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8. EDSR 10-08-2012 Ells REQUEST FOR ACTION River TO ITEM NUMBER Economic Development Authority 8. AGENDA SECTION MEETING DATE PREPARED BY October 10,2012 Annie Deckert,Director of Economic Development ITEM DESCRIPTION REVIEWED By Executive Director Update Cal Portner, City Administrator REVIEWED BY ACTION REQUESTED None. BACKGROUND/DISCUSSION The purpose of this periodic memorandum is to keep the EDA and HRA informed of ongoing activities in the Economic Development Division which don't require formal action. Nature's Edge Business Center(NEBC) The final plat for Nature's Edge Business Center has been received and will be recorded at Sherburne County. Staff is working with MNDEED to begin disbursements from the $250,000 BDPI grant to assist in covering the costs for the first phase of improvements. Sanitary sewer,water main and storm sewer construction is complete at NEBC. Final site grading is nearing completion and will then be seeded and mulched. The first lift of bituminous pavement has been placed and trail paving,final grading,turf restoration and cleanup are expected to be completed the week of October 10. Private utility work including power,street lights,gas,telephone and cable is expected to be completed in 2013. Because the utility companies pay taxes on all of the utilities they put into the ground,they do not want to install their lines until there is a user to collect revenue from. Staff has had numerous inquiries about the available lots and is continuing to work with an interested manufacturer out of Rogers who is interested in the ten acre lot. 2013-2016 Economic Development Strategic Plan Both the HRA and EDA authorized staff to move forward with the creation of the 2013-2016 Economic Development Strategic Plan. Staff is working to compile information,recommendations and goals from existing plans and studies,and anticipates bringing forward for HRA and EDA review at a future work session. Manufacturer Youth Apprenticeship Program As a follow-up to the Manufacturer's Connection event held with area manufacturers and schools,staff met with Jebb Anderson,Youth Apprenticeship Program Coordinator of the state. Mr.Anderson works with manufacturers and schools in the state to identify students interested and capable in serving apprenticeships with interested manufacturers. Staff has distributed this information to several interested manufacturers in Elk River. Additionally,staff is working to set up a meeting later this year with ERRS P B W E R E D BY N:\Departments\Community Development\Economic Development\EDA to move\Agenda\Year2012\10-8-12 EDA NATURE "URE Agenda\Executive Director update 10-8-12.doc.docx Principal Terry Bizal, industrial technology instructors and area manufacturer's to provide a forum in which the school can solicit input on future industrial tech courses and curriculum. Staff will provide further updates as they arise. Granite Shores Staff attended a broker's event held by Granite Shores to discuss their commercial space. Area and metro brokers were invited to provide input and suggestions to fill the vacant space. Three brokers attended the lunch,and it was the consensus of the group that filling the space with retail and/or commercial would be extremely challenging. Their work with retail/commercial tenants indicate their desire to be along HWY 169,not HWY 10. They indicated that limited parking was a major deterrent and encouraged soliciting executive type office uses. The brokers also indicated Granite Shore lease space was considerably higher than all other available space in the area, and highly encouraged Granite Shores to accept and work with any and all offers they received from potential tenants. Staff provided community information,downtown parking maps and incentive information to the brokers. On September 26, Granite Shores held invited downtown business owners to their community meeting room to meet with their residents and promote their business. Jim Soderberg,owner of Granite Shores, came to the October HRA meeting and provided an update on the building. All 67 units are rented,and construction is underway to create executive office space in the west portion of the commercial space on the first floor. Mr. Soderberg also supplied additional information and demographics to the EDA (attached to staff report). EDA Micro Loans The first Energy Efficiency Improvement Micro Loan closed at the end of August 2012. Applicant, Pamela Sitts, of P.S...Dance Studio is currently working on the improvements and anticipates moving into the building sometime in November. At their September 10 meeting,the EDA authorized a sub-committee formed off EDA Commissioners Tveite,Dwyer and Provo to discuss use of the $703,000 DTED fund balance as a potential forgivable grant program as an incentive to promote available city/EDA owned lots and to help existing manufacturer's to expand. Rough guidelines were compiled and staff will work with the state to get approval. Once approved,the EDA Finance Committee will review and ultimately the EDA will approve. State approval may take a month or so. Greater MSP Greater MSP is a private-public partnership funded by businesses, institutions,and government,whose mission is to stimulate economic growth and prosperity,and higher quality of life for residents in the Metropolitan region. We have been working with GreaterMSP on potential leads and have provided them with information regarding our available sites and funding programs. Greater MSP will be holding its first annual Investor and Partner meeting on November 5th at 5:00pm at the Guthrie Theater in Minneapolis. If interested in attending,please let staff know. This is a free event. MN Community Capital Fund(MCCF) Staff met with Scott Martin President of the Minnesota Community and Capital Fund(MCCF) to discuss business financing options available from the MCCF. Elk River is a Class B member which means that it can originate loans up to $500,000 through the MCCF. Staff has provided this information to local N:\Departments\Community Development\Economic Development\EDA to move\Agenda\Year2012\10-8-12 EDA Agenda\Executive Director update 10-8-12.doc.docx bankers, manufacturers and developers. Information is also available in the EDA Business Finance Toolkit and website. Business subsidy reporting Staff continues to complete the mandatory annual reporting to the state for other tax abatement and business subsidy agreements. Housing Study The 2012 Comprehensive Housing Market Study was presented to the HRA and City Council on September 4. Staff presented the housing study to the Multi Housing Crime Prevention(MRCP) group at their September meeting. The study has been requested numerous times and has received positive feedback from not only the MHCP group,but local developers. We will utilize recommendations from the plan as for the creation of the 2013-2016 Economic Development Strategic Plan. Community Economic Development Strategy(CEDS)- Region 7W Economic Development Staff attended the quarterly Community Economic Development Strategy (CEDS) roundtable meeting for Region 7W to discuss establishing a CEDS for our region. Several economic development and administrative staff were in attendance from cities and counties in our region (Stems,Benton, Sherburne,Wright). Staff provided a thorough update of Elk River happenings- staff from both Senator Frankin and Bachmann's offices were present and indicated they were impressed with what Elk River has accomplished. Staff is currently completing a survey to assist in the completion of the comprehensive CEDS which is being compiled by the Central MN Quad Counties CEDS Board. Elk Park Business Center Staff visited with management from Fashion Bug who indicated they will remain open until January of 2013. Staff is working closely with Brixmor properties to find a tenant for their 8,400 square foot space. Staff has also been working with Brixmor properties to discuss the placement of mailboxes in the parking lot of Elk Park Center. Planning staff has provided the USPS all the information needed to move forward with this request;however the USPS has not contacted Brixmor to move forward with this. Realtor's Day On August 8,an Elk River Realtor's Forum was held at City Hall. Six city staff members will presented information about the city to nineteen area realtors Mayor Dietz welcomed the group,and city staff presented information encouraging realtors to use city resources. The event built relationships between city staff and realtors and encouraged open and active communication between them.Feedback about the event from the realtors was positive;each indicated they would be interested in a similar event held annually.Economic Development staff met with the President of ReMax Results Realty to discuss the Micro Loan program as a result of the Forum. Business Retention/Expansion Visits Economic Development staff and Council Members Motin and Westgaard visited Professional Service Bureau(PSB) on Wednesday,September 5. PSB shared some concerns about their current parking situation due to their number of employees (currently 70,anticipated to be 100 by the end of the year) and increased traffic from Spectrum High School. Staff has been working with their property owner,Pat Briggs,to discuss potential solutions to their problem and anticipates coming forward to the EDA to discuss at a future meeting. N:\Departnients\Community Development\Economic Development\EDA to move\Agenda\Year2012\10-8-12 EDA Agenda\Executive Director update 10-8-12.doc.docx Minnesota School of Business- Elk River Campus Staff met with MSB Business Program Chair to discuss potential service learning projects between Elk River MSB students and small businesses. MSB Business instructors work with their students and small business owners to assist in the creation of business plans,financial analyses, etc. This is a great tool to add to our business finance tool-kit. Staff has provided the MSB resource to several local businesses. Additionally,there maybe an opportunity for staff to partner with MSB students in the creation of the housing intern posting. Powered by Nature Community Brand The Powered byNature brand was featured at the August 9`''and 10±International Economic Development Council Marketing and Attraction Training Class. Elk River's progress implementing the brand impressed IEDC instructor Linda DiMario who decided to use Elk River as an example of a community that"has taken control of their"ground game" to build momentum for their community identity". Staff was approached by the City of Clearwater to discuss the success of Elk River's Powered by Nature Community brand. The City of Clearwater plans on beginning the branding process,utilizing Elk River's process as their model. Downtown River's Edge Business Association The Downtown River's Edge Business Association was formed in 1982 to enhance downtown Elk River's image and promote the retail, service,restaurant and professional businesses. The association is comprised of several area business owners and meets monthly to discuss upcoming events,promotional opportunities and other miscellaneous issues which will ultimately strengthen and inspire people to visit downtown. Membership fees go towards downtown advertising,the Art Crawl,the annual Halloween event,Santa in the Park,flowers for the downtown planters and Chamber of Commerce Dues. City staff attends the monthly meetings to support continued communication between the city and downtown business owners and is working with the group on the creation of a new business directory. The business association maintains a website (www.erriversedge.com) and Facebook page (Elk River Downtown River's Edge) in efforts to promote the downtown. Staff invited members of the Downtown River's Edge Business Association group to provide information to the HRA regarding their marketing initiatives,upcoming events and the impacts they've seen from Granite Shores,the Farmer's Market and the completion of Main Street Parking Plaza at their October 1 meeting. Additional information is attached. Initiative Foundation The Initiative Foundation awarded a grant to the Economic Development Authority in the amount of $1,150 for tuition for the Assistant Director to attend a National Development Council finance course in October. The finance course will focus on credit analysis,fixed asset financing, real estate finance,and economic development finance programs. This is the second course of a four course program in the Economic Development Finance Professional Certification. ATTACHMENTS • IEDC Press Release N:\Departments\Community Development\Economic Development\EDA to move\Agenda\Year2012\10-8-12 EDA Agenda\Executive Director update 10-8-12.doc.docx • Granite Shores information provided to HRA on 10-1-12 • Greater MSP invitation • Downtown River's Edge information Action Motion by Second by Vote Follow Up N:\Departments\Community Development\Economic Development\EDA to move\Agenda\Year2012\10-8-12 EDA Agenda\Executive Director update 10-8-12.doc.docx 4. 1� News Release City of E .........-...11 For Immediate Release jIs River Contact: l 13065 Orono Parkway Clay Wilfahrt Elk River,MN 155330 Assistant Director of Economic Development 763.635.1000 763.635.1041 763.635.1090(fax) cilfahrt@elkrivermn.gov Powered by Nature Brand Recognized by the International Development Council in Atlanta, Georgia Elk River,Minn. —The International Economic Development Council (IEDC) has taken notice of Elk River Community brand—Powered by Nature. The IEDC, the world's largest professional organization for economic developers with over 4500 members internationally, featured the Powered by Nature Brand as an example of a successful brand implementation at a recent economic development marketing and attraction course in Atlanta. Currently, over forty business and organizations use the Powered by Nature brand to market their business. Additionally, over fifty business owners and residents in Elk River provided video testimonials about what the brand means to them. These and other initiatives,including the Powered by Nature blog, caught the attention of IEDC instructor Linda DiMario who said Elk River is "an example of a city, community and Economic Development Authority that has taken control of their ground game to build momentum for their community identity!" DiMario will used Elk River's brand to teach others how to engage a community to create a community identity. The Elk River EDA kicked off the branding journey in December of 2010 with branding consultant chandlerthinks. The community brand,Powered by Nature,was presented to the community in September of 2011 and has been quickly embraced by area businesses, organizations and residents. More information about the Powered by Nature brand can be found at www.poweredbynature.com or www.poweredbynature.blog.com POWERED BT NATURE Housing Redevelopment Authority: As you know, we purchased the Bluffs of Elk River condominium project on April 30, 2012. Immediately after we closed on the property we have implemented and significantly completed a large scale renovation and repositioning the property now known as Granite Shores-On the Beautiful Mississippi River. To date we have completed all construction, remodeling and upgrades in all residential units in our community. Additionally, we have added luxury amenities such as an entertainment room complete with an 80 inch flat screen TV, a pampered paws dog wash, and community room updates and improvements. We are also exploring the potential to add a larger deck to allow street side residents greater access and enjoyment of the Mississippi River. Further,we have successfully purchased the previously owned condominium units and have complete ownership and control of the property as a luxury apartment community We are currently 100% occupied. Our market rates range from $950-$1499. It is apparent that the demand exists for such housing, and our reception in the market has been phenomenal. Granite Shores also consists of approximately 10,000 sq.ft. of retail space. Immediately upon purchase we engaged Lisa Christianson of Christianson and Co.to represent us in leasing out that space. Over the past five months we have had a few interested parties inquire about the retail space. However,the retail component of Granite Shores is faced with many challenges. Consistently our feedback from prospective tenants has been concerns over the availability and proximity of parking that is required for a business to be successful in this location. To mitigate that concern, we have begun construction on approximately 2000 sq. ft. as Granite Shores Office Suites. We believe that this use attracts small business owners in need of a designated office, but does not require substantial parking resources such as a coffee shop or a similar consumer driven business. We believe that 2000 sq.ft. is the maximum allowable space for this use, as the demand simply does not exist for an additional 8000 sq. ft. of office suites. As we evaluate our options for the property we are convinced that for the long term success of Granite Shores, and continued re-vitalization of the Downtown Business district,the highest and best use for the remaining commercial space is to convert it into more luxury residential apartment units. By doing this we eliminate our demands for on-street parking along Main Street, and provide less space to be absorbed for retail and office tenants in the Downtown Business District.. This provides other commercial owners the benefit of less supply and moves commercial traffic to the district's center where parking is more plentiful. We have demonstrated our commitment to the City of Elk River by trying to support local business. We believe in and feel part of the community. Granite Shores is filling a need for our residents, and we feel that Granite Shores can provide what the business community is in need of; customers. As detailed in the Comprehensive Housing Market Study conducted by Maxfield Research, "Low vacancy rates in all general occupancy rental products indicate pent-up demand for additional rental housing in Elk River." It is further detailed in the Housing Needs Analysis that market rate rental is the highest demand. Granite Shores recent history is proof of this need. By converting the additional 8000 sq.ft. into approximately 8 apartment units we fulfill some of the need the city has for rental housing and establish a well qualified consumer within close proximity to the Downtown Business District. Attached is our Summary of Findings that details our resident profile. In general our residents have disposable income, a high household income, and have previously lived,work or have family within 15 miles of Elk River. Our residents are ideal consumers of local business products and services. With the current availability of retail space, and a constrained housing and parking supply,we feel that we encourage the growth of the Downtown Business District, not by providing additional retail space, but by providing the consumer that will support existing business and foster the growth and demand for new commercial tenants. Granite Shores Summary of Findings • There is a slightly higher amount of female renters than males III • Ages range from 22—79 years-old with the average age of 43 years old • Renters are typically moving for geographical purposes—either a job relocation within the area or to move closer to family members • The majority of renters are single • Average household income per month amounts to$6585 • Over 73%of current residents who have signed a lease are from within a 15 mile radius • As we can see the current residents and general inquiries find us from similar sources o Internet listings are the main source of traffic—Mainly For Rent,Apartment Guide,and Rent.com • I will be working today on utilizing our internet listings! o The second source of traffic of current residents comes from the Star News at 21%and by drive-bys and seeing the banner at 21%as well Aeons Below IP Source of Leads for Current Renters •Banner •Drive By • Paper- Not Specified •Star News •Rent.com Property Website Apt Guide Forrent Online -Not Specified 5% 11% 5°0 _ 5396 1696 5% 5% • Source of Leads from General Inquiries kCommerc'a. 6%5 part ment ,, C !rnents.c• , Gran,te Shores — – LivingGuide m Website 4% 10%5 For Ren'? 4% 13% Apartment ternet Listings Guide 70% 10% The Star Newspape Apartment Rent.com 1% -- Finder 11% MyNewPlace The Shopper Did Not Recall 5%' 8% Newspaper What Paper Rent 1 s°.com Cou d Not Recall 2% Resident Demographics Renter's Previous Location Woodbury - _ Ramsey 6% ' - - _ _ • _ 645 Rogers Out of • 7% of State -;r Within a 15 Mile 194,° 6% Radius ii 73% Duluth Zimmerman 3% 11%o EkR �:er Coon 14% Monticello Rapids B ► i La 3% 3%Brooklyn Park 3% III Renter's Reason for Moving Buildinga f� House • _ Needs a 7% Change 10% Job Change 28% Moving Closer to Family 17% Getting Getting -lea *.h reasons Married: Divorced " = 17% 'i •oving out on 10% Their Own 4% Renter by Gender Male 42% • . Fema 58% Renter by Marital Status red ngaged 18% 'IL1arr ed •