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HomeMy WebLinkAbout4.a. Draft Economic Development Section - Comprehensive Plan EXECUTIVE SUMMARY Port Authority Meeting Date: May 15, 2018 AGENDA ITEM: Draft Economic Development Section- Comprehensive Plan AGENDA SECTION: Old Business PREPARED BY: Kim Lindquist, Deputy Director AGENDA NO. 4.a. ATTACHMENTS: Draft Section APPROVED BY: LJM RECOMMENDED ACTION: Discussion Item ISSUE Last month, staff brought forward draft goals for the Economic Development section of the new Comprehensive Plan. The Port Authority discussed the goals and made a few modifications. The next step is to update the written section of the ED Plan. The attached is a work in progress but illustrates some of the updates staff is anticipating. The highlighted sections are areas that need further work. Staff is requesting any feedback on the draft, including whether there is subject matter missing from the draft that should be included in this Section. The goal is to have the entire draft Plan completed by September 2018. A final draft of the Section will be brought before the Port Authority in the next month or two for final action. The Downtown Task Force worked to update the Development Framework for Downtown during 2017. Staff met with several of the property owners individually and also held a public meeting on August 8th that combined the Downtown Framework exercise with the Comprehensive Plan update. Downtown property owners and businesses were individually invited to the August 8th meeting. Staff and Task Force members were available to respond to questions and there were visuals displayed of the various redevelopment concepts found in the draft document. Most of the concerns expressed was the potential extension of the Downtown Area to the west, to include properties on the east side of Cambrian and Cameo. It was explained that the document identifies potential scenarios and that it is not guaranteed that the existing single family homes would be redeveloped. The city is not interested in using eminent domain for land acquisition and therefore any redevelopment in the Downtown would have to be on a willing seller basis. RECOMMENDATION Discussion and provide staff direction. - 1 - ECONOMIC DEVELOPMENT ELEMENT Rosemount Employment Base and Resident Employment Rosemount is uniquely situated in the Twin Cities with the four lane, north to south running, US Hwy 52 connecting Rosemount with the Minneapolis St. Paul Airport and downtown St. Paul; the four lane, east to west running, County Road 42 connecting Rosemount to Hastings and Burnsville and connecting to the major routes leading into downtown Minneapolis; and the Mississippi River on Rosemount’s northeast boundary, including three barge terminals. The location of Rosemount’s economic base is also uniquely situated compared to its population base. The majority of Rosemount’s households are located in the western third of the City, while Rosemount businesses, industry, and institutions are spread through the community. Taking advantage of these economic development opportunities during the next 20 years will be the purpose of the Economic Development Element of the Comprehensive Plan. Table 1 shows the ten businesses and institutions that employ the most workers within Rosemount. Two of the top three employers are the educational institutions of Rosemount School District #196 and Dakota County Technical College. It will be important for Rosemount to maintain cooperative relationships with these institutions, not only because of their importance as employers within the City, but also to ensure that their education programs prepare trained workers for current and future Rosemount businesses. Table 1 also shows that seven of the remaining eight employers are manufacturing or industrial in nature. This illustrates the importance of industrial businesses for employment within the community, but also points out that local employment is generally housed in the industrial sector and efforts to expand employment opportunities should occur. Rosemount should encourage additional retail commercial and professional office commercial into the community to provide balance to the economic landscape. Table 1: Rosemount Top Ten Employers in 2018 Product or Service Employees Flint Hills Resources Oil Refining 963 Independent School District #196 Education XXX Dakota County Technical College Education 373 Proto Labs Prototyping and Production 300 Wayne Transports Trucking 300 Spectro Alloys Aluminum Smelting 179 Endres Processing Recycled Food Products 90 City of Rosemount Municipal Government 80 Eldorado Packaging Multiwall Bags 75 Minnesota Energy Resources Natural Gas 55 Source: City of Rosemount - 2 - Table 2 shows that 7,929 Rosemount residents were employed in 2004 while there were only 6,144 jobs offered by the businesses within Rosemount, which results in almost 1,800 people required to leave Rosemount to find employment. When looking at the various industries in which residents are employed, the disparity between where residents work and what employment opportunities are available in Rosemount is most prevalent in four industries: Wholesale Trade; Transportation, Warehousing and Utilities; Finance, Insurance and Real Estate; and Professional, Scientific, Management and Administration. Within the wholesale trade industry, there are 1,639 Rosemount residents employed within this field while there are only 221 jobs available within the city, creating an employment pool of 1,418 workers. Table 3 shows the average yearly wage in Rosemount for a worker in wholesale trade makes $45,335, while the metro area average yearly wage is $62,299. Wholesale trade businesses would typically be located within the business park and industrial/mixed use land use designations of the Comprehensive Plan. Within the transportation, warehousing and utility (transportation) industry, there are 555 Rosemount residents employed within this field while there are only 236 jobs available within the city, creating an employment pool of 319 workers. Table 3 shows the average yearly wage in Rosemount for a worker in transportation makes $48,675, while the metro area average yearly wage is $51,490. Transportation businesses would typically be located with the general industrial land use designations of the Comprehensive Plan. It should be noted that Rosemount currently has a significant amount of transportation businesses in town that have some less desirable land use characteristics, such a low employee to land area ratio and high demand for outdoor storage. Within the finance, insurance and real estate (FIRE) industry, there are 1,034 Rosemount residents employed within this field while there are only 110 jobs available within the city, creating an employment pool of 924 workers. Table 3 shows the average yearly wage in Rosemount for a worker in FIRE makes $32,261, while the metro area average yearly wage is $74,294. FIRE businesses would typically be located with the commercial or corporate campus land use designations of the Comprehensive Plan. Within the professional, scientific, management and administration (professional) industry, there are 517 Rosemount residents employed within this field while there are only 231 jobs available within the city, creating an employment pool of 286 workers. Table 3 shows the average yearly wage in Rosemount for a worker in a professional field makes $30,894, while the metro area average yearly wage is $58,288. Professional businesses would typically be located with the commercial, corporate campus or business park land use designations of the Comprehensive Plan. The City should recruit businesses in the wholesale trade, FIRE and professional industries to locate within Rosemount, while providing land for additional warehousing and utility businesses. There are a significant amount of Rosemount residents that are employed in these fields that the new businesses could draw their employees from. The establishment of these businesses would create jobs that can support households and provide a market for other local businesses. - 3 - Table 2: Comparison of Employees to Employers within Rosemount in 2012 Rosemount Residents Employed by each Industry Number of Employees in Rosemount Businesses by Industry Deficiency of Jobs within Rosemount to match Resident's Place of Employment Construction 358 387 -96 Manufacturing 1,296 1,440 -18 Retail Trade 1,391 347 -134 Transportation, Warehousing and Utilities 909 706 319 Professional, Scientific, Management and Administrative 1,329 94 286 Educational, Health and Social Services 2,742 2,704 -1,137 Arts, Entertainment, Recreation and Food Service 950 843 -12 Other Services (Except Public Administration) 575 688 24 Public Administration 540 570 185 1,785 Source: Minnesota Department of Economic Development and US Census Bureau Table 3: Rosemount Industries in 2012 Establishments Employees Total Wages Average Weekly Wage Average Yearly Wage Agriculture, Forestry, Fishing, Hunting and Mining 4 32 $1,846,751 $1,127 $57,711 Construction 59 811 $46,605,926 $1,105 $57,467 Manufacturing 19 1440 $138,167,000 $1,845 $95,949 Real Estate, Rental and Leasing 9 14 $386,000 $530 $27,571 Retail Trade 34 347 $8,250,000 $457 $23,775 Transportation, Warehousing and Utilities 20 706 $44,792,000 $1,220 $63,445 Health Care and Social Assistance 36 393 $7,502,000 $367 $19,089 Accomodation and Food Services 29 466 $5,105,000 $210 $10,954 Professional, Scientific, and Technical Services 55 94 $4,836,000 $989 $51,447 Administrative Support and Waste Management & Remediation Services 23 207 $8,089,000 $751 $39,077 Arts, Entertainment, and Recreation 12 87 $866,000 $191 $9,954 Other Services (Except Public Administration) 27 221 $6,999,000 $609 $31,669 Public Administration 3 43 $2,279,736 $1,020 $53,017 Source: Minnesota Department of Employment and Economic Development Rosemount Port Authority In 1979, the City of Rosemount established the Rosemount Housing and Redevelopment Authority (HRA) which conducted a number of projects, most notably the Rosemount Plaza block located southeast of the intersection of 145th Street West and South Robert Trail. In - 4 - 1991, the City converted the HRA into the Rosemount Port Authority for the purpose of undertaking housing, economic development and redevelopment activities within the City. The Port Authority has seven members consisting of the Mayor, three City Councilmembers, and three appointed residents. The Port Authority sets the economic development policy for the City, acquires and demolishes buildings on blighted and underutilized land for redevelopment, and recruits new businesses to locate within Rosemount, among many other responsibilities. Many of the programs described within the Economic Development Element, such as Downtown Redevelopment and the establishment of the Rosemount Business Park, have been or are being accomplished through the work of the Port Authority. Most recently the Port Authority has focused their efforts on Retail attraction including bringing a hotel to Rosemount. The Port Authority is responsible for implementing the Goals and Objectives of the Economic Development Element, as well as continuing to monitor the economic health of the City while recruiting new business and encouraging the growth of existing businesses. Downtown Redevelopment The City of Rosemount had adopted a redevelopment plan for Downtown Rosemount in 2004 entitled the Development Framework for Downtown Rosemount. In 2017, the plan was updated to reflect the changes that have taken place in the Downtown since the plan’s original adoption and layout goals more consistent with the existing market. The Framework covers the properties in the historic downtown, roughly described as the blocks on both side of South Robert Trail from 143rd Street West on the north to approximately 148th Street on the south. The Framework addresses seven focus areas within downtown: Crossroads North; Crossroads South; Core Block West; Core Block East; Legion Block; Genz-Ryan; and Fluegel’s. To help spur downtown redevelopment, in 2004 the City established the Downtown- Brockway Redevelopment Tax Increment Financing (TIF) district. The TIF district uses the increased tax income (also known as tax increment) from the former Brockway Glass factory redevelopment into the Harmony residential neighborhood and increased valuations Downtown to pay for the land acquisition, land clearing, and infrastructure costs associated with downtown redevelopment. TIF funds have been used for infrastructure and parking space construction, and land acquisition for Core Block East and land acquisition of the old Genz Ryan site. Since 2008, the City has received almost $1.4 million from the Metropolitan Council’s Livable Community Demonstration Account (LCDA). These grants were used for land acquisition costs and infrastructure improvements for redevelopment projects such as The Rosemount Senior Living, Cambrian Commons senior apartments and Waterford Commons. The goal of the infusion of public funds into the Downtown is to spur private sector investment through additional redevelopment or renovation of other sites. The Downtown has experienced significant private reinvestment in the Downtown over the last several years. Major renovations of the First State Bank of Rosemount, Fluegel’s and Rosies gas station have increased the activity and upgraded the development standards in the Downtown. - 5 - The City has been active in the redevelopment of other focus areas to improve the lifestyle and work setting of downtown Rosemount. Following the renovation and conversion of St. Joe’s church into a community assembly hall into the Steeple Center, an addition was constructed between The Rosemount Senior Living and the assembly hall. Additionally, the City in partnership with MN Valley Transit Service applied federal grant funds toward construction of a park and ride transit station located near the Legion site. The site now open has provided mass transit opportunities to the core Downtowns. Its popularity has prompted discussion of installation of another park and ride for community residents. Business Recruitment, Assistance, and Retention To support small businesses, promote entrepreneurship in Rosemount, Open to Business is available to provide one-on-one business counseling to current a prospective business owner at no cost. Consultants provide assistance with business plan development and the identification of challenges and opportunities, among other things. Additionally, business owners can find information about additional resources such as training programs, governmental services, and networking opportunities. The City also partners with the Dakota County Regional Chamber of Commerce to connect with businesses to identify the needs and concerns business leaders in the community. The City works closely with the Minnesota Department of Employment and Economic Development and Greater MSP to respond to requests for information by businesses that are looking to relocate, particularly those businesses that are looking for greenfield sites to construct new facilities. The City shares data regarding municipal services, site details, transportation, as well as any other specific information requested. The City has also worked closely with Xcel Energy’s site certification program to compile information to have specific site information ready when City staff fields a request for information. The City’s relationships with the educational institutions within Rosemount, such as Rosemount School District #196 and Dakota County Technical College, and the greater region, such as Inver Hills Community College and the University of Minnesota, are important for business recruitment and the health of the local economy. Businesses that are looking to locate within Rosemount have concerns that there is an existing base of well- educated employees to recruit from, as well as local educational institutions that have training programs to create new worker and provide continuing training and education from existing employees. It is important for Rosemount to work with the local educational institutions to ensure that their training programs will support needs of the existing businesses within Rosemount and provided a well-educated employee pool for future businesses to draw from. Rosemount Business Park The City established the Rosemount Business Park which contains about 280 acres of contiguous land, roughly bounded by County Road 42 to the north, a line one quarter of a mile north of County Road 46 to the south, Biscayne Avenue to the east, and the Union Pacific rail line and South Robert Trail to the west. The Rosemount Business Park was - 6 - initiated with the City purchasing the northern 80 acres of the business park and establishing a TIF district to provide the initial infrastructure to the park. The original 80 acres have since been developed with seven buildings housing businesses such as Akona, Sweet Harvest and Proto Labs. Approximately 35 acres located south of Boulder Trail has been designated as Shovel Ready by the Minnesota Department of Employment and Economic Development. Sites that are certified as Shovel Ready have already undergone the most time-consuming legal, technical, and regulatory aspects of the development process. The Shovel Ready site within the business park has received preliminary plat approval for future subdivision as well as a Phase I environmental review. Retail Commercial The City currently has about XXX acres of land developed with retail commercial uses. The retail businesses are predominately located either in downtown Rosemount or in a district west of South Robert Trail and south of County Road 42. The retail businesses are predominately small service retail business, several restaurants, and two grocery stores. The vacant retail commercial space in town is located in small portions of multiple tenant commercial strips as well as the former Terry’s Hardware. Vacant land that has been designated for future commercial development is located on the north side of County Road 42 just east of South Robert Trail and also on the east and west sides of Akron Avenue where the most new housing units are being built. There are no general merchandise, home improvement, or other types of big box stores in Rosemount. For this reason, most Rosemount residents are required to leave the City to fulfill their daily or weekly shopping needs, typically to the communities to the west and north, such as Eagan, Apple Valley, Burnsville, and Lakeville. Recent efforts to solicit big box businesses to Rosemount have been unsuccessful for a number of reasons. Most commonly cited reasons include the lack of direct controlled access to major roads, not enough residential density in the community and the amount of commercial development in Rosemount’s suburban neighbors. The economic trends in retailing, including the increase in on-line shopping have also impacted the amount of retail development in the community. Over 6,400 additional households are expected to be constructed by 2040, which is an increase of 76% over the 8,400 households within Rosemount today which will draw retailers to the Rosemount market. Office Commercial Rosemount has minimal office space, with the current office supply normally occupied with either professional office, such as dentists or insurance agents, or associated with existing manufacturing or industrial businesses. As shown in Table 3, there are over 1,000 Rosemount residents who are working in the finance, insurance, and real estate (FIRE) field, while Rosemount FIRE businesses employ only 110 people. This deficiency of about 900 residents who need to leave Rosemount to work in the FIRE field would indicate that there is a need for additional office space within Rosemount. Table 3 also shows a deficiency of almost 300 residents who need to leave Rosemount to work in the professional, scientific, management, and administrative field. The Comprehensive Plan should designate commercial and corporate campus land to - 7 - support independent stand alone office buildings, but also ensure the ability to provide office space needed in conjunction with manufacturing and industrial businesses as well. Industrial Rosemount has a long history of industrial development, from manufacturing facilities near the downtown, such as El Dorado and the former Brockway Glass factory, to heavier industrial on the east near US Hwy 52, such as Flint Hills Refinery, Spectro Alloys and Endres Processing. More recently, industrial development has occurred in the form of office/warehouse and manufacturing industrial within the Rosemount Business Park; trucking terminals near the interchange with US Hwy 52 and County Road 42. While Rosemount is discouraging new heavy industrial or other industrial businesses that require significant amounts of outdoor storage, Rosemount does encourage new manufacturing, warehousing, and trade industrial businesses to locate within Rosemount. These businesses bring jobs that can support an entire family while providing a significant industrial property tax base. In addition, Table 3 shows that more than 1,400 Rosemount residents in the wholesale trade field need to leave Rosemount to work everyday, as well as over 300 people in the transportation, warehousing, and utility fields. By continuing to provide sufficient business park and industrial/mixed use land within the Comprehensive Plan would allow these businesses to locate within Rosemount. UMore Park The University of Minnesota owns about 5,000 contiguous acres of land, 3,000 acres of which is located in southern Rosemount and 2,000 acres of which are located in northern Empire Township. The University has used the land as a research farm named the University of Minnesota Outreach, Research and Education (UMore) Park. Within this Comprehensive Plan, most areas within UMore Park will continue to be designated as Agricultural Research, but areas that will potentially develop over the next 20 years will be designated for land uses according to the UMore Park Alternative Urban Areawide Review (AUAR). The University has taken the first steps toward the development of UMore Park by releasing a Request for Proposals to residential developers as well as entering into an agreement with The Opus Group to market a piece of land in the northwestern portion of UMore Park for the development of a light industrial or manufacturing use. These steps follow a planning process that took place develop the UMore Park Strategic Plan and the AUAR. The plan proposes a community of 16,000 households mixed in with retail commercial, employment centers, and institutional uses. UMore Park Strategic Plan calls for approximately 2,500,000 square feet of commercial and industrial (500,000 square feet of retail, 1,000,000 square feet of office, and 1,000,000 square feet of industrial) development, mostly located on the eastern third of UMore Park. Fiscal Disparity In the seven county Twin Cities metropolitan (metro) area, the tax base gained from new commercial or industrial growth is shared by the entire metro area, not solely by the - 8 - community in which the economic development occurs. This commercial and industrial (C/I) tax base sharing program is called fiscal disparity. Since 1971, forty percent (40%) of the tax base of any new C/I development is taken from the local community and given to a common metro area pool. This common pool is then redistributed to all the communities based on their total tax base (commercial, industrial, residential, and agricultural). Essentially, fiscal disparity takes tax base from communities that have seen significant economic development since 1971 and gives it to communities that post 1971 commercial/industrial development is a small percentage of their total tax base. Various justifications are given for this program, most notably to discourage individual communities from competing for the same new businesses. Fiscal disparity generally takes C/I tax base from the first and second ring suburbs along the I-494 and I-694 strip that have seen significant growth since 1971 (Bloomington, Minnetonka, Eagan) and gives it to the inner cities who had significant C/I tax base previous to 1971 (Minneapolis and Saint Paul) or to suburban communities that have lower levels of C/I tax base compared to their total tax base (Cottage Grove, Apple Valley, Prior Lake). Table 4, attached to this executive summary, shows that Minnetonka lost $6.8 million in tax base while Saint Paul gained $19 million and Cottage Grove gained $2.1 million in tax base due to fiscal disparity. Rosemount is affected fairly neutrally by fiscal disparity, receiving only about $100,000 in tax base. Table 4: Fiscal Disparity of Select Cities Payable in 2006 Pre-1971 C/I Tax Base Post-1971 C/I Tax Base Total 2006 Tax Base 2004 Population Fiscal Disparity Tax Base Adjustment Post-1971 C/I Tax Base as a percentage of Total 2006 Tax Base Prior Lake $278,935 $1,328,800 $22,294,144 21,156 $1,360,601 5.96% Cottage Grove $537,275 $3,721,645 $28,043,619 31,774 $2,118,313 13.27% Lakeville $1,215,214 $8,574,915 $55,545,397 49,097 $1,277,635 15.44% Apple Valley $1,113,396 $8,269,598 $52,279,631 48,875 $1,434,275 15.81% Rosemount $702,215 $3,929,398 $21,645,806 17,740 $101,288 18.15% Saint Paul $25,299,251 $42,687,458 $224,854,823 287,410 $19,039,665 18.98% Minneapolis $56,441,944 $81,946,785 $387,469,064 382,400 $6,799,501 21.15% Minnetonka $3,361,788 $25,599,440 $90,431,553 51,480 -$6,851,418 28.30% Eagan $2,654,377 $25,160,598 $85,077,507 65,764 -$4,186,797 29.57% Source: Minnesota House of Representatives Research Department - 9 - Economic Development Element Goals and Policies 1. Provide local shopping opportunities for residents to purchase their daily and weekly needs within Rosemount. a. Work with the Partners and Consultants to recruit more retail commercial businesses to locate within Rosemount. b. Provide retail commercial land adjacent to planned controlled accesses onto major roads. c. Provide retail commercial land near existing and planned household developments, such as the UMore park project. d. Continue to actively market Rosemount to commercial brokers and retail businesses to expand the retail opportunities within the City. e. Develop relationships with business owners, property owners, developers and brokers to market the community for additional retail development. 2. Expand Rosemount’s employment base to provide employment opportunities for all residents. a. Provide additional light industrial land to support assembly, warehousing, and manufacturing businesses that can provide head of household salaries. b. Work cooperatively with the Dakota County Technical College, Workforce Investment Board, Independent School District #196 and other educational institutions within Dakota County to train workers with the skills needed for existing and future Rosemount businesses. c. Pursue outside funding sources to develop or redevelop land for commercial and industrial uses, such as Metropolitan Council Livable Communities Demonstration Account and Tax Base Revitalization Account, Dakota County Community Development Agency, Minnesota Department of Employment and Economic Development, and other applicable grants. d. Partner with Greater MSP and DEED to inform developers, brokers and businesses about the opportunities in Rosemount and encourage business park development. e. Work with larger landowners and their representatives to market their properties including OPUS, the Pahl Family, and UMore. f. Explore transit opportunities to provide an expanded employee base for new and existing businesses. g. Build and maintain relationships with Rosemount business leaders to understand and identify barriers to the growth of their businesses. h. Partner with the Dakota County Regional Chamber of Commerce to ensure local business are fully supported by providing opportunities to connect, collaborate, and promote the City’s business community. - 10 - i. Provide land that would support a variety of commercial and industrial businesses to ensure a sufficient mix of employment opportunities for all skilled Rosemount residents 3. Balance economic growth within the overall tax base of Rosemount. a. Provide land available for a balance of commercial and industrial businesses, including expanding the retail, medical and office commercial sectors while continuing to support industrial businesses. b. Work cooperatively with the Dakota County Technical College, Independent School District #196 and other educational institutions within Dakota County to train workers with the skills needed for existing and future Rosemount businesses. c. Continue to provide for additional residential growth to serve as an expanding employee pool for Rosemount business, a growing market to attract additional retail establishments, and balanced tax base. 4. Provide for economic development opportunities that create a vibrant Downtown that maintains a traditional main street feel. a. Continue Port Authority involvement in redevelopment projects that implements the Development Framework for Downtown Rosemount. b. Pursue outside funding sources to redevelop downtown properties, such as Metropolitan Council Livable Communities Demonstration Account and Tax Base Revitalization Account, Dakota County Community Development Agency, Minnesota Department of Employment and Economic Development, and other applicable grants. c. Create partnerships that will encourage public redevelopment and private rehabilitation of existing buildings within the Downtown. 5. Create written and online materials for marketing the community to the region, the state and nationally, focusing on our development advantages. a. Continue partnerships with Greater MSP, DEED, and Xcel Energy to highlight sites for development, including the shovel ready programs at the State and Xcel. b. Coordinate the Rosemount Home and Business Expo and Business Appreciation Events to encourage marketing of local businesses and support the local economy.