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HomeMy WebLinkAbout2009 [08] Aug 26CITY OF ST. JOSEPH ECONOMIC DEVELOPMENT AURTHORITY Meeting Minutes — Wednesday, August 26, 2009 Present: EDA Board Members Carolyn Yaggie- Heinen, Ken Jacobson, Al Rassier, Tom Skahen, and Dale Wick. Absent: None. Also present: Derek Villnow, co -owner Russell Eyecare, Dr. Mary Edwards, St. Cloud State University, SCSU Graduate Student Yotiaud Vivien Apoutou, College of St. Benedict Vice President of Finance and Administration Susan Palmer, Sister Thomasette Scheeler, St. Joseph Resident Cory Ehlert, and Dave DeMars, St. Joseph Newsleader. Chairperson Wick called the August 26, 2009 regular meeting of the St. Joseph EDA to order at 3:00 p.m. Agenda. Chairperson Wick introduced the agenda. Wick requested the addition of item 4c. relating to a TIF disbursement to Millstream Shops /Lofts and item 59. relating to the 2010 EDA capital improvement program. Moved by Skahen and seconded by Jacobson to approve the agenda with the addition of items 4c. and 5g. Motion carried 5-0. Approval of Minutes. Chairperson Wick introduced the minutes from the July 22 "d, 2009 regular EDA meeting. Motion by Rassier, second by Heinen to approve the minutes from the July 22nd regular meeting. Motion carried 5-0. EDA Accounts Payable. Wick introduced the topic. Wick noted accounts payable for the month which totaled $2,714.25. Motion by Jacobson, second by Heinen to approve the EDA accounts payable for the month of August 2009 in the amount of $2,714.25. Motion carried 5-0. Financial Report. Wick introduced the agenda item. Strack noted the July 2009 year to date Treasurer's Report illustrates expenses of $29,445.70 as of the close of July, with year to date revenue of $29,161.28. Motion Skahen with a second by Rassier to approve the financial reports as presented. Motion carried 5-0. TIF Disbursement Request. Chairperson Wick introduced the agenda item. Strack noted that Jerry Roerhing from the Stearns County Auditor's Office had performed additional research into the availability of increment payable this year for TIF 2 -1 (Millstream). His research concluded an error with property identification numbers inadvertently resulted in an oversight by his office. To those ends, Mr. Roerhing has conceded the property owners are entitled to a partial TIF payment this year. An increment in the amount of $3,200 is available to the project. Of that 10% is retained for administration purposes with the remaining $2,880 to be paid to the property owner. Therefore, the EDA is kindly asked to consider approval of a disbursement for TIF 2 -1 (Millstream) in the amount of $2,880. Motion Heinen with a second by Rassier to approve the disbursement request as presented. Motion carried 5-0. BFA Request - Russell Eyecare, LLC EDA Chairperson Wick introduced the agenda item. Strack stated the EDA received an application for the Business Fagade Architectural (BFA) Grant Program from Christie Russell Villnow, Owner of Russell Eyecare & Associates, LLC. The application illustrates a total of $15,000 in visible improvements will be added to the Millstream Shops structure; of the total $3,000 is for installation of signage and the remaining $12,000 in improvements will occur indoors but be visible from the large street -level windows. The 2008 pilot program was capitalized so as to fund up to five projects totaling $1,000 each. The matching grant is for architectural services relating to fagade redevelopment or landscape visible from public rights of way. The EDA has previously committed to five projects, one of which have not requested reimbursement at this time. The outstanding approved project did not materialize and, therefore, the application is void. As a result the EDA should have the ability to consider one additional BFA grant application. Strack distributed a copy of an email from St. Joseph resident Michael McDonald who opposed the use of grant funds for the project. Derek Villnow, co -owner of Russell Eyecare spoke on behalf of the project and updated EDA Members as to what work had been started and what work was left to accomplish. Motion Skahen, second Heinen to approve the BFA grant application for Russell Eyecare, LLC. Motion passed 5-0. BFA Disbursement Request - Scenic Specialties EDA Chairperson Wick introduced the topic. Strack stated that at the October 22, 2008 regular meeting the EDA approved a Business Facade Architectural Grant Program application submitted by Randy Schmitz from Scenic Specialties. The BFA grant request included design and construction work relating to the rehabilitation of two existing historic accessory structures and landscaping upgrades. Strack noted Mr. Schmitz has completed the project and submitted a request for payment which includes documentation of design and construction fees related to the rehabilitation of two existing historic accessory structures and landscaping upgrades. Motion Rassier, second Jacobson to approve the BFA grant disbursement in the amount of $1,000 for Scenic Specialties. Motion passed 5 -0. Termination of City Maintenance Facility Lease Agreement Chairperson Wick introduced the agenda item. Strack reminded the EDA of public project revenue bonds issued in 2003 for the construction of the City maintenance facility in the Buettner Business Park. The City's Financial Advisor is now recommending bond refinancing which would save the City $20,000 in the future. The refinancing requires termination of the 2003 lease agreement between the EDA/City for the maintenance facility. Motion Skahen, second Jacobson to approve a Resolution Authorizing Termination of Lease, Execution of a Quit Claim Deed, and Callings Prior Bonds. Motion carried 5-0. EDA Minutes - August 26, 2009 2 St. Cloud State University Economic Impact Study Chairperson Wick introduced the agenda item. Strack stated that Dr. Mary Edwards, Director of the St. Cloud State Economic Development Center had updated the SCSU study regarding the economic impact of the College of St. Benedict and St. John's University. Strack introduced Dr. Edwards. Dr. Edwards stated that the major changes in the study were found on pages 13 and 14. Edwards stated that the impact of CSB /SJU adding a total of 208 beds will result in a $3.5 million dollar decrease in local economic activity, mostly centered on owners of student rental units. Edwards also noted that the projected decrease in enrollment at CSB /SJU would result in a $10 million drop in college - related business. Edwards stated that the study assumes students living abroad are out for the entire year. She also stated that the potential impact of all students living on campus would result in a $30.5 million dollar drop in college - related business. Edwards noted she had contacted residential life offices at SCSU, the St. Cloud Technical College, and Rasmussen Business College regarding the number of students with contact addresses within the two zip codes studied. Edwards estimated 40% of students renting units in St. Joseph were attending SCSU, St. Cloud Technical College, or Rasmussen Business College. Rassier stated the study results were still unclear. He noted the impact should be based on a simple calculation of what off - campus students spend, minus what on- campus students spend times the number of rental units. Wick asked Dr. Edwards to clarify the study concludes the result of decreases in CSB /SJU projected enrollment of $10 million over the next five years would have a much greater impact on economic activity than the impact of 208 students moving to campus which was estimated at $3.5 million. Edwards concurred. Sue Palmer, College of St. Benedict Vice President of Finance and Administration, stated there is an economic impact for both reduction in forecast enrollment and creation of 208 beds for students. Palmer stated the current projected enrollment estimate was lower than those currently enrolled, however, official numbers would not be determined until the tenth day of school. St. Joseph resident Cory Ehlert opined that a constant assumption as to the number of students impacted by a change in residency policy was needed as that assumption carried throughout the study. Palmer stated the study was to answer two questions. First, what is the impact of the college /university in the community and, second, how a certain number of students moving back to campus would economically impact St. Joseph and Collegeville Township. Palmer stated she had provided the most accurate numbers possible and felt like the accuracy of the data was be questioned. Rassier stated the number of students used was important. If the number is 208 and the City agrees with that assumption, then the 208 figure is used. But, on the other hand if the number is based on the known quantity of rental units in the City, 780, then that number should be carried through the study. Palmer questioned why Rassier would use the number 780, she stated that number was known to be inaccurate since Dr. Edwards had identified 334 students in St. Joseph who attended SCSU, St. Cloud Technical College, and /or Rasmussen College. Wick opined 208 was a good number. EDA Minutes — August 26, 2009 3 Rassier stated a constant number was needed. He questioned what would happen in the 208 new beds number changed with plans at CSB /SJU or if the institutions engineered to accommodate more students instead of building new beds. Palmer stated she felt the 208 number was being questioned. She stated that number was based on good information. She stated that neither CSB or SJU would build enough new housing units to accommodate projected enrollment. Palmer stated there will always be students living off campus, and to assume otherwise is totally misleading. Wick noted the study is a snapshot in time and at this time 208 new beds are planned. Skahen asked Palmer whether or not CBS or SJU had a definite cap on enrollment. Palmer noted the institutions have no intention of getting larger. Ehlert asked Palmer where SJU stood on the issue, how many new beds were being added. Palmer stated that number was 58. Ehlert asked Palmer whether she had been told by SJU that the institution would not build more beds in the future. Palmer indicated that SJU had told her they would not build more beds in the future, but added that she should not be held to that statement. Ehlert stated that student rental property owners had reservations which stemmed from misleading information that they were given while at a meeting on- campus a few years ago. Ehlert stated that while attending a downtown revitalization event hosted by CSB he inquired as to whether or not plans for requiring students to live on- campus for all four years were 'in the works'. Ehlert stated that he was lead to believe that discussions were not occurring regarding a change in residency policy. At the same time he was aware that parents had received a mailing indicating a change in residency was imminent. Palmer and Sister Thomasette Scheeler asked when the meeting occurred and who made a statement on behalf of CSB. Ehlert stated the meeting was hosted by the downtown organizational committee. Ehlert opined the 40% figure, 334 students in rental housing in St. Joseph were from SCSU, St. Cloud Tech or Rasmussen was very, very, very high. He stated he owned rental units in St. Cloud and the decreased in rent yield in proportion to distance from SCSU, the further away from campus, the lower rent yield potential. Given that experience Ehlert stated that it will be extremely challenging to attract SCSU, St. Cloud Tech, and Rasmussen students to St. Joseph. Ehlert stated that a decrease in rental demand resulting from a change in residency requirements will result in an over - supply of rental units which in turn will lead to reductions in rent payments. Ehlert opined that when this happens, rental property values will drop and property taxes paid by rental property owners will decrease. Ehlert asked if Edwards had accounted for a shift in supply - demand in economic modeling. Edwards stated that there is not an economic model like IMPLAN that separates the value of certain property that may be changing greatly. Edwards opined the economic impact study may be more optimistic than it should be with regard to property value and tax revenue post- residency change. Ehlert asked Palmer how many beds were currently located on campus. Palmer stated the number was approximately 1,500. Ehlert opined that if the enrollment numbers decreased, then the impact on landlords would be disproportionate rather than static since CSB /SJU will fill their beds, new and engineered, first with what's left over potentially considering off - campus placement. EDA Minutes - August 26, 2009 4 Palmer opined Ehlert was talking about hypothetical situations. Ehlert stated that he has heard from CSB Residential Life's Jodi Terharr that students will be allowed to live off campus only if they meet certain requirements. Ehlert stated that that fact puts CSB /SJU in the driver's seat. Wick noted Ehlert's concern is not an issue at this time. Ehlert thanked the EDA, City, CSB /SJU, and Dr. Edwards for the information. He stated such information was very much needed but that he agreed with Mayor Rassier that the assumptions needed to be accurate. After accurate numbers were achieved and the study accepted, planning for revitalization of properties could begin. Such planning involving landlords, CSB /SJU, the EDA, and the City working together could provide an exit strategy for rental property owners that would benefit all involved. Rassier stated he felt the EDA/City learned valuable information from the study process so far, but he opined a good number, all agreed upon was still necessary. Wick stated the bottom line was to plan for residency changes and that the study provided helpful information in advance of that planning process. Sister Thomasette Scheeler opined that there are some student rental units that ought not to be rented. She addressed about heEnte estatin ought she should say something vg ch was the condition of some rental units. Ehlert agreed with Scheeler and stated he was not opposed to a certified rental housing program and would be interested in participating should such a program be instituted by either CSB or SJU. Ehlert stated he favored the City /EDA involvement in rental unit conversion. Rassier asked the EDA whether or not the study was the document the EDA needed to move forward with planning for rental unit conversion. Wick stated he was comfortable with the study. Heinen inquired as to whether the EDA was comfortable with the 208 number but uncomfortable with the 334 figure. Wick concurred. Jacobson asked where the 208 number originated and why the number was the correct figure to employ. Skahen asked if rental property rents were only based on the number of students occupying a unit or if landlords typically have a set rental rate for an entire unit. Ehlert stated landlords typically calculate unit rent based on number of students housed on site. Strack thanked Ehlert for attending the meeting and providing perspective from the third party represented in the study - rental property owners. Strack noted rental property owners could provide context to formulation of assumptions throughout the study. For example landlords could tell Dr. Edwards where student renters went to school and whether or not study abroad students continued to pay rent. Strack noted she didn't like the idea of delaying action on accepting the study but thought more landlord participation could provide valuable perve Inonte ti to the study and leave no stone unturned in an attempt to employ q assumptions. y involving landlords in completion of the study could get more people on board and talking about rental unit conversion leading to further success in future planning and plan administration. Ehlert concurred and offered to organize a meeting of landlords to discuss the study. 5 EDA Minutes - August 26, 2009 Wick asked when /where meeting should occur. Ehlert and Strack to coordinate a meeting and location Land /Streetscape Design Update The agenda item was introduced by Chairperson Wick. Strack noted the EDA received notification from the St. Joseph Chamber of Commerce Executive Committee noting a requested donation was denied due to lack of planned funding sources for implementation of a design plan. EDA Board Member Skahen offered to re- present the request to the full Chamber of Commerce at the September meeting. Strack will email the proposal from Scenic Specialties and the EDA 2009 -2013 CIP to Skahen for use at the next Chamber meeting. St. Cloud Area Economic Development Partnership — MnCAR Seminar Wick introduced the agenda item announcing the SCAEDP would be hosting an annual Minnesota Commercial Association of Realtors on September 2 "d. Strack noted that she was invited to take part in a panel discussion regarding commercial development in the area. In addition, a bus tour of area attractions was being planned and the City /EDA could select three bus tour stops. Suggested stops were: Coborns PUD, CSAH 2 construction area, and Millstream Shops /Lofts. The EDA concurred with suggested stops. Strack will attend the all -day seminar representing St. Joseph EDA. 2010 Preliminary Budget Wick introduced the topic noting the City Council had been meeting on the preliminary budget and information regarding capital projects was requested of the EDA. Wick stated the EDA's initial request for capital projects was decreased to $20,300. The first $300 was reserved for technology upgrades. For the remaining $20,000, the EDA was asked to identify what CIP projects would be retained and at what funding level. The EDA decided that $6,000 of the CIP allowance would be used to recapitalize the BFA Grant Program. The remaining $14,000 would be used for 'revitalization' to be broadly defined as including the Downtown Revitalization Program, student rental conversion, and /or CSAH 2 construction. Board Member Announcements Jacobson noted the Chamber of Commerce had approved signs to be located at the Wobegon Trail Center. Adjournment. Motion to adjourn by kahen, second by Heinen. Meeting adjourned by consensus at 4:40 PM. Cynthia Smith - Strack EDA Director EDA Minutes — August 26, 2009