DATE: August 31, 2015 TO: FROM: Honorable Mayor Shaw and Members of the City Council Joanne Foust, Consulting Planner AGENDA ITEM: 6 A Outlet Center Feasibility Study Grant Opportunity ****************************************************************************** REQUIRED ACTION: The City Council is asked to approve submittal of a $5,000 grant application to AgSTAR Financial Services for their Rural Feasibility Study Grant Program for the completion of the proposed Outlet Center Feasibility Study. ****************************************************************************** BACKGROUND: The City Council is being asked to consider funding for a Feasibility Study for an Outlet Center. A quote of $12,000 has been obtained from Maxfield Research. Since this project was not specifically budgeted for, staff has researched potential funding sources which may be available to assist with the study costs. We have been in contact with AgSTAR staff and received confirmation that an Outlet Center Market Study would be an eligible project for their grant. The City may apply for up to $5,000 in funding. Below is information on a Rural Feasibility Study Grant offered for communities by AgSTAR Financial Services for communities within their service area. Information from their grant program follows: The AgStar Fund for Rural America was created to demonstrate our support for agriculture and the rural communities we serve. The trustees established the fund's mission as enhancing life in agriculture and rural America. This special program underscores our dedication to rural communities and helps address one of the issues facing rural America. Through this grant program and the other programs of the AgStar Fund, we are helping to ensure a strong future for rural America. Purpose of the Program: The Rural Feasibility Study Grant Program is designed to provide funding to determine the feasibility of a project or to plan for a project located in rural areas of Minnesota and Wisconsin. Such projects will need to meet an economic development or sustainability objective and, if implemented, will create new permanent jobs that result in the economic development of a rural area. Sponsor: AgStar Fund for Rural America in conjunction with the AgStar Rural Capital Network team. Amount of Funding: A total of $50,000 is available with grants ranging from $1,000 to $5,000 based on needs indicated. The AgStar Fund reserves the right to award all or part of the grant amount requested. Timeline: Applications will be accepted until all funds are awarded.
Eligible Applicants: Non-profit organizations serving rural areas, educational institutions, and state, county, local or tribal governments are eligible to apply. Eligible Projects: Market research Cost analysis Financial projections Assessment of suitable facilities, equipment, etc. Raw material sources Prototype development ************************************************************************************* RECOMMENDATION: Staff recommends approval of the submittal of a grant application to AgSTAR Financial Services for the Rural Development Feasibility Study Program, in the amount of $5,000. ************************************************************************************* ACTION: A MOTION is requested to approve the submittal of a grant application to AgSTAR Financial Services for the Rural Development Feasibility Study Program, in the amount of $5,000. ************************************************************************************* FISCAL IMPACT: If the grant is awarded, there is a cost savings of $5,000 for the market study. ************************************************************************************* CITY COUNCIL ACTION: Motion: Second: Approved: Disapproved: Tabled:
September 9, 2015 Ms. Melanie Olson AgStar Fund Rural Feasibility Study Grant Program 14800 Galaxie Avenue, Ste 205 Apple Valley, MN 55124 Dear Ms. Olson: Enclosed please find an application for the Rural Feasibility Study Grant Program for an Outlet Center Feasibility Study for the City of Jordan. The City of Jordan respectfully requests consideration of a $ 5,000 Grant to fund 42% of the cost of an Outlet Center Market Study. We strongly believe this can be used as a marketing tool to help stimulate commercial growth and tourism as well as expand employment opportunities within the community. If you have any questions or would like additional information, please feel free to contact me at: 952-492-2535 or via email at: TNikunen@ci.Jordan.mn.us Thank you for considering this application and your support for economic development in Jordan! Best regards, Thomas Nikunen City Administrator
Outlet Center Feasibility Study 2015 Rural Feasibility Study Grant Program Application AGSTAR Fund for Rural America September 9, 2015
Project Name: Jordan Outlet Center Feasibility Study 2015 Location of the Project: City of Jordan, Scott County, MN Description of Project and Need for the Study: The City of Jordan is seeking funds to conduct an Outlet Center Feasibility Study. This would include a site evaluation, a demographic and economic analysis, a retail market analysis, and conclusions and recommendations. Jordan was incorporated as a city in 1891. Today, the City of Jordan is a flourishing city with the growth of the Metropolitan area. Scott County is one of the most rapidly growing counties in the state of Minnesota. The City has a full range of urban land use services and is the cultural and economic center of the immediate region Jordan, located along Highway 169 in Scott County, is ideally situated for new business, including an Outlet Center. The City s close proximity to the metro (35 miles west of the twin cities), access to state and county highways and an active rail line make the community marketable to new and expanding businesses and residents. With traffic counts between 20,700 and 28,500 vehicles per day along Highway 169 within the City of Jordan (MnDOT 2014Traffic Counts), the City offers excellent exposure and access. Over the past year Jordan has been fortunate to welcome a new manufacturer, Minger Properties, to the City in a new industrial park. The City also approved expansion projects for Wolf Motors, McDonalds, Holiday Gas Station. A new microbrewery is under construction in the downtown. In addition, the City is in the process of completing a $1.2 million street and utility project in the downtown which also includes streetscape amenities such as trees, benches, planters, way finding signage, etc. The City of Jordan believes an outlet center in the Highway Commercial district would complement the historic downtown and the investments made in this commercial area. While the Jordan Economic Development Commission (EDA) believes there is a demand for an Outlet Center; developers and their financing agencies rely on feasibility studies and statistics. A study is needed to confirm this demand and identify the type and size of Outlet Center which could be successful in the community. Upon completion, the study would be provided to developers, with the goal to recruit a Outlet Center to the Jordan. Entity Completing the Study: The City would engage the services of Maxfield Research to complete the study. Maxfield Research has over 30 years of market study research. Proposed Time Line for the Study: 50 to 60 days Project Budget: $12,000 Amount of Grant Funds Requested: The City of Jordan respectfully requests a $5,000 grant or 42% of the study cost.
Criteria for Consideration Requirements: Impact of the project on the community and region: The proposed market study would supply the City with the information needed to determine the feasibility for the City of Jordan to attract an Outlet Center, which would be a regional commercial destination. An Outlet Center has the potential to greatly impact the city, school and county s tax base, assist with tourism and provided additional employment opportunities for area residents. Consistency with local and area-wide strategic plans for the community and economic development: The City of Jordan updated its Comprehensive Plan in 2008. The city included goals for increased commercial development and identified the area which would be included in the study as a large highway commercial development. As a part of the City s 2010 Highway Commercial Zoning Ordinance update, a goal of developing a larger nodal style development versus a series of small strip malls along the corridor was development. An outlet center development meets this criterion. An outlet center is consistent with Scott County s goals to increase employment and retail opportunities in the various cities. Local support: The City of Jordan has committed to funding the balance of the cost of the Outlet Center Feasibility Study. This was approved at their September 8, 2015 Council meeting. Collaboration with other entities: The City of Jordan works closely with the Scott County Community Development Agency. The City and County CDA partnered to construct a new senior housing facility in Jordan, which also houses the Public Library, a medical clinic and pharmacy. The Jordan EDA also collaborates with SCALE a group of Scott County area leaders, the Scott County First Stop Shop and Open to Business programs. With an outlet center project, the City would coordinate transportation improvements with Scott County s Highway Department and MnDOT, as required. The City of Jordan also collaborates with the Jordan Chamber of Commerce and Jordan Commercial Club, with city staff members serving on the boards of the local business organizations. Likelihood of project completion: The City of Jordan is committed to completing the Outlet Center Feasibility study. If the Study indicates it is not financially feasible to support an Outlet Center in the community; the demographic analysis, site evaluation and other data in the study will still be beneficial information. The City is committed to working with developers to bring an outlet center project to reality, if the study confirms the feasibility. Level of economic distress in the community: The MN State Demographer reports the population of Jordan increased approximately 12% from 2010 to 2014, with 678 new residents.
While the population increased from 5,470 to an estimated 6,148, the number of businesses providing employment opportunities and goods and serves to residents has remained relatively stable. According to the MN Department of Employment & Economic Development, 2015, statistics, the number of business entities in Jordan fluctuated between 168 to 172, from 2011-2014. The City of Jordan and its EDA are committed to expanding the retail base and building on the well-rounded community which not only focuses on residential growth but also industrial and commercial growth. Unique features of the project: Outlet Centers are unique regional commercial developments which serve as destinations. There are only four Outlet Centers, which are similar in nature, in MN. The closest outlet center is located in Eagan which is over 30 miles away. Other outlet centers, which are located in North Branch, Albertville and Medford are all more than 50 miles away. The Jordan Trade Area, which would be served by an Outlet Center, is outside the other outlet center trade areas. Located between Mankato and the Twin Cities, Jordan is ideally located for this unique regional destination. Basis for determining the success or failure of the project, including major elements of the project and procedures that will be taken to access the project s impact at its conclusion: The success of the Market Study will be evaluated by the completion of the study, the determination of whether or not it is feasible to support an Outlet Center, and the ability to attract a developer for an Outlet Center. Extent to which the Project/Concept has been studied: The City of Jordan has not had an Outlet Center Feasibility Study completed in the past. Anticipated Obstacles or Hurdles. We do not anticipate any hurdles in completion of the Outlet Center Feasibility Study. Completion in Area of study already located or proposed in the area: An Outlet Center Feasibility Study has not been completed in Jordan. The City of Jordan completed a hotel market study in 2014. As a result, the city was able to recruit a developer and recently approved plans for a new hotel which is planned for construction in fall 2015-spring 2016. Public Discussion relating to Project Funding and Intent to Request Feasibility/Planning Study Funding: The City of Jordan discussed the need for an Outlet Center and market study at their September 8, 2015 regular meeting. Due to the cost of the study and the limited budget, a grant application to AgStar was discussed and recommended at the Council meeting. Timeline for Market Study: The study is proposed to begin in September, 2015 and be completed 50 to 60 days from date of grant award. Description of Entity Developing the Study: Maxfield Research Inc. is a full-service real estate research company that provides comprehensive real estate market information and market feasibility studies. They have more than 30 years of experience in real estate feasibility and consult on a variety of real estate related issues. According to Maxfield Research, they have, worked with a diverse clientele in more than 30 states, creating customized work programs, detailed recommendations, and objective analysis.
Maxfield Research, Inc. proposes to include several key areas in the study to determine the feasibility of an Outlet Center in Jordan including: 1. Site Evaluation including a field visit to evaluate aesthetics, access and visibility; review historic and projected traffic volumes, review adjacent land uses, proximity to retail nodes and commercial corridors, schools housing, recreation and employment; providing mapping and illustration of the site and discuss the appropriateness of the proposed site for an Outlet Center. 2. Demographic and Economic Analysis Define the primary and secondary market area or trade area; analyze the growth trends in population, household and employment growth and summarize the links between the demographic profile and the ability to support the Outlet Center at the subject property. 3. Retail Market Analysis Identify the consumer expenditures in the trade area, provide overall retail sales in the trade area, identify and map all outlet centers in the metro and surrounding areas, interview brokers and economic development specialists and inventory any planned retail developments in the trade area and assess the potential impact on the proposed outlet center at this site. 4. Conclusions and Recommendations This section will include the potential demand for the retail space on the subject property, identify capture rates for the Trade Area based on the information gained, summarize appropriate lease rates, types of tenants and sizes of space and identify a potential timeframe and phasing plan for attracting the uses. Additional information on Maxfield Research may be found at: http://maxfieldresearch.com/ Proposed Financing: The total project is $12,000. The City requests a $5,000 grant. Previous Funds Awarded to Jordan for Economic Development Studies in the past 5 Years: The City of Jordan has not received funding for economic development studies over the past five years. The City of Jordan would like to thank you for your consideration of this grant application!