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11.25.13 EDA Packet
Af 1 v0qk 4S 1St 4Y&OfoRa� AGENDA REGULAR ECONOMIC DEVELOPMENT AUTHORITY MEETING NOVEMBER 25, 2013 6:30 P.M. CONFERENCE ROOM 170 Todd Larson, Chair; Geraldine Jolley, Vice-Chair Douglas Bonar, Steve Wilson, Kirk Zeaman Action Taken 1. Call Meeting to Order 2. Pledge of Allegiance 3. Roll Call 4. Approve Agenda 5. Citizen Comments/Presentations 6. Consent Agenda a) Meeting Minutes (10/28/13 Regular) Approved b) Bills: 10/28/13 — 11/24/13 Approved c) October 2013 Financial Report Information Received 7. Public Hearings 8. Continued Business a) Marketing Plan Update Information Received 9. New Business a) Adopt Resolution—Approving Second Amendment to Contract for Private Development Vinge Tile and Stone R13-01 b) Reschedule December EDA Meeting 12/16/13; 6 p.m. 10. City Staff Reports/Open Forum/Discussion a) Articles on Eagan and New Prague Information Received 11. Adjourn MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting October 28, 2013 1. CALL TO ORDER The meeting was called to order by Chair Larson at 6:30 p.m. Members Present: Larson,Bonar, Jolley, Zeaman Members Absent: Wilson Also Present: Lee Smick, City Planner; Cynthia Muller,Executive Assistant Audience: Tom Whelan, Clyde Rath, Mark Loftus, Lisa Franxman 2. PLEDGE OFALLEGL4NCE 3. ROLL CALL 4. APPROVE AGENDA MOTION by Bonar, second by Zeaman to approve the Agenda. APIF,MOTION CARRIED. 5. CITIZEN COMMENTS/PRESENTATIONS 6. CONSENTAGENDA MOTION by Jolley, second by Bonar to approve the Consent Agenda as follows: a) Approved Meeting Minutes (9/23/13 Regular) b) Approved Bills 9/23/13 — 10/27/13 c) Received August/September 2013 Financial Report d) Received CDBG Funding Report APIF, MOTION CARRIED. 7. PUBLIC HEARINGS 8. CONTINUED BUSINESS a) Marketing Plan Update Mr. Tom Whelan,Nemer Fieger, stated we are six weeks away from completion of the marketing plan. He and City Planner Smick have spent a lot of time visiting people and also attended the MNCAR meeting. Mr. Whelan noted while we will be developing key messages delivered to the right audiences via the right channels,we want to make sure we can back up our messages with the right kinds of opportunities. The county is a good vehicle for disseminating opportunities, especially through Greater MSP. They will disseminate 10 to 12 opportunities to all cities in Dakota County and you have three or four days to respond. There was a company looking for 35—40 acres. They wanted the land and improvements free and wanted tax abatements or TIF. We don't have what they needed. If we are missing opportunities and we want to pursue these things,we want to make 2 EDA Minutes(Regular) October 28,2013 Page 2 sure we have what is being asked of us. If you wait until you get the opportunity to go about getting the land that is needed to deliver on the opportunity,the opportunity will sail before you have had a chance to respond. In addition to the smaller parcels,we want to make sure we are talking with the people who have the land. We want economic development,but we don't have what is needed to deliver. City Planner Smick has talked with Mr. Murphy and Mr. Devney. The Huber property is ready to go. Mr. Brian Murphy just put in an irrigation system. Mr. Devney is not ready to do anything. They would rather make the east side of Pilot Knob available and would be open to seeing industrial rather than B-1. City Planner Smick will be contacting land owners regarding opening their properties to industrial. We have a lot of land for business opportunities with the Peterson property to the south of CR50. A family has recently bought the Wurdeman property. We have a lot of opportunity, but land owners do not want to make their land available. Mr. Murphy has stated they are always open to talking to any prospects. Mayor Larson noted if Mr. Murphy and Mr. Devney aren't ready to sell their land, may be we should look at rezoning the business flex area and look at all our zoning. Mayor Larson stated he does not care if there is someone willing or not. It is up to us as a City to say we need 50 or 100 acres, and put in the first phase of infrastructure to get things started. We can't wait for developers to come in. By the time we do that, they are here and gone. It is time for us to make the commitment. We are asking people to invest in Farmington, yet we are not willing to invest. It is time to step up to the plate. The business opportunity was discussed and members agreed their request for free land and infrastructure could not have been met. Mr. Whelan noted when the SWOT analysis was done, one thing that came up was the positive business community. If we can establish Farmington as the place where we will go to the wall to ensure you make money in your business, that is the spirit we want to have and what you will see in the final report. He and City Planner Smick attend the MNCAR(MN Commercial Association of Realtors) expo. There were three towns present, Elk River, Coon Rapids, Lakeville and Chisago County. Mr. Whelan noted Farmington does have a force in City Planner Smick. She is fearless and went up to every table and explained what Farmington is doing. These were the type of people we want to have interactions with throughout the year. They spoke with several people including Mr. Severson,the person that is selling the property for the hotel,the people from the Economic Development Association,MNCAR, Executive Director of the Shopping Center Association of MN and will be meeting with her in a couple weeks. There are several events like this where Farmington needs to have a presence, not with anything extravagant,just a good name, a face, and a card. This is a communications opportunity to all demographics and it centers around the website and making sure we have the right information there. We need to look at the kind of investments we are making in order to support the interests that we might capitalize on. 3 EDA Minutes(Regular) October 28,2013 Page 3 We need to talk to the farmers so we have some land in hand. Mr. Loftus stated you should have 10—20 acres at a minimum for one project. Mayor Larson asked if securing 50 acres and putting in infrastructure was enough. That would depend on the type of project. This project wanted 35 —40 acres which is very large. We did not miss anything with this opportunity because of how much they were requesting. Mayor Larson explained the City would pay for the infrastructure and get the money back through assessments. The company would purchase the land. He felt we need to have a street into some land to get anyone to look at us. Member Jolley asked if installing infrastructure in 100 acres is cheaper than 50 acres. Mayor Larson stated we would do it in phases by 10—20 acres. Member Bonar recalled in the past it was discussed to pave Fairgreen Avenue and allow the market to determine if they wanted to build west or east. Mayor Larson stated infrastructure would have to come from Pilot Knob. Member Bonar stated we pave Fairgreen and sewer could come from the east from Pilot Knob or from the west from the school. That is a Met council sewer line. Member Bonar asked how much land we have available today. Staff noted we 23 acres as the largest piece. In the Farmington Business Park, that is small. Mayor Larson asked staff to take the rezoning of the B-1 area to industrial to the Planning Commission. b) Open to Business Third Quarter Update Ms. Laurie Crow has been working with eight clients regarding children's fitness, service/team building, real estate,retail stationary, HVAC, and a Christian website all wanting to move into a building. There are several opportunities available for space for these clients. Ms. Crow would like to meet with local banks. It was discussed to have another bank summit in December and include Ms. Crow. Ms. Lisa Franxman, Anchor Bank, stated there are minimums when it comes to financing. Someone wanting$2,000 - $5,000 will be difficult. They can look at business loans carried by personal assets. Other options need to be discussed. Ms. Crow also would like to attend the next FBA meeting. It was asked when the hotel feasibility study would be completed. Member Zeaman heard Cobblestone was also out east making the same proposals. He cautioned to make sure they are not taking on too many projects at one time. The bank summit was discussed further. Each bank has different strengths and offerings. Mr. Rath suggesting having a list from each bank of their strengths for lending. Staff noted this was also an idea from the first bank summit. Ms. Franxman suggested bringing people in and interviewing them because it is a long term commitment on both ends and they can get different views from the banks. Banks do participate with each other on very large projects. Some banks have a list of participating banks and there is some loyalty there. Ms. Franxman is on the Chamber Board and a couple members went to the industrial park. One business is looking to expand. They have a building in 4 EDA Minutes(Regular) October 28,2013 Page 4 Indiana that is half vacant, so they are trying to decide whether to move or expand their building here. We need to stay in front of that. The Chamber wants to set up an industrial park meeting for members and non-members because they had some good concerns. They discussed different rules they have for items such as drainage. The Chamber wanted to find out what their issues are and the City would be a part of that. Part of the marketing plan is to retain what we have. 9. NEW BUSINESS 10. CITY STAFF REPORTS a) Business Visits Staff and EDA members went to Kemps, Dakota County Lumber and Carbone's. Kemps has an issue with the landlord of their distribution center because of drainage from salt storage from another business. Kemps has spoken with the landlord,but the issue remains. Staff will check on this. There could be a ground water concern. The visit to Dakota County Lumber was a little premature as they are in the middle of construction. They had a concern with the small size of their pylon sign. If they decided to expand further,they would build a second site in Farmington. Carbone's business is doing good and growing slowly. Staff is trying to schedule more business visits in a couple weeks,perhaps at Peerless Plastics. DEED has a Made in MN website to find MN made products. Staff will forward the website to the EDA. Mayor Larson noted Anytime Fitness is finishing their expansion and would like a ribbon cutting. b) Job Creation Fund This is a$30 million fund,the maximum available is $1 million. It is a loan opportunity. The Job Creation Fund is an award where the company has to invest $500,000 in a capital investment for building costs, building rehabilitation, labor, expansion or construction of a building. It is not available for building or land acquisition. The applicant would have to retain 200 jobs and create ten new jobs. This is another tool that will be available January 1, 2014. Member Zeaman noted the American Express Small Business Saturday is November 30, 2014. We need ten qualifying businesses to get the package and then American Express will send us material to help promote the small business program. Dunn Bros. and Ground Round will participate. Card holders need to register their card and if they go to one of these businesses that take American Express, they get$20 credit on their card. This is focused on small businesses. 5 EDA Minutes(Regular) October 28,2013 Page 5 Member Zeaman would like to discuss some of the projects we have underway. The owner of the former Oasis Market has work underway. He would also like to know how things are going for Baldy's BBQ as the EDA made investments in both those places. Mayor Larson was at Baldy's BBQ, and things are going well for them. City Planner Smick stated at the former Oasis Market,the north side will be office space;the middle will be a dollar store, and the south side will be a tobacco shop with license approval. He would also like to open a light auto repair, lube shop in the car wash area. He will need a CUP for this as it is close to residential. Member Zeaman has seen a fair amount of traffic accidents on TH3. He asked if the City could do some sort of traffic control at TH3 and Vermillion River Trail to slow the traffic down. He has seen at least four accidents where people stop to make a left turn and are rear ended. Staff will look into this. Member Zeaman stated there are two new tenants looking at the building, so traffic will increase in that area. Mayor Larson was in a video for the Yellow Ribbon Network for their five-year anniversary. The Governor will be attending the event. He was informed the video is going to the White House and their goal is to get Mrs. Obama to come to Farmington. Member Zeaman noted the Ground Round will be offering free meals to veterans on Veteran's Day. Mr. Rath stated Superintendent Haugen wants to have a meeting with the EDA and the school district at the high school. He asked if that has been discussed further. Mayor Larson stated he was giving Superintendent Haugen some time as he has been out and has other things to discuss with him. 11. ADJOURN MOTION by Jolley, second by Zeaman to adjourn at 7:30 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 6 R55CKS2 LOGIS600 CITY OF FARMINGTON 11/21/201310:49:25 Note: Check Amount may not reflect actaul check total due to sequence of data Council Check Summary Page- 1 10/28/2013- 11/24/2013 Check# Date Amount Supplier/Explanation PO# Doc No Inv No BU Obj Sub Subledger Account Description BU Description Co Dept Div 126266 11/22/2013 100263 CAMPBELL KNUTSON 87.00 OCT13 EDA LEGAL SRVS-NON RET 123722 1852-000G OCT13 2000 6403 LEGAL HRA/ECONOMIC DEVELOPMENT 02000 03 87.00 126290 11/22/2013 101249 MULLER,CYNTHIA 42.07 SUPPLIES,CHMBR/FBA EVENT 123922 NOV 20 EXP REIMBR&000 6250 OTHER SUPPLIES&PARTS HRA/ECONOMIC DEVELOPMENT 02000 03 42.07 Report Totals 129.07 �.J • • $ 60,844 2013 % Fund Description Budget Jan Feb Mar Apr May June July Aug Sept Out Nov Dec Total Balance Received 2000 ECONOMIC DEVELOPMENT AUTHORITY Fund Balance $ 80,844 $ 85,114 $ 88,830 $73,143 $71,798 $ 78,119 $ 98,023 $ 93,019 $113,840 $ 129,184 $ 130,224 $ 130,224 Revenues 4020 Tax Increment Excess 15,747 15,747 $(15,747) Intergovernmental Revenue $ - $ - 4404 Federal(CDBG) 15,000 (7,320) 7,320 15,000 (15,000) State - - Other - - 4480 County Miscellaneous - - - 4516 Administrative fees - - 4950 Investment Interest 2,200 178 176 174 172 170 168 188 184 160 160 1,889 511 76.76% 4980 Gain/Loss Invest MKT Value 4975 Rental Income - - #DIV/01 5010 Sale of Assets - - - 5205 Operating Transfers 50,000 4,167 4,187 4,187 4,187 4,187 4,187 4,187 4,187 15,547 4,187 5350 Miscellaneous Revenue - - #DIV/0I Total $ 52,200 4,345 1 4,343 I 4,341 I 19,339 I 4,337 I 20,082 1 (2,987)1 11,651 1 15,707 I 4,327 I -I - $ 18,689 $(14,489) 31.97% 2011 , Budget Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total Balance Expended Expenditures 8250 Other Supplies - - 6401 Professional Services 8,220 5,000 5,000 3,220 80.83% 6403 Legal Services 2,000 58 809 887 180 319 145 87 2,045 (45) 102.23% 8421 Municipal Services - - 6422 Electric 400 17 17 17 18 18 18 17 18 18 154 248 38.42% • 6423 Natural Gas - - 6426 Insurance 1,000 - 1,000 0.00% 6450 Outside Printing - - 6455 Legal Notices Publications - , - 6480 Dues&Subscriptions - - 6470 Training&Subsistence - - #DIV/0I 8485 Mileage Reimbursement - - #DIV/OI 6492 Advertising - - 6515 Building Repair Service - - 8550 Developer Payments 15,000 3,200 18,200 (18,200) 8570 Programming Expense - - #DIV/01 7310 Operating Transfers 33,500 - 33,500 7420 Other Expenditures 12 (9,307) (9,295) 9,295 Total $ 45,120 $ 75 $ 628 $ 28 20,683 18 177 $ 17 $ (8,970) $ 183 $ 3,287 $ - $ - $ 18,103 $ 29,017 35.69% Fund Balance 65,114 68,830 73,143 71,798 76,119 98,023 93,019 113,840 129,184 130,224 130,224 130,224 Revenue and Expenditure Descriptions . October Revenues 4950 Investment Interest Interest portion of Vinge loan payment 5205 Operating Transfers EDA Levy Transfer October Expenditures 6403 Legal Services October legal services Campbell Knutsen 8550 Developer Payments CDBG Grant K&K Auto Ranch $45,000 of the fund balance amount is In loans to Vinge Tile. Cash amount Is$80,000 to pay outstanding bills,then any remaining amount is available for business subsidies. CO V 4, City of Farmington c�� z 430 Third Street G<; Farmington,Minnesota 651.280.6800•Fax 651.280.6899 'AMMO. wwwrifarmington.mn:,,s TO: EDA Members FROM: Lee Smick,AICP CNU City Planner SUBJECT: Marketing Plan Update DATE: November 25,2013 INTRODUCTION/DISCUSSION Tom Whelan,Nemer Fieger,will be at the meeting to update the EDA on the marketing plan. He will be presenting the outline of the plan at the meeting. The final plan will be reviewed at the December 16,2013 EDA meeting. Additionally, Tom would like to discuss the attached article"Three Killers of Your Branding Effort". ACTION REQUESTED Discuss the Marketing Plan. Respectfully submitted, Lee Smick,AICP, CNU City Planner/Economic Development 9 • Lee Smick From: mailer @infusionmail.com on behalf of Roger Brooks <news @rogerbrooksteam.com> Sent: Monday, November 18,2013 6:00 AM To: Lee Smick Subject: The three killers of your branding effort Hello Lee, If you haven't downloaded the free"Words& Phrases to Avoid"poster yet, please do. Print copies for everyone you work with: your graphic design firm or ad agency, local chamber of commerce, downtown groups, anyone and everyone who helps market your destination.Avoiding these words and phrases is not easy, but this one thing can increase your marketing effectiveness.You can download it here. THREE KILLERS OF BRANDING(There are never four) We have worked with more than a thousand destinations and researched countless more, and we found there are ONLY three killers of any branding effort._Here they are: 1. Local politics 2. Lack of champions 3. Lack of money (both public and private) LOCAL POLITICS With local politics, membership organizations can cause more problems than elected officials. Branding is about narrowing your focus. For example, as soon as you float the idea of being THE equestrian destination, someone will say"But we have so much more than that" or"I'm a chamber member, I pay my dues, and I think we should be known for our fishing."And then we try to make everyone happy, and we end up with"We have something for everyone!" LACK OF MONEY All successful brands are built on product, not just marketing. If you hope to become the equestrian destination, do you have the stadiums and facilities that cater to equestrian event organizers? Is the footing conducive for equestrian events? Do you have boarding, supplies, parking for large rigs, and spending opportunities for horse owners? Developing the product you need usually requires funding. The best brands are built on private-sector investment, not public sector amenities.Think Orlando, Anaheim, Napa Valley, Nashville and Hershey, Pennsylvania, to name just a few.All are private-sector driven. LACK OF CHAMPIONS Without strong champions, no branding (or specialization)effort can succeed. Do you have the people who will push the agenda forward, never taking"no"for an answer? It only takes two, three or four strong champions to win the branding game.As a matter of fact, if you have the right champions in place, they will find the money, and they will work through the local politics. WHAT TO DO 1. Make a list of the activities that really set your community apart from everyone else.That the people you are hoping to attract can't get or do closer to home. You might end up with five or you 1 10 might end up with twenty. Don't panic if you don't have anything truly unique to you. 2. Draw a line through the items that are static or never changing, such as local museums, statues,or static displays that people would usually see only once. If your focus is on a"been there, done that" attraction, it won't be sustainable.After everyone has seen it, you'll run out of customers. 3.You probably just narrowed your list dramatically. Now look at the major market you are hoping to • attract people from. Draw a big circle—a couple hours'drive—around that market area, remembering that they can go west, north or south as easy as they can head your direction.Then make sure no one in that circle has what you have on your list. If they do, cross it off—your attraction won't be unique to your market. You can see how doing these three things will help you narrow your focus.And communities with a narrow focus ALWAYS win!You simply cannot be all things to all people and win. You can't! Roger Brooks • Author Speaker I Destination Expert www.RogerBrooksIntemational.com I Speaking I Webinars I Roger's Weekly What-to-Do's I Consulting Roger Brooks international 981 Powell Ave SW Suite 125 Renton,Washington 98057 United States (206)241-4770 No longer want to receive these emails? Instant Unsubscribe 2 11 CITY OF FARMINGTON ECONOMIC DEVELOPMENT MARKETING PLAN PLAN OUTLINE Executive Summary Project Purpose and Goals Discovery Process • SWOT Analysis • Competitive Scene • What Site Selectors Want • What Farmington Has to Offer o Commercial/Industrial Opportunities Marketing Strategies • Business Retention and Expansion • New Business Attraction and Recruitment Target Audiences/Key Stakeholders Tactics • Key Messages • What Farmington Needs to Offer • How Farmington Should Communicate • Development/Enhancement of Sales Tools o Website o Banners/Signage o Sales Collateral • Associations to be made/joined • Continuing Education Outcomes/Milestone Measurement Implementation Timeline and Budget 11-20-13 nemerfieger starting conversations 6250 Excelsior Boulevard 952 925 4848 Minneapolis,Minnesota 55416 nemerfieger.com THREE KILLERS OF BRANDING We have worked with more than a thousand destinations and researched countless more, and we found there are ONLY three killers of any branding effort. Here they are: LOCAL POLITICS With local politics, membership organizations can cause more problems than elected officials. Branding is about narrowing your focus. For example, as soon as you float the idea of being THE equestrian destination,someone will say"But we have so much more than that" or"I'm a chamber member, I pay my dues, and I think we should be known for our fishing."And then we try to make everyone happy, and we end up with "We have something for everyone!" LACK OF MONEY All successful brands are built on product, not just marketing. If you hope to become the equestrian destination, do you have the stadiums and facilities that cater to equestrian event organizers? Is the footing conducive for equestrian events? Do you have boarding, supplies, parking for large rigs, and spending opportunities for horse owners? Developing the product you need usually requires funding. The best brands are built on private-sector investment, not public sector amenities.Think Orlando,Anaheim, Napa Valley, Nashville and Hershey, Pennsylvania,to name just a few.All are private-sector driven. LACK OF CHAMPIONS Without strong champions, no branding(or specialization) effort can succeed. Do you have the people who will push the agenda forward, never taking"no"for an answer? It only takes two, three or four strong champions to win the branding game.As a matter of fact, if you have the right champions in place,they will find the money, and they will work through the local politics. ©Roger Brooks International ;� ,, q•.w yG r..«a, ..... "r., .1, 1,,�:.. Y .'k, s,, Jam H t ,.. 7;774,4 ar , Mfr JETTISON .THE NmiC� ti T H t>!� 1 �.�t ..� ;, ' DESTINATION MARKET E TO AVOID , .. • Explore • Lose yourself here • Discover • Fresh fun [the word fresh] 1`. • Experience... • Tour.Taste.Toast.[period fetish] • Outdoor recreation • This is the place 1 • Unlike anywhere else • A real treasure • So much to see and do • Waiting for you • The four season destination • Far from ordinary - • Where the seasons come to life • Relax.Recharge.Rejuvenate. • Historic downtown • Close to everywhere r • Center of it all • Right around the corner • Best kept secret • Your playground , • We have it all • So much history ;; • Visit(name of town) • Purely natural t. • Beauty&heritage • The place for all ages • Naturally fun • ...and so much more! • Gateway • Home away from home 1'k • Naturally... •• A slice of heaven . • Culturally rich •• It's all right here • Welcome to my town! • Recreation unlimited • Always something happening • The perfect getaway • Rediscover • The place for families f • Real Texas[name of state] •• Start your vacation here • Slowdown&enjoy • Recreational paradise . • Real people.Real fun. • Take a look! ROGER BROOKS www.RogerBrookslntemational.com International r ±r .. `o� Miy� ,, City of Farmington ��' 430 Third Street •• �' �;.s Farmington,Minnesota X16 651.280.6800•Fax 651.280.6899 °+vT•A PO e� www.ciTingtonlnrius TO: EDA Members FROM: Lee Smick,AICP CNU City Planner SUBJECT: Proposed Second Amendment to Contract for Private Development DATE: November 25,2013 INTRODUCTION/DISCUSSION ABW Holdings, LLC(also known as Hobo, Inc. &Chemquest,Inc.) are proposing to purchase the Vinge building and property known as Farmington Industrial Park Block 3 Lots 3 &4 addressed as 21205 Eaton Avenue. Mr.Vinge is proposing to sell his existing building and vacant lot to the west of the building to ABW • Holdings,LLC. Because of this potential purchase, a proposed Second Amendmeint to the Contract for Private Development must be prepared and approved by the Economic Development Authority(previously the HRA) for the City of Farmington. Mr.Vinge had previously received approval for a Contract of Private Development on May 12,2003 from the Housing and Redevelopment Authority for the City of Farmington. DISCUSSION Hobo,Inc. &Chemquest,Inc. contacted the City in August 2013 inquiring about the Vinge building and vacant lot and discussions began at the staff level to assist the company with an expansion to Farmington because of their needs for additional space. Hobo will use the existing building space immediately,with plans to expand into the vacant lot in the future. The history of Hobo,Inc. &Chemquest,Inc. is as follows as shown on their website: • "We got our start in 1993 when Howie Breeggemann and Bobby Wigglesworth sold off their carwash equipment sales and service division but retained ownership of the chemical supply and manufacturing division. Looking for a memorable name for this new venture they took the first two letters from each of their . first names and came up with HOBO. Love it or hate it,you'll never forget it. Looking for a way to compete with the big brands of the carwash chemical industry, HOBO decided to focus on private labeling and custom blending. This proved to be popular with the carwash industry and HOBO began to grow. • Utilizing our expertise in formulating, manufacturing and private labeling, HOBO began to create products for other industries. • In February of 2000 HOBO moved into a 15,000 sq foot manufacturing facility located about 20 minutes 12 south of the Minneapolis/St Paul International Airport in Lakeville, Minnesota. It wasn't long before more space was required to accommodate HOBO's growth. So in June of 2002, HOBO added a 15,000 sq foot • addition to their building. HOBO took a big step forward in November of 2006 when it purchased Chemquest, Inc., a marketer of carw ash chemicals best known for their liquid bulk delivery program to the washes in Minnesota and Wisconsin." Original Contract dated May 12, 2003 versus Proposed Second Amendment November 25,2013 (as shown as underlined text) There were a number of items in the original contract for private development that were required of Mr.Vinge to receive a business subsidy from the HRA which included the following: 1. The HRA agreed to grant a business subsidy and approve the sale of the property to Mr. Vinge at less than fair market value so that Mr.Vinge could develop the property into at least an 18,000 square foot "flagship"building that included a warehouse, showroom, and distribution center along with office space. The existing 21,600 square foot building was completed in August 2005. This requirement has been met. This requirement has been removed from the proposed Second Amendment Agreement because the 18,000 square foot building has been completed. 2. Mr. Vinge purchased the property from the HRA through a Business Subsidy Agreement for$65,340 to be paid by a promissory note and mortgage. Mr. Vinge is currently paying on the promissory note and the balance of the note as of October 15,2013 is$30,731.58. The Promissory Note and Mortgage needs to be paid by Mr. Vinge as a condition of the attached Resolution that authorizes the execution and • release of the Amendment. As is currently the case,the remaining balance will be placed in the EDA budget where the principal goes into a receivables account and the interest goes into the revenue account. 3. The Business Subsidy Agreement also included the need for Mr.Vinge tO create a net increase of one (1)job by January 1,2005 at the annual wage level of at least 125%of the prevailing federal minimum hourly wage. This requirement has been met and is removed from the proposed Second Amendment Agreement. 4. All fees and charges have been paid by Mr.Vinge. This requirement has been met and is removed from the proposed Second Amendment. 5. As to the construction of minimum improvements in the contract,the building at 21205 Eaton Avenue has been completed;however,the final lift of asphalt in the parking lot and the striping of the parking lot have not been completed. The Second Amendment states that the completion of the final lift of asphalt and striping in the parking lot be completed by September 30,2014. Additionally,ABW Holdings,LLC shall submit a Letter of Credit in a form acceptable to the EDA in the amount of$20,000. 6. The HRA offered to refund Mr.Vinge 50%of the cost up to a maximum reimbursement of$20,000 for relocating a storm sewer line between the building and vacant property upon development of the vacant lot. There were requirements to meet by Mr.Vinge for the reimbursement including the combination of Lots 3 and 4 into one single tax I.D.number. Mr. Vinge would also have to obtain a vacation of the existing sewer easement and obtain a building permit for the construction of a 15,000 square foot to meet the minimum improvements or construction of a similar facility. Finally,Mr.Vinge would need to enter into an executed agreement with the City to relocate the storm sewer line. The Second Amendment language removes the 50%refund of the cost of the storm sewer relocation and only provides a refund of up to a maximum of$20,000. Additionally, since Mr.Vinge has not pursued any • 13 construction on the vacant lot and desires to sell the property, any future construction on the vacant lot by ABW Holdings, Inc. as the purchaser would need to be followed by the_purchaser as proposed in the Second Amendment Agreement- Section 3.9. The EDA currently holds Mr. Vinge's security of $20,000 for the construction of minimum improvements as provide in Article IV Section 4.1 of the original Contract for Private Development. The proposed Second Amendment states that the EDA will release the security of$20,000 to Mr. Vinge and ABW Holdings,Inc. will_provide a replacement security until the minimum improvements are complete. 7. The proposed Second Amendment requires that ABW Holdings,LLC is to maintain the property as a single parcel and is prohibited from splitting the property into 2 or more lots. This is a new requirement from the original contract. Summary The only major change to the proposed Second Amendment from the original contract is the removal of the 50%cost share of the storm sewer relocation. The EDA will release the security to Mr. Vinge and ABW Holdings, LLC will be required to maintain the property as a single parcel. Staff is recommending approval of the proposed Second Amendment as it will allow a new company to locate in Farmington and provide a potential for additional jobs in the community. It will also provide the potential for the expansion of a new facility on what is currently the vacant lot to the west of the existing building. This approval also meets the vision of the Economic Development Strategic Plan by"fostering employment opportunities and expanding the tax base through development and redevelopment". ACTION REQUESTED Approve the Resolution authorizing the execution of the proposed Second Amendment to the Contract for Private Development, contingent upon the following: 1. Payment of the balance of the promissory note between D &R Vinge.(borrower)and the City of Farmington EDA(holder). 2. Closing on the sale of the purchase agreement between Vinge and ABW Holdings,LLC. Respectfully submitted, Lee Smick,AICP, CNU City Planner/Economic Development 14 ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FARMINGTON DAKOTA COUNTY, MINNESOTA RESOLUTION NO.: R13-01 RESOLUTION APPROVING A SECOND AMENDMENT TO DEVELOPMENT CONTRACT Pursuant to due call and notice thereof, a regular meeting of the Economic Development Authority of the City of Farmington, Minnesota, was held in the Conference Room of said City on the 25th day of November 2013 at 6:30 p.m. Members Present: Larson, Bonar, Jolley, Wilson, Zeaman Members Absent: None Member Zeaman introduced and Member Wilson seconded the following: WHEREAS, the EDA's predecessor, the Housing and Redevelopment Authority in and for the City of Farmington("HRA") and D & R Vinge, Inc., a Minnesota corporation, ("Vinge") entered into a Contract for Private Development dated May 12, 2003, ("Contract") which included conveyance of HRA real property to Vinge and development of the property legally described as: Lots 3 and 4, Block 3, Farmington Industrial Park, according to the recorded plat thereof, Dakota County, Minnesota("Property"); WHEREAS, under the terms of the Contract, Vinge provided a promissory note for a portion of the purchase price("Note")which is secured by a mortgage against the Property; WHEREAS,Vinge is proposing to convey the Property to ABW Holdings,LLC ("ABW"); WHEREAS, ABW has requested an amendment to the development contract concerning the cost sharing related to the relocation of sanitary sewer and clarification of obligations under the terms of the Contract,which amendment is attached hereto as Exhibit A("Amendment"); WHEREAS, the EDA agrees to the amendment of the Contract conditioned upon the sale of the Property and payment in full of the balance remaining on the Note; NOW, THEREFORE, BE IT RESOLVED BY THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FARMINGTON that the Amendment is approved and the Chair and Executive Director are authorized to execute the Amendment,conditioned upon: 1. Full payment of the outstanding balance of the Note; and 2. Simultaneous closing of the sale of the Property to ABW. 1 PASSED AND DULY ADOPTED by the Board of Directors of the Economic Development Authority in and for the City of Farmington, Minnesota this 25th day of November, 2013. Todd Larson, Chair ATTEST: LA avid McKnight, Ex u • irector 2 EXHIBIT"A" Attach Second Amendment 3 17 • SECOND AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT • FARMINGTON,MINNESOTA THIS SECOND AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT ("Second Amendment") is made on or as of the day of , 2013, by and between the ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FARMINGTON, a public body corporate and politic under the laws of the State of Minnesota (the "EDA") and ABW HOLDINGS, LLC, a Minnesota limited liability company(the"Developer"). • RECITALS WHEREAS, the EDA's predecessor, the Housing and Redevelopment Authority in and for the City of Farmington("HRA") and D &R Vinge, Inc., a.Minnesota corporation, ("Vinge") entered into a Contract for Private Development dated May 12, 2003,recorded on June 15,2004, as Document No. 2215304 in the Office of the Dakota County Recorder, and a First Amendment to Contract for Private Development dated September 13, 2004, recorded on September 15, 2004, as Document No. 2247917 in the Office of the Dakota County Recorder (collectively the "Contract"); WHEREAS, the real property subject to the Contract (the "Property") is legally described as follows: Lots 3 and 4, Block 3, Farmington Industrial Park, according to the recorded plat thereof,Dakota County,Minnesota; WHEREAS, the HRA was reformed as the EDA on August 15, 2005 by City of Farmington Ordinance No. 541 and pursuant to Minnesota Statutes § 469.091; WHEREAS,Developer is now the fee title holder to the Property; 18 WHEREAS,the EDA and Developer desire to amend certain provisions of the Contract concerning the relocation of the sanitary sewer; NOW,'THEREFORE,the parties agree as follows: 1. REIMBURSEMENT FOR SEWER RELOCATION. Section 3.9 of the Contract is amended in its entirety to read as follows: • Section 3.9 Reimbursement for Sewer Relocation. As provided herein, the EDA shall refund the entire cost for relocating the storm sewer line that runs north and south and bisects the Property along the adjoining property lines for the two lots that make up the Property, up to a maximum reimbursement of$20,000. The EDA shall be required to pay the reimbursement conditioned upon the following events: (a) Developer obtaining approval from the City of Farmington of a lot . combination for Lots 3 and 4,Block 3,Farmington Industrial Park; (b) Developer obtaining a single tax I.D. number for property combined under subsection(a) of this Section; (c) Developer obtaining a vacation of the sewer easement identified herein; • (d) Developer obtaining a building permit for the construction of a 15,000 square foot expansion to the Minimum Improvements or construction of a similar facility; and (e) Developer relocating the storm sewer line, pursuant to an executed agreement with the City for the relocation. 2. MINIMUM IMPROVEMENTS. The EDA acknowledges and agrees that all of the Minimum Improvements on the Property have been constructed in accordance with the approved Construction Plans, except for the final lift of asphalt,which shall be completed by the • Developer by September 30, 2014. The Developer shall maintain with the EDA a cash escrow or a letter of credit in a form acceptable to the EDA in the amount of$20,000 as the sole security for the completion of the final lift of asphalt. Such security shall be released to the.Developer upon completion of the final lift of asphalt. 3. SECURITY. Any security deposited by Vinge and held by the EDA pursuant to • the terms of Section 4.5 of the Contract will be released by the EDA to Vinge. 4. BUSINESS SUBSIDY AGREEMENT. The EDA acknowledges and agrees that the wage and job goals under the Business Subsidy Agreement dated May 12, 2003, attached as Exhibit B to the Contract,have been met, and that the Developer has no further obligations under the Business Subsidy Agreement. 2 19 5. ADDRESSES FOR NOTICES AND DEMANDS. Section 8.6(a) and (b) of the Contract are amended to read as follows: • (a) Developer: ABW HOLDINGS,LLC Attn: Kenneth Wentworth 21365 Hamburg Avenue Lakeville,MN 55044 (b) EDA: Farmington Economic Development Authority Farmington City Hall 430 Third Street Farmington,MN 55024 With a copy to: CAMPBELL KNUTSON,P.A. Attn: Joel J. Jamnik 1380 Corporate Center Curve Eagan,MN 55121 6. NO EVENT OF DEFAULT. The EDA acknowledges and agrees that no Event of Default under the Contract or the Business Subsidy Agreement has occurred which has not been cured, except for paving of the final lift of asphalt. 7. NO REVESTING TITLE. Section 7.3 of the Contract is hereby deleted. 8. NO OTHER OBLIGATIONS. The EDA acknowledges and agrees that all of the Developer's obligations under the Contract have been fully performed, except as expressly provided in this Second Amendment. Developer shall have no obligations under the Contract except as expressly provided in this Second Amendment, except that Developer is required to maintain the Property as a single parcel and is prohibited from splitting the Property into 2 or more lots. 9. CONTRACT. The Contract shall remain in full force and effect except as specifically amended by this Second Amendment to Contract for Private Development. [Signature page follows] 3 20 IN WITNESS WHEREOF, this Second Amendment to Contract for Private Development is executed by the parties effective as of the day and year first above written. ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FARMINGTON By: ,Its Chair And: David McKnight,Its Executive Director STATE OF MINNESOTA ) )ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me, a Notary Public in and for said county, this _ day of , 2013, by and David McKnight the Chair and Executive Director, respectively, of the Economic Development Authority in and for the City of Farmington, a public body corporate and politic under the laws of the State of Minnesota,on behalf of the public body corporate and politic. Notary Public 4 21 ABW HOLDINGS,LLC By: Kenneth Wentworth Its: President/Chief Manager STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me, a Notary Public in and for said county, this _ day of , 2013, by Kenneth Wentworth, the President/Chief Manager of ABW Holdings, LLC, a Minnesota limited liability company, on behalf of the limited liability company. Notary Public THIS INSTRUMENT DRAFTED BY: Dougherty,Molenda, Solfest,Hills&Bauer P.A. 7300 West 147th Street, Suite 600 Apple Valley, Minnesota 55124 (952)432-3136 MDK(13106-34107) 5 22 NelitCity of Farmington y 430 Third Street Farmington, Minnesota 651.280.6800•Fax 651.280.6899 www.ci.farmington.mn.us TO: Economic Development Authority FROM: Cynthia Muller,Executive Assistant SUBJECT: Reschedule December EDA Meeting DATE: November 25,2013 DISCUSSION The December EDA meeting falls on December 23, 2013. Due to the Christmas holiday, staff proposes rescheduling the December EDA meeting to December 16, 2013, at 6:00 p.m. Mr. Tom Whelan will present the executive summary of the Marketing Plan. ACTION REQUESTED Approve rescheduling the December EDA meeting to December 16, 2013. Respectfully submitted, Cynthia Muller Executive Assistant 23 Space crunch in New Prague Article by:Susan Feyder Star Tribune November 12,2013-4:45 PM New Prague is studying the possibility of acquiring up to 100 acres of vacant land that could be developed into an industrial park,filling an existing gap in the community. The town's 31-acre industrial park is full,and there are no large vacant sites that would be ready if an industrial user wanted to expand or move to New Prague,said City Administrator Michael Johnson. The last sizable chunk of industrial land was acquired last year by Chart Industries Inc.for a major expansion of its manufacturing operations.Chart's New Prague business makes equipment to store and transport different types of gases,and its growth is being fueled by rising demand for natural gas. Johnson said the city isn't talking right now with other potential industrial property users,emphasizing that a decision on whether to acquire and develop the additional land is a ways off. "City staff has been authorized to develop a game plan for the City Council to consider before we would ever move forward on this type of project,"Johnson said.That information could be ready to present to the council early next year,he said. • Johnson said a number of issues need to be considered, including land prices and financing.There's also the question of whether having the additional industrial land would make long-term strategic sense, he said. Having more land available could help the city boost and diversify its tax base.About 70 percent of the tax base is residential,where development is considerably slower than in the mid-2000s,when the city was recording more than 100 housing permits a year.Only five homes were built in New Prague in 2011, the lowest total in more than a decade.Johnson said the city recorded 21 housing permits in 2012 and has 18 so far this year. A report earlier this year from the commercial real estate firm of Cushman &Wakefield/NorthMarq noted a shrinking supply of industrial land throughout the metro area."The shortage is prompting developers to stake out the next wave of inventory,"the report said. Charlie J. Pfeffer,a sales associate with the Maple Grove land brokerage firm Pfeffer Co.,agreed that demand for industrial land has picked up."The inquiries are coming not for speculative space,but from actual users that are bona fide and ready to go," Pfeffer said. Johnson said some parcels just outside the city limits on the northwestern edge of town have been identified as possible industrial park sites—one 24-acre parcel and another pair of 40-acre parcels. 24 New Prague has used a grant from the Scott County Community Development Agency for two market feasibility studies that include estimated acquisition and development costs for some of the land as well possible need based on projected future job growth. One study by Springsted Inc.estimated the cost to acquire and develop the 24-acre site at$2.73 million to$3.15 million. It said a 2011 appraisal by the city put the value at$1.3 million and added that the landowner currently is asking$1.75 million for the parcel. The two 40-acre parcels have been listed for sale at$2.875 million,according to the website of Cerron Properties, a commercial real estate brokerage firm. New Prague's private workforce of about 2,100 began falling about 10 years ago after peaking around 2,600,according to the Minnesota Department of Employment and Economic Development. But the other market study by Stantec cited research by the Metropolitan Council projecting long-term job growth for the city through 2030. The Stantec study said the three parcels could provide an excellent location for an industrial park and • noted that benefits from the improving economy could spread to exurban communities like New Prague. But the study also said that surrounding communities,too, have large amounts of land available for long-term industrial development. Susan Feyder• 952-746-3282 • • • 25 StarTribune -Print Page Page 1 of 2 StarTribune Putting out the welcome mat in Eagan . Article by:Susan Feyder Taw Star Tribune r -. November 10,2013-8:06 AM 1 +� 1111 gal g-4 The term°shopportunitf has crept into the lexicon of the Eagan -- „� „ ° Convention&Visitors Bureau The bureau is looking for a big increase in visitors—including out- rnis artist's rendering shows what the new paragon outlet maA is expected ro look like in Eagan when h opens In August of-town and international travelers—when the Paragon Outlet 2014.The city of Eagan hopes It will become an economic magnet for the entire area Mall opens next year in the Cedar Grove redevelopment area.The Dalpos Architects, new mall is fueling much of the 5 percent Increase in the bureau's 2014 budget,to almost$975,000. More than$500,000 is earmarked for marketing the city as a Att." destination for meetings,groups,sports and vacations.The bureau y arrsrw ;�a is expanding its marketing reach from six Midwestern states to 10 ; and the Winnipeg area.Armed with new,state-of-the-art display booths,the bureau will promote Eagan at 12 trade shows in 2014, up from eight this year. The bureau also plans to revamp its websfte and develop new Eagan Paragon doss 0xeecteedatosopn in August 2014.The do i is digital platforms to promote the city on mobile devices and tablets. hoping twill attract thousands of visitors. Star Tribune file photo, Much of the amped-up marketing will focus on the new mall, expected to have more than 100 upscale outlet stores when it opens next August. "Never before in Eagan's hospitality history has an attraction of this magnitude been added to the landscape;the bureau said in a recent report to the City Council.The economic benefits are expected to spread beyond the mall to other area attractions,hotels and restaurants. The new mall will arrive on the scene as travel nationwide continues to recover from the recession.The hotel industry In the Twin Cities has been making a comeback.Through the end of May,average occupancy at metro area hotels was 62 percent, up from 58 percent for the same period a year earlier,according to Tennessee-based Smith Travel Research. Occupancy at Eagan's hotels also has been moving up and currently Is about 70 percent,according to Brent Cory,president and CEO of the bureau.The potential benefit of the outlet mall to area hotels is a key reason developers have expressed an interest in building a new hotel—the first In Eagan since 2002—In the Cedar Grove area. The Eagan bureau's optimism about the new mall's economic punch is well-founded.Outlet malls across the country have a record of luring shoppers from around the globe,with Chinese tourists currently the fastest-growing segment of the foreign customer market. Baltimore-based Paragon Outlet Partners markets its other malls to international customers,like Asian tourists traveling to the San Franciso area near its outlet mall in Livermore,Calif.,according to Kelvin Antill,a Paragon development partner.°I do expect we will be marketing the Eagan mall internationally,"Antill said. For now,the Eagan bureau will focus on travelers from Canada,especially the Winnipeg area. "We think it's a great market,because it's drivable.Folks are coming down this way already,'Cory said.Cory told the City Council one Winnipeg tour group already has booked a stay In Eagan specifically aimed at visiting the Paragon mall.Other groups also have expressed Interest,he said. The new mall's proximity to the Mall of America—which draws more than 40 million visitors a year—is expected to provide a significant boost.A survey commissioned last year by the Eagan bureau found that the MOA's website ranked second among online resources used inn trip planning by Eagan visitors. About 3 million MOA visitors are from outside the U.S.,according to Dan Jasper,a spokesman for the Bloomington mall. °MOA's international traffic is increasing,and we have an aggressive goal to expand International guests to 5 million by 2015,"Jasper said.He said the MOA's research has found that International visitors spend 2.5 times more per visit than local shoppers. The MOA already has a marketing partnership with the Eagan bureau that helps generate business for the city's attractions and 15 hotels.Cory said the bureau will continue to look for ways to link marketing for the Paragon mall to the MOA,like promoting the transportation connection between the two shopping centers on the new Red Line BRT. The MOA is in the midst of an expansion that will add about 180,000 square feet of retail space. The improvements are part of the ongoing arms race among retail centers nationwide to make their malls unique destinations.The Eagan bureau expects much the same of the Paragon mall,calling it"Eagan's Disney World." 26 htta://www.startribune.com/printarticle/?id=231294151 11/13/2013