8.0. EDSR 03-10-2003 - Laserfiche WebLink

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Preliminary Report on Analysis of Industrial Park Options March 10,2003 EDA Meeting Page 2 of 3 • Elk Path Business Center, Stewart Wilson Mayor Klinzing • Elk River Business Park, Richard Martens Councilman Tviete • Cascade Industrial Park,Bill Christian Councilman Tviete Analysis of Strategies for Working with Landowners or City-Owned Industrial Park Staff has been working with the city's finance advisor, Sid Inman of Ehlers &Associates on the market and financial analysis of the two different strategies. Mr. Inman will be present at the EDA meeting to discuss the preliminary findings as listed in this memo. Staff is awaiting written response from the developers, Opus Northwest and Ryan Companies,who were asked to provide an analysis on what the market can afford to pay for industrial land. Staff will follow up with a final report in the next few months. Preliminary Findings Industrial siting decisions are based on the following factors: o Location • Proximity to employees • Access to transportation • o Cost of Land • Determined by the "All-In" cost for development-ready site,including price for raw land,water, sewer and access road) o Cost of Construction • Metro-area brokers and developers have extensive knowledge of industrial sites, and have indicated that expensive marketing/advertising campaigns have little to no impact on a manufacturer's decision where to locate. • Elk River's competition continues to be adjacent cities with inexpensive land and lower building standards. These communities have large tracts of land that will take significant time to absorb in the marketplace, and therefore these communities will continue to be in competition for Elk River's industrial clients. These communities are being successful in attracting industrial development over Elk River for two primary reasons: providing"free" land and the availability of appropriately sized parcels. These reasons are evidenced in the attached 2002 Prospect/Inquiry Summary Report. • If the City/EDA want to develop their own industrial park, then the city needs to be prepared to accept the financial risk and to competitive to proceed. Doing nothing will mean that the City waits for the industrial development to be able to afford the asking price and also it is likely that Elk River will risk losing a share of it's existing industrial base to communities that can accommodate the client's expansion requirements. • • There continues to be a tension between the city's building standards and the industrial client's profit.