HomeMy WebLinkAbout07-21-2009 Council Economic Development CommitteeAGENDA
City of Iowa City
City Council Economic Development Committee
Tuesday, July 21, 2009
8:00 a.m.
Lobby Conference Room
City Hall
1. Call to Order
2. Consider approval of June 15, 2009 minutes
3. Consider Englert Theatre performance measures for funding
4. Committee time
5. Adjournment
draft
MINUTES
CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE
JUNE 15, 2009
CITY MANAGER'S CONFERENCE ROOM, 8:00 A.M.
Members Present: Regenia Bailey, Connie Champion, Matt Hayek
Staff Present: Wendy Ford, Jeff Davidson, Mike Tharp
Others Present: Howard Horan (Airport Commission), Joe Raso (Iowa City Area
Development Group)
RECOMMENDATIONS
CALL MEETING TO ORDER:
Chairperson Regenia Bailey called the meeting to order at 8:03 A.M.
CONSIDER APPROVAL OF THE MINUTES OF THE MAY 27, 2009 ECONOMIC
DEVELOPMENT COMMITTEE MEETING:
Hayek moved to approve the minutes of the May 27, 2009 Economic Development Committee
meeting, as submitted; seconded by Champion. Motion carried 3-0.
CONSIDER RECOMMENDATIONS FOR SOUTH AIRFIELD STUDY:
Ford noted that this agenda item is before the Economic Development committee because it will
directly relate to future Economic Development efforts. Having the Airport's recent FAA -approved
airfield study will help guide the future development on unneeded airport ground. She cited
comments in a cover memo from the Airport Commission which noted that:
a) the Airport has an agricultural lease on the ground, which provides an annual revenue
stream of $25,000 and their concern that if any development would take place in this
area south of the Airport, it would end their ability to lease the land. Ford noted the
need to consider the value of this land and it's property tax potential once it is
developed (e.g. every $10 million in taxable value nets $800,000+ annually in property
taxes), versus the amount gained by agricultural leasing; and
b) that the Airport Commission has noted that they would like to see this land developed
after the land in the north Aviation Commerce Park is completely developed. Ford
noted the need to consider that the zoning in the north is different (CI-1) than the
comprehensive plan calls for in the south (1-1) and thus weakens the argument since
the land use and thus, the users would be different; and
c) that the Airport Commission has also noted that they would prefer to lease the land to
south of the Airport, versus selling it. Ford noted they have found in dealing with the
north aviation commerce park area that companies would rather buy land than lease.
The Willow Creek flood plain was also discussed, and Ford noted the recommended flood
mitigation measures and their approximate costs. Flood mitigation would be necessary prior to
development in the area.
The discussion continued with participants discussing possible development and other issues of
concern for this area. Joe Raso, of ICAD noted they had hired Austin Consulting to help craft a
local Shovel Ready Sites Program, and that this area may be a good candidate for a study of
gaps that exist in available industrial land in the Iowa City area. Davidson responded to
questions regarding availability of industrial land and what the Comprehensive Plan calls for,
Economic Development Committee Meeting
June 15, 2009
saying that since we have just recently purchased 173 acres on the southeast side of the city that
we have a good inventory of developable industrial land.
Howard Horan, Airport Commission Member, stated that the Commission's desire to lease the
land versus selling it, is to maintain a consistent income source for the Airport. He continued,
stating that with the FAA's requirements, they are fairly limited to what can be done.
Bailey then led the group through the issues in question, first discussing the question of whether
the south airfield area should wait until the full build -out of North Aviation Commerce Park.
Champion stated that she did not think this is a big issue. Hayek asked for some background on
the North Aviation area and how that has progressed. Staff replied that there is interest in the
north area, and that several parcels have been sold, but interest has slowed somewhat in recent
months. Hayek added that it does not really make sense to delay the south area, but that there
are other issues that need to be addressed there first. These issues include flood mitigation and
the lease vs. sell question. Bailey stated that she believes it is important that they continue to
push for industrial and commercial development over the next few years, and that she would like
to see the south airfield area brought online sooner rather than later. The discussion turned to
what would need to be done to the south area if development were sought in the next few years.
Davidson responded, explaining what infrastructure would be needed to move forward.
Davidson asked if the Committee is concerned about building out the north aviation area before
starting on the south area. Members noted that they do not see this as all that important, with
Hayek reiterating that the Airport must be certain of its future needs, preserving enough room to
grow for the future. Bailey stated that over the next three to five years, the Airport should come
up with plans to move forward on the south area development. Horan further explained the
Airport Commission's thoughts behind long-term leasing versus selling. Joe Raso spoke, noting
that a lot of industrial businesses would prefer to buy instead of lease. Other entities, such as
research firms, are more likely to do lease agreements than manufacturing or industrial firms.
Bailey stated that she would recommend that the Airport move ahead with a plan, get timelines
figured out, and decide what they need to move forward with development in the south airfield
area. This could include flood mitigation. Hayek noted that he has wants to ensure that 20 to 30
years from now the Airport will not need to buy land back in order to expand. Bailey noted that
this is why she would like to see a plan with timelines, identifying the Airport's intentions for its
future expansion.
Davidson summarized what had been discussed thus far: that the Committee concurs with layout
#5, and that the Members wish to move ahead with flood mitigation measures that would then
allow the south area to be developed. Bailey added that they concur with #5, and that they would
like the Airport to move ahead with "detailed exploration of its feasibility for balancing the interest
of the Airport and our industrial needs." Hayek noted that he would still like to hear more about
recommendation #5, and Davidson suggested they add this to their recommendation. Bailey
reiterated that a more thorough review of this will help them in moving forward.
Horan noted that the Airport Commission will come up with a "preferred" recommendation on this
and will bring it back to the Economic Development Committee. At the same time, Ford will look
into flood mitigation funding and see if anything is available for this.
CONSIDER GUIDANCE ON INCENTIVES FOR INDUSTRIAL PARK DEVELOPMENT:
Ford referred Members to the memo in the packet on this item. Citing the need to respond
quickly and consistently when working with companies interested in locating in the new industrial
park, she explained a three-tier proposal of incentives based on good jobs and capital investment
by companies we hope to lure to the area. The three tiers, she further explained, would couple a
tax increment financing rebate or partial industrial property tax exemption with a "bonus" per good
job created, depending on the quality of the jobs, based on average hourly wages.
Economic Development Committee Meeting
June 15, 2009
Ford noted the two tables in the memo that illustrate the costs and benefits of the tax incentives
suggested. The information in the tables was presented over a 20 year time frame window to
illustrate the long term costs and benefits to the community of incenting a business in this fashion
with the assumption that after an exemption period or rebate period had ceased, there would
remain a substantial value to the property, whether it was the same company providing that value
or a different one. Bailey questioned the 20-year premise, stating that our agreements average
seven years, and that they cannot hold companies to this 20-year timeframe. Ford further
clarified this, stating that assuming the company stays or a comparable company in its place was
to stay, the property would still be contributing taxes to the community. Conversation continued
with those in attendance giving their thoughts on the timeframe and whether it should be shorter.
Bailey added that a 15-year window would be more in line, in her opinion.
Bailey continued to discuss the wage threshold numbers. Ford explained to the Members that
these numbers are the same as the wage thresholds used by the State Business Finance
programs. Raso interjected that the State announced this week that there would be changes to
their program and that we should be aware of the new changes as we consider local business
finance assistance guidelines. Bailey concurred that guidelines we design should have parallel
wage and time thresholds in order to better monitor assisted projects. Staff will research the new
state wage and timeline thresholds and rework suggestions for guidelines accordingly. Reworked
guidelines will be presented at a future meeting.
COMMITTEE TIME:
None.
ADJOURNMENT:
Hayek moved to adjourn the meeting at 8:50 A.M. seconded by Champion.
Economic Development Committee Meeting
June 15, 2009
Council Economic Development Committee
ATTENDANCE RECORD
2009
TERM
-
c„
rn
NAME
EXP.
o
-4
cn
Regenia
01102110
X
X
X
Bailey
Matt
01/02110
X
X
X
Hayek
Connie
01/02/10
X
X
X
Champion
Key:
X = Present
O = Absent
O/E = Absent/Excused
r
��,-, .® CITY OF IOWA CITY
� 01MEMORANDUM"C� M&
Date: July 17, 2009
To: City Council Economic Development Committee
From: Wendy Ford
Re: Englert Theatre Accountability Measures
At your December 16, 2009 meeting you entertained a proposal from the Englert Theatre for a
three year annual funding request of $50,000. You supported the request and the inclusion of
the funding in the FY 2010 budget which was approved in early 2009.
During the discussion at the December meeting, you expressed a desire for performance
measures about which the Englert would report on each year. Sean Fredericks, Englert CEO,
has outlined in the following memo the measures the Englert will use. Where applicable, he has
included statistics for this year to serve as a benchmark for future evaluation and he proposes to
track the Englert's impact with three new statistics.
Please be prepared to discuss these accountability measures as those which the Englert will
use to report to council for successive years of funding.
CALL. 319.688.2653
COCK www.englert.org
VISIT 221 E Washington M.. Iowa City, IA 52240
CONNECT Blogger ,1 Facebook i MySpace i Twitter
July 16, 2009
To the Economic Development Committee:
Thank you for supporting The Englert Theatre's request for a $50,000 annual investment from the City
of Iowa City, which was subsequently approved as part of the City's FY 2010 budget and three-year
plan.
There are many intangible benefits of having a thriving cultural venue in the heart of Iowa City's
downtown area. These benefits, such as community pride, availability of diverse artistic opportunities
for audience members and participants, and the ability to attract talented workers to live and work in
the area, are notoriously difficult to measure.
However, there are also useful quantitative ways to look at the Englert's impact on the local economy.
We are committed to gathering the data necessary to make those measurements, and to share our
findings with this Committee.
We will track and report the following variables (see attached page for baseline measurements):
- Number of tickets sold (i.e. number of people coming downtown)
- Zip code breakdown, to determine in -town vs. out-of-town patron mix
- Dollar value of rental subsidies provided to non-profit organizations
- Indirect spending multiplier effect - $20 per patron (League of Historic American Theatres)
- Direct spending by the Englert in the community (Chamber of Commerce Buy Here initiative)
- Sales data from selected downtown restaurants: typical weekday vs. weekday when there is
an Englert event (subject to restaurant approval)
Parking data from City garages: typical weekday vs. weekday when there is an Englert event
(subject to City approval)
By measuring these variables, the Englert and the City will be able to monitor the impact of the
theater on the local economy over time. We are also open to suggestions from the Committee about
other items to track.
As you know, the Board of Directors recently changed the Englert's organizational structure.
Simultaneously, Beth Bewley -Randall decided to leave the Englert for her family business. Although
we are going through a transitional period, 1 am confident the Englert will emerge from this process a
leaner, stronger and more efficient organization. We now plan for our operations to break even or
better by the end of 2010 — a full year ahead of the projections we presented to this Committee seven
months ago (see attached).
The Englert will continue to be a vibrant resource the entire community can enjoy. Our plan is to
offer the same diverse mix of cultural opportunities we have become known for, and to do so in a
responsible and sustainable way.
Tha you,
Fredericks
r-_
CEO
Baseline Measurements - Calendar Year 2008
Number of tickets sold (i.e. number of people coming downtown):
- 35,271
Zip code breakdown:
- Johnson County zip codes: 83%
- Outside of Johnson County:17%
Dollar value of rental subsidies provided to non-profit organizations:
- $55,000
indirect spending multiplier effect - $20 per patron (League of Historic American Theatres):
- $705,420
To be measured in 2009 and future years
Direct spending by the Englert in the community (Chamber of Commerce Buy Here initiative)
Sales data from selected downtown restaurants: typical weekday vs. weekday when there is an Englert
event (subject to restaurant approval)
Parking data from City garages: typical weekday vs. weekday when there is an Englert event (subject
to City approval)
Revised Budget Projections for 2009-2010
2008 ACTUAL 2009 ESTIMATE 2010
Income
Development Income
Friends of the Englert
$
39,676
$
40,000
$
50,000
Fundraising Events
$
69,435
$
15,000
$
20,000
City of Iowa City
$
-
$
50,000
$
50,000
Grants/Foundations
$
6,820
$
24,000
$
30,000
Total Development Incon $
115,931
$
129,000
$
150,000
Other Income
$
38,067
$
26,000
$
28,080
Rentals
$
159,057
$
120,400
$
146,240
Englert Series
$
529,601
$
499,100
$
571,521
Total Income
$
842,657
774,500
$
895,841
Expenses
Administration
$
60,949
$
79,990
$
83,853
Building
$
103,889
$
88,933
$
98,168
Fundraising
$
73,112
$
3,970
$
8,500
Non -Operating
$
39,079
$
45,000
$
45,000
Personnel
$
302,053
$
285,500
$
243,326
Rentals
$
3,344
$
2,450
$
5,250
Englert Series
$
352,206
$
322,350
$
395,020
Total Expenses
$
934,631
$
828,193
$
879,116
Profit/(Loss)
$
(91,975)
$
(53,693)
$
16,725