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06-19-01
'n i l" I f O. AM its I I I I "a- rty of Lake�rJile ��onomi De relopI Comrn ssic Regular Meeting Agenda �r Tuesday, June 0 20.01, 7:00 a m Community Devalopment,Conference Room 4 it Hall 2t� 95 Hol oke Avenue Y Y. 1 Call meeting to "bi-der ti 2 Approve May 22, 20(31 meeting minutes 35 9AA1A41?j%ViV M OO 3 5trateglc Planning 1,11 I Review ofi strategic:pianning session' I 1 1 B Ranking and Pnontization of:Strategic Issues C Development o StrateglesMorkpian Status Update on Strategic Plan items A) incentves Subcornm 11 11 i lttee 5 1Vletro East and Dakota Coup #y Economic Development Partnership Social Events 6 Adlourn� $ti TM.. A ty: 1 P t G:IAFiad\ pondev proles #slEDMOM mtgsl6JuneNO61901 agQnda dos Economic Development Commission Meeting Minutes May 22, 2001 City of Lakeville Economic Development Commission Meeting Minutes May 22, 2001 5:00 p.m. Water Treatment Facility Conference Room Members Present: Vogel,.. Emond, Tushie, Pogatchnik, Brantly, Matasosky, Schubert, Miller, Erickson, ex-officio member Bornhauser. Members Absent: None. Others Present: Robert Erickson, City Administrator; Arlyn trussing, Community & Economic Development Director; Ann Flad, Economic Development Coordinator; Jeff Lueders, Cable Coordinator; and LaDonna Boyd, Dakota Electric. 1. Call Meeting to Order. Chair Vogel called the meeting to order at 5:06 p.m. in the conference room of the Water Treatment Facility, 18400 Ipava Avenue, Lakeville. 2. Approve April 24, 2001 meeting minutes. Motion 01.17 Comms. Emond/Miller moved to approve the minutes of the April 24, 2001 meeting. Motion carried unanimously. 3. Strategic Planning: Chair Vogel indicated that Mayor Johnson provided information on the Council's priorities and a SWOT analysis was conducted at the last meeting. A new mission statement was also developed as follows: MISSION: The Economic Development Commission is committed to innovative economic growth which enhances the quality of and provides balance to the. business and residential community. Chair Vogel also indicated that each EDC member provided a list of his or her critical issues for the EDC to address. Fifty-seven critical issues were submitted as follows: • Interchange priorities for 60-70-50 • Need for major transportation arteries both city and regionally • How to provide adequate access to commercial/retail areas (ie: roads) • Interchange Upgrades (70, 60, 50) • I-35 Corridor enhancements • Need to upgrade 70&35 asap to provide better access to Airlake -costs may prevent this. • Follow plans for major east-west corridor -strategic placement. 1 G:\AFIad\Econdev projects\EDC\2001mtgs\SMay\052201 minutes.doc r Economic Development Commission Meeting Minutes May 22, 2001 • Affordability of land and major local road upgrades • Once east-west corridor has been identified by county we need to revisit proposed adjacent land uses. • Transportation - I-35 Interchanges/East/West Corridor • Infrastructure needs relative to resources • ,Commercial/retail property tax base growth may no be accomplished because of infrastructure costs. • Infrastructure needs relative to resources • Encourage investigation of all potential upgrade opportunities available in critical "business infrastructure" elements required -phone, data, etc. and promote positive outcomes for long term! • High Tech Infrastructure: sooner or later this will be an issue • High Tech Infrastructure • Technology Infrastructure • Support efforts for additional low cost housing • Shortage of affordable housing • Affordable housing -being able to finance it and provide enough • Where and who can help the City develop more affordable housing • Implementation of gateway corridor plan: no defined plan for implementation • Continue to partner with Lakeville Chamber and DLBA for promoting Lakeville's identification ie: "Where we are located" • Proximity to both metro areas • Make use of "Southern Gateway" opportunities • Financial Planning for Community -encourage community partners -schools, city, county, state, etc. to provide input to create basic financial models that can be used to visualize and measure potential threats, outcomes and overall impacts of our efforts to improve financial position of the City in the future. • What if scenario for each $ spent in Lakeville retail vs. residential vs. industrial, .etc. • Partner with schools to minimize adverse levy impacts • Working with the school district(s) • Our (EDC) budget for projects (cost vs. benefit) • Downtown viability • Long term viability of downtown - no one or entity is taking lead role • Work to retain the historical flavor of downtown area, yet develop it into a vibrant business community • Help residential population appreciate C/I residents - "P.R." for business community • Create and use aggressive innovations to .build relationship between business Page 2 of 8 Economic Development Commission Meeting Minutes May 22, 2001 r and residents • Keeping the citizens informed and accounted for on growth issues • Gaining community support for future retail/office/industrial growth • Use media tools to spur commercial growth • New Growth • The-need to encourage creative financial options to develop affordable housing and to encourage new commercial/industrial/retail growth • Remain committed to the philosophy of quality strategic growth • New growth • Continue to promote Lakeville's growth rather than be a policy maker • Ability to control growth like Heritage Commons.. Ordinance does not provide for this in other critical areas ie: 35 W Corridor. • Urban sprawl: pressure to get additional tax base may allow commercial development that we do not want in the long term. • The need to initiate and develop projects that will generate a healthy tax base • Current lack of retail • Pace growth -Allow commercial/industrial sector to keep .pace with residential • Balance between C/I .and residential tax base • How to increase the retail/commercial -tax base • Impact of property tax needs for school, city and county • Promote new growth of industrial and commercial development to enhance tax base • Tax base growth outplaced by development • Investigate/encourage expansion of Airport and rail opportunities and their impact on C/I community • Ability to upgrade airport to accommodate corporate aircraft -MAC is roadblock • Anticipate difficult city issues and develop proactive solution • Identify city issues before they become a problem CONSOLIDATED CRITICAL ISSUES The full list of critical. issues was reviewed and it was noted that many of the critical issues had similar themes. Therefore the critical issues were consolidated into the following twenty-one critical issues: • Interchange priorities for 60-70-50 • Need for major transportation arteries in city and provide adequate access to commercial/retail/industrial areas • 1-35 Corridor enhancements Page 3 of 8 Economic Development Commission Meeting Minutes May 22, 2001 • Affordability of land • Explore issues related to East-West Corridor • Encourage investigation of all potential upgrade opportunities available in critical "business infrastructure" elements required -phone, data, and other infrastructure, to promote positive outcomes for long term. • Identify solutions for affordable housing • Implementation of Gateway Corridor Plan -need defined plan for implementation • Continue to partner with Lakeville Chamber and DLBA for promoting Lakeville's identification - "Where we are located." • Make use of Southern Gateway opportunities and proximity to the metro area • Financial planning for community -encourage community partners -schools, city, county, state, etc. to provide input to create basic financial models that can be used to visualize and measure potential threats, outcomes, and overall impacts of our efforts to improve financial position of city in future. • Need to have a proactive budgeting process for EDC • Work to retain the historical flavor of downtown area, developing it into a vibrant business community and ensuring its long term viability • Inform and educate residents on benefits of C/I base to gain community support and appreciation for business growth • Develop specific marketing for commercial growth • Remain committed to policies of "quality" strategic growth • Current lack of retail • Promote growth of industrial and commercial development to encourage balance between C/I and residential tax base • Investigate/encourage expansion of airport and rail opportunities and their impact on the C/I community • Anticipate emerging/future city economic development issues. and develop a proactive solution • Encourage the use of development tools, e.g.: PUD's to integrate city design standards with new developments to achieve overall consistencies. Chair Vogel suggested a break so the EDC photograph could be taken for the State of the .City address. Chair Vogel also suggested resuming the meeting with agenda item five as LaDonna Boyd of Dakota Electric was present to speak on the issue. 5. Review and make recommendation to the City Council regarding the City of Lakeville's participation in the Dakota County Economic Development. Partnership China Trade Committee. LaDonna Boyd of Dakota Electric presented information on the Dakota County Economic Development Partnership (DCEDP) China Trade Committee. Ms. Boyd indicated that DCEDP was formed to work collaboratively on economic development issues. The China Trade Committee was formed in the fall of 2000 after a trade group from China visited Dakota County. The International Friendship City organization then pursued establishing a formal relationship with Dakota County. The County Board issued a proclamation to support the issue and to pursue trade with China. Ms. Boyd indicated that the Chinese do business with those they have relationships with, Page 4 of 8 Economic Development Commission Meeting Minutes May 22, 2001 therefore creating a Sister City relationship between Dakota County and a Chinese jurisdiction could be beneficial to Dakota County businesses. The China Trade Committee is requesting each city designate a representative to serve on the China Trade Committee and also commit $500 to support the development of a Dakota County booklet highlighting each community, which would be distributed during the China Trade Committee's visit to China. Ms. Boyd also indicated that $1000 has been committed for each city from Dakota Electric's Economic Development budget to support this effort. Ex-officio member Bob Erickson indicated that the EDC would review the request and make a recommendation to the City Council Ms. Boyd concluded by thanking the EDC for their consideration of this request. Ex-officio member Todd Bornhauser indicated that the Lakeville Area Chamber of Commerce did not feel that Lakeville was in a position to pursue trade relations. independently, therefore the Chamber has participated in the collaborative efforts of the China Trade Committee: Chair Vogel expressed his personal concerns regarding implications of encouraging trade relations with a country that has a controversial human rights and political record. Comm. Tushie questioned why the businesses in Dakota County have not committed funds to this activity. Comm. Matasosky concurred and asked why only three Lakeville businesses were listed as potential participants in this endeavor. He also questioned how business interest and participation was solicited. Ex-officio member Bomhauser indicated that one letter has been sent to the businesses and .the three listed had responded with interest. He also indicated that as the City of Lakeville grows there might be additional businesses that could benefit from the China Trade Committee activities. Comm. Brantly suggested that developing .relationships with foreign. entities is necessary in order to access their trade opportunities. He also indicated that businesses need to see a return on their investment as quickly as possible.. Businesses may not have commited funds at this time because laying the foundation .for these relationships may not be perceived by as a timely return on their investment. Chair Vogel .reported that Mayor Johnson shared his views on global trade and the China Trade Committee. According to Chair Vogel, the Mayor is very supportive of global trade efforts, however he questioned encouraging trade with one specific country without knowledge of our local business's needs and desires to pursue such trade. Chair Vogel also indicated that the Mayor echoes the concerns voiced about the human rights and .political issues in China. Ex-officio member Erickson suggested that the Chamber determine the level of interest and/or concern about this endeavorfirom its members prior to the City committing any support. Page 5 of 8 Economic Development Commission Meeting Minutes May 22, 2001 Motion 01.18 Comms. Brantly/Matasosky moved to indicate that the EDC supports exploring international trade concepts, however the EDC would like to identify the interests and needs of Lakeville businesses relevant to international trade activities prior to City participation in specific activities. 3. Strategic Planning (continued) Chair Vogel asked those present to categorize the twenty-one critical issues into several strategic work areas. These strategic work areas and .their respective critical issues will form the foundation for developing a work plan. STRATEGIC WORK AREAS The twenty-one critical issues were categorized into four strategic work areas as follows: Infrastructure • Interchange priorities for 60-70-50 • Need for major transportation arteries in the city including the need to provide adequate access to commercial/retail/industrial areas • I-35 Corridor enhancements • Explore issues related to East-West Corridor • Implementation of Gateway and Corridor Plan -need defined plan for implementation • Investigate/encourage expansion of airport and rail opportunities and their impact on the C/I community Communication • Continue to partner with Lakeville Chamber and DLBA for promoting Lakeville's identification - "Where we are located." • Inform and .educate residents on benefits of C/I base to gain community support and appreciation for business growth • Anticipate emerging/future city economic development issues and develop a proactive solution Financial • Financial planning for community -encourage community partners -schools, city, county, state, etc. to provide input to crate basic financial models that can be used to visualize and measure potential threats, outcomes, and overall impacts of our efforts to improve financial position of city in future. • Need to have a proactive budgeting process for EDC • Promote growth of industrial and commercial development to encourage balance between C/I and residential tax base Page 8 of 8 Economic Development Commission Meeting Minutes May 22, 2001 Growth/development • Affordability of land • Encourage investigation of all potential upgrade opportunities in critical "business " infrastructure" elements -phone, data, and other infrastructure, to promote positive outcomes for long term. • Identify solutions for affordable housing • Make use of Southern Gateway opportunities and proximity to both metro areas • Work to retain the historical flavor of downtown area, developing it into a vibrant business community and ensuring its long term viability • Develop specific marketing for commercial growth • Remain committed to policies of quality strategic growth • Current lack of retail • Encourage the use of development tools, e.g.: PUD's to integrate city design standards with new developments to achieve overall consistencies. Chair Vogel indicated that the strategic work areas will be reviewed at the next EDC meeting and will be taken to the City Council in July.. 6. Status Update on Strategic Plan Items: A.) HR/Labor Force Committee Ms. Flad indicated that the HR/Labor Force Committee met on Thursday, May 17, 2001 at Ryt-Way Industries at 7:30 a.m. Present were representatives from Ryt-Way, Menasha, and Parker Hannifin as well as Jennifer Petersen from the new Optimal Performance Chiropractic downtown, Todd Bornhauser from the Lakeville Area Chamber of Commerce and Ann Flad from the City of Lakeville. The Committee reviewed the merits and drawbacks of Manufacturing Technology of MN's web site: The primary drawback is that it does not list job openings but rather lists all manufacturer's and provides a link to their web site. An additional concern is that companies that are not manufacturing in nature would be precluded from using this site. The committee members determined that NationJobs.com is the most appropriate job posting web site to pursue. According to NationJobs, at least 10 companies need to participate in order for them to justify creating a specific Lakeville page on the NationJobs site. Without a critical mass of ten companies, each company could subscribe to NationJobs individually but the Labor Force/HR Committee would not have the ability to direct people to a site specifically on Lakeville jobs. The committee members also determined that a budget for advertising the. jobs web site must be created. Each committee member is responsible for researching the costs involved for a portion of the advertising. This figure would be incorporated, along with the NationJobs fee, into a total fee for Lakeville businesses to subscribe to participate. Once the total cost for advertising and for NationJobs has been established, the committee members will create a promotional piece that identifies the benefits to a business for participating in the program. This promotional material will be distributed Page 7 of 8 Economic Development Commission Meeting Minutes , May 22, 2001 to all businesses in Lakeville and subscriptions will be solicited at this time. If at least ten businesses do not subscribe, the feasibility of this project will be re-evaluated. The Labor Force/HR Committee will convene in mid-June to evaluate the status of this project and determine next steps. B.) High Tech Subcommittee Ms. Flad reported that the High Tech Subcommittee is beginning the process of surveying Airlake, Fairfield, McStop and the Lakeville Commerce Center area businesses to determine their existing and future telecommunications needs. The High Tech Subcommittee experienced a delay in getting the survey re-formatted so that it could be e- mailed and completed via computer. This delay was due to the unfortunate death of David MacKenzie, the consultant who was working with the subcommittee on the survey development and interpretation. This delay has necessitated a revision of the survey project timeline. The Subcommittee anticipates preliminary survey results by the end of June. C.) Incentives Subcommittee Mr. trussing reported that Springsted is in the process of preparing the Financial Incentives Matrix including background information. Lakeville staff and the city attorney have reviewed a preliminary copy of the document and suggested several clarifications and additions. The new document is to include changes resulting from the current legislative session (depending on timing and special session). The document is proposed to be completed in early June and the Financial Incentives Subcommittee will meet prior to the next EDC meeting to review the Matrix. Ex-officio member Erickson provided an overview of the recent decision by the Dakota County Board and City Council regarding the financing of upgrades to the County Road 60 interchange. The City will pay for the portion of the upgrades not covered by state funding in order to accomplish the upgrades to the County Road 60 Interchange in a more timely fashion than the County had originally proposed. 7. Adjourn. The meeting was adjourned at 8:10 p.m. Respectfully submitted by: Attested to: Ann Flad, Recording Secretary R.T. Brantly, Secretary Page 8 of 8 ..e ~ 3 I#~,~~~ T~o~ MEIVIflRANDUM TO: Economic.Development Commission CC: Robert Erickson, Gity Administrator -Arlyn trussing, Community & Economic Development Coordinator FR: Ann Flad, Economic Development. Coordinator Date: 6/13/01 RE: Strategic Planning - Issues Ranking At the May`EDC meeting, Commissioners categorized twenty-one critical issues into four .strategic work areas: Infrastructure, Communication, l=financial, and Growth/Development. In order to prepare for the June 19, 2001 EDC meeting, Commissioners were then asked to undertake two activities: 1.) Rank the issues. in order of importance within each of the four Strategic Work Areas, and 2.) Identify the top five most pressing issues overall for the Commission to address, based on the mission statement of the EDC. Attached is the complete list of issues and the results of the EDC's efforts. The first page shows the resul#s of members ranking of the issues within each Strategic Work Area. For .each issue, the rankings were added together and compared to the other issues within its Strategic Work Area. Because members' most important issues were identified with the: number 1 (one) and because every member ranked each issue, the issue with the lowest total score was determined to <have the highest ranking. The second page shows the members' prioritization of the most pressing issues relative to` the mission statement. Members were asked to identify the top five most pressing issues overall for the Commission to address, based on the mission statement of the EDC, with 1 (onej being the most pressing. The chart second chart attached shows members responses, For. calculation purposes only, the responses were weighted as follows: Ones received a score of 5 Twos received a score of 4 Threes received a score of 3 Fours received a score of 2 Fives received a score of`1 By ranking and prioritizing the mosf pressing issues, the fol owing strategic issues have been identified as the most critical for the EDC to address. Once the EDG approves of these issues, they will be presented: at a City Council work session. If approved` by the City Counci ,they will form the basis of the EDC's 2002-2003 Work Plan. Note: issues. not listed below.may be incorporated into the Work: Plan as tactics to address the issues below, or they may be accomplished in'conjunction with the items. below: G:~AFiad\Econdev projects\EDCC2001 mtgsl6June~Strategic Planning. issues ranking.doc Rank in Catagory Most Pressing Gr • Interchange priorities for 60-70-50 1 1 . ...ww ~ • Need for mayor transportation arteries in the city 2 3 including the need to provide adequate access to commercial/retail/industrial areas _ _ • Promote growth. of industrial and commercial 1 2 development to encourage balance between C/I and residential tax base _ . ~ . ..__..._w_.._~_ • Remain committed to policies of quality strategic 1 4 growth .._w._w _ _ . _ _ _ Finance i• Identify solutions for affordable housing. ~ 2 5 G:\AFlad\Econdev projects\EDC\2001mtgs\6June\Strategic Planning issues ranking.doc Rank rank m cataog _ .,.........~,,..~.............~......,...._....._......n ry ~ ;Interchange priorities for 60-70-50 1 2 1 2 1 1 2 1 3 1 1 1 ;Need for major transportation arteries in the city including the need to provide <ade uate access q to commercial/retail/industrial areas - 2 1 3 1 2 5 1 2 1 2 4 2 ...._~r.............._. ..............r . , .._..~...,......,.~.n..ww........f I-35 Corridor enhancements 5 6 4 5 6 6 6 5 5 4 2 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Explore issues related to East-West Corridor 3 3 2 3 3 3 3 4 4 3 5 5 Implementation of gateway and corridor Plan need defined plan for implementation 4 4 4 4 2 4 6 6 4 3 3 :Investigate/encourage expansion of airport and rail opportunities and their impact on €the C/I community 6 5 5 6 5 4 5 3 2 5 6 6 :Continue topartner wth~~Lakeville Chamber and DLBA~for promoting''Lakevlle's~~ ~ <identification - "Were we are located." t 3 3 3 2 2 1 3 3 3 3 1 1 ::Inform and educate residents on benefits of C/I base to gain community support and :appreciation for business growth............ 2 2 2 3 1 2 2 2 2 2 3 2 :Anticipate emerging/future city economic development issues and develop a proactive< ,,€solution 1 1 1 1 3 3 1 1 1 1 2 3 Financial planning for community -encourage community partners -schools, city, ;county, state, etc. to provide input to create basic financial models that can be used to >visualize and measure potential threats, outcomes, and overall impacts of our efforts to improve financial position of city in future 2 3 2 2 2 2 1 2 3 1 2 2 Need to have a roactive bud etin rocess for EDC ~ 3 2 1 3 3 3 3 3 2 3 3 3 P..................................... 9...... 9.. P.................................................................................................................. ::Promote growth of industrial and commercial development to encourage balance :between C/I and residential tax base 1 1 3 1 1 1 2 1 1 2 1 1 :Affordability. of land 7 8 6 8 8 7 1 4 2 7 6 Encourage investigation of all potential upgrade opportunities in critical "business :infrastructure" elements -phone, data, and other infrastructure, to promote positive `outcomes for Ion term ...................................................9.................~................................................................................................................................ ..................................................................< 3 2 5 1 1 7 8 2 2 1 6 5 Identify.solutions,foraffordable,housing. 2 1 4 2 5 3 5 4 3 3 8 1 <Work to retain the historical flavor of downtown area, developing it into a vibrant Ebusiness community and ensuring..its long._term viability _ 4 5 4 3 6 4 8 8 5 1 2 Develop specific marketing for commercial growth 5 6 1 7 6 2 1 6 6 7 2 7 <Remain committed to policies of quality strategic growth 1 4 2 3 4 1 2 3 1 4 3 4 x ,....w._....~,~......~...:........ :Current lack of retail 8 7 8 7 4 3 5 5 8 5 8 Encourage the use of development tools, e.g.:: PUD's to integrate city design ;standards with new developments to achieve overall consistencies. ~ 6 3 3 5 2 5 6 7 7 6 4 3 Pressing rop s Score Interchange pnorities,for 60 70 50 1 25 4 3 1 3 1 1 4 `Need for majortransportation arteries in the city including the need to provide `ade uate access to commercial/retail/industrial areas ~ 3 18 2 1 1 3 5.1 135 Corridor enhancements 5 1 Explore issues related to East-West Corridor p :;Implementation of gateway and corridor Plan -need defined plan for implementation 1 5 ::Investigate/encourage expansion of airport and rail opportunities and their impact on ahe C/I community 2 4 :`Continue to partner with Lakeville Chamber and DLBA for promoting Lakeville's identification "Were we are located." .....................~....~.......,..............~....,.....................m....w...._..w~,.....,.......:.....H...,.....~.m...: 3 3 <Lnform and educate residents on benefits of C/I base to gain community support and '.:appreciation for business growth 6 4 2 :.::..:....w....,.:.~..:...~.~.......:.,_..,:..,:.::,.,:::,.....~,..:::........:....v.:M:...,..,..,...wM~.::...:_...,.:.:..:.::.:,.:..,..:.:....,,.:...:..~..,,......,......_.~.,.,..,,.:,:,:,:...,,: .....M....:..:..:.,.~....:..:,,.,...~....~,:....::: <Anticipate emerging/future city economic development issues and develop a proactive;: solution 4 15 3 3 4 3 2 <1=inancial plartining for community = encourage ~comrrtiunity partrtefs - schools; city; ~ county, state, etc. to provide input to create basic financial models that can be used to €visualize and measure potential threats, outcomes, and overall impacts of our efforts to improve financial position of city in future. 9 3 4 2 Need to have a proactwe budgeting process for EDC 4 2 . ..M.. w.~..........,.,.~,......... _ _ Promote growth of industrial and commercial development to encourage balance :'between C/I and residential tax base 2 24 1 5 1 1 3 4 3 €Affordability of land 2 4 Encourage inVestigatiiin "of ah`pofentia(upgrade`opportuiiil:ies`in`criticai""business ' ::infrastructure" elements -phone, data, and other infrastructure, to promote positive outcomes for Ion term .....9 1 5 Identify solutions for affordable housing. 5 12 5 2 4 1 V\forkfo"i`etain`fhe"hisforic"a"i"flavor'of°downfown"area;°developing`ifirito"a"°Vitir`anf°° .business community and ensuring its long term viability 8 2 2 ................._.........._w...,.........................~....., ........._...,...~...............w . _ _ Develo s ecific marketin ......................P.....P.......~...............................~....9..for commercial growth....................... 9 1 2 ;Remain committed to policies of quality strategic growth ? 4 5 5 5 5.3 ..v_.,,.:.:...,.,..~.,:.w.~:....::~._~,..:..M.._.._..:~..:_...,..,:...:.......~,.,...w...~.ww...~..~..:,.::..v..,.... ..:...........::::.M....:..:~......v..::..,.~.....~....w....,..:..:........,....:.,:.:,.._...w.~~~_,,,..:,::..,:.:.......:_.:.,.,, €Current lack of retail p r=i~c~ur~.g~..th~~~s~'af°ry~v~`r~~pm~i~t~tonts,...e:~~::rvtst~l~~s..t.~..i~rsfe~g`~~te°'~it~~'a~si~.~... ..~.,..,...n,< =standards with new develo merits to achieve overal ...................................................................................P........................................................................._I consistencies. 1 5.2 Item ~?~e MEMCl1~~~NDUM TO: Economic Development Commission FROM: Arlyn Grossing, Community and Economic Development Director .DATE: June 12,..2001 RE: Financial Incentive Study Enclosed is the initial report from Springsted regarding the availablefinancial incentives- and how theyinterface .with the EDC plans and the Comprehensive Plan. This document is being handed out to the EDC for your information and he subcommittee will be meeting to thoroughly review the report to develop comments and recommendations that will be forwarded to the EDC for consideration at the next meeting. 85 E. SEVENTH PLACE, SUITE l00 SAINT PAUL, MN 55101-2887 651-223-3000 FAX:651-223-3002 SPRINGSTED Advisors to the Public Sector EXTERNAL MEMORANDUM TO: Arlyn Grussing FROM: Mikaela Huot DATE: June 12, 2001 SUBJECT: Financial Tools Program Attached is the final draft report for the financial tools program. Please review and if you have any questions or comments, call myself at (651) 223-3036 or Paul at (651) 223-3066. Thanks, Mikaela CORPORATE OFFICE: SA1NT PAUL, MN • Visit our website at Www.springsted.com DES MOINES, IA • MILWAUKEE, W[ • MINNEAPOLIS, MN • OVERLAND PARK, KS • VIRGINIA BEACH, VA • WASHINGTON, DC x' City of Lakeville, Minnesota Lakeville Economic Development Commission Financial Tools Program June 12, 2001 Prepared by: Springsted Incorporated 85 E. Seventh Place, Suite 100 St. Paul, MN 55101-2887 (651) 223-3000 www. springsted. com Corporate Headquarters: 85 Seventh Place East Suite 100 St. Paul, MN 55f0i-2887 651.223.3000 651.223.3002 Fax Des Moines Office: Kansas City Office: Milwaukee Office: 100 Court Avenue 7211 West 98th Terrace 8651 North Port Washington Road Suite 204 Suite 100 Suite A Des Moines, IA 50309-2200 Overland Park, KS 66212-2257 Milwaukee, WI 53217 515.244.1358 913.345.8062 414.247.8686 515.244.1508 Fax 913.341.8807 Fax 414.247.8649 Fax Minneapolis Office: Virginia Beach Office: Washington,. D.C. Office: 520 Marquette Avenue 1206 Laskin Road 2121 K Street NW Suite 900 Suite 210 Suite 800 Minneapolis, MN 55402 Virginia Beach, VA 23451-5263 Washington, D.C. 20037 612.333.9177 757.422.1711 202.261.6505 612.349.5230 Fax 757.422.6617 Fax 202.261.3508 Fax advisors C~springsted.com www.springsted.com S ti 'Y ` TABLE OF CONTENTS SECTION .......................................................................................PAGE(S) Sections Financial Tools Matrix 1 1. Tax Increment Financing 4 a. Redevelopment District 6 b. Renewal and Renovation District 7 c. Housing District 8 d. Economic Development District 10 2. Tax Abatement 11 3. Special Assessment 13 4. Municipal State Aid Street Fund 15 5. Redevelopment Grant 17 6. Minnesota Investment Fund 19 7. Industrial Development Revenue Bonds 21 a. Application through the City 21 b. Application through DTED -Small Business Development Loan Program 22 8. Economic Development Fund 24 9. Revolving Loan Fund 25 10. Community Development Block Grant 27 11. Special Service District 29 12. Transportation Equity Act for the 21st Century 32 13. Contamination Cleanup and Investigation Grant Program . 34 14. Water Bank Program (Wetland Bank) 35 15. Connection User Fees 37 ~i SPRINGSTED l~ *4~ 15. Connection User Fees 37 16. Loans for Downtown Revitalization Efforts 38 17. Park and Trail Dedication Funds 39 18. Eminent Domain 41 Appendices Appendix 1 City of Lakeville's Capital Improvement Plan......... 42 Appendix II Business Subsidy 43 Appendix III City of Lakeville's Business Subsidy Policy......... 46 Appendix IV Income Requirements for Qualified Mortgage Bond Projects 48 .Appendix V Qualified Residential Rental Project 49 Appendix VI Tourism Facility 50 Appendix VII Qualified Border Retail Facility 51 Appendix VIII Tax-Exempt Financing 52 Appendix IX City of Lakeville's Preliminary Revolving Loan Fund Guidelines 53 Appendix X City of Lakeville's Park and Trail Dedication Fund Policy 56 Appendix XI Minnesota Department of Finance Chart of the 2001 Tax-Exempt Bonding Pool 59 Appendix XII Map of Lakeville's Special Service District No. 1 60 ~i SPRINGSTED tt Financial Tools Matrix: Conditions Financial options Downtown: Preservation and growth of downtown is important to the overall health and vitality of the City. Redevelopment 1 a 1 b 2 5_ 8 9 10 11 16 _ _ New development ' 2 $ 9 11 16 ' Sernor housing t 2 7 10 11 16 .._m....__ „ , _m..._ ...Specialty retail . 1 a ~ b 2 8 9 11 16 ; i Im lement desi n standards stud Establish, promote, market 2 11 Freeway: The current freeway system can no longer meet the needs of a growing community. New interchanges need to be constructed at each of the major highways crossing 135 to serve the City's existing and future .needs. The City's and the County's Capital Improvement Plans (CIPs) contain various funding levels for freeway and interchange improvements in .addition to those below. 'See Appendix I for further information. Interchange improvements 1 a ? 2 ' 3 ~ 4 12 18 A.I - ~.w~ r_. 60 and 135 ~ ~ __w_,,.. 70 and 135 ~ _ 50 and 135 _ m..~.. _ . . _ _ F . _ _ , I Development/redevelopment along freeway ;These identified areas can not be viewed independently of one another, as their development will affect the entire 135_ corridor. They are separated here in order to maximize effiaency for describing development tools applicable to each 60 New development 1 d 2 ' 8 ~ 14 ~ 18 . v 70: New develo ment/redevelo ment 1 a 1 b 1 d 2 5 8 14 18 v___...... P . P 50: Redevelopment 1 a 1 b 1 d 2! 5 8 14 46: Redevelopment 1 a 1 b 1 d 2 5' 8 14 18 Retail Development: The premise of this issue is to enhance the linkage between Heritage Commons and Downtown... G~ SPRINGSTED Page 1 ~ i i Conditions Financial Options Downtown Redevelopment -link to i Heritage Commons 2 3 9 11 t New development in other areas ` 2 9 11 ~ . Community Enhancement: Architectural and aesthetic enhancement needs to be achieved: in Downtown and Heritage Commons. Implement Corridor/Gateway study 2 3 4 11 Implement design standards 2 3 11 ` Comprehensive trail/"greenway concepts" 2 3 11 17 I Business Attraction: Attract businesses in order to utilize the information technology proficiency that exists among residents, match Yeside~ts with available jobs, and address challenges of "commuter" syndrome... Light Industrial/manufacturing 1 d 2 6 7 8 9 , k... Hi h tech manufacturin 1 d 2 6 7 8- 9 I 9 _ _._.wg Medical facilities ( 1 d 2 6 7 8~ 9 Office Development 2 8 Business Retention and Expansion: Retention of existing core. businesses is vital to the overall success of the community, Retention 2 8 9 Expansion 1 d 2 6 7 8 9 Housing:. Full cycle housing should be available to all income and age levels. Housing stock needs to be available and maintained to attract future residents and retain existing residents of the City. ,Affordable -low to moderate income i c 2 7 10 11 Rental ' 2 11 F Owner occupied 2 7 11 16 ..Senior 2 ~ 10 11 G~ SPRINGSTED Page 2 i ~ 1 Conditions Financial Options Public/private Infrastructure: As the other conditions identified herein are met, the current infrastructure will be challenged to support future demands placed upon it. Water 2 3 15 f Sewer 2 3 15 Storm Sewer 2 3 15 Parks and Trails 2 3 17 ~.e...m, PN ...._.,,~.v. .....e.~_.„.,._,.. _.._.w F i x~ Roads 2 3 4 12 ~ ~ ~ = Rail 2 g Fiber optic 2 3 i ~ G~ SPRINGSTED Page 3 ' 1. Tax Increment Financing (Minnesota Statutes Chapter 469.174 - 469.1791) Tax Increment. Financing (T{F) uses the increased property taxes generated by new real estate development within a defined geographic area to pay for certain eligible costs associated with the new development. The value that is "captured" (i.e. the increase in value over the year the TIF district was established) generates property taxes. These incremental taxes are collected by the Authority and then appropriated to the project. The incremental taxes are used to subsidize eligible project costs such as land acquisition, demolition, public and site improvements, and related consulting and , administrative costs. The value of the property prior to development (i.e., the "non-captured" portion) continues to generate property taxes and is distributed to all appropriate, taxing jurisdictions. The defined geographic area is referred to as a tax increment financing (TIF) district and is the area from which TIF funds are generated. A TIF District is located in a Project Area or a Development District, which is the area in which TIF funds may be spent (with certain restrictions). A Project Area or Development District may be the same size as the TIF District or they may be larger than the TIF District. Also, a Project Area or Development District may contain more than one TIF District. The justification for use of TIF rests solely with the "But For" test. In order for the City to create a TIF district it must make a finding that the new development would not occur "But For" the use of tax increment financing. Counties and school districts .are particularly concerned with this finding because they will not realize any enhancement to their general tax base until after the TIF district is terminated. The term of a TIF district varies depending upon the type of district created. Project costs can be financed with general obligation tax increment bonds, non-general obligation revenue bonds, or pay-as-you-go notes. Tax increment revenues may be spent outside of the TIF district but within the boundaries of the Project Area, subject to certain restrictions. For redevelopment districts (certified after June 30, 1995), the maximum pooling percentage is 25°I°. For all other TIF districts. (certified after June 30, 1995), the maximum pooling percentage is 20%. Pooled revenue. must still be spent on TIF eligible project costs. New for 2000, an additional 10% can be pooled for low-income housing. ~i SPRINGSTED Page 4 -.t See Appendix II for business subsidy application to tax increment financing and Appendix III for the City of Lakeville's Business Subsidy Policy. ~ SPRINGSTED Page 5 r ~ 1 Types of TIF Districts: a) Redevelopment District A redevelopment district is a type of TIF district consisting of a project, or portions of a project, in which one of the following conditions exists, and is reasonably distributed throughout the district: ¦ parcels comprising at least 70% of the area of the district are occupied by buildings, streets, utilities, or other improvements, and more than 50% of the buildings, not including outbuildings, are structurally substandard requiring substantial renovation or clearance. A parcel is deemed "occupied" if at least 15% of the area of the parcel contains some type of improvement; • the property consists of vacant, unused, underused, inappropriately or infrequently used railyards, rail storage facilities, or excessive or vacated railroad right-of-ways; or ¦ tank facilities, or property whose immediately previous use was for tank facilities, have or had a capacity of more than one million gallons, are located adjacent to rail facilities, and have been removed, or are unused, underused, inappropriately or infrequently used. "Structurally substandard" is defined as buildings containing defects or deficiencies in structural elements, essential utilities and facilities, light and ventilation, fire protection (including egress), layout and condition of interior partitions, or similar factors. A building is not substandard if it is in compliance with the building code applicable to anew building, or could be modified to satisfy the existing code at a cost of less than 15% of the cost of constructing a new structure of the same size and type. At least 90% of the tax increment from a redevelopment district must be used to finance the cost of correcting conditions that allow designation as a redevelopment district. The maximum duration of a redevelopment district is 25 years from receipt of the first tax increment. ~i SPRINGSTED Page 6 1 b) Renewal and Renovation District A renewal and renovation district is a type of TI F district consisting of a project, or portions of a project, in which one of the following conditions exists, and is reasonably distributed throughout the district: ¦ Parcels comprising at least 70% of the area of the district are occupied by buildings, streets, utilities, or other improvements. A parcel is deemed "occupied" if at least 15% of the area of the parcel contains some type of improvement; ¦ at least 20% of the buildings are structurally substandard; and ¦ at least 30% of the other buildings require substantial renovation or clearance to remove existing conditions such as: inadequate street layout, incompatible uses or land use relationships, overcrowding of buildings on the land, excessive dwelling unit density, obsolete buildings not suitable for improvement or conversion, or other identified hazards to the health, safety, and general well-being of the community. "Structurally substandard" is defined as buildings containing defects or deficiencies in structural elements, essential utilities and facilities, light and ventilation, fire protection (including egress), layout and condition of interior partitions, or similar factors. A building is not structurally substandard if it is in compliance with the building code applicable to a new building, or could be modified to satisfy the existing code at a cost of less than 15% of the cost of constructing a new structure of the same size and type. At least 90% of the tax increment from a renewal and renovation district must be used to finance the cost of correcting conditions that allow designation as a renewal and renovation district. Maximum duration of a renewal and renovation district is 15 years from receipt of the first tax increment. ~ SPRINGSTED Page 7 1 -~t c) Housing District A housing district is a type of TIF district consisting of a project intended for occupancy by persons or families of low and moderate income. Low and moderate income is defined in a number of federal, state and municipal legislation. A project does not qualify if the fair market value of the improvements, constructed for uses other than "low and moderate income housing", are more than 20% of the total fair market value of all the planned improvements. The fair market value of the improvements may be determined using the cost of construction, capitalized income, or any other appropriate method of estimating market value. For owner occupied residential property, 95% of the housing units must be initially purchased and occupied by individuals whose family income is less than or equal to the income requirements for qualified mortgage bond projects under section 143(f) of the Internal Revenue Code (See Appendix IV). The income requirements under this code are met only if all owner-financed provided under the issue is provided for mortgagors whose family income is 115 percent or less of the applicable median family income. For residential rental property, the property must satisfy the income requirements for a qualified residential rental project as defined in section 142(d) of the Internal Revenue Code (See Appendix V). A rental property also satisfies the above requirements if 50 percent of the residential units in the project are occupied by individuals whose income is 80 percent or less of the area median gross income. In addition, a TIF district may be designated a "qualified housing district" if (1) the rental units benefited from tax increment financing meet all the requirements for a low income housing credit or (2) at least 95% of the owner occupied units benefited from tax increment financing are purchased by families at or below 70% of median income. The above requirements for a housing district apply for the duration of the TIF district. Failure to comply results in a decrease in the duration of the district from the maximum of 25 years from receipt of the first tax increment to 8 years from the receipt of the first increment. If at the time of noncompliance, the district has exceeded the duration limit of 8 years, the district must be decertified effective for taxes assessed in the next calendar year. The City of Lakeville has a zoning ordinance to give exclusions for affordable housing. Housing that meets the Metropolitan Council's ~i SPRINGSTED Page 8 -i livable communities criteria for affordability may by exempted from the following subsections of the ordinance: 1) Unit Construction: Specific requirements pertaining to subdivision requests, decks or porches, minimum overhang, and exterior building finish. 2) Garages: Each dwelling unit must include attached garage with specific standards. 3) Storm Shelter: Storm protection must be built either internally or as a separate structure based upon Federal Emergency Management Agency (FEMA) guidelines. 4) Landscaping/Screening/Lighting: Specific requirements pertaining to the landscaping of surrounding areas, screening of outdoor storage areas, and meeting minimum landscape values. 5) Additional Requirements: 10% of the gross development area must be in usable open space and recreational use for the project residents. The housing is exempted by administrative permit, provided guarantees satisfactory to the City are in place to ensure that "for sale" housing will meet the requirement for initial sales and "for rent" housing will meet the requirement for the initial ten year rental period. ~i SPRINGSTED Page 9 t Y ~ d) Economic Development District An economic development district is a type of TIF district consisting of a project not meeting the requirements found in the definition of any other type of tax increment financing district, but which the authority finds to be in the public interest because: ¦ it will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality; ¦ it will. result in increased employment in the state, or ¦ it will result in preservation and enhancement of the tax base of the state. Tax increments from an economic development district must be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or other assistance in which at least 85% of the square footage of the facilities to be constructed are used for any of the following purposes: 1) Manufacturing, production, or processing of tangible personal property; 2) warehousing, storage and distribution of tangible personal property, excluding retail sales; 3) research and development related to the activities listed in 1) or 2) above; 4) telemarketing if that activity is the exclusive use of the property; 5) tourism facilities (as defined in M.S. Section 469.174, Subd. 22 -see Appendix VI) -not applicable to Lakeville; 6) qualified border retail facility (as defined in M.S. Section 469.176, Subd. 4c -see Appendix VII) -not applicable to Lakeville; or 7) space necessary for and related to the activities listed in 1) through 6) above. In addition to the uses specified above, tax increments may also be used to pay for excessive site preparation and public improvement costs in economic development districts containing bedrock soils conditions in 80% or more of the acreage of the district. Maximum duration of an economic development district is 9 years from the date of receipt of the first tax increment or 11 years from the date of plan approval. ~ SPRINGSTED Page 10 i~ i~ 2. Tax Abatement (Minnesota Statutes Chapter 469.1812-1815) Minnesota Statutes refers to tax abatement as the capture or deferral of property taxes. Under Minnesota law, taxes due on real property subject to tax abatement must still be paid as due. If tax abatement is in place, the appropriate portion of the taxes can be captured and applied to development purposes. The captured taxes must be used to offset the costs agreed to under an abatement agreement. Tax abatement can be used to capture taxes on land and existing buildings as well as new improvements. Limited restrictions exist on the end use and current use of tax abatement. The maximum aggregate amount of abatement for a political subdivision is the greater of 5% of the current tax levy or $100,000. Examples of the use of tax abatement include, but are not limited to: ¦ Commercial ¦ Retail ¦ Industrial Cities, counties, towns, and school districts all have the authority to grant abatements. In addition, the county and school district affected by the abatement have the option of declining participation. If one of the jurisdictions should choose to decline, the maximum duration of abatement is 15 years. In the case in which the city (or town), county, and school district all participate, the maximum duration of abatement is 10 years. In order for a city, town, county, or school district to utilize tax abatement, the following findings must be made: ¦ The benefits gained must equal or exceed the cost to the political subdivision; and ¦ it must be in the public interest because it does one of the following: 1. Increases or preserves the tax base. 2. Provides employment opportunities 3. Provides or helps acquire or construct public facilities 4. Helps redevelop or renew blighted areas 5. Helps provide access to services 6. Finances or provides for public infrastructure ~ SPRINGSTED Page 11 7' The abatement approval process is much simpler than tax increment and consists of the following steps: calling for a public hearing, publishing a notice of the hearing, conducting the hearing, and passing the abatement resolutions. Dollars generated through abatement carry a minimum number of spending restrictions compared to tax increment. See Appendix II for business subsidy application to tax abatement and Appendix III for the City of Lakeville's Business Subsidy Policy. ~i SPRINGSTED Page 12 3. Special Assessment (Minnesota Statutes Chapter 429.01-429.31) Special assessments are an indirect form of taxation. They are a required charge on selected properties for a particular improvement or service that benefits the owners of the selected property. Special assessments have three distinct characteristics. 1) They are a required lery a city uses to finance a particular public improvement program. 2) The city levies the charge only against those particular parcels of property that receive some special benefit from the program. 3) The amount of the charge bears a direct relationship to the value of the benefits the property receives. Special assessments apply only to real estate. Examples of public improvements that cities may finance through special assessment levies are: street and sidewalk improvements; storm and sanitary sewer systems; steam heating mains; street lighting systems; waterworks systems; parks and playgrounds; and recreational facilities. Additional public improvements include: street trees; dikes and other flood control works; retaining and area walls, including highway noise barriers; malls, plazas, or courtyards; district heating systems; fire protection systems; highway sound barriers; gas and electric distribution facilities; and parking lots. There are several issues to consider with special assessment financing. One of the key advantages to special assessments is that by charging the property owner for the benefit received, they prevent or minimize the possibility that a property owner will reap a financial profit from the improvement at the expense of the general taxpayer. Areas of discussion include: ¦ Special assessments are a means of raising money outside general city tax sources. ¦ Special assessment bonds do not count toward statutory debt limitations. ¦ Special assessments provide a means of levying charges for public services against property otherwise exempt from taxation. ¦ Special assessments lower the cost to the community of bringing undeveloped land into urban use, and of increasing the usefulness of urban land. Other issues regarding special assessments include: ~ SPRINGSTED Page 13 y~ ¦ Special assessment administration can be difficult -the administrative procedures require careful execution in order to avoid court litigation. ¦ Cities have frequently used special assessments to underwrite premature public improvements. ¦ Because the city generally bears some of the cost of every public improvement, land speculators sometimes urge councils to undertake unjustifiable special assessment programs. ¦ The availability of special assessment financing often tempts city officials to underwrite the cost of governmental programs that should be an obligation of the entire city. ¦ The City has the burden of proof to show that there is benefit to the property at least equal to the amount of .the special assessment. Two serious financial problems from special assessments can occur if the city does not conform to a long-term city financial and capital improvements planning program. They are: ¦ If the .city frequently undertakes special assessment. bond issues backed by the full faith and credit of the city in an unplanned manner, city credit might be overextended, resulting in higher interest charges on all city and school district borrowing. ¦ If special assessments, along with regular property taxes, become too heavy a burden on individual property owners, they will encourage tax delinquency and imperil the city's credit and borrowing position. The City of Lakeville currently uses special assessments as a financial tool. The special assessments are negotiated prior to development for specific public improvements. Letters of credit back the repayment. This helps to address appeals and timely payment issues. ~ SPRINGSTED Page 14 1 F a ~ 4. Municipal State Aid Street Fund (Minnesota Statutes Chapter 162) Eligibility for the Municipal State-Aid Street Fund (MSA) is limited to cities with a population of 5,000 or more. Presently about 125 cities in Minnesota participate in the system. The MSA system consists of over 2,200 miles out of a total 16,000 miles of city streets in the state. Each MSA City may only have 20 percent of its total street miles in the state-aid system. The source of funding is the state gasoline tax. The City of Lakeville may use the fund as provided by law for the construction, improvement, and maintenance of municipal state-aid streets. The legislature may authorize municipalities to use a part of the fund in the construction, improvement, and maintenance of other municipal streets, trunk highways, and county state-aid highways within the counties in which the municipality is located. The statutory formula for dividing the MSA fund is based on population and money needs. One-half the fund is divided according to population and the other half according to each city's money needs for its MSA streets. The money needs are based on the costs of reconstructing the roads. over a 20-year period. The apportionment to each city also depends on how much money is available in the fund, which varies from year to year. For example, in the year 2001, the City of Lakeville received the following apportionment: ¦ $24.68 per $1,000 needed for road construction, and ¦ $16.30 per person based upon population estimates. This gave the City a total of $1,717,389 for the year. What follows is a chart that shows the amount of MSA funds Lakeville has received over the past 5 years. ~ SPRINGSTED Page 15 ~ ~ f Lakeville MSA Funds 1996-2001 Population Construction T Year Apportionment. Apportionment ' Total 1996 $507,335 $812,617 $1,319,952 .....r....._ ,1,997 513,959 761,214 1,275,173 1998 _ 548,071 742,153 1,290,224 1999 .581,655 746,132 1,327,787 2000 627,790 925,708 1,553,498 2001 ~ 678,214 1,039,175 1,717,389 In 2001, the City of Lakeville received $1,717,389. $1,380,428 was requested as advance payment and all but $41,876. of that amount has been pledged toward eligible or approved projects. The estimated amount for 2002 will not be available until October 2001, but it is projected that it will be in the range of $1.7 million. No requests have been made for advance payments of the 2002 MSA allocation. ~ SPRINGSTED Page 16 5. Redevelopment Grant (Minnesota Statutes Section 116J.561 -116J.567) The Minnesota Department of Trade and Economic Development (DYED) offers grants to development authorities to assist with costs related to redeveloping old industrial, residential or commercial properties. The program only applies to sites where there was a past use and the need to "recycle" the land for a more productive use exists. Grants can pay for land acquisition, demolition, infrastructure improvements, ponding, environmental infrastructure and other costs on sites where a subsequent redevelopment will occur. Eligible applicants are development authorities, including cities, counties, port authorities, housing and redevelopment authorities, and economic development authorities. Examples of eligible costs include land .acquisition, demolition, infrastructure improvements, ponding, environmental infrastructure and other eligible redevelopment costs. Grants pay up to 50 percent of the redevelopment costs for a qualifying site. There is a 50 percent local match from the eligible applicant. The program statute directs DYED to give priority to projects with one or more of the following characteristics: 1) The need for redevelopment in conjunction with contamination remediation needs. 2) The redevelopment project meets current tax increment financing requirements for a redevelopment district and tax increments will contribute to the project. 3) The redevelopment potential within the municipality. 4) The proximity to public transit if located in the -Metropolitan Area. 5) Multi-jurisdictional projects that take into account the need for affordable housing, transportation and environmental impact. 6) Job creation. A restriction to the grant is that at least 25 percent of the funds must be awarded outside the Twin Cities Metro Area, unless an insufficient number of applications are received. The average amount granted per project is $500,000 to $750,000. The Legislative session had not ended at the time of writing this ~i SPRINGSTED Page 17 report and the budget is yet to be determined, but it appears that there will not be an amount budgeted to the Redevelopment Grant Program for the fiscal year 2001/02. The Redevelopment Grant Program operates on asemi-annual grant cycle. Deadlines for applications are October 1 and April 1 of each year. See Appendix II for business subsidy application to the Redevelopment Grant program and Appendix III for the City of Lakeville's Business Subsidy Policy. ~ SPRINGSTED Page 18 1 ~ 1 6. Minnesota Investment Fund (Minnesota Statutes Section 116J.8731) The purpose of the Minnesota Investment Fund (MIF), provided ' through the Department of Trade and Economic Development (DYED), is to create new and retain the highest quality jobs possible on a state wide basis with a focus on industrial, manufacturing and technology related industries. It is also intended to increase the local and state tax base and improve the economic vitality for all Minnesota citizens. Grants are awarded to local units of government who provide loans to assist expanding businesses. Eligible applicants include cities, counties, townships, and recognized Indian tribal governments. All projects must meet minimum criteria for private investment, number of jobs created or retained and wage thresholds. Eligible projects include loans for land, buildings, equipment and training. Funds may also be used for infrastructure improvements necessary to support businesses located or intending to locate in Minnesota. Working capital, retail business and industrial park development are ineligible costs. $500,000 is the maximum amount available and only one grant per state fiscal year can be awarded to a government unit. In addition, at least 50% of total project costs must be privately financed through owner equity and other Lending sources. Most applications selected for funding have at least 70% private financing. The Government unit keeps the first $100,000 repaid on the loan and the remainder goes back to DYED. Many communities use this money to capitalize a revolving loan fund. The current budget for MIF is approximately $4,000,000 per year from the State and $3,500,000 of federal funds, which totals $7,500,000 of funding available. The interest rate is negotiated. Real estate can have a maximum term of 20 years and machinery can have a maximum term of 10 years. Applications are accepted on a year-round basis using the Business and Community Development application. The approving authority is DYED. The funds are disbursed as the costs are incurred but prorated with other sources of funding. ~i SPRINGSTED Page 19 See Appendix II for business subsidy application to the Minnesota Investment Fund program and Appendix III for the City of Lakeville's Business Subsidy Policy. ~i SPRINGSTED Page 20 k t 1 1 7. Industrial Development Revenue Bonds (Minnesota Statutes Chapter 474A) There are two options for.. a manufacturing business to utilize Industrial Development Revenue Bonds .(IDBs), which are a form of tax-exempt financing. The first would be to apply to the city directly for assistance and the second would be to apply to the Department of Trade and Economic Development (DYED). In the latter instance the City would not be directly involved in the process. a) Application Through The City Industrial Development Revenue Bonds (IDBs) allow private borrowers to finance the construction, renovation, or equipping of manufacturing facilities. A private borrower can be a company or .corporation, a partnership, an individual, or a joint venture. A manufacturing facility is defined as any facility used in the manufacturing or production of tangible personal property, including the processing resulting in a change in the condition of such property. It also includes facilities which are directly related and.. ancillary to a manufacturing facility if such facilities are located on the same site as the manufacturing facility and not more than 25% of the net proceeds of the bond issue are used to provide such facilities. These ancillary facilities can include office space, warehousing, parking facilities, etc. IDBs can provide the borrower with a complete financing package. IDBs can finance the costs of the entire project including the acquisition of land, the construction of a new facility, the renovation or expansion of an existing facility, and the purchase of new equipment. Additionally, IDBs may be used to refund existing revenue bonds. Research and development facilities, warehousing, -and retail space cannot be financed through the use of Industrial Development Revenue Bonds. Some rules and restrictions that apply to IDBs financing include: ¦ 95% of the bond proceeds must be used for a manufacturing facility. ¦ Up to 2% of the bond proceeds may be used to finance the costs of issuance. ¦ All of the bond proceeds must be used within three years. ¦ Bond proceeds may not be used to acquire used equipment. ¦ Only funds expended 60 days prior to or any time after the adoption of the initial resolution can be paid with bond proceeds. ~ SPRINGSTED Page 21 4 ~ ¦ IDBs will retain their tax-exempt status provided that all capital expenditures of the borrower, from all sources, at the location of the capital improvement project, do not exceed $10 million. That amount covers asix-year period beginning three years prior and ending three years after the date of issuance. ¦ The aggregate amount of tax-exempt bonds allocated to any one borrower or single tax payer cannot exceed $40 million. The average maturity of the bond issue may not exceed 120% of the average useful life of the assets being financed. The term of the bond issue is negotiable in order to conform to the needs of the borrower. b) Application Through the Department of Trade and Economic Development (DYED) -Small Business Development Loan Program The Small Business Development Loan Program through DIED provides loans to industrial, manufacturing or agricultural processing businesses for land acquisition, building construction or renovation, machinery and equipment. Projects must enhance the local tax base and create or retain jobs. The Minnesota Agricultural and Economic Development Board (MAEDB) makes small business loans through the issuance of industrial development bonds backed by a state- . funded reserve of 25%. Eligible applicants need to be manufacturing and industrial businesses located or intending to locate in Minnesota, as defined by Small Business Administration size and eligibility standards; generally, those with 500 employees or fewer. The minimum requirements for a small business development loan program are new capital investments resulting in a significant number of new jobs and other beneficial economic impacts. Eligible projects include land acquisition, building, machinery and equipment; building construction and renovations; development costs such as engineering, legal and financial fees. Working capital and refinancing are not eligible. There is a minimum of $500,000 to a maximum of $6 million available. Generally, 20% of the project costs must be privately financed through equity or other sources; 25% is required on equipment transactions. ~i SPRINGSTED Page 22 ~ i • 9 The interest rate is at market rate for similar securities at the time bonds are sold. Rates are fixed for the term of the loan. Real estate has a maximum term of 20 years and equipment has a maximum rate of 10 years or 80% of useful life, not to exceed weighted average useful life of assets financed. Applications are accepted on a year-round basis using the Business and Community Development application and must be received by the first of each month to be considered at that month's MAEDB meeting. The approving authority is the Minnesota Agricultural and Economic Development Board. The .funds are disbursed upon execution of the required loan documents and sale of the bonds. See Appendix VIII for a further description of tax-exempt financing and the various types of financing. See Appendix XI for a chart showing the Minnesota Department of Finance's allocation of the tax-exempt bonding pools. ~i SPRINGSTED Page 23 1 8. Economic Development Fund An Economic Development Fund (EDF) is an internally created account used to provide a source of funds for various economic development and redevelopment related activities. The EDF's most significant benefit is its flexibility, with the City Council or development authority having complete control over the expenditure of dollars from the fund. An EDF provides the necessary "working capital" to meet the community's economic development needs. The recommended process for establishing an EDF involves adopting a policy governing its use and identifying methods of capitalizing the fund. Other cities have capitalized such a fund through proceeds from a general levy, EDA/HRA levy, land sales, administrative fees charged on conduit borrowings, or other administrative fees. Use of tax abatement (on new value) to capitalize an EDF can also be very effective and have minimum affect on the local taxpayer. See Appendix II for business subsidy application to economic development funds and Appendix III for the City of Lakeville's Business Subsidy Policy. ~ SPRINGSTED Page 24 9. Revolving Loan Fund The City of Lakeville has a preliminary Revolving Loan Fund (RLF) policy that needs to be formally approved by the City Council. See Appendix IX for a complete version of the policy. The Revolving Loan Fund was initially capitalized through a grant from the Department of Trade and Economic Development. That money was to be used to assisf a local company. As of January 1, 2001, the City of Lakeville has a Revolving Loan Fund (RLF) with a current balance of $84,557. The purpose of this fund is to leverage private capital for manufacturing and commercial development. Small business and manufacturing industries are the primary focus for retention, expansion, and attraction objectives. Loans made with RLF funds will address the high cost and short supply of capital for business development by providing flexible loan terms. RLF funds will increase the accessibility to capital and provide an additional incentive to financial institutions to make loans to businesses that otherwise they would be hesitant to make loans to. The types of loans will be subordinated to private sector lenders in order to encourage their involvement. RLF loans will be offered at below-market interest rates with flexible terms geared to the specific needs of the small business. Uses of the proceeds will include fixed assets and working capita(, but wil( prohibit refinancing. Loans made from the RLF fund must identify a public purpose based on the importance and benefit to the community from all perspectives, retention of existing jobs, and job creation when applicable on a case- by-case basis. Eligible costs include real property, machinery and equipment. Assets pledged as collateral must be approved by both the City and the participating private financial institutions. Maximum term for repayment of loans for working capital is 5 years, equipment is 10 years, and real estate/buildings is 15 years. Payments will begin within 45 days of note and will normally be based on equal principal and interest payments. However, for projects where first year cash flow is tight, the City may defer principal payments for up to 12 months. All loans will have a call provision in which immediate repayment is required for businesses leaving the area. Loan applicants must demonstrate an acceptable level of project equity as determined by the City. ~ SPRINGSTED Page 25 1 I ~ r All applicants must provide current financial records and a proforma to the City. The proposed project must be consistent with the City's Business Subsidy Policy. See Appendix II for business subsidy application to revolving loan funds and Appendix III for the City of Lakeville's Business Subsidy Policy. ~i SPRINGSTED Page 26 10. Community Development Block Grants Congress authorized the Community Development Block Grant (CDBG) Program in 1974 and it. The purpose is to provide decent housing, a suitable living environment, and expanded economic opportunities to low and moderate income persons. The U.S. Department of Housing and Urban Development (HUD) administers the program. CDBG funds are distributed to metropolitan .entitlement cities (50,000+ pop.), urban entitlement counties (200,000+ pop.), and states. Dakota County, with a 2000 population of 355,904, has been classified as an urban county since 1984. The Entitlement Program receives 70% of total CDBG appropriations. The state allocation is known as the "Small Cities" program. The expenditure of CDBG funds must meet at least one of the following three national objectives: 1) benefit low and moderate income persons, 2) aid in the prevention or elimination of slums or blight, and 3) meet an urgent community development need. Dakota County contracts with the Dakota County CDA to administer the CDBG program. All cities and townships are "subrecipients" or "subgrantee's" of the CDA, which requires each one to follow HUD rules and regulations. Dakota County allocates its CDBG funds based on a 1983 allocation plan that divides the county into four districts. Lakeville is one of four cities in District No. 4. District No. 4 receives approximately 20 percent of the total subrecipient allocation. The district allocates its funds based on the following formula: ¦ 50% of the funds are divided equally into four parts, providing Lakeville with $39,977 for FY01; and ¦ 50% are divided based on HUD's formula split for each city, providing Lakeville with $69,080 for FY01. This allocation provides Lakeville with $109,058 in FY01, 34% of District No. 4's total allocation. The HUD allocation for Dakota County totaled $2,110,000 for FY01. The average annual increase in the CDBG program allocation for Dakota County has been 3.5% since ~i SPRINGSTED Page 27 1985. Although future allocations are uncertain with each new administration, astraight-line forecast using this average would give Lakeville nearly $125,000 by 2005. A minimum of 70% of CDBG funding must principally benefit low and moderate-income persons, and a maximum of 15% of funding may go to public service activities (e.g., childcare, job training, or substance abuse). Lakeville's predominant use of CDBG funds during the past ten years has been dedicated to affordable housing. Lakeville CDBG Activities 1991-2001 m___ . t 1991 ;Site Acquisition Senior Housing (Gram Silos by Winsor Plaza) $ 98,335 1993 Clearance -Senior Housing (Grain Silos) ' $ 90,238 Housing Rehabilitation Loans ; $ .60,000 $ 150,238 1995 ..Site Acquisition -Family Housing $ 165,588 E . 1997 Downtown Parking Study $ 30,000 Watermain Extension (Econ. Dev.) $ 98,382 CAC Support (Public Service) $ 8,700 Meals on Wheels (Public Service) $ 6,430 OWOBOPTE -New Facility $ 9,500 _ $ 153 012 1998 ~ Site Acquisition , Family Housing (Originally Rosemount's Allocation) $ 147,404 _ _ _ _ _ 1999 Clearance -Senior Housing $ 52,310 Site Acquisition -Senior Housing ; $ 51,114 $ .....103,424 2000 Downtown CodeJmprovements $ 70,000 Site Acquisition -Family Housing $ 34,819 _ $ 104,819 2001 Site Acquisition -Family Housing $ 109,058 Total ~ $1,03`1,878 ~i SPRINGSTED Page 28 11. Special Service District (Minnesota Statutes Chapter 428A.01 - 428A.21) Minnesota Statutes Chapter 428A defines a special service district as a specific area within the city where special services are rendered and the costs of the special services are paid from revenues collected from service charges imposed within that area. The service charges can be fixed on any equitable basis, but shall be reasonably related to the special services provided and shall be as nearly as possible proportionate to the cost of furnishing the service. The 1996 Legislature authorized certain cities to create special taxing districts to finance improvements and maintenance activities in commercial areas without special legislation. The governing body of a city may adopt an ordinance establishing a special service district. Only property that is used for commercial, industrial, or public utility purposes, or is vacant land zoned or designated on a land use plan for commercial or industrial use and located in the special service district, may be subject to the charges imposed by the city on the special service district. Other types of property may be included within the boundaries of the special service district but are not subject to the levies or charges imposed by the city on the special service district. Two major advantages arise from forming special service districts. The first is that special service districts work financially when other traditional public finance options may not. For example, upgrading or replacing public improvements in downtown areas do not lend themselves well to special assessments, user charges or jurisdictional-wide property taxes. Oftentimes, the financing of downtown improvements are politically brokered packages of all three revenue sources, most often arrived at over an extended timeframe. Special service districts tend to more closely match the beneficiaries of the improvement with the payers. The other major advantage is that special service districts provide a new revenue source to fund operating costs. If a special service district requires services beyond those provided to all other property owners, such as police patrol, snowplowing, street lighting, open space maintenance, or promotional activities, the costs of these .services can be funded through the district and not through the city's general fund. In times of constricting general fund revenues, a new funding source that closely matches costs can provide an opportunity to local officials to challenge a specific group of property owners demanding special services. ~ SPRINGSTED Page 29 , The primary disadvantage of special service districts lies with its creation. The process for using it is complicated. A city cannot initiate the process to create a district unless it is petitioned to do so. Property owners representing 25% or more of the net tax capacity and 25% of the land area in the district subject to the service charge must sign the petition. The process to impose the service charge is subject to the same petition requirements. The petition only starts the process. Following the receipt of the petition, the city schedules a public hearing. After the hearing, if the city decides to create a district or impose the service charge, then a copy of the summary of the ordinance or resolution taking the action must be mailed to the same property owners in the district notified of the hearing within five days of adoption. The resolution or ordinance may not take effect for at least 45 days. During that period, the action may be vetoed if property owners representing 35% or more of the net tax capacity and 35% of the land area in the district subject to the service charge file objections. If a service charge is initially proposed and approved for amulti-year period, then the second and subsequent years are not subject to petition and veto. The City of Lakeville created Special Service District No. 1 bounded by Holyoke, Holt, and Howland Avenues from 202"d Street West on the north to 210th Street West on the south. See Appendix XII for a map of the special service district. Housing Improvement Area Minnesota Statutes Chapter 428A.11- 428A.21 A housing improvement area is a form of special service district, but pertains to housing improvements rather than business improvements. A "housing improvement area" is a defined area within the city where housing improvements are made or constructed and the costs of the improvements are paid in whole or in part from the fees imposed within the area. The City would establish a district by ordinance and list the specific housing improvements to be made. Improvements may include those to common elements of a condominium or other common interest community. A "housing unit" is considered aone-dwelling unit, or apartment that is occupied by a person or family for use as a residence. ~ SPRINGSTED Page 30 A housing improvement area cannot be established unless owners of 25 percent or more of the housing units that would be subject to fees in the proposed housing improvement area file a petition requesting a public hearing on the proposed action with the City Clerk or other appropriate official. In order to establish a housing improvement area, the city must adopt an ordinance that includes the following: 1) description of the portion of city included in the area; 2) basis for imposition of the fees; 3) number of years the fee will be in effect; and 4) designation of implementing entity In addition, the ordinance must include findings that without the housing improvement area, the condominium associations or housing unit owners could not make the proposed improvements, and the designation is needed to maintain and preserve the housing units within the housing improvement area. The ordinance may not be adopted without a public hearing. Within 30 days of adoption of the ordinance, the governing body shall send a copy of the ordinance to the Commissioner of Revenue. Notice of the hearing must be published at least seven days before the date of the public hearing, and notice must be sent to the owner of each housing unit within the proposed area at least seven days before the hearing. An .implementing entity may also impose a fee, following a similar process to the establishment of a housing improvement area, on the housing units within the housing improvement area at a rate, term, or amount sufficient to produce revenue for the following: ¦ housing improvements in the area; ¦ reimbursement to the entity for advances made to pay for housing improvements; or ¦ payment of principal, interest, or premiums on bonds issued. Each condominium association located within the housing improvement area must submit a copy of its audited financial statements by August 15 of each year to the implementing entity. ~ SPRINGSTED Page 31 12. Transportation Equity Act for the 21St Century The Intermodal Surface Transportation Efficiency Act of 1991 (known as ISTEA) authorized Federal programs to address four national challenges: (1) safety, (2) continued growth of traffic and travel and its attendant congestion, (3) environmental concerns, and (4) demographic changes. Through ISTEA, the Federal government has invested more and has worked with both the state and local governments to invest better. In 1998, the Transportation Equity Act for the 21 Sc Century (TEA-21) authorizing highway, highway safety, transit and other surface transportation programs replaced ISTEA. TEA-21 builds on the initiatives .established by ISTEA. This new act combines the continuation and improvement of current programs with new initiatives to meet the challenges of improving safety as traffic continues to increase at record levels. It also focuses on protecting and enhancing communities and the natural environment as we provide transportation, and advancing America's economic growth and competitiveness domestically and internationally through efficient and flexible transportation. The State of Minnesota is allocated a certain amount of Federal funding each year for the TEA-21 program. The state is divided into eight regions, with Lakeville being included in the metro region. Cities that are interested in receiving Federal funding must apply to the Metropolitan Council by the specified deadline each year. The applicants are judged according to the TEA-21 criteria addressed above and then awarded the funding based on their ranking. Several authorization requirements exist for the use of TEA-21 in Minnesota and the following items are required in order to authorize federal aid projects: 1) An approved project development report. 2) A complete Right-of-Way Certificate #1 or 1A as appropriate. 3) Required permits. 4) Approved plans. 5) Engineer's estimate. 6) Special provisions. A project must be ready for letting before the Minnesota Department of Transportation (Mn/DOT) will authorize it. If a project is not ~i SPRINGSTED Page 32 authorized by its sunset date, all federal funding will be withdrawn and used for other purposes. The use of Federal funds for TEA-21 projects is a reimbursable process which can be complicated and time consuming. It is recommended that local agencies start the preparation of the above named documents ahead of time. The Metropolitan Council will not extend the sunset date for any project. Lakeville has participated with Dakota County on the use of the TEA- 21 funds for three projects in the past. They include: 1) Cedar Avenue from Dodd Avenue to the south city limits. 2) County Road 46 from Pilot Knob Road to east city limits. 3) Pilot Knob Road from 170"' Street to County Road 46. ~ SPRINGSTED Page 33 13. Contamination Cleanup and Investigation Grant Program The Department of Trade and Economic Development (DYED) can award grants toward contamination investigations and the development of a Response Action Plan (RAP) or for the cleanup of contamination on sites which will be redeveloped. The contamination investigation grants will allow smaller communities to access sites believed to be contaminated but which are typically not addressed due to limited financial resources. The Contamination Cleanup grants address the growing need for uncontaminated, developable land. In both cases, grants are awarded to those sites where there is serious, imminent private or public redevelopment potential. Eligible applicants include cities, port authorities, housing and redevelopment authorities, economic development authorities, or counties. Cleanup Grant applicants must have a Minnesota Pollution Control Agency (MPCA) approved RAP and a pre-cleanup land appraisal vs. cleanup cost criteria. Both applications require a 25% local match, participation in the Metropolitan Council's Local Housing Incentives Programs for Twin Cities Metro area applicants, and the expectation that the site will be redeveloped. Both publicly and privately owned sites qualify for this. program. Investigation and RAP Development Grants pay for part of the cost of performing a contaminant investigation and development of a RAP for the site. Contamination Cleanup Grants can pay for part of the cost of cleaning up contaminants under M.S. 115B.02 or petroleum that is not eligible for the Minnesota Petrofund and that is determined by the MPCA to be attributable to petroleum. The program statute directs DYED to rank applications on the following: 1. Tax base increase resulting from cleanup and development of the site. 2. The social value of the cleanup, demonstrated by the number of jobs created through cleanup and redevelopment, etc. 3. MPCA evaluation on the reduced threat to public health and the environment as a result of cleanup. 4. Likelihood that the site will be cleaned up without government money. 5. Amount of the cleanup cost. 6. Commitment of local municipality to pay for the local match. ~ SPRINGSTED Page 34 14. Water Bank Program (Wetland Bank) Minnesota Statutes Chapter 103E The Commissioner of the Department of Natural Resources (DNR) established the Water Bank Program to preserve wetlands. Wetlands are defined as lands on which water covers the soil or is present either at or near the surface of the soil or within the root zone, all year or for varying periods of time during the year, including the growing season. The Commissioner may acquire a title to wetlands or enter into easement agreements with property owners to preserve wetlands and other waters. Easement . agreements must be conservation agreements and need to last for a period of at least 20 years, although preferably permanent in duration. In the easement agreement between the Commissioner and a property owner, the property owner must agree on the following items: ¦ to designate eligible wetland areas for placement into the Water Bank Program, which may include wetlands covered by a federal or state government easement that allows agricultural use; ¦ to place designated eligible wetland areas in the program for the period of the agreement; ¦ not to drain, burn, fill, or otherwise destroy the wetland character of the areas, or to use them for agricultural purposes; ¦ to implement the wetland conservation and development agreement plan for the property in accordance with the agreement, unless a requirement of the agreement or plan is waived or changed by the Commissioner. The Commissioner must make payments to the property owner for the water bank easement in the following manner: 1) For a permanent easement, 50 percent of the average equalized estimated market value of cropland in the township as established by the Commissioner of Revenue for the time period when the application is made. 2) For an easement of limited duration, a lump sum payment equal to 65 percent of the value of the permanent easement value for the time period when the application is made. 3) An alternative method of payment may be based on cash rent or a similar system as determined by the Commissioner. ~ SPRINGSTED Page 35 The City of Lakeville established a "Wetland Bank" in 1998 by purchasing a 50 acre parcel north of 185`h Street and east of Ipava Avenue, of which 20 acres are designated as wetlands. This process created 12 acres of approved wetland mitigation credits. In order to avoid a net loss of wetland, two acres of new wetland must be created for every acre lost to development. At this time, the Wetland Bank has approximately 10 acres of restored wetland set aside. These credits can be used as replacements for wetlands that have been unavoidably lost due to construction or relocation of major collector roads. Availability of these credits minimizes the loss of buildable land due to road improvements. The Wetland Bank is a valuable resource, established and controlled by the City, to further its development goals. ~i SPRINGSTED Page 36 15. Connection User Fees Connection fees should be established to recover the capital cost associated with providing the necessary infrastructure to provide the service to the customer. These would include the cost of providing treatment capacity together with the cost of the distribution or collection systems. However, many cities establish connection charges less than the actual capital costs incurred to provide the service. There are a number of reasons for this including, but not limited to, the desire to encourage business and residential development, to keep charges competitive with neighboring communities, and to encourage new customers to connect to the system for both economic and environmental reasons. However, it is important to remember that to the extent connection fees do not cover the costs associated with providing utility services directly related to growth these costs are paid for by the utility's existing customers through higher rates. The City of Lakeville currently charges new residential .customers a connection fee of $2,500 for each water connection and $862 for each sanitary sewer connection. In addition, there is a sanitary sewer and storm sewer area charge. The sanitary sewer area charge is $714 per acre. The storm sewer area charge is separated into three parts: ¦ Type I -Single Family $0.125 / sq. ft. ¦ Type II -Multi-Family $0.138 / sq. ft. ¦ Commercial/Industrial $0.175 / sq. ft. A separate charge exists for the Crystal Lake area.. The Crystal Lake surcharge is in addition to the fees listed above and is also separated into three parts: ¦ Type I -Single Family $0.0094 / sq. ft. ¦ Type 11 -Multi-Family $0.0107 / sq. ft. ¦ Commercial/Industrial $0.0135 / sq. ft. It is important to understand that while connection fees provide a valuable source of revenue for the utilities, they can be much more volatile than user fee revenue related to actual sales., Connection fees are dependent on the local economic condition and will rise and fall accordingly. However, the fixed costs associated with debt issued to finance the necessary capital improvements will need to be paid regardless of how much connection fee revenue is collected. ~ SPRINGSTED Page 37 16. Loans for Downtown Revitalization Efforts Several banks in the area offer low-interest loans to businesses for the rehabilitation of downtown commercial buildings. Loan rates are at prime minus two. Each bank undertakes its' own loan determination and underwriting process. The banks currently participating in this program are: 1) Marquette Bank 2) New Market Bank 3) Provincial Bank ~ SPRINGSTED Page 38 17. Park and Trail Dedication Funds The Park and Trail Dedication Fund was established to provide a source of funds to complete park and trail improvements within the City. Its' sources of funding include new permit revenues and cash contributions as described below. Developers can avoid a cash contribution through a land dedication based upon density of .'their proposed development. As a prerequisite to subdivision approval, subdividers shall dedicate land for parks, playgrounds, public open spaces, and trails and/or shall make a cash contribution to the City's Park Fund and Trail Fund as provided by this Section. Land shall be reasonably suitable for its intended use and shall be at a location convenient to the people to be served. The Park and Recreation Advisory Committee shall recommend to the City Council the land and/or cash contribution requirements for proposed subdivisions. In residential subdivisions where a land dedication is required, the City will use a formula based on density of units per acre to determine the land dedication percentage. In commercial or industrial plats where a land dedication is required, the land dedication percentage is 5% of the gross area of land being platted. In some cases the City may require a cash contribution instead of a park land dedication. Single family and multi-family dwelling units would be required to contribute $1,500 per dwelling unit. Commercial developments would be required to contribute $5,400 per acre and industrial developments would be required to contribute $3,200 per acre. Cash contributions shall be deposited in the City's Park and Recreation Development Fund and shall only be used for park planning, acquisition, or development. Eligible uses of Park and Trail Dedication Funds are identified as follows: ¦ Parks ¦ Playgrounds ¦ Public Open Spaces ¦ Trails ® SPRINGSTED Page 39 Lakeville Park and Trail Improvement Expenses 1996-2001 Park Trail Park Improvements .Improvements Development Total Fund Fund Fund 1996 $669,828 $ 1,239 $ 671,067 _ 1997 $162,933 $38,689 ~ $ 201,622 ..1998 $ 831,802 $ 831,802 1999 . $1,115,760„__ $1,115,760 2000 $ 869,502 869,502 _ i . _ _i_._ ~__m.... _Total _mm $3,689,753 See Appendix X for a complete version of Lakeville's Park and Trail Dedication Fund. ~i SPRINGSTED Page 40 I C ; ~ 18. Eminent Domain (Minnesota Statutes 465.01,117,469.126,469.131) A!I cities may exercise the right of eminent domain for the purpose of acquiring private property for any purpose for which it is authorized by law. Its use in the process of economic development or redevelopment is authorized by the city's designation of a development district within the boundaries of the City. Within such districts the City may, among other things, acquire land or easements through negotiation or through powers of eminent domain. The City of Lakeville has, in the past, used .its power of Eminent Domain judiciously. It is likely that this discretionary approach will continue should this tool be discussed for use within the context of future projects. ~ SPRINGSTED Page 41 Appendix Capital Improvement Plan (CIP) The purpose of capital improvement planning has traditionally been to maximize the use of the City's financial resources in funding capital improvements. It is a management tool that enables the City to be forward looking by anticipating the timing and the financing of future capital needs for necessary public improvements over a nominal period of time. It should be based on a systems approach to provide a "whole city" context for identifying future capital needs. It is designed to be a flexible, evolving plan that is updated each year as the City's capital needs and priorities change. The plan should be developed using a collaborative process involving all the major stakeholders in the City. The City of Lakeville's Capital Improvement Plan (CIP) is a long-range program that identifies the City's infrastructure, development objectives, and the allocation of financial resources. It provides policymakers and the community with a strategic (documented) approach to implementation and administration of construction projects. The CIP takes into consideration the City Council's previous actions relating to transportation and the I-35 improvement program. The following funds finance the construction projects and improvements: 1) Public Works Reserve Fund 2) Storm Sewer Trunk Fund 3) Water Trunk Fund 4) Sanitary Sewer Trunk Fund 5) Park Development Fund In summary, the 2001-2005 Capital Improvement Plan provides a foundation for construction of the City's infrastructure in such a manner as to enable development to occur in an orderly and fiscally responsible manner. SPRINGSTED Page 42 Appendix 11 Business Subsidy Minnesota Statutes Chapter 116J The State Legislature adopted new regulations for the granting of business subsidies by the state and ,local government in 1999. A "business subsidy" is defined as a state or local government grant, contribution of personal property, real property, infrastructure, the principal amount of a loan at rates below those commercially available to the recipient, any reduction or deferral of any tax or any fee, any guarantee of any payment under any loan, lease, or other obligation, or any preferential use of government facilities given to a business. Any state or local government agency is subject to the business subsidy statutes and is considered a "grantor". A grantor includes a statutory or home rule charter city, housing and redevelopment authority, town, county, port authority, economic development authority, community development agency, nonprofit entity created by a local government agency, or any other entity created by or authorized by a local government with authority to provide business subsidies. The following are not considered business subsidies: 1) A business subsidy of less than $25,000. 2) Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria. 3) Public improvements to building or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time improvements are made. 4) Redevelopment property polluted by contaminants. 5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50 percent of the total cost. 6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services. 7) Assistance for housing. 8) Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict. 9) Assistance for energy conservation. 10) Tax reductions resulting from conformity with federal tax law. 11) Workers' compensation and unemployment compensation. 12) Benefits derived from regulation. 13) Indirect benefits derived from assistance to educational institutions. 14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and 501(c)(3) tax-exempt bonds. 15) Assistance for a collaboration between a Minnesota higher education institution and a business. SPRINGSTED Page 43 i r r ~ Appendix lI 16) Assistance for a tax increment financing soils condition district. 17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value. 18) General changes in tax increment financing law and other general tax law changes of a principally technical nature. 19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency. 20) Funds from dock and wharf bonds issued by a seaway port authority. 21) Business loans and loan guarantees of $75,000 or less. 22) Federal .loan funds provided through the U.S. Department of Commerce, Economic Development Administration. A specific set of criteria must be developed before a business subsidy may be granted. The criteria: ¦ must be adopted following a public hearing; ¦ may not be adopted on a case-by-case basis; ¦ must set specific minimum requirements that recipients must meet in order to be eligible to receive business subsidies; and ¦ must include a specific wage floor for the wages to be paid for the jobs created. The wage floor may be stated as a specific dollar amount or may be stated as a formula that will generate a specific dollar amount. A grantor may deviate from its criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to the Department of Trade and Economic Development (DYED). A copy of the criteria must be submitted to DYED. A recipient must enter into an agreement for every business subsidy. The business subsidy must include the following: 1) description of the subsidy, including the amount and type of subsidy, and type of district if the subsidy is tax increment financing; 2) statement of the public purposes for the subsidy; 3) measurable, specific, and tangible goals for the subsidy; 4) description of the financial obligation of the recipient if the goals are not met; 5) statement of why the subsidy is needed; 6) commitment to continue operations in the jurisdiction where the subsidy is used for at least five years after the benefit date; 7) name and address of the parent corporation of the recipient, it any; and 8) list of all financial assistance by all grantors for the project. SPRINGSTED Page 44 Appendix 11 In addition to the other goals mentioned, a business subsidy agreement must include goals for the number of jobs created, which may include separate goals for the number of part-time of full-time jobs, or in cases where job loss is specific and demonstrable, goals for the number of jobs retained. It also must include wage goals for the jobs created or retained. After a public hearing, if the creation or retention of jobs is determined not to be a goal, the wage and job goals may be set to zero. If the amount of a state government business subsidy is greater than $500,000 or a local government subsidy is greater than $100,000, a public hearing must be held. Specific requirements exist in the Statutes for the publication of the notice for the public hearing. A recipient must provide a report to its grantor regarding goals and results for two years after the benefit date or until the goals are met, whichever is later. If the goals are not met, the recipient must continue to provide information on the subsidy until the subsidy is repaid. The information shall be reported on forms provided by DTED. All local government agencies of a local government with a population of 2,500 or more and state government agencies must file a report by April: 1 of each year to the Commissioner of DTED. Local government agencies of a local government with a population of 2,500 or less are exempt from filing this report if they have not awarded a business subsidy in the past five years. Lakeville will be required to update its current Business Subsidy Policy prior to the provision of another business subsidy; (ie. Tax Increment Financing, Tax Abatement, Redevelopment Grant Program, Minnesota Investment Fund Program, Economic Development Fund, and Revolving Loan Fund. SPRINGSTED Page 45 Appendix 111 City of Lakeville's Business Subsidy Policy This policy is adopted for purposes of the Business Subsidies Act (the "Act"), Minnesota Statues, Sections 116J.993 through 116J995. Terms used in this Policy are intended to have the same meanings as if used in the Act, and this Policy shall apply only with respect to "subsidies" as defined by the Act if and to the extend required thereby. The City of Lakeville and the Lakeville Economic Development Commission maintain server policy documents which speak to the general goals and objectives for the provision of public assistance for private development or redevelopment activities. These documents include, but are not limited to the current Strategic Plan for Economic Development and the Tax increment Financing Policy. While it is recognized that the creation of good paying jobs is a desirable goal which benefits the community, it must also be recognized that not all projects assisted with subsidies drive their public purposes and importance solely by virtue of job creation. Worthwhile projects may provide value to the community in the forms of infrastructure improvements, stabilization of business districts or neighborhoods, or enhancement of economic diversity. In addition, the imposition of high job creation requirements and high wage levels may be unrealistic and counter-productive in the face of larger economic forces and the financial and competitive circumstances of an individual business. With respect to subsidies, the determination of the number of jobs to be crated and the wage levels thereof shall be guided by the following principles and criteria: ¦ Each project shall be evaluated on a case-by-case basis, recognizing its importance and benefit to the community from all perspectives, including created or retained employment positions and other policy objectives of the City of Lakeville. ¦ In cases where the objective is the retention of existing jobs, the recipient of the subsidy shall be required to provide reasonably demonstrable evidence that the loss of those jobs is imminent. ¦ The setting of wage and job goals must be sensitive to prevailing wage rates, local economic conditions and/or external economic forces over which neither the grantor nor the recipient of the subsidy has control, the individual financial recourses of the recipient and the competitive environment in which the recipient's business exits. ¦ If a particular project does not involve the creation of jobs, but is nonetheless found to be worthy of support and subsidy, it may be approved without any specific job wage goals, as may be permitted by applicable law. ¦ Each project shall not only be evaluated against the Business Subsidy Policy but also against other applicable City or Economic Development Commission policies, including the Comprehensive Guide Plan, current Strategic Plan for Economic Development and the Tax Increment Financing Policy. ¦ Because it is not possible to anticipate every type of project. which may in its context and time present desirable community building or preservation goals and objectives, the SPRINGSTED Page 46 Appendix 111 governing body must retain the right in its discretion to approve projects and subsidies which may vary from the principles and criteria of this Policy. i SPRINGSTED Page 47 Appendix lV Income Requirements for Qualified Mortgage Bond Projects (Section 143(f) of the Internal Revenue Code) An issue meets the requirements only if all owner-financing provided under the issue is provided for mortgagors whose family income is 115 percent or less of the applicable median family income. The term "applicable median family income" means, with respect to a residence, whichever of the following is greater: 1) The area median gross' income for the area in which such residence is located, or 2) The statewide median gross income for the State in which the residence is located. The family income of mortgagors, and area median gross income, shall be determined by the Secretary after taking into account the regulations prescribed under section 8 of the United States Housing Act of 1937 (or, if such program is terminated, under another program that is in effect). Adjustments of the income requirement can be made based on the relation of high housing costs to income. If the residence, for which financing is provided under this issue, is located in a high housing cost area and the limitation determined is greater, a limitation equal to that percentage can be substituted. In the case of a mortgagor having a family of fewer than 3 individuals, the preceding provisions of this subsection shall be applied by substituting `100 percent' for `115 percent' each place it appears. SPRINGSTED Fage 48 Appendix V Qualified Residential Rental Project (Section 142 (d) of Internal Revenue Code) The term "qualified residential rental project" means any project for residential rental property if, at all times during the qualified project period, the project meets the requirements of one of the following tests: . 1) 20-50 test The project meets the requirements if 20 percent or more of the residential units in a project are occupied by individuals whose income is 50 percent or less of the area median gross income. 2) 40-60 Test. The project meets the requirements if 40 percent or more of the residential units in such project are occupied by individuals whose income is 60 percent or less of area median gross income. For purposes of this test, a property shall not be treated as failing to be residential rental property merely because part of the building in which the .property is located is used for purposes other than residential rental purposes. At the time of issuance, the issuer elects which test better suits the project. SPRINGSTED Page 49 Appendix Vl Tourism Facility (Minnesota Statutes Chapter 469.174, Subd. 22) "Tourism facility" is defined as property that: 1) is located in a county where the median income is no more than 85 percent of the state median income; 2) is located in a county in development region 2,3,4, or 5 as defined in section 462.385; 3) is not located in a city with a population in excess of 20,000; and 4) is acquired, constructed, or rehabilitated for use as a convention and meeting facility that is privately owned, marina, hotel, motel, lodging facility, or nonhomestead dwelling unit that in each case is intended to service primarily individuals primarily individuals from outside the county. SPRINGSTED Page 50 Appendix Vll Qualified Border Retail Facility (Minnesota Statutes Chapter 469.176, Subd. 4c) "Qualified border retail facility" is defined as a development consisting of a shopping center or one or more retail stores - if the authority finds that all of the following conditions are satisfied: 1) the district is in a small city located within one mile or less of the border of the state; 2) the development is not located in the seven-county metropolitan area, as defined in section 473.121, subdivision 2; 3) the development will contain new buildings or will substantially rehabilitate existing buildings that together contain at least 25,000 square feet of retail space; and 4) without the use of tax increment financing for the development, the development or a similar competing development will instead occur in the bordering state or province. SPRINGSTED Page 51 Appendix VIII Tax-Exempt Financing (Minnesota Statutes Chapter 474A) Tax-exempt financing is a form of financing in which the interest on the bonds issued is excluded for federal income tax purposes from the gross income of the owners of the bonds. A governmental body, educational institution or entity that qualifies as a "political subdivision" may qualify for tax-exempt financing. Such entities may include agencies, authorities, boards, commissions, hospitals, and school districts. Not-for-profit organizations created under Section 501(c)(3) of the Internal Revenue Code do not qualify directly as issuers of tax-exempt obligations but can qualify in other ways. Some features and benefits of tax-exempt financing include: • Offers low borrowing rates • Easy market access • Provides flexible structure to meet budget and cash flow needs • Preserves current capital dollars • Debt is repaid over time by the users of the project The tax-exempt bonding pool began 2001 with a balance of $307,467,437. That amount is distributed into separate pools and entitlements. The breakdown is as follows: 1) Small Issue Pool (manufacturing projects) 2) Housing Pool 3) Public Facilities Poot Please see Appendix X for the allocation as provided by the. Minnesota Department of Finance. SPRINGSTED Page 52 Appendix lX City of Lakeville Preliminary Revolving Loan Fund Guidelines Purpose of the Revolving Loan Fund (RLF) The RLF funds will be used to leverage private capital for industrial and commercial development. Small business and manufacturing industries are the primary focus for retention, expansion, and attraction objectives. Loans made with RLF funds will address the high cost and short supply of capital for business development by providing flexible loan terms. RLF funds will increase the accessibility to capital and provide an additional incentive to financial institutions to make loans to businesses that otherwise they would be hesitant to make loans to. Public Purpose While it is recognized that the creation of good paying jobs is a desirable goal which benefits the community, it is also recognized that not all projects assisted with subsidies derive their public purpose and importance solely by virtue of job creation. The types of loans will be subordinated to private sector lenders in order to encourage their involvement. All RLF loans will be offered at below market interest rates with flexible terms geared to the specific needs of the small business. Uses of the proceeds will include fixed assets and working capital, but will prohibit refinancing. Loans made from the Lakeville RLF shall. identify a public purpose based on the following principals and criteria: ¦ Each project shall be evaluated on a case-by-case basis, recognizing its importance and benefit to the community from all perspectives. Goals identified may include created or retained employment positions, infrastructure improvements, stabilization of business districts or neighborhoods, enhancement of economic diversity, or other policy objectives of the City of Lakeville. ¦ In the case where the objective is the retention of existing jobs, the recipient of the subsidy shall be required to provide reasonably demonstrable evidence that the loss of those jobs is imminent. ¦ The minimum number of jobs to be created shall be .based on federal standards for job creation. Operating Basis The following are the key factors in operating the proposed RLF: SPRINGSTED Page 53 Appendix lX 1) Operate the RLF in a businesslike and professional manner. 2) Establish clear goals and objectives for the RLF. 3) Simplify the RLF loan terms and conditions as well as the approval process. 4) Reduce political influence on the loan selection process. 5) Establish and maintain a good working relationship with local private financial institutions. 6) Structure the RLF loan committee to include representatives and officials interested in the RLF, including representatives of the local lending community. Proposed types of financial assistance: 1) Provide collateral for private financing. 2) Provide loans at lower-than-market interest rates. 3) Provide forgivable loans to projects with strong public benefit. Leverage Standards The ratio of private sector dollars to be leveraged by RLF loans will be a minimum of 1 private/1 public. Types of Businesses to be Financed To be eligible for assistance, applicants must be a "for profit" business. The loan portfolio will attempt to seek a balance between new start up companies and existing firms seeking to expand or locate facilities in the Lakeville area. Commercial/retail and manufacturing/value-added businesses will be eligible for RLF funds. The RLF will strive to encourage those projects that increase tax base and are linked to existing businesses in the area through source or supply networks. However, success will depend on development opportunities and loan demand. Eligible Costs for Financing Eligible costs include real estate, machinery and equipment. Assets pledged as collateral must be approved by both the City and the participating private financial institutions. Standard Terms for Repayment of Loans Maximum term: Working Capital - 5 years SPRINGSTED Page 54 / f 1 ~ Appendix /X Equipment - 10 years Real Estate/Buildings - 15 years Payments will begin within 45 days of note and will normally be based on equal principal and interest payments. However, for projects where first year cash flow is tight, the City may defer principal payments for up to 12 months. In the case of forgivable loans, repayment will be forgiven once all criteria specified in the development agreement has been met All loans will have a call provision in which immediate repayment is required for businesses leaving the area. Loan applicants must demonstrate an acceptable level of project equity as determined by the City. Other Requirements ¦ Applicant must provide current financial records in a form acceptable to the City. ¦ Applicant must provide a proforma to the City. ¦ Project must be consistent with the City's Business Subsidy Policy SPRINGSTED Page 55 Appendix X 10-4-8: DEDICATION REQUIREMENTS: A. As a condition of subdivision approval, subdividers shall dedicate a portion of any proposed subdivision for conservation purposes or for .public use as parks, recreational facilities as defined and outlined in Minnesota Statutes section 471.191, playgrounds, trails, wetlands, or -open space; provided that the city may choose to accept an equivalent amount in cash for part or all of the portion required to be dedicated based on the fair-market value of the land at the time of final approval B. Land shall be reasonably suitable for its intended use and shall be at a location convenient to the people to be served. Factors used in evaluating the adequacy of proposed park and recreation areas shall include size, shape, topography, geology, hydrology, tree cover, access and location. Land with trash, junk, pollutants and unwanted structures is not acceptable. C. The park and recreation advisory committee shall recommend to the city council the land and/or cash contribution .requirements for proposed subdivisions. D. Any increase in density of subdivisions shall be reviewed by the parks and recreation committee for reconsideration of park land and/or cash contribution requirements: E. When a proposed park, playground, recreation area or other public ground has been indicated in the city's official map or comprehensive plan and is located in whole or in part within a proposed subdivision, it shall be designated as such on the plat and shall be conveyed to the city. If the subdivider elects not to dedicate an area in excess of the land required hereunder for such proposed public site, the city may consider acquiring the site through purchase or condemnation. F. Land area conveyed or dedicated to the city shall not be used in calculating density requirements of the city zoning ordinance' and shall be in addition to and not in lieu of open space requirements for planned unit developments. G. Where private open space for park and recreation purposes is provided in a proposed subdivision, such areas may. be used for credit, at the discretion of the city council, against the land or cash dedication requirement for park and recreation purposes, provided the city council finds it is in the public interest to do so. Page 56 Appendix X H. The dedication requirements are presumptively appropriate. A subdivider may request a deviation from the presumptive requirements based upon the anticipated impact of that particular subdivision. The request must be made before final subdivision approval by the city. I. In residential subdivisions where a land dedication is required, the following formula will be used to determine the dedication requirement: Density: Units Per Acre Land Dedication Percentage 0 - 2.5 10 percent 2.5 - 4 11 percent 4+ - 6 13 percent 6+ - 8 15 percent 8+ - 10 17 percent 10+ 17 percent - 20 percent In commercial or industrial subdivisions where a land dedication is required the following formula will be used to determine the .dedication: five percent (5%) of the gross. area of land being platted. (Ord. 673, sec. 1, 7-17-2000) J. In lieu of land dedication the city may require the foli©wing cash contribution: Commercial $5,400.00 per acre Industrial 3,200.00 per acre Multi-family dwelling units 1,500.00 per dwelling unit Single-family dwelling units 1,500.00 per dwelling unit (Ord. 681, sec. 1, 12-18-2000) K. The city may elect to receive a combination of cash, land and development of the land. The fair-market value of the land the city wants and the value of the development of the land shall be calculated. That amount shall . be subtracted -from the cash contribution required by subsection J of this section. The remainder shall be the cash contribution requirement. L. "Fair-market value" shall be determined as of .the time of final subdivision approval in accordance with the following: 1. The city and the developer may agree as to the fair-market value, or 2. The fair-market value may be based upon a current appraisal submitted to the city by the subdivider at the subdivider's expense. The appraisal shall be made by appraisers who are approved members of the SREA or MAI, or equivalent real estate appraisal societies. 3. If the city disputes such appraisal the city may, at the subdivider's expense, obtain an appraisal of the property by a qualified real estate appraiser, which appraisal shall be conclusive .evidence of the fair-market value of the land. Page 57 Appendix X M. Planned developments with mixed land uses shall make cash and/or land contributions in accordance with this section based upon the percentage of land devoted to the. various uses. N. Cash contributions are. to be calculated at the time of final subdivision approval. The council may require the. payment at the time of final subdivision approval. or at a later time under terms agreed upon in the development agreement. Delayed payment shall include interest at a rate set by the city. O. Cash contributions shall be deposited in the park dedication fund and shall only be used for the acquisition of land for the purposes set forth in subsection A of this section, and the planning and development of land for such purposes. P. Property being subdivided without an increase in the number of lots shall be exempt from park and trail dedication requirements if similar. requirements were satisfied in conjunction with an earlier subdivision. If the number of lots is increased, then the dedication shall be based on the additional lots created. (Ord. 673, sea 1, 7-17-2000) Page 58 k January 2, 2001 MINNESOTA DEPARTMENT OF FINANCE rn a c MINNESOTA DEPARTMENT OF FINANCE a, ~ a 2001 TAX EXEMPT BOND VOLUME CAP DISTRIBUTION a Q ~ 2000 Population 4,919,479 ~ Per Capita Maximum 562.50 2001 Volume Cap 5307,467,437 ~ _ ~ ~ ~ d>rodat2r Fitt Q MS:'474A,i~i ~ ~;i m ~#ntl" 'tom ~ tae 7 7~'gP Atibcatioas 1~onts. f 1 ~r •(Roundi~d) 8fllaltiss~a $63,000,000 26.980726% $22,914,177 $85,914,177 585,914,000 fl` H~s(ng, 59,000,000 25.267666% 21,459,309 80,459,308 80,459,000 PubtCc~s~iFitiBS _ 10.500,000 4.496788% 3.819 030 14 319 030 14 319 000 K Totat`f'~ts 132,500,000 56.745182% 48,192,516 180,692,516 180,692,000 W ~!1#{~f ~ Ngr~Itrera6le Hbr~etnB,FJn:.( 53,750,000 (2) 23.018272% [19,549,794] ~ 21kH~~tllyd Paot:LM~~ (10.960,506) (3) I"" MFCF~I4 :"~~a 42,789,494 (4) 19,549,794 62,339,288 62,339,000 r o f, O ~?l~~ 21,000,000 8.993576% 7,638,058 28,638,059 28,638,000 ~ °{~i~" 15,750,000 6.745182% 5,728,544 21,478,544 21,479,000 i±V ~ 10,500,000 4.496768% 3,819 030 14;319,030 14,319 000 V Totaf Lntlt~c 101,000,000 43.254818% 36,735,427 126,774,821 126,775,000 C _ • $233,500,000 100.000000% $84 927 943 $307 467,437 5307,467,000 Volume Cap Otffsrenes $73,967,437 (5) Unffied Pool Reallocation 10,980,506 ~ Total Avaliable for Reallocation $84,927,943 (6) ~ (Footnote 1): These entklements must be used for mortgage bonds, mortgage cxedit certificates, public facilities bonds, and residential rerrtal project bonds, except that entitlement issuers may carry forward allocations for any qualified bond. i (Footnotes 2.6): The original base allocation specified in law for MHFA is $53,750,000 (Footnote 2). ~ The 2000 UniSed Pool ca ) a rryforwartl of $10,960,506 (Footnote 3) reduces this amount to $42,789,494 (Footnote 4 , d must be added to the volume cap difference of $73,967,437 (Footnote 5), and Is redistributed on pro-rata basis j'J to all pools and entitement issuers per M.S. 474A.03 (Footnote 6). O (Footnote 7) Pro-rata shares difference = % for each pool and entitlement issuer X $84,927,943. p ~ See this report and related tax exempt bonding Information at www.linance.state.mn.us/teb ~ z a e N 3 Y Appendix XlI Map of Lakeville's Special Service District No. 1 Iv w rr s ]Properties Assessed SPRINGSTED Pag2 60 MEMORANDUM TO: Economic Development Commission FROM: Arlyn Grussing, Community and Economic Development Director DATE: June 14, 2001 RE: Golf Tournaments The Metro East Development Partnership will have their Annual Membership Meeting and Golf Tournament on Monday, August 13, 2001 at the Hastings Country Club. The cost this year is $100/person or $350/foursome. They also have sponsor programs, which would be more expensive. Preliminary information attached. The Dakota County Economic Development Partnership is having their Golf Tournament on August 27, 2001 at the Crystal Lake Golf Course here in Lakeville. The cost will be $85/person and they will also offer various sponsorship programs. Detailed information is not yet available. Last year two foursomes played in the Metro East Tournament. This information is being included so the EDC can determine if they want to participate and get the dates on your calendars. Y f Metro East Development Partnership 2001 Golf Tournament Event Sponsorship I wish to sponsor an event at Hastings Country Club for the Metro East Development Partnership's Ora Annual Mid-Year Meeting and Golf Tournament scheduled for Monday, August 13, 2001. Awards Reception & 1st Place Golf Prizes ($1,500) Barbeque Luncheon & 2na Place Golf Prizes ($1,250) Board of Directors Meeting & 3ra Place Golf Prizes ($1,000) My sponsorship entitles me to the following: • Signage in the clubhouse • Publicity in all marketing materials • Publicity in Metro East Broadcast and 1VIEDP Annual Report • Recognition at the event • Four golfers; including green fees, carts, luncheon and awards reception • Sponsorship of golf prizes Name: Company/Community: Address: Phone/Fax: / Enclosed is my check in the amount of Please send invoice to above address Signature /Date Please mail to: MEDP, Attn: Kathy, 332 Minnesota St. Ste. N-205, Saint Paul, MN 55101 or fax to Kathy Price at (651) 223-5484, or a-mail to price@medp.org i' = Metro ~;ast Develo ment Partnershi p p May 3, 2001 Arlyn trussing City of Lakeville 20195 Holyoke Avenue Lakeville, MN 55044 Dear Mr. trussing: Our 4th Annual Mid-Year Meeting and Golf Tournament is scheduled for Monday, August 13, 2001 at the outstanding Hastings Country Club in Hastings. This is our second year at this premier venue, and we received rave reviews after last year's event. The day will begin with a meeting of the Board of Directors at 10:30 a.m. There will be a full barbeque luncheon buffet at noon for all board members and golfers. The golf tournament will begin at 1:00 p.m. with a shotgun start. An awards reception at 6:00 will conclude the event. There are numerous sponsorship opportunities to sponsor the meeting, the luncheon, and the awards reception. All sponsorships include a foursome of golfers and the recognition and publicity MEDP sponsors have come to respect. Kathy Price is coordinating this year's event. She will contact you in the coming weeks to answer any questions you may have about the various sponsorship opportunities. We have also attached a form that you may return at your convenience. Yuur participation is critical to the continued growth and success of this event. With your help, this will be our best event ever. respectfully, David Piggott Executive Director 332 Minnesota Street Suite N-205 Saint Paul, MN 55101 651/224-EAST Fax: 651/223-5484 Web Site: www.medp.org (attp:/ltwincities.bcentral.com ' ~ ~ pottage Grove, St. Paul stores are in the works ~1.~ _ • By Sam Black Staff reporter s" As p•u-t. of its ongoing expansion in the 3s Twin Cities, Home Depot Inc, cif Atlanta is ~ A~Pt~' proposing to build a 100,000-plus-square-foot _ a VALLEY store on a 31-acre site in Apple Valley. The Home Depot is pro- ~ ~ saa, store is one of three east-metro Home Depot posing a 100,000- w stores that could be constructed this year. plus-square foot ~ ~ Birchland Development Co. of Wayzata store on 31 acres. has submitted a preliminary development plan ~ to the city that includes an additional 70,000 LAKEVILL~ ~ square feet of retail space plus five outIots, which could be used by fast food restaurants, at various stages of planning. The projects are gas stations and similar businesses. part of the company's previously announced Birchland is atwo-person real-estate growth target of 30 stores in the Twin Cities- development firm that was formed in by the end of 2002. That would be up from January. Principals Paul Bilotta and Kaare the 13 stores it operated here in 1999. Birkeland used to be part of another compa- Last October Home Dept unveiled plans ny, called Centres Inc. Birkeland declined to fora 116,000-square-foot, $3.9 million store comment until the project was approved. in Cottage Grove Plaza. That plan is under The site, owned by the Fischer Family, is review by the city, according to the Cottage across the street from the Fischer Family Grove planning department's Web site. Marketplace, where a Menards store opened In January Home Depot announced plans less than a year ago. for a store in the Midway neighborhood of St. Tom Lovelace, Apple Valley's city plan- Paul. The store, proposed fur the southwest ner, said t13e project is the sort of develop- corner of University and Lexington avenues, ment that the city had planned for the site, a would be the first to go in the city of St. Paul former gravel mine. if it is approved, said Brian Sweeney, St. Home Depot has at least ri~-o other. stores Paul's director of economic development. ¦ in the works in the eastern metro area. Sam Black can be reached at (6 ! 2) 288- Loeations in St. Paul and Cottage Grove are 2 ~ 03 or sblack@bizjournals.com. Post-Il' Fax Note 7671 4 O pRges? • To From ~ v .1 ~ C 1 Co. m ~ a 1 a Phone Y Phone A INDEX _ _ Q FaK M Fax Y i fac_es & Places Bg p M ~ Obituaries _ B10, 611 ~ m ~ T ~ Weather B~ - w m N www.starfrfbutte.cotn/metro * $'~arTC~bL4tle Thursday, Junc IM, 2001 • Sec#ion ~ = vinced that Gglu rail, rccon6g• • ¦ ~ ured bus lines and other op- Develo,~ment lions reduce eongertion any more effectively than ~ highway irnprovcments. _ ~ ~ ~ ~ ~ rsSUeS u,~T''~e ~we (still) litre iE here • also cited aS The survey, v~itich had a - ~ ~ ~ ~ ~ - margin of error of plus or nri- ~ big concern nut 3.5 ~ percentage points, also found drag > Concerns about devd- Crimefears tumble in 11~et Council survey tohcricizc sdrehRcpublicart hou ng andcirrban sp sal as House majority for atrans- . well as transportation -were " portation bill d+at would sup- cited as a top concern by ~4 ~ ~ By BUI McAuliffe acrd `smart growth .develop- cent, down from. 20 percent r ~ Star Tribune Sraf f'4Vriter ment strategics. last year. port highway binding but pro- percen[ of the respondents. ~ o 'It's bccoroing an issue > Housing attordability, l6 lubit all new:study of rail tines D 'Nearly ail respondents tr ~ Tran ortation and hous- that im acts oo lee da eecent, u from 1 ercent m and revoke plans to btiild a -'97 percent - Tared the ~ ~ ~ p p p y' p p p bus+vay from downtown Sr. '[lain Cities area a better place ~c Z ing issues leapt to the top of It s e quality-of-life issue, and L99B, the sharpest jump for ~ ~ the list of metro-area resi• also a .productivity issue [ac- any factor over the past nvo Paul to dre airport. to live than other metropoli- dents' concerns in this yeai s ing the business community," years. "It's vicar the public under- tan areas, a result that has r~ w Metropolitan Council stuvey. Mondale said. > Crirne, 12.5 percent, ar'd wants and supports liven consistent in the survey ~ = Crime, listed as dre top Abottl 800 metm-area resi- dorm from 6l percent in 1993. a balanced approach; Mondale through the years. ~ concern by dre biggest share dents were randomly inter- Asked whether transpona- sa`d_ The Hairse uansportadon However, some of that lo= ~ of respondents every year for vie+ved for dte survey, wluch son alternatives such as light .polity is way out otstep. Tt?eir cal allection appears to have more than a decade, dropped was cosponsored by the Uru- rail, exclusive busways and policy is ro cut transit in a time diminished. For dte 5rsr time, to fourth. 'At dtird rues a con• versity of Minnesota Center conluttuter rail are necessary of a surplus." the percentage oI pcop)e re- gtomeration of social issues forSlrrveyJteaearch. in the metro area, 79 perceot House TransportaUOn garding the region as "much that include poverty, discnmi- The issues of top concern, agreed. Cotnmittee Cbairvnman Caro( better" in recent years, 47 per- Alolnau, R-Graska, countered cent, +vas tower dtan those nation and drugs, by percentage of those polled, m Met. Council Chairman Ted were: SURVEY cont4nues on 67: by pointing to last year's fund- wl?o consider it "slightly be~- ~ Mondale said the findings vat- > Transportation (conges- -Ninety-seuert percent ojre- ing of transit advantages" - ter," which was just more than ap idate the couna7'a efforts to lion and tratTic), 23 percent, sponde?ru raced the Twin highvtay improvements that 50 percent. ~ t9 address traffic congestion tvidt up from 3 percent in 1993. Cities n better pfc+ce to live alto+ve buses to operate on 1'Irat's a one-year thong,' t`'t transportation alternatives > Social issues, 17 per• rlrarr mtrrry uretro areas. mote miles of metro-area Mondale said. `lt cotdd be the m freeway sl?oulders. She added weather, and t'm with 'em:' m m that while lrtu ridership has . - BiU AfrAuGf je is ar N 6~{"t~ ~ increased, she is not con- -maeul@startribun~co»~ ~ N , arft~y~ ~a~n m Z ~ ~ Z "1 t ~ l 1 www.stat'blbune.oom/metro $(2!1'TfibU~ Monday. MaY 91r 9001 • Suction M their as Their needs exceed ~ p Anew study and an author's research demonstrate the difficulty many low-wage workers have in fording affordable housi~. By Jaen Nopfanspmeer Star iFibune Sarfj tNirr Barbara Ehreren:ich is a nationally ac• • • claimed sue;a[ Ct'it;o and author, but I pratttisa behind euuonat wo1• ~~~lya when she oarrte to bllnnesots list year, ro cbanges, natndY that a Getting by j~`,G she become a Wd•M•irt retail clerk. lutl•thne workor should De s f!t!C! 1'he reason: She wia aoitltl~~ ttnducovec obit to support o family. ~ ~y~YB At tcscateh for her latest book, about the Posing ss a homemeku te• 7fm At1S Ntrlr tktaabn hoe eatcutotm a lteale resaoY eudgot for 11 Jt. V ~~..Al status of !ow•wtrgo workus in Amettoa. entering the work torn, she M;MB50u tamYies. BttCtist covers nsatatas. tsrt not aunt forage Mintutirota wsa to be her last.. and the wodld show up in town. rent ae vecadon:, dtninE out a bui~lg a savings aecoum, mast "esey" srop, an inexpensive at, and scores tnsuad, E?[rctudch found herself in a for a Job and housing. she 1Mt0 parent famp{es- faml8t35 ftustsaring and ultitnatdy ttuideee eeazdi worked as a waitress, a Iwtd one parettt workhtg P for affordable houerag during har vn~ makL a cleaning woman. a i ~ • • ~ moath stay. And iu chc rogrons she vieia nursing home aide, and a Monthy aata ( trtenehtr testa _+t~ • Wal•Mart dark, Ned alo0g the slttleveaoaveveEa 2ura.t t sateawwerQecs ad+Wen cd. the twin Crdc6 bceamc ehc roughoat x164 wa ,she as t a m sc of Foos 8505 rood ;n which ro make ends meet. Y ~ p 799 ! Mow'rg K99 E)ucnrdch w;U reeeurn hars tYeaclaY to life of the moor 'rag poor, ?touse~a { Sotrsrd atemotles of Min- ttmptetmre 329 tkaa~rare Ze1 speak at lvlacalaster Colic a !n St. Pout 3'rg 17tavpotamn 378 and at a labor rally, wltare ~c rcaults of a nesop stand out na'~•mn Btabwa tituatuabh weUtad study of low•wage workers in Mitmetww > While going thtewgh an R+addne 0 ' t>7d rare ~ as a VYaEMert rvfaU dent a will be rslesaed. elghe•houe odstuaUon at Wal- potltMla~ neeraetses 4m' ~ °N0f ^°'as ~ rtarr d hsr rosoa?eb la nsr "Wh¢n I came to Minneso[a,1 thottght Mut, one at her fellow b• Nettts:s 263 Nrttases srekera had her husband~ared aton<l+btew 250' MoMartoa ttt9s tatastaook. it wotild be wsY w fins a )oD, dousing, a wn wall for her In the store ao+a~ + A^"1°I~ conacnial neighborhood to live ia" sa,d because ootekln'c afford NautytnrJaneee•e lA.85 N018/Y°a•"na°ek° se.98 Ehrenreich, we author of a dm,cn books we for a rottnd•tr; horse, I and frequent eontfibutor to Dublitations ~ P ifshrceur:id+ w!LL not reveal at raug;n; ham 1irw: to the New ltepublie, which Wd-Mart sho wot'Itcd.) MErI'S earnings ;Women's earnings ~ " ^ ) ~O I "I was sltocEod at the ltoua;ng shortage > while visitiag a soaal i Gr ` 1998.1999 1998.1999 and hiyfi testa " suvioe a eo get a house I ~ ~ Her S7•sn-hour job mould bardy cover ing refetraLe woman help, ana%cEvnt•ra R•+r ~ ~ ' dfe cost of dto ehesp mold rooms she ing hat kept confuBing her menMe.95/ X~ i 0q1~'~ G.tr i ended up ruuing and the fast-food w;th another Wal•Mazt wwkcr ^°"01an'0t^t ' n01'0M«A011t teswursnts and delis she: relied on. "end wlto trod just come In seddng tenxwtornoctt: ' tentest0~eaeu 1 didn't have an kidz," xhc said in a tee emu Cnt telief. n•atlrxferr~Q•~ Y g Y onalonsv~ont• prr aatenbd eeneterephotte;nteeview, > Whila driving hone hatsrotwcro ai7kfin trree zrevcfem n tram hu subterbaa job. l'd O•n st.e.t:5/ rou a sxG 98/ roar xr / ' The study that well be re- sae ao many people sitting in tore .}L~' leased Tuesday calculates that the but sropa so far oat of L•. a a;regle parent vnth two ehU• tows. 'l7rat staggered tttc. l drat wotild need to make used to imar;•ine what tt would b1a.4B an hour to zupparc the be tike to odd three hours a hnrd yea have to work ro r~ lab tw;vo as mtteh as ttte wd- fsm;ly ad~•quatety. 'ihe study day. of aam+nuung to mY ma;n;upovury." fors system's 'coif level:' was conducted Ey ehn 30SS ael+edule." which es 81S 932 for a rpoeher NUw Codit;on, a group that 8uc It wu Ute housing, ar The report with ons ehi~d leaving the sys• advooatcs Ear low•wngc work, leek thcreuC that brought her Tltc 10BS NOW report tem. era and hu more thou 1W dowa. Unsblc to Gnd an ate- doeant measure poverty; > Living expenCas w oua mt:rnber agoncics and organi• fordable apartment, site trot's done by the Eecrerst gov state Minnesou aze 16 pu• xativns ewtewids. wound up - as nttny low, orhntent, Bue it dons give ea• cent lower than En rho seven, but Drily 27.8 percent of income workers do - Ijving cial service agencies and poli• county metro azca, but wages women working in M;nnesotx in s series of dutap rooters. eymakets a yerdatlek ro mt:ns• ;n emtetate Mlnncsota are 91 tam that much. the rcpon She moved our of one of the arc a "bask, no•frills budget:' percent lower. found. It also found riot more depressing ones - a Iacobs said. > In the four westun- abour half of working ores in place widdte no scrsene on the. The figures were calculated mast regloas of the state, tlw Minacaota tern enaugls to window, no bolt on die door, by using uandards from fade ing Doers ors 20 pcreent lower support a two•patent, two, ao state oteattry. ual anC aorta agsndcs, !'heeyy thin the mstm ararn, Howevu e1Wd family adequately. That ^1 was ehooked 1 eoWd not cover Good, housing, health dte average wages in those figure is 51465 per hour. (The ford soy apartmont !br undo care, trstteportadoa, child [our trsglons ate 42 percent reason ainglo pareses must SttoO a month,' Ehtenreich care, dothing and other nee lowot. cam mote is bceau~te they Bald, '1 was sutyrisexl ae how ceas;des and net eszes. They "1rie ripon sho+ war Doer need to y Eor child care.) "Thatea evhar: important don't covet vacations, sav;aga of q is outpaciag dte ( eyl about'Nlekd and Dimod' IEh• aooottnts, reustuattt meals, eakea flier Qeople see gettlrtg, terudch's new book!," said movrea and other aates• Iaooba satd. I>tien thattglt Kris lambs, executive diretxor uncials, we'ee looking at acne very of the coslhbn. 9t apene this Tlu report found; dwod yyears, 11998.20001 u a veil o[ invisibility over die > The overage annual test trill a IfutancraU challenge for poptdadon of vwrkers bardy of meeting basic aceda fora a large group of people:' tutU:ing ettds moat." sinPle parses with one child to loam mote about the in Minnaaota Is 829,000, o: report, go•to hop:/Iwww•lobs• r4Val•Martian fife' sts.9a an hotu. ehac'a 2L4 uoweoalitton.org. ilvenreleh scleorod Key! floras as high :es the fedrral -loon Hoajcrrayrrgsrr is at West, Fla„ which she lives poverty line o! 811,610, Md lwpfcn®IrrutviLrrrrs.eorn. neu, Portland. Maiae, and the: Twin Clrlcs to da hsr research Ehfenrt9iCh'S on low•wage workers. Shc rhoeo dta suhjmt to teat the: eppeefances Barbara Ehromalth, autltet of "Ntdtol and DMfed: On (Not) Gottktp ey k Amsrkq' ,F~nding a place to call home vAtl sneak In the )morn Cltke as 7uoaday. > St. Paul Labs Conpr: At 230 o.m.. sna wal adMeLS workers at the tents, hGlas harflest part, writer says aii Maln St., St. Paul, > Macalnta Cogege: At 7:30 D.m., one wHl speak at the Weyert~asueal Chapel an the cetlege. 1600 Grand Av., 5t. earaata EnnrxekA Daul fie event is eDOnsorod oy Rumtna• TOTAL P.02 MAY-21-2001 090@ 612 @61 9632 P.02 ntF~~~tWtl~e~.b.c«n TOP Z S LIST Mar 2s, zool 19 Landsc~a. A?rrc ' Fi~r~ns Rank landscape Principal landscape architefts architect(s) RMk 2000 design fly-gg~ W~ 2008 Name, addles telephone ke rerMtae' shlT Sesvkes WTered s RKMt Maleat+t Number oT ol8cas 1 RLK- Kuuaifto :3,000,000 S Urban planning. cirri engineering and survey, sire United Hehhnre Group tervicee tenor, Vtrius john Dievich 1 6110 Blue Circle Drive, Suite 100 120 planning and development. environmenul Sohware, River0.idge derebpmenc Cen[mnial GoM www.rlk•kuusit[o.com Minnetonka, MN 55343 (952) 933.0972 auumem warkshaeu Club. CMS Corp. development 4 - 2 Lant3wrsn Engkaeerinj 52,900,000 Design, construction observa[ion, cemract admin., ADC Wald Hedquanen, Akin Rivtnide Historic JeR McDonell 3 510 Firs[ Ave. N. IS torpon[e, mediallhokh arc and audemic Promemde. Graint Belt Brewery urban www.hndform.net Minneapolis. MN 55403 (612) 252.9070 campus design, urWn design and anhitKwre development. Champp's, Walgrun's and Applebee's 2 - 3 BRW Ina 52,555,000 1 ~ Site planning, masnr planning, urban design, bus and Upper Miaissippi RivK %an, Yostmiu National wtert Durrant 2 700 S. Third St. 30 light nil [ranch lotion and sudon-area planning and Park Pan, Caliloroia; Hiawatha Light Rail Sntion ww.brwinc.com Minneapolis, MN 55415 (612) 370.0700 deign, leaibiliry lorries Design, MSP Irrcl Airport I 4 ENerbe 6etkec 52,100,000 3 Mater planning. ampus planning, she planning, Univeniry of Minnesota -South Moll, Mayo Clink Kim Way - - 3 800 LaSalle Are. 337 urban panning and design, landscape archhettun, Gonda Building, kienn Museum of Minnesou. www.ellerbebecketcom Minneapolis, MN 55402 (612) 3764000 civil engineenng Guwrut Adolphus College 13 5 Mammal Green and Abrahamson Inc. 51,750,000 ? Gmpus master planning site panning and design, TagK Northern Campus, Brooklyn Center; The Gary Fithbuk 5 1201 Harmon Place 7 urban punning and design, strcencapes. phn M.I.N.D. Insd[ute, kcramento. CiliL: $c Catherine's www.hga.com Minneapolis, MN 55403 (612) 337.4100 deigns. courtyad desipr, rcsiden[ial Colage. Sc Aul 4 - 6 SRF COnsultlnj Group Ina 51,550,000 6 Urban design and punning, strteucape, park and Harckt bland 0.egiaul Park. Ave. of rite Am, Near Barry Warner 7 One Carlson Parkway N., Suite ISO 1 I recrntion, open spot and mih, slu desgn avid ~ North redeveopment. finer Pula wwwsrfcomulting.tom Plymouth, MN 55447 (763) 475-0010 planning I 7 Dahljrsn Sharalow i Uban Ina 51,500,000 6 Ci[y and coumy punning, siu panning and dean, Burmnbe Heart of the Cay pun, Hidden takes she GedR Martin 9 300 First Are. N., Suite 210 27 environmamal punning, recreational planning, urban amenide, Larpanteur Ave. santuape. South Robert www.dsuplan.com Minneapolis, MN 55401 (612) 339.3300 deign. GIS. expert ustimony SveK Redevelopment s[ntep g g Tushle Montjomery z Asfedates 51,118,000 2 Site planning, master planning. programming, Lakes at Lyndale redevelopmem, Marrio[t Gary Taha I I 7645 Lyndale Ave. S. ~ 22 archiutture, spate punning and in[erior design for Courtyard Hold. Burns Professional Bldg. Equine www.tmiarchiucts.com Richfield. MN 55423 (612) 830.8208 tommvcial, indunWl, retail and reidential SmaN Animal Clinic I 9 LSA Design Inc. 51,350,000 3 Planning, architKture, urban design, undsupe Upwwn Tnnsh Sution, Sou[hwest $ration, warold $kjelbosted 10 250 Third Ave. N. 14 architetture Burntrille Transit Sution. Hubbard Market Puce, ww.L5ADE51 NINC.com Minneapolis. MN 55401 (612) 339-8729 Eagan Transit Sution I lU 6 Noiflnjton Koejler Group Inc. 51,515,000 5 Urban design, comprthensire punning, maser Mississippi River Greenway. LonglNlew Conconn work Koegler. Michael Schroeder 123 N. Third St.. Suite 100 13 punning, si[e punning, strategic planning and TOD, Waite Park, Huungs Rnerfront ww.HKGl.com Minneapolis. MN 55439 (612) 338-0800 environmental studies I 11 Wef~"°°d Ptrofeasienal Ser9kef Inc. 51,100,000 6 Site-developmem punning urban and recrntioml Fwrmoor. Towne Lake. Liberty on the Lakq kttkn Grq Kopischke. Tim Edkia, Fd Wok 13 7599 Anagram Drive I O$ planning and design, community and mutK Ridge, Co6bks[one, GoK Couru Conununiry m Polk Np Eden Prairie. MN 55344 (952) 937.5150 punning, enrironmenul design. landsope design Ciry, bore 3 Sandell Wacker Berjl7 lna 51,100,000 6 Si[e punning, communhy punning, urban design, GIS lake of the hies Maur %an. University of William Sandersllarry Wacker 12 14 365 E. Kellogg Blvd. I I service Minnesou CoBmm Union renontron, Porest Lake wwwswb tom St. Paul, MN 55101 (651) 221.0401 ~ downtown redevelopment ~ Anderson-Johnson Associates Inc. 592],000 3 Site planning, civil engineering, cemeury planning Andover High School, Cot[age Grove Elemenury. Jay PomeroylPatrick Saner 13 8 7575 Golden Valley Road. Suite 200 9 Prior Lake Migh khool, Dehno High khaol, Toting www ajaiK_net _ _ Golden Valley, MN $5427 (763) SM•7129 Grace High School Sodium I Damon Faber Associates Ina (890,000 4_ Siu punning, urban design, community deveopment 401 Carlson Center, Minneapolis Imowte of Arts. Oamon Farber 14 12 253 Third Ave. S. 9 and corporatelimtitu[ional design Hennepin Awnue stretuupe, GrgiO Corporate www.DfAlandscapa.com Minneapolis, MN 55415 (612) 332.7522 Gmpus maser plan 1 Parapets (780,000 2 Siu and master planning, urban design, community Abbe[ Nonhweuem Cardiovascular CentK, Wm. Scot[ Midnes III Third Are. S., Suite 350 35 punning park design, cnR and traffic engineering and Hennepin Coumy Public Works Fuiliry, Hiawatha 5 I6 Minneapolis. MN 55401 (612) 332-0421 emironmenul cordial LRT sudon siu Msign•build ;Ow.parsons.com MekherWValkky Int. =750,000 I -Civil engineering, and surveying, daignlbuild Hennepin County Public Silery utility. E. Metro Ronald Mdcher[ 16 18 767 E. Kellogg BWd. 9 landscape Tnnsh hciliry, For[ Snielkng In[emmem Camp Np St. Paul, MN 55101 (651) 228-9564 Memorul, Battle Point Museum. Grand Casiiro 2 h/ SbOK EIOot HendAekwn IRC. 5750,000 S Downtown redevelopment and sveetscape; park I.35W Access $wdy, Paul Bunyori Dove in Bemidji, Craig Churchward 1V 15 3535 Vadnais Center Drive 7 planning and redeign; civic, rekgrom and eduratiaul Southside Community Park in Hudson. I-35W wwwsehinacom Vadnais Heighu, MN SSI 10 (651) 490-2000 she desigm wails Gosttown AKthetk Desigi, Guide y Q Bonestroo Rosene, AnderOk and Associates Inc. SSOS,ODD ~ Park and open space design; she panning and Woodbury Cenval Park, Wuhing[on Coumy NP 1V NR 2335 W. Highway 36 4 development studies: trails [rampaution and vansit Library, iarmington svee[scape. Hiawatha khool www.bones[rao.com St. Paul, MN 55113 (651) 604-4724 ucikas: urban design and sueevcape Park 6 Allksnt Enjineerinj Inc. f100,000 7~ She deign and muter pannira within a Payne Are. sveeaupe. Miaifilppi )ewd goK Maleah Acosu 19 17 212 Second St. S.E., Suite 300 14 muhidkciplinary engineering and planning firm denlopmmt Bet Buy, Bottineu Commons NP Minneapolis, MN 55411 (612) 362.0432 1 Hansen, Thorp, Pelllnen, Ohoea (NTPO) 5270,000 ~ Park and toil design: site mastK planning ttreeucape Grand Casino corporase headquarters. Minnetonka Jan Mdenon 20 21 7510 Market Place Drive 34 design; phm ideno6cation, ulettion and Corpen[e Caner, Miller Park, Children's Healthcare Np Eden Prairie. MN SS3M (952) 829.0700 rebrnu[ion; prairie aM wound mtontion West, Seapu 1 Ernst Associates 5185,000 I Maser punning parks and open space, urban Best Buy campus. U.S. Bank, Chaska Brickyard Gera Ernst 21 20 122 Sixth St. W. 2 design and sveeucapes, reiden[al, cammericil, rtdercropmem svemcape, Chaka Town Coune Np Chaska. MN 55318 (952) 448-4094 industrial Clubhouu and Revetbn Aru, Heritage Park I Keenan i Svehren Ina 5160,000 3 Designlbuild, residen[ial Mills, Fallon, Barry, Burwell. Gdy, Wyman, Ingsud Kevin Keenan 22 22 ISSOO Wayzata Blvd. 9 Residences NP Wayzau. MN 55391 (952) 175.1229 I Savanna Designs Ina 5120,000 ~ Residenval and commKCal IaMscape design, site Minnesou kience Museum, 0.oy residence. Polish )im Hags[rom 23 24 351 I Lake Elmo Are N. 3 punning. wbdivaion design, park design arM nsldence, lake Nokomis Park restoration, Manitou NP Lake Elmo. MN 55042 (651) 770.6910 rK[andon, insulaation and projett managemen[ Island res[oration I LMS Engineer! 8i Ardak«tr 5109,500 S Ste punning, development, tveeuupK, multi•amily Univeniry of Wiuonsa $uperia nmpus, Wat Gary Mdenon 24 19 250 Third Are. N., Suite 450 130 housing (PUDs), campuslesute punning, Duluth sveetanpe mauer plan, port Snelling www LHBcorp.com Minneapolis, MN 55401 (6f2) 338-2029 redevilopmen[ planning aiM tnnsporutien planning Ga[eway %aza 3 Mt:Caron Desijn Inc. 583,8,3 0 Intermr aM exterior landsupe design, derelopmKx Skyline Daplays, Seagate TKhnolop, Minnesou McRae AMerson Z5 22 760 Vandalic S[. 42 and insulation oRxe Pun. IDS Crysul Caun Np St Paul. MN 55114 (651) 646.4764 I Abbreviations: Ftwtnotes: Melees: -Arteka Corp., previously ranked No. 25. Sourer. Compatry reprasenn[ives NA = Not AvailabkyApplitatde 1. Larnduape archhecwra design fees -David A. Kincht Assocates Inc. and Kevin declined to provide information. NP =Not Provided 2. Edited to fit G. Norby i Associates Inc. declined to par- tlcipate. fists is the electronic version of the Book of Lists. To order call 800-486-3289, or bookmark - www.ebizlists.com. ThePU$LIC price of P'RNATE development A shin new downtown y -and its hea debt. The view looking east down W. 78th Street in Chanhassen, below, is far different than it was in 1984, right Tax-increment financing helped bulid a downtown nearly from scratch. ~J i , ~ w~~ _ x _ ~ _ '"1 ~ _ ~ - _ w ~ ~ w. _ ° I Eck ~ 5,:- ~ ro,,.: - r j' - _ ~e Chanhassen freely used subsidies to attract development So much land is tied up by such deals that city spending is being cut even as property taxes rise. By Mike Kaszuba tricts that don't pay taxes into Star Tribune Staf f Writer the city's general fund. In the Chanhassen TiF district 1 downtown district alone, $114 Chanhassen has spent Prince created Paisley Park, million in property tax money $114 m~Non in property his state-of-the-art .recording . and other public proceeds has tax and other revenues studio. Tazget put up another of been diverted to remake CARVER ~ ~ , to n~nake its downtown its signature stores..Byerly's built the .area .and entice bust- CO. ~ ~ an upscale grocery with a baby nesses with subsidies. TF district Some of the ~ hider profile kxisinesses grand piano in the entryway. With just over 20,000 All of them said their plans residents, Chanhassen is are shown below. area . merited a subsidy from Chan- one of the largest cities hassen, despite their own often- in Minnesota to use the deep pockets and the strong subsidy so aggressively, CNANHASSEN o f econom . and also shows what ~P~Y ~ ' In C ty Hall, they found a can happen when so P~ I ~ ~ ~ BYerrys partner that dismissed those much tax money is set Arboretu a a who wondered why ablossom- aside to subsidize de- ~ m Btiu '~i7 W 78th St ing Twin Cities suburb should velopment. ~ ~ _ ' []5 ~ f ~ ~ ~ a l ~ j;!~~~ hand out money to draw Bevel- a ~ ~ _ opment. Over two decades the CNANIIASSEN o ,'~T~get f ~ ~ *'1~~~, ~y`~. reinvention of Chanhassen's wnff~ws on A10: ~ ~ ~ 1 \ ~ ~s j - ~ ~ i ~ ~ ~ downtown has become a finan- -Last year, taxes a- ~ Featlval i cial mess involving roughly 150 from redevelop- ~ ~ { Foods ~ subsidized properties. meat projects fell ~ 1 m, - More than 21 percent of $1.7 million short 1~2 mite 17 \'~1'" ~ ~ Chanhassen's property tax base of repaying the ~ a is tied up in tax-increment ills- public debt. Sty 7r~une map ~Y Jene ~?~~AY Minneapolis' deasfon to heavily subsidize anR` a downtown Target has become a landmark issue in city politics. AGE A10 • STAR TRIBUNE ~ ~le PUBLIC jJr1Ce Ol Pill YA1 L' C~.eVelOPI11eI1t MONDAY, JUNE 1I •201 CHANHASSEN from Al State aid and gro u,~tth have so farmashed debt problem Bloomington, Apple Valley or As the city adopted the "We didn't really do real Chanhassen received $1.77 Maple Grove with the prob- plan, Ashworth and others az- great debt planning in the million, more than any ether lems that accompany high- rived at a price: $25 million: past," said Bruce DeJong, the , city in Minnesota. density living?" Others. coin- "No way anybody back then city finance duector. "I'm just That aid, and the city's plained that the plan would thought it would get to [$114j not .sure we drove hazd growing tax base, has. so -far mainly benefit Bloomberg's million," Ashworth would say enough bazgains. We were ea- masked the problem. business interests. later. ger for development to occur." But Mayor Linda Jansen, Chanhassen's plan was a Over the next 15 years, In a report late last year, who took office in January, bold departure from those fol- Chanhassen's makeover -took DeJong said the downtown said the situation could soon .lowed by towns such as Shak- shape. The chrome plating tax-increment district was overtake the city's ability to opee ..and Stillwater, which company, cabinet maker, - fi- running a $1.7 million deficit, shield taxpayers from it. preserved and built on' their berglass boat repair shop and. meaning taxes from properties "The longer we can keep it existing downtowns. Many an elderly woman's home. left.- . there were failing to cover the from affecting their tax bills, people in Chanhassen felt - downtown. In came the bank,' public debt. taken on to help the longer we can keep them there just wasn't much worth. the theater, medical buildings, build them by that amount. from [seeing] the. situation saving. the Festival grocery store and` One city estimate has the deft- We've been put in," she said. "Across the street -here,. ` a Country Suites hotel The cif hitting $4 million in 2003. The city already. imposes there was a grain elevator city, at one point, bought four`. Complicating the city's the highest property taxes on said real estate broker and downtown blocks in order' to problems, payments on $7.5 an average home among 109 33-yeaz resident Vernelle realign a single street.. million in debt from the dis- metro-urea cities - $2,332 on Clayton, pointing out from her In all, 35 "inappropriate trict cannot now be made a $130,000 house last year. Lotus Realty office. "It was businesses" were moved but with revenues from it because The Citizens League, anon- closed, .hadn't been used for of the downtown, said Ash- of achange in state law. profit public affairs organiza- years. worth. Only the dinner theater Chanhassen's entire gener- lion, has ranked Chanhassen "To the east here, there and one other business al fund budget, meanwhile, is among the five highest-taxed were a couple of old houses stayed. about $7.6 million. metro cities in three of the and what used to be Chanhas- "There was no storm sewer "We've kind of got our- Past four years. sen's old downtown," she system.. The sewer and water selves on a [debt] workout How -did it all happen? added. "There was a liquor mains were probably 30 years schedule," DeJong admitted. Much of it goes back to Chan- store, and a couple of bazs old," Gerhardt said. "We put .The city's subsidy prob- hassen's transformation, , in between the dinner theater in uniform parking lots. We lems threaten to compound less than a generation, from a and Prince, they put Chanhas- put in landscaping. We put in other fiscal issues facing farming community to a see on the map.". sidewallcs." Chanhassen. The city's prop- growing suburb with adown- Don Ashworth, hired in In ~ adjacent industrial erty tax levy devoted to debt town remade from scratch.. 1976 as the first city manager, park, subsidies were given to a service - $1.2 million last Made from scratch was pivotal to the changes. number of companies: United yeaz - is expected to more Ashworth held the job for the Mailing, Instant Web, Victory than double to $2.75 million Herb Bloomberg opened next quarter-century and .Envelope and Rosemount. by 2004. the Chanhassen Dinner The- brought with him a vision for Ashworth answered those. With so many complicated ater in the '60s with the play the downtown - "the basic who thought the city was giv- subsidy deals stretched out "How to Succeed in Business services, banking, food, 'post ing away too much money by over neazly two decades, city Without Really Trying." By the offices. You keep them down- pointing out that most of the officials have trouble even late '70s he headed a city re- town and you'll have [a] subsidy grants were for no. producing a list of who got development authority with downtown." Chanhassen, he more than $50,000 to $60,000. what on a pazcel-by-parcel big plans to build on the the- recalled telling city leaders at The cumulative cost, though, ater's success. the time, was "thinkin wa amounted to millions. basis. "Nobody's been keeping g y a running tally," said Todd Raze most of downtown, too small." "Not a dealbreaker" Gerhardt, the longtime aasis- the panel said, and replace it He also brought with him tant city manager. with hotels, a cinema, shops, an enthusiasm for tax-fi- In 1987, Prince joined the With limited resources to a grocery store and .town nanced subsidies, then a rela- .procession, asking for help for stop the flow of red ink, the squaze. Ring the downtown lively new municipal tool in Paisley Park. The singer,. who city has turned to the state for Huth new roads, the .panel Minnesota. lived in Chanhassen, bought help. .added, and finance the infra- The subsidies enabled cif- land for the studio for The state has awarded structure costs with tax-inere- ies to finance immediate im- $270,000 in 1985. $2.38 million in grants over meet subsidies. For a city with provements to a property, But Prince's deal, like oth- the past two. years to cities just 6,300 people, it was heady usually to a developer's bene- ers, bent an important rule:: that used subsidies and were smfr• fit. The increased tax revenue The subsidy went forwazd caught by new laws that re- Not everyone was con- from the property first retires even though Paisley Pazk duced property tax classifica- Winced it would work, or was the bonds issued for the im- didn't meet a crucial test re- tion rates and the flow of rev- the way to go. Wrote one provements and only then enue to cities from subsidized woman to the local newspa- helps pay for general city, properties. per, "Must we become a county and school district needs. quired by state law.-that the as damage control" against development could not take Byerly's. place without public money. Other companies tined up. Prince's attorneys, according Tazget was pledged $781,000 to court records, did not even in land purchase assistance ask for the subsidy until after and $200,000 for special as- PaisleyPazk was built. sessment costs. A plan fora town district, he estimated, The project later was can- "It was not a dealbreaker," Wendy's and a small office would have a $6.2 million def- celed for other reasons. William Henney, the lawyer building was approved for icit by 2003 if nothing was It wasn't until .October who represented the singer at more than $191,000. done. (A more recent estimate 1999 that the city made a rria- the time, said of the subsidy In another case of after- put that. number at $4 mil- jor shiftin its subsidy policy,: . request. Prince "was doing the-fact action, United Mail- lion). While the market value making affordable housing the: well then. He had the dough ing and Victory Envelope got of property there increased by new focus. City officials. said to put up the studio." additional subsidies although 28 percent from 1996 to 1998, new subsidies are now hard to The city signed a contract they had both been in town a consultant told legislators, obtain. giving Prince's music comps- for years. the gross. amount of taxes col- ny an $87,256 subsidy. Prince The Market Squaze shop- lected there fell by two BI811'1@ g1n1L' in turn promised the studio ping center was even given percent. The shadow cast by the would be worth $5.01 million $5,000 to help promote its. The city told legislators it city's spending lingers, and or more. grand opening.. needed an exemption froth changes to the state's tax sys- Property owners weren't "I don't think we should be state law that limits the uses tem being. considered by the the only ones to benefit di- in the business to do advertis- for property taxes collected in Legislature would likely mean rectly. Lotus Realty and the ing for businesses within the such districts. Legislators said even more red ink. for the Bloomberg Co., which Bloom- city," then-Mayor Don Chmiel no. downtown. berg founded and which still said. He cast the lone dissent. Dave MacGillivray, the Ashworth., who .retired owns the Chanhassen Dinner city's former financial consul- from his city job in December, Theatre building, collected de- ~tting Otlt Of hand tant, said the. math in the lives less than a mile. from the velopment fees as subsidies By late 1998, the city's downtown district is simple. downtown district he created. were granted. Bloomberg wac downtown -despite all the "For every dollaz [the city) re- "I'm very proud of every- a partner in the development new buildings -was hurting.. ceived, they had obligations of thing that's been accom- of the Country Suites hotel Prince had won a court $6," he said. pushed," he said. recently, sit- and owned part of the. land case against the city that yeaz In remaking its downtown, ting in his kitchen. "I'd do the under Mazket Squaze, the which lowered the market val- said MacGillivray, Chanhassen same thing again." strip shopping center that was ue of Paisley Park. City offi- set out to "buy everything, re- He is convinced the down- added. cials insisted Prince had re- duce it to baze land and stazt town's problems "will never Clayton Johnson, the neged on a promise not to over [that's] very ex- become a liability against the Bloomberg Company's execu- challenge the market value as- pensive." general taxpayer." five vice president, defended signed his property. Standard & Poor's, the fi- In December, a .divided the company's role. "Do you A 1997 decision by the Leg- nancial rating. service, sum- council cut Chanhassen's know what downtown Chan- islature to change property tax marized the situation last No- budget by $200,000 and pared hassen looked like in 1986?" classification rates as part of a umber when it reviewed .the $450,000 from the property asked Johnson, who spoke on tax reform movement also city's financial status. The rat- tax levy by tapping reserves. behalf of Bloomberg, who is .took hold. Under the change, ing agency pointed out that The city staff wanted an 18.4 now in his mid-80s. "Have upper-tier commercial and in- Chanhassen's $1.37 billion in percent increase in property you seen pictures?" dustrial property saw their total property value had taxes and the reserves left As the deals mounted, rates reduced by 13 percent. -grown an average of 10 per- alone. The city eazlier can- business owners began to For commercial property- cent in the past four years, but celed a $500,000-a-yeaz dis- ' squabble over who got what. heavy downtown Chanhassen, the city's overall net debt was cretionary .payment to the In 1992, for example, the the change sawed into tax col- also "very high," equal to school district because of the city pledged. a subsidy of at lections. $4,455 for every resident. downtown district's struggles. least $800,000 for a new shop- Then there was the slower- But old habits die hazd. As Even. with the cuts, the ping center- featuring a Festi- than-expected development. recently as 1999, the city property tax levy this year-will val Foods. Then in 1994 it Only now, nearly aquarter- granted a new subsidy to the rise 7.4 percent. pledged $1.1 million to help century later, is the city seeing owners of the eight-screen "You. sat through that [tax- Byerly's put a competing gro- the development of the last Chanhassen Cinema - origi- increment) meeting," .Mayor cery across the street. major parcel in the district. nally built with a subsidy that Jansen, who sided with the "We do not oppose [Byer- "Everybody right now loves same year - so they could staff, told her colleagues.. "I ly's] merely because it is com- to [say] the politically safe expand to 16 screens. mean, you've got that, debt . petition," officials of Festival thing: 'The whole thing is the "For example, if you want looming out there." Foods complained in a letter state's fault,' "said Mark Senn, to see `Waking Ned Devine', I Council member Craig Pe- to the city. "We oppose it be- a former City Council mem- mean, you have to go down to terson responded, 7 don't cause it is proposed as assist- ber. The lazger problem, he some other place to see that," agree with you that it's going ed competition in a market said, was simply that the city theater co-owner Robert to get worse." that is not yet ready for two was too optimistic in its reve- Copeland Sr. explained. "And "It goes back to, Zs your grocery stores." nue projections on the subsi- if you want to see `Life is glass half-empty, or is -your .Festival azgued, at one dized developments. Beautiful'..." glass. half-full?' " he said. point, that if Byerly's got mon- In April 1999, Ashworth "I have to go to the La- "Mine happens to be full." ey, Festival should get more outlined the city's woes for goon" in Minneapolis, replied Mike Kaszuba can be contactr¢~d public money ,to help "serve the Legislature. The down- then-Mayor Nancy Mancino. at mkaszui'~a@starlribunecom '"P~fi z r.: ai 't ki6ii~1~ i ~ ''e ~ . ~ I, t ~ ~ r a ~ ' ~ c~`• ~ x ~~t ~B=~ ~ r`t ~ s ~ . ~ _w. ~ , p~~. ~>H -Star Triune photo by David Brewster Paisley Park, the studio built by singer and Chanhassen. resident Prince, got an S87,256 subsidy from the city -even though the building already had been built by the time he asked for assistance in 1987. Prince later sued to reduce the studio's property taxes. r , r Metro-area cities* with largest percentage ~ { ~x.r~ ~ of property-tax base in tax-increment cistricts a ^ny< ~ ~ > ~a ~ •1 ~ r p 1 otai taX capa~ N dGYI{raLGY to ~ d1~{r1447 ~ % s ~ ~t 1_ Chaska t ~ i. ~ t.~ ~ ; ,7~ ~u ; , $15.9 million 9 ~ Moundsview $4.4 million (27.6%) ~ ~ $7.4 million ` ja ~ ~ ~ ~ ~ Chanhassen $1.6 million (22.2%) ` ~ 'y ~ ~ $24.0 million r ChampBn $5.0 million (21.1%) of j - $12:9 million $2.3 million (18.3%) M Brooklyn P ark ~ Y $46.7 million $7.8 million (16.8%) Highest property taxes ' W. _ Chanhassen had the highest 2000 property taxes on an average- Byerly's got 51.1 million in 1994 to build a downtown grocery priced home among 109 meVo area cities . store -.two years after Festival Foods received $8Q0,000 to Value of averaged-priced home: 5130,000 build one across the street. Festival officials protested the move. Total property taxes: S2,332 *Cities over 10,000 population onty Source: State Auditor's Office, taxes payable 2000; Citizens League. Star Tribune gr~hic by lane Friedmani I'm very proud Uf everythi~~g `t'he longer we can keep it from affecting thf :hat's been accomplished. I'd = ~ ~ ~ ~ ~ tax bills, the longer we can keep them from do the same dung agab.~." z ~ [seeing] the situation we've been put in." Don Ashworth Linda Jansen Former Chanhassen city manager Chanhassen mayor V11.1G~7 Ql~l V~7~7 1r1LL111G~Vt.GI 11Q V G ¦ ¦ usedtax-increment financing Urban bli ht is . for a wide variety of projects re If Olrl ever he y some of which bend or know how to ook break the rules. Here are At 50th and France,. one of St. Lams the Twin Cities' most upscale ParEc ~ w: retail addresses, Minneapolis in the fall of 1997 looked hard ~ New office ~ three examples. and found-some blight. ~ buNdirtg j-1,,,~Ce Developer Tom Lohmann ~ w' j~ 1 of Pinehurst Properties had ~~w- designs for a new two-story ~ ' building on the Minneapolis ` To subsidize a new building, side of the intersection. Then- w. s~stM Minnea olis had to show there was city Council member Steve ~d,~ , ; _ _ ,Q h Minn was a quick convert to decay at a tong intersection.. NO problem. the idea, shepherding apro- w. Sam sr~ ~ ~ w. gan, s~ posal through City Hall that 4 w. sem sc created a $1.8 million tax-in- ' ~ ' crement subsidy for the Bevel- ~ ,r ;Richfield ~w. ssm s~. oper. The $11 million project, ' with U.S. Bancorp and Piper ~ ~ ~ r ~ Jaffray as .the primary office ~ w' ~~n st. tenants, opened in February. From the outset, .city offs- tax-increment subsidies, a re "cials acknowledged that it was newal-and-renovation distric a stretch to describe any part requires just 20 percent of the ~ of the property as blighted - .structures - in this case on. a condition for granting this of the four buildings - to b~ type of subsidy. judged substandard. Four properties had to be The tobacco shop and tan ~ bought and torn down: Asin- Wing salon became the taugel ~ ~ gle-family home, a gas station, An eazlier city memo said th a small, 1970s-style office building "appears to not hav building and. a building that structural deficiencies." But ~ ' = housed a tobacco shop and May 1998 report said it ha. ~ tanning salon. defects in its steel and con "Reaching the {blight) Crete 'beams and a lack c ~ threshold here seems handicapped access. = problematic at this time," Minn, -who called himself rr - ~~~t~~ _ . _ George Kissinger, a Minne- "vocal critic" of excessive sub . - ~ ti ~~r r ~ ~ ~ apolis Community Develop- sidies while he was on th ~ ~ ~ ment Agency official, wrote to council, contends the deal a ~ ~ Minn in October 1997. 50th and France. was wa~rrani - t~ Three months later IGssiit- ed because adjacent Edin ' ,r ~ 1~~-ti= ~ ~ ger had changed his mind. was already subsidizing Bevel _ Following a more detailed in- opment on its side. ~ ~ ~ - spection, he wrote, 50th and "It was a hazd sell to m ~ France met "the minimum colleagues," he added. "[The ~ ~ - 4;, _t ~ thresholds" to be a "renewal said], 'You've got to be kid ~Y L` " ~ ~ si _ and renovation" tax-incre- ding.' " ~ ~ ~j~' ment district. Unlike other -Mike Kaszuba frt. . - _ _ ~ ]~i _ _ _ . r')~ _ i +7 r, ~~i~ j 4. 4 y ~f -jt ' ~ " - 'A„ . "a;`tk.~* of ws';S"tCM!ijw ~,,.+MwMi.'~k r Star Tribune photo by Bruce Bisping At the corner of 50th and France in Minneapolis, an office complex replaced a "blighted" tobacco shop and tanning salon. L~~1JIld V Cl l Dl'lU~C ~ , _ _ ~ - . 3. ~ , - ; c+ ~ . ~~•r'r IM1r'" ~ Isw ~ , . / ~ ~ ,nM:. " . - 1y.. i j: F t W ,j, £ \ 4 P _ ~ II ~t-, ` ~ Star Triune photo by David Brewstier This bridge over Carson's Bay in Lake, Minnetonka will be repaired with $800,000 in tax-increment money, even though R's not in atax-increment district. Deephaven cut a deal with the Legislature to get an exception to state law. ¦ ee aven gene o ~a es aw in or er ore ui a r~ e State laW fOrbldS Not only had the Legisla- ~ ~ taxes all across the city- of ture banned cities from us- ~'~ept'a-"e~' ~ ; Deephaven?" asked Rep. spendingtax- ing tax-increment districts nkuA, a o ~ Ted Winter, DFL-Fulda, increment funds on for .road projects, but the ~ ~ , ~rSO" ~ during a 1998 hearing. Auditor's Office wrote that Bride to be Bay ~ ~ Others, like then-Rep. the Dee haven district rebuilt ~ M on O~eld, DFL-Minne- road projects but p ~ n spent more on administra- ~ apolis, wondered why an af- the city persevered. five expenses than the law F ; ~ soi fluent suburb like Deephaw allowed. ~ ~,~0~ca ` ~ ~ en was creating tax-incre- By 1997 Deephaven had The city's response? It k " M $ ~Ijnnetonka ment districts at all. "There long since improved an area went to the Legislature the ~ ~ ~ must be some limits, he known as Chowen's Corner next year and got the law ' said. using money from atax-in- changed. Deephaven Mayor How- . crement district. "We felt we were victims, Deephaven's tactics illus- and Bennis responded by The .city next wanted to if you will, of circumstance," trate both the reluctance of accusing Orfield of making use tax money from the dis- said Robert Larson, Dee- cities to close tax-increment the issue part of an "attack trict to rebuild a bridge over phaven's city administrator. districts, even after their on the wealthy western Carson's Bay in Lake Min- The city had long purpose is served, and their suburbs." netonka, a span not even in thought that the bridge, willingness to go to the Leg- Under the legislative so- the district. built during the Depression, islature for exemptions to lution, Deephaven closed The state Auditor's Office was unsafe .and too far the laws governing such the tax-increment district, told the city it was illegal to down the state's repair list. districts. but $800,000 from it will be keep the tax district alive - With the advice of its attor- "Why didn't you just used to rebuild the bridge diverting property taxes neys at Dorsey & Whitney, close the district down in beginning this year. from the city, county and the city began in 1992 to set 1991 and put the properties -Mike Kaszuba local school district - to aside tax-increment money .back on the tax rolls and rebuild a bridge. for the bridge. allow people to [pay lower] Signal Hills r~ . _ i , , ~iro 2w = - Star TnbUne phOt0 by David Brewster S23.2 million in subsidies revived Signal Hills shopping center, but subsidized competition kept it from landing a theater. West St. Paul used subsidies to rebuild a mall; Inver Grove Heights used them for a competing mall and to clear trees for a theater. R vi 'zi u I i I x e tali n a hillside into a m t e g p ~3 ~ 12AIy1SEY Half-empty and more than a little frayed gave a $706,000 tax-increment subsidy to ~q St Pau! at the edges, Signal Hills on West St. Paul s Southridge Center, a competing strip.shop- Robert Street was to many eyes in 1996 a ping center om Robert Street less than two _r 52 ~ ~ perfect fit for a subsidy. miles from Signals Hills. a,~~jF;....~~o; Two years later city officials were still Then came the Kerasotes Theatres, a 16- ,C!" Batter Av. trying to interest a developer. in the project. screen complex in Inver Grove Heights that ~ Boarded businesses dotted Robert Street was the centerpiece of a $2.06 million city. " and both the Herberger's and J.C. Penney subsidy in 1997. The Kerasotes project. ac- ` Av. ~ store had closed at Si nal Hills. cordin to Si al Hills' roe mans e West " "We need to save Signal. Hills, and we ment compan~yl Azure Properties quashed. St Paut St Paul need to save our city," said Mayor Michael any hope of getting a multiplex theater at ~ ~ DAKOTA CO. ~ Bisanz, appealing to the Legislature in 1998. their shopping center. ~ _ _ _ _ _ ~ He helped lead a successful move to get The Kerasotes Theatres were carved out s2 several exemptions to the state's tax-incre- of a wooded hillside, with much of the ~S~?f~h'. Eagan ~ take ~ asa ment laws for the ailing shopping center. subsidy spent to flatten land and put. in A year later, a $232 million subsidy streets. Kerasotes • package to turn the mall back into astrip "We had a letter of intent" with another Theatres wer Grove center was approved. Kmart agreed to be- theater owner, said Tom Schuette of Azure f Heights come the anchor tenant, and Signal Hills Properties. "Had we been the-fast to .start now is struggling for a second chance with construction, we would have had the the- . a series of new storefronts. ater and not them." But few noticed what was taking place in "It would seem [tax increment] is better adjacent Inver Grove Heights. used for revitalization than for building in In the. mid-1980s, as Signal :Hills began cornfields," he added. to spiral downward, Inver Grove Heights -Mike Kaszuba