HomeMy WebLinkAbout07-06-11City of Lakeville
Economic Development Commission
Regular Meeting
Agenda
WEDNESDAY, July 6,2011, p.m.
City Hall, 20195 Holyoke Avenue
Lakeville, MN
1. Call meeting to order
2. Approve April 26, 2011 meeting minutes
3. Review of Marketing Subcommittee Recommendation on a Marketing
Consultant
4. Continued Discussion of Business Subsidy Policy
5. Review of Planning Efforts for Developer Forum
6. Review of 2011 Commercial /industrial Taxpayer Information
7. Director's Report
8. Adjourn
Attachments:
May, 2011 Building Permit Report
May, 2011 Foreclosure Update
Finance & Commerce article, June 8, 2011; "Cassidy Turley sees office, industrial
markets improving (updated)"
StarTribune article, June 8, 2011; "Stalled developments strain city budgets"
No.
City of Lakeville
Economic Development Commission
Meeting Minutes
April 26, 2011
Marion Conference Room, City Hall
Members Present: Comms. Matasosky, Brantly, Longie, Starfield, Vlasak, Emond,
Smith, Tushie, Ex- officio member Mayor Mark Bellows, Ex- officio member Chamber of
Commerce Executive Director Todd Bornhauser, Ex- officio member City Administrator
Steve Mielke.
Members Absent: Comm. Schubert.
Others Present: David Olson, Community & Economic Development Director; Adam
Kienberger, Economic Development Specialist.
1. Call Meeting to Order
Chair Matasosky called the meeting to order at 4 :30 p.m. in the Marion Conference
Room of City Hall, 20195 Holyoke Avenue, Lakeville, Minnesota.
2. Approve March 22, 2011 Meeting Minutes
Motion 11.06 Comms. Emond/Longie moved to approve the minutes of the
March 22, 2011 as presented. Motion carried unanimously.
3. Review of Request for Proposals: Business Marketing Strategy
Mr. Kienberger reviewed the EDC memo outlining the work of the Marketing
Subcommittee and sought comments on the attached draft request for proposals for
a Business Marketing Strategy.
Mr. Kienberger added that at the last Subcommittee meeting it was recommended
that a Features Advantages and Benefits (FAB) exercise be conducted in
conjunction with the RFP to help self- identify how and what we should be marketing.
Comm. Brantly noted that the FAB exercise will be able to use people who already
know the community help analyze what we do best.
Comm. Tushie suggested that creativity be rated higher than other categories in the
scoring section of the RFP to encourage unique responses and demonstrate the
desire for an original approach to the EDC's business marketing strategy.
The EDC discussed if the FAB exercise should be conducted in prior to the RFP
being sent out or in conjunction with the RFP process.
Economic Development Commission
Meeting Minutes
April 22, 2011
It was suggested that a subcommittee be formed to work on the FAB exercise and
determine select the participants for the FAB exercise.
The EDC concluded that the existing Marketing Subcommittee would spearhead the
FAB exercise and it was noted that Gomm: Tushie would like to participate in the
planning process.
Comms. Brantly and Longie suggested the FAB participants to be selected should
be between 15 and 20 people as to get a diverse representation of the community,
but yet maintain a manageable group size.
Staff will email the EDC for suggestions on people to contact to participate in the
FAB exercise.
Motion 11.07 Comms. Longie / Brantly moved to include the comments mentioned
by the EDC in the RFP and forward it to City Council for
authorization to solicit a marketing consultant. Motion carried
unanimously.
4. Review of Planning Efforts for Developer Forum
Mr. Olson reviewed the EDC memo providing an update on the planned Developer
Forum. The group reviewed the draft survey to be sent out to the development
community.
Ex- officio member Chamber of Commerce Executive Director Todd Bornhauser
joined the meeting at 5:17 p.m.
Comm. Emond asked if the results of the survey will be shared with the participants
and anyone else who is interested in the process.
Mr. Mielke responded that the results will be presented at the forum and used with
the comments received through a facilitated session at the forum to analyze City
development practices and procedures.
Comm. Tushie noted that something similar was done several years ago and the
results weren't terribly useful as developers can be reluctant to say anything
negative that could affect their projects.
Chair Matasosky added that as a developer, he feels he can be very open on the
topic. Some developers may prefer to respond anonymously which is possible as
the survey doesn't require a name or company to be disclosed on it.
Mayor Bellows stated that candid comments will be encouraged in the cover letter
signed by him that would be attached to each survey.
Mayor Bellows excused himself from the meeting at 5:30 p.m.
2
Economic Development Commission
Meeting Minutes
April 22, 2011
Comm. Tushie asked if there would be follow -up calls to encourage participation in
the survey process.
Mr. Mielke stated that the respondents will be given a variety of options for
responding to the survey including an online version with a URL that will be noted in
the letter sent to them.
5. Review of 2010 Census Information for Lakeville and Dakota County
Mr. Olson reviewed a presentation highlighting some of the 2010 Census results as
prepared by Dakota County staff. The presentation was distributed to the EDC at
the meeting.
6. ' Director's Report
Mr. Olson reviewed the Director's Report.
7. Adjourn
The meeting was adjourned at 6:00 p.m.
Respectfully submitted by: Attested to:
Adam Kienberger, Recording.Secretary
R. T. Brantly, Secretary
3
,�Zm No.
40 City of Lakeville
Community and Economic Development
Memorandum
To: Economic Development Commission
From: Adam Kienberger, Economic Development Specialist
Copy: Steven Mielke, City Administrator
David L. Olson, Community & Economic Development Director
Date: July 6, 2011
Subject: Lakeville Business Marketing Strategy Consultant Recommendation
The EDC's Marketing Subcommittee (Comms. Matasosky, Brantly, Longie, Tushie,
and at -large member Clinton Kennedy) received four proposals in response to the
RFP for creation of a business marketing strategy as outlined in the EDC's 2011-
2013 Strategic Plan for Economic Development.
The subcommittee members reviewed each proposal individually and then met to
discuss, rank and select firms to interview based on their proposals. Three firms
were interviewed by the Subcommittee and consensus was reached on a
recommended firm at the Subcommittee's June 23 meeting.
The EDC Marketing Subcommittee is recommending that the EDC recommend to
City Council that Arnett Muldrow & Associates based in Greenville, South Carolina be
retained to develop Lakeville's business marketing strategy.
Arnett Muldrow & Associates is a planning, economic development, community
branding, and historic preservation firm located in Greenville, South Carolina. They
have a wide range of experience from around the country doing marketing and
branding for municipalities and understand the economic development implications
of a solid business marketing strategy.
Locally they have done work for the City of Anoka. Reference checks with both
Anoka and the City of West Des Moines, Iowa came back extremely favorable
including comments about their level of involvement, creativity, and commitment to
their respective projects.
Although the City is not required to select the lowest bid for this type of project,
Arnett Muldrow & Associates were also the most affordable of the proposals
received even when including their travel costs. They have clarified for us in a
follow -up letter that with travel the total project will not exceed $30,900.
Community Development Block Grant dollars will be used to pay for the business
marketing strategy.
A copy of their proposal is attached for your review.
Action Requested: The EDC Marketing Subcommittee along with staff are
recommending that the EDC recommend to the City Council selection of Arnett
Muldrow & Associates to develop a business marketing strategy.
ARNETT
& ASSOCIATES
CITY PLANNING
ECONOMIC DEVELOPMENT
COMMUNITY BRANDING
HISTORIC PRESERVATION
June 2, 2011
Mr. Adam Kienberger
Economic Development Specialist
City of Lakeville
20195 Holyoke Avenue
Lakeville, Minnessota 55044
Dear Mr. Keinberger:
Arnett Muldrow & Associates, Ltd. is pleased to submit this proposal for the development of a Business
Marketing Strategy for Lakeville, Minnesota.
We are a unique firm in that we come from the community marketing and branding angle as a planning
and economic development firm and NOT an advertising agency. This experience helps us understand
the unique characteristics of local government and community marketing that relies on collaboration,
consensus, and buy in from many partners in order to be successful. Moreover, since we are not an
advertising agency, we do not make commissions from ad placements and ongoing "retainer" contracts
but rather try to equip the community to be "empowered" to implement its marketing strategy using local
resources and talent.
To date, we have completed community marketing and branding studies for over 200 communities in
twenty-seven states including work in nearby Anoka.
We invite you to review our credentials and proposed scope of work. We would also welcome the
opportunity to discuss in more detail how our team's unique qualifications and demonstrated experience
can prove valuable to efforts to implement the goals and policies of the EDC's 2011 -2013 Strategic Plan
for Economic Development. We look forward to hearing from you.
Sincerely,
Tripp Muldrow, AICP
President
Arnett Muldrow & Associates, Ltd.
tripp @arnettmuldrow.com
PO BOX 4151 GREENVILLE, SC 29608
PHONE 864.233.0950 WWW.ARNETTMULDROW.COM FAX 864.233.0840
ARNETT
& ASSOC I A T E S
CITY PLANNING
ECONOMIC DEVELOPMENT
COMMUNITY BRANDING
HISTORIC PRESERVATION
Project Understanding
The City of Lakeville has identified five goals of the Business Marketing Strategy that include
recruitment, retention, market differentiation, positive image for internal pride and external
recognition, and a partnership strategy for implementation. Each of these elements is core to a
successful marketing strategy. In fact, they operate hand in hand. Without a retention message,
existing businesses feel left out. Without a message that resonates with local citizens, a community
fails to engender pride to carry the message forward.
The current City of Lakeville website identifies the city as the "Southern Gateway to the Twin
Cities." While this message may be accurate, it implies that Lakeville is a place to pass through on
the way to your "actual" destination: Minneapolis /St. Paul. Arnett Muldrow recently completed a
marketing initiative for Albany, California, a community immediately next to Berkeley on San
Francisco's East Bay. Their tagline was the "Northern Gateway to Alameda County." This tagline
failed to acknowledge that the community had stunning bayfront views across to the Golden Gate
Bridge, that it was a relatively small community amidst a vibrant urban setting. The new tagline,
"The Urban Village by the Bay," gave pride to the community, reinforced its strong planning ethic
that has maintained a small town atmosphere amidst an urban setting, and acknowledged that the
community was part of a very well known region.
The marketing arena is changing dramatically and Lakeville acknowledges this by wanting strategies
that address site selectors, social media coupled with hands on traditional techniques. We take a
balanced view of traditional face -to -face and grassroots marketing and couple it with extensive
experience with new trends in social media. The community must maintain a balanced approach and
not sink too much investment into the next "fad" only to see it replaced with new technology in a few
short years.
Site selectors have to quickly navigate to pertinent information. The messaging is effective insofar as
it gets them first to the data they need. They will quickly cull through thousands of communities that
fail to meet the broadest criteria. Lakeville will need something to differentiate itself once it lands on
shortlists for prospects. A quick review of peer community websites reveals that although each
community is different, the economic development look and feel of the sites is remarkably similar. In
this regard, Lakeville should be unique.
We respect the fact that Lakeview does not want to redesign its logo. Our recent experience
developing the marketing and branding strategy for West Des Moines, Iowa was quite similar. The
community had a logo that had been deployed on everything from gateway signs to the city's water
towers. What West Des Moines needed was not a new logo but a new message. Arnett Muldrow
created the "Positioned, Perfectly" campaign that emphasized the city's five target industries, the
city's strategic location in the Des Moines metro, and included a locals pride campaign that will allow
for citizens to participate in the marketing effort.
PO BOX 4151 GREENVILLE, SC 29608
PHONE 864.233.0950 WWW.ARNETTMULDROW.COM FAX 864.233.0840
ARNETT
& ASSOC I A T E S
CITY PLANNING
ECONOMIC DEVELOPMENT
COMMUNITY BRANDING
HISTORIC PRESERVATION
Firm Credentials and Experience
At Arnett Muldrow & Associates, we are committed to making better communities. Based in Greenville,
South Carolina, Arnett Muldrow & Associates was created in 2002 to help communities that want to
rebuild their aging downtown, reinvigorate their urban neighborhoods, and create economic development
opportunities in growing metropolitan areas. Our team of professionals has worked in communities large
and small from St. Albans, Vermont to Pleasanton, California. We are a four - person firm that focuses on
client service.
OUR SERVICES
Town Planning
• Downtown master plans
• Special district and neighborhood master plans
• Commercial corridor plans and redevelopment guidelines
Economic Development
• Retail market assessment for downtowns, commercial districts and sites
• Community partnership development for revitalization and economic development
• Economic and community development strategies and financing plans
• Tax Increment District Redevelopment Plans
Community Branding and Marketing
• Community and downtown image packages including logos and taglines
• Marketing plans including collateral material and web pages
• Wayfinding and environmental sign concepts
Historic Preservation
• Historic preservation planning
• Creation of local and National Register historic districts
• Design guideline documents and overlay districts
OUR PROCESS
We work very closely with our clients to define the planning issues for their communities. Whether our
solutions focus on an economic development strategy, retail market research, urban design, or historic
preservation — we craft a custom process for each community built around three strategies:
Commitment to Stakeholder Involvement — Without the involvement of key stakeholders including the
public, a project is destined for the dusty shelf. Our public process depends on listening to our clients and
we're not afraid to use creative methods to hear what they have to say.
Economic Solutions — Any plan can offer a vision for the future of a community. At Arnett Muldrow &
Associates, we back the vision with thorough and thoughtful research into the economics that lead to
implementation. Our research typically includes detailed retail market assessment and demographic
analysis followed by real marketing solutions because getting the word out can be as important as crafting
the plan.
Plans that Get Implemented — All of our planning efforts include detailed implementation strategies and
action plans that detail the who, what, how, and when for every plan recommendation.
PO BOX 4151 GREENVILLE, SC 29608
PHONE 864.233.0950 WWW.ARNETTMULDROW.COM FAX 864.233.0840
ARNETT
& A S S O C I A T E S
CITY PLANNING
ECONOMIC DEVELOPMENT
COMMUNITY BRANDING
HISTORIC PRESERVATION
Community Marketing and Branding Experience
Arnett Muldrow has emerged as one of the nation's leaders specializing in marketing and branding for
communities in the context of creating economic vitality. Unlike a typical advertising or marketing
agency, we are a planning firm that understands the complexities of community issues. Our branding and
marketing efforts combine the sensitivity of planning with the expertise of a professional graphic artist
and marketing specialist. Our experience speaks for itself
• Speakers at the National Main Street Conference on Community Branding in 2005 Albuquerque,
2007 Seattle, 2009 Chicago, and 2010 in Oklahoma City. We have conducted seven national
sessions on community branding at the conclusion of the 2010 conference.
• Speakers at the Iowa, North Carolina, South Carolina, Virginia, Vermont, Maine, Illinois, and
Wisconsin Main Street Conferences and the 2008 Destination Downtown Conferences (MS, LA,
and AR) on community branding.
• The Virginia Main Street Program selected Arnett Muldrow & Associates to teach the Main
Street 101 course on community marketing and branding.
• Mississippi, Iowa, and Vermont's Main Street Programs have selected Arnett Muldrow to
conduct Main Street manager training on community branding at its annual managers meeting.
• The Downtown Promotion Reporter, a national trade publication on marketing downtowns, has
named Ben Muldrow a "branding guru" in a 2004 article on community logos and conducted a
follow up article featuring Arnett Muldrow's work in 2010.
• The National Trust for Historic Preservation has used Arnett Muldrow & Associates for branding
services in Macon, Georgia and Detroit, Michigan and we have continued to work with the
National Trust for Historic Preservation on branding packages for regional heritage corridors in
Arkansas and Kentucky.
• The Virginia Main Street Monitor published an article written by Tripp Muldrow concerning the
importance of place recognition as conveyed through consistent messages and branding materials.
• To date we have completed logo and marketing plans for over 100 communities in nineteen
states: AR, VA, MD, WI, IA, MN, VT, MS, MO, NC, DE, SC, GA, LA, AR, IL, MI, KY, WV,
and CA.
Much of our work is for local governments that do not have unlimited budgets for marketing and
branding. We recognize the limitations that this places on implementation and prepare creative solutions
to deal with these issues. We know the "tricks of the trade" to develop affordable but highly effective
products. We are committed to producing quality. In addition, we have a proven track record of follow
through with variety of implementation options. Some of our recommendations have gone on to become
major marketing initiatives for communities including a recent film for the Atchafalaya National Heritage
Area and a major campaign for Staunton, Virginia launched in Washington, DC. Our clients have
included Main Street Programs, Towns and Cities, Chambers of Commerce, and Economic Development
Agencies.
PO BOX 4151 GREENVILLE, SC 29608
PHONE 864.233.0950 WWW.ARNETTMULDROW.COM FAX 864.233.0840
NETT
&ASSOCIATES
CITY PLANNING
ECONOMIC DEVELOPMENT
COMMUNITY BRANDING
HISTORIC PRESERVATION
Kev Personnel
As a four - person firm, Arnett Muldrow relies on its experienced principals to conduct all of its marketing
work. We do not "farm out" our work to subconsultants and Lakeville can expect a consistent staffing
plan throughout the effort. Three of the four professionals in the firm will be involved in the project.
For Lakeville Tripp Muldrow will be the primary point of contact for the project. Tripp will serve as the
project manager. Tee Coker and Ben Muldrow will work hand in hand with Tripp. This turnkey approach
allows us to be "lean and mean" in our budgeting for these projects saving communities money while
providing exceptional one -on -one service. Resumes for all three team members accompany this proposal.
References
Naomi A. Hamlett, AICP
Community and Economic Development Planner
City of West Des Moines
4200 Mills Civic Parkway
Post Office Box 65320
West Des Moines, Iowa 50265 -0320
515.273.0770
Naomi.Hamlett(7&wdm- ia.com
Bob Wilson, Executive Director
The Electric Building
308 Pearl Street, Suite 101
Jackson, MS 39201
601.944.0331
bobwilson(&msmainstreet.com
Multiple Marketing /Branding Projects Throughout Mississippi
Pam Bowman
Communications Coordinator
City of Anoka
2015 First Avenue North
Anoke, Minnesota 55305
763.576.2725
pbowman(a,ci.anoka.mn.us
PO BOX 4151 GREENVILLE, SC 29608
PHONE 864.233.0950 WWW.ARNETTMULDROW.COM FAX 864.233.0840
ARNETT
& ASSOCIATES
CITY PLANNING
ECONOMIC DEVELOPMENT
COMMUNITY BRANDING
HISTORIC PRESERVATION
Scope of Work
Task One: Information Gathering and Background Review
Arnett Muldrow will review all existing marketing and economic development efforts for Lakeville
including the 2010 EDC Strategic Plan for Economic Development, 2010 Business Survey Executive
Summary, relevant maps and charts, the conclusions of the EDC Features, Advantages, Benefits (FAB)
exercise (upon its release). We will also review other print and media materials, such as the City website,
conference and trade show attendance data, and program documents as provided by the Client.
Task Two: Project Kickoff and Stakeholder Input (Client Meeting One)
The Arnett Muldrow team will conduct a three -day work session in Lakeville that will involve input
regarding both the market research for the community as well as research into what makes the Lakeville
"brand." The kickoff trip will involve the following:
1. A preliminary meeting will be held with members of the Economic Development Commission
and City staff to review the project scope, schedule and deliverables.
2. We recommend that Lakeville engage a Steering Committee of key staff and citizen stakeholders
from Lakeville. This steering committee will provide guidance to the Arnett Muldrow team and
periodically evaluate the progress of the marketing plan. While the Economic Development
Commission will play a primary role in this effort, partners in the community will bear key
teaming responsibilities to ensure that the marketing message is launched.
3. We will conduct reconnaissance of Lakeville as well as a detailed photo- shoot. All of the photos
will become the property of the Client and can be used to assist in the ongoing implementation of
the marketing campaign to come later in the process. Many communities have found this
professional quality photo library to be a valuable addition to the services we provide.
4. Our team will conduct up to twenty-five leadership interviews and roundtable workshops (which
may occur over the duration of the project) to assess community leaders' perspectives on the how
the community is currently marketed and perceived. We try to talk with key property owners,
business and building owners, and leaders of community groups. We will work closely with the
Steering Committee to identify the people to be interviewed but will rely on the Client to set the
appointment times with the interviewees. We have found that one -on -one meetings allow for
candid and frank discussions of issues (while also potentially engaging naysayers in a positive
way).
5. We will meet with selected community and business groups themselves to garner input and share
progress on the effort. We will work closely with the Client to determine which individuals and
groups to meet with. Typically these meetings include professionals in real estate, civic groups,
and targeted industry groups. We will conduct up to seven group roundtable discussions with
these groups.
PO BOX 4151 GREENVILLE, SC 29608
PHONE 864.233.0950 WWW.ARNETTMULDROW.COM FAX 864.233.0840
ARNETT
& ASSOC I A T E S
CITY PLANNING
ECONOMIC DEVELOPMENT
COMMUNITY BRANDING
HISTORIC PRESERVATION
Task Three: Draft Marketing Strategy Report and Presentation (Client Meeting Two)
Arnett Muldrow will issue a draft market strategy report and make a presentation of findings to date to the
EDC, the Steering Committee, City Council, and other parties as selected by the Client. The draft report
will include a synopsis of input to date and will include an outline of preliminary marketing strategies and
branding concepts.
Task Four: Marketing Strategy Reftnement/Resource Development
Arnett Muldrow will assess input and direction provided during task two to refine selected marketing
concepts and to begin developing additional resources. The resource development process will
incorporate the brand and its various media applications in copyrightable, well- designed economic
development marketing pieces for the community.
We recognize that public agencies have limited budgets and that many communities have local talent to
help implement brand recommendations. To that end, we will provide the Client with all of the brand
documents (including all copyrights) for future use. We will provide three key resources for Lakeville.
The first is a Marketing Style Guide that will show all of the appropriate uses of the brand including
templates for ad layouts for use by Lakeville. The second is a digital resource package with ALL relevant
images, graphics and applications for economic development marketing. The third resource is a digital
tracking guide to gauge the effectiveness of the online strategy.
Task Five: Resource Review Visit (Client Meeting Three)
The Arnett Muldrow team will return to Lakeville to review progress to date, work on refinements to
marketing pieces and begin work on the preliminary implementation techniques with both the Staff and
the Steering Committee. This meeting will also afford us the opportunity to have an digital media
workshop with the client team to evaluate tools, explain how they work, make determinations of which
digital marketing directions to take, and formulate those into the implementation strategy.
Task Six: Implementation Strategy
The marketing and branding recommendations will be presented in an implementation matrix that we call
a "Strategy Board" that identifies publications, flight times and sequences, measurement objectives, and
key messaging for each target. The "Strategy Board" condenses the entire marketing plan to one easy -to-
use sheet that will prioritize the tools and tactics to implement the marketing message. We will provide
both an initial one -year action agenda and ongoing action items to implement the marketing effort. The
implementation strategy will also include the development of a monitoring system and performance
measures.
Task Seven: The Promotion and Implementation Workshop (Client Visit Four)
The Arnett Muldrow team will return to Lakeville for an intensive promotion and implementation
workshop that will involve a staff and Steering Committee review of all of the materials, the strategy
board, the implementation and monitoring techniques, and the cost estimates and flight times and
sequences for each segment of the marketing strategy.
PO BOX 4151 GREENVILLE, SC 29608
PHONE 864.233.0950 WWW.ARNETTMULDROW.COM FAX 864.233.0840
ARNETT
&ASSOCIATE S
CITY PLANNING
ECONOMIC DEVELOPMENT
COMMUNITY BRANDING
HISTORIC PRESERVATION
Project Deliverables:
1. Marketing concepts and messaging for the community
2. Print collateral designs, such as ads and brochures;
3. Web page skin redesign and web marketing concepts;
4. Ad templates and concepts;
5. Other collateral pieces as desired by Lakeville (we like to keep this open -ended so that any
custom products you need can be developed);
6. All related photography in digital format;
7. Digital resource package with all deliverables in a variety of file formats;
8. Marketing Style Guide for implementation;
9. Marketing PowerPoint presentation;
10. Copyright release granting ownership of all designs to the City of Lakeville;
11. Marketing ad placement strategy;
12. Draft flight schedule for all media;
13. Implementation strategy board outlining first, next, and final steps for the marketing
implementation plan.
Project Timeline
Arnett Muldrow is available to start work on the project in late July 2011 with expected completion by
October 28, 2011. These dates are subject to change based on the needs and schedule of Lakeville but are
used to illustrate when each task could be completed on an aggressive schedule.
Project Budget
Tasks one through seven of the project can be completed for a not to exceed cost of $26,400 plus of travel
expenses for six person trips billed at cost with no markup. This price does not include advertising costs
for ad placement.
Our hourly rates are as follows:
Tripp Muldrow $110
Ben Muldrow $110
Tee Coker $85
Hours Per Task:
Task One:
Information Gathering and Background Review
12
Task Two:
Project Kickoff and Stakeholder Input (Client Meeting One)
72
Task Three:
Draft Marketing Strategy Report and Presentation (Client Meeting Two) 48
Task Four:
Marketing Strategy Refinement/Resource Development
40
Task Five:
Resource Review Visit (Client Meeting Three)
36
Task Six:
Implementation Strategy
24
Task Seven:
The Promotion and Implementation Workshop (Client Visit Four)
32
PO BOX 4151 GREENVILLE, SC 29608
PHONE 864.233.0950 WWW.ARNETTMULDROW.COM FAX 864.233.0840
ARNETT . .40
Tripp Muldrow, AICP & A S S O C I ATE S
PRINCIPAL
Tripp Muldrow is an accomplished urban planner with experience covering a broad range of areas in the planning
field. Tripp's particular talents lie in understanding how planning and urban design concepts apply to economic
development policies and strategies. He has coordinated commercial corridor business associations, developed and
implemented historic preservation policies, and authored downtown market studies, tourism plans, and economic
development master planning efforts. Tripp is a skilled public facilitator and talented writer. He is equally
comfortable conducting public meetings, facilitating community groups, writing technical reports and distilling
complex technical information for general audiences.
He has served on the faculty of the South Carolina Mayor's Institute for Community Design and has been guest
speaker at the Wisconsin Main Street Conference, the Virginia Downtown Development Association, the North
Carolina Main Street Conference, and the 2005 and 2007 National Main Streets Conference. In 2004, Tripp was
selected as part of an eighteen person Kellogg Foundation Grant delegation to County Mayo Ireland to study
sustainable tourism and community development. Tripp is also committed to his own community where he has
served President of the South Carolina American Planning Association, a board member of Community Builders
(formerly the SC Downtown Development Association), a commissioner for the Greenville Housing Authority, and
on the Board of Regents for Leadership Greenville. Tripp is currently a Planning Commissioner with the City of
Greenville.
Education Bachelor of Arts, Clemson University (1993)
Master of City and Regional Planning, Clemson University (1996)
Professional Memberships American Planning Association
American Institute of Certified Planners
Summary of Experience 2002- Present— Arnett Muldrow & Associates
Principal, Greenville, SC
Performs downtown and community master planning with
specialization in economic development and market analyses.
2000 -2002 — MCA Urban Planning
Director of Urban Planning, Greenville, SC
Managed the Urban Planning program at MCA a division of the 35-
person Architecture firm located in Greenville, South Carolina.
1998 -2000 — LDR International, Inc.
Project Manager /Associate, Columbia, MD
Managed planning projects in cities across the Southeast including
Columbia, SC; Macon, GA; Gulf Shores, AL; and Newport News, VA.
Coordinated economic development plans for master planning efforts.
1995 -1998 — City of Greenville
Economic Development Specialist, Greenville, SC
Responsible for planning in the City's West End district, a once
declining neighborhood that has emerged as the City's arts and
education district. Also worked with commercial corridor planning and
historic preservation planning for the city.
POST OFFICE BOX 4151 GREENVILLE, SC 29608 864.233.0950 www.arnettmuldrow.com
4.
W�U -T
w
Tee Coker, MCRP
Tee Coker is an urban planner with experience covering a broad
Education
range of areas in the planning field. Flis particular talents lie in
Bachelor of Arts, I listory, Furman University
understanding how planning and design concepts apply to economic
(2001, Magna Cum Laude, Phi Beta Kappa)
r
I
development policies and strategies. Tee has contributed to Arnett
Master of Arts, History, Clemson University
(2005)
Muldrow projects in six states. These include community branding
Master o F City and Regional Planning, Clernson
charrettes, downtown market studies, economic development plans,
University (2010)
and downtown and neighborhood master plans. Tee is a talented writer
Professional Memberships
whose academic background provides him the ability to synthesize
American Planning Association
information and provide concise analyses of complex situations. He is
South Carolina Chapter of American Planning
also comfortabIcconducting public niecti ngs, facilitating community
Association
South Carolina Chapter of U.S. Green Building;
groups, performing stakeholder interviews, writing technical
Council
o
i!
reports and distilling technical information for 9 encral audiences.
Summary of Ex perience
As a recent graduate of Clemson University, Master of City and
2010-Present - Arnett Muldroxv C. Associates
Professional Planner, Grecriville, SC
Rc Planning program,Tce brings to bear knowledge of current
Performs brandin downtown, and community
- .
A
urban planning practices and tcclin ologics. He is skill mGeographic
master planning with specialization in economic
,
development and market analysis.
4
Information System (GIS) sofrware,Adobegraphic design software,
and is pursuing LEED-Green Associate certification to further
2009-2010 - Arnett Muldrow & Associates
Planning Intern, Greenville, SC
his knowledge of sustainable
Performed market analyses, developed profess -
neighborhood development. As
ional reports, conducted community research,
and contributed to planning team in dozen of
a graduate student, Tee helped
planning projects.
develop design guidelines for mvo
2008-2009 - Clemson University
Greenville ncio�hborlioods which
M
Graduate Assistant, Clemson, Sc'
he then presented before the City
Performed historic research and facilitated
recruitment of students.
Planning Commission. Tee is also
prospective
a community volunteer, a member
of Saint Andrews Presbyterian
Church, as well as an avid hiker,
weight lifter, and -visual artist.
4Z Q
ARNETT
Ben Muldrow & ASSOC I A T E S
PRINCIPAL
Ben Muldrow is a talented graphic artist with experience in a wide variety of marketing applications. He provides
community identity and branding services for communities across the United States. Ben has worked on a number
of projects specializing in the development of city and neighborhood identities, wayfinding strategies, and
promotional marketing material. His experience and portfolio includes a commission by the National Trust for
Historic Preservation to complete citywide and regional heritage tourism strategies in Arkansas, Kentucky, and
Macon, Georgia. The Downtown Promotion Reporter, a national trade publication on marketing downtowns, called
Ben a "branding guru" in a 2004 article on community logos. Ben has been a speaker at the 2004 and 2007 National
Main Streets Conference on community branding.
Ben is active in the community serving the South Carolina Design Arts Partnership, the Friends of Paris Mountain
and the local Boy Scouts of America.
Education
Summary of Experience
Bachelor of Arts, University of South Carolina (2000)
2002 - Present — Arnett Muldrow & Associates
Director of Community Imaging, Greenville, SC
Provides graphic design and marketing material for Arnett Muldrow &
Associates and their clients.
April 2001 -April 2002 — ShowCase Marketing
Art Director
Developed City Marketing Department
Directed Minor League Sports Marketing Program
Maintained Creative Department Archiving System
Created collateral for 17 clients in continuous relationships.
April 2001 -Nov 2001- NewSouth Communications
Strategic Branding Manager
Managed all print and sales collateral
Maintained and redesigned Intranet and Internet sites
Developed web growth plans, and inventory control strategies
Rebuilt sales support structure and cut overall printing costs
October 1999- May 2000 - Gillespie Agency
Art Director
Produced Ads for Bellsouth Mobility, Ducane Grills, and twelve other
clients.
Kept track of external expense
File Preparation for external outputs
Photo Shoot management and prop selection
May 1998- October 1999 - College of Engineering, USC
Art Director
Managed quarterly publications and yearly publication budget
Designed internal and external advertising
Organized news events and developed promotions for them
Maintained the Mac network and handled hardware and software upgrades
A R N ETT - ' .
& ASSOCIATES
CITY PLANNING
ECONOMIC DEVELOPMENT
COMMUNITY BRANDING
HISTORIC PRESERVATION
June 22, 2011
Mr. Adam Kienberger
Economic Development Specialist
City of Lakeville
20195 Holyoke Avenue
Lakeville, Minnesota 55044
Dear Mr. Kienberger:
Thank you so much for the chance to interview with Lakeville this morning. It was a pleasure talking
with you and the Economic Development Commission. Please accept this note as a revision to our fee
proposal outlining that we would complete the project for a not to exceed fee of $26,400 plus expenses
billed at cost not to exceed an estimated $4,500 for a total project cost not to exceed $30,900. Please also
note that we would like to include an initial reconnaissance visit in lieu of one of the follow up visits per
our discussion this morning for a total number of five visits.
Sincerely,
Tri p Muldrow, AICP
President
Arnett Muldrow & Associates, Ltd.
tripp @amettmuldrow.com
PO BOX 4151 GREENVILLE, SC 29608
PHONE 864.233.0950 WWW.ARNETTMULDROW.COM FAX 864.233.0840
City of Lakeville
/ Community and Economic Development
Memorandum
To: Economic Development Commission
Steven Mielke, City Administrator
1
From: David L. Olson, Community & Economic Development Director/
Copy: Adam Kienberger, Economic Development Specialist
Date: June 23, 2011
Subject: Review of Proposed Business Subsidy Policy
Staff presented the attached flow chart at the March EDC meeting which outlines
the process that starts with the Strategic Plan and ends with the development of
policies for the implementation of the specific tools for an incentive tool box. As has
been discussed previously, identifying the available tools is fairly straightforward.
The issues become more complex when the City has to determine when the tools
that involve financial assistance are to be offered and for what type of projects.
Based on the EDC's concurrence with this flow chart / outline, staff recommends
that the attached proposed Business Subsidy Policy be recommended to the City
Council for approval. This proposed policy identifies the criteria by which any
project will be considered for financial incentives. This document also becomes the
basis on which policies for specific tools are based. It should be mentioned that this
policy can be revised in the future if it is determined after reviewing and /or
approving any projects for a subsidy or incentive that changes or additions are
warranted.
This item was on the agenda and included in the packet for the May 24 meeting
for which we did not have a quorum and thus did not have a meeting. I did
however receive feedback from one EDC member suggesting additional items to be
included in the proposed Policy. These included: adding 'regional infrastructure" to
Section 2.03 (b) of the proposed Policy; including "Projects that result in the
development of affordable senior or workforce housing" as Section 2.03 (e) and
providing a look back provision to Section 2.07.
A number of additional issues associated with incentives have been discussed during
previous meetings on business subsidies and incentives. The issues have included:
designating more areas for higher density housing, the City providing more regional
ponding, possible reductions or revisions to current development fees and charges
and other development requirements.
A number of these issues were included in responses to the recently completed
Developer Survey and Developer Forum that was held on June 15 While a
number of these issues may have merit, most of them will involve significant policy
discussions by the City Council and thus will take additional time. It is staff's
position that not all of the possible or potential tools to be included in an Incentive
"Tool Box" need to be included initially. Additional tools can be approved and
incorporated over time. However there is a need to have an overall policy in place
that becomes the basis for which additional specific tools can be added to the tool
box in the future.
It is staff's opinion that we need to start to put some of the tools in place so that
when a project comes forward in the near term, we have adopted policies for at
least some of the basic tools in place.
Action Requested Recommend approval to the City Council of the attached
Business Subsidy Policy. The City Council is tentatively scheduled to discuss this
issue at their July 25 Work Session.
Business practices
Intangible
Competitive fees
■ Goals of Economic
Development
■ "Tool" policies
Policy Implementation
by Economic
Development staff
■ Implementation of
"tools" on Economic
Development projects
0� Tangible ($)
0. Community attributes (marketing)
Examples of Goals for Economic Development
• Sector specific goals (i.e. medical)
• Job growth
• Tax base growth
• Business /job retention
• Determination of need
• Determination of ROI
• Application of business subsidy policy
• Application of "tool" policies
Policy Guidance
(Adopted by Council)
6/24/11 Draft
Policy 1.25
BUSINESS SUBSIDY POLICY
1.00 PURPOSE
1.01 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.
2.00 POLICY
2.01 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 Comprehensive Land
Use Plan.
2.02 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.
2.03 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:
a. 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.
b. Projects that provide value in the forms of needed transportation and other utility
infrastructure improvements including regional infrastructure in the community that would
be completed in conjunction with the project.
c. Redevelopment projects that result in the stabilization of business districts or neighborhoods
by elimination of blighting conditions.
d. 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.
e. Projects that result in the development of affordable senior or workforce housing.
f. 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.
g. 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.
2.04 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.
2.05 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 Land Use Plan, current Strategic Plan for Economic Development. The level of
assistance to be provided for any project is at the discretion of City of Lakeville.
2.06 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.
2.07 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. Upon completion of the project,
the actual costs of the elements of the project eligible for the business subsidy will be verified.
All business subsidies will be subject to the criteria outlined in Minnesota Statutes, Section
116J.933 through Section 116J.955 except those subsidies as exempted by same.
�v rio. 5
City of Lakeville
Community and Economic Development
Memorandum
To: Economic Development Commission
From: Adam Kienberger, Economic Development Specialist
Copy: Steven Mielke, City Administrator
David L. Olson, Community & Economic Development Director
Date: July 6, 2011
Subject: Review of Planning Efforts for Developer Forum
Attached are the results from the developer survey as well as the comments
received during the developer forum held on June 15 These results were
discussed by the City Council at their June 27 work session.
The results and comments are being provided to solicit feedback from the EDC that
the City Council and staff can use to consider possible changes to processes and
regulations.
Suggestions will be used as a part of an effort to seek "continuous improvement" for
interactions with the development community and recognizing evolving economic
conditions.
Action Requested: None. This information is being provided as a follow -up to the
developer forum.
_ City of Lakeville
Administration
Memorandum
To: Honorable Mayor and Members of the City Council
From: Steven C. Mielke, City Administrator
Date: June 24, 2011
Subject; Status Update — Deve%pers Forum
Over the past two months the City has embarked on a process to explore the various
aspects of the development process in Lakeville and to receive feedback from the
development community in an effort to seek "'continuous improvement ".
To date, the process has included:
1. A meeting with several developers to receive suggestions on the development
forum process.
2. The creation and distribution of a survey instrument intended to spur ideas and
discussion on how the City might improve customer service and our development
review process.
3. A discussion forum facilitated by a private consultant to further explore ideas for
improvement of our development process and regulations.
The next steps in the process will include:
1. Review and discussion within the organization as to how to better improve the
development process and opportunities, based upon the input received.
2. Implement changes to processes and ordinances to accommodate the
determined changes.
Attached to this memorandum are:
1. The Development Forum Survey Responses - Executive Summary
2. Comments received from the Developer's Forum.
The staff has begun to review the survey and forum responses in an effort to organize
a follow -up discussion and recommendations. It is anticipated that the City Council,
Economic Development Commission, and Planning Commission will all have an
opportunity to review, comment, and provide additional input on the development
review process and regulations. Ultimately staff and Council will discuss specific
suggestions for change and improvement.
Staff looks forward to Council feedback on the process to -date.
Development Forum Survey Responses
— Executive Summary—
In an effort to pursue "continuous improvement" the Lakeville City Council requested staff
to complete a survey of the development community and to hold a development forum to
ascertain if any refinements to the development review process need to be considered.
The City compiled a list of 143 developers, builders, consultants, brokers, and property
owners who had development or construction related interactions with the City over the
past several years. These survey recipients are listed in Attachment A. The survey
included eight questions that related to development processes, procedures and regulations.
The City received 38 responses to the survey. Attachment B is the full survey and a
compilation of all responses.
The following is an executive summary of the survey questions and the responses to each.
The responses to each question are listed in order by frequency:
1. Survey responses came from the following categories: (some respondents
checked more than one category)
a. Developer (13)
b. Consultant (11)
c. Contractor (11)
d. Property Owner (9)
e. Home Builder (7)
2. The top two reasons for interaction with the City of Lakeville was:
a. Retail, Commercial or Industrial development projects (17)
b. Residential development projects (15)
3. The following were interacted with the most:
a. Planning Department (33)
b. Engineering/Environmental Department (27)
c. City Council and Planning Commission (20)
d. Planning Commission (19)
e. Inspections Department (14)
4. Was your project or application handled in a timely and responsive
manner? Please provide comments or suggestions on how the City could
improve.
a. The majority of the respondents indicated their project was handled in a
timely and responsive manner by staff. (27)
b. A suggestion for improvement was to have a defined submittal and review
schedule for Planning Commission meetings (2)
c. Other individual comments included the following:
• Not Really — Would be nice to have all the facts on what is needed for
the project and not have to return 4 -5 times to work off punch lists.
• Usually, however could be occasionally lengthy process. This could be
due to number of similar projects at the same time in the review process.
• Our City needs to think outside the box the way we do business has
changed and the City codes have not changed for years.
• Somewhat. It seems that considering the lower volume of development
now, the process could move faster.
• Beginning Process could be more efficient by combining comments
from Economic Development and Planning Department. Too much
attention is on trees/landscape. Too much time at meetings on this.
Hours and Hours of time are devoted to layout and design of sites and
when at the Planning Commission meetings, they spend most time on
trees /landscaping/fence.
• No. It took more than a year to get the job done. Also having a 3 car
driveway for a model is stupid as they all park in the street for the
parade anyway.
• My first meeting with the Assistant in the Planning Department was a
little off putting... Before I was even seated, I received the comment
"Just so you know, we are not making any changes for you... No
exceptions!" (The City Council was very welcoming and nice).
5. Based on your experience in Lakeville and elsewhere do you have any
suggestions for how the City could streamline or improve the procedures
for processing or reviewing your application or project?
a. Many respondents indicated the application review process was good and
had no suggestions for changes. (16)
b. Several respondents suggested keeping the sketch plan process and to
continue to hold meetings with staff in the early stages of the development
to make the Planning Commission and City Council review efficient. (4)
c. Some respondents suggested a more complete review of engineering plans
to reduce the number of resubmittals and a coordination of review
comments by the planning and economic development staff. (3)
d. Other respondents indicated the sketch plan process requires too much
information on plans. (2)
e. It was suggested several times the review process be revised to only require
City Council approval of final plats. (2)
f. Other individual comments included the following:
• The construction season in our area is short. Could it be possible to
hold extra PC or CC meetings to speed up the approval process when
needed? Can staff get "outside" review help when staff is too busy to
speed up the process?
• Need to be proactive.
• From my perspective I think the Engineering Dept. should recognize
that the market conditions have changed dramatically and they could
learn to be more flexible on their standards. Being an Engineer myself,
I realize some standards need to be maintained, but others are a waste of
money.
• You do a great job and are pro- business.
• Staff needs to be careful not to let their personal bias show through
during the development process. Staff needs to enforce City Ordinance
and codes and not reach for more. Need to think about the cost of items
that the City request/require during a development approval.
• Lakeville seems to over - emphasize their complex and bureaucratic
processes and ordinances. They seem to go out of their way to find
technical issues.
6. Do you have any specific suggestions on fees or costs imposed by City
ordinances which hinder or deter development? If so, do you have any
suggestions or examples from other cities on how these item(s) could be
paid for?
a. Respondents indicated the need to have the park dedication fee reviewed
according to current property values. (9)
b. Fees in general are an issue and should be reviewed. (9)
c. No /fees seem reasonable. (7)
d. Respondents also suggested the SAC and WAC fees need to be reviewed.
(4)
e. Road construction cost sharing was also suggested for roads that serve
traffic beyond what is generated by a particular development. (3)
f. Process for submitting and releasing letters of credit needs to be reviewed.
(3)
7. What aspects of the development review process does the City do well and
how could they be expanded or enhanced?
a. The majority of respondents indicated the current development review
process is done very well and staff is accessible and responsive to the
development community. (19)
b. Suggestions for improvements included the following:
• The sketch plan process and meeting in the early stages of development
should be continued.
• Streamlining the staff, Planning Commission and City Council review
process whenever possible.
• City needs to promote the community more to bring in development.
• More coordination between departments.
• Over kill to get a permit to pave our site.
• I think the review process is fine, but the policies and attitude toward
development could be "friendlier."
8. What other ideas or suggestions do you have that may assist in promoting
development in Lakeville?
a. Review fee schedule. (8)
b. None /City does a good job now. (3)
c. Consider cost share for road improvements and infrastructure costs. (2)
d. Suggestions included the following:
• Consider alternate methods to letters of credit.
• Planning Commissioners need to have a time limit as to how long they
serve on the Commission board. [Portions of this comment redacted
due to personal nature of statement].
• Need to engage with current business owners, find out why businesses
have left, what would bring them back, exit interview from businesses
who have left, have other businesses help City to bring more business to
Lakeville.
• The City needs to evaluate it's inflexibility with PUD's.
• Work with the School District to make sure they understand how
important a good stable school system is to residential development.
Example — Wayzata School District home sites still sell for over a
$100,000 a lot.
• Most cities today are willing to provide some form of subsidy to a
project to help get it off the ground. Multi - family density's in Lakeville
are too low for the majority of housing types being considered by
housing developers.
• Streamline some of the red tape! Make it a little easier.
Other General Comments Received:
Thank you for taking this progressive step. We all commend you for looking
for ways to better the process. I will say overall we are very pleased with our
dealings in Lakeville and please don't let these constructive comments diminish
the overall good. These steps you're taking are what make people, processes
and products go from good to great!
Thank you for asking for our input.
Again thanks for all the help and strong support from the City officials for some
six (6) plus years.
Comments from the June 15 Developer's Forum
Working Relationships:
• Need to have City and Developers work as a team and to have the City
listen more to the developer's ideas.
• City Control, lack of flexibility on development standards
• Need for City to develop a "servant attitude ".
• City tries to "extract" as much as possible from developer. Need to
develop a "happy medium" so that neither side "walks over the other ".
• Concern about an us versus them mentality
• Need to treat all developers the same.
• When the standards don't allow a specific course of action, look for
alternatives to accomplish the goal.
• Suggestion made that developer meetings are held very early in the
process to set expectations.
• Suggestion to publish a timeline of events to get through the process.
• Concern that the staff, Planning Commission and Council were not always
on the same page causing plans to change through the process.
Regulations
• Updating the zoning ordinance to allow for smaller lots was a positive
move.
• City should consider short term "interim regulations" until the "new
normal" comes back.
• MUSA staging is not necessary as this is a growth control measure. City
should consider a different approach to allowing sewer extensions.
• Now is not the time to make regulations more stringent
• City should review regulations on "taste" related items, such as color,
types of tip up panels, etc.
• Review parking standards such as townhomes for effectiveness and need.
• Consider reverting back to pricing and standards of 10 to 15 years ago
until the economy comes around again. Add a little more flexibility also.
• Review standards for residential lots along county roads to reduce cost or
change buffer standards and lot sizes.
• Review of environmental standards as they have grown through the
years.
• Look for ways to shorten the approval process.
• Look for alternative ways to meet the City goals by working with the
developers rather than create ordinance standards.
Infrastructure Financing
• More difficult to pay for the infrastructure, especially since banks don't
want to finance.
• City needs to share in financing infrastructure.
• Beneficiaries of the infrastructure are the properties next door so they
should be involved as infrastructure stakeholders.
• Whoever benefits from the roads should be involved in building them.
• Letters of credit need to be reviewed. Current practice is like being
financed twice for the same project.
• Find other ways to provide securities with the same level of assurance.
• The City asking for escrows from existing companies can be perceived
negatively.
Fees
• Lot prices are down, fees should go down too.
• Park fees need to be re- evaluated.
• In order to be in a competitive position, value needs to be attached to the
fee.
• The City of Lakeville doesn't need it's own electrical inspector, if the state
has one.
• Maybe more of the fees can be collected at the end, when the house is
sold. Timing of the fees should be reviewed.
Other
• Cash escrow for road upgrades. Why is there a need to pay for a road
that is not yet built?
• Stormwater ponding, regional ponds, etc. May be overdone.
• Need to try and reduce the levels of environmental regulation when it
comes to ponding, infiltration, rain gardens, etc. MPCA doesn't seem to
want to talk about the rules and regulations.
• Everyone is going through a cultural change right now.
• We shouldn't just throw everything out. Lakeville is predictable and that's
good. Maybe just a few tweaks here and there.
item No's
0 t City of Lakeville
Community and Economic Development
Memorandum
To: Economic Development Commission
From: Adam Kienberger, Economic Development Specialist
Copy: Steven Mielke, City Administrator
David L. Olson, Community & Economic Development Director
Date: July 6, 2011
Subject: Review of 2011 Commercial /Industrial Taxpayer Information
With the 2011 property tax statements and valuations now available, staff is
providing an update on the highest valued properties, top taxpayers, and top City
taxpayers in Lakeville for the EDC's information.
All three lists are being provided as a way to show how different types of
development compare and that the highest valued properties aren't always the top
taxpayers.
It should also be noted that when identifying a single "taxpayer ", all properties
owned by a business entity or like entity (i.e. Crossroads I, II, III etc.) were
combined to represent an aggregated total.
The three lists are compared side -by -side in the attached table.
Action Requested: None. This information is being provided in response to
discussion at previous EDC meetings regarding tax benefits of different business
types in the community.
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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
Date: June 23, 2011
Subject: June Director's Report
The following is the Director's Report for June, 2011.
Meeting Dates
The July 6th meeting will be the only EDC meeting for the months of June and July.
The next EDC meeting will be Tuesday, August 22 "
Building Permit Report
The City issued building permits with a total valuation of $22,363,980 through May.
This compares to a total valuation of $23,557,573 through May of 2010. The City
issued commercial and industrial permits with a total valuation of $3,444,500
through May compared to a total valuation of $742,000 through May of 2010.
The City has also issued permits for 44 single family homes through May with a total
valuation of $13,096,000. This compares to 65 single family home permits through
May of 2010 with a total valuation of $17,147,000.
Development Update
ImageTrend: A groundbreaking event has been scheduled for Monday, June 27
for the phase of the expansion of ImageTrend located at 20855 Kensington Blvd. in
the Fairfield Business Campus. This expansion is the first phase of two expansions
planned by ImageTrend and involve the development of the additional 3.39 acre
parcel that the City sold to the Company in 2009. ImageTrend has already met its
required job creation goal of 21 jobs since the land sale occurred. This two -story
addition is scheduled to be substantially completed by the end of the year.
Goodwill: An application for a building permit has been submitted to construct a
new Goodwill store to be located on Kenrick Avenue adjacent to the Minnesota Tile
building just west of the Comfort Inn Motel. Stonehenge Development will construct
the new 20,000 square foot store and lease it to Goodwill.
Spotlight on Business
Schmitty and Sons Bus Company located on Holyoke Avenue was spotlighted at the
June 20th City Council meeting and EDC member Tom Smith made the presentation.
A copy of the Council memo on this business is attached.
Foreclosure Update
Attached is a copy of the May Foreclosure Update from the Dakota County CDA.
There were 20 Sheriff Sales in Lakeville during the month of May which is the lowest
monthly total this year. This brings the number of Sheriff Sales to 124 for the first
five months of 2011. There were a total of 317 Sheriff Sales in Lakeville in 2010.
•
June 20, 2011 Item No.
Spotlight on Business
Schmitty and Sons
Overview
The Spotlight on Business program is designed to recognize new and existing commercial and
industrial businesses in the Lakeville community. Upcoming Spotlights this year will be
featuring a variety of businesses located in Downtown Lakeville. The program is also designed
to emphasize, for residents, the important tax and employment benefits that business and
industry provide to the community.
Schmitty & Sons will be featured at the June 20 City Council meeting. Economic Development
Commissioner, Tom Smith will present the information on Schmitty & Sons, and owner Dan
Schmitt will be present to accept this recognition.
Schmitty & Sons is a full service transportation company that has roots back to 1941 when
Wilfred Schmitt (Schmitty) began driving for the Orchard Lake Co -op, the local transportation
company at the time. The company was officially started in 1969 when Wilfred with son -in -law
Paul Leidner and John Schweich purchased another bus company, purchased additional buses
and expanded their fleet from one bus to 33 buses. Today Schmitty & Sons has over 100
school buses, handicapped accessible buses, Gray Line Tour buses, and transit buses.
While they are primarily known for the buses they operate for the Lakeville School District,
Schmitty & Sons also does everything from charter services, Gray Line Tours, airport shuttles,
to repair and maintenance. The Schmitty & Sons transit division includes: Minnesota Valley
Transit Authority (MVTA), Shakopee / Prior Lake BlueXpress and the University of St. Thomas
campus shuttle buses.
A true community partner, Schmitty & Sons works with non - profits, does charter work for
churches, and participates in the Summer Stretch Program. They also work with many local
businesses including Scruples, Menasha, and Despatch Industries.
As a leader in the transportation industry they are involved in Project Green Fleet where they
are retro- fitting existing exhaust systems on buses for cleaner emissions.
Schmitty & Sons also provides a job and tax benefit to the community. They employ
approximately 200 people including drivers and management staff and have focused on
maintaining local hiring practices.
A am Kienber
Economic Development Specialist
Financial Impact: $ 0 Budgeted: Y/N Source:
Related Documents (CIP, ERP, etc.):
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Dakota County OWNERS H
Community Development Agency a hstectioltl
CDA09060600*406060000*940
To: Dakota County Cities
From: Dan Rogness, Director of Community Revitalization
Date: June 15, 2011
Re: Foreclosure Update
HUD Emergency Homeowner Loan Program (EHLP)
The Dodd -Frank Wall Street Reform and Consumer Protection Act provided $1 billion to HUD to
implement the Emergency Homeowners' Loan Program (EHLP). The program offers a declining balance,
deferred payment "bridge loan" (non- recourse, subordinate loan with zero interest) for up to $50,000
to assist eligible homeowners who have become unemployed or underemployed due to the economic
downturn or a medical condition.
This loan will assist borrowers selected by lottery with payments of arrearages, including delinquent
taxes and insurance plus up to 24 months of monthly payment on their mortgage principal, interest,
mortgage insurance premiums, taxes, and hazard insurance.
Minnesota Housing Finance Agency (MN Housing) has applied on behalf of the State of Minnesota, which
includes Dakota County as a sub - grantee. Minnesota has been allocated nearly $60 million for 1,405
loans for Minnesota homeowners and administration of EHLP.
EHLP is designed to provide mortgage payment relief to eligible homeowners experiencing a drop in
income of at least 15% from involuntary unemployment or underemployment due to adverse economic
conditions and /or a medical emergency. Other EHLP eligibility requirements include:
Income Limit: Applicant has a total household income equal to, or less than, the greater of either
$75,000 or 120 percent of the Area Median Income (AMI) for a household size of four persons
($100,800 for MN Households) previous to loss of income resulting from involuntary unemployment,
underemployment, and /or medical emergency /serious injury.
Delinquency: Applicant must be at least three months delinquent on mortgage payments, as signified
by notification by their lender /servicer.
Likelihood of Foreclosure: Applicant must have received notification of their lender's /servicer's
intention to foreclose on their mortgage as a result of the delinquency, and must also certify to the
likelihood that their mortgage will be foreclosed upon.
Ability to Resume Payment: Applicant can be determined to have a reasonable likelihood of being
able to resume repayment of the first mortgage obligations within 2 years, and meet other housing
HOME
Dakota County OWNERSHIP
Community Development Agency C0 1:0P&
CDA 09600600096699*0000069
expenses and debt obligations when the household income rises above 85% of the previous level.
Principal Residence: Applicant must reside in the mortgaged property as their principal residence,
both at time of application and for the duration of the program loan period. The mortgaged property
must also be a single - family residence (I to 4 unit structure or condominium unit).
Timeline: EHLP grant applications were due on June 1, with funds to be awarded mid- to late -June 201 I. The
anticipated timeline of the program is July — Sept 30, 2011; all funding must be obligated by September 30.
Dakota County Stats — May 2011
• # of Sheriff Sales in May — 170 (compared to 191 in May 20 10)
• Total Sheriff Sales for 2011 — 874 (compared to 912 Jan. -May 20 10)
• # of Notices of Pendency Filed in May — 241
• Total Notices of Pendency Filed in 2011 — 1,294
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.
Mapping Using Dakota County GIS
http://gis.co.dakota.mn.us/website/dakotanetg�i*S/
The Dakota County Office of GIS is updating the 2011 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:
• Nationally, the foreclosure crisis may be getting worse. Various factors for delinquency, coupled
with flaws in the federal Making Home Affordable program and falling home prices have some
experts suggesting that up to 3 million more foreclosures may take place in the next 3 -4 years.
• Foreclosures decreased in April compared to a year ago, however, the decrease is likely due to
continued delays with the foreclosure process.
• As of January, at the current sales pace, there was a 27 -month supply of houses with mortgages
that were at least 90 days delinquent that had yet to hit the market according to a report
released in May by CoreLogic.
If you have any concerns, please call me at (651) 675 -4464 or send me an email at
drogness (&dakotacda.state.mn.us
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Page 1 of 2
Foreclosures falling in
Minnesota and U.S.
Article by: , Star TFibune
Updated: May 12, 2011 - 9:04 PM
Foreclosure activity in the United States has
fallen to a 40 -month low, according to a
report released Thursday by RealtyTrac, an
online marketplace for foreclosure
properties.
Filings in Minnesota also plummeted, falling
20.5 percent from March -- the ninth -
biggest drop in the country -- and 19
percent from last April.
Nationwide, RealtyTrac reported a 9 percent
decrease in foreclosure filings from March
and a 34 percent decrease from April 2010.
Unfortunately, the slowdown is not the result
of an improvement in the market, executives
said. "This slowdown continues to be largely
the result of massive delays in processing
foreclosures rather than the result of a
housing recovery that is lifting people out of
foreclosure," RealtyTrac CEO James Saccacio
said in a release.
According to RealtyTrac's data, the
foreclosure process in Minnesota is taking
nearly two months longer than it did a year
ago. Minnesota is averaging 204 days from
foreclosure start to completion, up from 148
days a year ago. The U.S. average is 400
days up from 340 days last year.
John Patterson, research director for the
Minnesota Housing Finance Agency,
cautions that foreclosure numbers can
change a lot from month to month. "We still
have a lot of problem loans to work our way
through," Patterson said. "We are not out of
the woods yet."
The agency is the state's affordable housing
bank and offers products and services to
help Minnesotans buy and fix homes. To
gauge the health of the state's housing
market they focus more on delinquency rate
for residential mortgages. Though their
most recent report showed delinquency
rates declined during all four quarters of
2010, 3.4 percent of mortgages were
delinquent in the fourth quarter, still very
high by historical standards.
Minnesota, was ranked 21st in total number
of foreclosure filings with 2,646 and with 1
in every 882 housing units in the state
receiving a foreclosure notice according to
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�I n't it i
RealtyTrac. Minnesota's rate of foreclosure
filings ranked 23rd. Ten states accounted f
or 70 percent of total foreclosure activity,
lead by California, Florida, and Arizona.
Nevada had the highest rate of foreclosure
filings in April with 1 in every 97 housing
units receiving a notice during the month.
Patrick Kennedy • 612 - 673 -7926
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nt T o , �
Page 1 of 2
More metro homes risk
default
Article by: , Star Tribune
Updated: May 18, 2011 - 10:00 PM
The supply of foreclosure listings in the
Twin Cities isn't going away anytime soon.
As of January, at the current sales pace,
there was a 27 -month supply of houses with
mortgages that are at least 90 days
delinquent that have yet to hit the market,
according to a monthly sales report released
Wednesday by CoreLogic.
While not all of those houses will go into
foreclosure, tracking the number of
homeowners who are at risk of going into
default because they owe more on their
mortgage than the house is worth provides a
glimpse at the housing market at least in the
short term.
By that measure, there's still significant risk
in a housing market already beaten down by
foreclosures. Prices have fallen dramatically
so far this year, to the lowest point in more
than a decade, as about half of all home
sales in many months are either
CoreLogic said that in the Twin Cities 17
percent of all homeowners with mortgages
were underwater; nationwide the average
was 23 percent.
Sam Khater, a senior economist with
CoreLogic, said that while both indicators
have remained fairly stable during the past
several months, the relationship between the
two numbers provide a critical -- and
sobering -- look at a housing market that's
still ailing. "Both [indicators] are
uncomfortably high and both are consistent
with a market that is still distressed even
four years into the housing downturn."
CoreLogic vs. Zillow
The CoreLogic numbers were significantly
better than one released last week by Zillow.
com, which said that nearly half of all
mortgages in the Twin Cities area were
underwater -- significantly higher than its
national average of 28 percent. Khater said
the discrepancy between the two reports,
which are based on public records, has to do
with methodology. The CoreLogic data take
into account how much the original debt on
the home would likely have been paid down.
Zillow, meanwhile, looks at "the total amount
of mortgage[s] and loans taken out at the
time of purchase, and comparing that to our
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nt
= _:�
current valuation of the home," according to
its economist Stan Humphries on his blog.
CoreLogic includes all housing types in most
metro areas throughout the country. Zillow
tracks only single - family houses, but that
shouldn't matter too much in a market like
the Twin Cities that's dominated by single -
family houses.
The discrepancy between the two reports
highlights the complications and often
conflicting outcomes that arise when the
data are processed differently.
"It's indicative of the fact that for a lot of
these estimates, the methodology matters,"
Khater said.
Jim Buchta • 612 - 673 -7376
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aiL msnbc.CfJ1'Y'1
No end in sight to foreclosure quagmire
A special Nightly News /msnbc.com report on the mortgage mess
Zandi.
By Lisa Myers, Rich Gardella and John W.
Schoen
NBC News and msnbc.com
updated 5/9/2011 7:28:34 AM ET
Four years after a wave of rogue mortgage
lending sent the U.S. housing market into the
worst collapse since the Great Depression, the
devastating flood of resulting foreclosures
shows no sign of abating. In some ways, the
problem is getting worse.
House prices are falling again, forcing more
homeowners "underwater" — owing more
than their house is worth. Lenders' shoddy
document practices have brought widespread
court challenges, slowing the process and
leaving millions of homeowners in limbo.
And the foreclosure crisis continues to weigh
heavily on the fragile economy.
"Right now, it's the second - biggest drag on the
economy after the surge in oil prices," said
Moody's Analytics chief economist Mark
Already some 5 million homes have been lost
to foreclosure; estimates of future
foreclosures range widely. Zandi, who has
followed the mortgage mess since the housing
market began to crack in 2006, figures
foreclosures will strike another three million
homes in the next three or four years.
Congress and the White House have run out of
ideas to save those homes, he said.
"There's no political appetite to do anything,"
he said. "So we're on our own."
Story: Here's how to get help with your
mortgage
There were many causes of the foreclosure
crisis — and plenty of blame to go around
among mortgage lenders, regulators and, in
some cases, the borrowers themselves. But as
the crisis has accelerated it also has swept up
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families who, through no fault of their own,
have lost or are in danger of losing their
homes.
The government's efforts to stem the crisis are
widely viewed as a failure. Its flagship
foreclosure relief program, the Home
Affordable Modification Program, has been
hampered by confusion over its terms,
lenders' widespread refusal to forgive loan
principal and a "trial modification" process
that, in some cases, leaves homeowners worse
off than when they entered the program.
"The biggest problem with the program is that
noncompliance is still rampant, and it's not
improving," said Alys Cohen, an attorney with
the National Consumer Law Center, which is
lobbying for more effective foreclosure
prevention programs.
Page 2 of 5
The government has repeatedly tried to offer
effective solutions. Recent federal budget cuts
have made matters worse by eliminating
funding for frontline housing counselors, who
are already spread thin in their efforts to help
homeowners.
Vote: Who's to blame for the mortgage mess?
Despite the heavy toll on families, communities
and the economy, the response from
Congress, the White House and an alphabet
soup of federal and state agencies has been a
piecemeal approach that hasn't fixed the
problem.
"This is an industry that was simply not
prepared for this crisis, hasn't had the
procedures in place, hasn't had the people to
deal with it," said Tim Massad, who oversees
HAMP as acting assistant secretary for
financial stability at the Treasury Department.
"And we've seen that over and over again. I
think they're better, but they're not nearly
where they need to be."
Federal bank regulators, citing widespread
"unsafe and unsound practices," recently
announced a series of new regulations for
lenders to follow to try to fix the problem.
Critics argue the new rules don't go far
enough and merely codify changes the
industry already is making.
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• i
Bankers have agreed to review their practices
and report back to regulators with a plan to fix
them, for example, but those reports won't be
made public. They also agreed to hire their
own auditors to look into cases where
homeowners were wrongly foreclosed.
The House recently voted to scuttle HAMP,
which has dispersed only a fraction of the $50
billion Congress authorized in 2009. There are
no signs the Senate plans to follow suit,
although the program officially ends next year,
banks work through a thicket of legal
challenges to faulty document practices.
The glut of unsold homes and the overhang of
foreclosures are weighing on the housing
market. Construction of new homes has fallen
to levels never recorded. Government tax c
redits for home buyers briefly helped
stabilized home prices, but prices have begun
falling again as those incentives have expired.
Falling home prices chip away at household
wealth, dampening consumer spending.
In the Senate, Jack Reed, D -R.I., has
reintroduced a bill that died last year which
would toughen requirements on lenders to
modify loans. Democratic Sen. Sherrod Brown
of Ohio has introduced a bill that would
include a range of consumer protections for
mortgage borrowers. Neither bill has made it
out of the Banking Committee.
Other agencies are pressing mortgage lenders
to break the logjam. Attorneys general from all 5
0 states — along with the Justice Department,
the Federal Trade Commission and the new
Consumer Financial Protection Board — are in
talks with major lenders that would require
them to follow steps that are currently
voluntary, including modifying loans by writing
down the principal owed. Bankers have raised
numerous objections to the initial proposals.
The Treasury continues to tweak the HAMP
program. It recently introduced a requirement,
for example, that lenders assign a single point
of contact to help homeowners cut through a
thicket of red tape.
Yet families continue to lose their homes at a
pace not seen in decades. Last year set a
record for foreclosures, according to
RealtyTrac. The pace slowed in the first
quarter but is expected to pick up again as
Each new foreclosure brings another
distressed property on the market, pushing
prices lower. The greatest risk, said Zandi, is a
downward spiral that becomes difficult to
unwind.
"Prices decline, that pushes people
underwater," he said. "There's 14 million
people now underwater. Half of those are
underwater by more than 30 percent. That's
the fodder for (more) default."
The depression in the housing industry, which
accounts for up to 20 percent of U.S.
employment in good times, has stalled
economic growth and contributed to a
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t'Y1snbc.com
stubbornly high jobless rate of 9.0 — far
higher than is typical this far into a recovery
With effective solutions in short supply,
attorneys and housing advocates say the
ranks of distressed borrowers continue to
swell.
"I've never seen a flood like this," said Gary
Klein, an attorney at Roddy, Klein and Ryan in
Boston who has spent 25 years defending
homeowners facing foreclosure. "There are so
many people that need help at this point that
we can't even begin to handle all of the phone
calls."
that they need in order to qualify for that
modification," said Chris Wyatt, a former vice
president at a major mortgage loan servicing
company who has worked in the industry for
20 years. "They meet all the criteria for that
modification, yet were denied. So the customer
actually gets caught into this kind of Catch -22,
and at the end of the day the servicer says,
'Sorry, I can't do them all, and so I'm going to
foreclose. "'
Government officials compounded the
problem by setting overly aggressive targets
for the program and then pressing mortgage
servicers to show quick results.
The companies tasked with collecting
payments from borrowers are just as
overwhelmed. More than four years after the
housing bubble burst, the mortgage servicing
industry is grappling with its own
dysfunctional thicket of red tape, missing
documents, false affidavits and conflicting
guidelines.
"We are finding that the documents themselves
are manufactured," said James Kowalski, an
attorney in Jacksonville, Fla., who handles
foreclosure defense and prevention. "We're
finding that the affidavits, which are the pieces
of paper by which the servicer testifies in
court, are not true. Once you get underneath
the surface of all those made -up documents,
you find homeowners that shouldn't be in
foreclosure."
In many cases, homeowners who were
granted a "trial" modification under the HAMP
program wound up worse off. Unless they
won final approval, the lower monthly
payments during the "trial" period placed them
in default and speeded the path to foreclosure.
"I've seen homeowners that have everything
"They would do anything to get trial
modifications on the board," said Caroline
Herron, a former Fannie Mae official who
worked as a consultant to HAMP. "Nobody
made it a priority to figure out what the real
problem was, and what needed to get fixed to
make sure the program could work. Instead, it
was pressure to report on findings and
pressure servicers to bring the numbers up."
For their part, mortgage servicers say they
were stymied by repeated revisions in the
rules once the HAMP program started, which
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made it harder to follow shifting guidelines.
Treasury's Massad admits the system was
flawed and created frustration on both sides.
"We certainly acknowledge we haven't done as
much as we would like, he said. "But I think
the fact remains that people have a lot more
options because of this program than they did
before we started. And the program has
changed the way the industry approaches
modification so that we're seeing a lot more
modifications than we otherwise would have."
n 1011 msnbe com Reprints
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Finance & Commerce > Print > Cassidy Turley sees office, industrial markets improving ... Page 1 of 2
Finance & Commerce
: / /finance - commerce.com
Cassidy Turley sees office, industrial markets improving (updated)
by Burl Gilyard
Published: June 8th, 2011
Happy days may not quite be here again. But brokers and
landlords are feeling a little better about the outlook for
commercial real estate these days.
Some fresh numbers from the Minneapolis office of the St. Louis -
based Cassidy Turley reveal some concrete, encouraging signs for
the local office and industrial markets.
Cassidy Turley reported 351,472 square feet of positive absorption
in the office market during the first quarter, amid an uptick in
office leasing. Absorption, a standard gauge of the health of
commercial real estate markets, measures the change in occupied
space from one reporting period to another.
The vacancy rate for office space across the Twin Cities dropped to
18.8 percent, down from 19.3 percent at the end of 2010,
according to the company's report.
Slightly more than half of the absorption noted in the report -
183,624 square feet - was in downtown Minneapolis. Cassidy
Turley reports a 17.2 percent vacancy rate in downtown
Minneapolis, lower than the overall market vacancy.
"We're seeing more activity than we have in a long time," said Dick Keller, senior vice president
and principal with Cassidy Turley. 'It's apparent that we're seeing some solid activity on all
E fronts."
Cassidy Turley's report notes that vacancy in Class A space downtown is hovering near 10
percent. Keller said it has been about a decade since downtown Minneapolis has seen a single -
digit vacancy rate for any class of space.
Downtown Minneapolis deals of note included leases signed by Nuveen Investments and Syncada
LLC at the AT &T Tower, which together represented about 102,000 square feet of new leases for
the tower, and Eide Bailly's deal for about 40,000 square feet at the U.S. Bancorp Center. In the
latter deal, the accounting firm is relocating from Bloomington to downtown Minneapolis.
Veteran office broker Russ Nelson, president and principal with the Minneapolis -based tenant
representation company Nelson, Tietz & Hoye Inc., said that he is seeing more activity in the
local office market but that it's not a flood of deals.
"I think there's very modest growth," Nelson said of the office market.
But Nelson added that the office market is seeing the effects of companies using less space per
employee these days.
"You are getting the impact of the alternative work strategies that some companies are
employing," Nelson said. "Sometimes you have less space that's required ... because the space is
used differently."
For the industrial market, Cassidy Turley reported absorption of 514,647 square feet in the first
three months of the year. The vacancy rate for industrial space dropped to 12.7 percent at the
end of the first quarter, according to Cassidy Turley. That was down from 13.2 percent at the
end of the fourth quarter.
Some large national real estate investment trusts (REITs) with notable local portfolios have
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The AT &T Tower in
downtown Minneapolis
landed two tenants in
deals totaling about
102,000 square feet. (File
photo: Bill Klotz)
Finance & Commerce > Print > Cassidy Turley sees office, industrial markets improving ... Page 2 of 2
previously reported rebounding deal activity. Malvern, Pa. -based Liberty Property Trust in
February bought a 55 -acre site in Rogers where it plans industrial development. Indianapolis -
based Duke Realty Corp. began to see industrial leasing activity pick up in late 2010.
But one local industrial broker said he is seeing many companies cut short-term deals for space
that's needed on a temporary basis.
"I think we've seen more absorption than anticipated because month -to -month deals count as
absorption," said Ted Carlson of the Edina -based Carlson Commercial. "There's a
disproportionate amount of short-term users in the market right now."
Carlson said that can give a mixed reading on the health of the industrial market.
"I think in general the market is a little healthier than you would think given the state of the
economy, but a lot of the numbers are skewed due to short-term deals," Carlson said.
Real estate market statistics can be sliced and diced in many ways. If a 50,000- square -foot
tenant moves from Building A to Building B but takes the same amount of space, there's no new
absorption as a result of the deal. The lease draws attention, as the tenant leaves behind empty
space.
But if Building A was in the southwest suburbs and Building B was in downtown Minneapolis, it
shows up as negative absorption for the southwest suburbs but positive absorption for downtown
Minneapolis.
Despite some positive trends, most market watchers still think it will be some time before
developers can start building multitenant office towers in downtown Minneapolis. A separate
market report from Bloomington -based NorthMarq reported that the average net rental rate for
Class A space in downtown Minneapolis at the end of 2010 was $14.68 per square foot.
"It will take [net rental] rates of $24 to $25 a square foot to justify new construction, and we're
not anywhere near that at this point," Keller said.
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Stalled developments strain city budgets I StarTribune.com
Kt; 10 111 il! I I I
Page 1 of 5
Stalled developments
strain city budgets
Article by: , Star Tribune
Updated: June 8, 2011 - 7:03 AM
Curved street lamps, each decorated with a
Blue Heron, line the sidewalks winding past
empty fields that were supposed to become
a downtown for Lino Lakes. There's an
apartment building and an assisted living
facility. But the rows of townhouses that
were supposed to anchor the project, called
Legacy at Wood's Edge, never happened.
The developer defaulted. The bank
foreclosed. Then the bank collapsed. About
22 acres of Legacy at Wood's Edge slid into
tax forfeiture, and the land is now owned by
the state.
And Lino Lakes?
The Anoka County suburb is left holding a
$5.6 million bond it sold to investors to help
finance Legacy's streets, sewers and lights.
The community had counted on taxes
generated from the developed property to
cover the bond. Now, to pay the $535,000
dipping into other parts of its budget,
primarily water and sewer funds.
"We've never experienced an economic
downfall like this in the last 70 years," said
Lino Lakes finance director Al Rolek.
Already reeling from deep cuts in state and
federal funding, a number of Minnesota
communities are facing yet another hit:
unexpected payments on bonds they issued
in better days. The bonds financed real
estate improvements -- from street lights to
parking garages -- for sometimes grandiose
developments that went unfinished or never
materialized at all. The unanticipated debt
has some local governments mulling tax
hikes or rate increases for city services;
others are delaying capital improvements or
cutting jobs.
Waconia, in Carver County, eliminated 10
city positions as it struggles to pay bond
debt on a development that barely got going.
Avon, near St. Cloud, boosted property t
axes and has put its capital improvements
plan on hold in order to pay off bonds for a
huge subdivision that just never happened.
Albany, also near St. Cloud, cut a deal with a
developer facing $1 million in assessments,
agreeing to discount the debt if he just paid
it all off.
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�1 M, Tolul
Page 2 of 5
"Dozens and dozens" of communities are
grappling with how to pay off similar debt,
said David Drown, a financial consultant who
works with cities outside the metro area. Nor
will the fiscal pain go away anytime soon. If
development doesn't pick up, he said, "lots
and lots of people are going to have
problems."
Wave of stress
Local governments use municipal bonds --
"muni bonds" as they're commonly known --
to finance such public basics as roads and
sewers. They're mostly held by individual
investors who like them because they're safe
and generate tax -free income. Like the Lino
Lakes Legacy bond, most of the 500 to 700
muni bonds issued in Minnesota each year
are so- called "general obligation" bonds,
backed by the full faith and credit of the local
government and taxpayers.
No one expects a wave of cities in Minnesota
defaulting on general obligation muni
bonds, although Meredith Whitney, an
independent financial analyst, touched off a
national panic over the winter when she
speculated on national television that there
would be at least 50 sizable muni bond
defaults around the country amounting to
"hundreds of billions of dollars."
The warning sparked fears that muni -bond
stress, like home mortgage defaults, might
somehow cascade into a broader financial
crisis. Those fears now appear overblown.
David MacGillivray, head of Springsted Inc., a
St. Paul company advising many Minnesota
cities on financial issues, said he sees a wave
of stress, not defaults, in Minnesota as such
towns as Lino Lakes scramble to pick up the
tab for bonds.
"Lino Lakes is not alone," MacGillivray said. "I
don't think we're at the end of the wave."
Since 1980, nearly all of the 130 muni bond
defaults in Minnesota have been a different
type of bond called a revenue bond that's
not secured by local governments, but by
the projects themselves, according to
Richard Lehmann, head of Income Securities
Investor Inc., and an expert on distressed
municipal debt. Cities and taxpayers aren't
on the hook for those bonds; it's bond
investors and developers who lose their
money.
Avon Estates: One house
Avon Estates was envisioned as a 307 -acre
subdivision with some 500 homes outside
Avon -- a big leap for a small farm town-
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Stalled developments strain city budgets I StarTribune.com
�i rt
Page 3 of 5
turned - bedroom community of about 1,300
people.
In 2007, the town issued two bonds totaling
about $6.5 million to lay out water, sewer
and streets for the 20 -year project. The
developer, a group of investors called
Percheron Properties guaranteed a portion o
f the special assessments with letters of
credit from its banks. But by the time the
land finally was annexed and the project
underway, the housing market was turning.
"By the time they put the asphalt down, I
already had a bad feeling in my stomach,"
said Mayor John Grutsch.
With just one home built, Percheron folded.
Earlier this year, Avon bought the bankrupt
development from the bank for $220,000,
hoping to eventually sell off parcels and
make some money. That might sound like a
bargain if the town wasn't on the hook for $6
million in special assessments.
To free up the funds for the $400,000
annual bond payment, the city had to
renegotiate other debt. Eventually, Avon had
to increase its city tax rate about 4.8
percent.
The town may still need to consider other
such options as boosting water rates.
Capital improvements are on hold, meaning
such projects as street resurfacing have to
wait. So far, the strategy is working, said
Drown, the consultant who advises Avon.
"This is really all going to depend on how
quickly the housing economy turns around."
Financial triage
When the Carver County town of Waconia
issued a $17 million general obligation bond
in 2007, about half of it went to building
roads and laying out utilities for Interlaken, a
subdivision from developer Plowshares
Development Inc. The bond was secured by
special assessments guaranteed by the
developer's lender, Lakeland Construction
Finance. With just a fraction of Interlaken
finished the following year, Plowshares
stopped paying the assessments.
Then Lakeland filed for bankruptcy.
Waconia was left with an unexpected bill for
Interlaken's share of the bond: $650,000 a
year -- a hefty sum for a town with a general
budget of just $5 million, said city
administrator Susan Arntz.
In 2009, Waconia issued a one -time levy for
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the money. Then, it dug into the town's
capital improvements fund for the rest, a
major factor in the budget crunch that
forced the town to eliminate 10 city jobs and
send other workers on unpaid leaves.
Unlike Waconia and Avon, Lino Lakes didn't
require a guarantee of the assessments. The
city didn't think it would need it because the
developer was so successful, said Rolek, the
city's finance director. Jack Brandt and his
Hartford Group Inc. had carved a niche
during the housing boom with big mixed -
used "Legacy" projects.
In the end, the letter of credit wouldn't have
mattered since Brandt's lender, loan
syndicator BankFirst, also known as Marshall
Group, toppled.
Facing large debt payments, the suburb
dipped into water and sewer funds, a
common way to fix municipal cash flow
issues, Drown said. Those funds typically
generate surpluses, in part as insurance
against big- ticket equipment problems.
But the city, which said the payments haven't
disrupted any services or affected any rates,
needed new options -- beyond property tax
hikes.
The Legacy project was in a tax - increment
financing (TIF) district that wasn't working. A
different TIF across the street was
generating revenue, but it was about to
expire. (In TIF districts, extra property taxes
generated from a development- driven rise in
property value are used to defray the
company's development costs.)
So Lino Lakes asked state lawmakers to let it
extend the tax district for another 10 years
-- or until someone comes along to develop
Legacy. If approved, that will raise about
$173,000 a year for its $535,000 -a -year bill
on the Legacy bond.
Not everyone is applauding. Even Rep. Linda
Runbeck, R- Circle Pines, who coauthored the
bill for Lino Lakes, called the TIF strategy a
necessary evil, better than going to
taxpayers. "Either way, I guess taxpayers are
going to experience the problem," Runbeck
said.
That's what riles Rep. Ann Lenczewski, DFL-
Bloomington. To Lenczewski, Lino Lakes is
asking the Legislature to bail it out, allowing
it to use a taxing district that's little
understood by the general public instead of
dealing with its shortfall head on.
"The honest way is to put all of the mistake
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on a levy," Lenczewski said. "The easy way
out is to come to the Legislature."
Meanwhile, the state owns the forfeited
Legacy at Woods Edge land, and Anoka
County is figuring out what to do with it. The
county estimates that whoever buys it will
have to fork out about $5.1 million worth of
penalties, interest, tax and special
assessments.
"We're waiting for some developers to come
out of the woodwork," said county finance d
ivision manager Cevin Petersen. "Right now,
commercial development is just on a flat -line
hold."
Jennifer Bjorhus • 612 - 673 -4683
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