EDA Minutes 04-24-2017 (Workshop Meeting)MINUTES
WORKSHOP- ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, April 24, 2017 — 4:30 p.m.
Academy Room, Monticello Community Center
Present: Bill Demeules, Bill Tapper, Steve Johnson, Tracy Hinz, Jon Morphew, Lloyd Hilgart,
and Jim Davidson
Other: Brian Stumpf, Rusty Fifield (Northland Securities), Martha Ingram (Kennedy &
Graven)
Staff: Jeff O'Neill, Angela Schumann, Jim Thares, Jacob Thunander and Wayne Oberg
1. Call to Order
Bill Demueles called the meeting to order at 4:30 p.m.
2. Roll Call
3. Consideration - Review of Otter Creek Development Costs
Jim Thares provided a summary sheet that indicated the purchase price for Otter Creek
Business Park of 122.5 acres. The total expenses totaled $7,941,068. He also stated that
through the acquisition, 79 developable acres were formed for $2.31/square foot. He
further noted that additional expenses for infrastructure were accounted for; increasing
the value by 10 cents to $2.41/square foot.
4. Review of Previous Land Sales in Otter Creek Business Park
Jim Thares noted that the first sale in Otter Creek Business Park was to Dahlheimer
Beverage for $1.43/square foot with $0.72/square foot received in TIF to the EDA. The
total captured return was $2.15/square foot.
Thares stated that the next development was for Karlsburger Food, Inc. with a purchase
price of $1.20/square foot and $1.53/square foot received in TIF to the EDA. The totaled
recaptured amount was $2.73/square foot.
Following was Walker In -Store for a land sale amount of $0.67/square foot with
$0.61/square foot in TIF to the EDA. Bill Tapper asked if that amount included the large
drainage area. Staff was uncertain. The total recaptured amount from the project was
1.28/square foot.
It was noted that AVR was transferred as an exchange, but calculated at $2.65/square
foot.
Suburban Manufacturing was sold for $0.25/square foot with $1.68/square foot received
in TIF funding. The total recaptured amount was $1.93/square foot.
Lastly and most recently was the Dahlheimer Expansion project which sold for
$2.41/square foot. No TIF was needed for this project.
Bill Tapper asked if the City owned the pond that was between the Karlsburger and
Suburban properties. Staff confirmed.
5. Review of Proposed Guidelines for Pricing Land In Otter Creek Business Park
Jim Thares presented a draft pricing guideline for Otter Creek Business Park land sales.
The objectives included in the guideline were: number of employees, number of jobs per
acre, average wages for new jobs, developed assessed value per acre, business retention,
and significant community impact/comprehensive plan goals. The total possible would be
24 points, with the points equating to the overall price of the land.
Lloyd Hilgart asked if the guidelines were created using the businesses that are already in
the area. Thares stated he completed the guidelines with Suburban. He also added that a
similar model was used by the City of Burnsville.
Steve Johnson asked if the model would be used only for only buildable acreage
excluding ponding and easements. Thares confirmed.
Schumann stated the EDA's market value was set at $2.41/square foot in Otter Creek
Business Park. The EDA sets up a TIF District in order to write down the land and to
reimburse itself for that write down to achieve the $2.41/square foot. She noted concerns
with not always receiving the full value for the land through TIF.
Martha Ingram stated that the guidelines would help frame a policy discussion. She also
suggested plugging in the other businesses into the model.
Jim Davidson asked for clarification on the business retention and number of new
employees criteria identified in the guidelines. Thares confirmed that for the state's
reporting purposes, only new jobs could be considered. Ingram added that new jobs were
the most desired from DEED's perspective. The EDA's business subsidy allows for new
and retained jobs, but values new jobs as a priority.
Bill Demeules noted that a guideline helped to understand all factors and suggested
adding how much TIF could be generated.
Bill Tapper suggested adding a factor that demonstrates or clarifies how much land is
buildable.
Demueles added that the EDA needs to think about if they want to retain unusable land or
sell it with developable land for less maintenance. He also asked if this process could be
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replicated for any parcel (outside of Otter Creek Business Park) that the City or EDA
owns. Thares confirmed that the factors could be used universally.
Steve Johnson noted that a balance between objective and subjective goals should also be
considered.
Hilgart asked if the value of the building could be also looked at as a factor. The board
discussed having minimum assessment agreements on land in Otter Creek Business Park
to protect the EDA from any shortfall (e.g. lower taxes). Ingram also suggested having a
deficiency payment warranty, if the taxes generated are not high enough to make the
EDA whole on sold property.
Schumann summarized the comments of the EDA and stated that traditionally land sales
were completed as a cost recovery rather than a pay -go system. The guidelines
demonstrate that the pricing of the land would be determined from the market price less
the TIF recovery.
Bill Tapper asked if the same guidelines were used by Burnsville. Thares stated that they
used the guidelines to determine TIF and not land sales. He stated that staff could also
use this similarly for TIF projects if desired. Rusty Fifield reiterated the importance of
plugging in past development projects into the guidelines.
Demueles commented that the guidelines would be a good negotiating tool that would
eliminate project/development bias.
The board asked staff to run the development projects including Shred n' Go's proposal
through the guidelines to see if the projects supported the EDA's goals and that the
criteria is appropriate. Tapper asked to see the additional criteria used from the City of
Burnsville.
STEVE JOHNSON MOVED TO TABLE ACTION FOR STAFF TO BRING
ADDITIONAL CRITERIA AND SAMPLES OF THE PREVIOUS DEVELOPMENTS.
BILL TAPPER SECONDED THE MOTION. MOTION CARRIED, 7-0.
6. Adjourn
BILL TAPPER MOVED TO ADJOURN THE MEETING AT 5:18 P.M. JON
MORPHEW SECONDED THE MOTION. MOTION CARRIED, 7-0.
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Recorder: Jacob Thunander�
Approved: May 10, 2017
Attest: C:,� —1,4�
T n ares, Economic Development Director