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9.0. EDSR 04-11-2005 --LI-, 4C -1,/4110 Eof lk ......--, River MEMORANDUM TO: Economic Development Authority FROM: Michele McPherson, Director of Planning DATE: April I I, 2005 SUBJECT: Meadowvale Road Rezoning Request - Light Industrial to Residential Attachment • Letter from Richard Strauss, Residential Director,M. S.LLC. • • Location Map Background Staff has spoken with Richard Strauss,Residential Director of M. S. LLC regarding Light Industrial property that is currently for sale on Meadowvale Road. He is interested in assembling the parcels for a work force housing project. His thoughts regarding this project are included in the attached letter. Analysis q,: The two properties in question are guided and zoned for light industrial uses. The total property is approximately seven acres,although the County's GIS information has them at approximately 5 '/z acres. ILocated at 1870 Meadowvale Road is a single-family home dating back in all likelihood to the early 1900s. Its architecture is a traditional four-square design. The a , property at 12669 Meadowvale Road is currently used I . by Bonine Excavating and includes office space and a 40'X 60'pole shed. The site is predominantly used for storage of vehicles,equipment and supplies;a small portion of the property is encroached on by the • wetland to the east. Planning Department Mission:the orderly development of a livable and sustainable Elk River community. Memo to the EDA/Meadowvale Rezoning Request April I I,2005 Page 2 1870 Meadowvale Road • iMi,i t, k, - leg • Storage Yard for Bovine Excavating • The subject parcels are located between the McChesney Industrial Park to the west which is guided and zoned Light Industrial and town homes/small apartments on the east guided and zoned for Multi-Family Residential. The request to reguide and rezone the subject parcels to Residential would not be a spot zone but would be an extension of the adjacent zoning to the east. However, the EDA's past policy is to attempt to preserve and maintain its inventory of Light Industrial guided and zoned property of this site may lend itself to a Brownfield reclamation for additional developable lots for small industrial users. Request Staff requests that the EDA review the request and provide direction to staff regarding the work force housing proposal outlined by Mr. Strauss. 411 M. S. LLC. • • ...a commitment to serve responsibly ' p sibly As a concerned business owner in Elk River,the growing need for new residential ownership among the work force of Elk River has been brought to my attention.This goal has been the subject of numerous discussions surrounding this need and how to fulfill its goal. As an asset manager seeking optimum advantages while providing the best results possible, several elements must be cultivated and combined. ■ The site,containing proper zoning • Partnering between the city of Elk River and M.S. LLC.housing agent. ■ Strategic price budgeting from all involved. The site proposed by M.S. LLC. for consideration as a workforce housing community is located at: 1870 Meadowvale.Road 1.7±acres 12669 Meadowvale Road 5.3±acres M.S.LLC. recognizes the property at 12669 Meadowvale Road and its current zoning. M.S.LLC. in its efforts to partner with Elk River and accomplish the goal of providing work force community dwellings requests the formal reassignment of the subject property from its Ask current industrial zoning. M.S. LLC. submits that the new use to R-4 would not come as a M IF financial hardship for the city of Elk River but would actually benefit and serve the community's great interest surrounding work force community development. Those who serve here at M.S. LLC. would welcome questions and concerns and wish to thank all involved for their careful and thoughtful considerations. Respectfully submitted, Richard Straus Residential Director CC: Scott Harlicker Stephanie Klinzing Michele McPherson Catherine Mehelich IIII 12845 195th Avenue NW,Elk River,Minnesota 55330 sts R '''l :, •!i molimmia 111 �USTRIAL B p. is 4iv. 11. - m aFs 'III i .a .I ADD. ' i„r._„,.L .� pARK I�I ;:ow ' lbWA% ,I 111 ...,.,��i� �: � ��br'4• .' SITE %I ', Iwo.�� � , 4 i • 0 1 O ©U 111P dry% N16. k . DE�ITI LVf „� r r ��� vIll 1 • a 1411_ �� MNGmmMgtiW � ;:,* 1 la NM UAW — Mill �IOW ail M. /iiiirampirs,.ti,,,,4 Via.qw4:/fr-/IRA A e IN74 '-,ibin 711 If link q -1, -161 'Am h '41 moisme _________-- _____„............ -.- Tairiiii I rum ummompiN.... ts..41. ... _ Nom Au Til ?. .4 1. suB .tib - • , �� ;A .. � akT LOT /9t”mir �►• sem ! o 4, Ilth .,.4.„... ta�1,. fil ili il .■ lowN. u W.• G. AIIL ii --‘ %IL' ORONO 11 `** �� ' �;•,p `* ''"NI CEMETERY ,,� , • .. Mq�N 4.4M1W/ &AV A L14-- -- + Location Map N Pli River Case Number MEADOWVALE REZONING • INFORMATION iikj River MEMORANDUM TO: Economic Development Authority FROM: Heidi Steinmetz, Assistant Director of Economic Development DATE: April I I, 2005 SUBJECT: Strategic Industrial Marketing Activities Report Attachments • Big Lake Marketplace Concept Images, Dynamics Design and Land Company • "Cambridge Launches Advertising Blitz for New Industrial Park,"Minnesota Real Estate Journal,April 1, 2005 • "Growth in Elk River,"Minneapolis Star Tribune,April 4, 2005 • • Progress Partner Dispatch (Economic Development Newsletter) April 2005 • Photo of Energy City display booth • "Powers of Speech: K-Netica Looks to Unlock Value of Language Recognition," Minnesota Business,April 2005 • 2005 Business Retention&Expansion Program Schedule I. Product Offering Strategy EDA Brown Property Development Update There is a separate memo regarding this issue. I I. Competitive Strategy The attached images are Dynamics Design and Land Company's concepts for Big Lake Marketplace, a 400-acre mixed-use project in Big Lake,which includes 90 acres of industrial land. Phase one infrastructure improvements are anticipated for the end of June. The attached article from the MN Real Estate Journal highlights the City of Cambridge's plans to launch a marketing campaign to promote its new industrial park. III. Key Account/Lead Generation Strategy There is nothing new to report. 411 Strategic Industrial Marketing Activities Report April 11,2005 EDA Meeting Page 2 of 3 IV. Promotions & Advertising Strategy • In addition to the 17 advertisements scheduled to appear in The Business Journal, the MN Real Estate Journal's Leasing Guide, and the Manufacturers Affiance Newsletter this year,26 ads will appear in the Real Estate Thursday issues of Finance& Commerce magazine in the Economic Development Directory section. Half of the 26 ads will promote the Incubator Program and the other half will promote the Micro Loan and Technical Assistance Programs. Copies of these ads will be provided at a future EDA meeting. V. Public Relations Strategy Media Relations The amount of media relations (pitching article ideas to the media) conducted by public relations consultant Wolf Marking&Media has increased this year,which resulted in the attached article promoting the EDA Brown Property that appeared in the April 4th issue of the Star Tribune. Economic Development Newsletter Recently, EDA members received the 7th edition of the Economic Development Newsletter, the Progress Partner Dispatch,via U.S. Mail. The newsletter was also distributed to approximately 500 people representing the following groups: • Elk River manufacturers • High-tech companies located in Anoka, Sherburne,and Wright Counties • Anoka, Sherburne, and Wright County manufacturers with 20 or more employees 110 • Past&present prospects/inquiries • Key accounts (site selectors, etc.) The purpose is to inform businesses of information useful to their operations and present an "open for business"image. The newsletter is distributed in the Economic Development marketing packets and is also available for download on the City's Website. Energy City The Mayor and staff worked at the Energy City booth during the April 3rd Chamber of Commerce Business Expo. A photo of the booth is attached. 2005 Money Breakfast About 55 people attended the 5th Annual Money Breakfast that was held at Connections in Big Lake on Wednesday,March 16th.. The Money Breakfast is a workshop for new or existing small businesses interested in the latest financing program/techniques,relocating or expanding, employee retention, etc. It was sponsored by the Chambers of Commerce of Becker,Big Lake, Zimmerman,Princeton and Elk River. Staff did presentation on public financing incentives such as Tax Increment Financing,Tax Abatement,Revolving Loan Funds, etc. VI. Strategic Partnership Strategy Downtown Revitalization Project • The anticipated construction schedule is as follows: Strategic Industrial Marketing Activities Report April 11,2005 EDA Meeting Page 3 of 3 • King Avenue parking lot improvement to begin in late May or early June 2005; • Demolition and environmental remediation of the Bluff Block in Summer 2005; • New construction in the Jackson Block in Summer 2005 (upon completion of the King Avenue parking lot);and, • New construction in the Bluff Block after the US Bank building is vacated and demolished in Fall 2005. Sherburne County Strategic Planning It is anticipated that the final strategic work plan of the Sherburne County Economic Development Affiance (SCEDA)will be available in late April. VII. Business Retention Strategy Article Featuring Incubator Tenant in MN Business Magazine The attached article featuring Incubator tenant K-Netica appeared in the April 2005 issues of MN Business magazine. Business Retention and Expansion (BRE)Visits Beginning in 2003,EDA members have attended BREvisits with staff. EDA members indicated to staff which visits they are interesting in attending. A list is attached. Please indicate to staff if changes/additions need to be made. A BRE visit with SoftPac Industries is scheduled for April 8h. A summary will be provided at the EDA meeting. • REJournals.com- Cambridge launches advertising blitz for new industrial park Page 1 of 2 e"5- Wc) n r, REAL ESTATE JOURNAL ... 1 N„_ Apr. 01, Friday April 01 2005 Cambridge launches advertising blitz for new industrial park Staff Writer RE3ournals.com The north-central Minnesota community of Cambridge is launching a marketing campaign to pitch its new industrial park as well as its "advantage as the ilti closest tax-free JOBZ development zone to Minneapolis." City officials have branded the campaign "Cambridge, Minnesota's Opportunity Community." They have developed a new logo, Web site, (www.opportunitycommunity.com), brochure, and direct mail campaign. The new industrial space is called the Cambridge Opportunity Industrial Park. It form was completed late last year and now is open "just in time for manufacturers to leverage the tax-free JOBZ benefits of locating in our community," according to • John Schlagel, president of the Cambridge Economic Development Authority. "With our proximity to the Twin Cities, great soils, looped water and redundant L.; underground electric service, we are in an ideal place to attract manufacturers to grow in our community." Owe Cambridge Economic Development Director Tom Willett says, "The city spent a ton taz lot of time over the past several years putting the pieces in place to enable us to attract major employers. It's great to be in a position to get out and sell the community, which has so much to offer. " ko4, Willett adds Cambridge has a growing workforce and features an Allina Medical INN Center, the Anoka Ramsey Community College, and "lots of shopping opportunities. Opportunity Industrial Park now gives us a competitive location for industrial growth." Sherato Falvey The City worked with Anne Hunter of Marketing Source USA and Janna King of 1 Economic Development Services to develop the marketing materials and MOWS strategy. Both companies have won national awards in economic development marketing. I Me the 'i so„: a http://www.mrej.com/story.cfm?Market=MN&StoryID=13343 4/1/2005 PROGRESS PARTNER titt April 2005 The Light Industrial Hub of the Northwest Metro All Aboard the Northstar! COMMUTER LINE WOULD BE ANOTHER BENEFIT FOR ELK RIVER BUSINESSESRiver Catherine Mehelich,the Director of Economic Development for the City of Elk River. "It allows them to draw from a larger pool of quality employees. / And those workers,if they take the rail Akt line,have a much easier commute and ' don't have to worry about the hassles of heavy traffic and parking?' "The Northstar line is vital for our city and our area,"says Debra Urista,chair of All Aboard Elk River,a grassroots organization that supports the proposal. "It would mean that people who work Governor Powlenty spoke to the Elk River Area Chamber of Commerce, y and live in Elk River would not have to • November of 2004 and described his support for Northstar. He accented an honorary,•"ticket'to ride N from Al Aboard Elk River Chan• be totally dependent on driving the Debra Urista. crowded freeways year-round,either f recent news from the Minnesota is expected to take less than 30 minutes. for their commute or to drive to Legislature is any indication,it Minneapolis or other locations in Approval of the Northstar line would the Twin Cities." looks as if the long-awaited not only be good for Elk River area Northstar Commuter Rail line will Local supporters note that the be comingto Elk River after all. residents,who could ride the Northstar line would be a community commuter rail to many cultural venues That's because in recent weeks a and sporting events in the Twin Cities. asset,making Elk River attractive to bonding bill that includes initial • more residents and potential employees The line would also provide a great funding for construction of the 40-mile for local companies. segment between Minneapolis and Big benefit to existing and future Elk River Lake,with a stop and a commuter businesses and their employees. "There are plenty of light industrial station in Elk River,was progressing The Elk River Station,for example, companies looking at Elk River as rather nicely at the Minnesota Capitol. would be right next to a light a place to relocate or to start a The commuter line would be added to industrial park owned by the City's business;says Mehelich of the the existing tracks operated by Economic Development Authority Economic Development Department. Burlington Northern Sante Fe(BNSF) (EDA),which could be ready for "And we have a variety of business Railway,which basically run parallel to incentive programs that can assist development in the fall of this year. heavily used Interstate Highway 94 them. The potential addition of the and U.S.Highway 10-the so-called Eventually,the park could have up to Northstar line is another valuable asset Northstar Corridor. 500 employees or more,who would to Elk River companies"■ According to supporters of the be able to walk from the Northstar project,the eventual$265 million station to their workplace. Northstar line could be up and (Please see related article on Page 2). illrunning by as soon as 2008. Starting "Traditionally employment-intensive from downtown Minneapolis,the ride businesses have really wanted to be to the Elk River Station,and vice versa, near commuter rail lines,"says Please tall x'6;3.O ii /Uf(I nr c-mail its at c/rich(,lie/)C«:ci.c,ih,-rwer.rnn./IN or bslc'iuniel_<<I::ri.elle III el ntru.r,s C .1 .�.. ' Over 13065 Orono Pkwy Elk River,MN 55330 Future Light Industrial Park Taking Shape s demand continues to increase for light industrial The future park has an added benefit of being within property in the City,Elk River's Economic walking distance of Elk River Station,a stop on the velopment Authority(EDA)is gearing up to open proposed Northstar Commuter Rail line.Also,one lot in a new light industrial park in the near future,possibly as the park is tentatively slated for a YMCA,another benefit for soon as this fall. local companies and employees. ■ The highly visible EDA-owned site-better known locally IIIIIIIkUlgillil as the Brown property-is near U.S.Highways 10 and 169. With about 38 acres of developable land,the park could accommodate projects in a variety of sizes,from 20,000 to over 200,000 square feet. The EDA recently issued a request for proposals(RFP)to market and develop the property,and received responses from two commercial real estate firms:Duke Realty Corporation andAmcon Construction Company.The EDA will continue discussions with the two developers,however no commitments have been made. An alternative option oll,„ `' that is being considered is for the IDA to market and develop the property on its own. 4 Whatever course the EDA chooses,land prices in the park ; would be competitive and there are a variety of city-offered `....ri ` incentives to qualifying companies that locate in the park. .. Vis, Currently,the City is in the process of planning the roads, utilities and other infrastructure at the property. "The EDA is definitely taking action to make these lots available as soon as possible,"says Catherine Mehelich, Elk River's Director of Economic Development,"and the 0 master plan gives companies plenty of flexibility in the size of their projects" 'lease«Ill ?63.(i 5 /0,40 or e-mail rrs al crneheliclw�ci.elk rirer:rrrrzits or'Vic/I/ Tleh aci.ell:ricer-am.its. Corporate Filings 10 Other Side of Zero . . . 18 LEADINGEDGE ■ upstarts 10 Deal Flow 20 .® .■ C-Changes 14 liCORPORATE FILINGS I Updates on featured limns I August Technology Corp. Pavers of Speech (NASDAQ:AUGT)[CovER,OCTOBER 2000]received a merger proposal from K-Netita looks to unlock value of language recognition Milpitas,Calif.-based Nanometrics Inc.in January for$157 million.Subsequently, the Bloomington based semiconductor DEVELOPING SOFTWARE THAT CAN ACCURATELY INTERPRET HUMAN SPEECH testing company received a$190 million IS A PROBLEM COMPUTER SCIENTISTS HAVE BEEN GRAPPLING WITH FOR YEARS. offer from NJ.-based Rudolph It's a problem Knowledgenetica founder Joe Roushar has been working on since 1984.The Technologies Inc.and a$205 million bid technology he developed as a solution is the basis for his Elk River-based software firm, from KLA-Tencor Corp.,both of which which does business as K-Netica. August Technology rebuffed.According "Ours is not speech recognition soft- Joe Roushar s to TheDeal.com,August Technology ware, which is only capable of reading prefers the Nanometrics'deal because 5 it will be a merger of equals.Rudolph's lips; our software reads minds," says : k Roushar,whose resume includes experi- ' =; and KLA-Tencor's bids are considered STM- I hostile because they are competitors. ence as a U.S.Army intelligence officer www.augusttech.com and IT system architect for companies -= ' including United HealthGroup, ' BioE, Inc. [UPSTARTS,SEPTEMBER American Express,HB Fuller and Banta 2004]received$8.3 million in its latest Corp."Other,existing solutions are based round of private financing,thus bringing on keyword-matching,which will deliver `" the total raised by the biotech company to ,:'-i= $22 million.The St.Paul-based company some value but will miss tremendous is developing antibody-based technology amounts of important information, and• ;�;, platforms for therapeutic and diagnostic also produce many false hits." ; �;_ applications.MedVest Capital helped K-Netica uses access to a massive BioE raised the funds from angel database to put speech in context and investors.The funds will be used to com- resolve the inherent ambiguity in lan- plete pre-market FDA requirements for guage. "It's a large neural network of the company's cell separation technology real-world knowledge—using a process BIZBRIEFING platform,PrepaCyte-CB,and market the product to both public and private sectors. that's verymuch like the brain." KnowledgeNetica Corporation►Inception:1999 III www.t+ioe.Com In developing his software, Roushar Headquarters:Elk River III Revenue:$100,000 II Seed Capital:$1.25M■ Venture capital:None■ says his major breakthrough was Patents:Multiple pending■ Employees:6■ Lakes Entertainment,Inc. "enabling a process to sift through this Description:Developer of language-recognition soft- (NASDAQ:LACO)[COVER,JANUARY massive network of knowledge very ry ware■Web site:www.knetica.com 2005]received approval in February for rapidly. Our competition takes hours to its proposed casino location in Vicksburg, Management Team► Joe Roushar,Founder,President Mississippi,from the Mississippi Gaming process a network of similar size.We do it in milliseconds," usinga data base that &CTO II Warren Herreld,Operations III Juan Ramirez, Commission.Lakes plans to develop a Business Development■Harlan Jacobs,Finance 250-room hotel with 1,500 slot machines includes 14 different languages. and 45 game tables on an approximately , K-Netica's primary product to date is ISYL Care,call-center software used to automate 160 acre site on the Mississippi River. interactions between callers,Web-surfers,e-mailers and company data systems—with or Lakes Entertainment is also 64 percent without an employee involved. Several clients are using the software,including two cus- owner of WPT Enterprises(Nasdaq: tomer care-center companies and another that conducts complex online information- WPTE),which produces the World searches.Roushar also hopes to gain customers in the managed-care sector,helping answer Poker Tour.WPT announced that it policyholders'insurance and billing questions. would partner with WagerWorks to In addition,K-Netica has met with several federal agencies involved in defense,national create an online poker site,potentially leading to significant expansion in the security and intelligence,including the FBI,who are considering acquiring the software. Calif-based company. Founded in 1999, K-Netica operated for the first three years on a self-funded basis through consulting revenues,while finishing the logical design and the patent applications Dexma Inc. [EMERGING COMPANIES, for the ISYL technology.The firm subsequently received roughly$450,000 in seed funding 0 MAY 2004]announced the leadership through a convertible bridge loan,plus a$150,000 SBA loan. The company is planning on team for a new joint venture in February raising an additional$250,000 in the near term,and a Series A round in late 2005 or early 1006 to raise another$2 to$3 million,according to Roushar.—Dan Emerson 10 MinnesotaBusiness ) April 2005 • 0 Oo 1- 0. O c Tu fl. 0y HOi • WI o(s ati vW O i 0 O _ LI0 u • v1 LI W31 pv0N U.CANa Q C7 a CU W0 • 4.1 aUHq�" 0 U Li o cst 4 •a ., o -dh0NCi 4-1 c,1 WaC=O3�-7 0+ • o o No • cel 04 y0ao U NM • ce W co 1.4 o o o up • 4-1 00 W�in wO=p , y�aNN) C7 'bf � N hor 4-1 wp o oN P-1 U Q : a • CU " • N v b • c - a) atOO o°' P u ° u u u 4, 00 ,o co aNN p qaO cnw 0 q w a p � aa � a7Ua bc ui °f 0i0 o•i 007 0HQ °g 49 AouU• v AuE ayClJ u Na ; °Z to 0 0 1-4 oct • .4! 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Vice Ptesident, Director of Research, Collieas internalonai � The last few months have seen a dramatic increase What is the impact of this trend on real estate mar- in merger and acquisition (M&A) activity. December kets? The logical answer would be that M&A's lead 2004, in particular, was the most active month for to consolidation, layoffs and a corresponding reduc- 'E global M&A activity since August 2000. This caps off tion in demand for space. In the short term, mar- Merger and ` a busy year for investment bankers, for whom global kets are characterized by uncertainty and disruption. Acquisition Activity M&A activity totaled $1.95 trillion, a 41 percent in- In the medium and longer terms, assuming a grow- on the Rise ,; crease over 2003 levels. Recent M&A's include: ing economy, companies generally overestimate the savings and synergies of combined entities and end Jobs',lobs and More Jobs •• Oracle/Peoplesoft up taking-back space that was initially slated for the • Johnson&Johnson/Guidant sublease market. That appears to be the case with Significant Transaction • Proctor&Gamble/Gillette the Oracle/Peoplesoft merger, and also the Bank of • SBC/AT&T America/Fleet and Manulife/John Hancock acquisi- CTMT elects • Verizon/MCI (announced) dons. M&A's are a normal part of the business cycle oMCaffre to SrYe and will eventually run their course.Talk of consolida- n Nat onal Board Iaf Will this trend in M&A's continue? Probably. Corpo- tion and the reduced Directors rations are sitting on large amounts of cash and are need for real estate looking for ways to put these funds to work.Cash bal- will fade as quickly as ( alliers'1i ley Martin ances will most likely grow larger with the temporary it came to the fore. In- ,,rocker Completes lowering of taxes paid on repatriated funds,which will creased M&A activity 65,000 sq,sq ft Lease only exacerbate the situation. Equity market valua- will only act as minor tions are high and acquisitions are a quick and rela- drag on an otherwise „ for the Institute of tivelycheapway (particularlywith high stock prices) healthyleasingmarket New Americans g to create growth. in 2005. l aft" Jobs, Jobs and More Jobs k INFORMATION source:Colliers Irtonotionui Last Friday's job report from the Bureau of Labor Sta- cilities to grow.With the economy performing at the tistics was very encouraging. For the month of Febru- higher range of projections made at the outset of the ary, 262,000 jobs were created.This is well in excess year, we may have to revise our already bullish fore- of what was anticipated, and the best monthly gain casts for absorption across all property types. Isince October.Of significance was the growth in man- 1 ufacturing jobs,a first since August of last year.Almost ' every industry saw job gains, with construction up 040 Jobs Created in February The 30,000; professional and business services +81,000, zestMc�nttltyG ins „t3>rtober �e health care+23,000 and retail +30,000. ear 350f With job growth on the rise, and business spend- 300 , zsfr ing becoming more robust, many economists have li2o ;, r bumped up QI GDP growth to over 4.0 percent and 15e indeed, first half economic growth looks likely to sig- t00 '� '00 S.Sixth Street nificantly exceed forecasts made at the beginning of 1111111111111-1.. .,. .>. ,.. v,-,quite 1400 the year. This is all good news for commercial real .I- F M A 1I J J A s o N 0 J- F Minneapolis, MN 55402 estate, which will continue to benefit from more 04 . fi F,a 612/341-4444 people working, and businesses that require new fa- • INFORMATION City of Elk -�-� River MEMORANDUM TO: Economic Development Authority FROM: Catherine Mehelich, Director of Economic Development J/ DATE: April 11, 2005 SUBJECT: 2004 Annual Report Attachment • Economic Development Department section of the City 2004 Annual Report The 2004 Annual Report was presented to the City Council at its special meeting on March 28t. The attached Economic Development Department section includes a summary of the • EDA's activities during 2004. The entire Annual Report is available on the city's website at www.ci.elk-river.mn.us. • 2004 i Nu \ 1 , \ Ri! r , illikCity of River For The Year Ended December 31,2004 City of Elk River Phone:763.635.1000 13065 Orono Parkway Fax:763.635.1090 Elk River,Minnesota 55330 Website:www.ci.elk-river.mn.us City of Elk River 2004 Annual Report • ECONOMIC DEVELOPMENT MISSION STATEMENT: 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. In addition, the strategic industrial marketing mission is to become the Light Industrial Hub of the Northwest Metro. YEAR IN REVIEW ECONOMIC DEVELOPMENT AUTHORITY Economic Development Strategic Plan The Economic Development Strategic Plan provides a framework for the City Council and Economic Development and Housing and Redevelopment Commissions to work within and focuses staff energies on those priority areas important to the economic health of the city. The original Strategic Plan was adopted in 1997 and was modified in 1999 reflect a reorganization of priority issues. Jim Brimeyer, Brimeyer &Associates facilitated the 2004 strategic planning discussions which included participation from the City Council, EDA, HRA and EDA subcommittees Incubator Advisory, Finance, Marketing and city staff. The 2004-2007 Strategic Plan was adopted in late 2004 by the EDA, HRA and City Council. The priority goals identified in the Plan are: I) Industrial Development 2) Central Business District 3) Transportation 4) Commercial Development. 2004 Advertising & Public Relations Campaign The advertising campaign in 2004 was consistent with previous years in order to make a stronger impression for Elk River as the Light Industrial Hub of the Northwest Metro. Advertisements were placed in the MN Real Estate Journal Leasing Guide, The Business Journal, and the Manufacturers Alliance Newsletter. The advertisements featured photos of Cymbet, Display Solutions, E & 0 Tool and Plastics, Metal Craft Machine & Engineering, Orluck Industries, SoftPac, and Sportech. The economic development newsletter,the Progress Partner Dispatch, continued for the second • year in 2004. April,July, and December editions highlighted issues important to manufacturers and site selectors. Approximately 500 people receive the newsletter, including key accounts, and local and area manufacturers. In October, a direct mail piece was distributed to the same 500 people promoting the Micro Loan Program and the Technical Assistance Program. City of Elk River 2004 Annual Report 0 Case study articles featuring SoftPac Industries, Orluck Industries, and Gradient Technology were developed in 2004. The articles appear on the Web site and are included in appropriate marketing packets to industrial prospects. Marketing Events In February, the City of Elk River participated as a co-sponsor of the MN Real Estate Journal Economic Development and Site Selection conference. The conference focused on site selection,financial incentives, and in particular JOBZ. The Director of Economic Development was a panelist discussing financial incentives other than JOBZ. Participation in the event was a strategy for building relationships with key accounts including commercial real estate developers and brokers. In October, the City of Elk River participated with the MN Department of Employment& Economic Development (DEED) and the Elk River Area Chamber of Commerce in the recognition of MN Manufacturing&Technology Week. The recognition event included tours of Metal Craft Machine & Engineering and Solors Optional Axis, followed by a luncheon/keynote speaker address at Lions Park Center. A full-page advertisement was featured in the Elk River Star News thanking the list of local manufacturers for their contributions to the community. The Economic Development booth was also rotated in three local banks. The booth featured photos and a list of local manufacturers. Energy City Marketing The Energy City brochure and the Web site were updated and the Energy City booth was included in the Chamber's Business Expo. Economic Development Web Page Updates were made throughout 2004 to the Economic Development page of the city's website located at www.ci.elk-river.mn.us. There is a link for economic development information directly on the home page entitled "Grow Your Business." Economic Development Micro Loans Several loans were paid off and closed out in 2004, including Beaudry Convenience, Ink Wizards, Olde Main Eatery, and Ultra Image Powder Coating. Six micro loans remain in current standing, including Display Solutions, Galli, Lake Assault Custom Boats, Minnesota Fabrication & Machine, Second Generation Properties (NAPA), and Water Laboratories. The loan fund ended with an approximate $900,047.98 cash balance in 2004. Upon the EDA Finance Committee recommendation, the EDA approved several amendments to the Micro Loan Policy, including the ability to loan up to $100,000, which was previously capped at $50,000. The EDA approved two new loan applications in 2004. A $50,000 loan was provided to Display Solutions for the purchase of machinery and equipment necessary to begin operations in Elk River. The company operates within the former Ultra Image Powder Coating space located in the McChesney Industrial Park. The loan is structured as a participation loan with American National Bank. The company committed to creating 7 new full-time jobs at no less than a $12.00/hour wage within 2 years. City of Elk River 2004 Annual Report • A $100,000 loan was provided to Badger Ventures, LLC (Gradient Technology) for the purchase of real estate necessary for operation. The company began construction of a new building in the Elk River Business Park in July. The loan is structured as a participation loan with The Bank of Elk River. The company committed to creating 5 new full-time jobs at no less than a $15.00/hour wage within 2 years. Gradient Technology Tax Abatement Project With the help of the City of Elk River, officials of Badger Ventures, LLC and Gradient Technology, Inc, formerly of Blaine, moved into a new 13.000sf facility in November. Gradient's primary business is demilitarizing munitions for the US Department of Defense. The Elk River facility will be used strictly for corporate headquarters, research and development and equipment fabrication. The actual "demilling" takes place at military bases and other locations. Gradient paid up front for the two-acre, $145,556 lot in the Elk River Business Park, but is being reimbursed through tax abatement equally from the City of Elk River and Sherburne County for a period up to 10-years. The city also provided a $100,000 Industrial Incentive Micro Loan. Gradient Technology employs 13 highly skilled employees, 7 of which are located in Minnesota. In addition to retaining the present workforce, Gradient will create a minimum of 5 full time positions at a minimum of$15.00 per hour (exclusive of benefits) within two years. Orluck Industries, Inc. Tax Abatement Project Following the economic ups and downs the past few years Orluck Industries remained a patient opportunity for the City of Elk River. The company, formerly of Dayton, is a manufacturer of high precision metal and plastic components serving industries in Minnesota and across the United States. The Elk River Economic Development Department crafted an aggressive package of financial assistance and city staff shepherded the project allowing for construction to begin in the fall of a $1.4 million, 23,000sf manufacturing facility. Orluck Industries will occupy about 15,000sf with its 15 full-time employees with jobs that pay $15.00-20.00 per hour. The remaining roughly 8,000sf will provide much needed lease space for new and growing businesses. The city had acquired the 2.79 acre lot, located at the southwest corner of Joplin Street and Business Center Drive from Sherburne County upon tax forfeiture in 2001. The city sold the $201,520 property upfront to Orluck, but is being reimbursed through tax abatement equally from the City of Elk River and Sherburne County for a period up to 12-years. Industrial/Business Park Development In November 2004 the City Council held a joint work session with the EDA to discuss its sites and development options. The sites under discussion were: ■ City-owned Cargill land-60 net acres, Light Industrial & Commercial • EDA-owned Brown land-45 net acres, Business Park The EDA and Council provided staff direction to proceed in developing a plan for Phase improvements and development of the sites listed above. The goal is to have lots available for • immediate industrial development and to put all industrial land in Elk River on a level playing field in price and financing assistance, allowing the prospect to select a site based on the site location and its amenities, rather than on price. Contingent upon the EDA and Council City of Elk River 2004 Annual Report • approval, it is anticipated that infrastructure improvements will begin summer 2005 for the sale and development of lots by fall 2005. In late December 2004, the Sherburne County Board of Commissioners took action to purchase the 76-acre Elk Path Business Park land. Industrial Business Retention & Expansion Visits Staff and EDA Commissioners attended six visits in 2004, including Contour Mold, Cretex, Great River Energy, NRG, Supermats, and Riverside Manufacturing. The goal of the visits is to develop a relationship with the local manufacturers for a better understanding of their issues and future needs. Business Incubator Program The EDA has been operating the Business Incubator Program in conjunction with Genesis Business Centers since 1996. The goal of the Business Incubator Program is to develop long- term relationships with young, growing companies that have an emphasis on new technologies and to help these companies become established in Elk River. Since the program's inception, 9 companies have entered the Incubator to further develop their products and grow their business. The EDA currently leases three suites from building owner, Larry Hickman. Two renewals were granted in 2004 to Incubator tenant, KnowledgeNetica Corporation (K- Netica). K-Netica develops intelligent software to interpret and translate written and spoken • human languages. The software has a number of key applications for commercial,government, military, and personal use. One renewal was granted to Incubator tenant, LapTwo Technology Corporation. Early during its first year in the Incubator, LapTwo did research and development work in several product areas involving new uses of the internet, web servers, and hand-held PDA computers. In the first quarter of 2004, a new product opportunity was identified. The product, to be sold as a software package, is a management and security system for internet hospitality"hot spot" providers such as restaurants, hotels, motels, and the like. The full-scale product development project began in March. In 2004 staff continued to maintain a close relationship with incubator graduate,Cymbet Corporation for their anticipated expansion project in Elk River and on their successful funding round of$16 million. HOUSING &REDEVELOPMENT AUTHORITY Housing Work Plan In follow up to a 9-month Housing Work Plan that included presentations from a variety of housing resources, the HRA directed staff to conduct an informal/non-scientific survey of Elk River manufacturers and retail/service businesses regarding housing availability and affordability • issues. The results of the survey were presented to the HRA in February of 2004. In summary, 66% of retail/service businesses surveyed and 64% of manufacturers surveyed felt that Elk River was meeting the housing needs of their employees. It was of HRA consensus that the next steps in the Housing Work Plan are the following: • City of Elk River 2004 Annual Report • • Utilize existing city plans, such as the Comprehensive Plan and the Economic Development Strategic Plan, to guide housing decisions. • Utilize workforce data (updated quarterly by the State of MN) to analyze the types of workers and wages in Elk River and compare it to housing affordability/availability in Elk River. • Continue to consider the appropriate housing balance for Elk River. • Consider conducting an informal housing survey to manufacturers and retail/service businesses on a biannual basis. Downtown North of Hwy I0 Visioning Prompted by a Tax Abatement application from Arrow Building Center that was later withdrawn, the HRA began a visioning process in late June of 2004 for Downtown North of Hwy 10. As part of this process, the HRA reviewed the redevelopment process, the recent planning efforts, and the current conditions of the area. The HRA then developed a study area boundary and long-term vision for the area. The study area and the long-term vision was incorporated into a series of concept options for the area. The approved concept includes mixed use, retail service, and single family rehabilitation in the area. It was of HRA consensus that the approved concept plan be utilized when responding to redevelopment proposals and inquiries from the private sector and that staff continue to monitor the area for development activity and update the HRA as needed. • Downtown Revitalization Project In late 2001 the HRA developed goals and objectives for the Downtown Revitalization Project. The goal of the project is to enhance downtown Elk River as a vibrant retail, commercial and residential area and revitalize private investment downtown. Following a request for proposals and interview process the HRA selected MetroPlains Development as the project developer in August 2002 and entered into a preliminary redevelopment agreement together. Over the past 2 years the city and developer have completed a number of steps to refine the project including market and financial feasibility studies and gathering community input on the project proposed as follows: The plan for the Jackson Block includes a three story building with about 10,000 square feet of first floor commercial along Main Street and Jackson Avenue;32 units of rental housing and approximately 50 underground parking stalls and 16 surface stalls. The plan for the Bluff Block includes a four story building with about 10,000 square feet of commercial space along Main Street; 60 to 68 units of for-sale housing and approximately 110 underground parking stalls. Discussions to address parking concerns, financing, and the development agreement continued in 2004 with several issues being resolved by the end of the year. The HRA and Council supported the concept to remove the Elk River Municipal Utilities • building and close the King Avenue-Highway 10 access in order to expand the public parking lot in this area. Preliminary designs indicated the addition of up to 50 parking stalls. Construction of the parking lot is anticipated to begin spring 2005 with summer completion. City of Elk River 2004 Annual Report • • A key component to the process during 2004 was with regard to the project financing.A Small Cities Development Program (SCDP) grant from the MN Department of Employment and Economic Development (DEED) was awarded upon the city's 2003 application. While the application requested grant funds for the rehabilitation of commercial and residential buildings downtown, DEED awarded only $400,000 for the Jackson Block rental housing new construction, which will be provided as a long-term low-interest loan to MetroPlains. The City Council established Tax Increment Financing District No. 22 (a redevelopment district) in November. By mid-year MetroPlains had executed a purchase agreement for one of the three Bluff Block properties, 641 Main Street. Another key component of the process was the negotiation and approval of the final development agreement. Earlier in the year the HRA and City Council concurred that the project should include both the Jackson Block and Bluff Block developments. In addition to the linkage between the Jackson and Bluff projects the development agreement outlines the project schedule and financial assistance to be provided. With the HRA's recommendation, the City Council approved the Final Development Agreement with MetroPlains Development, LLC on December 6, 2004. Communication with the public has been a key component of the Downtown Revitalization Project. The multiple means of communications continued in 2004 to including the following: ■ Monthly project updates on the city website • ■ Q &A inserts and project coverage in the Star News ■ Project update articles in The Current ■ Monthly updates to River's Edge Downtown Association group ■ Monthly HRA/Council meeting updates ■ Direct mailing of meeting notices • City of Elk River 2004 Annual Report • DEPARTMENT STAFF NAME TITLE START DATE Catherine Mehelich Director of Economic Development June 2000 Executive Director, Economic Development Authority Executive Director, Housing & Redevelopment Authority Heidi Steinmetz Assistant Director of Economic Development December 2001 Support Staff Debbie Huebner Administrative Secretary (Planning Dept.) March 1993 Jessica Miller Secretary (Administration Dept.) February 2001 • • City of Elk River 2004 Annual Report • 2005 GOALS & PROJECTS The Economic Development Strategic Plan provides a framework for the City Council and EDA and HRA to work within and focuses staff energies on those priority areas important to the economic health of the city. The 2004-2007 Economic Development Strategic Plan includes the following major goals: 1. Industrial Development • Attract new businesses and expand existing businesses to increase the city's industrial tax base. II. Central Business District • Undertake planning and activities that facilitate redevelopment in the Central Business District. Ill. Transportation • Advocate and support proactive planning for improvements to the local and area transportation system. IV. Commercial Development • • Encourage desired commercial development in identified areas. • • .1,„.. Dotaeuttdthcc' City PROJECT DESCRIPTION E1k ......., dintiomme,..� NOVEMBER 2004 River Enhancing Downtown Elk River's Role Asa Vital Retail,Commercial and Residential Area. Primary Goal of Downtown Revitalization Project: The City of Elk River has partnered with MetroPlains - Development to assure the long-term viability of a it` o,' downtown by making a connection to the rest of the ,'I f ± 1t ''L.; community and by utilizing the riverfront location. '� '-,. Redevelopment will enhance downtown Elk River's ; ,,z *{ S. ` '2t - role as a residential, retail and commercial area =-Js -,--_,,-1-c.,1a , -. 3 and also revitalize investment in the downtown E y, business district. . - i II a ► fig r-.k �- y r �,IiR Development Objectives: , € ''' •16 -� i i m i, ••-x• �,, • Mixed use(residential/retail/service) ,!_ ------,-7,-,_,L77,„--„,--9,-,4`-- 4 • Consideration of the historic context study results y; • ,,;,..,:.-..,„4--.-", • Strengthen connection to the community • lie 0. Ill? 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M W Printer version: Traffic fee stirring debate among tenants,property managers Page 1 of 2 startribune.comClose window Last update:April 4,2005 at 7:19 AM Traffic fee stirring debate among tenants, property managers Dan Mitchell Published April 4,2005 Commercial and multifamily property managers and some of their tenants are bristling over the possibility that Minnesota cities soon might be allowed to impose a fee on landowners based on the amount of traffic their property generates. A bill in the Legislature would allow cities to charge a"transportation utility fee" based on the number of vehicle trips generated by each property. Fees would be collected via utility bills, and the revenue would be used for road maintenance and improvements. The theory is that because apartment complexes and commercial properties create the most traffic, they should pay for improved roads. Property taxes have been the main source of money for local roads,but "it's increasingly difficult" to rely on them, said Jim Miller, director of the League of Minnesota Cities. "Property taxes are the most onerous taxes there are." Opponents of the bill say local governments are just trying to raise taxes without angering voters. "This is not a fee, it's a tax," said Jack Horner, a lobbyist for the Minnesota Multi-family Housing Association. The bill gives city officials a way to raise revenue "without taking any political heat," he said. While the basis for the fee might seem logical, Horner contends that it's inherently unfair. First, it's not always the case that a big apartment complex or commercial property is the cause of a lot of road wear. Properties on the edge of a municipality, for example,might create more traffic for a neighboring town than its own. Horner also said the cost would be passed on to tenants in the form of higher rents, forcing tenants to pay regardless of how much they drive and even if they don't own a car. Miller counters that it's "easy to find examples where something like this seems unfair." The fee is nevertheless the most equitable way to fund road budgets, since property taxes also are passed on to renters, he said. And while the fee might not make property taxes go down, "they wouldn't go up as fast." The bill would leave most of the details up to the municipalities themselves,which could open the door for abuse, Horner said. Under the bill,there is no cap on the fee, and the formulas for assessing it are so complex that "it would give [governments] the ability to skew it however they want to skew it. So if there's a big complex or commercial property in town, there would be a strong temptation to hit that property very hard." • Miller called that conclusion "simplistic, and, frankly, insulting. I don't know any city councils that are going to gleefully say, 'Let's do it just because we can do it.' " http://www.startribune.com/dynamic/story.php?template=print_a&story=5326083 4/4/2005 Printer version: Traffic fee stirring debate among tenants,property managers Page 2 of 2 Among the cities pushing for the fee are Minnetonka, Bloomington and Edina. The industry groups opposing it include the Minnesota Grocers Association, the Minnesota Retailers Association, the Minnesota Trucking Association and the state chapter of the National Association of Industrial and Office Properties. It's hard to determine how much property owners would pay,but one report provided to the Legislature by proponents put the fee at about $3 to $5 a month for single-family homes and $50 to $100 for a high- density commercial property such as a supermarket. The fee most likely would be assessed via water bills. . The bill was removed from the transportation bill in committee Friday, but it might be resurrected before the session ends. If not, "it will come up again next year," Miller promised. "It's not going to go away." lGrowth in Elk River 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 adjacent 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 since the city bought it from Cargill 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. ©Copyright 2005 Star Tribune.All rights reserved. • http://www.startribune.com/dynamic/story.php?template=print_a&story=5326083 4/4/2005