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Economic Development Report 2022ECONOMIC DEVELOPMENT REPORT CITY OF NEW HOPE, MINNESOTA SEPTEMBER 1, 2022 The city of 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 through the removal of blight and by upgrading the 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 Minneapolis Regional Chamber (previously 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 digitally or in person by scheduling an appointment. 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 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. In 2021, business advisors met with seven New Hope businesses and provided 48.5 hours of technical advisory assistance. Four of the clients were considering opening a business and three were existing businesses. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 5 EMPLOYMENT There are approximately 480 commercial/industrial/service businesses in the city, 86 of which opened in 2021. These businesses account for approximately 11,080 jobs in the city. The city’s 15 largest employers, which are listed below, account for many of those jobs. MAJOR EMPLOYERS Employer Products/Services New Hope-Based Employees (Total Employees) Independent School District 281 Education 631 (1,792) Minnesota Masonic Home/ North Ridge Care Center Skilled nursing care facility 560 Hy-Vee Grocery & convenience store 370 Horwitz Mechanical contractor 348 City of New Hope Government agency 338 including seasonal staff Padagis Pharmaceutical and medicine manufacturing 315 St. Therese Home of New Hope Skilled nursing care facility 286 (787) YMCA Health club 228 Liberty Diversified International Stationery supplies 200 Intermediate District 287 Education 199 (791) 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 118 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 6 PLANNING & DEVELOPMENT The city continues to see sustained growth and development as major redevelopment projects near completion. Overall development activity has slowed in recent years due in part to the pandemic, though the city anticipates that more growth will take place over the next several years. DEVELOPMENT ACTIVITY From 2017-2021, $213,863,882 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 2017 2018 2019 2020 2021 Permits issued 2,652 2,441 2,459 2,536 2,870 Fees collected $867,289 $506,883 $452,267 $513,900 $544,109 Valuation of work $71,895,249 $46,952,876 $38,288,981 $27,832,249 $28,894,527 VALUATION OF WORK 2017 2018 2019 2020 2021 $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 Development completed the construction of 32 new single-family homes on an 8.7-acre site that was previously undeveloped and owned by the city. In the fall of 2018, the city received six proposals from four developers for the site. After careful consideration, SVK Development was selected as the preferred builder for the site. The new homes included a mix of rambler, split level, and two-story designs and sold for an average price of $430,000. The project helped provide step-up housing options within the city and brought more than $13.76 million in new value to the city. The city of Crystal also developed another three lots just east of the project. CITY OF CITY OF CRYSTALCRYSTAL CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 8 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 2021 due to the COVID-19 pandemic. Pool attendance for 2021 was 46,863, up significantly from the 18,761 visitors who went to the old pool the last year it was open, in 2017. 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. Escuela Éxitos Charter Schools Development Corporation (CSDC) purchased the property at 4741 Zealand Avenue North in 2021 and obtained a conditional use permit to open a two-way dual language Spanish/English immersion school. The property was previously owned by a church. More than $1 million in improvements were made to the facility prior to opening for the 2021-2022 school year. The kindergarten through 8th grade charter school includes 20 classrooms and planned to serve 165 students during the 2021-2022 school year with enrollment increasing and capping out at 390 students by the 2023-2024 school year. According to the operator, the school model will help meet a growing demand of families in New Hope and surrounding communities that currently sit on long waitlists for immersion school options. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 9 Pocket Square Cocktail Lounge A new microdistillery with a cocktail room opened at 7530 42nd Avenue North in the spring of 2021. A. Davis Distillery obtained a conditional use permit in January 2020 to open the facility, however, its opening was delayed due to the COVID-19 pandemic. Pocket Square Cocktail Lounge is the only microdistillery and cocktail lounge in the northwest metro and serves gin, vodka, and rum, all of which are produced on site. Hamernick’s Flooring Superstore Hamernick’s Flooring Superstore opened a location at 9449 Science Center Drive in New Hope in the spring of 2021. The original Hamernick’s location opened in Saint Paul 75 years ago as a small carpet and paint store. The New Hope location specializes in luxury vinyl tile and luxury vinyl plank flooring, one of the more popular trends in flooring design. Interior remodeling was completed prior to the opening of the new location. 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 include 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 include the construction of a new 32-stall parking lot, new lighting and fencing, structural repairs, and painting of the building. The family-owned business started in 2011 and the new location will allow for continued growth and expansion. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 10 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 the CEE in recent years: 2017 2018 2019 2020 2021 Loans/Subsidies/ Leveraged Funds 9 4 3 5 13 Amount $78,682 $71,438 $35,320 $71,822 $259,574 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 in recent years: 2017 2018 2019 2020 2021 Loans 1 1 1 1 2 Amount $6,840 $12,600 $28,965 $30,000 $59,800 Curbside Appeal Reimbursement Program In July of 2022, the city launched the Curbside Appeal Reimbursement Program to encourage homeowners to make improvements to the exterior of their homes and garages in areas that are visible from the street. The city reimburses a portion of costs for projects meeting eligibility requirements. The goals of the program include improving the city’s housing stock, instilling confidence in neighborhoods, and increasing home values. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 11 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. The following scattered site housing projects were completed and sold over the last year: Address Previously Assessed Value Sale Price Percent Increase Project Type 8720 47th Ave N $213,000 $299,000 40%Habitat for Humanity Rehabilitation 4215 Louisiana Ave N $249,000 $435,000 75%Demolition & rebuild 5353 Oregon Ave N $75,000 $385,750 414%Demolition, lot split & rebuild SCATTERED SITE HOUSING PROJECTS 8720 47th Ave N 5353 Oregon Ave N $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 Previously Assessed Value Sale Price $450,000 4215 Louisiana Ave N CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 12 4215 Louisiana Ave N - Before 4215 Louisiana Ave N - After 7215 62nd Ave N - Before 8720 47th Ave N - Before 8720 47th Ave N - After 7215 62nd Ave N - Before 5353 Oregon Ave N - Before 5353 Oregon Ave N - After SCATTERED SITE HOUSING In addition to these completed projects, there were four other scattered site homes under construction or projects in progress as of when this report was published, including: • Demolition and rebuild at 4637 Aquila Avenue North (new home sold for $460,000 in 2022). • Demolition and rebuild at 5213 Pennsylvania Avenue North (new home sold for $575,000 in 2022). • Demolition and rebuild at 5306 Rhode Island Avenue North (under construction). • Demolition, lot split, and rebuild at 4201 Boone Avenue North (demolition preparation work underway). Homes sold in 2022 will be highlighted in the 2023 Economic Development Report. Since 2014, more than $4.7 million in value has been added to the city’s tax base through the scattered site housing program. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PROPERTY VALUES 2017 2018 2019 2020 2021 Taxable market value $1,697,092,365 $1,831,436,951 $2,021,382,123 $2,177,389,934 $2,308,596,615 Percent change 10.56%7.92%10.37%7.72%6.03% PROPERTY VALUES 2017 2018 2019 2020 2021 $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 13 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT PAGE 14 MEDIAN HOUSEHOLD VALUES 2017 2018 2019 2020 2021 Median Household Value $213,000 $229,000 $244,000 $257,000 $275,000 Percent change 8.67%7.51%6.55%5.33%7.00% HOUSEHOLD VALUE 2017 2018 2019 2020 2021 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000