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HomeMy WebLinkAbout05.19.25 EDA Packet Meeting Location: Farmington City Hall, Conf Room 170 430 Third Street Farmington, MN 55024 ECONOMIC DEVELOPMENT AUTHORITY REGULAR MEETING AGENDA Monday, May 19, 2025 5:00 PM Page 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA 5. CITIZEN COMMENTS 6. CONSENT AGENDA 6.1. Minutes of the April 21, 2025 Regular Economic Development Authority Meeting Approve the minutes of the April 21, 2025 Regular Economic Development Authority Meeting. Agenda Item: Minutes of the April 21, 2025 Regular Economic Development Authority Meeting - Pdf 3 - 5 6.2. Open to Business - Q1 Report, 2025 - Dakota County No action required. This report is provided for informational purposes only. Agenda Item: Open to Business - Q1 Report, 2025 - Dakota County - Pdf 6 - 12 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS 8.1. Presentation of the 2024 Dakota County Housing Needs Assessment No action requested. This presentation is for informational purposes only. 13 - 71 Page 1 of 136 Agenda Item: Presentation of the 2024 Dakota County Housing Needs Assessment - Pdf 8.2. Partnership Presentation - Dakota County Community Development Agency (CDA) No action required. The EDA is asked to participate in a conversation around collaboration and enhancing existing partnership opportunities. Agenda Item: Partnership Presentation - Dakota County Community Development Agency (CDA) - Pdf 72 - 89 8.3. Initial Discussion - Farmington Local IMPACT Program (IMPACT) No action requested. This is a discussion item, and Staff is seeking input and direction from the EDA. Agenda Item: Initial Discussion - Farmington Local IMPACT Program (IMPACT) - Pdf 90 - 92 8.4. Grocery Market Study The report is attached for review and Staff are glad to answer any questions. Agenda Item: Grocery Market Study - Pdf 93 - 113 9. DIRECTOR'S REPORT 9.1. Director's Report No action questions. This item is informational and is provided to communicate how the EDA time and money resources are allocated and to track and measure the impact of initiatives. Agenda Item: Director's Report - Pdf 114 - 136 10. ADJOURN Page 2 of 136 ECONOMIC DEVELOPMENT AUTHORITY AGENDA MEMO To: Economic Development Authority From: Shirley Buecksler, City Clerk Department: Administration Subject: Minutes of the April 21, 2025 Regular Economic Development Authority Meeting Meeting: Economic Development Authority - May 19 2025 INTRODUCTION: For Commission approval are the minutes of the April 21, 2025 Regular Economic Development Authority Meeting. ACTION REQUESTED: Approve the minutes of the April 21, 2025 Regular Economic Development Authority Meeting. ATTACHMENTS: 04.21.25 EDA Minutes Page 3 of 136 EDA Minutes of April 21, 2025 Page 1 of 2 City of Farmington Economic Development Authority Regular Meeting Minutes Monday, April 21, 2025 The Farmington Economic Development Authority met in regular session on Monday, April 21, 2025, at Farmington City Hall, 430 3rd Street, Farmington, Minnesota. 1. CALL TO ORDER Chair Hoyt called the meeting to order at 6 pm. 2. PLEDGE OF ALLEGIANCE Chair Hoyt lead everyone in the Pledge of Allegiance. 3. ROLL CALL Members Present: Chair Joshua Hoyt Commissioners Holly Bernatz, Jake Cordes, Nick Lien, and Steve Wilson Members Absent: None Staff Present: Lynn Gorski, City Administrator David Chanski, HR Director/Assistant City Administrator Deanna Kuennen, EDA Executive Director Stephanie Aman, Economic Development Coordinator Shirley Buecksler, City Clerk Also Present: Natalie Mouilso, Dakota County Business Advisor 4. APPROVE AGENDA Motion was made by Commissioner Lien and seconded by Commissioner Wilson to approve the agenda, as presented. Motion carried: 5 ayes / 0 nays 5. CITIZEN COMMENTS No one addressed the Commission to speak. 6. CONSENT AGENDA 6.1 Minutes of the March 17, 2025 Regular Economic Development Meeting 6.2 Monthly Financial Report 6.3 Minnesota Real Estate Journal Awards Sponsorship Page 4 of 136 EDA Minutes of April 21, 2025 Page 2 of 2 6.4 Sponsorship – Mid America Economic Development Council B est Practices Conference Motion was made by Commissioner Wilson and seconded by Commissioner Lien to approve the Consent Agenda, as presented. Motion carried: 5 ayes / 0 nays 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS 8.1 Partnership Presentation – Minnesota Consortium of Community Developers (MCCD) Natalie Mouilso, Dakota County Business Advisor, presented an overview of the Open to Business program, business activity, and accomplishments in Farmington throughout 2024, as well as highlights from the first quarter of 2025. 9. DIRECTOR’S REPORT 9.1 Director’s Report 10. ADJOURNMENT Motion was made by Commissioner Wilson and seconded by Commissioner Cordes to adjourn the meeting at 6:49 p.m. Motion carried: 5 ayes / 0 nays Respectfully submitted, Shirley R Buecksler City Clerk Page 5 of 136 ECONOMIC DEVELOPMENT AUTHORITY AGENDA MEMO To: Economic Development Authority From: Deanna Kuennen, Community & Economic Development Director Department: EDA Subject: Open to Business - Q1 Report, 2025 - Dakota County Meeting: Economic Development Authority - May 19 2025 INTRODUCTION: Open to Business is a partnership between Dakota County CDA, Dakota County Cities, and the Metropolitan Consortium of Community Developers (MCCD), that provides one-on-one business counseling to current and prospective entrepreneurs. Natalie Mouilso is the assigned business advisor to Dakota County, and she works with businesses free of charge, providing business counseling, financial advice, and access to capital. DISCUSSION: Attached is the Q1 report for 2025, summarizing the business activities in Dakota County. Included is information on the number of businesses served, referral sources, outreach, and case studies. At the April EDA meeting, Natalie Mouilso presented in-person an overview of her work, including the highlights of 2025 year-to-date activity and challenges. ACTION REQUESTED: No action required. This report is provided for informational purposes only. ATTACHMENTS: Open to Business Narrative Report - Dakota County - Q1 2025 Page 6 of 136 Natalie Mouilso, nmouilso@mccdmn.org, 952-451-6390 First Quarter – 3/31/2025 Clients Served YTD Client Inquiry 1 Existing - Challenged 13 Existing -Opportunity 24 Pre-start planning 16 Start-up 13 Total 67 Business Owner Demographics YTD # of Clients Low-Income Owned 37 BIPOC or Immigrant Owned 35 Woman Owned 42 Financing & Access to Capital YTD Loans & Grants Approved (YRLY Total) $337,414.00 Equity (YRLY Total) $108,079.00 Facilitated (YRLY Total) $ 98,967.00 Total Investment $544,460.00 Program Hours TA Program HRS 1st QTR 359 237 Total 359 237 TA: Client Meetings, Providing Resources, Client Calls, Client Deliverables, Loan Packaging Program HRS: City Initiatives, Program Outreach, Public Events, City Meetings, Research, Data/Admin, General Inquiries Page 7 of 136 Open to Business Report 2 “Launching my business has been life-changing. It allowed me to share my passion for wellness and natural skin care with others while creating a path toward financial independence. Furthermore, my son gets to see what it looks like to build something meaningful from the ground up and having a purpose to help others as a humanitarian. I am deeply grateful for this opportunity, and excited for what’s ahead. The microgrant gave me hope and confidence to believe that my business will grow and have a future.” – MicroGrant Recipient, Burnsville Business Owner Industry Segment YTD Construction / Real Estate 2 Food 12 Health/Fitness 4 Manufacturing 1 Consulting 6 Retail 19 Service 14 Other 9 Total 67 Referral Source YTD Bank Referral 9 Entrepreneur 1 Friends and Family 10 Municipality 10 MCCD Partner/staff 10 Other 12 Web 15 Total 67 City YTD Business Resident Apple Valley 6 4 Burnsville 9 8 Eagan 6 3 Farmington 8 9 Hastings 3 1 Inver Grove Heights 6 8 Lakeville 7 11 Mendota Heights 1 1 Rosemount 5 1 South St. Paul 4 4 West St. Paul 4 2 Other Dakota Co. 0 1 Other/ No Data 5 11 Page 8 of 136 Open to Business Report 3 “We really appreciated working with Natalie at MCCD. Unlike many corporate financial institutions, Natalie was thorough, wanted to make sure that our business would be successful, and that we did not get over our heads. Although this process may have taken a little longer than going through a traditional bank, we feel that Natalie really had our best interest at heart and helped us to be set up for success. Thank you, Natalie!” – MCCD Loan Client, Burnsville Resident Direct Financing & Access to Capital Business Type: Bubble Tea & Café Business City: Eagan Residence City: Savage & Farmington Referred by: Website MCCD Financing: $175,000* Owner Equity: $65,443 Overview: This startup bubble tea shop was seeking funds for start up expenses, tenant impro vements, equipment, inventory, and working capital. The two business partners put their head s together on opening this business and were approved for a $175,000 direct loan from MCCD in January 2025, contingent on an 80% loan guaranty from MN DEED through the DEED Small Business Credit Initiative. *As the DEED guaranty application was in progress the business owners received news of some unexpected project costs from their contractor and decided to withdraw their applicatio n and tabled the business plan for now. Business Type: Natural Beauty & Wellness Products Business City: Burnsville Residence City: Burnsville Referred by: TikTok Influencer Microgrant Facilitated: $2,500 Owner Equity: $2,500 Overview: This early-stage home-based business was established in 2023 and sells handmade beauty and wellness products to friends and family. After a referral from a TikTok influencer who provides entrepreneurship advice, the Burnsville resident reached out to MCC D seeking funding to expand her business and launch her website. The bus iness owner is a low-income single mother and qualified for a microgrant which MCCD facilitated, and the client received in January. T he funding allowed the business owner to increas e operational efficiency, buy inventory and supplies, and launch a new product line. The entrepreneur is currently working on rebuilding her credit so that she can apply for an MCCD loan for the remaining funding to build and launch her website. Business Type: Food Truck and Cookie Dough Wholesaler Business City: Eagan (Home Based & mobile throughout Twin Cities region ) Residence City: Eagan Referred by: LEDC MCCD Financing: $50,000 Page 9 of 136 Open to Business Report 4 Owner Equity: $7,000 Other Financing: $50,000 Overview: MCCD collaborated with nonprofit partner on this $107,000 project to support a growing BIPOC and woman owned cookie dough business. The business was established in 2021 as a response to the lack of organic cookie dough available in the market. Their dough offers all organic, non -GMO, fair trade ingredients with no preservatives and comes in three flavors. There are two branches to their business: the business -to- business, where they sell wholesale through a distributor to co -ops and grocery stores and a direct to customer retail - selling both the dough and fresh-baked cookies at farmers markets and festivals. They had been selling via a pop-up tent and recently came across the opportunity to purchase a food trailer to streamline their operations. The borrowers needed funding food trailer improvements, equipment, inventory, and working capital to help them take advantage of the upcoming selling season. Business Type: Fashion Optical Boutique Business City: Savage Residence City: Burnsville Referred by: Municipality MCCD Financing: $82,173.70 Owner Equity: $30,636 Other Financing/ funding: $35,217.30* & $11,250 *Pending approval from MN DEED Overview: This entrepreneur is a licensed optician operating in the optical industry for more than 20 years. He has always dreamed of opening his own optical store near his home in Burnsville to start to build wealth for himself. He found an ideal storefront in Savage and reached out to MCCD for assistance with the project funding for inventory, equipment, startup expenses, and ~ 3 months of working capital for operations. Total project costs are $159,227 including the equity investment of $30,636 and a $11,250 tenant improvement budget from the landlord. The loan request was approved by MCCD’s loan committee on April 24th contingent on 30% participation f rom MN DEED through the Small Business Credit Initiative, application is currently pending, and approval is expected in early May. Business Type: RV Tank Cleaning Business City: Rosemount Residence City: Rosemount Referred by: Community Partner MCCD Financing: $30,000 Owner Equity: $2,500 Overview: This husband-and-wife team have a combined professional background in customer service, custodial cleaning, and mechanicals. They also love camping and the outdoors and have been avid RV'ers for years. As they grow older and become empty nesters, they saw an opportunity to make a side business out of their passion and have something that they could continue into retirement. Through their time spent at campgrounds in the Midwest they became aware of the opportunity to become a licensed dealer for an RV Tank cleaning franchise. The business owners see this as a promising opportunity to generate additional income now and into retirement while doing something that they truly love. Page 10 of 136 Open to Business Report 5 Credit Builder Loans In collaboration with nonprofit partners who provide credit building & financial awareness counseling, MCCD provides $240 Credit Builder Loans (CBLs) to qualified applicants seeking to improve their personal credit. Credit Builder applicants complete fina ncial training through MCCD’s partners and are then referred to MCCD for a CBL. MCCD generates and services the CBLs in-house. Credit Builder Loans YTD Resident City Loan Amount West Saint Paul $240 TOTAL $240 Highlights, Networking, & Outreach Staffing Updates • February – MCCD welcomes NaSee Lor, our new Anoka County Business Advisor & Loan Officer. NaSee has a strong background in small business ownership and graduated from the University of St. Thomas with a BA in Entrepreneurship. NaSee has completed her onboarding and is actively taking new clients and loan requests. Programming, Partnerships, & Trainings • February – MCCD rolled out a new event series in Q1! Join one of our hybrid lending information sessions every other Tuesday at noon via zoom and in person at the MCCD office. The sessions are designed to give potential loan applicants a solid understanding of our loan application process. Attendance has been strong at these sessions, and we are connecting with new prospective borrowers and reconnecting with former clients. • March – MCCD hosted a hybrid training session on Business Succession and Transitio n Planning. Attendees heard from Michael Darger, an Extension Specialist in Community Economics at the University of Minnesota and received an introduction to his online course designed to walk you through the process including why succession planning matters , transition options, and key resources for exit planning. • April – In partnership with UMN Law School MCCD hosted a virtual Q&A session on small business law. We host this free virtual event twice annually and it is designed for business owners at any stage. Law student panelists work with their supervising attorney to answer questions and provide legal resources and guidance to help navigate law questions and concerns. 25 attendees joined and the event was a huge success. Advertising & Outreach • April – MCCD launched its Lending E blast, a semiannual update on our loan program, loan products, and lending team. The e blast went out to all lenders and financing partners in our network. • April – Check out our recently refreshed loan products brochure which outlines our lending options and capabilities. Page 11 of 136 Open to Business Report 6 • Are you subscribed to our Business Resource Newsletter? We send monthly emails with a summary of business resources, funding opportunities, and training initiatives offered by MCCD and our partners. Subscribe to get connected. • In the last quarter, banker and lender outreach occurred specifically with Choice Bank, Lakeview Bank, Minnwest Bank, Prime Security Bank, Royal Credit Union, Stearns Bank, and US Bank. • In addition to lending outreach, written or in -person presentations were made and/or networking efforts were made including the El Rincon Grand Opening on January 27, the City of Lakeville presentation on January 28, the Farmington Business Summit on February 4, Burnsville EDC presentation on March 12, Dakota County Library on March 14, Farmington EDA presentation on April 21, and ongoing partnership discussions / referrals from Lakeville Chamber of Commerce, the UMN Law School, as well as regular check ins with City of Farmington and Dakota County CDA . Quarterly Highlight Grand Opening o f El Rincon Mexicano at their new location 6500 Cahill Ave, Inver Grove Heights, MN 55076 https://rinconmx -restaurant.square.site/s/order#9 MCCD approved financing for this business expansion in Inver Grove Heights in July 2023. This full -service, family-owned Mexican restaurant has been a community staple in IGH since 2015 with a solid local following. The business embarked on an expansion to a larger location in 2021 but due to unforeseen costs and logistics, the project had been stalled for quite a while. The owners were stuck paying rent at both locations with a partially completed renovation. The business connected with MCCD in summer of 2022 at a community event and MCCD worked tirelessly to find a path forward for this family business. MCCD brought in a non-profit partner and together the organizations collaborated on the final funding package. In Spring 2025, the new location finally opened it’s doors with a large grand opening celebration. El Rincon’s story was recently highlighted by the Dakota County CDA on their website: https://www.dakotacda.org/el- rincon-mexicano-cda-economic-development-story/ Tyler Hilsabeck (MCCD), Natalie Mouilso (MCCD) Lisa Alfson (CDA), Luis Mendoza (MCCD), business owner Mireya Sanchez and her husband , Commissioner Atkins (Dakota County) Page 12 of 136 ECONOMIC DEVELOPMENT AUTHORITY AGENDA MEMO To: Economic Development Authority From: Deanna Kuennen, Community & Economic Development Director Department: EDA Subject: Presentation of the 2024 Dakota County Housing Needs Assessment Meeting: Economic Development Authority - May 19 2025 INTRODUCTION: The Dakota County Community Development Agency (CDA) retained Bowen National Research to prepare a Housing Needs Assessment of Dakota County and its municipalities. The full study was presented to the CDA Board of Commissioners in March and now the CDA is making Bowen representatives County Dakota the to findings the information present to available and communities. DISCUSSION: The Dakota County Community Development Agency retained Bowen National Research in March of 2024 for the purpose of conducting a Housing Needs Assessment of Dakota County, Minnesota, and its municipalities. The purpose of the study was to understand the current market conditions and projected changes that are anticipated to occur that will influence future housing needs. Patrick Bowen, President of Bowen National Research, will present (virtually) the findings of the Housing Needs Assessment at the EDA meeting. Included in the presentation will be specific information about Farmington (see attachment - "Addendum G - Farmington), such as the following key findings. Page 13 of 136 After the presentation, EDA members are encouraged to ask questions and engage in a dialogue to better understand the lenses used to prepare the study, and how best to utilize the information. CDA leadership will also be in attendance for the conversation. BUDGET IMPACT: None ACTION REQUESTED: No action requested. This presentation is for informational purposes only. ATTACHMENTS: Dakota County, MN Housing Needs Assessment Final, Addendum G 8. Dakota Co Presentation-FARMINGTON (5-19-25) rev Page 14 of 136 BOWEN NATIONAL RESEARCH Addendum G-1 ADDENDUM G: CITY OF FARMINGTON OVERVIEW While the primary focus of this Housing Needs Assessment is on the entirety of the Primary Study Area, or PSA (Dakota County), this section of the report includes an overview of demographic, economic, and housing metrics specific to the city of Farmington. To provide a base of comparison, various metrics of Farmington were compared with the entirety of Dakota County and statewide numbers. The analyses on the following pages provide overviews of key demographic and economic data, summaries of the multifamily rental market and for-sale housing supply, and general conclusions on the housing needs of the area. It is important to note that the demographic projections included in this section assume no significant government policies, programs or incentives are enacted that would drastically alter residential development or economic activity. Note that some topics presented in this analysis, particularly migration and economic data, may be limited to county-based metrics due to the availability of data. A. INTRODUCTION Farmington is located in the central portion of Dakota County, approximately 30 miles south of Minneapolis. Farmington contains approximately 15 square miles and has an estimated population of 24,315 in 2024. State Route 3 is the primary thoroughfare within the city providing north/south access in the eastern portion of Farmington and convenient access to nearby metropolitan centers such as St. Paul, which is north of Farmington. The following map illustrates the city of Farmington. Page 15 of 136 BOWEN NATIONAL RESEARCH Addendum G-2 B. DEMOGRAPHIC ANALYSIS This section of the report evaluates key demographic characteristics for Farmington. Demographic comparisons provide insights into the human composition of housing markets. It should be noted that some total numbers and percentages may not match the totals within or between tables/graphs in this section due to rounding. The following graphs illustrate total population by year for Farmington and the projected population changes between 2024 and 2029 for each of the study areas. Source: 2010, 2020 Census; ESRI; Bowen National Research Source: 2010, 2020 Census; ESRI; Bowen National Research The population in Farmington increased by 2,484 (11.7%) between 2010 and 2020. This represents a larger percent increase as compared to the county (10.4%) and state (7.6%) during this time period. Between 2020 and 2024, the population in Farmington increased by 2.9%. This growth is projected to continue through 2029 as the Farmington population is projected to increase by 3.9% between 2024 and 2029. This outpaces the 2.8% increase for the county and 2.0% increase for the state during this time period. 21,148 23,632 24,315 25,257 19,000 20,000 21,000 22,000 23,000 24,000 25,000 26,000 2010 2020 2024 2029 Total Population by Year -Farmington 11.7% 2.9%3.9% 10.4% 3.2%2.8% 7.6% 2.1%2.0% 0.0% 5.0% 10.0% 15.0% 2010-2020 2020-2024 2024-2029 Population Percent Change (2010-2029) Farmington Dakota County Minnesota Page 16 of 136 BOWEN NATIONAL RESEARCH Addendum G-3 The following graph illustrates the population density for each study area in 2024. Source: 2010, 2020 Census; ESRI; Bowen National Research With a population density of 1,567.4 persons per square mile, Farmington is significantly more densely populated than Dakota County and the state of Minnesota. The following graph illustrates select population characteristics that typically influence housing affordability for each of the study areas. Note that data included within the graph is derived from the 2018-2022 American Community Survey, which is the most recent time period available for this source. Source: U.S. Census Bureau; 2020 Census; 2018-2022 American Community Survey; ESRI; Bowen National Research As the data illustrates, Farmington has a relatively comparable share of unmarried population (44.2%), population without a high school diploma (6.1%), and individuals with a college degree (51.8%) as compared to the county and state. The two educational attainment factors likely have a similar influence on income potential and housing affordability in the city when compared to the state. Overall, Farmington has lower poverty rates for children less than 18 years of age (3.7%) and the overall population (3.3%) when compared to the county and state. 1,567.4 806.9 73.2 0.0 500.0 1,000.0 1,500.0 2,000.0 2024 Density Pe r s o n s p e r S q u a r e M i l e 2024 Population Density by Area Farmington Dakota County Minnesota 44 . 2 % 6. 1 % 51 . 8 % 3. 7 % 3. 3 % 44 . 3 % 4. 4 % 55 . 9 % 7. 0 % 5. 6 % 48 . 0 % 6. 3 % 49 . 9 % 10 . 9 % 9. 3 % 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Unmarried Population No High School Diploma College Degree < 18 Years Below Poverty Level Overall Below Poverty Level Select Population Characteristics by Area (2022) Farmington Dakota County Minnesota Page 17 of 136 BOWEN NATIONAL RESEARCH Addendum G-4 The following graphs illustrate the number of total households in Farmington by year and the projected percent changes in households between 2024 and 2029 for each of the study areas. Source: 2010, 2020 Census; ESRI; Bowen National Research Source: 2010, 2020 Census; ESRI; Bowen National Research The number of households in Farmington increased by 797 (11.2%) between 2010 and 2020. This represents a larger percent increase as compared to the county (10.5%) and state (8.0%) during this time period. Between 2020 and 2024, the number of households in Farmington increased by 2.8%. Household growth is projected to continue over the next five years, increasing by 4.8% between 2024 and 2029. While household growth can heavily influence the total housing needs of a market, factors such as households living in substandard or cost-burdened housing, people commuting into the area for work, pent-up demand, and availability of existing housing all affect housing needs. These factors are addressed throughout this overview. 7,109 7,906 8,125 8,512 6,000 6,500 7,000 7,500 8,000 8,500 9,000 2010 2020 2024 2029 Total Households by Year -Farmington 11.2% 2.8% 4.8% 10.5% 3.5%3.3% 8.0% 2.5%2.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2010-2020 2020-2024 2024-2029 Households Percent Change (2010-2029) Farmington Dakota County Minnesota Page 18 of 136 BOWEN NATIONAL RESEARCH Addendum G-5 The following graphs compare the share of household heads by age for each of the study areas in 2024 and the projected percent change in household heads by age cohort between 2024 and 2029. Source: ESRI; Bowen National Research Source: ESRI; Bowen National Research Overall, the data shows that Farmington and Dakota County households in 2024 are more heavily concentrated among the middle-aged cohort (35 to 54 years) when compared to the state. While household growth in Farmington is projected to be greatest among seniors aged 65 to 74 (26.4%) and those aged 75 and older (16.2%), households between the ages of 25 and 34 (15.4%) and 55 to 64 (7.7%) are also expected to increase over the next five years. 15.3% 49.3% 35.4% 16.3% 38.7% 45.0% 19.0% 34.9% 46.1% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% <35 35 to 54 55+ Distribution of Household Heads by Age (2024) Farmington Dakota County Minnesota -5. 0 % 15 . 4 % -7. 3 % -2. 9 % 7. 7 % 26 . 4 % 16 . 2 % -1. 5 % 0. 0 % -1. 5 % 6. 1 % -8. 8 % 9. 3 % 25 . 0 % -3. 6 % -1. 0 % 0. 0 % 5. 6 % -9. 1 % 6. 5 % 20 . 9 % -25.0% -15.0% -5.0% 5.0% 15.0% 25.0% 35.0% 45.0% <25 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75+ Pe r c e n t C h a n g e Age Cohort Projected Percent Change in Household Heads by Age (2024-2029) Farmington Dakota County Minnesota Page 19 of 136 BOWEN NATIONAL RESEARCH Addendum G-6 The following graphs compare the share of households by tenure (renters and owners) for 2024 and the projected percent change in households by tenure between 2024 and 2029 for each of the study areas. Source: 2010 Census; ESRI; Bowen National Research Source: 2010 Census; ESRI; Bowen National Research In 2024, the distribution of households by tenure in Farmington (86.0% owners and 14.0% renters) is much more heavily weighted toward owner households as compared to the county and state. Over the next five years, it is projected that the number of owner households in Farmington will increase by 5.6%, while the number of renter households will decline slightly. While growth among renter households within the county and state contrasts the projected decline for the city of Farmington, owner household growth within the city will outpace that projected for both the county and state between 2024 and 2029. However, it is important to understand that housing demand is influenced by a variety of factors, which may include existing pent-up demand, substandard housing, housing cost burden, and/or other factors. 86.0% 73.0% 69.8% 14.0% 27.0% 30.2% 0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%100.0% Farmington Dakota County Minnesota Households by Tenure (2024) Owner-Occupied Renter-Occupied 5.6% -0.2% 3.9% 1.8% 3.3% 1.2% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Owner-Occupied Renter-Occupied Projected Percent Change in Households by Tenure (2024-2029) Farmington Dakota County Minnesota Page 20 of 136 BOWEN NATIONAL RESEARCH Addendum G-7 The following compares the median household income for each of the study areas from 2020 to 2029. Source: 2020 Census; ESRI; Bowen National Research As the preceding illustrates, the 2024 median household income in Farmington ($111,136) is 8.6% higher than the countywide median household income and 28.0% higher than the statewide median household income. Over the next five years, it is projected that the median household income in Farmington will increase to $123,955, or an increase of 11.5%. As such, the median household income in Farmington will remain well above that of the county ($113,606) and the state ($100,422). The following graphs compare renter households by income for 2024 and the projected percent change in renter households by income between 2024 and 2029 for each of the study areas. Source: 2020 Census; ESRI; Bowen National Research $1 1 4 , 3 6 6 $1 1 1 , 1 3 6 $1 2 3 , 9 5 5 $8 8 , 9 0 4 $1 0 2 , 3 1 0 $1 1 3 , 6 0 6 $7 4 , 0 9 3 $8 6 , 8 0 1 $1 0 0 , 4 2 2 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 2020 2024 2029 Median Household Income by Year Farmington Dakota County Minnesota 16.8% 19.2% 26.3% 30.8% 22.9% 23.6% 18.4% 34.6% 30.3% 34.1% 23.3% 19.8% 0%20%40%60%80%100% Farmington Dakota County Minnesota 2024 Distribution of Renter Households by Income Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher Page 21 of 136 BOWEN NATIONAL RESEARCH Addendum G-8 Source: 2020 Census; ESRI; Bowen National Research In 2024, Farmington has larger shares of renter households with incomes between $25,000 and $49,999 and those earning $100,000 or higher when compared to Dakota County and the state of Minnesota. Between 2024 and 2029, renter household growth in Farmington is projected to be among households earning $100,000 or higher (23.3%), while those earning less than $100,000 are projected to decline in number. Despite these changes, a substantial share of renter households in Farmington will continue to earn less than $100,000. The following graphs compare owner households by income for 2024 and the projected percent change in owner households by income between 2024 and 2029 for each of the study areas. Source: 2020 Census; ESRI; Bowen National Research -22.1% -12.0% -2.9% 23.3% -10.0%-11.4% -0.1% 26.9% -8.8%-10.0% 0.8% 28.2% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher Percent Change in Renter Households by Income (2024-2029) Farmington Dakota County Minnesota 3. 1 % 4. 0 % 6. 4 % 7.8% 8.8% 11.2% 26.3% 25.2% 28.3% 62.8% 61.9% 54.1% 0%10%20%30%40%50%60%70%80%90%100% Farmington Dakota County Minnesota 2024 Distribution of Owner Households by Income Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher Page 22 of 136 BOWEN NATIONAL RESEARCH Addendum G-9 Source: 2020 Census; ESRI; Bowen National Research In 2024, the majority (62.8%) of Farmington owner households earn $100,000 or more, which is a higher share compared to the county (61.9%) and state (54.1%). Between 2024 and 2029, owner household growth is projected to be confined to households earning $100,000 or higher (17.5%), while those earning less than $100,000 are projected to decrease. This is generally consistent with county and statewide projections for this time period. The following graphs compare senior renter households (age 62 and older) by income for 2024 and the projected percent change in senior renter households by income between 2024 and 2029 for each of the study areas. Source: 2020 Census; ESRI; Bowen National Research -19.9% -23.8% -11.3% 17.5% -22.4%-21.3% -9.3% 14.5% -21.1%-18.7% -7.3% 16.2% -35.0% -25.0% -15.0% -5.0% 5.0% 15.0% 25.0% Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher Percent Change in Owner Households by Income (2024-2029) Farmington Dakota County Minnesota 22.8% 23.6% 30.8% 34.4% 24.0% 23.9% 17.4% 32.6% 27.6% 25.4% 19.7% 17.6% 0%10%20%30%40%50%60%70%80%90%100% Farmington Dakota County Minnesota 2024 Distribution of Senior Renter Households (Age 62+) by Income Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher Page 23 of 136 BOWEN NATIONAL RESEARCH Addendum G-10 Source: 2020 Census; ESRI; Bowen National Research In 2024, the largest share of senior renter households (age 62 and older) in Farmington earn between $25,000 and $49,999 (34.4%), followed by those earning $100,000 or more (25.4%). Over the next five years, senior renter growth is projected to occur among all income segments evaluated, though the greatest growth (52.6%) is projected for the income segment earning $100,000 and higher. The following graphs compare senior owner households (age 62 and older) by income for 2024 and the projected percent change in senior owner households by income between 2024 and 2029 for each of the study areas. Source: 2020 Census; ESRI; Bowen National Research 3.9% 14.3% 25.6% 52.6% 1.8%0.2% 13.4% 46.5% -0.8%-2.3% 9.7% 40.2% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher Percent Change in Senior Renter Households (Age 62+) by Income (2024-2029) Farmington Dakota County Minnesota 3. 4 % 4. 5 % 6. 9 % 8.5% 9.3% 11.6% 27.3% 26.1% 28.5% 60.8% 60.0% 52.9% 0%10%20%30%40%50%60%70%80%90%100% Farmington Dakota County Minnesota 2024 Distribution of Senior Owner Households (Age 62+) by Income Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher Page 24 of 136 BOWEN NATIONAL RESEARCH Addendum G-11 Source: 2020 Census; ESRI; Bowen National Research In 2024, the largest share of senior owner households (age 62 and older) in Farmington earn $100,000 or more (60.8%), followed by those earning between $50,000 and $99,999 (27.3%). Over the next five years, projected growth among senior owner households in Farmington is projected to be primarily among households earning $100,000 or more, which are projected to increase by 33.5% during this time period. The projected growth among the higher income cohorts and decline among the lower income cohorts in Farmington is broadly consistent with county and statewide projections between 2024 and 2029. The following table illustrates the components of population change for Dakota County between April 2010 and July 2023. Note that components of change data is only available at the county level or higher. Estimated Components of Population Change by County for the PSA (Dakota County) April 1, 2010 to July 1, 2023 Years Population Change* Percent Change Natural Change Net Domestic Migration Net International Migration Total Net Migration Dakota County 2010-2020 33,225 8.3% 27,991 -1,115 6,511 5,396 2020-2023 7,562 1.7% 5,686 -928 2,430 1,502 Source: U.S. Census Bureau, Population Division, June 2024 *Includes residuals of (-162 and 374) representing the change that cannot be attributed to any specific demographic component Based on the preceding data, the population growth within Dakota County between 2010 and 2023 is primarily the result of natural change (more births than deaths) and noteworthy international migration. While this data is not specific to Farmington, it is reasonable to conclude that the components of population change for Dakota County likely have a significant influence on each of the geographies located within the county. -9.8%-13.6% 0.5% 33.5% -16.1%-15.7% -2.2% 23.9% -16.4%-14.0% -1.8% 23.3% -25.0% -15.0% -5.0% 5.0% 15.0% 25.0% 35.0% 45.0% Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher Percent Change in Senior Owner Households (Age 62+) by Income (2024-2029) Farmington Dakota County Minnesota Page 25 of 136 BOWEN NATIONAL RESEARCH Addendum G-12 The following graphs illustrate the distribution of in-migrants by age and by income for each study area from 2018 to 2022. Note that the data illustrated in both graphs is based on population, not households. Source: U.S. Census Bureau, 2022 5-Year ACS Estimates (S0701); Bowen National Research Source: U.S. Census Bureau, 2022 5-Year American Community Survey (B07010); Bowen National Research *Excludes population with no income As the preceding data illustrates, the distribution of in-migrants by age for Farmington is more heavily weighted toward the younger age cohort (less than 35 years) as compared to the county and state. While the distribution of in-migrants by income in Farmington is more heavily weighted toward individuals earning $50,000 or more, the data illustrates that around 20% of in-migrants earn $25,000 to $49,999 and nearly 20% earn less than $25,000 annually. 82.7% 6.3%11.0% 66.2% 20.3%13.5% 67.0% 19.2%13.8% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 1 to 34 Years 35 to 54 Years 55+ Years Share of In-Migrants by Age (2018-2022) Farmington Dakota County Minnesota 19.5%20.7% 59.8% 29.8%28.0% 42.2%41.1% 25.3% 33.6% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% <$25,000 $25,000-$49,999 $50,000+ In-Migrants by Income (2018-2022)* Farmington Dakota County Minnesota Page 26 of 136 BOWEN NATIONAL RESEARCH Addendum G-13 C. ECONOMY AND WORKFORCE ANALYSIS Labor Force The following table illustrates the employment base by industry for Farmington, Dakota County, and the state of Minnesota. The top five industries by share of employment for each area are highlighted in red text. Note that several metrics within this section are limited to county data and are not provided at the city level. Employment by Industry NAICS Group Farmington Dakota County Minnesota Employees Percent Employees Percent Employees Percent Agriculture, Forestry, Fishing & Hunting 0 0.0% 387 0.2% 17,215 0.5% Mining 0 0.0% 73 0.0% 4,549 0.1% Utilities 104 2.0% 568 0.3% 12,777 0.4% Construction 197 3.7% 10,298 5.0% 137,789 4.2% Manufacturing 494 9.3% 22,907 11.1% 342,911 10.3% Wholesale Trade 80 1.5% 8,221 4.0% 134,193 4.0% Retail Trade 303 5.7% 27,952 13.6% 385,870 11.6% Transportation & Warehousing 289 5.4% 8,741 4.2% 83,429 2.5% Information 31 0.6% 9,796 4.8% 88,304 2.7% Finance & Insurance 73 1.4% 9,626 4.7% 146,490 4.4% Real Estate & Rental & Leasing 22 0.4% 4,877 2.4% 68,105 2.1% Professional, Scientific & Technical Services 118 2.2% 14,887 7.2% 245,551 7.4% Management of Companies & Enterprises 2 0.0% 87 0.0% 6,945 0.2% Administrative, Support, Waste Management & Remediation Services 63 1.2% 5,954 2.9% 74,747 2.3% Educational Services 1,886 35.5% 16,900 8.2% 259,542 7.8% Health Care & Social Assistance 552 10.4% 20,621 10.0% 574,150 17.3% Arts, Entertainment & Recreation 45 0.8% 3,924 1.9% 89,508 2.7% Accommodation & Food Services 520 9.8% 16,542 8.0% 240,661 7.2% Other Services (Except Public Administration) 340 6.4% 12,232 5.9% 204,837 6.2% Public Administration 182 3.4% 10,454 5.1% 184,476 5.6% Non-classifiable 7 0.1% 852 0.4% 17,626 0.5% Total 5,308 100.0% 205,899 100.0% 3,319,675 100.0% Source: 2010 Census; ESRI; Bowen National Research Note: Since this survey is conducted of establishments and not of residents, some employees may not live within each market. These employees, however, are included in our labor force calculations because their places of employment are located within each market. Farmington has an employment base of more than 5,300 individuals within a broad range of employment sectors. The labor force within the area is based primarily in four sectors: Educational Services (35.5%), Health Care & Social Assistance (10.4%), Accommodation & Food Services (9.8%), and Manufacturing (9.3%). Combined, these four job sectors represent 65.0% of the city’s employment base. Page 27 of 136 BOWEN NATIONAL RESEARCH Addendum G-14 Total employment reflects the number of employed persons who live within an area regardless of where they work. The following illustrates the total employment base (in thousands) for Dakota County between 2014 and 2024. Source: Department of Labor; Bureau of Labor Statistics *Through July As the preceding illustrates, total employment within Dakota County steadily increased between 2014 and 2019. In 2020, total employment decreased by roughly 3.1%, which can be largely attributed to the economic impact of the COVID-19 pandemic. As of year-end 2023, total employment in Dakota County was at 100.1% of the 2019 level. It should be noted, however, that total employment decreased slightly (0.8%) during the first half of 2024. The following illustrates the annual unemployment rate for Dakota County and the state of Minnesota from 2014 to 2024. Source: Department of Labor, Bureau of Labor Statistics *Through July 223.0 225.0 227.0 231.8 234.3 237.2 229.8 229.9 235.8 237.4 235.6 215.0 220.0 225.0 230.0 235.0 240.0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024* To t a l E m p l o y m e n t (i n t h o u s a n d s ) Year Total Employment -Dakota County (2014-2024) 3. 9 % 3. 4 % 3. 4 % 3. 1 % 2. 6 % 2. 9 % 6. 3 % 3. 5 % 2. 3 % 2. 6 % 3. 0 % 4. 3 % 3. 8 % 3. 9 % 3. 5 % 3. 0 % 3. 3 % 6. 3 % 3. 7 % 2. 6 % 2. 8 % 3. 3 % 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024* Un e m p l o y m e n t R a t e Year Annual Unemployment Rate (2014-2024) Dakota County Minnesota Page 28 of 136 BOWEN NATIONAL RESEARCH Addendum G-15 As the preceding data shows, the unemployment rate in Dakota County declined from 3.9% in 2014 to 2.9% in 2019. After the sharp increase in 2020, the unemployment rate in the county dropped to 2.3% in 2022. Although the unemployment rate increased to 2.6% in 2023, this still represents a lower rate as compared to the rate in 2019. It is also noteworthy that the unemployment rate in the county has been below the state unemployment rate in nine of the previous 10 years. The lone exception occurred during 2020, when both the county and state rates were 6.3%. At-place employment reflects the total number of jobs within the county regardless of the employee's county of residence. The following illustrates the total at-place employment base for Dakota County from 2013 to 2023. Source: Department of Labor; Bureau of Labor Statistics As the preceding illustrates, at-place employment within Dakota County increased each year since 2013, with the only exception occurring in 2020. Through 2023, at- place employment within the county is at 98.3% of the 2019 level. This likely indicates the county was disproportionately affected by the pandemic. Regardless, at-place employment increased by 5.8% (approximately 10,300 jobs) in Dakota County between 2013 and 2023, illustrating an overall positive economic trend for the county in the last decade. Economic Outlook WARN notices were reviewed in September 2024. According to the Minneapolis Employment and Economic Development website, there have been six WARN notices reported for Dakota County over the past 12 months. These WARN notices impact a total of 70 jobs within the county, of which none are located within Farmington. Overall, the reduction in jobs associated with these notices is relatively minor given the existing employment base and recent increases in at-place employment within the county. 177.7 180.3 183.9 187.0 188.3 189.6 191.2 177.8 181.2 185.6 188.0 170.0 175.0 180.0 185.0 190.0 195.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 At -Pl a c e E m p l o y m e n t (i n t h o u s a n d s ) Year At -Place Employment -Dakota County (2013-2023) Page 29 of 136 BOWEN NATIONAL RESEARCH Addendum G-16 According to a representative with the Dakota County Community Development Agency, the Dakota County economy is steady, has opportunity for growth, and is capable of redeveloping large corporate campuses. The following table summarizes recent and/or ongoing economic development projects identified within Farmington: Economic Development Activity - Farmington Project Name Investment Job Creation Scope of Work/Details Data Center N/A N/A Planned: In December 2024, Farmington City Council approved a contract for a new 2.5 million square-foot data center; If built, the center could potentially generate billions in investments. N/A – Not available In addition to the project identified in the preceding table, it should be noted that over $800 million in economic development projects has either been recently completed or is currently under construction in Dakota County. Overall, these projects have an estimated initial job creation of at least 250 new jobs within county; however, it should be noted that a number of the projects did not disclose job creation estimates. Regardless, economic and infrastructure investments within the county will likely have a positive influence on the local economy. Commuting Data The ability of a person or household to travel easily, quickly, safely, and affordably throughout a market influences the desirability of a housing market. In addition, the individuals commuting into a market from neighboring markets represent a potential base of support for future residential development. The following table summarizes two commuting pattern attributes (mode and time) for Farmington. Commuting Attributes - Farmington, Minnesota Mode Drove Alone Carpooled Public Transit Walked Other Means Worked at Home Total Number 10,162 596 66 107 114 1,774 12,819 Percent 79.3% 4.6% 0.5% 0.8% 0.9% 13.8% 100.0% Time Less Than 15 Minutes 15 to 29 Minutes 30 to 44 Minutes 45 to 59 Minutes 60 or More Minutes Worked at Home Total Number 2,607 3,667 3,010 1,135 626 1,774 12,819 Percent 20.3% 28.6% 23.5% 8.9% 4.9% 13.8% 100.0% Source: ESRI; Bowen National Research A total of 83.9% of individuals in Farmington utilize their own vehicles or carpool to work. Overall, 48.9% of residents have commute times of less than 30 minutes to their place of employment, with an additional 13.8% working from home. As the majority of individuals in the area utilize personal vehicles and have relatively short commute times, just 0.5% of residents rely on public transit as their commuting mode. Page 30 of 136 BOWEN NATIONAL RESEARCH Addendum G-17 The following illustrates the overall commuter flow for Farmington based on 2021 U.S. Census Longitudinal Origin-Destination Employment Statistics (LODES) data. Farmington, MN – Inflow/Outflow Job Counts in 2021 Source: U.S. Census, Longitudinal Origin-Destination Employment Statistics (LODES); Bowen National Research Of the approximately 4,949 persons employed in Farmington, 75.6% (3,741) originate from outside the city, while 24.4% (1,208) live within the city. Over 11,000 residents of the city commute to surrounding areas daily for employment. Regardless, the 3,741 non-residents who work in the area represent a substantial base of potential support for future residential development within Farmington. The following compares the distribution of in-commuters by annual income for Farmington and Dakota County. Source: U.S. Census, Longitudinal Origin-Destination Employment Statistics (LODES); Bowen National Research 16.9%23.5% 59.6% 16.7%22.6% 60.7% 0.0% 20.0% 40.0% 60.0% 80.0% <$15,000 $15,000-$40,000 $40,000+ In-Commuters by Income (2021) Farmington Dakota County Page 31 of 136 BOWEN NATIONAL RESEARCH Addendum G-18 The preceding shows that the largest share (59.6%) of in-commuters to Farmington earn $40,000 or more annually, while 23.5% earn between $15,000 and $40,000, and 16.9% earn less than $15,000 annually. While the majority of in-commuters earn $40,000 or more, the data indicates there is a slightly higher proportion of low- and middle-income in-commuters within Farmington when compared to the county. Regardless, a variety of housing types could be developed to potentially attract some of the 3,741 in-commuters to live within Farmington. D. HOUSING METRICS The estimated distribution of the area housing stock by occupancy/tenure status for each study area for 2022 is illustrated in the following table and graph: Number of Housing Units by Tenure (2022) Area Total Occupied Owner Occupied Renter Occupied Vacant Total Farmington 8,146 7,044 1,102 218 8,364 Dakota County 169,404 128,582 40,822 4,760 174,164 Minnesota 2,256,126 1,631,701 624,425 237,830 2,493,956 Share of Housing Units by Tenure (2022) Source: American Community Survey (2018-2022); ESRI; Bowen National Research Of the 8,146 total occupied housing units in Farmington, 86.5% are owner occupied and 13.5% are renter occupied. This distribution of occupied units by tenure is more heavily weighted toward owner households as compared to the county and state. Among the 8,364 total housing units in Farmington, only 2.6% (218 units) are classified as vacant. This is a similar share of vacant units as compared to the county (2.7%) but is notably lower than the statewide share of 9.5%. It should be noted that vacant units are comprised of a variety of units including abandoned properties, unoccupied rentals, for-sale homes, and seasonal housing units. 86.5% 13.5% 2.6% 75.9% 24.1% 2.7% 72.3% 27.7% 9.5% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Owner-Occupied Renter-Occupied Vacant Farmington Dakota County Minnesota Page 32 of 136 BOWEN NATIONAL RESEARCH Addendum G-19 The following table compares key housing age and conditions based on 2018-2022 American Community Survey data. Housing units built over 50 years ago (pre-1970), overcrowded housing (1.01+ persons per room), or housing that lacks complete indoor kitchens or bathroom plumbing are illustrated by tenure. It is important to note that some occupied housing units may have more than one housing issue. Housing Age and Conditions (2022) Pre-1970 Product Overcrowded Incomplete Plumbing or Kitchen Renter Owner Renter Owner Renter Owner Number Percent Number Percent Number Percent Number Percent Number Percent Number Percent Farmington 60 17.0% 122 2.4% 0 0.0% 73 1.5% 0 0.0% 0 0.0% Dakota County 7,139 17.5% 26,588 20.7% 1,859 4.6% 1,137 0.9% 975 2.4% 250 0.2% Minnesota 244,615 35.9% 707,304 38.2% 32,202 4.7% 23,665 1.3% 15,646 2.3% 10,852 0.6% Source: American Community Survey (2018-2022); ESRI; Bowen National Research In Farmington, 17.0% of the renter-occupied housing units and 2.4% of the owner- occupied housing units were built prior to 1970. Both shares are lower than the county and statewide shares and represent an inventory of relatively modern housing units. While overcrowding among renter housing units in Farmington is essentially non- existent, the share of owner housing units with this issue (1.5%) is marginally higher than the comparison areas. Incomplete plumbing and/or kitchens are also not issues for either renters or owners within Farmington. Overall, there are just 73 owner households in Farmington living in substandard housing conditions. This is likely due, at least in large part, to the relatively modern inventory of housing in the city. The following table compares key household income, housing cost, and housing affordability metrics. It should be noted that cost burdened households pay over 30% of income toward housing costs, while severe cost burdened households pay over 50% of income toward housing. Household Income, Housing Costs and Affordability 2024 Households 2024 Median HH Income 2024 Median Home Value 2022 Median Gross Rent 2022 Share of Cost Burdened HH* 2022 Share of Severe Cost Burdened HH** Renter Owner Renter Owner Farmington 8,125 $111,136 $390,820 $1,214 40.6% 16.0% 23.3% 4.2% Dakota County 173,920 $102,310 $413,686 $1,410 47.0% 17.0% 21.9% 5.7% Minnesota 2,309,848 $86,801 $360,089 $1,178 44.0% 18.2% 21.4% 6.7% Source: American Community Survey (2018-2022); ESRI; Bowen National Research HH – Households; *Paying more than 30% of income toward housing costs; **Paying more than 50% of income toward housing costs The estimated median home value in Farmington of $390,820 is 8.5% higher than the median home value for the state, while the median gross rent of $1,214 in the area is 3.1% higher than the state. With a median household income of $111,136 in Farmington, approximately 40.6% of renter households and 16.0% of owner households are housing cost burdened. As a result, there are roughly 447 renter households and 1,127 owner households in Farmington that are housing cost burdened, of which more than 550 total households are severe cost burdened (paying more than 50% of income toward housing costs). As such, affordable housing alternatives should be an integral part of future housing solutions. Page 33 of 136 BOWEN NATIONAL RESEARCH Addendum G-20 Based on the 2018-2022 American Community Survey (ACS) data, the following is a distribution of all occupied housing by units in structure by tenure (renter or owner) for each of the study areas. Renter-Occupied Housing by Units in Structure Owner-Occupied Housing by Units in Structure 4 Units or Less 5 Units or More Mobile Home/Other Total 4 Units or Less 5 Units or More Mobile Home/Other Total Farmington Number 920 182 0 1,102 6,972 71 0 7,044 Percent 83.5% 16.5% 0.0% 100.0% 99.0% 1.0% 0.0% 100.0% Dakota County Number 13,454 26,680 688 40,822 121,696 4,459 2,426 128,582 Percent 33.0% 65.4% 1.7% 100.0% 94.6% 3.5% 1.9% 100.0% Minnesota Number 239,167 374,998 10,259 624,425 1,541,044 42,914 47,744 1,631,701 Percent 38.3% 60.1% 1.6% 100.0% 94.4% 2.6% 2.9% 100.0% Source: American Community Survey (2018-2022); ESRI; Bowen National Research Approximately 83.5% of the rental units in Farmington are within structures of four units or less. Subsequently, Farmington has a considerably lower share (16.5%) of multifamily rental housing (five or more units within a structure) when compared to the county (65.4%) and state (60.1%). Among owner-occupied units in Farmington, 99.0% are within structures of four units or less. It is noteworthy that none of the housing units (renter or owner) in Farmington are mobile homes. The following graph illustrates the distribution of monthly gross rents (per unit) for rental alternatives within each of the study areas. Note that this data includes both multifamily rentals and non-conventional rentals. However, with 83.5% of all rental units in Farmington classified as non-conventional (four units or less within a structure), this data provides some insight into the overall distribution of rents among the non-conventional rental supply. Note that gross rents include tenant-paid rents and tenant-paid utilities. Source: American Community Survey (2018-2022); ESRI; Bowen National Research *Excludes rentals classified as “No Cash Rent” 15.7%16.3% 26.4% 33.4% 8.4%10.6% 36.5% 42.0% 18.8%16.2% 32.3% 28.4% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% <$750 $750- $999 $1,000- $1,499 $1,500+ Distribution of Monthly Gross Rents by Area Farmington Dakota County Minnesota Page 34 of 136 BOWEN NATIONAL RESEARCH Addendum G-21 As the preceding illustrates, the largest share (33.4%) of Farmington rental units have rents of $1,500 or more, followed by units with rents between $1,000 and $1,500 (26.4%). Collectively, units with rents below $1,000 comprise 32.0% of all rental units within the area. While this distribution is generally similar to that of the state, Farmington has a notably larger share of rental units with rents below $1,000 compared to the overall county. Bowen National Research’s Survey of Housing Supply Multifamily Rental Housing A field survey of multifamily rental properties was conducted as part of the Dakota County Housing Needs Assessment. The following table summarizes the surveyed multifamily rental supply by project type for Farmington and Dakota County. Note that vacancy rates below 1% are highlighted in red text. Surveyed Multifamily Rental Housing Supply by Area Dakota County, MN Projects Surveyed Total Units Vacant Units Overall Vacancy Rate Vacancy Rate by Program Type Market- Rate Tax Credit Government Subsidized Farmington 7 285 1 0.4% 2.8% 0.0% 0.0% Dakota County 229 27,211 1,161 4.3% 4.8% 2.3% 0.0% Source: Bowen National Research In Farmington, a total of seven apartment properties were surveyed, comprising a total of 285 units. Overall, the multifamily units are 99.6% occupied, with just one vacancy within a market-rate property. Typically, in a well-balanced and healthy market, multifamily rentals should have an overall occupancy rate between 94% and 96%. While Dakota County as a whole has a healthy overall occupancy rate of 95.7%, the occupancy rate within Farmington is considered very high. The occupancy rates among the various program types are high, and the presence of wait lists, particularly among the Tax Credit product, are evidence of pent-up demand for multifamily rentals for a variety of income levels within Farmington. This likely represents a future development opportunity within the area. Page 35 of 136 BOWEN NATIONAL RESEARCH Addendum G-22 The following table illustrates the median rent by bedroom/bathroom type for the surveyed market-rate and Tax Credit units in Farmington and Dakota County. Median Rents by Program Type and Bedroom/Bathroom Type Area One-Br/ 1.0-Ba Two-Br/ 1.0-Ba Two-Br/ 2.0-Ba Three-Br/ 2.0-Ba Market-Rate Farmington $1,150 $1,250 - - Dakota County $1,385 $1,585 $1,785 $2,177 Tax Credit Farmington $765 $937 - - Dakota County $765 $920 $1,555 $1,604 Source: Bowen National Research As the preceding illustrates, the median rent for the typical one-bedroom market-rate unit in Farmington ($1,150) is approximately 50.3% higher than the comparable Tax Credit unit ($765) in the area. While the median rents for market-rate units in Farmington are less than the corresponding rents in Dakota County, the median rents for the Tax Credit units in Farmington are equal to or higher than the Tax Credit rents in Dakota County. Regardless of program type, the median rents steadily increase for each subsequently larger unit configuration for both study areas. With limited availability among Tax Credit and government-subsidized units in both Farmington and Dakota County, many low-income households are likely to seek rental alternatives among the available market-rate and non-conventional supply. This can result in a higher share of cost burdened households in an area, or in some instances, may cause households to relocate outside of an area to find more affordable housing choices. It is also of note that the market-rate and Tax Credit units offered in Farmington are limited to one- and two-bedroom units, as indicated by the preceding table. This further demonstrates the limited multifamily rental options within Farmington. Non-Conventional Rental Housing Non-conventional rentals are considered rental units typically consisting of single- family homes, duplexes, units over store fronts, and mobile homes and account for 83.5% of the total rental units in Farmington. During August and September 2024, Bowen National Research conducted an online survey and identified 11 non-conventional rentals that were listed as available for rent in Farmington. While these rentals do not represent all non-conventional rentals, they are representative of common characteristics of the various non-conventional rental alternatives available in the market. As a result, these rentals provide a good baseline to compare the rental rates and the number of bedrooms of non-conventional rentals in the area. The following table illustrates the vacancy rates, which compares the number of identified vacant non-conventional rentals to the total number of non-conventional rentals based on the American Community Survey, for the subject city and Dakota County. Page 36 of 136 BOWEN NATIONAL RESEARCH Addendum G-23 Surveyed Non-Conventional Rentals Overview Area Non-Conventional Rentals* Identified Vacant Units Vacancy Rate Farmington 1,840 11 0.6% Dakota County 14,142 83 0.6% Source: American Community Survey (2018-2022); ESRI; Bowen National Research *ACS reported number of rental units within structures of four units or less and mobile homes With a total of 11 available units identified, Farmington has an overall vacancy rate of just 0.6% for non-conventional rentals, which is identical to the vacancy rate reported for Dakota County. This is well below the optimal range of 4% to 6% for non- conventional rentals and indicates a significant lack of available non-conventional supply in the area. A summary of the available non-conventional rental units in Farmington and Dakota County, which includes bedroom type, rent range, and median rent per square foot, follows: Available Surveyed Non-Conventional Rental Supply Bedroom Vacant Units Rent Range Median Rent Median Rent Per Square Foot Farmington One-Bedroom 1 $1,050 $1,050 $1.75 Two-Bedroom 2 $1,725 - $1,750 $1,738 $1.38 Three-Bedroom 4 $2,050 - $3,240 $2,248 $1.47 Four-Bedroom 4 $2,000 - $2,895 $2,375 $1.19 Total 11 Dakota County One-Bedroom 2 $1,050 - $1,300 $1,175 $1.60 Two-Bedroom 18 $910 - $2,585 $1,750 $1.39 Three-Bedroom 44 $1,825 - $3,750 $2,500 $1.40 Four-Bedroom 19 $2,000 - $3,945 $2,600 $1.25 Total 83 Source: Zillow, Rent.com, Homes.com Among the available non-conventional rentals in Farmington, three- and four- bedroom units comprise nearly three-quarters (72.7%) of the 11 non-conventional rentals available. The three- and four-bedroom units have median rents of $2,248 ($1.47 per square foot) and $2,375 ($1.19 per square foot), respectively. When typical utility costs ($300 or more) are considered, the typical three- and four-bedroom non- conventional rentals in Farmington have gross rents of roughly $2,548 and $2,675, respectively. While there are no three- or four-bedroom market-rate multifamily units within the city to use as a basis of comparison, the two-bedroom non-conventional units have a much higher median rent than the comparable multifamily units. As such, it is unlikely that most low-income households would be able to afford the typical non- conventional rental in the area, even if such a unit were readily available. It is also of note that market-rate renters seeking a three-bedroom or larger unit likely have to rely on non-conventional rentals as no such units were identified within the traditional multifamily market-rate properties in Farmington. Page 37 of 136 BOWEN NATIONAL RESEARCH Addendum G-24 For-Sale Housing The following table summarizes the available (as of July 31, 2024) and recently sold (between January 2020 and July 2024) for-sale housing stock for Farmington and Dakota County. Farmington - Owner For-Sale/Sold Housing Supply Type Homes Median Price Farmington Available* 36 $378,530 Sold** 1,696 $369,445 Dakota County Available* 579 $395,000 Sold** 23,271 $380,000 Source: Redfin.com & Bowen National Research *As of July 31, 2024 **Sales from January 1, 2020 to July 31, 2024 The available for-sale housing stock in Farmington as of July 31, 2024 consists of 36 total units with a median list price of $378,530. This represents a lower median list price compared to the available for-sale homes in Dakota County ($395,000). Historical sales from January 2020 to July 2024 in Farmington consisted of 1,696 homes with a median sales price of $369,445, approximately 2.8% lower than that reported ($380,000) for homes sold throughout Dakota County during this same time period. The following table and graph summarize historical sales volume and median sales price by year from January 2020 through July 2024. Sales History/Median Sales Price by Year – Farmington (January 1, 2020 to July 31, 2024) Year Number Sold Percent Change Median Sales Price Percent Change 2020 358 - $324,900 - 2021 476 33.0% $358,500 10.3% 2022 332 -30.3% $401,750 12.1% 2023 300 -9.6% $375,000 -6.7% 2024* 230 (394) (31.4%) $414,958 10.7% Source: Redfin.com & Bowen National Research *As of July 31, 2024; Volume projected through the remainder of 2024 (in parenthesis) Page 38 of 136 BOWEN NATIONAL RESEARCH Addendum G-25 *2024 full year volume projection As the preceding illustrates, home sales in Farmington increased by 33.0% between 2020 and 2021. Since 2021, volume decreased in each subsequent year; however, projections indicate that sales volume will increase to 31.4% in 2024. It should be noted that the current year’s projection is based solely on transactions year-to-date, which may not account for seasonality in the market that can influence the projection. While volume decreased annually in recent years, the median sales price of homes sold in the city increased substantially. Collectively, the median sales price of homes sold in Farmington increased by 27.7% between January 2020 and July 2024. It is also noteworthy that the median sales price through July 2024 is 10.7% higher than that reported in 2023, indicating that home sale prices are again increasing following the decline in 2023. The following table provides various housing market metrics for the available for-sale homes in Farmington and Dakota County as of July 31, 2024. Available For-Sale Housing (As of July 31, 2024) Area Total Available Units Share of County Availability Rate Months Supply of Inventory Average List Price Median List Price Average Days on Market Average Year Built Farmington 36 6.2% 0.5% 1.2 $397,881 $378,530 63 2005 Dakota County 579 100.0% 0.5% 1.4 $447,241 $395,000 43 1992 Source: Redfin.com & Bowen National Research 358 476 332 300 394 $324,900 $358,500 $401,750 $375,000 $414,958 $0 $100,000 $200,000 $300,000 $400,000 $500,000 0 100 200 300 400 500 600 2020 2021 2022 2023 2024* Farmington Annual Sales/Median Price (2020-2024*) Number Sold Median Price Page 39 of 136 BOWEN NATIONAL RESEARCH Addendum G-26 The 36 available for-sale homes in Farmington represent 6.2% of the available for- sale homes in Dakota County. These homes equate to an availability rate of 0.5% when compared to the 7,044 owner-occupied units in the city. Based on recent sales history, this inventory represents 1.2 Months Supply of Inventory (MSI). Typically, in healthy, well-balanced markets, approximately 2% to 3% of the for-sale housing stock should be available for purchase and there should be between four and six months of available inventory to allow for inner-market mobility and household growth. The available for- sale homes have an average number of days on market of 63 days and an average year built of 2005. Overall, the data illustrates that there is limited availability of for-sale homes and a relatively short average number of days on market, which has likely contributed, at least in part, to the notable increase in for-sale pricing since 2020. The following graph compares the distribution of historical and available for-sale residential units by price point for Farmington: Source: Redfin.com & Bowen National Research As the preceding illustrates, there is only one available for-sale home in Farmington priced below $200,000 compared to 31 homes priced at $300,000 or higher. Data for both recent historical sales and currently available for-sale homes illustrates that homes priced below $200,000 are very rarely available in the market. The data also illustrates that the share of homes priced between $200,000 and $299,999 has decreased compared to historical sales. As such, both availability and affordability appear to be challenges in Farmington. This likely creates issues in locating suitable housing for much of the area workforce and first-time homebuyers, which may limit the ability of the area to attract new households. 1.6% 17.9% 43.4% 37.1% 2.8% (1) 11.1% (4) 44.4% (16)41.7% (15) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% <$200,000 $200,000-$299,999 $300,000-$399,999 $400,000+ Distribution of For-Sale Homes by Price Point -Farmington Historical vs Available (Number Available) Historical Sales Available For-Sale Page 40 of 136 BOWEN NATIONAL RESEARCH Addendum G-27 Senior Care Housing As part of the Dakota County Housing Needs Assessment, senior care facilities within the county were surveyed. The facilities that were evaluated include three levels of care that typically respond to older adults seeking, or who need, alternatives to their current living environment. This includes independent living, assisted living and nursing care. The following table summarizes the surveyed facilities by property type for Farmington and the entirety of Dakota County. Surveyed Senior Care Facilities Project Type Projects Marketed Beds/Units Vacant Occupancy Rate National Median Occupancy Rate Base Monthly Rates Farmington Independent Living 1 26 3 88.5% 86.8% $1,745-$2,670 Assisted Living 1 37 9 75.7% 85.4% $2,395-$2,940 Nursing Homes 1 70 5 92.9% 82.0% $6,894 Total 3 133 17 87.2% - $1,745-$6,894 Dakota County Independent Living 21 1,355 56 95.9% 86.8% $775-$4,742 Assisted Living 32 1,975 115 94.2% 85.4% $1,506-$12,100 Nursing Homes 7 616 113 81.7% 82.0% $6,894-$21,292 Total 60 3,946 284 92.8% - $775-$21,292 Source: 2023 State of Seniors Housing and Bowen National Research Note: In some cases, daily rates were converted to monthly rates As the preceding illustrates, a total of three senior care projects were surveyed within Farmington. These projects have an overall occupancy rate of 87.2%. The occupancy rates in Farmington for independent living (88.5%) and nursing homes (92.9%) are well above the national medians, while the occupancy rate for the assisted living facility (75.7%) in Farmington is below the national median (85.4%). Given the overall high occupancy rate and projected increase in households aged 65 and older in the area, this indicates there could be an increase in demand and potential development opportunities for senior care options over the next five years. Planned and Proposed In addition to the surveys of each housing type within this overview, Bowen National Research conducted interviews with representatives of area building and permitting departments and performed extensive online research to identify residential projects either planned for development or currently under construction within Dakota County. The following summarizes the known details for the multifamily rental and for-sale housing projects that are planned, proposed, or under construction within Farmington. Note that at the time of research, no senior care housing projects were identified within the city. Page 41 of 136 BOWEN NATIONAL RESEARCH Addendum G-28 Multifamily Rental Housing Development – Farmington, MN Project Name & Address Type Units Developer Status/ Details Emery 310 3rd St. Market-Rate 74 Ebert Co. Under Construction: Studio, one- and two-bedroom units; Rents will range from $1,400 to $2,500; Scheduled to open fall 2024. Farmington Apts./Yellow Tree Apts. 21401 Dushane Pkwy. Market-Rate 168 Yellow Tree Under Construction: Studio, one- and two-bedroom units. ECD September 2025. Denmark Trail Townhomes 22100 Denmark Ave. Tax Credit 60 Dakota Co. CDA Under Construction: Allocated Tax Credits in 2024; one- through four-bedroom units at 60% AMHI; Workforce housing. Construction started summer 2024. ECD unknown. For-Sale Housing Development – Farmington, MN Subdivision Name & Address Product Type Units/Lots Developer Status/Details Meadowview Preserve Everfield Ave. and 195th St. W. Single- Family 63 Pulte Construction Under Construction: 60 of 63 lots still available at time of study; 2,390 to 3,290 sq. ft. Sapphire Lake 213th St. W. & Cambodia Ave. Single- Family 131 Keyland Homes Under Construction: 29 of 131 lots still available at time of study; $469,000 to $679,900 and 1,274 to 3,294 sq. ft. Fairhill Estate at North Creek of 190th St. W. & Trunk Hwy. 3 Single- Family 246 M/I Homes Under Construction: 54 of 246 lots still available at time of study; $435,750 to $659,613 and 1,945 to 2,874 sq. ft. Vermillion Commons Denmark Ave. & 220th St. W. Townhomes and Single- Family 144 Lennar Under Construction: 77 townhome lots and 67 single- family lots still available at time of study; Townhomes from $328,990 to $389,760 and 1,769 to 1,906 sq. ft. Single-family details unavailable at the time of this analysis. Vita Attiva at South Creek Eaton Ave. & CSAH 50 Single- Family and Townhomes Age 55+ 42 N/A Under Construction: 34 single-family homes and eight (8) townhomes still available at time of study; $593,420 for an 1,820 sq. ft. single-family and $365,000 for a 1,178 sq. ft. townhome. Whispering Fields 209th St. W & Flagstaff Ave. Single- Family 58 D.R. Horton Under Construction: 58 of 116 lots still available at time of study; $412,990 to $530,990 and 1,485 to 2,449 sq. ft. ECD – Estimated Completion Date N/A – Not Available As the preceding illustrates, there are three multifamily rental projects and six for-sale housing projects currently under construction within Farmington. Overall, these projects will comprise 302 multifamily units and 684 for-sale homes once completed. E. HOUSING GAP Based on ESRI household projections from 2024 to 2029, which is the most up-to- date version available, and taking into consideration the housing data from our field survey of area housing alternatives, we are able to project the potential number of new housing units that are needed (housing gap) in Farmington. The following paragraph summarizes the metrics used in our demand estimates. Page 42 of 136 BOWEN NATIONAL RESEARCH Addendum G-29 We included renter and owner household growth, the number of units required for a balanced market, the need for replacement of substandard housing, commuter/external market support, severe cost-burdened households, and step-down support as the demand components in our estimates for new rental and for-sale housing units. As part of this analysis, we accounted for vacancies reported among both renter- and owner- occupied housing alternatives, considered applicable units in the development pipeline, and concluded this analysis by providing the number of units that are needed by different income segments, rent levels, and purchase price points. Farmington has an overall five-year housing gap of 1,060 units, with a gap of 34 rental units and a gap of 1,026 for-sale units. The following table summarizes the rental and for-sale housing gaps by income and affordability levels for Farmington. Farmington Housing Gap Estimates Percent AMHI* ≤30% 31%-60% 61%-80% 81%-115% 116%+ Total Housing Gap Household Income ≤ $37,260 $37,261-$74,520 $74,521-$99,360 $99,361-$142,830 $142,831+ Rent Range ≤ $931 $932-$1,863 $1,864-$2,484 $2,485-$3,570 $3,571+ Price Range ≤ $124,200 $124,201-$248,400 $248,401-$331,200 $331,201-$476,100 $476,101+ Five-Year Estimates (2024-2029) Rental Housing Gap 28 0 0 0 6 34 For-Sale Housing Gap 0 52 82 636 256 1,026 10-Year Estimates (2024-2034) Rental Housing Gap 56 0 75 48 12 191 For-Sale Housing Gap 0 104 249 1,272 512 2,137 Source: Bowen National Research AMHI – Area Median Household Income *Based on HUD limits for Farmington (4-person limit) As the preceding table illustrates, the projected housing gaps encompass a variety of affordability levels for both rental and for-sale housing product, though housing gaps for rental product are limited. Note that while these estimates indicate there are no rental housing gaps for product serving households earning between 31% and 115% of AMHI over the next five years, this is due to two projects currently in the development pipeline within the city of Farmington which are anticipated to meet the need for such product in this market during this projection period. This is not to say, however, that there is not potential to develop rental product within these segments, rather that the need/demand for such product is lower than that for other segments of the market. The greatest need for for-sale product appears to be for product serving households earning between 81% and 115% of AMHI. Although development within Farmington should be prioritized to the housing product showing the greatest gaps, it appears efforts to address housing should consider various rents and price points across the housing spectrum. The addition of a variety of housing product types and affordability levels would enhance the subject market’s ability to attract potential workers and help meet the changing and growing housing needs of the local market. Page 43 of 136 BOWEN NATIONAL RESEARCH Addendum G-30 F. STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) A SWOT analysis often serves as the framework to evaluate an area’s competitive position and to develop strategic planning. It considers internal and external factors, as well as current and future potential. Ultimately, such an analysis is intended to identify core strengths, weaknesses, opportunities, and threats that can lead to strategies that can be developed and implemented to address local housing issues. The following is a summary of key findings from this SWOT analysis for Farmington. SWOT Analysis Strengths Weaknesses • Household growth of 14.3% (2010-2024) • Positive household income growth projections • Positive total employment and at-place employment trends with low unemployment rates within the county • Generally newer overall housing stock as compared to the county and state • Limited supply and very low vacancy rates among multifamily apartments • Low availability rates for non-conventional rentals and for-sale housing • Lack of larger (three-bedroom+) multifamily rental units • Lower occupancy rate for assisted living product Opportunities Threats • Housing need of 34 rental units (2024-2029) • Housing need of 1,026 for-sale units (2024- 2029) • Household growth projections for various age groups • Attract some of the 3,700+ commuters coming into the city for work to live in the city • Relatively young base of in-migrants with a variety of income levels • Rising cost of for-sale housing • Higher share of severe cost burdened renter households as compared to county and state • City risks losing some of the 11,000+ residents that commute out of the city for employment Farmington has experienced notable positive household growth since 2010, and 4.8% household growth is projected over the next five years. Total employment, at-place employment, and the unemployment rate are all indicative of a thriving local economy in the entirety of Dakota County. Overall, the housing inventory in Farmington is, on average, newer than housing within the county and state. However, Farmington has very low vacancy rates among multifamily and non-conventional rentals and a low availability rate within the for-sale housing market. These availability issues combined with rising for-sale costs and a notable number of residents commuting outside the city for employment increase the likelihood of households seeking housing options in other communities within the region. Despite some of these threats, the city has a total housing gap of 1,060 units and over 3,700 non-residents commuting into Farmington daily for employment. These factors and the projected increase in households over the next five years represent a significant development opportunity. As such, availability and affordability will be critical in controlling housing cost burden issues and to provide adequate housing options that are necessary in supporting a growing local economy. Page 44 of 136 CONTACT: Patrick Bowen patrickb@bowennational.com 614-833-9300 DAKOTA COUNTY, MN FARMINGTON Housing Needs Assessment Pa g e 4 5 o f 1 3 6 Study Area & Scope of Work •Study of Dakota County & 11 Municipal Submarkets •Demographic Characteristics and Trends •Economic Conditions and Investments •Existing Housing Stock (Rentals, Senior Care and For-Sale) •Quantified Rental and For-Sale Housing Gaps by Various Levels of Affordability •Recommended Housing Strategies (County Level Only) Scope of Work Study Area: Dakota County & 11 Submarkets 2 Pa g e 4 6 o f 1 3 6 152,060 168,008 173,920 179,637 150,000 155,000 160,000 165,000 170,000 175,000 180,000 2010 2020 2024 2029 Dakota County Household Growth Trends (2010-2029) Demographics – Overall Household Growth Trends Households within Dakota County have increased substantially since 2010, a trend which is projected to continue through 2029. HIGHLIGHTS •2010 to 2020: Households increased by 15,948 (10.5%) •2020-2024: Households increased by 5,912 (3.5%) •2024-2029: Households will increase by 5,717 (3.3%) Positive projected household growth will add demand for housing for foreseeable future. 10.5% 3.5%3.3% 8.0% 2.5%2.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2010-2020 2020-2024 2024-2029 Household Growth Trends (2010-2029) Dakota County Minnesota Pa g e 4 7 o f 1 3 6 Demographics – Households and Household Change Virtually all municipalities are projected to have overall household growth through 2029, with the greatest growth in Rosemount, Lakeville, Farmington and Hastings. Total Households Household Change 2010 Census 2020 Census 2024 Estimated 2029 Projected 2010-2020 2020-2024 2024-2029 Number Percent Number Percent Number Percent Apple Valley 18,882 21,464 21,768 21,724 2,582 13.7%304 1.4%-44 -0.2% Burnsville 24,283 25,483 25,994 26,120 1,200 4.9%511 2.0%126 0.5% Eagan 25,232 27,606 28,098 28,343 2,374 9.4%492 1.8%245 0.9% Farmington 7,109 7,906 8,125 8,512 797 11.2%219 2.8%387 4.8% Hastings 8,813 9,128 9,259 9,591 315 3.6%131 1.4%332 3.6% Inver Grove Heights 13,508 14,338 14,646 14,711 830 6.1%308 2.1%65 0.4% Lakeville 18,687 23,265 25,885 28,441 4,578 24.5%2,620 11.3%2,556 9.9% Mendota Heights 4,284 4,787 4,879 5,043 503 11.7%92 1.9%164 3.4% Rosemount 7,580 8,931 9,848 11,278 1,351 17.8%917 10.3%1,430 14.5% South St. Paul 8,172 8,432 8,371 8,639 260 3.2%-61 -0.7%268 3.2% West St. Paul 8,529 8,996 9,444 9,666 467 5.5%448 5.0%222 2.4% Dakota County 152,060 168,008 173,920 179,637 15,948 10.5%5,912 3.5%5,717 3.3% Minnesota 2,087,227 2,253,990 2,309,848 2,370,399 166,763 8.0%55,858 2.5%60,551 2.6% Pa g e 4 8 o f 1 3 6 -5. 0 % 15 . 4 % -7. 3 % -2. 9 % 7. 7 % 26 . 4 % 16 . 2 % -1. 5 % 0. 0 % -1. 5 % 6. 1 % -8. 8 % 9. 3 % 25 . 0 % -3. 6 % -1. 0 % 0. 0 % 5. 6 % -9. 1 % 6. 5 % 20 . 9 % -25.0% -15.0% -5.0% 5.0% 15.0% 25.0% 35.0% 45.0% <25 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75+ Pe r c e n t C h a n g e Age Cohort Projected Percent Change in Household Heads by Age (2024-2029) Farmington Dakota County Minnesota Demographics – Household Heads by Age Projected household growth is concentrated among households between the ages of 25 and 34 and those aged 55 and older. These trends mirror state trends and are similar to national trends. These trends will drive demand for younger family- and senior-oriented housing product. Pa g e 4 9 o f 1 3 6 Demographics – Change in RENTER Households by Income Renter Households by Income – Farmington Less Than $15,000 $15,000 - $24,999 $25,000 - $34,999 $35,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $149,999 $150,000 & Higher 2020 18 154 103 83 101 160 381 134 (1.6%)(13.6%)(9.1%)(7.3%)(8.9%)(14.1%)(33.6%)(11.8%) 2024 35 155 26 324 107 102 263 124 (3.1%)(13.7%)(2.3%)(28.5%)(9.4%)(9.0%)(23.2%)(10.9%) 2029 34 114 23 285 101 102 302 175 (3.0%)(10.0%)(2.0%)(25.1%)(8.9%)(9.0%)(26.6%)(15.4%) Change 2024-2029 -1 -41 -3 -39 -6 0 39 51 (-2.9%)(-26.4%)(-11.4%)(-12.0%)(-5.6%)(0.0%)(14.8%)(41.3%) In 2024, nearly half (47.6%) of Farmington renter households earn less than $50,000. Between 2024 and 2029, all renter household growth (23.3%) in Farmington is projected to be among households earning $100,000 or higher, while those earning less than $100,000 are projected to decline in number. Despite these changes, a substantial share 58.0% of renter households in Farmington will continue to earn less than $100,000. Pa g e 5 0 o f 1 3 6 Demographics – Change in OWNER Households by Income Owner Households by Income – Farmington Less Than $15,000 $15,000 - $24,999 $25,000 - $34,999 $35,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $149,999 $150,000 & Higher 2020 54 147 178 489 815 938 2,104 2,048 (0.8%)(2.2%)(2.6%)(7.2%)(12.0%)(13.8%)(31.1%)(30.2%) 2024 123 88 244 303 860 979 1,951 2,440 (1.8%)(1.3%)(3.5%)(4.3%)(12.3%)(14.0%)(27.9%)(34.9%) 2029 105 64 196 221 740 891 2,020 3,141 (1.4%)(0.9%)(2.7%)(3.0%)(10.0%)(12.1%)(27.4%)(42.6%) Change 2024-2029 -18 -24 -48 -82 -120 -88 69 701 (-14.7%)(-27.3%)(-19.7%)(-27.0%)(-14.0%)(-9.0%)(3.5%)(28.7%) In 2024, the majority (62.8%) of Farmington owner households earned $100,000 or more, which was a higher share compared to the county (61.9%) and state (54.1%). Between 2024 and 2029, owner household growth is projected to be confined to households earning $100,000 or higher (17.5%). This is generally consistent with county and statewide projections for this time period. Pa g e 5 1 o f 1 3 6 Commuter Inflow Over 3,700 people commute into Farmington daily, representing a large majority of all workers in the city. The largest share (59.6%) of in-commuters is among persons earning $40,000+ a year. Many in-commuters represent potential future residents! Farmington, MN – Inflow/Outflow Job Counts in 2021 16.9% 23.5% 59.6% 16.7% 22.6% 60.7% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% <$15,000 $15,000-$40,000 $40,000+ In-Commuters by Income (2021) Farmington Dakota County Pa g e 5 2 o f 1 3 6 Substandard Housing by Submarket Housing Age and Conditions Pre-1970 Product Overcrowded Incomplete Plumbing or Kitchen Renter Owner Renter Owner Renter Owner #%#%#%#%#%#% Apple Valley 482 9.3%2,064 12.8%242 4.6%247 1.5%129 2.5%58 0.4% Burnsville 1,301 16.2%3,965 22.9%408 5.1%259 1.5%266 3.3%9 0.1% Eagan 568 6.9%1,991 10.3%493 6.0%96 0.5%22 0.3%43 0.2% Farmington 60 17.0%122 2.4%0 0.0%73 1.5%0 0.0%0 0.0% Hastings 515 24.4%1,873 42.4%64 3.0%12 0.3%79 3.7%4 0.1% Inver Grove Heights 433 11.1%2,327 21.1%196 5.0%46 0.4%0 0.0%48 0.4% Lakeville 340 11.1%1,702 8.0%212 6.9%93 0.4%203 6.6%0 0.0% Mendota Heights 69 6.3%1,423 33.8%0 0.0%7 0.2%2 0.2%16 0.4% Rosemount 108 8.8%708 8.9%106 8.6%14 0.2%36 2.9%10 0.1% South St. Paul 1,305 55.5%4,497 76.6%14 0.6%77 1.3%49 2.1%38 0.6% West St. Paul 1,478 41.2%3,566 62.4%117 3.3%121 2.1%164 4.6%24 0.4% Dakota County 7,139 17.5%26,588 20.7%1,859 4.6%1,137 0.9%975 2.4%250 0.2% Minnesota 244,615 35.9%707,304 38.2%32,202 4.7%23,665 1.3%15,646 2.3%10,852 0.6% Source: ACS 2018-2022; ESRI; Bowen National Research A total of 73 Farmington households (all owners) live in substandard housing Pa g e 5 3 o f 1 3 6 Housing Cost Burdened Households by Submarket Household Income, Housing Costs and Affordability 2024 Households Median Household Income Median Home Value Median Gross Rent Share of Cost Burdened Households* Share of Severe Cost Burdened Households** Renter Owner Renter Owner Apple Valley 21,768 $100,703 $406,938 $1,607 49.2%17.2%24.4%5.7% Burnsville 25,994 $86,847 $363,527 $1,443 50.6%20.7%20.6%8.0% Eagan 28,098 $104,731 $433,589 $1,490 41.7%16.0%18.1%5.2% Farmington 8,125 $111,136 $390,820 $1,214 40.6%16.0%23.3%4.2% Hastings 9,259 $88,159 $349,101 $1,146 42.0%19.2%21.0%6.9% Inver Grove Heights 14,646 $97,846 $402,929 $1,324 47.5%17.9%20.8%5.6% Lakeville 25,885 $127,558 $467,695 $1,623 48.2%13.4%31.0%3.4% Mendota Heights 4,879 $128,891 $564,867 $1,268 41.8%14.2%21.4%6.1% Rosemount 9,848 $128,537 $432,979 $1,521 38.3%14.1%15.4%3.9% South St. Paul 8,371 $78,465 $289,841 $1,094 48.9%18.6%20.8%5.4% West St. Paul 9,444 $68,406 $337,491 $1,204 56.4%23.3%28.8%10.3% Dakota County 173,920 $102,310 $413,686 $1,410 47.0%17.0%21.9%5.7% Minnesota 2,309,848 $86,801 $360,089 $1,178 44.0%18.2%21.4%6.7% Over 550 Farmington households live in severe cost burdened housing situations Pay 30%+ in income toward housing Pay 50%+ in income toward housing Pa g e 5 4 o f 1 3 6 Multifamily Rental Housing •229 multifamily projects were surveyed in the county, totaling 27,211 units •The overall vacancy rate is 4.3% (95.7% occupied), with the majority of vacancies (90.4%) within the market-rate units •Wait lists are maintained among all property types in the county, with the most extensive wait lists among Tax Credit and Subsidized properties Typically, healthy, well-balanced markets have rental housing vacancy rates generally between 4% and 6%. Surveyed Multifamily Rental Housing – Dakota County, MN Project Type Projects Surveyed Total Units Vacant Units Occupancy Rate Market-Rate 139 21,662 1,050 95.2% Market-Rate/Tax Credit 4 704 74 89.5% Market-Rate/Government-Subsidized 1 172 4 97.7% Tax Credit 65 3,625 33 99.1% Tax Credit/Government-Subsidized 12 709 0 100.0% Market-Rate/Tax Credit/Government-Subsidized 1 104 0 100.0% Government-Subsidized 7 235 0 100.0% Total 229 27,211 1,161 95.7% The high occupancy rates and presence of wait lists across most project types are evidence of a high level of demand Pa g e 5 5 o f 1 3 6 Multifamily Rentals by Submarket (Vacancies) Projects Surveyed Total Units Vacant Units Overall Vacancy Rate Vacancy Rate by Type Market- Rate Tax Credit Gov’t Subsidized Apple Valley 27 3,217 64 2.0%2.2%1.3%0.0% Burnsville 43 6,681 432 6.5%6.2%15.8%0.0% Eagan 42 6,326 191 3.0%3.4%0.0%0.0% Farmington 7 285 1 0.4%2.8%0.0%0.0% Hastings 17 1,269 122 9.6%14.0%0.7%0.0% Inver Grove Heights 16 1,994 33 1.7%2.1%0.0%0.0% Lakeville 22 2,309 209 9.1%11.6%0.0%0.0% Mendota Heights 9 832 13 1.6%1.9%0.0%0.0% Rosemount 12 906 7 0.8%1.1%0.0%0.0% South St. Paul 10 675 2 0.3%0.4%0.0%0.0% West St. Paul 24 2,717 87 3.2%3.2%3.7%0.0% Dakota County 229 27,211 1,161 4.3%4.8%2.3%0.0% With eight (8) of the 11 submarkets reporting overall vacancy rates which are lower than Dakota County’s vacancy rate of 4.3% and three submarkets reporting overall vacancy rates of less than 1.0%, the lack of available multifamily rentals is a county-wide issue. Farmington has the second lowest overall vacancy rate of 0.4%, reflecting a significant shortage of available multifamily rentals. No “affordable” rentals are available. Pa g e 5 6 o f 1 3 6 Multifamily Rentals-Market-Rate Median Rents Farmington offers some of the lowest rents among the multifamily market- rate rentals in the county, likely contributing to the demand for such housing. Median Market-Rate Rents by Bedroom/Bathroom Type One-Br/ 1.0-Ba Two-Br/ 1.0-Ba Two-Br/ 2.0-Ba Three-Br/ 2.0-Ba Apple Valley $1,361 $1,550 $1,785 $2,019 Burnsville $1,307 $1,585 $1,786 $1,950 Eagan $1,470 $1,565 $1,690 $2,177 Farmington $1,150 $1,250 -- Hastings $974 $1,275 $1,650 $2,235 Inver Grove Heights $1,300 $1,500 $1,799 $1,735 Lakeville $1,520 $1,895 $1,880 $2,271 Mendota Heights $1,695 $2,280 $2,350 $5,625 Rosemount $1,448 $1,650 $1,908 $2,245 South St. Paul $1,099 $2,020 $1,520 $1,699 West St. Paul $1,250 $1,495 $1,595 $2,330 Dakota County (Ranges) $1,385 ($974-$1,695) $1,585 ($1,250-$2,280) $1,785 ($1,520-$2,350) $2,177 ($1,699-$5,625)Pa g e 5 7 o f 1 3 6 Housing Supply – Non-Conventional Rentals by Submarket Vacancy rates are 1.5% or lower in all submarkets. Farmington has an overall availability rate 1.2%, which is below the typical range for healthy, well-balanced markets. Farmington has collected rents starting at $1,050, which are among some of the more affordable rentals in the county. Non-Conventional Rentals Consist of Single-Family Homes, Duplexes, Mobile Homes, Etc., and Comprise a Notable Portion of the Local Housing Market Pa g e 5 8 o f 1 3 6 Home Sales (2020 to 2024) The annual volume of homes sold and median sales price in Farmington have trended in a similar direction to the overall county sales activity. Farmington’s $414,958 median sales price in 2024 represented a five-year high. *Projected to year-end Over 23,000 homes sold in Dakota County between 2020 and 2024 (July 31st) 5,209 5,897 4,948 4,309 4,897 $335,000 $375,000 $403,000 $402,000 $408,000 $330,000 $340,000 $350,000 $360,000 $370,000 $380,000 $390,000 $400,000 $410,000 0 1,000 2,000 3,000 4,000 5,000 6,000 2020 2021 2022 2023 2024* Dakota County Annual Sales/Median Price Number Sold Median Price 358 476 332 300 394 $324,900 $358,500 $401,750 $375,000 $414,958 $0 $100,000 $200,000 $300,000 $400,000 $500,000 0 100 200 300 400 500 600 2020 2021 2022 2023 2024* Farmington Annual Sales/Median Price (2020-2024*) Number Sold Median Price Pa g e 5 9 o f 1 3 6 Available Home Listings by Price The 579 available homes in the county represent an availability rate of 0.5%, which is below the typical healthy range of 2% to 3%, with nearly three-quarters of the available product priced over $300,000. 51 110 140 278 0 50 100 150 200 250 300 <$200,000 $200k- $299,999 $300k- $399,999 $400,000+ County - Available For-Sale Housing by Price < 10% of Available Homes Priced Under $200,000 Pa g e 6 0 o f 1 3 6 Available Home Listings by Submarket & List Price Nearly one-half (48.0%) of the available supply in Dakota County is priced $400,000 or more. This pricing segment also represents the largest share of available homes by price point within eight of the 11 submarkets, as well as among homes outside of the submarkets in the balance of Dakota County. This is reflective of housing affordability issues across the county. Available For-Sale Housing Units by List Price – Dakota County, MN (As of July 31, 2024) <$200,000 $200,000 - $299,999 $300,000 - $399,999 $400,000+ Number Share Number Share Number Share Number Share Apple Valley 12 15.0%14 17.5%22 27.5%32 40.0% Burnsville 16 16.5%25 25.8%24 24.7%32 33.0% Eagan 11 17.7%16 25.8%6 9.7%29 46.8% Farmington 1 2.8%4 11.1%16 44.4%15 41.7% Hastings 1 5.9%5 29.4%4 23.5%7 41.2% Inver Grove Heights 1 2.7%12 32.4%13 35.1%11 29.7% Lakeville 1 0.8%10 8.3%21 17.4%89 73.6% Mendota Heights 0 0.0%0 0.0%1 5.9%16 94.1% Rosemount 1 2.0%7 14.0%21 42.0%21 42.0% South St. Paul 1 7.1%8 57.1%4 28.6%1 7.1% West St. Paul 6 23.1%8 30.8%3 11.5%9 34.6% Balance of County 0 0.0%1 4.6%5 22.7%16 72.7% Dakota County 51 8.8%110 19.0%140 24.2%278 48.0% Pa g e 6 1 o f 1 3 6 Available Home Listings by Submarket There is limited availability among for-sale product within each of the submarkets. Farmington has an availability rate of 0.5% (well below the 2.0% to 3.0% range typically found in healthy/well-balanced markets) and 1.2 Months Supply of Inventory (MSI) (well below the healthy/well-balanced market inventory of 4 to 6 months). Available For-Sale Housing – Dakota County, MN (As of July 31, 2024) Total Units % Share of County Availability Rate / MSI Average List Price Median List Price Average Days on Market Average Year Built Apple Valley 80 13.8%0.5% / 1.7 $372,169 $367,500 42 1991 Burnsville 97 16.8%0.6% / 1.8 $344,839 $340,000 34 1983 Eagan 62 10.7%0.3% / 1.3 $402,942 $339,839 34 1988 Farmington 36 6.2%0.5% / 1.2 $397,881 $378,530 63 2005 Hastings 17 2.9%0.3% / 0.9 $383,594 $345,000 29 1976 Inver Grove Heights 37 6.4%0.3% / 1.4 $434,633 $340,000 31 1994 Lakeville 121 20.9%0.6% / 1.3 $533,830 $494,797 47 2006 Mendota Heights 17 2.9%0.5% / 1.7 $978,459 $615,000 91 1985 Rosemount 50 8.6%0.6% / 1.4 $414,086 $382,450 44 2009 South St. Paul 14 2.4%0.2% / 0.7 $268,964 $277,450 69 1941 West St. Paul 26 4.5%0.5% / 1.4 $400,487 $284,900 27 1970 Balance of County 22 3.8%-$805,064 $579,450 48 1984 Dakota County 579 100.0%0.5% / 1.4 $447,241 $395,000 43 1992 Pa g e 6 2 o f 1 3 6 Senior Care Housing 60 senior care facilities, containing a total of 3,946 marketed beds/units, were surveyed within Dakota County. Senior households, age 65 and older, are expected to increase by 7,229 households (15.8% increase) over the next five years in Dakota County. These demographic projections suggest that demand for senior-oriented housing alternatives should increase in the coming years. Pa g e 6 3 o f 1 3 6 2-Br. Fair Market Rent: $1,622 Median List Price: $395,000 Continued on next slide. Wages and Housing Affordability for Top 35 Occupations by Share of Labor Force (Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area) Occupation Sector, Title & Wages* Housing Affordability** Sector Group (Code)Occupation Title Annual Wages Max. Monthly Rent Max. Purchase Price Lower Quartile Median Lower Quartile Median Lower Quartile Median Sales and Related (41) Retail Salespersons $30,700 $35,130 $768 $878 $102,333 $117,100 Cashiers $29,800 $33,750 $745 $844 $99,333 $112,500 Sales Representatives, Wholesale $59,820 $77,710 $1,496 $1,943 $199,400 $259,033 Sales Representatives, Services $51,500 $72,430 $1,288 $1,811 $171,667 $241,433 Food Preparation/ Serving (35) Fast Food/Counter Workers $28,770 $30,900 $719 $773 $95,900 $103,000 Waiters and Waitresses $23,400 $24,210 $585 $605 $78,000 $80,700 Cooks, Restaurant $35,840 $38,380 $896 $960 $119,467 $127,933 Food Preparation Workers $29,750 $34,990 $744 $875 $99,167 $116,633 Office and Administrative Support (43) Customer Service Representatives $39,300 $47,790 $983 $1,195 $131,000 $159,300 Office Clerks, General $39,170 $47,210 $979 $1,180 $130,567 $157,367 Secretaries/Admin Assistants $44,590 $49,460 $1,115 $1,237 $148,633 $164,867 Bookkeeping/Accounting Clerks $45,850 $52,270 $1,146 $1,307 $152,833 $174,233 First-Line Supervisors, Office $60,860 $74,570 $1,522 $1,864 $202,867 $248,567 Production (51)Misc. Assemblers/Fabricators $37,850 $43,930 $946 $1,098 $126,167 $146,433 Transportation Material Moving (53) Laborers/Freight/Material Movers $38,420 $45,410 $961 $1,135 $128,067 $151,367 Stockers and Order Fillers $34,810 $37,940 $870 $949 $116,033 $126,467 Heavy/Tractor-Trailer Drivers $51,800 $61,060 $1,295 $1,527 $172,667 $203,533 Education, Training, and Library (25) Teaching Assistants $36,560 $40,180 $914 $1,005 $121,867 $133,933 Elementary School Teachers $50,030 $63,600 $1,251 $1,590 $166,767 $212,000 Pa g e 6 4 o f 1 3 6 A large portion of the area’s workforce does not have the income to reasonably afford to rent in the market, while fewer of these occupations offer wages to enable workers to afford to buy a home. 2-Br. Fair Market Rent: $1,622 Median List Price: $395,000 Wages and Housing Affordability for Top 35 Occupations by Share of Labor Force (Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area) Occupation Sector, Title & Wages* Housing Affordability** Sector Group (Code)Occupation Title Annual Wages Max. Monthly Rent Max. Purchase Price Lower Quartile Median Lower Quartile Median Lower Quartile Median Healthcare (29, 31) Home Health/Personal Care Aides $30,950 $34,450 $774 $861 $103,167 $114,833 Registered Nurses $83,710 $100,800 $2,093 $2,520 $279,033 $336,000 Nursing Assistants $40,080 $44,560 $1,002 $1,114 $133,600 $148,533 Management and Business Operations (11, 13) General/Operations Managers $66,990 $102,460 $1,675 $2,562 $223,300 $341,533 Accountants/Auditors $63,800 $79,750 $1,595 $1,994 $212,667 $265,833 Management Analysts $76,220 $97,520 $1,906 $2,438 $254,067 $325,067 Market Analysts/Specialists $61,890 $81,490 $1,547 $2,037 $206,300 $271,633 Financial Managers $124,370 $161,380 $3,109 $4,035 $414,567 $537,933 Project Management Specialists $77,120 $98,990 $1,928 $2,475 $257,067 $329,967 Business Operations Specialists $58,080 $73,790 $1,452 $1,845 $193,600 $245,967 Human Resources Specialists $60,720 $77,580 $1,518 $1,940 $202,400 $258,600 Computers/ Engineering (15, 17)Software Developers $99,220 $127,720 $2,481 $3,193 $330,733 $425,733 Industrial Engineers $81,410 $100,700 $2,035 $2,518 $271,367 $335,667 Installation/ Repair (47, 49)Maintenance and Repair Workers $46,120 $56,210 $1,153 $1,405 $153,733 $187,367 Construction Laborers $47,520 $59,920 $1,188 $1,498 $158,400 $199,733 Bldg./Grounds (37)Janitors and Cleaners $34,690 $38,080 $867 $952 $115,633 $126,933Pa g e 6 5 o f 1 3 6 Housing Gap Estimates by Submarket 2024-2029 (Rental) 1,759 1,500 880 692 660 560 481 475 402 310 34 0 500 1,000 1,500 2,000 Eagan Burnsville Apple Valley Lakeville South St. Paul West St. Paul Rosemount Inver Grove Heights Hastings Mendota Heights Farmington Housing Units Total Rental Housing Gaps by Submarket Dakota County has an overall rental housing gap of 8,339 units Pa g e 6 6 o f 1 3 6 Housing Gap Estimates by Submarket 2024-2029 (For-Sale) 3,255 3,104 2,951 1,837 1,342 1,086 1,081 1,026 980 825 801 0 1,000 2,000 3,000 4,000 Eagan Lakeville Burnsville Apple Valley Inver Grove Heights Rosemount Hastings Farmington Mendota Heights South St. Paul West St. Paul Housing Units Total For-Sale Housing Gaps by Submarket Dakota County has an overall for- sale housing gap of 20,113 units Pa g e 6 7 o f 1 3 6 Farmington Housing Gap Estimates Percent AMHI*≤30%31%-60%61%-80%81%-115%116%+ Total Housing Gap Household Income ≤ $37,260 $37,261-$74,520 $74,521-$99,360 $99,361-$142,830 $142,831+ Rent Range ≤ $931 $932-$1,863 $1,864-$2,484 $2,485-$3,570 $3,571+ Price Range ≤ $124,200 $124,201-$248,400 $248,401-$331,200 $331,201-$476,100 $476,101+ Five-Year Estimates (2024-2029) Rental Housing Gap 28 0 0 0 6 34 For-Sale Housing Gap 0 52 82 636 256 1,026 10-Year Estimates (2024-2034) Rental Housing Gap 56 0 75 48 12 191 For-Sale Housing Gap 0 104 249 1,272 512 2,137 Farmington - Housing Gap Estimates 2024-2029 All housing gaps are broken out by household income levels and housing affordability (rent or prices) for both rental and for-sale housing. The largest rental housing gaps are generally for product with rents at or below $931, affordable to households generally earning below $37k. The largest for-sale housing gaps are generally for product with prices at $331k and higher, affordable to households earning generally $99k or more. AMHI – Area Median Household Income Pa g e 6 8 o f 1 3 6 Recommended Housing Strategies CAPACITY BUILDING - Consider Capacity Building that will Expand the Base of Participants and Resources that can be Utilized to Address Housing Issues and Consider Identifying a “Housing Champion” GOAL SETTING - Set Realistic and Attainable Short-Term Housing Goals, Outline Long-Term Objectives, and Monitor Progress ENCOURAGE COLLABORATION - The Dakota County Community Development Agency (CDA) and Individual Communities Should Continue to Work Collaboratively to Address Housing Issues REGULATORY CONSIDERATIONS - Consider Implementing or Modifying Policies to Encourage and Support the Development of New Housing and the Preservation of Existing Housing 25 Pa g e 6 9 o f 1 3 6 Recommended Housing Strategies SUPPORT SENIOR HOUSING - Explore Efforts to Encourage the Development of Senior-Oriented Housing to Enable Seniors to Transition into More Maintenance-Free Housing SUPPORT WORKFORCE HOUSING - Support Efforts to Encourage the Development and Preservation of Workforce Housing EDUCATION & OUTREACH - Support and Expand Education and Outreach Campaign to Help Support Housing Initiatives DEVELEOPMENT PARTNERSHIPS - Explore and Encourage Development Partnerships Between Various Public & Private Sector Groups, Including Employers MARKETING - Market Dakota County’s Housing Needs and Opportunities to Potential Residential Development Partners and Promote Existing Housing Resource Center 26 Pa g e 7 0 o f 1 3 6 CONTACT: Patrick Bowen Bowen National Research patrickb@bowennational.com 614-833-9300 www.bowennational.com Questions? Pa g e 7 1 o f 1 3 6 ECONOMIC DEVELOPMENT AUTHORITY AGENDA MEMO To: Economic Development Authority From: Deanna Kuennen, Community & Economic Development Director Department: EDA Subject: Partnership Presentation - Dakota County Community Development Agency (CDA) Meeting: Economic Development Authority - May 19 2025 INTRODUCTION: Economic development requires trusted partners and partnerships. One long-standing partnership that exists is with the Dakota County Community Development Agency (CDA). Primarily, the CDA focuses on the implementation of housing programs but is also active in assisting cities with addressing redevelopment needs, allocating federal resources to eligible activities, and providing support for economic development initiatives. Tony Schertler, CDA Executive Director, and Lisa Alfson, Director of Community & Economic Development, will attend the EDA meeting to present an overview of the CDA's work and how the CDA collaborates with communities. DISCUSSION: The CDA is a trusted economic development partner and has made a positive impact in Farmington through their work in housing and redevelopment. Tony Schertler, CDA Executive Director, and Lisa Alfson, Director of Community & Economic Development will attend the EDA to present an overview of the CDA's work and how the CDA collaborates with communities. The goal is to understand how the CDA supports the Farmington community and economic development efforts (housing, redevelopment, work force), and start exploring additional ways to work together to strengthen the community as a whole. ACTION REQUESTED: No action required. The EDA is asked to participate in a conversation around collaboration and enhancing existing partnership opportunities. ATTACHMENTS: CDA - Farmington 5-2025 Page 72 of 136 CITY OF FARMINGTON EDA MEETING MAY 19, 2025Pa g e 7 3 o f 1 3 6 MISSION To improve the lives of Dakota County residents and enhance the economic vitality of communities through housing and community development. •Over 10,000 people are served by CDA housing programs. •Portfolio of nearly 2,900 units of affordable rental housing serving homeless youth, single person households, disabled households, families and seniors. •Rental assistance programs serve over 2,700 households. Some resources target specific households. •Provide loans for homeowners to make improvements and weatherization grants to improve energy efficiency. •Homebuyer education and foreclosure counseling services. •Funding streams from local, state and federal resources; rental revenue. •Issue housing finance resources for affordable housing developers. •Assist cities with addressing redevelopment needs. •Allocate federal CDBG resources to eligible activities. •Provide support for economic development initiatives. Pa g e 7 4 o f 1 3 6 Collaboration •Dakota County & Dakota County CDA - distinct units of local government with unique responsibilities and authority •Dakota County Commissioners appoint themselves to the CDA Board •One At -Large Commissioner (Public Housing/Housing Choice Voucher participant) •Collaborative relationship on behalf of common stakeholders and customers. •Shared responsibilities and distinctive tool sets for economic development and housing. CDA Dakota County Cities & Townships Federal & State Agencies Financial Partners Developers (Private & Non-Profit) Landlords Pa g e 7 5 o f 1 3 6 CDA Housing – Targeted Populations CDA units provide housing for: ◦Seniors age 62+ ◦Seniors age 55+ with a preference for Veterans ◦Nicols Pointe (Eagan) ◦Families with children ◦Public Housing/Section 18 properties ◦Workforce townhome developments ◦Individuals or households with no more than two members ◦Gateway Place (West St. Paul) ◦Colleen Loney Manor (public housing in West St. Paul) ◦1 bedroom units in townhome developments ◦Homeless youth ◦Lincoln Place (Eagan) 0 100 200 300 400 500 600 Apple Valley Burnsville Eagan Farmington Hastings Inver Grove Heights Lakeville Mendota Heights Rosemount South St. Paul West St. Paul Senior Housing Workforce Housing Public Housing/Section 18 Youth Housing Workforce Apartments Pa g e 7 6 o f 1 3 6  Program provides affordable rental housing for seniors age 62+. Additional household members need to be at least 55 years old.  29 developments (1,731 units) Income Limits One person = $72,950 Two people = $83,400 Rents Rent based on income properties: One bedroom = $522-$935 Two bedroom = $772-$1,183 Flat rent buildings: One bedroom = $792 Two bedroom = $970 CDA staff manage and maintain the properties (except Valley Ridge in Burnsville) CDA Senior Housing Pa g e 7 7 o f 1 3 6 CDA Senior Housing - Farmington Vermillion River Crossing 66 units Opened in 2012 Virtual Tour Pa g e 7 8 o f 1 3 6  27 developments (887 units)  Program provides affordable rental housing for families with children under the age of 18 earning below 60% of area median income.  One-bedroom units can be occupied by single-person households or two adults.  Accessible waiting list serves households needing mobility accessible units (1 and 2 bedrooms). Rents One bedroom = $835 Two bedroom = $960 Three bedroom = $1,070 Four bedroom = $1,325 CDA Workforce Family Housing Pa g e 7 9 o f 1 3 6 CDA Workforce Housing - Farmington Denmark Trail Townhomes 40 units Opening summer 2025 Twin Ponds Townhomes 51 units Two phases, first opened in 2009 and second in 2012Pa g e 8 0 o f 1 3 6 CDA Housing Units – Waiting Lists •Generally, wait time for units is 18-24 months, but is dependent on unit turnover rates. Waiting List # units # applicants % preference Colleen Loney Manor 80 3,648 34% Gateway Place 54 2,708 23% Nicols Pointe 24 906 58% Public Housing (WL closed)123 2,033 43% Senior Housing 1,594 943 61% Senior Housing – Accessible 57 174 59% Workforce Housing 753 6,127 40% Workforce Housing – Farmington 91 2,976 42% Workforce Housing – Accessible 47 331 40% Pa g e 8 1 o f 1 3 6  Federally funded program that provides rent assistance to households earning below 50% of area median income. Dakota County CDA has an allocation of 2,796 vouchers. Other jurisdictions throughout the metro and state receive direct allocations from the U.S. Department of Housing and Urban Development (HUD). •Met Council – 6,818 •Minneapolis – 6,323 •St. Paul PHA – 4,768 •Dakota County CDA – 2,796 CDA was recently awarded High Performer status from HUD for the administration of this program. Re-evaluated annually. Housing Choice Vouchers Pa g e 8 2 o f 1 3 6 Housing Choice Voucher Program – Waiting List # applicants on list = 12,020 •38% are preference applicants (4,547 applicants) •Wait time is 4-5 years for preference applicants; dependent on funding and voucher turnover rates Applicants By Address Apple Valley 463 12.38% Burnsville 817 21.84% Eagan 653 17.46% Farmington 172 4.60% Hampton 20 0.53% Hastings 215 5.75% Inver Grove Heights 325 8.69% Lakeville 264 7.06% Mendota 5 0.13% Mendota Heights 28 0.75% Rosemount 208 5.56% South St. Paul 219 5.86% West St. Paul 351 9.39% Total 3,740Pa g e 8 3 o f 1 3 6  Visit www.myhousing.dakotacda.org  Create an online account and fill out the application.  Preference is given to households who: Live or work in Dakota County Have immediate family living in Dakota County (mother, father, son, daughter, brother or sister) Applicants who do not have a permanent address in Dakota County, but receive benefits through Dakota County Employment & Economic Assistance.  Wait time for CDA housing units is 18-24 months from date of application for preference applicants. Wait time is dependent on unit turnover rates. Wait time for Housing Choice Voucher (rent assistance) is 4-5 years.  Save My Spot – twice a year the CDA conducts a waiting list update. You will receive an email to complete this process to remain active on waiting lists. CDA Waiting Lists – How to Apply Open waiting lists: Senior Housing •1 bedroom •2 bedroom •Accessible Units Nicols Pointe Colleen Loney Manor Gateway Place Workforce Townhomes – 1, 2, 3 bedrooms Farmington Workforce Townhomes – 1, 2, 3 and 4 bedrooms Workforce Housing – Accessible Units (Townhomes & Gateway) Housing Choice Voucher Project Based Voucher Pa g e 8 4 o f 1 3 6 Activity/Program Outcomes Redevelopment Inventive Grants (RIG) • Predevelopment grants •Planning grants •Redevelopment grants Farmington was awarded $250,000 in 2023 to demolish and clear a blighted commercial building to assist with the redevelopment of a downtown site into market rate housing; in 2007, the City was awarded $66,805 to demolish a building on Oak Street for redevelopment CDA Economic Development activities/programming RIG has awarded almost $15 million since the program began to 71 redevelopment projects, 30 planning activities, and six environmental investigation activities. Pa g e 8 5 o f 1 3 6 Activity/Program Outcomes Prospect Response Capacity •GREATER MSP $100,000 annual investment. •Communication with new and established businesses Direct prospect calls. Business Technical Assistance & Access to Capital •Open To Business (OTB)In 2024 assisted 165 clients. OTB financed $244,790 to clients. •CEO Next Business Institute Two businesses participating in October 2025 – June 2026 program. CDA Economic Development activities/programming Pa g e 8 6 o f 1 3 6 CDA Economic Development activities/programming Activity/Program Outcomes Network/Outreach •Member of economic development associations MN Brownfields, MAPCED, EDAM, Chambers •Facilitate bi-monthly meetings with Cities/County Discuss CDA activities, common city challenges/opportunities, potential developments, ways to collaborate, etc. •Facilitate bi-monthly meetings with Economic Development Workgroup (CDA, County staff)Information sharing Marketing •Southeast Development Summit •Farmington Small Business Resource Fair •Farmington Business SummitPa g e 8 7 o f 1 3 6 CDA Economic Development activities/programming Activity/Program Outcomes Redevelopment •Purchased 1500 Towerview Rd. (Eagan) Site August 2024 39 acres, residential focus, highly desired by other developers. CDA will prepare site for future redevelopment, including CDA housing Provide Quality Workforce Housing •CDA Developments Opened Nicols Pointe (September), Groundbreaking for Denmark Trails Townhomes •Private Sector & Nonprofit Developments Fully funded the Pillsbury Ridge project (48-unit multi-family) in Burnsville and partially funded the Kenyon Green project (49-unit multi-family) in Lakeville (August) Pa g e 8 8 o f 1 3 6 www.dakotacda.orgPa g e 8 9 o f 1 3 6 ECONOMIC DEVELOPMENT AUTHORITY AGENDA MEMO To: Economic Development Authority From: Deanna Kuennen, Community & Economic Development Director Department: EDA Subject: Initial Discussion - Farmington Local IMPACT Program (IMPACT) Meeting: Economic Development Authority - May 19 2025 INTRODUCTION: The EDA Work Plan identifies "Program Advancement - accessing and developing tools to support and grow the local business ecosystem..." as a core priority. Traditionally, the EDA offered programs (grants) to support small businesses. The tools were intended to foster growth and strengthen the city's diverse and valued small business ecosystem. Currently, the EDA is not offering any financial programs/tools, but funding has been included in both the 2024 and 2025 budgets to support program development. Staff has been listening to businesses, assessing the financial gaps, and researching different types of economic development incentive programs. Based on the information gathered - Staff is seeking to have an initial conversation about the overarching goals of the EDA to ensure that the future program is impactful. DISCUSSION: The EDA has expressed their support for having a robust and impactful toolkit to support and attract businesses. Different programs have been provided in the past, which, at those points in time, served an important need. Today, Staff is seeking to gather additional input from the EDA as to the overall goals of a new program. Based on conversations with businesses (existing and proposed), property owners, economic development partners, and peers - Staff is proposing developing a multi-component program that would include the implementation of a revolving low-interest loan program, micro grants, and a separate fund to support building improvements/enhancements. Before moving forward, Staff is seeking additional input from the EDA. The following program purpose and program objectives are provided to stimulate discussion. Page 90 of 136 Farmington Local IMPACT Program (IMPACT) Proposed Program Purpose: Proposed Program Objectives: Based on input from the EDA, Staff will build out the IMPACT program guidelines, objectives, eligible applicants, eligible uses of funds, loan/forgivable loan structure and criteria, and application process. Page 91 of 136 BUDGET IMPACT: TBD - funding included in both the 2024 and 2025 budgets for program development. ACTION REQUESTED: No action requested. This is a discussion item, and Staff is seeking input and direction from the EDA. Page 92 of 136 ECONOMIC DEVELOPMENT AUTHORITY AGENDA MEMO To: Economic Development Authority From: Stephanie Aman, Economic Development Coordinator Department: EDA Subject: Grocery Market Study Meeting: Economic Development Authority - May 19 2025 INTRODUCTION: At the February 18th EDA meeting, Staff received authorization to commission a grocery study with a maximum budget of $10,000. The study is now complete. DISCUSSION: In early March, ROIC Analytics sent their field analyst to Farmington, resulting in a comprehensive site location analysis with sales projections. Staff have been actively utilizing this report to drive discussions and support recruitment efforts aimed at bringing a grocery store to Farmington. Working with developers, brokers, and landowners, we hope that these efforts will help result in interest from grocers in this much asked for amenity for the community. BUDGET IMPACT: $9465.00 ACTION REQUESTED: The report is attached for review and Staff are glad to answer any questions. ATTACHMENTS: Updated 4.23.25 Grocery Sales Forecast _Farmington MN 042025V3 Page 93 of 136 SEC Pilot Knob & Hwy 50 Farmington, Minnesota Sales Forecast March 2025 Prepared by ROIC analytics, LLC Page 94 of 136 © 2025 ROIC analytics, LLC 2 Table of Contents Study Overview ............................................................................................................................................. 3 Executive Summary ...................................................................................................................................... 4 Sales Forecast ......................................................................................................................................... 4 Primary Trade Area ....................................................................................................................................... 5 Trade Area Demographics ............................................................................................................................ 6 Mobile Location Visitors ................................................................................................................................ 7 Housing Growth Map .................................................................................................................................. 10 Trade Area Demographics: Household Income .......................................................................................... 11 Trade Area Competition Map ...................................................................................................................... 12 Primary Trade Area Competition ................................................................................................................ 13 Site Overview .............................................................................................................................................. 14 Market Share Map ....................................................................................................................................... 15 Appendix A: Glossary of Terms .................................................................................................................. 16 Appendix B: Projected Marketplace ............................................................................................................ 17 Appendix C: Chain Summary ...................................................................................................................... 18 Appendix D: Store Volume by Sector ......................................................................................................... 19 Appendix E: Sources and Notes ................................................................................................................. 20 Page 95 of 136 © 2025 ROIC analytics, LLC 3 Study Overview At the request of the City of Farmington Economic Development Authority, ROIC analytics has evaluated the greater Farmington area for the potential to add a grocery store to serve the market from within, instead of residents having to leave to shop for groceries in the surrounding cities of Lakeville and Apple Valley. Based on previous grocery analysis in the market and the grocery stores already present in those surrounding areas, the information in this report assumes the planned store would be a 30,000 square foot independent grocer to be named later. Thought the market share maps and detailed reports will reflect the 30,000 square foot size, additional projections are also provided at sizes of 40,000 and 50,000 square feet. The site to be tested is at the SEC of SEC Pilot Knob & Hwy 50 in Farmington. . Trade Area Overview The trade area extends about three miles to the west, four miles to the north and six plus miles south and east of central Farmington. This area is large enough to encompass many of the shoppers in Farmington without overextending into nearby market areas with their own grocery stores like Lakeville and Apple Valley. The defined trade area is larger than the city of Farmington and home to about 33,000 residents today. Population Growth Many new multi- and single-family housing projects are underway in Farmington, and most are concentrated near the identified site. A map showing the planned projects appears on page eight of this report. We have assumed about 2,500 new residents in the trade area by the first projection year of 2028. This build-out rate could be higher or lower depending on interest rates, building costs and consumer confidence but with the number of projects in the pipeline, this amount of growth is assumed to be about two to three percent per year. Image Assignment Gravity models like the one used for sales projections here use each market competitor’s size, sales, and location relative to competition and sister stores to assign an “image” or acceptance rating to each store in the model during the balancing phase of analysis to set up a picture of today’s market. Images here range from 47 to 139 with 100 considered average. Images assigned by the model and analyst to existing competitors in the market during the balance phase are then used as a guideline for projecting new sites and remodels during the sales projection phase of the analysis. Images will vary throughout a trade area, with some clusters of stores imaging lower than their counterparts elsewhere in the trade area. Most chains in the greater Minneapolis area already have stores in the towns surrounding Farmington and are less likely to add an additional store here that might impact their current locations. Later in this report, we show how chains like Cub Foods, Walmart and Hy-Vee pull shoppers from Farmington to their stores in nearby towns. Determining the image of the proposed location depends on the residents of the trade area, the existing competitive offering and nearby sister stores. Overall, the residents in this trade area are a good match for several different formats and the city has determined that an independent, traditional format store is the most appropriate to base the initial sales forecasts here on. Since the exact independent has not been identified, we have assigned the site an image of 85, which is a little below average, to reflect the uncertainty of the name recognition by a new player in the market. Page 96 of 136 © 2025 ROIC analytics, LLC 4 Executive Summary Site Detail Address SEC Pilot Knob & Hwy 50 City Farmington State Minnesota Store Characteristics Store Size 30,000 SF General Merchandise / Pharmacy No Liquor No Trade Area Overview 2028 Population 36,063 Average Per Capita Expenditure $ 76.01 Available Grocery Dollars $ 2,741,128 Market Assumptions • The store will open in 2028. • No competitive changes are assumed that would impact the site. • The store will be operated as a traditional grocery format by an independent operator. • Though all maps and reports will be based on a 30,000 square feet size, additional projections are provided for 40,000 and 50,000 square feet at the client’s request. Sales Forecast 1st Year 2nd Year 3rd Year Estimated Weekly Sales (30K SF) $419,749 $436,539 $453,429 Estimated Weekly Sales (40K SF) $499,821 $519,813 $539,806 Estimated Weekly Sales (50K SF) $566,249 $588,898 $611,548 Sister Store Sales Impacts None assumed. Page 97 of 136 © 2025 ROIC analytics, LLC 5 Primary Trade Area Page 98 of 136 © 2025 ROIC analytics, LLC 6 Trade Area Demographics Page 99 of 136 © 2025 ROIC analytics, LLC 7 Mobile Location Visitors The data below is sourced from mobile location visitors to competitors who serve Farmington shoppers from the surrounding areas. Understanding who serves the area and what level is helpful for targeting grocers who might want to locate in Farmington due to a gap in their store network or not want to locate there because a new location might penalize sales at an existing store. Following are the chain stores pulling the most customers from the Farmington area today. Page 100 of 136 © 2025 ROIC analytics, LLC 8 Page 101 of 136 © 2025 ROIC analytics, LLC 9 Source: PlaceIQ mobile location data 2025 Page 102 of 136 © 2025 ROIC analytics, LLC 10 Housing Growth Map Source: City of Farmington and Hubexo database March 2025 Red = Single Family Blue = Multi Family Page 103 of 136 © 2025 ROIC analytics, LLC 11 Trade Area Demographics: Household Income Source: STI PopStats Q1 2025 $150K+ $75-100K © 2025 ROIC analytics, LLC 12 Trade Area Competition Map © 2025 ROIC analytics, LLC 13 Primary Trade Area Competition Page 106 of 136 © 2025 ROIC analytics, LLC 14 Site Overview © 2025 ROIC analytics, LLC 15 Market Share Map © 2025 ROIC analytics, LLC 16 Appendix A: Glossary of Terms Draw: Percent of a store’s business captured within the defined primary trade area (PTA). A draw of 90 represents 90% of the store’s business coming from within the PTA with 10% coming from beyond the trade area boundaries (see also “Beyond Sales”). Stores on the edges of the PTA typically have lower draws because they are serving shoppers inside and outside the trade area. Beyond Sales: Sales gained from people living outside the PTA. These shoppers may be frequenting the store because they work nearby but live outside the PTA or are passing by for another reason such as heading to a destination like a beach or tourist attraction or may be visiting the area. Curve: Curve simulates the distribution of market share over distance like the bell-shaped curve from statistics and represents a store’s ability to pull shoppers to the facility. Stores with higher curves will have higher market share in the map sectors close to the store and those market shares will taper off quickly as distance from the store increases. A smaller neighborhood grocery might have a curve 10 points higher than a supercenter, for example. Image: Gravity models use draw and curve in conjunction with each market competitor’s size, sales, location relative to competition and sister stores to assign an “image” or acceptance rating to each store in the model during the balancing phase of analysis (see also “Balance”). Images typically range from 50 to 150 with 100 considered average. Images assigned by the model and analyst to existing competitors in the market during the balance phase are then used as a guideline for projecting new sites and remodels during the projection phase (see also “Projection”) of the analysis. Balance: The beginning phase of gravity modeling is the balance. During balancing, the analyst pulls in information about the PTA residents by map sector (including current and projected population and per capita weekly expenditure), competitor size and sales plus any barriers to travel that may exist throughout the trade area (lakes, rivers, freeways with no places to cross, for example). The analyst assigns draw and curves to each competitor and balances the model to allocate the available dollars in each map sector to the stores in a logical manner. During this balancing process, the model assigns an image to each store. By evaluating the market share distribution for each store and each store’s image relative to its sister stores and competitors, the analyst creates a modeled replication of the PTA that simulates the flow of grocery dollars from residents (demand) to market competitors (supply). Projection: The projection phase of gravity modeling follows the balance and allows the analyst to take the simulation of the current market established in the balance and layer in future market changes. Population growth (if applicable) plus store openings, closings and remodels are added to the model to project the future market. During projection, any store added to the model is assigned a draw, curve and image by the analyst using the balanced model as a guide. Once changes are made, the future market is projected. Page 109 of 136 © 2025 ROIC analytics, LLC 17 Appendix B: Projected Marketplace Note: Forecasted sales include beer/wine sales that have been removed from the final sales projection Page 110 of 136 © 2025 ROIC analytics, LLC 18 Appendix C: Chain Summary Note: Forecasted sales include beer/wine sales that have been removed from the final sales projection Page 111 of 136 © 2025 ROIC analytics, LLC 19 Appendix D: Store Volume by Sector Note: Forecasted sales include beer/wine sales that have been removed from the final sales projection Page 112 of 136 © 2025 ROIC analytics, LLC 20 Appendix E: Sources and Notes Population and demographic data are sourced from Build Central, March 2025 and STI: PopStats from Q1, 2025. STI: PopStats are registered trademarks of Synergos Technologies, Austin, TX. All Rights Reserved. All competitive data is spring 2025 original fieldwork conducted by ROIC analytics. This study uses proven methodologies trusted by leading grocers to forecast the performance of a proposed store site. As in any forward-looking analysis, this process can produce highly reliable results in many cases and great variance in others. The accuracy of the results is dependent on numerous factors that cannot be controlled, such as changes in population and competition, store offering, pricing, and operations, and ultimately consumer acceptance of the new store. As such, ROIC analytics provides no warranty to the data or projections in this report. The client of this study assumes all risks associated with using the data or projections herein. The ROIC analytics team is happy you have chosen us to be your service provider and thanks you for your patronage. We hope you will continue to think of us when the need arises! ROIC analytics, LLC provides innovative and proven solutions to help our clients make strategic market decisions that lead to successful retail stores and vibrant communities. We have assembled a team of the most experienced market analysts in the industry and provided them with the best technology and data available to ensure that our results are both accurate and actionable. Our analysts have completed projects in most major metropolitan areas in the country and numerous small cities and towns and continually expand our local knowledge through frequent market visits. ROIC analytics has helped our grocery and specialty retail clients with all areas of strategic capital planning from market research through effective site selection and sales forecasting. Additionally, we leverage our deep retail market experience to help communities and shopping center developers position themselves to attract and support successful retail operators. Page 113 of 136 ECONOMIC DEVELOPMENT AUTHORITY AGENDA MEMO To: Economic Development Authority From: Deanna Kuennen, Community & Economic Development Director Department: EDA Subject: Director's Report Meeting: Economic Development Authority - May 19 2025 INTRODUCTION: Attached please find a summary of recent economic development activities. Additional details regarding some of the activity is highlighted separately in the EDA packet. DISCUSSION: Attached please find a summary of recent economic development activities. Staff will be available to answer questions. ACTION REQUESTED: No action questions. This item is informational and is provided to communicate how the EDA time and money resources are allocated and to track and measure the impact of initiatives. ATTACHMENTS: 05-2025 meeting Page 114 of 136 Reporting Period: May 2025 DIRECTOR’S REPORT – providing project highlights and a summary of economic development activity. Projects & Initiatives • Rye Apartments Development The groundbreaking ceremony took place on Nov. 19th, 2024. Construction is progressing nicely, and the project is on track to open in Fall 2025. Follow along: https://youtu.be/b5M_hJyF-7o **Please visit the Community Development “Development Project Updates” page to watch the progress of various projects underway in the community. More information, imagery, and projects are being added as they advance.** Development Project Updates | Farmington, MN • BRE Staff have actively been reaching out to schedule and conduct business visits based on the BRE Plan discussed at the May2024 meeting. Responses have been slow, but visits are getting scheduled and Staff hopes that the Business Survey and Farmington Business Summit kick start these efforts. 2025 visits have included: Aerospace Fabrication and Valmont Prospects • Request For Information (RFIs) Project Kraken – DID NOT SUBMIT – medical equipment assembly and manufacturing, seeking existing buildings only. Canadian Company – DID NOT SUBMIT – manufacturing plant seeking existing buildings only. Page 115 of 136 Project Sarek – DID NOT SUBMIT – rare earth magnet manufacturing facility seeking existing buildings only. Project Corona – DID NOT SUBMIT – food manufacturing/retail operation, seeking acreage. Project Heart – DID NOT SUBMIT – seeking 60+ acres requiring rail access for a heavy power user. Project lead from DEED and will require an NDA. Project Blue – DID NOT SUBMIT – only considering existing buildings. Project lead from GreaterMSP • Developer Meetings Since the start of the year, Staff has met with the following developers who have expressed interest in working in Farmington. Conversations continue and various opportunities continue to be explored: o Sever Commercial Construction o MWF o DBS o Acumen o DR Horton o Synergy Land Co. o Cushing Terrell o CORE Real Estate Group o Caughan Companies o Obsidian o Ozhi Development o Bauer Design & Build o Remain RE • Other Prospects Initial conversations have occurred with existing and prospective businesses looking to locate/relocate in Farmington. The types of projects that are represented include entertainment, services, manufacturing, commercial/retail, daycare, and MF housing. • TRACT - The Metropolitan Council authorized the City to place its comprehensive plan amendment into effect at their meeting on Wednesday, May 14, 2025. All previous conditioned city approvals are now official based on the Met-Council’s approval of the comprehensive plan amendment. Please see attached Met-Council Business Item 2025-88. Also – for reference, the Farmington Technology Park timeline, process/official documents, and actions can be found on the city’s website: Data Center (Farmington Technology Park) | Farmington, MN Page 116 of 136 Other • MidAmerica Economic Development Council (MAEDC) The Best Practices Conference was held in Stillwater, MN in May. Staff served on the conference planning committee working to build out the agenda, and Stephanie Aman was selected to receive an MAEDC Scholarship. This covered her conference registration fee and she will be matched with a mentor from another state for a year-long program. Scholarship winners were recognized at the conference. (Pictures coming soon!) • Grocery Initiative At its February meeting, the EDA authorized staff to execute a contract with ROIC Analytics, LLC for up to $10,000 to conduct a grocery market study in Farmington. The report has been completed and Staff is actively using the study to market Farmington to groceries, developers, wholesalers, etc. . Staff will be building out a “public facing” component to the grocery recruitment efforts. This will likely involve community surveys, a page on the website with market information, etc. utilizing insights from the KState Rural Grocery Initiative. • Partner Meetings Staff is prioritizing connecting and leveraging our economic development partners – including the Minnesota Trade Office, DEED, Greater MSP, utility providers, and other organizations. An example of this is Staff attended the Greater MSP Partnership Next25 event in late February to learn about their successes and goals and to better understand Farmington’s place in the region. Partners are being invited to attend upcoming EDA meetings, to share their vision, role, and plans. This will provide an opportunity for the EDA to connect with these partners, ask questions, gain a broader understanding of how our work aligns, and learn how we can leverage these relationships. Invitations have been made to the following: DCTC/Inver Hills College - March MCCD / Open to Business – April Dakota County CDA – May CVN/Brookshire GreaterMSP DEED • MREJ – Summits/Conferences/Awards Staff will be moderating a panel at the 3rd Annual SE Metro Summit on May 22. Stephanie Aman will be moderating the opening session, focusing on the state of the markets in the SE Metro region. Page 117 of 136 The MREJ 2025 Awards was held on May 1, 2o25. Farmington was well represented and recognized for our people and projects! Lynn Gorski was named a finalist for the Women of the Year category, and The Emery won two awards – Redevelopment Project of the Year and Suburban Multi Family SE Project of the year. Congratulations to all! • Economic Development Website Over the next few months, Staff will be focusing on updating the economic development content on the city’s website. The purpose will be to make information easily accessible and build out content which is known to be important to site selectors and business representatives. Page 118 of 136 1 M e t r o p o l i t a n C o u n c i l Committee Report Community Development Committee Committee meeting date: April 21, 2025 For the Metropolitan Council: May 14, 2025 Business Item: 2025-88 City of Farmington: Farmington Technology Park Comprehensive Plan Amendment, Review File 22086 -7 Proposed action 1. Authorize the City to place its comprehensive plan amendment into effect. 2. Find that the amendment does not change the City’s forecasts. 3. Strongly advise the City that: a. Because of the potential volume and chemical characteristics of wastewater from this site, the Council is concerned about a potential wastewater system impact. Therefore, the Council advises the City to consider the full extent of the advisory comments in the Review Record for wastewater. b. Because of the volume of projected water use identified for this site, the Council is concerned about the potential water demand tradeoff between this immediate industrial use versus the population future growth of the City. Therefore, the Council advises the City to consider the full extent of advisory comments in the Review Record for water supply. 4. Advise the City: a. That its Plan remains inconsistent with Council housing policy, and it may not draw down funds awarded via Livable Communities Act (LCA) programs b. To implement the advisory comments in the Review Record for forecasts. Summary of Community Development Committee discussion/questions Planning Analyst Patrick Boylan presented the staff’s report to the Committee. The Farmington City Administrator, Community Development Director, and Planning Manager were in attendance. Also in attendance was Mr. Gary Johnson, a resident of Castle Rock Township, 22280 Marian Avenue, who spoke on his concerns for the site. Mr. Johnson asked why this site is on the Committee Agenda today and what vote will be made. Planning Analyst Boylan explained that the City of Farmington submitted an application to change the future land use, and the item was placed on the Committee’s Agenda. There was no site plan or end user identified in the application before the Committee. Mr. Johnson noted that there is pending legislation and depending on how the Minnesota Legislature acts, asked if the Committee’s action would be overturned. Executive Director LisaBeth Barajas explained that the Met Council reviews applications against the laws in place at the time of application. Changes to the current regulatory framework may impact the Met Council’s actions, but the City submitted an application before proposed legislation was drafted. Barajas noted that there is only one instance of retroactive decision and only because the Legislature made it retroactive. Mr. Johnson asserted that the City is violating the Orderly Annexation Agreement with Castle Rock Township. Page 119 of 136 2 M e t r o p o l i t a n C o u n c i l Barajas replied that it is the Met Council’s understanding that the Office of Administrative Hearings has authorized the annexation and if there is a legislative change or court order for the City to then change their Comprehensive Plan, then the City would need to submit a new amendment to the Council, which the Council would review at that time. This has happened from time to time and that would be the instance where the Met Council would re-review any changes to an amendment. She further stated that the Met Council does not speculate on pending legal cases or proposed legislation, and the Met Council would take any action necessary as directed by the Legislature or the courts. Mr. Johnson asked why the Met Council is reviewing the amendment when the DNR considered the change to the water supply plan incomplete. Committee Chair Robert Lilligren responded that the Met Council has a statutory obligation to act on submitted amendments within a certain period of time. Barajas added that Met Council staff called the Amendment incomplete and directed the City to consult with the DNR regarding the Farmington Water Supply Plan. DNR Staff determined that water supply was sufficient. Mr. Johnson further commented that the DNR has no application for additional water use or for a well and therefore had no requirements that they can impose upon the City. The water use for this plan, he added, will not happen for another two or three years and he asked how the Met Council can give its approval now when the DNR cannot give its approval. Barajas noted the strong advisory comments in proposed actions in the Staff Report regarding water supply planning and clarified that the Met Council is not approving the amendment but authorizing the City to take action. Barajas further noted that Met Council staff has met with the City to express these concerns and walked through the details of those concerns. The City is aware of the next steps that are needed in ground water appropriation permits, which are issued by the DNR and not within the purview of the Met Council. Chair Lilligren noted that he hears Mr. Johnson’s concerns. This is the first time he has heard of such strong advisory comments from the Met Council, adding that this is something that will come before the Met Council in future actions or permits for water use. The Met Council is not approving any single project. Mr. Johnson stated that a heavy industrial use does not belong near residential and cited machinery and equipment in proximity to existing homes. He asked the Met Council to not approve the City’s request until the issues can be fully analyzed. Lynn Gorski, Farmington City Administrator, expressed appreciation for Met Council Staff’s work and spoke in support of Met Council Staff’s recommendation. Council member Toni Carter read a statement written and submitted by Council member Wendy Wulff since she was unable to attend the meeting (attached as Figure 7 to this Committee Report). Council member Lindstrom noted that conversations between the City and Met Council Staff will continue. In a motion by Met Council member Carter, seconded by Met Council member Lee, the Community Development Committee unanimously recommended approval of the proposed action at its meeting on April 21, 2025. Page 120 of 136 3 M e t r o p o l i t a n C o u n c i l Business Item Business Item Community Development Committee Committee Meeting Date: April 21, 2025 For the Metropolitan Council: May 14, 2025 Business Item: 2025-88 City of Farmington: Farmington Technology Park Comprehensive Plan Amendment, Review File 22086 -7 District(s), Member(s): District 16, Wendy Wulff Policy/Legal Reference: Metropolitan Land Planning Act (Minn. Stat. § 473.175) Staff Prepared/Presented: Patrick Boylan, AICP, Planning Analyst (651-602-1438) Angela R. Torres, Senior Manager (651-602-1566) Division/Department: Community Development / Regional Planning Proposed Action That the Metropolitan Council adopt the attached Review Record and take the following actions: 1. Authorize the City to place its comprehensive plan amendment into effect. 2. Find that the amendment does not change the City’s forecasts. 3. Strongly advise the City that: a. Because of the potential volume and chemical characteristics of wastewater from this site, the Council is concerned about a potential wastewater system impact. Therefore, the Council advises the City to consider the full extent of the advisory comments in the Review Record for wastewater. b. Because of the volume of projected water use identified for this site, the Council is concerned about the potential water demand tradeoff between this immediate industrial use versus the population future growth of the City. Therefore, the Council advises the City to consider the full extent of advisory comments in the Review Record for water supply. 4. Advise the City: a. That its Plan remains inconsistent with Council housing policy, and it may not draw down funds awarded via Livable Communities Act (LCA) programs b. To implement the advisory comments in the Review Record for forecasts. Background The City of Farmington submitted the Farmington Technology Park comprehensive plan amendment on November 20, 2024. The amendment proposes to reguide 344.54 acres from Commercial, Low to Low/Med Density Residential, Medium Density Residential, Park/Open Space, and Non-Designated to Mixed Use (Commercial/Industrial). The amendment site is located in southeast Farmington, south of 220th Street West and west of Biscayne Avenue. This is the City’s sixth amendment to its 2040 Comprehensive Plan. Rationale The proposed amendment conforms to regional system plans, is consistent with Council policies, and is compatible with the plans of other local communities and school districts . Page 121 of 136 4 M e t r o p o l i t a n C o u n c i l Thrive Lens Analysis On February 12, 2025, the Council adopted Imagine 2050, which builds on policy direction in Thrive MSP 2040. Under the Thrive lens the proposed amendment is reviewed against the land use policies in Thrive MSP 2040. To achieve the outcomes identified in Thrive, the metropolitan development guide defines the Land Use Policy for the region and includes strategies for local governments and the Council to implement. These policies and strategies are interrelated and, taken together, serve to achieve the outcomes identified in Thrive. Funding None. Page 122 of 136 5 M e t r o p o l i t a n C o u n c i l REVIEW RECORD City of Farmington Farmington Technology Park Comprehensive Plan Amendment Review File No. 22086-7, Business Item No. 2025-88 BACKGROUND The City of Farmington (City) is located in central Dakota County, bordered by Lakeville to the north and west, Empire Township to the east, and Castle Rock Township and Eureka Township to the south. Thrive MSP 2040 (Thrive) designates Farmington with an “Emerging Suburban Edge” community designation. The Council forecasts from 2020 to 2040 that the City will grow from 24,300 to 32,500 people and 8,500 to 11,800 households. The Council also forecasts that between 2020 and 2040, the City’s employment will increase from 5,600 to 6,800 jobs. The Metropolitan Council reviewed the City of Farmington’s 2040 Comprehensive Plan (Business Item 2019-322 JT, Review File No. 22086-1) on December 11, 2019. This is the fourth comprehensive plan amendment since the 2040 Plan was reviewed. REQUEST SUMMARY The amendment proposes to reguide 344.54 acres from Commercial, Low to Low/Med Density Residential, Medium Density Residential, Park/Open Space, and Non-Designated to Mixed Use (Commercial/Industrial). The site is located in the southeast portion of Farmington. The purpose of the amendment is to facilitate the development of a Technology Park/Data Center campus. The amendment site is located in southeast Farmington, south of 220th Street West and west of Biscayne Avenue. OVERVIEW Conformance with Regional Systems The amendment conforms to the Regional System Plans for Parks, Transportation (including Aviation), and Wastewater, with no substantial impact on, or departure from, these plans. Consistency with Council Policies The amendment is consistent with the Thrive MSP 2040, with the Housing Policy Plan, with water resources management, and is consistent with Council forecasts. Compatibility with Plans of Adjacent Jurisdictions The amendment will not have an impact on adjacent communities, school districts, or watershed districts, and is compatible with the plans of those districts. PREVIOUS COUNCIL ACTIONS • The Council acted on the 2040 Plan on December 11, 2019 (Business Item 2019-322 JT, Review File No. 22086-1). • The Christensen amendment was administratively approved by the Council on July 20, 2020 (Review File No. 22086-2). The amendment revised the Metropolitan Urban Service Area (MUSA) and Development Staging Plans in the City’s 2040 Comprehensive Plan for a 40-acre parcel located at 20861 Flagstaff Avenue. The purpose of the amendment was to place the subject property into the 2020 MUSA immediately to allow the development of 113 single family homes. • The Dakota Meadows amendment was approved by the Council on July 28, 2021 (Business Item 2021-182, Review File No. 22086-3). The amendment reguided 41 acres from Medium Page 123 of 136 6 M e t r o p o l i t a n C o u n c i l Density Residential and Park/Open Space to Low Medium Density Residential located at the southeast corner of Denmark Avenue and County Road 74. The purpose of the amendment was to accommodate 110 single-family homes and a 2-acre park. • The River’s Edge Townhomes amendment was approved by the Council on August 11, 2021 (Business Item 2021-198, Review File No. 22086-4). The amendment reguided 26 acres of a 68-acre parcel from High Density Residential to Medium Density Residential located at the northwest intersection of Denmark Avenue and 220th Street West. The amendment also adjusted the anticipated development staging in the City’s 2040 Comprehensive Plan to include the entire 68-acre parcel in the 2021-2030 decade. The parcel was previously staged for development after 2040. The purpose of the amendment was to accommodate 276 townhome units. • The Vita Attiva Development amendment was approved by the Council on August 25, 2021 (Business Item 2021-212, Review File No. 22086-5). The amendment reguided 80.16 acres from Mixed Use (Commercial/Residential), High Density Residential, Medium Density Residential, and Park/Open Space to Low Medium Density Residential and Medium Density Residential. The purpose of the amendment was to accommodate the development of 141 single family lots and 6 lots for 8-unit multifamily structures, a total of 189 units. The site included 26.8 acres of park and open space. • On October 18, 2024, the Council provided land use, water supply, and wastewater comments for the City’s Final Alternative Urban Areawide Review (AUAR) for Farmington Technology Park (Review File no. 22985-3). ISSUES I. Does the amendment conform to the regional system plans? II. Is the amendment consistent with Thrive MSP 2040 and other Council policies? III. Does the amendment change the City’s forecasts? IV. Is the amendment compatible with the plans of adjacent local governmental units and affected jurisdictions? ISSUES ANALYSIS AND FINDINGS Conformance with Regional Systems The amendment conforms to the regional system plan for Regional Parks, Transportation, and Wastewater, with no substantial impact on, or departure from, these system plans. Additional review comments are included below. Wastewater Service Reviewer: John Chlebeck, Environmental Services (ES) – Wastewater Planning and Community Programs (651-602-4527)) The proposed amendment conforms to the 2040 Water Resources Policy Plan (WRPP). The amendment proposes to expand the Metropolitan Urban Service Area (MUSA) by 159 acres and to re-guide the land uses from commercial, residential, open space, and non-designated land to Mixed Use (Commercial/Industrial). The purpose of the amendment is to facilitate the construction of a data center. The Farmington Technology Park Alternative Urban Area-wide Review (AUAR), dated October 2024, indicated a range of peak wastewater generation rate of 0.9 – 2.35 MGD for the development. It is understood that a significant amount of the wastewater from the development would be cooling water discharge for the proposed data center. The Farmington East Serviceability Analysis that is attached to the comprehensive plan amendment indicates that wastewater would be collected via a city-owned trunk sewer along Biscayne Avenue, routing wastewater north to the Metropolitan Council regional interceptor sewer that is located on the north side of the Vermilion Page 124 of 136 7 M e t r o p o l i t a n C o u n c i l River near Biscayne Avenue (Interceptor 7103-1). The proposed data center will be required to obtain an Industrial Discharge Permit, at which time specific wastewater quality and quantity will need to be evaluated for impacts to system capacity, wastewater treatment processes, and wastewater effluent permitting. Depending on actual peak flows and wastewater constituents, additional mitigation may be required, such as pre-treatment, attenuation through wastewater storage, or an alternative surface water or ground infiltration discharge. In addition, the Metropolitan Council’s Waste Discharge Rules prohibit non-contact cooling water from being discharged to the sanitary sewer system, unless it is demonstrated that there is no effective and practical alternative. The City and developers are encouraged to contact the Council’s Industrial Waste and Pollution Prevention group to request a review of proposed cooling water discharges to better understand requirements of a specific project, prior to sizing and investing in sewer infrastructure to serve the development. For more information, please contact Kristi Goble at kristi.goble@metc.state.mn.us or at 651-602-8114. Advisory Comments Because of the potential volume and chemical characteristics of wastewater from this site, Council Staff is concerned about a potential system impact. The City will need to demonstrate that there is no effective and practical alternative to sanitary sewer discharge for cooling water and the Council will need more information about the characteristics of the wastewater to look at potential process impacts. Metropolitan Council Waste Discharge Rules, by which industrial discharges to the regional wastewater system are regulated, give the Council the power to prevent wastewater from entering our system that doesn’t meet regional rules or presents a potential h arm to our system or our effluent permitting for our treatment plant. The Council will need to have the potential impacts to our system evaluated; this process may take several months to complete and requires that the Council hire specialized engineering consultants. As of today, this is challenging as the Council does not have any data on the potential tenant of a future development that could be built within the land use being guided by this future land use amendment. Council Staff is presently working with a consultant to evaluate plant impacts from a range of hypothetical data center flows. That work is expected to be completed later this spring, and we are hopeful it will help identify what the regional system limits are in accepting this type of water. If additional data centers are built in this sanitary sewer service area, Staff will also need to look at the cumulative effects. The land use change in of itself is not an impact to the regional wastewater system. However, the volume and chemical characteristics of potential wastewater from certain types of future development in this area could create a system impact. Council staff is committed to working with the City to determine its ability to provide service before local municipal investment in infrastructure is made. Consistency with Council Policy The amendment is consistent with Council policies for forecasts, land use, and surface water. Additional review comments are detailed below. Forecasts Reviewer: Todd Graham, CD – Research (651-602-1322) The City's submittal included a drawing that contemplated up to 12 data center buildings and two smaller administration buildings, with a combined floorspace of 2,534,000 sq ft. City staff expect permanent employment will be in the range of 250 – 300 jobs. This employment impact fits within the current, approved forecast for Farmington. No forecast adjustment is needed at this time. Advisory Comments This site is part of Met Council’s Transportation Analysis Zone #711. Met Council’s database lists Page 125 of 136 8 M e t r o p o l i t a n C o u n c i l TAZ #711 adding no households, no population, and +123 jobs during 2020-40. City and Council staff can reassess expectations during preparation of the City’s 2050 local comprehensive plan. No forecast adjustment is needed at this time. Table 1. Metropolitan Council City of Farmington Forecasts Census 2020 Current Approved Forecast Category 2020 2030 2040 Population 23,632 24,300 28,300 32,500 Households 7,906 8,500 10,100 11,800 Employment 4,431 5,600 6,200 6,800 Thrive MSP 2040 and Land Use Reviewer: Patrick Boylan, CD – Local Planning Assistance (651-602-1438) The proposed future land use change is consistent with Thrive MSP 2040 policy for land use. Thrive identifies the City as an Emerging Suburban Edge Community. Emerging Suburban Edge communities include cities, townships, and portions of both that are in the early stages of transitioning into urbanized levels of development. Emerging Suburban Edge communities are expected to plan for forecasted population and household growth at average densities of at least 3 - 5 units per acre for new development and redevelopment. The amendment proposes to re-guide 23 acres of land currently designated as Commercial, 98 acres of Low/Med Density Residential, 38 acres of Park/Open Space, and 185.5 acres as “Non- Designated” to the new designation category of Mixed Use (Commercial/Industrial). The subject site totals 344.54 acres in size and is located generally in southeast Farmington (see Figure 2). The purpose of the amendment is to facilitate the development of a Technology Park/Data Center campus. The 185.5 acres of “Non-Designated” area included in the amendment are the result of recent annexation. These acres are part of a much larger 2017 Orderly Annexation Agreement (OAA) area between the City of Farmington and Castle Rock Township. A petition o f the property owner was filed with the Office of Administrative Hearings (OAH) on April 19, 2024, and is supported by Farmington City Council Resolution 2024-30. Administrative Law Judge Jessica A. Palmer-Denig signed OAH-71-39981 on April 24, 2024. This executed annexation brings those acres into the city boundaries and requires the identification of land uses in the City’s comprehensive plan. This amendment accommodates that requirement. The Plan, with previous amendments, has a planned minimum residential density of 3.08 units per acre. Within the project site, 98 acres of Low/Medium Density Residential uses are proposed to be changed to Mixed Use (Commercial Industrial). With this reduction in residential acres, the expected residential density drops to 3.05 units per acre (Table 2 with changes underlined). With this change, the Plan remains consistent with the required minimum density expectations for Emerging Suburban Edge communities. Page 126 of 136 9 M e t r o p o l i t a n C o u n c i l Table 2. Planned Residential Density 2020-2040 Change Density Net Acres Min Units Max Units Category Min Max Low Density Residential 1 3.5 590.73 591 2,068 Low/Medium Density Residential 3.5 6 274.63 961 1,648 Medium Density Residential 6 12 305.01 1,830 3,660 High Density Residential 12 40 12.63 152 505 Mixed Use 6 40 25.30 152 1,012 TOTALS 1,208.30 3,685 8,992 Overall Density 3.05 7.4 Housing Reviewer: Olivia Boerschinger, CD – Housing (651-602-1327) With the proposed amendment, the Plan remains inconsistent with the Council’s Housing Policy Plan (HPP). The proposed amendment does not change the City’s inventory of guided to support the development of low- and moderate-income housing, however the City has been inconsistent since July 2021, as noted in the staff report for the Vita Attiva Development amendment (Review File 22086-5). As of this amendment, the Plan will be guiding approximately 85 acres of higher density residential land such that at least 441 units could be built (Figure 4). To facilitate land for the development of affordable housing within the drafting of the 2040 Plan, the City chose to guide land following Option 2 outlined in the HPP: land guided at a minimum of 6 units/acre to support households earning 51-80% AMI, and sufficient land guided at 12 units/acre to support households earning less than 50% AMI. The Plan does not currently provide sufficient land to address its share of the region’s 2021-2030 need for affordable housing for 50% of AMI and below, which is 317 units. Communities found inconsistent with the Council’s Housing Policy Plan may not draw down funds awarded via Livable Communities Act (LCA) programs. Farmington is a current participant in LCA, but has no current outstanding awards to draw down. Water Supply Reviewer: Jen Kostrzewski, Environmental Services (ES) – Water Resources (651-602-1078); The supplemental content of strategies that the City submitted as part of its amendment materials to increase water conservation and efficiencies makes the City's comprehensive plan amendment consistent with 2040 Water Resources Policy Plan policies related to sustainable water supplies. Advisory Comments This amendment prepares the City for an industrial high-volume water user, the exact end user is unknown at this time. This concerns Council Staff because without specific end user and measurable water use, Staff cannot provide the City with more detailed, industry-specific concerns about water demands. The City has agreed to implement a list of strategies to compensate for this additional water demand at the encouragement of the Council, however, Council staff still have concerns that these actions will not completely cover the projected new demand and that the City or future end user will need to seek additional water supplies. The primary concern is the potential water demand tradeoff between this immediate industrial use versus the future growth of the City. As shown in Table 1 of the forecast section of this report, the 2020 Census shows that the City’s population was 23,632 and that the Council has forecasted the City to have 32,500 people (an increase of 8,868 people from 2020 levels) in the year 2040. This expected growth will require a water supply to support it. In the Farming Technology Park AUAR, the City identified a range of peak water demand increase of 382,000 - 2.35 million gallons per day depending on the type of technology to be employed at Page 127 of 136 10 M e t r o p o l i t a n C o u n c i l this site. Even at the lower estimate, this amount of water use would supply nearly 5,500 new residents (assuming 70 gallons of water per capita). This does not mean that the City would not have options to gain additional water supplies, but most likely indicates that the City or future user will have to work with the regulator to find a solution. The Minnesota Department of Natural Resources (DNR) is responsible for making decisions about any future water appropriations needed to support this new use. The DNR has clearly stated that an approved Local Water Supply Plan does not guarantee that the City will be allocated the planned amounts. To be conservative, Council staff recommend the City consider a future with no or limited additional water allocations as what was outlined in the City’s Local Water Supply Plan which was approved by the DNR on November 25, 2020. As this project proceeds, we would strongly encourage the City to work with the DNR through the water appropriation and local water supply plan approval processes as well as connecting back with Met Council planning staff as the City learns more about their water needs to ensure the project does not impact the City’s ability to accommodate forecasted growth. Compatibility with Plans of Adjacent Governmental Units and Plans of Affected Special Districts and School Districts Castle Rock Township consulting attorney expressed concern with the proposed amendment regarding the execution and provision of the Orderly Annexation Agreement. ATTACHMENTS Figure 1: Location Map Showing Regional Systems Figure 2: Location Map Showing Community Designations Figure 3: Current and Proposed Land Use Guiding Figure 4: Land Guided for Affordable Housing Figure 5: Letter from Dakota County Regional Chamber of Commerce Figure 6: Letter from Dakota Electric Figure 7: Written Statement from Councilmember Wendy Wulff Page 128 of 136 11 M e t r o p o l i t a n C o u n c i l Figure 1. Location Map Showing Regional Systems Page 129 of 136 12 M e t r o p o l i t a n C o u n c i l Figure 2. Location Map Showing Community Designations Page 130 of 136 13 M e t r o p o l i t a n C o u n c i l Figure 3. Current and Proposed Land Use Guiding Page 131 of 136 14 M e t r o p o l i t a n C o u n c i l Figure 4. Land Guided for Affordable Housing Page 132 of 136 15 M e t r o p o l i t a n C o u n c i l Figure 5. Letter from Dakota County Regional Chamber of Commerce Page 133 of 136 16 M e t r o p o l i t a n C o u n c i l Page 134 of 136 17 M e t r o p o l i t a n C o u n c i l Figure 6. Letter from Dakota Electric Association Page 135 of 136 18 M e t r o p o l i t a n C o u n c i l Figure 7. Written Statement from Councilmember Wendy Wulff Page 136 of 136