[00:00] **Mayor Myron Bailey**: Foreign foreign foreign foreign good morning uh this is the December 13th uh 2022 Economic Development [Authority] for the city of Cottage Grove which I'm calling to order. Uh Jaime, if you want to do the roll call? [00:15] **Jaime Mann**: EDA President Bailey? [00:16] **Mayor Myron Bailey**: Aye. [00:17] **Jaime Mann**: EDA Vice President Dennis? [00:18] **EDA Vice President Dennis**: Here. [00:19] **Jaime Mann**: EDA Member Carrie? [00:20] **EDA Member Carrie**: Here. [00:21] **Jaime Mann**: EDA Member Myers? [00:22] **EDA Member Myers**: President. [00:23] **Jaime Mann**: EDA Member Scott? [00:24] **EDA Member Scott**: Here. [00:25] **Jaime Mann**: EDA Member Crone? [No response] EDA Member Clausen? [00:27] **EDA Member David Clausen**: Here. [00:28] **Mayor Myron Bailey**: All right, thank you. Uh next on our agenda this morning is number three is approval of the minutes. 3.1 is approval of the November 8, 2022, EDA meeting minutes. If there are no changes or corrections, I'll look for a motion and a second. [00:40] **EDA Vice President Dennis**: Motion to approve the minutes. [00:41] **Mayor Myron Bailey**: All right, so we have a motion by EDA Vice President Dennis. Do I have a second? [00:44] **EDA Member Scott**: I'll second it. [00:45] **Mayor Myron Bailey**: Seconded by EDA Member Scott. All those in favor signify by saying aye. [00:48] **Multiple Speakers**: Aye. [00:49] **Mayor Myron Bailey**: Opposed? Motion carries. Next is four is business items. We'll start with 4.1 and that is economic development update and business inquiry, and G will take us through this one. [01:00] **Gretchen [Economic Development Staff]**: Good morning, everyone. Thank you so much. Before you today we're going to review the Beige Book. Um, I don't think anything in here will come as a surprise to you. Labor markets—employment grew slightly since the last report and total job openings have softened, but the demand for labor overall is healthy. Price pressures were strong since the previous report and most businesses reported final prices—they had to raise their final prices in October from the month earlier. In consumer spending, it grew slightly since the last report, but it still remains fairly high. In construction and real estate, commercial construction fell slightly since the last report and then in industrial and multi-family segments, they reported steadier activities and outlooks. And residential construction, it has slowed with single-family permitting levels notably below last year. And then in retail vacancies, some declined, and while office vacancy continues to increase—so people are still not back in the office full-time. So, and that's true of the Twin Cities in general. Manufacturing and agricultural activities increased moderately in manufacturing and the agricultural sector conditions remained strong through the harvest season and it was good to hear that most of the lenders reported that farm incomes had increased. And minority and women-owned business enterprises, they still continue to struggle with hiring and retention challenges even in the face of offering higher wages and benefits. So generally, it mirrors exactly what's happening here in Cottage Grove. Happy to answer any questions on that if you have them. [02:27] **Mayor Myron Bailey**: Nope, looks like we're good. [02:28] **Gretchen [Economic Development Staff]**: We are doing good and here's some fun projects. And Emily's here today so in case you have any other questions from planning. At Renewal by Andersen, the project is moving along—some photos here. The wall panels are being set. In Hemingway Industrial Park, the footing and the foundation work has been completed for both buildings and the on-site construction of the wall panels may have to wait until the spring. Planning's also reporting at Leafline Labs, the roof construction for the addition is being conducted on the weekends to get it finished quicker of course, and underground trade work has begun. Pizza Ranch—look at that, footings and foundation, so it's coming to life. Are complete with civil work commencing to beat the winter season—it's cold out there. Cottage Grove Apartments—the wood framing continues and the trade work is ongoing. So that's another new shot of it. And then with the View Apartments, construction of the wood frame portion of the building continues. Another good view of that. I'm happy to answer any questions and again Emily is here as well. [03:25] **Mayor Myron Bailey**: Any questions? Nope, looks like you did good. [03:27] **Gretchen [Economic Development Staff]**: I'm trying to keep it moving along. [03:28] **Mayor Myron Bailey**: Oh no, you're good. All right, so I guess we'll move to uh number 4.2 which is uh the Hotel Market Study. This is the exciting one, I know you've been waiting for it since August. I'm going to introduce Tanya Pearson. She's the Senior Managing Director of HVS Consulting and Valuation Services based in Pequot Lakes. Did I say that right? Yay, I passed the test. She's been there since 1994 and she's provided consulting and appraisal services for over 3,500 hotels—she only looks 21, that's amazing—and resorts in nearly every state in the U.S. as well as Canada, Mexico, and the Caribbean. She has a Bachelor's of Science in Hotel Restaurant and Tourism Management from the University of Denver and she's a designated member of the Appraisal Institute. Tanya, welcome. [04:09] **Tanya Pearson**: Good morning. Thank you everyone for allowing me to be here today. Appreciate you um allowing me to do some presentation and a brief overview of our Market Study that we conducted back in September of this past year. I thought I'd first just walk you through kind of the process that we took to um conduct this Market Study. Um, we do it on a phased approach so that the first phase loops into the next phase in our continued efforts to arrive at a conclusion and a set of forecasts. So the first step in our process was to do kind of a market evaluation based on site potential for a hotel on the market and where demand generators are located, where access might be most appropriate for a hotel, what complementary amenities are around the various potential sites, and so forth. We look at our variety of factors when we're considering potential sites for our property. Then we took a look at who the demand generators are for a hotel in the market, including interviewing commercial businesses, other sources of demand such as youth sporting groups, convention or meeting facilities in an area, and so forth. So we did conduct phone interviews and email surveys as well. Then we also would look at the existing supply of hotels in the market and where these demand generators are currently putting their guests up in the market that are coming to visit their business. Um, we also take into consideration additional supply coming into the market from the standpoint of new hotels either in the City of Cottage Grove or surrounding communities that may impact additional development. And then we arrive—based on all of that information as well as evaluating the economic and demographic statistics for the area and future outlook for development—we've arrived at a recommendation and a forecast of income/expense. So from the standpoint of site locations and driving around the market and evaluating where growth is currently occurring and based on land use forecasts for the community and so forth, we wanted to identify some potential site locations. In conversations also with Economic Development officials, we had identified kind of three potential site locations with the idea that having a hotel right along Highway 10 would be very important from an access and visibility standpoint. And then looking at kind of the three exits along Highway 10—I think some they have strengths and weaknesses with each of them. One of the the key factors though in our demand generator surveys was that the guests would like to have supportive amenities next to a hotel. So while you might have a complimentary breakfast at a hotel, they also want to have a place to go to dinner and they don't want to have to go in their car and drive five miles to go to that restaurant; they want something convenient. So um, for example, the location at 80th Street has um uh an—or the 80th Street interchange, excuse me—um has a variety of um restaurant options there as well as some retail. Jamaica Avenue, the next exit down, also has um retail and food and beverage. The food and beverage may be more fast food in nature at Jamaica Avenue so you know that could be viewed as a negative potentially for some hotel guests, maybe they want some more sit-down options. And then the third location would be Keats Avenue. And while there really isn't much development currently there, you know there are proposed plans and so forth for a larger development to occur at that location. And if those developments were to take place, then that location would be favorable for a hotel as well, certainly given its proximity to the business park and so forth with that location. So pluses and minuses kind of with each of them. I think having a hotel at one end or the other of the city as well is nice to be able to capture those guests either traveling south—you know, seeing a hotel at 80th Street—or heading north on Keats Avenue. Um, after identifying some of the sites, you know it was also based on kind of our demand generator interviews and we had placed phone calls as well as sent emails out to various individuals with many of the major employers in the market—and I've listed a few here: Renewal by Andersen, 3M, North Star Sheets, and so forth. And when we conducted these interviews, we asked them, "You know, give me an idea of how many room nights you need on a monthly or an annual basis? How long are these guests staying? What type of accommodations do they look for? What your price point is? Do you require meeting space or not? Do you have difficulty getting rooms? And then where do you currently stay?" Um, we also reached out to the wedding venues, the golf course, sporting associations and asked similar questions. Um, I would say what we're hearing from several of these is that um, you know while there are two properties in Cottage Grove, oftentimes there may not be availability at those or they're not the type of accommodations that they desire. They—many of them—indicated that they're brand loyal customers and so they want a franchise—a Marriott, a Hilton, InterContinental. They want some of the larger brands for their guests because they are, you know, loyal members of those affiliations. So that was an indication. They did state that because of that, and because of the lack of those types of accommodations in Cottage Grove, they do go up to Woodbury. Some didn't even mention that they stay closer to the airport just if they're coming in for a day or two; they might stay at the airport to be closer to leave town as well. So we did realize that there is some business that's being lost in Cottage Grove because of the lack of their required accommodations for their guests. Then we also looked at—based on those conversations and where they're saying they're sending their guests—we evaluated kind of a competitive set for a hotel if it were to be developed in Cottage Grove. So the red dots indicate the two properties that are located in Cottage Grove with the blue dots identifying a set of hotels in Woodbury. Represents a majority of the hotels up in Woodbury as well and roughly 10—10 properties in total. And it's a wide variety from a more budget-oriented Wakota Inn up to a full-service Sheraton Hotel. So there was certainly a wide range of, you know, where people could potentially stay that are doing business in Woodbury or coming to business—coming to Woodbury for business, excuse me. Um, we then conducted interviews with area hotels as well as ordered a Smith Travel Trend report, which is a national company that focuses on hotel reporting data. And this reflects a 10-year trend of how this set of 10 hotels—or excuse me, nine hotels because the Wakota Inn does not report—of nine hotels and how they've performed over the last 10 years. And what you'll see here is the um, you know it's obvious the dip when COVID happened and how significant of an impact that had on the hotel market. I think what's encouraging, however, is how quickly they have bounced back since the pandemic and there are many markets that haven't seen this recovery in the area. So it's—it's encouraging to see that business is coming back much quicker and it's at a higher rate point. So if you look at the dark blue line, for example, that indicates their average rate—those levels are already back to 2019 levels. So very encouraging. Same thing with occupancy as well; occupancy has recovered too on a year-to-date basis. So indicative of the amount of demand that exists in the market. I think it's important to point out that you do see a slight dip between '18 and '19 in terms of the occupancy and average rate. Part of that is the impact from the Super Bowl that had such a large impact on the greater metro area as a whole, but there was also two new hotels that opened in late '17 early '18 up in Woodbury. So it took a little bit of time for those rooms to be absorbed into the market. So in looking at the overall market, there are several things that we want to consider for new development. So we talked about the sources of demand and the strength of the hotel market based on the past performance of—of occupancy and average rate. We also look at economic trends from an economic and demographic standpoint and growth opportunities for the area in terms of expanding businesses. You know, the development of your business park and how much it's grown and is expected to grow in the future is a very important indicator. You know, your amount of permits and the amount of residential growth that you've had in the community and the outlook for retail sales is also a good indicator for us. Um, but we also need to be cognizant of new supply, and is there other hotels coming in that may take away some of this demand that we're talking about going to Woodbury. Um, in our conversations with other cities and surrounding areas and so forth, we surveyed—we only identified one new hotel coming into the market and that's in Hastings. Um, it's a boutique hotel, the Confluence Hotel, expected to open next year with 77 rooms. So a little bit different than what exists currently in the market. That's going to be more of a boutique type hotel with event space and a restaurant and so forth. But again, it's important to identify new rooms nonetheless. So based on all of these market factors, we've um uh also evaluated what the revenue potential might be for this market and what operating costs are based on unemployment levels and labor costs in the area. And then we also need to be cognizant of construction costs and you know, where they are right now is—I'm sure many of you are aware construction costs are very high these days and make—make projects like this, you know, challenging for sure. Um, but based on the feedback that we received in the market and our evaluation of what currently exists and what the demand generators are seeking for the community of Cottage Grove, our recommendation would be, you know, consideration of a mid-scale to upper mid-scale hotel limited service in nature. So what that means is fairly limited amenities. Um, a continental breakfast—or excuse me, not a continental but a complimentary breakfast in the morning, maybe offering a small meeting room. Based on the feedback that we had from the demand generators, there isn't a huge need for a lot of meeting space right now. Um, but certainly a smaller meeting room, maybe up to 50 people or so. And then other amenities might include, you know, a swimming pool because of the presence of the amount of youth sports in the community—that is a huge factor. Many, you know again, if—if a hotel doesn't have a pool on the weekends and you have all of these youth sports groups coming into the area, you know your hotel might be missing out on that—on that opportunity. So it's—it's very important and certainly the climate in our area too is—is favorable for anybody to want to escape to a pool or whirlpool. Um, based on the—again, the market dynamics, we would also recommend consideration of more double-bedded rooms at the property because of those um, the wedding groups that you receive at the two event centers in town. So you have a larger number of people per room typically with that. And also the sports teams with the families, you'd want—so again, having a little bit heavier inventory of double-bedded rooms I think would be important for this community. And when I'm talking about that mid-scale to upper mid-scale level of product, um, some brands to consider might be Fairfield Inn, Hampton Inn, Holiday Inn Express—those might be brands that you would recognize under that chain scale. Um, it—it might also be interesting to see the maybe combination of a dual-branded property. And we're seeing some smaller ones of these across the country being developed now too where you have a Fairfield and a TownePlace in one building. So you do have some extended stay rooms that are designed for people that are coming in for, you know, five nights or more that might be here for training or relocation or something that would need rooms. So it's kind of a combination of both offerings under one roof, but several of the brands do offer these dual-branded type combination properties as well. So something to—to consider. Um, but based on that recommendation, we've arrived at a forecast of income and expense. Um, the previous slide showed a range of about 80 to 100 rooms—that reflects the seasonality of the market, the week—weekday versus weekend demand in the market. Um, and you know, also just the operating efficiencies of a hotel—to have a property too much smaller than that makes it very challenging, particularly with a lot of fixed costs like insurance and property taxes and so forth. Um, so we have a database of comparable operating statements of similar type hotels, so we looked at other how other Hamptons, Fairfields, Holiday Expresses in similar markets to this perform. Um, and we've put together a forecast of income and expense. You'll see in this slide here that occupancy and average rate typically take anywhere from two to four to five years to stabilize in a hotel. Unlike office or retail, you know, you're—you're changing your occupancy on a daily basis, so it does take some time to build up that customer base with a hotel. And so we're expecting roughly three years to stabilize a property such as this. Um, so stabilizing right around 70 percent we feel comfortable within this market at that price point. Um, and we would envision kind of this property opening mid-2025 based on the amount of time for planning and approvals and construction time and seasonality and so forth. So um, you'll see here we're forecasting roughly um 27 percent earnings before income taxes, depreciation, and amortization. Um, and again this is based on how other comparable properties perform. Um, so just as far as kind of a wrap-up of what we've put together for you guys, um just some considerations. We certainly recognize that there was a very strong recovery in the competitive set coming out of COVID. I think that's indicative of the amount of demand generators you have, the diversity of the demand generators that you have. Um, and you know, the location of where Cottage Grove is—it's a high drive-in area as well. You have some leisure traffic coming off of the interstate. So and we saw a huge influx of leisure traffic the past two years, people looking to get away and so forth. But we also need to be cognizant of rising costs both from the standpoint of operating costs and labor, but also property taxes and just inflationary concerns and construction costs as well. Um, it's encouraging to—to developers to see that there aren't as many hotel brands in this market. I think it's a very attractive market from that standpoint, particularly given the amount of demand generators you have and also there's not other hotel projects proposed of a similar stature in—in that—in this area. Um, certainly the one concern though is with the rising construction costs—um, how—how do you make these projects feasible in today's times? And it certainly leaves an opportunity for communities such as yourself to potentially offer incentives to hotel developers to attract this type of development given those rising construction costs. But overall, we found Cottage Grove to be, you know, a very favorable community from the standpoint of all of the demand generators, how well the hotels and surrounding areas perform, and the level of growth that you're expecting in the future with your demand generators. So thank you very much. [19:16] **Mayor Myron Bailey**: Sounds good. Thank you for a great presentation. And just as a side note, when we talked to some developers or hotel uh people that do build hotels, your company was mentioned as one of the ones that they trust. Okay, so we're real happy to—that's part of the reason why you're here is we wanted to make sure that we provided them with data that's concrete and—and available. Uh, EDA have any questions at this moment? Yeah, EDA Vice President Dennis. [19:40] **EDA Vice President Dennis**: Thank you, Mayor. Not—not really questions per se I guess um comments or feedback, maybe maybe one question at the end but um. I'm curious with the different hotels that you mentioned by brand if any of those would um, you know provide an opportunity for restaurant space inside of the facility itself? Because we're—we actually have a gentleman here in—who's a Cottage Grove resident who's a—a very well-known Minnesota chef and he and his partners own 13 different restaurants currently. Okay, and so we've kind of had a um an interest from him you know, "Hey, if you guys get a hotel, you know would there be an opportunity where I could attach?" So that's my—my first question. [20:18] **Tanya Pearson**: Well, you know every brand is different in terms of what they allow and what they don't allow. You know, I would say when you're talking of the limited service scale that I mentioned, you know they're not going to be as open to having a hotel [restaurant] right in their lobby. But we certainly have seen them being connected via an enclosed walkway, you know that you might be able to be attached to a hotel. Um, so that is an option—you know, like the Homewood Suites by the Mall of America, there's a restaurant that's connected to that. It's—that's a limited service hotel but it does have a covered walkway so it's convenient—you know, it keeps guests out of the elements and so forth. But that's something that, you know, each brand unfortunately would be the one to—to dictate that. But you know, we've certainly seen it happen, but that's kind of the—the way that they make it work. They kind of remove it from—from their front entrance but still have it accessible to guests. [21:05] **EDA Vice President Dennis**: Okay, so I—I brought that up because you mentioned at least in one of the areas there was um considered maybe some negative consideration for the fact that we didn't have the type of sit-down dining that you know, they wanted. I think you call them demand generators. Um, so I was curious on that. And then the second um thing I'll bring up is um when she announced you, she talked about your education and background in tourism and so um are you aware that we have a convention and visitor bureau here called Discover Cottage Grove? [21:35] **Tanya Pearson**: Yes. [21:36] **EDA Vice President Dennis**: Okay, have you taken a look at that at all? [21:37] **Tanya Pearson**: I've seen the website and so forth, yes I definitely did. [21:40] **EDA Vice President Dennis**: What do you think? What do you think of it? Is there any pointers, tips? I mean since you got the background and connected with all this stuff is sure sure we've got you here. [21:47] **Tanya Pearson**: Yeah. Um, again it was several months that I looked at it to be completely honest with you, so I'd have to go back and refresh my memory. But I think from the standpoint of, you know, identifying, you know, all of your parks for example from what I recall, and the hotels that you do offer here and other events that go on and so forth throughout the community, you know I found it very informative. As far as suggestions and so forth, I'd have to go back and take a look to be completely honest with you. [22:15] **EDA Vice President Dennis**: Okay, well if you ever get any time I would appreciate it. [22:17] **Tanya Pearson**: Absolutely, I'd be happy to get back to you. [22:18] **EDA Vice President Dennis**: That would be awesome. But we—we kind of brought that back from Las Vegas okay when we went out and a bunch of the investors were—were asking, "Do you guys have a lodging tax?" And so we do now, and we utilize the funds to—to fund this great opportunity so. [22:33] **Tanya Pearson**: And I think that's a wonderful thing for hotels to benefit from as well. You know, because again they're collecting that from the guests, so it's not a direct expense out of them. Um, and oftentimes guests don't even pay attention to those things. You know, they—they sign their bill, they know there's going to be a lot of taxes at the end, but to be able to benefit from a—you know, a government entity promoting the community afterwards is—is huge for them. [22:56] **EDA Vice President Dennis**: Okay, well we're working hard so thank you. [22:58] **Tanya Pearson**: Thank you. [22:59] **Mayor Myron Bailey**: Mayor, quick question for you and then I'll see if anybody else has any. Um, so when you were talking about this, you're looking at a branded 80 to 100—I—I know you used the 90 as kind of the midpoint. Yes. Was that including like for example, we have like a Country Inn & Suites and then we have [the Wakota]... if one of them were to go out or be redeveloped, uh would that change that then if—if you pulled one of those out of the market so then it would be possibly two yeah hotels? [23:25] **Tanya Pearson**: Well, I would think that um, you know there's certainly potential if one were to leave the market to maybe expand the size of this property or down the road add another hotel inventory, absolutely. Okay, yep perfect. [23:36] **Mayor Myron Bailey**: EDA any questions for her at this point? All right, thank you. [23:42] **Tanya Pearson**: Thank you. [23:43] **Mayor Myron Bailey**: Thank you. Do you need any votes or anything or we're good? Are you going to do it... there we go. I kind of figured there was one coming here. All right, so uh EDA what we're looking for is to receive and approve the report as it's been presented to us and then we're going to be providing this out to some of the end users to use as a guide for bring them to Cottage Grove from an interest standpoint. [24:04] **EDA Member Myers**: Yeah, I can make a motion uh to receive and approve the report as presented. [24:08] **Mayor Myron Bailey**: All right, so I have a motion by EDA Member Myers. Do I have a second? [24:12] **EDA Member Carrie**: A second. [24:13] **Mayor Myron Bailey**: Second by EDA Member Carrie. Any other discussion? Seeing none, all those in favor signify by saying aye. [24:19] **Multiple Speakers**: Aye. [24:20] **Mayor Myron Bailey**: Opposed? Motion carries. Thank you, thanks for coming. All right and then uh last under business items 4.3 is the CDA pre-development grant application and G has taken us on this one too. [24:32] **Gretchen [Economic Development Staff]**: Thank you, sir. Before you um you see a map uh discussing uh the fact that staff has identified a project that's eligible to submit to the finance fund in Washington County CDA. If it were approved, it would be for a comprehensive utility servicing study for future development or sale of the 3M owned parcels shown on the map. It would also include development of an area-wide stormwater management plan. And as a part of the future realignment of County Road 19 and 100th Street, it would include local roadway networks and connections to be reviewed. And finally, while the land is guided generally industrial, there is a commercial node that's anticipated potentially at Innovation and Highway 61, and so the study would look more closely at the options for the commercial node. So four elements of that study. Total cost for the project is $85,000. The CDA request for this one-to-one match would be $40,000 from them and with the remaining $45,000 coming from the ED trust fund. If approved, staff and the City Administrator would recommend that the team at Bolton & Menk be hired to do the study, which will take approximately 16 weeks to complete. And in your packet was a copy of the application as well as a map of that—of the area. And there's a recommendation before you, but we're happy to answer any questions if you have them about it. [25:52] **Mayor Myron Bailey**: Fantastic. Any questions by the EDA for Gretchen? [25:55] **EDA Member Scott**: I guess not... there we go. I have a question. [25:58] **Mayor Myron Bailey**: Sorry, yes. [25:59] **EDA Member Scott**: The endeavor would be to... is it 3M owned land, did I gather that correctly? [26:03] **Gretchen [Economic Development Staff]**: It is. [26:04] **EDA Member Scott**: And the purpose of it would be to... what's the purpose? [26:07] **Gretchen [Economic Development Staff]**: Purpose would be... so they're—they're a willing participant in the study to be undertaken because with this study, it will show the—it will address some of the underlying issues and the due diligence related to the property, making it obviously more uh saleable for them or developable depending on, you know, what they decide to do. But I would guess they would probably sell it at some point. But the idea is—and—and certainly the City Administrator can comment more on it—all of that engineering work and the things that would be a part of this study are important because generally investors need to see what the land could be used for, and this would show them that these things would—would be addressed as a part of that process. Do you have anything else to add? [26:54] **Jennifer Levitt**: Mayor, members of the EDA. When we've looked at the 3M parcels as part of our comprehensive plan in years past, 3M was providing their own sewer and water system to their own development within their property. And since last December when their hazardous waste incinerator ceased operating and they are going through the decommissioning process, 3M now has a different outlook on how they could develop their parcels with that change. And they wouldn't be servicing it from their own sanitary sewer and water system. And so at that point, the City of Cottage Grove would need to provide those utilities and we have not undertaken that study to provide utilities to their 320 acres in the past. And so this would be new for us to look at how we could service that. And so it really dovetails right in with that 100th Street realignment. And we have been in communication with 3M about this project; they're excited about it. We've also provided them a proposal for their medical spin-off to potentially look at this property. But we also know that it's going to have a high interest level in the market because industrial and commercial spaces that are over 100 acres are very much needed in the metro. So it'd be a very competitive piece of property to have sewer water to, so the study is the first element for us to start undertaking that activity. [28:10] **Mayor Myron Bailey**: And I should just mention too, because a lot of people do ask this question—even though I—it just barely touches this property—but there is no current city sewer water in the Langdon area where the old Majestic Ballroom that's still sitting there is sitting. So having all this kind of tied together will actually, you know, I think facilitate development or redevelopment of the—the old Majestic site in areas. And you saw kind of a schematic plan on the—on the screen of what that area would look like. So it kind of touches that area. [28:40] **EDA Member Scott**: Yeah, I just like to—I guess for anybody watching or inquiring, I like to connect the dots of, you know, so future development will lead to increase in property values, will lead to increase in property taxes, and that's why we're paying for this, making this investment now. So yeah, absolutely makes sense. [28:57] **Mayor Myron Bailey**: Yep. And it is good news because we never thought we were going to see 3M in the past, as—as our administrator mentioned, was not willing to sell or entertain this area. And so we never really anticipated this area being an opportunity for us. We always wanted it to be but never had the ability to do it. And now their philosophy and ideas have changed and so we're pretty excited about that. And I know the county is too from a CDA standpoint. So yeah. [29:21] **EDA Member Scott**: There's one other question. So does that—with that at any point would they do any like soil testing or wastewater testing or anything in that area? You know, 3M so... [29:31] **Mayor Myron Bailey**: Well, I believe they would, correct Jennifer? [29:33] **Jennifer Levitt**: Mayor, members of the EDA. Depending on how the property size is uh developed, there'd either be an EAW to start the environmental. Uh, the EAW would then tell you based upon, you know, um, you know if it's soil or traffic or invasive species or—um, wetlands—if they needed to do a more formal EIS work with that. So it really depends upon the size of the development um and what would be done there, but clearly environmental work would take place with any uh redevelopment or development of that raw land. [30:08] **Mayor Myron Bailey**: Okay. Any other questions? All right, seeing none again we have two different motions before you that we're looking for. If somebody wants to take uh number one. [30:17] **EDA Vice President Dennis**: I'll take number one, Mayor. All right, a motion to approve resolution 2022-012 supporting the pre-development finance fund grant submittal. [30:25] **Mayor Myron Bailey**: All right, so we have a motion by EDA Vice President Dennis. Do I have a second? [30:28] **EDA Member Scott**: Second. [30:29] **Mayor Myron Bailey**: Second by EDA Member Scott. Any other discussion? Seeing none, all those in favor signify by saying aye. [30:33] **Multiple Speakers**: Aye. [30:34] **Mayor Myron Bailey**: Opposed? Motion carries. And we'll look for number two now. [30:37] **EDA Member Scott**: I understand... sure um, I make a motion that we approve the application submittal to the Washington County CDA Finance Fund. [30:46] **Mayor Myron Bailey**: All right, so I have a motion by EDA Member Scott. Do I have a second? [30:49] **EDA Member Myers**: Uh, I'll second that motion. [30:50] **Mayor Myron Bailey**: Uh, we have a second by EDA Member Myers. Any other discussion on this one? All right, seeing none, all those in favor signify by saying aye. [30:55] **Multiple Speakers**: Aye. [30:56] **Mayor Myron Bailey**: Opposed? Motion carries. Thank you. All right, uh next uh is five as public hearings. There are none this morning. Uh, six is other business um. The EDA calendar was in the packet of information. Uh, is there any EDA comments? I know we do have a couple updates that we asked about from a previous meeting, but any EDA comments today? All right. Uh, 6.3 is response to previous EDA comments and we did have two uh and uh the first one is commercial vacancy rates in Cottage Grove. Uh, uh G do you want to take that one? [31:33] **Gretchen [Economic Development Staff]**: I do and I don't have a slide for it. Uh, did you want me to pull up the actual um memo? [31:38] **Mayor Myron Bailey**: We can just report out, yeah that's fine. [31:40] **Gretchen [Economic Development Staff]**: You don't have to, it's in your report. And on the commercial vacancy rates, last time you had asked um what they were um and it was 3.4 in the business park/industrial area, but in the retail segment it's 15 percent but there's—there's a special note there. Um, there are three properties that have pending leases on them and if all those go through as we believe they will, the vacancy rate will be cut in approximately in half. So you'll be well below the metro average of 15.9 percent. It shows 15 percent right now but it—again, if those three pending leases close, you'd be at about seven percent right now. With it—without those having closed, your overall vacancy is still only uh 8 point—I believe was 8.3 percent in the city. And then office there's um—I mean the interesting thing about that report is—is you really just don't have that much available. So redevelopment and—and other new developments is really something that the city needs. [32:41] **Mayor Myron Bailey**: One—it's funny because we just were talking about that where office vacancy rates are high but yet here in Cottage Grove they actually are not. [32:48] **Gretchen [Economic Development Staff]**: Correct. So it's kind of an interesting opposite happening within our community. [32:53] **Mayor Myron Bailey**: We're full, yeah essentially, yeah. Uh, any questions on this particular information? All right, then we'll move to EDA owned parcels. [33:02] **Gretchen [Economic Development Staff]**: And in your packet there's a map from the GIS department showing what the EDA owns and what that—those are saleable properties, not any of the marshland or right-of-ways or the bits and odds and ends. And it's mostly all in the Majestic Ballroom area. And so speaking of development, that's important because you own a lot of property in and around that development that will someday be useful for sale or whatever you decide you want to do there. But happy to answer any other questions about that. [33:30] **Mayor Myron Bailey**: And I guess I just—I'll just interject that one of the EDA parcels that we owned along East Point Douglas, um, the Thai Gardens did close on that property within the last 30 days finally. Because I know it took a little while to get all that going but so that is done and now it's—now the ball's in the court of the restaurant to—to eventually begin construction. So. [33:51] **Gretchen [Economic Development Staff]**: And then all these properties have been given to your financial consultant, Ehlers, to include in the financial plan because there's a tax value of about $800,000, but obviously the market value is going to be higher than that. [34:04] **Mayor Myron Bailey**: Okay. Any other questions on this one or comments? All right, uh the workshop uh on number seven, there is none uh this morning. And we're already to number eight which is adjournment. I'm looking for a motion to adjourn. [34:16] **EDA Vice President Dennis**: Motion to adjourn. [34:17] **Mayor Myron Bailey**: We have a motion by EDA Vice President Dennis. Do I have a second? [34:19] **EDA Member Carrie**: Second. [34:20] **Mayor Myron Bailey**: Second by EDA Member Carrie. All those in favor signify by saying aye. [34:24] **Multiple Speakers**: Aye. [34:25] **Mayor Myron Bailey**: Opposed? Happy holidays everyone and we are adjourned.