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04-27-10
City of Lakeville Economic Development Commission Regular Meeting Agenda Tuesday, April 27, 2010, 4:30 p.m. City Hall, 20195 Holyoke Avenue Lakeville, MN Call meeting to order 2. Approve March 23, 2010 meeting minutes 3. Presentation of City Financial Tools for Business Assistance by Mikaela Huot of Springsted Inc. 4. Review of and Discussion of Draft of Business Assistance Policy 5. Director's Report 6. Adjourn Note: Members are encouraged to attend the Malt -O -Meal open house at 20802 Kensington Blvd. (the former Hearth Technologies that goes until 6:30 p.m. on Tuesday after the meeting. Attachments: March 2010 Building Permit Report March 2010 Foreclosure Report from the Dakota County CDA "Manufacturers hopeful in state ", Finance and Commerce, April 14, 2010 "Minnesota jobs bill a "tool in the toolbox ", Finance and Commerce, March 31, 2010 "Paper company rolls out reinvention ", StarTribune.com, April 5, 2010 "Area workers average $23.37 an hour ", StarTribune.com, April 2, 2010 Item No. �. City of Lakeville Economic Development Commission Meeting Minutes March 23, 2010 Marion Conference Room, City Hall Members Present: Comms. Tushie, Vlasak, Schubert, Emond, Brantly, Starfield, Erickson, Ex- officio member Mayor Holly Dahl, Ex- officio Chamber of Commerce Executive Director Todd Bornhauser. Members Absent: Comms. Matasosky, Smith. Others Present: David Olson, Community & Kienberger, Economic Development Specialist. 1. Call Meeting to Order Vice Chair Tushie called the meeting to on Room of City Hall, 20195 Holyoke_Avenue, 2. Approve February 23, 2010 Motion 10.04 imou 201 is Director; Adam p.m. in the Marion Conference Minnesota. ng as the minutes of the Motion carried 3. Continued Discussion o nce Policy 4sa;teferencec�_i'e EDC memo =end reviewed the EDC's work on this topic tie` past se�taral months. Mr. Olson noted that staff has been in conversation several surivnding immunities about this issue and discussed several gies for addressg busies assistance policies. Ex- officio member Born auser asked if the City should hire somebody to do a study on areas of the City thaf:may be candidates for potential business assistance. Mr. Olson reslJi d*d`that there may be some grant money out there for this type of planning study. Vice Chair Tushie noted that some conceptual work has already been completed in specific areas of the community by land owners. He added that one option would be to have the City do road extensions to promote development in strategic areas such as Eagan did. Economic Development Commission Meeting Minutes March 23, 2010 Mr. Olson continued by discussing an international business prospect that visited Lakeville but ended up locating in Wisconsin. The business received a substantial assistance package that Lakeville wouldn't have even been close to competing with. Comm. Starfield asked if the prospect also considered other cities near Lakeville. Mr. Olson responded that that is unknown because it was a confidential search. Vice Chair Tushie asked if there was money available to do a business assistance policy study. This seems to be an important issue for the EDC. Mr. Olson responded that Community Development- Block. Gra may be an option. Steve Mielke stated that based on the past -discussions the EDC issue here is how he sees this issue taking form: - A local "but for" test is needed - There must be a demonstrated Return n Investment (ROI) - Focus would be on: o To remove blight and =encourage redevelopment o To accomplish City,joals.ewg,. ■ Transportation infrastructufe ■ Utility infrastructure ■ Specific businesses,.of industries . o To encourage job growthlrefention ■ ' Focus on - higher -end jobs Establisli and identify tools in a "toolbox" o TIF o<, Land cost = reduction o Fee red o Develbpr o Assessn o State & F Mr. Mielk( is difficult. ent eral tools advantages (CDBG) dollars had on this ntifying tools is easy but the decision on when to use them Mr. Olson stated that staff would compile a document outlining these ideas and bring it to the EDC at their next meeting. Vice Chair Tushie noted that in order for the EDC to package this for the City Council the EDC would need to first review the Council's long -term goals. Mr. Mielke agreed that Council goals would have to be established so that there would be a consensus on when to use these tools if they meet the goals. FA Economic Development Commission Meeting Minutes March 23, 2010 Mr. Mielke added that this should start with the EDC and could warrant a joint EDC /City Council meeting to discuss long -term goals. Mr. Olson noted that this is a part of the Strategic Plan for Economic Development the EDC works on every three years. They are scheduled to begin work on the 2011 -2013 Plan this summer. Motion 10.05 Comms. Emond /Brantly moved to direct staff to prepare a policy document outlining these business assistance policy ideas for discussion at the next EDC meeting. Motion carried unanimously. Comm. Starfield clarified that he would like to discuss some of the economic development tools that are available at the next meeting. A description of the tools and the risk associated with each would be helpful for the discussion. Mr. Mielke added that while the State discuss what we can do locally. Vice Chair Tushie mentioned housir tool. Mr. Olson concluded business assistance. -ti next EDC meeting 4. Review and` Development VI Mr. Olson reviei including: Transgori ;: bite -cycle n( -,:Technology Come Partn nt al blished, the-EDC should are one example of a local staff will prepare a list of of each for discussion at the Strategic Plan for Economic memo and highlighted each section of the work plan Comm. Erickson asked how the new transit facilities were doing. Mr. Olson responded that the 1 -35 station meeting and exceeding expectations and that an extra route has been added to accommodate demand. The Cedar avenue station currently has five buses that go to Downtown Minneapolis but isn't as desirable as the 1 -35 station because it has a stop at the Apple Valley Transit Station. revenue 3 Economic Development Commission Meeting Minutes March 23, 2010 5. Director's Report Mr. Olson reviewed the Director's Report. 6. Adjourn Vice Chair Tushie adjourned the meeting at 5:30 p.m. Al iI item No. 3 City of Lakeville ' Community and Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community & Economic Development Director Copy: Steven Mielke, City Administrator Adam Kienberger, Economic Development Specialist Date: April 27, 2010 Subject: Presentation on City Tools to Provide Financial Assistance to Businesses It was requested that information be presented to the EDC on the specific business assistance financing tools that are available to cities. Staff has invited Mikaela Huot of Springsted Inc., the City's financial advisor, to make a presentation on the most commonly used financing tools available to cities in Minnesota. Ms Huot is an Assistant Vice President at Springsted and specializes in assisting client cities on issues associated with the financing of economic development and redevelopment projects. Ms. Huot will provide an overview of the primary financing tools available to cities and will also answer specific questions EDC members may have. Hand -outs from Ms. Huot's presentation will be distributed at the meeting. iCem No. City of Lakeville Community and Economic Development Memorandum To: Economic Development Commission ^ From: David L. Olson, Community & Economic Development Director j 4 Copy: Steven Mielke, City Administrator Adam Kienberger, Economic Development Specialist Date: April 27, 2010 Subject: Review of Draft Business Assistance Policy It was the consensus at the March EDC meeting to bring forward a draft Business Assistance Policy to be discussed at the April meeting and that this policy would incorporate the policy issues that were discussed at the March meeting. Staff has prepared the attached draft policy that attempts to incorporate these issues. Also attached is a copy of the City's current Business Assistance Policy that was approved by the City Council in 2003. One of the provisions that is contained in the draft policy is the minimum wage goal. All policies are required to have minimum wage goals under MN Statutes. The current policy contains the current federal minimum wage as the wage goal contained in the policy. For discussion purposes, staff has included the current minimum wage goal used by the State of Minnesota for the seven county metropolitan area. This is an issue that should be discussed further by the EDC. Most cities also draft more detailed policies for the specific business assistance financial tools used by cities to provide additional guidance for both potential applicants and City staff. While the City has recently adopted a policy for the use of private activity bonds such as industrial development bonds or housing revenue bonds, we do not have specific policies for the use of business financing tools such as tax increment financing (TIF) or tax abatement. Preparation of these more specific policies would be completed after the EDC and City Council have approved the general Business Assistance Policy. Action Requested: Comments, questions or suggested changes to this draft policy are requested. Once the EDC has reached consensus on a draft policy, the policy will be brought to the City Council for their review and discussion. April, 2010 DRAFT CITY OF LAKEVILLE BUSINESS SUBSIDY POLICY This Policy is adopted for purposes of the Business Subsidies Act (the "Act's, Minnesota Statues, Sections 1163.993 through 1163.995. Terms used in this Policy are intended to have the same meanings as if used in the Act, and this Policy shall apply only with respect to "subsidies" as defined by the Act if and to the extend required thereby. The City of Lakeville and the Lakeville Economic Development Commission maintain several policy documents which speak to the general goals and objectives for the provision of public assistance for private development or redevelopment activities. These documents include, but are not limited to the current Strategic Plan for Economic Development and the Private Activity Bond Issuance Policy. The City of Lakeville has determined that in order for any project to be considered for financial assistance, a finding is needed that determines that, ''but for" the City's assistance, this project will not occur or will not occur within a reasonable amount of time. The City will also need to demonstrate a return on its investment based on one or more of the public benefit categories listed in this Policy. Because projects vary greatly in structure and public benefit derived, each project will be considered on its own merits. Consideration will be given to projects providing public benefits in one or more of the following categories: 1. The creation of new jobs /increase in total payroll. In the case of new job creation, new jobs must pay an average wage equal to the minimum wage level for business assistance programs administered by the Minnesota Department of Employment and Economic Development for cities located in the seven county metropolitan area (currently $13.00 per hour). Preference will be given to higher paying jobs that also provide benefits such as health care coverage. 2. Projects that provide value in the forms of needed transportation and other utility infrastructure improvements in the community that would be completed in conjunction with the project. 3. Redevelopment projects that result in the stabilization of business districts or neighborhoods by elimination of blighting conditions. 4. Projects that enhance or increase the economic diversity of the community by attracting businesses or industries not currently located in the City. New job wage requirements will apply to any new jobs created. 5. Quality of Life based on business /projects. Those business /entities that provide a desirable good or service and address an unmet demand in the community will be considered. New job wage requirements will apply to any new jobs created. 6. Retention of existing jobs. To be considered under this category, it must be demonstrated — to the satisfaction of the City - that the loss of jobs is specific and can be demonstrated. 7. If a particular project does not involve the creation of jobs, but is nonetheless found to meet another public purpose of the City it may be considered without any specific job wage goals, as permitted by Minnesota Statutes. This public purpose has to be something other than an increase to the City's tax base. Other measurable, specific and tangible goals must be established. Examples of tangible goals may include redevelopment or clean -up of a contaminated site or increased tourism. Each project shall not only be evaluated against the Business Subsidy Policy but also against other applicable City of Lakeville or Economic Development Commission policies, including the Comprehensive Guide Plan, current Strategic Plan for Economic Development and Private Activity Bond Issuance Policy. The level of assistance to be provided for any project is at the discretion of City of Lakeville. Because it is not possible to anticipate every type of project which may in its context and time present desirable community building or preservation goals and objectives, the governing body must retain the right in its discretion to approve projects and subsidies which may vary from the principles and criteria of this Policy. The burden will be on the applicant to demonstrate, to the satisfaction of the City of Lakeville, that the public benefit justifies the requested subsidy. In all cases of business subsidy, where the subsidy is equal to or greater than the threshold prescribed in Minnesota Statutes, a subsidy agreement will be entered into between the City and the recipient. This agreement will delineate the subsidy structure and amount, as well as the expected public benefit. The agreement will include provisions for repayment and other resolution options if the expected public benefit is not achieved. All business subsidies will be subject to the criteria outlined in Minnesota Statutes, Section 1163.933 through Section 1163.955 except those subsidies as exempted by same. ice! ✓'✓e dl CITY OF LAKEVILLE LAKEVILLE ECONOMIC DEVELOPMENT COMMISSION BUSINESS SUBSIDY POLICY This Policy is adopted for purposes of the Business Subsidies Act (the "Act "), Minnesota Statues, Sections 116J.993 through 116J.995. Terms used in this Policy are intended to have the same meanings as if used in the Act, and this Policy shall apply only with respect to "subsidies" as defined by the Act if and to the extend required thereby. The City of Lakeville and the Lakeville Economic Development Commission maintain several policy documents which speak to the general goals and objectives for the provision of public assistance for private development or redevelopment activities. These documents include, but are not limited to the current Strategic Plan for Economic Development and the Tax Increment Financing Policy. While it is recognized that the creation of good paying jobs is a desirable goal, which benefits the community, it must also be recognized that not all projects assisted with subsidies derive their public purposes and importance solely by virtue of job creation. Worthwhile projects may provide value to the community in the forms of infrastructure improvements, stabilization of business districts or neighborhoods, or enhancement of economic diversity. In addition, the imposition of high job creation requirements and high wage levels may be unrealistic and counter - productive in the face of larger economic forces and the financial and competitive circumstances of an individual business. With respect to subsidies, the determination of the number of jobs to be created and the wage levels thereof shall be guided by the following principles and criteria: • Each project shall be evaluated on a case -by -case basis, recognizing its importance and benefit to the community from all perspectives, including created or retained employment positions and other policy objectives of the City of Lakeville. ■ In cases where the objective is the retention of existing jobs, the recipient of the subsidy shall be required to provide reasonably demonstrable evidence that the loss of those jobs is imminent. The setting of wage and job goals must be sensitive to prevailing wage rates, local economic conditions and/or external economic forces over which neither the grantor nor the recipient of the subsidy has control, the individual financial resources of the recipient and the competitive environment in which the recipient's business exists. The wage floor for wages to be paid for the jobs created shall be the established federal minimum wage. The City of Lakeville will seek to create jobs with higher wages as appropriate for the overall public purpose of this policy_ ■ If a particular project does not involve the creation of jobs, but is nonetheless found to be worthy of support and subsidy, it may be approved without any specific job wage goals, as may be permitted by applicable law. ■ Each project shall not only be evaluated against the Business Subsidy Policy but also against other applicable City or Economic Development Commission policies, including the Comprehensive Guide Plan, current Strategic Plan for Economic Development and the Tax Increment Financing Policy. ■ Because it is not possible to anticipate every type of project which may in its context and time present desirable community building or preservation goals and objectives, the governing body must retain the right in its discretion to approve projects and subsidies which may vary from the principles and criteria of this Policy. icem No. � 0 ; 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: April 27, 2010 Subject: April Director's Report The following is the Director's Report for April of 2010. Building Permit Report The City issued building permits with a total valuation of $13,678,371 through the end of March. This compares to a total valuation of $16,740,776 during the same period last year. The City total valuation of commercial and industrial permits through March was $693,000 which compares to $728,560 during March of last year. The City also issued permits for 22 single family homes in March with a total valuation of $6,028,000. This compares to permits for five single family homes with a total valuation of $1,282,000 during March of last year. It should be noted the City has issued permits for 42 single family homes through the end of March compared to 15 during the same period last year. Development Updates The City has issued a permit to Sawa Japanese Steakhouse and Sushi for the last space in the multi- tenant building in TimberCrest that is also the location for Buffalo Wild Wings. We have not been informed as to when they are planning to open. Foreclosure Update Attached is the monthly foreclosure summary for Dakota County as provided by the Dakota County CDA. There were a total of 25 Sheriff Sales in Lakeville in March. Foreclosure rates are up considerably for the first quarter of 2010. The total number of Sheriff's Sales county -wide in March was 181 compared to 84 during March of last year. The total number of Sheriff Sales county -wide for the first quarter of 2010 was 545 compared to 397 during the first quarter of last year. City Inspection staff are currently monitoring 84 vacant and /or damaged homes in Lakeville. 2010 Census Update As of Friday, April 23, 2010 Minnesota had the second highest response rate in the country with 78% (WI is at 80 %). Lakeville is tied for the 13"' highest response rate in the country of cities with over 50,000 with an 83% response rate (Woodbury is the highest MN city with 84 %). State of the City Event The State of the City event was held on Wednesday April 21 at the Lakeville Holiday Inn and Suites. Approximately 108 people attended this year's event including a number of EDC members and heard Mayor Dahl and City Administrator Steve Mielke each make part of the presentation. Copies of the PowerPoint presentation for the 2010 State of the City presentation is available on the City's website. c 5 PO 0 0 0 c o- 0 &' I� d d O c o 0 0 C fl- to to B n w w. a y o s `�° � <o c 9 3 _a a y a m k k �,� O io '� CD n. -1, . cc ^ =� '3 co �' k f ? 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CD y O. � o tA y A � W N O �l - w w � O w O O O N� ■< J t!i N •- J W C C� O O O O to O to O to O Cn 00 O O O �O \O 00 O O O O O O O O O O ul N O r+ o � z w ' r ' 00 00 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 0 0 0 0 0 0 0 0 0 0 z � � r eD N � C f!1 O O O C O O O O C C O C 66666 O O 0 0 0 O O O O O O O O O O O O O t O O P O O O O II � ►+ O O O C O O O O O O O O O O O O O O D cn 0 0 0 0 2J O O O C cn C i O O O O O 0 0 0 O O O O O O O O O Cl7 .d O C r+ .. \.° O � C A > w CA .. on o 00 0 a 000 0 00 0 0 0000 y O O O O O O O O O O O O O O C C O O Q nn 0 0 000 o OOO O oO o 00000 z I b w z i W 0 0 0 0 0 0 0 0 0 0 0 0 66666 Q o 0 0 0 0 0 0 0 0 o O O O O o 0 0 0 S � o HOME Dakota County OWNERSHIP _ Community Development Agency co Ki CDA*****G9**GG****9***00* To: Dakota County Cities From: Dan Rogness, Director of Community Revitalization Date: April 14, 2010 Re: Foreclosure Update Rosemount Foreclosure Counseling Event CDA staff hosted another foreclosure event on Thursday, April 8 from 3:30 — 6:30 p.m. at the Robert Trail Library in Rosemount. More than 20 households from cities throughout Dakota County attended the free Walk -in Foreclosure Counseling for Homeowners, making the Rosemount foreclosure event the second highest attended since the CDA began hosting the events in 2008. Homeownership Specialists met one -on -one with homeowners to answer questions and give advice. The event also provided information on what happens during the foreclosure process, homeowners' rights, and solutions for long -term housing needs. CDA staff plan to hold more foreclosure counseling events in the future. For more information, please call the foreclosure intake line at 651- 675 -4555. Updates to Making Home Affordable On March 26, 2010 the Obama Administration announced changes to the Home Affordable Modification Program (HAMP) that are designed to help struggling homeowners who have been affected by the economic crisis. The changes will include temporary mortgage assistance to some unemployed borrowers; encouraging mortgage servicers to write -down principal as part of the modifications; and allowing more borrowers to qualify for a modification through HAMP. Adjustments are also being made to Federal Housing Administration (FHA) programs to help more underwater borrowers who are current on their mortgage loans. The changes will allow more opportunities for qualifying mortgages to be restructured and refinanced into FHA loans. All of the program changes will require certain qualifications for eligibility, and are not designed to help every homeowner or stop every foreclosure. The full scope of the program enhancements is not expected to be implemented until fall of 2010. Additional information is included in some of the news articles for this month, or visit www.makinghomeaffordable.gov dgh,'H CDA Dakota County O W N E RS H I P Community Development Agency co it/ 0969609*000*0000000040 Dakota County Stats — March 2010 • # of Sheriff Sales in March — 181 (compared to 84 in March 2009) • Total Sheriff Sales for 2010 — 545 (compared to 397 in Jan.- March, 2009) • # of Notices of Pendency Filed in March — 395 • Total Notices of Pendency Filed for 2010 — 942 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 Sheriff Sale and Notice of Pendency statistics for each city. Mapping Using Dakota County GIS http://gis.co.dakota.mn.us/website/dakotanetgis / The Dakota County Office of GIS is updating the 2010 Foreclosures and Notice of Pendency layers on a monthly basis. If you need assistance using this Web page, please call Randy Knippel or Mary Hagerman with the Office of GIS at (952) 891 - 7081. 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: • Foreclosed homes have become havens for drug - related crimes. The article focuses on some cases that have happened in Dakota County, and the tell -tale signs that people can look for. • A new program announced by the Obama Administration will encourage hundreds of thousands of delinquent borrowers who have not been helped by loan modification programs to sell their homes via short sale. The administration seeks to streamline and standardize the short sale process to make it easier on the borrower and lender. • Many homeowners have seen their credit score decrease dramatically after entering the Home Affordable Modification Program trial payment period. • An article that contains more details about the new plan to help some homeowners by allowing them to refinance into loans backed by FHA. If you have any other concerns, please call me at (6S 1) 67S -4464 or send me an e- mail at drogness (&dakotacda.state.mn.us G � Uj""•*l„ N Sw s 4 0 V 04 O No N O N 0% N 00 N M %0 N 1� N al • M O Ln M Ln Q • %2 pp • C C C • • N' L O o! O I� 00 0U: 3 N N0 M 00 n Ln N rn r*. 1 N N N � � N' O �O i LL 'u d 04 O No N O N 0% N 00 N M %0 N 1� N M M O Ln M Ln ^ %2 pp N' o! O I� 00 00 V N N0 M 00 n Ln N Xn V r*. 1 N N N � � N' 'u d D' 0 Z! 41 u 0. 4J O N' d0 3 a. _ 1 L' a a N N M m .o N N N W^ M N �o N— 'Q• c 4 M Co . 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C � � C �V 7 O o `° O (D c � Q � L A N � N c C A .- E u C �0 i C_ O O A u O �Z w o L � A h A U d N i O o o u Z c O h O Z E h N L{J .� Oa Z �U u u N a O u a► c C O U C. N No d r- Ln �O 0 E u 2 O N L- C! D A U� m $ O ., cd 7 O A c O a+ A vi E > c d O E L- 0 LL- http:// www. startribune .com/local/south/86734952.html Page 1 of 3 Some foreclosed homes become haven for crime Authorities report a handful of cases where empty houses are used for drug deliveries or pot growing. the metro in foreclosed homes. Cmdr. John Grant of the Dakota County Sheriffs Office said the foreclosures that have mushroomed in the past few years have hurt people and neighborhoods in various ways, including criminals in houses that long stand vacant. By JOY POWELL, Star Tribune Last update: March 6, 2010 - 10:46 PM In Burnsville last spring, a contractor was sent to a foreclosed house by the bank that held the mortgage. When he got there, he found signs that someone had been living in what was supposed to be a vacant house, so he called police. They found a pot - growing operation. "I would like to see neighbors take it upon themselves to report criminal activity," Grant said. "If you know of a house in your neighborhood that is vacant and/or foreclosed, and you see suspicious activity -- strange vehicles, strange people, maybe lights on in the residence, a screen that might be off, or a broken window -- contact law enforcement. And not long before that, airport police contacted the Dakota County Drug Task Force after learning that a package headed for a vacant South St. Paul house contained pounds of marijuana. Narcotics officers set up a sting and nabbed a man who had broken into the house earlier that morning as he waited for the delivery. Officers arrested him after he accepted the UPS package and walked away. Those are among scattered cases of narcotic activity that police say are turning up across Authorities note that since the foreclosure crisis began in earnest in late 2006, there have been plenty of targets for such criminals. There were, for example, 2,082 foreclosed homes sold at Dakota County sheriffs sales in the past year alone. "We're seeing a lot with parcel packages," Grant said of narcotics investigations involving vacant homes across the metro. "UPS will receive a package of dope, and the address on there will be a foreclosed property because that's what our suspects Print Powered By D na nics' http://www.startribune.com/templates/fdcp?1268071913226 3/8/2010 http://www.startiibune.com/local/south/86734952.html StarTribune.com Page 2 of 3 are looking for. So they'll have a package delivered to a foreclosed home, and they'll just sit there and wait for it." Grant said methamphetamine smugglers will get the address of a foreclosed home and call their cohorts in Texas, for example, and give them the address, often using an alias name as the recipient. "They'll just track that package through the Internet and say 'OK, that package should be here at 123 Main Street Thursday morning at 9 o'clock, and we'll go out there and wait for it, "' Grant said. Sometimes they break in, and sometimes they wait outdoors, he said. . Here and nationwide, authorities are seeing another scenario involving foreclosed homes: Criminals will buy a house for a pot - growing farm and sometimes let it go into foreclosure, said Sgt. Jason Polinksi of the Dakota County Drug Task Force. The pot farmers can make much more selling three or four crops a year than the house is worth, he said. "I'm sure it happens more often than we know," said Sgt. Joe Leko of the drug task force. "Those are hard to stumble across Leko said there have been cases in Apple Valley and beyond where homes have been bought for use as indoor marijuana farms, but nobody lives there. The pot farmers try to fool the neighbors. Those homes typically have drapes and blinds that are always closed, and perhaps lights that come on at specific times, thanks to a timer, Leko said. Those houses, he added, resemble what homes look like when somebody's on vacation. Still, there are telltale signs. Because of the heat and humidity used to grow marijuana, pot farms often have moisture on the windows. Another indicator, Leko said, is that in the winter, pot farm homes have no snow on the roofs. Officers say the high humidity and heat foster rampant mold growth. Along with the mold and the chemicals used to grow the marijuana, and the spores the plants produce, there's growing health concerns not only for police who bust those operations, but for consumers who might buy the houses later from the banks. because you rely on the neighbors and citizens to report something suspicious." Joy Powell • 952- 882 -9017 Print Powered By FormaTD namics" http://www.startiibune.com/templates/fdcp?1268071913226 3/8/2010 http : / /www.startribune.comlpolitics /national/ 86774752 .html ?elr =KArksLckD8EQDUoaE... Page 1 of 2 Staff Obama tries new tack in foreclosure crisis A program will pay defaulting homeowners "relocation" aid and allow them to sell for less than what they owe on a property. By DAVID STREITFELD, N ew York Times Last update: March 7, 2010 - 9:28 PM In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave. This latest program, which will allow owners to sell for less than they owe and will give t hem a little cash to speed them on their way, is one of the administration's most aggressive attempts to grapple with a problem that has defied solutions. More than 5 million households are behind on their mortgages and risk foreclosure. The government's $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done. For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy's tentative recovery -- the last thing it wants in an election year. Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed. "We want to streamline and standardize the short sale process to make it much easier on the borrower and much easier on the lender," said Seth Wheeler, a Treasury senior adviser. The problem is highlighted by a routine case in Phoenix. Chris Paul, a real estate agent, has a house he is trying to sell on behalf of its owner, who owes $150,000. Paul has an offer for $48,000, but the bank holding the mortgage says it wants at least $90,000. The Print Powered By FFormatp namics" http://www.startribune.com/templates/fdcp?1268164213430 3/9/2010 http : / /www.startribune.comlpolitics /national/ 86774752 .html ?eli= KArksLckD8EQDUoaE... Page 2 of 2 PT,M_f"_1 thrWIT11ej I I I frustrated owner is contemplating foreclosure. To bring the various parties to the table -- the homeowner, the lender that services the loan, the investor that owns the loan -- the government intends to spread its cash around. Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in "relocation assistance." Should the incentives prove successful, the short sales program could have multiple benefits. For the investment pools that own many home loans, there is the prospect of getting more money with a sale than with a foreclosure. For the borrowers, there is the likelihood of suffering less damage to credit ratings. For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks. If short sales are about to have their moment, it has been a long time coming. At the beginning of the foreclosure crisis, lenders shunned short sales. They were not equipped to deal with the labor - intensive process and were suspicious of it. Last year, short sales started to increase, although they remain relatively uncommon. Fannie Mae said preforeclosure deals on loans in its portfolio more than tripled in 2009, to 36,968. But real estate agents say many lenders still seem to disapprove of short sales. Under the new program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it. Paul was skeptical. "In a perfect world, this would work," he said. "But because estimates of value are inherently subjective, it won't. The banks don't want to sell at a discount." Print Powered By rd FormaTP namics http : / /www.startribune.com /templates /fdcp? 1268164213430 3/9/2010 Homeowners who get aid see credit scores dive - Personal finance Page 1 of 3 Homeowners who get aid see credit scores dive Many homeowners angry that program carries hefty penalty By ALAN ZIBEL The Associated Press updated 10:40 a.m. CT,Fd., March. 19, 2010 WASHINGTON - Some homeowners who sign up for the government's mortgage assistance program are g etting a nasty surprise: lower credit scores. For borrowers who are making their payments on time but are on the verge of default, the Obama administration's loan modification program can reduce their credit score as much as 100 points. That makes it harder to get a loan and can present a problem when applying for a new job. "Making Home Affordable" program, borrowers enter a trial period in which they make at least three payments. But some are finding out that their credit score takes a dive during this trial phase. It happens once their mortgage company notifies the three big credit bureaus — Experian, Equifax and TransUnion. The first sign of trouble For delinquent borrowers, the damage was done when they fell behind on their loans. But for homeowners who are having financial troubles but managing to pay their bills, a request for a loan modification is the first sign of difficulty. And that means a sharp drop in the borrower's credit score. Housing counselors say it's unfair, especially because the news often comes as a surprise to homeowners. "Why should people's credit be hurt even worse when they're trying to do the right thing ?" said Eileen Anderson, senior vice president at Community Development Corp. of Long Island, a housing counseling group in New York. And many homeowners are angry that a program designed to help carries such a penalty, said Kathy Conley, a housing counselor with GreenPath Inc., a nonprofit group in Farmington Hills, Mich. "It's a feeling of being duped," she said. Still, the impact is far less severe than a foreclosure, where borrowers typically find their credit is in tatters for years. That's due to the cumulative impact of many months of missed payments and the foreclosure itself, which drags down a homeowner's' credit by 150 points or more on a scale of 300 to 850. To enroll in the Obama administration's $75 billion The credit rating industry defends the practice. People who sign up for loan modifications would not be asking for help unless they were having severe money troubles, said Norm Magnuson, spokesman for the Consumer Data Industry Association, a trade group in Washington that represents the credit bureaus. Print Powered By 1- I F©rmaTD namics" htty: / /www.msnbc.msn.com/id/ 35949027 /ns/ business - personal finance /print/l /disnlavmod... 3/19/2010 Homeowners who get aid see credit scores dive - Personal finance Page 2 of 3 "The consumer is going into the program because they're in a financial bind," he said. "Other lenders would need to be aware of that." The Obama administration acknowledges that enrolling in the program can hurt credit scores. But Meg Reilly, a Treasury Department spokeswoman, said that foreclosure "brings far more serious financial consequences for borrowers and their families." The credit score issue is an unexpected consequence of the program that has been plagued with problems a nd disappointing results since its launch last year. Only about 170,000 homeowners had completed the process as of February. Hundreds of thousands more are still in limbo. Loan denied Jim Owens, 46, of Harrisburg, Ore., was accepted on a trial basis for the Obama plan last year. He and his family were in bad financial shape. They were barely able to pay the mortgage and utility bills The main reason: After being laid off and unemployed for six months, he took a job as maintenance director at a retirement home. But it paid only around $25,000 year, about $10,000 less than his former job in a city public works department. He and his wife were also struggling with debt, after taking out a second mortgage four years ago to pay off debt and medical bills. Late last year, he was searching for a used sport- utility vehicle. He got a 30 -day approval for $2,000 car loan. But that time ran out before he found a car, so he had to reapply for the loan. He was shocked to learn that, after signing up for the Obama plan, he was denied. "I should have been told," that this might happen, Owens said. "Without credit, you can't do a whole lot in life." A Citi spokesman, Mark Rodgers, said the company follows the Treasury Department's guidelines for reporting to credit bureaus. "We do not determine credit scores," said Rodgers, who declined to comment on Owens' case. The impact is worse for borrowers who enroll in the Obama program and are then ruled ineligible. If homeowners do manage to get accepted into the Obama program and have their loans permanently modified, lenders update the credit bureaus. The new status neither hurts nor helps the borrower's credit score. Over time, they can see their score increase. "The best way to build credit back is to continue to pay bills as agreed, to use credit wisely," said Tom.. Quinn, vice president of scoring solutions at Fair Issac Corp., which designed the well -known FICO score system. "As time goes on, the score gradually increases." Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. URL: http: / /www.msnbc.msn. htto: / /www.msnbc.msn.com/id /35949027 /ns/business- nersonal finance /nrint/l /disnlavmod... 3/19/2010 U.S. unveils plan to shrink some home loans - Real estate Page 1 of 2 U.S. unveils plan to shrink some home loans New effort would also help jobless keep paying their mortgages By Alan Zibel, Christopher S. Rugaber to 12 million foreclosures over the course of the next three years," said Diana Farrell, a White House The Associated Press economic adviser. updated 10:23 a.m. CT,Fri., March. 26, 2010 WASHINGTON - After months of criticism that it hasn't done enough to prevent foreclosures, the Obama administration announced on Friday a plan to reduce the amount some troubled borrowers owe on their home loans. ' The multifaceted effort will allow people who owe more on their mortgages than their properties are worth to get new loans backed by the Federal Housing Administration, a government agency that insures home loans against default. That would be funded by $14 billion from the administration's existing $75 billion foreclosure - prevention program. It could spark criticism that the government is shouldering too much risk by taking on bad loans made during the housing boom. The plan would also enable the borrowers' existing mortgage companies to receive incentives to lower their principal balances. Meet original target Instead, officials said, the goal is to make it more likely the administration will meet its original target, announced last year, of assisting 3 million to 4 million struggling homeowners. That would be "enough to provide help to those for whom help is worthwhile and to provide some kind of stability in the market." The plan won't assist investors and speculators or "Americans living in million dollar homes or defaulters on vacation homes," an administration fact sheet said. Some homeowners will not be able to afford to stay in their homes because they bought more than they could afford, officials said. To be eligible for the FHA refinancing program, borrowers who owe more than the value of their homes, known as being "underwater," must not have fallen behind on their existing mortgage payments. Separately, the program also would reduce monthly payments for unemployed homeowners for up to six months. The administration cautioned that the plan isn't intended to stop all foreclosures or assist all troubled homeowners. "There's no intention here of tackling what may be 10 Print Powered 8y rd I Formatb namics'" h":// www. msnbc. msn.com/id/36050868 /nsibusiness -real estate /nrint/l /disnlavmode /1098/ 3/26/2010 U.S. unveils plan to shrink some home loans - Real estate Page 2 of 2 Mark Zandi, chief economist at Moody's Analytics, estimated the plan could help an additional 1 million and 1.5 million homeowners avoid foreclosure. That compares with about 4.5 million already in foreclosure proceedings or 90 days delinquent on their mortgages, he said. But preventing even a fraction of potential foreclosures could help stem the slide in home prices. That would encourage those who are under water to keep paying their mortgages as prices stabilize. "The changes are wide- ranging and significant and have the real potential for bringing the foreclosure crisis to a much quicker end," Zandi said. It is the latest effort by the Obama administration to tackle the foreclosure crisis which has continued to grow. Home foreclosures have soared despite the administration's effort to prevent foreclosures, a complex and problem - plagued endeavor involving more than 100 mortgage companies. Only 170,000 homeowners have completed that process out of 1.1 million who began it over the past year. Dubious "We remain dubious about government mortgage modification efforts," wrote Jaret Seiberg, an analyst with Concept Capital's Washington Research Group. "So far none have lived up to expectations and we see little reason to believe the latest effort will turn out any different." The plan announced Friday will also require the mortgage companies participating in the administration's existing foreclosure prevention program to consider slashing the amount borrowers owe. They will get incentive payments if they do so. It also includes three to six months of temporary aid for borrowers who have lost their jobs. And there will be additional payments designed to give banks an incentive to reduce payments or eliminate second mortgages such as home equity loans — a problem that has blocked many loan modifications. The plan will also allow lenders to refinance mortgages that are under water with a new loan backed by the FHA. Lenders will have to reduce the first mortgage by at least 10 percent. And the combined total of second mortgages and other liens cannot be more than 115 percent of the current value of the home. The four big holders of second mortgages — Citigroup Inc., Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. — have now joined the government's program to modify second mortgages, after pressure from the Treasury Department. That program was delayed for months but now the major players in the industry are on board. Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. URL: http: //w A w.msnbc.msn. com/id/-'16050868/ns/business-real MSN Privacy. Lega1C 2010 MSNBC.com Print Powered By F I Forma 2 namics" httn_ / /www.msnbc.msn.com /id /360.50969 /nc/husiness -real estate /nrint /1 /dicn1avnnnde /1 Ogg/ 10.60..010 Finance and Commerce Manufacturers hopeful in state Imo Business News April 14, 2010 Manufacturers hopeful in state by Dan Heilman Staff Writer Following a year dominated by bad economic news, manufacturers are noticeably more optimistic about the economy and their companies for 2010, according to a recent study by Enterprise Minnesota. Page 1 of 1 Although most manufacturing executives have described a difficult business environment in 2009, fear about future recessionary woes has waned dramatically. Twenty-six percent of executives are anticipating economic growth in 2010, and only 19 percent foresee a continued recession. For companies with $5 million or more in annual revenue, concern about a bad economy has dropped from 62 percent in December 2008 to 15 percent in January 2010. Compared with a year ago, executives are reporting that key business projections are up as well. Not surprisingly, manufacturers are more confident about their own firms from a financial perspective. Last year, executives anticipated decreases in gross revenue, profitability and capital expenditures for 2009. This year, 44 percent of all executives surveyed say they expect their firms' gross revenue to increase in 2010 — nearly twice as many as last year's projection (23 percent). Profitability expectations have also improved across the board, the study found. Last year, manufacturing executives expected their firms' profitability to decrease (17 percent expected an increase, while 34 percent braced for a decrease), while today they are aiming for a net increase (with 36 percent predicting an increase and only 17 percent anticipating a decrease). Even capital expenditures appear to be holding steady. Copyright 2010 Finance and Commerce All Rights Reserved U.S. Trust Building Suite 100, Minneapolis, MN 55402 (612) 333 -4244 http: / /www. finance- commerce.com/print.cfin ?recID =15904 04/13/2010 Finance and Commerce - Minnesota jobs bill a `tool in the toolbox' Page 1 of 2 FINANCE&COMMERCE Construction March 31, 2010 Minnesota jobs bill a `tool in the toolbox' by Brian Johnson Staff Writer ___ Industry figures laud passage of construction legislation, but say more is needed A "step in the right direction" – or some variation on that theme — is a popular way to describe the newly passed construction jobs bill. While passage of the bill is likely to energize historic renovations and other building projects in Minnesota, at least some observers say the final version of the measure doesn't go far enough. The bill — which passed 112 -20 in the House and 58 -3 in the Senate on Monday, and is expected to be signed by the governor this week — includes historic renovation tax credits, small- business investment tax credits, greater flexibility in tax increment financing, and other measures designed to jump -start projects. The bill's proponents say it could create up to 12,000 new jobs. Specific projects that could benefit from the bill's passage range from the proposed Mall of America expansion in Bloomington to a reuse for the historic St. Louis County Jail in Duluth. The Mall of America project could benefit from a provision in the bill that would provide greater tax increment financing flexibility. Also under the bill, qualifying historic rehab projects are eligible for up to 20 percent state tax credit to match a federal credit. In general, the local construction industry is hailing the passage of the bill as a good start toward helping an industry that has seen unemployment soar to 50 percent in some trades. "It's great news," said Dave Semerad, CEO of the Associated General Contractors of Minnesota. "... This is going to mean a lot to our industry.... It's another tool in the toolbox for the industry and it will add value." Enthusiasm, however, was tempered somewhat by what did not make it into the bill: creation of a state - backed loan guarantee program that would provide gap financing for qualified projects that are struggling to obtain loans. The Building Jobs Coalition — a collection of contractors, architects, historic preservationists, and business, government and union leaders — called for loan guarantees as a way to "help strong construction projects close the gap in financing." Last year's version of the construction jobs bill included loan guarantees. John Hamilton, president of Minneapolis -based UrbanWorks Architecture, is among those who are disappointed to see the loan guarantees fall to the cutting room floor. He agreed that the tax credits are a "move in the right direction," but he added that the loan guarantees were "the real stimulus for the jobs. It would have stretched across all project types." State lawmakers "did what they could do, and my hat is off to them for that," he added. "But one could argue that at least in our industry, this calls for bolder measures." Qualified support The tax incentives in the bill will be paid for, in part, by repealing a motor fuels tax credit for low- income wage earners. Ifs expected to create $30.1 million in savings, but some lawmakers — such as Rep. Bobby Joe Champion, DFL- Minneapolis — objected to the move. Champion said in a statement that it's "unconscionable" to pay for "excellent provisions in the bill by taking more from those who already have so little." The Minnesota Associated Builders and Contractors had "qualified" support for the bill, according to Phil Raines, the group's director of legislative and government affairs. One thing ABC dislikes is taxpayer support for a project — the MOA expansion — that would be built under a project labor agreement. Raines said PLAs effectively eliminate non -union contractors from competing for those jobs. "We are disappointed to see that in there, but we do have qualified overall support of the bill," he said. "And there are other things in there that, frankly, at this point we need very much. We are happy to see it pass and happy to see the governor appears to be willing to sign it." In February, the governor called for a "Jobs Creation Bill" that would include a 20 percent reduction in the corporate tax rate, a 20 percent "exclusion" from taxation for small businesses, and an "angel investment" tax credit to provide incentives for "early -stage http:// www. fmance- commerce.com/print.cfin ?recID =15733 04/02/2010 Finance and Commerce - Minnesota jobs bill a `tool in the toolbox' Page 2 of 2 companies," among other provisions. In a March 29 letter to legislative leaders, Pawlenty indicated he would support a jobs bill that included an enhanced angel investment tax credit (see related story). "While I continue to believe we must do much more to make Minnesota attractive to job creators, this bill is at least a step in the right direction," Pawlenty wrote. Glen Johnson, business manager for the International Union of Operating Engineers Local 49, said the bill will provide "critical funding" for projects that will put people back to work. Unemployment among Local 49 members is between 30 and 40 percent, he said. Responding to criticism that the bill supported only "temporary" construction jobs, Johnson said all construction work is temporary because it's the nature of the business. "You build a road, it's built, and you move on to the next one," he said. "Our whole careers are spent on temporary jobs. That is how we make our living. Every job created by this bill is a benefit to the community, to the workers, to their families, to small businesses." Bonnie McDonald, executive director of the Preservation Alliance of Minnesota, told a Senate committee in February that the state historic tax credit would leverage a federal historic tax credit and spark historic preservation projects throughout Minnesota. Thirty other states — including Wisconsin and Iowa — currently have a state historic tax credit. She estimates the state tax credit would create 1,500 jobs per year, based on other states' experiences. "It takes quite a diverse range of people to ensure that these projects move forward and we would like to put them all back to work," McDonald said at the hearing. Copyright 2010 Finance and Commerce All Rights Reserved U.S. Trust Building Suite 100, Minneapolis, MN 55402 (612) 333 -4244 http: / /www. finance- commerce.com/print.cfin ?recID =15733 04/02/2010 http : / /www.startribune.comlbusinessl 89725552. html ?elr= KArksUUUoDEy3LGDiO7aiU Page 1 of 4 �V*%M,o IT 1 I I - , Paper company rolls out reinvention Russ DeFauw, presdent Performance Office Papers in Lakeville. Lakeville paper manufacturer Performance Office Papers gains national stature with new technology, product focus. By TODD NELSON, Special to the Star Tribune Last update: April 4, 2010 - 3:09 PM Its product may be plain -- tons of blank sheets of paper bound for home, office and corporate printers. But Lakeville -based Performance Office Papers is anything but. In little more than a decade, the company has reinvented itself, expanding from a regional business forms producer into a leading national manufacturer and distributor of specialty office papers. Sold by big mills like Georgia Pacific or under the company's own Perfect and Leading Edge brands, the reams often come pre - punched or pre - perforated for bills or business forms printed on office copiers or laser or inkjet printers. To transform itself and grow in a volatile, commodity -based business, Performance Office Papers has invested heavily in high - tech equipment, training and employee incentives. The company is what is known as an independent converter, taking huge rolls of paper and cutting, or converting, them into individual sheets. As a subcontractor, it provides extra capacity for the big mills and produces specialty products they don't normally make. It maintains a huge inventory to speed delivery. Ditching the old and obsolete Advertisement Print Powered By Fora atD nam ics - http://www.startiibune.com/templates/fdcp?1270494143194 04/05/2010 Glen Stubbe, Dml - Star Tribune Star Tribune http : / /www.startribune.comlbusinessl 89725552. html ?elr= KArksUUUoDEy3LGDiO7aiU Page 2 of 4 6 0 1 , My M _=e 777M - i I Founder and president Russ DeFauw launched the venture in 1985 as a local supplier of pin -holed computer printer paper. In remaking the company, DeFauw put all his chips on what he saw as the future of paper. "It's not only what you see out there but what you don't see out there that's even more revealing," he said of the company's 160,000- square -foot production facility. "We got out of the legal pad and tablet business. We got out of the pin -fed computer paper business. We got out of the cash register roll business. In short, we got out of every old, obsolete business and focused everything on digital imaging papers. Our product is all for toner and injket -driven printers, print on demand, digital imaging because it is simply the strongest segment of the paper business." The strategy appears to be a success, with revenue climbing by more than a third last year to $51 million, up from $38 million in 2008. The company added five employees last year and now has 70. That's probably down somewhat from five years ago, thanks to the productivity boost the new automated equipment has provided. DeFauw, now 62, had been in the paper business for 10 years when he left his previous employer to start Performance Office Papers. He had been the outside president of a family -owned paper company, an experience he called a combination of "Knots Landing," "Dallas" and "Days of Our Lives." The experience was miserable, he said, but certainly influenced how he has run Performance Office Papers. He and a number of top executives own most of the shares, and big decisions require a two - thirds majority to gain approval. "I would like to be the leader of a volunteer army, not a conscript army," he said. Motivating employees With a flat management structure, lean operation and self - directed work teams, the company has seen revenue per employee increase significantly in recent years, human resources manager Ross Welsh said, to more than $700,000 per employee last year. Production employees, who work three 12- hours shifts a week, do well at the high - wage, high- benefit company as well, boosting their pay by meeting weekly individual and team productivity incentives, said DeFauw. Advertisement Print Powered By FormatD namics" http://www.startribune.com/templates/fdcp?1270494143194 04/05/2010 http: / /www.startribune. com/ business / 89725552. html ?elr= KArksUUUoDEy3 LGDiO7aiU r Page 3 of 4 Some earn $80,000 a year, with the average close to $57,000, according to Welsh. The company also distributes year -end "lump -sum merit awards," adopted about a decade ago. Instead of handing out 3 percent raises, the company accrues money throughout the year for its lump -sum pool, DeFauw said. In November, when the company knows where it stands financially, it allots the award money to departments, which make individual awards based on a yearly evaluation. The pool hit $330,000 one year, while the highest individual award was for $10,000. "The annual review ends with a handshake and a check about two weeks before Christmas," DeFauw said. "For those high performers ... they come home and that check is more than money. It's the Super Bowl trophy." Low awards help motivate employees to improve performance, DeFauw said, calling the lump -sum program a powerful reinforcement tool. Over the years, employees generally have come out much better under the lump -sum program than if the company had continued to give out regular annual raises, DeFauw said, citing comparison studies the company has made. Starting every year with essentially the same controllable cost base helps the company, given the volatility of paper prices. "Easy to work with" There may have been an argument for keeping an existing business base against DeFauw's vision of investing millions of dollars in new equipment. But "we understood where we needed to go and what we could do," he said. "We put our money where our mouth was." The company relied on Jim Kyne, vice president of manufacturing, and plant manager Brad Zwiefel to fine tune design of the paper sheeting, or converting, equipment. Atlanta -based Georgia Pacific uses products from Performance Office Papers to supplement its portfolio with papers it doesn't normally manufacture, according to Bob Hieronymus, director of product management for communication papers. Georgia Pacific sells Performance Office Papers the large rolls of paper the Minnesota company converts into specially cut sheets, Hieronymus said. Advertisement Print Powered By d I For atDynamics" http://www.startribune.com/templates/fdcp?1270494143194 04/05/2010 http: / /www.startribune.com/ business / 89725552. html ?elr= KArksUUUoDEy3LGDiO7aiU 66� =I =$It- Page 4 of 4 "They're a very professional company, they always deliver on their promises, they're very timely in their manufacturing and, probably most important, they are very accommodating and easy to work with," Hieronymus said. The expert says: Dileep Rao, who teaches new business development and financing at the University of Minnesota's Carlson School of Business, said starting a business in a competitive, mature and low - margin industry as DeFauw has done is a tough proposition and is even more remarkable given its capital- intensive nature. His success offers entrepreneurs a number of lessons, Rao said, including: -Find a niche that the big boys are happy to get out of, especially if it involves lower volume or specialty product to suit their interests. They may even help you. •If you truly believe in your strategy direction, focus on that and get out of distractions. Smaller companies cannot do too many things well at the same time. •In a commodity -type business, your ultimate advantage is your people. "Mr. DeFauw should get an award for his people policies," said Rao. Todd Nelson is a freelance writer in Woodbury. His e -mail address is todd Advertisement Print Powered By F�rrrD namics" http: / /www.startribune.com /templates /fdcp? 1270494143194 04/05/2010 http: / /www. startribune. com/business /8 9743 3 02.html ?elr= KArksUUUU StarTribune.com Page 1 of 2 Area workers average $23.37 an hour That figure comes from a national survey. Health and tech workers averaged $35.01. By DEE DePASS, Star Tribune Last update: April 1, 2010 - 9:16 PM Twin Cities, St. Cloud and St. Croix, Wis,. workers earned an average $23.37 per hour, according to the results of a 14 -month national compensation survey released Thursday by the Bureau of Labor Statistics (BLS). The results, largely unchanged from the prior survey, differed dramatically depending on o ccupation, company size and union affiliation. The survey included 583 businesses and collected wage data on more than 1.7 million workers between November 2008 and January 2010. It revealed that health care and technical workers averaged $35.01 an hour, while office and administrative support workers tool - and -die and other production workers made $16.98 an hour. Bus drivers made about $18.04 an hour, while product packers made $12.56. On the low end of the scale were waiters and cafeteria workers, who earned about $6.81 to $7.24 an hour. Among the highest paid were educational administrators averaging $53.67 an hour, marketing/ sales managers ($53.99), computer managers ($55.97), general managers ($43.56) and registered nurses ($36.35). Educational workers averaged $41 an hour; however, postsecondary teachers making a $63 wage generally skewed results. The survey did not include data from farmers, federal government workers or self- employed people. For all sectors, full -time workers averaged $25.55. Part-time workers only earned about $13.01. Union workers earned $28.55, while nonunion workers earned $21.89 on average. Employees at small companies with fewer than 100 workers averaged $20.30 an hour. That compared with $30.31 an hour at companies with 500 employees or more. Advertisement Print Powered By rd I Form LD namics° httD://www.startiibune.com/teMDlates/fdcD?1270217052422 04 /02/2010 http: / /www.startribune.com/ business /89743302.html ?elr= KArksUUUU Page 2 of 2 StarTribunexom "With this report, we are giving a snapshot of what pay was during a particular time for workers in these occupations," said BLS economist Paul LaPorte. A previous survey of wages in 2007 and 2008 showed workers in this region earned $23 an hour, LaPorte said. Dee DePass • 612 - 673 -7725 Advertisement Print Powered By M I FarmatQ namics" httn• /Axr%xmv etnrtrihnnP 770717059d77 na MI) /7n1 n