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HomeMy WebLinkAbout5.a. Annual Report EXECUTIVE SUMMARY Port Authority Meeting: April 19, 2022 AGENDA ITEM: Annual Report AGENDA SECTION: New Business PREPARED BY: Eric Van Oss, Economic Development Coordinator AGENDA NO. 5.a. ATTACHMENTS: None. APPROVED BY: LJM RECOMMENDED ACTION: Information Item. SUMMARY The annual Port Authority report highlights a list of projects, accomplishments, and progress made on initiatives between April 2021 and April 2022. The project type is categorized by activity for ease of review. As shown below, the last year was very active and several important projects were accomplished. Staff appreciates the leadership and direction received from the Port Authority throughout the past year. New Development Permit Activity: 2021 was a record year for building activity in Rosemount. The total permit valuation for new projects hit a record $146 million dollars, an almost 40% increase from 2020’s $105 million valuation. Both residential housing and commercial/industrial projects showed significant increases in activity. Commercial and industrial projects were the leading driver increased permit valuation in 2021, which represents a shift from a historically residential lead market. Commercial and Industrial permits rose from 17 in 2020 to 23 in 2021, and total valuation increased from $8 million to $43 million, a 435% increase. Major projects broke ground in the Rosemount Business Park and strong commercial and industrial demand is expected to continue into 2022. Housing remained the largest sector of activity and housing valuations broke $100 million for the first time, representing a 10% increase over 2020. Single family homes lead the way in permits issues, with a record 226 units in 2021, up from 155 in 2020. 2021 saw the addition of 340 total housing units added between single family (226), townhome (82) and multifamily developments (32). Housing development in Rosemount has dramatically increased year over year since 2010 when 80 units of was brought online. Total actively for all permits citywide increased from 1,415 to 2,219. APPRO Development: APPRO Development completed building the first of eight spec buildings in 2020. The building leased up almost immediately and 3 tenants in the 18,000 square foot facility completed tenant buildouts in 2021. The Morrison/Tap Society: The Morrison project wrapped up its two-year construction cycle. Half of the building was completed in fall 2021 and the remaining portion was fully completed in March 2022. Ron Clark had a strong lease up with the initial first phase of the building. Ron Clark also found a commercial user for the commercial portion of the site. Tap Society was approved to build a 3,500-sf restaurant and tap house; however, currently plans are on pause due to lingering COVID-19 related operational difficulties in the restaurant sector. 2 North 20 Brewing: APPRO began construction with the Schmitz family in fall 2021. Work continued through the winter and spring and the facility is nearly complete. The owner is targeting a late spring/early summer opening for Rosemount’s first brewery. OMNI Orchards Farm Winery and Taproom: Omni Brewing and City staff have been in conversation about a Rosemount location since early 2019. Those long-term conversations bore fruit in fall of 2021 when Omni purchased a site in the Rosemount Business Park. The City worked closely with Omni to amend the City liquor and zoning regulations in order to make the site compliant with State regulations. The City Council approved plans for a Farm Winery in fall 2021. The building permit for the facility has been submitted and the owner expects the initial facility to be completed in fall 2022. Project Osprey/The Home Depot: Staff began working with Seefried Industrial Properties on Project Osprey in spring of 2020. They moved forward with a 400,000 square foot distribution facility in the business park in summer 2021. The project was approved in August 2021 and construction began shortly after. The City’s financial consultant began work on a TIF District that was adopted in May 2021. The TIF district is going to be used to fund an extension of Boulder Circle to Highway 3. The tenant for the project is The Home Depot. City staff worked with the tenant business to secure funding through the Minnesota Investment Fund for the project. Scannell/FedEx: Scannell Properties moved through the entitlement process for an industrial project off Highway 52 and County Road 46. The project would take place over several phases and full build out would total approximately 1,500,000 square feet of industrial/warehouse uses. The majority of the space would be taken up by a FedEx facility expected to employ 400-600 people. The City worked with Scannell over the bulk of 2021 in preparation of an Alternative Urban Areawide Review (AUAR) for the redevelopment. The AUAR and the city entitlement process began in summer 2021 and concluded in winter 2022. Work is expected to begin on the facility later this year. Amber Fields: In winter of 2020 Maplewood Development moved forward with plans for the UMore site. Their proposal would eventually include 1,800+ housing units in the first phase. The City worked with Maplewood throughout the bulk of 2021 on a submittal for PUD approval in summer 2021. The entitlement process and subdivision agreement were completed in late 2021 and early 2022. Site work is scheduled to begin in spring 2022 and the City has already begun to receive initial concept plans for the first housing developments. Rosemount Community Rec Center/Life Time: Since 2012, the City of Rosemount has been exploring options for bringing more recreation spaces to town. Based on consistent citizen feedback and market demand, it was clear that additional facilities were needed as Rosemount continued to grow.  On Tuesday, April 5, 2022, the Rosemount City Council signed a purchase agreement to acquire a 29-acre parcel at the northeast corner of County Road 42 and Akron Avenue. In addition, they signed off on a letter of intent with Life Time to build a state-of-the-art athletic club on a portion of the land parcel. If the proposed partnership with Life Time Fitness is completed, Rosemount residents would receive a reduced membership rate and other access benefits to the newly built Life Time Fitness location throughout the partnership. This project is expected to spur growth of the Akron commercial area and will be further discussed in the Site Development section.  Site Development 3 Throughout 2021 major steps were taken to market and attract development for larger industrial and commercial sites in Rosemount. Staff completed 16 RFIs for commercial and industrial sites in 2021 (up 5 from 2020). Staff formed a strong partnership with Xcel Energy to certify sites in a Shovel Ready program. Xcel completed a series of new promotional vides that were released in spring 2021. The following three sites were enrolled into their program and as of April 2022, all 3 sites have multiple parties (at various stages) of the pre-development process: • 160 acres controlled by the OPUS Group adjacent to County Road 42. This site would be ideal for a large industrial user. • 300 Acres in UMore Park adjacent to County Road 42 and less than one mile from the Highway 52 interchange. This site is also suited for larger industrial users. • Staff has partnered successfully with the University on the continued development of the UMore site on matters relating to access, infrastructure and long-range planning. • 145 acres in the Rosemont Business Park of which 52 acres is designated DEED Shovel Ready. This site is suited for industrial, distribution, or office uses. Highway 3 and County Road 46: Staff has been actively working on the County Road 46 and Highway 3 intersection. This includes multiple sites that have had interest from several different industrial users. Staff solicited a Small Area Plan from WSB to assess whether the sites should be reguided from commercial to business park. Staff is planning on beginning the Comprehensive Plan Amendment process in April, which would spur development of the area likely within the next year. Akron Avenue: The intersection of Akron Avenue and County Road 42 has approximately 50 acres of land available for new commercial development. Part of this site will be allocated for the new indoor recreation center. In summer of 2020, the City undertook a commercial visioning exercise to envision a full build out of this site, which includes a southern portion controlled by Maplewood Development. At this juncture, the 3 intersections will be developed separately and not as a single site. Staff has been working closely with developers to aggressively market the Akron corridor to commercial developers and retail tenants. Israelson property: Warren Israelson is compiling his application to move forward with phase one of his mixed-use concept. In 2021, Mr. Israelson added a commercial development to the initial residential proposal. Mr. Israelson has indicated he will move forward with a first phase commercial building in conjunction with the residential portion of this development in 2022. Infrastructure and road work is slated to take place this spring and a separate developer is moving forward with a memory care/senior living facility on a portion of the site. Redevelopment: As Rosemount grows infill and redevelopment projects will become more frequent. Staff has begun to identify and market sites that would be prime candidates for redevelopment/infill within the existing core of Rosemount. Speedway: The conclusion of the bankruptcy case for this site has opened the door for redevelopment. The removal of the underground storage tanks likely means this site will be redeveloped into a different use. Staff is working on solutions for both the cleanup and ultimate development of this site. South Metro Auto: Staff identified this non-conforming use as an ideal area for redevelopment. It is near the Downtown but stationed away from the intersection at 145th and Highway 3. This 4 would be a potential spot for residential to support downtown business and/or small commercial space. Legion: The Legion represents the largest site within the traditional Downtown. This site is not adjacent to any single family residential or is set off Highway 3, making this an appealing multifamily or mixed-use site. Existing 42 Corridor: Several sites existing along the current main commercial corridor along 42. Additional acreage at Merchant’s Bank, Fairview, and several parking lots could accommodate further infill. Multifamily Housing: As Rosemount grows and the industrial base expands life cycle and multifamily housing has been identified as a priority. Staff has worked to recruit high quality multifamily developers to the City. Several sites are on the precipice of adding significant housing including the CDA property, Amber Fields, and both sides of Akron Ave. New Business Development: • On Time Service Pros • Lucky Nutrition • Mr. Wish • The Home Depot (forthcoming) • FedEx (forthcoming) • Las Tortillas (expansion) • Summit Dental (expansion) • Spectro Alloys (expansion) Downtown Façade Grant: Staff is recommendation the creation of a pilot grant program to assist business owners with façade and exterior improvements and the Port Authority approved the Downton Façade Grant program in summer 2022. Strategic Planning efforts of the Rosemount Port Authority identified Downtown Revitalization as an important objective. A well-maintained and attractive public realm reflects community pride and contributes to urban vitality. The Port Authority and City Staff had long discussed establishing a fund to assist building owners with improvements to façade and landscaping that enhances the quality and appeal of Downtown Rosemount. The pilot grant program was funded with an initial $20,000. Business can qualify for matching projects costs up to $5,000. To date 1 project has been fully paid out, 3 projects are in progress, and 1 project has been approved but not begun. City Sewer Availability Charge (SAC) Grant: The Port has emphasized a desire to attract more dining options in town, especially tap houses and restaurants that utilize patios and roof tops. Staff has been identifying barriers that restaurants face entering the market. Outside of available or desirable space, one of the biggest costs restaurants potentially face is Sewer Availability Charges (SAC). SAC fees are determined by the Met Council and businesses are charged both a Met Council and City SAC charge, which are currently $2,485 and $1,200 per SAC credit, respectively. In response these realities, the Port Authority authorized a $20,000 pilot program to offset a portion of these costs. The program covers up to 50% of City SAC fees when payment is submitted with the building permit. To date, 3 business have qualified for the program that began on January 1, 2022. Business Subsidy Policy Update: The City Council recently met to update their strategic plan and identify new goals for 2022/2023. Reviewing and revising the city’s business subsidy policy under the bucket of “Growing Rosemount” was one of those goals. In the 1998 legislative session, the Business 5 Subsidy Act was adopted, which required all local government to have a policy for public subsidies in excess of $150,000 and the Port Authority last adopted the policy in 2000. Since then, the City has used primarily Tax Increment Financing (TIF) to facilitate numerous economic development projects such as the Waterford, Culvers, Morrison, and Project Osprey. As the policy was 20 years old, staff advised it was a good time to revisit the subsidy policy and to ensure it is in line with the goals and priorities of the Port Authority, especially given that current pace of rapid development will likely result in more subsidy requests from developers and businesses. The update will likely be adopted in summer 2022 and staff has suggested changing the structure of the policy to include sections that outline the purpose, subsidy criteria, application process, minimum requirements and subsidy agreement and moving away from the current informal process that is applied on a project-by-project basis. 42 Corridor Commercial Visioning: Staff and the Port Authority completed the Commercial Visioning project for the County Road 42 corridor in early 2021. The deliverables of the project have featured heavily into the City’s promotional and marketing efforts. The renderings and boards have been displayed at many community events and have been a helpful tool to communicate the City’s growth and vision to residents. The commercial visioning project also provided a strong foundation when working with developers on the Akron Ave/Recreation Center master development. The majority of the visioning elements and goals have been incorporated into the initial site concepts as those projects move forward. Open to Business: The City renewed its partnerships with Open to Business. The new business advisor and staff work closely together on local issues. The long term placement of the new business advisor has been and incredibly positive development in terms of business engagement and solutions.