HomeMy WebLinkAboutIV. Agenda Notes - 2022.03.10HASTINGS ECONOMIC DEVELOPMENT & REDEVELOPMENT
AUTHORITY
March 10, 2022 - 6:00 pm.
HASTINGS CITY COUNCIL CHAMBERS
I. Quorum
II. Minutes
Please see the attached HEDRA Meeting minutes from the February 10, 2022
regular meeting for your review and approval.
III. Bills
February Bills
Levander Gillen Miller PA $1,309.00 Legal - General
First American Title Insurance $750.00 Riverfront Addition - Title Commit
Centerpoint Energy $730.44 Block 28 - 410-412 Vermillion
Please see attached general ledger detail from the month of February for further
information.
IV. Business
A. Resolution #2022-12: Approving Contract for Private Development,
and Providing the Form, Terms, Covenants and Directions for the
Issuance of a Tax Increment Revenue Note to NJS Development,
LLC
Staff, Northland Securities, and NJS Development LLC have been
negotiating on the requested TIF Financing such that the financial gap of
the proposed development project can be filled, but without unduly
enrichment of the developer. The TIF note is proposed to be issued in the
maximum aggregate principal amount of $1,913,693.00 to NJS
Development, LLC in consideration of certain eligible costs incurred by
NJS under the Development Agreement.
The TIF Financing is structured as pay-go TIF such that future taxes paid
by NJS Development LLC will be rebated back to NJS Development,
LLC until the TIF note has been repaid including 5% interest.
As part of the TIF Agreement, a minimum assessment agreement is also
proposed with a minimum market value following construction of
$17,800,000.00 on January 2, 2024 and each year thereafter until
termination of the TIF agreement.
Please see the attached contract for private development and issuance of
Tax Increment Revenue Note to NJS Development, LLC.
Action: Motion to approve Resolution #2022-12 Approving Contract for Private
Development and Providing the Form, Terms, Covenants and Directions for the
Issuance of a Tax Increment Revenue Note to NJS Development, LLC.
B. Resolution #2022-09: Approve Façade Improvement Program (FIP)
Grant for Improvements at 311 2nd Street E.
HEDRA has received an application from Hastings Family Service which owns
the property at 311 2nd Street E.
Hastings Family Service has proposed a façade project that would include the
replacement of existing windows on the 1st floor of the building.
The full scope includes the following:
- Removal of existing single pane front windows as well as the commercial
glass door. Two of the existing windows are cracked.
- Instillation of new storefront glass and glazing. New windows to match
the windows that are currently seen on the primary Hastings Family
Service building.
The scope of services is proposed to be completed by Stotko Speedling.
The project has eligible costs totaling $19,174.39. As such the maximum grant
award based on current matching funds is $5,000.00 which is the maximum
allowed under the current program guidelines.
Action: Motion to approve Resolution #2022-09 approving façade improvement
program grant award to Hastings Family Service for replacement of windows at
311 2nd Street E in the amount of $5,000.00.
C. Resolution #2022-11 Approving Exclusive Sales Negotiations of PID
19-63950-00-010 and PID 19-63950-00-021 with Mint Development,
LLC until September 10, 2022.
HEDRA has discussed future development of Block 1 (PID 19-63950-00-010
and PID 19-63950-00-021) and directed Staff to continue to vet the
development opportunity presented to HEDRA by Mint Development, LLC.
Staff has prepared Resolution 2022-12 which if approved by HEDRA would
provide Mint Development, LLC with exclusive negotiation rights with HEDRA
for the Block 1 properties for a period of 6 months. During the 6 months Staff
would work with Mint Development, LLC on the following
• Updated site plan per ALTA findings.
• Leasable commercial space on first floor of multifamily building
(excluding live/work studios).
• Commercial partnerships, such as a hospitality company for a restaurant.
• Creation of permanent activated commercial space along the river open to
the public (possible roof top restaurant\patio).
Action: Motion to approve Resolution #2022-11 approving exclusive
negotiations of PID 19-63950-00-010 and PID 19-63950-00-021 with Mint
Development, LLC until September 10, 2022.
D. Hastings Business Park Discussion
The City of Hastings Business Park consists of approximately 67 parcels
excluding the parcels that create the 55 acre shovel ready development site.
HEDRA has played an integral role in the development of the business park to
date. Provided below is a summary of the land sales that HEDRA has been
party to and the projects that have taken place dating back to 2002.
HEDRA has utilized a business subsidy program “Land For A Dollar” as a
means to attract development. The program allows for a business to close on
HEDRA property for $1.00 per acre with the remaining established value
($1.54/sf) being placed as a deferred assessment on the property. The deferred
assessment is then reduced based on a construction credit (10% of building
valuation) and jobs credit ($4,500 per job equivalent). For most projects the
construction credit and jobs credit have resulted in the deferred assessment
being eliminated entirely.
The building sites currently under HEDRA control are reducing in both quantity
and variety. Other than the large 55 acre shovel ready development site,
HEDRA controls eight industrial properties ranging in size from 1.0 acres to 3.1
acres. The City will need to identify a location to expand the existing business
park, or the location of a new business park. Either scenario could, and would
likely require a substantial investment by the City in both initial acquisition as
well as the extension of utilities and roads to service the park.
City Code allows for the following uses within the Industrial Park:
• Permitted Uses
o Fabrication
o Manufacturing
o Wholesaling all commodities except live animals
o Building material sales and storage
o Retail and service uses incidental to primary use of a building
o Brewery Taproom / Microdistillery
• Uses by Special Permit
o Retail and service establishments as primary uses of a building or
property.
o Religious institutions
o Towers as regulated by section 155.07
City Code requires the following architectural requirements for industrial
projects:
• Front facades must be composed of at least 75% of Class 1 or 2
materials, with Class 1 materials comprising at least 25% of the total
façade.
• Side and rear facades visible from public right(s)-of-way, parks, public
view from adjacent properties, or residential uses or districts must be
composed of at least 25% of Class 1 or 2 materials.
• Side and rear facades not visible from public right(s)-of-way, parks,
public view from adjacent properties or residential uses or districts may
use any combination of Class 1, 2, or 3 materials.
Class 1 Class 2 Class 3
Brick EIFS or Drivit Industrial grade concrete
precast panels
Natural Stone Masonry Stucco Smooth concrete
Glass (including block,
windows, or opaque mirrored
panels)
Specialty Integral Colored
Concrete Block (including
textured, burnished block,
rock face block)
Ceramic
Seamless metal panels
(including copper)
Architecturally textured
concrete precast panels
Wood
Other materials not listed
elsewhere as approved by the
Administrative Official
Tile (masonry, stone, or clay) Aluminum or vinyl siding
Other materials not listed
elsewhere as approved by the
Administrative Official
Other materials not listed
elsewhere as approved by
the Administrative Official
HEDRA has placed a value of $1.54 per square foot as market value of vacant
industrial land in the business park. On average and over the entire life of the
Hastings Business Park, HEDRA has achieved a post development average
valuation of $10.52 per square foot of taxable market value. That average is
anticipated to drop as some smaller projects have come to fruition in recent
years. These data points are shown in a table on the next page.
Entity Address Sale Type Acres
Sold
Raw Land
Valuation
($1.54/sq ft
Building
Size – SF
Tax
Valuation
(2022)
Tax Val
Per SF of
Building
(2022)
Tax Val
Per SF of
Land
(2022)
Jobs Est. Taxes
to be Paid
to City
(2022)
DSM
Excavating
2916
Enterprise
Ave
Cash 2.00 $134,164.80 12,175 $700,400 $57.53 $8.04 $4,741.48
APL
Fabricators
654
Commerce
Dr
Subsidy 1.00 $67,082.40 11,512 $646,700 $56.18 $14.85 2 $4,357.40
Quality One
Woodwork
3005 Millard
Ave
Subsidy 10.28 $689,607.07 105,000 $3,732,200 $35.54 $8.33 20 $26,429.34
C&A
Properties
671-703 East
31st Street
Subsidy 2.00 $134,164.80 10,366 $800,000 $77.18 $9.18 $5,454.52
Lawrence
Interiors
624 Spiral
Blvd
Subsidy 1.34 $89,890.42 22,500 $1,236,900 $54.97 $21.19 3 $8,579.92
Birchen
Enterprises
2654 Millard
Avenue
Subsidy 1.41 $94,586.18 6,200 $421,800 $68.03 $6.87 $2,748.96
Westview
Packaging
1100 Spiral
Blvd
Subsidy 5.56 $372,978.14 68,024 $2,829,800 $41.60 $11.68 11 $19,974.46
Midwest
Products
2939
Enterprise
Avenue
Subsidy 2.39 $160,326.94 22,000 $1,096,800 $49.85 $10.54 $7,577.20
Eischen
Cabinets
625
Commerce
Drive
Subsidy 0.85 $57,020.04 11,340 $532,700 $46.98 $14.39 18 $3,810.90
UBC/Cranky
Ape
1101 Spiral
Blvd
Subsidy 6.75 $452,806.20 35,000 $1,195,700 $34.16 $4.07 4 $8,284.96
Miller Electric 2911
Enterprise
Avenue
Subsidy 2.41 $161,668.58 20,328 $1,029,800 $50.66 $9.81 3 $7,098.14
Midwest
Dental
1945 East
31st Street
Subsidy 1.00 $67,082.40 5,100 $525,400 $103.02 $12.06 14 $3,490.14
Crossfit 2950
Lightbourn
Court
Subsidy 1.36 $91,232.06 10,508 $533,600 $50.78 $9.01 4 $3,548.78
Creek Mini
Storage
3051
Lightbourn
Court
Partial 2.45 $164,351.88 48,000 $775,400 $16.15 $7.27 0 $5,278.02
40.80 $2,736,961.92 388,053 $16,057,200 $53.05 $10.52 79 $111,374.22
(total) (total) (total) (total) (avg) (avg) (total) (total)
Projects Under Construction/ Recently Completed and without updated Building Valuation
Simply
Secure
Storage
2030
Spiral
Blvd
Partial 2.58 $173,072.59 41,000 $168,800 $4.12 $1.50 0 $1,207.36
Custom
Sawdust
525 East
31st Street
Partial 1.33 $89,219.59 4,900 $104,500 $21.33 $1.80 0 $560.58
Quality One
Woodwork
3005
Millard
Avenue
Subsidy 1.80 $120,748.32 52,000
WSI
Sportswear
(pending)
Subsidy 2.00 $134,164.80 20,000
In order to maintain a post development per square foot valuation average of
approximately $10.00 per square foot of taxable market value per square foot of
developed land, every new project would need a valuation of at least
$435,600.00 per acre that was developed.
Staff is seeking feedback from HEDRA as to the approach of subsidizing land
sale, size, and valuation of a project it should be seeking to fill the remaining
parcels. Staff would ask the following questions of HEDRA:
1. For HEDRA to approve a land sale, are there specific uses the project
would have to include (i.e. manufacturing)?
2. For HEDRA to approve a land sale, are there certain architectural
expectations for building appearance? Is there a desire for less
primarily metal buildings?
3. Is “Land For A Dollar” an approach that HEDRA should continue to
utilize as a means for attracting industrial projects? Which projects
does a reduced land cost most assist/help?
4. For HEDRA to approve a land sale, is there a minimum valuation per
square foot that should be achieved post development?
5. For HEDRA to approve a land sale, are there a minimum number of
jobs created per square foot of land / or building post development?
6. For HEDRA to approve a land sale, is there a minimum amount of
square feet of building that should be constructed as a ratio to the
amount of land being sold?
a. Note: Currently HEDRA requires that at least 20% of the
property be covered by a building in order to be eligible for a
business subsidy in the form of land for $1.00 per acre.
Action: Staff is seeking general feedback on the above items. If HEDRA wishes,
it could make a formal motion regarding updated policy.
V. Reports and Information
A. Westview Mall Visit Summary
Staff met with the owners of Westview Mall on February 16th to get an update
on the shopping center. Ownership still has plans for opening two new
restaurants, Roosters, a chicken restaurant, and Caprese, a pizza restaurant. The
owners recently renewed their building permit for Roosters and hope to have the
restaurant open in June now that they were able to get delivery of kitchen
equipment. They hope to open Caprese by the end of 2022.
The owners expressed interest in having Aldi lease the space formerly occupied
by Sterling Drug. Staff reached out to Aldi’s real estate team and after a few
discussions, Aldi indicated they weren’t interested in the space at this time. The
owners still hope to attract a national retailer into that space.
The owners would like to develop the outlot in the future for additional
commercial space but first look to reduce the vacancy in the existing center.
B. Business Retention & Expansion Visit – Hastings Arts Center
Staff as well as Mayor Mary Fasbender and Council Member Jen Fox visited
Hastings Arts Center on February 28th to learn more about the center and its
offerings to the Hastings Community. In addition to music lessons the facility
also has an indoor art gallery with works of art available for purchase and puts
together various concerts open to the community with hopes to expand their
future event offerings.
Hastings Arts Center has received two revolving loans from HEDRA in the past
for repair and remodeling work on their building. The building is in great
condition as a result of their investment.
The BR&E survey report is included as an attachment to the packet.
C. Development Update
New Information
Jersey Mikes – The former Enterprise Car Rental Facility at 1217 Vermillion
Street was demolished in mid-February. Construction of the new Jersey Mikes
building will begin once the site has been cleared.
Crossroads Site Development – Two apartment buildings containing a total of
211 market rate apartment units by Enclave Development south of 33rd Street
between Terry’s Hardware and a strip mall. Planning Commission recommended
approval on February 14th. City Council will review on March 7th. The project
has proposed to begin construction in early summer 2022.
Lofts On Third (NJS Stencil Apartment) – 89 unit market rate apartment
building located on the former UBC site (between 3rd and 4th Streets, west of
Bailey Street). Planning Commission recommended approval on February 14th.
City Council will review on March 7th. Construction anticipated to begin in
early summer 2022 with completion by summer 2023.
The Confluence – Progress continues with interior activities including painting
of the 2nd floor, structural beam and floor replacement, replacement of fire
suppression system, replacement of windows.
Autobody Shop - 2550 Millard Avenue – On February 22nd , the City Council
approved a permit for Matthew Goebel to operate an auto body shop out of 2550
Millard Avenue (Green Lawn Sprinkler).
Rise Up Recovery - 303 5th Street E - Rise Up Recovery has submitted a
Special Use Permit to operate a board and lodging facility with special services
for substance use disorder recovery. The Planning Commission recommended
approval of the application on February 28th. The City Council will review on
March 7th.
BIRD Scooters - On February 22nd, the City Council approved a one year license
to allow BIRD rides to operate an electric scooter rental service. Bird will deploy
50 scooters initially throughout the City. Riders can locate and rent scooters
through an app on their smartphones. Scooters may be available in April. The
Pioneer Press and Star Tribune have written stories on BIRD’s coming operations
in Hastings.
UBC North Building Sale & Removal – The 10,000 s.f. building has been
removed from 415 4th Street E. Building was sold for $45,500. Site is part of the
future Lofts on 3rd Apartment project.
PREVIOUS INFORMATION:
The Quill - Schoolhouse Square Senior Housing – Framing work is
progressing and the building is taking shape. Project is on track for fall 2022
opening.
Tyler Street Landing Apartments (Luke Siewert) – The Dakota County CDA
has approved a $250,000 Redevelopment Incentive Grant (RIG) for this project
on November 16th. On October 4th the City Council approved land use actions to
allow construction of the 32 unit apartment building at 3rd and Tyler.
Best Property Annexation - Redwing Blvd - Summergate Development has
terminated its development agreement for purchase and development of the
property. Best Property still seeking a purchaser and developer. Action on the
application tabled at City Council pending identification of a new developer and
concept plan.
Fleet Farm – City has issued permit for interior renovation and is awaiting plans
for the exterior building supply yard.
Villas at Pleasant – Construction of the first model home has commenced on the
32 unit subdivision near Northridge and Pleasant
Quality One Woodwork – Construction continues the 52,000 sf building
expansion. Staff conducted a ground breaking ceremony alongside the Hastings
Chamber of Commerce.
Heritage Ridge – Building permits for over 20 of the lots have been submitted to
the City for review and approval. They will likely seek approval of the 4th and
final phase of the 116 lot development before spring of 2022.
Vermillion Acres – City Council approved the Development Agreement for the
75 unit senior housing facility on September 7th. The Building Department has
concluded review of the plans, which will include modular construction of some
components offsite and moved onto the site for final construction.
315 Pine Street - Former Thorwood Inn - Cleanup work continues on the fire
damaged former building. Partial demolition and renovation plans were
approved by the Heritage Preservation Commission on July 27th.
WSI Sportswear – Staff is working with WSI regarding agreements related to
the HEDRA land sale. WSI has also continued work with a general contractor
regarding future construction of their facility.
ATTACHMENTS
• Minutes – February 10, 2022 - Regular Meeting
• Bills - February, 2022
• Resolution #2022-09 Approving Façade Improvement Grant for 311 2nd
Street E
• Grant Application for 311 2nd Street E from Hastings Family Service, LLC
• Resolution #2022-11 Approving Exclusive Sales negotiations of PID 19-
63950-00-010 and PID 19-63950-00-021 with Mint Development, LLC
until September 10th, 2022.
• Resolution #2022-12 Approving Contract for Private Development and
Providing the Form, Terms, Covenants and Directions for the Issuance of a
Tax Increment Revenue Note to NJS Development, LLC.
• Business Retention & Expansion Survey – Hastings Arts Center
Next Meeting: Thursday, April 14, 2022