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HomeMy WebLinkAbout04-25-06 City of Lakeville Economic Development Commission Regular Meeting Aoenda Tuesday, April 25, 2006, 6:00 p.m. City Hali, 20195 Holyoke Avenue Lakeville, MN 1. Call meeting to order. 2. Approve February 28, 2006 Regular Meeting and April 11, 2006 Special Meeting minutes 3. Update on Telecommunications Issues to be pursued in 2006 4. Review of Ma~eld Research Housing Needs Assessment for Dakota County and Metropolitan Council Affordable Housing Need for Lakeville 5. Director's Report 6. Adjourn Attachments: ? StarTribune article entitled Paving the Cyber Sidewalks: Cities Debate Fiber Optics ? MN Dept. of Employment & Economic Development news release: JOBZ Initiative sustains momentum ? Article entitled Freeing Cities From Telco and Cable Monooglies ? Article entitled Whv Municipal Wi-Fi May Be a Bad Investment for Cities ? EDAM Newsletter April-May 2006 Item No. ~ ~~AFT' City of Lakeville Economic Development Commission Meeting Minutes February 28, 2006 Marion Conference Room, City Hall Members Present: Comms. Brantly, Emond, Gehrke, Tushie, Pogatchnik, Schubert. Members Absent: Miller, Smith, Erickson, Matasosky, Ex-officio member Chamber of Commerce Executive Director Todd Bornhauser, Ex-officio member City Administrator Steve Mielke. Others Present: Staff present: David Olson, Community & Economic Development Director; Adam Kienberger, Economic Development Specialist; Bill Coleman, Dakota Future. 1. Call Meeting to Order. Vice Chair Pogatchnik called the meeting to order at 6:00 p.m. in the Marion Conference Room of City Hall, 20195 Holyoke Avenue, Lakeville, Minnesota. 2. Approve January 24, 2006 Meeting Minutes Motion 06.04 Comms. Emond/Schubert moved to approve the minutes of the January 24, 2006 meeting as presented. Motion carried unanimously. 3. Presentation by Bill Coleman, Executive Director of Dakota Future Mr. Coleman discussed the role of Dakota Future as a county-wide economic development organization and gave a summary of its 2005 accomplishments and 2006 priorities. He highlighted the upcoming Economic Summit on March 23, 2006 and encouraged the EDC to make the business community aware of this event. Mr. Coleman also discussed the Dakota Future website and the benefits it can offer site selectors looking at Dakota County. He concluded by summarizing the focus of the organization is building positive collaborations with other economic development groups, and targeting growing industries and strategic business recruitment for Dakota County. 4. Presentation of 2005 Economic Development Annual Report Mr. Olson reviewed the 2005 Economic Development Annual Report and reviewed commercial, industrial and residential development along with a transportation update and a summary of the EDC's initiatives. Economic Development Commission ®t \ A ` ~ Meeting Minutes /'1 February 28, 2008 Mr. Olson noted that 2005 had the second highest commerciaUindustrial permit value in Lakeville's recent history, with 2004 having the highest permit value. Vice Chair Pogatchnik asked about including land values in the analysis and if that would change the results when compared to residential development. Comm. Emond and Mr. Olson stated that land values have skyrocketed over the past four to five years. This has led to more property tax generation from both commercial/industrial development and residential development in fairly equal proportions. While it would be possible to include the land values, the data would always be an additional year behind due to the timing of property assessments. Comm. Tushie asked where the City was at with its goat of having commercial/industrial development be 26% of the City's growth. Mr. Olson responded that 2005 appears to be in line with the current development goals. Vice Chair Pogatchnik asked why the retail development adjacent to the CR50 interchange is developing faster than the retail development by the CR60 interchange. Comm. Tushie replied that the developer of the Argonne Village area developed most of the land at today's market value while the Timbercrest developer appears to be asking a higher, slightly speculative price for the land. 5. Update on Strategic Plan 2006 Work Program Mr. Olson gave a brief review of the 2006 work program while noting that most of the topics were just covered in the 2005 Annual Report. The work program goals include: 1. Completion of a study to determine the minimum market value of a residential housing unit that generates sufficient City taxes to pay for the City services required by that unit. 2. Facilitate a process to establish affordable housing goals for the City. 3. Improve communication and coordination with other units of government on important community and economic development issues facing Lakeville. 4. Create partnerships with Lakeville Chamber of Commerce, DLBA and other businesses and other development associations on mutual development objectives. 5. Advocate for on behalf of business interests with airport and rail planners. 2 r ©@++ ~ Economic Development Commissrbn ®R ~°i f T Meeting Minutes February 28, 2006 Mr. Olson also added that the City has recently received the affordable housing need allocation for Lakeville between 2011 and 2020 as determined by the Met Council. City staff plan to review this information along with a presentation by the Dakota County CDA on the results of the Maxfield Research Housing Need Assessment for Dakota County with the City Council at a work session in March. Based on the direction provided by the City Council, staff will bring this issue back to the EDC for further review and a determination will be made as how to approach establishing affordable housing goals for the City of Lakeville. 6. Director's Report Mr. Olson discussed the Life Time Fitness project and noted that a letter of intent was approved by the City Council at their February 21, 2006 meeting. Mr. Olson gave a brief review of the January building permit report and noted that development appears to be slowing down a little bit compared to last year at this time. Mr. Olson reminded the EDC about the Dakota Electric Partners in Progress event on March 8, 2006 and encouraged anyone interested in attending to contact Judi Hawkins to RSVP. Mr. Olson added that the Dakota Future Economic Summit will be on March 23, 2006 and handed out informational brochures for the conference. Those interested in attending should contact Adam Kienberger, Economic Development Specialist. Mr. Olson gave an update on the Lakeville Post Office and the proposal to include all of Lakeville in the Lakeville zip code by the end of 2007. In order for the Post Office to change the zip code for the portions of Lakeville that have a Farmington or Rosemount zip code, at least 50% or more of residents affected by the change will have to vote in favor of the change in a survey that will be conducted by the Post Office. The City will assist in an informational effort to make residents aware of benefits of this change prior to the survey being completed by the Post Office. Comm. Gehrke noted that a change could potentially affect things-such as auto insurance rates and related items. It would be a good idea to get a handle on all the possible impacts before a change is made. Mr. Olson added that is often confusing for both existing and new residents as well as developers in Lakeville when identifying where they live and where they are trying to sell new homes. Often they are within the City of Lakeville, but might have a Farmington mailing address. 3 Economic l7eve/opmenf Commission DRAFT ' Meeting Minutes February 28, 2006 7. Adjourn The meeting was adjourned at 7:25 p.m. Respectfully submitted by: Attested to: Adam Kienberger, Economic Development Specialist R. T. Brantly, Secretary 4 Item No. City of Lakeville Economic Development Commission Special Meeting Minutes April 11, 2006 Marton Conference Room, City IiaN Members Present: Comms. Matasosky, Erickson, Brantly, Emond, Gehrke, Schubert, Ex-officio member Chamber of Commerce Executive Director Todd Bomhauser, Ex- officio member City Administrator Steve Mielke. Members Absent: Miller, Pogatchnik, Tushie, Smith. Others Present: Staff present: David Olson, Community & Economic Development Director; Adam Kienberger, Economic Development Specialist; Dennis Feller, Finance Director. 1. Call Meeting to Order. Chair Matasosky called the meeting to order at 5:30 p.m. in the Marion Conference Room of City Hall, 20195 Holyoke Avenue, Lakeville, Minnesota. 2. Discuss Life Time Fitness Business Subsidy Agreement Mr. Olson reviewed the history of the parcel where the proposed Life Time Fitness project will be located and then reviewed the terms of the business subsidy agreement. The City will convey the property to Life Time Fitness and defer payment interest free until July 18t 2010 when the first half of the payment will be due. Mr. Olson continued by stating that this proposed financing arrangement constitutes a business subsidy under Minnesota Statutes 116J.993 to 116J.995 (the "Business Subsidies Act"). Because the Lakeville market conditions are approximately 3 years or more away from when Life Time would typically do a project, the business subsidy is warranted as an incentive to bring this amenity, additional tax base and new jobs to Lakeville. He further stated that even though the agreement only specifies 49 jobs to be created in the first 24 months of operation, the business is projecting close to 200 new jobs for the City. Mr. Olson added that the last project Lakeville did a business subsidy for was Advanced Wireless Communications in the Fairfield Business Campus. Mr. Olson next outlined the timeline for the project: April 25"', 2006 -Neighborhood meeting May 18"', 2006 -Planning Commission Meeting June 5~', 2006 -City Council Meeting Summer, 2007 -Facility open for business Ecoiromic Development Commission Meeting Minutes Apn(ii, 2006 Comm. Schubert asked about the reference to Article 7 under Section 6.3 {Repayment) of the Business Subsidy Agreement. Mr. Feller and Mr. Mielke clarified that the because the business subsidy agreement is part of the larger development contract, the goals outlined in the business subsidy agreement section are specifically tied to the repayment methods required by law in the business subsidy agreement and are separate from other development goals and remedies provided for in the other sections of the development contract. Commissioners asked numerous additional questions relating to the number of memberships, zoning approvals that would be required, additional infrastructure requirements for the project, proposed sale price of the land to be sold to Ufe Time Fitness, the likelihood of similar facilities being developed in the community, and the precedent or policy of the City regarding purchasing land for private development. City staff responded to all of the Commissioners' questions. Motion 06.05 Comms. Brantly/Schubert moved to recommend approval to the City Council of the Life Time Fitness Business Subsidy Agreement. Motion carried unanimously. 3. Adjourn The meeting was adjourned at 6:30 p.m. Respectfully submitted by: Attested to: Adam Kienberger, Economic Development Specialist R. T. Brantly, Secretary 2 Item No.~ City of Lakeville Community and Economic Development Memorandum To: Economic Development Commission From: Adam ~enberger, Economic Development Specialist Copy: -Steve Mielke, City Administrator David L. Olson, Community and Economic Development Director E)ate: April 25, 2fl06 Subject: High-7ech Subcommittee As established in the 2006 Economic Development Work. Plan, two of the goals are: • Improve communication and coordination with other units of government on important community and economic development issues facing Lakeville. • Create partnerships with the Lakeville Chamber of Commerce, DLBA and other. businesses and other development assodations on mutual devebpment objectives The primary activity that is being pursued under these gnats is reviewing options and/or althmatives related to improved broadband technologies and/or citywide wireless Internet service. Pursuit of these goals would suggest re-convening the High Tech Subcommittee to begin discussion on a process to survey existing businesses to determine current and future Internet and information service needs and how these needs are being met by the current service providers. The High-Tech Subcommittee, comprised of two EDC members and two Telecommunication Commission members, was formed in early 2001 and identified three goals: • Develop aHigh-Tech Business Park (HTBP} • Educate the business community on telecommunications options • Encourage additional telecommunications services to support Lakeville's existng businesses Two outcomes of the efforts of the High-Tech Subcommittee between early 2001 and mid-2002 were completion of a survey to attempt to determine local business telecommunications and information needs and Lakeville's E-commerce certification through the Minnesota Department of Employment and Economic Development. Along with re-convening the High-Tech Subcommittee comes several different options as to which way the EDC would like to direct this process. The following is a list of issues and/or initiatives that the High-Tech Subcommittee could consider: • Would a new survey of businesses be beneficial and what is the most effective way to distribute a survey to Lakeville businesses o Previous survey used several different distribution techniques • Mail ¦ .Email • Rhone • Interview providers o Gather information and relay to business community • Determine what other area cities doing at this time o Burnsville is in the middle of a process to gather information regarding the services available o Woodbury is wrapping up Phase II of their telecommunications study addressing a wireless network, services available and courses of action • Pros and cons of a municipal wireless network a Business and/or residential service • Is a consultant needed to facilitate information gathering at this time? o See attached articles from C,ovemmentTechno%gymaga~ne • An outcome of the previous Lakeville Telecommunications Needs Assessment was that it is important to bridge the gap between the business community and the service providers o What is an effective means to do so ¦ Airlake Park News -done in Winter 2002 edition and Winter 2003 edition (Focal Communications and Frontier Communications) ¦ Website information • Create a forum for businesses to meet with providers After the last meeting of the High-Tech Subcommittee on April 3, 2002, a summary of the progress relating to the established goals was given. See the attached minutes for details regarding these previous efforts. Cable Coordinator, Leff Lueders, will be present at the meeting to provide an update from the Telecommunications Commission. ieecommendation It is the recommendation of staff that the EDC consider appointing at least two EDC members to serve on the re-convened High-Tech Subcommittee. The EDC should also indicate whether it is in agreement with the above list of issues and/or initiatives to be pursued by the Subcommittee. HIGH TECH SUBCOMMITTEE MEETING MINUTES April 3, 2002 5:30 P.M. MARION CONFERENCE ROOM -CITY HALL The High Tech Subcommittee met on April 3, 2002 at 5:30 in the Marion Conference Room at City Hall. Members Present: Robin Selvig, Dick Miller, Bob Brantly, and Doug Thompson. Absent: none. Others Present: Community & Economic Development Director David Olson, Economic Development Coordinator Ann Flad, Cable Coordinator Jeff Lueders. Also present were David Bell and Paul Garlie of Focal Communications. Ms. Flad called the meeting to order at 5:40 p.m. 1. PRESENTATION BY COMPETITIVE LOCAL EXCHANGE CARRIER (CLEC) FOCAL COMMUNICATIONS David Bell and Paul Garlie presented information on Focal Communications. Focal Communications Corporation (www.focal.com) is a national communications provider. Headquartered in Chicago, Focal offers data, voice and Internet infrastructure services to large corporations, Intemet service, content and application providers, and value-added resellers across the United States. Focal currently services 22 major metropolitan markets. Focal's common stock is traded on the Nasdaq National Market under the symbol FCOM. Focal Communications does not install fiber optics or copper cable but instead leases other providers' infrastructure to provide service. The company recently signed an interconnection agreement with the Incumbent Local Exchange Carrier (ILEC}, Frontier Communications, which allows them to use Frontier's lines and provide service in Lakeville. Focal then uses its own switches to route Balls via their system. Focal provides telecommunications service to businesses at the T-1 level or greater. Recently, the Focal Integrated Voice & Data T1 product was launched in the Minneapolis Metro Area. This platform dynamically switches a channel on your T-1 from voice to data and vice-versa as needed, which allows integrated Internet & Voice services. Corporations can also use Focal's basic inbound/outbound service on a digital T1. Products such as DID/DOD, ISDN/PRI, Virtual OfficeTM and FocaLINCTM, provide corporations with additional telecommunications solutions. Mr. Bell also indicated that Internet users can utilize Focal's Managed Access T1 product which provides a solution for Data Intensive users. Additionally, users of Long Distance services can take advantage of Focal's pricing strategy for Interstate, Intrastate, International, 800 number and Conference Calling Services. Mr. Garlie also offered to provide the subcommittee with a tour of Focal's Minneapolis facility. Mr. Thompson indicated that he was pleased to find a CLEC that will serve the Lakeville area, as most CLECs he is aware of only serve Minneapolis and St. Paul. Mr. Thompson also indicated that the Integrated Voice and Data service might be appropriate for some businesses in Airlake Industrial Park, based on his conversation with companies during the High Tech Survey process. Consistent with the goal of educating the community on the telecommunications services that are available in Lakeville, Ms. Flad suggested that the subcommittee offer to include an article in Airlake Park News about Focal's services. Frontier and Charter have also been offered this opportunity, and Frontier provided information that was printed in the Winter, 2002 issue. 2. REVIEW PROGRESS OF HIGH TECH SUBCOMMITTEE The Subcommittee reviewed their purpose, goals, and progress. At their September 26, 2000 meeting, the EDC authorized the formation of a High Tech Subcommittee to explore the development of a High Tech Business Park. Development of a High Tech Subcommittee is consistent with the EDC's long- term economic development strategies, and specifically addresses the following: 1. "Research and identify fiber optics and other emerging technologies," as identified in the 2000-2001 Strategic Plan for Economic Development. 2. "Encourage additional office park/business campus development to achieve desired business mix," as identified in the 2000-2001 Strategic Plan for Economic Development. 3. "Attract and retain employers that will utilize the skills of residents," as identified in the 2000-2001 Strategic Plan for Economic Development. 4. "Encourage investigation of all potential upgrade opportunities in critical "business infrastructure" elements -phone, data, and other infrastructure, to promote positive outcomes for long term" as identified in the 2002 Strategic Plan for Economic Development. The committee held their first meeting on April 3, 2001 and identified three goals. 1. Develop a High Tech Business Park (HTBP) 2. Educate the business community on telecommunications options 3. Encourage additional telecommunications services to support Lakeville's existing business The Subcommittee discussed their progress and proposed continued efforts on their three goals as follows: 1. Development of a High Tech Business Park (HTBP) The Subcommittee has made the following progress to date: • Met with Dakota County Technical College and explored a proposed partnership as possible catalyst for HTBP. Discussions on hold while the outcome of the ISD 194 referendum and the impact of the state budget deficit on higher education are known. Subcommittee members also noted that there is are increased vacancies in high tech industrial buildings in some portions of the Metro area. The Subcommittee has agreed to continue with the following action: • Facilitate quarterly discussion with. DCTC regarding their ability to develop a technology center. • Complete E-Commerce Certification through DTED. • Coordinate an annual event, which highlights Lakeville's ability to accommodate technology businesses thus providing a foundation for . attraction of a high tech anchor for the HTBP. The subcommittee talked about this in a later agenda item. 2. Educate the business community on telecommunications options The Subcommittee has made the following progress to date: • Provided opportunity to have companies put information in Airiake News. • Attending ROI (Return On Investment) seminar. The Subcommittee has agreed to continue with the following action: • Continue providing opportunities fortelecommunications service providers publicize new high-speed data and voice transmission services in Airiake News and explore other avenues for them to provide information to businesses (ie: Chamber.) • Active participation of EDC members & High Tech Subcommittee members, businesses in Frontier's `Telecommunications for Your Community' seminar Apri130"'. • Member Selvig suggested creating a technology user's forum comprised of local business people that would continue to facilitate discussions on emerging technologies and issues in Lakeville. 3. Encourage additional telecommunications services to support Lakeville's existing business The Subcommittee has made the following progress to date: r • Surveyed businesses to determine base-line information on uses and needs. • Met with service providers and began exploration of companies' ability to provide service to Lakeville. • Encouraged telecommunications companies to put information in Airlake News. The Subcommittee has agreed to continue with the following action: • Contact service providers quarterly to stay abreast of services available to the community and monitor their inroads in accessing business accounts in Lakeville. (eg: Owest, Charter, Frontier, AT&T, Focal, etc.) 3. UPDATE ON E-COMMERCE READINESS CERTIFICATION The EDC moved at their January 29, 2002 EDC meeting, "to direct staff to pursue E-commerce Certification with the assistance of Frontier on the basis that it is consistent with Goal #3 of the City's 2002-2D04 Strategic Plan for Economic Development which states the EDC will "Encourage investigation of all potential upgrade opportunities in critical "business infrastructure" elements -phone, data, and other infrastructure, to promote positive outcomes for long term." Ms. Flad indicated that a draft application for E-Commerce Readiness Certification has been prepared and submitted to the Minnesota Department of Trade & Economic Development (DYED.) Margaret Olson, Marketing and Business Development Manager for DYED will review the draft and will meet with staff to provide feedback on April 2, 2002. Ms. Olson will also provide suggestions for an event at which DYED will present the City of Lakeville with E-Commerce Readiness Certification. Some components of the event that are under consideration include the following: Potential Event Activities: • Speaker on "What E-Commerce Means to Lakeville" • DYED will present E-Commerce Certification • Demonstrations} by Lakeville business that use technology in an innovative way • Other, to be determined Tenative Date: June, 2002 Proposed Location: Lakeville Area Arts Center r Pro osed Attendees: State Representative Mary Liz Holberg State Senator Pat Pariseau DTED Commissioner Rebecca Yanisch Administration Commissioner Fischer Linda Finley, Director of the Information Superhighway Dakota County Technical College President Ron Thomas Other attendees will include the City Council, EDC, the Telecommunications Commission, the Chamber of Commerce, local media, Frontier Communications, other telecommunications service providers, ISD 194, and ISD 192. Subcommittee members voiced support for the proposed event. The meeting was adjourned at 8:14 p.m. ltem No. City of Lakeville Community and Economic Development Memorandum To: Economic Development Commission Copy: Steve Mielke, City Administrator From: David L. Olson, Community and Economic Development Director Adam Kienberger, Economic Development Specialist Date: Apri125, 2006 Subject: Presentation on Housing Needs and Affordable Housing Information The Dakota County CDA contracted with Maxfield Research Inc. to complete a Comprehensive Housing Needs Assessment for Dakota County in 2005. The CDA commissioned this study in order to analyze the demographic growth trends and characteristics, the County's existing housing stock, and current housing market conditions. The needs assessment calculates the housing demand in the County through 2030 and recommends housing products to meet these demands over the short term. A copy of the summary findings for Lakeville is attached. Staff will also present a PowerPoint presentation on the findings for Lakeville at the meeting. Staff is also providing the recently distributed affordable housing need for Lakeville as determined by the Met Council for the period between 2011-2020. The Met Council has determined Lakeville's share of affordable units to be 2288 for this period. The Met Council defines affordable housing unit as those that are affordable to household earning 60% of the Twin Cities median family income which was $46,200 in 2005.. For owner-occupied units this translates to units costing less than $145,200 in 2005. The reporting .requirements under the Met Council Livable Communities program for the past 4-5 years have. been for units affordable to households earning 80%>.of median income which translated to units costing less than $193,700 in 2005. Based on this reporting requirement, Lakeville averaged 243 affordable units per. year for the years 2002-2004.. Staff is simply providing the EDC with this information at this point and will be seeking initial feedback and response to the information. This information was also presented to the City Council at a work session in March. Staff .plans to bring. the matter back for more discussions after we have had an opportunity to review this information further and develop initial recommendations to consider. Summary of Findings Lakeville Housing Needs and Recommendations From the Report: Comprehensive Housing Needs Assessment For Dakota County, Minnesota Prepared, for: Dakota County Community Development Agency Eagan, Minnesota November 2005 xfield RrcParrh inr. b 1 ~ First Avenue NE Suite 400 ~ Minneapolis, MN 55413 b12338.0012 Lakeville Summary of Findings -Dakota County Housing Study Introduction Maxfield Research Inc. was engaged by the Dakota County Community Development Agency (Dakota County CDA) to conduct a comprehensive housing needs assessment for Dakota County. Based on an analysis of demographic ~owth trends and characteristics, the County's existing housing stock, and current housing market conditions, the needs assessment calculated housing demand in the County through 2030 and recommended housing products to meet de- mand over the short-term. The following are key findings pertaining to Lakeville from the study, which was completed in November 2005. Key Demographic and Market Findings Dakota County Submarkets ,wcnd~n Soatn 1. For analysis, Dakota County was grouped into Paul three Submarkets, with Lakeville being in the County Submarkeu Growth Communities with four other cities. Sites tn,~r ~ DevClOped Commuoitiia Euynn (sf0" ~ GrnM~Communitiq for new housing are limited in the Developed "`i~h" 0 Rural .4 rca Communities, and the Rural Area is primarily B~r,,,~;,,, reserved for agricultural uses. ,,,P~,. Ruxmuunt ~ atie, "aatin~.~ 2. Demand is projected for over 82,000 new housing ~i units in Dakota County between 2000 and 2030. ? This includes about 56,000 new units in the arminRt Growth Communities, and over 20,000 new units ~ a in Lakeville. 3. Job growth is a key creator of housing demand. Lakeville added 2,000 new jobs from 2000 to 2004, which has matched Met Council's employment projections for the decade. This strong job growth, combined with strong growth throughout Dakota County will continue to make Lakeville an attractive housing location for many individuals and families. Population, Household, and Employment Growth Lakeville, 2020 to 203D Change 2000 2010 2020 2030 2000-2030 Population 43,128 59,000 78,000 87,000 43,872 Households 13,609 20,700 28,500 34,000 20,391 Employment 9,885 11,900 13,200 14,400 4,51 Sources: Metropolitan Council; Maxfield Research Inc. IvIAXFIELD RESEARCH INC. 1 Lakeville Summary of Findings -Dakota County Housing Study 4. As the adjacent chart shows, the projected Growth, Lake«Ile, 1990 to 2030 strong population and household ioo.ooo growth that Lakeville ex- 90.000 - perienced during the 1990s is so.ooo projected continued over the next ~o.ooo 60,000 - - three decades. Lakeville has an so.ooo _ abundant supply of vacant ]and I ao.ooo and is poised to capture the so,ooo greatest share of the County's zo.ooo ~ o.ooo household growth between 2000 j _ - and 2030 (25%). 1990 zooo zoto zoao Soso - P~~piilatior. -1 {owehokls - Gnploytr~nt - 5. All age groups in Lakeville will Distribution of the Adult Population increase in population over the Lakeville, 2000 to 2030 next three decades. However, Lakeville's and the County's ~ s ~ ~ population is aging, creating ~oooo increasing demand for mainte- nance-free housing over the next ° 's'0°° few decades. As the adjacent 10'0°° ' chart shows, Lakeville's 5~ to 74 s,ooo population is projected to grow i o by over 1 x,000 people between ~ ~oo0 2oio 20~° zo3o 2000 and 2030. ~ is-3~ 3;-sa -ss-~a 6. Like the Metro Area, the market rate rental market in Lakeville and Dakota County is soft (7.6% vacancy rate in the County), while demand for rental housing affordable to low- and moderate-income households remains high. In Lakeville, there are four affordable family rental townhome projects, all of which are fully occupied with waiting lists (three developed by the CDA, including Cedar Valley, Country Lane and Prairie Crossing} . 7. loo market rate apartments have been built in Lakeville this decade, and only 140 units were developed in the 1990s. Overall, Lakeville has a low percentage of renter households (8%) compared to the County (22%). This analysis supports that 20% of all new housing added in Lakeville by 2030 should be rental, and that 31 % of that rental construction he affordable (defined as housing affordable to those at/below 80% of median income). 8. I`ew housing is primarily satisfying demand from move-up and executive buyers, while older existing homes are providing some of the housing for entry-level and first-time buyers. In 2005 the average price of new homes in Lakeville was calculated at about S460,000 for sin- gle-family homes and $225,000 for townhomes/condominiums. Meanwhile, the average re- sale price of existing homes was calculated at $347,000 for single-family homes and $207,000 for townhomcs/condominiums. 47AXFIELD RESEARCH IVC. 2 J Lakeville Summary of Findings -Dakota County Housing Study 9. Senior housing is a relatively new phenomenon in Dakota County, as over 80% of the County's market rate senior units were built after 1995. Currently, Lakeville has one subsi- dized project (Fairfield Terrace), two affordable rental projects (Winsor Plaza and Main Street Manor), and no market rate senior projects. Housin;z Demand Calculations 10. The projected demand of 20,400 housing units from 2000 to 2030 is shown by type below. • For-sale single-family homes = 8,025 units (40%) • For-sale multifamily = 7,775 units (38%) • Rental market rate = 2,22 units (11%) • Rental affordable/subsidized = 725 units (3.5%) • Rental senior affordable = 550 units (2.~%) • Rental senior market rate w/ services = 5~0 units (2.~%) • For-sale senior market rate = 550 units (2.5%) Total = 20,400 units 1 1. With an ample supply of vacant Projected Housing Demand in Lakeville by Decade land zoned residential, Lakeville is projected to lead the County in ~.ooo - the development of for-sale 6,000 - - - - housing over the next 30 years by V s.ooo adding over 16,000 units. By ~ a.ooo 2030, Lakeville will also have a a 3,000 ~ need for about four times as many z ~,ooo j general-occupancy and senior i,ooo rental units as currently exist in o the community. This total zooo - zoio ~o~o - zoio ~o~o - Soso rental/senior housing demand ¦ For-Sale o 12cntal ¦ Senior* ~ amounts to 20% of overall Senior housing includes affordable rental, ownership, and housing need and would result in housing with services Lakeville's homeownership rate declining from 92% in 2000 to 85% in 2030. Housint' Recommendations The overall projected need for various housing products to satisfy demand from current and fu- ture residents in Lakeville through 2030 is presented in the table on Page 5. Specific recommen- dations to address the affordable housing needs oflow- and moderate-income households in Lakeville (as presented in the table} over the short-term are summarized below. For-Sale Housing Recommendations With rising development costs, there will be virtually no new single-family homes built that are affordable to moderate-income buyers. Lakeville should encourage for-sale multifamily hous- ing, as these units are generally more affordable (modestly priced below $250,000 in 2006}. ~1A_~FIELD RESEARCH IVC. 3 Lakeville Summary of Findings -Dakota County Housing Study Housing Rehab Recommendations With an aging housing stock, housing rehab will become increasingly important to maintain the quality of Lakeville's housing stock. The Dakota CDA will need to be prepared to steadily in- crease the number of Home Improvement loans issued to low/moderate-income households in Lakeville from about 8 rehab loans annually during the beginning of this decade to about 24 loans annually between 2015 and 2020. Expanded promotion of all housing rehab programs (e.g., MHFA) should be a higher priority for the city. Subsidized/Afforduble Rental Housing Recommendations There is demand in Lakeville for rental housing that is affordable to low- and moderate-income households. However, developers of affordable rental housing will face strong competition for available sites from developers of other types of housing, including senior and for-sale multifam- ily. Lakeville should promote mixed-use buildings (mixed-income residential and commer- cial/residential) as a means of adding subsidized (at/below 50% of median income) and afford- able (between 51 %-80% of median income) rental housing. In addition to mixed-use buildings, Lakeville should support the development of additiona140+/- unit family townhome developments by the Dakota County CDA or a similar development by another agencyifirm (up to three projects by 2020). These projects, as well as mixed-use build- ings, should be promoted in areas where residents would have convenient access to shopping, services, and transit. Preserving the quality of the existing stock of older apartments in the community will also be important to providing housing to lower-income renters over the long term. Thus, Lakeville should promote the use of rental rehabilitation programs. Affordable Senior Rental Housing Recommendations The Dakota County CDA's senior housing program has been very successful in providing af- fordable housing to low- and moderate-income seniors (55+ age). Lakeville has two such pro- jects (Main Street Manor and Winsor Plaza}, both of which are full with waiting lists. Lakeville can support another 60+/-unit affordable senior rental project in Lakeville within the next four to six years. Special .'Needs Recommendations A portion of Dakota County's population has disabilities or has experienced circumstances that make it difficult to maintain private housing. Based on research, several special needs housing projects are needed in Dakota County over the next decade, including housing for homeless per- sons (one or two small apartment projects for households with mental or chemical health issues and a 20- to 24-unit housing project for homeless youth), and housing for people with mental ill- ness (two or three 36-unit permanent supportive housing projects and a shared housing project for single disabled adults). While these projects need to be added throughout the County, Lake- ville should consider supporting potential locations within its jurisdiction for one or more of these projects. A good example of this product is the Haralson project in Apple Valley, which includes 36 1-bedroom rental units (16 for supportive and 20 for workforce housing). VIA?~FIF.I.D RESEARCH IBC. 4 O C O G.G. O v: v'. 1~ y R ` e^ T, rJ 1~ - O C . o r " ° ~ 3 ~f O l~ ~ N ~ v: rn ~ C_ U 'O ~ T y - ~ ~J O Jr, v, O ~ c O~ O y ~ N N N C i V i \ N r: N ~ N N Q ~r, oa - " ~ b y - N 7 Jn ~O ~ ~ Q ;r; N Q V C N - 7 M 4: t~ {yam v N of v. ~ ` :J U p O - x_ \ ~ O j C ~ ~O G^ ~ N N ~i ~ ~ ~ ~ ^ M h y i ~ M O ~ O O 0 1 O Vyyl~~ ~ N V ~ tLO VId L ~ W + O O O ? C O ~ n n C o r n c c s ~ ~ y :A ~ C K N O f ~ 'c'~\ '~C N ~ d C L r~} 1 y V ~ ~ ry O O C x ~ 7 O y p N V O ~ O N N .4 X r N VJ N ` O ri ^ ` i w H N N aC N q fy/~1r~ G ;r C ~ ~ O N O ~ G O V~r41 C O L L O Q h 00 ~ * N, a P ~ O C OG r-; ~ ~ v', O rr_^I 0 N N ~ ~ i r ~^`n. 1~ 0 ~ O C ~ 'n ~ O N '~i OC N O^ ` h ~ ~ i..~ J ^ r F O y ~ v, .C G~ O ~ ~ O ^ O ~ O N .G ~ N Z N x - p,~ ~ N e i p0 O ~ J N ~i r? Q p a ~ V' N - N N N C - 1 3 ~ y O V C O V~ O C 3 ~ Z 1 Ci O N M, ~ f^5 rJ ~ y / ~ ti e11 ~ ~ V y ti ~ L ,Clyy) F ~ V ~ Fn V ~ ~ G 6 ~ G ' T C c ~ a Q Z' C 3 Y 1 - .Y R :J ~ 'J 7 y ~ ~ _3 V U ? ~ Metropolitaa Couacil Buiiding communities that uiork February 17, 2006 Ms. Charlene Friedges Clerk City Of Lakeville 20195Holyoke Ave Lakeville, MN 55044-9047 Dear Ms. Friedges, In collaboration with the Minnesota Housing Finance Agency and its affordable housing expertise and with representatives for local government, the Metropolitan Council developed a methodology which was used to determine affordable housing needs for the region and for each of the region's sewered communities. Yout community's share of the regional affordable housing need for the decade 2011 to 2020 is forecasted to be 2288 new affordable units. For a more detailed explanation of how affordable housing was determined, please see the January 2006 report of an advisory panel, "Determining Affordable Housing Need in the Twin Cites 2011 - 2020" at http•//metrocouncil org/plannine/housing/AffHousingNeedJan06~df. The Metropolitan Council developed this housing needs data in response to State law (§473.859) to provide you with the information your community should use in the comprehensive plan update process. See Section 3 of the Local Planning Handbook for more housing details and information about Comprehensive Plan requirements at hit p://www.metrocounciLo~plannin~JLPH/handbook.htm. A paper copy will be sent upon request. Questions about housing planning should be directed to Linda Milashius at 651-b02-1541 or your Sector Representative. Sincerely, / ~ Guy Peterson, Director Housing and Livable Communities www.metroYoWEY$r~l'$1PlannetSlCau(man\MalysiBVwusing\housing needs ic5ter.doc Metro Info [dne 602-1888 230 East Fltth Street St. PaW. Minnesota 55101-1626 1651)602.1000 Fax 602-1550 TTY 291-0904 M Egwl Opporfunlty Employer Attachment 2 2011-2020 Allocation of Affordable Housing Need by CitylTownship Household Growth Share of Region's Percentage of 2011 - 2020 Growth Housing Stock 2011 - 2020"'* that is Affordable Community New Alt New All Affordable House- Affordable House- 2005 2020""" Unit Need holds Unit Need holds Dakota County Apple Valley 1,324 3,748 2.6% 2.3% 18% 20°~ Burnsville 737. 1,826 1.4% 1.1% 25% 26°k Eagan 530 1,500 1.0% 0.9% 22% 23% EmpireTwp. 100 700 0.2% 0.4% 8% 11°k Farmington 492 3,000 1.0% 1.8% t4% 15°h Hampton 4 30 0.0% 0.0% 22°h 21% Hastings`. 24T 2,200 0.5% 1.3% 32% 28% .Inver Grove Heights 714 2,457 1.4% 1.5% 27% 27°k Lakeville 2,288 8,300 4.5% 5.0% 13% 17°k Mendota 3 10 0.0% 0.0% 69% 65% Mendota Heights 86 200 0.2% 0.1% 9% 10% Rosemount 853 3,200 1.7% t9% 14% 18% South St. Paul 104 300 0.2% 0.2% 37% 37°h Vermillion 6 40 O.b% 0.0% 14% 14% West St. Paul 122 350 0.2% 0:2% 40% 40% Metro Area Total 51;030 166,.547 100.0% 100.0°k 28% 28% 'Data for cities that are split between two counties are combined. *'Ctties outside the Metropolitan Council jurisdiction are not Included. "'Assumes a new affordable housing unit is added for each affordable unit needed between 2011 and 2020. a~` Summary Report: Determining Affordable Housing. Need in the Twin Cities 2011 - 2020 A Report by an Advisory Panel to Metropolitan Council Staff January 2006 s, 7 Summary Report: Determining Affordable Housing Need in the Twin Cities 2011 - 2020 Introduction This report presents a new forecast of the affordable housing need in the Metropolitan Area during the decade 2011 - 2020, and describes the process used in determining each community's share of this regional need. Communicating forecasted affordable housing need numbers is the first step in helping communities determine the housing goals and objectives to be included in the housing element of their comprehensive land use plans. Conveying need numbers to communities also helps them envision and plan their role in addressing their share of the forecasted regional affordable housing need. This report outlines a methodology established by an advisory panel to Metropolitan Council staff for: a) determining a forecasted regional affordable housing need; and b) allocating that need to individual communities. This report begins with background information about the necessity of determining regional affordable housing need, and the Metropolitan Council's role in this process. This report concludes with a series of tables showing how many newly- constructed affordable units will be required in each community to meet the forecasted demand for affordable housing between 2011 and 2020. Background: The Necessity for Determining Regional Affordable Housing Need Enacted in 1976, the Metropolitan Land Use Planning Act (MLUPA), Minn. Stat. Sec. 473.859, subdivision 2, paragraph [c], requires communities in the region to include in their comprehensive land-use plans a housing element that acknowledges the city's share of the forecasted regional need for low- and moderate-income housing. A [local] land use plan shall...include ahousing element containing standards, plans and programs for providing adequate housing opportunities to meet existing and projected local and regional housing needs, including but not limited to the use of official controls and land use planning to promote the availability of Land for the development of low and moderate income housing. The Metropolitan Council must also prepare and adopt guidelines and procedures to help local governmental units accomplish the provisions of the Metropolitan Land Use Planning Act, including this affordable housing planning responsibility. This guidance is provided through the Council's Local Planning Handbook, online at www.metrocouncil.org/planning/LPH/handbook.htm. It references the housing element and housing implementation provisions of the Land Planning Act, providing information about each community's share of the forecasted regional low- and moderate-income housing need, as well as tools and methods cities can use to create and promote affordable housing opportunities. Prepared by an Advisory Panel to Metropolitan Council Staff Summary Report: Page 2 Determining Affordable Housing Need in the Twin Cities 2011 - 2020 In 1977, the Council responded to the affordable housing planning charge in the MLUPA with guidelines for comprehensive plans due by 1980. The Council used afive-factor formula that compared communities in the region with regard to: 1) total number of households; 2) anticipated household growth to 1990; 3) number ofjobs; 4) anticipated growth injobs to 1990; and 5) the number of low- and moderate-income households minus the number of existing low- income housing units. For this first round of local comprehensive plans completed in the early 1980s, cities prepared housing elements that included the housing numbers identified by the Council, and guided sufficient land in their land use plan to accommodate these low- and moderate-income housing numbers through high-density residential development. Following the 1995 legislation that required local comprehensive plan updates prepared for the period of 1998 to 2008, the Council asked communities to plan for new affordable and life-cycle housing in numbers consistent with the housing goals negotiated as a condition of participation in the Livable Communities Act (LCA). For non-participant communities, the Council asked communities to set goals consistent with the LCA goals framework employed by the 100 plus LCA cities and townships. That goals framework was not based upon analysis of households with a housing need, limited household income or housing condition. It was based solely upon keeping the production of new affordable units at a level similaz or better than the existing situation in the community between 1996 and 2010. In creating this goal-setting framework, the Council established benchmark ranges for each community in six categories: percent affordable rental and ownership housing, percent non- single-family detached units, owner-renter split, single-family and multifamily density of housing stock. A community's benchmazk was a range in each of the six categories that represented the average for all communities at a similar stage of development. The Council and local governments negotiated goals to increase or maintain percentages or numbers in each category. Only two communities failed to submit comprehensive plan updates with affordable housing goals as reflected in the LCA goals-setting framework. The MLUPA also requires that comprehensive plans include an implementation section identifying the housing programs-local, state and federal fiscal devices such as bonding, TIF, tax abatement, and official controls including the guiding and zoning ofland-that communities will employ in addressing their share of regional need for affordable housing. Foremost among these implementation efforts is the guiding of sufficient land for the development of new housing that may provide the opportunity for the production of affordable units. Comprehensive plans must identify sufficient land to accommodate the communities' share of the region's need for low- and moderate-income housing. Typically, the development of new affordable units requires the use of housing programs or tools and the availability ofland to accommodate the development of affordable units. This is why the Land Planning Act requires both the recognition of regional share of need, and the guiding of land to accommodate this need. Prepared by an Advisory Panel to Metropolitan Council Staff R Summary Report: Page 3 Determining Affordable Housing Need in the Twin Cities 2011 - 2020 Overview of the Methodoloev in This Report Staff of the Metropolitan Council, through work with an advisory panel, ~ initiated atwo-part study to determine the 2011 - 2020 regional need for new affordable housing in the Twin Cities, and the allocation of this regional need to communities. The two steps to the study are broadly summarized in the following way: • Part 1: Forecast the Regional Affordable Housing Need and Determine the Amount of Need That Will Consume Land (new construction only) in Sewer-Serviced Communities. • Part 2: Allocate the New Construction Affordable Housing Need to Communities, Adjusting for Criteria That Are Important to Locating Affordable Housing. In determining the overall affordable housing need for the Twin Cities, the Metropolitan Council tied forecasted affordable housing need to forecasted household growth in sewer-serviced areas. To be precise, this methodology guides affordable housing need to those communities that are experiencing growth in households serviced by Metro Sewerage District or by municipal treatment facilities in "rural center" communities. By following this approach, the Metropolitan Council is allocating the region's forecasted affordable housing need in a manner that is consistent with overall goals to guide erowth within the urbanized portion of the Twin Cities. A Laod Phtunia¢ Exercise This methodology has been designed to assist cities with land Qlannine for the next round of comprehensive plan updates (in 2008). It is only concerned with newly-constructed affordable housing, a development action that consumes land. Forecasted affordable housing need between 2011 and 2020 that can be accommodated by units that exist in the current housing stock is not relevant to this exercise. To further explain this point, some of the new affordable housing need that arises between 2011 and 2020 will be satisfied ~ units that exist in the private market today. As academic research has shown,Z the amount oflow-income housing in the private market expands from decade-to- decade asolder units depreciate in price to maintain occupancy, a process known as "filtering." This movement between market-rate and affordable pricing does not generally occur among subsidized units, which generally are never "priced up" into the market-rate category. New, low- income households that find housing in older, market-rate units that have "filtered down" in price have their housing needs satisfied without directly consuming land. It is critically important to acknowledge the private market's role in providing affordable housing in this study, both through filtering and through new, unsubsidized construction. Historically, the private sector has provided the bulk of all low-income housing in the region; in 2000, the private sector provided affordable housing to approximately 40% oflow-income Prepared by an Advisory Panel to Metropolitan Council Staff ~ 4 Summary Report: Page 4 Determining Affordable Housing Need in the Twin Cities 2011 - 2020 households in the Twin Cities. Compazatively, the public and philanthropic sectors, using subsidies, provided affordable housing to only 15% of all low-income households. (Less than 2% of low-income households were homeless in 2000. The remaining 44% oflow-income households were housed in private-market units, but with rental or owner costs exceeding 30% of gross income). Definitions and Contents Underlvine the Methodoloav The following definitions and concepts aze important for understanding the methodology behind the advisory panel's determination and allocation of affordable housing need in the Twin Cities between 2011 and 2020. The application of each concept is explained in a following section titled "Specific Steps in the Methodology." • Affordable Housine: In this report, a unit is affordable if it is priced at or below 30% of gross income of a household earning 60% of the Twin Cities median family income (or $46,200 in 2005). The 60% income threshold is determined by the U.S. Department of Housing and Urban Development (HUD) and is the cutoff for tax-credit housing development, the main program for new affordable rental housing construction nationwide. Fifty-nine percent (59%) of all first-time homebuyers in the Twin Cities area assisted by MHFA in FFY 2005 had incomes at or below 60% of median income. • Household Growth: The methodology in this report relies on Metropolitan Council forecasts of growth in sewer-serviced households between 2010 and 2020. These forecasts were included in System Statements issued to cities in September 2005. Forecasts for 18 communities have been recently revised by mutual agreement of the Metropolitan Council and local officials; these forecast revisions are scheduled for Metropolitan Council action in February 2006. • "Healthy-market" Vacanc~(5%): Vacant units are vital to a healthy housing market because they help maintain stable prices. An insufficient number of vacant units creates upward pressure on prices as housing consumers compete for too few units. In the affordable. housing sector, upward price movements reduce the supply of units, working against housing policy and public investment in affordable housing. • Low-Wage Job Proximi , Ratio: This report's methodology makes adjustments in affordable housing need for communities that are net importers of low-wage workers (employment centers) or net exporters of low-wage workers (bedroom communities). The ratio is a comparison of local low-wage jobs (within 10 miles of the community's geographic center-point) divided by local working residents (living within 10 miles of the center-point).; A ratio higher than 1:1 indicates an imbalance (communities that are net importers of workers) that may be mitigated to a certain extent by the creation of more local affordable housing. Prepared by an Advisory Panel to Metropolitan Counci[ Staff Summary Report: Page 5 Determining Affordable Housing Need in the Twin Cities 2011 - 2020 • Affordable Housin Stock: This report's need allocation methodology also considers a community's existing supply of affordable housing, giving credit to those communities that supply higher levels. This measure estimates the existing shaze of a community's housing stock that is affordable using Minnesota Department of Revenue data on 2004 mazket values, Census 2000 rent levels, and Metropolitan Council data on 2004 manufactured housing units.° • Transit Service Level: A final factor considered in allocating affordable housing need is the level of transit service (destinations and frequency) in a given community. Low- income households are more sensitive to transit services than middle- and upper-income households, and locating affordable housing neaz transit opportunities is a public policy goal. The methodology in this report makes adjustments based on a classification of transit service available in communities, as expressed by one of four levels: 1 =regular, frequent transit service to many points all through the day (only Minneapolis and SC Paul fall in this category) 2 = a frequent amount of service, but limited destinations (mostly inner-ring suburbs in this category) 3 =some transit service, but very limited in frequency and destinations (many second- andthird-tier suburbs in this category) 4 = no regulaz transit service Stren¢ths of This Methodological Anoroach The methodology employed by the advisory panel for this report has the following strengths: • The anoroach is consistent with the work completed for The Next Decade ofHousinQ in Minnesota, a key planning document used to forecast affordable housing need across Minnesota. The Next Decade report has been widely accepted by policymakers, and many housing stakeholders are basing affordable housing planning on its results. This report follows key methodological approaches and employs specific production assumptions from The Next Decade study. The Next Decade study was sponsored by the Metropolitan Council, the Minnesota Housing Finance Agency (MHFA), Family Housing Fund (FHF) and Greater Minnesota Housing Fund (GMHF). • Metropolitan Council household growth forecasts provide the basis for need allocation in this studv. These forecasts are determined through a collaborative effort between local government and Metropolitan Council staff to identify growth areas and to quantify reasonable market expectations, land capacity, and systems capacity. They, therefore, are the strongest forecasts of future household growth by community. Prepared by an Advisory Panel to Metropolitan Council Staff Summary Report: Page 6 Determining Affordable Housing Need in the Twin Cities 2011 - 2020 • The process of allocatine affordable housine need in this report takes into consideration community characteristics that are critical in locating new affordable housing: proximity to low-wage jobs, transit service and current affordable housing stock. These factors are widely recognized by national housing policymakers as vital considerations to successful affordable housing placement/development. Regarding job proximity, this methodologv is particularly strop in that it considers the location of low-wage jobs. Most other allocation methodologies consider total employment (or perhaps retail employment) without segmenting by wage level. • The methodology was developed with input from city officials, MHFA staff. Association of Metropolitan Municipalities {AMMI staff and~rivate-market housing experts. The advisory. panel advising the study was comprised often individuals with deep experience in housing policy and development. This group considered numerous allocation factors and tested several approaches to calculating housing need. The advisorypanel also solicited imoortant feedback from six city officials in a focus session in 7anuary 2006. Limitations of This Methodolo¢ical Anaroach/Caveats The methodology employed by the advisory panel for this study also has limitations. They include the following: • The forecast period covered in this analysis is relatively long-term. Any methodological approach would suffer from this limitation, but it is important to say that many factors are difficult to forecast 15 yeazs in advance. Factors in 2020 such as the economic conditions in the Twin Cities, migration patterns, demographic changes, housing interest rates, construction costs, and more, are simply unpredictable, but will have an impact on affordable housing need. Significant variances from the assumption made on any of these factors could prompt a re-examination of the needs numbers. • The methodology likely errs on the conservative side in estimating affordable housing need. This methodology assumes that the stock of affordable housing in the private sector (unsubsidized) will expand significantly between 2011 and 2020 through the mechanism of downward price filtering. For planning purposes, this is a conservative approach. However, if the private market supplies fewer affordable units than assumed, the new affordable housing construction need for the decade will be larger than is documented here. • The forecasted overall housing need calculations do not consider units that may be needed to replace substandard units or units lost to gentrification or demolition. This adds another layer of conservativeness to the forecasts. There is no reliable data to project occupied, affordable units that are substandard in condition and in need of replacement. As well, housing units that may be lost to gentrification or demolition are not estimated in this report, due to the tack of reliable data on the value/price of demolished units and the difficulty in predicting areas that will be gentrified. Prepared by an Advisory Panel to Metropolitan Council Staff Summary Report: page 7 Determining Affordable Housing Need in the Twin Cities 2011 - 2020 Saecific Stens in the Methodolo¢v Part 1: Forecast the Regional Affordable Housing Need and Determine the Amount of Need That Will Consume Land (new construction only) in Sewer-Serviced Communities. The following bullet points describe the specific steps that the advisory panel employed to estimate affordable housing need across the Twin Cities, and to determine the amount of need represented by new construction. This methodology is also graphically illustrated in Exhibit 1. • Step 1: Determine forecasted household growth in sewer-serviced parts of the region. Metropolitan Council regularly prepares city- and town-level forecasts ofsewer-serviced households (serviced by the Metro Sewerage District or by municipal treatment facilities), as well as un-sewered households (with septic systems), for decennial milestones (years 2010, 2020, 2030). Net growth expected in the sewer-serviced part of the Twin Cities is forecast at 166,547 households, or about 98% of total household growth expected in the period 2010-2020. • Sten 2 Determine the proportion ofgrowth made up by low income households Of all new households added to the Twin Cities between 2010 and 2020, 38% (64,100 households) will eam at or below 60% of Twin Cities median family income, according to the advisory panel projection for this study. This projection was based on historical income distribution patterns, applied to the 2010 and 2020 household forecasts. • Step 3: Estimate the number of affordable housing units that the private market will provide to new !ow-income households. As explained previously, the advisory panel expects that 20,3001ow-income households added to the Twin Cities after 2010 will find housing in privately-owned, market-rate units that exist now, but will depreciate down town affordable level during the next decade. This assumption is consistent with work from BBC Consulting in The Next Decade of Housing in Minnesota. An additional 5,600 new low-income households between 2011 and 2020 are likely to find housing in newly-constructed units produced at affordable prices without public aid. The BBC Consulting methodology includes this category of affordable housing in its tally of "private market provision," but the methodology for this report must add them into the land-consumptive component (Step 4, hetow). • Step 4: Calculate the stet need for newly-constructed affordable housing units Subtracting those new low-income households that are expected to find housing in existing private- sector units that become newly affordable (20,300) from total low- income household growth for the next decade (64,100) yields gross demand for new affordable construction in 2011 - 2020: 43,800 units. (This figure includes 5,600 units that the private-market is expected to produce on its own, without subsidy, at prices affordable to low-income households.) Prepared by an Advisory Panel to Metropolitan Council Staff a e 2 m L « ~,ma°m u e8 Ea o pmy a N i H m - W 'J m a L m Z' Y a Q TJ ~ T~ g m m m Y; u a° c~ ,,°a o< oa o o h l~q; a g w~ 'o a n d y aR Y t~ > q y O C Y C S~ N~ O y Ea o~ d ~ a ¢ J e w e a r °w ° L° ~ o'~o ~'y9~ a~o~ Lm ?g emuq$E$3a ~ t o afE 8awaoc„ 3~~ :-'u~sNg~D_o.~~ a'~~ ui ca G~ q G: yGmu OCyO QY 'aipOq ZUC ~m.XO>m=wYO ~a pK I N c 5 y m Cn 3~'~ YmU i m2.- 3- u u 3~ a o U r 7 d 3 W s N t- a ~ U U Q Z 3~ `qY 2~ w xN 0 2 L~ v a U V _4 G m~J N N~ 3 C7 e 2 Z ~i r tV ri Y147$~ H I _ ~ ' A m J ~ d U ~ z n h ~ U m_ M I T• O m F 0 I 1 ~ C N ~ 2 E N m c N ~ W O a ~ 4 c e ~ i7 .y m c A ~ 1 1 o F <m ' r s of a E c ~m • I z ~ s ~i ~ 1 ' a m m C l;, ~ V C w Vm C Y p f A 3 C Y F Q _ ~ m p d a N N ,t., O 3 a p C Z l e0 Y ~ L ~ .u Q ~ m O d a~~ N ~ J O O C$ ~ ,y = L Y O' O O # t~ 4 m ~ o` a9$S"3~m z~aS.~ .Yip 'tl pw -ox mA om .-.oxm= mm Q ~I W.Z. n)dU Ng oil W p0 N~ C a - - _ ,Aa ~,.E ~ E i E ~ S. rn A y` Summary Report: Page 9 Determining Affordable Housing Need in the Twin Cities 2011 - 2020 However, to arrive at a net total that reflects the full picture of new construction need, the advisory panel added in a 5% vacancy provision (2,200 units) and 5,000 units for homeless households that will lack housing at the start of the next decades The vacancy adjustment is vital to maintaining price stability in the housing market. The addition of units for homeless households is based on Wilder Foundation forecasts of homeless housing production and its timing. The total need for newly-constructed affordable housing_units in the Twin Cities between 2011 and 2020 is estimated at 51.000 (or 30 6% of forecasted growth in sewer-serviced households). This ntunber represents the regional new construction need. This number of affordable housing units is allocated to Twin Cities communities in Part 2 below. Part 2: Allocate the New Construction Affordable Housing Need to Communities, Adjusting for Criteria That Are Important to Locating Affordable Housing. Many local and regional governments across the country, including the Metropolitan Council, have developed formulas for allocating affordable housing need across a number of communities. While these formulas vary greatly in their complexity and differ in the set of variables under consideration, most attempt to allocate need along some measurement of household or job growth, making adjustments for location-criteria that aze important to affordable housing policy (e.g., transit service, location of social services, proximity to jobs). The. advisory panel strove to limit the number of critical assumptions, recognizing that the addition of more assumptions can increase the potential for error without necessarily increasing accuracy. The advisory panel believes that an allocation formula based on a series of complex assumptions and intricate mathematical steps would reduce the transparency of the formula, making it more difficult for affordable housing stakeholders to understand. For this report, the advisory panel used the following factors in its formula to allocate affordable housing need across the Twin Cities for the period 2011 - 2020: • Household growth potential • Ratio of local low-wage jobs to low-wage workers • Current provision of affordable housing • Transit service These four criteria are addressed in the formula through the following questions: 1. How much household growth is a community planning to absorb from 2010 to 2020? 2. What is the relative balance of low-wage jobs based in the area vs. low-wage working residents? 3. To what extent does a community offer affordable housing now? 4. What level of transit service is available in a community? Prepared by an Advisory Panel to Metropolitan Council Stafj Summary Report: Page 10 Determining Affordable Housing Need in the Twin Cities 2011 - 2020 The answers to these questions determine the amount of affordable housing allocated to a given community per the formula in this study. As detailed in the previous section, the advisory panel projects the number oflow-income households in the region to grow by 64,100. Also 5,000 households in the region will be homeless at the start of the decade. Some of these low-income households will find housing that exists in 2010; the balance will require an estimated 51,000 new housing units (equivalent to 30.6% ofsewer-serviced household growth). The following steps provide more detail on the method for allocating need amounts by community. Exhibits 1 and 2 following this report indicate the results of these calculations. for each community's share of the regional need. • Step 1: Apportion new law-income housing need in each community according its household growth. In this step, the advisory panel relied on its 2010-2020 sewer-serviced household forecasts and assumed that 30.6% of all new housing units in each community would be affordable to low-incom0 renters or buyers, the same shaze as for the Twin Cities overall. This is a uniform allocation of affordable housing need, following the pattern of where overall residential growth can be accommodated.b • Sten 2: Make adjustments /additions or subtractions) to the housing need in each community according to the local low-wage iobs/workers ratio existing_affordable housing stock percentage. and transit service After establishing the baseline allocation of affordable housing need according to household growth in sewer-serviced communities (Step 1), the advisory panel made the following adjustments to each community: o Low-wage iob proximiri: Communities with more local low-wage jobs than local low-wage working residents in the area (net importers of workers, or above a 1:1 ratio) increase their share of need by the proportional amount they were above 1:1 parity. Cities below 1:1 parity have their need share proportionally diminished ~ o Affordable housing stock: For communities in which more than 30% of all existing housing units aze affordable, the formula reduces the need number by the proportional amount they were. above this threshold. For communities in which the percentage of affordable housing is currently below 30%, the need share number is proportionally increased. o Transit service: For communities with regulaz, frequent transit service (transit service levels 1 or 2; see page 5 for definitions), the formula increases the community's share by 20%. For communities with little current transit service (category 3), the formula makes no adjustment. For communities with no regulaz transit service (category 4), the formula decreases the community's share by 20%. Prepared by an Advisory Panel to Metropolitan Council Staff Summary Report: Page 11 Determining Affordable Housing Need in the Twin Cities 2011 - 2020 The allocation formula can be expressed mathematically: affordable housing need = (HH growth°' K,) { 1 + (Jobs/Workers~ - 1) + (0.30 -Existing aff housing) + (Transit Adjustmenf<) } * KZ where Kl is 30.6%, the forecast for regionwide affordable housing need as a share of forecast growth, and KZ is an adjustment to ensure the regional total of 51,030 needed affordable units. Formula Results The allocation formula described above results m need allocationsthat range from a few units,. at the low end; to thousands of units in those communities that expect the most growth andlor that are proximate to employment centers. The map on the fol}owing page shows the allocation of new-construction affordable housing need by community between 2011 and 2020, according to the methodology described in this report. Exhibits 2 and 3 presents tables summarizing the amount of new construction affordable housing need in each community, and for each county in the Twin Cities. The tables also show the adjustment amounts related to each of the three factors. Prepared by an Advisory Panel to Metropolitan Council Staff Summary Report: Page 12 Determining Affordable Housing Need in the Twin Cities 2011 - 2020 Twin Cities Region Affordable Housing Units Needed, 2011 to 2020 I Nana I 1 to 99 I I 6tPWi I 700 t0 499 Il ANOKA 500 to 999 r orr.n> 'T".~ 5X4 _ 2,00010 2,999 - f NGTON - 4,088 (Minneapolis) w*. i a~ roa• WntlMa G 1/Wne a x+Wc+f ivp. w~Mniq. , YID Yw rine~ame. tines mw i CARVE ~ „~„n° .w.w TM.32-. x awN. i mm>. r,.,mAr..o. n,p n1 COTT i ,~i DAKOTA x..w.w*.c "E~" xrp ewp nw r. w.. my. xw.rw ar cw TyC crwanT u.w~*w o.r.ry. I i wr ' a~e'mnv. o a a ,o ie m a ~ mnleyR93 ~ IIeL20p01{tiC COYOQU 1/10r9B Prepared by an Advisory Panel to Metropolitan Council Staff Summary Report: Page 13 Determining Affordable Housing Need in the Twin Cities 2011 - 2020 Endnotes: t Advisory Panel Members: Tom O'Neil-Committee Chair (DSU~, Guy Peterson (.Met Council), Todd Graham (Met Council), Kathy Johnson (Met Council), Tim Marx (MHFA), Tonja Oa (.'vIHFA), Anne Hurlburt (City of Plymou[h), Patricia Nauman (Association of Metropolitan Municipalities), Linda Barthel (City of Blaine), Angie Skildum (Family Housing Fund). z This issue is very complex and no addde or study reviewed for this report yielded a methodology that was suitable to measure the number of units moving across price categories in the Troia Cities. However, the advisory panel assumed that the supply of low-income housing in the private mazket would expand between 2011 and 2020, a conservative approach to need estimation. This approach is coasisterit with the findings of The Nexd Dxaite sf Hotrring im Mixxerotastudy (November 2003) in which BBC Consulting stated that 4D.3% of new low- income households added to the Twin Cities between 2000 and 2010 (about 24,000 out of 60,000) will fmd housing in private market units that have filtered downwazd in pace or that have been developed as affordable azt/rout public aid. The advisory panel applied this same percentage for the decade 2011 - 202D. In the decade 2011 - 2020, the 40.3% figure translates to 25,830 new low-income households that will find affordable housing in the pdvate market about 20,260 of them will find housing in existing units that have filtered down iri price (no land consumption), and 5,570 in newly-constmcted units (consuming land) developed asaffordable mithoutpublic aid. The latter figure was based on extrapolations of 1) GVA Marquette counts of new, affordably-priced, private mazket apartmrnts constructed in the Twin Cities so Faz this decade; and 2) Metropolitan Council counts of new ownu units constructed in the Twin Cities so faz this decade. s The ratio was calculated for each community by the Metropolitan Council using the U.S. Census Bureau's Local Employment Dynamics data setfor 2003. This data set identifies the ~+ecific location of jobs by wage level and the snedfic residence of workers by level. This data setcounts jobs by location for the following wage caregories (annual wages): less than $15,000, $15,000 to $40,800, above $40,800. "Low-wage" jobs fox use in this report were those paying $40,800 and below. This level is reasonably close to the 60% median family income figure for the Twin Cities in 2005 ($46,200). a To estimate the number of affordable owner units by coaununiry, Metropolitan Council staff tallied all homestead housing units with a 2005 estimated mazket value of $145,200 of less, per Minnesota Depaztment of Revenue. The research staff estimated affordable rental units by reviewing Census 2000 counts at the following price duesholds: $G39 for efficiencies, $684 for one-bedroom units, $820 for two-bedroom units and $948 for all three-bedroom+ units. The research staff assumed an even distribution of values across the Census unit size/price categodes, which did not match directly with those thresholds cited above. s Any growth in homeless households after 2010 is already accounted in the growth forecasts oFloro-income households. Therefore,. housing production to serve them is implicitly factored into the need calculations. a Some current affordable housing exists in un-severed communities. Also, it is possible that some new affordable housing may be built in un-seemed communities, but that is not planned or assumed in this study. ~ Locai low-wage jobs "in the area" aze defined as joba within 10 miles of the communities geographic center-point. Local working residents axe defined as workers residing within 10 miles of the center-point Ten-mile radi necessarily extend into neighboring communities, but in this way the local labor mazket is normalized, setting aside municipal boundaries hat aze artificial from a labor market perspective. 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L U QUO2~ (A~ r 2011-2020 Allocation of Affordable Housing Need by City/Township Household Growth Share of Region's Percentage of 2011 - 2020 Growth Housing Stock 2011 - 2020""" that is Affordable Community New All New All Affordable House- Affordable House- 2005 2020"""' Unit Need holds Unit Need holds Anoka County Andover 660 2,700 1.3% 1.6% 3°k 8°k Anoka 124 6D0 0.2% 0.4% 43% 41% Blaine` 1,267 5,300 2.5% 3.2% 27% 26°k Centerville 80 260 0.2% 0.2°~ 10°k 13°~ Circle Pines 13 50 0.0% 0.0°k 29°h 29% Columbia Heights 231 6D0 0.5% 0.4% 42°k 42°~ ColumbusTwp. 54. 350 0.1% 0.2% 3% 15% Coon Rapids 200 940 0.4% 0.6% 27% 27% Fridley 116 300 0.2% 0.2°l0 36°k 36°k Lexington 8 40 0.0% 0.0% 58% 56% Lino Lakes 1,051 3,000 2.1% 1.8°k 7°~ 18% Ramsey 1,402 6,500 2.7% 3.9% 4% 12% St. Francis 73 1,200 0.1°k 0.7% 35°k 26% S rin Lake Park' 19 50 0.0°k 0.0% 29% 29% Metro Area Total 51,030 166,547 100.0°~ 100.0°~ 28°h 28°k 'Data for cities that are split between two counties are combined. "Cities outside the Metropolitan Council jurisdiction are not included "'Assumes a new affordable housing unit is added for each affordable unit needed between 2011 and 2020. 2011-2020 Allocation of Affordable Housing Need by City/Township Household Growth Share of Region's Percentage of 2011 - 2020 Growth Housing Stock 2011 - 2020'' that is Affordable Community New All New All Affordable House- Affordable House- 2005 2020''' Unit Need holds Unit Need holds Carver County Carver 10 50 0.0% D.0% 16% 16% Chanhassen' 1,301 2,900 2.5% 1.7% 9% 17% Chaska 789 2,500 1.5°h 1.5°k 30°~ 30°k Cologne 211 1,020 0.4°k 0.6°~ 31°~ 26% Dahlgren Twp. 985 4,310 1.9°k 2.6% 9% 22% Hamburg 6 6D 0.0% 0.0% 55% 48% Mayer 120 840 0.2% 0,5% 32°k 23% New Germany 4 70 0.0% 0.0% 70% 52% Norwood Young America 117 1,D00 0.2% 0.6% 52% 38% Victoria 975 3,200 1.9% 1.9% 7% 17% Waconia 160 792 0.3°h 0.5% 23% 23% Watertown 60 700 0.1% 0.4% 42% 33°k Metro Area Total 51,030 166,547 100.0°!0 100.0°k 28% 28% 'Data for cities that are split between two counties are combined. *'Cities outside the Metropolitan Council jurisdiction are not included. **'Assumes a new affordable housing unit is added for each affordable unit needed between 2011 and 2020. c 2011-2020 Allocation of Affordable Housing Need by CityrTownship Household Growth Share of Region's Percentage of 2011 - 2020 Growth Housing Stock 2011 - 2020** that is Affordable Community New All New All Affordable House- Affordable House- 2005 2020"'* Unit Need holds Unit Need holds Dakoffi County Apple Valley 1,324 3,748 2.6% 2.3% 18% 20°h Burnsville 737 1,826 1.4% 1.1% 25°/a 26°~ Eagan 530 1,500 1.0% 0.9% 22°k 23% EmpireTwp. 100 700 0.2°k 0.4°k 8% 11°k Farmington 492 3,000 1.09'0 1.8°.6 14°k 15°k Hampton 4 30 0.0°Io 0.09'0 229'0 21% Hastings'. 241 2,200' 0.5°~ 1.3% 32% 28% Inver Grove Heights 714 2,457 1.4% 1.5°~ 27% 27% Lakeville 2,288 8,300 4.5°l0 5.0°~ 139'0 17°h Mendota 3 10 0.0% 0.0% 69°h 659'0 Mendota Heights 86 200 0.2°k 0.1 % 9% 10% Rosemount 853 3,200 1.79'0 1.9°k 14% 18% South St. Paul 104 300 0.2% 0.2°/a 37°k 37% Vermillion 6 40 0.0% 0.0% 14°k 14°h West St. Paul 122 350 0.2% 0.2% 40% 40% Metro Area ToffiI 51,030 166,547 1D0:0% 100.0°~ 28°k 28% *Data for cities that are split between two counties are combined. "Cities outside the Metropolitan Council jurisdiction are not included. "`Assumes a new affordable housing unit is added for each affordable unit needed between 2011 and 2020. 2011-2020 Allocation of Affordable Housing Need by City/Township Household Growth Share of Region's Percentage of 2011 - 2020 Growth Housing Stock 2011 - 2020** that is Affordable Community New All New A!I Affordable House- Affordable House- 2005 2020'"** Unit Need holds Unit Need holds Hennepin County Bloomington 627 1,500 1.2% 0.9°'0 21% 22% Brooklyn Center 163 400 0.3% 0.2°h 30% 30°~ Brooklyn Park 1,590 3,832 3.1% 2.3% 27°,6 299'0 Champlin 179 700 0.4% 0.4% 129'0 13% Corcoran 816 2,700 1.6% 1.6% 13% 23°k Crystal 173 400 0.3°k 0.2°/a 26% 27% Daytoh (pt.) 942 6,000 1.8°~ 3.6% 22°~ 17% Deephaven 26 50 0.1% 0.0% 2% 4% Eden Prairie 685 1,300 1.3% 0.8% 10% 12°k Edina 212 400 0.4% 0.2% 20% 21% Excelsior 29 80 0.1% 0.0% 48% 47% Golden Valley 104 200 0.2% 0.1% 18% 19°h Greenfield 25 132 D.D% 0.1% 12°h 15°h Greenwood 5 10 0.0% D.D% 5% 6°h Hassan Twp. 174 718 0.3% 0.4% 4% 24% Hopkins 143 300 0.3% 0.2% 43% 43% Independence 6 28 0.0% 0.0°k 2% 4% Long Lake 40 100 0.1°~ 0.1% 23°;0 25°k Loretto 3 10 0.0°k D.0°k 29°~ 29°k Maple Grove 1,844 5,644 3.6% 3.4% 7% 12°k Maple Plain 6 28 0.0% 0.0% 36% 369'0 Medicine take 4 10 0.0°~ D.0% 15% 16% Medina 384 1,122 0.8% 0.7% 5% 20% Minneapolis 4,088 9,000 8.0% 5.4% 47°k 47°h Minnetonka 421 811 0.8% 0.5% 12% 13% Minnetonka Beach 1 2 0.0% 0.0% 3°~ 3% Minnetrista 306 1,100 0.6% 0.7% 2% 13°k Mound 68 250 0.1% 0.2% 28% 28% New Hope 213 500 0.4°k 0.3% 31% 32% Orono 311 694 0.6°k D.4°k 4% 14% Osseo 28 110 0.1% 0.1% 46% ~y% Plymouth 1,045 2,500 2.0°h 1.5°k 14% 16% Richfield 765 1,500 1.5% 0.9°k 29% 31°~ RObbinsdale 222 500 0.4% 0.3% 29°h 30°k Rogers 112 488 0.2% 0.3% 5°k 7% St. Anthony" 117 3D0 0.2°~ 0.2% 34% 34% St. LOUIS Park 501 1,000 1.0% 0.6% 26% 27% Shorewood 53 120 0.1% 0.1% 3% 5% Spring Park 31 80 0.1% 0.0% 40% 40% Tonka Bay 7 16 0.0% 0.0% 8°h 9% Wayzata 44 100 0.1°k 0.1°h 24% 25°h Woodland 1 2 0.0°k 0.0% 1% 5% Metro Area Total 51,D30 166,547 100.0% 100.0°h 28% 28°h "Data for cities that are split beiween two counties are combined. "Cities outside the Metropolitan Council jurisdiction are not included. "'Assumes a new affordable housing unit is added for each affordable unit needed between 2011 and 2020. ~t 1 2011-2020 Allocation of Affordable Housing Need by City,Township Household Growth Share of Region's Percentage of 2011 - 2020 Growth Housing Stock 2011 - 2020** that is Affordable Community New All New All Affordable House- Affordable House- 2005 2020"*" Unit Need holds Unit Need .holds Ramsey County Arden Hitls 288 800 0.6% 0.5% 18°h 21°k Falcon Heights 21 50 0.0% 0.0°!° 36°h 36°,b Gem Lake 36 96 0.1°,6 0.1°~ 5°~ 27% Lauderdale 35 90 0.1°k 0.1% 51°k 50% Little Canada 155 400 0.3°k 0.2°k 45% 45% Maplewood 333 900 '0.7% 0.5% 26%0 27% Mounds View 81 250 0.2% 0.2°~ 409'° 40% New Brighton 156 400 -0.3°~ 0.2% 31 % 31 North Oaks 51 147 0.1% 0.1°h 0% 11% North St. Paul 115 317 0.2°k 0.2% 26% 27°k Roseville 201 500 0.4°k 0.3% 26°k 26°h St. Paul 2,625 7,OOD 5.1% 4.2% 47% 46% Shoreview 107 340 0.2°,6 0.2% 16°f° 16% Vadnais Heights 170 500 0.3% 0.3% 29°~ 299'0 White BearTwp. 65 200 0.1% 0.1% 99'0 10°k White Bear Lake' 87 269 0.2% 0.2% 18% 18% Metro Area Total 51,030 166,547 100.0°!0 100.0°h 28% 28°.6 'Data for cities that are split between two counties are combined. "Cities outside the Metropolitan Council jurisdiction are not included. "'Assumes a new affordable housing unit is added for each affordable unit needed between 2011 and 2020. 2011-2020 Allocation of Affordable Housing Need by City/Township Household Growth Share of Region's Percentage of 2011 - 2020 Growth Housing Stock 2011 - 2020"" that is Affordable Community New All New All Affordable House- Affordable House- 2005 2020""" Unit Need holds Unit Need holds Scott County BellePlaine 202 1,800 0.4% 1.1% 27°k 21% Elko 235 1,380 0.5°~ 0.8°,b 9% 14% Jordan 37 500 0.1% 0.3% 46% 40°~ New Market 221 1,350 0.4% 0.8°k 9% 13% Prior Lake 2,138 5,500 4.2% 3.3% 14% 23% Savage 1,621 3,800 3.2°h 2.3% 8% 17°,6 Shako ee 2,105 4,500 4.1°k 2.7°~ 18°~ 25°k Metro Area Total 51,030 166,547 100.0% 100.0% 28°k 28°k *Data for cities that are split between two counties are combined. *"Cities outside the Metropolitan Council jurisdiction are not included. '*"Assumes a new affordable housing and is added for each affordable unit needed between 2011 and 2020. 2011-2020 Allocation of Affordable Housing Need by CitylTownship Household Growth Share of Region's Percentage of 2011 - 2020 Growth Housing Stock Community 2011 - 2020'"` that is Affordable New All Mew All Affordable House- Affordable House- 2005 2020"*' Unit Need holds Unit Need holds Washington County Bayport 29 160 0.1% 0.1% 20% 20% Cottage Grove 1,112 4,400 2.2% 2.6% 9°h 13% Forest Lake 312 2,542 0.6% 1.5% 26% 23% Grey Cloud Island 170 750 0.3% 0.5°k 16% 21°h Hugo 877 4,000 1.7°k 2.4°h 10% 15% Lake Elmo 528 1,965 1.0% 1.2°k 22% 25% Mahtomedi 41 150 A:19'o D.1% 10°h- 11°,y Marine on St. Croix 9 50 0.0% 0.0% 6°h 8°k Newport 70 276 0.1°~ 02% 40% 38% Oakdale 184 700 0.4% 0.4% 24°h 24% Oak Park Heights 24 125 0.0% 0.1 °k 37°~ 36% St. Paul Park 89 340 0.2°h 0.2% 31% 30% StilMrater 142 546 0.3°~ 0.3% 19°k 19% Willemie 2 10 0.0% D.0% 53°k 52°h Woodbu 2,202 7,494 4.3% 4.5% 9% 14% Metro Area Total 51,030 166,547 100.0°k 100.D°k 28% 28°k 'Data for cities that are split between two counties are combined. "Cities outside the Metropolitan Council jurisdiction are not included. "`Assumes a new affordable housing unit is added for each affordable unit needed between 2011 and 2020. "tem No. -City of Lakeville Community and. Economic Development Memorandum To: Economic Development Commission From:. David L. ~Ison, Community and Economic Development Director~~ Copy: Sure Mielke, C?ty Administrator Adam IGenberger, Economic Development Specialist Date:... April25,..2006 Subject: April Director's Report The fallowing is the Director's Report for April of 2006. Fitt(ie~ Proiect The City Council unanimously approved the Contract for Private Development ind~ading the Business Subskly Agreement for Lifetime Fitness project at their April 17"' Meeting. A neighborhood meeting for this proposal is sdlecluled far Apri125"' at 7:00 p.rn: at the Water Treatment Facility at 185' Street and Ipava Avenue. City staff are also working with Lifetime Fitness staff to finalize their site plan and the subdivision plat for the ~ro~e~v This is scheduled to go before the Planning Commission on May 18 a~' nd the City Council on June 5"'. Lifeetime Is hoping to break ground an the project in mid June. If any EDC member would like additional information on this project, please do not hesitate to contact either Adam or myself and we will provide any additional information that is available. Mardt Buildinc Permit Renort The City issued building permits through March with a total valuation of $32,625,519. This compares to permits totaling $40,627,849 during the same period in 2005. Included in this valuation were commercial and irrciustriah permits with a total valuation of $2,984,000 compared to $7,900,000 through March of 2005. The City also issued permits for 30 single family homes and 16 townhome and condo units in March. This compares to 22 single family and 20 townhome and condo unit permits during the same period in 2005. Dakota Future Economic Summit EDC Chair Matasosky and Economic Development Specialist Adam Kienberger, attended the Dakota Future Annual Economic Development Summit on March 23, 2006 at the Rosemount Community Center. Attached please find copies of two of the presentations that were made at the Summit by Kate McEnroe of Kate McEnroe Consulting, a national economic development and site selection consultant. Both Chair Matasosky and Adam can provide additional comments at the meeting regarding their observations regarding this event. Duke Rea iF?~trschase of Industrial Lan¢ in Lakeville Staff recently met with representatives of Duke Realty regarding the 137 acres at the SE corner of Dodd Blvd. and 215"' Street of industrial property that they have entered into a purchase agreement to purchase. Duke plans to develop 1,S - 2 million square feet of industrial building development an this property. They are currently completing their due diligence under their purchase agreement. They are .also determining the environmental review process that will be required fcx a project of this magnitude which may involve an Environmental Impact Statement ar (EIS). The City has also been contacted regarding development of the Stepka property west of Dodd Blvd. -and south of County Road 70. The majority of #his 175 acre parcel is not scheduled to come into the MUSH until 2010 and 2015. A proposed developer of the property has inquired about the possibility of bringing the property into the MUSA now to facil'~tate the development of the property. The City Council discussed this request at a City Council work session and indkated they did wish to consider bringing this property into the MUSH until 2008 or lal;er to aNow for the completion of the Co. Rd. 70 Interchange, completion of the Elko-New Market Interceptor, and for the completion of the 2008 Comprehen~ve Plan update. This would also allow Duke Really to begin the development of their property that is in the MUS~A prior to bringing additional property into the MUSA. Gty staff are responding to numerous inquiries regarding large dlstnbation facilities that have inquired about both of these properties and that in most cases require rail service. Progressive Rail is currently in discussions with the Metropolitan Airports Commission regarding the possibility of extending rail service across Airlake Airport property to serve both the Duke Realty and eventually Stepka properties. Downtown Plan Update The Downtown Planning Task Force met on April 4"' and a copy of the notes from this meeting is attached. These meeting notes have also been posted on the City's web site. The next meeting of the Task Force is scheduled for May 2°d at 5:00 p.m. at the Water Treatment Facility. Sootliaht on Business Cloverleaf Cold Storage was featured during the Spotlight on Business at the March 6~' City Councl meeting EDC member Jack Matasosky made the preserrtation and a copy of the presentation is attached. Arden IGtchens was featured during the Spotlight on Business at the April 17"' City Council meeting. EDC member. Bob 8rantly made tfie presentation and a spy of the'presentation is attached. 3 S 8~ `O 8 8 8 H 8 8 8 8 8 ~ 8 8~ 8 8~ 8 8 8° 8 8 8 8 [s; h O ~Np en G O O C C O C O C N O C t~ O O tV o O C V C C O C ~ z4z' vii O~ a M N P vM1i' M d N V VI C1 ti a 4 p p p ~ ~ S S S H O S S S S O H' S H O O S O S S S O O O S S S 0 0 ~ 8 0O O O C O C C O O G O O 00 00 O O C O O G O Q G G C C G pO pp O ~ ~ eON~ M1 O O RC pS .~i 6 = ~ ~ M M ~ O .N. ~ ~ ~ W M ~ Y ti M N M M1 M ~ ~ b y O O ve' ~ 8 4~ W O O O O O O O O O O ~n O 'O ~ O p ~/t O O N O O O p O O O O I j Lr+ O M M O O O O O O N O O N O T O O ? 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J~ l ~ „ Ste. ~~u~ >9 ~ ~ Y ~ c~~ ~ Y What do V1lhat can } 5 ~x~°`~ they want? you do? 5 7 Y~ A5 r, ~=Tr° ©Kate McEnroe Consulting 2006 S ,w c a ` r i s ~ V > ~ ) 4 2'?Q~Y ~ r h ~ t,^ s ski o r ~~n S ~ s n ~ ~~b.S2~~ s. d ~aa'vt~' C~/. ?"A.~ f~ Y~ x z r r ~ 1Nh at's New t~„~~ ~h ~SFs k ~ • Prospect activity on the rise y s • Renewed interest in "new" locations z 4 ~ ° • Broader range of intermediaries representing `s~~~" projects ,'~~u s' ~ • Less face to face contacts between \ z~~ ~ prospects and communities ~~f ; . • Quick analysis, slow decision making ~~r • Second generation offshore decision making ~ ~ ~ ©Kate McEnroe Consulting 2006 J S :tee 1~ ~ ~ ~z r r ~ ; SxF~{~xti ~ i ~ ? x 'S ~ 1 e~ pTy ~ ~ -i a 'y~ > tt ' sc 4s V ~ v< _ a r~~~ fi ~ , f zs' ? s >~F t , `3 ` , zrr: w }9 Fla,...- }..~~;s.3 , , ss x z~~ 5 ! Projectsare being initiated to: R ~ ~ zx 3 7,°; ~ ~G r,~~:~r? i^ • Optimize Portfolios s • Reconfigure Portfolios S1~ ; • Add Capacity • Satisfy Client Demand 5~ Sn^ -.,a..~,.. r: ~ • Reduce Costs ~N 3 • Respond to tight labor markets ~~s, z~ ~ r sz>~ i F e? x ''~~~,OKate McEnroe Consulting. 2006 r- e X ~s` >v ~~E~$.s ~ C ~ ~ 5 xv~~ G~~~~~~.T What do they want? :?~X,-F- N ~i ,,a.yvH Cj., s° r T''C ,'~s ~ ~ • Single point of contact ~ _ _ ~ • Web-based information y 5 \5 ~~54 ty • Quick response s~ ,a> • Evidence of ski11 availability • Understanding of labor and infrastructure y capacity constraints T • Opportunities to save money a, ~.y3 S . Fi ~.4 u ~ +i~J S S F ©Kate McEnroe Consulting 2006 h ~Sk{N ~rS ~ ti ! gdss t4 ~,.s 5 ,7 r, ~ ~ "`>t e„ ~ '~rz ~ ~Y ~ i ~ - ~ ~,t. SYCV jC ey^` 9 ~ r~ ~ ? i ~.F~9 yG- 7 y ~ r $ ~ r sz F ~ Basic Needs s a s~~.~z a w a~s'w~~ • Are the people available? a » vtY ~ • Do they have the skills I require? ~ ~~n • Will they work under the conditions I set, and grow ` with mew/v t , 6; • Will my operating costs be reasonable and stable? ` ~~SS~ • Is the site and physical infrastructure suitable? ~5`~R j' • Can you fill my needs, or are you expecting me to 5 fill yours? ~vr ~ Y g g g ~s~~ s~`, ~ • Are you, the communit , oin to et behind me or <~< Ty ~;~~U .get in my way? Se PROVE ITI ~~Y „~~y~~ , s; ©Kate McEnroe Consulting 2006 ~ < . - s - toe ~ ~~F' as. s s~t ~ F" s ~ ~e t ' < ' ~1 inn Ate' i°6 n what can ou do? K~. ~ Y ~.vY v' F ~ a~4 • Cooperate s • Supercharge your retention program ~~t~s ~f ~s s • Develop new internal networks r~. ~~r -Get to know new types of employers, who they hire, what their experiences are - Get to know new training programs at the community college and university level - Strengthen school (high school) to work outreach , ~s << ©Kate McEnroe Consulting 2006 t ,~Y ~ < ~ s r~ ~ :S ti ~ y'u~5 sn3r r t t ~ .'ASS ~ ~ L~"` F C -Tt ?i { f , :a ~ Y l , Y. F ~ ~ t~~..'J , X5. t 3 i, } f 5 ~ ~~~~~~~~~~~What can you do? se r~ti c c:: ~~s ~Y; • Develop new external networks N S ' -National contacts for local companies -Broader range of site .selectors ~ • Develop new information r -Specific measures of job skills ~h s~~~` • Develop new marketing strategies w~ >I T~ ~ -Don't sell the "dirt" first s ~.5 Y? ~ $ 1 ~ ~ ~ ~ l s w „ ©Kate McEnroe Consulting 2006 k -r ~ s z'.Y x~~Zr ~ f~ ~r T s. a) 2 r r V T ~ :fit n: I"`,..~ Sr w f.~ „r. ~~~What can you do? ~ fM 5~a>'°• J • Develop niche strategies - "white collar", "high tech", "biotech", "knowledge F~~~ ' ~ workers" are all too broad Y` ~ ` ~ • Do your homework because you won't have ~ time to gather data after you are approached < t y ~ with a request s ~ • Spend your marketing time and money on correcting misperceptions and raising your visibility ~r ©Kate McEnroe Consulting 2006 ~ ,~s ~^Gy~~ F Y a ~ 5:. _ ~~,~~yZ' 1 5 7 ~ d~~~~~~~i,-~E~.F 9 ~~yi'~r s t v~cf Sir S~ ~ x^5~~\~.s - ' a`'`<s~ y~ '*s:j ~ ~ ~yT'!S; S~ ,xh s~~`'u~3 . D ti~ s ,Nn ~ y ~ n$~ ~ ~ ~a .7 ~ ° s,Y.,f ,.5...:3.5 ~`~~~Brutal Truths ~r=: . , ~av ys s. ' \~F ~s~" ~ • The process isn't designed to give you the `Y~~ benefit of the doubt T~~ ~x ` • More decisions are being made at arms' zs~ 'sc,= g len('~th t s,~ 4 <r ~4 ; x • Your process matters as much as your ` product • "Out of Town" projects decide on a metro 5 M area first, not on a city within that area s~~ v, s` • "In Town" projects hinge on employee ~.~,y commutes and ability to find appropriate rea! fF ~ estate 'r~^~. tR :z , ©Kate McEnroe Consulting 2006 . s ~ - Y r 5~ Tz 1 ~ ~ { S 2r Z 5~ r~5, eY~, 5 ?.'aim,~s~*'4s~~zs~~`a~>i`~`~aYa~ivi ^~Y~~`~~Y^ a~'~ What's a metro citylcou my to do? M~. ^ti n . f. • Protect your base 's- • Expand your base h ` ~ • Grow your entrepreneurs s ~ • Help to ensure the metropiex sees and wins a iot of relocation projects • Make sure you don't give projects a reason not to choose you s , • Prepare a true, credible business case of r t ' your benefits as a location within the ~ s metropolitan area F ©Kate McEnroe Consulting 2006 ~ Y+ v ~ s~ x > r ~ y~i'n`s~ v >z ~ > J F._s kis r.~' z \ 3y S,1 `Ra2~~~:i? t _ r xis a >z .y r`3 r sr ~ CYL r What an metro citylcounty should have 'vs Y` TY y~v w ~~~x ~ 3.' • A thrilled group of local employers • A credible business case explaining the labor draw ~`L? ~ ~f„ ~ ~ area and commuting advantages >°~x}~ • A proactive workforce development program ~ • Real Sites and Buildings x ~ °~s~ z a~~ ~ • State of the art utility infrastructure yr~~ ,x ~ z ,t ; • Quality of life elements that support a diversified range ~~4„` of lifestyles ~~s rt ~ • Incentive programs that are consistent with the hot :s buttons of targeted project types 1 4 S 4 Yx ~`,aTYY f~. 2ur. ~ F s t'd, r ©Kate McEnroe Consulting 2006 J Z~~ Jam:. . ~ r w ~ > r' n~~ <,s Yr s ~~t - v 7> ~*ri q ~ 1 4 g~f K ~ StS, ~ How a metro citylcounty should .behave .;u.~~~, K .C.~~.~ e i Y ~C'~~ ?Stiy~, * a 5 ~;F r fv5.. s F ~ ~ ~ • Resolution of Strategy and Approach • Targeting strategy that is ambitious but credible rv f ' • Strong regional partnerships Y • Political consistency and stability ~y ^ ~ • Quick response permitting and approvals process y ~ < • Single point of contact for prospect handling ~.~~~r ~ > r~~ r ~ • Rigorous business retention program ~ ~~s ~~~~z • A staff that cultivates person-to-person relationships ~~i S ~ ~ ~ with intermediaries and prospects r ~ • Professionals in the critical jobs U r ©Kate McEnroe Consulting 2006 s s > , 4zi.;;s~r x ~ - s ajxt r a x i r"F.~~.F~~~Y.Ry y' R"'i- T "*Y ~ ~Z,.S rvi ttehy t cti i- 2 Y ~ ~ tisv 4. x~1~>r ::YY"*v~.y3'.~a;.1 n+~S.3 s _N~t)3 ~ y,~'d ~ t Evv~ to ; ; <~~Y~s Regional Issues fi Y, .K • The areas included in a region should make sense to the customers • A region should not consist of adjacent areas joint F together only to create an area with a critical mass s ~ of population or some other quality s ~ • Prospect handling should be easier on the customer ~ 4y '4 when a regional organization is created; separating r~ lead generation/marketing from prospect servicing 'x Fc~ ~r~v • Regional organizations have to create regional data r t ~ T' to have the greatest impact t rt c S r r T4.; ~ S'nY~Cq ~t,~ ©Kate McEnroe Consulting 2006 4 „ 4. . . rti~~r w _.:r ~.a~ 'SS ~cf .5"v'y<NCCr ~N~:, S " yu.' w r~ ~ r dpi ~ ^ ~ f" Y ~ ~ ~F<'2i Ct~~zr f,+r~17+~C~C~'~~,`~"f. y~,: ~ ~-,;y>7~.a~ur~y5~'~fi.1sS r1, 'r..;`S ~YTrx.'rs?:~s -,5 ~ ` ~~~~°~z~~The Final Brutal Truth ~r~ z y~ ~ 1 r T , ZS T~`;? , J L~ ~ > ~r'>~ `u v C~ 5r ~ a ~~u4 ~C~l~~ ,,1 ~ x ~~'S;' r„ - b A µ ~zU? ~,.w`r< THE JOB IS NEVER FINISHED y rS s ,r: r,-i r f i \Y, {i r f. x Y r x5± j N t. ti x~ ~ A T~ Y ~SP}~ t* y ~y ~ 5~ ~ :.sti, :';:,.fir; i t%, 5 z~ t~ ~ ©Kate McEnroe Consulting 2006 r,5 ~~:H C~j.~J ~R ! ; ~ J ~ V Y~ .;<A11 lY ~ S \ ~ a "r } T,N~~ ,c ~~.~~Sx~~Gy^~~'J z s l ~ r.° e4 g Y . '''z;;~~z~~r~:~~,.~r~??rr <.;dt~~kr?''c'~.5n rvsF~? ' F f ~`1n z .y 1.9,r •Q~3'z F' ~itv' z' ~'N`n~~`~''~~f'~< ~ / ? F' ` r ? xz` T\ 5~ S < - ~s,.S ; F xti t v ~ ."ya^• - r ~ z rr-r"tr2 a U~ti : ~ z~ zfr.r t '2 z a a~ ~l' r.~ ? ~ , r.~i a~Y x ? , nv > _~i ~ ~ zy ~ xy w3~,N~I'~~ aa~~~US Kni'>"`"~<„55 ; x z /vat x~x:~r. ,<1 ~~t~~, ~ f<~ f~^~,~y, zµR y~ .S Yr~x a ~ ,<s~ s x ~,55~` S Best Practices T5 r., ~2,r~ ~ ~ ¦ i n `'4 ~ S i sj ~ f) 1 ~~~~F~YS. r Marketin and Pro'ect Mana ement ~~ua rr< /+'C~F 2nx ~ t trr' ~~~~~~a x ~x r c z s~ Tc r G'z n yY ~ T ? ,,>Z: a ~r ~ 2~ T5r » ~ f z c~~l z r ~ Tsx k s ar s ~ r 9y`T~Z~i ~ ? r ~ t s : y. ; a s r zw ~as? jx F ray ~.4 - 4 { ~ ~S u^R pe > < f 5• ~ xT< 5 1V'<^S,, s~ <T~ ~Sr~.r~~ ' < ~~'`''x5 ~ ~ a a ? < fs ~ n F n'?„' r ~ i z` >c y tiY - ~s~~~~~~~ ~ Tx. r r r ~rr=~r. z>~~*~~F y Dakota County tlx~ > t x fi 4i t ) ~ z v rF s v~f,r y ~?6.,.f ~ z "i r~ U,5 1 ,<5sa a~ - F S f ~n ~ ~~~~rR F ~f ``xv~ v. x~p? .~fi ~z ^ : r ~ ~ssrr FY~xa "ls Y1/r~<~: ~ =x Y ~ F ~ r r~~~rv~~~i~~~~~ Economic Summit xze5 ~ a S r C .>c e n1, ZI r Ff. - ~~ii'~C~axS. 1 ~e ~ ff~~~~yy~~s.r~~r 5 March 2006 ; a f h v ~.~y~~`s ~ y^ tir rfi >s xJa ,/-i- •Er tl~z Q _ 3 t F n y ~ r t y} ~z T 4 ,T~ a y},y~. {p- `yz z r 57 Y ~ c S< ti Fps-., ~ < .L ~ f ^5" ) A,x U ~~r~ ~•~Ylz`.y.Y1^ fS~S~YIr~~ ~~'v~~?~Yn'?~ F. x~n F S ? ti z fi ~ z x xr~ ~ fif+ "tZ,F ty' ~ ?'~v ly ~ y~ -~^w~x t~~'r alv^9f ~`<r~?5w~5S~~ .f - 5s wvr 4 < , % ~ r` f~^.y, rY r ~'yzr f zv ~S x p)vis<rl~~s~~h~~'.Ni . ~ , s> r, .x. 2K ,`.5 ~,.r i r~`}?~t ~5~~~ p4 ,''~e,F2>.~'s~T?~~,~?zc,r N .y' a ( ? ~ y y x~c~ ~ S its \S4~ ! 3' 13s a ? l5'+r.SZ~`l G S F~ SDK h~ 5S a. r S ~z. ti r 4 ~5~~ C~i~.rts c"`..`v: ~~~~v. .4"rL ~'~s~`,...,. r.,; ~FA~~~ Marketing in These Times =R~ :.$t:p ~ " 4~;?, ft~~F°Sj ~~.'1 • Protects your base ~„~C 5 • Is highly focused ~ \ ~ • Transmits information 1 • Is patient ~`cjx • Is unique - no, really y ,s f= s~ a. r ~~,~3~f* v z~sd~b a~~Y~- ~ .c ^.~s2-~~' h~ y s< K t ©Kate McEnroe Consulting 2005 s ~ ti _ H, s ~ ~ s ~ qty ifi ? sy,~ ~`lyyT f s ?n f `h µYUfl~ High-impact. marketing s= ~~x¢ r,t • Introduce the go-to person FTC • I nformation rich web sites .s s • Announcement mailings • Private sector testimonial information s >r z(~; .c ~ 5r F f a~S 5y ~ a - ~ ~ T ~ r ~s h» ~ ~s~ ;;Zr s G v J' ` 5~ ~ i~ z z \t. " s OKate McEnroe Consulting 2005 ~r 5 yy° . 'Yx ~ i zls "'x>syR'*RS ~xtus ~~.av z>r'~,~~ S~/ 1 'i ~ 4 Ya' ~ 4~2:''~~JV S ~ YS Y~ y j ~ ~ ~ t>t~J ,r5:fii`r ~ .haiM1 ~"~i3: ~.r. ,,a5 .>.e:.; j Low impact marketing ;n. 1:< MS ~ x ~ • Fact book mailings Y r • CD-ROM mailings ~-y 5. s r~ x , w~ • A~` s Slide shows y~4~ ~~y • Logo'd items r; ~r N ~.~f 5 r n~~; ~f u k r~ S ~y Y ~ Y J Z~ S ` 5 ~ ~ \ V~ t h ` ~ ©Kate McEnroe Consulting 2005 r,~ <~< s 1 s ~ a~ ~a~`'~~?~v 9I. ° ~ ~=~~~s Promotion Issues :s~~.,; ;J ~ 2 ~ rt xd? r ~ ~ • Anecdotes are better suited to promotion and lead s generation than statistics ~~~~t ~ • Why am I still getting. unsolicited CDs in the mail? a~~TS~j~'~s~ ~ s~f= ~ • A remarkable number of direct mail pieces don't ,s have contact names and numbers t~S ~Fz~r~~s~~ • So far, the Internet is a better servicing tool than a y~~~~~ ~ marketing too • E-mail newsletters are proliferating, and that's not improving their chances of being read r • Event marketing can work well, if it is well executed v and funded ~~5 ` • Ads don't influence consultants; for other prospect g ~Y types the more generic, the less useful they are = s ,F. Y ? 4 ~ Y.' ©Kate McEnroe Consulting 2005 ~ s v 5y N s rSS ~ z,~:ry `.~tsti N6~~x'.5~ sz>._ z"~'..a~. y 'S`am ~ ~ ~ra~ ~ Na n ~ ~s r ~=x~ s`=~ Servicing Projects z ~ za.;: 'y~y F l~ r~~ • The competition and the most critical factors change as the project moves forward t \ a~~5~' • Push everything to the web site 5 rF~ - Data ~ SS.. z ^ ~ ~ ` r -Explanations of unfavorable data 1 ~~S \ S Anecdotes iy~;~~F • Understand the data standards s~~ Ys~ • Answer the questions a ~ • Do your homework ahead of time F Y~ • Make it personal • Let a prospect stick with the single point of ~,,y contact "tea': ~,\x,~,< s t ~ f s . 'Y ~ OKate McEnroe Consulting 2005 ~S /~~?r<4~C`f tesu y e< av~ Hll ~ < ~J+~.+iNp~w.?F 1 z r~ti ~ i ~ r vQ ~~x,~~ 2~~cr r.2 ?V Y h~ ~ 'C 4C ~7 ~~s~N)F x Res onse Issues p , , t ~~hy ti • I don't send out questionnaires • I consult internal resources first then web ~ sites ~ s f 5 la ~r~~~Y~ • y ime I c ime is short ` B the t' all, t' h ( t i\~•^~s~*~~~`~ ~~~~F ~ 4 y5~ ~ • ost requent reasons to call: ~~~5 u~^~ -Details about local employers u ; s, ,Y ,~°~'i- -Tax details ~ h! 5 S; t lT\ F Y U 4 ~ 5 - 1' Telecom details ~ lSi ~w4, 5?,;. .~,i ~y~%~3.: , f ~ ` -Incentive details F ' `Y'<~`: C?fflce building info - ©Kate McEnroe Consulting 2005 1 Lakeville Downtown Planning Project Task Force Meeting #5 April 4, 2006 Meeting Notes Task Force Members Present: Wendy Wulff, Jerry Erickson, Darci Juniper, Larry Werner, Gary Amoroso, Virginia Emond, Laura Lonergan, Theresa Engelhart Task Force Members Absent: Joe Blee, Mark Hotzler Staff and Consultants Present: Steve Mielke (City Administrator), Adam Kienberger (Economic Development Specialist), Allyn Kuennen (Associate Planner), Rusty Fifield (Consultant, HKGi), Brady Halverson (Consultant, HKGi). General Business • Consultant Fifield called the meeting to order at 5:00 p.m, • City Administrator Mielke informed the group of Enggren's announcement that they aze closing. • Consultant Fifield reviewed the agenda items for this meeting. Ground Rules for Public Input at Meetings • Consultant Fifield outlined options for establishing ground rules at the task force meetings. • Task Force Member Werner suggested exploring the City's cable channel to convey information about upcoming meetings. • The Task Force discussed ways to keep the meeting focused on accomplishing what was on the agenda while still allowing for a certain amount of public input. • The Task Force agreed to the following approach for public input: o Apgroximately 30 minutes at the beginning of each meeting would be available for public comment. o Only topics from the previous Task Force meeting maybe addressed. o The City will publish information about each meeting on its webpage. o People will be encouraged to also use other means to submit comments, including letters and email. Concept Review • Consultant Fifield explained that this meeting would examine evolved concepts for three areas: North Holyoke, North Gateway, and Iberia Avenue extension. • The purpose of this discussion is to shaze ideas among Task Force members and to give direction to the consultants. • Consultant Fifield reminded the group that the concept graphics being discussed aze not development plans, but representations of ideas and principles for development in each area. Lakeville Downtown Planning Project ~ Task Force Meeting #5 Apri14, 2006 Page 2 North Holyoke • Consultant Fifield reviewed the issues and challenges associated with the previous concept ideas for North Holyoke Avenue from Upper 206` Street to the creek. • The consultants recommended the following strategies for the North Holyoke area: o Preserve and strengthen single family residential character through regulations and financial incentives. ¦ Do not make any changes to existing Comprehensive Plan or zoning designations. o Make streetscape improvements. ¦ Tree-lined streets • Landscaping improvements • Sidewalk bumpouts o Establish a clear edge between commercial and residential at Upper 206`" Street. • The Task Force endorsed these strategies for the North Holyoke Area. o City Administrator Mielke noted that a final decision isn't being made now and the Task Force's role is to offer feedback to the consultant's suggestions. o City Council will make the final decision with review and adoption of a plan laterthis summer. • Items for additional. investigation by the consultants: o Plans for funding recommended streetscape improvements. o Regulatory tools for achieving objectives in this area. North Gateway • Consultant Halverson reviewed the initial concepts and then described the evolved concepts for the North Gateway area (202nd south to the creek). o Option 1 -Mix of commercial and office on west side and mix of commercial and medium density housing on east side. o Option 2 -Medium density housing on west side with existing homes remaining on east side. • Consultant Halverson explained the objective and principles that each concept sought to achieve. - • The consultants stated that neither concept is intended to be a proactive redevelopment plan, but rather a tool to guide development when a property owner would like to sell and do something different. • Associate Planner Kueitnen stated that this area is currently zoned O-R Office/Residential Transition District and allows for some medium density housing. • The Task Force supported the residential concept (Option 2), preferring to channel commercial development into the core of Downtown. w + ` Lakeville Downtown Planning Project Task Force Meeting #5 April 4, 2006 Page 3 Iberia Avenue Extension • Consultant Halverson reviewed the initial concepts and then described the evolved concepts for the Iberia Avenue Extension area. o The evolved concepts included different combinations of multiple family and medium density housing in this area. o The concepts present alternatives for the reconfiguration and enhancement of the Jaycee Park. o The southwest comer of Howland Avenue and 207th Street would be guided for commercial or mixed use development. • Consultant Fifieid noted that each concept is designed to allow Despatch Industries to remain where they are for as long as they care to be there. • Consultant Halverson clarified that the extension of Iberia Avenue is not envisioned as a divided parkway, but as a city street with on-street parking and enhanced streetscape. • The Task Force expressed support for the following: o Overall concept of extending Iberia Avenue. o Minimizing the amount of higher density housing. o Creating a variety of housing options in this area, including detached townhomes that would be more consistent with the surrounding single family neighborhoods. o Promoting. owner-occupied housing in the Downtown. • Follow-up tasks for consultants: o Explore shi$ of housing to west with enhancement of park in existing location. o Aligning Howland to the proposed Iberia extension and having Iberia connect to 210t~ Street Meeting adjourned 7:30 p.m. The next Task Force meeting will be on May 2nd at 5:00 p.m. at the Water Treatment Facility March 3, 2006 Item No. Spotlight on Business Cloverleaf Cold Storage Overview The Spotlight on Business Program is an outgrowth of the Economic Development Commission's Economic Development Strategic Work Plan that includes efforts "to inform and educate residents on benefits of commercial and industrial businesses in order to gain community support and appreciation for business growth." Cloverleaf Cold Storage will be featured at the March 6, 2006 City Council meeting. Plant Manager Roy Pepper and Marketing Director Paul Rehmke will be present to accept the award. Cloverleaf Cold Storage, located at 21755 Cedar Avenue, is a family owned and operated refrigerated and dry warehouse company. Cloverleaf began in 1934 as the Farmer's Produce Company in Sioux City; Iowa. By 1958, the company had expanded facilities to Mankato, MN and has continued to expand to a total of eleven facilities in Iowa, Minnesota, Ohio and most recently Missouri. Cloverleaf purchased the former Merillat building in 2003 and demolished a third of the former 247,000 square-foot building and replaced it with 115,000 square feet of new space for storing and shipping frozen food products later that year. In 2005, Cloverleaf completed their Phase II expansion that resulted in an additional 76,075 square-feet of freezer warehouse space being constructed. The Lakeville location is a USDA approved warehouse and offers over 3.2 million cubic feet of freezer/cooler and dry storage space. The freezer/cooler space ranges from approximately -20 degrees to 38 degrees Fahrenheit. Cloverleaf employs 37 full-time area residents. In addition to employment, Cloverleaf provides a substantial tax benefit to the community. The Dakota County Assessor has assigned an estimated market value of over $6.3 million to the Cloverleaf Cold Storage building and property. Based on current tax capacity rates, this market value will result in an estimated contribution of $139,365 in local property taxes going to support the City, Dakota County, and Independent School District 194 in 2006. Adam Kienberger Economic Development Specialist Financial Impact: $ 0 Budgeted: YIN _ Source: Related Documents (CIP, ERP, etc.): Notes: April 14, 2006 Item No. Spotlight on Business Arden Kitchens Overview The Spotlight on Business Program is an outgrowth of the Economic Development Commission's Economic Development Strategic Work Plan that includes efforts "to inform and educate residents on benefits of commercial and industrial businesses in order to gain. community support and appreciation for business growth." Arden Kitchens will be featured at the April 17, 2006 City Council meeting. EDC Member Bob Brantly will present the information on Arden Kitchens. Plant Manager David Kennedy will be present to accept the award. Arden Kitchens, located at 21150 Hamburg Avenue, is a manufacturer and packager of frozen foods for the food service industry. Located in Lakeville since the early 1970s, Arden Kitchens, formerly owned by Schreiber Foods, Inc., was purchased by Jeno Paulucci in 2002 and manufactures frozen food products for businesses such as Applebee's, Perkins and Hardee's. Widely. known for their frozen lasagna, Arden Kitchens also manufactures sauces, frozen entrees, and a variety of hand held rolled items totaling over 800 different products. With a full food science lab, Arden Kitchens develops new food recipes as well as a variety of sauces for companies all across the country and a few in Canada. Arden Kitchens produces over 17 million pounds of product per year at their Lakeville facility. Arden Kitchens employs 80 full-time area residents. in addition to employment, Arden Kitchens provides a substantial tax benefit to the community. The Dakota County Assessor has assigned an estimated market value of over $3.4 million to the Arden Kitchens building and property. Based on current tax capacity rates, this market value will result in an estimated contribution of $101,109 in local property taxes going to support the City, Dakota County, and Independent School District 194 in 2006. Adam Kienberger Economic Development Specialist Financial Impact: $ 0 Budgeted: Y/N _ Source: Related Documents (CIP, ERP, etc.): Notes: Paving the cyber sidewalks: Cities debate fiber optics Page 1 of 3 i St81'Ihlbll/116.CO111 MMNNNEAPOLIS - ST. PAUL, MINNESOTA Last update: March 23, 2006 - 11:13 PM Paving the cyber sidewalks: Cities debate fiber optics Cities are trying to decide whether they should provide faster Web connections. It's expensive, but many fear that the U.S. is falling behind. Steve Alexander, Star Tribune Metro-area suburbs, worried that their economic development could be stunted by slow Internet connections from phones and cable N, are debating whether to push for new fiber-optic networks for their communities that would be 10 times faster. "Should it be up to the incumbent [phone and cable] Intemet providers or the citizens of the city to decide our technological future? We're trying to come up with some recommendations," said Tom Garrison, communications director for the city of Eagan. Pushing fiber-to-the-home networks could put cities in the position of competing with phone and cable companies, which rely on slower copper or coaxial cable connections. There's no hint of when the companies might speed up their own networks. The cities also face the twin risks of high cost and potential obsolescence of fiber-optic networks. But very much in the back of city planners' minds is the much-publicized fact that the United States is falling behind countries such as South Korea, where fiber networks have made it the world leader in broadband use as a percentage of the population. A study published last year put the United States 12th by the same measure, although the United States has the most broadband users. As a result, some city officials believe economic development will be tied to the availability of high-speed fiber-optic Internet connections for data and for capacity-hungry entertainment offerings such as high-definition N. _ "When you look at broadband competitiveness, the U.S. clearly is slipping," Garrison said. Rather than have suburban businesses and consumers~be at a disadvantage, city officials wonder whether they should push for fiber-optic networks "in the same way cities used to pay attention to roads, sewer and electricity," he said. "Technology has become another differentiator." New fiber-optic networks can deliver speeds of 100 million bits per second to home customers, compared with abouf 8 million bits per second for the fastest consumer cable modem connections in the Twin Cities. Consumer DSL speeds are even slower; Qwest offers consumers a maximum of 5 million bits per second. Minneapolis plans to have a citywide wireless Internet network by 2008, but http://www.startribune.com/535/v-print/story/327262.htm1 3/28/2006 Paving the cyber sidewalks: Cities debate fiber optics Page 2 of 3 4 suburban municipalities say they are unsure that they want to choose that future. While it appears that wireless can provide the equivalent of today's telephone DSL (digital subscriber line) and cable modem Internet speeds at lower prices and over a broader service area, only fiber-optic cable connections to the home can boost today's speeds tenfold. Today's telephone and cable Internet services connect to the home with slower copper and coaxial cable. The trade-off is cost. For a large city such as Minneapolis, there is a huge cost difference between a wireless network and afiber-optic one. Minneapolis expects to build a $20 million to $25 million. wireless network that would cover the city border to border. The city, which has narrowed the bidding to two contractors, rejected a proposal from another company that proposed a $425 million fiber-optic network covering the same area, said Bill Beck, the city's deputy chief information officer. However, a fiber network might be more feasible in a small suburban city because fewer miles of fiber-optic cable would have to be buried to serve the city, analysts say. "The general interest infiber-to-the-home is only just starting," said Jim Erickson, president of FiberFirst, a trade organization that is .pressing suburban governments to support fiber networks. FiberFirst is supported by fiber-optic companies such as New York-based Coming Inc., Minnetonka-based ADC Telecommunications and California-based Calix Networks Inc., which in February acquired Twin Cities fiber firm Optical Solutions. FiberFirst last week co-sponsored a seminar for metro government officials to promote what it says are the virtues of fiber: greater capacity and, under the right circumstances, lower operating costs. At an earlier FiberFirst seminar, Utah-based Utopia, a wnsortium that runs a fiber broadband network for several cities, told Twin Cities officials that it sells home broadband service that is four to nine times faster than local phone or cable TV companies for prices 15 to 27 percent less. But a local telecommunications consultant said it's unclear how soon suburban consumers and businesses will need all the capacity fiber-optic networks offer. "It could be five years in some places, and 25 years in others," said Jim Farstad, whose firm, rClient, is based in Minneapolis. So far, nearly all fiber-optic network installations in Minnesota have been made outside the Twin Cities, where the new networks have less competition from phone and cable companies, said David Russell, solutions marketing director for Calix. Telephone provider Qwest and cable companies Time Warner and Comcast oppose efforts by metro cities to create competitive fiber-optic networks. http://wwwstartribune.com/535/v-print/story/327262.htm1 3/28/2006 Paving the cyber sidewalks: Cities debate fiber optics Page 3 of 3 "Our position on municipal entry [into broadband] is that it is not the proper role of govemment to duplicate services that already exist," Qwest spokeswoman Joanna Hjelmeland said. Mike Martin, executive director of the Minnesota Cable Communications Association in St. Paul, said Time Wamer and Comcast - soon to be combined in the Twin Cities --will offer the speed of fiber to the home at some undetermined point in the future because there is no demand for it now. That leaves cities puzzling over what to do. The Burnsville City Council will hear from FiberFirst, Qwest, Comcast and telephone company Frontier on Tuesday in an informational meeting. "At this point, ft's too early to say what the outcome will be," said Jim Skelly, city communications eaordinator. Dakota County is trying to decide whether it should offer the public services on its existing fiber-optic network, which links govemment centers in three cities and soon will include three school districts, said Jim Campbell, county information technology director. "We're trying to get a sense of what level of interest there is, and what direction we should go," Campbell said. Steve Alexander • 612-673-4553 ®2006 Star Tribune. All rights reserved. http://www.startribune.com/535/v-prinUstory/327262.htm1 3/28/2006 ~i Communications Office • Web site: www.deedstate.mn.us Phone: 651-297-1192 or 1-800-657-3858 • Fax: 651-215-3841 March 24, 2006 Contact: Bob Isaacson For Immediate Release 651-297-3615 JOBZ Initiative Sustains Momentum In Second Year, Passes 200 Deal Mark Direct Impact Includes 3,100 Jobs And $276 Million In Capital Investment St. Paul -Minnesota's Job Opportunity Building Zone (JOBZ) initiative continued on the fast track in 2005, passing the 200-deal mark late in the year. Two years into the 12-year life of the program, Greater Minnesota communities continue to use JOBZ incentives to attract new business investment throughout the state. In the first two years of the program, JOBZ businesses have agreed to create more than 3,100 new jobs and make $276 million in capital investments. Once those goals are achieved, JOBZ businesses expect to support an additiona14,700 jobs in other industries due to business and employee spending. Overall, JOBZ-related activity is expected to generate $180 million in personal income to the state, including the Twin Cities. And that's just the beginning: JOBZ businesses hope to top their goals by 1,200 more jobs in the coming years. "JOBZ is working and so is Minnesota," said Governor Tim Pawlenty. "Our state's future prosperity depends on the innovation of Minnesota businesses. The JOBZ program continues to be an effective tool in building a more competitive Minnesota." A second-year analysis of the JOBZ initiative, prepared by the Minnesota Department of Employment and Economic Development (DEED), shows that the tax-free development program is a key reason for business investment, confirming that 92 percent of the businesses would not have made the same investment in the same location without the JOBZ benefits. An accurate "cost/benefit" analysis is possible only for 2004, since complete records exist only for the first year of the JOBZ program. On the "cost" side, the Department of Revenue estimates that the 138 JOBZ businesses received $6.4 million in tax benefits compared with nearly 3,300 jobs and $80 million in annual wages directly and indirectly generated by the JOBZ projects. Of the 1,001 full-time jobs created by JOBZ businesses in 2004, nearly 38 percent paid wages of $15 an hour or more, far exceeding the original cumulative business goal of 14 percent of new jobs at that level. "As an economic development tool, JOBZ was designed to improve the overall standard of living in Greater Minnesota through business success and increased job opportunifies. This analysis shows that it's working," DEED Commissioner Matt Kramer said. "It's also important to note the levels of transparency and accountability that have been built into this program," Kramer said. "Along with the Department of Revenue, we've achieved a measure of accountability regarding the Costs as well as the benefits of this program. Very few other states can make that claim about their business development incentive programs." The report offers details about full-time job creation by JOBZ businesses, as well as a regional breakdown of JOBZ projects, jobs, wages and tax benefits throughout Minnesota. The full report can be viewed online at: http://www.deed.state.mn.us/bizdev/PDFs/jobzannRpt2005.pdf - end - Page 1 of 3 60YERpMBR iEpIIQtOGY Government Technology Freeing Cities From Telco and Cable Monopolies By John M. Eger Mar 18, 2006 In the early 1970s I was part of an administration that helped break up AT&T because AT&T had become an impediment to the development and nurturing of a new knowledge-based economy and society. John M. Eger, of San Diego State University is the Executive Director of the International Center for Communications, and president of the WorEd Foundation for Smart Communities. Eger headed CBS Broadcast International which he established, and was senior vice president of the CBS Broadcast Group. From 1971-1973, he was legal assistant to the chairman of the Federal Communications Commission, and from 1974-1976 served as telecommunications advisor to Presidents Richard Nixon and Gerald Ford and was director of the White House Dice of Telecommunications Policy. Eger opened the California Broadband Roundtable on March I S in San Jose with this presentation: I believe broadband today is as important as waterways, railways and highways were in an earlier era. Unfortunately, this concern, indeed urgency, is not widely held. From a policy standpoint, clearly, at the federal, state and local level, we have lost our way, much to our peril. In the early 1970s I was part of an administration that helped break up AT&T not because they didn't have the finest telephone system in the world, they did, but because AT&T had become an impediment to the development and nurturing of a new knowledge-based economy and society. Some of you may find this hard to believe, but in the 60' and even the 1970s, AT&T didn't allow French phones to be connected to its network. Such attachments, they argued, would destroy the finest telephone system in the world. It took many years of regulatory reform not to mention billions of dollars in litigation to get those French phones attached to the network to create the first specialized common carrier, known as MCI, and to give birth to teleprocessing to connect computers to the network and help usher in the modern-day Internet. Clearly we were ahead of the pack. Most countries had not yet deregulated or privatized their postal telephone and telegraph companies, or PTTs as they were known. In 1996, as you recall, we ushered in what was considered to be landmark telecommunications reform with the telecom act of that year that opened the regulatory floodgates to new entry. Wall Street quickly followed by opening its wallets to any business plan that had the word Internet attached to it. As we know now, after just a few short years, and some two trillion dollars more than it cost to build the interstate highway system most of the new competition went bankrupt, or simply died trying to find an opening. COVAD one of the new broadband local exchange carriers, as they were called said it died of a thousand cuts, referring to the difficulties they had getting the Baby Bells to sublease their facilities; a critical first step to competing in the marketplace for new information services. Today, according to the ITU or the OECD in Paris, we're either 13th or 15th, depending on how you http://www.govtech.net/magazine/story.print.php?id=98812 4/21/2006 Page 2 of 3 interpret the report in deploying broadband communications. Smaller countries like Korea, Singapore or japan, are leading the world by offering broadband (much faster] and at a fraction of the cost. Even in the Middle East, tiny Dubai which we've heard a lot about recently --boasts the lazgest Internet facility in the world, which they practically give away as in incentive to the mulfi-national and global companies as an enticement to headquarter their Middle East/North Africa [operations] there. The telcos, and now the cable companies, are clearly fighting for leadership as America's next monopoly to dominate all telecommunications. If Ed Whitacre [AT&T Chairman and CEO Edward E. Whitacre, who led the merger of SBC and AT&T] has his way, even though the modem AT&T is quite different, he would put Humpty Dumpty together again and emerge as the single largest provider. Sadly, this is not much improvement in 30 years. Instead of one large telephone company, we now have, for all practical purposes, two large entities dominating the mazket. Clearly satellites and wireless communications offer the promise of changing the shape of the market. Even the electric companies might still enter the field and provide a third and fourth entity as a counter weight to the cable and telcos. For the present, however, the cable and telcos have joined forces and are blocking what I consider to be the single largest user that must retool and reinvent itself for America to succeed, let alone survive, in the new global economy. I'm talking of course about the city. Right now in state capitols across America, legislation is being discussed or enacted to prevent the municipality [from playing] any role whatsoever in shaping its new information infrastructure. Philadelphia, as you know, announced one of the first citywide wireless initiatives in the country. Within weeks the Pennsylvania Legislature and the governor signed a bill that would preclude any other Pennsylvania city from doing the same. Over 100 other American cities have expressed the desire to provide such municipal services. Their city councils, their mayors, as well as their state legislators have threatened them. They have been told in no uncertain terms that the telecommunications business belongs to the private sector. Read that: the existing cable or telecommunications firms. Most cities already subsidized in some small way by a cable franchise aze not willing to make the investment and possibly lose that subsidy. I'm convinced most, however, are simply afraid to act in the face of such state and local obstacles. If this roundtable can do anything, we must find a way to free the cities. The city traditionally has been the center of all commerce and in the wake of a global knowledge economy, it is the cities who could be the incubators of creativity and innovation which will be the hallmarks of our success in the future. As I think you know, cities of the future aren't cities in the usual sense. As Kenichii Ohmae, authorof The Borderless Economy has put it: "There are no national economies anymore; only a global economy which no one's in charge of and a constellation of regional economies with strong cities at the core." Given this devolution of power which has occurred worldwide and a redefinition of wealth which is information broadly defined renewing and reinventing our cities is a strategy that the state of California and the country must employ. California took an important step in 1997 when Caltrans created the Smart Communities program. http://www.govtech.net/magazine/story.print.php?id=98812 4/21/2006 r Page 3 of 3 As I understand from the Caltrans folks that idea came out of the Northridge earthquake. But for the cell phone and the computer, people in the Wilson administration observed, Northridge was cut off from the mainstream of economic development. Caltrans concluded then, rather than build more roads and bridges there wasn't any more room for those anyway maybe we could begin to build information highways to ensure that what happened in Northridge would never happen again to any other California city. Frankly, I think the Smart Communities program was successful in raising awazeness. We ran out of time and we ran out of money as a new administration took the reins of power in Sacramento. But such programs can be reinstituted. Perhaps this time with more clarity and more muscle than before. Time is of the essence. As most of you know, particularly if you read Thomas Friedman's The World is Flat, Forrester Reseazch predicts we're going to lose 3.2 million jobs over the next several years. The University of Califomia at Berkeley says the figure is much greater. They predict a loss of about 10 percent of all white-collaz jobs because of globalization. That two trillion dollars we spent building the new information highways that aze connected to nothing here in the U.S, at least internationally are providing the grid for the outsourcing oflow-cost services. Friedman says it's even cheaper to outsource the font end of your order at McDonalds to Bangalore, than it is to hire someone on premises. This outsourcing, however, is not limited to low-end service jobs alone. Radiologists are now finding that under pressure from the HMOs, more hospitals and clinics are sending their X-rays and MRIs to Bangalore for processing. A radiologist in Bangalore makes about $15,000 per year. Because they're working while we're sleeping, it's not only cheaper, but more efficient for them to do the analysis. I am only touching the surface of our dilemma. We need to act. California which if it were a country would be about the sixth lazgest economy in the world can and should take the lead. Let me throw out today just a handful of the things perhaps this panel can address to help us with an agenda for moving forward. . Why doesn't the state aggregate demand by that I mean take the use of every state agency for telecommunications services and perhaps ask other local and federal agencies to join forces with it and begin creating a statewide network which others can link to provide statewide ubiquitous Internet service. I'm not advocafing it do this itself, rather that it find a willing coalition of cable, telco and other service providers. Maybe a marriage with CENIC the University-controlled gigabyte-or-bust effort. . Both from a regulatory and economic perspective develop statewide policies that develop, support and encourage municipal efforts. Cities not only need to know that it's all right to begin planning the new information infrastructure for their region, they need the economic and political incentive to do so and the support and counsel of the state. . The electrics play a lazge and promising mle in developing an alternative supplier. Here too, clarity from the PUC, the administration and the Assembly would do much to provide that support and guidance. Bohn M. Eger http://www.govtech.net/magazine/story.print.php?id=98812 4/21/2006 Page 1 of 3 BOYERNNBR TEgl19L~Y Government Technology Why Municipal Wi-Fi May Be a Bad Investment for Cities Walter White Apr Ol, 2006 This is a response by Walter White, vice president state and local government, for Verizon Communications, to a March 18 Viewpoint by John Eger titled: "Freei~Cities from Cabde and Telco Monopolies. " Firstly, let me say we have a common bond in our passion for broadband. I have opportunities to speak to state and local officials all across the country, and I often remazk to the fact broadband has quickly become a "critical infrastructure in the 21st Century." Now, if I read your article correctly, I get the unmistakable impression you believe the telecom industry is dead set against municipal networks. I'd like to take this opportunity to attempt to ratchet down the intensity of the debate a bit, perhaps to a more sober and practical discussion about whether having municipalities offer Wi-Fi makes sense. First let me briefly state Verizon's policy position on muni Wi-Fi, since I don't believe it has been accurately reflected either in the press or the blogosphere. . Verizon is not against muni Wi-Fi. . We were not the ones who inserted the muni Wi-Fi provision in the 30-page Pennsylvania legislation that set the rules for all of telecom. . We decided not to participate in the city of Philadelphia's Wi-Fi endeavor, but we have given the city a waiver so it can embark on this project. . We will work with cities to offer broadband where it makes sense. In fact, we're working with a few municipalities today in apublic-private partnership to aid them in offering local broadband services. With all of that said however, let me also be cleaz we are highly skeptical about whether muni Wi-Fi is a good idea. From our perspective, taxpayers should ask hard questions about whether pouring money into muni Wi-Fi is a good use of scarce resources. There are several reasons it almost certainly is not. First, this isn't Field of Dreams even if you build it, often they don't come. The city of Orlando shut down its system, having logged an average 27 visitors a day. Other muni Wi-Fi systems aze also struggling. While some may succeed, the many that ultimately fail will leave the taxpayers holding the bill. If a private company risks capital, private investors foot the bill, not taxpayers. From our vantage point, that's a better way to go let the private sector take the risk. Moreover, even if cities could amact users, there still may be better uses of taxpayer money than muni Wi-Fi. Economists call this the opportunity cost. Cities around the country aze making very difficult choices about what to fund and what not to fund. Very basic city services are being cut back. Is Muni Wi-Fi on a par with aid to the homeless, drug rehab, and fixing potholes on the street? That's not forme to answer for you, but it's a question that begs an answer. I will suggest my own answer. Muni Wi-Fi is at best a "nice-to-have," not a "must-have." http://www.govtech.net/news/story.print.php?id=99018 4/21/2006 Page 2 of 3 Web access is widely available to all the headline in the New York Times June 23, 2005 said it all "almost all libraries offer free Web access." What's more, 18 percent of libraries already offer free wireless access and 21 percent plan to offer it within the next year. That's in addition to the almost ubiquitous wmmercial broadband availability in cities like Philadelphia as well as the ubiquitous availability of dial-up for a-mail and Web access. The benefits of muni Wi-Fi above and beyond what's already in place simply don't live up to the enormous hype. Faster wireless connectivity is certainly good, but it's already available today from Verizon Wireless and other compefitors. Technology Challenges But there's more from our perspective, muni Wi-Fi has several technical challenges as well: . Wi-Fi is a short range technology. It operates in unlicensed bands. It's prone to interference. It's not suitable for mission-critical public safety applications. That's unlike commercial wireless service, or landline service, that operates well. Wi-Fi generations change rapidly. Sometime soon, the city will have to upgrade technology at some expense, and users who have Wi-Fi modems may have to buy new ones as well to take advantage of that upgrade. . There's no proven demand for Wi-Fi beyond wireless enablement of households and corporate campuses. There isn't a large market of people so far who've been willing to pay for Wi-Fi. Cometa went bust after a big splash and hundreds of millions in venture funding. Willingness to pay is a measure of value. That may change as wireless carriers move their mazketing and technical prowess into hybrid technology but that's going to be driven by the private market. Now let me briefly address the rationales given for muni Wi-Fi. Key rationales are affordability; economic development; lack of competitive alternatives. Let me address these in turn. First, there are plenty of alternative suppliers there's certainly no monopoly issue. In Philadelphia, Verizon covers 96 percent of the city with DSL, and Verizon wireless the entire city with its high-speed wireless service. Comcast offers broadband. Many of the customers who subscribe to broadband have their own Wi-Fi, and it is possible, as many have found, to find open hotspots. T-Mobile, Stazbucks and others offer hotspots in selected areas, and almost all hotels at this point offer some kind of broadband service. Nationwide, broadband is booming. The Internet boomed without the goverunent constructing local or national networks and continues to do so. Why is Wi-Fi which just makes that Internet connectivity wireless any different? Second, affordability may be a broadband issue for some, but is muni Wi-Fi the right' prescription? If the concern is affordability, having the government enter the business of paying for companies to build and maintain networks is not the right way to go. There are many people without the money to buy enough food, but the government typically doesn't build or run supermarkets that have free or heavily discounted food. It gives food stamps or gives money to private organizations that distribute food. If the concern is government enabling affordability, then broadband stamps would seem a better way to empower people to buy the service they need and create the demand that will stimulate the supply. I'm not advocating them on behalf of Verizon. My point is only that there are better ways to go about addressing an affordability concern than getting governments into the telecom business. Third, given all the issues discussed above with muni Wi-Fi its lack of widespread use, the availability http://www.govtech.net/news/story.print.php?id=99018 4/21/2006 Page 3 of 3 of alternatives, technical issues it's hard to see how muni Wi-Fi would be a spur to economic development. Orlando didn't find it so. That's the list of practical issues with muni Wi-Fi. Municipalities have to go into this with their eyes wide open. And although we may not always be happy if they do, Verizon will not oppose them if they choose to deploy Wi-Fi in a way that doesn't interfere with commercial services. Instead, Verizon will compete with them by offering what we think would be better service and superior functionality. Two Issues I'd like to end by discussing two issues that are important. Fast, who will guard the guazdians? • Municipalities tax wireless and wireline services heavily. There was an article recently about how cities were worried VoIP would take away city tax revenues. This raises two issues: why would the city try to put a system out there that would decrease its own tax revenues at a time when cities worry about this? And isn't there something not quite right about a municipality taxing competing services heavily and also complaining that those services aze too expensive, thus justifying large muni investments • Governments have the power to determine the terms and conditions of entry. They control permits, rights of way, access to govemment buildings. Governments control the ability of competing providers to enter the broadband mazket. Governments often have a lower cost of capital than private companies. Second point Verizon does prefer private markets to government investment. Markets are better than governments in allocating capital and figuring out the most efficient ways to deploy networks and offer customer service. Indeed, that's what has happened. We've already deployed DSL across most of our footprint, Verizon Wireless has covered most major U.S. cities with fast wireless broadband, and we're now deploying fiber to the home in lazge parts of the areas where we provide service. Other companies are pursuing similar strategies. As a result, it seems a particularly unwise time for muni Wi-Fi. Competition in broadband is intense and prices are dropping. Wireless carriers are rolling out hybrid Wi-Fi and cellular deployments which will spur private investment. So again, Verizon doesn't think all muni Wi-Fi should be illegal. But we do think it unwise. Comment From Steven Bowen: There are two very simple questions. 1. With the growing use of video for security purposes, how will the small band with of CDMA ever carry this kind of signal? 2. Since there is no hierazchy set for users in the CDMA world, it would be nice to offer a dedicated VPN to the public safety arena, who could then have full control of the Wi-Fi band if needed. As far as interference: well lets just say Verizon's current system has some room for improvement. Handoffs and pilot polution continue to grow! Walter White http://www.govtech.net/news/story.print.php?id=99018 4/21/2006 main Page 1 of 3 Olson, David L From: erica@ewald.com Sent: Monday, April 03, 2006 9:48 AM Ta: Olson, David L Subject: April-May EDAM Developer The Developer ? " Fcorrom~c t3evslapment AssocKafian c,# Mnnnesotn ApribMay 2006 Downloadaprinter- E~aivi Presents Program On Eminent Domain biendty version here. View this as a Web Eminent Domain is truly one of page here. the hot issues at the Capital this year. Hearings have already taken place many legislators plan Contents to see new restrictions on the use of eminent domain pass early in Main the 2006 Legislative Session. Last Thursday EDAM members Elam Prtse'tts_ Program heard from a panel consis&ng of t' on Eminent Domain Kathy Hahne (EDAM'S lobbyist) from Faegre and Benson, Louis Jambois, Executive Director of the From the President Association of Metropolitan Municipalities, and Pat Mascia with Duke - _ Realty spoke on behalf of NAIOP. The group discussed the Minnesota Auto Dealers Association and the Institute of Justice legislation that would r._egslativ__e.Up~iate severely limit and substantially increase the cost of eminent domain. News From EDAM has joined a coalition lead DEED by the League of Minnesota Cities and the Association of Metropolitan Municipalities to High national ra__n_kinls pass a bill that would provide attributed to DEED'g additional notice and safeguards business expa~s~on data for property owners, tighten the defnition of blight and eliminate Minnesota Werld Tr_a_d_e_ the use of eminent domain for , week; A worldof purely economic development Opportunity reasons. Attendees learned about the details of the Development proposals, the impact they could have on projects in their areas. N¢w5 We would like to extend special thanks to the panelists and to Marc Nevinski of the City of Coon Rapids and Heidi Steinmetr of the City of EIk a_ ook Annoonce_ment River (our Legislative Committee Co-Chairs) for organization this important and timely program! Bollinger Foundation Seeks.Nominaticnsfor From the President Scholars5ip Grants Rebecca Kurtz Three months into 2006, and EDAM is on track Member News for a successful ear. This ear will be an excitin ~ Y Y 9 and challenging one for everyone in economic Successful development. ordcminlu mlTS~fnha me 04/10/2006 main Page 2 of 3 .cv_ ~ 7 n~ - The Legislature is in full swing and dealing with, among other issues, ` r ' ~ potential changes to haw communities can use eminent domain. The Legislative Committee and EDAM lobbyist Kathy Hahne continue to work "kvo na~m Rcei;c~.Fi with members, and partner with NAIOP and AMM along with others, to c~,z, nn ~ , :au:r educate legislators on the use of eminent domain for economic ~5!ti~n Crea;eu development and redevelopment projects. Please continue to provide input and feedback to Kathy and the Legislative Committee as we Ccrp?; ate Real Estaie. continue to monitor this issue and work to preserve communities' abilities ,nom nos n>w s,r,ner. to use eminent domain. MSU_S GIOUn After a successful Winter Conference, the Education Committee is now kKE ArchiteG_s ~~signs finalizing details for the Summer Conference, June 21 through 23 at Hg'r.-.PSrfp~mrnce Ruttger's Bay Lake Lodge. Watch for both the Summer Conference and E!e_me ra S hr. _I lodging details, and plan to register early. Frotrtfoe As part of the Summer Conference, EDAM will he presenting its annual C v.@rs ~ ~~sr #~gr. Edie Awards. Nomination forms will be available online in just a few weeks and members will receive notification when they are available. In the 'Nrg-,c county meantime, be thinking of projects that you might want to nominate. The PartnP 5i~ ~!ccs dF3E awards are an excellent opportunity for members to recognize projects v,~it_to,~nrar G21e_Fa~c.'s, and individuals that are making a difference in our communities. I LLC encourage you to reflect on the projects you have worked on over the past year and the individuals who have helped make them a success, and take 4yright.CounJ.y a moment to recognize their efforts. We look forward to receiving the Partnership Nclds nominations and sharing the success stories at the Summer Conference. peyelgpment Sem!nar luncheon or Gqunty's Remember, this organization is yours, and I encourage you to make the 2ou6.Tiq~Sgora_ti~n most of your membership by becoming involved. It is your involvement in Paps the organization that adds value and makes EDAM successful. EDAM is an organization of 500+ members. Take advantage of the opportunities to Hay. oobps came together with other members and share ideas and experiences. $BA Names__Mn~;2sgta In addition, call or a-mail the Board with your comments and insights. With Sma!I eosin <s ~t~sc,^_ your involvement we can together continue to make EDAM more reflective ,~f_,he Year of your needs and provide real value to all members. V ccll~t Co ~ir~ns Park R caSnrzPd Vwth'Hai4r LE~OSIatlV2 ~p~~~~ AW2rS~' Legislators completed the f rst weeks of session with many evening urLen.La~~d_U, a„c hearings, lots of behind-closed-doors negotiations, and votes on several Rzde-_velopnieni; emotionally charged issues. H4igaan± V:~!age Eminent domain, large corporation health care coverage (read Wal-Mart), Baking .,ompan~go end-of-life care (response to Schiavo case), and the banning of protests at O,cen in Iv~rw~cd Young funerals are some of the hot button issues that have been the sub ect of America House and Senate hearings. Most legislators have received hundreds of post cards demanding they pass legislation placing a constitutional ban of s_~hc:_il i4!ac~spn_Piozr~ same-sex unions on the ballot this fall. E{ects Nevv Presidant Welcome to the world of election-year legislative sessions. Positively Minl7e5ota Amid this backdrop of emotionally charged issues, the govemor recently released his supplemental budget. This proposed budget is Pawlenty's Positi?gly__~4rnesota plan for spending the $8S million projected surplus. The govemor also ~:eaC•ir y t., Ph~lacehhra included the use of most of the state's tax-relief account in his spending c-r t;creNe? Glooai proposals. Rather than provide additional tax-relief with the funds, Srmgnt however, the governor advocated spending the monies on imprisoning more criminal defendants -mostly sex offenders - ($100 million) and ~ar'~h v~u rc - increasing state budget reserves ($159 million). Prsitlveiv `.linne~o2 D4/l0/2006 f main Page 3 of 3 c. s t The legislature has also worked diligently on producing a capital budget. Proposals heard by the various finance committees were sent to the News from EDAM Capital Investment Committees in the House and Senate by St. Patrick's Day -and will probably emerge from those committees to the full House and Senate by the end of March or early April. Expect to see a bonding bill ~'^'Emcc~ ` ~F t~~i~: _ that ranges from $g00 million to close to $1 billion in project funding. ,?~^ra;~ N~mica!o~s Eminent domain legislation moved swiftly through the committee process in the Senate, where it was heard in three committees. Opponents of the EDAM new restrictions were unfortunately provided limited time for their Foundation News testimony. The legislation will be acted upon on the Senate floor sometime before the end of March. A summary of the Senate bill is posted on the EDAM web site. This legislation represents drastic changes to current law. F.conr,n r GevehF~"snt Please review the summary and forward any comments or concerns to asscn~ticn ofp~1irnesgta R1arc. Nevinski, HeiC~ Ste nmetz, or i<afny Hanpa. F~~ ndati~n lip~3te - The House has spent substantially more time on the eminent domain bill, Calendar where it will travel through fve committees before being sent to the floor. Both proponents and opponents of the proposed legislation were allowed Tnirr' T ~•s;7ay;_I3i~ Gcrp many hours of Testimony. Given the complex nature of redevelopment and ~resert2ton - the use of condemnation, this testimony has allowed House members to Apri! 20, 2006 better understand the current law and the proposed changes. The legislation continues to be amended as it works through the committee process. The most current version of HF 2872 and a summary will be U A~~~~, Ycur Economy posted on the EDAM web site when available. The full House is expected 2DG@ to take up the bill in early April. Thursday, Apri! 27 UopEr.Mdwest_8dsic E:onomic Gep.zio~m_=fit Coursz July 17 through 21, 2006 04/10/2006