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HomeMy WebLinkAbout10-24-19 CITY OF MeetingLocation: FARMINGTONN TON Farmington City Hall ®���=_h. 430 Third Street �/� Farmington, MN 55024 ECONOMIC DEVELOPMENT AUTHORITY REGULAR MEETING AGENDA October 24, 2019 6:30 PM Hannah Simmons, Chair; Steve Wilson, Vice-Chair Katie Bernhjelm, Ryan Butterfield, Jake Cordes, Robyn Craig Geraldine Jolley 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA 5. CITIZENS COMMENTS 6. CONSENT AGENDA (a) Approve Meeting Minutes (September 19, 2019, Regular Meeting) (b) Monthly Financial Statements 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS (a) Business Retention & Expansion Communications Strategy Update (b) EDA Program Financing Update (c) City Council Update 9. DIRECTOR'S REPORT (a) October Director's Report 10. ADJOURN CITY OF O 430 Third St., Farmington, MN 55024 FARMINGTON © 651-280-6800 FarmingtonMN,gov TO: Economic Development Authority FROM: Cynthia Muller,Administrative Assistant SUBJECT: Approve Meeting Minutes (September 19, 2019, Regular Meeting) DATE: October 24, 2019 INTRODUCTION/DISCUSSION Please find attached the draft meeting minutes from the September 19, 2019, EDA meeting. ACTION REQUESTED Approve the September 19, 2019, EDA minutes. ATTACHMENTS: Type Description Exhibit Minutes MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting September 19, 2019 1. CALL TO ORDER The meeting was called to order by Chair Simmons at 6:30 p.m. Members Present: Simmons,Bernhjelm, Butterfield, Cordes, Craig, Jolley, Wilson Members Absent: None Also Present: Adam Kienberger, Community Development Director; Pam Heikkila, Heikkila Studios; Kara Hildreth,Dakota County Tribune 2. PLEDGE OFALLEGL4NCE 3. ROLL CALL 4. APPROVE AGENDA MOTION by Jolley, second by Bernhjelm to approve the Agenda. APIF, MOTION CARRIED. 5. CITIZEN COMMENTS/PRESENTATIONS 6. CONSENT AGENDA MOTION by Bernhjelm, second by Jolley to approve the Consent Agenda as follows: a) Approved Meeting Minutes (August 22, 2019,Regular Meeting) b) Received Monthly Financial Statements APIF,MOTION CARRIED. 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS a) Downtown Facade Improvement Grant Program Application Ms. Pam Heikkila, Heikkila Studios has submitted a grant application for her building at 345 3rd Street. This building was designated as a Heritage Landmark in 2001. The grant request is for$20,722 and a project amount of$41,445. Due to the designation,there are certain provisions in the city code for any building permits issued. The work to be done includes: - Replacing missing bricks, brick repair and tuckpointing with restorative work on various deteriorated areas on both the Oak Street and Third Street sides of the building base - $8,000 - Put new stucco on two brick walls—the north wall along the walkway between the buildings and the upper back side which faces the parking lot- $31,725 - Install sheet metal flashing at the roof base - $1,720 EDA Minutes(Regular) September 19,2019 Page 2 The grant amount requested exceeds the allowed grant amount of$10,000 and exceeds the current fund balance of$500. There is certain design criteria to be followed with landmark buildings. One of the main requirements is that any applicant has to obtain a Certificate of Appropriateness in order to obtain a building permit. In order to obtain this certificate the work must meet the Secretary of Interior's Standards. There are several things to note: 1. The grant amount exceeds what is allowed for a grant and exceeds our current fund balance. 2. At this point a Certificate of Appropriateness has not been obtained. Therefore, staff is recommending this application be continued to a future meeting pending the three items noted in the staff memo. Member Bernhjelm asked if the Certificate of Appropriateness needs to be obtained from the Planning Commission as historic preservation falls under them. Staff explained upon application, it would go on a Planning Commission agenda at a regular meeting and it would be discussed by the Planning Commission. Ms. Pam Heikkila started brick restoration last year at$170,000. The building was appraised for$305,000 this year. She has received multiple quotes and has been working on this for a year and a half. There is no one that will do any brick work until next year. Bricks are falling off the building and they are cleaning them up every day. If anyone on the EDA cares, hopefully you have looked at the building and see how dire this is. If we wait until next year,the building will fall off in big pieces. No one will do brick work this year, so stucco is the only option. It would be on the back top half of the building and the walkway side between the two buildings. It's a structural thing and a crisis at best. This is Farmington's oldest building. We don't have time to wait. If you don't give me a grant, at least give me the permission to protect my building so it stays alive for history. If you don't I would definitely say this commission does not care at all. I have worked on this for a year and a half. In early April, she had a masonry contractor out and said it would cost$100,000 - $200,000. Again,that is way out of her budget. She just took out a loan for the roof and the building is not appraised for that much. She didn't know if the EDA was here to help people or be a huge burden on their back, but if she walks away and they say she can't protect her building, she has strong words for this committee. If you even postpone it, I would say you are anti-protecting the buildings downtown. She has bids for$312,000 from a Farmington company to just fix the bricks. Her business has been bringing people into this community for a long time. The EDA needs to be here to help. If you postpone it, it will fall. She has someone who will do stucco this fall. She has had 20 contractors come and none of them will do it. So either I can protect it, or it will fall. The bricks are like sugar. One more winter, and it will be much worse than it is now. EDA Minutes(Regular) September 19,2019 Page 3 Chair Simmons stated Ms. Heikkila did a really nice job with her application and it is very well laid out. Just to clarify for this committee,this committee cares very deeply. You will not find more citizens who are volunteering their time and want to utilize this program more than the people in this room. But we are bound to follow the order of procedures which in this case, is the Heritage Preservation Commission has to approve that building plan before we can allow dollars to go to it. She asked what is the barrier for getting on their agenda first? Is it that the stucco isn't approved and that is why you are coming to us? Ms. Heikkila stated it was her understanding that if it is in the walkway and the back and people are not seeing it, she would think the committee would just say go fix your building. Chair Simmons stated that is the Planning Commission. So is that why you haven't gone to them, is because of your interpretation of the guidelines? Ms. Heikkila stated all summer she has worked on getting bids and masonry people are busy. They give a bid, but can't do the work this year. Member Bernhjelm felt she needs to go through the Planning Commission process. We would need to find the dollars if we were going to approve it this year, as we have spent our budget this year. Member Butterfield asked why she is requesting over the allowed amount. Ms. Heikkila stated the last bid she received was $312,000. So this is to just stop the building from falling. She just took out a loan for the roof The other alternative is she closes the business and you have another empty building to look at. Member Butterfield stated the grant program goes to $10,000. So tell us why we should pay out$20,000. The grant money has been paid out to other people that have applied. Ms. Heikkila stated it is Farmington's oldest building, they do school tours, troops were quartered there during the war. The history of the building is so rich. Other buildings don't have that kind of history. It's 142 years old. It showcases Farmington very well and it is what you would want a lot of the businesses to look and feel like. That is what she is trying to do for the community. Member Bernhjelm stated the only thing that can be done this year is the stucco on the walls. Ms. Heikkila clarified all of that can get done this year. She wants to get on the contractor's list for next year for the other two sides. She doesn't have those funds and even if she did, she wouldn't put it in there because you are not going to get it out. It won't sell for that much. She is doing it as a donation to Farmington. She will never get her money back out. Member Butterfield asked if there are any other county or state grants for historical building restoration that could help. Staff stated nothing that seems to be a match. Chair Simmons recalled funds from a CDBG grant at one time. Staff stated we used CDBG funds for$20,000 for the roof. That was about two years ago. EDA Minutes(Regular) September 19,2019 Page 4 Member Jolley asked when applicants approach us about a grant do you explain the parameters? Staff stated yes. So she is aware $10,000 is the top limit. Ms. Heikkila has been working on obtaining bids and no one is able to do it this year until she found this one company. Member Jolley stated if we were to approve this, we would need to alter our rules for this program,which is something we haven't done for others. Ms. Heikkila stated, but they don't have the historical premise that her building does. Chair Simmons stated the owners of Homestead Church were facing hundreds of thousands of dollars for their building and they requested a grant for the $10,000 limit. With any adjustment we would have to be very thoughtful with that going forward. The goal of the program was to have more impact on more businesses so we could do more than two businesses a year. We need to be thoughtful of that especially since we have had very large projects approach us and we have stuck within those parameters. Ms. Heikkila stated she is very grateful to see that building filled. Member Wilson tried to recall when we set this up, do we approach businesses with this program to let them know, and have we done that. The question that is impossible to answer is, if there was an active Heritage Preservation Commission, and given their lense is only focused on that aspect, would they have brought this forward as something that really needs attention. His second thought, is given the amount of resources this committee and the city has as a whole spent on downtown, he wondered if we really say we have this grant program, but it needs to be targeted toward maintaining one of our most valuable assets,which is our downtown. That would be a shift in how we have done things. Member Bernhj elm felt there is a line between private business owners and the city. She fully supported the idea of Ms. Heikkila trying to maintain a historic building. When allocating city dollars for the downtown for sidewalks, the Rambling River Center, etc., to offer out money for private businesses starts going down a path she is not comfortable with as a governing body. She wants to support businesses, but she doesn't want to get into discriminating against businesses because we are soliciting who we think should be improved upon. Member Simmons felt this discussion is more for our next item and brought it back to this application. Staff stated the next Planning Commission meeting is October 8, 2019. Could this building plan get on that agenda? Staff replied yes. Members stated she could then come to our next meeting or we could call a special meeting. Ms. Heikkila stated by the end of October it is too late, because with masonry or stucco it has to be warm enough to do the work. She invited members to come see her building. She should have had it painted, but she had no idea it would deteriorate overnight. The bricks are like sugar. Member Butterfield asked if she was aware she needed a Certificate of Appropriateness. Ms. Heikkila stated no. She didn't think masonry was that EDA Minutes(Regular) September 19,2019 Page 5 expensive. She went through many companies and most can't do the work until next year. She noted 50%of her clients are not from Farmington. Chair Simmons stated the committee appreciates her urgency. In the past they have called special meetings for urgent issues and this committee is willing to do that. Member Bernhjelm appreciated the urgency also, but we have to work through the budget and there are steps you need to take in the meantime. Member Butterfield stated she started this process last year with getting bids. So it is a little unfair to come to the committee now and present this that it has to be done now. The committee is very open for you to get the certificate and we can re- evaluate our program, but those things will take this meeting and the next meeting. Ms. Heikkila understood, but she has one person that can do it this year. Until then, she could not find someone who was able to do it. Member Cordes suggested scheduling an EDA meeting for October 9, 2019. Staff stated part of what we are trying to address with this issue is not put the actions of the HPC into the EDA, but provide enough background and detail to inform the decisions we make tonight. Some of the materials in the application outline some of the criteria the HPC is obligated to weigh in analyzing how a Certificate of Appropriateness would be issued for any scope of work. This is the first time we have seen a scope of work submitted for a building that caused us to do some initial research to determine how a Certificate of Appropriateness would be issued apart from any application to the EDA. There could be other professions in historic preservation brought in to review that. Everything could be done in a couple weeks, but it is not a guarantee that the Planning Commission would issue a Certificate of Appropriateness on October 8, even pending additional submittals based on our understanding of the Secretary of the Interior's Standards qualifications and requirements for different types of exterior applications to a historic building. It is not a certainty that it would be issued. Ms. Heikkila is trying to keep it as historic as possible. Anything that faces the outside streets, she will try—she has a painting bid for next year so the same thing doesn't happen. Staff stated there is a fair amount of due diligence that will need to be done to issue a Certificate of Appropriateness. Member Butterfield stated there are a couple other discussions that need to follow and one is our next item,providing a funding increase to the grant program as is and a second discussion is the current bid and increasing the bounds of the program and that is not on today's agenda. MOTION by Bernhjelm, second by Craig to continue this application to a future meeting. APIF,MOTION CARRIED. Chair Simmons stated staff will keep the EDA informed and action will be taken based on the action of the Planning Commission. Ms. Heikkila is very concerned that if the project isn't started in October, it will be too cold and she will be taken off the list. EDA Minutes(Regular) September 19,2019 Page 6 Member Wilson asked if a project can be started for this program. Staff stated a project cannot be started if grant funding will be requested. What if part one is started and done and then part 2 is brought to us. Staff stated you can do a project in pieces, but the EDA needs to consider that they are considering what is within the scope of the application. Other work can be done to the building that is based on city code. Member Wilson noted we only have $500 left in the budget for this year so literally we cannot do anything. So you could look at parts of the project. b) Approve Downtown Facade Improvement Grant Program Funding Increase Staffs memo outlined the history of the grant program and the dollars invested. In 2018,the original $20,000 grant funding budget was increased by$5,978 due to the amount of applications received. Currently there is $500 left for 2019. Allowed grant amounts are $1,500 to $10,000. Staff recommends for the remainder of 2019 and into the future to increase the grant funding amount to $25,000. Staff explained if an application comes in tomorrow for$4,000 do you want the answer to be we don't have any money left so come back next year or do you want additional applications to come in for the remainder of this year? Member Craig felt at this point of the year,will many people be looking at doing projects? Staff noted the previous applicant had a point where there are problems with scheduling contractors. Staff has received three serious inquiries about applying yet this year. Member Craig asked where will the extra$5,000 come from? Staff stated within our existing fund balance. Regarding the EDA budget,we have $198,000 available for programming today. The Dakota Broadband will no longer be taken out of the EDA budget. Chair Simmons would like more overall EDA budget information before deciding on increasing the grant funding for 2020. Member Bernhjelm stated her feeling is while she is pro-business she has a hard time continuing to allocate more funds to private owned businesses when we have a long list of needs from the city side of things that need to get funded. She really likes the grant program and seeing how much private money has been invested. The City Council is not increasing the levy for next year, so there is no new money coming in. Member Craig noted there is a list of maintenance items that we can't even touch. Member Simmons asked if we should decide whether to increase grant funding for just 2019 and move changing the limits for the future to another meeting. Member Butterfield stated our total funding right now is $200,000. Staff stated that is our available fund balance;what we have available in the bank for programming. Each year we receive income of$40,000. Member Butterfield stated with the current program we had $14,000 available for future funding and we discussed starting a similar program for other areas of town. So we have $14,000 of unallocated program funding,not$200,000. Staff stated it depends on how you look at it. If we look at it from creating a new program, and if you want to also base it on the longevity of that program. The fund balance of the program remains in perpetuity. Member Bernhjelm noted we approve applications first come, first served rather than accept them all at the beginning of the year. She would rather allocate dollars to a EDA Minutes(Regular) September 19,2019 Page 7 historic building in downtown than some of the others,where it is not a dire need. Member Jolley stated the applicant's justification for asking for more dollars than allowed was that it is a historic building,therefore making it a more desirable place for those funds. In this block, there are six historic buildings and all those people could say we could use the money too. She would not feel good about making that the reason we change the rules. She didn't know how we can discuss this year when we have an applicant that needs the money yesterday and we don't have it. We almost have to take it from next year. Staff stated the TH3 program is one more piece. The one big benefit of this group is we operate with a fund balance which means it does not expire on an annual basis. It rolls over each calendar year. It is more of a policy decision about how we want to see those dollars utilized long term. Because this is a completely locally administered program and very nimble,we can very simply transfer dollars. Chair Simmons felt we should not assume the $40,000 is there every year. Member Butterfield felt it is completely reasonable to increase the grant funding for this year and next year. This is a program the EDA has funded for the recent period. To keep helping the business owners who want to improve buildings is historic. Member Bernhjelm stated say we add $5,000 this year and now we have $5,500. Is the answer we say no to Heikkila Studios and wait for something to come in at$5500 or say she can have $5500 of the $20,000 and now we are back to zero. Now we are working project to project on funding. Chair Simmons agreed and would rather focus on our objectives for 2019 and see where we land and revisit our strategic plan for 2020. Member Butterfield stated so if three more applications come in,we are uncomfortable allocating more, so we turn away businesses that are wanting to improve their facade which is the exact opposite of what the program is intended to do. We are saying we want to shut it down for this year and come back next year. Regardless of the previous proposal and asking for a ridiculous amount of money, adding to the fund balance and paying that out to the next applicant, and another applicant comes in November with a really great project that met the benefit of what the program was intended, we would be making the same decision and considering another allocation. Chair Simmons agreed, but didn't want to get into planning for 2020. Member Wilson felt reviewing all applications at the same time is reasonable. We started with a small dollar amount and it was not a subsidy of the city. As we have increased funding,this committee has gotten more contentious about it. To question each project, has taken out the good will of the program. He likes staff's recommendation to increase the funding to $25,000, but at the same time he almost wants to back down the size of the grant award. Our move up to $10,000 has turned us sideways. Member Wilson suggested at a future meeting discussing do we take applications from January 30 to April 1 and send a letter to businesses that we are accepting applications up to a dollar amount during this time. If we get a request in July,we considerate it at that time. If we increase funding for this year and bypass the current request, that is not fair. If we increase it,then we should make an award to Heikkila for$5,500 which is in our budget. Chair Simmons asked if we should increase it more and give her the $10,000 limit. EDA Minutes(Regular) September 19,2019 Page 8 Member Bernhjelm asked what if someone else comes in and we have increased it for one person. Member Jolley stated anything received after Heikkila's would be deferred to next year. Chair Simmons suggested waiting to decide about increasing for 2019 until we have an application in hand. Member Craig felt we have to set the rules and stick with them, otherwise someone will be unhappy. Staff explained the recommendation in this memo ignores the first item on the agenda. We currently have $500 in this program for the rest of the year. If someone wants a new awning, do we say try again next year, or based on our balance do we want to increase funding so dollars are available. That changes the answer. MOTION by Bernhjelm, second by Wilson to keep the façade grant funding as is for$20,000 with $500 remaining for 2019 and not change the policy for increasing or decreasing the current limit of what people can request. APIF, MOTION CARRIED. Member Bernhjelm stated at a future meeting look at funding amounts for 2020. Member Jolley stated that would turn down Heikkila's application. Chair Simmons clarified just for this meeting. We can look at it again in October. Member Wilson felt it is worth a policy discussion at a Council level. Is there an investment that is worth making to preserve what we have with our downtown versus letting it go and rebuild a new downtown in the future. We have something other communities would die to have. He is not suggesting the Council would voluntarily start improving private buildings. But the reality is there is a historic designation to it and there are old buildings. Member Bernhjelm asked staff if the commissions ever present a budget to staff to bring to the Council. In that situation, she would say that the Planning Commission, which now owns heritage preservation,would need to come to Council with a request during budgeting time that we want X amount of dollars to fund this program. Council is taking recommendations from department heads, but if we don't hear from commissions,there is no way to budget for programs. The Planning Commission just inherited historic preservation and the budget is set for 2020 so there is no funding for it for next year unless we shift funds in the general fund. Staff stated boards and commissions have not brought budgets to the Council. The Council has provided dollars down to the commissions. Those budgets are determined by the department heads and city administrator that are brought to the Council through a number of work sessions. He recommended for October or November,we have the ability to allocate dollars within our fund balance. That is not part of the Council budget process. It is internal policy about how we allocate that pool of dollars. That discussion can be brought back later in the year. c) Business Retention and Expansion Communications Strategy Update Chair Simmons noted this item could also be a long discussion yet tonight. Member Wilson suggested continuing it to October. Members agreed. Member Wilson asked if we are having a planning or goals meeting for 2020? This item could be part of that. Member Bernhjelm felt the EDA could benefit from a EDA Minutes(Regular) September 19,2019 Page 9 session like that. MOTION by Wilson, second by Jolly to continue this item to the October meeting. APIF,MOTION CARRIED. d) City Council Update Member Craig distributed the list of maintenance items for the city that have been put on hold. We have $10 million worth of maintenance work that needs to be done. Members asked questions about the various items on the list. 9. DIRECTOR'S REPORT a) September Director's Report The South of the River Real Estate Summit was held today. Six Mayors made presentations. There were 100+commercial and residential brokers in attendance. Regarding the Open to Business program, Laurie Crow is no longer with the program and they are working on new staffing for us. 10. ADJOURN MOTION by Bernhjelm, second by Cordes to adjourn at 8:10 p.m. APIF, MOTION CARRIED. Respectfully submitted, C1jlAtll1a Muller Cynthia Muller Administrative Assistant CITY OF O430 Third St., Farmington, MN 55024 FARMINCTON © 65i-280-6800 ® FarmingtonMN.gov TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Monthly Financial Statements DATE: October 24, 2019 INTRODUCTION/DISCUSSION Please find the monthly financial statements of the EDA attached. ACTION REQUESTED ATTACHMENTS: Type Description D Exhibit EDA-Actual Vs Budgeted Rev and Exp- October D Exhibit Financial Snapshot- October O O O p O O M r• C1 CC O .-. O d1 M O O O O:.M N N O c `tD 4- a O M N O CO N CO O N CO �y co Co 0 O)O N tF N O If) O C) v O r r If) n CO O N N tV 0 05 M O O M-. M N :r N CD 0• R co 11 TM)'C 0 0 0 O O F- O O O 0 0 0'O ON- Is 0 0 0 0 O CO O O CO 0 0 0 0 0 C) N N -0 N b ti. O M CI :CO O M M IO O O O O tF d' 0 m r- O. 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O ' r Et d > 0 0 O w (n H m Q _, > > O m a N N E O V o f a _1 H w z O a) w 2 Q 0 a a) 111 w ,CD {LL a 1 1 i 1 i . i 1 1 1 1 1 O W N L Z 12)r 4l N 15 O O O c.1 co IOO COO Oh CO N � ON 0 ' N (C t .- C tF tF tF tF rt 1.'4? tF CO tF IO IO ) O L L w' CG ;F- ;O O co co O (0 CO 0....0 M CO CO N F- F-...O Department Actual vs Budget-Generic Time Period Business Object Account Cumulative 12 Cumulative 12 Unit Account Description Actual Budget 2019 2019 2000-HRA/ECONOMIC DEVELOPMENT 1010 CASH 256,509.05' 2000-HRA/ECONOMIC DEVELOPMENT 1010 CASH-LGA ASSMNT RELIEF 35,000.00 2000-HRA/ECONOMIC DEVELOPMENT 3510 UNRESERVED FUND BALANCE -299,361.64' 2000-HRA/ECONOMIC DEVELOPMENT 4955 INTEREST ON INVESTMENTS -5,080.43 -2,300.00 2000-HRA/ECONOMIC DEVELOPMENT 5205 OPERATING TRANSFERS -37,499.94 -50,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6401 PROFESSIONAL SERVICES 1,190.00 11,680.00 2000-HRA/ECONOMIC DEVELOPMENT 6403 LEGAL 719.40 4,000.00' 2000-HRA/ECONOMIC DEVELOPMENT 6404 IT SERVICES 6,237.72 8,317.00 2000-HRA/ECONOMIC DEVELOPMENT 6422 ELECTRIC 151.27 300.00' 2000-HRA/ECONOMIC DEVELOPMENT 6426 INSURANCE 107.01 130.00' 2000-HRA/ECONOMIC DEVELOPMENT 6450 OUTSIDE PRINTING 0.00 500.00 2000-HRA/ECONOMIC DEVELOPMENT 6460 MEMBER DUES&LICENSURE 1,820.00 2,500.00' 2000-HRA/ECONOMIC DEVELOPMENT 6470 TRAINING&SUBSISTANCE 2,075.00 3,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6485 MILEAGE REIMBURSEMENT 265.06 1,000.00' 2000-HRA/ECONOMIC DEVELOPMENT 6492 ADVERTISING 0.00 3,000.00' 2000-HRA/ECONOMIC DEVELOPMENT 6550 DEVELOPER PAYMENTS 9,500.00 2000-HRA/ECONOMIC DEVELOPMENT 6570 PROGRAMMING EXPENSE 26,230.00. 17,000.00 2000-HRA/ECONOMIC DEVELOPMENT 7310 OPERATING TRANSFERS 2,137.50 2,850.00 Total 2000-HRA/ECONOMIC DEVELOPM 0.00 1,977.00 0.00 1,977.00 0.00 1,977.00 10/16/2019 2:05:17 PM Page 1 of 1 CITY OF Q O 430 Third St., Farmington, MN 55024 FARM I N GTO N © 651-280-6800 • FarmingtonMN.gov TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Business Retention & Expansion Communications Strategy Update DATE: October 24, 2019 INTRODUCTION/DISCUSSION As discussed at the August EDA meeting, Lauren Siebenaler, Communications Specialist, will join us to discuss the City's communications strategies, public engagement platforms, and opportunities to promote the work of the EDA.This item ties directly into the EDA's ongoing discussions of a renewed business retention and expansion (BR&E) program. Staff was directed to bring forward a program framework based on the discussion at our last meeting. Rationale—A consistent BR&E program promotes increased dialogue and knowledge sharing between the local business community and City Hall. Structure—Monthly featured business visit coordinated by city staff in partnership with an EDA member and City Council member. Reason for Visit—Can vary based on the business. In general,the intent is to share the good news of the City and learn about the featured business. For example, October 1-7 is Minnesota Manufacturing Week. A visit will be scheduled with a manufacturing company to recognize their contributions to the local economy. Outcomes—Stronger connection to City Hall, identification of unknown challenges, promotion of positive work and news updates. Optional follow up publicity similar to ribbon cuttings. Tools—Common Questions Survey(example attached) and key talking points. Talking points may include: Emphasizing the City Council's adopted priorities: Financial-Continue to take the steps to make Farmington a city of fiscal excellence. Development-Support the expansion of residential,commercial,and industrial properties. Partnerships- Forge opportunities with existing and new partners. Service Delivery- Endeavor to provide core government services at high quality levels. Recent designations: Safest City Award, Best Cities to Live, increased bond rating based on sound financial practices,several newly approved residential developments, several pending or recently completed commercial projects. This program will supplement the ongoing work noted in the attached matrix. ACTION REQUESTED Discuss implementation of this component of the EDA's 2019-2021 Strategic Plan for Economic Development. ATTACHMENTS: Type Description D Exhibit Common Questions Survey Example D Exhibit BR&E Activities Matrix Common Questions Survey Reporting Form (rev 1.12.16) COMPANY INFORMATION Company Name: Contact Name/Email: Visit Date: Would you be willing to participate in the MN Manufacturers week? YES NO BUSINESS AND FACILITY DETAILS: Primary Business Sector? Type of facility(select all that apply): ❑ Branch ❑ Distribution ❑ Franchise ❑ Headquarters ❑ Home-based ❑ Manufacturing ❑ R&D ❑ Sales-Office Is this facility owned or leased? Owned Leased Does company have a succession plan? YES NO Has the company ownership changed? YES NO Or is change imminent? YES NO Explain: Over the past year,have company sales(select one): ❑ Increased ❑ Decreased ❑ Been relatively stable ❑ Fluctuated widely ❑ Not identified What has contributed to the increase or decrease in sales? PRODUCTS AND SERVICES What are the company's major products and services? Has this company introduced new products? YES NO Briefly describe new products: EMPLOYMENT AND WORKFORCE How many full time employees are at this facility? Has the number of employees at this facility changed in the past year(select one): ❑ Increased ❑ Decreased ❑ Stayed the same If increased,how many employees have been hired in the past year? Wage In the next year,do you expect the number of jobs at facility to(select one): ❑ Increase ❑ Decrease ❑ Be relatively stable ❑ Unsure Do you plan to hire in the next 2-5 years? YES NO If yes, how many employees do you anticipate hiring? What types of jobs are you hiring? If you have hired in the past year,was it hard to fill positions? YES NO What contributed to the challenges in filling open positions?(select all that apply): ❑ Poor work ethic❑ Lack of basic education ❑ Lack of technical skills❑ Lack of candidates ❑ Challenging location❑ Competition ❑ Other Do you anticipate needing to train existing employees: YES NO What type of training is needed? Does the community have enough housing and the right type of housing for your future employees?YES NO MARKET INFORMATION Company's primary market(select one): ❑ International ❑ United States ❑ Midwest(including MN) ❑ Minnesota ❑ Local Company's fastest growing geographic market(select one): ❑ International ❑ United States ❑ Midwest(including MN) ❑ Minnesota ❑ Local ❑ Not identified Do you export or have clients outside of the United States? YES NO If so,where(select all that apply): ❑ Africa&Middle East ❑ Canada ❑ Europe&Russia ❑ Greater China ❑ India, Pakistan, Central/South Asia ❑ Japan&Korea ❑ Southeast Asia ❑ Australia&Pacific Oceania ❑ Latin America&Caribbean ❑ Mexico ❑ Other Percent of sales outside of the US? Are you interested in exporting or learning how to obtain clients outside of the U.S.(exporting)? ❑ Yes ❑ No 2iPage INVESTMENT PLAN Does the company plan to(check all that apply) ❑ Invest in new facilities ❑ Make major equipment purchase ❑ Renovate/Expand current facilities ❑ None Approximate date of investment(select one): ❑ Within one year ❑ Within two years ❑ Within three years ❑ Unsure Do you currently have room on your site to expand? YES NO If investing in new location,why(select all that apply)? ❑ Access to labor❑ Access to markets❑ Environmental permit obstacles❑ High state taxes❑ High local taxes ❑ Labor costs ❑ Lease expiration ❑ No room at this location❑Quality of workforce ❑Transportation/infrastructure ❑ Other COMMUNITY What are the strengths and weaknesses of the community? Have you interacted with any of the departments at City Hall?If so,what department and please describe your experience. Are there any priority projects or initiatives the City should consider in order to enhance the business climate? POST DISCUSSION VISIT Does this company require follow up? YES NO If yes,what organization(s)should assist(select all that apply): ❑ City ❑ Chamber ❑ College ❑ State ❑ Workforce ❑ GREATER MSP ❑ Other NOTES: 3JPage Rank the local business climate:Community Rankings:1=Poor 5=Great Education and Training K-12 1 2 3 4 5 n/a Higher education 1 2 3 4 5 n/a Customized Training Programs 1 2 3 4 5 n/a Overall Workforce Quality 1 2 3 4 5 n/a Transportation/Location Public Transportation 1 2 3 4 5 n/a Highway Infrastructure 1 2 3 4 5 n/a Air Service 1 2 3 4 5 n/a Proximity to Suppliers 1 2 3 4 5 n/a Quality of Life Recreational Opportunities 1 2 3 4 5 n/a Cultural Opportunities 1 2 3 4 5 n/a Crime Rate 1 2 3 4 5 n/a Social Organizations and Networks 1 2 3 4 5 n/a Housing Supply for Workforce 1 2 3 4 5 n/a Local Access to Capital Lending by local financial institutions 1 2 3 4 5 n/a Assistance from local governments and/or non-profits 1 2 3 4 5 n/a Local Government Attitude towards business 1 2 3 4 5 n/a Permitting/Zoning 1 2 3 4 5 n/a Local Taxes 1 2 3 4 5 n/a Local fees 1 2 3 4 5 n/a Utilities Telecommunications/Broadband Service 1 2 3 4 5 n/a Telecommunications/Broadband Rates 1 2 3 4 5 n/a Electric Rates 1 2 3 4 5 n/a Electric Reliability 1 2 3 4 5 n/a 4IPage Farmington EDA Business Retention and Expansion Strategy Summary Category Activity Audience and Frequency Relationship Farmington Business Association(FBA)morning networking meetings Farmington businesses-Monthly Ribbon cuttings for new or expanding businesses Farmington businesses-5-10/year Dakota County Regional(DCR)Chamber of Commerce events(Good Day Dakota Dakota County-wide businesses-Monthly County,Legislative Updates etc.) Economic Development Association of Minnesota(EDAM)events Economic development professionals from across the state- Monthly Minnesota Commercial Association of Real Estate Association(MNCAR) Commercial property brokers-Weekly membership and event participation(MNCAR Expo) Miscellaneous business inquiries,start-ups,existing business questions etc. Farmington businesses-Weekly Partnership Dakota County Community Development Agency(CDA)-Open to Business, Dakota County Community Development Directors and CDA Broadband,CDBG programs staff-Bi-monthly MN Department of Employment and Economic Development(DEED)MN Marketing Public and private sector economic development Partners professionals from around the state including state officials- 3x per year Private sector economic development collaborations(Dakota Electric,Xcel Energy) Private sector economic development partners-As needed DCR Chamber of Commerce programs and collaborations(State of the City, Annually(SOTC)and monthly update meetings with DCR monthly update meetings,Chamber Directory) Chamber leadership GreaterMSP site selection responses GreaterMSP staff and national site selectors-As needed Data Dakota/Scott Workforce Development Board updates Monthly DEED employment data and industry trends Monthly GreaterMSP dashboard and on demand data requests As needed Informational EDAM Third Thursday programs and EDAM University educational series Monthly Minnesota Real Estate Journal(MREJ)educational development events Quarterly Business highlights and updates in the Farmington"Currents"newsletter Quarterly Local and regional news stories and updates Daily CITY OF O 430 Third St., Farmington, MN 55024 FARM I N GTO N © 651.280.6800 I�Illlllf� ® FarmingtonMN.gov TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: EDA Program Financing Update DATE: October 24, 2019 INTRODUCTION/DISCUSSION At the last meeting,the EDA discussed ongoing funding for the Downtown Façade Improvement grant program and how policy changes to our programs directly impact the EDA's fund balance. Staff has included a fund balance snapshot along with various program information below to continue the discussion on EDA funding.This topic is directly related to the last objective listed within the EDA's 2019- 2021 Strategic Plan for Economic Development: "Objective: Conduct the business of the EDA to maximize its effectiveness. Tactics-1. Provide consistent information to the EDA about its financial condition and existing obligations." As the EDA discusses funding for current programs and opportunities for new initiatives, it is important to have a comprehensive understanding of how the EDA receives and utilizes its finances. As noted in our 2019-2021 Strategic Plan,the city's Finance Director provides the EDA with a comprehensive financial update annually every March. Attached is the presentation from this past March,which highlights a number of the items outlined below. One specific item to note that was included in the attached presentation is that Dakota Broadband is no longer funded via the EDA. Revenues and Expenditures Revenues The EDA typically plans programs and operations based on an anticipated operating transfer of general fund dollars via the City Council. Other unrestricted revenue includes any interest earned on investments of the fund balance. Restricted revenues include outside funding such as CDBG dollars,grants, or other special funds. Additional revenue sources available to the EDA include the possibility of an HRA/EDA tax levy. Attached is a memo from our municipal financial advisors outlining two levy types available to the EDA as a potential source of future funding. General fund allocation Historically the EDA has received its funding directly from the city's general fund via the City Council as part of the annual budgeting process. This amount is typically$40,000 transferred in 1/12 payments over the course of the calendar year. Expenditures/Programming Façade Improvement Grant Program Annual allocation of$20,000 since created in late 2016.At the last meeting the EDA discussed nuances of the program and ideas for consideration in 2020. Based on the discussion at our September meeting,the EDA could consider reducing the maximum grant amounts for general applications to$5,000 and up to $10,000 for special category applications (i.e. historic properties). Site Readiness Program Annual allocation of$20,000 for grants up to$5,000 each for qualified commercial/industrial site preparation. Created in late 2017,this program has not yet been utilized and is a candidate for additional promotion. Commercial Rehabilitation Grant Program Utilizes federal Community Development Block Grant dollars allocated to the city via the Dakota County CDA.These dollars are not included in the EDA budget, but we designate the amount available(currently approximately$39,000)to cash flow any obligations prior to reimbursement.The amount available can change based on the age of the funds and the federally designated activity approved via the CDA. We will discuss this program in greater detail at our November or December meeting. Open to Business Program The City of Farmington currently contributes $5,513 annually to this program operated via the Dakota County CDA to support small and emerging businesses. The current contract runs through 2020. General Operations We typically allocate approximately$20,000 annually to cover items such as legal, IT, professional development, programming expenses etc.This includes our annual Open to Business fee. Other appropriations Within the EDA's fund balance,the EDA"earmarked" $100,000 in mid-2018 for the creation of a Rambling River Center Plaza.This project has not yet been scheduled for implementation. "Wish List" Unfunded or yet to be created programs included in adopted plans. Some of these items include a Highway 3 improvement plan similar to the Downtown Façade Improvement program,wayfinding improvements noted in the Downtown Redevelopment Plan, potential property acquisition to further either the Downtown Redevelopment Plan or Highway 3 Corridor Plan goals, and other infrastructure improvements or cost participation necessary to remove barriers to redeveloping key properties. By far the largest category,this is ultimately where the EDA could spend a significant amount of time identifying new ideas that translate into additional budget requests or demand for outside funding. Fund Balance Unlike city department budgets,the EDA operates via a "fund balance"which allows unspent dollars to be carried over annually for additional programming and obligations. Due to multiple variables within the EDA's fund balance, it is often a complex answer to the question of how much money is available for new initiatives or to sustain existing programs within the EDA. If some programs are underutilized in a calendar year,funds can be utilized for additional activities or longer- term goals. If other programs are being drawn down quickly,the EDA can consider additional funding to meet demand for the following year. Additionally, new priorities or opportunities can emerge within the calendar year that weren't planned as a part of our annual review.There should also be consideration for maintaining a certain level of reserve for these"opportunity" costs. Based on the attached financial presentation projecting our end of year balance, it is suggested to note approximately$50,000 of the EDA's fund balance is considered uncommitted. This can be a starting point for the EDA to discuss its future financing needs for implementation of our economic development priorities. ACTION REQUESTED Discuss the EDA's programs for promoting economic development as it relates to current or additional funding opportunities. ATTACHMENTS: Type Description D Exhibit March 2019 Finance Update Presentation D Exhibit HRA/EDA Levy Information Memo 7-11 U Z8 < wc\1 Z 5 W N L.L_ W -E)N L.L isi::milL i A • 1 i. 1 , lal**-1...411.._ -";,„. : - n Cs, f ''''''' I ■ - ak Tr C/) 2 U . Qcn .; ..,iii, , U U CL N i N C6 N i u),+_.„..... n .0 U c6 >, a. C6 0 C6 w (6 .- I. . � IL CO _c 0' O U . L � Q , O — Cn a3 = 0 Cl) O I) 4-- 0 E0 CI CD Ti O 0 -47, (D -C3 .? E U o m 0 U •�• .:. .:. •:. .:. 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E""4 . a_ cor ..., L O >, :� ►_� V d� o �"�C 0 •:• •:• •:• •:• g 0 411 i NORTHLAND o PUBLIC FINANCE MEMORANDUM To: Adam Kienberger,City of Farmington From: Tammy Omdal Date: August 13,2019 Re: HRA/EDA Tax Levies This memorandum is a follow-up to our recent meeting and provides you with an explanation of the authority for the two types of levies that may be available to the City of Farmington Economic Development Authority("EDA").The two levies are commonly referred to as the"HRA levy"and the"EDA levy,"and are described below. 1. HRA levy Under Minnesota Statutes,Sections 469.091 an economic development authority has all the powers of a housing and redevelopment authority under Sections 469.001 to 469.047(the"HRA Act"),unless those powers are limited by the City's enabling resolution that established the authority.The enabling resolution that established the Farmington EDA should be reviewed to confirm any limitations of those powers.If there are no limitations,the EDA may essentially act as a housing and redevelopment authority and exercise all powers under the HRA Act,as well as exercising its economic development powers under Minnesota Statutes,Sections 469.090 to 469.1081(the"EDA Act"). Under Section 469.033 of the HRA Act,an HRA may levy a tax on its area of operation for the purposes authorized under the HRA Act,subject to consent by the city council. The levy may not exceed 0.0185%of the estimated market value in the City.The"area of operation"of the authority is the boundaries of the City. If the Farmington EDA has all the powers of a housing and redevelopment authority,the EDA may levy the tax authorized under Section 469.033,subject to the same limitations and procedures that would apply if it were levied by a housing and redevelopment authority. The HRA levy has two important features. First,the proceeds must be used only"for the purposes of[the 1-IRA Act]."Minnesota Statutes,Section 469.033,subd.6.Those purposes,broadly,include redevelopment to correct or prevent blight,and development of or assistance to housing for low-or moderate-income persons. Second,the HRA levy is technically raised by the EDA(using its HRA Act powers),with approval by the City Council. The levy amount is above and beyond any levy limits that may apply to the City; the only limit is the 0.0185%of estimated market value in the City referenced above. 150 South Fifth Street,Suite 3300,Minneapolis,MN 55402 Main:(612)851-5900/Direct:(612)851-4964/Email:tomdal@northlandsecurilies.com Member FINRA and SIPC I Registered with SEC and MSRB HRAIEDA Levies August 13,2019 Page 2 2. EDA levy Section 469.107 of the EDA Act provides separate authority for a tax levy to benefit the EDA.Under this provision,the City levies the tax at the request of the EDA. The amount levied is limited to 0.01813%of estimated market value in the City(a higher levy is permissible but subject to reverse referendum). This levy is different from the HRA levy in two respects.First,it is made by the City for the benefit of the EDA,at the EDA's request. The amount is within the City's overall levy limits.As such,it is essentially the same as an appropriation to the EDA from the City's general funds. Second,the statute does not expressly limit the proceeds to any particular use,but the implication is that they may be used for any activity an EDA is authorized to carry out under the EDA Act.Those uses include housing and redevelopment activities under the HRA Act,but also broader economic development activities. There are certain steps and process required with the initial establishment and annual certification of an HRA levy and/or EDA levy that are not described in this memorandum. If you have questions on the information contained within this memorandum or other follow-up items,please let us know. CITY OF O430 Third St., Farmington, MN 55024 FARM I N GTO N © 651-280-6800 ��11r ® FarmingtonMN.gov TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: City Council Update DATE: October 24, 2019 INTRODUCTION/DISCUSSION This is a standing agenda item to allow City Council members the opportunity to provide the EDA with any updates they feel are pertinent to the work plan of the EDA. ACTION REQUESTED Receive an update on recent City Council actions or discussions. CITY OF 0 430 Third St, Farmington, MN 55024 FARM I N GTO N © 651-280-6800 ��IIIII�S ® FarmingtonMN.gov TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: October Director's Report DATE: October 24, 2019 INTRODUCTION/DISCUSSION Riste Lot Update Homestead Community Church is progressing with their improvements to their property in downtown Farmington and has expressed a renewed interest in acquiring the Riste Lot owned by the EDA. Staff is currently working on a contract for private development that will be brought to the EDA at an upcoming meeting. Board/City Council Reception The EDA is invited to a year end meeting and reception with the City Council on Thursday, December 5, 2019 at 6:00 p.m. at Bourbon Butcher. The meeting will include a summary of the work that was done this year by each group. Please let me know if you are able to attend so we can get an accurate headcount. Business Retention&Expansion Training Staff is attending a BR&E seminar targeted at suburban communities at the University of Minnesota on October 22-23.A summary will be provided at our meeting. 2019-2021 Strategic Plan for Economic Development An updated status of items in the 2019-2021 Strategic Plan for Economic Development will be provided on a monthly basis.The plan and summary sheet are attached. EDA members should review the plan on a regular basis. Related Articles Dakota County August Foreclosure Summary NEXT MEETING Our next regular meeting is November 21St at 6:30 p.m. ACTION REQUESTED None,this report is intended to be a monthly update on various development and industry related topics. ATTACHMENTS: Type Description D Exhibit Dakota County August Foreclosure Report ® Exhibit Dakota County August Foreclosure Report- NOP D Exhibit 2019-2021 Strategic Plan for Economic Development D Exhibit Strategic Plan Summary and Status Report CO IN N N a-1 N N N n N. Ol NN N In O m N N N N N 7 N N N N N m N co N H N N N N t d' l0 In N cr O N m N N N N N m N N N N N 00 N co N O N N N co rN-I co N Ol N N a--1 1- m Irl CO N N NN N In l0 CO O 01 N N N m ID ID D 0 > 0m GO Irl 1-1 N Irl Z N N N N N N O j� LD N 01 Ol In N O N N N In In N Lti. U U O H U >` O. 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C.) c o a o 0 z LI a m w _ _ _i G CC 3 V) o a U Strategic Plan 2019 - 2021 Farmington Economic Develop ment Authority : . , } , F wr J - 7F ^fix" '� '� " r5` - r^1 1,..., -5" , r ,...,.:7 qtr. �^ �.li „ ` +""r4, * !, � --.,,,„1,-,,..-- r' 1 :,, p,,..._ ' a _ - ..., `fit / gr t , 410 ,' x r ly..i y ✓•�- t � January 2019 NORTHLAND `fir 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 attracting and retaining businesses, creating partnerships,fostering employment opportunities, promoting workforce housing, business growth, 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 position Farmington as one of Minnesota's most desirable cities to open, grow, and maintain a business. January 2019 EDA Strategic Plan 2019-2021 3 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 1 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 Development Administrator Director Residents Business Economic ._-aw-__ , )0' 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,one Independent School District 192 school board member,and four residents. Economic development staff is part of the January 2019 ��� EDA Strategic Plan 2019-2021 5 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 +i 100.00tt Art h tit 4. • 80.00 111 '111 Ae I-• 60.00 44- 40.00 20.00 11 . . . . 111. ,K; y 11Y Qa �?ate\ ��<°° �e4C\ �o,`oC ����\\e �e�� e 40\)‹ . ,V e� ?e �aI cc• e dee �oJ�r bac PQQ N4ec ■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 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 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 111111 ■Apartments 1,000,000,000 ■Residential Farmington Lakeville Rosemount Hastings Apple Valley Figure 2 Taxable Market Value Taxes Payable 2019 100% t 70% ■ ■ ■ ■ All Other 60% ■ ■ ■ ■ ■Agriculture 50% ■ ■ ■ ■ Industrial 40% ■ ■ ■ 1111 ■Commercial 30% ■ ■ 1111 ■ •Apartments 20% ■ ■ 1111 1111 ■Residential 10% ■ ■ 1111 ■ 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 7, 1,500,000 a 1,000,000 500,000 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 and semi-annual work sessions with the city council 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 1 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. 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