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HomeMy WebLinkAboutFebruary 02, 2022 - EDA Packet Shakopee Economic Development Authority "DaAl February 2, 2022 SHAKOPEE 7:00 PM City Hall, 485 Gorman St. 1. Roll Call 2. Approval of Agenda 3. Consent Business 3.A. Tax Increment Spending Plan 3.B. EDA Minutes 4. General Business 4.A. Entrepreneurship Report to Date 5. Reports 5.A. EDA Bill List 6. Adjourn to Tuesday, March 1, 2022 at 7:00 pm Note to EDA Members: If you have any questions or need additional information on any of the above items,please call Michael Kerski,prior to the meeting at(952)233-9346. Page 1 of 31 3.A. SHAKOPEE Shakopee Economic Development Authority February 2, 2022 FROM: Nate Reinhardt, Finance Director TO: President and Commission Members Subject: Tax increment spending plan Policy/Action Requested: Adopt Resolution E2022-004 approving a spending plan for certain tax increment financing districts located in the City of Shakopee. Recommendation: Approval Discussion: The State Legislature amended the TIF law in 2021 to provide flexibility to cities to utilize unobligated TIF balances in existing districts in order to promote construction and job creation in their communities. The law allows cities to provide assistance for private development that creates or retains jobs, without counting against the pooling limitations of the districts. The EDA has until December 31, 2022 to transfer the funds to another designated City/EDA fund and the dollars must be spent by December 31, 2025. In order to preserve the ability to use this tool, the City and EDA are required to develop a spending plan that identifies the TIF districts that will fund defined projects, hold a public hearing, adopt the plan and submit it to the State Auditor. Budget Impact: If the spending plan is approved, the City/EDA does not commit assistance to a development project, but rather reserves the right to do so in the future. Staff estimates the available unobligated increment is approximately $500,000. Preference for financing assistance will be for private development that provides for high wage job creation or development of housing, including but not limited to, market rate and affordable multi-family, town homes Page 2 of 31 and single-family units. ATTACHMENTS: o E2022-004 - Tax Increment Spending Plan o Proposed Tax Increment Spending Plan o Public Hearing Notice o OSA Statement of Position (2021 TIF Law) o TIF Spending Plan (Presentation) Page 3 of 31 ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE, MINNESOTA RESOLUTION NO. E2022-004 RESOLUTION APPROVING A SPENDING PLAN FOR CERTAIN TAX INCREMENT FINANCING DISTRICTS LOCATED IN THE CITY OF SHAKOPEE WHEREAS, the Economic Development Authority for the City of Shakopee, Minnesota (the"Authority") and the City of Shakopee (the "City") have previously established the following tax increment financing districts located in the City (collectively, the "TIF Districts"), and adopted tax increment financing plans therefor, pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended, and Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the "TIF Act"): Tax Increment Financing District No. 10 (River City Center), Tax Increment Financing District No. 14 (SanMar), Tax Increment Financing District No. 15 (All Saints), Tax Increment Financing District No. 16 (Rahr), Tax Increment Financing District No. 17 (Amazon), Tax Increment Financing District No. 18 (Canterbury), Tax Increment Financing District No. 19 (Riverfront), Tax Increment Financing District No. 20 (Enclave), and Tax Increment Financing District No. 21 (Southbridge Soils); and WHEREAS, Section 469.176, subdivision 4n of the TIF Act (the "Temporary TIF Authority Act") authorizes the Authority to spend available tax increment from any existing tax increment financing district, notwithstanding any other law to the contrary, to provide improvements, loans, interest rate subsidies, or assistance in any form to private development consisting of construction or substantial rehabilitation of buildings and ancillary facilities, if the following conditions exist: (1) Such assistance will create or retain jobs in the State of Minnesota, including construction jobs; (2) Construction commences before December 31, 2025; (3) The construction would not have commenced before the dates specified above without the assistance; (4) Tax increments under the spending plan are spent by December 31, 2025; and (5) The City Council of the City (the "City Council") approves a written spending plan (after a duly noticed public hearing) that specifically authorizes the Authority to take such actions; and WHEREAS, the Authority proposes to adopt a spending plan for the TIF Districts (the "Spending Plan") in accordance with the Temporary TIF Authority Act in substantially the form submitted to the Board of Commissioners of the Authority (the "Board") to utilize existing tax Page 4 of 31 increment revenues from the TIF Districts in order to stimulate construction or rehabilitation of private development in a way that will also create or retain jobs; and WHEREAS, the assistance authorized under the Spending Plan expressly includes but is not limited to assistance for private development that provides for high-wage job creation or development of housing, including but not limited to market rate and affordable multifamily, townhomes, and single-family units; and WHEREAS, assistance authorized and provided under the Spending Plan may constitute a business subsidy as described in Minnesota Statutes, Sections 116J.993 to 116J.995, as amended (the "Business Subsidy Act"), which will require that the Board conduct a public hearing prior to providing such financial assistance to a developer; and WHEREAS, on the date hereof, the City Council of the City will conduct a public hearing regarding the Spending Plan, for which notice was published in a newspaper of general circulation in the City and on the City's public website at least ten (10) days but not more than thirty (30) days prior to the date of the public hearing, and consider a resolution approving the Spending Plan; and NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Economic Development Authority for the City of Shakopee, Minnesota that: 1. The Spending Plan is hereby approved in substantially the form on file in City Hall. 2. The Authority makes all the findings set forth in the Spending Plan, which are incorporated herein by reference. 3. Authority staff and consultants are hereby authorized to take actions necessary to carry out the terms of the Spending Plan. 4. The Board shall conduct a public hearing prior to providing financial assistance to a developer under the Spending Plan if in the opinion of counsel to the Authority such assistance constitutes a business subsidy under the Business Subsidy Act. Sworn and Executed Under My Hand this day of February, 2022. President Executive Director 2 Error!Unknown document property name. Page 5 of 31 EDA Adoption Date: , 2022 CITY Adoption Date: , 2022 SHAKOPEE Shakopee Economic Development Authority City of Shakopee, Scott County, Minnesota SPENDING PLAN TIF District 10 (River City Center) TIF District 14 (San Mar) TIF District 15 (All Saints) TIF District 16 (RAHR) TIF District 17 (Amazon) TIF District 18 (Canterbury) TIF District 19 (Riverfront) TIF District 20 (Enclave) TIF District 21 (Southbridge Soils) FREERS --f4 r NAN:r A.)v S )RS Prepared by: Ehlers 3060 Centre Pointe Drive Roseville, Minnesota 55113 BUILDING COMMUNITIES. IT'S WHAT WE DO. Page 6 of 31 SPENDING PLAN FOR TIF DISTRICTS 10 (RIVER CITY CENTER), 14 (SANMAR), 15 (ALL SAINTS), 16 (RAHR), 17 (AMAZON), 18 (CANTEBURY), 19 (RIVERFRONT), 20 (ENCLAVE), AND 21 (SOUTHBRIDGE SOILS) I. PURPOSE The Shakopee Economic Development Authority (the "Authority") administers the Tax Increment Financing Districts listed above (the "TIF Districts") in the City of Shakopee, Minnesota (the "City"), and proposes to adopt a Spending Plan for the TIF Districts in accordance with Minnesota Statutes, Section 469.176 Subd. 4n (the "Act"). The purpose of the Spending Plan is to develop or redevelop sites, lands or areas within the City in conformity with the City's Comprehensive Plan or other City plans or objectives by using available tax increments from the TIF Districts to provide improvements, loans, interest rate subsidies, or assistance in any form to private development consisting of the construction or substantial rehabilitation of buildings and ancillary facilities, which will create or retain jobs in this state, including construction jobs. II. PLAN The Authority is authorized as follows: (a) To use available tax increments from the TIF Districts to provide improvements, loans, interest rate subsidies, or assistance in any form to private development consisting of the construction or substantial rehabilitation of buildings and ancillary facilities (the "Projects") in financing assistance to further the goals in the City's Comprehensive Plan or other City plans or objectives, if doing so will create or retain jobs in the state, including construction jobs. Preference for financing assistance will be for private development that provides for high wage job creation or development of housing, including but not limited to, market rate and affordable multi-family, town homes and single-family units. The Projects shall commence before December 31, 2025 (unless a later commencement date is authorized by law) and shall constitute Projects that would not commence by such date without the assistance provided pursuant to this Spending Plan. (b) To amend the budget set forth in the Tax Increment Financing Plans for the TIF Districts if necessary, to provide for the assistance authorized by this Spending Plan. (c) To take any other action necessary and authorized under the Act in connection with the construction or substantial rehabilitation of facilities of the type described in clause (a) above. The assistance provided pursuant to this Plan shall be subject to Minnesota Statutes, Sections 116J.993 to 116J.995 (the "Business Subsidy Law"), if applicable, and shall be subject to the City's Business Subsidy Policy. Page 7 of 31 NOTICE OF PUBLIC HEARING CITY OF SHAKOPEE SCOTT COUNTY STATE OF MINNESOTA NOTICE IS HEREBY GIVEN that the City Council of the City of Shakopee, Scott County (the "City"), will hold a public hearing on Tuesday, February 1, 2022, at or after 7:00 p.m. at the Council Chambers of City Hall, located at 485 Gorman Street in the City of Shakopee, Minnesota, relating to a proposal of the City and the Economic Development Authority for the City of Shakopee, Minnesota (the "EDA"), to adopt a spending plan to authorize expenditures of tax increments from the following Tax Increment Districts: TIF District 10(River City Center) TIF District 14 (San Mar) TIF District 15 (All Saints) TIF District 16(RAHR) TIF District 17 (Amazon) TIF District 18 (Canterbury) TIF District 19(Riverfront) TIF District 20(Enclave) TIF District 21 (Southbridge Soils) within the Minnesota River Valley Housing and Redevelopment Project No. 1 to stimulate private development at one or more sites in the City,all pursuant to Minnesota Statutes, Section 469.176,subd.4n. A copy of the spending plan is on file and available for public inspection at the office of the Community Development Director at City Hall and is available for inspection during regular business hours. At the time and place fixed for the public hearing,the City Council will give all persons who appear at the hearing an opportunity to express their views with respect to the proposal. In addition, interested persons may direct any questions or file written comments respecting the proposal with the City Clerk, at or prior to said public hearing. PLEASE NOTE, due to COVID-19, the public hearing may be conducted via telephone or other electronic means as allowed under Minnesota Statutes, Section 13D.021. Please refer to the City's website at https://www.shakopeemn.gov/or call City Hall at 952-233-9300 to learn how to attend the public hearing via telephone or electronically. BY ORDER OF THE CITY COUNCIL OF THE CITY OF SHAKOPEE,MINNESOTA /s/William H. Reynolds City Administrator City of Shakopee,Minnesota Page 8 of 31 STATE OF MINNESOTA tDISA SuitJulie Blaha a soo 525 Park Street State Auditor Office of the State Auditor Saint Paul, MN 55103 Statement of Position Temporary Transfer Authority(2021 Law) Tax increment revenue may be spent only as permitted by the Tax Increment Financing Act (TIF Act).1 In 2021,the Legislature enacted expanded,temporary authority to transfer unobligated tax increments for purposes of assisting private development consisting of the construction or substantial rehabilitation of buildings and ancillary facilities, if doing so will create or retain jobs in the state.2 Proposed amidst the COVID-19 pandemic,the enacted law is narrower than initially proposed and is similar to 2010 legislation that temporarily expanded the use of TIF with the aim of stimulating economic recovery after the Great Recession.' Authority, Purposes The new law temporarily permits a development authority to elect, by resolution,to transfer unobligated increment for certain specified purposes.The new law does not, however, override requirements to pay bonds to which increments are pledged. Any transfer under this provision must be for the purpose of assisting private development that meets all of the following criteria: (1) it consists of the construction or substantial rehabilitation of buildings and ancillary facilities; (2) it creates or retains jobs in the state, including construction jobs;and (3) construction commences before December 31, 2025, and would not have commenced before that date without the assistance.' Developments that would already commence construction prior to December 31, 2025, or those that do not add or retain jobs in the state,would not be permitted beneficiaries of the transfer. Transfers must provide the assistance in one or both of the following ways: (1) by providing improvements, loans, interest rate subsidies, or assistance in any form to the private development; or 1 The TIF Act is found at Minn.Stat.§§469.174 to 460.1794. 2 Minn.Stat.§469.176,subd.4n,as enacted by 2021 Minn.Laws,1St Spec.Sess.,ch.14,art.9 sec. 1. 3 The 2021 enacted provision does not include transfers to the general fund, nor more-generalized support for businesses impacted by the pandemic,as was initially entertained.While similar to the 2010 Jobs Stimulus provision,additional details are included. For information about the 2010 provision, see the separate TIF Jobs Stimulus Program statement of position on our website. 4 Minn.Stat.§469.176,subd.4n(a). New: August 2021 Main: (651) 296-2551 •Fax: (651) 296-4755 • TTY: (800) 627-3529• State.Auditor@osa.state.mn.us • www.osa.state.mn.us An equal opportunity employer Page 9 of 31 (2) by making an equity or similar investment in a corporation, partnership, or limited liability company that the authority determines is necessary to make construction of a development financially feasible.5 In order to demonstrate compliance with the new provision, an authority may wish to include affirmation of the qualifications in the written resolution electing to make the transfer.The authority also should keep documentation that demonstrates that the development created or retained jobs in the state and that commencement of construction by December 31, 2025, depended on the transfer. Approvals and Spending Plans Prior to approving the use of this temporary transfer authority by resolution, a development authority must also create a written spending plan that authorizes the development authority to provide the assistance or make the investment that makes the development qualify.'The plan must detail the use of transferred increment.'The OSA recommends identifying planned expenditures using the same categories identified in TIF plans and TIF reporting(e.g., acquisition, site preparation, financing costs, etc.), except for a category for administrative expenses, because administrative expenses are not included in the permissible uses of the transferred increment in the new law. The municipality(which may or not be the same as the development authority) must also approve the authority's spending plan after holding a public hearing.'The municipality must publish notice of the hearing in a newspaper of general circulation in the municipality and on the municipality's public website at least ten days, but not more than 30 days, prior to the date of the hearing.' An authority making a transfer under this authority must provide a copy of the spending plan approved and signed by the municipality to the Office of the State Auditor.10 Plans should be emailed to TIF@osa.state.mn.us as soon as possible after their approval. Parameters and Limitations The authority to transfer increments under this provision expires on December 31, 2022.11 Amounts being transferred under this provision must be transferred from the fund or account in which tax increments are segregated and into a separate fund or account by December 31, 2022. Amounts must not be expended directly from the transferring TIF fund or account, and may not be spent after December 31, 2022, if they remain in the TIF district's fund or account at that time.'2 All transfers must be spent by December 31, 2025.13 5 Id. 6 Minn.Stat.§469.176,subd.4n(c). Id. 8 Id. A city's housing and redevelopment authority or economic development authority,for example, may be the development authority while the city itself is the municipality. 9 Id. 10 Minn.Stat.§469.176,subd.4n(e). 11 Minn.Stat.§469.176,subd.4n(f). 12 Minn.Stat.§469.177,subd.5,requires an authority to segregate tax increment received with respect to any district in a special account or accounts on its official books and records. This authority allows transfers out of such accounts as opposed to expenditures from within these accounts. 13 Minn.Stat.§469.176,subd.4n(f). New: August 2021 2 Page 10 of 31 Transfers from a TIF district in calendar years 2021 and 2022 are limited to a maximum transfer equal to the excess of the district's unobligated increment.14 Under the provision, unobligated increment includes any increment not required for payment of obligations due during the six months following the transfer on outstanding bonds, binding contracts, and other outstanding financial obligations of the district to which the district's increment is pledged.15 Therefore, the transfer of increment for 2021 is limited to the eligible balance of tax increment at the end of 2020, less amounts needed to pay bonds, pay-as-you-go notes, and interfund loans due from January 1, 2021, to June 30, 2021. Similarly, the transfer of increment for 2022 is limited to the eligible balance of tax increment at the end of 2021, less amounts needed to pay bonds, pay-as-you-go notes, and interfund loans due from January 1, 2022, to June 30, 2022. Presumably, receipts of tax increment for the first half taxes in each year would be used to make payments on outstanding obligations due in the second half of each year, but note that this authority does not provide any exception to pay those obligations to which tax increment is pledged, and an authority should not transfer amounts that might impair their ability to make payments on those obligations. Increment that is improperly retained, received, spent, or transferred is not eligible for transfer under this authority.16 Therefore,the 2020 and 2021 balances of tax increment should be carefully evaluated prior to making transfers in 2021 and 2022, respectively. For example, excess increment calculated for 2019 that might remain in the TIF fund after it should have been returned by September 30, 2020, would not be eligible for transfer, nor would any subsequent excess increment be eligible for a transfer after it should have been returned. Likewise, if a district receives tax increment after it should have decertified under the Six-Year Rule, such amounts of increment would also not be eligible for transfer. Unspent Transfers Increment not spent by December 31, 2025, must be returned to the fund(s) of the contributing TIF district(s).17 The distribution of returned amounts need not be proportional to the amount contributed, but the amount returned to each TIF district must not exceed the amount transferred from the district. 14 Minn.Stat.§469.176,subd.4n(b). 15/d. Interfund loans are included in the definition of"bonds"in the TIF Act(see Minn.Stat.§469.174,subd.3),so payments on interfund loans should not be foregone to increase a transfer under this authority. 16 Minn.Stat.§469.176,subd.4n(d). 17 Minn.Stat.§469.176,subd.4n(f). New: August 2021 3 Page 11 of 31 CD 0 • Q, N N CD N I (a +—"r 4J lL W z W f! 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Discussion: Budget Impact: N/A ATTACHMENTS: o January 4, 2022 Page 19 of 31 Shakopee Economic Development Authority MINUTES January 4, 2022 SHAKOPEE 7:00 PM City Hall, 485 Gorman St. 1. Roll Call Present: President Jody Brennan, Commissioners Bill Mars, Matt Lehman, Jay Whiting, Angelica Contreras Staff Present: City Administrator Bill Reynolds, Assistant City Administrator Chelsea Petersen, City Attorney Jim Thomson, Finance Director Nate Reinhardt, Planning/Development Director Michael Kerski, City Clerk Lori Hensen, Park/Recreation Director Jay Tobin Staff Present by Video: City Engineer/Public Works Director Steve Lillehaug 2. Approval of Agenda Commissioner Angelica Contreras made a motion to approve the agenda, seconded by Commissioner Jay Whiting and the motion passed. 5 - 0 3. Consent Business Lehman removed 3.C and 3.D. for further discussion. Commissioner Jay Whiting made a motion to approve the consent agenda, seconded by Commissioner Angelica Contreras and the motion passed. 5 - 0 3.A. EDA Minutes 3.B. Decertification of TIF No. 16 Rahr Expansion 3.C. Interfund Loan Resolution - Gravel Pit Site Commissioner Angelica Contreras made a motion to adopt Resolution No. E2022- 003 to allow for an interfund loan for advance of certain costs in connection with a potential future tax increment financing district, seconded by Commissioner Jay Whiting and the motion passed. 4 - 1 Page 2m6231 3.D. Interfund Loan Resolution - Workforce Center Commissioner William Mars made a motion to adopt Resolution No. E2022-002, approving an interfund loan for advance of certain costs in connection with Tax Increment Financing District No. 18, seconded by Commissioner Jay Whiting and the motion passed. 4 - 1 4. Reports 4.A. EDA Bill List 5. Adjourn to Tuesday, February 1, 2022 at 7:00 pm Commissioner Angelica Contreras made a motion to adjourn to Tuesday, February 1, 2022 at 7:00 pm, seconded by Commissioner Jay Whiting and the motion passed5 - 0 Page 2 bbQ31 4.A. PalaAl SHAKOPEE Shakopee Economic Development Authority February 2, 2022 FROM: Michael Kerski, Planning/Development Director TO: President and Commissioners Subject: Report on our entrepreneur development program and update on the Regional Hub. Policy/Action Requested: Accept report and continue contract with Momenteum through the end of 2022 for an amount of$65,000 and not to exceed $12,000 in expenses. Recommendation: Motion to accept report and continue contract with Momenteum through the end of 2022 for an amount of$65,000 and not to exceed $12,000 in expenses to be paid out of Coronavirus Local Fiscal Recovery Funds . Discussion: The E DA retained Momenteum in 2021 to grow our entrepreneurial network paid for out of federal Coronavirus Local Fiscal Recovery Funds. Since that time, they have met with a large number of entrepreneurs and conducted in-depth interviews with our growing group of members. Through these interviews and surveys they have identified needs to grow this base in Shakopee and Scott County. These have included additional capital support, assistance to founders with management, search engine optimization, marketing, and intellectual property protection. They are working on a schedule of workshops through the year to address these issues. The group of entrepreneurs has also identified issues they are having in our community, the largest is finding available space. Staff is working with a number of sources to better identify space and to work with developers to construct new space or renovate existing buildings to meet their needs. This group and Momenteum have reviewed the application to the Economic Development Administration and suggested changes and identified that there is a need for a hard-tech hub. This is for companies that actually create/manufacture new products. That is in synch with Page 22 of 31 what we have observed with many companies that are in the region, especially in Shakopee with companies like Entrust, Emerson, Cherne and Shutterfly. As part of that process, we have had several meeting with Minnesota State University and they have amended their agreement through 2023 and also have agreed to offer programs specialized towards hard- tech. The have agreed to offer their start-up boot-camp program in Shakopee. Local employers and the entrepreneurs have all agreed that finding and hiring employees now is very difficult. Momenteum connected the city with a company with leading edge technology that actually goes to employer's web sites and gathers job to one location so that potential applicants can see jobs that are appropriate to their skills. More than 200 cities worldwide have implemented this tool for talent attraction. Budget Impact: To be paid out of Coronavirus Local Fiscal Recovery Funds ATTACHMENTS: o Report Page 23 of 31 Plibill SHAKOPEE INNOVATION KICKSTART PROJECT UPDATE : JUNE 2021 - JANUARY 2022 Momenteum Strategies, LLC January 21,2022 moliENTEum STRATEGIES EXECUTIVE SUMMARY The Shakopee Innovation Kickstart Project had as its core objectives: • Opportunity Assessment - research and inventory the innovation assets in the area and determine if the City of Shakopee and the larger region could benefit from a focus on innovation and entrepreneurship as an economic development strategy • Entrepreneur Network - identify and connect with top entrepreneurs in the region and launch a new founder community to support their companies' growth and hear common needs • Ecosystem Projects - determine key support gaps with allies and launch community efforts to address collaboratively • Community Marketing - provide external best practice examples of promoting innovation successes and help guide marketing efforts for maximum effect OPPORTUNITY ASSESSMENT To assess the innovation situation, Momenteum Strategies worked with city staff to research innovation assets and entrepreneur leaders in the City and surrounding communities leading to 11 different meetings with five different economic development allies, three industry leaders, and 12 entrepreneurs. Those discussions indicated a strong need for entrepreneur support efforts in the area south of the Twin Cities, with Shakopee as the hub. In the past the existing effort was by the CDA with the Scott County Fast Track program. Previously they offered startup-friendly office space in Prior Lake under the Technology Village banner, which has since relocated to the Dean Lakes Education Center campus in Shakopee and they created the Center for Entrepreneurship and NextStage for Entrepreneurs, and now have 12 offices available. Momenteum Strategies and City staff have engaged with Scott County staff to support these efforts and they are to be applauded. The city's current program has a number of rapidly growing companies that have benefited from a thriving entrepreneur network and additional ecosystem elements like access to capital and ad hoc support services that we identified by the entrepreneurs that we have engaged. Thus assessment concluded that Shakopee could benefit significantly from launching an economic development effort to support innovation and high-impact entrepreneurship and becoming the hub for innovative companies and startups for the multi-county area south of the Twin Cities. Implementing a lean but strategic effort would generate direct economic benefits to the City including the creation of new jobs, capital investment, and wealth creation along with other indirect but important benefits like attracting talent and fostering greater industrial expansion. Page 25 of 31 11011ENTEUM STRATEGI F ENTREPRENEUR NETWORK Core to a successful entrepreneur development strategy is the creation of an engaged, diverse entrepreneur network that identifies high-impact entrepreneurs of all types and connects them with supporting community support services and most importantly, with one another. The project has been very successful in identifying top entrepreneurs and energizing them to engage with the city's program. From zero entrepreneurs in June 2021, the project now has 12 high-impact entrepreneurs (with almost 100 full-time employees) engaging on a monthly basis via a monthly peer meeting at Shakopee City Hall and through ad hoc support services provided by Momenteum Strategies and city staff. Company Founder(s) Description Rollerblade innovator& Shark Tank 1 SkyRide Scott Olson participant with new ride company Paraplegic founder launching his third 2 MedThera Alan Tholkes medical device company Wolftooth Components Fast growing cycling company with over 60 3 & Otso Bikes Dan Dittmer employees 4 IT Audit Labs Eric Brown Fractional CTO Company 5 7 Minute Security Brian Johnson Data Security Company 6 Ion Concert Media Scott Winters Entertainment Technology Company Former Life Time Inc leader launching a 7 Joni() Ken Zylsta new automobile service company Charlie Pehrson & Corey 8 Steel Head Outdoors Meyer Modular gun safe manufacturer 9 REMasteredSleep Anders Olmanson Medical device water bottle company Serial entrepreneur growing his fourth boat 10 Anthem Marine Mark Overbye design & manufacturing company Mockenhaupt Data security and augmented reality 11 Technologies Paul Mockenhaupt software companies Momenteum Strategies and city staff continue working to locate and engage women and minority entrepreneurs in the region to add diversity to the network but those efforts have not succeeded to date. This is a major priority in 2022 as the network continues to grow. Page 26 of 31 MOIMNTEUM STRATEGIES In the first six months of convening the group, participation has grown steadily and the connections made have already benefited the companies in tangible ways including, for instance, one entrepreneur finding a new marketing agency through the network and two others meeting regularly to evaluate partnering on key initiatives going forward. Momenteum has also been advising one of the companies on recruiting a possible CEO to grow the company. Presentations to date have included marketing and search engine optimization, how to find appropriate capital resources and one of the entrepreneurs explaining the many years it can take to achieve success and obstacles on the road to success. Upcoming meetings will address Intellectual property, trademarks and patents and selling for success. One of the issues that has been identified by the entrepreneur group is the lack of available scalable space in Shakopee and Scott County. These startup companies need 10,000 square feet and can grow into more over time. Several have made offers on spaces only to be substantially outbid by other companies. Most of the newer buildings under construction are being marketed to large, single users. Staff is working with an international REIT to explore constructing smaller, expandable space. One of the other takeaways from this process is that many of the regional companies are in the hard-tech space as are many of the entrepreneurs that have come into the group. Hard-tech is being recognized nationally as one of the critical elements for the US, highlighted by the recent parts shortages and rapidly increasing prices for materials and delivery times. There are only two centers for hard-tech in the US, both located on the east coast. Shakopee and the region are well positioned to become a hard-tech hub for the midwest region. ECOSYSTEM PROJECTS In addition to building the entrepreneur network, the project identified several strategic projects that, if completed successfully, would greatly enhance the innovation ecosystem in the City of Shakopee and the surrounding communities. They are: • SMSC Engagement - Momenteum Strategies and city staff have met with SMSC staff five times since the work began to share with them the innovation work being undertaken and explore potential areas of interest and engagement. Several topics have been discussed and explored to date including business startups and angel investing. Momenteum Strategies engaged a national angel investment leader and the Angel Capital Association (ACA) to provide insights on how the SMSC could learn more about angel investments. The city was invited by ACA to join their network and has provided access to a variety of educational resources on the matter via a community membership with the ACA. In February 2022, a mock pitch event will be held with SMSC leadership and a local startup company to help illustrate angel investments. Page 27 of 31 MOIAENTEUM STRATEGIES • The HUB -The EDA grant application was completed with assistance from Momenteum Strategies for the new Hub innovation facility proposed for downtown Shakopee. The property will be the only such facility in the multi-county area surrounding Shakopee for innovation-based companies, especially manufacturers to gather and operate their early-stage companies. The facility also plans to host entrepreneur education programs by Minnesota State University and other startup support resources. City staff has extended the Memorandum of Understanding with Minnesota State through the end of 2023. • Beer & Innovation Event -An opportunity was identified by Momenteum Strategies and city staff to potentially work with Rahr Malting to create an innovation-centric beer event in partnership that connects with local entrepreneurs and attracts new founders, investors, etc. to the City. The goal is to create a pilot event in September 2022. Initial discussions with Rahr are taking place to begin detailed planning. • Talent Attraction - Momenteum Strategies assisted City staff in creating tools for attracting and retaining critical talent for it's growing companies. The need to attract talent has been identified by existing companies along with our entrepreneur group. We have provided staff with a best-practice model for promoting open jobs in the community using a new technology for "scraping"job postings into one easy-to-use job board that the city can market to residents along with those looking at potentially relocating to the area. Staff met virtually with the technology company's leadership to help understand the opportunity and how to implement a job board for Shakopee. The site should be active in the first quarter of 2022. COMMUNITY MARKETING Momenteum Strategies provided numerous best-practice examples of community marketing to city staff as they developed the City's first program to promote the Shakopee innovation successes to companies outside the area. The examples were used to finalize the City's positioning and campaign design that was launched in the Business Journal and local magazines. The Make it in Shakopee ads generated one of the highest click through rate for 2021 and staff is working with the Business Journal on a marketing campaign for the summer of 2022. Page 28 of 31 5.A. PliaigiAll SHAKOPEE E Shakopee Economic Development Authority February 2, 2022 FROM: Nate Reinhardt, Finance Director TO: EDA Commission Members Subject: EDA Bill List Policy/Action Requested: None Recommendation: Informational Only Discussion: Attached is a listing of bills for the EDA for the period 1/5/2022 to 2/2/2022. Payments are for general office supplies, attorney & professional service fees. • Shakopee Chamber of Commerce; Main Street 2022 first half contribution. $12,500.00 • Minneapolis Business Journal: Entrepreneurial Marking advertising. $6,793.55 Budget Impact: N/A ATTACHMENTS: o Monthly Financial Report D EDA Check Register Page 29 of 31 „� CT 0) M v 4 O 1- rr a) t u Q c0 a CL a en c'> • ri M Lo N N N N _.0t4 re;‘ ao N 0C O g O .. 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