City Council Worksession

South St. Paul WORKSESSION AGENDA SSP City Hall 125 3rd Avenue North Training room Monday, May 9, 2022 7:00 pm AGENDA: 1. Economic Development Revolving Loan Program 2. Discuss New Proposed Policies – Flexible Work Arrangement & Leave Donation Program 3. City of Inver Grove Heights’ Request for Street Improvement Projects 4. 514 Concord Exchange South – Developer Interest 5. Council Comments & Questions A CITY COUNCIL/EDA WORKSESSION AGENDA REPORT DATE: May 9, 2022 1 DEPARTMENT: ECONOMIC & COMMUNITY DEVELOPMENT Prepared by: Ryan Garcia, Director of Economic & Community Development ADMINISTRATOR: JRH Agenda Item: Economic Development Revolving Loan Policy Desired Outcomes: • Continue discussion on proposed modification to Revolving Loan Policy • If consensus is to accept modification, direct staff to place updated policy on future EDA Agenda Issue/Opportunity: In August 2021, the EDA adopted Resolution 2021 – 18 which authorized the EDA to administer a modified Business and Development Loan Program for certain economic development activities. This program was established in the early 2000s by the HRA and has assisted at least 35 businesses since that time. Despite the program’s ample funding, the program has been underutilized in recent years at least in part due to declining commercially available interest rates, and there is only one active and current loan in the portfolio (Quik-Serv License Center). As discussed at the April 11, 2022 work session, staff is interested in exploring with the EDA ways to modify the structure of the loan program in an effort to boost participation. As the Council will recall, the Program currently allows an applicant to apply for no less than $5,000 nor more than $150,000 in EDA assistance. The April discussion was quite fruitful; members expressed an interest in not only broadening the Program’s reach, but also in avoiding a situation where all of the Program’s funds were tied up in only a very small number of larger loans. Based upon that discussion, Staff is suggesting a change to the Program and Policy that would give the EDA the latitude to extend financing for as little as $1,000 and beyond $150,000 in order to have a broader reach in assisting businesses. Staff is suggesting that between $200,000 - $250,000 from the total loan pool (of approximately $950,000) be designated specifically for what we would consider “micro loans” – loans to businesses for amounts ranging from $1,000 - $15,000. The remainder of the total loan pool would be made available for loans between $15,000 - $150,000 typically, unless a project can demonstrate that it provides exceptional community and economic benefit. “Micro Loans” Staff is suggesting the establishment of a “Micro Loan” program which would be a subcomponent of the Business & Development Loan Program and would be targeted for emerging, small businesses needing relatively a small amount of capital in the early stages of their growth. Staff suggests that for the Micro Loan, the EDA may commonly be the only source of outside financing for a business and may be structured as “non-recourse” loans. As such, the EDA in this case would be accepting perhaps a slightly greater level of exposure and risk when making loans. Staff proposes the following general parameters for the Micro Loan: • Loan amounts $1,000 - $15,000 per business • Interest Rate: Prime + 2.5% (currently WSJ Prime is 4.00%) • Loan repayment terms between 3 to 7 years  • For businesses with 50 or fewer employees • Eligible uses: o Working Capital o Inventory o Machinery/Equipment o Energy upgrades o Façade Improvement o General Operations Loans Exceeding $150,000 for “Catalytic” Projects Currently, the EDA’s Business and Development Loan Program is structured such that an applicant can apply for no more than $150,000 in EDA assistance. In part, this limit was established in an effort to “streamline” the process for applicants by avoiding the more rigorous requirements of Minnesota’s Business Subsidy Policy, which requires any assistance greater than $150,000 to be treated as a business subsidy (subject to a public hearing as well as annual reporting requirements). Staff continues to believe that in most cases, this approach is prudent and makes the program most nimble and attractive. However, we would like for the EDA to consider whether larger loans might be considered in specific, potentially “catalytic” circumstances. Namely, we are suggesting a change that would allow the EDA to extend financing beyond $150,000 if all of the following conditions are met: • The proposed project meets two (2) or more of the Eligible Activities listed in Section IV of the Loan Policy. This section of the policy establishes the following as “Eligible Activities”: o Creation or retention of jobs; or the improvement of jobs as measured by wages o Acquisition of land and buildings o New Construction o Façade and building renovations, including renovations to address code deficiencies o Purchase and installation of machinery and equipment o Clearance, demolition, or removal of structures o Infrastructure improvements necessary to support new or expanding businesses • The proposed project is located within one of the Priority Areas listed in Section VI of the Loan Policy/ This section of the policy identifies the following as “Priority Areas”: o Concord Street between Annapolis Street and Wentworth Avenue o Southview Boulevard and Marie Avenue o Concord Exchange o Concord Street between Dale Place and Linden Avenue • The proposed project involves the renovation and/or reinvestment in a building constructed more than 35 years prior to the date of application; and • Where required by State Law and the City’s Business Subsidy Policy, the proposed project will be subject to an Approved Business Subsidy Agreement. Recommendation: Staff believes that the proposed modification to the Loan Program will expand the reach and impact of the loan program for South St. Paul businesses. A COUNCIL WORKSESSION REPORT DATE: MAY 9, 2022 2 DEPARTMENT: ADMINISTRATION Prepared by: S. Anderson ADMINISTRATOR: JRH AGENDA ITEM: Review and Discuss New Proposed Policies DESIRED MEETING OUTCOMES: Review and discuss two new proposed policies – Flexible Work Arrangement and Leave Donation Program. OVERVIEW: Attached are two new proposed policies for review and discussion. The first policy is a Flexible Work Arrangement policy. Today’s workforce expects more flexibility in the workplace and while not all positions qualify for a flexible work arrangement, staff does recognize that having a flexible work arrangement policy in place can help organizational employee retention efforts for those positions that can have a work schedule that differs from the normal 8:00-4:30 schedule. The attached draft policy provides a variety of flexible work options including flextime, a compressed workweek, and teleworking arrangements. In addition to flexible work arrangements, some cities also have summer hours between Memorial Day and Labor Day. With summer hours, City Hall is typically closed on Friday or closed at noon on Friday. This also allows for the possibility of extended City Hall hours Monday-Thursday. The second policy is a Leave Donation Program. This policy would allow employees to donate a small portion of their sick or vacation leave to an employee who is absent for a prolonged period due to a serious illness and who have exhausted their benefit leave banks. This program is intended for those unexpected events and not for injuries or illnesses that may be covered under worker’s compensation. City of South St. Paul Policy ____ FLEXIBLE WORK ARRANGEMENT SCOPE Full-time employees may be considered for a flexible work arrangement, depending on their job duties, departmental needs, and union contract language. PURPOSE The City of South St. Paul supports workplace flexibility to promote a highly productive work environment and recognizes that flexible work arrangements can help organizational employee retention efforts. The City also recognizes that flexible work arrangements are an important part of modern work culture. Such arrangements offer an alternative approach to completing work through non-traditional work hours and worksites. This policy establishes the guidelines for flexible work arrangements to situations that fall outside of the typical City work schedule and last longer than two months. These arrangements must meet the needs of the City and the responsibilities of the position the employee holds. While not all positions will be suitable for flexible work arrangements, requests will be reviewed on a case-by-case basis taking into account the departmental needs and the employee’s ability to maintain a high level of service. A flexible work arrangement is a business and workplace strategy, not an employee benefit or employee right. FLEXIBLE WORK OPTIONS Flextime: Agreed-upon starting and ending times that differ from the standard schedule for the department, division, or work group. Flextime does not reduce the total number of hours worked in a given workweek. Flextime options can include fixed starting/ending times or workdays (other than the typical 8 – 4:30, M-F schedule). Compressed Workweek: A traditional 40-hour workweek condensed into fewer than five workdays (e.g., four 10-hour workdays). Teleworking: A regular, routine work arrangement that allows the employee to perform a portion of the job outside of City facilities. This type of arrangement specifies the number of hours to be worked outside of the office and the specific time in which it will occur. CRITERIA Flexible work arrangements are discretionary based upon the operational needs of the department, division, or work group and must have prior approval by the supervisor, department head, and City Administrator. Requests for flexible work arrangements will be evaluated based on the employee’s ability to perform their job duties, tasks, and responsibilities remotely or independent of co-workers or team members. Employees must pass their initial probationary period and/or be in good standing to be eligible for flexible work arrangements. General Guidelines: • A flexible work arrangement is a business and workplace strategy, not an employee right or universal employee benefit. This arrangement does not change the basic terms and conditions of employment with the City. • Flexible work arrangement requests are not the same as the occasional need for flexibility. Flexible work arrangements generally last longer than two months and are a regular and predictable part of the employee’s work schedule. • Not all requests will be accommodated and not all positions are appropriate for flexible work options.  • The operational needs of the department, division, or work group must be met with flexible work arrangements. • Performance expectations remain the same regardless of the employee’s work schedule or location. An employee’s current and past job performance, demonstrated work product, ability to work independently, and organization/time-management skills will all be considered when making determinations. • Flexible work arrangements are not guaranteed or permanent – they may change as the needs of the City, department, division, or work group change. • The supervisor may temporarily adjust work schedules or location as needed to meet the operational needs of the work group. • When making decisions regarding flexible work arrangements, the impact on other staff members will be considered. • Customers and staff must not be adversely affected by a flexible work arrangement. A flexible work arrangement may be discontinued at the Supervisor’s and/or Department Head’s discretion if adverse effects arise. • Flexible work arrangements must be in compliance with the City’s information security and data policies as well as all other City policies. • The employee must receive approval for temporary deviations in the established work schedule from their supervisor in the same manner that they would without a flexible work arrangement. • All flexible work arrangements are subject to the City’s bargaining unit contract language and the Fair Labor Standards Act and other relevant laws. • Eight hours of pay is the maximum allowed per holiday for full-time employees (pro-rated for part-time employees). Work schedule options when a holiday falls within the work week:  If an employee’s flexible work arrangement consists of four 10-hour days then the following applies: a) If the holiday falls on the day that the employee would normally have off (i.e., work schedule is Tuesday-Friday and holiday falls on Monday) then the workweek will revert back to a normal 8-hour per day workweek. Employee will have 8 hours holiday pay on Monday and work 8 hours per day for the remainder of the week. b) If the holiday falls on a day that an employee is scheduled to work (i.e., work schedule is Tuesday-Friday and holiday falls on Friday) then the employee is required to use vacation or personal leave to supplement the rest of the scheduled workday OR the employee can choose in advance of the holiday week to revert the workweek to a normal 8-hour per day workweek. Teleworking Guidelines: The work area should be suitable to complete the work assigned, safe, ergonomically appropriate, and located in a space where employees can conduct business professionally. Employees that telework must have internet access with enough bandwidth to reliably connect to the City’s VPN. As bandwidth requirements can vary greatly depending on the work to be performed, employees should contact IT if they need assistance determining the appropriate bandwidth for their specific needs. • To ensure continuity of operations, hourly employees may only work remotely one day of their normal work week, unless approved otherwise by the department head. Exempt employee’s may work 1-2 days of their normal work week as long as their department needs are being met or as approved otherwise by the department head and City Administrator. • The employee will establish an appropriate work environment within their home for work purposes. The City will not be responsible for costs associated with the setup of the employee’s home office, such as internet connection/monthly fees, modem, phone, remodeling, furniture or lighting, nor for repairs or modifications to the home office space. The City accepts no responsibility for damage or repairs to employee-owned equipment. The work area should provide sufficient security for data, phone conversations, etc.  • Equipment needs (including computer, software) for teleworking will be determined by the City and in coordination with the City’s IT department. Equipment provided by the City is limited to authorized persons for City-related purposes only. The telecommuter must sign an inventory of all City property received and agree to take appropriate action to protect the items from damage or theft. Upon separation of employment, all City property will be returned to the City, unless other arrangements have been made. • Provisions of the Minnesota Government Data Practices Act and data privacy policies must be followed when performing work at a remote location. Employees will be expected to ensure the confidentiality and security of all City data accessed from or transported to the remote work site. • A teleworking arrangement cannot and is not a substitute for regular dependent, elder/childcare, or sick leave usage. If dependent elder/child are home during teleworking hours, elder/childcare must be in place. • The teleworker’s schedule, including number of teleworking days per week, normal teleworking hours, and use of benefit leave time will be discussed with the employee prior to finalizing the teleworking agreement. • The supervisor retains the right to call a teleworker into the office as needed. Teleworkers must be accessible as they would be in City offices. The only difference is where the work occurs. The arrangement must be seamless to the department and customers. • Teleworkers are expected to develop an effective communication strategy with their supervisors and work unit. Teleworkers must be reachable during the agreed-upon work hours. • Travel to and from a City office for the purposes of meetings or other work requirements are not considered eligible for compensation and mileage will not be reimbursed. • Any work-related accident, injury, or illness that occurs while teleworking should be reported immediately to the employer’s supervisor so that a first report of injury can be completed. An employee is covered by Worker’s Compensation laws while teleworking. • An employee’s existing insurance policy may not include coverage for liability arising out of the use of a residence for a business purpose. Employees are solely responsible for determining an appropriate level of insurance based on their own circumstances. Employees are encouraged to check with their insurance carrier about the implications of working from home. • Federal and state tax implications of teleworking and use of a home office are the responsibility of the employee. PROCESS 1. The employee must complete a flexible work arrangement request form and submit it to their supervisor. 2. The employee and supervisor must discuss the flexible work arrangement request. 3. The work group’s operational needs must be considered (e.g., impact on work group, co-workers, customers, budget, business needs, etc.) 4. Supervisors should specify when the employee is expected to be present at the office, how they are to be available during their offsite work time and how they are to communicate their specific availability, if the flexible work arrangement is approved. 5. Flexible work arrangement agreements must be in writing and approved by the supervisor, department head, and City Administrator before taking effect. 6. Supervisors should evaluate an employee's flexible work arrangement with them on an ongoing basis and review the flexible work arrangements among their work group to ensure ongoing equity. Flexible work arrangements will need to be renewed each calendar year. 7. The City will assess the flexible work arrangement policy on a periodic basis. PERFORMANCE STANDARDS Performance expectations remain at the same level as they would if not under a flexible work arrangement. If performance standards are not met, the ability to work a flexible work arrangement may be revoked until performance improves.  FLEX ARRANGEMENT POLICY FAQs Q. Can employees work remotely from a different location other than their home? A. In unusual circumstances, rare occurrences may be considered and approved by the supervisor in advance. As with any deviation from the agreed upon work schedule or location, supervisors should consider whether or not paid time off is a better solution. Q. Are employees required to have elder/childcare when working from home? A. Yes, elder/childcare must be in place during all hours when working from home. Q. How do I ensure there is appropriate coverage for customer service areas? A. It is the responsibility of the supervisor and their work group to ensure there is appropriate coverage. This may mean temporarily suspending a flex or telework arrangement. Q. Will the City provide Internet access for employees choosing to work remotely? A. No. It is the responsibility of the employee to ensure that adequate Internet bandwidth is available. Q. What supplies will the City provide for employees working from home? A. Employees are responsible for ensuring their home work space is ergonomically viable. They may utilize equipment that is issued by the City in conjunction with the telework arrangement. Employees are required to return it upon separation from employment. Q. Can I be called to come into the office when I am working from home? A. Yes, employees are to be accessible as if they are working in the city office. Travel to and from a City office for the purposes of department needs, meetings, or other work requirements are not considered eligible for compensation and mileage will not be reimbursed.  City of South St. Paul FLEXIBLE WORK ARRANGEMENT PROPOSAL FORM Complete this form and provide to your supervisor. Name: Date Submitted: Title: Department: Type of Flexible Work Arrangement being proposed: Flextime Teleworking Compressed Workweek Prior to submitting this proposal, I have reviewed the City’s Flexible Work Arrangement Policy. I understand that the City of South St. Paul is not obligated to approve the proposed flexible work arrangement for any employee. I understand that the decision to approve my proposal is at the discretion of my supervisor in consultation with the department head and City Administrator. I understand if my proposal is approved, it can be rescinded at any time due at the discretion of the employer. I understand that a flexible work arrangement is a business and workplace strategy, not an employee right or universal employee benefit, and a flexible work arrangement does not change the basic terms and conditions of employment with the City. Employee Signature Date PROPOSED WORK ARRANGEMENT: Week 1 of Pay Period Week 2 of Pay Period Start/End Total Hours Work Location Start/End Total Hours Work Location Times for Day Times for Day Example 8 am – 4:30 pm 8 City Hall 8 am – 4:30 pm 8 Home Monday Tuesday Wednesday Thursday Friday Total Hours for Week WORK RESPONSIBILITITY DETAILS Employee/Supervisor – respond/list any potential concerns with any of the following: Impact on customers, co-workers, supervisors, department, etc.: If telework arrangement, what are the job duty expectations (i.e., phone calls, communication with co- workers, work that can be performed from home, etc.): If telework arrangement, if applicable is elder/childcare in place during all work hours? Request approved, see Flexible Work Arrangement Agreement Request denied, explanation: Flexible work schedules are subject to ongoing review and may be subject to termination at any time for any reason or no reason at all. The supervisor and the employee will attempt to provide at least 5 days’ notice prior to ending an approved arrangement when feasible. Employee Signature Date Supervisory Signature Date City Administrator Signature Date HR Signature Date City of South St. Paul Policy ____ LEAVE DONATION PROGRAM SCOPE This policy applies to all benefit earning employees of the City of South St. Paul. PURPOSE This policy establishes a leave donation program, through which eligible employees may voluntarily donate a portion of their accrued sick or vacation time to a fellow eligible employee who has exhausted all forms of paid leave due to a medical emergency. This policy shall not be applicable in workers compensation conditions or qualifying duty sick usage. DEFINITIONS Medical Emergency: A physician’s diagnosis of a major life-threatening event of an employee that will require the employee to be absent a prolonged period from their employment duty to care for oneself. Prolonged period means an absence greater than one pay period. Qualifying Major Life-Threatening Event: Includes, but is not limited to heart attack, stroke, cancer, organ transplant, life threatening illness or condition as defined by a physician’s diagnosis using the FMLA medical certification of the catastrophic health problem. POLICY In accordance with the terms and conditions of this policy, eligible benefit earning employees having accrued vacation and sick time can donate no more than sixteen (16) hours of sick and/or vacation leave combined per calendar year to a single fellow employee. This shall not be construed to prohibit sixteen (16) hours each year to additional eligible employees. The City Administrator or their designated representative has the right to deny or limit use of donated leave if it is determined to be in the best interest of the city. Nothing in this policy will be construed to limit or extend the maximum allowable absence under the Family Medical Leave Act (FMLA). This program is to run concurrently with FMLA. ELIGIBILITY Donors. Donor employees must be benefit eligible to participate in the Leave Donation Program. Donors must have more than forty (40) hours of vacation leave and forty (40) hours of sick leave available after the donation. For the purposes of this policy, catastrophic sick leave, personal leave, and compensatory leave is not considered an eligible leave donation benefit and shall not be used in the calculation of total accrued leave available after the donation. Recipients. Recipient employees must be benefit eligible to participate in the Leave Donation Program and must have a documented medical emergency that requires them to be absent from the workplace for a prolonged period. An employee will be eligible to receive donated leave only after all forms of employee’s accrued leave (vacation, sick, compensatory time, personal, catastrophic sick, etc.) balances have been exhausted by the employee. Employees receiving workers’ compensation benefits from city- related injuries or illnesses are not eligible to receive donations. CRITERIA The terms and conditions governing the Leave Donation Program are as follows: Requests for Leave Donation. To receive donated leave time an employee will submit the following to Human Resources: 1. Completed Leave Time Donation Form, 2. Certification from the attending physician or other applicable health care provider, 3. Any other relevant information necessary in determining eligibility. Recipient. An employee is eligible to receive donated leave only for time lost from normal work hours and only to make them financially whole once their own paid leave banks have been exhausted. Leave donations can be made only after an employee is forced by a medical emergency to be absent from work for more than one full pay period. The value of donated sick and/or vacation leave is computed according to the salary or wages of the recipient, regardless of the salary or wage of the donor. The IRS has ruled that these payments are considered wages and taxable income for the recipient. An eligible full-time employee may not receive more than a total of one hundred sixty (160) hours of donated leave in a rolling calendar year, for any single Qualifying Major Life-Threatening Event. The maximum hours of donated leave for eligible benefit earning part-time employees will be pro-rated based on the number of hours worked per week. For example, a part-time employee scheduled to work 20 hours a week would be eligible for up to eighty (80) hours of donated leave in a rolling calendar year, for any single Qualifying Major Life-Threatening Event. Receipt of donated leave will not be allowed once an employee is judged to be disabled by the major- medical condition and will not be returning to work. Donated time cannot be used for severance pay, deposited into a sick leave bank, paid to an employee in the form of cash or used in any other manner other than what is stated in this section of the policy. Donor. An eligible employee who donates sick or vacation leave understands this is a “gift” and that the donated leave will be irrevocable, and any receiving employee has no obligation to pay it back. The IRS has ruled that the employee donating the leave realizes no income and incurs no tax-deductible expense or loss, either upon donation of leave or payment to the recipient. Donation of accrued time must be in whole hours and will be donated to a bank. An employee may donate a minimum of four (4) hours and no more than sixteen (16) hours of sick and/or vacation leave combined per calendar year to a single fellow employee, provided they maintain a minimum of forty (40) hours of accrued vacation and forty (40) of sick leave after the donation. Once donated time has been transferred to the donated leave bank the donor may not revoke the transaction, even if it has not yet been paid. Participation. Participation is voluntary and no employee shall pressure or otherwise attempt to influence another employee to donate accrued time. Human Resources may post information and general request information to inform employees of the program and inform employees if there is a need for donated leave hours. All donations will be kept confidential, and the city will not inform the recipient of the names of those donating hours. PROCESS Eligible employees wishing to participate as a recipient in this program should obtain a “Donated Leave Request Form” from Human Resources. If the employee is physically unable to apply, a member of the applicant’s family may apply on their behalf. a) Appropriate documentation concerning the nature, severity, and anticipated duration of the medical condition from the attending physician or other applicable health care provider is required with the Donated Leave Request Form. b) If the employee is found to be eligible for donated leave, Human Resources will notify employees, only giving the person’s name and estimated number of days needed. The notification shall not include confidential medical information. c) Employees wishing to donate accrued vacation and/or sick leave shall submit a Leave Donation Program Authorization Form. d) Donations processed for a recipient each pay period shall be limited to the amount equal to that individual’s gross earnings per pay period. In the event donations exceed this limit, they will be held in the donation bank and processed the following pay period(s). Exceptions to these requirements must be approved by the City Administrator and will only be granted in rare and unusual circumstances. Any questions regarding this program should be directed to Human Resources. The city specifically retains the right to administer the program in the manner it deems to be in the best interest of the city, including the right to amend, to alter, to further limit or to eliminate the program.  City of South St. Paul DONATION LEAVE PROGRAM Donated Leave Request Form I, _______________________________________ (employee name), request consideration of donated leave hours due to a Medical Emergency for myself. As part of this request, I am providing documentation from my medical provider noting the condition, the treatment regimen, and expected duration I will be off from work. I understand that any donated leave will be available to me only after I have exhausted all my accumulated leave banks due to the Medical Emergency. I also understand that I am eligible to receive up to 160 hours of donated leave as a full-time employee in a rolling calendar year, or a pro-rated maximum donation as a part-time employee based on my budgeted hours per week. I understand that the Donation Leave Program is strictly voluntary, and I cannot ask or put pressure on co-workers to donate leave. I also understand that I will not be informed who, if anyone, donated leave hours. I give permission to the City of South St. Paul to notify employees of the City of South St. Paul of my request under the Leave Donation Program. I understand that employees will be informed of my request by providing my name and department worked in, along with the estimated number of days needed. ___________________________________________ ________________________ Signature Date Attach documentation from medical provider. Any medical documentation provided will be kept confidential. Return form to: Leave Donation Program Human Resources 125 3rd Avenue North South St. Paul, MN 55075  City of South St. Paul LEAVE DONATION PROGRAM AUTHORIZATION FORM Waiver and Surrender of Accrued Leave Having read and understood the City of South St. Paul’s Leave Donation Program attached to this form, and subject to the terms and conditions set forth therein, I hereby voluntarily waive my entitlement to and surrender ____________ hours of my accrued Sick Leave and/or _____________ hours of my accrued Vacation Leave on the condition that the hours I surrender is paid by the City of South St. Paul to the employee I have identified below. I also understand I must have a total of forty (40) hours of vacation and forty (40) of sick leave in my accrued banks following my donation. Name of Employee to Receive Surrendered Leave: Department of Employee to Receive Surrendered Leave: I understand that, upon submission of this form, I cannot revoke this transaction, even if it has not yet been paid. I also understand that if Leave Donations exceed the amount needed for the above listed recipient any unused donated hours will be placed into a Leave Donation Bank that may utilized in the future for another eligible recipient of the City of South St. Paul. Name of Employee Surrendering Leave: Last 4 digits of SSN: Department of Employee Surrendering Leave: Signature of Employee: Date: A CITY COUNCIL AGENDA REPORT DATE: May 9, 2022 3 DEPARTMENT: ENGINEERING Prepared by: Sue Polka, City Engineer ADMINISTRATOR: JRH AGENDA ITEM: City of Inver Grove Heights’ Request for Street Improvement Projects DESIRED MEETING OUTCOMES: Provide staff with direction to continue discussions with Inver Grove Heights on future street improvement projects. OVERVIEW: Staff from the City of Inver Grove Heights requested a meeting to discuss several street improvement projects located along our cities’ borders. They are planning projects in the following locations (maps are attached). The potential South St. Paul portion of the cost is listed below: • Carmen/Claude – Full depth reclamation - $87,000 • Upper 55th Street E (Cahill Ave. to Blackberry Tr. – mill & overlay) - $67,000 • Dawn Way rehabilitation (Airport Rd to Henry Ave) - $140,000 • Cromwell Court Mill & Overlay - $65,000 • 57th Street E Watermain/Street Reconstruction (5th Avenue to 7th Avenue) TBD The highest priorities for Inver Grove Heights are the Dawn Way and Cromwell Court projects which they would like to complete in 2023. They are also hoping to complete the upper 55th Street and Carmen Claude projects in 2023. We discussed scheduling, assessments, and coordination with South St. Paul projects. Staff will present these issues for discussion. SOURCE OF FUNDS: Assessments, Capital Improvement Fund  7 T HAV ES 3 R DAV ES D ocume ntP ath :K:\0 190 66-0 00\G IS\M aps \Ca rme nCla ud\C e a rme nCla ude P R O \P roje c o tLcatio nDa teS aved :10 /19 /20 21 8 T V HA ES T 6 HAES V 7 5T TE HS O S T U TW HS TE HS 5 5T PPR E U E LROS ECT 5 T HA VES $87K SSP Portion C AHIL LA ANA DC V EAE V C E LAD U A EWY C A CRMN E A VE No SSP C ARL E D A W AY Portion W ESTG ATER D N EL TE L A DC D 3R S 6 Y L 6 N L M 4THC O O TE B E T O N T M DS E NNA U N ZL IN H P roje ctL o ca tio n C ityB oun dary 5 6T TE HS P arce lBo und ary ¯ P roje ctL oca tio nMa p 2 022Stree tProje cts|(C P20 22 -0 9 I)WSB#01 9 6 0 6 -000 0 5 20 C arm e nA ve n ue/Cla u deWyS a treetRh e b a ilitation Fet e 1in ch=2 50fe et Inv e rG ro veHeigh ts,M N  D ocume ntP ath :J:\g is\c ity \IG H\M aps \20 22IG HPro jec ts\2 022 IGH _PRO\U ppe r55 thD ateS aved :9/2 0/2 021 9 T HAV E 7 T HA VES B RENTA VE YT R RL AK CBR E L B O S T U TW HS 7 5T TE HS $67K SSP Portion U PPE R55 T HS TE C A B RYA NTL H N IL LA V E B URK E TR L B RAD B U R Y C T C AND AC P roje ctL o ca tio n E AV E P arce lBo und ary P roje ctL oca tio nMa p U ppr5 e la th(B 5 ck In 2 b v 0 e 2 erryT rG 2Stre v ro e rl toC eH tP ig e je ro ah h cts ill A ts,M ve N )R eha b n tio ilita ¯ 0 1in ch=1 50fe et 5 10 Fet e  Dawn Way Improvements Figure 1: Pavement Recommendations Overview City of Inver Grove Heights April 2022 R Way $140K SSP Daw n Portion Conc o R v rd Bl d Airport R d SOUTH ST. PAUL Cromwell Ct 61st St E $65K SSP Portion a Dawn W y 63rd St E 63rd St E Corwin Ct Craig Ave Crosby Ave Dawn Way Dawn Ave 64th St E 64th St E 64th St E Coryell Ct 65th St E 65th St E H:\INGH\T18120770\CAD\C3D\MISC-120770-Street Areas_Pavement Recommendations Overview.dwg 4/25/2022 1:49:21 PM Craig Ave E Craig Ave Crosby Ave Dawn Way Dawn Ave Craig Ave E 66th St E 66th St E 66th St E 67th St E MILL & OVERLAY 67th Ct E 67th Ct E FULL-DEPTH RECLAMATION PARTIAL RECONSTRUCTION A CITY COUNCIL/EDA WORKSESSION AGENDA REPORT DATE: May 9, 2022 4 DEPARTMENT: ECONOMIC & COMMUNITY DEVELOPMENT Prepared by: Ryan Garcia, Director of Economic & Community Development ADMINISTRATOR: JRH Agenda Item: 514 Concord Exchange South – Development Interest (Asian Mart) DESIRED MEETING OUTCOMES: We’re looking for the EDA to discuss and form consensus around the following topics: • Is there EDA support for the proposed use at the property? • If so, is the EDA supportive of staff negotiating a development agreement? OVERVIEW: Staff has been approached by Watson Trading LLC, a small business that is interested in developing an approximately 8,500 square foot commercial building on the west side of Concord Exchange South, on EDA-owned vacant property located between Footh Auto and Stockyards Tavern and Chophouse. The developer is seeking EDA feedback and response to their concept, which proposes that the commercial building would be occupied by the businesses that the buyer currently owns and operates in Burnsville as well as other retail/restaurant tenants. At this very early stage, the developer has prepared only a preliminary “fit sketch” for the physical development of the site, but they are aware of and comfortable with the City’s CGMU-2 Zoning Requirements. A draft Letter of Intent (LOI) has been submitted by Watson Fong (representing Watson Trading LLC), and Staff is expecting to offer a response to this LOI following Monday’s discussion. BACKGROUND OF THE DEVELOPMENT SITE: The EDA-owned property totals approximately 1.25 Acres (about ½ of which is unbuildable bluffland) and is situated on the west side of Concord Exchange South, between Footh Auto and Stockyards Tavern and Chophouse. The property was acquired by the Housing and Redevelopment Authority of South St. Paul (HRA) in 2005, as we understand it for the purposes of blight elimination and long-term land banking. At the time of the HRA’s acquisition, the property was used as a parking lot for the “Las Playas” restaurant to the north (where the Stockyards Tavern sits today, generally), however from the late 1800s through the mid 1960s it appears that the property consisted of a small number of residential structures. A small (2,500 SF) commercial structure was constructed in the mid 1960s and housed a small handful of commercial trucking firms until demolition in the mid 1980s. The HRA conducted a Phase I and Phase II on the site in 2007, which did not indicate any environmental concerns. As a part of the development of Stockyards Tavern and Chophouse in 2018-2019, the EDA constructed the retaining wall bordering the base of the bluff within the site, and there have been periodic overtures from the neighboring businesses (DeLacy and now Footh Auto Sales, Stockyards) about acquiring this property for parking/car storage. The property has remained vacant since the HRA’s acquisition and has been zoned mixed-use since 2003. The CGMU-2 District permits a broad range of retail and general service businesses by right, so fundamentally the EDA has discretion as to whether sale of the property at this time for the proposed (by all appearances, conforming) use is desirable, or whether continuing to hold the land is preferred. ABOUT THE PROPOSED DEVELOPMENT AND THE DEVELOPER: Although quite preliminary, the developer proposes development of the site to a multi-tenant commercial building to house a small ethnic (Filipino) market, an inventory area, and tenant spaces that the buyer envisions to house compatible uses (such as an ethnic restaurant, tea/coffee bar, or additional retail). The developer is drawn to the South St. Paul location’s centrality to their customer base, proximity to his home (Woodbury), and a general appreciation of the community’s personality and “pro-business” attitude. Mr. Fong has successfully established, operated, and sold retail businesses in the past in the Metro Area, and currently operates a retail store in Burnsville (which will remain open after the SSP Store opens). Mr. Fong is actively working with Open to Business, Studio EA Architects (who designed and managed the Bremer Bank and MidWestOne Bank projects in SSP) and has engaged an experienced general contractor and lender to explore preliminary feasibility of the project. POTENTIAL NEXT STEPS: Mr. Wong has offered to purchase the EDA property for $80,000 (a +/ 35% discount in Staff’s opinion), but proposes heaping an inordinate amount of pre-development responsibility on the EDA. If the EDA’s consensus is that the proposed development is in the community’s and the EDA’s best interest, Staff would suggest that we push back on a number of the proposed “City Responsibilities”. We should be willing to accept the proposed purchase price if – and only if – the developer assumes responsibility for survey, a Phase I, etc. which will be requirements of their lender in any event. Assuming we can get to a more agreeable set of contingencies and division of labor, Staff will work with the developer to proceed to a formal purchase and development agreement, proceed with due diligence and work through the City’s review process. ATTACHMENTS: Orientation Map Letter of Intent ORIENTATION MAP  14600 10th Ave S. Suite 100 Burnsville, MN 55337 May 4, 2022 Ryan Garcia Director Economic Development Authority City of So St Paul Re: Letter of Intent for Concord Exchange So St Paul Property We are Asian Mart and Watson Trading LLC located at 14600 10th Ave S #100, Burnsville, MN 55337, a family/minority/woman-owned small business. We took over an existing Thai Grocery Store on March 1,2019 and converted into an Asian Store with 80% Philippine products and deli. With a growing Filipino population from WI, SD, ND, Iowa, Winnipeg Canada, not to mention the local Filipinos in MN, there is a great demand now for Philippine goods and Asian products not just for Asians but American consumers too. Just last week a friend opened a Filipino restaurant in Sibley, St Paul bringing to 7 establishments that caters to the market. With the proposed new development, we will build a retail grocery store to cater to the residents of new apartments in the area, aside for our existing customer. We will have a storage with walk-in freezer to store our inventories. And to give a good mix of businesses we will with 3-4 retail spaces for lease, we are talking with some vendors to compliment the space especially small business. (See draft layout, architects' perspective to follow). Layout will be adjusted according to tenants needs. The bigger lot is for our own use which we will finish once we have the approval. Watson Trading LLC used to own 2 Liquor Store in Shoreview and Oakdale (we sold it when Total Wine was starting to build their presence here in MN) and we managed a Medical Clinic in Stillwater too. We a have good relations with the City Council of the previous businesses and hoping to do the same with the City of South St. Paul. Asian Mart/ Watson Trading LLC agrees to purchase the property listed below owned by EDA of South St. Paul. We are pleased to have the opportunity to submit this letter of intent to begin the process of purchasing the property upon approval of the City and the lender. If you decide to accept the proposal, we look forward to work with the EDA to meet the needs of the community, bring diversity, improve the surrounding area/neighborhood, increase city's tax base for the city and hope to have a downtown feel in South St. Paul soon, increase foot traffic and make it a place to visit soon. The parcel ID numbers are: • 36-75100-10-020 (Lot 2 Block 10 Tarbox Addition) • 36-75100-10-030 (Lot3 Block 10 Tarbox Addition)  • 36-75100-10-040 (Lot 4 Block 10 Tarbox Addition) • 36-75100-10-060 (E 1/2 of Lots 5 & 6 Block 10 Tarbox Addition and Pt of Vacated Vey Street) • 36-75100-10-090 (lots 7 through 9 Block 10 Tarbox Addition and Pt of Vacated Vey Street) • 36-75100-10-100 (Lot 10 Block 10 Tarbox Addition) • 36-75100-10-110 (Lot 11 Block 10 Tarbox Addition) • 36-75100-10-120 (Lot 12 Block 10 Tarbox Addition) • 36-75100—10-130 (Lot 13 Block 10 Tarbox Addition) Purchase price for the property $80,000 10% down upon closing, balance thru bank financing, no realtor involve to save both parties. City Responsibility and Understanding : Provide environmental study upon receipt of LOI, offer may be revise upon review of the study. : Update recent top/boundary survey : Provide exact boundaries and size of property (so we can plan properly) : Sanitary sewer/water services extended to the site : Pending/Levied assessments ; Storm sewer, sanitary and water area charges for MET council, watershed, sanitary, water and storm sewer districts : Supply Gas, power, electric, internet/phone service ; Grant Pylon sign : option for drive-thru in case needed : understands the need for loading dock/storage Buyer Responsibility and Understanding ; Building plan review, building and inspection fees : Building connection to utilities : Understands city does not require on-site storm water ponding : Understands no minimum parking requirements This letter is written with the understanding that no party will be bound by any of the terms of this agreement until the mentioned above foregoing matters and such added considerations are mutually acceptable to both parties. This letter of intent shall expire within 60 days (about 2 months) after the EDA Board of Directors has met and approved or denied the purchase price of the property. We will start detailed planning once city approval is granted, and all proposals and bank requirements are approved. We are looking forward to working with the EDA/City of So St Paul on this project and bring downtown to the area with your assistance and support. If you have any questions, please call 651-206-3362. Thank you for supporting small-minority business. Please see attached draft layout, we are waiting for the architect's perspective and will have more detailed drawings once both parties agree to the proposal. Buyer Seller ---------------------------------------- ---------------------------------------- Watson Fong Date Ryan Garcia Date Asian Mart LLC EDA City of So St Paul Watson Trading LLC