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Agenda and PacketAGENDA  CHANHASSEN ECONOMIC DEVELOPMENT COMMISSION TUESDAY, MAY 12, 2020, 7:00 PM CITY COUNCIL CHAMBERS, 7700 MARKET BOULEVARD A.WORK SESSION B.CALL TO ORDER C.APPROVAL OF MINUTES 1.Approval of Economic Development Commission Minutes dated March 10, 2020 D.OLD BUSINESS E.NEW BUSINESS 1.Initial discussion of EDC Goal ­ Consideration of creation of Business Subsidy Program F.CORRESPONDENCE DISCUSSION G.ADJOURNMENT ECONOMIC DEVELOPMENT COMMISSION STAFF REPORT Tuesday, May 12, 2020 Subject Approval of Economic Development Commission Minutes dated March 10, 2020 Section APPROVAL OF MINUTES Item No: C.1. Prepared By Nann Opheim, City Recorder File No:  ATTACHMENTS: Summary Minutes dated March 10, 2020 CHANHASSEN ECONOMIC DEVELOPMENT COMMISSION REGULAR MEETING MARCH 10, 2020 Chairman Sanford called the meeting to order at 7:00 p.m. MEMBERS PRESENT: Jim Sanford, Kathleen Donovan, James Ebeling, and Steven Stamy MEMBERS ABSENT: Adam Schaefer STAFF PRESENT: Greg Sticha, Finance Director; and Jake Foster, Assistant City Manager APPROVAL OF MINUTES: Ebeling moved, Stamy seconded to approve the summary Minutes of the Economic Development Commission Meeting dated January 14, 2020 as amended to change the name of Jim Ebeling to James Ebeling. All voted in favor and the motion carried unanimously with a vote of 3 to 0. REVIEW COMMENTS FROM OPEN HOUSE AND SET 2020 ECONOMIC DEVELOPMENT COMMISSION GOALS. Greg Sticha explained the process of reviewing comments received at the open house. Ann Miller, 6561 Fox Path discussed her concerns with ownership of strip malls in the city and in particular the condition of the strip mall that houses Ace Hardware. She also asked that more benches be installed in front of businesses, expressed her concern with traffic and speed, encouraged taking care of existing businesses, and making the city more pedestrian friendly. Greg Sticha continued with reviewing highlights of comments received at the open house and in particular comments suggesting businesses feel it can be difficult dealing with city staff. He suggested a goal could be implementing a customer survey regarding dealing with the planning and building staff at the city. Chairman Sanford asked for clarification about points of contact and the process for businesses moving into the City, communication and interaction among businesses and interaction with city staff. Greg Sticha suggested a goal could be to look for ways the Economic Development Commission can help local businesses to communicate and interact better with other businesses, Buy Chanhassen, and Southwest Chamber of Commerce. Chairman Sanford discussed the issue of improving walkable connectivity of downtown. Jake Foster discussed work being done by city staff to improve pedestrian safety and walkability in downtown. James Ebeling asked about comments about diversity of businesses in Chanhassen. Chairman Sanford discussed the possibility of developing a community gathering center along with park amenities similar to what Chaska has done. Greg Sticha explained that the City Council is currently discussing that topic which would involve an increase to the levy but encouraged the commission to make it a goal. Steven Stamy asked for clarification on how the Economic Development Commission members should handle community outreach with businesses. Greg Sticha encouraged the commission to have that discussion with the City Economic Development Commission – March 10, 2020 2 Council. Kathleen Donovan discussed the concern expressed by businesses with a shortage in the labor force and the possibility of holding a job fair in the community. Greg Sticha discussed the fact that the City Council is considering implementing a lodging tax in association with Meet Minneapolis and asked if the commission supported that partnership as a goal. Chairman Sanford asked about incentives or subsidies to encourage businesses to come to Chanhassen, improvements to internet productivity, and an attempt to help create a health insurance consortium as an incentive to attract new businesses to Chanhassen. In discussing prioritization of goals Greg Sticha suggested to include discussing a business subsidy program, create a customer survey related for points of contact with city staff, look for ways the Economic Development Commission can encourage local businesses to communicate more effectively with each other, city staff, elected officials and Buy Chanhassen, City Council should consider a public facility that encompasses large gatherings and multi use facility which brings visitors to the city to host local business meetings and other gathering events, have the Economic Development Commission support along with Buy Chanhassen a local job fair somewhere within the city, and using health consortiums as incentives to small businesses. After discussion among commission members the following list was created as priorities: 1. Create a business subsidy program. 2. Look for ways for businesses to communicate more effectively with each other, city staff, elected officials and Buy Chanhassen. 3. Community Development department present the process of communicating with potential new businesses with the possibility of creating a customer satisfaction survey. 4. Address the issue of affordable housing, employment opportunities and holding a local job fair somewhere in the city. 5. Look at making the city more walkable and pedestrian friendly. James Ebeling moved, Steven Stamy seconded to adjourn the meeting. All voted in favor and the motion carried unanimously with a vote of 4 to 0. The Economic Development Commission meeting was adjourned at 9:00 p.m. Submitted by Greg Sticha Finance Director Prepared by Nann Opheim ECONOMIC DEVELOPMENT COMMISSION STAFF REPORT Tuesday, May 12, 2020 Subject Initial discussion of EDC Goal ­ Consideration of creation of Business Subsidy Program Section NEW BUSINESS Item No: E.1. Prepared By Greg Sticha, Finance Director File No:  ATTACHMENTS: PowerPoint Presentation For Discussion Business Subsidy Discussion Chanhassen Economic Development Commission Communities can coordinate various proactive approaches: •Policy Formation: prioritize development and resources •Master Developer: seek out developers to accomplish larger objectives for an area of the City •Financing: •Pursue grants or other funding for programs •Public assistance programs •Land Assembly: banking or assisting difficult acquisitions •Marketing: attract / retain businesses Roles for Economic Development 5/8/2020 2 Statutory Requirement for providing low-interest loans, grants, and/or fee waivers to business •>$25,000 grant or contribution, and >$75,000 loan or guarantee ✓Programs must adhere to minimum criteria adopted by the municipality through public hearing and submitted to DEED •>$150,000 of any form requires individual public hearing on award and business subsidy agreement Business Subsidy Policy 5/8/2020 3 Statutory Requirements •States the “Public Purpose” for assistance •Establishes “Criteria” for all subsidies •Adopted by policy and through public hearing •Not intended “case-by-case” •Defined and Measurable minimums •5-year commitment and reporting •Basis for agreement –recourse requirement Business Subsidy Policy 5/8/2020 4 Example Content •Purpose and Authority •City Objectives •Public Assistance parameters / practices •Minimum and desired business/development qualifications •Public Purpose / Job and wage requirements (statute) •Template Business Subsidy Agreement or Term Sheet •Evaluation criteria / process Business Subsidy Policy 5/8/2020 5 Indicates type of projects/businesses Chanhassen would like to assist •Provides board and staff direction and priorities •Provides businesses/developers understanding whether project warrants local assistance •Qualifications •Funding Business Subsidy Program 5/8/2020 6 Part of an economic development strategy •Create or retain jobs •Redevelop blighted areas •Remediate polluted sites •Construct affordable housing •Increase tax base •Diversify/Change the market •Bring new amenity to the community Why Consider Providing Assistance? 5/8/2020 7 5/8/2020 8 Sample Economic Development Programs to Support Small Businesses from KFS and other Cities 5/8/2020 9 City of Prior Lake •Goal: High Paying Jobs •Supports emerging tech businesses •Business incubator space in City Hall since 2013 •Virtual program since 2016 •Mentorship, business, legal, and tax support •Funded with property taxes Technology Village Business Accelerator Program 5/8/2020 10 City of Prior Lake •Provides deferral of up to 80% of local SAC and WAC fees •5 year payment term •Same interest rate as special assessments •For properties with between 3 and 25 SAC Units •Used four times since 2013 –mostly by restaurants •Loan secured with an assessment agreement •Doesn’t provide significant benefit over a construction loan and requires property owner participation Local SAC and WAC Fee Deferral and Assessment Program 5/8/2020 11 City of Chaska •Goal: Make downtown a vibrant destination •Special downtown taxing district (property tax levy) •Commercial properties only •Administered by Chaska Downtown Business Alliance •Funds sign grant program, annual events, marketing, and supportive programs for businesses; i.e., lunch and learns, holiday lighting Special Service District 5/8/2020 12 City of Cottage Grove •Goal: Improve physical appearance of commercial districts •Focused on high-visibility priority zones •City provides up to 50% matching grant •Program funded at $25,000/year with PILOT payment from local utility Façade Improvement Grants 5/8/2020 13 City of Elk River •Goal: •Most loans up to $75,000 for: ✓Downtown revitalization ✓Energy Efficiency Improvements ✓Micro-Breweries •3% fixed rate, 5 year term, longer amortization •Determination of need required •Funded by EDA Levy and repayments Business Micro Loan Program 5/8/2020 14 City of Rosemount •Goal: Downtown redevelopment •Funded by Community Development Block Grant funds (federal) •City pays for code improvements and business pays for exterior enhancements •Hasn’t been used because it triggers Davis- Bacon wage requirements making projects more expensive Downtown Code Improvement Program 5/8/2020 15 City of Rogers •Rogers has a mismatch between housing prices and wages •Goal: Attract workforce for large industrial employment base to meet local business’ needs •Establishes Housing TIF Districts •Considering tax abatement for market rate “workforce” housing TIF and Tax Abatement for Workforce Housing 5/8/2020 16 City of Jordan •Goal: Encourage a viable downtown and create blend of retail and service businesses •Can be used city-wide for commercial redevelopment •Building must be brought up to code •Funds kitchen equipment •Loan amount $5,000 -$50,000 •Rate is 2% less than lender’s rate with 5 year term •Initially funded with property tax levy Commercial Kitchen Revolving Loan Program 5/8/2020 17 City of Jordan •Goal: To retain and increase local jobs, enhance tax base, and redevelop •Reimburses business for City fees (building permits and/or development fees) •First-come, first-serve basis with annual limit of $100,000 •Max individual forgivable loan is $50,000 •Paid for with EDA contribution from property tax levy Jobs for Fees Program Establish goals and eligible recipients Establish funding source •EDA or general fund levy •Limited (max. $50,000) reduction in water and sewer revenues Determine eligibility criteria •Job creation? •Commercial properties •Venture capital investment for start-ups Establish process –determination of financial need Repayment terms, if any, and recourse Options for WAC & SAC Waivers 5/8/2020 18 Establish economic development strategy •Review/discuss proposed development goals or target areas •Discuss resources •Utility Funds for water and sewer fee waivers •External Funding •TIF/Abatement •EDA Levy •Other seed funding •Determine priorities for staff and/or consultants •Establish policies Next Steps? 5/8/2020 19 Jessica Cook Ehlers jcook@ehlers-inc.com 651-697-8546 Your Presenters 5/8/2020 20 Nick Anhut Ehlers nanhut@ehlers-inc.com 651-697-8507