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05-10-2022 EDC MinutesCHANHASSEN ECONOMIC DEVELOPMENT COMMISSION REGULAR MEETING MAY 10, 2022 Vice Chair Kressler called the meeting to order at 7:02 p.m. MEMBERS PRESENT: Vice Chair David Kressler, Commissioners Duke Zurek, Chris Freeman, and Stacy Goff. MEMBERS ABSENT: Chair Eric Anderson. STAFF PRESENT: Bob Generous, Senior Planner. PUBLIC PRESENT: None. APPROVAL OF MINUTES: APPROVE ECONOMIC DEVELOPMENT COMMISSION MINUTES OF APRIL 12, 2022. Member Zurek moved, Member Freeman seconded to approve the Minutes of the Economic Development Commission meeting dated April 12, 2022. All voted in favor and the motion carried unanimously with a vote of 4 to 0. DISCUSSION ITEMS: 1. Third Party Food Delivery Fees Mr. Generous sent out 16 letters to Chanhassen restaurants and received one response which he emailed to the Commissioners from a gentleman who wanted to come this evening but had to work and requests the City discuss putting a cap on third-party food delivery fees. Mr. Generous did some research and found that some services can be up to 30% of the purchase with delivery fees, credit card processing, and an advertising fee for the businesses. The restaurants are saying their margins are very tight and when they send food out through these third-party delivery systems, they lose money. However, they feel they must be involved with them because that is where people are ordering, especially over the past two years during Covid. He asked the Commissioners if this is something the City should pursue. Vice Chair Kressler thought the information Mr. Generous sent out was fantastic and tremendously helpful because he did not know the basic workings either. The fact that restaurants get taken on both ends of this, feeling as though they cannot do without the third- party delivery businesses but they get charged high fees to utilize the services makes him want to Economic Development Commission – May 10 , 2022 2 help out the businesses in town. Vice Chair Kressler is generally in favor of market forces and less regulation but thinks there might be room for some sort of cap and if the EDC recommends that they should take into consideration what the challenges would be to monitor and enforce. Member Zurek agrees the data was excellent. He asked to clarify about the Minnesota House of Representatives committee that met in January of last year and asked if that went through. Mr. Generous replied it did not leave the committee and there was not a lot of political support. Member Freeman stated if they do it at the City level, even ignoring the pros and cons, it will be litigated. Therefore, they are signing up for the City to incur legal bills and asked if that is really the City’s place. He noted there are five or six delivery services competing in the City and asked why the City should step in and try to regulate competition of a new industry that made a lot more sense in 2020 and 2021 when people were literally forbidden to go into restaurants. The fact that there is competition, especially for the business owner who said he is losing money with the delivery service, Freeman asked why he is doing business with them as there are other services out there. He noted some Chanhassen residents may have no problem paying 40-50% over for the convenience. Who are they as a City to say they are forbidden from having that service? Member Goff agreed and said it is not reasonable to expect a restaurant not to use a delivery service. People want the convenience of having their food delivered and she thinks if the consumer is willing to pay the extra fee, that fee gets passed on to the consumer and they can make that choice. If a hamburger is $10, she thinks the restaurant should get the $10 and does not like that they are getting a 30% cut on already very slim margins. She is not convinced that a cap is the answer and thinks litigation is a big thing and is still pending. Member Goff believes the restaurant should be able to negotiate the fees with each delivery service as they are not transparent and have hidden fees. She thinks there needs to be more education out there for the consumer, as well. Member Zurek thinks it might be a bit before its time for the City to go much deeper right now as it may be something that comes back in a couple of months. As they see what other cities are doing and learn from them, as well as get more feedback from business owners, perhaps it is something to revisit down the road. Member Goff would like to hear more from business owners about what they want. Member Freeman noted they have to be careful about only hearing one side of the argument, as well. The Commissioners discussed the item including educating the public on what restaurants are in town, how they are impacted with fees, surveying the population about what is important to Economic Development Commission – May 10 , 2022 3 them, as well as ways to work with the Chamber of Commerce and Buy Chanhassen, and they will continue to monitor and receive more information about the delivery services and fees. 2. Review 2022 Work Program Member Freeman thinks the Work Plan seems very ambitious, noting much of it said “work on this” rather than have a definitive product by the end of the year. He asked if there is anything available from the State Development Agency regarding a class on economic development in Minnesota so he can learn more. Mr. Generous shared the Economic Development Staff job will be published this month. Member Zurek noted in June 2021 the Communication Manager did a feedback survey for developers and business owners and asked if Mr. Generous recalled that survey. Mr. Generous noted that was a request to see if the Communication Manager could do the survey, but there was not any work performed. He noted through the Carver County Community Development Agency there was a presentation given and Mr. Generous can see if that person can come back in to speak to the Commissioners. Member Zurek thinks it was very helpful to see the work that was completed in 2021 and the vision going forward. It would also be helpful to prioritize the work and how to go after those priorities. Mr. Generous spoke with the City Manager about a joint meeting with the City Council, who said the EDC should have an item they’d like to focus on and bring to the Council. He suggested the EDC develop that survey, question, or strategy and present it to the City Council to see if that is the direction they want to go. Member Zurek asked if there has been promotion specific to businesses and suggested the EDC look at what questions they would ask, receive feedback to understand from local businesses what they see as priority, and then take the feedback and come up with a specific action that could help the partnership with the City Council. That would then would identify and inform the EDC’s work going forward. Member Freeman asked if the City Council targets specific industries they would like to bring into the City. Mr. Generous replied not specifically, however there are some business clusters within the City such as the marketing industry. Economic Development Commission – May 10 , 2022 4 Member Freeman noted Maple Grove targeted the bio-pharmaceutical industry and if Chanhassen was pursuing any types of industry they could custom-tailor their messaging to attract those types of businesses. Mr. Generous noted previous Commissions wanted Chanhassen to be a destination, for example for Paisley Park. It would be interesting to hear what businesses think would help them grow. Member Freeman thinks that is a good question: do they want to be a destination, a place people drive to for good jobs, a place people come on weekends or on vacation, a destination for people all around the country or localities around here because of the best paying jobs and best companies, or do they want to be a destination that people aspire to have a house in because it is the best place to live? These are all very different outcomes for the City, and he asked do they want a mix in the City? He thinks the EDC’s job is to be a cog that helps facilitate information up to the City Council and out to the businesses on the communication loop. He would like to know what is attractive and what is unattractive to the City Council. Member Zurek agreed a conversation with the City Council would be helpful to see if they have things already established or would like the EDC to generate that ideation and present the findings. The Commissioners discussed the process of surveying residents and/or businesses and getting on a City Council Work Session agenda for an informal conversation about the direction they would like the EDC to go. 3. Business Subsidy The Commissioners discussed the issue noting they need more information before they go down the path of subsidy. Mr. Generous noted this was to provide guidance from the City. He is unaware of the City doing any tax abatement, but they have done TIF although now it is mostly on the residential side. They work through Carver County or Department of Employment and Economic Development (DEED) to get additional funding in to the community. Vice Chair Anderson noted they will table this agenda item to a future meeting when they have more information and knowledge. ADMINISTRATIVE PRESENTATION: None. CORRESPONDENCE DISCUSSION: None. Economic Development Commission – May 10 , 2022 5 ADJOURNMENT: Vice Chair Kressler shared he and his wife decided to build a house outside of Chanhassen and hope to have it completed and move by the end of the year. He will stay on the EDC as long as it makes sense and as long as he is here in the City. Zurek moved, Freeman seconded to adjourn the Economic Development Commission meeting at 8:10 p.m. Submitted by Bob Generous Senior Planner Prepared by Amy Weidman Administrative Support Specialist