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HomeMy WebLinkAbout12172024 Agenda Packet AGENDA Port Authority Regular Meeting Tuesday, December 17, 2024 4:15 PM Council Chambers, City Hall 1. TOUR 14701 BLAINE AVE ROSEMOUNT, MN a. Port Authority will be leaving City Hall at 4:15 p.m. and taking a bus to tour 14701 Blaine Avenue, Rosemount, MN 2. CALL TO ORDER/PLEDGE OF ALLEGIANCE a. Port Authority will arrive at City Hall at approximately 6:00 p.m. to call the meeting to order 3. ADDITIONS OR CORRECTIONS TO AGENDA 4. CONSENT AGENDA a. Minutes of October 15, 2024 Regular Meeting b. Minutes of November 19, 2024 Regular Meeting 5. CHAIRPERSON’S REPORT 6. REPORTS FROM PORT AUTHORITY COMMISSIONERS 7. NEW BUSINESS a. Willy McCoy's Development Contract b. OMNI Business Subsidy Request c. 2025 Community Development Block Grant (CDBG) Allocation 8. OLD BUSINESS a. Project Updates 9. DISCUSSION 10. ADJOURNMENT Page 1 of 23 ROSEMOUNT PORT AUTHORITY REGULAR MEETING PROCEEDINGS OCTOBER 15, 2024 CALL TO ORDER/PLEDGE OF ALLEGIANCE Pursuant to due call and notice thereof, a regular meeting of the Rosemount Port Authority was held on Tuesday, October 15, 2024, at 5:30 PM. in Rosemount Council Chambers, 2875 145th Street West. Chairperson Essler called the meeting to order with Commissioners Freske, Weisensel, Theisen and Klimpel. Commissioner Ober arrived at 5:35 p.m. Commissioner Beaudette arrived at 5:50 p.m. ADDITIONS OR CORRECTIONS TO AGENDA None. CONSENT AGENDA Motion by Theisen Second by Freske Motion to approve the consent agenda Ayes: 5. Nays: None. Motion Carried. a.Minutes of the August 20th Regular Meeting b.Minutes of the September 17th Regular Meeting CHAIRPERSON’S REPORT None. REPORTS FROM PORT AUTHORITY COMMISSIONERS None. NEW BUSINESS a. Commercial Visioning Update Stantec provided an update of site visions for key nodes along county road 42 with the Rosemount Port Authority and members of the Planning Commission. Stantec reviewed the concepts and layouts along County Road 42 at the intersections of Highway 3, Akron Avenue, Highway 52 and Emery Avenue. Page 2 of 23 Stantec received feedback from the commissioners and will revise the plans in order for staff to visually share these with the public and future developers. OLD BUSINESS a. Project Updates Economic Development Coordinator, Van Oss, highlighted a few project updates noting there has been no updates to the Speedway site. DISCUSSION None. ADJOURNMENT There being no further business to come before the Port Authority at the regular council meeting and upon a motion by Essler and a second by Theisen the meeting was adjourned at 6:51 p.m. Respectfully submitted, Erin Fasbender City Clerk Page 3 of 23 ROSEMOUNT PORT AUTHORITY SPECIAL MEETING PROCEEDINGS NOVEMBER 19, 2024 TOUR 13825 SCHMIDT LAKE ROAD PLYMOUTH, MN a. Port Authority will be leaving City Hall at 3:30 and taking a bus to tour the facility at 13825 Schmidt Lake Road Plymouth, Minnesota Port Authority Members Weisensel, Beaudette, Essler and Theisen took a tour with staff of the facility at 13825 Schmidt Lake Road as the site relates to Project Falcon. Port Authority members arrived back to Rosemount City Hall at approximately 6:30 p.m. OLD BUSINESS a. Project Updates Project updates were provided to the Port Authority members in the packet. Respectfully submitted, Erin Fasbender City Clerk Page 4 of 23 EXECUTIVE SUMMARY Port Authority Regular Meeting: December 17, 2024 AGENDA ITEM: Willy McCoy's Development Contract AGENDA SECTION: NEW BUSINESS PREPARED BY: Eric Van Oss, Economic Development Coordinator AGENDA NO. 7.a. ATTACHMENTS: DOCSOPEN-#967219-v5 APPROVED BY: LJM RECOMMENDED ACTION: Motion to Approve the First Amendment for Private Development Between Rosemount Port Authority and Willy McCoy's of Shakopee, LLC. BACKGROUND Earlier this year, the Rosemount Port Authority approved a contract for private development with Willy McCoy's of Shakopee, LLC to construct a new restaurant near the Life Time development. The agreement outlined the minimum requirements of the project and the requirements Willy McCoy's of Shakopee, LLC needed to complete in order to be eligible for a business subsidy from the city. Due to a delay in the purchase agreement between the private parties, the contract for private development needs to be updated to reflect a new project timeline. Additionally, Willy Coy's is asking for the minimum requirements to be amended from "rooftop patio" to "patio" due to cost constraints associated with the expense of a rooftop addition. Despite the changes to the project, staff finds the development furthers the City's strategic goals of adding more restaurants and desirable retail to Rosemount, and will provide an important anchor to the developing Akron corridor. Staff and the city's legal counsel decided it would be appropriate to add a new definition, "Satisfactory Progress to Completion." This new definition would allow the business subsidy to be granted prior to gaining a Certificate of Occupancy, but after the majority of the building has been constructed. This change is to provide some flexibility to disburse the business subsidy, while still meeting the statutory deadline of the TIF Spending Plan on December 31, 2025. Representatives from Willy McCoy's of Shakopee, LLC are present to give an update on the project, and Ehlers, the City's financial consultant, is present to answer any questions on the TIF Spending Plan. RECOMMENDATION Staff recommends the Port Authority approve the First Amendment for Private Development Between Rosemount Port Authority and Willy McCoy's of Shakopee, LLC. Page 5 of 23 RS230-66-967219.v5 FIRST AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT BY AND BETWEEN ROSEMOUNT PORT AUTHORITY AND WILLY MCCOY’S OF SHAKOPEE, LLC This Document Was Drafted By: KENNEDY & GRAVEN, CHARTERED (RHB) 150 South Fifth Street Suite 700 Minneapolis, MN 55402 (612) 337-9300 Page 6 of 23 1 RS230-66-967219.v5 FIRST AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT This First Amendment to Contract for Private Development (the “First Amendment”), is made as of the _______ day of _______________, 2024, between the Rosemount Port Authority, a public body corporate and politic under the laws of Minnesota, having its principal office at 2875 145th Street W., Rosemount, Minnesota 55068-4941 (the “Port”), and Willy McCoy’s of Shakopee LLC, a limited liability company under the laws of Delaware, having its principal offices at 515 165th Avenue, NW, Andover, Minnesota 55304 (the “Developer”). Witnesseth: WHEREAS, on January 16, 2024, the Port approved a Contract for Private Development with the Developer for the development of a 7,500 sq. ft. restaurant and tavern with a rooftop patio and upstairs bar and banquet area (the “Project”); and WHEREAS, the Port and the Developer desire to amend the Contract for Private Development in recognition of certain delays and other changes in the project. NOW, THEREFORE, in consideration of the foregoing premises and the mutual obligations set forth in this First Amendment, the Port and the Developer hereby agree as follows: 1. In this First Amendment, unless otherwise noted, underline and strike-through text shall be used to indicate amendments to the Contract for Private Development. Underline text shall indicate new language, and strike-through text shall indicate removed language. 2. Section 1.1 Definitions of the Contract for Private Development is amended as follows: “Minimum Improvements” means the construction of a 7,500 sq ft. restaurant and tavern with a rooftop or ground level patio consistent with the Construction Plans on the Property (the “Project”). After completion of the Minimum Improvements, the term shall mean the Property as improved by the Minimum Improvements. “Satisfactory Progress to Completion” means the certification to be made by the City’s building official after all rough-in inspections for plumbing, utilities, framing and electrical work on the Minimum Improvements have been completed and passed, and the building shell is completed, and the roofing structure and membrane are installed. 3. Section 3.1 of the Contract for Private Development is amended as follows: Section 3.1. Acquisition of the Property. The Developer has entered into a purchase agreement regarding the Property and agrees to close on the transaction and obtain fee title and possession of the Property by no later than July 30, 2024 April 30, 2025. 4. Section 4.3 of the Contract for Private Development are amended as follows: Section 4.3 Commencement and Completion of Construction Satisfactory Progress to Completion. Subject to Unavoidable Delays and the Port’s timely approval of the Construction Plans, Page 7 of 23 2 RS230-66-967219.v5 and any delays in the Developer’s receipt of the City’s approvals, the Developer shall commence construction of the Minimum Improvements by no later than August 30, 2024 April 30, 2025. Subject to Unavoidable Delays, the Developer shall have achieved Substantial Completion Satisfactory Progress to Completion of the Minimum Improvements by no later than December 20, 2025. All work with respect to the Minimum Improvements to be constructed or provided by the Developer on the Property shall be in conformity with the Construction Plans. Following written report thereof from the Port, the Developer shall make such reports to the Port regarding construction of the Minimum Improvements as the Port deems necessary or helpful in order to monitor progress on construction of the Minimum Improvements. 5. Section 5.3 of the Contract for Private Development is amended as follows: Section 5.3. Conditions Precedent to Financial Assistance. Notwithstanding anything in this Agreement to the contrary, the Port shall not be obligated to pay the Financial Assistance to Developer until all of the following conditions precedent have been satisfied: (a) The Developer has acquired the Property as of August 30, 2024 April 30, 2025; (b) The Developer and the Port have executed this Agreement and it has been recorded in the County land records; (c) The Developer has demonstrated to the Port that it has incurred Qualified Costs in at least the amount of $500,000; (d) The Certificate of Substantial Completion has been issued Satisfactory Progress to Completion has been achieved by December 20, 2025; (e) The Developer remains eligible for receiving a business subsidy under the Business Subsidy Act; and (f) There has been no Event of Default on the part of the Developer which has not been cured. When the above conditions have been satisfied, the Port will disperse the Financial Assistance to the Developer. The Developer understands and agrees that all Spending Plan TIF must be spent by December 31, 2025. To the extent the Spending Plan TIF is not spent by December 31, 2025, the Port shall have no further obligation to make any additional payments under this Agreement. 6. Section 10.1(a) of the Contract for Private Development is amended as follows: (a) Failure by the Developer to acquire the Property in fee by August 30, 2024 April 30, 2025 or failure to satisfy any other condition precedent specified in section 5.3 of this Agreement. 7. Except as amended in this First Amendment, all of the provisions, covenants, terms and conditions of the Contract for Private Development shall remain unaltered and in full force and effect. Page 8 of 23 3 RS230-66-967219.v5 8. This First Amendment may be executed in any number of counterparts. All such counterparts will be deemed to be originals and will together constitute but one and the same instrument. * * * * * * * * * WILLY MCCOY’S OF SHAKOPEE, LLC By __________________ STATE OF _____________ ) ) ss. COUNTY OF ___________ ) The foregoing instrument was acknowledged before me on this ___ day of ____________, 2024, by __________________, the __________________ of Willy McCoys of Shakopee LLC, a Delaware limited liability company, on behalf of the company. IN WITNESS WHEREOF, I have set my hand and my official seal this ___ day of _____________, 2024. Notary Public Page 9 of 23 4 RS230-66-967219.v5 IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed as of the date first above written. ROSEMOUNT PORT AUTHORITY By ______________, By _____________, STATE OF MINNESOTA ) ) SS. COUNTY OF _____________ ) The foregoing instrument was acknowledged before me on this ____ day of _________________, 2024, by __________________, the ___________ of the Rosemount Port Authority, a public body corporate and politic under the laws of Minnesota, on behalf of the Authority. IN WITNESS WHEREOF, I have set my hand and my official seal this ____ day of ____________, 2024. Notary Public STATE OF MINNESOTA ) ) SS. COUNTY OF _____________ ) The foregoing instrument was acknowledged before me on this ____ day of _________________, 2024, by __________________, the __________________ of the Rosemount Port Authority, a public body corporate and politic under the laws of Minnesota, on behalf of the Authority. IN WITNESS WHEREOF, I have set my hand and my official seal this ____ day of ____________, 2024. Notary Public Page 10 of 23 A-1 RS230-66-967219.v5 EXHIBIT A The property subject to the foregoing First Amendment to Contract for Private Development is as follows: [add platted legal description] 4865-3537-5316, v. 1 Page 11 of 23 EXECUTIVE SUMMARY Port Authority Regular Meeting: December 17, 2024 AGENDA ITEM: OMNI Business Subsidy Request AGENDA SECTION: NEW BUSINESS PREPARED BY: Eric Van Oss, Economic Development Coordinator AGENDA NO. 7.b. ATTACHMENTS: Financial Request Memo - OMNI Final, Rosemount- TIF-Application-Riveter Real Estate LLC APPROVED BY: LJM RECOMMENDED ACTION: Motion to approve the grant request and direct staff to move forward with a Business Subsidy Agreement. BACKGROUND Staff has been working with Omni Farm Winery on a new expansion project adjacent to their existing Rosemount location. The Developer requested $500,000 in excess, unobligated tax increment assistance to pay for site improvement costs to offset the high costs of construction. A representative from Omni will be in attendance to brief the Port on the project proposal and answer questions. The City's financial consultant has conducted a financial analysis of the request and will be in attendance to present the findings to the Port. In December 2022, the Rosemount Port Authority created a spending plan for the Tax Increment Financing Downtown Brockway District. Under state statute, the spending plan gives the Port temporary authorization to transfer unobligated tax increment to provide financial assistance in any form to private development consisting of the construction or substantial rehabilitation of buildings, which will create or retain jobs in the State. The statute requires private development to commence no later than December 31, 2025. The proposed development by Omni Farm Winery fits within the requirements of the spending plan and aligns with the City's long vision and strategic goals. The Port identified this spending plan as a unique and timely tool the City can use to foster new business growth and investment in the community. The Port is being asked to direct staff to begin work on a Business Subsidy Agreement with Omni Farm Winery. This request is over $250,000 and requires a public hearing per state statute. The Port will be asked to hold a public hearing on the business subsidy request and approve the final Business Subsidy Agreement at a later date. RECOMMENDATION Staff recommends the Port Authority approve the grant request and direct staff to move forward with a Business Subsidy Agreement. Page 12 of 23 SOURCES Amount Percent Private financing 1,731,000 68% TIF 500,000 20% Equity 300,000 12% TOTAL SOURCES 2,531,000 100% USES Amount Percent Acquisition Costs 950,000 38% Construction Costs 1,385,000 55% Equipment 111,000 4% Professional Services 85,000 3% TOTAL USES 2,531,000 100% Page 13 of 23 ▪ ▪ ▪ ▪ ▪ Page 14 of 23 Rosemount Tax Increment Financing Policy CITY OF Rosemount Tax Increment Financing Application GENERAL INFORMATION: Business Name: Date: Address: Type (Partnership, etc.): Authorized Representative: Phone: Description of Business: Legal Counsel: Address: Phone: FINANCIAL BACKGROUND: 1. Have you ever filed for bankruptcy? 2. Have you ever defaulted on any loan commitment? 3. Have you applied for conventional financing for the project? 4. List financial references: a. b. c. Riveter Real Estate LLC 10/28/2024 14962 64th Avenue N Maple Grove, MN 55311 LLC Allana Walsh 612-910-4279 Real estate company renting to commerical operations. Erin Johnsen - Garner, Ginsburg & Johnsen, P.A. 333 Washington Avenue N.Suite 300 Minneapolis, MN 55401 612-259-4807 No No Yes, in process Derek Boeve - Minnwest Bank Justin Walsh - CFO OMNI Winery & Taproom Zachary Ward - COO OMNI Winery & Taproom Page 15 of 23 Rosemount Tax Increment Financing Policy 5. Have you ever used any business subsidy before? If yes, where and when? PROJECT INFORMATION: 1. Location of Proposed Project: 2. Amount of Business Subsidy Assistance requested? 3. Why the need for Business Subsidy Assistance: 4. Present ownership of site: 5. Number of permanent full-time jobs created as a result of project. Please include projected wage levels/ranges. 6. Estimated annual sales:Present: Future: 7. Market value of project following completion: 8. Name and address of architect: 9. Anticipated start date:Completion Date: No 15675 Biscayne Ave Rosemount, MN 55068 $500,000 To update buildings on the site to provide for a reputable winery and event venue for lease. David E and Lee Ann Wachter Event Manager $75k Taproom GM $75k + Constructions Jobs 0 $500,000 $2,000,000 Lampert Architects 420 Summit Ave, St Paul, MN 55102 02/01/2025 08/31/2025 Page 16 of 23 Rosemount Tax Increment Financing Policy FINANCIAL INFORMATION: 1. Estimated project related costs: a. land acquisition $ b. site development c. building cost d. equipment e. architectural/engineering fee f. legal fees g. off-site development costs TOTAL ESTIMATED COSTS 2. Source of financing: a. private financing institution $ b. tax increment/abatement funds c. other public funds d. developer equity TOTAL ESTIMATED SOURCES (Should equal Total Estimated Costs) What type of business assistance requested? Tax Increment Financing Economic Development Tax Abatement Other: Completed forms and questions can be sent to Eric Van Oss at eric.vanoss@rosemountmn.gov 950,000 427,000 $958,000 $111,000 $75,000 $10,000 $2,531,000 $1,731,000 $500,000 $300,000 $2,531,000 X Page 17 of 23 EXECUTIVE SUMMARY Port Authority Regular Meeting: December 17, 2024 AGENDA ITEM: 2025 Community Development Block Grant (CDBG) Allocation AGENDA SECTION: NEW BUSINESS PREPARED BY: Adam Kienberger, Community Development Director AGENDA NO. 7.c. ATTACHMENTS: Estimated FY 2025 funds letter_RM APPROVED BY: LJM RECOMMENDED ACTION: Motion to recommend City Council adopt a resolution approving Rosemount’s 2025 CDBG application as presented. BACKGROUND Annually, the City receives federal Community Development Block Grant (CDBG) funds which are distributed by the Dakota County CDA. The City was recently informed by the Dakota County Community Development Agency (CDA) that our estimated allocation for Program Year 2025 (July 1, 2025 – June 30, 2026) is approximately $41,778. In 2024 our estimated amount was $50,026 in Community Development Block Grant (CDBG) funds, which were allocated to the Home Improvement Loan Program. To secure the grant money that is available, the city must prepare and submit an application that specifies eligible activities or projects to which the city intends to allocate the available funding. A completed application is due in January accompanied by an approved City Council resolution. The final allocation amount may change as HUD finalizes their budget process over the next several months. Proposed Activities City staff is proposing that the estimated $41,778 be allocated across two activities for 2025 – Home Improvement Grant Program, and Planning Activity – Downtown Framework Update. Home Improvement Loan Program ($11,778) The Home Improvement Loan Program is a program administered by the CDA to benefit low/moderate income households in Rosemount making eligible improvements to their homes. This program was funded last year and grants us the maximum opportunity to benefit a wide audience in Rosemount and meet HUD’s spenddown requirements in a timely manner. Some program details include: The Home Improvement Loan Program assists low- and moderate-income homeowners with making repairs and improvements to their homes. Page 18 of 23 Home Improvement Loans are commonly used for: • Roof replacement • Furnace replacement • Electrical and plumbing repairs • Insulation • Improvements for special needs, such as ramps, bathroom or kitchen modifications Home Improvement Loans feature: • Zero percent interest • No monthly payments • Repayable when ownership changes or you move from the property. You may be required to repay the loan if you refinance your home or take out a home equity loan. • $15,000 loan minimum; $25,000 loan limit In order to ensure we continue to receive our allocation, cities are required to spend down these funds within four years, or they can revert to the CDA for reallocation to active programs. The Home Improvement Loan Program is currently Rosemount’s most effective program for protecting and maintaining existing naturally occurring affordable housing. The city recently entered into a preliminary agreement with the Dakota County CDA to utilize a portion of our Local Affordable Housing Aid (LAHA) to further bolster this program. Planning Activity – Downtown Framework Update ($30,000) Originally adopted in 2004 and updated in 2017, the Development Framework for Downtown Rosemount was created to as a planning tool to be reflective of the community’s vision for development and redevelopment opportunities in the downtown core. From the 2017 update (located on the city’s website): The purpose of the Framework is to create and maintain Downtown in a manner consistent with the community vision. The Framework identifies and guides actions needed to achieve the vision. This update focuses on the section of the Framework that relates to redevelopment within Downtown. The update is a guide for public and private investment in Downtown, and it provides an updated description of the type and character of development desired for this area. Staff is proposing a review of this document occur in late 2025/early 2026 as we prepare for the larger 2050 Comprehensive Plan update in mid-2026. This Downtown Framework will be used as a more in- depth look at Rosemount’s downtown development opportunities and improvements ahead of the 2050 Comp Plan. Page 19 of 23 RECOMMENDATION Staff is requesting Port Authority recommend City Council pass a resolution approving the City’s 2025 CDBG allocation funding the Home Improvement Loan Program and Downtown Framework Update activities. Page 20 of 23 November 14, 2024 Ms. Adam Kienberger City of Rosemount 2875 145th Street W. Rosemount, MN 55068 RE: CDBG Fiscal Year 2025 Allocation Estimate Dear Mr. Kienberger, Dakota County receives an annual allocation of Community Development Block Grant (CDBG) funds, which is a federal program administered by the Department of Housing and Urban Development (HUD). The program is designed to assist local governments with various community development projects and programs that primarily aid low- and moderate-income residents. Dakota County is considered an “Entitlement County”, and, as such, receives an annual allocation of federal CDBG funds. The Dakota County Board of Commissioners has chosen to allocate the CDBG funds amongst the various cities and townships in the County, as well use the funds for certain County programs. The Dakota County Community Development Agency (CDA) administers this program on behalf of Dakota County. Each year, the city’s CDBG allocation is rebalanced to account for updated information in the American Community Survey provided by the Census Bureau for each city. Per HUD rules, the CDBG allocation is based on three factors: a community’s population, the number of people in poverty, and the number of overcrowded housing units. Each city receives a percentage of the annual Dakota County CDBG allocation based on the three factors. Because these factors change over time, the allocation each city receives will change over time. The CDBG allocation Dakota County will receive for Program Year 2025 is not yet known and won’t be known until Congress passes and the President approves the Federal Fiscal Year 2025 federal budget. However, we believe it is prudent for each city to anticipate that the County will receive a similar amount to what was received for Program Year 2024, which was $1,873,895. The final Dakota County CDBG allocation affects the amount each city will receive for Program Year 2025. This amount may be more or less than what your city received for 2024. With that in mind, the estimated allocation for Rosemount for Program Year 2025 is $41,778. Please provide a contingency plan in your CDBG Program Year 2025 application that specifies which program(s) will receive more or less funding based on the final allocation. Please note that funding for any public service activities that the city may choose to fund with CDBG may be further reduced to ensure that the amount used for public services does not exceed 15 percent of the total Dakota County CDBG allocation. Page 21 of 23 If you have any questions, please feel free to contact me at (651) 675-4464 or mdykes@dakotacda.org. Best Regards, DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY Margaret M. Dykes Asst. Director of Community and Economic Development Page 22 of 23 EXECUTIVE SUMMARY Port Authority Regular Meeting: December 17, 2024 AGENDA ITEM: Project Updates AGENDA SECTION: OLD BUSINESS PREPARED BY: Eric Van Oss, Economic Development Coordinator AGENDA NO. 8.a. ATTACHMENTS: APPROVED BY: LJM RECOMMENDED ACTION: None BACKGROUND SA/Speedway: Wells Fargo will be in possession of the property on about Dec. 18th. It is staff's understanding that Wells Fargo, as owner, is retaining CBRE to serve as management. Staff contact information has been provided to Wells Fargo and CBRE, so staff expects CBRE will reach out to the City within the coming weeks about next steps. ISD 196: A groundbreaking for the new middle school was canceled in November, but construction has begun on the site. KPD Inc.: A site plan review was approved by the PC. The project is intended to utilize three parcels in the Biscayne Business Park for a multi-building development to house up to 30 flexible warehouse spaces for lease to individual tenants and users. Beirut Restaurant: Beirut Restaurant will be relocated from West St. Paul to Rosemount. They will be located near the Aldi grocery store. This location will offer fast-casual counter service with a heavy focus on catering, ready-made products, and carry-out/take-home services. Permits have been issued and work is occurring on the interior. Staff is working with the owners to plan a ribbon cutting. Mid America EDC: Staff attended the Mid America EDC Best Practices Conference. The agenda was focused on large site development, downtown revitalization, international business attraction, and work force development. RECOMMENDATION Page 23 of 23