IEDC Agenda 08-07-2012
AGENDA
MONTICELLO INDUSTRIAL & ECONOMIC DEVELOPMENT COMMITTEE
Tuesday, August 7, 2012
7:00 a.m., Boom Island
MEMBERS: Chair Luke Dahlheimer, Vice Chair Joni Pawelk, Rich Harris, Patrick Thompson, Bill
Tapper, Dick Van Allen, Dan Olson, Zona Gutzwiller, Wayne Elam, Jim Johnson, Chris
Kruse, Don Roberts, and Wes Olson
LIASIONS: Sandy Suchy, Chamber
Clint Herbst, Mayor
Glen Posusta, City Council
1. Call to Order
2. Approve Minutes:
a. June 5, 2012
3. Consideration of adding items to the Agenda
4. Reports:
a. Economic Development Director transition
b. City Council
c. FiberNet
d. TAC
(i) Second River Crossing Regional Meeting
e. reStoreing Downtown
5. Future industrial park analysis: schedule joint meeting with the Planning Commission
6. Future business visits and Mayor/Administrator breakfast meetings
7. Adjournment (8:30am)
IEDC8.7.12
1
5.FutureIndustrialParkAnalysis:JointMeetingwithPlanningCommission(AS)
A.REFERENCE&BACKGROUND:
IndiscussionswithMeganBarnett-LivgardregardingtheworkplanoftheIEDC,itwasnoted
thatanassessmentoftheneedforfutureindustriallandareawasatoppriority.Inthatregard,
staffoffersthefollowinginformationforconsideration.
ThePlanningCommissioncompletesanannualreviewofthe2008ComprehensivePlan,
consistentwithadirectiveadoptedwithintheplanitself.Inpastyears,thereviewhasbeen
focusedonChapter3,LandUse.However,inlightoftheneedforamoredetailedreviewof
Citygoalsrelatedtoindustriallanduseidentificationandthepotentialforanother(or
expanded)futurepark,staffwouldrecommendthatthePlanningCommission,IEDCand
EDAworktogethertocompleteathoroughreviewofComprehensivePlanChapter4,
EconomicDevelopmentasafirststep.
TheComprehensivePlanistheCity’sprimarytoolforguidinglandusedecisions,including
whereindustriallandisbestlocatedandwhattypeofindustrialdevelopmentissought.The
EconomicDevelopmentChapteroftheComprehensivePlanthensetsouttheoverallgoals
andstrategiesforrealizingtheCity’svisionforeconomicdevelopment.
Sincethetimeoftheadoptionofthe2008ComprehensivePlan,muchhaschanged.A
detailedreviewoftheEconomicDevelopmentchapterofthePlanwillallowallthreebodies
theopportunityunderstandhowthestrategiesoftheplanhavebeenappliedandtodiscussthe
currentvalidityoftheDevelopmentStrategiesenumeratedintheplan.Thegroupcanidentify
wherechangesneedtobemade,orwhethertheyshouldremainasguidingpolicies.Atthe
veryleast,thereviewisanopportunitytocompleteanupdatetothebaselinedataincludedin
thechapter,basedonmorerecentCensusdata.
Fromthatrenewedunderstandingofeconomicdevelopmentgoals,thegroupcandelvefurther
intothequestionofwhethertheamountoflandareadesignatedontheexistingLandUsePlan
issufficienttomeetthegoalsidentified,whereaneworexpandedparkshouldbelocated,
whattypesofindustrytheCityshouldfocusonforthoselocations,andwhatdevelopment
scenario(private,publicorjointventure)isthebeststrategyformeetingthePlan’sgoals.
Withtheaboveinmind,staffwouldsuggestthefollowingprocess:
September-ApreliminaryworksessionbetweenthePlanningCommission,IEDCand
EDA,orasubcommitteeofthethreegroups,toreviewChapter4ofthe
ComprehensivePlanforpotentialamendment
October–Reviewofinformationonexistingindustriallandinventoryandguided
industriallandarea(acreage,lotsize,zoning,absorptionrate,use,etc.)
November–Identificationofexpansionoradditionalindustriallandsitesandstructure
toaccomplishdevelopment
ThefullEconomicDevelopmentChapteroftheComprehensivePlanisincludedfor
reference.
IEDC8.7.12
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ALTERNATIVEACTIONS
1.MotiontorequestajointworksessionbetweentheIEDC,PlanningCommissionandEDA
toreviewtheEconomicDevelopmentChapteroftheComprehensivePlanasrelatedto
analysisofindustriallandsupply.
2.Motionofother.
STAFFRECOMMENDATION
Staffrecommendsalternative1.AfullreviewoftheComprehensivePlan’sEconomic
DevelopmentChapterservesasanappropriateplatformforlaunchingamorespecific
discussiononavailableandfutureindustriallandarea.
Economic Development | 4-12008 Comprehensive Plan
Ideally, the Comprehensive Plan does not have an Economic Develop-
ment chapter. Th e Land Use Plan would be suffi cient to channel market
forces to meet the development objectives of the community. In reality,
certain development needs cannot be met without public intervention.
Th e Economic Development chapter of the Plan focuses on the aspects
of Monticello’s future that require particular attention and action by the
City. Th ese actions include:
Attracting jobs
Expanding the tax base
Enhancing the economic vitality of Downtown
Facilitating redevelopment
Attracting Jobs
Th e creation and retention of jobs is one of the most important objec-
tives for Monticello. Jobs, particularly jobs with income levels capable of
supporting a family, are key 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 govern-
ment services.
Retention of businesses promote community stability by keeping jobs
and residents in Monticello
Th e Community Context chapter of the Comprehensive Plan contains a
section on Employment. Th is section contains data about employment
in Monticello and of its residents. Among the key fi ndings in this section
are:
Monticello has been a net importer of employment - there are more
jobs in Monticello than workers living in the community. According
to the 2000 Census, 5,111 people reported working in Monticello while
4,262 Monticello residents were part of the civilian labor force.
4
Comprehensive Plan does not have an Economic Develop-
er. Th e Land Use Plan would be suffi cient to channel market
eet the development objectives of the community. In reality,
elopmentneedscannotbemetwithoutpublicintervention
Economic Development
Chapter Contents
Attracting Jobs ............................4-1
Expanding the Tax Base ............4-2
Enhancing Downtown ...............4-5
Facilitating Redevelopment .....4-5
Development Strategies ...........4-5
4-2 | Economic DevelopmentCity of Monticello
Th e job base in Monticello is made up of a wide
range of small to medium sized employers. In 2007,
Only fi ve employers report more than 100 employ-
ees, Monticello Public Schools, Xcel Energy, Cargill
Kitchen Solutions, Monticello-Big Lake Hospital,
and Ultra Machining Company (according to listing
of major employers from Minnesota Department of
Employment and Economic Development).
Workers for Monticello businesses come primar-
ily from Monticello and the surrounding region.
Over 80% of people working in Monticello lived
in Monticello, adjacent townships, Big Lake, or
other places in Wright and Sherburne counties
(2000 Census).
Th e 2000 Census found that only 26% of people
working Monticello also lived in the city.
69% of working Monticello residents held jobs in
other places (2000 Census). More than one-third
worked in Hennepin County.
Th e 2000 Census reported a mean travel time to
work of 26 minutes. 45% of Monticello workers
indicated travel time to work of 30 minutes or
more.
In 2007, St. Cloud State University conducted an as-
sessment of establishing a bioscience park in Mon-
ticello. Th e results of this study provide important
insights on future job growth. Th e study identifi ed
a series “strengths” for attracting bioscience fi rms to
Monticello:
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 fi ber optic system.
Proximity to universities.
Overall location.
Expansive park system.
Monticello Community Center.
Many of these factors would also apply to attracting
other types of businesses.
Th e St. Cloud State study also made note of several
weaknesses in attracting these business to the com-
munity. Th e list included:
Lack of hotels and lodging.
No defi ned plan.
Small community.
Low tax base.
Th e recommendations of this Study apply to eff orts to
establishing a bioscience park and to overall develop-
ment of Places to Work:
Site Location - Need to have site that are suitable
and attractive to potential businesses available and
ready for development.
Funding - Funding is essential to provide sites and
for incentives to attract and retain the appropriate
businesses. Local, state and private funding sources
should be explored.
Tax treatment - Th e City gains important tools
from special tax zones that have been made avail-
able at state and federal level.
Partnerships - Attracting jobs to Monticello re-
quires partnerships with other stakeholders.
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 fi nance,
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
Eff ective strategies to promote the growth of the tax
base require a clear understanding of the property tax
system.
Property Valuation
Th ere are three forms of property valuation. Th e foun-
dation of the property tax system is Estimated Market
Value. Th is 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
Economic Development | 4-32008 Comprehensive Plan
Market Value that can be used for taxation. Th ese adjustments result in
the Taxable Market Value. Th e value used to calculate property taxes is
Tax Capacity. Tax Capacity Value is a percentage of Taxable Market Value.
Th e percentage factors are set by the State Legislature and vary by class
of property.
Changes in the Tax System
Traditional economic development theory seeks commercial and in-
dustrial development as a means of building tax base. Historically, the
system supported this approach. A dollar of estimated market 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.
Th e chart in Figure 4-1 shows how legislative changes have reduced the
tax base created by commercial-industrial development. Th is chart is
based on the tax capacity value for $3,000,000 of Taxable Market Value.
Th e legislative changes in the rates used to set tax capacity mean that this
property produced 56% less tax base in 2007 than in 1997.
Th is trend takes on additional meaning when compared to other classi-
fi cations of property. Figure 4-2 compares the tax capacity value for the
primary forms of development in Monticello. Th e valuations in this chart
are based on assumptions about the density of development and estimated
market value of new development. Changes in these assumptions will
alter the results.
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
199719981999200020012002 to 2007
Ta
x
C
a
p
a
c
i
t
y
V
a
l
u
e
Figure 4-1: Changes in Tax Capacity Value - Commercial/Industrial
4-4 | Economic DevelopmentCity of Monticello
Industrial Retail Offi ce Single Townhome Apt
Acres101010101010
Coverage30%30%30%3612
Development (SF or Units)130,680130,680130,6803060120
EMV per SF or Unit6580100400,000250,000150,000
EMV 8,494,20010,454,40013,068,00012,000,00015,000,00018,000,000
Tax Capacity169,134208,338260,610120,000150,000225,000
0
50,000
100,000
150,000
200,000
250,000
300,000
IndustrialRetailOfficeSingleTownhomeApt
Ta
x
C
a
p
a
c
i
t
y
V
a
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u
e
Figure 4-2: Tax Capacity Comparison
Figure 4-3: Tax Capacity Comparison
Other "Larger"
6%
Xcel Energy
39%
All Other Tax Capacity
55%
Economic Development | 4-52008 Comprehensive Plan
Th is chart clearly illustrates the current reality for eco-
nomic development strategies. All forms of develop-
ment contribute tax base to the community. It is risky
placing too much weight on one type of development
for tax base growth. In addition, cities do not control
the critical elements of the tax system. Changes in the
system lead to unanticipated results at the local level.
Tax base growth has implications that are unique to
Monticello. Th e chart in Figure 4-3 shows the distribu-
tion of taxable (Tax Capacity) value in Monticello. Xcel
Energy creates almost 40% of the City’s tax base. While
it has provided a unique asset for the community, it
is essential that the tax base become more diversifi ed.
Enhancing Downtown
Maintaining a successful Downtown is an important
element of the economic development plan for Mon-
ticello. Downtown is a key business district providing
goods, services and jobs for the community. Down-
town is unlike any other business district because of its
unique role in Monticello’s identity and heritage.
Th e Land Use chapter describes plans, policies and
strategies related to Downtown Monticello. Downtown
is part of the Economic Development chapter because
of the likelihood that city actions and investments will
be needed to achieve community objectives for Down-
town. Th is intervention may include:
Public improvements to provide services or to
enhance the Downtown environment.
Provision of adequate parking supply.
Acquisition of land.
Preparation of sites for development.
Removal of other physical and economic barriers
to achieve community objectives.
Th ese actions may require the use of tax increment
fi nancing, tax abatement or other fi nance tools avail-
able to the City.
Facilitating Redevelopment
Th e Comprehensive Plan seeks to create a place where
land use plans, policies and controls work 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 deterio-
rated and/or economically inviable. In such places, city
intervention may be need to facilitate redevelopment
and prevent the spread of blight. Th is intervention
may include:
Acquisition of land.
Preparation of sites for development.
Remediation of polluted land.
Construction or reconstruction of public improve-
ments.
Provision of adequate parking supply.
Removal of other physical and economic barriers
to achieve community objectives.
Th ese actions may require the use of tax increment
fi nancing, tax abatement or other fi nance tools avail-
able to the City.
Development Strategies
Th e following strategies will be used to implement the
Comprehensive Plan in the area of Economic Develop-
ment:
Th e City must use the Comprehensive Plan to pro-1.
vide adequate locations for future job-producing
development (Places to Work).
Th e City should adhere to the Comprehensive Plan 2.
to encourage stable business setting and promote
investment and expansion of facilities.
Th e City should coordinate utility planning and 3.
manage other development to ensure that expan-
sion areas are capable of supporting new develop-
ment in a timely manner.
Th e City should evaluate the need and feasibility 4.
of additional city-owned business parks as a means
attracting the desired businesses.
4-6 | Economic DevelopmentCity of Monticello
Th e City should establish a plan to evaluate the 5.
feasibility of implementing the recommendation
of the St. Cloud State study and if feasible to take
necessary action to attract bioscience businesses
to Monticello.
Th e City will continue to work with existing busi-6.
nesses to maintain an excellent business environ-
ment, retain jobs and facilitate expansions.
Th e City will work with the Monticello-Big Lake 7.
Hospital to ensure the retention and to promote the
expansion of health care services in Monticello.
Th e City will use the Comprehensive Plan to main-8.
tain and enhance the quality of life in Monticello as
a tool for attracting businesses and jobs.
IEDC 8.7.12
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6. Future Business Visits and Mayor/Administrator Breakfast Meetings
A. REFERENCE & BACKGROUND:
A business tour has been set with Walker-In-Store on September 19th at 10 AM.
An email reminder will be sent before the tour.
Walker-In-Store is located at 3161 Dalton Court.