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HomeMy WebLinkAbout06-24-21 CITY OF FARMINGTON ECONOMIC DEVELOPMENT AUTHORITY MINUTES REGULAR MEETING June 24, 2021 1. CALL TO ORDER The meeting was called to order by Chair Butterfield at 6:00 p.m. 2. PLEDGE OFALLEGLANCE Chair Butterfield led those in attendance in the Pledge of Allegiance. 3. ROLL CALL Members Present: Butterfield,Bernhjelm, Hudlemeyer,Carpentier Members Absent: Kaufman,Hoyt,Simmons, Staff Present: Samantha DiMaggio,Community Development Director; Kalley Swift, Community Development Specialist Others Present: Barbara Wolff,Bloomington Resident; Dean McNeal,Bloomington Resident 4. APPROVEAGENDA MOTION by Bernhjelm,second by Hudlemeyer to approve the Agenda.APIF,MOTION CARRIED. 5. CITIZEN COMMENTS/PRESENTATIONS 6. CONSENT AGENDA Specialist Swift explained that the closing for the sale of the Riste Lot was Friday,June 25,so David McKnight needed to remain Executive Director until the property was officially closed.Swift suggested amending the Executive Director Appointment to either appoint Samantha DiMaggio,Community Development Director effective Monday,June 28,2021,or to pull the item from the consent agenda and officially appoint Director DiMaggio at the July EDA Meeting. MOTION by Bernhjelm,second by Carpentier to amend the Executive Director Appointment to be effective Monday,June 28, 2021 and approve the Consent Agenda as follows: a) Monthly Financial Statements b) Executive Director Appointment APIF,MOTION CARRIED. 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS a) City Council Update/Member Roundtable Member Bernhjelm said that the BR&E Program officially started this week with two different business visits.They were overall great visits and we received positive feedback so far about how the city has handled businesses and the business community.There was a red flag documented for one of the visits,but it was nothing the city could address locally.City staff connected the business with our Open To Business Dakota County Advisor Natalie Mouilso who has since reached out to offer her resources for their red flag. During Monday's City Council meeting,the City Council approved the contract for the downtown sidewalk improvements as well as expanding the project to pave parking lots at Rambling River Center and Rambling River Park.The downtown sidewalk project and the addition of more improvements to the downtown environment shows the effort that we are trying to put all of our resources into one area right now.The downtown sidewalk project and our discussion tonight feels like for the first time we are intentionally putting all of our efforts into a specific area.Member Bernhjelm wanted to give that context before the discussion of reallocating the RRC Plaza dollars since funding these items are coming from the City Council to the EDA when looking at the RRC Plaza funds in the EDA budget. Community Development Director,Samantha DiMaggio took time to introduce herself.She has over 20 years of experience in community and economic development.She is excited to take time and learn the community as well as bring new ideas and resources. b) 2022 Budget Discussion and Recommendation In June,the City Council looks at the first draft of the budget for the following year.The City Council realizes the EDA is underfunded and as a result the responsibilities of the EDA need to match the funding given.The role of the EDA has been defined as supporting the 2021- 2022 City Council priorities of business growth,community engagement,and infrastructure support.Accounting for maximum spend downs in all budget categories for 2021,there is still$52,062 cash available within the EDA budget.Broadly, 2022 will be a year of focusing on the BR&E program and launching the new versions of the Facade Improvement Program and Redevelopment and Property Reinvestment Program. Funding the operation of the EDA,the annual Open to Business fee,the Fagade Improvement Program,and the Redevelopment and Property Reinvestment Programs costs roughly$75,000/year for the EDA,and the EDA has typically seen$40,000/year in the past five years.As the EDA continues to create and execute additional programs,cash available on hand will continue to decrease.Member Bernhjelm asked about the Riste Lot sale and if those funds were accounted for in our budget yet.The reimbursement of the CDBG dollars to the CDA and the expenditure of legal fees,appraisal fees,and closing costs for the Riste Lot will occur after the closing of the property.The EDA will have less than$10,000 added into their budget as cash available later this summer. Member Bernhjelm wanted to propose something to the group and get their reaction.Since the EDA has seen a lot of success from the Downtown Facade Improvement Program,the EDA should consider increasing the annual budget allocation to at least$30,000.The Redevelopment and Property Reinvestment Program would remain at$20,000 since there has only been one year of the Program which isn't enough time to see how the Program fully functions.Member Bernhjelm recommends asking for at least$50,000 from the City Council.With an increase in funding,the EDA could have a signage conversation next year which would incorporate city-wide signage updates. There was consensus within the EDA to go bigger on the ask from the City Council.Chair Butterfield is comfortable asking for additional funding for 2022,but isn't sure signage or increasing funding to a successful program is the answer when explaining to the City Council why the EDA would like an increase in funds. He would also like to see Director DiMaggio's reaction to our current toolset which may impact EDA budget areas.The EDA discussed more about wayfinding generally throughout the entire city which included the downtown pedestrian wayfinding as well as larger vehicle wayfinding on major corridors and monument city entrance signs which was a discussion item in 2020. Page 2 Director DiMaggio outlined her thoughts on some of the city's economic development tools she was able to review during her first couple of days.After her tour of the city,she believes the facade program should become city-wide.There are plenty of areas in the city, especially along major corridors,that could benefit from that type of program.Fagades are first impressions.Just like the EDA is saying go big on the funding ask,the Fagade program should have that same mentality for going big and allowing any business city-wide looking to make a fagade improvement eligible for the program. For the Redevelopment Program,Director DiMaggio is surprised we have money for interior fixes.Member Bernhjelm said the idea is that there are some buildings we felt were not being sold or filled with tenants because there was too much interior work to be done inside,like sprinkling a building,which turned prospects away.The intent is to help make properties more attractive for landowners to get tenants inside or to sell the property for a new use.Chair Butterfield said the spirit of that program is to help businesses invest in a manner to either draw more customers in,increase business capacity,or expand what they do to grow jobs and job creation.Director DiMaggio mentioned some cities do a 429 Plan for property owners who need to sprinkle a building.It allows building owners to repay the city over time as part of their taxes as an assessment.That is something we could look at doing rather than the Redevelopment Program. Director DiMaggio also reviewed our available properties resource on our website which outlines where available properties,buildings,and suites are for businesses.There aren't that many available,so the EDA could look at targeting certain properties for certain uses.A grocery store is talked about a lot in this community. Something the EDA could look at doing is using a RFP for putting a grocery store at a specific location in the city.Submissions would come in from those who are willing to make that specific type of investment and whoever was selected was given a grant.The City of Jordan was successful doing that for getting more restaurants with their Kitchen Equipment Program for commercial kitchens which are expensive.There are things the EDA could do to target their dollars to get specific goals and outcomes rather than putting funding at broader programs and hoping something sticks.Director DiMaggio would like time to figure out Farmington needs and what buildings/sites are available before going farther into that idea. Chair Butterfield asked what the City Council needs out of this discussion.The EDA asking for an additional$50,000-100,000 is the right amount.Member Bernhjelm said the City Council is going to get skittish if the EDA asks for$100,000 without a more detailed plan of where these dollars will go.She said an approach of showing necessary funding for our current programming,funding for new ideas from city staff based off of EDA conversations this fall,and funding for signage/city improvements would help the City Council.Chair Butterfield likes the idea of listing sections of funding needs to the City Council when asking for a larger amount. Director DiMaggio asked why the EDA got tasked with wayfinding.Member Bernhjelm said the EDA wasn't necessarily tasked with it.The EDA has had$100,000 RRC Plaza dollars set aside for years.For at least the past four years,the City Council has had discussions about big projects and none take off,including the RRC Plaza.For the past year or so,there have been conversations for how to spend those EDA RRC Plaza dollars and make an impact now since the project isn't happening in the near future.Last year,staff and the EDA discussed some projects that could get done that are business friendly and would help support driving traffic downtown or along Highway 3.Signage came up.Additionally,through other external Page 3 studies done,we know that there is a need for it.There is nothing driving people off of Highway 3 to go downtown.We have outdated signage as well.Member Bernhjelm emphasized that wayfinding does not have to be the answer,and the EDA does not have to tackle it.It is simply a topic that has been lingering for a while that feels like we can't get done because we don't have the financing.If the EDA doesn't want to tackle it with their budget funds that is okay.Member Bernhjelm stated that the next discussion item which included holiday decor and banners was suggested to be funded by the EDA because when the City Council was allocated the$1.2 million,banners and holiday decor were suggested items to fund with those dollars.Member Bernhjelm and Member Hoyt told the rest of the City Council that those types of items were things the EDA has talked about funding and taking the lead on,so let that group look at those items to fund since those items have a business purpose to it,it helps create a more attractive downtown and facade,and it helps advance some of the implementation steps of the Downtown Redevelopment Plan. Chair Butterfield asked for clarification from the memo.It says that as the EDA continues to create and execute programs,it needs to think about identifying long-term dedicated funding sources.What does finding longer term sources mean?Specialist Swift explained that right now the only funding source the EDA has is an annual allocation from the City Council and it is a general fund transfer.If the EDA analyzes their needs and realizes it needs larger transfers annually when the cash available decreases,the City Council needs to know that well in advance so they can plan for those larger annual transfers within the city budget.Director DiMaggio added that there are other funding sources we could pull from. We could utilize MN DEED dollars.However,in order to secure funding from sources like the state,you usually need your own money to get their money.Her fear is that if we went to the state and said we have$100,000,what will you give us,it wouldn't be a ton.With a lot of DEED projects,they want 50%match.There is concern that if we had a business need, project, or wanted to look into a new industrial/business park,and we want to apply for something like a BDPI,we would need more funds to get the funds we needed from MN DEED. Chair Butterfield outlined that the EDA sold its only asset and we have our fund balance. That is it.If you compare our EDA to other EDAs with the same structure as us,they have 5- 10x more dollars and assets they can use.Does this EDA want to build up our balance and increase our assets to leverage these state and federal funds?If we do,how do we get there? Director DiMaggio said we either need to get allocated more money or we need to stop spending for a while.When she got to the City of Le Sueur,their EDA had been utilizing business loans rather than business grants to help increase their fund balance which at the time was$1.6 million for a city with a population of 4,000.Shakopee's EDA annual amount was almost$1 million. Member Carpentier asked Director DiMaggio about what are some average interest rates for loans businesses would try and take out.Director DiMaggio said that the average rate is around 5%.In Le Sueur,she did some at 3%and in Greater MN right now they are around 6%for riskier loans.Member Carpentier asked if we could get a large one-time allocation if we brought forward the idea or plan for how we are going to transition from grants to loans which would be steps towards becoming self-funding.This would allow the City Council to only have to give a large allocation once during a year where there is a surplus in the budget and not have to worry about PR hits later on if supporting EDA functions would require a tax levy increase.Director DiMaggio said the City of Le Sueur got lucky with the loans which led to the$1.6 million available.Some of the loans they did were partnered with DEED,and Page 4 DEED used to allow you to keep$100,000 of the loan repayments.This is how they ended up at$1.6 million available to use on a large project.They also acquired 150 acres of land along HWY 169 that they have been trying to develop for years.Our EDA just sold our only lot which was valued at$36,000.We have to look at how competitive we want to be and where do we want to take ourselves. An issue Director DiMaggio sees is that the EDA is expected to do big change and make big things happen,but we are only given a small amount of funding to accomplish it.She isn't afraid of getting creative with the funding and allocation that we are given.However, $20,000 for a site readiness program isn't going to get us anywhere,especially if it is infrastructure based.If we want to fund some of these programs and initiatives,we are going to need to find more funding somewhere.We could do a TIF,but when a business comes into that area and they want to do a TIF,they can't because we took a TIF to get the site ready.Director DiMaggio needs more time to see what land we have available,if we are able to acquire it,and how we could help advance the creation of additional industrial or business parks.If it isn't available,then that's okay,but she is nervous for how we are going to grow our commercial base if there is nowhere to grow our commercial base. Member Bernhjelm stated that she has enough information needed at this time to bring the EDA budget discussion to the City Council knowing that we will have further discussions in the fall about our revised EDA program offerings.Chair Butterfield clarified that the EDA needs more money in order to leverage additional funding sources to get something that will be meaningful and move the dial for our#1 priority which is increasing the tax base. c) Reallocating Rambling River Center Plaza Funds Specialist Swift outlined that the EDA has discussed interest in reallocating the RRC Plaza funds for other projects and that the City Council has identified some projects which could be funded through the EDA since these projects help advance some items listed within the Implementation Chapter of the Downtown Redevelopment Plan.The four projects available for discussion are:wayfinding($15,000),banners ($20,000),holiday decor($27,744), and streetscaping ($40,000). For wayfinding,the EDA reviewed a draft downtown wayfinding plan in 2020 and comments were incorporated into the final plan.That plan is what would be funded if approved tonight.For banners,draft designs are being created.City maintenance staff has assessed the current brackets on city owned light poles downtown,and they need to be replaced if new banners are ordered.For holiday decor,a bid was placed from Parks&Rec and is ready to be purchased with approval tonight.The sale prices for the holiday decor items are on sale until June 30.For streetscaping,the downtown sidewalk project is occurring in 2021.This project is a good time to also update public space infrastructure and streetscaping. Completing these types of improvements is a part of the Downtown Redevelopment Plan and Public Space Improvement Program. Member Bernhjelm pulled up the City Council materials from that week's City Council meeting.In the downtown sidewalk memo,the City Engineer's outlined expenditures did not include revenue from the EDA for funding the downtown sidewalk project or streetscaping.Since City Council approved the downtown sidewalk funding earlier that week utilizing other funding sources,Member Bernhjelm said the EDA does not have to worry about funding that specific project. Member Bernhjelm added that her and Member Hoyt specifically kicked down the banners and holiday decor to the EDA to try and fund vs. Page 5 the Council funding it.She feels strongly about the EDA funding those two projects.Member Bernhjelm also feels that the holiday decor could be sponsored and asked Director DiMaggio how she feels going out and trying to find sponsorships for the$27,744. Director DiMaggio said going out for sponsorships may not be the best use of her time.She asked what local groups would be willing to donate?Is there a way to have Dakota Electric or Xcel sponsor something like this?Member Bernhjelm wants to purchase the holiday decor while we can take advantage of the sale price and reach out to Dakota Electric to see if this is something they want to get behind and sponsor. Director DiMaggio asked why the EDA is funding this when the project is more of a city project.There are so many cool light displays around the area,would people even come into downtown to see these?Member Bernhjelm said we've heard from residents a lot which is why it is a topic for discussion.Our previous holiday decor was in rough shape so we haven't been using them.Last year a group of residents got together and did their own holiday decor.Same goes for the banners.They are in rough shape.Member Bernhjelm doesn't feel like we need to fund all four projects outlined,but a small investment that is visible is a way for the community to see how the EDA has helped out and give the group some exposure.Member Hudlemeyer said we should ask our electric companies to match half the funds.That would be a win.He does feel that we should do this project,especially if we go to the City Council and ask for a large budget allocation soon.We should fund a project which helps further a goal in the Downtown Redevelopment Program and is a project the City Council would like us to fund.We need to do something they have tasked us with.Member Bernhjelm said that there is an expectation that the banners and the holiday decor are going to be funded by the EDA.If it doesn't happen,she will go back to the City Council and let them know why the EDA did not fund the projects. Chair Butterfield asked for clarification on if the sale prices would be available after June 30. City staff clarified that the prices will go up due to time of the year and cost of materials and goods.Member Carpentier and Hudlemeyer discussed supply and demand delays and mid- year price increases seen in all business sectors. Member Hudlemeyer asked what the life expectancy is for these holiday decor items.A$27,000 investment which lasts five years is not too large of an investment to make.Chair Butterfield said to put it in new context.Just the holiday decor project alone is SO%of this body's cash available.If you add the$100,000 RRC Plaza dollars to that total,this is 20% of our total available funding.Why would we take an underfunded committee and allocate 20%of the total possible funding we have when we have a downtown and highway 3 corridor we want to revitalize,an industrial park we need to expand on,and we don't have a grocery store.Chair Butterfield doesn't see how spending 20%of all available EDA funding on holiday decor without a planned winter activity downtown could allow for any credibility for the EDA as a group.He feels that strongly specifically for streetscaping and holiday decor.He thinks wayfinding is okay to use some funds for.Member Carpentier doesn't like the idea of funding wayfinding unless there are ways to increase on it and make it uniform throughout the city. He doesn't want to upset the City Council.The decor needs to get done. He doesn't think we are going to catch heat for using some of our available funding for holiday decor. Member Bernhjelm said she doesn't think we should do all of the projects.We already crossed off streetscaping and she doesn't want to do a small dent in wayfinding without doing it the right way.She wants people to come to the downtown space and feel good about it this year.The banners and holiday decor would help with that and also help our businesses.We've given them facade improvement grants to help clean up the downtown. Page 6 The banners and holiday decor projects aid in continuing that.Chair Butterfield said in the past 4 months we have had multiple requests for grant funding that has exceeded the value that we budgeted for this year.We have turned businesses down and lessened the requested dollars for businesses.To him it doesn't sit great to spend dollars on projects like these when we said no to a business a couple months ago because we put a policy ceiling on annual allocation for our grant dollars. Member Carpentier said what he is hearing is not that having the holiday decor is a bad idea.Instead it is what is the proper part of the organization that should be providing funding for it.He agrees that the holiday decor is not his first choice for what we should be funding.However,he is aware that there is an expectation with this project and he isn't sure if not funding it is worth potentially losing allies and a working relationship with the City Council since we are an advisory board of the City Council. If funding this project shows we are willing to work with the City Council rather than against,it may lead to greater allocations later. He is okay spending the$28,000 on holiday decor.Member Bernhjelm said that the City Council is aware of the$100,000 dedicated to the RRC Plaza in the EDA budget and that the EDA is having discussions about how do we spend these dollars and do something.What the City Council tried to do is say here is a project we need some support on,can you help us out with it since you are already looking for ideas to fund something. Chair Butterfield feels better about the holiday decor if we look at it from the perspective that we are supporting our downtown business community who want to see the holiday decor. He also wants to see a partnership with our local businesses who want to see the holiday decor for matching funds.We could earmark half the holiday decor bid into our budget and then go out for the donations for the other half.Member Carpentier added that we have to be aware of the June 30 deadline for the holiday decor sale prices.Member Bernhjelm proposes we take the risk and simply buy the holiday decor.We then go out and work hard the rest of the year to get the back-end sponsorships.She would rather the EDA attempt to do something like that.As an EDA,we have never gone out and attempted to get a business to sponsor something that we are doing.Businesses are looking for things to sponsor.From our BR&E visit this week,one of the businesses said he was looking to sponsor something in the city that wasn't a sports activity.There are others out there. Dakota Electric is a good example.They are active members of the Dakota County Chamber. Director DiMaggio said it is going to be hard to ask some of our smaller businesses to sponsor because they have already been hit hard this past year.Member Carpentier said most of the youth sports organizations have a lot of cash right now and are possible groups to ask.Member Bernhjelm suggested an idea of asking the youth sports organizations to sponsor a banner which would draw families downtown to see one of their kids on a banner.It is a unique way to celebrate Farmington athletics. Chair Butterfield asked to run through where the discussion has led us.The holiday decor is liked by the group when in partnership with matching funds from businesses.The banners are also liked by the group when going in with the partnership/sponsorship approach.The wayfinding has soured with this committee and there are issues which aren't going to get resolved tonight.The group should focus the remainder of the conversation on what to do with the concept of banners and holiday decor. Member Hudlemeyer said we should order the holiday decor and banners,but still try and get sponsorships/partnerships.Chair Butterfield asked how would we go about a partnership approach.Member Bernhjelm stated we should split these into their individual projects.We could ask Parks&Recreation Director Omlid to engage the youth organizations Page 7 and have a conversation with them about the banner program and ask if they want to get behind the project.For the holiday decor,we can tackle it through city staff and the Dakota County Chamber.Director DiMaggio suggested her and Director Omlid could send out a joint letter asking for donations in order to maximize the return on the projects.We may not get any donations,but that is the risk you have to take.The banners conversation can come back at a later date for a funding discussion,but the holiday decor has a deadline for a decision to make tonight. Chair Butterfield summarized that the projects are looking for$18,000 for banners (50 banners at$100/each and 50 banner brackets at$260/each) and$27,744 for the holiday decor. Member Carpentier suggested trying to get sponsorship for the holiday decor first.If we get no one interested in it then we know up front that this isn't the time to be doing this activity.Member Bernhjelm said that one of the priorities the Council hasn't discussed in detail is the community engagement component.Both of these projects are great opportunities to engage the community on something.Engage the business community for sponsoring our holiday decor and youth groups for the banners.It is a good story to tell if either gets done.Chair Butterfield agrees on the community engagement part,but he still goes back to these projects being$45,000 total if we don't get any engagement.Member Bernhjelm reminded the group that we do not have to make any decision on the banner project tonight.It is something we can work on for the future.Tonight,we only need to make a budget allocation decision on the holiday decor. Chair Butterfield still goes back to how we declined businesses dollars earlier this year for about the same amount of funding and now we are going to put those dollars towards holiday decor.Member Bernhjelm looks at it from a lens of adding decor to a whole street of businesses downtown and helping all of them out by making it a better community space. Ideas were suggested of having the City Council pay for half or just having the EDA allocate funding for 50% of the project and find the other half later.Member Carpentier said that the packet was put together so we could analyze all of the possible action items,but none of these projects listed should be given to the EDA to fund.However,the EDA also needs to exist for something.The only way we are going to get to something larger is if we do some of these smaller projects designated for the group first.He feels the exact same way as Chair Butterfield about denying businesses grant dollars and lessening grant funds requested,but we can't go back in time.It was a really good discussion at the March EDA meeting,and it was hard to make those decisions,but if we open that door again it is going to be really hard to close. Member Bernhjelm said to remember that the$100,000 RRC Plaza dollars were earmarked specifically for downtown projects.These dollar requests are still doing downtown projects. She doesn't think the EDA would be misleading about funding these downtown projects when we had to say no to businesses earlier this year.As an EDA,we already have these dollars allocated within our budget for a downtown project in some scope or form.Chair Butterfield asked about reallocating the RRC Plaza dollars into the general EDA budget so they can be used for anything moving forward,not just downtown projects.MOTION by Bernhjelm,second by Carpentier to reallocate the RRC Plaza dollars in the EDA budget to the general EDA budget-cash available.APIF,MOTION CARRIED. The EDA furthered their discussion about options for potentially fundraising the holiday decor after a potential purchase.Director DiMaggio suggested purchasing the holiday decor in full but make it clear moving forward that the EDA is not funding projects like this Page 8 without a sponsorship program.Asking for donations after the purchase is too late to go asking for sponsorships and donations.She emphasized we either purchase the holiday decor in full or we move onto a new project. MOTION by Bernhjelm,second by Carpentier to have the EDA pay for the holiday lights in full.Voting for: Bernhjelm,Carpentier,Hudlemeyer.Voting against: Butterfield.MOTION CARRIED. 9. DIRECTOR'S REPORT Specialist Swift reviewed the Director's Report which included welcoming new Community Development Director Samantha DiMaggio,reviewing the BR&E visits which happened this week,and the quantity of new inquiries from business prospects. The next meeting is on July 22. 10. ADJOURN MOTION by Hudlemeyer,second by Bernhjelm to adjourn at 7:50 p.m. APIF,MOTION CARRIED. Respectfully submitted, Kalley Swift Community Development Specialist Page 9