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HomeMy WebLinkAbout7A. Annual Report E X E C U T I V E S U M M A R Y Port Authority Meeting: April 18, 2023 AGENDA ITEM: Annual Report AGENDA SECTION: New Business PREPARED BY: Eric Van Oss, Economic Development Coordinator AGENDA NO. 7A ATTACHMENTS: None. APPROVED BY: AK RECOMMENDED ACTION: Information Item . SUMMARY The annual Port Authority report highlights a list of projects, accomplishments, and progress made on initiatives between April 20 22 and April 2023. 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: 2022 was a record year for building activity in Rosemount. The total permit valuation for new projects hit a record $1 55 million dollars, an 6% increase from 2021’s $146 million valuation. C ommercial/industrial projects showed significant increases in activity, while residential housing slowed. Commercial and industrial projects were the leading driver increased permit valuation in 202 2, which continued on trends from 2021 . Commercial and Industrial permits rose from 23 in 2021 to 26 in 2022, and total valuation increased from $42 million to $77 million, a n 83% increase. Major projects broke ground in the Rosemount’s areas designated Business Park and Light Industrial. S trong commercial and industrial demand is expected to continue into 202 3. H ousing was the 2nd largest sector of activity, and housing valuations fell to $69 million from $100 million, representing a 31% decrease over 2021. Single family homes lead the way in permits issue d, with 134 units in 2022, down from a record 226 in 2021. 2022 saw the addition of 228 total housing units added between single family (134), townhome (62) and multifamily developments (32). Despite the downturn from a record setting 2021, h ousing development in Rosemount has dramatically increased year over year since 2010 when 80 units of was brought online. 2023 is shaping up to be a strong year for housing and will include further development of Amber Fields and several large apartment pr ojects. Total actively for all permits citywide increased from 1,415 to 2,219. The Morrison: 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 April 2022. Ron Clark had a strong lease up with the building and it currently is over 95% occupied . In March 2023, the City and Ron Clark restarted the search for a new commercial user after Tap Society did not move forward . City staff is working with Ron Clark to identify other food and beverage user s for the site. North 20 Brewing: APPRO began construction with the Schmitz family in fall 2021. Work continued through the winter and spring of 2022 and the facility in summer 2022 . The facility has been exceedingly popular, which has promoted City staff work ing with the owners on amending the Conditional Use Permit (approved in 2020) to would allow for extended hours and outdoor music. 2 OMNI Orchards Farm Winery and Taproom : Omni Brew ing 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 and construction was completed in winter 2022. A grand opening was held in early 2023 and the owners have reported s trong business in the first half of the year. Project Osprey/The Home Depot: Staff began working with Seefried Industrial Properties on Project Osprey in spring of 2020. They moved forward with a 417,000 square foot distribution facility in the business park in summer 2021. The project was approved in August 202 1 and construction was completed in winter 2023 . A grand opening board cutting was held in February of 2023. The facility initially called for 61 total jobs; however, the facility is currently employing 110 people and expects to continue hiring. Part of this project included the creation of a TIF district, which is being used as a funding mechanism for an extension of Boulder Circle to Highway 3. This portion of the project is expected to begin in summer 2023. Scannell/FedEx: Scannell Properties moved through the entitlement process for an industrial project off Highway 52 and County Road 46 in 2022. The project is taking place over several phases and full build out would total approximately 1,500,000 square feet of industrial/warehouse uses (FedEx is 557,000 square feet). Most of the space is currently under construction and will be taken up by a FedEx facility expected to employ 400 -600 people. Amber Fields: In winter of 2020 Maplewood Development moved forward with plans for the UMore site. The entitlement process and subdivision agreement were completed in early 2022 and site work began that spring. Over the course of 2022, 1,393 units were approved in the Amber Fields development. This included 422 single family homes (for sale and rentals), 293 townhomes, and 678 multifamily units. Rosemount Community Rec Center/Life Time /Akron 42 Commercial : 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. These years of planning culminated on April 4, 2023, when the Rosemount City Council the lease agreement for the state-of-the-art Life Time Recreation Center. The project is taking bids at the end of April 2023 and is expected to break ground in July. Rosemount residents would receive a reduced membership rate and other access benefits to the newly built Life Time location throughout the partnership. This is part of a larger effort to develop the Akron intersection into a thriving commercial node. This project has already spurred growth of the Akron commercial area ; Roers is constructing a 212 unit building across from the site and Shafer Richardson is constructing 336 unit s between two buildings directly north of Life Time. These projects in conjunctio n with Life Time are greatly boosting the area population and local trips to the corridor —both metrics that desirable commercial developers value when elevating future sites. These projects have resulted in conversations with restaurant users and a special ty grocer interested in the area.   Frana Expansion: Staff began actively working on a new vision for the County Road 46 and Highway 3 intersection. This area include s multiple sites that have had interest from several different industrial users; however, the land use was reserved for non -industrial uses. Staff solicited a Small Area Plan from WSB to assess whether the sites should be reguided from commercial to business park. The Small Area Plan determined that market conditions for the intersection had changed and reguiding the area would spur industrial development. Upon reguiding the intersection, Frana Companies began work on a new facility 3 on the western portion of the area. This will be their second facility in Rosemount. Additionally, staff is working with a developer on a spec industrial p roject directly south of the Home Depot. Project Bigfoot and other code name projects: Several code name projects have been moving forward with the site selection projects in Rosemount. Staff has been working over the last two years with 6 code name p rojects that would represent a major investment in industrial space and jobs. One project, Project Bigfoot, has made it through the official PUD approval process at this time. This project is a large corporate technology campus on the UMore property. The P ort and Council will be made aware of progress with these projects as they advance to the entitlement stage of development. Site Development Throughout 2021 major steps were taken to market and attract development for larger industrial and commercial sites in Rosemount. Staff completed 22 RFIs for commercial and industrial sites in 202 2. Staff formed a strong partnership with Xcel Energy to certify sites in a Shovel Ready program. The following three sites were enrolled into their program and as of April 202 3, 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. Additionally, staff i s working with Great River Energy on marketing a new site in eastern Rosemount. GRE put 300 acres on the market in March of 2023 (adjacent to the Scannell/FedEx project) and the City is working with the utility to find suitable users for the site. Akron Avenue: Large portions of the intersection of Akron Avenue and County Road 42 are taken by the Roers and Life Time projects . 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 sit e. Staff has been working closely with developers to aggressively market the Akron corridor to commercial developers and retail tenants that align with the City’s Commercial Visioning results. Several projects are in the initial stages with announcements e xpected later in the year. Israelson property: In 2021, Mr. Israelson added a commercial development to the initial residential conceptual proposal approved by the council. Mr. Israelson has begun infrastructure work on the site in preparation for the first phase of his development. This will consist of 2 commercial building in conjunction with residential multifamily buildings . A separate developer has begun work 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. Speedw ay: The property was placed in receivership with Lighthouse Management. Their role is to find care for the liability, assets and property etc. The underground storage tanks were removed in 4 late 2022. The owner has contracted with an environmental consulting company, Carlson McCain, to conduct a Limited Site Investigation per requirements of the MPCA after their review of the initial excavation report. Once the LSI has been completed the MPCA will give direction on whether there will be additional remediation requirements to bring the site into permanent closure status. Carlson McCain will submit their LSI report to the MPCA for review within the next 4 weeks. The MPCA then reserves up to 180 days to review the file. Once this process is complete redevelopment of the site can take place. Staff has been actively working with users to find a desirable use once the environmental remediation process is completed. 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 145 th and Highway 3 . Staff has been working throughout 2022 with a potential developer for the site . 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. In early 2023, staff began initial conversa tions with the Legion leadership on a potential redevelopment scenario. 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 acco mmodate 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 were acquired in 2022 including the Roers Akron site and the nearby CDA site . Several redevelopment sites remain options for multifamily development. The Emerald Isle multifamily site remains the only greenfield site without a conceptual plan. New Business Development: • Omni Farm Winery • North 20 Brewing • Thread and Clover • Nautical Bowls • The Home Depot • The Morrison (full opening) • FedEx (forthcoming) • Las Tortillas (expansion) • Summit Dental (expansion /new location ) • Spectro Alloys (expansion) • Frana (expansion /2nd location ) • Emerald Roots Salon (expansion /new location ) • Anytime Fitness (expansion/new ownership) Downtown Façade Grant: With staff recommendation, the Port Authority created a pilot grant program to assist business owners with façade and exterior improvements . 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 could qualify for matching projects costs up to $5,000. At the end 5 of the pilot grant, 3 projects had been fully paid out. This left $5,000 remaining for 2 additional projects that were approved for partial grants. This has not been paid out, as there are still issues being worked out between the landlord and approved tenant businesses. The participants indi cated they were happy with the pilot program and the availability of matching funds jump started investments that otherwise would not have occurred. There were more applicants than full grant awards, indicating healthy demand for the program. After the launch of the program, business owners outside of downtown indicated they would utilize a similar program. City Sewer Availability Charge (SAC) Grant: The Port has emphasized a desire to attract more dining options in town, especially tap houses and restaura nts 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. The program that began on January 1, 2022. Businesses that participated in the program included; Omni Farm Winery, Mr. Wi sh, Las Tortillas (patio expansion), and Nautical Bowls . Unrestricted TIF Funds : In 2021, the Legislature enacted expanded, temporary authority to transfer unobligated tax increments for purposes of assisting private development consisting of the construc tion or substantial rehabilitation of buildings and ancillary facilities, if doing so will create or retain jobs in the state. The new law temporarily permits a development authority (Rosemount Port Authority) to elect, by resolution, to transfer unobligat ed increment for certain specified purposes provided the following criteria are met: 1. It consists of the construction or substantial rehabilitation of buildings and ancillary facilities; 2. It creates or retains jobs in the state, including construction jobs; and 3. Construction commences before December 31, 2025 and would not have commenced before that date without the assistance. On November 1 st, the City Council approved the TIF Spending Pl an. This allowed the City to transfer approximately $2.857 million from the Downtown Brockway TIF District to a separate account by December 31st, 2022. The funds must be allocated to projects by December 31 st, 2025 or they will revert to the originating d istrict. The Port Authority is the body that will approve (by resolution) the transfer of funds for specific projects. Upon the approval of the TIF Spending Plan, staff began drafting implementation criteria in anticipation of forthcoming projects. This al lows the City to add another “tool” within our economic development toolbox. To best utilize these funds minimum project criteria will draw from existing City policies, goals, and strategic documents. Projects that further the goals outlined in the Compreh ensive Plan, Commercial Visioning, and the Council’s Strategic 2022 goals will be prioritized. Additionally, several sites that are not outlined in official policy documents have long been discussed for redevelopment, and those sites will also be prioritiz ed for funding. 42 Corridor Commercial Visioning: Staff and the Port Authority completed the Commercial Visioning project for the County Road 42 corridor in 2021. The deliverables of the project continue to feature heavily into the City’s promotional and marketing efforts. The renderings and boards have been di splayed at many community events and have been a helpful tool to communicate the City’s growth and vision to residents. The commercial visioning proje ct also provided a strong foundation when working with developers on the Akron Ave/Recreation Center master development. The layout and building massing are subject to change and revisions, but the overarching elements and goals have been incorporated into the initial site concepts as those projects move forward. New 2022 renderings of the Life Time project 6 have incorporated into the City’s promotional efforts as staff tries to shape development of the corridor to meet the Commercial Visioning goals. 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 an incredibly positive development in terms of business engagement and solutions.