3.1. EDA DRAFT MINUTES (2 SETS) 08-20-2018

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Economic Development Authority Minutes Page 3 July 16, 2018 ----------------------------- Ms. Othoudt reviewed the purpose of the program is to fill retail and commercial spaces with businesses that are currently operating out of their home by subsidizing a portion of their initial rent. She asked the committee if they wished to add $9,900 for one project to the 2019 budget. She suggested establishing a pilot program to see if it was effective. President Tveite liked the concept and thought it was a win-win for the city. Commissioner Wagner asked if the benefit was worth the amount of effort to launch the program. Does the City of Elk River have a lot of empty retail spaces they are looking to fill? Why are they empty? Is it because of zoning or other issues? She would like more information on what the open spaces are. The $9,900 is only part of the cost, staff time would also need to be considered. The applicants are also required to take classes. Does the business incubator program meet the goals of the EDA? Ms. Othoudt said there are currently about 30 available retail spaces available. The pilot may help to show if the demand is there. The biggest goal of the program would be to help business establish. Commissioner Wagner wanted to know what is currently stopping businesses from moving out of their garage or going into a retail space. Is the rent the issue? Commissioner Blesener said that years ago there was an incubator program. How does the proposed program differ? Ms. Othoudt explained that the past incubator program was investor led. Commissioner Blesener asked if the EDA should promote entrepreneurs attending the proposed classes. He believes one of the greatest reasons new businesses fail is due to poor business plans. President Tveite stated the pilot may answer some of their questions. Is paying rent for six months for a new business enough of a boost to scale up their business? It is also important to determine how to effectively market the program. It could be another tool for the EDA to target different customers. Commissioner Ovall agreed with Commissioner Wagner on whether the return on investment equaled the work involved. If we have many initiatives it is a lot more to maintain and the message may become fragmented. He liked the idea but feels the EDA needs to spend more time on determining the benefits and how to convey the message in a succinct and tangible way. President Tveite agreed it may add more to staff’s “plate” and questioned if “the juice was worth the squeeze”.