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HomeMy WebLinkAbout02.20.13 EDA Orientation o ‘INGIROW Farmington AGENDA ECONOMIC DEVELOPMENT AUTHORITY ORIENTATION MEETING February 20, 2013 6:00 P.M. COUNCIL CONFERENCE ROOM 170 Todd Larson, Douglas Bonar, Geraldine Jolley, Steve Wilson, Kirk Zeaman 1. Welcome and Introductions 2. EDA Finances—Robin Hanson will be at the orientation discussing the 2013 budget and reviewing examples of the monthly bills included in EDA packets. 3. Economic Development Authority Handbook 4. Authority of the EDA—MN State Statute 5. City Code—Economic Development Authority- Title 2 Chapter 8 6. Organizational Matters a. Bylaws—Discussion of 2012 Bylaws b. 2013 Meeting Calendar(Dates- Bank Summit, Business Attraction Team) 7. 2030 Comprehensive Plan and Zoning Map 8. List of Available Buildings and Land 9. 2012 Goals and Accomplishments—A list including new businesses, expanding businesses,programs, and achievements. 10. EDA Regular Meeting—February 25, 2013 EDA Programs Review • Economic Development Strategic Plan • MCCD—Open to Business Program • Business Retention and Expansion Program- Business Visits • Business Attraction Plan—Proposal, Timeline • GROW Farmington • "Buy, Live Local"Campaign • CDBG Programs • Business Subsidy Policy o Draft Tax Abatement Policy o Draft Business Incentive Program • Bank Summit—March 20,2013 • Dakota County CDA-Economic Development Professionals Monthly/Bi-Monthly Meetings 8 c F. c c o ,Q J O O. Q O d co g, c c1) O O 00 oI E O : : _111.7 * .a 1. ' ON . . NON N ' 0 ' ' O 0000 ' ' ' O ' 0 ' 0 O r ...rCO haw, LC) O O N 0 0 0 N 0 0 W C B C t` ON (OWN N N N N Od'O (0 0 0 O O W O d• O O d)0 0 O N N o0 N r r O O O tim 'au N -N NVN N r In O d r r r as DO m2 L.M N a - 0 �} (fl ti, (fl EA d9 U a) a d-' V' ' MN 11 NON N ' o l i o 0000 ' ' ' O ' OOO O .c CO 'C7 r W N CO O ll) 0 0 N 0 0 0 N 000 CO V M 04' N OS COON N N N N O'd'O CD °LOW O C Q. 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N ,o a) 3N c `ma 3 0 'N CI o > ) > a) � . � cam ._CO fl C C N C N C C 'm E as C p ► (n w 2 o = o 7 N gyp+ C E CO co ui.0 ui co (Dm N p C U ca") a) p as > N p c 00 :- CCD E C a j p 5 ° .0 C 't) f0 'C. 0 0 0 0 -a ° N 0 N 0 (n 0 ac) 0 c Cl) 0 c m •c c < 2 c o ^ c4 0- m Ii `- c I...a co .Q Va am.04° O) a(Ni s Ca 2 cri2) as ._ s .n v 2 mZi E 1.-i E a 2 { co CO j 0. $ c c c m ) Es 0) 5. \ � $ x x CO k - 0 a) c C) E 0 8 $ ■ c E 5 C C ■ co a E 0_ w w w to 2 a) � . -8 k 2 0 o 0 o •C \ q 2 q £ ro U o C O 0) k & : 2 CO CO co f o L 2 2 -11.2• ° .c 22 k 0 c o o _ « CO 2 • o 2 \ T) -o t a > c ( CO 3 - a£ £ ECONOMIC DEVELOPMENT AUTHORITY HANDBOOK October 2011 MINNESOTA A.POSITIVELY ECONOMIC DEVELOPMENT Arati,050.A. FOUNDATION Building Stronger Minnesota Communities Dapadmani ofEmrtaymnt and Emote D.vetapntend Mir A. PREFACE In these uncertain economic times, it is more important than ever for cities to develop and utilize sound economic development procedures and practices to address an ever more complex and changing marketplace. This handbook has been prepared as a guide to assist local economic development leaders to utilize their limited resources in the best practical manner. Furthermore, this handbook seeks to ascertain methods in which one can better set up one's EDA to make it more efficient and effective in utilizing scarce resources. The key to successful economic development is communication with local businesses to learn of their needs and concerns, and to determine how to best use the community's resources to address those concerns. Throughout my career in various economic development roles, I have seen, firsthand,just how vital development tools such as EDAs, Housing and Redevelopment Authorities, and Port Authorities can be to a community in building a vibrant business climate and in generating significant employment opportunities. Early in my career at the Region Nine Development Commission, I would have given anything to have a document such as this to utilize! As a Business Finance Specialist with the Minnesota Department of Trade and Economic Development (now MN DEED) I was able to see directly just how important EDAs are to local communities and how they could be utilized to great effect by cities in Southern Minnesota. In addition, the ability to utilize EDA powers significantly benefited economic development through my tenure as Community Development Director in the City of Roseville and as City Administrator for Oakdale. In both communities, I found the use of an EDA (or similar authorities)to be an invaluable tool in many development and redevelopment projects. I would like to offer special thanks to a number of individuals for their hard work and dedication in updating this handbook. I would especially like to thank Mary Ippel from Briggs and Morgan for her experience and for her extensive help preparing this handbook. I would also like to thank the City of Oakdale staff including Assistant to the Administrator Dave Schaps, for coordinating the update of this handbook and compiling the information, and Intern Devin Swanberg for conducting the background research. In addition, my thanks to the Minnesota Economic Development Foundation for funding this project, the Minnesota Department of Employment and Economic Development for its review and subsequent publication of the handbook, and the Economic Development Association of Minnesota for its review of the handbook. We hope this guide will help you in your own economic development endeavors. Now go out there and create jobs and develop that tax base! Sincerely, Craig A. Waldron, City Administrator, ICMA-CM City of Oakdale ACKNOWLEDGEMENTS The Minnesota Economic Development Foundation would like to thank and acknowledge the efforts of Mary Ippel of Briggs and Morgan and the City of Oakdale staff on the writing and compiling of the information contained in this document. r � * ; o Oakdale www.ci.oakdale.mn.us BRIGGS B R I G G S AND M O R G A N`° PROFESSIONAL ASSOCIATION www.briggs.com ii TABLE OF CONTENTS Preface i Acknowledgements ii Introduction to Local Economic Development Organizations 1 Business Organizations 1 Development Corporations 1 Government Organizations 2 Formation and Operation of Economic Development Authorities (EDA) 4 Reasons for Forming an EDA 4 Procedures for Establishing an EDA 4 Board of Commissioners 7 Officers,Duties and Organizational Issues 9 Powers of EDAs 16 General Powers and Purposes 16 Specific Powers 17 Financing and Bonding Powers 23 Limitation of Powers 25 Glossary 27 Tables 30 Sample Bylaws and Enabling Resolutions, 34 Sample Job Description 48 Sample Revolving Loan Fund Policy 51 iii NOTICE The Minnesota Economic Development Foundation, the Minnesota Department of Employment and Economic Development, the Economic Development Association of Minnesota, and the authors and editors of this publication have used their best efforts in preparing this publication, and they make no representations or warranties with respect to the accuracy or completeness of the contents of this publication and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. The advice and strategies contained herein may not be suitable for your situation. Any interpretations and opinions are not intended to reflect any position of the Minnesota Economic Development Foundation, the Minnesota Department of Employment and Economic Development, the Economic Development Association of Minnesota, or the law firms,branches of goverment, or organizations with which the authors and editors are associated, unless they have been specifically adopted by such organizations. If legal advice or other professional assistance is required, the services of a competent professional person should be sought. iv INTRODUCTION TO LOCAL ECONOMIC DEVELOPMENT ORGANIZATIONS There are several types of organizational structures available for community economic development programs. The type of organization that a community decides to establish is dependent on the special activities that are targeted. In some communities, business development and job creation are the primary goals, while others have housing development as a priority. Many communities have existing community economic development groups. There are several different kinds of organizations available that focus on economic growth. The type of growth that a community wishes to achieve will dictate what type of group will be formed. In addition, the purpose and creation of the organization will impact the statutory powers available to the entity. Each of these organizations may focus on different issues such as housing development, creation of jobs, and business development. The majority of community groups focus on economic growth opposed to housing growth. Outlined below is a brief description of each type of development organization. Business Organizations Commercial Club: Usually an incorporated 501(c)(4) or (6) organization whose purpose is to promote community and retail events. This group is usually made up of local retail owners and owners of local businesses. This is an unpaid organization consisting of volunteers and has no staff. Chamber of Commerce: A chamber is an incorporated non-profit 501(c)(4) or (6) that is generally affiliated with the state and national chamber of commerce. The chamber consists of local business professionals of the community who meet together to promote local businesses and the community. Generally, they have an elected board with limited staff. Larger chambers often deal with tourism and overall business development of the community. They sometimes are politically active and can be a powerful lobbying force when dealing with policy that affects the community's economic strategy. Chambers are generally active and can hold educational and other events for local businesses. Development Corporations For-Profit: A corporation formed to develop and sell industrial land and/or provide financing for business development within the community. Local investors can buy shares that can be paid in dividends from profits made on projects. Money invested in corporations can be repaid to the stockholders. The board is made up of shareholders and may or may not have staff. The corporation is subject to federal and state income tax. Non-Profit: A corporation formed to develop and sell industrial land and/or provide financing for business development in the community. Shares are sold or funds may be raised in other ways. No dividends are paid on shares. The non-profit corporation must obtain either 501(c)(3) or 501(c)(4) status from the IRS. Donations made to a 501(c)(3) by both individuals and 1 businesses are tax deductible. Obtaining 501(c)(3) status can be difficult, expensive and time- consuming and many communities are not willing to go through the lengthy process. Although 501(c)(4) status is less difficult to obtain than 501(c)(3) status, only a business may make contributions that are tax deductible, individual contributions are not eligible for the tax deduction. Also, organizations with 501(c)(3) are prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of or against any candidate for elective public office. Government Organizations Economic Development Commission: A board used to advise a City Council, appointed by the Mayor and/or City Council. It has limited or no decision making authority and is used as a sounding board or a first point of contact for the City Council on development projects. The commission is used to draft strategies and policies for ratification and implementation of local plans on a volunteer basis. Housing Redevelopment Authority (HRA): An HRA is a public corporation with power to undertake certain types of housing and redevelopment or renewal activities. While state legislation conveys authority for housing and redevelopment in each City, it is up to the City Council to formally establish an HRA before it can do business and use its powers. Once a council legally establishes an HRA, it may undertake certain types of planning and community development activities on its own with council approval. Port Authority: This is a legal entity created by the State Legislature to promote the general welfare of a City's port district, increase the volume of commerce in the port and provide facilities for handling, storage and shipment of freight. The Port Authority actively develops commerce within the City and can enable business location and expansion. The powers of a Port Authority are more expansive then those of an HRA or an EDA. The State Legislature authorizes the creation of Port Authorities. A Port Authority is a separate political entity with the right to sue and be sued in its own name and is generally organized to increase commerce in a City. Unlike EDAs and HRAs, a Port Authority may issue general obligation bonds without holding an election. Joint Powers Board: This is a board created by multiple Cities, Townships or Counties for a certain purpose, such as economic development. The agreement between the units of government would specifically describe activities and powers that the board exercises in carrying out its duties. Economic Development Authority (EDA): An EDA is a legal entity created by a City or a County to facilitate a well-rounded development program by taking advantage of some of the port authority powers and all of the I-RA powers. By combining and utilizing HRA, EDA and City powers, community leaders are able to create flexible business assistance and development programs. EDAs for example, are allowed, to buy and sell property; make loans and grants to businesses; provide guarantees or other credit enhancements; and to sell bonds. All Cities have authority from the State Legislature to create an EDA. The City may consolidate the EDA with an existing HRA or the City may establish the EDA as a separate entity. The City 2 Council may create an EDA by passing an enabling resolution. Before adopting the enabling resolution, the City must first conduct a public hearing. The enabling resolution establishes a Board of Commissioners for the EDA. The City Council can choose to serve as the EDA Board of Commissioners or create a board composed of council members and community members. The Mayor, with approval of the Council, appoints the Commissioners. The Board may consist of three, five or seven members who serve six-year terms. The Board is subject to the open meeting law. Rural Development Finance Authority (RFDA). A nonprofit corporation established by a County or group of Counties through special legislation. RFDAs are designed to facilitate the production and processing of agricultural products and promote jobs in agriculture and natural resources industries. The board is appointed by the County Board of Commissioners. Note: Please see appendix for a table comparing selected development laws. I 3 FORMATION AND OPERATION OF AN ECONOMIC DEVELOPMENT AUTHORITY Reasons for Forming an EDA The Minnesota Legislature granted Cities the power to create economic development authorities in 1987. By giving Cities this ability they can promote economic growth. EDAs were created to work in conjunction with and to facilitate other economic development organizations such as Port Authorities and Housing Redevelopment Authorities (HRA). This allows Cities to create a better approach to economic development allowing them to create flexible business assistance and development programs. In addition to HRA powers, EDAs were authorized to exercise the powers of Cities in connection with City development districts and the powers of municipalities or development agencies in connection with municipal industrial development. By consolidating the powers of economic and housing development into one body, City officials are not only able to focus development on blighted areas but, also create programs that will prevent blight from occurring elsewhere within the community. The primary powers of an EDA: • Serve to promote business and to recruit new businesses • Issue revenue bonds. • Acquiring property. • Purchase and sell land. • Serve as a limited partner. • Make or guarantee or other credit enhancements. • Issue general obligation bonds(approved by election). Procedures for Establishing an EDA In order for a City to create an EDA the City Council must adopt a written resolution called an enabling resolution. A County can also create an EDA. This handbook describes the process for Cities to establish an EDA. Through the enabling resolution EDA's are granted all of the powers described in Minnesota Statutes, 469.090-1082, subject to any limitation on those powers as specified by the City. EDA's are also granted the powers given to HRAs in the HRA law, powers almost identical to Port Authorities under the Port Authority Law and all of the development powers granted to a City under the municipal development district law and the industrial development act. Before adopting an enabling resolution the City Council must hold a public hearing and it must determine the number of Board Members to be on the EDA. The notice of the public hearing must identify the place and time of the hearing, brief statement of the purpose of the hearing, and the notice must contain a summary of the resolution. The notice of public hearing must be published in newspaper of general circulation once a week for two consecutive weeks prior to 4 the meeting. The first publication must appear not more than 30 days from the date of the public hearing. Without limiting the right of the EDA to petition the City Council at any time, each year, within 60 days of the anniversary date of the first adoption of the enabling resolution, the EDA shall submit to the City Council a report stating whether and how the enabling resolution should be modified. Within 30 days of receiving the recommendation, the City Council shall review the enabling resolution, consider the recommendation of the EDA, and make any modification it considers appropriate(Minn. Stat. §469.092, Subd. 3). All modifications to the enabling resolution must be by written resolution and must be adopted after notice is given and a public hearing conducted as required for the original adoption of the enabling resolution(Minn. Stat. §469.093, Subd.2). An EDA is a public body corporate and politic as well as a political subdivision of the State of Minnesota with the right to sue or be sued in its own name. An EDA carries out an essential governmental function when it exercises its powers, but is not immune from liability because of this. (Minn. Stat. § 469.091, Subd. 2) I 5 Enabling Resolution,Bylaws,Transfer Resolution and Ordinance Checklist Board Size(Optional) 3—Minimum of 1 City Council member 5—Minimum of 2 City Council members 7—Minimum of 2 City Council members Officers/Staff Powers and Duties -President -Executive Director -Vice President -Engineers -Treasurer -Technical/Support Staff -Assistant Treasurer -Secretary Procedures -Board Compensation -Quorum -Budget -Treasurer's Bond -Fiscal Year -Reports/Financials/Audits -Corporate Seal -Professional/Technical Services -Annual/Monthly/Special Meetings - -Amendments to By-Laws -Depositories -Conflict of Interest Committee Structure(optional) -Local Publicity -Business Retention and Expansion -Planning and Zoning -Marketing -Sites and Buildings -Advisory Transfer of Authority and Programs Economic Development Powers -Economic Development Districts -Redevelopment Districts -Acquisition of Property -Options -Eminent Domain -Contracts -Limited Partnerships -Rights and Easements -Acceptance of Public Land -Foreign Trade Zone -Public Facilities -Government Agent -Studies/Analysis/Research -Public Relations -Loans -Use of Proceeds -Mined Underground Space -Levy of Taxes -Advances -Issuance of Bonds Housing and Redevelopment Powers -Acquisition of Open Land -Acquisition of Unused Land -Sale of Real/Personal Property -Studies -Comprehensive Plans -Inventory of Land/Buildings -Joint Powers Agreements -Parking Facilities -Bonding Authority -Special Benefit Tax -Property Tax Exemption -Borrowing/Acceptance of Funds -Rehabilitation Loan/Grants -Interest Reduction Program Limitations on Powers -Limitations on All Powers -Limitations on Individual Powers 6 Board of Commissioners of EDA Board Size The City Council must determine the size and makeup of a Board of Commissioners. The City Council may serve as the Board of Commissioners or it can create a board that includes members of the community. The Board shall be appointed as follows: A. Three-member EDA: the Commissioners constituting a three-member EDA, one of whom must be a member of the City Council, shall be appointed by the Mayor with the approval of the City Council. Those initially appointed shall be appointed for terms of two, four, and six years, respectively. Thereafter all Commissioners shall be appointed for six-year terms. B. Five-member EDA: the Commissioners constituting a five-member EDA, two of whom must be members of the City Council, shall be appointed by the Mayor with the approval of the City Council. Those initially appointed shall be appointed for terms of two, three, four, five and six years respectively. Thereafter all Commissioners shall be appointed for six-year terms. C. Seven-member EDA: the Commissioners constituting a seven-member EDA, two of whom must be members of the City Council, shall be appointed by the Mayor with the approval of the City Council. Those initially appointed shall be appointed for terms of one, two, three, four, and five years respectively and two members for six years. Thereafter all Commissioners shall be appointed for six-year terms. An EDA may be increased from three to five or seven members or from five to seven members by a resolution adopted by the City Council following the procedures provided for modifying the enabling resolution. Cause for Removal A Commissioner may be removed by the City Council for inefficiency, neglect of duty, or misconduct in office. A Commissioner shall be removed only after a hearing. A copy of the charges must be given to the Commissioner at least ten days before the hearing. The Commissioner must be given an opportunity to be heard in person or by counsel at the hearing. When written charges have been submitted against a Commissioner, the City Council may temporarily suspend the Commissioner. If the City Council finds that those charges have not been substantiated, the Commissioner shall be immediately reinstated. If a Commissioner is removed, a record of the proceedings,together with the charges and findings, shall be filed in the office of the City clerk. I 7 Vacancy A vacancy is created in the membership of an EDA when a City Council member of the EDA ends council membership. A vacancy for this or another reason must be filled for the balance of the unexpired term, in the manner in which the original appointment was made. The City Council may set the term of the commissioners who are members of the City Council to coincide with their term of office as members of the City Council. Committees The EDA Board of Commissioners is responsible for the decision making process for the EDA, many Cities have found it helpful to develop a committee structure to assist in reaching the economic development goals of the community on or ongoing or ad hoc depending on upon the workload and particular issues that may arise. Possible committees could include: Local Publicity and Education Committee Sites and Buildings Committee Business Retention and Expansion (BRE) Marketing Committee I 8 EDA Board Executive Director EDA Staff I I Marketing Business Retention Sites and Buildings Local Publicity Committee And Expansion Committee and Education Committee Committee Officers,Duties and Organizational Issues The EDA must adopt bylaws, rules of procedure and an official seal. In the appendix is an example of organizational bylaws. Officers An EDA shall elect a president, a vice-president, a treasurer, a secretary and an assistant treasurer. The Authority shall elect the president, treasurer, and secretary annually. A Commissioner must not serve as president and vice-president at the same time. The other offices may be held by the same Commissioner. The offices of secretary and assistant treasurer need not be held by a Commissioner. At a minimum, there must be three officers on the board. (Minn. Stat. §469.096). Duties and Powers of Officers The president and vice-president have the usual duties and powers of their offices. They may be given other duties and powers by the EDA. The treasurer is responsible for receiving, disbursing and monitoring all funds of the EDA. When disbursing funds,the transaction must be by check only. The treasurer must also keep an account 9 • of the source of all receipts, as well as the nature, purpose and authority of all expenditures. The treasurer is responsible for filing a detailed financial statement with the secretary at least once a year at times set by the EDA. Quarterly reports may also be filed. The treasurer is also responsible for the acts of the assistant treasurer. The assistant treasurer has the powers and duties if the treasurer is absent or disabled. (Minn. Stat. § 469.096, Subd.4). The EDA must obtain a treasurer's bond conditioned for the faithful discharge of official duties. The bond must be approved as a form and surety by the EDA and filed with the secretary. The bond must be for twice the amount of money likely to be on hand at one time, as determined at least annually by the EDA provided that the bond may not exceed $300,000 (Minn. Stat. § 469.096, Subd. 6) The EDA may choose to have the secretary and the assistant treasurer position filled by a non- board member(Minn. Stat., § 469.096, Subd. 2). Public Money EDA money is public money. Checks An EDA check must be signed by the treasurer and one other officer named by the EDA in a resolution. The check must state the name of the payee and the nature of the claim that the check is issued for. Financial Statement The EDA's detailed financial statement must show all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets, and its outstanding liabilities in a form required for the City's financial statements. The EDA shall examine the statement together with the treasurer's vouchers. If the EDA finds that the statement and vouchers are correct, it shall approve them by resolution and enter the resolution in its records. (Minn. Stat. § 469.051). Compensation and Reimbursement A Commissioner, including the president, shall be paid for attending each regular or special meetings in an amount to be determined by the City Council. (Minn. Stat., § 469.095, Subd. 4). In addition to receiving pay for meetings, the Commissioners may be reimbursed for actual expenses incurred in doing official business of the EDA. All money paid for compensation or reimbursement must be paid out of the EDA's budget. Conflict of Interest A Commissioner or employee of an EDA shall not acquire any financial interest, direct or indirect, in any project or in any property included or planned to be included in any project sponsored by the EDA. EDA Commissioners or employees may not have any financial interest, I 10 direct or indirect, in any contract or proposed contract for materials or services to be furnished or used in connection with any project(Minn. Stat., §469.098). The following is a list of exceptions when an EDA may contract for goods or services with a Commissioner or officer of the EDA who has a financial interest in a project. Approval of this action must be passed by a unanimous vote of the EDA with the affected Commissioner abstaining from the vote on the resolution(Minn. Stat., §471.88). 1. When an officer or Commissioner is employed by a bank or savings association that serves as the EDAs depository or as a source of borrowing,and that Commissioner has an interest either direct or indirect, no restrictions apply. However, if a Commissioner or officer does have a direct or indirect interest as a director or an employee of the bank or savings association, he or she must make that disclosure and enter it into the minutes of the EDA. This disclosure serves as notice of the Commissioner's interest and does not need to be made on future transactions with that designated financial institution. 2. When a Commissioner of the EDA is employed by a bank that is engaged in making loans or performing trust services involving real or personal property affected by any plan of the EDA, there is no restriction that applies to the loans made or trust services performed by the Commissioner's bank if he or she discloses the nature of the loans or trust services of which the Commissioner has personal knowledge. This disclosure must be entered in the minutes of the EDA. 3. If the EDA has designated an official newspaper, or publication where it publishes its public notices and minutes,and a Commissioner has an interest in the paper. 4. If the EDA enters into a contract with a cooperative association where a Commissioner is a shareholder or stockholder,but not an officer or manager. 5. A contract for which competitive bids are not required by law and where the amount does not exceed$5,000. 6. Contracts for goods or services when consideration does not exceed $5,000 in any year and the sealed bid process is used and the contracting governmental unit has a population of less than 1,000. 7. When an EDA Commissioner is engaged in or employed by a firm that is in the business of importing or exporting or general trade, the EDA may enter into business transactions with the Commissioner or the Commissioner's employer provided that the Commissioner abstains from voting on any resolution that sets rates affecting shippers or users of an EDA-owned facility. (Minn. Stat. § 471.88) Ethics Law Changes made in the 1994 Ethics in Government Act not only affect state legislators but also local officials. The definition of a local official is "a person who holds elective office in a political subdivision or who is appointed to or employed in a public position in a political subdivision". Minn. Stat. § 10A.01 Subd. 22 goes on to state that local officials are those who 11 have the "authority to recommend, or as a member of the governing body, make major decisions regarding the expenditure or investment of public money." Based on these definitions, EDA executive directors and commission members are subject to the gift restrictions of the Ethics in Government Act. A local official is prohibited from accepting gifts from a lobbyist or lobbyist principal including: • Money, • Real or personal property, • A service, • A loan, • A forbearance or forgiveness of indebtedness,or • A promise of future employment unless the lobbyist or lobbyist principal receives consideration of equal or greater value in return. Employees,Services, and Supplies The EDA may employ an executive director, a chief engineer, other technical experts and agents, and other employees as it may require. The EDA must determine their duties, qualifications and compensation. Also, the EDA may contract for the services of consultants, agents, public accountants, and other persons needed to perform its duties and exercise its powers. The EDA may use the services of the City Attorney or hire a general counsel for its legal needs (Minn. Stat. §469.097). (See appendix for sample job description). The EDA may utilize the City/County's purchasing department in connection with construction work and to purchase equipment, supplies and materials. The City/County may furnish offices, structures and space, stenographic, clerical, engineering and other assistance to the EDA in order for it to perform its duties and to carry out its powers. The EDA may also delegate to one or more of its agents or employees powers or duties it may deem proper. Depositories Every two years the EDA shall name a national or state bank(s) within Minnesota as depositories for its funds. Before acting as a depository, the bank must give the EDA a bond approved as to form and surety by the EDA. The bond must state the conditions for the safekeeping and the prompt repayment of deposits. The amount of the bond must be at least equal to the maximum amount expected to be deposited at any one time. An EDA may deposit all its money from any one source in one bank account. When the EDA funds are deposited by the treasurer in a bonded depository,the treasurer and the surety on the treasurer's official bond are exempt from liability for the loss of the deposits because of the failure, bankruptcy or other act or default of the depository bank. However, an EDA may accept assignments of collateral from the depository bank to secure the deposits just as assignments of collateral are permitted by law to secure deposit of the EDA's City(Minn. Stat. § 469.099) 12 Budget, Fiscal Year, Taxes,Audits and Reports The fiscal year of the EDA must be the same as that of its governing City. It must annually submit its budget to the City in a time frame that matches the City's normal budget cycle. This budget must include a detailed written estimate of the amount of money that the EDA expects to need from the City during the next fiscal year. There are many ways in which EDA's budgets are established. EDAs have the ability to receive funding from virtually any source, public and private, and including the general funds of the underlying City. In addition, EDAs utilize administrative fees from loan or grant agreements, guarantees or other credit enhancements or contributions from local businesses or organizations. The most common practice is a direct general fund appropriation to the EDA out of the City general fund. The EDA is required to send its budget to the City Council with an estimate of funding requirements for the next fiscal year, and it is through this procedure that a City may give money from the City's general funds for the EDA to use. There is no limit to the amount of funding that can be provided to an EDA through this mechanism. One of the fringe benefits of City general fund monies lies in the fact that their use may not be as restricted as monies from other funding sources. This enables an EDA to use them for virtually any economic development purpose, as long as appropriate findings are made and safeguards imposed to demonstrate the use will promote economic development in the City. Such uses include write downs, grants or loans, working-capital loans and the purchase of limited partnership interests. For example, an EDA received funding using dollars remaining in a City's bond fund after all bonds were retired, and used these dollars to capitalize a revolving loan fund. In addition to the annual budget, the EDA must submit a detailed annual report to the City Council outlining its activities, receipts and expenditures during the preceding calendar year. The report may also include other matters and recommendations that the EDA deems advisable for the economic development of the City. On an annual basis the financial statements of the EDA must be prepared, audited, filed and published or posted in the manner required for the financial statements of the City. The financial statements must permit a comparison and reconciliation with the City's accounts and financial reports. The report must be filed with the State Auditor by June 30th of each year. The auditor will review the report and may accept it or audit the books of the EDA for cause (Minn. Stat. § 469.100). City Levy of Taxes for EDA Activities The City may, at the request of the EDA, levy a tax in any year for the benefit of the EDA in an amount not more than 0.01813 percent of taxable market value. The amount levied must be paid by the City treasurer to the treasurer of the EDA, to be spent by the EDA. A City may increase its levy for economic development authority purposes under Minnesota Statutes 469.107, Subdivision 1 in the following way. The City Council must first pass a resolution stating the proposed amount of levy increase. The City must then publish the resolution together with a notice of public hearing on the resolution for two successive weeks in its official newspaper or if none exists in a newspaper of general circulation in the City. The hearing must be held two to 13 four weeks after the first publication. After the hearing, the City Council may decide to take no action or may adopt a resolution authorizing the proposed increase or a lesser increase. A resolution authorizing an increase must be published in the City's official newspaper or if none exists in a newspaper of general circulation in the City. The resolution is not effective if a petition requesting a referendum on the resolution is filed with the City Clerk within 30 days of publication of the resolution. The petition must be signed by voters equaling five percent of the votes cast in the City in the last general election. The election must be held at a general or special election. Notice of the election must be given in the manner required by law. The notice must state the purpose and amount of the levy. Levy of Taxes for HRA Activities Subject to the approval by resolution of the governing body of the City, the EDA may levy a tax for HRA purposes upon all taxable property within that taxing district. The levy cannot not exceed an amount equal to 0.0185 percent of taxable market value, and must be spent for purposes authorized under the HRA statutes. These levies must be included in the EDAs annual budget. Transfer of Authority The City may by ordinance divide the economic development, housing and redevelopment powers granted under the EDA and HRA sections in Minnesota Statutes, Chapter 469 between the EDA and any other authority or commission established under statute or City charter for economic development, housing or redevelopment. The City may, by resolution, transfer the control, authority and operation of any project or program located within the City from another governmental agency or subdivision that established the project or program to the EDA. The City may also require the EDA to accept control, authority and operation of the project or program. If a project or program is transferred to the EDA, it may exercise all of the powers that the governmental unit establishing the project or program could have exercised with respect to the project or program. When a project or program is transferred to the EDA,the EDA must pledge in writing to perform the terms, conditions and covenants of the bond indenture or other agreements executed for the security of any bonds that were issued by the governmental subdivision that initiated the project or program. The EDA may exercise all of the powers necessary to perform the terms, conditions and contracts of any indenture or other agreements executed for the security of the bonds and will become obligated for the bonds when the project or program is transferred. If the City transfers a housing project or a housing development project to the EDA, the City must transfer all housing development and management powers relating to that specific project or program. Transfer of Personnel The City may also by resolution place any employees of the HRA under the direction, supervision or control of the EDA. The transfer of employees does not affect the employee rights 14 existing under a collective bargaining agreement or fringe benefit plan. Upon transfer, the employees will become employees of the EDA. I 15 POWERS OF EDAS General Powers and Purposes The primary benefit of an EDA rests in its ability to easily and flexibly accomplish a wide range of development and redevelopment objectives. An EDA is granted a remarkably full complement of development powers. These include (subject to any limitation in the enabling resolution) the powers enumerated by its enabling legislation, but also those powers granted by cross-reference to housing and redevelopment authorities (HRAs), to Cities in connection with projects and development districts, of municipalities and redevelopment agencies in connection with Municipal Industrial Development. These development powers allow an EDA great latitude, flexibility and efficiency in pursuing economic development objectives. The purposes to which EDAs may direct their powers are not entirely clear in the statutes. They appear to include making land suitable and available for economic development and to encourage the location or expansion of economic development facilities. Also, through incorporating the purposes of HRAs, EDAs also can provide adequate housing in addition to clearing and developing blighted areas. And by incorporating the broad purposes of Municipal Industrial Development, EDAs may actively promote, attract and encourage the development of economically sound industry and commerce for the purpose of preventing the emergence of blighted and marginal lands and areas of chronic unemployment. Usually, an EDA must adopt or reference a broader plan to exercise its powers. Certain EDA powers can only be exercised within the boundaries of an "Economic Development District; certain HRA powers must be exercised within the boundaries of a "Redevelopment Project," and certain municipal powers must be exercised within a "Municipal Development District." Certain EDA Powers must be exercised only within the boundaries of an "Economic Development District." The EDA may create and define the boundaries of economic development districts at any place or places within the City, except the district boundaries must be contiguous. An EDA must hold a public hearing on the establishment and at least 10 days before the hearing the EDA shall publish notice of the hearing in a daily newspaper of general circulation in the City. The EDA must find that an economic development district is proper and desirable to establish and develop within the City. Redevelopment Project When the EDA exercises many of the powers of an HRA, such powers must be used within the boundaries of a Redevelopment Project established under the HRA law. When establishing a Redevelopment Project,the EDA must develop a redevelopment plan which provides an outline for the development or redevelopment of the area. The EDA must obtain the written opinion of the City's planning agency if there is one. The City Council must approve or disapprove the plan within 30 days after holding a public hearing on the Redevelopment Project. The council must make the following findings in connection with its approval: 16 1. The land in the project area would not be made available for redevelopment without the financial aid to be sought from the EDA. 2. The redevelopment plans for the redevelopment areas in the locality will afford maximum opportunity consistent with needs of the locality as a whole for the redevelopment of the areas by private enterprise. 3. The redevelopment plan conforms to the general comprehensive plan for the development of the locality as a whole. (Minn. Stat. §469.028). Municipal Development District When the EDA exercises certain powers of cities identified in the City Development District law (Minn. Stat. §§ 469.124-469.143), they must be used within the boundaries of a Municipal Development District. A development district may be designated anywhere within the boundaries of a City and the City must adopt a Development Program for the development district, which is a statement of objections for the development district and contain the information set forth in Minn. Stat. § 469.125, Subd. 3. The City may develop a program for improving the district to provide the impetus for commercial development, increase employment, protect pedestrians, provide open space relief and other actions which are in the public purpose. Prior to designation, the City must consult with its planning agency or department, publish notice,and hold a public hearing. Specific Powers Because EDAs derive powers both directly from EDA law and indirectly by cross reference with other development statutes, there is often considerable overlap in the statutes which can be cited as authority for a given power. For example, the power to acquire and develop property under the EDA Law must be exercised within the boundaries of an "economic development district." Since the definition of an economic development district is very restrictive, the EDA power to acquire land cannot be exercised in many circumstances. However, the comparable HRA power to acquire and develop property is far more general and can be exercised in a broad range of development circumstances. By picking and choosing the particular statutory authority best suited to a given proposed action, an EDA can usually carry out its purposes with a minimum of inconvenience. Many of the powers of an EDA are listed below, including powers derived from EDA, HRA and municipal authorities. When considering the exercise of any specific power cited, your should always review the available legislation and consult with your legal and development advisors. Acquisition of Property An EDA may acquire the necessary rights,titles or interest in property through purchase, lease or gift. While the property is owned by the EDA and used for governmental purposes, the property is exempt from taxation by the state or its political subdivisions. However, once the EDA sells or leases the property for use by a non-governmental body, it becomes subject to taxation. 17 Options The EDA may sign options to purchase, sell or lease property. This power may be used to set aside a particular building or site for future development purposes. Eminent Domain An EDA may exercise the right of eminent domain under Chapter 117 or under its City's charter to acquire property by condemnation. If the property is owned by the City for public use, the City must approve the taking. Also, the EDA may take possession of the property after it files a petition in condemnation proceedings describing the property -- a practice sometimes referred to as a "quick take"proceeding. Loans An EDA may make loans to businesses to carry out the purposes outlined in the EDA Law (Minn. Stat. §469.192). Contracts The EDA may enter into contracts with both governmental and non-governmental entities for the purpose of economic development, including the purchase or sale of real and personal property. An EDA may not incur an obligation or expense under the HRA Law, unless it has an existing appropriation, or can identify reasonably expected revenues sufficient to discharge the obligation or pay the expense. Independent authority is found in the EDA Law for the EDA to guarantee loans, as more fully discussed under the "Advances" power described later in this handbook. Limited Partnership An EDA may be a limited partner in a partnership whose purpose is consistent with the EDA's purpose. If a City is participating in a project as a limited partner, it may wish to stipulate in the equity agreement a limit on its current and future liability. This stipulation will serve as a safeguard for the City if legal action is brought against the firm as a result of its operation or inequities in its services or products. Rights and Easements The EDA may acquire rights and easements for development of an economic development district. It may be necessary for an EDA to utilize these powers when extending public infrastructure to a project area. Acceptance of Public Land and Property The EDA may accept land, money, or assistance, either by gift, loan or otherwise, in any form from the federal or state government, or its agencies, or a local subdivision of the state government to carry out its economic development activities. 18 An EDA may accept conveyances of land from all other public agencies, commissions, or other units of government, if the land can be properly used by the EDA in an economic development district. Foreign Trade Zone Minnesota Statute 469.101, Subdivision 11 authorizes EDAs to operate and manage Foreign Trade Zones. Foreign or "Free" Trade Zones (FTZ) were established to facilitate international trade by serving as "safe havens" and can increase a company's cash flow by reducing costs associated with import restrictions and duties. FTZs can be warehouses, storage tanks or fenced- in areas near harbors, airports or industrial parks. Foreign and domestic goods are brought into a zone where they can be stored, sold, exhibited, broken up, repacked, assembled, distributed, sorted, graded, cleaned and mixed with foreign and domestic products or used in a manufacturing process. There are two types of foreign trade zones. General zones are located at or adjacent to a U.S. Customs Port of Entry (i.e. Minneapolis-St. Paul International Airport or Duluth Port) and subzones which are technically part of the general zone but are physically removed from it. General zones typically have multiple users occupying a facility or warehouse site, while "subzones" are special-purpose facilities operated by individual firms that cannot be accommodated within a general zone and are engaged in large-scale manufacturing. The major goods being produced in subzones are automobiles, trucks, motorcycles, tractors, women's garments,and refined oil. Although a zone is operated as a public utility and can be managed by either a public or private corporation, it is treated as foreign territory and considered to be in foreign commerce, therefore providing benefit to the users. The usual formal Customs entry procedure and payment of duties is not required on the foreign merchandise unless and until it enters Customs territory for domestic consumption, in which case the importer ordinarily has a choice of paying duties either on the original foreign material or the finished product. In addition, quota restrictions do not normally apply to foreign goods stored in zones. Domestic goods moved into a zone for export may be considered exported upon entering the zone for purposes of excise tax rebates and drawback. In some cases companies can avoid both import duties on an item and state and local ad valorem taxes when goods are exported from the zone. In most cases, Federal taxes and excise taxes can be deferred on the goods until they enter the U.S. marketplace. Public Facilities The EDA may operate and maintain a public parking facility or other public facility to promote development or prevent the emergence of slum and blight. Frequently, these powers are exercised in cooperation with other units of government, including Cities, counties and school districts. Projects may include City halls, fire stations, libraries, community centers, administration buildings,and many others. For example a City may want a community center for its residents. In order for the project to occur,the EDA sells revenue bonds, constructs the community center, and leases the community center to the City. The lease is paid by an annual appropriation from the City's general fund to 19 the EDA, and the EDA uses the lease payments to pay the principal and interest due on the revenue bonds. When the revenue bonds are retired, title to the new community center will be transferred to the City. Government Agent An EDA may cooperate with or act as an agent for the federal or state government, a state public body, an agency or instrument of a government, or a public body to carry out its mission. Studies,Analysis,Research An EDA may study and analyze economic development needs in the City, and ways to meet those needs. An EDA may study the desirable patterns for land use for economic development and community growth and other factors affecting local economic development in the City. It may make the results of the studies available to the public and to business/industry in general. An EDA may engage in research and disseminate information on economic development within the City. Public Relations To further its economic development efforts, an EDA may join an official, industrial, commercial, or trade association, or other organization. It may also have a reception of officials who may contribute to advancing the City and its economic development activities. It may also carry out other public relations activities as it deems appropriate in fulfilling its efforts to promote the City and its economic development projects (Minn. Stat. § 469.101, Subd. 16). Joint Powers Agreements Any two or more EDAs using HRA powers or together with an HRA may join with one another to exercise, either jointly or otherwise, any or all of their powers. This joint powers agreement may be used for the purpose of financing, including the issuance of bonds and giving security, planning, undertaking, owning, constructing, operating, or contracting a housing project located within the area of operation of any one or more of the EDAs or HRAs. The EDA may, by resolution, authorize any other housing authority or EDA utilizing HRA powers to act on its behalf with respect to any or all powers, as its agent or otherwise. An EDA may by resolution authorize another housing authority to exercise its powers within the authorizing EDAs area of operation at the same time that the authorizing authority is exercising the same powers. Tax Increment Financing There are many benefits afforded to a City by utilizing Tax Increment Financing (TIF) to facilitate economic development. Some of these are: the City can realize new development, which would not otherwise occur without the use of TIF; the City may realize broader economic gains of new development in terms of employment, tax base enhancement and secondary spin- off effects; the City can facilitate the construction of related public improvements it wishes to achieve by coordinating a TIF project with more general public improvement projects; the City 20 may have better control over the nature of the development; the City may be able to fund administrative and/or community development costs with revenue from the TIF district and; in some cases,the qualifying of new development is enhanced by the TIF financing. An EDA may act as an Authority for the purposes of creating and administering tax increment financing districts and plans. These powers must be exercised within a Redevelopment Project, when acting under HRA powers, or within a Municipal Development District when exercising City powers. In general, an EDA must receive approval from the City Council prior to adoption of a Tax Increment Financing plan, and comply in all respects with the requirements of Minnesota Statutes 469.174 -469.179. There are several types of TIF districts allowed by statute. The following is a brief description of each. Redevelopment District: • Generally a blighted area containing substandard buildings. • Requires documentation to evaluate occupied land area and analysis of substandard buildings. • Maximum duration of TIF district is 25 years from receipt of the first increment. Renewal and Renovation District: • Blight and obsolescence tests must be met. • Maximum duration of TIF district is 15 years from receipt of the first tax increment. Housing District • Provides housing opportunities for persons and families of low and moderate income. • Maximum duration of TIF district is 25 years from receipt of the first tax increment. Soils Condition District: • Provides for the removal or remediation of hazardous substances or contaminants as specified in a development action response plan. • Such costs must exceed (a) the fair market value of the land before completion of the preparation or(b)$2 per square foot of the area of each parcel. • Maximum duration of the TIF district is 20 years from receipt of the first tax increment. Economic Development District: • May be used only for manufacturing, production, processing, warehousing, storage, distribution (excluding retail sales), research and development, telemarketing, certain tourism and border City retail facilities and uses are directly related to or in support of such qualifying activities. Prohibits establishment if more than 15 percent of the square footage of such facilities are used for other purposes. 21 • Must demonstrate retention of local businesses, increased employment or preservation or enhancement of the state tax base, etc. • Maximum duration of TIF district is 8 years from receipt of the first tax increment. • May be used for commercial facilities not exceeding 15,000 square feet in Cities with populations of 5,000 or less located at least 10 miles outside of a City with a population of 10,000 or more. Other than administrative expenses, all increments must be spent within the TIF district. • Expanded Rules for any type of development if construction commences by July 1, 2011 and certification of district is requested by June 30,2011. Compact Development District: • May be used to redevelop property where 70 percent of the parcel is industrial or utility property. • The project must result in an increase of square footage of industrial or utility property by three times or more over its current level. • Must be approved before June 30,2012. In order to establish a TIF district,a specific process must be followed including the following: 1. A Development Program or Redevelopment Plan (depending on statutory authority used) must be prepared. This sets forth the general goals for the development or redevelopment project area. 2. A Tax Increment Financing Plan must be prepared. This sets forth the specific project(s) to be undertaken, costs involved, and revenues projected, and is the guiding document for the proposed project. 3. A public hearing on the TIF Plan and district must be conducted. Notification of the public hearing must be published 10-30 days prior to the hearing. 4. A TIF district "fiscal and economic impact" letter must be received by the County and school district at least 30 days prior to the public hearing. 5. The City planning commission must review the TIF Plan and Development Program prior to City approval. 6. At the public hearing,all interested parties are invited to express their opinion(s). 7. Subsequent to the public hearing, the City must approve or reject the TIF Plan and district. 8. Upon approval,the City must request County certification of the original value of the TIF district which will begin the tax increment collection process. 9. Actual project expenditures may not be made until the TIF Plan is adopted and the TIF district is established. 22 Financing and Bonding Powers Issuing General Obligation Bonds The EDA may issue General Obligation Bonds (GO Bonds) in anticipation of income from any source for any purpose allowed by statute. The City must, by ordinance and by two thirds vote, give specific consent to pledge the City's full faith and credit to the GO Bonds. The EDA must comply with the provisions of Minnesota Statutes § 475,the general public indebtedness statute. An election is required to issue GO Bonds backed by the City's full faith and credit. Issuing Revenue Bonds Revenue bonds may be issued by the EDA to fund any authorized activity of the EDA. The revenues generated by the projects to be financed and/or other revenues of the EDA may be pledged to the payment of the revenue bonds. Bonds may also be secured by a mortgage on certain EDA property. The EDA can pledge its full faith and credit and limited taxing power to the payment of revenue bonds,but it may not pledge the full faith and credit of the City. Because the credit strength of an EDA is usually very limited, the feasibility of a revenue bond offering is highly dependent upon the project to be financed. For example, if an EDA were to issue a revenue bond to finance the construction of a building to be leased to a manufacturing firm, the interest rate and security terms of the revenue bond would depend primarily on the creditworthiness of the manufacturer. For weaker projects and tenants, issuance may not be feasible. Advances As noted earlier in this handbook, there is independent authority for an EDA to make a loan. An EDA may advance (loan) its general fund money or credit without interest. The advances must be repaid from the sale or lease of land. If the money advanced for the development or redevelopment project was obtained from the sale of the EDAs general obligation bonds, then the interest rate on the advances must not be lower than the average annual interest rate on the EDAs general obligation bonds that are outstanding at the time the advances are made. Advances made to acquire land and to construct facilities for recreational purposes, do not need to be reimbursed(Minn. Stat. §469.106). Secondary Market An EDA may sell, at private or public sale, at the price or prices determined by the EDA, any note, mortgage, lease, sublease, lease purchase, or other instrument or obligation evidencing or securing a loan made for the purpose of economic development,job creation, redevelopment, or community revitalization by a public agency to a business, for-profit or nonprofit organization, or an individual (Minn. Stat. § 469.101, Subd. 22). An EDA operating a revolving loan fund may choose to sell a loan on the secondary market if it needs to recapitalize the loan fund in order to finance additional projects. 23 Borrowing in Anticipation of Bonds After authorizing a bond issue, an EDA may borrow funds to provide money immediately required for the project, but the loan must not exceed the amount of the bonds. The EDA must approve a resolution stating the terms of the loan. The due date for the loan may not be for more than 12 months from the date of the loan origination and may be repaid with interest from the proceeds of the bonds when the bonds are issued and delivered to the bond purchasers. The loan must not be obtained from any Commissioner of the EDA or from any corporation, association, or other institution of which a Commissioner is a stockholder or officer (Minn. Stat. § 469.101, Subd. 19). Revolving Loan Funds Small business growth in most communities provides the greatest opportunity for new investment and job development. However, because constraints on capital markets, financial institutions may be unable or unwilling to provide a complete financing package, and many good companies end up with marginal long-term financing. Businesses and financial institutions invest dollars in projects to make a profit and to earn a return on that investment. Unless the project offers the promise of a positive return, it is difficult to sell a prospective investor on locating or expanding a business. Stimulating investment requires impacting a business and a bank's spending decisions. An EDA can impact business spending decisions by providing an opportunity where rates of return on investment are attractive and competitive. Many EDAs do this by operating a local Revolving Loan Fund(RLF) designed to facilitate small business investment. The typical goal of a local RLF is to leverage private sector investment by filling the capital market gap for financing long-term assets. Most RLFs provide a cost advantage to the business to lessen their financial constraints and meet the community's goal of increasing productivity and creating new, permanent jobs. The RLF can provide lower interest payments, more flexible equity requirements, longer terms, deferred principle payments and a subordinate collateral position to the bank. The type of businesses that are eligible for loan funds type of businesses that are eligible for loan funds will depend on the loan guidelines established by the particular EDA. An RLF can be designed in several different ways. The most common type of RLFs structure is the direct loan to the business. Direct loans are made to the business with a separate set of loan documents and collateral to secure the loan. These loans are typically made to fill the gap in a development project. The second type of funding structure is a loan guarantee. The EDA provides a partial guarantee to the private lender to ensure repayment of the loan and to limit the risk to the private lender. This type of activity provides several advantages to the EDA, notably, smaller capitalization requirements, increased leverage of funds, and limited administrative activity I 24 A third type of RLF is a linked deposit program. With a linked deposit program,the EDA works with other government agencies and large non-profit institutions to place a certificate of deposit with the lending institution at below market rate. This action allows the bank to increase its liquidity of funds,gain a higher return on a riskier project and improve collateral coverage. The most fundamental issue in the development of a revolving loan program is the developme of policies and procedures for operating, marketing, financing and dealing with delinquencies • defaults. It is important to consider working with development counsel and/or financial adviso to discuss the intricacies and mechanics of a RLF program. The source of capitalization for local loan funds varies by community. Communities are utilizing local sources through the use of excess general fund or municipal utility reserves, Tax Increment Financing reserves and partnerships with banks or utilities to capitalize local revolving loan funds. Limitation of Powers The City Council may place limits on the activities of the EDA in the enabling resolution. These limitations may be placed on the power to issue general obligation or revenue bonds, the power to grant or loan EDA funds, power to enter into limited partnerships, or any other specific power over which the governing body wishes to exercise control. The following is a list of specific areas where the governing body may exercise control (Minn. Stat. § 469.092): 1. that the EDA may not exercise any specified power contained in Minn. Stat. §§ 469.001 to 469.047, 469.090 to 469.108, and 469.124 to 469.134 or that the EDA must not exercise any powers without the prior approval of the City Council. 2. that, except when previously pledged by the EDA, the City Council may by resolution require the EDA to transfer any portion of the reserves generated by activities of the EDA that the City Council determines is not necessary for the successful operation of the authority to the debt service fund of the City, to be used solely to reduce tax levies for bonded indebtedness of the City; 3. that the sale of all bonds or obligations issued by the EDA be approved by the City Council before issuance; 4. that the EDA follows the budget process for City departments as provided by the City and as implemented by the City Council and Mayor; 5. that all official actions of the EDA must be consistent with the adopted comprehensive plan of the City, and any official controls implementing the comprehensive plan; 6. that the EDA submit all planned activities for influencing the action of any other governmental agency, subdivision, or body to the City Council for approval; 25 7. that the EDA to submit its administrative structure and management practices to the City Council for approval. 8. any other limitation or control established by the City Council by the enabling resolution. 26 GLOSSARY Cash Flow: Can the business repay the loan out of operating cash flow. Collateral: A tangible asset like land, building, inventory, machinery and equipment, etc., offered as security on a loan. Typically,the value of the offering is greater than the amount loaned. Commercial Club: Usually an incorporated 501(c)(4) or (6) organization whose purpose is to promote community and retail events. The membership is usually made up of retail business owners or owners of businesses in the central or downtown business district. Chamber of Commerce: A chamber is an incorporated, non-profit 501(c)(4) or (6) that is generally affiliated with the state and national chamber of commerce. The chamber consists of local business professionals of the community who meet together to promote local businesses and the community. Generally, they have an elected board with and most have limited staff. Larger chambers often deal with tourism and overall business development of the community. They sometimes are politically active and can be a powerful lobbying force when dealing with policy that affects the community's economic strategy. Chambers are generally active and can hold educational and other events for local businesses. Development Commission: A board used to advise City Council, appointed by the Mayor and/or City Council. It has limited or no decision making authority and is used as a sounding board or a first point of contact for the City Council for development projects. The commission is used to draft strategies and policies for ratification and implementation of local plans on a volunteer basis. Economic Development District: A type of tax increment financing district which consists of any project, or portions of a project, but which the authority finds to be in the public interest because: it will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality; or it will result in increased employment in the state; or it will result in preservation and enhancement of the tax base of the state. Excess Increments: Tax increments that exceed the amount needed to pay the costs authorized under the tax increment financing plan. Increments are not excess increments if the TIF plan has been amended or modified to permit additional spending. The law requires that excess increments be used to prepay outstanding bonds or deposited in an escrow account for bond payments or returned to the City, County, and school district(s) in proportion to their local tax rates. For-Profit Development Corporation: A corporation formed to develop and sell industrial land and/or provide financing for business development within the community. Local investors can buy shares that can be paid dividends for profits made on projects. Money invested in corporations can be repaid to the stockholders. The board is made up of shareholders and may or may not have staff. The corporation is subject to federal and state income tax. I 27 Guarantee Fee: Money paid by a borrower to a government agency, company, or individual to guarantee repayment of a loan. The fee is usually a percentage of the amount of the guarantee. Housing District: A type of tax increment financing district which consists of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income, as defined in chapter A, Title II of the National Housing Act of 1934, the National Housing Act of 1959, the United States Housing Act of 1937, as amended, Title V of the Housing Act of 1949, as amended, any other similar present or future federal, state, or municipal legislation, or the regulations promulgated under any of those acts. A project does not qualify under this subdivision if the fair market value of the improvements which are constructed for commercial use or for uses other than low and moderate income housing consists of more than 20 percent of the total fair market value of the planned improvements in the development plan or agreement. The fair market value of the improvements may be determined using the cost of construction, capitalized income,or other appropriate method of estimating market value. Housing Redevelopment Authority: An HRA is a public corporation with power to undertake certain types of housing and redevelopment of renewal activities. While state legislation conveys authority for housing and redevelopment in each City, it is up to the City Council to formally establish an HRA before it can do business and use its powers. Once a council legally establishes an HRA, it may undertake certain types of planning and community development activities on its own with council approval Joint Powers Board: This is a board created by two or more Cities, townships, or counties for a specific purpose, such as economic development. The agreement between the units of government would specifically describe activities and powers that the board exercises in carrying out its duties. Limited Partnership: A form of group ownership with at least one general partner and one limited partner, the general partner has unlimited liability. Limited partners can only lose their initial investment. Port Authority: This is a legal entity created by the State Legislature to promote the general welfare of a City's port district, increase the volume of commerce in the port and provide facilities for handling, storage and shipment of freight. The Port Authority actively develops commerce within the City and can enable business location and expansion. The powers of the Port Authority are more expansive than the HRA or EDA. Port Authorities can issue General Obligation bonds without an election. Redevelopment District: A type of tax increment financing district consisting of a project , or portions of a project, within which the authority fmds by resolution that one of the following conditions, reasonably distributed throughout the district, exists: parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities,paved or gravel parking lots, or other similar structures and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; or the property consists of vacant, used, under used, inappropriately used, or infrequently used rail yards,rail storage facilities, or excessive or vacated railroad rights-of-way. 28 Renewal and Renovation district: A type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that one of the following conditions exist: parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, or other improvements; 20 percent of the buildings are structurally substandard; and 30 percent of the other buildings require substantial renovation or clearance to remove existing conditions such as: inadequate street layout, incompatible uses or land use relationships, overcrowding of buildings on the land, excessive dwelling unit density, obsolete buildings not suitable for improvement or conversion, or identified hazards to the health, safety, and general well-being of the community; and the conditions are reasonably distributed throughout the geographic area of the district. Rural Development Finance Authority (RFDA): A non-profit corporation established by a County or group of counties through special legislation. RFDAs are designed to facilitate the production and processing of agricultural products and promote jobs in agriculture and natural resource industries. The board of directors is appointed by the County board of commissioners. Structurally Substandard: A building that contains defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of the interior partitions, or similar factors. which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance. A building is not structurally substandard if it is in compliance with the City's building code applicable to new buildings or it could be modified to satisfy the building code at a cost of less than 15% of the cost of constructing a new structure of the same square footage and type on the site. Tax Increment District: A district consists of the geographic area for which tax increments are collected. The development authority defines the area in the tax increment plan. A district may be contiguous or non-contiguous area within a project area. 29 TABLES COMPARISON OF SELECTED DEVELOPMENT LAWS Rural Development Finance Municipal Industrial Housing Redevelopment Economic Authorities Authority Development Act: Development Authorities Purpose: Purpose: Purpose: Purpose: The overall purpose of an EDA An RDFA may be established by The main focus of Minn. Stat. , An HRA is responsible for is to promote economic a County or group of counties to §§469.152 to 469.1651 includes determining blighted land areas, development within a district. bring about the production of the following: expansion and and for preventing the spread of EDAs may exercise their own agricultural products and economic growth in blighted blight, including substandard powers which are similar to port to encourage increased land areas;retention of industry building structures. A blighted authority powers, powers of a employment in agriculture. A within the district; overall area is one with buildings and HRA,and the powers of Cities in RDFA is a non-profit strengthening of community tax areas that are detrimental to the connection with development corporation. base; and the general health,safety and welfare of the districts and municipal industrial enhancement of the economy in community.The HRA may then development activities. Governing Body: the district. provide for improvements or redevelopment of these areas Governing Body: An RDFA is controlled by a Governing Body: through a redevelopment plan. Board of Directors who are An HRAs main area of operation EDA is created through an either elected or appointed by Consists of the representing is housing program enabling resolution written and the County Board. If more than governmental unit—e.g. City development. HRAs are approved by City Council. one County is involved,then all Council/County Commissioners primarily concerned with family counties involved must be for Cities, County Board for rehabilitation, housing EDAs have a board consisting of represented on the board. counties,etc. redevelopment, public housing, 3, 5, or 7 commissioners and rent assistance. appointed by the Mayor with the The board must have a minimum All rights of a municipality are approval of City Council. The of five members. granted to bondholders. Governing Body: board may also consist entirely of City Council members. All projects and activities of the When beginning a project,each Approval for any project through RDFA must have approval of municipality must provide the the approval of a redevelopment The City Council may control the the Commissioner of the Commissioner of the plan, must be granted by the activities of the EDA by limiting Department of Employment and Department of Employment and appropriate City Council. its powers under the enabling Economic Development. Economic Development with resolution and through the annual specified information regarding Activities are controlled by a approval of the EDA budget. the details of the contracting board of commissioners. agreement. All projects must be approved An HRA is independent of the by the state Commissioner local government. Approval of (except County jails). the redevelopment plan for the proposed project is needed, however, by the governmental unit in order to proceed. 30 Rural Development Finance Municipal Industrial Development Housing Redevelopment Economic Authorities Authority: Act Development Authorities (continued) (continued) (continued) (continued) Activities: Activities: Activities Activities: EDAs are granted powers within I. Build, obtain and operate 1. Build, acquire, and retain all 1. May establish a redevelopment their own district, outside their projects designed for the lands, structures, and equipment project(Minn. Stat. 469.002)for development district, and, by production of agricultural relating to a project. the elimination/and prevention of cross-reference, the powers of products. blighted areas. HRAs, development districts in 2. Enter into contracts with other connection with the City, and 2. Perform agricultural research. municipalities and agencies in 2. Carry out projects designed to agencies in connection with connection with projects. improve blighted areas. Municipal Industrial 3. Seek aid from additional Development. sources to promote employment. 3. Assign revenues from projects 3. Acquire real or personal to the holders of bonds. property for activities related to Powers: 4. Undertake projects authorized projects. under the agricultural resource 4. Sell property associated with 1. Acquire property for creation loan guarantee program. projects. 4. May provide for the of development district that is tax administration of a commercial exempt. 5. May enter contracts and 5. Exempt from property taxes on building loan program to preserve employ financial specialists for nonresidential structures built for small sized buildings in its 2. Sell or lease land either by assistance. sale or rent until the building is district. private or public means. sold or rented;maximum time is 4 6. Issue bonds or notes for years. 5. May sell real or personal 3. Carry out EDA law to develop financing purposes. property for project related and improve land within the 6. May contractually limit its purposes. district.The EDA may make any ability to exercise authority, necessary arrangements to make allowing a municipality to enter 6. May sell its lands and land suitable for development. into a contract with bondholders. properties to private or public parties. Sale is dependent on 4. Exercise Eminent Domain. 7. Make all necessary contracts these parties' responsibility to in order to secure payments of its continue with the redevelopment 5. Enter into contracts for the bonds. plan specified by the HRA. purpose of economic development. 7. May act as federal government agent in carrying out provisions of 6. Purchase all materials needed Municipal Housing and to carry out development. Redevelopment Act. 7. Engage in research to 8. May exercise the powers determine factors of specified granted to redevelopment development projects. agencies under Minn. Stat. §§ 469.152 to 469.1651. 8. Act as a limited partner in contracts with additional parties. 9. Provide relocation payments and assistance in accordance with Cross reference powers: federal guidelines. 1. Exercise Industrial Development powers for HRA and EDA powers for industrial development activities. 31 Port Authorities: Municipal Development Districts: City Council , Purpose: Purpose: Purpose: Originally, the purpose behind port The purpose of an MDD is to improve the The main purpose of any City Council authorities was to acquire and promote general economy of a community by regarding the development units in this development of harbors and ports. increasing employment and enhancing the report,is to act as a control mechanism Currently,the only operating port in this tax base for operations. The power of the City regard is that of the Duluth Port Council and the controls it has over each Authority. The additional 25 port Governing Body: of these units varies from City to City. authorities in Minnesota exist to promote economic development, including The MDD falls under control of the City For Port Authority: increased commerce and acquisition of CounciUCounty Commissioners. The facilities within the specified port district council then designates a board to The City CounciUCounty of the City. administer the districts. In first class Commissioners of any port has indirect Cities,an advisory board must be created control over a port's use of general Governing Body: to aid with district activities. A majority obligations bonds used for industrial of members on the board must be real projects. City CounciUCounty A port authority is a governmental property owners on lands within the Commissioners has the authority to subdivision of the state.Direct authority is district. In St. Paul and Minneapolis the approve the board of commissioners for handled by a board of commissioners board must be elected,in other Cities the any port. If a seven-member board is (usually 3-7 members) appointed by the members may be appointed. developed,two members must be from City Council. Ports are a statutorily the City CounciUCounty created municipal body. Activities: Commissioners. General Port Activities: 1. An MDD may obtain land through For Municipal Development District: eminent domain or negotiation. I. Adopt plans for improvement and 2. The MDD may design a development City Council has the power to designate development of port districts. program within the district. an existing department,agency,HRA,or 2. Oversee the activities of privately 3. The MDD may further develop the other to administrate the district. owned port facilities. facilities,transportation,or overall quality 3. Acquire and construct various facilities of life in a district through building City Council may adopt ordinances and charge for the use of these facilities. acquisition, construction or designed to aid specific MDD projects. 4. Acquire,lease,own and operate real or reconstruction. personal property. 4. The municipality may be given The City has the power to create an 5. Sell or exchange property (real or ordinances regulating traffic in parking MDD advisory board. personal)owned by the port. facilities or pedestrian skyway systems. 6. Determine legislation to improve 5. A municipality may lease all or The City Council may defer property development and commerce within the portions of the basement,1st or 2nd floors taxes on improved property(within the district. of buildings within the district. district) where a private developer 7. Apply to the federal Foreign Trade 6. The MDD may accept grants from constructs the improvement upon request Board for authorization to exercise the private institutions or other sources for of the economic developer. powers relating to foreign trade zones. public facilities and general 8. Act as agent for the federal improvements. government to carry out the provisions of 7. The municipality may use private sections 469.090 to 469.108. developers to construct buildings/facilities 9. Issue Revenue Bonds and with the under the development plan.The City will approval of the City Council, given by reimburse the developers from MDD ordinance, General Obligation Bonds funds secured by a pledge of the"Full Faith and 8.A municipality has the authorization to: Credit"of the City. install lighting systems, street signs, construct special landscaping,install snow removal systems,and build public parking ramps. I 32 Port Authorities: City Council: (continued) (continued) 10. Contract with outside parties for the For Municipal Industrial Development port. Act: 11. Employ a director or additional staff as it deems necessary. City Council acts as the overall 12. Allow membership in organizations Governing Body with direct and indirect to advance port activities and provide control over municipal activities. funds for public relations assistance. For Rural Development Finance These powers granted to a port are Authority Act: connected with powers of industrial development districts: Inapplicable—County related. 1. Develop and improve property within For an HRA: an industrial district and make them adequate for industrial use. City Council approves appointees to the 2. Exercise the power of a City HRA Board of Directors. regarding mined underground development. City Council has certain powers of 3. Obtain rights and easements restrictions that may be enforced on the connected with industrial districts. HRA. Generally, projects and activities 4. Exercise the powers specified under must be approved by the City Council. Minn. Stat. §§ 469.152 to 469.1651 to further improve the purposes of sections For an EDA: 469.090 to 469.108(port authorities and industrial development districts). The City Council may establish an EDA 5. Enter into a partnership agreement by way of enabling resolution. It may where the port serves as a limited partner also determine the specific powers the only. EDA is to have in that 6. Receive for one dollar,tax forfeited resolution. land. 7. Use the power of eminent domain. City Council must have membership on 8. A port authority may create industrial the EDA Board of Commissioners. It development districts within the port may serve as the EDA Board of district. Commissioners in entirety or choose a 9. A port may obtain lands and facilities portion of members from the business required for industrial development community or general public. purposes. 10. Cooperate,and become an agent to City Council approves the Mayor's the federal government in carrying out appointments to the EDA Board of legislation concerned with operations in Directors. harbor and industrial districts. 11. Operate and maintain various parking systems and facilities to improve economic development. 33 SAMPLE BYLAWS AND ENABLING RESOLUTIONS EXTRACT OF MINUTES OF MEETING OF THE CITY COUNCIL OF THE CITY OF [NAMEOFCITY], MINNESOTA HELD: , [Year] Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of [NameofCity], Minnesota, was held at the [NameofCity] City Hall on , [Year], commencing at p.m. The following members of the Council were present: and the following were absent: Councilmember introduced the following Resolution and moved its adoption: RESOLUTION CALLING FOR PUBLIC HEARING ON THE QUESTION OF ESTABLISHING AN ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY IT IS HEREBY RESOLVED by the City Council of the City of[NameofCity], Minnesota,as follows: 1. Recitals. (a) The City is authorized pursuant to Minnesota Statutes, Sections 469.090 through 469.1082,to establish an Economic Development Authority for the City. (b) The Council desires to initiate the process for considering the establishment of an Economic Development Authority. 2. Public Hearing. The Council shall hold a public hearing on the question of establishing for the City an Economic Development Authority and the City Clerk is hereby authorized and directed to cause notice of that public hearing, substantially in the form attached to and made a part of this Resolution, to be published in the City's official newspaper once a week for two consecutive weeks prior to the scheduled public hearing date, with the first publication occurring no earlier than 30 days prior to the public hearing date. The motion for the adoption of the foregoing resolution was duly seconded by Councilmember and upon vote being taken thereon, the following voted in favor thereof: 34 and the following voted against the same: whereupon the resolution was declared duly passed and adopted and was signed by the Mayor and City Clerk. Adopted by the City Council on , [Year]. By Mayor Attest City Clerk I 35 NOTICE OF PUBLIC HEARING ON THE PROPOSAL TO ESTABLISH AN ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF [NAMEOFCITY],MINNESOTA Notice is hereby given that the City Council (the "Council") of the City of[NameofCity], Minnesota, will hold a public hearing on , [Year], at a meeting of the Council beginning at approximately p.m., at the [NameofCity] City Hall in the City of [NameofCity], Minnesota, relating to the question of the establishment by the City of an economic development authority (the "EDA") pursuant to Minnesota Statutes, Sections 469.090 through 469.1082. Following the public hearing the Council will consider an enabling resolution (the "Enabling Resolution") which would establish the EDA. The Enabling Resolution, a copy of which is on file and available for inspection in the City offices, would authorize the EDA to exercise all powers granted to such authorities pursuant to the above-mentioned statutes and would designate that the EDA would be governed by a five-member Board of Commissioners, all of whom would be members of the City Council. Upon approval of the Enabling Resolution, an organizational meeting of the EDA will be held on the same evening. All interested persons may appear at the public hearing and present their views orally or in writing. 36 STATE OF MINNESOTA ) COUNTY OF [NAMEOFCOUNTY] ) SS CITY OF [NAMEOFCITY] ) I, the undersigned, being the duly qualified and acting City Clerk of the City of [NameofCity], Minnesota (the "City"), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular or special meeting of the City Council held on , [Year], with the original minutes on file in my office and the extract is a full,true and correct copy of the minutes insofar as they relate to calling a public hearing on the question of establishing an Economic Development Authority for the City. Witness my hand as City Clerk and the official seal of the City on , [Year]. City Clerk (SEAL) 37 EXTRACT OF MINUTES OF MEETING OF THE CITY COUNCIL OF THE CITY OF [NAMEOFCITY],MINNESOTA HELD: , [Year] Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of[NameofCity], Minnesota, was held at the [NameofCity] City Hall on , [Year],commencing at p.m., C.T. The following members of the Council were present: and the following were absent: Councilmember introduced the following Resolution and moved its adoption: ENABLING RESOLUTION ESTABLISHING THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF [NAMEOFCITY],MINNESOTA, UNDER MINNESOTA STATUTES, SECTIONS 469.090 THROUGH 469.1082 BE IT RESOLVED by the City Council(the "Council")of the City of[NameofCity], Minnesota(the "City"),as follows: 1. Recitals. The City is authorized pursuant to Minnesota Statutes, Sections 469.090 through 469.1082 (the "Economic Development Authority Act"), to establish an economic development authority for the City and the Council desires to do so in order to promote certain economic, commercial, housing, and/or industrial development and redevelopment goals and objectives. The City has caused notice of a public hearing on the establishment by the City of an economic development authority to be published in a newspaper of general circulation in the City once each week for two consecutive weeks, and pursuant to such notice, a public hearing on the proposal has been held by the Council on the date hereof, at which hearing all persons desiring to present their oral or written comments on the proposal were given an opportunity to do so. 2. Establishment of Economic Development Authority. Pursuant to the Economic Development Authority Act, the Council hereby establishes an economic development authority for the City to be known as the Economic Development Authority of the City of[NameofCity], Minnesota (the "EDA"). The EDA shall be governed by a board of commissioners thereof consisting of five members, all of whom shall be members of the Council. Each Commissioner of the EDA who is a member of the Council shall cease to be a Commissioner effective at such time as he or she is no longer a member of the Council, and a successor Commissioner shall be 38 appointed pursuant to the Economic Development Authority Act to serve the remainder of the applicable term so vacated. [Revise to reflect if EDA Board consists of community members and council members.] 3. Powers. The EDA shall have all powers given to an economic development authority pursuant to the Economic Development Authority Act, as the same may be amended or supplemented. [Revise to reflect if City is limiting the powers of the EDA] The motion for the adoption of the foregoing resolution was duly seconded by Councilmember and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon the resolution was declared duly passed and adopted and was signed by the Mayor and City Clerk-Treasurer. Adopted by the City Council on , [Year]. By Mayor Attest Clerk 39 STATE OF MINNESOTA ) COUNTY OF [NAMEOFCOUNTY] ) SS CITY OF [NAMEOFCITY] ) 1, the undersigned, being the duly qualified and acting City Clerk of the City of [NameofCity], Minnesota (the "City"), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular or special meeting of the City Council held on , [Year],with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to an enabling resolution establishing the Economic Development Authority of the City of[NameofCity],Minnesota. Witness my hand as City Clerk and the official seal of the City on [Year]. City Clerk (SEAL) 40 RESOLUTION ORGANIZING THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF [NAMEOFCITY], MINNESOTA IT IS HEREBY RESOLVED by the Board of Commissioners (the "Board") of the Economic Development Authority of the City of [NameofCity], Minnesota (the "EDA") as follows: 1. Recitals. (a) On , [Year], the City of [NameofCity], Minnesota (the "City"), acting through its City Council, adopted an enabling resolution establishing the EDA pursuant to Minnesota Statutes, Sections 469.090 through 469.108. (b) The Board wishes to provide for the basic organization of the EDA, including appointment of officers and adoption of Bylaws. 2. Adoption of Bylaws and Appointment of Officers. The Board hereby (1) approves the Bylaws of the EDA, as presented on the date hereof for the Board's consideration, and (2) appoints and approves the following officers of the EDA (Note: the offices of President, Vice-President and Treasurer must be held by Boardmembers, but the offices of Secretary and Assistant Treasurer need not be; the offices of President and Vice-President must be held by different persons): President Vice-President Secretary Treasurer Assistant Treasurer The President shall be the chief presiding officer of the Board and shall have such other responsibilities as may be required by law or conferred on the President by resolution of the Board. In the absence of the President, the Vice-President shall assume all of said responsibilities of the President. The offices of President, Treasurer, and Secretary shall be elected annually, as required by law. The Secretary shall act as the chief recording officer for the Board and shall maintain a file of minutes of Board meetings and resolutions. In accordance with Minnesota Statutes, Section 469.096, Subdivision 8, all checks of the EDA shall be signed by the Treasurer and the Assistant Treasurer and shall state the nature of the claim for which the check is issued. As required by law,the EDA shall adopt an official seal. 3. Regular Meetings of the Board. The Board's regular meetings shall be held at such times as the Board may designate. 41 The following Boardmembers were present: and the following were absent: The motion for the adoption of the foregoing resolution was introduced by Boardmember and was duly seconded by Boardmember and upon vote being taken thereon,the following voted in favor thereof: and the following voted against the same: whereupon the resolution was declared duly passed and adopted and was signed by the President and Secretary. Adopted by the Board of Commissioners on , [Year]. By President Attest Secretary 42 STATE OF MINNESOTA ) COUNTY OF [NAMEOFCOUNTY] ) SS ECONOMIC DEVELOPMENT ) AUTHORITY OF THE CITY ) OF [NAMEOFCITY],MINNESOTA ) I, the undersigned, being the duly qualified and acting Secretary of the Economic Development Authority of the City of [NameofCity], Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular or special meeting of the Board of Commissioners held on , [Year], with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to a Resolution Organizing the Economic Development Authority of the City of [NameofCity], Minnesota. WITNESS my hand officially as Secretary on , [Year]. Secretary I 43 BYLAWS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF [NAMEOFCITY],MINNESOTA ARTICLE I-THE AUTHORITY Section 1. Name of Authority. The name of the Authority shall be the "Economic Development Authority of the City of [NameofCity], Minnesota" (which may sometimes be referred to as the "EDA" or the "Authority"), and its governing body shall be called the Board of Commissioners (the "Board"). The Board shall be the body responsible for the general governance of the Authority and shall conduct its official business at meetings thereof. Section 2. Seal of Authority. As required by Minnesota Statutes, Section 469.096, Subdivision 1, the Authority shall have an official seal, which shall be in the form depicted on Exhibit A. Section 3. Office of Authority. The offices of the Authority shall be the [NameofCity] City Hall. ARTICLE II - OFFICERS Section 1. Officers. The officers of the Authority shall be a President, a Vice- President, a Treasurer, an Assistant Treasurer and a Secretary. The President,the Vice-President and the Treasurer shall be members of the Board and shall be elected annually, and no Commissioner may be both President and Vice-President simultaneously. The Assistant Treasurer and the Secretary need not be members of the Board. Section 2. President. The President shall preside at all meetings of the Board. Except as otherwise authorized by resolution of the Board, the President and the Secretary (the Vice-President, in the Secretary's absence or incapacity) shall sign all contracts, deeds and other instruments made or executed by the Authority, except that all checks of the Authority shall be signed by the Treasurer and Assistant Treasurer. At each meeting the President shall submit such recommendations and information as he or she may consider proper concerning the business,affairs, and policies of the Authority. Section 3. Vice-President. The Vice-President shall perform the duties of the President in the absence or incapacity of the President; and in case of the resignation or death of the President, the Vice-President shall perform such duties as are imposed on the President until such time as the Board shall select a new President. Section 4. Secretary. The Secretary shall keep minutes of all meetings of the Board and shall maintain all records of the Authority. The Secretary shall also have such additional duties and responsibilities as the Board may from time to time and by resolution prescribe. 44 Section 5. Treasurer. The Treasurer shall have the care and custody of all funds of the Authority and shall deposit the same in the name of the Authority in such bank or banks as the Board may select. The Treasurer and Assistant Treasurer shall sign all orders and checks for the payment of money and shall pay out and disburse such moneys under the direction of the Board. The Treasurer shall keep regular books of accounts showing receipts and expenditures and shall render to the Board, at least annually (or more often when requested), an account of such transactions and also of the financial condition of the Authority. The Treasurer shall post a bond as required by Minnesota Statutes, Section 469.096, Subdivision 6. The Assistant Treasurer shall act as the Treasurer's agent and assistant to perform the above-described duties, subject to the Treasurer's approval thereof. Section 6. Additional Duties. The officers of the Authority shall perform such other duties and functions as may from time to time be required by the Board or the bylaws or rules and regulations of the Authority. Section 7. Vacancies. Should the office of President, Vice-President, Treasurer, Assistant Treasurer or Secretary become vacant, the Board shall elect a successor at the next regular meeting, or at a special meeting called for such purpose, and such election shall be for the unexpired term of said officer. Section 8. Additional Personnel. The Board may from time to time employ such personnel as it deems necessary to exercise its powers, duties, and functions. The selection and compensation of such personnel shall be determined by the Board. ARTICLE III- MEETINGS Section 1. Regular Meetings. The regular meetings of the Board shall occur according to a meeting schedule, if any, adopted or revised from time to time by resolution of the Board. Section 2. Special Meetings. Special meetings of the Board may be called by the President or any two members of the Board for the purpose of transacting any business designated in the call. The call for a special meeting may be delivered at any time prior to the time of the proposed meeting to each member of the Board or may be mailed to the business or home address of each member of the Board at least two (2) days prior to the date of such special meeting. At such special meeting no business shall be considered other than as designated in the call, but if at least four members of the Board are present at a special meeting, any and all business may be transacted at such special meeting. Notice of any special meeting shall be posted and/or published as may be required by law. Section 3. Quorum. The powers of the Authority shall be vested in the Board. Three Commissioners shall constitute a quorum for the purpose of conducting the business and exercising the powers of the Authority and for all other purposes, but a smaller number may adjourn from time to time until a quorum is obtained. When a quorum is in attendance, action may be taken by the Board upon a vote of a majority of the Commissioners present. 45 Section 4. Order of Business. At the regular meetings of the Board the following shall be the order of business: 1. Roll call. 2. Approval of the minutes of previous meeting. 3. Bills and communications. 4. Reports. 5. Unfinished business. 6. New business. 7. Adjournment. All resolutions shall be written or transcribed and shall be retained in the journal of the proceedings maintained by the Secretary. Section 5. Adoption of Resolutions. Resolutions of the Board shall be deemed adopted if approved by not less than a simple majority of all Commissioners present,unless a different requirement for adoption is prescribed by law. Resolutions may but need not be read aloud prior to vote taken thereon and may but need not be executed after passage. Section 6. Rules of Order. The meetings of the Board shall be governed by the most recent edition of Robert's Rules of Order. ARTICLE IV- MISCELLANEOUS Section 1. Amendments to Bylaws. The bylaws of the Authority shall be amended only by resolution approved by at least three of the members of the Board. Section 2. Fiscal Year. The fiscal year of the Authority shall coincide with the fiscal year of the City of[NameofCity],Minnesota. Adopted on , [Year]. 46 Exhibit A Form of Official Seal 47 SAMPLE JOB DESCRIPTION POSITION TITLE: Economic Development Director DEPARTMENT: Economic Development ACCOUNTABLE TO: City Administrator PRIMARY OBJECTIVE OF POSITION: Serves as chief staff to the Economic Development Authority, planning, directing, and implementing the economic development efforts of the City under the direction of the Authority. Performs highly skilled, managerial, coordinative and technical tasks. Generates business leads, promotes business retention and expansion, creates a positive attitude for development and raises supportive public awareness for strategic economic planning and development. DUTIES AND RESPONSIBILITIES: 1. Prepares, organizes and implements a coordinated target marketing program to generate leads for specific business and industry. 2. Researches, designs, recommends and implements programs to encourage location of new businesses and expansion of existing businesses within the City. Coordinates resources of public and private sectors - i.e. Federal and State Grants, Industrial Development Bonds and SPA Loans, Tax Increment Financing, banks, mortgage companies, etc. 3. Develops strategies and programs for allocation and delivery of City/Authority financial assistance resources. 4. Maintains contacts with Minnesota Department of Employment and Economic Development, area Development Corporations, and area commercial and industrial real estate brokers and developers. 5. Maintains current inventory of potential business location sites within the City - both building and vacant land, including contact persons. 6. Maintains updated demographic data, promotional materials and existing building lists for economic development programs. 7. Works with prospective businesses to tailor a proposal suited to their specific needs, including alternative locations and financing packages. 1 48 8. May negotiate economic incentive packages with prospective businesses. Analyzes financial needs of specific companies to insure that public/Authority resources are applied judiciously. 9. Maintains contact with current businesses to stay abreast of their future business plans and needs. 10. Identifies and contacts prospective clients for location and expansion within the City. 11. Assists locating or expanding businesses in understanding and anticipating comprehensive plan locations, zoning districts, standards and processes. Works closely with City Planning, Building Inspections, and Engineering Divisions to help facilitate a smooth review process. 12. Periodically reviews all economic development programs for effectiveness, making recommendations to Authority and City officials for changes as deemed appropriate. 13. Participates in exhibitions, seminars, media events and the like to attract businesses to the City. 14. Limited travel may be required to attend conferences, meet with prospective clients, research potential problems,financing, etc. 15. Prepare annual budget and work program for submission to the Authority and City Council. 16. Provide quarterly and annual report to the Authority and City Council regarding status of work program, future program potentials and activities of the staff. 17. Serves as chief staff support to Economic Development Authority. Prepares agendas and background information reports for Authority meetings. Attends meetings of the Authority, Chamber of Commerce, City Council, etc. and follows up staff responsibilities as assigned. 18. Completes other duties as assigned by the Economic Development Authority. KNOWLEDGE, SKILLS AND ABILITIES 1. Thorough working knowledge of the principles, practices and procedures of economic development. 2. Ability to organize and coordinate support from professional and technical City staff, legal consultants, other government agencies, private business, and the financial services industry. 49 3. Ability to analyze the economics of a particular business location or expansion project, so as to make independent judgments about the effectiveness of financial assistance or inducements. 4. Ability to establish and maintain contacts and effective working relationships with potential business clients. QUALIFICATIONS 1. Bachelor's Degree in Public Administration, Business Administration, or a closely related field highly desirable. 2. Minimum of three years of experience working in economic development, preferably at the local government level. 3. A demonstrated record of ongoing continuing education in economic development. I 50 SAMPLE REVOLVING LOAN FUND POLICY Oakdale Seed Fund Purpose The purpose of the Oakdale Seed Fund is to expand the tax base and promote new job opportunities by providing small business concerns and developers of multi-tenant facilities with a portion of the financing necessary for their projects. These Administrative Procedures set forth the organization and guidelines for personnel engaged in making loans through the Seed Fund. All personnel engaged in interviewing applicants for Fund assistance and accepting, screening, processing applications and servicing loans for the program should become familiar with this information. The procedures are for use by private lenders as well as staff employed by the City of Oakdale. Scope of EDA/ Seed Fund Activities Purpose The administrative procedures are a guideline for personnel working with the Oakdale Seed Fund. They set forth the internal requirements of the program and how it should be managed by the Oakdale EDA. The EDA was created with the intention of assisting small businesses primarily by providing financial assistance for growth and expansion. The EDA and the Seed Fund are intended to provide such assistance within the specified boundaries of the City of Oakdale. Any revenue generated by the Seed Fund to the EDA is incidental to the community benefits as measured by the creation and retention of jobs, increased tax base, expanded business ownership activities and improved community services. Authority Chapter 469 of the Minnesota State Statutes as amended authorizes the EDA to make loans to prospective private businesses. Recipients of financial assistance under this program are subject to non-discrimination requirements of the laws and policies governing such government assistance. I 51 Project Financed By the Oakdale Seed Fund The purpose of the Oakdale Seed Fund is to provide assistance to small business.This may occur by directly providing fmancing to the small business or indirectly by providing financing to a developer who will build a facility to assist a small business. Eligible Applicant Defined Applicants may be small businesses or developers that are organized as a proprietorship,partnership or corporation. Size Eligibility For Businesses For purposes of the Oakdale Seed Fund, a business may qualify if its sales are less than $6 million annually for each of the last two fiscal years preceding the application for assistance from the fund. The Economic Development Authority may make exceptions to this rule on a case-by-case basis. Sound Business Purpose The proceeds from a loan made through the Oakdale Seed Fund are to be used to assist an identifiable small business concern or a developer in accomplishing a sound business purpose. A sound business purpose would not exist if any of the following conditions occur: a) If the project proposed will destabilize existing multi-tenant facilities or have an adverse impact on them. b) If it is to accomplish an expansion or conversion which is unwarranted in light of the small business concern's past experience and management ability. Ineligible Projects a) Retail businesses b) Nonprofit institutions c) Gambling organizations d) Lending or investment organizations e) Land held primarily for sale or investment Project Costs "Project costs"should be limited to direct expenditures necessary to acquire, construct,convert,or expand a business including site 52 improvements and professional fees directly attributable and essential to a project such as survey, engineering, architectural, legal and accounting. In this context legal expenditures for such items as zoning changes title searches,title insurance,recording fees,etc.,which are clearly essential to the total project can be included as project costs. While there is considerable flexibility in determining the composition of a project, in general it should be a productive asset when competed. In the classic sense,this would be land,building,machinery,and equipment. Elements of Project Costs In developing the aggregate project costs for the Oakdale Seed Fund the following guidelines will be used: Land Valuation of land injected by the small business concern into the project should be at the appraised value based on an appraisal acceptable to the EDA. The appraisal should conform with current bank regulatory requirements. Land Improvements Improvements which are paid through special tax assessments or user fees should not be included in determining project costs. Improvements to the land which are a portion of the project cost could include but are not limited to the following: 1) Grading 2) New streets or street improvements including curb and gutter 3) Parking lots 4) Utilities—water, sewer, gas, electric or 5) Landscaping Purchased and/or Remodel an Existing Building The cost of purchasing an existing building generally includes the value of the land and applicable fees and charges required to gain clear title to the property. Purchasing an existing facility with funds provided by the Oakdale Seed Fund is permissible. I 53 Building Construction Construction includes the erection of a new building and/or a major addition to an existing building. Purchase Machinery and Equipment Oakdale Seed Fund proceeds can be used to finance the purchase of major items of machinery and equipment independent of land and building. These items are defined to have a useful life of at least 7 years. The term of the loan will be commensurate with the life of the asset. Ineligible Project Costs The following costs should not be construed as part of the project costs under this program. a) Management fees b) Financing costs and fees c) Franchise fees d) Debt consolidation e) Moving costs Leasehold Improvements Financing should be permitted for leasehold improvements including construction on leased land. The lease should be equal to or greater than the term of the loan. The remaining economic life of the facility or leasehold improvements should be equal to or greater than the term of the Seed Fund loan. Financing may be provided if the land or building owner allows the EDA to secure lien positions on the land or building and improvements, sufficient to fully secure its exposure or if other collateral sufficient in value to fully protect the interest of the Oakdale EDA is offered. Limited or Single Purpose Assets The construction or the purchase of limited use assets should not be financed under the Oakdale Seed Fund unless the liquidating value of the asset plus other available collateral, if sold, would be 54 sufficient to protect the Oakdale EDA from realizing a substantial loss. Working Capital Proceeds from an Oakdale Seed Fund loan should not be used for working capital or to refinance prior obligations of the small business concern. Availability of Personal Resources Since the primary focus of the Oakdale Seed Fund is economic development, personal resources of the owners or principals of the small business concern should not usually disqualify the small business concern from receiving assistance. Where credit factors indicate the need for additional capitalization, the injection of personal resources may be required to make the loan credit-worthy. Personal Guarantees The EDA should require the personal guaranty of any person owning 20% or more of the small business concern regardless of the form of ownership. Participants and Structure of Project Financing Maximum Private Sector Exposure The Oakdale Seed Fund is designed to foster projects contributing to sound economic growth in Oakdale in such a way that maximum private sector exposure is stimulated and encouraged. The Seed Fund should not be a substitute for conventional business financing or be used in place of other specialized state, federal or local programs that may be better suited to the specific project needs. In most Seed Fund projects a private sector lender will make a separate secured loan equal to a certain percentage of the total project cost and will usually be secured by a senior lien on project assets acquired with the financing. The EDA's share of the project financing will usually be secured by a junior lien position on project assets. The EDA will use the Seed Fund to participate with the private sector lender in making the total loan to the small business concern. Private Sector Lender Financing may be provided by regulated and/or non-regulated financial institutions or noninstitutional sources if they are in the business of providing financing for commercial purposes and they are not associated with the small business concern receiving 55 financial assistance. The terms and conditions of such financing must be acceptable to the Oakdale EDA based on the small business concern's ability to repay the Oakdale Seed Fund Loan. Interest Rate The lender and EDA may establish their own rate provided the rate is legal and reasonable. The lender and EDA may charge either a fixed or variable rate of interest on their loan. A renegotiable rate of interest is acceptable provided terms and conditions are established and agreed to both by the Oakdale EDA and the lender at the time of the loan approval. The EDA must be aware of the lender's terms and conditions in assessing the small business concern's ability to repay the Oakdale Seed Fund Loan. Balloon Payment Such payments may be considered where circumstances warrant their use. Amount The maximum amount of private lender financing should be included in each project. At least 50%of the project cost should be funded by a private lender. Maturity Maturity must be reasonable in relation to the life of the asset being financed. In no instance should the maturity of the Oakdale Seed Fund Loan exceed the maturity of the loan being provided by the private lender. Personal Guarantees The EDA requires the personal guaranty of any person owning 20% or more of the small business concern regardless of the form of ownership. Where ownership ranges from 5% to 19% the requirement for personal guarantees is discretionary. A partial guarantee may be considered for less than the total amount of the loan. Generally,a guaranty will not be required where ownership is less than 5%. Alter Ego Loans For tax and other reasons some small business owners prefer to separate the ownership of the asset from the operating small business concern. In such cases the small business owners form two legal entities: One entity owns part or all of the fixed assets and the other entity is the operating company. Loans will be permitted to the "alter ego" (passive concern) which is an eligible small business concern when: a) The applicant (passive concern) is a business entity that is organized and operated for profit, whether operating as an individual proprietorship,partnership or corporation; 56 b) The operating small business concern is an eligible small business and the proposed use of proceeds would be allowable for such assistance if the operating small business concern were the owner of the property that is owned or to be owned by the applicant; c) The ownership interests in the applicant shall be completely identical with and in the same proportion as the ownership interest in such operating small business concern; d) Collateral includes an assignment of the lease between the applicant and the operating small business concern and a lien on the property itself. The lease, including options, shall be for a term of not less than the term of the loan; e) The operating small business concern must be either a guarantor or co-borrower, and any owners of 20% or more of the equity of the operating small business concern and of the applicant must also guarantee the loan. Franchises A franchise is eligible for the Oakdale Seed Fund if the franchise has the right to profit from his/her efforts commensurate with ownership and is eligible in all other respects. Franchises are ineligible only in the exceptional cases where the franchise agreement disguised as a contract of employment under the guise of a franchise operation. Where royalty or similar payments must be made by the borrower to the franchisor, a condition should be considered that prohibits such payment as long as the EDA loan is in default. Where credit factors warrant, guarantee of the franchisor should also be considered. Operational Requirements Responsibilities of the EDA/Oakdale Seed Fund The Oakdale EDA/Seed Fund will offer its assistance to small business in need of financing. It will cooperate with other lenders participating in projects. The EDA and the Seed Fund are able to: a) Package and process loan applications b) Close and service loans c) Make available management services or cause such services to be made available I 57 d) Maintain the organizational and operational requirements set forth in these administrative guidelines Disclosure of Information On a loan application, no recommendation of any individual, (including a loan officer, city staff person or EDA board member) may be divulged directly or indirectly to an applicant, or to any of its representatives or any other unauthorized source. Only final EDA actions may be released. Diversified Portfolio The EDA will not concentrate the Seed Fund in any one type of industry. The EDA is encouraged to make loans to a variety of businesses in different industries. The Oakdale Seed Fund is designed primarily to assist existing healthy businesses to grow and create jobs. While new businesses (businesses in existence for less than two years) do create jobs, they should be considered for Seed Fund financing only after careful scrutiny as to management capability, experience, and financial support. Place of Business The EDA shall maintain an accessible place of business open to the public during regular business hours and maintain staff adequate to perform normal business transactions. The EDA's place of business shall be located within the Community Development Department of the Oakdale City Hall. Fiscal Year The EDA shall choose and establish a fiscal year. The EDA is encouraged to establish a fiscal year which coincides with the City's fiscal year(January 1 through December 31). Records The EDA shall maintain financial records including books of accounts and minutes of all meetings of the directors. All records and supporting documents relating to the EDA's transactions shall be kept at its' principal office. Records and documents which are the basis for or related to the financial statements or loans shall be preserved for the periods required by the Internal Revenue Service (IRS) in accordance with generally accepted accounting practices. Maintaining Loan Portfolio Documents The EDA shall develop a filing and control system which ensures that the following information and documents relating to its loan portfolio are available at its principal office. The EDA filing 58 system must contain information and documents related to each loan made through the Seed Fund as follows: 1) Loan application including all exhibits; 2) Loan authorization and all correspondence related to the loan prior to closing; 3) Loan closing documents including all documents relating to participation with the private lender; 4) Evidence of a 10% equity injection by the small business concern; 5) Amortization schedule; 6) Financial statements of the small business concern; 7) Related correspondence; 8) Evidence of field visits; 9) Condition of collateral; 10) Tickler file for insurance and UCC; 11) Evidence that taxes and insurance have been paid; 12) All other items relating to the loan. Restrictions Conflicts of Interest/Self-Dealing Self-dealing by the EDA, its Board of Directors, employees or any other related parties to the prejudice of the small business concern, or the EDA is prohibited. The EDA shall not permit a significant relationship to exist or to be created between the EDA and a small business concern to be assisted while assistance through the Seed Fund is outstanding. Servicing Capability In most cases,the EDA will service the loan. The EDA may require that the private lender to service the loan. In this instance, a servicing agreement will be completed between the private lender and the EDA. Costs of servicing will be paid for by the applicant. 59 Notice of Default In cases where the private lender is servicing the loan, the lender must agree to furnish the Oakdale EDA with written notice of any default by the small business concern within thirty(30) days of the date of default. The lender must give the Oakdale EDA sixty (60) days notice prior to a foreclosure sale. This agreement must incorporate provisions providing for a timely written notification from the lender to the Oakdale EDA of any default,delinquency by the small business concern on the lender's portion of the financing and the right of the Oakdale EDA to an immediate purchase of the lender's senior position in the loan thereby allowing the EDA the opportunity to protect its position and to avoid the accumulation of legal costs,preservation expenses, etc. Loan Processing Repayment ability An Oakdale Seed Fund Loan must be secured so as to reasonably assure repayment. Reasonable assurance of repayment takes into consideration earnings, management ability and financial condition of the borrower as well as the value of collateral. Process for Analyzing Loan Applications The intake of loan applications will be completed by the Community Development Department staff of the City of Oakdale. Upon receipt of a complete application, the staff will complete an initial review to determine the ability of the program to address the identified financing need. If the project meets the intent and general parameters of the program, the application will be forwarded to the city's economic development consultant who will complete additional due diligence work on the application. The consultant will provide a report on the loan request to the Loan Committee of the EDA. The loan committee will make a recommendation to the Economic Development Authority who will make the final decision on the loan request. Credit Information and Credit Reports Upon receipt of the loan application, a credit report will be ordered from the private lender participating in the project. The report will be provided to the Oakdale EDA if the lender receives permission from the borrower. If the application package includes an acceptable credit report or sufficient credit information is supplied by the small business concern/lender or is available from other sources a new credit report may not be needed. Letters should be written by the private lender to credit references and others where I 60 t necessary to determine the applicant's credit standing. Telephone contact should be made with credit references where appropriate. Credit Requirement The small business concern must meet certain practical credit requirements including the following: 1) The applicant must be in good character as determined by the private lender and the Oakdale EDA. 2) There must be evidence that management has the ability to operate the business successfully. 3) The small business concern must have enough capital in the business so that with the assistance through the Oakdale EDA and Seed Fund it will be possible for the business to operate on a sound financial basis. 4) While the questions of security and collateral are important in determining whether financial assistance will be extended, they are not the only factors upon which the approval or rejection of an application is determined. The Oakdale EDA attaches great importance to management, the inherent soundness of the small business concern, the small business concern's earnings records and prospects, the small business concern's long-range possibilities for successful operation and whether the granting of financial assistance will increase employment or have other favorable effects on the economy of the City of Oakdale. Financial Statement Requirements The loan officer of the private lender must evaluate the reliability of the financial statement submitted. All statements must be signed and dated by the proprietor, a partner, or unauthorized office of the applicant unless they are accompanied by an independent accountant's report. Statements submitted on a compilation basis must be signed by the small business concern owner or designated officer. Business Financial Statements I 61 Balance sheets, profit and loss statements and statement of change in financial position are normally required for the preceding two full years. In addition, an interim statement for the current period is required when the application is received more than ninety(90)days after the end of the last fiscal year. An aging of accounts receivable and payables should accompany the interim balance sheet. Analysis of Loan Applications Additional Data Additional financial data or written explanation may be required where necessary for an adequate analysis. This is especially true for new businesses or for existing businesses planning major changes in their operations. Both cases should require earnings projections. Cash flows or other types of data may be required where deemed necessary and appropriate. Personal Financial Statements Personal financial statements are required for proprietors, general partners each owner of 20%or more of the business including limited partners and guarantors. All statements must be signed and dated. Processing Time All loans are to be processed within thirty (30) working days. The processing cycle will begin with the day the application is received as indicated by a date stamp and ends when the loan authorization is issued. Time awaiting the receipt of additional information will be excluded from the processing time. If major delays are anticipated in receiving additional information to complete the package, the application will be returned to the small business concern within three(3)working days. Loan Servicing There are two options for loan servicing. The EDA may elect to have loans serviced by lenders participating in the financing for any project or service the loan internally. The EDA may require the servicer to obtain and review the financial statements of the small business concern annually; review the small business concern's payment of taxes and insurance, review the uniform commercial code filings on 62 collateral and monitor other financing senior to the loan to assure that payments are current. The EDA may also require the servicer to make field visits as necessary to review the condition of collateral and report to the EDA any default or any other adverse trend condition or information as they occur and take or propose remedial servicing actions as ordinarily performed by a prudent lender. The EDA will provide written instructions to the servicer outlining the services that need to be provided as a part of the servicing contract. In addition, the servicer will not, without the prior written authorization of the Oakdale EDA, authorize any actions regarding the EDA loan including: 1) Make or consent to any substantial alteration in the terms of the loan instrument. 2) Make or consent to release of collateral. 3) Accelerate the maturity of the note. 4) Sue upon the loan instrument. 5) Waive any claim against borrower, guarantor, obligor or stand-by creditor arising out of the loan instrument. 6) Directly or indirectly charge or receive a bonus, fee, commission or other payment or benefit in connection with the making and servicing of the loan except as authorized by the program. 7) Require or obtain any funds, certificates of deposit or compensating balance not under the unrestricted control of the small business concern or any other agreement establishing any preference in favor of the lender. Repayment The servicer is required to ensure the timely forwarding of the small business concern's monthly payment to the Oakdale Seed Fund. 1 63 Upon request,this information can be made available in alternative formats. For more information,email economic.development @state.mn.us or call 651-259-7432. DEED is an equal opportunity employer and service provider. 64 ,` L . CITY OF FARMINGTON DAKOTA COUNTY,MINNESOTA RESOLUTION NO. RESOLUTION ENABLING THE CREATION OF AN ECONOMIC DEVELOPMENT AUTHORITY IN THE CITY OF FARMINGTON, MINNESOTA BE IT RESOLVED by the City Council of the City of Farmington,Minnesota: SECTION 1. BACKGROUND AND FINDINGS. 1.01 The City is authorized by Minnesota Statutes, Chapter 469 ("the Act") and specifically Section 469.091, to establish an Economic Development Authority to coordinate and administer economic development and redevelopment plans and programs of the City of Farmington. 1.02 The encouragement and financial support of economic development and redevelopment in the City is vital to the orderly development and financing of the City and in the best interests of the health,safety,prosperity,and general welfare of the citizens of the City. 1.03 The economic development and redevelopment of the City can best be accomplished by the establishment of an Economic Development Authority as authorized by the Act. 1.04 The City Council has in accordance with the Act and Section 469.093 provided public notice and conducted a public hearing on August 15, 2005, concerning the establishing of an Economic Development Authority at which hearing all persons desiring to express their views were heard. SECTION 2. ENABLING RESOLUTION. 2.01 The Economic Development Authority of the City of Farmington,Minnesota ("EDA") is hereby established. The EDA is a public body corporate and politic and a political subdivision of the State of Minnesota. 2.02 Subject to the limitations contained in this Resolution, the EDA is granted the powers contained in Minnesota Statutes Sections 469.090 to 469.108, and the powers of a housing and redevelopment authority under Minnesota Statutes Sections 469.001 to 469.047 or other law. 12-9 2.03 The EDA consists of a governing body of seven(7)commissioners. Members shall be citizens of the United States and residents of the City. Two seats shall be held by sitting members of the City Council.The remaining seats shall be filled by citizens appointed by the Mayor and approved by the City Council. The terms of the Council members shall be concurrent with the Council members' City Council terms and shall expire at the same time as the members' Council terms of office.The remaining five (5)members will be appointed to one(1),two (2),three(3),four(4)and five(5)year terms initially. Subsequent appointments to the five(5)seats filled by citizens will be for six(6)year terms. SECTION 3. LIMITS OF POWERS. 3.01 The following limits shall apply to the Economic Development Authority and its operation: (a) The sale of all bonds or obligations issued by the EDA shall be first approved by the City Council. (b) The EDA shall follow the budget process for City Departments as may be provided by the City and as implemented by the City Council and Administrator. (c) All official actions of the EDA must be consistent with the City Comprehensive Plan and official controls implementing the Comprehensive Plan. 3.02 This enabling Resolution may be modified by the City to make any changes as authorized by the Act. 3.03 As provided in the Act, it is the intention of the City Council that nothing in this Resolution nor any activities of the EDA shall be construed to impair the obligations of the City under any of its contracts or to affect in any detrimental manner the rights and privileges of a holder of a bond or other obligation heretofore issued by the City. The City Council shall not modify any limit in effect at the time any bonds or obligations are issued or contracts executed to the detriment of the holder of the bonds or obligations or any contracting party. SECTION 4. TRANSFER OF AUTHORITY OF FARMINGTON HOUSING AND REDEVELOPMENT AUTHORITY. 4.01 Pursuant to the authorization of Minnesota Statutes Section 469.094,the City of Farmington hereby transfers to the Economic Development Authority of the City of Farmington established by this Resolution, all activities,programs,operations, and authority of the existing City of Farmington Housing and Redevelopment Authority ("HRA"), including the transfer of the control, authority, and operation of any project as defined in Section 469.174,Subd. 8,or any other program or project authorized by Sections 469.001 to 12-10 469.047, or Sections 469.124 to 469.134 located within the City of Farmington. The EDA shall accept the control,authority,and operation of all projects,programs,or activities of the HRA. The EDA shall exercise all of the powers that the HRA could exercise. This transfer of authority from the HRA to the EDA shall be effective January 1,2006. 4.02 The EDA shall covenant and pledge to perform the terms, conditions, and covenants of the bond indenture or other agreements executed for the security of any bonds issued by the Farmington Housing and Redevelopment Authority. The EDA shall exercise all of the powers necessary to perform the terms,conditions,and covenants of any indenture or other agreements executed for the security of the bonds and shall become obligated on any such bonds by reason of the transfer as provided in this Resolution. 4.03 All employees, if any, of the BRA as of December 31, 2005, are hereby transferred to the authority; direction, supervision, and control of the EDA. The placement of any employees under this direction,supervision,or control of the EDA does not affect the rights of any employees of the previously existing HRA. Any employees of the BRA shall become employees of the EDA. SECTION 5. IMPLEMENTATION. 5.01 The City Council shall from time to time adopt such ordinances and resolutions as are required and permitted by the Act to give full effect to this Resolution. 5.02 The Mayor, the City Administrator, and other appropriate City officials are authorized and directed to take the actions and execute and deliver the documents necessary to give full effect to this Resolution. PASSED AND DULY ADOPTED by the City Council of the City of Farmington this day of ,2005. Mayor Attested to the day of August,2005. City Administrator SEAL 1 2-1 1 469.090, 2011 Minnesota Statutes Page 1 of 1 2011 Minnesota Statutes 469.090 DEFINITIONS. Subdivision 1. Generally. In sections 469.090 to 469.108, the terms defined in this section have the meanings given them herein, unless the context indicates a different meaning. Subd. 2. Authority. "Authority" means an economic development authority. Subd. 3. City. "City" means a home rule charter or statutory city. Subd. 4. Development. "Development" includes redevelopment, and "developing" includes redeveloping. Subd. 5. Cost of redevelopment. "Cost of redevelopment" means, with respect to an economic development district project, the cost of: (1) acquiring property, whether by purchase, lease, condemnation, or otherwise; (2) demolishing or removing structures or other improvements on acquired properties; (3) correcting soil deficiencies necessary to develop or use the property for an appropriate use as determined by the authority; (4) constructing or installing public improvements, including streets, roads, and utilities; (5) providing relocation benefits to the occupants of acquired properties; (6) planning, engineering, legal, and other services necessary to carry out the functions listed in clauses (1) to (5); and (7) the allocated administrative expenses of the authority for the project. History: 1987 c 291 s 91 https://www.revisor.mn.gov/statutes/?id=469.090 5/7/2012 469.091, 2011 Minnesota Statutes Page 1 of 1 2011 Minnesota Statutes 469.091 ECONOMIC DEVELOPMENT AUTHORITY. Subdivision 1. Establishment. A city may, by adopting an enabling resolution in compliance with the procedural requirements of section 469.093, establish an economic development authority that, subject to section 469.092, has the powers contained in sections 469.090 to 469.108 and the powers of a housing and redevelopment authority under sections 469.001 to 469.047 or other law, and of a city under sections 469.124 to 469.134 or other law. If the economic development authority exercises the powers of a housing and redevelopment authority contained in sections 469.001 to 469.047 or other law, the city shall exercise the powers relating to a housing and redevelopment authority granted to a city by sections 469.001 to 469.047 or other law. Subd. 2. Characteristics. An economic development authority is a public body corporate and politic and a political subdivision of the state with the right to sue and be sued in its own name. An authority carries out an essential governmental function when it exercises its power, but the authority is not immune from liability because of this. Subd. 3. Unpaid officers, directors, and agents; liability. Section 317A.257 applies to an economic development authority or to a nonprofit corporation exercising the powers of an economic development authority. History: 1987 c 291 s 92; 1994 c 623 art 5 s 2 https://www.revisor.mn.gov/statutes/?id=469.091 5/7/2012 ' 469.092,2011 Minnesota Statutes Page 1 of 2 • 2011 Minnesota Statutes 469.092 LIMIT OF POWERS. Subdivision 1. Resolution. The enabling resolution may impose the following limits upon the actions of the authority: (1) that the authority must not exercise any specified powers contained in sections 469.001 to 469.047, 469.090 to 469.108, and 469.124 to 469.134 or that the authority must not exercise any powers without the prior approval of the city council; (2) that, except when previously pledged by the authority, the city council may by resolution require the authority to transfer any portion of the reserves generated by activities of the authority that the city council determines is not necessary for the successful operation of the authority to the debt service fund of the city, to be used solely to reduce tax levies for bonded indebtedness of the city; (3) that the sale of all bonds or obligations issued by the authority be approved by the city council before issuance; (4) that the authority follow the budget process for city departments as provided by the city and as implemented by the city council and mayor; (5) that all official actions of the authority must be consistent with the adopted comprehensive plan of the city, and any official controls implementing the comprehensive plan; (6) that the authority submit all planned activities for influencing the action of any other governmental agency, subdivision, or body to the city council for approval; (7) that the authority submit its administrative structure and management practices to the city council for approval; and (8) any other limitation or control established by the city council by the enabling resolution. Subd. 2. Modification of resolution. The enabling resolution may be modified at any time, subject to subdivision 5, and provided that any modification is made in accordance with this section. Subd. 3. Report on resolution. Without limiting the right of the authority to petition the city council at any time, each year, within 60 days of the anniversary date of the first adoption of the enabling resolution, the authority shall submit to the city council a report stating whether and how the enabling resolution should be modified. Within 30 days of receipt of the recommendation, the city council shall review the enabling resolution, consider the recommendations of the authority, and make any modification it considers appropriate. Modifications must be made in accordance with the procedural requirements of section 469.093. https://www.revisor.mn.gov/statutes/?id=469.092 5/7/2012 469.092, 2011 Minnesota Statutes Page 2 of 2 • Subd. 4. Compliance. The city council's determination that the authority has complied with the limitations imposed under this section is conclusive. Subd. 5. Limits; security. Limits imposed under this section must not be applied in a manner that impairs the security of any bonds issued or contracts executed before the limit is imposed. The city council must not modify any limit in effect at the time any bonds or obligations are issued or contracts executed to the detriment of the holder of the bonds or obligations or any contracting party. History: 1987 c 291 s 93 https://www.revisor.mn.gov/statutes/?id=469.092 5/7/2012 ' 469.093, 2011 Minnesota Statutes Page 1 of 1 2011 Minnesota Statutes 469.093 PROCEDURAL REQUIREMENT. Subdivision 1. Enabling resolution. The creation of an authority by a city must be by written resolution referred to as the enabling resolution. Before adopting the enabling resolution, the city council shall conduct a public hearing. Notice of the time and place of hearing, a statement of the purpose of the hearing, and a summary of the resolution must be published in a newspaper of general circulation within the city once a week for two consecutive weeks. The first publication must appear not more than 30 days from the date of the public hearing. Subd. 2. Modifications. All modifications to the enabling resolution must be by written resolution and must be adopted after notice is given and a public hearing conducted as required for the original adoption of the enabling resolution. History: 1987 c 291 s 94 https://www.revisor.mn.gov/statutes/?id=469.093 5/7/2012 469.094, 2011 Minnesota Statutes Page 1 of 1 2011 Minnesota Statutes 469.094 TRANSFER OF AUTHORITY. Subdivision 1. Economic development, housing, redevelopment powers. The city may, by ordinance, divide the economic development, housing, and redevelopment powers granted under sections 469.001 to 469.047 and 469.090 to 469.108 between the economic development authority and any other authority or commission established under statute or city charter for economic development, housing, or redevelopment as provided in subdivision 2. Subd. 2. Project control, authority, operation. The city may, by resolution, transfer the control, authority, and operation of any project as defined in section 469.174, subdivision 8, or any other program or project authorized by sections 469.001 to 469.047 or 469.124 to 469.134 located within the city, from the governmental agency or subdivision that established the project to the economic development authority. The city council may also require acceptance of control, authority, and operation of the project by the economic development authority. The economic development authority may exercise all of the powers that the governmental unit establishing the project could exercise with respect to the project. When a project or program is transferred to the economic development authority, the authority shall covenant and pledge to perform the terms, conditions, and covenants of the bond indenture or other agreements executed for the security of any bonds issued by the governmental subdivision that initiated the project or program. The economic development authority may exercise all of the powers necessary to perform the terms, conditions, and covenants of any indenture or other agreements executed for the security of the bonds and shall become obligated on the bonds when the project or program is transferred as provided in this subdivision. If the city transfers a housing project or a housing development project to the economic development authority, the city must transfer all housing development and management powers relating to that specific project to the authority. Subd. 3. Transfer of personnel. Notwithstanding any other law or charter provision to the contrary, the city council may, by resolution, place any employees of the housing and redevelopment authority under the direction, supervision, or control of the economic development authority. The placement of any employees under the direction, supervision, or control of the economic development authority does not affect the rights of any employees of the housing and redevelopment authority, including any rights existing under a collective bargaining agreement or fringe benefit plan. The employees shall become employees of the economic development authority. History: 1987 c 291 s 95; 1990 c 532 s 11,12 https://www.revisor.mn.gov/statutes/?id=469.094 5/7/2012 469.095, 2011 Minnesota Statutes Page 1 of 2 2011 Minnesota Statutes 469.095 COMMISSIONERS; APPOINTMENT, TERMS, VACANCIES, PAY, REMOVAL. Subdivision 1. Commissioners. Except as provided in subdivision 2, paragraph (d), an economic development authority shall consist of either three, five, or seven commissioners who shall be appointed after the enabling resolution provided for in section 469.093 becomes effective. The resolution must indicate the number of commissioners constituting the authority. Subd. 2. Appointment, terms; vacancies. (a) Three-member authority: the commissioners constituting a three-member authority, one of whom must be a member of the city council, shall be appointed by the mayor with the approval of the city council. Those initially appointed shall be appointed for terms of two, four,-and six years, respectively. Thereafter all commissioners shall be appointed for six-year terms. (b) Five-member authority: the commissioners constituting a five-member authority, two of whom must be members of the city council, shall be appointed by the mayor with the approval of the city council. Those initially appointed shall be appointed for terms of two, three, four, five, and six years respectively. Thereafter all commissioners shall be appointed for six-year terms. (c) Seven-member authority: the commissioners constituting a seven-member authority, two of whom must be members of the city council, shall be appointed by the mayor with the approval of the city council. Those initially appointed shall be appointed for terms of one, two, three, four, and five years respectively and two members for six years. Thereafter all commissioners shall be appointed for six-year terms. (d) The enabling resolution may provide that the members of the city council shall serve as the commissioners. (e) The enabling resolution may provide for the appointment of members of the city council in excess of the number required in paragraphs (a), (b), and (c). (f) A vacancy is created in the membership of an authority when a city council member of the authority ends council membership. A vacancy for this or another reason must be filled for the balance of the unexpired term, in the manner in which the original appointment was made. The city council may set the term of the commissioners who are members of the city council to coincide with their term of office as members of the city council. Subd. 3. Increase in commission members. An authority may be increased.from three to five or seven members, or from five to seven members by a resolution adopted by the city council following the procedure provided for modifying the enabling resolution in section 469.093. https://www.revisor.mn.gov/statutes/?id=469.095 5/7/2012 469.095, 2011 Minnesota Statutes Page 2 of 2 Subd. 4. Compensation and reimbursement. A commissioner, including the president, shall be paid for attending each regular or special meeting of the authority in an amount to be determined by the city council. In addition to receiving pay for meetings, the commissioners may be reimbursed for actual expenses incurred in doing official business of the authority. All money paid for compensation or reimbursement must be paid out of the authority's budget. Subd. 5. Removal for cause. A commissioner may be removed by the city council for inefficiency, neglect of duty, or misconduct in office. A commissioner shall be removed only after a hearing. A copy of the charges must be given to the commissioner at least ten days before the hearing. The commissioner must be given an opportunity to be heard in person or by counsel at the hearing. When written charges have been submitted against a commissioner, the city council may temporarily suspend the commissioner. If the city council finds that those charges have not been substantiated, the commissioner shall be immediately reinstated. If a commissioner is removed, a record of the proceedings, together with the charges and findings, shall be filed in the office of the city clerk. History: 1987 c 291 s 96 https://www.revisor.mn.gov/statutes/?id=469.095 5/7/2012 469.096,2011 Minnesota Statutes Page 1 of 2 2011 Minnesota Statutes 469.096 OFFICERS; DUTIES; ORGANIZATIONAL MATTERS. Subdivision 1. Bylaws, rules, seal. An authority may adopt bylaws and rules of procedure and shall adopt an official seal. Subd. 2. Officers. An authority shall elect a president, a vice-president, a treasurer, a secretary, and an assistant treasurer. The authority shall elect the president, treasurer, and secretary annually. A commissioner must not serve as president and vice-president at the same time. The other offices may be held by the same commissioner. The offices of secretary and assistant treasurer need not be held by a commissioner. Subd. 3. Duties and powers. The officers have the usual duties and powers of their offices. They may be given other duties and powers by the authority. Subd. 4. Treasurer's duties. The treasurer: (1) shall receive and is responsible for authority money; (2) is responsible for the acts of the assistant treasurer; (3) shall disburse authority money by check only; (4) shall keep an account of the source of all receipts, and the nature, purpose, and authority of all disbursements; and (5) shall file the authority's detailed financial statement with its secretary at least once a year at times set by the authority. Subd. 5. Assistant treasurer. The assistant treasurer has the powers and duties of the treasurer if the treasurer is absent or disabled. Subd. 6. Treasurer's bond. The treasurer shall give bond to the state conditioned for the faithful discharge of official duties. The bond must be approved as to form and surety by the authority and filed with the secretary. The bond must be for twice the amount of money likely to be on hand at any one time, as determined at least annually by the authority provided that the bond must not exceed $300,000. Subd. 7. Public money. Authority money is public money. Subd. 8. Checks. An authority check must be signed by the treasurer and one other officer named by the authority in a resolution. The check must state the name of the payee and the nature of the claim that the check is issued for. Subd. 9. Financial statement. The authority's detailed financial statement must show all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the authority's credits and assets, and its outstanding liabilities in a form required for the city's financial statements. The authority shall examine the statement together with the treasurer's vouchers. If the authority finds that the statement and vouchers are correct, it shall approve them by resolution and enter the resolution in its records. https://www.revisor.mn.gov/statutes/?id=469.096 5/7/2012 469.096, 2011 Minnesota Statutes Page 2 of 2 History: 1987 c 291 s 97 https://www.revisor.mn.gov/statutes/?id=469.096 5/7/2012 469.097, 2011 Minnesota Statutes Page 1 of 1 2011 Minnesota Statutes 469.097 EMPLOYEES; SERVICES; SUPPLIES. Subdivision 1. Employees. An economic development authority may employ an executive director, a chief engineer, other technical experts and agents, and other employees as it may require, and determine their duties, qualifications, and compensation. Subd. 2. Contract for services. The authority may contract for the services of consultants, agents, public accountants, and other persons needed to perform its duties and exercise its powers. Subd. 3. Legal services. The authority may use the services of the city attorney or hire a general counsel for its legal needs. The city attorney or general counsel, as determined by the authority, is its chief legal advisor. Subd. 4. Supplies. The authority may purchase the supplies and materials it needs to carry out sections 469.090 to 469.108. Subd. 5. City purchasing. An authority may use the facilities of its city's purchasing department in connection with construction work and to purchase equipment, supplies, or materials. Subd. 6. City facilities, services. A city may furnish offices, structures and space, and stenographic, clerical, engineering, or other assistance to its authority. Subd. 7. Delegation power. The authority may delegate to one or more of its agents or employees powers or duties as it may deem proper. History: 1987 c 291 s 98 https://www.revisor.mn.gov/statutes/?id=469.097 5/7/2012 469.098, 2011 Minnesota Statutes Page 1 of 2 2011 Minnesota Statutes 469.098 CONFLICT OF INTEREST. Subdivision 1. Disclosure; criminal penalty. (a) Before taking an action or making a decision which could substantially affect the commissioner's or an employee's financial interests or those of an organization with which the commissioner or an employee is associated, a commissioner or employee of an authority shall: (1) prepare a written statement describing the matter requiring action or decision and the nature of the potential conflict of interest; and (2) submit the statement to the commissioners of the authority. (b) The disclosure under paragraph (a) shall be entered upon the minutes of the authority at its next meeting. The disclosure statement must be submitted no later than one week after the employee or commissioner becomes aware of the potential conflict of interest. However, no disclosure statement is required if the effect on the commissioner or employee of the decision or act will be no greater than on other members of the business, profession, or occupation or if the effect on the organization with which the commissioner or employee is affiliated is indirect, remote, and insubstantial. (c) A potential conflict of interest is present if the commissioner or employee knows or has reason to know that the organization with which the commissioner or employee is affiliated is, or is reasonably likely to become, a participant in a project or development which will be affected by the action or decision. (d) Any individual who knowingly fails to submit a statement required by this subdivision or submits a statement which the individual knows contains false information or omits required information is guilty of a misdemeanor. Subd. 2. Effect of disclosure; criminal penalty. (a) If an employee has a potential conflict of interest, the employee's superior shall immediately assign the matter to another employee who does not have a potential conflict of interest. (b) A commissioner who has a potential conflict of interest shall not attempt to influence an employee in any matter related to the action or decision in question, shall not take part in the action or decision, and shall not be counted toward a quorum during the portion of any meeting of the authority in which the action or decision is to be considered. (c) Any individual who knowingly violates this subdivision is guilty of a misdemeanor. Subd. 3. Conflicts forbidden; criminal penalty. A commissioner or employee of an authority who knowingly takes part in any manner in making any sale, lease, or contract in the commissioner's or employee's official capacity in which the commissioner or employee has a personal financial interest is guilty of a misdemeanor. https://www.revisor.mn.gov/statutes/?id=469.098 5/7/2012 • 469.098, 2011 Minnesota Statutes Page 2 of 2 Subd. 4. Agent or attorney. For one year after termination of a position as a commissioner or employee of an authority, no former commissioner or former employee of an authority shall appear personally before any court or governmental department or agency as agent or attorney for anyone other than the authority in connection with any proceeding, application, request for ruling or other determination, contract, claim, controversy, charge, accusation, arrest, or other particular matter in which the authority is substantially interested, and with respect to which the commissioner or employee took any action or made any decision as a commissioner or employee of the authority at any time within a period of one year prior to the termination of that position. Subd. 5. Limitations. With respect to each program established by the authority to provide financial assistance or financing for real property other than rental assistance programs, an employee or commissioner may not receive such financial assistance or financing more than once. Subd. 6. Injunction. The county attorney may seek an injunction in the district court to enforce the provisions of this section. Subd. 7. Exceptions. The exceptions in section 471.88 apply to this section. History: 1987 c 291 s 99; 2008 c 197 s 1 https://www.revisor.mn.gov/statutes/?id=469.098 5/7/2012 469.099, 2011 Minnesota Statutes Page 1 of 1 2011 Minnesota Statutes 469.099 DEPOSITORIES; DEFAULT; COLLATERAL. Subdivision 1. Named; bond. Every two years an authority shall name national or state banks within the state as depositories. Before acting as a depository, a named bank shall give the authority a bond approved as to form and surety by the authority. The bond must be conditioned for the safekeeping and prompt repayment of deposits. The amount of bond must be at least equal to the maximum sums expected to be deposited at any one time. Subd. 2. One bank account. An authority may deposit all its money from any source in one bank account. Subd. 3. Default; collateral. When authority funds are deposited by the treasurer in a bonded depository, the treasurer and the surety on the treasurer's official bond are exempt from liability for the loss of the deposits because of the failure, bankruptcy, or other act or default of the depository. However, an authority may accept assignments of collateral from its depository to secure deposits just as assignments of collateral are permitted by law to secure deposits of the authority's city. History: 1987 c 291 s 100 https://www.revisor.mn.gov/statutes/?id=469.099 5/7/2012 469.100,2011 Minnesota Statutes Page 1 of 1 2011 Minnesota Statutes 469.100 OBLIGATIONS. Subdivision 1. Taxes and assessments prohibited. An authority must not levy a tax or special assessment, except as otherwise provided in sections 469.090 to 469.108, pledge the credit of the state or the state's municipal corporations or other subdivisions, or incur an obligation enforceable on property not owned by the authority. Subd. 2. Budget to city. Annually, at a time fixed by charter, resolution, or ordinance of the city, an authority shall send its budget to its city's council. The budget must include a detailed written estimate of the amount of money that the authority expects to need from the city to do authority business during the next fiscal year. The needed amount is what is needed in excess of any expected receipts from other sources. Subd. 3. Fiscal year. The fiscal year of the authority must be the same as the fiscal year of its city. Subd. 4. Report to city. Annually, at a time and in a form fixed by the city council, the authority shall make a written report to the council giving a detailed account of its activities and of its receipts and expenditures during the preceding calendar year, together with additional matters and recommendations it deems advisable for the economic development of the city. Subd. 5. Audits. The financial statements of the authority must be prepared, audited, filed, and published or posted in the manner required for the financial statements of the city that established the authority. The financial statements must permit comparison and reconciliation with the city's accounts and financial reports. The report must be filed with the state auditor by June 30 of each year. The auditor shall review the report and may accept it or, in the public interest, audit the books of the authority. Subd. 6. Compliance examinations. At the request of the city or upon the auditor's initiative, the state auditor may make a legal compliance examination of the authority for that city. Each authority examined must pay the total cost of the examination, including the salaries paid to the examiners while actually engaged in making the examination. The state auditor may bill monthly or at the completion of the audit. All collections received must be deposited in the general fund. History: 1987 c 291 s 101; 1989 c 335 art 4 s 88 https://www.revisor.mn.gov/statutes/?id=469.100 5/7/2012 469.101, 2011 Minnesota Statutes Page 1 of 4 2011 Minnesota Statutes 469.101 POWERS. Subdivision 1. Establishment. An economic development authority may create and define the boundaries of economic development districts at any place or places within the city, except that the district boundaries must be contiguous, and may use the powers granted in sections 469.090 to 469.108 to carry out its purposes. First the authority must hold a public hearing on the matter. At least ten days before the hearing, the authority shall publish notice of the hearing in a daily newspaper of general circulation in the city. Also, the authority shall find that an economic development district is proper and desirable to establish and develop within the city. Subd. 2. Acquire property. The economic development authority may acquire by lease, purchase, gift, devise, or condemnation proceedings the needed right, title, and interest in property to create economic development districts. It shall pay for the property out of money it receives under sections 469.090 to 469.108. It may hold and dispose of the property subject to the limits and conditions in sections 469.090 to 469.108. The title to property acquired by condemnation or purchase must be in fee simple, absolute. The authority may accept an interest in property acquired in another way subject to any condition of the grantor or donor. The condition must be consistent with the proper use of the property under sections 469.090 to 469.108. Property acquired, owned, leased, controlled, used, or occupied by the authority for any of the purposes of this section is for public governmental and municipal purposes and is exempt from taxation by the state or by its political subdivisions, except to the extent that the property is subject to the sales and use tax under chapter 297A. The exemption applies only while the authority holds property for its own purpose. The exemption is subject to the provisions of section 272.02, subdivision 39. When the property is sold it becomes subject to taxation. Subd. 3. Options. The economic development authority may sign options to purchase, sell, or lease property. Subd. 4. Eminent domain. The economic development authority may exercise the power of eminent domain under chapter 117, or under its city's charter to acquire property it is authorized to acquire by condemnation. The authority may acquire in this way property acquired by its owner by eminent domain or property already devoted to a public use only if its city's council approves. The authority may take possession of property to be condemned after it files a petition in condemnation proceedings describing the property. The authority may abandon the condemnation before taking possession. Subd. 5. Contracts. The economic development authority may make contracts for the purpose of economic development within the powers given it in sections 469.090 to 469.108. The authority may contract or arrange with the federal government, or any of its departments, with persons, public corporations, the state, or any of its political subdivisions, commissions, or agencies, for separate or joint action, on any matter related https://www.revisor.mn.gov/statutes/?id=469.101 5/7/2012 • 469.101,2011 Minnesota Statutes Page 2 of 4 to using the authority's powers or performing its duties. The authority may contract to purchase and sell real and personal property. An obligation or expense must not be incurred unless existing appropriations together with the reasonably expected revenue of the authority from other sources are sufficient to discharge the obligation or pay the expense when due. The state and its municipal subdivisions are not liable on the obligations. Subd. 5a. Construction contracts. For all contracts for construction, alteration, repair, or maintenance work, the authority may award contracts to the vendor offering the best value, and "best value" shall be defined and applied as set forth in sections 16C.02, subdivision 4a, and 16C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c). Alternatively, the authority may award all contracts for construction, alteration, repair, or maintenance work to the lowest responsible bidder, reserving the right to reject any or all bids. Subd. 6. Limited partner. The economic development authority may be a limited partner in a partnership whose purpose is consistent with the authority's purpose. Subd. 7. Rights; easements. The economic development authority may acquire rights or an easement for a term of years or perpetually for development of an economic development district. Subd. 8. Supplies; materials. The economic development authority may buy the supplies and materials it needs to carry out this section. Subd. 9. Receive public property. The economic development authority may accept land, money, or other assistance, whether by gift, loan or otherwise, in any form from the federal or state government, or an agency of either, or a local subdivision of state government to carry out sections 469.090 to 469.108 and to acquire and develop an economic development district and its facilities under this section. Subd. 10. Development district authority. The economic development authority may sell or lease land held by it for economic development in economic development districts. The authority may acquire, sell, or lease single or multiple tracts of land regardless of size, to be developed as a part of the economic development of the district under sections 469.090 to 469.108. Subd. 11. Foreign trade zone. The economic development authority may apply to the board defined in United States Code, title 19, section 81 a, for the right to use the powers provided in United States Code, title 19, sections 81a to 81u. If the right is granted, the authority may use the powers. One authority may apply with another authority. Subd. 12. Relation to other redevelopment powers. The economic development authority may exercise powers and duties of a redevelopment agency under sections 469.152 to 469.165, for a purpose in sections 469.001 to 469.047 or 469.090 to 469.108. The authority may also use the powers and duties in sections 469.001 to 469.047 and 469.090 to 469.108 for a purpose in sections 469.152 to 469.165. https://www.revisor.mn.gov/statutes/?id=469.101 5/7/2012 , 469.101,2011 Minnesota Statutes Page 3 of 4 Subd. 13. Public facilities. The authority may operate and maintain a public parking facility or other public facility to promote development in an economic development district. Subd. 14. Government agent. An economic development authority may cooperate with or act as agent for the federal or the state government, or a state public body, or an agency or instrumentality of a government or a public body to carry out sections 469.090 to 469.108 or any other related federal, state, or local law in the area of economic development district improvement. Subd. 15. Studies, analysis, research. An authority may study and analyze economic development needs in the city, and ways to meet the needs. An authority may study the desirable patterns for land use for economic development and community growth and other factors affecting local economic development in the city and make the result of the studies available to the public and to industry in general. An authority may engage in research and disseminate information on economic development within the city. Subd. 16. Public relations. To further an authorized purpose, an authority may (1) join an official, industrial, commercial, or trade association, or another organization concerned with the purpose, (2) have a reception of officials who may contribute to advancing the city and its economic development, and (3) carry out other public relations activities to promote the city and its economic development. Activities under this subdivision have a public purpose. Subd. 17. Accept public land. An authority may accept conveyances of land from all other public agencies, commissions, or other units of government, if the land can be properly used by the authority in an economic development district, to carry out the purposes of sections 469.090 to 469.108. Subd. 18. Economic development. An authority may carry out the law on economic development districts to develop and improve the lands in an economic development district to make it suitable and available for economic development uses and purposes. An authority may fill, grade, and protect the property and do anything necessary and expedient, after acquiring the property, to make it suitable and attractive as a tract for economic development. An authority may lease some or all of its lands or property and may set up local improvement districts in all or part of an economic development district. Subd. 19. Loans in anticipation of bonds. After authorizing bonds under sections 469.102 and 469.103, an authority may borrow to provide money immediately required for the bond purpose. The loans must not exceed the amount of the bonds. The authority shall by resolution decide the terms of the loans. The loans must be evidenced by negotiable notes due in not more than 12 months from the date of the loan payable to the order of the lender or to bearer, to be repaid with interest from the proceeds of the bonds when the bonds are issued and delivered to the bond purchasers. The loan must not be obtained from any commissioner of the authority or from any corporation, association, or other institution of which an authority commissioner is a stockholder or officer. https://www.revisor.mn.gov/statutes/?id=469.101 5/7/2012 469.101,2011 Minnesota Statutes Page 4 of 4 Subd. 20. Use of proceeds. The proceeds of obligations issued by an authority under section 469.103 and temporary loans obtained under subdivision 19 may be used to make or purchase loans for economic development facilities that the authority believes will require financing. To make or purchase the loans, the authority may enter into loan and related agreements, both before and after issuing the obligations, with persons, firms, public or private corporations, federal or state agencies, and governmental units under terms and conditions the authority considers appropriate. A governmental unit in the state may apply, contract for, and receive the loans. Chapter 475 does not apply to the loans. Subd. 21.[Repealed, 2000 c 490 art 11 s 44] Subd. 22. Secondary market. An authority may sell, at private or public sale, at the price or prices determined by the authority, any note, mortgage, lease, sublease, lease purchase, or other instrument or obligation evidencing or securing a loan made for the purpose of economic development,job creation, redevelopment, or community revitalization by a public agency to a business, for-profit or nonprofit organization, or an individual. Subd. 23. Supplying small business capital. Notwithstanding any contrary law, the authority may participate with public or private corporations or other entities, whose purpose is to provide seed or venture capital to small businesses that have facilities located or to be located in the district. For that purpose the authority may use not more than ten percent of available annual net income or $1,000,000 annually, whichever is less, to invest in equities or acquire equity-type investments. These investments can be made directly in eligible corporations or entities or acquired through participation in a public or private seed or venture capital fund. The participation by the authority may not exceed in any year 25 percent of the total amount of funds provided for venture or seed capital purposes by all of the participants. The corporation, entity, or fund shall report in writing each six months to the commissioners of the authority all investments and other action taken by it since the last report. Funds contributed to the corporation or entity must be invested pro rata with each contributor of capital taking proportional risks on each investment. As used in this subdivision, the term "small business" has the meaning given it in section 645.445, subdivision 2. History: 1987 c 291 s 102; 1988 c 580 s 5; 1991 c 295 s 2; 1992 c 363 art 1 s 13; 2000 c 418 art 2 s 7; 2006c214s20; 2007 c 148 art 3 s 30; 2010c389art 7s5 https://www.revisor.mn.gov/statutes/?id=469.101 5/7/2012 469.102, 2011 Minnesota Statutes Page 1 of 2 2011 Minnesota Statutes 469.102 GENERAL OBLIGATION BONDS. Subdivision 1. Authority; procedure. An economic development authority may issue general obligation bonds in the principal amount authorized by two-thirds majority vote of its city's council. The bonds may be issued in anticipation of income from any source. The bonds may be issued: (1) to secure funds needed by the authority to pay for acquired property or (2) for other purposes in sections 469.090 to 469.108. The bonds must be in the amount and form and bear interest at the rate set by the city council. Except as otherwise provided in sections 469.090 to 469.108, the issuance of the bonds is governed by chapter 475. The authority when issuing the bonds is a municipal corporation under chapter 475. Subd. 2. Detail; maturity. The authority with the consent of its city's council shall set the date, denominations, place of payment, form, and details of the bonds. The bonds must mature serially. The first installment is due in not more than three years and the last in not more than 30 years from the date of issuance. Subd. 3. Signatures; coupons; liability. The bonds must be signed by the president of the authority, be attested by its secretary, and be countersigned by its treasurer; the signatures may be facsimile signatures. The interest coupons if any, must be attached to the bonds. The coupons must be executed and authenticated by the printed, engrossed, or lithographed facsimile signature of the authority's president and secretary. The bonds do not impose any personal liability on a member of the authority. Subd. 4. Pledge. The bonds must be secured by the pledge of the full faith, credit, and resources of the issuing authority's city. The authority may pledge the full faith, credit, and resources of the city only if the city specifically authorizes the authority to do so. The city council must first decide whether the issuance of the bonds by the authority is proper in each case and if so, the amount of bonds to issue. The city council shall give specific consent in an ordinance to the pledge of the city's full faith, credit, and resources. The authority shall pay the principal amount of the bonds and the interest on it from taxes levied under this section to make the payment or from authority income from any source. Subd. 5. Tax levy. An authority that issues bonds under this section, shall, before issuing them, levy a tax for each year on the taxable property in the authority's city. The tax must be for at least five percent more than the amount required to pay the principal and interest on the bonds as the principal and interest mature. The tax must be levied annually until the principal and interest are paid in full. After the bonds have been delivered to the purchasers, the tax must not be repealed until the debt is paid. After the bonds are issued, the authority need not take any more action to authorize extending, assessing, and collecting the tax. On or before September 15, the authority's secretary shall send a certified copy of the levy to the county auditor, together with full information on the bonds for which the tax is levied. The county auditor shall extend and assess the levied tax annually until the principal and interest are paid in full. The authority shall transfer the https://www.revisor.mn.gov/statutes/?id=469.102 5/7/2012 469.102,2011 Minnesota Statutes Page 2 of 2 surplus from the excess levy in this section to a sinking fund after the principal and interest for which the tax was levied and collected is paid. The authority may direct its secretary to send a certificate to the county auditor before September 15 in a year. The certificate must state how much available income, including the amount in the sinking fund, the authority will use to pay principal or interest or both on each specified issue of the authority's bonds. The auditor shall then reduce the bond levy for that year by that amount. The authority shall then set aside the certified amount and may not use it for any purpose except to pay the principal and interest on the bonds. The taxes in this section shall be collected and sent to the authority by the county treasurer as provided in chapter 276. The taxes must be used only to pay the bonds when due. Subd. 6. Authorized securities. Bonds legally issued under this chapter are authorized securities under section 50.14. A savings bank, trust company, or insurance company may invest in them. A public or municipal corporation may invest its sinking funds in them. The bonds may be pledged by a bank or trust company as security for the deposit of public money in place of a surety bond. The authority's bonds are instrumentalities of a public governmental agency. History: 1987 c 291 s 103; 1994 c 416 art 1 s 49; 1995 c 256 s 9; 2002 c 390 s 8 https://www.revisor.mn.gov/statutes/?id=469.102 5/7/2012 469.103, 2011 Minnesota Statutes Page 1 of 2 2011 Minnesota Statutes 469.103 REVENUE BONDS; PLEDGE; COVENANTS. Subdivision 1. Authority. An economic development authority may decide by resolution to issue its revenue bonds either at one time or in series from time to time. The revenue bonds may be issued to provide money to pay to acquire land needed to operate the authority, to purchase or construct facilities, to purchase, construct, install, or furnish capital equipment to operate a facility for economic development of any kind within the city, or to pay to extend, enlarge, or improve a project under its control. The issued bonds may include the amount the authority considers necessary to establish an initial reserve to pay principal and interest on the bonds. The authority shall state in a resolution how the bonds and their attached interest coupons are to be executed. Subd. 2. Form. The bonds of each series issued by the authority under this section shall bear interest at a rate or rates, shall mature at the time or times within 30 years from the date of issuance, and shall be in the form, whether payable to bearer, registrable as to principal, or fully registrable, as determined by the authority. Section 469.102, subdivision 6, applies to all bonds issued under this section, and the bonds and their coupons, if any, when payable to bearer, shall be negotiable instruments. Subd. 3. Sale. The sale of revenue bonds issued by the authority shall be at public or private sale. The bonds may be sold in the manner and for the price that the authority determines to be for the best interest of the authority. The bonds may be made callable, and if so issued, may be refunded. Subd. 4. Agreements. The authority may by resolution make an agreement or covenant with the bondholders or their trustee. The authority must first decide that the agreement or covenant is needed or desirable to do what the authority may do under this section and to assure that the revenue bonds are marketable and promptly paid. Subd. 5. Revenue pledge. In issuing general obligation or revenue bonds, the authority may secure the payment of the principal and the interest on the bonds by a pledge of and lien on authority revenue. The revenue must come from the facility to be acquired, constructed, or improved with the bond proceeds or from other facilities named in the bond -authorizing resolutions. The authority also may secure the payment with its promise to impose, maintain, and collect enough rentals, rates, and charges, for the use and occupancy of the facilities and for services furnished in connection with the use and occupancy, to pay its current expenses to operate and maintain the named facilities, and to produce and deposit sufficient net revenue in a special fund to meet the interest and principal requirements of the bonds, and to collect and keep any more money required by the resolutions. The authority shall decide what constitutes "current expense" under this subdivision based on what is normal and reasonable under generally accepted accounting principles. Revenues pledged by the authority must not be used or pledged for any other authority purpose or to pay any other bonds issued under this section or under section https://www.revisor.mn.gov/statutes/?id=469.103 5/7/2012 469.103,2011 Minnesota Statutes Page 2 of 2 469.102, unless the other use or pledge is specifically authorized in the bond-authorizing resolutions. Subd. 6. Not city debt. Revenue bonds issued under this section are not a debt of the authority's city nor a pledge of that city's full faith and credit. The bonds are payable only from project revenue as described in this section. A revenue bond must contain on its face a statement to the effect that the economic development authority and its city do not have to pay the bond or the interest on it except from revenue and that the faith, credit, and taxing power of the city are not pledged to pay the principal of or-the interest on the bond. Subd. 7. Not applicable. Sections 469.153, subdivision 2, paragraph (e), and 469.154, subdivisions 3, 4, and 5 do not apply to revenue bonds issued under this section and sections 469.152 to 469.165 if the interest on the revenue bonds is subject to both state and federal income tax or if the revenue bond proceeds are not loaned by the authority to a private person. Subd. 8. Tax increment bonds. Obligations secured or payable from tax increment revenues and issued pursuant to this section or section 469.102 are subject to the provisions of section 469.178. History: 1987 c 291 s 104; 2006 c 259 art 9 s 8 https://www.revisor.mn.gov/statutes/?id=469.103 5/7/2012 469.104, 2011 Minnesota Statutes Page 1 of 1 2011 Minnesota Statutes 469.104 SECTIONS THAT APPLY IF FEDERAL LIMIT APPLIES. Sections 474A.01 to 474A.21 apply to obligations issued under sections 469.090 to 469.108 that are limited by federal tax law as defined in section 474A.02, subdivision 8. History: 1987 c 291 s 105; 2005 c 10 art 1 s 71 https://www.revisor.mn.gov/statutes/?id=469.104 5/7/2012 469.105, 2011 Minnesota Statutes Page 1 of 2 2011 Minnesota Statutes 469.105 SALE OF PROPERTY. Subdivision 1. Power. An economic development authority may sell and convey property owned by it within the city or an economic development district if it determines that the sale and conveyance are in the best interests of the city or district and its people, and that the transaction furthers its general plan of economic development. This section is not limited by other law on powers of economic development authorities. Subd. 2. Notice; hearing. An authority shall hold a hearing on the sale. At the hearing a taxpayer may testify for or against the sale. At least ten, but not more than 20, days before the hearing the authority shall publish notice of the hearing on the proposed sale in a newspaper. The newspaper must be published and have general circulation in the - authority's county and city. The notice must describe the property to be sold and state the time and place of the hearing. The notice must also state that the public may see the terms and conditions of the sale at the authority's office and that at the hearing the authority will meet to decide if the sale is advisable. Subd. 3. Decision; appeal. The authority shall make its findings and decision on whether the sale is advisable and enter its decision on its records within 30 days of the hearing. A taxpayer may appeal the decision by filing a notice of appeal with the district court in the city or economic development district's county and serving the notice on the secretary of the authority, within 20 days after the decision is entered. The only ground for appeal is that the action of the authority was arbitrary, capricious, or contrary to law. Subd. 4. Terms. The terms and conditions of sale of the property must include the use that the bidder will be allowed to make of it. The authority may require the purchaser to file security to assure that the property will be given that use. In deciding the sale terms and conditions the authority may consider the nature of the proposed use and the relation of the use to the improvement of the authority's city and the business and the facilities of the authority in general. The sale must be made on the authority's terms and conditions. The authority may publish an advertisement for bids on the property at the same time and in the same manner as the notice of hearing required in this section. The authority may award the sale to the bid considered by it to be most favorable considering the price and the specified intended use. The authority may also sell the property at private sale at a negotiated price if after its hearing the authority considers that sale to be in the public interest and to further the aims and purposes of sections 469.090 to 469.108. Subd. 5. One-year deadline. Within one year from the date of purchase, the purchaser shall devote the property to its intended use or begin work on the improvements to the property to devote it to that use. If the purchaser fails to do so, the authority may cancel the sale and title to the property shall return to it. The authority may extend the time to comply with a condition if the purchaser has good cause. The terms of sale may contain other provisions that the authority considers necessary and proper to protect the public https://www.revisor.mn.gov/statutes/?id=469.105 5/7/2012 469.105, 2011 Minnesota Statutes Page 2 of 2 interest. A purchaser must not transfer title to the property within one year of purchase without the consent of the authority. Subd. 6. Covenant running with the land. A sale made under this section must incorporate in the deed as a covenant running with the land the conditions of sections 469.090 to 469.108 relating to the use of the land. If the covenant is violated the authority may declare a breach of the covenant and seek a judicial decree from the district court declaring a forfeiture and a cancellation of the deed. Subd. 7. Plans; specifications. A conveyance must not be made until the purchaser gives the authority plans and specifications to develop the property sold. The authority must approve the plans and specifications in writing. The authority may require preparation of final plans and specifications before the hearing on the sale. History: 1987 c 291 s 106 https://www.revisor.mn.gov/statutes/?id=469.105 5/7/2012 469.106, 2011 Minnesota Statutes Page 1 of 1 2011 Minnesota Statutes 469.106 ADVANCES BY AUTHORITY. An authority may advance its general fund money or its credit, or both, without interest, for the objects and purposes of sections 469.090 to 469.108. The advances must be repaid from the sale or lease, or both, of developed or redeveloped lands. If the money advanced for the development or redevelopment was obtained from the sale of the authority's general obligation bonds, then the advances must have not less than the average annual interest rate that is on the authority's general obligation bonds that are outstanding at the time the advances are made. The authority may advance repaid money for more objects and purposes of sections 469.090 to 469.108 subject to repayment in the same manner. The authority must still use rentals of lands acquired with advanced money to collect and maintain reserves to secure the payment of principal and interest on revenue bonds issued to finance economic development facilities, if the rentals have been pledged for that purpose under section 469.103. Advances made to acquire lands and to construct facilities for recreation purposes if authorized by law need not be reimbursed under this section. Sections 469.090 to 469.108 do not exempt lands leased from the authority to a private person, or entity from assessments or taxes against the leased property while the lessee is liable for the assessments or taxes under the lease. History: 1987 c 291 s 107 https://www.revisor.mn.gov/statutes/?id=469.106 5/7/2012 469.107, 2011 Minnesota Statutes Page 1 of 1 2011 Minnesota Statutes 469.107 CITY MAY LEVY TAXES FOR ECONOMIC DEVELOPMENT AUTHORITY. Subdivision 1. City tax levy. A city may, at the request of the authority, levy a tax in any year for the benefit of the authority. The tax must be not more than 0.01813 percent of taxable market value. The amount levied must be paid by the city treasurer to the treasurer of the authority, to be spent by the authority. Subd. 2. Reverse referendum. A city may increase its levy for economic development authority purposes under subdivision 1 in the following way. Its city council must first pass a resolution stating the proposed amount of levy increase. The city must then publish the resolution together with a notice of public hearing on the resolution for two successive weeks in its official newspaper or if none exists in a newspaper of general circulation in the city. The hearing must be held two to four weeks after the first publication. After the hearing, the city council may decide to take no action or may adopt a resolution authorizing the proposed increase or a lesser increase. A resolution authorizing an increase must be published in the city's official newspaper or if none exists in a newspaper of general circulation in the city. The resolution is not effective if a petition requesting a referendum on the resolution is filed with the city clerk within 30 days of publication of the resolution. The petition must be signed by voters equaling five percent of the votes cast in the city in the last general election. The election must be held at a general or special election. Notice of the election must be given in the manner required by law. The notice must state the purpose and amount of the levy. History: 1987 c 291 s 108; 1988 c 719 art 5 s 84; 1989 c 277 art 4 s 64; 1992 c 511 art 5 s 13 https://www.revisor.mn.gov/statutes/?id=469.107 5/7/2012 469.108, 2011 Minnesota Statutes Page 1 of 1 2011 Minnesota Statutes 469.108 SPECIAL LAW; OPTIONAL USE. A city that has established a port authority by special law or that has been granted the power to establish a port authority by special law, or a city whose city council has been authorized to exercise the powers of a port authority by special law may elect to use the powers granted in sections 469.090 to 469.108. If the election is made, the powers and duties set forth in sections 469.090 to 469.108 supersede the special law and the special law must not be used after the election. The use of powers under sections 469.090 to 469.108 by a city described in this section does not impair the security of any obligations issued or contracts or agreements executed under the special law. Control, authority, and operation of any project may be transferred to the authority in the manner provided in section 469.094. History: 1987 c 291 s 109 https://www.revisor.mn.gov/statutes/?id=469.108 5/7/2012 Sterling Codifiers, Inc. Page 1 of 2 Chapter 8 ECONOMIC DEVELOPMENT AUTHORITY 2-8-1: AUTHORITY ESTABLISHED: It is hereby recognized that in the city there was created, March 18, 1974, a housing and redevelopment authority. Effective upon adoption of an enabling resolution as required by Minnesota Statutes Annotated section 469.091, all programs, projects, activities and personnel of the housing and redevelopment authority are transferred to the economic development authority (EDA). The EDA is authorized to exercise on behalf of the city the powers conferred by Minnesota Statutes Annotated sections 462C.01 to 462C.08 including power to issue and sell single-family housing revenue bonds. The EDA shall, upon request of the city council, make periodic status reports to the city council regarding any action(s) undertaken pursuant to the power(s) conferred hereby. (Ord. 005-541, 8-15-2005) This section has been affected by a recently passed ordinance, 647 - ECONOMIC DEVELOPMENT AUTHORITY . Go to new ordinance. 2-8-2: GOVERNANCE PROVISIONS: The following provisions regarding governance of the authority are hereby adopted: (A) Members; Officers: The authority shall consist of five (5) council members who shall choose from among themselves a chair, vice chair and other officers as required by law and two (2) persons to serve in an ex officio capacity. (B) Designated Seats: Five (5) seats shall be held by sitting members of the city council. The two (2) nonvoting or ex officio seats shall be appointed by the mayor with the approval of the city council. http://www.sterlingcodifiers.com/codebook/printnow.php 1/22/2013 Sterling Codifiers, Inc. Page 2 of 2 (C) Qualifications: Members shall be citizens of the United States and residents of the city. (D) Terms Of Office: The term of the council members shall be concurrent with the council members' city council terms and shall expire at the same time as the members' council term of office. Terms of the ex officio members shall be for six (6) years, except that one of the initial appointments shall be for three (3) years, one for five (5) years and appointments to fill any vacant positions may be made for the balance of the unexpired term. Commissioners who are not council members may be removed as provided by law. (E) Compensation: Members of the authority who are council members shall serve without pay, but may be reimbursed for reasonable personal expenses. Members of the authority who are not council members shall receive ten dollars ($10.00) per meeting in addition to reasonable personal expenses. (F) Oath Of Office: Prior to assuming the duties to which first appointed, each member shall take an oath of office. (Ord. 011-633, 5-16-2011) http://www.sterlingcodifiers.com/codebook/printnow.php 1/22/2013 20122013 ECONOMIC DEVELOPMENT AUTHORITY BY-LAWS These By-Laws,when adopted, are intended to deal with matters not otherwise covered by State Law, City Ordinance or elsewhere. Section I—Meetings SUBD. 1 —Regular meetings of the Economic Development Authority shall be held on the fourth(4th) Monday of each month at 6:30 PM. Any regular meeting falling upon a holiday shall be held on the next following business day at the same time and place. All meetings, including special and adjourned meetings, shall be held in the City Hall unless otherwise designated. SUBD. 2— Special meetings of the Authority may be called by the Chairperson or in written form by any other two (2)members of the Authority, filed with the Executive Director. The Executive Director may also call a special meeting. At least three (3) days before the meeting,the Executive Director shall notify each member of the time,place and purpose of the meeting by causing written notice thereof to be delivered to him/her personally if he/she can be found, or, if he/she cannot be found,by leaving a copy at the home of the member with some person of suitable age and discretion residing thereinelectronic format. At least three (3)days prior to the meeting,the Executive Director shall also post notice of the meeting and if applicable,notify each person who has filed an applicable written request for notice, or may, if necessary,provide such other more restricted notice, including but not limited to (as allowed by Statute, such as)M.S. 471.705, subd. 1C,paragraph g, " if a person receives actual notice of a meeting of a public body at least 24 hours before the meeting, all notice requirements of this subdivision are satisfied with respect to that person,regardless of the method of receipt of notice." Emergency meetings may be held because of circumstances that, in the judgement of the Authority require immediate attention. The notice of special meeting shall state the item(s)to be discussed and acted upon. Items not stated in the notice may be discussed, but no action may be taken if any member objects. Any special meeting attended by a majority of the Authority members shall be a valid meeting for the transaction of business that may come before the meeting. SUBD. 3 —At the regular Authority meeting in January of each year,the Authority shall (1) choose a Chairperson and a Vice-Chairperson, who shall perform the duties of the Chairperson during the Chairpersons disability or absence and in case of a vacancy in the office of Chairperson and until a successor has been appointed and qualifies to fulfill the duties of Chairperson; (2) establish a meeting schedule for the year and; (3) appoint a Secretary and Treasurer, which need not be a commissioner. The official newspaper is hereby designated annually to reflect the designation of the City Council with respect to legal notifications. SUBD. 4—All Authority meetings, as defined by State Law, including special and adjourned meetings shall be open to the public. The Authority Attorney shall advise the Authority in writing as to his interpretation of the state "Open Meeting Law" and all new members shall be provided such written interpretation. H:\Economic Development\2013 Board Agendas&Memos\2013 EDA By-Laws 2-25-13.doc 1 Section II Presiding Officer; Rules of Order SUBD. 1 —The Chairperson shall preside at all meetings of the Authority. In the absence of the Chairperson,the Vice-Chairperson shall preside. In the absence of both,the Executive Director shall call the meeting to order and shall preside until the Authority members present at the meeting choose one of their members to act temporarily as presiding officer. SUBD. 2—The presiding officer shall preserve order, enforce the rule of procedure herein prescribed, and determine all questions of procedure and order. Except as otherwise provided by statute or by these rules,the proceedings of the Authority shall be conducted in accordance with the following rules of order: A. A Motion must be seconded before being considered by the Authority and the presiding officer must recognize mover, as well as the seconder. B. Any motion may be withdrawn by its mover with the consent of his/her second. But a motion, once debated, cannot be withdrawn except by a majority vote of the Authority. C. A motion will not be subject to debate until it has been stated by the presiding officer and he/she has opened it to debate. D. Each member, while speaking, shall confine himself/herself to the question at hand and avoid all personal, indecorous or sarcastic language. E. Whenever any member of the Authority desires to speak on any question, which affects him/her personally,he/she shall first vacate his/her chair and shall not resume his/her seat until the matter under consideration has been acted upon. He/she shall be allowed to make comments on the question as a private citizen only and while a member of the audience. F. Whenever public hearings are held,the presiding officer, shall allow any member of the public, the privilege of speaking. A reasonable time shall be allowed to anyone as long as they are not repeating points already made. The presiding officer shall maintain order and may rule anyone out of order. G. At any meeting,the presiding officer will allow the public to participate as long as there is reason to believe the input is beneficial. SUBD. 3 —Any member may appeal to the Authority from a ruling of the presiding officer. If the appeal is seconded, the appealing member may speak first on the reason for his/her appeal. General discussion can then take place on the appeal before a vote. The appeal shall be sustained if it is approved by a majority of the members present. H:\Economic Development\2013 Board Agendas&Memos\2013 EDA By-Laws 2-25-13.doc 2 Section III—Agendas SUBD. 1 — The agenda shall be prepared by the EDA Executive Director and shall be closed at noon on the Wednesday preceding the meeting for publication purposes. SUBD. 2—Any member may place an item on the agenda by so instructing the Executive Director. SUBD. 3 — No item shall be placed on the agenda unless the item is expressed in such a way as to clearly show the subject matter involved SUBD. 4 —The agenda add-ons are subject to approval by a majority vote of the members present and further such add-on items may be discussed,but no action may be taken if any member objects. Section IV—Order of Business SUBD. 1 —Each meeting of the Authority shall convene at the time and place appointed therefore. Authority business shall be conducted in the following order: 1) Call to Order 2) Pledge of Allegiance 3) Roll Call 4) Approve Agenda 5) Citizen Comments/Presentations 6) Approve Consent Agenda a. Minutes b. Bills c. Additional Consent Agenda items 7) Public Hearings 8) Continued Business 9) New Business 10)City Staff Reports/Open Forum/Discussion 11)Adjourn SUBD. 2—The order of business may be varied by the presiding officer, except that all public hearings shall be held at the time specified in the notice of hearing. Section V—Minutes SUBD. 1 —Minutes of each Authority meeting shall be kept by the Executive Director or, in his/her absence,his/her designee. In the absence of both,the presiding officer shall appoint a secretary pro tern. Resolutions need not be recorded in full in the minutes if they appear in other permanent records of the Executive Director and can be accurately identified from the description given in the minutes. SUBD. 2—Minutes of each meeting shall be reduced to typewritten form, shall be signed by the taker, meeting. At the next regular Authority meeting . - . • - , approval of the minutes shall be considered by the Authority. The minutes need not be read aloud, but the presiding officer shall call H:\Economic Development\2013 Board Agendas&Memos\2013 EDA By-Laws 2-25-13.doc 3 for any additions or corrections. If there is an objection,the Authority shall vote upon the addition or correction. If there are no additions or corrections,the minutes shall stand approved by motion. If there is an objection, the Authority shall vote upon the addition or correction and approve the minutes by motion as amended. Section VI—Quorum and Voting SUBD. 1 —At all meetings a majority of all members shall constitute a quorum for the transaction of business. SUBD. 2—The votes of members on any question pending before the EDA shall be by voice votes. Roll call vote can be requested by any member, except for the following agenda items; approval of the agenda; approval of the consent agenda; and the adjournment. The names of those voting for and against the question shall be recorded in the minutes. If any member present does not vote,the minutes shall state: "Abstain: Name". SUBD. 3 —Except as otherwise provided by statute, a majority vote of the quorum shall prevail. Section VII—Executive Director The Authority may appoint and provide for annual performance reviews of an Executive Director. Section VIII—Suspension or Amendment of the By-Laws SUBD. 1 —These by-laws may be temporarily suspended by a unanimous vote of the members present. SUBD. 2—These by-laws shall not be repealed or amended except by a majority vote of the whole Authority after notice has been given at some preceding meeting. Section IX—Effective Date SUBD. 1 —These by-laws have been adopted by the on the day of , 20 and becomes effective immediately. Attest: EDA Executive Director EDA Chairperson Date: Date: H:\Economic Development\2013 Board Agendas&Memos\2013 EDA By-Laws 2-25-13.doc 4 JANUARY 2013 JULY 2013 S M T W T F S 3 T W T F S 1; 2345 023 +"4- 56 P1R/10 6 10 11 12 7 8 ♦® 11 1213 1 !ilk> 15 16 17 18 19 14 16 17 18 19 20 v 20:2f•23 24 25 26 21 2n2 23 24 25 26 27 q 27 28 29 30 31 28 29 30 31 p�°O, . . �,`,~ q'4''•a PRoo5 FEBRUARY 2013 AUGUST 2013 S M T W T F S S M T W T F S 1 2 1 2 3 www.ci.farmington.mn.us 3 1 1 5 6 7 f 3 9 4 6 7 8 9 10 11 10 ® 14 15 16 11 1 `1e■ 15 16 17 2013 17 `i t 20 21 22 23 18 *20 21 22 23 24 24 E E 26 27 28 25®27 28 29 30 31 PHONE NUMBERS MARCH 2013 SEPTEMBER 2013 S M T W T F S S M W T F S 1 2 1 ;2) 4 5 6 7 3 5 6 7 8 9 8 0 1. 12 13 14 10 11 .014 15 16 15 . 17 18 19 20 21 17 19 20 21 22 23 22(23f 24 25 26 27 28 24 051 26 27 28 29 30 29 30 31 APRIL 2013 OCTOBER 2013 S T W T F S S M T W T F S 2 3 4 5 6 1 2 3 4 5 7 8 .® 11 1213 6 :.,10 1 1 12 14 16 17 18 19 20 13 15 16 17 18 19 21 2? 23 24 25 26 27 20 22 23 24 25 26 CITY HOLIDAYS 28 29 30 27(28 29 30 31 • PLANNING COMMISSION • COUNCIL MEETINGS MAY 2013 NOVEMBER 2013 S M T W T F S S M T W T F S PAYDAYS 1 2 '3 4 1 2 5 . 7 ® 9 10 11 3 + 5 6 7 8 9 ❑ WATER BOARD & EDA 12 4, 15 16 17 18 10 l 014 15 16 0 PARK & REC. 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M 1- cn C •C C r C Y w N a) D: m C O n ❑ CO m a) O N N O to 2 (a y J N ;0 D �O a 7 0 Z 7 a CO 7 d 7 a Q a c a a a 7 a °) 7 C C_ N C .co C C v3 C C O f6 C 'O U '� E C > N N Tin ,� T O - C U C - O') Ctn O_ 7 m Q 7 N Q N 7 O7 C N a a 0 a) CO 7 c - 7 C O. = WC• a) To a C a) O N M of (O CO E a C a) O d U o�Ee►R�i , City of Farmington bait, 430 Third Street ,�x';,: Farmington, Minnesota ,�,�1aG4 651.280.6800•Fax 651.280.6899 www.ci.farmington.mn.us TO: EDA Members FROM: Lee Smick, AICP, CNU-A City Planner/Economic Development SUBJECT: Summary of 2012 Accomplishments—Tracking Sheet DATE: January 28, 2013 --C)P7/ INTRODUCTION/DISCUSSION It's been a great year for advancing economic development initiatives in the community. The Economic Development Authority (EDA)has been productive in developing a variety of innovative and advanced economic ideas in 2012. The EDA has approved and promoted a number of objectives to support its desire for increasing the city's quality of life through economic development. The EDA approved the Economic Development Strategic Plan on February 27, 2012 after reviewing the plan for a number of months in 2011. Action steps were included in the plan from a list of four major priorities which included: Organizational Plan, Marketing, Business Retention and Expansion, and Business Recruitment. Under each of the priorities, action steps were established to meet the goals promoted in the priorities categories. In all, there were 74 action steps. The following activities were completed: 1. Completion of the Economic Development Strategic Plan 2012-2013 and Tracking Sheet 2. Revised EDA Mission and Vision Statements 3. Defined roles and duties of EDA and staff 4. Developed policy for"business friendly" approach at EDA meetings 5. Improved the regulatory environment for businesses 6. Streamlined business development review process by approving"Commercial/Industrial Development 30-Working Day Review Process" 7. Made website "user friendly" - efforts continue to date 8. Partnered with the FBA on a variety of issues 9. Provided Available Properties list on website 10. GROW Farmington—"Buy, Live, Local" Program 11. Business Retention&Expansion Program—48 Business Visits 12. Business Owner Satisfaction Survey 13. Establishment of a"Doing Business - Easy to Use Guide" for the application process 14. MCCD: "Open to Business" Program 15. Reviewed Business Incentives Program(i.e., tax abatement, business assistance criteria 16. Reviewed surrounding communities' EDA budgets and incentives 17. Proposed Bank Summit for review of funding opportunities 18. Supported advertising of existing businesses at local tournaments ACTION REQUIRED Review 2012 summary and forward any comments to the new EDA on February 25, 2013. Respec sub itt-i /,,„0/ , ee Smick, City Planne AICP, CNU-A Please ,j o-i,k, ws far of OPEN TO BUSINESS Dakota County provides free one-on-one assistance from expert staff, customized to meet "t11 the needs of small business owners and operators. Clients receive help in planning and organizing their business OPEN ventures, financial management, mar- keting and regulatory compliance. Ad- To BUSINESS ditionally, a small business loan fund DAKOTA COUNTY! can help entrepreneurs access the capital they need to grow their busi- ness. T1+4wrsSat j, Fthr~Li 28, 201-3 For more information on the services 8:00 — 9:00 a.vw. offered through the Open to Business program or to schedule an appoint- ment contact Laurie Crow, Business l304-1,v5AriAte PeArfo-ry .a Arts CeArtte.r Advisor at 952-484-3107 or Upt2e r L-o-b-b j Icrow @mccdmn.org 1-2600 Nu:o-Clet Avg., 6EA4-ww-Ut& www.opentobusinessmn.org This event is FREE and open to the public. • Area small business owners, entrepreneurs, lenders, business service providers, local government and educational institution OPEN TO BUSINESS Dakota County staff working with small business are encouraged to attend. is a partnership of the Metropolitan Consortium of Community Developers Register online by February 22 at (MCCD), the Dakota County http://opentobusiness.eventbrite.com Community Development Agency or by calling 651-675-4465 (CDA), the cities of Apple Valley, Burnsville, Eagan, Farmington, Event Sponsored by Hastings, Inver Grove Heights, Lake- ville, Rosemount, South St. Paul, and West St. Paul and the Apple Valley, Y, � ~ Dakota County ��► M C CD Community Development Burnsville, Lakeville, River Heights, Agency Hastings, and Dakota County Regional C DA Metropolitan Consortium of Community Developers Chambers of Commerce bank OPEN TO BUSINESS DAKOTA COUNTY! OPEN TO BUSINESS Free Small Business Consulting to Dakota County Businesses, Residents Starting or growing a small business isn't easy, and hiring a trusted advisor to help get a business off the ground is usually very expensive. Open to Business Dakota County provides free,confidential, one-on- one assistance from expert staff, customized to meet the needs of small business owners and operators. Clients receive help in planning and organizing their business ventures,financial management, marketing and regulatory compliance. Additionally, a small business loan fund can help entrepreneurs access the capital they need to grow their business. Beginning monthly in February, an expert Open to Business consultant with the Metropolitan Consortium of Community Developers will offer free consulting services in each community. Consultant hours in each community are as follows: Where When Time South St. Paul City Hall 2nd Wednesday of every month 9:00—11:00 am 125 3rd Avenue North (First office date is Feb 13) West St. Paul City Hall 2nd Wednesday of every month 1:00—3:00 pm 1616 Humboldt Avenue (First office date is Feb 13) Inver Grove Heights City Hall 3`d Tuesday of every month 9:00—11:00 am 8150 Barbara Ave (First office date is Feb 19) Eagan City Hall 3rd Tuesday of every month 1:00—3:00 pm 3830 Pilot Knob Road (First office date is Feb. 19) Apple Valley City Hall 3`d Wednesday of every month 9:00—11:00 am 7100 147th St. W (First office date is Feb 20) Burnsville City Hall 3rd Wednesday of every month 1:00—3:00 pm 100 Civic Center Parkway (First office date is Feb.20) Farmington City Hall 4th Tuesday of every month 9:00—11:00 am 430 3rd St (First office date is Feb 26) Lakeville City Hall 4th Tuesday of every month 1:00—3:00 pm 20195 Holyoke Avenue (First office date is Feb 26) Hastings City Hall 4th Wednesday of every month 9:00—11:00 am 101 4th Street East (First office date is Feb 27) Rosemount City Hall 4th Wednesday of every month 1:00—3:00 pm 2875 145th St. W (First office date is Feb 27) This service is free to any business or resident from one of the participating cities or the small cities and townships in Dakota County.The consultant will be available for walk-in appointments, and can help plan and work through small business challenges such as: • Accounting and record keeping • Business acquisition • Business start-up • Business plan development • Cash flow,financial and business analysis • Financing options • Networking • Operations • Strategic planning • Commercial real estate analysis For more information on the services offered in the Open to Business program or to schedule an appointment contact Laurie Crow, Business Advisor at 952-484-3107 or(crow @mccdmn.orq. 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O .p o a. o 6 3 Q >, ,4- ` ipFFAR�/y��, City of Farmington 430 Third Street Farmington, Minnesota �� 651.280.6800•Fax 651.280.6899 a0n/ A4ST'A PROM�S\l, www.ci.farmington.mn.us TO: EDA Members FROM: Lee Smick, AICP CNU-A City Planner/Economic Development SUBJECT: Approve Joint Powers Agreement—"Open to Business" Program DATE: January 28, 2013 INTRODUCTION The Open to Business"program with the Metropolitan Consortium of Community Developers (MCCD) in conjunction with the CDA was approved by the EDA on September 24, 2012 and will be performed as a pilot project in Farmington for the next two to three years. Funding from Farmington and the CDA will provide MCCD services under a model known as "Open to Business,"which is an initiative providing small business technical assistance services to existing businesses,residents, and other parties interested in opening a business within communities in Dakota County. Attached is the Joint Powers Agreement(JPA)between the CDA and Farmington to approve the City's participation in the"Open to Business"program (Ex. A). Also attached to this memo is the"Open to Business"brochure that will be distributed to businesses. Additional revisions will be made to the brochure to include the City seal, staff contacts, and as the program progresses, photos of local businesses and quotes from them that chose assistance through this program. DISCUSSION The Joint Powers Agreement proposes that the CDA and the Local Government Cities in Dakota County pursue common goals of fostering economic development in the county. The JPA requests Farmington's approval for working with the CDA to undertake the "Open to Business Program" within Dakota County at a cost of$5,000. Additionally,the Contract for Services, as part of the JPA, identifies the agreement between the MCCD and the CDA concerning the duties and reporting provided by the MCCD. The approval by the EDA in September 2012 designated a cost to the City of$5,000 to participate in the Dakota County CDA program. At the meeting, members also discussed that this endeavor should be a pilot program for two years to determine its merits to the community. The JPA also includes a Contract for Services agreement from the MCCD to the CDA which ends on December 31, 2013. The program fee total is $130,000 on an annual basis for communities in Dakota County. There are ten communities that have chosen to participate in the program and their share of the participation fee depends on the size of each community. Eagan, Burnsville, Lakeville, and Apple Valley have agreed to pay half of the $15,000 total fee for each community with the CDA paying the other half($7,500). Inver Grove Heights is paying half of their share of the contract of$12,500 and the CDA is paying half of that fee ($6,250). The remaining communities; Hastings, Rosemount, South St. Paul, West St. Paul, and Farmington are paying half of their share of the contract total fee of $10,000 with the CDA paying$5,000 for each smaller community's portion. The CDA will pay $7,500 for small cities and townships to participate in the program. Background of MCCD and the Open to Business Program MCCD is a 49 member association committed to increasing opportunities for development of quality, community-based projects through collaborative action on public policy issues, loan fund development,public education efforts, and long-term strategic planning (brochure). The "Open to Business" program is designed to provide intensive one-on-one technical assistance to City business owners and entrepreneurs who are intending to establish,purchase, or improve a business in a participating City. Some of the technical assistance that would be provided to businesses includes: • Business Plan development • Feasibility analysis • Marketing • Cash flow and other financial projection development • Operational analysis • City and State licensing and regulatory assistance • Loan packaging, and other assistance in obtaining financing • Help obtaining competent legal advice MCCD "Open to Business" Staff Laurie Crow, Business Advisor, has been hired to work with the ten communities and townships in Dakota County. She is the former owner of two businesses before joining the MCCD, and she has great knowledge in how to start, maintain, and run a business. She also has marketing experience to offer to new and existing businesses in Farmington. City staff will work and learn from her on a continual basis about the City's marketing efforts and general knowledge of owning a business. Staff has already met with Ms. Crow on January 2, 2013 to determine her space and equipment needs at City Hall. The JPA Agreement requires a City office be provided for Ms. Crow to perform her duties. Staff has determined that she will conduct the program from the office to the west of the Building/Planning counter. This office will provide public access for business owners to perform the "Open to Business"program due to the space located off of the atrium. Any interested owner, resident or other interested parties considering the opening of a business or assistance to existing businesses in the City will have the privacy to work with Ms. Crow, and all of the discussions with these parties will remain confidential and not discussed with City staff. She will be in City Hall the 4th Tuesday of each month between 9:00 AM— 11:00 AM. Her start date is February 26, 2013. Her reports back to the City and reporting dates will include the following: ➢ Number of inquiries ➢ Hours of technical assistance provided ➢ Type of assistance provided > Type of business > Annual sales revenue > Number of businesses opened > Number of business expanded/stabilized > Number and amounts of financing packages > Demographic information on entrepreneurs ➢ Business address or resident address ➢ Number and wage of FTEs created ➢ Number and wage of FTEs retained The required reporting schedule is as follows: 1st quarter January—March, report due April 30th 2nd quarter April—June, report due July 31St 3rd quarter July—September, report due October 31st 4th quarter October—December, report due January 31St of 2014 "Open to Business"marketing on City website Staff has included"Open to Business"marketing materials on the City's website to advertise the program. Staff will also work with Laurie Crow on a letter to businesses including a brochure informing them of the program. She will also join staff at the Farmington EXPO on January 26, 2013 where she can meet business owners and make contacts. Through these efforts, staff is hoping to get a number of inquiries from owners of potential and existing businesses. BUDGET IMPACT $5,000 was included in the 2013 Economic Development budget for the"Open to Business"program. ACTION REQUESTED Approve the attached Joint Powers Agreement to participate in the Dakota County CDA and MCCD "Open to Business"program and make any comments concerning the brochure. Respectfully sub i- -• I Lee Smick, AICP CNU-A City Planner t • MCCD is TO BUSINESS in your community Promoting entrepreneurism. Entrepreneurs are starting and growing small businesses in your community. By helping them gain access to financing and other business assistance, you can encourage small business development that grows your tax base, creates local jobs and increases community vitality. How we can help. MCCD's Open to Business program brings on-site business services specialists to your city that can expand your community development staffs expertise in such areas as start-up financing and business plan development. We can respond to requests for business assistance when those requests are beyond the range of the services normally provided by your municipal agencies. How we work. Our staff can provide one-on-one assistance customized to meet the needs of your small business owners and operators. Many of our clients receive help in planning and organizing their business ventures. We can also assist with financial management, marketing and regulatory compliance. Accessing capital for your businesses. MCCD operates a small business loan fund that can help your entrepreneurs access the capital they need to grow their businesses. We can also draw on our long-standing partnerships with area banks to help your businesses obtain bank loans and revolving lines of credit. As a participant in MCCD's "Open to Business" program, your community development agency can help promote more effective access to capital for your local businesses. How we partner with you. MCCD will work with city staff to develop materials that brand this as a program of your city and assist with outreach ideas to the business community. Or staff can meet clients at our office or their place of business. In addition, we can schedule on-site hours at your city hall or other public venue for walk-in consultations. This fee-for-service arrangement can provide you with a cost-effective alternative to an "in-house" business development program staffed and funded by your agency. Who we are. The Metropolitan Consortium of Community Developers is an association of 43 non-profit community development agencies that work to improve housing and economic opportunity throughout the Twin Cities metropolitan area. During this past year, our team of business development specialists has provided access to more than $1 million in business capital for our clients and technical assistance services for more than 200 area businesses. You can find our Web site at www.opentobusinessmn.orq. For more information, contact Rob Smolund Metropolitan Consortium of Community Developers rsmolund@mccdmn.orq 612-789-7337, ext 11 if 1MCCO Motronofton consortium • of f,.:.i....ii.'ilv Dovvlv,rcrs 1 1 2010 MCCD Emerging Small Business Program & Credit Building Report M �Ya.'s �,- fair 13 c u �' 1 u£ 11;1. ,' 2010 Highlights i .� ,11(tj+/ • MCCD helped 55 4.14 ...,4 _ � businesses access start up or expansion capital dosoiN ear, • MCCD closed its first loan in r, , 1 partnership with Brooklyn __ ' :.. ; "'[3 Park Development I ` r Corporation and ;,4..i ice" WomenVenture iiiDiva's Ave,LLC Brooklyn Park • MCCD initiated the Open to Business Program,a partnership About MCCD's Emerging Small Business muncipalties'thsuburban MCCD's Emerging Small Business In 2010,we launched our "Open to • MCCD enabled one of our Program puts community-based Business" initiative-a partnership long-time clients to obtain entrepreneurs on the road to with metro-area municipal $700,000 in financing for his success by providing them with governments. Under this new business counseling and access to partnership,we help local new restaurant in St.Paul. capital. In partnership with our governments create their own members,we provide support for business support programs • MCCD's Credit Building has small businesses throughout the targeted at residents and Twin Cities Metropolitan Area. entrepreneurs in their communities. been completed by 9 Twin Cities residents. 2010 Loan Production MCCD helped 55 business access Entrepreneurs by Gender start up or business expansion _ MCCD's Mission: capital in 2010. Of these,30 were Male 70% direct loans from MCCD, the Female 30% To work collectively to remainder were bank loans facilitated by MCCD. build strong stable Entrepreneurs by Ethnicity Value of MCCD Loans communities by African 13% In 2010, MCCD support (technical assistance and lending) enabled leveraging resources African American 37% our borrowers to access over$5 Asian 3% million in capital for their business for the development development projects. Caucasian 34% of people and places. Latino 13% �_ _ t ePRIMISA rsuSlness RepF .2o10. (612) 789-7,337i S E Ac tot `'� eAr Capital Access Distribution -- Y� I1 S #of MCCD Total Others* ,� Loans Financing Project Nonprofit MCCD - a $178,545 SJ V Cost* $612,000 $650,703 Blaine 1 25,000 Bloomington 6 37,500 100,500 Govt Brooklyn Park 2 23,500 65,000 $397,900 Burnsville 2 1✓ 5,000 25,000 ,t°" Equity Coon Rapids 1 25,000 25,000 $1,675,099 Crystal 1 7,500 7,500 Excelsior 1 34,400 Bank Lakeville 1 40,000 $3,279,190 r: ,; - 4 Minneapolis 26 349,503 3,362,147 Minnetonka 2 20,000 ' � Richfield 1 40,000 1,527,000 *includes landlord and business association finance Robbinsdale 1 140,000 '`) Roseville 2 26700 12,700 26,700 F Shorewood 1 7,000 St.Anthony 1 10,000 I St. Louis Park 2 40,000 213,190 St. Paul 4 110000 1,165,000 „1,,1`Vt',. , ; ' ' I --..,,i Total 55 $650,703 $6,793,437 1 Source:MCCD Loan Program 'Includes MCCD Financing,Partner Financing and Owner Equity g # ;44 c,may° k Technical Assistance i `` MCCD provided over 2,500 hours of technical ” assistance to more than 500 current or aspiring t entrepreneurs in the metro areas.Through our i. technical assistance,we were able to help entrepreneurs upgrade their planning,marketing and financial management skills. MCCD partnered with Franklin Bank and the City of In 2010,MCCD staff made an effort to work closely Minneapolis Community Planning and Economic Development (CPED) to finance pet food with first ring suburbs,increasing the amount of manufacturing equipment for Sojourner Farms technical assistance provided to their residents and (Solos). The company is leasing space for its business owners. equipment from Seward Redesign,a MCCD member. Ward Johnson,SoJos CEO,is shown here. vyY Q.. VV.* =, Diva's Ave, LLC „ (pictured on page 1) , dirt - - ' -I- rt I- MCCD partnered with WomenVenture,and the Brooklyn Park Development Fund t I 1,- Limited Partnership to provide start up financing to Diva's Ave Boutique, "' ' '. LLC. Located in the recently constructed Shops at Village Creek,this women's ' , fashion retailer is part of a newly emerging commercial district. This was MCCD's first loan in partnership with the City of Brooklyn Park;part of a government/non- , " profit collaboration between MCCD and the city to encourage small business growth. f Prr«c' ' h,iC( i) -rrciginq Smc,l!Business RepcIrt .2IIC:. (O1,;, 7n9 7-33/ 2010 Credit Building Program The pilot project has assisted 46 area residents since it the Neighborhood Development Alliance. was initiated in 2009. Participants receive a small personal loan from MCCD and make regular Average credit scores increased by 21 points,from payments on their loan over a 12 month period. Each 636 to 657, for an initial group of eight MCCD credit month MCCD reports the payment record to Credit building borrowers,who made monthly payments on Builders Alliance (CBA). CBA,in turn, forwards the their credit building loans for a full year. During their report on to the TransUnion and Experian credit-rating first six month in the program, eleven other borrowers agencies. saw their scores increase on average by eight points, from 608 to 616. Four borrowers who had no credit MCCD borrowers also receive financial counseling score when they received their loan,and participated from local community service agencies including in the program for at least six months,were able to Project for Pride in Living, Lutheran Social Service's achieve an average score of 680. Eastside Financial Center, Build Wealth Minnesota and 2010 Credit Building Production In partnership with PPL's Center for Working Families, Income Level*of Credit Building Clients Lutheran Social Services Eastisde Financial Center, Build Wealth Minnesota and Neighborhood Extremely low (30%of AMI) 47% Development Alliance, MCCD provided 32 Credit Very low (50%of AMI) 47% Building Loans to Twin Cities residents Low(80%of AMI) 6% *Based on HUD's 2010 calculation of Area Median Income of$84,000 for a family of 4. Ethnicity of Credit Building Clients African 16% African American 44% Location of Credit Building Clients r Asian 3% Bloomington 2 Caucasian 24% Brooklyn Park 1 Latino 13% Edina 1 Maple Wood 1 Minneapolis 11 Richfield 1 Gender of Credit Building Clients South St.Paul 1 St.Louis Park 1 Male 25% St.Paul 10 Female 75% West St. Paul 1 White Bear Lake 2 Page 3 0 Q''•1612 7$ 2010 MCCD Emerging Small Business Program " . • • . • l ANOKA :r• •1 ! k0` (i • a • � • la f,_ • t • ` A • I *• a t *4 • . ... • IP • A +w� w/ASHIIIGTOI-1 *A • HEHrIEPIII 1 RAIdSEY <' • L • w*. ,AA A . A'r` - e Minneapolis Inset • 4-• i CARVER •b . A * • Legend t DAKOTA Credit Budding Loan SCOTT • Direct Loan• Facade Grant �-✓° �' it''' ` 11 ms� a Facilitated Loan N JII Technical Assistance A0 .. 10 1! Partnership MCCD has worked with the following partners to facilitate access to capital: African Development Center, Brooklyn Park Development Corporation, Metropolitan Consortium Build Wealth MN, CCI Surety, DEED/Rehab Services, Franklin Bank, Hennepin County, Klein Bank, Latino Economic Development Center, Lutheran Social of Community Developers Service Eastside Financial Center, MEDA, Minneapolis Community Planning and Economic Development, Neighborhood Development Alliance, Neighborhood Development Center, NEON, Park State Bank, Project for Pride 3137 Chicago Avenue in Living-Center for Working Families, Seward Redesign,Twin Cities Metro Minneapolis, MN 55407 CDC,Venture Bank and Western Bank. Capital Sources Phone: (612) 789-7337 MCCD's loan program has a variety of sources of funds to draw from, including: Community Development Financial Institution (CDFI) Fund For more information about Minneapolis Community Planning and Economic Development the Emerging Small Business Minneapolis Empowerment Zone Program contact Rob Minnesota Department of Employment and Economic Development Smolund at (612) 7897337 Wells Fargo Community Development Corporation ext.] 1, U.S. Bancorp Community Development Corporation Credit Building Program Midtown Global Market contact Natalia Pretelt at William C. Norris Institute (612)789-7337 ext. 10 �,I4., .,,.a a €' -, - _ y 4 s VOICIYe • Olt Ili isinPss Ronorf 9010• f/,191 7R9 7'117 ..� �.1..... � � _. ...,...._. ...k .0 ,.. � _,• •gr 2,111, G. P b• t 'a N M J Fa r�jf K • ti .•ip �} b' .n F r.l o :I O r r 9 r+ R, tl U V, to 1 r1 2 .) , ►t g Oro 'Y`' t:' ii' G ,T,, k � V uy'V 1 �j t• N' p �. r '�uv F' f 1 r 4V y f-+ r t �; r (I! �y' ,.a. r.. 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'6X .'. 71 M •h fi •11 .4ao w 8 7 i t JOINT POWERS AGREEMENT Open to Business Program THIS JOINT POWERS AGREEMENT (this "Agreement"), is made as of December 1, 2012,by and between the DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY(the "CDA"),a public body corporate and politic organized and existing under the laws of the State of Minnesota (the "State"), and each of the CITY OF BURNSVILLE, CITY OF LAKEVILLE, INVER GROVE HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY, EAGAN ECONOMIC DEVELOPMENT AUTHORITY, HASTINGS ECONOMIC DEVELOPMENT AND REDEVELOPMENT AUTHORITY, ROSEMOUNT PORT AUTHORITY, FARMINGTON ECONOMIC DEVELOPMENT AUTHORITY, SOUTH ST. PAUL HOUSING AND REDEVELOPMENT AUTHORITY AND WEST ST. PAUL ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA (each individually a "Local Government Entity" and together the "Local Government Entities"),each a political subdivision of the State. RECITALS: A. In order to pursue common goals of fostering economic development,the CDA and the Local Government Entity Cities desire to engage the Metropolitan Consortium of Community Developers, a Minnesota non-profit corporation ("MCCD") to undertake the "Open To Business Program"(the"Program")within Dakota County(the"County"). B. Pursuant to the Program, MCCD will provide technical assistance and access to capital to small business and potential entrepreneurs in the County. C. The CDA and the Local Government Entities propose to jointly exercise their common economic development powers to undertake the Program. NOW, THEREFORE, in consideration of the mutual covenants and obligations of the CDA and each of the Local Government Entities, each party does hereby represent,covenant and agree with the others as follows: Section 1. Representations. Each of the Local Government Entities and the CDA makes the following representations as to itself as the basis for the undertaking on its part herein contained: (a) It is a political subdivision of the State of Minnesota with the power to enter into this Agreement and carry out its obligations hereunder. Joint Powers Agreement (b) Neither the execution and delivery of this Agreement,the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which it is now a party or by which it is bound,or constitutes an event of default under any of the foregoing. Section 2. Powers to be Exercised. The powers to be jointly exercised pursuant to this Agreement are the powers of the CDA and the Local Government Entities under Minnesota Statutes, Chapter 469, to undertake activities to promote economic development within their respective jurisdictions. Section 3. Method for Exercising Common Powers; Funds. The CDA, on its own behalf and on behalf of the Local Government Entities, will initially enter into an agreement with MCCD in substantially the form attached hereto as Exhibit A (the "Agreement") to engage MCCD to operate the Program within Dakota County. The CDA and each of the Local Government Entities will make payments to MCCD as described in Exhibit A of the Agreement. The CDA may from time to time execute and deliver documents amending, modifying or extending the Agreement as it deems necessary or convenient, provided, that no such document will adversely affect services provided to, or amounts payable by, any Local Government Entity without the prior written consent of such Local Government Entity. Section 4. Limited Liability. Neither the CDA nor the any of the Local Government Entities shall be liable for the acts or omissions of the other in connection with the activities to be undertaken pursuant to this Agreement. To the extent permitted by law,(a)the CDA hereby indemnifies the Local Government Entities for costs associated with claims made against the Local Government Entities directly relating to actions taken by the CDA,and(b)each Local Government Entity hereby indemnifies the CDA for costs associated with claims made against the CDA directly relating to actions taken by such Local Government Entity. Nothing herein shall be deemed a waiver by the indemnifying party of the limits on liability set forth in Minnesota Statutes,Chapter 466;and the indemnifying party shall not be required to pay,on behalf of the indemnified party,any amounts in excess of the limits on liability set forth in Minnesota Statutes, Section 466.04,less any amounts the indemnifying party is required to pay on behalf of itself, its officers,agents and employees for claims arising out of the same occurrence. Section 5. Conflict of Interests; Representatives Not Individually Liable.The CDA and each of the Local Government Entities,to the best of its knowledge,represents and agrees that no member, official or employee of their respective bodies shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his or her personal interests or the interests of any corporation, partnership, or association in which he or she is directly or indirectly interested. No member, official or employee of the CDA or any Local Government Entity shall be personally liable with respect to any default or breach by any of them or for any amount which may become due to the other party or successor or on any obligations under the terms of this Agreement. 2 Joint Powers Agreement 9298589v1 Section 6. Term; Distribution of Property. The term of this Agreement shall expire on December 31, 2013. There is no property which will be acquired by the CDA or any Local Government Entity pursuant to the Program which would need to be distributed at the end of the term hereof. Section 7. Notices and Demands. A notice, demand or other communication under this Agreement by any party to another shall be sufficiently given or delivered if it is dispatched by registered or certified mail,postage prepaid, return receipt requested or delivered personally to the person and at the addresses identified on each signature page hereto,or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 8. Counterparts. This Agreement may be executed in any number of counterparts,each of which shall constitute one and the same instrument. [Remainder of page intentionally left blank] 3 Joint Powers Agreement 9298589v1 IN WITNESS WHEREOF, the CDA and the Local Government Entities have caused this Agreement to be duly executed in their respective names and behalf as of the date first above written,with actual execution on the dates set forth below. DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY Dated: I (9-1(? By f\IV. Its Executive Director Notice Address: Dakota County Community Development Agency 1228 Town Centre Drive Eagan,MN 55123 Attn: Andrea Brennan,Director of Community and Economic Development S- 1 Joint Powers Agreement EAGAN ECONOMIC DEVELOPMENT AUTHORITY Dated: t ia(o1,O I 5 By ilvilt) ivre&-%,L, Its cpco s i ct By 1 •• Its '.2 . Mi•, Notice Address: 3830 Pilot Knob Road Eagan,MN 551 2 Attn: nl Q oiS„-i i ►S -2 John Powers Agreement CITY OF BURNSVILLE,MINNESOTA � t By � 1 f y \ Craig Ebelin: Its City Manager Notice Address: 100 Civic Center Parkway Burnsville,MN 55337 Attn:City Manager S-3 Joint Powers Agreement CITY OF LAKEVILLE,MINNESOTA By1 - Its Ma or By i Its City Clerk / Notice Address: 20195 Holyoke Avenue Lakeville,MN 55044 Attn: Community and Economic Development Director S -4 mint Powers Agreement • APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY • Dated: t• 22. t3 By �/ Its Vice President By � Its Secretary (1 Notice Address: 7100 147th Street W. Apple Valley,MN 55124 Attu Joan Murnhv • • S-5 Joint Powers Agreement A INVER GROVE HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Dated: /- 3G-/3 By 1�!•`p A��'"� Its �4 J/2 '- T By Its Notice Address: 8150 Barbara Avenue Inver Grove Heights,MN 55077 Attn: T/le/W-0- J. L//- S-6 Joint Powers Agreement HASTINGS ECONOMIC DEVELOPMENT AND REDEVELOPMENT AUTHORITY r1 . .p • By _iv) Q,Iftp Dennis Pe Its President By _ John 'rrir : if Its E : 've Director Notice Address: 101 East 4th Street Hastings,Minnesota 55033 Attn: Executive Director S-7 Joint Powers Agreement ROSEMOUNT PORT AUTHORITY By Its YAP By I ' Its l�' Anir Notice Address: 2875 145th Street Rosemount,MN 55,068 Attn: NO IA VA/0CA- , S-8 Joint Powers Agreement FARMINGTON ECONOMIC DEVELOPMENT AUTHORITY Dated: ®4.3 By cc-- ---- • By 411 -K- -ad Its s JJ e Notice Address: 430 Third Street Farmington,MN$5024 Attn: S-9 Joint Powers A t SOUTH ST.PAUL HOUSING AND REDEVELOPMENT AUTHORITY Dated: //g./43 BY _ (az B Notice Address: 125 Third Ave.No. South St.Paul,MN 55075 Attn:Executive Director S - 10 Joint Powers Agreement WEST ST.PAUL ECONOMIC DEVELOPMENTAUTHORITY Dated: 1—.�g— 13 By IIAra,•% ft/ By . Its Exec 4-w i ircorbr Notice Address: 1616 Humboldt Avenue West St. Paul,MN 55118 Attn:Executive Director i S - 11 wia Powers Al if }} Exhibit A Contract for Services for the Open To Business Program E A- 1 Joint Powers Agreement 9298589v1 Contract for Services for the Open to Business Program THIS AGREEMENT is dated January 2,2013 and is between the Dakota County Community Development Agency("CDA")and Metropolitan Consortium of Community Developers,a Minnesota nonprofit corporation("MCCD"). WHEREAS,the CDA,on behalf of itself and the ten political subdivisions of the State of Minnesota listed on Exhibit A hereto(the"Local Government Entities"),which each have powers with respect to a city with a population over 10,000(collectively the"Municipalities"), wishes to engage MCCD to render services under a model known as"Open to Business,"an initiative providing small business technical assistance services to existing businesses and residents and other parties interested in opening a business within Dakota County(the "County")(the"Initiative");and WHEREAS,MCCD has represented itself as competent to provide the services required to administer and carry out the Initiative and has previous experience working with the Initiative; and WHEREAS,pursuant to CDA Resolution No. 12-5128,adopted on September 18,2012(the "Resolution"),the CDA is authorized to enter into this agreement with MCCD for the Initiative; and WHEREAS,pursuant to the Resolution and certain joint powers agreements to be entered into between the CDA and the Local Government Entities(the"Joint Powers Agreements"),the CDA will act as fiscal agent for the Local Government Entities in connection with this Agreement and WHEREAS,the CDA will pay from its own funds 50%of the fee charged by MCCD for the Initiative in the Municipalities and 100%of the fee charged by MCCD for the Initiative in the small cities and townships within the County with populations of less than 10,000 people ("Small Cities and Townships"),as further described herein and in Exhibit A;and WHEREAS,pursuant to the Joint Powers Agreements,the Local Government Entities will be required to pay a Participation Fee to the CDA in accordance with the schedule in Exhibit A, representing the remaining 50%of the fee charged by MCCD for the Initiative in the Municipalities. Now therefore,for good and valuable consideration,the receipt of which is hereby acknowledged,the parties agree as follows: 9293870v3 TIME OF PERFORMANCE The term of this Agreement and the period during which MCCD will provide services hereunder will commence upon execution and delivery of this Agreement and will end on December 31,2013,subject to earlier termination as provided herein. MCCD will perform services necessary to carry out the Initiative as promptly as possible,and with the fullest due diligence. COMPENSATION Subject to reduction as provided below,the CDA will compensate MCCD for its services hereunder an amount equal to One Hundred Thirty Thousand Dollars($130,000) ("Contract Amount"). The CDA will pay such amount in two equal installments,the first no earlier than January 30,2013 and the second no earlier than June 30,2013,upon receipt of invoices from MCCD. Subject to the limits above,payments will be due within 15 days of receipt of the respective invoices. The portion of the Contract Amount payable from Participation Fees will be payable by the CDA only from and to the extent such Participation Fees are paid by the respective Local Government Entities. In the event a Local Government Entity does not pay to the CDA its Participation Fee in amounts and by the deadline described in Exhibit A,the CDA will notify MCCD,and MCCD will immediately cease the Initiative in that Municipality. Upon such termination,the Contract Amount will be reduced by an amount equal to the Participation Fee which such Local Government Entity did not pay and the amount the CDA would have paid as a matching payment. SCOPE OF SERVICES MCCD will provide technical assistance to existing businesses,residents and those parties interested in starting a business in any of the Municipalities and Small Cities and Townships as further described on Exhibit B and Exhibit C attached hereto,which sets forth the Dakota Open to Business Program Scope of Services. REPORTING MCCD will submit quarterly reports to the CDA in form and substance acceptable to the CDA. Reports will provide information in the aggregate for the County and will include a subreport for each Municipality and each of the Small Cities and Townships. Reports will include the following information: ➢ Number of inquiries > Hours of technical assistance provided > Type of assistance provided • Type of business ➢ Annual sales revenue 9293870v3 pS ➢ Number of businesses opened ➢ Number of business expanded/stabilized ➢ Number and amounts of financing packages ➢ Demographic information on entrepreneurs • Business address or resident address ➢ Number and wage of FTEs created ➢ Number and wage of FTEs retained The required reporting schedule is as follows: 1g quarter January—March,report due April 30th 2°d quarter April—June,report due July 31S` 3`I quarter July—September,report due October 31st 4th quarter October—December,report due January 31$`of 2014 In addition to the foregoing,MCCD will provide additional reports as reasonably requested by the CDA. PERSONNEL MCCD represents that it has,or will employ or contract for,at its own expense,all personnel required to perform the services necessary to carry out the Initiative. Such personnel will not be employees of,or have any contractual relationship with,the County,the CDA or any of the Local Government Entities. No tenure or any other rights or benefits,including worker's compensation,unemployment insurance,medical care, sick leave,vacation pay,severance pay,or any other benefits available to the County's, the CDA's or any of the Local Government Entities' employees shall accrue to MCCD or employees of MCCD performing services under this agreement. The MCCD is an independent contractor. All of the services required to carry out the Initiative will be performed by MCCD and all personnel engaged in the work shall be fully qualified and shall be authorized or permitted under State and local law to perform such work. USE OF CDA OFFICE SPACE The CDA will make available a cubicle space for MCCD personnel at the CDA office building for use by MCCD in carrying out the Initiative. MCCD personnel will have access to the CDA's meeting rooms,wireless Internet service,copy machines and printers. MCCD personnel shall comply with all CDA office rules and policies regarding the use of CDA office space,equipment and internet access. If the CDA,in its sole discretion,determines that MCCD Personnel have failed to comply with CDA office 9293870v3 rules and policies,MCCD Personnel will be required to vacate the CDA office and the CDA will cease to provide MCCD office space to carry out the Initiative. INTEREST OF MEMBERS OF THE CDA AND OTHERS No officer,member,or employee of the CDA and no member of its governing body,and no other public official or governing body of any locality in which the Initiative is situated or being carried out,who exercises any functions or responsibilities in the review or approval of the undertaking or carrying out of the Initiative,will participate in the decision relating to this Agreement which affects his/her personal interest or the interest of any corporation,partnership,or association in which he/she is,directly or indirectly, interested or has any personal or pecuniary interest,direct or indirect,in this Agreement. ASSIGNABILTY MCCD will not assign any interest in this Agreement,and will not transfer any interest in the same without the prior written approval of the CDA. COMPLIANCE WITH LOCAL LAWS MCCD agrees to comply with all federal laws,statutes and applicable regulations of the State of Minnesota and the ordinances of the Local Government Entities. INSURANCE MCCD agrees at all times during the term of this Agreement,and beyond such term when so required,to have and keep in force the following insurance coverages: Limits, 1. Commercial General Liability on an occurrence basis with contractual liability coverage: General Aggregate $2,000,000 Products—Completed Operations Aggregate 2,000,000 Personal and Advertising Injury 1,500,000 Each Occurrence—Combined Bodily Injury and Property Damage 1,500,000 2. Workers' Compensation and Employer's Liability: Workers' Compensation Statutory In the event that MCCD should hire employees or subcontract this work, MCCD shall obtain the required insurance. Employer's Liability. Bodily injury by: Accident—Each Accident 500,000 Disease—Policy Limit 500,000 9293870v3 Disease—Each Employee 500,000 INDEMNIFICATION MCCD agrees to defend,indemnify,and hold harmless the County,the CDA,the Local Government Entities,and each of their respective officials,officers,agents,volunteers and employees from any liability,claims,causes of action,judgments,damages,losses, costs,or expenses,including reasonable attorney's fees,resulting directly or indirectly from any act or omission of MCCD,its subcontractors,anyone directly or indirectly employed by MCCD or any of its subcontractors,and/or anyone for whose acts and/or omissions MCCD may be liable in the performance of the services required by this Agreement,and against all loss by reason of the failure of MCCD to perform any obligation under this Agreement. NOTICES A notice,demand,or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by mail,postage prepaid, return receipt requested,or delivered personally;and " (a) In the case of MCCD,is addressed or delivered personally to: Metropolitan Consortium of Community Developers 3137 Chicago Avenue South Minneapolis,MN 55407 (b) In the case of the CDA is addressed or delivered personally to: Andrea Brennan,Director of Community and Economic Development Dakota County Community Development Agency 1228 Town Centre Dr. Eagan,MN 55123 or at such other address with respect to any party as that party may designate in writing and forward to the other as provide in the Section. MODIFICATION This Agreement may not be modified,changed,or amended in any manner whatsoever without the prior written approval of all the parties hereto. NON-DISCRINIINATION In connection with its activities under this Agreement,MCCD will not violate any Federal or State laws against discrimination. DEFAULT AND CANCELLATION Failure of the MCCD to perform any of its obligations under this Agreement to the satisfaction of the CDA will constitute a default hereunder. 9293870v3 Unless MCCD's default is cured within 15 days following notice by the CDA,the CDA may(i)cancel this Agreement in its entirety by 5 additional days' written notice to MCCD,or(ii)withhold payment from MCCD as long as such default continues. MINNESOTA LAWS GOVERN The Laws of the State of Minnesota shall govern all questions and interpretations concerning the validity and construction of this Agreement and the legal relations between the parties and their performance. The appropriate venue and jurisdiction for any litigation will be those courts located within the County. Litigation,however,in the federal courts involving the parties will be in the appropriate federal court within the State of Minnesota. If any provision of this Agreement is held invalid,illegal or unenforceable,the remaining provisions will not be affected. 9293870v3 DAKOTA COUNTY COMMUNITY DEVE MEG`--�-ENCY By: L)Litit Executive Direc r Date: l ?i/�3 MCCD By: Printed Name: Printed Title: Date: 9293870v3 DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY By: Executive Director Date: MCCD By: Printed Name. y t"'". �• Printed Title: ic e e..." 1�- �Q dv-r- Date: 9293870v3 Exhibit A Local Government Entity Participation Fee Schedule Municipality Local Government Total CDA Local Entity Fee Share of Government Fee Entity Participation Fee Due 1/30/13 Eagan Economic Development Eagan Authority $15,000 $7,500 $7,500 City of Burnsville Burnsville $15,000 $7,500 $7,500 City of Lakeville Lakeville $15,000 $7,500 $7,500 Apple Valley Economic Apple Valley Development Authority $15,000 $7,500 $7,500 Inver Grove Heights Economic Inver Grove Development Authority $12,500 $6,250 $6,250 Heights Hastings Economic Hastings Development and $10,000 $5,000 $5,000 Redevelopment Authority Rosemount Port Authority Rosemount $10,000 $5,000 $5,000 Farmington Economic Farmington Development Authority $10,000 $5,000 $5,000 South St.Paul Housing and South St.Paul Redevelopment Authority $10,000 $5,000 $5,000 West St.Paul Economic West St.Paul Development Authority $10,000 $5,000 $5,000 Small Cities n/a and $7,500 $7,500 $0 Townships Total $130,000 $68,750 $61,250 9293870v3 Exhibit B Dakota Open to Business Program Scope of Services Open to Business("OTB")Technical Assistance Services MCCD will provide intensive one-on-one technical assistance to Municipalities' and Small Cities' and Townships' businesses,residents and aspiring entrepreneurs intending to establish, purchase,or improve a business in Municipalities and Small Cities and Townships within Dakota County(the"County"). MCCD will dedicate one full time staff person based in the County to provide the Technical Assistance Services("Dakota OTB Staff'). In addition,MCCD will make available the expertise of all MCCD technical and support staff in the delivery of services to Dakota Open to Business Program. Technical assistance includes,but is not limited to,the following: ➢ Business plan development ➢ Feasibility analysis ➢ Marketing • Cash flow and other financial projection development ➢ Operational analysis ➢ City and State licensing and regulatory assistance ➢ Loan packaging,and other assistance in obtaining financing ➢ Help in obtaining competent legal advice MCCD Dakota OTB Staff will be available to meet clients at the CDA office building,various Municipality city halls or at the client's place of business. MCCD Dakota OTB Staff will provide technical assistance on a walk-in basis monthly in each Municipality,if requested. MCCD will also hold two-hour"Test Drive Your Business Idea"sessions once a month in various Municipality locations. Open to Business Access to Capital Access to capital will be provided to qualifying businesses through MCCD's Emerging Small Business Loan Program(see Exhibit C Small Business Loan Program Guidelines below). MCCD also provides its financing in partnership with other community lenders,banks or Local Government Entities interested in making capital available to residents and/or businesses in their community. 9293870v3 EXHIBIT C Small Business Loan Program Guidelines Loan Amounts: • Up to$25,000 for start-up businesses • Larger financing packages for established businesses • Designed to leverage other financing programs as well as private financing provided by , the commercial banking community. Eligible Projects: • Borrowers must be a"for-profit"business. • Business must be complimentary to existing business community. • Borrowers must have equity injection as determined by fund management. Allowable Use of Proceeds: • Loan proceeds can be used for working capital,inventory,building and equipment and general business operations. interest Rates: • Loan interest rate is dependent on use,term and other factors,not to exceed 10%. Loan Term Length: • Loan repayment terms will generally range from three to five years,but may be substantially longer for major asset financing such as commercial property. Fees and Charges: • Borrowers are responsible for paying all customary legal and other loan closing costs. 9293870v3 o�F�►ii City of Farmington 430 Third Street Farmington,Minnesota gam.X10 651.280.6800•Fax 651.280.6899 +"'.",Rp11' wwwci.farmington.mn.us TO: EDA Members FROM: Lee Smick,AICP, CNU-A City Planner SUBJECT: Business Visits 2012 Summary and Plan for 2013 DATE: January 28, 2013 INTRODUCTION/DISCUSSION Discussions for creating a Business Retention and Expansion(BR&E)program began on April 23, 2012 as shown in the attached memo. The program serves a number of key purposes including: to say"thank you" for locating their business in Farmington,to encourage business owners to expand their existing businesses,to help businesses gain awareness of the community's available resources,to provide opportunities to collaborate with business owners, to build opportunities for businesses to work with other businesses,to learn about the strengths and weaknesses of the business climate, and to learn about the business owners and thereby,to assist in marketing the businesses. The first business visits began on May 10, 2012. Since then a total of 48 business visits were performed in 2012. The program has been a success in terms of the City communicating interest in the businesses,the opportunity to provide assistance or promote successes, and an opportunity to say"thank you"for making Farmington"the choice"to locate in our community. Summation of comments occurring at Business Visits: • Appreciated visits from Farmington City Council (EDA). • Concern expressed about high commercial taxes in Farmington. • Some businesses have expanded or are contemplating expansion. • The FBA is important for the City. • Farmington needs business incentives for new and expanding businesses. • Businesses enjoy being in Farmington. • Some businesses—employees don't live in Farmington. • Industrial Park—when City is seal coating streets, notify businesses so they can seal coat their parking lot. • TIF program brought them to Farmington. • Business is picking up and busy. • Bids for work by City should stay in community to hire local businesses or material. • Business doesn't advertise—mostly word of mouth. • EDA should support cross-marketing of businesses or promote this in EDSP. • FBA should recognize Farmington Mall area more. • City does not contact businesses at all—been in existence for 10 years—never contacted. • Businesses want wayfmding signs. • EDA members suggested improvements to businesses (use windmill at Restwell for signage). The business visit summaries are also attached for review. Overall,the BR&E program was a success in its first year and provided excellent information to EDA members concerning businesses in the community. 2013 Schedule of Business Visits The BR&E program has been included in a program packet for review with the EDA on February 28, 2013. Business visits will begin in February 2013 at the FAA (see attached schedule). Dates shown on the schedule are noted by week at this time until staff can determine which days are most available. Locations are proposed awaiting approval of businesses; however, they should mostly remain consistent to the calendar throughout the year. EDA members will be asked for their participation at the EDA meeting prior to the first visit in the second and third weeks of the month. ACTION REQUIRED Review 2012 summation and forward any comments concerning business visits in 2013 to the new EDA on February 25, 2013. Respect lly` bmitt=• Lee Smick, City Planner AICP, CNU-A 61'11 30 /%4° tark, ..7,.., 0101 PP' 11, or ge -"r- 1 I:4 0)° F1 I 1141 I Ili'ki 1 sve4w I P P P.'-. " 4 �• A PROM�S`� s City of Farmington Business Retention & Expansion Program 2013 DRAFT FARMINGTON BUSINESS RETENTION & EXPANSION PROGRAM Business Retention and Expansion Program In an effort to encourage the retention and expansion of existing businesses, many communities establish Business Retention and Expansion (BR&E) programs; hold Town Hall meetings, or meet with existing business owners at City Hall to learn about and assist those businesses. These programs are designed to demonstrate a community's appreciation for the businesses, and identify immediate needs, future plans, and opportunities for the community to deliver programs and services identified through a business survey process. Business Visits Business visits (or interviews) serve four general purposes: (1) introduces the EDA, Council and City staff, (2) provides information about available programs and services, (3) responds to specific requests, and (4) learns about business needs, plans, and attitudes of the community through an informal survey. A successful BR&E strategy serves the following key purposes: • To demonstrate to existing businesses that the community appreciates their contribution to the local economy. • To encourage expansion that leads to sustainable job growth. • To assist local businesses in gaining awareness of available resources. • To develop collaborative relationships for participating in comprehensive long-range retention and expansion activities. • To build the community capacity and cooperation to sustain growth and development activities. • To provide better information and understanding for all local leaders of the strengths and weaknesses of the business climate. • There is no better marketing strategy than the demonstration of a successful and thriving business climate. The Business Visit Program is as follows: Identify the Purpose of the Visit The EDA determines the purpose of the visit, the method of collecting data, the number of businesses to be visited, and the time frame within which the visits will take place. The attached schedule confirms the visits for the year. Establishing a Visitation Team The business visits are typically done as a three-person team. The team will include one EDA/Councilmember, one EDA Member, and one staff member. The team will question a business through the use of a survey (see attached). Training for Business Visits The business visit training will be addressed at the EDA meeting prior to the visit scheduled. The business visit should include the following: 1. An explanation of the purpose of the survey. 2. An explanation of the role of the BR&E team. 3. Discussion of team member duties. 4. Wearing of name tags at visit. Component 1. Purpose of the Survey The purpose of a business survey must be established before a visitation program is initiated. The purpose of the survey should guide the development of the questions proposed to the business, and a purpose statement should be included in the survey used in the visit. Three-person teams visiting businesses should be familiar with the purpose of the survey so that they both understand why they are conducting the survey and can explain the benefits of participating in the visit. The following are some typical purpose statements: • Demonstrate the community's appreciation for its existing businesses. • Identify immediate problems facing a business so that these problems can be addressed. • Identify perceptions of the community as a place to do business. • Identify the training and technical assistance needs of the business. • Identify the future plans of a business. • Build community capacity for sustained growth and development. Component 2. Role of the Interview Team Staff will take notes during the visit after they inform the owner that they will include their notes in a summation to the EDA members. The team is responsible for knowing the roles of the team and its purpose, understanding the answers provided by the business owners/operators, and identifying any potential areas of concern (called red flags) that should be addressed immediately by the EDA. Component 3. Review the Survey Instrument Business visitation training (at an EDA meeting) is not complete until the teams have been introduced to the survey instrument. The members of the team must understand the intent of each question and know how each question fits into the overall survey and helps to achieve one or more of the stated purposes of the survey. Familiarity with the survey's purpose, question types, and answer formats helps the interviewers to accurately administer the survey. A detailed review of the survey instrument in a group setting allows team members to ask their own questions and to learn from the questions of others about the content and intent of the survey. Component 4. Interviewing and Note-taking Techniques The background on the project and purpose of the survey should clearly and concisely identify that the survey is developed by the EDA, why the survey is being conducted (the purpose statement), the intended use of the survey results, how the data will be presented, and any guidelines for the survey respondent. The confidential nature of the process must be stressed. If the BR&E team will be scheduling the business interview directly with the business owner/operator, it is useful to prepare a script for use in the initial contact. It should be stressed that the script should serve as a guide for the conversation and should not be read verbatim. The script should contain a brief statement on the BR&E background. The confidential nature of the process should be included in the script, as well as any "rules" for conducting the interview. A common rule for interviews is called the "skip it" rule, which tells the business owner/operator that he may choose not to answer any question without providing a reason for non-response. This initial contact script can also be used again at the start of the formal interview process during the visit. There should be guidelines for the three- person team before the visit, during the visit, and after the visit, and individual guidelines for the interviewer and the note-taker. Successful BR&E programs are the result of good preparation and cooperation. Following the approach outlined in this information will enhance the chances of a successful program in our community. BR&E Survey Questions Mayor, Council Member, and EDA—Please read the questions posed below and consider which ones you would like to ask a business on your visit. Here is an example of what to say about the questions below: "Thank you for meeting with us today. There are 3 purposes for meeting with you including(1)to introduce the EDA, (2)respond to specific requests, and(3)learn about your business needs,plans, and attitudes of the community. The answers you provide will remain confidential." 1. We are interested in learning about your primary products or services. 2. Who are your key competitors and where are they located? 3. How many employees work at your location? 4. Compared to last year is your business growing, declining, or staying the same? 5. How satisfied are you with the present location of your business? 6. What is your overall opinion of Farmington as a place to do business? 7. What are your top 3 reasons for locating or keeping your business in Farmington (i.e., access to airport, quality of living, , quality of housing, safety services, access to customers or suppliers,proximity to home, cost of doing business, workforce availability, access to business support such as printing-financial services)? 8. Please describe your immediate business needs or concerns that could be addressed by the City or other organizations (i.e., Dakota County Technical College)? 9. Are you planning on renovating or expanding your business? 10. Do you face constraints to renovating/expanding? 11. Are you currently considering proposing to close your business or relocate outside of the City and what is the reason? 12. Are there any questions you would like to ask us? "Thank you for taking your time to meet with us. Once again,the answers you provided will remain confidential." io4� iy�, City of Farmington 430 Third Street Farmington,Minnesota �o o 651.280.6800•Fax 651.280.6899 ���° `a www.cilarmington.mn.us Dr. Dungy: Thank you for your time on giving feedback to us concerning the recent development of Immanuel Dental in downtown Farmington. The City will use your responses to determine if changes need to be made to our processes. Did you find staff courteous and helpful? Was staff responsive to all of your questions concerning this process?How? Were you confused with the development process that was explained to you? Do you have a suggestion for the Community Development process that you just went through? Would you recommend building in Farmington to others? Is there anything we can do better? Sincerely, Lee Smick,AICP CNU-A City Planner N w W G Z W Q c � N o O ca O O • Cl) >+ 0 cca _co a) = 06 U) W co E C . 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C C of = Y 0 N c p E co 0 m ¢ v) I-- > 1Y u°.. � < 0 L > > C Z O c Z ZO o 0 EL 1• = c c Y v o co o ° '� ` ° +- � o 0 W 0 o a o c as N ce,Z N a) c. ca C I C 2 N w 03 o C t "� = M d Min ' c O w cao sc co ° .... .r ~ v) Ecn Q = c W 53V aP 3 = c m .—° a9 E c`a72 0I— •ia 3 = I- co Z C7 E a) a) co` o .c F- . 3 a o M w e 06 c o F' 06 a) co W rn ° Y ,r c o s N s � � c c c� -c j•W +? 003 ....„ 0° 00 00 0 ° oW ow "0o o = 00 co i 2 w o cn co co z CD z w cn _SO Z H zz co .—CL U) N r co co a W t t QoP cor P O N r t1. r P Z w E cU`a >. >. a) 4>+ rn0) O. 0. •.r > > 0 0 (n F- N a a ca ca , � O ° ° O ti.. a) a) 0 0 ` O O ` a) a) a M < < 22 � � -, � < < d (nc) 00 �, ZZ doo o 4- 4- 45 4- 45 4- 4- 4- 4- 4- 4- 4- 4-4- ` 4-4- 4- D 4- 4- 4- CO co t — -flY Y Y � YY � Y d � YY a. 0 2 a 2 - Q f O z° SC City of Farmington Business Retention and Expansion 2012 �► City of Farmington 'y 430 Third Street • ' Farmington,Minnesota 651.280.6800•Fax 651.280.6899 pt*".A no" www.ci.farmington.mn.us TO: David McKnight, City Administrator FROM: Lee Smick,AICP CNU-A City Planner SUBJECT: Summary of Business Visit-May 3, 2012 DATE: May 4, 2012 The BR&E team included Mayor Larson, Council Member Bartholomay, and City staff(Lee and Tony). The team visited businesses in the Tamarack Shopping Center and Roundbank on May 3,2012. During all of the business visits below, Mayor Larson suggested that the businesses come to a Council meeting under citizen comments and introduce their business to the viewing public. A summary of each business visit is described below. Thrivent Financial Grant Beyl, owner,met with the BR&E team. He was pleased that Council Members were visiting businesses. When he moved to Farmington,he expected a 10%loss in his business,however,his company has grown by 50% since opening,with Dakota Electric being one his biggest clients. He chose his business location because of the high visibility on TH 3. He is proposing to expand his business in the future. He would like to build a financial office along TH 3,but he is also open to Vermillion River Crossing. He was very pleased with staff's assistance when he moved into this location. Anytime Fitness Kyle Henning, owner,met with the BR&E team. He was also pleased with the visit from the team and thought it was an excellent idea. In the past 6 years,he continues to grow his client list. He has seen an increase from homes in Empire Township. He's hoping to get more clients from Mystic Meadows, Parkview Ponds, and other homes in that area. He also stated that when Pellicci Hardware opened down the street, he saw an increase in his client list. He recently expanded into the space to the west and built a studio for yoga, etc.. He has also upgraded his technology through the installation of TV monitors on the elliptical and treadmill machines and a virtual instructor in the studio. He would like to see a stoplight on TH 3 and CSAH 66. Roundbank Kevin Kuboushek,bank manager and his staff met with the BR&E team. He would also like to see a stoplight at TH 3 and CSAH 66 to stop traffic on TH 3. Business continues to grow. He would like to see Farmington send out new resident packets that advertise businesses. He feels that 209th Street is being missed by cars traveling north on TH 3 because of the homeowner's shrubs directly south of 209t Street. Staff will look into this issue. He told the team that Roundbank will be rolling out a number promotional ideas in the upcoming months to draw even more business to the bank. Dunn Brothers Dave Harnett, owner,met with the BR&E team. He stated that he is steadily growing in sales. He stated that Dunn Brothers typical locations are in busier areas, but his store is doing quite well even though it doesn't fit the demographics. He just received 3 awards from Dunn Brothers for the growth of his store. He stated that businesses in Farmington need to ride out the long climb to profitability. He would also like a stoplight at TH 3 and CSAH 66. He agrees with the other businesses that Tamarack has a tough entrance to the businesses here. He is planning on expanding to the east to provide for a meeting room in the near future. pia& Respectfully s e - -d, /04, 011P0 ed°. --•-J'e Lee Smick,AICP CNU-A City Planner V•%� At io 1� City o f Farmington Third Street Farmington,Minnesota 651.280.6800•Fax 651.280.6899 wwwci.farmington.mn.us TO: David McKnight,City Administrator FROM: Tony Wippler,Assistant City Planner SUBJECT: Summary of Business Visits—May 10,2012 DATE: May 11,2012 The BR&E team included Mayor Larson,Council Member Bartholomay and City staff(Tony). The team visited three businesses in the Downtown on May 10,2012. A summary of each business visit is described below: Janie's HomeTeam/Market on Oak Janie Tutewohl,owner,met with the BR&E team. Mrs.Tutewohl mentioned that business for Market on Oak is up 20% in March and April from last year. She attributes a lot of this increase to marketing. She also mentioned that she has seen an up tick in the real estate market of late and housing prices also seem to be on the incline. She felt the City was missing out on advertising opportunities in our utility bills. She would also like to see more City employees and Council Members be more active in attending community events. Lastly,she believes a maintenance code should be considered to address both residential and commercial properties. Gerster Jewelers Jim Gerster,Jr.,owner,met with the BR&E team. Mr.Gerster mentioned that business is surprisingly good. The store never closed after the recent break in.He believes the Farmington Business Association is a good thing and is really starting to take off. He has seen an increase in communication not only between the City and businesses but between businesses themselves. He specifically mentioned that the Car Show and Christmas Tree festivities have been really good not only for the downtown but the community as a whole. He mentioned that the City and/or the FBA should look at promoting the City with something similar to the Explore Minnesota commercial. He also indicated that it is difficult to get people from north Farmington to come south into downtown. This mentality needs to change somehow and maybe that is through promotion and advertising. Farm Bureau Financial Services Dan Pumper,agent and owner,met with the BR&E team. He stated that business is a little slow with the downturn in the economy. He has been in this current location for approximately 3 years and it has done fairly well over that time period. He mentioned taxes are high in town and he is not sure how some businesses from a cash flow standpoint are able to survive. He inquired about commercial vacancies and whether the City has developed or would be interested in developing and exit survey for businesses that are either in the process of closing or have closed. Respectfully submitted, Tony Wippler, ssistan ty Planner oti D i , City of Farmington 's 430 Third Street Farmington,Minnesota . 410 651.280.6800•Fax 651.280.6899 JT•A IRO www.cifannington.mn.us TO: David McKnight, City Administrator FROM: Lee Smick,AICP CNU-A City Planner SUBJECT: Summary of Business Visit—June 13, 2012 DATE: May 13,2012 The BR&E team included Council Members Fogarty and Bartholomay, and City staff(Lee). The team visited businesses that included Aerospace Engineering, Bernard Dalsin Manufacturing, R&L Carriers, and Valmont on June 13,2012. A summary of each business visit is described below. Aerospace Engineering Bob Blume and Brian Anderson met with the BR&E team. They took the team on a tour of the facility. Their product is a rubber/plastic sheeting that covers equipment, etc., and is also used in space. Their product is on the International Space Station as well as numerous satellites. They also construct portable hyperbolic chambers for athletes, autistic children, and soldiers when they come back from certain missions. They have 73 employees currently and they are running two shifts. They do have room for expansion in the rear of their building. They enjoy being in Farmington, and they are in favor of curb and gutter design rather than ditches in the park. Bernard Dalsin Manufacturing Tim Dalsin met with the BR&E team. Their product is forming metal sheeting into fireplace vents. They have 18 employees and some of them are residents of Farmington. Most of the others come from Northfield and Bloomington. The reason they located in Farmington was the TIF program in the industrial park. They also liked the open lot to the west of their building. They are also looking to seal coat their parking lot and when the City does a seal coat project in the industrial park, they along with others businesses there would like to be notified so that they may utilize the company to seal coat their parking lots. Dalsin also likes the curb and gutter rather the ditches. R&L Carriers Mike Monforte met with the BR&E team. Mike has only been in this location since the first of the year. He said that their company's location was not dependent on how far they were from I-35 or US 52 because deliveries would have to be made anyway. They continue to be busy with deliveries. The bay area was quite impressive. They also like the curb and gutter. Valmont Jim Morris (CEO), Bill Cook(Controller), and Lindsey Calliguri(HR)met with the BR&E team. Valmont constructs light poles, communication poles, and flag poles. They said that they have 120 employees, 25% of which are Farmington residents. They have 1St,2nd, and 3rd shifts working. They would like to see Farmington hold a Job Fair for businesses in the community looking for employees (Lee will be working with Lindsey on this idea). They are working with DCTC to start a manufacturing program to train students. Additionally, Valmont would like to see a"meet your fellow industrial businesses"to get to know their neighbors. Their employees would like a grocery store and more restaurants (Chipolte)in the community. They have to drive out of town for different choices. They don't have enough employees flying into the cities to warrant a hotel. They're also concerned about the daycare walking small children on the park streets because there are no sidewalks. Staff will check into that issue with the daycare. Respectful) submitte• 4 0'"---- . 110- 1111--i 4 F■ Lee Smick,AI P C ■ e City Planner 40RMi , City of Farmington it. /iv 430 Third Street 4F-1- Farmington,Minnesota lor 651.280.6800•Fax 651.280.6899 www.cilarmingtoninn.us TO: David McKnight, City Administrator FROM: Lee Smick, AICP CNU-A City Planner SUBJECT: Summary of Business Visit—June 21,2012 DATE: June 13, 2012 The BR&E team included Mayor Todd Larson and City staff(Lee). The team visited businesses that included Colleenie's Beanies, The Mug, Subway, and Snap Fitness. A summary of each business visit is described below. Colleenie's Beanies Colleen Warner met with the BR&E team. Colleen told us that she had 10 children when she started and it has grown to 42 at present time. Her employee count has also expanded from 2 to 9 employees. She will be expanding into the old Get Tan suite in the upcoming months to locate an infant facility. She will be letting her customers know that the grocery store in town has been changed. She will also ask customers"what types of businesses they would like to draw people downtown", as the Mayor requested. The Mug Brian met with the BR&E team. He stated that business is picking up. The owner will be expanding the bar to a full sized one. They have also expanded their menu. The Mayor mentioned that they could speak at the Council about their business and we will send out a reminder to them about Flavors of Farmington. Subway Jodi, manager,met with the BR&E team. She stated that they are always busy. She mentioned that they have been in downtown Farmington for 19 years. There were no issues to discuss. Snap Fitness Barrie Morasco met with the BR&E team. She stated that business is good with 320 memberships and 400 users at the gym. She advertises only a mile from the gym because after that no one will drive that far to a gym. She is offering students 3-month memberships for the summer. She started the business 3 years after she moved here and the gym has been open 6 years. She chose the business because its close to her house. She would like to see a health food store in town(Whole Foods). She stated that the trails in Farmington are excellent. She would like to see the"Tour de Farmington"bike race brought back. She thinks our pool is excellent gained from her knowledge of being a lifeguard for years. Respect mitted, ee mi ,AICP CNU-A City Planner e■Ritt. City of Farmington � 430 Third Street r Farmington,Minnesota '�10 651.280.6800.Fax 651.280.6899 A��CI ���,,,��„ www.ci.fitrmington.mn.us TO: David McKnight, City Administrator FROM: Lee Smick,AICP CNU-A City Planner SUBJECT: Summary of Business Visit—June 21, 2012 DATE: June 23,2012 The BR&E team included Mayor Todd Larson and City staff(Lee). The team visited businesses that included Colleenie's Beanies, The Mug, Subway, and Snap Fitness. A summary of each business visit is described below. Colleenie's Beanies Colleen Warner met with the BR&E team. Colleen told us that she had 10 children when she started and it has grown to 42 at present time. Her employee count has also expanded from 2 to 9 employees. She will be expanding into the old Get Tan suite in the upcoming months to locate an infant facility. She will be letting her customers know that the grocery store in town has been changed. She will also ask customers"what types of businesses they would like to draw people downtown", as the Mayor requested. The Mug Brian met with the BR&E team. He stated that business is picking up. The owner will be expanding the bar to a full sized one. They have also expanded their menu. The Mayor mentioned that they could speak at the Council about their business and we will send out a reminder to them about Flavors of Farmington. Subway Jodi,manager, met with the BR&E team. She stated that they are always busy. She mentioned that they have been in downtown Farmington for 19 years. There were no issues to discuss. Snap Fitness Barrie Morasco met with the BR&E team. She stated that business is good with 320 memberships and 400 users at the gym. She advertises only a mile from the gym because after that no one will drive that far to a gym. She is offering students 3-month memberships for the summer. She started the business 3 years after she moved here and the gym has been open 6 years. She chose the business because its close to her house. She would like to see a health food store in town(Whole Foods). She stated that the trails in Farmington are excellent. She would like to see the"Tour de Farmington"bike race brought back. She thinks our pool is excellent gained from her knowledge of being a lifeguard for years. Respectfu 'tte dr, - 'Lee Smick, AICP C I-• City Planner �o�Iii) City of Farmington c,4 $ 430 Third Street r ` Farmington,Minnesota 651.280.6800•Fax 651.280.6899 4''"' . www ci.facmington.mn us TO: David McKnight, City Administrator FROM: Lee Smick,AICP CNU-A City Planner SUBJECT: Summary of Business Visit—July 11, 2012 DATE: July 12, 2012 The BR&E team included Julie May, Terry Donnelly and City staff(Lee). The team visited businesses that included Dakota Wood Design, Installed Building Solutions,Family Chiropractic Center, and Feely Elevator. A summary of each business visit is described below. Dakota Wood Design Keith Gilmore met with the BR&E team. He bought the building in 1993 and the building was constructed in the 40's. The building is 37,000 square feet in area and Dakota Wood takes up 13,000 sf of it. Keith has 11 tenants in the building and uses it as an incubator building for small business such as pin ball repair, antique car restoration, and metal works. He has a 4-man shop and hopes to improve the façade of the building in the future. His business in mostly advertised by word of mouth. He believes that Lakeville Transmission will be moving from the location on August 1st Installed Building Solutions Jeremy LaBeau met with the BR&E team. Jeremy said that they are very busy and his company takes up 25% of the share in the insulation business in the metro. He also has trucks running north of Minneapolis to install insulation. He has a storage building in Hampton to store trucks. He has the building up for sale because he needs more space. He would like a campus-style site with a 30,000 sf building. He is currently in his space at 15,000 sf. Staff is looking for a site with an existing building on it to purchase. Family Chiropractic Center Dr. Annie Mikelson and Dr. Truax met with the BR&E team. Annie bought the practice from Molly Aaron and signed the rental agreement in April. Dr. Truax works part time at the location. Annie installed an x-ray machine in the building when she moved in. She said her business is growing. She will have a ribbon cutting in the near future. Feely Elevator Mark Malecha met with the BR&E team. He told us that the building was built in 1894 and is the oldest privately owned elevator in the State. There have been only two owners of the building. He said at business is growing and his very busy. They are now selling dog food, weed killer, etc to consumers to widen their scope for business. Prices are extremely reasonable. Respec • i i • Lee Smick, AICP CNU-A City Planner obFMH4 City of Farmington 430 Third Street Farmington,Minnesota 0 651.280.6800•Fax 651.280.6899 Ate.A Too* www.ci.fSrinington.mn.us TO: David McKnight, City Administrator FROM: Tony Wippler,Assistant City Planner SUBJECT: Summary of Business Visits—July 19, 2012 DATE: July 20, 2012 The BR&E team included Mayor Todd Larson, Jeri Jolley and City staff(Tony). The team visited businesses that included Vintage Marketplace, Premier Bank, Anchor Bank, Farmington Independent, and Fan Club Athletics. A summary of each business visit is described below. Vintage Marketplace Nancy Cauley met with the BR&E team. Ms. Cauley mentioned business is going good and she is very pleased with her location in the downtown. She is seeing more and more people coming to the store, she even has regulars coming from Wisconsin. She mentioned that she has what is called"occasional sales"where everything in the store is on sale and basically cleans out the store and restocks it with new items. These types of sales are very popular around the state and there is a website(www.occasionalsales.com)that indicates where these sales are happening and when. Premier Bank Carole Severson and Brandon Wilcox met with the BR&E team. Premier Bank has been in this location since the early 1990's. Ms. Severson mentioned that business has been good. Foot traffic comes and goes;however, they have noticed a pickup in traffic on Thursdays due to the Farmers' Market. They attribute the downturn in lobby and foot traffic to the accessibility of the internet,most banking options and questions can be answered through the web so the need to physically go to the bank is not as relevant anymore. The bank is very competitive with lending money,they are looking for more and more ways to get the money out. Anchor Bank Lisa Franxman met with the BR&E team. Ms. Franxman mentioned that business has been good as of late. They are making a more and more concerted effort in being involved in the community. She identified a few things that she believes could help Farmington,they were: • Additional growth in the commercial sector; • A need for a recreation center or YMCA type facility for the youth of the community; • Chain restaurant; She feels Farmington is on the brink of moving forward and that the opportunity is here for business. Farmington Independent Nathan Hanson met with the BR&E team. Mr. Hanson mentioned that print subscriptions are lower than they would like and have been going down for the last three years. However, overall readership is up due in large part to online reading. He mentioned that Twitter and Facebook have been huge for the newspaper. Their lease is up next year but they will likely reup as they like being in the downtown. On suggestion that was brought up was the idea of establishing a Welcome Wagon for the community. Fan Club Athletics Stacey Schultz met with the BR&E team. Mrs. Schultz stated business has been steady and that a bulk of her business is outside of Farmington with the communities of Apple Valley, Rosemount and Hastings. She mentioned that she has reduced or stopped carrying such things as shoes, shin guards and the like because she cannot complete with stores such as Dick's Sporting Goods when it comes to those"smaller" items. She mentioned that they just signed the account for Christian Life. The one suggestion that she had for the city was to look at instituting a recycling program in the downtown. Respectfully submitted, "v Tony Wippler, Assistant City Planner �o�F i�, City of Farmington 0 430 Third Street .` z Farmington,Minnesota t.'�10 651.280.6800•Fax 651.280.6899 www.cilarmington.mn.us TO: David McKnight, City Administrator FROM: Lee Smick, City Planner SUBJECT: Summary of Business Visits—August 15, 2012 DATE: August 16, 2012 The BR&E team included Council Member Jason Bartholomay,Jeri Jolley and City staff(Lee&Tony). The team visited businesses that included Crop Characteristics, Minnesota Pipe,JIT Powder Coating, and Thelen Cabinet Company. A summary of each business visit is described below. Crop Characteristics Scott Sargent, owner,met with the BR&E team. Mr. Sargent stated that business is going well and they are busy. They have been at this location for 14 years after moving the business from Northfield. The business consists of testing crops such as alfalfa and red clover for distribution to companies selling seed to farmers. They also rear insects to be sent to researchers involved in breeding corn, cotton, and other crops. Field testing is conducted near Northfield. They sell their product all over the world. They don't do any advertising; it's all by word of mouth through the breeding community. Minnesota Pipe Wade Baumberger, Vice president,met with the BR&E team. He stated that their business activity is getting better. They distribute pipe from this facility to sites all over Minnesota and North Dakota. The pipe is brought in by trucks or Progressive Rail in Lakeville. They have been in the location for over 15 years. In the future, they would like to install another loading dock facing one of the interior roads for easy access of trucks carrying the product. The Code states that this may occur because they are an interior lot in the park. JIT Powder Coating Russ Young, sales manager,met with the BR&E team. They coat powder onto items of all sorts and bake them in a large oven. They have 53 employees currently,with 80-85%being Hispanic. Russ would like to see more affordable housing to house his people. He thinks more businesses in the Industrial Park should diversify their staff. They stated that they are very busy. Thelen Cabinet Company Jeff Thelen met with the BR&E team. He stated that he currently has 5 employees due to the economy;the building was sized for 15 employees. His work is mostly with remodels and commercial buildings. He was curious why he didn't get a chance to bid when the license center was going to build cabinets in City Hall. Thelen says that he pays $30,000 in property taxes and is concerned that businesses will leave town because of the overbearing cost to do business. He wants to know what kind of feedback we get for the Community Guide Quarterly newsletter. He also wants to know where GROW Farmington is going;the FBA has not gotten a notice for a meeting in a long time. Respectfull. i , ed, dlec: Lee Smick, City Planner iti i , City of Farmington O z 430 Third Street Farmington,Minnesota -7.. 651.280.6800•Fax 651.280.6899 A www.cifarmingtommn.us TO: David McKnight, City Administrator FROM: Lee Smick, City Planner SUBJECT: Summary of Business Visits—September 12,2012 DATE: September 13,2012 The BR&E team included Council Member Jason Bartholomay, Christy Jo Fogerty and City staff(Lee). The team visited businesses that included Carquest, Heikkila Studios, Farmington Bakery, and Shidor. A summary of each business visit is described below. Carquest Charlie, store manager, met with the BR&E team. Charlie stated that business is going well. They get customers from Rosemount, Empire, Eureka, Castle Rock among others in the area. After the visit Christy commented on cleaning up the Riste lot which would include an upgrade similar to what the McVicker Lot received(i.e., landscaping,tables, etc.). Heikkila Studios Pam Heikkila, owner, met with the BR&E team. She stated that the studio has been in the Fletcher building for 7 years. She said that business is less than before the recession and that is industry-wide. She provides photography, framing, and copying of old photos. She has a large space in the back of the building for her photo sittings,but she does most of her work in the evenings throughout the area. Doug, Pam's husband,works on the business side of the studio. Farmington Bakery Gina, owner, met with the BR&E team. She stated that business is down. She said she lost a large part of her business when Elm Street was reconstructed so people had to reprogram their drive through town and they haven't come back. She doesn't like the A-frame signs for businesses at the intersection of Elm and Third. She also is upset that Kwik Trip is putting up signs surrounding their property. Lee told her that the sign issue has been remedied and they are allowed only one sign. She does not like that the snow is piled in the middle of Oak because her customers can't get to her business and wants the plows to shovel snow to the end of 2nd and Oak or to the north side of Oak because there is less traffic on that side of the street in the mornings. Lee will talk with Todd. Shidor Michelle Overby, owner, met with the BR&E team. She likes her new space but likes her old store because it was right on the corner in the downtown. (Tony heard that the same church that was in the Dueber's spot is thinking of this corner space). She's concerned about the alley because drivers turning in the alley off of Third go at fast speeds. She has deliveries coming in at the door that leads to the alley and she's concerned that there could be a potential accident there. She would appreciate some kind of marking(sign) at the driveway. Her business is reaching out to the homeless, single mothers, and the down and out to help those in need. She says that she can't keep up with all of the donations that are coming into the shop. Respectfull 4 sub.ai' doiK Lee Smick, City Plann- 4iaftvi��► City of Farmington 430 Third Street Farmington,Minnesota °�,''1, 651.280.6800•Fax 651.280.6899 'C77.'4'aol0. www.cilarmingtonann.us TO: David McKnight, City Administrator FROM: Lee Smick, City Planner SUBJECT: Summary of Business Visits—September 20, 2012 DATE: September 24,2012 The BR&E team included EDA Members Doug Bonar and Jerri Jolley and City staff(Lee). The team visited businesses that included Impact Auto Repair, Townsedge Salon and Barber, Amcon, Farmington Billiards, Razberry Beret Thrift Store, and Synergy Dance. A summary of each business visit is described below. Impact Auto Jimi Brown and Scott Davids, owners,met with the BR&E team. A third owner, Greg Cummings, was unavailable. Two owners live in Northfield and one in Apple Valley. They looked at a variety of communities to locate their business,but chose Farmington. Ed, owner of the former Star Automotive,rents the building to Impact Auto including the tools and equipment. The owners used to work at Tires Plus,but were tired of trying to sell extra services to customers, so they went into business. The business takes on a 1950's theme including their uniforms, advertising, and lounge area in order to show"simpler times" and an"easy going"atmosphere. They do full service but no towing, although they may partner with Castle Rock Bank for repos—Jerri will talk with the bank(good cross marketing opportunity). They stated that their new customer clientele has increased. They plan on re-facing the façade of the building in the future. Overall,they are happy with their move to Farmington because the auto repair market is much smaller than the market in Northfield. Townsedge Salon and Barber Lisa Carey, owner,met with the BR&E team. She mentioned that she is consistently busy. She is thinking about moving her business to another location to give her customers more parking space,but she likes the low rent she is paying. She did look at the downtown and Tamarack for a move,but the rent is too high. Additionally, she would like to move to Tamarack,but since the liquor store will not move, did not continue to explore the move. She may think about it if Ground Round locates in Tamarack. Amcon Mike, owner,was concerned about the coupons at Kwik Trip that comes with receipts from Family Market. He stated that he can provide gas prices at Amcon for eight cents less than other gas stations in town. He would like the Council to consider fueling their fleet at Amcon instead of to an out-of-state competitor and national brand. The auto repair portion of the business keeps him afloat. If he expands,he will take out the car wash and construct another bay for repair. He is also upset companies outside of the City don't have to pay taxes (McDonald's, Family Clinic and Nash Finch). Lee will prepare information to send him concerning this issue. He is also upset that the City will help with money for a new sheet of ice. Jerri suggested that Mike come to an EDA or Council meeting to discuss his issues. Farmington Billiards, Razberry Beret Thrift Store, and Synergy Dance Farmington Billiards, owner Dan Rider; Razberry Beret Thrift Store, owner Kelly Campbell,and Dana Riste, Synergy Dance met with the BR&E team at Farmington Billiards to discuss their similar issues. They are concerned about not being seen by motorists on TH 3, so they talked about signage approval near the frontage road of TH 3. Lee mentioned that the current temporary sign in the parking lot(yellow sign with arrow) is not allowed in the City and would have to be removed. They would like to put up balloons,flags, and banners to help motorists to locate their businesses from the street. They would also like a wayfmding sign for the mall. Lee told them that this location in the City should be brought into a TH 3 Corridor District zone because they have different issues than other locations in the city because they are set so far back from the corridor. Lee will work with the PC to start this process. They would also like the FBA to recognize them more including locating flower pots on their site. They are also interested in providing a location for a Flea Market in their parking lot(there is not one in Farmington). They also cross market at local businesses. Overall,they just want more exposure and the team told them to attend FBA meetings to also get help. Respect s, � '► -• ee Smick,AICP CNU-A City Planner A4i iy��, City of Farmington 0 430 Third Street �' y Farmington,Minnesota °°o 10 651.280.6800•Fax 651.280.6899 www.cilannington.mn.us TO: David McKnight, City Administrator FROM: Lee Smick, City Planner SUBJECT: Summary of Business Visits—October 10, 2012 DATE: October 10, 2012 The BR&E team included Mayor Todd Larson, Jeri Jolley, and City staff(Lee). The team visited businesses that included Ruff Manufacturing, EDCO, and Steinair. We also toured other businesses including Town& Country Granite, DSI, and CEG. A summary of each business visit is described below. Ruff Manufacturing Patrick Berry, President, met with the BR&E team. Patrick stated that the company deals with machining and flame cutting of steel plates. He also uses tool&dye presses. He distributes to Caterpillar and McNeilous and other companies throughout the state. The company originally started in Lakeville, and moved to Farmington and constructed its building in 2001. He stated that the City was good to deal with during the building process. The company has 10 employees mostly living outside of Farmington. He stated that they are busy and trucks are running daily to distribute the product. He is concerned about the high rate of commercial taxes in Farmington. EDCO Dean Karlson, Operations Manager,met with the BR&E team. He stated that the business has been in Farmington for 3 years. It deals with the production of residential steel siding and pre-finished exterior building products(soffit and fascia, gutter screen—"Leaf Relief')to serve both residential and commercial markets. He distributes in the metro and Canada. The home office is located in Hopkins. Three employees currently work out of Farmington. The BR&E team told Dean about the Farmington EXPO so that he could advertise his product. Clyde Rath, FBA, also mentioned that the Dakota County Regional Chamber is putting on a social media event next week. Steinair Stein Brouch, owner,met with the BR&E team. His business produces dash panels for airplanes for the small plane owner up to commercial airlines. He distributes the panels out of state and out of the country. He also deals with Garmin for electronic parts. His employees are all ex-airline pilots. He has 16 employees, all of which do not live in town. His business is steady,however; 20-30%of his entire revenue is made up of taxes. He stated that this is the first time the City has contacted him in the 10 years he has been in Farmington. He wanted to purchase the Lew Wurdeman property on Fairgreen Avenue, however his idea to build a pole building was not allowed. Stein gets calls from Owatonna and Albert Lea citystaff on a regular basis to move his company to their industrial park,but Farmington has never contacted him to keep him here. Lee stated that she will be in contact with him and other industrial park owners regularly. Dale Pettis, building owner,joined us at Steinair and proceeded to show us the other businesses in his buildings. The team saw the offices of Town& Country Granite, DSI, and CEG. All of the offices are quite comfortable and modern. Respectful 11.: tte Lee Smick, City Planne � y��► City of Farmington 430 Third Street ,, Farmington,Minnesota �1�0 651.280.6800•Fax 651.280.6899 er' '"MOO www.cilannington.mn.us TO: David McKnight, City Administrator FROM: Lee Smick, City Planner SUBJECT: Summary of Business Visits—October 18, 2012 DATE: October 18, 2012 The BR&E team included Doug Bonar, Jeri Jolley, and City staff(Lee). The team visited businesses that included Anna's Bananas,Pellicci's Ace Hardware, Restwell Motel, and Dakota County Lumber. Once again, these visits were very valuable for learning about each business' needs. A summary of each business visit is described below. Anna's Bananas Anna Achtenberg, owner, and Marisa, daycare director of Farmington site,met with the BR&E team. The team had an hour long tour of the facility and was fascinated with the decor, layout and programs offered at the daycare. The daycare system has 90 employees with sites in Farmington, Burnsville, Apple Valley and soon to be in Northfield. Anna is also looking at site in Minnetonka, Delano, and Orano for future sites. The BR&E team suggested that Anna build a second site in Farmington since the current location is at capacity. She is interested in exploring this idea further. She is currently full at the Farmington site and there is a waiting list. She provides space for 205 children at the Farmington site including infants,toddlers, and school age children. She makes the Farmington site her home base of operations. She has been in Farmington for 13 years with her first daycare in the Farmington Mall and then her expansion to this current location for four years. She was curious why the City hasn't visited her in the four years she has been at the current site (although staff has been on site for engineering reasons in the past). She stated that she will provide brochure space for retail businesses in town and spread shopping event information to her clients by email. Pellicci's Ace Hardware Mark, Ferro, and Chris Pellicci met with the BR&E team. They stated that business has been great and the increase in business is from the visibility of the store from TH 3. They suggested that the City look at the property that is for sale at 305 8th Street and an abandoned house in that vicinity(the properties are zoned R-1) for the City's potential commercial investment. Restwell Motel Sam, owner,met with the BR&E team. Sam stated that he will soon erect a new sign and call the property "Restwell Efficiencies" since the units will be leased on a month-to-month basis (this is a new affordable housing choice in town). He took the team on a tour showing that the buildings have new siding,window and door frames. He is adding a laundry room area with two washers and dryers that will be available soon. He has cleaned up the property and filled eight dumpsters full of debris from the site. He has owned the property for 2 years and the updates will be completed by November 1St. His units are full and he has a waiting list. He said that the property used to have 6-7 police calls a month,now he will remove any residents with one call. Doug mentioned that the old windmill on site (that will be refurbished)would look great next to the new proposed sign along TH 3. Dakota County Lumber Denny Tonsager met with the BR&E team. He stated that business has picked up 31%this year from the previous economic downturn. They will be adding 2-3 more sales people soon,and they will need more space. Additionally,they would like more space for their display area. 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CCI % ® Egg -c 0 cn o / c o o o CD k• •/ ,,Cr U� F.% § � 2 a) _a k ƒ — § a ■ _c ▪ (i) .1:2) "0 >c' 2° k § o 0 ■ » 2 0. L * E b � ' CU2 - 0 = E E § © c -c 0 134 ® � - • E c 2 k > 2222k � o f 2 _c c & apc0 £ R § c § § f R % a @ -o o52- t Eo co @ E - E a . o @ © 2 E£ x ca. co k F- ® • / k k a k k ƒ q T- O % $ � y��► City of Farmington /lk 430 Third Street Farmington,Minnesota %4:4F �0 651.280.6800•Fax 651.280.6899 A , www.ci.farmington.mn.us TO: EDA Members FROM: Lee Smick, AICP CNU-A City Planner/Economic Development SUBJECT: Business Attraction Plan DATE: January 28, 2013 INTRODUCTION The Business Attraction Plan has been created to attract new businesses to the City. The Plan includes actions that fall into the following areas: development of citywide support for economic development; data collection; marketing; directing interest to city businesses; revitalization of commercial districts; removal of barriers to economic development/process improvements;business attraction and retention; connection to and support of key business and employment districts; actions to increase revenues that fund city services; opportunities to leverage and network local, regional, state and federal partner agencies; and a discussion of a plan for the development of metrics to measure successful accomplishments of key economic development priorities. DISCUSSION The purpose of the Plan is to identify important methods of invigorating the City's economic base and provide actions that can be undertaken in a practical manner by the Business Attraction Team. This product is not an end,but a beginning,a path that will enhance the City's economic climate and engage the business community. It is designed to be a tool with specific actions that will stimulate the City's economy and communicate willingness on the part of the City to honor and grow the businesses that are already in Farmington and reach out through a positive business climate to businesses that are considering Farmington as a location for those businesses. It can only be brought to life through the engagement of policymakers,businesses, and staff. Organization of Business Attraction Plan The current EDA will review the Plan and provide comments at the January 28,2013 EDA meeting and forward comments to the new EDA on February 25, 2013. On March 4, 2013, Farmington City Council will be asked to approve a resolution re-stating that Economic Development is a citywide priority and clear guidance and implementation is a part of this objective. In early March, staff will send out information on the website and via email inviting any business owners,residents, or interested persons to be a team member for the Business Attraction Plan in order to guide and implement business attraction in the City. At the February 25, 2013 EDA Meeting,the EDA will review the plan for additional comments or approval. Business Attraction Plan—Team Members After the EDA approval of the Business Attraction Plan on February 25,2013, staff will prepare a public notice on the City's website requesting any business owner, resident, or interested person to join the Business Attraction Team in order to guide and implement business attraction in the City. Additionally, staff will include information about joining the team via emails to FBA members. Finally, EDA members will provide information to business owners while on business visits in March. The Team will be made up of 2-EDA Members, 2-business owners (preferably 1-FBA, 1-business owner), 1-ISD#192 School Board Member or Administrator, and potentially,Mark Loftus,Economic Development Director, Dakota Electric (took the place of LaDonna Boyd). Mr. Loftus would be very helpful due to his previous position at DEED in the economic development department. Laurie Crow, MCCD "Open to Business" and Dale Severson,Realtor for VRC will work as consultants to the team. Staff will be in attendance to record the meeting. Staff proposes a number of action steps in the plan including: 1. Development of Citywide Support for Economic Development. 2. Data Collection 3. Marketing 4. Direct Interest to City Businesses 5. Remove Barriers to Development/Process Improvements a. Outreach to Retail Businesses b. Outreach to Growth Targets c. General Tools to Assist Businesses 6. Connect and Support Key Business and Employment Districts 7. Leverage and Network with Key Local, Regional, State, and Federal Partners Tentative Timeline The tentative timeline is proposed below: DATE ACTIVITY OUTCOME January 28,2013 Current EDA reviews Business Attraction Plan. January 30, 2013 Staff begins collecting data under Step 2 of plan. February 25, 2013 EDA reviews Resolution and forwards comments to City Council. March 4, 2013 City Council adopts Resolution for support of Economic Development in Farmington. March 5, 2013 Public Notice to businesses, interested parties requesting participation in Business Attraction Program and team. March 2013 Staff continues to collect data and research. March 25,2013 EDA reviews applications and determines team. March 27, 2013 Business Attraction Team Meeting April 2013 Business Attraction team meets concerning Steps 3-7 and prepares strategy. April 22,2013 Business Attraction Team presents to EDA the status report concerning operations to date. May 2013 Business Attraction team meets concerning Steps 3-7 and continues to work on strategy. May 28, 2013 Business Attraction Team presents to EDA the status report concerning operations to date. June 2013 Business Attraction team meets concerning Steps 3-7 and continues to work on strategy. June 24, 2013 Business Attraction Team presents final plan for attracting new businesses requesting EDA to forward it to the City Council. July 1, 2013 City Council adopts plan and sets team into action. After initial set up,the Business Attraction Team will have three months to prepare a focus and implementation plan for attracting new businesses to Farmington. During those three months,the team will present its status at EDA meetings. A fmal plan of action will come before the EDA on June 24, 2013 for approval and forwarded to the City Council. Council will review the plan and adopt it if warranted. BUDGET IMPACT None ACTION REQUESTED Review the attached DRAFT Business Attraction Plan and forwarded it to the February 25, 2013 meeting of the EDA. Respectfully submi - Lee Smick,AICP CNU-A City Planner Cal( 49f1R41/ i v MI °‘ P '41111.1111 te Ao I` � G s � OA� r• A PRO��g`46 City of Farmington Business Attraction Plan 2013 DRAFT City of Farmington Business Attraction Plan MISSION To preserve and enhance Farmington's business climate to ensure the City is financially stable and partners with the community in its commitment to improve quality of life. VISION To provide services and resources to the business and development communities with the purpose of retaining, attracting and expanding business and employment opportunities for area residents, stimulating the local economy and expanding local retail sales, transient occupancy, and commercial property tax bases, while maintaining a positive balance between growth, social equity and the economic vitality of the City. VALUES To adhere to the sound fundamental principles of traditional economic development: business retention, by supporting and retaining established businesses; business attraction, by actively pursuing private investment and new business; business.expansion., by nurturing both established and emerging companies; and, all supported by improved public.infrastructure vital to retaining, attracting and expanding business entities. Business Attraction The Business Attraction Plan includes utilizing a variety of tools, including incentives, redevelopment assistance and grant programs. Moving forward, the Economic Development Strategic Plan approved in February 2012 calls for the use of these types of tools in some form in addition to further developing new programs in an effort to develop a proactive business climate in Farmington. Specifically, these Business Attraction methods will now include improving broker relations, maintaining a vacancy inventory, and continually attracting commercial, service and industrial businesses to the community. Proactive Communication In Farmington's effort to be proactive in its business attraction methods, the Plan calls for increased communication with brokers, property owners and expanding businesses by the Business Attraction Team. Specifically, the Team will explore expanding businesses and match the right tenant for Farmington. The Team will also pursue desired businesses as identified in the Business Attraction Plan, and maintain positive broker relations. Lastly, the Team will assign staff to personally see to it that businesses receive first class service to help their business open — and succeed — in Farmington as quickly as possible. 2 Incentives When businesses consider calling Farmington their home, incentives are the tools the City needs to help attract companies. Incentives will be identified in the future by the Business Attraction Team. Marketing A vital component in implementing the Business Attraction Plan is to market the City to the business community, to our residents, and to future stakeholders. In this Plan, we call on the utilization of all mediums available to Farmington, whether that is on the Internet, in newspapers, or through the mail. While some aspects of the Business Attraction Plan are strategies that have been implemented in the past, others are innovative ways in which we believe will be instrumental to attracting and retaining businesses in Farmington. Online Marketing Strategy Farmington relies on the Internet as a key form of communication with residents. The Team will continue this trend by utilizing the City's website as the main line of communication with our business community. Possibilities for marketing strategies would be the implementation of an Online Business Resource Center providing one-stop processing where interested and existing business owners can find everything from city demographics, to the process to open a business, to identifying available leasing or for sale sites. In addition, there may be a My Farmington! Business Blog, which would provide ongoing updates of the new businesses coming to our community, and would share the positive news that some of our local businesses have received. Advertising, Flyers & Events Traditional marketing methods will also be utilized in an effort to attract new businesses, highlight Farmington, and promote existing businesses. The Team will do this by issuing flyers (City Brochure), hosting business workshops, broker receptions and real estate forums with bus tours. Business Attraction Plan Farmington will continue to grow and reinvent its economy by new businesses locating in the community. To attract businesses the City must have an environment that is conducive for businesses to locate here. The principal focus of the City's efforts should be to diversify the tax base, create a broad range of employment opportunities, and provide necessary goods and services for local residents to ensure the highest"quality of life"possible while promoting a positive image of the city in general, and its business environment in particular. The following steps will provide a roadmap to attracting businesses to Farmington. 3 Step 1: Development of Citywide Support for Economic Development Recommendations: • Engage in economic development actions that will provide desired outcomes that are critical to the success of this effort. To ensure that this is a citywide effort and has the visibility to carry out objectives two actions must be taken: 1. City Council and EDA should re state its direction that economic development is a citywide priority, and establish clear guidance about the implementation of these objectives by adopting a resolution for this process. Timeline: February 25, 2013 —EDA March 4, 2013 - City Council adopts Resolution 2. Consider adding language to the resolution to signal this support such as: "Strategically support and attract businesses that contribute to the community through jobs, revenue and goods and services that enhance the quality of life for residents and workers". Timeline: February 25, 2013 —EDA March 4, 2013 - City Council adopts Resolution • Create a high level team to respond quickly to important projects and inquiries under the GROW Farmington initiative. A public notice requesting applicants for the team will be included on the City's website, at business visits, and through emails to join the Business Attraction Team in order to guide and implement business attraction in the City. The Team makeup will include 2-EDA Members,2-business owners (preferably 1-FBA, 1-business owner), 1-ISD#192 School Board Member or Administrator, and 1 additional community member. City staff will be in attendance to record the meetings. • Review focus,format, and style of team. Timeline: March 27, 2013—Meet with Team (Name is pending) • Team discusses and approves action steps of Economic Development Strategic Plan: 1. Create a business attraction team. a) Determine participants on team. b) Determine Mission and Vision of team. c) Identify desired business sectors. d) Compile information of interest to business prospects. e)Demonstrate Farmington as a profitable place to do business. f) Determine workforce supply in region to ensure jobs to businesses. 4 g) Determine if City can/should provide incentives to potential businesses. 2. Develop marketing initiative to attract targeted businesses and jobs. a) Determine whom to target for marketing. b) Contact brokers weekly. 3. Recruit business to serve other downtown businesses. a) Build a stronger downtown business community, retaining cash flow and the profitability of downtown businesses. b) As more goods and services needed by the residents are available,the community will be less inclined to travel to neighboring communities. Step 2: Data Collection Recommendations: • Staff will develop business market intelligence through the development of key indicators that: • Track business trends including business starts,business losses, company size, geographic location, etc. • Identify key sales tax generators and implement a business outreach strategy that provides market intelligence about key revenues and business trends • Use sales tax information to identify and track retail leakage and capture information. Benchmark this data and provide updates to staff and EDA • Track who stays and who goes in the City and then fmd out why • Continue and enhance information available to site selectors and developers. Identify who has the information and how to access it quickly. If the information is not available through the City easily,keep information on hand about who has this information to volunteer or purchase. (e.g., specific market demographics, market areas,etc.) like Nielsen Claritas and Buxton • Gather information from key sources such as the DEED, Greater MSP, CDA, MCCD • Continue to track businesses by cluster and type to target business outreach efforts effectively(industrial,Retail,etc) • Identify, collect and track commercial vacancy information using information from brokers, city studies business owners, and other sources 5 • Follow market information through news media to keep abreast of developments with local companies (e.g. business recognition,new businesses, key investments from venture capital and others). Timeline: April 2013 and Ongoing Step 3: Marketing Recommendations: • Brand the City and its positive business climate • To business • To customers • To residents • To site selectors • Expand the City's marketing and promotion efforts to increase the visibility of the downtown,business districts and the prime industrial areas. • Educate residents and community groups that quantifies business contributions(revenue generated from business that supports city services) and provide this information pro actively to resident and community groups. • Consider events like a Quarterly Economic Forum to raise the visibility of the City's Economic Development function and provide a forum for information, trends and issues. • Market the City to residents and workers • Provide some "quick stats"about the City that tell the Farmington story(City Brochure). • Strengthen and Brand business districts • Provide training to merchants about signage,promotions, and displays • Direct customers to local businesses through additional business focused wayfinding signs (directions to shops,restaurants, places of interest). • Expand the use of banners to identify districts, events, etc. Consider master banner permits to allow groups (FBA) in specific business and employment districts to change banners regularly for events, seasonal banners, cultural events and other district specific information. • Facilitate the creation of district associations (North, South, West and Downtown—names pending) and support those associations that are in place. • Enhance the City's Website. Expand its user friendly approach by providing expanded information, online permits. Gear its approach to the customers seeking service and information(e.g.,not by department,by function or service). • Market Events. • Continue to identify all events in the City. • Look for opportunities to focus events on ongoing positive impacts to local businesses. Reach out to businesses to see how events can have the most positive impact on their businesses. Integrate Best Practices from other cities and organizations. Timeline: Ongoing (Team's determined focus and start date are pending) Step 4: Direct interest to City Businesses 6 Recommendations: • Link local businesses to the City's website • Use the City's Website to highlight businesses • Provide at least two articles monthly to local media for publication about positive business information(openings, recognition,honors, special events, special interest)to layer the positive message that businesses enhance the City (Star Tribune, SunThisWeek newspaper, Farmington Independent,Kare 11 Sunday Mornings). • Assist local businesses in connecting with other Farmington businesses to offer co marketing, co branding,training opportunities,mentoring and other cooperative efforts (MCCD as well)to strengthen the business community. • Assist local businesses to market themselves by connecting them to determine where they can leverage individual resources (group ads,training events,marketing collateral, etc.) (MCCD). • Make downtown events "business focused" • Develop events that foster connection between business districts. • Continue to provide a `Buy Local"campaign to encourage resident and daytime population support of local business. Use utility bill inserts and other outreach? Timeline: Ongoing (Team's determined focus and start date are pending). Step 5: Remove Barriers to DevelopmentlProcess Improvements Recommendations: Assist businesses/developers in early stage development through a four stage effort: • A predevelopment review team (Team members, City staff, MCCD, FBA, ISD #192) that is convened when a business is considering a project in Farmington is critical to assisting businesses to visualize obstacles and opportunities; identify important outreach and assess the costs of a project. • Elevate important "next stage"projects to a predevelopment review team that is made up of building inspections, licensing,planning, and engineering that can assist in identifying important concerns, and methods of dealing with concerns. • Identify a point person to shepherd these projects through ALL processes in the City. For ANY question,this person will navigate the city, other governmental organizations(Dakota County CDA, DEED, Greater MSP,Dakota County) and • help fmd answers to important questions. • Stay connected to the business/developer throughout the process and develop a point of contact for future communications as the company faces obstacles or expands (or contracts) its operations in the City. • Evaluate and address any infrastructure barriers to development. • Work closely with property owners, site selectors, developers, and others to identify any infrastructure (could include high speed interne access, or the cost of tenant improvements) deficits that affect the City's competitiveness. 7 • For existing businesses, maintain consistent contact to assess opportunities for growth (or contraction). • Consider shod term office or"pop up"uses on the ground floor(Former Rambling River Center). • Consider overlay zones to facilitate improvements in key districts. For example, consider an entertainment zone overlay or other tool to empower techniques that invigorate districts, such as the Farmington Mall. (Lights, signage, tables and chairs and awnings at TH 3). • Master permits can be an important tool to decrease time, cost and process for customers(30-working Day Industrial/Commercial Development). They can also achieve equity and consistency for the City. • Integrate economic development goals into land use planning and communicate to private sector to enhance development opportunities. • Evaluate the cost of tenant improvements and other costs(water service hookups,parking in lieu fees) and explore ways to amortize and/or reduce costs to businesses). • Assign one building inspector for the duration of a project. • Assist in navigating City processes (Permit checklist, whom to call and"how to get your business started in Farmington). • When there is disruption (construction, etc.) reach out to businesses and inform them of work to be done. (They need to gauge staffing, impacts to lunch time business, etc.). • Work with fire department on inspection issues. Are challenges with inspections that have been identified by staff and customers a result of staffmg, resources or other issues? Will cross training address the issue or is there another solution that will assist? • Develop cross training opportunities and provide any additional education needed to assist in facilitating not just regulating. This could apply to inspections, etc. Best practices can guide outcomes. (e.g., suggestion from fire department). • Foster a culture where a 30-working day window to review an application can mean"Staff moves this along on day one" instead of waiting until day 30 to look at it. • Ensure that the City speaks with one voice, based on code requirements. There should not be several interpretations. Issues need to be worked out BEFORE talking to customers. • Encourage ED staff to understand the goals of other departments that are partners in economic development. Timeline: Ongoing to date Outreach to Retail Businesses • Identify sites for recruitment, retention and growth efforts. Use existing information and expand to include opportunity sites in the city. • Identify and engage a recruitment consultant with local experience that can market local properties in a manner consistent with city priorities. 8 • Participate in retail recruitment efforts with local brokers, site selectors and participate in the Dakota County Regional Chamber events to facilitate the attraction of desired businesses to the City. Work with prospects through the site selection and entitlement process. • Team develops a downtown recruitment strategy(Doesn't need to be another "study". This is a simple plan of action that is strategic and prioritized). • Team develops a citywide recruitment strategy(Doesn't need to be another "study". This is a simple plan of action that is strategic and prioritized). Outreach to growth targets • Hotels 1. Zoning overlays 2. Identification of potential sites 3. Marketing of sites 4. Work with development community to attract additional hotels 5. Identify hotel products that support the City's goals including revenue generation, support the business community, and decrease trip generation. • Top 10 sales tax (including business to business) generators,transient occupancy generators, and top 10 employers. Develop an outreach program that targets these businesses for business outreach that provides market intelligence and an opportunity to assist these businesses with any issues or opportunities affecting their retention and/or growth. • One on one, small businesses. • Emerging industries and"new"tech companies. Consider working with a local developer or property owner to create an incubator for small growth oriented businesses in greentech, clean tech or high tech. 1. Check in with these companies as identified through outreach efforts. 2. Identify companies that applied for new clean energy manufacturing tax credits and target outreach to them. 3. Discuss with existing industrial owners what types of businesses they need in order to run their business or provide close proximity products. • Anchor tenants that provide the destination shopping that supports the development of infill retail and restaurant uses. • Grow businesses in place. • Brand that Farmington is "hometown", etc. • Put together a business toolkit for start up businesses • Consider contracting with a retail/business attraction expert with an understanding of the local market and culture (small business and larger format businesses). • Find ways to permit new tech and green tech businesses without reinventing the wheel. • Establish a communication plan with small businesses in Farmington. (Business visits) 9 • Direct traffic when possible throughout city processes. If a business needs to deal with multiple agencies,make introductory phone calls,navigate agencies and help customers get what they need. • Identify opportunity sites (VRC) and act on them. • Focus on efforts that support business retention and expansion of Farmington companies, focusing on start up companies. • Encourage small business growth and when appropriate,leverage businesses and local resources through grants and other funding. • Conduct quarterly work groups with industry leaders to identify and address ongoing issues. General Tools to assist businesses: 1. Business Fairs 2. Business Recognition Events 3. Employment Training Panel Funds (other workforce assistance) 4. Small Business Administration loan and training programs 704 programs 5. Façade Improvement Program 6. Beautification Program 7. Community Development Block Grant Program Funding 8. Business and/or Entrepreneurship Training Programs 9. Recognition at EDA and City Council meetings. Timeline: April 2013 (dependent on Team priorities) Step 6: Connect and Support Key Business and Employment Districts Recommendations: • Establish a point of contact in each business district, either through the business association for the district(FBA Member) or through individual outreach within the next 6 months. • Work with existing business groups to identify and/or develop training that addresses training needs. • Hold a focus group in each district to identify issues, opportunities and guide outcomes that are consistent with city priorities (GROW Farmington). • Hold at least one group meeting facilitated by GROW Farmington to convene representatives (North, West, Downtown, Farmington Mall-TH 3)from each district to explore ways that they can co market, cooperate and connect. • Heighten local awareness (business and residents) about districts. • Attract users to vacant space in the industrial and commercial areas by developing and implementing a proactive outreach program to developers, brokers and property owners. • Improve signage (directional and way finding)to shopping areas of City. • Be sure that any marketing efforts integrate findings to build on successes and create new opportunities for collaboration. 10 • Ensure that all training opportunities identified,partnerships developed and resources identified are conveyed through communications with each group. Timeline: Ongoing (Team's determined focus and start date are pending). Step 7: Leverage and Network with Key Local, Regional, State and Federal Partners Leverage and Recommendations: • Facilitate the delivery of service to Farmington businesses through partnerships with local,regional, state and federal providers. Make this information available on the City's website and at City Hall. • City of Farmington 1. Collaborate outreach to residents and other community members to "tell the business story"to create a business climate that embraces new businesses. 2. Work with the MCCD and area bankers to determine opportunities to partner with Farmington. 3. Initiate joint business outreach visits. 4. Hold Town Hall meetings with Businesses. 5. Work together to expand the business education and information training available through local community colleges (DCTC)and others. 6. Explore the opportunity to work together on regular business recognition events. This could include a"fastest growing company", "best places to work", "contributions to the local community" and others. 7. Work together on developing marketing information that will enhance the City's image and attract desired firms to the City. • Dakota County Regional Chamber Take advantage of excellent economic data and regional events. • Community Colleges, State Colleges and Universities and Private Educational Institutions to facilitate training opportunities, workforce training, collaborations with incubator and start up ventures and others to maximize opportunities for City residents and businesses. • Local high schools, elementary schools and other institutions -Work together and leverage talent and resources whenever possible to mentor students, share learning resources and connect residents and businesses. • State Resources -Work with DEED, Greater MSP, GROW Minnesota and others including Federal government partners. Step 8: Methodology to Measure Success 11 A methodology to measure success will be crafted and staff will be supported to initiate implementation of the action plan. A check list of actions accomplished and a progress report will be provided to the EDA five months after the completion of this portion of the work. Case studies may be used to illustrate issues,programs and best practices. Timeline: June 24, 2013 - Approval at EDA Meeting July 1, 2013 - City Council adopts Plan DATE ACTIVITY OUTCOME January 28, 2013 Current EDA reviews Business Attraction Plan. January 30,2013 Staff begins collecting data under Step 2 February 25, 2013 EDA reviews Resolution and forwards comments to City Council. March 4, 2013 City Council adopts Resolution for support of Economic Development March 5, 2013 Public Notice to businesses, interested parties requesting participation in Business Attraction Program and team. March 2013 Staff continues to collect data. March 25, 2013 EDA reviews Business Attraction Team _applications and determines team. March 27, 2013 Business Attraction Team Meeting April 2013 Business Attraction team meets concerning Steps 3-7 and prepares strategy. April 22,2013 Business Attraction Team presents report concerning operations to EDA. May 2013 Business Attraction team meets concerning Steps 3-7 and continues to work on strategy. May 28, 2013 Business Attraction Team presents report concerning operations to EDA. June 2013 Business Attraction team meets concerning Steps 3-7 and continues to work on strategy. June 24, 2013 Business Attraction Team presents final plan for attracting new businesses requesting EDA to forward it to the City Council. July 1, 2013 City Council adopts plan and sets team into action. 12 GROW Farmington Brainstorming Session December 8, 2010 The following ideas that were shared at the December 8 GROW Farmington brainstorming session were put into the following categories: Resources available to support Economic Development Business Development (retention) Technology Business Friendly Marketing Resources available to support Economic Development Tax credits for big box/smaller business Business Development Business Retention Strengthen our B2B relationships and service. People will pay more for same thing if they get exceptional service. Include farmers/ag as recognized business owners Defined organization roles /collaboration Attract industrial participation Old Farmington — New Farmington Bakery and jewelry store — cross market Business Attraction More retail needed — owner operated Big box— not Wal-Mart (Target ok) Concentrate on bringing in anchor stores (Wal-Mart or other big box stores) More effort to build up behind McDonald's Big Box and accommodations for overnight stays and conferences Motel-Motel-Motel with attraction Hotel We need quality lodging (Best Western, Americlnn) Viking stadium in Farmington Develop Lamperts property (private) Chipotle downtown Family restaurant— no liquor (IHOP, Denny's, Perkins) Restaurant with ambiance and good atmosphere (less sports bar) Encourage brainstorming for new industry concepts Bigger name businesses to industrial park/Vermillion Crossing Why did Airlake take off? What was the push? J:\PLANNING\Economic Development Strategy\GROW Farmington\Brain I.dol - 1 - Rail Spur? Progressive Rail? Attract a community college Attract business from other communities Business draw Technology Technology availability map /fiber optic Wireless tower/signal strength Business Friendly North and south Farmington needs to come together Draw the population from the North Place for kids to hang out— Skate Park, etc—safe, up to date, positive, so no gangs develop Positive P.R. /first impressions Focus on positives or at least be "neutral" Encourage positive thinking New resident welcome wagon Welcome basket Action items— momentum get and keep the ball rolling Create paths for new business, reduce roadblocks Negative Keep BIG BOX OUT! Home Depot, Wal-Mart, Target NW side of town has a negative image of Farmington's downtown area Create Marketing Program Branding What makes Farmington a destination? Capitalize on "Name" Farmington Small town "feeling" We need to be a destination for something. Population is larger— more potential. People are our strength. Slogan "Come On Out to the Farm" Study successful "small town" downtowns Quaint appearance and uniform Highlight small town feel, more downtown decor, uniformity Play and promote to Farmington's strengths Promotion Opportunities Promote unique nature of Farmington and surrounding area Promote what we have (arts, Celts) Market trout streams Market bike trails Bike trails and parks a plus Green space/ public space Link to (hooked up with) bike trails in Northfield / Red Wing UMore property/ use J:\PLANNING\Economic Development Strategy\GROW Farmington\Brain I.do2 -2 - Trout stream /designation Conservation easement south of Fairgrounds (trail) Market Farmington's close proximity to all metro (easy access—small town charm) Location to metro CEEF areas promoted and events Library is great Promote/Create Events Winter Fest Fairground activities / Dakota City Pumpkin Chunkin (catapult), pumpkin pie eating contest County Fair Farmers' Market Bring back Home & Garden Show Continue Dew Days — Soybean Festival — Farmers' Market Create competitions between areas to create awareness All-day kindergarten will draw young families to town. Appearance Downtown light poles should be seasonally decorated. Business persons could sponsor Basic home upkeep (who's responsible for enforcing?) Keep downtown clean: Lot next to Gossips full of cigarette butts More downtown decor (flowers, lights, signage) uniform matter Outline buildings in lights Promotion Vehicles Event map, monthly possibly Social media — Facebook—to communicate to residents E-mail blasts from City "ThisWeek" News — capitalize on something published to all Network each other's businesses Community Calendar—all inclusive of businesses, churches, youth groups, school district, city, senior center, etc. (group would administer their own information on a monthly basis) Coordinated community calendar/ publicity communications Common website/calendar coordination Promote Farmington events: Planning well ahead and advertise in all papers, press releases, monthly event calendars, etc. Star Tribune and all local papers More events, INFORM, INVITE, businesses outside of town Spokesperson for Farmington events? P.R. Park and Rec with Community Ed with paid advertising from businesses Community Guide— Program Guide Community streaming billboard downtown Slogan "Come On Out to the Farm" City Newsletter, School District, Newspaper Global communication to business and residential communities Radio station Cable channel — updates in businesses and developments Get the word out at school functions, tournaments, collect e-mails, schools All inclusive e-mail list to everyone Newspaper article to encourage citizen input regarding possible new business or industry ideas to Chamber of Commerce J:\PLANNING\Economic Development Strategy\GROW Farmington\Brain 1.do3 - 3 - Business /community center district signage Signs pointing to downtown (business) Better signage notifying of locations, directions We all need to support local! Give local businesses the chance to supply your needs first! Miscellaneous CEEF—status? Mission statement Manage housing inventory (deal with foreclosures) Utilize existing infrastructure and stay away from neighboring townships Do not allow new residential development until existing inventory is gone Population is larger— more potential. People are our strength. Affordable rental apartments — high quality Apartment housing for young people (feeds into school system) Townships—extended community (cooperation) Conservation easement south of Fairgrounds (trail) J:\PLANNING\Economic Development Strategy\GROW Farmington\Brain l.do4 -4- GROW Farmington January 24, 2011 Top 10 1. Promote unique nature of Farmington and surrounding area through trout stream, bike trails, and green space. 2. Promote and create events in Farmington such as Winter Fest, Fairground activities / Dakota City, Pumpkin Chuckin, pumpkin pie eating contest, County Fair, Farmer's Market, Home & Garden show, Dew Days, and Soybean Festival. 3. Keep Farmington's appearance decorated by using flowers, lights, and signage (directional signs). 4. Use newspapers (articles), newsletters, and calendar to promote Farmington. 5. Determine Farmington's brand (small town feel or charm, Come out to the Farm, quaintness). 6. Strengthen existing business relationships and services through collaboration, organizational roles, and cross marketing (Business Retention). 7. Attract big box to Farmington. 8. Attract motels and hotels to Farmington. 9. Draw north and south parts of Farmington together. 10.Promote Farmington's strengths and its people. 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(t Q J d 4iAR/Ifi City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800•Fax 651.280.6899 c - www.ci.farmington.mn.us TO: EDA Members FROM: Lee Smick, AICP, CNU-A City Planner SUBJECT: Shop Local Campaign DATE: August 27, 2012 INTRODUCTION/DISCUSSION In the Economic Development Strategic Plan spreadsheet (attached),the next action step is the preparation of a"Shop Local"Campaign. In order to understand the program, staff has researched if"shop local" campaigns work. They do. For the fourth consecutive year, a national study on independent businesses in areas with "shop local" campaigns have much greater revenue growth than independent businesses in areas without such campaigns. The former gained an average revenue growth of 5.6% in 2010 and the latter only saw an average revenue growth of 2.1%. Data for this study,conducted by the Institute for Local Self-Reliance, was collected from 2,768 independent businesses over the course of eight days in January 2010. Average Change in Revenue in 2010 6.0% 5.0% 5.66. 4.0% 3.4% 2.0% 1.0`Yo 0°ri Independent businesses to communities: with a-Buy Local campaign without a"Buy Local"campaign Suvoe:Insttu:e tot La a Sear-Reliance,20f1 fno_•cr:.use.,:8um»e.a Survey How do "Shop Local" campaigns help independent businesses? The study says that almost 50% of business owners in cities with active"shop local" campaigns reported that the campaign had brought new customers to their business and 55% said it had made existing customers more loyal. More than two-thirds said local media coverage of independent businesses had increased 51% and said that local government officials were now more aware and supportive of the needs of independent businesses." Would you say that public awareness of the benefits of supporting locally owned businesses has increased or decreased in the last year? Don't know/Not sure Decreased Stayed the Same 4'e 64'a: Increased Soureo Insrrtute oc local Se3H-fie:arts,207 t t-dgprtndant 3ustNt5c Sam/ Overall, almost two-thirds of the survey respondents believed that "public awareness of the benefits of supporting locally owned businesses had increased in the last year. "In other words, the perceptions are in line with the revenue growth patterns: the campaigns are working. The survey offers further proof that, with sustained efforts, communities can indeed raise local consciousness and build a culture of support for local entrepreneurs" The study states that"most of the campaigns operated by municipalities/chambers/business associations are funded by businesses paying$20 or less per month in dues to belong to "shop local"campaigns. The return on their investment is phenomenal." The strongest campaigns engage businesses of every sector, demographic group, and location in the community. The term"shopping"becomes too limiting, so many places use phrases like"go local"or"choose local first"to demonstrate inclusiveness. The previous campaign,Farmington First!, was a campaign that should be resurrected or improved upon. Consciously referencing service industries as well as retail will ensure that all businesses are included in the campaign. Why Local First? As stated by the author of Going Local, "Going local does not mean walling off the outside world. It means nurturing locally owned businesses that use local resources sustainably; employ local workers at decent wages; and serve primarily local consumers. It means becoming more self-sufficient and less dependent on imports. Control moves from the boardrooms of distant corporations and back into the community where it belongs." A study done in Western Michigan, reports that significantly more money re-circulates in that area when consumers choose to support locally owned businesses. Unlike their national competition, locally owned businesses regularly purchase from other local retailers, manufacturers, service providers and farms (something that Farmington business owners should strive for in the community). Supporting locally owned businesses is critical in growing a strong community economy and tax base. LOCALLY OWNED BUSINESS NON-LOCALLY OWNED BUSINESS TT1.D$'O4 AT A LOcA 114J34AitSS SKtiO SI00 AT A NONLOCAt OUSINESS YOWit 0040 t *, YO4iitch, out maw SS7 LEAVE ♦ # J A CAtaort .F„,.. �. rmin.a, lM�Fa Ahq SAS STAY outtaisitir MAR WAS Kx A *WOW 'War ,WAPAAW ` y � RM✓S,fkY betatron 4004, *Nrrif *WO mat T tr• !kw"w...0,—(A , . .. SOURCE: Civic Economics-"Local Works!" Study,2008.Commissioned by Local First. According to the research firm Civic Economics, when Western Michigan consumers choose a locally owned business over a non-local alternative, $68 of every$100 spent stays in the community. By contrast, only $43 of every $100 spent at a non-locally owned business remains in the community. The Local First concept is infused in all segments of the community - including business, education, and public service. The region operates as a local living economy comprised of thriving locally owned businesses and characterized by economic prosperity, social equity, and environmental responsibility. In conclusion, research has shown that independent businesses in communities with active "shop local (go local)" initiatives report stronger sales growth than those in cities without such campaigns, and large majorities identifying independent, local ownership as something increasingly on the minds of consumers. Proposal The proposal that staff has prepared to ignite the "Go Local Campaign is as follows: 1. Reconvene the GROW Farmington meetings to generate input from business owners concerning the Go Local campaign. City staff will provide guidance, but the Farmington Business Association needs to step up to the challenge of creating the brand of the campaign, supplying manpower to get the word out to residents, schools, and businesses, and funding these efforts. Chad Hjellming from the Farmington Independent has offered his marketing services towards the campaign. Discussion with the FBA needs to take place to determine funding for the campaign. 2. Advertising is a key to getting the word out concerning the campaign. Flyers, newspaper articles, signs,handouts,radio advertising, Channel 16 advertising, and City Council advertising needs to be funded by the FBA members through a monthly membership. It is important that all printed material be submitted to Farmington Printing for local printing of the items. Staff will provide coordination of the advertising, design ideas, and possibly markups of the advertising for printing. If"Farmington First!" is chosen for the campaign, staff will coordinate with previous campaign organizers for the template of the logo. Staff will also coordinate the media for broadcast campaigns (i.e., radio, Channel 16, and newspapers). 3. Staff will request funding from the City for startup costs for advertising the campaign. This is a great opportunity to utilize a small portion($5,000)of the $50,000 special operations funding in the EDA budget. EDA and City Council approval will be requested. The advertising funds requested will be prepared in greater detail as the GROW Farmington group prepares the branding of the campaign. The maximum amount the City would fund is $5,000. Staff feels it is important to extend funds to this effort for promoting City businesses. BUDGET $5,000 for special operations—EDA budget ACTION REQUIRED Review campaign information and proposal. Discuss the proposal of extending City funds to the campaign effort. Respectfully submitt d, Lee Smick, City Planner AICP, CNU-A oVdim/�c City of Farmington .0ilia, 430 Third Street 1 ` -... Farmington,Minnesota ga„'�1�„ 651.280.6800•Fax 651.280.6899 f �s.�► www.ciSarmingt0II.mmus �/ TO: EDA Members FROM: Lee Smick, AICP, CNU-A City Planner SUBJECT: GROW Farmington Update& Shop Local Campaign DATE: September 24, 2012 INTRODUCTION/DISCUSSION The GROW Farmington group met on September 12th to begin discussions on a shop local campaign. At first, the discussion dealt with benefits and added revenue that comes from a shop local campaign. The group agreed that the most important idea is to educate the community on shop local and what it can do for Farmington. That would entail that the City Council agrees to the campaign and the need for GROW to teach locals to change their shopping habits. Various ideas were discussed about the campaign including providing shop local businesses on loyalty and new customer gift cards, discounts at the local business of the week, Parks & Recreation partnering with Community Ed to promote the shop local campaign, provision of GROW Farmington Visa Card with percentage off for using it, Tiger football card discounts to local businesses, or I-pad or I-phone giveaway for most used shop local card or most spent on receipt. The group also discussed the slogan and logo for the campaign. Ideas included "Buy Farmington First" with additions to Farmington First campaign of the past, "Farmington - Think. Shop. Buy.", or "Shop Friendly Farmington — Help us GROW". The logo included the use of the sunflower. The next GROW Farmington meeting is on September 19th. Further discussions at the next meeting will be about the slogan and logo. Staff will inform the EDA of the progress made for the shop local campaign at the September 24th meeting. ACTION REQUIRED Information only. �spec . L,�'ti , fitted, dr Lee Smick, City Pl. - AICP, CNU-A 4RI12 City of Farmington WAWA 430 Third Street Farmington,Minnesota r 651.280.6800•Fax 651.280.6899 www.ci.fitrmington.mn.us TO: EDA Members FROM: Lee Smick, AICP, CNU-A City Planner SUBJECT: Buy Local Campaign DATE: October 22, 2012 INTRODUCTION/DISCUSSION GROW Farmington group met on September 12, 2012 to-begin discussions for the buy local campaign and met three more times thereafter in order to discuss the campaign and logo. City staff and the FBA made the logo decision on October 16, 2012 after voting was completed online. The logo is attached for your review. There will be an opportunity to make text changes in the circle "Think, Buy, Live, Local!" so that a variety of messages may be displayed. If messages were to be sent to residents, a text change may include "Invest in Your Community", or to potential businesses — "Walgreen's — Come Grow with Us!" The opportunity to display messages to a particular group makes the logo more flexible in the community. Various ideas were also discussed about how the logo and campaign would work. The logo could be included in marketing materials to promote events or programs such as to provide loyalty memberships or new customer gift cards, discounts at the local business of the week, Parks & Recreation partnering with Community Ed to promote the buy local campaign, opportunities of a GROW Farmington Visa Card that offers a percentage off for using it, Tiger football card discounts to local businesses, or a giveaway for most used buy local card or most spent on receipt. The attached logos show the text in the circle in bold and normal. Additionally, Godfrey's Signs provided a quote concerning the printing of window stickers for businesses that was presented to the FBA. ACTION REQUIRED Information only. Respectfull su.mi -• Lee Smick, City Pl. AICP, CNU-A City of Farmington Government-Farmington, MN - Government Organization I Facebook Page 1 of 7 Email or Phone Log In, ..f„... . . n Keep me logged in . ,. •I . -k•lik • . 4 ! ,`1 �- mss} 4is�;•�_ !� -."••• . w�wu t� � afl• _ V"44,_I•+e'er :Yr- i ,,r,11,77:1„ +1- y "� t1h 1.f� '1 r� `d,' r.;, J *.. .. t .F .atY 'Fps .';. �.r:„n r i, .r:•',, t +..~!t ' . i' <w a r!i , , c s5 s yf”-A 4 + . ' " Yr` 'i ii , r , s 7 i ; 'r x d n r a a l x +eseikRmr/k :,,,, .._ lit :. 4 is, ' p o �sv�`' City of Farmington Government Like 507 likes• 13 talking about this•204 were here • Government Organization Bu iit 430 Third Street,Farmington,MN. 507 1 (651)280-6800 J ca¢evi�e • Today 8:00 am-4:30 pm About Photos Likes Map Events Highlights iCity of Farmington Government shared a link. Recent Posts by Others on City of Farmington Government See All \... ' 29 minutes ago Jenny Olmanson Fix your leaks!The average household's leaks can account for . . Some pictures around Farmington today.http://takentod... y g Sunday at 5:30pm more than 10,000 gallons of water wasted every year,or enough water to wash nearly 10 months'worth of laundry! ■ Wendy Anderson Appel www.epa.gov/watersense http://kstp.com/article/stories/s2853510.shtml This was... February 7 at 3:17pm WaterSense I US EPA pi Amber Greiner . www.epa.gov E22 the newest member of the City of Farmington Gover... WeGuRoirE -,..J YOtaLSEL9 r apt s Save water and protect the environment s 'January 30 at 6:33pm " '' ,b' by choosing WaterSense labeled "''--". '°'C i products in your home,yard,and • Skybound Fitness• business and taking simple steps to save `'" Happy New Year! January 1 at 10:12am Like•Comment•Share Cindy Ball Thanks City of Farmington for doing such a great job plowi... December 28,2012 at 11:55am City of Farmington Government ',, 19 hours ago More Posts Are you enjoying this beautiful day as much as we are?Share your sunny winter images of Farmington; Focus on Farmington Recommendations See All pictures can be taken anytime of the year! www,ci.farmington.mn.us 111 Scott House Farmington,it's the new St Paul...Check it out;) 5 •over a year ago http://www.facebook.com/pages/City-of-Farmington-Government/133791913357598 2/13/2013 City of Farmington Government - Farmington, MN - Government Organization I Facebook Page 2 of 7 j „, ! u S Likes 4 n Farmington w r Farmington Yellow Ribbon Network ` Non-Profit Organization I_ikP Like•Comment•Share C' Farmington Dew Days Community Like 4` City of Farmington Government III Dakota County Parks-forever wild Yesterday Government Organization Like Have you shopped local lately? Dakota County Library www.ci.farmington.mn.us/Departments/EconomicDevelop/Busine pfptlpo5 Government Organization Like ssIncentives.html ri EPA WaterSense Government Organization Like L°164 Activity G'I \ f Recent "PP - .,i City of Farmington Government created Taylor y 4114,4 . Manes Fashion Show Fundraiser. Farmington Like•Comment•Share 6 City of Farmington Government shared a link. V) Monday City of Farmington Government J Monday Downtown Farmington Farmers'Market,Thursdays,June 13- September 26,2013, 2:30-6:30 p.m.Vendor applications are www.ci.farmington.mn.us being accepted for the following items: Continue Reading... Berries,Candy and Confections,Jams and Jellies, Maple Syrup, Nuts and Kettle C...see More CITY WEBS1TE City of Farmington '' www.ci.farmington.mn.us s-- r['1 i. g.. } Like•Comment•Share Like•Comment•Share City of Farmington Government shared a link. Monday .6"t City of Farmington Government shared a link. City plows are out today! Questions about snow plowing and '% Monday winter parking? www.ci.farmington.mn.us/Departments/MunicipalServices/SnowPl This time of year ice dams can be a problem. Here's information owingParking.html from the Minnesota Department of Commerce Division of Energy Resources about how to solve ice dams: City of Farmington http://mn.gov/commerce/energy/images/IceDamFacts.pdf -\ www.ci.farmington.mn.us si No person shall park a vehicle or permit http://mn.gov/commerce/energy/images/IceDamFacts.pdf � � it to stand upon any street,highway, mn.gov alley,or public parking area within corporate city limits for a period of time Like•Comment•Share Like•Comment•Share http://www.facebook.com/pages/City-of-Farmington-Government/133791913357598 2/13/2013 "Buy, Live Local! The "Buy, Live, Local!" campaign has launched in Farmington! It's time to show how important your community is to you. This is where you Buy from local businesses first, and Live in this community for a lifetime. This is how you GROW Farmington! With every local purchase, YOU make a difference. Your patronage impacts the local economy,the vitality of our town,the sustainability of our community, and the health and welfare of our lives. Where we shop, where we eat and have fun—all of it makes our community home. Our one-of-a-kind businesses are an integral part of the distinctive character of this town. Local businesses are owned by people who live in this community or close by, are less likely to leave, and are more invested in the community's future. So, let's frequent the one-of-a-kind businesses and their distinctive character through purchasing locally, thereby growing Farmington. Look for the GROW Farmington logo everywhere you shop and take the pledge to show your support: "I pledge to BUY first from local businesses who give back so much, in so many ways, to my community, and LIVE first in the community I call home". •'t"'"�` "*Ik "s Bctg, Lit/6, Loeae/ LGROW Farmington City of Farmington Page 1 of 1 City of Farmington,Minnesota I Contact Us I Ask Us&Tell Us! Go . `r - ____ �- Y r • . ti Home I About Farmington I For Residents I Business I City News I Government I Departments I Parks/Trails I Recreation I Facilities AEUy Welcome to Farmington, Minnesota Follow us 4/* Latest News © nix l e Online Facility Reservations City Hours 11411.1 Farmington's New Fire Engine is Home! Online Recreation Registration City Employment Watch Meetings City Meeting Calendar OPEN Farmington is Open to Business-FREE new Program Live Streaming,Webcasts,Videos ew. Communications Cable Channel 16&22 Community Calendar Seasonal Events&Notices &Photo Contest * ' Ask US Parks&Recreation Scrape up new Materials for Recycling 11 0. i A Snow Plowing and Parking Take City Surveys t ti all It • gill ilk Tell US ll ,_;,;-.1' . Adopt a Hydrant to Insure Availability in a Fire Emergency City Hall 430 Third Street Schmitz-Maki Arena is Open for Skating Quick Links Farmington,MN 55024 - 651 280 6800 GROW Farmington FAX 651.280.6899 M Outdoor Rinks and Warming Houses are Open r Yellow Ribbon Video Links IF City Boulevard Tree Trimming Information and Locations ',Pr Network Dakota County North Creek /,, Farmington Veterans Greenway Memorial MnDOT Research r Stop Signs:Why do we have them on residential roads? City of Farmington Salary r . _ , Statement 1/31/2013 Stop Sign, van.Du llde Have Them on R .dent:al < 0.. Banner photo by Sally Bots lord. i t ti 41P i , .,.....„.4i . ,.. ,_ , 1 City of Farmington•430 Third Street•Farmington,MN 55024.651-280-6800 http://www.ci.farmington.mn.us/ 2/13/2013 City of Farmington 430 Third Street Farmington, Minnesota � , 651.280.6800 Fax 651.280.6899 www.ci.farmington.mn.us December 31, 2012 Lisa Henning Assistant Director of Community and Economic Development Dakota County Community Development 1228 Town Centre Drive Eagan, MN 55123 RE: 2013 CDBG Request Dear Ms. Henning: Enclosed are four CDBG applications for FY2013. The City of Farmington is grateful that CDBG funding is available for projects in our City that offer low/moderate jobs, environmental cleanup, and economic development opportunities in our community. Farmington is requesting funding for two Commercial Rehabilitation activities ($35,000), one Business Development Grant($15,000), and one Slum/Blight Spot Benefit($10,0000)totaling$60,000. Farmington understands that its FY2013 CDBG Funds may only provide approximately $35,820; however, we are proposing to reallocate previous CDBG funding, as shown in the table below. REVISED FY2013 CDBG FUNDS - Farmington, MN Funds Proposed Remaining Funding Categories Total Funds Reallocated allocation Total Funds Funds 12/2012 12/2012 2013 Spent 5/2013 5/2013 Residential Rehabilitation 49,157.99 (-27, 811.50) 21,346.49 21,346.49 Commercial Rehabilitation 22,188.50 (+27,811.50) 5,000.00 55,000.00 10,000.00 Business Development Grant 30,820.00 30,820.00 15,820.00 Public Service- Senior 16,000.00 16,000.00 Center 16,000.00 Microenterprise 23,800.00 23,800.00 23,800.00 Reallocated funds to (-17,510.00) Coates/Wells Total Budget 111,146.49 27,811.50 35,820.00 146,966.49 86,966.49 Farmington would like to reallocate $27,811.50 from the Residential Rehabilitation fund(since Farmington has only processed four grants)to Commercial Rehabilitation and $5000 from the proposed $38,820 for FY2013. The remaining funding for proposed FY2013 is $30,820 proposed for the Business Development Grant. CDA staff is proposing to remove $17,510 from Farmington's Business Development Grant and reallocate it to the City of Coates for a$7,510 weather siren and $10,000 to Dakota County Well Sealing projects. With this shift in some of the funding categories and the proposed FY2013 projects in the attached applications, Farmington is proposing to spend $45,000 from the reallocated funding of$55,000 in the Commercial Rehabilitation activity(two sprinkler systems and one slum/blight spot benefit project) leaving $10,000. The other project on the attached application proposes to spend $15,000 from the Business Development Grant of $30,820 leaving $15,820. Farmington is proposing a recalculation of the Total Fund of$146,966.49 to be reduced to $86,146.49 by May 1, 2013. It is understood that the City of Farmington is required to spend $51,446.59 by May 1, 2013 to meet HUD's 1.5 timeliness rate, and the City proposes to meet that requirement through the proposal of these projects. The City of Farmington is excited for these proposed upcoming projects in 2013. With the reallocation of some funds from existing categories and the proposed $35,820 (approximately) for FY2013, Farmington appreciates the opportunity to apply for CDBG funding from HUD/CDA. If you have any questions concerning the four applications,please call me at(651) 280-6820. I look forward to learning of the outcome of the application proposals in January 2013. Sinc i-1-1y ••v/' Lee Smick, AICP C -A City Planner/Economic Development Cc: Farmington Economic Development Authority David McKnight, City Administrator Robin Hanson, Finance Director Ken Lewis, Building Official John Powers, Fire Marshal Tony Wippler, Assistant City Planner 4FARMiy City of Farmington y A \Z 430 Third Street Farmington, Minnesota 651.280.6800 Fax 651.280.6899 Gip 4J / 4sT.A PROO5\a www.cilarmington.mn.us TO: EDA Members FROM: Lee Smick, AICP, CNU-A City Planner SUBJECT: CDBG Funding Request for FY2013 and Proposed Revision of Business Development Grant Program DATE: January 28, 2013 INTRODUCTION/ A total of four applications for the request of CDBG funding in 2013 were delivered to the Dakota County CDA on December 31St, 2012. The total amount of the funding request was $60,000. On January 8, 2013, the Dakota County Board of Commissioners reviewed and approved the reallocation of$17,510 from the Farmington's Business Development fund to Dakota County and the City of Coates. DISCUSSION City Staff have prepared four applications for review at the EDA, City Council, and Dakota County CDA for CDBG funding. The attached letter to the CDA also explains the reallocation of funding for these four projects. The four applications included the following requests: Property Project CDBA Fund Request Dakota County Lumber—28 8th St Sprinkler System Installation $17,500 Former Rambling River Center Sprinkler System Installation $17,500 431 3`1 Street Former Oasis Market—705 8th St Slum/Blight—Tank Removal $10,000 Installed Building Solutions Business Development Grant $15,000 21025 Edmonton Avenue Equipment Purchase— Mechanical Truck Repair Shop Total $60,000 Commercial Rehabilitation Business Development Grant The City Council approved the resolution on December 17,2012 concerning the request for CDBG funding for 2013. Business Development Grant Program As stated above, on January 8, 2013,the Dakota County Board of Commissioners removed $17,510 from the Farmington's Business Development Grant fund. At this time, staff is working with the CDA to replenish the fund to include $30,820 from the CDA's FY2013 funding round. Business Development Grant—Baldy's BBQ On January 2, 2013, an additional request for funding from the Business Development Grant program was received from Mr. Brian Wheeler, owner of the soon-to-open restaurant, Baldy's BBQ, at the former Burger King building. Mr. Wheeler has requested that the City allow him to apply for CDBG funding under the Business Development Grant for the purchase of cooking equipment for his new restaurant. He is requesting the maximum of$15,000 through the CDBG program. The grant will have sufficient funding after the CDA's FY2013 reallocated funds of $30,820. At this time, Mr. Wheeler does not qualify for the grant because the City only allows existing businesses receive monies to relocate or expand within the City of Farmington. Mr. Wheeler's proposal is to locate a"new"business in the City. Business Development Grant—2008 Approval The original Business Development Grant requirements were developed and approved by the 7- Member EDA on April 28, 2008. The intention for the grant was to meet a number of existing business owner's requests for City funded business expansion projects in Farmington. At the time,the 7-Member EDA proposed that grant money would be allocated through an RFP process so the allocation was fair to all applicants. The RFP requirement is no longer stated in the 2012 Grant. Business Development Grant—2013 Proposed Amendment A-���l� �C/�/�=�/ �/ `� /�, Staff and the CDA have agreed that the EDA should review the objectives of the City's Business Development Grant program to include "new"business grant opportunities. Therefore, staff is proposing text changes to the Business Development Grant to allow"new"businesses to have the opportunity to apply for CDBG funding. The proposed amendments are described below (also in attached Business Development Grant packet); text shown underlined identifies"new" text and text identified as strikeout removes the text. Revisions are highlighted in yellow. Program Objectives a) To promote job growth Seca-jobs within the City by encouraging new and existing businesses to locate,relocate and/or expand within the City of Farmington. Retained jobs are positions that would be-eliminated if not for this program ar istancc. b) To create additional job opportunities while also retaining local jobs within the City. Retained jobs are positions that would be eliminated if not for this program assistance. Applicant will be required to provide documentation of the retained positions. c) To support entrepreneurial growth within the City for new and existing businesses. Eligible Recipients a) The property must be located within a commercially or industrially zoned district or a district that has a commercial or industrial component. This would include the following zoning districts: I-1,IP,B-1,B-2,B-3,B-4,SSC,Business/Commercial Flex, Mixed Use and R-T. (f) Ineligible project costs include but are not limited to interior remodeling improvements, furniture,financing fees,business or operating costs (excluding rental cost assistance for microenterprise applicants),equipment(unless considered part of a new or expanding business expansion and the additional equipment results in additional product or service offerings by the company),removable fixtures and building acquisition costs. Costs incurred prior to the application date are not eligible for program funding. Eligible Uses of Funding: Applicants may apply for grant funding for one of the following uses only. (a) Business Development Expansion Assistance. One time grant funding for aft a new or existing Farmington business that is establishing a new business,expanding their current facility,relocating to,or constructing a facility elsewhere within the city limits. Relocation outside of the City of Farmington within three years of receipt of grant funding,or sale of equipment purchased with grant funding within three years will trigger repayment of grant funding in full. The Applicant would have to meet the criteria for the national objective of benefiting low to moderate income persons as defined by the Federal Department of Housing and Urban Development through job creation. Applicant will be required to verify that 51% of permanent jobs created or retained on a full time equivalent basis are low to moderate income. ACTION REQUIRED Staff is requesting that the current EDA review the information above to determine if the EDA is interested in amending the Business Development Grant requirements to include "new businesses". 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These funds will aid the City in supporting local businesses by assisting with financing for projects that upgrade existing commercial buildings within the community. The Dakota County CDA distributes the funds on behalf of the Federal Department of Housing and Urban Development(HUD). Projects that receive CDBG are subject to HUD requirements. The following policies and procedures have been developed for projects undertaken with CDBG dollars in the City of Farmington. These policies are subject to change as recommended by the Dakota County CDA and/or the Federal Department of HUD. Program Purpose To provide financial assistance to property owners who are making eligible improvements to eligible commercial properties within the City of Farmington. Type of Assistance CDBG Grant funding. Grant Terms &Requirements No more than one grant may be granted per property or per applicant during a funding year which currently runs from July 1st until June 30th. A 1:1 match is required by the applicant. For every dollar contributed to funding eligible project costs by the Commercial Rehabilitation Grant Program,the applicant must contribute one dollar. The amount of grants to be awarded shall be$5,000 or greater,but not to exceed$35,000. Program Objectives a. To prevent deterioration of commercial properties and discourage blight; b. Encouraging projects that correct code violations and eliminate accessibility restrictions to the extent necessary to eliminate specific conditions detrimental to public health and safety; c. To help maintain and expand the variety of options for business uses in existing commercial space within the City. 2/13/2013 K:\PLANNING\Economic Development Strategy\Commercial Rehab Grant\Commercial Rehab Grant FINAL 021313.doc Eligible Recipients 1. The property must be located within a commercially zoned district or a district that has a commercial component. This would include the following zoning districts: B-1, B-2, B-3, B-4,SSC, Business/Commercial Flex, Mixed Use and R-T. 2. All individuals having an ownership interest in such structure or an interest as purchaser in a contract for deed must join in the application and sign the grant agreement with the City,including the contract holder. 3. Leaseholders are eligible to make application for CDBG funds. The Farmington Economic Development Authority and City Council, on a case-by-case basis,will review such applications to determine their eligibility for funding,based on the length of the lease on the property and length of time the business has operated in Farmington. The property owner must join in the application and comply with Program requirements. 4. Projects that would result in permanent displacement of either residential or business tenants will not be financed with CDBG program funds. Any temporary displacement of tenants resulting from project activities shall be the responsibility of the property owner. Tenants shall be fully informed of the project plans, and the expected impact on them,and shall receive a Notice of Nondisplacement or Displacement,as appropriate, prior to the start of rehabilitation. Property owners will be required to provide relocation assistance to tenants as required under the Uniform Relocation and Real Property Acquisition Policies Act of 1970. 5. No member of the governing body of the locality, or official, employee, or agent of the local government who exercises policy, decision-making function or responsibilities,including members of the Economic Development Authority (EDA), Planning Commission and Farmington City Council, in connection with the planning and implementation of the Commercial Rehabilitation Grant Program shall directly or indirectly benefit from this program. This prohibition shall continue for one (1) year after an individual's relationship with the local government ends. Any potential conflicts of interest under Minnesota Statues 412.311 and 471.87- 471.89 or Federal Regulations 24 CFR,Part 570, Uniform Administration Requirements, shall be evaluated on the basis of a legal opinion to be requested from the Farmington City Attorney. 6. Ineligible project costs include but are not limited to interior remodeling improvements,furniture,financing fees,business or operating costs, equipment,removable fixtures and building acquisition costs. Costs incurred prior to the application date are not eligible for program funding, 7. Eligible projects must comply with Federal Anti-Pirating Regulations. 2/13/2013 K:\PLANNING\Economic Development Strategy\Commercial Rehab Grant\Commercial Rehab Grant FINAL 021313.doc 2 Any assisted business relocating to the City of Farmington must not relocate more than twenty-five jobs from any other labor market area or 0.01% of jobs in the Labor Market Area, unless forced to relocate by an action under the Uniform Relocation Act. Farmington is part of the Minneapolis-St. Paul Metropolitan Statistical Area Labor Market Area. Program Definitions Program Administrator The Program Administrator shall be the Dakota County CDA,1228 Town Centre Drive,Eagan, MN 55123, Phone (651) 675-4400. Staff shall work with the Project Coordinator in administration of all aspects of the Program. Applicant Any person seeking to obtain assistance under the terms of this Program. Building Official The Building Official for the program shall be a City of Farmington employee and shall provide plan review and technical expertise relating to inspections, construction quality, code compliance and scope of work to be accomplished. Project Coordinator The Project Coordinator for the Program shall be an employee of the City of Farmington and shall provide assistance and management relating to improvement activities. The Project Coordinator is responsible for program marketing, application intake, scheduling of inspections, preparation of contracts and grant documents, and processing of payment requests. The Project Coordinator serves as the contact person for rehabilitation from application to project close-out and shall be available during regular business hours. Target Area Locations that are in commercial zoning districts or districts with a commercial component, including: B-1, B-2, B-3, B-4,SSC, Business/Commercial Flex, Mixed Use, and R-T. Eligible Improvements: Façade improvements,corrections of code violations, code improvements and correction of handicap accessibility issues to the extent necessary to eliminate specific conditions detrimental to public health and safety. 2/13/2013 K:\PLANNING\Economic Development Strategy\Commercial Rehab Grant\Commercial Rehab Grant FINAL 021313.doc 3 Special Conditions Contractors: All project work undertaken with CDBG funds must be completed by bona fide contractors who are licensed (as applicable) and provide proof of insurance. Historic Properties The City of Farmington is a Certified Local Government under the Historic Preservation Act. Each project submitted for review will follow the procedures outlined in the handbook for Historic Preservation in Farmington. Eligible "historic properties" are those which have been designated or determined eligible for designation as Farmington Heritage Landmarks;within or immediately adjacent to the boundaries of a historic district; or listed on the National Register of Historic Places. The City will work in conjunction with the State Historic Preservation Office to implement Federal preservation guidelines as they relate to eligibility and certification of work. If the building or the unit was originally built prior to 1950, the property will be evaluated for historical significance by the Historic Preservation Commission(HPC) using the eligibility criteria in the Farmington City Code. If it has been determined that the property is eligible for Farmington Heritage Landmark Designation,a review of the proposed rehabilitation work is necessary, and the work must be in conformance with the Secretary of the Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings. Once work is approved by the Historic Preservation Commission and applicable preservation standards have been met, a Certificate of Appropriateness will be issued by the HPC. Davis-Bacon Wage Rates: All contracts in excess of$2,000 that will be funded through the CDBG program require compliance with the Federal Labor Standards Provisions of the Davis-Bacon Act. Contractors are to pay their employees the prevailing wage rate as determined by the U.S. Department of Labor. Appropriate wage information must be included in the bid selections and contract documents. The Project Coordinator must approve all payrolls prior to the release of funds. Fair Housing&Equal Opportunity The City of Farmington and the Project Coordinator will work affirmatively to ensure that all persons,regardless of race,color, creed,national origin, sex, religion,marital status, age,handicap,familial status or reliance on public assistance will be treated fairly and equally for purposes of participation in the Program. Access to program information and materials will not be denied to any person for any reason. The City will encourage the participation of women and 2/13/2013 K:\PLANNING\Economic Development Strategy\Commercial Rehab Grant\Commercial Rehab Grant FINAL 021313.doc 4 minority-owned businesses and local businesses and suppliers who meet Section 3 Criteria. Lead Based Paint The program will conform to the requirements of the Residential Lead Based Paint Hazard Reduction Act of 1992 for any assisted property that contains residential dwelling units. All program applicants must provide notification of the hazards of lead based paint to impacted tenants. The Building Official shall inspect for defective paint surfaces at the time the property is being inspected for code compliance. All defective surfaces will be corrected in accordance with the regulations in 24 CFR Part 35 and Minnesota statutes and safe work practices. Additionally,contracts for rehabilitation work will include language explicitly prohibiting the use of lead based paint. Data Privacy All information provided by applicants under the Commercial Rehabilitation Grant Program shall be maintained in accordance with the Minnesota Data Practices Act and the City's Subrecipient Agreement with the Dakota County CDA. Procedures Application Intake Applications are accepted on an ongoing basis and are reviewed based upon funds availability. Applications will be reviewed for participation in the program based upon the following guidelines: 1. Whether the applicant has clear title to the property to be improved. Prior to project approval,the following will be ascertained: a. Title verification; b. All real estate taxes and any City fees or charges are current; c. All individuals having an ownership interest,including contract holders, have agreed in writing to join in the application; 2. The extent to which the project meets the program objectives; 3. The degree of the project's overall impact on the surrounding area. 4. An environmental review of the property shall be conducted by the CDA. Allow 60 days for the completion of the environmental review. 5. Property details for properties older than 50 years will be submitted to the State Historic Preservation Officer (SHPO)by the CDA for determination of the property's historical significance. 2/13/2013 K:\PLANNING\Economic Development Strategy\Commercial Rehab Grant\Commercial Rehab Grant FINAL 021313.doc 5 If necessary, applications competing for limited funds may be selected based upon these criteria. Projects that are not financially feasible within the constraints of available funding will be eliminated from consideration. Property Inspections Upon determination that a property owner applying for rehabilitation assistance is eligible based on the program guidelines, the Building Official shall conduct an inspection of the property to determine the corrective actions necessary for the property to conform to City of Farmington building code standards. Scope of Work The Scope of Work will have two (2) components: 1. Upon completion of the initial inspection, the Building Official shall prepare a report indicating the work necessary to bring the property into compliance with Farmington building codes inclusive of the Minnesota Energy Efficiency Standards. In addition,the Project Coordinator will complete the CDBG Slum& Blight for Spot Basis National Objective Form. Both reports will be used for the project to satisfy the intent of the Program and shall be included as a part of the Scope of Work. 2. The property owner shall provide a report or elevation drawing indicating any planned improvements. This report will be reviewed by the City of Farmington and the HPC if applicable (see historic properties). Project Approval The final application will be approved by the Farmington City Council; following review by City of Farmington staff and recommendation by the EDA. Improvements approved for CDBG funding will be based on the severity of the correction needed and the ability of the applicant to complete the project with CDBG funds and private funds. The Dakota County CDA will determine final approval. Verification of availability of private funds will be required before final approval of the project. Competitive Bidding A minimum of three (3) competitive bids must be solicited and two (2) competitive bids must be obtained for each improvement project the applicant proposes for CDBG funding. Applicants may use any contractor they choose, as long as the contractor meets the requirements listed below. All contractors must provide a Certificate of Insurance Coverage. Contractors must also certify that they will comply with the requirements of the Davis-Bacon Act. These rates will be provided to the applicant as a part of the contractor's instructions. 2/13/2013 K:\PLANNING\Economic Development Strategy\Commercial Rehab Grant\Commercial Rehab Grant FINAL 021313.doc 6 Awarding Contracts The contract will be between the applicant and the contractor. The contract will be awarded to the lowest bid unless one (1) of the following circumstances occur: 1. The bid is determined to be unrealistically low and the contractor agrees to withdraw the bid; 2. The contractor has failed to follow the procedures as outlined in the instructions to the bidders; 3. The owner does not want the low-bid contractor to perform the work and agrees to pay the difference between the lowest bid and the preferred contractor's bid. 4. There appears to be collusion between two (2) or more contractors,in which case, all bids in the questionable trade category will be thrown out and different contractors will be solicited for bids;and 5. The contractor fails to bid according to the specifications,and it proves impossible to compare that contractor's bid with the other bids received. Approval by the Economic Development Authority (EDA) and City Council Once the applicant has accepted a bid, staff will prepare the information for presentation to the EDA. Upon EDA approval, the item will be forwarded to the City Council for final approval. If approved by the City Council,a Grant Agreement will be signed by the applicant and a designated City official. This Agreement will outline the terms and conditions of the project,including the City's role and the applicant's responsibilities,and any corrective actions to be taken in the event of a dispute. Notice to Proceed A preconstruction conference will be held with the Program Coordinator, the Building Official,the applicant and contractors and subcontractors to ensure awareness and compliance with Davis-Bacon requirements and any other requirements necessary to begin the project. A notice to proceed will be issued after the preconstruction conference. The contractor will normally have one (1) year in which to complete the awarded contract. If construction work does not begin within 90 days of the award of contract the Grant Agreement is null and void: however the applicant may apply for one extension if necessary. The length of the extension will be determined on a case-by-case basis. Change Orders All change orders to the current contract require the approval of the Project Coordinator as well as the signatures of the owner and contractor. Acceptance of Work Interim inspections may be scheduled with the Building Official to monitor work in progress. Final inspection shall be required to ensure that the work has been completed in a satisfactory manner. In the event of a dispute between the owner 2/13/2013 K:\PLANNING\Economic Development Strategy\Commercial Rehab Grant\Commercial Rehab Grant FINAL 021313.doc 7 and contractor concerning the completion of work,the Project Coordinator shall work with both parties to try to negotiate a satisfactory solution. Disputes that cannot be resolved by negotiation, and that result in legal action by either party to the contract,shall be resolved in accordance with applicable State law. CDBG funds shall not be released to either the owner or contractor until such dispute has been settled. Hold Harmless The owner and the contractor shall indemnify and hold harmless the City of Farmington,the Farmington EDA, and the Dakota County CDA and their respective officers,employees,and officials from any damages or liability arising from, or occurring as a result of, the activities funded through this Program. CDBG Payment All CDBG funds will be disbursed by the Dakota County CDA upon authorization by the owner and the City of Farmington. Payments will be made only after all code improvements and exterior work have been completed according to the authorized scope of work, and have been accepted by the owner. Funds will be released once all improvements are complete to the satisfaction of the City Building Official and once title ownership, Davis-Bacon wage payments and other requirements are satisfied with the CDA and the City. The Building Official and City staff will inspect the final project,and a Certificate of Occupancy (CO) or a Temporary Certificate of Occupancy (TCO)will be issued by the Building Inspections Division. The CO or TCO is required before the CDA releases funds. Payment may be made directly to the contractor or in reimbursement to the owner,upon presentation of paid receipts for approved work. The following must be presented to the Project Coordinator in order to process payment: 1. Billing Statement/Paid Receipt 2. Sworn Contractor's Statement 3. Completion Certificate 4. Weekly Payroll Reports Private Financing Applicants are responsible for all costs incurred as a result of not accepting the lowest bid, and costs above and beyond the availability of CDBG funds as outlined in the Program. Applicants shall contact a lending institution of their choice to arrange financing for their portion of the project. Applicants should request a letter of credit or other suitable documentation from the lending institution to prove that private funds have been committed. This letter is to be submitted with the completed 2/13/2013 K:\PLANNING\Economic Development Strategy\Commercial Rehab Grant\Commercial Rehab Grant FINAL 021313.doc 8 application. If an applicant is not using a lending institution, other evidence of committed funds must be presented at the time of application. Escrow The property-owner may be requested to establish an escrow account or other private account for deposit of the private funds that will be used to complete the improvement project. The CDBG funds shall be reserved on the Owner's behalf by the Dakota County CDA,but shall be drawn from the U.S. Treasury only when actually needed for disbursement to contractors or vendors, or in reimbursement to the Owner. Appeals Process Appeals concerning eligibility for the Commercial Rehabilitation Grant Program or the proposed improvements shall be made in writing and addressed to the Project Coordinator. The Coordinator will contact the applicant and attempt to rectify any concerns. A written response will be made within fifteen(15) days. 2/13/2013 K:\PLANNING\Economic Development Strategy\Commercial Rehab Grant\Commercial Rehab Grant FINAL 021313.doc 9 0 i kRilf/ o 443 0: r Alma \\\ ,„...,.._ � , * g ill Op sr' A PROMS City of Farmington Business Development Grant Approved by City Council February 4, 2013 City of Farmington Business Development Grant The City of Farmington has received funding from the Dakota County Community Development Agency (CDA) in the form of Community Development Block Grant(CDBG) funds. These funds will aid the City in supporting local businesses by assisting with financing for business development and growth. The Dakota County CDA distributes the funds on behalf of the U.S. Department of Housing and Urban Development(HUD). Projects that receive CDBG funds are subject to HUD requirements. The following policies and procedures have been developed for projects undertaken with CDBG dollars in the City of Farmington. These policies are subject to change as recommended by the Dakota County Community Development Agency and/or the U.S. Department of Housing and Urban Development. 1. Program Overview Program Purpose To provide financial assistance to business owners who have projects that meet the criteria for the national objective of benefiting low and moderate income (L/M) persons. Types of Assistance CDBG funded grant. Grant Terms &Requirements No more than one grant may be issued per property or per Applicant during the funding year which runs from July 1st until June 30th. a) Amount-Amounts are limited to funding availability. No grant may exceed 50% of proposed total development costs for construction related projects. There is a maximum grant amount of$15,000 for new business, business expansion and relocation use. Microenterprise rental assistance is based on the tenant's lease terms and will not exceed 75% of the monthly rental payment up to twelve (12) consecutive months. Costs for common area maintenance and real estate taxes are not eligible for grant funding. Program Objectives a) To promote job growth within the City by encouraging new and existing businesses to locate,relocate and/or expand within the City of Farmington. 2/13/2013 K:\PLANNING\Economic Development Strategy\Business Development Grant\Farmington Business Development Grant- Approved 2-4-13.doc b) To create additional job opportunities while also retaining local jobs within the City. Retained jobs are positions that would be eliminated if not for this program assistance. Applicant will be required to provide documentation of the retained positions. c) To support entrepreneurial growth within the City for new and existing businesses. Note: HUD requires that at least 51% of jobs created and/or retained on a full-time equivalent basis are either held by or are considered to be available to low and moderate income persons. Eligible Recipients a) The property must be located within a commercially or industrially zoned district or a district that has a commercial or industrial component. This would include the following zoning districts: I-1, IP, B-1, B-2, B-3, B-4,SSC, Business/Commercial Flex, Mixed Use and R-T. b) All individuals having an ownership interest in such structure or an interest as purchaser in a contract for deed must join in the application and sign the grant agreement with the Economic Development Authority, including the contract holder. c) Leaseholders are eligible to make application for Program funds. The Farmington Economic Development Authority, on a case-by-case basis,will review such applications to determine their eligibility for funding,based on the length of the lease on the property and/or length of time the business has operated in Farmington. The property owner must join in the application and comply with Program requirements. d) Projects that would result in permanent displacement of either residential or business tenants will not be financed with CDBG program funds. Any temporary displacement of tenants resulting from project activities shall be the responsibility of the property owner. Tenants shall be fully informed of the project plans, and the expected impact on them, and shall receive a Notice of Nondisplacement or Displacement,as appropriate, prior to the start of rehabilitation. Property owners will be required to provide relocation assistance to tenants as required under the Uniform Relocation and Real Property Acquisition Policies Act of 1970. e) No member of the governing body of the locality, or official, employee, or agent of the local government who exercises policy, decision-making function or responsibilities, including members of the Economic Development Authority, Planning Commission and Farmington City Council, in connection with the planning and implementation of the Business Development Grant Program shall directly or indirectly benefit 2/13/2013 K:\PLANNING\Economic Development Strategy\Business Development GrantWarmington Business Development Grant- Approved 2-4-13.doc 2 from this program. This prohibition shall continue for one (1) year after an individual's relationship with the local government ends. Any potential conflicts of interest under Minnesota Statues 412.311 and 471.87-471.89 or Federal Regulations 24 CFR,Part 570, Uniform Administration Requirements,shall be evaluated on the basis of a legal opinion to be requested from the Farmington City Attorney. f) Ineligible project costs include but are not limited to interior remodeling improvements,furniture,financing fees,business or operating costs (excluding rental cost assistance for microenterprise applicants), equipment (unless considered part of a new or expanding business and the additional equipment results in additional product or service offerings by the company),removable fixtures and building acquisition costs. Costs incurred prior to the application date are not eligible for program funding. g) Eligible projects must comply with Federal Anti-Pirating Regulations. Any assisted business relocating to the City of Farmington must not relocate more than twenty-five jobs from any other labor market area or 0.01% of jobs in the Labor Market Area, unless forced to relocate by an action under the Uniform Relocation Act. Farmington is part of the Minneapolis-St. Paul Metropolitan Statistical Area Labor Market Area. g) An eligible business must have service or manufacturing operations that do not engage predominantly in retail sale of goods to end users. Retail sales are defined as sales not for resale,but for use and consumption by the purchaser. 2. Program Definitions CDBG Administrator The CDBG Administrator shall be the Dakota County Community Development Agency (CDA),1228 Town Centre Drive, Eagan, MN 55123,Phone (651) 675-4400. CDA staff shall work with the Project Coordinator in administration of all aspects of the Program. Applicant Any person determined to be an eligible recipient seeking to obtain assistance under the terms of this Program. If the applicant is a leaseholder,the property owner must also be a co-applicant. 2/13/2013 K:\PLANNING\Economic Development Strategy\Business Development GranttFarmington Business Development Grant- Approved 2-4-13.doc 3 Building Official The Building Official for the program shall be a City of Farmington employee and shall provide plan review and technical expertise relating to inspections, construction quality,code compliance and scope of work to be accomplished. Project Coordinator The Project Coordinator for the Program shall be an employee of the City of Farmington and shall provide assistance and management relating to improvement activities. The Project Coordinator is responsible for program marketing, application intake, scheduling of inspections, preparation of contracts and grant documents,and processing of payment requests. The Project Coordinator serves as the contact person for rehabilitation from application to project close-out and shall be available during regular business hours. Target Area Locations throughout the City of Farmington that are in commercial and industrial zoning districts or districts with a commercial or industrial component, including: I-1, IP, B-1, B-2, B-3, B-4,SSC, Business/Commercial Flex, Mixed Use,and R-T. Eligible Uses of Funding: Applicants may apply for grant funding for one of the following uses only. a) Business Expansion Assistance. One time grant funding for an a new or existing Farmington business that is establishing a new business, expanding their current facility,relocating to, or constructing a facility elsewhere within the city limits. Relocation outside of the City of Farmington within three years of receipt of grant funding, or sale of equipment purchased with grant funding within three years will trigger repayment of grant funding in full. The Applicant would have to meet the criteria for the national objective of benefiting low to moderate income persons as defined by the Federal Department of Housing and Urban Development through job creation. Please refer to Job Creation Requirements and Wage and Income Reporting under Section 3,Special Conditions (page 5)for further requirements. b) Microenterprise assistance. Rental assistance for a period of one year to an owner of a microenterprise business or a person choosing to develop a microenterprise business that will occupy a currently vacant commercial or industrial space within the city limits. The business must meet the criteria of microenterprise defined as a business having five or fewer employees, one or more of whom owns the business. The Applicant must submit a comprehensive business plan and the business must not relocate outside of the City of Farmington for a period of three years after receiving assistance 2/13/2013 KAPLANNING\Economic Development Strategy\Business Development Grant\Farmington Business Development Grant- Approved 2-4-13.doc 4 or repayment of grant funding in full will be required. Please refer to Job Creation Requirements and Wage and Income Reporting under Section 3, Special Conditions (page 5) for further requirements. c) Redevelopment Assistance. Redevelopment of EDA owned property. The redevelopment would have to meet the criteria for the national objective of benefiting low to moderate income persons as defined by the U.S. Department of Housing and Urban Development. A mixed-use project that includes commercial and residential will need to meet the national objective related to both job creation and low/moderate income housing. There may be additional site specific requirements. For further details please contact a City of Farmington Economic Development staff member. Please refer to Job Creation Requirements and Wage and Income Reporting under Section 3,Special Conditions (page 5) for further requirements. 3. Special Conditions Contractors: All project work undertaken through this program must be completed by bona fide contractors who are licensed (as applicable) and provide proof of insurance. Historic Properties The City of Farmington is a Certified Local Government under the Historic Preservation Act. Each project submitted for review will follow the procedures outlined in the handbook for Historic Preservation in Farmington. Eligible "historic properties" are those which have been designated or determined eligible for designation as Farmington Heritage Landmarks;within or immediately adjacent to the boundaries of a historic district; or listed on the National Register of Historic Places. The City will work in conjunction with the State Historic Preservation Office to implement Federal preservation guidelines as they relate to eligibility and certification of work. If the building or the unit was originally built prior to 1950, the property will be evaluated for historical significance by the Historic Preservation Commission(HPC) using the eligibility criteria in the Farmington City Code. If it has been determined that the property is eligible for Farmington Heritage Landmark Designation,a review of the proposed rehabilitation work is necessary, and the work must be in conformance with the Secretary of the Interiors Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings. Once work is approved by the Historic Preservation Commission and applicable preservation standards have been met,a Certificate of Appropriateness will be issued by the HPC. Microenterprise Applicants: Application materials must include a business plan for the proposed or existing microenterprise. The business plan must include an 2/13/2013 K:\PLANNING\Economic Development Strategy\Business Development Grant\Farmington Business Development Grant- Approved 2-4-13.doc 5 Executive Summary, Company Summary, Product Information, Market Analysis, Strategy and Implementation, Management Summary and Financial Plan. Job Creation Requirements and Wage and Income Reporting. Applicants must meet the CDBG national objective of benefiting low to moderate income persons, the Applicant will be required to verify that 51% of permanent jobs created or retained on a full time equivalent basis are low to moderate income. These jobs must be documented as either being held by or available to low to moderate income persons (per 24 CFR Part 570.208 (a)(4)). Verification must be submitted annually to the Project Coordinator for a period of five years. For microenterprise assistance,the low to moderate income benefit may also be met if the person who owns the microenterprise is of low to moderate income. For redevelopment of EDA owned property with affordable housing units these requirements are not applicable; see Affordable Housing Requirements and Reporting(page 6). Davis-Bacon Wage Rates: All contracts in excess of$2,000 require compliance with the Federal Labor Standards Provisions of the Davis-Bacon Act. Contractors are to pay their employees the prevailing wage rate as determined by the U.S. Department of Labor. Appropriate wage information must be included in the bid selections and contract documents. The Project Coordinator must approve all payrolls prior to the release of funds. Fair Housing&Equal Opportunity The City of Farmington and the Project Coordinator will work affirmatively to ensure that all persons,regardless of race, color,creed,national origin, sex, religion, marital status, age,handicap,familial status or reliance on public assistance will be treated fairly and equally for purposes of participation in the Program. Access to program information and materials will not be denied to any person for any reason. The City will encourage the participation of women and minority-owned businesses and local businesses and suppliers who meet Section 3 Criteria. Lead Based Paint The program will conform to the requirements of the Residential Lead Based Paint Hazard Reduction Act of 1992 for any assisted property that contains residential dwelling units. All program Applicants must provide notification of the hazards of lead based paint to impacted tenants. The Building Official shall inspect for defective paint surfaces at the time the property is being inspected for code compliance. All defective surfaces will be corrected in accordance with the regulations in 24 CFR Part 35 and Minnesota statutes and safe work practices. Additionally,contracts work will include language explicitly prohibiting the use of lead based paint. 2/13/2013 K:\PLANNING\Economic Development Strategy\Business Development Grant Farmington Business Development Grant- Approved 2-4-13.doc 6 Data Privacy All information provided by Applicants under the Business Development Grant Program shall be maintained in accordance with the Minnesota Data Practices Act and the City's Subrecipient Agreement with the Dakota County Community Development Agency. Affordable Housing Requirements and Reporting. Applicants redeveloping EDA owned property with affordable housing must meet the CDBG national objective of benefiting low to moderate income persons. The Applicant will be required to verify that the rents are set at affordable levels and that 51% of the units are occupied by low or moderate income households. 4. Procedures Application Intake Applications are accepted on a continual basis and will be reviewed based upon the balance of CDBG funding available. Applications will be considered for participation in the program based upon the following guidelines as applicable: a) Whether the Applicant has clear title to the property to be improved/constructed. Prior to project approval,the following will be ascertained: i. Title verification; ii. All real estate taxes and any City fees or charges are current; iii. All individuals having an ownership interest,including contract holders, have agreed in writing to join in the application; b) Verification of lease information and zoning compliance. c) Review of business plan. d) The extent to which the project meets the program objectives; e) The degree of the project's overall impact on the surrounding area. If necessary, applications competing for limited funds may be selected based upon these criteria. Projects that are not financially feasible within the constraints of available funding will be eliminated from consideration. Property Inspections Upon determination that an Applicant requesting assistance is eligible based on the program guidelines,the Building Official shall conduct an inspection of the property to determine the corrective actions necessary for the property to conform to City of Farmington building code standards. 2/13/2013 K:U'LANNINGEconomic Development Strategy\Business Development Grant\Farmington Business Development Grant- Approved 2-4-13.doc 7 Scope of Work The Scope of Work will have two (2) components: a) Upon completion of the initial inspection,the Building Official shall prepare a report indicating the work necessary to bring the property into compliance with Farmington building codes inclusive of the Minnesota Energy Efficiency Standards. This report, and any improvements deemed necessary by the Project Coordinator for the project to satisfy the intent of the Program,shall be included as a part of the Scope of Work. b) The Applicant shall provide a report or elevation drawing indicating any planned exterior improvements. This report will be reviewed by the City of Farmington and the Historic Preservation Commission if applicable (see Historic Properties, page 4). Project Approval The final application will be reviewed by the Project Coordinator and the Economic Development Authority. Projects approved for Program funding will be based on the scope of work proposed and the ability of the Applicant to complete the project with CDBG funds and private funds. The Dakota County Community Development Agency will determine final approval. Verification of commitment of private funds will be required before final approval of the project. Competitive Bidding A minimum of three (3) competitive bids must be solicited and two (2) competitive bids must be obtained for each improvement project the Applicant proposes for Program funding. Applicants may use any contractor they choose,as long as the contractor meets the requirements listed below. All contractors must provide a Certificate of Insurance Coverage. Contractors must also certify that they will comply with the requirements of the Davis-Bacon Act. These rates will be provided to the Applicant as a part of the contractor's instructions. Awarding Contracts The contract will be between the Applicant and the contractor. The contract will be awarded to the lowest bid unless one (1) of the following circumstances occur: a) The bid is determined to be unrealistically low and the contractor agrees to withdraw the bid; b) The contractor has failed to follow the procedures as outlined in the instructions to the bidders; c) The Applicant does not want the low-bid contractor to perform the work and agrees to pay the difference between the lowest bid and the preferred contractor's bid. 2/13/2013 K:\PLANNING\Economic Development Strategy\Business Development Grant\Farmington Business Development Grant- Approved 2-4-13.doc 8 d) There appears to be collusion between two (2) or more contractors,in which case,all bids in the questionable trade category will be thrown out and different contractors will be solicited for bids; or e) The contractor fails to bid according to the specifications,and it proves impossible to compare that contractor's bid with the other bids received. Approval by the Economic Development Authority Once the Applicant has accepted a bid(s) determining the cost of the entire project, the project coordinator will prepare the information for presentation to the Economic Development Authority. Upon EDA approval, a Grant Agreement will be signed by the Applicant and a designated City official. This Agreement will outline the terms and conditions of the project, including the City's role and the Applicant's responsibilities, and any corrective actions to be taken in the event of a dispute. Notice to Proceed A preconstruction conference will be held with the Program Coordinator,the Building Official,the Applicant and contractors and subcontractors to ensure awareness and compliance with Davis-Bacon requirements and any other requirements necessary to begin the project. A notice to proceed will be issued after the preconstruction conference. The contractor will normally have one (1) year in which to complete the awarded contract. If construction work does not begin within 90 days of the award of contract the Grant Agreement is null and void;however,the Applicant may apply for one extension if necessary. The length of the extension will be determined on a case-by-case basis. Change Orders All change orders to the current contract require the approval of the Project Coordinator as well as the signatures of the Applicant and contractor. Acceptance of Work Interim inspections may be scheduled with the Building Official to monitor work in progress. Final inspection shall be required to ensure that the work has been completed in a satisfactory manner. In the event of a dispute between the Applicant and contractor concerning the completion of work,the Project Coordinator shall work with both parties to try to negotiate a satisfactory solution. Disputes that cannot be resolved by negotiation, and that result in legal action by either party to the contract, shall be resolved in accordance with applicable State law. CDBG funds shall not be released to either the Applicant or contractor until such dispute has been settled. 2/13/2013 KAPLANNING\Economic Development Strategy\Business Development Grant\Farmington Business Development Grant- Approved 2-4-13.doc 9 Hold Harmless The Applicant and the contractor shall indemnify and hold harmless the City of Farmington and the Dakota County CDA and their respective officers, employees, and officials from any damages or liability arising from, or occurring as a result of, the activities funded through this Program. CDBG Payment All CDBG funds will be disbursed by the Dakota County CDA upon authorization by the Applicant and the City of Farmington. Payments will be made only after all project work has been completed according to the authorized scope of work, and has been accepted by the Applicant. Funds will be released once all improvements are complete to the satisfaction of the City Building Official and once title ownership, Davis-Bacon wage payments and other requirements are satisfied with the CDA and the City. The Building Official and City staff will inspect the final project, and a Certificate of Occupancy (CO) or a Temporary Certificate of Occupancy (TCO) will be issued by the Building Inspections Division. The CO or TCO as well as lien waivers are required before the CDA releases funds. Payment may be made directly to the contractor or in reimbursement to the Applicant,upon presentation of paid receipts for approved work. The following must be presented to the Project Coordinator in order to process payment: a) Billing Statement/Paid Receipt b) Sworn Contractor's Statement c) Completion Certificate d) Weekly Payroll Reports e) Lien Waiver Private Financing Applicants are responsible for all costs incurred as a result of not accepting the lowest bid, and costs above and beyond the availability of CDBG funds as outlined in the Program. Applicants shall contact a lending institution of their choice to arrange financing for their portion of the project. Applicants should request a letter of credit or other suitable documentation from the lending institution to prove that private funds have been committed. This letter is to be submitted with the completed application. If an Applicant is not using a lending institution, other evidence of committed funds must be presented at the time of application. 2/13/2013 K:\PLANNING\Economic Development Strategy\Business Development Grant\Farmington Business Development Grant- Approved 2-4-13.doc 10 Escrow The Applicant may be requested to establish an escrow account or other private account for deposit of the private funds that will be used to complete the improvement project. The CDBG funds shall be reserved on the Applicant's behalf by the Dakota County CDA,but shall be drawn from the U.S. Treasury only when actually needed for disbursement to contractors or vendors, or in reimbursement to the Owner. Appeals Process Appeals concerning eligibility for the Business Development Grant Program or the proposed improvements shall be made in writing and addressed to the Project Coordinator. The Coordinator will contact the Applicant and attempt to rectify any concerns. A written response will be made within fifteen(15) days. 2/13/2013 K:\PLANNING\Economic Development Strategy\Business Development Grant\Farmington Business Development Grant- Approved 2-4-13.doc 11 City of Farmington gritN4a 430 Third Street Farmington,Minnesota `a' , o 651.280.6800•Fax 651.280.6899 � , -rte/ A° www.cifermington.mn.us mnus ® J TO: EDA Members FROM: Lee Smick, AICP, CNU-A City Planner SUBJECT: Business Subsidy Policy DATE: January 28,2013 INTRODUCTION Farmington currently has a Business Subsidy Policy in effect that was adopted by the HRA on December 13, 1999 and by the City Council on February 7,2000. Revisions were made to it on November 4, 2002 (Ex. A). Staff is proposing a new Business Subsidy Policy(Ex. B) and Tax Abatement Policy(Ex. C). In addition, staff is also providing an example of a Business Incentive Program(Ex. D)that would allow funding from the EDA budget for new or existing businesses locating or expanding within the City. It is similar to the CDBG's Business Development Grant,but it does not have CDBG funding of requirements attached to it because it would be generated from the EDA's fund. DISCUSSION Business Subsidy Policy The Minnesota State Legislature enacted the Business Subsidy Act(Minnesota Statutes, Section 116K.993-995). A business subsidy is a local government agency grant of personal property, real property,infrastructure,the principal amount of a loan at rates below those commercially available to the recipient, any reduction or deferral of any tax or any fee, any guarantee of any payment under any loan, lease, or other obligation or any preferential use of government facilities that are given to a business. Basically,the likelihood that a business subsidy will be granted increases if its proponent can demonstrate that the public purpose will be achieved if, and only if,the business subsidy is granted. Any business that is seeking to obtain a business subsidy should carefully articulate the public purpose to be achieved and then demonstrate how the project in question would achieve that public purpose. In accordance with the MN Business Subsidy Law,the City Council upon recommendation of the EDA,will consider using business subsidies to assist private development projects in an attempt to achieve one or more of the following public purpose objectives: to retain local jobs and/or increase the number and diversity of jobs; enhance and diversify the City's tax base; encourage additional unsubsidized private development in the area, either directly or indirectly, through"spin off'development; achieve development on sites that would not be developed without business subsidies assistance; remove blight and/or encourage development of commercial and industrial areas in the city that result in higher quality development or redevelopment and private investment; and offset increased costs of development of specific properties when the unique physical characteristics of the site may otherwise preclude private investment. Tax Abatement Policy The Tax Abatement Policy is the funding program under the Business Subsidy Policy that is provided by the City. Tax abatement is the ability to capture and use all or a portion of the local property tax revenues within a defined geographic area to assist with commercial or housing development. In practice, it is a rebate rather than an exemption from paying taxes. It allows each major taxing jurisdiction to choose to contribute its share of the taxes and limit abatement in any manner it determines appropriate. It can be used to retain business by abating existing taxes. In any one year,the TOTAL amount a political subdivision may abate may not exceed the greater of: 10% of its net tax capacity or$200,000; may not abate taxes on a parcel while it is located in a TIF district, abatements are special tax levies outside of levy limits, and the amount of the abatement must be added to total levy for the current year. Proposed Criteria for Tax Abatement Projects eligible for consideration of property tax abatement include but are not limited to the following: • Mixed use projects including new and redevelopment projects • Commercial and industrial redevelopment projects • Commercial and industrial new developments • Residential business properties(with some restrictions as defined in this policy) If a request for abatement includes redevelopment of residential property, consideration shall be given to the following: • Redevelopment of rental housing that is over 25 years old • Mixed use development that includes housing(must be owner occupied) • The case made for the overall public purpose/benefit • Justification for why the project cannot proceed without public assistance via tax abatement • Preserves or enhances the quality, aesthetics and management of workforce/ affordable housing in the community • Projects that are approved for abatement by another local taxing jurisdiction(i.e., Dakota County or a local school district) Proposed Procedure for Tax Abatement The procedure for reviewing of an application includes the following: 1. The City shall require a deposit in the amount of$ ($200?) from the applicant to investigate the feasibility of providing assistance to the applicant. Reimbursement is permissible under MN Statutes. 2. The applicant must submit the following forms and documentation at time of application for the application to be complete and review of the application to begin: • Request for Financial Assistance Form(Attachment A) • Fundability Guidelines for Financial Assistance Form(Attachment B) • Project Pro Forma Documentation(Developed by Applicant) 3. For the purposes of reviewing the proposal,the developer must provide any requested market, financial, environmental, or other data requested by the City or its consultants. 4. After recommendation of the EDA,the City Council must hold a public hearing on the tax abatement, after notice is published in the local newspaper. An agreement shall be approved that will specify the terms of the abatement. Business Incentive Program Staff is providing an example of a Business Incentive Program(Ex. D)that would allow funding from the EDA budget for new or existing businesses locating or expanding within the City. The following are requirements for applying for a business incentive: 1. The EDA and City Council will consider providing a business incentive to facilitate construction of a new building or the locating of a new(expanded?)business into commercial and industrial space within the City limits of Farmington, Minnesota for the public purpose of creating new jobs and employment opportunities in the community. In establishing this program,the City seeks to: • Increase the number of local jobs in the community. •Provide employment opportunities for Farmington residents. • Expand the municipal tax base. 2. This program is primarily targeted to small businesses and is envisioned to be undertaken on a pilot basis and will be subject to review by the Economic Development Authority and City Council. 3. Maximum funding amounts are determined based on evaluation of positive economic impact and the number of full-time or full-time equivalent jobs to be located(or retained?)within the City of Farmington. Funding amounts will range from$ ($1,000?)to a maximum$ ($7,500?)per business which is funded annually at$ ($25,000?). The EDA and City Council considers requests on a case by case basis in accordance with the guidelines which follow. 4. Eligible Businesses: • Must be a for profit business. • Must currently be located outside the Farmington city limits or starting up in Farmington as of , and will be starting business operations in the City. •Must be constructing,purchasing or leasing commercial or industrial space or land in Farmington. •Must be located in an area of Farmington that is currently not part of an existing tax increment finance district or abatement district. 5. Ineligible Projects: Business incentive assistance will not be provided to projects that: •Are not a for-profit business. •Are currently operating, under construction, or under contract by purchase agreement or lease agreement to locate to in the City of Farmington. • Are located in a current tax increment fmance district or tax abatement district. • Place extraordinary demands on City services. • Continue and/or expand a nonconforming use. • Conflict with significant City redevelopment priority projects. • Have outstanding and/or unresolved City Code violations. •Are not in accordance with the appropriate City zoning and use requirements. • Involve business activities that are inconsistent with the EDA's goals, including, but not limited to, sexually oriented businesses,pawn shops,tattoo parlors, off sale liquor stores,tobacco shops, gun shops, check cashing businesses or those considered to create environmental problems due to the type of operation or processes involved in the business operation. 6. Application Procedure: A) Contact appropriate City staff to discuss the scope of the new projects. The request will be reviewed by City staff on a preliminary basis as to the conformity with the program guidelines and policies. B) If the project, in staff's judgment, appears to meet the program's objectives,the applicant may elect to file a formal application for a Business Incentive with the City and provide the required additional documentation. C) The application will be brought forward to the Economic Development Authority,to review the positive impact of the new(existing business?) and make a recommendation on the amount of incentive for the project($ ($1,000)to a maximum_ ($7,500) per business). D) Following the recommendation of the EDA,the application will be scheduled for the next applicable City Council meeting, at which time the City Council will make the final determination on whether a Business Incentive is appropriate and approve or deny the application and agreement. ACTION REQUIRED Staff is requesting that the current EDA review the information and suggest comments. The comments will be discussed at the February 20, 2013 and February 25,2013 meetings. Respec s 01,1111 ,011r:44". °eemic', ''P1. - AICP, CNU-A CITY OF FARMINGTON, MINNESOTA Business Subsidy Policy SECTION 1. PURPOSE OF POLICY. The purpose of this Business Subsidy Policy (the "Policy")is to establish criteria by which the City of Farmington,Minnesota(the"City")may grant a business subsidy to a business (a"Business Subsidy"), as defined in Minnesota Statutes, Section 116J.993, subdivision 3. This policy sets forth the criteria to be considered by the City in awarding a Business Subsidy in compliance with Minnesota Statutes, Sections 1161993 to 116J.995 (the"Act"). The City may deviate from this Policy only by documenting in writing the reason for deviation and attaching a copy of such documentation to its annual report to the Department of Trade and Economic Development, as provided in the Act. SECTION 2. PUBLIC PURPOSES. A Business Subsidy granted hereunder must meet one or more of the following public purposes: A. To redevelop blighted or under-utilized areas of the City. B. To provide for or promote housing for persons and families of low and moderate incomes within the City. C. To provide for mixed-income housing developments within the city. D. To promote neighborhood stabilization and revitalization by the removal of blight and the upgrading in existing housing stock in residential areas of the City. E. To create additional job opportunities within the City. F. To retain local jobs in the City,where job loss is specific and demonstrable. G. To enhance the economic diversity of the City and to provide essential products and services within the City. A Business Subsidy shall not be granted hereunder merely because it is found that the granting of the Business Subsidy will result in an increase in the tax base of the City. SECTION 3. MANDATORY MINIMUM CRITERIA. Any project for which a Business Subsidy is granted by the City shall meet the following mandatory minimum criteria: A. Where the public purpose of a project is the creation of additional jobs in the City,the project receiving business assistance must create a minimum of 1 new full-time equivalent(FTE)job in the community,with a minimum wage of at least 125%of the ' prevailing federal minimum wage. B. Where the public purpose of a project is the retention of existing jobs in the City,the party requesting the Business Subsidy shall provide evidence that the loss of jobs in the City is imminent in the absence of the granting of the Business Subsidy. C. Any party requesting a Business Subsidy must be able to demonstrate successful general development capability, as well as specific capability in the type and size of development proposed. D. All project proposals shall, in the opinion of the City Council, optimize the private development potential of a site. E. The project must meet the"but for"test,meaning that but for the Business Subsidy requested, it would not be financially feasible for the project to proceed in the manner as proposed. F. The project must not generate significant environmental concerns in the opinion of local, state or federal governmental units. G. The project must be in accordance with the comprehensive plan,zoning, redevelopment plans, and policies of the City. SECTION 4. AWARD OF BUSINESS SUBSIDY. A project meeting the above criteria will not automatically be approved for a Business Subsidy. Meeting such criteria creates no contractual rights on the part of any party seeking a Business Subsidy. A Business Subsidy shall be provided within applicable state and local legal requirements. In granting a Business Subsidy, the City shall enter into an agreement with the recipient that provides the information,wage and job goals, commitment to provide necessary reporting data, recourse for failure to meet such goals, and other covenants, as required by the Act. (PROPOSED) BUSINESS SUBSIDY POLICY Fr I. PURPOSE AND NEED FOR POLICY This policy provides the criteria for Tax Abatement. The business subsidy criteria included in this policy applies to all potential business subsidy recipients. In addition to this policy, every business subsidy will be subject to the requirements of Minnesota (MN) Statutes. II. POLICY A. Every business subsidy shall be subject to the requirements of MN Statutes governing business subsidies and every business subsidy shall be evaluated according to the criteria included in this Business Subsidy Policy, which shall apply to all potential recipients. Wherever the term business subsidy is used in this policy, its definition shall be that as defined in MN Statutes. B. A business subsidy must meet a public purpose. The City of Farmington (City Council) and Farmington Economic Development Authority (EDA) shall consider using business subsidies to assist private development projects in an attempt to achieve one or more of the following public purpose objectives: to retain local jobs and/or increase the number and diversity of jobs; enhance and diversify the City's tax base; encourage additional unsubsidized private development in the area, either directly or indirectly, through "spin off" development; achieve development on sites that would not be developed without business subsidies assistance; remove blight and/or encourage development of commercial and industrial areas in the city that result in higher quality development or redevelopment and private investment; and offset increased costs of development of specific properties when the unique physical characteristics of the site may otherwise preclude private investment. C. A business subsidy must result in wage increase or the creation or retention of jobs, which will pay at least 125-percent of the federally imposed minimum hourly wage, exclusive of benefits, with the wage goals specifically set forth in the business subsidy agreement. The wage goals will be determined as a weighted average on new jobs created as defined in the City of Farmington Fundability Guidelines for Financial Assistance Form. D. In lieu of job creation or retention, other measurable, specific, and tangible goals shall be established. Examples of tangible goals may include redevelopment, or pollution or soil remediation. E. If wage increase or job creation or retention is identified as the public purpose, goals must be established for wage increase or the number of jobs created; in cases where job loss is specific and demonstrable, goals must be established for number of jobs retained. As set forth in the business subsidy agreement, wage increase or job creation or retention (based on wage floor set forth in the agreement) shall be attained within two years of the benefit date. F. The business subsidy agreement must stipulate that the recipient will continue operations at the site where the subsidy is used for at least three years after the benefit date. 1/22/13 G. Any development agreement for public assistance as defined in MN Statutes shall contain,-at a minimum, the following provisions: Description of the subsidy including the amount and type of subsidy Statement of public purposes for the subsidy in addition to tax base increase 3. Identification of measurable, specific, and tangible goals for the subsidy 4. Description of the financial obligation of the recipient if the goals are not met 5. Statement of why the subsidy is needed 6. Statement of commitment to continue operations for at least five years in the jurisdiction where the subsidy is used - the five year commitment may be waived if the grantor, after a public hearing, approves the recipient's request to move 7. Identification of the name and address of the parent corporation of the recipient 8. Identification of all financial assistance by all grantors for the project; and reporting requirements 9. Identification of specific wage floor for the wages to be paid, if job creation or retention is a goal, of at least the minimum set forth in Item C of this policy, and for at least two years after the benefit date or until the goals are met, whichever is later J. When granting a business subsidy, the City Council or the EDA may deviate from the criteria in this Policy by documenting in writing the reason for the deviation and filing that explanation with the Department of Employment and Economic Development along with the grantor's next annual report on business subsidies. The City Council and the EDA will not approve a deviation from these criteria unless the applicant provides a written request describing why the deviation is needed to permit the proposed project to proceed, and the grantor determines in its sole discretion that such deviation is reasonable and necessary. K. Each business subsidy agreement will require a recipient failing to meet the specified goals by the specified date to pay back the assistance plus interest, or at the request of the City Council and the EDA, to the account created under MN Statutes, Section 1163.551. Any repayment shall be prorated to reflect partial fulfillment of goals. The interest rate shall be set at no less than the implicit deflator as defined by MN Statutes, Section 1163.994, Subdivision 6. The City Council, upon recommendation by the EDA, may after a public hearing, extend the period for meeting job and wage goals for up to one year. The City Council and the EDA may extend the period for meeting any other goals for any period specified by the City Council and the EDA, by documenting in writing the reason for the extension and filing that explanation with the Department of Employment and Economic Development along with the grantor's next annual report on business subsidies. L. The City Council and the EDA reserve the right to modify this Policy, from time to time in accordance with MN Statutes. M. The following supplemental policies are attached hereto and made part of the Business Subsidy Policy: - Attachment 1: Tax Abatement Policy III. PROCEDURE To the extent that a business subsidy requires tax abatement assistance, it must meet this Business Subsidy Policy and the Tax Abatement Policy. Any other business subsidy must meet this Business Subsidy Policy. 1/22/13 IV. RESPONSIBILITY AND AUTHORITY The responsibility and authority for the City Council or the EDA to adopt a Business Subsidy Policy is established by MN Statutes 1167.993-995, which sets requirements for subsidies allocated to businesses by state or local government agencies. Administrative implementation of this policy shall be the responsibility of the City Planner/Economic Development. Submitted by_ Reviewed by: This policy replaces the policy adopted by City Council Resolution No. on 1/22/13 (PROPOSED) TAX ABATEMENT POLI 4" I. PURPOSE AND NEED FOR POLICY This policy is to serve as a guideline for the use of tax abatement as a financing tool for projects within the City of Farmington. II. POLICY General Policy Background The City of Farmington City Council and Economic Development Authority recognize that local government plays a critical role in enhancing the vitality of our community. This is particularly true as the city reaches full development. It is the stated goal of the City Council and the EDA that all reasonable means shall be utilized to leverage private development and redevelopment in the city consistent with the policies described below and the City Council's Ends and Outcomes. Under Minnesota (MN) Statutes, the City Council is the governing body that must act to approve all tax abatement assistance. It is the policy of the City Council, that for most projects, the EDA shall be asked to make recommendation to the City Council regarding tax abatement assistance. The tax abatement tool provides the ability to capture and use all or a portion of the property tax revenues within a defined geographic area. In practice, it is a tax "rebate" rather than an exemption from paying property taxes. Tax abatement is an important economic development tool that when used appropriately can be useful to accomplish the city's development and redevelopment goals and objectives. Requests for tax abatement must serve to accomplish the city's targeted goals for development and redevelopment. These goals include, but are not limited to projects that will result in the creation or retention of a significant number of jobs that pay wages adequate to support households, projects that will assist with the retention and expansion of businesses, bring technology (fiber to the premise) as part of redevelopment and projects that will expand the city's tax base. Projects must meet the requirements established by the Business Subsidy Policy of the City Council and the EDA, to the extent it is applicable, in order to receive abatement. Projects Eligible for Tax Abatement Assistance Projects eligible for consideration of property tax abatement include but are not limited to the following: • Mixed use projects including new and redevelopment projects • Commercial and industrial redevelopment projects • Commercial and industrial new developments • Residential business properties (with some restrictions as defined in this policy) Tax Abatement Objectives A. A property tax abatement must meet at least one of the following public purposes: 1. Increase or preserve the tax base 2. Provide employment opportunities in the City of Farmington 3. Provide or help acquire or construct public facilities 4. Help redevelop or renew blighted areas 1/22/13 5. Help provide access to services for residents of Farmington 6. Finance or provide public infrastructure B. Projects that include fiber to the premise are deemed to be fulfilling an overall objective of the city to have sites with the best technology available. C. The developer/landowner shall be able to demonstrate a market demand for a proposed project. D. Tax abatement shall not be used for projects that would place extraordinary demands on city services or for projects that would generate significant environmental impacts. E. Because it is not possible to anticipate every type of project, which may in its context and time present desirable community building, development, or redevelopment goals and objectives, the City of Farmington retains the right in its discretion to approve projects and tax abatements that may vary from the principles and criteria of this policy. Determination of Amount of Assistance Tax abatement assistance available shall generally be limited to the incremental taxes generated on the improvements to the property. The City Council and the EDA may consider a greater level of financial assistance, up to the maximum allowed under MN Statutes, in limited circumstances. The level of assistance will be evaluated on a case-by- case basis and may reflect an increase or decrease in requested financial assistance from the applicant. The amount of tax abatement assistance provided to an applicant shall be based on a review of the following: • Request for Financial Assistance Form (Attachment A) • Review of Applicants Pro Forma • Amount of Increment (Property Tax Revenue) Generated by the Project • Fundability Guidelines for Financial Assistance Form (Attachment B) In any year, the total amount of property taxes abated (citywide) may not exceed (1) ten percent of the - 10% of the net tax capacity for the taxes payable year to which the abatement applies, or (2) $200,000, whichever is greater, provided that these limitations are imposed by Minnesota Statues Section 469.1813, subd 8, and if such limitations are increased by any future legislation, the City may approve abatements up to the maximum amount permitted by law at the time the abatement is approved. The limit does not apply to an uncollected abatement from a prior year that is added to the abatement levy. The developer/landowner must adequately demonstrate, to the City's sole satisfaction, an ability to complete the proposed project based on past development experience, general reputation, and credit history, among other factors, including the size and scope of the proposed project. The developer/landowner must provide adequate financial guarantees to ensure completion of the project, including, but not limited to: assessment agreements and letters of credit. Forms of Assistance Tax abatement shall generally be provided on a "pay-as-you-go" basis wherein the City compensates the applicant for a predetermined amount for stated number of years. In 1/22/13 all cases, semi-annual abatement payments are based on available (as approved by agreement) tax revenue from the property and issued to the applicant after payment of property taxes by the applicant. Another form of assistance that shall be considered only in extraordinary circumstances is an "up-front payment" to the applicant. This may be in the form of a revenue or general obligation bond or an internal loan. (The City would consider revenue bond financing where the terms of the financing are satisfactory to the City.) The tax abatement generated from the applicant's project is a source of revenue for repayment of the bonds or loan. This form of assistance is not one the City will generally consider because under this form of assistance the taxpayers assume the risk that the tax increment will be sufficient for repayment of the bonds or the interfund loan. Duration and Restrictions A. The City may grant an abatement for a period no longer than 20 years, except as provided under (B). The City may specify in the abatement resolution a shorter duration. B. The City may not enter into a property tax abatement agreement that provides for abatement of taxes on a parcel, if the abatement will occur while the parcel is located in a tax increment financing district. C. Tax Abatement consideration for residential properties: If a request for abatement includes redevelopment of residential property, consideration shall be given to the following: • Redevelopment of rental housing that is over 25 years old • Mixed use development that includes housing (must be owner occupied) • The case made for the overall public purpose/benefit • Justification for why the project cannot proceed without public assistance via tax abatement • Preserves or enhances the quality, aesthetics and management of workforce/ affordable housing in the community • Projects that are approved for abatement by another local taxing jurisdiction (i.e., Dakota County or a local school district) III. PROCEDURE The City shall require a deposit in the amount of $ ($2,000?) from the applicant to investigate the feasibility of providing assistance to the applicant. If the City incurs additional expense beyond the $ prior to execution of the Developer's Agreement, the City shall notify the applicant in writing and the applicant must deposit additional funds for work on the application to continue. If the project is approved and the applicant proceeds with the project, the applicant's deposit may be reimbursed to the extent permissible under MN Statutes. The applicant must submit the following forms and documentation at time of application for the application to be complete and review of the application to begin: 1. Request for Financial Assistance Form (Attachment A) 2. Fundability Guidelines for Financial Assistance Form (Attachment B) 3. Project Pro Forma Documentation (Developed by Applicant) 1/22/13 For the purposes of underwriting the proposal, the developer must provide any requested market, financial, environmental, or other data requested by the City or its consultants. After recommendation of the EDA, the City Council must hold a public hearing on the tax abatement, after notice is published in the local newspaper. An agreement shall be approved that will specify the terms of the abatement. IV. APPENDICES The City and the Authority shall add Appendices to this Policy to provide targeted policy guidance concerning the use of tax abatement assistance for a targeted development or redevelopment purpose. An Appendix shall be added, modified, or deleted from time to time based on actions of the City Council and the EDA. V. ATTACHMENTS: FORMS The following forms are referenced in this policy and are included as attachments to this policy. A. Request for Financial Assistance Form B. Fundability Guidelines for Financial Assistance Form VI. RESPONSIBILITY AND AUTHORITY MN Statutes, Sections 469.1812 through 469.1815, authorizes a political subdivision to utilize property tax abatement on certain parcels of land within its boundaries. Administrative implementation of this policy shall be the responsibility of the City Manager. Submitted by: Reviewed by: This policy replaces the policy adopted by City Council Resolution No. on 1/22/13 ATTACHMENT A: FORM REQUEST FOR FINANCIAL ASSISTANCE FORM CITY OF BURNSVILLE AND BURNSVILLE ECONOMIC DEVELOPMENT AUTHORITY REQUEST FOR FINANCIAL ASSISTANCE TAX INCREMENT FINANCING(TIF) OR TAX ABATEMENT FORM FOR NAME OF APPLICANT 1/22/13 ATTACHMENT A: CITY OF FARMINGTON REQUEST FOR FINANCIAL ASSISTANCE FORM REQUIRED INFORMATION 1. Provide a brief project description 2. Provide business information Business Name: Address: Telephone: Contact Name: 3. Provide brief description of the business 4. Provide information on the present ownership of the site Name: Address: Phone Number: Contact Name: 5. Provide information on the proposed project Building square footage: Size of property: Description of building: Materials and other additional relevant building information: 6. Provide total estimated project costs LandAcquisition $ SiteDevelopment $ BuildingCost $ Equipment $ Architectural & Engineering Fees $ Legal Fees $ Financing Costs $ Broker Costs $, Contingencies $ Other (please specify) $ Total $ 7. Describe amount and purpose for which tax abatement financing is required 8. State specific reasons why the use of tax abatement assistance is necessary for the project (the "but for" test) 9. List project costs that may be eligible for assistance. Costs that may be eligible for assistance include: 1/22/13 - Utilities Design - Site Related Permits - Architectural And Engineering Fees - Soils Correction Directly Attributable To Site Work - Earthwork/Excavation - Utilities (Sanitary Sewer, Storm Sewer and Water, fiber to the premise) - Landscaping - Parking Lot Paving and Parking Lot Lights - Streets And Roads - Sidewalks - Curb And Gutter - Special Assessments - Land Acquisition - Legal Costs Associated With Financing/Closing Attributable To Site - Legal Costs Associated With - Surveys Acquisition - Soil Tests And Environmental - City/Met Council SAC and WAC Studies Charges - Title Insurance - Application Deposit - Landscape Design 10.Provide market value information Current market value (from Dakota County Assessor): $ Proposed market value at completion: $ 11. Provide real estate property tax information Existing real estate taxes of property: $ Estimated real estate taxes of property upon completion: $ 12.Provide source of financing information Equity $ BankLoan $ Tax Abatement assistance $ Revenue Bonds $ Other $ Total $ 13. Provide name and address of architect, engineer, and general contractor for the project 14.Provide project construction schedule Estimated construction start date: Estimated construction completion date: If phased project: Year % Complete Year % Complete 1/22/13 15.Describe how the project will meet one or more of the following City Council and EDA goals (in addition to increasing tax base). Please provide measurable, specific, and tangible goals. Goals may include the following: increased wages; creation of jobs that pay wages adequate to support households; and/or job retention where job loss is specific and demonstrable; and/or development or redevelopment projects that are consistent with the City of Farmington's goals and objectives. 16.Provide a reference from another municipality (if applicable) 17.Provides names of any other municipalities wherein the applicant, or other corporations the applicant has been involved with, has completed developments within the last five years 18. Provide the following required supplemental information: - Project Pro Formas (one showing with assistance and one without assistance) - Legal description of the property - Application fee $ - Site plan and building rendering SUBJECTIVE ANALYSIS In addition to the required information from above (items 1-18), the following information is requested and will be considered as part of the application approval process: 20.Provide number of years in business 21. Provide number of years located in the City of Farmington (if applicable) 22.Describe potential for business growth or future development 23.Explain whether the building will be owner-occupied (Yes/No) 24.If rental space, provide the targeted retail rates 25.If building is non-owner occupied, explain whether the lessee will be required to capitalize this lease 26.Provide land costs per acre or square foot 27.Describe the location of proposed facility within Farmington 28.Describe the general quality of the development 29.Provide the size of parcel being developed 30.Provide the projected building cost per square foot 31.Additional comments 1/22/13 ATTACHMENT B: FUNDABILITY GUIDELINES FORM 1. Ratio of Public versus Private Investment $ Private Investment $ EDA/Public Investment $ Total Investment Ratio of public versus private investment Point Value Private Public +1 Less than $3 To $1 +2 Over $3 To $1 +3 Over $4 To $1 +4 Over $6 To $1 +5 Over $8 To $1 2. Number of Current and Estimated New Employees Point Value Number +1 1 - 15 +2 > 16 - 30 +3 > 31 -45 +4 > 46 - 75 +5 > 75 Plus *Current Number of Employees *Estimated New Employees (within next 2 - years) Total Number of Current and Estimated New Employees *Employees should be computed as full-time equivalent positions 3. Public Investment Per Current Employees Point Value Investment 0 $7,500+ +1 $6,000 - $7,500 +2 $4,500 - $6,000 +3 $3,000 - $4,500 +4 $1,500 - $3,000 +5 $ 0 - $1,500 Public Investment (Tax Abatement/Tax Increment) $ *Current Number of Employees $ Investment Per Employee = $ *Employees should be computed as full-time equivalent positions 1/22/13 4. Pay Level of lobs Created Point Pay Dollar Total Weighted Value Range Weighting Employees Dollar Amount 0 $0 - 14,999 $10,000 $ +1 $15,000 - 24,999 $20,000 $ +2 $25,000 - 29,999 $27,500 $ +3 $30,000 - 44,999 $37,500 $ +4 $45,000 - 59,999 $52,000 $ +5 $60,000 and Over $60,000 $ *TOTAL $ WEIGHTED AVERAGE = $ *Employees should be computed as full-time equivalent positions. New Employees over and above the number required to be added shall be exempt from this section. 5. Real Estate/Property Taxes Generated Point Value *Projected Tax Revenues + 1 Below $25,000 +2 $ 25,000 - $49,999 +3 $ 50,000 - $99,999 +4 $100,000 - $249,999 +5 $250,000 and Over Projected Tax Revenues $ *Projected Tax Revenues should be based on the existing property tax system and rates plus legislative future changes if subject to estimation. 6. Service Impact Point Value Type of Development +1 Retail +2 Office Warehouse +3 Office +4 Mixed Use +5 Hi-Tech/Manufacturing +2 Installation of fiber to the premise Type of Use 7. Redevelopment Age Multiplier Point Value Age of Building 1.0 New Development 1.0 0 - 5 Years Redevelopment* 1.1 6 - 10 Years Redevelopment* 1.2 11 - 15 Years Redevelopment* 1.3 16 - 20 Years Redevelopment* 1.4 21 - 25 Years Redevelopment* 1.5 26+ Years Redevelopment* * Redevelopment is defined as the development of a property again to a better condition. 1/22/13 8. Significant Impact Multiplier Point Value Type of Use 3.0 Mixed Use New Development or Redevelopment 2.5 Commercial/Industrial Redevelopment 2.0 Industrial New Development 1.5 Commercial New Development WORKSHEET SUMMARY Worksheet Breakdown Total Points 1. Ratio of Public versus Private Investment (1 to 5) 2. Number of Current and Estimated New Employees (1 to 5) 3. Public Investment per Current Employee (0 to 5) 4. Pay Level of Positions (0 to 5) 5. Real Estate/Property Taxes Generated (1 to 5) 6. Service Impact (0 to 5) SUBTOTAL Multiplier's 7. Redevelopment Age Multiplier (1.0 to 1.5) 8. Significant Impact Multiplier (1.5 to 3.0) TOTAL SCORE * To determine the total score multiply the Subtotal x Redevelopment Age Multiplier x Service Impact Multiplier. The information provided herein is true and accurate to the best of my knowledge: (Signature) (Date) 1/22/13 Fundability Rating for Tax Abatement The total score on the project analysis sheet on previous page determines the general term of assistance. The City Council and EDA will make any final decision on term. Point Value Term of Assistance* 0 - 25 O Years 26 - 35 3 Years 36 - 45 5 Years 46 - 59 7 Years **60 and over 10 Years * Assistance amount will be the incremental taxes only. ** The City Council and EDA may consider between 15 - 20 years for projects that score 60 and over. 1/22/13 DRA CITY OF FARMINGTON Pr Economic Development Authority - Business Incentive Program (PROPOSED) Program Purpose: To attract new(existing?)businesses to Farmington whose local operations will do the most to expand the City's economy and job base. How the Program Works: The program uses a two-tiered evaluation process to: first determine eligibility for incentive financing; and second,to determine the amount of program funds for which a business may be eligible. The maximum amount of funding for this program is$ , and will be provided through the Economic Development Authority Business Incentive Fund,which is specifically reserved for economic development activities. Objectives: The EDA and City Council will consider providing a business incentive to facilitate the locating of a new(expanded?)business into commercial and industrial space within the City limits of Farmington, Minnesota, and for the public purpose of creating new jobs and employment opportunities in the community. In establishing this program, the City seeks to: • Increase the number of local jobs in the community. • Provide employment opportunities for Farmington residents. • Expand the municipal tax base. This program is primarily targeted to small businesses and is envisioned to be undertaken on a pilot basis and will be subject to review by the Economic Development Authority and City Council. Amount Available: Maximum funding amounts are determined based on evaluation of positive economic impact and the number of full-time or full-time equivalent jobs to be located(or retained?)within the City of Farmington. Funding amounts will range from ($1,000)to a maximum ($7,500)per business which is funded annually at $25,000. The EDA and City Council considers requests on a case by case basis in accordance with the guidelines which follow. Eligible Businesses: • Must be a for profit business. • Must currently be located outside the Farmington city limits or starting up in Farmington as of , and will be starting business operations in the City. • Must be constructing,purchasing or leasing commercial or industrial space or land in Farmington. • Must be located in an area of Farmington that is currently not part of an existing tax increment finance district or abatement district. 1 Eligible Project Costs: The applicant is asked to specify what business related expenses the incentive will be used for in the application materials and provide documentation that the funding was used for the identified purpose. Ineligible Projects: Business incentive assistance will not be provided to projects that: • Are not a for-profit business. • Are currently operating,under construction, or under contract by purchase agreement or lease agreement to locate to in the City of Farmington. • Are located in a current tax increment finance district or tax abatement district. • Are currently located and operating in the City of Farmington. • Place extraordinary demands on City services. • Continue and/or expand a nonconforming uses. • Conflict with significant City redevelopment priority projects. • Have outstanding and/or unresolved City Code violations. • Are not in accordance with the appropriate City zoning and use requirements. • Involve business activities that are inconsistent with the EDA's goals, including,but not limited to, sexually oriented businesses,pawn shops,tattoo parlors, off sale liquor stores, tobacco shops, gun shops, check cashing businesses or those considered to create environmental problems due to the type of operation or processes involved in the business operation. Desired Qualifications: Preference will be given to projects that: • Provide significant new employment opportunities in the City of Farmington,with an emphasis on quality wages and benefits. • Are in accordance with the highest and best use of the property. • Reduce demands on City services(i.e. Public Safety). • Fill an unmet market need. • Are providing significant investment into the commercial or industrial space in the city. Application Procedure: 1. Contact appropriate City staff to discuss the scope of the new projects. The request will be reviewed by City staff on a preliminary basis as to the conformity with the program guidelines and policies. 2. If the project, in staff's judgment, appears to meet the program's objectives,the applicant may elect to file a formal application for a Business Incentive with the City and provide the required additional documentation. 3. The application will be brought forward to the Economic Development Authority,to review the positive impact of the new(existing business?) and make a recommendation on the amount of incentive for the project($ ($1,000)to a maximum ($7,500) per business). 4. Following the recommendation of the EDA,the application will be scheduled for the next applicable City Council meeting, at which time the City Council will make the fmal determination on whether a Business Incentive is appropriate and approve or deny the application and agreement. 2 Approval Process: The City Economic Development Authority will review applications and make a recommendation to the City Council for their consideration. The Farmington City Council will have the final authority of whether to approve an application. Disbursement: • Payment of the approved incentive will be calculated by City staff upon verification of payment of the business's property taxes(land and improvements), and the business providing verification that employment numbers were created. • The calculation will be based upon the taxes actually paid by the business, according to County tax records, or if a lessee, upon the property tax figure delineated in the signed lease agreement between the property owner and the business (if less than the actual property taxes). • The business incentive will be paid out as funds are available. . • Funds will be disbursed to the business upon verification of creation and maintaining job levels during the time frame as agreed to by the business and City Council. Reauthorization: The Business Incentive Program is envisioned as a pilot and will commence for two years after Council approval and will be reviewed by the EDA and City Council if all the funding has been expended or the end date has been reached.No additional funds will be spent without City Council reauthorization. 3 Farmington Business Incentive Program Application Applicant Information Name Address City State Zip Phone Number Fax Number Name of Principle in Contact Email Address Type of Business/Date Established Tax ID Number Project Information Business Name New Farmington Street Address Prior Street Address City State Zip * Note: This program is only available to businesses locating to Farmington that are not currently under a tax increment fmance district or abatement district. 4 City of Farmington, MN Business Incentive Program Application* Background Information Please describe how this program will help your business? When was your company established? If you are not the original owner,when did you gain control of your business? What products or services to you sell? Please explain why the assistance is necessary to locate or build in Farmington? How will moving into Farmington affect your business? Please describe any other economic/social impacts this project is likely to have on the community? 5 Employment Information How many full-time equivalent positions (FTE's) and part-time positions do you currently employ at your business? If a start up business,how many FTE's or part time positions do you plan to employ? Current FTEs Current Part-time: Start Up: Anticipated FTE: Anticipated Part-time: Do you plan to add any new additional FTE's at your new location in Farmington, if so, how many? FTE: Part-time: What is the wage level for FTE's and any part time employment? FTE: Part-time: PLEASE COMPLETE THE APPLICATION AND PROVIDE THE FOLLOWING FOR PROGRAM VERIFICATION 1. A copy of the existing or proposed purchase agreement or lease agreement in Farmington. 2. Documentation verifying for-profit business. 3. Evidence of previous location outside of Farmington or recent start up documentation. 4. Evidence of employment information for your business including verification of full time jobs. 5. If applicable, employment and lease verification upon the terms of the business assistance agreement. 6. General information on why the subsidy is needed. I certify that the statements contained in this information and information provided is true and complete to the best of my knowledge and behalf. Applicant's Signature Date Please return to Lee Smick, City of Farmington. 430 Third Street, Farmington,MN 55024 For more information,please call (651) 280-6820 or lsmick @ci.farmington.mn.us 6 �E� i ow:,i , City of Farmington 430 Third Street x„g Farmington,Minnesota • X16 651.280.6800•Fax 651.280.6899 .•A MOO www.cilarmington.mn.us TO: EDA Members FROM: Lee Smick,AICP,CNU-A City Planner SUBJECT: Bank Summit Date and Information DATE: January 28,2013 INTRODUCTION/DISCUSSION On October 22,2012,the EDA discussed the possibility of holding a"Bank Summit"for area Banks to discuss types of business incentives offered in other communities in the metro. Staff is proposing to hold the Bank Summit on March 20,2013 at City Hall at 2:00 PM or 6:00 PM. Banks invited include:Anchor Bank-Farmington,Castle Rock Bank,Premier Bank,and Roundbank. The list of types of incentives includes the following: 1. Tax Increment Financing 2. Tax Abatement 3. Commercial Rehabilitation 4. Hastings Industrial Park Land Credit Program 5. Gap Rehab Loan Program 6. Commercial Matching Rehab Loan 7. Façade Improvement Loan Program 8. Revolving Loan Funds 9. Business Subsidy Program 10. Development Assistance 11. Entrepreneurial Fund 12. Commercial Incentives/Waiver of Fees 13. Minnesota Investment Fund 14. Small Business Development Loan Program The"Open to Business"advisor,Laurie Crow,will also be in attendance to discuss the financing available through the MCCD. This will open up discussions between the banks and Ms.Crow to possibly work together on financing programs. ACTION REQUIRED Information only. Respectful - � fitted, ee Smick,City Planne AICP,CNU-A