Loading...
Economic Development Report 2016 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT 12/5/2016 New Hope, Minnesota 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. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 2 CITY OF NEW HOPE O V E R V I E W & H I S T O R Y LOCATION The city of New Hope is a suburb located northwest of Minneapolis with strong neighborhoods, an abundance of parks and recreation opportunities, excellent schools, with 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 (2010) 20,339 YEAR FORMED 1953 AREA 5.1 square miles JOBS 11,080 BUSINESSES 490 PARKS/ACREAGE 18/200 SCHOOL DISTRICT ROBBINSDALE AREA/281 SCHOOLS 5 CITY FACILITIES Ice Arena, Swimming Pool, Golf Course, Outdoor Theater, Fire Station HISTORY 1900s: Farming-rich community, settled as part of Crystal Lake Township 1930s: Residents of Crystal Lake Township began movement to incorporate township 1936: City of Crystal formed, rural residents in western half broke away and formed township known as New Hope 1936-1953: Housing developments led to farmers being a minority in New Hope 1953: Rapidly developing township of New Hope incorporated as a city to prevent losing more of its land and residents to Crystal via annexation 1953: Population of 600 1958: Population of 2,500 1971: Population of 24,000 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 3 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT E X E C U T I V E S U MM A R Y 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 utilizes 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, 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:  To meet the following housing related uses: o To provide a diversity of housing not currently provided by the private market. o To provide a variety of housing ownership alternatives and housing choices. o To promote affordable housing for low or moderate income individuals. o To promote neighborhood stabilization and revitalization by the removal of blight and the upgrading in existing housing stock in residential areas. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 4  To remove blight and encourage 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.  To increase the tax base of the city in order to ensure the long-term ability of the city to provide adequate services for its residents while lessening the reliance on residential property tax.  To retain local jobs, increase the local job base, and provide diversity in that job base.  To increase the local business and industrial market potential of the city of New Hope.  To encourage additional unsubsidized private development in the area, either directly, or through secondary "spinoff" development.  To offset increased costs of redevelopment, over and above the costs that a developer would incur in normal development.  To accelerate the development process and to achieve development on sites which would not be developed without this assistance. 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 Commercial Energy Efficiency 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 the city's businesses' contributions 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 The city has partnered with Hennepin County and Open to Business, a company that provides free business advice and also provides gap financing. Open to Business is a partnership between Golden Valley and 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 two cities work with MCCD to provide business consultation services and financial advice to small local business owners and aspiring business owners. MCCD staff CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 5 hold open office hours each month at New Hope City Hall. 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. Employment There are approximately 490 commercial/industrial/service businesses in the city, 46 of which opened in 2015. Employers in New Hope account for approximately 10,360 jobs, with the major employers listed as follows. Major Employers Products/Services Employees Employees Independent School District No. 281 Education 1,900 Intermediate District 287 Education 868 Minnesota Masonic Home/North Ridge Care Center Skilled nursing care facility 695 St. Therese Home of New Hope Skilled nursing care facility 689 Hy-Vee Grocery & convenience store 627 Perrigo Company Pharmaceutical & medicine manufacturing 333 Coborn’s Delivers Direct selling establishments 240 Liberty Diversified International Stationery supplies 200 Dakota Growers Pasta Company Macaroni & spaghetti 150 Waymouth Farms, Inc. Salted & roasted nuts & seeds 150 Planning & Development The city continues to see sustained growth and development as major redevelopment projects come to fruition. Overall development activity has increased annually since 2012 and the city anticipates that growth will continue over the next several years. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 6 Development Activity From 2012-2015, $96,661,123 of reinvestment was approved in the city through construction permits. The city is striving to increase momentum to continually increase the tax base, while regularly providing the highest level of services delivered to residents, businesses, and property owners of the city. The city has set a goal of increasing the total valuation of work for permits from 2013-2015 by 10% for 2016- 2018. 2012 2013 2014 2015 Permits issued 2,167 2,212 2,141 2,169 Fees collected $300,967 $356,242 $485,371 $512,461 Valuation of work $12,813,093 $17,069,459 $32,802,509 $33,976,062 The following planning and development activities occurred in the last year: New Hope Hy-Vee (Completed) Hy-Vee, Inc. negotiated with the city for the purchase of the former Kmart Shopping Center at 8200 42nd Ave N. The city purchased and demolished the K-Mart that previously occupied the site in 2012, clearing the way for redevelopment. In January of 2014, three concepts for redevelopment were presented, with the City Council favoring the Hy-Vee proposal from Anderson Companies. Hy-Vee was granted a rezoning of the property and a preliminary and final plat for the construction of a 90,000- square foot grocery store, which features a full-service restaurant, a pharmacy, a liquor store, a North Memorial express clinic, a Starbucks, and a US Postal Service sub-station. The estimated $12 million project includes a gas station with a convenience store. Construction is complete and the store opened in September of 2015. The project brought more than 600 jobs into the city. The city created a Redevelopment Tax Increment Financing (TIF) District in conjunction with the Hy-Vee project that authorized the expenditures for land/building acquisition, site improvements and $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 $40,000,000 2012 2013 2014 2015 Valuation of Work in New Hope CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 7 preparation, utilities, administrative costs and other qualifying improvements. In 2012, the city purchased the former K-mart building for $4.625 million. After demolition, site preparation and soil remediation, the city had expended over $5 million in costs preparing the land for redevelopment. In 2014, the city sold the property to Hy-Vee for $3.725 million. The TIF District allows for the city to recoup the land write- down costs and administrative fees associated with the redevelopment of the property. North Memorial Clinic (Completed) North Memorial New Hope is a new 14,740-square foot state-of-the-art primary care medical clinic. It provides preventative services, acute care, chronic disability management, and specialty services including rheumatology, dermatology and podiatry. The clinic moved its staff of 29 employees from an existing location in Plymouth when it opened in February 2016. The clinic was developed in partnership with The Davis Group and focuses on creating the best possible experience for patients. This includes include rapid check-in capabilities and the latest technology to guide patients through their visit. The building satisfies “Phase 2” requirements for development of the land, as outlined by a Development Agreement between Hy-Vee and the city of New Hope. The landscaping and lighting plans are consistent with the Hy-Vee Planned Unit Development master development plan. Xylon Avenue Streetscape (Completed) In conjunction with the Hy-Vee Grocery Store redevelopment, the city coordinated the process of revitalizing the appearance of Xylon Avenue. The approximate $5 million of improvements include all new sewer, water, gas and electric utilities, the burial of overhead utility lines, and a new emphasis on the entryway into the City Center District. Streetscape elements include a new electronic reader board sign, a welcoming gateway arch, banner columns, arbors, streetlights and trees. Centra Homes/Parkview (Under Construction) Centra Homes negotiated with the city to purchase the former Winnetka Learning Center property at 55th Ave N and Winnetka Ave N and was granted a Comprehensive Plan Amendment to re-guide the area for one- and two-family residential. The city had purchased the 17-acre site in 2013, with a goal of diversifying available housing stock in the city. Centra Homes received all necessary approvals, including the rezoning of the property, and final plat subdivision of the land. The Parkview subdivision is a 60-unit housing residential development that will consist of 29 traditional single-family homes and 31 detached townhomes. The two-story, single-family homes will range from 2,585 to 3,990 square feet with a variety of models and floor plans. Each model includes a two-car garage with a number of models offering an option for a three-car garage. The detached townhomes will range from 1,974 to 2,128 square feet. The project is currently under construction and expected to be completed by 2018. The city created a Redevelopment Tax Increment Financing District (TIF) in conjunction with the Centra Homes/Parkview project that authorized the expenditures for land/building acquisition, site improvements and preparation, utilities, administrative costs and other qualifying improvements. In 2013, the city purchased the former Winnetka Learning Center property from Independent School District 281 for $1.75 million. After demolition and site preparation, the city had expended over $2 million in costs preparing the land for redevelopment. In 2014, the city sold the property to Centra Homes for $777,000. The TIF District allows for the city to recoup the land write-down costs and administrative fees associated with the redevelopment of the property. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 8 Compass Pointe (Completed) Compass Pointe is a four-story, 68-unit multi-family residential apartment building located at the southwest corner of 62nd Ave N and West Broadway. Residents began moving into the building in August of 2015. The facility is geared towards families with incomes at or below 60% of the area median income. It is comprised of 1, 2, and 3-bedroom units renting for $733, $880, and $1,017 per month. The city of New Hope purchased and demolished three four-plexes on the site in 1998. The Swift gas station at 6113 West Broadway was acquired in 2012, ultimately leading to the construction of Compass Pointe. The city created a Housing Tax Increment Financing District (TIF) in conjunction with the Compass Pointe development that authorized the expenditures for the cost of land, site and public improvements, utilities, and administrative costs. Total land assembly costs for the city to create a redevelopment parcel were $590,000, including the price of the land, demolition costs and contamination clean-up costs. The city sold the property to Ron Clark Construction in 2014 for $304,000. The TIF District allows for the city to recoup the land write-down costs and administrative fees associated with the redevelopment of the property. Gates of New Hope (Completed) Gates of New Hope is a four-story, 32-unit apartment complex located at the northeast corner of Medicine Lake Rd and Hillsboro Ave N. Residents began moving into the building in August 2015. It includes 15 one-bedroom units, 14 two-bedroom units, 3 three-bedroom units, and a 34-stall garage on a 1.6-acre lot. Dunkin’ Donuts (Under Construction) The abandoned gas station and car wash at 7820 42nd Ave N received approvals to be redeveloped into a sandwich shop in June 2015. In early 2016, Dunkin’ Donuts expressed interest in the site. Construction plans have been submitted and the city anticipates that Dunkin’ Donuts will open in early 2017. Industrial Equities (Under Construction) A 48,000-square foot speculative industrial building at 9449 Science Center Dr was approved by the New Hope City Council in July 2015. Industrial Equities began construction on the building in May 2016. The high-quality, single-story, multi-tenant building replaces a vacant and distressed industrial building and will provide flexible space to meet the needs of many potential tenants. In 2016, the Economic Development Authority created a Renewal and Renovation Tax Increment Financing (TIF) District for Industrial Equities to provide up to $370,000 in assistance for demolition and abatement expenses. Alatus Luxury Apartments (Proposed) Alatus, LLC is proposing to construct a four-story, 183-unit luxury apartment building on the city-owned site adjacent to New Hope’s golf course. The city completed a market feasibility study in the spring of 2015 to determine what type of redevelopment site was best suited for the site, and concluded that luxury apartments were the most viable option. Land use approvals are now in place, and the city is working with the developer to finalize details of the purchase and redevelopment agreement. The developer anticipates beginning construction in the fall of 2016, with a spring of 2018 opening. CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 9 Housing 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 residential property owners in New Hope access to a comprehensive array of financing and rehabilitation services. The Home Improvement Loan Program encourages and supports the preservation of existing housing by providing loans to improve the basic livability and/or energy-efficiency of the borrower’s home. The Low Interest Loan Program, Unsecured Loan Program, and Interest Subsidy Program provide 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. 2013 2014 2015 Loans/Subsidies/Leveraged Funds 3 7 4 Amount $13,090 $99,487.44 $40,693 Scattered Site Housing Over the years, the city has acquired a number of 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 acquiring homes for demolition in order to provide vacant lots for the construction of new single-family homes. The city uses its Economic Development Authority (EDA) to purchase the homes. The EDA uses its cash reserves for the acquisition and demolition costs associated with each property. The EDA expects that a loss will be incurred on each project, as the cost to acquire the distressed properties and prepare the sites for redevelopment exceed the value of the new vacant lot. To cover this loss, the EDA uses Community Development Block Grant funds that are provided by the Federal Government and administered locally by Hennepin County. The following scattered site housing projects took place over the last year: CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 10 Address Previously Assessed Value Sale Price/New Value Percent Increase 5431 Virginia Ave N $121,000 $245,000 102% 6059 West Broadway $151,000 $226,000 50% 9115 62nd Ave N $65,000 $296,000 355% 9121 62nd Ave N $65,000 $271,000 316% $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 5431 Virginia Ave N 6059 West Broadway 9115 62nd Ave N 9121 62nd Ave N Scattered Site Housing Projects Previously Assessed Value Sale Price/New Value CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 11 Property Values 2012 2013 2014 2015 Taxable market value $1,223,862,183 $1,235,267,314 $1,334,517,728 $1,430,939,117 Percent change -7.98% 0.93% 8.03% 7.23% Household Value 2012 2013 2014 2015 Median household value $164,000 $168,000 $180,000 $188,500 $1,100,000,000 $1,150,000,000 $1,200,000,000 $1,250,000,000 $1,300,000,000 $1,350,000,000 $1,400,000,000 $1,450,000,000 2012 2013 2014 2015 Property Values $150,000 $155,000 $160,000 $165,000 $170,000 $175,000 $180,000 $185,000 $190,000 $195,000 2012 2013 2014 2015 Median Household Value CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 12 COMPLETED & ONGOING PROJECTS CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 13 New Hope Hy-Vee New Hope Hy-Vee is a 90,000-square foot grocery store that features a full-service restaurant (Hy-Vee Market Grille), a pharmacy, a liquor store, a North Memorial express clinic, a Starbucks, and a US Postal Service sub-station. Other features include a large deli, specialty cheeses, a bakery with artisan breads, a cooking demonstration area, and an 11,000- square foot organic foods section. Hy-Vee is an employee-owned grocery stored based out of Iowa that operates 230 stores in eight Midwestern states. The city purchased and demolished the K-Mart that previously occupied the site in 2012, clearing the way for redevelopment. In January of 2014, three concepts for redevelopment were presented, with the City Council favoring the Hy-Vee proposal from Anderson Companies. ADDRESS OPENING DATE JOBS CREATED VALUATION OF WORK 8200 42ND AVE N SEPTEMBER 2015 612 $12,289,662 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 14 Hy-Vee Gas Hy-Vee Gas and the accompanying convenience store opened on August 25, 2015. In addition to the standard selection of convenience store products, Hy-Vee Gas offers private-label Hy-Vee grocery items, including prepared foods. The gas station offers 24-hour fueling and features the Hy-Vee Fuel Saver + Perks program, which allows shoppers to earn discounts on gas when purchasing designated products. Hy-Vee’s Fuel Saver + Perks card is also accepted at Shell Stations, Casey’s, and PDQ. ADDRESS OPENING DATE JOBS CREATED VALUATION OF WORK 8300 42ND AVE N AUGUST 2015 15 $934,552 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 15 North Memorial Clinic North Memorial New Hope is a new 14,740-square foot state-of-the-art clinic primary care medical clinic. It provides preventative services, acute care, chronic disability management, and specialty services including rheumatology, dermatology and podiatry. The clinic moved its staff from an existing location in Plymouth when it opened in February 2016. The clinic was developed in partnership with The Davis Group and focuses on creating the best possible experience for patients. This includes include rapid check-in capabilities and the latest technology to guide patients through their visit. The building satisfies “Phase 2” requirements for development of the land, as outlined by a Development Agreement between Hy-Vee and the city of New Hope. The landscaping and lighting plans are consistent with the Hy-Vee Planned Unit Development master development plan. ADDRESS OPENING DATE JOBS CREATED VALUATION OF WORK 8100 42ND AVE N FEBRUARY 2016 29 (7 PHYSICIANS) $3,294,6700 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 16 Parkview Parkview is a 60-unit housing development under construction at 55th Ave N and Winnetka Ave N by Centra Homes. The residential development will be association- maintained and consist of 29 traditional single-family homes and 31 detached townhomes. The two-story, single-family homes will range from 2,585 to 3,990 square feet with a variety of models and floor plans. Each model includes a two-car garage with a number of models offering an option for a three-car garage. The detached townhomes will range from 1,974 to 2,128 square feet. The city of New Hope purchased the 17-acre site in 2013, with a goal of diversifying available housing stock in the city. ADDRESS SALE PRICE or LIST PRICE 5500 VIRGINIA AVE N $392,965 (LIST) 8048 55TH LN N $428,275 (SOLD) 5501 UTAH AVE N $293,753 (LIST) 5516 VIRGINIA AVE N $359,755 (SOLD) CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 17 Compass Pointe Compass Pointe is a four-story, 68- unit multi-family residential apartment building at the southwest corner of 62nd Ave N and West Broadway. Residents began moving into the building in August 2015. The facility is geared towards families with incomes at or below 60% of the area median income. It is comprised of 1, 2, and 3- bedroom units renting for $733, $880, and $1,017 per month. The city of New Hope purchased and demolished three four-plexes on the site in 1998. The Swift gas station at 6113 West Broadway was acquired in 2012, ultimately leading to the construction of Compass Pointe. ADDRESS OPENING DATE UNITS VALUATION OF WORK 6113 WEST BROADWAY AUGUST 2015 68 $8,970,445 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 18 Gates of New Hope Residents began moving into the Gates of New Hope apartment complex in August 2015. The four- story, 32-unit building is located at the northeast corner of Medicine Lake Rd and Hillsboro Ave N. It includes 15 one-bedroom units, 14 two-bedroom units, 3 three-bedroom units, and a 34-stall garage on a 1.6 acre lot. There are three storm water ponds to handle runoff from the site. ADDRESS OPENING DATE UNITS VALUATION OF WORK 9390 27TH AVE N AUGUST 2015 32 $3,530,203 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 19 Industrial Equities A 48,000-square foot speculative industrial building at 9449 Science Center Dr was approved by the New Hope City Council in July 2015. Demolition took place in early 2016, and the building is currently under construction. The building is being constructed by Industrial Equities and will mimic the previously constructed building shown to the right and below. The high-quality, single-story, multi-tenant building replaces a vacant and distressed industrial building and will provide flexible space to meet the needs of many potential tenants. A Tax Increment Financing (TIF) District was created to provide up to $370,000 in assistance for demolition and abatement expenses. ADDRESS OPENING DATE VALUATION OF WORK 9449 SCIENCE CENTER DR FALL 2016 (PROJECTED) $3,294,6700 CITY OF NEW HOPE ECONOMIC DEVELOPMENT REPORT Page 20 Scattered Site Housing Over the years, the city has acquired a number of 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 residentia l neighborhoods. The program currently emphasizes acquiring homes for demolition in order to provide vacant lots for the construction of new single-family homes. The city uses its Economic Development Authority (EDA) to purchase the homes. The EDA uses it s cash reserves for the acquisition and demolition costs associated with each property. The EDA expects that a loss will be incurred on each project, as the cost to acquire the distressed properties and prepare the sites for redevelopment exceed the value of the new vacant lot. To cover this loss, the EDA uses Community Development Block Grant funds that are provided by the Federal Government and administered locally by Hennepin County. *The property pictured above is 5431 Virginia Ave N. ADDRESS PREVIOUS ASSESSED VALUE SALE PRICE/NEW VALUE % INCREASE 5431 VIRGINIA AVE N $121,000 $245,000 102% 6059 WEST BROADWAY $151,000 $226,000 50% 9115 62ND AVE N $65,000 $296,000 355% 9121 62ND AVE N $65,000 $271,000 316% TOTAL $402,000 $1,038,000 158% Before After