HomeMy WebLinkAboutItem 2 EDC draft minutes 1.29.19
CITY OF LAKEVILLE
ECONOMIC DEVELOPMENT COMMISSION
MEETING MINUTES
January 29, 2019
1. Chair Scherer called the meeting to order at 4:00 p.m. in the Marion Conference
Room at City Hall.
Members Present: Comms. Collman, Dautel, Gillen, Matasosky, Scherer, Seiler,
Vlasak
Ex-officio members: Mayor Anderson, City Administrator Miller
Members Absent: Comm. Emond, Smith, Starfield
Others Present: David Olson, Community & Economic Development Director; Kati
Bachmayer, Economic Development Specialist; Travis Scoles, QA1
2. Approval of October 30, 2018 Meeting Minutes
Comms. Collman / Matasosky moved to approve the minutes of the October 30
meeting as presented. Motion carried unanimously.
3. Review of Proposed Terms and Conditions of Tax Increment Financing
Agreement from QA1 Precision Products Inc.
In October 2018, QA1 Precision Products Inc. submitted an application for Tax
Increment Financing (TIF) to assist in the development of a new 100,000-square-
foot manufacturing facility. The proposed building would be the third project
developed in Interstate South Logistics Park, located at County Road 70 and Dodd
Boulevard. The proposed project would replace two existing, adjacent buildings
owned by QA1 in Airlake Industrial Park and result in the retention of 95 existing jobs
(with an average salary of $51,000, not including benefits) and the creation of 44
new full-time jobs in Lakeville over the next five years (with an average wage level of
$40,600 per year, not including benefits). The estimated total development cost of
this new proposed manufacturing facility is $11,459,000. The TIF application has
identified a financing gap of $3,000,000 for the project, as compared to development
costs in South Dakota and Indiana (caused by the cost of labor, real estate taxes,
and sales taxes on the one-time costs). The County Assessor’s Office has provided
an estimated market value of $6,000,000.
Staff recommends that the proposed QA1 project receive 95% of the captured
increment for a period of seven years. This would result in a not-to-exceed amount
of $526,015 in TIF assistance. The proposed timeline is two years less than the
maximum duration of nine years for an Economic Development TIF District. The
seven years of increment would be paid out over a period beginning in 2021 through
Economic Development Commission Minutes January 29, 2019 Page | 2
2027. The proposed TIF plan was sent to Dakota County and ISD 194 on January 4
for review and comment.
Travis Scoles from QA1 Precision Products Inc. attended the meeting to answer
questions about the proposed project and TIF application. EDC members asked for
more information about the project’s identified financing gap, the availability of
employee benefits, and its hiring plans in a tight labor market. Scoles said QA1 was
confident in the company’s ability to fill the new proposed positions because the
business has seen success in the past and has a niche market that attracts
individuals who are passionate about the automotive industry. EDC members
expressed appreciation to QA1 for choosing to expand in Lakeville. Retention and
creation of jobs is very important to the City. An EDC member also speculated that
the current QA1 buildings could potentially serve as incubator spaces for smaller-
scale industrial companies in 2020, an additional benefit to the City’s tax base.
Comms. Scherer / Seiler moved to approve the proposed terms for
the QA1 Tax Increment Financing assistance. Matasosky abstained. Motion
carried unanimously.
The City Council will be holding a public hearing on the creation of the proposed TIF
District on February 4. A public hearing is tentatively scheduled for the February 19
City Council meeting to consider the formal TIF agreement between QA1 and the
City of Lakeville.
4. Presentation of 2018 Economic Development Annual Report
Mr. Olson presented the 2018 Economic Development Annual Report. This
information was also presented at the City Council meeting on January 7. Lakeville
saw its third highest building permit valuation in 2018 at $249,612,298. Employment
numbers in the City continued to rise and the unemployment rate in 2018 was very
low at 1.8%. Lakeville led the Twin Cities metro in residential permit numbers for the
sixth year in a row (2012-2018) and saw two senior multi-family housing projects
begin construction. The City welcomed many new businesses to the community in
2018, as well as several expansions of existing businesses.
Mr. Olson noted that the 2040 Comprehensive Plan will be finalized soon and
submitted to the Metropolitan Council for review and comments. He also indicated
that the EDC will undergo a strategic planning process in 2019 to update the current
Economic Development Strategic Plan (which was developed for 2017-2019).
A brief discussion was held about existing and proposed workforce, attainable, and
market-rate housing options in Lakeville. In addition, the group talked about seeking
out partnerships with community colleges to provide workforce training in the City.
Housing was requested as a topic of further discussion during the February 2019
meeting.
The next EDC meeting will be held on February 26.
Economic Development Commission Minutes January 29, 2019 Page | 3
Adjourn
Meeting adjourned at 5:02 p.m.
Respectively submitted by:
Kati Bachmayer, Economic Development Specialist