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HomeMy WebLinkAbout1992 05-18 EDAM Special Work Session1 MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA EDA SPECIAL WORK SESSION MAY 18, 1991 EARLE BROWN HERITAGE CENTER CALL TO ORDER The Brooklyn Center Economic Development Authority met in special session and was called to order by President Todd Paulson at 7:13 p.m. ROLL CALL President Todd Paulson, Commissioners Celia Scott, Jerry Pedlar, and Philip Cohen. Commissioner Dave Rosene arrived at 8:35 p.m. Also present were City Manager Gerald Splinter, EDA Coordinator Brad Hoffman, Heritage Center Manager Judith Bergland, Assistant EDA Coordinator Tom Bublitz, and Council Secretary Carla Wirth. APPROVAL OF MINUTES MARCH 18, 1992 President Paulson amended the first paragraph on page 8 as follows: "President Paulson discussed his desire to see all of the news regarding the Heritage Center. The City Manager commended There was a motion by Commissioner Cohen and seconded by Commissioner Scott to approve the minutes of the March 18, 1992, EDA work session as amended. Vote: Three ayes, one abstain. The motion passed. Commissioner Pedlar abstained from voting. BROOKLYN CENTER BUSINESS EXPANSION AND RETENTION PROGRAM Commissioner Cohen explained he works in the same office suite as Joseph Strauss and even though he has not been working on this project, except on the legislative part, he was concerned about an implied conflict of interest. Commissioner Cohen stated he did discuss this matter with the City Attorney who did not feel a conflict of interest existed, but because of his position with Mr. Strauss, someone may misconstrue the situation and feel a conflict exists. Because of this, he indicated he would not take part in the discussion of the proposed Business Expansion and Retention Program. 5/18/92 1 The EDA Coordinator indicated the EDA has discussed, in concept, a Business Expansion and Retention Program in conjunction with other north Metro communities (Brooklyn Park, Blaine, and Fridley). The intent of this program is to create an organization to promote business expansion and realistic economic growth. Program steps include surveying to gain a better understanding of existing business, capacity, ability to grow or expand, etc. Business owners would then become more involved, resulting in a feeling of ownership. The EDA Coordinator reviewed concepts to help businesses network with other area businesses for joint purchasing and to keep cash flow within this area. The final stage would be to get to a point of marketing businesses and services throughout the region and eventually fund the program through commissions. The EDA Coordinator explained the overall concept is to try and create growth within the community by creating a better local business climate. He then reviewed funding for the program which includes a $50,000 state grant. He estimated the cost to be $30,000 for each community which could include some CDBG funds for the initial stage. Joseph Strauss, Community Resource Partnership, pointed out the four communities involved have not conducted business surveying to the extent the program will address. He estimated it may take up to three years to gather business survey data since there are 4,500 businesses within the four member communities and possibly another 200 to 400 that the City does not know about. They feel seven people will be needed to conduct 1,500 business surveys per year. Community colleges will also become involved to coordinate employee training with business needs. The Chamber of Commerce will be approached to find interested business owners who want to volunteer their time. After survey data has been entered into a computer, a strategy will be developed to impact the greatest opportunity for business creation and expansion. Mr. Strauss indicated he does not know of any other area in the Midwest where this type of package is being worked on to pull together business data for the benefit of the community. In response to Commissioner Pedlar's questions, Mr. Strauss responded a similar project is being done in Columbus, Ohio and Baltimore, Maryland, but nothing in the Midwest area or to this extent of strategic planning. He added it is difficult and somewhat premature to measure potential benefits at this point. Commissioner Scott pointed out Brooklyn Center is almost fully developed, making marketing strategy even more important. She supported an effort to work with businesses to accommodate their needs with expansion and finding trained employees. Commissioner Scott encouraged the Chamber of Commerce to continue with their effort to become actively involved with business growth, rather than functioning as a social club. She felt the proposed plan would become the "backbone" of the business community and help provide a stable business environment which will help all residents in Brooklyn Center. She also felt the plan would help attract desirable business for the existing vacant buildings that best suit their needs. Mr. Strauss agreed and pointed out 60% to 80% of business development comes from within the community. 5/18/92 2 1 1 1 1 1 1 The EDA Coordinator emphasized the proposed plan is a total approach to keep business in the community and keep neighborhoods vital. Karl Gaardsmoe, Chamber of Commerce President, indicated they are very interested in doing what is needed to help Brooklyn Center with this effort. Mary Welch agreed the survey data would be invaluable to the Chamber of Commerce. She supported a joint effort with neighboring communities. Mr. Strauss explained the business survey data will need to be updated periodically to remain current. He estimated it may cost $10,000 to $15,000 per year to keep the information updated. President Paulson thanked Joe Strauss and Commissioner Cohen for their work in obtaining grant funding for this project. He supported an emphasis one creation, retention and expansion. Mr. Strauss felt it was premature to discuss strategy for job creation because the plan has not yet identified assets. Once the data is collected, existing business and services can be analyzed and whether labor can be supplied locally. The EDA Coordinator agreed the plan will result in creating jobs, which can be emphasized in the name of the plan. With regard to needed employees, Mr. Strauss suggested three to four part -time surveyors be hired. He estimated each can survey two to three businesses per day. The project manager's salary will range from $20,000 to $30,000 plus fringes. A consultant and computer specialist will also be needed along with someone to input the data. President Paulson suggested a professional firm be hired which would shorten the length of time needed for surveying work and provide a "snap shot" of the business community within a shorter period of time. Mr. Strauss estimated a 30% to 40% increase in cost to double survey work. He preferred to hire local people from the community who could be trained regarding survey work. This would also take advantage of local employment. The EDA Coordinator explained the process for developing a joint powers agreement between the four communities involved. Discussion then turned to the best method to assure competitive pricing for conducting the proposed program. Mr. Strauss felt each community would approach funding differently since the others may not be considering CDBG funds. Commissioner Pedlar indicated support of the concept and use of internal training. He suggested staff be directed to prepare a resolution to fund the City's participation including the use of CDBG funds. President Paulson asked if the proposed program could assume an entrepreneurial role where data information is sold to businesses or businesses are asked to contribute towards the survey work. Mr. Strauss felt this would happen over time and the business community itself would provide resources. The EDA Coordinator added the joint purchasing aspect could include participation fees. Revenue will also be raised from commission sales. At that point, the communities will assume a lesser role in the program and the business community will take on a more predominant role in keeping the organization going. 5/18/92 Mr. Strauss responded to President Paulson's question by explaining the Community Resource Partnership (CRP) is a corporation he established with Sarah Nelson which will hire the people and oversee the program. He added he will commit the time necessary to this project. At President Paulson's request, Mr. Strauss indicated he will provide the EDA with information regarding his involvement, costs, etc. With regard to monetary benefit to ratio of dollars spent, Mr. Strauss explained more data is needed. President Paulson indicated the program would be easier to "sell" if the EDA knew the benefit to the community, extent of need, number of businesses the City is losing, amount of dollars going out of the northwest suburbs, etc. Mr. Strauss reviewed the business survey being conducted by the City of Anoka with involvement from the community college. The EDA Coordinator clarified CRP would work for the board established by the joint powers agreement. President Paulson indicated he has no problem with the concept but wanted to make it clear that the benefit to the community includes job creation and retention. He suggested the program title be changed to include this indication. Commissioner Scott pointed out the program indicates they will be seeking volunteers from colleges. She reiterated the Chamber of Commerce also needs to "sell" this program because of its benefit to the business community and since it will be a valuable marketing tool for the Chamber. She felt the biggest benefit will be keeping jobs in the community and providing employment to residents. Consensus was reached to conceptually support the Business Expansion and Retention Program and direct staff to prepare a resolution to fund the City's participation. The EDA requested staff provide parameters including how the Chamber of Commerce and business community will be involved, revising the title to include the mention of job retention, whether bids or proposal will be requested, projected expenses, involvement of CRP staff, extent of the need and benefit to the community. EARLE BROWN HERITAGE CENTER REPORT The EDA Coordinator reviewed the Earle Brown Heritage Center quarterly report which indicates the deficit between revenues and expenses appears to be significantly higher (55.2% for the quarter) in 1992 than in 1991. However, one year ago the EDA was in the transition from management by EBF to the City. At that time, there was no real budget or accounting system in place. It was noted 23.2% of the budget has been expended, and if that pattern continues expenditures should run an estimated $82,000 under budget. He felt they have established control over the operational expenditures of the Heritage Center. On the revenue side, the Heritage Center is up 63.3% over the first quarter. Weekly sales during the first quarter have averaged $8,018. At that rate, revenue should project to $12,530 per week at the Center, which is in line with budget projections. The EDA Coordinator indicated he feels things are headed in the right direction, but would like to recommend the EDA consider a proposal from Marquette Partners to perform a comprehensive evaluation of the Heritage Center operation. Marquette Partners is a small firm specializing in workouts for troubled or difficult properties in the hospitality industry and he felt it would be beneficial to have an independent review of the operation along with corrective suggestions. 5/18/92 4 1 1 1 1 The EDA Coordinator indicated the sales staff is reacting to incoming calls only and are too busy to be out on the street making direct contact to expand the market. He felt current staffing levels are not sufficient to react proactively, and he felt additional sales staff was needed to expand the business. Commissioner Pedlar felt it was too early to consider this type of analysis since results from the public relations firm have not been received. He agreed with the need for the sales staff to be out in the public calling on companies who would use facilities at the Heritage Center. Commissioner Pedlar added it is difficult to consider adding staff until the management can quantify work they are doing now and current needs. Commissioner Rosene arrived at 8:35 p.m. The Heritage Center Manager explained dealing with drop -in sales people, who do not know her needs, is time consuming. She pointed out the Heritage Center sales representatives provide full service, meaning they deal with the group throughout the entire event. This results in making it difficult to be out of the office for sales calls. The Heritage Center Manager pointed out they do make an effort to work with existing business clients to bring in other groups to tour the facility and bring in additional business. Commissioner Pedlar requested additional information including average dollars per sale, productivity of existing sales reps, criteria for adding additional staff, method of projections, etc. President Paulson agreed there is a need for additional information, which could be provided by Marquette Partners. He felt someone who works with the hospitality industry could provide an outside objective approach including comments on the need for additional staffing. Commissioner Scott felt staff could provide the data being requested by Commissioner Pedlar. She felt one of the biggest factors for repeat business was the follow through clients receive from Heritage Center staff. She complimented Heritage Center management for cutting back on part -time hours and using only the help that is needed. Commissioner Scott pointed out the Center needs other people in the business community to advertise the Center's facilities. Commissioner Cohen felt the response cards measure feedback from people who have used the facility regarding equipment needs, etc. With regard to management of the Center, he felt it was reasonable to hire Marquette Partners. The EDA Coordinator stated he can provide information on productivity and measuring sales to support the need for another sales person. Marquette Partners would provide an outside opinion about pricing structure, operation of the facility, etc. 5/18/92 5 Commissioner Pedlar pointed out the Heritage Center is moving in the right direction and he would rather spend $10,000 on hiring another sales person than on a study. Commissioner Rosene felt staff was doing a good job operating the Heritage Center, and it appears they need more sales people to do the job. He pointed out the Marquette Partner's recommendation could provide suggestions for turning on the "after burners" and reaching 100% of capacity. Discussion then turned to catering with the EDA Coordinator reporting D'Amicos, the managing firm for Atrium Catering, was fired shortly after the Super Bowl. Atrium continues to provide catering services under the existing contract. Atrium, which is a subsidiary of Omega Food, is being sold to Safeco who wants to retain catering at the Heritage Center. However, D'Amicos also wants to be the catering provider. It appears the City may benefit from this "catering war" when the existing contract expires in November, including the possibility of free marketing. Commissioner Cohen requested information on cost of operation, costs per hour, etc. Commissioner Pedlar reported on a seminar that was held at the Holiday Inn since the Heritage Center was already booked. He felt the Heritage Center offered better meeting rooms, staffing and competitive pricing. He indicated he would like to see more information before supporting hiring Marquette Partners. Commissioner Rosene indicated he supports staff's recommendation for an additional staff person. He concurred with Commissioner Pedlar about delaying an outside study until further information can be reviewed. President Paulson indicated the EDA needs to look at all options, which may include a scaled -down proposal from Marquette Partners. He supported internal evaluations and addressing other concerns when the catering contract is negotiated. Commissioner Pedlar questioned the time line for staff's proforma. The EDA Coordinator indicated they had estimated it would take three to five years for the Heritage Center to break even. He felt they were in the middle of this time line and in line with that projection. While nothing has changed in the industry to increase the time line, the EDA Coordinator felt an urgency to have the Heritage Center self- supporting and no longer a burden to tax payers. Commissioner Pedlar stated he shares this concern but does not support spending $10,000 on a study if current progress is within the previously established time line. He pointed out the Heritage Center is an excellent facility and if pricing is already competitive, the need is increasing business (sales staff). He requested additional information from staff to support that decision. 5/18/92 6 1 1 1 1 Commissioner Cohen pointed out the audit will be completed shortly and may include comments regarding need for increased sales. President Paulson stated he did not think the auditor would make a judgement on staffing needs, but it may be possible to request their recommendation. He supported tabling this item and requesting additional recommendations from the auditor regarding staffing needs. Commissioner Rosene felt adding a sales person would increase revenue the most quickly. He supported adding one sales person and allowing ninety days to give them an opportunity to establish a track record. Commissioner Pedlar stated while he is willing to wait for the audit report, he did not think they would address operational or productivity issues. He suggested management identify the need and projected results. The City Manager arrived at 9:35 p.m. There was a motion by Commissioner Scott and seconded by Commissioner Pedlar to table consideration of a comprehensive evaluation by Marquette Partners and hiring an additional sales person until the first meeting in June, to direct staff to provide information showing the basis for a sales person, volume of sales existing staff is creating, number of calls going unanswered, and to contact the auditing firm to determine whether they can enlarge the audit scope to provide any additional information evaluating the present financial situation, whether existing staff is sufficient to handle it or whether another position is needed. This information will be provided to the EDA for consideration at their June meeting. The motion passed unanimously. CHAIR SELECTION There was a motion by Commissioner Cohen and seconded by Commissioner Pedlar to direct staff to make the final decision on chair selection for use at the Earle Brown Heritage Center. The motion passed unanimously. ART SHOW BROOKLYN CENTER PROMOTIONAL EVENT The EDA Coordinator explained staff has researched events to promote Brooklyn Center and suggest an art show be considered. The art show could be scheduled during slower months (June), and focus on 100 young artists ranging from high school juniors to college sophomores with $50,000 in scholarship money. Staff also suggests very prestigious judges be selected. The EDA Coordinator explained the art show could evolve to a high profile show which attracts artists throughout the United States, or even internationally. In response to President Paulson's question, the EDA Coordinator explained the existing state- wide competition has $5,000 in award money. He pointed out the Wausau Art Show attracts international artists and felt an art show in Brooklyn Center could do the same. If approved, applicants would submit slides of their work and the judges would select the best 100. Procedures for attracting poor students will also have to be considered. 5/18/92 President Paulson felt an art show of this type would promote Brooklyn Center in a positive manner and supported further research. He commented on an Arts Ordinance that other communities have adopted where a certain percentage of every project is allocated to work some type of art form into the project. There was a motion by Commissioner Pedlar and seconded by Commissioner Scott to direct staff to pursue development of an art show including securing of sponsors and scholarships, judges, advertisement and promotion methods, etc. The motion passed unanimously. STATUS REPORT ON 6715, 6717, 6719 AND 6721 HUMBOLDT AVENUE The EDA Coordinator reported staff is preparing the paperwork to obtain an exemption to use CDBG money to purchase the Ketroser property and Lyn -River Apartments with CDBG funds but not replace them on a one to one basis. The EDA Coordinator stated he would also like to enter into negotiations with Roger Olson of the Department of Housing and Urban Development (HUD) about acquisition of the apartment buildings on Humboldt Avenue. The EDA Coordinator indicated he was negotiating with Irwin Ketroser, the owner of the 18 unit building, but it has been sold. He added this building has quite a few compliance orders to comply with. The EDA Coordinator suggested the City make application to MHFA for funding to demolish this building, using CDBG funds to relocate existing tenants. It may also be possible to use TIF to offset some costs. The EDA Coordinator provided an update of the new Land Trust Program which was established last year. He recommended staff apply for funding to acquire the Lyn -River Apartment buildings and motel. It was noted the owner of the Lyn -River Apartments has contacted staff expressing an interest in selling the buildings. He suggested the EDA consider constructing a single -story senior townhouse project on this property since a tremendous demand exists for affordable senior housing. He added he felt the EDA would have to own and operate the project to make it work. Commissioner Scott supported the concept for removing the Lyn -River apartments and constructing a senior townhouse project. She agreed a desperate need exists for senior housing. She felt many Brooklyn Center seniors are interested in selling their houses due to upkeep responsibilities and would like to stay in the City if within their income ability. Commissioner Scott pointed out these homes usually sell quickly since they are perfect "starter homes" for young people. Commissioner Cohen suggested consideration be given to a streetscape park -like area. He requested information regarding the total number of apartment vacancies and potential impact on vacancy rate resulting from the possible demolition of the Lyn -River Apartments. President Paulson agreed all options need to be considered, including a parkway tying into the other side of the River, commercial strip mall and senior housing. 5/18/92 1 1 1 There was a motion by Commissioner Scott and seconded by Commissioner Pedlar to direct staff to pursue options for the Lyn -River Apartments including application for a grant from the Land Trust Program. The motion passed unanimously. President Paulson declared a conflict of interest regarding the next agenda item. He left the meeting at 10:05 p.m. at which time Vice President Pedlar chaired the remainder of the meeting. STATUS OF EDA OWNED PROPERTY AT 5449 EMERSON AVENUE NORTH The Assistant EDA Coordinator explained staff worked with Mr. Chuck Stevens last year regarding the construction of a home at 6730 Perry Avenue using panel construction manufactured by Thermosave Building Products, Inc. However, Thermosave did not execute the purchase agreement. Mr. Stevens has now approached staff with renewed interest in the property using a similar panel. Mr. Stevens has also indicated he prefers to find a qualified low- income buyer rather than building a spec house. To date, the panels have not received FHA approval. The Assistant EDA Coordinator stated he has also received a call from a handicapped resident who is interested in working with Mr. Stevens to construct a single family home at 5449 Emerson Avenue North. This small lot is of interest due to the need for yard landscaping requiring minimal care. The Assistant EDA Coordinator indicated he contacted Marquette Bank to see if the resident could qualify. He requested EDA input on whether staff should pursue the option of presenting a proposal to construct a single family home on the property. Commissioner Cohen felt this departs from the City's policy and supported marketing these properties again to see what bids are received. He pointed out the panels Mr. Stevens would like to use have not been approved yet. Commissioner Scott and Vice President Pedlar concurred by indicating they do not want to get into the position of building houses. They suggested staff inform the resident of builders who work with this type of plan. Consensus was reached to direct staff to advertise 5449 Emerson Avenue North. 5/18/92 9 INFORMATION BROCHURE The EDA Coordinator asked if staff should pursue a new informational brochure promoting Brooklyn Center. It was noted the existing brochure from 1977 is somewhat outdated. The EDA Coordinator reviewed several options including a folder where informational pieces can function to highlight different departments. Commissioner Scott pointed out a folder containing many different pieces of information is sometimes discarded. She preferred a booklet format where all information is included in one piece and not easily lost or misplaced. There was a motion by Commissioner Cohen and seconded by Commissioner Rosene to direct staff to request a proposal from Greta Wedell to prepare an informational/ promotional brochure for Brooklyn Center. The motion passed unanimously. ADJOURNMENT There was a motion by Commissioner Scott and seconded by Commissioner Cohen to adjourn the meeting. The motion passed unanimously. The Brooklyn Center Economic Development Authority adjourned at 10 :25 p.m. Recorded and transcribed by: Carla Wirth Northern Counties Secretarial Services 5/18/92 10 Todd Paulson, President 1