6 Economic Development

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1 6 A strong community is not simply about housing and parks but also economic vitality. Mendota Heights seeks to support its community through a diverse mix of commercial offerings, retention and expansion of job-generating businesses, and preserving land for commercial and industrial activities that is adequately buffered from nearby residential areas. Regional Context The Metropolitan Council recommends including an economic development element in local comprehensive plans, to achieve regional goals for economic competitiveness. Providing great locations for businesses to succeed, particularly industries that export products or services beyond our region and bring revenue and jobs into the region, is a significant need. The Metropolitan Council defines two key terms related to this element: Economic Competitiveness Examining and strengthening the ability of the region to compete effectively and prosper in the global economy. Activities that directly aim to retain, attract, and grow businesses that bring wealth into a community or region. While the City focuses its efforts on growing businesses within its own boundary, it is also important to understand the context for that growth within the region and work with regional partners to achieve shared success. Part of the regional context for Mendota Heights is its excellent location within the regional roadway network and its proximity and easy access to MSP International Airport. Both are critical to cities within the regional economic environment. topics addressed in this chapter include: Economic Overview Redevelopment and Business Development Education and Workforce Economic Information, Monitoring, and Strategic Initiatives 6-1

2 GOALS and POLICIES GOAL 6.1: Promote in Mendota Heights through a comprehensive approach to business needs Manage growth and land resources to ensure an appropriate mix of developments and, where possible, land to secure new business investments Retain the present industrial and commercial base and encourage companies with their expansion needs where appropriate Attract quality businesses consistent with the City s target market to areas available for development Explore options for sites and buildings to meet the demand for commercial and industrial development Maintain an infrastructure system to meet the needs of current businesses and facilitate future growth Address unique development challenges including the reuse and redevelopment of vacant buildings Foster private investment and economic activity without compromising community objectives to maintain and enhance Mendota Heights environment. GOAL 6.2: Promote Business Attraction, Retention, and Expansion In Mendota Heights Identify target markets and prepare and implement a marketing plan to attract businesses that fit this market Work with local businesses and industry to ensure needs for expansion and development are adequately met and maintain an open line of communication with the business sector through the Business Retention and Expansion Program. 6-2

3 6.2.3 Continue to actively provide information and market Mendota Heights to commercial brokers and retail businesses in order to expand retail and service opportunities in the City Work cooperatively with local business groups, the school district, and area colleges and universities to provide training for workers, which in turn will help develop skills needed for sustaining productive workforce for existing and future Mendota Heights businesses. GOAL 6.3: Promote through Public Financing Tools Periodically review economic development opportunities, such as incentive programs from county, regional, state, and federal agencies Review new and innovative economic development incentives proposed by existing and future businesses in Mendota Heights Pursue outside funding sources to develop or redevelop land for commercial and industrial uses, such as Metropolitan Council Livable Communities Demonstration Account and Tax Base Revitalization Account, Dakota County Community Development Agency (CDA), Minnesota Department of Employment and, and other applicable grants. GOAL 6.4: Continue to develop community commercial areas that serve the whole community Provide and support commercial areas to supply convenience goods and services for residents of Mendota Heights To mitigate conflicts between commercial and residential development, require appropriate land use transitions at the edges of residential neighborhoods through the use of setbacks, screening, buffering and fencing Require sidewalk connections along major streets leading up to neighborhood commercial centers and direct connections from the public sidewalk to the storefronts. 6-3

4 GOAL 6.5: Continue to develop business park areas that provide jobs and serve the local and regional economy Provide opportunities for new industrial development and expanded employment opportunities to create livable-wage positions in Mendota Heights and the redevelopment of existing industrial uses to serve existing businesses in the community Provide attractive, planned environments as a means to induce employers to locate within the city Continue to provide and enforce standards for industrial developments that improve the appearance and character of industrial properties Provide high quality public services and infrastructure in all commercial and industrial districts. Economic Overview A 2016 report by Tangible Consulting Services evaluated the market and development conditions in preparation for the comprehensive plan update (see attached Appendix-B). It overviewed the unique demography and economic base that characterizes the city and investigated the market and development factors that will shape future growth in housing, retail, and industrial development. Mendota Heights is a fully developed suburb. While that status limits opportunities for new development, there is a need to stay viable and attractive as the demographics of the Minneapolis-St. Paul metropolitan area shift. The population is growing, it is aging, and more households will be renters. Choices about purchasing and employment will also evolve. Decisions about housing redevelopment, retail support and location, and office and employment opportunities will influence Mendota Heights character as a desirable place to live. 6-4

5 Redevelopment and Business Development Opportunities for business investment will likely include retail, business, office and industrial uses. Retail areas in Mendota Heights benefit from their visibility from the heavily traveled Highway 62 corridor. They also benefit from their distance from other retailers. Their distance from retail centers in the nearby communities of Eagan and West St. Paul gives Mendota Heights retailers a corner on neighborhood goods and services for residents in the surrounding neighborhoods. These locational characteristics are likely to keep the areas strong into the future. Mendota Heights is more limited in its prospects for destination retail given its competition in this category in surrounding communities. The Mendota Heights Industrial District (MHID) is an important contributor to the tax base compared to nearby competing areas. It is in the South Central industrial submarket of the Twin Cities which encompasses West St. Paul, South St. Paul, Inver Grove Heights, Eagan, Apple Valley, and Burnsville. New industrial development in the South Central Submarket is coming online more slowly than in the metro area overall. 6-5

6 The Mendota Heights Industrial District is attractively positioned for continued business occupancy due to its central location in the region, proximity to the airport, flat topography, diversity of existing tenants, and available utilities. A major challenge is the limited opportunity for on-site facility expansion and very few sites for new industrial development. The office buildings in the Mendota Heights Industrial District and the Centre Pointe Business Park operate in a different competitive environment than the industrial facilities. Vacancy rates tend to be higher in office properties. Office developments typically cluster into specialized areas or recognized districts within the metropolitan area, due to transit availability and proximity to amenities. Office buildings in Mendota Heights two districts are 20 years old on average and together offer around 1.4 million square feet of floor area. Market indicators are mixed for office buildings in Mendota Heights the 2016 vacancy rate is lower than the metro as a whole but rents are also lower. Retail Redevelopment Opportunities While there are limited opportunities for additional retail in Mendota Heights, two exist: Expanding retail opportunities beyond what is already planned at Mendota Plaza and The Village at Mendota Heights along Highway 62 at Dodd Road. Better capturing the daytime population at the Mendota Heights Industrial District. Small footprint retail and restaurants could better serve these employees. Industrial Redevelopment Opportunities The Mendota Heights Industrial District Redevelopment Plan makes several recommendations for actions to strengthen the area s attractiveness to industrial users and invite building renovation and improvement. These include: Explore ways to communicate, brand, and promote the Industrial District; Consider city policies toward redevelopment incentives, which will provide a positive impact on future projects or existing business expansion projects; and Consider investments in broadband and other technology infrastructure as necessary to ensure the area is competitive and serves the business needs. 6-6

7 Office Redevelopment Opportunities To support continued viability of the office areas in Mendota Heights, consideration could be given to actions such as: Strengthen the office identity and branding of the southern part of the Mendota Heights Industrial District; let the district be part of the broader Eagan/Mendota Heights office district; and Build the amenity base of the area with the addition of some retail and restaurants, even if the opportunities to do so are limited. Education and Workforce A strong, educated workforce supports local businesses and gives Mendota Heights residents an opportunity to work and go to school close to home. If a community has daytime workers, it leads to more retail and restaurant offerings since those businesses can now capture a daytime crowd in addition to evenings and weekends. Additionally, residents who can work close to home reduce transportation costs and gain more time in their day that would have otherwise be spent on long commute. Education Mendota Heights is served by public schools, including Somerset Elementary, Mendota Elementary, Friendly Hills Middle School and Henry Sibley High School, all of which are part of Independent School District 197. The City is also home to St. Thomas Academy and Convent of the Visitation School. There are currently no post-secondary schools located in Mendota Heights, but the city s central location in the Twin Cities offers many easily accessible postsecondary options. Workforce Mendota Heights has a unique employment profile for a Twin Cities suburb. Businesses in Mendota Heights offer a high number of good-paying jobs and there are almost two jobs in Mendota Heights for every employed person who lives in the city. However, most Mendota Heights workers commute to jobs outside of the city. Of the roughly 5,500 workers who live in Mendota Heights, almost 95% go to work at a location outside the city limits. Only around 300 residents work at a business in Mendota Heights. 6-7

8 While some jobs are in neighborhood serving retail businesses and the community s educational institutions, the great majority of jobs in Mendota Heights are in the industrial facilities and offices in the city s industrial and office areas. The majority of employment in Mendota Heights is focused in two distinct areas the Mendota Heights Industrial District and the Centre Point Business Park. Figure 6-2: Office and Industrial Context Source: Mendota Heights Assessor Data 6-8

9 Businesses in the Mendota Heights Industrial District (MHID) offer over 7,000 principal jobs. The MHID is home to a mix of industrial and office developments. The Centre Pointe Business Park offers around 800 jobs. The business park was developed in the 1990s and 2000s and is comprised entirely of office buildings. Industrial and office jobs tend to pay a living wage which are higher on average than jobs in some other sectors such as retail stores and services. Economic Information, Monitoring, and Strategic Initiatives Through a partnership with the Dakota County Community Development Agency (CDA) and the Metropolitan Consortium of Community Developers (MCCD), the City makes available a certified Open to Business consultant to offer free services to local businesses. The service is free to any Mendota Heights business or resident. Experts help businesses plan by providing information on business startup or acquisition, creating a business plan, evaluating financials, and analyzing the viability of commercial sites. The West St. Paul Work Force Center is a valuable tool for local job seekers and businesses searching for employees in the surrounding communities. Part of a larger initiative sponsored by the Minnesota Department of Employment and (DEED), job seekers have access to job search coaching, information for veterans and people who require special services, training programs for in-demand occupations, and a free online job bank. Businesses can get help finding workers, developing a workforce strategy, locating and expanding their business, and data analysis on the local labor market. The City also partners with the Dakota County CDA on strategic initiatives such as: Investing in transportation; Coordinating strategic infrastructure and land development; Linking workforce development and economic development; Building the capacity to respond to business prospects; Providing quality workforce housing; and Strengthening development-related research and policy capacity. 6-9

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