HomeMy WebLinkAbout02-22-17
CITY OF LAKEVILLE
ECONOMIC DEVELOPMENT COMMISSION
MEETING MINUTES
February 22, 2017
1. Vice Chair Longie called the meeting to order at 4:30 p.m. in the Marion Conference
Room at City Hall.
Members Present: Comms. Longie, Matasosky, Vlasak, Collman, Rajavouri, and Emond
Ex-officio members: Mayor Doug Anderson, City Administrator Miller, Chamber President
Roche
Members Absent: Comms. Starfield, Smith, Scherer, and Gillen
Others Present: David Olson, Community & Economic Development Director; Rick
Howden, Economic Development Specialist.
2. Approval of January 23, 2017 meeting minutes
Comms. Matasosky/Emond moved to approve the minutes of the January 23, 2017
meeting as presented. Motion carried unanimously.
3. Review of Preliminary Application for Tax Increment Financing for the proposed
Launch Park Development
Mr. Olson stated that the City received an application for Tax Increment Financing (TIF)
assistance from Launch Properties LLC (Launch) on February 14th. Launch is proposing
to develop a portion of the Hat Trick Investment property located in the industrial park east
of Cedar Avenue. (see attached location map). Launch is proposing to construct a
286,000 square foot office-warehouse building on 21 acres of this property.
Approximately 150, 000 square feet of this building would be leased to Menasha
Packaging.
Menasha Packaging has operated in Lakeville since 1970. Their current manufacturing
facility is located at 8085 220th Street. Menasha completed a 120,000 square foot
expansion of this facility in 2014. The City provided up to $626,000 in Tax Increment
Financing assistance for this expansion and the State of MN Department of Employment
and Economic Development provided $422,520 in Job Creation Fund assistance.
Menasha committed to retaining 221 existing jobs and to create 15 new jobs. As of March
30, 2016 Menasha reported that they had retained 221 jobs and created 25 new jobs.
Menasha is in the process of relocating manufacturing and warehouse functions that they
had in Brooklyn Park to Lakeville. This will result in 75 new jobs coming to Lakeville and
also creates the need for more space in Lakeville.
Launch is also in discussions with another prospective tenant to occupy an additional
90,000 square feet of the proposed 280,000 square foot building. This tenant remains
confidential at this time, but is another manufacturing company that would relocate an
additional 80 jobs to Lakeville with an average wage level of $58,000 per year not
including benefits.
Launch has indicated that a development cost of $17,670,000 for the project. The request
for TIF is to assist in filling a project financing gap of approximately $1,941,076. The
proposed project includes significant infrastructure costs since the proposed site is a
considerable distance from existing municipal services such as water and sewer service.
A new east-west public street, along with turn-lane improvements on Cedar Avenue are
also required for the project.
The Launch TIF application includes an estimate of increased market value for property
tax purposes of $11,936,140 after all of the proposed improvements have been
constructed. (It should be noted that this estimate of market value has not been
confirmed by the County Assessor’s Office.) Based on this estimate, Launch has
estimated the total amount of new property taxes upon completion of the proposed
improvements would be $471,776. After the State Property Tax and Fiscal Disparities are
deducted since they are not able to be captured as tax increments, the preliminary
estimated total of tax increment to be generated is $215,675 per year or a maximum of
$1,941,076 over the maximum life of a nine year Economic Development TIF District.
The TIF application indicates that any assistance be provided on a pay-as-you-go basis
which means that TIF funds would be reimbursed on an annual basis after the payment of
property taxes has occurred. This eliminates any financial risk to the City.
The amount of any proposed TIF assistance for this project does not need to be
determined at this time. The estimated TIF eligible costs for the project are estimated at
$2.964 million and thus no level of TIF assistance would cover all of the TIF eligible
project costs. It should also be noted that Launch has requested the City consider
installing the street, water and sewer improvements as a public improvement project and
that Launch would enter into an assessment agreement with the City to pay 100% of this
portion of the development cost for the project over a period of years.
Comms. Emond/Collman moved to recommend this proposal be forwarded to the City
Council for review. Motion carried. Comm. Matasosky abstained.
4. Presentation of 2016 Economic Development Annual Report
Mr. Olson presented the 2016 Economic Development Annual Report to the group.
5. Director’s Report
Mr. Olson reviewed the Director’s Report including the latest building permit report.
Mr. Olson also reminded EDC members of the Annual Advisory Appreciation Dinner to be
held on Wednesday, March 22 at the Lakeville Area Arts Center.
A preliminary and final plat application has been submitted for a 4,240 square-foot dental
office and a future 7,000 square-foot retail building in the southwest corner of CR 46 and
Elmhurst Lane, north of Hy-Vee.
A building permit has been issued for Lakeville Pointe, a 49-unit apartment building
located off of Kenwood Trail (CR 50) at Jurel Way. The valuation for construction of
Lakeville Pointe is $5.9 million.
A building permit has been issued for the construction of Christian Heritage Academy, a
private elementary and middle school at Crossroads Church located at 17671 Glacier
Way. Valuation for the construction of Christian Heritage Academy is $3 million.
A permit has been issued for the remodel of the former Unimed building in the Airlake
Industrial Park for Consulting Engineers Group (CEG). CEG provides engineering
services for transmission and distribution in the utility, wind, and solar industries. CEG is
currently located in Farmington and employs 19 people with a plan to grow in the future.
6. Adjourn
Meeting adjourned at 5:55 p.m.
Respectfully submitted by
Rick Howden, Economic Development Specialist