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Economic Development Report 2021ECONOMIC DEVELOPMENT REPORT CITY OF NEW HOPE, MINNESOTA SEPTEMBER 1, 2021 The New Hope Economic Development Report highlights redevelopment projects throughout the city from the previous year and the tools that are in place to promote development activity. The city’s Economic Development Authority promotes and facilitates business development and housing redevelopment activities. OVERVIEW & HISTORY CITY OF NEW HOPE OVERVIEW & HISTORY LOCATION The city of New Hope is a suburb located northwest of Minneapolis with strong neighborhoods, an abundance of parks and recreational opportunities, excellent schools, and great shopping nearby. The city has easy access to the entire Twin Cities area with major arterials of Highway 169, Highway 100, Interstate 694, and Interstate 394 all nearby. POPULATION (2020 CENSUS)SIZE/AREA YEAR FORMED 21,986 5.1 square miles 1953 BUSINESSES JOBS SHOPPING CENTERS 480 11,080 5 SCHOOL DISTRICT SCHOOLS PARKS/ACREAGE Robbinsdale Area (281)5 18/200 HISTORY In the early 1900s, New Hope was a farming-rich community. The area was settled as part of Crystal Lake Township and became the home for many family farms. As housing developments spread west from Minneapolis in the 1930s, the residents of Crystal Lake Township began the movement to incorporate the township. In 1936, the city of Crystal was incorporated. Forming a city, though, was not supported by all residents in the township. The rural residents in the western half of the township broke away from the city of Crystal and formed their own township. The resistant residents, mostly farmers, were unhappy about paying taxes for projects such as street lighting and sanitary sewer. The name the farmers selected for their new township was a reflection of the time, New Hope. Many residents along the New Hope-Crystal border formed groups and requested to be annexed by Crystal in order to receive what were the most modern city services at the time. Others, however, were happy to be part of New Hope township and remained separate from Crystal. Therefore, pockets of New Hope residents were created along the eastern boundary. By the early 1950s, the rapidly developing township of New Hope chose the fate it had eluded just over 15 years earlier. In 1953, New Hope incorporated as a city to prevent losing more of its land and residents to Crystal via annexation. This move was again opposed by the farming community of New Hope, but housing developments between 1936 and 1953 had made farmers a minority in New Hope. When the township was incorporated, it had 600 residents. The city grew rapidly and was home to over 2,500 people by 1958. This rapid population growth continued through the 1960s, and by 1971, there were 24,000 residents in New Hope. The population of the community has declined slightly since 1971. PAGE 2 SUMMARY OF ACTIVITY CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT The city of New Hope’s Economic Development Authority (EDA) promotes and facilitates business development activities. It considers proposals on a case-by-case basis and utilizes a broad base of public financing options. Membership of the EDA is identical to that of the New Hope City Council. Council members are appointed to the commission for terms concurrent with the City Council terms and the mayor acts as president of the authority. The city manager serves as the executive director. The city employs various resources to help businesses grow and reach their goals. BUSINESSES & ASSISTANCE PROGRAMS Local commercial and industrial businesses are extremely important to the city. The City Council has undertaken programs and initiatives to address both commercial and industrial properties. These programs focus on: • Retaining existing businesses. • Assisting with expansions. • Attracting new businesses to vacant available buildings. • Attracting new construction to a limited number of available vacant sites. • Improving communication with businesses and responding more effectively to business concerns and inquiries. BUSINESS SUBSIDY PROGRAM The city’s business subsidy program addresses policies related to the use of Tax Increment Financing (TIF), tax abatement, and other business assistance programs for private development. It serves as a guide in reviewing applications requesting business assistance. All projects must meet mandatory minimum approval criteria and the level of assistance is evaluated on a case-by-case basis. Assistance can cover project costs as allowed for under Minnesota Statutes. The EDA considers using a business assistance tool to assist private developments in circumstances in which the proposed private project meets one of the following uses: • Provides a diversity of housing not currently provided by the private market. • Provides a variety of housing ownership alternatives and housing choices. • Promotes affordable housing for low- or moderate-income individuals. • Promotes neighborhood stabilization and revitalization by the removal of blight and the upgrading in existing housing stock in residential areas. • Removes blight and encourages redevelopment in the commercial and industrial areas of the city in order to encourage high levels of property maintenance and private reinvestment in those areas; including façade improvement. • Increases the tax base of the city to ensure the long-term ability of the city to provide adequate services for its residents, while lessening the reliance on residential property tax. • Retains local jobs, increases the local job base, and provides diversity in that job base. • Increases the local business and industrial market potential of the city. • Encourages additional unsubsidized private development in the area, either directly or through secondary “spinoff” development. • Offsets increased costs of redevelopment over and above the costs that a developer would incur in normal development. • Accelerates the development process and achieves development on sites that would not be developed without this assistance. PAGE 3 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 4 LOAN PROGRAMS The city has partnered with the lending center at the Center for Energy and Environment (CEE) to offer a convenient one-stop service that provides commercial and non-profit property owners in New Hope access to a comprehensive array of financing and rehabilitation services. The CEE Loan Program provides financing to New Hope businesses making cost-effective, energy efficiency improvements. Nonprofit organizations that are interested in reducing their energy costs are eligible to apply for funds through the CEE to help finance energy-efficient projects implemented in properties owned and/or occupied by nonprofit entities. OUTSTANDING BUSINESS AWARD PROGRAM The city’s Outstanding Business Award Program was initiated in 2006 to recognize contributions by businesses to the local community. The purpose of the award program is to recognize businesses for noteworthy accomplishments such as expanding or improving a building or property, creating new jobs for New Hope residents, reaching a milestone year in business, or providing outstanding community service. Nominations are accepted quarterly for the award. BUSINESS NETWORKING GROUP The New Hope Business Networking Group was started by New Hope business owners in 2010 to create an open forum for networking within the city. The group is open and free to all New Hope business owners. The Business Networking Group meets regularly at one of the participating businesses. The city is also a long-time member of the TwinWest Chamber of Commerce. OPEN TO BUSINESS Open to Business is a partnership between New Hope and the Metropolitan Consortium of Community Developers (MCCD), an association of nonprofit community development organizations serving the Twin Cities. With the help of a matching grant from Hennepin County, the city works with MCCD to provide business consultation services and financial advice to small local business owners and aspiring business owners. The program offers help in several areas, including: • Business plan assistance • Financial management • Bookkeeping set-up and training • Loan packaging • Real estate analysis • Marketing assistance • Strategic planning • Professional referrals Entrepreneurs can meet with a business advisor one-on-one over Zoom or in person by scheduling an appointment. Open to Business facilitated one direct loan of $12,035 in 2016, and two direct loans of $100,000 and $25,000 leveraging over $1,000,000 in outside capital in 2017. In 2018, one loan was facilitated and approved through the program. Open to Business provided services for three new businesses and one existing business in 2019. To prevent defaults and abandoned commercial spaces in 2020, multiple municipalities received emergency CARE Act funds from the U.S. Treasury. Open to Business helped DEED and Hennepin County design a one-time forgivable loan program for businesses that were forced to close and did all of the underwriting and disbursements. During this time, Open to Business advisors also continued to provide technical assistance and advisory services for over 50 metro area communities, helping four New Hope businesses navigate funding resources. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 5 EMPLOYMENT There are approximately 480 commercial/industrial/service businesses in the city, 31 of which opened in 2020. These businesses account for approximately 10,360 jobs in the city. The city’s 15 largest employers, which are listed below, account for nearly 4,900 of those jobs. MAJOR EMPLOYERS Employer Products/Services New Hope-Based Employees (Total Employees) Independent School District 281 Education 791 (1,852) Hy-Vee Grocery & convenience store 632 Minnesota Masonic Home/ North Ridge Care Center Skilled nursing care facility 560 St. Therese Home of New Hope Skilled nursing care facility 544 (1,117) Horwitz Mechanical contractor 345 Padagis Pharmaceutical and medicine manufacturing 323 Intermediate District 287 Education 266 (943) City of New Hope Government agency 262 including seasonal staff YMCA Health club 228 Liberty Diversified International Stationery supplies 200 Parker - Hannifin Oildyne Division Hydraulic component production 172 Dakota Growers Pasta Company Macaroni & spaghetti 159 Waymouth Farms, Inc.Salted & roasted nuts & seeds 150 Good Samaritan Society Skilled nursing care facility 136 Avtec Warehousing & metal finishing 102 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 6 PLANNING & DEVELOPMENT The city continues to see sustained growth and development as major redevelopment projects come to fruition. Overall development activity has increased steadily in recent years and the city anticipates that growth will continue over the next several years. DEVELOPMENT ACTIVITY From 2016-2020, $222,710,120 of reinvestment was approved in the city through construction permits. The city is striving to increase momentum to continually increase the tax base, while providing the highest level of services to residents, businesses, and property owners. Building permits for the construction of a new city center aquatic center and community theater were issued in 2019, accounting for nearly $18 million of the $38 million in work for the year. The large increase in valuation of work in 2017 can be attributed to IronWood, a 182-unit luxury apartment project valued at $43 million. DEVELOPMENT ACTIVITY BY YEAR 2016 2017 2018 2019 2020 Permits issued 2,607 2,652 2,441 2,459 2,536 Fees collected $602,391 $867,289 $506,883 $452,267 $513,900 Valuation of work $37,740,765 $71,895,249 $46,952,876 $38,288,981 $27,832,249 VALUATION OF WORK 2016 2017 2018 2019 2020 $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $70,000,000 $80,000,000 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 7 The following planning and development activities occurred in the last year: Windsor Ridge SVK is constructing 32 new single-family homes on an 8.7-acre undeveloped site that was owned by the city for many years. In the fall of 2018, the city received six proposals from four developers for the site. After careful consideration, SVK was selected as the preferred developer for the site. SVK is in the process of building the homes on 65-foot wide lots. The estimated sale prices for the homes ranged from the mid- $300,000’s to the low $400,000’s. At the end of 2020, 11 homes had sold for an average price of $407,000. All were either under construction or completed as of the summer of 2021 and it is anticipated that all homes will be completed and sold by the end of 2021. The city of Crystal is also developed another three lots just east of project. CITY OF CRYSTAL CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 8 Police Department & City Hall A new police department and city hall for the city of New Hope was completed in 2019. The City Council approved a bid from Terra General Contractors for $14.78 million in December of 2017 for the new building. The sale of $18.435 in general obligation capital improvement plan bonds at the interest rate of 2.6339% was also approved to pay for project. The city began working with a consultant in 2013 to review the space needs of the police department and city hall, identify deficiencies of the existing building, and determine if an updated and expanded or new police station and city hall facility was needed. In September 2015, a space needs citizen’s task force recommended that a new police station and city hall be constructed to replace the existing facility. The task force evaluated several potential sites for the building and considered soil boring information. In September 2016, the task force recommended that the new municipal building be constructed on the civic center site where the existing swimming pool is located, due to the fact that the pool also needed to be replaced. In January 2017, the city entered into a five-phase contract for design and construction services with Wold Architects and Engineers for the new police station and city hall. In August 2017, the City Council approved design development phase plans and authorized Wold to proceed to the next phase of the design process – the preparation of construction documents. A groundbreaking for the building took place on January 5, 2018, and the building was substantially completed in July 2019. The new 66,000-square foot building provides much needed space for the police department and addresses many deficiencies of the previous city hall. It has more than twice the square footage of the previous building, most of which is in the police station/garage and public areas in city hall. It also resolved deficiencies of the previous building, such as a leaky roof, an HVAC system in poor condition, an inadequate electrical system, and exterior maintenance issues. The new police station includes a larger lobby with adequate seating and two adjacent interview rooms to provide privacy for victims, as well as a secure location to talk with suspects. It includes improved facilities for officers such as a larger roll call room equipped with technology, individual workstations, and ample locker room facilities. There are larger, more secure areas for the storage of evidence and records, and a 31-stall underground heated garage large enough to store all police squads. The new city hall provides additional public space, including two large meeting rooms equipped with technology and designed to adapt to a variety of uses, and two small conference rooms between three staff counters. The council chambers has been specifically designed to televise meetings and accommodate overflow crowds. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 9 New Hope Aquatic Center Plans for a new outdoor aquatic facility and other improvements within Civic Center Park started in early 2017. Construction on the complex started in April of 2018. The approximate cost of the project was $19.5 million. For the pool part of the project, the city received a grant from the state for $2 million, a Hennepin Youth Sports Facility Grant for $250,000, and a Minnesota Swimmers Grant for $40,000. The new pool facility includes a bathhouse with concession stand, a 50-meter, eight-lane pool, diving boards, drop slide and floatable water obstacle course, a current channel, vortex pool, two body slides, shallow water area with zero depth entry and play feature, water walk area, and shade structures. The bather load for the new facility is 1,233 people and the pools hold a total of more than 700,000 gallons of water. A June 2020 opening was planned, but postponed until June 20 due to COVID-19. Other improvements within Civic Center Park include a new outdoor performance center with terraced seating, a picnic pavilion, skate park, trails, trail lighting, and an additional parking lot. Pocket Square Cocktail Lounge A. Davis Distillery was granted a conditional use permit in January 2020 to open a microdistillery and cocktail room at 7530 Quebec Avenue North. When Pocket Square Cocktail Lounge opened in April of 2021, it became one of the first cocktail rooms in the northwest suburbs. The microdistillery serves hand- crafted cocktails and small 750 ml bottles of handmade liquor. It serves primarily vodka, gin, and rum, all of which are produced on-site. While food is not served at the facility, customers are encouraged to order from local restaurants and food trucks often operate in the parking lot. The microdistillery is open on Thursday- Saturday with the option of renting out the space for special events on Sunday. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 10 Twin City Garage Door Twin City Garage Door completed a $500,000 remodel and expansion of their office and showroom at 5601 Boone Avenue North. The colorful, innovative design showcases Twin City Garage Door’s products and includes working examples throughout the project showroom. The full-service garage door company has three locations in the Twin Cities. They provide overhead garage door installation and repair services, as well as garage door opener and electrical control device services for commercial, industrial, and residential properties. Furniture Industries Plans were approved for Furniture Industries, Inc. to expand their building at 3101 Louisiana Avenue North in June of 2020. The 15,000-square foot expansion was intended to provide additional warehouse space for the growing business. It required approval of a conditional use permit and two variances. The project was delayed after the business determined that the site and proposed expansion would not meet the growing needs of their operations in the future. ORIJIN STONE ORIJIN STONE, a direct-to-trade natural stone wholesaler, relocated their operations and staff of 28 employees to New Hope in October of 2020. The business is known for its innovation in the stone industry, premium quality, and exclusive natural stone products from around the world. After purchasing the vacant 110,000-square foot building at 5100 Boone Avenue North in February of 2020, ORIJIN STONE constructed a state-of-the-art custom fabrication facility for natural stone. The renovated space includes a new showroom, remodeled office space, and a reconfigured warehouse. Interior improvements to the building included new skylights and roofing, mechanical and heating systems, plumbing and bathrooms, breakrooms, overhead doors, cranes, windows and doors, concrete flooring, and significant repairs to the building. Exterior upgrades included the construction of a new 32-stall parking lot, new lighting and fencing, structural repairs, and painting of the building. The family run business started in 2011 and the new location will allow for continued growth and expansion. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 11 HOUSING LOAN PROGRAMS Loans and financing for home improvement projects are available to residents of New Hope through the Center for Energy and Environment and Hennepin County. Center for Energy and Environment The city has partnered with the lending center at the Center for Energy and Environment (CEE) to offer a convenient one-stop service that provides residential property owners in New Hope access to a comprehensive array of financing and rehabilitation services. The Low Interest Loan Program provides loans and funds to homeowners to make improvements to their properties. An Emergency Deferred Loan is also available for homeowners that have emergency improvement needs but do not qualify for other home improvement loan or grant programs. The program is funded with Economic Development Authority (EDA) funds. The following loans/subsidies/leveraged funds have been issued to New Hope residents through CEE since 2016: 2016 2017 2018 2019 2020 Loans/Subsidies/ Leveraged Funds 5 9 4 4 5 Amount $46,096 $78,682 $71,438 $68,091 $71,822 Hennepin County Hennepin County’s Home Rehab Program enables income-qualified residents to request loans that address basic safety, maintenance, and health concerns, as well as home improvements. Loans up to $30,000 at 0% interest are available to residents of New Hope. No monthly payments are required and the loans may be forgiven after 15 years if residents continue to live in and own their home. The program is funded with Community Development Block Grant (CDBG) funds allocated to Hennepin County through the Department of Housing and Urban Development. The following loans have been issued to New Hope residents through Hennepin County since 2016: 2016 2017 2018 2019 2020 Loans 1 1 1 1 1 Amount $30,000 $6,840 $12,600 $28,965 $30,000 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 12 SCATTERED SITE HOUSING Over the years, the city has utilized its Economic Development Authority (EDA) to acquire several properties as part of the Scattered Site Housing Program. The primary focus of the program is to target distressed single-family properties throughout the city, with the goal of improving residential neighborhoods. The program currently emphasizes two primary activities: demolition and rehabilitation. When homes are demolished, the vacant lot is sold to a builder for the construction of a new single-family home. Homes that are rehabilitated are sold on the open market with no income restrictions. The following scattered site housing projects were completed and sold over the last year: Address Previously Assessed Value Sale Price Percent Increase Project Type 3924 Utah Ave N $202,000 $375,000 86%Rehabilitation 5201 Oregon Ave N $163,000 $408,320 151%Demolition & rebuild 5355 Oregon Ave N $75,000 $389,921 420%Demolition, lot split & rebuild 6027 West Broadway $115,000 $350,000 204%Demolition & rebuild SCATTERED SITE HOUSING PROJECTS $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 3924 Utah Ave N 5201 Oregon Ave N 5355 Oregon Ave N 6027 West Broadway Previously Assessed Value Sale Price/New Value CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 13 5201 Oregon Ave N - Before 5201 Oregon Ave N - After 7215 62nd Ave N - Before SCATTERED SITE HOUSING 3924 Utah Ave N - Before 3924 Utah Ave N - After PAGE 13 7215 62nd Ave N - Before 5355 Oregon Ave N - Before 5355 Oregon Ave N - After 6027 West Broadway - Before 6027 West Broadway - After CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT SCATTERED SITE HOUSING In addition to these completed projects, there are six other scattered site projects under construction or in progress as of when this report was published and are listed below. Homes sold in 2021 will be included in the 2022 Economic Development Report. • Demolition, lot split, and rebuild at 5353 Oregon Avenue North (one of the two new homes sold in 2020 and is included in this report and the other sold for $385,750 in 2021). • Demolition and rebuild at 4215 Louisiana Avenue North (new home sold for $435,000 in 2021). • Rehabilitation with Habitat for Humanity at 8720 47th Avenue North (project underway). • Demolition and rebuild at 4637 Aquila Avenue North (builder selected, new home projected to sell for $445,000). • Demolition and rebuild at 5213 Pennsylvania Avenue North (builder selected, new home projected to sell for $485,000). • Demolition and rebuild at 3611 Louisiana Avenue North (city’s bid accepted at sheriff’s sale). PROPERTY VALUES 2016 2017 2018 2019 2020 Taxable market value $1,535,054,114 $1,697,092,365 $1,831,436,951 $2,021,382,123 $2,177,389,934 Percent change 7.28%10.56%7.92%10.37%7.72% PROPERTY VALUES 2016 2017 2018 2019 2020 $400,000,000 $800,000,000 $1,200,000,000 $1,600,000,000 $2,000,000,000 $2,400,000,000 $2,800,000,000 PAGE 14 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 15 MEDIAN HOUSEHOLD VALUES 2016 2017 2018 2019 2020 Median Household Value $196,000 $213,000 $229,000 $244,000 $257,000 Percent change 3.98%8.67%7.51%6.55%5.33% HOUSEHOLD VALUE 2016 2017 2018 2019 2020 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000