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HomeMy WebLinkAbout01-17-23 CITY OF Meeting Location: FARMINGTONFarmington City Hall 430 Third Street Farmington, MN 55024 ECONOMIC DEVELOPMENT AUTHORITY REGULAR MEETING AGENDA January 17, 2023 5:00 PM 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA S. CITIZENS COMMENTS 6. CONSENTAGENDA (a) Approve Appointment of Executive Director (b) Monthly Financial Statement 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS (a) Ebert Downtown Apartment-TI F Term Sheet Discussion (b) 2023 EDA Budget and Work Plan/Goals (c) Extension Request-2022 Facade Improvement Program 9. DIRECTOR'S REPORT (a) Director's Report 10. ADJOURN CITY OF O 43o Third St., Farmington, MN 55024 FARMINGTON © 651-28o-6800 OFarmington MN.gov TO: Economic Development Authority FROM: Deanna Kuennen, Community Development Director SUBJECT: Approve Appointment of Executive Director DATE: January 17, 2023 INTRODUCTION/DISCUSSION The Economic Development Authority By-Laws state in Section VI I -the Economic Development Authority(EDA) may appoint an Executive Director. At their meeting in August 2022,the EDA appointed Lynn Gorski as I ntermin Executive Director, after the Executive Director position was vacated by the resignation of the Community Development Director. Lynn Gorski was to serve as Interim Executive Direction until the new Community Development Director was hired. Deanna Kuennen was hired as the new Community Development Director, effective November 21, 2022. ACTION REQUESTED Approve the appointment of Deanna Kuennen, Community Development Director, as Executive Director of the EDA effective immediately. D. Kuennen will assume all responsibilities of the Executive Director as identified in the EDA By-Laws, including signing all EDA forms. ATTACHMENTS: Type Description D Cover Memo Economic Development Authority By-Law-Adopted Feb 2022 ECONOMIC DEVELOPMENT AUTHORITY BY-LAWS Adopted February 22, 2022 These By-Laws,when adopted, are intended to deal with matters not otherwise covered by State Law, City Ordinance or elsewhere. Section I—Meetings SUBD. 1 —Regular meetings of the Economic Development Authority shall be held on the third(3rd) Monday of each month at 6:00p.m. Any regular meeting falling upon a holiday shall be held on the following Tuesday at the same time and place. All meetings, including special and adjourned meetings, shall be held in the City Hall unless otherwise designated. SUBD. 2—At the February Authority meeting or the next regular meeting of the EDA each calendar year, the Authority shall (1) acknowledge City Council's designation of the official newspaper; (2) establish the meeting schedule for the year; (3) choose a Chairperson and a Vice-Chairperson,who shall perform the duties of the Chairperson during the Chairpersons disability or absence, and in case of a vacancy in the office of Chairperson, and until a successor has been appointed and qualifies to fulfill the duties of Chairperson,and; (4) staff will serve as the Secretary/Treasurer. Section II Presiding Officer; Rules of Order SUBD. 1 —The Chairperson shall preside at all meetings of the Authority. In the absence of the Chairperson,the Vice-Chairperson shall preside. In the absence of both,the Executive Director shall call the meeting to order and shall preside until the Authority members present at the meeting choose one of their members to act temporarily as presiding officer. SUBD. 2—The presiding officer shall preserve order, enforce the rule of procedure herein prescribed, and determine all questions of procedure and order. Except as otherwise provided by statute or by these rules,the proceedings of the Authority shall be conducted in accordance with the following rules of order: A. A motion must be seconded before being considered by the Authority and the presiding officer must recognize mover, as well as the seconder. B. Any motion may be withdrawn by its mover with the consent of his/her second. But a motion, once debated, cannot be withdrawn except by a majority vote of the Authority. C. A motion will not be subject to debate until it has been stated by the presiding officer and he/she has opened it to debate. D. Each member, while speaking, shall confine himself/herself to the question at hand and avoid all personal, indecorous, or sarcastic language. 1 E. Whenever any member of the Authority desires to speak on any question,which affects him/her personally, he/she shall first vacate his/her chair and shall not resume his/her seat until the matter under consideration has been acted upon. He/she shall be allowed to make comments on the question as a private citizen only and while a member of the audience. F. Whenever public hearings are held,the presiding officer shall allow any member of the public,the privilege of speaking. A reasonable time shall be allowed to anyone as long as they are not repeating points already made. The presiding officer shall maintain order and may rule anyone out of order. G. At any meeting,the presiding officer will allow the public to participate as long as there is reason to believe the input is beneficial. SUBD. 3 —Any member may appeal to the Authority from a ruling of the presiding officer. If the appeal is seconded,the appealing member may speak first on the reason for his/her appeal. General discussion can then take place on the appeal before a vote. The appeal shall be sustained if it is approved by a majority of the members present. Section III—Agendas SUBD. 1 —The agenda shall be prepared by the EDA Executive Director and shall be closed at noon on the Thursday preceding the meeting for publication purposes. SUBD. 2—Any member may place an item on the agenda by so instructing the Executive Director. SUBD.3—No item shall be placed on the agenda unless the item is expressed in such a way as to clearly show the subject matter involved. SUBD. 4 —The agenda add-ons are subject to approval by a majority vote of the members present and further such add-on items may be discussed, but no action may be taken if any member objects. 2 Section IV—Order of Business SUBD. 1 —Each meeting of the Authority shall convene at the time and place appointed, therefore. Authority business shall be conducted in the following order: 1) Call to Order 2) Pledge of Allegiance 3) Roll Call 4) Approve Agenda 5) Consent Agenda 6) Public Hearings 7) Discussion Items 8) Director's Report 9) Adjourn SUBD. 2—The order of business may be varied by the presiding officer, except that all public hearings shall be held at the time specified in the notice of hearing. Section V—Minutes SUBD. 1 —Minutes of each Authority meeting shall be kept by the Executive Director or, in his/her absence, his/her designee. Resolutions need not be recorded in full in the minutes if they appear in other permanent recordsof the Executive Director and can be accurately identified from the description given in the minutes. SUBD. 2—Minutes of each meeting shall be reduced to typewritten form. At the next regular Authority meeting, approval of the minutes shall be considered by the Authority. The minutes need not be read aloud, but the presiding officer shall call for any additions or corrections. If there is an objection,the Authority shall vote upon the addition or correction. If there are no additions or corrections,the minutes shall stand approved by motion. If there is an objection,the Authority shall vote upon the addition or correction and approve the minutes by motion as amended. Section VI—Quorum and Voting SUBD. 1 —At all meetings a majority of all members shall constitute a quorum for the transaction of business. SUBD. 2—The votes of members on any question pending before the EDA shall be by voice votes. Roll call vote can be requested by any member, except for the following agenda items; approval of the agenda; approval of the consent agenda; and the adjournment. The names of those voting for and against the question shall be recorded in the minutes. If any member present does not vote,the minutes shall state: "Abstain:Name". SUBD. 3 —Except as otherwise provided by statute, a majority vote of the quorum shall prevail. 3 Section VII—Executive Director The Authority may appoint and provide for annual performance review of the Executive Director. Section VIII—Suspension or Amendment of the By-Laws SUBD. 1 —These by-laws may be temporarily suspended by a unanimous vote of the members present. SUBD. 2—These by-laws shall not be repealed or amended except by a majority vote of the whole Authority after notice has been given at some preceding meeting. Section IX—Effective Date SUBD. 1 —These by-laws have been adopted by the Economic Development Authority on the 22nd day of February 2022 and become effective immediately. Attest: EDA Executive Director EDA Chairperson Date: Date: 4 CITY 4F O 43o Third St., Farmington, MN 55024 FARMINGTON 651-28o-6800 Farmington MN.gov TO: Economic Development Authority FROM: Deanna Kuennen, Community Development Director SUBJECT: Monthly Financial Statement DATE: January 17, 2023 INTRODUCTION/DISCUSSION Attached is the monthly Financial Statement of the EDA (12/2022). ACTION REQUESTED Accept the monthly Financial Statement for the EDA. ATTACHMENTS: Type Description D Backup Material 12-22 EDA Fund Report PERIOD 12 CUMULATIVE 12 CUMULATIVE 12 OBJECT ACCOUNT ACTUAL ACTUAL ACTUAL COMPANY ACCOUNT DESCRIPTION 2022 2022 2021 02000-HRA/ECONOMIC Other Income 2 -HRA/ECONOMIC DEVELOP 49SS IINTEREST ON INVESTMENTS 0.00 04.98 -3,135.90 02000-HRA/ECONOMIC EVEL INVEST M 4 20QO-HRA/ECONOMIC DEVELOP SALES OF A5SETS 0.00 Q-QQ -34,000.00 2000-HRA/ECONOMIC DEVEL P2 ERATIN TRANSFERS -41 -4 02000-HRA/ECONOMIC DEVELOP EF ND &REIMB MNT-DBB 0.00 0.00 -122,312.85 Total Other Income -4,166.63 -53,004.98 -196,563.27 Personnel Services Total Personnel Services 0.00 0.00 119,486.48 Other Services&Charges 2 -HRA/ECONOMIC DEVELOP 6220 EOUP SUPPLIES&PART -DBB 0.0 0.00 08 DEVELOP 6280 BOOKS R P 02000-HRAIECONOMIC DEVELOP 1 PROFESSIONAL 26,575.00 HRAZECONOMIC DEV 2.287.46 02000-HRA/ECONOMIC DEVELOP 6404 IT SERVICES 943,0Q 11,316.00 9,47200 02000-HRA/ECONOMIC DEVELOP 6412 CELLULAR SERVICE -DBB 0.00 0.00 348.2 HRA/ECONOMICV 2 -HRA/ECONOMIC DEVELOP 6426RAN E 40.51 485.90 542.38 02000-HRA/ECONOMIC EVE N 02 -HRA/ECONOMIC DEVELOP 6455 LEGAL NOTICES 0 0.00 91.SO 2 HRA/ECONOMIC VEL P 6460 MEMBERLICENSURE 02000-HRA/ECQNOMIC DEVELQPDUES E1,526.00 2 P 6470 TRAININGT 2 -HRA/ECONOMIC DEVELOP 6470 TRAINING S BSI AN E-DBB 0.00 0.00 1,5297_1 2000-HRA/ECONOMIC DEVELOP 6480 MEETING EXPENSE 0.00 183.20 1 02000-HRA/ECONOMICDEVEL P MILEAGE REIMBURSEMENT4 4 0200Q-HRA/ECONOMIC DEVELOP 6505 EQUIPMENT REPAIR/MAINTENANCE 0.00 1.200.OQ 1,296.00 2000-HRA/ECONOMIC DEVELOP 6505 EQUIPMENTA / AINT-DBI3 Qm 0.00 247.64 02000-HRA/ECONOMICDEVEL P DEVELOPER PAYME T .0 16,510,00 7 9 2. 02000-HRA/ECONOMIC DEVELOP 657Q PROGRAMMING EXPENSE 0.00 5,200.00 5,240.20 Total Other Services&Charges 1,148.51 40,598.31 95,112.40 ,Capital Outlay 2 MACHINERY. Total Capital Outlay 0.00 0.00 27,744.00 Debt Service HRA/ECONOMIC02000- Total Debt Service 0.00 0.00 1,230.50 Transfers 2 -HRA/ECONOMIC DEVELOP1731 0 QPERATINGTRANSFERS 0 -44,366.78 44 Total Transfers 0.00 -44,366.78 44,366.78 Total 02000-HRA/ECONOMIC DEVELOPMENT -3,018.12 -56,773.45 91,376.89 Grand Total 1 1 -3,018.12 -56,773.45 91 376.89 CITY OF O 430 Third St., Farmington, MN 55024 FARMINGTON © 651-28o-6800 ®®1 FarmingtonMN.gov TO: Economic Development Authority FROM: Deanna Kuennen, Community Development Director SUBJECT: Ebert Downtown Apartment-TI F Term Sheet Discussion DATE: January 17, 2023 INTRODUCTION/DISCUSSION Over the last number of months, Staff have been working with Ebert Construction regarding a possible market-rate apartment project in downtown Farmington. After looking at various different sites, Ebert Construction entered into a purchase agreement with the owners of the property at 310 Third Street (PI D 147700022028)-and have been working through site layout, project design, and financing associated with the construction of a 4-story, 74-unit market rate apartment with first floor parking and other amenities. The proposed project involves the redevelopment of a .59 acre parcel located on the northern edge of the existing downtown-including the demolition of the existing building, site remediation, reconfiguration of an existing city parking lot, and new construction. It is envisioned that the project will be 4-stories in height, consist of a mix of one-bedroom, one-bedroom plus den, and two-bedroom units, include 63 enclosed parking stalls located on level 1 of the building, and include amenities such as a sky lounge, outdoor rooftop terrace, bike storage, lobby,fitness center, and more. It is estimated that the total project costs will be nearly$20 million, and to support the project the developer is seeking public financing assistance in the form of Tax Increment Financing(TI F). Staff engaged with Ehlers to review the application, prepare a TI F schedule, and conduct a TI F analysis to determine the minimum level of public financing necessary to make the project financially feasible.Jason Aarsvold, Senior Municipal Advisor, completed the analysis and worked with the developer to understand the specifics of the project financing.The process involves analyzing the project returns with and without TI F assistance, comparing rents and operating costs, and ensuring that developer fees are within acceptable ranges. Based on this review-the attached Term Sheet is being presented for discussion purposes. The analysis assumes that the project will qualify as a Redevelopment TI F district(final determination pending), and that the project will require the following: 7. Public Assistance: Subject to all terms and conditions of the Development Agreement, the EDA will reimburse the Developer with 95%Available Tax Increment for up to a total of approximately$1,750,000(Present Value)of Qualified Costs related to the Minimum Improvements. "Qualified Costs" shall mean acquisition, demolition, remediation, site improvement and infrastructure costs incurred in connection with the construction of the Minimum Improvements. Payments will be made through a TIF Note issued on a pay-as- you-go basis over a MAXIMUM of 20 years at a rate of 6.00%per annum. ACTION REQUESTED No action required.The Developer and Jason Aarsvold will be at the meeting to discuss the project and the proposed Term Sheet.The EDA will be asked to consider the TI F Plan and Contract for Private Development(TI F Agreement) at the February meeting, and the City Council will conduct the required public hearing at their meeting on February 20th (please see attached TI F#15 Schedule). ATTACHMENTS: Type Description D Backup Material TI F Term Sheet D Backup Material Updated TI F Schedule-TI F #15 Term Sheet This Term Sheet is executed as of this day of , 2023 by and between the Developer and the Farmington Economic Development Authority (the "EDA") and is intended to set forth the general terms upon which the parties hereto may be willing to enter into a Development Agreement. Except for Section 9 below (which shall be binding upon the Developer), this Term Sheet shall not be deemed conclusive or legally binding upon either party and neither party shall have any obligations regarding the property defined below unless and until a definitive Development Agreement is approved by the EDA and executed by both parties. 1. Developer: Ten Nineteen Development LLC 2. Property: 310 3rd Street(PID: 14-77000-22-028) Adjacent Vacated City ROW (description needed) 3. Key Business Terms—Developer: a. Execution of Development Agreement b. Acquisition of Property C. Preparation and Submittal of Construction Plans 4. Key Business Terms—EDA: a. Creation of a new Tax Increment Financing District for the project, subject to qualification as a redevelopment Tax Increment District b. Approval of Construction Plans C. Execution of Development Agreement d. Determination that Developer has sufficient financial means to construct Minimum Improvements e. Obtain all land use approvals, permits necessary to construct the project, and payment of customary City fees 5. Minimum Improvements: Construction of a 4-story building with approximately 74 units of market rate rental housing and related amenities 6. Construction Schedule: Commence construction by June 1, 2023, and complete by December 31, 2024. For the purpose hereof, "Commence" shall mean beginning of physical improvement to the Property,including demolition,grading,excavation,or other physical site preparation work. "Complete" shall mean that the Minimum Improvements are sufficiently complete for the issuance of a Certificate of Occupancy. 7. Public Assistance: Subject to all terms and conditions of the Development Agreement, the EDA will reimburse the Developer with 95%Available Tax Increment for up to a total of approximately $1,750,000 (Present Value) of Qualified Costs related to the Minimum Improvements. "Qualified Costs" shall mean acquisition, demolition, remediation, site improvement and infrastructure costs incurred in connection with the construction of the Minimum Improvements. Payments will be made through a TIF Note issued on a pay-as- you-go basis over a MAXIMUM of 20 years at a rate of 6.00% per annum. 8. Building Value:The buildings to be constructed upon the Property are anticipated to have an assessed value of approximately$14,800,000. 9. Fees: The City acknowledges the Developer made an escrow deposit of $6,000 for reasonable out-of-pocket expenses for legal and financial consultant services related to TIF district creation, drafting the Development Agreement, analysis, and administrative fees associated with this transaction. This includes costs related to the above incurred to date as well as future expenditures. The Developer will be required to deposit additional funds if the initial deposit is fully drawn. Any funds deposited by Developer and not expended by the City for its legal, financial advisor, or other consultant fees on or before the date of execution of the Development Agreement will be returned to the Developer without interest. The Developer shall pay all other normal and customary City fees and expenses, unless otherwise specified in the Development Agreement,for the approval and construction of the Minimum Improvements. 10. Miscellaneous: a. No transfer of Property or Development Agreement to an unrelated entity without EDA consent. b. Developer covenants to pay property taxes and maintain customary insurance. IN WITNESS WHEREOF, the parties have executed this Term Sheet as of the date first set forth above. TEN NINETEEN DEVELOPMENT LLC By: Its: FARMINGTON ECONOMC DEVELOPMENT AUTHORITY By: Its: % EHLERS N PUBLIC FINANCE ADVISORS Schedule of Events Farmington Economic Development Authority Dakota County, Minnesota For the proposed Modification to the Redevelopment Plan for Downtown Redevelopment Project & the proposed establishment of Tax Increment Financing District No. 15 - Ebert Downtown Housing (a redevelopment district) January 11, 2023 January 6, 2023 Project information, property identification numbers,fiscal impacts and maps sent to Ehlers for drafting documentation. Ehlers confirms whether building permits have been issued on the property to be included in the TIF District. January 10, 2023 Letter received by County Commissioner giving notice of potential redevelopment TIF district(at least 30 days prior to publication of public hearing notice). [Ehlers will distribute.] January 17, 2023 EDA meets at 5:00 PM to review the Term Sheet and discuss the Plans, resolution adopting the Plans in connection with the TIF District, and actions associated with the TIF creation. January 20, 2023 Fiscal/economic implications received by School Board Clerk and County Auditor(at least 30 days prior to public hearing) and County receives information for review of county road impacts. [Ehlers will distribute.] *The County Board,by law,has 45 days to review the TIF Plan to determine if any county roads will be impacted by the development. Because City staff believes that the proposed TIF district will not require unplanned county road improvements,the TIF Plan was not forwarded to the County Board 45 days prior to the public hearing. Please be aware the County Board could claim that tax increment should be used for county roads,even after the public hearing. BUILDING COMMUNITIES. IT'S WHAT WE DO. E] info@ehlers-inc.com �� 1(800)552-1171 (9 www.ehiers-inc.com % EHLERS ft PUBLIC FINANCE ADVISORS February 10, 2023 Publication of hearing notice and map in the Apple Valley/Farmington/Rosemount Dakota County Tribune(at least 10 days but not more than 30 days prior to hearing). [Ehlers will submit notice, map and instructions. Publication deadline: February 6, 2023.] February 20, 2023 EDA meets at 5:00 PM to consider the TIF Plan and Contract for Private Development associated with the proposed project and TIF creation. EDA considers an Interfund Loan resolution in connection with the TIF District. City Council holds public hearing at 7:00 PM on the modification to the Redevelopment Plan for Downtown Redevelopment Project and the proposed Establishment of Tax Increment Financing District No. 15-Ebert Downtown Housing and considers a resolution approving the Plans. [Ehlers and attorney provide packet information January 30, 2023.] City considers an Interfund Loan resolution in connection with the TIF District. February 21, 2023 City may issue building permits. Before June 30, 2023 Ehlers files the Plans with the MN Department of Revenue, Office of the State Auditor, and requests certification of the TIF District with the County. An action under subdivision 1,paragraph(a),contesting the validity of a determination by an authority under section 469.175,subdivision 3,must be commenced within the later of: (1)180 days after the municipality's approval under section 469.175,subdivision 3;or (2)90 days after the request for certification of the district is filed with the county auditor under section 469.177,subdivision 1. BUILDING COMMUNITIES. IT'S WHAT WE DO. info(behlers-inc.com 1(800)552-1171 Q) www.ehiers-inc.com CITY OF O 43o Third St.,Farmington,MN 55024 FAR M I N GTO N © 651-28o-6800 FarmingtonMN.gov TO: Economic Development Authority FROM: Deanna Kuennen,Community Development Director SUBJECT: 2023 EDA Budget and Work Plan/Goals DATE: January 17,2023 INTRODUCTION DISCUSSION As part of the 2023 budgeting process,the following budget was approved for the EDA.The budget includes limited funds for basically two categories of expenses: • Operational expenses-legal,insurance,dues,tools used to do the work of the EDA. • Program funds-funds paid to other organizations and current grant programs. CUMULATIVE t OBJECT ACCOUNT BUDGETETET COMPANY ACCOUNT SUBSIID iV DESCRIPTION 2023 02000 Hftovr NOYC DEVFI.OPYENT .... ....... ._.. _-- _. OOlaf In- 2000 _ 0 -HRA/ECONOMIC DEVELOPMENT INTEREST ON INVESTMENTS -1.800.001 02000-HRNECONOMIC DEVELOPMENT 205 OPERATING TRANSFERS -50.000.DCI], n e/6 Wlli M from 0.-1 Fund T tai r 1 ome: :61:666-00 _ Otlle Sa &Ch.,g,. _. 02000 HRAIECONOMIC DEVELOPMENT 8401 PROFESSIONAL SERVICES 7,000 00 02000_HRNECONOMICDEVELOPMENT 3 LEGAL 1.000,00 02000-HRAIECONOMIC DEVELOPMENT 28 _ INSURANCE 580.00 02000-HRACCONOMIC DEVELOPMENT 50 OUTSIDE PRINTING 250.00 02000-HRAIECONOMIC DEVELOPMENT 55 LEGAL NOTICES 100.00 __...__. _–.__._......_ —_____ . .—– .. _.. 02000-HRAIECANOMIC DEVELOPMENT _ MEMBERDUE38 LICENSURE 2.500.DO EDAM0380),MAM(S700),OMr 02000-VIRAMCONOMIC DEVELOPMENT 7D TRAINING E SUBSISTANCE 3.500.00 02ODD-HRMECONOMIC DEVELOPMENT 85 -_ -- _ _ MI EA0E REIMBURSEMENT 02000-MRMECONOMIC DEVELOPMENT 7.000.00 1.600.003dunxUnk(tt20%,Indsa/pn(E�Oj,Ca/eMagy(tf001 02000-HRMECONOMIC DEVELOPMENT - DEVELOPER PAYMENTS 80.000.00 Facade and RadavNapmeMP/dOralM 02000-WAIECONOFOC DEVELOPMENT PRO(3RM4MIND EXPENSE 70.000.00 Cpenb BeHMee(t9000).OMl Total Oth—Services 8 Char as 87 St0_17D� Tal02000- DEVELOPMENT ) T.14 29.910-001 An Wdltdnd balance needed Staff would like to review the budget and discuss 2023 economic development priorities.Based on initial review-Staff sees an opportunity to reallocate funds,revisit existing programs,and refocus how to utilize the very limited budget to work toward priorities identified in the City Council/Planning Commission Strategic Planning Process. Items for consideration and discussion include: 1. The EDA has an estimated 12/31/2022 Cash Balance of$220,000.The 2023 budget uses approximately$30,000 of this cash balance(reserves) to balance 2023 revenue and expenses. 2. Programming-what is the status of the existing programs(Facade I mprovement Program,Redevelopment and Property Reinvestment Program). 3. Are there different program ideas that the EDA might fund that would drive investment of businesses. ACTION REQUESTED Staff is requesting discussion on 2023 goals and priorities to hest utilize the EDA funding.I nputfrom the EDA will be consolidated into a work plan that will be brought back to the EDA for further discussion and review. ATTACHMENTS: Type Description D Backup Material 2022 Strategic Plan CITY OF FARMINGTON Strategic Planning Process Preface The Waldron Company was hired to conduct a general strategic planning process with the City of Farmington to focus on economic development. An initial meeting with the city administrator was convened to help the consultant gain a better understanding of the community setting, the politics, the potential priorities, as well as the economic development opportunities and challenges. Through these discussions, it was decided that a four to six hour, one day session would meet the needs of the community. Participants: Qy Council: Joshua Hoyt, Mayor Nick Lien Katie Porter Steve Wilson Planning; Commissioners: LeeAnn Lehto Rebecca McAbee Dirk Rotty Phil Windschitl City Staff: Matt Decur Julie Flaten Lynn Gorski Kellee Omlid Kalley Swift Tony Wippler Introductions The participants briefly introduced themselves and touched on their respective backgrounds. This was very helpful to the consultant in terms of gaining an overall perspective and understanding of the community. Consultant Waldron discussed his background that included various positions such as city manager, community development director, Hamline professor, as well as an elected official. The general plan, expected outcomes, and agenda were reviewed and agreed upon by all participants. General Municipal Trends To provide overall context,the consultant discussed the various trends that he has seen in municipal government within the cities and counties in which he has worked over the past few years. The trends are depicted as follows: Cities are becoming much more aggressive in terms of taking control of their own economic development future. Such cities have been adding staff and hiring lobbyists and consultants to help facilitate their efforts. They have also developed new and innovative tools to meet their objectives. They are not afraid to get involved when such involvement helps them meet their economic development needs. Cities that are most successful in economic development efforts have worked hard to get everyone on the same page. They understand how critical it is to have the city council, advisory bodies, and city staff all moving in the same direction and with a clear understanding of what that direction entails. Staff turnover is a challenge in many cities. Recruiting and retaining good staff, in the current environment, is a critical challenge that many are facing. Many cities are working to get control of priority land for economic development. They are utilizing options or outright purchasing property to gain control of land in areas deemed critical for development opportunities. This helps control costs and reduces projects to a two-party agreement as opposed to a three-party agreement by removing the landowner from the equation. Many cities have created Economic Development Authorities (EDAs)to facilitate their efforts and effectively use a streamlined process whereby the city council serves in the capacity of the EDA. This ensures policy coordination and speeds up the development process overall. Effective cities understand the importance of strategic planning. They have made this part of their DNA and establish goals and priorities on an annual basis. For many communities, it has become automatic that at a set time each year,they work on updating and modifying their strategic plan. More communities are trying to focus on succession planning. With the retirement of the baby boomers and the challenge of recruiting staff, succession planning has become a top priority. Communication appears to be an issue in many cities. The ability to effectively communicate with the public and to reach certain groups is an essential role of the government. Also there is a need for more effective communication within municipal organizations between staff, departments, etc. Social media has created a whole new challenge for communities. Many communities have developed initiatives to encourage diversity and inclusion. There is an effort to have municipal workforces resemble the broader community it serves. This has not been an easy task for cities. Cities are finding it challenging to maintain the vibrancy of their older housing stock. In addition, aging infrastructure is a major challenge for a significant number of communities. Weaknesses The participants discussed what were deemed to be the basic weaknesses within the City of Farmington. Those weaknesses are depicted as follows: • People do not know about Farmington and that it is "open for business." • The City has a disproportionate amount of its tax value in residential. • Being situated next to Lakeville and Rosemont creates challenges. • Much of the land available for development is encumbered and is not necessarily available for development. • There is a resistance to change. There is a need to better communicate to ensure that the public understands issues such as taxation, development, etc. • The City needs to get all relevant parties on the same page. • There are essentially two separate communities in Farmington. One is the downtown area and the second is the area north of 50. • The City is not properly prepared for development; it needs to be more proactive. • Staff turnover can create challenges. • The City is not on the offensive in terms of promoting itself. • The City needs to have something to promote to its families and all it can offer to them. Strengths The participants discussed what were deemed to be the strengths within the City of Farmington.. Those strengths are depicted as follows: • Location can be deemed a positive,particularly as individuals look for living options in the outer ring suburbs. • The City has excellent police and fire departments;the crime rate is extremely low. • The City has a strong and productive workforce. • The City has high quality housing. • Staff is really committed to the City. • Farmington is a very generous community. • Farmington has a small town feel. • The City utilizes innovative and unique codes that allow for developments that would not occur elsewhere. • The City has great parks, trails, and open space. • The City has a great history. • The City has a substantial amount of open land for future development. • The City is very supportive of the farming community. • Farmington has a great identity. • The staff, as well as the overall community, represent a very good team. Significant Issues The participants were asked to discuss the most serious issues, in their eyes, in the City of Farmington; the ones that"keep them awake at night". The most significant issues are depicted as follows: • The roles and responsibilities need to better mesh between the city council, advisory bodies, and staff. • The long-term financial health of the City is critical. The departments have been underfunded for years and if a new tax base is not generated on undeveloped land, future needs may not be met. • Staff vacancies are a concern. There needs to be an effort to retain staff. Staff is already burdened with meeting the day-to-day responsibilities which can make it difficult to take on future endeavors. • The two Farmington perspectives create difficulties. • The City does not really tell its story. • There is a need to help the citizens understand the positive story of Farmington. • The City has an aging park and trail system and also lacks amenities. • There is a need to develop amenities; however, there is resistance to tax increases. • The availability of property for development is limited. • Staffing and hiring needs are a concern. • A long-term financing plan is critical. • Farmington lacks its own marketing plan. • There is a need to build relationships with other entities such as the YMCA, Lifetime Fitness, etc. • External communication is lacking in many areas. Priorities Based on the aforementioned discussions of weaknesses, strengths, and significant issues,the participants outlined their main priorities for the next year. What follows is a listing of those priorities: • All of the parties present should continue working together, on an ongoing basis, to stay on the same page. • The City needs to aggressively market Farmington and tell its story, be willing to pay for marketing efforts, and also have the capacity to properly react when the marketing is successful. • The City needs to fill vacant positions and keep enhancing the onboarding program for new staff. • The City needs to establish a business retention visitation program. • The City needs to complete its comprehensive plan amendment and develop corridor plans. • The City needs to properly maintain its parks. • The City needs to develop more amenities, such as parks and trails. • The City needs to develop long-term funding for parks and recreation. • The City needs to establish clear roles and responsibilities as staff positions are filled. • When the City has failed in terms of a site selection effort, we need to understand what failed, and why, and then make the needed improvements. • The City needs to develop a five to 10 year budget cycle. Rankings After the respective priorities were listed,the participants were asked to rank the top five priorities. What follows is a depiction of the ranking by the participants: 1. The City needs to aggressively market Farmington and tell its story. As part of this effort, the City needs to be willing to pay for marketing efforts and to be sure that it has the capacity to properly react when marketing is successful. 2. All of the participants should continue working together, on an ongoing basis,to stay on the same page. 3. The City needs to complete its comprehensive plan amendment and develop new corridor plans. 4. The City needs to develop long-term funding for parks and recreation. 5. (Tie) The City needs to properly maintain parks. 5. (Tie) The City needs to develop a five to 10 year budget cycle. Implementation Clearly, the City of Farmington has a very positive environment and good working relationship to move a strategic economic development plan forward. At this point,the City Administrator will review the priorities and, in collaboration with the department heads, develop action/work plans to achieve these priorities. It should be noted that 70 percent of these plans do not get implemented; however, the consultant has spent extensive time reviewing methodologies that can reverse this trend. The Waldron Company maintains that a plan will move forward with a reasonable chance of success if the following processes are utilized: 1. Focus on the most important, biggest priorities. By focusing on the most important items, the City will be able to move forward with what matters most. The City's implementation team needs to be very careful to not get wrapped up in the intensity of the day-to-day activities otherwise known as the "whirlwind of local government." 2. Act on what are known as lead measures (small mileposts). Lag measures are what a community uses to figure out if it has met long-term goals. However, lead measures are extremely important in that they help teams continually drive toward the success of goals. Lead measures are predictive of achieving the goal while lag measures tell what was actually achieved. If all the lead measures are met, one will clearly meet the long-term lag objective. 3. Keep a compelling scorecard. People play differently when scoring is taking place; when they are the ones keeping score, they really become involved! Keeping score in terms of how well the work elements of the plan are moving forward is absolutely critical. What gets measured tends to get done! 4. Create a cadence of accountability. This is where time is alloted within meetings for the team to hold each other responsible for moving forward with respect to the work plan. It is suggested that on a regular basis, the team looks at where it should be and what was accomplished. By doing so, they are able to develop a regular execution plan that they are moving forward in terms of implementing the overall strategic plan. Make certain that someone is assigned to track the lead measures and that they are entered on the scorecard. 5. The Waldron Company would suggest that staff discuss the progress of the lead activities at department head meetings. I would also suggest that the City Administrator meet with the City Council on, at least, a quarterly basis to review the progress on the work of the plan/scorecard. A formal update on the plan and the priorities is encouraged on an annual basis. Consultant's Final Comments There were some very positive elements that the Consultant clearly ascertained while working with the team on the strategic economic development plan and should to be pointed out: • The City Council works well together. They are supportive of staff and are committed to working with all parties for the benefit of the City of Farmington. The City Council is providing important stability. • The staff is very competent and their commitment to Farmington is exemplary. • There is a clear theme of very strong community pride that appears to run through all segments of the City. • It is extremely positive that, first of all,the City Council,the Planning Commission, and staff convened to undertake this effort. It is even more positive that they stated an interest in continuing to work together on an ongoing basis to facilitate the development of the City as well as the economic development plan. CITY OF O 43o Third St., Farmington, MN 55024 FARMINGTON 0 651-28o-6800 AQ t Farmington M N.gov TO: Economic Development Authority FROM: Deanna Kuennen, Community Development Director SUBJECT: Extension Request-2022 Facade Improvement Program DATE: January 17, 2023 INTRODUCTION/DISCUSSION The EDA awarded a Facade I mprovement Grant, and entered into a Grant Agreement, in April 2022 with Edward Endres for property located at 409 Third Street.The purpose of the grant was to fund facade improvements to include: • New windows, new awnings over the windows on the south and west sides of the building, and new light fixtures on the south and west sides of the building. Per the grant agreement,the grantee agrees to obtain all necessary permits, complete the improvements within 120 days, and submit all required information so that the grant can be distributed by/before December 30, 2022. Staff received a request for reimbursement on December 31, 2022 with supporting documentation. However-as part of the review it was identified that additional information is still required in order to satisfy the conditions of the grant and make payment.The work has been completed, and therefore Staff is requesting: • Extension of 45 days from the due date to submit required documentation- February 14, 2023. If all information is provided-the grant payment of one-half(1/2) of the actual I mprovement Costs incurred (not to exceed $5,000)will be processed for payment. ACTION REQUESTED Approve via motion and extension for the 2022 Facade I mprovement Program grant for improvements to the property located at 409 Third Street, and who Edward Endres is the applicant. ATTACHMENTS: Type Description ❑ Cover Memo Facade Improvement Grant Agreement City of Farmington EDA Facade Improvement Program Grant Agreement This Facade Improvement Grant Agreement(hereinafter referred to as"Agreement")is made and entered into this-Lg day of April, 2022 by and between Edward M.Endres,Farmington Pizza Man Bar&Grill at 409 Third Street,Farmington,Minnesota (hereinafter referred to as"Grantee") and the City of Farmington Economic Development Authority(EDA),a public body corporate and politic,having its principal offices at 430 Third Street,Farmington,Minnesota (hereinafter referred to as "Grantor"), WHEREAS,the Grantee acknowledges that the source of funding for this Agreement are City of Farmington funds provided and approved for disbursement by the EDA as grants. WHEREAS,the Grantor has established a Fagade Improvement Program (hereinafter referred to as "Program")to assist businesses with property fagade improvements, either cosmetic or structural, within the 2022 eligibility boundary along Minnesota Highway 3 and within downtown Farmington;and WHEREAS,the Grantee.has applied for Fagade Improvement Program funds for eligible fagade improvements at their property located at 409 Third Street with the tax pin 147700020067 (hereinafter referred to as"Property");and WHEREAS,the Grantor has reviewed the Grantee's application and determined that the proposed fagade improvement project meets the requirements of the Program;and WHEREAS,the Grantee desires to participate in the Program,on the terms and conditions set forth below. NOW,THEREFORE,in consideration of the agreements hereinafter contained,the parties agree as follows: A-Property Improvements: 1. The Grantee agrees and acknowledges that the approved fagade improvements (hereinafter referred to as"Improvements")which will be reimbursed are for the project(s)outlined in the Grantee's original application,and are as follows: a. New windows,new awnings over the windows on the south and west side of the building,and new light fixtures on the south and west side of the building. 2. If the Grantee wishes to revise the Improvements receiving grant funding through the Program,the Grantee must submit the revised plans to city staff to be reviewed by the EDA. a. The EDA will review the revised plans at the next earliest Regular EDA Meeting. 3. The Grantee agrees to apply for and receive all necessary permits and approvals from the city and from any other governing authority with jurisdiction over the Property related to the construction of the Improvements prior to work beginning. 4. The Grantee agrees to complete the Improvements in accordance with all applicable laws, rules and regulation,including but not limited to,Farmington City Code,MN Building Code, Fire Code,etc. 1 S. The Grantee shall select the means,method and manner of performing the Agreement requirements and Improvements. B-Improvement Timeline: 1. The Agreement will be terminated 120 days from the date of the Agreement on page 1 if construction work has not yet begun. 2. The Improvements shall be completed in a timely manner and all grant funds must be distributed by or before December 31,2022. a. The Agreement maybe extended once,with the length of the extension to be determined on a case-by-case basis.If an extension is necessary,a written extension request shall be made to the Executive Director of the EDA. C-Payment of Program Funds 1. Grant funds will be paid on a reimbursement basis only after all Improvements have been completed according to the authorized scope of work and have been accepted by the Grantor.The cost of complete construction of the Improvements,including out-of-pocket costs for required permitting and approvals,shall be defined as the "Improvement Costs." 2. The Grantee shall be responsible for making the initial payments to all contractors and others involved in the construction and permitting of the Improvements. 3. Upon final completion of the Improvements,the Grantee shall make a request for reimbursement of one-half(1/2) of the actual Improvement Costs incurred by the Grantee, but in no event shall the reimbursement exceed Five Thousand Dollars ($5,000).The request for reimbursement shall include: a. Proof of final inspection for the Improvements. b. After photos of the property reflecting the Improvements made. c. A dated copy of the final itemized invoice(s)that comprised the Improvement Costs or a sworn construction statement. d. Dated proof of payment of said invoice(s)that comprised the Improvement Costs. e. Such other documentation as the EDA staff may require in its reasonable discretion to verify the amount of and payment of the Improvement Costs by the Grantee. f. The EDA will have ten(10)business days following the submittal of a complete request for reimbursement to submit in writing explanation of the EDA's reason for denial of repayment or to issue the check to the Grantee in the amount of one-half (1/2) of the actual Improvement Costs incurred by the Grantee,but in no event shall the reimbursement exceed Five Thousand Dollars ($5,000). 4. The Grantee agrees to use the proceeds of the grant reimbursement solely for the Improvements. D-Liability and Indemnification 1. Neither the city nor the EDA shall in any event be liable to the Grantee,nor to any of its agents,employees,guests or invitees,for damages arising from bodily injury,death, 2 property damage,sickness,disease,or loss and expense resulting from or alleged to result from Grantee's operations under this agreement. 2. The Grantee shall indemnify,save,defend and hold harmless the city and the EDA from any claims,liability,causes of action,damages,losses,and costs including attorney fees resulting directly or indirectly from any act or use of Program funds including the defect or claimed defect of any of the Improvements or any such manner arising from this Agreement. 3. This section shall survive the termination,expiration or cancellation of this Agreement. E-Written Notice 1. When written notice is required or permitted due to the Improvements,Agreement and/or Program,it shall be addressed hereunder to the follow addresses. Written Notice to the Grantor: Written Notice to the Grantee: Farmington EDA Farmington Pizza Man Bar&Grill Attn: Executive Director Attn: Edward Endres 430 Third Street 409 Third Street Farmington,MN 55024 Farmington,MN 55024 F-Agreement 1. This Agreement constitutes the complete agreement between the parties and supersedes any prior oral or written agreements)between the parties regarding the subject matter contained herein.There are no verbal agreements that change this Agreement. 2. The Grantee shall neither assign nor transfer any rights or obligations under this Agreement without the prior written consent of the EDA. 3. Any alterations,variations,modifications,amendments or waivers of the provisions of the Agreement shall only be valid when they have been reduced to writing and signed by the authorized representatives of the parties. G-Cancellation 1. Prior to the disbursement of funds,this Agreement may be cancelled by the EDA or Grantee at any time,with or without cause,upon thirty(3 0)days written notice to the other party. 2. If the Grantee fails to perform any of the provisions of this Agreement including providing false,misleading or incomplete information in documents submitted to the City,fails to use grant funds exclusively for the Improvement Costs,or otherwise breaches or fails to comply with any of the terms of this Agreement,it shall be in default. 3. The EDA may act to protect its interest,including requiring the return of all or part of the funds already disbursed. a. If all or part of the funds are required to be repaid back to the EDA,it shall constitute default and the Grantee has thirty(30) days from the date of written notice to pay the EDA.In the event of untimely repayment by the Grantee of the demand following a declaration of default by the EDA,the EDA may thereafter assign this Agreement to the City for the City to assess the unpaid amounts upon the Property and certify the same to the county auditor for collection in like manner as 3 property taxes upon the Property.The Grantee expressly waives any right granted by statute or otherwise to object or appeal the assignment and assessment upon the Property. H-Records-Availability.Access and Audit Clause 1. Pursuant to Minn.Stat.§16C.05,subd. 5,the Grantee agrees that the EDA,City,the State Auditor or any of their duly authorized representatives at any time during normal business hours and as often as they may reasonably deem necessary,shall have access to and the right to examine,audit,excerpt and transcribe any books,documents,papers,records,etc. which are pertinent to the accounting practices and procedures of the Grantee which specifically involve the transactions relating to this Agreement.The Grantee agrees to maintain these records for a minimum of six years from the date of Agreement fulfillment or termination of this Agreement as outlined by Minn.Stat.§16C.05,subd.5. I-Force Majeure 1. The parties shall be excused from performance under the Agreement while and to the extent that either of them are unable to perform,for any cause beyond its reasonable control.Such causes shall include,but not be restricted to,fire,storm,flood,earthquake, explosion,war,total or partial failure of transportation or delivery of materials and supplies,interruption of utilities and any act of government or military authority.In the event either party is rendered unable wholly or in part by force majeure to carry out its obligations under this Agreement then the party affected by force majeure shall give written notice with explanation to the other party immediately. J-Conflict of Interest 1. No elected official,officer,or employee of the City or EDA shall during his or her tenure or employment and for one year thereafter,have any interest,direct or indirect,in this Agreement or the proceeds thereof. K-Minnesota Laws Govern 1. The laws of the state of Minnesota shall govern all questions and interpretations concerning the validity and construction of this Agreement and the legal relations between the parties and their performance. 4 IN WITNESS WHEREOF,the parties hereto have hereby executed this agreement as ofthe year and date above on page 1. GRANTOR', GRANTEE; CITY OF FARMINGTON EDA EDWARD M.ENDRES 4303HIRD STREET 409 THIRD STREET FARMINGTON,MN 55024 FARMINGTON,MN 55024 BY: BY: Steve Wilson,Chair Edward Endres,.Property Owner 41 DATE: �� DATE- BY: Samantha D,!Maggio,Exe utive Director DATE I 5 CITY OF O 43o Third St., Farmington, MN 55024 FARMINGTON © 651-28o-6800 Mli ® Farmington MN.gov TO: Economic Development Authority FROM: Deanna Kuennen, Community Development Director SUBJECT: Director's Report DATE: January 17, 2023 INTRODUCTION/DISCUSSION Over the course of the next months -Staff will be focusing on the following initiatives: 1. Developing an EDA Work Plan. 2. Meeting with economic development partners within the region. 3. Program review, organization, and development. 4. Marketing opportunities. 5. Business visits. Moving forward, Staff will also report on various activities and on the status of projects. Please expect the format for the Director's Report to evolve overtime. ACTION REQUESTED No action required. Informational purposes only.