EDA 08/26/02· , .. ~ OFFICIAL FILE COPY
CITY OF NEW HOPE
EDA MEETING
City Hall, 4401 Xylon Avenue North
August 26, 2002
President W. Peter Enck
Commissioner Sharon Cassen
Commissioner Don Collier
Commissioner Mary Gwin-Lenth
Commissioner Pat LaVine Norby
1. Call to Order
2. Roll Call
3. Approval of Regular Meeting Minutes of August 12, 2002
4. Discussion Regarding Request by the Egan Companies, 7100 Medicine Lake Road, for
Financial Assistance to Relocate and Expand Facility in City of New Hope
5. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
Approved EDA Minutes
Regular Meeting
August 12, 2002
City Hall
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
IMP. PROJECT 727
Item 4
President Enck called the meeting of the Economic Development Authority to order
at 7:46 p.m.
Present:
W. Peter Enck, President
Sharon Cassen, Commissioner
Don Collier, Commissioner
Mary Gwin-Lenth, Commissioner
Absent: Pat LaVine Norby, Commissioner
Motion was made by Commissioner Collier, seconded by Commissioner Gwin-
Lenth, to approve the Regular Meeting Minutes of July 22, 2002. Voting in
favor: Enck, Cassen, Collier, Gwin-Lenth; Voting Against: None; Absent: Norby;
Abstained: None. Motion carried.
President Enck introduced for discussion Item 4, Discussion Regarding Creation of
Tax Increment Financing District and City Assistance for Navarre Corporation
Expansion and Ahrens Tracking Relocation; Discuss Terms of Agreement and
Direct Staff to Proceed with Preparation of Development Agreement (Improvement
Project No. 727).
Mr. Kirk McDonald, Director of Community Development, stated at the June 10,
2002, New Hope EDA meeting, staff presented a request from Navarre Corporation
to relocate Ahrens Tracking from its current location to the city-owned property at
9200 49~ Avenue to facilitate a large expansion at the Navarre site. The EDA
directed staff to coordinate with all parties to determine if the plan was financially
feasible. Navarre requested city financial assistance in the form of a land write-down
gap funding assistance for the Ahrens project and utility relocation at the Navarre
site. The EDA saw this initially as a "win-win" for all parties, as Ahreus Tracking
would be relocated and retained in the City, Navarre Corporation would undertake a
major expansion, and the city property would be developed and regional storm water
improvements.
Over the past two months, staff has been coordinating with Krass Monroe and
Navarre Corporation on details regarding how this project might work and Krass
Monroe has prepared the documents outlining the scope and financial parameters of
the project. If the EDA is agreeable to the terms of the agreement, staff recommends
that the EDA direct staff to continue to coordinate with all parties on the preparation
of a development agreement.
Mr. Jim Casserly, Krass Monroe, P.A., was recognized. He reviewed the financial
and legal analysis for the project. He stated the proposal includes the City providing
Navarre with the required amount of city property needed for the Ahreus relocation
and the EDA issuing a Revenue Note to Navarre Corporation in the amount of
$200,000 plus the cost of relocating the utilities on the redevelopment property in an
New Hope EDA
Page 1
August 12, 2002
MOTION/AUTHORIZE
PROCEEDING
Item 4
amount not to exceed $250,000 for a total principal amount of the Revenue Note not
to exceed $450,000. The Revenue Note shall be paid from tax increment generated
by the minimum improvements on the redevelopment property.
Mr. Casserly pointed out that Navarre will construct the Ahrens building at
Navarre's expense. If for some reason Navarre fails to construct its own expansion,
then the City is not obligated to reimburse Navarre for the Ahren's building.
He stated after eight years, the Navarre properly will have generated over $200,000
in new taxes and the Ahrens Ixucking property will have generated approximately
$10,000 in taxes. Therefore, the initial costs will be recouped in eight years and each
year thereafter the City will receive $210,000 in new taxes.
Commissioner Collier pointed out that the City spent approximately $200,000 to
purchase the land.
Mr. Casserly stated after payment of the revenue note, approximately $300,000 will
be remaining for the EDA's project expenses.
President Enck thanked Mr. Casserly for his analySis.
The following persons were recognized: Robert Glasgow, President of Glasgow
Advisor Services, Inc.; John Turner, Senior Vice President of Navarre Corporation;
and Brett & Don Ahrens of Ahrens Tracking.
President Enck thanked Navarre for being a good corporate citizen. He inquired
regarding the existing problems with the driveway and parking at the Navarre site.
Mr. Glasgow stated they need to upgrade the parking area and have requested
postponing this until the expansion.
Mr. Mark Montgomery, 7307 62na Avenue North, questioned the average salary for
the new jobs that will be created.
Mr. John Turner indicated the range will be $11-13 per hour. The rate of a new
employee is $8.50 per hour. The expansion will also allow on-site office
accommodations for positions such as IT, marketing, and finance.
Commissioner Cassen questioned the proposed timeline for the project.
Mr. McDonald stated the public hearing (Council agenda item 8.4) will set the
public hearing on September 9. The construction will begin as soon as possible.
President Enck noted the owner will be required to maintain the landscaping.
He thanked Ahrens Trucking and Navarre for their cooperation with city staff and
accomplishing the objectives outlined by staff and Mr. Casserly.
Motion was made by Commissioner Cassen, seconded by Commissioner Gwin-
Lenth, authorizing staff to proceed with preparation of a development
agreement (Improvement Project No. 727). Voting in favor: Enck, Cassen,
Collier, Gwin-Lenth; Voting Against: None; Absent: Norby; Abstained: None.
Motion carried.
New Hope EDA
Page 2
August 12, 2002
ADJOURNMENT
Motion was made by Commissioner Collier, seconded by Commissioner Cassen, to
adjourn the meeting. Voting in favor: Enck, Cassen, Collier, Gwin-Lenth; Voting
Against: None; Absent: Norby. Motion camed. The New Hope EDA adjourned at
8:22 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 3
August 12, 2002
· . , EDA
REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
Community Development 8-26-02 EDA
Item No.
By: Kirk McDonald By: 4
DISCUSSION REGARDING REQUEST BY THE EGAN COMPANIES, 7100 MEDICINE LAKE ROAD, FOR
FINANCIAL ASSISTANCE TO RELOCATE AND EXPAND FACILITY IN CITY
REQUESTED ACTION
Staff requests that the Economic Development Authority discuss the attached request by Egan Companies for
financial assistance to relocate and expand its facility in New Hope and provide direction to staff as to how to
3roceed. Staff recommends authorization for staff to meet with Egan officials and the financial consultant to
conduct a preliminary analysis of the financial implications of the project.
POLICY/PAST PRACTICE
When city staff receives requests for financial assistance from local companies, they are submitted to the EDA
for consideration. In the past, the City has assisted a number of businesses with expansion projects using a
variety of financing tools.
BACKGROUND
Staff has been conducting discussions with The Egan Companies over the past six months on an informal
basis regarding its desire to expand its facilities. Egan has submitted the attached correspondence, which
includes the following background data and request:
· The Egan Companies ("EGAN") requests the City of New Hope Council, staff and financial consultant to
work with EGAN to determine what alternatives the City of New Hope has to provide Tax Increment
Financing, tax rebates or other financial assistance to facilitate EGAN redeveloping 8801 Science Center
Drive, or similar facility, in New Hope.
· EGAN moved its headquarters to New Hope in 1964 and prefers to stay in New Hope. EGAN has been in
business for 57 years (founded in 1945) providing commercial construction services to the greater
metropolitan Twin Cities area. EGAN is an employee owned business with over 130 million dollars in
annual revenue.
· EGAN has over 750 employees designing and constructing Electrical, Mechanical, Building Automation,
Insulation, Glass and Curtain-wall systems. The staff includes approximately 175 full-time office personnel,
100 full-time manufacturing people and over 475 craftspeople working on iob sites. EGAN employs a
MOTION BY r~ SECOND BY
Request for Action
Page 2 8-26-02
diverse group of people including highly skilled craftspeople from five different trade unions, designers,
engineers, project managers, accountants, and computer programmers.
The Egan Companies is recognized as one of Minnesota's fastest growing firms and one of the nation's
largest specialty contracting firms. EGAN's safety conscious "Zero Injury" culture has resulted in EGAN
having a safety record in the top 10 of the safest construction companies to work for in the nation.
EGAN engaged CRESA Partners to assist in a thorough evaluation of our future real estate needs and we
have decided to consolidate all the company's operations into a single facility. EGAN currently occupies six
facilities in four different communities in the Northwest suburbs of the Twin Cities. Each of its current
locations is too small to accommodate the consolidated operations of EGAN. This consolidation would
result in bringing 50 to 100 new jobs to the City of New Hope.
EGAN is considering the building at 8801 Science Center Drive. The building would need considerable
improvements to accommodate EGAN's needs. We have enclosed sketches of proposed improvements to
the 8801 Science Center Drive building. We are asking the City of New Hope to consider providing
$800,000 to $1,000,000 of assistance to redevelop this location.
EGAN has invested considerable time and expense in evaluating all its options to consolidate operations
into a new facility and would like to lock-in on a site to relocate to before the end of August 2002, for a
move-in date in late 2003. We ask the City of New Hope to indicate the approximate level of financial
assistance the City may be able to offer EGAN for the redevelopment of the 8801 Science Center Drive or
a similar facility located in New Hope, Minnesota.
The Community Development Department believes that this is an excellent proposal and recommends that the
EDA pursue this request.
FUNDING
Funding for the analysis could be paid for with EDA funds or incorporated into project costs, if the
development proceeds. Staff recommends that if the EDA is interested in pursuing this request, the applicant
provide a deposit to assist with consultant costs.
ATTACHMENTS
· 8/19 Egan Correspondence
Plans
· Maps
· Building Official Memo
· Egan Companies' Report
The E an Companies
Building Integrated Solutions'"
7100 Medicine Lake Road
New Hope. MN 55427-3671
763.544.4131 Main
763.595.4380 Fax
August 19, 2002
Mr. Kirk McDonald
Director of Community Development
City of New Hope
4401 Xylon Ave N
New Hope, MN 55428
RE: The Egan Companies
Dear Kirk:
Thank you for taking time last week to discuss how the City of New Hope may be able to
assist The Egan Companies in expanding their operations in New Hope, Minnesota.
The Egan Companies ("EGAN") requests the City of New Hope Council, staff and financial
consultant work with EGAN to determine what alternatives the City of New Hope has to
provide Tax Increment Financing, tax rebates or other financial assistance to facilitate EGAN
redeveloping 8801 Science Center Drive, or similar facility, in New Hope.
EGAN moved its headquarters to New Hope in 1964 and prefers to stay in New Hope. EGAN
has been in business for 57 years (founded in 1945) providing commercial construction
services to the greater metropolitan Twin Cities area. EGAN is an employee owned business
with over $130 million dollars in annual revenue.
EGAN h~s over seven-hundred-fifty (750) employees designing and constructing Electrical,
Mechanical, Building Automation, Insulation, Glass and Curtain-wall systems. Egan also
manufactures components of the ventilation, electrical and glazing systems they install. The
staff includes approximately 175 full time office personnel, 100 full time manufacturing
people and over 475 crafts-people working on job sites. EGAN employs a diverse group of
people ineludi.n, g highly skilled erattspeople from five (5) different trade unions, designers,
engineers, project managers, aceoumants, and computer programmers.
The Egan Companies is recognized as one of Minnesota's fastest growing firms and one of the
nation's largest specialty contracting firms. EGAN's safety conscious "Zero Injury" culture
has resulted in EGAN having a safety record in the top 10% of the safest construction
companies to work for in the nation.
EGAN engaged CRESA Partners to assist in a thorough evaluation of our future real estate
needs and we have decided to consolidate all the company's operations into a single facility.
EGAN currently occupies six (6) facilities in four (4) different communities in the Northwest
suburbs of the Twin Cities. Each of its current locations is too small to accommodate the
consolidated operations of EGAN. This consolidation would result in bringing 50 to 100 new
jobs the City of New Hope.
THE EGAN COMPANIES
Egan Mechamcal Contractors, Inc. · Egaa-McKay Electrical Contractors, Inc.
E & S Insulation Co. · Egan Automation, Inc. · InterClad, Inc. · Egan Service
An Aj~rmati~e Action/Equal Opportunity Employer
EGAN is considering the building at 8801 Science Center Drive. The building would need
considerable improvements to accommodate EGAN's needs. We have enclosed sketches of
proposed improvements to the 8801 Science Center Drive building. We are asking the City of
New Hope to consider prodding $800,000 to $1,000,000 of assistance to redevelop this
location.
EGAN has invested considerable time and expense in evaluating all its options to consolidate
operations into a new facility and would like to lock-in on a site to relocate to before the end
of August 2002, for a move-in date in late 2003. We ask the City of New Hope to indicate the
approximate level of financial assistance the City may be able to offer EGAN for the
redevelopment of the 8801 Science Center Drive or a similar facility located in New Hope,
Minnesota.
Please call if you have any questions, comments, or to confirm that City staff will request the
City Council consider our request for financial assistance during their meeting August 26,
2002.
Sincerely,
The Egan Companies
Chief Executive Officer
CC: Mark Houge, CRESA Parmers
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Memo
TO: Kirk McDonald
FROM: Doug Sandstad
DATE: August 20, 2002
RE: New Egan Industrial Concept- 8801 Science Center Rd.
I have reviewed the Egan Companies CEO letter, dated August 19, 2002, and the two-
sheet conceptual plans, dated July 16, 2002, for an industrial expansion at 8801 Science
Center Drive.
a. Local company for 38 years is retained by purchasing a larger site in New Hope
and moving / expanding their operation.
b. Existing site at 7100 Medicine Lake Road is opened up for a new user, who may
well invest in functional and aesthetic improvements.
c. Major expansion and architectural upgrade [ approx. 22,000 sf] to their new
headquarters will replace the "dated" 1960-vintage plain block warehouse look.
The new pedestrian-friendly look reverses the old industrial model.
d. Nonconforming fi'ont loading dock doors on Boone Avenue are eliminated and
replaced with a very attractive glazed front and a prominent new entrance.
e. Generous property is sized to allow additional future expansion beyond this
concept for Egan, should that become necessary.
From a practical standpoint, the building expansion does not require Site Plan
Review before the Planning Commission and Council, as it is less than 25% of the
building area, per Zoning Code 4.353. The outdoor storage yard by the railroad
tracks would require a CUP if it exceeds 20% of the building area and can be
easily secured and screened from the Boone Avenue frontage. The proposed
driveway connection to Boone Avenue is allowed by code and routine, but may
be shifted to the north for safety and grade reasons after detailed design and
analysis by staff and our engineer.
Without sounding too encouraging, I recommend that you tell them to apply
for a building permit ASAP !