HomeMy WebLinkAbout01-27-98 • CITY OF LAKEVILLE
ECONOMIC DEVELOPMENT COMMISSION
MEETING MINUTES
January 27, 1998
Members Present: Brandy, Detjen, Emond, Erickson (Alternate), Krejci, Matasosky,
Pogatchnik, Tushie and Vogel
Members Absent: Miller
Staff Present: Robert Erickson, City Administrator; Michael Sobota, Community &
Economic Development Director; and Nicole Bennett, Economic
Development Coordinator.
Also Present: Stephen Nelson and Gary Lussier, Technical Methods, Inc., (TMI);
Becky Grogan and George Ferris, Hearth Technologies (Heat-N-
Glo); and Todd Seidell, APPRO Development.
1. Call to Order. Chair Vogel called the meeting to order at 6:00 p.m. in the
• Administration Conference Room at Lakeville City Hall. He stated that due to a time
conflict he would need to leave at approximately 6:15 p.m. and would be turning the
meeting over to Vice Chair Matasosky at that time.
2. Approval of the November 25, 1997, Meeting Minutes.
98.01 MOTION: Comms. MatasoskyBrantly moved to approve the November 25,
1997, meeting minutes as written. Motion carried unanimously.
3. Review Request for TIF Assistance from Technical Methods, Inc., (TMI) to
Construct a New Office/Prototype Design and Development Facility in Fairfield
Business Campus. Chair Vogel noted that representatives of TMI were present at
the meeting, and he asked Mr. Sobota to provide an overview of the project. Mr.
Sobota introduced Mr. Stephen Nelson and Mr. Gary Lussier from Technical
Methods, Inc., (TMI}. Mr_ Sobota stated that the company is requesting TIF
assistance to construct a 24,000-square-foot office and prototype development facility
on a 3.26-acre site in Fairfield Business Campus, north of Itron on Kensington Blvd.
Mr. Nelson stated that TMI is a business based on aerospace pattern development and
tooling that is very dependent on CAD/CAM (computer-aided design manufacturing).
He stated that the business serves customers such as plastic injection molding
• companies by creating preliminary designs and prototypes of products for the
marketplace.
Economic Development Commission January 27, 1998
Meeting Minutes Page 2
• Comm. Matasosky noted that TMI purchased Accord Prototype two and a half years
ago, and Accord Prototype has been located in Airlake Industrial Park since 1979.
Mr. Sobota stated that staff has reviewed the request for TIF assistance submitted by
TMI and found it to be consistent with the city's adopted TIF policies and goals in
four areas including: (1) retaining 20 current full-time ,positions provided by TMI plus
the creation of at least 30 future high-skill jobs within the next 5 years, (2) a
substantial increase in the city's property tax base due to the construction of a new
24,000-square-foot building valued at a proposed $1 million, (3) providing assistance
to a rapidly growing business that will allow the company to better serve its customers
in a more accessible/visible location, and (4) enhancing Fairfield Business Campus as a
viable business district with the addition of TMI's highly skilled workers. Mr. Sobota
noted that staff is recommending that the city provide the 3.26-acre site in Fairfield
and that TIF funds be used for the potential future extension of Kensington Boulevard
to the north, and that the company pay the park dedication fee and storm sewer area
charge. He added that TMI is proposing a spring 1998 construction.
Comm. Emond inquired if the current Kensington Boulevard is a temporary cul-de-sac
and if utilities are accessible to the site. Mr. Sobota responded that the north end of
Kensington Boulevard is currently a temporary cul-de-sac, and utilities are in place in
Kensington Blvd. He noted that an existing pond located northwest of the proposed
• site is designed to provide for all necessary storm water ponding.
Comm. Tushie inquired if the proposed facility would include manufacturing that
generates any exterior noise considering that the proposed site is adjacent to
residential zoning to the northeast. Mr. Erickson noted that New Morning Windows
wanted to operate with open doors to cool manufacturing areas in warm weather, and
thus needed to comply with MPCA exterior noise requirements. Mr. Sobota asked the
representatives from TMI to comment on whether the proposed facility would
produce any exterior noise. Mr. Nelson responded that TMI's operation would occur
completely within the building. He noted that TMI's process is dependent upon
maintaining an ambient climate at approximately 72 degrees with no humidity, thus the
proposed facility would be completely air-conditioned and all doors would remain
closed with no exterior noise being generated.
Comm. Emond inquired as to the zoning of adjacent property to the north of the site.
Mr. Sobota stated that property to the northwest of the proposed TMI site is currently
zoned B-4 (General Commercial) and property to the northeast is currently zoned R-2
(Single-family Residential). He noted that there is a significant grade change to the
north, and a landscape buffer will be required to screen the proposed Hearth
Technologies site from aconceptually-approved, single-family residential development
to the north, east of Kensington Blvd. Mr. Erickson stated that staff's goal is to
• expand the business campus to the north on the west side of Kensington Blvd. due to
the rapid development of Fairfield and the market demand for corporate office/light
manufacturing facilities.
Economic Development Commission January 27, 1998
Meeting Minutes Page 3
• Comm. Tushie inquired if the EDC could make a recommendation in support of the
extension of Fairfield Business Campus to the north. Mr. Erickson responded that the
EDC may want to consider a separate motion regarding the expansion of Fairfield
after reviewing both of the proposed Fairfield projects on the agenda.
98.02 MOTION: Comms. Emond/Tushie moved to recommend to the City Council
the approval of the request for TIF assistance from Technical
Methods, Inc., (TMl) to construct a new office/prototype design
and development facility in Fairfield Business Campus. Motion
carried unanimously; Comms. Matasosky, Krejci and Yogel
abstained.
4. Review Request for TIF assistance from Hearth Technologies (Heat-N-Glo) to
Construct a New Corporate Headquarters/Research and Development Facility in
Fairfield Business Campus. Vice Chair Matasosky stated that representatives from
Hearth Technologies (Heat-N-Glo) were present and he introduced Ms. Becky
Grogan and Mr. George Ferris. Mr. Sobota stated that the Heat-N-Glo Division of
Hearth Technologies is currently located in Savage, Minnesota, and has been searching
for a new corporate headquarters site. He noted that city staff submitted information
on Fairfield Business Campus, and later met with company officials to provide
additional information on the 7.432-acre site located at the northeast corner of
• Kensington Boulevard and Kenbridge Court currently under consideration. Mr.
Sobota stated that the company is proposing a 60,000-70,000 square foot corporate
headquarters/research and development facility with future expansion potential up to
120,000 square feet total.
Mr. Sobota noted that staff is proposing that the city provide the land to Hearth
Technologies for $1.00, cover the cost of the storm sewer area charge using TIF funds
due to the large investment of the company estimated at $3.1 million, and provide TIF
funds for the future extension of Kensington Boulevard to the north. He added that
the company will be responsible for the park dedication fee, and TIF funds will provide
$50,000 for additional landscaping on this premier site. He stated that this proposal is
being submitted to the EDC for review and recommendation.
Comm. Matasosky stated that Burnsville and Lakeville were the final sites considered
for the new Heat-N-Glo corporate headquarters, and company employees
overwhelmingly voted to come to Lakeville. Mr. Ferris noted that Hearth
Technologies is the largest manufacturer of fireplaces in the world, and is the second
largest division of HON Industries after office furniture. Ms. Grogan stated that
numerous Heat-N-Glo employees live in Lakeville and the surrounding areas, and the
company is excited at the prospect of moving to Lakeville. Mr. Seidell, architect for
the project, stated that a space analysis has indicated the company will need
• approximately 70,000 square feet with future expansion to 120,000 square feet total.
Mr. Erickson stated that it has been wonderful to work with Heat-N-Glo company
officials such as Dan Shimek, and he would categorize Heat-N-Glo as an exceptional
Economic Development Commission January 27, 1998
Meeting Minutes Page 4
• business based on the way the company has handled the entire site selection process
working with the cities of Savage, Burnsville and Lakeville. He noted that city staff
were able to meet numerous Heat-N-Glo employees when visiting the Savage facility
to hand out Lakeville logo pins and welcome announcements to each employee.
Comm. Pogatchnik inquired if similar development proposals were provided to the
existing companies located in Fairfield Business Campus, and if this proposal was
consistent with the other development agreements.
Mr. Sobota res onded that this proposal is consistent with the agreements made with
New Morning Windows, United Properties and Itron, and Verified Credentials, Inc.
He noted that staff applied a calculation based on the proposed value of each building
compared to the size of the lot in order to analyze the ratio for each project, and this
proposal is consistent with that methodology.
Comm. Tushie inquired if Hearth Technologies would own or lease the proposed
building. Mr. Ferris responded that Hearth Technologies plans to own the new facility
based on his recommendation to corporate officials.
Comm. Emond inquired how long the increment can be captured for the TIF district in
Fairfield Business Campus. Mr. Sobota replied that the 25-year district will expire in
. the year 2013. Mr. Erickson noted that Finance Director Dennis Feller has analyzed
the proposed increment based on the existing businesses plus the proposed taxes for
Heat-N-Glo and Technical Methods, and he has determined that all financial debt
requirements will be met with adequate dollars remaining in the TIF fund to cover the
future extension of Kensington Blvd. to the north.
Comm. Emond inquired as to how many lots are still available in Fairfield, and if the
TIF district and campus could be expanded. Mr. Sobota responded that there are two
lots still available: United Properties has an option on the 2.6-acre parcel located
immediately north of Itron, and there is a 4.6-acre lot located east of Verified
Credentials on the south side of Kenbridge Court. Mr. Erickson stated that the impact
of recent legislation on TIF districts is yet unknown due to changes in lowering
commercial-industrial property tax classification rates, and the potential shortfall
created by the decreased increment generated from existing TIF districts may be
significant.
Comm. Pogatchnik inquired as to the future use of the school district's parcel located
immediately east of Fairfield. Mr. Erickson responded that if the school district
developed that parcel and then vacated it into the future, the building could be
transformed into a business campus use. He noted that the city would encourage the
school district and its architects to develop the school building using an open design
with removable partitions to allow future re-use.
• Comm. Tushie inquired as to the exterior construction materials for the proposed
Hearth Technologies building. Mr. Seidell responded that they are planning to use
Economic Development Commission January 27,1998
Meeting Minutes Page 5
. decorative pre-cast curtain wall panels with a significant amount of glass on the south
and west sides of the building. Comm. Tushie inquired what kind of pre-cast panels
would be used. Mr. Seidell stated that a high quality look such as Wells or Spancrete
would be used.
Comm. Tushie inquired as to the architectural compatibility of the building with the
other facilities located in Fairfield_ Mr. Erickson noted that the proposed plans
indicate a large amount of glass along the south and west sides creating an attractive
facade to the building visible from Kensington Blvd. Mr. Seidell noted that the glass
will wrap around the conference room area located on the south side of the building,
and the overall look will be glass with monolithic accents. He then passed around
photos of similar projects for the EDC to review. Mr. Erickson noted that the
Fairfield Business Campus Property Owners' Association would meet to review the
design features of the proposed building for consistency, and that the business owners'
association has been proactive yet positive during previous architectural reviews.
98.03 MOTION: Comms. Pogatchnik/Tushie moved to recommend to the City
Council the approval of the request for TIF assistance from
Hearth Technologies to construct a new corporate headquarters/
research and development facility in Fairfield Business Campus.
Motion carried unanimously; Comm. Matasosky abstained.
• 5. Review Detailed Summary of Strategic Work Plan Projects, and Prioritize
Projects for 1998. Vice Chair Matasosky asked staff to provide an overview of the
revised strategic work plan. Mr. Sobota stated that as a result of the EDC's
November meeting and City Council budget discussions, staff has prepared a revised
schedule of strategic plan projects for 1998 based on the amount of staff time available
to complete special projects. Ms. Bennett stated that staff met with Chair Vogel
several times since the November meeting to review strategic work plan projects for
1998. She noted that staff conducted an analysis of weekly work tasks and developed
estimates of the amount of time available on a weekly basis to complete strategic plan
projects in 1998. The estimates indicated that 10-15 hours per week are available. She
asked the EDC to review the proposed list of projects ranked from 1-6 with dates of
implementation assigned to each project.
Comm. Tushie noted that he feels the Landscape Corridor Study should be moved
earlier in the schedule rather than waiting until the second half of the year to begin the
study. Comm. Brantly stated that specifying the city's entry points and developing
design guidelines should be made a higher priority. Comm. Tushie commented that
the study should establish design parameters for private development that will be
enforceable by the city's zoning ordinance. Mr. Sobota stated that there are two types
of guidelines: (1) regulations applicable to land within an overlay district in specific
• corridors, and (2) public improvements as part of road construction or other projects.
He noted that the first option would require an amendment to the zoning ordinance,
but option two would require a significant financial commitment from the city. Comm.
Matasosky stated that perhaps the RFP for a consultant to undertake the study needs
Economic Development Commission January 27, 1998
Meeting Minutes Page 6
• to be moved up in the schedule to get a better idea of the costs involved to conduct
and implement the project.
Mr. Erickson noted that a few years ago the City Council considered a proposal to add
stricter landscaping guidelines as part of the city's zoning ordinance, and the local
business community was overwhelmingly in opposition to the proposal. He stated that
when screening requirements were proposed in Airlake Industrial Park, the process
was successful because meetings were conducted with Airlake businesses and property
owners. He noted that a presentation to the Chamber of Commerce early in the
process to provide information regarding the Landscape Corridor Study will be critical
to its success. Mr. Erickson also stated that the study should include a financial
component to identify how the proposed improvements will be financed and areas
where the city will need to serve as a participant to encourage private sector
improvements. He noted that cities such as Burnsville have budgeted over $1 million
for "imaging" projects to improve corridors and parkways, and the Landscape
Corridor Study needs to include financing options for recommended improvements in
Lakeville.
Comm. Tushie stated that imposing guidelines and improvements in areas that are
already developed is problematic, and the key is to complete the study as soon as
possible to have guidelines in place for corridors prior to development. He added that
. the guidelines can be created such that they don't require businesses to spend
additional money, but rather that the landscaping already required by the city is placed
in different areas to meet beautification objectives.
Comm. Brantly stated that the concept must be promoted to the business community
or it will fail, and he noted that the city should be willing to spend some money to
enhance the city's major entrances and corridors.
Comm. Matasosky noted some concern with delaying the creation of a financial
incentives policy to later in the year. He noted that with the degree of development
activity it is important that the policy be established. Mr. Erickson stated that with the
legislative changes to property tax classifications and tax increment financing, it may
be beneficial to delay the financial incentives policy discussions until later in the
legislative session. He noted that stall' has received a copy of a preliminary report
from the Minnesota House of Representatives Research Department that outlines the
potential impacts of the class rate reductions on TIF districts, and staff will provide
copies of the report to the EDC.
The EDC recommended that staff revise the 1998 schedule of strategic plan projects
to include the Landscape Corridor Study ahead of the Financial Incentives Policy, but
with an attempt to overlap the activities from these two projects as much as possible
• to allow them to be implemented from April through early fall. The EDC also
recommended adding details to the Landscape Corridor Study project including a
meeting with the Chamber and exploring financing options for the implementation of
Economic Development Commission January 27, 1998
Meeting Minutes Page 7
• study guidelines. Staff agreed to bring an amended work plan back to the EDC in
February for discussion and approval.
6. Project Activities Update. Vice Chair Matasosky asked Ms. Bennett to update the
EDC regarding the Strategic Work Plan and other development projects. Ms. Bennett
stated that staff has completed the follow-up phoning for the distribution marketing
videos and is planning to work with the new Cable Coordinator to complete the
business services and medical/health services videos in order to begin mailing those
videos out to prospective businesses. She noted that staff has completed a survey of
other communities and economic development agencies regarding financial incentives,
and this information will be helpful in developing the financial incentives policy.
Ms. Bennett provided a brief update on current development projects including: the
Muller Family Theatre grand opening on January 16th, the opening of Lakeville Liquor
Store #4 on December 15th, very preliminary sketch plans submitted for a proposed
Cub Foods store at C.R. 46 and I-35, and the recent approval of plans for the new
Tutor Time Daycare Center to be located at 175th Street and Ipava Avenue.
Ms. Bennett stated that staff has met with Dakota County officials and the library
architect to discuss preliminary design concepts. She noted that Ken Owen from
DHY, Inc., has accepted a position on the Airlake Park News Editorial Board and
• staff is looking forward to his input and ideas for the newsletter.
Cornm. Brantly inquired how much time staff is devoting to the Airlake Park News,
and if it is difficult to generate new ideas for articles to be included in the newsletter.
Ms. Bennett stated that she and Public Information Coordinator Lea Guenther work
together to develop articles for the newsletter, but that it is becoming increasingly
time-consuming to publish the Airlake News on a quarterly basis. EDC members
recommended that a readership survey be done to get feedback on publishing the
newsletter twice a year rather than quarterly, and to inquire about topics of interest to
Airlake businesses that could be covered in future issues. Ms. Bennett noted that the
survey could be included in the upcoming winterissue.
Ms. Bennett stated that the Downtown Lakeville Business Association (DLBA) held a
workshop on January 13th with Chamber members, school district representatives, and
property owners from the downtown. She noted that everyone in attendance voiced
support for the creation of a Special Improvement District (SID), and the DLBA
Intern will continue to meet with property owners to gain support for the district.
Ms. Bennett noted that several items were attached to the project activities update
including: a copy of the press release for Heat-N-Glo, a memo regarding information
from the Minnesota Development Conference, and a letter from David Piggott
• thanking the city for its continued support of the Metro East Development
Partnership.
Economic Development Commission January 27, 1998
Meeting Minutes Page 8
• Comm. Matasosky indicated some concern that Metro East Development Partnership
is not providing adequate follow-up regarding business prospects. Ms. Bennett noted
that staff has been responding to 2-3 requests for proposal from Metro East each
week, but staff has not received follow-up contact from any prospective businesses nor
has Metro East staff provided information on where these businesses have chosen to
locate. Comm. Emond inquired if the city has received any new businesses as a result
of leads from Metro East. Ms. Bennett responded that no Metro East prospects have
located in Lakeville to-date. EDC members indicated that the city should be kept
informed as to where these prospective businesses decide to locate.
7. Election of 1998 Officers: Chair, Vice Chair and Secretary. Vice Chair Matasosky
stated that the EDC needed to nominate and elect officers for 1998 including Chair,
Vice Chair and Secretary.
98.04 MOTION: Comms. Emond/Brandy moved to elect the 1997 officers for an
additional term in 1998 including Comm. Vogel as Chair, Comm.
Matasosky as Vice Chair, and Comm. Krejci as Secretary.
Motion carried unanimously.
8. Other Business. Vice Chair Matasosky noted that the general discussion regarding
future expansion of Fairfield Business Campus could now be continued as other
• business. Comm. Tushie inquired if the TIF district can be expanded to the north as
part of a future expansion of Fairfield Business Campus, and he asked that staff
research this issue. Comm. Matasosky stated that United Properties is currently
marketing the site located north of Itron, and he inquired if the option runs with the
tenant or the owner. Comm. Emond noted that an expansion of Fairfield Business
Campus should be compatible with adjacent residential land uses to the northeast.
Comm. Tushie suggested that if the business campus were extended, business campus
uses could be located on the west side of the parkway and multi-family could be
located on the east side of the parkway adjacent to existing single-family residential to
provide a transitional buffer.
98.05 MOTION: Comms. Tushie/Detjen moved to recommend that staff research
opportunities to expand Fairfield Business Campus to the north
including the extension of Kensington Boulevard. Motion carried
unanimously_
9. Adjourn. The meeting was adjourned at 9:00 p.m.
Respectfu y submitt ATTEST T
~ ~v~ ~ ~
ico E. Bennett, Recording Secretary o n Krejci, Secre ary
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