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HomeMy WebLinkAbout04-22-10 Economic Development Council Minutes City of Bozeman Economic Development Council (EDC) Approved Meeting Minutes April 22, 2010 11:00 am – 12:00 pm Bozeman City Hall Madison Conference Room Attending: EDC - Gary Bloomer (Tech Ranch), Stuart Leidner (Prospera Business Network), Cheryl Ridgely (Bozeman Deaconess Hospital), Chris Westlake (Midwest Welding and Machine), Tracy Menuez (Human resource Development Council), Daryl Schliem (Bozeman Area Chamber of Commerce), Chris Mehl (Bozeman City Commission) Absent: Eugene Graf (Graf Construction/RealEstate) Staff : City Manager Chris Kukulski, Public Services Director Debbie Arkell, City Engineer Rick Hixson, Associate Planner Doug Riley and Assistant to the City Manager Brit Fontenot Public: There were no members of the public present 1. Call to Order – Chair Chris Westlake Chair Westlake called the meeting to order at 12:05 pm. 2. Approval of minutes from the March 18, 2010 EDC meeting It was moved by Mr. Leidner, seconded by Mr. Schliem, to approve the March 18, 2010 EDC minutes as amended. The motion to approve the March 18, 2010 EDC minutes as amended was unanimously passed 7 - 0. 3. Public Comment Chair Westlake called for public comment. There was no public comment. 4. Discussion of the purpose and scope of the EDC Chair Westlake began the discussion stressing the importance of defining the purpose, scope and role of the EDC for the Commission and the community. 1 Leidner - Referring to Sections 7 and 8 of the Economic Development Plan implementation strategies as a starting point for the discussion. Ridgley – suggested possibly blending the implementation matrix with the Commission’s adopted 2010/11 work plan and advising the Commission on both present and future economic development issue. Westlake - stated that an important role of the Council should be to identify barriers to economic development and advise the commission on how to overcome those barriers. Mehl – at the end of the EDP (Economic Development Plan) section 6 what are the competitive advantages the city enjoys now (quality of life)? How does the city interact directly with the business in the regulatory sense (building, planning, life safety issues, etc) and how can we make Bozeman more business or the most business friendly in the state. Can we leverage the Mandeville farm? How do we use revolving loan funds? What is the importance of infrastructure? Individual meetings may be much more focused on Mandeville but Schliem – the EDP is a work of progress for the next four years. We need to pay attention to what we can do to replace lost jobs. What is economic development? Schliem - doesn’t want to take the first year to make the council palatable to the community while jobs continue to be lost. Menuez – what are the strengths of Bozeman from an outsider’s perspective? Self assessments are fine but it may be very important to have an outside perspective What we may need is an assessment of what are barriers to economic development from an outside perspective and how far is the community willing to go to encourage certain types of economic development because there will be tradeoffs and we need to hear from the community on the acceptability of those tradeoffs. Outside growth and outside interests vs. what we can do with the companies we already have here. What could we have done, what can we do to encourage growth by local companies. Bloomer – Does not want to see EDP document gather dust. We need to dig into the EDP plan and advise the council on how to implement the plan. Mehl – Do we need a new survey? Isn't here a different metric now vs. when the EDP was written? Westlake – agree we need the external perspective. Kukulski – Daryl (Schliem) and Stuart (Leidner) are “outsiders” and perhaps they can give an outside perspective or feedback rec’d from local businesses. 2 Menuez – everybody hates their planning department but like the result of planned community. We need to strike a balance. What type of costs would we consider fronting to attract businesses to Mandeville farms? Schliem – done over 100 interviews and would be glad to share information taken from those interviews. I never wanted the developer and planning department to get together until each had given in approximately 20% and then the process was made much smoother Leidner – has survey data at his disposal. We hear about the challenges of dealing with the planning department and striking a balance is critical. What I heard from the outside coming into the community is that Bozeman is more progressive by about 3 years over Livingston at the moment. Leidner was referring here to Livingston’s planning process for an economic development plan specific to their locale. Livingston is really just getting going on this process compared to what had been accomplished in the past 3 years in Bozeman to get to this stage. Bozeman is a step ahead in that respect. We could play with the data a little more and try and extract more information. The EDP is a guiding document. In the past you may have been able to attract businesses without doing much of anything to get them here but in this climate the developers are asking what are you going to do for me. The City will have to do more in these economic times. Everyone is competing right now. Ridgely – it would be helpful for Daryl and Stuart to share their observations based on your respective professional roles so we can have that focused discussion on a future agenda. Kukulski – We could spend 15 – 20 minutes over the next several months. This summer we could set aside a few hours for an additional meeting (once we have the information provided by Stuart and Daryl) and really solidify the focus of the EDC. Westlake – Brit is getting queries from the public about how to get in front of the EDC; that is not necessarily a bad thing. How do we do that in the midst of everything else we are trying to do? Kukulski – I would encourage you to think about that and determine what types of businesses (and business sectors) you would like to have in front of this Council. Menuez – Can we have a public forum? Fontenot – The people I have spoken with would like to introduce themselves and their ideas before the Council to determine how their respective projects fit into the mission and goals of the EDC. This may be difficult under the time constraints of a monthly one hour EDC meeting. Perhaps some additional time or meetings would be necessary if the Council is interested in hearing these presentations. Bloomer – would like to see the EDC set one year or two year goals for benchmarking successes. 3 Mehl – yes, a priority setting exercise Leidner – See section 9 of the Economic Development Plan. We have data available now and while individual impressions are important, we should not overlook the data already compiled and identifies those barriers. Key stakeholders have already been polled. Mehl – Would you (Daryl and Stuart) consider sharing your observations at the May 20th EDC meeting? Perhaps the two of you could coordinate with Stuart taking the empirical data portion and Daryl focusing on the social aspect drawing from the 100 plus interviews he has conducted. Westlake – What would be good metrics for this group to gauge its work and evaluate the “deliverables”? Mehl – I would suggest a one year goal. Menuez – This will be the outsider’s perspective of the business climate in Bozeman? I am really interested in that external perspective. Mehl – from that we can decide if we should go to the Commission to ask for funding for some wider external evaluation, if the Council determines that it would have some value. Leidner – I can use a software tool (Analyze It) and make comparisons and determine the economic impacts of business developments in this area. Kukulski – we can dedicate a big chunk of the May 20th agenda for that so that in no more than 2 meetings from now we are pinning something down. Westlake – Staff investigation work that could be informative. Someone could call companies that have relocated (from California?) and discuss their process of deciding where to relocate. We could ask the questions about how they decided to relocate, what were their criteria, etc. Kukulski – so we could identify businesses that have relocated and try to get information about the key reasons they selected their new area. Mehl – I suggest we do that but hold off on that until we hear from Stuart and Daryl on May 20th and then contact the U of M’s Bureau of Business and Economic Research which does an extensive survey of why businesses move to Montana. Menuez – the other question that arises is “Why didn’t you move to Montana?” Westlake – To summarize the action from this discussion 1. Stuart and Daryl, you will be prepared to summarize your thoughts to the Council on the data (Stuart) and the interviews (Daryl); and 4 2. The Council should think about good metrics to gauge the Council efforts on behalf of the City and be prepared to discuss at the next meeting. Mandeville Farm Planning aspect of Mandeville Farm Last meeting (April 22) Associate Planner Doug Riley provided the Council with an overview of the Mandeville Farm project and discussed the current status of the preliminary plat (approved by the Commission of April 2009 and expires in April 2011 and eligible for a one year extension to April 2012). A request for an extension can be made through the Planning Department and forwarded to the City Commission. Riley - Much design, surveying and initial engineering work has already been done on the property ($206,291 to date). Kukulski - One road is designed and ready to go to bid. Westlake – There is value in extending the preliminary plat. Riley – Entryway corridor design standards were discussed at the last EDC meeting. There are currently 22 lots in Mandeville Farms which have the potential of being aggregated to accommodate development. Design standards require street trees and if there is a watercourse, stream setbacks apply. A landscaping plan was a condition of approval as well as a set of coordinated architectural guidelines will be necessary as the project moves to the final plat stage. This way everyone would know what the expectations are as it relates to the design guidelines and standards to locate at Mandeville Farm. From preliminary plat, the next step is engineering design and construction of infrastructure (sewer, water, roads, etc.). Bloomer – Do you have a table outlining these costs? (Rick Hixson distributed a Preliminary Engineers Estimate, Mandeville Subdivision Site Improvements) Leidner – Under the current conditions, what is the feeling at the City about the developer coming in and incurring these costs of infrastructure development vs. the City making that investment hoping to attract businesses to the site? What is the balance there? Kukulski – Right now we don’t have much to work with. The TIF doesn’t generate much. Currently revenue on the property is $34k a year. Short of a commitment by a private entity to build an investment on the property I don’t know where resources would come from in the City even if we wanted to make improvements on the property. 5 Ridgely – One of the things we talked about last meeting was the deadline for getting the extension on the preliminary plat. Perhaps we should make that recommendation to the Commission soon. Riley – The request for the extension must be made prior to the expiration date, prior to April 2011 but can be done at any time. Westlake – What is the average time to achieve final plat? Riley – The critical timeframe is the engineering design and construction of the infrastructure. Menuez – Does this estimate include the rail spur? Hixson – No, it does not, that would add approximately $1m to the cost. The estimate handed out is exclusive of the rail spur. It was not included in the estimate because we were not sure anyone really wanted it. We could add it in because the area does meet the grade requirements and we could run a spur out to Mandeville Farms. The estimates as presented ($5m for improvements and $500k for engineering design) include water, sewer & streets. The construction period for the improvements would be about one construction season or summer. You do have to have most of the improvements done, or a financial guarantee, prior to submitting a final plat. No building permits could be issued until the guaranteed improvements are in place. Menuez – What is the railroad’s position? Kukulski – We met with the railroad on another issue and asked as an aside about their position on a rail spur to Mandeville and they indicated that the railroad would not oppose such a spur however they will not financially contribute any amount toward building it. Bloomer – So if you are making $34k off of this property, what is it currently costing the City? Kukulski - $34k is the tax increment on the property. The tax revenue is not more than probably a few thousand dollars a year. Bloomer – Are there management costs associated with owning the property? Arkell – The City pays yearly Street and tree assessments totaling a few thousand dollars. A farmer farms the land and the city gets a small portion of the value of his crops. Kukulski - Outside of the recent court judgment, owning the property is not a financial burden on the City, nor is it a moneymaker. Arkell – there is a cell tower lease on the property too, approximately $500 a month. 6 Kukulski – the real challenge to Final Plat is millions of dollars of infrastructure improvements (installed or guaranteed) needed to get to final plat stage. Schliem – In this economy developers are unlikely to be willing to bear these infrastructure costs, perhaps 3 years ago but not now. This may be a prime time to go international, port of entry, for goods coming on from overseas to a distribution center on that property. The cost may not be as big a factor as the timetable, we may be 2 yrs out on making the property inhabitable and we don’t know what the community has the appetite for or the current climate for the City process to develop the Mandeville property. The proximity to the airport, rail spur and I-90 make Mandeville a prime location for some sort of distribution center. Companies like this, however, will not be willing to invest a million dollars into trees and a sprinkler system. These companies will invest in the inside of their facilities. Kukulski – Could the construction of roads on the property done in phased components? Arkell – We could look at that possibility, however, a problem is that you have no secondary access to the property. This is a critical issue. Menuez – Is there currently, or was there at the time of purchase, a local business looking for a “Mandeville Farms” type property to expand onto? Kukulski – The property was originally purchased for the transfer station. Menuez – Can we get a copy of the ThinkTank report on the potential income off of the Mandeville property? Kukulski – Sure. The report indicated that the profit off the property would be about $3m dollars. Leidner – Is the property on the table to be the transfer station any longer? Kukulski – No. The decision was made in 04/05, because the price continued to rise for a transfer station that it became too expensive to continue to consider a transfer station on this site. Mehl – At present, we are looking at least $6.5m with the rail spur. By the next meeting, it seems like we need to get answers on the questions of phasing-in the improvements and what are the other hurdles and how/if can they be overcome. Schliem – Have we researched the railroad and how they feel about a spur? Kukulski – In 2007, when things were going well, their position was that they do not make economic development investments. We should be wary of building the spur with a “build it and they will come” attitude because we don’t have to have that piece in place to get some of the lots sold. 7 Hixson – You could phase it in, however, some things are easier to phase than others, i.e. water mains. Streets can generally phased, sewer may be able to be phased so the short answer to phasing in the improvements is yes, some of it can be phased but that raises another question; It is cost effective to phase it in? It would take some effort on the part of the City engineering division to look at the phasing in of the improvements to make an informed decision on whether phasing makes financial sense. I will try to come up with some sort of an answer on the phasing of improvements. Menuez – Do you have the estimated value of the land as it sits now? Arkell – Currently? No. We paid $2.6m in June, 2003. Riley – Having secondary access is critical, especially with a rail spur, in the context of emergency services which will need to be provided to the location, which should be another consideration in the street phasing discussion. Bloomer (?) – Kukulski brought up an interesting point earlier about whether or not the city should be competing against other businesses by developing property yet here we are an EDC working on behalf of all business interests. Can you give some background on that? Kukulski – The development of Mandeville hasn’t gone anywhere for a lot of reasons, not the least of which is the lawsuit. I’ve had three reasonably interested local firms who were interested in doing something out there. Something that turned them off really quickly was the unknown resolution to the lawsuit. We have never had a series of discussions or debates as a staff as to how we would move forward from the preliminary plat stage. There was enough of an interest to complete the preliminary plat. Mehl – On this issue we are looking to you (the EDC) for advice on what to do with this property. Kukulski – I think we need to not be overly focused on what an outsider needs but what existing local companies need. In my opinion, the idea about the EDC is not about being a “yes” body for what the Commission may want them to do. It’s what this group, from the perspective of the business community, recommends the Commission do. The driver is what you think the community should be doing to enhance its economic condition. Leidner – Also, we need to advise the commission on the highest and best use of the property in the long term. Riley – The Community Plan, which included lots of public comment, determined that this property was best suited for the industrial designation (zoning), commercial not residential. Schliem – I would suggest that this group, or perhaps the chamber may do it, form a business reduction and retention committee. I agree that we need to identify the “appetite” of the community for these types of economic development projects. 8 9 Kukulski – For the next meeting we should all clearly understand the information provided about the costs of infrastructure as well as We do have a bit of a dilemma in that it is the entryway corridor, and the focus of many of the operations that may want to move into this space is on their business and not on spending tens of thousands of dollars or any extra money on the land or landscaping or facades, etc. Ultimately, what the Commission needs from the EDC are ideas on what the focus of this property should be; sell it? Develop it? What does that look like? Schliem – I think it’s fair to ask what would be the community’s appetite if we suggested removing some of the layers of zoning. Westlake – There are a lot of layers currently. Kukulski – What I would hope is that Rick can come back and let us know what the phasing of the improvements to Mandeville might look like. Mehl – Should we agree to meet until 12:30 in the future? 5. Next steps/agenda items for May 20th EDC meeting Mehl - Daryl and Stuart will come in next time and share their perspectives and Stuart you said you could run a quick analysis of four or five different communities (AnalyzeIt) and we should all come ready to set priorities and goals. Staff should send us the ThinkTank report on Mandeville and either receive a report or come prepared to discuss “digestion by parts rather than digesting the whole” (this is a reference to phasing in the improvements at Mandeville Farm). 6. Adjourn Chair Westlake adjourned the meeting at 12:25 pm.