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HomeMy WebLinkAbout06-24-08 City of Lakeville Economic Development Commission Regular Meeting A enda Tuesday, June 24, .2008, 5:00 p.m. City Hall, 20195 Holyoke Avenue Lakeville, MN 1. Call meeting to order 2. Approve May 27, 2007 meeting minutes 3. Presentation on County C/I Market Study 4. Discussion of Business Retention Program 5. .Director's Report 6. Adjourn Attachments: May Building Permit Report Report: Twin Cities ranks 5t" in corporate expansion -Minneapolis/St. Paul Business Journal, May 1, 2008 EDAM Developer -June-July Issue Foreclosure Update Downtown projects in Apple Valley, Burnsville, Lakeville adapt to maintain growth - Pioneer Press, 5/29/2008 The next EDC meeting is scheduled for August 26, 2008. item ~o.... City of Lakeville Economic Development Commission Meeting Minutes .May 27, 2008 Marion Conference Room, City Hall .Members Present: Comms. Matasosky, Vlasak, Emond, Erickson, Schubert, Tushie, Brag, °-'Smith, Pogatchnik, Starfield, Ex-officio member Chamber of Commerce Executive Director Todd Bornhauser, Ex-officio member City Administrator Steve Mielke. Members.. Absent: Ex-officio member Mayor Holly Dahl. Others Present: David Olson, Community & Economic Development:. Director; Adam Kienberger, :Economic Development Specialist, Daryl Morey, Planning Director. 1. Call Meeting to Order Chair Matasosky called the meeting to order at 5:00 p.m. in the Marion Conference Room of City Hall, 20195 Holyoke Avenue, Lakeville, Minnesota. 2. Approve April 22, 2008 Meeting Minutes Motion 08.06 Comms. Tushie/Erickson moved to approve the minutes of the April 22, 2008 meeting; as .presented. Motion carried unanimously. 3. Introduction of New EDC Member Chair Matasosky introduced new EDC member Glenn Starfield. 4. Discussion on Possible Sign Ordinance Amendments The City Council recently directed the Planning Commission to review the current Zoning Ordinance requirements pertaining to commercial sign regulations along the I-35 freeway corridor. The Council's request was initiated as the result of a request for a variance from Comfort Inn motel to install a 60 foot tall freestanding sign on their property. The City Council has tabled action on this variance. request in order to receive input from the .Planning Commission on a possible ordinance amendment. The current maximum freestanding sign height allowed in the freeway corridor area is 30 feet except for commercial uses that have more than 100,000 square feet of Economic Development Commission Meeting Minutes May 27, 2008 building floor area. In those situations, the maximum height-for a freestanding sign is 50 feet. Daryl Morey reviewed a memo from the Planning Department that responded to the Planning Commission's direction on this issue. The memo includes a summary of commercial sign regulations for thirteen Metro area suburbs. Comma Smith stated that the Comfort Inn sign variance issue was mainly due to the low elevation of the property and the City should do what it can to promote business. Comm. Tushie asked if there was a topography provision in the current ordinance. Mr. Morey responded that there wasn't but that the Freeway Corridor District already allows taller and larger signs that what is allowed in the C-3 zoning district. Comm. Brantly asked if it was .possible to consider sign heights from a reference level of the freeway. Mr. Morey replied .that the sign heights might seem fine from the freeway level but could look extremely tall from the ground level adjacent to the business. Comm. Emond added that when people travel they are typically looking for signage for their destination. Comm. Smith asked how far below the freeway the Comfort Inn property is. Chair Matasosky responded that it is about sixteen to twenty feet below the freeway grade. Comm. Tushie .noted that Lakeville's C-3 district sign heighf of twenty feet seems kind of short fore some areas. He then asked if electronic signage was being revisited in the sign ordinance changes. Mr. Mielke said that electronic signage might be revisited in the future, but not as a part of the current possible sign ordinance amendment. Mr. Mielke asked what the tree heights are surrounding the Comfort Inn. Mr. Morey responded that the Comfort Inn-wants signage that is above both current and future tree heights on their site. Comm. Vlasak asked about locating a sign on top of a berm to add some additional height to what is currently allowed. 2 Economic Development Commission Meeting Minutes May 27, 2008" Mr. Morey responded that that is possible, but the berm would have to meet ordinance slope requirements. Comm. Smith noted that if an .ordinance amendment were to base sign height on relative freeway elevation, places like Target might actually have to have shorter signage. Comma Pogatchnik added that there is still a lot of undeveloped C-3 property located. within the Freeway Corridor District and we need-to be aware of that. Comm.. Erickson asked what the current Comfort Inn sign height is. Mr. Morey replied that it is thirty feet. Comm. Pogatchnik stated that the existing requirements must have been put in place for areason-when they were originally adopted. Mr. Olson added that the Holiday Inn & Suites and` Cracker Barrel both have signs from previous variances granted to them. He continued by saying that the Comfort Inn wishes to be visible from both north and southbound traffic and that over time, things such as the freeway ramps and interchanges can change. An example is the new County Road 70 bridge which will be 5 feet higher than the current bridge. Comm. Pogatchnik asked if the City has ever lost a business prospect due to our sign requirements. Mr. Olson responded that there haven't been any we are aware of, but Best Buy would not have located where they did if they weren't a part of the Timbercrest PUD and able to co-locate on the SuperTarget sign. Comm. Tushie asked if Comfort Inn has negotiated with adjacent businesses to co- locate a sign. Chair Matasosky said that Comfort Inn approached MN Tile but they did not want to co-locate a new sign. Comm. Tushie suggested the possibility of allowing for sign "clustering" in certain areas along the freeway for area businesses. Mr. Mielke asked if other. communities look at the type of business for their sign requirements. Mr. Morey responded that they don't with the exception of Lino Lakes, which allows a taller sign for motor fuel facilities. 3 Economic Development Commission Meeting Minutes May 27, 2008 Comm. Tushie asked about locating a sign. on the roof of the building. Mr. Morey responded that roof signs are not allowed. Comm. Tushie stated that he thinks property elevation should be considered in the sign ordinance. Comm. Smith also- stated that the grade of the freeway should be considered in the sign ordinance. Comm. Pogatchnik added that whatever is done, to be careful about the precedent set for all future development along the freeway. Comm. Brantly -asked about considering the elevations of the undeveloped parcels -along the freeway. Mr. Morey added that the Planning Commission will also consider business use as part of any revisions to the sign ordinance. Mr. Mielke .cautioned that the current Best Buy sign can be .seen by some residences along Lake Marion and he has received some complaints. If higher signage is allowed, we will likely hear from the residential community. Comm. Tushie restated the' idea of considering sign. clusters for the undeveloped areas along the freeway. 5. Update on Lakeville Transit Service Agreement Mr. Olson and Mr. Mielke provided an update on the approved- transit service agreement and the,~ext steps for Lakeville. On May 5, 2008 the City Council approved an agreement with the Metropolitan Council that will result in the construction of park and ride facilities on both 1-35 and Cedar Avenue in 2009 which was consistent with the recommendation of the EDC. A copy of the presentation that City Administrator Steve Mielke. provided to the City Council on this issue is attached. The agreement (copy attached) also provides for an additional northbound lane being- constructed on I-35 from the I-35 split to the Burnsville. Parkway. This agreement is contingent on approval of transit operating funds from the County Transit Investment Board (CTIB) .which will be allocating the new 1/4 cent sales tax that was approved by the State Legislature and .the Dakota County Board. Comm. Brantly asked if there was a chance the CTIB wouldn't approve the deal. 4 Economic Development Commission Meeting Minutes May 27, 2008 Mr. Mielke responded that it would be unlikely as Lakeville needs to be in the Transit Taxing-District for the UPA money to be utilized. Comm. Erickson commented that -with the cost of fuel continuing to rise, trap-sit is a good thing. -Comm. Tushie added that the transit will be good for the area. He asked if services will be .increased in Lakeville as demand increases. Mr. Mielke responded that services could be increased as demand increases and funding is available. Comm. Emond asked if the Chamber of Commerce. opposition to Lakeville entering the Transit Taxing District was alleviated by the City Council requiring the. City tax levy be reduced by an amount equal to the new Met Council transif°tax. Todd Bornhauser replied that it was. Mr. Mielke added that the biggest part of the transit proposal is likely the addition of the third lane in Burnsville. This will help many more commuters than just those who ride the bus. 6. Review on Legislative Actions Regarding Economic Development Adam Kienberger reviewed an update from EDAM on the recently concluded legislative session. The 2008 Legislature adjourned after reaching a deal among legislative leaders and the Governor that resolves the $935 million budget deficit. The Governor remained steadfast in protecting the JOBZ program. While the program remains intact in the 2008 tax bill, its term was not extended and additional restrictions were added. EDAM was successful in increasing thresholds for grants and loans under the business subsidy law to $150,000. This threshold also applies to the public-hearing requirements. Some reporting will still be required at the current law lower thresholds, and projects will still need to meet job and wage criteria. Mr. Mielke noted that in this legislative session the budget deficit was fixed only by cutting one-time dollars. He indicated that long-term the State budget deficit will continue to grow and remain a concern. 5 Economic Development Commission Meeting Minutes May 27, 2008 Mr. Bornhauser added that the fiscal disparities proposal was not approved this session. Mr. Mielke elaborated by explaining fiscal disparities and that the proposal for the Mall of America was defeated. He also added that while Lakeville is currently on the benefitting side of fiscal disparities, based on our growth Lakeville willlikely become a payer into the. system sometime in the future. 7. Director's Report Mr. Olson reviewed the Director's Report.... 8. Adjourn The meeting was adjourned at 6:00 p.m, RespectfuWy submitted by: Attested to: Adam Kienberger, R. T. Brantly, Secretary Economic Development Specialist 6 hem No. City. of Lakeville ' ~ Community and Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community and Economic Development Director Copy: ,Steve Mielke, City Administrator Adam Kienberger, Economic Development Specialist bate: June17, 2008 Subject: Dakota County Commercial and Industrial Space Market Study In 2007, the County Board adopted six Strategic Initiatives for Economic Development in Dakota County in order to help enhance and coordinate the - economy at a regional level. One of those initiatives relate to coordinating strategic infrastructure and land development, including Brownfield redevelopment, telecommunications and commercial/industrial development. The CDA hired Maxfield Research to complete acounty-wide commercial-industrial market study to assess supply and demand in all cities and townships through 2030. That study was completed in May of 2008 with conclusions made for three categories: commercial/retail, office and industrial development.. It is the CDA's goal that local jurisdictions will use this study in the development of their own economic development growth strategies A copy of the full report is included in your packet. Dan Rogness of the Dakota County CDA and Jay Thompson of Maxfield Research will be present at the meeting to provide an overview of the study findings and in particular how these findings are applicable to Lakeville. A .Market Study for Commercial and Industrial Space in Dakota County, Minnesota Prepared for: Dakota County Community Development. Agency Eagan, Minnesota April 2008 ~ " ~ , 615 First Avenue NE a Suite 400 Minneapolis, MN 55413 612.338.0012 r` g Kesearc~Y~ lnc, April 11, 2008 Mr. Dan Rogness Community Revitalization Department Dakota County Community Development Agency 1228 Town Centre Drive Eagan, MN 55123 Dear Mr. Rogness: .Attached is the study A Mapket S~dy fvh Commercial and industrial Space in Dakota County, Minnesota conducted by Maxfield Research Inc. The study provides demand estimates for commercial/retail, office, and industrial space in the County from 2008 to 2030, as well as for the amount of land needed to accommodate the new space. The demand estimates are presented in five year increments for the County's 11 largest communities and the remainder of the County as a whole. The market study finds that projected household and job growth, among other factors, will create demand for an additional 10 to 12 million square feet of commercial/retail space in the. County between 2008 and 2030.. Demand was projected for an additional five to six million square feet of office space and 6.5 to 7S million square feet of industrial space. In all, about 2,200 acres would be needed to accommodate all of the future commercial and industrial space. Detailed information regarding commercial and industrial demand by community over five year increments through 2030 can be found in the Demand Analysis and Recommendations section at the end of the report. We have enjoyed performing this market study for you and are available should you have any questions or need additional information. Sincerely, MAXFIELD RESEARCH 1NC. t Jay Thompson Andy Greene Vice President Research Analyst Attachment 612-338-0012 (fax) 612-904-7979 615 First Avenue NE, Suite 400, Minneapolis, MN 55413 www.maxfieldresearch.com .TABLE OF CONTENTS. Page SUMMARY OF FINDINGS 1 Introduction 1 Key Findings 1 CommerciaURetail 2 Office 3 Industrial 4 PURPOSE AND SCOPE OF STUDY 5 Study Impetus 5 Scope of Work 5 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS 6 Introduction 6 Population and Household Growth Trends and Projections 7 Population Age Distribution Trends : 11 Consumer Expenditure Patterns 13 Employment Growth Trends 15 Gross Retail Sales 23 COMMERCIAL AND INDUSTRIAL DEVELOPMENT TRENDS 25 Introduction 25 Overview 26 Retail/Commercial Development Trends 27 Office Development Trends 33 Industrial Development Trends 39 Interview Summary -Community Development Staff 50 Interview Summary -Area Brokers 51 Factory Direct and E-Manufacturing Trends 52 Green Building Trends 52 Economic Shifts 54 COMMERCIAL AND INDUSTRIAL LAND SUPPLY 55 Introduction 5 5 Overview 5 6 Commercial Land by Community 57 Office Land by Community 59 Industrial Land Development Trends 60 Vacant- Commercial and Industrial Zoned Land 64 TABLE OF CONTENTS (continued) Page DEMAND ANALYSIS AND RECOMMENDATIONS 69 Introduction 69 Projected Demand for Retail/Commercial Space 70 Projected Demand for RetaiUCommercial Land 72 Projected Demand for Office Space 73 Projected Demand for Office Land 75 Projected Demand for Industrial Space 76 Projected Demand for Industrial Land 78 LIST OF TABLES Table .Number and Title Pa e 1. Population Growth Trends and Projections, Dakota County, 1990 - 2030 8 2. Household Growth Trends and Projections, Dakota County, 1990 - 2030 9 3. Population Age Distribution Projections, Dakota County, 1990 to 2030 12 4. Aggregate Consumer Expenditures by Residents, Dakota County, 2007 - 2012 14 5. Employment Growth Trends and Projections, Dakota County 1990 -.2030 16 6. Covered Employment Trends, Dakota County, 2000 - 2006 20 7. Number of Businesses by Size of Business, Dakota County, 2005.......: 21 8. Gross Retail Sales; Dakota County Large Communities, 2000 & 2005 23 9. Retail Space Vacancy, Dakota County, 2000 to 2007 27 10. Commercial Space by Community, Dakota County, 2000 and 2006 28 11. Commercial Space Development Trends, Dakota County, 1980 - 2006.: 32 12. Office Space Vacancy, Dakota County, 2000 to 2007 34 13. Office Space by Community, Dakota County, 2000 and 2006 35 14. Office Space Development Trends, Dakota County, 1980 - 2006 38 15. Industrial Space Vacancy and Absorption, Dakota County, 2000 to 2007 40 16. Industrial Space by Community,. Dakota County, 2000 and 2006 : 41 17. Industrial Space Development Trends, Dakota County, 1980 - 2006 45 18. Industrial Space Development by Type of Space, Dakota County, 1987 - 1996 & 1997 - 2006 46 19. Industrial Space Development by Type & Community, Dakota County, 1987 - 1996 48 20. Industrial Space Development by Type & Community, Dakota County, 1997 - 2006.49 21. Commercial Land by Community, Dakota County, 2000 and 2006 58 22. Office Land by Community, Dakota County, 2000 and 2006 60 23. Industrial Land by Community, Dakota County, 2000 and 2006 61 24. Land Absorption by Industrial Types, Dakota County, 1987 - 1996 & 1997 - 2006 62 25. Developed Land by Industrial Types and Community, Dakota County, 1987 - 2006 64 26. Vacant Commercial and Industrial Zoned Land, Dakota County, 2007 66 27. Commercial Demand by Community, Dakota County, 2008 - 2030 71 28. Demand For Commercial Land by Community, Dakota County, 2000 - 2030....... 72 29. Office Demand by Community, Dakota .County, 2008 - 2030 74 30. Demand For Office Land by Community, Dakota County, 2000 - 2030 75 31. Industrial Demand by Community, Dakota County, 2000 -2030 77 32. Demand for Industrial Land by Community, Dakota County, 2000 - 2030 78 SUMMARY OF FINDINGS Introduction 1Vlaxfield Research Inc. was engaged by the Dakota County Community Development Agency (Dakota County CDA) to undertake a market study that projects the amount of commercial and industrial space and land needed in the County through 2030. The study provides demand esti- mates for the County's 11 largest communities and the remainder of the County as a whole. Detailed. calculations of commercial/retail, office, and industrial demand from 2008 to 2030, pre- sented in five. year increments, can be found in the Demand Analysis and Recommendations. sec- tion of the report. The following are key highlights from the commercial and industrial market analysis. Key Findings 1. Dakota County is experiencing strong household growth as the urban fringe of the Twin Ci- ties Metro Area expands further into the County. An additional 53,000 households are pro- jected to be added from 2008 to 2030, which will create demand for more retail and services in the County. 2. While 53,000 households are projected to be added between 2008 and 2030, the growth rate is slower than previous decades, coinciding with slower growth throughout the Twin Cities. Thus, annual demand for new commercial and retail space will be less than in previous dec- ades. 3. Outer-ring suburbs will see the greatest growth between 2010 and 2030. These include Lakeville, Rosemount, Farmington, Inver Grove Heights, and Apple Valley. Strong house- hold growth in these communities will lead to greater potential to support additional retail and commercial uses. 4. The number of jobs in Dakota County is projected to grow by about 58,000 between 2008 and 2030 (+31%). This is a much greater growth rate than the Twin Cities Metro Area (17%), but slower than during past decades. 5. The aging of the population will contribute to slower job growth rate between 2010 and 2030. Compared to past decades, the ratio of people entering the labor force to those leaving the labor force will narrow. This slower job growth will have an impact on the growth of businesses .and hence, the need for new commercial and industrial space -will also slow. 6. Communities in the northern part of Dakota County that. are reaching housing development capacity are not projected to grow much through 2030 in terms of population and house- holds. However, because these northern communities have good access to a large labor force, they are still projected to draw employers, resulting in greater job growth. MAXFIELD RESEARCH INC. 1 SUMMARY OF FINDINGS 7. In 2006, Dakota County had 78.7 million square feet of commercial, office, and industrial space with industrial being the greatest (50.8%) followed by commercial (30.9%) and office (18.3%). 8. From 2008 to 2030, it is expected that the demand for office space will grow the most, by 49.3% (from 14.4 to 21.5 million square feet), followed by commercial at 48.1% and indus- trial at 20.3% (from 40.3 to 48.5 million square feet). CommerciaURetail 9. From 2000 through 2006, approximately 260 commerciaUretail buildings totaling 5.6 million square feet were added in the County, or almost one-quarter of the County's total space. 10. The rise of big-box stores has been a retail trend over the past decade throughout the Nation and Twin Cities. Since the beginning of this decade, over one-third of the commercial space added in Dakota County has been big-box stores such as SuperTarget, Super Wal-Mart, Sam's. Club, Gander Mountain, and HOM Furniture. 11. Demand was calculated for an additional 10.5 to 12.0 million square feet of commercial and retail space in the County from 2008 to 2030. This calculated demand equates to about 2.5 million square feet every five. years between now and 2030. However, demand will be great- er during the beginning of next decade and then slow through 2030 as household growth slows. 12. Total projected demand for commerciaUretail space and land in Dakota County, ranked by community, from 2008 to 2030 is as follows: Lakeville = 2,900,000 Sq. Ft. 250 Acres Apple Valley = 1,900,000 Sq. Ft. 160 Acres .Inver Grove Heights = 1,575,000 Sq. Ft. 135 Acres Rosemount = 1,475,000 Sq. Ft. 125 Acres Farmington = 875,000 Sq. Ft. 70 Acres Eagan = .750,000 Sq. Ft. 65 Acres Burnsville = 676;000 Sq. Ft. 60 Acres Hastings = 675,000 Sq. Ft. 55 Acres Mendota Heights = 175,000 Sq. Ft. 15 Acres West St. Paul = 150,000 Sq. Ft. 15 Acres South St. Paul = 125,000 Sq. Ft. 10 Acres Remainder of County = 50,000 Sq. Ft. 5 Acres Total = 11,325,000 Sq. Ft. 965 Acres 13. Demand for retail/commercial space is projected to be greatest in Lakeville. Lakeville will have strong household growth, and it currently has less retail space per household than other more mature communities in the northern part of the County. MAXFIELD RESEARCH INC. 2 SUMMARY OF FINDINGS .Office 14. Dakota County had an inventory of about 14.4 million square feet of office space in 2007. Nearly half of the space was located in Eagan.(7.0 million square feet). Burnsville and. Men- dota Heights had a similar amount of space (about 1.8 million square feet). Overall, a dis- proportionate amount of the office space is located in the northern most portion of the Coun- ty, indicating strong appeal of this area for office tenants versus more distant locations. 15. Most of the demand for office space in the County is from smaller businesses seeking spaces with less than 5,000 square feet. Almost three-quarters of the County's Financial Services & Real Estate and Professional and Business Services firms have fewer than five employees. 16. There are eleven corporate office buildings in Dakota County; all are located in Eagan. These buildings include, among others, Northwest Airlines, Blue Cross Blue Shield, West Group, Unisys Corporation; and Ecolab. 17. From 2000 to 2006, Dakota County added an additional 3.5 million square feet of office space. Eagan added the most space, totaling approximately 1.4 million square feet. 18. Demand was projected for an additiona16.5 to 7.5 million square feet of office space in Da- kota County between 2008 and 2030 to accommodate office employment growth. Demand will be greater during the beginning of next decade and then slow through 2030 as employ- ment growth slows. 19. Total projected demand for office space and land in Dakota. County, ranked by community, from 2008 to 2030 is as follows: Eagan = 2,500,000 Sq. Ft. 215 Acres Lakeville = 1,175,000 Sq. Ft. 100 Acres Inver Grove Heights = 800,000 Sq. Ft. 70 Acres Mendota Heights = 725,000 Sq. Ft. 60 Acres Apple Valley = 700,000 Sq. Ft. 60 Acres Burnsville = 600,000 Sq. Ft. 50 Acres South St. Paul = 125,000 Sq. Ft. 10 Acres Farmington = 125,000 Sq. Ft. 10 Acres Rosemount = .125,000 Sq. Ft. 10 Acres Hastings = 100,000 Sq. Ft. 10 Acres West St. Paul = 75,000 Sq. Ft. 5 Acres Remainder of County = 50,000 Sq. Ft. 5 Acres Totat = 7,100,000 Sq. Ft. 605 Acres 20. Demand for office space is projected to be greatest in Eagan. Eagan is highly attractive for larger office tenants because of its excellent highway access, close proximity to .the airport, and short distance to the core of the Twin Cities. Mendota Heights and Burnsville also have good locations but have little remaining land available for new office space. MAXFIELD RESEARCH INC. 3 SUMMARY OF FINDINGS Industrial 21. Dakota County experienced job growth during the first half of this decade in about every in- dustry sector except manufacturing. This is a trend that has been experienced by most places in the Country, as manufacturing declined sharply after the recession that began in 2001.. The decline of manufacturing employment is a trend that is likely to continue for at least the next few decades in the Twin Cities. 22. Dakota County had an inventory of about 980 industrial buildings with about 40 million square feet of space in 2007. Eagan (13.5 million square feet) and Burnsville (8.9 million square feet) account for 55% of the County's total industrial space. 23. A total of 17.8 million square feet of industrial space was added in Dakota County over the past 20 years (1987 to 2006). Of this total, 79% was warehouse space and 15% was manu- facturing space. Some of the strongest demand for industrial space is among wholesale trade, trucking, and storage businesses servicing the Minneapolis-St. Paul International Airport. 24. From 2000 to 2006, Dakota County added an additional 4.2 million square feet of industrial space in 148 buildings. Of this total, Eagan added 1.4 million square feet followed by Burnsvillewith about 940,000 square feet. 25. Demand is projected for about 7.6 to 8.7 million square feet of industrial space in Dakota County between 2008 and 2030 to accommodate industrial employment growth. Demand will be greater during the beginning of next decade and then slow through 2030 as household and employment growth slows. 26. Total projected demand for industrial space and land in Dakota County, ranked by commu- nity, from 2008 to 2030 is as follows: Lakeville = 2,300,000 Sq. Ft. 235 Acres Eagan = 2,175,000 Sq. Ft. 230 Acres Inver Grove Heights = 1,100,000 Sq. Ft. 115 Acres Burnsville = 725,000 Sq. Ft. 75 Acres Rosemount = 475,000 Sq. Ft. 50 Acres Mendota Heights _ .375,000 Sq. Ft. 40 Acres Apple Valley = 325,000 Sq. Ft. 35 Acres Farmington = 300,000 Sq. Ft. 30 Acres South St. Paul = 225,000 Sq. Ft. 25 -Acres Hastings = 150,000 Sq. Ft. 15 Acres West St. Paul = 25,000 Sq. Ft. 5 Acres Remainder of County = 50,000 Sq. Ft. 5 Acres - Total = 8,225,000 Sq. Ft. 860 Acres MAXFIELD RESEARCH INC. 4 PURPOSE AND SCOPE OF STUDY Study Impetus Maxfield Research Inc. vvas engaged by the Dakota County Community Development Agency (Dakota County CDA) to undertake a market study that projects the amount of commercial and industrial space and land needed in the County through 2030. The study provides demand esti- mates for the County's 11 largest communities and the remainder of the County as a whole. In- formation examined in the market study includes household and employment growth trends and characteristics, current commercial/industrial market conditions, and development rends of commercial and industrial space and land. Based on the analysis, demand is calculated for commerciaUretail, office, and industrial space in five year increments from 2008 to 2030. The amount of land needed to accommodate the pro- jected commercial and industrial space is also calculated. These calculations can be used by communities to estimate the amount of land to bring on-line in five year increments through 2030 to balance demand with supply. Scope of Work The scope of this study includes: ? an analysis of the demographic growth trends and characteristics of the County to 2030, ? an analysis of overall employment growth projections to 2030 for the County, including in- formation on business growth by industry type and size; ? an examination of development trends for commercial and industrial space for the County, its 11 larger communities, and the smaller communities and townships as a whole; ? an analysis of commercial and industrial market trends, demand by location, technology trends, and other key trends within the County based on interviews with key experts; ? demand calculations for commercial/retail, office, and industrial space in five-year incre- ments through 2030 in each of the County's 11 larger communities and the smaller com- munities and townships as a whole; ? calculation of the amount of land needed to bring on-line in five-year increments to accom- modate the commercial and industrial demand. The report contains primary and secondary research. Primary research includes interviews with commercial brokers and developers, economic development specialists, and other experts in- volved in the commercial/industrial and land markets in Dakota County. Secondary data, such as from the U.S. Census or Metropolitan Council, is credited to the source, and is used as a basis for analysis. Much of the secondary data in this report is commercial and industrial property infor- mation provided by the Dakota County GIS Department. Property information analyzed in- cludes type of space, year built, finished square feet, lot size, and location. MAXFIELD RESEARCH INC. 5 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS Em to merit and Demo- p Y ra he Anal sis g p Y Introduction This section of the report examines. factors related to the demand for commercial and industrial space in Dakota County, Minnesota. Included in this section is an analysis of: / population and household growth trends and projections, / population age distribution trends / consumer expenditure patterns; 1 overall employment growth trends; / covered employment trends; / growth of businesses by type .and size of business; and / gross retail sales trends. This section of the report includes totals for each of the larger communities within the County as well as for the smaller communities and townships collectively. MAXFIELD RESEARCH INC. EMPLOYMENT AND DEMOGRAPHIC ANALYSIS Population and Household Growth Trends and Projections Tables 1 and 2 present population and household growth trends and projections for Dakota County from 1990 to 2030.. The data from 1990 and 2000 is from the U.S. Census, while the 201.0 through 2030 projections are based on Metropolitan Council projections. Some of the pro- jections were adjusted by Maxfield Research Inc. for individual communities based on recent development trends and loGa1 forecasts of growth. Key findings from Tables 1 and 2 are: ~ Dakota County is projected to add approximately 147,000 people from 1990 to 2010. Be- tween 2010 and 2030, growth is projected to slow, coinciding with slower growth metrowide. The County is projected to add approximately 95,000 people between 2010 and 2030. ~ Communities on the fringe of the urbanized core of the Twin Cities will see the greatest growth between 2010 and 2030. These include Lakeville, Rosemount, Farmington, Inver Grove Heights, and Apple Valley. Strong household. growth in these communities will lead to greater potential to support retail and commercial uses. ~ A primary reason for the slowing growth is the aging of the population. As the population ages, the average household size is projected to decrease. Overall, this will have an impact on the potential to grow the labor force in the future. As shown below, Dakota County's av- erage household size is projected to steadily decline from 2.8 people per household in 1990 to 2.47 in 2030. The average size still remains higher than the Metro Area, which contains older populations in Minneapolis, St. Paul, and in well as more mature suburbs. Average Househld Size (Number of People per Household) 1990 2000 2010 2020 2030 Dakota County 2.80 2.71 2.60 2.52 2.47 Metro Area 2.61 2.59 2.51 2.45 2.42 ~ Communities in the northern part of Dakota County that are reaching development capacity are not projected to grow much through 2030 in terms of population and households. How- ever, because they have good access to a large labor force, they are still projected to draw employers, resulting in greater job growth. For example, the populations of Eagan and Burnsville are projected to grow by 3% and 6%, respectively, between 2010 and 2030;. at the same time, the numbers of jobs are projected to grow by 21% and 11%, respectively. MAXFIELD RESEARCH INC. 7 01. 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N l~ OO l~ M O O1 O\ 00 O ~ ~(1 OO N O~ ~ Y_ N .r N ~n N ~ C~ d' ~ oo M \D N rt l~ N ~ ~ h O .--i l~ vi V1 N 7 O\ 00 O O~ ^ vl VJ ~ .~.i N N N • v N ~ 7 W O v U A = z A z .o ~ ~ ~ ~ z ~ ~ ~ W W .an ~ o _ ~ ~ ~ x ~ o a N v A ~ o o~ x a _ i V „ ~ W W -d a°iwwx.~.a~r~r°3r w A ~ v°a ~ 00 ~ ~ l~ O ~O o0 o0 7 O~ r V1 .ti ~C 01 N M O~ \O N 00 V1 00 00 00 l~ cY l~ O~ ~t N~ ~O ~h N ~O ~O N M N N U O a M O N 0 0 0 0 0 0 0 0 0 0 0 0 0 O O O p 0 0 0 0 0 0 0 0 0 0 0^ ~--i ~n N O n O M~~ n n '*i O O ~ ~ M N ~ M V' ~ ~ ~ N ~ z N O M ~ Q~ ~ M M O~ O~ d: l~ ~O 00 ~ N N M N O~ l~ C~ l~ V ~n 00 ~ O M. ~ N l0 ~ ~ M 00 ~L ~ `G M O C4 O N ~ U1 l~ l~ M Q~ 0~~ 01 N 00 in -t v~ O~ l~ ~ N O E M M N N M 'ch N ~ ~D O ~ C .-i ~ ~ v'i M \O N v'i N M N Z b N M O O O O O O O 0 0 0 0 O O O O 0 0 0 0 0 0 0 0 0 0 0= O O M F. v1 l~ O V'1 ~A O ~!1 O ~ O ~ JC M ~D U M l~ oo Q~ N N oo M +n M O~ 01 OC O O~ W O N N N ^-a M O 01 ti N N 7 p A 0 0 0 0 0 0 0 0 0 0 0 0 O O O Q h 0 0 0 0 0 0 0 0 0 0 0- Q~ 01 l~ O O~ 0 0 7 00 N ~D M 00 l^ 00 A B M N N N N~ .~-i N d•. 00 ~ x o0 a M O W W O N N U ~4 d F ~ Fx;p~ 00000000000 0 0 0 0 00000000000 - o~ c~ o0 3 ~ .-i O ~ M ~ ~ 00 O N ~ O M ~ it ~ O~ ~n N ~ VO ~ 00 7 O ~ 00 00 00 rt rl ~ A N N N N .r N i~~ b ~ , ~ ~ H ~ ~ ~ A a O M O\ O n~ W N M Vl r- ~ rl ~ ~ x ~ oo n ~ ~ v, o t~ ~r ~ d- co ~ ~ 5 ~ O ~ N N ~ VO M ~ ~ 00 00 ~ ~ M ~ V N .--i O R U C x x ~ ~ A N N ~O O O v1 O n ~ M ~ O iG. O d' O ~F o0 00 M l~ O~ 7 N O N ~n r p~ ,--a ~ ~ N ~ ~ M N oo M vi 00 vi .--i O v O w ~ z A A z o ~ E.r r ~ ~ z W ° y o ~ y c W ~ ~ ~ 'on 4V., ~ ° ~ j CL c~ ; v},~ o R ~ ~ A u ~ W ¢wwwx~a~o:v~3 x A ~ ~ -EMPLOYMENT AND DEMOGRAPHIC ANALYSIS Household Growth Projections Dakota bounty .2000 to X030 Ld~lale ~ ~ sou~>r Household Gro~•th I~:,~~i ~ttp~~l zooo to zo3a ~I~~,~i~~~'.~ ~~~Ilu_hit - IQ,~~~} t~ ~3Q00 _ 5,000 tCl ~0~)~0 i ' _ I~i~ c~ r ? 10~ ~l7 i':~_:~„ ` ~ ; ~ ? -100 tc~ 1.00 'ate n~,~,i,~«; ~ - , I Iiui,u~~illc o-~ - ~~,ple k~~.cninunl ~ - ~~~'eTiille~ ~ ~ Nnun per i a. }1,1;lin,, _ ~ie•~•~" cwr \ j-> ~ ~ ,f )`'.i~ eill13 "Lakeville iiil'ii` ~ ~ erro>ll~on t~Liishm ~ ; Fl~riuiu_i„u ~ _ _ ~ ~Ha~iipteai _ h nlle~7~~~ Fmd.a ~'clle Roclc Haii~pton r _ I hui~_l.r I ~ i Ntiulnlph _ 1 ~_rreen~~tile ~~-ateif,nl tictot.i Sources: ~ i~ tr~p~~litan C~unarl, _ _ ~ Iastield Re:,e~irch liau: MAXFIELD RESEARCH INC. 10 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS Population Age Distribution Trends Table 3 shows the age distribution of Dakota County's population in 1990 and 2000, and pro- vides estimates for 2007 and projections for 2010 to 2030. The 1990 and 2000 distributions are- derived from the U.S. Census, while the estimates and projections were made by Maxfield Re- search Inc. based on data from the State Demographic Center and Claritas Inc. The following are key trends noted in the age distribution of Dakota County's population: / With the aging of the baby boom generation, the greatest growth in Dakota County from 2007 to 2030 will be among people age 65+, as their population is projected increase by ap- proximately 62,000 people in the 23 years. / As is shown in Table 5, employment figures are projected to plateau as the 65+ senior popu- lation continues to age and retire from the workforce. The future participation rate of seniors in the labor force is unknown, however. Some seniors without sufficient savings may con- tinue to work; but those seniors that have accumulated wealth may limit or cease their partic- pation in the labor force. / The chart below shows the strong growth projected in the 65+ adult population through 2030.- . The 65+ age group accounted for approximately 10% of the adult population in 1990 and is projected to grow to almost 25% of the adult population by 2030. Senior Population Trends Dakota County, 1990 to 2030 I ~ 0,000 - _ ~ - - 30.0° i tti0,000 ~ 25.0°%~ c 80,000 20.0% I d ~I o+0 60,000 15.0° 4:, 0 40,000 10.0°~ 20,000 ~ ,.U^6 0 ~ - ~ - - ~ ~ ~ , ~ i t9~,n _ 2onn ao>o _ _ 2o2n aoso Age 65+ ~-Age 65+ percent of adult population 1 MAXFIELD RESEARCH INC. 11 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS TABLE. 3 POPULATION AGE DISTRIBUTION PROJECTIONS DAKOTA COUNTY 1990 - 2030 1990 2000 2007 2010 2020 2030 Arl+le Valley 11,984 13,529 14,980 15,602 15,657 14,850 Iiurns~~ille 11,40-~ 1~.7(~6 1~1.~5~ I;.?q~ li_lh~ 13_~?I E:aa;m I-}.u~i- ~~_(rii, li,,~~~n 1~.~~-(~ I-1."ii I._}~i) t armington I.RS? 1,2UR E~.f);D E,.~?ll -,~hU ti.L~15 In~cr Gn~~~u Ilei_hts b,,_ . ~.1 ~.ll?1 R,(~S~ y,rll ; ~~.'~19 Laktc~llr ~.~4ii I~.~n~i 1-?~I I~.I-1,~ _~_;i,? _,.--t4 Ylendote Il~lgllu ~_$S~ I j? ~.K I l ~.(~i» ~,K 15 ?.`~1 ROSUIntWnl _.~~i„ ~.I;I ,.auk -,ri-_ ~.n~i> I~i.iuij youth St. Paul _,~~0 ~.L'i~ ~_~a-3 #,~>U -1.(~i~ 4.8'i~ West St. Yaul 3,952 4,095 3,931 3,86u 4,lyu 4,455 Large Cities 77,082 98,719 101,078 102,090 109,588 112,643 Remainder of Co, 4,720 5,014 5,037 5,047 5,643 6,812 Dakota Coun 81,802 103,733 106,116 107,137 115,232 119,455 Apple Valley 21.717 29.492 36,221 39,105 40,572 37.973 l;urne~illc 34.9ili ~}O,OV6 4G.ll? -3(~.»-~ iq.;~~ ;k.(1?f, EaQiln -1-4_~~~li -l~.-n11 ~~ii ;~~'.-l~ij - Farmincton ,-li~~ _,1r,~ l l?3.~ I~.ti~~ IS.U~~ ~l~.ii?ij Hastinc~ `~.-4-I Il.li~3 I,.>~.~ I~.nl~i li,.~~~> I~.3u0 ImcrClro~u}Ici~,'his 1-1.~~, I?.~~1} ~Lit,b ?(~_'~1i~ ~h.b41 Lakc~ill~ I~.-I~?3 ~~~.~-4~ ?-I.~lu 3a.-I?u -l`!.~~~ Slcndori 1lci~'hts 5,?73 (i,b_'L ~.1~- 7,,~0 fi.~61i C,.UBU Roscnt~nnu -,04 ~'.~04 I~.;`r; 14.~ni) I~:.-iii ~!t.;,~il South St. Paul I? iir~9 1=.467 l ~.~166 1 ~,Itsfl I'."'i~U l~.~tv West St. Paul 11,318 11,588 12,443 12,81u 13,u7u 12,70 Large Cities 166,223 215,003 247,53.9 261,482 284,590 283,807 Remainder of Co. 9,360 1-0,498 11,670 12,172 13,672 14,563 Dakota Coun 175,583 225,501 259,209 273,655 298,262 298,370 Apple Valley R97 2.5nF 5,647 6,993 12,871 18,377 13umsrill; I.~),Sl h?4~ ~.Uti1 I(1.18(3 1 .~~4 N.a2an v;~S ~_r,-.} -l.~nl -~i Iu.~~Iii I-_ns; Parmin~ton ~,~d i~~i; `,~i ti'i I.-li,> ;,tk> Hastinc I ~I~ 'J _.-h> '~ni ~_li~i ln',~'iGrO~cHci~~l~t~ I,'_~i2t ;,111 ~,2(If~' ~~~)1 8?60 Lakc~illc ~~rl I.~~~~ ~.-lei- ~ ~rl ; n I ~.nK7 \-icncluur llui Chu I.P_6 l.(~5(~ I,,`t-? 1.9t,~ ? 6~~ i.] Roscniiunu ~S1 I.I~~I I.;! . -1.'~"i South St. Paul =.5-S ~.~,-1 _.~"U ? 1-}(i ',i;O~ .~;}li West St. Yaul 3,978 3,722 3,518 3,430 3,840 4,480 Large Cities 16,182 24,652 34,085 38,128 62,721 93,950 Remainder of Co. 1,643 2,018 2,734 3,040 3,935 5,235 Dakota Coun 17,825 26,670 36,819 41,168 66,656 99,185 Sources: U.S. Census; Metro olitan Council; Minnesota Demo a hic Center; Maxfield Research Inc. MAXFIELD RESEARCH INC. 12 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS ? A good portion of seniors are expected to work part-time in the future. One reason is that the economy has been shifting away from a traditional manufacturing labor force into service and office labor. There is the possibility that 65+ seniors will continue to lengthen their te- nure in "white collar" positions. Lack of physical exertion in white collar positions enables many people to work longer than people employed in labor-intensive manufacturing work. Thus, many of the future seniors will be able to work longer than their blue collar parents, and therefore retire later in life. ? The growth of the working-age population, those ages 18 to 64, will be tempered as a large number of people currently imtheir 40s and SOs age into their senior years by 2030. Between 2007 and 2030, the number of age 18-to-64-year-olds is projected to grow by 39,000 people, or 15%. In comparison, between 1990 and 2007 (a seven year shorter period), the age 18-to- 64-year-old population increased by 83,600 people, or 48%. Workforce Age (18 to 64) Population Trends Dakota County, 1990 to 2030 350,000 _ - - - _ _ - 300,000 ¦ Age 18-64 Populadoa 250,000 200,000 150,000 100,000 50,000 U iii 1990 3000 2010 2020 2030 Consumer Expenditure Patterns Table 4 shows consumer expenditures for retail goods and services in Dakota County in 2007 and 2012, according to data obtained from Claritas, Inc. This data is used to calculate demand for retail space, based on projected population growth in the area and the resulting growth in consumer expenditures. The following are key points from the consumer expenditure data: ? Customers (or residents) in Dakota County spent $8.9 billion in 2007 on retail goods and services shown in Table 4. In 2012, residents are projected to spend $11.4 billion on retail goods and services. It should be noted that the retail expenditures by these Dakota County residents can be made anywhere, not just Dakota County. MAXFIELD RESEARCH INC. 13 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS ~ In order, residents in Eagan ($1.9 million), Lakeville ($1.7 million), Burnsville ($1.6 mil- lion), and Apple Valley ($1.5 million) will combine to make up just short of 60% of all the retail expenditures in Dakota County in 2012. These communities also account for about 60% of all the residents in the County. The greatest growth in consumer retail expenditures during the period 2007 to 2012 is ex- pected in Farmington (49%), Rosemount (43%), and Lakeville (36%) -also the communi- ties that are projected to experience the greatest household growth. ~ Overall consumer expenditures in Dakota County are. expected to grow by $2.5 billion be- tween 2007 and 2012, or about a 5% annual increase. While some of this projected increase is due to inflation, some is due to household growth. As household growth begins to slow during the next two decades, this annual rate of growth will likely decline. These factors, in turn, will likely lead to less overall demand for new retail space annually in the coming dec- ades in comparison to the past couple of decades. TABLE 4 AGGREGATE CONSUMER EXPENDTTURES BY RESH)ENTS DAKOTA COUNTY 2007-2012 Consumer I?~ enditures Chana~e 2007-2012 2007 2012 No. (millions) (millions) (millions) Change Lxr<~e Cities Apple Valley $1,199 $1,546 $347 29.0% Burnsville $1,350 $1,620 $270 20.0% Eagan $1,540 $1,860 $320 20.8% Farmington $385 $574 $189 49.1% Hastings $435 $588 $153 35.2% Inver Grove Heights $789 $1,050 $262 33.2% Lakeville $1,218 $1,657 $439 36.1% Mendota Heights $313 $376. $63. .20.1% Rosemount $437 $624 $187 42.9% South St. Paul $381 $453 $71 18.7% West St. Paul $388. $461 $73 18.8% Large Cities Subtotal $8,435 $10,810 $2,375 28.2% Remainder of Co. $441 $572 $131 29.7% Dakota Coun Total $8,876 $11 382 $2,506 28.2% Sources: Claritas; Maxfield Research, Inc. MAXFIELD RESEARCH INC. 14 EM$LOYMENT AND DEMOGRAPHIC ANALYSIS Employment Growth Trends Demand for office and industrial space will partly hinge on the future labor force available to fill potential new jobs. Employment growth trends and projections and business characteristics for Dakota County are shown in the following tables. The following are key trends derived from the employment data: Jobs Located in Dakota County Table 5 shows data on the number of jobs in Dakota County, including in the 11 largest com- munities. The figures were based on estimated by Metropolitan Council and adjusted by Max- field Research based on current employment estimated from the Minnesota Department of Em- ployment and Economic Development. Table 6 presents covered employment for Dakota County in 2000 and 2006. Covered employ- ment data is calculated as an annual average and reveals the number of jobs in the County that are covered by unemployment insurance. Most farm jobs, self-employed people, and some other types of jobs are not covered by unemployment insurance and are not included in the table. The . data comes from the Department of Employment and Economic .Development. Table 7 shows the number of jobs by size of business within the County in 2005. This data is from the Census Bureau: County Business Patterns. The following are key highlights about employment trends in the County: ~ There were a total of about 154,200 jobs in Dakota County in 2000, of which about half were located in Eagan (42,750 jobs) and Burnsville (31,800 jobs). Eagan and Burnsville are ap- pealing for employment in the County because of their location. Both have good freeway access, are closer to the Minneapolis/St. Paul International Airport, other businesses along the I-494 strip and Downtowns Minneapolis and St. Paul, and have closer proximity to larger labor pools than farther out suburbs within the County. ~ The number of jobs in Dakota County is projected to grow by about 92,200 jobs from. 1990 to 2010 (+87.0%) and about 49,400 from 2010 to 2030 (+24.9%). This is a greater growth rate than the Twin Cities Metro Area, which is projected to experience job growth of 42.7% from 1990 to 2010 and 17.1 % from 2010 to 2030. ~ As summarized earlier in the report, the aging of the population will contribute to the slower job growth rate between 2010 and 2030. Compared to past decades, the ratio of people enter- ing the labor force to those leaving the labor force will narrow. This slower job growth will have an impact on the growth of businesses, and hence, additional need for industrial and of- fice space will decline. / Between 2010 and 2030, Eagan is projected to lead the County in job growth (11,600 new jobs) followed closely by Lakeville (11,200 new jobs). Combined, Eagan and Lakeville are projected to account for about 46% of all new job growth between 2010 and 2030. MAXFIELD RESEARCH INC. 15 .D M ~ v1 N ~D N ~ 00 ~O d' N ~O 01 O a M O ~ N r.r O ~ 0 0 0 0 0 0 0 0 0 0 0= Q~ O~ O O 0 0 0 0 0 0 0 0 0 0 0 y_ ~n N C 00 O N O 00 N 00 O M ~O V N ~ M 00 00 N M Ct M d' VO Vl ~O O O N O l~ N 00 cl' ~ O D\ M M ~ ~ v~ 00 l~ N e~ M M N N ~t M 00 01 V') ~ J^ d• 00 ~ O ar ,--a O N O N N O 00 00 ~D l~ V•) ~ ~ ~ ~ N N O\ ~ ~O O ~n l~ M 01 00 M ~O r N O d• O~ ~C o0 M Q~ 00 O~ O ~ 00 O ~ v'~ N O~ C CO 01 N N N l~ N l0 M M ~ O~ N N N M .-r ~ O~ ~ 7"' 0 0 0 0 0 0 0 0 0 0 0 p: ~ ~ ~ O 0 0 0 0 0 0 0 0 0 0 0 r pp ~ ~ ~ p O M O~ v~ 00 ~n oo N ~D O~ U O N M ~ l\ O ON N ~ ~ a1 ~ ~ ~ N W N N N N ar 0 0 0 0 0 0 0 0 O O O C O O Vl Z 0 0 0 0 0 0 0 0 0 0 0 C d• V o0 Q ~r N oo~v,~oooo d=~a;a;o, r; ~t ~ o ~ O M ~ N N N 01 A O N N N ~ O° ~ F U N 0 0 0 0 0 0 0 0 0 0 O C ~--i ~n r F~ O O O O O O O O O O O C M M E`~ Ey O~ O N M M M 00 ~ ~O ~ O \O 00 C N N ~ 3 V't ~ oo ~n 01 M 00 N 00 00 0o rt ~ oo V'1 O A ~ 00 V1 V a LZ ~ ~ O ~ N oo ~ a1 \O ~ ~ N N ~ O l0 v~ 00 l~ ~D ~O ~ ~ C~ O N N ~ ~ p N N M 00 00 O 00 ~O l~ 00 ~ ~ M M ~ ~f: ~ ~D V Q N .-r ~ ar W v a/ r-~ ~i o0 00 O N N ~ M ~n ~ ~ ~ rf' v'~ O~ M ~ N M O~ 00 N `O O ~O ~O N O N t~ ~ t h v'~ ~ O M O~ t~ v~ 00 v) N M l~ O [ ~ ~ ~p ~n ~D N ~O v~ ~D vi ~ v~ O~ ri' ~G N ~ .~-i N N O O N ~ ~ W ~ A z ~ x N ~ W v w ~ ~ ~ A • O •o ~ U o o W bn v~ o ea ~dc~awwx.~a~~~~ a~ A ~ EMPLOYMENT AND DEMOGRAPHIC ANALYSIS um~aer of~obs L~~kota County, ~1 ~~3( wept sr. Paul ~ N un,~~~ arU~fi # ~ Z01?t!. ~l~ I_tJ 21F30' ~'1ell~litfa ~ ~(7!i'~~b s ~ Y3ei~l~€x St_ Paul 32.~~10 ~ ~ - ~_~:.f . c,,,au Ea;;ar~ ~ J~~I~s in 2{iil4 ~ Jnhs xddt+d ?QOf~ f~~ Zt)TO ~ v j ~ ,~t~Ft~ <tt~dial 2i?tll Ptj _03Q 1 ' ~ ~rl•t)S e Bua•~is~:illc - He~~~ht , ~ ~ ~ ~ Ro,c~~tu~~~~~~ ' .1~~~~ic ~':~Ilr~ - ~ Hasti~r~x ~ Lal.e~ ille S I ~~tt7llill~t(lp . ~ I 1 ~rnircr~;: 1~'fct~K~~~c,lit,3~~ ~~c~~i~~cil. ~Ia~field lie5ear~1~ I~~t<: MAXFIELD RESEARCH INC. 17 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS Number of Jobs in Dakota County's La be Conununities ~I 2010 and 2030 so,ooo - 70,000 60,000 - ¦ Jobs added from 2010 to 2030 - c 50,000 ~ Jobs in 2010 c 40,000 ~i 30,000 - 20,000 - 10,000 0 v ore Q~c o~ moo= ~ ~ ~ 4~~`~ P~ ~~oa ~ i ~°u, / As illustrated in the following commuting patterns table, there is a sizable out-migration of workers from Dakota County to surrounding Counties. In 2000, about 46% of Dakota Coun- ty residents worked in Dakota County. Hennepin (32%) and Ramsey (14%) Counties ac- counted for the majority of the work commutes outside Dakota County. Commuting Patterns in Dakota County, 2000 Place of Residence Employment Count Percent ~ ~ ~ 1 ~ ~ ' Dakota Dakota Co 90,629 45.8% Dakota Hennepin 62,901 31.8% Dakota Ramsey 28,014 14.2% Dakota Scott 4,647 2.3% Dakota Washington 3,787 1.9% Dakota Rice 1,267 0.6% Dakota Anoka 1,172 0.6% Dakota Other 5,377. 2.7% ..197,794 100.0% ~ ~ 1 ~ Dakota Dakota 90,629 58.7% Hennepin Dakota 17,485 11.3 Ramsey Dakota 14,204 9.2% Washington Dakota 8,380 5.4% Scott Dakota 8,025 5.2% Rice Dakota 2,817 1.8% Anoka Dakota 2,659 1.7% Other Carver 10,322 6.7% 154,521 100.0% Sources: US Census Bureau; Maxfield Research Ina MAXFIELD RESEARCH INC. 18 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS ? Approximately 60% of the jobs in Dakota County in 2000 were filled by people living within the County followed by people living in Hennepin County (11 Ramsey County (9%) and Washington County (about 5%). As transportation costs increase, we project that a greater percentage of people commuting to Dakota County will also choose to live in Dakota Coun- ty, increasing the number of jobs available in the County. / In 2000, approximately 70% of those working in Eagan, the largest employment base in the County, commuted from outside Dakota County, 14% of which came from Hennepin Coun- ty. Only about 30% of Eagan workers commuting from within Dakota County chose to live and work in Eagan. Table 6 highlights that Dakota County has experienced job growth during the first half of this decade in about every industry sector except Manufacturing. This is a trend that has been experienced by most places in the Country, as manufacturing declined sharply after the re- cession that began in 2001. Service jobs have grown rapidly, with the greatest numerical growth in Education & Health Care, Professional and Business Services, and Financial Ser- vices. ~ According to an analyst with the Minnesota Department of Employment and. Economic De- velopment, the decline of manufacturing employment is a trend that is likely to continue for at least the next few decades in the Twin Cities. This is a trend that began earlier in other northeastern states that continues today as the job market shifts from manufacturing to ser- vices. Thus, it is unlikely that Dakota County will see significant increases in manufacturing employment through 2030. New manufacturers are likely to be smaller niche firms and high- tech firms versus large plants that employ less skilled labor. These larger manufacturers tend to locate- in more rural communities. with lower wages. ~ From 2000 to 2006, Dakota County has been a bright spot in the Metro Area in terms of job growth. While the County added over 21,000 jobs, the remainder of the seven-county Metro Area lost 6,500 jobs. Most of the job loss was in Hennepin and Ramsey Counties. The City of Minneapolis alone lost 17,000 jobs over the six year period. ~ Retail accounted for greatest number of jobs grown in the County from 2000 to 2006, (22,900 jobs). It should be noted that the retail category does not include restaurants, which instead are included in the leisure and hospitality category. That category had 17,000 jobs in the County in 2006, an increase of 2,500 jobs from 2000. MAXFIELD RESEARCH INC. 19 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS TABLE 6 COVERED EMPLOYMENT TRENDS DAKOTA COUNTY 2000-2006 ?000 2006 C6ane. ?000 to 20116 Indus Employers Jobs Employers Jobs 'Employers Jobs Natural Resources & Mining 51 678 49 936 -2 258 Construction 1,030 9,534 1,212 11,499 182 1,965 Manufacturing 526 20,661 545 19,445 19 -1,216 WTTU* 1,239 17,898 1,250 20,651 11 2,753 Retail Trade 1,117 21,885 1,239 22,897 122 1,012 Information 155 7,938 175. .8,607 20 669 Financial Services 988 9,194 1,373 11,900 385. 2,706 Professional and Business Services 1,743 14,843 1,949 18,172 206 3,329 Education and Health Services 712 12,049 968 17,655 256 5,606 Leisure and Hospitality 648 14,583 829 17,084 181 2,501 Other Services 822 7,133 945 7,451 123 318 Government 213 .16,981 241 18,378 28 1,397 Dakota Counts Totals 9,244 ~ I>3.377 10.77 174.67 1.31 21 Z9S 7-Coon Twin Cities Metro Area 82,382 1,600,536 89,883 1,615,330 7,501 14,794 * Wholesale Trade, Trans ortation, & Utilities Note: North American Industrial Classification System (NAILS) Source: Minnesota Department of Employment and Economic Development; Maxfield Research Inc. / The chart below highlights that Eagan accounted for over 5,000 of the County's 19,400 man- , ufacturing jobs in 2006. Eagan still has land available for new industrial space along High- way 55 in the northern part of the community. Number of Manufacturing Jobs, Dakota County, 2000 & 2006 5,000 ®2000 0 4,000 _ ¦ 2006 ' I 3,000 z ',000 - 1,000 0 MAXFIELD RESEARCH INC. 20 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS Table 7 shows the number of employees by size of business. Of the 9,972 businesses in Da- kota County in 2005, about 55% had between one and four employees, 17% had between five and nine employees, and 13% had between 10 and 19 employees. Only seven employers had more than 1,000 employees (less than 1%) and only 14 employers had between 500 and 999 employees. ~ Table 7 highlights that most of the demand for office space will be from smaller businesses seeking spaces with less than 5,000 square feet. Almost three-quarters of the .financial ser- vices & real estate and professional and business services categories have fewer than five employees. A large portion of these businesses are likely individuals working from their sin- - gle-family homes; hence they do not need commercial office space. About 540 of these businesses have between five and 19 employees and would require spaces of about 1,000 to 5,000 square feet. ~ A larger corporate campus designed to appeal to larger firms needs office spaces of 50,000 square feet would compete for a limited number of firms. In 2005, only five financial and professional service firms had more than 250 employees, and none had more than 500 em- ployees. It should be noted that some larger users of office space are categorized under other industries. For example, Northwest Airlines and CHS are categorized as wholesale trade, transportation & utilities. Even still, .only 21 of the County's businesses had more than 500 employees, or 0.2% of the businesses. TABLE 7 NUMBER OF BUSINESSES BY SIZE OF BUSINESS DAKOTA COUNTY 2005 Number of Em to ees 100- 250- 500- Industry Total 1-4 5-9 10-19 20-49 50-99 249 499 999 1000+ Natural Resources & Mining 19 13 2 2 2 0 0 0 0 0 Construction 1,176 818 132 117 67 22 16 3 0 1 Manufacturing 479 152 81 83 83 36 27 14 3 0 WTTU* 1,071 552 180 128 124 44 29 10 3 1 Retail Trade 1,160 414 303 233 110 47 44 8 1 0 Information 190 96 30 21 20 15 4 2 0 2 Financial Services & Real Estae 1,244 875 .199 93 51 14 7 4 0 1 Professional and Business Services 1,325 1,002 153 98 52 9 10 1 0 0 Education and Health Services 975 408 204 189 109 36 17 6 4 2 Leisure and Hospitality 768 242 96 152 183 80 13 2 0 0 Other Services 1,536 839 271 222 I29 37 29 6 3 0 Other 29 28 0 1 0 0 0 0 0 0 Total 9,972 5,439 1,651 1,339 .930 340 196 56 14 7 Percent of Businesses 100.0% 54.5% 16.6% 13.4% 9.3% 3.4% 2.0% 0.6% 0.1 % 0.1 * Wholesale Trade, Tran rtation, & Utilities Note: North American Industrial Classification S stem NAICS Source: U.S. Census Bureau: County Business Patterns; Maxfield Research Inc. MAXFIELD RESEARCH INC. 21 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS ? The following two charts highlight that even though most of the County's businesses have fewer than 10 employees, the greatest number of jobs are located in businesses with between 20 and 250 employees. These businesses will also account for the greatest demand for com- mercial, office, and industrial space, especially since a percentage of the very small business- es are operated from single-family homes. Number of Businesses by Size of Business b.ooo Dakota County, 2005- I s,ooo 4.ouo 3.000 ~ ~ o c 2,000 1.11(N ~ U 1-4 5-9 10-19 20-49 50-99 100-249 250- 500- 1000+ 499 999 Size of Business (no. of employees) Estimated Number of Employees by Size of Business Dakota County, 2005 3.000 ~ _ 30.000 ~i ~_ii00 ~ 2:~.C~00 ~ ~ w 15,000 ~ ~ 0 ~ iii iinii z nnn l ]-4 5-9 10-19 2n_~~; 50.99 100-249 250- 500- 1000+ 499 999 Size of Business (no. ofemployees) I~---- - MAXFIELD RESEARCH INC. 22 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS Gross Retail Sales- Table 8 shows a breakdown of gross retail sales for retail goods and services in Dakota County in 2000 and 2005. The data is from the Minnesota Department of Revenue. Table 8 shows retail gross sales for auto dealers and stations and the total for all other product types. The following are key points from the data. ~ Dakota County retail sales grew 27% from 2000 to 2005, amassing $6.5 billion dollars in gross retail sales in 2005. ~ Excluding sales at auto dealers and stations, sales in the County rose from $3.8 billion in 2000 to $4.3 billion in 2005. Auto dealers and stations are shown separately so that more di- rect comparisons can be made between gross sales and commercial space. Auto dealers and stations accounted for one-third of total sales but occupy very little commercial space. ~ Burnsville, Eagan, and Apple Valley accounted for the majority of gross retail sales in the County. These communities also have the most commercial space. Burnsville has a strong retaiTpresence with the Burnsville Mall, the County's only enclosed regional shopping cen- ter. Eagan has a large amount of retail near Interstate 35E and Yankee Doodle Road along with several larger neighborhood shopping centers. Apple Valley as a significant amount of retail surrounding the Cedar Avenue Highway 42 intersection. TABLE 8 GROSS RETAIL SALES DAKOTA COUNTY LARGE COMMUNITIES 2000 & 2005 20(10 2005 Retail Sales Auto llealers 8i Retail Sales Auto Dealers ~ (excluding Auto) Stations (excluding Auto) Stations Apple Valley $490,995,020 $213,024,759 $638,408,974 $206,870,912 Burnsville $1,242,822,300 $377,473,471 $934,245,215 $486,731,078 Eagan $646;729,387 $90,511,234 $844,151,258 $163,923,828 Farmington $52,295,906 $7,565,533 $63,941,488 $28,417,502 Hastings $176,195,111 $134,655,919 $177,512,925 $94,078,861 Inver Grove Heights $227,862,263 $277,963,Sb9 $332,673,497 $615,488,477 Lakeville $143,347,077 $92,364,876 $351,684,078 $202,471,778 Mendota Heights. $236,919,234. $0 $423,798,981 $18,017,864 Rosemount $44,285,450 $11,815,532 $90,923,857 $25,631,906 South St. Paul $208,721,134 $90,070,696 $245,352,324 $283,705,151 West St. Paul $316,652,759 $31,405,715 $232,133,259 $36,805,580 Total $3,786,825,641 $1,326,851,304 $4,334,825,856 $2,162,142,937 Source: Minnesota Deparhnent of Revenue; Maxfield Research Inc. MAXFIELD RESEARCFI INC. 23 EMPLOYMENT AND DEMOGRAPHIC ANALYSIS ~ With the exceptions of Burnsville and West St. Paul, every city in the County experienced growth in retail sales. Lakeville and Rosemount saw the greatest increase in gross retail dur- ing the period, following their respective household growth trends. West St. Paul will likely see increased gross sales with the new Menards and upgraded SuperTarget. +~rosS I~~tail Sales E~rlucling ~.uto/Ti•u~k ~aleS Dakota ~'.'a?untyT, ~~r ~t: P~~a I 11r1endota Sauth Gi°ass Retail ~aIQS in'?!~il (in millions] (eaocludin„ autaftr~uck sales] :Heights St, Paul - ~ i _ ® $750 to $935 l;"~`~,° . $500 to $75D , Q $25D to $500 ^F',~,m ? Less than $250 ~ 1~m1ts~'ille ~~~~s~''a~__4~e°~; hn-~ii` a;:~~~, F ~lyn i ` ~r r tt J$p~ _ .~~t ~l~pl:. \ alley - _ _ ; Ha stui_s F Ls,l:?,tlle - ~ ~ _ ~ _ ~ ° ~ 4 _ _ F~ntun~tun.._ _ - - I _ _ _ , - ~ - f~ ~ - ~ - _ ~ - ° _ ~ _ a ~ , b MAXFIELD RESEARCH INC. 24 Commercial and Industrial.. Develo menu Trends p Introduction This section examines recent commercial and industrial development trends in Dakota County along with secondary data on current market conditions. This section examines development trends in Dakota .County with the following data: retail space vacancy and absorption; / commercial space by community; / commercial space development trends; / office space vacancy and absorption; / office space by community; / office space development trends; industrial space vacancy and absorption; industrial space by community; industrial space development trends; / industrial development trends by type of space and community; and / interviews with community development staff and area brokers familiar with the commercial and office markets. MAXFIELD RESEARCH INC. 25 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS Overview Trends in the amount of space developed for commercial and industrial uses in Dakota County are presented in this section. The supply of commercial and industrial land was determined us- ing 2006. Dakota County"GIS information in cooperation with the Dakota County Assessing Ser- vices and Property Taxation and Records. In accordance with the GIS data, the classification and use of each piece of property (parcel) is determined by the Dakota County Assessor's Office. Among other factors, the future need for commercial and industrial space in the County can be partly based on recent trends in commercial and industrial space development when compared to .past and projected increases in households and employment in the County. The chart below shows the amount of commercial and industrial space built. in Dakota County over five-year increments since 1980. The data was obtained from the Dakota County GIS De- partment. In total, over 50 million square feet of commercial and industrial space was added in Dakota County from 1980 to 2006. This includes about 16 million square feet of re- tail/commercial space, 12 million square feet of office space, and 23 million square feet of Indus- . trial space. Conuuercial, Office, & lndust~ial Space De~•elopment Trends Dakota Counh~, 19$0-2006 ~ I~,~J(~0.0f~1~ I I .(1(1(I,r,iOU ! l f~,ill)(I,ll(lU ti_i~l)U_!)~;ill r,_~100.1)UO f =l_Ilr)O,iioO - n ~ 'r~' - - ~y - 19KU-8~ '8~ -'89 '9U -'94 '9~ -'99 '00 -'U~ '0~ ~l 'Ub D Commercial ? Office ? Industrial The amount of space added per five-year increment since 1980 varied greatly. For example, when the economy was in recession during the early 1994s, about five million square feet of commercial and industrial space was added. During the late 1990s when the economy was grow- ing rapidly, over 14 million square feet of space was absorbed, including about nine million square feet of industrial space (half of which was in Eagan alone). MAXFIELD RESEARCH INC. 26 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS More detail on development trends and market conditions in Dakota County is presented in the remainder of this Section. The analysis is presented separately for each type of use - re- taiUcommercial, office, and industrial -beginning with retaiUcommercial. TABLE 9 RETAIL SPACE VACANCY DAKOTA COUNTY 2000 to 2007 Total Total Market No. of Rentable Amount Percent Net Absorpton Sector Period Buildings. Area Vacant Vacant 2000 to 2007 Community 2000 14 2,946,477 195,639 6.6% 2006 11 2,466,896 40,387 1.6% 2007 11 2,466,896 37,019 1.5% -320,961 Neighborhood 2000 39 2,245,975 285,347 12.7% 2006 64 3,906,951 295,915 7.6% 2007 64 3,906,951 324,975 8.3% 1,621,348 Regional 2000 1 1,314,343. 6;935 0.5% 2006 4 2,173,000 39,678 1.8% 2007 4 2,173,000 29,947 1.4% .835,645 Total 2000 54 6,506,795 487,921 7.5% 2006 79 8,546,847 375,980 4.4% 2007 79 8,546,847 391,941 4.6% 2,13b,032 Sources: 2001-2008: Colliers Turley Martin Tucker, MarketQUEST Maxfield Research Inc. RetaiUCommercial Development Trends Retail Space Vacancy and Absorption Maxfield Research analyzed retail market conditions in Dakota County, including vacancy trends by type of space. The data is presented in Table 9 and is from MarketQUEST by Colliers Turley Martin Tucker. The data in MarketQUEST is based on a survey of Metro Area shopping centers with at least 30,000 square feet of gross leasable area (GLA) and excludes single-tenant, frees- tanding retail space. Shopping centers are classified in three categories: Neighborhood, Commu- nity, and Regional shopping centers. ~ In 2007, the neighborhood retail center vacancy rate was the highest of the three shopping center types at 8.3%. Community and Regional centers, which have very strong drawing power and attract national chains and franchised firms, are performing very well, with va- cancy rates of 1.5% or less. MAXFIELD RESEARCH INC. 27 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS ? The high growth of regional retail centers is attributed to the trend of developing "big box" retailers (such as SuperTarget, Best Buy, Office Depot, Bed Bath & Beyond, Home Depot, Kohl's, Pet Smart, etc.) in "power centers." To a great extent, these "power. centers" are capturing a portion of the retail dollars that previously were spent at neighborhood centers and regional enclosed malls. Commercial Space by Community Table 10 shows the amount of commercial space in each of the County's. eleven largest comm~n- ities and the County as a whole in 2000 to 2006: The data is from the Dakota County GIS. Thee- following are key points from Table 10. ? In 2006, there are a total of 1,650 buildings totaling 23.5 million square feet of commercial space in the County. Burnsville claims the most commercial buildings (245 buildings) and square feet (about 4.9 million square feet). Behind Burnsville, Eagan and Lakeville each have more than three million feet of commercial space. ? Approximately 260 buildings totaling 4.8 million square feet have been added this decade, or almost one-quarter of the County's total space. ? Of the total 23.5 million square feet of commercial space, 58% is classified as retail shop- ping centers, restaurants, discount stores, department stores, and stand-alone retail stores. The rest of the space is comprised of businesses such as convenience stores, service garages, banks, motels,. theaters, veterinary hospitals, etc. Service stations/garages and convenience stores accounted for 393 buildings and 2.8 million square feet. .TABLE 10 COMMERCIAL SPACE BY COMMUNITY DAKOTA COUNTY 2000 and 2006 2000 '_006 Ch:ui~c No. of No. of No. of Buildings .Square Feet Buildings .Square Feet Buildings Square Feet Large Communities Apple Valley 104 1,983,611 135 2,761,965 31 778,354 Burnsville 225 4,548,505 245 4,941,375 20 392,870 Eagan 197 3,371,890 226 3,740,023 29 368,133 Farmington 61 446,611 74 526,383 13 79,772 Hastings 152 1,378,820 188 1,615,953 36 237,133 Inver Grove Heights 110 1,216,038 138 1,839,909 28 623,871 Lakeville I26 1,816,474 179 3,283,656 53 1,467,182 Mendota Heights 18 358,046 22 424,128 4 66,082 Rosemount 51 501,647 66 632,906 15 131,259 South St. Paul 91 940,857 95 950,154 4 9,297 West St. Paul 155 1,393,636 169 .1,950,566 14 556,930 Subtotal 1,290 17,956,135 1,537 22,667,018 247 4,710,883 Remainder of Co. 106 725,083 116 808,445 10 83,362 Ual,ota (ounic Iota 7.39(1 78_IiSL'_1!r 1,63 23.~1j5,-1G3 2~7 d,79-1?~5 Sources: Dakota County GIS; Maxfield Research Inc. MAXFIELD RESEARCH INC. 28 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS Retai~~merci~ space in Uakoa ~'vun 2+~~ 0' [ItetaillC~n~n~ercia! Spare ,1icttdr~S Si?ertlx (in 5~pus~_e Facet) j_{t(1O,(kUt) ! IIeEgltfi5 4>`. ~3iil)I P ~Et(1,(1(r) ~ ~ ~~uiltan :~iiia~o~ ,~it~~ But^~t,~ilk• 1~t~~e1.,.. G rui e Itci~hts ~g _ i _ i ~ _ _ I ~ _ _ ~ . 1~s15~lllrti ~ .lpplc°i~alle~ r Koscmo«rifi [ ` € l.nki~+illc t i~~arteurigton ~ s ~ E 0 v I j Sc~ttrc~s_ I?tikc>tx C'ocu~t~~ CiS. - '~ia:~~~ld R~sec~r~.h I«c. MAXFIELD RESEARCH INC. 29 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS Location of RetaiUCommercial Buildings in Dakota County, 2007 Square Footage 0 1 to 10,000 Lilyd VYest St Pauf,~ ~ 10,001 to $0;040 Mendota .South St Pact ~ 80,06' #0 264,:370 ,,~Rdendota Heights ; . Sunfish Lake Roads i ~ v Q `pu ~ ~ Interstates ` ~ 8 o ~ Highways Inver Grove Heights e` Ea an ,Major Roads ~ ~ C ~ le ~ ~ p O ~ ~ ~ ~ Nininger Twp s CAppie,Valley~ ~ ~ ~ Q Rosemounf'' ~ ~~~~Nastings @j """'C Caates ~ ~ 1 ~ ~ ~3 O Vermillion Twp ~ ~ ~ ~ ~ Ravenna Twp j Lakeville ~ O ~ Em ire Tw ~ 52 " P P Vermillion Marshan Twp [ t ~ rT"° e t ( € ~ 6110 i ~ ~ , , ~ Farmington a ~ - , a ,._...w... .m a ~ Hamp n p New~Trier a ~ hM1iesville; ~ , ~ ~j~, Eureka Twp CCastle Rock Twp i Hampton Twp ~ Douglas Twp } t~~t-e ~ ~ t.. I j52 O ~ ~ ~ s k E Randolph Randolph Twp ~ F m,,..., r,,.,~^~°r - Greenvale Twp Vttaterford Twp~Sciota TwpJ O ~ O ~ Northfield...-.---~ . ..r~ t:cT rttl i.y iha C~ I- - wt _ i ~ e~_ra~ I i rr.Ua_im ~?Lem= v .;aci' "t0~3 MAXFIELD RESEARCH INC. 30 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS ~ Lakeville has 3.3 million square feet of commercial space compared to Apple Valley's 2.8 million square feet. However, 75% of Apple Valley's space is classified as retail shopping centers, discount and department stores, and restaurants compared to Lakeville's 52%. This explains why Apple Valley had much greater gross retail sales in 2005 than Lakeville (See Table 8, Apple Valley - $638 million and Lakeville -$352 million). ~ Lakeville added 53 buildings and about 1.5 million square feet this decade, the most of any community in the County. The approximately space added in Lakeville from 2000 to 2006 includes: 223,000 square foot Lifetime Fitness, 150,000 square foot HOM Furniture build- ing, 186,000 square foot Super Target, 83,000 square foot Crossroads at Lakeville, 86,000 square foot Gander Mountain, and 105,000 square foot Argonne Village with a Rainbow Foods anchor. Commercial Space Development Trends Table 11 shows the amount of commercial space added in five-year increments in Dakota Coun- ty from 1980 to 2006. The following are key points from the table. ~ Since 1985, Dakota County has added approximately 3 million square feet of commercial space every five years except for the early 1990s when the economy struggled. The current five-year segment, 2005 through 2009, is on pace to maintain that average with 1.8 million square feet added in 2005 and 2006 alone. ~ The pattern of retail following rooftops is highlighted in Table. 11. During the ear1y1980s, -the majority of retail was developed in Burnsville, .which also had the greatest population. As housing development quickened in Eagan in the mid-1980s, Eagan began to lead the County in new commercial construction. Apple Valley began to increase its share of new retail when its population began to swell in the mid-1990s and now Lakeville is leading the County in commercial development. Lakeville and other outer-ring. suburbs, such as Far- mington and Rosemount, will likely see greater commercial construction as their communi- ties continue to add population. ~ More mature communities are experiencing less new commercial development, including Burnsville and Eagan that lead the County in new development. Most new development in these two communities and in West St. Paul, South St. Paul, and Mendota Heights will be redevelopments of older properties. West St. Paul, which added 356,400 square feet of commercial space in 2005 and 2006, did so with redevelopment sites that now include 148,500 square foot Wal-Mart, 166,000 square foot Menard's, and 175,000 square foot Tar- get. ~ From 2000 to 2004, Lakeville accounted for approximately 36% of the total commercial de- velopment in the County. Farmington accounted for less than 1% of the total commercial development in Dakota County from 1980 to 1984, but has seen a gradual cease to about 4% in 2005 and 2006. MAXFIELD RESEARCH INC. 31 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS ? Inver Grove Heights has begun to see greater retail development, but not to the extent as Apple Valley and Lakeville. Its only big-box stores to date are Home Depot {2006) and Wal-Mart (2003). With the opening up of the Northwest Area, a greater amount of retail will likely follow. Currently, .there are plans for a SuperTarget and other retail at the inter- section of Highway 55 and South Robert Trail. TABLE 11 COMMERCIAL SPACE DEVELOPMENT TRENDS DAKOTA COUNTY 1980-2006 1980- 1985- 1990- 1995- 2000- 2005 & 1984 1989 1994 1999 2004 2006 Large Communities Apple Valley 163,585 206,240 545,168 645;332 639,050 139,304 Burnsville 738,395 704,006 436,275 .456,791 182,659 210,211 Eagan 242,102 1;008;961 586,010 1,175,454 194;649 ' 173,484 Farmington 8,755 3,721 18,150 34,021 62,419 74,161 Hastings 43,085 172,074 152,992 231,580 192,401 44,732 Inver Grove Heights 64,034 274,642 44,721 397,410 360,944 262,927 Lakeville 209,423 464;564 94,774 402,676. 1,102,468 364,714 Mendota Heights - 104,760 51,756 26,063 7,498 58,584 Rosemount 40,145 67,692 56,295 87,481 82,135 49,124 South St. Paul 114,696 13,283 17,125 63,946 6,925 2,372 West St. Paul 99,478 148,647 41,370 30,872 200,489 356,441 Subtotal 1,723,698 3,168,590 2,044,636 3,551,626 3,031,637 1,736,054 Remainder of Co. 40,465 31,256 7,919 88,052 66,558 16,804 Dakota County 'Total 1.7Ci4,] ti3 3,199,84ti 2,0~2,55~ 3.634.678 3,U98.19~ L~'752,8~8 Sources: Dakota County GIS; Maxfield Research Inc. Commercial Space De~~elopment Trends Dakota Couuty, 1980 to 2006 a_u~~n_u~,;o , - - - - ...m ~,~iiC~.uO~? i ~,;r~n.upu - <<~ ~.i~UU.ni~n 7.~1Ui1,U0U - X110.1100 ~ - _ 19511-84 'S~ -'89 '90 -'94 '9, -'~l9 '00 -'04 'OS R 'U6 MAXFIELD RESEARCH INC. 32 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS ? Concentrating big-box stores in larger shopping areas (or "power centers") has been a retail trend over the past decade throughout the Nation and Twin Cities. Since the beginning of this decade, over one-third of the commercial space added in Dakota County has been big- . box stores such as SuperTarget, Super Wal-Mart, Sam's Club, Gander Mountain, and HOM Furniture. It should be noted that this list does not include other big-box stores, such as Best Buy or Linens n' Things, which are often located in shopping centers and hence their square footage is not measurable for the Dakota County GIS. The big-box development trend will likely continue over the following decades in Dakota County. Big Box Development Trends, Dakota County, 1980 to 2006 1980- 1985- 1990- 1995- 2000- 2005 & 1984 1989 1994 1999 2004 2006 Big Box 296,398 317,368 723,959 648,384 1,064,454 673,713 Pct. of Total Commercial 16.8% 9.9% 35.3% 17.8% 34.4% 38.4% Note: Big box includes the following stores: Home Depot; Target; Sam's Club; Wal-Mart; Gander Mountain. Lifetime Fitness; HOM Furniture; Kohl's. Sources: Dakota County GIS; Maxfield Research .Inc. Office Development Trends Office Space Vacancy and Absorption Maxfield Research analyzed market conditions for multi-tenant office space in Dakota County, including vacancy and absorption since 2000. The data is presented in Table 12 and is from the MarketQUEST by Colliers Turley Martin Tucker. The data in the MarketQUEST is based on a survey of Metro Area multi-tenant spaces. The following are key findings. ? An additiona1235,000 square feet ofmulti-tenant office space was absorbed in Dakota County between 2006 and 2007. However, with the addition of new space, the vacancy rate increased from 13.5% in 2006 to 17.2% in 2007. ? .Between 2006 and 2007, six new buildings were added in Dakota County totaling 403,000 square feet. This averages to 67,000 square feet per building. In comparison, the average building size in 2000 was 54,000 square feet. ~ Dakota County's office vacancy rate is slightly higher than the Metro Area's rate of 16.3% ? There is just over 3.0 million square feet ofmulti-tenant office space in Dakota County. According to MarketQUEST report, Dakota County accounts for approximately 10.6% of .the overall office space in the Twin Cities Metro Area. MAXFIELD RESEARCH INC. 33 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS TABLE 12 OFFICE SPACE VACANCY DAKOTA COUNTY 2000 to 2007 Total Total No. of Rentable Amount Percent Period Buildings Area Vacant Vacant Dakota County 2000 30 1,620,297 292,830 18.1% 2006 44 2,756,886 372,778 13,.5% 2007 50 3,159,689 542,439 17.2% Twin Cities Metro Area 2006 467 67,403,756 11,416,143 16.9% 2007 '473 67,899,257 11,081,524 16.3% Sources: 2001-2008: Colliers Turley Martin Tucker, MarketQUEST Maxfield Research Inc. Office Space by Community Table 13 shows the amount of office space in each of the County's eleven largest communities and the County as a whole in 2000 to 2006. The data is from the Dakota County GIS. The fol- lowing are key points from Table 13. ? Table 13 shows that there was a total of about 14.4 million square feet of office space in Dakota County in 2006. Nearly half of the space was located in Eagan (7.0 million square feet). Burnsville and Mendota Heights had a similar amount of space (about 1.8 million square feet). Overall, a substantial portion of the office space is located in the very northern portion of the County, indicating strong appeal of this area for office tenants versus more distant locations. ? The office buildings in Table 13 are classified by the Dakota County GIS as office, office condo, corporate office, or medical dental. As shown below, most of the space is regular of- face buildings. There are only eleven corporate office buildings, but they account for a large proportion of square footage due to an average size of 328,000 square feet. Office Type Classifications # of Buildings Sq. Ft. Avg. Size Office 445 8,903.,347 20,008 Corporate Office 11 3,608,422 328,038 MedicaUDental 101 1,298,587 12,857 Office Condo 206 626,639 3,042 MAXFIELD RESEARCH INC. 34 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS ? All eleven of the corporate office buildings are located in Eagan. These include,. among oth- ers, Northwest Airlines, Blue Cross Blue Shield, West Group, Unisys Corporation, and Eco- lab. West Group is the largest building with 1.3 million square feet. ? Office condominiums have been of phenomenon of this decade. Almost 90% of the Coun- ty's buildings have been added this decade. The primary market for office condominiums are small businesses (about 10 employees or less) seeking financial advantages over leased space. Thus, the average space size is small -about 3,000 square feet. ? Of the 281 total office buildings added in the County this decade, 179 (63%) have been of- fice condominiums. This includes 56 buildings in Burnsville, 35 in Lakeville, 33 in Inver Grove Heights, and 24 in Eagan. The office condominiums built this decade have totaled 570,000 square feet, or 16% of the total office space added. TABLE 13 OFFICE SPACE BY COMMUNITY DAKOTA COUNTY 2000 and 2006 2D00 ' 2006 Change No. of No. of No. of Buildings Square Feet Buildings Square Feet Buildings Square Feet Large Communities Apple Valley 44 585,539 71 930,056 27 344,517 Burnsville 93 1,217,588 166 1,841,922 73 624,334 Eagan 75 5,599,357 130 6,966,515 55 1,367,158 Farmington 21 88,256 22 95,868 1 7,612 Hastings 36 287,334 42 350,460 6 63,126 Inver Grove Heights 31 506,462 67 664,140 36 157,678 Lakeville 28 258,757 76 601,414 48 342,657 Mendota Heights 36 1,336,194 55 1,740,020 19 403,826 Rosemount 12 68,762 14 100,141 2 31,379 South St. Paul 43 552,467 52 593,091 9 40,624 West St. Paul 46 407,426 51 451,601 5 44,175 Subtotal 465 10,908,142 746 14,335,228 281 3,427,086 Remainder of Co. 12 38,293 17 101,767 5 63,474 Dakota ConntyTotal X177 10,9=16,435 ~ 763 1443b;99a 286 3.d90,5b0 Sources: Dakota County GIS; Maxfield Research Inc. ? From 2000 to 2006, Dakota County added an additiona13.5 million square feet of office space. Eagan added the most space, totaling approximately 1.4 million square feet in 55 buildings. Burnsville added 73 buildings, the most in the six-year period, for an average of 8,500 square feet per building. MAXFIELD RESEARCH INC. 35 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS ~}ffic~ ice i~ I)~kota aunty? ~1~ ~ 1t est. Sf. Pat~I 'I~f£ice Spare #t~r 10flice Space (iu Sq. I'tJ 1'[enc}~rta I[ci~hts - SL Ps1uI ~ ;,,r~ ~~axr I L still bt Inrz :_i.)1 ~_t t }•:a~~an L aift to ~ 1`1U cr siTd RQ2~la~7}}c; ~'z ~a~ (;rule -~Z _ - _ I[L'i~[it~ ' IiLUSeIItE)tllit _tpplc t-;illc} II~estvi„s l,al,c~ ills . I`a t~llin~tou- I _ ~ Sc~urc~s Dalot~i C~,t~nty GIS_ ~l~tificl<i K~sca~-ch I~~c. MAXFIELD RESEARCH INC. 36 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS Location of Office Buildings in Dakota County, 2007 Roads Interstates hvva s West St Paul Major Roads Mendota ~ ~ _ ~5°uth st Paut Parcels -Office Sq. Ft. Mendota Heights ~ Sunfisi,La ~ Square Ft~atage a ~ to 1a,~c1~ o~ p ~o.tlo3 to sla,ootl Inver Grove Heights 3 O Eagan ~ ~ 8(1,[7[}1 to ?64,3741 p U O ~ 52 a ~ O p € ~Q n p ~ Burnsville o tJininger Twp Apple Valley ~ ~ ~ ~ Rosemount Hastings Coates ~ ~1 Vermillion '1~ap Lakeville ~ ~ Ravenna lutp Empire ibvp 52 Vermillion Marshan Twp ~ ~Q s' G i ~ gton H mpt n ~ ~ F ~ _ New~Trier ~-luliesvlle ~ t 7 Eureka Twp ~ Castle Rock Twp Hampton Twp Douglas Twp w e _ ~ B ~ I ~ T~ ~ ~ ~ ~ ~ do Randolph Twp t Greenvale Twp Wa#erfordRvp~ +Sciata '[dvp ti Northfield 6 MAXFIELD RESEARCH INC. 37 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS ~ The largest office additions in Eagan from 2000 to 2006 were the 133,500 square foot BSBS River Park building in 2000, the 300,000 square foot Spectrum Commerce Center in 2001, and the 110,000 square foot Grand Oak Office building in 2006. Office Space Development Trends Table 14 shows office development trends in five-year increments from 1980 to 2006. The fol- lowing are key points .from the-table. In order, Eagan (6.2 million square feet), Burnsville (1.6 million square feet), and Mendota Heights (1.5 million square feet) added the most office space in Dakota County since 1980. The communities mentioned above are attractive for office development because they are within close proximity to a strong core employment base, have good access to several major transportation routes and highway systems, and are within close. distance to the airport. TABLE 14 OFFICE SPACE DEVELOPMENT TRENDS DAKOTA COUNTY .1980-2006 1980- 1985- 1990- 1995- 2000- 2005 & 1984 1989 1994 1999 2004 2006 Large Communities Apple Valley 46,643 219,227 65,484 120,044 288,325 ..56,192 Burnsville 279,583 290,197 69,485 367,712 421,512 202,822 Eagan 879,810 3,224,592 43,617 764,827 999,066 368,092 Farmington 4,160 - .21,484 2,508 7,612 - Hastings 20,502. 80,989 9;717 4,119 40,734 22,392 Inver Grove Heights 381,427 15,195 40,253 8,038 85,994 71,684 Lakeville - 76,878 9,134 90,249 222,295 120,362 Mendota Heights 73,232. 451,217 208,887 319;326 329,167 74,659 Rosemount 35,094 6,404 1,835 - 6,099. 25,280 South St. Paul 46,494 1,421 29,194 666 23,524 17,100 West St. Paul 61,886 46,996 19,539 36,220 44,175 - Subtotal 1,828,831 4,413,116. 518,629 1,713,709 2,468,503 958,583 Remainder of Co, 8,561 50 7,556 - 61,770 1,704 D~kot~ County "1'utal 1,837,392 4,13,166 ~26.18~ 1,7]3,?09 2.530.213 960.287 Sources: Dakota County GIS; Maxfield Research Inc. ~ Dakota County has added an average of 2.2 million square feet of office space every five years from 1980 to 2004, although the actual amount has varied greatly. At the current pace, the County is projected to add 2.4 million square feet from 2005 to 2009. ~ From 1985 through 1989, Dakota County added 4.4 million square feet of office space, the most of the five-year increments. Eagan was the main recipient, adding 3.2 million square feet of office space during the period. The West Publishing office building, constructed in MAXFIELD RESEARCH INC. 3 8 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS 1989, accounted for 1.2 million square feet of office space, or approximately 30% of the to- tal office space built in the County during the period. Offic~c Space Development Trends llakota Counh~, 1)80 to 2006 ,.niio.on~~ _ _ a,suo.ooo i,SOD,U~1(1 - 0(L00f1 = ' OOO,IiU(i 1 1.>UIL000 I _OOU f)Ol) - - - - 19fiU-H4 '8~ - '89 '90 -'94 '9~ - '99 '00 - '114 '0~ fi 'DG Industrial Development Trends Industrial Space Vacancy and Absorption Maxfield Research analyzed industrial market conditions in Dakota County, including vacancy trends by type of space. The data is presented in Table 15 and is from MarketQUEST by Colliers Turley Martin Tucker. The data in MarketQUEST is based on a survey of Metro Area multi- tenant industrial buildings and excludes single-tenant, owner-occupied industrial buildings. In- dustrial buildings are classified in three categories: Office/Showroom, Office/Warehouse,. and Bulk Warehouse. The following are key points from Table 15. ~ A total of 172 industrial buildings with 14.3 million square feet were included in the survey in 2007. The overall vacancy rate among these multi-tenant buildings was 13.2%, higher than the Twin Cities vacancy rate of 10.6%, ~ Despite the higher vacancy rate, Colliers Turley Martin Tucker identifies more proposed in- dustrial space in Dakota County than in any other area of the Twin Cities (1.7 million square feet). Construction has begun on two new buildings -the 200,000 square foot Highway 55 Distribution Center in Eagan and the 180,000 square foot 35/13 Crossings in Burnsville. Additionally, Lakeville is reviewing a proposal fora 1.4 million square foot industrial project on 140 acres at County Road 70 and Dodd Road. Most of the proposed new indus- trial buildings are located in Eagan, Burnsville, Inver Grove Heights, and South St. Paul - or .communities in the northern portion of the County. MAXFIELD RESEARCH INC. 39 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS ~ Office warehouse was the best performing industrial sector type in Dakota County during this decade. Not only does it have the lowest vacancy rate, it also has seen the greatest. in- crease in space this decade, adding 59 buildings and absorbing 3.4 million square feet of oc- cupied space. In contrast, Bulk warehouse added one building since 2000 and absorbed 650,000 square feet. Office showroom lost seven buildings .from the inventory. Table 15 shows that the greatest demand for industrial space in Dakota County is for Office warehouse space, which accounted for half the inventory and has the lowest vacancy rate. Office showroom space accounted for 22% of the County's industrial space, down from 32% in 2000 as no new office showroom space has been added this decade. TABLE 15 INDUSTRIAL SPACE VACANCY AND ABSORPTION DAKOTA COUNTY 2000 to 2007 Total .Total Market No. of Rentable Amount Percent Net Absorption Sector Period Buildings Area Vacant Vacant 2000 to 2007 i ~ Bulk Warehouse 2000 14 2,996,690 741,881 24.8% 2006 15 3,598,037 777,768 21.6% 2007 15 3,598,037 695,664 19.3% 647,564 Office Showroom 2000 63 3,175,122 325,591 10.3% 2006 50 3,246,767 466,666 14.4% 2007 50 3,246,767 .444,744 13.7% -47,508 Office Warehouse 2000 48 3,731,912 419,660 11.2% 2006 106 7,426,884 629,702 8.5% 2007 107 7,455,884 754,339 10.1% 3,389,293 Total 2000 125 9,903,724 1,487,132. 15.0% 2006 171 14,271,688 1,874,136 13.1% 2007 172 14,300,688 1,894,747 13.2% 3,989,349 i I Bulk Warehouse 214 23,217,174 4,082,386 17.6% Office Showroom 270 18,750,981 2,247,780 12.0% Office Warehouse 976 74,063,314 5,929,252 8.0% Total 1,460 116,031,469 12,259,418 10.6% Sources: 2001-2008: Colliers Turley Martin Tucker, MarketQUEST Maxfield Research Inc. MAXFIELD RESEARCH INC. 40 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS Industrial Snace by Community Table 16 shows the amount of industrial space in each of the County's eleven largest communi- ties and the County as a whole in 2000 to 2006. The data is from the Dakota County GIS. The following are key points from Table 16. ~ As of 2006, there are about 1,050 industrial buildings over 40 million square feet of space in Dakota County. Eagan (13.1 million square feet) and Burnsville (8.9 million square feet) account for 55% of the total industrial space. ~ Comparing the total amount of industrial space in the County from Table 16 (40.3 million square feet) with the amount of multi-tenant leased space from Table 15 (14.3 million square feet} reveals that the majority of industrial space in the County is owner-occupied, single- tenant space. TABLE 16 INDUSTRIAL SPACE BY COMMUNITY DAKOTA COUNTY 2000 and 2006 2000 2006 Change No. of No. of No. of Buildings Square Feet Buildings Square Feet Buildings Square Feet Large Communities Apple Valley 25 .757,366 30 914,215 5 156,849 Burnsville 227 8,050,134 256 8,940,816 29 890,682 Eagan 219 12,288,233 237 13,135,661 18 847,428 Farmington 28 711,168 34 809,396 6 98,228 Hastings 33 1,143,333 44 1;370,774 11 227,441 Inver-Grove Heights 50 1,663,807 54 1,693,312 4 29,505 Lakeville 93 5,155,354 109 5,503,869 16 348,515 Mendota Heights 41 2,610,178 43 2,646,608 2 36,430 Rosemount 35 1,039,460 40 1,220,058 5 180,598 South St. Paul 75 2,139,604 104 2,329,351 29 189,747 West St. Paul 26 1,029,515 28 1,065,092 2 35,577 Subtotal 852 36,588,152 979 39,629,152 127 3,041,000 Remainder of Co. 62 624,551 69 683,405 7 58,854 Dakota C'ount~ 'Dotal 914 37,212.703 1.048 x0,312.557 134 3.099,854 Sources: Dakota County GIS; Maxfield Research Inc. ~ From 2000 to 2006, Dakota County added an additional 4.2 million square feet of industrial space in 148 buildings. Eagan added 1.4 million square feet of industrial space in 22 build- . ings followed by about 940,000 square feet in 32 buildings in Burnsville. MAXFIELD RESEARCH INC. 41 COMMERCIAL & INDUSTRIAL DE~LQPIVIENT TRENDS Indus~tria~ pack in Iakot~ aun~~T ~~Q ~7 °4~'ect St, P~.a _ .m 11e1~tlaft - ~icnith ;{Squxr-e Feet) fit. Paut ~ ; ~_~rUt~,El%ti Iiei~Itts ~,Sik),Oi)il l ,:ti7i,. (~t i~~ }r.;io;u~ ~ ~ iuiltlr£vrc2i~i~r~ 'r' g§ ~iuil~ 'U t ~ c~~r aif:: 1111'6•, I 13u7-risl~iHe ' ~ G~-e~1c - Ilci~hts ~ ' - 1P~Ir 1:~Ilc~ Fioseme~u~~t ~ li'asti~t~s I.:~kr~ ills ~ =F'" FaiTninut~+n" ~«tErces: I)akvta C`~n~utw~ (aIS, lLi~i~:1d ~Lscar~l~ Inc. MAXFIELD RESEARCH INC. 42 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS Location of Industrial Buildings in_Dakota County, 2007 Roads Interstates _ Highways Litydale~ ~ , West St Paul Major Roads ~°r~ ~ ~s utn~st Pa~,i Parcels -Industrial Sq. fit. °PAendota Heights ,t~?~ ~ sunfish Lake Square Footage ~ 52 ~ ~ 1 to 14,000 ~ ~ ~ 10,001 to 80,000 Inver Grove Hei ht~s ~~....r~° ~ g ~ 80,00'E #0 284,370 Eagan S, 8 Burnsville NiningerTwp Apple Valley ~ ~ ~ O Rosemount : ~ ~Hasti~c O ~y. s t A.-~, Vermillion Twp Lakeville y ~ ~ ---y-~ s O C R venna Twp ~ Empire Twp ~ ~ Verm~„ilhon~ t Marshan Twp ~ a , ~ e ~ O a ~ f 61 s IC a ~ ~ Farmington--':°' s _~p i t 3 ~ a..„ „I ~ k r Hampton ~ M NewnTrier - Miesvil{e Castle Rock Tw ~ Douglas Twp ~ ~ E ~e Eureka Twp ~ p Hampton Twp ~ a ~ I s 1 s~ d~ s { ~ Rando p Randolph Twp Greenvale Twp t/Uaterford Twp€Sciota Twp ~ ~ O Northfield -a2~ _,.-~D2~zd NE Q c~unTy f_wfa`J I I (i('ln'1`!il S.~IW~1S =e'In.aff 1`... 20Y MAXFIELD RESEARCH INC. 43 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS ~ Since 2000, five buildings with more than 100,000 square feet were added in the County: Southcross Commerce IV (105,000 square feet) and Midwest Volleyball (114,000 square feet) were built in Burnsville; Lunar Pointe (118,400 square feet) and Eagle Global Logistics (128,000 square feet) in Eagan; and Webb Companies (128,500 square feet) in Rosemount. ~ There has been development of industrial condominiums since 2000, but not as much as of- fice condominiums. About 30 industrial condominiums. with a total of 133,000 square feet have been added, almost all of which are located in South St. Paul. Sizes are small (4,800 square foot average) compared to other types of industrial space (40,000 square foot average size). Industrial Space Development Trends Table 17 shows industrial development trends in five-year increments from 1980 to 2006. The following are key points from the table. ~ Dakota County has added an average of 4.3 million square feet of industrial space every five years since 1980 to 2004. This figure has varied greatly, however. Only 2.3 million square feet were added during the early-1990s, followed by almost 9.0 million square feet during the late-1990s. The economy was very strong during the late-1990s and development of all types of industrial space surged. The most development was among "warehouse, storage" space (as defined by the Dakota County GIS Department), with 3.5 million square feet. ~ During the 1995 to 1999 period, 26 of the buildings added have more than 100,000 square feet, 14 of them are located in Eagan. Six of the 26 buildings are more than 200,000 square feet. Wausau Supply (276,600 square feet) was built in Lakeville, and Skyline Displays (276,600 square feet), Apollo 3 (240,400 square feet), Silver Bell Commons (235,100 square feet), and Aldrin Distribution Center I and II (218,400 and 200,000 square feet, respectively) were all built in Eagan. ~ At current pace, the County is projected to add 2.6 million square feet from 2005 to 2009, slightly higher than the previously profiled five-year increments. / Communities with good highway access, proximity to the core of the Twin Cities, and avail- able industrial land have seen the most development since 1990. Apple Valley, which does not have great highway access, has seen limited industrial development. Farmington does not have great highway access either, but with cheaper land it has seen more development than Apple Valley. Inver Grove Heights has good highway access and proximity to the core Twin Cities, but until recently, most of the land did not have connections to sewer and water to support industrial development. MAXFIELD RESEARCH INC. 44 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS TABLE 17 INDUSTRIAL SPACE DEVELOPMENT TRENDS DAKOTA COUNTY 1980-2006 1980- 1985- 1990- 1995- 2000- 2005 & 1984 1989. 1994 1999 2004 2006 Large Communities Apple Valley 12,680 485,711 89,758 90,056 122,901 102,189 Burnsville 1,208,141 1,200,798 395,206 2,079,948 537,909 400,137 Eagan 386,103 1,272,977 797,787 4,603,666 848,305 159,799 Farmington - 78,483. 204,914 226,355 54,028 44,200 Hastings 31,261. 150,896 9,400 143,164 102,697 133,564 Inver Grove Heights 94,268 322,425 146,723 238,034 63,385 - Lakeville 824,260 750,260 22,424 681,701 413,764 50,148 Mendota Heights 393,900 291,599 •304,724 418,014 26,430 - Rosemount. 11,796 3$,504 41,036 236,369 268,512 47,960 South St. Paul 57,054 88,258 85,446 217,435 249,666 60,354 West St. Paul 58,992 32,396 153,732 - 18,225 17,352 Subtotal 3,078,455 4,712,307 2,251,150 8,934,742 2,705,822 1,015,703 Remainder of Co. 154,176 79,532. 44,856 55,182 58,694 22,160 DakotaCounlc "4'otal 3.232,631 -4,791,839 2,296,006 3989,924 ?,76d,~16 1,037.363 Sources: Dakota County GIS; Maxfield Research Inc. Industrial Spacc llc~ clopruent Trends Dakota Counh', 1980 to 2006 ~~_r~o~_ooi~ , ~:.nnu•i~uCi I ~.iir~n.~)(i~i . s~ 1,.f10U_OiIU ~ a=,a:~.: ~ ~.o(ni_0(1Q ~ tu~n,(~O(1 ~ a r r+ C~ ~ 110O,OU(1 ~ y~j; ny, s I.U(i(L(1(1I1 ~ ~ •y• t, y ~ 198U-84 '8~ -'89 '90 -'94 '9a" -'99 '00 -'04 'OS 'll6 MAXFIELD RESEARCH INC. 45 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS Industrial Develoument Trends by Type of Space Tablel8 details industrial space by type of space as defined by "dwelling type" in the Dakota County GIS parcel data. The table shows the number of buildings and amount of space added during the last 10 years (1997 to 2006) and the 10 years before that (1987 to 1996) for each type of space. The following are key points from the table. ? From 1987 fo 1996, storage warehouses (86 buildings) accounted for more than half of all industrial space added in Dakota County. Carmen Distribution in Inver Grove Heights (174,300 square feet), Data Sales in Burnsville (182,120 square feet), and Ryt-Way Indus- tries in Lakeville (250,210 square feet) were the-three largest storage warehouses built in the.. County. ? Of the 10.2 million square feet of industrial space built from 1997 through 2006, storage warehouse (3.3 million square feet) again was the most commonly built industrial type. Warehouse bulk storage and warehouse business center followed, with about 2.2 million square feet each. ? The three industrial research and development buildings added from 1997 to 2006 tripled the amount of space added in the previous 10 years. Almost all of this space was in the Skyline Display building (276,000 square feet) added in Eagan. TABLE 18 INDUSTRIAL SPACE DEVELOPMENT (SQ. FT.) BY TYPE OF SPACE DAKOTA COUNTY 1987-1996 & 1997-2006 1987-1996 1997-2096 _1v« ti~ . 1 t. 1'cr~ BG~ildin~ No. of No. of Buildings Square Feet Buildings Square Feet 1987-1996 1997-2006 Garage/Storage 9 80,254 2 .10,248 8,917 5,124 Industrial, Condo 8 29,195 29 133,190 3,649 4,593 Industrial, Manufacturing 34 1,320,583 43 1,439,735 38,841 33,482 Industrial, R&D 6 149,104 3 306,750 24,851 102,250 Lumber Storage 2 29,000 3 51,012 14,500 17,004 Service Garage 9 90,093 7 76,999 10,010 11,000 Shed, Equipment 5 33,024 2 7,064 6,605 3,532 Warehouse, Bulk Storage 2 253,694 18 2,282,290 126,847 126,794 Warehouse, Business Center 32 1,571,032 42 2,219,263 49,095 52,840 Warehouse, Mini 6 111,387 13 335,698 18,565 25,823 Warehouse, Storage 86 3,950,693 94 3,252,294 45,938 34,599 Warehouse, Transit 3 35,601 2 51,756 11,867 25,878 Total 202 7,653,660 258 10,166,299 37,889 39,404 Sources: Dakota County GIS; Maxfield Research Inc. MAXFIELD RESEARCH INC. 46 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS Industrial Development Trends by Type of Space and Community Tables 19 and 20 detail industrial space added by type of space and community. Table 19 shows space added during'the last 10 years.(1997 to 2006) and Table 20 shows space added the 10 years before that (1987 to 1996). The data is from the Dakota County GIS. The following are key points from the tables. ~ Between the two periods, six communities saw an increase in the amount of industrial space developed and five saw a decrease: Communities with a decrease were Apple Valley, Far- mington, Inver Grove Heights, Mendota Heights, and West St. Paul. In future years, Men- dots Heights and West St. Paul are likely to see continued declines in industrial development because of a lack of available land. Development is likely to pick up in Inver Grove Heights because it now has available land and also has good highway access. Apple Valley and Farmington may also see increased development since they too have available land. ~ Eagan has seen a varied amount of industrial types added since 1987. Most other communi- ties have added primarily warehouse storage buildings and industrial manufacturing, but on- ly afew other types. During the past 10 years, Inver Grove Heights and Lakeville began to see development of multiple types of space. ~ During the period 1987 to 1996, Farmington added the most manufacturing space followed by Rosemount and Apple Valley. Uponor, built in 1989, occupied all 178,000 square feet of industrial space in Apple Valley during the period. Cannon Equipment, built in 1996, occu- pied 106,000 square feet in Rosemount. Valmont Lexington Industries, built in 1992, occu- - pied 95,000 square feet in Farmington. ~ Eagan added 1.8 million square feet of bulk storage warehouse space from 1997 to 2006, by far the most of any community. The largest buildings include Apollo 3 building (240,000 square feet) and Aldrin Distribution Centers I and II (218,000 and 200,000 square feet, re- spectively). ~ Lakeville added 333,000 square feet of manufacturing space from 1997 to 2006, the most of the 11 profiled communities during the period. The 10 manufacturing. buildings built in Lakeville averaged approximately 33,000 square feet per building, the largest being Hearth Technologies and Applied Power Products. ~ Hastings saw limited industrial development since 1987 until several warehouse storage buildings were built this past decade totaling 290,000 square feet. The largest of these new buildings was Quality One with 100,000 square feet, followed by Westview Packaging with 68,000 square feet. 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The following are key points from the interviews: Industrial Comments / Most communities have land available for new industrial buildings. However, most also would prefer to attract businesses with a higher number of employees, such as manufactur- ing. Distribution spaces are generally not the first choice, since there are so few employees per building. / Distribution and warehouse space supporting wholesale trade, trucking, and storage opera- tions are the most common industrial buildings added in Dakota County this decade. The addition of smaller niche firms focused on light manufacturing is also becoming a trend. Overall, high-tech and green manufacturing has yet to materialize in the County. However, many communities have been pursuing high-tech firms, specifically bio-tech. Many cities are applying to include land within the Bio-Zone. Five cities (Apple Valley, Burnsville, Ea- gan, Lakeville, and Rosemount) received Bio-Zone designation in 2007. Office Comments / With the exception of Eagan, the office market in most communities consists of small- to mid-sized tenants. / .Most communities. stated that they have land available to support new office buildings. Even communities that are mostly built-out have some vacant parcels remaining, or some parcels that could be redeveloped. / Most communities would like to expand their employment base by attracting a corporate headquarters. or several larger office tenants in a businesscenter. Retail Comments / Growing communities generally have plenty of land available for more retail space and, most communities would embrace the new stores as they would offer more choices to residents. More mature northern communities would also welcome more retail -specifically restau- rants. However, these northern communities generally accept that they do not have large enough parcels to attract new big-box stores and are not pursing them. 1 In the northern part of the County, some redevelopment of older existing shopping centers will likely occur because land for retail has become limited. MAXFIELD RESEARCH INC. 50 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS Interview Summary -Area Brokers Maxfield Research interviewed commercial and industrial brokers that concentrate their work in Dakota County to gain an understanding of the local industrial, .office, and retail market trends. The following are key points from the interviews: Industrial Comments Lease rates are beginning to flatten out in 2008 due to shrinking demand for industrial space. The cause for the shrinking demand in warehousing and distribution space is a result of cur- rent market economics. / There are several areas in Dakota County with excellent highway access, particularly Eagan. . Most users. seeking space here are looking for bulk warehouse space with high ceilings. / Bulk/warehouse has been in high demand. Buildings with 24 foot-plus ceiling heights and high loading dock bays are the most desirable spaces. / Wholesale trade, trucking, and storage operations servicing the airport are the most common businesses seeking industrial space in the County. / Overall, Dakota County's transportation infrastructure needs improvements; highway access in the southern part of Dakota County is les=s~xtensive than other areas. The lack of a major east/west transportation route with a connection to Interstate 35 is hindering industrial growth in places like Farmington. Office Comments / Dakota County has a sufficient amount of vacant, new Class-A office space. / Currently, the County is experiencing little expansion to larger spaces mainly due to market economics. Eagan, Mendota Heights, and Inver Grove Heights will be the first cities to ex- perience growth once the market. returns. / Typical office tenants are lawyers, accountants, copywriters and editorial-support personnel, mortgage and insurance providers, and professional service providers that want small office space. The most common office size in the County is between five and 20 employees. / Office tenants in Dakota County want abundant parking, a highly visible building with a strong image, and updated amenities. Tenants also want the most current communication lines and technology. Retail Comments / Overall, the Dakota County retail market is currently very poor in terms of leasing strength (finding tenants to lease space). In the current environment, tenants are requiring conces- MAXFIELD RESEARCH INC. 51 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS signs; build-out incentives, and lower lease rates. Retail space will continue to be in low de- mand in the County until the economy begins to improve. Factory Direct and E-Manufacturing Trends The future demand for warehouse space in the County may be impacted by the expansion of .goods delivered factory direct (including e-manufacturing). Factory direct is when a -consumer purchases goods directly from the manufacturer. The factory direct option expanded in the 1990s with strong growth of e-commerce. Major factories, like Dell and Gateway, started mar- keting products directly to their market, rather than going through a traditionally tiered sale sys- tem. This reduces the need for a distributor; hence the need for distribution warehouse space is reduced. Green Building Trends An emerging trend that will impact development of all types of commercial and industrial space, as well as housing, is constructing buildings that are "green" and/or sustainable. However, this trend may not directly affect the amount of commercial and industrial space needed in the Coun- ty. Most new buildings will need to incorporate some green elements to appeal to the desires of future tenants to be competitive. In addition, older existing buildings may need green upgrades to remain competitive in the marketplace. LEED, Sustainable Design, and Green Manufacturing, measurements of green and sustainable development are trending toward the norm among many builders and developers. What started out as a grassroots movement not so long ago has made its way into the development community today. Summaries of each are as follows. LEED The Leadership in Energy and Environmental Design (LEED) Green Building Rating System encourages adoption of sustainable green building and development practices through the creation and implementation of universally understood and accepted tools and performance criteria. Green design "officially" commenced through the Leadership in Energy and Environmental Design (LEED) program, which sets national- standards for sustainable buildings and perfor- mance standards. The system was put into place in 1998 and has grown substantially with minimal public funding. The LEED approach to sustainability is based on the following five areas: sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental quality. To earn LEED certification, buildings must meet certain prerequisites and performance benchmarks to earn "credits" for each category. Buildings are then awarded Certified, Silver, Gold, or Platinum certification based on the number of credits the building project achieves. LEED provided benchmarks for measuring nearly every type MAXFIELD RESEARCH INC. 52 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS of building and a building's lifecycle. LEED programs range from new commercial con- struction and renovations, to single-family homes, to entire neighborhood developments. Governmental entities have taken an active role in meeting LEED criteria. The U.S. General Services Administration now mandates all new federal buildings meet criteria .for LEED cer- tification. Furthermore, a number of states are working on passing legislation requiring state buildings to meet minimum LEED certification levels. On a local level, cities such as Port- . land,. Oregon and Austin, Texas have enacted green building mandates for municipal or city owned properties.. Vancouver, British Colombia is even requiring some private develop- ments to adhere to green requirements, and locally, the City of Minneapolis recently ap- proved aresolution that requires all city-fmanced buildings to obtain LEED certification le- vels. Sustainable Design Sustainable design seeks to reduce negative impacts on the environment, and the health and comfort of building occupants, thereby improving building performance. The basic objec- tives of sustainability are to reduce consumption of non-renewable resources, minimize waste, and create healthy, productive environments. Simply stated, the building is striving to maximize operational energy savings while minimizing any environmental impacts and pro- viding an overall healthy interior atmosphere. Sustainable projects can be achieved in all real estate uses; from a single residential home to amaster-planned green community. Cost Benefits of Sustainable Design Although the perception of green buildings among most people is they need expensive and new technologies, developing a green building is simply using fewer resources while provid- ing ahealthier environment. The benchmark that architects and developers use today at- tempting basic LEED certification raises the overall building costs by about 3% to 5%. Ac- cording to the US Green Building Council (USGBC), there is a 2% up-front investment, which results in a 20% life-cycle savings on average. The benefits of going green show up in the- building's life cycle, with cost savings in lower energy costs {up to one-third. savings), waste disposal, water; and operation and maintenance expenses. According to a recent study by Turner Construction, 84% of companies involved in sustaina- ble building believe that green construction will yield higher property values. Furthermore, 75% of those companies believe their building will earn a higher return on investment than traditional buildings. Green Manufacturing Initiatives Green manufacturing is a production methodology aimed at minimizing or avoiding waste and pollution, achieved through green product and process design. Green Manufacturing practices focus on preventing pollution, reducing costs, saving energy, and deliver efficien- cies at all points in the design, manufacturing, marketing and recycling process. MAXFIELD RESEARCH INC. 53 COMMERCIAL & INDUSTRIAL DEVELOPMENT TRENDS Economic Shifts Dakota County, like the rest of the Metro and United States, is facing a global shift and restruc- turing from a manufacturing economy to one focused on services. The switch from a manufac- turing-based to a service-based economy, the reduction in international trade barriers, and globa- lization of the world economy all are impacting the viability of manufacturing in the United States. This shift to the service sector is a change that will continue to impact the need for future Indus- trial land in Dakota County. The decline in manufacturing jobs as seen in Table 6 will likely continue through 2030 as the economy continues to shift away from traditional manufacturing. MAXFIELD RESEARCH INC. 54 COMMERCIAL/INDUSTRIAL LAND .SUPPLY Commercial and Industrial Land Su 1 pp Y Introduction This section of the report summarizes recent. trends and the current supply of for-sale housing in 'Dakota County, including single-family, townhomes, and condominiums. This section examines development trends for commercial and industrial land in Dakota County by examining data on: / commercial land by community; / office land by community; ? industrial land by type of space and community; and / commercial and industrial zoned land MAXFIELD RESEARCH INC. 55 COMMERCIAL/INDUSTRIAL LAND SUPPLY " Overview Trends in the amount of land developed for commercial and industrial uses in Dakota County are presented in this section. The supply of commercial and industrial land was determined using 2006 Dakota County GIS information in cooperation with the Dakota County Assessing Services and Property Taxation and Records. In accordance with the GIS data, the classification and use. of each piece of property (parcel) is determined by the Dakota County Assessor's Office. As the chart below shows, industrial uses occupied the most land (5,500 acres) in 2006, followed by commercial/retail (4,450acres) and office (1,900 acres). It should be noted that there is po- tential to add more finished space on these developed parcels. C Developed Land (Acmes) by Use Type Dakota County, 2006 6,000 _.~_r. 5,000 - 4,000 3,000 I ?.000 1.000 0 ` fie-` Commercial Office industrial ~ Finis he d Space D Acre s This larger amount of commercial and industrial space being added in communities such as Ea- gan, Lakeville, and Burnsville this decade is resulting in these communities developing the most acres, as shown in the chart on the next page. More detail on land development trends in Dakota County is presented in the remainder of this Section. The analysis is presented separately for each type of use -retail/commercial, office, and industrial -beginning with retail/commercial MAXFIELD RESEARCH INC. 56 COMMERCIAL/INDUSTRIAL LAND SUPPLY Amount of Land (Acres) Developed by Type of Use Dakota County, 2000 to 2006 350 ~ 300 ? Office 250 ®Commercial O industrial 200 d 150 100 50 - 0 ~C ~C Q" QpS O~ O~ ~4 09 J't a~' V 4° P4~~ ~ dos ~~~ti ~ ~~o Commercial Land by Community Table 21 shows the amount of land occupied by retaiUcommercial buildings in 2000 and 2006. Data is shown for the eleven largest communities and the County overall. The figures are based on data provided by the Dakota County GIS. The following are-key points. ~ As of 2006, Eagan (815 acres), Burnsville (750 acres), and Lakeville (668 acres) have the .most developed commercial acreage in Dakota County. ~ Between 2000 and 2006, over 160 acres were developed with commercial uses in Lakeville, the most in any community. Inver Grove Heights, Eagan, and Apple Valley followed with between 90 and 105 developed acres each. Mendota Heights and South St. Paul, which are fully developed communities, had the least - at two and five acres, respectively. ~ Of the buildings added in Lakeville from 2000 to 2006, Lifetime Fitness (19.5 acres) and SuperTarget (15.2 acres) were developed on the largest parcels. Compared to the size of the buildings, the floor area ratio was 33% for Lifetime Fitness and 28% for SuperTarget. ~ From 2000 to 2006, the 257 commercial buildings developed in Dakota County occupied 822 acres. This equated to an average of just-over three acres per building. When compared to the finished space added (Table 10), it equates to floor area ratio of 15%. This was high- er in the more urban communities. The floor area ratio of the buildings added in West St. Paul was 30%. In Mendota Heights, the only new development was Mendota Heights Town Center and it had a 75% floor area ratio. MAXFIELD RESEARCH INC. 57 COMMERCIAL/INDUSTRIAL LAND SUPPLY TABLE 21 COMMERCIAL LAND BY COMMUNITY DAKOTA COUNTY 2000 and 2006 2000 2006 ~ Change No. of No. of No. of Buildings Acres Buildings Acres Buildings Acres Large Communities Apple Valley 104 238 135 327 31 89 Burnsville 225 696 245 750 20 54 Eagan -197 721 226 815 29 94 Farmington 61 234 74 256 13 22 Hastings 152 245 188 303 36 58 Inver Grove Heights 110 345 138 450 28 105 Lakeville 126 504 179 668 53 164 Mendota Heights 18 286 22 288 4 2 Rosemount 51 265 66 304 15 39 South St. Paul 91 67 95 72 4 5 West St. Paul 155 .176 169 216. 14 40 Subtotal 1,290 3,777 1,537 4,449 247 672 Remainder of Co. 106 733 116 883 10 150 Dakota Counn 't'otal 1,396 4,510 LG~3 .5,332 2~7 822 Sources: Dakota County GIS; Maxfield Research Ina ~ In Inver Grove Heights, the Wal-Mart added in 2003 was on a 16.8 acre parcel and had a floor area ratio of 20%. The Home Depot added in 2006 had a floor ratio of 26% (108,000 square feet on 9.55 acres). ~ In Rosemount, the University of Minnesota Outreach, Research, and Education ("Umore") Park, located along the Highway 52 corridor is currently undergoing a strategic long-term planning process. The facility is currently a 7,500 acre crop and livestock research facility operated by the University of Minnesota and its partners. One of the directions being consi- dered by the University and its partners is developing amixed-use master planned communi- ty that would include about 20,000 to 30,000 residents and incorporate retail, industrial, of- fice, and green space. The projected development period would likely be scheduled to be completed in phases over 25 to 30 years. MAXFIELD RESEARCH INC. 58 COMMERCIAL/INDUSTRIAL LAND SUPPLY Office Land by Community Table 22 shows the amount of land occupied by office buildings in 2000 and 2006. Data is shown for the eleven largest communities and the County overall. The figures. are based on data provided by the Dakota County GIS. The following are key points. ? In 2006, 1,974 acres in Dakota County were occupied by office uses. This compares to over 5,300 acres occupied by commercial uses (Table Z1) and over 6,200 acres occupied by industrial uses (Table 23). ? Eagan has by far the most land occupied by office space with 833 acres in 2006 (42% of the County total). ? In total, there were 85 office buildings built from 2000 to 2006 occupying 217 acres of land. Eagan accounted for about 88 acres in 22 buildings for approximately 41 % of the total land absorbed during the period. ? Among the largest office parcels developed recently in Eagan are Spectrum Commerce Cen- ter occupying 18.4 acres (300,000 square foot building added in 2001), Grand Oak Office Center VII occupying 12.4 acres (107,000 square foot building added in 2002), Grand Oak Office Center II occupying 10.2 acres (58,000 square foot building added in 2002), and Grand Oak Office Center III occupying 8.0 acres (69,000 square foot building added in 2002). ? Whereas commercial/retail space development generally follows households, the location of office is generally tied to other primary factors -such as major highway access, proximity to labor force, and. the Minneapolis-St.Paul InternationaLAirport. For this reason, the amount of land developed by offices from 2000 to 2006 is more concentrated in Eagan and Mendota - Heights (55% of the County total) compared to commerciaUretail (only 12% of the county to- tal). The exception is medical and dental offices which will follow households. With the ag- ing population, medical and dental offices will account fora significant portion of office growth. MAXFIELD RESEARCH INC. 59 COMMERCIAL/INDUSTRIAL LAND SUPPLY TABLE 22 OFFICE LAND BY COMMUNITY DAKOTA COUNTY 2000 and 2006 -2100 ~ ~ 2006 Ch~ir~~c No. of No. of No. of Buildings Acres Buildings Acres Buildings Acres Large Communities Apple Valley 44 276 71 297 27 21 Burnsville 93 122 166 158 73 36 Eagan 75 _726 130 833 55 107 Farmington 21 11 22 12 1 1 Hastings 36 27 42 36 6 9 Inver Grove Heights 31 .142 67 .160 36 18 Lakeville 28 107 76 134. 48 27 Mendota Heights 36 110 55 155 19 45 Rosemount 12 28 14 31 2 3 South St. Paul 43 38 52 39 9 1 West St. Paul 46 42 51 45 5 3 Subtotal 465 1,629 746 1,900 281 271 Remainder of Co. 12 69 17 74 5 5 Dakota County "Total 477 1,698 7{r3 1.974 336 276 Sources: Dakota County GIS; Maxfield Research Inc. ? From 2000 to 2006, the office buildings developed in the County's eleven largest communi- ties occupied a total of 271 acres. When compared to the finished space added (Table 13), it equates to floor area ratio of 29%. ? Future potential corporate headquarters would likely capitalize on vacant land parcels along Interstates 494, 35E, and 35W. Vacant land parcels located in the northwest corner of-Inter- state 494 and Argenta Trail in Inver Grove Heights, northeast Eagan along Interstate 494, along the southeast interchange of Interstates 35W and 35E in Burnsville, and in Lakeville along Interstate 35W have the greatest potential to capture a future corporate headquarters. However, securing a major single-tenant corporate user would require a commitment of pub- lic financing to attract this type of user. Industrial Land Development Trends Industrial Land by Community Table 23 shows the amount of land occupied by industrial buildings in 2000 and in 2006. Data is shown for the eleven largest communities and the County overall. The figures are based on data provided by the Dakota County GIS. The following are key points. MAXFIELD RESEARCH INC. 60 COMMERCIAL/INDUSTRIAL LAND SUPPLY ? There were about 6,200 acres of industrial land in the County in 2006, of which about 5,500 were in the eleven largest communities. Burnsville and Eagan had similar amounts of land occupied by industrial uses and together combined to account for 45% of the County's total industrial land. ? Burnsville's industrial land includes the 309 acre Burnsville Sanitary Landfill and a 93 acre parcel with only a 5,000 square foot building (McGowan Property). Thus, while Burnsville and Eagan have similar amounts of industrial land, Eagan has much more finished space (13.5 million square feet compared to Burnsville's 8.9 million square feet). TABLE 23 INDUSTRIAL LAND BY COMMUNITY DAKOTA COUNTY 2000 and 2006 21100 20116 Change No. of No. of No. of Buildings Acres Buildings Acres Buildings Acres Large Communities Apple Valley 23 164 30 183 7 19 Burnsville 224 1,206 256 1,357 32 151 Eagan 215 1,338 237 1,467 22 129 Farmington 28 73 34 88 6 15 Hastings 32 79 44 104 12 25 Inver Grove Heights 49 457 54 483 5 26 Lakeville 88 512 109 582 21 70 Mendota Heights 41 181 43 181 2 - Rosemount 33 655 40 701 7 46 South St. Paul 72 306 104 326 32 20 West St. Paul 26 73 28 81 2 8 Subtotal 831 5,044. 979 5,553 148 509 Remainder of Co. 61 549 69 689 8 140 akota Count~~ "hutal 892 x,593 1,048 6,242" 1~6 G19 Sources: Dakota County GIS; Maxfield Research Inc. ? From 2000 to 2006, the industrial buildings developed in the County's eleven largest coin- munities occupied a total of 509 acres. When compared to the finished space added. (Table 16) equates to floor area ratio of 19%. ? The above overall floor ratio is skewed slightly downward by some industrial uses that have small buildings on large properties. For example, Gemstone Plant & Kramer Gravel in Burnsville built a 3,000 square foot shed on 37 acres in 2000. Excluding low density users, the average floor area ratio is only 22% among properties added since 2000. MAXFIELD RESEARCH INC. 61 COMMERCIAL/INDUSTRIAL LAND SUPPLY Industrial Land by Type of Space Table 24 shows the amount of land developed with various types of industrial users during the past ten years-(1997 to 2006) and the 10 years before that (1987 to 1996). The data is from the Dakota County GIS. The following are key points from the table. ? The 86 warehouse storage buildings added from 1987 to 1996 occupied the most land in the .County - 338 acres. The largest parcels developed were by Ryt-Way Industries in Lakeville (250,000 square feet on 21.7 acres) and Lone Oak Commerce Center (134,000 square feet on 11.8 acres in 1995). ? About 170 acres were developed for manufacturing facilities from 1987 to 1996. The larg- est was a 26.5 acre parcel used to develop Dixie Petro-Chem's 35,500 square foot building. in Rosemount. ? Nine research and development buildings were added between 1987 and 2006. The largest parcel was by West Group who developed 43.5 acres with a 92,000 square foot building (re- search and development) in Eagan in 1991. TABLE 24 LAND ABSORPTION (ACRES) BY INDUSTRIAL TYPES DAKOTA COUNTY 1987-1996 & 1997-2006 1987-1996 1997-2[106 :~cres Pcr I3uildin~* No. of No. of Buildings Acres Buildings Acres 1987-1996 2997-2006 Garage/Storage 9 29 2 1 3 1 Industrial, Condo 8 - 29 - - - Industrial, Manufacturing 34 171 43 206 5 5 Industrial, R&D 6 127 3 44 21 15 Lumber Storage 2 10 3 36 5 12 Service Garage 9 159 7 354 18 51 Shed, Equipment 5 87 2 43 17 22 Warehouse, Bulk Storage. 2 21 18 170 11 9 Warehouse, Business Center 32 121 42 207 4 5 Warehouse, Mini 6 21 13 71 3 5 Warehouse, Storage 86 338 94 353 4 4 Warehouse, Transit 3 15 2 21 5 10 Total 202 1,099 258 1,507 5 6 Sources: Dakota County GIS; Maxfield Research Ina MAXFIELD RESEARCH INC. 62 COMMERCIAL/INDUSTRIAL LAND SUPPLY ? Service garages are typically less than 10,000 square feet in size and can occupy large prop- ernes. The service garage on thelargest property is one on the Burnsville Sanitary Landfill (309 acres). Others include a 3,600 square foot service garage on Minnesota Industrial Con- tainment Factory's (SKB Environmental Inc.) 88 acres in Rosemount and Highstone Proper- ties' 3,000 square foot service garage on 29 acres in Rosemount. ? The average floor area ratio varied depending on the type of use. As mentioned above, ser- vice garages are often small buildings on very large parcels, and thus have a low floor area ratio. Warehouse buildings, -with the exception ofmini-warehouses, tend to have the highest floor area ratios at about 25% to 30%. Average Floor Area Ratio by Industrial Type (Properties developed from 1987-2006) Industrial Type Acres Finished Sq. Ft. Floor Area Ratio Industrial, Manufacturing 377 2,760,318 16.8% Industrial, R&D 172 455,854 6.1% Service Garage 513 167,092 0.7% Shed, Equipment 130 40,088 0.7% Warehouse, Bulk Storage 191 2;535,984 30.5% Warehouse, Business Center 327 3,790,295 26.6% Warehouse, Mini 92 447,085 1 L 1% Warehouse, Storage 691 7,202,987 23.9% Industrial Land by Type of Space and Community Table 25 shows industrial land added by selected types of space and by community between 1987 to 1996 and 1997 to 2006. The data is from the Dakota County GIS. The following are. key points from the tables. ~ Most of the land developed for business. centers was in Burnsville and Eagan and all of the land developed for bulk storage was in Eagan. These two types of space had the .highest floor area ratios among the industrial uses. ? .Eagan developed 131 acres for bulk storage and 107 acres for business centers between .1997 and 2006. The bulk storage facilities of Aldrin Distribution Center I and II occupied the greatest amount of land (13.1 and 15.1 acres, respectively). The storage warehouse fa- cilities occupying the most land were Trapp Road Commerce Center II (11.9 acres) and BAX Global (11.8 acres). ? About 60 acres were developed for manufacturing facilities in Rosemount from 1997 to 2006. Endres Processing built a 54,000 square foot facility on a 34.1 acre parcel in 1997, Associated Woods Products built a 75,500 square foot facility on a 15.6 acre parcel in 2001, and Dakota Fence built a 21,000 square foot building on a 10 acre parcel in 1998. MAXFIELD RESEARCH INC. 63 COMMERCIAL/INDUSTRIAL LAND SUPPLY TABLE 25 DEVELOPED LAND (ACRES) BY INDUSTRIAL TYPES & COMMUNITY DAKOTA COUNTY 1987=2006 a'° .moo ~ °4 C7 ~ ~ " fi ~ ~ L ~ ~ ~ W ~ Q R R ~ ~ ~ ~ p ~ ~ 1987 to 199b Garage/Storage 6 3 - 3 0 - I - - - - Industrial, Manufacturing 16 17 15 13 - 14 24 8 55 8 - Industrial, R&D - - 49 1 - - 2 - - 1 - Lumber Storage - - 9 - - - - - - - - Warehouse, Bulk Storage - - 21 - - - - - - - - Warehouse, Business Center 15 59 40 - - 2 - - - - 6 Warehouse, Mini 7 4 2 - - - - - - 3 - Warehouse, Storage 5 84 90 23 1 - 30 48 - 12 6 Warehouse, Transit - - 14 - - 38 - - - - - Total 131. 167 262 40 1 54 57 56 .181 35 12 1997 to 2fI01i Industrial, Manufacturing - 11 33 9 5 14 34 - 60 11 1 Industrial, R&D - - 39 3 - - - - - 2 - Lumber Storage - 21 - - - - 9 - - - 6 Warehouse, Bulk Storage - - 131 - - 3 20 5 - 11 - Warehouse, Business Center 16 81 107 - - 2 1 - - - - Warehouse, Mini 8 8 14 5 - 21 3 - 10 - - Warehouse, Storage 5 85 113 4 22 6 50 10 31 11 - Warehouse, Transit - - 21 - - - - - - - - Total 29 260 470 21 29 51 133 15 101 34 8 Sources: Dakota County GIS; Maxfield Research Ina Vacant Commercial and Industrial Zoned Land -Based on Dakota County GIS and interviews with Economic Development Directors, Table 26 estimates the amount of vacant commercial and industrial land available for each of the 11 larger communities and the remainder of the County. When evaluating the Dakota County GIS data summarized in Table 26, note that commercially zoned land is defined as future land develop- ment supporting either retail or office space uses. The following are key points from the table. MAXFIELD RESEARCH INC. 64 COMMERCIAL/INDUSTRIAL LAND SUPPLY ~ Dakota County has approximately 2,900 acres of vacant land currently zoned for commer- cial and another 4,785 acres zoned for industrial uses. These figures only include vacant .land currently zoned for these uses. They do not include vacant land identified for future commercial or industrial space, but currently zoned for something else (most often Agricul- ture). ~ .Almost 60% of the total zoned vacant commercial land in the County is located in Lakeville and Eagan. Much of the vacant commercial land in Eagan is located in the northeastern cor- ner of the City on several large scattered parcels. ~ In addition to Lakeville's vacant zoned land for commercial and industrial uses, there is also an abundance of agricultural land south of Highway 70 from Interstate 35 to Dodd Boule- yard that is planned for commercial and industrial uses. Thus, Lakeville will more than like- ly have sufficient land to meet growing commercial and industrial needs in the community through 2030. ~ Eagan still has over 500 acres of vacant zoned commercial and 270 acres of zoned industrial land. After this, the supply of vacant commercial and industrial land in the northern part of the County is shrinking. However, there is potential to add more commercial and industrial space in these. areas by expanding existing buildings (increasing density on parcels) and by redeveloping older, obsolete spaces. ~ The 2,160 acres in Rosemount accounts for more than half of the total of vacant industrial land in the County. Much of this land surrounds Flint Hills Resources' Pine Bend Refinery on the west side of Highway 52. ~ A large amount of commercial and industrial zoned land has become available in Inver Grove Height's Northwest Planning Area. This area is roughly surrounded by Highway 55 and Interstate 494 on the north and south and from the Eagan border east nearly to Babcock Trail. In total, the Northwest Planning Area is zoned to accommodate approximately 2.8 million square feet of commercial space, 1.5 million square feet of office space, and 1.3 mil- lion square feet of industrial space. In addition, sewer and water connections will -soon be extended to parcels along Highway 52 in the southeastern portion of the community. Inver Grove Heights will have the land capacity to add a significant amount of commercial and industrial space to meet it's, and neighboring communities' future needs. ~ Much of Apple Valley's 420 acres of zoned vacant industrial land is situated in the southeast corner of the City. Most of this land is currently being mined for sand and gravel and will come on-line incrementally over the next decade or sooner. MAXFIELD RESEARCH INC. 65 COMMERCIAL/INDUSTRIAL LAND SUPPLY TABLE 26 VACANT COMMERCIAL AND INDUSTRIAL ZONED LAND* DAKOTA COUNTY 2007 Commercial Industrial Community Acres Acres Total Apple Valley 40 420. 460 Burnsville 90 150 240 Eagan 520 270 790 Farmington 120 90 210 Hastings 85 120 205 Inver Grove Heights 330 710 1,040 Lakeville 675 250 925 Mendota Heights 6 45 51 Rosemount 130 2,160 2,290 South St. Paul 30 40 70 West St. Paul 0 0 0 Subtotal 2,026 4,255 6,281 Remainder of Co. 863 531 1,394 akora Counh• 2,fi89 4,785 7,67# * Includes only vacant land zoned commerical or industrial, not vacant land identified in land use plans as future commercial or industrial but currently zoned for other uses. Sources: Dakota Coun GIS; Maxfield Research Ina ~ West St. Paul and Mendota Heights have very little land remaining for commercial and in- dustrial development. South St. Paul has a small supply as well, but has greater redevelop- ment potential with the closing of the stock yard planned in Apri12008. In addition, none of the vacant parcels in these communities are large enough to support big-box retail, which has been a trend over the past decade or more. Thus, most commercial spaces added will be smaller. ~ Like Lakeville, Farmington and Hastings are next to agricultural land and therefore have greater capacity to add commercial and industrial land to their communities as the need aris- es. Currently, both communities have about 200 acres of vacant zoned commercial and in- dustrial land. Between 2000 and 2006, both communities developed about 40 acres with commercial and industrial uses. MAXFIELD RESEARCH INC. 66 COMMERCIAL/INDUSTRIAL LAND SUPPLY Location of Vacant Commercial Zoned Land, 200'~* Lilydale ~ a f f ~ Vilest St Paul Nlendota~ ~ i ,-:,South St auE Mendota Heights . .r=~? Sunfish Lake Rt31C~5 ~w ~ ~ ~ .or ~ n°h ~ Interstates " ~ ~ Highways ~ Inver Grove Heights Eagan ~ s2 Major Roads a - - ~ ~ ~ F ~ Burnsville - ~ Nininger Twp Apple Valley ~j , _ _ . Rosemount ~ Hastings . ~ Coates f f ~ ~ ~ Vermillion Twp t 'Lakeville ~ ' ~ ~ ~ x ~ Ravenna Twp Empire Twp ~ Vermillion Marshan Twp & t i + EI. F I { . rj Farmingt~on~~ _ _ ~ _ ' 1 ~ ~ ~ ~ r+~, ~ l o ~ ~ Hampton NevvTrier- t:.~ ~M~esville Eureka Tw ~ Castle Rock Twp ~ Douglas Twp ~ _ k ~ e p ~ ~ Hampton Twp ~ e l ~ ~ s~. a ~ 52 ~ ` ~ _I # Randolph Twp Randolph ~ Greenvale Twp Waterford Twp'Sciota Twp f ~ ~ i ~ Northfield+.t ~ ;~rs~+eretl L~ the Doh`- ',.cWny e ..e:.~r-3~,ic Ir~iom~n Sysiens '~:n;ar; t?. 24~' * This map only shows vacant land that is presently zoned commercial. Other vacant land iden- tified in local land use plans may currently be zoned for other uses, primarily agriculture. MAXFIELD RESEARCH INC. 67 COMMERCIAL/INDUSTRIAL LAND SUPPLY Location of Vacant Industrial Zoned Land, 2007 Lilydale~ ~ ~ West 5f Paul Mendota ~ South S~ [ Mendota Heights _ ~ ~ ,r . Sunfish Lake ~ ~ R'Oc~t'IS ~ ~ 521 Infersfafes i t„ ~ Highways ~ ~ Inver Grove Heights „~„~f Eagan ~ ~ ~ ~llajor Roads ~ ~ Burnsville ~ - ~ ~ ~ ~ ~ ~ Nininger Twp ~ ~ Apple Valley ~ ' E ~ ~ Rosemount ~ ~ Hastings ~ nrv ~ ~ ! g . F Coates ~ ~3 ~ { ~ ~ i T , Vermillion Twp € , Lakeville y - Ravenna Twp t Em Ere Tw 52 E i P~ P i ~ ' Vermillion Marshan Twp ~ i f a r ~ ~ i Farmington ~ ~ t .,w...m..~...... ~ i~"" e s E Hampton NewrTner a` - Miesv~e; 1 a Eureka Twp Castle Rock Twp ~ Hampton Twp 'Douglas Twp _ w-: y~e F' ~ ~ $ € _ _ a~ i~ o ~ ~ Rand ~h Randolph Twp Greenvale Twp Waterford Twp Sciota Twp _ ~ a Northfield.. ~-n~, .t a'3rEtl Ly NE O~Y ~un`~: c: oi'.~e6~~a'^iC f^i~XRr3+Je113v5teris ~~ts.;arv 1`. NCO * This map only shows vacant land that is presently zoned industrial. Other vacant land identi- fied in local land use plans may currently be zoned for other uses, primarily agriculture. MAXFIELD RESEARCH INC. 68 Demand Anal sis and y Recommendations Introduction. This section of the report presents calculations of demand for commercial/retail, office, and in- dustrial space in Dakota County from 2008 to 2030. In addition, the amount of land needed to accommodate the new commercial and industrial space is calculated. The demand calculations and recommendations were made based on the analysis of data presented in this report, including demographic and employment growth trends and characteristics, market conditions, and recent development trends. This section includes: / projected demand for retail/commercial space and land from 2008 to 2030; / projected demand for office space and land from 2008 to 2030; and / projected demand for industrial space and land from 2008 to 2030. MAXFIELD RESEARCH INC.. 69 DEMAND ANALYSIS AND RECOMMENDATIONS Projected Demand for RetaiUCommercial Space Demand for additional retail and commercial space in Dakota County from 2008 through 2030. is shown in Table 27. The table shows demand by five year increments for each of the County's 11 larger communities as well as for the smaller communities and townships collectively. Demand for retaiUcommercial space in the County was calculated based on growth in the house- hold base, consumer expenditures, projected retail leakage trends (leakage is the amount of con- sumer spending .for goods and services likely to be spent outside the community/county), and trends in the average sales per square feet of space. In addition to the above factors, the demand for each community took into account the community's projected household growth, total exist- ing retail space, space per household, proximity to other major retail centers, and suitable land available for new development (land with good highway access and visibility). The following are key points about Table 27. Demand was calculated for an additional 10.5 to 12.0 million square feet of retail space in the County from 2008 to 2030. This calculated demand equates to about 2.5 million square feet every five years between now and 2030. However, demand will be greater during the beginning of next decade and then slow through 2030 as household growth slows. ~ Demand for retail/commercial space is projected to be greatest in Lakeville. Not only is Lakeville projected for household growth, it also has less retail space per household than. other more mature communities in the northern part of the County, such as Burnsville and Eagan.. Other communities, such as Mendota :Heights, West St. Paul; and South St. Paul have little remaining land available for new retail. Most new developments in these com- munities will be the result of redevelopment, which may simply replace older spaces and not actually add to the total inventory. ~ Lakeville has a significant amount of vacant land near the intersection of Interstate 35 and County Highway 50. With a new bridge and access ramps to Interstate 35 planned, this in- ersection will be appealing to major retailers and may accommodate a large portion of Lakeville's future retail space. ~ Dakota County is projected to add approximately 53,000 households from 2008 to 2030.. When compared to the amount of projected retail space, the total amount of retail space (square feet) per household is projected to steadily increase through 2030. As shown below, the amount of space per household is projected to increase from 142 square feet/household in 2000 to 173 square feet per household in 2030. The increasing supply of big box retail is one reason for the rising ratio. CommerciaURetail Square Feet per Household Trends, Dakota County 1990 2000 2010 2020 2030 132.2 142.4 162.4 170.8 172.9 MAXFIELD RESEARCH INC. 70 O O _ O O O O O O O. 0 0 0 0 O. O~ O O N O ~ 0 0 0 0 0 v7 0 0 0 0 0 0 O O ~ O vi v1 O N ~ vi ~ Sri vi N O N ~ ~ ao Cr n ~ N N N ~ H 0 0 0 0 0 0 0 0 0 0 0 0 O O ~ 0 0 0 0 0 0 0 0 0 0 0 0 O 0 0 0 0 0 0 0 0 0 0 0 0 O - O O~~ O v'i O ~n O ~n v1 O O ~O M O M N \D M 00 00 O M M 00 ~ ~ 00 \D vl 00 N ~D \D .r N .--i O O ~--i O O O 0 0 0 0 0 0 O ~ O 0 0 0 0 0 0 0 0 0 0 0 0 O 0 0 0 0 0 0 0 0 0 0 0 CT O O O O O O O.O O V1 O ~ 0 0 ~O O p ~ \O .fir O m_ DD B O O vl O ri O ~ N N et M N M M ~ 0 0 0 0 0 0 0 0 0 0 O O O O N 0 0 0 0 0 0 0. O 0 0 0 0 O O 0 0 0 0 0 0 0 0 0 0 0 0 O N 0 0 0 0 0 0~ 0 0~ O O O ri r-i 0 0 0 0 0 0 0 O - 0 0 0 0 0 0 0 0 0 0 0~ O ~ 0 0 0 0 0 0 0 0 0 0 0 0 O O ~ O O O O v'i O O vi O ~.O O O O O M ~ N N~ M N~~ N ~ N r,y N O 0 0 O O O O O O O O O O O O O O O O O O O O O O O O O N 0 0 0 0 0 0 0 0 0 0 0 0 O ~ O O O v'~ O O V1 O O O O O O O Cr O W N ~ O \O N N n - N ~ N ~ N 00 a0 U cq y, H c F~ z o °o °o ~ ~ © °o °o °o °o °o °o °o o °o 0 0 0 0 aoN °°oooooCCCp P w o o °o~ ~ ~.v ~ o o ° ~ ~ ~ ~ N ~ ° v1 C M o A F B ~ "'i N M 00 M M M h M N ~ ~ ~ ~ ~ ~ ~ ~ ~ i ~ ~ F ~ O N o °o o °o o °o °o °o °o °o °o °o o° ° °o N O O O O O O O O O O O O O W~ O O v'i O h m vi ~ O~ 0 0 O - A A V1 ~ ~ N M 00 N ~ M ONO oN0 a N N z " o 0 ° w 0 0 0 0 0 0 0 0 ~ ° 0 0 0 0 0 0 0 0 0 0 0 0 o O ~ 0 0 0 0 0 0 0 0 0 0 0 0 0 oooooo~°oo°~ o .y ~ ~ O M~ N O~ M 00 O O~ Q O M O M Fi-j-' U V~ N N N 7 00 h .lam ~ ~O ~i ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ i W ~ 0 0 0 0 0 0 0 0 0 O O O O O I`1 - O O O O O O O O O O O O O O - _ ~C N O O O O O O O O O O O O O ~I O O O O O O~ O O v'~ O O O h N~ N 7 0~0 M A N et 0 O O ~ M U ~ o 0 A ~ ° Z °o °o 0 0 0 °o °o o °o 0 0 0 0 0 O 000000°°o°°oo~°c, °o ~o U O°~o~n°~°oo°oo~n.-i o ~ N 00 l~ et N O\ N N .-r ~ p 0 0 0 0 0 0 0 0 0 0 0 0 O O O 0 0 0 0 0 0 0 0 0 0 0 0 O N 0 0 0 0 0 0 0 0 0 0 0 0 O ~ ~ N ~O ~ CA e} ~ 000 ~ ~ a ~ N M N M M W ~ c.) z ~ w ~ A ~ ~ ~ H a w ~ Q w ~"i ~ w ~ w A a~ c~ ~ O 7 k y y O x T.. ~ Or eQ N- U ~ C bA ~ O~ Vj ~ w C y h N ~ C/) y R ~ ¢~ww~~:a~cG°v°~3 cw A DEMAND ANALYSIS AND RECOMMENDATIONS Projected Demand for RetaiUCommercial Land The amount of additional land needed to support the calculated demand for retail and commer- cial space in Dakota County from 2008 through 2030 is shown in Table 28. The table shows the need for land by five year increments for each of the County's 11 larger communities as well as for the smaller communities and townships collectively.. The following are key points about Table 28. ~ The need for land is based on the demand for commercial/retail space divided by a standard floor area ratio of 25%. For example, a 100,000 square foot retail building would need 400,000 square feet of land, or 9.2 acres. This ratio can vary depending on the amount of buildable square feet on a parcel (it can be less due to wetland or slope) or the density al- lowed on a certainparcel (smaller urban parcels may have greater allowed density). ~ Demand-was calculated for an additional 800 to 1.,100 acres of commercial land in the County from 2008 to 2030. This calculated demand equates to about 220 acres every five years between now and 2030. ~ Demand for retaiUcommercial land is projected to be greatest in Lakeville, Apple Valley, and Inver Grove Heights. Again, communities that are more mature are limited as to how much new commercial/retail land can be developed. TABLE 28 DEMAND FOR COMMERCIAL LAND (ACRES) BY COMMUNITY DAKOTA COUNTY 2000 - 2030 2008- 2010- 2015- 2020- 2025- 2010 2015 2020 2025 2030 Total Apple Valley 23 - 25 47 - 49 52 - 54 27 - 28 22 - 24 144 - 180 Burnsville 10 - 12 12 - 14 15 - 17 9 - 11 12 - 14 49 - 67 Eagan 11 - 13 18 - 20 15 - 17 13 - 15 7 - 9 52 - 74 Farmington 6 - 7 17 - 18 22 - 24 21 - 22 10 - 12 54 - 84 Hastings 5 - 7 20 - 22 14 - 16 10 - 12 8 - 10 48 - 67 Inver Grove Heights 36 - 38 38 - 39 34 - 36 17 - 19 15 - 17 123 - 149 Lakeville 22 - 24 79 - 81 74 - 76 46 - 48 41 - 43 216 - 272 Mendota Heights 6- 8 3- 5 1- 3 1- 3 1- 3 11 - 22 Rosemount 7 - 9 43 - 73 27 - 28 24 - 26 17 - 18 94 - 154 South St. Paul 1- 2 2- 4 1- 3 2- 4 1- 3 6- 16 West St. Paul 0- 2 4- 6 3- 5 2- 4 1- 3 8 19 Subtotal 128 -147 283 - 331 259 - 279 172 - 192 135 - 155 804 - 1,104 Remainder of Dakota Co. 0- 1 0- 1 0- 1 0- 1 0- 1 0- 6 Dakota County Total 128 - 148 283 - 332 259 - 280 172 - 193 135 - 156 804 - 1,110 Sources: Maxfield Reseazch Inc. MAXFIELD RESEARCH INC. 72 DEMAND ANALYSIS AND RECOMMENDATIONS Projected Demand for Office Space Demand for additional office space in Dakota County from 2008 through 2030 is shown in Table 29. The table shows demand by five year increments and for each of the County's 11 larger communities as well as for the smaller communities and townships collectively. The amount (in square feet) of additional office space needed in Dakota County is based primari- ly on projected employment growth in the County among industry sectors that typically utilize office space. The demand for each community took into account the communities' historic of- fice development, projected employment growth, existing office space, highway access and visi- bility, proximity to the Minneapolis-St. Paul International Airport, hotels and restaurants, other employment centers, and land available for new development. Our key points from Table 29 are summarized below. ~ Using the average fgure of 220 square feet of office space per employee, we project de- mand for an additiona16.5 to 7.6 million square feet of office space in Dakota County be- tween 2008 and 2030 to accommodate office employment growth. This equates to about 1.6 million square feet every five years between now and 2030. However, demand will be greater during the beginning of next decade and then slow through 2030 as employment growth slows. Demand for office space is projected to be greatest in Eagan. Eagan's location makes it highly attractive for larger office tenants, and it also has available land for new develop- ment. Eagan has excellent highway access, close proximity to the airport, and is within a short distance to the core of the Twin Cities. Other communities, such as Mendota Heights and Burnsville, have good locations but little remaining land available for new office space. Most new developments in these communities will be the result of redevelopment, which may simply replace older spaces and not actually add to the total inventory. ~ Medical. and dental offices accounted for about 9% of the office supply in Dakota County in 2006. Thispercentage will increase through 2030 as the population ages and needs more medical services. ~ Dakota County is projected to add approximately 58,200 jobs from 2008 to 2030. When compared to the amount of projected office space, the total amount of office space (square feet) per job is projected to increase slightly through 2030. As shown below, the amount of space per job is projected to increase from 82 square feet/job in 2000 to 90.2 square feet per job in 2030. This increase is due to the continued shift toward amore service-,oriented economy, meaning more people will work in an office environment. Office Square Feet per Job Trends, Dakota County 1990 2000 2010 2020 2030 82.2 71.0 83.2 88.1. 90.2 MAXFIELD RESEARCH INC. 73 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Q 0 0 0 0 0 0 0 0 0 0 0 0' o ovioov;o~oov;oo 0 0 ~ ~ \O ~ \C O ~ ~ N O h ~ h \O ~ 00 N h In O v~ _ ~ N h O h ~ ~ F-+ 0 0 0 0 0 0 0 0 0 0 0 0 O O 0 0 0 0 0 0 0 0 0 0 0 0 O 0 0 0 0 0 -O 0 0 0 0 0 0 O O h 0 0 v1 O v~ O O v~ O O O - ~n d' ~O h v1 ~D -r ao h h eF N N \D vl 7 h ..r ~ ~ ~ N V'V O O O ~ 0 0 0 0 0 0 0 0 0 0 O O" OO OO 0 0 0 0 0 0 0 0 p~ O O O O O O O O N O ~ O~ O O N N N 0 0 0 .y' O - N M M M N M M N ~ ~ _ N p 0 0 0 0 0 0 0 0 0 0 0 O O O 0 0 0 0 0 0 0 0 0 0 0 0 O N 0 0 0 0 0 0 0 0 0 0 0 0 O M 0 0 0 0~ O O O O O O o0 M ~ O O O 00 00 M ..r N rr O~ O~ O O O O O 0 0 0 O O 0 0 0 0 0 0 0 0 0 0 0 0 O O 0 0 0 0 0 0 0 0 0 0 0 O N N ~ O vi O O O vi O O O O M O M O .M-i O V'i V1 ~ d' 7 vi O O ^r O N M M M N M M N ~ ~ ~ ~ ~ O 0 0 0 0 0 0 0 0 0 0 0 O O O p 0 0 0 0 0 0 O O O O O O O F.y N 0 0 0 0 0 0 0 0 0 0 0 0 O ~ O~~ v1 O v~ O V1 O O O- O z O \O N N N ~ O _O ~ O O O O O F 0 0 0 0 0 0 0 0 0 0 0 0 O O ~ Pa Z O O O O O O O O O ~ O O O~ O ~ _ N Fy O p ~ ~D M O O N~ M M O .-w O W LTr ~,J N N ~ ~ ~ ~ ~ ~ i~ ~ i ~ ~ ~ 0 0 0 0 0 0 0 0 0 0 0 0 O O ~adoo 0 000000000000 0 ~E"" 000000000000 0 F A ~ N N ~ ~ U1 ~ O v'i v) O ~ ~ O O O ti .N-i M W M~ ~ N N ~ vi N 7 C A ~ .-r W 0 0 0 0 0 0 O O g 0 0 0 0 0 0 0 0 0 0 0 O O v i~y 0 0 0 0 0 0 0 O O O O N O M L^ W ~ O O O O O ~ O O O .-i O ~ LTI O N O ~ N N M~ 7~ O N O N A ~ N ~ , z o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 W ~y O O O O O O O O O O O O O IICC{ O O O O O O N~ O N O O O_ N h N M ~ O~ O ti O W O O W O O O O O O O O O O O ~ O O" A p oppooppgSooh o O O O O O N N ~i ~ v1 O 7 O O~~~ O ~n O „y O ,.r" N ~ A N N ' 1 , N N ~ , V r ~ ~ ~ ~ ~ O O O O O O O 0 0 0 0 0 0 O O 0 0 0 0 0 0 0 0 0 0 O O N 0 0 0 0 0 0 0 0 0 0 O O x C/1 0 0 0 00 O O O v'~ O O V a ~ ~ ~ ~ W ~~i ~ W d~ U ~ rl, A N ~ w A Z '~cn ti ~ F cG .a W Q' _ Q ~--i ~i ~ 7 O 3 r 1 ~ ~ W cC 4: O ~ G p" R. ea N U vi s. ~ y ~ w .a d CQ W W .'C.' ~ ~ CG ~ 3 ~ ~ A r~ DEMAND ANALYSIS AND RECOMMENDATIONS Projected Demand for Office Land The amount of additional land needed to support the calculated demand for office space in Dako- to County from 2008 through 2030 is shown in Table 30. The table shows demand by five year increments for each of the County's 11 larger communities as well as for the smaller communi- ties and townships collectively.. ~ The need for land is based on demand for office space divided by a standard floor area ratio of 25%. For example, a 100,000 square foot office building would need 400,000 square feet of land, or 9.2 acres. This ratio can vary depending on the amount of buildable square feet on a parcel (it can be less due to wetland or slope) or the density allowed on a certain parcel (smaller urban parcels may have greater allowed density). ~ Demand was calculated for an additiona1498 to 691 acres of office space in the County from 2008 to 2030. This calculated demand equates to about 135 acres every five years be- tween now and 2030. ~ Most communities will have sufficient land to accommodate their office needs through 2030. The exception is Mendota Heights, where demand may exceed available land. Other communities, such as Apple Valley, may need to rezone some vacant industrial land to ac- commodate the growing demand for commercial and office space (Apple Valley has 40 zoned commercial acres but demand for over 200 acres of commercial and office). TABLE 30 DEMAND FOR OFFICE LAND (ACRES) BY COMMUNITY DAKOTA COUNTY 2000 - 2030 2008- 2010- 2015- 2020- 2025- . 2010 2015 2020 2025 2030 Total Apple Valley 8 - 9 18 - 20 13 - 15 11 - 12 10 - 11 49 - 68 Burnsville 7 -9 16 - 17 11 - 13 8 - 10 7 -9 42 -59 Eagan 48 - 50 65 - 67 49 - S1 34 - 35 30 - 32 192 - .235 Farmington I- 2 2- 4 1- 3 1- 3 1- 3 5- 15 Hastings 1- 2 1- 2 1- 2 1- 3 1- 3 4- 11 Inver Grove Heights 9 - 11 23 - 25 17 - 19 11 - 13 10 - 11 59 - 79 Lakeville 12 - 14 29 - 31 22 - 23 21 - 22 19 - 21 82 - 112 Mendota Heights 14 - 16 16 - 18 12 - 14 11 - 13 10 - 11 51 - 72 Rosemount 1- 2 2- 4 1- 3 1- 3 1- 3 5- 15 South St. Paul 1- 2 2- 4 1- 3 1- 3 1- 3 6- 15 West St. Paul 0- 1 1- 3 1- 3 1- 2 1- 2 3- 10 Subtotal 102 - 117 175 - 195 130 - 150 101 - 120 90 - 109 498 - 691 Remainder of Dakota Co. 0- 1 0- 1 0- 1 0- 1 0- 1 0- 5 Dakota County Total 102 - 118 175 - 196 130 - 151 101 - 121 90 - 1.10 498 - 695 Sources: Mayfield Research Inc. MAXFIELD RESEARCH INC. 75 DEMAND ANALYSIS AND RECOMMENDATIONS Projected Demand for Industrial Space Demand for additional industrial space in Dakota County from 2008 through 2030 is shown in Table 31. The table shows demand by five year increments and for each of the County's 11 larger communities as well as for the smaller communities and townships collectively. The amount (in square feet) of additional industrial space supportable in Dakota County is based on projected employment growth in the County among businesses that typically utilize industrial space. Factors assessed when analyzing demand for each community are its projected employ- ment growth, historic industrial development, highway access, proximity to labor force and the Minneapolis-St. Paul International Airport, proximity to the core of the Twin Cities, and land available for new development. Key paints from Table 31 are summarized below. ~ Although the County's economy (and Nation's) is shifting away from manufacturing, there will still be industrial :demand in the County due to the growing household and employment bases. Overall, we project that the percentage of jobs requiring industrial space will decline from about 18% in 2008 to about 14% in 2030. However, the amount of industrial space per employee is projected to increase because a greater portion of the industrial demand will be for warehouse space versus manufacturing space. Overall, demand is projected for about 7.6 to 8.7 million square feet of industrial space in Dakota County between 2008 and 2030 that accommodate industrial employment growth. This equates to about 1.9 million square " feet every five years between now and 2030. Lakeville (about 2.3 million square feet) and Eagan (about 2.2 million square feet) show the largest excess demand between 2008 and 2030. West St. Paul displays the smallest amount of excess demand because there is very little land available for new industrial development,. Other communities contain availably industrial sites, but are waiting for investments in transportation upgrades, such as a major east to west route from Farmington to Interstate 35. Less mature markets such as Lakeville, Inver Grove Heights, and Farmington will increase their share of industrial development as mature industrial markets such as Eagan and Burns- - vine develop their last remaining industrial parcels. The remainder of Dakota County is projected to add a minimal amount of industrial space from 2008 to 2030 primarily due to limited employment growth. Townships and smaller communities such as Coates, Hampton, and Empire Township and Northfield might. attract new industrial development to support industries such as manufacturing, welding, and con- struction users. Industries might choose to locate in the smaller townships and communities if they can't afford to build closer to the core or adhere to more rigid design standards. Communities such as Sunfish Lake and Lilydale could attract industrial users but have little existing vacant land remaining. MAXFIELD RESEARCH INC. 76 O O O O O - O O O O O O O O O O O O O O O O~ 0 0~~ 0 0 0 0 0 O O 0 0 0 0 0 ~!1 O O O O 00 O M Vi ~n v1 v1 ~ M O ~ M O \O O l~ 00 t~ N d' O M N M A O 00 O o0 ~ M l~ N M N .-w N~ M N~ vl ~ ~ ~ ~ ~ i ~ ~ ~ H 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 vi vi h vi ~ o vi o o vi in vi 00 l~ ~ 7 7 M N M l~ M M ' N 'V N O N M 7 `O V N N ~ ~ O O 0 0 O O O O O O O O O O O O O O O O O O O 0 0 0 0 0 0 0 0 0 0 0 Vi OV - O ~ O M~~ O O O~ O O V O 7 M E N O V'~ V1 l~ M O O N O rl O N ~ ~ ~ i ~ O O O O O O O O O O O O O O N O O O O O O O O O O O O O O O O O O O O O O O O O N N O V1 M h O O O vl V1 O O - 7 O 00 vi M~ .--i ~A 00 N 7 7 , .-r N 7 N N ri ~--i O O - O O O O O ~ ~ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000000ooooot~ o 00 N O~ M O O 00 vi O O O O N M l~ O ~ r ~--i V1 N O O O O O O O O O O O O O O O iFr p 0 0 0 0 0 0 0 0 0 0 O O Z N O O O O O O O O O O O O 0 0 0 0 V1 O V1 ~n O O. O v~ ~n ~ ~O M V1 01 M \O ~ M 7 M M ~G rl rr U ~ 0 0 ~F o°o°ooo °ooooo,oov, o v~ 0 0 0 0 0 0 0 0 0 0 0 ~c o ~ F-Fzo 0 0„~„~0001~000000 0 00 M 01 7 l~ M N 7 00 'V W d Q N ~ .~.i ~ ,~.i 0 0 0 0 0 0 0 0 0 0 0 0 O O W ~ 0 0 0 0 0 0 0 0 0 0 O O ~AF~o° ° 0000000000 0 0 Q R N 7 \p V' W A .--i r-i Q ra - y ~ O O.O O O O O O O 1~+ O O O O O O O O O O O O O O O N ~ O O O OO OO 0 0 0 0 0 0 7 O ~ - I~ Uj O O O O~~~ O V'~ O N O N Eiy A ~ N ~ ~ M M \D ~ A z ~ ~ , 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o 0000000000 p o N O O O O O O O O O O O O O _O O_ O ~ ~n v1 ~/1 Vl P1 O O ~ N \O ~ .--r M ~ O ~ ~ N N N N O O O U o0 00 0 0 0 0 0 0 0 0 0 0 0 vi o v~ a ooocoOCCCCCV; o ~ O O O O^ 0 0 0 0 0 0 M O M ~ O~ l~ O Vl ~ p O O~ O ti O A N h 7 7 N N O1 ~D et p O O O O O O O O O O O O O O O O O O O O O O O O O O V N O O O O O O O O O O O O 0 0 0 0 vi O vi O v'i vi O O ~I FBI M O A N ~ N n M N ti ~ ~y i--i O S U ~ WN ~ ~ ~ ti A .c ~ H ~ 4 z N ~ ~ O '3 k Q j x+ ~ ~ c0 y, O cC ~yt W ~ y a .c ~ c~ - o ~ ~ v~ ~ dr~wwx~a~c4v~3 x A DEMAND ANALYSIS AND RECOMMENDATIONS ~ As shown below, when total employment is compared to the amount of projected industrial space, the total amount of industrial.-space (square feet) per job is projected to decrease through 2030. This decrease is due to the continued shift toward a more service-oriented economy, meaning fewer people will work in an industrial environment. It should be noted, however, that the amount of space per industrial job will increase as a greater percentage of industrial space will be warehouse versus manufacturing. Industrial Square Feet per Job Trends, Dakota County 1990 2000 2010 2020 2030 238.9 237.4 213.2 203.8 198.6 Projected Demand for Industrial Land The amount of additional land needed to support the calculated demand for industrial space in Dakota County from 2008 through 2030 is shown in Table 32. The table shows demand by five year increments and for each of the County's 11 larger communities as well as for the smaller communities and townships collectively. TABLE 32 DEMAND FOR INDUSTRIAL LAND (ACRES) BY COMMUNITY DAKOTA COUNTY 2000 - 2030 2008- 2010- 2015- 2020- 2025- . 2010 2015 2020 -2025 2030 Total Apple Valley 3 - 6 10 - 13 8 - 10 6 - 8 5 - 7 27 - 44 Burnsville 11 - 14 24 - 26 18 - 20 13 - 15 11 - 14 65 - 89 Eagan 52 - 54 70 - 72 52 - 55 36 - 38 33 - 35 207 - 254 Farmington 2- 5 8- 10 6- 8 6- 8 6- 9 22 - 40 Hastings 2- 3 2- 4 1- 3 5- 7 4- 6 9- 24 Inver Grove Heights 16 - 18 38 - 41 29 - 31 19 - 21 17 - 20 100 - 131 Lakeville 30 - 33 73 - 75 55 - 57 52 - 54 47 - 49 205 - 268 Mendota Heights 8 - 10 10 - 12 7 - 9 6 - 9 6 - 8 30 - 48 Rosemount 4-7 14-17 10-13 11 -13 10-12 38-61 .South St. Paul 3- 5 6- 9 5- 7 3- 6 3- 5 17 - 32 West St. Paul 0- 1 0- 1 0- 1 0 -1 0- 1 0 -6 Subtotal 132 - 156 256 - 280 190 - 214 156 - 180 142 - 166 720 - 996 Remainder of Dakota Co. 0- 1 0- 1 0- 1 0- 1 0- 1 0- 6 Dakota County Total 132 - 157 256 - 281. 190 - 215 156 - 181 142 - 168 720 - 1,002 Sources: Maxfield Research Inc. MAXFIELD RESEARCH INC. 78 DEMAND ANALYSIS AND RECOMMENDATIONS ~ The need for land is based on the demand for industrial space divided by a standard floor area ratio of 20%. For example, a 100,000 square foot industrial building would need 500,000 square feet of land, or 11.5 acres. This ratio can. vary depending on the amount of buildable square feet on a parcel (it can be less due to wetland or slope) or the density aI- lowed on a certain parcel (smaller urban parcels may have greater allowed density). Demand was calculated for an additiona1720 to 1,002 acres of industrial land in the County from 2008 to 2030. This calculated demand equates to about 190 acres every five years be- tween now and 2030. ~ Eagan will most likely exhaust its supply of industrial land by 2030. Other communities, such as Lakeville, Inver Grove Heights, Rosemount, Apple Valley, Farmington, and Hast- ings will likely have sufficent land to accommodate demand for new industrial space. MAXFIELD RESEARCH INC. 79 DAKOTA COUNTY COMMERCIAL/INDUSTRIAL MARKET STUDY Demand for .etai/~a?mereal Space by Community ~~ka~a ~u~n~ty, 2~a8 t~ ~Q3p 1i'f•st 4t, P:ald A If~t~+k~tu tiiiahts ~ Sc,ut}~ r; ~ ti#. Pulp -~t!~ F~a ~~:u! 'z r?rtl. [~«tal ~«nim~rcial'retxil ti >a~e ~leniand BIITns~~illc I ~ I13re1_Grwe la~ri~een 2(?OR ci~~d 2{}3t1 (Sy. FL} Ilca~~trts~ - ~phl~~ ~°alr~' Ro~eluoullf- - Ila5tin4~ - _ r~;,~, ' I~ i sl tkrti _ ~'iITTIIIII~,tf11i.. - ~;ourcL: .1 ~~~15~1d Rescard~ Inc. MAXFIELD RESEARCH INC. 80 DAKOTA COUNTY COMMERCIAL/INDUSTRIAL MARKET STUDY ~~~~st Vic. 1~I~nclr?t~ II~-i«ht~ • Sf~,ueh r ~ z?. rrftir - - ~4. 1'31 t.~fH$ s ~:Y~~~:1 i1 - ~ z T ~er~l ~ t ~r .~~,~lrut~ D«~-ny~-il(e~ = : r~' ~ llei~hkti~ ~ ~~,~llc ~'atle~~` ~t~~s~rn~4lunt ii~-~stic~ - f tlYi fly _ Y fd~?_f~'Y1r 1~~1'1111Et+~Illtl" ; MAXFIELD RESEARCH INC. 8 I DAKOTA COUNTY COMMERCIAL/INDUSTRIAL MARKET STUDY fir Icu:~~r~ ~ ~ ~;t,1'.~r,t ;°~r~?~~~~1.~ t-BGi~;f~ts 'gin€at t • _ rt'3;t ~.:I:;.Ifl~ - - ltuf-i~~ti'i~~i~ l~rtx-C;r~~~~~~ T ~.z( i~l~hl trc~~ I~uix~t, I~ii~*ht~ I r_t~ ~<:J7 _ ~tt,l ~~f, ~t ~ ~ ~r~~:~~r.JJ ~n~le l~:a~1~~~ ~t~~s~~~n,tusxt' _ 13a~tin~ti _ _ 11i.i,+?t;tl ~'.11'[17~11',,~,~t~ll~' MAXFIELD RESEARCH INC. 82 em No. City of Lakeville y Community and Economic Development Memorandum To: Economic Development Commission From: Adam Kienberger, Economic Development Specialist Copy: Steve. Mielke, City Administrator David L. Olson, Community and Economic Development Director Date: June 20, 2008 Subject: Business Retention Visits As a part of the 2008-2010 Strategic Plan for Economic Development one of the goals under the strategic work area Partnerships includes Exp/ore. opportunities to build relationships. Business retention visits often play an integral part of staying informed of the, local business climate. In-.the past, informal business retention visits have occurred as a part of other economic development related functions, some of which are outlined below. Staff is proposing to formalize a business retention visit process for a couple of reasons: to coordinate efforts with other ongoing economic development initiatives, and to establish a consistency in how visits are conducted. Staff is recommending for future business retention visits, either an EDC or City Council member accompany staff on visits as a display of support for the business community. Although the Spotlight on Business program has shown to be well received in the past, a majority of the larger businesses in Lakeville have already been Spotlighted. Retention visits could be an alternative to the Spotlight program throughout the year and would target both large and small businesses in Lakeville. Business Retention & Expansion Program Activities Summary of whats currently being done internal/y.• 1. Spotlight on Business Program -features businesses at City Council meetings 2. Focus on Business -Out and About cable channel 16 program -highlights new/unique business in Lakeville 3. Manufacturers Luncheon -funded by Dakota Electric, lunch hosted during MN Manufacturing Week every E3ct©ber 4. Chamber of Commerce monthly meeting/outside events -maintains relationships with business community 5. Lakeville Business News -published several times per year to provide business community with updates on City and other business activity Whats done regionally: 1. DEED's Business Services Specialist, Jodi Pepinski visits area businesses throughout the year. 2. The Lakeville Area Chamber of Commerce as part of the Grow Minnesota program currently conducts local business retention visits. What other Cities are doing: 1. Blaine -passive retention program a. Reviewed U of M's BR&E Strategies Program b. Will do business visits on a case-by-case basis if problems are brought forward. No regularly scheduled visits. c. Did more business. visits several years ago when stepping up code enforcement practices to establish positive relationships with local businesses. d. 6-8 times per year business newsletter 2. Woodbury -passive retention program a. Annual business survey i. Alternate large/small businesses surveyed each year 1. Very low response rates 2. Will meet with businesses as requested based on survey responses b. Chamber of Commerce participation - similar to Lakeville 3. Hastings - no retention efforts a. Currently forming. an EDA Staff is recommending implementing a business retention visit program and will periodically be asking EDC members to volunteer to accompany staff on business visits. V{11I~V• City of Lakeville ' ~ Community and Economic Development Memorandum To: Economic Development Commission From: David L. Olson,. Community .and Economic Development Director ` "Copy: Steve Mielke, City Administrator Adam Kienberger, Economic Development Specialist Date: June 17, 2008 Subject: June Director's Report The following is the Director's Report for June of 2008. Building Permit Reuort The City issued building permits through the end of May with a total valuation of $28,527,503. This compares to a total of $67,348,995 during the same period in 2007. Included in this valuation were commercial and industrial permits with a total valuation of $6,205,900. This compares to a total valuation of $20,026,600 during the same period in 2007. The City issued permits for 56 single family homes through May with a total valuation of $15,106,000. This compares to 102 single family home permits during the same period in 2007 with a total valuation of $27,249,000. The City issued permits for 13 townhome and condo units through May which compares to 62 townhome and condo permits issued during the same period in 2007. First Park Lakeville The City Council at their June 16t" meeting approved the preliminary and final plat -for the first phase of First Park Lakeville which is the industrial development by First Industrial located at the southeast corner of Dodd Blvd. and Co. Rd. 70. Grading work and demolition of the farmstead buildings is expected within the next week. The building that was approved by the Council on the 16t" was a 282,000 spec office warehouse building. First Industrial plans to come with a second one lot plat for a build-to-suit 285,000 SF office/distribution center for Uponor later this summer.. Eureka Township. Anne~cation The City Council held a public hearing on June 16t" regarding the proposed annexation of 97 acres of land in Eureka Township on the east side of Cedar Avenue.. Representatives of Airlake Development Inc, (dba Hat Trick Investments LLC) and a representative of the Township indicated that they had reached agreement on the issue of the developer agreeing to provide reimbursement for future planning that the Township will be doing around the area being annexed. The City and Township are still attempting to reach agreement on the issue of property tax reimbursement. The City hasoffered $3,000 and the Township is seeking $7,200. Staff will be bringing an ordinance back to the City Council at the July 7"' meeting. It is hoped an agreement on the property tax reimbursement issue will be reached by that time. Foreclosure Update Attached is the monthly update on foreclosures in Dakota County provided by the Dakota County CDA. There have been 120 Sheriff Sales as a result of foreclosures in Lakeville through May of this year. This compares to 199 for all of 2007. This City is in the process of formalizing its policies in dealing with these properties. The City is having to send a contract lawn service company to mow a much larger number of properties where the .grass is no longer being mowed as a result of foreclosure. New Commercial Developments Two new buildings were approved for the Crossroads development at the June 16~' Council meeting. HJ Development will be constructing a new KinderCare day care center and a 2.,000 square foot retail building in this next phase of the Crossroads development which is called Crossroads East. The City Council also approved a liquor license at their June 16t" meeting for the Buffalo Wild Wings that will be locating in a new building to be constructed in TimberCrest. The City Council -also approved a sign variance at their June 16t" for the Comfort Inn to have up to a 50 foot sign. While the owner was seeking a 60 foot sign, the Council was comfortable granting a variance for up to 50 feet on the basis that some other cotercial uses are allowed signs of this height along the I-35 corridor. EDC Member Recognition Please join me in congratulating EDC member Jim Emond Sr. who will be the Grand Marshal at this year's Pan-O-frog parade. O y 3 O N T O o0 0o M N O O N 0 0 0 0 0 0 0 0 0 0 0 0 O 0 0 O O O O O W O ~n ~n ~D O oo l~ O O cry 0 0 0 0 0 0 0 0 0 0 0 0 0o O~ 0 0 0 0 0o 0 0 0 0 O~ ~ O N O d' ~ ~O N O O I~ 0 0 0 0 0 0. 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Page 1 of 1 Minneapolis I St. Paul Business Journal -May 1, 2008 http(1#win_cities.bizjou_ rnals.comltwincities/stories/2008f04J2$Idai~39. ht__I >yC[~R€dPQElS ST_ P~itlL ~1 ~ ~~i ThurscEay, May 1, 2{?08 Report: Twin Cities.. ranks 5th in corporate expansion Minneapolis 1St. ~'aul Business Journal - by Katharine Grayson_ Staff Writer Site Selection magazine has ranked the Twin Cities 5th among metro areas nationwide when it comes to the building and expansion of corporate facilities, the Minnesota Department of Employment and Economic Development said Thursday. In total, 74 corporate expansion or building projects occurred in the Twin Cities last year. Of those, 15 were in Eagan. The magazine examined expansions that have a "significant impact," discounting government, retail, school and hospital projects. Projects had to cost at least $i million, create at least 50 jobs and add 20,000 square feet of space to be eligible. Chicago ranked first, with 236 projects completed last year. In 2006, the Twin Cities ranked 15th on the list. kgrayson@bizjournals.com ~ (612) 288-2106 All contents of this site ©American City Business Journals Inc. All rights reserved. http://twincities.bizjournals.com/twincities/stories/2008/04/28/daily39.html?t=printable 06/03/2008 Economic Development Association of Minnesota Page 1 of 8 ~ x: ~ r JuN€-JULY IsstDE News from DEED .edam.org Minnesota Deveiopment Conference Back to front page of ``Minnesota Momentum - priving Competitive The F)eveloper Development" September 24 - 25, 2008: Northland Inn, Brooklyn Park, MN Minnesota Development Conference This year, the 13th Annual Minnesota Development Conference theme is "Minnesota Momentum -Driving Competitive Minnesota's "Culture of Development." We acknowledge and incorporate aspects of Innovation" Pavilion on Display Minnesota's Sesquicentennial Celebration (150 years of statehood). at 8102008 Throughout the Development Conference, topics will touch on aspects of Minnesota's history and how we arrived where we are Minnesota`s Wind Industry today. In developing a deeper understanding of our past and Sponsors Going to Texas present, we are effectively setting the stage for developing a strong Economic and Workforce strategy for competing in a global economy in the future. Development Review of the 2008 Legislative Session The Development Conference will consist of keynote speakers, breakout sessions, roundtables, and informal networking opportunities. Peer-led breakout sessions and roundtables will cover a wide variety of topics of interest to EDAM members. Sponsors and members of this year's planning committee include the Economic Development Association of Minnesota (EDAM), Governor's Workforce bevelopment Council (GWDC), Minnesota Department of Education, Minnesota Department of Employment & Economic Development (DEED), Minnesota State Colleges & Universities (MnSCU), Minnesota Workforce Council Association, and the University of Minnesota. Information on the Development Conference can be found at www.PositiveiyMinnesota.com, Hot Topics: Development Conference icon. The Conference site will be updated continuously. If you have questions regarding the Development Conference, please contact Jennifer Pettit, Special Events Coordinator, DEED, at 651-259-7298 or email: Jennifer.PettitC?state.mn.us. back to tag Minnesota's "Culture of Innovation" Pavilion on http://edam.orgldisplaycommon.cfin?an=1 &subarticlenbY=334 06/03/2008 Economic Development Association of Minnesota Page 2 of 8 13isptay at BIt72U08 Minnesota's economic development community continues to build a strong presence at the Biotechnology Industry Organization's annual conference and exhibition. BIO, the world's largest biotechnology organization, will host 6102008, Monday, June 16 through Friday, June 20, in S.Dego, CA. The diverse successes within the biotechnology industry are reflected in BIO2008's theme, "healing, fueling, and feeding the world." Minnesota's "Culture of Innovation" pavilion incorporates this theme by presenting Minnesota's "green" pavilion which includes a greeter station, sector-specific "ring of innovation" bio-stations, a presentation area with seating, and a timeline of Minnesota innovations. Minnesota's pavilion has received much support through sponsorships from businesses, service providers, economic development organizations, communities, and utilities. "Minnesota continues to get a lot of support from Partners who feel strongly about the Bioscience industry," said Kevin McKinnon, Business Development Director, DEED. Besides the Minnesota pavilion sponsors, Minnesota is also recognizing emerging bioscience companies. These companies will receive "scholarships" to help offset the cost of exhibiting. Minnesota's pavilion sponsors and emerging bioscience companies will reach more than 22,000 conference attendees from 68 countries. In addition to the Minnesota pavilion, Minnesota's sponsors and companies will also participate in an exhibit show floor reception, Minnesota delegation luncheon, and a hospitality reception co- hosted with Manitoba, Canada, and Southern Australia. Minnesota's "Culture of Innovation" pavilion sponsors are: ¦ Aldevron ¦ AllOut Marketing ¦ Brooklyn Park, City of ¦ BioBusiness Alliance of Minnesota ¦ Chaska (Includes-City of Chaska,Biotech Center, and.. Hennepin Technical College) ¦ Elk Run (Includes Quality Systems and Tower Investments) ¦ GreaterFargo/Moorhead Economic Development Corporation ¦ Greater Mankato Growth http;//edam.org/displaycommon.cfin?an=1 &subarticlenbr=334 06/03/2008 Economic Development Association of Minnesota. Page 3 of 8 ¦ Hammel, Green & Abrahamson (HGA) ¦ Hormellnstitute ¦ Integra ¦ LifeScience Alley ¦ Mayo Clinic ¦ Minnesota Department of Agriculture ¦ Minnesota Partnership for Biotechnology & Medical Genomics ¦ Minnesota State Colleges and Universities (MnSCU) ¦ MinnWest Technology Campus ¦ Positively Minnesota ¦ Rochester Area Economic Development, Inc. ¦ Schwegman, Lundberg & Woessner, P.A. (SLW) ¦ St. Cloud Area Economic Development Partnership (Includes Sun Plastics, DCI, St. Cloud State University, and SiCM) ¦ University of Minnesota ¦ Upsher-Smith ¦ Worthington Regional Economic Development Corporation ¦ Xcef Energy Emerging companies within the Minnesota "Culture of Innovation" pavilion are: ¦ Ativa ¦ Biothera ¦ CVRx ¦ ISurTec ¦ Nanocopoeia ¦ Silicon Informatics If you have further questions or comments regarding B1O2008, please contact Jennifer Pettit, Special Events Coordinator, DEED, at 651-259-7298 or email: Jennifer.Pettit(7o state.mn.us. Event information is also available at www._P_.ositv_el~Minnesota.co, Hot Topics: BIO2008 icon. back to tap Minnesota's 9Nind inda~stry Sponsors Going to Texas For the first time, Minnesota is exhibiting at WindPower, the annual conference and exhibition of the American Wind Energy Association. Positively Minnesota and an impressive group sponsors will reach over 7,000 business professionals from all over the world at http://edam.org/displaycommon.efm?an=1 &subarticienbr--334 06/03/2008 Economic Development Association of Minnesota Page 4 of 8 WindPower 2008, June 1 - 4, in Houston, TX. Minnesota hopes to attract businesses such as major turbine manufacturers, suppliers, providers of business services to the wind industry, and influence policy decision-makers of the wind industry. Sponsors of the Pasitiveiy Minnesota exhibit booth are:. Albert Lea Economic Development Authority Alliant Energy Apex City of Minneapolis City of New Ulm Development Corporation of Austin Great River Energy Minnesota Department of Commerce Moorhead Economic Development Authority Rochester Area Economic Development Inc. Seaway Port Authority Worthington. Economic Development Corporation Xcel Energy Minnesota's involvement in WindPower 2008 sets the stage for an even bigger and better Minnesota promotion when we host WindPower 2009 in June, 2009. For more information on WindPower and the American Wind Energy Association, contact Dentley Haugesag, Wind Energy Specialist, DEED, at 651-259-7438 or email: C3entle_yHau_„)c esag_ sta..te.mn.us. _b_a...c...k..a®.. i:pP Ect~nc~r~ic and VNarlsforce ®eveloprr~ent Review srf the 20t1'~ Leislatiue Session Minnesota's 85th Legislative Session met February 12 through May 18, 2008, and resulted in the signing of 169 bills by Governor Tim Pawlenty. Many of the bills influence economic and workforce development programs. DEED's capital investment appropriation was higher than ever before, appropriating $23.75 million dedicated to specific economic development projects to the Department of Employment & Economic Development (DEED), with $15.61 million available through competitive grants http://edam.org/displaycommon.cfin?an=1 &subarticlenbr=334 06/03/2008 Economic Development Association of Minnesota Page 5 of 8 Greater Minnesota Business Qevelopment Public Infrastructure Grant The Greater Minnesota Business Development Public Infrastructure grant received an appropriation of $7 million. Cities outside the 7- county metro area may apply for a grant to pay up to 50% of the capital costs of public infrastructure improvements that support economic development and job growth. Cities may receive up to $1 million every two years. Of the $7 million, $1.75 million is available to Minnesota school districts, municipalities, and counties for biomass energy products to reduce our reliance on electricity, oil, and natural gas. Bioscience Business Development Public Infrastructure Grant The Bioscience Business Development Public Infrastructure grant program was awarded $9 million, of which $4.5 million is available for grant applications. An additional $3.5 million was allocated to the bioscience subzone adjacent to the university and $1 million was awarded to an ag-based bioscience training and technology facility in Worthington. The Bioscience Business Development Public Infrastructure grants will award cities up to 50% of the capital costs of public infrastructure improvements that support bioscience business development projects. A total of $4.5 million is available. Redevelopment Grants DEED's Redevelopment Grant Program received an appropriation of $7.75 million with $1.89 allocated for Ah-Gwah-Ching site in Walker. The remaining $5.86 million is available to development authorities for redeveloping blighted industrial, residential, or commercial sites. Up to 50 percent of the costs for redevelopment may be applied to land that is publicly-owned and planned for use by the public. Announcements to apply for DEED grants will made this summer with applications due in the fall. Watch the DEED website www.positivelyminnesota.com for grant application announcements. Messages will also be sent through EDAM's Messaging Board Other capital investment projects and legislation affecting DEED include: http://edam.org/displaycommon.cfin?an=1 &subarticlenbr=334 06/03/2008 Economic Development Association of Minnesota Page 6 of 8 Public Facilities Authority The Public Facilities Authority (PFA), housed within DEED and chaired by DEED Commissioner Dan McElroy, received a total appropriation of $49.8 million. ¦ Clean Water Revolving Fund: $24 million ¦ Drinking Water Revolving Fund: $6 million ¦ Wastewater Infrastructure Funding Program: $15.3 million (Funding will go to projects on the 2008 priority list.) ¦ Total Maximum Daily Load Grant Program: $2 million ¦ Small Community Wastewater Treatment Program: $1.5 million ¦ Funding for Upper Sioux, Bayport, and streamlining: $1 million Miscellaneous economic development projects ¦ .Bemidji Regional Event Center: $20 million ¦ Crookston Ice Arena: $10 million ¦ Duluth DECC Arena: $38 million ¦ Itasca County Steel Plant Infrastructure: $28 million ¦ Rochester Mayo Civic Center: $3.5 million ¦ Roseville Guidant John Rose Memorial Minnesota Oval: $600,000 ¦ St. Cloud Civic Viand Convention Center: $2 million ¦ St. Cloud National Hockey Center: $6.5 million ¦ St. Paul Gillette Children's Hospital: $300,000 Job Opportunity Building Zones (JOBZ) program The Job Opportunity Building Zones (JOBZ) program came under scrutiny during the 2008 Legislative Session but ultimately survived. DEED accepted many of the Legislative Auditor's recommendations in order to strengthen the program, The only recommendation DEED did not agree with was putting an annual cap on new JOBZ participants. The JOBZ program will continue through its original program duration of 12/31/2015. DEED will provide greater program oversight including requiring businesses to attest to the accuracy of their business subsidy reports. The State Auditors' Office will use unemployment and tax data to validate JOBZ employment. If a http://edam.org/displaycommon.cfin?an=1 &subarticlenbr=334 06/03/2008 Economic Development Association of Minnesota Page 7 of 8 business substantially, but not fully, reaches its goals, it may be awarded a shorter duration of benefits rather than being removed from the program. Local governments are prohibited from amending the agreement on their own. This year modifications were made to the reporting requirements for the Business Subsidy Report which includes the JOBZ program. Business Subsidies The long-form subsidy reporting exemption and the public hearing requirement-was increased to $150,000. Any financial assistance below $150,000 will still be subject to local. criteria and must be reported to DEED using the new short form.. Minnesota Investment Fund (MIF) program The Minnesota investment Fund received an appropriation of $4.8 million which is available through June, 2009. An additional $1 million is earmarked for biomass heating grants and loans. Border Cities Program/Seed Capital Investment Credit Qualified businesses in border cities, Moorhead, .Dilworth, East Grand Forks, Breckenridge, and Ortonville, are allowed a credit of 45% of the amount invested, up to $112,500 per year. The total amount of credit allowed is limited to allocations that the Border City has available for tax reductions in its border city enterprise zone. To qualify, a business must have its principal office or a significant operation in a border city, have a majority of Minnesota residents as its employees, and have. growth plans that rely on innovation, research, or the development of new products. Businesses must apply to the commissioner of DEED for certification. Transit Improvement Area Loan program The Transit Improvement Area Loan program was created to maximize land use in transit areas and encourage safe pedestrian traffic-around transit stops. This loan program requires loans to be made and repaid. This legislation was highly sought after by Metro Cities. Office of Science and Technology The Office of Science and Technology was established within DEED http://edam.org/displaycommon.cfin?an=1 &subarticlenbr=334. 06/03/2008 Economic Development Association of Minnesota Page 8 of 8 that will help. small businesses and entrepreneurs access federal grant programs for technology development. For more information on the 2008 Legislative Session, visit wwwaeg,state.mn.us and watch for DEED's Legislative Summary Report available soon on the DEED website, www.PositivelyMin_nes. ota.com. back fio.. to.p. http://edam.org/displaycommon.cfin?an=1 &subarticlenbr=334 06/03/2008 H t~'t ~~4 E Dakota Count ~ ~ ~ Y `Community'Development Agency C-6'~,u~'~iJ~~ _ E~ , Mf M 0 June f 2, 2048 TO: Dakota County Cities From: Dan Rogness, Director of Community Revitalization Re: Foreclosure Update The Minnesota Home Ownership Center and the CDA partnered to host a free workshop for at-risk homeowners on Thursday, June 5. Homeowners were able to ask questions and get advice from mortgage lending and foreclosure prevention specialists. The CDA's homeownership counselors were at the open house as we(I. Despite the night's severe weather, 72 people participated in the workshop, representing 56 households. The top two reasons that people listed for concern about their house payments were: cannot afford mortgage payment and job loss/loss of income. Governor Tim Pawlenty vetoed the Minnesota Subprime Borrow Relief Act of 2008. The act would have given borrowers with subprime loans the right to defer foreclosure sale of their residence for one year after the bill became law. Recently, the CDA has been making additional efforts to market the Mortgage Foreclosure Prevention Program to let homeowners- that are in or nearing foreclosure know that resources are available to them. From January I, 2008 to June I, 2008, the CDA counseled 351 new clients for the Mortgage Foreclosure Prevention Program. Within the next month, the CDA plans to send out a survey to Dakota County cities to help assess the .impact of foreclosures on city operations and budgets. While the CDA's primary efforts in the area of foreclosures have related to homeowner counseling, we are also interested in evaluating the effects of foreclosed properties on cities. Many of you have already provided us with some of that information. However, we would like to get a better idea about existing and expected effects so that we can share that information with you and evaluate further potential assistance from the CDA to cities. Dakota County Stats -May 2008 • # of Sheriff Sales in May - 206 (compared to 140 in May 2007) • Total Sheriff Sales for 2008 - 930 (compared to 579 Jan.-May, 2007) • # of Notice of Pendency's Filed in May - 190 • Total Notice of Pendency's Filed for 2008 - 1,070 Dakota County... C~? ~ti ~ ~ f~ t t, Community Development Agency A Notice of Pendency is filed by a mortgage company's attorney as official notification that the foreclosure process has begun. Not all of these result in sheriff sales. Pages 3 and 4 of this PDF file have statistics for each city of Sheriff Sales and Notices of Pendency. Mapping Using Dakota County GIS http://gi s.co.dakota.m n.us/websiite/dakotanetgis/ The Dakota County Office of GIS is updating the 2008 Foreclosures and Notice of Pendency layers on ~ monthly basis. If you need assistance using this Web page, please call Randy Knippel or Mary Hagerman with the Office of GIS at (952) 89 I -708 I . In The News Provided in this PDF file are a few notable foreclosure articles that were published in the last month. Among the points of interest: • A feature story about how foreclosures have been affecting children. 17-year-old Amber Vickerman shares her reaction to losing the family house. The story also includes information on the Foreclosure Prevention Act of 2008. • Habitat for Humanity has been providing viable solutions to the housing crisis. The organization has been buying foreclosed homes -some for as little as half price -and either renovating the property or tearing down the house to make way for new dwellings. • Columbia Heights City Council unanimously approved an emergency six-month halt on rental licenses, applicable to new landlords. In part, the city is concerned that foreclosed homes will be purchased by investors looking to rent them or people who don't have experience as landlords. • Although Minneapolis has the highest number of foreclosures in Hennepin County, it ranks sixth in terms of foreclosure rate -the percentage of households that are in foreclosure. The smaller cities of Greenfield and Brooklyn Park are tied for first place in foreclosure rate in Hennepin County. Each city has a foreclosure rate at 2.3 percent of households foreclosed in 2007. If you have any other concerns, please call me at (651) 675-4464 or send me an email at drogness _dakotacdastate.mn.us. tea. .~_=t~' - p C ~ O N ~o O~ O~ ~ d' ~ ~ ~ N ~ y N N N N N N O~ 00 N~ uy Yf - ,e,,,, I ~ ti;, ~ ~ M C0 O O~ N ~ O O - ~p ~O - p O _ ~ N ~ u1 ~./1 N - ~ 00 ~A ~ N u 0 Z N ~ ~ V U O ~ N C ~ !Z. u ~ C _ O U v~- ta0 .Z N ~p Q d C y) v _ O _ E u H 0 L N = O i H ~ ~ Q O ~ Ri ~ ~ U ~ ~ o. s ~ _ ~ a N ~ ~ N N N ~O ^ u'1 N c ~ ~ ~ ~ 3 c ~ 0 Q N N N N~ O N M O~ N i11 ~O 1~ y ' n v E > U • ~ O Q • ~ ^ N N - o~ ~n N M N ~ op ~ L ~ • N O • ~ ~ C • L ynn~no.o~-o-~~n~n,,,i ~ ~ Q- • ~ IJ. 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C s ~ L a O y L a~ ~ 3 " ~ z ~ d0 Oy~jV J o C Ca. ~ ~ > ~ H Z Qm W LL= =J~~tn°~N Q Z y Nation's mortgage crisis is taking a toll on the kids, too Page 1 of 2 ~tarTt'ibun~~~~~ryfTi~tN~~F'~::~Ls-:1T.1~r~~.~I~,l`~`I *~~~~~T'. Nation's mortgage crisis is taking a toll on the kids, too By JEAN HOPFENSPERGER, Star Tribune May 12, 2008 High school senior Amber Vickerman has never eaten lunch with a member of Congress. But on Monday, she sat next to Rep. Betty McCollum, D-Minn., and told her that losing your home is really tough on a kid. The teen said she'll pack up her bedroom and 17 years' worth of memories in a few months when her family loses its home to foreclosure. Her parents owned their east St. Paul home for 20 years, but refinanced their mortgage a couple of years ago when they needed to buy a car to transport a family member with cancer. When the new mortgage's interest rate, her parents could not keep up with the payments. "I'm hoping Congress passes something so that banks have to work with people and help them," said Vickerman, a Johnson Senior High student who wrote her senior thesis on the impact of the nation's mortgage crisis on east St. Paul "I lived in this area all my life and want to stay here." A bill passed by the U.S. House last week, called the Foreclosure Prevention Act of 2008, would help an estimated 500,000 mortgage holders trade their at-risk loans for more affordable mortgages backed by the federal government. Vickerman's parents would have been prime candidates for such a program. McCollum was in St. Paul Monday to learn more about how that bill might affect the area she represents. She and ahalf-dozen community leaders joined a van tour of boarded up houses on the city's East Side. Featuring everything from quaint historic homes to modest ramblers to dilapidated shacks, the tour was a lesson in the domino effect of mortgage foreclosures. Amber Vickerman and her father, Eldon, got a close look at some of these foreclosed homes this winter, when they drove around documenting foreclosures and taking pictures for her thesis. In the back of her mind, Amber Vickerman was thinking about what she would keep and what she'd leave behind when time comes to pack. "I have a few things I know I have to bring, like my teddy bear, Olive, and my blue blanket from- when I was a kid," said Vickerman. "Having to leave your home can really change a person. You have to stay strong for your family, but getting everything out of your house and going to school is hard." http://vvvvvsf.startribune:com/templateslPrint This Story?sid=18880984 5/14/2008 Nation's mortgage crisis is taking a toll on the kids, too Page 2 of 2 The people touring the .East Side on Monday didn't have Vickerman's personal connection to the problem, but were still deeply concerned over the volume of homes affected more than 800 in east St. Paul alone.. "This is Sims jAvenue]: Look at the number of homes on the list," St. Paul Planning Commissioner Rich Kramer told the group as he clutched a sheet of paper showing 12 foreclosures on the 600 block alone. McCollum, St. Paul City Council Member Dan Bostrom and ahalf-dozen other community leaders stepped out of the van to check out the street where half of the homes display foreclosure papers taped to the front doors. The street was like a ghost town. Rather than having homeowners walk away from such homes, the House foreclosure bill would have the Federal Housing Administration insure mortgages for eligible homeowners provided their banks forgive a portion of the debt and let homeowners stay in their homes. Critics have called the bill a bailout for. irresponsible homeowners. But the bill has some bipartisan support, said McCollum, and the Senate is considering similar legislation. .Eldon Vickerman, who said .his attempts to work out a payment plan with his bank went nowhere, liked the concept. (Their mortgage interest rate, initially 8 percent, jumped to 12 percent at the refinancing.) Said Vickerman: "I don't feel like anyone is watching out for people like me." Jean Hopfensperger • 651-298-1553 ©2008 Star Tribune. All rights reserved. http://www.startribune.comftemplates/Print This_Story?sid=18880984 5/14/2008 Foreclosure crisis gives Habitat for Humanity chance to buy cheap properties Page 1 of 2 StarTribun+e =liOttl 1'~~i11~1T1ExF'~~Ll' - ~T. F'~~~L, I I ; ~~~_rT Foreclosure crisis gives Habitat fbr Humanity chance to buy cheap properties By STEVE KARNOWSKI ,Associated Press May 19, 2008 MINNEAPOLIS -The foreclosure crisis that has forced thousands of families from their homes has given something good to the nation's best-known housing charity: Cheap properties for sale in communities around the country. Some Habitat for Humanity chapters have seized buying opportunities in neighborhoods. affected by the mortgage meltdown, snapping up scores of empty lots and unoccupied homes -some for as little as half price. "The down real estate market is a wonderful opportunity for all Habitats," said Gage Yager, executive director of Trinity Habitat for Humanity in Fort Worth, Texas. "As prices drop, we have the opportunity to acquire at prices that just weren't>available a few years ago In the Minneapolis area and elsewhere, the charity that offers affordable housing to low- income families is buying foreclosed homes and using volunteers to renovate them. If that's not practical, the houses are torn down to make way for new dwellings. In some cities, Habitat is even buying parts of subdivisions that developers couldn't afford to finish. Habitat officials don't see themselves as capitalizing on the misfortune of others. They say putting families into affordable Habitat homes is much better than allowing properties to remain vacant or letting slumlords grab them. "We're stepping up to the plate to provide some viable solutions to the housing crisis," said Sharon Rolenc, a spokeswoman for Twin Cities Habitat for Humanity. She said vacant homes can drive up crime and reduce the value of neighboring property. Roger Schwierjohn, president and CEO of the Habitat chapter in Phoenix, said the local real estate market has long attracted outside investors who bid up land and home prices without adding any value. "If they fall by the wayside, so be it," he said. "What we try to do is provide value and access to home ownership to families that would otherwise not be able to afford it." An official with Americus, Ga.-based Habitat for Humanity International said the extent to which local affiliates take advantage of foreclosures depends on how much money they have. http://www.startribune.com/templates/Pry This_Story?sid=19066954 5/20/2008 Foreclosure crisis gives Habitat for Humanity chance to buy cheap properties Page 2 of 2 In Fort Worth, for instance, the local chapter is negotiating to buy part of a 160-lot subdivision that a developer left unfinished. Yager said the plan is to purchase 50 of the remaining 100 vacant lots and put single-family homes on them. Yager declined to say how much he expects to save because his group is still negotiating. But he said the Fort Worth market for such lots has dropped around 30 percent to 40 percent since the height of the real estate boom. In nearby Dallas, another Habitat affiliate has picked up about 150 lots at a roughly 50 percent discount as developers dump inexpensive lots in the city's southern neighborhoods to focus on more profitable areas to the north. The Habitat affiliate in Phoenix had struggled in recent years to find affordable land. But it is closing in on a deal to complete a 20-home development abandoned by a company that went bankrupt. Habitat expects to buy 14 unfinished lots for around half price. In Milwaukee, the city is buying condo units in one large complex -many of them in foreclosure -and then selling them to Habitat for about $5,000. Habitat volunteers renovate them, and the group sells them to clients for $25,000. Legislation working its way through Congress might help Habitat and nonprofit housing agencies take even greater advantage of bargains. One bill would send $15 billion to the hardest-hit states for the purchase and improvement of foreclosed property. States could then make those properties available to nonprofits such as Habitat. However, the Bush administration has threatened a veto. Habitat's work makes a difference in the lives of people like Yenenes Tezgera and her family, who will move into a new home in St. Paul soon after putting in an estimated 400 hours of work on Habitat projects in the area. She and her husband have a 17-month-old boy and another child on the way. Tezgera is an Ethiopian immigrant who works as a health care assistant. Her husband, a newer arrival who's still learning English, is a stay-at-home father. She said they couldn't afford a home without Habitat. "This is a big deal for us," Tezgera said. "This is our dream come true in America." On the Net: Habitat for Humanity Internationa4: httQ//www.habitat.org © 2008 Star Tribune. All rights reserved. http://www.startribune.com/templates/Print This_Story?sid=19066954 5/20/2008 Facing foreclosure? Don't count on becoming a landlord Page 1 of 2 ~t~rTl~ibun€~~c~~~t raIII~1NE~F'~LIS-~~T.F'~+~tL.I'4fI v v~a~~?T.rr~ Facing foreclosure? Don't count on becoming a landlord By LORA PABST, Star Tribune May 15, 200 As more and more foreclosed. single-family homes are becoming rental properties, cities are scrambling to deaf with all the new "for rent" signs. But one city, Columbia Heights, has simply said, enough. -For the next six months, new landlords won't be able to rent their properties because the city has stopped handing out rental licenses. "It may sound a little rash, but by the same token, we have plenty of rentals already," Mayor Gary Peterson said. The City Council decided to act quickly. Columbia Heights has seen a 25 percent increase in rental license applications in the past three years. In the mix are almost 300 foreclosures in the past 15 months and 5 percent of the city's duplexes and single-family homes currently in foreclosure. Council members this week unanimously approved. an emergency six-month halt on rental licenses, which will apply to any new landlord. Anyone who has had a rental license in the past-two years will still be able to renew or reapply for a license. Community Development Director Scott Clark said the city decided to pursue an emergency action rather-than wait the 60 to 70 days it normally takes #or a council action to go through the approval process. "We're not saying rental property is a bad Thing," Clark said. "But we're having some concern about single-family homes being turned into rental." Now the city staff will begin the task of collecting and organizing crime data, rental rates, home values, foreclosures and code enforcement actions in almost every neighborhood. The city will use the data, in part, to find out where foreclosed homes are being sold under value and dragging down neighboring property values, Clark said. "If there are neighborhoods with stress, then maybe we need to focus more time, energy and resources on those neighborhoods," Clark said. http://www.startribune.com/templates/Print_This_Story?sid=18997794 5/19/2008 Facing foreclosure? Don't count on becoming a landlord Page 2 of 2 Looking for solutions At the end of the city's six-month hold on rental licenses, officials will consider. introducing new programs for neighborhoods that are dealing. with high numbers of rental properties and foreclosures. The programs could include first-time home buyer assistance, rehabilitation money for homeowners and kits for first-time landlords, Peterson and Clark said. "What we're trying to do is preserve the integrity of our neighborhoods," Clark said. The city is already preparing for an increase this summer in maintenance. needs, such as lawn care, at foreclosed houses. "We're going to have our hands full maintaining properties that are vacant now," Peterson said. "Rather than just exacerbate. a problem, we thought we'd hold back and look at the whole problem." As part of a 10-year plan to aid homeowners in maintaining older properties, the city has started several programs that provide financial assistance for rehabilitation and remodeling projects. Last fall, the city also enacted stricter property maintenance .regulations for residential and commercial properties. City officials are currently looking at a point-of-sale inspection program. Peterson said the city is concerned that foreclosed homes will be purchased by investors looking to rent them or individuals who don't have experience as landlords. "We've .been working very hard and we don't want to take a giant leap backward," he said. "It's self-preservation." Lora Pabst • 612-673-4628 ©2008 Star Tribune. All. rights reserved. http://www.startribune.com/templates/Print This_Story?sid=18997794 5/19/2008 Small cities rate high in foreclosures Page 1 of 2 ~t~IrTi~ibune~cvm I~IIr~1T1Er'1F''!:~LYS - T. F'.t~i'L, Iy'f ,.-'~1~:~,r~Tai. Small cities rate high in foreclosures By STEVE BRANDY, Star Tribune May 7, 2008 Everybody knows that Minneapolis is the foreclosure capital of Hennepin County, right? In absolute numbers, that's true. But not if you measure the foreclosure rate the percentage of households in foreclosure. By that yardstick, three lightly populated communities along the Crow River in western Hennepin County are in the top tier for foreclosures. They're Greenfield and the Hennepin County portions of Rockford and Hanover. They join Brooklyn Center and Brooklyn Park for the county's top five cities in foreclosure rate. In fact, Greenfield and Brooklyn Park are tied for tops at 2.3 percent of households foreclosed in 2007. "You're. kidding!" Greenfield Mayor Jill Krout said when she got the news from a reporter on Wednesday. Her exurb had 20 foreclosures last year. Minneapolis? It rates only sixth, at 1.8 percent, despite 2,895 foreclosures. Those surprises in a recent round of data crunching from Hennepin County have to be taken with several grains of salt. First, the portions of Hanover and Rockford -lying on the Hennepin side of the Crow River are tiny, with fewer than 200 households apiece. So Hanover's three foreclosures and Rockford's four can push up their rate in a hurry. Greenfield is bigger; its situation is driven partly by one troubled townhouse development, said County Assessor Tom May. Second, the county used the number of households in a city in 2006 to measure foreclosure rates, in order to stay consistent with statewide calculations. But there's another way if the goal is to measure homeowner pain, according to Metropolitan Council .forecaster and demographer Todd Graham. That's the homestead unit count. Such a measure would exclude investors who borrowed to finance rental operations, or in some cases for fraudulent reasons. Some who have seen the county's data assert that north Minneapolis would rank at the top of the foreclosure-rate list if it were its own municipality. But a lesser rate of foreclosures elsewhere in the city diluted its overall standing. Jeff Strand, the county's lead person on foreclosure. response, .said he's not surprised by data showing North Side foreclosure issues spreading northwest into Brooklyn Center and Brooklyn Park, with 250 and 612 foreclosures respectively. http://www.startribune.com/templates/Print This_Story?sid=18751079 5/19/2008 Small cities rate high in foreclosures Page 2 of 2 Robert Schreier, Brooklyn Park's community development director, said a variety of factors contribute to his suburb's high rank. The northern portion of the suburb was in a building boom that coincided with the use of riskier subprime mortgages that were a road to foreclosure for some borrowers. "Our $500-$600,000 homes are in foreclosure as well. That's the stuff north of [Hwy.] 610," he said. There also were pockets of mortgage fraud in the boom area; he's submitted one builder's name#Q he FBI. .Some of the suburb's older,. more affordable housing was involved as well. Schreier said some in the area's Liberian community may have been taken advantage of by brokers. Steve Brandt • 612-673-4438 ©.2008 Star Tribune. All rights reserved. http://www.startribune.com/templates/Print This_Story?sid=18751079 5/19/2008 Downtown projects in Apple Valley,. Burnsville, Lakeville adapt to maintain. growth Planners take economy into account to maintain growth By Maricella Miranda mmiranda(a~pi oneerpress. com Article Last Updated: 05/29/2008 12:08:57 AM CDT While the economy is causing road bumps for some suburban downtowns in the south metro, others are adapting to the market and attracting businesses. In Apple Valley, .Central Village's housing and commercial plans have been scaled hack. But city leaders say the project hasn't completely lost momentum because developers continue to submit plans. Miles away, other suburban city centers are attracting new businesses. In Burnsville, plans are in the works to add a restaurant and a parking deck to the Heart of the City, a nearly complete downtown mixed-use development. Both amenities would neighbor a $20 million performing arts center set to open in the .fall. .And in Lakeville, a historic downtown has welcomed 10 new companies since early 2007, said Dave Olson, community and economic development director in the city. "No city can, all by itself, cause or make (a downtown project) happen," he said. "All you can do is make an environment where private businesses and investors want to come." Guided Changes / Lakeville completed a concept two years ago for its downtown redevelopment. Unlike most suburban downtowns, the concept didn't push for a complete makeover. Instead, it aimed to guide any changes to the downtown strip within the next 30 years. "A lot of things have happened on their own - without a lot of city development," Olson said. New additions along downtown's Holyoke Avenue include a building that houses Holly's Centre Stage Dance and Kazolly's Sweet Shop. Both. opened in the space in late 2007. Down the road, a coffee shop expanded in April into a wine and beer bar, the Mainstreet After Hours bar. Last year, the downtown also added a hockey development center. "There's momentum," Olson said. "Obviously, downtown is currently being viewed as a desirable place to relocate a business, and that's a good thing." But the addition of businesses can mean the demise of others. The 100-year-old downtown grocery store Enggren's went out ofbusiness two years-ago. An independently owned jewelry store, an insurance company and a vacuum repair shop also left the same shopping mall, Olson said. "Every city and every downtown goes through cycles," he said. "Certainly, the city can't take credit for everything going on down there." Business In The Heart Of Burnsville / In Burnsville, city leaders are helping spark attention to a downtown project. Mayor Elizabeth Kautz met with Jamal Arrsari, owner of the Mediterranean Cruise Cafe, about a month ago to discuss moving his business to the developing city center. The restaurant is being forced from its current location, a shopping center in Eagan, to make way for a commercial and residential "gateway district" to the city. The cafe has been a staple of Eagan's culinary scene since the late 1970s. Plans are for the restaurant to relocate to a little more than ahalf--acre along Nicohet Avenue, north of Burnsville Parkway and south of Minnesota 13, said city planner Chris Slania. The city intends to review a purchase agreement for the land next month, Slania said. If plans remain on schedule, the business could open by spring 2009. Burnsville leaders also. approved a contract last week to build a parking deck that would serve downtown businesses and the performing arts center. The company selected will build the deck for $2.5 million - $1.4 million less than the city expected to pay. Fast Planning, Slow Building /Apple Valley city leaders say plans are continuing - even though building has slowed -for anold-fashioned downtown years in the making. The 60-acre Central Village was to be apedestrian-friendly downtown with houses, shops and other businesses. Plans for the city center, which is about 20 percent complete, began four :years ago, said Bruce Nordquist, the city's community development director. Initial thoughts were 1,500 homes would be built by now, Nordquist said. But so far, only l00 town homes are complete. .City leaders this month also approved plans to scale back the Village at Founder's Circle project from 197 apartments -intended to turn into condominiums - to 129 units. The project's commercial space also decreased from b0,000 square feet to 40,000 square feet. Workers should break ground on the site. in August. A project calling for 200 housing units and 2,500 square feet of commercial space also is changing shape. Instead of constructing only mixed-use buildings, plans are for a mix of free-standing homes, commercial and mixed-use structures, Nordquist said. It's a trend more downtown buildings are following, he said. "The marketplace and economics has required use to be a little bit more flexible in providing the commercial and housing together," Nordquist. said. It's encouraging that developers are making plans for downtown Apple Valley, Nordquist said. "Even at a time of an economic downturn, we're seeing this planning activity," he said. "We think ±hat's positive." Maricella Miranda can be reached at b51-228-5421.