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Home My WebLink About08-25-15 CITY OF LAKEVILLE ECONOMIC DEVELOPMENT COMMISSION MEETING MINUTES August 25, 2015 1. 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, Matasosky, Emond, Scherer, Vlasak, Gillen, Ex-officio members Miller and Roche Members Absent: Comms. Smith, Rajavouri, Ex-officio member Mayor Little Others Present: Gene Goddard, Greater MSP; John Shoffner, DEED; Dan Salzar, Scannell; David Olson, Community & Economic Development Director; Rick Howden, Economic Development Specialist. 2. Approval of May 26, 2015 meeting minutes Motion Comms. Matasosky/Emond moved to approve the minutes of the May .Motion carried unanimously 26, 2015 meeting as presented . 3. Review of Tax Increment Financing (TIF) Application and State Job Creation Fund and Minnesota Investment Fund applications for the SSB Manufacturing Company Mr. Olson introduced Gene Goddard, Director, Business Investment with Greater MSP as well as John Shoffner, with the Office of Business Development for DEED. Mr. Olson stated that this project started with an inquiry by Greater MSP in March and asked that Mr. Goddard describe the process by which this project decided to locate in Lakeville. Mr. Goddard explained that a representative from Greater MSP was in attendance at a Site Selector Guild conference and connected with a representative from CBRE who had recently started working on a project that may be a good candidate for Minnesota. This prompted Greater MSP to send a Request for Information (RFI) to City’s throughout the Greater MSP region. Following the RFIs, site tours were also conducted. Eventually Mr. Olson stated that SSB Manufacturing Company has submitted an application for Tax Increment Financing. The proposed project is a 240,000 square foot manufacturing and warehouse facility. SSB Manufacturing is the company that manufactures Serta and Simmons mattresses and is the #1 mattress manufacturer in the United States. Mr. Olson also stated that the project also incorporates new automation technology which is the first of its kind in the industry. This has resulted in SSB undertaking a major restructuring of their manufacturing footprint in the United States including the consolidation of facilities and establishing new regional manufacturing sites. The estimated development cost of the project is $15.7 million and it is proposed to be located on a 23 acre site in the new Interstate South Logistics Park located in the southwest corner of Co. Rd. 70 and Dodd Blvd. The actual TIF will yet to be determined once the building plans are submitted to the County Assessor and a value established. The project will result in the creation of 200 new jobs in Lakeville and the State of Minnesota. The average starting wage is $36,100 ($17.35 per hour) excluding benefits. These jobs will be quality positions that are not manual labor jobs but rather will require automation experience based on the new investments in advanced machinery. The total investment in machinery and equipment for this project is $10 million in addition to the $15.7 million project construction cost. The SSB Manufacturing Tax Increment Financing (TIF) application is seeking TIF assistance in the amount of $1,645,929 which is identified as the financing gap in the project. The total amount of TIF eligible costs for the project is estimated at $7.7 million. Based on assumptions, Springsted estimates that providing 95% of the available increment to the project would result in a maximum amount of $1,607,350 that would be available in pay-as-you-go TIF reimbursements beginning in 2017 and ending 2025 for TIF eligible project costs. Additionally 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. Interstate South Logistics Park is not currently located within the Airlake Redevelopment Project Area. It is proposed in the proposed TIF Plan for this project that the current Airlake Redevelopment Project Area be amended to include the Interstate South Logistics Park in order to create a new TIF District for this project. Mr. Shoffner also reviewed DEED’s involvement in the project which includes a $1 million forgivable loan from the Minnesota Investment Fund. DEED is also considering $1,094,000 from the Job Creation Fund for this project. $208,000 in a capital investment rebate and $886,000 in a job creation award. The company is also working on a Job Skills Partnership which requires a 1 to 1 match up to $400,000. Motion Comms. Matasosky/Scherer moved to recommend approval to the City Motion Council of the proposed TIF Application for SSB Manufacturing Company. passed unanimously. 4. Review of Minnesota Investment Fund Application for Post Holdings Division Headquarters Project Mr. Howden explained that earlier this Spring, in discussions with representatives from Post Holdings “Post”, regarding locating their new combined cereal division that will be called Post Consumer Brands, both the City and the Minnesota Department of Employment and Economic Development (DEED) proposed job retention incentives. Mr. Howden stated that the City has submitted an application to the Minnesota Investment Fund (MIF) administered by DEED on behalf of Post. The application will propose a state funded incentive of $3,000 per job retained up to 250 jobs for a maximum of $750,000. DEED has proposed that this be a deferred loan with the balance being forgiven after 1 year if all job goals have been achieved. The initial and supplemental application has been submitted to DEED and is attached. As part of the supplemental application information, a public hearing was held at the August rd 3 City Council meeting. The next step will be for Post Holdings to submit their supplemental application before the Commissioner of DEED will provide an award letter. Following the award, the City will need to approve a grant agreement between the City and DEED as well as a loan agreement between the City and Post Holdings Inc. No action is required. 5. Director’s Report rd Mr. Olson reviewed the Director’s Report. On Tuesday, June 23 the Minnesota th Commercial Association of Realtors (MNCAR) held their 12 Annual Golf Tournament at Legends Golf Club in Prior Lake. The Golf Tournament hosts over 150 brokers from around the metro area. As in 2014, the City was once again the dinner sponsor for the event and Mayor Little welcomed the golfers to the dinner. th A groundbreaking was held on August 20 for the 18,700 square-foot addition to the Mendell Machine and Manufacturing in Airlake Industrial Park. In addition, Mendell recently received approval for $155,912 in Tax Increment Financing (TIF) for its expansion which will require them to add at least 12 new jobs over the next two years. The company plans to add 12 to 25 new jobs within three years with an average wage of $24.67 an hour. The Minnesota Department of Employment and Economic Development (DEED) also will award Mendell up to $326,135 from the Job Creation Fund if it reaches its goal of 25 new jobs within the next three years. Jeff Rossate, Director of Business Development for DEED attended the ground-breaking. Thanks to EDC Members Jack Matasosky, Glenn Starfield and Dan Vlasak for also attending the event. Sonnet Montessori School is constructing 5,600-square-foot Montessori School located on Idealic Avenue, behind the Heritage Commons Cub Foods. The project is expected to be completed by late September or early October. Construction began recently on The Goddard School, an 8,855 square-foot daycare facility in the Spirit of Brandtjen Farm commercial district east of Pilot Knob Road (CSAH th 31) and south of 160 Street (CSAH 46). This project is also expected to be completed this fall. Hy-Vee has received a building permit for their 92,000 square-foot grocery store that includes a sit-down restaurant and a free-standing gas convenience store as well as a separate four-bay automatic car wash. Hy-Vee will also be located in the Spirit of Brandtjen Farm commercial district at the southeast corner of County Road 46 and Pilot Knob Road. Construction is expected to be completed sometime next Spring or early Summer. The Center for Diagnostic Imaging opened last month in the Oak Corners Development, southeast of County Road 60 (185th Street) and County Road 50 (Kenwood Trail). The new medical office building will be nearly 8,500 square feet with multiple tenants. Center for Diagnostic Imaging will be one tenant and will occupy over 4,200 square feet of the building. A Conditional Use Permit (CUP) Application was approved by the City Council for a 3 story, 83 unit extended stay hotel project to be located in the southwest quadrant of County Road 70 and I-35. The CUP is required to address the building height, which is currently planned to slightly exceed the height requirements of the City Code. This project is being developed by a partnership that includes Jamie Dahlen, who owns and operates the Holiday Inn Hotel & Suites. 8. Adjourn Meeting adjourned at 5:50 p.m. Respectfully submitted by Rick Howden, Economic Development Specialist