Loading...
10.1. SR 08-07-2017 EOty1� ,.,�� Request for Action River To Item Number Mayor and City Council 10.1 Agenda Section Meeting Date Prepared by General Business August 7, 2017 Amanda Othoudt,EDD Item Description Reviewed by Proposed Aquaponics Facility Cal Portner, City Administrator Reviewed by Action Requested Hear presentation on the proposed Aquaponics Facility in Elk River. Background/Discussion Staff has been working with the owner of Stars Hollow on a proposed 160,000 square foot aquaponics facility to be sited on city-owned property located south of the Youth Athlectic Complex at 9950 1651h Avenue NW. Staff visited the current home-based operation in Center City in early July. The proposal would require a combination of assistance including city and county tax abatment, EDA microloan, and State of Minnesota Job Creation Funds. Mr. Haider is seeking direction from the council on the development of his aquaponics facility. Financial Impact None Attachments ■ Map of Proposed Site POWERED 6T AR 55 4.7 © Bolton & Menk, Inc - Web GIS 0 Legend Stars Hollow Project This drawing is neither a legally recorded map nor a survey and is not intended to be used as one. This drawing is a compilation of records, information, and data located in various city, county, and state offices, and other sources affecting the area shown, and is to be used for reference purposes only. The City of Elk River is not responsible for any inaccuracies herein contained. Disclaimer: 6/21/2017 3:37 PM 388 Feet City Limits Urban Service Area Parcels (1-24-2017) Park Areas COObS IM '911!nu9PI99 •N pooh Ajunoo LL89N `4� sn}u!n0 'L LOZ }y6u CdoO Q � e;osauuiW '.IanPd xis - • NOLL3n SNOB 9NO�I1SM3A3 sautodenbV _ 'OL) MOI[OH SdU;S OZ Q Amr :3ira uoz 'ez r :ova iowoad ZOO -9t :ON road £ooti9 IM `ailinuaPIGe 'N Pooh Ajunoo LL29N '4£ sn}wno 'LIOZ }46uCdoo g s;osauu!`aaAT 3Ila - • ��� ���v N0/175lI+EIJsio momuSmm3 sautodsnb- N 'oj M 1108 Sivas LLOr 'e .&w ,Uva cloz '9z A -P iiva 103PO2ld z0079t :ON road r:1m11 _z(lm wom A £OOtiS IM 'alllnuaPlaB 'N Pooa (junoo LL29N '02 sn}uln0 'LIOZ }y6w(do0 Q Stars Hollow Company(SHC) PFAL The Future of Farmingusing –APrtificial lant FactoryLights: 1.Our Company 2.9.8.7.6.5.4.3.Products and ServicesProjected Labor & FinancialsFinancial RequirementsFacility RequirementsProject DescriptionManagementCompetitive LandscapeSales and Marketing AGENDA Section 1 OUR COMPANY •StartRiver; for a total project cost of $11.70Mproject financing subsidy, from the city of Elk start up costs. We’re seeking $817,000 aquaponics and sell retail/commercial kitsprovide training classes for commercial produce within a PFAL systemhighdistributor of fresh fish products and --value, certified organic/nonup sustainable food grower and -gmoverified ••Within two years of completion, SHC will also To date SHC has provided/acquired $1.71M Stars Hollow Company (SHC) •Incorporated in 2012 ••••Akash Haider SHC Currently Located in Center City, MNDr. Wayne Dorband, PhD Jami Haider ––CoFounder and CEO-Founder, President-COO Company Information •Five plus years ago, current systems highly viable vertical PFAL system via aquaponicsdemonstrationsaquaponics method to sustain large ongoing operationgreen vegetables inefficient and mostly single crop or leafy -would not yield production –testing and ••Akash, operating a small scale PFAL using Created efficient, scalable, and commercially Company Progress Section 2 PRODUCTS AND SERVICES 11 AQUAsolution), combined in a recirculating system culture(raising fish in tanks), plus HydroPONICSAQUAPONICS, (growing vegetables in a nutrient What is Aquaponics? the United States, where it belongs •Local, Organic Food Being (MN) = Less TransportationGrown Where it is Consumed Residues Seeping into Groundwater –start taking produce business back into •New Farm Systems Reduce traditionally farmed/transposed produce) Carbon Emission by 90% (compared to ––No Pesticides or Chemical Leave no Trace Carbon Reduction Section 3 SALES AND MARKETING transportation networks were disrupted produce which locals could eat in case of food shortages or disruption in the supply chain •Millions of people would be affected if our food •Our Food System is Vulnerable to (natural and manContamination and Disasters -made) ––Possible disruption in our food supplyLocal farm could have millions of pounds of Food Security ORGANIC Section 4 COMPETITIVE LANDSCAPE *workforce investment board –business resources directory 2012; page 95 Salary is *$28,342. About $13.67/hour with NO Benefits •Local Farms Create Local Jobs that can Required ($21/hr. plus and No Specialized Skill Set not be outsourced!! full, PAIDbenefits) –Average Central MN Farming •High Paying Jobs with Benefits Jobs Employee/Farmer Weather/Climate Number of Average # of Full Medical Traditional Farming New Farming SalaryDependentCertified OrganicCrops/YearAverage Yield/AcreEmployeesBenefits?800,000 pounds40,000 poundsMethodsMethods$28,342$37,44021YesNoNo30+YesYesNo40--42 New Farming Advantages Section 5 MANAGEMENT •Akashlina Haiderengineer with over 10 years experienceexpertiseconstruction and offer daily farm operations expert and will be on staff to oversee office management as well as traininghand’s-on aquaponics experience–Expertise in biology and •••Jami Haider Dustin Dr. Wayne DorbandDorband–Experienced with people and –Aquaponics-Famous aquaponicssystem Our Team Section 6 PROJECT DESCRIPTION •To achieve necessary organic produce time equivalence)of operations is 74 employees and have a efficiencies designed specifically for operational construct a customized buildingquantities -most cost effective to height of 22’(62 full , ••Proposed Estimated building would be 160,000 SF employment in the first year Our Project •18 acres of land with ability to dig our own purposes)well •••Close to major highway (for transport Private well (or permission to dig one)High Speed Internet (4 mbps or more) Facility Requirements Section 7 FINANCIAL REQUIREMENTS (SHC, Inc. has invested $1,707,235 in equipment, professional design work, building facilities, fish, etc.) General Funding BreakdownContingency and Working CapitalEquipmentBuilding $ 6,429,869$ 1,318,969$ 4,078,567 •Seeking $871,000 from the City of Elk includes the land parcel valued at $380,000 project cost of about $11.70 million, River, in the form of subsidy, of the total which . Financial Needs Land costowner's equityElectric Rebate GAP Lease City of Elk River Lender Lender Lender eligible costs per SBA 504 guidelines i.e., facility construction costsTOTAL Project Costpay off loans (FSA etc.)working capitalAquaponics Systems Cost Building Facilities Costs including design and other fees56.75%22.44%15.45%-100.00%-City Subsidy %$3,319,629.18 $2,323,740.42 48.63%14.59%13.71%19.86%28.37%34.86%equipment financing---3.25%0.85%6.99%4.27%1.71%9.64%1.98%6.41%4.86%$568,968.94 $11,699,771 $11,699,825 1st LienOperational sideSBA $5,689,689 $1,707,235 $1,603,464 $1,128,000 $6,639,258 $4,078,567 -$380,600 $100,000 $817,702 $500,000 $200,000 $232,000 $750,000 operational side-CDC--CFL v/s HID/other micro loan-via Tax vehicleUSES OF FUNDSSOURCES OF FUNDS contingency100.00% Proposed Project SHC –Funding Summary –Sources/Usage Section 8 PROJECTED LABOR AND FINANCIALS •4from the very first year. million in Year 5; in revenue in the first five years flowproduction capacity and already making cash PFAL operation will be operational -5 months after project funding Projected Payroll is $3M+/of operationis received, Yr!! ••••4CashSalesManagement anticipates a -6 additional months we’ll be at full flow is expected to remain strong beginning growth from 6.51 million in Year 1 to 20.3 CAGR of 19.4 percent Labor and Financials Our Companymethodsshortage, jobs, advantages to new farming chainorganics in high demand, simplified supply organic food at a reasonable price –Stars Hollow Company Products & Service Competitive Landscape Sales and Marketing ––Better tasting, local Food security, –Water/land Summary Managementover $3M/yr.!employees by end of first year; within 6water working together -8 months of project funding, 74 –Proven experiencePayroll is Project Description Projected Labor & Financials Financial Requirements –Plants, fish, and –$817,000–Produce Summary (continued) Jobs (good highProfitability (high)Managementoptions)Financial Structureorganics)IndustryScale (large)(future of farming (experienced)-paying)(funding – AdvantagesObstacles PFAL In Your Community? 1.How many jobs will this farm create for and how soon would it be profitable?vegetables from funding approval?my community? 2.4.3.How long will it take to produce How much does creation of this farm cost Will the vegetables taste different? Commonly Asked Questions 5.Why so big, could you start smaller?grow house?community, could you use that for your 6.I have an empty building in my Commonly Asked Questions Akash Haider, Business: 651Center City, MN 5501216199 St. Croix TrailJami Haider, jami@starshollow.farm-haider@starshollow.farm583-3677 ANY OTHER QUESTIONS?