This transcript is from the **Cottage Grove Economic Development Authority (EDA)** meeting on November 8, 2022. Based on the provided list of officials and the context of the dialogue, I have identified the speakers below. *** **[00:00] Mayor Myron Bailey:** All right. Good morning. This is the November 8, 2022, Cottage Grove Economic Development Authority meeting, which I'm calling to order. And we have a full house here tonight, which is awesome to see. But we'll start officially with the roll call. Jamie. **[00:15] Jaime Mann:** Bailey? **Mayor Myron Bailey:** Here. **Jaime Mann:** EDA Vice President Dennis? **Eda Vice President Dennis:** Here. **Jaime Mann:** EDA Member Carrie? **Eda Member Carrie:** Here. **Jaime Mann:** EDA Member Chrome? **Eda Member Chrome:** Here. **Jaime Mann:** EDA Member Myers? **Eda Member Myers:** Here. **Jaime Mann:** EDA Member Scott? **Eda Member Scott:** Here. **Jaime Mann:** EDA Member Thiede? **Eda Member Thiede:** Here. **[00:35] Mayor Myron Bailey:** All right. And I don't think you've been here before with us, EDA Member Scott. Were you at a previous meeting with us? **[00:42] Eda Member Scott:** I was at one of the special ones. **[00:44] Mayor Myron Bailey:** Okay, the special ones. So, well, I guess I want to make it special to welcome you to the EDA. There you go. All right, next on our agenda is approval of the minutes. 3.1 is approval of the September 27, 2022, EDA meeting minutes. If there's no changes or questions, I'll need a motion. **[01:03] Eda Vice President Dennis:** A motion to approve the minutes. **[01:05] Mayor Myron Bailey:** All right, so I have a motion by EDA Vice President Dennis. **[01:08] Eda Member Carrie:** Second. **[01:09] Mayor Myron Bailey:** Second by EDA Member Carrie. All those in favor signify by saying aye. **(Group):** Aye. **Mayor Myron Bailey:** Opposed? Motion carries. Next is number four, business items. We have a few this morning, but we'll start with 4.1, which is the economic development update and business inquiry, and Gretchen will take us through this. Welcome. **[01:28] Gretchen (Staff):** Calling me "G"... the police chief says I'm a gangster because you call me G. **[01:34] Mayor Myron Bailey:** You prefer G? **[01:35] Gretchen (Staff):** I prefer G. The story behind the G, there you go. Um, good morning everyone. It's Election Day and it's a beautiful day in Cottage Grove. So as you said, Mayor—I know you're the EDA President, but I just can't help calling you Mayor, I'm sorry. **[01:50] Mayor Myron Bailey:** That's all right. **[01:51] Gretchen (Staff):** So we're going to start with some fun stuff. We have a couple of celebrations and ribbon cuttings that took place since the last time you all met, so we thought we'd just give you a complete update. The Oakwood Park renovation celebration on October 5th—that was a great event. The park was beautiful and people are very excited about it. The staff did a great job of showcasing everything that had been done. Cabinet Design Plus Cabinets—that’s a tough one for me to say—October 7th, Mayor Pro Tem Dennis and Councilmember Olson and City staff, City Administrator, were all on hand to welcome them to the city. It looks like it's going to be a great business and they're excited to be here. And then on October 12th, Mayor Pro Tem Dennis and City staff attended the Beader Eye Care grand opening and ribbon cutting. Again, a really nice business and they are happy to be in the city, or expanding in the city I should say. Beige Book—you have a comprehensive report in your board book. Overall, the economy is still doing pretty well. Most of the industries are doing okay. Office vacancy is still higher, which is not unexpected, but generally most of the businesses are reporting that they're doing okay. Supply chains are still issues, construction costs are still issues, and of course interest rates are still issues, but there's a detailed report in there and we'll be happy to answer any questions on it after you review it. Just a couple of things business-wise: Renewal by Andersen—the foundation of plumbing underground work has begun on their expansion. So I think you've noted that sort of their fourth expansion, it's amazing. And then of course North Point Cottage Grove Logistics Park building number one and building number two are moving along quickly and they think they'll probably have at least one lease by the end of the year, but they'll be ready to go in the spring. Hemingway Industrial Center—a couple of pictures for you. The permits for both buildings have been issued and the footing and foundation work is underway for both of them. Leafline Labs—you know they're expanding and the panel walls are being installed and they worked over the weekend of 10/29 to make sure that the roof was ready for winter conditions, which of course will set in soon. So it's moving along quickly. Park Place Storage building permit plans for their fourth building have been approved. Cottage Grove Apartments are coming along quickly—we just took a picture yesterday of how far along they are—and they anticipate opening in the spring. And the same with The View Apartments, their wood framing has started and they're moving along quickly. So just a few short updates but things are still happening. And of course this is the news that we had maybe hoped not to get, but at 95th and Jamaica, Endeavor notified the City Administrator that they were not going to close on the property. And so there's been significant interest in that property, so we're meeting with folks, letting them see if they want to make an offer on the property itself. And the City Administrator and staff have a meeting even today with someone else interested. So while that was unfortunate, especially for the Wag property owners, hopefully they'll get a better deal. Happy to answer any questions on that really quick overview if you have them. **[05:35] Mayor Myron Bailey:** All right EDA members, any questions at all? **[05:38] Eda Member Carrie:** How's the yellow areas on the last map? **[05:41] Gretchen (Staff):** The yellow areas? Yes. The yellow areas are still property for sale, although the vast majority of it is owned by CP Rail with the exception of that 18.5 acres. And then the yellow to the right of the screen—CP Rail generally is only going to probably swap property with people because of their expansion with Kansas City Southern. Is it, Jennifer? So they're kind of in a holding pattern on their land. So that's, you know, it's for sale—some of it's for sale—but not really for sale because it's just something that they're concerned about with that expansion because it's such a large expansion and so many things are unknown for them. **[06:23] Eda Vice President Dennis:** Thank you, Mayor. Good morning, G. Do we have any idea of what our current percentage rate of vacancy is for commercial right now? **[06:33] Gretchen (Staff):** Commercial? I think the last time I checked it was at 3.4 percent. Now, not referring to the Business Park—commercially, you know, like Smoothie King sort of. Okay, 3.4 percent. But I can double-check it again. We're working on some other stuff with the Business Park and on some other projects on 80th Street Redevelopment which you'll see, so those will be numbers we'll run again. **[07:00] Eda Vice President Dennis:** Okay, thank you. **[07:02] Mayor Myron Bailey:** All right, any other questions? All right, next is probably an update. The Councilmember, Vice President, EDA Vice President Dennis and I went to MNCAR with some of our staff. Do you want to talk about that just briefly? **[07:22] Gretchen (Staff):** Obviously we were all there, and they had more than 700 attendees. The nice thing about it was that we had the opportunity to connect with new brokers and learn about projects. But we also—it's strange, you go to an expo to see the people you already know, right? And so we had a lot of discussions with folks, brokers that we already knew about projects that they're working on in the city, near the city, and the things that they're looking for. And so Jamie and I were following up with everybody after the event and already have folks interested in some of the properties in the city. As you rightly point out, Member Dennis, commercial space is hard to come by, and of course most of the commercial wants what they consider an ideal location. So it's challenging; we need actually more locations. But the MNCAR expo is good exposure for the city, and they get to interact with the staff and the Mayor, our Council, and you know, have the opportunity to talk about stuff. We think that the Mayor had a magic conversation that suddenly prompted somebody to want to meet with us, so we're betting it was there because it was just too coincidental. **[08:32] Mayor Myron Bailey:** Well, that one was a good one. And then I will mention, EDA Member Carrie, you were asking about some property in the Business Park and property kind of at the end down by NorthStar Sheets—16 or 18 acres, that one that you're noting on there. There is somebody that's interested in that property and they spoke with us. They're hoping that maybe even by the end of the year they might be able to do a closing on that property. So that would be another big spot in our Business Park—I'll say decent-sized spot in our Business Park—that will be creating jobs and tax base. **[09:08] Eda Member Carrie:** Are you referring to the 18.5 acres? **[09:10] Mayor Myron Bailey:** Yeah, that’s why I can’t remember... yeah, the one up in the very top there. 18.5. Yep, they're pretty sure they have a deal closed on it. So it was pretty cool for that broker to come up and have a conversation about what they're hoping to do. **[09:25] Gretchen (Staff):** So good. **[09:26] Mayor Myron Bailey:** All right, any questions on MNCAR? I will mention that we had—I have to mention this—we had the largest booth there. Matter of fact, we had a lot of people taking pictures, as you know, because of the size and type of booth that we created. So it's pretty awesome. 4.3: we've been kind of waiting on this one, which is great to see, so that's the hotel study update. **[09:50] Gretchen (Staff):** Members of the board, the EDA board approved moving forward with the hotel market study on August 9th. The team at HVS, which is a worldwide hospitality analysis company—they also do building, believe it or not—they did market interviews. So they interviewed people, businesses in the community; they interviewed sporting locations; they interviewed economic development agencies in the area, all with the intent of trying to figure out: is the City of Cottage Grove ready for another hotel potentially? And the good news is that based upon their interviews and the pattern of business development in the city, they found that the city could support a mid-scale or upper mid-scale limited-service chain-affiliated 90-unit hotel. And that's specific because it's not a luxury hotel, it's not necessarily an extended-stay hotel, it's somewhere in between. But the demand is there. They recommend focusing on the Highway 10/61 corridor to begin with because of the visibility, the businesses there, and you know, when folks stay in a hotel, they like to be able to go out to eat, so that makes sense. But as the city continues to grow, the Shops at Cottage View area and the Jamaica area are both primed to add another hotel at some point. I don't believe that's anything you probably didn't intuitively guess, but now you have the actual facts. So then we'll be able to send the completed report—which we anticipate we will get this week—to all the folks in the hotel business who've already expressed an interest in the report. And it was very nice to be at the MNCAR expo and have somebody randomly walk up and ask about a hotel and then turn around and have them say, "You're already doing a study? Golly, you guys are brilliant." It's like, well, see, look at that, we're brilliant. We'll take it. So it'll be neat. We're very excited about it. Good for the CVB, good for the city, good for visitors. Absolutely. And happy to answer any questions on that. **[11:53] Mayor Myron Bailey:** Any questions on this one? I guess not. All right, so we'll move then on to 4.4, which is the 80th Street Redevelopment appraisals. And speaking of 80th Street... **[12:05] Gretchen (Staff):** So we have a map here showing you what we're talking about today. 80th Street Green Village and MS-MNI—can't say that fast—they are both, they have both expressed an interest in selling their properties. And so that was a long-time discussion that the City Administrator has had with the EDA and City Council. Oh, we don't know exactly what we're going to do yet, obviously, but the first steps include conducting an appraisal on both of the properties, and both of the property owners have given their permission to do that. The City Administrator wanted to make sure that we also pointed out that we have applied to Washington County CDA for the Brownfield Assessment program to cover the Phase I environmental reports that will be due on both properties, and those will go hand-in-hand with the appraisals. Jamie's working on that project for us, and it's two separate applications and they're determining the eligibility for us. So it would be a good thing if we could get them both paid for. You received two quotes: BRKW Real Estate Valuation Services—they submitted a quote of $8,200 for your appraisal for both of the properties; and then Patchin Messner Valuation Counselors had a quote of $11,000 for the two appraisals. And there's a recommendation before you for your consideration, and happy to answer any questions on that. **[13:40] Mayor Myron Bailey:** Okay, EDA, any questions on the appraisal process? **[13:45] Eda Member Thiede:** Maybe can someone maybe count... how we work back from this? So obviously we as an EDA or the city want this to happen. That would lead to redevelopment of the property, increase in value, and eventually future tax revenue? **[14:05] Mayor Myron Bailey:** 100 percent. **[14:06] Eda Member Thiede:** Okay, just trying to connect all those. **[14:08] Mayor Myron Bailey:** Absolutely. And in some of the cases, if you think about it—nothing against the MSI business because obviously we want them to stay in Cottage Grove—but if you've noticed, the 80th Village Green Center has... it's getting pretty dilapidated and they're having a challenge keeping it filled. And part of the reason they're having somewhat of a challenge keeping it filled is because of how it's located there. Personally speaking, of course, there have been some plans out there about how we can redo this area to make it more easily accessible, both from a traffic standpoint and visibility standpoint. And that's really what this is all about—to start to put some of those properties together. And we do know for a fact—we just talked frankly about one, the hotel study as an example—but also some restaurants that want to be within Cottage Grove, and there's interest obviously in this particular area and some other areas right in the immediate vicinity. **[15:10] Eda Member Thiede:** One more: would the city or the EDA buy this land, or would we work with a partner and then have kind of a plan together and they would develop? **[15:20] Mayor Myron Bailey:** Good question. Depending on what the appraisal would come back at, maybe one or the other or a combination thereof. And the reason I say those—we don't really know. I mean, because if the appraisals come back and they're off the mark, or they come back at a decent mark—I'll say it the other way—and they go, "No, I want x amount of millions of dollars" or whatever, well, of course we're not going to... more than likely they're not going to do that. So that would be a different entity that would come out and do that. A lot of times it takes a long time. Matter of fact, I know the individual that worked with us to create the Walgreens area with that gateway and all that—it took years for that to be assembled. And so this isn't something, frankly, in my opinion, that's going to happen overnight. It'll take a while to kind of get things going. But the idea here is, depending on what the appraisals come back at, there might be a possibility that we would purchase it. But if anything, those appraisals are public, so the fact is an outside entity could come in and go, "Yeah, I want to buy those properties and I want to do it with this." Regardless, this sets the ball in motion for redevelopment. **[16:32] Eda Member Thiede:** Yes, absolutely. Critical area. **[16:34] Mayor Myron Bailey:** Yeah, yep. All right, seeing none, we'll need a motion and a second to move forward on the appraisal. **[16:42] Eda Member Thiede:** Motion to authorize the appraisal of 7155 80th Street South and 7130 East Point Douglas Road by BRKW Real Estate Valuation Services for the total cost of $8,200. **[16:58] Mayor Myron Bailey:** All right, so I have a motion by EDA Member Thiede. Do I have a second? **[17:03] Eda Member Myers:** I'll second that motion. **[17:04] Mayor Myron Bailey:** Second by EDA Member Myers. Any other comments? Seeing none, all those in favor signify by saying aye. **(Group):** Aye. **Mayor Myron Bailey:** Opposed? Motion carries. And then last thing under business items is the River Oaks interfund loan. And I believe Zach and Brenda are going to present this information to us. Thank you, Gretchen. **[17:28] Zac Dockter:** Good morning President and members of the EDA, thanks for having me today. As our River Oaks Golf Course GM would say and the Superintendent would say, the golf course is a living, breathing facility that needs constant care and attention and nurturing as well. If you think of the golf course as the body—or I'm sorry, the golf course is the body of the facility—you know, the heart would be the pump station and the irrigation pond, and then the blood vessels would be the irrigation system. So without all those systems in place, the golf course doesn't exist in the condition it is today. So a very important project we're talking about today. The objective of the River Oaks irrigation replacement project is to just simply replace the 1989 irrigation turf system. We're converting PVC piping which is, like I said, from 1989, so it's deteriorating rapidly. We're constantly repairing and replacing pipe in the ground and converting that to a high-density polyethylene piping, which is much more durable and has a 50-plus year life expectancy on it. We're converting to more efficient controlling systems—valves, controllers, wireless controllers, things of that nature—and then converting to more efficient mechanical systems, that pump system that I talked about earlier. The project schedule: we’ll start in the winter of 2023 if the bid is accepted. Right now we have a bid that City Council will be considering in December. If that is accepted, we would start in the winter of 2023 to start the pump station work, things that we can do in the winter. And then in July of 2023, we would actually start the irrigation system replacement, so start pulling pipe out of the ground and putting new pipe and valves and heads in. There would be no course closure. At times we would have to close a hole, so typically we would close a hole and then, you know, adjust rates accordingly or have people play an extra hole or whatever it might be, but there would be no course closure under this project schedule. And complete should be October of 2023. Some of the expected benefits: improving turf conditions, making sure we're spreading the water to where it needs to go, reducing water consumption considerably. Right now we're fairly inefficient with how we're operating just because the system is so aged. And of course, every time there's a break, thousands and thousands of gallons of water are lost. We don't know how much water is leaking underground; there could be a considerable amount leaking underground that we just don't know about. Most likely it is just because of the age of the system because until the water finds the surface, we can't find the leak and repair appropriately. Reduced energy costs—just by having a more efficient system, the pump runs less, operating systems run less. Reduced labor and material costs—this is a big one. We are spending tens of thousands of dollars in labor and equipment repairing the system. This fall, our Superintendent was at his wit's end trying to keep up with the repairs. Just being in the ground all the time is tough to do, and it takes away from other jobs that need to happen. So it means you end up having to staff up to pay an additional staff to be in the field while our other crews are out repairing the irrigation system. With this new system, we don't expect to be in the ground hardly at all for the first 10 years, and as far as replacing any pipe or broken pipe, we don't expect to be in the ground for 30 years, barring any kind of odd circumstances. Increased operational efficiencies—we'll be able to run these units from, like I said, wireless. We'll be able to turn them on and off as we need to, schedule with the weather better. We do have a smart controlling system now, but this should improve the heads with this new system. You know, they can just be zoned in to exactly where they need to go and irrigate only the turf areas that we need or irrigated turf only that we want irrigated, and leaving more of those rough areas a little less irrigated, using less water and ultimately conserving our water supply. And then once again, it's a 30-plus year irrigation system infrastructure. Once we put it in, we're done, and we hope to get at least 50 years out of the pipe for sure. The project budget: we're at about $2.5 million right now. We did go out to bid, like I said, Council will consider that in December. The proposed project funding is through an ED Trust Fund loan of $1.85 million, of which the intent is to issue a capital bond in 2025 or some future date—I'll let our Finance Director talk more about that if need be—to pay that back. So this is a temporary loan from the ED Trust Fund, and then the Water Enterprise would kick in $650,000. So the recommendation in front of you tonight by motion is to recommend City Council approve an interfund loan from the Economic Development Trust Fund to the Golf Course Fund at an interest rate of two percent for 15 years or until bonds are issued for the project in the future. Happy to answer any questions. **[23:05] Mayor Myron Bailey:** I know that there might have been some questions about how the interfund loan works by the EDA. So if our Finance Director Brenda, if you'd like to maybe talk a little bit through that. **[23:15] Brenda Malinowski:** Yes, good morning EDA President and members of the EDA. I'm happy to talk about the interfund loan here for the golf course irrigation replacement project. The interfund loan is an internal financing mechanism that cities use. We've used it in the past for some of our TIF funds with the ED Trust Fund, and the thought there is that we fund internally for these projects and then, in the case of TIF funds, we pay back that loan with future TIF revenues. With this project of $2.5 million, with the water conservation funds it's $650,000—so I just wanted to let you know that I think we have $65,000 there on the slide and the rest is this interfund loan from the ED Trust Fund of $1,850,000. Currently, the ED Trust Fund (Fund 286) has a cash balance of about $5.1 million, so it does have sufficient funds to loan over to the golf course for this project. We would anticipate that this would be a temporary loan and we would issue bonds in 2025 to repay this loan, and then what that allows is funds to go back into the ED Trust Fund to be used for other economic development projects. The reason that we're looking at the ED Trust Fund is when the golf course was built in 1994, the EDA at that point issued golf course revenue bonds for that project just because the golf course does initiate economic development in the city. The terms of the loan is the 15 years at two percent. That is similar to when we built the Public Safety/City Hall building back in 2012; we issued an interfund loan at that time for 20 years at one percent. And so it's kind of within that range of what we've done in interfund loans in the past. With that, I can take any further questions that you have on the interfund loan. **[25:10] Mayor Myron Bailey:** EDA, any questions on either the interfund loan or the short nature of the plan for the loan? **[25:18] Eda Member Thiede:** Yeah, I just want to confirm that it's an eligible use of the type of funds—that the sprinkler system is an eligible use of the EDA funds that we're providing to the ED Trust Fund loan? **[25:31] Brenda Malinowski:** Yes, it is our belief that that would be of that fund. **[25:35] Eda Member Thiede:** Okay, thank you. **[25:37] Mayor Myron Bailey:** Okay, questions anybody else on the EDA either for Brenda or for Zach? Okay, thank you Brenda. So EDA, before you then—I don't know if this isn't a public hearing... okay, I don't get to share with the EDA what I think about this? No? When would the appropriate time be to share this? The City Council meeting? Well actually, I don't know that it's on the consent agenda yet. Well, if we can let it at that particular time if you want to, you can speak on it because obviously there's an open forum piece of that, we can more than happily do that. Okay, no, I think she's going to switch it. So EDA, you've got the motion before you for this particular item. If there's no other questions or comments at this point, we'll look for a motion and a second. **[26:30] Eda Member Myers:** I'm open to put the motion forward to recommend the City Council approve an interfund loan from the Economic Development Trust Fund to the Golf Course Fund at an interest rate of two percent for 15 years or until the bonds are issued for the project in the future. **[26:48] Mayor Myron Bailey:** All right, so we have a motion by EDA Member Myers. Do I have a second? **[26:52] Eda Vice President Dennis:** Second. **[26:53] Mayor Myron Bailey:** Second by EDA Vice President Dennis. Any further discussion? All right, seeing none, all those in favor signify by saying aye. **(Group):** Aye. **Mayor Myron Bailey:** Opposed? Motion carries. Thank you, guys. Next on our agenda is open public hearings. There aren't any this morning. Six is other business. Before you, I just wanted to mention we have the EDA calendar, and I want to mention about the lunch and learn which is next Tuesday, November 15th, from 11:30 to 1:00 at River Oaks. One of the big things you may be hearing about because we'll be having hearings and open houses for the public is we have taken a large task of re-looking at all of our different ordinances, our land uses and all that to try to streamline it. When we were, as a Council, during a workshop, we were kind of going through looking at some land zoning throughout the city and realized we have some single-family where you could have multi-family and so on and so forth. So for whatever reason over the years, those things haven't been updated, and so we wanted to clean everything up. Clean up the ordinances, make them more simple and easy to navigate both for the general public but also for anybody that wants to develop within the City of Cottage Grove. So I mention that because that will be discussed a little bit at the lunch and learn. So if you are interested, please register. It is kind of a Chamber-run event with the City of Cottage Grove at the EDA. EDA comments? Any comments or requests from the EDA at this point? Seeing none, 6.3 was response to previous EDA comments—there isn't any. Seven is workshop—there isn't any. So before we look for a motion of adjournment, I'll just mention today is Election Day, as it was brought up earlier. So if you haven't had the opportunity to get out there and vote, I would encourage you to do it and make your voices heard for whoever you decide that you want representing you into the future. So with that, look for a motion to adjourn. **[28:55] Eda Member Scott:** Motion to adjourn. **[28:57] Mayor Myron Bailey:** All right, so we have a motion by EDA Member Scott. **[28:58] Eda Member Chrome:** Second. **[28:59] Mayor Myron Bailey:** Second by Mr. Chrome. All those in favor signify by saying aye. **(Group):** Aye. **Mayor Myron Bailey:** Opposed? We're adjourned. Thank you.