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09-10-2007 EDA MINMEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, SEPTEMBER 10, 2007 Members Present: President Gongoll, Commissioners Dwyer, Farber, Klinzing (5:35 p.m.), Motin, Tveite, and Zenvas Members Absent: None Staff Present: Ciry Administrator Lori Johnson, Community Development Director Scott Clark, Director of Economic Development Catherine Mehelich, Planning Manager Jeremy Barnhart, Assistant Director of Economic Development Heidi Steinmetz, and Recording Secretary Jessica Miller 1. Call Meeting To Order Pursuant to due call and notice thereof, the meeting of the Economic Development Authority was called to order at 5:30 p.m. by President Gongoll. 2. C'on~ider Aovenda YMCA levy resolution was added as item 4.1. MOVED BY COMMISSIONER DWYER AND SECONDED BY COMMISSIONER MOTIN TO APPROVE THE SEPTEMBER 10, 2007, EDA AGENDA AS AMENDED. MOTION CARRIED 6-0. 3. r'~~sider on n Aeenda MOVED BY COMMISSIONER FARBER AND SECONDED BY COMMISSIONER ZERWAS TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. AUGUST 13, 2007, REGULAR MEETING MINUTES 3.2. CHECK REGISTER 3.3. BALANCE SHEET 3.4. REVENUE/EXPENDITURE REPORT MOTION CARRIED 6-0. 4. poen Mike No one appeazed fox open mike. Commissioner Klinzing arrived. Economic Development Authorry Minu[es September 10, 2007 4.1. Page 2 City Administrator Lori Johnson explained that the resolution establishing the 2008 referendum tax levy for the YMCA must be considered by the Economic Development Authority due to a requirement ui the law. Ms. Johnson stated that the levy for taxes payable in 2008 for the purpose of funding the debt service on the $12 million bonds is $310,215. She stated that the city has been awarded the Shecbume County Legacy Grant which has reduced the amount of the bond levy. President Gongoll questioned if the bond levy for the YMCA will need to be considered by the EDA on an annual basis. Ms. Johnson stated that yes, the EDA will need to consider a bond levy resolution annually until the bonds are paid off. Commissioner Tveite questioned if the Legacy Grant is a one-time award. Ms. Johnson explained that the grant award was approximately $1,403,000, depending on the amount of cecycled material included in the YMCA project. She stated that the grant is proposed to reduce the levy by $250,000 for the first five years and by the remaining balance on the sixth year. MOVED BY COMMISSIONER DWYERAND SECONDED BY COMMISSIONER TVEITE TO ADOPT RESOLUTION 07-05 ESTABLISHING THE ?A08 REFERENDUM TAX LEVY AS APPROVED BY VOTERS FOR A RECREATIONAL FACILITY TO BE LEASED TO THE YMCA. MOTION CARRIED 7-0. 5. upd eon a eway_Rudn c enter Planning Manager Jeremy Barnhart presented his staff report Mr. Barnhart indicated that at the June 11 EDA meeting, staff was directed to contact the property owners to gauge their interest in selling to the city. He explained that during discussions with the three adjacent property owners, two of the property owners indicated they were interested in buying the city's land rather than selling their land and the third indicated he was negotiating a sale to one of the other property owners. Staff did not feel it was appropriate to enter into the middle of those discussions. Mx. Barnhart indicated that staff is requesting direction on how to proceed. Commissioner Farber stated that he would like to maintain flexibility on this project. Mr. Barnhart indicated that from a planning standpoint, the project is flexible but that certain aspects, such as utilities and access point ace more rigid. Commissioner Dwyer indicated that he is not opposed to selling the property to a private developer for highway commercial. Commissioner Motin stated that he does not want to see the property sold and that a possibility would be to work out a development agreement with the adjacent property owners. Commissioner Tveite indicated that he does not object to selling the property but would like to see a proposal from the prospective buyer first He would like that level of detail prior to entering into a sale. Economic Development Authority Minutes September 10, 2007 Page 3 President Gongoll concurred. He believes that we have an opportunity to deal with local developers and that everyone would come out ahead if the city could work with the adjacent property owners to get their ideas on what they would like to see on this property. Commissioner Klinzing agreed. She explained that it is imperative to settle who will own and control the property. She expressed concern on what the plans of the adjacent property owners may be and stated the city should take steps soon to ensure the adjacent owners are aware of what the city is envisioning in this area. Director of Economic Development Catherine Mehelich indicated that staff received a call from a company looking for approximately 30 acres to house a campus style office building for approximately 200 employees. Ms. Mehelich asked the EDA for direction on whether or not they would consider the Gateway area a suitable site to propose to the company. Commissioner Dwyer stated that staff should schedule a site visit with the prospect and put a proposal together. President Gongoll and Commissioner Klinzing concurred. Commissioner Morin indicated that he is not opposed to the idea but would like to reserve space for retail, commercial, and industrial. Commissioner Farber would like to get die input of the adjacent property owners on their ideas for the property. He stated that a paxmership between the adjacent property owners and the city must be established prior to making any promises to the prospective company. Commissioner Motin questioned if the city should consider a moratorium for this area to prevent an application from being submitted prior to an agreement being established with the adjoining property owners. Mr. Barnhart noted that a moratorium is at the discretion of the Council. Mr. Barnhart also noted that one of the property owners did say he would sell if the city had a project in mind. He stated that staff will take the comments of the EDA and continue discussions with the adjacent property owners and report back to the EDA. Commissioner Farber indicated that in this case a moratorium should not be considered as it would make potential users go away. 6. Di Re taurant Recruitment Assistant Director of Economic Development Heidi Steinmetz presented her staff report. Ms. Steinmetz stated that staff understands that the EDA wishes to attract more restaurants to Elk River and marketing is one component of restaurant recruitment. She stated that restaurants locate within communities based off certain market supported criteria and reviewed Houlihan's criteria as an example. Ms. Steinmetz explained that if the EDA wishes to focus on the marketing component of restaurant ercmitment, it is important that a restaurant marketing strategy is developed to ensure marketing funds and efforts are effectively uNized rather than on a "shotgun" approach. She reviewed key discussion points as outlined in her staff report. Commissioner Morn stated that staff has not taken any steps to contact restaurants. He indicated that he does not want staff to spend too much time on marketing restaurants but he would like to see continual discussions with developers regarding restaurants and possibly Economic Development Authority Ivtinutes September 10, 2007 Page 4 letters sent. Commissioner Farber concurred noting that he does not believe afull-blown restaurant strategy is necessary but that something should be done. Community Development Director Scott Clark stated that sending letters may not be an effective approach. He indicated that based on his experience and research restaurants aze inundated with these types of requests and that a comprehensive approach should be looked at if the EDA is serious about restaurant marketing. Commissioner Faxbex stated that staff should do what is necessary to recruit restaurants. He noted that he believes once a major restaurant comes that additional restaurants will follow. Ms. Steinmetz confirmed that the EDA is not interested in approving a marketing plan and that the approach they would like for staff to take is to cold call, send letters, and continue discussions with developers. The EDA affirmed this approach. She stated that staff would like a scope of the type of restaurant mazket the EDA is interested in. Commissioner Motin suggested surveying the public on what types of restaurants they would like to see. Ms. Steinmetz explained that staff has received results of a survey that a local developer conducted regarding the type of restaurants people would like to see in Elk River. Commissioner Tveite questioned if the city is interested in subsidizing a restaurant. He explained that major restaurant chains will not locate in Elk River unless we meet their demographic standards and that no effort, short of subsidizing, wdl bring them to Elk River. Commissioner Klinzing questioned what incentives restaurants would be looking fox Elk River to offer. Commissioner Dwyer explained that the restaurant business is a difficult one to make it in. He stated that the city's policy has been to not subsidize commercial and he believes that policy should be followed. Commissioner Zerwas stated that he would like to keep the options open. Ms. Steinmetz questioned if the EDA is interested in purchasing property and reserving it for restaurant development. She also questioned if the EDA is interested in hiring a restaurant broker. She explained that the broker would get the city's foot in the door because they have key contacts in the restaurant industry. President Gongoll stated that he is more interested in hiring a broker than purchasing land and holding it. Commissioner Tveite concurred. Ms. Steinmetz stated that staff will come back with a detailed proposal ut October from a restaurant broker. 5. ether Business There was no other business. Economic Development Authority Minutes September 10, 2007 6. Adioumment Page 5 There being no other business, President Gongoll adjourned the meeting of the Elk River Economic Development Authority adjourned at 6:30 p.m. Minutes prepared by Jessica Miller. l 1~5~~ . ~ Tina Allard Ciry Clerk