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HomeMy WebLinkAbout05-24-18 tal 3. 47•Amenti"` AGENDA REGULAR ECONOMIC DEVELOPMENT AUTHORITY MEETING May 24, 2018 6:30 PM Room 170 Todd Larson, Chair; Geraldine Jolley, Vice-Chair Robyn Craig, 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) Approve Meeting Minutes (April 26, 2018 Regular Meeting) (b) Monthly Financial Statements 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS (a) Highway 3 Corridor Plan Scope of Work (b) Progress Report on the 2016-2018 Strategic Plan for Economic Development 9. DIRECTOR'S REPORT (a) May Director's Report 10. ADJOURN 41ARHI4► City 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, Administrative Assistant SUBJECT: Approve Meeting Minutes (April 26, 2018 Regular Meeting) DATE: May 24, 2018 INTRODUCTION/DISCUSSION Please find attached the draft meeting minutes from the April 26, 2018, EDA meeting. ACTION REQUESTED Approve the April 26, 2018, EDA minutes. ATTACHMENTS: Type Description ® Exhibit Minutes MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting April 26, 2018 1. CALL TO ORDER The meeting was called to order by Chair Larson at 6:30 p.m. Members Present: Larson, Cordes, Jolley, Simmons, Wilson Members Absent: Craig, Corraro Also Present: Adam Kienberger, Community Development Director Doug Zellmer and Keith Gilmore, Dakota Wood Design 2. PLEDGE OFALLEGIAIVCE 3. ROLL CALL 4. APPROVE AGENDA MOTION by Cordes, second by Wilson to approve the Agenda. APIF, MOTION CARRIED. 5. CITIZEN COMMENTS/PRESENTATIONS 6. CONSENT AGENDA MOTION by Jolley, second by Cordes to approve the Consent Agenda as follows: a) Approved Meeting Minutes (March 22, 2018 Regular Meeting) b) Received Monthly Financial Statements APIF, MOTION CARRIED. 7. DISCUSSION ITEMS a) Downtown Facade Improvement Grant Program Application Dakota Wood Design Doug Zellmer and Keith Gilmore of Dakota Wood Design, 701 1St Street, have applied for a grant for proposed building improvements including steel siding, paint garage doors, new soffit and fascia, new gutters and downspouts, relocate air conditioning unit, partial reroof, replace concrete loading dock and install concrete aprons on four overhead doors. The total project cost is $57,700. The requested grant amount is $10,000. All improvements will be on the street side. The building is leased to several tenants. MOTION by Jolley, second by Wilson to approve the Facade Improvement Grant for $10,000 to Dakota Wood Design. APIF, MOTION CARRIED. b) Immanuel Dental Certificate of Completion Staff was contacted by the title company on behalf of Immanuel Dental to prepare a certificate of completion for the development contract from 2011 when the building was constructed. They will be expanding their building to the east. EDA Minutes(Regular) April 26,2018 Page 2 MOTION by Simmons, second by Cordes to approve the certificate of completion. APIF, MOTION CARRIED. c) Downtown Redevelopment Plan Implementation—Rambling River Center Plaza Funding One of the projects in the downtown redevelopment plan is a plaza in the parking lot next to the Rambling River Center. The next step is funding. This project has been added to the CIP with starting an initial phase of the project in 2019. Staff will be seeking corporate sponsorships and also funding from the city and EDA. At the last meeting the EDA received an update on their financial situation. The overall project cost ranges from $501,000 to $708,000. The near term phase cost is $265,000 to $369,000. This isn't just a park and rec, community development or public works project. It is all of these together. The EDA discussed contributing to this project. At a recent workshop, the City Council discussed pooling one third of the cost; so $100,000 to $200,000. That is the start-up dollars for phase one. That amount will be funded upfront. Most of it will be used for tearing up the parking lot. Members were very supportive of this project. EDA dollars can be spent on anything and the EDA can take a leadership role in this project. It was suggested to get funding from corporate sponsors before the EDA contributes. Corporations will want to know that the project will get done. Staff reached out to the City Council and internal boards first as they have the most flexibility and ability to go first before reaching out to outside organizations. In order to apply for grants, there needs to be a match and that is where the city funding would come in. After the internal asks, staff will work on a sponsorship package. It was suggested to also put this out to the general public. Perhaps someone would want to make a donation in memory of someone. Members noted there should be a full financial plan over a set period of time established including contingency in case corporate funds don't come in and private funds come in lower than projected. It was suggested the EDA pledge $100,000. But the EDA may also need more grant money for the facade improvement program. Staff explained by pledging an amount, it doesn't mean the fund balance is decreased by that amount today. It means the funds are reserved for it. It serves as leverage to get other commitments. Members discussed committing $100,000 and splitting it up as $50,000 now and $50,000 later for phase two. Some type of plaque will be needed to recognize those who contributed. This should be given to the developer to include in the plan. Staff can bring this idea to the design firm. MOTION by Cordes, second by Simmons to commit $50,000 now and $50,000 later. APIF, MOTION CARRIED. 8. DIRECTOR'S REPORT Staff provided the first quarter report from Open to Business. They had meetings with five Farmington businesses and met with six residents. EDA Minutes(Regular) April 26,2018 Page 3 The Mayor presented the State of the City on April 20, 2018, and it is available on the city's website. Small Business Week is April 29 through May 5, 2018. The chamber is hosting several events. The CDA approved the city's redevelopment incentive grant application for the Highway 3 corridor study. This will be matched with CDBG dollars. The strategic plan for economic development will be updated this fall. 9. ADJOURN MOTION by Wilson, second by Cordes to adjourn at 7:25 p.m. APIF, MOTION CARRIED. Respectfully submitted, Cynthia Muller Administrative Assistant City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 - Fax 651.280.6899 mo101v www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Monthly Financial Statements DATE: May 24, 2018 INTRODUCTION/DISCUSSION Please find attached the monthly financial statements for the EDA. Note that the dollar amounts with a negative (-) indicate a revenue amount in the budget. ACTION REQUESTED ATTACHMENTS: Type Description D Backup Material Financial Snapshot- May o Backup Material Actual vs. Budgeted Revenues and Expenses Department Actual vs Budget-Generic Time Period Business Object Account Cumulative 12 Cumulative 12 Cumulative 12 Unit Account Description Actual Budget Proposed 2018 2018 2018 2000-HRA/ECONOMIC DEVELOPMENT 1010 CASH 287,145.83 2000-HRA/ECONOMIC DEVELOPMENT 1010 CASH-LGA ASSMNT RELIEF 35,000.00 2000-HRA/ECONOMIC DEVELOPMENT 3510 UNRESERVED FUND BALANCE -311,703.18 2000-HRA/ECONOMIC DEVELOPMENT 4404 FEDERAL GRANT -21,808.50 2000-HRA/ECONOMIC DEVELOPMENT 4955 INTEREST ON INVESTMENTS -1,579.16 -3,100.00 -3,100.00 2000-HRA/ECONOMIC DEVELOPMENT 6401 PROFESSIONAL SERVICES 2,257.16 11,680.00 11,680.00 2000-HRA/ECONOMIC DEVELOPMENT 6403 LEGAL 0.00 4,000.00 4,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6404 IT SERVICES 2,765.68 8,297.00 8,297.00 2000-HRA/ECONOMIC DEVELOPMENT 6422 ELECTRIC 79.01 300.00 300.00 2000-HRA/ECONOMIC DEVELOPMENT 6426 INSURANCE 51.04 130.00 130.00 2000-HRA/ECONOMIC DEVELOPMENT 6450 OUTSIDE PRINTING 0.00 500.00 500.00 2000-HRA/ECONOMIC DEVELOPMENT 6460 SUBSCRIPTIONS& 595.00 2,500.00 2,500.00 2000-HRA/ECONOMIC DEVELOPMENT 6470 TRAINING&SUBSISTANCE 734.12 3,000.00 3,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6485 MILEAGE REIMBURSEMENT 0.00 1,000.00 1,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6492 ADVERTISING 0.00 3,000.00 3,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6570 PROGRAMMING EXPENSE 5,513.00 17,000.00 17,000.00 2000-HRA/ECONOMIC DEVELOPMENT 7310 OPERATING TRANSFERS 950.00 2,850.00 2,850.00 Total 2000-HRA/ECONOMIC DEVELOPM 0.00 51,157.00! 51,157.00 0.00 51,157.00 51,157.00 0.00 51,157.00 51,157.00 21/2018 1:51:45 PM Page 1 of o O O'Oa.� 0 0'.0 0 0 0 0 0 0 0 0 0 O�0 0 •0 C) v C i`o s T y- R Olrp � N C 00 T OJ N OS L- I•t; 0t0 O (p ,..0 O �..0) O 0 0 0 0 N N O . 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Ol C C N LL Q W U g ui (n Z Q W ° 'CL 0 C R •m > N '2 W 0) W i im K.= ,9H KON G (j m w d u d M N 2 0 0 0 N ii O N d Z � U� � a vV v v v v v v2 a v 0;,- E5. c c � F (o co (v m co (o m m (o co co (/) F- •F 0... ge MN City of Farmington U 430 Third Street Farmington, Minnesota 651.280.6800 - Fax 651.280.6899 '.,*.4 pwro" www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Highway 3 Corridor Plan Scope of Work DATE: May 24, 2018 INTRODUCTION/DISCUSSION As the 2040 Comprehensive Plan update takes a holistic look at the community's long-term development, more localized study is often needed to identify specific activities that fit within those long-term development goals. Following the completion of the 2040 Comp Plan update, the staff recommends development of a plan for one of Farmington's oldest commercial corridors along Highway 3. This is an off-shoot of the Downtown Redevelopment Plan which calls for strengthening the connections to downtown at key gateway areas. The Dakota County Community Development Agency(CDA) Board approved Farmington's Redevelopment Incentive Grant(RIG) application for a$15,000 planning study at their meeting on April 24th. These dollars will be matched by Farmington's 2018 Community Development Block Grant(CDBG) funds when available in late July. Attached is a draft scope of work within a draft request for proposals document. Please review and plan to discuss desired outcomes of the work to be done. ACTION REQUESTED Provide direction on the scope of work to be included in a request for proposals for the Highway 3 Corridor Plan. ATTACHMENTS: Type Description a Backup Material Highway 3 Corridor Plan DRAFT RFP D Backup Material Highway 3 Corridor Plan Map REQUEST FOR PROPOSALS (RFP) Highway 3 Corridor Plan For the City of Farmington Client: City of Farmington 430 Third Street, Farmington, MN 55024 RFP Deadline: xxxxxxxxx (4:30 p.m.) Study Deadline: —4-6 months to complete study Background: Farmington is located in west-central Dakota County roughly 30 minutes south of the Minneapolis - St. Paul International Airport and the Mall of America. Buffeted by both growth communities and rural townships, Farmington is in a transitional period of growth and development. Farmington currently has an estimated population of 22,958 and boasts an above average median household income. With a median age of 33.1, Farmington is demographically one of the youngest communities in Dakota County. A more detailed history of Farmington can be found at http://www.ci.farmington.mn.us/community/about our city/history Study Purpose: Craft a vision for the Highway 3 corridor that illustrates unique redevelopment opportunities. Farmington is embarking on a planning effort that will result in a Highway 3 Corridor Plan. Highway 3 is a state highway with many existing land use incompatibilities with a mix of residential homes and businesses. Several smaller redevelopment efforts and projects involving new construction or redevelopment of existing buildings have occurred in recent years. Scope of Service: The proposed Highway 3 Corridor Plan at a minimum must review and make recommendations on the following topics and issues. 1. Review and make recommendations regarding the existing land use designations for the Highway 3 corridor from County Road 66 to the southern border, one block on either side of Highway 3 (see project area map). 2. Review and make recommendations regarding the current zoning ordinance requirements for the project area. 3. Identify the type, scale and possible locations for additional residential, commercial and/or mixed-use projects and their preliminary market feasibility. 4. Incorporate future transportation improvements and/or pedestrian connections that may be needed or required to facilitate additional redevelopment. 5. Identify and recommend various financing tools and programs that could be considered to facilitate future redevelopment efforts. 6. Review the current architectural design guidelines, current streetscape design standards, signage standards and other development tools or standards currently in place. The firm that is selected will be working with city staff, the Planning Commission, Empire Township, Castle Rock Township, MnDOT and Dakota County. The final study will be presented to the Economic Development Authority for approval. Existing Reports: The following studies, plans and reports can be reviewed and incorporated, as needed, into the Highway 3 Corridor Plan: • Information from the 2040 Farmington Comprehensive Plan Update • Downtown Redevelopment Plan (April 2016) • Farmington Zoning Map: http://qis.co.dakota.mn.us/maps/farm zoninq.htm • City Zoning Code for the various zoning designations http://www.ci.farmington.mn.us/government/open governme nt/codes fees and polices Proposal: A written or emailed proposal submitted to the city shall include the following information: Letter of Transmittal. Address the letter of transmittal to the address set forth on the cover page to this RFP and include, at a minimum, the following: a. Identification of the offering firm(s), including name, address, and telephone number of each firm; b. Acknowledgment of receipt of RFP addenda, if any; c. Name, title, address, telephone number, and email address of contact person during period of proposal evaluation; d. A statement to the effect that the proposal shall remain valid for a period of not less than 120 days from the date of submittal; and e. Signature of a person authorized to bind the offering firm to the terms of the proposal. Team Organization. In this section provide an organization chart showing the interrelationship of the team members and key personnel. Identify the team members' areas of responsibility. Provide subcontractors' company name, address, contact person, and telephone number. Describe your previous experience working with each subcontractor. For the purposes of this proposal, prior experience with all subcontractors is required to ensure that no major problems will occur to delay, complicate, or otherwise hamper the steady, reasonable progress of the study. Qualifications & Experience. Identify similar studies undertaken by the team within the last five (5) years. Document the team members' actual responsibility on each project. For each study, provide the client's name, address and telephone number for a contact person currently available who is familiar with the firm's performance on each study listed. The contact person should be familiar with the firm's key personnel as references may be contacted. Key Personnel. For each of the key personnel shown in the organization chart, provide a résumé, and include in the project manager's résumé a summary of experience with similar studies. Work Plan & Budget. The proposal should demonstrate the proposer's understanding of study goals. The proposal must include a clear description of the methods or process to be used to complete the scope of services. In addition, a project schedule should detail tasks, timelines and work products. The proposer should provide a detailed budget for the study within four (4) categories: • Data collection and compilation. • Mapping. • Findings, priorities and recommendations. • Meetings and presentations (describe type, number and location). Provide overall cost information as follows: a. professional fees including hourly rates and number of hours worked by person; b. direct expenses (equipment, supplies, etc.); c. contract labor; d. travel and lodging; and e. other as appropriate. Conflict of Interest. The proposer must identify any potential conflict of interest it may have providing the services contemplated by this RFP. Evaluation: Proposals will be evaluated on the following factors. The city has the right to reject any or all proposals without explanation. Experience of Firm(s) • The comprehensiveness, appropriateness, and quality of experience of the member firms; • Response of references; and • The presence of the appropriate disciplines. Experience of Personnel • Level of effort and participation of key personnel; • Experience, education and qualifications of key personnel with similar roles and projects; • Experience and interpersonal skills of project manager; • Demonstrated ability to successfully lead the study; and • Access/availability of project manager and key personnel. Work Plan for Scope of Services • Completeness and clarity of proposal; • Scope of work approach, timing and substance; • Understanding the study objective and work tasks; • Proposed level of detail, documentation, and back-up material; and • Ability to complete the study in a timely manner. Cost Allocation • Cost relative to proposed level of effort and products; • Allocation of resources among work tasks (including person- hours); • Ability to perform the study within budget; and • Reasonableness of costs. Other Factors • Any other factors deemed relevant by the city. Project Budget: A planning grant has been secured and matching funds identified for a study up to $40,000. Deadline: Proposals may be submitted via email or directly to the city no later than 4:30 p.m. on xxxxxxxxxx to: Adam Kienberger Community Development Director City of Farmington 430 Third Street Farmington, MN 55024 E-mail —akienberger a.ci.farmington.mn.us The city of Farmington intends to review all proposals and execute a contract by xxxxxxxxxxxx. Further information may be obtained from Adam Kienberger at 651-280- 6820 or by e-mail. Dakota County, MN .., _..........„..„ .n,.. '4111"7,11".- , _ 1 — ; ,- esii;/-....r,,"-- -.1. ..,.;,i _ 1.,...,,,,,, ....,,,,4,_ii, , , I,1' 1. i� w;w 1 .�- '... 4 ,, 1 7 n" � ' C��lb_j� •' -- -.7.:••.. T �ilk.� .' .. , ir+ ' rs41w1w+v I.t �. :isiarv7 , 1 /7, a,,,,..... .. .._.... I ,..,.,. . ,.,...g iti ..,.....,11 . iiii.,,,.. ... t . ..,. ....„....„. .,7.1.. .„a . 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This is not a legal document and should not be substituted for a title search,appraisal,survey,or for zoning verification. y4�FARMI , City of Farmington 430 Third Street Farmington, Minnesota + 651.280.6800 - Fax 651.280.6899 ' ,.4 " www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Progress Report on the 2016-2018 Strategic Plan for Economic Development DATE: May 24, 2018 INTRODUCTION/DISCUSSION Staff will review the progress of the 2016-2018 Strategic Plan for Economic Development and facilitate a discussion on items yet to be accomplished. ACTION REQUESTED Discuss the outcomes of the 2016-2018 Strategic Plan for Economic Development and provide input on the 2019-2021 planning process. ATTACHMENTS: Type Description CI Exhibit 2016-2018 Strategic Plan for Economic Development Farmington Economic Development Authority i i F t4a 13 10 1. G 4 44 • A PR 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 21St 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. 1. 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 1. 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 ioFAR�Ij , City of Farmington , 430 Third Street cke Farmington, Minnesota 651.280.6800 -Fax 651.280.6899 •4PROOSv. , www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: May Director's Report DATE: May 24, 2018 INTRODUCTION/DISCUSSION EZ Auto Ribbon Cutting/Grand Re-opening A ribbon cutting and grand re-opening is scheduled at EZ Auto on June 22 at 4:00 p.m. (321 Elm Street). 2016-2018 Strategic Plan for Economic Development This will be a standing item of note each month in the Director's Report. This document serves as guidance for the work undertaken by the EDA over a three-year cycle. The EDA's 2016-2018 Strategic Plan for Economic Development is included for your reference. Miscellaneous Articles Governing— 5 Lessons from the Amazon HQ2 Frenzy Twin Cities Business —Why Minnesota Couldn't Land Amazon's HQ2 DEED April Employment Report NEXT MEETING I am out of town on the date of our regular June meeting. I suggest we cancel the June meeting and meet on our next regular date of July 26th. ACTION REQUESTED None, this report is intended to be a monthly update on various development and industry related topics. ATTACHMENTS: Type Description ID Backup Material Governing - 5 Lessons from the Amazon HQ2 Frenzy D Backup Material Twin Cities Business -Why Minnesota Couldn't Land Amazon's HQ2 © Backup Material DEED April Employment Report 5/9/2018 www.governing.com/templates/gov_print_article?id=480556651 5 Lessons From the Amazon HQ2 Frenzy Most places were never going to land the company's next headquarters. But there are still some key takeaways for them. BY: Aaron M. Renn I May 2018 The epic feeding frenzy set off by Amazon's search for a second headquarters has been unprecedented, not just among the cities and regions bidding for the prize, but also among journalists and analysts covering the event. I have not been immune. After all, it's hard to imagine another offering on the scale of Amazon's. But the online retailer's play wasn't the first big economic development competition, and it won't be the last. There always will be plenty of lesser but still significant opportunities for cities, regions and states to compete against one another. Once Amazon makes its choice, the world of economic development will move on. Still, there are some important lessons one can take away from this process. First, tax incentives and other giveaways are here to stay. Many people have decried the immense public subsidies that communities and regions have offered to Amazon. I personally signed an open letter organized by urbanist Richard Florida calling on cities to forgo subsidies. But let's be realistic: For deals like this, it's essentially impossible for cities and states to resist. It's like being caught in the prisoner's dilemma, when two parties acting in their own self-interest take actions that result in a negative outcome for both. Second, talent is still king. Amazon's selection of 20 finalists was heavily driven by where the company believed it could readily find the talent it needs to fill 50,000 high-paying white-collar jobs. This includes huge cities with large labor forces, but also smaller cities that have been developing the kind of talent Amazon might want to hire. This is most evident in the Midwest, which despite being slower-growing overall had four finalist cities: Chicago, Columbus, Indianapolis and Pittsburgh. The last three were among the top cities in the region for growth since 2000 among people ages 25-34 with college degrees. Detroit, despite being bigger than all three, didn't make the cut because of the talent factor. Since 2000, Detroit ranked last in Midwest growth for young adults with college degrees. Third, only a limited number of cities will win big in tech. There were 238 entrants for Amazon's HQ2. But even if the company ends up putting facilities in multiple cities -- a definite possibility as it is already expanding in places like Boston and New York-- most of the finalists are going to end up as losers in this competition. In that respect, it's metaphoric of the tech industry in general. Software-based platforms like Facebook and Google have very high fixed costs but very low marginal costs --the expense of producing each additional unit of a product or service. This makes them hyper-efficient as they scale up. Network effects on these platforms can also promote a winner-takes-all outcome: People are on Facebook because their families and friends are on it. This means a relatively small number of firms dominate in many categories. Amazon itself is an example of this, though it is much more of a physical business than these others. This means that by nature the major headquarters will be located in a limited number of cities. That doesn't keep lots of cities from aspiring to create a high-tech hub. Realistically, most of them are not going to be a major player. That doesn't mean it's not worth pursuing the tech business or trying to build something of a local tech community. But tech is unlikely to be a mass-scale employer in the vast majority of places. Cities that pin too much hope on the technology business are likely to be disappointed. Fourth, mature corporations are becoming the drivers of tech. The image of a tech company may be as a startup in a garage, but gigantic, mature technology firms like Apple, Facebook and Google increasingly dominate today's Silicon Valley. Salesforce, whose market capitalization hit $90 billion this spring, is building the tallest skyscraper in San Francisco. It's not that cities outside Silicon Valley won't benefit from tech growth. The tech industry is swelling with new jobs in New York City, for example, but the major employers are in most cases established big names. Facebook employs 5,000 there and is growing. Google already owns one building in New York and employs 6,000 people. It just bought another building, Chelsea Market, for$2.4 billion. And even before the HQ2 bidding got underway, Amazon announced that it was hiring 2,000 people in New York. http://www.governing.com/templates/gov_print_article?id=480556651 1/2 5/9/2018 www.governing.com/templates/gov_print_article?id=480556651 So for cities desiring to grow employment in the tech sector, convincing these companies to open offices in them may be increasing in importance relative to traditional new startups, though the latter remain critical. In this light, the HQ2 competition may be a preview of coming attractions. And finally, don't get too focused on the huge, sexy deals. It's understandable why cities and states went hog wild over HQ2. But most of the growth in a local economy is going to come from existing businesses. Places need to put the same effort into growing the companies they already have that they do into luring companies from elsewhere. They also need to do what they can to grow new local startups, and not just in the tech sector. There's no substitute for doing the hard work of starting and scaling up locally based companies. This article was printed from: http://www.governing.com/columns/eco-engines/gov-amazon-hq2- frenzy.htmI http://www.governing.com/templates/gov_print_article?id=480556651 2/2 5/7/2018 Twin Cities Business-Why Minnesota Couldn't Land Amazon's HQ2: Not Enough Tech Talent HOME(/) / NEWS(/NEWS) / 2018(/NEWS/ARTICLES/2018) / MAY(/NEWS/ARTICLES/2018/MAY) / WHY MINNESOTA COULDN'T LAND AMAZON'S H02:NOT ENOUGH TECH TALENT News ,.,, ,,,,... .: t:4'*':‘,e-,-k,:::#,sEtk-<;R,s1,zi4',.0 .. �" x tri ` ' iil4v.?44„I i:'!:1.,,-;:4.:,,t—.,-A:_4-c.,,*a.7:..-,;-etw--,;i.s,:t.',,.-i,,..\'-' I 4: 40 'N's ...,:' I 111 azon arm t "S,..,„ , _,,..A'.:::-;;;'. iiir .. '. ECONOMIC DEVELOPMENT (HTTP://TCBMAG.COM/ECONOMIC_DEVELOPMENT) Why Minnesota Couldn't Land Amazon's HQ2: Not Enough Tech Talent Labor shortage knocked the state out of consideration. B in f tr 44 MAY 07, 2018 http://tcbmag.com/news/articles/2018/may/why-minnesota-couldn-t-land-amazon-s-hq2-not-enou 1/3 5/7/2018 Twin Cities Business-Why Minnesota Couldn't Land Amazon's HQ2:Not Enough Tech Talent BURL GILYARD Minnesota lost out on its bid to be considered a contender for a second North American headquarters for Seattle- based Amazon.com Inc., dubbed "HQ2" The Twin Cities area was hardly alone: Amazon gave the thumbs-down to more than 90 percent of the 238 submissions it received to draw up a short list of 20 cities. But since the January snub, economic development staffers at the Minnesota Department of Employment and Economic Development and St. Paul-based Greater MSP have been quiet about why Amazon dropped the state from consideration. The Wall Street Journal reported last week that Amazon officials provided feedback through approximately 200 phone calls to communities that didn't make the cut. In the wake of the Wall Street Journal story Shane Delaney,spokesman for DEED, confirmed that Amazon extended the same courtesy to local pitch planners. "We did have a call with the company... They did say that tech talent was probably one of their biggest concerns," Delaney told Twin Cities Business. "The company said they were concerned that we wouldn't be able to scale up to their need...If there was any piece of critical feedback,that was it." The bottom line?Amazon didn't think that Minnesota has a strong enough pipeline of information technology workers. Amazon envisions HQ2 as having up to 50,000 employees. "It's no secret that we have a workforce shortage issue in this state," said Delaney. Last week Amazon announced plans to add 200 additional tech workers to its technology development office in downtown Minneapolis (http://tcbmag.com/news/articles/2018/may/amazon-adding-200-tech-jobs-in- minneapolis). But that's less than one percent of the 50,000 employees that the e-commerce giant would look to add at a second headquarters location. It's also significantly less than the 3,000 jobs Amazon plans to add in Vancouver, British Columbia, or 2,000 new positions planned in Boston. (Job increases in those cities were also announced last week.) The challenge of finding enough workers goes far beyond Amazon's HQ2 search. DEED reported the unemployment rate for Minnesota in March at 3.2 percent. That's notably lower than the 3.9 percent national unemployment rate for April,which is now at its lowest point since 2000. In late March, DEED reported that there are now more job openings than job seekers in the state. DEED statistics showed 0.8 unemployed people for every job opening in the fourth quarter of 2017. State officials, policy leaders, companies and educators are all trying to find ways to address the challenge. On Monday the Minnesota Chamber of Commerce announced the creation of the Center for Workforce Solutions (https://www.mnchamber.com/grow/center-workforce-solutions), a new business-led effort to address labor shortage issues. http://tcbmag.com/news/articles/2018/may/why-minnesota-couldn-t-land-amazon-s-hq2-not-enou 2/3 Adam Kienberger From: DEED Media <MNDEED@public.govdelivery.com> Sent: Thursday, May 17, 2018 10:01 AM To: Adam Kienberger Subject: Unemployment Rate Steady at 3.2 Percent in April 1011111011 EMPLOYMENT AND Press Release m II ECONOMIC DEVELOPMENT For Immediate Release Contact: Shane Delaney, 651-259-7236 May 17, 2018 shane.m.delanev@state.mn.us Steve Hine, 651-259-7396 steve.hine@state.mn.us Unemployment Rate Steady at 3 . 2 Percent in April NEmployers shed 3,200 jobsN ST. PAUL — The Minnesota unemployment rate held steady at 3.2 percent in April, according to seasonally adjusted figures released today by the Minnesota Department of Employment and Economic Development (DEED). The U.S. unemployment rate in April was 3.9 percent. The state lost 3,200 jobs on a seasonally adjusted basis in April, while March's figures were revised downward from 2,900 jobs gained to 400 jobs gained. Minnesota added 11,659 jobs over the past year, an increase of 0.4 percent. Jobs on a national basis were up 1.7 percent in the past 12 months. "Unusual weather conditions in the early part of the month were likely a contributing factor in April's job losses, particularly in industries like construction and leisure and hospitality," said DEED Commissioner Shawntera Hardy. "The state's labor market fundamentals remain solid, with the number of unemployed Minnesotans at a 17-year low and the unemployment rate in recent months at its lowest level since August 2000." Other services led all sectors last month with 1,400 new jobs, followed by financial activities (up 1,200), manufacturing (up 900) and government (up 200). Information and the logging and mining sector held steady. 1 The following industries lost jobs in April: leisure and hospitality (down 3,600), trade, transportation and utilities (down 2,000), professional and business services (down 700), construction (down 400) and education and health services (down 200). Over the past year, government led all sectors with 6,297 new jobs. Other industries gaining jobs in the past 12 months were education and health services (up 6,097), manufacturing (up 4,715), trade, transportation and utilities (up 1,254) and financial activities (up 873). Five industries lost jobs in the past 12 months: leisure and hospitality (down 3,314), construction (down 1,627), professional and business services (down 1,352), information (down 789) and other services (down 388). In the Metropolitan Statistical Areas, four regions gained jobs over the past 12 months: Minneapolis-St. Paul MSA (up 0.7 percent), Duluth-Superior MSA (up 0.4 percent), St. Cloud MSA (up 0.4 percent) and Mankato MSA (up 1.6 percent). The Rochester MSA was down 0.6. 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. 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. Not seasonally adjusted Seasonally adjusted Unemployment April 2018 March 2018 April 2018 April 2017 Rate Minnesota 3.2 3.2 3.1 3.4 U.S. 3.9 4.1 3.7 4.4 j April'17-April April'17-April Employment April 2018 March 2018 `18 Level Change `18% Change Minnesota 2,945,600 2,948,800 11,659 0.4 U.S. 148,424,000 148,260,000 242,900 1.7 Over The Year Employment Growth By Industry Sector(NSA) OTY Job OTY Growth U.S. Change Rate CA) OTY Growth Change Rate(%) Total Non-Farm Employment 11,659 0.4 1.7 2 Logging and Mining -107 -1.7 4.4 Construction -1,627 -1.4 4.7 Manufacturing 4,715 1.5 2.1 Trade,Trans. and Utilities 1,254 0.2 1.4 Information -789 -1.6 1.8 Financial Activities 873 0.5 1.6 Prof. and Bus. Services -1,352 -0.4 1.3 Ed.and Health Services 6,097 1.1 2.1 Leisure and Hospitality -3,314 -1.3 2.6 Other Services -388 -0.3 2.0 Government 6,297 I 1.5 -0.1 Metropolitan Statistical Area OTY Employment OTY Employment Change(#,NSA) Change(%,NSA) Minneapolis-St. Paul MN-WI MSA 13,676 0.7 Duluth-Superior MN-WI MSA 607 0.4 Rochester MSA -704 -0.6 St. Cloud MSA 462 0.4 Mankato MSA 901 1.6 -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 3