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Home My WebLink About07-18-2006 Council Economic Development Committee AGENDA City of Iowa City City Council Economic Development Committee Tuesday, July 18, 2006 9:00 a.m. City Hall Lobby Conference Room 410 East Washington Street 1. Call to Order 2. Approval of Minutes - June 27, 2006 3. Introduction of and discussion with Wendy Ford, Economic Development Coordinator 4. Committee time 5. Adjournment NEXT MEETING DATE: August 1,2006 MINUTES CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE JUNE 27, 2006 CITY MANAGER CONFERENCE ROOM PRELIMINARY Members Present: Regenia Bailey, Connie Champion, Bob Elliot Members Absent: NONE Staff Present: Karin Franklin, Tracy Hightshoe Others Present: Mark Patton, Nancy Quellhorst, Joe Raso CALL MEETING TO ORDER Chairperson Bailey called the meeting to order at 9:00 AM. APPROVAL OF THE MINUTES FROM MARCH 30. 2006 Motion: Elliot moved to approve the minutes from March 30, 2006 meeting as submitted. Champion seconded the motion. Motion passed 3:0. APPROVAL OF THE MINUTES FROM APRIL 4.2006 Motion: Elliot moved to approve the minutes from April 4, 2006 meeting as submitted. Champion seconded the motion. Motion passed 3:0. Quellhorst asked how the Cedar Rapids incubator is doing financially. Elliot said that he does not believe the incubator is thriving, but is staying afloat. Bailey said they are providing a service and not make a profit. Franklin said that SCORE is doing voluntary management for the incubator. DISCUSSION OF APPLICATION FROM HABITAT FOR HUMANITY RESTORE FOR CDBG ECONOMIC DEVELOPMENT FUNDS Hightshoe said the application is for a retail business that accepts donated surplus, new or gently used construction materials for resale to the general public. Hightshoe said Iowa Valley Habitat for Humanity will operate Restore to divert construction and demolition waste from the landfill, provide a source of materials and funding for Iowa Valley Habitat for Humanity, and provide meaningful volunteer opportunities. Hightshoe said, that the applicant requests a $70,000, 0%, five-year loan with reduced payments for the first 12 months. Hightshoe said the applicant is requesting $35,000 per each FTE created. The project application states two FTES will be created. Hightshoe noted that the Restore manager was already hired and a part time assistant will be hired during the summer and will shift to full time by fall. Franklin said the funding requested is not for salaries. The requested amount will be used for improvements to the building and equipment. Bailey said that she believed that Habitat Restores pass the money on for house building. She noted that the budget presented does not show a profit. Patton said they do not expect to make profit in the first year of service. However, he added that historically after 2 years Restores are not only self supportive but profitable. Patton said that only the Restore in Rochester, Minnesota failed to be profitable after 2 years. Bailey said she is not sure if the project is a good match for economic development funds. She added there are only 2 jobs created. Elliot said the project represents a good for the city, however was surprised as to why it was presented as an economic development application. Economic Development Committee Minutes June 27,2006 Page 2 Franklin said the application was first presented to Housing and Community Development Commission. Hightshoe said that CDBG allocated funds need to meet national objectives. She noted that the application only fit in the job creation, economic development objective. Elliot asked what are typical materials donated and what is the profile of the buyers. Patton said they receive new and lightly used materials, light fixtures, plumbing fixtures, cabinets, appliances, siding and/or tile from remodelers, contractors and wholesalers and retailers. He added that most of the buyers are do-it-yourself individuals. Patton said they also receive donations from surrounding counties. He added they have a pick-up program. Champion said the application is for an incredible program. She noted that she sees it as an economic development tool because it is going to provide affordable housing and remodeling for the community. Bailey said the Restore should look at applying for a Landfill Reserve Grant for the project. Elliot said this is a landfill recycling project. Bailey said that Iowa Recycling from Des Moines have available grants. Elliot asked if the Habitat Foundation itself could support the Restore. Patton said that Habitat has capacity of giving grants once in a while. Consensus of the Committee was that the Restore project was a good project with public benefit but was not appropriate for economic development funding. Bailey indicated she would talk to the City Manager about the possibility of assistance from landfill reserves in the form of a no interest loan. DISCUSSION OF IOWA ADVANTAGE FUND PROPOSAL Franklin said this item was included in the City Council agenda packet. She noted that it gets to the issue of trying to retain young people and graduates in the community. She said that it is up to the committee if they want to advocate such programs which run beyond the city, in partnership with businesses to try to enhance the economic development of the community. Elliot said he would like to have a survey done to determine if graduates want to remain in Iowa City. He added that it might be more rational to look at people who wish to return to Iowa. Champion said that the only way to retain graduates would be by providing jobs to sustain them. Bailey said this could be a statewide program, but is not sure a program like this would affect Iowa City directly. Elliot said they would need to create strong employment opportunities. He noted that many people select location before selecting a job. Quellhorst said that if the jobs exist people exiting the university will stay. Raso said that the major issue is job creation and quality of life. He added that he had never been in a large city where people who previously lived in Iowa City would not want to come back to Iowa City. He noted that they would need jobs to return. Quellhorst said young people want a flexible work opportunity. Elliot said that greater flexibility could be provided by reeducating some administrators. Bailey asked how the employers would move in that direction. Champion said the market will start demanding flexible work opportunities. Raso said this had been a major issue in the past 5 years. DISCUSSION OF WAGE CRITERIA FOR FINANCIAL ASSISTANCE Raso said the recently they had a client that announced they will continue to stay in Champagne Urbana. He said the company, at the start of the project, was not going to invest a great deal in the facility but in wages for employees. He said that. the policies that most cities have are simply 2 Economic Development Committee Minutes June 27, 2006 Page 3 based on the taxable value added to the city. He added that attention could be placed on providing incentives for such companies to come to Iowa City. Franklin said that it is also difficult to compete with other states due to high land costs. Raso said the cost of land was almost double in Iowa City as compared to that offered in Champagne. Bailey said that they should not only look at tax increase benefits for the city but also at wages and benefit packages for employees. Raso said the benefit package is very important. He said the state recommends that any company getting state assistance pay at least 80% of the medical insurance. Elliot said that 80% is pretty good since many companies pay less than that. Raso said the state is doing a statewide benefit survey and will have he results early next year. Bailey said the commission seems to be interested in moving forward with the project and would need to figure how to fund the project. Elliot said that he would like to keep this as guidelines. BUSINESSES WITH TORNADO DAMAGE-UPDATE AND POTENTIAL ASSISTANCE Champion said that several businesses were destroyed by the tornado and through rebuilding they opt to expand and improve their facilities. She said the committee might want to consider a tax break on the increase in property value to help these businesses if the need exists. Quellhorst said that only 4 applications were received for grants offered by the Chamber of Commerce. She added they also had a forum on the website in regard to tornado rebuilding and have not received a lot of notes on that. Champion said that it seems there is no need for such support. COMMITTEE TIME Bailey said if there are any updates in regard to small business mentoring. Hightshoe said that SCORE is a resOUrce that could be used but they are not a strong organization in Johnson County. She added that she discussed this issue with the Small Business Development Center and they are willing to help by providing students but details still need to be discussed since most students have little actual experience. Bailey said that at the corner of 151 Avenue and Muscatine there is an old gas station lot and asked what is going on with that. Franklin said the city had approached the company that owns the lot and received little or no response. She said it is very difficult to get their attention. Bailey said that the corner is really blighted and it would be worth redeveloping it. 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