6.0. EDSR 06-13-2005 ITEM # 6.
City of
Elk
River
MEMORANDUM
TO: Economic Development Authority
FROM: Catherine Mehelich, Director of Economic Development
DATE: June 13, 2005
SUBJECT: Northstar Business Park Development Update
Attachments
• EDA Northstar Business Park Concept
• Memo to Council from Ms. Steinmetz re: Public Infrastructure Grant,June 6, 2005
Background
•
The primary goal of the industrial development is to increase the city's employment and tax
base. The objective is to have property readily available throughout the city for industrial
development.
At its May meeting the EDA discussed the draft feasibility study and options for the
infrastructure improvements. The EDA provided comment on the feasibility study and
recommended an option that would prepare plans and specifications and platting for the
entire area but only proceed with underground utilities in the first phase.
Recent Activities
On June 6 the City Council made the following actions to proceed with the public
improvement process in response to the EDA's comments:
• Received the feasibility study and ordered a public hearing to be held on July 5, 2005
• Ordered the preparation of plans and specs and the platting process to begin
Staff has received interest from three prospects to build the following described projects in
the park either this fall or next spring:
• 18,000sf precision machine shop expansion for approximately 2 acres, 42 jobs
• 32,000sf manufacturer for approximately 3 acres, 39 jobs
• 20,000sf medical tubing manufacturer for approximately 2 acres, 30 jobs
. Staff is working to obtain a letter of intent from each of the prospects in order to assist the
Council's decision in July regarding the scope of the improvement project to be bid. It is the
Northstar Business Park Development Update
June 13,2005 EDA Meeting
Page 2 of 2
• City's intent that the lot be purchased by the user upfront and receive pay-as-you-go Tax
Rebate Financing from the City and County to reimburse the prospect for a portion of the
land cost with the amount of the assistance tied to job creation goals. Within the coming
months the prospects will submit application for Tax Rebate Financing from the City and
County. The applications will be reviewed by the EDA for recommendation to the City
Council.
In addition to the opportunity of having three initial users of the park to afford a greater
scope of the improvement project, staff has recently been made aware of a grant opportunity
from the MN Department of Employment and Economic Development (DEED). The
attached memo to the Council from Assistant Director of Economic Development Heidi
Steinmetz describes the grant opportunity for 50% of the capital cost of public infrastructure
and the program requirements. Staff expects to submit a grant application later this month
and it is our understanding that notification of grant award would be approximately one
month following application submission.
Improvement Project Schedule
The following schedule assumes the need to have utility construction complete for
fall/winter new business construction:
• Submit Preliminary Plat Application June 27, 2005
• Council holds public hearing and orders improvement July 5,2005
• Council approves plans/specs for first phase utilities and July 18, 2005
411 authorizes advertisement for bids
• Planning Commission reviews preliminary plat July 26, 2005
• Bid open August 10, 2005
• Council approves bid and awards contract August 15,2005
• Construction begins August 2005
• Council determines cost to be assessed and sets September 6,2005
assessment hearing
• Council holds assessment hearing/adopts assessment roll October 3,2005
• Construction complete October 2005
•
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City of
Elk -�-1
River
MEMORANDUM
TO: Mayor and City Council
FROM: Heidi Steinmetz, Assistant Director of Economic Development
DATE: June 6, 2005
SUBJECT: Consider Business Development Public Infrastructure Grant
Program Resolution
Attachments
• Greater Minnesota Business Development Infrastructure Grant Program Concept
• Business Development Public Infrastructure Grant Program Resolution
• Background
On April 4, 2005 the City Council adopted a resolution ordering a preliminary feasibility
study for the development of Northstar Business Park (EDA-owned property). The current
development concept for the park includes two large lots (8.75 acres & 12 acres) and seven
smaller lots (1.78 to 3.4 acres). At it's May 9, 2005 meeting, the EDA reviewed the study
and made a recommendation to the City Council to consider platting, staking and
constructing half of the first phase infrastructure improvements for the park. These
improvements would cost approximately$250,000. Completion of the entire first phase
would cost approximately$720,000.
Issue
There is funding available through the Department of Employment and Economic
Development (DEED) to assist with these improvements through the Greater Minnesota
Business Development Infrastructure Grant Program. The purpose of the program is to
assist cities outside of the seven county metro area with complex and costly public
infrastructure projects for industrial parks that would not otherwise occur without public
assistance. Program details include:
• Cities may receive no more than $1,000,000 over a 2-year period.
• Grant applications are accepted on a year-round basis and are awarded on a
first-come, first-serve basis.
• Cities must provide a match of at least 50% of the project capital costs.
•
Consider Business Development Public Infrastructure Grant Program Resolution
June 6,2005 City Council Meeting
Page 2 of 2
• Recommendation
Staff recommends that the City Council consider adopting the attached resolution
authorizing an application to the Business Development Public Infrastructure Grant
Program and certifying that the required local match of 50%is available for the project. The
City's 50%local match would be provided by special assessments.
•
4110
Greater Minnesota Business Development Public Infrastructure Grant Program
Program Concept
g P
PROGRAM GOAL: The Greater MN Business Development Public Infrastructure (BDPI)Grant
Program Goal is to keep or enhance jobs in a particular area,to increase a city's tax base, or to create or
expand new economic development within a city.
BACKGROUND/PURPOSE: The Greater Minnesota Business Development Public Infrastructure
Grant Program was established by the 2002 legislature to assist with complex and costly public
infrastructure development projects for industrial development parks and businesses that might not occur
without public financial assistance. Pursuant to Minnesota Statutes 116J.431,the Minnesota Department
of Employment and Economic Development(DEED)has the authority to award grants to assist cities
with development of eligible public infrastructure costs as defined below.
FUNDING AVAILABILITY: The current legislative appropriation for this program is $10,000,000.
The appropriation can be spent over a five-year period at the discretion of DEED for qualifying projects
in Cities outside of the seven county metropolitan area. Based on the number of eligible applications,
funding availability will be determined solely by DEED.
Within the first two years of the Program, the following breakdown of funding has been mandated by the
Legislature:
• $2,000,000 must be made available to cities with populations of less than 5,000.
• • 20%of the amount available - $2,000,000-must be made available for industrial park
developments.
• $6,000,000 available for remaining eligible projects.
Eligible Applicants: Cities outside of the seven county metropolitan area.
(Hennepin, Ramsey, Dakota, Anoka,Washington, Scott, Carver)
Eligible Activities: DEED may provide up to 50% of the total capital costs to address the need
for publicly owned infrastructure including, but not limited to,wastewater
collection and treatment, drinking water, storm sewers,utility extensions
and streets which support economic development projects including
manufacturing,technology, warehousing and distribution,research and
development, and agricultural processing,which is defined as transforming,
packaging, sorting, or grading livestock or livestock products into goods
that are used for intermediate or final consumption, including goods for
nonfood use, or;
Industrial Park Development that would be used by any business previously
listed.
Ineligible Activities: Retail development and office space development other than incidental
office space. Retail developments are projects whose customers are the end
users of a product or service.
•
1
Greater Minnesota Business Development Public Infrastructure Grant Program
• Type of Funds Available: DEED will provide grants to Cities,on an open application basis,up to 50%
of the total capital costs of public infrastructure necessary for an eligible
economic development project.
Matching Requirement: Cities must provide matching funds equal to or exceeding 50% of the total
project capital costs.
The City receiving the grant must provide for the remainder of the capital
costs of the project, either in cash or in kind. In kind contributions may
include the value of the capital costs of site preparation other than the public
infrastructure needed for the project.
Maximum Award: Maximum award cannot exceed$1,000,000 within a two-year period for
one or more projects.
Application Requirements: Applications will be accepted and awards made until all funds are
committed. DEED will provide notice on their website when all funds are
committed.
Please submit one original and two copies of your application. In addition,
the city must include a resolution of the city council certifying that the
required local match is available and documentation that the project is not
substantially relocating the same operation from another location in the
41) State when applicable;
Timetable For Completion: Projects must be completed within 2 years upon execution of the Funding
Agreement. If the project has not proceeded in a timely manner DEED
reserves the right to cancel the award.
Approving Authority: Minnesota Department of Employment and Economic Development
Program Contacts:
Contact the Business Representative that has been assigned to your region for additional Program
information if necessary.
2
RESOLUTION 05-
•
A RESOLUTION FOR THE CITY OF ELK RIVER
A RESOLUTION AUTHORIZING AN APPLICATION TO THE BUSINESS
DEVELOPMENT PUBLIC INFRASTRUCTURE GRANT PROGRAM AND CERTIFYING
THE AVAILABILITY OF FUNDING FOR 50% OF THE PROJECT COSTS
WHEREAS, that the City of Elk River act as the legal sponsor for project(s) contained in the Business
Development Public Infrastructure Grant Application to be submitted on June 22, 2005 and that the Mayor is
hereby authorized to apply to the Department of Employment and Economic Development for funding of
this project on behalf of the City of Elk River;and
WHEREAS, that the City of Elk River has the legal authority to apply for financial assistance, and the
institutional,managerial, and financial capability to ensure adequate construction, operation,maintenance and
replacement of the proposed project for its design life;and
WHEREAS, that the City of Elk River has not violated any Federal, State, or local laws pertaining to
fraud,bribery,kickbacks, collusion, conflict of interest or other unlawful or corrupt practice; and
WHEREAS, that upon approval of its application by the state, the City of Elk River may enter into an
• agreement with the State of Minnesota for the above-referenced project(s), and that the City of Elk River
certifies that it will comply with all applicable laws and regulations as stated in all contract agreements and
described in the Compliance Section of the Greater Minnesota Business Development Public Infrastructure
Grant.
NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of Elk River that the
Mayor and City Administrator are hereby authorized to execute such agreements, and amendments thereto, as
are necessary to implement the project(s) on behalf of the applicant.
Passed and adopted this 6th day of June 2006.
Stephanie A. Klinzing,Mayor
ATTEST:
Joan M. Schmidt, City Clerk