09.€¦ · Kemps LLC 133 Valmont Industries 110 Source: City of Farmington, 2018 Figure 9.9 depicts the major employment industries throughout the City. Education is the top industry,

09. ECONOMIC DEVELOPMENT

This Economic Development Plan provides a high level and long-term roadmap for the City of Farmington and its partners (public, private, and nonprofit sectors) to work together to enhance employment, investment and quality of life opportunities that benefit the entire community. The city recognizes that local government has a responsibility for creating an environment in which economic development can occur. This plan also serves to examine and strengthen the city’s ability to compete effectively and prosper in the both the regional and increasingly global economy.

For Farmington, there are a number of motivating factors for having and maintaining this long-term economic development plan, which include:

» Defining the role and direction for the activities of the city’s Economic Development Authority

» Enhancing the city’s reputation as a proactive city that embraces partnerships with local and regional economic and business development organizations

» Acknowledging the important contribution of existing businesses to the city’s long-term economic sustainability

» Welcoming new businesses » Ensuring that municipal development costs are competitive with

other jurisdictions, especially within the industry sectors that are important to the city’s economic success

» Providing an environment of “certainty” for businesses by establishing clear, consistent policies for development, regulation, and taxation.

» Streamlining regulatory and permit processes while balancing community goals

» Providing responsive and flexible customer service at City Hall » Incorporating economic impact considerations in municipal

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decision-making » Acknowledging that communities must compete for investment,

human resources and infrastructure » Presenting a positive image of Farmington through the media,

citizens, and existing businessesThe most obvious ways in which economic development is influenced by local government are through decisions on land use and property taxation, but there are many other ways in which economic development can also be either positively or negatively affected. Examples include the working relationship between local government and the business community, the cost and time required to move through municipal review and approval processes and the effort made to understand and respond to the needs of business. The single most important thing a community can do to support and encourage development is manage and reduce developer/ investor’s risk, provide as much certainty as possible about the permitting process, and provide as much clarity as possible about economic development policies.

Economic development is about more than attracting companies and investments to a community. These opportunities are part of stimulating growth, but they should not be pursued at the expense of overlooking the needs of the community and existing businesses. In fact, research from numerous sources shows that existing businesses create 60%-90% of all new economic growth in a community.

Economic Development Authority (EDA)All cities have authority from the State Legislature to create an economic development authority (EDA). The purpose of a local EDA is to promote a city’s economic growth by providing business assistance and development programs tailored to the local community. Per MN Statute, an EDA is a public body corporate and politic and a political subdivision of the state with the right to sue and be sued in its own name. An authority carries out an essential governmental function when it exercises its power, but the authority is not immune from liability.

The primary powers of an EDA are:

» Promotion of local businesses and recruitment of new businesses » Issuing revenue bonds » Issuing general obligation bonds (approved by referendum) » Acquiring (via purchase, lease, gift or eminent domain) property;

property owned by the EDA and used for governmental purposes is tax-exempt

» Selling property » Developing property

9-164 FARminGton, minnESotA - 2040 compREHEnSivE plAn

» Serving as a limited partner in a partnership » Making loans to businesses » Operating a revolving loan fund to facilitate small business

investment » Acquiring rights or easements for creation of an economic

development district » Creating and administering tax increment financing districts and

plans » Operating and maintaining a public parking facility or other public

facility to promote economic development or avoid potential slum and blight conditions

» Conducting economic development studies, research and analysisThe role of the Farmington EDA is to serve as an advisory board to the City Council on matters related to economic development. Through policy development and implementation of new and existing tools, the EDA serves as the voice of economic development.

FARMINGTON’S EDA MISSIONTo improve the economic vitality of the City of Farmington and to enhance the overall quality of life by creating partnerships, fostering employment opportunities, promoting workforce housing, providing convenient shopping options for residents, and expanding and diversifying the tax base through development and redevelopment. To achieve this mission, a key aspect of the EDA’s efforts is to promote the retention and expansion of existing businesses, and the attraction of new businesses to the community.

Brief History of Farmington’s Economic Development planningThe Farmington Housing and Redevelopment Authority (HRA) transitioned into an Economic Development Authority (EDA) in February 2006. The Farmington EDA consists of seven commissioners. By MN Statute, a seven-member EDA, two of whom must be members of the city council, shall be appointed by the mayor with the approval of the City Council and serve six-year terms.

In 2007, the Farmington City Council and EDA completed an economic development strategy which addressed the following topics:

» assessment of current conditions, » review of competitive environment/common practices, » identification of internal capacity, » review of best practice, » facilitation of a strategic planning process.

Also in 2007, a city-wide commercial and industrial market study was


completed that conducted research and analysis of past trends, both retail and business park, and established future growth projections for the Farmington trade area. The results of the study were used in the City of Farmington’s Comprehensive Plan Update as well as to provide additional guidance in the creation of work plans for the City’s Economic Development Staff. The Summary of Findings and Development Strategy provided insights into development potential, space absorption and strategies that serve as a guide for future development activities.

As part of the city’s development of its 2030 Comprehensive Plan, the city’s first Economic Development chapter was established.

In 2010, the EDA established a 2011-2015 Economic Development Strategic Plan. This plan identified four economic development priorities: organizational plan, marketing, business retention and expansion, business attraction. The Economic Development chapter of the 2030 Comprehensive Plan was updated substantially as part of the 2012 Comprehensive Plan Amendment.

Concurrently, another economic development initiative began with the premise of aligning economic development goals of both the public and private sectors and became known as GROW Farmington. GROW’s foundation is to assist existing businesses to prosper while discussing the current state of Farmington’s business climate. In 2013, the EDA developed and adopted the GROW Farmington Business Attraction Plan, which identifies a variety of business attraction tools for Farmington to develop a proactive business climate.

In 2016, the EDA developed and adopted its 2016 – 2018 Strategic Plan for Economic Development, which is a three-year strategic plan that provides direction and prioritization for implementing the city’s economic development initiatives.

620

2,109 2,342

3,986 4,438

5,600

6,200

6,800

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1970 1980 1990 2000 2010 2020 2030 2040

Employment Projections

Projected

Census

Figure 9.7 Historic Growth & Projections of Farmington’s Employment


In 2018, the City Council, EDA, Planning Commission, and staff participated in a ULI Minnesota Navigating Your Competitive Future workshop, which addressed a broad range of economic development challenges and opportunities facing the City of Farmington.

Existing Economic conditionsAs seen in Table 9.1, the number of unemployed is a small percentage of the population.

According to data from the US Census, the majority of employees in the Farmington are not actually residents. Figure 9.8 displays the employment inflow and outflow from the year 2015, which shows that 24.1% of Farmington’s 4,971 jobs were taken by residents of the community. The inflow/outflow of employment in Farmington highlights the city’s status as a bedroom community; the number of residents who leave the city for work is over double the amount of total jobs within the city. This shows a need for a wider variety of jobs and economic development opportunities in Farmington.

24.1

% O

f W

orkforce Live in Farmington

4,971 Total Jobs

75.9% of workforce lives elsewhere

10,788 Farmington residents work

elsewhere

Figure 9.8 2015 Employment Inflow Outflow

1.1%

1.2%

2.1%

2.1%

3.0%

3.4%

5.4%

5.8%

6.2%

7.5%

9.6%

9.6%

17.2%

24.5%

Arts, Entertainment, andRecreation

Finance and Insurance

Wholesale Trade

Other Services (excluding PublicAdministration)

Public Administration

Professional, Scientific, andTechnical Services

Retail Trade

Utilities

Accommodation and FoodServices

Construction

Health Care and SocialAssistance

Manufacturing

Transportation andWarehousing

Educational Services

Figure 9.9 Top Industry Sectors of Employment

Table 9.1 Employment Status 2015

STATUS2015 2000

NUMBER % NUMBER %

POPULATION 16 YEARS AND OVER 15,666 - 8,604 -

In labor force 12,801 81.7% 6,868 79.8%

Civilian labor force 12,775 81.5% 6,851 79.6%

Employed 12,410 79.2% 6,687 77.7%

Unemployed 365 2.3% 164 1.9%

Armed Forces 26 0.2% 17 0.2%

Not in labor force 2,865 18.3% 1,736 20.2%

Source: 2011-2015 ACS, 2000 Census

Table 9.1 Top Employers in FarmingtonEMPLOYER EMPLOYEES

Farmington Public Schools – ISD#192 899

Federal Aviation Administration 800

Dakota Electric Association 200

Trinity Care Center and Trinity Terrace 160

Marschall Line Inc 150

River Valley Home Care 148

City of Farmington 147

R & L Carriers 133

Kemps LLC 133

Valmont Industries 110

Source: City of Farmington, 2018

Figure 9.9 depicts the major employment industries throughout the City. Education is the top industry, with the Farmington School District being a major employer in the city. This is reflected further in the list of top employers in Table 9.1.


Economic Development Goals 1. Healthy and diversified growth of existing and new businesses to

achieve the community’s 2030 and 2040 employment projections.2. A desirable commercial environment for residents is created

through growth from existing and new businesses.3. Redevelopment of vacant and underutilized properties in older

areas to revitalize these vital community areas.4. A well-trained and adaptable workforce is maintained within the

community to support the projected business and job growth.5. Diverse housing options and quality of life amenities that support

the needs and preferences of the community’s workforce into the future.

6. A three-year Strategic Plan for Economic Development that provides a dynamic and actionable tool for achieving the community’s economic development vision.

7. Public and private sector reinvestment in downtown to revitalize it as the community’s commercial, cultural, and recreational center.

8. Cultivation of strong relationships between existing businesses and the city to increase business retention.


Downtown Redevelopment planIn 2016, the Downtown Redevelopment Plan was adopted by the City Council. The Downtown Redevelopment Plan is intended to provide a shared vision for downtown that guides reinvestment efforts by both the private and public sectors, including key redevelopment opportunities. The Downtown Plan identifies redevelopment initiatives, connectivity improvements, and redevelopment phasing. Figure 9.10 shows the Plan’s Illustrative Downtown Redevelopment Concept, including redevelopment sites, park and open space enhancements, historic building revitalization opportunities, and proposed pedestrian/trail connections including a proposed riverwalk along the south side of the Vermillion River. Specific redevelopment initiatives are identified by the downtown sub-districts: Downtown Core, Downtown Edge, Riverside North, and Riverside West.

ILLUSTRATIVE REDEVELOPMENT PLAN

Illustrative plan shows key redevelopment and reinvestment location opportunities, including redevelopment initiatives.

Figure 10: Illustrative Downtown Redevelopment Plan

R e d e v e l o p m e n t P l a n & I n i t i a t i v e s 1 8

Figure 9.10 Illustrative Downtown Redevelopment Plan - 2016


DOWNTOWN CORE REDEVELOPMENT INITIATIVESA. Refurbish vacant historic buildings and other commercial buildings

B. Proactively support the retention of and improvements to current civic/municipal destinations and expand events in downtown

C. Redevelop vacant and under-utilized sites for new business and possibly housing

D. Improve and add outdoor public space for informal gathering places and events

E. Improve the pedestrian environment

F. Add key downtown core bike trail facilities and connections to the river and regional trail network

G. Create a complete downtown trail network

H. Add outdoor places for seating and gathering along 3rd Street and Oak Street

I. Improve Highway 50 crossings for pedestrians and bicyclists

J. Optimize public parking on-street and off-street

K. Strengthen downtown identity and wayfinding

DOWNTOWN EDGES REDEVELOPMENT INITIATIVESL. Redevelop sites to provide new housing options in Farmington

M. Improve design of existing commercial sites on Hwy 50

DOWNTOWN CORE REDEVELOPMENT INITIATIVESN. Expand Rambling River Park

O. Create a Riverwalk on the south side of the river and connect to the regional trail network

P. Add a pedestrian/bike bridge over the rail line

Q. Redevelop Riverside West

R. Redevelop Riverside North

IMPLEMENTATIONThe City Council must be committed to implementing this Plan. Important redevelopment powers reside solely with the City Council. Among the powers that may be needed to undertake redevelopment powers in the downtown are approving the establishment of TIF districts, approving the establishment of special service districts and levying service charges on properties in the district, levying special assessments for public improvements, and issuance of general obligation bonds to finance redevelopment and improvement projects.

Other important actions by the City Council can enhance the


downtown. Some examples include keeping and adding community events to make downtown a focal point, keeping civic institutions concentrated in downtown, avoiding subsidizing non-downtown projects that include businesses that should be located in downtown, and providing staff capacity and resources needed to plan and undertake projects in downtown.

The Farmington Economic Development Authority (EDA) should play a key role in implementing the Plan. Many municipal development powers for redevelopment are given to the EDA (using the powers of a housing and redevelopment authority). Additionally, EDAs often have more time to focus on plan implementation than a City Council. Some important EDA powers include acquiring property, making loans, constructing and operating public facilities, and establishing TIF districts.

Focus on Enterprise DevelopmentThe city’s economic development stratege generally focuses on enterprise development rather than the attraction or recruitment of outside businesses to relocate to Farmington. This “grow your own” businesses strategy simply means supporting the development of small to medium sized businesses in the community through a variety of proactive measures. Enterprise development is generally recognized as a relatively low-cost economic development strategy that is particularly well-suited for a variety of rural and urban communities. The following factores support the rationale for focusing on a “grow your own” strategy for economic development:

1. The majority of businesses are small or medium sized, and they employ the majority of people in the United States.

2. Entrepreneurial growth companies account for “at least two-thirds of net new jobs in the American economy.”

3. Small businesses incubate innovation leading to new businesses opportunity. They are responsible for more than 50 percent of all innovations, 67 percent of inventions, and 95 percent of all radical innovations.

4. We are living in a “new ‘Entrepreneurial Age’ in which entrepreneurs and their companies are transforming the economic landscape.”

5. Entrepreneurs, those focused on innovation and fast growth, comprise 5 to 15 percent of all U.S. businesses, and there are some in every location.

6. Entrepreneurs and the companies they lead play a critical role in fostering economic prosperity and are vital to our ability to compete internationally.


7. Fast growth companies occupy a variety of business sectors, but they often start at the kitchen table or in the garage with less than $50,000.

8. Both our defense capability and homeland security require a robust small business sector.

9. Once established, a strong entrepreneurial environment in distressed or remote communities can lead to success in regional relocations of related businesses.

If the first element in a proactive approach to entrepreneurship is well-organized and effective business support services, then the second essential element is community leadership. City leaders play key roles in businesses success by:

» Creating a compelling vision; » Communicating the vision to others; » Developing a plan to support business success; » Demonstrating commitment.

This approach resulted in the adoption of the GROW Farmington Business Attraction Plan in 2013.

Economic Development Strategic plan 2011-2015The city’s Economic Development Strategic Plan 2011-2015 resulted in numerous accomplishments in support of the plan’s four priorities, including the following:

PRIORITY #1: ORGANIZATIONAL PLAN - UNITEAccomplishments: Vision and mission have been set; Improved internal communication about development projects; ongoing internal business friendly approach for all development and/or infill projects; Downtown Commercial District defined and design standards approved; GROW Farmington partnership is ongoing and process to align economic efforts and initiatives will be refined by newly established Community Leadership Steering Committee; Business Development Grant and Commercial Rehabilitation grant programs created and grants awarded to five different businesses.

PRIORITY # 2: MARKETING - PROMOTEAccomplishments: Farmington’s Business Guide was created and is maintained regularly; Economic Update was created and published monthly for 3 years; Two (2) Realtors Forums held; Unified messages have been proposed; staff attends networking events locally and regionally, Economic Development section of website created/maintained; ribbon cuttings coordinated, promoted and press releases provided to local news papers; Farmington 1st Flyer created (top 10 reasons to shop local).


PRIORITY #3: BUSINESS RETENTION AND EXPANSION - UNITEAccomplishments: Farmington Business Association (FBA) , Farmington-Business Networking International (BNI), and Dakota County Regional (DCR) Chamber of Commerce meetings and networking events are attended regularly; Created and implemented the Business Outreach Program; Available Space spreadsheet maintained; business incentive programs created (Business Development & Commercial Rehab); sale of McVicker lot (expansion of Immanuel Dental).

PRIORITY #4: BUSINESS RECRUITMENT - BRANDAccomplishments: Established a Clear Downtown Boundary; Instituted Downtown Design Standards; Promote Infill Development; Promote available commercial buildings; Attended webinars; Microenterprise Grant program created; sale of EDA – owned property results in two (2) new businesses locating in Farmington.

RETAIL DEVELOPMENT STRATEGYGrowing population and households in Farmington’s trade area will provide support for a growing number of retailers over the next 20 years. Farmington’s comprehensive plan emphasizes maintaining Downtown as a major retail area and also provides for retail expansion into the Spruce Street Commercial Area. Additional future planned retail areas are at the intersection of Hwy 3 & 195th Street, Flagstaff Ave & 195th Street, and Flagstaff Ave & Hwy 50. These should be convenience shopping areas. These convenience shopping areas should be five to ten acres in size and designed to accommodate the types of uses found at Marketplace and Charleswood.

Downtown Farmington is the area’s dominate retail location due to its historic base of retail stores and services. It is important to improve Downtown’s attractiveness to retailer stores and services.

Retail potential in Downtown Farmington can be strengthened by locating new businesses that serve as major customer draws in the downtown area. This is similar to the city’s decision to build its new City Hall in Downtown.

To encourage retail development in Downtown Farmington, the city could consider establishing a retail incubator to attract new retail stores to Farmington at affordable occupancy costs. The key to maintaining the vitality of Downtown Farmington is to have a growing number and diverse mix of attractive retail stores, restaurants and services that can meet the needs of trade area residents and visitors.


Building owners and retailers in Farmington’s older retail areas (Downtown and Highway 3) should be encouraged to update and modernize their space to present a more contemporary appearance. This includes updating storefronts and interior finishes and fixtures. Downtown retailers should seek to be comparable to their competitors on Pilot Knob and in Apple Valley, Lakeville and Rosemount.

Over the next 25 years, some of Farmington’s existing retail buildings are likely to be redeveloped to accommodate expansion of existing retailers or new retailers choosing to locate in these areas. The City of Farmington should encourage these redevelopment activities and should establish programs to enable redevelopment to be economically feasible.

BUSINESS PARK DEVELOPMENT STRATEGYSince 1990, significant business park space has been developed in Farmington. Industrial Park tenants indicated they located in Farmington due to the availability of affordable land and friendly business climate. Farmington should capitalize on this “good will” in its business development activities. This will help to mitigate development industry misconceptions of Farmington identified in broker interviews. A strategy that will help Farmington achieve a balanced growth would include the following:

» Land use policy that promotes a balanced growth that includes a mix of office and industrial users to help support Farmington’s tax base and minimize the real estate tax on homeowners.

» Target industries that are not heavily dependent on transportation. Because Farmington is not on a primary transportation corridor like I-35, industries that depend on a road network to receive and ship large quantities of raw materials and finished goods will find Farmington less accessible than other locations.

» Building values tend to reflect the wages and talent of the people working inside. It is important to create jobs that enable employees to live within the community. These employees are likely to have higher disposable income to support local businesses. This will reduce traffic congestion created by commuters that leave the community to find employment.

» Development covenants for the industrial park will be important to ensuring that higher value real estate is developed. However, some communities create covenants that are overly restrictive and complex, which will often discourage industry from locating in their area. Covenants that are extensive and detailed are not necessary and can suggest an unfriendly local business climate.

» Focus on the creation of wealth rather than the number of jobs created. High value investment will create jobs for highly paid skilled workers to operate the facility. High value investment tends to create a sense of permanence. Light assembly and warehouse


tenants and owners are fairly mobile. The spaces they occupy are flexible and commodity real estate that is easily adaptable for new users. High value investment often includes expensive equipment that is very difficult and costly to move and often requires customized buildings.

» The area to the west of the Industrial Park should be guided business park and sized to accommodate projected demand in this report.

» It is very important to control the cost of land to promote business park development. In order to minimize up front acquisition and infrastructure cost, the EDA should investigate several scenarios to control land and cost. These include: - This could be as simple as acquiring a renewable option on the

proposed business park property. Option money is not subjected to ordinary income tax until the option is exercised. Therefore, a land owner could continue to farm the land and collect option money not immediately subject to income tax.

- The EDA could enter into a purchase agreement with a land owner that includes a “take down” provision that would allow the EDA to exercise a purchase at a predetermined price when a buyer is found or to take down land on a scheduled basis over an extended number of years.

- The EDA could enter into an option agreement for a nearby farm at a lower price and facilitate a 1031 tax free exchange with another land owner near to the business park allowing the owner to avoid paying a capital gain tax.

» It is important to develop a business park layout that is flexible. Utilities should not be extended beyond the entrance. To do so would commit the city to a final design and preclude flexible lot configuration and size for potential users. A preliminary plat can be developed and finalized as each lot is sold.

» The EDA should consider developing a business incubator building. This could be a multi-tenant building with added improvements that would allow emerging companies with new technologies to become established and hopefully later grow into the business park. It may be necessary to provide TIF, deferred assessments or other incentives to encourage a private developer to create a building with these added amenities.

» The EDA should create a targeted marketing program focusing on specific industries and businesses south of the river. This would include direct mail and personal contact by EDA staff.

Farmington’s development strategy should focus on local and regional businesses that are likely to have more flexible location criteria than national firms. Farmington’s favorable business climate is a significant advantage. Farmington has the ability to build on the success of the existing Industrial Park.


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Documents

09.€¦ · Kemps LLC 133 Valmont Industries 110 Source: City of Farmington, 2018 Figure 9.9 depicts the major employment industries throughout the City. Education is the top industry,