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5.0. 5.0. 6.0. 7.0. 8.0. 9.0. EDSR 11-08-1999 Ah ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY IIP MEMORANDUM TO: Economic Development Authority FROM: Paul T. Steinman, Director of Economic c ,_,,, Development DATE: November 4, 1999 SUBJECT: Agenda Memo for November 8, 1999, EDA Meeting 5. Presentation Jack Mowry, Metal Craft Machine & Engineering As you are aware, the economic development budget includes purchasing various advertisements throughout the year in City 40 Business, Minnesota Real Estate Journal, and Ventures magazines. Earlier this year, staff designed some congratulatory advertisements for manufacturing companies that have done something significant in the area of job/tax creation over the past year. One of these most recent ads featured Metal Craft Machine and the expansion project that Jack Mowry had completed last year in the McChesney Industrial Park. The ad simply displayed a picture of the newly expanded building and included narrative congratulating Metal Craft Machine on its continued growth in a newly expanded facility. A copy of this ad is attached. Staff felt it would be appropriate to have the ad framed and presented to Jack Mowry at the November 8, 1999, EDA meeting. Staff proposes to have a similar presentation to Bryan Jones, Supermats, Inc. at the December EDA meeting. 6. Business Retention and Expansion Survey Report Presentation See attached memo and information from Assistant Director of Economic Development Marc Nevinski. III 13065 Orono Parkway • P. O. Box 490 • Elk River, MN 55330-1743 • (612) 441-7420 •Fax (612) 441-7425 Equal Opportunity Housing and Equal Opportunity Employment EDA Agenda Memo November 8, 1999, Meeting Page 2 i 7. Consider Establishment of a Marketing Committee and Discussion of Marketing Consultant Proposals Issue Staff has been working for the past several months on the issue of putting together an industrial marketing plan, as a high priority issue identified within the modified strategic plan. Staff has had numerous meetings with individuals regarding this issue and is now proposing the following direction/process: • EDA to form 5-7 member marketing committee — November 1999 • Marketing committee to meet and interview potential consultants — December 1999 • Marketing committee to make recommendation to EDA on hiring consulting services —January 2000 • Work with consultant and marketing committee to develop plan —February through June 2000 • • Implement plan —June 2000 —June 2003 The first step in this process is for the EDA to establish a marketing committee. Staff and EDA President Pat Dwyer have compiled the following list of names and calls have been made to these individuals to ask if they would be willing to commit to several months of work on a marketing committee. What follows is a list of these individuals and their response: • Jim Barthel, Elk River Machine —interested • Daryl Thompson, EDA representative —interested • Chris Carlson, Sportech, Inc. —interested • Gary Santwire, Realtor—interested • Renee Sande, Chamber VP —interested Staff feels there is room to add no more than two additional members to this committee. It is appropriate for the EDA to suggest additional people for staff to contact regarding their potential interest. Attached to this memo are two proposals that have been received by economic development marketing consultants. The purpose for • attachment of these proposals is for the EDA to review and offer comments/questions to staff at this meeting. The EDA would be conducting a preliminary review of the attached proposals and is not being asked to make a decision at this time. Staff proposes that the EDA Agenda Memo November 8, 1999,Meeting Page 3 IDmarketing committee be asked to review the attached proposals, interview the consultants, and make a recommendation to the EDA regarding the hiring of one of the two interested individuals. Staff had initially wished to make a recommendation to the EDA to hire one of the two consultants. Staff did not feel in a position to make such a recommendation at this time, but would rather seek the input of the marketing committee on this issue prior to making a final recommendation. After all, the marketing committee will likely be working as closely with this individual as staff will over the next four to six months. As you review the attached proposals, it may appear easy to make a selection based solely upon cost of service. One has indicated a fee of $6,000 and the other a fee of$12,500. After having a couple of meetings with these individuals it is evident however, that there is a contrast between the two individuals and the level of service that they would provide. It is anticipated that the EDA budget would be able to absorb the more . expensive proposal should that individual be recommended to work with the EDA on the marketing plan. The year 2000 budget regarding professional services and advertising/marketing is as follows: • Marketing Plan Consultant $ 5,000 • Community Venture Network Membership $ 4,000 • Advertisements $17,000 • Major Marketing Event $ 7,000 • Other Marketing $ 5,000 It is likely safe to assume that a major marketing event ($7,000) will not be accomplished in the year 2000 as development of the marketing plan will not have been completed by at least June 2000. Elimination of this activity would free up an additional $7,000 for use toward consulting services if the EDA so chooses. There has also been some discussion of discontinuing the EDA membership in Community Venture Network in 2000, which would free up an additional $4,000. It should be noted that one of our local utility companies has expressed an interest in helping to fund a portion of development or implementation of an industrial marketing strategy. This could be a source of funds, however, staff feels it would be most appropriate to • invite this type of financial participation in the implementation of the plan rather than for consulting services. EDA Agenda Memo November 8, 1999,Meeting Page 4 • Recommendation Staff recommends the EDA approve the formation of a marketing committee to include the following individuals: • Jim Barthel • Daryl Thompson • Chris Carlson • Gary Santwire • Renee Sande • (vacancy) • (vacancy) and that the EDA direct the marketing committee to interview the two interested consultants and propose a recommended selection to the EDA at the January 2000, meeting. 8. Consider Riverside Manufacturing Micro Loan 110 Please see attached memo and information from Assistant Director of Economic Development Marc Nevinski. 9. Consider 2000-2003 Economic Development Strategic Plan Attached for your review is the final modified Economic Development Strategic Plan. Recommendation Staff recommends the EDA approve the 2000-2003 modified Economic Development Strategic Plan as attached. • ITEM 5. • 1 • � ,4,, d��� `er +� � � � ... � '.w , .rf , s « �� .4...... ��� �+ �a •*,.54 e :w i ; °1 w :, 'x1 - q y 'te } t _ IF af P'')---'':-:,.-.--' -/ irA. 9 y i � f�} A.z! .-r+. a ■ a ,-(7,s,,,-". ,,,-r. '^"' x s 7 . T+` C:p +..�r•- .1,-*,..,,.msS .F.':' ,{,�� :,;',i-'"""Tr.,'-'-'! > a ..7 .a fS r d .4 'a -' L, `i '�; r 0. •# rz:;.;...4-,`,.:i'-'"'...i, ' E ▪ r X '' ? tix fis y x, x . �'7 * "* -r ',Vol', 4r ti 401N.,u4 °04� 4. '` `▪ '''^-*.''''"'-'*-'*-"*. Ai. ';q .t;`c" 1 k,"-'7'7'. 1 i� ,f" +3, The City of Elk River Congratulates MIrv.; Metal Craft tverside Machine&Engineering Machine&Engineering.Inc. on their continuedgrowth n a newly expanded facility. , /, ---\.( CityElk River 13065 Orono Parkway,Elk River,MN 55330 (612)441-7420 • Fax: (612)441-7425 • devdirector@ci.elk-rivermn.us ITEM 6. ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY I • MEMORANDUM TO: Economic Development Authority FROM: ` Marc Nevinski, Assistant Director of Economic Development DATE: November 8, 1999 SUBJECT: Business Retention& Expansion Survey Issue The business retention and expansion survey conducted this summer has been completed and a final report of the survey is attached to this memo. Staff will summarize the report and answer questions at the EDA meeting. Overview In June of this year staff began the process of interviewing Elk River's industrial business owners and mangers to learn about their experiences in this strong economy with a tight labor market. Additionally, input into Elk River's business NDdevelopment policies and each company's future business plans was sought. Some of the more interesting facts of the survey are summarized below. • Twenty six of approximately thirty businesses were interviewed over a three month period. • Average hourly wage paid by Elk River industrial firms: $11.54 • Average number of employees at Elk River industrial firms: 40 • Primary Elk River asset: Proximity to metro • Overall, Elk River's industrial businesses are in a slow and steady growth mode, with about one-third planning to expand in the next five years. • Nearly all have been affected in some way by the tight labor market, but several have found innovative ways of mitigating their problems. • Unskilled workers are the most difficult group to recruit and train. • Business owners were generally in favor of increased industrial development but encouraged the city to foster growth among its existing firms. Attachments 1999 Business Retention and Expansion Report 1111 13065 Orono Parkway• P. O. Box 490 • Elk River, MN 55330-1743 • (612) 441-7420 • Fax (612) 441-74.25 EqualOpportunity Housing and Equal Opportunity Employment I . CITY OF ELK RIVER 1999 BUSINESS RETENTION & EXPANSION SURVEY SUMMARY & REPORT Marc Nevinski Assistant Director of Economic Development September 1999 • I • Table of Contents Introduction 3 Methodology 3 Findings 3 Market Data 3 Labor Markets 5 Business Climate 6 Recommendations 7 Appendix A- Survey form 8 411. II) 2 io • INTRODUCTION An important strategy in growing and developing a community's industrial base is to promote the retention and encourage the growth of its existing industries. Growing already established businesses is more cost effective than attracting new firms to the community and it creates a pro-business environment that attracts additional investment to the area. A business retention and expansion survey (BRE) can help a community to better understand its local economy and guide it in developing policies and strategies that promote both private and public investment. METHODOLOGY From June through August staff conducted on-site interviews with twenty six of approximately thirty of Elk River's local industrial business owners and officers. Interviews were often supplemented by a tour of the facility. To provide relatively consistent data throughout the survey, interviews were conducted using a questionnaire. Although the survey attempted to generate quantitative data, the diverse nature of the city's industrial companies requires that much of the information be gathered in a qualitative format. With a baseline survey established, perhaps a more quantitative approach can be developed for future surveys. Three primary types of information were sought in the survey. First, the survey requested information on industry trends and experiences of customers and suppliers in sothe marketplace. Such information provides insight into the various industries and may provide indicators of future struggles or growth. Secondly, several questions were asked regarding the company's employment levels and its experiences in the tight labor market. The low unemployment rate is a relatively new phenomenon to the private and public sectors, and understanding how it impacts Elk River's local economy is a critical component to economic development. Finally, respondents were asked to comment on the impact of the city's policies, assets, and location on business development in the area. Such insight should help the city better identify its strengths and weaknesses with regard to community development. FINDINGS I. MARKET DATA Industries and Products One half of the companies surveyed manufacture products to their customers specifications. Primary examples include the machining of components for medical or industrial equipment or the formation of molds or dies. 3 • The remaining surveyed companies manufacture products specifically for sale to consumers or other businesses, which then assemble a value added product. Examples include valves, motors, and building materials. Several companies manufacture both a product line and provide custom or job shop type services to their customers. These are generally, but not exclusively, larger firms. In some cases, a company only manufactures a product line to custom specifications, thus obscuring the distinction between a job shop and a manufacturer. Five of Elk River's industrial firms are associated with the plastics industry, including the manufacturing of molds and the production of plastic items. Three of the companies surveyed are associated with the concrete industry, and either provide the raw materials or manufacture construction materials. Two companies are associated with high-tech industries and manufacture products for the computer industry or scientific pursuits. Although many companies either have machining capabilities or provide machined products to a specific customer, five companies provide general machining services for an array of applications. These tend to be smaller companies who have either not defined a specific market niche or who have chosen to diversify their customer base. Elk River is home to three companies who manufacture or distribute the tools used by machine shops and mold makers. These firms are especially notable for their ability to •• gauge the strength of the economy. Unfortunately, only one of these companies was able to be formally surveyed. The remaining nine companies surveyed manufacture product lines for a variety of applications, most of which are used by other businesses in production or sales applications. Markets The majority of companies received their supplies from the Minneapolis — St. Paul area, with the next main source of supplies being Chicago. Nearly all respondents had a national customer base and competed nationally with other similar firms. Three companies had other U.S. facilities. Machine shops as a group tended to have a more state or regional focus. Several business owners noted that Minnesota is a "hot bed" for machinists and plastic molders. One machine shop owner estimated that he had over one hundred competitors in Minnesota alone. Several companies had overseas customers, suppliers, and competition. The general consensus was that overseas production costs were less but the quality of the work was not as good. One company stated that it had established facilities in both Europe and Asia. 4 1111 Trends When asked about the most significant trends facing their industries in the next five years, the majority of respondents cited market demands as their primary concern. Issues such as improved customer service, changes in market focus, increased production efficiency, and diversification of capabilities topped the list. Advancements in technology were also cited as important trends that local businesses will face in the near future. For example, the ability to machine pieces with increasingly tighter tolerances with new technologies will require more capital investments by machine shops. As another example, plastics are being used in increasingly broader applications, subsequently expanding the markets for plastic molders and mold makers. Finally, economic factors, such as increased mergers, more international competition, and an economic downturn were trends businesses owners expected to see in the next five years. II. LABOR MARKET Employment in Elk River > Elk River industrial firms employ 40 people on average, with a range of 3 to 220 employees. > The average hourly wage of an Elk River industrial employee is $11.54. Nearly all 01, such employees are provided a health insurance and retirement package. Tuition reimbursement for work related training is also common. > Employment levels have generally remained stable over the past twelve months. Employee Recruitment and Retention As expected, finding good employees is a difficult task for most business owners and managers. Locating unskilled workers is the most difficult, followed closely by skilled workers, such as draftsman and technicians (see figure 1). Many companies are willing to train workers but finding trainable people is the primary challenge. It was not uncommon for employers to hire five or even ten people to find one trainable employee. Employee Recruitment: Figure 1 20 15 DEasy 10 — Mod. 5 — El Difficult 0 11 Prof Sales Skilled Unskilled Salespersons were relatively easy to find and not usually a concern to most business owners. Professionals, such as engineers, however, were more difficult to find. 5 • Retaining employees was considerably easier for most businesses than recruiting them, although retaining both skilled and unskilled workers in general was still rated as difficult (see figure 2). Perks such as flex-time, company picnics, profit sharing, training programs, and strong benefits packages helped to encouraged existing employees to stay. Employee Retention: Figure 2 10 ▪Easy 5 ▪Mod. ▪Difficult 0 Prof Sales Skilled Unskilled III. BUSINESS CLIMATE Community Assets Access to the metro area was cited as the primary asset Elk River provides to industrial business. Highways 10, 169, and 101 allow businesses to reach customers, vendors and other suppliers easily. However, many other communities provide good, if not better, esaccess to the metro area, so why not locate someplace closer? Other assets cited included access to labor pool from both the metro and out state areas, lower rent costs, and access to materials. Finally, several business owners cited relationships with local lenders and other business owners as the key reason for coming to or staying in Elk River. Conversely, Elk river lacks certain assets that make doing business in the community more difficult. A lack of local suppliers was citied as a primary complaint, followed closely by a poor local transportation network. Specifically noted was the accessibility to industrial areas with springtime road restrictions as well as driving through town. Finally, one respondent cited a lack of affordable housing as limiting the available workforce. Five Year Plans Questions about future expansion plans elicited a variety of responses. Approximately five business owners intended to sell their business either to a family members or another party. Eight businesses indicated plans for expansion, but only three stated they were committed to staying in Elk River. The remaining businesses had plans for slow, steady growth and either did not see needing to expand in the next five years or had recently completed an expansion. 41111 6 • Issues For Elk River To Address The final question of the survey asked businesses to identify one issue that the city should address to improve its business environment. The responses are grouped by issue and the number of responses for each issue are highlighted in parentheses. > The city must incorporate the expansion of local businesses into its strategy for industrial growth. (8) > The City should continue to work towards further development of an industrial base(5). > Better access to main roads from industrial areas is needed.(3) > The city is doing a good job of promoting business development and should continue on its present track. (2) > Lower taxes.(2) > Address issues surrounding the tight labor market—housing, training, etc... (2) > Growth increases taxes and creates competition for existing employees. (1) > The City should develop a clear consensus for community development. (1) > The community must be more welcoming of newcomers. (1) > City should not compete with the private sector in the marketplace. (1) > No comment. (5) RECOMMENDATIONS seInterestingly enough, business owners identified many of the same strengths and weakness that were identified by the EDA in its recent strategic planning session. Perhaps the primary example is the agreement between the private and public sector that more attention should be paid to the city's existing industries. As spokespersons for Elk River to other industries, their growth and satisfaction should be a primary concern of the community. This issue has been incorporated into the Economic Development Strategic Plan and implementation of various action steps has already begun. Several business owners discussed in their interviews the importance of providing areas zoned light industrial where smaller firms would be able to establish themselves in less expensive metal structures. This is a point that is not lost on the EDA or staff and which should be discussed among and between the city's various commissions. A third issue of great concern to both business and government is the shortage of available labor. A limited workforce restricts both business, and subsequently, community growth. Because this issue is not only a factor of a strong economy, but also a factor of demographics, it is likely to be a problem for many years, even in the event of an economic downturn. Moreover, no magic bullet exists to solve the problem and both the public and private sectors will have to work together to develop solutions. Education, training, housing, and transportation are areas where portions of an overall solution might lie. • 7 l°ee• APPENDIX A Survey Form • 8 CITY OF ELK RIVER 1999 BUSINESS RETENTION AND EXPANSION SURVEY I lb Date of Interview Name of Business Name of Person Interviewed Title Address Phone Fax Interviewer(s) All information in this survey is confidential and will not be published in its raw form. 1. Please give a brief description of your company's products and/or services. What is unique or special about your products and/or services relative to other companies within the industry? 2. Do you have a sister facility (or facilities) producing the same or similar products? 3. Where are your suppliers located? What changes or trends are they experiencing in their industries? • 4. Generally, who are your top customers and where are they located? I • 5. Who are your competitors (or potential competitors)? Where are they located? 6. What are the most significant trends influencing your industry over the next five years? How will they impact your company? Ile 7. Estimate the number of employees working: Full Time: Part Time: Seasonal Peak: Number of employees one year ago: Current Average Wage: Benefits: (circle all that apply) Health Retirement Life Insurance Tuition Reimbursement Others (specify): . 9. What has been your experience recruiting or retaining the following employees? Recruiting Retaining Easy Difficult Easy Difficult Professionals 1 2 3 1 2 3 N/A III • Sales 1 2 3 1 2 3 N/A Skilled Labor 1 2 3 1 2 3 N/A Unskilled Labor 1 2 3 1 2 3 N/A Comments: 10. Assuming an infinite labor pool, how many employees would you WANT to hire in the next 12 months? How many do you ACTUALLY EXPECT to hire in the next 12 months? 11. To what degree are the local secondary and post secondary schools preparing students for work? (circle one) Poorly Adequately Well Ile12. What value or assets does the Elk River area provide your business? 13. What assets or services are NOT available to your business in Elk River? 14. In the next five years, do you believe your/the business will (circle one): Expand Move Close Remain in current facility If moving, would the company stay in Elk River (circle one)? Yes Not Sure No • 15. Have other cities, counties, or states solicited your company to move or expand? • 16. What ONE issue must Elk River address to promote new and existing business growth? • Economic Development ) rvices November 2, 1999 Paul Steinman Director of Economic Development City of Elk River PO Box 490 Elk River, MN 55330 RE: City of Elk River Economic Development Marketing Plan Dear Paul: Thanks for the opportunity to visit with you and Marc Nevinski regarding the marketing plan for Elk River. The community has established the critical foundations needed prior to pursuing more aggressive marketing activities. Congratulations! The marketing approach proposed for Elk River is grounded in market research and the application of private sector marketing principles to economic development. In addition, I can share with the committee economic development marketing successes and failures, and important nuances of the greater Twin Cities market. Thank you for this opportunity. Sincerely, C-- )2 -' SJanna King, C 3722 West 50th St.,#204 Minneapolis, MN 55410 (612) 925-2013 Fax(612) 925-2942 email:jking@econdevelop.com Proposal to Provide Consulting Services • City of Elk River— Economic Development Marketing Plan BACKGROUND/PURPOSE In the past several years, the City of Elk River established the critical foundation for successful economic development. Industrial land is ready, economic development financing tools, a capable staff and supportive local government are in place. Marketing these assets is the next step. The community is establishing a committee to guide the • marketing effort. Economic Development Services will work with the staff and committee to develop a detailed economic development marketing plan, including timeline and budget estimates. PROCESS Market assessment: Economic Development Services will conduct a market assessment as a first step in the process. The assessment includes the following components. • Internal perceptions-Information will be gathered and summarized on current industrial park tenants including their SIC code, community of origin, reasons for locating in Elk River, and current perceptions of its strengths and weaknesses as an industrial location. 410 • External perceptions—Telephone interviews will be conducted with 5 - 7 metropolitan site selection firms and industrial brokers to determine their perceptions of Elk River and its primary competitors. Interviews will be conducted, if possible, with organizations that considered Elk River and selected an alternate location. • Competitive assessment—The strengths and weaknesses of 7-10 competitive communities will be assessed to most effectively position Elk River. The data used by industrial site location professionals will be employed to understand how the market is likely to perceive Elk River. • History of inquiries— A history of inquiries and prospect activity will be reviewed to identify trends such as size of company, SIC code, communities of origin, and other factors. Strategy Development: The Marketing Committee will participate in developing the marketing strategy in a series of 4—6 meetings. The following elements will be included. • Economic Development Marketing— Committee members will be provided with an understanding of economic development marketing including key audiences, decision-makers, key factors in site location decisions and marketing techniques (use of brochures, advertising, direct mail, special events, electronic media, etc.). • Elk River and its Competition- The market assessment of Elk River as a site location will be presented to the committee for their review and discussion. • Facilitated sessions—Committee members will participate in developing the • marketing strategy through facilitated discussions designed to identify key audiences, geographic and sectoral targets, image, messages, marketing techniques(use of 1 brochures, advertising, direct mail, special events, electronic media, etc.), prospect 110 • follow-up, relationship building, and closing. • Economic Development Marketing Plan—Economic Development Services will provide the committee and staff with several alternatives to marketing Elk River as an industrial site location. A final plan will be prepared based on committee input. DELIVERABLES Economic Development Services will prepare an Economic Development Marketing Strategy with recommendations for image, target audiences and key messages. The plan will detail the following: • the development of additional publications; • the use of direct mail, electronic media, advertising and special events; • the involvement of allies and existing industry; and • techniques for prospect follow-up, relationship building and closing. Recommendations on tracking the effectiveness of the marketing campaign and updating the plan will be provided. The plan will include timelines, accountable parties and budget estimates. The plan will cover a 2-3 year timeframe. It is important to update the plan at the end of the second year or beginning of the third, to identify changes in the market and assess the effectiveness of marketing activity to date. Economic Development Services will provide the city with a summary of the Market Assessment that provides the foundation for the Strategy Development. The proposed project cost includes three bound copies, one copy suitable for photocopying and one electronic copy of the Economic Development Marketing Plan and the Market Assessment. TIMELINE The following timeline is somewhat flexible, but represents a realistic pace for many communities, recognizing the busy lives of volunteer committee members and the value of advance mailings. Market Assessment—4 weeks Strategy development— 10 to 12 weeks Final Plan preparation—2 weeks I understand that you plan to start committee activity after the holidays. I would be available to begin the market assessment in December 1999 or early 2000, depending on your goal for project completion. COST Total project cost will be $6,000, including expenses. 2 • Economic Development Services Economic Development Services provides its clients with strategic and operational guidance in the economic development process. Relying principally on the expertise of Janna King, a Certified Economic Developer with over twenty years of experience in the profession, the organization draws on the expertise of other professionals as needed. Economic Development Services brings a high level of expertise and energy to every project, enabling its clients to achieve their goals. Areas of competence include: • strategic planning for community/regional economic development • research and strategy development-including data analysis, surveys, interviews, focus groups and facilitated strategy sessions • effective economic development marketing • economic development policy, including financing and incentives • transportation/economic development issues • workforce development • industrial park market analysis • tourism development • non-profit administration, planning and budget development Janna King, CED Janna is the owner of Economic Development Services. She has over twenty years of experience in economic development—fourteen years in a leadership role in communities in Minnesota and Texas and six as a consultant. Working at the community level, she was involved with projects creating over 3000 jobs and $50 million in capital investment. Janna received the Economic Development Financing Certification from the National Development Council and is 1 of 800 professionals in the country designated as a Certified Economic Developer by the American Economic Development Council. She has served on the board of the Minnesota Industrial Development Association; as founding president of a statewide SBA 504 company in Austin, Texas, and was an active participant in the Texas Marketing Team. In 1997, she co-founded TC Web, a consortium of key economic development web sites, to make Twin Cities economic development web sites more accessible to site location decision-makers. Janna graduated magna cum laude from Gustavus Adolphus College, and pursued graduate coursework in Urban Studies at Mankato State University. She currently • serves on the Economics and Management Advisory Council at Gustavus. 3 Economic Development Marketing Qualifications • Janna King has taken marketing courses and attended several nationally recognized economic development marketing seminars, but believes that experiencing success and failure is the greatest teacher. Under Janna's leadership,the Midland Texas Chamber of Commerce was recognized for its successful marketing efforts. California was a geographic target of the Chamber; within three years the community was recognized in the Wall Street Journal for its attraction of California firms. The American Economic Development Council recognized the quality of the Chamber's marketing materials. The general economic development brochure received one of three"Best of Show" awards, from a field of over 800 entries; a customized proposal received a"Best of Class" award. While King has work experience and clients in other parts of the country, she understands the nuances of the Minnesota marketplace well. For ten years, she worked in the St. Cloud-Little Falls area and has consulted primarily in the Twin Cities and adjacent communities for the past six years. This experience provides her with practical insights into the market dynamics affecting Elk River. Selected Client List Northern States Power, Minneapolis and St. Cloud, MN City of Becker, Minnesota Sherburne County,MN City of West St. Paul Jordan Economic Development Authority, Minnesota Northco Corporation/Red Wing Port Authority Cambridge Development Corporation Central Minnesota Initiative Foundation Metropolitan Light Rail Transit Joint Powers Board—Access to Jobs study City of Roseville,Minnesota Central MN Development Corporation( SBA 504 company) Coon Rapids, MN Hoisington, Koegler Group, Inc. — City of New Brighton and City of Ramsey Saint Paul Chamber of Commerce, Saint Paul, MN Cottage Grove Economic Development Authority, Cottage Grove, MN BRW, Inc., Minnehaha Corridor Development Strategy Dakota County Economic Development Partnership • Ticknor and Associates—Harrison County, Indiana and Franklin, Wisconsin 4 ) • GO • • •• Duckor&Associates,Inc. .20 3141 Dean Court Phone 612.285-1033 Duckor&Associates •! • Suite 804 Fax 612. 285-1044 r Minneapolis,MN 55416 E mail DuckAGSD @ aol.com • 411 Paul T. Steinman Director of Economic Development City of Elk River 13065 Orono Parkway P.O. Box 490 Elk River, MN 55330 November 8,1999 Dear Paul and Marc, Subject: Proposal for the City of Elk River Economic Development Strategic Marketing and Sales Plan Duckor & Associates, Inc. is pleased to submit this proposal to develop an Economic Development Strategic Marketing and Sales plan that builds a foundation for growth for the City of Elk River. This proposal is organized in five parts: • • Benefits • Purpose, Approach, Scope of Work and Methodology • Phases I-IV: Information Gathering& Analysis, Assessment, Market Strategy Development and Strategic Marketing Planning with timetables • Deliverable • Professional Service Fee and General Provisions Supporting information submitted with proposal includes Duckor& Associates, Inc., Proven Experience and Biography. The proposal is highly interactive with you, the elected officials, community and business leaders and clients. The time schedules are dependent on your availability; timely access to the City of Elk River elected officials, community and business leaders, clients, and information. • A BluePrint For Your Success 1 ...For Today and Tomorrow • S •5 • Duckor&Associates •! • • The City of Elk River will grow and prosper by this client driven, strategically integrated, and actionable marketing and sales plan because it: • Identifies client requirements and drivers • Determines growth market segments ■ Develops strategies based on client requirements and City of Elk River's features and benefits • Aligns Marketing, Location Site Process, Promotion& Advertising Strategies, and • Identifies Challenges and Risks. Duckor& Associates, Inc., is uniquely qualified to assist you in this important project because of: ✓ Proven strategic and marketing planning in economic development at multi- levels: city, region, state and private sector ✓ Hands-on, practical working knowledge of economic development &business ✓ Proven visionary capabilities with practical tactics, and • ✓ Collaboratively working with clients with high energy and enthusiasm. I look forward to working with you and the City of Elk River on this exciting and important assignment. Best regards, Anita S. Duckor President Enclosures (10) cc: Marc Nevinski Assistant Director of Economic Development • A BluePrint For Your Success 2 ...For Today and Tomorrow • • •• • •� • Duckor&Associates •! •• 4• • Economic Development Strategic Marketing&Sales Plan Proposal for City of Elk River Elk River...where city and countryflow together November 8, 1999 Duckor & Associates, Inc. Offers • Proven strategic and marketing planning in Economic Development at multi-levels in both public/private sectors • Hands-on, practical working knowledge of economic development and business development • Extensive training and working knowledge with process and planning • • Proven visionary capabilities with practical tactics • Collaboratively working with clients with high energy and enthusiasm Client Driven, Strategically Integrated, Action Driven Marketing and Sales Plan Key Benefits ❖ Articulates a sustainable competitive advantage ❖ Targets potential market segments ❖ Enhances retention, expansion and new growth opportunities • A BluePrint For Your Success ...Today and Tomorrow • • •• • • • f Duckor&Associates ;:r • • Economic Development Strategic Marketing& Sales Plan Proposal for City of Elk River Elk River...where city and country flow together November 8, 1999 ❖ Builds and complements City of Elk River's 1998 Strategic Economic Development Plan and the 1995 City of Elk River's Comprehensive Plan :• Enhances understanding of clients and requirements •:' Enhances Location Site Process strategy and tactics ❖ Provides a foundation for growth and increased tax base by building a well-designed, long-term, consistent communication strategy including an updated marketing materials plan • ❖ Improves current and potential client satisfaction +• Provides a workable BluePrint with clients' measurements and monthly reporting • A BluePrint For Your Success ...Today and Tomorrow •. • •.. • Duckor&Associates • • • Economic Development Strategic Marketing&Sales Plan Proposal for City of Elk River Elk River...Where city and country,flow together November 8, 1999 Purpose To develop a strategic marketing and sales plan which • Articulates a sustainable strategic competitive advantage • Describes features and benefits of the City of Elk River (the product) • Enhances retention, expansion and new growth opportunities, and • Outlines a comprehensive communication strategy including updating marketing materials' plan. Approach and Scope of Work Meeting your objectives requires a collaborative, integrated, and dedicated team working toward a common purpose. An important feature of Duckor & Associates • Inc. approach is the involvement of selected City of Elk River elected officials, Economic Development Authority, Economic Development Staff, community and business leaders (the Marketing Team), and potentially appropriate clients, throughout the process. This method ensures a clearer understanding of your objectives and timely access to needed information, and also positions you to implement the strategies developed. In other words, the strategic marketing and sales plan is totally owned by you, the City of Elk River. City of Elk River Economic Development staff will 1. Provide City of Elk River's information 2. Select Marketing Team 3. Select interviewees and schedule interviews 4. Help prepare with the consultant's direction the Assessment (Market Analysis, Product Features and Benefits, Location Site Process), Market Strategy Development and Strategic Marketing Planning sections 5. Arrange for meetings, provide meeting space and take meeting notes 6. Provide working space for consultant and administrative support, if needed • A BluePrint For Your Success ...Today and Tomorrow 1 • • •• • • • Duckor&Associates •� . • Economic Development Strategic Marketing&Sales Plan Proposal for City of Elk River Elk River...Where city and countryfow together November 8, 1999 Duckor &Associates, Inc. will provide project leadership and 1. The strategic marketing and sales process and plan format 2. Design interview questionnaire 3. Conduct interviews 4. Prepare for, lead and facilitate all meetings 5. Direct Economic Development Staff and Marketing Team members 6. Write the plan, and 7. Present the plan to the Economic Development Authority Methodology • Collection, analysis and assessment of current and pertinent City of Elk River's information • Interview select business and community leaders, elected officials and staff, and clients • Conduct planning/working sessions with Economic Development Staff and Marketing Team • Conduct on-going discussions with Economic Development staff, and • Present findings and plan A BluePrint For Your Success ...Today and Tomorrow 2 • • •• • •� • Duckor&Associates •! • . • Economic Development Strategic Marketing&Sales Plan Proposal for City of Elk River Elk River...Where city and countryflow together November 8, 1999 Information Gathering & Analysis—Phase I Timeframe: TBD depending on Marketing Team's availability • Review City of Elk River's 1995 Comprehensive Plan, City of Elk River Department of Economic Department's 1998 Annual Report and Strategic Plan and any other pertinent work to date • Review Community Profile • Review Business Retention & Expansion Survey Results • Review current location site package ' • • Review current location site process • Review key competitors information, if available • Review promotional and advertising materials: sales letters, brochures, trade show exhibits, and print advertising • Conduct 1 (two-hour) meeting with Marketing Team to: • Develop team principles, clear roles and responsibilities and milestones • Review current clients and identify potential clients • Identify client requirements and key customer drivers from Marketing Team's knowledge and understanding • Identify the City of Elk River's strengths, weaknesses, opportunities and challenges with Marketing Team. . A BluePrint For Your Success ...Today and Tomorrow 3 • • •• • • Duckor&Associates • Economic Development Strategic Marketing&Sales Plan Proposal for City of Elk River Elk River...Where city and countryflow together November 8, 1999 Assessment—Phase II Timeframe: TBD depending on interview schedule and Marketing Team's availability ■ Conduct Market Analysis—Understand Markets and Clients • Determine client requirements e.g. what are the drivers behind clients' stated needs • Identify Targets & Clients • Who makes the location site decision? • Who influences the decision? • Conduct Competitive Analysis • Collect and organize information on key competitors • • Develop a Statement of Purpose 1111) • Develop a value proposition that articulates a sustainable strategic competitive advantage • Determine Success Measurements • Develop client performance and satisfaction metrics • Review City of Elk River (Product's) Features & Benefits and assess alignment with client requirements • Enhance Location Site Process • Identify and assess requirements: System support, information, client tracking and client profiles • Identify roles and responsibilities for staff • Identify client contact points and ensure"Moments of Truth" ■ Identify Challenges & Risks • Identify dependencies or limitations • Identify any Legal or Regulatory issues • Develop contingency plan addressing the risks A BluePrint For Your Success ...Today and Tomorrow 4 • • •• •4.� • Duckor&Associates •! • • • Economic Development Strategic Marketing&Sales Plan Proposal for City of Elk River Elk River...Where city and country flow together November 8, 1999 • Conduct select six interviews • Conduct 1 (two-hour) meeting with Marketing Team to review the Assessment work. • S A BluePrint For Your Success ...Today and Tomorrow 5 • • •• • • •! Duckor&Associates • • • Economic Development Strategic Marketing&Sales Plan Proposal for City of Elk River Elk River...Where city and country,flow together November 8, 1999 Market Strategy Development—Phase III Timeframe: TBD depending on Market Team's availability ■ Develop Marketing Strategy, Objectives, Positioning • Determine market positioning • Determine strategies, objectives, goals and tactics • Develop measurement metrics • Review pricing strategy (e.g. Incentive Package) ■ Develop Sales Strategy • Determine lead generation approach: Direct, Mass, Website, economic development allies, alliances or? • Develop client account planning process ■ Develop Promotion & Advertising Strategy to position and enhance the City's image • Medium Selection (e.g. direct mail, trade journals, business magazines, trade shows) • Message (e.g. Features and Benefits) • Schedule & Frequency • Conduct 1 (two-hour) meeting with Marketing Team to review the Market Strategy Development work. S A BluePrint For Your Success ...Today and Tomorrow 6 • •.• •eiDiDuckor&Associates ;if • • • Economic Development Strategic Marketing&Sales Plan Proposal for City of Elk River Elk River...Where city and country flow together November 8, 1999 Strategic Marketing Planning Development—Phase IV Timeframe: TBD depending on Marketing Team's availability ■ Draft plan • Design performance reporting process • Conduct 1 (two- hour) planning meeting with Marketing Team to • Review plan • Align and coordinate all aspects of plan • Finalize plan • o Present Strategic Marketing and Sales Plan to the City of Elk River's Economic Development Authority • A BluePrint For Your Success ...Today and Tomorrow 7 • • •• • • • Duckor&Associates ;3 ( • i Economic Development Strategic Marketing&Sales Plan Proposal for City of Elk River Elk River...Where city and countryflow together November 8, 1999 o Deliverable Strategic Marketing and Sales Plan 1. Value Proposition—Sustainable Competitive Advantage 2. Three Year Objectives 3. Success Factor Measurements 4. Market Segmentation, Client Requirements and Drivers 5. City of Elk River's Product with Features & Benefits 6. Marketing Strategy, Objectives, Positioning and Tactics • 7. SalesLead Generation) Strategy and Tactics ( 8. Location Site Process Strategy and Tactics 9. Promotion& Advertising Strategy and Tactics 10.Challenges & Risks 11.Contingency Plan, if needed 12.Operating Budget • A BluePrint For Your Success ...Today and Tomorrow 8 . • • •• • Duckor&Associates •4 III Economic Development Strategic Marketing&Sales Plan Proposal for City of Elk River Elk River...Where city and countryflow together November 8, 1999 Duckor & Associates, Inc. Tax Identification #41-1932625 Total Professional Service Fee $12,500 City of Elk River— Economic Development Strategic Marketing and Sales Consulting Services General Provisions Payment Schedule 1/2 payment due upon initiation of project 1/2 payment due upon receipt of final plan • Invoices are payable upon receipt Expenses for travel, lodging and related items will be billed in addition and shown separately on Duckor& Associates, Inc. invoice. Duckor& Associates, Inc. work will be a best effort and it is expected that the results will meet the objectives sought. The recommendations and the written material we provide will be our best judgment based on the information available to us. In any event, Duckor & Associates, Inc. assumes no liability for this project. This offer shall remain open for a period of 30 days from the date of letter, unless extended in writing. Acceptance I appreciate the opportunity to work with you on this important assignment. Please sign and return the enclosed copy of this proposal to authorize the agreed to work. Presented by Accepted by Duckor & Associates, Inc. City of Elk River By: Anita S. Duckor By: • President Title Date: A BluePrint For Your Success ...Today and Tomorrow 9 • • •• • •s Duckor&Associates • • Anita S. Duckor M Ms.Duckor brings over twenty years of business experience and 3 a strong strategic management,product development,marketing and sales management and process expertise.Her career is focused on business and product development resulting in strategic advantages and pkv building strong customer and community relationships.She's a decisive strategic thinker focused on the customer and bottom-line results. Career Highlights Twenty years of increasing responsibilities in the energy and energy services industry. Managed multi-million dollar annual budgets and various departments (Electric Delivery Marketing, Energy Plus Services, Market Research, Community & Economic Development, Community Service Managers, Customer Service Planning and Competitive Analysis with Northern States Power Company, and Energy Services Marketing and Sales,NORENCO Corp.). She held various positions in the following industries:telephone,insurance,real estate and restaurant. Developed a vast network and resource referral system on a wide range of business development and community boards. Proven strategic thinking and planning skills and business and product development efforts. Authored and directed key growth plans for Northern States Power Company. Directed and developed strategic business unit plans and corporate wide community investment strategic plan. Led and co-authored a business plan for the state's marketing organization,Advantage Minnesota. Demonstrated results-driven marketing and sales capabilities. Co-led the Primergy Energy Services Process Team (potential merger between Northern States Power Company and Wisconsin Energy Corporation.) Co-authored the Energy Services Business Case including vision,business objectives,marketing and sales organization and process design for a $4 billion company. Developed and managed successful business and product lines building brand loyalty and achieving business goals for the $2 billion retail delivery business. Developed and managed several sales departments and achieved annual sales goals.Established communities as key accounts; co-authored the community account planning process and training. Demonstrated administrative and organizational skills. Successfully designed and built three key marketing and sales departments and successfully merged and rightsized several departments. Active as a business and community leader.Actively participates on a wide variety of business development and community boards.Appointed by the Governor of Minnesota and the Mayor of St. Paul and others to serve on a variety of commissions and boards. Page 1 of 2 • • • Duckor&Associates 4• Anita S. Duckor Education Bachelor of Science degree,with highest honors and distinction (Outstanding Graduate Award) in Business Administration from San Diego State University. Graduate of the Minnesota Executive Program, Curtis L. Carlson School of Management Executive Development Center; Public Utility Executive Program, University of Michigan, School of Business Administration; and the Economic Development Institute, University of Oklahoma (received the Howard Roepke Award,top award given for the thesis of most outstanding value to the Mid-America Area Development Profession). Instructed at the University of Minnesota, Duluth, for the American Economic Development Council accredited program. Listed in Who's Who of American Women,Who's Who of Emerging Leaders in America, and International Who's Who of Professionals. Memberships: American Experiment, Citizens League, Economic Development Association of Minnesota Minnesota Chamber of Commerce. • Current board memberships CommonBond Communities Hubert H. Humphrey Institute of Public Affairs, University of Minnesota, State & Local Policy Program Advisory Council The Friends of the Minneapolis Public Library Minnesota High Technology Association Sanford Middle School, Site Council Past board memberships Advantage Minnesota Inc., Economic Development Advisory Board Community Reinvestment Fund, Inc. Economic Partners for Southeastern Minnesota Eloigne Corporation, a subsidiary of Northern States Power Company Jungle Theatre Melpomene Institute Minnesota Film Board Milestone Growth Fund Minnesota Industrial Development Association Minnesota Project Innovation, Inc. • Minnesota Real Estate Journal, Editorial Advisory Board Minnesota Women's Network Metro East Development Partnership National Association of Energy Services Companies (NAESCO) St. Paul Chamber of Commerce Paae 2 of 2 • • •• • �• • Duckor&Associates ;:r • Proven Results Page 1 of 3 Strategy Formulation and Planning Led strategic planning for several organizations:Community Reinvestment,Inc.,Metro East Development Partnership,and Minnesota Film Board. RESULTS: Board approved plans and respective organizations'achieved goals. Directed and developed five-year strategic business plans over 8 years for Northern States Power(NSP)Customer Service and Electric Marketing and Sales. RESULTS: Achieved alignment between Customer Service and Marketing improved efficiency and drove retail electric sales of$2 billion annually. Sponsored,led and developed first corporate-wide community investment strategic plan for NSP. RESULTS: Identified and aligned over$40 million investments and increased electiveness for community programs and community relations. Developed first comprehensive three-state Economic Development strategic plan for NSP. RESULTS: Launched over 10 successful products and services including venture fund investments and • industrial park development. Helped develop and launch 20 county Economic Development strategic marketing plan for Economic Partners for Southeastern Minnesota. RESULTS: Achieved a regional economic development plan and enhanced the coordination and working relationships among members. Business and Product Development Initiatives Led and co-authored business plan for Advantage Minnesota,the State of Minnesota marketing organization. • RESULTS:Established first public-private marketing organization for the State of Minnesota. Directed and developed an Affordable Housing Investment business plan for NSP,establishing Eloigne Corporation. RESULTS: Achieved annual goals of affordable housing investments and earning an above average utility rate of return. Authored NSP's first Energy Services business venture plan(NORENCO Corp.). RESULTS: Identified a$65 million market,developed an energy service market niche,and achieved$28 million in sales. Directed and sponsored the Outdoor Lighting business plan for NSP. RESULTS: Identified a sizable attractive market;re-organized and aligned resources to achieve business objectives and goals. Directed and developed Economic Development programs for NSP. RESULTS:Achieved annually$5 million energy revenues,jobs created and private capital investment goals. • . • • •• • • Duckor&Associates 4• Proven Results Page 2 of3 Marketing and Sales Established first retail Electric Delivery Marketing Department for NSP. , RESULTS: Improved customer satisfaction to protect the$1 billion delivery asset base;directed the development and management of products and services for retention and growth. Co-led Primergy Energy Services Process Team(proposed merger between NSP and Wisconsin Energy Corporation). RESULTS: Developed and co-authored business case including vision,business objectives,marketing and sales organization design and process design for the$4 billion company. Directed NSP's Energy Plus Services product line. RESULTS:Achieved$5 million annual sales. Established communities as key accounts for NSP,co-authored the community account team plan,and process and training. RESULTS: Improved account-planning process and enhanced community relations with over 150 communities. III Developed and managed the U.S.Department of Energy"Energy Services-Shared Savings Pilot Program." RESULTS: Developed NSP's first Energy Services Business Case. Developed and managed demand side management and conservation marketing programs for all markets,including point of purchase and major media for San Diego Gas&Electric Company. RESULTS:Achieved program goals and received advertising awards for winning campaigns. Communications Planning and Strategy Directed and developed communication plans including strategy,positioning,objectives,and medium for NSP's Electric Delivery Marketing,Energy Plus Services and Community&Economic Development. RESULTS: Enhanced customer satisfaction,achieved sales,improved customer relationships and received • awards for promotional campaigns. Helped develop NSP brand and positioning as a founding member of the Brand Council for NSP Corporate. RESULTS: Strengthened NSP brand and improved corporate identity. Designed and implemented advertising and public relations strategy and plan for NORENCO Corp. RESULTS:Achieved awareness in marketplace and helped achieve sales goals. Helped design and develop St.Cloud Area Economic Development Partnership's marketing and sales plan and promotional materials. RESULTS: Achieved economic development goals. • • •• •• Duckor&Associates M • Proven Results Page3of3 Non Profit Strategy and Design Shaped policy for the Minnesota Sustainable Development Initiative as a member of the Minnesota Environmental Board's Manufacturing Team. RESULTS: Developed statewide study which shaped state sustainable development policy and enhanced relationships between the manufacturing and environmental sectors. Shaped and developed the City of St.Paul's"Citywide Economic Agenda",the strategic economic development strategy. RESULTS: Developed community-based plan which shaped the city's economic development efforts. Co-chaired Enterprise Development and shaped"Building our Future"Regional Strategies for Economic Opportunities for the Minneapolis Chamber of Commerce. RESULTS: Educated and created awareness of key regional issues for the public,private and educational entities. 111 Assisted with human resource policy and procedures for Community Reinvestment Fund,Inc.,Metro East Development Partnership,Minnesota Project Innovation,and Minnesota Film Board. RESULTS: Improved organization's efficiency and electiveness. Presented and moderated at several economic development policy forums i.e.(l)Innovations in Economic Development: The Evolving Direction of Economic Development in the New Economy and(2)Economic Redevelopment of Brownfields—Its Importance to the Region Economy. RESULTS: Educated participants and continued to Shape overall development policies. Administrative and Organization Recommended Compensation Policy for the State of Minnesota as member of the Minnesota Compensation Council. • RESULTS: Recommended a Compensation Policy reflecting market-based pricing recommendations. Participated in the City of St.Paul's Re-engineering Initiative. RESULTS: Achieved a highlyfocused,streamlined Planning and Economic Development Department. Successfully merged three NSP departments:Community Development,Economic Development and Community Service. RESULTS: Achieved greater efciency,reduced costs and improved alignment of resources. 1111 ITEM 8. ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY • MEMORANDUM TO: Economic Development Authority FROM: Marc Nevinski, Assistant Director of Economic Development /PK DATE: November 8, 1999 SUBJECT: Micro Loan Application Sheldon Mayer: Riverside Manufacturing Issue Sheldon Mayor, President of Riverside Manufacturing, has submitted an application for a Supplemental Micro Loan to assist in the expansion and relocation of his firm to Elk River. The loan fund dollars will be used to cover moving expenses and leasehold improvements in a 10,000 s.f.bay of the Decker building, where the company plans to enter into a five year lease. Currently, Riverside employs eight individuals and plans to hire at least six more • employees within the next two years. Background Riverside Engineering specializes in high speed milling of aluminum components for the aerospace industry. Its customers include Lockheed Martin, Rockwell Collins, and AlliedSignal. The company is able to complete long or short run jobs and machine prototype parts with a short turn around time. Riverside is owned by Sheldon Mayer (51%) and Leo Lund (49%). Riverside has recently been awarded a major contract with Lockheed and the company needs a larger facility to accommodate the machinery it will be purchasing as a result of the contract. The company is currently located in a 3600 s.f. facility in Blaine and is interested in Elk River due to availability of market rate leasable space and proximity to the company's workforce. Riverside's expansion will include the purchase of a fully automated CNC machine, which will be financed by the supplier. Moving expenses and leasehold improvements will be financed by the company (approx. $30,000) and a Micro Loan of$50,000 at one (1)point below prime payable over fifteen (15) years with a three (3)year balloon. Sources and uses are as follows: Supplier $350,000 CNC Machine Micro Loan $_50,000 Moving/Leasehold expenses Owner $ 30,000 Moving/Leasehold expenses Total $430,000 13065 Orono Parkway • P. O. Box 490• Elk River, MN 55330-1743 • (612) 441-7420• Fax (612)441-7425 Equal Opportunity Housing and Equal Opportunity Employment • The EDA will have a first position lien on inventory and a second position on equipment. Additionally, the company has approximately $60,000 in officer loans which will be subordinated to the Micro Loan. Finance Committee Recommendation The EDA Finance Committee reviewed Riverside Manufacturing's loan application on October 28, 1999 and noted that the company meets the Micro Loan Fund's criteria. Micro Loan Criteria Riverside Manufacturing • Max. Loan Amount: $50,000 • Amount requested: $50,000 • Interest rate: 1 below prime • Rate requested: 1 below prime • Equity to EDA loan ratio of 1:1 • Equity to EDA loan ratio of 7.6:1 • 1 job created per $20,000 loaned • 1 job created per $8,333 loaned • Min. average wage of$8 per hour • Average wage of$13-24 per hour The Finance Committee unanimously recommended that the EDA approve a Supplemental Financing Loan to Riverside Manufacturing contingent on the submittal of the following documents: • Current Profit & Loss Statements • Current Balance Sheet • • 2000 Proforma • Financial Statements from minority owner, Leo Lund Riverside Manufacturing will also be required to execute the following paperwork, which is standard procedure for all EDA Micro Loans: • Security Agreement • Promissory Note • Personal Guarantees of both shareholders • Subsidy Agreements (with new requirements of Business Subsidy Law) • Officer Loan Subordination Agreement A UCC-1 financing agreement will also be filed to protect the interests of the EDA. Attachments • Application • Resume • EDA Finance Committee Meeting Minutes — October 28, 1999 • Letter to Mr. Mayer Requesting additional documentation • APPLICATION ECONOMIC DEVELOPMENT MICRO LOAN FUND • ELK RIVER, MINNESOTA I. CONTACT INFORMATION N Company: �} 1 VISI WJE MMkcCTtti �1► '/Nit Address: f to'b0 cIDN'' Ave-oue i 3E l.,11"-TE City/State/Zip INE M 5644 Contact Person(s) .bot, m Business Phone galIMBIIM FaxiMINIM Home PhonefrirPrig Emai Check One: Proprietor k Corporation Partnership Social Security No. Federal ID # State ID 1111111111.11L__ II. NATURE OF LOAN REQUEST • Which Micro-Loan Program are you applying for? X Supplemental Financing Program Redevelopment Financing Program Industrial Incentive Program Amount Requested: $5271 !NY), Ov Total Project Cost: $ /100, Type of project: rt,v,� .f/ New construction for a start up business." "u r, 3 New construction for an existing business. /0,boo�� * On site expansion y0 DUX Y1d -pis' Equipment purchase j-pQ Ct- Remodeling: (circle one)( tMiercial/Retail/Industri,D 014c)/101 /efit ' 'k Other i�U t Ltb Our NEh1. CI a TL( I AJ A New Please give a brief summary of your business and its products or service: Ver-6I LF /1/14vu0#4Cru?//v(j /ivC. /s ,tel ,oiee-C/S/ON M,1CHMn1' SP79 )l4U5 A /t4.4n/u F�C7I2V/n/C7 COMPonie s F 14vioivieS ANI awn LIN,0,1.770/vs /ivIusrg'c/, /E/41/ 1CL/ rks-Cff/A-nAJ4 / 1r-s gog 7746- Ae OSP'fChuouSrejj, We' US6 CAC. C1-bniESi lAni cN F4IeE ME- ,I J,P6 fbeJ3onrro MIL L//u4 fr& ticthti6s. b.rsmmees WS CukieEmzy !fie)oma Ak_e- 'DCA'Wtz' CtxuAiS, JI(W1 C S E' Co lI laMMToiv1• AtC/eaS/CniA-t, AW.OAJ/CS I v/A77o"'� M am 'oAr6) Lock-Hem/4407A) -TACT/C --E use, b rRi4Co►2 ,rvosPAce". Please``' give a brief summary of the project: �.l u i Lb -1 Ui Ci✓S, PESTi2 c om S•AN6 wfi eh?fouJE f0 Du Se&c,F/c Nis. Iivcr' -LL -bQi v& /N 'ou- 7ooe wi z�11/6:74 , patilb& --4i2CADNOM IVC hnl srtoP 1G move- LouIPP AND Lo/EZ I s e ' u9 4-i /tom- v /k:i -,-rry . ,ei � �ffrfi-i c C Al Please describe how this loan will impact your project: eCEJ I/// 7VIS L DAW GU/Cc A-c--Ocd US 70 /11 F L EWSEh% LLD /4t oe0 Lrem i -S k16 NE 1 /71 D vE Owe_ ,evAaiu&-SS A# 'ET uJ7 4r 4/U J t'1 irLrrq 1 tut-BILE` e iAJ 77 e_ENr 0� ‘,41.6 /T 40JOU L-D At& o W dg_ Owe. 6/eotdrhz. PSE s L �� Stioco'&a rYIU III: FINANC G Project Costs Land $ Site improvements $ 1'• • Buildings (attach plans & costs) $ 355 600 Equipment/Machinery/Fixtures i (attach list and estimated costs) $ 5; DUo - a?- Remodeling $ i Industrial Inventory/Working Capital $ Other (attach description) $ Oj Total Costs $ -.'... Comments: • Proposed Sources of Financing • SOURCE NAME TERMS AMOUNT Bank Loan U G GANk CoRP $ sai O Bank Loan $ Other Private Funds $ Applicant Contribution $ Other $ Fed Grant/Loan $ State Grant/Loan $ EDA Micro Loan Elk A Vey- /5 thio S $60, OO O 9-9 2. Total Financing $ rvricyaz, wo,000 OF Comments: • Collateral Assignments Lien Description of Collateral Position& ToBank 1 J 14rNEIZLI / • ToBank 2 To Private Sources To Other Sources To Federal Gov't To State �� / /_ To EDA Micro Loan /rt V" " ® YL/, Co `igk e Comments: Value of Collateral Existing Book Value Cost Liens • Land $ $ $ Buildings $ $ $ Machinery & Equip. $ 3Saacr $ 350,00o $ Other / $ $ $ Other 14 v1QYtmpZ/ $ 50,OM 60 $ $ 'o— Comments: IV. JOB & WAGE GOALS Present # of Employees a Total Payroll 3z.8) 000.00 Jobs To Be Created* Please provide the following information on jobs you expect to create. 40 Average Are the Jobs Expected Number Hourly Annual Permanent or Hiring Job Title of Jobs Wage Salary Temporary? Date iMA-1-14 Nisi 3s,00u Pee..mr 43-4" Z000 bR-�'C�JQ//d�YA I ',I50)000 f Mft'N6�-"� 2,60 0 P b. 2o�d- ' LIS -%-e- Zd 61 *If loan is for job retention only, please explain in Business Plan. Job Creation Timetable Please indicate on the table below when individual jobs will be added to the firm. Number Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Job Title of Jobs 1 2 3 4 5 6 7 8 PAkCi-lINIS-r ,12,0§mwonex. Comments: IV. PROJECT CONTACTS Attorneyr, r • Name +�A�A \--\V-Com. .kk\1\ N (C� M A-1LV. C. 1aU.Lk-'o v.CA 0 Address 5 .1z. W Ay IATA &cc: , S u,-re 130 4 EPPOUS,1--kNi 55416 Phone la12-- 5V5-b`633 Accountant Name 12o6El2T K-A_ 1N ASSOC-1 S RAC ELLEN Cris Address WI Db PENN AVE:. S©(TH &W7E1O1 &1_oa,ViN,7W MN 551/3/ Phone 6/z- 8`6/-3boD ,,,,,, Financing Sources (lenders, partners, etc...) Name \\5 `fc).)aY\,Ov p — -COM LEVJ t Address 506\ \r.1 p414.- Su1-re 735 MINNEOrOLISi P 5544 7 Phone \n12 01 ,1 - 11-G% ,s,e0 Name N' V W E S� Mkt. 1 M Address \g201 W)AmZIFcii4 63 LVD 4 230 f 1 N N i i ►1, M r i 530S hone '\2- 5145-'%%1S �� 0/Name \I )-a 11..1O1J -Tr4-l" g1q n)ie. - 1A NY. �Jlt,l. c V� Address W \ S\ S-1' S-7. � \N • !?OS b U 1v''j t N ,,01D�(, Eilik \Phone '\Z-' be 12 — 4303 Name Address Phone Name Address Phone Parent Company \4 Name 0 Address Phone Others Name Address Phone Name • Address Phone V. ATTACHMENTS CHECK LIST Please attach the following: A) Written Business Plan: 1. Description of Business • 2. Ownership •3. Management 4. Date Established ` 5. Products/Services • 6. Future Plans B) Financial Statements for Past Two Years k C) Financial Projections for Two Years D) Resume of Owner/Management x E) Personal Financial Statements of Proprietor, Partners, Guarantors F) Letter of Commitment from Applicant Pledging to Complete During the Proposed Project Duration . G) Letter of Commitment from the Other Sources of Financing, Stating Terms and Conditions of their Participation in Project H) Other I) Other J) Fee (1% of amount of loan request) AGREEMENT I/We certify that all information provided in this application is true and • correct to the best of my/our knowledge. I/We authorize the City of Elk River and the Finance Committee to check credit references and verify financial and other information. I/We agree to provide any additional information as may be requested by the City and the Finance Committee. DATE \O q,-)(1'\,"`Q APPLIC: "1 NAME (V\( V, K\VIbt 3 �ff ' 6 WC, BY 1/ .4 A r- 72114,4 BY 4111 SHELDON MAYER • 629-87th Lane 612-792-9220 Blaine, MN 55434 Objective: To start a company utilizing my engineering skills along with all of the customer contacts in which i have. Education: Sault Area Skill Center, Sault Ste. Marie, Michigan, 1985 Special courses: Machine Shop, drafting,algebra, wood shop. Hennepin Technical College, Brooklyn Park,MN, 1993 CAD/CAM Programming Experience: PAINTED FEATHER PRECISION, INC. Brooklyn Park, MN 1991 to 1997 Sales/Programmer/Engineer -Jan, 13 1991 to Aug, 15 1997 • Responsible for all quick turn jobs. • • Program all new jobs usingVirtual Gibbs CAD/CAM software. • Program new jobs from SOLID DATA, IGES and/or DXF files. • Work with customers on design problems, specifications. • Responsible for all high speed machining centers. Shop Supervisor/Programmer Second Shift - Jan. 1991 to May 1993 • Program and set up production jobs for CNC job shop. • Supervise machinists, deburrers, maintenance team. • Trouble-shoot and solve problems as they arise. • Run high-precision machining centers. 1986- 1990 UNITED STATES NAVY Jacksonville, FL Leading Petty Officer • Supervised 11 employees in military base machine shop. • Job demanded knowledge of all aspects of machine shop. • Honorable discharge at rank of E-5 1985- 1986 WOHLERT SPECIAL PRODUCTS Sault Ste. Marie, MI Shop Machinist • Operated vertical, horizontal and jig mills, lathe, surface grinder, drill press, shaper and surface cylinder grinder. • Developed leadership skills and increased shop production. • Additional Information: Special interest in hockey, football and boxing. My greatest sense of achievement comes from the self-discipline and drive to win that sports instills. • EDA Finance Committee Meeting Minutes Thursday October 28, 1999 4:00PM Elk River City Hall Riverside Manufacturing— Sheldon Mayer Present: Sheldon Mayer - President Molly Maynard -Office Manager Gary Santwire — Realtor representing building owner Committee Members/Staff: x Cliff Lundberg x Jim Simpson _Dan Tveite x Lloyd Brutlag _Jeff Gongoll x Tom McNair x Tom Bender x Paul Steinman-Staff x Marc Nevinski-Staff Background Riverside Manufacturing does high speed precision milling of components used in the aerospace industry. Recently, the company has been awarded a major contract with Lockheed and the company needs a larger facility to accommodate the machinery it will be purchasing as a result of the contract. Currently, the company operates out of a 3600 s.f. facility in Blaine, but intends to sign a five year lease for 10,000 s.f. in the Decker Building on Highway 10. • Presently, the company employs eight people and pays wages ranging from $13 to 23 per hour. The company plans to hire at least six more individuals in the next two years. Its five year plan includes the construction of a 20,000 s.f. building and a workforce of 20-30 people. Mr. Mayer indicated several reasons for locating in Elk River. • A lower tax rate than Ramsey, Anoka, or Rogers. • Proximity to his workforce as well as his own residence. • No benefit to being closer to the metro area with out of state customers. The expansion project costs include the purchase of a fully automated CNC machine, which will be financed by the supplier. Relocation costs and leasehold improvements are anticipated to be approximately $80,000, of which $50,000 will be financed through the Micro Loan. The remaining costs will be covered by the company. Recommendation The Finance Committee unanimously recommended that the EDA approve a loan to Riverside Manufacturing with the stipulation that the following documents be obtained: • Current Profit & Loss Statements and Balance Sheet • 2000 Proforma • Financial Statements from minority owner, Leo Lund ,k./ A tylkof F. Ri• ver November 1, 1999 Mr. Sheldon Mayer Riverside Manufacturing, Inc. 1680 99th Lane NE, Unit D Blaine, MN 55449 Dear Mr. Mayer, The EDA Finance Committee is happy to recommend that the Economic Development Authority approve Riverside Manufacturing's request for a $50,000 Micro Loan. The EDA will review your application at its next meeting on Monday, November 8, 1999 at 6:00 pm. It would be helpful if you could make a brief presentation to the EDA at that time. As I stated in our phone conversation on Friday, October 29, before we can • close on the Micro Loan, we will need additional documentation of the following: • Current Profit & Loss Statements • Current Balance Sheet • 2000 Proforma • Financial Statements from minority owner, Leo Lund Also, as standard procedure for all Micro Loans, Riverside Manufacturing will be required to complete some additional paperwork, including: • Security agreement • Promissory note • Personal Guarantees • Job performance agreement • Officer Loan Subordination Agreement • UCC-1 financing statement Should you have any questions, please contact me at (612) 241-5526 or Paul Steinman at (612) 441-4905. Sincerely, • Marc Nevinski Assistant Director of Economic Development 13065 Orono Parkway • P.O. Box 490 • Elk River, MN 55330 • TDD&Phone: (612)441-7420 • Fax: (612)441-7425 Cityof Elly Rimmer_ 2000-2003 Economic Development Strategic Plan • Adopted May, 1997 Revised November 1999 E.11 Firer "A historic river community serving as a regional center with a favorable location near the Twin Cities metropolitan area " Our mission is to actively participate in economic development by utilizing available resources to • leverage viable and healthy investments in our community. Such investments will create diverse job opportunities as a result of a stable and growing business and industrial base. We will strive to provide quality services, maintain a favorable tax rate, supply full-cycle housing options for our residents, and foster an environment that will result in substantial growth of our local economy. 1�x Modification Committee City Council Economic Development Authority Housing and Redevelopment Authority • Facilitator: Jim Brimeyer, The Brimeyer Group • • Major Issues: and Goals. Industrial Base • Attract new businesses to increase the city's industrial base 14 Business Retention and Growth ♦ Retain and grow the city's existing � business/industry Vt Marketing Strategy • Create an industrial marketing strategy to develop the city's business parks. Develop/Redevelop E. Hwy 10 & the CBD • Undertake activities that facilitate development/redevelopment on East Highway 10 and in the Central Business District. IGrow Industrial Base Goal: Develop West Business Park aintain current joint development agreement with Tony Emmerich. #X Consider a joint development agreement with Gagne and Wilson. X Develop well focused target marketing tactics: ■ Market to brokers and others with connections to industry, such as MN Technology. ■ Target an industry cluster, such as the energy industry (Energy City). ■ Work with local industries to market Elk River to their suppliers . and customers. X EDA to research construction of a spec building and locate a tenant. ■ Establish bank partnerships ■ Establish developer partnership ■ Identify funding sources (i.e. franchise fee revenue) x Consider completing construction of Business Center Drive. #* Explore marketing methods employed by developers and builders. 14 Examine appeal of West Business Park to specific types of industries. (Target marketing, Industry cluster) x Develop specific marketing materials for West Business Park. 14 Maintain and build networks with banks, brokers, chamber, existing businesses, media, and others. • II. Business Retention & Growth Goal: Retain and grow existing industries Complete BRE Survey and distribute final results to council, EDA, Industries and Chamber of Commerce. X Consider publishing periodic (quarterly or bi-annual) newsletter highlighting economic development activities, practices and issues. X Create local industrial business publicity program - have quarterly feature stories written on industrial firms. X Utilize business round table approach to gauge business's attitude toward developing policies and projects. • X Distribute marketing materials to local industry and promote incentive programs. x Ads — Continue to feature local firms in City Business, Ventures, etc... and explore local advertising opportunities. X Utilize DTED's Manufacturer's Week to showcase existing firms. X Create opportunities for interaction between business owners and elected/appointed officials. X Involve local industries in a major marketing event. X Maintain database of industrial businesses. X Consider continuing EDA Commitment to the Business Incubator Project. • • II. Marketing Strategy Goal: Develop an industrial marketing strategy to develop business parks. tit Establish a marketing plan committee comprised 5-7 of business & civic leaders. it Consider hiring a consultant to help facilitate the formation and implementation of a marketing plan. X Update and maintain marketing materials. X Complete construction of economic development website. zt Utilize Energy City designation as a marketing tool. • • IV. (Re)Development on. _: . E. Hwy 10 & in the CBD Goal: Undertake activities that facilitate (re)development on E. Hwy 10 & in the CBD. Highway 10 X Develop criteria for designating redevelopment areas. X Identify redevelopment/development areas. Develop database of east Highway 10 properties. X Consider locating additional sites for Elk River monument/entry signage. X Examine use of Redevelopment Financing Program along east Highway 10. • Central Business District (Downtown) X Develop criteria for designating redevelopment areas. X Identify redevelopment areas. X Consider hiring a consultant to design a redevelopment plan for downtown. X Develop design guidelines for redevelopment in the CBD. X Issue Request For Proposals for redevelopment sites in CBD. • Further explore the concept of facade grants in cooperation with local banks. # Continue work on CBD action plan. X Construct database of downtown businesses # Continue marketing King and Main site for redevelopment • Additional Action Steps r It Modify TIF policy to comply with changes in State law. 14 Continue professional development of staff through conferences, formal training programs, etc.... it Utilize GIS to manage data of industrial and commercial real estate. ift Explore the development of a rail spur it Inventory all available commercial/industrial land and buildings. • # Utilize existing tools to encourage development : TIF, Micro Loan, Tax Abatement, SCBDF, State, Initiative Foundation. U Ensure Brown property remains available for industrial development. •