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EDA Agenda 05-10-2017 AGENDA REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, May 10th, 2017 – 6:00 p.m. Mississippi Room, Monticello Community Center Commissioners: President Bill Demeules, Vice President Bill Tapper, Treasurer Steve Johnson, Tracy Hinz, Jon Morphew and Councilmembers Jim Davidson and Lloyd Hilgart Staff: Executive Director Jim Thares, Jeff O’Neill, Angela Schumann, Wayne Oberg and Jacob Thunander 1. Call to Order 2. Roll Call 3. Consideration of additional agenda items 4. Consent Agenda a. Consideration of approving Special Workshop Meeting Minutes – April 12, 2017 b. Consideration of approving Regular Meeting Minutes – April 12, 2017 c. Consideration of approving Special Workshop Meeting Minutes – April 24, 2017 d. Consideration of approving Special EDA Meeting Minutes – April 25, 2017 e. Consideration of approving payment of bills f. Consideration of approving payment to Cuningham Group Regular Agenda 5. Consideration of Update and Review Process of 2017 Housing Study 6. Consideration of Outdoor Storage Ordinance Revisions 7. Consideration of Otter Creek Business Park Land Sale Pricing Guidelines 8. Consideration of Director’s Report 9. Adjourn 1 MINUTES WORKSHOP- ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, April 12, 2017 – 4:30 p.m. Academy Room, Monticello Community Center Present: Bill Demeules, Steve Johnson, Jon Morphew, Lloyd Hilgart, and Jim Davidson Absent: Bill Tapper and Tracy Hinz Staff: Jeff O’Neill, Angela Schumann, Jim Thares, Jacob Thunander, Shibani Bisson, and Wayne Oberg 1. Call to Order Bill Demeules called the meeting to order at 4:30 p.m. 2. Roll Call 3. Introduction and Purpose of Meeting Angela Schumann stated that the purpose of the meeting was to help the EDA provide staff with direction on industrial land availability. Schumann noted that the City has about 50 acres of available industrial land in the I-1 (Light Industrial) and I-2 (Heavy Industrial) Districts, with the addition of 57 acres of land zoned as the IBC (Industrial and Business Campus) District. She also added that only 5 acres of all industrial land allows for outdoor storage. This is due to the covenants set up in Otter Creek and the Zoning Ordinance that do not allow outdoor storage in the IBC District. Schumann stated that there are about 200 vacant acres “guided industrial”. In Otter Creek, there is less than 40 acres of developable land. There are a number of site constraints such as power lines and topography issues and the adopted covenants. Schumann reminded that the EDA’s established market value based on the cost to acquire and establish infrastructure at Otter Creek is $2.41 a square foot. Jim Davidson expressed disappointment in having Groebner, Inc. relocate due to restrictions on outdoor storage. He asked if it was typical for cities to be low on industrial land especially for outdoor storage. Schumann responded that the City didn’t have the right dimensions for industrial land that could accommodate outdoor storage. The City allows outdoor storage in the I-1 and I-2 Districts and new standards are being proposed to the EDA in the coming month. Schumann noted the comprehensive plan’s main goals of attracting and retaining living wage jobs and increasing tax base; do not further these areas with having outdoor storage. She stated that the City’s trying to balance the amount of outdoor storage relative to the appropriate building size and lot area. Bill Demueles added that MPCA doesn’t want outdoor storage. Jeff O’Neill also said that the current zoning ordinance would have allowed Groebner, Inc. to locate in an industrial zoned district, but because Otter Creek Business Park has covenants in place that restrict outdoor storage, it was not possible. Schumann added that there are available lots for 2 industrial development, but there are other factors such as lot dimensions, location, and property owner’s willingness to sell that could hinder development. O’Neill also stated that they could consider loosening the standards for outdoor storage, but may inadvertently discourage businesses that don’t want outdoor storage nearby from locating. He encouraged looking at other areas of the ordinance including screening, if changing the standards. 4. Review Inventory of Industrial Land Angela Schumann reviewed the zoning map and pointed out areas of the City where industrial land is located or could be located. 5. Review factors impacting industrial development a. Marketplace for private industrial development b. Land Values 6. Review Possible advantageous industrial expansion areas Angela Schumann stated that the area the EDA should focus on industrial development is in Otter Creek Business Park, the Spike area, and the Chadwick/Bowers parcels. 7. Spike Property - characteristics/features Angela Schumann indicated that there are four parcels that represent approximately 106 acres and are outside the current City limits. They are adjacent to Otter Creek Business Park, Bertram Chain of Lakes Regional Park, and a substation. The current Wright County Market Rate Value is $686,000. Schumann stated that Otter Creek is encumbered by a number of things including wetlands, topography, and one of the most prominent is the power lines. She stated the power lines do cross the Spike parcels and that there is development limitations underneath these areas that will need to be better understood. Schumann noted that part of the Spike parcels are guided commercial and if the EDA would like to see that area completely industrial, a Comprehensive Plan amendment would be required. Thares also added there is a pipeline that also has limitations to development in these areas. 8. Expenses and forecasts a. Phase 1 ESA, Feasibility Report, Appraisal, Stormwater Plan, Platting Utilities and Streets 3 Jim Thares encouraged the EDA to complete and/or understand a Phase 1 ESA, Feasibility Report, appraisal, stormwater plan, platting utilities and streets prior to the purchase of new industrial land. Bill Demueles asked if the City Engineer could complete these studies or if it would need to be hired out. Angela Schumann stated that attorneys always recommend having an appraisal. Schumann also added these reports and studies help to understand what there is for available developable land and any encumbrances prior to purchase. The EDA discussed the advantages (such as financial assistance) of purchasing land from the City rather than private developers. Bisson added that the approximate cost of extending infrastructure and utilities including water, sewer, and streets is $1.00 per square foot. Schumann stated that discussions needed to occur regarding if the City should expand Bertram Chain of Lakes Regional Park and what should be included in the expansion. The cost to further develop the park should also be investigated. The EDA discussed their vision of the type of development that should occur surrounding the park. Morphew asked if the owners are willing to sell the parcels. Thares confirmed. Demueles reiterated that there is private land available for industrial development within the City that developers could apply for public financial assistance, rather than having the EDA purchase land and then sell to a developer. Lloyd Hilgart asked what the typical timeframe was for relocating a business. Schumann responded that there are a lot of moving pieces and it depends on where the developer purchased the land. If a business owner purchases land inside the City limits development can occur quickly. Contrary, more time is involved in annexing new area to the City. 9. Finance Discussion a. Available Resources Thares stated that the available cash and investments is 1.9 million dollars (excluding land values), but that the goal is to also complete some work in the downtown following the Small Area Study. b. City of Monticello Participation (Public Works Facility?) Jeff O’Neill stated that there had been preliminary, informal discussion to have a future Public Works facility located behind the substation in Otter Creek Business Park. A formal discussion and recommendation to City Council has not been set. O’Neill discussed some of the benefits to having the facility located there. He 4 added that this project would need to be completed in the next couple years due to the growth of the City over the years. Jim Davidson asked what size they needed for a new building. O’Neill stated that staff toured a few other city’s Public Works buildings, but that they were unsure at this time. He also added that during the City Council’s goal setting meetings, it was suggested that a comprehensive facility needs study occur. Building stock including how current buildings are and could be used/sold and future needs would be incorporated into a plan that could guide the next 30 years. c. Option Agreement – Gradual Takedown – Omitted Jeff O’Neill asked if there were concerns with generating residential development near the Bertram Chain of Lakes Park. Demueles stated that they have to determine what the highest and best use of the property. Schumann added that the EDA should keep in mind the realignment of Chelsea Road with Dalton Avenue would cause much less industrial land development and more residential development. Steve Johnson stated that the City should then pursue other options to increase industrial land development as that type of development brings in more taxes than residential. Angela Schumann noted that at staff site review, it was determined that a few areas of the Comprehensive Plan needed to be revisited including the interchange planning area and industrial development (including location of where it should occur and the costs to providing industrial land). Lloyd Hilgart asked if additional areas away from Otter Creek Business Park and the surrounding area could also be looked at for industrial land and development. O’Neill also added the importance of understanding the changing retail development sector and land that was originally set aside for commercial that could be rezoned to industrial. Bill Demueles asked if the land near the tracks (southeast in the City) should be looked at for industrial development. O’Neill stated that most of what is developable is outside of the orderly annexation agreement. Schumann asked for a final understanding of staff direction. Demueles stated that staff should examine what the surrounding area has to offer and complete an area market study to gather numbers on the different types of properties in surrounding communities. He also added that staff should understand the feasibility of additional land purchases with the $1.00 per square foot of infrastructure costs. Steve Johnson added that developers want to know what the land is going to cost per acre with development fees and if it’s feasible. Lloyd Hilgart asked for the takedown of industrial land from the past 5 to 10 years. 5 10. Adjourn LLOYD HILGART MOVED TO ADJOURN THE MEETING AT 5:50 PM. STEVE JOHNSON SECONDED THE MOTION. MOTION CARRIED, 5-0. Recorder: Jacob Thunander ____ Approved: May 10, 2017 Attest: ____________________________________________ Jim Thares, Economic Development Director 1 MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, April 12th, 2017 – 6:00 p.m. Mississippi Room, Monticello Community Center Present: Bill Demeules, Steve Johnson, Jon Morphew, Jim Davidson, and Lloyd Hilgart Absent: Bill Tapper and Tracy Hinz Staff: Jim Thares, Angela Schumann, and Jacob Thunander 1. Call to Order Bill Demueles called the regular meeting of the EDA to order at 6:00 p.m. 2. Roll Call 3. Consideration of additional agenda items None. 4. Consent Agenda Lloyd Hilgart moved to approve the Consent Agenda excluding Item C. Jim Davidson seconded the motion. Motion carried, 5-0. a. Consideration of approving Regular Meeting Minutes – March 8, 2017 Recommendation: Approved the Regular Meeting Minutes of March 8th, 2017. b. Consideration of approving Change Order #2 for LSI contract with Metco, Inc. Recommendation: Approved authorization of additional $130.00 to the contract amount with METCO. c. Consideration of approving payment of bills Recommendation: ITEM WAS REMOVED FROM THE CONSENT AGENDA. d. Consideration of Accepting LSI Report for Block 34 – 130 East Broadway Avenue Recommendation: Approved to accept the Limited Site Investigation (LSI) Report performed by METCO related to Leak #20142 on EDA owned property in Block 34. e. Consideration of Farm Lease with Tom and Matt Spike Recommendation: Approved to authorize the EDA Executive Director and President to execute the Farm Lease agreement for Outlot F, Otter Creek Crossing as drafted. f. Consideration of modifying terms of contributing $5,000 in funding to downtown (Block 34) art project Recommendation: Approved to authorize a contribution of $5,000 toward the 2 development of an art sculpture improvement at the southeast intersection of TH 25/CSAH 75 and to accept the donation of the artwork and acknowledge the $3,000 contribution of the Ellison family to the sculpture. 4A. Consideration of items removed from the Consent Agenda for discussion c. Consideration of approving payment of bills Steve Johnson asked for clarification of the payment to WSB for $3,700. Jim Thares stated that invoice was a part of the monthly consulting contract plus additional work completed for the Shred-n-Go proposal. STEVE JOHNSON MOVED TO APPROVE PAYMENT OF BILLS THROUGH MARCH, 2017. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED, 5-0. 5. Consideration of Shred-N-Go Concept Development in Otter Creek Business Park Jim Thares introduced Mark Suppes, owner of Shred-N-Go to explain a concept stage proposal in Otter Creek Business Park. Suppes reviewed the business subsidy application that he submitted to the EDA. Shred-N-Go is interested in a 4.8 acre lot in Otter Creek Business Park and illustrated the location in Exhibit A of the application. A concept stage site map was also provided to the EDA in Exhibit B. Suppes noted that the project would be two phased, starting with a 20,000 square foot, expandable, pre-cast concrete building for shredding and bailing operations. Phase II would include expanding the facility by 20,000 square feet to house an autoclave. Phase II would begin in three years. Phase I would initially employ seventeen full time staff and one part time staff. The amount of staff for Phase II would be determined. Suppes requested two driveways to access the site – for separate truck parking and employee parking. The hours of operation would be Monday through Friday from 7 a.m. for drivers and 8 a.m. for office staff and closing at 5 pm. Occasionally, evening trucks would be arriving past 5 p.m. Suppes stated that on average, one to two trucks per hour would be arriving or departing to/from the facility. An estimated market value including the land, building, equipment (such as: plant based shredder, bailer, and a truck scale) is estimated at a couple million dollars. Phase II would be an additional 1.9 million dollar project (total market value of four million dollars), which would include the equipment necessary for an autoclave. Suppes stated that he was committed to complying with City Ordinances and zoning 3 requirements in the I-1 (Light Industrial) Zoning District. Suppes also provided the EDA with an overview of their business process. He said that unloading of trucks would occur completely inside the facility, where the material would be placed onto the floor, sorted by grade, and bailed. Forklifts would then carry the bailed materials to a loading dock to be sent to paper mills for pulping and processing. Suppes also mentioned additional shredding services for products such as clothing, uniforms, medical devices, hard drives, floppy disks, cds, dvds, cassette tapes, and backup tapes. These devices and equipment go through the same process as paper shredding, but the materials are then transferred to landfills. Suppes explained the process for recycling medical waste, which would occur in the Phase II of the project. He said that medical waste is sent to the facility in secured containers and processed by an autoclave. Suppes noted there would be no noxious odors, smoke, or fumes. Again, all operations and processes would occur inside, except the use of a truck scale and overnight parking of trucks in the lot. Suppes stated that he met with Minnesota Pollution Control Agency (MPCA) and was told processing of medical waste requires a registration permit (MPCA), wastewater permit (City of Monticello), and a transporter permit (U.S. Department of Transportation and Minnesota Department of Public Safety). Suppes identified how the increment assistance would be used and why it was necessary to undertake the project. He noted that the City of Monticello would set up a TIF district that would help to recover the costs of developing the parcel. Suppes stated that Shred-N- Go preferred that the EDA sell the land for a dollar as a part of the overall development plan. Shred-N-Go would then pay all other development fees including SAC and WAC. Suppes noted that TIF funds would not be given to Shred-N-Go for any purpose or reimbursement. According to Suppes, the advantage to the proposal is that they company would not need to supply upfront funds for land acquisition. He also mentioned that the value of the business would easily support tax increments that would reimburse the EDA for the land. Suppes stated that they currently employ twenty people, with seventeen people reporting to the proposed Monticello location and the remaining 3 staying at the Duluth facility. Jobs include General Manager (one at $120,000+/year), drivers (seven at $40- 50,000/year), collector (one at $28,000), sales (four at $40-80,000/year), customer service (one at $38,000+/year), accounting and administration (two at $38,000+/year), and owner/Suppes (the remaining profit). A warehouse manager would be added to the Monticello site at $45,000/year. More employees are expected as the company diversifies. Suppes stated that for every $125,000 of revenue, an additional employee is necessary. He noted Shred-n-Go supplies services to a wide variety of customers including government agencies, healthcare facilities, legal and financial entities. Suppes stated that 4 there is not one customer that is greater than three percent of their business sales, which provides his business with financial stability and revenue growth. He also said that the company receives an additional revenue stream by including the sale of shredded paper to mills. Suppes indicated that a few of his current employees live in the south metro and would not commute to Monticello. He expected turnover in the driver pool and applicants from around the Monticello area to fill these positions. Suppes reiterated that he expected business and employee growth. He stated that support services in Monticello would also be needed including diesel fuel, truck maintenance and repairs, building maintenance, and office supplies. Suppes then discussed the construction and finances associated with the project. RJ Ryan Construction would be the builders for this project. He noted that Anchor Bank – Eden Prairie was comfortable financing the project assuming that 10 percent of the costs were put down. Suppes added that his business would hire an architect for the project and would share renderings of the site when available. He stated that currently Shred-n-Go operates in St. Cloud, Edina, and Duluth. The purpose of the Monticello facility is to consolidate the St. Cloud and Edina locations into one facility. Onsite shredding would allow for a larger variety of products to be shredded. A plant based facility would also allow them to bail paper, which would recapture the processing fee currently paid to recyclers. Financial statements were also provided to the EDA. Bill Demueles asked if the trailers would be all enclosed vans. Suppes confirmed. Demueles asked if they would be used for storage. Suppes indicated the paper is bailed and then loaded onto the vans. Once the vans are full, a paper broker is called to pick up the full van and leave an empty van. There would always be vans at the dock. Steve Johnson noted that the plan indicates exponential growth over the next twenty years for the business. Johnson asked what Suppes had in place so that the business didn’t outgrow its capital. Suppes indicated that is why he is requesting the land at one dollar. Suppes also stated that he has no interest in partners or selling the business at this point. The only volatility to his business is paper prices which accounts for fifteen to twenty- five percent of the company’s annual revenue and is not enough to harm the business. Suppes confirmed his comfort with the growth rate of the business. 6. Consideration of Stormwater Management Plan for Otter Creek Business Park Shibani Bisson, City Engineer gave a brief presentation summarizing the City’s Stormwater Management Plan. Bisson began her presentation by discussing the 2006 Water Resource Management Plan. She stated that the goals of the plan were taken from State Statute 103B.201, that requires 5 the metro area cities to develop a stormwater comprehensive management plan. Bisson provided history about Atlas 14 by stating the City authorized the stormwater management plan in 2016 during the Dahlheimer expansion project. At that time, Dahlheimer requested routing their stormwater into the existing pond adjacent to Karlsburger Foods. With that request, the new Atlas 14 stormwater management requirements were utilized to measure the amount of rainfall in order to create sufficient stormwater ponds. The new standards reflect increased rainfall intensities resulting in the need for larger ponds. City Staff then discussed the overall affect Atlas 14 would have on Otter Creek Business Park and the Chadwick and Bowers parcels. The specific requirements including rate control, volume control, water quality, other (site design considerations, etc.), and developer submittals were reviewed by Bisson. She stated that the report was created to demonstrate how stormwater should be managed in Otter Creek Business Park. Bisson stated that the City has implemented a checklist that streamlines this process. Bisson stated that the bulk of the study included developing a stormwater model that took into account the existing land area and impervious surface. It also looked at how existing sites developed, impacts on the current ponds, and additional required pond construction. She also stated that when the proposed stormwater management ponds are sited based on topography and developable land so that they located in the most appropriate locations. Bisson gave an overview of the new ponds that would be required. She noted that the Karlsburger pond would need to be increased by approximately 2.8 acres due to the expansion of Dahlheimer. Bisson stated that the construction of a pond on the Chadwick and Bower properties would need to occur with development. In addition, the construction of a 2.2 acre “Pond A” to the east of the Dahlheimer site, would need to occur. Another pond of 1.8 acres “Pond D” would be constructed on undevelopable land between the St. Henry’s cemetery and a wetland. Bisson also mentioned that infiltration basins would be required on each site if those sites generated more than 1 acre of new impervious surfaces. Alternative solutions are available if groundwater is too high or infiltration is not possible. She reiterated that the locations of the ponds could change, but the objective was to graphically provide information about the size of the ponds. Bisson then discussed the approximate area required for stormwater management, identified in the plan. She discussed the area requirements for City Lot A, Lot E, and Lot G. Bisson stated the City has implemented a regional ponding approach for Otter Creek Business Park as well as other areas of the city to ensure that each land parcel does not have an individual pond. A next step to the plan would be developing a cost per pond construction so that the City could understand what they should charge for base trunk fees or alternative ponding fees. 6 Bisson noted that a base trunk fee considers trunk or larger main pipe infrastructure improvements and lift stations. The alternative ponding fee applies to developments that do not or cannot provide their own ponding. Bisson stated that City Staff had discussions on who would pay for ponds located in Otter Creek Business Park and believes with the fee schedule in place, it would be the EDA as they are acting as the Park developer. Steve Johnson commented that this program appeared to limit the amount of developable land because of the amount of space required for new ponding requirements. Johnson also expressed concern for the decrease in property value and increased cost of ponding and trunk fees. Bisson stated that she thought those costs were considered in the $2.41 market value rate. She also added that because of the new Atlas 14 requirements, they are seeing that ponds need to be larger. Bisson stated that the purpose of the study was to determine how much land would be necessary for ponding. Thares noted that if the EDA wanted to recover some of their costs in constructing the ponds that they could consider adding that cost to the price of the land. Johnson also asked if the City could expand regional ponding near Karlsburger Foods onto private property. Bisson confirmed that there is a drainage and utility easement which would allow the expansion to occur. Demueles asked if the ponds could be built deeper with a goal of reducing land area for ponds. Bisson stated the model identified in the plan determined a certain acreage that accommodated for the assumed runoff and that the location and size of the ponds could change. Bisson also added that the ponding in Otter Creek Business Park is limited because of the high water elevation. Jon Morphew asked if Atlas 14 is a requirement. Bisson stated that it is a new standard that any stormwater professional would use. Johnson asked if these requirements have been communicated to private developers. Bisson stated as developers approach the City, the new requirements are provided to them. Earth Evans, WSB-Water Resource Department stated that WSB has been working with over 30 communities to update their ponding requirements to reflect Atlas 14. Evans stated that in Monticello, the 100 year rainfall event rose from 5.8 inches to almost 6.8 inches. She noted that this has a significant impact on current and future infrastructure. Evans stated that MnDOT, watershed districts, and many cities have updated their rules to require ponding per the Atlas 14 criteria. Demeules was concerned with the EDA accepting the report because of the amount of land that would be consumed by ponding and stressed keeping as much developable land as possible. Johnson also echoed these concerns and requested looking into having deeper ponds. Bisson stated that it was not a final design and instead was a schematic to demonstrate the amount of land needed for ponding. The City attempted to maximize the developable 7 land in the drawings. Bisson also reiterated that the location of the ponds could change and that it was dependent on specific development proposals. Evans stated that they could also provide total volume of ponding required to meet the Atlas 14 criteria. Demueles noted that the proposed Shred-n-Go property has just under 150,000 square feet for building and parking on that property. Bisson stated that the developable area needed for that site plan was accommodated in the overall stormwater management plan. Demueles said that if the EDA accepted this plan as is, they would need to abide by what’s identified in the plan. Bisson stated that it was more of a stormwater management ‘guide’, rather than a ‘plan’. The title could be changed to reflect this. Johnson asked if there would be flexibility for unexpected developments so that land and ponds could be adjusted if needed. Bisson reiterated that the plan is flexible and that it depends on the type of developments that are proposed to the EDA. The plan is not set in stone, but the Atlas 14 rates are standard. Schumann asked if the EDA would feel more comfortable if the introduction and the summary included language indicating flexibility to consider each development proposal within the context of the report. Demueles stated he preferred that it was a ‘concept’ and not a plan. JIM DAVIDSON MOVED TO ACCEPT THE STORMWATER MANAGEMENT PLAN FOR OTTER CREEK BUSINESS PARK WITH LANGUAGE TO STATE FLEXIBILITY TO STORMWATER MANAGEMENT PONDS, RATE CONTROL, WATER QUALITY, AND INFILTRATION TO MEET EACH SITE’S NEED AS LONG AS THEY ARE FOLLOWING THE REQUIREMENTS OF ATLAS 14. STEVE JOHNSON SECONDED THE MOTION. MOTION CARRIED, 4-0. 7. Consideration of Update and Request for Direction on 349 West Broadway (Fred’s Auto) Jim Thares noted that this property has had several offers and he is still receiving calls from interested parties. He noted that the ‘For Sale’ sign was taken down. Thares added that the post office has sent official notice that they will be relocating in March, 2018 or 2019. Staff have discussed the possibility of a larger redevelopment site to include both Fred’s Auto and the post office, which would cover around 38 percent of the block. There has been some discussions about setting up a TIF renewal and renovation district. Thares noted the qualifications for the district are easier and that it is a shorter time period. Jim Davidson expressed concern with leaving the site vacant for another year or two. He suggested tabling the action for more information and discussion on the current interest in the site. Bill Demueles asked about the possible TIF district and if it could be set up this year or if it would have to wait until after the post office officially vacated. Thares stated that the 8 district could be created immediately and after the post office vacated there would be options to work with a developer to rework the block. The clock would start clicking as soon as the TIF district was set up, regardless of the timing of the vacation of the post office building. Steve Johnson expressed possible developer interest in combining the two parcels for a larger redevelopment site. He asked if the post office would still be interested in including this parcel as a ‘completer’ piece to their property. Thares noted that the post office building owner was initially interested in the Fred’s Auto parcel to keep the post office downtown. Thares noted that the post office would likely use the Fred’s Auto parcel as parking. Johnson suggested letting the post office property owner know about the option to purchase the site for a larger redevelopment site. Davidson asked if the EDA would retain the ability to regulate or guide the function on the site as the parking of post office vehicles is not in the best interest of the City. Thares noted that could be included in any agreement. Johnson also noted that a right of first refusal could be included in a development agreement. Thares confirmed. Johnson expressed disapproval for starting a TIF district prior to the post office vacation. JIM DAVIDSON MOVED TO TABLE ACTION FOR ADDITIONAL INFORMATION AND DISCUSSION. STEVE JOHNSON SECONDED THE MOTION. Further discussion ensued. Thares noted that calls are still coming in from interested parties and asked how City Staff should handle these requests. Johnson suggested a closed meeting to discuss real estate offers. MOTION CARRIED, 4-0. 8. Consideration of Director’s Report Jim Thares noted that he attended the third CEDS meeting to discuss the impact of arts and tourism in the regional and state economy. He also stated that the third draft of the housing study was completed by WSB. Staff is reviewing this draft and will hopefully present the plan during the May EDA meeting. Thares also noted that the Small Area Study Steering Committee met and an open house was held on March 30th. He mentioned there was good attendance and feedback. The next step includes a holding stakeholder meetings, which will include downtown property owners and key community leaders. Thares then discussed prospects in the City. Monticello was just notified that the large international firm has decided to move forward with other south metro locations. The remaining prospects are Shred-n-Go, a DEED prospect, and Project Novice. An activities update for the WSB Economic Development Support Contract was attached to the agenda. 9 9. Closed Session – Consideration of recessing to closed session to develop or consider offers or counter-offers for the purchase or sale of real or personal property pursuant to Minnesota Statute 13D.05, Subdivision 3(c)(3). PID # 155194000010 10. Adjourn STEVE JOHNSON MOVED TO ADJOURN THE MEETING AT 7:58 PM. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED, 4-0. Recorder: Jacob Thunander ____ Approved: May 10, 2017 Attest: ____________________________________________ Jim Thares, Economic Development Director 1 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 2 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 3 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. 4 Recorder: Jacob Thunander ____ Approved: May 10, 2017 Attest: ____________________________________________ Jim Thares, Economic Development Director 1 MINUTES SPECIAL MEETING- ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, April 24, 2017 – 5:00 p.m. Academy Room, Monticello Community Center Present: Bill Demeules, Steve Johnson, Tracy Hinz, Lloyd Hilgart, and Jim Davidson Absent: Bill Tapper, Jon Morphew Other: Andrew Dresdner, Jena Stanton (Cuningham Group) and Thomas Leighton (Tangible Consulting) Staff: Jeff O’Neill, Angela Schumann, Jim Thares, and Wayne Oberg 1. Call to Order Bill Demueles called the meeting to order at 5:00 p.m. 2. Roll Call 3. Small Area Study Presentation Andrew Dresdner introduced his team and started his presentation by explaining the four main goals of the study. These goals included: shifting the center and holding onto Broadway as the main street, engaging the river, improving the Pine Street experience for all, and infilling lots with several small, a few medium, and one or two large investment projects. Dresdner stated that the recommendation along Pine Street was to be primarily a commercial street where buildings would be located on the corners as much as possible. Improved pedestrian accessibility (including refuges), shared parking in the center of the block, and buffered parking were proposed. The scale of the buildings would be one to three story buildings. The recommendation was also to reduce access to properties from Pine Street by only allowing access on side streets. Dresdner explained that development should focus on quarter block improvements at a time. Dresdner then discussed the proposed objectives on Walnut Street and Cedar Street. A priority was to infill vacant lots with in-town housing (two/three story apartments or townhomes) with tuck under or surface level parking. He suggested curb extensions on both sides of Broadway Street at the intersections of Cedar Street and Walnut Street, a four-way stop sign at Broadway Street and Walnut Street, and/or continuing a one lane road going west for one additional block from the intersection of Highway 25 and Broadway Street. Lloyd Hilgart commented if an extension of the one lane on Broadway Street would occur that angled parking could also be included in this area. Dresdner also suggested punching Walnut Street all the way through to River Street. The idea was that Walnut Street from Broadway Street to River Street could be occasionally closed for festivals or markets. This proposal would improve circulation around the lot and attract new development. 2 Next, Dresdner discussed concepts for Broadway Street. He stated that it was important to keep the small mercantile scale with as many storefronts and doors on Broadway Street. Tom Leighton stated they completed a retail vitality study on Broadway Street and compared it to neighboring communities. They found out that Broadway Street had more store-fronts than any of the examples. Dresdner also explained that the empty lots on Broadway Street be constructed into public parklets for things such as seating. He suggested keeping parking along Broadway Street to keep people interested in downtown and to buffer pedestrian walkways. He also suggested that the service type businesses migrate upstairs or off of the main street and to focus on retail and restaurants in this area. He stated that service businesses don’t generate as much people as do retail or restaurant facilities. Dresdner than discussed River Street and the riverfront. He illustrated two medium development opportunities for Block 52. With development including outdoor dining facility overlooking the river and signature architecture would be seen crossing the bridge. He also discussed replacing the playground at West Bridge Park with an amphitheater. A splash pad was also proposed along Walnut Street. Steve Johnson had concerns with decreasing the street volume on Broadway Street and the amount of vehicle backup that would occur. He asked the consultants to consider calculations for parking per density in the completed plan. He also noted concerns with visible parking. Johnson asked if the consultants would consider amending the building setbacks. Dresdner confirmed with that the vision was to be a maximum setback of 10 to 15 feet from the property line. Leighton commented that on a previous community’s plan, the buildings were set back 20 feet, which provide ideal locations for outdoor seating or outdoor retail space that would attract people and liveliness in the downtown. Steve Johnson mentioned concerns about taking away parking on the south side of Broadway with having a proposed left hand turn lane. Jeff O’Neill stated that at this time the County Engineers are not proposing any changes to the intersection of Broadway and Highway 25 due to the relatively short duration of high traffic during peak times. O’Neill asked the consultants to explain the proposed experience for people driving into Monticello from across the bridge. Dresdner expressed that it was important to keep the signal at River Street so that people know they are entering downtown. He hoped that circulation would be easy with pedestrian accessibility to the park and a place where people would be outside, which encourage people to explore the downtown. O’Neill expressed excitement for the proposal, noting that it’s difficult to see the park from the bridge until after driving past it. The board and the consultants discussed the importance of having additional opportunities for residential development in the downtown. Steve Johnson asked the consultants to talk about Block 34. Dresdner noted that Block 34 3 was complicated because of two wells that do not allow structures to be built within 50 feet of it. Dresdner proposed three development phases for this block. Steve Johnson asked who would own shared parking lots throughout the proposals. Dresdner responded that it would be a case-by-case basis, but suggested that it be public parking. Charlotte Gabler asked for clarification on the developer interviews. Leighton responded that the developers are provided background, opportunities, and challenges of the downtown. They were also asked if they would consider developing in the city and the type and scale to their potential development. Gabler expressed a possible concern of distinguishing the city during these interviews, but added that it might give an edge to Monticello that they are interested in changing the downtown. Leighton stated that he believed three or four high quality developments in the downtown could occur in the next 5 to 10 years under the right circumstances. Leighton discussed the advantages about having a TIF District in place. He explained the support and lower risk it would provide to prospective developers. O’Neill commented that this study helped to understand that there is opportunity for housing in the downtown including mixed-use. Hilgart asked if there were specific developers that target downtowns for redevelopment and if they had any specific users that they take with them to these developments. Leighton responded that it was less common for developers to have specific retailers in their back pocket, but that it was very common that if they are putting retail space in a development that they would identify possible or anchor tenants. In the case of a brew pub or restaurant, a developer would likely want to have the tenant or owner identified to build to their needs. Leighton discussed concerns with attracting and locating non- national businesses. The board then moved on to discuss pedestrian flow in the downtown. Dresdner noted that the volume of traffic was not the issue on Highway 25, but rather the speed. Schumann asked if the EDA felt they had a clear understanding of how the EDA properties would be involved with the proposed plan and if they were supportive. Davidson commented that it was more realistic plan because of a mix of housing and other developments. Tracy Hinz explained that Block 34 was still perplexing. Leighton agreed that the block was tricky, but suggested that development occur in phases starting with the corner of the block. Per the goals of the study to move the downtown to Walnut Street, Hinz asked about having public art on Walnut Street, rather than at the corner of Block 34 as approved at a previous EDA meeting. Schumann stated that with the art place grant, the artist was working on focusing on Walnut Street. As the current liquor store is running out of room, Hilgart suggested moving it to Block 34 with other businesses such as the DMV and Chamber of Commerce. Leighton 4 entertained the idea because of the traffic flow. A splash pad idea was also discussed and concerns with maintenance. Dresdner noted that a Public Meeting would occur on May 31st. 4. Adjourn STEVE JOHNSON MOVED TO ADJOURN THE MEETING AT 6:28 P.M. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 5-0. Recorder: Jacob Thunander ____ Approved: May 10, 2017 Attest: ____________________________________________ Jim Thares, Economic Development Director EDA Agenda: 5/10/17 4e. Consideration of approving payment of bills (JT) A. REFERENCE AND BACKGROUND: Accounts Payable summary statements listing bills submitted during the previous month are included for review. B. ALTERNATIVE ACTIONS: 1. Motion to approve payment of bills through April 2017. 2. Motion to approve payment of bills through April 2017 with changes as directed by the EDA. C. STAFF RECOMMENDATION: Staff recommends approval of Alternative #1. D. SUPPORTING DATA: A. Accounts Payable Summary Statements Theprecedinglistofbillspayablewasreviewedandapprovedforpayment.Date:5/10/17Approvedby_____________________________________SteveJohnson-Treasurer 1 Debbie Davidson From:Julie Cheney Sent:Tuesday, April 18, 2017 12:41 PM To:Debbie Davidson Subject:RE: Laxmi Hotel vendor #4494 -EDA inv. Attachments:Laxmi Hotel 070116 $4,466.21.pdf This was a new check to replace the one cut last July as they lost it. Here it is. From:Debbie Davidson Sent:Tuesday, April 18, 2017 12:36 PM To:Julie Cheney <Julie.Cheney@ci.monticello.mn.us> Subject:Laxmi Hotel vendor #4494 -EDA inv. Hi, I am not seeing an attachment for the above vendor for an EDA payment on 4/11/17 $4466.21. Would you mind sending it over to me when you get time, so I can attach it to the EDA reports? It’s no hurry! Thanks, Debbie Davidson Finance Clerk City of Monticello 763-271-3225 debbie.davidson@ci.monticello.mn.us AP@ci.monticello.mn.us Email correspondence to and from the City of Monticello government offices is subject to the Minnesota Government Data Practices Act and may be disclosed to third parties. Theprecedinglistofbillspayablewasreviewedandapprovedforpayment.Date:5/10/17Approvedby_____________________________________SteveJohnson-Treasurer Theprecedinglistofbillspayablewasreviewedandapprovedforpayment.Date:5/10/17Approvedby_____________________________________SteveJohnson-Treasurer Theprecedinglistofbillspayablewasreviewedandapprovedforpayment.Date:5/10/17Approvedby________________________________________SteveJohnson-Treasurer 0059061/2---noinserts--------- manifest line --------- . 0023804.0001 . * EDA Agenda: 5/10/17 4f. Consideration of approving payment to Cuningham Group (JT) A.REFERENCE AND BACKGROUND: The Cuningham Group has submitted an invoice for work completed for the Small Area Study. The total invoice amount is $20,000 and indicates 40% of the work is complete. The plan is expected to be completed by June. B.ALTERNATIVE ACTIONS: 1.Motion to approve payment for $20,000. 2.Motion of other. C.STAFF RECOMMENDATION: Staff recommends approval of Alternative #1. D.SUPPORTING DATA: A.Cuningham Group Architecture, Inc. Invoice 4-14-17 EDA Agenda: 5/10/17 5. Consideration of Update and Review Process of Draft 2017 Housing Study (JT) A. REFERENCE AND BACKGROUND: In December 2016, the EDA was made aware of the unfulfilled deliverable “Housing Market Demand Study” per the 2014 and 2015 WSB Market Matching contract. Upon learning that point and arriving at a consensus that the contract work items should be completed, WSB community development and planning staff was duly informed of this expectation. Since that time, WSB staff have been conducting research on Monticello’s housing inventory, conditions and trends as well as a review of occupancy and affordability measures. The attached draft Housing Report contains a lot of information about population demographics, growth trends and pairs that with information regarding available housing to arrive at market demand for several specific housing categories. Those categories consist of entry level and step-up housing and general occupancy market rate rental and senior rental products. The report provides recommendations to fulfill the current and projected unmet demand as well. Staff is asking the EDA to review the report over the next month and formulate questions and possible suggestions for edits which will be reviewed at the June EDA meeting (6-14-2017). WSB staff will be able to attend that meeting to present the Report and take comments and complete the final edits from the EDA at that time. A1. Staff Impact: City staff have been involved in reviewing drafts of the Housing Study and providing comments and edit suggestions. A rough estimate of time spent in this role is approximately 40 to 45 hours among three key staff members. This review work is part of the normal duties of staff as part of oversight of materials and work products performed by contractors. A2. Budget Impact: There is no current budgetary impact in completing the Housing Study by WSB since it was included in the original 2014 and 2015 WSB Market Matching Contract scope of work and all payments were received by WSB for the 2014 and 2015 contract time periods. Upon learning of this deliverable oversight, WSB has made a diligent commitment to fulfill the contract’s uncompleted work item (the Housing Study). B. ALTERNATIVE ACTIONS: 1. No motion being sought from the EDA at this meeting. To be considered at the June 14, 2017 meeting. C. STAFF RECOMMENDATION: Staff believes the process of reviewing the draft Study is best served by giving the EDA members time to read and think about it and allow them an opportunity to formulate questions and/or suggestions for WSB at the June 14, 2017 meeting. The goal would be to have the Study adopted at the June meeting after the formal presentation by WSB. 2 SUPPORTING DATA: A. 2017 Housing Study, authored by WSB & Associates �. � ,��pMP�ll��k �',��.� � �-`�C I�;�� ..'�� l��'';;ij �,,K ,..~'_ _ ;_ • . - _ - s.�.si:�- �'�.- _..:�--._- � �f�� - .4��. � _ - ;� :, ,� .� —� - — � �� .i ■ � a � `_' � ,g, �� : , � � �� '� �� Ili�rr�e�� u��,�i�l�lf �n_ � - - . . �i� �� .� . �— ,�....... -- - =er+�: ' ' � � � . . car�r o� � � rl l � �tC�� Prepared for City of Monticello 505 Walnut Street Monticello, MN 55362 (763) 295-2711 Project No. 2596-34 Acknowledgements We would like to thank everyone who participated in the development of the Monticello Housing Study, including the Monticello City staff, Wright County Assessor's Office and the various realtors in the community. Completed in coordination with: � � WSB & Associates, Inc. , ► 1��'age � � � Montic;ello WSB PURPOSE AND SCOPE OF RESEARCH Housing is an important component of all communities. Housing quality, availability, affordability and diversity enhances the quality of life, supports economic development, and contributes to a community's sense of place. WSB & Associates, Inc. was engaged by the City of Monticello to conduct a Housing Study to assess the housing market conditions and provide recommendations for housing needs within the City of Monticello. The market analysis focused on the housing needs within the City of Monticello including market rate, subsidized, and move- up housing for various age categories including owner-occupied and renter occupied housing options. Monticello's Housing Market Study ("Study") should be used as a reference to guide planning efforts, financial initiatives and strategies, and provide direction to the City regarding the approach it should take; the types of housing opportunities the City should promote, and the roles in providing those opportunities. This Study is intended to be flexible to meet unforeseen housing needs and future land use decisions. It should be noted that the findings presented in this report should not be used to determine the market feasibility of any single development or project; rather, it is designed to be a broad analysis of the entire Monticello housing market and is intended to guide planning efforts, especially as they relate to future land use designations. The Study contains data from both primary and secondary research. Primary research includes interviews with local officials, and the real estate community. Secondary research data includes data from the US Census, American Community Survey, Department of Employment and Economic Development (DEED), Wright County, Business Analyst', and other local planning agencies. Secondary research is always used as a basis for analysis and is carefully reviewed along with other factors that may impact projections. All the information on pending developments was gathered by WSB & Associates, Inc. and is accurate to the best of our knowledge. INVENTORY AND ANALYSIS DEMOGRAPHIC CHARACTERISTICS This section looks at the demographic characteristics that underlie the need for various types of housing in Monticello. The U.S. Census and Business Analyst served as the primary sources forthe demographic overview. While population projections are an effective planning tool when used correctly, their accuracy is dependent on several factors including assumptions for birth rates, death rates, migration, and economic conditions. Assumptions are based on past trends and the best information available at the time, but assumptions do not always remain true, and unexpected changes can occur. Therefore, Monticello should use the population projections presented in this Market Study as a general guide and not as an absolute certainty. Moreover, the City should periodically review and update the population projections based upon new conditions. WSB & Associates, Inc. determined the Study Area to be used as comparison points. The area was based on geographic and man-made boundaries, community orientation, our knowledge of the area, and the dictates of the proposaL Considering these factors, we determined a Study Area to include the cities of Monticello, Big Lake, Buffalo, Elk River, Becker, and Rogers. In addition, Wright County and the State ' Business Analyst is a data processing service that uses ESRI technology, U.S. Census data, and American Community Survey data. 2I ��c�� MOTItIC;el10 WSB of Minnesota are also included as part of the analysis in the report. Though outside the scope of this report, it is important to note that surrounding communities' populations and available housing stock may affect Monticello's housing market. Figure 1: City of Monticello, MN � �: HISTORIC P(�PL1��A'I'��N CHANGE The total population of Monticello has grown substantially since the 1980s. Between 1980 and 2010, the City has grown by 597% adding 10,929 new residents, accounting for 18% of the study areas total growth. During the last U.S. Census period (2000-2010), Monticello saw a 38% growth with the addition of 4,891 new residents. Please refer to Table 1 A for further details. 3��age � � � Montic;ello WSB � Place 1980 Monticello N 1,830 Big Lake 2,210 Buffalo 4,560 Elk River 6,785 Becker 601 Rogers 652 Study Area 16,638 Total Wright Couniy 58,681 Minnesota 3,806,10 3 Source: U.S. Census Bureau Table 1-A: POPULATION CHANGE 1980-2010 US Census 1990 2000 4,941 7,868 3,113 6,063 6,856 10,097 11,143 16,447 902 2,673 698 3,588 27,653 46,736 2010 12,759 10,060 15,453 22,974 4,538 11,197 76,981 1980-1990 No. % 3,111 170.0% 903 40.9% 2,296 50.4% 4,358 64.2% 301 50.1 % 46 7.1 % 11,015 66.2% Change 1990-2000 No. % 2,927 59.2% 2,950 94.8% 3,241 47.3% 5,304 47.6% 1,771 196.3% 2,890 414.0% 19,083 69.0% 2000-2010 No. % 4,891 62.2% 3,997 65.9% 5,356 53.0% 6,527 39.7% 1,865 69.8% 7,609 212.1 o� 30,245 64.7% 68,710 89,986 124,700 10,029 17.10% 21,276 30.90% 34,714 38.50 o� 4,075,907 4,375,09 4,919,47 269,804 7.10% 299,19 7.30% 544,38 12.40 9 9 2 0 % Monticello's age distribution has remained relatively consistent from 2000 to 2010 with the largest age group being 25 to 34 in both census periods. The percentage of people 19 and younger decreased from 33.7% to 32.8% while the percentage of those 65 and older increased from 8.9% to 9.8%. Keeping with national trends, the median age increased in Monticello from 2000 to 2010 from 29.8 to 31.6. Please refer to Table 2-A for further details. Total Population Under 5 years 5 to 9 years 10 to 14 years 15 to 19 years 20 to 24 years 25 to 34 years 35 to 44 years 45 to 54 years 55 to 59 years 60 to 64 years 65 to 74 years 75 to 84 years 85 years and over Median age (years) Source: U.S. Census Bureau Table 2-A: MONTICELLO HISTORIC AGE DEMOGRAPHICS 2000-2010 Number 7,868 799 725 610 511 547 1,571 1,215 719 271 202 316 260 122 29.8 2000 � � � % 100.0 10.2 9.2 7.8 6.5 7 20 15.4 9.1 3.4 2.6 4 3.3 1.6 (X) ■ � � � Number 12759 1292 1101 969 823 731 2255 1991 1505 490 395 584 394 229 31.4 2010 � % 100.0 10.1 8.6 7.6 6.5 5.7 17.7 15.6 11.8 7.0 3.1 5.0 3.0 1.8 (X) 4��'age � �� Monticello WSB AA. ��ii� 1 dl. � �.FJ��AA.I.@��.f ��vA_ib> i�l �..IA_.e� l. l.�'4..^r"R.�.Fd��iT�.�.'�A".:. 4� Population projections are an effective planning tool when used correctly. They are based upon assumptions for birth rates, death rates, migration, and economic conditions. In 2010, the U.S. Census reported Monticello's population as 12,759. Monticello's estimated population was 13,568 in 2016, and is projected to increase to 14,383 in 2021. Again, it is impossible to know with certainty what Monticello's future population will be, but it is reasonable to believe that any future population increases resulting from new housing development or redevelopment in Monticello will be offset (to some extent) by population trends resulting from an aging population and diminishing household size. However, based on available data, Monticello's population will likely see a continued increase through year 202 L It is anticipated that Monticello will account for 18.8% of the Study Area's population growth between 2016 and 202 L Monticello's expected rate of population change is roughly equal to the County and double the State. Refer to Table 1-B: Projected Population Change: 2010-2021 for additional information. Place Monticello Big Lake Buffalo Elk River Becker Rogers Study Area Total 2010 12,759 10,060 15,453 22,974 4,538 11,197 76,981 TABLE 1-B: PROJECTED POPULATION CHANGE: 2010-2021 Change U.S. Census Bureau 2010-2016 2016 2021 No. °fo 13,568 14,383 809 6.3% 10,629 11,080 569 5.7% 16,093 16,699 640 4.1 % 23,984 24,891 1,010 4.4% 4,858 5,253 320 7.1 % 12,675 13,844 1,478 13.2% 81,807 86,150 4,826 6.3% Wright Couniy 124,700 132,801 140,895 8,101 6.5% Minnesota 4,919,479 5,541,669 5,720,647 622,190 12.6% Source: U.S. Census Bureau, ESRI forecasts 2016-2021 No. 815 451 606 907 395 1,169 4,343 8,094 178,978 % 6.0% 4.2% 3.8% 3.8% 8.1 % 9.2% 5.3% 6.1 % 3.2% The City of Monticello has developed its own projections based on building permits and certificates of occupancy over the past two years. The Minnesota State Demographer's 2015 Annual estimate was utilized as base reference point. It indicated the City had 13,311 residents at the end of 2014. During the 2015-2016 time-frame, the City issued permits for 307 additional housing units. Using ESRI's estimated household size of 2.72, this yields an estimated population of 14,146 at the end of 2016. In recognition of the trend of increasing household size and the moderate pace of new residential development and household formation in the City, the projections for the 2017-2021 period indicate an increase of 893 people (2.74 persons per 326 new units or 65 +/- units per year). The annual population increase of 179 is si�teen (16) people higherthan ESRI's annual projections based on U.S. Census Bureau data estimates. Again, ESRI's figures appear to have under-accounted for the sizeable number of new units in the community during 2015-2016. Basically, ESRI does not factor in the steady recovery in building permit issuance in this period and applies its projections to a lower beginning population figure than a more realistic number. Refer to Tables 1-C and 2-C for more information. S��age � � � Montic;ello WSB Year: 2010 2011 2012 2013 2014 2015 2016 Total TABLE 1-C: MONTICELLO HOUSING PERMITS & POPULATION FORECAST CALCULATIONS Single-Family Detached 2 2 22 49 70 38 61 244 Single-Family Multifamily Attached 0 0 0 � 0 � 0 0 = 3 = 0 � 3 0 = 6 = 136 T 0 66 12 202 POPULATION FORECAST CALCULATIONS Time-Frame "' New Housing Average HH Size New Residents Units (Permits x HH Size) 2015 - 2016 307 2.72 835 Time-Frame New Housing Average HH Size New Residents Units (Permits x HH Size) 2017 - 2021 � 326 (65.2 x 5) 2.74 893 Source: CityofMonticello, Minnesota State Demographer TABLE 2-C: POPULATION PROJECTION DIFFERENCE City of Monticello ESRI Difference Source: ESRI forecasts, The City of Monticello 2016 14,146 13,568 578 � 2021 15,039 14,383 656 Total 2 2 22 52 73 180 127 458 2014 Pop 13,311 2016 Pop 14,146 H��1SE�I�I,I� C;�It� �C;TE�`�� _" S AND F012E�ASTS Average 65.2 per year End of 2016 Pop 14,146 End of 2021 Pop 15,039 Annual Growth 179 163 16 In 2010, the US Census reported 4,693 households in Monticello and 3,164 families. A household refers to a housing unit occupied by at least one person. A household can involve a family living in a housing unit or it can involve unrelated people sharing an apartment or housing unit. A family refers to a household consisting of a householder and one or more other people related to the householder by birth, marriage, or adoption. In the future, it is likely that the percentage of married couples without children living with them will increase. The percentage of single parent households will also increase. Family households with no spouse present accounted for approximately 30% of the family households in Monticello in 2010. The average household size in Monticello in 2000 was 2.64 persons compared to 2.68 in 2010 according to the U.S. Census Bureau. These figures were projected to increase, according to ESRI, to 2.72 in 2016 and 2.74 by 2021. According to the American Community Survey 5-Year Estimates, Monticello has seen a decrease in family households, a decrease in households with children under the age of 18, and an increase in non-family households (see Table 1-D: Household Occupancy Characteristics for further details). These trends held true from 2009-2014 aside from an outlying year (2014 - highlighted in gray on Table 1-D) when there was an increase in family households, an increase in families with children, and a decrease in nonfamily households. This may have been caused by an increased availability of single- family housing units. These trends have implications for the demand of future housing types in Monticello. Since the average household size is projected to decrease and the trend of family households has been decreasing, a shift in demand will likely occur less for 3-4 bedroom, single-family homes and more for smaller housing units, and multi-family units. 6�Y�age � �� Monticello WSB TABLE 1-D: HOUSEHOLD OCCUPANCY CHARACTERISTICS - 2009-2014 Family Family with Children Nonfamily 1-person 2-person 3-person 4-or-more-person 2009 72.2% 47.0% 27.8% 22.0% 29.8% 18.8% 29.4% 2010 69.6% 46.4% 30.4% 25.1 % 25.8% 18.6% 30.6% 2011 68.5% 45.3% 31.5% 25.8% 26.9% 16.9% 30.9% 2012 66.8% 43.8% 33.2% 26.5% 25.3% 19.1 % 29.1 % 2013 66.2% 42.3% 33.8% 27.0% 27.0% 16.4% 29.6% 2014 68.8% 43.8% * 31.2% 24.9% 29.0% 13.7% � 32.4% Source: American Community Survey 5-year Estimates Between 2010 and 2016, the number of new households (4,693 and 4,936 respectively) has grown proportionally to the increase in population (12,759 and 13,568 respectively) suggesting stability in household size (see Table 1-E: Historic and Projected Households: 2010-2021). The number of households in Monticello is projected to increase by 5.3% by 2021 accounting for 182% of the study area's projected household growth. Place Monticello Big Lake Buffalo Elk River Becker Rogers Study Area Total TABLE 1-E: HISTORIC AND PROJECTED HOUSEHOLDS: 2010-2021 � US Census 2010 4,693 3,377 5,700 8,080 1,526 3,748 27,124 2016 4,936 3,566 5,872 8,452 1,635 4,232 28,693 Wright Couniy 44,473 46,817 Minnesota u 2,087,227 2,176,475 Source: U.S. Census Bureau, ESRI forecasts u 2021 5,199 3,720 6,058 8,780 1,772 4,610 30,139 49,383 2,258,733 2010-2016 No. 243 189 172 372 109 484 1,569 2,344 89,248 % 5.2% 5.6% 3.0% 4.6% 7.1 % 12.9% 5.8% 5.3% 4.3% Change 2016-2021 No. 263 154 186 328 137 378 1,446 2,566 82,258 % 5.3% 4.3% 3.2 % 3.9 % 8.4% 8.9 % 5.0% 5.5% 3.8% 7��age � � � Montic;ello WSB :�� 1�� Iri`� � I�1F:�C�T � �I L1�II��'� In addition to knowing how many people currently live and will likely live in Monticello, an understanding of the population's age composition can help the City plan for and provide necessary and desired services for its residents. The following provides an overview of the e�sting age composition of Monticello's residents and the anticipated changes in age composition that will occur through the year 2021 (see Table 1-F: Age Composition 2010-2021). Composition will remain relatively consistent outside of a slight decrease in the 25-34 age category (by 2.1%) and slight increase in the 55-64 age category (by 2.5%) which reflects aging baby boomers and a smaller succeeding generation. Extrapolating further past year 2021, Monticello can expect a surge of 7,438 residents entering the over- si�ty-five (65) age group as is indicated by the red box in Table 1-F. The age cohort closest to age si�ty- five (65) typically is comfortable downsizing their living situation. This is a substantial number of households who will be causing the demand in housing types to change in Monticello for future years as current projections do not have a corresponding offset in future age groups. TABLE 1-F: AGE COMPOSITION 2010-2021 _ � 2010 2016 Age Number Age 0 - 4 1,292 Age5-9 1,101 Age 10 -14 969 Age 15 -19 823 Age 20 - 24 731 Age 25 - 34 2,255 Age 35 - 44 1,991 Age 45 - 54 1,505 Age 55 - 64 885 Age 65 - 74 584 Age 75 - 84 394 Age 85+ 229 Median Age 31.6 Source: U.S. Census Bureau, ESRI forecasts HOUSING SUPPLY % 10.1% 8.6% 7.6% 6.5% 5.7% 17.7% 15.6% 11.8% 6.9% 4.6% 3.1 % 1.8% Number 1,206 1,150 1,033 924 901 1,968 2,065 1,771 1,240 751 372 185 33.1 % 8.90% 8.50% 7.so°i 6.80% 6.60% 14.50% 15.20 % 13.10% 9.10% 5.50% 2.70% 1.40% Number 1,293 1,226 1,163 949 903 2� 2� 1� 9 353 836 404 171 32.3 2021 % 9.00% 8.50% 8.10% 6.60% 6.30% 15.60 % 15.00 % 11.70% 9.40% 5.80% 2.80% 1.20% Number and Types of Housing Units The US Census indicates that there were 4,693 households in Monticello in 2010: 1,749 more units than identif�ied in 2000 (2,944). Data describing the household type, as shown below in Table 1-E, was only available as an estimate. The most recent data is from the 2014 American Community Survey. Roughly, 54.5% of the housing units in 2014 were single-family detached houses: this is considerably lower than Wright County (76.4%) and lower than the State of Minnesota (672%). In 2014, roughly 182% of the housing units in Monticello were single-family attached units (townhouses): this is almost double the figure for Wright County (9.8%) and much higherthan the State (7.5%). In 2014, the City also had a considerably higher percentage of multi-family housing than Wright County but was consistent with the State of Minnesota. Refer to Table 1-G: Housing Supply by Type - 2014, for more information. 8��jage � � � Montic;ello WSB TABLE 1-G: HOUSING SUPPLY BY TYPE - 2014 Housing Type Monticello Monticello Wright County Wright County Units % Units % Single-Family 2,663 54.5% Detached Single-Family 889 1820� Attached 2-4 Unit Multi- 123 2.5% Family 5+ Unit Multi- 787 16.1 % Family Mobile Home 422 8.6% Other - 0.0% Total Units 4,884 100% Source: 2010-2014 American Community Survey 5-Year Estimates 37,715 76.4% 4,863 9.8% 799 1.6% 3,609 2,335 50 49,371 7.3% 4.7% 0.1 % 100% � State State Units % 1,589,773 67.2% 176,173 7.5% 104,411 4.4% V 410,648 82,441 703 2,364,149 C;a��i�c�� z��1 _F`�r��t c�f ��x•-(��upi��i ��d I��t��:;v�,��i��i TJr�i�� 17.4% 3.5% 0.0 % 100% It is important to have a balance of owner-occupied and renter-occupied units. In general, many communities strive to have roughly 65-70% of their housing units owner-occupied and 30-35% renter occupied. In 2010, approximately 68% of the housing units in Monticello were owner-occupied; this is slightly lower than Wright County (75%), and about the same as the State of Minnesota (68%). During 2016, the City of Monticello's housing occupancy ratio (owner:renter) has changed slightly, with 69% of the housing units being owner occupied and 25% being renter occupied. In 2021, the housing occupancy ratio is forecasted to remain consistent with past trends. Refer to Table 1-H: Housing Tenure by Type - 2010, for additional information. Please be aware that there is roughly a 6% gap between owner occupied housing units and renter occupied housing units; this gap will be addressed in the following section. TABLE 1-H: HOUSING TENURE - 2010 - 2021 Owner Occupied Housing Units % Location: 2010 2016 2021 2010 Monticello 68.2% 68.7% 68.1 % 26.2% Wright Couniy 75.8% 74.7% 74.7% 14.9% State of MN 64.9% 64.0% 63.9% 24.0% Source: U.S. Census Bureau, ESRI forecasts Renter Occupied Housing Units % 2016 2021 25.3% 24.9% 15.8% 15.9% 24.8% 24.9% Vacanci�s Today, the City of Monticello faces an overall housing vacancy rate of 6.0%, which is 3.4% lower than the vacancy rate for Wright County, and 5.2% lower than that of the State. Monticello's vacancy rate has increased by 0.4% since 2010 and is projected to increase by 1% in 2021 which will still be significantly lower than the County and State. Both the County and State are projected to remain consistent through year 2021. The increase of vacant housing units in Monticello can partly be explained by the fact that the number of housing units in the City increased by nearly 6% from 2010-2016, and the housing market experienced a significant decline. Please see Table 1-I for further details. 9�Y�age � � � Montic;ello WSB TABLE 1-I: VACANT HOUSING FORCAST & COMPARISION — 2010-2021 Year City Vacant Units City Percent Vacant County Percent Vacant State Percent Vacant� 2010 280 5.6% 9.2% 11.1 % 2016 315 6.0% 9.4% 11.2% 2021 � 391 7.0% 9.4% 11.2% Source: U.S. Census Bureau, ESRI forecasts The rental housing vacancy rate is fairly low in Monticello. Table 2-I indicates specific vacancy rates for eight of the rental properties in the City. Ridgemont Apartments River Park View Apartrnents Ridgway Apartments Hillside Terrace Cedar Crest Apartments Broadway Square 7th Street Townhomes Monticello Crossings TABLE 2-I: RENTAL APARTMENTS — VACANCIES AND RATES � � Vacancy 0.0% 0.0% � 2.3% � 0.0% 0.0% 0.0% � I _ 6.7% 11.0% � � Source: WSB & Associates � Rates $566 - $610 30%of income $460 - $725 30%of income 30%of income 30%of income $825 $925 - $2,535 V�l�e of �ol�sin� The median value of owner-occupied housing units in Monticello in 2016 was $179,095 and is projected to increase by $30,314 in 202L Most housing in Monticello is valued in the range of $150,000 to $199,999, which is consistent with the County and State. In comparison to low and moderate valued housing, there is a relatively limited choice of higher valued housing units in Monticello. Only 16.5% of owner-occupied housing units have a value of $250,000 or greater compared to 38.8% in the County and 36.7% in the State. The median value of owner-occupied housing in Wright County was $216,395 and $205,288 in the State of Minnesota. Monticello needs to focus on later-stage housing opportunities to meet the demand for higher valued housing units. Refer to Table 1-J: Owner-Occupied Housing by Value -2016 for additional information. Table 2-J illustrates the affect that the Great Recession had on housing values in Monticello. Note that median sale price fell below median appraised value in mid-2007, then recovered and surpassed appraised value in 2011to regain a more traditional relationship. Data from Table 2-Jcame from the Wright County Assessor. lO�Page � � � Montic;ello WSB Value Less than $50,000 $50,000 to $99,999 $100,000 to $149,999 $150,000 to $199,999 $200,000 to $249,999 $250,000 to $299,999 $300,000 to $399,999 $400,000 to $499,99 $500,000 to $749,999 $750,000 to $999,999 $1,000,000 or More Median Value V Source: ESRI Forecasts $zio,000 $zoo,000 $i9o,000 $iso,000 $i�o,000 $i6o,000 $i5o,000 $i4o,000 $iso,000 TABLE 1-J: OWNER-OCCUPIED HOUSING BY VALUE - 2016 City Units 411 240 407 1282 672 269 217 65 18 22 5 $179,095 ■ � � City % 11.4% 6.7% 11.3% 35.5% 18.6% 7.5% 6.0% 1.8% 0.5% 0.6% 0.1 % � Wright County % 6.5% 4.8% 11.8% 21.4% 16.7% 11.5% 13.2% 6.4% 4.5% 1.8% 1.4% $216,395 � ■ � State % 6.5% 9.4% 14.7% 17.9% 14.7% 10.3% 12.2% 6.1 % 4.9% 1.9% 1.3% $205,288 CHART 2-J: MONTICELLO HOUSING VALUES THOUGH THE GREAT RECESSION 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Median Sale Median Appraised Owner Monthly Costs as Percentage of Household Income Housing decisions should not be based solely on the value of housing, but also the cost of housing expenses in relation to household income. In general, housing costs (taxes, insurance, principal, interest, etc.) should not exceed 30% of total household income. In 2014, only 19% of homeowners in Monticello had monthly costs that were more than 30% of their household income, compared to 27% in Wright County and 29% in the State of Minnesota (see Table 1-K: OwnerMonthly Costs as Percent of Household Income -2014). These figures suggest that housing was more affordable in Monticello than in Wright County and the State of Minnesota in 2014 possibly due to age and livability of housing units. This is an important strength for the City is it continues to grow and evolve into a regional center linking the Twin Cities Metro with the St. Cloud MSA. Monticello should consider a goal to maintain appropriate amounts of affordable housing to mitigate the negative impacts of a housing price correction like that seen during the Great Recession (2007-2010). This will allow for the community to see steady and modestly increasing home values and reduce the 11�Page � � � Montic;ello WSB likelihood of rapidly increasing home prices causing homeowners to be required to spend a larger portion of their income on housing. While the provision of affordable housing is one side of the coin, the City should also incorporate a plan to encourage the development and attraction of livable wage employment opportunities in the City. TABLE 1-K: OWNER MONTHLY COSTS AS PERCENT OF HOUSEHOLD INCOME - 2014 Percent of Household Income City Units* City % Less than 20% 1,286 47.0% 20.0 to 24.9% ' 611 � 22.3% 25.0 to 29.9% 611 11.4% 30.0 to 34.9% 169 � 6.2% 35.0%or More 361 13.2% Total 2,738 100% Source: 2010-2014 American Community Survey *Housing Units with a Mortgage � County % 39.0% 18.9% 14.8% 7.6% 19.6% 100% � State % 41.3% 17.8% 12.3% 7.9 % 20.8% 100% Contract Rent In 2014, rental housing units accounted for roughly 25% ofthe occupied housing units in Monticello. In 2014, roughly 88% of units had a monthly rent of $500 or more, which is higher than Wright County (87%), and the State of Minnesota (79%). See Table 1-L: Renter-Occupied Housing Units by Gross Rent - 2010, for additional information. Monthly Rent Less than $200 $200 to $299 $300 to $499 $500 to $749 $750 to $999 $1000 to $1,499 $1,500 or more No Rent Paid Median Rent Paid TABLE 1-L: RENTER-OCCUPIED HOUSING UNITS BY GROSS RENT - 2014 � .. - = City County State Units % Units % Units % 23 2.0% 141 2.0% 24,764 4.2% 57 4.9% 233 3.3% 31,166 5.3% 66 5.6% 582 8 2% 68 601 11 6% 367 31.2% 322 27.4% 306 26.0% 34 2.9% 0 0.0% $ 773 Total Specified Units ` 1,175 100% Source: 2010-2014 American Community Survey 2136 30.1% 2012 28.3% 1514 21.3% 188 2.6% 300 4.2% $ 778 7,106 100% 159,802 27.1 % 139,386 23.6% 105,182 17.8% 34,297 5.8% 27,938 4.7% $747 590,136 100% Renter Monthly Costs as Percentage of Household Income In 2014, 46.5% of renters paid over 30% of their household income in rent (see Table 1-M.� Gross Rent as Percent ofHousehold Income - 2014). This number is slightly lower than Wright County (47.7%) but higher than the State of Minnesota (46.1%). This suggests that there is not an abundance of affordable rental units in Monticello and efforts should be made to decrease rental costs. 12�Page � � � Montic;ello WSB TABLE 1-M: GROSS RENT AS A PERCENT OF HOUSEHOLD INCOME - 2014 Percent of Household Income Units Percent Wright County Less than 10% 0 0.0% 3.2% 10 to 14.9% 73 6.2% 8.1 % 15 to 19.9% 205 17.4% 13.6% 20 to 24.9% 262 22.3% 13.1 % 25 to 29.9% 72 6.1 % 9.1 % 30 to 34.9% 194 16.5% 9.7% 35 to 39.9% 86 7.3% 8.1 % 40 to 49.9% 102 g.7% 9 8% � 50.0%orMore 164 14.0% 20.1% Not Computed 17 1.4% 5.2% Total Specified Units � 1,175 100% 100% Source: 2010-2014 American Community Survey State 3.5% 8.2 % 12.3% 12.5% 11.4% 8.8% 6.1 % 8.1 % 23.1 % 6.0 % 100% �g� �nd :��ir�i��n�� i�1a��in� �t��l� In 2014, roughly 39% (1,910 units) ofthe City's units were constructed before 1990 (greater than 27 years old). Just 5.4% of the housing units in Monticello were built before 1939. Monticello has a relatively new housing stock in comparison to Wright County and the State of Minnesota, with 60.8% of housing units being built since 1990 compared with 50.4% for the County and 29.0% for the State. TABLE 1-N: YEAR STUCTURE BUILT � � Year Structure Built Monticello Units Percent Wright County 2010 or later 0 0.0% 0.7% 2000 to 2009 1,697 34.7 32.2% 1990 to 1999 1,277 26.1 % 18.5% 1980 t01989 748 r 15.3% 12.2% 1970 to 1979 654 13.4% 16.0% 1960 to 1969 63 1.3% � 4.9% 1950 to 1959 � 96 2.0% 4.1 % 1940 to 1949 86 1.8% = 2.3% 1939 or Earlier 263 5.4% 9 2% Total Specified Units 4,884 100.0% 100.0% Source: 2010-2014 American Community Survey LIFE-CYCLE HOUSING AND PROFILE OF HOUSEHOLDS � State 0.8% 14.6% 13.6% 13.0% 15.6% 9.8% 10.4% 4.8% 17.3% 100.0% The housing needs of a community relate to the demographic profile of the household. Typically, households move through several life-cycle stages; including entry-level households, first time homeowners, move-up buyers, empty nesters/young seniors, and senior citizens. The following describes each of these household types and the effect that they have on housing demands in Monticello. 13�Page � � � Montic;ello WSB E�akr��-1J��1 ��us�ia�l�s People in the 18 to 24-year-old age group typically leave their childhood home and establish their own household. They often rent a house or an apartment because they generally do not have the income and savings needed to buy a home. In addition, many people in this age group move frequently, so they are hesitant to buy a house. They are also more likely to share housing with other unrelated people of similar age. The entry-level household population in Monticello will fluctuate annually. Many Monticello residents that graduate from high school move to other communities to attend a university or to pursue other job opportunities. In the long term, unless current conditions and trends change, Monticello is projected to see a 0.5% decrease in the 15 to 24-year-old age group by year 2021 (Table 1-F�. Job opportunities aimed at retaining this age cohort need to be strongly considered. Nevertheless, there will always be a strong need to provide affordable housing for people of all ages. First-Time �Iomeowners First time homeowners are typically in their 20s and 30s. They are usually "move-up" renters, meaning they "move up" from an apartment to a home. They are often married with young children, but increasingly, first time homeowners are single. They are prone to moving within several years of buying their first home for several reasons; including, increased salaries allow them to move to more expensive housing, children may require larger housing, and job opportunities may require that they move to another community. Monticello is projected to see a 0.3% increase in the 20-44Z age group by year 2021 (Table 1- F�, which could translate into an increased demand for lower-end housing units. I�1a��-�LIp I��r� Move-up buyers are typically in their 30s and 40s. They move up from the smaller, less expensive house that they had previously purchased. From an economic growth perspective, this is an important age group of people. Typically, move-up buyers have children in school and an established career. They are less likely to move to another community and start over. Also, professionals who are moving to a community to advance their career are generally looking to move to a more expensive house than what they had in their previous community. Monticello is projected to see a 0.5% decrease in the 25-543 age group by the year 2021 (Table 1-F�. This is 0.3% lower than the study area average of a 0.8% decrease. This may be an indicator that there is a shortage of available units for move-up buyers. Monticello must continue to ensure that it has adequate choices for those who are looking for move-up housing that will satisfy their needs until they are in their SOs and beyond. E�aa�t�� r� ��d �'��aa� ��ni��°s Empty nesters and young seniors are generally in their SOs, 60s, and early 70s. Often, their children have moved out of their house and left them with a larger house than needed. Empty nesters and young seniors often want to live in a smaller home, like a townhouse or patio home, that has less maintenance. The baby boom generation in Monticello is projected to increase by 0.6% by year 2021 (Table 1-F�. A notable increase in apartment rentals in Monticello by members of this population segment is likely to occur. A large portion of these individuals will likely desire higher-end apartment complexes with quality z People in their 40s were included due to U.S. Census age groups. 3 People in their 20s and SOs were included due to U.S. Census age groups. 14Ii�� MOTItIC;el10 WSB amenities so they can maintain their current lifestyles. �enir�r ��z��s This age group is generally in their late 70s and older and are often looking for low maintenance or assisted living housing. As the population ages, Monticello must continually ensure that it has adequate housing to meet the needs of seniors. The City is projected to see a 0.1% decrease in the 75 and older age group by year 2021 (Table 1-F�. Monticello should continue to strive to be a senior-friendly community that values the contributions of seniors, promotes positive intergenerational interactions, considers the needs of seniors in community planning, supports the efforts of seniors to live independently, and acknowledges the role that family, friends, and neighbors play in the life of seniors. �p��i�l .�T��is Housing for those with special needs includes housing for those with mental and/or physical disabilities or health issues and those who need temporary or transitional housing. The number of people with special housing needs is expected to increase as the population of Monticello continues to age and grow. ��r�i��° I��si�� _�r�� Monticello City staff inembers have identified a need for senior housing market analysis. Based upon population growth forecasts, household forecasts, and the current age of householders, we can extrapolate what the senior housing market will require. Table 1-O: Senior Housing Projections 2010-2021 illustrates how the change in the sixty-five and older population will affect the number of occupied housing units. By year 2021, Monticello will need 940 units suitable for senior residents to meet demand, which is an increase of 136 units from 2010. We consider senior housing to be any housing unit (affordable, renter, duplex, patio house, etc.) that meets the needs of residents si�ty-five (65) and older. Year Total Population Total Occupied Units 65+ Population TABLE 1-0: SENIOR HOUSING PROJECTIONS — 2010-2021 � � 2010 2016 2021 65+ Population Percent Units Occupied by 65+ Population Percentage of Units Occupied by 65+ Population Source: U.S. Census, ESRI Forecasts, WSB & Associates 12,759 13,568 4,693 4,936 1,207 1,308 9.5% 9.6% 804 871 17.1% � 17.7% � 14,383 5,199 1,411 9.8% 940 18.1 % 15�Page � � � Montic;ello WSB AFFORDABLE HOUSING Affordable housing is important to a strong economy and a healthy community. Increasingly, housing is not affordable for many working families and the lack of affordable housing for people of all ages and incomes causes families stress, dampens productivity and stifles job growth. Various organizations define "affordable housing" in many ways. The Department of Housing and Urban Development (HUD) generally defines housing as affordable if it costs less than thirty (30) percent of a household's income. However, HUD's Section 8 Income Guidelines are the basis for most affordable housing programs. Section 8 guidelines define low and moderate incomes on a sliding scale, depending on the number of persons in the family. For example, a four-person household is considered "moderate income" if their family income is eighty (80) percent of the area's median family income. Most housing affordability programs and data place emphasis on creating owner-occupied units at eighty (80) percent of the median family income (moderate income) and rental units at fifty (50) percent of the median family income (low income). Since low income persons are typically renters, the definition of "low income" is tied to the number of persons in each unit. This study identifies "affordable owner occupied units" as those affordable for moderate income families (eighty (80) percent of inedian income). Affordable rental units are based on fifty (50) percent of the median income and reflected on a per capita and per family basis. It is very important to note that the definition of "affordable" in terms of a dollar amount will continue to change as the cost of living increases and interest rates change. Therefore, the City should periodically review income/housing statistics and update the definition as warranted. Factors such as interest rates will impact housing affordability in both a positive and negative manner. In��rr�� :�� f _F��_ �'�� ,�_� Looking at income data is also important when predicting future housing demands in the City of Monticello. In 2010, the median household income in Monticello was $68,135 ($67,963 in the County) and the largest employment industries were educational, health and social services, manufacturing, and retail trade. By 2016, the median household income increased significantly to approximately $76,954 ($73,798 in the County) and the top employment industries were the same. Monticello's median household income is projected to increase to $85,218 by 2021 ($83,257 in the County) according to ESRI Business Analyst. Income distributions as reported by the U.S. Census Bureau can be compared to affordability standards to determine how many households and families in the City of Monticello may require affordable housing. Table 1-P: Monticello Affordable Housing Units Requirements — 2016 & 2021 depicts the number of households (renter and owner) that may require affordable housing (based on family income). The gray shaded area indicates family incomes of 80% or less of the median household income ($61,449 in 2016 and $68,174 in 2021). The red box indicates family incomes of 50% or less ofthe median household income ($38,406 in 2016 and $42,609 in 2021). By 2021, 2,214 owner households may require affordable housing, and 1,629 renter households may require affordable housing. 16��age � � � Montic;ello WSB Annual Household Income Less than $15,000 $15,000 to $24,999 $25,000 to $34,999 $35,000 to $49,999 TABLE 1-P: MONTICELLO AFFORDABLE HOUSING REQUIREMENTS — 2016 & 2021 2016 2021 � Number of Households 378 286 332 543 % of Total 7.7% 5.8% 6.7% 11.0% $75,000 to $99,999 887 18.0% $100,000 to $149,999 1,262 25.6% $150,000 to $199,999 341 6.9% $200,000 and over 74 1.5% Total Households 4,937 100% Source: U.S. Census Bureau, ESRI forecasts Number of Households 411 271 316 631 937 1,564 472 85 5,199 % of Total � 7.9 % 5.2 % 6.1 % 12.1% 18.0% 30.1 % 9.1 % 1.6% 100% The following table illustrated the maximum affordable housing costs for renters and owners based on median income. A direct relationship exists between monthly affordable housing costs and median income. Steps should be taken in Monticello to keep housing costs affordable as housing values increase such as maintaining current affordable housing stock and assuring opportunities for the construction of new affordable housing units. TABLE 1-Q: MAXIMUM AFFORDABLE HOUSING COSTS (RENTER & OWNER) - 2016 & 2021 Year Median Income Affordable Income: 50%Renter, 80%Owner 30% of Affordable Income Monthly Housing Cost Source: U.S. Census Bure+ 2016 $76,811 $38,406 $11,522 $960 �u, ESRI forecasts Renter � _ Owner 2021 $85,218 $42,609 $12,783 $1,065 2016 $76,811 $61,448.80 $18,434.64 $1,536.22 OWNER-OCCUPIED HOUSING MARKET ANALYSIS 2021 $85,218 $68,174.40 $20,452.32 $1,704.36 This section analyses the City of Monticello's owner occupied housing market. Analyzed in this section are single-family home resale trends, home foreclosures, actively marketing subdivisions, pending subdivisions, interviews with local real estate professionals and others involved in the local housing market to gain their feedback on existing market conditions and trends. The Wright County Assessor's Office provided data on resale trends. The following are key findings regarding the owner-occupied housing market. Home Resale Trends The average resale price of single-family homes in Monticello in 2016 was $202,073 and there were 342 sales. This was an increase in price from 2015 ($169,025 and 266 sales). While some ofthe price changes from year to year can be attributed to the age and quality of the homes sold during a year, an 17�Page � � � Montic;ello WSB interview with a realty expert indicated the average resale price likely bottomed out in 2011 and slow price appreciation is expected to continue to bring prices back to a more market-neutral level. Median sale price is often a more reliable measure of price trends. In Monticello, the median sale price of single-family homes increased from $171,500 in 2015 to $185,269 in 2016, which reflects an increase of 8% for that period. TABLE 1-R: RE-SALE TRENDS OF EXISTING SINGLE FAMILY HOMES � � — Year Number of Sales Median Sale Price Average Sale Price 2015 266 $171,500 $ 169,025 2016 342 185,269 $ 202,073 Source: Wright CountyAssessor's Office; WSB & Associates, lnc. Table 1-S shows the number of home sales in 2016 by the decade the homes were built. In 2016, 181 of the 342 (52.9%) single-family homes sold were built during year 2000 or later. Similarly, Table 1-N showed that approximately 34.7% of Monticello's owner-occupied single-family homes were built after 2000. Only 11.7% of the sales in 2016 were homes built prior to 1980. This highlights the relatively large supply of newer homes available to potential new residents moving to the community. Table 1-S also highlights how the median sale price decreases as the homes get older. Most homes sold in Monticello in 2016 for under $170,000 were built before 1980. Homes priced above $180,000 were generally built since 2000. TABLE 1-S: HOME SALES BY DECADE BUILT 2016 Decade Number of Sales 1970 and Older 27 1971-1980 13 1981-1990 23 1991-2000 2001-2010 2010-2016 Total: � Source: Wright CountyAssessor's Offrce 98 132 49 342 � Percentage Median Sale Price 7.9% $151,509 � 3.8% — $166,000 6.7% $157,500 28.7% $181,467 38.6% $193,951 14.3% $221,050 100.0% - I Beginning in the middle ofthe last decade, home foreclosures began to have a significant impact on housing markets across the nation. Initially, most foreclosures occurred among buyers with lower credit ratings who had sub-prime mortgages. Gradually, foreclosure activity increased as jobs plummeted and home prices sank precipitously. Foreclosures have gradually decreased over the past few years as housing markets have stabilized. Table 1-T presents foreclosure data for Wright County and Minnesota. The data are considered "Sheriff's Sales Foreclosures" and was compiled by the Minnesota Homeownership Center and published on their website. There were 7,212 foreclosures in Minnesota in 2015. This was down from 8,313 in 2014 and significantly lower than 11,834 in 2013. Wright County had 205 foreclosures in 2015, down from 240 in 2014 and 372 in 2013. 18�Page � � � Montic;ello WSB Wright County has maintained a higher foreclosure rate than Minnesota. The foreclosure rate, as shown in Table 1-T, is defined as the number of foreclosed mortgages as a percent of total residential parcels. In 2015, Wright County's foreclosure rate was 0.49% compared to 0.40% in Minnesota. Foreclosures have hindered Wright County's housing market as they have other areas of the State. Out of 87 counties in the State, only 6 had a higher foreclosure count than Wright County. Those counties were Saint Louis, Washington, Dakota, Anoka, Ramsey, and Hennepin. TABLE 1-T: HOME FORECLOSURES WRIGHT COUNTY, 2013 to 2015 Wright County Minnesota � Year Number of Foreclosures Foreclosure Rate Number of Foreclosures Foreclosure Rate 2013 372 0.89% 11,834 0.64% 2014 � 240 0.57% 8,313 0.46% 2015 205 0.49% 7,212 0.40% I Sources: Minnesota Homeownership Center, HousingLink �,i��l��"��a�i�y I�i�� Based on a review of various Realtor websites, there were 77 single-family homes actively listed for sale in Monticello in November 2016. The homes were unevenly distributed by price range; weighted heavier toward higher priced homes. Only two (2) homes were priced below $120,000 and 68 priced $150,000 or higher listed for sale. Four (4) homes were listed for sale between $100,000 and $150,000. The average list price of homes on the market was $271,759 in November 2016. While homes typically sell for less than the list prices, the current prices suggest that Monticello should continue to see appreciation in home prices since the low point in 2011. Existing Lot S�u�apl� There are currently a limited number of lots available to accommodate new single-family homes in Monticello. The City is experiencing a shortage in buildable lots as bank owned lots have been purchased and developed. As of the end of 2016, there are a total of 74 single-family lots and sites that can accommodate up to 101 multi-family units. Permit numbers have steadily recovered from the 2010 and 20111ow point (two single family permits issued each year) to the issuance of 61 single-family permits in 2016. Prior to the recession, the City issued more than 300 permits annually. During that time (2002- 2007) housing lots were selling in the $70,000-$90,000 range. The sale price of lots fell by more than 80% after the recession. Bank foreclosures of developers resulted in existing lots becoming bank owned and ultimately being developed quickly. Many of the approved single family pre-plats were not completed due to the diminished demand for new homes. Refer to Table 1-U for full details. 19�Page � � � Montic;ello WSB TABLE 1-U: AVAILABLE PLATTED & UTILITY SERVICED LOTS Development Single Family Lots Multi Family Lots Featherstone 15 0 Hunters Crossing 0 0 Hillside Farm 22 0 Spirit Hills 0 5 SunsetPonds 21 0 Carlisle Village 7 � 17 Autumn Ridge 0 79 Eastview 1 � 0 Club West 7 0 Pine View 1 0 Total � 74 101 Source: CityofMonticello In mid-2016, the average price of a lot was about $20,000. As the housing market has improved and lot prices have increased due to the limited supply, it has allowed for an increase in prices for new single family lots. The new housing price situation is further aggravated by the limited number of remaining small home builders which have either closed or changed professions due to the recession and is now resulting in higher construction costs. According to a Monticello realty expert, another critical factor impacting the demand for single family homes is the degree to which first-time home buyers are riddled with college debt and unable to afford the price of a new home. The interest rate for new home loans has increased slightly from an all-time low of 3.4% during the depths of the recession to appro�mately 425% in late 2016. Monticello's average re-sale price currently sits in the five to seven percent range and is expected to go up. There are no major complaints or concerns among current homeowners looking to move up into more expensive homes. However, Monticello currently lacks availability of lots that are attractive for higher end housing. The community should focus on the development or attraction of a high-end housing development. The two-major upper-bracket areas (Carlisle Village and Briar Oakes Boulevard) have limited availability of undeveloped lots and are surrounded by agricultural uses. City-annexed land west of Monticello provides development opportunities but is unattractive to developers looking to build higher-market homes due to the lack of natural amenities and features generally associated with high end housing areas. �i�a�i�-f�rrril�� I��a�zsia�� 1'�i•mits The City of Monticello issued si�ty-one (61) building permits in 2016. This number is up 38.6% from 2015 when forty-four (44) permits were issued (6 attached and 38 detached). To meet demand, the City will need to continue this trend. Please refer to Table 1-C for additional information. 20��age � � � Montic;ello WSB RENTAL HOUSING MARKET ANALYSIS �i%r�i��k�l� F2��i�1 [-�4rasifi� This section of the report analyses the affordable rental housing market in Monticello. The analysis includes data collected from Affordable Housing Online. All the properties in this section are general occupancy. As shown in the demographic and housing stock overview sections, there are approximately 1,175 renter households in Monticello which is down 127 households from 2010. The overwhelming majority of renters live in larger multifamily properties. There are approximately 2,923 renters (24% of total population) living in Monticello. As of 2014, 25% oftotal Monticello households were renter-occupied, compared to 15.6% for Wright County, and 28% for the State of Minnesota. Properties that include units assisted by federal programs were surveyed as part of this analysis. In total, eight (8) properties with 322 units were surveyed. Twenty-six (26) percent of the City's rental units are federally subsidized. Monticello's federally assisted affordable rental housing stock includes properties financed through the following programs: TABLE 1-V: FEDERALLY ASSISTED AFFORDABLE RENTAL HOUSING STOCK Program Properties Section 8 2 LIHTC 3 � RD 515 6 Units 74 102 189 Total � 9 307 Note: The total does not necessarily equal the sum of each program as some properties may participate in multiple funding programs Source: Affordable Housing Online The average number of units per property for affordable rentals in Monticello is 34. The largest federally assisted affordable rental community in Monticello is Ridgemont Apartments at 48 units and the smallest is Hillside Terrace II at 12 units. Two apartment properties provide housing for seniors totaling 59 units. A11307 units include some form of rental assistance (like Section 8) to make rent more affordable for very low income families. In Monticello, a family of four must earn $42,900 or less to qualify for Section 8 housing. See Table 1-W.� Federally Assisted Units by Property for details. Name Broadway Square Cedar Crest Apartments Hillside Terrace -- Monticello Hillside Terrace II Ridgeway Apartments River Park View Apartrnents Ridgemont Apartments TABLE I-W: FEDERALLY ASSISTED UNITS BY PROPERTY Sec 8 LIHTC RD 515 38 - � - 36 - - - � - � 12 - - 44 - 31 31 - - 48 Source: Affordable Housing Online Note: Not all unit counts are available from HUD � � Senior 28 31 21�Page � � � Montic;ello WSB Photographs of Monticello Apartment Buildings Image 2: River Park �'�e� ' �:, '�ents ;ici»s�c .r: �..�xus�i �.. � a �. _ _ ,<v� ��_ r .��, � �� ' �+�1 r► - � � �i�� Ill�l�il[I�� '�� W� � _ra::ia.i: + _ :laz.ica��•�±�,•�',- Image 6: Ridgeway Apartments :�'� r r , - 1 . � � ��(i . � I �I I'-J „ '� , r�� . � '_ -'— _ . � -_ " ` - �� . . ` .. ,_"" �-1 Y : - ^'�` � �' � . _ " �--�-�=��"`'�- - �I�Y�y � � Montic;ello Image 1: Ridgemont Apartments �rw.�-- �'. ,w'.x.. , Image 4: Cedar Crest Apartments 0 � � ti !-, ' �� e� �r�?� ��..* �`1��¢ _ ��,,: � r ..�t.: �. '�' �'`; � ' � � �-��, r,�*r� � — �� `?"y r�-= � � �, . �._ - � �+ � � � :�'�. ' �� 4 � . : � � J� �� t. � � �� — �� -`=�' _ — _ _ ---- . Ima�e 5: Broadway Square �� il- „�rar; t�.,� � , � �! - �` �9 -.� �=� - �,.-.-.. � 22�Page � WSB a ?�t � � —?CPiv�d�i�ir— � ia �' , :,�, u . ,�� ;("%y v.., �+, x+-'"' �ii�� :�.� t �. . F.� 6 �t�".��.. Housing Development Opportunities �&s��a<,�c �. R�=.�r�di�;�!!�a �'��c��F�s„,�� 1■�"i�� 'J��`�I� _ . ■. o�, ; ■r ,� � �, o.�a � o, . �, . � "� �. - •�. , ° ,'� �q� .� . � . �� --�� I�+'^`it a.: �� " —:� k� -i�l� f-' ' . �.__ `�� " .. � � '">Ai.W.�'��.a --""�r � f 7�� J,� i ..� �! ' �. � I lyl'R'�� ` ' •.,r.... �1y � — .... � � �.�.� -- � �'_ There are currently three future housing development sites that have been identified in Monticello. Site A is an 11.93-acre area located at 506 Territorial Road and is the site of the historic registered Rand House which was the home of the Minnegasco founders. This site is zoned low density residential (R-1) and performance-based overlay and may be used for the development of a senior housing apartment complex with si�ty to eighty units (60-80) in addition to forty (40) patio homes. The Rand House would be used as a community center and guest home for the development. Rezoning this area using the planned unit development (PUD) process may be the best option to allow for this higher density development. The uniqueness of the property and the City's need for additional senior housing units could be used to justify the PUD. Also, we believe the proposed housing development is consistent with the purpose of the performance based enhancement district. Site B is a 6.4-acre area located north of the lake on the corner of Elm Street and 7t'' Street West. It is zoned for medium density residential (R-3) and may be used for multifamily, senior, or market-rate development. It is within proximity to the Cub Food Store and the Community Center. The site's southern exposure to the wetland pond offers an attractive natural amenity. Finally, Site C is located at the corner of Locust Street and 3rd Street West and has already been approved for the construction of a twenty-three (23) unit three story residential development. As stated earlier in the "Senior Housing Market" section, from 2010-2021 Monticello will need to construct 136 new senior housing units to meet the forecasted demand. Sites A and B have both been identified as ideal locations for senior housing development. Depending on the number of units permitted on each of these sites, and on how many senior housing units have been constructed from 2010-2016, Monticello may need to identify more sites suitable for senior housing. 23�Page � � � Montic;ello WSB Image 9: Site � \ ,.� C � �� 7 � � �_ 7sesasno�u�a �' .._ 7 'e' 4;�hr. '►. :t'�� A'°� v S { �i� y,� �� a.. �� t5i5l/Di�i�3G11�• . ` �r _ ' ; y�"' �. _ ` :.. ��. !� ' ''., j. +" i }�, ..,�ti � � 1 � ! �' �� i � � ` :" issiisooso^�/'� E • ��I � / �.�?...�,... --.� --- � " --�:,.75511�::._— . � � ' ` � r , � � °1 ,vu.. ^�' �nLF�COURSE RD * 4 �i5550u1� a1=00��* ` ` ,_� �_� arks W .�� r� t � o ' g r.'r a "' y w� r ,� f a ' S m. .tiQ 'u:., ,r� . ,i Md ' - - �. THs��., �� o : -,wi � , .0 �, r N 2� - � ,� ; a i ,-ro v� � .y � ' � u, �. �r- � �� ,�i�so��sr�atn�o� � � .'"�+y� - �`,Ir— y-E': ,i`., ' , .,"� u o , f �4. W .' �, � -pph�'� 1 C f � ;:C' , .- � � `�- 2 \ j � 'a I 2 T��'F •+�,a � �W� 1 � �' i� 4,� w r r. V'i10- i�. . _ . .: _ ' � . ;;P, 2 , ' F15 033 1`� 155509101402 '� '. �.� }5550�101s�N � y ..1 ,S� ' � �. �` ) 6 7 2 5 T' ti `._ #� 355033900074� � ��`�'y��, ��f � i P :. � n '_ , \ 5`l�� - � f ' ,.,. �r� . � g � � I-1.� �I.`+ . r,�sssuo�ao rssz2�aooaio . � . ' � �1 � �. .3 ` �155y5�Vby5�'—tdlt:f 5550U11]1�5 • /`�� .�� j � -� - �'� " 4 ..� 3 � �4� a } � .. _. r. zY� t ; .: �,��e/ .. . •'�':� , � ':" fs•1 � � g ��15522600d029•�..� � i55b68 � ``4 �� D _ !L_ _ IiSR �' . �'y�+•. -.� . -� . -,:. �^-..` .,. �.�-_ - .. . .. . . , . Image 11: Site C 24�I�age � — � Monticello tNSB DEMAND ANALYSIS AND CONCLUSIONS This section of the report utilizes data collected in the previous sections to calculate demand for owned and rental housing in Monticello through 2021. �lc��u�ing 1)��t��r�d w�nnl��is Table 1 X outlines our calculations for owner and rental housing demand in Monticello from 2016 to 2021. Demand for additional housing in Monticello will come primarily from household growth. Pent-up rental will also be a source of housing demand. Monticello is projected to add 267 households between 2017 and 2021. This correlates to the need for 267 housing units to accommodate the household growth, or an average of about 53 new units annually. As discussed above, Monticello will experience strong growth among older adults through the end of this decade; it will also see strong growth among younger populations (25 to 34), as it did last decade. The growth of these younger households is creating demand for rental housing and entry-level homes. TABLE 1-X: POTENTIAL HOUSING DEMAND OVER NEXT 5 YEARS � 2017 to 2021 A. Household growth 267 B. Replacement Demand � 10 C. Total housing growth (A+B) 277 D. Percent rental demand E. Rental housing demand (C x D) F. Pent-up rental demand G. Total rental housing demand (E+F) Range to occur over ne� 5 years: 25% to 35% 69 to 97 40 to 60 109 to 157 H. Percent owner demand 65% to 75% I. Total owner housing demand (C x H) 180 to 208 Sources: US Census Bureau, ESRI forecasts, WSB & Associates, lnc. Replacement demand is generated from the loss of housing or the need to replace housing units that are physically or functionally obsolete. A review of Monticello's housing stock from the U.S. Census revealed that there are about 340 housing units built prior to 1950. It can be assumed that these homes' values are decreasing at a faster rate relative to other types of housing. Most of these homes are in good condition4, and we estimate that only about one-half percent per year should be removed annually from the housing supply because of obsolescence, which equates to two units every year or ten units over the next five years. A healthy rental market is expected to have a vacancy rate of about 5% to allow for sufficient consumer choice and unit turnover. With pent-up demand, persons who would normally form their own rental households, instead decide to move in with other persons in a housing unit, live with their parents, or live in housing outside of the area. In 2016, Monticello issued a building permit for a 202-unit multi-family complex indicating pent-up rental demand. Based on past apartments buildings (95 units built in 2000/2001); this newest apartment should meet the pent-up demand for the next fifteen years. The pent- ' Good condition meaning that these homes do not need renovated or demolished. 25Ii�� MOTItIC;el10 WSB up demand range of forty to sixty (40 to 60) in Table 1 X is the result of a 95% occupancy rate and the average pent up demand caused by a11297 units. We predict an annual pent-up demand of ten (10) units per year. Over five years, that would be fifty units, giving us the range of forty to sixty units. Based on demographic and market trends, we project 25% to 35% ofthe housing demand from household growth and replacement-need in Monticello between 2017 and 2021 will be for rental housing. There is a total of demand for appro�mately 109 to 157 rental units. This demand is for all types of rental housing — from subsidized to market rate general occupancy housing to senior housing. An estimate of 65% to 75% of housing demand in Monticello between 2016 and 2021 is projected to be for owner-occupied housing. This equates to demand for 180 to 208 homes from 2017 to 2021 (45 to 52 homes annually.). This would equate to the projected demand for single-family homes and townhomes. Please see Table 1 X for more details. (Jih�r i-��:��i�� a�inm��ti�r�� Proj ected demand for new housing products in Monticello through the remainder of the decade from current and future residents is outlined on the preceding pages. In addition, there are other programs that Monticello can implement to assist in meeting local housing needs and improving the quality of the existing stock. The key programs/initiatives that Monticello should pursue are outlined below. • Monticello should work towards converting vacant housing units into renter-occupied to reach 30-35% of total housing units. In its current state, the rental housing inventory sits at 25% of total housing units. As seen in Table 1-I, the City is projected to have seventy-six (76) additional vacancies. • Monticello needs to maintain its low housing costs and low percentage (19%) of residents paying more than 30% of their monthly household income on housing to reduce the negative impacts from another housing correction like 2006-08. This percentage is much lower than county and state averages (27% and 29% respectively). • Monticello should make efforts to increase affordable rental housing inventory so they are available for younger generations of citizens as well as baby-boomers and empty-nesters. The latter two cohorts of residents are downsizing their living spaces and need affordable places to live. Combining affordable housing options with job opportunities could lead to an increase in 19-24-year-old residents. • Monticello should also ensure an adequate amount of higher-end rental units for higher-income individuals looking to retire and downsize their living quarters. While these individuals are looking for smaller spaces, they are not willing to surrender the amenities to which they have grown accustom. • With the expected increase in the percentage of residents over the age of sixty-five (65), Monticello needs to increase their stock of senior housing units. Refer to Table 1-O for projected figures. • Monticello should consider the development of housing in the downtown area to accommodate young seniors and millennial residents. Both cohorts share the same preference for areas that are rich with amenities and walkable, and housing properties that have lower maintenance requirements. 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IAii �� „f � J� T,{�' ' • +R � �h ` s• . r_ ;��jl� � �- : ��r;� .� '� �' � : � ' � ��.. �� _ � .� _`� �, 7�� . � � "� ��[._y,,y�� . � � .�'� r,.''� f `1'i� . - � �. _+ 3 `�' �� n � '` ..`�+, � '�'" � .' ' +`!' �, . � �`,. ; �r . . . , . �- �� ' I�� r� �" , � �` t� " * .../�* � _ . � •�' � .•�� -� 4 �� - � � 'sr � `� � ` � - ,�` �- " �,� a , -as �'"'rr �;� � `�'i� , , s+44 'r , - �,� . J �-- �_. , �, . t �`'� J � ' .^�� _ .�� _ . _s i�' • -, ' ' � �•' - I " 4• ^, `'• • . "'':�� ". .- . �, r.__ -_ �� * • ' � - ' �i 1��f _ . �. •.�� ., , � � `��''��y, ' '� '�,.� ;,�� , . �''�;��► �, . �! �'� j�` '"��"�G 2�� ;� L �� Monticello WSB EDA Agenda: 05/10/17 6. Consideration to review proposed amendments to Outdoor Storage Standards for Industrial Zoning Districts (AS) A. REFERENCE AND BACKGROUND: Staff is asking the EDA for review and comment on proposed amendments to the City’s zoning ordinance for outdoor storage in the I-1 and I-2 industrial zoning districts. Recent discussions by the EDA and IEDC regarding the availability of industrial land and the tools needed to achieve the City’s comprehensive plan goals for attracting and retaining living wage jobs and diversification and growth of tax base have led to a staff review of the current zoning ordinances pertaining to industrial use types and more specifically to outdoor storage. The use of land for the construction of bricks and mortar buildings which produce both jobs and tax base is at the core of the rationale for the proposed changes to the outdoor storage regulations. One of the primary goals for the amendment is to balance the need for outdoor storage for industrial uses with the preservation of industrial land for buildings and jobs. In addition, the proposed amendments attempt to address the comprehensive plan goal of encouraging step-up development overall and with maintaining compatibility with other land uses. At present, the City allows outside storage in the I-1 and I-2 zoning districts as a permitted use in an amount that may be as large as the principal building of the principal use of a parcel. As such, large amounts of industrial land may be used to support outdoor storage accessory uses versus land which could be used for new or expanded principal use buildings. In addition, the standards for the storage in terms of screening, fencing and surfacing lack needed clarity and clear references to other sections of applicable code. The proposed amendments address these issues through the following:  Addition of a requirement for conditional use permit for outdoor storage in situations where it is proposed to be located adjacent to non-industrial uses in both the I-1 and I-2 districts.  Limiting the allowable area for outdoor storage specific to the district. Less outdoor storage would be allowed in the I-1, while the current allowance for outdoor storage in the I-2 District (up to the size of the principal building) would be maintained.  Limiting the locations of outdoor storage to side and rear yards.  Refined standards for fencing in both I -1 and I-2 Districts.  Requires surfacing of outdoor storage and a reference to City codes for erosion control and stormwater management to support compliance with MPCA industrial stormwater permitting standards and City stormwater management best practices. EDA Agenda: 05/10/17 Zoning ordinance definitions for light industrial and heavy industrial uses and allowable principal uses within each district are included for reference. Also attached are current examples of outdoor storage in Monticello. The examples vary in the amount of outside storage relative to the principal building. The proposed amendments to the ordinance were provided to and discussed by the IEDC. The recommendations of the IEDC are shown in red. The IEDC recommended approval of the proposed amendments subject to these recommended changes. The proposed amendments are scheduled to be heard by the Planning Commission in a public hearing on June 6th, with Council review in late June. A1. STAFF IMPACT: Staff have spent approximately 10 hours in reviewing the ordinance, drafting the amendment and preparing information for the various boards. A2. BUDGET IMPACT: No impact to the EDA. B. ALTERNATIVE ACTIONS: This item is for EDA reference only. If the EDA is so inclined, the board may offer a motion of recommendation (with or without comments for revision) regarding the proposed amendments. C. STAFF RECOMMENDATION: Staff will recommend the adoption of the proposed ordinance amendments to the Planning Commission. The proposed amendments support the comprehensive plan goals of attracting and retaining living wage jobs and diversification and growth of tax base through the maximization of industrial land for building and job creation. The ordinances also support a review for compatibility between differing land uses and maintenance of development requirements and standards. D. SUPPORTING DATA: a. Draft Outdoor Storage Amendment b. Current Examples of Outside Storage c. Excerpts, Monticello Comprehensive Plan d. Excerpts, Monticello Zoning Ordinance PROPOSED AMENDMENTS – OUTDOOR STORAGE (26) Outdoor Storage (b) In the I-1 and I-2 districts, the following shall apply: (i) When abutting a zoning district or use other than industrial, residential district or residential use, the outdoor storage use shall require authorization through a conditional use permit following the provisions of Section 2.4(D) of this ordinance. (ii) In the I-1 District, outdoor storage shall be limited to 30% of the gross square footage of the principal building (IEDC recommendation: 50% of the gross square footage). Storage may be increased up to 50% of the gross square footage of the principal building by conditional use permit (IEDC recommendation: up to 100% of the gross square footage of the principal building by conditional use permit). (iii) In the I-2 District, outdoor storage shall be limited to an area not to exceed the gross square footage of the principal building. (iv) The storage area shall be located within the rear yard, except that an outdoor storage area may also include that area between the front building line and the rear yard along the interior lot side. Storage may not be located beyond the side building line on the street side of a corner lot. (v) Outdoor storage areas shall meet the minimum building setback from all side and rear property lines per the requirements of this ordinance and when adjacent to zoning districts or uses other than industrial, shall be located a minimum of 50’ feet from the adjacent property line. (Alt. In the I-2 District, outdoor storage shall be setback 10’ from all side and rear property lines and when adjacent to zoning districts or uses other than industrial, shall be located a minimum of 50’ feet from the adjacent property line.) (vi) The area is fenced and screened from view of neighboring residential uses and from the public right of way in compliance with this section in compliance with Section 4.1(I) of this ordinance. a. In the I-1 district, screening shall consist of masonry walls or fencing constructed of wood or vinyl and shall provide for 100% opacity. Such fences or walls shall meet all other the requirements of Section 4.3 of this ordinance. b. In the I-2 District, metal fences may be permitted when the materials have been recycled and reprocessed to resemble new building materials and are designed for use as a fencing material, and when such materials are designed to resemble allowed materials as listed in section 4.3(J)(1). c. Additional landscaping of one evergreen tree per 6’ of linear fenceline is required to be planted along the exterior of outdoor storage area in conformance with Section 4.1 of this ordinance. Trees may be staggered along fenceline. d. Fences and walls shall not exceed 15’ in height as measured from the existing grade to the top of the fence panel. e. Height of storage may not exceed the screening wall or fence, or the height of required landscaping. (vii) Outdoor storage shall be allowed only on improved surface of asphalt or concrete. (viii) Storage in shipping containers shall be prohibited unless such storage occurs within the screened outdoor storage area. (ix) There shall be no storage of hazardous waste, as defined by the Minnesota Pollution Control Agency. (x) Waste or recyclable material shall be contained in a refuse container. All such containers shall be stored within a screened enclosure per the requirements of this ordinance and such storage shall be counted against the total allowable storage area. (xi) Exterior storage areas shall comply with all applicable fire codes and no portion of the outdoor storage shall block access to hydrants, fire sprinklers, or other fire- fighting equipment. (xii) Storage is screened from view from the public right-of-way in compliance with Section 4.1(I) of this ordinance. (xiii) Storage area is grassed or surfaced to control dust. (xiv) Vehicle storage shall not be permitted in front yards. (xv) Noise shall be controlled consistent with the standards of this ordinance. (xvi) All lighting shall be in compliance with Section 4.4 of this ordinance. (xvii) Does not take up parking space as required for conformity to this ordinance. (xviii) Outdoor storage areas shall comply with all requirements for grading, drainage and erosion control per Section 4.10 of this ordinance. Zoning: I-1 (Light Industrial) Lot Area: 87,120 Building Area: 15,500 Storage Area: 5,800 Ratios: Storage area is 7% of the lot Storage area is 37% of the building area/building is 18% of the lot area *Estimates Zoning: I-1 (Light Industrial) Lot Area: 87,190 Building Area: 18,000 Storage Area: 20,500 Ratios: Storage area is 24% of the lot Storage area is 114% of the building area/building is 21% of the lot area *Estimates Zoning: I-2 (Heavy Industrial) Lot Area: 243,200 Building Area: 51,850 Storage Area: 0 Ratios: Building area is 21% of the lot area *Estimates Zoning: I-2 (Heavy Industrial) Lot Area: 231,150 Building Area: 16,800 Storage Area: 43,300 Ratios: Storage area is 19% of the lot Storage area is 258% of the building area/building is 7% of the lot area *Estimates � �' �r �'� �� ' �` �' �► � Ideally, the Comprehensive Plan does not have an Economic Development chapter. 1he Land Use Plan would be sufficient to channel marl<et forces to meet the development objectives of the community. In reality, certain development needs cannot be met without public intervention. 1he Economic Development chapter of the Plan focuses on the aspects of Monticello's future that require particular attention and action by the City. lhese actions include: ► Attracting and retaining jobs ► Expanding the tax base ► Enhancing the economic vitality of Downtown ► Facilitating redevelopment Attracting and Retaining Jobs 1he creation and retention of jobs is one of the most important objectives for Monticello. Jobs, particularly jobs with income levels capable of supporting a family, are 1<ey to achieving many elements of Monticello's vision for the future. ► Jobs attract residents to the community. Jobs will pay a critical role in creating the type of "move up" housing sought by the City. ► Jobs provide the income needed to support local business and government services. ► Retention of businesses promote community stability by 1<eeping jobs and residents in Monticello. The Community Context chapter of the Comprehensive Plan contains a section on Employment.lhis section contains data about employment in Monticello and of its residents. Among the 1<ey findings in this section are: ► While the community added nearly 5,000 people between 2000 and 2010 according to the U.S. Census, it only added 1,430 jobs according to the Quarterly Census of Employment and Wages (QCEW). In 2010, the community had 6,992 jobs according to the QCEW but 7,093 people in the labor force according to the Census. � � 2008 Comprehensive Plan � Updated 2013 Economic Development � 4-1 ► The U.S. Census Bureau, Center for Economic Studies' OntheMap website shows that in 2010 4,597 people leave the community each day to worl<, while 3,849 people come into the community to worl<. Only 835 both live and worl< in the community. ► Approximately 15% of residents in 2010 are employed within the community.lhis has dropped from 18% in 2002. ► As shown in Figure 4.1, 2012 data from the Minnesota Department of Employment and Economic Development (DEED) on their mnprospector.com website shows that Monticello is made up of a wide range of small to medium sized employers. Only 10 employers have more than 100 employees. Over half have fewer than four (4) employees. ► Worl<ers for Monticello businesses come primarily from Monticello and the surrounding region. Nearly 75% of people worl<ing in Monticello live in Monticello, adjacent townships, or other places in Wright and Sherburne counties (2010 OntheMap). ► Nearly 40% of Monticello residents worl< in Hennepin County, with the largest percentage in Minneapolis, Plymouth, and Maple Grove. Another 15% worl< elsewhere in Wright County, including Buffalo and St. Michael. ► The 2007-2011 American Community Survey (ACS) Census reported a mean travel time to worl< of 28.5 minutes. lhis is up from the 2000 Census travel time of 24 minutes. 1he mean travel time in the 2007-2011 ACS was 29.7 minutes for Wright County and 24.5 minutes for the region overall. Figure 4-1: 2012 Total Establishments bySize Background Reports 1he City of Mondcello conducts studies and assessments as needed to help guide its economic development efforts. 1he findings and recommendations of these studies are summarized below with the most recent provided first. 2010 Business Retention and Expansion Research (BR&E) Report Monticello's Business Retention and Expansion (BR&E) program was initiated by the City of Monticello, the Monticello Chamber of Commerce and Industry, DEED, and the University of Minnesota Extension. It was also sponsored by over a dozen local businesses. Through the BR&E program, 60 businesses were visited. Findings from the visits and data analysis found: ► 78% of the visited businesses were locally owned and operated. ► 20% of businesses were in manufacturing, 18% in retail trade, and 13% in other services. ► 1he businesses employed over 1,600 full-time and 975 part-time employees, with a trimmed average (an average where the low and high were discarded to prevent sl<ewing) of 15.38 full-time employees, slightly down from 15.52 three years ago. The firms also had a trimmed average of 7.76 part-time employees, up from 6.96 three years ago. ► Most full-time employees are in manufacturing, food and beverage, retail trade, and medical, while part-time employees are in medical, retail trade, and tourism/recreational services. ► Survey results indicated that the medical industry is the highest employer in Monticello, followed by retail trade and manufacturing. ► Businesses in the community are fairly stable with about half expecting some type of change. 1he BR&E identified four strategies aimed at helping businesses become more profitable. Each strategy was accompanied by a list of potential projects intended to be ideas for the community to explore. 1he implementation of the projects is intended to be a collaborative effort among the various sectors of the community.lhe four strategies identified included: 4-2 � Economic Development City of Monticello ► Improve Business Retention and Expansion lhrough Technical and Development Assistance. ► Improve Labor Force Availability and Productivity. ► Improve Infrastructure to Help Move Goods, Customers, and the Labor Force More Efficiendy. ► Improve and Promote the Quality of Life in Monticello. During the 2013 comprehensive plan economic development update process, it was noted that the 2010 Business Retention and Expansion Research strategies were similar to the 2008 Development Strategies.lhe review process identified the need to continue similar strategies into the future. Preceding the development of the 2008 Comprehensive Plan an assessment was conducted by St. Cloud State University to determine whether a bioscience parl< should be established in Monticello. At that time the bioscience industry was an economic development focus statewide. While the attraction of a bioscience business is not a particular focus of Monticello today, there are findings of that study that can be useful to consider in the overall development of economic development strategies for the community. Some of the Monticello's strengths for attracting businesses included: ► Land availability (compared to Metro Area). ► Access to major highways (I-94, U.S. 10 and STH 25). ► Regional growth of employment base. ► Development of local fiber optic system. ► Proximity to universities. ► Overalllocation. ► Expansive parl< system. ► Monticello Community Center. Recommended business development activities that apply to the attraction and retention of all businesses include ensuring that there are sites suitable and attractive to potential businesses available and ready for development. The community should continue to explore and establish partnerships with a variety of stal<eholders that can worl< together to support business attracdon and retendon. This includes the identificadon of funding sources which may be an incentive for businesses locating in Monticello. When available the City should participate in special tax zones that have been made available at the state and federal level to support business development and retention. Expanding the Tax Base A traditional objective of local economic development planning is the expansion of the property tax base. Under the current system of local government finance, property taxes are the largest source of city revenue. For this reason, it is an important aspect of economic development planning in Monticello. Understanding the Property Tax System Effective strategies to promote the growth of the tax base require a clear understanding of the property tax system. Property Valuation There are three forms of property valuation. The foundation of the property tax system is Estimated Marl<et Value. lhis amount is the value of a parcel of property as set by the County Assessor. In some circumstances, the State Legislature limits the amount of Estimated Marl<et Value that can be used for taxation. lhese adjustments result in the Taxable Marl<et Value. The value used to calculate property taxes is Tax Capacity. Tax Capacity Value is a percentage of Taxable Marl<et Value. 1he percentage factors are set by the State Legislature and vary by class of property. Changes in the Tax System Traditional economic development theory seel<s commercial and industrial development as a means of building tax base. Historically, the system supported this approach. A dollar of estimated marl<et value of commercial-industrial property carried a higher tax capacity value than residential property. Over the past twelve years, tax "reforms" by the State Legislature have changed this situation. 2008 Comprehensive Plan � Updated 2013 Economic Development � 4-3 Facilitating Redevelopment 1he Comprehensive Plan seel<s to create a place where land use plans, policies, and controls worl< together with private investment to properly maintain all properties in Monticello. It is recognized that this approach may not succeed in all locations. Despite the best plans and intentions, properties may become physically deteriorated and/or economically inviable. In such places, city intervention may be need to facilitate redevelopment and prevent the spread of blight. This intervention may include: ► Acquisition of land. ► Preparation of sites for development. ► Construction or reconstruction of public improvements. ► Provision of adequate parl<ing supply. ► Remediation of polluted land as needed. ► Removal of other physical and economic barriers to achieve community objectives. lhese actions may require the use of tax increment financing, tax abatement, or other finance tools available to the City. Development Strategies 1he following strategies will be used to implement the Comprehensive Plan in the area of Economic Development: 1. The City must use the Comprehensive Plan to provide adequate locations for future job- producing development (Places to Worl<). 2. 1he City should adhere to the Comprehensive Plan to encourage stable business setting and promote investment and expansion of facilities. 3. The City should coordinate utility planning and manage other development to ensure that expansion areas are capable of supporting new development in a timely manner. 4. The City will continue to worl< with existing businesses to maintain an excellent business environment, retain jobs, and facilitate expansions. 5. In addition to assisting business seel<ing to locate in Monticello, the City should actively target and marl<et to businesses which will be a supplier, customer or collaborative partner to existing businesses within the community. 6. 1he City should target and marl<et to businesses which would benefit from Monticello's utility and communications infrastructure. 7. 1he City will worl< with the CentraCare Health System to ensure the retention and to promote the expansion of health care services in Monticello. 8. The City will use the Comprehensive Plan to maintain and enhance the quality of life in Monticello as a tool for attracting businesses and jobs. 2008 Comprehensive Plan � Updated 2013 Economic Development � 4-7 er-iA�rER s: usE sr��aAa�s Section 5. I Use Table Subsection (A) F�cplanation of Use Table Structure � � . .- . � -. �.. . . . . -. -. • . -. Vehicle Fuel Sales C C C 5.2(�(30�. Vehicle Sales and Rental C 5.2(F�(31 � Veterinary Facilities C 5.2(�(32�. (Rural) Veterinary Facilities C C C 5.2(�(32�. (Neighborhood) Wholesale Sales P P P None Industrial Uses Auto Repair — Major C P P 5.2(Gl( I 1 Bulk Fuel Sales and p p 5 2(Gl(21 Storage Contractor's Yard, � � � 5 2(G1(31 Temporary Extraction of Materials I I I 5.2(G1(41 General Warehousing C C P P 5.2(G1(51 Heavy Manufacturing C 5.2(G1(61 Industrial Services C P None Land Reclamation C C C C C C C C C C C C C C C 5.2(G1(71 Light Manufacturing P P P 5.2(Gl(81 Machinery/Truck Repair & Sales P P 5'2(Gl(91 Recycling and Salvage Center C C 5.2(�( I 0� Self-Storage Facilities P C P 5.2(�( I I� Truck or Freight C P P 5.2(G�(12� Terminal Waste Disposal & Incineration C 5.2(G�(13� Wrecker Services C P 5.2(G�(14� City of Monticello Zoning Ordinance Page 32 I cHaPrER s: usE srAr�DaRDs Section 5.3 Accessory Use Standards Subsection (C) Table of Permitted Accessory Uses . . • � . �- • � -. �.. • • . • -. -. • � -. Indoor Storage P P P P P P 5.3(D�(20� Incidental Light p p p p p p p p 5.3(�(2��. Manufacturing Machinery/Trucking C 5.3(D�(22� Repair & Sales Office P P P P P P none Off-street Loading Space P P C P P P P P P P 4_9 Off-street Parking p p p p p p p p p p p p p p p p 4_g Open Sales p C C C 5.3(�(23�. Operation and storage of agricultural vehicles, P 5.3(D�(24� equipment, and machinery Outdoor Sidewalk Sales & p p p p p p p p 5.3(D�(25� Display (businesses) Residential 5.3 (D� (25�(al Outdoor Storage P P P P P P P P P P I ndustrial 5.3 (� (25�b1 Park Facility Buildings & P P P P P P P P P P P p p p p p 5.3(D�(26� Structures (public) Private Amateur Radio p p p p p p p p p p p p p p p p 4.13(B1 Private Receiving Antennae and Antenna P P P P P P P P P P P P P P P P 4.13(C1 Support Structures Retail Sales of Goods (as part of an office or P P P P P P C C 5.3(D�(27� industrial use) Shelters (Storm or P P P P P P P P P P p p p p p p 5.3(�(28�. Fallout) Sign(s) P P P P P P P P P P P P P P P P 5.3(�(29�. Solar Energy System p p p p p p p p p p p p p p p P 5.3(�(30�. Swimming Pool p p p p p p p p p p p p p p p P 5.3(D�(31 � Taproom (Retail Sales Accessory to Production C C C C C C 5.3(D�(33� Brewery) Large Trash Handling and P P P P P P P P P P P P 5.3(D�(34� Recycling Collection Area Page 370 City of Monticello Zoning Ordinance Section 4.8: Off- Street ParkinQ C►-i��TEF� �: iy�� i��+fi��t�C35 Section 5.3 Accessory Use Standards ��absection (D) Additional Specific Standards for Certain Accessory Uses (26) Outdoor Storage (a) In all zoning districts, all materials and equipment, except as specifically denoted in this ordinance, shall be stored within a building or fully screened so as not to be visible from adjoining properties except for the following: (i) Clothes line pole and wire. (ii) Recreational equipment and vehicles, subject to off-street parking regulations in Section 4.8 of this ordinance. (iii) Construction and landscaping material currently being used on the premises. (iv) Off-street parking of passenger vehicles, emergency vehicles and-small commercial vehicles in residential areas, unless otherwise required to be screened according to Section 4.8 of this ordinance. (v) Propane tanks, fuel oil tanks, and other similar residential heating fuel storage tanks which do not exceed 1,000 gallons in capacity and shall not be located within five (5) feet of any property line. (vi) Wood piles in which wood is stored for fuel provided that not more than 10 cords shall be stored on any property. A cord shall be 4'x4'x8'. (vii) All wood piles shall be five (5) feet or more from the rear and side yard property lines and shall be stored behind the appropriate setback line in front yards. (viii) Solar energy systems. (ix) Wind energy conversion systems. (b) In the I-1 and I-2 districts, the following shall apply: (i) When abutting a residential district or residential use, the outdoor storage use shall require authorization through a conditional use permit following the provisions of Section 2.4(D) ofthis ordinance. (ii) The area is fenced and screened from view of neighboring residential uses in compliance with Section 41(I) ofthis ordinance. (iii) Storage is screened from view from the public right-of-way in compliance with Section 41(I) ofthis ordinance. (iv) Storage area is grassed or surfaced to control dust. (v) Vehicle storage shall not be permitted in front yards. (vi) Noise shall be controlled consistent with the standards of this ordinance. (vii) All lighting shall be in compliance with Section 4.4 of this ordinance. (viii) Does not take up parking space as required for conformity to this ordinance. C��y a� r��ntieeiio �or�irr�'r�drrr�nce Ira�� .3�i' Cf-i�PT�� S: U�� °T.4�L7�i�DS Section 5.3 Accessory Use Standards Subsection (D) Additional Specific Standards for Certain Accessory Usc�, (27) Park Facility Buildings and Structures Limitations on number and size for accessory buildings and structures shall not apply to active or passive public park facilities. (28) Retail Sales of Goods (as part of an of�ce or industrial use) (a) Location: (i) All sales are conducted indoors within a clearly defined area of the principal building reserved exclusively for retail sales. Said sales area must be physically segregated from other principal activities in the building. (ii) The retail sales area must be located on the ground floor of the principal building. (b) Sales Area. The retail sales activity shall not occupy more than fifteen (15) percent of the gross floor area of the building. (c) Access. The building where such use is located is one having direct access to a collector or arterial level street without the necessity of using residential streets. (d) Hours. Hours of operation are limited to 8:00 a.m. to 9:00 p.m. The provisions of this section are considered and satisfactorily met. (29) Shelters (Storm or Fallout) Storm and fallout shelters shall not alter the character of the premises with respect to the primary use as permitted in the district. (30) Sign(s) All signs within the City shall comply with the finishing standards contained in Section 4.5: Signs Section 4.5, Signs. (31) Solar Energy Systems (a) All Solar Energy Systems (i) All solar energy systems shall be operable and maintained in good repair. (ii) Solar energy systems shall meet all required setbacks and height requirements of the underlying zoning district. (iii) Solar energy systems shall be an integral part of the structure to which they are attached. �h'`�� ;��a;, c�� i��ontrceiit� �orrin� tJrt�#rrs7rrte �`�� f �� ii�if�i�r`�� `}��F�t� 8.4 Definitions ��section (B) Lots MANUFACTURING, HEAVY: The manufacturing of products from raw or unprocessed materials, where the finished product may be combustible or explosive. This category shall also include any establishment or facility using large unscreened outdoor structures such as conveyor belt systems, cooling towers, cranes, storage silos, or similar equipment that cannot be integrated into the building design, or engaging in large-scale outdoor storage. Any industrial use that generates noise, odor, vibration, illumination, or particulate that may be offensive or obnoxious to adjacent land uses, or requires a significant amount of on-site hazardous chemical storage shall be classified under this land use. This use shall include any packaging of the product being manufactured on-site. Examples include but are not limited to the production of the following: large-scale food and beverage operations, lumber, milling, and planing facilities; aggregate, concrete and asphalt plants; foundries, forge shops, open air welding, and other intensive metal fabrication facilities; chemical blending, mixing, or production, and plastic processing and production. MANUFACTURING, LIGHT: The mechanical transformation of predominantly previously prepared materials into new products, including assembly of component parts and the creation of products for sale to the wholesale or retail markets or directly to consumers. Such uses are wholly confined within an enclosed building, do not include processing of hazardous gases and chemicals, and do not emit noxious noise, smoke, vapors, fumes, dust, glare, odor, or vibration. Examples include, but are not limited to: production or repair of small machines or electronic parts and equipment; woodworking and cabinet building; publishing and lithography; computer design and development; research, development, testing facilities and laboratories; apparel production; sign making; assembly of pre-fabricated parts, manufacture of electric, electronic, or optical instruments or devices; manufacture and assembly of artificial limbs, dentures, hearing aids, and surgical instruments or parts; manufacture, processing, and packing of food products or cosmetics; and manufacturing of components, jewelry, clothing, trimming decorations and any similar item. MARQUEE: Any permanent roof like structure projecting beyond a theater building or extending along and projecting beyond the wall ofthat building, generally designed and constructed to provide protection from the weather. MAXIMUM DENSITY: The number of dwelling units allowed per gross acre of land as controlled by an individual or joint ownership group. MEAN GROiTND LEVEL: The elevation established for the purpose of regulating the number of stories and the height of buildings. Grade shall be the mean level of the finished surface of the ground adjacent to the e�terior walls of the buildings. MICRO DISTILLERY: A distillery that produces 40,000 proof gallons of liquor or less annually. C��y a� r��ntieeiio �or�irr�'r�c�rrr�nce Ira�� EDA Agenda: 5/10/17 7. Consideration of adoption of Otter Creek Land Pricing Guidelines (JT) A. REFERENCE AND BACKGROUND: The EDA is being asked to consider adopting a Guideline for land pricing in Otter Creek Business Park. Such a Guideline will help in maintaining an objective decision process in making offers to sell land to prospects looking at Otter Creek Business Park. The first iteration draft Land Pricing Guideline was reviewed by the EDA in a Workshop on April 24, 2017. The comments offered by the EDA were incorporated into the second iteration of the document after that meeting. The second iteration draft document is attached for review and possible action. An attendant analysis of all previous land sales and the current prospects has been scored using the draft Guidelines. The scoring reveals an irregular pattern of pricing which is not unusual given the unique situations some of the prospects have presented when approaching the EDA. The Guidelines are intended to be used as such and there will be instances where the EDA will have good standing to deviate from them. A1. Staff Impact: City staff have solicited examples of other cities guideline criteria and funding/incentive scoring worksheets. The research involved in this does not require any additional staff. A2. Budget Impact: There is no budgetary impact from staff work of researching and compiling a draft Land Sale Guideline and Point Scoring Worksheet for Otter Creek Land Sale transactions. The work and proposed Guideline can be transferable to other EDA activities and land holdings as well. For instance, potential transactions involving EDA land holdings in the downtown area can be evaluated and scored using a similar Guideline and worksheet. Likewise housing projects can have a similar review and scoring system applied. B. ALTERNATIVE ACTIONS: 1. Motion to adopt the Land Sale Guideline for Otter Creek Business Park 2. Motion to table for adoption of the Guideline for additional research C. STAFF RECOMMENDATION: Staff recommends Alternative #1 as the Guideline applies a rational framework for pricing land sales transactions in the Otter Creek Business Park. If the EDA agrees with this concept, it would be appropriate to take action to approve the Guideline. D. SUPPORTING DATA: A. Land Sale Guideline for Otter Creek Business Park B. City of Burnsville EDA Guideline Example 2 C. City of Elk River Guideline Example Draft #2 – May 4, 2017 City of Monticello Economic Development Authority Pricing Guidelines for Otter Creek Business Park Land Sales April 2017 Draft #2 – May 4, 2017 The scoring worksheet is to be used as a Guideline for pricing the EDA owned land in Otter Creek Business Park and possible incentive financing such as TIF or Tax Abatement. It is intended to be Guideline and should be applied to prospective land sales in this manner. There may be instances where factors of a proposed land sale for a development may warrant deviation from the Guidelines. It is the EDA’s discretion to adhere to the Guidelines or deviate from the Guidelines in the interest of furthering Economic Development Goals and Objectives in the City of Monticello as identified in by the Monticello Comprehensive Plan. The Guidelines are developed with a focus on partnering public resources with projects which best align with these goals. There are therefore several key factors that are pertinent to proposed development scoring. They are shown below with scoring ranges and a Worksheet Summary at the conclusion. The final scoring also relates to the proposed land sale pricing. ********** 1.Number of New Employees Point Value Number +1 1 – 5 +2 6 - 15 +3 16 - 30 +4 31 - 50 +5 51 + Draft #2 – May 4, 2017 2.Number of Jobs Per Acre Point Value Number Per Acre +1 1 – 2 per acre +2 3 – 4 per acre +3 5 – 6 per acre +4 6 – 7 per acre +5 8 + per acre 3.Average Wages for New Jobs Point Value Pay Range Dollar Weighting Total Empl. Weighted $ Amt. +1 $15,000-24,999 $20,000 ________ $___________ +2 $25,000-29,999 $27,500 ________ $___________ +3 $30,000-44,999 $37,500 ________ $___________ +4 $45,000-59,999 $52,500 ________ $___________ +5 $60,000 +$60,000 ________ $___________ 4.Public Assistance per New Jobs $________ Public Assistance _________ Number of new jobs created $________ Public Assistance per new job Point Value Public Dollars Invested Per New Job +1 Over $50,000 +2 $40,000 to $49,999 +3 $30,000 to $39,999 +4 $20,000 to $29,999 +5 $0 to $19,999 Draft #2 – May 4, 2017 5.Developed Assessed Value Per Acre Point Value Value Per Acre +1 $150,000-199,999 +2 $200,000-349,999 +3 $350,000-499,999 +4 $500,000-599,999 +5 $600,000 + 6.Business Retention Point Value Number of Retained Jobs +0.5 1-5 jobs +1 6-10 jobs +1.5 11-30 jobs +2 31-50 jobs +2.5 50-100 jobs +3 101 + jobs 7.Ratio of Private versus Public Investment in Project $_____________ Private Investment $_____________ EDA/Public Investment $_____________ Total Investment ______________ Ratio of Private versus Public financing Point Value Ratio +1 over 2:1 +2 over 3:1 +3 over 4:1 +4 over 5:1 +5 6:1 or greater Draft #2 – May 4, 2017 8.Significant Community Impact Point Value Unsubsidized Spin-Off development potential +1 Low potential for spin-off of unsubsidized development +2 Moderate potential for spin-off unsubsidized development +3 High potential for spin-off unsubsidized development WORKSHEET SUMMARY Factors Total Points #1. Number of New Employees _________ (1-5) #2. Number of Jobs Per Acre _________ (1-5) #3. Average Wages for New Jobs _________ (1-5) #4. Public Assistance Per New Job _________ (1-5) #5. Developed Assessed Value Per Acre _________ (1-5) #6. Business Retention (# of Jobs) _________ (.5-3) #7. Ratio of Private to Public Invest. _________ (1-5) #8. Significant Impact/Comp Plan Goals_________ (1-3) Total Points _________ Possible to score 36 points total Total Worksheet Points Equated to Land Price Total Overall Points Price for Otter Creek Land 1-5 $3.16 per sq. ft. (No TIF) 5-10 $3.16 per sq. ft. with TIF as a land reimbursement to developer 11-15 20 percent discount from market price = $2.53 per sq. ft. 16-20 40 percent discount from market price = $1.90 per sq. ft. 21-25 60 percent discount from market price = $1.26 per sq. ft. 26-30 80 percent discount from market price = $.63 per sq. ft. 31-38 100 percent discount from market price = $1.00 for the entire lot Page 19 of 23 12/16/2008 CITY OF BURNSVILLE AND BURNSVILLE ECONOMIC DEVELOPMENT AUTHORITY REQUESTS FOR TAX INCREMENT FINANCING (TIF) OR TAX ABATEMENT ASSISTANCE FUNDABILITY GUIDELINES FORM FOR NAME OF APPLICANT ATTACHMENT B: FORM FUNDABILITY GUIDELINES FORM Page 20 of 23 12/16/2008 1.Ratio of Public versus Private Investment $Private Investment $EDA/Public Investment $Total Investment Ratio of public versus private investment Point Value Private Public +1 Less than $3 To $1 +2 Over $3 To $1 +3 Over $4 To $1 +4 Over $6 To $1 +5 Over $8 To $1 2.Number of Current and Estimated New Employees Point Value Number +1 1 - 15 +2 > 16 - 30 +3 > 31 -45 +4 > 46 - 75 +5 > 75 Plus _____ *Current Number of Employees _____ *Estimated New Employees (within next 2 - years) _____ Total Number of Current and Estimated New Employees *Employees should be computed as full-time equivalent positions 3.Public Investment Per Current Employees Point Value Investment 0 $7,500+ +1 $6,000 - $7,500 +2 $4,500 - $6,000 +3 $3,000 - $4,500 +4 $1,500 - $3,000 +5 $ 0 - $1,500 Public Investment (Tax Abatement/Tax Increment) $ *Current Number of Employees $ Investment Per Employee = $ *Employees should be computed as full-time equivalent positions Page 21 of 23 12/16/2008 4.Pay Level of Jobs Created Point Pay Dollar Total Weighted Value Range Weighting Employees Dollar Amount 0 $0 - 14,999 $10,000 _____ $________ +1 $15,000 - 24,999 $20,000 _____ $________ +2 $25,000 - 29,999 $27,500 _____ $________ +3 $30,000 - 44,999 $37,500 _____ $________ +4 $45,000 - 59,999 $52,000 _____ $________ +5 $60,000 and Over $60,000 _____ $________ *TOTAL _____ $________ WEIGHTED AVERAGE = $________ *Employees should be computed as full-time equivalent positions. New Employees over and above the number required to be added shall be exempt from this section. 5.Real Estate/Property Taxes Generated Point Value *Projected Tax Revenues + 1 Below $25,000 +2 $ 25,000 - $49,999 +3 $ 50,000 - $99,999 +4 $100,000 - $249,999 +5 $250,000 and Over Projected Tax Revenues $ *Projected Tax Revenues should be based on the existing property tax system and rates plus legislative future changes if subject to estimation. 6.Service Impact Point Value Type of Development +1 Retail +2 Office Warehouse +3 Office +4 Mixed Use +5 Hi-Tech/Manufacturing +2 Installation of fiber to the premise Type of Use 7.Redevelopment Age Multiplier Point Value Age of Building 1.0 New Development 1.0 0 – 5 Years Redevelopment* 1.1 6 – 10 Years Redevelopment* 1.2 11 – 15 Years Redevelopment* 1.3 16 – 20 Years Redevelopment* 1.4 21 – 25 Years Redevelopment* 1.5 26+ Years Redevelopment* * Redevelopment is defined as the development of a property again to a better condition. Page 22 of 23 12/16/2008 8.Significant Impact Multiplier Point Value Type of Use 3.0 Mixed Use New Development or Redevelopment 2.5 Commercial/Industrial Redevelopment 2.0 Industrial New Development 1.5 Commercial New Development WORKSHEET SUMMARY Worksheet Breakdown Total Points 1. Ratio of Public versus Private Investment (1 to 5) 2. Number of Current and Estimated New Employees (1 to 5) 3. Public Investment per Current Employee (0 to 5) 4. Pay Level of Positions (0 to 5) 5. Real Estate/Property Taxes Generated (1 to 5) 6. Service Impact (0 to 5) SUBTOTAL Multiplier’s 7. Redevelopment Age Multiplier (1.0 to 1.5) 8. Significant Impact Multiplier (1.5 to 3.0) TOTAL SCORE * To determine the total score multiply the Subtotal x Redevelopment Age Multiplier x Service Impact Multiplier. The information provided herein is true and accurate to the best of my knowledge: (Signature) (Date) Page 23 of 23 12/16/2008 Fundability Rating for Tax Abatement The total score on the project analysis sheet on previous page determines the general term of assistance. The City of Burnsville or Burnsville Economic Development Authority will make any final decision on term. Point Value Term of Assistance* 0 - 25 0 Years 26 – 35 3 Years 36 – 45 5 Years 46 – 59 7 Years **60 and over 10 Years * Assistance amount will be the incremental taxes only. ** The City or the Authority may consider between 15 – 20 years for projects that score 60 and over. EDA Agenda: 5/10/17 1 8. Economic Development Report (JT) CEDS (Comprehensive Economic Development Strategy) The fourth of four CEDS meetings was held in Buffalo on April 20, 2017. The topic of discussion was “Foundational Assets” which another word for infrastructure and housing. The materials and information gathered at each of the CEDS meetings is being compiled into a regional strategy document that be available for review and adoption later in 2017 or early 2018. Small Area Study Stakeholder meetings were held with property owners and business based in the Study area. The Steering committee also had a fourth meeting to review progress points. The next steps in the process are as follows: Public Open House – Scheduled for May 31 at 6:00 p.m. in West Bridge Park Planning Commission Review - June 6th EDA Final Review and Approval - June 14 Planning Commission Final Review/Adoption as part of the Comprehensive Plan - July 11 City Council Review - July 24 Discussion with developers is also beginning to take place. Housing developer visit and tour occurred on May 4, 2017 Business Retention and Expansion Vector Tool and Manufacturing (4-6-2017) Suburban Manufacturing (4-6-2017) Cargill Kitchen Solutions (4-7-2017) Generex and Westlund Distributing (4-7-2017) Bondhus Corporation (4-7-2017) Prospects Staff is still actively engaged with or monitoring the next steps process for several prospects. They are: 1. Shred-N-Go (EDA offer was provided; they are seeking additional information on lot and TIF District) 2. DEED Prospect 3. Project Novus