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10-07-14
AGENDA Economic Development Commission October 7, 2014 — 4:30 p.m. City Hall, Marion Conference Room 1. Call to order 2. Approval of August 26, 2014 minutes 3. Review of Draft BTD Tax Increment Financing Plan 4. Update on 2014 Manufacturers Event 5. Directors Report 6. Adjourn Attachments: September 2014 Building Permit Report "Suburban counties fight Met Council's transportation policy", Finance and Commerce, September 30, 2014 "Imperial Plastics buys Engineered Polymers", StarTribune, September, 24, 2014 "FedEx plans new 250 -person warehouse for suburban worker shift", Mpls./St. Paul Business Journal, September 25, 2014 "State Gains 6,100 Jobs in August", Minnesota Department of Employment and Economic Development News Release, September 18, 2014 "Living next to the Mall: Low on view, high on convenience", StarTribune, September 13, 2014 "Who's not crying into their cereal bowl? MOM", Mpls/St. Paul Business Journal, September 11, 2014 "Menasha Packaging Expanding in Lakeville", Minnesota Department of Employment and Economic Development News Release, August 27, 2014 Item No. a CITY 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, Communitj�� Economic Development Director; Rick Howden, Economic Development Spec ialli� aul Ginter, BTD P4$i ldent; Jim Fulford, owner of the former Toro building; Penny Brevjq, Recof l ng Secretary., 2. Approval of July 15, 2014 meeting minutes Motion Comms. Matasosk� i�agnd moved :Jo approve the minutes of the July 15, 2014 menti" as prese* n#ed. Motion carried :unAnitipusly. 3. Preliminary Reviiew of Tax'.jncrement'=Financing Application from BTD Mr. Olson introduced,,Paul`,'�,Pintner, President of 8TD. Mr. Gintner presented a Power -Point presentation .which explained ETD's background, what they do, what products they`*Oalke and,,Jbr w% : mpantes they make them for. He explained that they are divert fijed w�ti numer l tics. Mr. Gintner reviewed their recent as well as their anticipated growth. He indicated that with this proposed expansion, they anticipate adding 160 jobs"inAhe first two years of operations. He reviewed the pay scale for entry level positions to management positions. Mr. Gintner is r6questing 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 dreation of a new TIP—.District for the proposed BTD expansion. If the City Council concurs with the EDC's,`ippommendation, Mr. Olson indicated that the draft TIF plan and proposed level d`Ugpsistance will be brought back to the EDC for a recommendation. Motion Comms. Em&td//lasak moved to recommend to the City Council that they proceed with preparafiohof a TIF Plan for the creation of a new TIF District for the proposed BTD expaMotion carried. Comm. Matasosky abstained, due o hlis company;, APO ,Developibi§ttt, constructing BTD's expansion. 4. Review of Dakota_ County's Proposed Tax Increment Financing Policy Revision, Mr. _t lsoti" thaf akbti "County distributed the proposed revisions to the C«i ty's Policy,104 TIF.4,, He iridiogted thai the proposed policy revisions were disdb0sod at a meefg of 'Community"grid Economic Development Directors from Dakota, -'bounty cities r4ind Dakota , County Deputy Director of Property Taxation & Records �rpy Koethe oh August 2'18t:` One of the more signifit;ant policy changes is the elimination of the County supporting any TAF. projegts that provide a net increase in livable wage jobs. Mr. Olson stated that es 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 .itied 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 Economiic lQevelopment Work Program Mr. Olson provided an update oin thetfategic Platt. Mr. Olson stated that in the 2014-2016 Strategic,Plan, the EDO set`A ; n.ority to gattaAi) new high quality jobs. .. A strategic initiative 16',0,ccomplish this optcoMe is to co*ct a market analysis to determine target marketg.te_focus our'W As ori. 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 Mi nneapolis anti St. Pat gi6h,19"i� entify'prget markets or industry clusters that world bring high quality jobb Lab A private consulting firm is estir`nated 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 liker4arification and further discussion on the intention of the strategic initiative: "exa►iine higher education facilities as a target market." Comm. Lon g' ie indicated that post -sed©ndary, schools are-, expanding their campuses and thought it may be an oppunity for` Lakeville. Stye : thought the perhaps we could try for larger public institutions rather than private, whatever would benefit the community. The'DC felt that'Ve would need schools that would provide training programs for the,#radas. Mr. Olson stated- Aha't,.the larger public schools are ars ;uphill struggle to attract. DCTC recen lVcjosed thojr satellite location in `Apple VAley. 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 V.:. Mt. \Olson revievcred the Director'illb'" . 'He commented on the Building Permit repoit He asked Mr: Howden to sumsize the National Site Selector Tour. Mr. Howden commented that "it cWjdn'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: Penny Brevig, Recording Secretary Item No. 3 City of Lakeville Community & Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community and Economic Development Director Copy: Allyn Kuennen, Interim City Administrator Paul Gintner, BTD David Welte, BTD Rick Howden, Economic Development Specialist Mikaela Huot, Springsted Date: October 23, 2014 Subject: BTD Manufacturing Tax Increment Financing Plan BTD contacted the City recently regarding plans for a 200,000 square foot expansion of the Fulford Group Warehouse building located at 21350 Cedar Avenue (formerly known as the Toro building). BTD is experiencing considerable growth and needs to add additional warehouse, manufacturing, and office space and desires to consolidate their Lakeville operations that are currently located in three different locations within Airlake Industrial Park. The company has submitted a request for Tax Increment Financing (TIF) to assist in the $4,347,147 TIF eligible project costs associated with the project. BTD Manufacturing has operated in Airlake since 2005 and currently has 215 employees. The proposed expansion will create an additional 100 jobs in Lakeville. The EDC reviewed this proposed project at your August 26th meeting and the City Council reviewed this proposed TIF project at their September 15th Work Session and both recommended proceeding with the necessary steps to create a new TIF District for the project. One of the requirements of the TIF Statutes is that the City prepare a Tax Increment Financing Plan. Attached is a copy of the proposed Tax Increment Financing Plan for this project prepared by Springsted Inc. 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 County Assessor has provided an estimated range of $12,600,000 to $14,100,000 as the Estimated Market Value for this property after the proposed 200,000 square foot expansion. The current Estimated Market Value of this property is $7,200,000. This will result in an estimated available tax increment in 2017 of $119,806 and estimated available increment of $146,601 in 2024. The total estimated amount of available increment for the total duration of the proposed TIF District is $1,077,832. After retaining 5% for administration of the TIF District, the net available tax increment for the project would be $1,023,941. This represents the maximum amount the City could make available for the BTD expansion project. The application submitted by BTD identifies over $4.3 million in TIF eligible costs for the project which include land acquisition, site improvements, utilities, and streets. Since this TIF District will be structured as a "pay-as-you-go" project, the actual amount of increment that will be available will be based on the actual amount of new taxes paid in the future. This proposed TIF Plan will become the basis of the negotiation of a Contract for Private Development and Business Subsidy Agreement with BTD which will outline the contractual obligations of both BTD and the City. The City Council is scheduled to hold a public hearing on this proposed TIF Plan on October 20, 2014. Staff is also discussing with BTD representatives the possibility of submitting an application to the MN Department of Employment and Economic Development under the Job Creation Fund Program. This program provides job creation awards of up to $500,000 and capital investment rebates of up to $500,000. The Menasha Packing project was awarded $422,250 under this program. With a higher amount of capital investment and higher job creation numbers, I anticipate that the BTD project could qualify for a higher amount. ACTION REQUESTED Recommend approval for the proposed Tax Increment Financing Plan for Tax Increment Financing District No. 19 for the BTD Manufacturing Expansion Project. m -o Eli 440 o r I I I u n u u — TE�TY L I LAKEVLLE/FARMMTON LINE T— Z PROiCT PROPOSED EXPANSION FOR: `RA""fY JAS RR��R•RR �n RT r" 21350 CEDAR AVE 1 0 � CLIENT #12-02-0040 LAKEVILLE, MR 55099 of"Ro CLR REV SED EAST DR VE TO SHOW I OPTIONS ovlon� .Aeicue N • AMROVRD RY D I 71411, GRENADA AVE NOT AOR CON•TRUGTOR p OVERALL SITE PLAN p LAKEVILLE. MN 66044 c p PH: 952-461-2111 I' oAn 08/09/19 W DEVFd.nPMF.IV'I' PAX: 962-469-7113 r EMAIL: dficesmpprodRvlopwtc - ,yY �( 2M LL WTW ROB POOJL I I I DRAMAGE fiEALE � y PROPERTY LME 614'! z 6134 3/4 i m -o Eli 440 o r I I I u n u u — TE�TY L I LAKEVLLE/FARMMTON LINE T— Z PROiCT PROPOSED EXPANSION FOR: `RA""fY JAS RR��R•RR �n RT r" 21350 CEDAR AVE 1 0 � CLIENT #12-02-0040 LAKEVILLE, MR 55099 of"Ro CLR REV SED EAST DR VE TO SHOW I OPTIONS ovlon� .Aeicue N • AMROVRD RY D I 71411, GRENADA AVE NOT AOR CON•TRUGTOR p OVERALL SITE PLAN p LAKEVILLE. MN 66044 c p PH: 952-461-2111 I' oAn 08/09/19 W DEVFd.nPMF.IV'I' PAX: 962-469-7113 r EMAIL: dficesmpprodRvlopwtc - City of Lakeville, Minnesota Housing and Redevelopment Authority for the City of Lakeville Tax Increment Financing Plan for Tax Increment Financing (Economic Development) District No. 19 ithin irlake Redevelopment Project No.1 (BTD Manufacturing Expansion Project) Draft Dated: September 25, 2014 Public Hearing Scheduled: October 20, 2014 Anticipated Approval Date: October 20, 2014 Prepared by: SPRINGSTED INCORPORATED 380 Jackson Street, Suite 300 St. Paul, MN 55101-2887 (651) 223-3000 WWW.SPRINGSTED.COM TABLE OF CONTENTS PART LAKEVILLE AIRLAKE REDEVELOPMENT PLAN MODIFICATION NO.8 I. INTRODUCTION AND LEGAL BASIS A. Statement of Intent of Modification...................................................................................... 5 B. Statement of Public Purpose.............................................................................................. 5 C. Project Area Boundary ..................................................................................................... 5 D. Statement of Authority...................................................................................................... 5 II. REDEVELOPMENT PROJECT A. Redevelopment Plan Objectives......................................................................................... 5 B. Land Use....................................................................................................................... 2 C. Development Standards................................................................................................... 2 D. Environmental Controls.................................................................................................... 2 E. Redevelopment Activities.................................................................................................. 2 1. City Activities -Original Plan 2. City Activities - Plan Modification 3. Private Activities - Original Plan F. Project Cost Estimates..................................................................................................... 3 G. Relocation..................................................................................................................... 3 H. Development Contracts.................................................................................................... 3 I. Operation of Public Improvements...................................................................................... 3 J. Administriation of Project.................................................................................................. 4 K. Modification Plan............................................................................................................. 4 PARTI............................................................................................................................................................... EXHIBIT I TABLE OF CONTENTS (Continued) PART II TAX INCREMENT FINANCING PLAN NO. 19 Section A. Definitions-------------------------------------------------------------------------------------------------------------------- 5 B. Statutory Authorization..................................................................................................... 5 C. Statement of Need and Public Purpose................................................................................ 5 D. Statement of Objectives.................................................................................................... 5 E. Designation of Tax Increment Financing District as an Economic Development District .................... 5 F. Duration of the TIF District................................................................................................. 6 G. Property to be Included in the TIF District.............................................................................. 6 H. Property to be Acquired in the TIF District............................................................................. 7 I. Specific Development Expected to Occur Within the TIF District ................................................. 7 J. Findings and Need for Tax Increment Financing..................................................................... 7 K. Estimated Public Costs..................................................................................................... 9 L. Estimated Sources of Revenue.......................................................................................... 9 M. Estimated Amount of Bonded Indebtedness........................................................................10 N. Original Net Tax Capacity............................................................................................... 10 0. Original Tax Capacity Rate..............................................................................................10 P. Projected Retained Captured Net Tax Capacity and Projected Tax Increment ............................. 11 Q. Use of Tax Increment.....................................................................................................11 R. Excess Tax Increment....................................................................................................12 S. Tax Increment Pooling and the Five Year Rule..................................................................... 12 T. Limitation on Administrative Expenses...............................................................................13 U. Limitation on Property Not Subject to Improvements - Four Year Rule ....................................... 13 V. Estimated Impact on Other Taxing Jurisdictions................................................................... 13 W. Prior Planned Improvements............................................................................................ 14 X. Development Agreements...............................................................................................14 Y. Assessment Agreements................................................................................................15 Z. Modifications of the Tax Increment Financing Plan................................................................ 15 AA. Administration of the Tax Increment Financing Plan.............................................................. 15 AB. Financial Reporting and Disclosure Requirements................................................................ 16 Map of the Tax Increment Financing District....................................................................................... EXHIBIT I AssumptionsReport........................................................................................................................... EXHIBIT II Projected Tax Increment Report......................................................................................................... EXHIBIT III Estimated Impact on Other Taxing Jurisdictions Report...................................................................... EXHIBIT IV Market Value Analysis Report............................................................................................................. EXHIBIT V Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota PART MODIFICATION NO.8 TO AIRLAKE REDEVELOPMENT PROJECT INTRODUCTION AND LEGAL BASIS Section A Statement of Intent of Modification The City proposes to implement the plan objective listed in Section II.A.3 of the Original Redevelopment Plan approved by the Authority and Council in 1984. The activity objective primarily includes the expansion of the project boundary to include the proposed BTD Manufacturing Expansion TIF 19 as well as certain Airlake public Improvements. Section B Statement of Public Purpose No Change The Authority and Council find that there is a need to provide impetus for private development, maintain and increase employment, and to increase tax base for the taxing jurisdiction within the City's corporate limits. These public purpose goals are not attainable in the foreseeable future without the intervention of the Authority and City in the normal development process. Section C Project Area Boundary No Change The expanded boundaries of the Project area are shown in Exhibit "A" "Project Area Boundary Map". All land included in the Project Area is within the legal boundaries of the City Section D Statement of Authority No Change The Authority is authorized to modify a project pursuant to Minnesota Statutes Sections 469.001 to 469.047 (the HRA Act) within boundaries of municipalities. The project as contemplated by this Plan consists of a Redevelopment Project in the HRA Act, pursuant to Section 469.002, Subdivision 14 and Minnesota Statutes, Section 469.028, Subdivision 3. II. REDEVELOPMENT PROJECT Section A Redevelopment Plan Objectives No Change The Authority and City, through the implementation of this Plan, seek to achieve the following objectives: 1. To provide logical and organized land use for the Project Area consistent with the Comprehensive Land Use Plan and the zoning ordinance of the City. 2. To promote the prompt development of property in the Project Area with a minimal adverse impact on the environment SPRINGSTED Pagel Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota 3. To provided adequate streets, utilities, and other public improvements and facilities to enhance the Project Area and the City for new and existing development. 4. To enhance the project Area and the City and surrounding area by retaining current, and providing additional employment opportunities for the residents of the City and surrounding community. 5. To increase the City's tax base. 6. To afford existing business in the City the opportunity to expand or relocate within the Project Area. 7. To stimulate development and investment within the project Area by private interest by providing land of suitable size and configuration to permit it's economic and appropriate development. Section B Land Use No Change 1. Current use: a. The project is partially vacant and undeveloped and used for both industrial and farming purposes. The Area is principally Zoned 1-1 and 1-2, which provides for the establishment of warehousing, light and heavy industrial and manufacturing development. 2. Future Land Use: a. It is anticipated that the Project Area will develop consistent with existing zoning districts. The uses of the Project Area proposed are consistent with the Plan, the Lakeville Comprehensive Plan, and, to the knowledge of the City and Authority at this time, all other federal state and local laws and regulation. Section C Development Standards The Authority and City will consider, among other things, the following factors when evaluating development proposals in all phases: 1. Degree to which development objectives are provided for or enhanced. 2. Consistency with this Plan and the Lakeville Comprehensive Plan. 3. Ability of proposed tax increment projects to generate enough annual tax increment to retire the debt created by the project. 4. Developer's ability to perform both from a standpoint of financial ability to perform and the necessary experience and expertise to complete the proposed development. 5. Displaced Project Area property owners and tenants will be given priority over competing projects of similar scale and magnitude. Section D Environmental Controls It is presently anticipated that the proposed development in the Project Area will not present major environment problems. All municipal actions, public improvements, and private development will be carried out in a manner that will comply with applicable environmental standards. Then environmental controls to be applied within the Area are contained within the codes an ordinance of the City of Lakeville. The Minnesota Code of Agency Rules (6 MCAR 3.021-3.056) defines Minnesota's environmental policy. The threshold factor for the industrial/commercial projects on second class cities is 1,000,000 square feet (gross floor area). Projects above this threshold would require an Environmental Impact Statement. There are no properties on the National Historic Register of Historic Places within the Project Area. Section E Redevelopment Activities The Authority and the City proposes to implement this plan in phases. The activities of this Plan are described as follows: SPRINGSTED Page 2 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota 1. City Activities — Original Plan a. To acquire the land from the current owners and dedicate the land to an acceptable developer for the purposes of constructing a 150,000 square foot office, warehouse and manufacturing facility. 2. City Activities — Plan Modification a. A full discussion of the proposed City Activities can be found in the Tax Increment District Nos. 4, 13, 14, 15, 16, 17, 18 and 19 Plans prepared by the City and is hereby adopted by reference. 3. Private Activities — Original plan a. Phase One (TIF# 4) included a major private development project — Please See TIF #4 Plan. b. Phase Two (TIF #13) included a major private development project - Please See TIF #13 Plan. c. Phase Three (TIF #14) included a major private development project — Please See TIF #14 Plan. d. Phase Four (TIF #15) included a major private development project — Please See TIF #15 Plan. e. Phase Five (TIF #16) included a major private development project. — Please See TIF #16 Plan. f. Phase Six (TIF #17) — Please See TIF #17 Plan g. Phase Seven (TIF #18) — Please See TIF # 18 Plan h. Phase Eight (TIF #19) — Please See TIF # 19 Plan Section F Project Cost Estimates A full description of project costs is provided in Tax Increment Financing District No. 19 project budget. Section G Relocation No Change Phase One of the Plan requires no relocation. In subsequent phases where development proposals require the acquisition of either commercial, industrial or residentially occupied parcels of land, the displaced party or parties shall be eligible for and receive those relocation benefits in conformance with the Minnesota Uniform Relocation Act. Minnesota Statutes, Section 117.50-56. The relocation plan will be part of any tax increment financing plan that provides for acquisition and subsequent displacement. Section H Development Contracts No Change The City and Authority will not authorize any public improvement or facilities projects nor acquire any property for development which will be wholly or partially funded by the use of tax increment financing without first having secured development contracts. The Development Contracts shall require the developer to among other things, cause to be constructed an industrial facility of at least a specified minimum cost, and having a specified minimum Assessor's Market Value; to complete the work by a specified date pursuant to plans and specifications submitted to and building permits issued by or on behalf of the City, and pursuant to an and in accordance with all other applicable governmental regulations; and to demonstrate its financial capability for doing so. Section I Operation of Public Improvements No Change All public improvements constructed under the provisions of this program shall be operated by the City of Lakeville in the same manner as all publicly owned streets and utilities. SPRINGSTED Page 3 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota Section J Administration of Project No Change The Lakeville Housing Authority shall be responsible for seeing that contents of this plan are promoted, implemented and enforced. The Executive Director shall be delegated day by day responsibilities while the Board of Directors shall make all policy regarding the Project Area. Administrative maintenance activities will be funded out of tax increment revenue and other HRA funds. Section K Modification of Plan No Change Modifications or revisions of this Plan which change the permitted uses; modify the Project Area Boundary; set forth, revise, or modify and Developers Contract with respect to any part of the Project or terminate all or any part of the Project require approval of such modifications by the Authority and the City, upon notice and other public hearing as required for the adoption of this Plan and in accordance with Section 462.525, Subdivision 6 of the Act. SPRINGSTED Page 4 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota PART II TAX INCREMENT FINANCING PLAN NO. 19 Section A Definitions The terms defined in this section have the meanings given herein, unless the context in which they are used indicates a different meaning: "Authority" means the Housing and Redevelopment Authority for the City of Lakeville. "C�" means the City of Lakeville, Minnesota; also referred to as a "Municipality". "City Council" means the City Council of the City; also referred to as the "Governing Body". 'County" means Dakota County, Minnesota "Redevelopment Project Area" means Airlake Redevelopment Project No. 1 in the City, which is described in the corresponding Redevelopment Plan. "Redevelopment Plan" means the Redevelopment Plan for the Redevelopment Project Area. "Project Area" means the geographic area of the Redevelopment Project Area. "School District" means Independent School District No. 192, Minnesota. "State" means the State of Minnesota. "TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1794, both inclusive. "TIF District" means Tax Increment Financing (Economic Development) District No. 19. "TIF Plan" means the tax increment financing plan for the TIF District (this document). Section B Statutory Authorization See Section I.D. of the Redevelopment Plan for the Redevelopment Project Area. Section C Statement of Need and Public Purpose See Section LA and I.B of the Redevelopment Plan for the Redevelopment Project Area. Section D Statement of Objectives See Section ILA of the Redevelopment Plan for the Redevelopment Project Area. Section E Designation of Tax Increment Financing District as an Economic Development District 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: SPRINGSTED Page 5 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota (1) it will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality; (2) it will result in increased employment in the state; or (3) it will result in preservation and enhancement of the tax base of the state. The TIF District qualifies as an economic development district in that the proposed development described in this TIF Plan (see Section 1) meets the criteria listed above in (2) and (3). Without establishment of the TIF District, the proposed development would not occur within the City. The proposed development will also result in increased employment and enhancement of the tax base in both the City and the State. Tax increments from an economic development district must be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or other assistance in which at least 85% of the square footage of the facilities to be constructed are used for any of the following purposes: (1) manufacturing or production of tangible personal property, including processing, resulting in the change of the condition of the property; (2) warehousing, storage and distribution of tangible personal property, excluding retail sales; (3) research and development related to the activities listed in (1) or (2) above; (4) telemarketing if that activity is the exclusive use of the property; (5) tourism facilities (see M.S. Section 469.174, Subd. 22); (6) qualified border retail facilities (see M.S. Section 469.176, Subd. 4c); or (7) space necessary for and related to the activities listed in (1) through (6) above. Section F Duration of the TIF District Economic development districts may remain in existence 8 years from the date of receipt by the Authority and City of the first tax increment. The Authority and City anticipate that the TIF District will remain in existence the maximum duration allowed by law (projected to be through the year 2024, assuming first increment is received in 2016). The district will remain open through the year 2025 if the first collection of increment is in taxes payable 2017. The Authority and City may decertify the TIF District earlier if fulfillment of all District obligations occurs prior to the statutory maximum duration of 9 total years. Section G Property to be Included in the TIF District The TIF District is an approximate 32 acre area of land located within the Project Area. A map showing the location of the TIF District is shown in Exhibit I. The boundaries and area encompassed by the TIF District are described below: Parcel ID Number Le al Descrition 22-77001-01-013 TORO AIRLAKE IND PARK 2ND ADD SPRINGSTED Page 6 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota ALL SOFRROFNW 1/4 EX S 650 FT & EX N 630 22-03400-26-016 * FT OF S 1280 FT OF W 1093 FT EX W 1309.70 FT LYING S OF STH 50 SUBJ TO PARCEL 3 DAKOTA COUNTY RNV MAP #166 only a portion of parcel (approximately 14 acres) to be included within boundaries of the proposed TIF District. Replatting of the parcel expected to occur in conjunction with establishment of the District and prior to start of construction and certification of the District. The area encompassed by the TIF District shall also include all street or utility right-of-ways located upon or adjacent to the property described above. Section H Property to be Acquired in the TIF District The Authority and City may acquire and sell any or all of the property located within the TIF District; however, the Authority and City does not anticipate acquiring any such property at this time. Section I Specific Development Expected to Occur Within the TIF District The proposed development is expected to consist of an approximately 199,615 square foot industrial warehouse facility expansion. The development will result in increased employment (by adding a projected 100 new jobs) within the City, in compliance with statutory requirements. It is anticipated tax increment will be used to finance a portion of the site development and infrastructure costs. In addition, the Authority and City anticipate using available tax increment for related administrative expenses and any other eligible expenditures associated with the development of the site. Construction of the facility is projected to start in 2014. The project is expected to be partially completed by December 31, 2014 and fully constructed by December 31, 2015, and be 100% assess and on the tax rolls as of January 2, 2016 for taxes payable in 2017. At the time this document was prepared there were no signed construction contracts with regards to the above described development. Section J Findings and Need for Tax Increment Financing In establishing the TIF District, the City makes the following findings: (1) The TIF District qualifies as an economic development district; See Section E of this document for the reasons and facts supporting this finding. (2) The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future, and the increased market value of the site that could reasonably be expected to occur without the use of tax increment would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the TIF Plan. Factual basis: Proposed development not expected to occur.- SPRINGSTED Page 7 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota The project includes the development of an approximately 199,615 square foot expansion of an industrial warehouse facility. The proposed developer of the site has submitted information to the city demonstrating that the development of this site is not financially feasible without the assistance provided in this TIF Plan. The City has determined that the proposed development would not occur but for the financial assistance provided in this TIF Plan because of the increased costs related to site development, infrastructure including street improvements of east/north to Hwy 50 and building construction. Due to the high costs of investment for the proposed expansion, including site improvements and infrastructure costs incurred by the developer in conjunction with development of the project, the developer has stated that the project as proposed would not occur without the financial assistance provided by the City, as it would not be economically feasible without financial assistance. The City finds the use of tax increment necessary to finance a portion of the site improvements and infrastructure street improvement costs to facilitate development of the expansion and developer investment. The City anticipates providing financial assistance on a pay-as-you-go basis. No higher market value expected. The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the TIF Plan. Without improvements the City has no reason to expect that significant development would occur without assistance similar to that provided in this plan. For the same reasons that the desired development described above is not feasible without tax increment assistance, the City believes that no alternative development is likely to occur without similar assistance. To summarize the basis for the City's findings regarding alternative market value, in accordance with Minnesota Statutes, Section 469.175, Subd. 3(d), the City makes the following determinations: a. The City's estimate of the amount by which the market value of the site will increase without the use of tax increment financing is $0 (for the reasons described above), except some unknown amount of appreciation. b. If the proposed development to be assisted with tax increment occurs in the District, the total increase in market value would be approximately $9,025,215, including the value of the building (See Exhibit V). C. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $1,081,726 (See Exhibit V). d. Even if some development other than the proposed development were to occur, the City finds that no alternative would occur that would produce a market value increase greater than $7,943,489 (the amount in clause b less the amount in clause c) without tax increment assistance. (3) The TIF Plan would afford maximum opportunity, consistent with the sound needs of the City as a whole, for development of the Project Area by private enterprise. Factual basis: The proposed development is the construction of an industrial warehouse facility and office to be constructed in the Project Area that is proposed to create approximately 100 new jobs in the City, while retaining these jobs in the State, plus create substantial new tax base for the City and the State. The development clearly meets the City's economic development goals in terms of tax base expansion, job retention, and wage levels. (4) The TIF Plan conforms to general plans for development of the City as a whole. SPRINGSTED Page 8 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota Factual basis: The City Planning Commission has reviewed the TIF Plan and supporting documents and following subdivision and replatting of the property within the District as identified in Section G can make the determination that the development proposed in the TIF Plan conforms to the City comprehensive plan. Section K Estimated Public Costs The estimated public costs of the TIF District are listed below. Such costs are eligible for reimbursement from tax increments of the TIF District. Land/building acquisition 0 Site Improvements/preparation costs 1,023,941 Utilities 0 Other qualifying Improvements 0 Construction of affordable housing 0 Bond principal payments 0 Bond interest payments 0 Loan Interest payments 0 Administrative expenses 53.891 Total $1,077,832 The Authority and City anticipate using tax increment to the extent available to assist with financing a portion of the site improvements and infrastructure costs, related administrative expenses, and other TIF -eligible expenditures as necessary and related to development of the project. The Authority and City reserve the right to administratively adjust the amount of any of the items listed above or to incorporate additional eligible items, so long as the total estimated public cost is not increased. Section L Estimated Sources of Revenue Tax increment revenue 1,077,832 Interest on invested funds 0 Loan proceeds 0 Special assessments 0 Rent/lease revenue 0 Grants 0 Total $1,077,832 The Authority and City anticipate providing financial assistance on a pay-as-you-go basis for site improvement and infrastructure costs, as well as other TIF -eligible expenses related to the proposed development. As tax increments are collected from the TIF District in future years, a portion of these taxes will be used by the Authority and City to reimburse the developer/owner for public costs incurred (see Section K). The Authority and City reserve the right to finance any or all public costs of the TIF District using pay-as-you-go assistance, internal funding, general obligation or revenue debt (referred to together as "TIF Bonds"), or any other financing mechanism authorized by law. The Authority and City also reserve the right to use other sources of revenue legally applicable to the Project Area to pay for such costs including, but not limited to, special assessments, utility revenues, federal or state funds, and investment income. SPRINGSTED Page 9 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota Section M Estimated Amount of Bonded Indebtedness The maximum principal amount of bonds (as defined in the TIF Act) secured in whole or part with tax increment from the TIF District is $1,077,832. The Authority and City currently plan to finance the improvement costs in the form of a pay -as -you go revenue note, but reserve the right to issue bonds in any form, including without limitation any interfund loan with interest not to exceed the maximum permitted under Section 469.178, subd. 7 of the TIF Act. Section N Original Net Tax Capacity The County Auditor shall certify the original net tax capacity of the TIF District. This value will be equal to the total net tax capacity of all property in the TIF District as certified by the State Commissioner of Revenue. For districts certified between January 1 and June 30, inclusive, this value is based on the previous assessment year. For districts certified between July 1 and December 31, inclusive, this value is based on the current assessment year. The Estimated Market Value of all property within the TIF District as of January 2, 2014, for taxes payable in 2015, is projected to be $7,275,169 with an estimated tax capacity value of $144,753, which is estimated to be the original net tax capacity of the TIF District upon establishment and subsequent certification. Each year the County Auditor shall certify the amount that the original net tax capacity has increased or decreased as a result of: (1) changes in the tax-exempt status of property; (2) reductions or enlargements of the geographic area of the TIF District; (3) changes due to stipulation agreements or abatements; or (4) changes in property classification rates. Section 0 Original Tax Capacity Rate The County Auditor shall also certify the original tax capacity rate of the TIF District. This rate shall be the sum of all local tax rates that apply to property in the TIF District. This rate shall be for the same taxes payable year as the original net tax capacity. In future years, the amount of tax increment generated by the TIF District will be calculated using the lesser of (a) the sum of the current local tax rates at that time or (b) the original tax capacity rate of the TIF District. At the time this document was prepared, the sum of all local tax rates that apply to property in the TIF District, for taxes levied in 2014 and payable in 2015, was not yet available. When this total becomes available, the County Auditor shall certify this amount as the original tax capacity rate of the TIF District. For purposes of estimating the tax increment generated by the TIF District, the sum of the local tax rates for taxes levied in 2013 and payable in 2014, is 134.387% as shown below. Total 134.387% SPRINGSTED Page 10 2013/2014 Taxing Jurisdiction Local Tax Rate City of Lakeville 40.696% Dakota County 31.827% ISD #192 56.326% Other 5.538% Total 134.387% SPRINGSTED Page 10 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota Section P Projected Retained Captured Net Tax Capacity and Projected Tax Increment The Authority and City anticipate that the project will begin construction in 2014 and be partially completed on December 31, 2014 and 100% completed by December 31, 2015, creating a total tax capacity for TIF District No. 19 of $290,770 as of January 2, 2016. The captured tax capacity as of that date is estimated to be $88,935. The first year of tax increment is estimated to be $18,395 payable in 2016 (as partial value is achieved). A complete schedule of estimated tax increment from the TIF District is shown in Exhibit IV. The estimates shown in this TIF plan assume that commercial class rates remain at 1.5% of the estimated market value up to $150,000 and 2.0% of the estimated market value over $150,000, and assume 3% annual increases in market values. Each year the County Auditor shall determine the current net tax capacity of all property in the TIF District. To the extent that this total exceeds the original net tax capacity, the difference shall be known as the captured net tax capacity of the TIF District. The County Auditor shall certify to the Authority and City the amount of captured net tax capacity each year. The Authority and City may choose to retain any or all of this amount. It is the Authority and City's intention to retain 100% of the captured net tax capacity of the TIF District. Such amount shall be known as the retained captured net tax capacity of the TIF District. Exhibit II gives a listing of the various information and assumptions used in preparing a number of the exhibits contained in this TIF Plan, including Exhibit III which shows the projected tax increment generated over the anticipated life of the TIF District. Section Q Use of Tax Increment Each year the County Treasurer shall deduct 0.36% of the annual tax increment generated by the TIF District and pay such amount to the State's General Fund. Such amounts will be appropriated to the State Auditor for the cost of financial reporting and auditing of tax increment financing information throughout the state. Exhibit III shows the projected deduction for this purpose over the anticipated life of the TIF District. The Authority and City have determined that it will use 100% of the remaining tax increment generated by the TIF District for any of the following purposes: (1) pay for the estimated public costs of the TIF District (see Section K) and County administrative costs associated with the TIF District (see Section T); (2) pay principal and interest on tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (3) accumulate a reserve securing the payment of tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (4) pay all or a portion of the county road costs as may be required by the County Board under M.S. Section 469.175, Subdivision 1a; or (5) return excess tax increments to the County Auditor for redistribution to the City, County and School District. SPRINGSTED Page 11 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota Tax increments from property located in one county must be expended for the direct and primary benefit of a project located within that county, unless both county boards involved waive this requirement. Tax increments shall not be used to circumvent levy limitations applicable to the City. Tax increment shall not be used to finance the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the State or federal government, or for a commons area used as a public park, or a facility used for social, recreational, or conference purposes. This prohibition does not apply to the construction or renovation of a parking structure or of a privately owned facility for conference purposes. If there exists any type of agreement or arrangement providing for the developer, or other beneficiary of assistance, to repay all or a portion of the assistance that was paid or financed with tax increments, such payments shall be subject to all of the restrictions imposed on the use of tax increments. Assistance includes sale of property at less than the cost of acquisition or fair market value, grants, ground or other leases at less then fair market rent, interest rate subsidies, utility service connections, roads, or other similar assistance that would otherwise be paid for by the developer or beneficiary. Section R Excess Tax Increment In any year in which the tax increments from the TIF District exceed the amount necessary to pay the estimated public costs authorized by the TIF Plan, the Authority and City shall use the excess tax increments to: (1) prepay any outstanding tax increment bonds; (2) discharge the pledge of tax increments thereof; (3) pay amounts into an escrow account dedicated to the payment of the tax increment bonds; or (4) return excess tax increments to the County Auditor for redistribution to the City, County and School District. The County Auditor must report to the Commissioner of Education the amount of any excess tax increment redistributed to the School District within 30 days of such redistribution. Section S Tax Increment Pooling and the Five Year Rule At least 80% of the tax increments from the TIF District must be expended on activities within the district or to pay for bonds used to finance the estimated public costs of the TIF District (see Section E for additional restrictions). No more than 20% of the tax increments may be spent on costs outside of the TIF District but within the boundaries of the Project Area, except to pay debt service on credit enhanced bonds. All administrative expenses are considered to have been spent outside of the TIF District. Tax increments are considered to have been spent within the TIF District if such amounts are: (1) actually paid to a third party for activities performed within the TIF District within five years after certification of the district; (2) used to pay bonds that were issued and sold to a third party, the proceeds of which are reasonably expected on the date of issuance to be spent within the later of the five-year period or a reasonable temporary period or are deposited in a reasonably required reserve or replacement fund. (3) used to make payments or reimbursements to a third party under binding contracts for activities performed within the TIF District, which were entered into within five years after certification of the district; or SPRINGSTED Page 12 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota (4) used to reimburse a party for payment of eligible costs (including interest) incurred within five years from certification of the district. Beginning with the sixth year following certification of the TIF District, at least 80% of the tax increments must be used to pay outstanding bonds or make contractual payments obligated within the first five years. When outstanding bonds have been defeased and sufficient money has been set aside to pay for such contractual obligations, the TIF District must be decertified. The Authority and City do not expect that allowable pooling expenditures will be made outside of the TIF District but within the Project Area (along with allowable administrative expenses), but such expenditures are expressly authorized in this TIF Plan. Section T Limitation on Administrative Expenses Administrative expenses are defined as all costs of the Authority and City other than: (1) amounts paid for the purchase of land; (2) amounts paid for materials and services, including architectural and engineering services directly connected with the physical development of the real property in the project; (3) relocation benefits paid to, or services provided for, persons residing or businesses located in the project; (4) amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to section 469.178; or (5) amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clause (1) to (3). Administrative expenses include amounts paid for services provided by bond counsel, fiscal consultants, planning or economic development consultants, and actual costs incurred by the County in administering the TIF District. Tax increments may be used to pay administrative expenses of the TIF District up to the lesser of (a) 10% of the total tax increment expenditures authorized by the TIF Plan or (b)10% of the total tax increments received by the TIF District. Section U Limitation on Property Not Subject to Improvements - Four Year Rule If after four years from certification of the TIF District no demolition, rehabilitation, renovation, or qualified improvement of an adjacent street has commenced on a parcel located within the TIF District, then that parcel shall be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial reconstruction or rebuilding of an existing street. The Authority and City must submit to the County Auditor, by February 1 of the fifth year, evidence that the required activity has taken place for each parcel in the TIF District. If a parcel is excluded from the TIF District and the Authority and City or owner of the parcel subsequently commences any of the above activities, the Authority and City shall certify to the County Auditor that such activity has commenced and the parcel shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF District. Section V Estimated Impact on Other Taxing Jurisdictions Exhibit IV shows the estimated impact on other taxing jurisdictions if the maximum projected retained captured net tax capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The Authority and City SPRINGSTED Page 13 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota believe that there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed development would not have occurred without the establishment of the TIF District and the provision of public assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the development therein becomes part of the general tax base. The fiscal and economic implications of the proposed tax increment financing district, as pursuant to Minnesota Statutes, Section 469.175, Subdivision 2, are listed below. 1. The total amount of tax increment that will be generated over the life of the district is estimated to be $1,081,726. 2. To the extent the facility in the proposed TIF District generates any public cost impacts on city -provided services such as police and fire protection, public infrastructure, and borrowing costs attributable to the district, such costs will be levied upon the taxable net tax capacity of the City, excluding that portion captured by the District. The City does not anticipate issuing bonds in conjunction with this project. 3. The amount of tax increments over the life of the district that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same, is estimated to be $453,387. 4. The amount of tax increments over the life of the district that would be attributable to county levies, assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same is estimated to be $256,186. 5. No additional information has been requested by the county or school district that would enable it to determine additional costs that will accrue to it due to the development proposed for the district. Section W Prior Planned Improvements The Authority and City shall accompany its request for certification to the County Auditor (or notice of district enlargement), with a listing of all properties within the TIF District for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan. The County Auditor shall increase the original net tax capacity of the TIF District by the net tax capacity of each improvement for which a building permit was issued. The following building permits have been issued in the last 18 months in conjunction with the properties within the TIF District: Permit Number Issue Date Type of Improvement Permit Value Permit #128644 7/22/13 Small Office/Warehouse Remodel $20,000 Permit #129938 9/30/13 Office Remodel $44,000 Section X Development Agreements If within a project containing an economic development district, more than 10% of the acreage of the property to be acquired by the Authority and City is purchased with tax increment bonds proceeds (to which tax increment from the property is pledged), then prior to such acquisition, the Authority and City must enter into an agreement for the development of the property. Such agreement must provide recourse for the Authority and City should the development not be completed. The Authority and City anticipate entering into an agreement for development, but does not anticipate acquiring any property located within the TIF District. SPRINGSTED Page 14 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota Section Y Assessment Agreements The City may, upon entering into a development agreement, also enter into an assessment agreement with the developer, which establishes a minimum market value of the land and improvements for each year during the life of the TIF District. The assessment agreement shall be presented to the County or City Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land, and so long as the minimum market value contained in the assessment agreement appears to be an accurate estimate, shall certify the assessment agreement as reasonable. The assessment agreement shall be filed for record in the office of the County Recorder of each county where the property is located. Any modification or premature termination of this agreement must first be approved by the City, County and School District. The Authority and City do not anticipate entering into an assessment agreement. Section Z Modifications of the Tax Increment Financing Plan Any reduction or enlargement in the geographic area of the Project Area or the TIF District; increase in the amount of bonded indebtedness to be incurred; increase in the amount of capitalized interest; increase in that portion of the captured net tax capacity to be retained by the Authority and City; increase in the total estimated public costs; or designation of additional property to be acquired by the Authority and City shall be approved only after satisfying all the necessary requirements for approval of the original TIF Plan. This paragraph does not apply if: (1) the only modification is elimination of parcels from the TIF District; and (2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of those parcels in the TIF District's original net tax capacity, or the Authority and City agree that the TIF District's original net tax capacity will be reduced by no more than the current net tax capacity of the parcels eliminated. The Authority and City must notify the County Auditor of any modification that reduces or enlarges the geographic area of the TIF District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date of certification. Section AA Administration of the Tax Increment Financing Plan Upon adoption of the TIF Plan, the Authority and City shall submit a copy of such plan to the Minnesota Department of Revenue. The Authority and City shall also request that the County Auditor certify the original net tax capacity and net tax capacity rate of the TIF District. To assist the County Auditor in this process, the Authority and City shall submit copies of the TIF Plan, the resolution establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. The Authority and City shall also send the County Assessor any assessment agreement establishing the minimum market value of land and improvements in the TIF District, and shall request that the County Assessor review and certify this assessment agreement as reasonable. The County shall distribute to the Authority and City the amount of tax increment as it becomes available. The amount of tax increment in any year represents the applicable property taxes generated by the retained captured net tax capacity of the TIF District. The amount of tax increment may change due to development anticipated by the TIF Plan, other development, inflation of property values, or changes in property classification rates or formulas. In administering and implementing the TIF Plan, the following actions should occur on an annual basis: SPRINGSTED Page 15 Housing and Redevelopment Authority for the City of Lakeville and City of Lakeville, Minnesota (1) prior to July 1, the Authority and City shall notify the County Assessor of any new development that has occurred in the TIF District during the past year to insure that the new value will be recorded in a timely manner. (2) if the County Auditor receives the request for certification of a new TIF District, or for modification of an existing TIF District, before July 1, the request shall be recognized in determining local tax rates for the current and subsequent levy years. Requests received on or after July 1 shall be used to determine local tax rates in subsequent years. (3) each year the County Auditor shall certify the amount of the original net tax capacity of the TIF District. The amount certified shall reflect any changes that occur as a result of the following: (a) the value of property that changes from tax-exempt to taxable shall be added to the original net tax capacity of the TIF District. The reverse shall also apply; (b) the original net tax capacity may be modified by any approved enlargement or reduction of the TIF District; (c) if laws governing the classification of real property cause changes to the percentage of estimated market value to be applied for property tax purposes, then the resulting increase or decrease in net tax capacity shall be applied proportionately to the original net tax capacity and the retained captured net tax capacity of the TIF District. The County Auditor shall notify the Authority and City of all changes made to the original net tax capacity of the TIF District. Section AB Filing TIF Plan, Financial Reporting and Disclosure Requirements The Authority and City will file the TIF Plan, and any subsequent amendments thereto, with the Commissioner of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes, Section 469.175, subdivision 4A. The Authority and City will comply with all reporting requirements for the TIF District under Minnesota Statutes, Section 469.175, subdivisions 5 and 6. SPRINGSTED Page 16 Exhibit I A Map of Tax Increment Financing (Economic Development) District No. 19 Within Airlake Redevelopment Project No.1 SPRINGSTED Page 17 � 4• I i =.,. s';rs' ais^fa'-:«: •l. Yw��• ,R'a; rr sRf''k". Kr;^J'z `i�$r ;°m�.,k.* +._. •-:^f posed Tax Increment F EconomcDevebpmenl) District No. ,_ i' X YY11' X � XXSYY' Y 1 wear � l eWXnrwr Exhibit I -B Map of Boundaries of Proposed Tax Increment Financing (Economic Development) District No. 19 FULFORD ADDITION (PROPOSED) w war •• % ..._M X.K,._.w �—"'a°""+.XiO�..: swar•ar! i5 .__ - - ' :,-:7- 7 z,= SPRINGSTED Page 18 Assumptions Report Exhibit 11 City of Lakeville, Minnesota Tax Increment Financing (Economic Development) District No. 19 Proposed BTD Manufacturing Expansion (199,615 SF) Draft TIF Plan Exhibits: EMV $14.6 Million, 3% Inflation, Maximum Term Type of Tax Increment Financing District Maximum Duration of TIF District Projected Certification Request Date Decertification Date Base Estimated Market Value Original Net Tax Capacity Economic Development 8 years from 1st increment 10/31/14 12/31/24 (9 Years of Increment) 2014/2015 $7,275,169 $144,753 Assessment/Collection Year 2014/2015 2015/2016 2016/2017 2017/2018 Base Estimated Market Value $7,275,169 $7,275,169 $7,275,169 $7,275,169 Estimated Decrease in Value - Bldg Demo $0 $0 $0 Estimated Increase in Value- New Construction 0 1,161,143 7,338,325 7,558,475 Total Estimated Market Value Total Net Tax Capacity 7,275,169 8,436,311 14,613,494 14,833,644 $144,753 $167,226 $290,770 $295,173 City of Lakeville 40.696% Dakota County 31.827% ISD# 192 56.326% Other (V Watershed) 5.538% Local Tax Capacity Rate 134.387% 2013/2014 Fiscal Disparities Contribution From TIF District 39.0927% Administrative Retainage Percent (maximum = 10%) 5.00% Pooling Percent 0.00% Bonds Note (Pay -As -You -Go) Bond Dated NA Note Dated 08/01/15 Bond Rate NA ;Note Rate 0:00°!0 Bond Amount NA Note Amount $1,023,941 Present Value Amount Notes Calculation assumes no changes to future tax rates and class rates and includes 3% market value inflator. EMV: $14.6 Mllion - High end of estimated value range. Assumes project is complete by December 31, 2015. Utilized Pay 14 Tax Rates and Net Tax Capacity values. Assumes project is certified by 6/30/15 and pay-as-you-go financing. SPRINGSTED Page 19 y.. Q k W (6 � aCt C14 rn N O o N CopO O O M LqPI Ci t()(Ococowtonn 000 M £ o R Ln ) t0 C N 000 r- n 000 O LO M pp M O (O M M (O M 0 T 0 N M c M C 7 N co C Vi t0 O a M n 0 �pAp W H O Ln 00 � J 3 0 cO o �ONp� (q�.N--aac (MO n V Oi M w 0 co N r O CC N E1 � Q U 0 0 0 0 0 0 o e e nnnnnnnnn aO co ao 00 ao ao 0o ao Go N ' U N M E U M M 0 M M M M co M 000 to n 0 NNV � M N 0M0pp W (O M --Np- N m00O �cl QVC 01 A, 0000 U U d F- CDE o tnNMfONMOu'1r ano co OctivNNt�NN p E H ° am � 0 0 LO (D (� (O ccoo � Z K �LL8 Cl) LL C y.� N 0 0 0 0 0 0 tM M � nna�ne�nn�{nnQnpn C ry Op C 01 V R� R� R R EQ! o d 0. 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U too c6 C 0) F- O.L. co co o N C c v O z 15 n Cc O 0 U ° E 2 O s rO.• AE o c oat0i m ` In ami °' � d V O 6 N w w N t O N U C C N w 3 3W U)w r N U) U) n H z a Exhibit VI Market Value Analysis Report City of Lakeville, Minnesota Tax Increment Financing (Economic Development) District No. 19 Proposed BTD Manufacturing Expansion (199,615 SF) Draft TIF Plan Exhibits: EMV $14.6 Million, 3% Inflation, Maximum Tern Assumptions Present Value Date P.V. Rate - Gross T.I. 08/01/15 0.00% Increase in EMV With TIF District $9,025,215 Less: P.V of Gross Tax Increment 1,081,726 Subtotal $7,943,489 Less: Increase in EMV Without TIF 0 Difference $7,943,489 Annual Present Gross Tax Value @ Year Increment 0.00% 1 2016 18,395 18,395 2 2017 119,516 119,516 3 2018 123,121 123,121 4 2019 126,833 126,833 5 2020 130,656 130,656 6 2021 134,594 134,594 7 2022 138,651 138,651 8 2023 142,829 142,829 9 2024 147,131 147,131 $1,081,726 $1,081,726 SPRINGSTED Page 22 , SunThisweek I BTD Manufacturing to expand in Lakeville sunthisweek.com Page 1 of 2 http://sunth isweek. com/2014/09/18/btd-man ufacturing-to-expan d-in4akeviIIe/ BTD Manufacturing to expand in Lakeville By Laura Adelmann Company projects growth, will add high -pay jobs Another company in Lakeville's Airlake Industrial Park area is set for a major expansion. BTD Manufacturing, a custom metal manufacturer, is planning to expand operations and consolidate one of its three locations in Lakeville into space in the former Toro building off Cedar Avenue at County Road 70. The building's owner, Fulford Group LLC plans a $14 million, 200,000 -square -foot expansion of the space to accommodate BTD's plans. BTD Manufacturing President Paul Gintner said business is strong and the company anticipates continued growth that will add to Lakeville's employment base. The expansion news comes on the heels of another Lakeville company's positive growth projections that drove expansion plans currently underway. Last month, Menasha Packaging broke ground on a $7 million expansion of its Airlake Industrial Park location, adding 15 jobs. The BTD Manufacturing project is to start this year and is expected to be completed by next July. Company officials say the expansion will add 100 new well -paying jobs within the first two years of operation. Gintner said the company projects 400-450 total jobs in this site over the next five to seven years. Entry-level jobs at BTD start at $14.05 per hour with a 12 percent increase in wages to work later shifts, according to Gintner. He said the average starting wage is almost $18 per hour at the company. They also employ welders and offer professional positions in a variety of areas including human resources, engineers, sales and management. Lakeville City Council members indicated support for providing tax increment financing to offset approximately $4.3 million in eligible costs associated with the expansion at a Sept. 15 work session. Council Member Colleen LaBeau said she was impressed with the company and its plans. "It's just encouraging to see that you're trying to groom it for people in Lakeville to stay in Lakeville and still have a job that they can make a living at," LaBeau said. Gintner said they like Lakeville, and have found quality workers in the city. "We think we've got something we can really grow here," he said. http://sunthisweek.com/2014/09/18/btd-manufacturing-to-expand-in-lakeville/ 9/18/2014 SunThisweek I BTD Manufacturing to expand in Lakeville Page 2 of 2 Community Development Director Dave Olson said Springsted will prepare the TIF plan and resolutions to start the process that includes a public hearing and notifications of the county and school district before it is before council for action later this year. BTD Manufacturing was founded by Earl Rasmussen and Paul White in 1979 as Bismarck Tool and Die, which moved to Detroit Lakes in 1980. In the early 2000s, the company acquired several smaller businesses including Precision Machine and Performance Tool and Die. BTD Manufacturing's Lakeville operations started in the former Performance Tool & Die building in 2005. The company now leases 317,000 square feet of space in three different buildings. Gintner said they plan to bring all operations under one roof and add high-end painting as a service it offers customers, which include John Deere, Toro, Bobcat, Polaris, Honda and Yamaha. BTD Manufacturing also operates facilities in Detroit Lakes, and Otsego, Minn., and in Washington and Illinois. "Keep growing," Council Member Kerrin Swecker said. "Bring it on." http://sunthisweek.com/2014/09/18/btd-manufacturing-to-expand-in-lakeville/ 9/18/2014 Item No, y City of Lakeville Community & Economic Development Memorandum To: Economic Development Commission From: Rick Howden, Economic Development Specialiste Copy: David L. Olson, Community & Economic Development Director Date: October 2, 2014 Subject: Update on 2014 Manufacturers Week Events Once again this year, the City of Lakeville will be recognizing our local manufacturers during Minnesota Manufacturing Week, which will take place October 20th - 24th. We will be hosting our annual reception for manufacturers at Brackett's Crossing Country Club on Tuesday, October 211 from 4:30-6:30pm. In addition to the reception, the City has been working with the Lakeville Area Chamber of Commerce to make visits to targeted manufacturers in the Industrial Park the week before Minnesota Manufacturers Week. The goals of the visits are to conduct business retention visits and to encourage attendance at this year's manufactures reception event. One of the strategic priorities identified in the 2014-2016 Strategic Plan for Economic Development is business retention and expansion. Minnesota Manufacturing week presents a great opportunity to focus on the goals set in the Strategic Plan of, • Existing businesses have expanded by 500,000 square feet by 12/31/16 • An additional 300 jobs have been added at existing businesses by 12/31/16 • 90% of non -retail businesses have been retained between 1/l/14-12/31/16 All EDC Members are invited to attend site visits. At this time the following site visits have been set up. Monday, Oct. 13th 1:OOpm - Progressive Rail Tuesday, Oct. 14th 10:00am - Performance Office Paper Tuesday, Oct. 14th 11:00am - Hearth and Home Technologies Tuesday, Oct. 1411 2:OOpm - Advanced Wireless Wednesday, Oct. 15th 10:00am - J&E Earll Manufacturing Thursday, Oct. 16th 4:OOpm - Hobo, Inc. Recommended Action: No action required. This is an update on the progress of the 2014 Manufacturers Week Events. Idem No. S City of Lakeville Community & Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community and Economic Development Director Copy: Allyn Kuennen, Interim City Administrator Rick Howden, Economic Development Specialist Date: October 3, 2014 Subject: October Director's Report The following is the Director's Report for October, 2014. Building Permit Report The City has issued building permits with a total valuation of $98,874,267 through September. This compares to a total valuation of $111,304,382 through September of 2013. The City issued commercial and industrial permits with a total valuation of $9,040,000 through September compared to a total valuation of $9,986,250 during the same period in 2013. The City has also issued permits for 223 single family homes through September with a total valuation of $76,925,000. This compares to 273 single family home permits through September of 2013 with a total valuation of $85,988,000. Downtown Parking Lot Improvements Work is nearing completion on the City -owned parking lot in the Ben Franklin Block in Downtown. All of the concrete, storm sewer, lighting, and landscaping has been completed for this portion of the project including installation of sidewalks along the west side of the parking lot fronting on Howland Avenue from Upper 208th Street to 207th Street. The final paving of the lot itself is scheduled for the week of October 611. The other portion of the project included the construction of streetscape landscaping in front of the Holyoke Avenue parking lot adjacent to the Art Center. This portion of the project is 95% complete. This project was funded entirely with Dakota County CDA TIF and Redevelopment Incentive Grant funds. Mendell Award Congratulations to Lakeville manufacturer, Mendell, who was recently recognized by Minnesota Business Magazine at their 2014 Manufacturing Awards. Mendell received a Silver award for a midsize company (51 to 250 employees) for overall excellence in the manufacturing industry in Minnesota. Mendell is a medical manufacturer, specializing in precision CNC machining of implantable devices, surgical instruments and diagnostic equipment. ftVee Grocery Store Project The City Council approved an application from HyVee and Tradition Development for a proposed grocery store to be located in the commercial portion of the Spirit of Brandtjen Farm Development located at the intersection of Pilot Knob Road and Co. Rd. 46. The store will include a pharmacy and a sit-down restaurant. In addition, there will be a free-standing gas convenience store that includes a Caribou Coffee with a drive-thru and a four -bay automatic car wash. Grading, street, and utility work is expected to begin this fall with construction of the building starting next spring. HyVee plans to open the store next fall. Comment Letter on Met Council 2040 Transportation Policy Plan Attached please find a letter addressed to the Chair of the Metropolitan Council regarding the draft regional 2040 Transportation Policy Plan. This plan has become an issue with all of the counties in the Region with the exception of Hennepin and Ramsey Counties. This concerns the outlying Metro Counties because of the fact that it does not adequately address the operations, maintenance, and capacity of the regional transportation system and that the proposed plan places too much emphasis on transit improvements and trails and not a sufficient amount on road expansions and upgrades. Staff will continue to forward updates on this issue as it will impact how the City prepares its next Comprehensive Plan Update. MNCAR Expo The City of Lakeville will be an exhibitor at the 8th Annual Minnesota Commercial Association of Realtors (MNCAR) on Wednesday, October 29th. This event allows staff to network with over 500 MNCAR professionals and foster new and existing relationships with the commercial broker community. Lakeville has participated in this event since 2012. Next Meeting Date The next regular meeting of the EDC will be Tuesday, November 25th at 4:30 p.m. October 1, 2014 Susan Haigh, Chair Metropolitan Council 390 Robert St. N. Saint Paul, MN 55101 RE: 2040 Transportation Policy Plan Dear Ms. Haigh: The City of Lakeville has reviewed the draft 2040 Transportation Policy Plan (2040 TPP) in advance of the City's efforts to undertake an update of the Lakeville Comprehensive Plan by December 31, 2018 as required by State Law. The City's review of the 2040 TPP and the comments outlined herein are made in consideration of Lakeville's own vision for growth and development that will continue in the community as well as the guidelines of the Thrive MSP 2040 regional plan. Thrive MSP 2040 and the draft 2040 TPP elevates transportation system planning to a policy level to emphasize a greater correlation between land use and transportation. This has been a fundamental approach to planning in Lakeville since the 1970s and continues with the most recent 2008 Lakeville Comprehensive Plan. However, the 2040 TPP seeks to utilize transportation planning and investment to effect changes in development practices in Suburban Edge communities, such as Lakeville, to align with plans for future expansion of transit services and transitways. The ability to realize this goal of shifting from automobile oriented development to a more balanced approach is good in theory, but requires necessary levels of investment balanced throughout the Twin Cities Metropolitan Area and an overall transportation system that works to support planned development both in a regional and local context. Thrive MSP 2040 assumes no expansion of the 2030 Municipal Urban Service Area (MUSA) to accommodate projected population, household, and employment growth for the Twin Cities Metropolitan Area based on the effects of the Great Recession. Lakeville, however, will need to evaluate the local need to expand the MUSA to allow for continued development based on the land absorption within the MUSA that has occurred since the 2008 Lakeville Comprehensive Plan was adopted. Expansion of the MUSA to 2040 in City ol'Lakeville • 20195 Holyoke Ac. + 1 aiw0le, MN 55044 9-52-I)S54400 + lax J5? -1)g •i 199 + So1Ir/fc rti atelvay iL !_+1'. 'it-, 1:: Cities Ms. Susan Haigh Metropolitan Council Page 2 Lakeville would include additional urban development being planned for areas adjacent to the Cedar Avenue Bus Rapid Transit (BRT) Corridor (Red Line). Thrive MSP 2040 will require that areas adjacent to the Cedar Avenue BRT Corridor (Red Line) provide a minimum residential density of 10 dwelling units per acre, which is greater than the 7 units per acre density that Lakeville committed to within the 2008 Lakeville Comprehensive Plan. For the City to allow this level of development along the Cedar BRT corridor (Red Line), and at a level of 3 to 5 dwelling units per acre for all residential development within the MUSA in Lakeville, Metropolitan Council needs to be prepared to provide transportation system improvements parallel with construction of residential dwellings. Moreover, the investments in transportation system improvements must recognize Lakeville's own strategies for promoting transit in consideration of the community's vision for residential development focusing on centralized transit facilities on 1-35 and Cedar Avenue allowing commuters park and ride options. In terms of economic development, planning and investment in transportation systems from Lakeville's perspective must provide a balanced approach for employment and freight so as to facilitate development of areas of the City planned for commercial, office and industrial uses and not to function only as an expressway to employment centers outside of Lakeville. The 2040 TPP identifies a Current Revenue Scenario and Increased Revenue Scenario for funding operation and maintenance of current transportation systems and as a basis for timing possible capacity improvements to the regional transportation system. The Current Revenue Scenario, with only inflationary increases in revenue (but decreasing State and Federal aid below inflation), severely limits maintenance and operations spending and the ability to undertake capacity improvements to the point that levels of service will degrade and become a brake on regional development. The effects of such a funding scenario would be most significant in Suburban Edge communities where most of the projected growth is to occur through 2040 that require additional infrastructure improvements, yet there are only maintenance and minimal operation improvements designated for both highways and transit for Lakeville. Even under the Increased Revenue Scenario, the additional funding that would be obtained (from unidentified sources), would not be allocated on a regional basis to areas where development is guided to occur at densities dependent on expanded system capacity. In Lakeville, funding is allocated to extend the Cedar Avenue BRT (Red Line) to the existing park and ride facility at 181St Street by 2019. However, the 2040 TPP designates no other capacity improvement to occur on 1-35, Cedar Avenue or other major Ms. Susan Haigh Metropolitan Council Page 3 roadways benefiting Lakeville under either the Current Revenue Scenario or Increased Revenue Scenario. Lakeville stated in the 2008 Lakeville Comprehensive Plan its concern about the lack of planning and financing to improve regional transportation infrastructure necessary to support mandated development forecasts within the community. This concern was raised after a period during which Lakeville proactively addressed increasing traffic congestion by undertaking, at its cost, $28.6 Million in improvements to regional roadway systems, the City Council reached agreement with the Metropolitan Council to expand the Metropolitan Transit District to include Lakeville, and the City is actively participating in the planning for the proposed Interstate 35 (Orange Line) and the Cedar Avenue BRT (Red Line) Corridors. These projects benefit not only Lakeville residents and businesses, but transportation system users in adjacent developing cities and townships. However, these facility improvements alone will not be adequate to provide for a functional transportation system and capacity for Lakeville's forecasted growth through 2030, much less 2040. City officials will need to consider as part of the 2018 Lakeville Comprehensive Plan update whether to incorporate the 10 dwelling units per acre density requirement and policies to promote Transit Oriented Design along the Cedar Avenue corridor, as recommended by Thrive MSP 2040, when there is no funding for extension of the Cedar Avenue BRT (Red Line) south of the 181 It St. park and ride. The 2040 TPP outlines investment and direction plans for how the limited transportation funding that would be available under either the Current Revenue Scenario or Increased Revenue Scenario is to be allocated. The criteria for allocation of these funds is established by the 2040 TPP with minimal regard for regional balance, utilizing social economic and housing data in such a way so as to create built in bias for projects benefiting Urban Center communities over other areas of the Twin Cities Metropolitan Area. Furthermore, the advisory groups recommending the criteria for transportation planning and recommendations for project investment does not include adequate representation necessary for regional balance in the Metropolitan Council's decision process. Lakeville believes that increased representation at a policy making level in advising Metropolitan Council and increased financial spending from Federal, State and regional governments on a regional basis is an absolute necessity to expand the capacity of transportation system infrastructure for Suburban Edge communities, including transit and roadways for automobiles and freight. Without such a commitment to funding needed for transportation system maintenance, operation and capacity expansion, Lakeville will be unable to support projected population, household and employment Ms. Susan Haigh Metropolitan Council Page 4 growth within the City and will need to contemplate appropriate measures to address this issue as part of its 2018 Lakeville Comprehensive Plan update. Lakeville is well aware of the challenges in developing strategies for planning future development and the correlation between land use, transportation and other system plans. In establishing the 2040 TPP consistent with the Thrive MSP 2040 regional plan, Lakeville requests Metropolitan Council adopt a transportation plan that addresses system operations, maintenance and capacity with a basis on regional consistency, recognizing that land use objectives are only feasible with adequate infrastructure being provided concurrent with development and incorporating local vision and preferences for development patterns that will occur to 2040. Lakeville cannot support the density mandated for the community by the Thrive MSP regional plan based on the inadequacies of the draft TPP to provide for a regional transportation system that supports anticipated growth and development. We appreciate the opportunity to provide these comments on the draft 2040 TPP to the Metropolitan Council. If additional discussions are warranted or you would like additional information from Lakeville regarding our comments, please do not hesitate to contact City staff. Sincerely, Matt Little Mayor CITY OF LAKEVILLE C. City Council Wendy Wulff, Metropolitan Council District 16 Allyn Kuennen, Interim City Administrator Daryl Morey, Planning Director David Olson, Community and Economic Development Director Zachary Johnson, City Engineer Brett Altergott, Parks and Recreation Director Roger Knutson, City Attorney Daniel Licht, The Planning Company LLC M N O N o0 O O N C� N O v) mM N O, •-+ O H O a U O W O 0000NOS SSSSSp 8 p 888n NN 8 5 O c r- 0 Q, 0 t- 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5 W)000-00�M0ON0000000000000000000 o W a O 00 - S 00 O\ 0 Cl) M z N d Z r� e� a a w 0 8 8 8 8 8 S S S 8 8 8 8 8 8 8 0 0 0 0 0 8 0 0 8 8 8 8 8 8 z ooc�ooS2cZ��00000069699doQ0000c L A+ bO ... > dP4bdA r7 N •O o V� 00 O 8 v O \O o0 �O O l� W 06 N - �--� et N M b o d > .fir .~. 0 M ,,� U 00 N z, rQ N oo a� 'a3 0 h eo Q 3 a a o A w w 3 Ap o c7 C7 a 00 �O m o0 O 00 V� M M O Q� O� ani 3 a s v, v, 3 W O O O O. 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C� 00 N N O, OO M M --� ch M M N M O\ 00 N v) M N O 00 � O N 00_M M l— M M •-+ O O 00 �O .--� r- O r- r+ O� 00 ON .~ kn M N A N eq N \O .-r M it00 Y _N D r Y C 3 h O d cit T ' r-1 00 j > U C b •� U °o [i Y ai z > CO) x a�j a`i ^�.CA CX o U .G N ,� .YU. +�' Y G U cC ate+ is id y �,., c Ei •v E 6 3 N �a �a .G a> 'ea > > E if y„ ti c�i C x x a> a¢S a 3 3 rn �v AY a r 3 via H 0 0 F 16/1/2014 ' Suburban counties fight Met Council's transportation policy I Finance & Commerce FINANCE,- COMMERCE A $35 million interchange and grade separation from the Burlington Northern Santa Fe railroad tracks is planned at the intersection of U.S. Highway 10 and County Road 83 in Ramsey. Anoka County officials are worried about securing funding for other improvements to Highway 10 under new Metropolitan Council standards. (Staff photo: Bill Klotz) Suburban counties fight Met Council's transportation policy By: c.0 o—gs September 30, 2014 4:54 pm o To Anoka County Commissioner Scott Schulte, the Metropolitan Council's 25 -year plan for transportation throughout the metro area could be detrimental to road safety. At a joint meeting Monday of five suburban county boards, Schulte said the plan fails to address upkeep and expansion of roads, which he believes will impede safety improvements. He singled out the improvements needed on U.S. Highway 10 in Anoka County, a congested rural highway where several people have been killed in the last decade. Representatives from Washington, Dakota, Anoka, Scott and Carver counties are flexing their collective muscle against the Metropolitan Council's draft Transportation Policy Pian. They say the plan doesn't include input from suburban stakeholders, it lacks vision for the regional highway system, and it unfairly diverts scarce resources into the urban core. With more than 100 people in attendance, nearly 30 suburban commissioners discussed a list of 17 common concerns with officials from the Met Council. The counties are concerned about the new criteria for how federal funds are allocated to local projects – a change stemming from the Transportation Policy Plan.The criteria, designed to support the Met Council's Thrive 2040 plan, give greater consideration to projects that serve "racially concentrated areas of poverty" and reward communities for affordable housing in the regional solicitation process. Affordable housing and equity measures account for 10 percent of the points for road projects and have greater weight for bike/pedestrian and transit projects. The suburban counties say that puts them at a disadvantage when competing for the $150 million pot of federal money allocated to the region because most of the disadvantaged areas identified by the Met Council are in Hennepin and Ramsey counties. Even so, many commissioners at the meeting noted concentrated poverty is a growing problem in suburban areas. A Met Council report shows that between 2000 and 2010, the number of suburban people living in areas of concentrated poverty grew from less than 500 to 49,528. Anoka County Commissioner Matt Look said Tuesday that the emphasis on race "boxed out" important suburban projects, like safety improvements to Highway 10. http://finance-commerce.com/2014/09/suburban-counties-fight-met-councils-transportation-policy/ 1/2 1(7/1/2014' Suburban counties fight Met Council's transportation policy I Finance & Commerce "Unless you have racially concentrated areas of poverty, not just concentrated areas of poverty, you don't get that 10 percent kicker," Look said. "It's like you're running a marathon and the people in front of you get a 10 -minute head start." While Anoka County already has $35 million for an interchange and safety improvements at Highway to and county Road 83 in Ramsey, other possible improvements to the highway total $115 million. Look said the county wants a fair shot at "every funding possibility out there" to complete the project, but the new criteria puts it at a disadvantage. Met Council Chair Sue Haigh pointed out that projects receive partial points for serving other disadvantaged populations like children, the elderly and people with disabilities. "We think there are many projects within your respective counties that could well meet this equity measure," Haigh told the group. Another main criticism of the plan is that it doesn't devote enough attention to roads, which are still the predominant form of transportation throughout the metro area. While the plan calls for a rapid expansion of the transit system, Scott County Commissioner Jon Ulrich said the plan should be "equally aggressive" for roads. The Met Council's plan shows how the regional highway system is projected to become more congested as the metropolitan population grows. Comparing apples to apples, the plan shows $ti billion planned for highway investments through 2040 focusing on maintenance, replacement and safety, with little mention of expanded capacity. The transit investment plans shows $31 billion for operating and expanding the transit system over the next 25 years. State transportation Commissioner Charlie Zelle pointed to funding constraints and said the concern for roads was a shared frustration. "The irony is that we are arguing about something where it really isn't one part of the city or one part of the state vs. the other," Zelle said. "There's really very much a shared sense that we have got to do something about our infrastructure." Haigh said current revenue will not meet the need for growth for the region's roads and finding funding will be a big shared task in the 2015 legislative session. The counties put together suggested amendments to the draft Transportation Policy Plan to address specific areas of concern. While Haigh was not able to respond directly to every comment at the meeting, she said she and Met Council staff will reflect on the comments and get back to the group. The public comment period on the draft closes Wednesday and policy documents are usually tweaked to incorporate changes before adoption by the Met Council. Worried their concerns were falling on deaf ears, several commissioners emphasized that they would like to see substantial changes reflected in the document. Look said he wasn't confident that the Met Council would change course, but that momentum is building from counties, cities and legislators. "If they don't try to accommodate our concerns, we're only going to get stronger," he said. Taking the pragmatic approach at the meeting, Dakota County Commissioner Chris Gerlach said it'd be better to take the time to get the counties on board rather than setting up an adversarial relationship. "The problem is going to be in the years to come, we're going to have to be working with you alongside to implement that," he said. Tagged with: METROPOLITAN COUNCIL THRIVE 2040 TRANSPORTATION POLICY PLAN Copyright © 2014 Finance and Commerce I U.S. Trust Building Suite 100, 730 Second Ave S., Minneapolis, MN ' 55402 1 (612) 33- 44 http://finance-commerce.com/2014/09/suburban-counties-fight-met-councils-transportation-policy/ 2/2 9/24/2014 Imperial Plastics buys Engineered Polymers I Star Tribune Log In I Register I My account I Subscribe Digital Home delivery I Today's Paper Search G All content C, Business listings Search « Site Index � StarTribune i business News Local Sports Business Politics Opinion Lifestyle Entertainment Obituaries Classifieds Autos Housing Jobs Economy Your Money Top Workplaces Blogs + Columns Business Finder Minnesota Topics Home Business from the homepage Imperial Plastics buys Engineered Polymers Long-delayed 400Bar is evicted from Mall of America Article by: DEE DEPASS , Star Tribune Updated September 24, 2014 - 4 07 PM New Whones run into software, bending complaints 'American Idol' auditions bring celeb judges to Imperial picks up a factory in Mora with 27 molding machines and 207 Minneapolis employees. Imperial Plastics buys Engineered Polymers ADVERTISEMENT 0 comments G resrze text0 print buy reprints r Share 6 most read most emailed most watched Tweet l 1 ®�✓ Access Vikings: Apartment With the Brass Cube (The New York Times) more from business - Teammates confident with Imperial Plastics has purchased the privately -owned Engineered Bridgewater Polymers Corp. in Mora, Minn., the companies announced Grand Canyon changes Wednesday. budget to repay $100M loan Budweiser ad a social Terms were not disclosed. media hit Bulletin) LA call center firm sued by The deal gives Lakeville -based Imperial a 400,000 -square -foot factory US for sex harassment that includes 27 plastic injection and foam molding machines. wild Minute: Backstrom How Instructables Have Mlllennials Working Your Brand _ Some banks reissuing cards perfect in exhibition loss The enormous machines, which can tower 15 feet high and span 30 over Home Depot breach feet wide, give Imperial the ability to do "large tonnage" injection molding jobs for manufacturing customers, executives said. http://www.startribune.com/business/276974031.html Nolasco: It's been a Imperial, which has 500 workers, typically caters to the farm, ag terrible year equipment, dental equipment, and recreational vehicle customers. Engineered Polymers has traditionally made large structural panels, housings, tractor doors and roofs and other products for Amateur video snows manufacturers. The company was founded In 1939 and was owned aftermath of Syria by brothers Ken and Jeff Fackler. It employs 207 people airstrikes The addition of Engineered Polymers continues Imperial's recent More Video growth spurt. In 2012, Imperial bought the injection molding firm Rolco Inc. Last year, it built a new 124,000 square foot factory in Mankato with the help of that city's economic development authority. With Engineered -- Polymers, Imperial will have 150 molding machines, six distribution facilities and four factories In Lakeville, Mankato, West St. Paul and Mora. ADVERTISEMENT Dee DePass • 612-673-7725 Time left for great deals Golden Bid thru Sept. 29 Gavel 05 : 04: 35 0 comments 0 resrze text Q print buy reprints Share 6 Tweet tt_2 i i , ®�� DAYS HOURS MINUTES from around the web More from Star Tribune ADVERTISEMENT ADVERTISEMENT Campfires aren't just for making s'mores (Nation) Apartment With the Brass Cube (The New York Times) ADVERTISEMENT Serb Patriarch Inner denounces planned gay pride A surprisingly delicious paleo apple crisp recipe. march, calling it 'shameless' event (StarTribune.com) (LARABAR) Vargas, Bernos snare top Twins minor league honors The Worst Kept Secret Among Book Lovers - The One (StarTribune.com) ADVERTISEMENT Website Book Lovers Need to Know (The BookBub Missing Maplewood man, 84, has been found alive Bulletin) (StarTribune com) ADVERTISEMENT Not Having One Of These Credit Cards in 2014 Will Be A Young woman who made medical history marries in Mistake (NextAdvisor Daily) Fond du Lac (StarTribune com) How Instructables Have Mlllennials Working Your Brand Nolasco rocked again as Twins clinch last -place finish for You (Spark Digital) (StarTribune.com) The Simple Trick That Will Help You Memorize Anything (Prezi) http://www.startribune.com/business/276974031.html 1/2 9/25/2014 FedEx plans new 250 -person warehouse for suburban worker shift - Minneapolis / St. Paul Business Journal From the Minneapolis / St. Paul Business Journal : http: / /www. bizjourna ls.com/twi ncities/ blog/ real_estate/ 2014/09/fedex-freig ht- closing-roseville-opening-lakeville.html FedEx plans new 250 -person warehouse for suburban worker shift a 2014, 11:34am CDT Sam Black Senior reporter- Minneapolis / St. Paul Business Journal Email I Twitter I Goo le+ FedEx Freight wants to open a new 94,000 -square -foot facility in Lakeville and close its two Roseville distribution operations. The company will offer transfers to Lakeville for the 125 workers in Roseville, according to Mike Kevitch, managing director, real estate development for FedEx Freight. The Lakeville facility could grow to 250 jobs when it is fully developed, he told told the Lakeville Planning Commission last week. FedEx Freight "is growing rapidly in the Minneapolis market" and it needs more room, he said. "This is our first opportunity to address our long-term growth." The jobs will include drivers, dock workers, clerical and office staff. Kevitch said he didn't know how many Roseville employees will decide to work in Lakeville. FedEx Freight has zeroed in on a 46.5 -acre parcel south of 215th St. W. and east of Dodd Boulevard for the new Lakeville operation. It plans a three -building complex: a 71,700 -square -foot trans -load dock facility (for moving packages from one truck to another), a 13,700 -square -foot truck and trailer maintenance shop and fuel depot, and an 8,200 -square -foot office building. FedEx Freight will set aside 12 acres for future expansion. Lexington, Ky.-based developer Setzer Properties will construct and own the buildings and lease them to FedEx. The companies have done several projects together around the country, including in Roseville. http://www.bizjournals.com/twincities/blog/real_estate/2014/09/fedex-freight-closing-roseville-opening-lakeville.html?s=print 1/2 9/25/2014 FedEx plans new 250 -person warehouse for suburban worker shift - Minneapolis / St. Paul Business Journal FedEx Freight is one of three big divisions of Memphis -based FedEx Corp. (NYSE: FDX), which had $46 billion in revenue last year. FedEx Freight provides short -distance freight delivery, almost exclusively a business -to - business service. FedEx Express provides overnight delivery. FedEx Ground provides high- volume delivery of smaller, low -weight packages. The Lakeville Planning commission approved the proposal by a 5-1 vote Sept. 18. The City Council will consider the plan Oct. 6. Sam Black covers real estate, manufacturing and economic development. http://www.bizjoumals.com/twincities/blog/real_estate/2014/09/fedex-freight-closing-roseville-opening-lakeville.html?s=print 2/2 Olson, David From: DEED Media <MNDEED@public.govdelivery.com> Sent: Thursday, September 18, 2014 9:49 AM To: Olson, David Subject: August 2014 Employment �`�C�fGr` NEWS RELEASE For Immediate Release Contact: Madeline Koch, 651-259-7236 September 18, 2014 madeline.kochCabstate.mn.us Steve Hine, 651-259-7396 steve.hine@state.mn.us State Gains 6,100 Jobs in August —Unemployment rate drops to 4.3 percent— ST. PAUL — Minnesota employers added 6,100 jobs in August, according to seasonally adjusted figures released today by the Minnesota Department of Employment and Economic Development (DEED). The August gains, combined with July figures that were revised from 4,200 jobs lost to 100 jobs lost, put calendar year gains at 13,200 jobs in the state. Over the past 12 months, the state has added 56,311 jobs, a 2 percent growth rate compared with a U.S. growth rate of 1.8 percent. The state unemployment rate fell to 4.3 percent in August, the lowest unemployment rate in the state in nearly eight years. The U.S. unemployment rate in August was 6.1 percent. "Our state has added nearly 203,000 jobs since hitting the low point of the recession in September 2009," said DEED Commissioner Katie Clark Sieben. "The August employment figures are great news and a reflection of Minnesota's healthy and growing economy." Construction and professional and business services were the strongest sectors in August, each adding 2,500 jobs. Other industries that added jobs were manufacturing (up 800), information (up 400), government (up 400), logging and mining (up 300), other services (up 300), trade, transportation and utilities (up 200), and education and health services (up 1 100). Job losses were reported in August in financial activities (down 800) and leisure and hospitality (down 600). Sectors that have gained jobs over the past 12 months are government (up 17,875), manufacturing (up 9,921), professional and business services (up 9,791), construction (up 7,446), education and health services (up 6,257), trade, transportation and utilities (up 4,360), leisure and hospitality (up 3,004), logging and mining (up 575) and information (up 540). Two sectors lost jobs in the past year: financial activities (down 1,885) and other services (down 1,573). In the Metropolitan Statistical Areas, the following regions gained jobs in the past 12 months: St. Cloud MSA (up 2.9 percent), Mankato MSA (up 2.6 percent), Minneapolis -St. Paul MSA (up 2.3 percent), Rochester MSA (up 0.9 percent) and Duluth -Superior MSA (up 0.7 percent). DEED has added a section to its website that examines the unemployment rate by demographics (race, age and gender) and looks at alternative measures of unemployment. Click here for details. 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 . Over The Year Employment Growth By Industry Sector NSA Seasonally adjusted Not seasonally adjusted Unemployment Rate August 2014 July 2014 August 2014 August 2013 Minnesota 4.3 4.5 3.8 4.7 U.S. 6.1 6.2 6.3 7.3 Employment August 2014 July 2014 August 113- August 114 Level Chan e August '13- August '14 % Change Minnesota 56,311 2.0 U.S. 2,512,000 1.8 Over The Year Employment Growth By Industry Sector NSA OTY Job Change OTY Growth Rate (%) U.S. OTY Growth Rate Total Non -Farm Employment 56,311 2.0 1.8 Logging and Mining 575 7.8 5.5 2 Construction 7,446 6.4 3.9 Manufacturing 9,921 3.2 1.4 Trade, Trans. and Utilities 4,360 0.8 2.0 Information 540 1.0 0.0 Financial Activities -1,885 -1.0 0.9 Prof. and Bus. Services 9,791 2.8 3.5 Ed. and Health Services 6,257 1.3 1.8 Leisure and Hospitality 3,004 1.1 2.4 Other Services 1 -1,573 1 -1.3 1 0.9 Government 1 17,875 1 4.7 1 0.2 Metropolitan Statistical Area CITY Employment Change (# ,NSA) OTY Employment Change % NSA Minneapolis -St. Paul MN -WI MSA 40,885 2.3 Duluth -Superior MN -WI MSA 947 0.7 Rochester MSA 973 0.9 St. Cloud MSA 3,008 2.9 Mankato MSA 1,369 2.6 -30- Upon request, the information in this news release can be made available in alternative formats for people with disabilities 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. • S� Questions? Contact Us Department of Employment and Economic Development - StarTribune -Print Page * StarTribune Living next to the mall: Low on view, high on convenience Article by. JIM BUCHTA and JANET MOORE Star Tribune September 13, 2014 - 4:05 PM The view off the balcony of Deb McKeman's new apartment is a Cheesecake Factory and a big parking lot — and she's perfectly fine with that. "I know it's going to sound comy, but if I can't have Michigan Avenue in downtown Chicago, then I'm going to have this," says McKeman, a pioneer in one of the newest trends in Twin Cities housing — the home at the mall. Earlier this month, McKeman moved into One Southdale Place, the new, 232 -unit luxury apartment building on the southeast comer of Edina's Southdale Center, the 58 -year-old mall that was the nation's first enclosed shopping center. The development of the outer edges of parking lots is being touted as a way for to suburbs shift their focus from cars to people. And We a boon to mall owners who are able tum little -used, somewhat - neglected real estate into money -spinners. The trend is especially appealing to professionals and pensioners alike who want the conveniences of urban Irving without the hassles of big city life. "Not everybody wants to live above a Taco Bell or a dry cleaner," said Lisa Moe, president of Twin Cities -based StuartCo., a partner with retail giant Simon on the One Southdale project "And not everybody wants to live downtown " Developers throughout the metro area are putting housing in the mall mix. In Maple Grove, the Skye at Arbor Lakes apartments are being built on a gravel fringe of the Shoppes at Arbor Lakes. And in Twin Cities Premium Outlets in Eagan, Stonebridge Construction is building 192 apartments adjacent to a Saks Off 5th parking lot. Indianapolis -based Simon Property Group Inc, which owns Southdale and Twin Cities Premium Outlets, has already identified about 20 locations nationwide for "transformative" projects like One Southdale Place, spokesman Les Moms says Karen Hennes, an assistant property director for One Southdale Place, showed an apartment balcony that overlooks Southdale Center ELIZABETH FLORES - eflores@startnbune com, The new apartment complex was built next door to Southdale Center in Edina Richard Tsong-Taatarn - risong-taatani@startnbune com, This unit at One Southdale Place has a view of the Cheesecake Factory at Southdale Whether other Simon properties in the Twin Cities — the company Richard Tsong-Taatani " rtsong-taatarll@startribune com, also owns the Albertville Premium Outlets and the Maplewood Mall — will be included on this list is unclear David Brennan, a marketing professor at the University of St. Thomas, says owners are always seeking to refashion the mall formula, particularly after a downturn as the country experienced in 2009. "Whenever there's a softness, mall owners will explore other ways to bring in nontraditional retail and services or some other kind of mixed use; he said He notes Southdale, which has to contend with the upscale Galleria next door, has tried a variety of strategies to bolster traffic And the characteristics of Edina have helped. The city is a wealthy, inner -ring suburb with little room for development and no shortage of baby boomers eager to swap the family house for a retirement crash pad. "People have a desire to continue to live in the community they have lived in, or have grown up; said Maureen Michalski, project manager for Minneapolis-based Schafer Richardson. "They want something more walkable, and they want flexibility in their living situation. "They want a sense of place." Her company is building 71 France, which includes three buildings with nearly 300 apartment units in the parking lot of a new Byedy's grocery store a few blocks down France Avenue from Southdale and the Galleria. Also in that area, Edina is upgrading its "Edina Promenade; a 80 -foot wide greenway between France and York Avenues that Includes a 10 -acre lake and park. The city touts it as the "ultimate urban escape." Janice Catherwood, who sold the Edina townhouse where she lived for nearly two decades and moved into One Southdale Place earlier this month, looks forwards to strolling the Promenade when weather penults. When it's not strolling weather, she'll log her miles at Southdale. More than anything, she's excited about living in a more active part of the city and letting someone else take care of the maintenance. "It was time to make a change, I'm getting a little older and I just want to ring a little bell when I have a problem; she said "But my first thought was, 'Do I want to live In a parking lot?'" h4://www.startribune.com/printarticle/?id=274953191 Page 1 of 2 9/15/2014 . StarTribune - Print Page With a patch of grass and a pool in a courtyard between the two apartment buildings that have already been completed, Catherwood is no longer concerned. She'll also have access to a "Sky Lounge" with deck chairs and a fire pit on the roof of the 10 -story building that is scheduled to open in January. "And I have everything within a mile, doctors, hospitals, the court house and banking," she said. "I've turned into a real city girl." When Bill Lindberg and wife, Connie, moved from a coastal town in California with views of the ocean, they also worried about the view from a ninth -floor condo they bought at the Residences at the Westin, a 82 -unit tower in the Galleria parking lot that's across the street from One Southdale. "It's quite panoramic, you can see green and the Minneapolis skyline," said Bill Lindberg "There are tradeoffs wherever we go. - The o " The upside has been convenience. Because the lower portion of the tower is a Westin hotel, he and other condo owners have access to the hotel amenities, including room service and a spa. And there are six pharmacies and two grocery stores within walking distance, which has helped avert many a culinary disaster. Recently, for example, he was able to quickly fetch some basil from the grocery across the street to complete a salad. "We didn't move back to Minnesota for the climate," Lindberg said. "If we're going to be here, convenience trumps those other things." Michael Lawson and his wife, after buying an eighth -floor condo at the Westin Galleria, said they were initially nostalgic about the sprawling yard they left behind in their former house in Grand Rapids, Mich But while his view of the Target parking lot isn't particularly inspiring, he can walk to his favorite shops and restaurants and he's close enough to his office that he can see it from his condo. "I spend almost no time driving anymore; he said "This has literally repackaged my life" Jim Buchta " 612-673-7376 ® 2014 Star Tribune http://v,iww.startribune.com/printarticle/?id=274953191 Page 2 of 2 9/15/2014 MOM Brands, the former Malt -O -Meal, is gobbling up market share. - Minneapolis / St.... Page 1 of 2 From the Minneapolis / St. Paul Business Journal :http://www.bizjournals.com/twincities/morning_roundup/2014/09/whos-not- crying-into-their-cereal-bowl.html Who's not crying into their cereal bowl? MOM SikIII 7:05am CDT Updated: Sep 11, 2014, 2:29pm CDT Mark Reilly Managing Editor- Minneapolis/St. Paul Business Journal Email I Twitter I LinkedIn I Google+ See correction at end of article. While most cereal makers are scrambling to stave off a long decline in the category, MOM Brands -- the former Malt -O -Meal, is gobbling up market share. That's one of the takeaways from a New York Times feature on the decline of breakfast cereals. You know the story by now: People like high -protein foods, they eat on the go, they're skipping breakfast altogether, etc. RELATED: Behold, the K-0 Cup: General Mills prepares Keuria-ready oatmeal But after talking with General Mills Inc. and Kellogg, the Times gets to Lakeville, Minn. -based MOM, now the No. 3 cereal company (it passed Post a few years ago). MOM has doubled its market share in 10 years. EARLIER: What goes with recession and milk? Frosted Mini Spooners Its secret? Nothing really special; it won some accolades for reducing its use of boxes and selling cereal in bags, and it offers "price -buster" specials to win over cash-strapped consumers. Correction An earlier version of this story misstated the headquarters location of MOM Brands. It is based in Lakeville, Minn. http://www. bizj oumals.comltwincitieslmorning_roundup/2014/09/whos-not-crying-into-th... 9/12/2014 9/15/2014, Cereals Begin to Lose Their Snap, Crackle and Pop - NYTimes.com IsheNO matKim$ j http://nyti.ms/1nMw982 BUSINESS DAY I NYT NOW Cereals Begin to Lose Their Snap, Crackle and Pop By STEPHANIE STROM SEPT. 10, 2014 Cereal, that bedrock of the American breakfast, has lost some of its snap, crackle and pop. For the last decade, the cereal business has been declining, as consumers reach for granola bars, yogurt and drive-through fare in the morning. And the drop-off has accelerated lately, especially among those finicky millennials who tend to graze on healthy options — even if Cheerios and some other brands come in whole -grain varieties fortified with protein now. As a child, Adam Feuerstein started his day with a homemade breakfast. "Growing up, I would combine Frosted Flakes and Cap'n Crunch," said Mr. Feuerstein, a financial reporter at The Street. "I have such vivid memories of it that if I walk down the cereal aisle today, I still gravitate toward those cereals." Cereal companies have tried to play on that nostalgia, with commercials featuring generations of Cheerio eaters or couples fighting over the marshmallows in Lucky Charms. But Mr. Feuerstein, who is 46, isn't buying the sales pitch. These days, he eats breakfast around 10 or ii in the morning, preferring juice he makes himself. If he eats cereal at all, it is a Trader Joe's private label version "as a treat," he said. "You realize that it's just a sugar delivery vehicle," he said of cereal. hftp:/twww.nytimes.com/2014/09/1 1/business/cereals-struggle-in-us-as-tastes-and-rituals-change.html?_r--1 1/5 9/15/2014, Cereals Begin to Lose Their Snap, Crackle and Pop - NYTimes.com "We've all gotten a little smarter about the foods we eat, and while there are plenty of healthy cereals out there, I just don't choose to eat much cereal." Cereal consumption peaked in the mid-i99os, according to the NPD Group, a consumer research firm. Still, some 90 percent of American households report buying ready -to -eat cereal, which remains the largest category of breakfast food with some $10 billion in sales last year, according to Euromonitor, down from $13.9 billion in 2000. And the consumer research firm estimates sales will fall further this year to $9.7 billion. "More and more consumers are eating breakfast," said Noel Geoffroy, senior vice president for morning foods marketing and innovation at the Kellogg Company. "The absolute market is growing — and along with that, so are the choices of what consumers eat for breakfast." Cereal sales have long been subject to dips brought on by food fads like the Atkins diet or bagel mania. And many cereals are neither gluten-free nor protein -rich, so they fail to resonate with the growing number of consumers who are gluten -intolerant or adherents of the so-called paleo diet. But investment analysts say the current slump is a result of more pernicious trends. "The common observation by a lot of companies facing declining cereal sales is that this is a kind of death by a thousand cuts," said Nicholas Fereday, an investment analyst specializing in food and agriculture at Rabobank and author of a report, "The Cereal Killers: Five Trends Revolutionizing the American Breakfast." "This is frustrating for food companies because they're faced with people making choices and they're not really sure which trend to blame." Mr. Fereday noted, for instance, that the birthrate was declining — and children traditionally have been the largest consumers of cereal. Other demographic factors are at play as well: Many surveys have shown that Latinos and Asians prefer other breakfast foods. And, of course, there are the millennials, those consumers between the ages of 14 and 32 who are proving to be a headache for food companies. "They're much more likely to be snacking rather than eating three meals a day, and therefore may not have a traditional breakfast at all," said Jeff http://www.nytimes.com/2014/09/11/business/cereals-struggle-in-us-as-tastes-and-rituals-change.html?_r--1 2/5 9/15/2014, Cereals Begin to Lose Their Snap, Crackle and Pop - NYTimes.com Fromm, president of FutureCast, a consumer research firm specializing in millennials. "Additionally, there's a small but very active and influential group of millennials who are focused on health and don't like processed food. Guess what, cereal companies? They want to kill you." As if those challenges were not enough, new kitchen gadgets make whipping up a smoothie or a custom blend of juices easy to do at home. Plus, a number of new fast-food breakfast options — waffle taco, anyone? — have put dents in cereal sales. For example, Daniel Bjornson travels four days a week as a consultant, and he likes to eat cut fruit and toast with peanut butter while on the road. "If I'm just at home, it would be Greek yogurt," he said. "I don't dislike cereal, but yogurt just seems like a healthier option." About three months ago, he said, he bought a box of Kashi with added protein, an attribute that attracted him. At General Mills, the company's yogurt brands have eaten away at sales of its cereals, which include Lucky Charms, Cinnamon Toast Crunch and Cheerios. "Some of my business has definitely gone to my colleague running yogurt," said Jim Murphy, president of Big G, General Mills' cereals unit. Big G has made tweaks in advertising and ingredients to address changing consumer preferences. For instance, it continues to reduce sugar in its cereals, and it pulled Nature Valley cereals out of mothballs and added protein to them in 2013. It also found a way to capitalize on Chex, which had produced consistent sales but little growth since General Mills acquired it in the 199os. "We had tried everything to move the needle: new advertising, new flavors — and then we marketed it as gluten-free, and it took off," Mr. Murphy said. General Mills also is marketing its iconic cereals as family brands in an appeal to nostalgia: Adults account for almost half of the consumption of Cinnamon Toast Crunch, for instance. Such changes have kept the company's sales of cereals stable at a time when its competitors are struggling. This month, Post Holdings reported http://www.nytimes.com/2014/09/11 /business/cereals-struggle-in-us-as-tastes-and-rituals-change.html?_r--1 3/5 9/15/2014 Cereals Begin to Lose Their Snap, Crackle and Pop - NYTimes.com that sales of its cereals, which include Alpha -Bits and Grape -Nuts, were down 3.4 percent in the fiscal third quarter compared to the same period last year, while sales of morning foods at the Kellogg Company, which includes Pop -Tarts, breakfast bars and beverages in addition to its cereal brands, slid 4.9 percent in the second quarter. John A. Bryant, the chief executive of Kellogg, was characteristically blunt in explaining the decline to investment analysts on July 31. "The overall decline has been largely due to innovation that hasn't worked," Mr. Bryant told them, citing disappointing sales of Mini -Wheats Crunch, now discontinued, as well as efforts to alter its FiberPlus and Crunchy Nut brands. The executive who had been in charge of Kellogg's cereal business for eight months left the company and was replaced by his predecessor. Kellogg's also brought back David Denholm from Chobani to run its faltering Kashi brand, which he had previously overseen, and the company said it would move the business back to La Jolla, the San Diego community where it was founded. Kellogg's has added protein to Kashi GoLean and Special K, a move that Ms. Geoffroy, the marketing executive, said was working well, and it has begun packaging its staple cereals for children, like Froot Loops, Apple Jacks and Corn Pops, in pouches to make them more convenient for mothers to use as snacks. MOM Brands, formerly Malt -O -Meal, has so far been immune to the trends buffeting the rest of the industry; two years ago, it surpassed Post to become the third-largest cereal maker, largely with simple innovations. "Over the last 10 years or so, as the category has been going down, we've doubled our market share," said Paul Reppenhagen, senior vice president for marketing and corporate strategy. "We've had 5 percent compound annual growth over the last five years." About that time, it began a campaign it called "bag the box," eliminating the box from its cereals to reduce packaging, which resounded with the environmental crowd (though it once again is boxing some of its products). http:/twww.nytimes.com/2014/09/11/business/cereals-struggle-in-us-as-tastes-and-rituals-change.html?_r-1 4/5 P/15/2014 Cereals Begin to Lose Their Snap, Crackle and Pop - NYTimes.com The company also periodically offers "price buster bags," selling its Malt -O -Meal cereals in ii -ounce pouches for $1 to drive sales. It also offers 13 to 15 ounces of its cereals at an everyday price of $2. "These are great value, particularly for those consumers who get to the end of the month and are strapped for cash," Mr. Reppenhagen said. MOM, which is owned by the descendants of its founder, John Campbell, also has had success with a relatively new brand, Mom's Best cereals, "because of an absence of negatives," Mr. Reppenhagen said. "No hydrogenated oils, no preservatives, no artificial flavors and colors — we even use vegetable dyes in the packaging." All of those changes, however, would not make a difference to Megan Scott, an account executive at Trozzolo, an advertising and public relations firm in Kansas City, Mo. "I really value my sleep, so typically I won't wake up any earlier to eat breakfast," Ms. Scott said. She could not remember the name of the cereal she had eaten as a child, and as a teenager, her mother handed her and her brother cans of Carnation Instant Breakfast drink just to get them to eat something with nutrition in it. Ms. Scott said she liked breakfast, but simply didn't have time for it. So her morning menu is a cup of coffee. "I hope that breakfast will become a meal for me," she said. "I feel like it should be, but right now, convenience is more important." A version of this article appears in print on September 11, 2014, on page 131 of the New York edition with the headline: Mikey Doesn't Like It Very Much, Anymore. © 2014 The New York Times Company http://www.nytimes.com/2014/09/11 /business/cereals-struggle-in-us-as-tastes-and-rituals-change.html?_r--1 5/5 Howden, Richard From: DEED Media <MNDEED@public.govdelivery.com> Sent: Wednesday, August 27, 2014 3:38 PM To: Howden, Richard Subject: Menasha Packaging Expanding in Lakeville NEWS RELEASE For Immediate Release Contact: Madeline Koch, 651-259-7236 August 27, 2014 madeline.koch0state.mn.us Menasha Packaging Expanding in Lakeville "Neenah, Wis., company adding 15 jobs and expanding site" LAKEVILLE — Wisconsin -based corrugated display and packaging manufacturer Menasha Packaging will create 15 jobs and invest $7 million in an expansion of its operations in Lakeville. The Neenah, Wis., company said it plans to add about 126,000 square feet at its Lakeville manufacturing facility in the Airlake Industrial Park, 8085 220th St. W., where the company has operated since 1969. The Minnesota Department of Employment and Economic Development (DEED) is assisting the company with the expansion by providing $422,520 from the Minnesota Job Creation Fund. Menasha Packaging will receive the funding once it has completed the expansion and added the jobs. The Job Creation Fund, which was first proposed by Governor Mark Dayton to encourage job growth in Minnesota, will award $24 million in business incentives that were approved in the 2013 legislative session. Officials said the program is helping the state to compete for new jobs and businesses. "This important expansion will create 15 new jobs and deliver a 16 -to -1 return on the state's investment," said Governor Dayton. "I thank Menasha Packaging for its commitment to Minnesota, and congratulate the company and its employees on their continued success." "I want to thank Menasha Packaging for being a part of the Lakeville community for the past 45 years and for choosing the city for its latest expansion project," said DEED Commissioner Katie Clark Sieben. "The company is growing rapidly and adding 15 good -paying jobs that will help the local economy." Menasha Packaging, which has been in business for 165 years and is one of the nation's oldest companies, has over 2,700 employees at more than 30 facilities nationwide. The company specializes in graphic consumer packaging, merchandising, corrugated packaging, food packaging, shipping containers and material handling. The company is a subsidiary of Neenah -based Menasha Corp. "Our priority continues to be to meet and exceed the needs of our broad customer base," said Menasha Packaging Regional Vice President Greg Theis. "The expansion in Lakeville will support our growth, and I am extremely pleased with the assistance from DEED." The Minnesota Job Creation Fund is a new pay -for -performance program that provides up to $1 million to businesses after they meet certain criteria, including minimum requirements for job creation and private investments. Under the program, businesses must create at least 10 full-time jobs and invest at least $500,000 to be eligible for financial assistance. The program is available to businesses engaged in manufacturing, warehousing, distribution, technology and other eligible activities. Companies must work with the local government (city, county or township) where a project is located to apply to DEED to receive designation as a Job Creation Fund business. Since the Job Creation Fund was launched in January, DEED has awarded $12 million to 20 companies in Minnesota. Those companies have committed to creating more than 1,300 new jobs and investing $224.3 million to expand. 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 for people with disabilities 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.