7.0. EDSR 01-09-2006ITEhI ~ 7.
ver
MEMORANDUM
TO: Economic Development Authority
FROM: Catherine Mehelich, Director of Economic Development~~
DATE: January 9, 2006
SUBJECT: Discuss 2006 Goals and Projects
Attachment
• 2004-2007 Economic Development Strategic Plan
Issue
Staff requests the EDA's feedback and direction on the priority goals and projects fox 2006. In
addition to the items indicated in the attached Economic Development Strategic Plan, following
is a preliminary list of goals and projects fox discussion:
• Market fox sale and development of remaining lots in Noxthstar Business Paxk to users
who will maximize the buildable area of the lots.
• Develop a strategy for the development of C7ateway Business Park (City Cargill property).
• Provide consistent communications to the public during the construction of the
MetroPlains Downtown Revitalization project and related projects downtown.
• Complete and implement redevelopment plan fox downtown area north of Highway 10.
• Review and amend City financing and subsidy policies (TIF, "1'RF, MicroLoan, Business
Subsidy).
• Review inventory of available industrial and commercial property. Identify desired uses
and priorities fox additional land.
• Host Developer's Forum fox input on city's development process.
• Utilize Marketing Coxnnuttee fox update of the Strategic Industrial Marketing Plan.
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INFORMATION
GREAT RIVER
ENERGY®
i /84S bast Highway 10 P.O. Box 800 Elk River, Minnesota 55330-0600 763-441-3121 Fax 763-241-2366 • www.GreatRiverEnergy.com
November 21, 2005
Stephanie Klinzing, Mayor
City of Elk River
13065 Orono Pkwy
Elk River, MN 55330
Dear Mayor Klinzing
Great River Energy has completed an extensive search for a new headquarters site.
Our board's facilities subcommittee followed a detailed process that used a number of
criteria to evaluate several locations.
After using these criteria to evaluate the sites, Great River Energy did not select the Elk
River Gateway site as the location for our new headquarters. We greatly appreciate all
of the information and follow up documentation the city of Elk River provided us during
this process.
Although we did not select Elk River as the site of our new headquarters, we are not
leaving the city. More than 100 employees will remain at our Elk River operations when
we move to our new headquarters in 2008. We currently are completing construction of
a $5.4 million warehouse/garage/office building and are developing plans for other
projects. We expect to invest millions of dollars in a new line construction building and
an equipment maintenance building at our Elk River site.
We appreciate your cooperation and support during this process and look forward to
working with you in the future. We also want to assure you that we will continue to take
our role as a corporate citizen of Elk River seriously.
If you have any questions, please contact me.
Sincerely,
GREAT RIVER ENERGY
e./I ~_
David Saggau
President and CEO
C: Catherine Mehelich -City of Eik River
Senator Mike Jungbauer
Mike Finley; Therese LaCanne; Kandace Olsen; Larry Schmid
A Touchstone Energy Cooperative
Momentum in the North Metro Industrial Market
Tenants beware -Landlord's market ahead
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In the summer of 2000, the U.S. manufacturing
industry and industrial real estate market went into a
tailspin. Over the course of the next three years, the
manufacturing sector lost three million jobs, and the
trade def tit continued to increase. Some jobs were
lost to foreign countries like China, Taiwan, India,
Mexico, and other developing nations that offered
cheap labor and long-term operating cost savings.
Many jobs were lost simply because factories were
closing the doors. The impact was felt in many ways
here in the U.S.-from higher unemployment rates to
lower prices for consumer products to a glut of empty
manufacturing space that left vacancy races rising.
After several years of increasing vacancy races and
virtually no new construction, the industrial market
is f pally gaining momentum. In 2004, the vacancy rate
began to decrease, and companies started to expand
again. As a result of that expansion, companies needed
affordable space fast. In the northwest metro alone
in [he past 24 months, there have been numerous
transactions that have absorbed more than two
million square feet of industrial space. Archway, Boston
$cientif c, Dane Industries, Data Recognition, Modern
Machine, Nparallel, Nonin Medical, Room and Board,
Stein Industries, Thorpe Distributing, and Zomax are
all examples of companies that have expanded to more
than 50,000 square feet or who have built new.
available two years ago. Now there is a need for new
product, so, for the first time in four years, speculative
construction is underway. The construction boom in
Asia, and higher fuel, petroleum, concrete and steel
prices continue to push the cos[ of construction
higher here at home, forcing developers to increase
nee rental rates. As construction costs continue to
rise, vacancy rates continue to fall, and companies
continue to absorb large blocks of space, rental rates
will continue to increase.
What's the bottom line? Existing quality, affordable
industrial space will be absorbed first in the coming
year. Tenants will be left with cheaper, less functional
facilities or newer, more expensive buildings to choose
from. If you're a tenant, the time to strike a deal is now.
If you're a developer, star[ building.
It s all a matter of supply and demand; cause and
effect. In recent years, new construction was non-
existent because vacancy rates were high (more than
20 percent)-there simply wasn't a need for new
construction. However; with the absorption race
rising fast, existing quality space is becoming scarce,
and companies no longer have [he options [hat were
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REJournals.com -Elk River welcomes new dowtown housing, industrial park activity Page 1 of 3
INFORMATION
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Tuesday November OS 2005
Elk River welcomes new dowtown housing,
industrial park activity
Don Jacobson Editor
Elk River, which to many Twin Cites residents delineates the border between
"suburban" and "rural" in the Northwest Metro, is chalking up gains on both the
industrial and urban redevelopment fronts.
preparation for a pair of new mixed-use buildings that are a key part of the
city's long-standing efforts to encourage economic revitalization there.
In October, demolition work began in historic downtown Elk River in
And on the industrial side, the first two land sales have been made and another
is pending for the Northstar Business Park, a 30-acre parcel owned by the city's
Economic Development Authority that will have direct access to a train station
along the planned Northstar Commuter Rail line.
In downtown Elk River, the wrecking ball is swinging to make room for The
Bluffs of Elk River, a 98,000 square foot retail-condominium building that will
feature 67 for-sale housing units and 11,000 square feet of retail space divisible
into eight individual storefronts.
The Bluffs will go up along the river at the intersection of Main Street and
County Road 42 (Parrish Avenue Northeast), which formerly was the site of
U.S. Bank branch and Nadeau's Laundromat.
Also getting underway downtown is a second building to be constructed in
downtown's Jackson Square. Located at Jackson and Main, Jackson Place will
act as the anchor of the city's revitalization effort. It's athree-story, 46,000
square foot mix of retail and rental apartments. The retail space measures
11,000 square feet and there will be 32 rental units in the floors above.
The developer of the downtown buildings is MetroPlains Development LLC, a St.
Paul-based real estate firm that specializes in, among other things, historical
building rehabilitation in rural communities across the Upper Midwest. The
developer says Elk River presented a perfect opportunity to do some new
construction that contributes to the historic look and feel of a real "Main
Street."
"We've been around for 27 years, and have done about 45 historic rehabs,"
says Rob McCready, MetroPlains' chief operating officer. "The common thread is
we do public-private partnerships with the communities we build in, with much
of the new housing being affordable. We help them address their development
needs."
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'"°. ar Nov. 22,
REJournals.com -Elk River welcomes new dowtown housing, industrial park activity Page 2 of 3
For instance, he says MetroPlains recently has been involved in historical would yo
rehabilitation projects in Winona (Washington Crossing, the former Winona advertise
Middle School buildings), and Albert Lea (the rehab of the former Lea Center Learn nod
Building into affordable and market-rate housing). The firm also is active in new
home construction geared toward affordability, such as the Heritage Green of
Cambridge project, which will have 149 single-family homes and 98 multifamily
units when completed.
McCready says MetroPlains will own and manage the rental housing portions of
the projects, while the retail areas will be owned and managed by project
partner FTK Properties. The developers are hoping the projects will be
completed and ready for move-in by the end of next year.
City officials are pinning a lot of hopes on the two new buildings. Elk River has
had various plans over the course of the last 30 years to jumpstart what had
become a stagnant Main Street. About four years ago the city launched another
effort, and this time it was able to overcome opposition from some residents
who favored the status quo, thanks to a strong development proposal that
included plenty of community input.
"I think that obviously that any type of new building in downtown will have an
impetus on other types of redevelopment," says Elk River Community
Development Director Scott Clark. "There's really two kinds of redevelopment:
city-initiated and private sector-initiated. The redevelopment here has been
under the arm of the Housing and Redevelopment Authority and the City
Council. But when people see the reality of those new buildings, we'll end up
seeing more private investment."
Also part of the plan is a new city park that will link the Jackson Square area to
the Mississippi, to be called River's Edge Commons. It's part of an effort to
renew downtown Elk River in such a way that will allow it to "turn its face to the
river." Also among the plans is a riverwalk for the area behind the Bluffs
building.
Meanwhile, on the other side of town, Elk River's attempts to capitalize on the
coming of the Northstar Commuter Rail is bearing fruit at its Northstar Business
Park located just south of the intersection of Highways 10 and 169.
Three businesses have announced their intentions of moving to the park, which
will be within walking distance of a planned commuter train station. They
include Medical Extrusion Technologies Inc., which recently held a
groundbreaking ceremony for 20,000 square foot facility on 2.64 acres and is
expected to create 23 jobs; Alliance Machine Inc., with an 18,000 square foot
facility on 2.84 acres; and Crystal Distribution Inc., which will build a 30,000
square foot facility on 3.7 acres.
Another business, Classic Acrylics Inc., is building a 20,000 square foot facility
on 2.48 acres in the nearby, privately-owned Elk River Business Park.
"One of the positive things about Elk River, as it says on our welcome signs,
we're really where the city ends and the country begins," says Clark. "We're
almost part of outstate Minnesota. So one of the advantages from a housing
standpoint is you can find any kind of housing that your employees might want,
from 'old small town' to suburban to large lot development.
http://www.mrej.com/story.cfin?Market=MN&StoryID=13822 11 /22/2005
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