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10.27.16 EDA Packet
4114114 st- pato- AGENDA REGULAR ECONOMIC DEVELOPMENT AUTHORITY MEETING October 27, 2016 6:30 PM Room 170 Todd Larson, Chair; Geraldine Jolley, Vice-Chair Douglas Bonar, Steve Wilson, Hannah Simmons Jake Cordes, Steve Corraro 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA 5. CITIZENS COMMENTS 6. CONSENT AGENDA (a) Meeting Minutes (8/25/16 Regular Meeting) (b) Monthly Statements 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS (a) Downtown Facade Improvement Grant Program Proposal (b) Decertification of the City Center TIF District (c) Tax Abatement Policy 9. DIRECTOR'S REPORT (a) October Director's Report 10. ADJOURN �o EG►RifCity of Farmington s 430 Third Street Farmington, Minnesota 651.280.6800 -Fax 651.280.6899 4'0.,, ►a.O www.cifarmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Meeting Minutes (8/25/16 Regular Meeting) DATE: October 27, 2016 INTRODUCTION/DISCUSSION Please find attached the draft minutes from the August 25, 2016 Regular EDA Meeting. ACTION REQUESTED ATTACHMENTS: Type Description D Backup Material Meeting Minutes (8/25/16 Regular Meeting) MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting August 25, 2016 1. CALL TO ORDER The meeting was called to order by Chair Larson at 6:30 p.m. Members Present: Larson, Bonar, Cordes, Jolley Members Absent: Corraro, Wilson Also Present: Adam Kienberger, Community Development Director Audience: Patrick Connery, Gina King, Leon On 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA MOTION by Jolley, second by Cordes to approve the Agenda. APIF,MOTION CARRIED. 5. CITIZEN COMMENTS/PRESENTATIONS Patrick Connery, 20991 Chippendale Avenue,he would like the rocks cleaned up along the sides of the roads for the bikes. 6. CONSENT AGENDA MOTION by Cordes, second by Jolley to approve the Consent Agenda as follows: a) Approved Meeting Minutes (7/28/16 Regular Meeting) b) Received Monthly Statements APIF, MOTION CARRIED. 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS a) Commercial Rehab Grant Amendment and Extension—Farmington Bakery The EDA previously approved a rehabilitation grant for the Farmington Bakery to do some rehabilitation to their business. The grant included matching funds of $13,250. Because of the improvements, there have been additional issues identified with the building. Therefore,they are requesting an extension to the grant timeline and additional funds of$10,225 to complete the work. Ms. Gina King explained the additional improvements that are needed. The total grant would be $23,475, which is still below the maximum allowed amount of$35,000. MOTION by Jolley, second by Bonar to approve the grant amendment for the Farmington Bakery in the amount of$10,225 making a total of$23,475. APIF, MOTION CARRIED. EDA Minutes(Regular) August 25,2016 Page 2 b) Riste Lot Discussion Update The Riste lot is owned by the EDA. Several years ago, the city used CDBG dollars along with other funds to demolish a building on this lot. Mr. Leon Orr is interested in purchasing this lot. Because CDBG dollars were used, 76.9% of the sale price needs to go back to the CDBG program. The lot has been appraised for $25,000. Which means $19,225 would need to go back to the CDBG program. The EDA agreed to a selling price of$25,000 for the Riste lot. Mr. Leon On stated this will be for the Last Hope office he and his wife run in Farmington. He felt the price was reasonable. Mr. Orr has some issues with the business to work out and will be in contact with the EDA. c) Approve Quit Claim Deed—AK Performance Graphics Inc. The city sold the building at 308 Elm Street to AK Performance Graphics in 2010. The required improvements to the building have been completed. Therefore,the city needs to be removed from the mortgage. MOTION by Bonar, second by Cordes to approve the Quit Claim Deed between the EDA and AK Performance Graphics Inc. APIF,MOTION CARRIED. d) VRC Hy-Vee Deferred Assessments Business Subsidy Agreement Hy-Vee has proposed to build a store in Vermillion River Crossings. When the VRC development was started, assessments were levied against the parcels to fund the infrastructure including the bridge and streets that serve this development. The city was to enter into a tax abatement agreement to reimburse the developer for the assessments once improvements were made to the property. Since then, VRC reverted to the banks. In order to make a market rate sale of the property with Hy-Vee, the $2 million in assessments would be removed from the property. The City Council would need to approve a Business Subsidy Agreement for assessments assigned to outlots A and C of Vermillion River Crossing. Hy-Vee would need to create at least 20 jobs paying a wage of at least$13/hour. The EDA would need to recommend this approval to the City Council. A public hearing is scheduled for the September 19, 2016, City Council meeting to approve this agreement. Staff has recently been informed there is a party interested in purchasing another outlot in VRC for a professional business. The lot has an outstanding assessment balance of$57,000. The brokers are asking if the city would be willing to participate in the outstanding assessments for that lot as well. They are requesting a 25%to 30%reduction in the assessments, or about$15,000. The remaining assessments would be paid by the purchaser at closing. A few years ago, the EDA had budgeted as part of some local government aid funds of$50,000 to pay off the assessments to facilitate the development of a hotel. The assessments on the outlots are deferred, which means they stay at an amount and accrue interest until the properties are sold. The hotel lot assessments EDA Minutes(Regular) August 25,2016 Page 3 are active, where they are paid down every year as part of the assessment payments. Today the hotel lot has an assessment balance of$35,000. The EDA has $50,000 in the budget for assessments which could be used for the $35,000 in assessments for the hotel lot and the $15,000 for the outlot for the professional business. The EDA was receptive to this proposal. MOTION by Cordes, second by Larson to recommend approval to the City Council of a business subsidy agreement with Hy-Vee Inc. related to the deferred assessments on outlots A and C of the Vermillion River Crossings development provided they create at least 20 jobs paying a wage of at least$13/hour. APIF, MOTION CARRIED. 9. DIRECTOR'S REPORT There is a vacancy on the EDA and interviews will be conducted August 29, 2016. Staff plans to have the seat filled in time for the September EDA meeting. The Trident development is under construction. One item in the Downtown Redevelopment Plan is developing a green space next to the Rambling River Center. The Rambling River Center Advisory Commission and the Parks and Recreation Commission have reviewed the concepts. There will be a public meeting to include surrounding business owners to receive their input. EDA members asked about gauging the interest of the business owners in updating the rear of their buildings. Staff could offer them to apply for CDBG grant dollars. 10. ADJOURN MOTION by Cordes, second by Bonar to adjourn at 7:34 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Administrative Assistant o�E y City of Farmington � 430 Third Street � Farmington, Minnesota 651.280.6800 -Fax 651.280.6899 4%r.* 4% .*no" . www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Monthly Statements DATE: October 27, 2016 INTRODUCTION/DISCUSSION Please find attached the monthly statements for the EDA. ACTION REQUESTED ATTACHMENTS: Type Description Backup Material January-September Revenues and Expenditures D Backup Material October Financial Statement Snapshot 0O W O 00 OOOOO0 ' O a-^ 1I� OOO C 8 y O FN t0O 00 8 . 1 ~ I O 0 _Mv I 0 vN .... Z..1...• N 1occ r tN CCI I r. .r.. v v 0 O C 0• p N Om 9 V Q 0 y NON 0 O 0 0 O O O 0 0 0 0 0 1 0 0 0 „^ I, N 0 0 00 0 10 O Co 0 0 0 0 0 1O 1A W 0 O CO M Tt O LII. O O 11) 4 O O CO O 1:1 N r T O M t0 N N C r a s ap' 0 0 0 O O CO 0 0 0 LO CO 0) 0 0) N I- 0 0 0 003 — Co t0 � o co CO 0) CO V v 0 CD tO O 1 0 o 0 r r 0) N O a- r P 0 0 t0 cc m N N tt t0 et t0 co : i M M v Ctto 0 0 o O I o 0 0 0 0 0 0 0 0 0 0 0 O 0 0 0 0 0015• 0 0 Q N 0 O 0 0 0 O 0000 .000 o o O 0 0 0 0 0 0 0 O Q N Z a. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 O tCOi N O4 a- 0 0 0 M 0 0 h M 0 0 0 10 N O O N N M 0 M .0- N N 10 N r N ti 0 co 0 M M 00 E 7C N CO h ^ 1Cy 14. O Q Q N v .2 N _ 0 0 0 O 0 10 ti 0 0 O 0 0 0 0 M M M 0 M • R 10 0 O r 100 N r Tr 0 0 0 M VI Fs (0 00 113 c 7 r N I� r = to aaN r 0)) M M M Mg. ami 0 UJ C3 O P O � ' O N t- r 0 0 0 0 0 0 0 0 O 1 O M 0 W ' N T A T 04 N 0 LO N r M M CO N N QN r r co M N = I V F- O n O t- ti O O O O 0) 0 10 CO O I M 0 Co) N 0) t0 cocO N N 11 10 N a-- N Cr) tct 0) 0) 1 M (0 CO Q C w s- 7 N N 10 CO 40 CO1 M M 00 -,aN r ss) of I T CO 0 V 0 0 O 1 j 0 0 0 0 N 0 0 O N 01 M O M O) CO w r N I Cr 10 a- O C i M w 100 2aN r r .M 09 N' O 00 0 co I O 0) N O 0 O O O 10 O O r r ,M O 0) Qy a- N N '� 100 N r CO 000 00) N M M szt Q a N CV a 'Cr: M' 09r. t= 0200 O O o 00 O O M O 10 O M ON tM N-` O N N ) ad. 1el YN CO M M O 1.6 en v 0 M 0 M 0 N ti 0 a- 0 0 0 0 0 0 a 10) 0 MN �- M OM) 0) 0 N a- O 00 CO M M 0 O 0 CO N N 10 N N N N M M M 2 V C r r I M of N l0 Q N I Z'- O O O 0 O N IC) 0 r O 0 `- yr O O F- O M 0 M N CO OS CO N N M 10 r to el' V i M M C y r `- N' N M M r 0 0 Q N i toLU LLI roQ 2 > > wW o (/)i o ,m dZ0 - g y O LL O Z O co - w ~ ow CL E. i c WO cQ o ; Ce CC,Z ZaCO 0 � 0 V Q IY c m it a _1 E- w ? O cn I-- 0 a 0 W ' 0 1'- 'm 1. O 1 i7 1 1 I 1 1 1 1 1 1 1 1 V N N, r Z I. 0 0 M CI.o N CO O o O 10 O O 1a C C a) w > N. 0 O O O N N 0 CO h 00 10 ti �' C C tt tt tt tt tt tt 10 10 co O - F H cg co c� co m m co co co m co F- I- I- Department Actual vs Budget-Generic Time Period Business Object Account Cumulative 12 Cumulative 12 Actual Budget Unit Account Description 2016 2016 2000-HRA/ECONOMIC DEVELOPMENT 1010 CASH 236,381.32 2000-HRA/ECONOMIC DEVELOPMENT 1010 CASH-LGA ASSMNT RELIEF 50,000.00 2000-HRA/ECONOMIC DEVELOPMENT 2255 DEPOSITS PAYABLE 5,989.38 2000-HRA/ECONOMIC DEVELOPMENT 3510 UNRESERVED FUND BALANCE -324,378.26 2000-HRA/ECONOMIC DEVELOPMENT 4955 INTEREST ON INVESTMENTS -2,159.96 -1,572.00 2000-HRA/ECONOMIC DEVELOPMENT 5205 OPERATING TRANSFERS -29,999.97 -40,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6401 PROFESSIONAL SERVICES 900.00 10,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6403 LEGAL ' 4,267.90 3,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6404 IT SERVICES 5,010.03 6,680.00 2000-HRA/ECONOMIC DEVELOPMENT 6422 ELECTRIC 180.08 300.00 2000-HRA/ECONOMIC DEVELOPMENT 6426 INSURANCE 90.50 450.00 2000-HRA/ECONOMIC DEVELOPMENT 6450 OUTSIDE PRINTING 0.00 2,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6460 SUBSCRIPTIONS&DUES 1,785.00 2,500.00 2000-HRA/ECONOMIC DEVELOPMENT 6470 TRAINING&SUBSISTANCE 1,046.18 3,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6485 MILEAGE REIMBURSEMENT 418.80 1,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6550 DEVELOPER PAYMENTS 41,500.00 2000-HRA/ECONOMIC DEVELOPMENT 6570 PROGRAMMING EXPENSE 8,969.00 13,500.00 Total 2000-HRA/ECONOMIC DEVELOPM 0.00 858.00 0.00 858.00 0.00 858.00 )/21/2016 2:31:45 PM Page 1 of 40%► City of Farmington 430 Third Street lei Farmington, Minnesota 651.280.6800 -Fax 651.280.6899 •.4 ,,a", www ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Downtown Facade Improvement Grant Program Proposal DATE: October 27, 2016 INTRODUCTION/DISCUSSION As outlined in the Downtown Redevelopment Plan, one of the recommended implementation steps of the Downtown Action Plan reads: • Establish a city grant or low-interest loan program targeted for refurbishing of downtown historic and commercial buildings, both exteriors and interiors. Attached is a proposed Downtown Facade Improvement Grant Program envisioned to spur additional private reinvestment in downtown Farmington. The intent of this program is to leverage investment in the downtown business district by providing matching grants of$1,000 for façade and exterior improvements. As part of the Downtown Redevelopment Plan, business owners are encouraged to improve their buildings' front and back curb appeal through facade improvements such as awnings,paint, tuck pointing, exterior lighting, decorative signage, windows, doors, gutters, accessibility improvements etc. Staff is proposing the EDA contribute$5,000 annually to this program. This aligns with several of the priorities in the EDA's 2016-2016 Strategic Plan for Economic Development. Please review the attached program guidelines and application for discussion during our meeting. ACTION REQUESTED Review and approve the attached Downtown Facade Improvement Program Guidelines and Application. ATTACHMENTS: Type Description D Backup Material Downtown Facade Improvement Program Guidelines and Application 4i I -o 13 46+1. sW A PROM City of Farmington Downtown FaC de Improvement Program Guidelines and Application 2016/2017 City of Farmington Downtown Fa lade Improvement Program In conjunction with the Downtown Redevelopment Plan,the Economic Development Authority(EDA) has made funding available to business owners to be used for building fa:de and exterior improvements. Eligible Properties Business/building owners in the Downtown Commercial District as defined on the attached map. Funding Source EDA fund balance of$5,000 annually. Grants will be made in the amount of$1,000 each. Grant Terms&Requirements No more than one grant may be granted per property or per applicant within one year from the initial application. A 1:1 match is required by the applicant. For every dollar contributed to funding eligible project costs,the applicant must contribute at least one dollar. The amount of grants to be awarded shall be$1,000. Program Objectives The intent of this program is to leverage investment in the downtown business district by providing matching grants of$1,000 for fa►:�:de and exterior improvements. As part of the Downtown Redevelopment Plan, business owners are encouraged to improve their buildings front and back curb appeal through fa:de improvements such as awnings, paint,tuck pointing,exterior lighting,decorative signage, windows,doors,gutters,accessibility improvements etc. Program Definitions Program Administrator The Program Administrator shall be the city of Farmington Economic Development Authority, 430 Third Street, Farmington, MN 55024, phone 651-280-6820. Applicant Any business/building owner within the downtown commercial district (see attached map) 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 if required. 1 Project Coordinator The Project Coordinator for the program shall be the Executive Director of the EDA. Target Area Locations that are in the downtown commercial district as shown on the attached map. Eligible Improvements: Funds may be used for fa►5.de and exterior improvements for the front and rear of buildings including, but not limited to awnings, paint, tuck pointing, exterior lighting, decorative signage,windows, doors, gutters, accessibility improvements, etc. ,4,,,,, i , mss . ` ` 3 Np 1� rt I q m -4.:4,,s . _ _ is �' i:p S Special Conditions Historic Properties The city of Farmington is a Certified Local Government under the Historic Preservation Act. Each project submitted for review that is for a property determined eligible for designation or is a heritage landmark property will be reviewed as outlined in city code to receive a Certificate of Appropriateness. Data Privacy All information provided by applicants under the Downtown Fa►5.de Improvement Program shall be maintained in accordance with the Minnesota Data Practices Act. Procedures Application Intake Applications are accepted on an ongoing basis and are reviewed based upon funds availability and in the order received. 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: 2 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 surrounding area. If necessary,applications competing for limited funds may be selected based upon these criteria. Property Inspections Upon determination that a property owner applying for grant assistance is eligible based on the program guidelines,the Building Official may conduct an inspection of the property to determine if the proposed improvements conform to city of Farmington building code standards. Scope of Work Upon completion of the initial inspection,the property owner shall provide a report or elevation drawing indicating any planned improvements. This report will be reviewed by the city of Farmington. Project Approval The final application will be approved by the Farmington EDA,following review by city of Farmington staff and recommendation of the Project Coordinator. Approval by the Economic Development Authority(EDA) The contract for work to be completed will be between the applicant and the contractor. Once the applicant has accepted a bid,staff will prepare the information for presentation to the EDA. 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 taken in the event of a dispute. Notice to Proceed Upon approval of the work to be done,and obtaining the required permits,the contractor will normally have six (6) months 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. 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 and contractor concerning the completion of work,the Project Coordinator shall work with both parties to try to 3 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. EDA 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,employees,and officials from any damages or liability arising from,or occurring as a result of,the activities funded through this program. EDA Payment All EDA funds will be disbursed by the EDA upon authorization by the owner and the city of Farmington. Payments will be made only after all work has been completed according to the authorized scope of work,and has been accepted by the owner. Funds will be released once all improvements are completed to the satisfaction of the city Building Official and final project inspection by the Project Coordinator. Payment may be made directly to the contractor or in reimbursement to the owner,upon presentation of paid receipts for approved work to the Project Coordinator. Appeals Process Appeals concerning eligibility for the Downtown Fa►4:de Improvement 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. 4 o`�EMM�yc Downtown FaMade Improvement Program Grant Application I PO/ APPLICANT INFORMATION - - NAME OF APPLICANT(S) BUILDING OWNER TENANT ADDRESS ADDRESS CITY,STATE,ZIP CITY,STATE,ZIP PHONE PHONE EMAIL EMAIL BUSINESS INFORMATION LEGAL NAME OF BUSINESS ADDRESS CITY,STATE,ZIP BUSINESS PHONE OWNERSHIP INTEREST OF ALL PARTIES NAMED ON TITLE: NAME _INTEREST NAME INTEREST NAME _INTEREST 5 PROPERTY INFORMATION ESTIMATED DATE OF BUILDING CONSTRUCTION HAS THIS BUILDING BEEN HISTORICALLY REGISTERED? PROJECT INFORMATION BRIEF DESCRIPTION OF PROPOSED PROJECT: ESTIMATED PROJECT COSTS EXTERIOR/FA' ADE ESTIMATED COST TOTAL ESTIMATED COST 6 FUNDING INFORMATION A 1:1 match is required by the applicant. For every dollar contributed to funding eligible project costs by the Downtown FaMade Improvement Program,the applicant must contribute at least one dollar.The amount of grant to be awarded shall be$1,000. TOTAL GRANT AMOUNT REQUESTED $ 1,000 APPLICANT FUNDS $ I/We declare that the information provided on this application and the accompanying attachments is true and complete to the best of my/our knowledge. I/We understand that any intentional misstatements will be grounds for disqualification and that the city of Farmington/EDA has the right to verify this information. I/We agree to provide the project coordinator reasonable access to information and reasonable access to the construction project site so that they may monitor project implementation. APPLICANT(S) DATE DATE 7 MINNESOTA DATA PRACTICES ACT TENNESSEN WARNING In accordance with the State of Minnesota Government Data Practices Act,the city of Farmington is required to inform you of your rights as they pertain to the confidential information collected from you. Confidential data is that information which is not available to you or the public. The personal information we collect about you is private. The information collected from you and from other agencies or individuals is used to determine the disposition of your application with the city. The dissemination and use of the data collected is limited to that necessary for the administration and management of the Downtown Fade Improvement Program. Persons or agencies with whom this information may be shared,include: 1. City of Farmington personnel administering the grant program 2. City Council members, Economic Development Authority members 3. Contracted private auditors 4. Law enforcement personnel 5. Those individuals or agencies to whom you give your express written permission NOTICE PURSUANT TO MS.60A.955 8 4F144 City of Farmington 430 Third Street Farmington, Minnesota °"4..4 651.280.6800 -Fax 651.280.6899 ' +r..4 ° www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director&Robin Hanson, Finance Director SUBJECT: Decertification of the City Center TIF District DATE: October 27, 2016 INTRODUCTION/DISCUSSION The city's TIF district#0069, Redevelopment District 2, otherwise known as City Center, was established in 1991 by the city's HRA. The district was required to be decertified December 31, 2020 or sooner if all of the district's obligations were met. The related bonds were retired in 2014 and the final developer payment was made and subsequently cashed this past August. The district obligations have been satisfied so the development must be decertified. For early terminations, the county requires a resolution be adopted acknowledging the early termination. This will be submitted to the county as part of the city's Confirmation of Decertified TIF District paperwork. ACTION REQUESTED Please adopt the attached resolution. ATTACHMENTS: Type Description Resolution EDA Resolution Decertifying the City Center TI F District RESOLUTION R16-01 CITY OF FARMINGTON EDA STATE OF MINNESOTA A RESOLUTION DECERTIFYING TAX INCREMENT FINANCING REDEVELOPMENT DISTRICT 2 OF THE CITY OF FARMINGTON Pursuant to due call and notice thereof, a regular meeting of the Economic Development Authority(the "EDA")of the City of Farmington,Minnesota,was held on the 27th day of October 2016 at 6:30 p.m. Members Present: Larson, Bonar, Cordes, Corraro,Jolley, Simmons, Wilson Members Absent: None Member Bonar introduced and Member Wilson seconded the following: WHEREAS,on May 15, 1991,the EDA's predecessor,the Housing and Redevelopment Authority for the City of Farmington created its Tax Increment Financing Redevelopment District 2,(the"District");and WHEREAS,Minnesota Statutes,Section 469.174 to 469.179 authorizes the City of Farmington EDA to decertify a tax increment fmancing district on any date after all bonds and other obligations have been satisfied; and WHEREAS, as of the date hereof all bonds to which tax increment from the District have been pledged have been paid in full;and WHEREAS, the Authority desires by this resolution to decertify the District effective October 27, 2016,by which all taxing jurisdictions will benefit from an increased tax base effective for taxes payable in 2017;and WHEREAS, the remaining tax increment in the account for the District is hereby returned to the County Auditor for redistribution to the regular taxing jurisdictions; NOW THEREFORE,BE IT RESOLVED by the Board of the Authority that it requests the County Auditor of Dakota County to decertify the District as a tax increment district and to no longer remit tax increment from the District to the Authority. DATED: October 27,2016 Todd Larson,Chair ATTEST: Adam Kie. .erger,Executive Director (Seal) o 1Mi1, City of Farmington c�~i/ ps 430 Third Street ._ Farmington, Minnesota 651.280.6800 -Fax 651.280.6899 ti+T.APRO, www ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Tax Abatement Policy DATE: October 27, 2016 INTRODUCTION/DISCUSSION In alignment with the EDA's 2016-2018 Strategic Plan for Economic Development, we are going through the process of developing more comprehensive policies for new and existing financial assistance tools. These policies will help guide future EDA decisions and allow for additional taxpayer dollar accountability. Tax Abatement is one of the more commonly utilized economic development incentive tools available to cities in Minnesota. This tool is regulated and defined in Minnesota State Statute.An overview of TIF and Tax Abatement are attached. Currently the EDA makes business assistance decisions on the city's Business Subsidy Policy which we revised in April of 2015. A copy of this document is attached. Based on our previous discussions and recent adoption of a new TIF policy, I have attached a draft Tax Abatement policy for discussion. The policy closely mirrors our TIF policy but can be used for a greater variety of economic development projects currently restricted under TIF law. ,ACTION REQUESTED Review the attached information and prepare any questions for discussion. ATTACHMENTS: Type Description a Exhibit Ehlers TIF/Abatement 101 D Exhibit DRAFT Tax Abatement Policy D Exhibit Farmington Business Subsidy Policy D Exhibit Farmington TIF Policy 004 \ \ 1 - k ' 4jl i .- .t { . a Q a a: a 0 ��®1 N LL i � �� L dorCO) 2 -1-0 u) E `t Cie L.7_ , . E V_ w cu X cc , as a0 CO Ca D 25 , IIIMI J H < CO L-- Q LL It D C 1 • el C 0 a) LL 1 Co -' LL I CoH -c ti p U ir ,` ` fit - . C W U IX Q Z W m J z IW W 0 r. E i CD I U) C - C ! 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H _c eh Cn T (I) W C O 1-- t CCS 0 -0 < CTS o 2 W U Z r a WJ O] L p C L_ O Jz -I-+ O W W c co Q X 13 ° co 45 (13 0 a3 p LN } O' O _p L t � L .V (/) ._ s (o O = NC _a >O O .- p To 0 Q L C - C UO X 0— O co O — L H • C •a) (i) u)03) coN cnN c3 O O ci) O _c Q O .L C OE L CD X O E O N co a 12 . a,M Cn W z OC ` WJ m WJ i a) E I ' - 0 to i < ._ O U O x O O U) �- Cv I- • • • •U co c/) Co L_ CD C a) CO E _C x U I W 411111/1 0 CA Z W CZ a Z W m " J1- z _ " K W WJ A I 0) 4111 C ■ 73 ■ a) -U O o C■ o (n O p 'L — Ci:5 - 03 a) u c (/)•_ p p 0 0) U Cl) LLL 4) •C U a) Q � C O p E' ID Ei O o .o a) 4) F— a) .0 CD ■O D :5 _o 03 co -0 E co (/) > CO �� C0 Q < c p a) X � c 0 o x CO O X p O = -0W 1- a) O (i) ir.O • • • Q . . -) . . a. • • •H 401 7 CA Z W U IX a LL W "m J1- 1- I i= N K W WJ L O le e O 2 c O E 0 0 E _co2 > f5 a) E. Q OU Q •n < o � � x Z . L 1- . cn C 5 .- 5 = •— E 0- _o w 3 en O O o m > 2 L •2 0 73� C73 > _ co ov CD x U U) ED. o I- . . . N w U Z CZ E- taW U m J = z _ " W Wa J HI 1- • c co cn 0 C m 0 .+ •(n _ w 2 E LL O 0) E a) 3 :c2 cm o _o _Lt c iii2E c .- _c w c OU O 00 co co O co cp0 I I— M r co W U 2 g W " IA m (1) i N +� W C J o a) E • O L i 0-1^'`J W E L O W)A a3 Y/ < O X Z co I— • c 4) ^ E z a) c OL p C (t3 D 0 Q }, -o 76 CD • cncio U C 4— to O p 5 ^ ^ }O O L O 6 -0 , U O -845 E � o � � E X E E •_, >, „, 2 ncL) :.,t, _6d o m co" 2 0 a) 0 co • N 'Cc o (� m ( � O > U � ‘111r W �-- . . yw U Z ceZ CO W J = N L CO W Cn O C X O O 401 _a u) O _ L E E -0 - 73 (-) (1) (2 , a) co wCI _0 L 16 � O O X ( 3 72 Z O I- . . O TD CaC - (13 D '- Q. To Q _ Lw (6 77/-' _ .a? O v _C W_ O _ L O o � � a) O Qi X 101 0 . 4 W cn U Z cdW W ',7-4)m J = N W d L ca cn = N W O W C WW co (o _ > 10 >, >, CO O •O O N e E cj I ca I O O Q. 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O 0 Na) L N Q Lna) co =O i u o L J co ca ■ co Lo FARMINGTON TAX ABATEMENT POLICY DRAFT— October 2016 1.0 PURPOSE 1.01 For the purposes of this document, the term"City" shall include the Farmington City Council and Farmington Economic Development Authority(EDA). 1.02 The purpose of this policy is to establish the city of Farmington's position relating to the use of Tax Abatement for private development above and beyond the requirements and limitations set forth by State Law. This policy shall be used as a guide in the processing and review of applications requesting Tax Abatement assistance. 1.03 The City is granted the power to utilize Tax Abatement by the Minnesota Statutes 469.1812 through 469.1815, as amended. The fundamental purpose of Tax Abatement in the city of Farmington is to encourage desirable development or redevelopment that would not otherwise occur but for the assistance provided through Tax Abatement. 1.04 The City reserves the right to approve or reject projects on a case by case basis, taking into consideration established policies,project criteria, and demand on City services in relation to the potential benefits from the project. Meeting policy criteria does not guarantee the award of business assistance to the project. Approval or denial of one project is not intended to set precedent for approval or denial of another project. The City can deviate from this policy for projects that supersede the objectives identified herein. 1.05 Though the EDA has expressed support for the use of Tax Abatement as needed, the EDA may reject any Tax Abatement application prior to consideration by the Farmington City Council. 2.0 OBJECTIVES OF TAX ABATEMENT 2.01 As a matter of adopted policy, the City will consider using Tax Abatement to assist private development projects that will achieve one or more of the following objectives: a. To retain local jobs and/or increase the number and diversity of jobs that offer stable employment and/or attractive wages and benefits. Preference will be given to higher paying jobs that also provide benefits such as health care coverage. b. Projects that provide value in the forms of needed transportation and other utility infrastructure improvement that would be completed in conjunction with the project. c. To encourage additional unsubsidized private development in the area, either directly or indirectly through"spin off' development. d. To facilitate the development process and to achieve development on sites which would not otherwise be developed but-for the use of Tax Abatement. Farmington Tax Abatement Policy rev. 10.27.16 e. To remove blight and/or encourage redevelopment of commercial and industrial areas in the city of Farmington that result in high quality redevelopment and private reinvestment. f. To offset increased costs of redevelopment(i.e. contaminated site clean-up) over and above the costs normally incurred in development. g. To create opportunities for affordable housing. h. Projects that improve the quality of life in the city of Farmington by providing a desirable good or service and address an unmet demand in the community. 3.0 POLICIES FOR THE USE OF TAX ABATEMENT 3.01 At all times,procedures and policies related to the proposed or actual approval of Tax Abatement usage will comply with the state laws. 3.02 The project must be in accord with the city of Farmington's Comprehensive Plan and Zoning Ordinances to secure assistance. 3.03 The use of Tax Abatement may be a"business subsidy" as defined by state law. In these cases, the use will comply with the requirements of applicable statutes and the city of Farmington's Business Assistance Policy. 3.04 When possible, Tax Abatement shall be used to pay for the costs of public improvements associated with a project, including but not limited to streets, sewers, storm water control, water,public parking lots and structures, lights, fiber optic infrastructure,transit and transportation, energy technologies, and publicly owned infrastructure. 3.05 Business assistance shall not be utilized in cases where it would create an unfair and significant competitive financial advantage over projects in the area. 3.06 The applicant is required to retain and be assisted by qualified professionals, e.g. accountants, legal counsel, etc., separate and independent from the EDA. 3.07 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. 3.08 Construction of an eligible project shall not commence until the City has given final approval to the application for financing. 3.09 The City reserves the right to deny any application for financing at any time prior to final execution of a business subsidy agreement or development agreement, whichever applies. 3.10 The EDA shall be reimbursed by the applicant for all its costs related to the request for Tax Abatement. At the time of application, the applicant will deposit with the EDA an amount as determined by the EDA as necessary to cover all costs incurred by the EDA in connection with the proposed project. Farmington Tax Abatement Policy rev. 10.27.16 a. The amount of the initial deposit shall be determined by the Executive Director of the EDA. b. The fact that the applicant's deposit is accepted by the EDA is not to be construed as a guarantee that the EDA will authorize the project. c. The EDA may request and the applicant shall be responsible to pay any additional amounts as determined from time to time by the EDA, should associated costs exceed the initial deposit. 3.11 All applications and supporting materials and documents shall become the property of the EDA, and, as such, are subject to the Minnesota Data Practice Act. 3.12 The EDA reserves the right to select a third party to assist in the management of the Tax Abatement process. 3.13 All Tax Abatement proposals must take into account the direct costs to the City and county and how those costs will be addressed. The applicant shall pay all permits and fees normally charged by the City as part of the subdivision or building permit approval. 4.0 PROJECT QUALIFICATIONS 4.01 All Tax Abatement projects considered by the City must meet the following requirements: - a. For new construction or expansion projects,new construction of a minimum of 5,000 square feet. b. The minimum creation of one new or retained full time job per$25,000 of assistance provided. c. The developer shall demonstrate that the project is not financially feasible but-for the use of Tax Abatement. d. The project must be consistent with the City's Comprehensive Plan, Land Use Plan, and Zoning Ordinances. 4.02 The project shall serve at least two of the following public purposes: a. Creation of jobs with livable wages and benefits, per City's Business Subsidy Policy. b. Increase of tax base. c. Enhancement or diversification of the City's economic base. d. Industrial development that will spur additional private investment in the area. e. The project contributes to the fulfillment of the City's development or redevelopment objectives. f. Removal of blight or the rehabilitation of a high profile or priority downtown site. 5.0 SUBSIDY AGREEMENT AND REPORTING REQUIREMENTS 5.01 All recipients of Tax Abatement assistance from the City shall be subject to the provisions and requirements set forth by state statute. Farmington Tax Abatement Policy rev. 10.27.16 5.02 All recipients of Tax Abatement assistance shall enter into an assistance agreement with the City that identifies the reason for the assistance, the public purpose served by the assistance, the goals of the assistance, as well as other criteria set forth by state statute. 5.03 The Tax Abatement assistance agreement may be amended from time to time as the parties may agree. Any such amendment must be in writing and signed by both parties. The Tax Abatement assistance agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. The Tax Abatement assistance agreement shall be recorded in the office of the Dakota County Recorder or Registrar of Titles. 5.04 All recipients of Tax Abatement assistance shall file a report annually for two years after the date the benefit is received or until all goals set forth in the application and the assistance agreement have been met. Reports shall be completed using the format drafted by the State of Minnesota and shall be filed with the City no later than March 1 of each year for the previous calendar year. Businesses fulfilling job creation requirements must file a report to that effect with the City within 30 days of meeting the requirement. Farmington Tax Abatement Policy rev. 10.27.16 FARMINGTON BUSINESS SUBSIDY POLICY 1.0 PURPOSE 1.01 This Policy is adopted for purposes of the Business Subsidies Act (the"Act"), Minnesota Statues, Sections 116J.993 through 116J.995. Terms used in this Policy are intended to have the same meanings as if used in the Act, and this Policy shall apply only with respect to "subsidies" as defined by the Act if and to the extend required thereby. 2.00 POLICY 2.01 The City of Farmington and the Farmington Economic Development Authority maintain several policy documents which speak to the general goals and objectives for the provision of public assistance for private development or redevelopment activities. These documents include, but are not limited to the current Strategic Plan for Economic Development and the Comprehensive Land Use Plan. 2.02 The City of Farmington has determined that in order for any project to be considered for fmancial assistance, a finding is needed that determines that, "but for"the City's assistance,this project will not occur or will not occur within a reasonable amount of time. The City will also need to demonstrate a return on its investment based on one or more of the public benefit categories listed in this Policy. 2.03 Because projects vary greatly in structure and public benefit derived, each project will be considered on its own merits. Consideration will be given to projects providing public benefits in one or more of the following categories: a. The creation of new jobs/increase in total payroll. In the case of new job creation, new jobs must pay an average wage equal to the minimum wage level for business assistance programs administered by the Minnesota Department of Employment and Economic Development for cities located in the seven county metropolitan area in place at the time of an application by any business seeking a subsidy. Preference will be given to higher paying jobs that also provide benefits such as health care coverage. b. Projects that provide value in the forms of needed transportation and other utility infrastructure improvements including regional infrastructure in the community that would be completed in conjunction with the project. c. Redevelopment projects that result in the stabilization of business districts or neighborhoods by elimination of blighting conditions. d. Projects that enhance or increase the economic diversity of the community by attracting businesses or industries not currently located in the City. New job wage requirements will apply to any new jobs created. Farmington Business Subsidy Policy rev.4.20.15 e. Projects that result in the development of affordable senior or workforce housing. f. Quality of Life based on business/projects. Those business/entities that provide a desirable good or service and address an unmet demand in the community will be considered. New job wage requirements will apply to any new jobs created. g. Retention of existing jobs. To be considered under this category, it must be demonstrated—to the satisfaction of the City-that the loss of jobs is specific and can be demonstrated. 2.04 If a particular project does not involve the creation of jobs, but is nonetheless found to meet another public purpose of the City it may be considered without any specific job wage goals, as permitted by Minnesota Statutes. This public purpose has to be something other than an increase to the City's tax base. Other measurable, specific and tangible goals must be established. Examples of tangible goals may include redevelopment or clean-up of a contaminated site or increased tourism. 2.05 Each project shall not only be evaluated against the Business Subsidy Policy but also against other applicable City of Farmington or Economic Development Authority policies, including the Comprehensive Land Use Plan, current Strategic Plan for Economic Development. The level of assistance to be provided for any project is at the discretion of City of Farmington. 2.06 Because it is not possible to anticipate every type of project which may in its context and time present desirable community building or preservation goals and objectives, the governing body must retain the right in its discretion to approve projects and subsidies which may vary from the principles and criteria of this Policy. The burden will be on the applicant to demonstrate,to the satisfaction of the City of Farmington,that the public benefit justifies the requested subsidy. 2.07 In all cases of business subsidy, where the subsidy is equal to or greater than the threshold prescribed in Minnesota Statutes, a subsidy agreement will be entered into between the City and the recipient. This agreement will delineate the subsidy structure and amount, as well as the expected public benefit. The agreement will include provisions for repayment and other resolution options if the expected public benefit is not achieved. Upon completion of the project, the actual costs of the elements of the project eligible for the business subsidy will be verified. All business subsidies will be subject to the criteria outlined in Minnesota Statutes, Section 116J.933 through Section 116J.955 except those subsidies as exempted by same. Farmington Business Subsidy Policy rev.4.20.15 FARMINGTON TAX INCREMENT FINANCING POLICY June 2016 1.0 PURPOSE 1.01 For the purposes of this document,the term"City" shall include the Farmington City Council and Farmington Economic Development Authority(EDA). 1.02 The purpose of this policy is to establish the city of Farmington's position relating to the use of Tax Increment Financing (TIF) for private development above and beyond the requirements and limitations set forth by State Law. This policy shall be used as a guide in the processing and review of applications requesting tax increment assistance. 1.03 The City is granted the power to utilize TIF by the Minnesota Tax Increment Financing Act, as amended. The fundamental purpose of tax increment financing in the city of Farmington is to encourage desirable development or redevelopment that would not otherwise occur but for the assistance provided through TIF. 1.04 The City reserves the right to approve or reject projects on a case by case basis, taking into consideration established policies, project criteria, and demand on City services in relation to the potential benefits from the project. Meeting policy criteria does not guarantee the award of business assistance to the project. Approval or denial of one project is not intended to set precedent for approval or denial of another project. The City can deviate from this policy for projects that supersede the objectives identified herein. 1.05 Though the EDA has expressed support for the use of TIF as needed, the EDA may reject any TIF application prior to consideration by the Farmington City Council. 2.0 OBJECTIVES OF TAX INCREMENT FINANCING 2.01 Tax Increment Financing (TIF) uses the increased property taxes generated by new real estate development within a tax increment district to pay for certain eligible costs associated with the development. As a matter of adopted policy, the City will consider using TIF to assist private development projects that will achieve one or more of the following objectives: a. To retain local jobs and/or increase the number and diversity of jobs that offer stable employment and/or attractive wages and benefits. Preference will be given to higher paying jobs that also provide benefits such as health care coverage. b. Projects that provide value in the forms of needed transportation and other utility infrastructure improvement that would be completed in conjunction with the project. c. To encourage additional unsubsidized private development in the area, either directly or indirectly through"spin off' development. Farmington Tax Increment Financing Policy rev. 6.23.16 d. To facilitate the development process and to achieve development on sites which would not otherwise be developed but-for the use of TIF. e. To remove blight and/or encourage redevelopment of commercial and industrial areas in the city of Farmington that result in high quality redevelopment and private reinvestment. f. To offset increased costs of redevelopment (i.e. contaminated site clean-up) over and above the costs normally incurred in development. g. To create opportunities for affordable housing. h. Projects that improve the quality of life in the city of Farmington by providing a desirable good or service and address an unmet demand in the community. 3.0 POLICIES FOR THE USE OF TIF 3.01 At all times, procedures and policies related to the proposed or actual approval of TIF usage will comply with the state laws. 3.02 The project must be in accord with the city of Farmington's Comprehensive Plan and Zoning Ordinances to secure assistance. 3.03 The use of TIF may be a"business subsidy" as defined by state law. In these cases, the use will comply with the requirements of applicable statutes and the city of Farmington's Business Assistance Policy. 3.04 The following general types of TIF districts may be established: a. Redevelopment District b. Renewal and Renovation District c. Economic Development District d. Housing District e. Other types of TIF districts, along with specific criteria, may be considered on a case by case basis. In addition to these districts,the City may also consider the creation of TIF Districts as authorized by applicable legislation. 3.05 When possible, TIF shall be used to pay for the costs of public improvements associated with a project, including but not limited to streets, sewers, storm water control, water, public parking lots and structures, lights, fiber optic infrastructure,transit and transportation, energy technologies, and publicly owned infrastructure. 3.06 TIF shall generally be used to reimburse the developer for eligible costs on a"Pay as You Go"basis. The City shall have the option to issue a TIF note with or without interest. The principal amount of the TIF note will not exceed the amount of eligible project costs incurred and documented by the developer. The developer shall be required to provide written receipts that show costs eligible for reimbursement have been paid. In all cases, TIF payments shall be based on available increment generated from the project. TIF payments shall be made after collection of property taxes. Farmington Tax Increment Financing Policy rev. 6.23.16 3.07 The applicant is required to retain and be assisted by qualified professionals, e.g. accountants, legal counsel, etc., separate and independent from the EDA. 3.08 TIF shall not be used for projects that would place extraordinary demands on city services or for projects that would generate significant environmental impacts. 3.09 Construction of an eligible project shall not commence until the City has given final approval to the application for financing and the TIF district has been established, if required. 3.10 The City reserves the right to deny any application for financing at any time prior to final execution of a business subsidy agreement or development agreement, whichever applies. 3.11 The EDA shall be reimbursed by the applicant for all its costs related to the request for TIF. At the time of application, the applicant will deposit with the EDA an amount as determined by the EDA as necessary to cover all costs incurred by the EDA in connection with the proposed project. a. The amount of the initial deposit shall be determined by the Executive Director of the EDA. b. The fact that the applicant's deposit is accepted by the EDA is not to be construed as a guarantee that the EDA will authorize the project. c. The EDA may request and the applicant shall be responsible to pay any additional amounts as determined from time to time by the EDA, should associated costs exceed the initial deposit. 3.12 All applications and supporting materials and documents shall become the property of the EDA, and, as such, are subject to the Minnesota Data Practice Act. 3.13 The EDA reserves the right to select a third party to assist in the management of the TIF process. 3.14 All TIF proposals must take into account the direct costs to the City and county and how those costs will be addressed. The applicant shall pay all permits and fees normally charged by the City as part of the subdivision or building permit approval. 3.15 The EDA will reserve up to 10% of all TIF funds to pay the EDA's administrative costs. 4.0 PROJECT QUALIFICATIONS 4.01 All TIF projects considered by the City must meet the following requirements: a. For Economic Development TIF Districts, new construction of a minimum of 5,000 square feet. b. For Economic Development TIF Districts, the minimum creation of one new or retained full time job per$25,000 of TIF provided. Farmington Tax Increment Financing Policy rev. 6.23.16 c. The developer shall demonstrate that the project is not financially feasible but-for the use of TIF. d. The project must be consistent with the City's Comprehensive Plan, Land Use Plan, and Zoning Ordinances. 4.02 The project shall serve at least two of the following public purposes: a. Creation of jobs with livable wages and benefits, per City's Business Subsidy Policy. b. Increase of tax base. c. Enhancement or diversification of the City's economic base. d. Industrial development that will spur additional private investment in the area. e. The project contributes to the fulfillment of the City's development or redevelopment objectives. f. Removal of blight or the rehabilitation of a high profile or priority downtown site. 5.0 SUBSIDY AGREEMENT AND REPORTING REQUIREMENTS 5.01 All recipients of TIF assistance from the City shall be subject to the provisions and requirements set forth by state statute. 5.02 All recipients of TIF assistance shall enter into an assistance agreement with the City that identifies the reason for the assistance, the public purpose served by the assistance, the goals of the assistance, as well as other criteria set forth by state statute. 5.03 The TIF assistance agreement may be amended from time to time as the parties may agree. Any such amendment must be in writing and signed by both parties. The TIF assistance agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. The TIF assistance agreement shall be recorded in the office of the Dakota County Recorder or Registrar of Titles. 5.04 All recipients of TIF assistance shall file a report annually for two years after the date the benefit is received or until all goals set forth in the application and the assistance agreement have been met. Reports shall be completed using the format drafted by the State of Minnesota and shall be filed with the City no later than March 1 of each year for the previous calendar year. Businesses fulfilling job creation requirements must file a report to that effect with the City within 30 days of meeting the requirement. Farmington Tax Increment Financing Policy rev. 6.23.16 /ilk,. City of Farmington C.) 430 Third Street ;_g I Farmington, Minnesota %,210P4,/ 651.280.6800 -Fax 651.280.6899 •*ivotowww.cifarmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: October Director's Report DATE: October 27, 2016 INTRODUCTION/DISCUSSION Development Update Below are a few recent development highlights: Bourbon Butcher(former Ground Round space in Tamarack Ridge)—Received liquor license approval at October 17 City Council meeting Las Enchiladas (Pilot Knob & 185th commercial)—Coming soon Hy-Vee (Vermillion River Crossings)—Purchased three lots in VRC. No announced construction timeline. Legacy of Farmington Senior Living(Denmark Avenue south of St. Michael's Church)—Ground breaking ceremony was held on October 6 This Little Piggy expansion—(Hwy 3 south end of town)—Received liquor license approval at the October 17 City Council meeting for banquet center expansion Eternity Homes expansion(Downtown)—Under construction Metro PCS (across from Family Fresh)—Coming soon Quick Ship Plus (across from Family Fresh)—Ribbon cutting was held on September 14. Comprehensive Land Use Plan 2040 Update Planning staff was recently notified that Farmington's Met Council grant application for funds to assist with updating the Comp Plan was approved.An RFP is being written and a process outlined for work to begin in early 2017. 2016-2018 Strategic Plan for Economic Development This will be a standing item of note each month in the Director's Report. The EDA's 2016-2018 Strategic Plan for Economic Development is included for your reference. Miscellaneous Articles Please find attached a few industry articles you may find of interest: DEED's September Employment Report MSPBJ Greater MSP"Project Nomad" NEXT MEETING Our next meeting is scheduled for Wednesday,November 23 (day before Thanksgiving)at 630 p.m. ACTION REQUESTED None, this report is intended to be a monthly update on various development and industry related topics. ATTACHMENTS: Type Description © Backup Material 2016-2018 Strategic Plan for Economic Development a Backup Material DEED's September Employment Report o Backup Material MSPBJ Greater MSP "Project Nomad" Farmington Economic Development Authority OR-iiiti � . o .43 '--if 1541.?clfhv; CC O r" 't .ogsT. M`S`-- A PRD 2016-2018 Strategic Plan for Economic Development January 2016 1 Introduction "The key to successful communities is their heart and soul—the unique cultures, landscapes, traditions and values that people cherish—and with people themselves taking action to enhance and sustain the places they love. Many communities are ready to protect their unique character, deeply engage their citizens, and meet the challenges of the 215t Century. Economic Development is one of those challenges, and citizens can assist with it by shopping locally and creating awareness to other citizens about the businesses within the City."(Farmington 2030 Comprehensive Plan—Chapter 10:Economic Development Element) Strategic planning is a key component of economic development.A three-year strategic plan is a valuable tool for both elected and appointed officials, as well as staff to provide work direction and prioritization of new initiatives. The following document outlines the EDA's areas of focus for 2016-2018. Participation EDA Members: Todd Larson, Chair Jeri Jolley,Vice Chair Doug Bonar Steve Wilson Kirk Zeaman Adam Kienberger, Executive Director Dr. Craig Waldron, Facilitator 2 Mission The Economic Development Authority's mission is to improve the economic vitality of the city of Farmington and to enhance the overall quality of life by creating partnerships,fostering employment opportunities, promoting workforce housing, and expanding the tax base through development and redevelopment. Role of the EDA The role of the Farmington EDA is to serve as an advisory board to the City Council on matters related to economic development.Through policy development and implementation of new and existing tools,the EDA serves as the voice of economic development. 3 Strategic Priorities The following five priorities were ranked by the EDA at their strategic planning session and are defined below.These priorities will serve as the focus and primary guidance of the EDA from 2016-2018. Because new opportunities and ideas will arise during this timeframe,these priorities are meant to serve as the focus areas of the EDA while allowing flexibility to thoughtfully explore other topics deemed important. i.. Develop tools for promoting growth and development in Farmington. 2. Develop strong incentive policies to ensure proper use of tools. 3. Explore plans for acquiring land for new industrial development. 4. Complete the development of Vermillion River Crossings. 5. Define and utilize the existing or future resources of the EDA. 4 Implementation Strategies i. Develop tools for promoting growth and development in Farmington. • Identify traditional economic development tools • Identify tools that can be unique to Farmington • Identify existing resources • Identify potential resource partners • Recommend tools to City Council 2. Develop strong incentive policies to ensure proper use of tools. • Discuss criteria and thresholds desired for individual tools(i.e.job creation, wages, etc.) • Recommend policies to City Council • Allocate necessary resources • Promote available tools o Website etc. 3. Explore plans for acquiring land for new industrial development. • Provide input on the 2040 Comprehensive Plan and land use designations o Encourage additional collaboration between advisory bodies o Joint meeting(s)with Planning Commission • Maintain relationships with local landowners • Explore additional ways to facilitate land development 4. Complete the development of Vermillion River Crossings. • Maintain relationship with broker/landowners • Consider alternate land use options • Discuss existing assessments 5. Define and utilize the existing or future resources of the EDA. • Do current resources align with desired tools/initiatives? • Explore economic development revenue opportunities • Joint meeting(s) of the EDA and City Council 5 2016 Work Plan —TBD Check in on strategic priorities at each EDA meeting to demonstrate progress or discussion needed. 6 Adam Kienberger From: DEED Media <MNDEED@public.govdelivery.com> Sent: Thursday, October 20, 2016 9:56 AM To: Adam Kienberger Subject: State Adds 1,900 Jobs in September EMPLOYMENT ANDPress Release ECONOMIC DEVELOPMENT 1� tos, it NIS illi For Immediate Release Contact: Shane Delaney, 651-259-7236 October 20, 2016 shane.m.delaney@ state.mn.us Steve Hine, 651-259-7396 steve.hine@state.mn.us State Adds 1,900 Jobs in September -'Unemployment rate steady at 4 percent"' ST. PAUL — Minnesota employers added 1,900 jobs in September, according to seasonally adjusted figures released today by the Minnesota Department of Employment and Economic Development (DEED). Those numbers, combined with figures from August that were revised from 1,500 jobs lost to 500 jobs gained, brought total job growth in Minnesota to 40,899 in the past year. State jobs are up 1.4 percent from the same month a year ago. The U.S. rate of job growth was 1.7 percent over the past year. The state unemployment rate held steady in September at a seasonally adjusted 4 percent. The U.S. unemployment rate was 5 percent in September. "September marks seven years since employment levels in Minnesota bottomed out during the recession," said DEED Commissioner Shawntera Hardy. "Since then, the state has added 278,000 jobs." Professional and business services led all sectors in September with a record monthly gain of 10,500 new jobs. Other sectors adding jobs were government (up 1,600), manufacturing (up 700), information (up 300), logging and mining (up 100), and 1 other services (up 100). The following industries lost jobs in September: education and health services (down 3,800), leisure and hospitality (down 3,700), trade, transportation and utilities (down 2,900), construction (down 600) and financial activities (down 400). Over the past year, educational and health services led all sectors with 14,129 new jobs. Other sectors gaining jobs in the past 12 months were professional and business services (up 10,701), construction (up 6,280), leisure and hospitality (up 3,616), government (up 2,760), financial activities (up 2,611), trade, transportation and utilities (up 1,766), and other services (up 1,500). The following sectors lost jobs in the past year: information (down 977), logging and mining (down 950), and manufacturing (down 537). In the Metropolitan Statistical Areas, the following regions gained jobs in the past 12 months: Minneapolis-St. Paul MSA (up 2 percent), Rochester MSA (up 3.7 percent) and St. Cloud MSA (up 2.8 percent). The Duluth-Superior MSA was unchanged, while the Mankato MSA was down 0.2 percent. DEED has added a section to its website that examines the unemployment rate by demographics (race, age and gender) and looks at alternative measures of unemployment. Go here for details. DEED is the state's principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and its services, visit the DEED website or follow DEED on Twitter. Seasonally adjusted Not seasonally adjusted Unemployment September 2016 August 2016 September 2016 September 2015 Rate Minnesota 4.0 4.0 3.4 3.2 U.S. 5.0 4.9 4.8 4.9 Employment September 2016 September 2015 Sept `15-Sept `16 Sept. `15-Sept Level Change `16% Change Minnesota 2,905,300 2,903,400 40,899 1.4 U.S. 144,747,000 144,591,000 2,423,000 1.7 2 Over The Year Employment Growth By Industry Sector(NSA) OTY Job OTY Growth U.S. Change Rate(%) OTY Growth Rate(%) Total Non-Farm Employment 40,899 1.4 1.7 Logging and Mining -950 -13.8 -13.8 Construction 6,280 4.9 3.1 Manufacturing -537 -0.2 -0.5 Trade,Trans.and Utilities 1,766 0.3 1.4 Information -977 -1.9 0.1 Financial Activities 2,611 1.4 2.1 Prof. and Bus. Services 10,701 3.0 3.0 Ed.and Health Services 14,129 2.8 2.8 Leisure and Hospitality 3,616 1.4 2.4 Other Services 1,500 1.3 1.6 Government 2,760 I 0.7 f 0.7 Metropolitan Statistical Area OTY Employment OTY Employment Change(#,NSA) Change(%,NSA) Minneapolis-St. Paul MN-WI MSA 38,195 2.0 Duluth-Superior MN-WI MSA 49 0.0 Rochester MSA 4,305 3.7 St.Cloud MSA 3,004 2.8 Mankato MSA -134 I -0.2 -30- Upon request, the information in this news release can be made available in alternative formats for people with disabilities by contacting the DEED Communications Office at 651-259-7161. Minnesota Department of Employment and Economic Development Communications Office Phone 651-259-7149 or 1-800-657-3858 • TTY 1-800-657-3973 htta://mn.gov/deed An equal opportunity employer and service provider. 3 SELECT A CITY LIMITED TIME OFFER WELCOME Subscribe Now Your Account INDUSTRIES&TOPICS R NEWS LISTS&AWARDS PEOPLE&COMPANIES EVENTS MORE... Q FOR THE EXCLUSIVE USE OF AKIENBERGER@CI.FARMINGTON.MN.US From the Minneapolis / St. Paul Business Journal: http://www.bizjournals.com/twincities/news/2016/10/20/greater-msp-s-project-nomad-had-local- governments.html Greater MSP's `Project Nomad' had local governments fighting for Prime Therapeutics SUBSCRIBER CONTENT: Oct 20, 2016, 1:02pm CDT Greater MSP summoned the leaders of five Twin Cities municipalities to a meeting in August in which each was asked to make a pitch — including a public subsidy offer — to Prime Therapeutics, an Eagan-based company looking to relocate as many as 2,000 jobs to a new corporate headquarters. i z Greater MSP used the code name "Project Nomad" in an effort p trIWel to hide Prime Therapeutics' identity, according to sources III familiar with the meetings who declined to be named for fear of Prime Therapeutics already has an office at reprisal by Greater MSP, a nonprofit economic development Bloomington's Normandale Lakes office park;the suburb could lose hundreds of jobs if the company organization with backing from some of the most influential consolidates elsewhere in the Twin Cities. local business, civic and government leaders. Staff from the cities of St. Paul, Edina, Eagan, Bloomington and Hopkins attended the meetings. Some of them bowed out early in the process, frustrated by hefty demands from Prime Therapeutics and a process in which they had to compete with neighboring cities. While local governments have long provided subsidies to attract development and jobs, what surprised many involved in the process is that Greater MSP, an organization that is supposed to promote the region as a whole, helped orchestrate what felt like a bidding war between local governments for a company that is already based in the region. Prime Therapeutics is looking for 400,000 square feet of Class A office space and, for at least one site, wanted to pay S14 or $15 per square foot per year for new construction. Space like that typically has a market rate closer to $24 per square foot. Prime was asking for a combination of public subsidies and private concessions to make the numbers work out, sources said. To handle the task, Prime hired Ann Marie Woessner-Collins, the managing director of Jones Lang LaSalle's business and economic incentives team . That's the part of the brokerage's practice that"helps companies negotiate with state and local governments to reduce up-front capital and expense costs along with ongoing operating expenses and taxes," according to Woessner-Collins's online bio. Prime Therapeutics spokeswoman Marlene Kadlec confirmed that Prime met with Jones Lang LaSalle and Greater MSP "as part of our strategic planning process." Prime, a pharmacy benefits manager owned by a group of Blue Cross and Blue Shield plans, has not said if and where it will relocate. It has 2,000 metro employees. "Our discussion with them was meant to gain a better understanding of how we could partner under various growth scenarios, if Prime were to experience future growth," she wrote in an email. "We have not committed to anything tied to this project to date (and may choose not to do so). To this point, we would not be able to comment on an exact number of jobs Prime could add to any community as there are a variety of potential growth scenarios we are continuing to review." The role of Greater MSP Greater MSP, with a budget of$5.4 million in 2015, has gotten millions of dollars from local governments over its five-year existence. It has mission of"coordinating a regional economic development strategy" and boasts a board of directors that is a who's who of Twin Cities leaders. U.S. Bank CEO Richard Davis is the chairman, and other board directors include General Mills CEO Ken Powell, Ecolab CEO Doug Baker, University of Minnesota President Eric Kaler and St. Paul and Minneapolis mayors Chris Coleman and Betsy Hodges. Among Greater MSP's list of investors are the cities of St. Paul and Edina. The investors also include Bloomington and Eagan, each of which is home to Prime Therapeutics offices and could stand to lose hundreds of jobs should Prime consolidate. Eagan paid Greater MSP $25,000 this year. "Our mission is actually to help companies grow and prosper here," said Greater MSP spokesman Mike Brown. "Some of those companies are from out of town, but there are plenty of companies in town we can help that are looking for opportunities to grow and prosper, so that's why we get involved, ... to help those companies." Brown disagreed with the assessment that the Prime Therapeutics process pitted Twin Cities municipalities against each other. "We just helped them identity opportunities to help this client expand," Brown said. "We are trying to prevent people from poaching from each other, but we want to make sure everyone has the opportunity to put their best foot forward. We don't really think about it as pitting each other against each other, it's more about helping them identity the assets they can offer." Brown said he didn't know if Prime ever threatened to leave the Twin Cities and no one interviewed for this story said the Twin Cities were at risk of losing the company. The city of Eagan, through a spokesman, sent a statement to the Business Journal, though it didn't address whether city officials thought Greater MSP holding the meetings was appropriate. "The city of Eagan was invited by Greater MSP to discuss Eagan's advantages with representatives of a corporation looking to expand their Twin Cities presence;' spokesman Tom Garrison wrote. "We believe Eagan's location, community vibrancy and workforce present a great opportunity to grow that company's business here. Discussions are ongoing. However, because our conversation came at the invitation of Greater MSP and the parameters the company set, we would refer any further comment to Greater MSP." Greater MSP CEO Michael Langley was not present for the meetings, sources said. Project Nomad was organized by Gene Goddard, Greater MSP's director of business investment. The organization does not identify its funding sources in its 990 tax form. However, a Public Record Media story from July noted that Ramsey County gave the organization $125,000 in 2014 and 2015, while the counties of Hennepin, Scott, Anoka and Washington each gave Greater MSP between $50,000 and $150,000 over a two-year period The city of Minneapolis gave Greater MSP $550,000 between 2011 and 2014. Process reveals potential new headquarters sites Prime Therapeutics is no stranger to expansion and has 600,000 square feet of offices spread across Bloomington, Edina, Mendota Heights and Eagan. Sources say Prime wants to consolidate many of its employees into one larger office building. One idea discussed at the meeting was a potential office development next to the planned St. Paul soccer stadium, on property owned by RD Management. But officials from St. Paul, Ramsey County and the St. Paul Port Authority weren't willing to offer such a large subsidy, sources said. "St. Paul did present for a 'Project Nomad' and I have not heard any results on what took place afterward;' said Port Authority Director Lee Krueger. Edina also bowed out of the process. Prime Therapeutics was looking was looking at Edina's Pentagon Park redevelopment by Minneapolis-based Hillcrest Development, according to sources. "We are not involved in the process anymore," said Edina City Manager Scott Neal. Both Krueger and Neal declined to discuss other details of the meeting. Another spot that Prime expressed interest in is one of the Excelsior Crossings office towers in Hopkins, where Cargill has a large base of employees. Leaders from Hopkins could not be reached for comment. Bloomington Port Authority Administrator Schane Rudlang said he could not confirm or deny his organization's involvement with Prime Therapeutics, but he did discuss the Authority's willingness to provide incentives to companies. "Bloomington analyzes each request for public investment— either for retention projects or new businesses to the city— on a case-by-case basis;' he said. "Priority is given to projects that meet the goals of the City's comprehensive plan, including the three district plans for Normandale Lake, Penn/America and South Loop. Different economic development tools are appropriate for different projects. No city governments have items on their agendas for any kind of assistance for Prime Therapeutics. Nick Halter Staff Reporter Minneapolis/St. Paul Business,. Journal ``''