Economic Development Authority Annual Report

February 14, 2023

To: Mayor Monge and Council Members

From: Economic Development Authority (EDA)

RE: North St. Paul EDA – 2022 Annual Report

BACKGROUND

The primary goal of establishing and maintaining the EDA is to have an entity that is dedicated to work in concert with the City Council to achieve a shared vision of building a strong and adaptive local economy. This is primarily accomplished through a strong focus in the following areas:

Setting a strategic vision for economic development as framed in the City’s Comprehensive Plan.
Defining and guiding a tactical economic development agenda.
Attracting, retaining and expanding businesses within the City.
Promoting the City to internal and external audiences.

The current EDA consists of a 10-members (7 voting members) that include the following individuals:

Robert Dew – Chairman
Terry Furlong – Vice-Chairman
Kevin Fuller
Tom Schifsky
Archie Vickerman
John Monge – Mayor/Council Representative
Tim Cole – Council Representative
Brandy Howe – Community Development Director (non-voting)
Brian Frandle – City Manager/Executive Director (non-voting)
Brett Garry – NSP Business Association Liaison (non-voting)

The EDA presently conducts an in-person 90-minute meeting monthly. In addition, EDA members attend many meetings with local businesses and potential developers to assist staff in the multitude of efforts related to EDA activities.

EDA ACTIVITIES

The EDA undertakes numerous actions and activities in accordance with the EDA’s By-Laws in an effort to advance the economic health of the City. The activities and actions we undertake are done so with the singular purpose of positioning the City to achieve its goals as outlined in the Comprehensive Plan. the Redevelopment Master Plan, and support business retention and growth within the City. The EDA recognizes that there or oftentimes many competing interests when it comes to the issues surrounding potential development and the activities that promote a healthy and sustainable economy. The EDA always makes a concerted effort to view these things through a lens of “What is best for the economic health of the City?”. This is not to suggest we don’t consider the viewpoints and concerns of other City agencies or stakeholders, but it is critical that the EDA makes it best recommendations and works to put the pieces together, if possible. This is important to understand when assessing the process and ultimate value of the EDA.

The EDA has continually attempted to balance the demands between “what the residents of North St. Paul want it to be” and “what the market wants it be”. Ultimately, the EDA has to provide recommendations and guidance on what is best for the long-term economic health of the City. The way we do this is often takes a lot of time and effort to reach a conclusion that provides the City and its residents the best long-term results. Over the last decade, the EDA has commissioned numerous studies and exhaustive reviews to ensure we, as a City, are on the best path for the future. This is important to note when we review the past and recent successes as they have all taken years of effort to achieve and it is important to remember as we look to the future and the work that remains to be done.

In addition to a continued focus on development and business attraction to the City, the EDA has also continued efforts to understand and execute business retention strategies. The EDA’s primary strategy in business retention has been to conduct visits with existing businesses to understand their needs and concerns in addition to providing information about the EDA and its activities. The EDA liaison from the North St. Paul Business Association, Brett Garry, has continued to play a vital role in helping the EDA understand the current business climate and keep us connected with the business community.

DEVELOPMENT ACTIVITY

Anchor Commons – This site was formerly occupied by Anchor Block and sat vacant for many years while for sale by a private owner. Site conditions proved to be a continual hurdle in the sale and in 2017 the EDA and City staff stepped in to assist the seller and prospective buyer in developing a plan that helped create an environment to facilitate a sale and allow the City to affirmatively guide a process to the benefit of all. But for the involvement of the City the sale of the property would have likely failed, and the site would remain vacant today. Today this site is fully developed with the Kwik Trip and Extra Space Storage completed in 2021 and the following projects fully completed in 2022:

Gateway at McKnight – M&I Homes’ development has added 110 new townhomes ranging from 1,750 – 2,399 square feet. This project was substantially complete in 2021. The remaining townhomes were completed and sold in 2022 and this project is fully occupied. This development has added ~$30,000,000 of new taxable real estate value and brings ~165 new residents to the City.

Anchor View Apartments (f.k.a. Trident Development) – A new 128-unit apartment building began construction in early 2021 and completed in 2022. The project is mostly leased and fully stabilized. 20% of the units in this development will be rented at 50% of the area medium income which ranges from $791 for a studio to $1,175 for a 3-bedroom. This development has added $~22,320,000 of new taxable real estate value and adds ~150 residents to the City.

The Sentinel Residences – Substantially completed in late 2021 the development is a 3-story 89-unit marketrate apartment building on the former City Hall site and adjacent parcels. The facility was fully leased in a short time and is fully stabilized. This development has added ~$18,250,000 of new taxable real estate value and brought ~100 residents to the City.

MAC’S Diner – Located within the Sentinel Residences on the corner of Margret and 7th Mac’s Diner opened in the summer of 2022. The EDA worked with the proprietor and provided funding to help bridge the financial gap that allowed Mac’s to become a reality in the City. Macs has been well received by those in the community and surrounding areas. The EDA feels this is a milestone in the City’s progress of creating a more vibrant downtown district and its success will support the message to future similar establishments that you can not only survive but thrive in North St. Paul.

Lillie Redevelopment – The Lillie building which formerly housed the Lillie Newspaper and several other businesses over the years was being sold by the long-time owners. The EDA worked with the Saint Paul Port Authority to understand what was possible on the site under a multitude of scenarios. With that answer producing both good and bad scenarios the SPPA advised the EDA to take steps to control the property and the outcome. The EDA took the required steps and with the property under contract solicited developer proposals for the site and ultimately engaged with a developer to redevelop the site as well as two adjacent parcels. The EDA did this with minimal cash outlay and will ultimately be cash positive on the transaction. The new development will bring 82 units of market-rate housing, including 7 live/work units, to the City and significantly improve the West end of the Downtown District. This development is anticipated to add ~$20,000,000+ of new taxable real estate value and bring ~100 new residents to the City.

These developments, in total, have added or will add over $100,000,000 in taxable real estate value within the City over a 36-month period that did not exist prior to the formation of the EDA. We recognize the contributions of City staff, the Planning Commission, the Housing and Redevelopment Authority and, of course, the Mayor and City Council to what has been achieved in the last decade. The EDA has not achieved these results independently but has served as driving force to put many of these pieces in place.

Future Development

There are several other key parcels that are active and will bring additional value to the City. The EDA will continue to take the necessary steps to drive positive activity that will benefit the City and its residents. We will continue to focus on attracting and maintaining positive improvements that fulfill the housing and service needs of the community.

REDEVELOPMENT MASTER PLAN UPDATE

In 2012 the EDA commissioned a plan that outlined the vision of future development in North St. Paul with a focus on the downtown area. This effort was funded through a grant applied for and received by the EDA from Metropolitan Council’s Livable Communities program. In 2021 the EDA commissioned and funded an update to this plan that would account for development activity that had occurred or was in the planning phase since the original plan and revisited the collective vision for the City. The updated Redevelopment Master Plan was completed and adopted by the City Council, EDA, and Planning Commission in July 2022. The goal for this plan is that it will continue to serve as a comprehensive guiding document for the City as a consolidated and agreed vision for the future development. The EDA is proud of, not only the final product, but the collaboration and broad input that went into the current plan and believes it provides a definitive source on the aligned vision of where we are going. We encourage the City Council, Planning Commission, and others within the City, including the residents, to use this document frequently when evaluating planned development activity.

HIGHWAY 36 & 120 INTERCHANGE

The EDA has and will continue to monitor MNDOT plans related to modifications at Division and Highway 36 since changes at this intersection may significantly impact both development in the immediate area and access to Commerce Park and Downtown Areas from Highway 36. Currently, the MNDOT 10-year Highway Capital Work Plan does not include any work related to this interchange other than a road reconstruction project of Highway 120 (Division) in 2024 and a resurfacing project of Highway 36 scheduled to begin in early 2022.

During 2022, City leadership has participated in numerous meetings with MNDOT, Oakdale, Washington and Ramsey Counties to discuss the issue and the EDA believes it is imperative that we remain engaged in the plans for this interchange and take a strong position as an impacted stakeholder to any work that is planned for this area.

EDA FINANCIAL INFORMATION

The EDA is primarily funded by an annual levy approved by the City Council. The EDA expenditures have largely been allocated to staff support and outside agencies to prepare studies and other materials to assist in EDA activities. One of the goals of the EDA is to continue to build a fund balance that will allow the EDA to implement strategic development and assist in removing hurdles in areas that private investment have shied away from.

A summary of the financial position of the EDA as of December 31, 2022, are attached for your information. The complete financial statements for the EDA can be obtained from the City's Finance Director.

SUMMARY

The EDA looks forward to continuing its mission of building a strong, adaptive local economy in the City of North St. Paul for years to come. We are thankful for the support and collaboration of the Mayor, City Council, Planning Commission, the North St. Paul Business Association and other agencies and private parties that we have worked with. Mostly we are grateful for the support and opportunity to serve the residents and the businesses North St. Paul.

On behalf of the North St. Paul Economic Development Authority,

Robert Dew, EDA Chairman
Brian Frandle, City Manager, EDA Executive Director