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HomeMy WebLinkAbout03-30-2015 Council Economic Development CommitteeAGENDA City Council Economic Development Committee Monday, March 30, 2015 12:00 p.m. City Manager's Conference Room City Hall 1. Call to Order 2. Consider approval of minutes from the January 12, 2015 Economic Development Committee meeting 3. FY15 Budget Line items report: Economic Development Assistance 4. Consider a request from EDC for annual assistance of $25,000 5. Consider a request to underwrite Entrefest Sponsorship of $10,000 6. Staff updates a. Telepharm parking incentive 7. Committee time 8. Other business 9. Adjournment EDC January 12, 2015 P. 1 PRELMNARY MINUTES CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE JANUARY 12, 2015 CITY MANAGER'S CONFERENCE ROOM, CITY HALL, 12:00 P.M. Members Present: Susan Mims, Michelle Payne, Matt Hayek Staff Present: Wendy Ford, Jeff Davidson, Geoff Fruin, Tom Markus, Doug Boothroy, Tracy Hightshoe Others Present: Bruce Kinseth, Nancy Quellhorst (Chamber), Ben Kinseth, Kevin Digmann, John Hieronymus, Charlie Graves, Joe ClarkTom Jackson (via phone) RECOMMENDATIONS TO COUNCIL: Payne moved to recommend approval of the request from Kinseth Hospitality Company for $8.8 million in TIF financing to the full City Council. Hayek seconded the motion. The motion carried 3-0. CALL MEETING TO ORDER: The meeting was called to order by Chairperson Mims at 11:59 A.M. She first asked that those present identify themselves. CONSIDER APPROVAL OF MINUTES: Minutes of the December 8, 2014, were reviewed. Payne moved to approve the minutes as amended. Hayek seconded the motion. Motion carried 3-0. Jeff Davidson introduced a proposal from Kinseth Hospitality Company for financial assistance from the City. The project is a full service 12-story Hilton Garden Inn Hotel with 144 rooms at 328 S. Clinton Street. Davidson noted the architectural image as a design concept for the property. The actual design has not yet been decided, but Davidson noted that it is consistent with the form based code in the Riverfront Crossings' district. The proposed project costs are near $33 million and a financial analysis completed by NDC confirms an $8.8 million gap in financing. Staff proposes an innovative three -fold package for funding the gap. The gap funding package includes $4.8 million that would be generated in tax increment financing rebates from the hotel itself, plus an estimated $2.5 million in 50% tax increment rebates generated from the adjacent property planned EDC January 12, 2015 p. 2 PRELIMINARY for the University of Iowa Art Museum with ancillary taxable components. The third piece would be a rebate of 50% of the hotel/motel taxes generated by the new hotel. All three funding sources would be used until the total rebates reached $8.8 million. Parking for the hotel would be accommodated in the Court Street Transportation Center, where there would be a skywalk connection from the back of the hotel to the parking deck. Davidson stated that current annual property tax revenues for this parcel are approximately $11,000 and that the projected annual property taxes will be approximately $580,000. The TIF increment generated would be approximately $400,000 from the hotel and would be the primary source of funds for gap financing. Davidson noted the project meets three of the Council's priorities: a) to create a strong urban core, b) to engage in strategic economic activities, and c) to establish a solid financial foundation. He then elaborated on the benefits of the project and how it meets goals set forth by the Council in their strategic planning. To summarize, Davidson noted that the proposal is for $8.8 million in financial assistance on a $33 million project for a Hilton Garden Inn Hotel. This will be a 144- room hotel that meets the form based code standards of Riverfront Crossings. There will be 150 jobs created, including 81 full-time and 69 part-time. With the University's projects in the immediate area, Davidson suggested this will be a good fit for the site. Payne stated that she would like to better understand the use of the TIF increment from the adjacent property. Davidson stated a portion of the new UI Art Museum project is likely to be taxable and that the motivation to use increment generated by that parcel (also owned by the same developer) is to reduce the timeframe to reach the $8.8 million total. Digmann noted that the museum will enter into a long-term lease, and how much tax the project will generate is still unknown at this point. Davidson added that if nothing were to happen on the Art Museum site, the City would bear no additional risk, but it would take longer to reach the total. Hayek asked about the implications of committing TIF from the Art Museum parcel and whether it would preclude providing assistance for it or any other development on the lot. Davidson responded that the proposal is for 50% of the increment, leaving the remaining 50% available for other projects. Hayek also asked about hotel/motel tax, and Davidson noted that it is also for just 50% of the hotel tax generated from the project only. He noted that the remaining 50% of this tax, however, would be distributed to the CVB, Police, and Parks in the same formula that all Iowa City hotel taxes are. Staff noted that the CVB is aware of and agreeable to this arrangement. Mims then asked about Kinseth's prior developments, noting the list in their packet. She asked if they have received TIF or other financing from these entities. Bruce Kinseth responded that in Bettendorr they are currently building a Hilton Garden Inn and have a package with the City of Bettendorf. In Mason City they also have a project for which they are receiving public financial assistance, adding there are other projects with public financing in other cities. Mims asked how the others compare, percentage -wise and Mr. Kinseth stated that most are smaller, because they are also for smaller, five -story hotels. Payne asked why another potential hotel project for downtown is likely not going to request any financial assistance and what the difference is. Davidson stated that the major difference is between the scale of the projects. Another is the access to financial partnerships afforded to the two national scale student -housing developers. Markus EDC January 12, 2015 p. 3 PRELIMINARY added that another difference is that one is a publicly owned site and two are privately owned sites, also a factor in the equation. Digmann noted that the $8.8 million amount is more equivalent to $6 million in net present value due to the time value of money. Hayek said his questions are about the exploitation of the possibilities of the adjacent site, and the diversion of the hotel/motel tax. He added that he wanted to make sure that the CVB was okay with this arrangement. Members continued to discuss the proposed request and the details of the agreement. Mims asked if the City shouldn't put a time limit on how long they would use the increment from the adjacent property. She added that if development does not occur, neither does an increment, and she questioned how long the City would want to extend this period. Davidson stated that as proposed right now, the dollar figure to fill the gap is $8.8 million and that increment can be attained from the hotel alone over a longer period, or, if other parcels owned by the developer are included and developed, a shorter period of time. Members noted this and continued to discuss concern over how long the TIF period would run if the Art Museum project does not occur in a timely fashion. Hayek asked why they should restrict themselves to 50% of the hotel/motel tax. He suggested they leave some flexibility in case the museum project does not proceed as hoped. Payne moved to recommend approval of the request from Kinseth Hospitality Company for $8.8 million in TIF financing to the full City Council. Hayek seconded the motion. The motion carried 3-0. Davidson noted that Charlie Graves and Joe Clark are present for this proposal, a $40 million multi-family/student housing project at 316 Madison Street. He shared an image of the proposed 15-story building on a lot that was formerly a car repair business. Davidson commented that the higher level amenities in this building are intended to attract the young professional and student market seeking higher quality housing. He said the developer is on a very tight schedule to be ready for fall 2016 occupancy. They would like to `move dirt" in February, if everything goes through as planned. Davidson stated that Members should be familiar with this project because Council recently considered the height bonus provisions. Five additional stories were granted for being a quality student housing building, and two were granted more for environmental design equivalence to LEER gold. Davidson stated that the developers have indicated that without financial assistance they will be unable to continue, as this is to be a steel frame, 100+ year building. He added that this has been verified through the financial analysis, which shows a gap of $4.45 million on the project. Without financial assistance for the larger project, the developer has stated they would construct a five -story building here instead. Davidson then shared a financial model that Ford created, further explaining the project's financial aspects and the difference between future property taxes generated by a 15 story vs. a 5 story EDC January 12, 2015 p. 4 PRELIMINARY building. The current property tax generation on this site is about $7,000. Property taxes generated by a 5 story building would be around $100,000. The 15-story building would generate upwards of $500,000 per year. He then explained the financial package that staff and the developer have worked on. Davidson explained the unique concept, stating that the developers would agree to a partial TIF rebate. In the arrangement, the amount of property taxes generated by a typical 5 story student housing project would flow straight to the City, County and Schools, along with the protected debt levy that is captured on any TIF project. The difference between the full taxes on the 15 story building, less those generated by a typical 5 story building, less the protected debt levy that flows to the taxing entities, would be rebated to the developer. After continued discussion about the partial rebate, the focus of the discussion became the question of should we ultimately limit the City to the property tax generated by a five - story building with no assistance, or with the proposed financial assistance, gain a much larger building with a much larger increase in property tax revenue. Payne noted that use of the chart was extremely helpful in understanding this proposal. Davidson then returned to the project details, noting that it is slated to be 154 furnished apartments, consisting of 53 studios, 16 one -bedrooms, 77 two -bedrooms, and eight three -bedroom units. Some of the additional amenities, according to Davidson, will include an outdoor rooftop patio, a sun deck, a large lobby that will be staffed 24/7, study lounges, computer labs, and a movie/gaming room. Developers will achieve the equivalent of LEED gold status on this project. With regards to the Council's strategic plan, Davidson stated that healthy neighborhoods, strong urban core, and solid financial foundation goals are all met with this project. He added that the projected property tax revenue is around $400,000 in year one, compared to the $7,000 currently. Finally, Davidson noted the developer equity of $10.6 million, bank loans of $25 million, and then the TIF request of $4.45 million. Davidson stated that one thing that has occurred since staff began developing this proposal is the discussion last week by Council on affordable housing. He noted that in developing this project proposal, there was no mention of affordable housing. Davidson further explained why, adding that they have since engaged the developer in discussions about affordable housing. At this point he turned the conversation over to Joe Clark. Clark stated that due to the discussion regarding affordable housing, the developers have decided to be proactive and have included five units meeting affordability requirements in the project. Five units are set up to meet the requirements of affordable housing; however, to meet the Council's discussed 10%, they would have to come up with 11 more units in this project. Clark stated that what they are proposing is paying a fee in lieu of providing those 11 units. This fee could then be used in a housing trust fund to help support affordable housing in another area of downtown, for example. Members briefly discussed how this fee could be set aside for units elsewhere. Members then discussed this project and other projects in the downtown area, and the financial requests they are making. The height cost differences, as well as steel versus wood construction, were mentioned as major factors in cost and longevity. Land costs were also noted, with Davidson stating that staff has been paying attention to this in the Riverfront Crossings' area is consistent with this. Members continued to ask questions of Davidson regarding this project. Mims asked if there is some stipulation in these agreements regarding LEED certifications and whether or not the developers are EDC January 12, 2015 p. 5 PRELIMINARY actually achieving the certification. She questioned how this could potentially be tied to any of the TIF money. Dilkes stated this is negotiated in each agreement. Markus added that there are other reviews that can be conducted, but that there would need to be a verifiable way to certify the various levels. Hayek noted that he will support the request, but that he does so reluctantly. He stated that it has to do with the type of project — student housing — that gives him hesitation. He added that one way to justify this, however, is in what they are trying to achieve in the Riverfront Crossings' area and in lessening the pressure on other neighborhoods with student housing. Payne stated that she struggled with this request, as well, but that the difference between a five -story and a 12-story building makes sense. Clark responded to Member concerns, noting that you can only raise the rents so high before people stop coming to your building. He then pointed out that they have actually reduced the amount of rebate they are requesting. Payne moved to approve the request from 316 Madison, LLC, for $4.45 million in TIF financing, as a recommendation to the full City Council. Hayek seconded the motion. The motion carried 3-0. STAFF UPDATES: None. COMMITTEE TIME: None. OTHER BUSINESS: None. ADJOURNMENT: Payne moved to adjourn the meeting at 1:02 P.M. Hayek seconded the motion. Motion carried 3-0. EDC January 12, 2015 p. 6 PRELIMINARY Council Economic Development Committee ATTENDANCE RECORD 2014 - 2015 TERM o 0 0 o NAME EXP. a w n� J j � A A A A A Cn Michelle 01/02/16 X X X X X X Payne Matt 01/02/16 X X X X X X Hayek Susan 01102/16 X X X X X X Mims Key: X = Present O = Absent O/E = Absent/Excused I r i dnl�r � CITY OF IOVdA CITY UNESCO CITY OF LITERATURE CITY OF IOWA CITY IVIEM0RANDUM Date: March 26, 2015 To: City Council Economic Development Committee From: Wendy Ford, Economic Development Coordinator Re: Agenda item #3 — Budget Line items report Introduction There are two line items in the Economic Development Division's budget we like to review with you periodically — the Community Development Assistance line and the Economic Development Assistance line. History The Community Development Assistance line is budgeted each year with expenses that have been approved in prior fiscal years and again when the budget is ratified. You will note that we have expended the full appropriation of $393,581 for FY15 and that the budget for FY16 is set for $411,800. The Economic Development Assistance line, sometimes referred to as the Economic Development Opportunity fund, has been funded with $100,000 per year for the last several years. It is typically used for economic development opportunities that arise during the fiscal year, which in FY15, have included expenses for the Building Change Fagade Improvement program, incentives for the relocation of MetaCommunications downtown, a portion of the expenses for the recently completed Targeted Retail Study and other economic development opportunities. The City Manager was granted administrative authority to make disbursements up to $50,000 from the Economic Development Assistance funds in 2011 (resolution 11-66). Common practice has been to run requests for these funds through the Economic Development Committee for approval. Should the City Manager exercise administrative authority to approve disbursements from the fund, the protocol is to report on those expenses at the proceeding Economic Development Committee meeting. Discussion You will note that the fund balance in the FY15 Economic Development Assistance line is $132,866. It is from this balance that the two recommendations before you today totaling $16,250, could be funded. It is also worth noting that we expect to receive requests for around $92,000 from four more proposals yet this fiscal year. If you have any questions about this report, please feel free to contact me. Economic Development Funds updated 3/25/2015 2015 YTD 2016 Budget 2017 Projected Funding Source Budget J=al 4480 Commuplity evolbpmant Assistance. $35k5881 $393 561�,.gAO 4 Budget Amendment $35,000 Englert Civic Theatre $70,000 $70,0001 $70,000 la City/Coralville CVB (hotel/motel taxes 1 Qtr of 4) $208,581 $75,586 $241,762 Iowa City UNESCO City of Lit+ book festival $60,000 $60,000 $60,000 Riverside Theatre, 3rd of 3 yrs in '15 $20,000 $20,000 Film Scene $35,000 $35,000 $25,000 $15,000 Food Enterprise Center feasibility study $7,500 FYTota1 $260,586 $404,262 FY Budget Re_mcinder $132,995 $7,538 less remaining CVB funding $132,995 unspent $0 A`0 ECQtttt)`liiCllBvpiaplrient7�Stt�e CarryOver from year prior $?00,�1 � $192,� $ $92,826 Mission Creek Festival, 2014 $12,500 carried over to FY25 Yacht club/!TK holdings (Building Change) $12,930 $5,699 carried over to FY25 Busy Coworking, remaining funding to request $1,296, accrued to FY14 MetaCommunications buildout $58,000'i carried over to FY25 MetaCommunications parking agreement $31,680, $30,096 $30,096 $30,096 carried over to FY15 /CDD Targeted Retail consultant, per City Manager $10,000. $10,000 Expo Cad software; Summer of the Arts $1,665 FYTotaIspent $59,960 $30,096 FY Budget Remainder FY end requested carryover $132,866 $69,904 unspent $132,866 $69,904 S:\PCD\ECODEV\Economic Development Assistance actual v budget history (3).xlsx ^r � �i CITY OF IOWA CITY UNESCO CITY OF LITERATURE CITY OF IOWA CITY MEMORANDUM Date: March 26, 2015 To: Economic Development Committee From: Wendy Ford, Economic Development Coordinator Re: Agenda item #4 - Request from EDC for annual funding Introduction: The Entrepreneurial Development Center, Inc., widely known as EDC was founded 11 years ago by Curt Nelson. Their mission is to improve the economic vitality of the region through the creation and growth of high -impact, scalable entrepreneurial business. While they are based in Cedar Rapids, they serve businesses on both ends of the Creative Corridor and list the CoLab in Riverfront Crossings as their Iowa City office. They are requesting public support from the City of Iowa City in the amount of $25,000 annually. History/Background: The EDC's function is to connect entrepreneurs with the full range of business expertise to enable high potential businesses to grow and thrive. Nelson has developed a recipe for business success (and has written a book by the same name) that EDC uses in guiding business growth. In the recipe, there are 6 ingredients: marketing, development, sales, operations, information technology and finance. EDC's approach is to ensure that clients have the right amount of each ingredient. In their work with clients, they gain an understanding of the needs and then provide the expertise or find it by building strategic networks for their clients. They are also well connected to financial resources for their clients. Discussion: EDC first approached the City of Iowa City in 2007 with a request for $15,000. At that time, the City Council Economic Development Committee voted to defer support and to re-examine the request later in 2008, pending more information. In 2009, the committee received a $20,000 request from EDC, but voted to table the consideration until they could learn if a newly established, small funding commitment from ICAD was working as planned. In the ensuing five -plus years, EDC has continued to provide services to an ever-growing entrepreneurial community. [CAD has maintained and increased their funding of EDC and Mark Nolte confirms that EDC is doing a lot more work in our area and that they have offered solid guidance to some up and coming Iowa City businesses. One of their clients, Pear Deck, an Iowa City -based education software company was just awarded a $150,000 prize in the "Rise of the Rest" pitch competition at SXSW (South by South West) in Austin, TX last week. The City of Cedar Rapids has maintained its funding of $100,000 annually, the City of North Liberty is investing $5,000 per year, Hiawatha is providing $11,500 annually, and the U of I and the John Pappajohn Entrepreneurial Center are committed to $20,000 each, per year. Additionally, the UI Vice President for Research Office engages EDC on a case by case basis March 26, 2015 Page 2 for specific work. EDC staff has indicated that the City of Coralville will be a new funder this year, but they have not yet committed to a specific amount. Entrepreneurship continues to grow in the U.S. and cities that welcome entrepreneurs stand to gain new employers, new employees and the economic benefits they bring. Iowa City has spent the last several years building a community that fosters entrepreneurs. We assisted in getting the CoLab off the ground and that has proven to have incubated some very successful highly scalable companies. We have provided a number of small entrepreneurs low -to -no interest loans; we have sponsored Entrefest, the Iowa City -based convention geared to the entrepreneurial community, and we are in the early stages of securing new space for the CoLab in the Court Linn development. It is clear that it takes a lot of effort from a lot of organizations -- ICAD, the UI Small Business Development Center, the City, the Chamber — and organizations such as EDC, Inc. to provide the support necessary to a burgeoning entrepreneurial community. Recommendation: Because there is one quarter of the City's 2015 fiscal year remaining, staff recommends funding one quarter of the requested amount, or $6,250, for the remainder of FY15 and funding the full request of $25,000 from the Economic Development Assistance line in FY16. In addition, we recommend budgeting a "placeholder" for $25,000 in the upcoming FY17 budget for Community Development Assistance. Staff recommends your recommendation of this request to the City Council. February 24, 2015 City Council Economic Development Committee c/o Wendy Ford City of Iowa City 410 E. Washington Street Iowa City, IA 52240 Dear Wendy! Committee, For the past 11 years, EDC has been actively engaged in the creation and growth of high - impact businesses In our Creative Corridor, Over this time the businesses supported by EDC have created over $1.5 billion In regional economic development impact. I have attached our 2014 Stakeholder Report, showing 2014 as well as program -to -date metrics. Included below is a report outlining the direct impact for Iowa City, including example businesses supported. EuC Client Impact Iowa City Since its inception, EDC has invested an increasing amount of its resources in Iowa City To date EDC has spent over 12,500 hours working with Iowa City -based entrepreneurs Over EDC's first 11 years, we have provided support to 52 start-up; early -stage and later -stage businesses in Iowa City who, in turn, have contributed over $77 million in direct City impact. Start-ups you would recognize include: c Pear Deck Radiology Protocols • Atlas Ergonomics Early -stage businesses you would recognize Include: • Cardiostrong • Cyber Anatomy • Foundations in Learning Later -stage businesses you would recognize include: . Lienne Designs a Luerkens Laboratories a Ouadro Vodka • Breads from Anna • Tutor Universe Collectively the Iowa City businesses supported created the following economic Impact: Capital raised and deployed $8,916.912 Increased business revenue $44,005,882 New wages paid $24,395,193 New jobs created 107 New businesses started 10 p: 319.369.4955 a f: 319.832.1481 - - - — 230 Second St. SE, Suite 212 a Cedar Rapids, IA 52401 316 E. Court Street a Iowa City, IA 52240 EDC's engagement in Johnson County and specifically Iowa City has increased year over year to the point in 2014 when over 50% of EDC resources were invested in Iowa City businesses. EDC is an active partner of the University of Iowa, working or. the creation of businesses from University technology development. EDC is also actively involved with JP —EC and the Venture School toward this same goal. EDC is an active partner of ;CAD, helping with En— recruitment activities when applicable and EDC staff use the Iowa City i-nl-n; facility to neat wifE, loca! business clients. (You will note the Iowa City address on all of our literature and business correspondence.) EDC is a 501c6 not -for -profit organization and the funds needed to support operations come from over 100 public and private supporters. Cur largest supporters include the City of Cedar Rapids at $100,000 / year and the State of Iowa at the same amount. EDC's budget is ust under $1 M and current,y a disproportionate small share of that funding comes from supporters in Johnson County. It is very important to the growing number of entrepreneurs in Iowa City that EDC be able to maintain or grow the amount of support provided, and to that end EDC is requesting support from the City of Iowa City in the amount of $25,000 for calendar 2015 and the same amount year over year going forward. In return, EDC will provide reguiar updates as requested to the Iowa City City Council and / or Economic Development Committee outlining specific Iowa City business support and return. I would be happy to answer questions or provide a formal presentation at your convenience. Thank you very much for your consideration of support. Since —� Y Curt 'Nelson "We bunt our last business and sold it — thinking we did not need the services of EDC. After looking deeper into what EDC provides, when we started our new business last year we did not make that mistake again. The support we have received from the team at EDC has been invaluabie." Ms. Michal Eynon - Lynch, Co-founder, Pear Dock mi edc Accelerating Iowa Business EDC's Mission: To provide economic growth ofhighimpac the Iowabusineson andexpansion E®C 2014 Stakeholder Report of high -impact Iowa businesses. As we wrap up EDC's 11th (and my seventh) year working with Iowa entrepreneurs, our mission remains clear: To improve the economic vitality of our region through the creation and growth of high -impact, scalable entrepreneurial enterprise. We continue to grow our capabilities while broadening our reach and impact on the region's entrepreneurial ecosystem. As national and local interest in entrepreneurialism increases, we see more prospective entrepreneurs coming through our door seeking support, with 2014 marking the busiest year in EDC history. We are happy to serve a diversified group of entrepreneurs, with strong representation from students, women and minority entrepreneurs. New organizations recently launched in our community to cultivate start-up businesses, such as the University of Iowa Venture School, 1 Million Cups, Ascent and the Iowa Start Up Accelerator, have helped to encourage new entrepreneurs. Graduates / participants in these programs are then seeking our assistance as they navigate from start-up idea to scalable businesses. We welcome these new individuals and organizations and work closely to support their activities, and the entrepreneurs involved. Our unique model of providing hands-on support through all the stages of a business' life, coupled with education and networking, is proving increasingly valuable in this burgeoning ecosystem. If I have learned anything in working with entrepreneurs, it is that they apparently share a gene which leads them from idea to action in seconds! And without this bias for action, bundled within a high tolerance for risk, excellent creative problem -solving skills, and positive belief in what is possible, we would have far fewer entrepreneurial businesses in our state. Because many of these entrepreneurs are starting their first business without business training or experience, our task at EDC is to provide timely advice and guidance, through proven methodologies, at all points in the growth cycle. We are grateful to our supporters, old and new, who have given of their time and resources to enable EDC to extend its network of support. On behalf of the entire EDC team, we thank each and every contributor, individuals and organizations alike, for your contribution to our area's continued entrepreneurial and economic vitality. Sincerely, ?JulioeZietinski Vice President of Marketing and Strategy 2014 EDC BOARD Charles Rohde, President, King's Material (Chair) ]on Dusek, President & CEO, Armstrong Development (Past Chair) Mary Quass, President Et CEO, NRG Media LLC Doug Kopp, Vice President of Environmental Affairs, Albant Energy Larry He0.mg, President Et CEO, Cedar Rapids Bank Et Trust Lance Dunn, Co -Founder, Taxact.corn Kathleen Kleiman, Member, Simmons Pernne Moyer Bergman PLC Bruce Lehrman, CEO, InvoLta William McCartan, Attorney, Bradley & Riley PC Dick Schwab, Owner, Iowa Woodworks David Rusch, President fr CEO, CRST International Steve Schoenauer, Managing Directoi, McGladrey, LLP Terry SUlhvan, CFO Er Assistant Vice President, CIPCO Tim Kintner, Executive Vice President of Consumer, Private and Regional Banking Markets, Bankers Trust Iris Gulick, President, Entrepreneurial Services Group LLC David Hensley, Associate VP for Economic Development and ]PEC Executive Director and Clinical Professor, University of Iowa EDC engaged with 85 area businesses this past year; helping with expansion/ creation funding, strategic direction, marketing planning and execution and overall business growth. Active Clients EDC currently supports thirty-four (34) clients at the following stages: • Sixteen (16) of the clients are weLL- established area businesses seeking growth or restructuring assistance. Twelve (12) of the clients are early - stage businesses seeking growth and capital assistance. • Six (6) of the clients are start-ups or pre -revenue businesses seeking assistance with market research/ validation, business planning and capital raising. 0• well -Established Area Businesses Early -Stage Businesses Stan -ups or Pre -Revenue Businesses Client Recognition Several EDC client companies were recognized in 2014 for their impact and growth: Three (3) clients made Inc. Magazine's 500/5000 list of fastest growing private companies: • InvoLta (#2437) • Clickstop (#3254) • Ready Wireless(#4375) As previously reported in the Mid -Year Report, four (4) EDC clients were recognized at the Corridor Business Journal's Fastest Growing Companies breakfast: • #8lnvotta • #15 Ready Wireless • #161nteconnex " #23 Cedar Ridge Vineyards "in 2014. after careful consideration, we undertook the development of a new product. Throughout this process, we have used EDC as a sounding board to develop a roll -out plan and go -to -market strategy. I also appreciate the teams feedback and guidance on various marketing tactics. It is invaluable to have experienced advisors on call to help as our company grows and navigates new opportunities." Greg Edwards, Founder and CEO, WatchPoint Data Client Funding EDC continues to assist clients in securing critical funding needed for the growth of their businesses. In 2014, a total of $67M was secured in equity, debt and federalf state/regional programs. EDC has a proven track record for assisting clients with funding applications, securing 90% of the state and regional funds applied for in 2014. EDC assisted 8 clients who secured funding from the following programs: IEDA Demonstration Fund ..................... ---- ................. ............. --- ........ $100,000 IEDAInnovation, Acceleration, Launch O PropeL................................... $225,000 ECICOG Revolving Loan Fund..................................................................... $806,250 John Pappajohn Business Plan Competition.............................................$25,000 IEDA Domestic Trade Show Assistance ............ _........................................... $4,000 Total........................................................................................... $1,160,250 EDC Client Impact The table below provides information on the economic impact of EDC's clients for 2014 as well as results since the program's launch in 2003. r j Annual Program to Date Impact (2014) (2003-2014) Mum of businesses supported 85 672 New revenue generated $176M $914M Capital. raised $67M $260M Net direct jobs added 44 -1,550 Average wage $48k $48k New payroll created $40M $305M Total impact $283M $1.479B {edc Accelerating Iowa Business „The last year with them has been the greatest growth for us as a small family business. We all feel more confident to handle r e rapid growth working with EDC. We are all convinced that EDC really cares about our company and us personally. We not only highly respect their expertise, but each of them as caring people. They know answers to our problems, before we even can identify . what the problem is. And their solutions are logical and user 1 friendly for us as a small company. The EDC is very easy to deal with. They do not talk down to us, they listen intently." Freda Sojka, Founder and CEO, Simply Soothing "The EDC has been a valuable resource to my team and I as we were mapping out our expansion strategy and building our sales. We have also relied on the EDC time and again for help navigating the various funding options in the state and beyond. The EDC is a critical part of growing the local economy and entrepreneurial ecosystem. They have real -world business experience to provide guidance and resources to help entrepreneurs succeed." Bruce Lehrman, CEO, invoLta "Working with EDC has been instrumental in setting up our business for growth in 2015. After working with their staff on our business plan and financial processes, we have a much clearer path to success. We feet very fortunate to work vAth this team." Beth Scott, Co -Founder, AD RescueWear "The value that top tier business schools provide to the aspiring, or serial entrepreneur, pales in comparison to that of the team at the EDC. From introductions into private and public funding sources to product marketing strategy, the EDC team has the colieLdve experience to see successful companies from inception to scale. PunctiL Health evolved via weekly meetings with Curt and his team from a baseline idea into a venture -backed digital health company based in lovira." Ben Picard, President and COO, Punctil Health "For a scientist, the commercial world is a confusing and ferocious mayhem, EDC staff tame this world and make it a real opportunity. Without EDC my inventions and benefit to the public will stay at ground level, with EDC we will soar into a successful enterprise." Dr. Joe Assoutine, Founder, NanoMedTrix "in 2014, EDC helped Stone Medical with talent and leadership team development, our capital raise and virtually all aspects of our business plan: sales, marketing, operations, and financial The advice from EDC has been very specific and comprehensive which has led to great progress in several key areas. AdditionaLLy, the events sponsored by EDC have been excellent. We plan to continue to work with EDC in 2015 and focus on sales team recruiting and management, operations management and acquisition and exit planning." Benjamin Stone, CEO, Stone Medical Ryan Ries, TranslaCare, with his IF T-Shirt on the Great Wall in China .� -JI 91 At, "The EDC helped us apply for and successfully win a loan from Iowa's IEDA Launch fund. They also helped us prepare for several investor pitches. Finally, they advised us about our business plan and in how to approach potential channel partners. I always know that my pitch is going to get ion times better after I practice for the EDC. Curt and Pete give us clear, honest feedback but at the same time I feel like they truly understand and value our product and company. The result is that I fully trust their advice and feel Like I have a personal cheerleading squad. With our previous company, we never bothered applying to IEDA because the process was so tong and complex. This time, we decided to seek the help of the EDC and during the process, Jane was very attentive, I never worried about meeting deadlines or requirements because 1 knew she was on top of it and would make sure we got everything done." Michat Eynon -Lynch, Co -Founder, Pear Deck ow, eldc Accelerating lowa Business 230 2nd St. SE, Suite 212 319-369-4955 Cedar Rapids, iA 52401 www.edcinc.org 316 E. Court Street Iowa City, {A 52240 to Proud to be port of 0 Iowa's Creative 1 corridor e^�Try,4 . g ,r r rrrf'a� o Innovation EXPO 2015 is an opportunity for Iowa entrepreneurs to hone their pitches, connect with resources and showcase their scaling Iowa businesses. The EXPO provides the largest venue for the business community and interested public to connect with more than 75 Iowa -based companies. Wednesday, r 21st at the To get more information and register, visit http://innovationexpo2Ol5.eventbrite.com ! r L ,,,,.' CITY OF IOWA CITY UNESCO CITY OF LITERATURE CITY OF IOWA CITY MEiVORANDUM Date: March 26, 2015 To: City Council Economic Development Committee From: Wendy Ford, Economic Development Coordinator Re: Agenda item #5 — Request for Sponsorship of Entrefest Introduction Organizers of Entrefest, Iowa's annual business and innovation conference have requested the City increase its support for the event this year with a $10,000 Major Sponsorship. History Entrefest was started in 2008 by a coalition of many organizations including the University of Northern Iowa, who initially hosted the conference in Cedar Falls. The conference is designed to offer entrepreneurs, innovators and businesses new ideas, new contacts and the energy that comes from gathering with like-minded individuals and organizations. Last year, the conference was held in Iowa City for the first time, and attendance doubled, with more than 500 registered attendees. The City of Iowa City was a sponsor at the $2,500 level and benefited from the notoriety that came with playing host and helping to build the landscape for such a productive conference. Historically, the conference has moved from one Iowa town to another, but last year, sentiment was strong that the conference should remain in Iowa City for at least another year or two. The organizers, Iowa City -based Seed Here, are determined to double attendance again, to more than 1,000, by ratcheting up the number of speakers, program tracks and activities. If Entrefest does grow, it will become the largest conference for entrepreneurs in Iowa and will begin to draw attendance from neighboring states. This will work favorably to position Iowa City as a leader in fostering entrepreneurism and innovation for economic development. Discussion A Major Sponsorship at the $10,000 level would afford the City several tangible benefits, such as a prominent presence in conference materials, signage, exhibit booth display areas and at conference general sessions. Additionally, the sponsorship would include 10 Full Access passes to ail conference activities, which we should use to make connections between the entrepreneurial community and City government. Recommendation Staff recommends approving the request for a $10,000 Major Sponsorship of Entrefest. � r � March 25, 2015 Iowa City Economic Development Committee C/O Geoff Fruin 410 East Washington Street Iowa City, Iowa 52240 Dear Economic Development Committee: EntreFEST, Iowa's annual business and innovation conference, started in 2008 with the mission of connecting, equipping, and training entrepreneurs to grow their companies in our state. The statewide event is led by the University of Northern Iowa (UNI) with funding support from a broad coalition of public and private organizations including the Iowa Farm Bureau, Iowa Small Business Administration, Iowa Economic Development Authority, and many others. Last year, with the City of Iowa City's support, the conference was held in downtown Iowa City for the first time. By all accounts, Iowa City's edition of EntreFEST was the largest and most successful in history with attendance doubling to over 500 people. This growth was due in large part to the unique setting of the Ped Mall. With access to multiple venues and amenities in close proximity, our production team, Iowa City - based Seed Here Studio, was able to expand the number of speakers, content tracks, and activities as well as lodging for attendees. Traditionally, EntreFEST would move to a new city in the state each year. However, we are breaking that tradition and bringing the conference back to downtown Iowa City on May 20-22, 2015, with intentions to stay for 2016 and beyond. EntreFEST is returning to Iowa City to test the hypothesis that we can grow the conference to 1000 attendees if we stay in the Ped Mall, expand our outreach, and invest in more nationally -known speakers. If EntreFEST does grow, it will be the largest conference for entrepreneurs in the state. At that point, we expect it to draw attendees from adjacent states, positioning Iowa as a national leader in entrepreneurship and Iowa City as the annual destination for the Midwest innovation community. The University of Iowa and Iowa State University have expanded their support to join UNI as the presenting partners for EntreFEST 2015 to help the event significantly grow. Seed Here Studio has been contracted to manage all event design, production, sponsorship and outreach for the third year. Joining the coalition as sponsors this year are Kirkwood Community College, Rockwell Collins, MidAmerican Energy, McGladrey, MiclWestOne Bank, the Iowa Bankers Association, Alliant Energy, and others. To help us realize the unique opportunity to make EntreFEST the leading entrepreneurship conference in the Midwest and Iowa City its longterm home, we ask the City of Iowa City continue and expand its support for the program by sponsoring at the $10,000 Major Sponsor level for the 2015 event. As a major sponsor, the City of Iowa City would be recognized in the following ways: . Recognition at plenary sessions . Custom 'Surprise & Delight' moment . Exhibitor Booth in featured location . Linked logo prominent on the EntreFESTcom website, mobile app, and printed program . Sponsorship recognition in promotional emails . Social media acknowledgement on Twitter and Facebook . Logo included on way finding signage throughout the conference . 10 Full -Access Conference Passes Attached here are some of the promotional materials for this year's event. We believe they capture the excitement we share for coming back to downtown Iowa City for EntreFEST 2015. We look forward to our discussion on the 30th. If you are interested in exploring before then, much of our information is at www.entrefest.com and an exploration of EntreFEST's potential economic impact is detailed at www.entrefest.com/state-impact. Sincerely, Amanda West Director, EntreFEST 2015 CEO, Seed Here Studio KA .A The Midwest's large founders, corporat Is kthcr•ing of e innovators, ana t04hni v &&" N _. F E t- - me, Lfi THE MEETINOWOF io INN 'FS MOST IVE MINI in business, technology, creativ and community bui, 1-a Meet mentors, k designed fo �., 11 r� 1 r. i R ' 1 -7,,tl Nt vn zng, and learn about programs r entrepreneurs like you. F E S T R� `L r h4wqr + I A ONr TOP=SHOP FOR BUSINESS SUPPORT Get one-on-one help ,with your toughest business challeiages. t \ A ?FEST k� JQA I OWNERS TRACK CHERI CpSpRO'/EFVp�OER OF rVE TANWORiOiRd%CHrSE 0 3 All Business C Register Now & Save $501 Wa Java Iowa's staf997p5 and W814 to help you swcoWP Ylaw tSU3 BtT�iP YtylXl( Y3iL'�Wio, EntreFEST is far Forunders. Announcing a dedicated track for high -growth startup teams covering sales, investments, pitching, co-founders, accelerators, lean, agile, team building, business models and more. The 2015 Founders Track presented by Saftl ayer includes, • The Art of the Investor Pitch with Adam Koppes • How to Not K71t Your Business Penner & Kamft Stevenson • Ui's Venture school Prsview with Kurt Heiar • Business Model Generation with Wads Steenhook • sest et Irfrerors & lrveateee. a iscusakon m2dsrated by Josh Cramer • sales siratsq ss iv, Sta:� ��upe H -lt'? • Geit q & Keeping' anture Gapilso : ffti 1 r p rpj27,w�74L • The Loan &jaetupMachine ae-4"z-re T,ea ;,r g*era • Investor, Mentor, and Accelerator Speed Da*V with EMERGE and the Global Accelerator Network ku SOFTLAYEW an IBM Company Kate Dram Sr. Director of Chicago Outreach at in _ Curtis Nelson CEO/President at �7711°�ra �'1�1'f l.l,clud Eynon� Lynch Co -Founder at Dai r Q4K"I Getting Team Crtlture Rigid ttom theSaglning Fk Malay Community Development Manager at Free nd insxpens)ve) Term Tools for ;Startups Networ Is an Accelerator Right For You? Moole Forsythe Chief Agility Officer at Scrum for Sfartups Ali Jeff ai Milt! CC.Fou: lder & CFO at Invoke How to Price Your Company to frrvestors More Speakers + Sessional (and this is just a sample of -who you'll most in the € wars Track this year) Justin Schoen President at eComeov Easy and Free Ways to Gain "Ins visibility and Series Sarah Pearson Senior Counsel at Creative Commons Why Content Sharing Is arsef for Business + How To Do ft Well Vsnturse in SaCeai EntrspreneureNp i r Jayne A►tinetrong Director at IOMSSA SRA Loans: Haar to Fund Your Business for Growth Creole Slstiesa kernel Mon 2-6.2015 B I ECONOMM I.IEVELOPi EN'r t CR expands several project incentives City also signs retail market analysis contract with Buxton Co. ey aeve Oawllie da✓sfiaxxmdmGr�resxavn CEDAR RAIDS -A catalog of standard economic development meretives that the city of Cedar Rapids put in place teat fume sceroa to bl workbag well - se wall that the city last week expended it to nine categories. The city', standard incentives for qual. ified projtas Fan inns tutu main groupsT housing and run.hooem; fin• erry has standardized and published the inom- tivea in an affect to make it dear to de- velopers that they won': have to bag& Imow somebody or push a secret buuon to get. dtyhelp, Non -housing pnupci, get a 1"ter, 44 percen IA. eaeeplum, a 10-year 50 percent tax nimbvrement, or the latter s fi m'.,ll equi"Itua in different more, enema. Hoeing pmtat. get a Meet, 3d0 percent tax eaempnbn oil 75 percent or more it the hurici am duticeted for hntivug or tax reimbunsemee, or its fi- panclal equivalrnc Two row couqu.nes wens Adideu to the coating INA of .serer tree We bras>w) at the !'eh 2.5 meeting of the tinder Rapirh CSry, (ounul. 'Io qualify unde, the nmv 'Green ik"Iding' category, a protect v required to haw: Lfatt) oeMncation at the bpanza level of above. This new motel ow category can be need as a stamlalmu incmitive, rr layered onto an existing in riamwe project for non-limani t pmiects, adding an additional 10-year, 25 peno0t reimbursement, Theccond new category, local Match, simply formalfzw An emoting prume of 1. Core dlsHkt reinvesbnent projects in downtown, Kingston Village, the Ellis Boulevard area, Czech Vftg% New Bohemia, Uptown and ins MedQuarter 2. Hlghquollry jobla - Prowhi that Virg 10 or more yobs diat meet the stata's nigh quality jobs wage thremold 3. Large4te r,"aster Plans - Proj-k of 15 or Two acres that are not sdelg residential, with an approved site On and design guidelines. 4. Hebfic FreSOMAN - Pro a is listed on the Ndorra: Reglsw of Historic placea bl for a hscrig on the rsgisNr or dasigrated as a load lanarrrark with arrow dwe�riMlation of no adverse arlec! Man ttorrelopmar4 5. BrownRe"Taylield projects that utilize vacant or stightly uncerwi lined properties involving demolition and site prep costs. S. Clyhmrt4a! .:Ntrno51 neat - Projects of at lees! 10 g00 Square Meet slyctl as big -box 50tei of teW e9ipe With a;clu rfii renovation Coat of 50 percent of N currerrr taxabta value, tub sustainanie feature. 7. Local Hatch - Any project receiving state incentives contingent on a local match. 8, f]een fdulldb - A ryp wd a m r'vurn LEED t� Rue p7 IdFx ka S. Cannot" Benefit - Pro!acts that meai adertwnstrated ow alid public purpose won a king -term community berretit and flrt"al viability. such as a headquaAet's feebly, fetal bustness expansion- or en ergem need, providing a total match for any project that needs it n, qualify for state fournug ,ucording to humi Alnmarxi, the ri y's remomr Ie Alrrpmeru Casten. Ms AlutuArwd safer standard expter- tnms Apple in all nine categories. They arc netghbuchwel and cpmmmuly ,rapport, f nanctal leantul ty market fiadmnry, a quality design that cnhaneva the sun- mundmg uea, and the imulnmcmufan up erieneed developmenticam. - ;µ-rsenPvea were part et i new Em. nomlc Development strategic plan in- troduced by Ms. Almoayed, she said the plan is based rn the recommendations of three recent sandy". two by profeasiousi mnstdting firma Angdou Economics and Mainstream Consulting and a third by Ilnrvermy of Iowa graduate students looldng into workforce retention. The beauty of the plan, council am- bers commented, is thud M cover more 12 Atash2-6.20i5 Garkbr bss.sxar� OR COUNDL CCNTWMD FR01t PAGE 5 -t+ais than prevulua plans. Included in the etrau®-an a fond beemes enta- iten elect eepasusion plan, a ret.tl ne.eet- mtm strategy, a branded, o mpnehen a mackeang plan, an mcrcasemslpali busi- n.as rnueTueaaursnip argtpor., the pre• morn of coue distretra in the city, and the env.igthening of relationships with milegx anct untverines. Coordination with partnering ewnomic devdopmem agencies also made the He. City council member, with Kvs ure. lick absent, eased that. .... sup- port for the additions. They also cared to aopnitve a new retail market anutlysls con, his Alme aysd added. Ruder Co. .' ed tited iwti Re- t e Stuugiea LLC, wluch Ind a lower $135,000 prick, but nc"W a lower at. big for compliance retch the city s relec- drn rai[era Council members praised Ma. .V- musyed and City Manager rem Pumemrz for their work on the plan. They seemed eatudally pleased the it tndudas qu n- u1mve pertermam.e indicatom and up. dams from ect rromic development part- mm funded by the city. Council member Ann Ibe mild she has long Advocated for measures of performance by such funded ent ties. Conned member seen oboe, a corn n.crid real mural agent who recently helped the city recruit at the big interna. door Covered u(Shopping Cenrara.hum. said the plan 'kr other people roneidrr- ing the city know we have a vision and a plan' The plan 'ken of Or in a lot of the gaps than were missing ha the rely's e nomic development policy,' said Pat Shey, another cw rzi! • -3 d>t:. Mr. Shey asked rate oY u'v ,ow CR C0t.4i:0. CRPASE 12 ttsatwidl'1'ht Buxton (;a, nf?'nn Worth, Texas, for $150,000, helping bring the plans read uoremonere emphasis dower 1p reality Tite comet is for $50,000 per yteemm Mann 1.2 ,through Feb. la, Z01e. Buxton Co. to one ut the higiveat ag- greganrn in the United Stories or matkct data, attending to Ms Almrayed. Tht one is able to aeatyae consumer demr- graphics and spending, ipduding leak- age' ufai>s¢d;itg outnd<the rommunity, and then align the I"M spetdmg needs with retailer who are expanding in a m glen. Services provided by the comparuy include not only idandfying retail chains that make good tatters for recruiting d- fores, but preperingiccrelitniona M eriel. that highhghtlocal marlmt opportunities, ed quesd.... on the psngram; wjadher deyebimty -quaky have to 'w'c they have a financial need to 'trove :;tome fives, or whether they can simph quality by having a project that fits the ,,%oey. Community Development DireCnr Jennifer Pitt said the city obtain mfoe- madre about how much of a 5nsudal mwsuuem the developer are mak,ng in the pm*L She said the financio.I need of each project is not analyzed but tbv my has sp-d&Aly identified the hrvrakietd project categories as alias :equating ape. CIA] ficuour.l asefstarce. Ms, Platt said the_ city should Irack the marker vends in each mcg"5, hove,,%. m d.tyri"Jne tf the ,weJ fix uuce.wa a.. mein. utter time. Aber, toe the plan sues also offered by toy., a ire, econemh' Jcyelopowm "Air ram ti,at win be mftlrHd, C'on pkrluan of the Nlituva se —I lkwlepouml (:enter of lowa, and Rim itwaa ,d It"kwoud Community College. Ifs. &,,,ka, vice pmst"rit for continuing education. mod the plan bungs additional aseen and re- sources ro aam7 '- 'r'vfcryr tumult m the community.' 0.)