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HomeMy WebLinkAboutItem 2 CITY OF LAKEVILLE ECONOMIC DEVELOPMENT COMMISSION MEETING MINUTES June 23, 2020 1. Vice Chair Starfield called the meeting to order at 4:04 p.m. in the Council Chambers. Members Present: Comms. Christiansen, Collman, Dautel, Emond, Gillen, Seiler, Starfield Ex-officio Members Present: Mayor Anderson, City Administrator Miller, Chamber President Jech Members Absent: Comm. Matasosky, Scherer, Stone Staff Present: David Olson, Community & Economic Development Director; Kati Bachmayer, Economic Development Coordinator 2. Approval of May 26, 2020 Meeting Minutes Comms. Emond / Collman moved to approve the minutes of the May 26 meeting minutes as presented. Motion carried unanimously. 3. Review of Draft Small Business Emergency Grant Program Guidelines Mr. Olson informed EDC members that it is anticipated that the City of Lakeville will soon be receiving an allocation of federal CARES Act funding when a statewide allocation plan is approved by the MN State Legislature and is signed by Governor Walz. One of the allowed uses of these funds is to provide assistance to businesses that have been negatively impacted by the COVID-19 pandemic. Community and Economic Development Department staff have been requested to draft guidelines for a Small Business Emergency Grant Program in anticipation of the City receiving an allocation. Numerous cities and counties in the Twin Cities and Greater MN have developed local small business emergency grant or forgivable loan programs for businesses impacted by COVID-19. Mr. Olson went over the proposed terms, eligible and ineligible businesses and asked EDC members for feedback and input on the proposed guidelines. Extensive discussion was held on several elements of the proposed grant program guidelines. • Comm. Starfield recommended changing the 12-month operating requirement to allow for any business that was “open prior to March 1, 2020” to qualify. Comm. Collman supported the 12-month requirement because an established business can more easily demonstrate a financial need through annual revenue reporting. The majority of EDC members supported using a shorter than 12-month operating requirement. Mr. Olson shared the example that the Dakota County CDA proposed program allows businesses who were registered with the MN Secretary of State by December 1, 2019 to be eligible. Economic Development Commission Minutes June 23, 2020 Page | 2 • Members requested that the 25 employee cap requirement be updated to note it is 25 FTEs (full-time equivalent). Comm. Seiler recommended using the U.S. Small Business Administration’s FTE calculation method that is currently being implemented for the Paycheck Protection Program. Mr. Olson noted that DEED’s program allows up to 50 FTEs but has designated $18 million for businesses that have 6 or fewer employees. • Comm. Gillen questioned the requirement for businesses to employ at least one employee and supported including sole proprietor businesses in the program. Mr. Olson noted that sole proprietors were able to collect unemployment insurance during the pandemic and therefore may be unable to demonstrate a financial need for grant funds. • Members debated the $1 million annual revenue cap. Comm. Dautel said $1 million is a fairly low number and may eliminate a lot of businesses from our applicant pool. Comm. Seiler noted that a $10,000 grant could make an impactful difference for a business with annual revenue of $1 million or less, whereas it would not make as big of an impact on businesses with higher annual revenues. Chamber President Jech noted that many of Lakeville’s hospitality businesses, like hotels, have higher annual revenues but were severely negatively impacted by MN Executive Orders regarding COVID-19. General consensus from the EDC members was that the $1 million annual revenue cap could be removed from the eligibility requirements or change the wording from “25 employees and under $1 million” to “25 FTE employees and/or under $1 million.” • Members supported allowing local franchise owners to be eligible for the program and have corporate-owned chain businesses remain ineligible. • Members discussed including priority or preference for tourism and hospitality businesses. Ms. Jech pointed out the importance of maintaining our hospitality businesses for future tourism opportunities and the large losses they’ve incurred since mid-March. A preference for completely closed or partially closed businesses was also offered as an idea, similar to the DEED program. Comm. Collman was not in favor of singling out any one industry and preferred to allow all businesses in Lakeville who meet the criteria to have an equal opportunity to be awarded a grant. • Mayor Anderson told the EDC that during the June 22 City Council work session a city council member advocated for awarding grants to those businesses who demonstrate the highest need vs. issuing awards based on a first come, first served process. In order to award grant funds based on highest need, a review committee may need to be formed and there was concern about slowing down the decision and award process. • Overall, members supported the removal of ineligibility criteria that discriminated against certain types of businesses. Mayor Anderson said the City Council was in favor of including all legally operating businesses in Lakeville. Economic Development Commission Minutes June 23, 2020 Page | 3 • Comm. Dautel expressed concern about applicants being awarded grant money and then shutting down operations soon after. Members supported incorporating ways to ensure continuation of operation after the grant money had been received. • Comm. Collman expressed concern about how the City would determine a business was in default (which would make a business ineligible to receive funds). He also encouraged the City to require a signed affidavit from the business to verify their receipt or non-receipt of funds from federal or state programs. At the end of the discussion, Mayor Anderson told EDC members that the City Council would be revisiting this topic at an upcoming July meeting. The City is hopeful the CARES Act allocation will be decided in the near future. 4. Continued Roundtable Discussion of COVID-19 Impacts on Lakeville Businesses EDC members shared information about how COVID-19 continues to impact their business and other area businesses. Frustration was expressed about current state- imposed restrictions on restaurants and a desire to learn when additional indoor/outdoor capacity will be allowed in business establishments. Recent updates to the federal Paycheck Protection Program were applauded, as members felt the changes provided necessary flexibility to best help small businesses who received the funds. Mr. Olson reminded the group that any complaints received regarding businesses not following Phase 3 guidelines will be handled similarly to code violations and a letter of concern will be sent. Mayor Anderson told EDC members that he was recently on a call with DEED Commissioner Steve Grove and several other metro city mayors. He shared that DEED was working on a plan for Phase 4 reopening strategies but didn’t have a start date yet. 5. Director’s Report Mr. Olson informed EDC members that the Dakota County CDA board approved the City’s RIG (Redevelopment Incentive Grant) $81,600 application on June 16. This grant will be help mitigate environmental cleanup cost for the Kingsley Place development. He also noted that the City is still waiting to hear back on the DEED cleanup application but expects to receive notification by the end of June. Adjourn Meeting adjourned at 5:35 p.m. Respectively submitted by: Kati Bachmayer, Economic Development Coordinator