HomeMy WebLinkAboutII - Strategic Plan
HEDRA Memorandum
To: HEDRA
From: Eric Maass, Economic Development Coordinator
Date: April 22, 2021
Item: 2021 Strategic Planning
REQUEST ACTION:
Staff is seeking review of the 2020-2021 Strategic Plan by HEDRA to verify whether or not the strategic
initiatives contained in that plan remain the priority of HEDRA. While the existing strategic plan was
dated 2020-2021 the document exists more so as a living document and as such, Staff wants to verify
what HEDRA hopes to have accomplished by the end of 2021 and perhaps 2022.
BACKGROUND INFORMATION:
HEDRA adopted the 2020-2021 Strategic Plan in July of 2020. That plan focused on four initiatives
1. Explore the opportunities presented by Spades
2. Meet the housing needs of Hastings
3. Work with property owners and developers to redevelop underutilized and blighted property
4. Encourage the creation and growth of local business
Strategic Plan for Economic Development
2020-2021
HEDRA Adopted
July __, 2020
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 2
Contents
Introduction ............................................................................................. 1
What is Economic Development .............................................................. 2
Ongoing Actions ....................................................................................... 4
Strategic Initiatives ................................................................................. 5
Initiative #1—Explore the opportunities presented by Spades ...................... 5
Initiative #2—Meet the housing needs of Hastings ...................................... 6
Initiative #2—Work with property owners and developers to redevelop underutilized and blighted property ......................................................... 10
Initiative #3—Encourage the creation and growth of local business ............ 12
Appendix A - Housing Needs Strategic Assessment ........................... A-1
Appendix B - Vermillion Street Corridor Action Matrix ....................... B-1
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 1
Introduction
In 2019, the Hastings Economic Development and Redevelopment Authority (HEDRA) and
the Hastings City Council adopted a Strategic Plan for Economic Development (2019 Plan).
The purpose of the 2019 Plan was to create a framework guide City actions related to economic development. The Plan sought to align understanding and objectives within city government.
The staff and financial resources of the City have a finite capacity. The success of an economic
development program is dependent on the City Council, HEDRA, Planning Commission and
Staff being on the same page.
The 2019 Plan drew on past work to create a concise, understandable, action-oriented docu-ment. The 2019 Plan described the overall economic development framework and focused on
actions to be taken in the 18-month period from June 2019 through December 2020. After this
initial period, the Plan would be updated annually to ensure that it remains relevant and use-
ful.
This document presents a working draft of the 2020 update of the Strategic Plan for Economic
Development (2020 Update). This draft draws on the experience of the past year to propose
adjustments to the focus of economic development activities. It is intended to facilitate the
discussion about the priorities and focus of City economic development activities. The City Council will be conducting aa goal setting retreat this Spring. The 2020 Update is a tool for
providing economic development related input to this process. The 2020 Update will also pro-
vide guidance for the 2021 budgeting process.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 2
What is Economic Development?
To make the most effective use of the resources allocated to Economic Development, it is im-
portant to have a clear and shared understanding of what the City seeks to achieve. Without this understanding, it is difficult for the City Council or HEDRA to guide actions and evaluate
decisions.
The 2019 Plan touched on this issue by offering a Framework for economic development. The
Framework consisted of the following elements:
• Economic development represents the initiatives taken by the
City to encourage private investment that is in line with Has-
tings’ vision for the future.
• The 2040 Comprehensive Plan lists ten factors that shape the
vision: Connected Growth., Transportation. Plan, Housing,
Natural Resources, Community Character, Future Land Use Planning, Sustainable Growth, Riverfront and Downtown
Revitalization, Fringe Growth, and Neighborhood Protection
and Improvement. These factors are described in greater de-
tail on the next page.
• Rather than create separate statements of vision and mission
for economic development, the Plan contains a set of guiding
principles. These principles describe the City’s objectives for playing an active role in economic development. The guiding
principles are
1) Retain and grow existing businesses.
2) Capitalize on Hastings’ unique assets.
3) Balance growth with maintaining high quality of life and community character.
4) Create collaborative solutions with other stakeholders.
• The City uses economic development initiatives to (1) remove the physical and economic barriers to redevelopment, (2) at-
tract types of development not provided solely by private
market forces, (3) leverage private investment to create great-
er benefit to the community.
Collectively, this Framework describes the City’s objectives for
playing an active role in economic development and forms crite-
ria that can be used to evaluate programs and projects.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 3
The 2040 Comprehensive Plan is the guide for the future development of Hastings. The Com-
prehensive Plan identifies the following factors that shape the community’s vision for the fu-ture. Economic development represents the initiatives taken by the City to encourage private
investment that is in line with these factors and Hastings’ vision for the future.
Natural Resources
Continue to protect and enhance the
region’s vital natural resources.
Community Character
Promote the traditional small town
character of Hastings by protecting
the look and feel of older neighbor-
hoods and seek to extend traditional
neighborhood design principles into
new areas.
Connected Growth
Plan to accommodate anticipated
growth in a flexible, connected, and
efficient manner.
Transportation
Plan and invest in multi-modal trans-
portation to better serve the people
living and working in Hastings.
Future Land Use Planning
Regulate land use consistently by
utilizing the Future Land Use Map
along with the goals, objectives and
policies of this plan.
Housing
Encourage expanded choices in hous-
ing location and types that provide
improved access to jobs and oppor-
tunities in the community.
Neighborhood Protection and
Improvement
Keep older neighborhoods attractive
and vital through improved streets,
parks and services, code enforce-
ment, design standards, and selective
reinvestment.
Fringe Growth
Adopt and follow a plan for growth,
protect perimeter locations for effi-
cient, compact neighborhood expan-
sion that includes commercial and
employment opportunities.
Riverfront and Downtown
Revitalization
Continue to restore underutilized
downtown and riverfront properties
to viable commercial, residential or
recreational opportunities.
Sustainable Growth
Enhance the sustainable nature of
Hastings by investing in established
areas, carefully planning new neigh-
borhoods, providing attractive public
amenities and protecting environ-
mental resources
Economic Development Initiatives
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 4
Ongoing Actions
While the 2020 Update focuses on strategic initiatives, the foundation of City economic devel-
opment efforts is a set of ongoing actions. These core functions are ongoing and occur regard-
less of the annual action plan. Key ongoing actions include:
• Establish and maintain strong working relationships and communications with key stake-
holders inside and outside of Hastings.
• Coordinate economic development activities with HEDRA, City Council and City depart-
ments.
• Manage the “Business” section of the City website to provide relevant and timely infor-
mation.
• Seek new and creative funding sources.
• Respond promptly to opportunities.
These ongoing actions play an important role in achieving the City’s economic development
objectives.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 5
Strategic Initiatives
The 2019 Plan contained four “immediate actions”. These actions provided a focus for eco-
nomic development activities over the past year. The immediate actions in the 2019 Plan are:
• Develop and implement strategies for addressing housing issues related to economic de-
velopment.
• Identify and act on opportunities to enhance the environment to operate and locate busi-
ness in Hastings.
• Create and implement strategies to effectively address redevelopment opportunities.
• Solidify internal economic development functions.
Both the results and the learning from undertaking these actions shape the direction of the 2020 Update.
The 2020 Update of the Strategic Plan for Economic Development replaces immediate actions
with strategic initiatives as the focal point of the Plan. The 2019 Plan was a starting point. In
that context, immediate actions was an appropriate characterization for these activities. Through the efforts to undertake the actions in the 2019 Plan, several enduring strategies
have emerged. These Strategic Initiatives will be the focal point of City economic development
activities for the foreseeable future. These Initiatives will have the greatest positive effect on
the community. The Strategic Initiatives address four critical issues: Spades, housing, redevel-
opment and business development.
Initiative #1 – Explore the opportunities presented by Spades
In July 2020, HEDRA will consider entering into a preliminary development agreement (PDA)
with Spades SBC creating a framework for building the company’s headquarters on Block 1.
Spades is a new company with the vision of becoming the key organization in global efforts using reforestation to mitigate climate change. This project and the broader relationship be-tween Spades and the City of Hastings have significant implications for economic develop-
ment:
• The project creates a new, large daytime market for Downtown businesses.
• The project becomes an important user of lodging and meeting facilities at The Conflu-
ence.
• Workers in the headquarters building will create new housing demand. This demand may
help to attract new developers/builders to Hastings.
• Spades will bring visitors to Hastings from across the world.
• Spades will enhance the identity of Hastings and create the opportunity for additional
business development.
If the PDA is approved, the focus for economic development is two-fold. (1) Work with Spades
to create a viable development plan for Block 1. (2) Explore benefits to Hastings from Spades
presence. This focus involves the following actions:
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 6
• Work with Spades to create a site and building plan that meets the company’s needs and
anchors the east end of the riverfront. This task will include provision of adequate parking,
management of traffic and preparation of financial analysis needed to determine sale price
for Block 1.
• Prepare a timeline for office construction and business development. The timeline will
help to identify the potential need for interim office space and housing for the work force.
The timeline will also be useful in helping local businesses connect with Spades.
• Create strategies for becoming a “green city”. The objective of this task is to define what it
would mean for Hastings to become a green city, identify potential action steps, evaluate
steps that best leverage relationship with Spades, and create proposed multi-year action plan.
• Understand the potential impacts of Spades ability to attract visitors and other businesses
to Hastings.
These issues affect the other Initiatives in the Strategic Plan Update.
Initiative #2 - Meet the housing needs of Hastings
Perhaps the most important outcome of the 2019 Plan was the recognition of the importance
to housing to economic development. The focus of the 2020 Update shifts to the actions need-
ed to meet the housing needs of Hastings.
Context
Housing and economic development are inseparable. Housing allows people to live in Has-tings. People create the market for businesses, work force for employers and students for
schools. Housing produces tax base for local governments. The local housing stock is shaped
by a variety of factors: style, age, condition, location, and availability. The characteristics of the housing stock influences who lives in Hastings. The lack of adequate housing impairs the abil-ity to achieve many City economic development objectives.
The assessment of housing needs in Hastings should not occur in a vacuum. The demand for
housing will be influenced by a variety of factors in the coming decade.
• Overall population growth is slowing. The Star Tribune recently (December 29, 2019) re-
ported “State demographers forecast 5% growth in the 2020s, a pace that will lift the popu-
lation from about 5.6 million to 5.9 million people. That’s down from 7.2% growth in the
2010s and even well below the 6.8% pace of the 1940s, the previous lowest-growth dec-ade.” Less population growth places more importance on the ability of Hastings to attract
and retain residents.
• At the same time, the composition of the population is changing. Among the key findings of the Metropolitan Council’s 2019 Regional Forecast update was “Major demographic
shifts now underway will change our region dramatically. By 2040, the region's population
will be more racially and ethnically diverse, older, and more likely to live alone or in larger
households.” All of these factors affect housing needs in Hastings.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 7
• Millennials (persons born between 1981 and 1996) will be important forces in the housing
market. Understanding the housing demands of this generation is essential to housing pol-
icy in Hastings. Millennial homebuyers also face unique challenges. In 2019, the average
student loan debt was $31,172 per person with a monthly payment of $393 (Credit.com). This financial burden affects the ability to save for a down payment, to afford mortgage payments, and to pay for updating and improvements to older homes.
• The affordability of new construction decreases as increases in housing costs outpace in-come growth. A September 2019 report from the Federal Reserve in St. Louis explains “As
of the first quarter of 2019, three broad house price indexes—FHFA’s expanded-data
House Price Index, the S&P CoreLogic Case-Shiller Home Price Index and the CoreLogic
National House Price Index—all stood more than 50% above levels from seven years earli-er, corresponding to an average annual rate of increase of about 6%. Meanwhile, per capita personal income increased about 25% in those seven years (3.3% annually), while consum-
er prices were up only about 12% (1.5% annually).”
• The ability to find workers will be become more difficult as the aging population leaves the work force. Employment in Hastings is also affected by transportation. In 2015, only 3 out
of 10 people working in Hastings also lived in Hastings. Providing a work force that at-
tracts and retains businesses requires increasing the number of people that live and work
in Hastings.
Each of these factors plays a role in creating and sustaining an economically strong communi-
ty.
The 2019 Plan clearly identified the ramifications of limited
new housing construction over the past decade. A key task of the 2019 Plan was to evaluate current housing needs and re-port the findings. Early in 2020, HEDRA and the City Coun-
cil received a staff report on Housing and Economic Devel-
opment in Hastings: An Examination of Housing Issues and Needs (Needs Report). The Needs Report identified and dis-cussed a variety of housing issues in Hastings. The Strategic
Assessment section of the report is included in Appendix A
for reference.
It is important to remember that housing initiatives related to economic development occur within the context of the
2040 Comprehensive Plan. The Comprehensive Plan con-
tains the Housing Plan for the City. The 2020 Update must
be consistent with the goals and policies of the Housing Plan, but it is not part of that Plan. The contents of the 2020 Up-
date should not be entangled with amending the Compre-
hensive Plan.
Focus
The issues discussed in the Needs Report fit into three City policy objectives:
1. Ensure that the housing stock in Hastings attracts people to move to Hastings and to stay here through all phases of life.
2. Encourage the construction of new housing.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 8
3. Maintain the quality of existing homes and the character of neighborhoods.
Life Cycle Housing
Objective #1 is based on the concept of "life cycle housing". Entry-level housing creates the
opportunity for people to move Hastings. As people's needs change, the housing stock needs
to provide opportunities for people to "move up" to homes with more space and amenities. Senior housing provides housing for aging residents to stay in Hastings and free up housing for new residents.
While we can agree on this objective, more investigation is needed to better understand the
actions required of the City to achieve this objective.
1) Data suggests that the age, style and price of existing homes meet the needs for entry-level housing.
• Are these housing units desirable and attracting people to Hastings?
• Is there an adequate supply of available housing?
• Is there a proper mix of ownership and rental options?
• What other factors are barriers to attracting entry-level home buyers?
2) It appears that there lack of move up housing options.
• What move up options are missing?
• If people cannot find desired move up housing, do they move away or stay in their ex-
isting house?
3) The market is responding to the need for senior housing in Hastings. Approximately __
units are planned to start construction in 2020.
• What is the demand for additional senior housing?
• What types o f senior housing are needed?
• Are there appropriate sites?
• Will Hastings seniors move into these units?
• Are other actions needed to help seniors age in place?
4) Overall, do we have a housing supply that matches wit the changing demographics of the
region?
New Construction
In February, the City Council approved the annexation of 40 acres for the construction of 120
single-family and detached townhouses. This will be the first significant new housing devel-
opment in Hastings since 2006. Using this project as a catalyst for sustaining steady new
construction for economic development. Focus activities include:
1) This project provides an excellent case study to review and evaluate our development pro-
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 9
cess and fees. Are adjustments needed to better fit current market needs.
2) This project is the opportunity to get back on the radar for regional home builders. What can we do to encourage more builders to come to Hastings?
3) Given the lack of available land within the City, new construction will occur on property
currently outside of the city limits. What is the plan for addressing the infrastructure and
annexation needs f this growth?
Existing Housing
Maintaining the quality of the existing housing stock and the character of neighborhoods is
essential. Additional information is needed to create appropriate strategies and programs to
achieve this objective.
1) What is the condition of the existing housing stock?
2) How can maintenance issues be identified?
3) Is there any relationship between housing maintenance and the conversion to rental hous-
ing?
4) Have older homes been updated?
5) Do homeowners associations have plans and the financial resources to adequately main-
tain their units?
6) Is it possible to build a GIS database with this information about existing housing?
Actions
While all of the questions raised here require answers, the City does not have the resources to address all of these issues and other economic development initiatives. The City must take a strategic approach to meeting the housing needs of the community.
1) Prioritize issues
As with all aspects of economic development, attention will be given to opportunities given to us. Minus that impetus, however, guidance from the City Council is needed. Staff efforts must be focused on those issues that have the highest priority.
2) Set roles and responsibilities
In addition to setting priorities, the City Council should determine roles and responsibili-
ties of other stakeholders in addressing these issues.
HEDRA will be a key participant in addressing local housing issues. HEDRA began as the
Hastings Housing and Redevelopment Authority. It retains the statutory powers of a HRA.
Does the Planning Commission play a role in addressing any of these issues?
How should the Chamber of Commerce, the local real estate sector and the community at
large play a role in housing?
How can be resources and expertise of the Dakota County Community Development Agen-
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 10
Initiative #3 — Work with property owners and developers to re-develop underutilized and blighted property.
As an older community, redevelopment is an essential part of economic development in Has-tings. The City has invested time and resources in laying the foundation for redevelopment. The focus of the 2020 Update is to encourage redevelopment in 3 specific areas: Vermillion
Street Corridor, Downtown and Target site.
Vermillion Street
Attracting private investment to the Vermillion Street Corridor is a clear priority for the City. The Vermillion Street Corridor Study is the City’s guide for redevelopment. An often over-looked element of the Study is the Action Matrix. The Matrix contains 52 separate actions for
achieving the City’s vision for Vermillion Street.
The Action Matrix has not been extracted from the Study and used as a tool for economic de-
velopment. A review of this Matrix by HEDRA is a useful next step. The review will answer the following questions:
1) What is the true nature of action - development guideline/policy, ongoing action, specific
task, or something else?
2) Are all actions still valid? If not, should the action be modified or deleted?
3) What are the priorities for actions that represent specific tasks?
This review helps HEDRA and the City Council identify next steps for staff and provide guid-
ance for the 2021 Budget.
Another important outcome of the Action Matrix review is to identify factors that need to be considered in the upcoming Highway 61 Corridor Study. MNDOT plans to study Highway 61 in Hastings in anticipation of an improvement project targeted for 2025/2026. It is expected
that the Study will start in the second half of 2020. The Action Matrix review will be used to
create a description of the City’s position on improvements to Highway 61.
Downtown
Economic development efforts in the Downtown will be shaped by The Confluence and the
Downtown Property Utilization Study.
The Confluence is scheduled to open late in 2020. Our economic development efforts seek to
build off of the impact of The Confluence:
1) Work with City Communications, Chamber of Commerce/Tourism Bureau, and the Devel-
oper to create a common message about The Confluence and Hastings.
2) Prepare marketing materials about The Confluence and Hastings and use these materials
to engage other potential developers.
3) Seek opportunities to make presentations to Urban Land Institute (ULI), Economic Devel-opment Association of Minnesota (EDAM), Sensible Land Use Coalition (SLUC), and other relevant groups.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 11
The hope is that the recognition of this project and the increased economic activity will create redevelopment opportunities. To prepare for this possibility, HEDRA is conducting a Down-town Property Utilization Study. The purpose of the Study is to evaluate the development po-
tential and to create development plans for five sites based on HEDRA-owned property in the
Downtown area. The findings and recommendations of the Study will be complete before the
opening of The Confluence. This information will be a valuable tool in building off of the eco-nomic energy from The Confluence.
Target Site
The Target building has been vacant for more than two years. Facilitating the reuse of the site
in a manner that benefits the community is a high economic development priority. The reuse of
this property is influenced by several factors:
• The property is controlled by an Operation and Easement Agreement between Dayton Hud-
son Corporation and Hastings 55 LLC. The terms of the Agreement apply to building char-
acteristics, allowable business uses, parking and other site use. The Agreement was estab-lished in 1999 with the original construction. Dayton Hudson used these agreements to protect Target stores from adverse development on adjacent property. Now, the Agreement
gives adjacent property owners control over the reuse of the Target site.
• The primary affected property owners is Phillips Edison & Company. Phillips Edison owns the Hastings Marketplace shopping center, including the DaVita Dialysis parcel, and rights
under the Agreement for the Culver’s and Arby’s parcels. Phillips Edison is one of the na-
tion’s owner and operator of grocery-anchored shopping centers, with a portfolio of more than 300 properties. North American Banking Company is the other party to this Agree-ment.
• It is our understanding that Target has set a price of $2.2 million for the property.
• The lack of growth in Hastings, the retail markets in the surrounding area, and the decline
the number of “big box” retailers reduces the pool of potential users.
The combination of these factors significantly affects the universe of potential purchasers,
We have established a good working relationship with CBRE, Targets real estate broker, and communication with Phillips Edison. We have made it clear that the City will do all that it can
undertake a solution that is acceptable to the parties and benefits Hastings.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 12
Initiative #4— Encourage the creation and growth of local business.
As described at the beginning of the 2020 Update, our fundamental objective is to encourage private investment that is in line with Hastings’ vision for the future. To date, economic development in Hastings has not focused on a specific type of business. An examination of
past trends and current conditions points to the need for a more focused approach that seeks
to create and grow local businesses. A local business means a business based in Hastings and
not part of a regional or national set of businesses. The rationale for this approach is clear:
• Growing local businesses is already the foundation of the local economy. Table _ lists the
new businesses identified in the Community Development Annual Report from 2011
through 2019. Over this nine-year period, _ out of _ new businesses (_%) were local.
• Setting aside the 50-acre parcel, the Business Park contains nine parcels ranging in size
from 1.0 to 3.1 acres. The 2040 Comprehensive Plan identifies a new business park locate
on County Road 46 west of the existing city boundary. There are no plan to acquire or develop this property.
• We are competing with other communities with better sites, closer to the regional highway
network, access to mass transit, and larger populations for workforce and customers.
• Local businesses have deeper roots in Hastings. There is less risk that a business will
unexpectedly move to another city.
• They often invest more in the community. More business spending tends to stay in
Hastings.
• Local businesses create more opportunities to live and work in Hastings. Lowering the
time and cost of travel to work is a significant quality of life factor.
• Money spent on financial assistance is more effective. Funds go to business development and not to incentive competition with other cities.
Creating and growing local business is a long-term strategy. While Hastings has experienced
small business development, it is not the result of stated objectives or programs. The focus of
the 2020 Update will be to understand the needs and to build the assistance to meet local
needs. Steps to be taken in 2020/2021 include:
1) Work with the Chamber of Commerce am Downtown Business Association to identify the
most meaningful ways that the City could help grow local businesses.
2) Conduct focus group meeting of business owners in each business district obtain input and
guidance.
3) Create programs to address needs identified in #1 and #2.
4) Enhance the City as an information and referral resource for local businesses.
5) Create programs that help local entrepreneurs to convert their ideas into new businesses.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 13
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-1
Appendix A - Strategic Assessment
The information in this appendix comes from Housing and Economic Development in Hastings: An Examination of Housing Issues and Needs, Working Draft Presented to City Council January 21, 2020
The economic sustainability of Hastings relies on a sound housing stock with a range of types,
styles and prices. Both the 2040 Comprehensive Plan and the 2019 CDA Needs Assessment contain valuable information and guidance. Neither of these documents is designed to provide a strategic assessment of housing issues and the implications for the future of Hastings. The
following section explores the key facets of housing in Hastings and explain the policy implica-
tions of these factors for economic development.
Affordability
One of the most important housing issues facing Hastings is hous-ing affordability. The supply of housing is not important if people
cannot afford to purchase and to live in these homes.
Hastings has housing options that meet the criteria for affordable.
According to the 2019 Metropolitan Council housing affordability limits, a home price of $254,500 or lower is affordable for a house-
hold at 80% of Annual Median Income ($75,000). Fifty-four per-
cent (54%) of single family homes in Hastings meet that criteria
(using Estimated Market Value as a proxy for price). Eighty-two percent (82%) of these affordable homes were built between 1950 and 2000 (See Figure 1).
The chart in Figure 1 makes several other points:
• 18% of single family homes are affordable for households at 60% of AMI.
Figure 1
Home Value (EMV) By Year Built
The age and style of housing in Hastings provides a supply of affordable housing.
We do not know if affordable homes have the style and condition to attract homebuyers.
Affordability must be considered in conjunction with employment and wages. A house is affordable only if wages are sufficient.
Available data suggests that new construction is not affordable for the average household.
City fees and charges are one factor in the costs and affordability of new construction. These fees and services should be consistent with the value of the services provided.
Affordability
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-2
• Only 1% of the houses built after 2000 are affordable.
• Hastings has a limited supply of higher value homes. Only
1.5% of homes have a value greater than $500,000.
The availability of affordable single-family homes is an asset for
Hastings.
The reality of housing affordability is much more complicated.
The general standard is that housing creates a financial burden when housing costs (mortgage, insurance and property taxes) exceed 30% of gross income. This standard is difficult to under-
stand without some context.
To explore housing affordability in Hastings, the parameters that
determine housing costs must be defined. For the purpose of this report, the calculations of housing costs use the following as-
sumptions:
• 10% down payment
• 30 year, fixed-rate mortgage at 4%
• $1200 per year homeowner’s insurance
• Property taxes at 2019 rates
These assumptions shape basic illustrations of affordability.
• The Metropolitan Council reports that the Medium Home
Value in Hastings is $192,500. The Median Household In-
come is $66,400 per year. This makes housing costs 21.32% of income. The Median Value home is affordable at incomes
of $47,200 and above.
• The Saint Paul Area Association of Realtors shows the August 2019 median sales price of homes in Hastings to be
$254,500. This price moves the affordability threshold to in-
comes of $61,120 per year or higher.
• The affordability threshold shifts dramatically when looking
at new housing. The average building permit value for a new
home in 2019 was $265,000. Assume that the cost of land,
infrastructure, administration and profit pushes the price of a new home to $400,000. The minimum income which this
home is affordable is $93,775.
Another perspective comes from comparing housing affordability
for the average income of different occupations. The US Bureau of Labor reports wage estimates for each state. The chart in Fig-ure 2 shows the maximum housing price that is affordable for
different occupations based on May 2018 wage estimates and the
housing assumptions listed above.
The following are the Key
Findings of the Minnesota
Housing Partnership’s biennial
report:
More than 1 in 4 — or 572,133 —
households in Minnesota pay
more than they can afford for
housing, making it likely that
they cut back on necessities like
food, education and medicine
simply to pay their rent or
mortgage. That number grew by
nearly 26,000 households from
2015 to 2017.
Racial disparities persist. Forty
percent of households of color
experience cost burden
compared to 23 percent of white
households.
The gap between housing costs
and incomes is growing. From
2000 to 2017, median rent has
risen 13 percent, while median
renter income has fallen 5
percent.
Minnesota’s top in-demand jobs
don’t pay enough to afford
housing. Only one of the seven
top in-demand jobs in Minnesota
pays enough to afford a median-
value home. Only two of these
jobs pay enough to afford a two-
bedroom apartment.
High housing costs continue to
threaten the health of Minnesota
seniors. Fifty-seven percent of all
senior renters and more than a
quarter of all senior homeowners
pay more than they can afford for
housing.
State of the State’s Housing
2019
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-3
Hastings’ existing housing stock provides options that are afford-
able for many occupations. This chart illustrates the problem in expanding the supply of worker housing. Many occupations can-
not afford the price of new construction.
Rents are deemed to be affordable when rent including utilities
(“gross rent”) represents 30% or less of gross income. The Met-ropolitan Council reports that the Medium Household Income in Hastings is $66,400 per year. Gross rent must be $1,660 per
month or less to be affordable. The discussion of affordability for
owned housing uses the Assessor’s Estimated Value as a proxy
for home price. No comparable data exists for rents. As a general indicator, the 2018 Median Rent reported by the Metropolitan
Council is $899/month. The 2013 County Housing Needs As-
sessment found average rents in Hastings to be $544 to $999
depending on unit size. The 2019 Needs Assessment will provide
updated data.
As noted with homeownership, affordable rents vary with jobs
and income. The chart in Figure 3 calculates the maximum gross
rent affordable for different occupations. The available infor-
Figure 2
Maximum Affordable House Price for Selected Occupations
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-4
mation suggests that rental housing in Hastings is generally af-fordable. Given the limited data, important questions remain to be answered. Key questions include:
• How does the addition of utility expense change the afforda-
bility calculation?
• What is the unmet demand?
• Given the age of many rental units are available units desira-
ble?
Cost of New Construction
The construction side of the affordability equation is equally complicated. Land, site development, materials, labor, infrastruc-
ture, fees and overhead all contribute to the cost of housing.
While all development costs need to play a role in controlling the
cost of housing, the fixed cost of new construction limits the abil-ity to achieve affordability solely with cutting expenses.
Effective strategies related to new construction of single-family
homes must be based on an understanding of the factors that de-
termine the cost of housing. The development community, both locally and regionally, contends that fees charged by cities are
excessive and unnecessarily add to the cost of housing. The focus
Figure 3
Maximum Affordable Gross Rent for Selected Occupations
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-5
in Hastings has been on charges to connect to the municipal utili-
ty system (SAC and WAC). A broader look at the elements of housing costs is needed to put city costs into context. The primary
components of housing cost are described below.
Land
The HAI Study (see sidebar on previous page) treats land like a
developed parcel. Its analysis assumes that the land cost includes raw land, infrastructure and fees. This combination of factors
blurs the impact of the developer and the City. Limiting land costs
to the actual acquisition (and holding costs, if any) works better.
The Developer is solely responsible for these costs.
Construction
Similarly, the HAI Study includes various City fee costs in con-struction. City fees should be stripped out and this number
should only reflect developer expense. This allows for a better
sense of how labor and materials affect price.
Infrastructure
Hastings requires the Developer to install infrastructure to City specifications. This has several implications:
• The Developer must pay for infrastructure prior to generating
any revenue from land sales or construction. The finance and carry costs either add to the home price or erode profit.
• City design standards are intended to ensure that the infra-
structure is appropriate for Hastings. The City will assume ownership and maintenance responsibility for the infrastruc-
ture.
• Infrastructure right-of-way, stormwater management area and park land dedication reduce the amount of land that can
be sold.
• The City charges the Developer for cost of managing and in-specting the improvement project plus an administrative fee
equal to 10% of the inspection costs.
Developer Overhead
At first glance, overhead costs appear to be under the control of
the developer. The City does, however, impact these costs through
the time and materials required to obtain City approvals.
A focal point of this discussion has been
the 2019 report from the Housing
Affordability Institute “Priced Out: The
True Cost of Minnesota’s Broken
Housing Market” (the “HAI Study”). In
analyzing housing costs, the study
divides costs into four categories: land,
construction, administration and profit.
Local fees are built into the land and
construction costs. This breakdown of
costs does not provide a useful
framework for planning in Hastings. The
following categories are more closely
aligned with housing costs in Hastings:
Land: The actual cost of land pro-rated
to each parcel.
Construction: The cost of labor,
materials, services and other items
directly related to building the house.
Infrastructure: The cost of infrastructure
built to serve the subdivision pro-rated
to the parcel.
Developer Overhead: Developer costs,
such as administration, marketing, legal
and finance, passed on to the
homebuyer.
Developer Profit: Home construction
will not occur unless the Developer is
able to generate income in excess of all
project costs.
City Fees and Charges: This category
includes the direct costs imposed by the
City to develop a subdivision and build a
house.
Elements of Housing Costs
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-6
The development community, both
locally and regionally, contends that
fees charged by cities are excessive
and unnecessarily add to the cost of
housing. The focus in Hastings has
been on charges to connect to the
municipal utility system (SAC and
WAC). These charges are one part of
the set of fees applied to new
development that include:
development applications review
and processing, park dedication,
building permits, and infrastructure
construction inspection and
administration. These costs add to
the price of new housing in Hastings,
but they also represent services that
occur as a direct result of
development. Several questions help
frame the issues for the City:
•Do City fees and charges accurately
reflect the costs of new
development projects?
•Would a reduction in fees and
charges be passed on to the
homebuyer and make housing
more affordable?
•Does other value received from new
development offset reduced
revenue?
•If fees collected from development
do not pay for the services, how
are they paid for?
These questions must be answered
as part off a broader discussion
about City objectives for growth and
housing.
City Fees
Developer Profit
Home builders need to operate profitably to stay in business. Profit is what remains after deducting all of the direct project ex-penses from revenue earned from the sale of houses. This reve-
nue comes in over time as lots are sold and houses are built. All of
the land acquisition and site preparation work occurs (and must
be financed) before revenue can be generated. If pre-construction funds are borrowed, then there are finance and interest expenses.
The pace of development influences profitability.
Market forces play a role in housing price and profit. Competi-
tion among builders helps to manage prices by providing home-buyer’s with choices. Lacking competition, the builder has more latitude in setting the price.
City Fees and Charges
The City collects a variety of fees related to land development and
housing construction. These fees are intended to offset the costs
of new development.
• Land use approval fees are charged based on the nature of the
project and the necessary City approvals. Potential fees are for
annexation, comprehensive plan amendment, EAW, prelimi-nary and final plat, rezoning, site plan review, vacation of
right-of-way, and variances.
• The City may receive land for park dedication or receive pay-ment in lieu of land. Park dedication allows the park system
to expand and serve new residents. Park dedication does not
fund both acquisition and development.
• New development pays for access to municipal water and san-
itary sewer systems. Current charges include sewer intercep-
tor fee, sewer access charge (SAC) and water access charge (WAC). The City also collects SAC for the regional wastewater system on behalf of the Metropolitan Council. The rationale is
that existing users paid for the system capacity that allows
new development to occur. The charges help to fund future
improvements that will replace this capacity.
• Building permit fees are based on the nature of City inspec-
tions needed to ensure compliance with applicable building
codes.
Fees for land use approvals, sewer interceptor and park dedica-
tion are paid when the land is platted. SAC/WAC and building
permit fees are paid at construction.
The point of this discussion is that there are a wide range of fac-tors, controlled by both the developer and the city, that impact the cost of housing. A comprehensive approach is needed to in-
crease affordability while meeting objective of both city and de-
veloper.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-7
Life Cycle Housing
Life cycle housing is the concept of providing the range of hous-ing choices allows a person to remain in the community through-
out their life. This range of choice involves starter homes, move
up homes and housing options for seniors.
Hastings needs to attract young families with children. In addi-tion to being first-time home buyers, these new residents are likely to be “millennials”. This age group approaches housing dif-
ferently than previous generations (see sidebar). On the surface,
Hastings seems to have the housing, neighborhoods and commu-
nity that fits Millennial criteria. While these factors may get peo-ple to look at Hastings, housing options must be desirable and
available.
The desirability of entry-level housing represents a gap in
knowledge. Information on the condition of the existing housing stock has not been compiled. We do know if core elements of old-er homes (roof, windows, HVAC) have been replaced. We do not
know if interiors have been updated. Without updating, older
homes may have an affordable price, but do not provide the “turnkey” home sought by some buyers. Deferred maintenance also represents a housing cost not depicted in the price.
A sustainable housing supply requires “Move up” housing. Move
up housing allows residents to transition from starter home to a
larger dwelling with more amenities. Without this option, resi-dents have two choices: (1) leave Hastings for a community with
the desired housing or (2) Stay in place and remodel the existing
home. Neither option advances community growth objectives.
The final element of Life Cycle Housing in Hastings is senior housing. This housing allows older residents to remain in Has-tings. Senior housing makes existing homes available for move
up or move in residents. The construction of senior housing has
not kept pace with the expansion of this population. The 90-unit
project proposed for Schoolhouse Square would be the first new senior housing units built in more than a decade.
Much of the data in this report
looks back at historical trends. It
is also important to look into the
future. Planning must consider
the changing housing demand of
the Millennial Generation.
Millennials were born between
1981 and 1997 and represent the
largest generation in our history.
Research shows that the
homeownership characteristics
of Millennial’s are different than
any previous generation. Some of
the differences include:
• Millennials are less likely to
be homeowners.
• Millennials tended to get
married and have children
(events that trigger
homeownership) later in life.
• Millennials preferred living
in a more urban
environment.
• Greater amounts of student
loan debt create barriers to
homeownership.
Millennials and Homebuying
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-8
Townhomes and Homeowner’s Associations
The traditional; single-family house is “detached” - not connect-ed to another dwelling. A townhouse is a single-family dwelling attached to one or more other dwellings. The homeowner owns
the unit and a pro-rata share of the common property in a speci-
fied area of townhouses. The townhouse offers a more affordable
ownership option with no responsibility for maintenance of grounds or buildings. A fee is paid to a homeowner’s association
for maintenance.
The MetroGIS database shows 1,165 townhouse units in Has-
tings. Important characteristics of this component of the housing
stock include:
• Townhouses represent a newer part of the housing stock (se
Figure 4). 53% of the units were built since 2000. Only 5% of the units were built before 1980.
• New construction has effectively disappeared. Only 1% of all units were built between 2010 and 2018. Interest in new townhome development is likely to grow to meet the need for
affordable new construction and additional options for sen-
ior housing.
• The affordability of townhomes is illustrated in Figure 5. This
chart shows the average Estimated Market Value of town-
house units in Hastings by year built. The vast majority of the units fa;; below the $254,600 affordable threshold for the
* 40 units had no year built listed
Figure 4
Timing of Townhouse Construction
The importance of homeowner’s
associations is often overlooked.
Unlike a single-family home, a person
does not have individual ownership of
the building exterior, windows and
roofs. The HOA is responsible for
maintenance. The HOA is also
responsible for streets and common
property. The unit pays monthly dues.
A portion of the dues should be set
aside in reserve for future
maintenance and replacement.
Problems may arise when there is no
capital plan or it is inadequately
funded. The HOA cannot give a
mortgage interest in the buildings
making bank loans very difficult.
Extra increases in dues or special
assessments require homeowner
approval and sometimes super-
majority votes. Underfunded
associations are trapped in downward
spiral of deteriorating property. The
need for a fix often comes to the City.
Homeowner’s Associations
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-9
Median Income in Hastings. In recent years, the average value rose above the affordability threshold.
A homeowner’s association (HOA) is created to provide for
maintenance of the common property (see sidebar). The HOA
plays a critical role in the condition of this portion of the housing stock. (Note—These issues also apply to condominiums.) The op-
eration and financial condition of the association determines the
ongoing maintenance of these housing units. Homeowner’s asso-
ciations have policy implications for cities that are often over-looked. The City does not track the establish or operation of HOAs in Hastings. The number of individual townhouse subdivi-
sions provides a proxy for potential HOA. Assuming each subdi-
vision has its own HOA, there could be 51 HOA in Hastings.
Existing Single-Family Housing Stock
One of the most important characteristic of Hastings’ housing is the diversity of the housing stock. Most descriptions of housing
are based on broad, high level statistics. For example, the Metro-
politan Council profile of Hastings shows housing type by the
number of units in each building. In 2017, single-family homes accounted for 55% of all housing units. The remainder of the
housing stock consists of townhomes (20%), apartments (15%)
and other types (10%). While these categories are good for com-
paring jurisdictions, they do not adequately describe the nature of
housing in Hastings.
Parcel data in the MetroGIS database allows a more informative
view of housing factors. The picture it paints shows diversity of
housing options not found in the typical suburban community.
Figure 5
Average Estimated Market Value By Year Built
The existing stock of singe-family housing contains a variety of housing styles built over a long period of time providing a wide range of housing choices.
The age and style of house in Hastings offers a supply of affordable options.
These characteristics also pose potential challenges. Older styles, such as the split level, may become less desirable for current homebuyers. Older homes may not have been updated to provide the features and amenities sought in today’s market.
Existing Homes
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-10
Housing in Hastings was built over a long span of time. Almost 9% of single-family homes were built before 1900. Hastings housing boom began in 1950 and ran through 2005. Three-
quarters of the single-family homes in Hastings were built that
period. Roughly one-half of homes were built prior to 1975, mak-
ing the majority of Hastings homes more than 45 years old.
The age of the housing stock is also reflected in the style of
house. The chart in Figure 6 combines the style of home with the
year built. This chart not only shows the growth of the housing
stock, but also the changes in housing preference. Early housing in Hastings were built as a mix of dwellings between one and
two stories. These varieties of house practically disappeared after
1950. The 1950s and 1960s were dominated by the single-story
suburban “rambler”. Preference then shifted to the split level. Single-family homes built since 2000 represent a mix of styles, but trending to larger, two-story homes. The diversity of age,
style and price provides a range of choice not available in many
cities.
Lack of New Housing Development
Building permit data collected by the City show several aspects of recent housing development in Hastings.
Growth in the local housing stock came to a halt at the peak of
the Great Recession and has been slow to recover. Building per-
mit data illustrates this situation (see Figure 7).
• New housing starts peeked at 383 in 2003. This represents
more units that were built over the ten-year span from 2008-
2017 (329 new units).
• Only four new homes started in 2010.
Figure 6
Housing Style by Year Built
The unprecedented lack of new housing
construction has had important negative
effects on the community.
• The most obvious effect is the lack of
population growth. After adding
almost 4,000 people from 2010 to
2010, Hastings grew by only 468
people from 2010 to 2017.
• Household income grew at a slower
rate than the rest of the Twin Cities.
Median Household income in
Hastings increased by 9.7% ($61,232
to $66,403) from 2010 to 2017.
During the same period, median
income grew 18.4% in Dakota County
and 21.9% over the 7-County Region.
• The population got older. From 2010
to 2017, the 60-74 and 75+ age groups
added 604 and 274 people,
respectively. The 20-29 age group lost
64 people. The under 20 age group
shrank by 576.
• These changes can also be seen in
household composition. In 2007, 28%
of Hastings households were married
families with children and 23% of
households were persons living alone.
By 2017, the situation had flipped to
19% married with children and 30%
living alone.
This lack of growth means fewer customers
for local businesses, fewer workers for local
employers and fewer students in the
Hastings School District. Changing
demographics affect the demand for and
ability to pay for goods and services, both
private and public. These trends create
barriers to attracting new development.
They suggest to the outside world that
Hastings would not be a good place to
build homes or open a business.
Implications of Limited Housing
Development
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-11
• Only 272 single-family homes have been built in the past 13 years.
• New multi-family housing has only occurred in the past three years,
• New medium density housing has disappeared from the local market.
Part of the ability to meet future housing needs comes from the capacity of homebuilders and
land developers to provide the type, quantity and cost of housing needed to attract people to
Hastings. Recent trends show the need to expand local capacity. From 2011 to 2018, one build-er accounted for 38% of the building permits for new housing. An additional 30% of the per-
mits were issued to builders that constructed six or fewer homes during this period. None of
the regions 2018 top builders worked in Hastings during that time. In fact, the last develop-
ment done by a regional homebuilder was in 2006.
Recent housing development has been limited to existing subdivisions and small plats. Over 96% of all housing built from 2011 through 2018 occurred on existing plats or are new final
plats within larger preliminary plats approved prior to 2006. The largest final plat approved
during this period created just 30 lots.
A continuation of these trends seems unlikely to meet the community’s future housing needs.
Future housing growth requires land available for development. Hastings has reached a point
with a very limited supply of vacant residential property. Figure 8 on the next page illustrates
this situation. Existing platted lots shown as undeveloped come from the MetroGIS database.
Figure 7
Building Permits for New Housing
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-12
The purpose of this map is not to inventory vacant parcels, but to
show the extent of the problem.
• There are platted lots that can be developed, but have not.
• There is very limited vacant land for future development with-
in the city limits.
• A person looking to build a new home in Hastings would find a small supply of choices.
These factors highlight the need to plan for new development lo-
cations outside of the City’s current boundaries.
Redevelopment
Housing is not solely an outcome. It is also a tool to achieve City redevelopment objectives. Redevelopment sites often face costs not found in the development of raw land: site assembly, demoli-
tion and clearance of existing structures, environmental cleanup
and structured parking. In most cases, property must be redevel-oped at a greater density to make the investment financially feasi-ble. Housing is the best way to achieve additional density in Has-
tings.
Both the Vermillion Street Corridor Study and the Downtown
Plan show housing as critical elements of envisioned redevelop-ment.
This relationship is a factor in planning for new housing. With a
finite amount of market demand for new housing, it will be im-
portant to balance new areas for multi-family housing with the need to encourage redevelopment of key sites.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-13
Figure 8
Existing and Potential Development Sites for Single-Family Housing (2019)
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-14
Rental Housing
The previous sections dealt primarily with owned housing. Not everyone can afford or wants to
own a house. The supply of desirable and affordable rental housing units is essential. “Rental Housing” is not a single housing type. It takes a variety of forms. In Hastings, the primary forms of rental housing are:
• Housing specifically designed to be renter-occupied. Apartment buildings represent the largest portion this type of rental housing. Hastings also has duplex and 4-plex buildings for renter-occupancy.
• Not all apartments are clustered in a common building. Apartments may share a building with commercial uses. These mixed uses are currently found primarily in the Downtown area.
• Housing built as owner-occupied housing that is currently rental property. These rental units include single-family , townhouse, condominium, and twinhome.
• Some single family dwellings have been converted into multiple rental units.
While all of these types help to meet the need for rental housing options, they have different policy implications for the City.
Current Supply
To ensure safe housing and to prevent the deterioration of structures, the City has enacted
Chapter 157 of the City Code. This Chapter provides a structure maintenance code for rental
residential properties. These regulations apply to both single- and multifamily dwellings. The regulations state the duties of owners and occupants along with the inspection and enforce-ment powers of the City. Chapter 157 also requires the owners of all rental housing to obtain a
license from the City. This licensing requirement also creates a database of rental property in
Hastings.
Current City license records show 688 properties providing 2,300 housing units. Rental hous-ing accounts for 23% of all housing units (based on 2018 Metropolitan Council estimate of
9,982 total housing units). Recent and planned construction will increase this share.
City licensing records help to describe the nature of the supply of rental housing:
• Figure 9 (on the next page) shows the variety of housing types that provide rental housing.
• The 202 single-family dwellings that are currently rental property represent 4% of the total
number of single-family homes.
• The percentage of rental housing is higher for single-family "attached" properties
(townhouse, condo, twinhome). More than 14% of these properties are rental.
• Almost one-half of all rental housing units come from housing types other than apartments
(see Figure 10).
Further investigation of City rental license data is needed to determine if this information can provide additional insights on rental housing in Hastings.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-15
Figure 9
Number of Rental Properties By Housing Type
Figure 10
Number of Housing Units By Property Type
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-16
Apartments
Apartments are the largest source of rental housing. The table in Figure 11 lists the existing supply of apartments in Hastings that have eight or more units. The current supply (including the 22 units to be added by The Confluence) totals 1,008 units.
This information illustrates several important points about this segment of the local housing
stock:
•Apartments are older. Fifty-four percent (54%) of the apartment buildings were built before
1980.
•The Great Recession stopped construction of new units. No new apartments were built from 2009 through 2016.
•There is renewed interest in apartment construction. Over the past three years, four projects adding 209 units were completed or are under construction. These units represent just 20% of the identified total.
The City has not conducted market research to determine if this supply meets local demand. It
is hoped that the County Needs Assessment will address this issue.
Name Type Use Units Year Built
The Confluence Market Family 22 2020
Voyager Estates Market Family 88 2019
Artspace Lofts Affordable Family 39 2017
Vermillion Shores I Market Family 36 2008
Eagle Pointe Apartments Market Family 66 2007
Park Ridge Assisted Living Senior 78 2002
Oak Ridge Manor Assisted Living Senior 67 2001
Mississippi Terrace Affordable Senior 40 1992
Riverbend Apartments Market Family 48 1979
545 35th Street W Market Family 8 1969
565 35th Street W Market Family 8 1968
1590 Spring Street Market Family 8 1968
Riverbend Apartments Market Family 18 1966
River Junction Apartments Market Family 12 1965
2301 Oak Street Market Family 9 1964
2300 Pine Street Market Family 8 1964
Guardian Angels Affordable Family 30 1934
Valley Manor Market Family 169 1971
Hidden Valley Apartments Market Family 138 1978
Westview Village Market Family 108 1972
Sibley Apartments Market Family 8 NA
Total 1,008
Figure 11
Supply of Existing Apartments (8 or More Units)
Strategic Plan for Economic Development 2020 Update (Working Draft) Page A-17
Redevelopment
The two recent market rate projects suggest that the construction of apartments is financially feasible on vacant land. There are indications, however, that the rent potential in Hastings may not generate enough income to support redevelopment. Redevelopment projects have the
same basic construction costs and rent constraints as “greenfield” development, but face costs
not found on vacant land.
• Redevelopment sites often require the assembly of smaller parcels at a higher cost per unit.
• Existing structures must be cleared and removed.
• Redevelopment sites are typically smaller. Developers must choose between surface park-
ing and fewer units and underground parking and greater costs.
The market is unlikely to support rent levels needed to make a project viable.
Staff has not explored this issue in great detail. If it proves true, this condition will fundamen-tally affect redevelopment in the Vermillion Street Corridor.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page B-1
Appendix B - Vermillion Street Corridor Action Matrix
Promote the Vision of Vermillion Street
1) Identify one point-person, either in City government, the Hastings Area Chamber of Commerce, or
other organization, to be the Vermillion Street recommendations manager. This person would be responsible for recommending code enforcement and partnering with businesses to improve their
facades.
2) Market the four district model site examples to promote the community's vision for Vermillion Street
3) Pursue the study's "development characteristics" recommendations for new development to achieve
the vision for Vermillion Street.
4) Use the model site redevelopment scenarios to guide the location, type, and amount of development.
5) Promote existing businesses that can draw customers from within the City and the from the greater
Twin Cities metropolitan region.
6) Work with local business and real estate organizations to maintain comprehensive and up-to-date inventory/database of available Vermillion Street properties.
7) Create a page on the City or Chamber of Commerce's websites to highlight work being done, events,
opportunities for development, and shopping and sights on Vermillion Street.
Encourage Investment
8) Continue promoting local, regional, state, and federal economic development programs aimed at attracting business and development investment.
9) Regularly meet with Vermillion Street business, real estate, and development community to apprise
them of active changes and improvements On-Going being undertaken and to identify opportunities for partnerships.
10) Work with property owners to improve their existing facades to enhance the appearance of Vermil-
lion Street, through facade improvement grants or loans.
11) Encourage developers and property owners to elevate the quality of architectural design as redevel-
opment occurs. Hastings has a tradition of attractive vernacular architecture and can take advantage
of the Twin Cities metropolitan region's embrace of high-quality contemporary design. The Cum-mins Foundation has long supported high-quality design in Columbus, Indiana, by covering the cost
of architectural fees.
12) Work with local business organizations to identify businesses to attract to Vermillion Street. A stra-tegic approach should be identified that can On-Going focus limited resources and capitalize on Ver-million's unique assets and existing businesses.
13) Leverage Vermillion Street's unique factors and resources to attract local and small businesses and
metro area customers to Hastings. These resources include Downtown, the Mississippi and Vermil-lion rivers, LeDuc Historic Estate, and unusual businesses, like the Hastings Coop Creamery and
Emily's Bakery.
14) Encourage and support the reuse of architecturally, historically, or socially important structures.
15) Offer tax incentives to allow businesses to renovate and expand their spaces.
16) Establish a coworking space to provide nontraditional, collaborative working spaces for new compa-
Strategic Plan for Economic Development 2020 Update (Working Draft) Page B-2
nies to start and grow at a cheaper cost.
17) Ensure that the Sewer Availability Charge (SAC) and Water Access Charge (WAC) are comparable to
that of other communities in the Twin Cities metropolitan area. Market the Metropolitan Council
SAC Deferral Program and City of Hastings SAC and WAC Deferral Program to prospective inves-tors.
Events and Temporary Installations
18) Organize and facilitate events on Vermillion Street to encourage social activity. Locations could in-
clude Todd Field, Vermillion Falls Park, or parking lots and vacant land along the street.
19) Consider temporary public art installations, where pieces are on display for up to a few years, on va-cant or underused land.
20) Match property owners with local artists to develop new public installations.
21) Utilize visible vacant or underused spaces and land to initiate new activities and interest in Vermil-lion Street.
Land use, Planning, and Zoning
22) Incorporate the study's recommendations into the City's comprehensive plan.
23) Amend the City's zoning code to allow new ground-floor residential uses
24) Amend the City's zoning code to allow for shared parking and adopting the minimum parking re-
quirements as a maximum, which will remove additional barriers to future developments.
25) Review land use regulations to revise or eliminate text that does not support existing businesses or attract new ones.
26) Incentivize residential development on Vermillion Street to support local businesses, accommodate
a broader range of a household life cycle, and increase the property tax base.
27) Market increased residential development to attract new businesses.
28) Encourage the location of public serving entities on Vermillion Street, including City, County, and
School District.
29) Prioritize establishing Vermillion Street as a preferred location for special events and activities that may need larger sites than available Downtown.
Building Siting
30) North of 6th Street, new buildings must maintain/continue the 2nd Street street wall, except that
short lengths may be recessed for outdoor dining and pedestrian-serving functions.
31) South of 6th Street, new buildings may be recessed from the sidewalk for outdoor dining, other pe-destrian-serving functions, or landscaping. Parking in front of buildings should be discouraged.
32) Commercial buildings should be sited close to the sidewalk so that pedestrians and motorists may
see activity and merchandise easily.
33) Site buildings so that service and delivery entries, as well as HVAC, and other buildings operations
are located away from street frontages. If this is not possible for all frontages, prioritize locating
them away from Vermillion Street.
34) Buffer residences from commercial and other uses, including refuse storage areas.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page B-3
Parking and Access
35) Amend the City's development standards to require eliminating curb cuts as properties are redevel-
oped or should current developments no longer require their use.
36) Shared parking should be encouraged.
37) Locate all on-site parking behind, to the side of, or within buildings. Parking in front of buildings
should be discouraged.
38) As properties are redeveloped and parking provided to the rear, wayfinding signs should be used to inform the public of parking's location.
39) Discourage right-turn lanes into private property.
Roadway, Intersections, & Signalization
41) Pursue the study's "public improvements" recommendations to achieve the vision for Vermillion Street.
42) Monitor and coordinate with roadway construction schedules to incorporate recommended im-
provements (lane striping, pedestrian refuges, high-visibility crosswalks, automated signals, etc.).
43) Design and use street-wide and district specific (Downtown, Midtown, Vermillion River, Southtown)
branding in the form of banners or medallions.
44) Develop a roundabout to replace the intersection of Vermillion Street and Red Wing Boulevard.
45) Develop a welcoming landmark and landscaping at the intersection of Vermillion Street and Red Wing Boulevard (in conjunction with the construction of a roundabout). This would be one of two
prominent landmarks along Vermillion Street welcoming people to the city.
46) Address the intersection of Cannon and Vermillion streets. Consider blocking access between the two, blocking access to the south leg of Cannon Street, or replacing the intersection with a rounda-
bout.
47) Consider signalization of the intersection at 17th or 18th Street.
Gateway and Wayfinding
48) Add consistent and attractive wayfinding signage, at scales and heights appropriate for motorists
and pedestrians, for Vermillion's primary sights, including the Hastings Civic Arena, Vermillion
Falls Park, LeDuc Historic Estate, Todd Field, and Downtown/the Mississippi River.
49) Develop signage and paving to connect Vermillion Street to Downtown, 2nd Street, and Levee Park and the Mississippi River.
50) Develop a gateway to the city and Downtown at 4th Street. This would be one of two prominent
landmarks along Vermillion Street welcoming people to the city.
51) Add a gateway to Midtown on Highway 55, oriented to travelers heading to towards Vermillion
Street. It should include direction to Downtown and to Vermillion Falls Park.
52) Add a gateway to the Vermillion River on County Road 47, oriented to travelers heading to towards Vermillion Street. It should include direction to Downtown and to Vermillion Falls Park.
53) Develop a welcoming landmark at the intersection of Vermillion Street and Red Wing Boulevard (in
conjunction with the construction of a roundabout). This would be one of two prominent landmarks along Vermillion Street welcoming people to the city.
Strategic Plan for Economic Development 2020 Update (Working Draft) Page 4
Business Year Local Type Location Business Year Local Type Location
Boarder Nutrition 2019 Downtown Hastings Star Gazette 2016 Downtown
Hastings Public House 2019 Downtown Highway 61 Tobacco 2016 Midtown
Hastings Social Tavern 2019 Downtown Hometown Ace Hardware 2016 Highway 55
Level Up Games 2019 Downtown KDWA 2016 Downtown
Lilly’s Day Spa 2019 Downtown Majeski Plumbing 2016 Business Park
Moon Tree Counseling 2019 Downtown Mattress Gallery 2016 Midtown
Prime Chiropractic 2019 Vermillion Medusa’s Hair Parlour 2016 Downtown
Social Hair Co.2019 Midtown Pure Salon 2016 Midtown
Starkson Family of Life Chapel 2019 Southtown Rother Machine 2016 Other
Vue 2019 Downtown Vista Rio Restaurant 2016 Downtown
Aspen Dental 2018 Highway 55 Wausau Homes 2016 Downtown
BeLoved Boutique 2018 Downtown Autozone 2015 Highway 55
Chandler Enterprises 2018 Other Cricket Wireless 2015 Midtown
CrossFit Hastings 2018 Business Park Eye Candy ReFind 2015 Downtown
Eye Candy ReFind 2018 Downtown Gifts Galore 2015 Downtown
Farmers Insurance 2018 Highway 55 Hastings Area Chamber 2015 Downtown
Lawrence Interiors 2018 Midtown Hastings Arts Center 2015 Downtown
Muse2320 Arts and Crafts 2018 Downtown Health Solutions Center 2015 Downtown
Next Event Rentals 2018 Vermillion Kranz Real Estate 2015 Downtown
Occasional Sales 2018 Downtown Kwik Trip 2015 Vermillion
Planet Beach 2018 Downtown MN Driver & Vehicle Svs 2015 Highway 55
Prescription Builders 2018 Southtown Oil Line Automotive 2015 Vermillion
Quaint and Quirky 2018 Downtown Simply Spa 2015 Highway 55
Riverwalk Arts 2018 Downtown Treasures 2015 Downtown
Schommer Insurance 2018 Southtown 1st National Bank 2014 Highway 55
Spiral Brewery 2018 Downtown Advanced Auto 2014 Vermillion
United Way 2018 Downtown Apple Dental 2014 Highway 55
Vintage Inspirations 2018 Downtown Asian Buffet 2014 Highway 55
Allina Clinic 2017 Highway 55 Asiana Buffet 2014 Midtown
Aveka Group 2017 Downtown Bella Vista Restaurant 2014 Highway 55
Country Nites Saloon 2017 Downtown Brandon Rowell Photography 2014 Highway 55
Denali Woodworks 2017 Highway 55 CVS Pharmacy 2014 Midtown
EDS Dental 2017 Downtown Davita Dialysis 2014 Highway 55
Evansen Art Studio 2017 Downtown E-Puffs 2014 Midtown
Fireside Social House 2017 Downtown Excel Financial 2014 Midtown
Locals Corner 2017 Downtown Eyenique Eyeware 2014 Highway 55
Olive Dog Grooming 2017 Highway 55 Fresenius Medical Care 2014 Highway 55
T-Mobile 2017 Midtown Great Clips 2014 Midtown
Breakaway Arts Café 2016 Downtown Historic Inn on Ramsey 2014 Downtown
Cranky Ape 2016 Business Park Mind and Body Connection 2014 Highway 55
Creative Hair\Sister Fab 2016 Downtown New Beginnings 2014 Highway 55
Cricket Wireless 2016 Midtown Nichols Inn 2014 Southtown
Dakota Pines Golf Club 2016 Other St Croix Collision 2014 Business Park
Downtown Girls\Uptown Boys 2016 Downtown Tech Center Repair 2014 Midtown
El Mexican Restaurant 2016 Downtown Vintage Inspirations 2014 Downtown
New Business 2014-2019