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04-12-2004 EDA MINMEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER HIGH SCHOOL LITTLE THEATRE MONDAY, APRIL 12, 2004 Members Present: President Gongoll, Commissioners Koenig, Kuester, Tveite (arrived at 5:34 p.m.~, Motin, Dwyer, and Klinzing Members Absent: None Staff Present: Director of Economic Development Catherine Mehelich, Assistant Director of Economic Development Heidi Steinmetz, City Administrator Pat Klaers, and City Clerk Joan Schmidt 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. Consider Agenda MOVED BY COMMISSIONER KLINZING AND SECONDED BY COMMISSIONER KOENIG TO APPROVE THE APRIL 12, 2004 EDA AGENDA AS PRESENTED. MOTION CARRIED 6-0 (Tveite absent). 3. Consider Consent Agenda MOVED BY COMMISSIONER KUESTER AND SECONDED BY COMMISSIONER DWYER TO APPROVE THE FOLLOWING CONSENT AGENDA ITEMS: 3.1. MARCH 8, 2004 REGULAR MEETING MINUTES 3.2 CHECK REGISTER 3.3 BALANCE SHEET FOR FEBRUARY 2004 3.4 REVENUE/EXPENDITURE REPORT FOR FEBRUARY 2004 3.5 BALANCE SHEET FOR MARCH 2004 3.6 REVENUE/EXPENDITURE REPORT FOR MARCH 2004 MOTION CARRIED 6-0 (Tveite absent) 4. Open Mike No one appeared for open mike. 5. Strateeic Industrial Marketing Activities Report Economic Development Authority Minutes Page 2 April 12, 2003 Commission Tveite arrived. Assistant Director of Economic Development Heidi Steinmetz presented the staff report, giving highlights of the marketing report. 5.1 Labor Market Presentation from Cameron Macht MN De t. of Em to ment & Economic Development Director of Economic Development Catherine Mehelich introduced Cameron Macht, Regional Labor Analysis with MN Department of Employment & Economic Development, who presented his findings in regards to statistical labor market information comparing Sherburne County and the City of Elk River with other areas. Some of his findings: • Elk River has an educated, affordable, growing workforce. • Businesses will pay more for higher quality workers, but would rather have equivalently skilled workers at lower wages. • Sherburne County is the 12`h largest in the state, at population of 74,667. • Elk River is the largest city in the county, at 18,055 people. • Residents in the 25-44 year-old age group (prime working years) expanded 51.5 percent in Sherburne County and 40.7 percent in Elk River; only 3.6 percem in Minnesota. • Sherburne County is projected to be the second fastest growing county in the state (behind Scott County). • The fastest growing population portions are from 50 years and over. • The number of residents both living and working in Elk River was 2,826. Otsego sent 570 workers to Elk River; Big Lake Township sent 520 workers; Ramsey sent 329 workers; and Livonia sent 321. • Workers are willing to ask $1.73 less per hour to drop below half-hour commutes. • Central Minnesota continues to grow -the City of Elk River added 682 net new jobs from Quarter 1 of 2001 to Quarter 1 of 2003. • Elk River has total jobs in industries of 10,070 with Elk River adding the most jobs in Central Minnesota (+682 jobs). • Central Minnesota is projected to be the fastest growing region in MN between Years 2000 and 2010. Manufacturing specialists are holding steady or declining slightly with growth in the areas of eating/drinking establishments, schools, hospitals, recreational services, and grocery stores. President Gongoll asked if any company can request information from Mr. Macht as a source. Mr. Macht said that they can either go through the city's staff or obtain the information directly from him. Commissioner Klinzing asked if staff has been analyzing this information. Ms. Mehelich stated that staff has been using this information for the city's marketing campaign. Economic Development Authority Minutes April 12, 2003 Page 3 Commissioner Motin stated that industrial and manufacturing are decreasing and asked if we should still be pursuing light industrial companies. Mr. Marht stated that manufacturing will see growth and that Elk River has access to Highways 94, 10 and 169, plus we'll see a growing workforce moving out of the Twin Cities into this area. Ms. Steinmetz stated that staff watches Deed's monthly Labor Force Data Update and analyzes this type of information. 6. Business Incubator Update Ms. Steinmetz reviewed the staff report. Consider Tax Rebate Financin Re uest for Bad er Ventures LLC Gradient Technology Incl Director of Economic Development Catherine Mehelich reported that at its March 8, 2004, meeting the EDA and later the City Council approved the Revised Preliminary Expansion Siting Proposal for Gradient Technology. She stated that Mr. Eric Haehn, Vice President/CFO of Gradient Technology, was present and is asking to be considered for receiving Tax Rebate (Abatement) Financing. Gradient Technology demilitarizes munitions for the military and is currently leasing space in Blaine. They have been looking for the past 18 months for a new location to expand their operation. They employ 13 full-time staff, with 7 based in Minnesota, paying ahigh-end hourly wage. They anticipate creating up to 5 new positions at the Minnesota facility within two-years. Badger Ventures, LLC proposes to construct a 13,000 square foot light industrial/business park building for leasing to Gradient Technology. At this time they proposes to purchase 2.05 acres within the Elk River Business Park and has requested both the city and county participation in writing down the land cost to $0 through apay-as-you-go, tax abatement note to the limited liability company. Sherburne County Assessor's office has provided an estimated market value of the proposed building project at $717,000. The MN Tax Abatement Statute allows jurisdictions to provide tax abatement over a 10-year period, unless other exceptions are met. Ms. Mehelich reported that the following issues remain unresolved at this time: Identification of a bank lender and proposed project financing terms The possibility of a City Micro Loan request of up to $100,000 Identification of the amount and source of eligible equity Completion and review of a but for analysis. Staff does not have a recommendation at this time for the EDA. She stated that there would be a 30-day period before the issues could be resolved. Economic Development Authority Minutes April 12, 2003 Page 4 Commissioner Motin stated that it appears that the EDA will need to look at this issue again. Ms. Mehelich suggested the Finance Committee look at the potential Micro Loan application. Commissioner Dwyer suggested having a special EDA meeting to consider approval if necessary earlier. Ms. Mehelich stated that she did not think that Gradient Technology would apply for the Micro Loan. Commissioner Tveite feels the EDA should review the application prior to council and asked about the timeframe. He felt completing everything in 4 weeks could be difficult. Gradient Technology Vice President/CFO Eric Haehn stated that he would be hearing from two banks at the end of this week. He stated that they need to begin construction in May if they are going to do this project this year. Commissioner Tveite asked how long it would take for completion of the but-for analysis. Ms. Mehelich estimated that it could be done in approximately 24 hours. Commission Klinzing asked if the company is asking for tax abatement from the County. Ms. Mehelich stated that the company hasn't received an application as of yet. She stated that the County Board would have to hold a public hearing also. She suggested that the EDA meet again to expedite this process but she has concerns with the County's lack of response on the issue. Ms. Mehelich stated that the County's process on Tax Rebate Financing is a review by the Sherburne County Economic Development Alliance for recommendation to the County Board. Upon the recommendation they would publish a public hearing notice for the Sherburne County Board of Commissioners, which does require a 10-day publication period before they can hold the public hearing. So without receiving the application it will delay the process. The County's approval is also contingent upon the City's approval. 8. Other Business There was no other business. Adjournment The meeting of the Elk River Economic Development Authority adjourned at 6:29 p.m. m.~r~ Joan Schmidt City Clerk