[PAGE 1] Economic Development Authority Regular Meeting Wednesday, February 21, 2024 4:00 p.m. Charles S. Crandall Center - Meeting Room City Hall 1. EDA Agenda - February 21, 2024 Documents: EDA AGENDA 02-21-2024.PDF 2. Roll Call: Boeke, Cowell, DeVinny, McDermott, Mensink, Raney, Voss 3. Approval Of Minutes: January 17, 2024 Documents: EDA MINUTES 01-17-2024.PDF 4. Treasurer's Report Documents: TREASURERS REPORT JANUARY.PDF 3. B. JANUARY CASH BALANCES.PDF 5. Loan Report Documents: 4. LOAN REPORT JANUARY.PDF 6. Reports 6.I. OACCT / OPED Report Documents: EDA UPDATE OACCT -2-2024.PDF LEADS EDA REPORT FEBRUARY.PDF 6.I.i. Leads Documents: LEADS EDA REPORT FEBRUARY.PDF 6.II. OABDC Report Documents: OABDC EDA REPORT 2402.PDF 6.III. EDA Projects Documents: EDA REPORT FEBRUARY 2024.PDF 7. Old Business 7.I. Update On 224 Cedar Avenue N 8. New Business 8.I. Forgivable Loan - 605 Cedar Avenue N 8.II. Downtown Second Floor Commercial Space Contest 9. Schedule Next Meeting - March 20, 2024 10. Adjournment [PAGE 2] Economic Development Authority Regular Meeting Wednesday, February 21, 2024 4:00 p.m. Charles S. Crandall Center - Meeting Room City Hall 1. EDA Agenda - February 21, 2024 Documents: EDA AGENDA 02-21-2024.PDF 2. Roll Call: Boeke, Cowell, DeVinny, McDermott, Mensink, Raney, Voss 3. Approval Of Minutes: January 17, 2024 Documents: EDA MINUTES 01-17-2024.PDF 4. Treasurer's Report Documents: TREASURERS REPORT JANUARY.PDF 3. B. JANUARY CASH BALANCES.PDF 5. Loan Report Documents: 4. LOAN REPORT JANUARY.PDF 6. Reports 6.I. OACCT / OPED Report Documents: EDA UPDATE OACCT -2-2024.PDF LEADS EDA REPORT FEBRUARY.PDF 6.I.i. Leads Documents: LEADS EDA REPORT FEBRUARY.PDF 6.II. OABDC Report Documents: OABDC EDA REPORT 2402.PDF 6.III. EDA Projects Documents: EDA REPORT FEBRUARY 2024.PDF 7. Old Business 7.I. Update On 224 Cedar Avenue N 8. New Business 8.I. Forgivable Loan - 605 Cedar Avenue N 8.II. Downtown Second Floor Commercial Space Contest 9. Schedule Next Meeting - March 20, 2024 10. Adjournment [PAGE 3] Economic Development Authority Regular Meeting Wednesday, February 21, 2024 4:00 PM Charles S. Crandall Center – Meeting Room City Hall Agenda 1. Roll Call: Boeke, Cowell, DeVinny, McDermott, Mensink, Raney, Voss 2. Approval of Minutes: January 17, 2024 3. Treasurer’s Report 4. Loan Report 5. Reports a. OACCT / OPED b. OABDC c. EDA Projects 6. Old Business a. Update on 224 Cedar Avenue N 7. New Business a. Forgivable Loan – 605 Cedar Avenue N (MO Fitness / Olson) b. Downtown Second Floor Commercial Space Contest 8. Schedule Next Meeting – March 20, 2024 9. Adjournment [PAGE 4] EDA Minutes January 17, 2024 The Owatonna Economic Development Authority met in regular session at 4:00 PM in the Charles S. Crandall Center – Meeting Room at City Hall Building with President Raney presiding. Commissioners present: Andrew Cowell, Brenda DeVinny, Pat McDermott, Corey Mensink, Kevin Raney, and Doug Voss. Commissioners absent: Dan Boeke. Also present were Troy Klecker, Brad Meier, Lisa Cochran, Glenda Smith, Sean Williams, Dave Beaver, and Kristen Kopp. Approval of Minutes. Commissioner DeVinny moved approval of the minutes of the December 20, 2023 meeting with second by Commissioner Cowell. All Commissioners voting Aye, the motion passed. Klecker said that Tom Peterson resigned from EDA and the Mayor appointed Pat McDermott to take his place. McDermott said he’s the director of manufacturing operations at Climate by Design. He was born and raised in Owatonna and served on a number of boards. Treasurer’s Report. Troy Klecker presented the revenue and expense reports for December. He said this is not a final report as invoices are trickling in yet. It will be close, though. The good things are, lodging tax revenue is up this year—more than what we budgeted. That’s a good sign. We had an oddity, a grant that was funneled through our budget that kind of throws things off a bit. There were some consulting fees and we were under budget on that, as well. In the end, we’ll be under budget, it’s just a matter of by how much. Our activity is pretty consistent year after year. There isn’t a lot of deviation. The most deviation is consulting fees. We’ve budgeted for about three projects every year. There are usually 12-15 projects going on at a time. Those are either incentives or EDA Land projects. He said all of the public parking lots are City owned, except for one. The parking lot by Curly Girls is rented from Brian Stendel and has been for many years. There has been some discussion on whether we should own that. He hasn’t been in the position taxwise to sell it. The lease will end the end of April. The fund balance is pretty good, and we’ve got the ability to do some things. Cowell said he still thinks there is opportunity for the south corridor. He said that he believes the vet clinic is moving their operations out of that area. It would be an idea of where to begin, to kind of get the ball rolling. He said that corridor and where the Budget Inn is next to Perkins, would be interesting projects. Klecker said he’s had many discussions with developers about that. It has the highest potential for development. To be along and interstate at an interchange next to a Walmart. Raney said that utilities earmarks $100,000 a year for beautification of corridors. Would that be an opportunity to do that? Klecker said they did adopt that for a five-year period and we’re beyond that. They’re doing some burying of lines by Ascend. If there is another area, that would be a separate conversation. OPU has always been very good at working with us on projects. Raney said he agrees with Cowell, right off the interstate along old 14 would be intriguing. He said we should expect a pretty good return on investment should we acquire that. Klecker said that is one small piece of property. (The hotel) He said that is best suited for a developer as it is probably too large for us. Cowell asked if there was a Phase 2 environmental study on the building across from the Chamber office. Klecker said we did complete that. There is some vapor concerns that could be [PAGE 5] fixed with the flooring (sealing it). The tank sits in the right of way of the street, toward the Chamber, which adds a little twist to it all. There are some soils corrections that will have to be done. There has been much discussion on that. There are some possibilities with a developer. We’re working with a local business as a possible tenant. His hope is we can get a project without having to acquire anything. That is the role of the EDA—to throw out development ideas and figure out if it’s something we should do or not. Mensink asked if we are still in the process of acquiring the US Bank parking lot. Klecker said the City Attorney is working on presenting a counter purchase agreement back. The goal is to get that purchase agreement together, have them agree on it, and go to bid by the end of February and do a construction project this summer. The layout is figured out. It will be two parking lots separated by a drive going to US Bank’s property. One lot will be short-term and the other long-term. We’d also be acquiring the green space next to US Bank and we’d create a walkway there. Raney asked about the property owner north of Perkins. Klecker said we have a ton of I-35 frontage available for commercial development. Conceptually there is a lot of potential. The owner wants to sell a bigger chunk to a developer who has key businesses that will help make the rest of his property more valuable. Maybe a mall with three or four tenants. Mensink asked if there was an update on Scooters. Klecker said it’s a different franchisee and they will pursue the store just as it was approved. There is still the odd piece of property that may end up sitting there. That will be a summer 2024 project. Loan Report. Sean Williams presented the loan report for December. He said there was an email outage in mid-December, which has been rectified. Klecker said they did approve HotWorx forgivable loan. Williams said there were a number of checks that were going to be cut at that City Council meeting. There is a permit for 206 W Rose that is waiting for approval. The PFHS at 301 N Cedar is waiting for materials to arrive. There is an entrepreneur at 605 N Cedar who is putting in an ADA compliant ramp on the building and has booked the contractor to start next week. Williams explained that he can’t start work until the loan is approved by the EDA. There is no precedent with moving forward and he said he would rather wait and get the forgivable loan. He said his recommendation is to tell him to wait and follow the process. He said literally yesterday was the first time we’ve heard about it. Cochran said she talked to him as well and told him to get the application in as soon as possible. The Commissioners agreed that he should follow the process and apply for the loan. He said that they built out an online application, which was sent to the EDA members. Klecker said that has all of the information on the Forgivable Loan Program. He said he thought it was very well done. Klecker said that for the Cars N Credit EDA MIF Flood Recovery Loan still has a balance of one more payment. They thought they were done, and we thought they were done, but their payments started one month after the payment plan, and they have one more payment to make. We’ve made contact with them that there is one more payment and that should be coming in. OACCT / OPED Report. Chamber Director Brad Meier presented the OACCT Report for December. He said they received a $40,000 grant for work experience over the summer months. OPED conducted their strategic planning process. They’ll bring more detail back to this group. He highlighted some business changes. MainStreet. MainStreet Director Lisa Cochran presented the quarterly MainStreet Report. She said this quarter was not as happy as third quarter as there were some business closures. They’re [PAGE 6] excited the hardware store is going to Ace. She said new holiday banners will go up in 2024. She said she loves working with businesses and building owners. She excited to be working with Sean and having a full time position is good for the loan program. She said they ended the year with a successful holiday parade. She’s really excited for 2024 and doing what they do even better. She thanked the EDA for their support. Tourism. Tourism Director Glenda Smith presented the quarterly Tourism Report. She said lodging tax revenue is a little higher than budgeted. At the end of the year, they ended up with an average occupancy rate of (48.1%). The number of trips coming to Owatonna increased by 3.1%. Visitor days decreased by 11%. She said they want to find ways to continue to bring people into town. She spoke about branding and creating a seamless visitor process. They’ve been working on the new Visitor Guide. She said she went to the Chicago Travel Show. They are working with an organization called Bandwango. They’ve reached out to restaurants and retail for a challenge. She highlighted Play Easy, a free program that matches tournament planners to tournament venues. Raney said he likes that occupancy is up and asked what the average is. Smith said we’re lower than the average, but not too far off. Klecker said the occupancy rate will go down when Home 2 Suites and Double Tree open. Smith said that construction was at least 20% of the occupancy at one point. OABDC Report. Sean Williams presented the OABDC Report. He said that they had a strategic planning session. Consulting hours were down in December because we were limited in contract hours with the regional office. For this year, we’ve contracted for 150 hours of consulting. Hopefully we’ll pass that 150. The SBDC is a federal program that funds half of their consulting hours. Last year they secured a grant through DEED for the other half. CDI moved out of the center today. What is reassuring about that is the new tenants have offset their revenue. They’re working on a couple ideas to generate some activity out there. He connected with an individual who is interested in running the maker space. He said they’re also converting an office to a drop- in office. Airport Report. Airport Manager Dave Beaver presented the quarterly Airport Report. He said 2023 was a good year and they continue to see good numbers on fuel volumes. Activity has been good and the flight school has been busy. They’re hopefully filling some of the hotels as their students are sometimes here for months. They are budgeting to be self-sufficient. Operational revenues are covering the expenses. They finished the T-hangar last year and it’s fully occupied. The security fence is in process. The Airport Commission is interested in discussions on economic development and how the airport can support Ihlenfeld’s property. They have a very long runway and that’s driving their performance. They’re interested in bringing corporations into town. There are only two airports in the Cities that have runways longer than us, and that’s MSP and downtown St. Paul. Raney said he sees the airport as an economic driver in Owatonna. Is the Airport Commission working toward short-term and long- term economic goals. Beaver said that’s a great question. They’ve discussed their next steps. They’re looking at their master plan and talking about a mechanic school. He said he and Klecker have talked about that. Klecker said that they had a plan to fill the vacant hangar space and be self-sufficient. We’ve accomplished both of those goals. They’re at a good point to reassess. [PAGE 7] EDA Projects. Community Development Director Troy Klecker presented the EDA Projects for December. He said that he took CDI off the list because they are in the building now. This is typically our slowest time of year. We’ll have an update from Oscar at the next meeting. New Business: Approve the 2024 Forgivable Loan Program. Klecker said they sent out what Sean had put together. We’ve had discussions at the last couple meetings. We’d be looking at $100,000 for 2024. Criteria would be much the same. Looking to get rid of application fee. There is the question if someone has already used the program and is looking to do another project, would they be eligible? There has been some discussion on second floors. Williams said that 12 month deadline was in the application the whole time, but not enforced. Klecker said we’re at a point we can enforce that now. Raney asked if it meets expectations if someone comes in, can they go through the process in 12 months. Mensink said some of these projects got much more involved than anticipated. Raney said we do not have a fine. Klecker said they can ask for an extension. Raney said that Martin’s is still not done. Mensink said on the flip side, if the catalyst wasn’t there, it wouldn’t get done. Cochran said she will be meeting with Al. Cowell said we’re in a new environment than we were before. There aren’t as many projects for architects. That has eased. Overall access to contractors has eased. A lot has to do with the interest rates. Cowell said a 12-month time frame is fine for 2024. Mensink said we might have to adjust on the fly if needed. Mensink said why not apply for a second one—our dollars are getting leveraged. He said this isn’t a perpetual program. Klecker said the message is we have money set aside for this year and this year only. Voss said it seems more important to go by location. Mensink said this may not be something we continue. Klecker said there is a five-year period before it’s forgiven. Some of the very first ones we did are at the five-year point. Technically you could owe some of that money should you leave. Mensink said you’re leveraging your dollars over and over. He said he doesn’t see a big issue. Raney asked if a first time applicant earn more points. Cochran said they don’t usually come in at the same time. Mensink said if it’s a competitive situation that could factor in. Cochran said that there is already $20,000 for 605 N. Cedar. There are a few who will reapply. She said there is a potential to use all $100,000. Mensink said there are other projects that could use it downtown. Raney asked if we should use language for a second time loan. Meier said we used to have to beg people to put a nickel in. You have erred on the side of generosity and it’s been good. Cowell said the language in the loan indicates it’s a one-time use. Klecker said if we want to allow it, we’d have to change the wording. Mensink said you could evaluate as needed. Cowell said there’s always been more demand than supply. If that flips, we could change it. Mensink said he agreed with that. Maybe someone new will be slower to act. He suggested leaving it in and we can reevaluate and adjust. We can restrict it on the front end to encourage new applicants. Cochran said there can always be some sort of adjustment made. Mensink said we’ve pivoted almost every time. The idea is to get the money out. Cowell said he’s all for the second story. Mensink said for sure if it’s office space. He said he likes the idea of windows. Raney asked if it’s maintenance or upgrading your apartment. Klecker said they could specify commercial use of second floor. He said that doesn’t have to be tied into this. Do you have a commercial second floor contest? We did a retail challenge. Maybe this would be a separate program. Klecker said this is all to bring people downtown. Klecker said he likes keeping it separate. Meier said they can talk to other MainStreets and get some ideas. Raney said his suggestion is to put that under new business in February. [PAGE 8] A motion was made by Mensink and seconded by DeVinny to approve the 2024 EDA Forgivable Loan Program for $100,000 total, removing the application fee, and specifying new applicants. All Commissioners voting Aye, the motion carried. Schedule Next Meeting. The next EDA meeting is scheduled for February 21, 2024 at 4:00 PM in Charles S. Crandall Center – Meeting Room at City Hall. Adjournment. There being no further business, a motion was made by Commissioner Mensink and seconded by Commissioner Cowell to adjourn the meeting at 5:29 pm. All Commissioners voting Aye, the motion passed. [PAGE 9] EDA Administration Account Description Current Budget Current YTD Budget Remaining REVENUE 290‐31000‐690‐691‐000000 PROPERTY TAXES ‐ 200,000.00 ‐ 16,685.00 ‐ 183,315.00 290‐31410‐690‐691‐000000 LODGING TAX ‐ 3% ‐ 250,000.00 ‐ 250,000.00 290‐34950‐690‐691‐000000 TIF ADMINISTRATIVE F ‐ 71,773.00 ‐ 71,773.00 290‐36210‐690‐691‐000000 INTEREST EARNINGS 290‐36220‐690‐691‐000000 RENT/RENTALS ‐ 3,600.00 ‐ 300.00 ‐ 3,300.00 290‐36231‐690‐691‐000000 GRANT FUNDS TOTAL REVENUE ‐ 525,373.00 ‐ 16,985.00 ‐ 508,388.00 EXPENDITURES 290‐41000‐690‐691‐000000 WAGES ‐ REGULAR FT 86,568.00 6,529.04 80,038.96 290‐41300‐690‐691‐000000 WAGES ‐ OT 290‐41410‐690‐691‐000000 PERA 6,493.00 485.22 6,007.78 290‐41420‐690‐691‐000000 FICA 6,622.00 482.52 6,139.48 290‐41500‐690‐691‐000000 INSURANCE 7,445.00 547.17 6,897.83 290‐41550‐690‐691‐000000 WORKERS COMP INSURAN 493.00 36.88 456.12 290‐42000‐690‐691‐000000 OFFICE SUPPLIES 400.00 400.00 290‐42300‐690‐691‐000000 SMALL TOOLS & MINOR 400.00 400.00 290‐43010‐690‐691‐000000 OTHER PROFESSIONAL S 35,000.00 35,000.00 290‐43121‐690‐691‐000000 PHONE 200.00 200.00 290‐43122‐690‐691‐000000 POSTAGE 300.00 300.00 290‐43220‐690‐691‐000000 TRAVEL & TRAINING 1,000.00 105.62 894.38 290‐43231‐690‐691‐000000 OBD ‐ MARKET SERVICE 80,000.00 80,000.00 290‐43232‐690‐691‐000000 OBD ‐ LOAN SERVICES 20,000.00 20,000.00 290‐43233‐690‐691‐000000 OBD ‐ SMALL BUSINESS 4,000.00 4,000.00 290‐43234‐690‐691‐000000 DOWNTOWN ENHANCEMENT 5,000.00 5,000.00 290‐43235‐690‐691‐000000 PARTNERS FOR PROGRES 12,000.00 12,000.00 290‐43320‐690‐691‐000000 ADVERTISING & PROMOT 1,000.00 1,000.00 290‐43400‐690‐691‐000000 MEMBERSHIPS & SUBSCR 200.00 200.00 290‐43720‐690‐691‐000000 REPAIR & MAINT ‐ EQU 200.00 200.00 290‐43810‐690‐691‐000000 RENTS/LEASES 6,700.00 6,700.00 290‐43972‐690‐691‐000000 SOUTHERN MN INITIATI 1,667.00 1,667.00 290‐43990‐690‐691‐000000 MISCELLANEOUS 290‐43991‐690‐691‐000000 TOURIST DEVELOPMENT 237,500.00 237,500.00 290‐47000‐690‐691‐000000 TRANSFER TO OTHER FU 12,000.00 1,000.00 11,000.00 TOTAL EXPENDITURES 525,188.00 9,186.45 516,001.55 EDA LOANS Account Description Current Budget Current YTD Budget Remaining REVENUE 292‐34109‐690‐692‐000000 OTHER REVENUE 292‐34960‐690‐692‐000000 INTEREST ON LOANS ‐ 55.11 55.11 292‐36210‐690‐692‐000000 INTEREST EARNINGS ‐ 16,000.00 ‐ 16,000.00 TOTAL REVENUE ‐ 16,000.00 ‐ 55.11 ‐ 15,944.89 EXPENDITURES 292‐48300‐690‐692‐000000 LOAN PROGRAM DISBURS TOTAL EXPENDITURES [PAGE 10] EDA LAND Account Description Current Budget Current YTD Budget Remaining REVENUE 294‐34950‐690‐694‐000000 TIF ADMINISTRATIVE F ‐ 1,362.00 ‐ 1,362.00 294‐34960‐690‐694‐000000 INTEREST ON LOANS ‐ 43,235.00 ‐ 43,235.00 294‐36210‐690‐694‐000000 INTEREST EARNINGS ‐ 12,000.00 ‐ 12,000.00 294‐36220‐690‐694‐000000 RENT/RENTALS ‐ 30,000.00 ‐ 850.00 ‐ 29,150.00 294‐39101‐690‐694‐000000 SALE OF CAPITAL ASSE TOTAL REVENUE ‐ 86,597.00 ‐850.00 ‐ 85,747.00 EXPENDITURES 294‐43004‐690‐694‐000000 LEGAL FEES 294‐43010‐690‐694‐000000 OTHER PROFESSIONAL S 20,000.00 20,000.00 294‐43320‐690‐694‐000000 ADVERTISING & PROMOT 294‐43500‐690‐694‐000000 PROPERTY & LIABILITY 4,100.00 4,100.00 294‐43711‐690‐694‐000000 RENTAL PROPERTY EXPE 294‐43910‐690‐694‐000000 REAL ESTATE TAXES 20,000.00 20,000.00 294‐45100‐690‐694‐000000 LAND 294‐45300‐690‐694‐000000 OTHER IMPROVEMENTS TOTAL EXPENDITURES 44,100.00 44,100.00 [PAGE 11] City of Owatonna Balance Statement by Fund 31-Jan-24 FUND 292: EDA LOANS Account Number Account Name Ending Balance ASSETS 292-10100-000-000 BANK ACCOUNTS $ 17,822.24 292-10400-000-000 INVESTMENTS 800,000.00 FUND 294: EDA LAND Account Number Account Name Ending Balance ASSETS 294-10100-000-000 BANK ACCOUNTS $ 267,531.51 294-10400-000-000 INVESTMENTS 500,000.00 [PAGE 12] CITY OF OWATONNA EDA - LOAN PROFILE As of : January 2024 prepared 2/15/2024 EDA - Improvement Notes Original Current Monthly Borrower Loan Date Int Rate Years Balance Balance Payment Status Type Notes Wagner's 10/1/2018 2.500 7 43,480.63 20,038.20 564.78 Current Retail Total 43,480.63 20,038.20 564.78 Number Original Current % of Current Profile by Loan Performance Status of Loans Balance Balance Balance Current 1 43,480.63 20,038.20 100.00% Non-current 0 - - 0.00% 1 43,480.63 20,038.20 100.00% [PAGE 13] EDA - Low Doc Notes Original Current Monthly Borrower Loan Date Int Rate Years Balance Balance Payment Status Type Notes Selective Looks 6/16/2020 2.500 7 25,000.00 10,334.12 259.78 Current Selective Looks 6/16/2020 - 3 5,000.00 0.00 138.89 Current Paid in Full Vesterby 12/13/2021 1.625 7 12,500.00 8,927.10 157.53 Current Vesterby 12/13/2021 - 3 5,000.00 1,527.75 83.33 Current 47,500.00 20,788.97 639.53 Number Original Current % of Current Profile by Loan Performance Status of Loans Balance Balance Balance Current 4 47,500.00 20,788.97 100.00% Non-current 0 - - 0.00% 4 47,500.00 20,788.97 100.00% [PAGE 14] EDA - MIF Flood Recovery Original Current Monthly Borrower Loan Date Int Rate Years Balance Balance Payment Status Type Notes Plemel (direct loan) 6/22/11 - 10 27,378.50 - 228.15 Current Paid in Full Oct 2020 Marks Repair (direct loan) 4/5/12 - 10 39,327.50 - 254.85 Current Paid in Full Nov 2021 Owatona Country Club (direct) 5/7/12 - 10 82,363.50 - 686.36 Current Paid in Full Aug 2022 Cars-N-Credit (direct loan) 4/30/13 - 10 71,657.00 - 597.14 Current Paid in Full Jan 2024 Plemel (deferred loan) 6/22/11 - 10 27,378.50 - - Forgiven after 6/22/21 Marks Repair (deferred loan) 4/5/12 - 10 39,327.50 - - Forgiven after 4/1/22 Owatonna Country Club (deferred) 5/7/12 - 10 82,363.50 - - Forgiven after 5/1/22 Cars-N-Credit (deferred loan) 4/30/13 - 10 71,657.00 - - Forgiven after 4/30/23 Total 441,453.00 - 1,766.50 Number Original Current % of Current Profile by Loan Performance Status of Loans Balance Balance Balance Current 8 441,453.00 - #DIV/0! Non-current 0 - - #DIV/0! 8 441,453.00 - #DIV/0! EDA Land Fund Original Current Annual Borrower Loan Date Int Rate Years Balance Balance Payment Status Type Notes Gateway #2 TIF note 12/31/16 3.000 25 472,889.00 425,262.87 Current TIF Guarantee Arrow Ace TIF note 12/1/17 3.000 25 350,000.00 313,732.13 Current TIF Guarantee Nicolai TIF note 12/31/17 3.000 25 524,845.17 518,820.84 Current TIF Guarantee Marriott TIF note 3.000 25 268,000.00 268,000.00 Current TIF Guarantee 224 Cedar TIF note 3.000 25 225,000.00 225,000.00 Current TIF Guarantee Total 1,840,734.17 1,750,815.84 - Number Original Current % of Current Profile by Loan Performance Status of Loans Balance Balance Balance Current 4 1,840,734.17 1,750,815.84 100.00% Non-current 0 - - 0.00% 4 1,840,734.17 1,750,815.84 100.00% [PAGE 15] Owatonna Area Chamber of Commerce & Tourism Memo To: Economic Development Authority From: Brad Meier, President/CEO Date: 2/21/2024 Re: OACCT Economic Development Update Economic Development See report for leads and ‘in progress’ reports. Workforce Made in Owatonna Day-Healthcare was held today Federated Insurance intern process Junior & Senior survey follow ups Other OPED: Livability new articles (5) have been published at Livability.com OPED: Focus areas over the next three years: Attract/Educate Quality Workforce - A quality workforce is vital to continued economic growth in Owatonna. We also seek opportunities to attract a workforce that doesn’t actually live in Owatonna, and also attract people to live in Owatonna that work elsewhere. Marketing and Communications - Provide updates to key partners and brand Owatonna as the place to be. (Visit – Work – Live) Extra mile ends here. Focus on the value of relationships that exist. Easy to do business with and live in. New Development/Redevelopment – Achieve private and public investment in infrastructure at levels which support a population growth projection of 40,000 by 2040. Grand Rapids downtown association group coming to spend night and tour Owatonna’s renovations. Chamber Annual Dinner recognized 8 large donors to the new OHS with the Extra Mile Award Website updating for VisitOwatonna, Chamber, and Owatonna Partners for Economic Development-collecting proposals 1 [PAGE 16] Project Outcome: Green Company Date of Inquiry Service Provided (progressing), yellow Follow ups Conclusion (probable); red (not moving) Received some promotional Looking for ideas on a new information and have been Franchise director for DQ franchise owner for the DQ sharing it out to business US looking for a new in Owatonna. They'd like community. 01/09/24: person to run DQ to fill the space just franchisor they had lined up fell franchise for Owatonna vacated on Bridge. through, so still looking for one 10/9/2023 for Owatonna. Some questions about what is needed by the city Ken Beck & Brad Meier met with Owner still working on details Wants to run an adult of owatonna to complete business owner to discuss what with architect. 2/15/24: daycare in his existing this project in current is needed and a realistic conditional use permit location downtown 12/4/2023 space. timeline. approved at city. Lead pastor has moved Building on the south end of church to temporary Owatonna has come on the location, wants to find an market. Discussed some Looking for new site for existing building with at informtion about the site with their church 1/25/2024 least 10,000 sq ft him. Group has purchase agreement on building Redevelopment project looking for feedback on that has high visitor Provided ideas on the building needs/use 1/8/2024 attraction potential. and possible uses/needs. [PAGE 17] EDA Report for January 2024 Updates: - CDI moved out of OABDC and into their new space. - One tenant moved out of an office and onto manufacturing floor with same rent. - Vacated office converted into “Drop-in Office” to accommodate up to five entrepreneurs instead of one. - Utilities standardized for all tenants, bringing in additional revenue and reducing costs. - Habitat 4 Humanity occupying 2,000 sq ft. of space, in partnership with OHS. Building walls for homes for Chatfield and Owatonna, bringing region-wide marketing of space through sponsorship. - DEED Small Business Assistance Partnership grant contract in-process. o Funding: Small Business Development Center (SBDC) consulting match dollars; Makerspace; Software Studio; community events and workshops; Co.Starters curriculum; teleconferencing equipment; translation expenses; administration. Upcoming: - Owatonna Community Education partnership, using Co.Starters curriculum: o Starting Your Business Bootcamp – March 2nd & 3rd o Small Business Academy – Monday evenings, March 18th – May 20th o Scholarships available o Sponsored by SMIF and SBDC Consulting Hours Clients Sessions Hours New Operating 2024 YTD 2023 YTD 14 23 19.25 4 5 19.25 10.00 Occupancy Manufacturing Offices Total Leasable Space 34,325 Total Leasable Offices 10 Total Leased Space 19,375 Total Number of Leased Offices 9 Present Occupancy % 56% Present Occupancy % 90% Budget Occupancy % 70% Budget Occupancy % 70% YTD Performance to Budget $ $ (699) YTD Performance to Budget $ $ 635 YTD Performance to Budget % 89% YTD Performance to Budget % 130% Number of Tenants 7 Number of Tenants 8 Future Makerspace 1,600 [PAGE 18] EDA Forgivable Loan Program – January 2024 Updates: - 116 N. Cedar – Hotworx/Scholljegerdes o Loan paperwork being drafted by Walbran. Project estimated to be completed by end of February. New Business: - 605 N. Cedar – MO Fitness/Olson o $20,000 § Exterior – Ramp § Interior – ADA Bathrooms [PAGE 19] February 21, 2024 EDA Meeting EDA Projects Report The developer has sold the site for the second building on the old Hardees/Budget Mart site to Redline Development Group, LLC. TIF was approved for this project. There is enough TIF being generated from the first building to pay the City back for costs associated with realigning Barney Street. Any additional TIF generated from a second building would assist the developer for costs associated with the development. The land swap between the City and Cemstone is completed. The City now owns the current Cemstone site and Cemstone owns 14 acres of vacant land in the industrial park. Cemstone will have 5 years to build a new facility on the new site. The City will then redevelop the current site once Cemstone moves out. Tax Increment Financing is being used to assist with the project. Cemstone has completed the plant on their new site. They will be building an office and storage space next year. The property at 224 North Cedar Avenue has been conveyed to Oscar and Tammy Mazariego to renovate the building into a wine lounge. Tax Increment Financing has been approved for the project. A development agreement was approved and signed for the project. Costs has gone up on the project from the time the development agreement was signed and the owner is developing a new plan. The EDA gave the owner until February to get a contract signed for the project. The City has purchased the property at 117 West Bridge Street formerly owned by Centro Campesino. Construction of a new roof on the building is complete as well as other improvements. The EDA paid for the roof and other improvements with the intent of redeveloping the property and utilizing tax increment financing to recoup those costs from the project. A redevelopment project is being sought for that property. The City owns the property at 148 West Main Street that was damaged from a collapsed roof. A redevelopment project is being sought for that property. Tax Increment Financing has been approved for the redevelopment of 202 West Bridge Street. The project will renovate the entire building into retail and office space. Construction is complete on the first floor and Graif has moved into that space. A tenant has now moved into the upper level of the building. Kamp Automation is proposing to purchase a city owned lot to construct 50,000 square foot manufacturing facility. The company is currently in Waseca and would be moving 25 jobs here as well as adding 23 more jobs. Tax Increment Financing has been approved for the project. The company has applied for the State’s Job Creation Fund and Minnesota Investment Funds to help with the project costs. The development agreement and business subsidy agreement are approved. The property has been sold to KAMP and construction has begun on the site. KAMP has occupied the building. [PAGE 20] Plans have been announced for the riverfront redevelopment project north of West Vine Street and west of North Oak Avenue. Redline Development Group will be demolishing 5 buildings, including the Chamber of Commerce building and constructing a bank building and a second building which will contain Mineral Springs Brewery, 20,000 square feet of commercial space and 70 luxury apartments. The EDA owns one of the buildings at 216 North Oak Avenue. Tax Increment Financing has been approved for this project. A development agreement has been approved. The property is being platted and easements and streets are being vacated as part of the project. Demolition of the buildings is complete and construction has begun. Scooter’s Coffee is proposing to build a drive-through coffee shop on city owned land at the corner of South Cedar Avenue and 18th Street SW. The City Council has approved a conditional use permit for the project and purchase agreement for the property. The property has been sold. Scooters is trying to purchase the tower property and incorporate it into the site before beginning the project. Construction is planned for next year. The City has purchased the property at 126 East Fremont Street. Plans will begin to demolish the house and garage on the site. A redevelopment project is being sought for this property and the 4 other lots the City owns. The house was burned on October 22 and the rest of the site has been cleaned up. Staff is working on a plan to develop the property. Foamcraft is proposing to construct a 15,000 square foot addition to their existing facility in the industrial park. Tax Increment Financing has been approved for the project. Construction has begun on the site. The City Council approved the purchase of 139 East Pearl Street. Closing on the property occurred on October 18th. The City will be demolishing the house in the spring.