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EDA Minutes 05-14-2014MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, May 14t ", 2014 - 6 p.m. Mississippi Room, Monticello Community Center Present: Bill Demeules, Bill Tapper, Tracy Hinz, Matt Frie, Rod Dragsten, Tom Perrault Absent: Brian Stumpf Others: Jeff O'Neill, Wayne Oberg, Angela Schumann, Steve Sherf, Janna King 1. Call to Order Bill Demeules called the meeting to order at 6 p.m. 2. Approval of Minutes — April 9t ", 2014 BILL TAPPER MOVED TO APPROVE THE APRIL 9'H, 2014 REGULAR MEETING MINUTES AS PRESENTED. ROD DRAGSTEN SECONDED THE MOTION. MOTION CARRIED 4 -0. (Tracy Hinz and Matt Frie abstained as they had not attended the meeting.) 3. Consideration of adding items to the agenda None 4. Consideration of approving payment of bills Rod Dragsten asked about expenses related to the acquisition of Monticello Liquors. Finance Director Wayne Oberg said that expenses came in just under $6,000. Oberg also noted that the previous owner has 60 days to retrieve the cooler and the icemaker left on the premises. After that time the equipment will become surplus property owned by the City. BILL TAPPER MOVED TO APPROVE PAYMENT OF BILLS THROUGH APRIL 2014 IN THE AMOUNT OF $312,257.62. MATT FRIE SECONDED THE MOTION. MOTION CARRIED 6 -0. Angela Schumann followed up on questions related to invoices considered during the April 9t", 2014 EDA meeting. She stated that the Market Matching contract is in effect from July 1St, 2013 -June 30th, 2014 and that the invoiced amount is consistent with the contracted amount. Schumann also noted that the fee for recording EDA meetings is consistent with past monthly charges. 5. Consideration to review 2014 Hospitality Marketing Study Steven Sherf, of Hospitality Consulting Group Inc., presented a report related to the Hotel Market Study authorized by the EDA in March. He indicated that the purpose of the hotel EDA Minutes: 05/14/14 study was to determine if existing accommodations match the demand in Monticello. The study included an analysis of community demographics and hotel operating statistics, observations based on touring local facilities and input from interviews. Sherf outlined key findings and responded to questions related to occupancy rates, lodging demand, market competition, market readiness, location considerations and proximity to amenities. Janna King, of Economic Development Services Inc., then identified potential next steps in responding to the findings of the hotel study as part the larger downtown redevelopment strategy. Sherf reported that the four hotels in Monticello are more than ten years old, are in relatively good condition and are well kept. These existing facilities sufficiently address lodging demands of the local and highway markets but do not address the upper midscale and upscale lodging demand that is leaving the market. Sherf added that retail sector has no impact on lodging demand (with the exception of destination travel generated by visitors to outlet malls). He also noted that area attractions such as the Mississippi river and Bertram Park do not affect lodging demand at this time. Proximity to trails is considered a more significant area amenity. Business owners interviewed expressed dissatisfaction with the quality of the accommodations available in Monticello. Interviews with hotel owners indicate that the local demand for upscale accommodations and amenities is met in Maple Grove. Sherf pointed out that the lodging market has been distorted by hotel loyalty programs which reward travelers with points or discounts for frequent lodging. Sherf anticipated that occupancy rates will climb from the current 50% over the next 2 -3 years as the city continues to grow in population and the local economy more fully recovers from the recession. Rooftops are a common measure of "extra bedroom demand." Analysts look for occupancy rates at 70% and beyond to indicate that the market is ready for upscale hotel development. Sherf recommended that Monticello pursue the development of a limited service hotel franchise such as a Holiday Inn Express, Hampton Inn or Fairfield Inn in an effort to address the lodging demand identified. This type of facility may also draw from the lodging market currently served by hotels along the Highway 10 corridor. He pointed out that none of the larger hotel franchises or "flags" are overrepresented in this area and suggested that some may be underrepresented. He indicated that the Marriot, Hilton and Holiday Inn hotels in Maple Grove are not close enough in proximity to Monticello to impact future hotel development decisions. The limited service hotel typically includes a small meeting room, a fitness room, pool and breakfast at a lodging rate in line with the market. The meeting room provides another option for accommodating the various sized meeting space demands of Monticello's social gathering and business meeting market. EDA Minutes: 05/14/14 Limited service hotels do very well downtown with food support nearby. Although close proximity to dining is key, restaurant options needn't be within walking distance from lodging. Increased restaurant options overall should be a top development priority. Sherf suggested that it is more efficient to work with hotel franchise representatives than to send out a broadcast RFP for hotel development. Reps sort through sites, check distance restrictions, determine market qualifications and identify hotel developers potentially interest in exploring sites. He cautioned, however, that franchise interest does not equal a commitment to develop and he stressed the importance of firming up development agreements with developers. Sherf said that although it would be preferable to develop a 50 room hotel on a parcel that is an acre and three quarters to two acres in size, it would fit on an acre and a half of land. He anticipated that shared parking options would be viable in the downtown area because the early morning and evening parking requirements of the hospitality industry do not typically interfere with the daytime parking requirements of the retail and office sectors. Sherf confirmed that the study findings would still be valid in two years. Janna King briefly noted the many aspects of foundational information now in place to fully consider the next steps in guiding downtown redevelopment. She said that the time is right to begin updating and promoting marketing materials, identifying target markets, developing policies, doing initial outreach, assembling sites and conduct preliminary site planning at more than one site. King recommended creating a predictable investment environment and a level of readiness (or a plan to prepare for a level of readiness) because developers are primarily looking for low risk and efficiency. King noted that the findings from the Embracing Downtown Monticello study and the hotel market study indicated that that market can support a significant amount of additional restaurant space. She underlined the importance of pursuing fine dining options and mid -scale lodging development options simultaneously. Angela Schumann clarified some of the many roles which have emerged as part of the economic development process. She indicated that the EDA will define its workplan to guide the pace, the opportunities, the direction and the resources and linkages critical to the process. The EDA may also develop acquisition and financial subsidy policies and provide preliminary site planning input. The Market Matching team is tasked with presenting Monticello to a wider audience. The ReSTOREing Downtown group may choose to focus on marketing, site assembly and facilitating community initiatives. Staff will coordinate, structure and process administrative tasks related to EDA efforts. 6. Consideration of approving a 2014 Farm Lease Agreement for Outlot F. Otter Creek Crossing Wayne Oberg pointed to the need to address the funding gap between the $1,000 fee charged to farm Outlot 7, Otter Creek Crossing and the $1,512 in property tax due on the EDA Minutes: 05/14/14 parcel. Tenants Matt and Tom Spike agreed to pay an additional $250 fee to farm the parcel between May 15'' and November 10th, 2014. Although Oberg would prefer to recover the full taxable cost of the parcel in 2015, he acknowledged that $125 per acre may be a reasonable lease rate because one third of the parcel is not farmable and none of it is irrigated. He also said that, if the parcel were not farmed, it would require weed control measures that could cost up to $400 per year. BILL TAPPER MOVED TO APPROVE THE FARM LEASE AGREEMENT FOR OUTLOT F, OTTER CREEK CROSSING AS DRAFTED. ROD DRAGSTEN SECONDED THE MOTION. MOTION CARRIED 6 -0. 7. Consideration of approving a $500 marketing expense related to "Monticello -Worth the Stop" Angela Schumann reported that the business community campaign, "Monticello -Worth the Stop," has been reaching out to stakeholders throughout the broader business community in an effort to build a coalition of support for encouraging continued traffic to local businesses during the I -94 construction this summer. The EDA was asked to partner in this effort by way of a $500 contribution. Schumann summarized that Worth -the -Stop representatives teamed up with city and MnDOT staff to develop and place cooperative signage. She also noted that the City's Communications Coordinator Rachel Leonard is often on hand at meetings to offer input. Schumann responded to questions related to scope, participation and expected outcomes of the campaign. Although she acknowledged the campaign goal of involving some 40 businesses, she added that scope would depend on participation and momentum. Although there seemed to be agreement that impact is both a significant issue and difficult to measure, commissioners seemed to have different definitions and expectations about impact. Some voiced concern that partnering would be a waste of time and money while others voiced concern that not to do so would waste opportunity and enthusiasm. TRACY HINZ MOVED TO APPROVE A $500 MARKETING EXPENSE RELATED TO "MONTICELLO -WORTH THE STOP." MATT FRIE SECONDED THE MOTION. MOTION FAILED 2 -4 WITH ROD DRAGSTEN, TOM PERRAULT, BILL TAPPER AND BILL DEMEULES VOTING IN OPPOSITION. (Rod Dragsten, Tom Perrault, Bill Tapper and Bill Demeules suggested that an EDA contribution would make little impact.) 8. Consideration of approving a $1,000 membership in the Greater MN Partnership City Administrator Jeff O'Neill emphasized the importance of investing in an organization which advocates for economic development policies and resources for cities outside the metro area and asked the EDA to consider membership in the Greater Minnesota Partnership. He noted that the role of the partnership is to represent legislative priorities common to cities throughout the state and shared examples of partnership support for transportation and technology initiatives that affect economic development. EDA Minutes: 05/14/14 Commissioners asked questions about partnership history, members, budget and staffing as well as how the benefits of participating in this partnership might differ from the benefits of participating in other support organizations. O'Neill offered to invite a partnership representative to an upcoming EDA meeting in an effort to more fully respond to questions. Bill Demeules said that it would be helpful to learn more about the partnership before making a decision about membership. There seemed to be general interest in receiving regular reports related to the work of the organizations supported by EDA membership. Staff agreed to provide such updates as part of the Director's report within the agenda packet and to point out opportunities for active involvement. Commissioners were also encouraged to sign up for subscriber email notifications included with membership. BILL TAPPER MOVED TO TABLE CONSIDERATION OF MEMBERSHIP IN THE GREATER MINNESOTA PARTNERSHIP PENDING FURTHER INFORMATION. ROD DRAGSTEN SECONDED THE MOTION. MOTION CARRIED 6 -0. 9. Consideration of the Director's Report TIF Administration - Northland Securities has been following up on administrative tasks related to job and wage reporting for subsidies, compliance with the six year rule and required knockdowns as designated in the TIF management plan. Invoices related to this process will be included in an upcoming agenda packet for EDA consideration. I -94 Coalition - St. Michael City Administrator /City Engineer and Chair of the I -94 Coalition Steve Bot presented an I -94 Coalition update and responded to questions about the "Corridors of Commerce" initiative and three lane I -94 expansion from Rogers to St. Michael during the table topic discussion segment of the May 61' IEDC meeting. Building Activity - The Building Department continues to process an increasing number of residential building permits. Planning application submissions are also on the rise. 10. Adiournment BILL TAPPER MOVED TO ADJOURN THE MEETING AT 7:34 PM. MATT FRIE SECONDED THE MOTION. MOTION CARRIED 6 -0. Recorder: Kerry Burri Approved: July 1, 2014 Attest: ve