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5. EDSR 09-11-2006ITEM / 5. vet MEMORANDUM TO: Economic Development Authority CC: EDA Marketing Committee FROM: Catherine Mehelich, Director of Economic Developmentl~ DATE: September I I, 2006 SUBJECT: Consider Adoption of 2007-2009 Strategic Industrial Marketing Plan Attachments • Strategic Industrial Marketing Plan, September 11, 2006. Background The Strategic Industrial Marketing Plan provides a framework fox the EDA to work within and focuses staff energies on those priority areas important to generate successful results from the marketing efforts. The first Strategic Industrial Marketing Plan was the 2000-2002 Plan, developed by Duckor & Associates, the EDA Marketing Committee and Economic Development staff. To serve as an update to the Plan, the 2000-2002 Assessment and 2002- 2004 Action Plan was also developed by Duckor & Associates the EDA Marketing Committee and Economic Development staff. In January, an update of the plan was identified by the EDA as one of its priority goals and projects for 2006. In June the EDA approved the Marketing Committee's recotnmendation to contract with Wolf Marketing & Media for the assessment and update of the EDA's Strategic Industrial Marketing Plan. The Marketing Committee met twice to discuss expectations fox the plan, provide input on the research information, and direction on the revised strategic objectives for the 2007-2009 Plan, as summarized in the meeting minutes (Exhibit A & B of the Plan). Summary of the 2007-2009 Action Plan Based on the xeseareh and feedback from the Marketing Committee, the following revised strategic objectives axe proposed fox 2007-2009: • Continue to position Elk River as "The Light Industrial Hub of the Northwest Metro" • Attract industrial development projects that have quality employment base and significant market value. • Drive the acquisition and marketing of additional land for industrial development Consider Adoption of 2007-2007 Strategic Industrial Marketing Plan EDA Meeting September 11, 2006 Page 2 of 2 To accomplish these objectives, the following specific marketing strategies for 2007-2009 are recotmnended: Broaden the primary target market to include medium to large light industrial manufacturers as well as small to medium users, and place more emphasis on assisting existing manufacturers. 2. Increase the intensity of marketing efforts targeting industrial brokers, owner's representatives and site selectors because of their influence and market knowledge. 3. Leverage the competitive advantage provided by Northstax Commuter Rail and additional community assets. 4. Leverage the fact that two Fortune 50 firms recently selected Elk River for new facilities, which adds credibility and suggests that the City is ready to take industrial development to a higher level. 5. Continue to employ about the same mix of marketing tools that the City has used in the past, but with greater emphasis on public relations and events. 6. Facilitate the preparation and marketing of the new Gateway Business Center. 7. Conduct acity-wide market study to determine the location, size and phasing of additional industrial land inventory. Requested Action Murray Wolf of Wolf Marketing & Media will be at the EDA meeting to present a summary of the methodology, research findings and recommendations fox the 2007-2009 Strategic Industrial Marketing Plan. The Marketing Committee has been invited to attend the presentation as well. Staff recommends the EDA consider adoption of the 2007-2009 Strategic Industrial Marketing Plan as presented. S:\EDA\MARKETING\2006 Plan Update\9.11.06 plan adoption.doc Strategic Industrial Marketing Plan Assessment of 2002-2004 Plan Results and Submission of 2001-2009 Action Plan Table of Lantents Executive Summary ............................................................................................. ..........................................1 Project Background and Research Methodology ....................................... ......................................... 2 Situation Analysis Overall Business Envixonment ...................................................................... .........................................3 Target Markets: Primary - Manufactuxexs ................................................... ......................................... 4 Target Markets: Secondary -Industrial Bxokexs .......................................... ......................................... 5 Competition ...................................................................................................... ......................................... 6 City of Elk River ............................................................................................... ......................................... 7 Objectives ............................................................................................................... ......................................... 8 Strategies and Tactics ......................................................................................... .......................................10 Tracking and Measurement ............................................................................... ...................................... 16 Appendices Appendix A: Summary of Interviews Appendix B: Summary of Industrial Broker Focus Group Appendix C: Minutes of July 17, 2006, EDA Marketing Committee Meeting Appendix D: Minutes of Aug. 28, 2006, EDA Marketing Committee Meeting Appendix E: Relevant News Articles Appendix F: Competitive Data Appendix G: Economic Data Appendix H: News from the Hub newsletter Appendix L Public Relations Efforts and Results Appendix J: New Industrial Development 2003-2006 Appendix I{: Elk River SWOT Analysis Executive Summary The City of Elk River is well positioned to enjoy significant industrial development for many years to come. The future looks promising thanks to a relatively strong local and national economy, the inevitable push northwest from the Twin Cities Metro Axea (further boosted Noxthstar Commuter Rail), the City's own many positive attributes, and a highly regarded, effective City Staff. But the City's success fox 2007-2009 hinges on making more land available for industrial development. Assessment of the Results of the Strategic Industrial Marketing Plan 2002-2004 Action Plan. The City substantially achieved the three primary objectives identified in the 2002-2004 Action Plan: 1. Position Elk River as "The Light Industrial Hub of the Northwest Metro" by 2005 2. Build out East and West Business Parks by 2010 3. Target industrial, machinery, fabricated metal and electronic equipment SICs First, although the City might not have become "the" light industrial hub of the Northwest Metro, its marketing efforts have effectively positioned it as "a" light industrial hub. Second, so much progress was made toward building out the business parks -including the new Noxthstax Business Park -that now the biggest concern is ensuring that enough land is available fox additional industrial development. Third, the City achieved measurable success in targeting small to medium-sized light industrial manufacturers. Specifically, a dozen new or expanded industrial development projects were added since 2002, totaling 377,000 square feet of new construction, 119 relocated jobs, 116.5 new jobs (goal) and almost $44.2 million in additional building value added to the tax base. 2007-2009 Action Plan. As we look ahead to 2007-2009, we believe that the Elk River Economic Development Authority should pursue similar -though somewhat broader -objectives: 1. Continue to position Elk River as "The Light Industrial Hub of the Northwest Metro" 2. Attract projects that have quality employment base and significant market value 3. Drive the acquisition and marketing of additional land for industrial development To accomplish these objectives, we recommend these specific marketing strategies: 1. Broaden the primary target market to include medium to large light industrial manufacturers as well as small to medium users, and place more emphasis on assisting existing clients 2. Increase the intensity of marketing efforts targeting industrial brokers, owner's representatives and site selectors because of their influence and market knowledge 3. Leverage the competitive advantage provided by Noxthstax Commuter Rail 4. Leverage the fact that two Fortune 50 firms recently selected Elk River for new facilities, which adds credibility and suggests that the City is ready to take industrial development to a higher level 5. Continue to employ about the same mix of marketing tools that the City has used in the past, but with greater emphasis on public relations and events 6. Facilitate the preparation and marketing of the new Gateway Business Center 7. Conduct acity-wide market study to determine the location, size and phasing of additional industrial land inventory In the pages that follow, we provide the detaIls that support these findings, conclusions and recommendations, along with the detailed Action Plan that can be the blueprint for achieving your industrial development objectives for 2007-2009 and beyond. Project Background and Research Methodology On June 12, 2006, the City of Elk River Econotic Development Authority (EDA) voted 7-0 in favor of hiring Wolf Marketing & Media LLC as the facilitator of the 2007-09 Strategic Industrial Marketing Plan Update. To lay the groundwork fox the update, Wolf Marketing has spent the past 13 weeks researching the overall business and economic development environment, the City's primary and secondary markets, the City's competitors, and Elk River itself -what we refer to as a Situation Analysis. The Situation Analysis was conducted using both primary and secondary research. The primary research included: ^ A series 11 of one-on-one interviews conducted with past, present and potential clients, along with brokers and partners, from Aug. 2-7, 2006 (Please see Appendix A for a summary.) ^ A 90-minute focus group session with local industrial brokers, held Aug. 9, 2006 (Please see Appendix B for a summary.) ^ Two meetings with the Elk River Economic Development Authority (EDA) Marketing Committee, held July 17 and Aug. 28, 2006 (Please see Appendices C and D fox the meeting minutes) ^ Numerous phone calls to competing cities, counties and other economic development groups to request copies of their marketing materials The secondary research included: ^ Searches fox news articles regarding economic development activity in the Northwest Metro, using Lexis-Nexis, Dow Jones Factiva, ABI/Inform and other paid subscription news databases (Please see Appendix E for copies of the articles.) ^ Additional searches fox relevant news articles in our company archives of local newspapers, business journals and trade publications, including the Minneapolis-St. Paul Star Tribune, the Minneapolis-St. Paul Business Journal, the Minnesota Aeal Estate Journal, the Elk Iliver Star News and other media (Please see Appendix E for copies of the articles.) ^ Ongoing tracking of news coverage in local newspapers, business journals and trade publications ^ Visits to the Web sites of competing cities, counties and other economic development groups (Please see Appendix F fox detailed competitor information.) ^ Visits to broker and developer Web sites to gather information regarding potentially competing industrial development sites. Some sites visited included www.noxthstarpaxtnexs.net, www.cbxe.com, www.dynamicsland.com and www.dukerealty.com ^ Visits to the Economic Development Association of Minnesota (EDAM) Web site to gather infarmation regarding Minnesota and national economic development news and trends (Please see Appendix G for copies of the economic data source materials.) ^ Visits to the Federal Reserve Bank of Minneapolis Web sites to gather general information Upper Midwest and Minnesota regarding economic conditions ^ Visits to the Minnesota Department of Employment and Economic Development (DEED) Web site to gather Community Profile information and other data Overall Business Environment The U.S. economy remains quite healthy, although there axe some concerns: U.S. economic growth slowed during the second quarter, partly reflecting the impact of higher energy costs, rising interest rates and the cooling in the housing market. Downside risks have escalated. The moderation in growth should help keep inflation pressures in check. However, energy prices are likely to stay elevated and inflation will remain a concern. ^ Federal Reserve policymakexs would like to pause, but inflation concerns may keep them on the defensive. The Upper Midwest economy appears strong. The Federal Reserve Bank of Minneapolis has not released a survey of Upper Midwest manufacturers since early 2005. But, at that time, manufacturers anticipated stronger economic activity, increased production and healthier profits - all of which have come to pass. And a more recent Fed. survey of professional service firms, released in June 2006, found that they generally had a successful previous 12 months and were optimistic about the coming 12 months. The Minnesota economy remains healthy and above the national average in job creation, according to data released Aug. 15, 2006, by the Minnesota Department of Employment and Economic Development (DEED). The state added jobs for the 13th straight month in July with an increase of 11,600 jobs. On average, Minnesota's job gains over the past four months account fox 10 percent of the nation's job growth. Overthe-year job growth is up 79,250 jobs, ox 2.9 percent, on an unadjusted basis -the highest rate since March 2000 and more than double the national growth of 1.3 percent. The over-the-year number tops the strongest similar 12-month period in the boom years of the 1990s, when jobs grew by 70,000 between July 1994 and July 1995. During the past four months, Minnesota has been adding jobs more than four times faster than the average monthly gain in 2005, while the nation's growth rate has fallen off more than 30 percent over the same time span. The seasonally adjusted unemployment rate rose two-tenths of a point to 3.8 percent in July. Most of this rise is due to an increase of 6,100 people in the labor force -the first increase in the labor force since February. "The state has been adding jobs at an average of more than 11,000 per month for the past four months and is strongly outpacing the national rate," said DEED Acting Commissioner Waxd Einess. Northstar Commuter Rail continues to move forward. The Twin Cities Metro Area's first commuter rail service, which is slated to run about 40 miles from Minneapolis to Big Lake -with a transit station in Elk River -was cleared Aug. 23, 2006, by the Federal Transit Administration (FTA) to move to final design for the $307.3 million project. Project Director Mark Fuhrmann said this is a sure sign that Northstar will become a reality. The project is expected to clear its fmal hurdle, a funding agreement with the federal government, in May 2007. Service would begin in 2009. (Please see Appendix G fox copies of the economic data source materials.) Target Markets: Primary -Manufacturers Since 2000, Elk River's primary target market fox industrial development has been the businesses that actually use the facilities, chiefly small to medium-sized light industrial manufacturers. The City has found quite a bit of success in attracting and retaining the small to medium-sized light manufacturers, especially during the past four years. Since 2002, the City has attracted 10 new (to Elk River) businesses and assisted with two expansions of existing businesses, resulting in new construction totaling 377,000 square feet. Those projects have generated 119 relocated jobs (not including the fast data center project) and include a goal of creating 116.5 new jobs, and have added almost $44.2 million in building value to the City's tax base (Please see Exhibit H fox a detailed listing of new and expanded businesses since 2002.) Now, many of those we interviewed believe that Elk River should build on that success but aim higher by targeting medium to large light industrial users. A smaller number of interviewees said the City should concentrate more of its economic development efforts on retaining and growing existing businesses, and/ox on attracting complementary firms -companies that would supply or buy products and services from existing businesses. Some believe that the City should do all of the above; pointing out that these various goals axe not mutually exclusive. In light of recent developments in Otsego, Ramsey, Rogers and other communities along Interstate 94 and/ox Minnesota Highway 101, some EDA Marketing Committee members suggested that Elk River should try to attract more commercial and retail businesses. However, other than the almost universal desire fox "a fine-dining restaurant," none of the interviewees suggested that. And, even if that was a goal, local experts say, it would be difficult to achieve. The brokers and developers we spoke with say commercial/retail development "follows the rooftops" -assuming that cities continue to provide an attractive environment fox development. They acknowledge that some major retailers -including Home Depot and Wal-Mart -have come to Elk River, and more will inevitably come as the City continues to grow. So the City should continue to guide land for commercial and retail use. But most agree that such developments are a naturally occurring process that cannot be forced by a city's marketing efforts. Also, because other communities closer to I-94 and the metro core have akeady absorbed much of the existing market demand fox commercial and retail development, they say it could be some time before the market grows enough to justify further commercial and retail development. With Great River Energy's decision to relocate its corporate headquarters fresh on their minds, the people with whom we spoke agreed that attracting a large corporate campus would be challenging. Competition is intense. Those decisions also tend to be driven by the location preferences of top management, who tend to prefer sites closer to the metro core and airport, and with more upscale housing options. Although Elk River has some upscale housing, it is not widely perceived that way. (Please see Appendix A fox a summary of our interviews with past, present and potential clients.) (Please see Appendices C and D fox the EDA Marketing Committee meeting minutes.) Target Markets: Secondary -Industrial Brokers The secondary target market of industrial brokers and owner's representatives/site selectors is an important and influential group. The broker community shares leads and other information, and referrals can be very important Yet bxokexs tend to be difficult reach and even tougher to persuade, according to the brokers themselves. Their hectic schedules make it difficult to capture their attention and to build relationships. They also have little incentive to help to promote a city unless they have listings in the community. Likewise, owner's reps/site selectors tend to be interested only if a city's industrial offerings match their search criteria. During the focus group with industrial bxokexs, owner's reps and site selectors, the participants made it clear that brokers target sites, not cities. They said they had little incentive to bring prospective users to city-owned sites because they won't be compensated adequately. The opinion was strongly communicated that cities would benefit from hiring brokers to market city-owned land. Although that comment is obviously self serving, it does contain an element of logic. The brokers contended that this strategy would eliminate their concerns about compensation, would result in faster sales of the land and would give cities a direct link to the bxokex community, which extensive knowledge of site and requirements. It should be noted that small to mid-sized manufacturing firms tend not to use brokers, whereas larger businesses are more likely to do so. Thus, if the City continues to concentrate on small to medium-sized firms, building relationships with the broker community would be of less importance. But if the City seeks to devote more of its marketing to include larger firms, it would be more important to effectively reach out to bxokexs. The idea of hiring brokers was discussed by the EDA Marketing Committee and City Staff. Although there was little or no support for hiring brokers, it was agreed that it is important to tap into the knowledge of the bxokex community. For City-owned properties, it was suggested that the City continue to compensate brokers for a portion of the buyers' brokerage fees. Fox pxivately- owned properties, it was suggested that the City consider a finder's fee or some type of other compensation fox brokers, as was sometimes done in the past when the City had a joint marketing agreement with the landowner. Specific eligibility requirements should also be determined fox both broker compensation programs. To maximize the effectiveness of these incentive programs, the existence of the programs, if approved, should then be clearly communicated to the bxokex community. (Please see Appendix B for a summary of the industrial bxokex focus group.) (Please see Appendices C and D for the EDA Marketing Committee meeting minutes.) Competitors Some communities that have competed head to head with Elk River fox economic development opportunities in the past have become less significant competitive threats, while other communities have emerged as strong new competition. Fox this research effort, we analyzed these past, present and potential competitors: ^ Andover ^ Monticello ^ Anoka ^ Osseo ^ Big Lake ^ Otsego ^ Dayton ^ Ramsey ^ Maple Grove ^ Rogers/Hassan Township With a few exceptions, City Staff reports that Elk River has rarely competed head-to-head fox projects in recent years with Anoka, Maple Grove and Rogers. Some of that is probably because those communities have not usually been targeting the same small to medium-sized light industrial market that Elk River has been targeting. It might also be because land costs and lease rates axe substantially higher in mature communities like Anoka and Maple Grove. It might also be because some users seeking sites closer to the metro core don't even consider Elk River. Available industrial land is also dwindling in Anoka and Maple Grove. But, if Elk River decides to target larger companies, the City could find itself competing directly with these communities, as it did fox the Great River Energy campus. However, that's not necessarily a bad thing because Elk River might have cost advantages, according to several of the people with whom we spoke. The fast-growing communities of Big Lake, Otsego and Ramsey are likely to be more frequent direct competitors in the future. In particular, Big Lake-based Dynamics Design & Land Co. LLC's new Big Lake Marketplace and Duke Realty Corp.'s new Gateway North Business Center in Otsego present significant potential competition for industrial users. Nor should other nearby communities be ignored -especially those along the Northwest corridor, such as Monticello, which is actively developing an additional 120 acres for industrial users. Andover, Big Lake (with the assistance of Connexus Energy) and Ramsey have regularly been running four-color advertising in the Minnesota Real Estate Journal. Andover has been touting its Andover Station and Andover Station North projects with a tag line "The North Metro has a new player." (Please see Appendix F fox detaIled competitor information.) 6 The City of Elk River The City of Elk River has made significant strides since 2002 toward its goal of positioning the community as "The Light Industrial Hub of the Northwest Metro." As noted previously, new industrial development since 2002 has included: ^ 10 new (to Elk River) businesses and two expansions of existing business ^ 377,000 square feet of new construction, with potential future expansion of 72,000 square feet ^ 119 relocated jobs (not including new data centers) and 116.5 new jobs (goal) ^ Almost $44.2 million in additional building value added to the City's tax base The City has been particularly successful in 2005 and 2006. The City attracted six new industrial development projects totaling 293,000 square feet on 55.52 acres in the Noxthstar and Elk River Business Parks in 2005, with another 100,000 square foot-plus, 17-acre project nearing approval. (Please see Exhibit J for a detailed listing of new and expanded businesses since 2002.) Our research indicates that a combination of factors contributed to this success: ^ Overall improvement in the national, regional and local economies since 2004 ^ The inevitable growth of Twin Cities Metro Area development to the Northwest ^ The EDA's 2005 decision to make more land available fox industrial development and to provide expanded fmancial incentives (tax rebate financing) ^ Proactive, responsive, highly regarded Economic Development Division Staff In addition, the City enjoys a number of inherent competitive advantages, including: ^ excellent transportation access, with U.S. Highways 10 and 169, Minnesota Highway 101, and close proximity to I-94, plus freight and - by 2009 -commuter rail service ^ a strong available labor force (Please see Exhibit I{ for a SWOT analysis that summarizes the City's strengths, weaknesses, opportunities and threats with regard to industrial development.) The No.1 obstacle to further development, according to nearly everyone we spoke with is a lack of available industrial land. Several people also mentioned traffic congestion, although the general consensus seems to be that Elk River's highway access is definitely more of an asset than a liability. Two local builders with whom we spoke complained about what they considered to be too-stringent design standards, especially when it comes to outside storage. However, most of the people we spoke with said it is important to maintain those standards to attract larger manufacturers ox corporate users, as well as additional commercial and retail users. A small number of the individuals we spoke with expressed concerns about the responsiveness and reasonableness of some City departments other than Economic Development, as well as the coordination between the various departments involved in the development process. But their comments were largely based on past experiences. Those involved in more recent projects gave City Staff high marks fox responsiveness, and cited an improved level of coordination and integration between City departments. The overall assessment of City Staff was overwhelmingly positive. The City of Elk River Objectives The City of Elk River substantially achieved the objectives identified in its Strategic Industrial Marketing Plan 2002-2004 Action Plan. The three primary objectives were: 1. Position Elk River as "The Light Industrial Hub of the Northwest Metro" by 2005 2. Build out East and West Business Parks by 2010 3. Target industrial, machinery, fabricated metal and electronic equipment SICs As we look ahead to 2007-2009, the Elk River Economic Development Division will pursue similar - though somewhat more ambitious -objectives: 1. Continue to position Elk River as "The Light Industrial Hub of the Northwest Metro" 2. Attract industrial development projects that have quality employment base and significant market value. 3. Facilitate the identification, acquisition, preparation and marketing of additional land fox industrial development Based on our research, the justification for these objectives is as follows: 1. Continue to position Elk River as "The Light Industrial Hub of the Northwest Metro" Even if Elk River is not yet "The Light Industrial Hub of the Northwest Metro," it has undeniably attracted a critical mass of light industrial users since 2002. That positioning and success have value, and the City can leverage that value by continuing to build on it. Elk River is also one of the few Northwest Metro communities with any kind of marketplace positioning. Communicating in no uncertain terms that Elk River is targeting light industrial users differentiates the City from the other communities that have vague ox nonexistent positioning strategies. Positioning Elk River as "The Light Industrial Hub of the Northwest Metro" also provides needed internal focus fox marketing efforts. It is an unambiguous objective to which the EDA and City Staff can aspire. The City can maximize its marketing resources if all efforts axe in alignment with that objective. 2. Attract industrial development projects that have quality employment base and significant market value What is our primary objective for industrial development? In our discussions with the Elk River EDA Marketing Coxnxnittee, there was general agreement that the primary objective is job creation -jobs relocated from other communities and new jobs created by new ox expanding manufacturers. But the City doesn't just want jobs; it wants good quality, high-paying jobs -the kind of jobs typically created by light industrial manufacturing. The EDA Marketing Committee members also agreed that increasing the building value added to the tax base is almost as important as job creation. Thus, one of our primary objectives must be the creation of quality jobs and significant additional market value. 3. Facilitate the identification, acquisition, preparation and marketing of additional land for industrial development To paraphrase the comments of several interviewees, focus group participants and EDA Marketing Committee members, "There's no point in doing marketing if you don't have any land." The point is well taken. As of late August, there were only three City-owned lots readily available fox development in Elk River (in the Noxthstar Business Paxk), and three privately owned parcels available (Sandpiper Business Paxk and two lots in Elk River Business Paxk). Clearly, with the support and approval of the EDA and City Council, Economic Development Division Staff must take the lead in facilitating the identification, acquisition, preparation and marketing of additional land for industrial development, both short term and long term. Strategies and Tactics How can Elk River achieve its new and expanded industrial development marketing objectives? We recommend these strategies: 1. Broaden the primary target market to include medium to large light industrial manufacturers as well as small to medium users, and place more emphasis on assisting existing manufacturers 2. Increase the intensity of marketing efforts targeting industrial brokers, owner's representatives and site selectors because of their influence and market knowledge 3. Leverage the competitive advantage provided by Northstax Commuter Rail and additional differentiated community assets 4. Leverage the fact that two Fortune 50 Earns recently selected Elk River fox new facilities, which adds credibility and suggests that the City is ready to take industrial development to a higher level 5. Continue to employ about the same mix of marketing tools that the City has used in the past, but with greater emphasis on public relations and events 6. Facilitate the preparation and marketing of the new Gateway Business Center 7. Conduct acity-wide market study to determine the location, size and phasing of additional industrial land inventory Strategy #1: Broaden the Primary Target Market One of the City's top industrial development priorities is to attract projects that will create good- qualiry jobs and add significant market value to the tax base. Elk River has succeeded in doing exactly that during the past four years. A dozen small to medium sized light industrial manufacturers have relocated to ox expanded in the community, bringing good-paying jobs and facilities that add to the tax base. Thus, the consensus is that the City should continue to build on that impressive record of success. However, as Elk River continues to grow and mature as a community, so should its industrial marketing efforts, according to many of the people with whom we spoke. Several strategic options were suggested and considered. But the majority seemed to agree that, if the City is going to "aim higher," the primary markets to be targeted should include: ^ Small to medium light industrial manufacmxexs ^ Medium to large light industrial manufacturers ^ Existing manufacturers In essence, the consensus was that Elk River should continue to target small to medium light industrial manufacturers, expand its marketing to target medium to large light industrial manufacturers, and increase its focus on existing manufacturers. Broadening the City's marketing efforts in this way should allow Elk River to attract industrial development projects that increase the quantity and quality of jobs while adding significant market value to the tax base. In targeting small to medium light industrial manufacmxexs during the past four years, the Elk River Economic Development Division has done an effective job of implementing the Key Account and Lead Generation Strategies outlined in the 2002-2004 Action Plan. As recommended, all industrial 10 inquiries have been managed effectively, and EDA members, local business leaders and other partners have been enlisted to aid in sales efforts. It was also recommended in the 2002-2004 Action Plan that the number of Key Accounts (10 as of August 2002) be expanded annually, and that has been accomplished. The number of key accounts currently stands at 57. A broader list of 524 contacts includes those Key Accounts plus several hundred additional prospects, most of which were identified by renting lists from Minnesota Technology. As we look ahead to 2007-2009, we suggest these tactics: ^ Define the parameters fox "small to medium" and "medium to large," enabling the City to more easily identify and obtain additional prospect names to include in its marketing efforts ^ Reexamine the I{ey Account and other prospect lists to determine whether they sufficiently include the Ciry's expanded target: medium to large light industrial manufacturers ^ If they do not, obtain contact information fox additional medium to large prospects To place more emphasis on assisting existing manufacturers, we recommend these tactics: ^ Continue to provide -and possibly expand - programs that benefit existing manufacturers, such as financing and training programs, and work to increase participation in those programs ^ Continue to host and enhance the annual Manufacturing Week recognition event ^ More strongly communicate the City's commitment to existing manufacturers by such things as adding a dedicated "Tools fox Existing Businesses" link to the Economic Development Division home page on the City's Web site, and increasing the frequency of Economic Development Division marketing and communications contacts with existing manufacturers Strategy #2: Increase Marketing Efforts Targeting Industrial Brokers As stated above, the secondary target market of industrial brokers and owner's reps/site selectors is an important and influential group. They axe knowledgeable about sites and requirements, and influential in client decisions. This is especially true regarding medium to large light industrial users - a market we hope to more effectively target. But brokers axe also difficult to reach and build relationships with, and they have little ox no incentive to promote a city unless they have property listings in the community. Although the EDA Marketing Committee and City Staff had little enthusiasm fox the idea of hiring brokers directly to market City-owned land, they recognize their influence and information value, especially fox medium to large light industrial users. Thus the Ciry should develop more effective strategies fox gaining the attention and support of the broker community. We suggest these tactics: ^ Identify the five to 10 most knowledgeable and influential industrial brokers working in the Northwest Metro ^ Ensure that those brokers axe part of the City's Key Account list ^ Continue to follow through on the established Key Account strategy, including being responsive to broker inquiries, networking with them periodically and maintaining ongoing contact ^ Continue to compensate brokers fox bringing users to City-owned industrial sites 11 ^ Develop and submit to the EDA a proposal fox giving fmdex's fees or some type of other compensation to bxokexs who site clients on privately-owned industrial sites ^ Clearly communicate the existence of both incentive programs to the bxokex community ^ Develop a bxokex-oriented event that will attract brokers to the community to network and to see local industrial development site options It should be noted that the 2002-2004 action plan xecottunended meeting with Key Accounts three times per year. We believe that is unrealistic because the Key Account list has grown to 57 contacts and because most brokers would probably resist that level of contact. Based on comments from the bxokexs with whom we spoke, that frequency of meetings is probably unnecessary -and unwelcome. They axe extremely busy and are usually only interested in meeting if there is a specific opportunity to discuss. Thus, the City will probably achieve better results if it will: ^ Keep bxokexs informed through marketing communications ^ Make periodic phone contacts with bxokexs about new opportunities ^ Host a broker event that will give brokers a reason to visit and pay attention to Elk River Strategy #3: Leverage Northstar Commuter Rail and Additional Differentiated Community Assets With Northstar Commuter Rail moving closer to reality every day, there's little need to belabor the point that it will be a significant asset to the City of Elk River. The many upbeat comments made by those we interviewed, as well as the positive response to the Northstar Business Park (specifically the almost immediate sale of three lots fox development of 68,000 square feet), axe proof enough. Admittedly, with initial plans for only one daily "reverse-commute" (east to west) commuter run, the immediate impact of Noxthstax for Elk River will not be dramatic. But service is likely to expand in the future, and there is already a highly positive perception of the potential impact. The question is how to most effectively leverage Noxthstax. One obvious way to do that is to tout Noxthstax at every opportunity. The Economic Development Division has done an effective job of doing that with regular Noxthstax updates in the News from the Hub newsletter. And, of course, naming a business park after Northstar was a shrewd move. To more fully leverage Northstar, we suggest that the City implement these additional tactics: ^ As has been mentioned, the City Web site is usually the first stop fox economic development inquiries. However, information about Noxthstax is currently buried deep within the site. We suggest that the Noxthstax logo be displayed - or that Northstar at least be mentioned - on the City's home page, ox at least the Economic Development Division home page. ^ Currently, there is no prominent information about Noxthstax in the City's hard copy package of economic development information. We recommend that a dedicated Noxthstax brochure ox sell sheet be added to the pocket folder. ^ Take every opportunity to tout Noxthstax. Every Economic Development Division ad, duect mail effort, news release and communications effort should mention Northstar. ^ The City and EDA should advocate expanded Noxthstax service to Elk River 12 Having said that, it should be noted that Northstax is not a sustainable source of competitive advantage over all of the City's competitors. Elk River will have a station, but so will Big Lake and Anoka. But it is a competitive advantage over nearly all competitors. So it should be emphasized. Additional Differentiation Opportunities Elk River has been known as Energy City since 1997 when the Minnesota Environmental Initiative chose it from more than 30 other applying communities to act as a geographical focal point fox the demonstration of efficient and renewable energy products, services and technologies. Builders, utility companies, government agencies and businesses have implemented several projects, including Energy Houses I, II and III. The Downtown Revitalization Project will also bring nearly 22,000 square feet of commercial space, 67 for-sale housing units, 32 rental housing units and 154 below-grade parking stalls to the downtown area as part of the Bluffs of Elk Rivet and Jackson Place projects. As with Noxthstax, there is an opportunity to make the Energy City Program and Downtown Revitalization Project more prominent in the City's industrial development marketing materials. Although these projects might not have a direct impact on industrial development, they reinforce a general perception of Elk River as a vital, progressive community. Strategy #4: Leverage the fact that two Fortune 50 firms recently selected Elk River for new facilities, which adds credibility and suggests that the City is ready to take industrial development to a higher level Two Fortune 50 firms recently selected Elk River fox major projects. As was noted during the Aug. 28 EDA Marketing Committee meeting, that speaks volumes about how Elk River is regarded by corporate users and site selectors. It boosts the City's credibility as a viable location fox more than just small to medium light industrial development. Even if future projects aren't on a similar level, these prestigious projects will undoubtedly lend credibility during the sales and marketing process with any prospective user. Unfortunately, the sensitive nature of these projects limits the City's ability to leverage these successes at this time. However, the scope of these projects is certain to bring them to the attention of other interested parties -certainly the well-informed broker community, and possibly corporate users. There has also already been limited media coverage of these projects, and the names of the companies involved will be (ox have already been) mentioned in City and County meeting proceedings and other documents. Thus they are public information. And, of course, anyone driving along Highway 10 can't help but notice the enormous facility cuxxendy being built -and the second one is expected to be even larger. So while the users axe understandably sensitive about publicizing these projects, the projects are public information and will probably soon be almost common knowledge. Even so, given the 13 sensitivity of these projects, we recommend that City officials communicate their intentions with the users before mentioning those projects in any marketing efforts. Although it seems unlikely that these users would ever want these projects prominendy featured in broad advertising ox publicity efforts, perhaps they would be open to more limited, low-key efforts, such as project case studies included in marketing packets ox targeted direct mail efforts. At worst, these projects can surely be mentioned in verbal communications with prospective users. Strategy #5: Continue to employ about the same mix of marketing tools, but with greater emphasis on public relations and events During the past four years, the Elk River Economic Development Division has pursued an integrated marketing communications strategy employing all components of the marketing mix: advertising, direct mail, public relations, events, Web site and personal selling/relationship building. As recommended by the 2002-2004 Action Plan, the Ciry has increased its investment in direct mail and public relations. 2004 2005 2006 2007 Advertisin $28,500 $28,500 $34,200 $20,000 Public Relations $17,000 $19,500 $24,000 $25,000 Other Marketin $2,500 $8,600 $18,100 $5,600 Total $53,500 $56,600 $76,300 $50,600 (The 2006 budget was disproportionately higher due to the $10,000 cost of Noxthstax Business Paxk signage, $5,000 fox the Technical Assistance Grant Partnership Program with iblinnesota Technology and other one-time costs.) Perhaps most notably, the Progress Partner Dispatch newsletter was redesigned, expanded and renamed News from the Hub. (Please see Appendix H for an example of the News from the Hub newsletter.) In addition to the relaunched News from the Hub newsletter -which can also be considered a form of direct mail and PR -several project case studies have been written, which have been used online and as a part of hard copy marketing materials. The owner of one business that recently decided to relocate in Elk River said a project case study he read on the City's Web site was the biggest reason he decided to consider Elk River. Several news releases were also written and distributed, and valuable positive publicity was obtained in local media, including the Minneapolis-St. Paul Star Tribune, Minneapolis-St. Paul Business Journal, Minnesota Beal Estate Journal, Elk River Star News and other publications. Public relations is an inexpensive and highly credible form of marketing. With the recent economic development successes in Elk River, there is plenty of "good news" to be shared. (Please see Appendix I for examples of public relations efforts and results.) 14 The City has also improved and expanded the amount of economic development information available online because it has become common practice fox a city's Web site to be the first point of contact fox economic development inquiries. To maximize the value of the marketing budget, we strongly recommend these tactics: ^ Devote even more of the marketing budget to public relations efforts, including new and updated case studies ^ Research and write new and updated case studies fox all recent projects ^ Establish a regular schedule (at least six per year) of news release distribution and media relations ^ Continue quarterly publication of the News from the Hub newsletter ^ Reevaluate the messaging, design strategy and media selection strategy of the advertising ^ Continue to maintain, update and expand the content and other resources available online Strategy #6: Facilitate the preparation and marketing of the new Gateway Business Center Strategy #7: Conduct aCity-wide Market Study to Determine the Locations, Size and Phasing of Additional Industrial Land Inventory These two strategies go hand in hand As noted earlier, there's little value in doing industrial development marketing if the City doesn't have land available. So, with respect to the dwindling inventory of land ready fox industrial development in Elk River, we recommend these strategies: ^ Move forward expeditiously to make the new Gateway Business Paxk avaIlable fox development ^ Conduct a market study to deteunine the location, size and phasing of additional industrial land inventory The Gateway property will provide a short-term solution to the problem of the City's lack of available land fox industrial development. Gateway may also provide an opportunity for some commercial development, and the appropriate mix should be supported by a market study. However, the Gateway property totals only about 60 acres, and its development potential is limited by wetlands and a gas line that passes through the property. Meanwhile, larger -and in some ways, more desirable -tracts of land have recently become available fox industrial development in competing areas, including Otsego (129 acres), Monticello (120 acres) and Big Lake (50 acres). There is also the potential fox Rogers/Hassan Township to make more land available fox industrial development. In light of this situation, the EDA Marketing Committee and City Staff agree that the City must also address the long-term need fox additional industrial land. We strongly concur with City Staff's recommendation that the City conduct a market study to determine the location, size and phasing of additional industrial land inventory. Please see Appendices C and D for copies of the EDA Marketing Committee meeting minutes. 15 Tracking and Measurement Specific quantifiable goals should be established wherever possible to allow accurate tracking of the xemxn on investment from individual programs, as well as the overall success of the marketing plan. Results should be tracked and reviewed on an ongoing basis, and "mid-course couections" should be made as objectives change ox if existing strategies and tactics axe not enabling you to meet your objectives. In addition, the City of Elk River should continue to: ^ Analyze the competition and the services they axe offering. ^ Regularly evaluate and improve the marketing plan. ^ Track the status of all prospects and projects. Based on the Situation Analysis, as well as the Objectives, Strategies and Tactics described previously, we recommend these specific success measurements: ^ Define specific parameters fox "small to medium" and "medium to large" light industrial manufacturers. Target completion date: Nov. 1Q 2006. ^ Reexamine the I{ey Account and other prospect lists in light of those parameters to detertnuie whether those lists adequately include the City's expanded target: medium to large light industrial manufacmxexs. Target completion date: Dec. 15, 2006. ^ If that market is underrepresented, obtain contact information fox additional medium to large targets and begin including them in new marketing efforts. Target completion date: Dec. 31, 2006. ^ Identify the five to 10 most knowledgeable and influential industrial bxokexs working in the Northwest Metro and ensure that those brokers are part of the City's Key Account list. Target completion date: Nov. 10, 2006. ^ Develop a brokerspecific marketing communications strategy. Target completion date: Dec. 31, 2006. ^ Develop and submit to the EDA a proposal for giving finder's fees ox some type of other compensation to brokers who site clients on privately-owned industrial sites. Target completion date: Nov. 1Q, 2006. ^ Begin clearly communicating the existence of bxokex compensation to the broker community. Target date: As soon as approved. ^ Develop abxokex-oriented event that will attract bxokexs to the community to network and to see local industrial development site options. Target date: Summer 2007. 16 ^ Attract to the broker event at least 75 percent of the top brokers identified above. Target date: Summer 2007. ^ Add at least a mention of Noxthstar Commuter Rail to all Economic Development Division marketing materials. Target completion date: Dec. 31, 2006. ^ Discuss with the users the potential limited inclusion of the two new projects fox Fortune 50 companies in futare marketing efforts. Target date: As soon as the second project is approved. ^ Woxk with marketing consultant to ensure that 2007 marketing mix and budget axe in alignment with the recommendations in this plan. Target completion date: Sept. 29, 2006. ^ Move forward expeditiously to make the new Gateway Business Paxk available fox industrial development. (Already in process.) Target completion date: Summer 2008. ^ Determine the best strategy fox conducting a market study to determine the location, size and phasing of additional industrial land inventory. Target completion date: Dec. 31, 2006. ^ Write project case studies on all projects that have not yet been written about. Target completion date: AprIl 20, 2007. ^ Generate at least six news releases per year. Target completion date: Annual. ^ Obtain positive publicity via at least three significant news articles per year. Target completion date: Annual. ^ Generate at least 50 total industrial development inquiries per year, including at least 25 from medium to large light industrial manufacturers. Target completion date: Annual. 17 Appendix A: One-On-One Interviews Executive Summary Wolf Marketing & Media interviewed 11 past, present and potential clients of the Ciry of Elk River Economic Development Division, as well as partners, developers and builders. The goal of the interviews was to explore attitudes and beliefs regarding the industrial development environment in Elk River and the rest of the Northwest Metro area Some of the notable comments were: ^ Clients, partners, developers and builders all agree that clients typically start the site selection process by identifying a particular region of the Twin Cities Metro Axea, such as the Northwest. ^ Nearly all said that they prefer to do their initial research online, starting with city Web sites. At a minimum, they expect to fmd lists of avaIlable sites and community demographics. One current client said that a case study that was posted on the City of Elk River Web site was the primary thing that convinced them to learn more about sites in the City. ^ The interviewees said that clients narrow their list of potential sites based on a variety of factors. Almost all users consider all of these factors: transportation access, available work force, prevailing local wages, existing utilities and infrastructure, specific buildings and sites, the cities' reputations toward development, and the cities' levels of interest. But the weight they put on each factor varies. ^ These factors are explored more deeply as a follow-up to the online research, usually by making direct contact with city staff in the cities under consideration. ^ The Northwest Metro is popular among industrial users because it is a growing area with good road and xaIl transportation access (including the future Noxthstar Commuter Rail line), an existing manufacturing-oriented work force, lower wages than the metro core, existing utilities and infrastructure, available buildings and sites, lower real estate costs, communities with apro- business and pro-development reputation, and communities that axe very aggressive regarding economic development. ^ Elk River is considered by potential users fox these same reasons. ^ The convergence of Highways 169, 10 and 101 in Elk River is considered a major asset due to accessibility, but there are growing concerns regarding traffic congestion. ^ Elk River might be less attractive to some potential users because it is further from Interstate 94 than some other Northwest Metro communities ^ Most respondents insisted that fmancial incentives axe not the key to making a final decision. But, if all else is equal, they said they can be the deciding factor. .91 ^ Clients that left Elk River and prospects that went elsewhere stayed in the Northwest Metro and made those decisions primarily fox financial reasons. They said they liked Elk River, but they made purely business decisions. ^ After site selection, users worry about how future development might impact their business operations and property values. Some specifically mentioned their dislike of cotnxnexcial and retail development near industrial development. They also worry about possible tax hikes and ongoing worker recruitment, retention and training. ^ Elk River is generally considered to be a good value fox industrial users. Prices fox industrial land and buIldings are usually competitive with other nearby Northwest Metro communities, and far less than closer-in suburbs like Maple Grove. ^ Several interviewees said that, although some potential users might view Elk River as too far from the metro core, that's changing. Good highway and rail access, and the coming of Northstar, make Elk River an increasingly viable location. ^ All the interviewees had positive comments about the Elk River Economic Development Division, especially Economic Development Director Cathy Mehelich and Assistant Economic Development Director Heidi Steinmetz. Many comments were extremely positive. Cathy and Heidi were singled out numerous times fox being proactive, aggressive and enthusiastic about wanking with potential and existing users. ^ Several interviewees said that Elk River is a more sophisticated community than it is generally perceived to be, and that it has a more professional Economic Development staff than one would expect fox a community of its size. ^ The builders and developers we spoke with said that while they were very happy with the Economic Development Division, they had very negative experiences in working with other Elk River City Staff in the past, specifically in the areas of interdepartmental communication and coordination. And both builders say the City Engineering Department is still a problem. But they all agreed that the changes initiated by Community Development Director Scott Clark have made great strides in turning that situation around. ^ None of clients ox partners we spoke with had any complaints about working with City Staff. ^ The builders both said they'd like looser land use and design standards. In particular, they'd like to see more land available for warehouses and outside storage. They said they have directed multiple users to other communities due to Elk River's higher standards. ^ On the other hand, the clients, partners and developers we interviewed said they did not want to see the standards relaxed. Once they or their clients make a commitment to the community, they want to make sure their investment is protected. ^ Only one interviewee -who had been unhappy with the development process in the past -saw any significant deterrents to locating ox expanding in Elk River. A2 ^ There was no consensus regarding what specific business or industry Elk River might be known fox. ^ There was also no consensus about what type of additional businesses ox industry Elk River should try to attract, aside from the near-unanunous desire fox a nicer restaurant. A3 Research Methodology One-on-one interviews axe research technique in which participants axe asked to answer several (usually 10 to 15) specific, open-ended questions during a relatively short (usually 15 to 45 minutes) interview. In this case, past, present and potential clients, as well as parmers, developers and builders, were asked a series of questions about the City of Elk River, its industrial development sites, its Economic Development Agency (EDA) and its Economic Development Division, as well as its Northwest Metro competition. The questions were modified slightly fox the different types of respondents. Please keep in mind that these interviews axe a form of qualitative research. As such, they axe not a form of "statistically significant" quantitative research. In other words, these interviews do not represent a large enough sample to state with confidence that they represent the prevailing attitudes and beliefs of the total population of clients, parmers, developers or builders. Nox can the results be measured numerically or analyzed statistically. Specifically, we should not assume and say all clients, parmers, developers and builders share the attitudes and beliefs of this small sample. However, these interviews do provide a valuable glimpse of the attitudes and beliefs of the target population. These results can be used to define a problem, generate hypotheses, identify causes and provide direction fox additional research. Interviews are also relatively inexpensive and fast. Thus, what these clients, parmers, developers and builders had to say helps us to better understand the environment fox economic development and to provide possible direction for future marketing efforts and/or additional research. A4 Appendix B: Industrial Broker Focus Group Executive Summary A 90-minute focus group was held Wednesday, Aug. 9, 2006, at Elk River City Hall with four commercial real estate bxokexs specializing in industrial properties who axe active in the Elk River area. The goal of the session was to explore attitudes and beliefs regarding the industrial development environment in Elk River and the rest of the Northwest Metro area Some of the notable comments were: ^ Where the business owner or business executive hues - ox wants to live'- tends to be the most important factor in making industrial site selection decisions. Transportation access and the net cost (after land write-downs and/ox tax abatements) are also important. Also mentioned were: proximity to an appropriate work force, to vendors and to clients. ^ The owners of most small, privately owned businesses tend to worry more about cost, the bxokexs agreed, whereas the executives of most large publicly traded companies don't worry as much about cost. Corporate executives tend to be more concerned with transportation access, improving efficiency with a new facility and other issues, they said. The brokers seemed to agree that users focusing on financial incentives were not concentrating on the issues that would be the most important in the long run. ^ Businesses usually don't start the site selection process with a specific community in mind. They will target a general area that might include several communities. But their specific criteria for the site (as long as it's in their primary geographic target area) tend to be more important that the city in which it is located. ^ Brokers begin their search fox industrial sites by checking listings, networking with other bxokexs and contacting cities. ^ Elk River and Rogers axe perceived to have few available industrial sites. "From an industrial perspective, you've got nothing to sell right now," one broker said. Big Lake and Otsego both have major new projects in the works that should create more industrial development opportunities, they said, although Duke's Otsego project is expected to focus on leased space. ^ After selecting a site, businesses' biggest concerns tend to be employee retention and how they will be impacted as the city continues to grow and develop. ^ Because bxokexs network and share information, they axe an important and influential target market. Yet, the brokers in the focus group seemed to be in agreement that cities do a poor job of marketing to the broker community. B1 ^ Hiring brokers to market city owned industrial properties would not only result in the quicker sale of those properties, the brokers said, it would allow cities to find out about more economic development opportunities because it would give them an insider in the broker community. ^ Bxokexs have little incentive to bring prospective users to city owned industrial properties because they axe concerned about how they will be compensated for their efforts ^ Brokers find it much easier to work with private landowners, developers and other brokers than with cities, the focus group participants said. ^ In addition to hiring bxokexs, the focus group participants recommended that cities should market through direct mail and emaIl. ^ One broker also mentioned that she would like cities to provide more current, comprehensive demographic data. Often the ava$able data isn't current, especially in fast-growing communities. The data should be available online. ^ Since closer-in communities axe running out of available industrial land, the brokers said it's a natural progression that users and brokers are more willing to consider sites in more distant communities, which is why we're seeing more activity places like Otsego, Big Lake and Elk River. It's almost inevitable, they said. ^ Those areas axe also becoming more viable industrial areas because the blue collar work force is also moving further out from the metro core in search of more affordable housing. ^ Elk River Economic Development Division Staff were unanunously praised fox being interested, aggressive and responsive. With a dedicated Economic Development Division, it's also obvious who brokers can contact for information. In some communities, the bxokexs said, it can be frustrating to find a single point of contact. Elk River is also perceived as being pro business. ^ Monticello is perceived as being more aggressive with financial incentives, and Big Lake is perceived as being somewhat less stringent about such things as outdoor storage. (The Big Lake Marketplace project will allow outdoor storage, one of the bxokexs said.) ^ There is considerable demand fox outdoor storage space, but very few communities allow it, another broker said. A community that found a place fox outdoor storage could do well, he said. ^ Rising gas prices probably won't deter companies from relocating to the Northwest Metro unless they have a large fleet of distribution ox service vehicles that would need to navel greater distances. ^ The industrial leasing market is weak in the Northwest Metro, the bxokexs agreed, probably because there is still plenty of industrial space available along I-694. Most industrial users in the Northwest Metro -even small users -would still prefer to build ox buy rather than lease, they said. ^ There seems to be more demand from large industrial users (100,000 square feet-plus) than smaller industrial users right now, the brokers agreed. B2 ^ The bxokexs said that residential developers have hurt the industrial market because they have driven up land prices, tied up large parcels of land and, in some cases, convinced cities to rezone commercial ox industrial land fox residential use. ^ Elk River was not perceived by the focus group participants as being "known" fox any specific type of industry. ^ Just because Elk River might want to add a certain kind of industrial, commercial, retail or restaurant development doesn't mean the City can make it happen, the bxokexs said. "I'ou can't create demand," one said. When developers believe Elk River is ready fox those types of businesses, they will come, the bxokexs agreed. B3 Research Methodology A focus group is a xeseaxch technique in which a relatively small group of people (usually four to 10) axe asked to discuss their attitudes and beliefs regarding particular products, services, concepts, advertisements, ideas ox packaging for a relatively short period of time (usually one to two hours). In this case, the "products and services" were the City of Elk River, its industrial development sites, its Economic Development Agency (EDA) and its Economic Development Division, as well as its Northwest Metro competition. Please keep in mind that focus groups axe a form of qualitative xeseaxch. As such, they are not a form of "statistically significant" quantitative xeseaxch. In other words, there are not enough participants in a focus group to state with any degree of confidence that they represent the prevailing attitudes and beliefs of the total population. Nor can the results typically be measured numerically or analyzed statistically. Specifically, we should not assume and say all brokers share the attitudes and beliefs of this one small group. However, focus groups can provide a valuable glimpse of the attitudes and beliefs of the target population. They are used to define a problem, generate hypotheses, identify causes and provide direction for additional research. They are also inexpensive and fast. Thus, what these brokers had to say helps us to better understand the envixontnent fox economic development and to provide possible direction fox future marketing efforts and/or additional research. B4 Appendix C: 7/11/06 EDA Marketing Committee Meeting Minutes MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY MARKETING COMMITTEE HELD AT ELK RIVER CITY HALL MONDAY, JULY 17, 2006 Members Present: Jim Barthel, Jerry Gumphxey, Gary Santwire, Dan Tveite and Mark Uxista Members Absent Dave Ehlers, Chris Carlson Staff Present: Director of Economic Development Catherine Mehelich and Assistant Director of Economic Development Heidi Steinmetz Introductions /Overview of Plan Process Muxxay Wolf of Wolf Marketing & Media introduced himself to the committee and presented a brief overview of the planning process. 2. Committee's Assessment of 2002-2004 Action Plan Mr. Wolf requested the committee member's assessment of the 2002-2004 Strategic Industrial Marketing Action Plan. Barthel suggested a change to "A Gght industrial hub in the northwest metro" as opposed to "The light industrial hub of the northwest metro". He felt that is a reflection of what we really are in the market with competing communities. Santwire agreed with Barthel's comments. Tviete stated that maybe because Elk River wasn't as aggressive as other cities in giving land away fox free that we aren't perceived as "the light industrial hub". He also felt that part of the reason the initial marketing plan got off to a slow start was the general economic downturn of the early 2000s. Santurixe stated that the critical change in the success of the plan occurred when the city made the decision make more property available Eor development. He stated even then there was still asignificantwrite-down on the land cost by the city. Director of Economic Development Catherine Mehelich stated that there is a lot of talk in the industrial market that Elk River is aggressive with its financial incentives; even though land may not be "given away" upfront there is still a significant unite down on the land cost. Tviete stated that the city has decided to offer pay-as-you-go incentives rather than upfront because it is less risk to the city. He stated that if pay-as-you-go incentives axe being given to Duke in Otsego that there will be tremendous competition for industrial developments and that will require the City of Elk River to offer industrial sites at minimal cost. Mr. Wolf stated that Duke's project in Otsego will definitely be part of the competitive research fox [he plan update. Ms. Mehelich provided a summary of Duke's recent experience with the City of Elk River in which Duke responded to the EDA's request for proposals for the master development of the Northstar Business Park. Barthel stated that the question seems to be, can Elk Itivex really be more successful with a Duke if we want to reach a higher level of industry, or do we just keep trying to do it EDA Marketing Committee Minutes J>ily 17, zoos Page 2 ourselves and keep getting the smaller industries. Santwire stated that Cymbet could be our next hope fox a corporate campus project and the best corporate campuses to be in Elk River will be grown from within the community. Ms. Mehelich stated that staff receives very few inquires for corporate campuses but the city is/was currently host to a few existing (GRE, Tescom, SoftPac) but the companies• tend to be acquired or merged with larger corporations and that the threat is that the new "out of town" executives often chose to relocate the headquarters out of Elk River. This is a trend that we need to be aware of because it affects business retention. Santwire stated a Duke will help bring the corporate campuses but the small industries are never tied to a big developer, and even if we had a corporate campus prospect, where would they go in Elk River. He stated Elk River needs more pxoperry. Barthel stated that the city's workforce and population will draw the industrial market that is natural fox the city, but it appears we need more land to be marketing. Gumphrey stated he felt the city didn't accomplish anything under the 2002 Action Plan, that the city needs more land to market, the city's not going to get corporate headquarters to locate here and that our transportation system has a negative affect. He felt we should survey our current manufacturers and attempt to recruit their suppliers and vendors that they need to be successful. Urista stated that companies are attracted to Elk River because we have land and a blue collar workforce. He agreed with Gumphrey that we don't need to focus on corporate companies, that traffic on Highway 10 is horrible and that businesses will see the future Northstar Commuter Rail as an incentive to come to Elk River. Santwixe stated that right now there is a Councihnember that want commercial and restaurants. He inquired if the Committee is really going to be blending commercial and industrial in the same marketing plan. He asked Gumphrey if the EDA/Council is satisfied with the Northstar Business Park and development in general. Gumphrey stated yes, but we need restaurants in the city and a sign marketing the available lots fox sale in Northstar Business Paxk. He inquired why Elk River doesn't have a nice restaurant but the surrounding communities do. Mr. Wolf asked the committee how they measure success of the marketing plan; is it job creation ox tax base enhancement? Santwire stated he felt jobs is the biggest measurement of success. Tviete stated he felt job creation is number one and tax base is also important but that we want people to be able to live and work in Elk River rather than being a bedroom community. He stated that if you're seeing $3 gas prices, we instantly become less attractive. Barthel stated that good employees axe key to a company's success and that tends to be how we get more business. Santwire stated that the city code and ordinance/design standards control the building design and the city should be experiencing a better tax base as a result. He added that if we focus on jobs, the tax base will take care of itself. Urista added that if job creation comes First the city will realize some tax base enhancement when the company expands their building in the future. Tviete mentioned the Target data center as an example of a project in which the tax base enhancement is a greater benefit than job creation. The consensus of the committee was that job creation is number one in the measurement of the marketing plan's success. Mr. Wolf asked the committee their assessment of the development process in the city. Santwire stated that consistency is important between the various departments and divisions. EDA Dlaxketing Committee Minutes July 17, 2006 Page 3 The consistency between departments has gotten better and he rates Elk River's process as easier than Maple Grove and Brooklyn Paxk. The process is better now than it was 5 years ago. Uxista agreed that the process has been easier in the last 5 years compared to 10 years ago. 3. Wolf Marketing & Media's Preliminary Assessment of 2002-2004 Action Plan Mr. Wolf provided an overview of the city's industrial development accomplishments as highlighted in the attached power point presentation. 4. Discuss Marketing Goals & Objectives Mr. Wolf asked the committee what they felt the city's marketing goals and objectives should be. Santwire inquired about the existing tagline - should it be "The" or "A" Light Industrial Hub of the Northwest Metro. Barthel stated that even though the tagline was rather specific he did not feel it was limiting. He stated that the tagline provides focus for our marketing efforts. He added that the city should continue on that path, but broaden it a little. Santwixe stated that when there is significant job growth then the city will be able to attract restaurants. Tviete stated he was interested in recruiting more "support' industries for our current manufacturers. Gumphrey agreed stating that the infxastrucmxe needed fox corporate campus is not here and Elk River is not the right location. Tviete stated Elk River is too fax out of the metro and away from the aicpoxt where the corporate execs want to be. Gumphxey stated the city needs to own the new industrial property in order to control land prices. Barthel stated it seems Elk River can best accomodate companies that have 100 people or less. Gumphrey agreed with recruiting more of the suppliers of existing industries and that this was recently discussed at the EDA meeting with the new Metro Fringe Enterprise Network System research. Mr. Wolf asked the committee's input on whether the marketing plan should be expanded to address commercial along with industrial. Gumphxey stated he would like to see what can be done to stimulate more commercial development investigated as part of the marketing plan. Santurire stated that he doesn't want to see the city subsidize commercial development. Gumphrey agreed but felt that the city should still be marketing to the commercial/retail market to let them know we're interested. Santwire stated he doesn't want to see commercial and industrial marketing get too integrated within the marketing plan. Ms. Mehelich suggested that retail/commercial development requires land and population to support the development and perhaps that is the best kind of marketing role the city can play fox commercial Mr. Wolf stated that part of their research will include talking to retail site selectors and brokers for their input on commercial development in Elk River. The consensus of the group was that land availability is the greatest issue affecting development. Ms. Mehelich stated that the city needs to first identify what kinds of industrial or commercial development they want before they just buy land for the sake of having land. The committee discussed why a company would locate in Elk River. Santwixe stated that people can live, work and play here with affordable housing choices, great real estate and city staff. Barthel stated that Elk River is to most people half the way to the cabin or up north and our workforce is excellent. Uxista stated that Elk River is half way between St. Cloud and Minneapolis and yet close to Mille Lacs and people's cabins. The committee members agreed that the Noxthstax Commuter Rail was going to be a major asset, although Barthel wondered how people would get to and from the station. 5. ext Stens EDA Marketing Committee Minutes July 17, 2006 Page 4 Mr. Wolf stated that the next steps will be for his flxm to complete the primary and secondary- research data that will serve as background discussion Eor the committee's next meeting to identify strategic marketing goals. The nest meeting is scheduled for August 28, 2006. A presentation of the final plan is proposed Eor the September EDA meeting. 6. Adjournment The meeting of the EDA Marketing Committee adjourned at 6:30 p.m. Submitted by: (~~~~~i Catherine Mehelich Director of Economic Development Appendix D: 8/28/06 EDA Marketing Committee Meeting Minutes MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY MARKETING COMMITTEE HELD AT ELK RIVER CITY HALL MONDAY, AUGUST 28, 2006 Members Present: Jerry Gumphxey, Gary Santwire, Chris Carlson, Dan Tveite and Maxk Urista Members Absent: Jim Barthel, Dave Ehlers Staff Present: Director of Economic Development Catherine Mehelich, Community Development Director Scott Clark Introductions /Overview of Plan Process Murray Wolf of Wolf Marketing & Media presented a brief overview of the project plan and schedule. 2. Presentation and Discussion of Research Findines Mr. Wolf presented the background, methodology and the situation analysis which includes a review of the overall business environment, primary and secondary target markets, competitors and the City of Elk River. The following points were presented: • The overall business environment for our area is healthy, strong, above national average and growing. • The Northwest Metro location is the first consideration for the city's primary target market of small to medium sized light manufacturers. Then transportation, workforce, infrastructure, specific sites and a city's reputation. Elk River is considered because of location. • Financial incentives are not the key in the site selection process but can affect fmal outcome Eox comparable locations. • After site selection, users want commercial and industrial areas to remain isolated to avoid traffic issues. Users worry about potential adjacent changing land uses and reduced design standards that could affect their business image. • Economic Development Division staff is interested, aggressive and responsive. Recent changes have alleviated most past concerns regarding the other departments and the city's development process. Users reported better communication and coordination between city departments now. • Among the industrial broker focus group, most stated that Northwest Metro is fast location consideration fox light industrial. The key decision-making criteria is based on where the business owner ox business executive hues, then transportation access, cost and proximity to workforce, vendors and clients. • The city's secondary target market of industrial brokers and site selectors noted that they worry about getting paid iE they bring clients to city owned sites and most think in terms of sites not cities unless hired to market a city. EDA Marketing Committee iVfinutes August 28, 2006 Page 2 • Industrial bxokexs noted small companies care more about cost, larger companies care more about productivity. After site selection, their clients worry about employee retention and how they will be impacted as the city grows, wanting to see no eroding of design standards and land use. • Most Northwest Metro industrial users want to build ox buy, not lease. There seems to be more demand from large (100k sf+) users than from smaller (<SOk sf users). • Elk River and Rogers axe perceived to have few available industrial sites for the large users. • Everybody wants commercial/retail development but bxokexs emphasized you can't force it. Just because a city wants nicer restaurants, spending resources and time targeting those folks is not going to generate results. Those users will come to the community when they are ready. • Ramsey and Monticello has become very aggressive in the industrial land market recently. The committee discussed the concept of hiring brokers to market city owned industrial properties. Committee member Santwire stated private industrial landowners have tried marketing property through big name brokers with no success -specifically Colliers Towle marketing Elk Path Business Center. Community Development Director Scott Clark stated when Brooklyn Park txansitioned from targeting small manufacturers to large (100k sf +) manufacturers they tried a strategy to get inside the broker network. The strategy becomes a very relationship-based product where the objective is to get on the short list. Mehelich mentioned she has heard from bxokexs that it is often the ease of working with a city on the development process and reputation. She stated that we to consider that the broker community is best at locating medium to large light industrial market and smaller users tend to avoid having to pay brokers. Tviete stated that land availability is number one with broker community anyway, regardless of being the best city to work with. Santwire stated he felt if the city made bxokexs aware that they'd be paid a fee the city would see action on the lots in a short time. Urista agreed if Elk River was willing to pay 6% of the broker commission, which is a big sale advantage to the client. Uxista stated is important to know who the people are and that there is probably 6 ox 7 commercial brokers that do 90% of the business, and probably 3 that know the Northwest quadrant and as long as word gets out to them the message will spread. Clark stated Brooklyn Park never paid a broker fee and instead felt what was more important was an assurance that they are going to get through the process, knowing the expectations and fees, and the city ended up selling the development process and building a reputation on that experience. The consensus of the committee was that rather than partnering up with any one broker, the city should consider or continue to compensate brokers with either a finder's fee or a percentage of the buyer's cost and most importantly that the city make that incentive known through to the brokerage community. The committee discussed the land issue. Mx. Wolf noted the city must decide what kind of development before it establishes new development sites. Santwire asked do we like what happened near Home Depot? If yes, then let's just recreate that rather than spending a lot of time discussing what we want. Carlson agreed, and that the market would dictate size and product. Mehelich stated there is a market to discuss between where the natural market is (small to medium) and what we know we don't want to target (corporate campus) and that opportunity is the medium to large market. She mentioned the challenges (wetlands, gas lines) the city ran into with developing the land (Northstar Business Paxk and Gateway) the city acquired ahead of time without really planning ahead for what would go there. She stated it is important to agree on the vision for what size users we want before we just buy EDA Marketing Committee Minutes A~g~sr zs, zoos Page 3 land fox the sake of having it and making it available. Tviete noted that Northstar design was dictated by the three pxesale users we had, with Gateway we have the opportunity to hold out for medium to large if we know that's what we want. Mehelich stated we need to understand that just because we shift focus to include medium to large size companies, it may take longer because that is not our current natural market. Tviete stated the other perspective is when your small to medium sized grows and becomes your medium to large sized, like Sportech. Clark stated the city's previous policy on abatement was singularly on employment and recently market value has become a key consideration for assistance. As an example, in order to help equalize out the city's residential value base it maybe important to wait for $70/sf buildings rather than to accept $40/sf buildings immediately. He stated it is also about balance to have a little bit of everything and hold to the vision fox each of these and not to cave in too soon in case you don't get the immediate results. 3. Discussion of Objectives and Strategic Alternatives Mr. Wolf requested the committee's feedback on Elk River's perception today and what the vision should be. He presented the following strategic options fox feedback and discussion: • Continue to focus on small to medium sized light industrial manufacturers • "Aim higher" at medium to large light industrial manufacturers • Moxe focus on existing businesses • Target complementary firms • Target commercial/retaIl • More focus on industrial brokers He mentioned these options are not mutually exclusive as we can do any number of these at one time. Urista stated he ran into a businessperson who is moving his business from north Minneapolis near the commuter rail because of the cost of employee's being late. He stated that commuter xaIl needs to be emphasized as a location advantage. Santwixe agreed, and stated we need to continue doing what we've been doing, and to "aim higher" to not cave in on some of this, and agreed with most of the list of options presented. He stated with regard to targeting complementary fnms, axe easier to put into place as soon as you get bigger ones, and that commercial/retail will take care of itself and brokers aren't that important. Tviete agreed, and thinks we need to aggressively start looking toward what land we want to bring online and at what point because we have a limited inventory right now. Santwixe stated he has a hard time imaging where the larger sized companies would locate without a large parcel in mind. Tviete stated even if we had land like Northstar, it does no good to aim higher if the physical limitations prevent it. Carlson stated options are great if you have them. Clark reported that staff will be providing the EDA an update on the work plan fox developing the Gateway Business Center and that will be discussed on September l l~h. He stated it seems cities go through an evolution/maturing process, until now the one thing we didn't have from a marketing standpoint was certain business recognition, for example using the names of the Target data center and the coming data center (even though they don't want to be named). That starts to elevate the community in terms of name recognition and triggers other opportunities. Urista stated the reality is Elk River has been known as having no place to build and that is a problem we need to address and make sure we don't have in the future. Santwire asked Gumphrey the Council's standpoint and if he would vote fox more industrial park. Gumphrey replied yes, we can't go anywhere if we don't have the land. Santwire asked for EDA Marketing Committee Minutes August 28, 2006 Page 4 staffs standpoint. Clark replied staff is looking at the analysis and we can zone land industrial but have to consider the location as well as other things like its accessible. Santwixe stated it seems we are in need of this property in such a timeframe that if we're going to have it will it will need to be purchased now with the idea that the zone will be for the site as opposed to rezoning and saying someday we'll use it as that. Mr. Wolf stated you could do both. He felt the Council needs to be buying land immediately. Clark stated the biggest straggle is fmding land that is not impaired by wetlands, gas line and power lines. The consensus was to identify property that can be purchased and developed in the short term and identify the inventory and phasing needed to provide options in the future. Carlson agreed that the perception among brokers he's talked to is that Elk River doesn't have land available and believes word spreads fast and if we had land secured the word would get out that there were opportunities there would be more brokers approaching the city to get tapped in. He stated if we had the land, at the very least through marketing plan, he felt we need to get on the short list for the companies in Maple Grove, Plymouth and areas that are quickly becoming closer to the city where companies are moving out because we've been excluded in the past because they don't even think of Elk River. Santwixe stated in Maple Grove there axe small to medium companies that can afford to own in Elk River if they compare it to the net rents and taxes in Maple Grove. Clark stated one of the other struggles with land is that larger companies want the properties around them to be of a reasonable standard and we do have a lot of older businesses that don't meet the modern day industrial standard and the biggest question is how to make those transitions, Gateway is a good example. Mehelich stated that is exactly what we heard from Great River Energy about locating to Gateway and their concerns about the image of the adjacent land uses and impact on their multi-million dollar corporate campus. Santwixe stated maybe there should be some kind of subsidy to these businesses to do something and felt the design standards are still pretty good. Clark stated he felt the standards are still pretty minimal but that staff tries to work with developers for example the buildings along Twin Lakes Road in Northstar Business Park. The consensus of the committee was agreement of the strategic options presented with Che exception of targeting the commercial/retall. The committee agreed the top three strategies would be the priority and to add leverage Northstar Rail within the marketing efforts. 4. Next Stens Mr. Wolf oWolf outlined the next steps and stated a draft plan will be prepared based on the committee's direction on strategies. Mehelich invited the committee members to attend the EDA meeting on September 11 for the presentation of the plan. Gumphxey requested the committee receive a draft copy of the plan for review and comment prior to the presentation. 5. Adjournment The meeting of the EDA Marketing Committee adjourned at 6:15 p.m. Submitted by: Catherine Mehelich Director of Economic Development Appendix E: Relevant News Articles ~aus_= 16, 200E 5:00 pm l};iiCzntral UHC Buys 17 Acres For New Technology Center (AP) Elk River, Minn. United Healthcare Services Inc. is buying 17 acres of land next to the Sherburne County Government Center. The company has plans to construct a technology and data center on the site, which sits just north of more than 21 acres the county sold to Target Corp. last year. The county board voted unanimously Tuesday to approve the sale. The land will cost United Health a little more than $1.5 million, said County Administrator Brian Bensen. The two parcels were part of 76 acres the county initially bought for $5 million to expand the Government Center. The leftover property will be used for that addition, Bensen said. When the county purchased the land, commissioners "directed us to make sure we return some of it to the tax rolls quickly," Bensen said. Using profits from the two land sales, the county will have enough money to pay off the entire property, Bensen said. The company expects to begin building once the sale is final and permits are approved, he said. United Healthcare Services is a unit of Minnetonka-based UnitedHealth Group Inc., the nation's second- largest health insurer. (© 2006 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.) Appendix E: Relevant News Articles (cont.) STAR NEN~S Posted: 8/15/06 County, data center pursue deal by Jim Boyle Editor For the second time since closing on the purchase of 76 acres of land early in 2005, Sherburne County has opportunity knocking on its door. UnitedHealthcare Services has come asking for about 16 acres of land for a data center, and it's willing to pay about $1.5 million for it. County officials have hammered out a letter of intent between the county and UnitedHealthcare, which will feel like deja vu for members of the Sherburne County Board of Commissioners. They had earlier approved a similar land deal with Target Corp. fora 159,400-square-foot data center that is well on its way to completion. The county sold about 30 acres of the 76 acres it controlled for that project. The land the county is selling had been prepared by the city of Elk River for industry when the county bought the site from Hoyt Partners L.L.P. The County Board was expected to act yesterday (Aug. 15) with similar expediency on the UnitedHealthcare Services proposal as it did with Target. "When an opportunity like this presents itself, you don't want to turn it down," Sherburne County Attorney Kathleen Heaney said. "We're absolutely elated." Heaney said economic development is at the forefront of the county board's interests, which makes it an easy proposition. Increasing tax base and high-paying jobs come with projects of this nature. "We're lucky we had the land that was available to bring in Target," Heaney said. "You can't ask for finer people." Data centers, Heaney said, provide for a nice transition between government buildings and the surrounding neighborhoods. UnitedHealthcare will have similar needs as the Target facility did, including the necessity to meet its incredible utility needs like electricity. Sherburne County still has not completed its analysis of its long-term needs for land and facilities on the remaining acreage. One project the county is still eyeing is that of a Veterans Administration clinic. Appendix E: Relevant News Articles (cont.) Copyright 2006 Star Tribune All Rights Reserved Star Tribune (Minneapolis, MN) August 25, 2006 Friday Metro Edition SECTION: NEWS; Pg. 1B LENGTH: 480 words HEADLINE: Northstar rail gets another big OK; The commuter line from Minneapolis to Big Lake has one last hurdle -the final funding agreement -which could come in May. BYLINE: Laurie Blake, Staff Writer BODY: Commuters in the Twin Cities' northwestern suburbs are now just three years away from being able to park their cars at a station and take the train to work. The metro area's first commuter rail service, the Northstar, between Minneapolis and Big Lake, was cleared by the Federal Transit Administration on Wednesday to move to final design. While there's one final step remaining, this a sure sign that the $307.3 million project is a go, said project director Mark Fuhrmann. The Northstar is now expected to clear the last hurdle, a final funding agreement with the federal government, in May 2007, Fuhrmann said. Service on the 40-mile line would begin in 2009. Wednesday's decision was the latest in a series of key developments that have boosted the Northstar line in the past few months. In May, project officials reached a tentative agreement with the Burlington Northern Santa Fe Railroad, on whose freight tracks the line will run. In June, Gov. Tim Pawlenty signed the state bonding bill that included $60 million for the Northstar project, to add to the $37.5 million approved by the state last year. The project is expected to be an alternative for commuters Coming from Sherburne, Anoka and northern Hennepin counties, they now use the increasingly congested Hwy. 10. Five trains will run to Minneapolis from Big Lake in the morning and five the reverse direction in the evening, with one round-trip reverse-commute trip a day. On weekends -six trains -three to Minneapolis and three back to Big Lake -will be regularly scheduled, and other trips may be planned for special events in downtown Minneapolis, Fuhrmann said. What's next? Project officials will finish design plans and take bids on the purchase of trains, stations and a maintenance base in Big Lake and on extending the Hiawatha light-rail line four blocks to connect with the commuter-rail line. They will also finalize the purchase of time slots on the Burlington Northern Sante Fe freight line for 12 passenger trips a day on weekdays and six on weekends. The commuter schedule will be part of a permanent agreement with the railroad. Gov. Tim Pawlenty welcomed the news that the project will move into final design and said his administration would work aggressively to get the line up and running as soon as possible. "Northstar is an important piece of Minnesota's transportation future," he said. "It will add more transportation capacity in one of the fastest-growing areas of the state and get commuters to work and home faster." Laurie Blake - 612-673-1711 NORTHSTAR facts Length: 40 miles. Stations: In Big Lake, Elk River, Anoka, Coon Rapids/Riverdale, Fridley and downtown Minneapolis. Riders: Estimated 5,600 daily. Car capacity: 150 passengers. Amenities: Work tables, on-board restrooms, power outlets. Capital cost: $307.3 million (50 percent federal, 33 percent state, 17 percent local). Service begins: 2009 LOAD-DATE: August 28, 2006 Appendix E: Relevant News Articles (cont.) MII~f8DtA REAL ESTATE JOURlt~l Tuesday August Ol 2006 Developer jumps into Northwest Metro 'doughnut hole' with big plans Beard Group assembles 619 acres in mostly untouched Hassan Township with talk of a new mall accompanied by more than 1,400 housing units. Don Jacobson Editor In the Twin Cities' northwestern suburbs, land is at a premium. Demand in this fast-growing part of the metro is great, and the supply -- especially within areas served by Metropolitan Council sewer lines -- is spotty and expensive. That's why a project the size and scope of the Beard Group's Stone's Throw is attracting some double takes. The project, located in the southeastern corner of Hassan Township, is relatively close-in compared to some other large northwest metro projects, only 18 miles from downtown Minneapolis along Interstate 94. Yet it's pegged for 1,428 units of housing and 120 acres of commercial uses spread over 619 total acres. The ambitious effort is taking advantage of a development "doughnut hole" in the I-94 corridor -- a highly desirable neighborhood that, thanks to infrastructure quirks, has until now remained beyond the reach of developers. In addition to the varied and complex mix of housing at Stone's Throw, its commercial area, near a planned new interchange at I-94 and County Road 101 (Brockton Lane), could become home to a new regional enclosed mall -- something the Twin Cities hasn't seen since the Mall of America's first phase was completed in 1992. All told, the project's build-out value could range from $750 million to well over $1 billion. Construction, pending all governmental approvals, is planned to begin next spring on the first phase of mixed-use and mid-density housing elements. The Beard Group is best known for its first-ring suburban redevelopment projects, such as Village Creek in Brooklyn Park, the Village at Circle Pines and several commercial and residential projects in Hopkins. But thanks in part to the increasing legal and cost barriers to doing such work, the firm is spreading out more into "greenfield" land development. In addition to Stone's Throw, the firm is working on the 370-acre Bridges of Washington County in Hugo. Thomas Gump, a development principal with the Beard Group, says the development will include three "environmental zones," with 200 of the 600-plus total acres given over to green space, with extensive parks, 14 miles of trails, water features and restored wetlands. That emphasis on environmental friendliness greatly helped in convincing key landowners, including the owner of a large sod farm, to sell to the Beard Group where they had turned down other would-be developers. "There were a number of different developers that tried to put this site together, maybe not as ambitious as ours, but smaller pieces," Gump says. "It's interesting to talk about what motivates sellers -- it's not always the case that if you just give them the most money they will sell. "One parcel had been in the family for 100 years. There was one owner before them, and that deed was from the U.S. government and was signed by Abraham Lincoln." Gump says the owner decided to sell when he read about a Sierra Club award given to the Beard Group for its Excelsior Tech Center project in Hopkins. "Those kinds of things really do make a difference if everyone's offering pretty much the same kind of money," he says. Hassan Township has largely avoided the large-scale housing and commercial development that is going on to its north in Rogers and its south in Maple Grove, in part because, as Hennepin County's only remaining township, it never had the resources to deal with major development. Rogers has its own municipal sewer system, for instance, while Maple Grove (which has imposed a housing moratorium) is hooked up to the Metropolitan Council's interceptor system. That resulted in a "doughnut hole" in Hassan with gung-ho development going on all around it. "Hassan Township is not in the business of providing urban services," says Brad Scheib, a consultant for the Hoisington Koegler Group, who serves as the township's planner. "In 2003 they executed an 'orderly annexation' agreement with the city of Rogers, which will be completed by 2030. So by then they'll be absorbed by Rogers, but at the same time they don't want to shut the door and say no to growth." Historically, he says, the projects in Hassan have been rural subdivisions and some small industrial, but that will change with Stone's Throw. James DePietro, a senior vice president for CB Richard Ellis who is handling the project's leasing and marketing, says that going by its sheer size and location, it's the most interesting planned community concept in the state. "It's just a phenomenal opportunity, what with all of the growth around it and to the north," he says. "It's an unintended consequence of the Met Council's rules on sewer extension. People had to leapfrog Hassan and go over it. For instance, Duke Realty has gone beyond it to build in Otsego, and now here we are back in Hassan - so it's essentially an infill project." But what's ultimately built there is dependent on the promise of a pair of major infrastructure improvements. The first is the extension of a sewer line from the Met Council's Elm Creek Interceptor to serve Hassan and parts of Dayton. Work on that sewer line began this year and is expected to finish in 2008. Then there's the proposed freeway interchange at I-94 and Brockton Lane. The prospects of that happening in the short term, however, are dicey. The proposal has yet to be funded by the state or federal governments, although U.S. Rep. Jim Ramstad says he has put the interchange on his priority list for federal funding. Hassan Town Administrator Danny Nadeau says a co-operative effort by his town, Rogers, Dayton, Maple Grove and others is under way to drum up support for the project. Despite the uncertain status of the Brockton interchange, the Stone's Throw commercial area has drawn considerable interest from major retail developers. Gump says a major mall builder, whom he declined to name, had reached an agreement to construct an enclosed regional mall on the site, but then backed off when mergers and possible mergers in the department store industry muddied the waters. That developer is still interested, Gump says, and may return with another proposal once the retailing ownership picture clears. A second set of well-known retail developers have also expressed an interest in building a mall at the site. Failing that, he says, the spot has also attracted interest from office developers or could also become the site of a single large company's new corporate campus. A new mall would make sense at the Stone's Throw site, says Andrea Christensen, second vice president of retail services for Colliers Turley Martin Tucker. "There is a demand for a mall up there," she says. "Southdale is the closest one. And if anybody can pull it off, it's the Beard Group. They have a great deal of vision." Christensen says she bases her view in part on the wild popularity of the Albertville Mall, an outlet mall that drew more than 4 million people in 2004. "That mall is one of the highest-grossing outlet centers in the country," she says. "If they can do that kind of volume there, it shows that there's a lot of demand, so I think a mall in Hassan would be very successful," Appendix E: Relevant News Articles (cont.) Copyright 2006 Star Tribune All Rights Reserved Star Tribune (Minneapolis, MN) July 26, 2006 Wednesday Metro Edition SECTION: NORTH; Pg. 1N LENGTH: 625 words HEADLINE: Fridley rail station delayed; Northstar Commuter Rail's first stop outside downtown Minneapolis will require $9.5 million more BYLINE: Sarah Moran, Staff Writer BODY The Fridley station along the Northstar commuter rail line is on hold until an additional $9.5 million is secured. That money is needed in order for design, engineering and construction work to move forward. Rail critics say it's just the latest in a series of price jumps for the line that now carries a $317 million price tag. Project officials are hopeful the Fridley station will be built and open at the same time as the stations planned for Minneapolis, Coon Rapids, Anoka, Elk River and Big Lake, said Tim Yantos, executive director of the Northstar commuter rail. If the project's remaining federal funding is provided, those stations are set for construction in 2007 and 2008. But it's possible the train will whiz past 61st Way and East River Road in Fridley when the line opens in 2009. Although Fridley is in the contract with the railroad to be built at some point, there is no time frame attached like there is for the other stops. Officials from Burlington Northern Santa Fe, which owns the rail lines and property where stations would be constructed, told Northstar officials during negotiations this spring that they wanted the Fridley stop removed from the line, Yantos said. The reason they gave was the station's proximity to the Northtown Yard, where many of the railroad's freight trains switch tracks. The railroad was concerned the construction and operation of the commuter rail could create delays on their freight lines, Yantos said. The station, he said, presented the most expense and technical challenge During negotiations a deal was reached that kept Fridley in the plans and gave the railroad another $9.5 million, said Steve Billings, Fridley City Council member and Northstar Corridor Development Authority (NCDA) executive committee member. "[The money] had to come out of the working capital budget, so now there's not enough money left in the budget to build all the stations," he said. "They essentially moved the money that had been set aside to construct the Fridley station and used that money to pay Burlington Northern." Railroad spokesman Steve Fornsberg said he had "no information on the additional money and how it would help," when asked about the relationship between the money and the railroad's concerns about the station location. "Our people don't have a concern about being unable to work through any issues," Fornsberg said. Rep. Phil Krinkie, R-Shoreview, isn't surprised by the jump in price. "Every three to six months they announce another cost increase on the project, so it's very, very difficult for anyone to follow how much the proposal has been cannibalized from its original proposal and how much the costs have increased," he said. Krinkie, who opposes the project, said he suspects original price estimates and proposal details for Northstar and other transit projects are initially presented in a misleading way in order to gain public support. Then costs go up, but once some money has been spent, people are less likely to scrap the project, he said. Northstar project leaders are confident they'll be able to get the $g.5 million needed to move Fridley ahead, Yantos said, possibly from federal sources. "Eventually it will be built because we believe there's tremendous interest," he said, mentioning current and future businesses such as Medtronic. Bob Barnette, Fridley City Council member and delegate to NCDA, said the stop is important as a major hub for residents in Fridley as well as Columbia Heights, New Brighton and Brooklyn Center. Though Barnette said he is concerned about the rising costs, he's confident the Fridley station will be built. "There have been a million roadblocks thrown at this thing over the years, but we tend to work them out," he said. Sarah Moran - 612-673-7512 LOAD-DATE: July 26, 2006 Appendix E: Relevant News Articles (cont.) Copyright 2006 Dolan Media Newswires Finance & Commerce (Minneapolis, MN) June 22, 2006 Thursday SECTION: NEWS LENGTH: 500 words HEADLINE: Indianapolis-based Duke Realty Corp. flexes its development muscle in Twin Cities BYLINE: Burl Gilyard BODY Duke Realty Corp. has two metro sites under contract for industrial development, including a 137-acre Lakeville parcel that it plans to develop into 1.5 million square feet of space. The second project is in Afton, where the company hopes to develop about 350,000 to 360,000 square feet on a 37-acre site. Pat Mascia, senior vice president for Indianapolis-based Duke's Twin Cities operations, said that he anticipates closing on both parcels before the end of the year. The Lakeville site will be a phased project, developed over three to five years. "The plans are to turn that into a bulk warehouse/office warehouse industrial park," Mascia said. Mascia cited the proximity to the interstate as a key part of the site's appeal. "It's a growing community. It's well- located real estate." The Lakeville site, at Dodd Boulevard and County Road 70 near Interstate 35, is currently farmland. "This is furthering our strategy of focusing on two industrial submarkets, the south and the northwest," Mascia said. He said Duke has plans for another large industrial park in Otsego, in the booming northwest submarket. The Afton site, near Manning Avenue and Hudson Road off Interstate 94, doesn't fit into either of those geographic submarkets. "It was a site that just looked to be a very good development site; we had an opportunity to use the land quickly," Mascia said. "The Afton site is more of a one-off development opportunity." Last year, Duke sold 30 local buildings totaling 2.15 million square feet as part of a large national deal with Chicago-based First Industrial Realty Trust. The deal signaled that Duke was paring flex properties from its industrial portfolio. Meanwhile, Duke has been getting busy again as a local developer. Last November, Duke completed Crosstown 12, a 324,000-square-foot industrial facility in Brooklyn Park. The project is now close to 70 percent leased, according to Mascia. Duke is also planning a 1.4 million-square-foot industrial development in Otsego. Mascia said Duke is "interested" in breaking ground this year "if market conditions permit." "We're primarily a developer," Mascia said. "Basically we're able to do better and make more money as a developer than we can in the current acquisitions market with pricing the way it is." In April, Duke broke ground on the 322,000-square-foot Norman Pointe I I Office Tower in Bloomington. The Norman Pointe project put Duke first out of the gate with a new office tower in the Twin Cities market. The project is slated for completion in October 2007. Also next year, Duke hopes to begin construction on an ambitious project called The West End, adding more than 1 million square feet of office space and a 360,000-square-foot lifestyle center at Highway 100 and Interstate 394. "We hope to break ground next summer on the retail portion," Mascia said. Duke is also serving as general contractor for the Amherst H. Wilder Foundation, which broke ground last week on its new $36 million headquarters in St. Paul. LOAD-DATE: June 28, 2006 Appendix E: Relevant News Articles (cont.) Copyright 2006 PR Newswire Association LLC. All Rights Reserved. PR Newswire US June 21, 2006 Wednesday 3:26 PM GMT LENGTH: 501 words HEADLINE: SourceGroup Completes New Manufacturing Facility For Minnesota-Based Sheet Metal Fabricator; New facility helps growing business streamline operations DATELINE: MINNEAPOLIS June 21 BODY: MINNEAPOLIS, June 21 /PRNewswire/ -- SourceGroup, a Minnesota based real estate developer and general contracting firm, announced that the recent construction project for Crystal Distribution, Inc.'s (CDI) new Elk River manufacturing facility, has been completed. The new 32,000 sq. ft. facility provides more space and increases production efficiency for the leading manufacturer of HVAC curb-adapters. "SourceGroup did an outstanding job of organizing and managing the project," says Pat O'Brien, President of CDI. "Their recommendations, design and construction helped us to create a new image for our company." Prior to construction of their new facility, CDI operated out of 21,000 sq. ft. of space at amulti-tenant building near Maple Grove, Minnesota. "It was a logistical nightmare," says Mr. O'Brien. "We leased four bays located at different ends of the building, which meant that we were constantly moving products and materials from bay-to-bay." In order to improve production efficiency and manage growth CDI looked to build a more efficient manufacturing facility. After contacting various contractors Mr. O'Brien chose SourceGroup. "We just felt comfortable working with them," says Mr. O'Brien. "And, often times that's the most important factor." For the project, SourceGroup was able to complete the construction in four months -- on time and on budget. The new 32,000 sq. ft. facility features 4,800 sq. ft. of office space, higher ceilings for additional storage space, five loading docks and two drive-in bays. Along with higher ceilings, CDI was able to install an overhead crane system, which allows trucks to back in for loading and unloading purposes. "At the old facility we needed a dozen guys just to load one piece," says Mr. O'Brien. "Now all we need is one guy to operate the controls and our loading and unloading is finished in no time." The facility also features a large dust collection system that captures and filters the smoke produced from welding. For safety the new facility features astate-of- the-art fire alarm system recommended by SourceGroup. "Did SourceGroup have insight on how to do things --absolutely," says Mr. O'Brien. "They were a big part in helping us achieve the success we've had so far." For additional information on SourceGroup visit http://www.sourcegroupllc.com/ . About SourceGroup, LLC With offices in Wayzata and Duluth, Minnesota, SourceGroup provides clients with total quality management of real estate development and construction projects from design input, value engineering/cost saving techniques, budgeting, bidding and on-site construction management. From small office build-outs to state-of-the-art medical facilities SourceGroup offers flexible financing, including long-term lease and lease-to-own options, to provide clients a turnkey process. CONTACT: Sean Foy, Linnihan Foy Advertising, Ph: +1-612-238-3002, or Fax: +1-612-238-3000, or Sean@linnihanfoy.com Web site: http://www.sourcegroupllc.com/ SOURCE SourceGroup URL: http://www.prnewswire.com LOAD-DATE: June 22, 2006 Appendix E: Relevant News Articles (cont.) Ir~~xi:sor~ EAi E~T1TE JOURNA! Friday June 02 2006 Developer acquires key downtown Elk River parcel MetroPlains to get started on Jackson Place retail/apartments Staff Writer REJournals.com The redevelopment of downtown Elk River reached a milestone in May when the city successfully completed a title transfer of its Jackson Square parking lot to an entity controlled by MetroPlains Development, which will construct a new retail/apartment building on the key site. "As I signed the papers transferring the ownership of Jackson Square in downtown Elk River from the city to MDI Limited Partnership Number 70, I was aware of the event's historic nature," said Elk River Mayor Stephanie Klinzing. "This is indeed a major step toward the transformation of downtown Elk River from the great place it has been for over 100 years to the even greater place it will be for the next 100 years and on." MetroPlains agreed to allow the property to continue to be open and used as a public parking lot until it was ready to begin construction in June of Jackson Place, which will include 11,000 square feet of first-floor commercial space along Main Street and Jackson Avenue, with 32 rental housing units on the upper two floors. Construction of Jackson Place was expected to be completed by Fall 2007. Jackson Place joins the under-construction Bluffs of Elk River retail/condominium building in the city's downtown redevelopment plan. The Bluffs of Elk River is at the corner of Main Street and the County Road 42 bridge. Construction has begun and is expected to be completed by Summer 2007. More than half of the condo units have been sold, city officials say. The Bank of Elk River expansion project and the Rivers Edge Commons Park project will also play a large role in revitalizing the historic downtown area. The park will run from Main Street to the Mississippi River and will include astreet-level plaza, and amphitheater with seating in the center portion and a gazebo at the river level. Appendix E: Relevant News Articles (cont.) Copyright 2006 PR Newswire Association LLC. All Rights Reserved. PR Newswire US June 1, 2006 Thursday 3:30 PM GMT LENGTH: 492 words HEADLINE: Governor Signs Bonding Bill that Authorizes State Funding for Construction of Northstar Commuter Rail; Large crowd on hand to mark the event DATELINE: ANOI(A, Minn. June 1 BODY: ANOKA, Minn., June 1 /PRNewswire/ -- Governor Tim Pawlenty today signed the 2006 bonding bill, which includes $60 million in bonding authority for the state's first commuter rail line. A large crowd of elected officials and Northstar Commuter Rail supporters attended the event at the site of the future Northstar Elk River station. "Today is the culmination of years of hard work and commitment from thousands of individuals who have united to bring commuter rail to Minnesota," said Duane Grandy, chair of the Northstar Corridor Development Authority (NCDA). "Together, we look forward to completing this important link in the state's transportation system and begin riding the rails in 2009." The signing of the 2006 bonding bill fulfills the state's commitment needed to seek federal matching funds for Northstar's construction. The state will pay for approximately 33 percent of Northstar's $307.3 million total construction cost. In 2005, legislators approved the state's first installment -- $37.5 million in bonding authority. Local governments along the line are paying for 17 percent and the Federal Transit Administration (FTA) is expected to provide a 50 percent federal funding match. The NCDA is hopeful that the FTA will approve its funding commitment later this year. "When the Governor signed the bill that ensures state funding for Northstar Commuter Rail, he triggered the beginning of a new phase in the project's development," said Tim Yantos, NCDA executive director. "Over the next few years, we'll finalize the detailed agreements with BNSF Railway for use of its train tracks, make the needed track and signal improvements and build the Northstar stations. Minnesotans will begin to notice visible evidence that Northstar is on its way." According to an agreement in principle reached by the state, the NCDA and BNSF, the Northstar project is planned to provide five trips to Minneapolis and one reverse trip during weekday mornings, five trips to Big Lake and one reverse trip during weekday evenings and three round trips on weekends. It's expected to provide more than 3 million rides per year. About the Northstar Commuter Rail Project The Northstar proposal is for commuter rail service on the 40-mile segment of existing track along Highways 10 and 47 from Big Lake to Minneapolis. Stations are proposed for Big Lake, Elk River, Anoka, Coon Rapids, Fridley and Minneapolis. It will offer a convenient connection to the Hiawatha LRT line in downtown Minneapolis. The NCDA is a joint powers board of 30 counties, cities, townships and regional railroad authorities along the Northstar Corridor, which covers an area from downtown Minneapolis to Rice, north of St. Cloud. For more information about the Northstar Commuter Rail project, please visit http://www.mn-petonboard.com. CONTACT: Tim Yantos for Northstar Commuter Rail Project, +~-763-323-5692 Web site: http://www.mn-getonboard.com/ SOURCE Northstar Commuter Rail Project URL: http://www.prnewswire.com LOAD-DATE: June 2, 2006 Appendix E: Relevant News Articles (cont.) Copyright 2006 PR Newswire Association LLC. All Rights Reserved. PR Newswire US May 22, 2006 Monday 2:50 PM GMT LENGTH: 602 words HEADLINE: Minnesota Legislature Approves Final Commuter Rail Funding; Strong, bi-partisan support gives Northstar green light to seek federal matching funds DATELINE: ANOKA, Minn. May 22 BODY: ANOKA, Minn., May 22 /PRNewswire/ -- This weekend, the Minnesota Legislature overwhelmingly approved $60 million in bonding authority requested by Governor Pawlenty for construction of the state's first commuter rail line. Governor Pawlenty is expected to sign the bill into law soon, which will allow the state to seek federal matching funding for construction of the Northstar project. "The future for commuters looks very bright! They'll finally have a transportation alternative that allows them to travel more quickly and efficiently," said Rep. Kathy Tingelstad (R-Andover), chief author of the Northstar legislation in the Minnesota House of Representatives. "The action of the legislature sends a clear signal that Minnesotans are strongly behind Northstar Commuter Rail. We're optimistic that the federal government will now complete the funding package needed for Northstar." The total construction cost of Northstar is estimated to be $307.3 million, with local governments along the line contributing 17 percent. The state's portion -approximately 33 percent -was partially funded in 2005 with $37.5 million in bonding authority. This year's $60 million in bonding completes the state's share. The Northstar Corridor Development Authority (NCDA) will now complete its application to the Federal Transit Administration (FTA) fora 50 percent federal funding match. The FTA recently provided encouragement for the project to proceed with final design and is expected to lock in its funding by this fall. "Delivering this project to the residents of the Northstar Corridor required years of hard work and a lot of patience," said Sen. Don Betzold (DFL-Fridley), chief author of the Senate's Northstar legislation. "But in that time, support has continued to grow among community leaders and residents -the future users of Northstar Commuter Rail." On May 8, the NCDA, the state of Minnesota and BNSF Railway -whose tracks the Northstar project will utilize -reached an agreement in principle that outlines the key financial terms for Northstar construction and operation. According to the agreement in principle, the Northstar project is planned to provide six round trips per weekday, during the morning and evening commute times, and three round trips on weekends. The project will run on existing train tracks between Big Lake and downtown Minneapolis, where Northstar will link to the Hiawatha Light Rail Transit (LRT) line. More than 3 million rides per year is the projected capacity for this commuter rail line. "Legislators and Governor Pawlenty made history this week by committing the state to its first-ever commuter rail line and we want to thank them," said NCDA Chair Duane Grandy. "Northstar is now on track to begin carrying passengers in 2009." About the Northstar Commuter Rail Project The Northstar proposal is for commuter rail service on the 40-mile segment of existing track along Highways 10 and 47 from Big Lake to Minneapolis. Stations are proposed for Big Lake, Elk River, Anoka, Coon Rapids, Fridley and Minneapolis. It will offer a convenient connection to the Hiawatha LRT line in downtown Minneapolis. The NCDA is a joint powers board of 30 counties, cities, townships and regional railroad authorities along the Northstar Corridor, which covers an area from downtown Minneapolis to Rice, north of St. Cloud. For more information about the Northstar Commuter Rail project, please visit http://www.mn-getonboard.com. CONTACT: Tim Yantos of Northstar Commuter Rail Project, +1-763-323-5692 Web site: http://www.mn-getonboard.com/ SOURCE Northstar Commuter Rail Project URL: http://www.prnewswire.com LOAD-DATE: May 23, 2006 Appendix E: Relevant News Articles (cont.) Copyright 2006 Star Tribune All Rights Reserved Star Tribune (Minneapolis, MN) May 5, 2006 Friday Metro Edition SECTION: BUSINESS; Pg. 2D LENGTH: 392 words HEADLINE: Home building stays level with 2005; The number of permits issued to metro builders fell 7 percent for April but is off just 0.5 percent year-to- date. BYLINE: Jim Buchta, Staff Writer BODY: Residential construction activity in the Twin Cities metro area remained flat last month, according to data released Thursday by the Builders Association of the Twin Cities. In April, home builders were issued 670 permits to build 1,177 units. That's almost 7 percent fewer permits and 3 percent more units than in April 2005. "The market pace thus far seems to be similar to last year," said Curt Swanson, 2006 president of the Builders Association of the Twin Cities and president of Swanson Homes. So far this year, permit activity is running 0.5 percent behind last year at this time. Planned units are down 1.5 percent for the same period. After several years of record home sales that started in 2000, builders have been anticipating a slowdown. During the past year, the market has slowed and mortgage interest rates have risen. While interest rates still are near historic lows, they have increased to their highest level in four years. During the week ended April 27, the average fixed-rate mortgage was 6.58 percent, according to Freddie Mac, which provides funding to the secondary mortgage market. Last year at this time, the same mortgage was at 5.78 percent. Association-maintained housing continues to be popular, particularly in urban neighborhoods. Last month, condominiums and townhouses represented 49.9 percent of the total number of planned units. Year-to- date attached housing represented 48 percent of all new units. Minneapolis, a hot spot for condo developers, posted the highest number of planned units in the region. During April, builders planned to build 155 units in the city, for a total of 340 so far this year. Jim Buchta - 612-673-7376 RESIDENTIAL CONSTRUCTION January 2005 2006 Permits 717 670 Units 1,142 1,177 Value (millions) $217.4 $223.2 Top cities (by permits): Brooklyn Park, 35; Elk River, Woodbury, 34; Lakeville, 31; Shakopee, 30 (by units): Minneapolis, 155; St. Paul, 61; Blaine, 56; Coon Rapids, 55; Bloomington, 50 Year-to-date 2005 2006 Permits 2,539 2,535 Units 4,184 4,247 Value (millions) $818.2 $856.5 Top cities (by permits): Brooklyn Park, 143; Woodbury, 138; Otsego, 115; Lakeville, 109; Elk River, 95 (by units): Minneapolis, 340; Woodbury, 208; Bloomington, 182; Hugo, 175; Otsego, 173 Source: Builders Association of the Twin Cities GRAPHIC: CHART LOAD-DATE: May 5, 2006 Appendix E: Relevant News Articles (cont.) Victory Sports Bar & Restaurant opens in Big Lake Marketplace By Jennifer Edwards, Staff Writer Article appeared in the April 22, 2006 issue of fhe West Sherburne Newspaper, Big Lake, MN VICTORY GRILL AND BAR is the first business to open its doors in the Big Lake Marketplace Victory Sports Grill and Bar opened their doors in the Big Lake Marketplace Monday after a ribbon cutting ceremony with the Big Lake Chamber of Commerce. The first customers to come through the door were Tom Hauge, Mike Nyman and Kate Severson. "We helped to build it," Hauge said. "So of course, we had to come and try the food." The new smoke-free restaurant with a vintage sports theme is decorated in maroon and gold Gopher colors. One wall is covered with 1,640 baseballs and a bleachers area, complete with chain link fence, which separates the bar from the restaurant. Part of the dining room features a football floor covering and some of the door handles are made from baseball bats. "The architects were very creative and imaginative," said Ron Ulven, who owns the restaurant with his wife Deanna and son, Mark. "It has shaped up beautifully," says Dale Vogl of First Federal Savings Bank. "It has really come together very nicely." "This is a family-owned restaurant and we wanted the place to be appealing to families," said Ron. The Ulven's son Rob is also working at the restaurant as floor manager in charge of promotions. He designed their logo. "We are very pleased with our location," said Rob. "Being right on Hwy. 10, we may not have to do much promotion." Diners can choose to watch Kitchen Manager John Kunze and his staff prepare their food through a large glass window as they enjoy the family friendly ambience. "We created the menu to fit the area," Kunze said. "We have something to appeal to everybody, including a children's menu. All our steaks are hand-cut and fresh, never frozen." A Kirby cut, 10 ounce sirloin is sure to be a crowd pleaser. Other menu items include pasta, Mexican dishes, shrimp, fish and salads, the house special chicken wild rice soup and delicious desserts. All menu items are also available to take-out.You can call (763) 263-5555 to place an order. "We had a very positive response at our Saturday VIP night," sys General Manager Mark Christensen. "We want people to remember our food and our service." The restaurant is open from 11 a.m. to 1 a.m. Monday through Saturday and 9 a.m. to 1 a.m. on Sundays. "We serve Sunday brunch from 9 a.m to 2 p.m." Christensen said. "We will be serving food until midnight, seven days per week." For more information visit the website, www.victorysportsgrillandbar.com Appendix E: Relevant News Articles (cont.) Copyright 2006 Pioneer Press Pioneer Press, St. Paul, Minn. Distributed by Knight/Ridder Tribune News Service March 19, 2006 Sunday SECTION: STATE AND REGIONAL NEWS ACC-NO: 20060319-SP-0319-N orthstar-rail-I in e-picks-up-steam LENGTH: 1123 words HEADLINE: Northstar rail line picks up steam: Commuter train project from Big Lake to Minneapolis still faces significant obstacles BYLINE: Charles Laszewski, Pioneer Press, St. Paul, Minn. BODY: Mar. 19--Of the half-dozen big mass-transit projects under discussion for the Twin Cities area, the Northstar commuter rail project looks like the closest thing to a sure bet. Millions of dollars have already poured into the 40-mile railroad line from Big Lake to Minneapolis. Gov. Tim Pawlenty included another $60 million for the project in his proposal for the bonding bill that will be considered by the Legislature this year. Earlier this month, the Federal Transit Administration granted approval for the Northstar Corridor Development Authority to move into the final design stage. Developers along the route are lining up housing projects near the train stations. Still, there are plenty of obstacles blocking the $265 million project -- Federal funding is becoming more difficult to obtain as more projects compete for a shrinking pool of dollars, said Tim Yantos, executive director of the development authority and the Northstar project office. -- Tough negotiations continue between the development authority and Burlington Northern Santa Fe Corp. over use and improvement of the company's tracks. -- Negotiations must be completed with a local farmer for his Big Lake property, which is slated to be the site for the station and the maintenance facility. "We really are hoping to stay on schedule and be open in 2009," Yantos said. "It will take a tremendous effort, and some luck, to get it done." Like the proposed Central Corridor light-rail line between Minneapolis and St. Paul, the Northstar line has to come up with acost-effectiveness index number for the federal transit officials that is low enough to move it ahead of other projects around the nation. "The FTA restrictions get tougher and more costly because of the demand," Yantos said. "Very few projects get through the funnel." Yantos said that if the $60 million in Northstar bonding is passed by the Legislature, project officials will start the process in June for the full-funding grant agreement. Getting that approval could take up to a year, he said Some construction, such as moving electrical and other utilities in downtown Minneapolis, could begin in the fall, Yantos said. Next year, project officials would like to build the train stations in Fridley, Coon Rapids, Anoka, Elk River and Big Lake, he said. At the moment, the Big Lake station and train-maintenance building is no more than a farm field with portable irrigation sprinklers standing guard. The authority needs to negotiate a price with the farmer and then get the land annexed to Big Lake, said Scott Johnson, Big Lake's acting city administrator. Now, the land sits in Big Lake Township, which doesn't have the necessary water, sewer and other utilities for the maintenance building, he said. Yantos said developers already are talking about $4 billion in development along the corridor, much of it in new housing. But some of that development would have happened anyway. John Elliott, a broker for Rosemount Realty, which is expected to lay footings on The Bluffs 67-unit condominium development in downtown Elk River, said the project and the nearby Jackson Place apartment complex were inspired by the proximity to the Mississippi River and the city's desire to redevelop its downtown, rather than by the train. The city is helping finance the project with tax-increment bonds, and half of the units are sold, nearly all of them to people who already live and work in the area, Elliot said. Since the Northstar line first popped up at the Capitol in the late 1990s, it has generated strong opposition, but Yantos said that has receded in recent years. Nor did he fear that a review by the state auditor's office, released last month, would spur more opposition. The report found that between January 2000 and May 2005, the Anoka County Regional Railroad Authority and the Northstar Corridor Development Authority hired three of the same contractors who billed both organizations for the same services. In those cases, the auditors could find no evidence that the two organizations were splitting the costs or that they weren't billed twice for the same service. About $1.1 million over the five years fell into that category. "Overall, the contracts are sound and contain adequate contract-monitoring procedures," the auditors wrote. "However, we believe NCDA and ACRRA can take some additional steps ... to ensure that their contracts are monitored effectively." Likewise, the review dinged Yantos for his use of a public credit card for 222 meals costing $8,428 from January 2003 to July 28, 2005. The auditors said Yantos should make sure the meals really were necessary and should list the full names of people being fed, rather than just their initials. "It was pointed," Yantos said. "Those who are not in favor of commuter rail, there are some interesting points. But they gave us some high marks." Yantos said all the meals were justified, and he has begun adding the last names. As for contract overlaps, the system is working well, he said, but the rail authorities are looking into whether it makes sense to have one entity with a single contract with the other organizations reimbursing for their share. Rep. Mary Liz Holberg, the Lakeville Republican who leads the Transportation Finance Committee, said she never thought the Northstar line made sense, but she doubted the auditor's report would make any difference. Sen. Steve Murphy, a Red Wing Democratic-Farmer-Labor member who chairs the Senate's transportation committee, said he will keep moving the project forward and the report is "not even a ripple in the water." Charles Laszewski can be reached at 651-228-5458 or claszewski@pioneerpress.com. Northstar commuter rail 1997: A joint powers board of 30 governmental bodies forms the Northstar Commuter Development Authority to push for a train line from Minneapolis to St. Cloud. 2000: The Federal Transit Administration authorizes preliminary engineering work. 2003: The line is cut back to run from Minneapolis only to Big Lake. 2005: The Minnesota Legislature approves $37.5 million for Northstar in the bonding bill. Three months later, the U.S. Congress approves $80 million for the project. 2006: Gov. Tim Pawlenty recommends $60 million in the bonding bill for Northstar. Committees will hold hearings on it this month and will act on the bonding bill by May. If the money is approved, the development authority will attempt to obtain afull-funding grant with the Federal Transit Authority and begin construction. Copyright (c) 2006, Pioneer Press, St. Paul, Minn. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or a-mail reprints@krtinfo.com. LOAD-DATE: March 19, 2006 Appendix E: Relevant News Articles (cont.) Copyright 2006 Dolan Media Newswires Finance & Commerce (Minneapolis, MN) March 7, 2006 Tuesday SECTION: NEWS LENGTH: 158 words HEADLINE: Homebuilding steady in February, according to Builders Association of Twin Cities BYLINE: Finance and Commerce Staff BODY: Residential construction moved along at a "steady pace" last month, according to the Builders Association of the Twin Cities. Twin Cities municipalities issued 542 residential building permits for 872 dwelling units valued at $187.2 million last month, according to BATC. Compared with February 2005, permits and units were up 15 and 19 percent, respectively, and value increased by 22 percent. Year-to-date totals through February (1,155 permits, 1872 units, $390.2 million) are also ahead of last year's pace (1,082 permits, 1,678 units, $344.8 million). Woodbury issued the most permits last month (33), followed by Lakeville (28), Brooklyn Park (27), Otsego (27) and Farmington (24). Planned unit leaders were Bloomington (125), Woodbury (58), Elk River (45), Farmington (40) and Minneapolis (37).Multifamily housing accounted for 46 percent of February's planned units. In 2005, 52 percent of the units were "attached" or multifamily dwellings. LOAD-DATE: March 7. 2006 Appendix E: Relevant News Articles (cont.) Copyright 2006 Dolan Media Newswires Finance & Commerce (Minneapolis, MN) February 23, 2006 Thursday SECTION: NEWS LENGTH: 864 words HEADLINE: Big Lake, city of 9,000 between Minneapolis and St. Cloud, continues to grow at fast pace BYLINE: Burl Gilyard BODY Big Lake keeps getting bigger. The Sherburne County city of 9,000 between Minneapolis and St. Cloud has been booming and is expected to continue growing at a fast pace in the foreseeable future."By 2020, we'll be around 20,000 people," said Jim Thares, community economic development director for the city of Big Lake. Thares said that from 1998 to 2005, the city averaged 210 new units of housing a year. The planned Northstar Line commuter-rail service will also solidify Big Lake's connection to the metro area. "The train ends or starts, depending on your perspective, right here in Big Lake," Thares said. "It's also going to be the site of the train maintenance facility." An old real estate adage holds that "commercial development follows rooftops." So it goes in Big Lake. Last year, work was completed on the Big Lake Industrial Park East, a 68-acre project with approximately 380,000 square feet of leaseable space. And the wheels are starting to turn for a large mixed-use project straddling U.S. Highway 10, dubbed Big Lake Marketplace. Big Lake-based Dynamics Land & Design Co. LLC is the master developer for the project, which calls for 110 acres of commercial development, 90 acres of industrial projects and more than 350 new homes. There's also talk of a 60- to 68-room hotel, and early conceptual plans even call for a small ballpark within Big Lake Marketplace. "This is sizable. This would be the largest commercial and industrial project that we've done as a company," said Marly Glines, owner and chief manager for Dynamics Design & Land. "We're adding rooftops adjacent to all of this commercial, and the city of Big Lake is growing in all areas." The process has been protracted. Dynamics began working on the project back in 2002. Dynamics bought more than 430 acres from six different property owners. The land, which had been part of Big Lake Township, was annexed by the city of Big Lake. "This project is roughly 3 miles from Elk River," Glines said. Dynamics has carved up the site into commercial parcels for sale on the north and south side of Highway 10. "In the area, most of the property back then was anywhere from $25,000 to $30,000 per acre. Today it's creeped up to be more like $40,000 to $50,000 [an acre] for raw land," Glines said. "I would say that we've put in a substantial amount of infrastructure on both sides of Highway 10." "When this is built out between industrial and commercial, there will be over $150 million in tax value," said Jim Brown, director of development for Dynamics. A few small projects are leading the way. The Victory Sports Grill is slated to open in May. On Wednesday, ground was broken for Options Inc., a local nonprofit with a 5-acre site. DIRECTV has a contract for an 8.71-acre site for a technical facility. There are spaces for potential big box retailers. Glines has plans for Commerce Park, a baseball field for "town teams." Atwo-story commercial building would be wrapped around part of the ballpark. "It's just a concept that we're working with the city on. [It's] all dependent upon city approval," Glines said. Glines is prepared to be patient, projecting that it could be 2010 before all of the commercial parcels in the project are sold. "The city's kind of warming up to it," said Thares, who noted there has been some concern about the project sapping vitality from Big Lake's downtown. But those concerns are being eased, Thares said. "We have a downtown that's about ahalf-mile away from this area that we're interested in reinvigorating and helping it stay as healthy as possible," Thares said. "The businesses that are going out there are probably the ones that would take up too much land to go into our downtown." Brian Ertel, president of New Hope-based Envision Corp., purchased a 7.55-acre site from Dynamics on the south side of Highway 10, at the west end of the project area. Ertel is planning asix-building office campus with total square footage ultimately topping 100,000 square feet. He's billing the project as the Marketplace Professional Center. "Certainly there's demand there, and the demographics are very strong. Big Lake happens to be smack dab between St. Cloud and Minneapolis. And both of those regions are growing toward each other," Ertel said. "We're expecting 25 percent [population] growth in the next five years. Big Lake does not have any sort of office campus like this." Ertel's goal would be to have a 50-50 split between office and medical office tenants. His preference is to lease space to tenants, but he's also willing to do commercial condos. Ertel is still awaiting for some city approvals for his project, scheduled to be heard at meetings in early March. His first building is slated to be 13,626 square feet. "I will begin construction on that as soon as I've got it 50 percent leased. We're close on that," Ertel said. "I'm not going to build six buildings hoping that they're going to fill." Ertel hopes to attract a clinic to one of his buildings. "We're talking to medical providers right now," he said. Ertel said he's trying to get ahead of the growth curve. "We're planning ahead so that we can handle the growth down the road," he said. LOAD-DATE: February 23, 2006 Appendix E: Relevant News Articles (cont.) ~t~~sois REAL ESTATE JOURNAL Friday February 10 2006 Great River to construct new Maple Grove headquarters Power supplier plans to move operations from Elk River Staff Writer RE]ournals.com Great River Energy, the second-largest wholesale power supplier in Minnesota, is moving its headquarters from Elk River to Maple Grove, and has hired a design and construction team to build a proposed 150,000-square-foot corporate headquarters facility there. Great River says The TEGRA Group will act as its representative for the project, while Perkins + Will has been designated as project architect and McGough Construction will be the general contractor. The company, which listed 2004 revenues of $540 million, has more than 700 employees, and says it will relocate staff members from Elk River in 2008. The project is subject to completion of land acquisition and gaining city approvals. The new headquarters will use what the company calls "green" building techniques with "state-of-the-art sustainable, energy and environmental design and construction technologies." Great River says more than 100 of its employees will remain at its existing Elk River facility -- which will evolve into an industrial site and house transmission and maintenance facilities as well as the Elk River Station power plant. Appendix E: Relevant News Articles (cont.) Copyright 2006 Dolan Media Newswires Finance & Commerce (Minneapolis, MN) February 7, 2006 Tuesday SECTION: NEWS LENGTH: 148 words HEADLINE: Elk River-based Great River Energy plans new headquarters in Maple Grove BYLINE: Finance and Commerce Staff BODY Elk River-based Great River Energy plans to build a 150,000-square-foot corporate headquarters in Maple Grove.The TEGRA Group of Minneapolis will act as the owner's representative for the project. Perkins + Will of Minneapolis will serve as project architect, while McGough Construction of St. Paul will be the general contractor. Pending approval from Great River Energy's board of directors, the company anticipates moving to the new facility in 2008.The facility is expected to be a "green" building utilizing state-of-the-art sustainable energy and environmental design and construction technologies. The company did not say how much the structure will cost to build. More than 100 employees will remain at Great River Energy's existing Elk River facility, which will evolve into an industrial site and house transmission and maintenance facilities. A power plant is also at the site. LOAD-DATE: February 7, 2006 Appendix E: Relevant News Articles (cont.) NIpI1tE8©IA ~~~ I~:~71~~'l~ dOUltN~l Friday January 27 2006 Duke unveils plans for major Wright County industrial park Otsego facility set for 1.4 million square feet, 122 acres Staff Writer REJournals.com Duke Realty has big plans for 170 acres of land it controls in Otsego: the firm says it plans to build the Twin Cities' "premiere master planned industrial business destination" at the Wright County site. Duke's plans call for an eventual 1.4 million square feet of industrial development along Highway 101 two miles north of Interstate 94. Some 122 acres of the area would be devoted to that use, while 48 acres would be sold to a residential developer. Pat Mascia, senior vice president of Duke's Twin Cities operations, says the firm has purchased 104 acres and is expecting to close on the remaining 66 acres soon. Combined with Duke's development of the Crosstown X and XII industrial parks in Brooklyn Park last year, it is adding significantly to its commitment to Northwest submarket. "(Otsego) enables us to continue implementing our strategy of developing new state-of-the- art bulk warehouse and office/warehouse facilities in this market," Mascia says. "The Northwest submarket is the Twin Cities' strongest industrial submarket and continues to draw strong demand from users seeking industrial space." The property is located between Rogers and Elk River, and Duke says it believes future tenants will be attracted to the site because of its location, access and great visibility. The site enjoys one mile of frontage on Highway 101. Mascia says Duke hopes to start construction on phase one of the project this year. Indianapolis-based Duke owns, manages or currently has under development over 5 million square feet of office and industrial properties in the Twin Cities area. It also controls over 36 acres of office/mixed use land for future development in suburban Minneapolis. Appendix E: Relevant News Articles (cont.) ~~~~ INNFXPOtIS~~~13.L,a Duke planning up to 1.4M sq. ft. of industrial space in Otsego MinneapolistSt. Paul Business Journal-January 93, 2Q06 by Sam Black Staff Writer Duke Realty last week bought a large tract of vacant land to build a new rzo-acre industrial park in Otsego. Indianapolis-based Duke is planning for up to r.4 million square feet of industrial space on the site, located about two miles north of Interstate 94 along the east side of Highway tot. Duke will sell off about 4o acres of the rzo acres it bought to ayet-to-be-determined developer of single- family housing and town homes. Pat Mascia, Duke's senior vice president for Minneapolis operations, said Duke reached a deal with the city of Otsego that allows the company to start grading and construction this year. The entire park won't be complete for five to seven years, depending upon demand. Duke is considering speculative development, which means it may start construction before securing tenants. Duke has devised a flexible development plan that allows for buildings to range from So,ooo to 300,000 square feet. The company is buying four separate parcels. It closed Dec. 30 on a ro4-acre parcel owned by Rolling Meadows Development, a limited liability company based in Elk River. Mascia didn't disclose the price, although he said the land investment will total between $ro million and $zo million. Dan Swartz, vice president at CB Richard Ellis' Bloomington office, helped Duke with the acquisition. Otsego City Administrator Mike Robertson said the city is reducing Duke's upfront water-and-sewer hookup charges, an incentive worth about $r.9 million. Robertson expects it will be a $roo million project when it's all done, adding diversity to the tax base and jobs to the community. "It'll be the biggest industrial development that Otsego has ever had. We've had a lot of residential growth in the past five years and a lot of retail growth the past two years," he said. Otsego has about tr,ooo residents in 34 square miles. That's about the same acreage as Bloomington, which has 83,000 residents. The site includes some rolling hills and wetlands that will be left as amenities for the residential land, Mascia said. Duke's decision to sell some of the land for residential development will help offset some carrying costs, such as taxes, until industrial demand catches up in Otsego, said Josh Huempfner, senior associate for Colliers Turley Martin Tucker in Minneapolis. Huempfner is marketing other property in the northwest market, but isn't involved in Duke's project. At ]east 600,000 square feet of industrial space is on the market in nearby Rogers, and that will compete with Duke's site for tenants, Huempfner said. Mayfield, Belgarde & Yaffe, of St. Louis Park and Plymouth-based Moen Leuer have recently developed industrial space in Rogers. Industrial developers, including Duke, are seeing the industrial market gain momentum. More than 3.5 million square feet of space should be absorbed in the Twin Cities industrial market in 2006, which could push overall vacancy rates down from the low teens into the single digits, Huempfner said. sblack@bizjournals.com ~ (6iz) z88-uo3 Appendix E: Relevant News Articles (cont.) MINNESOTA Tuesday November OY 2005 Elk River welcomes new dowtown housing, industrial park activity Don ]acobson 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. In October, demolition work began in historic downtown Elk River in 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. 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 a 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." For instance, he says MetroPlains recently has been involved in historical rehabilitation projects in Winona (Washington Crossing, the former Winona Middle School buildings), and Albert Lea (the rehab of the former Lea Center 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. Appendix E: Relevant News Articles (cont.) ~~ YIYMEAPD~S~~ P~1 ~t I1.t~ Due north: Promise of commuter rail, diminishing open space contribute to rising land values in northwest 'burbs MinneapolislSt. Paul Business Journal -October 14, 2005 by Elizabeth Millard Contributing writer Tim Yantos still remembers the cornfields. There used to be acres of them in the northwest suburbs, even though the farms were just a short drive from the metro area. But with a proposed Northstar Commuter Rail to snake from St. Cloud to Minneapolis, shrinking land availability throughout the Twin Cities, and a retail and industrial development boom, it looks like the corn will have to come from somewhere else. "Even before the commuter rail stations are built, we're seeing huge developments all along the corridor," said Yantos, Northstar Corridor Project director for Anoka County. "The northwest area is one of the fastest-growing in the state, and even in the country. The desire to live and work in that corridor is driving up the land value." Others in real estate agreed. "Part of the reason there are escalating land prices in the northwest is simply because there isn't much land lefr in the other suburbs," said Chris Little, land specialist at Colliers Turley Martin Tucker in Minneapolis. Contributing factors The 82-mile corridor most affected by these rising land values runs along Highway ro and Interstate 94, from downtown Minneapolis to the St. Cloud area. Now in its initial phase, a commuter rail will run within this corridor on a 4o-mile line, with six stations, including Fridley, Coon Rapids, Anoka and Big Lake. In some ways, the proposed Northstar line and the northwest building boom have fed off each other, rather than one spurring the other's growth. As the northwest corner of the Twin Cities began to develop, proponents of the commuter rail identified future stations based on where the most development was occurring. Once station locations were proposed, developers began planning new residential and commercial projects based on the promise of those sites. There are a number of reasons that development has been so active in the area, however. A major driver, according to developers and business owners, is the existence of major roadways such as I-q4 and Interstate 6q4, which provide the infrastructure necessary for large-scale developments. "Because of I-q4 and the interchanges off that, the northwest quadrant will probably see a higher proportion of growth than other sectors," said Collin Barr, vice president of development at Ryan Cos. US Inc. in Minneapolis. "The southwest is trying to grow at the same pace, but it doesn't have something like q4 in place yet. So, the northwest will be the quadrant that attracts the most commercial development in the next few decades." Another contributing factor to the rising prices is the rebounding industrial market, Little said. "It's coming back, and that's driving up the land values. Although there's a big retail push, the industrial market is turning out to be the most active right now." Spurring development As developers turn their attention to the northwest suburbs, city planners in the area have been quick to respond. In November, Elk River officials announced they would open about roo acres of city-owned land for industrial development. Other cities, such as Rogers and Maple Grove, eagerly welcomed retail, industrial and residential projects, bringing in developers who found Anoka and Ramsey were running short on land. Although companies have the option of developing industrial parks and commercial space farther outside the metro, Little said second- and third-ring suburbs are proving more attractive because sewer and water services are generally already provided by the Metropolitan Council. Undeveloped communities would require greater expense and effort to install such systems; so although land costs might be lower than those in the northwest suburbs, overall development costs might turn out much higher. Glimpse of the future Rogers, in particular, has become a model for the type of growth that's likely to spread throughout the northwest suburbs, Little said. Several new industrial developments have sprouted up within the past few years as land has become scarce in other areas Thorpe Distributing Co., a distributor of Anheuser-Busch products, was formerly located in Medina When it needed to expand its facilities two years ago, company officials discovered the city didn't have enough room for the additional warehouse space it needed. "We would have preferred to stay where we were, but there was too little land available," said Jack Stevenson, Thorpe's vice president of sales and marketing. The company chose to build in Rogers because the city had the highway system nearby and large tracts of space. Stevenson said rising land values and the boom in development within just the past year have made company officials glad they moved when they did. "What we bought even two years ago would be much more expensive now," he said. "And I don't even know that we'd get it. There's hardly any land left in Rogers to buy." The city is likely to see another building boom now that Cabela's has opened its vast $So million store, featuring an aquarium stocked with sport fish, an indoor archery range and shooting gallery and a 28- foot-tall mountain. The t88,ooo-square-foot facility is more than four times the size of an average Best Buy store. Although retail endeavors traditionally don't drive land-value increases, the enormity of Cabela's undertaking is expected to draw more commercial and retail interest, raising already climbing land costs. Unlike Thorpe, however, Cabela's didn't choose the location based on land availability. "Anyone who's ever been on 694 or 94 on a Friday afternoon will know why we put the store where we did," laughed John Castillo, Cabela's spokesman. "If you're not behind someone pulling a boat, you've probably got one hitched up yourself." The store is hoping to attract those who are on their way "up north" to cabins, along with other visitors. Castillo estimated that nearly 4 million people will visit the store each year. "When you have that many people going through an area, it's going to attract more development, especially in terms of retail and hotels," Little said. "And when people are interested in developing, land prices go up." Elizabeth Millard is based in St. Louis Park. Appendix E: Relevant News Articles (cont.) .~tJSI tex~NOars~~ o~~,T~ T Real estate insiders fin~7d plenty to do inLCnlo~rt:~hwest Minneapolis/St. Paul Business Journal -October 14, 2005 by Sue Rich Contributing writer The northwest suburbs have rapidly emerged as the "it" quadrant of the metro area. While large-scale attractions aim to give the Mall of America a run for its money, new urbanism-inspired developments aim to rival both downtown and rural life by combining convenience with charm. Movers and shakers in the northwest real estate scene are not only confident in the success of their companies and projects, but that their work will fuel even further development. Gary Hook If you haven't heard, a new Cabela's opened in Rogers on Oct. 14 At nearly 200,000 square feet, the development is more of a mall than a store and has garnered a good deal of media attention. Gary Hook is the executive vice president of Kraus-Anderson Cos. Inc., which developed the new Cabela's, plus 10 others throughout the region. Hook said the Rogers Cabela's features abig-game African diorama, a 45,000-cubic-foot aquarium, laser arcade, furniture store, general store, gift shop, custom fly-fishing shop and a "fantastic gun library." He said the store is poised to tap the steady stream of weekend warriors headed north on Interstate 94 and Highway 101, and firmly believes surrounding development is a given. "Typically, a Cabela's becomes a destination place," Hook said. "The one in Owatonna, built in 1997, has attracted hotels, restaurants and other retail stores, which do very well. It's the second-largest attraction in Minnesota, next to the megamall." Bob Fields LandCor Inc. is also in the act of creating destinations. The Maple Grove-based, full-service real estate company is headed up by CEO and founder Bob Fields, a well-known entrepreneur with extensive northwest ties and investments. In September, LandCor opened a 30,000-square-foot water park and 125-room Holiday Inn in downtown Otsego. It is part of the company's 250,000-square-foot Watertront East office and retail development. Fields said LandCor also is in the process of securing abig-box retailer for the site. In March, LandCor breaks ground on an even larger water park and hotel complex in Blaine, featuring a 50,000-square-foot water park, 165-room hotel, Black Woods restaurant and a 450-person-capacity convention center. Fields said these high-profile projects are just some of LandCor's investments in the northwest suburbs. The company has 23 projects in the area, with nine under construction. Additional in-progress projects range from churches and coffee shops to large retail, warehouse and office complexes, such as the recently completed Bell Tower South, which features 71,000 square feet of office space and 64,240 square feet of warehouse space. Gary Germundsen North Memorial Health Care recently broke ground on a medical office and asurgery/urgent care center just off I-94 and County Road 30 in Maple Grove. This is the first phase of what developers hope will be a 500- to 600-acre campus featuring a 160- to 200-bed hospital and additional medical office space. At press time, however, the fate of the hospital and the remainder of the project was unknown. "Nobody has the right to build a hospital there, yet," said Gary Germundsen, the senior associate at Colliers Turley Martin Tucker, the real estate consultants working with North Memorial on the project. (State law requires legislative approval for new hospitals. Although a special session is yet to be called, the Maple Grove hospital did make it onto Gov. Tim Pawlenty's proposed session "menu.") Germundsen specializes in medical office leasing and said there is a great need for closer-to-home medical service in this area. Although he often develops projects in the north and northwest metro, Germundsen called the North Memorial hospital campus "kind of different." The health care company partnered with Ryan Cos. US Inc., who will position new retail and office development around the hospital campus. Germundsen said this unique hospital-first, then-retail approach allowed the developers to present a "complete package" to the city of Maple Grove, which embraced the concept. He is hoping the Legislature will do the same. Margaret Langfeld Another big northwest project awaiting legislative approval, not to mention state funding, is the proposed $675 million, 68,000-seat, retractable-roof Vikings stadium in Blaine. Commissioner Margaret Langfeld chairs the Anoka County Board of Commissioners, and represents the district where the stadium site is located. Langfeld has been involved with the project for as long as the county has been: three years this December. She has championed the project because, as she put it: "The stadium proposal offers a rare opportunity for Anoka County to bring over $2 billion in private investment to our community." However, with Gophers and Twins proposals also on the table, it appears unlikely the Legislature will embrace the stadium by the end-of-year deadline. Langfeld recognizes, however, that local development does not hinge upon the stadium deal. "The area is growing by leaps and bounds, with or without a stadium. "But in terms of creating a destination location that will draw people from the entire state and five-state area, and beyond, the stadium offers that rare opportunity." LouAnne Reger The Minnesota chapter of the National Association of Woman Business Owners named LouAnne Reger its woman business owner of the year. Reger is CEO and president of Maple Grove-based J&L Steel Erectors, a $10 million subcontractor supplying union ironworker labor to the construction industry. J&L installs reinforcing steel, structural steel and ornamental railing. Under Reger's direction, J&L has steered away from commercial and toward highway-heavy work. Reger said it was simply a matter of figuring out what the company did best and focusing on that. "We're doing as many sales with less people." Although J&L has worked as far away as West Virginia, the majority of the subcontractor's jobs are in the metro area. Other than constructing Xcel's King Plant in Bayport, J&L is sticking to bridge work and has won several notable contracts, including rehab of the Stillwater lift bridge and the construction of 27 bridges in the Chaska-Highway 212 overhaul. Reger also is keeping an eye on the Legislature for the go-ahead to work on the Highway 610 interchange near the new Cabela's in Rogers, and also along Highway 81 in Maple Grove. "If the governor does a special session, that'll be one of the things we'll look at bidding," she said Dave Carland Minneapolis-based CSM Corp. is often recognized as the award-winning renovator of the Milwaukee Road Train Depot in downtown Minneapolis. However, CSM develops and manages hotels, shopping centers, commercial and residential properties throughout the country. Recently, the company has been active in the northwest metro. "We love the demographics in the northwest metro, particularly given the growth along highways 55 and 94," said Dave Carland, CSM's senior vice president of development. "Our experience, particularly in Plymouth, is that the local government is very pro-business, and while they have high expectations, city officials appreciate swell-thought-out development plan." This September, CSM purchased the Freeway Office Center in Brooklyn Park for $9.9 million. In addition, it began construction of the Shops at Plymouth Creek; re-opened a newly renovated Marriott Minneapolis West on Interstate 394 and an adjacent restaurant, Kip's Authentic Irish Pub and Restaurant; and just purchased the Progress Casting building in Plymouth. CSM also is teaming up with Realife Corp. to build several senior co-ops in the Twin Cities, South Dakota and Oregon. In the northwest metro, the companies are looking at sites in Buffalo, Minnetonka and Waconia. Dave Menke Dave Menke has been with Opus Corp. for 10 years, including three in his current position as vice president of real estate development for Opus Northwest. During his tenure, Menke has developed both commercial and residential notables -- ranging from Richfield's Best Buy and St. Paul's U.S. Bank to downtown Minneapolis' upscale Carlyle and Grant Park condo and townhouse complexes. His latest and largest project yet, the Bridges at Arbor Lakes in Maple Grove, taps both ends of his real estate experience. "It's a lot of retail and a fairly sizable housing component," Menke said. "Fairly sizable" may be a bit of an understatement. With an eventual goal of 4,000 to 5,000 residents near all the essentials of daily life, Bridges is more village than complex. The development is located just north of the Shoppes at Arbor Lakes and Maple Grove Main Street. Menke said the build-out is slotted as five-plus years, but that much of the first phase is complete. Of the first 194 homes, 100 are now sold and constructed. Most are 1,500- to 2,200-square-foot townhomes and range from $220,000 to $400,000. The first-phase investment alone surpassed $50 million. Paul Andrescik As a former state trooper and now Carver city alderman, Paul Andrescik is always up for a challenge. Andrescik is the new land acquisitions manager for Albertville-based K. Hovnanian Homes. Former Pulte Homes Division President Thomas Standke established the local K. Hovnanian offices just 18 months ago, and Andrescik himself has held his position for just 10 weeks. Nevertheless, Andrescik is confident in his and K. Hovnanian's ability to make their mark on the Minnesota scene. "We have about six projects right now and six more in the pulpit. The goal is to be No. 1." K. Hovnanian communities are now located in Elk River, Albertville, Eden Prairie, Chaska and Victoria; in- progress developments include communities in Lakeville, Farmington, Lake Elmo and Stillwater. Andrescik said the company naturally chose to begin development in the northwest quadrant, as "the growth through the 94 corridor and Maple Grove speaks for itself." Recently, he has been hunting for land along the Northstar Corridor rail line. "That area is beautiful, and I see growth from the northwest suburbs all the way to St. Cloud, and [St. Cloud] becoming another suburb of Minneapolis/St. Paul." Vaughn Veit Vaughn Veit is the third-generation owner, chairman and CEO of Veit Cos. -- one of the largest providers of demolition, disposal, environmental, site preparation and other specialized construction services in the Upper Midwest. Veit spokesman Chuck Geisler said the Rogers-based company has most definitely benefited from the explosive growth in the northwest suburbs and "look(s) forward to serving our clients that have expansion plans along the I-94 corridor." Notable Veit projects in the northwest suburbs include site development for Riverwood National Golf Course in Otsego, post-construction final cleaning of the new Cabela's, site grading and utility installation for the Waterfront East project in Otsego and the expansion of Industrial Boulevard in Rogers. Duane Grandy Benton County Commissioner Duane Grandy has lived in the area he represents "pretty much his whole life," he said. Over the years, including 11 on the county board, he has seen many farms replaced with residential development. Seeking to influence this development's course, the former mechanic and tow-truck operator joined the Northstar Corridor Development Authority (NCDA) soon after its inception about seven years ago. He became NCDA chair in 2003. Grandy hopes the Northstar rail line, which will run from Big Lake to the Twin Cities, will not only relieve traffic congestion but bring more commercial development. "Wherever there's light rail line, development mushrooms." He said the present estimate for getting the $265 million line up and running is "probably spring 2009. We were saying 2008, but everything's been dragging out and dragging out." The state made its first major commitment to the line this spring, approving $37.5 million through the 2005 bonding bill. State funding matched $44 million in local funds, and Minnesota's congressional delegates were then able to free up $80 million in matching federal funds. Grandy said the NCDA will need to reapply for funding at all levels next year, but Benton County is in the process of approving 2006 funding. "Let's say the stars are aligning," he said. Sue Rich is based in St. Paul. Appendix E: Relevant News Articles (cont.) Copyright 2005 Dolan Media Newswires Finance & Commerce (Minneapolis, MN) October 13, 2005 Thursday SECTION: NEWS LENGTH: 227 words HEADLINE: Four manufacturing facilities sprouting in Twin Cities suburb BYLINE: F & C Staff BODY: Officials have either broken ground or soon will on four manufacturing facilities in Elk River, a northwestern suburb in the Twin Cities metropolitan area. The latest groundbreaking is set for today for an 18,000-square-foot facility being built by Alliance Machine Inc. on a 2.84-acre site. The project will allow the company to retain 30 existing jobs and to create nine new ones. Other facilities are being built for the following businesses: `Medical Extrusion Technologies Inc., which broke ground on Tuesday of last week fora 20,000-square- foot facility on 2.64 acres. The facility is expected to create 23 jobs. * Classic Acrylics Inc., which held a groundbreaking ceremony Sept. 29 fora 20,000- square-foot facility on 2.48 acres. The project will allow 13 jobs to be retained and five new ones to be created. Crystal Distribution Inc., which plans to begin construction soon on a 30,000-square-foot facility on 3.7 acres. The new facility will allow 31 jobs to be retained and 15 others to be created. Scott Clark, community development director in Elk River, said the projects are evidence that the city's manufacturing market is maturing. "The city looks at those projects as part of a long-term effort to attract companies that bring solid employment opportunities and will become active participants in our community," he said. LOAD-DATE: October 13, 2005 Appendix E: Relevant News Articles (cont.) Copyright 2005 Knight Ridder/Tribune Business News Copyright 2005 Pioneer Press, St. Paul, Minn. Pioneer Press, St. Paul, Minn. August 10, 2005, Wednesday KR-ACC-NO: SP-BIZ-GROWTH-20050810 LENGTH: 835 words HEADLINE: Businesses spring up near metro BYLINE: By Jennifer Bjorhus and Maryjo Sylw BODY: The outlying Twin Cities areas aren't just having a population boom, they're also adding businesses at a rapid clip, according to a new report. The metro's "collar counties" of Sherburne, Scott, Wright, Carver, Washington and Chisago dominated the top ranks of Minnesota counties that saw the greatest percentage change in business establishments between 1998 and 2003, according to the U.S. Census Bureau's 2003 County Business Patterns report, which came out Monday. The total number of private businesses in those counties zipped ahead at rates of 17 percent to more than 40 percent during that five-year period, while the state as a whole saw private firms grow byjust 8 percent. That probably doesn't surprise locals who've been stuck in a traffic jam in Elk River in Sherburne County - - aonce-sleepy town that has morphed into a busy suburban hub. "It's phenomenal the growth that we have," said Debra Uristra, chair of the Elk River Area Chamber of Commerce and co-owner of Coldwell Banker Vision. "It's hard for the schools to keep up building. At night, the lights it's like downtown Minneapolis compared to what it used to be." The business patterns report, which the Census Bureau issues annually, differs from other employment reports because it's not based on a survey sample but tracks the actual number of private businesses in each county. The numbers exclude the self-employed, farmers and most government employees. Overall, the census findings support the idea that much of rural Minnesota has lost out on the state's more-recent economic growth, as the size of farms has grown and people moved away to harvest paychecks in the city. These communities have struggled to retain employers as urban areas in the corridor from Rochester to St. Cloud thrive. Marshall County in northwest Minnesota, for instance, lost 17 percent of its businesses between 1998 and 2003. Other outstate counties, such as Mahnomen, Le Sueur and Red Lake, fared poorly as well. "There's just not enough people out there to support these small businesses," said Gatzke resident Delray Larson, a longtime Marshall County Commissioner. Urban Hennepin County, however, popped out No. 19 in the nation for counties with the highest number of companies in 2003 with 39,471 establishments. Hennepin's average annual payroll per employee of $ 45,282 couldn't quite match national leader New York City's figure of $ 73,032, but it was among the highest in the state. Los Angeles County, with 235,085 firms, was No. 1 in terms of business establishments Ramsey County, with 13,928 companies, didn't make the Census Bureau's Top 50 cut, but its average annual payroll per employee of $ 39,536, also ranked high within Minnesota. Some of the state's rural counties clearly have defied the trend. The increased number of companies in Dodge, Olmsted and Mower counties was a pleasant surprise, said Bob Isaacson, director of analysis and evaluation for the Minnesota Department of Employment and Economic Development. He said he sees metro economic centers helping rural job growth in some areas, "a bit of bridging and reduction of the rural-urban split." Wadena County, west of Brainerd, for instance, registered the largest five-year percentage gain in companies. According to the report, it went from 299 companies, nearly all of them employing less than 50 people, in 1998 to 456 in 2003 --again of nearly 53 percent. The findings baffled community leaders there, however. They haven't noticed an economic boom in the area, they said. "I don't think that I can put a finger on the reason for it," said Jarrod Olson, director of the Wadena Development Authority. The area doesn't benefit much from the Lakes Country tourism and recreation economy, he said. Wadena County Commissioner Lane Waldahl called the findings a fluke. Perhaps the businesses in Wadena are simply flying under the radar. The Census Bureau data indicate that most of the new businesses are extremely small. In the construction industry, for example, the report shows 78 business establishments in 2003, more than triple the 25 reported in 1998. But 69 of those businesses consist of one to four employees, and none had more than 19 workers. Barbara Ronningen, senior research analyst at the Minnesota State Demographics Center in St. Paul, noted that the population drain from Minnesota's rural areas has slowed, although it's too early to say how it will play out in this decade. For a copy of the report, go to: http://www.census.gov.ezproxy.stthomas.edu/epcd/cbp/view/cbpview.html By Jennifer Bjorhus and Maryjo Sylwester To see more of the Pioneer Press, or to subscribe to the newspaper, go to http://www.twincities.com. Copyright (c) 2005, Pioneer Press, St. Paul, Minn. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or a-mail reprints@krtinfo.com. JOURNAL-CODE: SP LOAD-DATE: August 11, 2005 Appendix E: Relevant News Articles (cont.) MIIQIESOTA ~~~~. ~,~'~~~~ ~Qlu~~~~ Wednesday June Ol 2005 Developers climb aboard Northstar Commuter Rail Wlth state approval Tnally in hand, transit-oriented projects take stage Anne eretts Contributing Writer With this spring's passage of a bonding bill by the Minnesota Legislature containing funds for the Northstar Commuter line, the project finally seems on a fast track to reality. Although federal funding has yet to be secured, developers and city officials can more safely assume the rail line will be built and are now turning their attention to TODs (or transit- oriented development projects) along the route. They're seeing TODs as a way to enhance the value of projects already underway and make some new projects more attractive. The Northstar line is eventually is expected to connect Minneapolis and St. Cloud and a string of small towns and booming suburbs in between. "The development was going that way already," says Tim Yantos, executive director of the Northstar Corridor Development Authority and the administrator of Anoka County. "We just happen to have a rail line in that corridor." The state has approved $37.5 million to begin planning the $265 million line, which will run on tracks owned by the Burlington Northern Santa Fe railroad. The line, which snakes along the Highways 10 and 47 corridors through Fridley, Coon Rapids, Anoka, Elk River and Big Lake, is expected to generate 5,600 rides a day. People along the line say having the route in place during years of discussion has allowed the communities to plan development to make the most of line. The TOD phenomenon also coincides with an equally strong movement toward new town centers. "I think it's hand in glove," says Debra Urista, owner of Coldwell Banker Vision in Elk River, a town of just under 20,000. Urista has been involved in the Northstar line, both as past chairwoman of the local Chamber of Commerce and co-chairwoman of the grassroots organization lobbying for the line. "The biggest push was from the riders who wanted an alternative to driving," she says. That consumer demand caught the attention of developers and landowners. Early success of the year-old Hiawatha light rail line in Minneapolis and Bloomington definitely helped ease concerns that there would be a market for line -- and development projects along it. "Ridership (for the Hiawatha line) is so much more than anyone anticipated," she says. "I think that's encouraging to us." The commuter buses already running along the Northstar route also have shown strong use. Elk River officials last year agreed to work with St. Paul-based Metro Plains Development to develop two projects creating 20,000 square feet of retail/commercial space and more than 300 units of rental and condominium housing, along with parking and amenities. The city of Anoka has completed a master plan for its Commuter Rail Transit Village project and North Central Business District, which could provide up to 400 units of housing. Coon Rapids, with about 62,000 people, already has a retail center in Riverdale Mall, but is expected to add some housing developments, Yantos says. Fridley, an established community with little open land, probably will see some smaller developments. Ironically, the largest development, set to hit $1.1 billion by the time all the components are in place, is in Ramsey, a town not yet officially named to have a station on the new line. That honor went to nearby Anoka. The Ramsey experiment could prove whether so-called Smart Growth ideas can become smart investments. The project, which includes a city core, retail, more than 2,500 units of mid- to high-density housing, a hotel and waterpark, is being coordinated by Ramsey Town Center LLC, led by Bruce Nedegaard of Nedegaard Homes. City Manager James Norman says that when project planning began in 2001, city officials had to take people to Chicago to show them examples of TODs. "There weren't any in Minnesota," he says. The idea came together with lightning speed. In May the city opened the first bids for a new City Hall complex, expected to cost just under $18 million. Some big players have moved into housing in the city, including Pulte Homes, Ryland Homes, D.R. Horton and U.S. Homes. A Japanese firm, Yamagata Corp., is working on senior housing. "Retail is trickier," says Norman. Talks are underway with lots of companies, and the developers have a consulting firm working specifically on lining up key restaurants. The city currently is on the line to build a downtown cinema, with local investors in negotiations to run it but no major chain on board. A local fitness center is negotiating to run apublic/private community center. The keys to success along the Northstar corridor, as they are through the region, will be whether demand for condominiums can keep up with the phenomenal growth in supply -- and whether those residents can give up their cars, drink enough lattes, buy enough gifts and eat enough meals out to keep TOD streets busy and retailers happy. Norman and developers are betting that they will -- and that the resulting spike in population and rider demand will be enough for transit officials to reconsider their request for a formal spot for Ramsey on the Northstar line. Appendix E: Relevant News Articles (cont.) ~~ YIM NEAP;741 ~l./~1 ~~ Faribault Foods buys juice-pouch business Minneapolis/St. Paul Business Journal -May 20, 2605 py Nicole Garrison-Sprenger Staff wrifer Reid MacDonald knows his company can't survive in the food business without selling a wide array of products. That's why his firm, Minneapolis-based Faribault Foods Inc., just inked a deal to buy a $z3 million private-label juice business from SoftPac Industries Inc., based in Elk River. The SoftPac line makes and fills stand-up juice pouches, similar to Kraft's Capri Sun line, for grocery retailers and wholesalers, mass merchandisers and dollar store chains. MacDonald did not disclose the purchase price. Those products will augment Faribault's existing products, which include Chilli Man canned chili, Pasta Select canned pasta, Sun Vista canned beans, Butter Kernel canned vegetables and some store- brandlines, also known as private label. "It's part of our strategy to have more products ... so that [retailers] can get more from us as a supplier," said MacDonald, CEO of Faribault. "We can give [retailers] good products and good service and optimize transportation and distribution costs through mixing products in the same truckload or railcar." That's important as grocery retailers, trying their best to compete with the likes of Wal-Mart, find it more efficient to buy multiple products from large or mid-sized manufacturers than to do business with niche suppliers. "It's become increasingly difficult for very small consumer-products suppliers to get the attention of the shrinking pool of increasingly large retailers," said Jon Hauptman, vice president of Barrington, Ill.-based Willard Bishop Consulting. Founded in t99z as Advanced Nutritionals Corp., SoftPac operates a second division, in Foley, Minn., that it will keep. That division specializes inlarger-sized juice pouches, concentrates, sauces and marinades. Faribault's purchase of the fruit juice division, which is expected to close May 2'J, will give Faribault about 8o additional employees as well as a plant in Elk River that SoftPac built for about $t2 million in toot. Faribault has about Soo employees, most of whom work in Minnesota. The company reported fiscal-year zoos sales of about $t6o million.The purchase also gives Faribault packaging technology that's become increasingly popular. The Freedonia Group Inc. of Cleveland predicts that demand For food and beverage pouches will climb by ~ percent per year through 2008 to $4.i billion. "The can is still a good product," MacDonald said. "And there's some innovation going on in cans with easy-open lids and so forth, but we feel we want more of a spectrum of packages." The SoftPac acquisition also expands Faribault's private label business. ngarrison@bizjournals.com ~ (6iz) z88-2112 Appendix E: Relevant News Articles (cont.) Copyright 2005 Star Tribune Star Tribune (Minneapolis, MN) April 24, 2005, Sunday, Metro Edition SECTION: BUSINESS; Pg. 1D LENGTH: 945 words HEADLINE: State lagging in job creation; The economy is OK in Minnesota, but it created just 1,000 jobs in the first quarter. BYLINE: Mike Meyers; Staff Writer BODY: In case no one has noticed, Minnesota no longer is above average. While businesses in the state have been posting good numbers so far this year, job growth -one of the past standout items of the Minnesota economy -has stayed lower than the national pace and recently has looked all but anemic. In a state with 2.7 million workers, only 1,000 net new jobs have been added to payrolls in the first three months of 2005, according to the Minnesota Department of Employment and Economic Development. In the 1990s, Minnesota's economy generated an average of more than 13,000 jobs every three months. Jobs are only part of the story, albeit one that matters greatly to Minnesota's more than 148,000 unemployed. In other respects, the Minnesota economy appears to be performing well, with no signs of hitting the "soft patch" that some commentators have worried is beginning to bog down the national economy. Minnesota corporate profits are on the rise, state income and sales tax revenue are climbing, and manufacturing is making a comeback. But the state of the job market, where economists have the latest figures on how the Minnesota economy is performing, is sending the experts fumbling for adjectives to describe their concern. "That's troublesome, disturbing, bothersome," said Tom Stinson, Minnesota state economist. "It's been very lackluster so far," said Steve Hine, labor market research director for the economic development department. "We've seen very sluggish job growth." Call the reasons part of an unsolved mystery. Some Minnesota companies say that rising energy prices and soaring health insurance premiums have caused them to think twice about adding workers. "The culprit people are pointing at is energy prices. We're not immune from the ravages of $2.25 a gallon [gasoline]," Hine said. "That's certainly been a pretty strong headwind that's kept the state and national economy from growing rapidly in terms of jobs." For example, Northwest Airlines, a company struggling with rising fuel prices and low-fare rivals, recently announced plans to cut 900 mechanics from its workforce, suggesting that mass layoffs are not yet a thing of the past A heartening sign, in Stinson's view, can be found in initial unemployment claims. As of March, new jobless claims were down 12 percent from a year earlier. That means the ranks of the unemployed aren't growing as fast and, along with a drop in continuing claims, suggests that the job market is maybe poised for apickup -maybe. But don't blame the usual suspect for the slowdown in jobs creation -manufacturing. Minnesota manufacturers have outperformed their counterparts elsewhere. "We're actually showing a little growth in manufacturing," Stinson said of Minnesota. The state lost 11 percent of its manufacturing jobs since early 2001, a recession year, but the nation lost 16 percent of jobs at goods-making firms. Many Minnesota manufacturers have reason to complain about rising costs, but that hasn't kept some from adding to their payrolls. Consider Donnelly Custom Manufacturing in Alexandria. In 2004, the company had so many orders that its factory spent more hours than ever before making injection-molded plastic parts for all manner of products. "In 2005, we're outpacing 2004," said Ron Kirscht, Donnelly's president. Factory hours at Donnelly so far this year are 8 percent ahead of last year, he said. Providing custom engineering on parts for new products, from plastic storage units to parts for automatic teller machines, Donnelly has avoided the trap of making commodities -the kind of mass-produced products dominated by importers. "Our customers tend to be leading OEM [original equipment manufacturers]," Kirscht said. "They're much more vibrant in terms of launching new product lines and expanding current offerings. We ship product to China, India, Mexico, France and South America." Some Minnesota industries actually are facing a worker shortage. Health care providers, from hospitals to nursing homes, were short of help even when the state's labor market was at its slackest, three or four years ago. Precision metal workers, making parts for medical devices, remain elusive quarry for companies such as Cretex Companies, an Elk River holding company for an array of businesses, from concrete products to tiny parts used in implantable pacemakers and defibrillators. "Some companies are starving for employees in the machining industry," said Thomas Bender, Cretex president and CEO. "Machinists are hard to find." Business also has been good at Davisco Foods International, a Le Sueur cheese maker that employs 600. Orders and prices have been strong, allowing the company to do modest hiring in recent months, said Mark Davis, Davisco president. Indeed, Davis is struggling with a problem he hasn't had for years -one that suggests that in parts of Minnesota, job prospects might be picking up in ways not captured in official employment statistics. Davis' problem: retaining newly hired workers. "We're getting more turnover in beginning workers," he said. "Employees have options. They're testing the water. They're moving around." If the phenomenon spreads, the weakest part of the Minnesota economy -the job market -might be heading for a happier future than the experts now foresee. Mike Meyers is at meyers@startribune.com. Falling back Employment in Minnesota is below its level at the start of the recession four years ago Percent change in employment since February 2001 (monthly) Feb. 'OS Minnesota: -0.4% United States: +0.2% Source: Minnesota Department of Employment and Economic Development GRAPHIC: CHART LOAD-DATE: April 26, 2005 Appendix E: Relevant News Articles (cont.) Copyright 2005 Star Tribune Star Tribune (Minneapolis, MN) April 16, 2005, Saturday, Metro Edition SECTION: HOMES; Pg. 3H LENGTH: 683 words HEADLINE: NEIGHBORHOOD SPOTLIGHT; BIG LAKE; Big Lake boom is making waves; City has easy access to Twin Cities, St. Cloud BYLINE: Neal Gendler; Staff Writer BODY: Big Lake, about midway between Minneapolis and St. Cloud, is part of the boom that's turning the Interstate Hwy. 94 corridor's rural towns into suburbs. Big Lake's population has grown from 3,113 in 1990 to 8,525 today. Outside the city, Big Lake Township has 7,289 more. Though Big Lake is no longer a tiny town, it's still small enough to appeal to young families looking for "a little bit of elbow room and a smaller community in which to raise their children," said Shirlee Heitz, an agent with Dynamics Real Estate. Since she moved to Big Lake in 1970, she said, the school district has built two elementary schools, a high school that's now an intermediate school and a new high school. The city's location is a draw because residents can work or shop and eat in either the Twin Cities or St. Cloud metro areas. Some new homes are being built by folks who bought their first home in Big Lake and now want something bigger. Some residents work in the area; a nearly full industrial park holds businesses with about 300 jobs and $14 million in annual pay. "A lot of homes are being sold on half an acre to 2.5 acres," Heitz said. "Those go like hotcakes." The city has limited the pace of residential construction so it doesn't outrun city services. There still are a lot of first-time-buyer homes being built in the $180,000-to-$220,000, she said. But she recently was looking for a house in the $500,000 range for a buyer and found "an amazing amount." David and Cindy Book left Big Lake last August but loved it so much they're moving back from Lake City as soon as school's out. Here's an edited version of Cindy's explanation. When did you first move to Big Lake, and why? We moved to Big Lake Township from Golden Valley in 1966. We bought a lot with 250 feet along Thompson Lake, about two miles northwest of the city. It was close enough to the cities, but not too close. When we moved, Iwas astay-at-home mom and Dave was in sales and worked out of our home. What did you buy? Webuilt atwo-story, three-bedroom house - 3,900 square feet with lots of windows - on 1.8 acres with 200 feet of lakeshore. How did you like it there? It's a good fishing lake, and we see a lot of nature on it. We boat on it, and you can water ski and do water sports. We also liked Big Lake's very nice public beach and public access. We've been very happy with the school district there and the friendships we've had. You're not far from cities, yet you still can see the stars and you don't have the city traffic. It's very family-oriented; in Lake City, we've not found as many young families, and Big Lake offers children's sports at younger ages. Why did you leave, and why are you coming back? Dave had gotten a position at Wild Wings, near Lake City. But after several months, he got an opportunity to return to the floral-delivery industry and work out of our home. Our house in Big Lake had not sold yet, so we were able to sell this house [in Lake City] and move back. We just miss the lake and lake living. Lake City is gorgeous, but there's no lakeshore property. We realized that's what we always wanted. Neal Gendler is at ngendler@startribune.com. Big Lake Total number of sales: 746* Dollar volume: $102,335,036 Average list price: $249,891 Median list price: $229,900 Average sale price: $214,989 Median sale price: $192,000 Low sale price: $109,000 High sale price: $725,000 Average days on the market: 61.5 Active listings: 189 *From 4/1/04 to 3/31/05 Source: Minneapolis Area Association of Realtors, based on information from the Regional Multiple Listing Service of Minnesota Inc. Recent home sales: Big Lake - Built in 1984, this house has three bedrooms and slower-level family room. Listed for $235,900, it sold for $240,900. - This three-bedroom house, built in 1999, was listed for $172,900 and sold in less than a month for $175,900. - With a four-bay garage, three bedrooms and two full bathrooms, this house sold in January at its $358,900 list price. GRAPHIC: MAP: CHART: PHOTO LOAD-DATE: April 18, 2005 Appendix E: Relevant News Articles (cont.) Copyright 2006 Star Tribune All Rights Reserved Star Tribune (Minneapolis, MN) April 4, 2005 Friday Metro Edition SECTION: BUSINESS; Pg. 4D LENGTH: 480 words HEADLINE: Commercial Real Estate; Growth in Elk River BYLINE: Dan Mitchel;, Staff Writer BODY: Elk River, about 25 miles northwest of Minneapolis, aims to be "the light-industrial hub of the northwest metro,' according to the city's slogan. Toward that end, the city is planning to develop two sites totaling about 100 acres for industrial development, adding to about 120 acres already taken up by business parks. Amcon Construction of Eagan and Indianapolis-based Duke Realty recently made bids to develop one of the sites - 38 acres next to what would be the Elk River station of the proposed Northstar commuter rail line. The city is evaluating the bids, both of which call for creating space for industrial and warehouse use. The second parcel, called the Cargill property because the city bought it from Cargil Inc., includes about 60 acres along Hwy. 10. It will be developed sometime in 2006, said Catherine Mehelich, Elk River's director of economic development. Dan Mitchell is at dmitchell@startribune.com LOAD-DATE: April 5, 2005 Appendix E: Relevant News Articles (cont.) Copyright 2005 Dolan Media Newswires Finance & Commerce (Minneapolis, MN) February 24, 2005 Thursday SECTION: NEWS LENGTH: 957 words HEADLINE: Twin Cities homebuilders urged to consider condos -with care BYLINE: Brian Johnson BODY: Builders of single-family homes and townhomes should consider jumping on the condominium bandwagon, according to a local residential construction expert. Betty Hardle, president of Coon Rapids-based Residential Research Services, told a group of homebuilders last week that there are "tons and tons" of condominiums going up throughout the metro area, including outer-ring locations such as Hastings and Stillwater. "If I were you, I would think about getting into the condominium business," said Hardle, who tracks building permits and other residential construction data in the metro area. "There are all different ways you can do this. So it seems to me that it's not a bad niche to look into. "However, if there's a lot of them around you, forget it. You don't want to have that much competition." Speaking at a Builders Association of the Twin Cities event, Hardle said rising prices ofsingle-family homes and townhomes and a desire for redevelopment are fueling the condo construction boom. "The other thing that has happened in the condo market is, there have been so many rental vacancies that it has made rental owners nervous," Hardle said. "If they condominiumize their building, they can sell it off a piece at a time and make some money on it." Overall, 2005 should be a "pretty good year" for homebuilders, as long as they find the right location, Hardle said. "Just because there are lots, it doesn't mean you should go there," she said. St. Croix County is one of the few metro area locations with an abundance of lots, for example, but demand there has been shrinking, she said. The five hottest areas in 2004, as measured by residential building permits, were Woodbury, Blaine, Lakeville, Shakopee and Maple Grove, according to Hardle's data. Woodbury easily led the metro area with 2,034 permits issued. Other areas of note include Coon Rapids, which is in the midst of a major redevelopment, and Elk River, which made the top 10 in permits despite being outside of the Metropolitan Urban Services Area. But permits don't tell the whole story, she warned "(Elk River) is kind of a troubled area," she said. "It's a good area to live in; it's a nice town; there's nothing wrong with it. It's just that there's too much at the moment. I think everybody got all excited about Elk River because they're going to get. one of the Northstar Rail stations." MnDOT warns of illegal signs The Minnesota Department of Transportation, in anticipation of the spring Parade of Homes home tour, is warning homebuilders that it's cracking down on illegal open house and "event" signs along state highways. The Builders Association of the Twin Cities, in a Feb. 14 a-mail, warned its members that MnDOT and some cities are "increasingly concerned" that builders are posting signs in violation of state law and local ordinances. In a recent letter to the builders group, MnDOT stated that it has received "numerous complaints" about Realtor and builder signs cluttering state property. The transportation department warned that it plans to have extra personnel removing illegal signs during the Parade of Homes spring preview, which began Feb. 12 and runs through March 20. Removed signs will be destroyed. The MnDOT letter added that "builders and Realtors hire contractors to place their signs after normal working hours on Friday and remove them before Monday morning. They are flagrant and arrogant about breaking the law." MnDOT spokesman Kent Barnard said it's illegal for any business or individual to place signs in state highway right-of-ways. "There is no wiggle room," Barnard said. "It's a law. There are penalties in the law if it's broken. If I were them, I'd get those signs out myself, because I wouldn't want to be fined by the state." Violations are punishable by up to 90 days in jail and/or a $700 fine, according to MnDOT. The signs create hazards for motorists, MnDOT noted, because they restrict visibility and distract drivers. MnDOT defines highway right-of-ways as driving lanes, shoulders, ditches, clear zones and sight corners at intersections. "It's illegal to put a sign within the highway right-of-way, which includes about 100 feet from the center line of the highway," said Craig Wilkins, a MnDOT spokesman. "It's really distracting to drivers, and it's ugly. It's more of a traffic hazard than people might imagine." Wendy Danks, BATC's marketing director, said directional signs are important tools for builders. "There are always some builders who are going to push it a little, because there's not a good place to put their signs," she said. But she stressed that BATC urges its members to find out what's allowed and what's not allowed before putting up any signs. "We're clear that you're supposed to follow the law," she said. "I view it as a reminder. We are proactively trying to get our builders to follow the rules." Health House training scheduled The American Lung Association of Minnesota is accepting registrations for its Health House builder training program. The training will address mold and other moisture-related problems in residential construction. A complete two-day workshop is scheduled for March 7 and 8 from 8 a.m. to 4 p.m., and an HVAC-only session is set for March 8 from 8 a.m. to noon. Health House training is the first step toward becoming a registered builder through the association's Health House program, a national effort that focuses on health, energy and resource efficiency in residential building. Training sessions will be held at the American Lung Association of Minnesota office, 490 Concordia Ave. in St. Paul. Cost is $250 for the two-day workshop, $75 for the half-day HVAC session. LOAD-DATE: February 24, 2005 Appendix E: Relevant News Articles (cont.) A111tDES0TA REAL ESiIATE JOURI~IL Tuesday February O1 2005 Dynamics tackles 400-acre mixed-use project BIG LAKE'S BIG PROJECT Danielle Anderson Editor Dyanamics Design and Land Co. sees big opportunity along U.S. Highway 10 in the growing community of Big Lake. The developer is in the midst of tackling a 400-acre mixed-use development that's split by Highway 10. Big Lake, which is located along the highly traveled corridor between the Twin Cities and St. Cloud, registers 21,000 automobile trips per day. The community has also experienced steady growth over the last several years. From 1990 to 2000, the population jumped from 3,100 to 6,000 people. And today the population is approaching 8,000. The proposed Northstar Commuter rail line, which borders the project, also has created some buzz. Dynamics' project includes a mix of retail, office and residential as well as light and heavy industrial. The area south of Highway 10 is zoned for commercial and industrial uses and includes 7,000 lineal feet of commercial highway frontage, according to Philip Rondeau, chief manager of Dynamics Commercial Construction. The plan calls for retail, restaurants and service businesses fronting the highway with office-warehouses set further back. The 90- acre industrial area, which has been dubbed Hudson Industrial Park, is located furthest from Highway 10. The commercial portion of the project is called Big Lake Marketplace. Rondeau says that all roads and utilities have been completed for Big Lake Marketplace on the south side of Highway 10. He adds that Dynamics has completed five land sales and that construction is scheduled to begin on a 5,000 square foot dental office and a 5,500 square foot sports bar this spring. Work has also begun on a retail strip center that will be anchored by a gas station and convenience store. Additionally, a concept plan for one of the parcels calls for four office-condo buildings, two retail strip centers, and two stand-alone pad sites. That plan has been submitted to the city. Retail plans call for neighborhood-oriented outlets to serve residents who currently drive to Elk River, St. Cloud or Coon Rapids to shop. "There are only two sit-down restaurants in town," Rondeau says, "and there's no place where you can buy a stitch of clothing." So far, Rondeau says, the industrial park has been slow to attract would-be users. "We have had different users come in and ask us, but no purchase agreements so far," he says. The industrial park's infrastructure is slated for completion by summer 2005 Rondeau says that Dynamics will begin developing the area on the north side of Highway 10 this spring. The plan calls for commercial frontage backed by a mix of multifamily and single-family housing. Appendix E: Relevant News Articles (cont.) Copyright 2004 Star Tribune Star Tribune (Minneapolis, MN) December 21, 2004, Tuesday, Metro Edition SECTION: BUSINESS; ON BUSINESS; Pg. 1D LENGTH: 889 words HEADLINE: Financing will power Elk River battery firm to '06 BYLINE: Neal St. Anthony; Staff Writer BODY: Cymbet Corp. will announce today that it has attracted $16.5 million in a second round of private- equityfinancing designed to take the Elk River-based company to large-scale commercial production of its "thin-film" technology for microscopic batteries by 2006. Cymbet makes batteries designed to work longer than the operating life of the medical devices, cellular phones, sensors and other technological gadgets that they may eventually power. "The technology works," said Bill Priesmeyer, chief executive of the 20-person, development-stage company. "The challenge has been transferring the technology into high-volume manufacturing. We have proprietary technology and a unique process to produce simple and competitive thin-film batteries that have immediate applications and cost savings." Investors believe the company is well down the road. The second round of financing for four-year-old Cymbet is one of the largest single boatloads of venture capital awarded to a Minnesota company this year. Cymbet founder Mark Jenson, a onetime Honeywell engineer, and his team have worked for several years to convert battery technology licensed from the federal government into what Cymbet calls its patented "Power Fab" manufacturing process. That's designed to permit cost-effective production of tiny, flexible and energy-efficient batteries that can be built into a semiconductor and remain charged for life. "Cymbet's batteries can be designed directly into integrated circuits or the electronics they power," said Vittal Kini, a research director at semiconductor maker Intel, one of the investors. "This innovation can drive down system costs while giving the system designer more design flexibility." Nearly $6 million of the $16.5 million in funding was raised from affluent individuals by Miller Johnson Steichen Kinnard. Dick Nigon, MJSK's head of corporate finance, has a long relationship with Priesmeyer. Nigon was a longtime audit-team leader and partner with Ernst & Young, and Priesmeyer was chief financial officer of Jostens Inc., a client. "I read Cymbet's plan in 2003, saw Bill's name on it, we started talking, and more than a year later we got this second round done," Nigon said. "We are very pleased to be among the astute crowd that has invested here because there's no way we can validate that technology on our own." In addition to MJSK's individual investors and Intel Capital, Cymbet investors include: -The Ignite Group, a venture firm based in Silicon Valley and Tokyo that focuses on communications and software. - Bekaert, a Belgian technology company focused on metal and advanced materials and coatings. - Dow Venture Capital, which has more than $300 million invested in life science, biotechnology, electronics and elsewhere. - Millennium Materials Technologies Funds, created six years ago to invest in micro-electronics and other emerging industries. - Helmet Business Mentors Oy, a Finnish private-equity investor. Cymbet expects to increase employment at its Elk River facility by only 10 people to a total of 30 employees next year. The company expects to generate about $6 million in 2005 revenue. But a major plant and production expansion is projected in 2006, when Cymbet expects sales of $46 million. By 2008, sales are projected at nearly $250 million, according to the confidential offering statement circulated to prospective investors. In 2003, Jenson raised $4.5 million in an initial round of financing that resulted in the Polar Fab process for commercializing battery technology developed by federal researchers at Oak Ridge Laboratory. The prospectus notes that there are three other licensees of the federal technology, but none is believed to be using what Cymbet says is its novel low-temperature, economical approach. Why was Cymbet started in Elk River? Great town. Also, that's where the entrepreneurial Jenson lives. The Cymbet investment means Minnesota firms could top more than $350 million in venture capital raised in 2004. While that pales next to the $1.07 billion raised during the technology boom year of 2000, it would be one of the best years ever. Moreover, Cymbet represents an interesting departure from the state's traditional venture capital repositories of medical and health care-related companies. And there's evidence that venture investors, badly burned during the technology-company meltdowns of 2001-02, are cycling back into action. Last week, Rick Brimacomb, a partner at Sherpa Partners, an early-stage VC firm that has abandoned plans to launch a second fund on top of its 2001-vintage Sherpa Trak I, bemoaned the lack of interest in early-stage investing. However, Affinity Capital and other veteran Minnesota funds have had some success raising fresh capital from investors, observers pointed out. And Mark Hessen, president of the National Venture Capital Association, said last week that nationally the venture capital fundraising cycle is rebounding and that early-stage companies will be among the beneficiaries. Neal St. Anthony can be reached at 612-673-7144 or nstanthony@startribune.com. LOAD-DATE: December 22, 2004 Appendix E: Relevant News Articles (cont.) Copyright 2004 Star Tribune Star Tribune (Minneapolis, MN) December 15, 2004, Wednesday, Metro Edition SECTION: NORTH; Pg. 17N LENGTH: 107 words HEADLINE: ELK RIVER: WHAT'S GOING IN HERE?; Elk Ridge Retail Center BYLINE: Sarah McCann; Staff Writer BODY: WHAT: Elk Ridge Retail Center WHERE: Hwy. 169 on the east and 197th Av. NW. to the north in Elk River WHO: The developer is Hempel Properties Inc. Morcon Construction is general contractor. DETAILS: The project is about 100,000 square feet broken down between seven buildings ranging from 4,500 to 30,000 square feet. The tenant mix is from financial (U.S. Bank) to neighborhood and destination retail including restaurants. COST: $20 million DATES: Site work is nearly complete, and building construction will start in winter 2005. The development will be complete in late 2005 or early 2006. GRAPHIC: MAP LOAD-DATE: December 16, 2004 Appendix E: Relevant News Articles (cont.) ~5~ tra>rxro~j~~~.t`U., Plans for Elk River redevelopment taking shape MinneapolislSt.Paul Business Journal-December 7,2ooA The Elk River City Council approved plans Monday night for the redevelopment of several blocks of its downtown. Approved plans call for the construction of a three-to-four story building on the so-called Bluff Block, the corner of Main Street and County Road 42. It will include underground parking, ro,ooo square feet of commercial space on the first floor and 6o to 68 units of For-sale housing. On the corner of Main Street and Jackson Avenue, the city approved plans for atwo-story building including 32 rental housing units, to,ooo square feet of commercial space and underground parking. Additional parking also will be constructed at King Avenue. Elk River will kick in some financial assistance to the developer, St. Paul-based MetroPlains Development, by providing the company with a portion of the property tax generated from the project over 25 years. MetroPlains will acquire the land and break ground on the project in the Spring of zoos, according to a statement from the city. "Although there is still some work left to be done, we are excited to have reached this important final stage during which construction begins," said Catherine Mehelich, Elk River's director of economic development. "This project is critical to our downtown and community." Appendix E: Relevant News Articles (cont.) .'~"~~~~ tNAENPD~ ~1J pxI1La Elk River seeks more industrial parks Minneapolis/St. Paul Business Journal -November 28, 2444 fay Scott D. Smith Staff reporter Elk River city officials plan to open about too acres of city-owned land for industrial development. Leaders say they need more business parks to accommodate a heightened interest in industrial development in Elk River. In particular, an unnamed Elk River manufacturer is searching for a site tobuild a too,ooo-square-foot facility. Some city leaders fear Elk River may lose the manufacturer due to a lack of available land, said Cathy Mehelich, Elk River's director of economic development. "Our goal since 200o has been to be the light-industrial hub in the northwest metro." Existing Elk River industrial parks include Elk Path Business Center, Sandpiper Business Park and Elk River Business Park, which comprise more than r2o acres. City officials hope to have the raw land available for development in the spring, Mehelich said. Sewer lines already run through the areas. One site, known as the Brown property, is located north of r'73rd Avenue near'I~vin Lakes Road. It includes 9o acres, 45 of which are developable. The other site, known as the Cargill property since it was bought from Minnetonka-based Cargill Inc., includes about 6o acres next to Highway ro north of mist Avenue. The city would sell land in the parks for the market rate of $2.25 to $3 a square foot, Mehelich said. However, the city also would consider tax abatement or tax increment financing deals to entice businesses, she said. Municipal business parks typically "work out well for users, but arguable not so well for competing developers," said John Ryden, first vice president in the Bloomington office of CB Richard Ellis. Other cities, such as Anoka and Ramsey, essentially offered free land to entice large businesses to their parks, he said. However, demand has increased for Elk River industrial land as parks in Ramsey and Anoka are becoming full. "I would say the timing is real good on the city's part." Ryden also noted that most communities south of Elk River have started requiring more attractive exteriors on industrial buildings. "So for your basic, vanilla industrial building, Elk River is about as close in as you can get." Appendix E: Relevant News Articles (cont.) Copyright 2004 Dolan Media Newswires Finance & Commerce (Minneapolis, MN) November 11, 2004 Thursday SECTION: NEWS LENGTH: 101 words HEADLINE: Hempel Properties launches Elk River retail project BYLINE: Staff BODY: Hempel Properties of Plymouth has begun construction on the Elk Ridge Retail Center at Highway 169 and 197th Avenue in Elk River. The complex, featuring a northwoods architectural theme, will include big-box stores, restaurants, financial services firms and shops. The project includes 100,000 square feet of retail. Hempel is partnering with NAI Welsh to market and lease the complex. NorthMarq Capital provided financing. Morcon Construction is the general contractor and Miller Dunwiddie the architect. Hempel officials said they picked the site because of its rapid growth and demographics. LOAD-DATE: November 13, 2004 Appendix E: Relevant News Articles (cont.) MINMES011 REAL ESTATE JOURNAL MREJ Leasing Guide November/December 200a Patience pays off for Elk River venture ECONOMIC REBOUND REVIVES ORLUCK INDUSTRIES PROJECT By Murray W. Wolf In mid-2001, with a booming business and dwindling space in his leased facility in Dayton, Minn., Mark Orluck was getting serious about relocation. His goal was to build a new facility somewhere in the northwest Twin Cities metro area. But, those plans got sidetracked when 9/11 and a declining economy slowed the growth of his high-precision manufacturing firm. Fortunately, times have changed. Orluck Industries Inc. recently received final city and county approval for a new $1.41 million, 23,000 square foot manufacturing facility on 2.79 acres in Elk River. "Manufacturing has improved for us. It's gradually getting better," Orluck says. "So, it's just a good time to do it." But, even with an improving economy, Orluck Industries probably wouldn't have been able to relocate to a new facility without the support of the City of Elk River. City staff remained in close touch with Orluck even during the economic downturn. So, when he put the project back on the front burner early this year, they were fully prepared to move ahead. The Elk River Economic Development Department crafted an aggressive package of financial assistance, and city staff shepherded the project through afast-paced approval process this spring. "We've stuck with them through the long haul," says Catherine Mehelich, Director of Economic Development. "Elk River has shown continued confidence in Orluck Industries and its potential." "I did talk to other cities, too," Orluck admits. But, in the end, he says he made the right choice by selecting Elk River. "Anybody I've dealt with there has been really positive and really aggressive in trying to make a deal that would work," he says. "Orluck Industries is a great fit for the city of Elk River," says Mayor Stephanie Klinzing. Just as Orluck is a young but successful company that is ready to take the next step in its growth, the mayor says, Elk River is an up-and-coming community that is ready to take the next step in its industrial development. "When they come here, they'll grow with us," Klinzing says The lot was a key component Orluck Industries is a manufacturer of high precision metal and plastic components serving industries in Minnesota and across the United States. Mehelich says she first visited the firm's Dayton facility about two years ago and, even then, it was obvious that it had outgrown its leased space. "That was a telltale sign they were certainly ready for some elbow room and some expansion," she says. At the time, the firm leased about 4,800 square feet. It has since expanded to about 6,000 square feet, Orluck says. But, it's still not enough. Orluck Industries plans to occupy about 15,000 square feet in its new Elk River facility, with the remaining roughly 8,000 square feet leased to business park district eligible tenants. The city's financing package starts with the site. It's a choice parcel at the southwest corner of Joplin Street and Business Center Drive, one of Elk River's most desirable new business addresses. But, the way the site is being financed - by writing down the land costs to $1 - is what is making the entire financial package viable. The property was owned by the City of Elk River, which had purchased it from Sherburne County upon tax forfeiture in 2001. City staff first proposed an Orluck Industries project for the site in 2002. But, plans stalled as the recession took hold. Elk River was "very cooperative" Fortunately, the city's patience paid off. When the project got back on track early this year, city staff proposed that tax rebate financing could enable the city to sell the lot to Orluck Industries for $1. The "instant equity" the firm gained by becoming the owner of the lot, along with another $50,000 in owner equity, enabled it to qualify fora $1.256 million loan from The Bank of Elk River to cover the costs of construction. "It gets them in for very little money down," Mehelich says. The city and county agreed to evenly split the $201,520 cost of the land. That required the approval of the Elk River Economic Development Authority, the Elk River City Council, the Sherburne County Economic Development Alliance and the Sherburne County Board of Commissioners. The city also needed to rezone the land to Light Industrial from Community Commercial. Ultimately, all of the needed approvals were granted. "The City of Elk River has been very, very cooperative, aggressive and easy to work with," Orluck says. "Very professional." In addition to the financing package, Orluck says he was attracted to EIk River by its location, close to his customers and employees. From a personal standpoint, he says he and many of his employees also prefer the area's less urban lifestyle. "We just like the area," Orluck says. "We like the city of Elk River." The city will benefit, too For Elk River, which bills itself as "The Light Industrial Hub of the Northwest Metro," the clean, high-precision nature of Orluck Industries' business was a good fit with the city's economic development goals. "Those are definitely companies we like to see in Elk River," Mehelich says. Although Orluck Industries is a relatively small business, she says, "It's the small to medium-sized companies that keep our economy healthy." At the time the city was first considering the revived proposal, Orluck Industries had 13 full- time employees and two part-time workers. The firm has a history of low staff turnover, with jobs that pay about $15 per hour to $22 per hour -good wages by local standards. Although Orluck didn't commit to creating any new jobs as part of the project, Mehelich says it was a good sign that the firm added three full-time positions just while the proposal was going through the approval process. That brought total full-time employment to 16, and Orluck says he might add four to six more positions within two years. The Orluck Industries project passed its last major hurdle in June when the tax abatement financing plan was approved by the Sherburne County Board. Construction began in late October. Murray W. Wolf is the Managing Principal of Wolf Marketing & Media in Minnetonka and a frequent contributor to local, regional and national business publications. Appendix E: Relevant News Articles (cont.) Copyright 2004 Star Tribune Star Tribune (Minneapolis, MN) October 11, 2004, Monday, Metro Edition SECTION: NEWS; Pg, 1B LENGTH: 1434 words HEADLINE: Garbage-fuel plant's future looks messy; Elk River facility is facing waning interest, higher costs BYLINE: Mike Kaszuba; Staff Writer BODY: When President Bush's motorcade traveled past a few weeks ago, Bill Helliwell thought it was best to shut down the Elk River Resource Recovery Facility. He feared that the unexpected explosions that sometimes rock the building might bring more of the kind of publicity that he did not need. There was a time when the $26 million facility was a Hennepin County showcase for turning household garbage into fuel that is used to generate electricity. Nine mostly metro-area counties had helped build two refuse-derived fuel plants during the late 1980s - a sister facility continues to operate in Newport - as an environmentally sensitive answer to the region's mounting garbage. Somewhere along the way, however, things unraveled. "If I had to project back, I don't know if I would have been sold on that technology," Penny Steele, a Hennepin County commissioner, said recently, echoing what others have concluded. "I'm certainly not sold on it now." Although the Elk River facility continues to process as much as 1,500 tons of garbage daily, the world around it has dramatically changed. Hennepin County, which ships the most garbage to the plant, pays an annual service agreement fee that last year stood at nearly $16 million. Since the mid-1990s, the county also has paid additional annual subsidies that topped $7 million in 2003. Most of the counties that ship waste to either Elk River or Newport face similarly escalating costs. That's largely because a 1994 U.S. Supreme Court ruling banned local governments from forcing garbage haulers to take trash to the processing plants. Free to go wherever they wanted, the haulers often chose landfills that imposed lower fees. In order to compete with landfills and yet fulfill a 20-year contract with the plants, the counties had to dramatically drop the tipping charge at the processing plants, effectively subsidizing the Newport and Elk River facilities. In 1990, haulers in Hennepin County were charged $95 to dump a ton of trash at the Elk River plant. By 1997, the fee had fallen to $41 a ton; in 2003 it was reduced to $39.80 per ton. Nearly all of the metro counties that use the two plants have voted not to extend the existing service agreements beyond their 2009 expiration dates. While the votes do not necessarily mean the counties will sever their ties with the facilities, the plants are on the defensive. Across the nation, the once-promising technology has also largely stalled. A 2004 survey by the Integrated Waste Services Association, a Washington, D.C.-based industry group, showed that there were 89 waste-to-energy plants in the nation, a decrease of nine plants since 2002. No new refuse-derived fuel plants have been built since the mid-1990s, said Maria Zannes, the association's president. Lower landfill costs have "stopped the growth of the industry," Zannes said. Politics In Hennepin County, politics may have played a large role in the plant's creation. Former Commissioner John Derus said in a recent interview that he led the push to help Anoka County build the Elk River plant in part to limit the size of Hennepin County's garbage burner that was being built in downtown Minneapolis. Derus opposed the downtown burner, which loomed over neighborhoods he represented. Hennepin County Board Chairman Randy Johnson opposed the Elk River plant when it was built and said he remains skeptical of the technology. He recalled recently that "some of John's good personal and political friends" were among the Anoka County officials who were pushing the project. Anoka County, Johnson said, realized it needed Hennepin County's large flow of garbage to make the plant work. Former Anoka County Commissioner AI Kordiak, who left the County Board in 1986, said he remembered that "John [Derus] asked me if we would sign a joint powers agreement to get the project going, and we did that." Though the project went forward, key players said they remained lukewarm. Former Hennepin County Commissioner Mark Andrew said he voted for the project, but said "there were many questions about the wisdom of moving forward on it." The project, he said, was vigorously debated in private among the county's commissioners. "It's a dog," he said, when asked about the plant in a recent interview. . Limited contribution When it opened in 1989, the Elk River plant was seen as one of several technological advances in garbage processing. But even then, the plant's contributions were limited and it has remained a minor player in the region's trash management plans. Even as Hennepin County generated 1.6 million tons of garbage in 2002 -and recycled 39 percent of that total - 221,000 tons of garbage were processed at the plant. The county's downtown garbage burner, which is generally seen as a more efficient disposal system, annually converts 365,000 tons of garbage into electricity. Elk River plant officials, however, said the facility has done exactly what it was supposed to do. "We like to think we do a good job. We can achieve very, very high numbers," said Helliwell, who has managed the plant since 1997 for NRG Energy Inc., a former subsidiary of Xcel Energy. In fact, a 2003 independent analysis of the plant said the facility "had met or exceeded each and all of the performance standards," and added that it had met its contract goal of turning at least 75 percent of the garbage it received into refuse-derived fuel. The plant sends most of the fuel to a nearby power plant in Elk River. "[The] technology has not really changed that much," said Dave Lucas, Sherburne County's solid waste officer. Hennepin, Anoka, Sherburne, Stearns and Benton counties all haul waste to the Elk River plant, while the NRG plant in Newport accepts waste from Ramsey, Washington, Dakota and Blue Earth counties. Although Lucas said his county has voted not to extend the current contract, "we've given our assurances that we want to continue processing our waste into fuel." Image problems But, Lucas added, there area "whole number of issues" with the plant, including Financing. Then there are the explosions. The plant still shudders occasionally when small, discarded propane tanks accidentally make their way into the crushing process and explode. "We'll be having meetings in conference rooms [at the plant] ... and everybody will kind of duck" when an explosion occurs, Helliwell said. In the plant's early days, said Helliwell, officials also contended with discarded golf balls -and even bowling balls -shooting out of a roof vent after an explosion. Plant officials quickly erected a wire cage above the vent. The plant's image problems come as Minnesota continues to push a statewide policy that considers landfills a last resort for garbage disposal. "In Minnesota, there was a time when processing facilities accepted ... more waste than landfills," said Sigurd Scheurle, a planning director with the state's Office of Environmental Assistance. Jerry Johnson, coordinator for the Tri-County Solid Waste Management Commission, recalls when 70 percent of the garbage from Stearns, Benton and Sherburne counties was turned into fuel at the Elk River plant. Now, he said, it is no more than half, with more and more becoming landfill. When the processing plants were built, he explained, no one thought they were "going to be [forced] to compete with landfills, pricewise." Mike Kaszuba is at mkaszuba@startribune.com GARBAGE BILL In addition to the basic fees established under a 20-year service agreement that expires in 2009, Hennepin County pays millions in additional subsidies each year to the Elk River Resource Recovery Facility that turns trash into fuel for electric-generating plants. The extra payments help keep the fees charged trash haulers competitive with landfills. Service Additional Agreement County Subsidies Costs Paid 1997 $14.6 million $4.7 million 1998 $14.9 million $5.7 million 1999 $14.6 million $5.8 million 2000 $14.8 million $7 million 2001 $15.2 million $7.4 million 2002 $15.5 million $6.9 million 2003 $16 million $7.3 million Source: Hennepin Cou nty Appendix E: Relevant News Articles (cont.) Copyright 2004 Dolan Media Newswires Finance & Commerce (Minneapolis, MN) October 7, 2004 Thursday SECTION: NEWS LENGTH: 127 words HEADLINE: K. Hovnanian Homes launches first Twin Cities project BYLINE: staff BODY: K. Hovnanian Homes, a national homebuilder that entered the Twin Cities market in March, has announced its first project -Twin Lakes Estates in Elk River. The community will include 147 single-family homes that range from about 2,000 square feet to almost 2,900 square feet. Sales are expected to begin this winter with first deliveries coming in late 2005 or early 2006. Prices will start at about $300,000. Tom Standke, division president of K. Hovnanian in Minnesota, described Elk River as a "pretty and vibrant town that is growing intelligently." Standke said the firm -the eighth largest homebuilder in the country - is also looking for opportunities that will enable it to build townhouses and active-adult communities in the Twin Cities. LOAD-DATE: October 8, 2004 Appendix E: Relevant News Articles (cont.) j~~./~1Vly Posted: 6/4/04 Andover Station North development plans taking shape by Kelly Johnson Staff writer Development plans for Andover Station North are starting to take shape. The Andover Economic Development Association (EDA) at its May 25 meeting approved a residential developer for the project and authorized city staff members to market the commercial portion of the site. Andover Station North is located just west of Hanson Boulevard and north of Bunker Lake Boulevard. The EDA would like to see the property develop with both residential and commercial components, similar to the development in Andover Station, on the south side of Bunker Lake Boulevard. Although the EDA requested proposals for the commercial development, the EDA members decided to have city staff members market the commercial property for the next year. With construction underway on Target Greatland in Andover Station, the EDA and city staff members feel that will help bring new commercial interest in Andover Station North. "A year from now, things will happen that we've never thought of," said Will Neumeiser, community development director. The EDA approved working with Bruggeman Properties, LLC on the residential development with a 4-0-1 vote. Ken Orttel, who arrived just prior to the vote, abstained and resident EDA members Fred Larsen and Robert Nowak were not at the meeting, Members of the EDA heard proposals for the development of Andover Station North at their April 19 meeting. The EDA received development proposals from United Properties, Meridian Land Company, Town and Country Homes, Ryland Homes, Positive Development, Inc. and Bruggeman Properties LLC. These proposals included plans for developing the residential and commercial components of the site. The Bruggeman Properties LLC proposal calls for one- and two-level townhomes in the northwest corner of the property. Members of the EDA and the developer will work together to finalize the plans for the residential development. Kelly Johnson is at kelly.johnson@ecm-inc.com. Appendix E: Relevant News Articles (cont.) ~~ t1MMEAp0US~1! p~~~ City plans 120-acre industrial park to bring Monticello jobs PAinneapalis/St. Paul Business Journal -April 30, 2Q09 by Scott D. Smith Staff reporter Monticello city leaders think the private market isn't attracting enough industrial jobs, so they plan to open a t2o-acre industrial park that will compete with nearby land owners. The leaders are in negotiations to purchase the acreage of raw land at the southwest quadrant of the intersection of Highway 25 and Interstate 94• "We would be in a better position if we had our own land to market rather than relying on the private market," said Rick Wolfsteller, city administrator for Monticello. City leaders want to attract well-paying, industrial jobs before homeowners and retailers consume all its land. "We don't just want to be a bedroom community with a Target store," Wolfsteller said. It is not uncommon for cities to purchase land for industrial parks. Examples in the north metropolitan area include Elk River, Anoka, Buffalo and Big Lake. If the deal goes through, the city plans to spend about $3 million to buy the t2o acres owned by John Chadwick of Bloomington-based Otter Creek, Wolfsteller said. The city would spend another $3 million for infrastructure, including roads, sewers and water service, he said. Chadwick would not sell his entire parcel. He is retaining a 4o-acre strip of land fronting I-94• By starting its own industrial park, Monticello will compete with the Monticello Industrial Park, 40 acres of industrial land within a mile of the city's proposed development. The city identified Shawn Weinand, of Osseo-based Progressive Development & Construction, as one of possible several investors in that property. Weinand also has an interest in another 3o acres, which constitutes nearly all of the land in Monticello available for industrial development. Weinand could not be reached for comment. To counter a "monopoly" on the industrial land in Monticello, Wolfsteller said, city leaders want to open up the market to lure companies to Monticello. Charles Pfeffer, president of Maple Grove-based Pfeffer Co. Inc., has brokered land for the Monticello Industrial Park for about r2 years. Pfeffer would not disclose the owner's name. Pfeffer said city leaders can spend tax dollars on a real estate play if they want to, but he added that "maybe the city council should evaluate the need for assets that would serve a broader range than to do a speculative purchase." The Monticello Industrial Park has seen some sale activity in recent years, Pfeffer said, but industrial development has been slow there, like in the rest of the metropolitan area. However, Monticello is along the rapidly growing I-94 corridor between Minneapolis and St. Cloud. It is seeing strong demand for retail projects at the intersection of Highway 25 and I-94. Several big- box retailers including Target, Wal-Mart and Home Depot are considering Monticello, and Wolfsteller expects that within three years the city will have some of those stores located in that area, he said. "They're al] interested in Monticello; we meet with one of them almost every other day." ssmith@bizjournals.com ~ (6zz) 288-2zo~ Appendix f: Competitive Data Primary Competitors Andover has regularly been running four-color advertising in the ND~VER~` Minnesota Rea! Estate Journal. It has been touting its Andover Station project with a tag line "The North Metro has a new player." According to the City of Andover Comprehensive Plan, nearly 85 percent of the Anoka County community is guided fox residential development. Two industrial areas exist. One is located at the southwest corner of Hanson and Bunker Lake Boulevard. The second is located at the northeast corner of Round Lake Boulevard and CountS~ Road 20. The land use plan establishes residential, commercial, industrial and other districts and provides goals and policies fox each district A transitional zone has been established to accommodate future commercial/light industrial growth. The TC, Transitional Commercial/Industrial district includes areas along major roads or intersections that axe not zoned fox commercial at present but could be suitable in the future. City Web site: www.ci.andovex.mn.us Although Anoka has been perceived in recent years to be one of Elk River's primary competitors in the area of economic development, it is a mature urr~ community with a rapidly dwindling inventory of industrial land. NUKA As of mid-August 2006, the City of Anoka Web site listed only two small (.6 and 2.9 acres) industrial land parcels. Several existing buildings of up to 432,000 ', square feet were listed fox sale ox lease. City Web site: unvw.ci.anoka.nm.us Located just west of Elk River, also in Sherburne County, Big Lake is perceived to be one of Elk River's primary competitors fox economic development opportunities. Elk River recently lost Industrial Molded Rubber Products Inc. to Big Lake, fox example. Numerous industrial ~'~` +~` and commercial development sites, as well as leasable space in existing ~ ~ buildings, are available in this fast-growing Sherburne County community. The joint city/township Industrial Paxk East includes sites ranging from 25 to 6.5 acres. The privately owned Dynamic Development Business Paxk has lots ranging from 10 to 20 acres. One of the most notable projects in the community is Big Lake-based Dynamics Design & Land Co. LLC's new 450-acre mixed-use Big Lake Marketplace development, which has up to 50 acres earmarked fox industrial development. The development is situated north and south of U.S. Highway 1Q just three minutes west of Elk River. The project is being marketed by Cushman & Wakefield/Northstar Partners. Possible Tax Increment Financing (TIF) and other incentives are available through the City of Big Lake. City Web site: www. biglakemn.oxg E1 Appendix F: Competitive Data (cont.) to develop closexto 2013. Dayton is a small community in northwest Hennepin County, with a small portion in extreme eastern Wright County. The prevailing sentiment in Dayton is to "keep it rural." But the southwestern area of Dayton is projected to experience major changes through 2013. This area is designated fox future industrial and commercial development. The areas located closer to County Road 81, Territorial Road, County Road 13 / Brockton Lane and I-94 are expected to be developed by 2010. The areas that are not as close to these major roads axe expected There is currently no dedicated economic development staff in Dayton. City Web site: www.ci.dayton.mn.us City Like Anoka, Maple Grove has, in the past, been one of Elk River's Maple Grove primary competitors in the area of economic development. However, the Hennepin County community is also a mature city with a shrinking inventory of industrial land. The cost associated with Maple Grove industrial property - whethex fox sale or lease -are also significantly greater than the costs of comparable properties in Elk River and its Northwest Metro neighbors. City Web site: www.ci.maple-grove.mn.us Recently, Monticello has not been one of Elk River's primary competitors for economic development opportunities. This northeastern Wright County community stopped marketing industrial land about two years ago due to a diminished inventory ~ of available parcels. However, Monticello acquired 35 acres in December 2004 and controlled another 85 acres through a contract for deed southwest of I-94 along the Rtq*FfIC~1.L0 newly extended Chelsea Road, Infxastrucmxe improvements were completed last fall and the city is aggressively its new 120-acre Monticello Business Center with fmancial incentives such $1 industrial land and a local revolving loan fund with interest rates as mucH as 2 percent below Prime. The city has set up a simple but attractive Web site dedicated to the new park: wwev.monticelloland.com. Since Monticello is only about 12 miles away and about three miles southwest of Big Lake - it is probable that Elk River will find itself competing with Monticello in the future. Monticello enjoys ahigh-visibility location at the Interstate 94 and Minnesota Highway 25 interchange. The city has sold one 8.6 acre site in the new Monticello Business Center. Other recent industrial development activity included the June 2006 groundbreaking fox a new 25,000 square foot, multi-tenant industrial building being developed by Blue Chip Development Co. at 210 Dumas Road. The building, which is being built at a site southeast of the I-94/Highway 25 interchange, is to be anchored by Precision Technologies, which plans to relocate from Rogers. City Web site: www.ci.monticello.mn us E2 Appendix F: Competitive Data (cont.) In June 2006, the tiny Hennepin County community of Osseo began a is ;, redevelopment master planning process. This summer, the Osseo EDA has also been exploring the idea of generating economic development funds by establishing an EDA ~ levy. At a July 11 Osseo EDA meeting, the potential uses of levy funds were fisted as: staff time, redevelopment efforts and low- to moderate income housing efforts. The benefits of establishing a levy were described as providing dedicated funding for development projects, such as development in the city's industrial park, and assisting with the city's goal of continuing to provide opportunities fox people to work in the community. Both the redevelopment master planning process and discussions of an EDA levy are still in progress. City Web site: www.ci.osseo.mn.us ~y pr Located directly across the Mississippi southeast of Elk River in Wright ~~'i'~7iw• ~Q County, Otsego is perceived to be one of Elk River's primary current and future competitors fox industrial development opportunities. By far qN Tl1E GREAT RIVER Rp~1R the most notable new project in this fast-growing Wright County community is the planned Gateway North Business Center. The master-planned industrial park, which is being developed by Indianapolis-based Duke Realty Corp., is earmarked fox about 129 acres at Minnesota Highway 101 and 60`h Street Northeast, about four miles north of the Rogers exit on Interstate 94. Plans call fox office, warehouse, manufacturing and distribution space. The phased development is expected to take &ve to seven years to build out. The first phase, the 153,000 square foot Gateway North Business Centex Ioffice/warehouse facility, is scheduled to be avaIlable April 1, 2007. Published lease rates axe to be $4.75 per square foot (PSF) fox warehouse and $9.75 PSF fox office. Subsequent phases are to include eight more buildings ranging in size from 56,000 square feet to 257,6000 square feet. The project is being marketed by CB Richard Ellis. In an Aug. 14, 2006, article in the Minneapolis'-St. Paul Bunnear Journal, Pat Marcia of Duke said that the firm is completing two industrial buildings in Brooklyn Paxk that have leased up and is evaluating whether to build spec space at Otsego. At an Aug. 16, 2006, Wright County Economic Development seminar, Mx. Marcia said that Duke's top three reasons for selecting the Otsego site were: ^ The Northwest Metro is where office/warehouse tenants want to be and Duke akeady has a presence in Brooklyn Park. ^ Duke wanted to develop buildings with a 30:70 office to warehouse ratio. Most cities, including Elk River, require a 40:60 ratio. ^ Otsego provided incentives toward bringing utilities to the site. City Web site: www.ci.otsego.mn.us E3 Appendix F: Competitive Data (cont.) Elk River has frequently competed with Ramsey over the past several Located on Interstate 94 and Highway 101, south of Elk River, Rogers has been on of Elk River's primary current and future Rogers competitors fox economic development opportunities in recent years. With its Interstate Highway access, the northwestern Hennepin County community enjoys ahigh-visibility location. This fast-growing years. Fox example, Elk River recently competed with Ramsey for Classic Acrylics Inc. (a win) and Riverside Manufacturing (a loss). The Anoka County community is served by Highways 10 and 169. Ramsey has five industrial parks with a total of 11 city-owned parcels avaIlable ranging from .88 to 14 acres in size. There axe also several additional privately owned industrial parcels in the community, as well as leasable space of up to 30,942 square feet. The long-awaited Ramsey Town Center mixed-use project (Web site: www.ramseytowncentex com) also fmally got underway last year. The site map includes medical office but no industrial component. Fox more information about the Town Centex project, community has seen stgnificant industrial and commercial development activity in recent years, perhaps most notably the development of the Cabala's destination store, which opened in October 2005. However, Rogers appears to be hampered by a lack of available land for further development. A 6.43- acxe site along Highway 101 and County Road 144 is listed fox $2.8 million. Leasable space is available, including the existing 151,200 square foot Rogers Commerce Center industrial building. Local experts say Rogers won't be much of a factor fox new industrial development unless it annexes additional land from Hessian Township. City Web site: evww.xogexsgovoffice.com The Wright County Economic Development Partnership seems to 1ZttYtti' CDt3N7Y have been concentrating much of its recent efforts on existing businesses. For example, the EDP has been doing Business Retention & Expansion visits (BR&E) to area manufacturers and food processors for the past several months. Fox example, Annandale Foods LLC was visited in February. The goal is to gather information that can support the industry and to enable business owners to get acquainted with multiple contacts at one time. Web site: http•//wwwwrightpaxtncrship oxg E4 Appendix F: Competitive Data (cont.) Other Potential Competitors Cambridge appears to be an up-and-coming community when it comes to economic development. The city won several awards last year CAMBRID for economic development marketing, including its brochure, its Minn23ct5s C"ip(.~rG.iniM1r Corvamanity-. dedicated www.opportunitycommunity.com Web site, community profile and overall re-branding campaign. Cambridge is the closest city to the Twin Cities with JOBZ Tax Free Development Sub Zones. Cambridge has 126 acres in four different Sub zones. The largest Sub zone is the Cambridge Opportunity Industrial Park. This 102 acre site is located north of Minnesota Route 95 and east of Minnesota Route 65. The cost of land in the Cambridge Opportunity Industrial Park is $1 per acre plus $.50 per square foot fox the assessment. Land costs $1-2 per square foot in the SE Industrial Paxk. City Web site: www.ci.cambridt~e.mn.us 'N~"'`x'D Norwood Young America is not a direct competitor, but it should be ~;/~ noted that the western Carver County community broke ground in June fox the 60-acre Tacoma West Industrial Paxk. The new park is in rovafy aai~xxn the southeast coiner of the city, near the intersection of US Highway 212 and Tacoma Avenue. It includes nine lots ranging in size from 3 to ""~~"~ 11 acres. The new industrial park is suitable fox a range of uses; however, the city plans to target market to specific businesses and industries, including light manufacturers, construction related industries, bio- agricultuxal businesses, and warehousing/distribution facilities. Businesses can purchase lots for as low as $1 per square foot, subject to meeting city requirements fox lot coverage, building value and job creation. The price comes with a promise of no assessments fox infrastructure or utility improvements, and no parkland dedication fees. The new park is adjacent to two railroad lines: the Twin Cities & Western and Prairie Line Railroads. The city plans to allow outside storage in the park, if it is screened properly; and it offers quick access to US Highway 212, the future US Highway 312 connection, as well as MN State Highway 5. Norwood Young America Economic Development Coordinator Christie Rock says the driving force behind the new Tacoma West Industrial Paxk was the future US Highway 312 connection, the lack of available industrial land in the metro area, and projected population growth. It is anticipated that the new industrial park will have build able lots by latex this fall. City Web site: www.cityofnya.com ES Appendix G: Economic Data RA3~MON~ JA1ViFS' w tJ ~ f ~ T t ~ ' ~ r~ ~ Monthly Ecanc-mia Outloak Scott J. Brown, Ph.D. Increased Anxieties U.5. economic growth sJOwaa in the second quarter, partly reflecting the impact o1 higher energy costs, rising interest rates, and the coo/!rig in the housing market. Downside risks have escalated. • The moderation !n growth should help keep inflation pressures In check. Nowevar, ene7gy prices are likely to stay elevated and InOation wip remain a concern. Federal Reserve pollcymakers would like to pause, but lnt/afion concerns may keep them on fhe defensive. GDP growth moderated In 2Q06 {the government's advance estimate, along with annual benchmark revisions, is due July 28). Higher energy prices, rising interest rates, and the slowdown in the Housing market Have dampened growth. Nonfarm payrolls average a 108,000 monthly gain In the quarter, down from 776,000 In 1Q06. Job destruction has not picked up significantly - layoffs rernein relatively low- but the rate of new hiring appears to have slowed. Nowevar. The net pace of job growth is not partiwlarly weak. Assuming a stable labor force partidpation rate and a t.t°'9 growth rate of the working-age population, a monthly average gain in payrolls of 124,000 is consistent with a steady unemployment rata (sustainable job growth would be more tnan tnls If labor torte participation were to rise) kN41n: PeYrRiN mmUty ce Re L Fx .9r 350 z 3t yF •3' pC :Y. +~~ +sc +sc Sx we Sc ,~ c ~ K' ec -fY ®:u+' Yviovaa 1w.W9 .IRJ ~~ fx -.«.a ,~A, -"a .> C9a in.]3 ,na3 an.33 MYm VeNCas Sa'° ° , m'_ aaf-aC{.. an __ . . : ~- .......- • 3f ._-..~._ _. Oln fin 0^ wMMv :J p __ ___. ._.,,. ..._. _.. 8h eMM _ ID • Ie ..... _.... _.~. _.._._ ......_._.._. _..._.__.._..........~.. ~.... _ ... la v ...._.~.-...•.• n ie ___ _. „ fe _....__ ............._ fa T__..• n t3 '__-__.~ r +~ . .. .........._... ,z „ 1,, +aR3 3Qa3 3WE atl63 IQ]E pp6t 3000 <W.d Thursday, July 13, 2006 The consumer fundamentals remain sharply divided. Average weekly earnings have struggled to keep pace with inflation. However, Interest and dividend income are posting strong gains {up 7.4"I9 yty and 17.1% yly, respectively), and, along vnth robust growth in corporate profits. are boosting federal tax receipts. Seies of domestically built motor vehicles slowed in 2Q06, while sales of foreign made vehicles have Improved. Natural gas prices nave declined, but crude oil prices remain elevated. Ths economic impact of higher gasoline prices depends on the duration as well as the magnitude o1 fhe Increase. This summer's rise to gasoline prices is having a greater impact on the spending habits of Iwx• and middle^income households. Spending at the high and of the income scale is mixed, but seems to be cooling a bit more in recent weeks. Ener9V Frlxs s ' AO ].9C .~ ~kr9. O»W!w f,w:.ltllai wit -,aw«a aaaru<m, Sa _.C ea z .a aF ee ao f.ee =a f.m 19 ' _ rC 4a Pe CO pf (v" R9 M 15 pr. The housing market has cooled, but the level of activity has held up relatively well in the spring and early summer. However, homy sales and rasidentiai construttion appear to be e~eakening at a sharper pate in recant weeks. The retreat in homebulitling is likely to subtraM more than a taw tenths of a percentage point from GDP growth in the near term -not enough to force tna overall economy into a recession, but the housing correction could become steeper in the months ahead. Mortgage rates, while higher, are still relatively low. Reeidemial CM3YUdILn SGtne+'q. AtY pmwo-nn uv yea .,a uR •'^~ <GJ aao .w>.+..+m are zxR aes :,a ,,.~ r.F .ac ea ,„r^ .~ ' ,e. +s N ,a ac r^.....-w'f - _- /•.._~~. / sa R c i4 a1 .TS ai e9 G9 C. Cf C3 tt` nt C„ .]e Raymond James Financul Center, &80 Carillon Parkway, SL Petersbueg. FL 3371G ' Eco,wmlc Reaeamh; 727SU7-2603 ' Toll Frae: 896.35@8863' InaYllional Salea: 800.237-S66J `Ilmlltutio3wl TraCvrg- @00.237.8628 emaS $ otf J &vr ya'Ra+mondJames tom AI exY ea+Fns of OrNbn reAeit the judgment of ma 9asaamh taFatlmant o<Rayrgrq,kmee 8 A[SCClate, Irc (RJAj ay o tlw tla3 slated alofe 3fd are ea l~9<io ~'ge. 3a macx tae been ob aired Mnm;nttl~rary aou~cesw:xnaiiwrH:abta,Gatuvr. ra qua<arree lndl ltefatt3:nxy In".tie fcrcgattg reymi are anwafe or w'rya4Y.. ^~tx daparmants a'RJA maY tiara tdomadx 2a:. Is riot aoaeaok k ma Ressa¢h DsFerment aCdt c9apar.as m^0uned b ells rrat RJA ci ha atNUlaa may eMeNfa;laaasoonz b in®seeutEea n'entonw~ lws repoe mat m%%na oa canaiaan~ xtm the rtFaRS Cncta:~ons. ~1906Rayrnm4Jmbs8ASaosL1 I A6 Ripit Re ad GI Appendix G: Economic Data (cont.) Ni~ws F2~l~s Date: June 30, 2006 Contacts: Patti Lorenzen 612-204-5261 patti.lorenzenCcilmpls.frb.ora Toby Madden 612-204-5372 tobv.maddenCa~mpls.frb org FOR IMMEDIATE RELEASE Minneapolis Fed survey finds service firms optimistic MINNEAPOLIS, June 30, 2006-Accountants, architects, engineers and other professional services firms in the Upper Midwest did well over the past year and expect to continue to grow over the next 12 months, according to a recent survev of nearly 400 professional services firms conducted by the Federal Reserve Bank of Minneapolis and the Minnesota Department of Employment and Economic Development. The survey shows growth in sales prices, revenue and productivity. Profits and employment grew slowly over the past 12 months due to higher input costs, such as supplies, transportation, equipment and space, and lower availability of workers. Over the next four quarters, respondents expect expansion in all aspects of their businesses, although they do not plan to add office space. They also anticipate more jobs and higher profits in the overall economy, but flat consumer spending and rising inflation. Firm revenue increased across the district over the past year, with more than half of respondents reporting higher revenue. The increased revenue was attributed to higher sales prices and slightly increased employment. It appears that productivity was also up, with 42 percent reporting increases. Respondents indicated that wages increased an average of 3.5 percent and benefits 3.4 percent. The result is slightly higher profits, with 43 percent of respondents noting increases. The outlook for the next four quarters is strong and optimistic across the district. Only 17 percent of respondents expect decreases in sales revenue, and just 7 percent expect decreases in productivity. In addition, respondents plan to raise prices further and add employees if they can find them in the current tight labor market. Input costs are expected to continue to increase and over half the respondents expect to increase their bottom line. The survey of randomly selected business service firms in Minnesota, Montana, North and South Dakota, northwestern Wisconsin and the Upper Peninsula of Michigan was conducted in May and early June. It is the first of what is anticipated will become an annual poll. The Minnesota Department of Employment and Economic Development conducted the Minnesota portion of the survey. See complete survev results. Gz As one of the 12 Federal Reserve Banks, the Federal Reserve Bank of Minneapolis contributes to a variety of Federal Reserve System functions, including operation of a nationwide payments system, distribution of the nation's currency and coin, supervision and regulation of member banks and bank holding companies, and serving as a fiscal agent for the U.S. Treasury. Additionally, the president of the Minneapolis Fed serves as a member of the Federal Open Market Committee, the monetary policymaking arm of the Federal Reserve's Board of Governors. -30- G3 Appendix G: Economic Data (cont.) ~` News RI~~ Date: December 15, 2005 FOR IMMEDIATE RELEASE Media Briefing [PowerPoint Presentation] Contacts: Patti Lorenzen Media Representative 612-204-5261 Patti Lorenzen(camols frb org Tobias Madden Regional Economist 612-204-5372 Toby MaddenCalmols frb ora Minneapolis Fed Forecasts Continued Expansion In The Ninth District Economy For 2006 MINNEAPOLIS, Dec. 15, 2005-The economy in the Ninth Federal Reserve District is expected to continue expanding in 2006, despite concerns about higher energy and materials prices, and a likely slowing in home building and residential real estate. The Ninth District includes Minnesota, North and South Dakota, Montana, northwestern Wisconsin and the Upper Peninsula of Michigan. The Federal Reserve Bank of Minneapolis announced the regional economic outlook for 2006 during a media briefing today at the Minneapolis Fed. This forecast includes information from the Minneapolis Fed's statistical forecasting models, results from the fedgazette's annual business conditions outlook Doll of 345 district business leaders, a survev of 474 district manufacturers conducted by the Minneapolis Fed and the Minnesota Department of Employment and Economic Development, and a survev of 113 district agricultural lenders. Employment The outlook for labor markets in 2006 is positive, reflecting expectations for increased economic growth. The strongest growth is expected in Montana, while the slowest growth is expected in the Upper Peninsula of Michigan. District business leaders indicate that labor markets are tightening. While a majority of respondents to the poll expect to increase employment at their companies, many are beginning to indicate difficulty finding qualified workers. Hiring in the services, manufacturing and construction sectors will expand. In contrast, the agriculture and retail sectors anticipate decreases in employment levels. Unemployment In most district states, unemployment rates will stay about the same in 2006 as in 2005. Rates are anticipated to decrease slightly in Montana from 2005 levels, remain flat in South Dakota, and increase slightly in the other states. Wage growth of 3 percent or below is expected throughout the district. Personal income should post healthy growth in 2006, a positive sign for consumer spending. Prices Increases in energy and materials prices have several business leaders concerned about their souring effect on profits and the overall economy. Poll respondents expect input prices G4 to increase in 2006, and most plan to pass those increases on to their customers in the form of higher selling prices. Real Estate Housing markets will likely cool somewhat during 2006, but will likely not go into a deep freeze. Commercial real estate and construction activity are showing signs of strengthening, Manufacturing The manufacturing sector is expected to be solid in 2006. Manufacturers expect robust gains in sales and plan to add employees and increase investment in plant and equipment. Agriculture The district agricultural sector saw increases in total production of corn, soybeans and wheat in 2005. The preliminary outlook for growing conditions in 2006 is positive. District farmers and ranchers received decent prices for commodities in 2005 and expect solid prices for 2006. However, there is a deep concern over the increases in input costs, especially fertilizer and fuel. Larger revenues are expected in 2006, but profits may be suppressed by higher costs. Articles to be published in the January 2006 fedgazette: District economic expansion to continue in 2006 District business leaders expect modest overall growth in 2006 Manufacturing On the up and uo Despite large harvest, ao lenders worry The forecast in detail, including state-by-state forecasts: Ninth District Economic Forecast As one of the 12 Federal Reserve Banks, the Federal Reserve Bank of Minneapolis contributes to a variety of Federal Reserve System functions, including operation of a nationwide payments system, distribution of the nation's currency and coin, supervision and regulation of member banks and bank holding companies, and serving as a fiscal agent for the U.S. Treasury. Additionally, the president of Minneapolis Fed serves as a member of the Federal Open Market Committee, the monetary policymaking arm of the Federal Reserve's Board of Governors. Together with its branch in Helena, Mont., the Minneapolis Fed serves the Ninth Federal Reserve District, which includes Minnesota, Montana, North and South Dakota, 26 counties in northwestern Wisconsin and the Upper Peninsula of Michigan. c;5 Appendix G: Economic Data (cont.) ~^~~.~.. Id~YY FZ~i~~~ FOR IMMEDIATE RELEASE Contacts: Patti Lorenzen 612-204-5261 oatti.lorenzen(cDmols.frb.ora Toby Madden 612-204-5372 tobv. maddenCalm ols.frb.ora Date: March 10, 2005 Minneapolis Fed survey finds manufacturers optimistic MINNEAPOLIS, March 10, 2005-Upper Midwest manufacturers anticipate stronger activity for their companies and are hoping for healthier profits in the first half of the year, according to a winter survey of manufacturers conducted by the Federal Reserve Bank of Minneapolis and the Minnesota Department of Employment and Economic Development. Production and new orders are expected to jump. "To meet the expected increased demand, companies plan to aggressively hire employees and increase productivity through capital investments, which would result in an anticipated slight increase in profits," noted Toby Madden, regional economist at the Minneapolis Fed. He cautioned that price increases for raw materials and parts continue to be a concern. Following are selected results of the expected growth in the first half of 2005 for Ninth District states: • 73 percent of the respondents from the Upper Peninsula of Michigan forecast increased capital investment. • 41 percent of Minnesota respondents expect production to increase. Only 14 percent expect decreases. • 56 percent of Montana respondents see larger orders. 65 percent of North Dakota respondents are looking for increased productivity. • 40 percent of South Dakota respondents forecast increased employment and only 3 percent anticipate decreases. • 44 percent of western Wisconsin respondents expect prices on their products to increase. Only 7 percent expect decreases. This outlook is reflective of their experiences in the second half of 2004. While manufacturers were busy during the last two quarters of 2004, the bottom line didn't have much to show for it. Survey respondents reported that new orders, production, investment in equipment, employment, productivity and prices were up during the last half of 2004. This strength appears widespread across the six-state district and in businesses of all sizes. Profits, however, were anemic as respondents from Minnesota and Montana indicated decreases in profits and manufacturers from other district states reported only small increases. Gv "The recent change in the value of the dollar may be driving the increased volume of activity," Madden said. "Exports are up and imports are down, but the weak dollar has increased the price of imported materials." The respondents also expressed their views on the overall economies of their respective states. The outlook for the state economies in the Ninth Federal Reserve District are generally positive as manufacturers expect the overall economy to grow in the first half of 2005. They predict investment, business investment and consumer spending will increase at a healthy pace, although weak overall corporate profits and a significant rise in inflation are anticipated. The survey elicited 397 responses from 2,906 randomly selected manufacturing companies in Minnesota, Montana, North and South Dakota, northwestern Wisconsin and the Upper Peninsula of Michigan. The Minnesota Department of Employment and Economic Development conducted the Minnesota portion of the survey. See complete survey results by district state and employment size. As one of the 12 Federal Reserve Banks, the Federal Reserve Bank of Minneapolis contributes to a variety of Federal Reserve System functions, including operation of a nationwide payments system, distribution of the nation's currency and coin, supervision and regulation of member banks and bank holding companies, and serving as a fiscal agent for the U.S. Treasury. Additionally, the president of the Minneapolis Fed serves as a member of [he Federal Open Market Committee, the monetary policymaking arm of the Federal Reserve's Board of Governors. G7 Appendix G: Economic Data (cont.) Date: Tuesday, August I5, 2006 For Immediate Release Conran: Kit Borgman 651/297-1192 Kit. BorQman(astate. mn. u Minnesota Accounts for 10 Percent of U.S. Job Growth again in July -- State added 11,600 jabs in 13th straight month of job gains ST. PAUL- Minnesota added jobs for the 13th straight month in July with an increase of 11,600 jobs, according to figures released today by the Department of Employment and Economic Development (DEED). On average, Minnesota's job gains over the past four months account for 10 percent of the nation's job growth. Over-the-year job growth is up 79,250 jobs, or 2.9 percent, on an unadjusted basis -the highest rate since March 2000, and more than double the national growth of 1.3 percent. The over-the- year number tops the strongest similar 12-month period in the boom years of the 1990s -when jobs grew by 70,000 between July 1994 and July 1995. For the past four months, Minnesota has been adding jobs more than four times faster than the average monthly gain in 2005, while the nation's growth rate has fallen off more than 30 percent over the same time span. The seasonally adjusted unemployment rate rose two-tenths of a point to 3.8 percent in July. Most of this rise is due to an increase of 6,100 people in the labor force -the first increase in the labor force since February. "The state has been adding jobs at an average of more than 11,000 per month for the past four months and is strongly outpacing the national rate," said DEED Acting Commissioner Ward Einess. "This fantastic job growth provides great momentum for Minnesota's economy." Seasonally Adjusted Unemployment Rate July June G8 Communications Offce • Web site: www.deed.state.mn.us Phone: 651/297-1192 or 1-800-657-3858 • Fax 651/215-3841 ...2006 2006_ _.. MN 3.8 percent 3.6 percent US 4.8 percent 4.6 percent Not Seasona lly Adjusted Employment Rate July June July'OS-'06 July'05-'06 2006 2006 Level Percent Change Change MN 2,785,500 2,773,900 79,250 2.9 percent US 135,354,000 135,241,000 1,728,000 1.3 percent County and substate figures for May should be available on the web no later than August 22, 2006 at www.deedstate.mn.us/Imi/tools/laus/disula~p~Qeog-2704. G9 Appendix G: Economic Data (cont.) Date: Friday, March 24, 2006 Contact: Bob Isaacson For Immediate Release 651/297-3615 Bob.lsaacson(a~stale.mn.us JOBZ Initiative Sustains Momentum in Second Year, Passes 200 Deal Mark Direct Impact Includes 3,100 Jobs and $276 Million in Capital Investment St. Paul -Minnesota's Job Opportunity Building Zone (JOBZ) initiative continued on the fast track in 2005, passing the 200-deal mark late in the year. Two years into the 12-year life of the program, Greater Minnesota communities continue to use JOBZ incentives to attract new business investment throughout the state. In the first two years of the program, JOBZ businesses have agreed to create more than 3,100 new jobs and make $276 million in capital investments. Once those goals are achieved, JOBZ businesses expect to support an additiona14,700 jobs in other industries due to business and employee spending. Overall, JOBZ-related activity is expected to generate $180 million in personal income to the state, including the Twin Cities. And that's just the beginning: JOBZ businesses hope to top their goals by 1,200 more jobs in the coming years. "JOBZ is working and so is Minnesota," said Governor Tim Pawlenty. "Our state's future prosperity depends on the innovation of Minnesota businesses. The JOBZ program continues to be an effective tool in building a more competitive Minnesota." A second-year analysis of the JOBZ initiative, prepared by the Minnesota Department of Employment and Economic Development (DEED), shows that the tax-free development program is a key reason for business investment, confirming that 92 percent of the businesses would not have made the same investment in the same location without the JOBZ benefits. An accurate "cost/benefit" analysis is possible only for 2004, since complete records exist only for the first year of the JOBZ program. On the "cost" side, the Department of Revenue estimates cio Communications Office • Web site: www.tleetlstate.mn.us Phone: 651/297-1192 or 1-800-657-3858 • Fax 651/215-3841 that the 138 JOBZ businesses received $6.4 million in tax benefits compared with nearly 3,300 jobs and $80 million in annual wages directly and indirectly generated by the 7OBZ projects. Of the 1,001 full-time jobs created by JOBZ businesses in 2004, nearly 38 percent paid wages of $15 an hour or more, far exceeding the original cumulative business goal of 14 percent of new jobs at that level. "As an economic development tool, JOBZ was designed to improve the overall standazd of living in Greater Minnesota through business success and increased job opportunities. This analysis shows that it's working," DEED Commissioner Matt Kramer said. "It's also important to note the levels of transparency and accountability that have been built into this program," Kramer said. "Along with the Deparhnent of Revenue, we've achieved a measure of accountability regarding the costs as well as the benefits of this program. Very few other states can make that claim about their business development incentive programs." The report offers details about full-time job creation by JOBZ businesses, as well as a regional breakdown of JOBZ projects, jobs, wages and tax benefits throughout Minnesota. The full report can be viewed online at: http://www.deed.state.mn.us/bizdev/PDFs/jobzannRot2005 vdf. G11 Appendix G: Economic Data (cont.) Copyright 2006 Star Tribune All Rights Reserved Star Tribune (Minneapolis, MN) August 25, 2006 Friday Metro Edition SECTION: NEWS; Pg. 16 LENGTH: 4130 words HEADLINE: Northstar rail gets another big OK; The commuter line from Minneapolis to Big Lake has one last hurdle -the final funding agreement -which could come in May. BYLINE: Laurie Blake, Staff Writer BODY: Commuters in the Twin Cities' northwestern suburbs are now just three years away from being able to park their cars at a station and take the train to work. The metro area's first commuter rail service, the Northstar, between Minneapolis and Big Lake, was cleared by the Federal Transit Administration on Wednesday to move to final design. While there's one final step remaining, this a sure sign that the $307.3 million project is a go, said project director Mark Fuhrmann. The Northstar is now expected to clear the last hurdle, a final funding agreement with the federal government, in May 2007, Fuhrmann said. Service on the 40-mile line would begin in 2009. Wednesday's decision was the latest in a series of key developments that have boosted the Northstar line in the past few months. In May, project officials reached a tentative agreement with the Burlington Northern Santa Fe Railroad, on whose freight tracks the line will run. In June, Gov. Tim Pawlenty signed the state bonding bill that included $60 million for the Northstar project, to add to the $37.5 million approved by the state last year. The project is expected to be an alternative for commuters Coming from Sherburne, Anoka and northern Hennepin counties, they now use the increasingly congested Hwy. 10. Five trains will run to Minneapolis from Big Lake in the morning and five the reverse direction in the evening, with one round-trip reverse-commute trip a day. On weekends -six trains -three to Minneapolis and three back to Big Lake -will be regularly scheduled, and other trips may be planned for special events in downtown Minneapolis, Fuhrmann said. What's next? G12 Project officials will finish design plans and take bids on the purchase of trains, stations and a maintenance base in Big Lake and on extending the Hiawatha light-rail line four blocks to connect with the commuter-rail line. They will also finalize the purchase of time slots on the Burlington Northern Sante Fe freight line for 12 passenger trips a day on weekdays and six on weekends. The commuter schedule will be part of a permanent agreement with the railroad. Gov. Tim Pawlenty welcomed the news that the project will move into final design and said his administration would work aggressively to get the line up and running as soon as possible. "Northstar is an important piece of Minnesota's transportation future," he said. "It will add more transportation capacity in one of the fastest-growing areas of the state and get commuters to work and home faster." Laurie Blake - 612-673-1711 NORTHSTAR facts Length: 40 miles. Stations: In Big Lake, Elk River, Anoka, Coon Rapids/Riverdale, Fridley and downtown Minneapolis. Riders: Estimated 5,600 daily. Car capacity: 150 passengers. Amenities: Work tables, on-board restrooms, power outlets. Capital cost: $307.3 million (50 percent federal, 33 percent state, 17 percent local). Service begins: 2009 LOAD-DATE: August 28, 2006 G13 Appendix H: News from the Nuh Newsletter Please see examples of the Neer from the Hub newsletter on the following pages. H1 ~' News ~~ t ~~-~ ~~ ~!~ .y of i ~~ ~ ...i_ ~~ tel. _. . . -, E •ti, , , .< ~ ~, __ --- River Quality Label Inc. chooses Elk River for its new home LABEL AND BAR CODE PRINTING FIRM IS BUILDING NEW FACILITY IN BUSINESS PARK ver since Jon Jacobs and business Epartner Chad Johnson acquired Quality Label Inc. in 2001, the company has grown steadily. In fact, Quality Label's growth has been so strong that its 26 employees - up from 15 two years ago -have been feeling quite cramped in the 12,000 squaze foot facility the company has been leasing in Fridley. Faced with the prospect of running out of room, Mr. Jacobs, the majority owner, and Mr. Johnson began looking for a e to build a new facility to meet the company's future growth expectations. "Not only were we too crowded at the facility in Fridley, but we thought it would make good business sense to own our own building," says Mc Jacobs. Mr. Jacobs and his commercial real estate agent, Erik Gabrielson of Pine Creek Associates, looked at potential sites throughout the northwestern Twin Cities metro area In the end, they chose to build a future 25,000 square foot facility on 4.1 acres in the Elk River Business Park, just offU.S. Highway 169 and south of Home Depot. The facility is cusently under construction and is scheduled for completion by the end of August. Please see "Quality" on Page 2 Calling all lenders: Business Financing Forum is May 24 ECONOMIC DEVELOPMENT DIVISION TO EXPLAIN CITY'S FINANCIAL PROGRAMS he City of Elk River and tts Economic Development Authority (EDA) offer plenty of financial incentives to attract and retain new businesses. Among them are tax increment financing (TIF), tax abatement, the Micro Loan Fund, Technical Assistance grants, and loans from a vaziety of entities. All of these programs and loan funds can be hazd to keep track of-even for people in finance. In order to update the azea's financial enders on what's available to clients looking to locate or build in Elk River, the City's EDA and Economic Development Division are hosting the City's first Business Financing Fomm on May 24. Catherine Mehelich, Director of Economic Development, will provide information and answer questions. Also on hand will be Scott Martin of the private, not-for-profit Minnesota Capital Community Fund (MCCF), of which Elk River is a member. MCCF can provide businesses in the City with "gap" loans -beyond what's available from abank - of up to $1.75 million. "Local financial institutions are often the first contact for businesses looking to locate in Elk River, which is why we think this forum is such a good chance for us to inform lenders about all of our programs, as well as provide them with some updates about the programs," says Ms. Mehelich. "We really think of our relationship with [he financial institutions as a partnership because they provide the conventional financing for businesses while the City helps with additional financing tools." Lenders located in and close to Elk River are invited. The forum is from 7:30 a.m. to 9:30 a.m., Wednesday, May 24, at Rockwoods Banquet and Conference Center in Otsego. RSVP to the Economic Development Division at 763.635.1040. ^ City of Elk River Economic Development Spring 2006 By the end of August, Jon Jacobs and Chad Johnson will move their company, Quality Label Inc., into this new building in Elk River. Elk River asks for feedback from local developers COMMUNITY DEVELOPMENT DEPARTMENT IS WORHING TO STREAMLINE THE PROCESS The Community Development Department held a Development Fomm in late March at Elk River City Hall. Individuals and firms involved in the development process were invited. In all, 35 people representing developers, landowners, constmction companies, banks and others took part. The purpose of the forum was to update people involved in development in Elk River about changes to the process, to answer questions and, as Mr. Clazk says, to build relationships between City staff and the development community. some new people on our staff, and new roles for staff members, and we wanted to get together to make introductions and talk about the new changes we're making. It was also a good chance to build relationships, and to listen to the concerns of people in [he development community." In addition to several positive comments, the meeting confirmed that developers and builders in the past have experienced some fms[rations concerning the City's development process. example, Community Development is now setting up meetings with developers and the divisions early in the process in order td clearly define the process and schedule. Mr. Clark notes that the City currently has a heavy load of more than 20 commercial projects under development, with more coming on line this summer. As a result, the City has hired an additional building inspector to work from April to October. "The fact that 35 people aCtended was a great sign," Mr. Clark says. "We do have According to Mr. Clark, City staff has already been instituting some of the suggestions brought up at the forum. For For more information or to ask a question about the development process, please call the Community Development Department at 763.635.1031. ^ QL1alllty (Continued from Page 1) At first, Quality Labe] will occupy 20,000 square feet and lease the remaining 5,000 squaze feet to another tenant. Eventually, the company plans to expand into the whole building. prospects for such an expansion certainly look good, as Quality Label doubled its sales in the last year. "We're excited because the new facility gives us the ability to grow even more," says Mr. Jacobs. "We've got good products, good employees and good salespeople, and they']] be able to sell even more. We'll also add a fourth press. And, the new facility gives us room to have a conference room where we can meet with our clients." Locating in Elk River not only gives Quality Label the northwest suburban locale it wanted, but the City's Economic Development Authority (EDA) and City Council offered a financial incentive as well. The City provided the company tax abatement in the amount of $133,947. ~rbume County agreed to match that ..ount, bringing the total amount of tax abatement to $267,894, which equaled 75 percent of the cost of the land. Under the agreement, Quality Labe] will receive 100 percent of the tax abatement for a maximum of 10 years. In return, Quality Label has agreed to create I S new jobs within two years at a minimum wage of $15 an hour. Its employees currently earn an average of $21 an hour. "The tax abatement was key for us," says Mr. Jacobs. "As a business owner, you need to make decisions that make financial sense for your company, your employees and your customers. This move does that." Elk River officials are certainly excited about bringing the growing company to the City. "I think there are several things that are really impressive about Quality Label," says Catherine Mehelich, Elk River's Director of Economic Development. "For one thing, they've had plenty of success, which points to the quality of work they do, and they've created job growth. They also have a strong diversity of products for theindustries they serve." Quality Label produces labels and baz codes for clients in the medical, food & beverage, health & beauty, and promotions industries. Ms. Mehelich first visited Quality Label's facility in Fridley more than a year ago. The company had no conference room -- officers met with clients in a nearby restaurant -- and its presses and employees were quite cramped. `9t's the kind of company we want in Elk River because of the good jobs it provides, and because of their successful history and potential for future growth," says Ms. Mehelich. ^ City of Elk River Economic Development Spring 2006 When complete, Quality Label's new facility will more than double the firm's space. Workforce information, services at businesses' fingertips THE LOCAL WORKFORCE CENTER OFFERS RESOURCES, SUCH AS TRAINING, AT NO CCIST unning t business c to cenalnly 1 be reu tnhnu. [iut n s not alw acs a>y, c~thu. Ioen firms and sma31 companies t+-ith great products, machines. faeitities and employees treed outside help -~ a! tune, - with a atriet_s- afissucs. For example. there are bates +nc~n a mant.fucturine company needs ur find a,~ emptoy~ee proficient at operating a certain machine. Or~ there might trz a tune when a flan needs to know the going +vage for si press aperaurr. Or, maybe a cnmpanp Heads u> train an employee Iota hiebzr- levzijob_ bin simply c<ut't afford ta? do ,a_ I hr above arcjust a fe++~ examples caf +xh} sr+~zrd companies in £Jk Rivcrhave taken adeaniage of 8tm rx ounces and szr+ ices pro+-ided b~° the local t~Hira of the bthtnesoizr WorkF'arce Center, Iucatai in !vkrnticalla The private, Hai-icn'-profit center work:; in eanµmefion wide She ti£urnesota Dupurtment oft;ttrp3uyment ' Economic Development {DEED). Onz of the partners at the'+iontice£la }k'mkt urce t'en[et is Central Minnesota Jobs and-Training Services tC1~iJ't5t. 4Yhile CMItS is well-known for helping (+xal residcros find and train i`or ne++ jobs h ttl5+r provides st cnriety of resources and services }'arzompanizs located in Sherburne and Ll'right counties, as tieeh ats narthert Hennepin Conm}`. Nrhen working with businzs,cs, Ch£JTS often teams +vY[h DF 1',1)'s Pusititzh- Minnesata, which has an r,rfhcc in the Monticzi(o ik"oekForce C'entcr, "I think when companies 5nd out ubum us and all of the resources we provide, they're a littlesurprfsed by .all ofvrhtt~ wr can ofl~~ -and at no cost° says Tan Zil?oy. Business Resourcz Represzataticz ftrr C411TS, Thosz sereices include: par+~iding 'ning for new and zxisting employ=ees; ,ring find new locaticxts or p(uuzs to build a new facilit}: providing labor market information; lining up loan:: and erants from federa3. st3tc, and local gavcrnmzms. and derelopmg a variety nt trtiningprogrtms far emplogezs - some[hnes invalcutg szceral local firms- C'R111 S else helps firms to contpl}~ ssith canons emp3oymeat la.+s and sutndards. obtain permits, export products. write btuiness p(xins, find rrnplrnees. and other serrizzs. Mr.1_ipop notes that kxal small businens+s often fled it dlflicult io sbsorh the tinancixt strains cif training zmp3opees, either ne+c ar current, for higher-iecel, higher-pacing jut?e. For example, if a small company decides to promote an employee from within_ it typical)}° needs io pay the cmplo}~ee a hip~hzr waee. In [hc mzantime~ it must hiresontzonetofill the position aaeured by the employee who was promoted. However. hfr_ Li£x?y says C(vilTS can provide finautctal ,tasist:utce to co.=er the cost of providing an-the-_job training to an employee - ne+c ar existing. °As the labor market lightens up. it' critical farcampaniz~ to retain good people."''r1r. ltpov saps. "and this helps them du just that` Metal G:ratt hfachine ~ £~nginzering. which produces parts for medical device makers. Ss mte of cpriiz a few Elk Ricer corrtpanizs that usu the services and resources provided by thz CMJ"I~S and the C'entrat R--tinnesota W'orkt-orce ot~fiee. Rita Bernard, the company's Director of £fuman Resourczs, posts jcrb apenhtgs on the Minnesota lab Bank 1~ieb site (w+e-w. nmwnrks.org>, acwsional£y searches through rb homes pcx red an the same 11'eb site, checks ztvpluyanent trends and unzmploytnem statistics, and gathers information about current wages. "£ would say f use the ~~`eb silc about three times a +atek," she sa} s_ "£Cs a good place to post a job opening and look for potential employees bzcattse it targe~s the kind of workers +a~e'rz looking for:" "the company, which has I S employees. has also taken part in empkiyzc iraftung sen~ices praeidec! by CM11~S. .Atone paint, Metal Crag receite<i reimbursements while providing on-the- job training for s prarnoted zmployee. to addition, Metal Craft (. +vorking +cifh thz lkru'k Farce Canter to hack six of its machine operators receive n-aining through a low( technical college. Me 7,ipo} is looking tbrathzr companies to participate in order to put together a class otbet~-eon 12 and 18 employee;. "Those trautPng progrmts can be veto industr}" anti lab specific" Mr Lipoy sad s "£'herc can b.. a program for welders.. or machinists, or whutzcer a arrnpanp, ere sevzral companies. need.'. Ms. Bematti says site also lxriodically attends halt-day business workshops sptmsored by the 1'vorkForce Center. "the +rha?le idea is to help businesses in this area start. succeed and grew-, +chieh is good for e?:er}'one "says Mr. Zipop. £°or mta'e information on thz W'ork£~urce Center and C:emra! hlianesota labs and "training Sznres, contact Tim Zipo~~ at %63'713?? 2, or tcipoy?n. cmjts. org_ "'the \4orkftnaz Center is Jocated to 1 tJfi Pine Si. in ?vionticel3n. City of Elk River >rcauomic Z3et~elopnaE~nt Spring 200G (left) and Tim Zipoy work with area businesses. PRESORTED STANQARO u.s.1}osTAOE PAID PERMIT NQ. 706 ElK RIVER, MN 130b5 Orono Pkwy Etk River, MM 55330 Northstar Rail Line !oaks to be on track for 2UQ9 LEGISLATURE, GOVERNOR APPEAR COMMITTED TO APPROVING FINAL PROJECT or O,e past couple ofyears, Elk Ri?°er (ngnflicials tnd horsiness owners hstee heeu btg supixmers oi' dte proposed Nortirstar Commuter Rail Line, which would trtnkc a 4i}-mile ~un benveeu Minneapolis and E3ig Lake ;carting as Bunn as 2t?04, ~~~ ~, ~~ Included in the proposal is a commuter station in Flk River, which would be at a Park K Ride lot within walking dis[ance oY the C'ity's Northstar Business I?ark, near l `.S, t{ighways 10 anal 169. SAS 01 reCetit 1vCCkS, Lhe t3ews C07ntztg from the Mitinesata [,egislarnre concemSng Northstar ccmtinued m ttc positive. Fhe giwd news started in spring 2005, u4ten the Legislature committed ~3?S million to the project, Later in the year, [he Federal Transit Admitrisuation {FTA) placed the Nurthstar Commuter project on s "recurmncnded"fist -meaning htimtesuta would, in all iiketilacmd, mceive 50 percem of the project costs ffum the iedcral goceenrnuit. The most recent espmates indicate that the Rarthctarproicct would cost nbuut 5300 million. in January of this year, Gov. `tiro Pawlenty propt?sed S(i0 million in his bonding bill fiir'.4orthstar -the amour needed to recene ledenl finding. In recent weeks, the ivtinnesutt Senate Follo++ed the governw''s load, voting in favor ofallacatinc St;O nt131ian t+, tiaxthstar m its bonding bill. t_ater, in April, the Minnesota Nrntsa voted #i>r a hooding bit{ that included 550 million ti>r Northstar. l`he discrepancy in the amounts is likely to be ironed out before the 200ti legislature concludes. ""1'he Legistautre has ahead}-put lots of money into this project and?+'e realh expect the dollar:nnuum to be worked out,",ttys Elk River Mayor Stephanie Ktinzutg, wfio has been involvtd in the Northstar project. It is expected that the hvo h<?uses of the Legislature wilt a?ma together and agree un SCrO million -~ the amour! needed to garner full tederal funding, Ms. Klinziag ssys. As noted cattier, the gu.xt ne++s fnnn the i..egistature is great news fur Elk River. Load business owners say cumpletiun of the Notzhstar line, to be added to tracks operated by Burlington Northern 5ama Fe (BNSFl railroad, s+ill help them recruit and retain employees from througfiunt the llcin Cities. Furore t?hales of the convnuter litre wutdd ct>nnec[ In places as far away as tit. Cloud, the Mall afAnreriea, -Minneapolis-St. Paul International .Airpott and downtowro St. Paul. a~ ride from EIk River to duwnto+vn hlinneape?Its is expected to take just 30 minutes -with no time lost sitting in tralfir jams. `7t's a selling point for campanias when they're Irnrking to hire or recruit employees," says Mayor Klinung "because it allows thorn to hire people -quality people -- fitmt a variety of places in the metro area. The employees who worm to take the cumnmter tine don't have to u~urrv about being stook in traffic, or parking issues. That's why throughout the cotmtry iPs been proven that eompauies prefer to be located near commuter rai3 lines." D --- ,3t} o Rxver Fcv~tt>mic' l~c~e>c>Jt~~inzent Spring 20Q6 Appendix I: Public Relations Efforts and Results Please see examples of news releases on the following pages Although other public relations efforts have undoubtedly generated subsequent media coverage, the following publicity was obtained as a direct result of the public relations efforts of the Economic Development Division: "Developer acquires key downtown Elk River parcel" Minnesota Deal Estate Journal June 2, 2006 Please see Appendix E, Page E14 fox the complete text "Elk River welcomes new downtown housing, industrial park activity" Minnesota Keal Estate]ournal Nov. 1, 2005 Please see Appendix E, Page E33 for the complete text "Four manufacturing facilities sprouting in Twin Cities suburb" Finance d~' Commerce Oct 13, 2005 Please see Appendix E, Page E43 fox the complete text "Growth in Elk River" Minneapok'e~-St. Paul Star Tribune April 5, 2005 Please see Appendix E, Page E56 fox the complete text "Patience pays off fox Elk River venture" MAEJ Leasing Guide November/December 2004 Please see Appendix E, Page E69 for the complete text I1 ~ ~ ~ I xl i ~xlxl~lY a, i i i ~~ i ~iroi ~i~ ~ ~i ~~i i ~~ o'' ~'3~~~°y ~ ~~ ~ °' a,l~cy a o. Z 7.~ `J~'" z ~~ ~~ v "~ w• ~~ ~ c .5 ~ ~ c .9 .5 .5 .5 .5 to s .a ~ nv o ~ ~' ~ ~ ~~Z .ax g ~~. ~,x m xa as wl 1 N N' 'J N 'L ~ u; ', ~'~N1 '- Ca.M Rte. rv,.. L. a .. .. a ~ I a~o~~ ~ o ~'a o c „i r 'd' N O~ ~ m.~ O ~ a r v .. ~ T n u c. ~ o~ .n ~n ~n o C W W :: v ~ w v ci. ~~ °oo°o. °o ~.v. ~'a"aa~ ~ o o c 2 T, T T,.C' F' C.o 0 oy ~ ~ ~ ~ ~ ~ ,p o. o0 00o ~ ~' ~ ~ ° ~ "'' °o. u L V O W' ~ Ni O N ~ .~+ O R ~ N O C W' c0 OO ~ O .J .V+,.y ~. m p0 ~ ~..~ N .--i r. r. ~ ~° e: __. ~~ W-~ Gl. ^ O O ~. VS fA N W y Vi k C w O OO O O ~- O N ~/1 O /f N N W O ~ N N' n r. ~ Y ~p O, l O O, O OLO O O O O O~-O ~ I O O !00 0000 O~ 00 ~q O 9~~ MSC ~ ~ ~ O M e+ NI N ~ C4 u _. _ __.~ ~~O I ~O O ~ •- I~D~~. _. i. ~_~ ~ a) O~ L N~O0~0 O N~(V a W~ Wi0 ~ :..~ ~ o 0 O ~ ~ °_°'~°o S °o~°o°o ~~°o °o °oo S ~o~o p a ~~n o 0 o~n o oS'o 0 0 0 ~0 0 0 N ' 7 C r"~. c,o n M~o c ooo o6 .n ~ ~~o ~ ~ ~ n N M W en .~ O _ p ~ ~ v' ~ ~. O ~ d z ~- r ao N o v,.n ~~ zz z d ~ ~ ~ O. O I _ in b'f O _.. -~ C ~ ~ I a Colo o p~o 0 0 0 0 0~`0l o oo.0 0 0 o N'N N N N NN N N N N N N a, e a Jam. ~_ -.. ..,. ~ ~w z s ~G ~~V~' ~v, ~sv~ ac ~ v o B g~~ v 7 v x ~ ' v~ .i W,'~'~ v G ~. ~ v d Z.. v m y Y ~ J ~ ~ .1. ~ d ii u o -~ y' v u ^~VJ ~.° I a ~ A 3 Appendix K: Elk River SWOT Analysis A SWOT analysis is an analytical tool used to record the Strengths, Weaknesses, Opportunities and Threats associated with an orgattization. Based on the primary and secondary research we have gathered, as well as our own assessment, here is a SWOT analysis fox Elk River as it pertains to the City's economic development situation: Strengths ^ Excellent transportation service with U.S. Highways 10 and 169, Minnesota Highway 101 , dosepxoximiry to Interstate 94, and freight rail service ^ Northstar Commuter Rail Station coming in 2009 ^ Relatively close to the heart of the Metro Axea ^ Good workforce/employment opportunities ^ Elk River is a growing community with significant upside potential ^ Quality of life - "Where the City Meets the Country," a great place to live, work and play ^ Affordable housing ^ Good education system ^ Relatively low property taxes ^ Higher standards for design, zoning, etc., axe seen as a positive by some users ^ Offers a competitive array of financial incentives ^ Effective, highly regarding Ciry Staff Opportunities ^ Continue focus on small to medium-sized light industrial users ^ Focus more marketing efforts on attracting: o Medium to lazge light industrial users o Retaining/growing existing businesses o Complementary firms -companies that would supply or buy products and services from existing businesses. o Commercial/retail businesses ^ Pursue more redevelopment opportunities ^ Accelerate the development of Gateway Business Centex ^ Identify, acquire and prepare additional land for induatrial development ^ Continue to improve consistency and collaboration among Ciry departments Weaknesses ^ Concerns regarding transportation issues, especially the. growing traffic congestion in the U.S. Highway 10/169 area A perceived lack of available. industrial land. There axe only 20 acres left in the City-owned Northstar BusinessPark whichis at the northeast quadrant of U.S. Highways 169 and 10. TheCity also owns about b0 acres south of 171"Avenue: the planned Gateway Business Centex (the former Cargill property). But it is cuxxendy anticipated that that City-owned property won't be available fox development until 2008. ^ Not perceived as relatively close to the heart of the Metro Axea ^ Higher standards fox design, zoning, etc., axe seen as a negative by some users ^ Not in Job Opportunity Budding Zone QOBZ) ^ Not perceived as appropriate for corporate campuses Threats ^ The risk of losing out on medium- to large-sized businesses if it continues to focus its marketing on small to medium-sized businesses ^ The risk of losing out on projects -especially larger projects -due to a perceived unwillingness to work. with private developers ^ Some competitors axe selling land at lower prices ^ Opportunistically acquiring land without a coherent strategy ^ A failure to appropriately manage growth, such as by relaxing design and/or zoning standards to the detriment of existing businesses and the overall attractiveness of the community ^ Acquisitions of existing businesses, resulting in their dosuxe ox relocation K1 _~tyo ~ ~ Newly from t~ ~~-~ < <!~ Elk ~ ~s.. River Quality Label Inc. chooses Elk River for its new home LABEL AND BAR CODE PRINTING FIRM IS BUILDING NEW FACILITY IN BUSINESS PARK ver since Jon Jacobs and business Epartner Chad Johnson acquired Quality Label Inc. in 2001, the company has grown steadily. In fact, Quality Label's growth has been so strong that its 26 employees - up from 15 two years ago -have been feeling quite cramped in the 12,000 square foot facility the company has been leasing in Fridley. Faced with the prospect of running out of room, Mr. Jacobs, the majority owner, and Mr. Johnson began looking for a 'ace to build a new facility to meet the ~mpany's future growth expectations. "Not only were we too crowded at the facility in Fridley, but we thought it would make good business sense to own our own building," says Mr. Jacobs. Mr. Jacobs and his commercial real estate agent, Erik Gabrielson of Pine Creek Associates, looked at potential sites throughout the northwestern Twin Cities metro area. In the end, they chose to build a future 25,000 square foot facility on 4.1 acres in the Elk River Business Park, just off U.S. Highway 169 and south of Home Depot. The facility is currently under construction and is scheduled for completion by the end of August. Please see "Qual¢[y" on Page 2 Calling all lenders: Business Financing Forum is May 24 ECONOMIC DEVELOPMENT DIVISION TO EXPLAIN CITY'S FINANCIAL PROGRAMS he City of Elk River and its Economic Development Authority (EDA) offer plenty of financial incentives to attract and retain new businesses. Among them are tax increment financing (TIF), tax abatement, the Micro Loan Fund, Technical Assistance grants, and loans from a variety of entities. All of these programs and loan funds can be hard to keep track of-even for people in finance. In order to update the area's financial lenders on what's available to clients looking to locate or build in Elk River, [he City's EDA and Economic Development Division are hosting the City's first Business Financing Foram on May 24. Catherine Mehelich, Director of Economic Development, will provide information and answer questions. Also on hand will be Scott Martin of the private, not-for-profit Minnesota Capital Community Fund (MCCF), of which Elk River is a member. MCCF can provide businesses in the City with "gap" loans-beyond what's available from abank - of up to $1.75 million. "Local financial institutions are often the first contact for businesses looking to locate in Elk River, which is why we think this foram is such a good chance for us to inform ]enders about all of our programs, as well as provide [hem with some updates about the programs," says Ms. Mehelich. "We really think of our relationship with the financial institutions as a partnership because [hey provide the conventional financing for businesses while the City helps with additional financing tools." Lenders located in and close to Elk River are invited. The forum is from 7:30 a.m. to 9:30 a.m., Wednesday, May 24, at Rockwoods Banquet and Conference Center in Otsego. RSVP to the Economic Development Division at 763.635.1040. ^ City of Ells River Economic Development Spring 2006 By the end o(August, Jon Jacobs and Chad Johnson will move their company, Quality Label Inc., into this new building in Elk River. Elk River asks for feedback from local developers COMMUNITY DEVELOPMENT DEPARTMENT IS WORHING TO STREAMLINE THE PROCESS The Community Development Department held a Development Forum in late March at Elk River City Hall. Individuals and firms involved in the development process were invited. In all, 35 people representing developers, landowners, constmction companies, banks and others took par[. The purpose of the foram was to update people involved in development in Elk River about changes to the process, to answer questions and, as Mr Clark says, to build relationships between City staff and the development community. some new people on our staff, and new roles for staff members, and we wanted to get together to make introductions and talk about [he new changes we're making. It was also a good chance to build relationships, and to listen to the concerns of people in the development community." In addition [o several positive comments, the meeting confirmed that developers and builders in the past have experienced some frustrations concerning the City's development process. example, Community Development is now setting up meetings with developers and the divisions early in the process in order to clearly define the process and schedule. Mr. Clark notes that the City currently has a heavy load of more than 20 commercial projects under development, with more coming on line [his summer. As a result, the City has hired an additional building inspector to work from April to October. "The fact that 35 people attended was a great sign," Mr. Clark says. "We do have QLl~1Ly (Continued from Page 1) At first, Quality Label will occupy 20,000 square feet and lease the remaining 5,000 square feet to another tenant. Eventually, the company plans to expand into the whole building. The prospects for such an expansion certainly look good, as Quality Label doubled its sales in the last year. "We're excited because the new facility gives us the ability to grow even more," says Mr. Jacobs. "We've got good products, good employees and good salespeople, and they'll be able to sell even more. We'll also add a fourth press. And, the new facility gives us room to have a conference room where we can meet with our clients." Locating in Elk River not only gives Quality Label the northwest suburban locale it wanted, but the City's Economic Development Authority (EDA) and City Council offered a financial incentive as well. The City provided the company tax abatement in the amount of $133,947. Sherburne County agreed to match that amount, bringing the total amount of tax abatement to $267,894, which equaled 75 percent of the cost of the land. According [o Mc Clark, City staff has already been instituting some of the suggestions brought up at the forum. For Under the agreement, Quality Label will receive 100 percent of the tax abatement for a maximum of 10 years. In return, Quality Label has agreed to create 15 new jobs within two years at a minimum wage of $1 S an hour. Its employees currently earn an average of $21 an hour. "The tax abatement was key for us," says Mr. Jacobs. "As a business owner, you need [o make decisions that make financial sense for your company, your employees and your customers. This move does that." Elk River officials are certainly excited about bringing the growing company to the City. "I think there are several things that are really impressive about Quality Label," says Catherine Mehelich, Elk River's Director of Economic Development. For more information or to ask a question about the development process, please call the Community Development Department at 763.635.1031. ^ "For one thing, they've had plenty of success, which points to the quality of work they do, and they've created job growth. They also have a strong diversity of products for the industries they serve." Quality Label produces labels and bar codes for clients in the medical, food & beverage, health & beauty, and promotions industries. Ms. Mehelich first visited Quality Label's facility in Fridley more than a year ago. The company had no conference room -- officers met with clients in a nearby restaurant -- and its presses and employees were quite cramped. "]t's the kind of company we want in Elk River because of the goodjobs it provides, and because of their successful `- history and potential for future growth," says Ms. Mehelich. ^ City of Elk River Economic Development Spring 2006 When complete, Quality Label's new facility will more than double the firm's space. Workforce information, services at businesses' fingertips THE LOCAL WORKFORCE CENTER OFFERS RESOURCES, SUCH AS TRAINING, AT NO COST unning a business can certainly be rewarding. But it's not always asy, either. Even firms and small companies with great products, machines, facilities and employees need outside help - at times - with a variety of issues. For example, there are times when a manufacturing company needs to find an employee proficient at operating a certain machine. Or, there might be a time when a firm needs [o know the going wage for a press operator. Or, maybe a company needs to train an employee for ahigher- leveljob, but simply can't afford to do so. The above are just a few examples of why several companies in Elk River have taken advantage of the resources and services provided by the local office of the Minnesota WorkForce Center, located in Monticello. The private, not-for-profit center works in conjunction with the Minnesota Department of Employment id Economic Development (DEED). -... One of the partners at the Monticello WorkForce Center is Central Minnesota Jobs and Training Services (CMJTS). While CMJTS is well-known for helping local residents find and train for new jobs, it also provides a variety of resources and services for companies located in Sherburne and Wright wunties, as well as northern Hennepin County. When working with businesses, CMJTS often teams with DEED's Positively Minnesota, which has an office in the Monticello WorkForce Center. "I think when companies find out about us and all of the resources we provide, they're a little surprised by all of what we can offer -and at no cos[," says Tim Zipoy, Business Resource Representative for CMJTS. Those services include: providing 'aining for new and existing employees; ..yelping find new locations or places to build a new facility; providing labor market information; lining up loans and grants from federal, state and local govemmen[s; and developing a variety of [raining programs for employees - sometimes involving several local firms. CMJTS also helps firms to comply with various employment laws and standards, obtain permits, export products, write business plans, find employees, and other services. Mr. Zipoy notes that local small businesses often find it difficult to absorb the financial strains of training employees, either new or current, for higher-level, higher-paying jobs. For example, if a small company decides to promote an employee from within, it typically needs to pay the employee a higher wage. In the meantime, it must hire someone to fill the position vacated by the employee who was promoted. However, Mr. Zipoy says CMJTS can provide financial assistance to cover the cost of providing on-the-job training to an employee -new or existing. "As the labor market tightens up, it's critical for companies to retain good people," Mr. Zipoy says, "and this helps them do just [hat." Metal Craft Machine & Engineering which produces parts for medical device makers, is one of quite a few Elk River companies that uses the services and resources provided by the CMJTS and the Central Minnesota WorkForce office. Rita Bernard, the company's Director of Human Resources, posts job openings on the Minnesota Job Bank Web site (www. mnworks.org), occasionally searches through resumes posted on the same Web site, checks employment trends and unemployment statistics, and gathers information about current wages. "I would say 1 use the Web site about three times a week," she says. "lt's a good place to post a job opening and look for potential employees because it targets the kind of workers we're looking for." The company, which has I A employees, has also taken part in employee training services provided by CMJTS. Atone point, Metal Craft received reimbursements while providing on-the- job [raining for a promoted employee. In addition, Metal Craft is working with the WorkForce Center to have six of its machine opera[ers receive training through a local technical college. Mr. Zipoy is looking for other companies to participate in order to put together a class of between 12 and 18 employees. "Those training programs can be very industry and job specific," Mr. Zipoy says. "There can be a program for welders, or machinists, or whatever a company, or several companies, need." Ms. Bemard says she also periodically attends half-day business workshops sponsored by the WorkForce Center. "The whole idea is to help businesses in this area start, succeed and grow, which is good for everyone," says Mr. Zipoy. For more information on the WorkForce Center and Central Minnesota Jobs and Training Services, contact Tim Zipoy al 763.2713722, or tzipoy@cmjts.org. The WorkForce Center is located at 106 Pine St. in Monticello. ^ City of Elk River Economic Development Spring The Workforce Center's Robert Hoenie (lek) and Tim Zipoy work with area businesses. PRESORTED STANDARD U.S. POSTAGE PAID Elk PERMIT N0.106 ~\ ELK RIVER, MN River 13065 Orono Pkwy Elk River. MN 55330 Northstar Rail Line looks to be on track for 2009 LEGISLATURE, GOVERNOR APPEAR COMMITTED TO APPROVING FINAL PROJECT or the past couple of years, Elk River City officials and business owners have been big supporters of the proposed Northstar Commuter Rail Line, which would make a 40-mile run between Minneapolis and Big Lake starting as soon as 2009. ~~~~ Included in the proposal is a commuter station in Elk River, which would be at a Park & Ride lot within walking distance of the City's Northstar Business Park, near U.S. Highways 10 and 169. As of recent weeks, the news coming from the Minnesota Legislature concerning Northstar continued to be positive. The good news started in spring 2005, when the Legislature committed $37.5 million to the project. Later in the year, the Federal Transit Administration (FTA) placed the Northstaz Commuter project on its "recommended" list-meaning Minnesota would, in all likelihood, receive 50 percent of the project costs from the Federal government. The most recent estimates indicate that the Northstaz project would cost about $300 million. In January of this yeaz, Gov. Tim Pawlenty proposed $60 million in his bonding bill for Northstar -the amount needed to receive federal funding. In recent weeks, the Minnesota Senate followed the governor's lead, voting in favor of allocating $60 million to Northstar in its bonding bill. Later, in April, the Minnesota House voted for a bonding bill that included $50 million for Northstar. The discrepancy in the amounts is likely to be ironed out before the 2006 Legislature concludes. "The Legislature has already put lots of money into this project and we really expect the dollar amount to be worked out," says Elk River Mayor Stephanie Klinzing, who has been involved in the Northstar project. It is expected that the two houses of the Legislature will come together and agree on $60 million -the amount needed to gamer full federal funding, Ms. Klinzing says. As noted earlier, the good news from the Legislature is great news for Elk River. Local business owners say completion of the Northstar line, to be added to tracks operated by Burlington Northern Sante Fe (BNSF) railroad, will help them recruit and retain employees from throughout the Twin Cities. Future phases of the commuter line would connect to places as far away as St. Cloud, the Mall ofAmerica, Minneapolis-St. Paul International Airport and downtown St. Paul. A ride from Elk River to downtown Minneapolis is expected to take just 30 minutes -with no time lost sitting in traffic jams. "It's a selling point for companies when they're looking [o hire or recruit employees," says Mayor Klinzing, "because i[ allows [hem to hire people -quality people -from a variety of places in the metro area. The employees who want to take the commuter line don't have to worry about being stuck in traffic, or parking issues. That's why throughout the country it's been proven that companies prefer to be located near commuter rail lines:' ^ City of EIk River Economic Development Spring