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7. EDSR HANDOUT 12-13-2010I~~~n .ot ;lk River TO: FROM: DATE: SUBJECT: MEMORANDUM Economic Development Authority Housing & Redevelopment Authority Catherine Mehelich, Director of Economic Development~~~ December 13, 2010 EDA/HRA Executive Director's Report The purpose of this periodic memorandum is to keep the EDA and HRA informed of various ongoing activities that often go on behind the scenes in the Economic Development Division. EDA and HRA Coxmnissioners should feel free to bring up any questions or issues fox discussion under the "Other Business" section of the Agenda. Foreclosure Initiatives The strategies to address foreclosures in Elk River are 3-fold - 1) Prevention 2) Preserve & Secure and 3) Recovery. Due to a fall through on the last application, a small amount of funds remain available before officially closing out the program. Roughly $9,000 remains available from the federally funded Neighborhood Stabilization Program giant and staff has been communicating its availability to the xealtor community fox use on eligible down payment assistance applications for the purchase of a foreclosed home in one of Elk River's target neighborhoods. To date 11 households were provided down payment assistance ranging fiom $5,000 to $14,999 (not including matching sources) as a result of the City's NSP program. The neighborhoods assisted uicluded 5 homes in Elk River Station, 5 in Trott Brook and 1 in Heritage Landing. Staff has been conducting several outreach presentations with various community groups regarding the City's strategies in addressing foreclosures as well as communicating resources available through partner agencies like the MN Homeownership Centex and HOME Line. Staff also continues to collect foreclosure data from the county and share information with various city departments to monitor these neighborhoods and prevent issues arising fiom vacant homes. This interdepartmental communication will be more important going into the winter season to prevent water damage in foreclosed homes. I~~I~~I C~ ~= ~ EDNHRA Executive Director's Report December 13, 2010 Pale 2 of 4 Business Retention/Expansion Visits Over the past year staff has made multiple contacts with the manufacturing businesses and continues to schedule visits with EDA Cormnissioners when possible. The only visit by Cotrunissionexs and/ox staff since the October report was with NIFR Metals. Staff has partnered with Elk River Municipal Utilities to also attend BRE visits to discuss rebate programs and any service concerns. In addition, staff maintains a relationship with the retail/service businesses by attending the Chamber's Juice Up Your Mornuigs program. EDA Micro Loans Staff continues to monitor the following micro loans which the EDA received update on at its August meeting -Roma Tool, Ethanol Technologies of MN, and Waterfall Salon. Staff received notice from the MN Dept of Employment & Economic Development of they: intent to "close out" the balance due the state on the 1986 Roma Tool loan, of which the City was responsible fox administering. Staff is also working with Promo Products, LLC to close on their recently approved micro loan for the purchase and remodel of an existing vacant manufacturing facility in the Elk River Industrial Paxk. In addition to amendments to the Micro Loan Program, staff is drafting guidelines for energy efficiency improvement loans that can be offered for C/I buildings in Elk River. The amendments will be reviewed by the Finance Conunittee fox recormnendation and final approval by the EDA in the next few months. Marketing Activities The primary marketing strategy is relationship building with the business and development community, including sponsorship, speaking engagements and participation in wade shows and conferences. The goal is to have a stronger image and presence with metro-area developer/broker community. This is also accomplished by building relationships with the development community with face-to-face meetings and attending developer/broker workshops and conferences. Staff recently participated in the following events -MNCAR Expo, EDAM's `Social Media' workshop, MN Real Estate Journal's `Industrial Park Update', Sensible Land Use Coalition, and Enterprise MN's `Green Lean Equals Business Growth'. Coxmnexcial/Industrial Sites In 2009 staff converted the in-house prepared listings to a direct link to the MeuoMSP website www.metromsp.org. Most recently staff has added LoopNet and Costar to the EDA webpage fox site searches. Staff also subscribes to the MN Cornmexcial Association of Realtors (MNCAR) which provides email blasts on prospects. Recent Inquiries/ProsRects Most prospects, through the MNCAR system, have been focused on searches for existing buildings, including restaurants, rather than new construction. Staff has been working with the State DEED office since August on a proposal fox a large light industrial prospect as part of a multi-state search. A site selection decision by the company is anticipated Spring/Summer 2011. No additional information can be shared at this time. Staff is following up with a few prospective developers/businesses from the MNCAR Expo as well as scheduling meetings with developers to discuss opportunities fox the Gateway Business Park. N:\Departments\Community Development\Economic Development\EDA to move\Agenda\Year2010\Exec Dir report 12.13.10.doc EDA/HRA Executive Director's Report December 13, 2010 Page 3 of 4 Business Updates New Businesses/Ownexships - Relocations/Expansions - Cymbet Corporation anticipates an announcement this week on an expansion of contract manufacturing with a semiconductor foundry located in Texas. The company indicated their intentions to maintain and grow Theo research & development and corporate offices in Elk River. Elk Rivet Axea Arts Alliance The E&~A has recently indicated interest in expanding their pxogxaxxuxung with a larger facility. ERAAA is currently exploring the acquisition of the First National Bank of Elk Ricer property. Staff will be attending a discussion about a regional arts center concept on December 14`''. Refnindex of New Temporary Funding Resources Attached is a copy of a recent press release intended to stimulate interest in the City's set- aside TIF program. In June 2010 the HRA and Council authorized setting aside approximately X100,000 of available tax increments from an existing TIF district to provide financing assistance that consists of new private new construction ox substantial renovation for one of the following uses: an outpatient medical clinic, Class I restaurant, green manufacturing ox other renewable energy facilities, ox general light industrial ox manufacturing. The legislation includes a condition that the project cotmnences before July 1, 2011. Staff has been monitoring potential opportunities as a result of 2010 State Stunulus-Jobs Law that added some flexibility to the use of Tax Increment Financing fox a limited period of tune in order to stunulate consruction and job creation. If Coimxussionexs have any ideas please contact staff to discuss. The Jobs Law included provisions to temporarily expand the use of TIF economic development districts fox any use (previously luxrited to manufacttuing), including retail, single family housing, market rate apartments, medical facilities and office buildings. This provision is also temporary fox projects that begin by July 1, 2011. The Jobs Law also created a temporary Compact Development TIF District that provides some greater flexibility than the traditional Redevelopment District and stringent blight standards. This authority to approve this tool expires June 30, 2012. Transit Improvement Axea Application In April staff submitted an application to DEED to designate the 2-mile radius of Northstar Commuter Rail Station and 171" Focused Axea as a Transit Improvement Axea. While no funding currently exists fox TIAs, the designation allows fox greater positioning fox future funding opportunities and marketing leverage. In tnid-November 2010 the Ciry received notice that its application was approved by DEED. This TIA designation provides the opportunity to apply fox loan fmancing for eligible projects in the TIA, if and when funding becomes available. In the interim the TIA designation provides a unique marketing advantage for the 171st Focused Axea. N:\Departments\Community Developmen[\Eeonomic Development\EDA to move\Agenda\Year2010\Esec Dir report 12.13.1Qdoc EDA/HRA Executive Director's Report December 13, 2010 Page 4 of 4 Housing Developments A few housing developments that staff has been working with over the past year just recently closed on financing ox commenced construction. Eaxliex this year Duffy Development received award from MN Housing Finance Agency fox tas credit financing of a 53-unit Elk River Station Apartments building located across from the Noxthstar Depot Station. Construction began Fall 2010 and is anticipated fox completion Stumnex 2011. Units will be rented out to household incomes at 60% of the median income fox the 11- county metro (535,220-$66,420). Staff has been working with Dominiuxn Development on a $7-million tax exempt housing revenue bond approved by die City this sufxunex to acquire and rehabilitate the existing 68- unit Dove Txee apartments located near Lions Paxk Centex. The developer will invest over $16,000 per unit in unprovements. Closing is occurred October 28`". As a result, the City received $69,003 in its Development Fund from fees to process the financing request. Renovations are anticipated to begin soon. Region 7W Comprehensive Economic Develo~lnent Stxategy~CEDS) Eaxliex this year staff and a few EDA, HRA Commissioners and the Mayor participated in public information meetings to develop economic development strategies for the Region 7W (Steams, Benton, Wright, Sherburne Counties). The CEDS analyzes the regional economy and serves as a guide fox establishing regional goals and objectives, deveing and implementing a regional plan of action, and identifying investment priorities and funding sources. A CEDS is required by the US Dept of Cofnmeree in order to access federal economic development giants fox infrastructure, disaster recovery and some stimulus funding programs. The CEDS plan was recently completed and submitted Fall 2010. Cofnmunities in the 4-county region axe now eligible to apply for Federal EDA/Depaxttnent of Commerce giants for public infrastructure projects d7at result in job creation (e.g. business park development). Staff continues to monitor the quarterly giant announcements fox applicable projects and applications. N:\Departments\Community Development\Economic Developmem\EDA to moveWgenda\Year2010\Exec Dir report 12.13.10.doc Elk River takes advantage of new legislation to drive development The Elk River leverages tax increment dollars to incentivize private development Media Contact: Catherine Mehelich- 763-635-1041 ELK RIVER, Minn. -The Elk River Housing and Redevelopment Authority (HRA) is out to boost local construction in the city next year. The agency is seeking proposals under a temporary incentive program enabled by a provision in the 2010 jobs Bill that allows cities to utilize their uncommitted tax increment financing (TIF) dollars to foster private construction or substantial rehabilitation in Elk River with the goals of growing employment and bolstering economic development. Currently, Elk River has at least $100,000 in uncommitted tax increment dollars that it can use by the end of 2011 toward providing grants, loans or subsidies to private companies forjob retention and growth plans or private business investment. Under this temporary law the City of Elk River's Housing Redevelopment Authority (HRA) intends to fund up to $100,000 for new construction or substantial rehabilitation projects. Projects can include Class 1 restaurants, outpatient medical facilities, green manufacturing or renewable energy facilities, and general light industrial or manufacturing. Elk River is located 35-miles northwest of the Twin Cities and in 1997 was designated as "Energy City" by the MN Environmental Initiative as a "host demonstration community for energy efficient and renewable energy technologies", making it a convenient location for green manufacturing and renewable energy facilities. Projects must commence construction byjuly 1, 2011 and result in the creation or retention of jobs. Cathy Mehelich, HRA Executive Director, said that the City hasn't received any specific proposals yet but is distributing the information to several developers to stir interest. Mehelich indicates "It may certainly be the difference between the project occurring now or never, and in Elk River." Selected projects will need approval by the HRA and Elk River City Council. Publicly funded land and buildings are not eligible. The new (temporary) law states the project can be completed anywhere within the City's boundaries, while the old (permanent) law requires the money to be spent within defined, pre-established TIF districts. The state flexibility provides cities an economic development tool to generate economic activity. City staff is exploring potential projects to stimulate job creation. Eligible project criteria can be obtained by contacting the Elk River Economic Development Division at City Hall 763-635-1 041 .