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HomeMy WebLinkAbout01-24-19 Ity \ AGENDA REGULAR ECONOMIC DEVELOPMENT AUTHORITY MEETING January 24, 2019 6:30 PM Room 170 Todd Larson, Chair; Geraldine Jolley, Vice-Chair Robyn Craig, Steve Wilson, Hannah Simmons Jake Cordes 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA 5. CITIZENS COMMENTS 6. CONSENT AGENDA (a) Approve Meeting Minutes (December 20, 2018, Regular Meeting) (b) Monthly Financial Statements 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS (a) DRAFT 2019-2021 Strategic Plan for Economic Development (b) Facade Improvement Grant Program Analysis 9. DIRECTOR'S REPORT (a) January Director's Report 10. ADJOURN AA. City of Farmington /4„.,4 430 Third Street Farmington, Minnesota 651.280.6800 -Fax 651.280.6899 ,,►roar' www.ci.farmington.mn.us TO: Economic Development Authority FROM: Cynthia Muller,Administrative Assistant SUBJECT: Approve Meeting Minutes (December 20, 2018, Regular Meeting) DATE: January 24, 2019 INTRODUCTION/DISCUSSION Please find attached the draft meeting minutes from the December 20, 2018, EDA meeting. ACTION REQUESTED Approve the December 20, 2018, EDA minutes. ATTACHMENTS: Type Description D Exhibit December 20, 2018 Minutes MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting December 20, 2018 1. CALL TO ORDER The meeting was called to order by Chair Larson at 6:30 p.m. Members Present: Larson, Craig, Cordes, Jolley, Simmons, Wilson Members Absent: Corraro Also Present: Adam Kienberger, Community Development Director; Jeff and Kristie Kerr, Homestead Community Church; Kara Hildreth 2. PLEDGE OFALLEGL4NCE 3. ROLL CALL 4. APPROVE AGENDA MOTION by Jolley, second by Wilson to approve the Agenda. APIF,MOTION CARRIED. 5. CITIZEN COMMENTS/PRESENTATIONS 6. CONSENT AGENDA MOTION by Cordes, second by Simmons to approve the Consent Agenda as follows: a) Approved Meeting Minutes (October 25, 2018, Regular Meeting) b) Approved Meeting Minutes (November 29, 2018, Special Meeting) c) Received Monthly Financial Statements APIF, MOTION CARRIED. 8. DIRECTOR'S REPORT a) December Director's Report Riste Lot- In the past the EDA has discussed the Riste lot on Oak Street next to the Exchange Bank building and whether to sell it or what to do with it. Jeff and Kristie Kerr with Homestead Community Church have a purchase agreement to purchase the Exchange Bank building. They have expressed an interest in the Riste lot. Mr. Kerr stated their church has been using the Faith United Methodist Church. They have been working with Mr. Hosmer Brown for the last few years to purchase the Exchange Bank building. Regarding the Riste lot, there is no intent right now to build on the lot. They would keep it green space and use it for an outdoor church gathering space. For church services they would use on-street parking and the Second Street parking lot. The downtown is quiet on Sunday mornings so parking should not be an issue. They have 150 members. Member Wilson asked if they would be looking to the city for help in restoring the historical characteristics of the building. Ms. Kerr stated the building has been inspected and they have obtained the costs for what they would need. They EDA Minutes(Regular) December 20,2018 Page 2 are currently obtaining financing. They do not want to change the character of the building. The grant money will help to get it back to what it should be. In its current state, the building does not have a certificate of occupancy due to a number of deficiencies inside the building. Children classrooms would be downstairs and the upstairs would be great for the main meeting space. Their church enjoys throwing parties and inviting the community. The outdoor space would also be used for church events. Regarding the purchase of the Riste lot, it is owned by the EDA. In 2012 or 2013 Community Development Block Grant(CDBG) dollars were used to fund part of the acquisition and demolition of the Riste building. There are some repayment provisions upon the sale of the lot to a private entity. The price is determined by an appraisal which came to $25,000. The EDA is obligated to repay to the CDBG program 76.9% of the sale price. The funds go back into Farmington's block grant dollars. Community Development Director Kienberger stated first we need to determine if the EDA is interested in what the Kerr's have proposed for the lot. The appraisal will need to be refreshed. Member Jolley stated the EDA needs to know if it will be attractive and fit into the neighborhood as it is the heart of downtown. Mr. Kerr stated their desire is to add aesthetic value and bring new life to the downtown. Ms. Kerr stated they have been given a six to nine month renovation timeline, so they hope to be done by the fall. If they acquire the Riste lot as well, any work there would be done at the same time. Member Craig asked about the property to the back of the lot and whether it needs to be fenced off. There are large boulders there now to keep vehicles off the lot. Staff stated about four years ago the Planning Commission approved a conditional use permit to operate a church within the downtown business district for the Exchange Bank building. That piece remains in place. What has not been explored is this as a stand alone use and whether the Riste lot would be an accessory use. An agreement needs to be drawn up with any provisions and to have things done within a certain amount of time. The EDA can accept less than the appraised amount, however, the 76.9% is assessed against the appraised market value. The EDA should receive an offer on the lot first, and then the appraisal would be refreshed. Staff asked if the EDA had any contingencies they would like included in the agreement. Chair Larson suggested having the lot work completed by October 1, 2019. Member Wilson would like to see a sketch plan for the outside area. The steps would be to have this discussion first, get a general consensus of the concept, move to the next formality of offering a price, negotiate any improvements to be made by a specific date and then any applications for grant programs. Ms. Kerr asked if the grant program is per person or per property. Staff stated we have the Façade Improvement Grant Program which is for exterior EDA Minutes(Regular) December 20,2018 Page 3 façade improvements and dollars are controlled solely by the EDA. So there is some discretion that can take place. The grant range is from $1,500 to $10,000. The Block Grant Program is dollars received through HUD via the CDA and has a maximum grant amount of$35,000. Our current balance in that program is $21,038.50. The grant programs are focused on one per property. They can both be applied for and could both be accepted at the EDA's discretion. The Façade Improvement Grant Program is for building façade improvements and the CDBG program is for code improvements, so the Riste lot would not be eligible. Staff will continue to work with the Kerr's on procedural issues. Highway 3 Corridor Plan—There was a joint work session with the city council on December 10, 2018, to review public comments and provide direction to the consultant. Staff is scheduling the next set of meetings for public input and additional collaboration with the city council, EDA and planning commission. The plan should be completed in April 2019. Façade Grant Update—The improvements at 306 Oak Street are complete and a grant payment of$10,000 has been authorized. 2019—2021 Strategic Plan for Economic Development—This will be discussed at the January 2019 EDA meeting. Member Simmons asked about the status of the sponsorship packages for the Rambling River Center Plaza because we are going into another spring and people are hoping to see some progress. She asked if that can be a standing item on EDA agendas. Staff spoke with the city council at a recent work session to discuss funding strategy and cost and how it relates to the 2019 budget. We will be using 2019 to raise the funds. Member Simmons stated so construction wouldn't start until 2020 or 2021 and the plan was approved two years ago. Staff explained they have been communicating between the city council and different agencies on funding. Member Jolley noted the plaza is not an EDA project, but we were asked to contribute dollars. Staff explained the project lives within community development,parks and engineering. 7. DISCUSSION ITEMS a) Community Development Block Grant Funds 2019 CDBG funds are received each year from the CDA. We are scheduled to receive an estimated $39,703.50 in CDBG funds for program year 2019 (July 1, 2019— June 30, 2020). Our task is to tell the CDA how we plan to spend those funds. Staff proposed three activities: $5,000 to Senior Services—Financial Support Program to support seniors in attending programs and activities. $13,961.50 to the Commercial Rehabilitation Grant Program—right now we have $21,038.50 left and this addition would equal $35,000 which is the maximum grant amount. EDA Minutes(Regular) December 20,2018 Page 4 $20,742 to the Residential Rehabilitation/Home Improvement Loan Program— this is administered by the CDA for income qualified households within Farmington to make eligible improvements to their properties. There is usually a wait list for this program. We are allowed the flexibility through CDA administrative approval to reallocate funds within these three programs as long as it is within the same year. MOTION by Wilson, second by Craig to recommend the city council approve a resolution to allocate a total of$39,703.50 in CDBG funds for PY2019 as outlined above. APIF,MOTION CARRIED. 9. ADJOURN MOTION by Wilson, second by Cordes to adjourn at 7:23 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Administrative Assistant o City of Farmington 430 Third Street Farmington, Minnesota leb 651.280.6800 - Fax 651.280.6899 r. PROO www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Monthly Financial Statements DATE: January 24, 2019 INTRODUCTION/DISCUSSION Please find attached the monthly financial statements for the EDA. ACTION REQUESTED ATTACHMENTS: Type Description D Exhibit Financial Snapshot-January Department Actual vs Budget-Generic Time Period Business Object Account Cumulative 12 Cumulative 12 Cumulative 12 Cumulative 12 Unit Account Description Actual Budget Actual Budget 2019 2019 2018 2018 2000-HRA/ECONOMIC DEVELOPMENT 1010 CASH 237,561.13 2000-HRA/ECONOMIC DEVELOPMENT 1010 CASH-LGA ASSMNT RELIEF 35,000.00 2000-HRA/ECONOMIC DEVELOPMENT 1505 PREPAID EXPENSES 595.00 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 -2,300.00 -4,862.48 -3,100.00 2000-HRA/ECONOMIC DEVELOPMENT 5205 OPERATING TRANSFERS -50,000.00 0.00 0.00 2000-HRA/ECONOMIC DEVELOPMENT 6401 PROFESSIONAL SERVICES 11,680.00 10,893.41 11,680.00 2000-HRA/ECONOMIC DEVELOPMENT 6403 LEGAL 4,000.00 911.00 4,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6404 IT SERVICES 8,317.00 8,297.00 8,297.00 2000-HRA/ECONOMIC DEVELOPMENT 6422 ELECTRIC 300.00 239.95 300.00 2000-HRA/ECONOMIC DEVELOPMENT 6426 INSURANCE 130.00 153.07 130.00 2000-HRA/ECONOMIC DEVELOPMENT 6450 OUTSIDE PRINTING 500.00 0.00 500.00 2000-HRA/ECONOMIC DEVELOPMENT 6460 SUBSCRIPTIONS&DUES 2,500.00 1,095.00 2,500.00 2000-HRA/ECONOMIC DEVELOPMENT 6470 TRAINING&SUBSISTANCE 3,000.00 1,982.32 3,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6485 MILEAGE REIMBURSEMENT 1,000.00 243.23 1,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6492 ADVERTISING 3,000.00 0.00 3,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6550 DEVELOPER PAYMENTS 25,977.86 2000-HRA/ECONOMIC DEVELOPMENT 6570 PROGRAMMING EXPENSE 17,000.00 12,575.19 17,000.00 2000-HRA/ECONOMIC DEVELOPMENT 7310 OPERATING TRANSFERS 2,850.00 2,850.00 2,850.00 Total 2000-HRA/ECONOMIC DEVELOPM 1,977.00 0.00 51,157.00 1,977.00 0.00', 51,157.00 1,977.00', 0.00 51,157.00 1/17/2019 3:24:22 PM Page 1 of 1 Qt�F j ,� City of Farmington viskps 430 Third Street Farmington, Minnesota 651.280.6800 - Fax 651.280.6899 r,4 ,+ www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: DRAFT 2019-2021 Strategic Plan for Economic Development DATE: January 24, 2019 INTRODUCTION/DISCUSSION Please find attached a cover memo and draft 2019-2021 Strategic Plan for Economic Development. This document is the result of the EDA's planning workshop, relevant guiding documents, and staff input. Rusty Fifield and Jessica Green with Northland Public Finance will be at the meeting to present this draft plan and solicit feedback for a final version. ACTION REQUESTED Review the draft 2019-2021 Strategic Plan for Economic Development and provide any comments or changes at the meeting. ATTACHMENTS: Type Description o Cover Memo Northland Cover Memo o Exhibit DRAFT 2019-2021 Strategic Plan for Economic Development NORTHLAND PUBLIC FINANCE MEMORANDUM To: Farmington EDA From: Rusty Fifield and Jessica Green Date: January 18,2019 Re: Strategic Plan Update This memo presents the proposed update to the Farmington EDA Strategic Plan.The update is based on the discussion at the November 29 workshop and input from staff.The proposed Strategic Plan for 2019-2021 is divided into four elements: 1. Context.This section describes the framework for actions taken by the EDA.The powers of the EDA come from both State Law and city enabling resolution.The actions of the EDA play a role in implementing the city's comprehensive plan.The EDA operates within the broader context of city government and with finite resources.All of these factors shape the Strategic Plan. 2. Objectives.The Objectives attempt to state the broad public purpose of EDA actions.We believe the objectives lie at the heart of the issues discussed at the workshop.The Strategic Plan includes background information and discussion of each Objective.This information helps to describe the relevance of the objective. 3. Tactics.Tactics represent strategies to achieve the Objectives.The Tactics are intended to be ongoing and enduring guides to EDA actions.They form criteria for evaluating decisions.Is the decision consistent with the Tactics and the Strategic Plan? 4. 2019 Action Plan.The final element of the Strategic Plan provides immediate and tangible actions for the EDA.Including annual action plans promotes ongoing use of the Plan.It is also means of structuring an annual review of actions taken by the EDA and consideration of actions needed in the coming year. Each previous version of the Strategic Plan has taken a different form.We believe that the proposed Plan update is well-suited to the EDA in 2019.The Plan will help other parties understand the work of the EDA.The Plan should also provide better context for future planning.The EDA in 2021 will have a greater understanding of the basis for the 2019-2021 Plan update. We will be at your January meeting to present and discuss the Strategic Plan update. 150 South 55 Street,Suite 3300,Minneapolis,MN 55402 Main:(612)851-5900/Direct(612)851-4992/Email:rfifield@northlandsecurities.com Member FINRA and SIPC Strategic Plan 2019 - 2®21 Farmington Economic Development Authority amu: v. - .a - ,+'" January 2019 sa. NORTHLAND PUBLIC FINANCE EDA Strategic Plan 2019-2021 CONTENTS Contents 1 Introduction 2 Context 3 EDA Powers 3 Comprehensive Plan 3 City Government 4 EDA Resources 5 Strategic Plan 6 Objective: Expand and Diversify the Tax Base 6 Objective: Encourage development that brings additional goods and services to Farmington 11 Objective: Promote the economic and physical health of older sections of Farmington....12 Objective: Effectively communicate information about the EDA within City government,to the community and to people and businesses outside of Farmington. 13 Objective: Conduct the business of the EDA to maximize its effectiveness 14 January 2019 EDA Strategic Plan 2019-2021 2 INTRODUCTION This document presents the Strategic Plan for the Economic Development Authority(EDA) of the City of Farmington. The EDA Strategic Plan serves several purposes: • The plan articulates the vision,mission and fundamental principles that guide decision making and actions for the EDA. • The plan provides a framework for identifying potential roles for the EDA,prioritizing use of resources and periodically reviewing actions taken by the EDA. • The plan serves as a tool for communicating information about the EDA to the city council,city departments and advisory boards,partner organizations in the economic development community and Farmington residents and businesses. The Strategic Plan focuses on the years 2019 through 2021. Vision Statement The Economic Development Authority's vision 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. Mission Statement Farmington is commerce friendly, responsive, and innovative in the realm of economic development. The Economic Development Authority's mission is to market Farmington as one of Minnesota's most desirable cities to open a business. January 2019 EDA Strategic Plan 2019-2021 CONTEXT The actions of the EDA do not occur in a vacuum,but within the context of city government and development forces that affect Farmington and the region. Understanding this context is an important element of creating and implementing the strategic plan. EDA Powers The powers of the EDA come from both State Law and city enabling resolution. The EDA can exercise the powers set forth in Minnesota Statutes,Section 469.090 through 469.108 unless otherwise limited by the city council.The Farmington EDA was established by Resolution R104- 05 (the"Enabling Resolution").The Enabling Resolution empowers the EDA to use all statutory authority with the following exceptions: • The sale of all bonds or other obligations issued by the EDA shall first be approved by the city council. • The EDA shall follow the budget process for city departments as may be provided by the city and as implemented by the city council and Administrator. • All official actions of the EDA shall be consistent with the city comprehensive plan and official controls implementing the comprehensive plan. The Enabling Resolution also transferred all activities,programs,operations and authority relating to economic development from the Farmington Housing and Redevelopment Authority (HRA). The EDA is authorized to exercise all of the powers granted to the HRA pursuant to Minnesota Statutes,Sections 469.001 through 469.047. No actions contemplated by the Strategic Plan are impaired by the limitations of State Law or the Enabling Resolution. Comprehensive Plan The Economic Development chapter of the 2040 Comprehensive Plan provides a framework of the activities of the EDA. "The Economic Development Plan (Chapter 9 of the Comprehensive Plan)provides a high level and long- term roadmap for the City of Farmington and its partners (public,private,and nonprofit sectors) to work together to enhance employment, investment and quality of life opportunities that benefit the entire community. The city recognizes that local government has a responsibility for creating an environment in which economic development can occur. This plan also serves to examine and strengthen the city's ability to compete effectively and prosper in both the regional and increasingly global economy." The Comprehensive Plan contains eight(8) economic development goals. As part of the process of creating this Strategic Plan,the EDA validated the importance of these goals for guiding the actions of the EDA.The following list contains the economic development goals in order of the ranking of the EDA Board: January 2019 EDA Strategic Plan 2019-2021 4 1. A three-year Strategic Plan for Economic Development that provides a dynamic and actionable tool for achieving the community's economic development vision. 2. Cultivation of strong relationships between existing businesses and the city to increase business retention. 3. A desirable commercial environment for residents is created through growth from existing and new businesses. 4. Healthy and diversified growth of existing and new businesses to achieve the community's 2030 and 2040 employment projections. 5. Redevelopment of vacant and underutilized properties in older areas to revitalize these vital community areas. 6. Public and private sector reinvestment in downtown to revitalize it as the community's commercial,cultural,and recreational center. 7. Diverse housing options and quality of life amenities that support the needs and preferences of the community's workforce into the future. 8. A well-trained and adaptable workforce is maintained within the community to support the projected business and job growth. These goals provide a useful tool for evaluating EDA activities.How does the activity help to achieve the goals of the Comprehensive Plan?A consistent connection between these goals and EDA activities ensures that the EDA meets its mandate of consistency with the Comprehensive Plan. City Government An essential factor shaping the Strategic Plan is the EDA's fit within the overall structure of the city. The EDA is one of five advisory boards and commissions established by the city council. The EDA is different from any other board in that it has the power and resources to undertake projects in a relatively autonomous manner.State Law designates EDAs as political subdivisions. Farmington Community Community City Council City p Develo ment Residents Business Administrator Director Economic Development Authority(EDA) The EDA is governed by a 7-member board of commissioners appointed by the city council. Members of the EDA board consist of two city council members,two Independent School District 192 school board members,and three residents. Economic development staff is part of January 2019 EDA Strategic Plan 2019-2021 5 the City's Community Development Department. The Community Development Director serves as the Executive Director of the EDA. This structure combines the dedicated focus on economic development and statutory powers of the EDA with a day-to-day foundation in the core structure of the city. EDA Resources Creating and implementing the Strategic Plan must be done with an eye towards the resources of the EDA.With limited resources,the effective use of resources should be a factor in evaluating current and future activities. Do the potential benefits of the action merit the allocations of EDA resources? The most important resource of the EDA is city staff. The experience and technical skills of economic and community development staff provide the capacity to successfully achieve EDA objectives. The staff resource available to the EDA is a finite commodity. It is also a commodity that serves other functions within city government. January 2019 � ' EDA Strategic Plan 2019-2021 6 STRATEGIC PLAN The EDA Strategic Plan is based on the following Core Strategies: • Attract new businesses that provide jobs,needed goods and services,and tax base • Encourage the retention and expansion of existing business • Encourage revitalization and redevelopment • Manage EDA programs and projects • Be the voice of economic development in city government The Core Strategies guide EDA actions. All actions shall be consistent with one or more of the Strategies. Objective: Expand and Diversify the Tax Base Economic development is not an end itself,but rather a means to achieve certain outcomes. An important outcome in Farmington is to grow the property tax base. Preliminary tax rates for taxes payable 2019 show Farmington with the fifth highest city tax rate for Dakota County cities (over 1,000 population). When all other taxing jurisdictions are included,the total tax rate in Farmington is the highest in Dakota County. Preliminary 2019 Tax Rates 160.00 140.00 120.00 — a a) 100.00 — — — � �'� 80.00 t X I— 60.00 I I — , 40.00 I ■ III I111 20.00 \e � �� \e-;\ d)" o�a' � ese, \"-;' \N`7 t � 0a �o -4kaao PQM\ ti ■City Rate All Others Rate Figure 1 Tax base is a key factor in a higher tax rate. A lower tax base means that the city must tax at a higher rate to generate revenue needed to operate the city. A comparison with other Dakota County cities provides some perspective on Farmington's tax base. Figure 2 shows total Pay January 2019 �N s EDA Strategic Plan 2019-2021 7 2019 Taxable Market Value by property classification. Figure 3 compares the distribution of Taxable Market Value among the property classifications. Taxable Market Value Taxes Payable 2019 8,000,000,000 aimmommisma 7,000,000,000 6,000,000,000 All Other 5,000,000,000 ■Agriculture 4,000,000,000 Industrial 3,000,000,000 ■Commercial 2,000,000,000 ---- -- ■Apartments 1,000,000,000 ■ Residential Farmington Lakeville Rosemount Hastings Apple Valley Figure 2 Taxable Market Value Taxes Payable 2019 100% > st_ ,: ,: 90% ter 80% 70% U U U All Other 60% U U U U •Agriculture 50% ■ ■ ■ ■ Industrial 40% ■ 1111 ■ ■Commercial 30% ■ ■ ■ ■Apartments 20% - ■ ■ ■ • Residential 10% ■ 0% Farmington Lakeville Rosemount Hastings Apple Valley Figure 3 January 2019 EDA Strategic Plan 2019-2021 8 • Hastings has less Taxable Value than Farmington($1.52 billion to$1.74 billion). However,the portion of the total tax base in commercial and industrial property is more than double in Hastings (11%)in comparison to Farmington(5%). • The commercial/industrial share of the tax base in the comparison cities ranges from 9.66% in Apple Valley to 11.24% in Rosemount. • Rosemount provides a good contrast to Farmington. The cities have similar populations (Farmington 22,421 -Rosemount 23,956),but Farmington has 29% less tax base.Total Taxable Market Value per capita in Farmington is$87,866 and$116,100 in Rosemount. Growing and diversifying the tax base has a variety of benefits. A growing tax base gives the city more flexibility in funding services and capital improvements. This flexibility would likely extend to the EDA budget. The demands for operating revenues may limit the ability to lower the tax rate,but a growing tax base lessens the need to raise rates. Growing the tax base is one of the only means available to the city to promote reductions in other parts of the total tax rate. A diversified tax base changes the impacts of economic downturns as value changes vary among property types. Commercial and industrial development make different use of city services than residential with the potential for comparably less pressure to increase services and spending. EDA efforts to grow the tax base must be done thoughtfully and strategically.The Minnesota property tax system affects the ability of the city to realize growth in the tax base from new development.40% of all new commercial-industrial value goes into the Fiscal Disparities Pool and is not available for local taxation. The use of tax increment financing (TIF) or tax abatement defers the benefits of new tax base until the financial assistance ends. Property class rates set by the Legislature convert the Assessor's Estimated Market Value to Tax Capacity (taxable)value at different rates. Figure 4 illustrates these points.This chart compares the Tax Capacity value available to the city (and other taxing jurisdictions)from alternative development of 100 acres. January 2019 EDA Strategic Plan 2019-2021 9 Tax Capacity From Alternative Land Uses Industrial Retail Single Townhome Acres 100 100 100 100 Lot Coverage/Density 30% 30% 3 6 Development (SF or Units) 1,306,800 1,306,800 300 600 EMV per SF or Unit 65 125 330,000 330,000 EMV 84,942,000 163,350,000 99,000,000 198,000,000 Tax Capacity 1,698,090 3,266,250 990,000 1,980,000 Fiscal Disparities 40% 40% 0% 0% Net Local Tax Capacity 1,018,854 1,959,750 990,000 1,980,000 2,500,000 2,000,000 a, @ 1,500,000 l0 ris1,000,000 coH 500,000 0 Industrial Retail Single Townhome Figure 4 Expansion of the tax base also comes from within. The Economic Development chapter of the Comprehensive Plan notes that"research from numerous sources shows that existing businesses create 60%-90% of all new economic growth in a community". A focus on local businesses is a more efficient means of expanding the tax base. Resources applied to business expansion are more likely to yield returns than using the same resources to compete with other cities. Resources are applied to businesses already in Farmington rather than competing with January 2019 EDA Strategic Plan 2019-2021 10 other cities. The use of financial incentives (if needed) is typically lower and more closely aligned with project need. Tactics 1. Create and maintain strong relationships and lines of communication with local business to identify opportunities for the EDA to enhance success and encourage expansion. 2. Be prepared to receive and effectively respond to inquiries about locating businesses in Farmington. 3. Make use of tax increment financing and tax abatement,pursuant to city policies,to achieve the objectives of the Strategic Plan. 4. Use tax increment financing and tax abatement only when the benefits received from the development outweigh the deferred tax base. 2019 Action Plan 1. Create and conduct a comprehensive business needs/assessment survey. 2. Review and update (as needed) economic development promotional materials. January 2019 EDA Strategic Plan 2019-2021 11 Objective: Encourage development that brings additional goods and services to Farmington Building and maintaining a strong core of commercial development is important to Farmington. When necessary goods and services are not available locally,residents travel to other cities to shop.These trips often result in additional shopping that could have occurred in Farmington. The EDA seeks to encourage commercial development that reduces this out-migration and complements existing businesses. The EDA has limited control over the type and pace of commercial development. Market forces tend to be the primary force in commercial growth. In that regard,commercial development and job growth are directly related. New,well-paying jobs located in Farmington may produce the demand for new housing. These new"rooftops" create the market sought by commercial development. The EDA can facilitate commercial development by providing desirable business districts. Farmington has a history of creating community plans for such business districts.Plans for Vermillion River Crossing and Downtown Farmington provide the framework for public and private investment. In 2019,the city will be completing a plan for development in the Highway 3 Corridor.The ongoing implementation of these plans is an important EDA objective. Tactics 1. Attract new businesses that produce jobs that are likely to create or retain households and expand the local market for new commercial development. 2. Prepare and implement plans that provide desirable locations for new commercial development. 2019 Action Plan 1. Continue to work with brokers and land owners to attract developments to Vermillion River Crossings area. 2. Create ongoing means of communicating actions related to the implementation of the Downtown Redevelopment Plan to the EDA. 3. Play an active role in the completion of the Highway 3 Corridor Study and seek effective implementation strategies. January 2019 EDA Strategic Plan 2019-2021 12 Objective: Promote the economic and physical health of older sections of Farmington. One of the Economic Development Goals of the Comprehensive Plan is"redevelopment of vacant and underutilized properties in older areas to revitalize these vital community areas". In reality,there are two aspects to redevelopment.The most effective strategy is to promote the economic and physical health of the community to avoid the need for redevelopment. If the need for redevelopment exists,however,it is important to prevent blighting conditions to spread to other properties. The EDA has taken a proactive approach to redevelopment by creating plans for the Downtown and the Highway 3 Corridor. These plans provide a framework for public and private investment. Implementation of these plans is not the sole responsibility of the EDA. The EDA must coordinate its efforts with the city council,planning commission and other stakeholders. Tactics 1. Engage on a consistent basis with the planning commission to share goals and develop strategies. 2. Support the outcomes and implementation of the Highway 3 Corridor Plan. 3. Review and promote existing programs that target key areas. 2019 Action Plan 1. Schedule quarterly joint work sessions with the planning commission to align priorities. 2. Complete and identify initial implementation steps of the Highway 3 Corridor Plan. 3. Meet with Dakota County CDA staff(or invite to EDA meeting) to discuss programs. January 2019 EDA Strategic Plan 2019-2021 13 Objective: Effectively communicate information about the EDA within city government, to the community and to people and businesses outside of Farmington. Communication is an essential function of the EDA. Communication with the city council promotes collaboration on shared objectives and builds the foundation for the financial resources required by the EDA. Communication with the community explains the work of the EDA,highlights the positive impact on the community and offsets potential misinformation. Communication informs the business community,both within and outside of the community, about the opportunities to do business in Farmington and the assistance available from the EDA. The city's website is the most important communication tool for the EDA.The website is the place people look for information about the EDA. Farmington's online presence for economic development should be guided by several factors: • Information about the EDA and economic development in Farmington must be easy to find on the website. • The information on the website must be useful. • The form and content of the pages devoted to economic development should convey a positive message that creates interest in Farmington. Tactics 1. Utilize the city's website as the primary point of information about the EDA and economic development in Farmington. 2. Ensure that the website contains useful information for businesses evaluating potential development in Farmington. 3. Make use of the newsletter and other ongoing city communications to provide information about the EDA. 2019 Action Plan 1. Review other websites to identify elements that could be incorporated into Farmington's website. 2. Review and enhance the city's webpage(s) related to Economic Development. 3. Develop one or more new communications tools to relay the messages and work of the EDA. 4. Shift the monthly"Director's Report" in the EDA packet to a more public-facing newsletter. 5. Develop a social media strategy to promote the work of the EDA. January 2019 EDA Strategic Plan 2019-2021 14 Objective: Conduct the business of the EDA to maximize its effectiveness. While this objective seems obvious,it is important to make it a stated objective of the Strategic Plan. The EDA operates with limited resources in terms of funding,staff time and board responsibilities. All decision-making must consider the effective use of these limited resources. Tactics 1. Provide consistent information to the EDA about its financial condition and existing obligations. 2. Provide the EDA with consistent updates on the status of the action plans for the Strategic Plan and other ongoing initiatives of the EDA. 3. Annually update the action plans in the Strategic Plan. 2019 Action Plan 1. Provide annual comprehensive review of the EDA's finances in March. 2. Develop a standardized template for providing specific project updates. 3. Explore ways to enhance the effectiveness of monthly board meetings. 4. Create a process to annually review and update action plans in the Strategic Plan. January 2019 41kRift, City of Farmington ( 430 Third Street Farmington, Minnesota 651.280.6800 - Fax 651.280.6899 447..A Oli www ci.farmington.mn.us TO: Economic Development Authority FROM: Cynthia Mullet;Administrative Assistant SUBJECT: Facade Improvement Grant Program Analysis DATE: January 24, 2019 INTRODUCTION/DISCUSSION The Downtown Facade Improvement Grant Program started in October 2016. Since its inception through 2018 the following has occurred: Six grants have been approved; the work completed and grant funding submitted (two in 2017 and four in 2018) $30,977.86 in grant funding has been paid out $89,469.46 has been invested by building owners to improve their buildings $120,447.32 is the total amount of all projects completed In 2016/2017 the EDA budgeted $20,000 for grant funding; $5,000 was paid out. Allowed grant amounts were$1,500 to $2,500. In 2018 the EDA budgeted $20,000 for grant funding; increased the budgeted amount by$5,978, resulting in $25,978 being paid out. Allowed grant amounts were$1,500 to $10,000. Since inception, five grant applications have been submitted, but the projects did not take place. ACTION REQUESTED For information only. 4t City of Farmington th ����� Gs 430 Third Street zia Farmington, Minnesota blr 651.280.6800 - Fax 651.280.6899 . www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: January Director's Report DATE: January 24, 2019 INTRODUCTION/DISCUSSION Farmington Expo The 2019 Farmington Expo will be on Saturday, January 26th at the high school from 9-noon. Please make an effort to attend and visit with the local businesses and residents in attendance. Highway 3 Corridor Plan Draft recommendations and project narrative are being developed by the consultant team as work on the Highway 3 Corridor Plan progresses. The project team will have a booth at the Farmington Expo to solicit additional public input and promote awareness of the project. Please stop by to see us if you are in attendance. Riste Lot Update I will provide the EDA with an update on the potential sale of the Riste lot including progress made since our meeting in December. 2019 CDBG Funding Availability I was informed recently that with the federal government shutdown, the Dakota County CDA likely has enough CDBG dollars to meet activities designated in the program year 2018, but 2019 funding may be impacted as available dollars are spent down. EDA Composition Currently the EDA is comprised of two city councilmembers, two school board members and three residents. EDA composition and board member terms are governed by both Minnesota State Statute and local ordinance. At the January 7, 2019 city council meeting, Mayor Larson brought up the possibility of stepping away from his position on the EDA to get the two city council positions back on opposite election cycles. Currently both Mayor Larson and Councilmember Craig serve on the EDA and their city council terms expire at the end of 2020. Mayor Larson asked Councilmembers Bernhjelm and Hoyt, who both have an interest in serving on the EDA, to discuss amongst themselves who of the two of them would serve on the EDA since they share the same election cycle. These two have determined that Councilmember Bernhjelm will serve on the EDA. Also of note is that School Board Member Steve Corraro's seat on the EDA expired on December 315t, 2018. With the expiration of this term and no eligible applications received by the interview deadline, city council is recommending changing the EDA composition to two city councilmembers, one school board member and four residents effective February 4, 2019. An enabling resolution and ordinance will be considered at a public hearing to be held on February 4, 2019, to change the composition. Please thank both Mayor Larson and Steve Corraro for their service on the EDA. Miscellaneous Articles DEED Employment Report—January NEXT MEETING Our next regular meeting is February 28th at 6:30 p.m. This meeting is regularly designated as the EDA's annual organizational meeting. ACTION REQUESTED None, this report is intended to be a monthly update on various development and industry related topics. ATTACHMENTS: Type Description D Exhibit DEED Employment Report-January Adam Kienberger From: DEED Media <MNDEED@public.govdelivery.com> Sent: Thursday,January 17, 2019 10:01 AM To: Adam Kienberger Subject: Unemployment Remains Steady; Four Straight Months at 2.8 Percent For Immediate Release Contact: Shane Delaney, 651-259-7236 January 17, 2018 shane.m.delaneyOstate.mn.us Steve Hine, 651-259-7396 steve.hine(astate.mn.us Unemployment Remains Steady; Four Straight Months at 2.8 Percent ST. PAUL — Minnesota's seasonally adjusted unemployment rate held at 2.8 percent in December, according to data released today by the Minnesota Department of Employment and Economic Development (DEED), marking the fourth straight month with the same unemployment rate. Minnesota's unemployment rate remains the lowest since May 1999 and is just above the all-time low of 2.5 percent held in January and February 1999. The state gained 500 jobs in December on a seasonally adjusted basis. November's previously announced loss of 800 jobs was revised downward to 1,000 jobs lost. Over the year, Minnesota has added 31,441 jobs for a 1.1 percent increase over last December. Private sector gains stand at 28,960 or a 1.2 percent increase. Nationally, the total non-farm and private sector growth rates were 1.8 percent and 2.0 percent respectively. Seven of the eleven major sectors gained jobs in December while four lost jobs. Leisure and hospitality once again led the gains with 2,100 more jobs. Other sectors with gains were, construction up (1,100), manufacturing (up 500), other services (up 500), information (up 300), trade, transportation and utilities (up 200), and logging and mining (up 100). 1 Sectors measuring loses were; professional and business serves (down 2,600), financial activities (down 900), education and health care services (down 700) and government (down 100). Mankato Metropolitan Statistical Area (MSA) once again had the highest over-the- year unadjusted growth in employment at 4.0 percent. Following Mankato MSA was Minneapolis-St. Paul MSA with 1.6 percent growth, Duluth-Superior MSA with 1.1 percent growth and St. Cloud MSA with 0.9 percent growth. Rochester MSA declined 0.2 percent since last December. Use the link to see DEED's 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. 2