HomeMy WebLinkAboutI. Agenda Notes - 2022.08.11HASTINGS ECONOMIC DEVELOPMENT & REDEVELOPMENT
AUTHORITY
August 11, 2022 - 6:00 pm.
HASTINGS CITY COUNCIL CHAMBERS
I. Quorum
A. Oath of Office: HEDRA Commissioner Ben Anderson
II. Minutes
Please see the attached HEDRA Meeting minutes from the July 14, 2022 regular
meeting for your review and approval.
III. Bills
July Bills
Beth Warner $2,297.60 Façade Improvement Grant - 117 2nd St
Levander Gillen Miller $1,213.50 Legal - HEDRA Loans
Minnesota Pollution Control $75.00 The Confluence - Environmental
Centerpoint Energy $18.00 Block 28 - Heat - 412 Vermillion
Please see attached general ledger detail for further information.
IV. Business
A. Authorize One Month Extension for Façade Improvement Grant at 119 2nd Street E
and 2216 Vermillion Street.
Staff has been in contact with both of the grant recipients and work has moved forward
with both of the projects.
However, the project at 119 2nd Street had their window contractor experience a delay in
getting the large pieces of glass for the windows causing a delay in that portion of the
project. The window panes have now arrived and are scheduled for installation in mid-
august with finish painting and trim work to immediately following window install.
The project at 2216 Vermillion Street had a delay in preparing building plans and gaining
permit approval for the scope of the work. Plans are complete and permit was issued but
the grant recipient requires a few more weeks to complete the work.
The current grant term required paid invoices to be submitted by August 14th, 2022. The
proposed extension would provide the applicants/owner to submit paid invoices for the
work by September 14th, 2022.
Action: Motion to authorize one month extension for façade improvement grants at 119 2nd
Street E and 2216 Vermillion Street.
B. Authorize Two Month Extension for Façade Improvement Grant at 1800 Vermillion
Street (Clear Choice Pool & Spa)
The grant recipient has had some delays as a result of Staff turnover. They anticipate being
able to complete the work by mid October. The current grant term required paid invoices
to be submitted by August 14th, 2022. The proposed extension would provide the
applicants/owner to submit paid invoices for the work by October 14th, 2022.
Action: Motion to authorize two month extension for façade improvement grant at 1800
Vermillion Street.
C. Resolution #2022-29 Approving 1st Amendment to the Development Contract
between River City Investments, LLC and HEDRA.
The Developer has completed construction plans for the project and put them out to bid for
construction commencing fall 2022. Unfortunately, bids came back unfavorably and the
Developer intends to rebid the project late summer/early fall for construction to begin in
spring 2023. The current development contract required that the Developer close on the
property by August 1, 2022. It is not in the best interest of HEDRA to relinquish control
of the property until construction of the apartment project is imminent.
Staff is proposing a revised closing date of on or before August 1, 2023 as well as a
performance requirement that the home and garage on the adjacent property located at 315
3rd Street E are demolished prior to December 31, 2022. The Redevelopment Incentive
Grant (RIG) which was secured by the City through the Dakota County Community
Development Agency (CDA) in support of this project will expire on December 31, 2022
unless some of those funds have been used and a subsequent one year extension is
requested and approved.
The HEDRA owned parcel to be acquired by the Developer is not a viable redevelopment
site on its own and as such, Staff is not concerned with tying up the property for an
extended period of time while the Developer works to rebid the project in an effort to
reduce cost.
Action: Motion to adopt Resolution #2022-29 Approving 1st Amendment to the
Development Contract between River City Investments, LLC and HEDRA.
D. Approve Consent and Estoppel Certificate for Lake Isabelle Flats, LLC
Lake Isabelle Flats, LLC has closed on financing with Premier Bank for construction of its
89 unit apartment building to be constructed at 412 3rd Street E. This project includes a
Tax Increment Financing (TIF) Note from HEDRA in favor of Lake Isabelle Flats, LLC.
The ability for the Developer’s collateral assignment was authorized by HEDRA in the
Contract for Private Development (TIF Contract), the form of the Consent was not
provided as an exhibit. As a result, HEDRA is now being provided that document for
review and approval. HEDRA’s TIF Attorney, Andrea McDowell Poehler has reviewed
the Consent and Estoppel Certificate and is comfortable with the document as currently
presented.
Action: Motion to approve signature of consent and estoppel certificate for Lake Isabelle
Flats, LLC.
E. Discussion of “Land For A Dollar” Land Credit Incentive Program
In 1997, HEDRA adopted a land credit incentive program whereby public subsidies were
provided to private businesses in the form of the cost to acquire industrial land being
reduced from market value to $1.00 per acre with the remaining value being placed as a
deferred assessment and typically forgiven based on performance for creation of new tax
base and jobs.
The program has been utilized for 22 projects since 1997, but only 5 of those occurred in
the last decade. Based on shifts in the industrial marketplace Staff does not believe that
marketing a public subsidy is the best way for the City to attract light industrial or
manufacturing businesses to Hastings. Additionally, it is unclear how many of those
projects would or would not have been constructed in Hastings if not for the public
subsidy as the subsidy is offered immediately and not based on proven financial need or
outside competition.
If the program were rescinded it would not take away HEDRA’s ability to negotiate future
land sales at discounted rates based upon gaps in financing or the presence of another
community competing for the business. This is similar to the way in which HEDRA/City
of Hastings approaches other public subsidy programs that support private development.
Additionally, Staff could have the property appraised when a prospective sale is in place to
ensure HEDRA is receiving proper compensation.
HEDRA has many initiatives requiring financial resources. A large asset that HEDRA has
to help finance those initiatives is its industrial land holdings. Ensuring that HEDRA
extracts as much financial benefit from those assets will help achieve other initiatives.
Provided below is a comprehensive list of projects which have utilized the Land For A
Dollar incentive program since its inception.
Hastings Industrial Park - Land for a Dollar
Year Recipient Address Land Subsidy Value Jobs Improvement Value
1997 Twin City Container 990 Spiral Blvd $103,000.00 12 $955,500.00
1997 Quality One Woodwork 3005 Millard Ave $73,500.00 11 $673,700.00
1998 Eischen Cabinet Co. 525 Commerce Dr $36,150.00 14 $310,000.00
2000 Greenlawn Sprinklers 2550 Millard Ave $52,000.00 5 $483,000.00
2000 Miller Electric 2620 Industrial Ct $29,900.00 2 $275,000.00
2001 Hastings Gymnastics 2628 Millard Ave $52,700.00 2 $495,700.00
2001 Forpak, Inc. 682 Commerce Dr $43,560.00 3 $353,600.00
2002 APL Properties 654 Commerce Dr $58,800.00 3 $431,400.00
2002 Millard Ave Inc. 3005 Millard Ave $315,440.00 25 $1,295,800.00
2002 C & A Properties 671-703 E 31st St $43,560.00 3 $319,200.00
2002 Lawrence Interiors 624 Spiral Blvd $95,830.00 5 $533,200.00
2005 Westview Properties 1100 Spiral Blvd $326,695.00 11 $2,060,500.00
2005 Jakata Properties 625 Commerce Dr $49,984.00 4 $365,000.00
2005 Lanoga Corp. 1101 Spiral Blvd $396,623.00 11 $1,240,000.00
2006 Miller Electric 2911 Enterprise Ave $141,792.00 5 $590,900.00
2007 RoMar Enterprises 2939 Enterprise Ave $140,405.00 5 $706,000.00
2009 Red Wing Dental 1945 E 31st St $295,833.00 14 $425,000.00
2017 Crossfit 2950 Lightbourn Ct $91,232.00 4 $513,500.00
2019 Creek Mini Storage 3051 Lightbourn Ct $164,351.00 0 $775,400.00
2020 Simply Secure Storage 2030 Spiral Blvd $173,072.00 0 $168,800.00
2020 Custom Sawdust 525 East 31st St $89,219.00 3 $104,500.00
2021 Quality One Woodwork 3005 Millard Ave $120,748.00 30 $1,901,000.00
Totals: $2,894,394.00 172 $14,976,700.00
In place of the “Land For A Dollar” marketing promotion, Staff would propose
replacement signage for available development sites simply outlining contact information
for interested parties. Additionally, or alternatively, HEDRA could consider partnering
with a brokerage company for promotion of various sites. Based on the current valuation
of $1.54 per square foot, each acre would be valued at $67,082.40. A 3% commission on
a 1.0 acre sale would amount to $2,012.74. That commission could be made the
responsibility of the buyer of the property. Staff is also considering what developer/real
estate events could be attended by Staff to further promote development opportunities in
Hastings.
Action: Motion to rescind “Land For A Dollar” business park incentive program.
V. Reports and Information
A. Update on Intek Plastics Inc. Expansion
The State of Minnesota Department of Employment and Economic Development (DEED)
has approved the City of Hastings and Intek Plastic’s joint application to the State’s Job
Creation Fund (JCF) economic development program. DEED will provide up to $450,000
in job creation award and $275,000 in capital investment rebate. This business subsidy is
in support of a proposed 60,000 square foot expansion that will include more than
$8,000,000 in private investment and create 46 new jobs over the next 3 years with an
average hourly wage of $32.54 plus benefits.
The State of Minnesota DEED has also approved the City of Hastings and Intek Plastic’s
joint application to the States Minnesota Investment Fund (MIF) economic development
program. DEED will provide loan funding to the City in the amount of $975,000 which
will be provided to Intek Plastics. Intek Plastics will then repay that loan amount back to
the City and subsequently the State of Minnesota at a 1% interest rate over a period of
seven years.
The City is proud to partner with this majority woman owned manufacturing company and
secure its future in the City of Hastings and the City is appreciative of the State’s financial
assistance in securing this business expansion in the City of Hastings and State of
Minnesota.
B. Open To Business Update
Metropolitan Consortium of Community Developers (MCCD) has published its Q2 Open
To Business (OTB) reports. In total, OTB received inquires from 9 Hastings businesses
and 6 residents and provided financing to Spiral Foods Co-Op in their recent move and
expansion. OTB continues to be an important tool for Hastings business to utilize in
support of establishing and growing their business.
C. Development Update
New Information
Hastings Business Incubator – Staff continues to work on program guidelines as well as
partnerships and expects a more robust update at the September HEDRA meeting.
KFC - City Council has approved the Site Plan for construction of a new KFC Restaurant
to be located on the northwest corner of 18th and Vermillion (former Erickson Freedom Gas
Site).
Fleet Farm – Construction is almost complete and opening day is scheduled for September
9th at the former Target location at 875 General Sieben Drive.
Makers Alleyway Market – Staff has received applications from 29 unique vendors.
Updated registrations by market date are as follows with a large increase in the number of
vendors registered for August markets. Each market has the capacity for approximately 40
vendors and Staff will continue to solicit for vendors.
August 11th - 17 vendors
August 18th - 15 vendors
August 25th - 20 vendors
Fleet Farm – Construction is almost complete and opening day is scheduled for September
9th at the former Target location at 875 General Sieben Drive.
United Heroes League - Outdoor Refrigerated Rink – UHL has submitted an Interim
Use Permit Application to construct an outdoor refrigerated rink along with temporary
parking at their 15211 Ravenna Trail campus. The Planning Commission will review on
August 8th. Upon action by the Commission, the City Council would review on August
15th.
Heritage Ridge – The 4th and final addition of Heritage Ridge containing 36 lots is
scheduled for City Council approval on August 15th.
Enclave Apartments – Building plans have been submitted for construction of two
apartment buildings containing a total of 211 market rate apartment units. The City
Council will review a vacation of easement request to accommodate relocated utilities and
drainage on August 15th.
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.
PREVIOUS INFORMATION:
Vermillion Acres – Demolition of the existing home and grading is set to commence any
day for construction of the 75 unit senior housing facility near County Rd 47 and
Riverwood Drive.
Jersey Mikes – The Jersey Mikes building is nearing substantial completion with the focus
now on exterior site improvements including landscaping and parking lot improvements.
The Jersey Mikes Subs is anticipated to open in the first week of September.
Lake Isabelle Flats (NJS Stencil Apartment) – The Developer has officially closed on
the HEDRA owned property as well as construction financing. Preparations for demolition
of the site have begun. Construction of the 89 unit building is estimated to be completed by
late summer/early fall 2023.
Caribou Coffee - Coborns - Plans have been approved for the addition of a drive-thru
window for Caribou Coffee at Coborns Grocery located at Redwing Blvd and 33rd Street.
Villas at Pleasant – More permits have been submitted for construction and work
continues on the first model home at the 32 unit subdivision near Northridge and Pleasant.
Pre-sales continue to be strong.
Tyler Street Landing Apartments (Luke Siewert) – Staff continues to work with Mr.
Siewert with regards to utility relocations related to Xcel Energy. The Dakota County
CDA has approved a $250,000 Redevelopment Incentive Grant (RIG) to assist in part with
relocation of utilities.
Quality One Woodworking – Quality One has completed their 52,000 square foot
expansion has been completed and the business has received its certificate of occupancy.
The Confluence – Progress continues with interior activities including interior framing,
replacement of fire suppression system, and replacement of windows.
The Quill - Schoolhouse Square Senior Housing – Framing is complete and exterior
brick work and interior work has begun. Project is on track for fall 2022 opening.
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.
ATTACHMENTS
• Minutes – July 14, 2022 - Regular Meeting
• Bills - July, 2022
• Resolution #2022-29 Approving 1st Amendment to the Development Contract between River City
Investments, LLC and HEDRA.
• Consent and Estoppel Certificate for Lake Isabelle Flats, LLC
Next Meeting: Thursday, September 8, 2022