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5.0. 6.0. HRSR 11-22-1999 ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY MEMORANDUM TO: Housing and Redevelopment Authority FROM: Paul T. Steinman,Director of Economic Development DATE: November 17, 1999 SUBJECT: Agenda Memo for November 22, 1999, HRA Meeting 5. King and Main Site Project Proposals Issue Aik The issue before the HRA at this meeting is to decide which of three lip proposals presented will receive primary attention of the HRA and staff over the next approximately six month period. Staff feels it is appropriate to have the HRA select one of the proposals/developers of the three that will be making presentations at the meeting,and commit to work exclusively with such developer. Background Three proposals for development of the HRA site will be presented at this meeting. These three proposals are as follows: • Elk River Municipal Utilities • KMR Partners • Track of the Wolf,Inc. A summary sheet of each of the proposals is attached to this memo for review by the HRA. Staff suggests each of the people representing the proposals be provided approximately 10 minutes for a presentation at the meeting,with final discussion and questions being asked by the HRA. • Staff provides the following summary of the proposals as follows: 13065 Orono Parkway • P.O. Box 490 • Elk River, MN 55330-1743 • (612) 441-7420 • Fax: (612) 441-7425 Equal Opportunity Housing and Equal Opportunity Employment • Track of the Wolf, Inc. ■ 20,000 s.f. total, 10,000 s.f. per floor ■ Primary tenant — Track of the Wolf, Inc., a niche market retailer ■ Other possible tenants include other niche retailers and a large single user for the second floor Elk River Municipal Utilities ■ Proposed building would be approximately 8-10,000 s.f., two stories ■ Primary user— Elk River Municipal Utilities — proposed need 7-8,000 s.f. ■ Second story would be available for lease to business/professional office users ■ Plan to purchase land now and wait to build until space is needed — approximately 2-5 years KMR Partners ■ Two different building size proposals — one at 21,000 s.f. (1), another at 45,000 s.f. (3 stories) ■ Would include a combination of surface/street parking and • underground parking for the larger building ■ The smaller proposal is for a 3-story office/retail building and the larger proposal is for a 3-story building with commercial on the first floor and residential on the second and third floors ■ The project will be an investment property developed either into a shared condominium or coop ownership Both Elk River Municipal Utilities and Track of the Wolf, Inc. have indicated they have no desire to lease space in any facility. The best possible scenario may be for a developer such as KMR Partners to put together a condominium project (each tenant owns their own space) and include in such project Municipal Utilities and Track of the Wolf, Inc. Due to the various space requirements and needs of these two companies however, it may not be possible to design such a project. Staff has visited Track of the Wolf, Inc. and feels the business would provide a unique niche fit in the downtown area. It also appears that, with the sale of their existing facility, they would have the financial means to complete such a project. Staff feels it is necessary to note the importance of attempting to keep the Municipal Utilities offices in our • downtown area as well. In preliminary discussions with Utilities Manager Bryan Adams, staff has indicated that some payment in lieu of taxes would likely have to become part of any proposal on the King and • Main site that would include Municipal Utilities, due to their tax exempt status. As the HRA is aware, we are counting on taxes being generated on this site (TIF District No. 16) to pay off the debt associated with purchase of the land and demolition of the buildings back in 1996. Recommendation Staff recommends selection of one of the three proposals and authorization for staff to proceed to work exclusively on such proposal until May 1, 2000. 6. Consider Approval of 2000-2003 Economic Development Strategic Plan Attached to this memo is the newly modified Economic Development Strategic Plan for 2000-2003. Recommendation Staff recommends approval of the 2000-2003 Economic Development Strategic Plan. • November 15, 1999 Re: Proposal for King & Main building site: City of Elk River Marc Nevinski - Assistant Director of Economic Development 13065 Orono Parkway Post Office Box 490 Tel: 612-441-7420 Elk River, MN 55330 Fax: 612-441-7425 Dear Mr. Nevinski: Per your request, we provide these answers to your questionnaire, and we look forward to attending the Elk River HRA meeting on November 22, at 5:00 pm, to answer any other questions: 1) Project description: We propose to build a two (2) story building, up to 10,080 square feet on each floor, of the size and shape suggested by the City of Elk River's concept drawing plans for King and Main. The building design will be "L" shaped, of masonry construction, and will closely follow the city's concept drawings. Special attention will be given to the brick and stone exterior, to correctly match the appearance of the best work of the 1890 - 1900 era construction in our area. Our goal is to add a period building to historic old downtown Elk River, which will serve as a show case for our pre-1898 era products and services. Off-street parking spaces will be allocated per the city's concept drawing, on the site, along both rear edges of the property. The city's plan will provide ample parking. 2) Project finance: About twenty five to thirty percent of the project cost will be a transfer of equity,result- ing from the sale of our current site in Brooklyn Park to the Rudy Luther heirs, for use as an automobile dealership. The balance of seventy to seventy five percent will be financed by conventional commercial mortgage. In preliminary meetings, our bank officers have reviewed our project, and they indicate that our project should be easily approved. 3) Project schedule: • Our proposal for the King and Main site is contingent on the sale of our current prop- erty, and our schedule will suffer any delays that occur as the Rudy Luther family negoti- ates with the City of Brooklyn Park, and with the Joyner family, both adjoining property owners. We are told that the city may approve their plans during late November, allowing us to proceed with our move. Our proposed purchase agreement includes a quick closing, and leaseback during the construction period, to simplify our move. Our goal is to acquire the property shortly after closing,in the first months of 2000, and to begin construction during spring. Our business volume would be best least disturbed by moving during September or October. We require occupancy well before Christmas, 2000, worst case. 4) Tenants: Our business, Track of the Wolf, Inc., will occupy about half of the main floor space. The remaining five thousand square feet will be divided as necessary. We feel that spe- cialty retailers would be the best fit as main floor tenants. The upper floor will be ideal for professional and data processing users,preferably a single tenant, so security may be simplified. • 5)Project ownership: This project will be owner occupied. The owners will be David S. Ripplinger and Carole A. Ripplinger, 16413 County Road 14, Elk River, MN 55330. We have owned and operated Track of the Wolf, Inc., a Minnesota Corporation, for nearly twenty-eight years. Located in Brooklyn Park for twenty four years, we have moved three times as business volume has increased. We purchased our current site in 1982. The King and Main site will provide an ideal environment for business growth, and allow future expansion. 6) What do we expect from the HRA: While we are skilled at running our specialty business, we do not yet fully understand all of the benefits and opportunities afforded by working with the HRA. In discussions with our building contractor,bank officers, accountant, and financial advisors, they confirm that the King and Main site may be as attractive as a long term investment, as the location is for our business plans. We anticipate that the HRA will offer us an equal opportunity to develop this TIF prop- erty, and will offer us every benefit normally associated with this plan. We doubt that any • of our expectations will be extraordinary, or beyond the comfort of the HRA. We hope for easy and friendly negotiations,resulting in a program that will satisfy our bankers, accoun- tant, builder, the city, and our new neighbors. 7) What can the HRA and the City of Elk River expect from us: IIIOur small business serves a niche market, selling antique and replica gun parts, kits, cutlery, tipi lodges, period wall tents, wooden cooperage, lanterns, campfire cookware, and primitive Americana. Our more than 80,000 customers include collectors, competitors, re-enactors, state parks, museums,historic sites, and well known movie studios. Our cus- tomers often travel long distances to visit our store and inspect our wares. We are a must- see stop for customers visiting Minnesota during the tourist season. A family business, our management style is conservative, yet we are enjoying steady growth. This project is a large and important opportunity, and our decisions will be based on the long term. Our 1890 - 1900 period style building on the King and Main site will be strictly correct in exterior appearance, with no neon signs. It will appear to be a natural part of old down- town Elk River. Although it may be a bit larger than the other buildings in the old down- town, it will be an ideal fit with city's attractive early period sidewalks and street lights. The King and Main site anchors the western edge of the old downtown, and seems an ideal location for an 1890 period building. The interior of our main floor retail store will be decorated in 1890 period styling, which would seem to be a most appropriate way to display our primitive American hardware, • sporting goods, and outfitting supplies. The King and Main site, in old downtown Elk River, will provide the ambience of a prosperous frontier town on the Mississippi River. Unlike Maple Grove's newly constructed Old Main Street, most of Elk River's historic old downtown is real. Perhaps our construction, and our example, will encourage other property owners to restore their buildings to the original appearance. If the HRA allows us to proceed with our plans for this project, we do our best to be- come good neighbors,in old downtown Elk River. Sinc,_ ely, , fzdti avd&C olet'' 'p. ger z David & Carole Ripplinger Track of the Wolf, Inc. 16413 County Road 14 7708 Lakeland Avenue North Elk River, MN 55445 Brooklyn Park, MN 55445 0 Tel: 612-424-2500 Fax: 612-424-9860 King & Main Questionnaire Fall 1999 • Please answer the following questions for the Elk River HRA. Attach additional pages if necessary. 1. Describe the project in terms of the following factors: • Building size- Elk River Municipal Utilities' current building size is 3636 SF. We will need 7000-8000 SF. in two to five years. Proposed building size- 2 story, 8000 to 10000 SF./story Shape to suit functional needs. • Building design 2 Story with parking in lower level 1st story for Utility Office 2nd story for Lease to business/professional offices • Facade appearance To suit downtown architectual theme and adjacent buildings • Parking Parking would be provided in lower level plus street use. Layout of building and occupancy will determine parking needs. 2. How will the project be financed? Revenue Bonds through Elk River Municipal Utilties. • 3. What is your timeline for the entire project (i.e. land acquisition, construction and build out, and occupancy)? Will not need space for 2 to 5 years. Purchasing the land now will preserve our options in future years. • 4. What types of tenants will you be seeking (i.e. Professional services, retailers, etc...)? Utility offices in Main floor. Professional services in upper floor. May need drive-up window on main floor. • 5. Will the building be investment property or owner occupied? How will ownership of the building be structured? • Owner will occupy main floor, 2nd story would be leased offices. 6. What are your expectations of the HRA with regard to the cost of the land (i.e. market rate, seller financing, etc...)? • Provide land as inexpensively as possible. No financing help required. 60' X 60' lot at 322 King Ave. will be available for sale or redevelopment. This lot and building is currently owned by Elk River Municipal Utilities. Depending upon lease space needs, could construct one story initially, and second story when demand for lease space needs became evident at cost effective rates. Please return this questionnaire by 4:30 pm on Tuesday November 16, 1999 to: Marc Nevinski, City of Elk River PO Box 490 - 13065 Orono Parkway Elk River, MN 55330 • Phone: 612-241-5526 Fax: 612-441-7425 Email: mnevinski@ci.elk-river.mn.us • /(i/v/ /e, King&Main Questionnaire Fall 1999 Please answer the following questions for the Elk River HRA. Attach additional pages if necessary. 1. Describe the project in terms of the following factors: • Building size 1) 21,000 square feet 2) 45,000 square feet • Building design 1) Three story office/retail 2) Three story(commercial 15`floor) Residential 2nd and 3rd floors • Facade appearance • Brick/glass Historic architecture consistent with the downtown environment • Parking 1) Surface/street 2) Underground/surface/street 2. How will the project be financed? Private funds first Permanent financing-traditional bank or institutional • • 3. What is your timeline for the entire project(i.e. land acquisition, construction and build out and occupancy)? 1) December 1999-March 2000 Government contracts and approvals. Pre marketing project 2) April 2000-June 2000 Final working drawing and permit approval 3) July 2000-November 2000 Construction 4) December 2000-January 2001 Tenant move in 4. What types of tenants will you be seeking(i.e.Professional services, retailers,etc...)? Retail 1s`floor Office 2nd floor • Office 3rd floor 5. Will the building be investment property or owner occupied? How will ownership of the building be structured? The approach will be either as investment property,or develop into shared condo/or co-op ownership. 6. What are your expectations of the HRA with regard to the cost of the land(i.e.market rate,seller financing,etc...)? If the project cost exceeds one million dollars cost we would like the HRA to of the land or donate to the project to encourage the development and help to create market incentives for development. Please return the questionnaire by 4:30 p.m. on Tuesday November 16, 1999 to: Marc Nevinski,City of Elk River PO Box 490- 13065 Orono Parkway EIk River,MN 55330 Phone: 612-241-5526 Fax: 612-441-7425 Email: mnevinski@ci.elk-river.mn.us • 11-18-99 15 : 14 ER STAR NEWS ID=6124416401 P01/01 air Duane Kropuenske MITI< River Economic Development Authority 13065 Orono Parkway Elk River, Minn. Dear Duane: The Board of Directors of the Rivers Edge Downtown Development Corporation has voted to ask the EDA to allow the flooding of a rink on the corner of King and Main. We are requesting the city to flood a portion of the area for an ice rink for pleasure skaters. The board believes having an ice skating rink there for the public will add charm to the downtown and it will be an attraction. We respectfully request that you consider this matter for your agenda on the meeting of Nov. 22. Sincerely, Don Heinzman Secretary vers Edge Downtown Development Corporation • ITEM , 2. • City E Rr o lve 2000-2003 Economic Development Strategic Plan Adopted May, 1997 Revised November 1999 • ri; h ' Elk River Ytt "A historic river community serving as a regional center with a favorable location near the Twin Cities metropolitan area " Our mission is to actively participate in economic development by utilizing available resources to leverage viable and healthy investments in our community. Such investments will create diverse job opportunities as a result of a stable and growing business and industrial base. We will strive to provide quality services, maintain a favorable tax rate, supply full-cycle housing options for our residents, and foster an environment that will result in substantial growth of our local economy. o Modification ,s-4 City Council Economic Development Authority Housing and Redevelopment Authority S Facilitator: Jim Brimeyer, The Brimeyer Group S ik Aug; • M aj r Iando s sue s a s : • Industrial Base • Attract new businesses to increase the city's industrial base • Business Retention and Growth S .• Retain and grow the city's existing business/industry • Marketing Strategy • Create an industrial marketing strategy to develop the city's business parks. Develop/Redevelop E. Hwy 10 & the CBD • Undertake activities that facilitate development/redevelopment on East Highway 10 and in the Central Business District. • hus,fa • il-':t;v:5*1 I. Grow Industrial Base ga Goal: Develop West Business Park aintain current joint development agreement with Tony Emmerich. tt Consider a joint development agreement with Gagne and Wilson. • Develop well focused target marketing tactics: • Market to brokers and others with connections to industry, such as MN Technology. • Target an industry cluster, such as the energy industry (Energy City). • • Work with local industries to market Elk River to their suppliers and customers. • EDA to research construction of a spec building and locate a tenant. • Establish bank partnerships • Establish developer partnership • Identify funding sources (i.e. franchise fee revenue) • Consider completing construction of Business Center Drive. • Explore marketing methods employed by developers and builders. • Examine appeal of West Business Park to specific types of industries. (Target marketing, Industry cluster) tat Develop specific marketing materials for West Business Park. it Maintain and build networks with banks, brokers, chamber, existing businesses, media, and others. • I• V? x ,% FII. Business Retention & Growth 10:44 . r"�frYj ,,, Goal: Retain and grow existing industries g�g • Complete BRE Survey and distribute final results to council, EDA, Industries and Chamber of Commerce. • Consider publishing periodic (quarterly or bi-annual) newsletter highlighting economic development activities, practices and issues. • Create local industrial business publicity program - have quarterly feature stories written on industrial firms. X Utilize business round table approach to gauge business's attitude • toward developing policies and projects. • Distribute marketing materials to local industry and promote incentive programs. • Ads — Continue to feature local firms in City Business, Ventures, etc... and explore local advertising opportunities. • Utilize DTED's Manufacturer's Week to showcase existing firms. • Create opportunities for interaction between business owners and elected/appointed officials. • Involve local industries in a major marketing event. • Maintain database of industrial businesses. • Consider continuing EDA Commitment to the Business Incubator Project. • lay • 65$ III. Marketing Strategy Goal: Develop an industrial marketing strategy to develop business parks. • Establish a marketing plan committee comprised 5-7 of business & civic leaders. Consider hiring a consultant to help facilitate the formation and implementation of a marketing plan. • Update and maintain marketing materials. • Complete construction of economic development website. • Utilize Energy City designation as a marketing tool. • i Hak: • IV. (ReDevelop ment on E. 10 & in the CBD Goal: Undertake activities that facilitate (re)development on E. Hwy 10 & in the CBD. *,: Highway 10 • Develop criteria for designating redevelopment areas. • Identify redevelopment/development areas. • Develop database of east Highway 10 properties. • Consider locating additional sites for Elk River monument/entry signage. • Examine use of Redevelopment Financing Program along east • Highway 10. Central Business District (Downtown) • Develop criteria for designating redevelopment areas. • Identify redevelopment areas. • Consider hiring a consultant to design a redevelopment plan for downtown. • Develop design guidelines for redevelopment in the CBD. • Issue Request For Proposals for redevelopment sites in CBD. • Further explore the concept of facade grants in cooperation with local banks. • Continue work on CBD action plan. • Construct database of downtown businesses • Continue marketing King and Main site for redevelopment • fk 3.e te'usY. rifik; • '1, t1.,,,gt Additional Action Steps AktW a+K • Modify TIF policy to comply with changes in State law. • Continue professional development of staff through conferences, formal training programs, etc.... • Utilize GIS to manage data of industrial and commercial real estate. • Explore the development of a rail spur • Inventory all available commercial/industrial land and buildings. • X Utilize existing tools to encourage development : TIF, Micro Loan, Tax Abatement, SCBDF, State, Initiative Foundation. X Ensure Brown property remains available for industrial development.