6.5 EDSR 01-21-2014 4,j` _ Request for Action
River
To Item Number
Economic Development Authority 6.5
Agenda Section Meeting Date Prepared by
General Business January 21, 2014 Brian Beeman, Director of Economic
Development
Item Description Reviewed by
Reports of Officers and Subcommittees and Staff Jeremy Barnhart, Deputy Director, CODD
End-of-year Report Reviewed by
Action Requested
N/A
Background/Discussion
As per EDA Bylaws,it is suggested that the Economic Development Authority receive the report from
officers and subcommittees.An end-of-year staff report will also be provided.The Annual End-of-Year
Report lists all projects completed and on-going. That report is attached. (2013 Annual End-of-Year
Report). Staff will review the report with the EDA at the Annual Meeting.
Financial Impact
N/A
Attachments
• 2013 Annual End-of-year Report
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YEAR-END ACTMTY SUMMARY 2013
Director's Message :
Why Elk River?
Looking back as 2013 comes to a close,the Economic
Elk River has developed a reputation as the light industrial Development Division takes a collective breath. The economy in
hub of the Northwest metro, and that reputation is growing. the area saw an upswing in single family and commercial permits,
Businesses have taken notice of Elk River's skilled workforce, including the new 100,000 sq. ft.Preferred Powder Coating
the city's pro-business climate,and area schools that actively Company building in Nature's Edge Business Center(NEBC),
engage in cross training opportunities with businesses. Alliance Machine and Orluck Industries expansions,Ralphs's Vic-
tory Lane improvement in the former BP gas station at Joplin,and
An Economic Development Department that will work hard others.
for you by:
Additionally,for over a month,we have been consistently receiving
• Assisting existing businesses with their expansion and two to three phone calls per day from various companies wanting
growth needs; to expand,relocate,and/or start a new business.Companies calling
in are demanding larger lots with utilities.This demand has caused
• Assisting new businesses moving to Elk River us to expedite the construction of Phase II of NEBC from 2017 to
• Maintaining the"how do we get this done"attitude. 2014.The division will be applying for an infrastructure grant
Shared by elected leaders and city staff. through the State of Minnesota.The division is also working on
developing a fourth Microloan to further assist businesses. With
• Creative combinations of city and state financing tools this continued interest the future of Elk River looks bright.
• In 2014,the City Economic Development Authority was In 2013 the division successfully added a new property and com-
featured on the inside cover of Business Xpansion Journal mercial/industrial building search feature to the city's website.The
reaching 10,000 print and 90,000 digital subscribers division was able to continue its marketing and brand promotion
efforts with the hiring of a Marketing Internist and new business
• Partnered with the water utility to provide our branding relationships continue to be established with developers in an at-
logo to the Freeport water tower tempt to attract additional growth to the city.
' "'
T Brian Beeman, MPA
'"r' Economic Development Director
•`z t 't ' bbeemanaElkRiverNIN.gov -••
,. 13065 Orono Parkway
--- Elk River, MN 55330
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wwwElkRiver.gov .
Come and grow with us! '411-
Population /if tIN\
VICTORY
• City of Elk River: 23,273
In October 2013,Ralphie's,Victory Lane refurbished 3,000 sq.
Demographics ft. with Energy Efficiency Improvements,made possible with a
Median Age: 34.9 microloan,in the amount of$74,999.
•• Homeownership: 79.8% Blue Egg Bakery..
• Median Household Income: $65,706 The Blue Egg Bakery expanded into 707 Main Street providing
• Median Home Value: $214,161 the community with an expanded selection of cakes, fudge,and
candy. They were able to do this expansion with a$74,500
microloan that helped finance the needed remodeling and
Labor/Wages purchased equipment.
Largest employment Sectors:
• Manufacturing-23% ALLIANCE
• Retail Trade- 12 % MACHINE, INC
• Construction-11% Alliance Machine extended their manufacturing footprint by
• Professional, scientific, and technical 17,250 sq. ft.with a$200,000 forgivable loan.This will provide
services-7% space for additional jobs and employee training.
• Wholesale-5%
• Public administration—5%
ORLUCK
Business establishments INDUSTRIES
Total: 1,000 Orluck Industries will use $200,000 of the forgivable loan fund
• Manufacturing— 62 to expand their 25,000 square foot facility by 12,000 square feet.
• Retail Trade — 155
• Construction—136 PREFERRED
• Wholesaler-33 POWOER • COATING
• Public Administration-33
The City provided Tax Increment Financing for the building of
Unemployment rate Preferred Powder Coating's 100,000 sq. ft. building. They also
City-5% received a $100,000 Micro Loan, a$200,000 Forgivable Loan.
• Minnesota—4.6% They will also be required to add 15 jobs as part of these loan
•• U.S.-7.0% requirements.•
Pg.-- 41r. iceLgrudio.
-. P.S... Dance Studio relocated to 251 8th St. after using the Ener-
gy Efficiency Improvements microloan to reduce their energy
Pv O W E R E O 8 C costs by$2,000 a year.
NATURE
Working to Grow Our Local Economy
Business owners consider many factors when deciding where to locate or grow their com-
panies. One reason many find Elk River attractive is it's Midwestern work ethic,focus on
r alternative energy,and public/private sector economic development partners eager to assist
getting projects off the ground. Elk Rivers El)A is proud to be one of those partners.
Economic Development Authority continues staking Elk Rivers business growth
The Elk River Economic Development Authority has continued assisting the city's business growth since it was established in 1987.
Business Name Public Sector Jobs Created Private Investment Taxable Value Square Foot of
Investment Attracted Added Building
Ralphie's Victory $74,999 0 $515,250 $30,600 3,000
Lane
The Blue Egg $73,342.65 3 $1,157.35 $2,500 1,100
Alliance Machine $200,000 6 $1,354,000 $560,300 17,250
Orluck Industries $200,000 6 $1,147,000 To be completed by 12,000
end of Q2 2014
Preferred Powder $1,453,878 15 $4,738,817 $5,000,000 100,000
Coating
P.S....Dance Studio $28,000 0 $380,000 $30,000 6,000
$2,030,219.65 30 $8,136,224.30 $5,623,400 139,350
Energy Efficiency projects
Ralphie's Victory Lane:
Ralphie's Victory Lane is a self-service gas station with efficiency in mind. They used an Energy Efficiency Microloan
to update the gas stations outdoor lighting and parking lot. Outdoor appearance had been a detriment to this gas stations
future success.
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P.S...Dance Studio
P.S. ..Dance Studio has moved to a new location,251 8th St NW#B ,and some minor renovations were needed. The
Energy Efficiency Improvement Micro Loan assisted in updating the electrical system and install a new HVAC unit.
With these changes they have seen a$2,000 year savings. P.S...Dance Studio serves 400 dance students a year.
Strategic Goals:
Business Expansion
• Retain and expand existing businesses
Success Stories:
Blue Egg Baker ,_ Sweet growth experienced by the Blue Egg Bakery
s Blue Egg Bakery,a fixture in Downtown Elk River since April,2012,to indude 707 Main street.Made
possible with the Downtown Rehabilitation Micro Loan secured through the city of Elk River's Economic
Development division.They used much of this money to purchase needed equipment.In the newly
remodeled building the Blue Egg Bakery will expand its offerings to include special occasion cakes,fudge
and candy.Having these two locations will increase the variety of products offered and help generate
more foot traffic for our downtown.
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Home grown business, Alliance Machine, Powered by Expansion
On October 22,Alliance Machine cut the ribbon on their 17,250 square-foot expansion. The expansion will welcome more jobs and
expand their capabilities to produce parts for the defense and aerospace industries,including global companies Boeing,and Airbus.
The Affiance Machine expansion brings more than additional jobs. A portion of the expansion is dedicated to provide employee training,
through the Minnesota Job Skills Partnership Program funds. Alliance Machine has partnered with Anoka Technical College,Anoka
Ramsey Community College and Elk River High School to promote manufacturing as a profession and to entice skilled workers who can
seamlessly move into the workforce.
The City of Elk River was able to extend support through a forgivable loan in the amount of$200,000. Mayor John Dietz spoke at the
ribbon cutting adding"We would like to thank Bryan[Provo,owner of Alliance Machine] for his hard work and dedication in supporting
Elk River by providing additional employment,investing in our youth,giving back and volunteering in the community.It is an honor to
watch your company to grow and we look forward to partnering with you again."
ORLUCK
I N D U S T R I E S
Orluck Industries continuing to grow
Orluck Industries is a precision machine shop that specializes in complex projects which require high levels of precision. They work with materials
from plastic to titanium,and focus on technology and craftsmanship.In spite of the economy,Orluck is experiencing exceptional growth while capital-
izing on an expanding aerospace and military manufacturing sector.Orluck Industries manufactures components for the military and aerospace indus-
tries,including the CH-47 Chinook,F-16,A380,A330,A400M platforms and Delta and Atlas Rockets.
Orluck added 12,000 square feet to their facility,originally constructed in 2007. The expansion will allow for 6 additional higher wage jobs and house
additional precision equipment to facilitate ongoing growth.
Business Recruitment
Preferred Powder Coating Embraces Nature's Edge business Center In Elk River
Preferred Powder Coating,Inc.,broke ground October 22,2013 on their 100,000-square-foot facility,the first
`:01" ` project in the city's recently opened Nature's Edge Business Center.
The building is expected to be completed and in full operation by early
1` — - spring of 2014. Preferred Powder Coating will employ 30 people once
_ " " opened.
`•' P , Dan Bosshart and Lloyd Peterson are the forces behind Preferred Pow-
/ � der's move from Rogers to Elk River. They bought the assets of Profile
/ \ a:= companies in 2009 and have grown the company from 17 employees to
. 29 in four short years.
" ' Dan Bosshart,owner explained that Preferred Powder Coating em-
„ cee .
•
ploys a nontoxic and environmentally-friendly painting process that
-. ''” it , } ` results in a tough,long-lasting product that is superior to conven-
" "" ' tional wet paints. At the groundbreaking,Bosshart thanked the
.' . NATURE'S EDGE
city and county officials that made the project possible through
City of Elk River iir, October 22nd.201 the creation of a Tax Increment Financing(TIF) District and two
different loans. The Preferred Powder project was an example of the
"Lets get this done attitude" shared by City and the property owner. The City
.. of Elk River thanks Preferred Powder coating for their unwavering focus to
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see the process through.
■ As the first project in the Natures Edge Business center,Preferred powder
Coating is a highly visible example of the strength of the Elk River market.
PREFERRED
P O W O E R• C O A TING
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Updated Sell Sheets:
In 2013 staff updated the"Development Opportunities" marketing brochure.
The brochure now includes Phase II of the Natures Edge Business center.
In the Northstar Business Park corrections were made to the listed acres.
The back page includes updated demographic information.
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