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HomeMy WebLinkAbout08-26-14CITY OF LAKEVILLE ECONOMIC DEVELOPMENT COMMISSION MEETING MINUTES August 26, 2014 Vice Chair Longie called the meeting to order at 4:30 p.m. in the Marion Conference Room at City Hall. Members Present: Comms. Matasosky, Longie, Emond, Vlasak, Collman, Ex -officio member Lakeville Area Chamber of Commerce President Tim Roche. Members Absent: Comm. Starfield, Tushie, Julius, Smith, Mayor Matt Little, Interim City Administrator Allyn Kuennen Others Present: David Olson, Community & Economic Development Director; Rick Howden, Economic Development Specialist; Paul Gintner, BTD President; Jim Fulford, owner of the former Toro building; Penny Brevig, Recording Secretary. 2. Approval of July 15, 2014 meeting minutes Motion Comms. Matasosky/Emond moved to approve the minutes of the July 15, 2014 meeting as presented. Motion carried unanimously. 3. Preliminary Review of Tax Increment Financing Application from BTD Mr. Olson introduced Paul Gintner, President of BTD. Mr. Gintner presented a Power Point presentation which explained BTD's background, what they do, what products they make and for which companies they make them for. He explained that they are diversified with numerous robotics. Mr. Gintner reviewed their recent as well as their anticipated growth. He indicated that with this proposed expansion, they anticipate adding 100 jobs in the first two years of operations. He reviewed the pay scale for entry level positions to management positions. Mr. Gintner is requesting TIF assistance to offset some of the estimated $4.3 million in TIF eligible costs associated with this project. Mr. Olson stated that this will be structured similar to the Menasha project except BTD is a tenant in this case. The EDC discussed the training grant and the classes that can be taken through Dakota County Technical College. Mr. Gintner indicated they would like to hire people prior to them finishing their schooling and stated that there is an opportunity for full tuition reimbursement. BTD is hoping to have 400-450 employees by 2017 and fully built out by 2019. Economic Development Commission Meeting Minutes, August 26, 2014 Page 2 There was a discussion regarding the impact on BTD's vendors. Mr. Gintner indicated that BTD is actually coming toward their vendors. The paint supplier will be affected due to once the expansion is complete, only 20% of the painting will be outsourced. Mr. Olson indicated that using pay-as-you-go TIF financing, it puts all the risk on the business and in this case, the landlord. It removes all the risk for the City. He also indicated that only the improvements associated with expansion can be captured in the TIF District. Mr. Olson stated that this application meets the qualifications for a TIF District and indicated that this is the first step in the process. The second step will be for the City Council to have a public hearing to approve the creation of the TIF district. Mr. Olson requested the EDC recommend to the City Council that they proceed with preparation of a TIF Plan for the creation of a new TIF District for the proposed BTD expansion. If the City Council concurs with the EDC's recommendation, Mr. Olson indicated that the draft TIF plan and proposed level of assistance will be brought back to the EDC for a recommendation. Motion Comms. EmondNlasak moved to recommend to the City Council that they proceed with preparation of a TIF Plan for the creation of a new TIF District for the proposed BTD expansion. Motion carried. Comm. Matasosky abstained, due to his company, APPRO Development, constructing BTD's expansion. 4. Review of Dakota County's Proposed Tax Increment Financing Policy Revisions Mr. Olson stated that Dakota County distributed the proposed revisions to the County's Policy on TIF. He indicated that the proposed policy revisions were discussed at a meeting of Community and Economic Development Directors from Dakota County cities and Dakota County Deputy Director of Property Taxation & Records Amy Koethe on August 21 sc One of the more significant policy changes is the elimination of the County supporting any TIF projects that provide a net increase in livable wage jobs. Mr. Olson stated that as a result, the County will not support any Economic Development TIF projects that either create or preserve liable wage jobs. Mr. Olson indicated that the County has always been under the assumption that these properties will eventually develop on their own without the help of the City. Staff is requesting that the EDC provide comments regarding the proposed County TIF Policy amendments that can be forwarded on to the City Council. EDC comments regarding the proposed County TIF Policy amendments: Economic Development Commission Meeting Minutes, August 26, 2014 Page 3 • Confirmed that the County's approval of a TIF project is not necessary. Mr. Olson indicated that the County gets the right to comment, but they don't have veto authority. • The County does not take market conditions into consideration. • The County feels that development is always going to happen, whether the Cities get involved in recruiting the businesses or not. • When the County feels the way they do, it handicaps the City when we try to be pro -active and make deals happen with businesses. • If the intent of the statute is met, there is no tax base to lose. • Feel the County is not consistent. • TIF is one of the City's only tools we have when we are in competition with other cities and other states. • Concerned that the City Council is going to start looking at the County and wondering why they don't support TIF. • Need to get all the economic development counterparts together on this and voice their concerns. Need a unified consensus. Motion: Comms. Vlasik/Emond moved to recommend continuing this discussion and bringing it to the City Council 5. Update on 2014-16 Strategic Plan for Economic Development Work Program Mr. Olson provided an update on the Strategic Plan. Mr. Olson stated that in the 2014-2016 Strategic Plan, the EDC set a priority to gain 200 new high quality jobs. A strategic initiative to accomplish this outcome is to conduct a market analysis to determine target markets to focus our efforts on. There are two options available to accomplish this; either hire an outside firm to do a Lakeville -specific market analysis or utilize existing research done on the Minneapolis and St. Paul region to identify target markets or industry clusters that would bring high quality jobs to Lakeville. A private consulting firm is estimated to cost between $30,000-$50,000 and staff would need to identify funding sources in order to proceed with this option. Staff and the EDC may be able to examine the research already completed from other research sources to identify the markets the City will focus its efforts on. Mr. Howden's August 21, 2014 memo under Agenda Item 5 indicates the key industry clusters identified by two programs. Discussion of what the EDC thinks should be the desired approach to complete a market analysis to determine target markets: • Need to decide how the information will be used • Should focus on specific businesses • Thought that $50,000 could be spent in more creative ways and could go a little further without using an outside firm to do a market analysis • We need to sell our brand Economic Development Commission Meeting Minutes, August 26, 2014 Page 4 • The businesses could tend to make their own cluster with, as an example, talking with other businesses at the Manufacturers Event that the City organizes, to find out where a business gets their metal from, their tooling from, etc • Perhaps the Chamber members could meet with the businesses • Surveys could be an idea, but be sure not to throw a lot of questions at them. Just need to get them to start talking about themselves • Discuss vendors they may use and if they are planning to expand • Our Manufacturers Event is our subtle way to introduce businesses to businesses and see if they can use each other's services • Do a little homework prior to visiting with the business Mr. Olson stated that we will hold off on bringing in any outside consultants. Mr. Olson also stated that staff would like clarification and further discussion on the intention of the strategic initiative: "examine higher education facilities as a target market." Comm. Longie indicated that post -secondary schools are expanding their campuses and thought it may be an opportunity for Lakeville. She thought the perhaps we could try for larger public institutions rather than private, whatever would benefit the community. The EDC felt that we would need schools that would provide training programs for the trades. Mr. Olson stated that the larger public schools are an uphill struggle to attract. DCTC recently closed their satellite location in Apple Valley. They would be great for the community, but the likelihood is not good. He indicated that it's a very competitive environment. 6. Director's Report Mr. Olson reviewed the Director's Report. He commented on the Building Permit report. He asked Mr. Howden to summarize the National Site Selector Tour. Mr. Howden commented that "it couldn't have gone any better." He indicated that it was a great fit due to the site selector specializes in assisting businesses in the food industry and their scheduled stop in Lakeville was at the MOM Brands' headquarters, where they highlighted the advantages of relocating to Lakeville. Mr. Howden stated that they made great connections. The EDC members agreed that testimonials from existing businesses are powerful. They suggested that City staff try to get a quote from the site selector for use in promoting Lakeville. Mr. Olson indicated that the groundbreaking for the Menasha expansion is scheduled for August 27th at 11:00 and encouraged the EDC members to attend. Mr. Olson commented that the City has received an application from Hy -Vee and Tradition Development for a proposed grocery store to be located at the intersection Economic Development Commission Meeting Minutes, August 26, 2014 Page 5 of Pilot Knob Road and County Road 46. He indicated that the project is scheduled to go to the Planning Commission on September 4th 7. Adjourn Meeting adjourned at 6:10 p.m. Respectfully submitted by: Pennyr vig, Recording ecretary