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5.0. EDSR 05-12-2003 ITEM # 5. • City of Elk -�-� River MEMORANDUM TO: Economic Development Authority FROM: Heidi Hall, Economic Development Assistant -VW- DATE: May 12, 2003 SUBJECT: Strategic Industrial Marketing Activities Update Attachments • Key Account Program 2002-2003 Schedule • Elk River Ad Featuring Cymbet,MN Real Estate Journal,April 28, 2003 • "Its Cells May Be Thin, But Cymbet Says They Pack a Big Punch", Small Times,April 28, 2003 • • Downtown Revitalization Q &A Newsletter, May 2003 • Business Retention&Expansion 2003-2004 Schedule Report I. Product Offering Strategy The Director of Economic Development has provided a separate report regarding this issue. I I. Competitive Strategy The Marketing Committee discussed the cities of Big Lake,Anoka, and Rogers at their May 6, 2003 meeting. I I I. Key Account/Lead Generation Strategy Please see the attached key account schedule. IV. Promotions &Advertising Strategy Inquiries Incubator prospects, Intellanet and Manage the Farm,presented to the Incubator Advisory Committee on April 7, 2003. The Advisory Committee recommended the EDA consider admittance of both companies to the Incubator Program with the provision that staff negotiate an acceptable rent structure for both companies. Currently,both companies wish to present to the Elk River Investment Club before moving forward in the process for entry into the Incubator Program. • Strategic Industrial Marketing Activities Update May 12,2003 Page 2 of 3 • 2003 Ad Campaign Please see the attached Elk River ad featuring Cymbet,which appeared in the April 28th issue of the MN Real Estate Journal. In addition, Cymbet was featured in the attached article from Small Times magazine. V. Public Relations Strategy Economic Development Newsletter In mid-May, the second edition of the City of Elk River Economic Development Newsletter will be distributed to the same 200 people in the following targeted groups: • Elk River manufacturers • High-tech companies located in Anoka, Sherburne, and Wright Counties • Prospects/inquiries • Key accounts • Local developers,realtors, etc. The purpose is to inform businesses of information useful to their operations and present an "open for business"image. MN Technology Partnership The Economic Development Assistant has provided a separate report regarding this issue. • VI. Strategic Partnership Strategy Downtown Revitalization Project Please see the attached May 2003 Downtown Revitalization Q &A Newsletter,which provides and update on project activities. Leadership Elk River Staff presented on the goals and activities of the Economic Development Department to the Chamber's Leadership Elk River group in late April. The group had several concerns and questions regarding the availability of industrial land and prices in the City of Elk River. VII. Business Retention Strategy Business Retention Program In late April, a business retention and expansion (BRE) visit was held with Jim Barthel of Elk River Machine Company (see attached schedule report). EDA commissioners Gongoll and Kuester attended the visit along with staff. It was suggested at the April EDA meeting that EDA Commissioners attending BRE visits provide a brief verbal report of issues that were discussed during the visits. Eastey Enterprises, Inc. Relocation Staff has become aware that Eastey Enterprises, Inc. will be relocating to the City of Rogers, where the company's main office is located. Eastey occupies 15,000 SF in Elk River and has approximately sixteen employees. Recent contact with the company indicated the following reasons for the move: • Ability to remodel and expand in current Rogers location Strategic Industrial Marketing Activities Update May 12,2003 Page 3 of 3 • • Land prices too high three years ago when company inquired to build with Elk River Business Park representatives Staff conducted Business Retention and Expansion visits with Eastey in 1999 and 2002. The company did not mention the above experience during either visit. In 2002, the company indicated that they planned to remain in their current facility for the next five years. 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U O 3 O O Small Times: News about MEMS, Nanotechnology and Microsystems Page 1 of 4 NANOBUSINESS 2003. 1 `i Sln�« L'Aa DWEF INC3 THE NAV�:'_L'H RCVOLLJ'TION • 614 Mt WS iM Syr.,. rr4om THE LAnO14ATr1PY TO THE EIOAi7DROOM. Article URL: http://www.smalltimes.com/document_display.cfm?document_id=5911 Its cells may be thin, but Cymbet says they pack a big punch By James R. Dukart Small Times Correspondent April 28, 2003 - Small tech engineers are constantly challenged in their quest to come up with adequate batteries or power supplies for products. Cymbet Corp. of Elk River, Minn., says it has the solution. The three- year-old company manufactures thin-film rechargeable batteries that can be made at thicknesses as low as 5 to 25 microns. Using patented Mark Jenson, Cymbet's low-temperature manufacturing processes, Cymbet's thin-film cells can president and founder be incorporated into any chip design or manufactured directly onto almost any surface, atomically bonded to flexible or rigid substrates - Vital facts about pasted onto the lid of an integrated circuit, for instance, layered onto a Cymbet Corp. printed circuit board or manufactured directly into the casing or shell of any product. Cymbet says its cells are manufactured to last the full life cycle of any product, with the ability to recharge up to 70,000 times using a variety of power sources, from inductive current to radio frequency or solar power. Initial markets include semiconductor manufacturers, medical device companies and producers of microelectronic or nanoscale „ . ,° ,, components and sensors. Bill Priesmeyer, Cymbet's chief executive, listed radio-frequency ID prototype Cymbet's thin-film i cell prototype is built directly on tags, active smart cards and MEMS devices as early commercial a flexible substrate. applications, adding that in the longer term consumer devices from wireless headsets to hearing aids are ripe for thin-film battery cells. "This is an enabling technology for new applications," Priesmeyer said. "It allows batteries to be directly incorporated into any product." The company uses thin-film power supply technology developed over the past 12 years by the Oak Ridge National Laboratory. It has licensed 15 patents and has another 11 internal patents to cover its cold-temperature fabrication processes. Cymbet said it has signed a two-year agreement with Minneapolis-based Medtronic Inc. to test the use of its thin-film cells in implantable medical devices, and is working with a large semiconductor manufacturer. Bob Schneider, advanced technology marketing director for microelectronics manufacturer NVE Corp,, is eager to see whether Cymbet's thin-film technology will work with his devices. "The smaller and less power consumption it takes, the better," Schneider said. "The power-on-a-chip business they are pursuing is the Holy Grail." Cymbet is also a member of the Smart Active Labels (SAL) Consortium. SAL spokesman Bruce Rogers said technology such as Cymbet's has almost unlimited possibilities. • "The potential is huge enough for the technology to be pervasive," Rogers said. "It will be used for tracking inventories through a supply chain. In medical applications it can used to monitor http://www.smalltimes.com/print_doc.cfm?doc_id=5911 4/30/2003 Small Times: News about MEMS, Nanotechnology and Microsystems Page 2 of 4 patients as they move around from place to place." Making the power supply small enough to fit • on a label or wristband, Rogers added, removes many of the limitations faced with current tracking technology. Cymbet was founded in January 2000 by Mark Jenson, creator of the company's patented fabrication processes, and Harlan Jacobs, president of Minneapolis-based high-tech incubator Genesis Business Centers Ltd. In May 2001 it received $4.5 million from two international venture capital firms, one of which is the Millennium Materials Technologies Fund (MMTF), whose backers include large international investors such as Bayer AG, The Boeing Co. and Siemens AG. "They have several key technologies and patents on how to produce the batteries at low temperature, so you can put them directly on the wafer or polymer without heating it," said Oren Gafri, senior partner at MMTF. "That is really unique and on the cutting edge. "Mark Jenson came to us and asked if we were into batteries that were rechargeable and much thinner than anything out there now. Of course we jumped on it. We came to the conclusion that Cymbet has breakthrough technology." Company file: Cymbet Corp. (last updated April 28, 2003) Company Cymbet Corp. Headquarters 18326 Joplin Street NW Elk River, Minn., 55330-1773 History Founders Mark Jensons and Harlan Jacobs created Cymbet in January 2000 based on 12 years of research at Oak Ridge National Laboratory. It previously functioned under the name Integrated Power Solutions and was a tenant of the Elk River Business Incubator. Industry Power supplies Employees 19 Small tech-related products and services Cymbet is developing and manufacturing a thin film-based solid state lithium ion rechargeable battery. The company's manufacturing technology allows batteries to directly bond to substrates ranging from ceramics to plastics, and function in sizes down to the microscopic level (5 - 25 microns). These new battery miniaturization techniques will help MEMS engineers balance the challenges of sufficient power and minimal invasiveness. Selected markets for Cymbet's technology include: semiconductors, medical devices, MEMS/nano-based components and II) sensors, security and wireless communications. Management http://www.smalltimes.com/print_doc.cfm?doc_id=5911 4/30/2003 Small Times: News about MEMS, Nanotechnology and Microsystems Page 3 of 4 • Bill Priesmeyer: chief executive officer • • Mark Jenson: founder and president • James Sullivan: vice president of sales and marketing • Brian Shiffman: vice president of business development Selected strategic partners and customers Cymbet has made a two-year arrangement with Medtronic Inc. to test its batteries in Medtronic's implantable medical devices. Investment history Cymbet received $4.5 million in first-round funding in spring 2001. Participants included Merchant Venture Investments and Millennium Materials Technologies Fund. The same two firms provided $1 million in bridge funding in fall 2002. The company is now seeking $10 million in additional financing. Barriers to market Cymbet must bring its product to market quickly, offer an affordable price point and grow its manufacturing processes, all while watching out for other players in what will ultimately be an enormous market. Partnerships with larger firms, including original equipment manufacturers, may be a key to taking the lead. Selected competitors • Excellatron • Front Edge Technology . • Infinite Power Solutions Goals "To be the first to enter the commercial market with a solid state battery that can be built on a wide variety of possible substrates, including plastics, semiconductors and other materials having a wide range of product characteristics," said Mark Jacobs, Cymbet president and co- founder. Why they're in small tech "Coming from a semiconductor background, my heritage is small tech," Jacobs said. "When I first became interested in the solid state battery technology at Oak Ridge National Labs, the interest was from the perspective of, 'What could I do with this if I could put it directly on a semiconductor device.' From there the idea has grown to include sensors, MEMS and micro- implantables." What keeps them up at night "I am surrounded by a very gifted management and technical team so many of the nightmares common to entrepreneurs are being suffered by those around me," Jacobs said. "Personally I am most concerned about making sure that our time to market is as fast as possible and that the market entry point is one that will allow Cymbet to develop reasonable revenue and reach a mature manufacturing capability without immediate significant price pressure." Contact • URL: www.cymbet.com • . Phone: 763-633-1780 • Fax: 763-633-1799 • E-mail: info@cymbet.com http://www.smalltimes.com/print_doc.cfm?doc_id=5911 4/30/2003 Vcto ti &eth04 !i1iQ&A RI.• � MAY 2003 Ve r "^ s Enhancing Downtown Elk River's Role 1 p `` As a Vital Retail,Commercial and Residential Area. Q.What is the latest on the Downtown Q. Do we know at this point what is going to Revitalization project? happen to the existing businesses in the A. The Elk River Housing & Redevelopment Authority(HRA) has redevelopment area? extended its preliminary development agreement with A. Typically in redevelopment projects, some businesses choose MetroPlains an additional six months to give the developer to stay and some choose to relocate. The developer will work more time to work out project details. Typically, the preliminary with downtown business owners within the project area to development agreement phase is a time when the developer identify how they could be incorporated into any plans for revi- works with the City to identify and work through issues such as talization and redevelopment. For those that do not stay, financial and market feasibility, project arrangements for acquisition and for relo- timing, and refinement of a site plan. cation assistance will be offered. Once the tasks in this phase are com- This Q&A newsletter pleted, cities enter a final developmentresponds to some Q.When is acquisition of agreement with the developer. That isproperties likely to occur? when the planning and zoning of the recent questions A. It is too early to tell exactly when acqui- approvals and acquisition and con- ' - ahQut Elk River's sition would occur. Currently, MetroPlains is 40 struction will occur. working on market and financial feasibility, downtown revitalization site acquisition details, along with revising Q.Why did MetroPlains needand redevelopment. the project concept. Final acquisition would an extension? not occur until after MetroPlains and the A. Typical redevelopment projects can HRA have signed a final development take six to 24 months to work through issues. For a redevelop- agreement and that will not occur for at least six months. ment project to work, it must not only meet community goals, but also make sense from both a market and financial per- Q. If my business or home must be relocated, spective. Currently, MetroPlains is working on the market and will I receive financial assistance? financial feasibility of the project, as well as refining the rede- A. Yes. Businesses and residents that must relocate are provided velopment concept. Redevelopment is a complex process relocation assistance to help assist with moving costs, as and the extension gives MetroPlains the time to thoroughly required under the Uniform Relocation Assistance Act. Also, work through and pull together the various elements of the properties that are purchased for redevelopment must be pur- project. chased at fair market value.That value is determined by a professional appraisal. Q. How does this extension impact the time frame for the project? Q.Are the tax increment financing (TIF) inspections A. If all the work of the preliminary development phase is com- of downtown properties completed yet? pleted within six months,the project can then move to the final A. Yes, the TIF inspections for the redevelopment area have been development phase. The final development agreement phase completed. The City is in the process of establishing a TIF is the time during which activities such as planning and zon- District for downtown that will encompass the Downtown ing approvals, acquisition and construction occur. As a result, Revitalization area and extend beyond it. Developing a TIF the earliest construction could begin would be sometime in District will enable the City to use TIF funding if it is needed for 2004. the project. Q. Is it true that MetroPlains has been meeting Q. My property was inspected. Does that mean likwith property owners in the revitalization area? I am a part of the redevelopment project? _ . Yes, MetroPlains has been making initial contacts with proper- A. No, the TIF District will be larger than this redevelopment proj- ty owners through Ken Brooks of KJB Real Estate Services. ect. The HRA is now in the process of determining the bound- aries of the TIF district. CITY OF ELK RIVER DOWNTOWN REVITALIZATION O&A NEWSLETTER MAY 2003 Q. Exactly how will this project be funded and concept in the form of a preliminary site plan to the HRA, will it impact my property taxes? there will be an open house for the public. The Open IP A. The project will be funded primarily through land payments House would likely occur sometime in June. by the developer and probably by tax increment finance. The exact funding structure has not yet been determined. Q. Will the redevelopment address the traditional character of downtown? Q. What is TIF? A. Yes, MetroPlains has been directed to capitalize on the A. Tax increment financing is a tool created by the traditional character of downtown while at the same time Minnesota Legislature in the mid-1970s to help encour- looking into the future. age development and redevelopment. Under TIF, proper- ty tax revenue equivalent to what the current property Q.Why is the City pursuing redevelopment generates continues to go to all taxing jurisdictions. A revitalization of downtown? portion of the tax revenue that results from the increased A. For more than 30 years studies have emphasized the need value of the new development, also called the "tax incre- to better utilize the riverfront, capitalize on the traditional ment," goes to pay site costs such as acquisition, demoli- character of downtown, and ensure safe pedestrian and tion, water, sewer, utility, and street improvements. Once vehicle movement. Investment in downtown has stagnated the site costs have been paid, the tax increment goes to and the riverfront is underutilized. The revitalization will the taxing jurisdictions. enhance downtown Elk River's role as a retail, commercial, and residential area and revitalize the investment made in Q. Is this redevelopment a "sure thing"? the downtown business district. A. No. Redevelopment is complex. A redevelopment project must meet the goals of the community and pass the test of Q. How can I stay informed? both market and financial feasibility. In the preliminary A. Copies of this and future newsletters will be provided at development phase, the developer is still working through City Hall, the Chamber of Commerce and Elk River these issues. Municipal Utilities. In addition, information will be pro- vided in the Elk River Star News and on ERTV Channel Q.Will there be another Open House for 12, and the city website at www.ci.elk-river.mn.us. If you the public to comment on the revised have questions about the revitalization process, please . redevelopment concept? feel free to contact Economic Development Director A. Yes, after MetroPlains brings a revised redevelopment Cathy Mehelich at (764) 441-7420. ./i L1Lh, , City of Elk _ River 13065 Orono Parkway, Box 490 Elk River, MN 55330 • co• ,..n iat n O d N a) -o M M9M O � +' en" en cfW .. O \ + '., O . ,ObC N ,V b.0 ! i+ cti O • M 4d '' 71- at q r .� 3 .L . O cd N N U cd ON \ O •,. 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