HomeMy WebLinkAbout05-26-15Lakeville
AGENDA
Economic Development Commission
May 26, 2015 — 4:30 p.m.
City Hall, Marion Conference Room
1. Call to order
2. Approval of April 28, 2015 minutes
3. Presentation of Dakota Countywide Broadband Study (to be presented at the meeting)
4. Review of Proposed TIF Plan for TIF District No. 20 for Mendell Inc. Expansion
5. Update on Post Holdings Headquarters Announcement
6. Review Strategic Plan for Economic Development 2015 Work Program
7. Directors Report
8. Adjourn
Attachments-
• City council creates TIF district around Amazon for public infrastructure, May 19 2015
• Amazon gives up on tax breaks for Shakopee project, Real Estate Inc. May 19,m 2015
• Family history tells the story of Airlake Industrial Park in Lakeville, South Metro May 16,
2015
• State Adds 7,400 Jobs in April, Minnesota News Release May 21, 2015
• Job growth in Twin Cities driven by `Suburban Edge," according to Met Council report,
May 6, 2015
• Twin Cities home sales surge due to low rates, higher home prices, Business May 12,
2015
No. "
CITY OF LAKEVILLE
ECONOMIC DEVELOPMENT COMMISSION
MEETING MINUTES
April 28, 2015
Chair Starfield called the meeting to order at 4:30 p.m. in the Marion Conference Room at
City Hall.
Members Present: Comms. Starfield, Longie, Collman, Gillen, Rajavuori, Matasosky,
Scherer, Emond, Smith, Vlasak, ex -officio member Roche.
Members Absent: Ex -officio members; Mayor Little, City Administrator Miller
Others Present: Mike McBrady and Rob Novak, ImageTrend, Inc., Bryan Bartz and Mike
Waterston, Mendell, Inc., David Olson, Community & Economic Development Director; Rick
Howden, Economic Development Specialist.
2. Introduction of New Members
Chair Starfield asked all in attendance to introduce themselves and their business as
there are new members of the EDC as well as special guests.
3. Approval of March 24, 2015 meeting minutes
Motion Comms. Emond/Longie moved to approve the minutes of the March 24,
2015 meeting as presented. Motion carried unanimously.
4. Review ImageTrend's Request to Amend Contract for Private Development
Mr. Olson stated that in August of 2009, the City Council approved a Contract for Private
Development that authorized the sale to ImageTrend of a City -owned 3.39 acre lot
adjacent to their existing building located at 20855 Kensington Boulevard in the Fairfield
Business Campus. The Contract established a sale price of $627,589 for the property.
The terms of the Contract called for one third of the sale price to be paid by ImageTrend
at the time of closing. The remaining two thirds of the purchase price would be forgiven if
ImageTrend completed their first expansion by the end of 2011 and the second phase
was required to be completed by the end of 2013. The total of the two expansions is
required to be a minimum of 50,000 square feet. The contract also required that
ImageTrend create a minimum of 21 additional jobs in addition to the just under 100 jobs
that existed in 2009.
The company completed their first phase expansion of 27,000 square feet at the end of
2011 and has created 60 new jobs which is nearly three times the number of new jobs
required under the contract.
An amendment to the original Contract for Private Development was approved in March
of 2013 that extended the completion of the second expansion phase from November
2013 to December 2015. Based on current hiring forecasts, ImageTrend will not need
additional office space until the end of 2018 and as a result they are requesting an
amendment to the current Contract for Private Development to extend the completion
date from December 31, 2015 to December 31, 2018. At this point, ImageTrend will
have completed their second phase expansion and will have grown to approximately 300
employees.
Mike McBrady gave a presentation of ImageTrend's history and future growth in
Lakeville. Following Mr. McBrady's presentation, a motion was presented.
Motion Comms. Emond/Smith moved to recommend amending the Contract for
Private Development with ImageTrend to extend the completion date of their Phase B
expansion from December 31, 2015 to December 31, 2018. Motion carried. Comms.
Matasosky abstained due to his firm's involvement tip 1he original construction.
5. Review Request for Tax Increment F,inaoting'., r Mendell Inc's Proposed
Expansion,-
Bryan Bartz, President of Mendell Inc. ga „a'presentation ori-' ndell Inc., its history,
the products it produces and their plans` xpansion.
Mr. Olson reviewed Mendell's expansion pla., square Qtdition to their
building and add 12-25 new job u r the next t mars. The average -salary of these
jobs will range from $51,000 to The requ r Tax Increment Financing is to
assist in filling a project financing o ximate 36,612. Mendell is also in the
process of submitting an applicatiorlft, the f MNCreation Fund program
which is administers MN Dement. men Economic Development
(DEED) to fill a potion of th"ect fihM9,n, ap.
Mr. Olson also expl ... � , thatt� Assesso Office has determined that the range of the
market v the a s' II buil" ` to be between $52 to $56 per square
foot. 1, 'der enaf This ra su n a net increase of market value for
<,.., 'V,
pro tax purpo f'
$1;6200. sults in a total estimated amount of
$11 a,_y of tax incre „# beirvailable during the nine year period in which tax
increme*an be capt - for allcrnomic Development TIF District.
Motion ' omms. S .. /Longie moved to recommend calling for a public hearing
to consider the tion of;new Tax Increment Financing District for the expansion of
Mendell Inc. Motion catA3ed. Comms. Matasosky abstained due to his firm's
involvement in the j3C%jt.
6. Election of Officers
Mr. Olson explained that in line with new board and commission appointments made by
the City Council on March 26th, EDC election of officers will take place at this month's
meeting.
In 2014, EDC members elected Glenn Stanfield as Chair, Sheila Longie as Vice Chair,
and Joe Julius as Secretary.
Motion Comms. Longie/Gillen moved to recommend Comms. Starfield as Chair
for 2015. Motion carried unanimously.
Motion Comms. Emond/Matasosky moved to recommend Comms. Longie as
Vice Chair for 2015. Motion carried unanimously.
Motion Comms. Starfield/Smith moved to recommend Comms. Scherer as
Secretary for 2015. Motion carried unanimously.
7. Discussion of 2014-2016 Strategic Plan for Economic Development 2015 Work
Program
Mr. Olson presented an updated 2015 Work Plan for the 2014-2016 Strategic Plan for
Economic Development. The 2014 Work Plan Updatp,as discussed at the EDC's March
meeting served as the foundation for the activities. 1�vill pursue in 2015. The attached
update incorporates actions identified by the ED,"' ity Council from discussion at the
March EDC meeting. ,-
T� h
8. Director's Report° r
Mr. Olson reviewed the Director's Rep- n Ap ' , 23`d, theme nning Commission
approved a Conditional Use Permit to allow' ewery and om operated by
Angry Inch Brewing Company. ' :.' proom wi ` the former Ace ardware building,
which will also be occupied by ews He etal Grill. This is the first brewery
and taproom for the City of Lakev fk
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„{ fo a Zoni rdinance amendment in 2014 to
allow this use.
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9. Adjournar;>.;x;
Meeting adjourned at fi 07 p.m.
Respectfully submitted by:
d6tw , rnd CoBank are sponsoring the
n among communities throughout Frontier
City of Lakeville along with the Lakeville
-a Public Schools submitted an application
W. announced and will receive $50,000.
Droved the Preliminary and Final Plat and a Conditional
06, " o_ nvenience Store to be located in the TimberCrest
:. Tliw new SA will be located at the corner of 185th Street
uffalo Wild Wings.
Rick Howden, Economic Development Specialist
Z -1
Memorandum
City of Lakeville
Community & Economic Development
To: Economic Development Commission
From: David L. Olson, Community and Economic Development Director
Copy: Justin Miller, City Administrator
Rick Howden, Economic Development Specialist
Bryan Bartz, Mendell Inc.
Michael Waterston, Mendell Inc.
Date: May 22, 2015
Subject: Mendell Inc. Tax Increment Financing Plan
Mendell Inc. contacted the City recently and presented plans for a 18,700 square foot
expansion of their building located at 21463 Grenada Avenue. Mendell is a medical device
manufacturing company and is experiencing considerable growth and needs to add
additional manufacturing and warehouse space to their existing building. The company has
submitted a request for Tax Increment Financing (TIF) to assist with the $360,000 in eligible
site improvement costs associated with the project.
Mendell has operated in Airlake since 2003 and currently has 94 employees. In addition to
retaining the existing 94 jobs in Lakeville, the proposed expansion will create an additional
12-25 jobs. The City Council reviewed this proposed TIF project at the April 27' Work Session
and the EDC reviewed this request at the April 28" meeting 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 TIF application from Mendell indicates approximately $360,000 site development costs
that are TIF eligible costs. Included in this are stormwater improvements that are proposed to
be constructed under the parking lot so as to maximize development of their site. This type
of stormwater management improvement is considerably more expensive than typical
stormwater ponds and basins.
As Exhibit III indicates, the estimated net amount of increment that will be available over the
life of the proposed TIF District for Mendell is approximately $156,000. This is based on the
County Assessor's Office estimate market value of $1,047,000 for the proposed expansion. It
also assumes a 3% market value inflator which may or may not occur. The actual amount of
amount of assistance on this project will be determined by the actual tax increments. The
assistance will be provided on a pay-as-you-go reimbursement basis each year after the
property taxes have been paid by Mendell. The first reimbursement would occur in 2017 and
the last reimbursement in 2025. A Contract for Private Development that spells out the terms
and conditions for both Mendell and the City will be brought to the EDC at a future meeting.
As indicated, the proposed Mendell expansion will involve an 18,700 square foot expansion of
the Company's existing building on Grenada Court. The proposed expansion will require the
platting of Outlot B currently owned by Mendell. A proposed preliminary and final plat will be
reviewed by the Planning Commission in the near future.
ACTION REQUESTED
Recommend approval of the Tax Increment Financing Plan for Tax Increment Financing
District No. 20 to the City Council.
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. 20
ithin
Hake Redevelopment Project No.1
(Mendell Inc. Expansion Project)
Draft Dated: May 15, 2015
Public Hearing Scheduled: June 15, 2015
Anticipated Approval Date: June 15, 2015
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.9
I. INTRODUCTION AND LEGAL BASIS
A. Statement of Intent of Modification.....................................................................................1
B. Statement of Public Purpose............................................................................................1
C. Project Area Boundary ...................................................................................................1
D. Statement of Authority....................................................................................................1
Il. REDEVELOPMENT PROJECT
A.
Redevelopment Plan Objectives.......................................................................................1
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
Section
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
0.
P.
Q.
R.
S.
T.
U.
V.
W.
X.
Y.
Z.
AA
AB
TABLE OF CONTENTS
(Continued)
PART II
TAX INCREMENT FINANCING PLAN NO. 20
Definitions................................................................................................................... 5
StatutoryAuthorization..................................................................................................
5
Statement of Need and Public Purpose..............................................................................
5
Statementof Objectives.................................................................................................. 5
Designation of Tax Increment Financing District as an Economic Development District .................. 6
Durationof the TIF District...............................................................................................
6
Property to be Included in the TIF District............................................................................ 6
Property to be Acquired in the TIF District........................................................................... 7
Specific Development Expected to Occur Within the TIF District ............................................... 7
Findings and Need for Tax Increment Financing................................................................... 7
EstimatedPublic Costs................................................................................................... 9
Estimated Sources of Revenue........................................................................................ 9
Estimated Amount of Bonded Indebtedness........................................................................ 9
Original Net Tax Capacity.............................................................................................
10
OriginalTax Capacity Rate............................................................................................
10
Projected Retained Captured Net Tax Capacity and Projected Tax Increment ............................
10
Useof Tax Increment...................................................................................................11
Excess Tax Increment..................................................................................................12
Tax Increment Pooling and the Five Year Rule...................................................................12
Limitation on Administrative Expenses.............................................................................13
Limitation on Property Not Subject to Improvements - Four Year Rule......................................13
Estimated Impact on Other Taxing Jurisdictions..................................................................13
Prior Planned Improvements..........................................................................................14
Development Agreements............................................................................................. 14
Assessment Agreements.............................................................................................. 14
Modifications of the Tax Increment Financing Plan.............................................................. 15
Administration of the Tax Increment Financing Plan.............................................................15
Financial Reporting and Disclosure Requirements...............................................................16
Map of the Tax Increment Financing District within Redevelopment Project Area .............
AssumptionsReport ...........................................................................................................
Projected Tax Increment Report .........................................................................................
Estimated Impact on Other Taxing Jurisdictions Report .....................................................
Market Value Analysis Report .............................................................................................
Page(s)
.......... EXHIBIT I
.......... EXHIBIT II
.......... EXHIBIT III
.......... EXHIBIT IV
.......... EXHIBIT V
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
PART I
MODIFICATION NO.9
TO AIRLAKE REDEVELOPMENT PROJECT
I. 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 Mendell Expansion TIF 20 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 "I" "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
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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:
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
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.
City Activities — Plan Modification
a. A full discussion of the proposed City Activities can be found in Tax Increment District No. 4, 13,
14, 15, 16, 17, 18 and 19 Plans prepared by the City's consultant(s) and is hereby adopted by
reference.
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
i. Phase Nine (TIF #20) — Please see TIF #20 Plan
Section F Project Cost Estimates
A full description of project costs is provided in Tax Increment Financing District No.20 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.
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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.
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
PART II
TAX INCREMENT FINANCING PLAN NO. 20
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.
"City" 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 "Govemin4 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. 194, 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. 20.
"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.
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
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:
(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 City of the first tax
increment. The City anticipates that the TIF District will remain in existence the maximum duration allowed by law
(projected to be through the year 2025, assuming first increment is received in 2017). The district will remain open
through the year 2026 if the first collection of increment is in taxes payable 2018. The 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 3.07 -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:
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
Parcel ID Number Legal Description
22-31060-01-010 Lot 1, Block 1, Grenada Business Park.
22-31060-00-020 Outlot B, Grenada Business Park.
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 City may acquire and sell any or all of the property located within the TIF District; however, the 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 18,700 square foot expansion to the existing approximate
28,000 square foot facility. The development will result in increased employment (at least 12 jobs with wage ranges
between $51,000 and $59,300) within the City, as well as retain existing jobs, in compliance with statutory
requirements. It is anticipated tax increment will be used to finance a portion of the site development costs deemed
necessary for the project to proceed. In addition, the City anticipates 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 2015. The project is expected to be 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.•
The project includes the development of an approximately 18,700 square foot expansion of an existing
industrial manufacturing and warehouse facility. The proposed developer of the site has submitted
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
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. 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 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 $1,853,486, 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 $127,185 (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
$1,726,301 (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 expansion to an existing business
facility in the Project Area that is proposed to retain existing jobs and create new jobs in the City, while
retaining and creating these jobs in the State, plus create 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 creation, and wage levels.
(4) The TIF Plan conforms to general plans for development of the City as a whole.
Factual basis: The City Planning Commission has determined that the development proposed in the TIF
Plan conforms to the City comprehensive plan.
SPRINGSTED Page 8
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
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 155,912
Utilities 0
Other qualifying Improvements 0
Loan Interest payments 0
Administrative expenses 8,208
Total $164,120
The City anticipates using tax increment to the extent available to assist with financing a portion of the site
improvement costs, related administrative expenses, and other TIF -eligible expenditures as necessary and related
to development of the project.
The City reserves 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
164,120
Interest on invested funds
0
Loan proceeds
0
Special assessments
0
Rent/lease revenue
0
Grants
0
Total $164,120
The City anticipates providing financial assistance on a pay-as-you-go basis for site improvement 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 City to reimburse the developer/owner for public
costs incurred (see Section K).
The City reserves 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 City also reserves 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.
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 $164,120. The City currently plans to finance the improvement costs in the form of a pay -as -you go
revenue note, but reserves 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.
SPRINGSTED Page 9
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
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
$1,975,200 and the estimated tax capacity is $38,754, 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.
It is anticipated the request for certification of the District will occur prior to June 30, 2015 and the local tax rates for
taxes levied in 2014 and payable in 2015 will apply. For purposes of estimating the tax increment generated by the
TIF District, the sum of the local tax rates for taxes levied in 2014 and payable in 2015, is 105.073% as shown
below.
Total 105.073%
Section P Projected Retained Captured Net Tax Capacity and
Projected Tax Increment
The City anticipates that the project will begin construction in 2015 and be 100% completed by December 31, 2015,
creating a total tax capacity for TIF District No. 20 of $59,698 as of January 2, 2016. The captured tax capacity as of
SPRINGSTED Page 10
2014/2015
Taxing Jurisdiction
Local Tax Rate
City of Lakeville
38.948%
Dakota County
29.633%
ISD #194
31.459%
Other
5.033%
Total 105.073%
Section P Projected Retained Captured Net Tax Capacity and
Projected Tax Increment
The City anticipates that the project will begin construction in 2015 and be 100% completed by December 31, 2015,
creating a total tax capacity for TIF District No. 20 of $59,698 as of January 2, 2016. The captured tax capacity as of
SPRINGSTED Page 10
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
that date is estimated to be $12,698. The first year of tax increment is estimated to be $13,342 payable in 2017. A
complete schedule of estimated tax increment from the TIF District is shown in Exhibit III.
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 City the amount of captured net tax capacity each year. The City may choose
to retain any or all of this amount. It is the 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 City has 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.
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.
SPRINGSTED Page 11
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
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 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
(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.
SPRINGSTED Page 12
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
The City does 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 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 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 City or owner of the parcel subsequently commences any of the
above activities, the 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 City believes 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.
SPRINGSTED Page 13
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
1. The total amount of tax increment that will be generated over the life of the district is estimated to be
$164,722.
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 $42,150.
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 $56,150.
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 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.
There have been no building permits issued in the last 18 months in conjunction with any of the properties within the
TIF District.
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 City is purchased with tax increment bonds proceeds (to which tax increment from the property is
pledged), then prior to such acquisition, the City must enter into an agreement for the development of the property.
Such agreement must provide recourse for the City should the development not be completed.
The City anticipates entering into an agreement for development, but does not anticipate acquiring any property
located within the TIF District.
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 City does not anticipate entering into an assessment agreement.
SPRINGSTED Page 14
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
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 City; increase in the total estimated public costs; or designation of
additional property to be acquired by the 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 City agrees 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 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 City shall submit a copy of such plan to the Minnesota Department of Revenue.
The 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 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 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 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:
(1) prior to July 1, the 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;
SPRINGSTED Page 15
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
(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 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 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 City will comply
with all reporting requirements for the TIF District under Minnesota Statutes, Section 469.175, subdivisions 5 and 6.
SPRINGSTED Page 16
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Assumptions Report
Exhibit 11
City of Lakeville, Minnesota
Tax Increment Financing (Economic Development) District No. 20
Proposed Business Expansion (Mendell Inc.)
Draft TIF Plan Exhibits: EMV of $1.047M with 3% MV Inflator
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
06/30/15
12/31/25 (9 Years of Increment)
2014/2015
$1,975,200
$38,754
Assessment/Collection Year
2015/2016
2016/2017 2017/2018
2018/2019
Base Estimated Market Value $1,975,200
$1,975,200 $1,975,200
$1,975,200
Increase in Estimated Market Value 0
1,047,200 1,137,872
1,231,264
Total Estimated Market Value 1,975,200
3,022,400 3,113,072
3,206,464
Total Net Tax Capacity $38,754
$59,698 $61,511
$63,379
City of Lakeville
38.948%
Dakota County
29.633%
ISD #194
31.459%
Other
5.033%
Local Tax Capacity Rate
105.073% 2014/2015
Fiscal Disparities Contribution From TIF District
39.3723%
Administrative Retainage Percent (maximum = 10%)
5.00%
Pooling Percent
0.00%
Bonds
Note (Pay -As -You -Go)
Bonds Dated NA
Note Dated
06/30/15
Bond Issue @ 0.00% (NIC) NA
Note Rate
0.00%
Eligible Project Costs NA
Note Amount
$155,912
Present Value Date & Rate 06/30/15 4.00%
Present Value Amount
$120,389
Notes
Assumptions assume no change to future tax rates, class rates, and a 3% annual MV inflator is assumed
Final 2015 Tax Rates were used.
Total EMV upon completion based on $56/square foot value, as
provided by Assessor
Base EMV of $1,975,200 as provided by Dakota County
SPRINGSTED
Page 18
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Exhibit V
Market Value Analysis Report
City of Lakeville, Minnesota
Tax Increment Financing (Economic Development) District No. 20
Proposed Business Expansion (Mendell Inc.)
Draft TIF Plan Exhibits: EMV of $1.047M with 3% MV Inflator
Assumptions
Present Value Date
P.V. Rate - Gross T.I.
06/30/15
4.00%
Increase in EMV With TIF District
Less: P.V of Gross Tax Increment
Subtotal
Less: Increase in EMV Without TIF
Difference
$1,853,486
127,185
$1,726,301
0
$1,726,301
Annual
Present
Gross Tax
Value @
Year
Increment
4.00%
1 2017
13,342
12,214
2 2018
14,497
12,761
3 2019
15,687
13,277
4 2020
16,913
13,764
5 2021
18,175
14,222
6 2022
19,475
14,653
7 2023
20,814
15,059
8 2024
22,194
15,439
9 2025
23,615
15,796
$164,712
$127,185
SPRINGSTED Page 21
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item No. 5
City of Lakeville
Community & Economic Development
Memorandum
To: Economic Development Commission
From: David L. Olson, Community and Economic Development Director
Copy: Justin Miller, City Administrator
Rick Howden, Economic Development Specialist
Date: May 22, 2015
Subject: Update on Post Holdings Headquarters Project
Attached are the press releases sent by Post and the City on last week's announcement
regarding the Post Consumer Brands Division Headquarters being located in Lakeville that
you should have received previously. I have also attached some of the news articles that have
since appeared since the announcement.
Staff will provide an update on the summary of the discussions with Post since the
announcement as well as the next steps to be taken by both the City and the State of
Minnesota on this job retention project.
ACTION REQUESTED
No action is necessary this time.
FOR IMMEDIATE RELEASE
NEWS
from the City of Lakeville, Minnesota
DATE: 5-15-15
CONTACT: Dave Olson, Community & Economic Development Director, 952-985-4421
Lakeville to be home to Post Consumer Brands Headquarters
Post Holdings, Inc. announced today that Lakeville will be home to its combined cereal business and
leadership, called Post Consumer Brands. Earlier this month, Post acquired Lakeville -based MOM
Brands (formerly known as Malt -O -Meal). MOM Brands moved its technical support center to
Lakeville in 2009 and in 2012 relocated its headquarters from Minneapolis to the Fairfield Business
Campus in Lakeville. MOM Brands' corporate campus includes two buildings with a combined
165,000 square -feet on 20 acres of land.
"We are excited to welcome Post to Lakeville. The jobs that will be retained are the high -skill, high -
wage jobs that the Economic Development Commission and City Council have targeted as a high
priority" said Lakeville Mayor Matt Little. "As MOM Brands and now Post have discovered, Lakeville
is a great community to call home and be successful. We look forward to a long-term relationship with
Post and anticipate that this acquisition will lead to continued growth," Little said.
-30-
f osr.
Post Holdings Announces Headquarters for Combined Cereal Business and
Leadership
St. Louis, Missouri - May 15, 2015 - Post Holdings, Inc. (NYSE:POST), a consumer packaged goods holding company, today
announced plans to consolidate its Post Foods and MOM Brands cereal businesses into one group, to be headquartered in
Lakeville, Minnesota, at MOM Brands' existing facilities. As a result, Post expects to close its office in Parsippany, New
Jersey. The Parsippany office closure is expected to be completed by May 2016. This decision will impact approximately 200
employees across the businesses. Post will offer severance and transition assistance to affected employees.
The combined business, called Post Consumer Brands, will be led by MOM Brands President Chris Neugent. Mr. Neugent will
report to Rich Koulouris, who joined Post Holdings in February to lead Post Foods Group, comprising branded center -of -the -
store (Post Consumer Brands) as well as its private label retail businesses.
"Combining our businesses in Lakeville will create a powerful branded platform for both branded cereal and further
acquisitions." said Rob Vitale, Post Holdings' President and CEO. "While I am delighted that Chris and his colleagues are
joining Post, we are acutely aware of the contributions made by employees negatively impacted by this decision, and we are
committed to helping them through this transition."
Financial Details
In connection with these decisions, Post expects to incur pre-tax expenses of $27 million to $30 million for employee
severance, retention and relocation payments. Approximately half of these charges are expected to be incurred in Post's third
quarter of fiscal 2015 with cash payments in Post's fiscal 2016 and 2017. These expenses are a component of the previously
announced total estimated one-time charges to achieve cost synergies of between $70 million to $80 million and will not impact
Post's previously announced guidance for fiscal 2015.
These decisions are expected to result in savings as part of the approximately $50 million cost synergies which were previously
announced in connection with the acquisition of MOM Brands. Post currently expects to realize approximately $50 million in
run -rate cost synergies by the second full fiscal year following the closing of the MOM Brands acquisition.
Forward -Looking Statements
Certain matters discussed in this press release are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, including the closure of the Parsippany office and the expected timing of the closure, the
amount of employees affected by the decision, the amount and timing of the expenses and cash payments, and the amount and
timing of the expected synergies contemplated by the MOM Brands acquisition. These forward-looking statements are based on
the current expectations of Post and are subject to uncertainty and changes in circumstances. Such statements involve certain
risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made herein.
These risks and uncertainties include our ability to realize the synergies contemplated by the acquisition of MOM Brands; our
ability to promptly and effectively integrate the MOM Brands business; the recent avian influenza outbreak in the U.S.
Midwest; our ability to continue to compete in our product markets and our ability to retain market position; changes in our cost
structure, management, financing and business operations; significant volatility in the costs of certain raw materials,
commodities, packaging or energy used to manufacture our products; our ability to maintain competitive pricing, introduce new
products or successfully manage costs; our ability to successfully implement business strategies to reduce costs; changes in
economic conditions and consumer demand for our products; labor strikes, work stoppages or unionization efforts; our reliance
on third party manufacturers for certain of our products; disruptions or inefficiencies in supply chain; changes in weather
conditions, natural disasters, disease outbreaks and other events beyond our control; business disruptions caused by information
technology failures and/or technology hacking; and other risks and uncertainties described in the Company's filings with the
Securities and Exchange Commission. These forward-looking statements represent the Company's judgment as of the date of
this press release. Investors are cautioned not to place undue reliance on these forward-looking statements. The Company
disclaims, however, any intent or obligation to update these forward-looking statements.
About Post Holdings, Inc.
Post Holdings, Inc., headquartered in St. Louis, Missouri, is a consumer packaged goods holding company operating in the
center -of -the -store, private label, refrigerated and active nutrition food categories. The Post Foods Group spans the center -of -
the -store with branded and private label offerings. Through its Post Consumer Brands business, Post is a leader in the value
segment of ready -to -eat cereal and offers a broad portfolio that includes recognized brands such as Honey Bunches of Oats®,
PebblesTM, Great Grains®, Grape -Nuts®, Honeycomb®, Frosted Mini Spooners®, Golden Puffs®, Cinnamon Toasters@,
Fruity Dyno-Bites®, Cocoa Dyno-Bites®, Berry Colossal Crunch® and Malt -O -Meal® hot wheat cereal. The Post Foods
Group also manufactures private label cereal, granola, peanut butter and other nut butters, dried fruits and baking and snacking
nuts. Post's Michael Foods Group supplies value-added egg products, refrigerated potato products, cheese and other dairy case
products and dry pasta products to the private label retail, foodservice and ingredient channels and markets retail brands
including All Whites®, Better'n Eggs®, Simply Potatoes® and Crystal Farms®. Post's active nutrition platform aids
consumers in adopting healthier lifestyles through brands such as PowerBar®, Premier Protein®, Supreme Protein® and
Dymatize®. For more information, visit www.postholdings.com.
Contact:
Investor Relations
Brad Harper
brad.harper@postfoods.com
(314)644-7626
Community
Post to headquarter its
cereal division in
Lakeville
By Laura Adelmann
May 20, 2015 at 4:42 pm
Newly reorganized Post Foods recently announced it
has selected Lakeville as the location for its corporate
headquarters of its cereal division.
The company plans to consolidate its Post Foods and
MOM Brands cereal business, which Post bought in
January for $1.15 billion, in one group and close its
office in Parsippany, N.J., by May 2016 for the move to
Lakeville.
"It is fantastic news," said Lakeville Chamber of
Commerce President Tim Roche.
He called it "pretty significant" that the company is
shutting down its existing New Jersey location to keep
open the MOM Lakeville location.
"Historically when a company of this size is purchased,
the existing location/infrastructure doesn't last too
long," Roche said.
He said the decision "says a lot for MOM Brands, the
employees working in Lakeville and the workforce in
Minnesota."
Roche said he was not involved in discussions between
company officials, Mayor Matt Little, City Administrator
Justin Miller and Community Development Director
Dave Olson.
Olson indicated to the Pioneer Press newspaper last
week that the city offered financial incentives to keep
jobs in Lakeville, and indicated the type of deal would be
related to the number of jobs the company retains in
Lakeville.
In a press release, the company said its combined
business, called Post Consumer Brands, will be led by
MOM Brands President Chris Neugent. Neugent will
report to Rich Koulouris, who joined Post Holdings in
February to lead Post Foods Group.
The company stated it expects the change will cost $27
million to $30 million in pre-tax expenses for employee
severance, retention and relocation payments.
It also indicated the changes are expected to result in
savings as part of the approximately $50 million cost
synergies which were previously announced in
connection with the acquisition of MOM Brands.
"Post currently expects to realize approximately $50
million in run -rate cost synergies by the second full
fiscal year following the closing of the MOM Brands
acquisition," the company stated in its news release.
Filed Under: headquarters Lakeville, Lakeville news, Post
Consumer Brands
Roche said he was not involved in discussions between
company officials, Mayor Matt Little, City Administrator
Justin Miller and Community Development Director
Dave Olson.
Olson indicated to the Pioneer Press newspaper last
week that the city offered financial incentives to keep
jobs in Lakeville, and indicated the type of deal would be
related to the number of jobs the company retains in
Lakeville.
In a press release, the company said its combined
business, called Post Consumer Brands, will be led by
MOM Brands President Chris Neugent. Neugent will
report to Rich Koulouris, who joined Post Holdings in
February to lead Post Foods Group.
The company stated it expects the change will cost $27
million to $30 million in pre-tax expenses for employee
severance, retention and relocation payments.
It also indicated the changes are expected to result in
savings as part of the approximately $50 million cost
synergies which were previously announced in
connection with the acquisition of MOM Brands.
"Post currently expects to realize approximately $50
million in run -rate cost synergies by the second full
fiscal year following the closing of the MOM Brands
acquisition," the company stated in its news release.
Filed Under: headquarters Lakeville, Lakeville news, Post
Consumer Brands
Post to move cereal
headquarters to
Lakeville after Malt-0-
Meal
deal
St. Louis -based cereal maker Post, which bought the
Minnesota-based maker of Malt -O -Meal earlier this year, says
it will consolidate its cereal operations in Lakeville.
By Evan Ramstad Star Tribune MAY 15, 2015 — 9:50PM
JB REED, BLOOMBERG NEWS
A box of Post brand Honey Bunches of Oats cereal sits on a shelf at Garden of Eden
Grocery Store in New York.
The maker of Post cereals, which bought the Minnesota-based maker of Malt -0 -
Meal earlier this year, is combining the corporate offices of the two operations in
the Twin Cities suburb of Lakeville.
As a result of the decision, St. Louis -based Post Holdings will close its cereal
headquarters in Parsippany, N.J., where about 200 people worked. Some of them
will be offered the chance to move to Minnesota.
The announcement Friday ends a period of uncertainty for local workers at MOM
Brands, the longtime Minnesota company that Post bought in January for $1.15
billion.
The chief of MOM Brands, Chris Neugent, was tapped to lead Post Consumer
Brands, the new Post unit formed by the deal. Post's main headquarters will
remain in St. Louis.
A spokesman didn't return a call for comment. Post Holdings' stock traded lower
for most of the day and closed down 1.9 percent.
Post is known for Honey Bunches of Oats, Raisin Bran, Grape -Nuts and
Honeycomb.
In addition to Malt -O -Meal, MOM Brands makes low-priced versions of
established brands. The company's bestselling cereal, Frosted Mini Spooners,
resembles Kellogg's Frosted Mini -Wheats. It also makes private-label cereals,
oatmeal under the Better Oats label and other cereals branded Mom's Best.
Post said it will save about $5o million in annual expenses by combining the
operations in Minnesota. It said it expects a one-time charge of up to $3o million
to cover severance, relocation and other expenses in downsizing the New Jersey
office.
"Combining our businesses in Lakeville will create a powerful branded platform for
both branded cereal and further acquisitions," Rob Vitale, Post Holdings' president
and chief executive, said in a statement. "While I am delighted that Chris and his
colleagues are joining Post, we are acutely aware of the contributions made by
employees negatively impacted by this decision, and we are committed to helping
them through this transition."
Post and MOM combined have an 18 percent share of the U.S. cereal market.
General Mills Inc. and Kellogg Co. each have about a 30 percent market share.
MOM Brands employs 25o at its corporate office in Lakeville and about 65o at its
cold cereal plant in Northfield.
Post has been on a buying spree. In addition to MOM Brands, the company in the
past year bought Minnetonka -based Michael Foods, a maker of cheese, eggs and
refrigerated potatoes, as well as Dakota Growers Pasta Co., peanut butter maker
Golden Boy Foods Ltd., sports nutrition brand PowerBar and two other small
makers of diet supplements.
Lakeville Mayor Matt Little issued a statement saying he was excited by the news.
"The jobs that will be retained are the high -skill, high -wage jobs that the economic
development commission and City Council have targeted as a high priority," he
said.
evan.ramstad@startribune.com 612-673-4241
'4wpp 1x1 n
IJi'LIV�� LLL`
Memorandum
idem No. __L
City of Lakeville
Community & Economic Development
To: Economic Development Commission
From: Rick Howden, Economic Development Specialist'_#/
Copy: David L. Olson, Community & Economic Development Director
Justin Miller, City Administrator
Date: May 22, 2015
Subject: 2015 Strategic Plan for Economic Development Work Plan
In January 2014, the City Council accepted the EDC's 2014-2016 Strategic Plan for Economic
Development. This plan has provided the EDC and staff with a basis to focus on specific
initiatives during this three-year period. The 2014 Work Plan Update as discussed at the EDC's
March meeting serves as the foundation for the activities staff will pursue in 2015.
Please review the attached draft 2015 Work Plan for an update of the target dates that have
been identified.
Recommended Action: Staff is requesting EDC consensus on the target dates for the 2015
Work Plan.
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Memorandum
No. 7
City of Lakeville
Community & Economic Development
To: Economic Development Commission
From: David L. Olson, Community and Economic Development Director
Copy: Justin Miller, City Administrator
Rick Howden, Economic Development Specialist
Date: May 22, 2015
Subject: May Director's Report
The following is the Director's Report for May 2015.
Building Permit Report
The City has issued building permits with a total valuation of $57,732,712 through April. This
compares to a total valuation of $40,520,312 for building permits issued through April of
2014.
The City issued commercial and industrial permits with a total valuation of $20,158,000
through April compared to a total valuation of $2,231,000 during the same period in 2014.
The City has also issued permits for 80 single family homes through April with a total
valuation of $25,944,000. This compares to 103 single family home permits through April of
2014 with a total valuation of $35,326,000. The City has issued permits for 10 townhome
units through April with a total valuation of $2,504,000. This compares to zero townhome
permits issued through April of 2014. The City also issued a permit for 1 detached townhome
unit with a valuation of $285,000. This compares to 1 detached townhome permit issued
through April 2014.
Because of the significant increase in building permit activity, the City Council recently
authorized the hiring of an additional Plans Examiner/Building Inspector position. The person
that was hired for this position started this past Monday, May 18tH
Additional Brew Pub in Downtown Lakeville
It was announced at the May 13th Downtown Lakeville Business Association meeting that
Metro Equity is in discussions with a restaurant operator and micro brewer regarding a
proposed brew pub to be located in the former VFW building in Downtown Lakeville. The
project, if it proceeds, will involve considerable renovation of the interior of the former VFW
and will also include the construction of an outdoor patio.
America's Best Communities Prize Update
The City was notified in late April that the joint City/Chamber of Commerce/School District's
application to the Frontier Communications America's Best Communities was not selected to
be a quarter finalist. There were 347 cities that applied in states served by Frontier
Communications and only the City of Chisago was selected to move on in the process. While
Lakeville was not selected, there was still considerable benefit from going through the
application process in partnership with the Chamber of Commerce and School District.
Several of the primary issues facing the community as identified in the application are related
to work force availability and training. The City, Chamber and School District will continue to
attempt to address these issues in the coming years.
Development Update
City staff recently participated in a meeting coordinated by Greater MSP with a national site
selector and a major national manufacturer looking to locate a regional manufacturing in
Minnesota. Representatives of the Minnesota Department of Employment and Economic
Development were also in attendance. They expect to make a location decision sometime
this summer.
The City recently issued a building permit and construction will be starting soon on the
expansion of Applied Power Products (APP) located at the intersection of Lakeville Boulevard
and Heron Way. The expansion involves a 43,900 square foot expansion of the Company's
existing 70,000 square foot building.
This is a link to the most recent economic development update on the City's YouTube
channel. Please check it out. https:Hyoutu.be/xl8p3rgMtUw
Memorial Day Holiday
On behalf of staff, please have a safe and enjoyable Memorial Day weekend and remember
the men and women that have died in service to our country in the Armed Forces.
UPDATE: City Council creates TIF district around
Amazon for public infrastructure
By Cristeta Boarini cboarini@swpub.com I Posted: Tuesday, May 19, 2015 9:37 pm
On a 4 to 1 vote Tuesday night, the Shakopee City
Council opted to create a nine-year tax -increment
financing district on the site where Amazon.com
intends to build an 820,000 -square -foot, $220 million
distribution center in northern Shakopee that the
company says will employ 1,000.
All of the money captured by the TIF will go toward
improving public infrastructure. None of it will go
directly to Amazon.
City Councilor Matt Lehman was the lone dissenting
vote on the measure.
Amazon employee
An Amazon employee sorts items at one of
the online retailer's distribution facilities.
In effect, over a nine-year period, $5.77 million of
Amazon's tax dollars on its new facility will go directly toward city and county infrastructure
improvements at County Roads 101 and 83, as well as Fourth Avenue. Scott County will receive
$3.38 million and the city of Shakopee will receive $2.3 million.
Under a TIF district, taxes on a company's property are frozen at the current rate, before any
improvements are made. The new taxes generated because the improvements add increased value to
the property are then captured and put toward a specific use, usually returned to the company for
economic development like in the cases of Rahr Malting or Shutterfly. In Amazon's case, the online
retailer is not receiving any TIF dollars directly. Instead, all the funds are going to local government
for infrastructure improvement of roads, sewer, gutter and trails around Amazon's proposed 66 -acre
site at Shenandoah Drive and County Road 101.
"There are significant short-, mid- and long-term benefits for the taxpayers from this plan," said
Mayor Brad Tabke during the City Council meeting.
In the short term, the city, county and Shakopee public schools will receive about $20,000 each
annually in new tax revenue thanks to Amazon, said Shakopee Economic Development Coordinator
Samantha DiMaggio. The city's new TIF district was designed to capture only 90 percent of new tax
revenue from the Amazon property, leaving 10 percent of Amazon's projected new tax dollars to go
toward local governments on top of the $100,000 property tax bill currently levied on the site.
Amazon will also be paying about a $400,000 park dedication fee to the city, a city policy required
on all new development. The fee may go toward the construction of the city's Quarry Creek Park
near the Valley Park Business Center.
In the midterm, infrastructure improvements will greatly improve traffic flow in the area. Scott
County's transportation program delivery manager Lisa Freese said the county will extend the left -
turn lane from County Road 101 onto Shenandoah Drive. The county will also expand County Road
83 at Fourth Avenue to include turn lanes and medians. The work on County Road 101 is projected to
cost $107,000, while the improvements on County Road 83 are projected to cost $3.2 million, which
will be funded by the TIF.
The county's projects are projected to be done by 2017. A third -party traffic study had recommended
significantly more improvements, including more traffic signals and work at County Road 83 and
12th Avenue, but the county was not ready to commit to so much expensive work.
"We decided that we need to focus on improvements that are warranted today, rather than five years
from now," Freese said at Tuesday's Scott County Board meeting. "These are `opening day' kind of
impacts."
The city will be expanding Fourth Avenue to a three -lane divided highway with trails and sewer and
gutter improvements. Shenandoah Drive and Fourth Avenue west of TE Connectivity will see
significant reconstruction to better carry truck traffic. The city's administrative and construction costs
are projected at $2.3 million.
In the long term, improving the infrastructure in the area will draw more businesses to Shakopee.
DiMaggio said a 200 -employee business looking to move in to the property due west of the Amazon
site will not come to Shakopee unless the improvements are made. The same is true for sites to the
south of the Amazon site.
"If we want to grow, we have to bring in these improvements," DiMaggio said.
New businesses in the area will increase the tax base, Tabke pointed out. While $5.77 million of
Amazon's new tax dollars will go toward these road improvements over nine years, the company is
signing a 15 -year lease and could stay in town for much longer. After the TIF district's term ends, all
of Amazon's tax dollars would go to county, city and school general funds.
While the City Council was swayed by the many benefits for Shakopee, members of the public
questioned whether Amazon would be a good neighbor and a fair business leader.
Tom Hennen, former Scott County auditor who lives near Amazon's proposed site, decried
Amazon's wages as too low. Citing a Minnesota Department of Employment and Economic
Development study, Hennen said a typical family has to earn at least $17.92 per hour to meet the
needs of health and safety in the Twin Cities metro. Amazon's wages of $12 per hour and $16 per
hour fall far short of that guideline, Hennen said.
St. Paul business owner Dan Marshall representing the Metro Independent Business Alliance said
Amazon forces out local small businesses.
"Amazon takes jobs away. When you purchase something with same day shipping, you won't buy at
your local store," Marshall said.
Mike Grella, economic development director for Amazon, refuted all the negative comments. He said
that while the wages may seem low, comprehensive health care benefits, 401(k) matching, and stock
grants are available to employees from day one, while college tuition reimbursement and raises and
promotion are available after a year. Grella pointed out that Amazon provides a virtual storefront for
thousands of small businesses, indirectly helping bring in many local jobs.
"Here's the bottom line, this isn't going to raise your taxes," said Councilor Mike Luce.
REAL ESTATE INC.
Amazon gives up on tax breaks for Shakopee project
May 19, 2015,11:18a m CDT
Sam Black
Minneapolis / St. Paul Business Journal
Share
Amazon.com has yanked its request for about $1.2
million in tax incentives to build a $220 million
distribution center in Shakopee.
Mike Grella, Amazon's director of economic
development, officially withdrew the request in an
email to the city, Shakopee Mayor Brad Tabke said
Tuesday morning.
The project will still use $5.77 million in property taxes
gained from the new building to upgrade roads, but the
switch in plans mean none of the funds will directly
subsidize the Seattle -based internet retailer's 1,000 -
worker distribution center.
ANTHONY BOLANTE I PUGET SOUND BUSINESS JOURNAL
Amazon is making plans to build an 820,000 -
square -foot distribution center in Shakopee,...
more
Tabke said in an interview that Amazon's opinion was that "the
small amount that it ended up being on such a large project, it
wasn't worth the work getting done on it."
The project needed three votes of the five -person City Council.
At least one member said he would oppose the project.
Shakopee officials scaled back the incentive plan from $6.4
million since Amazon made its initial pitch to the city earlier
this month.
Tabke expects the City Council to approve the project at
Tuesday night's meeting. "It's a great solution for everyone
involved," he said.
NANCY KUEHN I MPSBJ
Shakopee Mayor Brad Tabke
Amazon isn't seeking any other public subsidy for the project
including funding from the Minnesota Department of
Employment and Economic Development, which is unusual
for an economic development project of its size.
Amazon jobs with average wages of $35,000 per year didn't
excite the City Council for the project on what is the last large
piece of land in the city's biggest business park.
"It's not a perfect project for this area, but it will be a great
project for the region and Shakopee, especially now that we
don't have the incentive part of it," Tabke said.
Other cities have opened their wallets for large Amazon
distribution centers. A project in Kenosha, Wis. got at least $10
million in tax credits.
"Shakopee obviously has a very different tax climate," Tabke
said. Offering to upgrade the roads "is the only thing we can
do. "
SUBMITTED
Amazon.com plans to invest... more
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HOME OF THE DAY
One of Orono's Finest
a
SOUTH METRO
Family history tells the story of Airlake
Industrial Park in Lakeville
The book "Maynard's Memories" shares reflections of an early
Lakeville business leader.
By Todd Nelson () MAY 16, 2015 — 12:47AM
Maynard Johnson never shied from hard work. He just wanted to do it in business rather
than on a farm.
That's why, when he came across a large swath of undeveloped land in what then was
the village of Lakeville in 1966, he envisioned industrial buildings, jobs and a mile -long
airstrip there instead of livestock and crops.
The result of that vision, which Johnson pursued with fellow executives of the former
Bloomington -based Hitchcock Industries, was Airlake Industrial Park. Decades later, the
park, home to as many as 200 companies and an estimated 4,500 employees, continues
to serve as an engine of economic growth in the south metro.
The 1,500 -acre park, one of the state's largest contiguous industrial parks, has attracted
companies ranging from start-ups to large corporations and has driven commercial and
residential development in what now is a city with nearly 60,000 people.
"It makes me feel good," Johnson, 93, said. "You could see opportunities happening
there, right in front of my eyes, that I had never seen before. It's good to share that — but
it's good to make money, too."
The birth of Airlake Industrial Park, Johnson's love of business dealings, and his
willingness to help others build companies or careers are central subjects of "Maynard's
Memories," a new book written by Johnson's grandson, Twin Cities public relations
veteran Brant Skogrand.
Skogrand began taping conversations with Johnson after his 92nd birthday, "to learn
more about who he was besides just my grandpa."
"I knew that in some respects he was a big deal with Lakeville, Hitchcock Industries and
Airlake Industrial Park," Skogrand said. "But once I dug in and started to talk to him in
more detail about it and his associates at the time, I realized what an impact he's had,
particularly on Lakeville. Maybe it's that Norwegian heritage, but in some respects he's
humble about his accomplishments."
In addition to serving as general manager of Airlake Industrial Park, Johnson helped
start Panorama of Progress, or Pan-O-Prog, Lakeville's weeklong summer festival. He
was the festival grand marshal in 1983. Johnson also worked with the group that
founded the Lakeville Chamber of Commerce, served as its president and was named its
Business Person of the Year in 1997.
Grandfather's lessons
As Skogrand reflected on the recordings he made with his grandfather, he identified 15
"life lessons" that contributed to Johnson's success, insights that Skogrand said he
believed "would improve anyone's life." Skogrand rounded out the lessons with relevant
anecdotes from his grandfather's life, producing a book that is available on Amazon.com
and that the Minnesota, Dakota County and Lakeville historical societies have accepted
into their collections.
The lessons include "Work hard and step up to leadership" and "Fake the time to enjoy
life." The "Go into business instead of farming" lesson was reinforced for Johnson when
his father's illness forced Johnson to leave college for a year to run the family farm in
Dawson, in western Minnesota. After serving in the Navy in World War II, Johnson
worked at Hitchcock Industries from 1946 until his retirement 25 years ago. In the early
years of his career he took night classes at the University of Minnesota to complete a
business administration degree.
Among those Johnson hired at Hitchcock Industries was Jack Matasosky, whose Appro
Development has led projects at Airlake Industrial Park since Hitchcock sold the land in
the 1980s. On some occasions, Matasosky said, Johnson used his own money to finance
buildings to help make companies "comfortable enough to ultimately own and invest in
(http://stmedia.startribune.com/images/ows_1431754,
"Maynard's Memories," by Brant Skogrand and
published by Skogrand PR Solutions Details: 83
pages, $8.99 paperback, $4.99 for Kindle on...
what was a cornfield.
"Maynard put his money where his mouth was and basically built many of the buildings
and leased them until [companies] were comfortable that it was the right thing to do
and then they'd buy their buildings from him," Matasosky said.
The park is unusual in that it was privately developed and offers both a railroad
connection and Airlake Airport, which the Metropolitan Airports Commission now
owns, said David Olson, Lakeville's community and economic development director.
"Having Airlake Industrial Park has been an asset to the city," Olson said. 'The
availability of land for companies looking to locate in Lakeville, having that industrial
park has been a benefit to the city of Lakeville for decades."
Todd Nelson is a freelance writer in Woodbury. His e-mail is todd_nelson@mac.com
�u'�� NEWS RELEASE
State Adds 7,400 Jobs in April
Unemployment rate drops to 3.7 percent
May 21, 2015
Madeline Koch, 651-259-7236
Madeline.Koch@state.mn.us
ST. PAUL — Minnesota employers added 7,400 jobs in April, according to figures released today by
the Minnesota Department of Employment and Economic Development (DEED).
The agency said Minnesota has gained 25,500 jobs in the past three months and 46,114 jobs over
the past year. Jobs have increased 1.7 percent in the state in the past 12 months, compared with a
2.2 percent growth rate nationally during that period.
The state's unemployment rate was 3.7 percent in April, down 0.1 percent from the revised
unemployment rate of 3.8 percent in March. The U.S. unemployment rate in April was 5.4 percent.
The state's labor force participation rate climbed to 70.7 percent in April, its highest level in 3-1/2
years.
Construction led all sectors in April with 6,600 new jobs. Other industries that added jobs were
professional and business services (up 3,400), trade, transportation and utilities (up 2,200),
manufacturing (up 900), logging and mining (up 400) and financial activities (up 400).
Government lost 2,500 jobs in April, followed by education and health services (down 2,200), other
services (down 700), leisure and hospitality (down 600) and information (down 500).
Over the past year, professional and business services led all sectors with 12,006 new jobs. Other
sectors that have added jobs in the past 12 months are education and health services (up 10,692),
leisure and hospitality (up 7,490), trade, transportation and utilities (up 7,018), manufacturing (up
5,891), construction (up 4,828), other services (up 706) and financial activities (up 403).
The following sectors lost jobs in the past 12 months: government (down 2,830), logging and mining
(down 62) and information (down 28).
In the Metropolitan Statistical Areas, the following regions gained jobs in the past 12 months:
Minneapolis -St. Paul MSA (up 1.8 percent), Mankato MSA (up 0.7 percent), Duluth -Superior MSA (up
0.7 percent) and Rochester MSA (up 0.6 percent). The St. Cloud MSA was statistically unchanged
(0.0 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. Go here for details.
Job growth in Twin Cities driven
by ' Suburban Edge,'according to
Met Council report
By Peter Callaghan 05/06/15
REUTERS/Brian Snyder
isn't."
Tweet
It was just one chart in a
14 -page MetroStats
report released this
spring by the research
team at the
Metropolitan Council —
and what it showed was
curious, if not totally
unexpected.
The authors titled it,
"Percent change in total
employment between
20oo and 2014 by sub-
regions in the Twin
Cities." But it might as
well have been called,
"Where the job -growth
The data showed that two sub -regions of the metro area — suburban Hennepin County and the
city of St. Paul — each had net job losses of more than 11,000 over that decade and a half.
The numbers looked a bit better for suburban Ramsey County and the city of Minneapolis, but
not by much. Both areas showed job growth of less than 1 percent over the period. Taken as a
whole, the region has added 40,593 jobs since 2000. But nearly all of the growth was in
Dakota, Anoka, Carver, Scott and Washington counties.
Net change in employment, 2010-2014
Overall job growth in the Twin Cities metro region was driven by suburban counties.
Anoka County
Carver County
Dakota County
City of Minneapolis
Suburban Hennepin County
City of St. Paul
Suburban Ramsey County
Scott County
Washington County
Twin Cities Region
-20k
-10k
I
I
i
I
I
Ok 10k 20k 30k 40k
Jobs gained or lost
50k
Source: Metropolitan Council, Minnesota Department of Employment and Economic Development, Quarterly
Census of Employment and Wages, 2000 and 2014.
The overall report was more buoyant, noting that the region has regained jobs lost to the
recession faster than the nation as a whole. It's job growth is 14th among the top 25 regions in
the U.S. when measured by average annual job growth. Minnesota's current unemployment
rate is 3.7 percent, well below the nation's 5.5 percent.
But the subregional numbers tell a story of uneven growth. The two biggest cities and the two
biggest counties are still big players in the regional economy, of course. Minneapolis is home
to 19 percent of the Metro's jobs, while suburban Hennepin County has another 34 percent.
That's more than 850,000 jobs. Smaller but still significant is St. Paul with 11 percent and
suburban Ramsey County with another 9 percent.
But after suffering through two recessions in the years studied in the report — the post- 9/11
downturn and the Great Recession — those areas are net losers or are flat in job growth. Also
net job losers during the period are Bloomington, Plymouth, Edina, Minnetonka and Roseville.
In contrast, Dakota County gained 40,593 jobs over the same time period — nearly two-thirds
of the region's job growth, while Scott County had a job growth of 26 percent. Among cities,
big job gainers were Maple Grove and Eagan, each gaining more than 1o,000 jobs.
What might be surprising to a lay person is less so to economists and researchers. Libby
Starling, who manages the team that produced the report, Met Council's Regional Policy and
Research group, says the time period covered by the chart is significant since it begins before
the economic events that cost the region more than 63,000 jobs.
"The post 9-11 recession is where Minneapolis lost a lot of jobs," Starling said. "It is just now
picking up." Two significant corporate actions help explain the job losses in St. Paul and
suburban Hennepin County — the closure of the Ford plant and its 5,000 jobs in St. Paul and
the merger of Northwest Airlines and Delta that cost the region a corporate headquarters.
Louis D. Johnston, an economics professor at the McCarthy Center at St. John's University
(and a MinnPost contributor), said the chart reflects a familiar and long-running pattern.
"Hennepin has 53 percent of all employment, and businesses are probably moving just over
the border to Scott and Carver, same with Ramsey to Washington and Dakota counties," he
said. "There's a pattern you see since World War II in these moves: firms that start in St. Paul
stay on the St. Paul side (e.g. West Publishing, now Thomson -Reuters, started in downtown St.
Paul and went to Eagan) and those in Minneapolis stay on that side (General Mills moved from
the milling district to Golden Valley.) It's still two business ecosystems that keep sprawling
outward."
Starling sees a somewhat different but related pattern. There are certainly employment
centers in the outer counties that have attracted regional and national employers. But as
people move into the so-called collar counties, jobs in education, health services and retail
follow to serve that population. "Jobs follow the residential growth," she said.
According to the report, "Many of the cities where job growth is rapid — such as Blaine,
Shakopee, Woodbury and Chanhassen — are in the region's Suburban Edge or Emerging
Suburban Edge and are experiencing fast residential development and growth as well."
Change in total jobs between 2000 to 2014 for cities and townships in
the Twin Cities region
Change in Employment, 2000 to 2014 1r WIN*
Loss of 2,000 or More
Oe
Loss of 500 to 1.898 own MLTROPOLITAN
Lou of Up to 499 i C a V h C
No Change S ANOKA
LW
Gain of Up to 499
Gain of $00 to 1-999
Gain of 2.000 or More
Date Supremed
WASHINGTON
P"
oco
T'
J
**Q"w
--CARVER
Kamm!,AK[? IIS
To
mum"
t46-
4-J.
-------------------- - J I C-------
L - - - - - -- -
0 5 •.pQ 15 -
County Boundaries Interstate Highways
Coy and Township Boundanes State, US Highways and County
Rows
Source: Metropolitan Council
Click for larger map.
Starling suggests that those looking for some more -encouraging numbers look at the same
data set but limit the time period to between 2010 and 2014. The first year marks the trough
of the recessionary job losses. Since then, all subregions of the Metro show positive job growth
numbers, some growing significantly.
Suburban Hennepin County, for example, gained 60,128 jobs from 2010 to 2014, while
Minneapolis gained 26,626. On the other side of the river, Ramsey County added 8,471 jobs
and St. Paul grew by 1,077 in that same period.
BUSINESS
Twin Cities home sales surge due to low
rates, higher home prices
The housing market in the Twin Cities had its best month in nearly
a decade, boosting confidence in the recovery — and prices.
By Jim Buchta (Http://Www.Startribune.Com/Jim-Buchta/106"536/) Star Tribune
MAY 12. 2015 — 9:47PM
The housing market in the Twin Cities enjoyed its best month in nearly a decade in
April, boosting confidence in the recovery — and prices.
Buyers signed 6,329 purchase agreements in the 13 -county metro area. That's the most
since June 2005 and a 26 percent increase over last year, according to the Minneapolis
Area Association of Realtors (MAAR).
Prices were up, as well. The median price of all sales last month was $215,600, a 10
percent increase over last year.
"Buyers are truly out in force this spring," said Mike Hoffman, MAAR's president.
"Climbing rents, consistent job growth and finally some beginning signs of wage growth
are all encouraging Twin Citizens to invest in homeownership."
April 2015 pending homes sales in Twin Cities highest
since 2005
= April Pending Sales
8000
6000
4000
2000
2003 2005 2007 2009 2011 2013 2015
Source: Minneapolis Area Association of Realtors (MAAR)
After a disappointing 2014, when sales fell 7 percent, home sales are rising sharply again
because of low mortgage rates, higher home prices and steep declines in foreclosures.
"I don't recall a spring market this strong," said Dave Doran, broker for Exit Realty
Metro in Minneapolis, who entered the business a dozen years ago. "If you are on the
fence about listing your home at this time, I think you may be pleasantly surprised with
the market value."
For buyers, persistently low mortgage rates have been a major lure. Despite expectations
that the average 30 -year fixed rate mortgage would now be nearing 5 percent, that 30 -
year mortgage average has remained below 4 percent, nearly half its historical average.
At the same time, getting a mortgage is now a little easier than it's been during recent
years. With the recovery on solid footing and lenders seeing more economic stability,
lending standards loosened slightly during April, especially for those seeking a
government -backed mortgage, according to a mortgage credit availability report
released Tuesday by the Mortgage Bankers Association.
Despite improvements in nearly every sector of the housing market, nearly 1 in 7
homeowners still owe more than their house is worth. That situation is rapidly changing
as home prices rise, lifting thousands of homeowners out of negative equity and into the
market.
That's one of the reasons there were 8,613 new listings last month, a 10.7 percent
increase over last year. And the bulk of those listings came from traditional sellers rather
than banks and investors.
(http://stmedia.startribune.com/images/ows_l 43148504848895.j p g
ELIZABETH FLORES • EFLORESCt STARTRIBUNE.COM
Sue Boxrud with daughter Lillie, 1, in a
makeshift nursery. Boxrud and husband, Drew,
are living with his parents while their new...
(http://stmedia.startribune.com/images/ows_143148505'.
Sue Boxrud, left, tended to daughter Lillie, 1, as
her mother-in-law, Nancy Boxrud, served
breakfast. Sue and husband, Drew, are...
But sales are outpacing supply in some parts of the metro area, and the total number of
properties for sale at the end of the month fell 1.9 percent. During April there were 4,701
closings, a 21 percent increase from last year. At the current sales pace, there are now
only enough properties to last 3.4 months.
This imbalance between supply and demand is creating serious competition among
buyers. About 20 percent of sellers are getting multiple bids for their homes. In 2005, the
peak year for multiple bids, one in three sellers received more than one offer.
The competition is particularly visible in Minneapolis and St. Paul, where demand is
especially strong for starter houses in move -in ready condition.
When Sue and Drew Boxrud, for example, sensed that house prices in their St. Paul
neighborhood were finally on the rise, they were seduced by the prospect of a newer,
larger house. The couple, with a new baby, had already replaced the roof and the
windows, and did everything their agent, Doran, told them to do to get it ready for sale.
"We were really nervous," Drew Boxrud said. "We weren't sure that we'd get enough to
get the new house we wanted."
After shopping around a bit, the Boxruds were not able to find exactly what they wanted
in their $300,000 to $400,000 price range, so they decided to build a house in Lakeville.
They put their belongings in storage and moved into the basement of Drew's parents'
house in Ham Lake.
At 11 p.m. on a recent Friday they listed their house for $157,000. By the next day at 9
p.m., they had 13 showings and three offers, including one for $6,000 over the list price.
"We have heard so much about how long it can take to sell a house," Sue Boxrud said.
"We were shocked and pleasantly surprised."
jim.buchta@startribune.com 612-673-7376