Growth Rate ( %) U.S. OTY Growth Rate ( %) Total Non -Farm Employment 52,160 1.9 1.8 Logging and Mining 53 0.8 4.4 Construction , 562 11.9 3.4 Manufacturing . 9 4 1.6 0.7 Trade, Trans. and Utilities 10,245 2.0 2.0 Q Information 1 2.7 0.0 Financial Activities 201 0.1 0.9 Prof. and Bus. Services 6 1.9 3.9 Ed. and Health Services 11,448 2.4 1.5 Leisure and Hospitality 3 1 1.5 3.4 Other Services 2 2.5 0.5 Government 1,600 0.4 -0.2 -30- Upon request, the information in this news release can be made available in alternative formats by contacting the DEED Communications Office at 651 - 398 -9459. Minnesota Department of Employment and Economic Development Communications Office Phone 651 - 398 -9459 or1- 800 - 657- 3858•TTY 1- 800 - 657 -3973 An equal opportunity employer and service provider. • SG Questions? Contact Us Department of Employment and Economic Development STAY CONNECTED: M© W 0 SHARE SUBSCRIBER SERVICES: Manage Preferences I Unsubscribe I Help OTY OTY Employment Employment Change Change Metropolitan Statistical Area (# , NSA) % NSA Minneapolis -St. Paul MN -WI MSA 26,540 1.5 Duluth-Superior MN -WI MSA 1 0.9 Rochester MSA -354 -0.3 St. Cloud MSA 1 1.7 Mankato MSA 1,377 2.6 -30- Upon request, the information in this news release can be made available in alternative formats by contacting the DEED Communications Office at 651 - 398 -9459. Minnesota Department of Employment and Economic Development Communications Office Phone 651 - 398 -9459 or1- 800 - 657- 3858•TTY 1- 800 - 657 -3973 An equal opportunity employer and service provider. • SG Questions? Contact Us Department of Employment and Economic Development STAY CONNECTED: M© W 0 SHARE SUBSCRIBER SERVICES: Manage Preferences I Unsubscribe I Help Twin Cities apartment developers are filling units nearly as fast they can build them. Although more than 3,000 new apartments were built in the metro area over the past year, the average vacancy rate barely budged, ending the year at just 2.5 percent, with average monthly rent rising 2.5 percent to $981, according to Marquette Advisors. "It was another outstanding year to be an apartment owner in the Twin Cities, but if you're a renter you had to move quickly if you saw something you liked," said Jack Sipes, senior vice president of property management for Dominium, which owns and manages more than 5,000 apartments in the Twin Cities and more than 23,000 units nationwide. With the economy on the mend and housing in short supply, the Twin Cities has consistently rated as one of the nation's tightest rental markets. That demand is being driven by an influx of renters from outside the area who are moving here for jobs and by an increase in the number of renters by choice. In addition, there has been a dearth of new apartment construction for much of the past two decades. "This is a very strong apartment market, probably our strongest across the country," said Sipes. "When we have a vacancy, we lease quickly at or above what the person before was paying." The report, which surveys more than 110,000 apartments in mostly large complexes across the metro area, shows that the rental market is especially tight for low- and moderate - income renters. All eyes, however, are on downtown Minneapolis, which has been the epicenter of a recent building boom. Across the region, more than 3,100 new units were built last year, half of them in downtown. The abundance of new projects, mostly high -end buildings where a studio apartment can easily rent for more than $1,000 a month, has created growing concern that the market is overbuilt and headed toward saturation. While the average downtown vacancy rate doubled to 4 percent at the end of 2013, the market is expected to easily absorb the 1,200 additional units that will come online this year. "We were impressed by the sustained level of demand, especially in and around downtown and given the amount of new product that came online," said Brent Wittenberg, vice president at Marquette advisers. In downtown, monthly average rents rose by 9.1 percent to $1,402, largely because of a statistical shift caused by a dramatic increase in the number of expensive units that came to market last year, including the Soo Line Building City Apartments and the Brunsfield Apartments in the Twin Cities can ? ? ?t go up fast enough Jim Buchta, Star Tribune North Loop. Much of this development has been fueled by renters who are new to the Twin Cities, mostly those who are moving for their jobs. The Minnesota Department of Employment and Economic Development said the Twin Cities added 34,900 jobs last year following the addition of 33,000 in 2012. In the coming year, Wittenberg expects vacancy rates downtown to increase slightly as several large buildings come to market at the same time, including the Nic on Fifth in downtown Minneapolis and the LPM Apartments near Loring Park, but he's not concerned about overbuilding. Already, fewer new buildings are being proposed, suggesting that the rapid pace of development will soon slow, according to Mary Bujold, president of Maxfield Research. "We are starting to see more proposals for areas outside of downtown Minneapolis and Uptown," she said. Competition for rentals is expected to become particularly fierce in first- and second -tier suburbs, especially in parts of the region with easy access to public transportation, shops and restaurants. In Blaine, for example, the average vacancy rate fell to just 1 percent with the average rents rising 11 percent. And in Eagan, where at least three developers have recently stepped forward with plans for new apartment buildings, the vacancy rate fell to just 1.4 percent. "This market has been pretty solid the last two years with really no apartment development," said Lisa Moe, president and chief executive officer of StuartCo, which owns a 200 -unit property in Eagan called Woodridge Apartments. Jim Buchta • 612 - 673 -7376