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EDSR INFORMATION #4 05-08-2000 /4, City of Elk River Q� Strategic Industrial Marketing Plan ,Q ft wQ May 1, 2000 Marketing Committee Meeting Highlights EDA Report Attendees Anita S. Duckor Pat Klaers Jim Barthel Marc Nevinski Chris Carlson Daryl Thompson Gary Santwire Highlights The committee reviewed the first draft of the Strategic Industrial Marketing Plan and suggested several modifications. The committee then began prioritizing various action items within the plan. Top priorities included implementing promotional tactics for the business parks, establishing a client support strategy, and developing the Location Site Process as a core competency. Although an important part of the plan, the committee felt that implementing a public relations strategy should occur only after the plan's • other action items had been implemented. Attachments • Strategic Industrial Marketing Plan —April 24, 2000 Draft • Strategic Industrial Marketing Plan June 2000 Date: April 24, 2000 To: Marketing Committee Jim Barthel Chris Carlson Dr. David Flannery Renee Sandee Gary Santwire Jim Simpson Daryl Thompson Pat Klaers Marc Nevinski Attached is the first draft of the Strategic Industrial Marketing Plan for your review. Please submit your comments and suggestions this week or come Monday,May 1 to discuss. Looking forward to receiving your input! 41) At our Monday meeting, (4:00 to 7:00 PM) we will 1. Discuss the Marketing Positioning 2. Review and approve all strategies 3. Review and approve action plans, and 4. Prioritize action items Once we agree to the strategies and action plan, a budget will be developed. • 1 S Draft — April 24, 2000 Strategic Industrial Marketing Plan 411 June 2000 Marketing Committee Jim Barthel Chris Carlson Dr. David Flannery Renee Sandee Gary Santwire 5 Jim Simpson Daryl Thompson City Staff Pat Klaers Marc Nevinski Consultant Anita S. Duckor Duckor & Associates, Inc. City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together • Table of Contents Vision, Statement of Purpose, Value Proposition Product Offering Product Delivery Process Strategy Market Strategy, Objectives &Positioning Clients' Needs and Wants Competitive Assessment Selling Strategy Client Support and Service Strategy Pricing Positioning Communication Strategy Promotion &Advertising Strategy Public Relations Strategy Key Account Relationship Strategy Strategic Partnership Strategy Challenges and Risks Success Measurements Budget • Appendix Location Site Process A Competitive Assessment B Revised SWOT Analysis C Potential Promotion &Advertising Partners List D Key Account List E • Duckor&Associates, Inc. 1 A BluePrint For Your Success ...Today and Tomorrow April 24, 2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together • Vision To be the light industrial hub for small to medium-size firms in the Northwest Metro 1111111 region. Statement of Purpose The purpose of the Industrial Marketing Plan is to establish a process that (1) Attracts growth-oriented , light industrial businesses which increases and diversifies the tax base, (2) Complements the existing industrial base, and (3) Guides prospective clients through the entire site selection and development process, which builds long-term relationships. Value Proposition For small to medium-sized light industrial clients Who want to locate or expand their firms in a business-friendly community Our City (the Product) which is strategically located between the Metro area and St. Cloud offers the resources, tools and business incentives That meets the client's need to grow Unlike any other community in the northwest metro area Our Product (the city) builds long-term relationships to retain, expand and recruit businesses with professionally and responsive City staff. Duckor&Associates,Inc. 2 A BluePrint For Your Success Today and Tomorrow April 24, 2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together Product Offering The current City of Elk River's industrial composite is: City of Elk River Employment by Industry (SIC) 1999 Industrial Machinery 28% Rubber&Plastic Fabricated Metal 9% 22% Stone,Clay,Glass V�� 15% Electronic Equipment 22% Chemical&Allied Instruments Products 3% 0% Transportation Wood Products Equipment Furniture&Fixtures 0% 1% 0% • City of Elk River Industrial Composition 1999 Industrial Machinery• 16 Stone,Clay,Glass Rubber&Plastic-3 4 uwN Fabricated Metal-2 Chemical&Allied Products-1 Transportation Electronic Equipment-1 Wood Products-1 Equipment 2 Instruments-1 Furniture&Fixtures- 1 • Duckor&Associates, Inc. 3 A BluePrint For Your Success ...Today and Tomorrow April 24, 2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together • City of Elk River Tax Base Composition 1999 Residential 64% Apartments 5% Resorts 0% Seasonal Rec. 0% Industrial Commercial Agriculture 3% 17% 7% Public Utility Personal Property • 3% Railroad 1% 0% The top three businesses by Industry by numbers are Industrial Machinery, Rubber & Plastic, Stone, Clay and Glass. • As noted, Industrial Machinery, Fabricated Metal, Electronic Equipment, Stone, Clay, Glass, and Rubber&Plastic sectors make-up the highest employment by Industry. The marketing effort will build off these established industrial sectors. The City of Elk River offers • light-manufacturing firms available land • a comprehensive financial package • confidential site selection services, and • a strategic location between the Twin Cities metro area and a regional urban area, St. Cloud. • Duckor&Associates,Inc. 4 A BluePrint For Your Success Today and Tomorrow April 24, 2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together . Action • Develop attractive signage for both East and West Business Parks • Enhance parks' image by building trails and central ponds, if feasible • Develop brochure for business parks • Develop City of Elk River fact sheet or brochure Description of City Offering and Services (TBD) Description of statewide, regional and other programs (TBD) • Duckor&Associates, Inc. 5 A BluePrint For Your Success ...Today and Tomorrow April 24, 2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together Product Delivery Process Strategy To provide excellent location site services for light manufacturing firms. The city delivers its product, siting light manufacturing firms, via offering and providing location site services. In order to provide excellent service, everyone involved in the Location Site Process needs to know the process itself, his or her respective roles and responsibilities. It is critical to not only attracting and siting a client but also in meeting or exceeding the client's expectations of the city and building long-term relationships. The Location Site Process includes 8 sub-processes with responsible parties that are: 1. Industrial Marketing Management (Economic Development) 2. Project Account Management (Economic Development) 3. Site Visit (Economic Development and Business Community) 4. Proposal Development (Economic Development/Broker) 5. Financial Package Approval (Finance,Economic Development Authority, City • Council) 6. Site Approval (Site Plan Review Committee, Planning Commission) 7. Building Inspection Approval (Building Department) 8. On-Going Client Relationship (Economic Development) Please note Appendix A for Location Site Process in more detail. Action • Develop roles and responsibilities of process participants • Conduct an inter-department Location Site Process assessment including training on customer service • Assign Economic Development to be the lead in the Location Site Process and be responsible for the client throughout the process • Design and develop proposal prototype (Mass customization) • Select and install a software account management system e.g. ACT or Goldmine • Conduct monthly project meetings to discuss status and issues Duckor &Associates, Inc. 6 A BluePrint For Your Success Today and Tomorrow April 24, 2000 • City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together 411 Market Strategy, Objectives, & Positioning ❑ To establish City of Elk River has the hub for light-manufacturing firms in the northwest metro region of the Twin Cities by year 2003. ❑ To build-out East and West Business Parks with a range of building sizes that meets the City of Elk River's design standards by year 2010. Clients' Needs and Wants The client requirements that drive the site selection are real estate, financial incentives, city services and costs, geographic attributes, labor, housing, education and business network support. Below are the critical client needs that have been identified and confirmed by interviews, field experience and by reviewing the competitors' product offerings. Client Requirements Client Requirements Client Drivers Client Value(Benefits) • Site Needs Need to locate/relocate immediately Ability to locate now • Space Availability • Lease Need to reduce business costs • Build/Own Reduce capital requirements • Purchase Existing Desire to build own building Offers flexibility and ability to customize Facility Needs building • Bulk storage • Warehouse • Light manufacturing with office space Expansion Options Need to expand with business growth Expand at same site without a costly move • Availability • Cost of Suitable Sites Site Needs: • Size of parcel Meet current&future building demands Operate efficiently&cost effectively • Configuration of land cost effectively and predictability. • Type of facility • Environmental factors • Price • Rail spur access Price Need additional$$to reduce upfront Use$$for business results • Free Land investment • Market rate Duckor &Associates, Inc. 7 A BluePrint For Your Success ...Today and Tomorrow April 24, 2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together • Client Requirements Client Drivers Client Value(Benefits) EINANGIAL,Il�ICENTIYES ., . ... Tax Increment Financing(TIF)/Tax Need$$to assist with reducing project Able to use$$for business results Abatement cash flow (Pay as you go) TIF Need up front financing to reduce project Reduces debt service (Upfront/Bonds) cost TIF Land Contribution Reduce upfront costs and provide equity Ability to put more$$into business Loans Gap financing,reduced cost of money Ability to acquire more funds for project CTY.SERV.J:CES voSTS.n.., Low property taxes Reduce business costs Use$$for business results Special Infrastructure Needs: Electric, Special production requirements or Critical inputs and quantities for Gas,Communications,Water&Sewer communication linkages production and running the business Availability,Reliability&Cost Timely and accurate information Need to know information to make a well Avoid wasting time and$$ informed decision Ease of doing business with the city Don't want to waste time or energy on Know that business is wanted and zoning,or other permit issues appreciated in the community GEGGRAPHIGiRf &u, 1. "W '. tigl4 Proximity to St.Cloud Close proximity to second urban center Reduce business costs Access to: Easy and affordable access to vendors, Reduce business costs • Suppliers suppliers,and customers • Support services • Raw materials • Customers • Vendors (Proximity to Metro) Transportation: Need access to major international airport Reduce staff traveling time and • • Highway • Rail for national and international markets transportation costs and transport product more quickly • Air Industry Compatibility Desire to fit in and avoid conflict Be a good neighbor and community partner Labor Force: Number,quality,skill and wage level • Highly skilled Availability Production&Profit • Semi-skilled • Unskilled • Clerical • Professional/Technical • Managerial Education: Need a good education system available Well educated children • K-12 for my employees and my children. Need to continue to train my employees. • Technical training Well trained employees Housing Needs:Current Stock Availability Want to have executive and affordable Choice at all housing levels &Price Levels housing options Institutional Support&Network Need for business formation,support and General business and R&D Support, technology development support Training$,to help my business be successful i Duckor&Associates,Inc. 8 A BluePrint For Your Success ...Today and Tomorrow April 24, 2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together • • The following Alignment Analysis chart outlines how the product offering (the City of Elk River) meets these client requirements. Client Requirements & the City of Elk River Alignment Analysis Client Requirements City of Elk River Value of Attribute REALES Site Needs • Space Availability • West Business Park—120 Acres Advantage • Build/own • East Business Park—40+Acres Advantage • Lease • Generally no lease space available Disadvantage • Purchase Existing • Limited opportunity to purchase existing. Disadvantage Facility Needs • Bulk storage • Warehouse • Light manufacturing with office space • Can build or lease light manufacturing Neutral Expansion Options • Availability • Land available to purchase Advantage • Cost of Suitable Sites • Market rate equal to or less than metro Advantage Site Needs: • Size of parcel • Medium to large lots available (+)for larger co. • configuration of land, • Conducive to most development Advantage • type of facility, • Brick or Concrete construction required (-)smaller co. • • environmental factors • None,all Greenfield Advantage • price • Market rate,less than metro Neutral • Rail spur access • Available in downtown or could construct in East Advantage Business Park. Price • Free land • Write down with TIF or contribute city owned land. Neutral • Available • Market rate EINANCT.tIiL ENTIVES r;, =_ ...,. Tax Increment Financing(TIF)/Tax • Able to provide TIF for 25,000 sf or more and Tax Neutral Abatement(Pay as you go) Abatement for smaller projects TIF • Willing to provide as additional incentive for highly Neutral (Upfront/Bonds) desirable development. TIF Land Contribution • Available in East Business Park and small parcel in Neutral West Business Park. Loans • Available Advantage • Duckor&Associates, Inc. 9 A Blueprint For Your Success ...Today and Tomorrow April 24,2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together • Client Requirements City of Elk River Value of Attribute CITY°SERVICES AND.COSTS ..' Low property taxes • Below average of 129.332 Advantage -Elk River 1999=121.130 2000=119.362 Special Infrastructure Needs: Electric, • All infrastructure in place and able to provide needed Advantage Gas,Communications,Water&Sewer capacity in most cases Availability,Reliability&Cost Timely and accurate information • Need to improve location site process Working to establish location site process. Ease of doing business with city • Need to improve location site process Working to establish location site process. GEOGR TAJC ATTRIBUTES Proximity to St.Cloud • 40 minutes on Hwy 10 Advantage Access to: • Suppliers • Hwy 169,101,and 10 plus the proximity of I-94 offers Advantage • Support services easy access to customers,suppliers and services. • Raw materials • Customers • Vendors (Proximity to Metro) Transportation: • Highway • • Rail Hwy 169,101,10&close proximity to I-94 Advantage • BNSF main line spur b/w Jackson and Proctor Ayes. Advantage • Possibility in E.Bus.Park • Air • No local air strip Disadvantage Industry Compatibility • Desire light industrial Advantage Labor Force: Number,quality,skill and wage level • Highly skilled • Draw from NW metro and out-state(i.e.Princeton& Neutral • Semi-skilled Milaca)labor pool. • Unskilled • Clerical • Professional/Technical • Managerial EI'. CATIG.NI.iIIO17W(GIBUSINESS N WOR c :,„ .: Education: • K-12 • Technical training • 98%graduation rate—1999 Neutral • 24%go on to 2 year college • 28%go on to 4 year college • Student:Teacher=16:1 • Student:Computer=12.5:1 Neutral • Anoka-Hennepin Tech College Housing Needs: Current Stock Availability • TBD TBD Price Levels • Institutional Support&Network Average existing Sale Price 1989=$139K Neutral • Minnesota Technology,Inc. Neutral • Minnesota Project Innovations • DTED Programs • Others-TBD • Duckor&Associates, Inc. 10 A BluePrint For Your Success Today and Tomorrow April 24,2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together 410 Competitive Assessment After collecting and reviewing information on the competition, six current key competitors were identified, Anoka-Ramsey, Rogers-Hassen Township, Big Lake, Becker, Monticello and Albertville. Andover, Dayton and Otsego were identified as potential competitors in the future. Please note Appendix B for the Competitive Assessment and Appendix C for the SWOT Analysis. Marketing Positioning City of Elk River's marketing positioning can be one of strength because of its • Desire and commitment to attract light-manufacturing firms • Free land and competitive financial package • Location between the northwest region of the Twin Cities and the urban center St. Cloud, and • Community with full city services and amenities The marketing position will only be achieved with the understanding that resources are • dedicated long-term and there is proactive patience for the type of light manufacturing firms the city truly desires. Selling Strategy To build off the current industrial base of the City of Elk River. Action • Develop relationships with other lead generator organizations e.g. Department of Trade and Economic Development, Advantage Minnesota, key brokers and developers • Target the following Standard Industrial Classification sectors: Industrial Machinery, Fabricated Metal, Electronic Equipment • Target the above sectors vendors and suppliers 411 Duckor&Associates, Inc. 11 A BluePrint For Your Success ...Today and Tomorrow April 24,2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together • el° Client Support and Service Strategy The City of Elk River will surround the client with service. Action To meet the Timely and accurate information and Ease of doing business with the City client requirements, the city needs to do the following: • Develop Location Site services as a core competency • Develop a"How to do Business with the City of Elk River" guide • Provide easy to read, client friendly, and concise information materials Pricing Positioning The City of Elk River's offering of free land including the financial package that reflects a good-value and competitively priced product. Action • Hire Economic Development financial consultant to negotiate and package critical projects • Revise Tax Increment Financing Policy and Application, Micro Loan Fund Policies and Application, and Tax Rebate Financing Policy and Application forms to be consistent with new communication design and format Duckor&Associates,Inc. 12 A BluePrint For Your Success Today and Tomorrow April 24, 2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together • Communication Strategy To increase awareness by light-manufacturing firms in the Twin Cities and St. Cloud of the value and benefits of the City of Elk River's industrial site offerings. Action ■ A communication strategy needs to be developed and launched to ensure key messages, language and terms are used consistently through-out all communication materials and mediums including proposals, brochures, direct mail, Web site, advertisements, and other promotional materials. • A core tag line like "City of Elk River, the light industrial hub in the northwest metro region" should be used in all written materials. To help position the City, the same core messages to be used consistently, for example the City of Elk River's Economic Department : • Helps you confidentially with your siting needs • • Provides timely information for all parties • Provides a seamless siting process • Select at least three colors in a chosen color palette to be used in all materials. Select one type of font for all written materials for consistency and branding. • Continue to use the "Elk" image. Duckor&Associates, Inc. 13 A BluePrint For Your Success ...Today and Tomorrow April 24,2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together • Promotion'& Advertising Strategy To promote that the City is "Open For Business" and generate leads for the East and West business parks. Action • Use several advertising mediums: • Web Site • Direct mail campaign • Advertisements in key trade journals • Sponsorships and attendance at key trade shows and conferences • Plan and conduct Events • Ground breaking and openings of new businesses • Chamber of Commerce and current businesses to sponsor a City of Elk River Golf Outing in 2002 • Identify co-sponsors for promotion and advertising efforts. See Appendix D for potential partner list. (Insert Advertising Placement and Schedule Chart TBD) (Insert Trade Shows and Conferences Chart TBD) • Duckor&Associates,Inc. 14 A BluePrint For Your Success Today and Tomorrow April 24, 2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together • Public Relations Strategy To create awareness that the City of Elk River is a business-friendly community for light manufacturing firms. Action • A public relations strategy will be developed and implemented in year one to create an awareness of the City of Elk River and to support long-term indirect selling of the business parks • Hire a public relations writer to develop at least three different themes: • Highlighting economic development • Highlighting successful local businesses • History and future of Elk River as it relates to business Key Account Relationship Strategy To establish the City of Elk River as the place to site a light-manufacturing firm with key influencer, leaders and providers in the Economic Development field. Action • To be the light-manufacturing hub for the northwest metro region, the city needs to establish and implement an outreach strategy. • Establish and maintain key account relationships to help: • Inform the key influencers that the City is "Open For Business" • Promote the benefits of siting a business in Elk River, and • Enhance the city's credibility that it's a player in the economic development field. The key account relationships are state organizations, regional and local economic development organizations, business organizations, state and local trade associations, key developers and brokers, location site consultants, venture capital firms, and banks. (Please note Appendix E for list. TBD) • Duckor&Associates,Inc. 15 A BluePrint For Your Success ...Today and Tomorrow April 24,2000 S of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together i Strategic Partnership Strategy To support long-term Economic Development in the area, strategic partnerships are critical, including the following types of partners: Strategic Partnership Local Businesses The City Brokers/ Education/ Strategy Developers Business Network Make E.Hwy 10& ✓ ✓ Central Business District more attractive Provide Training& ▪ Anoka-Ramsey Education Community College • Anoka-Ramsey Technical College • MN Workforce Center • Manufacturers Alliance Provide technology ▪ MN Technology, support Inc. • MN Project Innovation, • MN Project Outreach Provide business and V ▪ Anoka Sherburne financial resources County Capital Fund • Anoka SCORE Office • Initiative Fund of South central MN • Dept.of Trade and Economic Development Assist in Workforce ▪ Ramsey Co Job Development Training • School-to-Work Steams—Benton Counties Promote all levels of ✓ ✓ housing Promote Light Rail ✓ ▪ North Metro Mayors Assoc. • Northstar Corridor Authority Promote a coordinated V ▪ Highway 10 Hwy 10 corridor plan Improvement Committee Duckor&Associates, Inc. 16 A BluePrint For Your Success Today and Tomorrow April 24, 2000 City of Elk River Strategic Industrial Marketing Plan Elk River...Where city and country flow together • Challenges and Risks Economic Environment It can be expected that the region will have slow-to-moderate business growth. Thus, the plan needs to builds on the current industrial base, and business owners currently located in the Twin Cities that desire a location closer to "Up North" with all the city amenities. The regional economy appears to be growing relatively well compared to its northern competitors. However, there is concern that the region is not achieving its share of the new high-tech economy. This is evidenced by • Minnesota's share of the nation's venture capital investment dropping by 50 percent since 1995 • local high-tech firms performing poorly, growing at 50 percent of those in Colorado and Massachusetts and only by 25 percent of their counterparts in California and Texas and, • Minnesota currently ranks 28th in public stock offerings and 34th in new company growth as stated in the Star Tribune article, "Hollow Minnesota, coming too late to the new economy." Also, in the past the regional economy significantly benefited from the spin-off companies that evolved from companies like Control Data Corporation and Cray Research. Minnesota continues to see headquartered companies like Honeywell and Norwest depart which also impacts the number of new business spin-offs. Business growth is constrained by the full-employment situation and that there is no in- migration employment. With these unprecedented unemployment rates, employers are having difficulty finding and keeping quality workers. • Duckor&Associates, Inc. 17 A BluePrint For Your Success ...Today and Tomorrow April 24,2000 City of Elk River Strategic Industrial Marketing Plan Elkn River...Where city and country flow together • In the short term, Anoka-Ramsey is the most serious competitor of the Highway 10 corridor, which includes City of Elk River, Big Lake, and Becker. In the competitive 94- corridor which includes the City of Rogers, Albertville and Monticello, the most critical competitor is the City of Rogers. Long-term competition will most likely come from Otsego and possibly Dayton. It will be necessary to monitor the competition once the City of Elk River launches its plan. It just may motivate the others to become more competitive in the area. Perseverance & Patience Location site decision timeframe ranges from three to twenty-four months. The build-out timeframe for both West and East Business Parks is estimated to be at least ten years. It is important that the City, City Council, Economic Development Authority DID Competitio and community understand the ❑ need to maximize the asset value of these parks ❑ timing of the build-out, and ❑ need to be patient to selectively, attract high growth, light manufacturing businesses. The City of Elk River is well positioned to be the Northwest metropolitan region's hub for light industrial businesses and capture its share of the business growth. If, and only if, the city implements and manages the plan and is proactively patient for the type of manufacturing growth that will yield the greatest economic multiplier effect on its local economy. Success Measurements (TBD) • #of clients sited • Client satisfaction • Private capital invested Budget (TBD) Duckor&Associates, Inc. 18 A BluePrint For Your Success Today and Tomorrow April 24, 2000