04172023 EDA AgendaECONOMIC DEVELOPMENT AUTHORITY MEETING
RICHFIELD MUNICIPAL CENTER, COUNCIL CHAMBERS
APRIL 17, 2023
7:15 PM (IMMEDIATELY FOLLOWING THE HRA MEETING)
Call to Order
Open Forum
Each speaker is to keep their comment period to three minutes to allow sufficient time for others. Comments
are to be an opportunity to address the EDA. Please refer to the EDA agenda and minutes web page for
additional ways to submit comments. You may also call 612-861-9764 or email ldubois@richfieldmn.gov with
questions. Call into the open forum by dialing 1-415-655-0001 Use webinar access code: 2458 567 4685 and
password: 1234.
Appr oval of t he M inut es
Approval of the minutes of the Regular Economic Development Authority meeting of March 20, 2023.
AGENDA APPROVAL
1.Approval of the Agenda
2.Consent Calendar contains several separate items which are acted upon by the EDA in one motion.
Once the Consent Calendar has been approved, the individual items and recommended actions have
also been approved. No further EDA action on these items is necessary. However, any EDA
Commissioner may request that an item be removed from the Consent Calendar and placed on the
regular agenda for EDA discussion and action. All items listed on the Consent Calendar are
recommended for approval.
A.Consider acceptance of the attached report titled: Richfield Business Assistance Analysis &
Recommendations.
Staff Report No. 4
3.Consideration of items, if any, removed from Consent Calendar
OTHER BUSINESS
4.Consideration of the approval of revisions to the Transformation Loan Program Guidelines.
Staff Report No. 5
EDA DISCUSSION ITEMS
5.EDA Discussion Items
EXECUTIVE DIRECTOR REPORT
6.Executive Director's Report
C LAIMS AN D PAYR O L LS
7.C laims
8.A djournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96
hours in advance to the City Clerk at 612-861-9739.
ECONOMIC DEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
March 20, 2023
CALL TO ORDER
President Vrieze Daniels called the meeting to order at 7:08 p.m. in the Council
Chambers.
HRA Members
Present:
HRA
Members
Absent:
Staff Present:
Others Present:
Erin Vrieze Daniels, President; Mary Supple; Sean Hayford
Oleary, Lee Ohnesorge; and Gordon Hanson
None
Melissa Poehlman, Executive Director; Julie Urban, Assistant
Community Development Director and LaTonia DuBois,
Administrative Assistant.
None
OATH OF OFFICE
Assistant Community Development Director Urban administered the Oath of Office to
Commissioner Hayford Oleary
Assistant Community Development Director Urban administered the Oath of Office to
Commissioner Supple.
ELECTION OF OFFICERS
M/Supple, S/Hayford Oleary to elect Erin Vrieze Daniels as President.
Motion carried 5-0
M/Supple, S/Hayford Oleary to elect Gordon Hanson as Vice President.
Motion carried 5-0
HRA Meeting Minutes -2-March 20, 2023
M/Supple nominated Lee Ohnesorge to serve as treasurer, Commissioner Ohnesorge
declined.
M/Supple, S/Vrieze Daniels to elect Sean Hayford Oleary as Treasurer.
Motion carried 5-0
M/Supple, S/Hayford Oleary to elect City Clerk, Dustin Leslie as Secretary.
Motion carried 5-0
M/Supple, S/Hayford Oleary to elect Finance Director, Kumud Verma as Assistant
Treasurer.
Motion carried 5-0
OPEN FORUM
No callers
APPROVAL OF THE MINUTES
M/Hanson, S/Ohnesorge to approve the minutes of the 1) Regular Economic
Development Authority meeting of December 19, 2022; and 2) the Economic
Development Authority work session of January 17, 2023.
Motion carried: 5-0
ITEM #1 APPROVAL OF THE AGENDA
M/Hayford Oleary, S/Hanson to approve the agenda.
Motion carried: 5-0
ITEM #2 CONSENT CALENDAR
Executive Director Poehlman presented the consent calendar.
M/Supple, S/Hayford Oleary to approve the consent calendar.
Motion carried 5-0
HRA Meeting Minutes -3-March 20, 2023
ITEM #3 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM CONSENT CALENDAR
None
ITEM #4
DESIGNATION OF COMMUNITY DEVELOPMENT DIRECTOR MELISSA
POEHLMAN AS THE EXECUTIVE DIRECTOR OF THE RICHFIELD
ECONOMIC DEVELOPMENT AUTHORITY FOR 2023.
(STAFF REPORT NO. 3)
Executive Director Poehlman presented Staff Report No. 3
M/Supple, S/Hayford Oleary to designate Melissa Poehlman as the Executive Director of
the Richfield Economic Development Authority.
Motion Carried:5-0
ITEM #5 EDA DISCUSSION ITEMS
Commissioner Supple inquired about economic development manager position.
Executive Director Poehlman informed commissioners that the economic development
manager position has been filled and the new economic development manager will start in April.
ITEM #6 EXECUTIVE DIRECTOR REPORT
None
ITEM #7 CLAIMS
M/Hanson, S/Ohnesorge that the following claims be approved:
U.S. BANK 1/16/2023
EDA Checks: 20943 - 20962 $38,046.04
TOTAL $38,046.04
U.S. BANK 2/20/2023
EDA Checks: 20963 - 20987 $87,641.59
TOTAL $87,641.59
HRA Meeting Minutes -4-March 20, 2023
U.S. BANK 3/20/2023
EDA Checks: 20988 - 21004 $12,026.50
TOTAL $12,026.50
Motion carried: 5-0
ITEM #8 ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:18 p.m.
Date Approved: April 17, 2023
Erin Vrieze Daniels
EDA President
LaTonia DuBois Melissa Poehlman
Administrative Assistant Executive Director
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.A.
STAFF REPORT NO. 4
ECONOMIC DEVELOPMENT AUTHORITY
MEETING
4/17/2023
REPORT PREPARED BY: Melissa Poehlman, Executive Director
OTHER DEPARTMENT REVIEW:
EXECUTIVE DIRECTOR REVIEW: Melissa Poehlman, Executive Director
4/7/2023
ITEM FOR COUNCIL CONSIDERATION:
Consider acceptance of the attached report titled: Richfield Business Assistance Analysis &
Recommendations.
EXECUTIVE SUMMARY:
In August of 2022, the Economic Development Authority (EDA) contracted with John Stark of Enduring
Cities to complete an evaluation of Richfield's previous and current economic development services, as well
as recommendations for the future. A preliminary discussion with the EDA was held on January 9, 2023; the
final report and recommendations were discussed at a work session earlier this evening.
Staff recommends that the EDA formally accept the final report and in doing so recommend that staff use this
document as a foundation for the creation and expansion of services to our local small business community.
RECOMMENDED ACTION:
By motion: Accept the attached Richfield Business Assistance Analysis & Recommendation Report.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
The Richfield EDA was founded in 2018, in part to provide programming for business
development. Prior to the creation of the EDA, there was no reliable funding source for
programming to assist our local businesses.
The Covid-19 pandemic halted the proposed launch of some limited programming as staff pivoted
to assist our hardest-hit businesses using federal dollars.
With the waning pandemic and increased focus on a diversified tax base and vibrant downtown
(2023-2026 Strategic Plan), the Housing and Redevelopment Authority (HRA) and EDA approved
budgets that included a new Economic Development Manager position to focus on Richfield's
business community needs.
B.POLICIES (resolutions, ordinances, regulations, statutes, etc):
This project generally affirmed the City's Comprehensive Plan and Zoning District designations
for properties in the Portland Gateway area.
The short duration of a Legacy Project is intended to begin the exploration of creative solutions,
rather than produce adoption-ready policy.
C.CRITICAL TIMING ISSUES:
None
D.F IN AN C IAL IMPAC T:
The financial impacts of individual programs will be discussed as programming is proposed.
E.L E GAL C ON S ID E R AT ION:
None.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not accept the report.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
None
AT TAC H ME N T S:
D escription Type
B usiness A ssistance E valuation - F inal E xhibit
Richfield Business Assistance Analysis & Recommendations
March 30, 2023
Prepared by:
John Stark, Owner/President
Enduring Cities, LLC
In collaboration with:
Melissa Poehlman, AICP
Community Development Director &
Economic Development Authority Executive Director
City of Richfield/Richfield EDA
And the:
Economic Development Authority of the City of Richfield
Table of Contents
Cover Letter
Introduction and Executive Summary: 2 pages
Section 1: Background & Purpose of this Analysis
page 1.1
Section 2: Current and Past Business Assistance Programming in Richfield
pages 2.1 – 2.3
Section 3: Richfield EDA Funding for Business Assistance
Page 3.1
Section 4: Types of Business Assistance Programs (including “Best Practices” from Peer Cities)
pages 4.1 – 4.15
Section 5: Community Input
pages 5.1 – 5.4
Section 6: Next Steps (Desired Outcomes & Options)
pages 6.1 – 6.5
Appendix A: Peer City Business Assistance Programs (pages A.1 – A.6)
Appendix B: Business Survey Results (pages B.1 – B.3)
Appendix C: Richfield EDA Work Session Meeting Minutes (pages C.1 – C.3)
Appendix D: Small Business Advisory Forum Meeting Summary/Notes (pages D.1 – D.2)
Appendix E: External Service and/or Funding Providers (pages E.1 – E.4)
Introduction and Executive Summary
There is no short supply of studies and articles that demonstrate the importance of small
businesses to our economy; both the large-scale national economy and that of a community
like Richfield. According to the U.S. Census, 89% of all companies in the United States employ
20 or fewer employees. Companies of that size added 1.1 million jobs to the national
workforce in 2019 alone. Businesses like Nike and Apple and, in the case of Richfield, Erik’s
Bikes, literally grew out of individual’s garages.
The City of Richfield understands the importance of small businesses to its local vitality,
attractiveness and economy. To better support small businesses in the community, Richfield
created its Economic Development Authority (EDA) in 2017. While the EDA also recognizes
investment in housing and families as important to the community, it directs about 20% of its
spending toward Business Assistance programming. As evidence of the importance it places on
Economic Development, the EDA commissioned an Analysis of its Business Assistance
programming. This is a brief summary of that Analysis.
When compared with 18 of its “peer cities,” not surprisingly, Richfield is providing more
Business Assistance services than most of its smaller counterparts but less than larger
communities. The recent trends amongst other cities in the Twin Cities region are to:
• Provide physical space for office, retail and limited light manufacturing;
• Provide loans and grants for small businesses beyond the level that Richfield has, and;
• Offer increasing support of diversity, equity and inclusion in the small business
environment.
The process of conducting this Analysis also included input from local businesses in the form of
a Business Survey, a Small Business Advisory Forum and communications with various business
associations and with the EDA Board of Commissioners. A common fear amongst all groups is
that the recent successes in redevelopment may be resulting in the elimination of some
affordable commercial spaces and raising the rents in others. The businesses also articulated
their desire for financial assistance to make interior improvements (typically in leased space)
and they see an opportunity for the City to do a better job of communicating with, and about,
members of its business community. The group also expressed a great deal of support for the
technical assistance offered to entrepreneurs by programs like Elevate Hennepin.
Since its inception in 2017, the EDA has budgeted an average of $88,060 for Business Assistance
programming. The 2023 Budget includes $93,580 for such programs. The EDA also has a relatively
large fund balance which was accrued for the expressed purpose of having enough funds to
adequately program Business Assistance activities. The Analysis recommends spending a portion
of the fund balance to provide the resources needed to create some new programming. This year
also sees the creation of the Economic Development Manager position in the City’s ranks; this
position is intended to provide increased attention to Richfield’s small business community.
Executive Summary- 1
The Analysis includes recommendations on the EDA’s Business Assistance programming going
forward. Among those recommendations are to:
• Cease some existing/planned programs or defer them until the need dictates their
implementation (including the Displaced Business Grant and the Revolving Loan Fund);
• Continue one small program as-is (the Bike Rack Cost Sharing Program);
• Continue to retain a portion of the EDA fund balance for the occasional “big
opportunity,” that may be hard to predict;
• The continuation of a few programs with minor changes to their budgets, processes or
staffing (including the Energy Efficient Business Grant and the technical advisory services
made available to small businesses);
• The creation of new programs intended to:
o Offset increasing commercial lease rates in newer buildings that are the result of
an improved local economy;
o Provide funding for improvements to both the exterior and interior of older
commercial buildings;
o Offer business associations serving Richfield an opportunity to apply for annual
EDA grant funding to help them better serve local businesses;
• Further evaluation of home-based businesses in Richfield in an effort to better understand
their role in the community and support the ways in which they have a positive impact
while mitigating any associated negatives. This could potentially include the support of
co-work space to offer some home-based businesses a low-cost alternative.
• Increase and improve communications and social-media that is specific to Richfield’s
small businesses;
• Nurture and maintain relationships with business associations, service providers and
potential funders in the region and state.
• Have economic development programs and policies that align with the City’s desire to
create a more diverse, equitable and inclusive community.
This Analysis is meant to be a fluid, rather than a static, document. The process of evaluating
EDA Business Assistance practices and programs should be an ongoing one.
Some next steps will likely include; policy/process revisions to existing programs; the creation
of new programs to meet the needs identified by local businesses; the creation of a
communications plan related to Richfield’s small businesses and several budget revisions to
accommodate these actions.
Executive Summary- 2
Section 1: Background and Purpose of this Analysis
The Richfield Economic Development Authority (EDA) was founded in 2017. Part of its mission
was to provide economic assistance related to housing, as housing represents the largest
economic cost to most residents and homeownership often represents the largest investment
held by many residents.
A further facet of the EDA’s mission, however, has been to provide assistance to businesses in
the community. During its first couple of years as a functioning Commission, the EDA made the
conscious decision to minimally fund Business Assistance activities in order to build up a
funding base from which to administer programs. The emergence of the Covid-19 pandemic in
the Spring of 2020 created unanticipated needs in the business community. To meet these
needs, the EDA provided $247,850 in funding to 55 businesses impacted by the pandemic. This
resulted in the delay of the EDA implementing new business assistance programming.
With the impacts of the pandemic waning, the EDA is now in a position to evaluate its existing
Business Assistance programming and to consider new programs. The purpose of this analysis
is to provide the EDA and its staff with:
• A review of the EDA’s funding capacity for Business Assistance programming;
• A review and analysis of Business Assistance programs the City and EDA are currently
offering or had offered in the recent past;
• The types of Business Assistance programs that are offered in other communities;
especially those that can be considered, “best practices;”
• Third-party resources that could be beneficial to Richfield’s business community;
• Feedback from Richfield businesses, and organizations that represent them, on the best
ways that the City and EDA could support them and their needs;
• Recommendations and choices for Business Assistance activities and programs that are
consistent with the EDA’s financial capacity.
Section 1 - 1
Section 2: Current Business Assistance Programming in Richfield
In January 2020, the EDA authorized the creation of two Business Assistance programs:
1) Energy Efficient Business Grant
This Grant provides an incentive for Richfield businesses to invest in energy efficient
upgrades to their lighting, refrigeration or rooftop HVAC. The purpose of the program is
threefold: to provide assistance to Richfield businesses, to leverage private investment in
property improvements and to contribute to carbon emission reduction in the community.
Businesses are reimbursed for up to $2,500 of their out-of-pocket expenses for making
these energy improvements. This program was designed to operate in conjunction with
other funding provided by utility companies. The EDA has contracted with the Center for
Energy and Environment to administer this program at no cost to the EDA.
The utilization of this program has been as follows:
2020 2021 2022 (YTD) 2023
EDA Program Budget $20,000 $20,000 $20,000 $20,000
Marketing Budget $1,575 $1,500 $1,500 $1,500
Grants Recipients 12 14 11
Total Awarded $18,810 $20,000 15,524.90
Award per Grant $1,575 $1,429 $1,390
Since 2020, over $54,000 in grant funds have been awarded to 37 business entities. The
following is a summary of the types of business organizations that have been assisted
through this program:
Type of Business Total %
Nonprofit Organizations (church, school) $17,418.94 32.06%
Multi-Family Housing $10,286.46 18.93%
Hospitality (hotel & restaurant) $7,936.79 14.61%
Auto Related $6,671.15 12.28%
Medical & Professional Services $5,103.25 9.39%
Retail $4,472.20 8.23%
Other $2,446.11 4.50%
It should be noted that 51% of the funds have gone to non-profit organizations and
multi-family housing developments and less than half to for-profit businesses.
In large part owing to the fact that this program is administered externally (by CEE) and
leverages private investment by both the entities making the improvements and
additional funding from the utility companies, it represents “a lot of bang for the buck.”
Section 2 - 1
2) Revolving Loan Fund
The EDA authorized this program to provide matching loan proceeds up to $15,000 to
small businesses meeting certain criteria. The 2020 total budget amount of $60,000
would have funded 4 to 12 loans of $5,00 to $15,000 each. The Minnesota Consortium
of Community Developers (MCCD) had planned to administer this program at no cost to
the EDA (their compensation would have come from Loan Origination Fees and ongoing
loan processing fees).
The EDA voted to place this program on hold prior to the issuance of any loans in March
2020. This was done in order to redirect the funds to an emergency small business
forgivable loan to businesses suffering as a result of the COVID pandemic.
In December 2020, an additional Business Assistance program was adopted by the EDA:
3) Displaced Business Grant
This grant provides up to $3,600 for any business that is forced to relocate due to
redevelopment activities that receive funding from the City or any of its associated
entities.
In 2021 four businesses were awarded Displaced Business Grants in a cumulative
amount of $13,620 (an average of $3,405 per grant). In 2022 and 2023, EDA staff did
not foresee the displacement of many businesses, so the budgeted funds were reduced
to $7,200 year; which would be enough for two businesses to each receive full funding.
The EDA’s Forgivable Loan program related to the COVID pandemic was very quickly
established (within weeks of the Federal Government’s declaration of an emergency in March
2020) and was very active throughout the remainder of 2020. By the end of that year, 55
Richfield small-businesses received loans totaling $247,850 (or $3,934 per business). All of
these loans have since been forgiven.
The loans were made available to businesses employing up to 25 people in any industry except
those who primarily sold merchandise relating to: pawned merchandise, guns, tobacco and
vaping. The data collected on the recipients of these loans may provide further information on
the types of businesses in need of assistance; that data included:
• 71% of the loans were to businesses with a traditional commercial space, while 29%
went to home-based businesses;
• 56% were women-owned businesses;
• 32% were to minority-owned businesses;
• 40% were sole proprietorships;
• The 60% with employees averaged 7.4 Full-time equivalent employees.
Section 2 - 2
In addition to the programs adopted in 2020, current Business Assistance in Richfield also
includes:
4) Open to Business. Richfield has been participating in the Open to Business program for
more than ten years. This program is administered by the Minnesota Consortium of
Community Developers (MCCD). Open to Business program offers free, one-on-one,
confidential business consulting to help entrepreneurs in member cities through the
process of growing or starting their businesses. Their advisors offer free, confidential
business consulting & lending options.
The cost to participate is $6,250 per year. In the past, this cost was offset by a matching
grant from Hennepin County, but the County will likely discontinue that grant program
in the near future in order to focus resources on their Elevate Hennepin program.
Prior to the pandemic, an Open to Business representative had monthly office hours at
Richfield’s Municipal Center, but those services have since ceased. Over the past few years,
long-time leaders at MCCD have retired or left for different positions. During that time,
there seems to be general consensus that the level of service in the program has declined.
5) Bike Rack Cost Sharing. In 2017 the City of Richfield received a $4,000 grant from the
Minnesota Statewide Health Improvement Program (SHIP) for its Bike Rack Cost Sharing
Program. In this program, the City pays half the cost (up to $500) for a commercial-grade bike
rack at a business location. To date, seven business locations have installed racks
accommodating a total of 23 bicycles. This is an ongoing, albeit minimally marketed program.
About half of the grant (49%) has been expended. Based on historic costs, at least four
additional businesses and as many as eight, could benefit from this program in the future.
Past Business Assistance Programming
Prior to the creation of the EDA, the City had a few previous Business Assistance programs,
these included:
o A small business Liaison who helped businesses navigate the planning/zoning and
building permit processes. This position was eliminated due to budget constraints and
improvements to the permitting process in 2015.
o Façade Improvement Grant: The City received a $50,000 grant from Hennepin County
through their Business Districts Initiatives program in 2018 for the issuance of “Façade
Improvement Grants” in the Penn Corridor Area. Only $16,480 in grants were awarded
however. City staff’s historical knowledge of this program is that there were a limited
percentage of operating businesses in the Penn Corridor that owned the building in
which they were located and that such businesses were reluctant to cost-participate in
improvements to property which they did not own. A relatively few cases existed in
which the ownership of the business and the building coincided. Once many of these
instances were funded, interest in the program dwindled.
Section 2 - 3
Section 3: Richfield EDA Funding for Business Assistance
During the EDA’s first two years of operations with funding (2018 and 2019), the Authority’s
Commissioners decided to minimally fund business assistance activities so that incoming
revenues (primarily from a tax levy) could be accumulated in order to have enough money to
sufficiently fund any programs that it was to create. The funding that was budgeted for
Business Assistance specifically for the purpose of placing in “reserve” was $75,000 in 2018 and
$95,000 in 2019.
Since its inception in 2017, the Richfield EDA has dedicated funding from its budget for Business
Assistance activities; this funding in the initially adopted budget for these years included:
2018 2019 2020 2021 2022
$80,640 $100,640 $96,260 $146,890* $103,580
* the 2021 budget was higher in anticipation of a number of displaced businesses
In 2023, the budget for Business Assistance programs by the Richfield EDA was approved at
$93,580, which is allocated as follows:
Program 2023 Budget
Small Business Revolving Loan $57,800
Energy Efficiency Business Grant $21,500
Displaced Business Grant $ 7,200
Open to Business $ 6,440
Memberships in Business Associations $ 640
Total $93,580
The budget also contemplates more staff time being spent in “EDA Administration” in 2023 (an
11% increase in budgeted staff time over 2022); much of this extra time is expected to be
devoted to Business Assistance activities.
The Richfield EDA administers several programs in addition to Business Assistance; these
programs include: an Apartment Remodeling Loan, Transformation Home Loans and the award-
winning Kids@Home program. The total EDA budget for 2023 is $594,590. Excluding staffing,
Business Assistance absorbs about 20% of the EDA’s annual budget.
In addition to the annually allocated expenditures, the EDA had a “fund balance” of $984,770 at
the beginning of 2023. It is “best practice” for a public agency to retain 35-40% of its annual
budget in reserves. In the case of the EDA, a reserve of 40% would equal approximately
$238,000. This leaves an “available” EDA fund balance of $746,770.
Section 3 - 1
Section 4: Types of Business Assistance Programs
The reasons why Cities have historically provided Business Assistance programming includes:
• Aligning business creation and growth with greater community goals;
• Increasing tax base;
• Providing & retaining good paying jobs for residents;
• Providing goods & services desired by current and/or prospective residents (vibrancy &
vitality);
• Ensuring upkeep & appearances of businesses (often geographically targeted);
• Leadership development (emerging entrepreneurs of today are leaders of tomorrow);
• Expanding economic inclusion of underrepresented communities and make sure goods
and services are provided equitably, and;
• Capitalizing on an opportunity to meet other goals (environmental sustainability,
provide for unique community needs such as aging, tourism, etc.).
An analysis of Twin Cities suburban Business Assistance initiatives finds that such programs
generally fall under one of the following categories:
• Entrepreneurial Start-up Assistance
• Development Fee Reductions and Deferrals
• Job Creation and Workforce Development Programs
• Programs to Encourage Diversity, Equity and Inclusivity in the Business Environment
• Capital Improvement (especially façade) Grants or Forgivable Loans
• Operating Loans
• Environmental/Energy Efficiency Grants & Loans
• Business Retention & Expansion
The appendices to this report include a chart and a description of how Richfield’s peer
communities provide Business Assistance programs. A peer community is defined as a Twin Cities
suburb with a population of greater than 15,000 people and is either a first-ring suburb or a
second-ring suburb with a high proportion of its development being over 50 years old (pre-1973).
A summary of each of these types of programs and an example of one or two communities that
seem to provide that service exceptionally well follows.
Entrepreneurial Start-up Assistance
A newly forming business typically needs both technical and financial assistance. As this
technical assistance is quite specialized, none of the suburban communities evaluated provided
these services themselves. Instead, they rely of external partners to assist start-up businesses
with their needs. “Elevate Hennepin” “Open to Business,” are the two most commonly utilized
external programs.
Section 4 - 1
Elevate Hennepin
Hennepin County launched the Elevate Hennepin program in December 2020 (titled Elevate
Business HC at that point) amidst a growth surge in start-up businesses. Since that time the
program has grown and evolved. Hennepin County has assembled experts, tools and programs
intentionally “designed to help new and established businesses gain their footing, plan for their
next steps, and take their success to a new level.” To date, over 1,600 Hennepin County based
entrepreneurs have participated in the Elevate Hennepin program, the platform connects
business owners and entrepreneurs to industry experts, capital, and resources during key
points of their entrepreneurial journey.
Elevate Hennepin offers free services for entrepreneurs, including:
• 25 hours of free business assistance from 23 (and growing) advisors in a wide range of
areas including:
• Accounting and bookkeeping
• Finance
• Legal
• Marketing
• Social media & web development
• Human Resources
• Strategic planning
• Loan and grant consulting
• Peer-to-peer roundtables
• Topic-driven webinars and events
• Regional resources, all in one place
While Elevate is available free of charge to any entrepreneur in Hennepin County, Hennepin
County has recently augmented the program with two additional options:
1) Elevate Partnership: For a $5,000 annual cost (for cities of Richfield’s size) this program
provides availability of all Elevate Hennepin advisors, including “Open to Business” advisors
from the Minnesota Consortium of Community Developers (MCCD). Cities participating in
Partnership will also benefit from additional communications and marketing efforts and will
receive monthly or quarterly reporting on outcomes specific to that city.
2) City Navigators: Elevate Hennepin will designate one of their business advisors to serve as
the primary/initial point of contact with businesses in that city. Furthermore, this designated
advisor will serve as a resource to the City staff in matters related to Elevate. The cost to a City
of Richfield’s size is $5,000 per year and is only available to cities who participate in Elevate
Partnership.
Open to Business
All fifteen of Richfield’s peer communities utilize, to a varying degree, the Open to Business
program provided by the Minnesota Consortium of Community Developers (MCCD).
Section 4 - 2
MCCD’s Open to Business program offers free, one-on-one, confidential business consulting to
help entrepreneurs in member cities through the process of growing or starting their
businesses. Their advisors offer free, confidential business consulting & lending options.
Richfield has been participating in the Open to Business program for more than ten years. The
cost to participate is $6,250 per year. Hennepin County had been a driving force behind the
success of Open to Business, as it had offered cities in the County a matching grant to off-set
the cost of participation. As Hennepin County has developed its own Technical Assistance
program (Elevate Hennepin), however, this funding assistance for participation in Open to
Business has been eliminated. Hennepin County, however, continues to consider MCCD, and
their small business technical advisors, to be a worthwhile resource and will be incorporating
the Open to Business advisors into its Elevate Hennepin program.
SCORE
Another great resource that is free to small businesses is SCORE; which utilizes experienced
volunteers to provide one-on-one mentorship opportunities and online and in-person
workshops. SCORE is funded, in part, by the U.S. Small Business Administration and with grant
funds. SCORE does not work directly with cities, but their availability should be noted on the
City’s Business Assistance website at https://www.score.org/twincities.
Business Incubator
Another way to help small businesses start up and develop is to provide them with flexible and
inexpensive (or free) space. This is the purpose of a “business incubator.” Historically, business
incubators in Minnesota were administered and/or primarily funded by much larger cities. In
the post-pandemic business environment, however, four of Richfield’s peer cities are planning
to open incubator space in the next year or two.
- Brooklyn Park -
Brooklyn Park is opening their Small Business Center in 2023. The Small Business Center is
housed in a former fitness center building that was purchased by the Brooklyn Park EDA, as part
of the larger $7.3 million purchase of the Northwinds Plaza shopping center in 2021. It is
located at 7970 Brooklyn Blvd N. and is nearly 27,000 square feet in size.
This Center will provide shared office and other flexible space for up to 60 businesses. These
businesses will have a monthly “membership fee,” as opposed to a lease. This membership fee
will be set at a rate below that of the private market. The goal of the Small Business Center is
to provide an equitable application process which results in the most diverse environment
possible. The Center will contain a mix of office space in a co-working arrangement (described
later) and retail space. While the EDA will continue to own the space, it will be contracting with
the Liberian Business Association (LIBA), who will manage the day-to-day operations of the
Center. The Northwinds shopping center (in which the Center is located) continues to have
lease paying tenants. In the short term, that lease revenue will be subsidizing the operation of
the Small Business Center, but the goal is for the Center to be financially self-sufficient at some
point.
Section 4 - 3
Due to the combination of being incorporated into a larger shopping center and contracting
management to an outside agency, it is difficult to fix a precise budget to this endeavor.
Basically, however, replication would require acquisition of a suitable space, interior build-out
($5.5 million in this case) and an annual operating budget primarily consisting of staffing,
professional services, utilities and insurance.
- Bloomington -
Bloomington is planning on repurposing an approximately 6,600 sq. ft. vacant fire station to
become its new Small Business Development Center (SBDC). The need for the SBDC project
was born out of the work of the City of Bloomington’s Racial Equity Strategic Planning
Committee (RESPC) and reconfirmed by a business survey in which 84% of the surveyors
responded that the creation of a city-led incubator was a good idea. A Small Business Advisory
Committee was formed to provide guidance on the creation of the Center. The development of
a city-led SBDC will be established to achieve the following goals: increase economic mobility
among under-represented groups including BIPOC and women-owned businesses, youth, and
the creative sector (artists); serve as a space for aspiring entrepreneurs by providing
educational and financial resources; repurpose an existing facility; create long-lasting jobs that
will benefit the community; and drive economic growth. The facility is expected to house
approximately 15 businesses (an average of 440 sq. ft. per business).
The needed funding for the project amounts to approximately $2.3 million. Of this, $1.5 million
in grants has already been secured ($500,000 from the City’s American Rescue Plan Act (ARPA)
funds, $450,000 Hennepin County, $300,000 Bloomington Creative Placemaking Commission
and $250,000 from the McKnight Foundation). The intention is that no city tax dollars would be
used to create or operate the SBDC.
- St. Louis Park -
In September 2022, the St. Louis Park EDA acquired an 8,300 square foot retail building at 4300
36th ½ Street West just off Excelsior Boulevard. The vacant building is in good condition and
lends itself to being divided into retail/office spaces for small businesses. Staff is preparing a
Memorandum of Understanding (MOU) with the “Partnership in Property Commercial Land
Trust” under which the parties would agree to work cooperatively to divide the building into
four to seven separate commercial spaces each sized between 750-1,250 sq. ft. The objective is
to sell those spaces to limited income small businesses under a land trust arrangement. Under
such an arrangement, the land trust would retain title to the underlying land and lease it to
individual businesses on a long-term basis. Businesses would purchase (or lease to own) their
spaces in the building which would be made more affordable by taking the land cost out of
their purchase price.
- Brooklyn Center -
Brooklyn Center has a much smaller space with a more focused purpose. Their “shelf space”
incubator is a 3,500 square foot former commercial building at 1350 Shingle Creek Crossing that
was acquired by their EDA. It literally provides “shelf space” for sales of items, particularly
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produce. The space is intended primarily for use by Black, Indigenous and Persons of Color
(BIPOC) business owners as they have been historically underrepresented in the local business
community. The facility is still in its build out phase and has not yet begun hosting businesses.
Private Co-Working Space
In the past decade or two, another type of flexible office space has emerged called “shared
workspace” or “co-working space.” This type of space provides individual office spaces for rent
(in various time increments) that have a shared reception area, printers, meeting rooms, etc.
Some co-work space operates on a “membership” basis, in which varying membership levels
entitle the member to varying hours of utilizing an office space. Others are more of a
traditional monthly rent for an office space (sometimes a cubical or “floating” desk).
In the Twin Cities suburbs, examples of privately-owned co-working space include:
o Getty CoWork Space in White Bear Lake
o OffiCenter in Bloomington, Edina, St. Louis Park and Woodbury
o Olio in Hopkins
o The Reserve in Edina, Roseville and Woodbury
o Regus in Bloomington, Eden Prairie, Edina and Lake Elmo
The coworking space concept that might be the most relevant for Richfield might be Evolve in
West St. Paul. Evolve is a private enterprise that has converted a pre-existing single-story
commercial space into a co-work space offering one-time daily office or meeting room rentals,
“membership” participation and monthly leases.
The nearest co-work facility to Richfield is Greyduck Collective at 6020 Nicollet Ave. S. in
Minneapolis. This is a small facility that has open area memberships for $150 per month and a
single “dedicated desk” for $300 per month.
While there were no examples of this found, it would seem plausible for a public entity to provide
assistance to a private co-working space in order to provide its residents with reduced-cost
access to this type of business environment. A local agency could also provide funding to reduce
the rent for businesses owned by residents or businesses that meet a targeted public goal.
Development Fee Reductions and Deferrals
In the Twin Cities, the Metropolitan Council is responsible for processing wastewater. For this
service, the Met Council charges “Sewer Availability Charges” (SAC’s) to a City (a cost which
cities pass along to developers and builders as part of their fees).
SAC’s are broken up into units. Any time a new sewer connection is made, there is a unit
charged for every 274 gallons of daily wastewater calculated to be generated. This amount is
deemed by the Met Council to reflect the usage of a single-family residence. Also, any time
that the usage for an existing sewer is expanded, there is a calculation to determine whether
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there would be an expected increase in wastewater generation and, if so, one additional credit
is charged for each additional 274 gallons calculated to be generated.
In 2022, the Metropolitan Council charges $2,485 for each SAC unit.
For new commercial businesses, there is the potential for a fairly high number of SAC units.
Some types of businesses have a greater exposure to these fees than others; for example, a hair
salon with multiple hair washing sinks, laundry facilities and bathroom facilities for employees
and customers would generate much more wastewater than a real estate office of the same
square footage.
The Metropolitan Council has a program that allows cities to defer up to 80% of the SAC unit
costs associated with small businesses (generating 25 or fewer SAC units) over a period of up to
ten years. A benefit for this deferral program is that it appears to require no city funding. The
program details can be found at:
https://metrocouncil.org/Wastewater-Water/Publications-And-
Resources/WASTEWATER/SAC-Pubs/SAC-Deferral-Program-Description-and-
Application.aspx
About half of Richfield’s peers offer a deferral of SAC Credit payments. Some accommodate
businesses with a SAC need of up to 25 units, while others focus their deferrals on even smaller
businesses (Bloomington’s program caps participants at 10 units). The City of Edina has a very
clear policy on their SAC Deferral Program, which can be found here:
https://www.edinamn.gov/DocumentCenter/View/12587/Edina-SAC-Deferral-Policy-PDF
Edina’s SAC Deferral Program, while well defined, has had a relatively small number of
applicants.
In addition to their SAC Deferral program, Brooklyn Park will absorb the cost of up to 3 SAC
units for businesses which meet qualifying standards (including being an independently owned
business as opposed to a chain and having at least 25% of its ownership being by a woman,
immigrant or member of the BIPOC community).
Section 4 - 6
Job Creation and Workforce Development Programs
Job Creation efforts are needed when a City, or communities within that City, are experiencing
disproportionate amounts of unemployment or underemployment (fewer hours than desired,
low wages and/or insufficient benefits); this is a case where people seeking employment
exceed the number of jobs available. Workforce Development provides tools (in the form of
training, education and improved access to employers) to residents to increase their chances of
getting hired and succeeding as employees of existing businesses.
Typically, employment needs and trends are seen as being regional, statewide or national as
opposed to local. There are exceptions when there is either a unique large local employer, or
employment sector, that is unable to meet their hiring needs or when there is a unique
community within a City that is notably underrepresented in the workforce. This being the
case, most Cities rely on regional organizations (such as Greater MSP) or statewide agencies
(the Department of Employment and Economic Development) to provide such services and
programming.
One unique exception is BrookLynk, which is a collaboration between Brooklyn Center and
Brooklyn Park. This workforce development program is largely focused on young people (aged
14-24) who have had an impediment to being fully engaged in the workforce. BrookLynk
provides “work readiness training,” employer-paid internships, job coaching and support
services. After five years of demonstrated success, BrookLynk expanded programming to offer
a youth entrepreneurship program, career pathways and a community partnership program
that provides sub-grants to local workforce development organizations. The summer internship
program typically matches 100-120 youth that live in and/or attend school in either Brooklyn
Park or Brooklyn Center with a summer internship. Brooklynk has been in operation for seven
years and has a great reputation in the region.
BrookLynk is a large and complex organization. It started out with a three-person staff and an
operating budget of around $300,000 and up to $200,000 a year in leveraged funds from
employer paid wages. The program has since grown in size, with the staff doubling to six and a
corresponding increase in its operating budget.
Programs to Encourage Diversity, Equity and Inclusivity in the Business Environment
Richfield has made a commitment to encourage diversity, equity and inclusivity (DE&I) in its
culture and in its programs and policies wherever possible. The City is in the process of
developing an equity toolkit specifically designed to evaluate policies and programs from a
DE&I perspective. Once completed, it would be ideal to utilize this tool when considering
business assistance programming.
In discussions with City Attorney Mary Tietjen and EDA Attorney Julie Eddington, it was noted
that there are legal constraints associated with public programs that could be made available
Section 4 - 7
exclusively to BIPOC communities. In order to do so, a community would first need to conduct
a study showing the disproportionate underrepresentation of any particular ethnic or racial
group from a specific aspect of commerce, identify the causes of such underrepresentation and
then devise a plan for addressing the causes. Due to the complexity of undertaking such a
study, many communities (Richfield included) have tailored qualification criteria of programs to
certain characteristics of applicants (such as homeownership status, educational attainment,
etc.) that have a greater statistical likelihood of impacting BIPOC communities
There are, however, a few Business Assistance programs in the suburban Twin Cities that
specifically benefit those who are Black, Indigenous or Persons of Color (BIPOC). A few of the
things that are being done include:
Bloomington’s “Business Resource Center” website includes a feature entitled “Bloomington
Collective: Stories of Solidarity, featuring local BIPOC-owned businesses,” which has a link to
monthly or bi-monthly city-produced YouTube video on a specific BIPOC-owned business.
BrookLynk, which is a collaboration between Brooklyn Center and Brooklyn Park, trains young
people (aged 14-24) and coordinates their placement in internships for local businesses. While
this program does not cite race, ethnicity, gender, etc. in the candidate criteria, it does specify
that participants must meet one of eleven historic “barriers to employment.”
As stated earlier, Brooklyn Park also has a SAC fee reduction program for businesses which
meet qualifying standards (including being an independently owned business as opposed to a
chain and having at least 25% of its ownership being by a woman, immigrant or member of the
BIPOC community).
Although this was not identified in any Twin Cities’ suburb, Richfield could also consider having
a listing of Women and Minority-owned Business Enterprises on its website as a resource for
residents wishing to support such businesses. Such a list could be complicated by questions of
validity, so it would likely have to rely on self-reporting and provide a disclaimer making that
distinction. Alternately, the City’s Business Assistance page could contain a link to the
University of Minnesota’s “Diversity & Sustainability in Business” webpage
(https://libguides.umn.edu/CSR/directories) which contains directories of Minority and Women
Owned Businesses.
Richfield’s Business Assistance website could also have a page dedicated to resources for
women, immigrant and BIPOC businesses that provides links to external providers such as the
Urban League Workforce Development Program, BrookLynk, and other relevant sites.
Developing such a webpage would represent an opportunity for staff from Community
Development to work with the City’s Diversity Coordinator.
Inclusivity also applies to business patrons. Cambridge, MA has a grant program for making
restaurants and retail establishments more physically accessible that provides a 90% matching
grant up to $10,000 for improvements that comply with Americans with Disabilities Act
Section 4 - 8
guidelines. Improvements costing less than $2,000 will receive 100% reimbursement. Among
the eligible costs are: developing and printing braille menus, counter “hearing loops,” accessible
bathrooms, accessible dining tables, interior store ramps, accessible shelving and counters,
improved interior paths of travel and accessible register counter.
Another good practice found outside of Minnesota is the Diversity, Equity and Inclusion in the
Workplace powerpoint that is available on the website of Council Bluffs, Iowa Chamber of
Commerce:
(https://chambermaster.blob.core.windows.net/userfiles/UserFiles/chambers/3450/CMS/Wor
kforce/DEandI-In-the-Workplace-(7).pdf). The presentation itself is good (but could perhaps be
improved); the idea of giving local businesses a toolkit, or at least a starting point, for improving
DE&I in their companies is a laudable approach.
Many, typically larger, communities also require diversity of contractors, subcontractors and
suppliers in the projects it bids. Some, although none could be found in Minnesota, also
require developers to meet diversity goals in their hiring as a condition of obtaining building
permits.
Capital Improvement (especially façade) Grants or Forgivable Loans
One type of business assistance that has a great deal of benefit to both the business enterprise
and the community, is to encourage (typically through incentives) investment in capital
improvements. Such capital improvements can include physical improvements to a structure
and the addition of equipment with a tangible value. Such improvements usually lead to a
more useful and attractive (and hopefully more successful) business and a higher property
value which results in greater property taxes to the city.
Typically, cities incentivize businesses to make such improvements by a grant that matches the
business-owners investment or a loan with favorable terms. These terms might involve either a
rate lower than that which could be obtained through private financing or a forgivable loan in
which a predetermined amount of the principal is forgiven every year the business remains in
operation (and perhaps meets other goals such as job creation).
Capital/façade improvement incentives can be made available community-wide or they can be
targeted to distinct geographic areas or to businesses meeting certain criteria. Distinct
geographic areas typically include areas which: have a concentration of older buildings which
are viewed as sub-standard, in areas of concentrated poverty or in areas in, or around, transit
lines. In the case of individual building criteria, these might include: small businesses, non-
chain businesses, minority or women-owned business enterprises or businesses which have
been in place for a prescribed number of years. The rules for improvement incentives can also
exclude particular businesses that defy community desires or values (for example, pawn shops
or tobacco shops).
Section 4 - 9
Nearly half of the suburban peer cities (8 of 17) offer some sort of capital improvement grant or
loan. Of those eight, some of the criteria include:
o 6 are specific to exterior or façade improvements
o 2 are only for specific geographic areas
o 4 provide matching grants
o 2 are loans forgiven at the rate of 10%/year
o 2 are loans with better terms than the private market could provide
o 2 allow funds to be used for real estate purchase
There are a few unique programs in this category offered by peer cities, those include:
o Columbia Heights offers free installation of a city-owned surveillance system to grant
recipients if deemed to be warranted;
o Crystal’s program includes 100% toward architectural services (up to $3,000) that result
in a storefront improvement.
o White Bear Lake adds fire-suppression financing to their program
o Brooklyn Park offers a “Code Correction Loan” specifically for costs to address cited
code violations
Richfield’s past program (see Section 2-3), and at least one peer city’s program, include funding
from Hennepin County’s Business District Initiative (https://www.hennepin.us/economic-
development/programs/business-district-initiative). If a geographically defined façade/capital
improvement program is to be considered, seeking such finding would be recommended;
applications for the funding are due in March of each year and allow a County grant of up to
$50,000 for:
o Business recruitment
o District-wide marketing, branding, and/or promotion initiatives
o District-wide planning and design
o Technical assistance for business districts or individual businesses (including but not
limited to special service district or business-association establishment; financial, legal,
or tax-related services; merchandising, marketing, and social media assistance)
o Establishment of small-business incubators
o Design and/or implementation of wayfinding, street furniture or other public realm
enhancements
o Building facade improvements
Seattle, WA provides grant funding directly to tenants to make interior improvements to the
spaces they lease. The program states that it is intended to address barriers for small
businesses to succeed, “particularly for Black, Indigenous, people of color (BIPOC) communities
are a result of ongoing systemic barriers such as lack of access to capital, displacement,
discrimination, inequitable public policy, and more.” The program does not require applicants
identify as BIPOC, but gives prioritization to those who do.
Section 4 - 10
Operating Loans
A fewer number (about 1/3) of Richfield’s peer cities provide operating loans to businesses.
The rational for providing such a loan is that either: a) a new business, or a business with rapid
growth, needs a few years for their income to be able to offset their expenditures, or; b) there
is some artificial or external impediment to the business that needs to be offset (such as a local
road construction project or the Covid pandemic).
Typically, in these programs, an initial “seed” investment into a loan fund is made by the local
municipality over one to three years and then the future funds to lend are provided, in part,
from ongoing loan repayments from prior recipients; often called a “revolving” loan.
In none of the peer cities do City staff actually provide the underwriting to determine the
feasibility and risk of a loan. Instead, they rely on a third party (a bank, regional development
authority, etc.) to do the underwriting. The City money is typically used as:
o a “bridge” to cover the gap between what a bank will lend and the amount of money
the business needs;
o a source of collateral for the bank to consider when doing their underwriting, or;
o funds to “buy down” the interest rate in order to make the payments more in line with
the businesses financial ability to make loan repayments.
The majority of peer communities with an operating loan have their loan administered by the
Central Minnesota Development Company (CMDC). Administration includes structuring the
loan program, underwriting loans and servicing the repayment of the loans. CMDC is a certified
loan administrator through the Small Business Administration (SBA). There are several other
agencies in the Twin Cities region which help communities with administering revolving loan
funds, including the Minneapolis Consortium of Community Developers (MCCD). These loan
administrators are typically compensated through loan processing and loan servicing fees and
do not seek payment from cities in which they provide services.
On January 21, 2020, the Richfield Economic Development Authority (EDA) approved the
creation of a “pilot” Small Business Revolving Loan Fund Program. The program was to be
administered by MCCD, who would underwrite and administer loans for businesses located in
Richfield. As recommended by MCCD, the established underwriting criteria was a little more
lenient than typical loans that a business would get from a large bank, but the interest rate was
intended to be marginally higher to compensate for the increased lending risk. In 2020, the EDA
budgeted $60,000 for this program in which it provided a maximum contribution of $15,000 to
the loan with MCCD matching or exceeding the EDA's financial participation in the loan. In the
approved program, no more than 25% of any loan issued could be used for operating costs
(with the remainder being used for capital/equipment costs). At that time (and at early-2020
interest rates), MCCD stated that a typical loan had a term of 5 years. The EDA would earn back
approximately $3,900 per year on a 5-year loan of $15,000. These funds would be reused (or
Section 4 - 11
"revolved") for future loans. This information has not yet been updated to reflect current
interest rates.
Less than two months after the EDA created the Small Business Revolving Loan Fund Program,
the Covid pandemic struck. The EDA decided in March 2020 to put the program on hold in
order to provide emergency Covid funding to small businesses. The program has been on
hiatus ever since. Also, since that time, the staff leadership at MCCD has changed and it would
need to be determined whether MCCD still has the capacity and capability to underwrite and
administer a loan of this sort or whether another agency (such as CMDC) would be better
staffed to provide loan services.
Environmental/Energy Efficiency Grants & Loans
Center for Energy & the Environment (CEE)
The Center for Energy & the Environment (CEE) is a Twin Cities based non-profit whose mission
is to “discover and deploy the most effective energy solutions that strengthen the economy and
improve the environment.” Many of their programs are dedicated to homeowners and
apartment managers. Their business programming is a result of their contract with Xcel Energy
to administer several commercial energy evaluation and efficient upgrades programs. One
program is the “One Stop Efficiency Shop” which provides rebates for efficient lighting and
Heating, Ventilation and Air-Conditioning (HVAC) upgrades, another is the Refrigeration
Program which provides rebates for more efficient refrigeration for businesses, yet another
program is their Business Energy Assessments for mid-to-large sized businesses. In most cases,
small businesses receive free audits of their lighting, HVAC and refrigeration and
recommendations for improvements as well as CEE coordinating any applicable rebates from
the utility companies. In three Twin Cities suburban communities (Edina, Richfield and St. Louis
Park), the communities offer additional matching grant funds (with a cap of $2,000-$2,500 per
business) who participate in the program.
CEE also has a lending program for commercial customers making more substantial energy
improvements.
MinnPACE
For larger energy efficiency investments (generally greater than $30,000), a business owner can
have the costs assessed onto their property taxes and paid out over a period of up to 20 years
as part of their biannual tax bill. This is through a program called Property Assessed Clean
Energy (or PACE). In Minnesota, the St. Paul Port Authority (SPPA) is the largest administrator
of PACE in a program they term MinnPACE. SPPA administers the PACE program at no cost to
cities. The assessment is at a competitive interest rate and the term of the loan is generally tied
to the calculated annual savings that should be theoretically achieved through the energy
efficient improvements.
Section 4 - 12
Partners in Energy
Xcel Energy’s Partners in Energy provides Minnesota communities with services to develop an
energy plan and assistance with implementing that plan. Each community has its own unique
energy needs and priorities, and Partners in Energy tailors its services to complement each
community’s vision.
The program helps communities conduct energy planning as a critical role in helping them
reach their sustainability goals. The energy planning works with citizens, businesses, and even
a city’s own government facilities. As a result, a community can shave dollars off utility bills,
promote renewables, drive resource conservation or contribute toward greenhouse gas
reduction goals. Partners in Energy helps address the challenge of identifying local priorities
and then structures a path that leverages all resources available. The program also includes an
Electrical Vehicle Toolkit
Business (Recruitment), Retention & Expansion (BRE)
In years past, business recruitment, retention and expansion programs were a foundation of
economic development activities for most communities. The recruitment of businesses, which
is the active effort by one community to lure an existing business out of another community,
has become much less prevalent over time. This is because, especially in a metropolitan area
with many independent municipalities, this practice has come to be seen as a “zero net gain,” in
which a community “poaching” a business has a likelihood of losing a business to another
community’s recruitment practices.
Instead, cities are now much more focused on the retention and expansion of existing
businesses. In a paper entitled “Business Retention and Expansion (BRE) Programs: Why
Existing Businesses are Important,” University of Florida researchers found that 70-86% of all
job growth (depending on locale) occurs through the expansion of an existing business rather
than the creation of a new one.
The act of retaining existing businesses and encouraging them to expand in place (or elsewhere
in the community) does not lend itself to the “one size fits all” approach. Seemingly, the only
constant in BRE programs is one-on-one engagement with businesses. This engagement
typically takes the form of business visits by economic development staff (sometimes
accompanied by elected & appointed officials). Such business visit typically involve forging (or
continuing) a relationship between the business owner, asking a set of survey-style questions,
determining the businesses immediate and long-term plans in the community and determining
whether there is any way that the city could be of assistance in maintaining the businesses
presence in the community or helping to facilitate expansion in any way.
The only one of Richfield’s “peer communities” that has a BR&E program is Oakdale. That
program was first implemented in 2022 with the goal of visiting 18 businesses in its first year
and 12 businesses per year thereafter. The visits are conducted by one city staff member, a
chamber staff member (takes notes), one chamber or Economic Development Commission
(EDC) member and one city council member. Business are chosen for outreach by identifying
Section 4 - 13
key categories (large employers, BIPOC representation, those hit by COIVD, top sectors, etc.).
As part of the visit, a two-page questionnaire is provided to the subject business. The stated
goals of the visits are to:
• Express appreciation to our local businesses
• Build a relationship with business and city/community partners
• Build awareness of and connection to available resources, as requested
• Understand real estate and investment plans and needs
• Understand how city policy impacts business success
• Combine qualitative and quantitative data gained through visits into trends and
recommendations to best support business attraction, retention, and expansion in the city
Oakdale’s staff have expressed that the most positive takeaways from the program thus far are:
• The visiting contingent is well received by businesses;
• Structure is important, using a script allows responses to be aggregated and any follow
ups to be tracked, allows program to be sustainable year over year, and;
• Visits have allowed staff to connect business to resources / partnerships that are being
utilized.
There have also been some lessons learned, which include:
• Scheduling can be difficult both for business availability and the visit contingent;
• Suggest appointing a primary city staff, elected and business rep for most visits and
having a deep bench of alternates;
• Don’t be too selective on businesses, be willing to move on if you don’t get a response
after a few attempts, and;
• Leave some slots open for word of mouth visits.
While not meeting this analysis’ definition of a peer city, the city in the metropolitan area that
has had the greatest amount of experience administering a BR&E program is Cottage Grove.
Cottage Grove, at 38,839, has a similarly sized population as Richfield. While Richfield has
much less industrial development, the cities otherwise seem to have a similar mix of
commercial businesses. Cottage Grove began their BR&E program in 2017 and, at the height of
the program, were visiting approximately 40 businesses a year. Cottage Grove, however, has
since halted their BR&E program. The City’s Economic Development Director shared that
“businesses had become resistant to the program… in part because they were expecting more
tangible outcomes than the City was able to provide.”
The University of Minnesota’s Extension program offers two resources for communities wishing
to implement Business Retention and Expansion through its Connecting Businesses and
Communities program. The first option is to contract with the U of M’s Extension office to
coordinate a three-step process (outlined below) which takes 12-24 months to complete. The
Extension estimates the cost for this service as $12-15,000 for a typical suburban community.
Section 4 - 14
As an alternative, the Extension office offers an annual 2-day in-person course or an 8-week
online course to teach city employees and leaders. The cost of the class is $575 per person or
$950- $1,350 for a team of varying size. The course should prepare the team to run its own 12-
24 month “Connecting Businesses and Communities” experience
Section 4 - 15
Section 5: Community Input
While it is helpful to know what Richfield has done in the past and the Business Assistance
activities that other communities are conducting, ascertaining the wants and needs of the
existing businesses in the community is very important in recommending business assistance
programming.
In an attempt to better understand the wants and needs of local (and prospective) businesses,
three key activities occurred as part of this analysis: an online survey, a Small Business Forum
and Initial Input from the Richfield Economic Development Authority.
Survey
The Richfield Business Survey was posted on the City’s website from December 3, 2022 to
January 13, 2023. The Survey was highlighted in several social media posts by both the City of
Richfield and the Richfield Chamber of Commerce. The Twin Cities Latino Chamber of
Commerce and the Latino Economic Development Center were also made aware of the survey.
The full results of the survey are included as Appendix B to this report.
In summary, the findings were:
• 21 Richfield Business owners responded to the survey;
• 90% of respondents preferred to take the survey in English (10% Spanish);
• 24% appear to operate out of their homes;
• 43% identified as being Black, Indigenous or a Person of Color (BIPOC);
• 90% felt they would qualify as a woman or minority-owned business;
• By and large, business owners feel very good about the business environment in
Richfield; When asked to rank 11 attributes of the community (such as location, parking
availability, cost to lease, etc.), nine of the eleven criteria had more ranks of “very good”
or “best” than “very poor” or “worst”;
• Among the attributes that respondents had the most positive reaction were:
o Location, Diversity of Residents, Parking Availability and Access to Transit.
• There were mixed feelings (roughly equal number of positive and negative feedback)
about the “cost of city licenses and fees,” and “available space to buy or lease”.
• The worst attribute of the business climate in Richfield, according to survey
respondents, is the “cost of space to buy or lease” with 6 people choosing “very poor”
or “worst” while only 1 said it was “very good” and 0 ranked it as being among the best
attributes in the community;
• When asked to rank potential Business Assistance Programs, there was:
• Strong support for:
o “Financial Assistance for Interior Improvements or Equipment;”
o “Technical Assistance (professional services)”
• Medium support for:
o “Financial Assistance for Exterior Improvements or Signage;”
Section 5 – 1
o “Financial Assistance for Ongoing Operating Costs,” and;
o “Financial Assistance for Energy Efficient Improvements;”
• And little support for:
o “Help Finding Qualified Employees,” and;
o “Business Visits from City Council and City Staff;”
Small Business Advisory Forum
Respondents to the survey were asked whether they would be willing to participate in a Small
Business Advisory Forum. Ten people (representing 7 businesses) participated in the Forum at
Richfield’s Municipal Center on January 26, 2023. It should be noted that 3 of the 7 (43%)
businesses operate out of their homes. The full report from that meeting can be found in
Appendix D of this report. As a summary, the group concluded the following:
Positive Aspects of the Richfield Business Climate
• Local businesses support each other;
• The City and its leaders are helpful;
• The diversity of the residents;
• Being included in City events and communications
• The community wants to support local businesses.
Aspects of the Richfield Business Climate that Have Potential for Improvement
• The possibility of greater collaboration amongst businesses;
• Garnering a greater diversity of businesses who participate in collaboration;
• City processes could be streamlined (including a central resource);
• Both the City and the Community Facebook pages could be better marketing resources
for local businesses (as they serve as current-day “word of mouth” advertising);
• Older buildings need work/investment & newer buildings are too expensive.
Negative Aspects of the Richfield Business Climate
• Excessive paperwork and processes for City approvals;
• High taxes (when compared to Bloomington);
• Challenging availability of parking for home-based businesses.
Recommendations from the Small Business Advisory Forum
• Continue to provide Technical Assistance, such as that provided by Open to Business in
the past and to be offered by Elevate Hennepin in the future;
• Make improvements to, and commit to regularly updating, the City’s website with
regards to business resources;
• Provide forgivable loans instead of grants to ensure the long-term commitment of the
awarded businesses;
• The EDA should provide forgivable loans for improvements (both capital and tenant-owned
fixtures) to older buildings and operational loans to non-chain businesses operating in new
buildings to offset the high rents as a way to avoid “gentrification;”
• The EDA and/or Chamber of Commerce should create a “Locally-Owned Business Directory;”
Section 5 – 2
• The City should have a single “point person” for businesses to contact with questions or
for guidance.
• The City should create a Richfield Small Business Facebook page where residents could
post their positive experiences with a particular business and where businesses could
post promotions and job openings and where commercial realtors could post properties
for lease/sale.
• The City should continue to convene a “Small Business Advisory Council” several times a
year.
EDA Work Session
On January 17, 2023, the Richfield Economic Development Authority held a work session
meeting to give some preliminary feedback on the Business Assistance Evaluation. As part of
this meeting a 22-slide powerpoint presentation was given to the EDA Commissioners providing
them with:
• A history of Business Assistance programming in Richfield;
• The Current Business Assistance programs offered in the City;
• The funding availability for Business Assistance Programming;
• A description of nine broad categories of Business Assistance Programs;
• A preliminary report on the results of the Small Business Survey, and;
• Forecasting of the pending Small Business Advisory Forum.
The meeting minutes from that Worksession are provided as Appendix C to this report. In
summary, EDA Commissioners:
• Wanted better ways to identify all of the businesses operating in Richfield;
• Were concerned about a situation of “gentrification” in which preexisting businesses
can no longer afford lease rates that are increasing as a result of redevelopment
success;
• Supported ways of providing resources to businesses currently operating out of their
homes and suggested more research might help to ensure that whatever form this
support takes (including the possibility of co-work space) is in line with their needs;
• Agreed on the need to maintain strong relationships with business organizations
(including the Chamber of Commerce and business groups representing distinct
ethnic/cultural groups);
• Recommended that staff and consultants continue looking for ways to partner with our
regional and state partners.
Summary of Community Input
There were a number of commonalities between the results of the Small Business Survey, the
initial feedback of the Richfield EDA and the discussions at the Small Business Advisory Forum,
among them were:
• The impacts of business gentrification is the primary concern among all the groups that
participated in this analysis. These impacts manifest themselves as:
Section 5 – 3
o Increasing cost of space to lease or buy, especially for small non-chain
businesses, and;
o The remaining older commercial spaces that are available are in need of
investment beyond the means of existing and new small non-chain businesses
• There are more home-based businesses in Richfield than had been expected;
o What are the community impacts (positive and negative) of home-based
businesses? Are there ways to promote/support the positive aspects while
neutralizing the negative aspects?
• Business owners are very satisfied with almost every aspect of the community;
• There are “administrative” or “procedural” improvements that can be made with more
staff time being devoted to Business Assistance;
• There are a few prospective programs that have wide-ranging support (including
providing Technical Assistance, providing forgivable loans that can be utilized by tenants
for lease offset in newer buildings or improvements to older buildings), and;
• There is a strong desire to better identify, and communicate with, businesses in the
community.
Section 5 – 4
Section 6: Next Steps (Desired Outcomes and Options for their Achievement)
This Analysis has been intended to provide the City of Richfield, its Economic Development
Authority and its Community Development staff with much of the information necessary for
continued economic development in the community. Using this information, collaborative
efforts can be made to continue existing programming, and to create new programming, to
maintain and improve the excellent business environment in the Richfield.
The City of Richfield and its Economic Development Authority have already taken a big step
toward the achievement of future successes in Business Assistance by creating the Economic
Development Manager position. This will be the first management position in the City’s history
with such an overt focus on Economic Development. The position is expected to be filled in
April 2023. Among the responsibilities of this position are to “plan, develop, coordinate and
organize the City’s economic development activities.” This Analysis is not intended to supplant
these roles of the Economic Development Manager, rather to provide some information, ideas
and prospective tools that may aid them in undertaking these responsibilities.
Desired Outcomes for Business Assistance in Richfield
A next step of importance will be for staff and policy-makers on the EDA to reach consensus on
the desired outcomes of Economic Development and Business Assistance Programming in the
community. It will be against these desired outcomes that success of existing programs and
creation of new programs should be measured. Based on the communications and
engagement (see Section 5) that was conducted as part of this analysis, these Desired
Outcomes for policies and programs might be that they:
• Mitigate the negative impacts of commercial gentrification;
• Assist commercial tenants to at least as great of a degree as the assistance to
commercial property owners;
• Improve the structural and internal components of commercial spaces in addition to
their “curb appeal;”
• Provide small and emerging businesses with a source of Technical Assistance to help
them launch or grow;
• Support existing businesses and reward their commitment to the community;
• Foster a great relationship with the local business community;
• Communicate to, and about, businesses located in the city;
• Leverage external resources (including funding, staffing and technical expertise);
• Achieve other City goals beyond Economic Development (such as DE&I);
• Provide a measurable impact to the community and its businesses;
• Maintain sustainable local funding for economic development programming.
Section 6 – 1
Options for Achieving (suggested) Desired Outcomes
The Desired Outcomes outlined above are suggestions at this point. The EDA and its staff might
possibly eliminate, modify and augment this list as its Economic Development policies and
programs evolve. It should be noted that several options meet multiple desired outcomes.
Desired Outcome: Mitigate the negative impacts of commercial gentrification
Options:
• Continue to hold some funding in reserve for the Displaced Business Grant and
specifically include it in budget years in which displacement is foreseen.
• Provide forgivable lease assistance funds to existing businesses whose rents have
been increased or who have moved into newly redeveloped sites with higher rents.
• Monitor the website of the Small Business Anti-Displacement Network
(www.antidisplacement.org) and other relevant organizations to keep informed about
strategies intended to preserve small businesses in an environment of revitalization.
• Work cooperatively with commercial real estate developers to find strategies for
keeping lease-rates affordable to Richfield’s small businesses.
Desired Outcome: Assist commercial tenants (regardless of whether they own the space they
occupy)
Options:
• Provide forgivable loan funds to tenants for leasehold improvements (fixtures,
signage and other tenant improvements).
• Provide access to Technical Assistance programs.
• Periodically review the City’s business licensing fees to ensure that they are
competitive with peer communities.
Desired Outcome: Improve the structural and internal components of commercial spaces in
addition to their “curb appeal;”
Options:
• Provide forgivable loan funds to tenants for leasehold improvements (fixtures,
signage and other tenant improvements).
• Communicate with Hennepin County Economic Development about the application of
their Business District Initiative funds to tenant improvements.
• Implement a forgivable loan for correcting code deficiencies and/or improving
physical accessibility in commercial properties.
Desired Outcome: Provide small and emerging businesses with a source of Technical
Assistance (and possibly fee relief) to help them launch or grow
Options:
• Participate in all levels (Elevate Partnership and City Navigators) of Elevate Hennepin.
• Become familiar with SCORE and provide contact information on the City’s website.
• Adopt a Sewer Access Charge (SAC) Deferral program.
Section 6 – 2
Desired Outcome: Support existing businesses and reward their commitment to the
community
Options:
• Provide Business Assistance Funding as forgivable loans that reduce in principle each
year the business remains open (instead of providing funding as grants).
• Celebrate businesses for their tenure in the community.
• Garner a better understanding of the number of home-based businesses in the
community and of their wants and needs in an effort to provide them with a place to
grow (including the possibility of co-working space) within Richfield.
• Consider tenure in the community as a criteria for scoring grant/loan applications.
Desired Outcome: Foster a great relationship with the local business community
Options:
• Have the Economic Development Manager serve as a “Small Business Liaison,”
offering a first point of contact for businesses.
• Continue to play an active role on the board of the Richfield Chamber of Commerce.
• Maintain a relationship with the Latino Economic Development Center, the Latino
Chamber of Commerce, and the Minnesota Black Chamber of Commerce and other
diversity-based business groups.
• Identify a Spanish speaking resource to assist those in need of Business Assistance
services.
• Convene a Small Business Advisory Forum 2-4 times each year.
• Create a modest Business Association Grant program to assist local associations
(chambers of commerce, etc.) in providing programs and/or services specifically
devoted to Richfield businesses.
Desired Outcome: Communicate to, and about, Richfield’s business community
Options:
• Economic Development and Communications staff create a Small Business
Communications Plan (incorporating the feedback from the Small Business Advisory
Forum.
• Communicate City information to businesses (e.g. via a quarterly business update
email which businesses could subscribe to and which would be marketed by the
Chamber to its members).
• Provide residents with information about businesses located in the city (via existing
social media sources or the establishment of a distinct Richfield Business platform).
Section 6 – 3
Desired Outcome: Leverage external resources (including funding, staffing and technical
expertise)
Options:
• Nurture and maintain good working relationships with staff and policy makers at the
Minnesota Department of Employment and Economic Development (DEED),
Hennepin County Department of Economic Development, the Minnesota Economic
Development Association (EDAM) and other relevant economic development groups.
• Participate in all levels (Elevate Partnership and City Navigators) of Elevate Hennepin.
• Commit to a staff goal of submitting at least one external grant application for
Business Assistance each year.
• Determine whether any new or existing programs can be administered by non-profit
loan servicing organizations (such as the Minnesota Consortium of Community
Developers or Central Minnesota Community Development);
• Continue to utilize the Center for Energy and the Environment to administer the
Energy Efficient Grant program.
• Create a modest Business Association Grant program to assist local associations
(chambers of commerce, etc.) in providing programs and/or services specifically
devoted to Richfield businesses.
Desired Outcome: Achieve other City goals beyond economic development
Options:
• Reduce carbon emissions/promoting environmental sustainability
o Energy Efficient Business grant;
o Develop a policy or guidelines for EV charging stations with incentives for
commercial properties.
• Promote alternate modes of transportation (e.g. Bike Rack Cost Sharing program);
• Support the creation of new affordable housing and/or improvement to existing
affordable housing;
• Evaluate Business Assistance Policies and Programming through a lens of supporting
diversity, equity and inclusion utilizing City staff tasked with DE&I initiatives.
Desired Outcome: Provide a measurable impact to the community and its businesses
Options:
• Collect data on recipients of Business Assistance programming (such as gender
identification, race, ethnicity, commercial vs. in-home location, business type,
business size, etc.) so it will be possible to ensure that programs are being used
equitably and meeting their intended goals.
• Work with the Center for Energy and the Environment (CEE) to gather more
information related to the Energy Efficient Business Grant in order to:
o Identify the utility company funds leveraged by the program, and to;
o Quantify the environmental benefits of the program.
• Attempt to set SMART (Specific, Measurable, Achievable, Realistic and Timely) goals
for Business Assistance programming.
Section 6 – 4
Desired Outcome: Maintain sustainable local funding for economic development
programming
Options:
• Defer implementation of a Revolving Loan Fund for operating capital, and instead
implement programs that were identified as higher priorities within the community.
• Maintain a cash reserve of 35-40% of annual expenditures in the EDA budget.
• Continue to levy to the maximum amount permitted for the EDA each year absent a
strong rationale to the contrary.
• Maintain $200-300,000 within the EDA’s fund balance for unforeseen opportunities.
• Reduce the funding to the Energy Efficient Grant program by 3-5% each year as the
pool of eligible businesses shrinks and/or increase the maximum per/business grant
by 3-5% each year to account for inflationary increases.
Section 6 – 5
Appendix A
Peer City Business Assistance Programming
Bloomington
• SAC Small Business Deferral
o Small businesses requiring 2-10 credits
• Bi-monthly highlight of BIPOC-owned businesses on the City’s website
• Externally administered programs
o Elevate Hennepin Co
o Open to Business (MCCD)
o Energy Efficiency Programs (CEE)
§ Free business energy assessment
o Referral to many regional and state programs
• Small Business Development Center – 2050 86th Street East
o Coworking space opening in 2024
o 6,600 sq. ft. former fire station
o $2.3 million public/nonprofit investment
o Space for 10-15 businesses
Brooklyn Center
• BrookLynk (administered and funded jointly with Brooklyn Park)
• SAC Reduction Program
o Up to 3 SAC credits provided to eligible businesses
• SAC Deferral Program (assessed to property taxes over a period of time)
• EDA Shelf Space – 1350 Shingle Creek Crossing
o Incubator for BIPOC businesses
o 3,500 square feet
o Fresh produce and fruit store
• Revolving Loan Program
o Underwritten and administered in-house
o 10 year loan of $10-100,000 @ 2% below prime; 10% equity required
o for land, building and equipment (no working capital)
o currently 2 loans: 70k & 30k
• Small Business Micro-Loan
o Partnering with Liberian Business Association
o 3-5 year loan < $5,000 @ 10% interest – a portion is forgivable if LBA provides
technical assistance
o Two goals: Help LBA get established and to provide assistance to individual
businesses
o for operational expenses (not capital expenses)
• MicroFacade Grant Program
o Internally funded from the EDA
• Business District Initiative funding for addressing area hit by civil unrest
Appendix A - 1
• Participates in Open to Business (MCCD)
• Participates in Elevate Hennepin (Hennepin Co program)
• External Funds
o Minnesota Investment Fund (DEED)
o Job Creation Fund (DEED)
Brooklyn Park
• BrookLynk (administered and funded jointly with Brooklyn Center)
o Youth Employment Program
• $30,000 Hennepin Co. Grant provided to African, Career, Education Resources (ACER)
o “To explore community investment trust/co-operative ownership model”
• Small Business Center - 7970 Brooklyn Blvd.
o Purchased by EDA in 2021 opening in 2023
o Will provide space for “at least 50 businesses”
• Brooklyn Park Development Corporation
o MicroLoan: $100,000 in total funds available
§ Funded by debt service on existing loans
§ $1-10,000 2% loan (not accepting applications at this time)
o Commercial Code Correction Loan
§ For correcting code violations
§ $1,000-25,000 15-year Loan at 2% interest (larger amounts considered on
a case-by-case basis)
§ 10% equity required
o Real Estate/Equipment Loan
§ $50-300,000
§ Requires 50%+ match from private financing/investment
§ Administered by CMDC, loans serviced by Community Reinvestment Fund
(CRF)
• SAC/WAC Reduction Program
o BP pays half the required SAC credits up to 3 credits for qualified businesses
• Participates in Open to Business (MCCD)
• Participates in Elevate Hennepin (Hennepin Co program)
• Events
o Business Forward Forum
o Annual Restaurant Week
• External Funds
o Minnesota Investment Fund (DEED)
o Job Creation Fund (DEED)
o MC-LCDA: 4 pre/re-development grants in 2021
Appendix A - 2
Columbia Heights
• Façade Improvement Grant Program (specific geographic areas)
o 50% reimbursement up to $5,000 – internally funded & administered
o Additional installation of surveillance system (leased free of charge by the City) if
considered warranted by the police department
• Fire Suppression Grant for small businesses (pilot program)
o 50% reimbursement up to $15,000 for existing building (no new construction)
• Undefined Business Retention and Expansion program
• Externally administered programs
o Participates in Open to Business (MCCD)
o Referral to many regional and state programs
Crystal
• Storefront Façade Improvement Program
o $30,000 of funds from Hennepin County
o 50% no-interest loan for reimbursement of projects >$10,000 up to a $12,500
grant
o 10% of loan forgiven each year for 10 years
o Also includes 100% payment for architectural services up to $3,000
• SAC Deferral Program
• Externally administered programs: Open to Business (MCCD)
Edina
• SAC Small Business Deferral (best online information of a SAC Deferral program)
o Small businesses requiring 5-25 credits
o 5 year deferral schedule
• Climate Action Fund
§ 50% utility rebate match up to $2,000 for energy efficiency projects (not
including natural gas systems)
§ Up to $2,000 cost share for electrification/fuel switching projects where
natural gas infrastructure or appliances are removed and electric systems
are added
§ 20% of the cost (up to $2,500) for qualified energy efficient equipment
§ Administered by CEE
• Participates in Open to Business (MCCD)
• Participates in Elevate Hennepin (Hennepin Co program)
Fridley
• Externally administered programs
o Participates in Open to Business (MCCD)
o Fridley Business Loans
§ Administered by Central Minnesota Development Company
§ Subprime loans of $50-150,000
o Energy Efficiency Programs (CEE)
Appendix A - 3
§ Free business energy assessment
§ Rebates for energy efficient equipment from utilities
Golden Valley
• Police Department provides free security inspections/evaluations to businesses
• Externally administered programs: Open to Business (MCCD)
Hopkins
• Façade Improvement Program (currently paused)
o 50% no-interest loan for reimbursement of projects >$10,000 up to a $25,000
loan
o 10% of loan forgiven each year for 10 years
• Pilot Business Retention Program
o For businesses displaced by redevelopment
§ Up to $3,000 loan for capital costs related to relocating business
§ Loan is forgiven upon business being in new location for 1 year
• Downtown parking in municipal lots/structures
• Externally Administered Programs
o PACE Program (environmental improvements) (administered by SPPA with
added funds by Hopkins?)
o Open to Business
o Elevate Hennepin Co
Maplewood (Ramsey Co)
• Externally Administered Programs
o Economic Gardening (Ramsey Co)
o Ramsey County Business Loans Program
o Open to Business (MCCD via Ramsey Co)
New Brighton
• Externally administered programs: Open to Business (MCCD)
New Hope
• Externally Administered Programs
o Energy efficient business program (CEE administered)
o Open to Business (MCCD)
Oakdale
• Business Retention Expansion, Attraction program
o CD Director and a rotating City Council Member visit 18 businesses/year
• Externally Administered Programs
o Energy efficient business programs (SPPA administered)
o Open to Business (MCCD)
Appendix A - 4
Roseville
o Small Business Assistance Loans (up to $100k – administered by MCCD)
o SAC Credit Assistance, Tax Abatement & TIF on a case-by-case basis
o Open to Business with monthly City Hall Advisor hours (administered by MCCD)
o Referal to: Minnesota DEED environmental cleanup funds, Ramsey County Business
Loan program, Minnesota Job Creation Fund/Minnesota Investment Fund, MinnPACE
for financing renewable energy, Xcel Partners in Energy program, etc.
St. Louis Park
• TexaTonka Façade Improvement Grant
o Geographically targeted
o Funded by SLP and Hennepin County’s Business District Initiative
o 50% match of $2,000-$10,000
• Commercial Business Assistance Program (proposed)
o Up to $10,000 forgivable loan per business
o Commercial alteration, renovation or expansion construction costs
o One to one forgivable loan match of qualified private investment up to $10,000
o Funded and administered by SLP EDA
• 2% Loan Program
o Up to $75,000 loan per business at 2% interest in conjunction with loans from
MCCD and/or potentially other qualified lenders
o Eligible uses: building purchase and renovation costs, machinery and equipment
o Funded by SLP EDA, Administered by MCCD
• Revolving Loan Fund
o Up to $200,000 loan per business for gap financing (interest rate matches that of
CMDC/SBA)
o Eligible uses: Building purchase and renovation costs
o Funded by SLP EDA, Administered by Central Minnesota Development Corp
• Four Energy Programs for businesses (administered by Sustainability Specialist)
o Climate Champions (coordinated by CEE)
§ Evaluation and implementation of energy saving equipment
§ 50% up to $2,500 SLP share (75%/$3,500 in distressed census tract)
o Solar Sundown
§ 4% match on solar panel costs (6% in distressed census tract)
o Shade SLP
§ Comm’l/NonProfit tree planting: 50%/$200 max match (75%/$300 in
distressed census tract)
o Special Assessment for Energy Improvements through PACE
§ Loan amount up to 10% assessed property value for commercial, industrial and
multifamily property owners
§ Eligible uses: energy efficiency improvements, renewable energy improvements
and EV charging stations
§ Funded by St. Paul Port Authority, paid back through special assessments
§ Administered by Port Authority
Appendix A - 5
West St. Paul
• Commercial Exterior Grant
o Matching grant for exterior improvements (no other info available)
• “EDA Redevelopment Grants” (pooled TIF??)
• Externally administered programs: Open to Business (MCCD)
White Bear Lake
• Revolving Loan & Grant Program to specific geographic locations
o $2-3,000 Façade Grant or
o Up to $40k loan for 10 years @ 2% interest -requires 100% match by bank
• Fire Suppression Financing Program
• Energy efficient business program (CEE administered)
Appendix A - 6
Appendix B
Business Survey Results
Economic Development Consultant John Stark (of Enduring Cities) worked with Richfield’s
Communications Specialist (Bonnie Hanna Powers) and Richfield Community Development
Director Melissa Poehlman to formulate, structure and post a survey for businesses and
prospective businesses.
The survey was posted on the City of Richfield’s webpage and was marketed to the Richfield
Chamber of Commerce, Twin Cities Latino Chamber of Commerce, Latino Economic
Development Center and on the City’s social media. The survey opened December 3 and
remained accessible until January 13.
The survey had 21 respondents. The questions (in bold) and their answers were as follows:
Preferred Language (in which to take the survey):
English: 19
Spanish: 2
Do you own a business in Richfield?
Yes: 15
No: 6
Do you manage a business in Richfield that you do not own?
Yes: 1
No: 0
Does your business have more than one location?
Yes: 1 (2 locations)
No: 20
If you do not own a business in Richfield, but would like to, what has kept you from doing so?
- Happy working out of home
- Just getting started on my plan
- Money, marketing & staff
- Available space is expensive and needs work, the well-maintained space is corporate
- Owner of the business [they would like to buy] isn’t ready to sell
Appendix B- 1
Do you identify as a member of the BIPOC [Black, Indigenous or Person of Color] Community?
Yes: 9 (43%)
No: 12 (57%)
Is your business registered as, or do you believe you would qualify as a minority or women
owned business entity (MBE/WBE)?
Yes: 19 (90%)
No: 2 (10%)
Please list 3 words or phrases that describe your customer base:
(I have combined answers that were the same or very similar)
Loyal/Supportive (6)
Diverse (4)
Locals (3)
Families (3)
Foodlovers (3)
Parents (2)
Homeowners (2)
Women (2)
Respectful (2)
Artistic (2)
Other (1 mention each): Growing, Educators, Students, Great People, Middle-Class, Nerdy,
Conscious, Sense of Humor, Gamers, Renters, Investors, Happy, Savvy, Senior
Please rate these elements of doing business in Richfield on a scale of 1-5 (1=worst & 5=best)
Worst Best
1 2 3 4 5
Location Accessible by Car 2 10
Diversity of Residents 1 3 8
Location within the Metro 2 4 6
Available Parking for my Business 1 1 2 7
Location Accessible by Bus 4 7
Location Accessible by walking/bike 1 2 4 4
Sufficient Customer Base 2 4 2 4
Availability of Staffing 1 1 2 5 3
City Licenses & Fees 3 4 2 2
Available Space to Buy/Lease 1 1 7 2 0
Cost of Space to Buy/Lease 4 2 5 1
total 9 8 28 31 51
Appendix B- 2
Please rank the following common Business Assistance programs offered by cities from most
to least helpful:
Helpfulness ranking
Most 2nd 3rd 4th 5th 6th 7th Least score
Financial Assistance for Interior
Improvements or Equipment 3 4 1 2 62
Technical Assistance (professional
services) 1 2 2 3 2 1 58
Financial Assistance for Exterior &
Signage Improvements 1 3 2 2 1 55
Financial Assistance for Ongoing
Operating Costs 3 2 1 1 1 2 50
Financial Assistance for Energy
Efficient Improvements 3 1 2 1 3 50
Help Finding Qualified Employees 3 1 3 3 2 39
Business Visits from City Council &
Staff 1 1 1 3 5 26
Appendix B- 3
Appendix C
Richfield EDA Meeting Minutes
ECONOMIC DEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Economic Development Authority Work
Session January 17, 2023
The work session was called to order by Vice President Vrieze Daniels at 5:45 p.m.
in the Bartholomew Room.
EDA Members Erin Vrieze Daniels, Vice President; Mary Supple, Lee Ohnesorge,
Present: Gordon Hanson; and Sean Hayford Oleary
Staff Present: Melissa Poehlman, Executive Director; Julie Urban, Assistant
Community Development Director; and LaTonia DuBois,
Administrative Assistant
Others Present: John Stark, Enduring Cities
Item #1
PRESENTATION OF PRELIMINARY RESULTS OF ECONOMIC DEVELOPMENT
PROGRAMMING REVIEW.
Executive Director Poehlman introduced John Stark, Enduring Cities
John Stark presented the purpose of the Business Assistance Analysis and reviewed past
and present Economic Development Authority (EDA) business assistance programs.
Commissioner Supple inquired about spending limits of the EDA fund balance reserve.
Vice President Vrieze Daniels inquired about state reimbursements due to the pandemic.
CALL TO ORDER
Appendix C - 1
Commissioner Hanson inquired about the underutilization of the displaced business grant
program.
John Stark reported on activity in peer cities’ business assistance, shared general goals of
business assistance programming, and types of assistance that can be offered.
Commissioners inquired about Sewer Availability Charge (SAC) fees charged to business
upon startup.
Commissioner Hayford Oleary inquired about surrounding cities’ grant funding programs.
Commissioner Supple inquired about environment-based grants and loans.
Vice President Vrieze Daniels inquired about ways to search for locally located businesses.
Commissioner Hayford Oleary expressed interest in SAC assistance and capital
improvement programs.
Vice President Vrieze Daniels expressed interest in finding out what obstacles deter
businesses from operating in Richfield, or what causes businesses to leave and the desire to
discover what the needs are of businesses.
John Stark shared information on a small business survey that was offered on the Richfield
website that will hopefully offer answers to some of Vice President Vrieze Daniels’ inquiry. There is
an upcoming focus group to discuss the survey.
Commissioner Hanson inquired about rent costs for business owners and how to keep
costs affordable for small business owners to enable them to occupy spaces in new developments.
Commissioner Supple offered support to all the suggested programs mentioned by
Commissioners and stated desire for a shared office space, networking with local businesses and
organizations and job creation.
John Stark asked Commissioners if there were any programs mentioned they would not be
interested in.
Commissioner Hayford Oleary inquired if the need for co-working spaces had declined
since the pandemic.
Commissioner Hanson inquired about the different types of co-working spaces that
currently exist.
Vice President Vrieze Daniels inquired about how the city fits into current state and county
programs.
Vice President Vrieze Daniels shared information about a Hennepin County program that
could be utilized to search for local businesses.
John Stark shared the next steps in the process and that a report will be shared with the
commission.
Appendix C - 2
Vice President Vrieze Daniels requested that John Stark include previous and current
programs and their rates of utilization.
Executive Director Poehlman shared the goal of hiring an Economic Development Manager
to implement the programs that will be utilized by the EDA and that programs would be
implemented individually and based on need.
The work session was adjourned by unanimous consent at 6:55 p.m.
Date Approved:
Erin Vrieze Daniels
Vice President
LaTonia DuBois Melissa Poehlman
Administrative Assistant Executive Director
ADJOURNMENT
Appendix C - 3
Appendix D
Small Business Advisory Forum
Meeting Summary/Notes
On January 26, 2023 a Small Business Advisory Forum was held at the Richfield Municipal
Center. The participants were business representatives that volunteered an evening of their
time to share their experiences and thoughts about the business climate in Richfield.
Participants
• John Stark, Enduring Cities LLC – Moderator
• Gordon Hanson, Economic Development Authority Commissioner and former Penn
Central Business Group leader
• David & Lisa Hintermeister, TeamHint (mortgage service providers who reside in
Richfield but office elsewhere)
• Gerard Klass, Owner of SoulBowl
• Catrina Letourneau, Pillars of Throw (home-based maker/retailer of candles, soaps, etc.)
• Peter Milton, Lawncare service provider officing from home
• Kelsey Nagel, Morris Nilson Funeral Chapel & President, Richfield Chamber of
Commerce
• Trish Reid, Manager of Frenchman’s Pub
• Don & Lori Swetala, Woof Central Dog Daycare Center
After introducing themselves and giving some background on their business experience,
participants engaged in a conversation about the merits of the business climate in Richfield.
The discussion yielded the following:
Positive Aspects of the Richfield Business Climate
• Local businesses support each other;
• The City and its leaders are helpful;
• The diversity of the residents;
• Being included in City events and communications
• The community wants to support local businesses.
Aspects of the Richfield Business Climate that Have Potential for Improvement
• The possibility of greater collaboration amongst businesses;
• Garnering a greater diversity of businesses who participate in collaboration;
• City processes could be streamlined (including a central resource);
• Both the City and the Community Facebook pages could be better marketing resources
for local businesses (as they serve as current-day “word of mouth” advertising);
• Older buildings need work/investment & newer buildings are too expensive.
Negative Aspects of the Richfield Business Climate
• Excessive paperwork and processes for City approvals;
• High taxes (when compared to Bloomington);
Appendix D - 1
• Challenging availability of parking for home-based businesses.
After describing the various types of Business Assistance programs that the City is considering,
the group gave the following recommendations:
Recommendations from the group:
Technical Assistance, such as that provided by Open to Business in the past and to be offered
by Elevate Hennepin in the future was seen as a very helpful resource.
Keep the City’s website better organized and updated. Most of the businesses had previously
viewed the City’s Economic Development webpage. It was noted that much of the information
was outdated. The sentiment of the participants is that “bad/outdated information is worse
than no information.”
Forgivable loans should be provided instead of grants to ensure the long-term commitment of
the awarded businesses.
There was a universal concern about gentrification. The recommendation was to provide
forgivable loans for improvements (both capital and tenant-owned fixtures) to older buildings
and operational loans to non-chain businesses operating in new buildings to offset the high
rents.
All the businesses felt that Richfield residents were extremely supportive of, and loyal to,
locally-owned businesses. There is a lack of information about who the small businesses are,
however, so the group recommended a locally-owned business directory on the City’s website.
It would be ideal to have a single “point person” at the City for businesses to contact with
questions or for guidance.
The City has a number of separate Facebook pages (police, parks, etc.). The group
recommended a Richfield Small Business Facebook page where residents could post their
positive experiences with a particular business and where businesses could post promotions
and job openings and where commercial realtors could post properties for lease/sale.
Finally, all the participants thoroughly enjoyed the opportunity to collaborate and participate
and there was a consensus that the group would be willing to continue to meet three to four
times a year to provide continuing input on the City’s Business Assistance programming.
Appendix D - 2
Appendix E
External Service and/or Funding Providers
Note: This is not an exhaustive list
Center for Energy and Environment (CEE)
• One Stop Efficiency Shop provides CEE staff (11 field consultants and 9 support staff) as
a liaison to lighting, HVAC and refrigeration rebates from local utility companies
(including a staff visit to determine eligible upgrades)
• Business Energy Assessments for mid-large sized buildings to determine best methods
and materials for making energy efficiency upgrades
• Administration/underwriting of City-funded grants & loans (both energy efficiency
related and otherwise).
Central Minnesota Development Company (CMDC)
Nonprofit organization that has been providing lending to small businesses for 45 years. As a
recipient of the “Premier Certified Lender” designation by the Small Business Association, they
have access to several funding sources that are not generally available. CMDC also provides
loan administration services to cities without charge (they are compensated through loan
origination and servicing fees).
Hennepin County (Department of Economic Development)
• Community Investment Initiative
o CII funding can be used for capital costs for development, redevelopment,
and/or expansion projects that provide business incubators; long-term
affordable commercial space for a minimum of three businesses; or for
organizations providing economic recovery and revitalization services. The
program does not fund revenue loss, or individual business/organization projects
that do not benefit multiple businesses or provide economic recovery services.
o In 2022, granted the following:
§ $400,000 Bloomington Small Business Development Center
§ $750,000 Brooklyn Center Entrepreneurship Market Plaza
§ $500,000 Brooklyn Park Small Business Center
§ $380,000 St. Louis Park Affordable Commercial Space Initiative
o In 2023, it appears that funding may be limited to projects adjacent to the
Bottineau Corridor Light Rail line.
• Elevate Hennepin
o Hennepin County launched the Elevate Hennepin program in December 2020
o To date, over 1,600 Hennepin County based entrepreneurs have participated in
the Elevate Hennepin program
o Elevate Hennepin offers free services for entrepreneurs, including:
o 25 hours of free business assistance from 23 (and growing) advisors in a wide
range of areas including:
Appendix E - 1
§ Accounting and bookkeeping
§ Finance
§ Legal
§ Marketing
§ Social media & web development
§ Human Resources
§ Strategic planning
§ Loan and grant consulting
o Peer-to-peer roundtables
o Topic-driven webinars and events
o Regional resources, all in one place
o Elevate Partnership: For a $5,000 annual cost (for cities of Richfield’s size) this
program provides availability of all Elevate Hennepin advisors, including “Open
to Business” advisors from the Minnesota Consortium of Community Developers
(MCCD). Cities participating in Partnership will also benefit from additional
communications and marketing efforts and will receive monthly or quarterly
reporting on outcomes specific to that city.
o Elevate City Navigators: Elevate Hennepin will designate one of their business
advisors to serve as the primary/initial point of contact with businesses in that
city. Furthermore, this designated advisor will serve as a resource to the City
staff in matters related to Elevate. The cost to a City of Richfield’s size is $5,000
per year and is only available to cities who participate in Elevate Partnership.
• Business Districts Initiative
o Annual funding availability of up to $200,000 annually with grants of up to
$50,000/project
o Eligible activities include: Business recruitment, district-wide marketing,
wayfinding, technical assistance, financial or legal services, streetscape and
façade improvements, business incubators
o Richfield has been recipient in the past for the Penn Corridor Façade
Improvement Grant
o Available only to suburban Hennepin County communities
o Three projects were funded in 2022
§ Bloomington Small Business Development Center ($50,000)
§ Edina Connectivity and Public Realm Plan ($50,000)
§ St. Louis Park Texa-Tonka Façade Improvement Program ($30,000)
o Grant applications are due in fall 2023
• Brownfields Cleanup
Minnesota Consortium of Community Developers (MCCD)
Micro Loans: Designed for start-up and early stage businesses. 3 - 5 year terms with loan sizes
up to $25,000 for retail or service businesses and up to $50,000 for manufacturing businesses.
Appendix E - 2
Advisor Express Loans: Loans up to $5,000 for small and early stage micro-enterprises. Loan
terms range from short turn around (financing for an event) to terms of 3 – 5 years.
Gap Financing: Designed for growing businesses. Loans provided in partnership with banks or
lending institutions for a range of business projects including business or equipment purchases
and leasehold improvements. Loan size and terms vary and can range from $5,000 to
$100,000+ depending on use.
Commercial Real Estate Gap & Acquisition Financing: Financing for real estate acquisitions and
property improvements for small business owners. MCCD Loans provide a portion of the small
business owner’s required equity contribution. This is permanent term financing with terms up
to 10 years (with longer amortizations) and no prepayment penalties.
Minnesota Department of Employment and Economic Development (DEED)
Minnesota Investment Fund
Available through the State of Minnesota, the Minnesota Investment Fund provides low
interest loans of up to $500,000 for business creation or expansion in industrial, manufacturing,
and technology-related industries (retail is not eligible). Projects must meet minimum criteria
for private investment, number of jobs created or retained, and wages paid.
In 2021, the eleven awarded projects averaged a private investment of $55 million per project
and, on average added 59 new jobs and retained 34 jobs. In 2022, the ten awarded projects
received an average of $895,000 in funding and leveraged an average of $17.4 million in private
investment. In other words, this is for large projects and is something for Richfield to keep in
mind when that once-in-a-decade big project comes along.
Job Creation Fund
The job creation fund provides financial incentives to new and expanding businesses that meet
certain job creation and capital investment targets.
In 2021 seven suburban Twin Cities businesses received Job Creation funding. The new jobs
created by these projects ranged from 16 to 150, the private investment ranged from $675,000
to $18.7 million and the grant awards ranged from $160-840,000. In 2022 four projects in the
state were awarded Job Creation Funds with an average grant amount of $568,750,000 and a
creation of over 85 jobs per project.
NextStage
Staff from NextStage serves as one of the technical advisors in the Elevate Hennepin program.
NextStage, which is a nonprofit organization, also provides direct lending of their own funds
and underwriting for loan issuance by others for small businesses. Their typical direct loan size
is between $1,000-$50,000 for a term of 3-5 years. They employ a review process that strongly
weights an entrepreneur’s creativity, commitment and growth, with reduced dependence on
Appendix E - 3
traditional credit standards of collateral, equity contribution and credit score. NextStage is also
able to administer loans on behalf of a city or other public agency.
St. Paul Port Authority (SPPA)
MinnPACE
The St. Paul Port Authority is the only administrator of the Property Assessed Clean Energy
(PACE) program in Minnesota. In this program a business can have 100% of the cost of eligible
energy improvements (in other words $0 down) assessed against their property for up to 20
years in bi-annual payments at a competitive interest rate. MinnPACE financing is limited to 20
percent of the assessed or appraised value of the property. The minimum assessment amount
is $50,000.
Xcel Energy
Partners in Energy
Xcel Energy Partners in Energy provides Minnesota communities with services to develop an
energy plan and assistance with implementing that plan. Each community has its own unique
energy needs and priorities, and Partners in Energy tailors its services to complement each
community’s vision.
More and more communities are realizing energy planning plays a critical role in helping them
reach their goals. The benefits of wise energy choices are diverse. By working with citizens,
businesses, and even their own government facilities, a community can shave dollars off utility
bills, promote renewables, drive resource conservation or contribute toward greenhouse gas
reduction goals. Partners in Energy helps address the challenge of identifying local priorities and
then structures a path that leverages all resources available; including an Electrical Vehicle Toolkit.
Appendix E - 4
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #4.
STAFF REPORT NO. 5
ECONOMIC DEVELOPMENT AUTHORITY
MEETING
4/17/2023
REPORT PREPARED BY: Celeste McDermott, Housing Specialist
OTHER DEPARTMENT REVIEW:
EXECUTIVE DIRECTOR REVIEW: Melissa Poehlman, Executive Director
4/13/2023
ITEM FOR COUNCIL CONSIDERATION:
Consideration of the approval of revisions to the Transformation Loan Program Guidelines.
EXECUTIVE SUMMARY:
The Transformation Loan Program provides a financial incentive to homeowners for initiating major
remodeling of their homes to meet their housing needs. Major remodeling projects are defined as exceeding
$50,000 in cost. These loans are eligible for an incentive loan equal to 15% of the project cost, not to exceed
$25,000. The loan is a no-interest, no-payments loan that is due and payable when the homeowner sells their
home or is forgiven after 30 years.
The Accessory Dwelling Unit (ADU) Pilot Program was first approved in November 2019 and was extended
through the end of 2022. The ADU Pilot Program allowed a higher loan amount for Transformation Loan
applications that included qualifying ADU projects. Constructing an ADU can be cost-prohibitive. Providing
more funding and resources offers the homeowner added incentive to complete their ADU project, while also
giving staff a mechanism for outreach and education to the broader community. Since the approval of the
ADU Pilot Project, two ADU applications were received. One project withdrew their application and one is
currently under construction. Staff regularly receives inquires about ADU project funding and would
like to incorporate the ADU Pilot Project Guidelines into the Transformation Loan Program
Guidelines (Guidelines).
Additionally, staff has been exploring ways to support energy efficiency and accessibility-related
upgrades through the Transformation Loan Program. Similar to ADUs, energy efficiency and
accessibility related projects can be cost prohibitive. In order to offset some of these costs, staff
would like to offer additional incentives for projects meeting these City housing priorities.
The following changes to the Guidelines are recommended:
Projects that include an ADU that meets City standards will be eligible for a higher loan amount of 20%
of project costs, not to exceed $30,000.
For projects that include energy efficiency or accessibility-related upgrades that total at least $10,000,
an additional $2,500 in loan funds will be available. These upgrades must be done in conjunction with
qualifying value-added improvements. Energy efficiency upgrades must include improvements from
multiple categories such as materials, heating and cooling, appliances, electrical systems, and
weatherization; subject to approval by the Housing Specialists.
References to the application period are updated to reflect current practices.
RE C O M M E ND E D AC T I O N:
By motion: Approve the recommended revisions to the Transformation Loan Program Guidelines.
B AS IS O F RE C O M M E ND AT I O N:
A.H IS TOR IC AL C ON T E X T
The Transformation Loan provides a financial incentive to homeowners for initiating major
remodeling of their homes to meet their housing needs. Major remodeling projects are defined as
exceeding $50,000 in cost. These are eligible for an incentive loan equal to 15% of the project
cost, not to exceed $25,000. The loan is a no-interest, no-payments loan that is due and payable
when the homeowner sells their home or is forgiven after 30 years.
The A D U Pilot Program was first approved in November 2019 and extended through 2021 and
2022. The A D U Pilot Program allowed a higher loan amount for qualifying A D U projects to offset
costs which are often a barrier. Two A D U applications were received. One project withdrew their
application and one is currently under construction.
A D Us offer homeowners the opportunity to either add rental income or provide housing for family
members such as elderly parents, adult children or those with disabilities needing extra care. I n
addition, A D Us provide the community with more variety in housing stock and affordable rental
options.
For the 2023 Transformation Loan Program, six loans were approved. I n 2022, six loans were
approved. Four of the projects were completed and two are wrapping up.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
T he Comprehensive Plan calls for the rehabilitation and upgrade of the City's housing
stock and specifically encourages use of the City's AD U ordinance to increase the
number of housing units and expand housing options for extended families.
The 2023-2026 Strategic Plan includes c limate resilienc y and equity and inc lusion as priority
goals. Providing incentives for energy efficient and accessible home upgrades are in alignment
with those goals.
Transformation Home Loan
The Transformation Home Loan Program is available for transformative home remodeling projects
with a cost of $50,000 or more.
The loan amount is calculated at 15% of the project cost, with a maximum loan amount of $25,000.
The loan has no payments and accrues no interest.
The goals of the Transformation Loan Program are to:
Provide an incentive to homeowners for initiating major remodeling on their homes to meet
their housing needs.
I ncrease the function and livability of small or outdated Richfield homes.
To inc rease the range of housing options available to individuals and families who want to
live or remain in Richfield.
Accessory Dwelling Units - Planning & Zoning (512.05 Subd 8(R), 518.05 Subd.8 (R-1).
I nternal (basement), attached or detached A D Us are allowed.
Detached A D Us are only permitted as part of a detached garage structure.
The owner of the property must occupy at least one dwelling unit.
C.C R IT IC AL T IMIN G IS S U E S:
The A D U Pilot Program Guidelines were only extended through December 31, 2022.
W hile there are no 2023 funds remaining for the Transformation Loan Program, staff would like to
have the updated A D U Guidelines ready in preparation of 2024.
Staff regularly receives inquiries about A D U resources.
D.F IN AN C IAL IMPAC T:
The Economic Development Authority (E D A) has currently budgeted $130,000 for the 2023
Transformation Loan Program.
All 2023 loan funds have been committed.
Design and construction of A D Us, energy efficiency upgrades, and accessibility improvements
can be cost-prohibitive. The revisions would allow higher loan amounts as an incentive for projects
meeting City housing goals (A D Us, energy efficiency, and accessibility).
E.L E GAL C ON S ID E R AT ION:
The terms and conditions of the loan would remain the same, and a mortgage and promissory note
would be filed with Hennepin County to secure the lien.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
The E D A may choose to not approve the recommended revisions to the Transformation Loan Program
Guidelines.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
N/A
AT TAC H ME N T S:
D escription Type
Transformation L oan P rogram Guidelines- D raft B ackup Material
A D U P ilot P roject B ackup Material
TRANSFORMATION HOMES
PROGRAM GUIDELINES
FOR STAFF ADMINISTRATION
REVISED: NOVEMBER 20172023
1
Table of Contents
Page Number
Table of Contents......................................................................................... 1
Statement of Purpose................................................................................... 2
Program Objectives...................................................................................... 2
Definitions..................................................................................................... 2
Data Privacy................................................................................................ 3
Criteria for Program Eligibility...................................................................... 3
Conditions of the Loan……………….………………..................................... 4
Eligible Improvements.................................................................................. 5
Application Procedure.................................................................................. 5
Hold Harmless.............................................................................................. 5
Remodeler Criteria....................................................................................... 6
Responsibility of Remodeler........................................................................ 6
Housing and Site Development Criteria.…………........................................ 6
Design Plan Review.................................................................................... 7
Forms/Exhibits............................................................................................. 8
2
TRANSFORMATION HOMES PROGRAM GUIDELINES
The Transformation Homes Program Guidelines have been developed as a tool for guiding
program administration. This document should not be interpreted as constituting any
contractual agreement or liability by the City or EDA.
Statement of Purpose
To help improve and maintain an aging housing stock by providing financial and technical
assistance to homeowners so they may make home improvements and undertake
expansions to accommodate their housing needs.
Program Objectives
• To provide an incentive to homeowners or home buyers for initiating major remodeling on
their homes to meet their housing needs.
• To increase the function and livability of small or outdated Richfield homes.
• To increase the range of housing options available to individuals and families who want to
live or remain in Richfield.
Definitions
Accessory Dwelling Unit:
A dwelling unit that is located on the same lot as a principal residential structure to which it is
accessory, and that is subordinate in area to the principal dwelling. These may be attached to
either the primary home or the garage, but cannot be freestanding and must meet all
applicable zoning code requirements.
Accessibility related improvements:
Improvements designed to allow for aging in place and/or to accommodate those with limited
mobility.
Application Period:
The set time period during which applications are accepted and reviewed when the alternate
application process is being followed.
Architectural Consultant:
Individual architect or architecture firm that participates in the HRA’s Architectural Home
Consultation program. Architects conduct an in-home meeting with the homeowners to
discuss design of home remodeling projects.
City:
The City of Richfield
EDA:
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Economic Development Authority in and for the City of Richfield
HRA:
Housing and Redevelopment Authority in and for the City of Richfield.
Homebuyer:
Loan applicant who is in the process of purchasing, remodeling and occupying a Richfield
home.
Homeowner:
Loan applicant who owns and occupies or purchases and occupies the home to be
remodeled.
Lender:
The primary lender working cooperatively with the EDA on home remodeling programs.
Loan:
Interest free loan offered by the EDA for remodeling payable upon sale of the house or
forgiven after 30 years.
Remodeler:
A licensed builder or Remodeler who meets the criteria established by the EDA, including all
state and local license requirements.
Remodeling Advisor:
Individual contracted with the HRA who meets with the homeowner to discuss ideas, estimate
costs and answer questions.
Energy Efficiency Improvements
Home improvements that increase energy efficiency and reduce negative impacts on the
environment. An energy audit must be completed and the results used to guide
improvements.
Data Privacy
The EDA is subject to Minnesota Statutes Chapter 13 (the “Minnesota Government Data
Practices Act”). Under the Minnesota Government Data Practices Act, the names and
addresses of applicants for or recipients of assistance under this program and the amount of
assistance received under this program are public data. All other financial information
submitted to the EDA for purposes of the loan application is considered private data.
Criteria for Program Eligibility
In order for a project to be eligible for a Transformation Homes Loan, certain conditions must
be met.
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1. Project costs for remodeling improvements must be $50,000 or more. The
Transformation Loan will be calculated at 15% of the project cost as determined by the
EDA, not to exceed $25,000. Projects that include energy efficiency improvements or
accessibility improvements totaling at least $10,000 will be eligible for additional funding
up to $2,500. Energy efficiency improvements must include items from multiple categories
such as materials, heating and cooling, appliances, electrical systems, and
weatherization; subject to approval by the Housing Specialists. For ADU projects, loan
amount will be calculated at 20% of the eligible project costs, not to exceed $30,000.
2. The Homeowner shall provide a copy of the estimate and project specifications from the
selected Remodeler for the work to be done. The Homeowner shall also submit house
plans, a site plan, and any other reasonable information requested.
3. The Remodeler selected by the Homeowner shall be evaluated by the EDA to meet all
remodeling criteria.
4. On a case by case basis, EDA staff may visit the applicant’s property and prepare an
action plan to ensure viability of the project.
5. No work may have commenced on the proposed project if application is being made
under the Transformation Homes Program. Nor may any completed work be considered.
Conditions of the Loan
1. An applicant’s project cost must be a minimum of $50,000. All aspects of the project
must be completed within a reasonable period of time such that all the work may be
considered part of one project.
2. Sweat equity may be allowed. The estimated loan amount would be the combination of
contractor and materials cost, but cannot include the value of homeowner labor. Sweat
equity projects must be completed within one year.
3. For applicants obtaining mortgage financing, the full EDA Loan amount may be placed in
an escrow account, if required by the Lender. The escrow account will be drawn upon in
prorated increments, simultaneously as funds are drawn upon from the primary Loan to
make payments to the Remodeler. Payment will be disbursed at the discretion of the
Lender, upon satisfactory EDA verification of work in progress. Before the Loan payment
can be provided to the Lender, the Homeowner must sign the Promissory Note, an
example of which is attached as Exhibit B.
4. In cases where an escrow account is not used, the primary Lender may require a
simultaneous closing with the EDA Loan at the time permanent financing is secured. In
these cases, the EDA may commit funds and authorize a project to begin prior to closing
on the Loan. No funds will be disbursed until closing has taken place.
5. In those situations where the Homeowner is not utilizing the services of a Lender, partial
and/or final loan payments may be issued to the homeowner at or near the end of the
project. Payments will be made upon EDA approval of homeowner submitted
5
documentation which will include a detailed list of expenditures, supplier and contractor
invoices or receipts, and lien waivers.
6. Before final payment is issued (by Lender or EDA), inspections will be required by both
EDA staff and the City Building Inspector. Upon satisfactory verification of work in
progress, or upon completion, payments will be disbursed at the discretion of the lender
or the HRA.
7. Copies of lien waivers or supplier/contractor invoices for the full amount of the payment
must be provided at the time of final disbursement.
8. Loan funds are available on a limited basis. The EDA is not responsible for the
unavailability of Loan funds to Homeowner.
9. No interest will accrue on the Loan; no monthly payments are required.
10. Payment of the Loan must be made in full within 30 days upon the sale, conveyance,
assignment, lease or transfer of the property. A Satisfaction of Mortgage in recordable
form will be provided upon receipt of payment. The Loan may also be paid in full at any
time.
11. If the Homeowner still owns and occupies the property, the lien created by the Loan will
be forgiven 30 years from the loan date listed on the Promissory Note and recorded
Mortgage.
12. The Loan is a lien against the property. If at any time during the term of the loan, the
EDA is asked to subordinate its position, the HRA subordination policy in effect at the
time of the subordination request will apply. Please consult the Richfield HRA
Subordination and Satisfaction Policy, available at
http://www.richfieldmn.gov/subordination or by calling 612/861-9778.
13. Only one Loan is available to a Homeowner at any given property location. A
Homeowner may apply for one additional Loan at a different property location no sooner
than seven years following the original Loan.
Eligible Improvements
Eligible improvements include:
a.) Value-added improvements, such as: additions, finished basements, kitchen and
bathroom remodels;
b.) Maintenance and repair, such as roof replacement, electrical or plumbing
improvements, or cosmetic updating such as painting or wall-to-wall carpeting,
when done in conjunction with value-added improvements;
c.) Energy efficiency and accessibility related upgrades; when done in conjunction with
value added improvements;
b.) Accessory Dwelling Units; and
c.)d.) Any other improvements as determined by the EDA.
Non-eligible improvements include:
6
a.) Swimming pools, hot tubs and greenhouses;
b.) Decorative landscaping.
Application Procedure
1. Meet with a remodeling advisor or an architectural consultant, if requested by the EDA.
ADU projects will be required to meet with an architect, either through the city’s
Architectural Consultation program or an architect of their choosing;
1.2. For ADU projects, applicants and their Remodeler will be required to meet with
Planning and Inspections staff prior to submitting an application.
2.3. The Homeowner submits a complete application, which includes an application form, a
copy of all bids demonstrating project costs, scopes of improvement, and plans, within the
time frame established by the EDA. The dates of the Application Period will be determined
and publicized by November 1 of each year.
3.4. An Application Fee is charged to cover the cost of administering the loan. The
Application Fee is due at the time the application is submitted. The Fee will only be
deposited if the Application is accepted for funding.
4.5. All applications submitted during the Application Period will be reviewed. In order to be
entered into the lotteryconsidered for loan funds, the application must meet the following
criteria:
a. Completeness of application;
b. Adherence to program guidelines;
c. Design and function of the project, including the presence of any special or unique
element that meets city goals (e.g. energy efficiency, accessibility, etc);
d. Demonstrated financial readiness;
e. Builder references (if applicable);
f. In cases where the homeowner is doing part or all of the work, demonstrated
evidence of experience and ability to complete the work within the required one-
year time period, and
g. Amount requested.
5.6. Once applications are verified to have met the above criteria, they will be approved on
a first-come first serve basis. If funding is limited and more than one applicant submits
their complete application on the same day, then a random lottery will be held to select
applications for funding. Selected applicants will be notified of funding no later than three
weeks following the submittal deadline.
6.7. A commitment letter will be issued verifying the reservation of funds to be provided at
closing.
7.8. If not pursuing a simultaneous closing, the homeowner will sign a mortgage and a
promissory note agreeing to the terms of the loan. The mortgage filing fee and registration
tax will be charge to the applicant. Following closing, work can begin on the project.
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8.9. If a simultaneous closing with end-financing has been requested by the Lender, the
homeowner may begin work once a commitment letter has been received, and building
permits issued.
9.10. EDA staff may reject or accept an application at its sole discretion.
If requests received during the Application Period do not exceed the available funding,
applications will be accepted on a first-come, first-serve basis.
Hold Harmless
To the fullest extent permitted by law, the Homeowner must agree to defend, indemnify and
hold harmless the EDA and the City of Richfield, their officers, agents and employees from
and against all claims, loss, damage, costs and expense arising from bodily or personal injury
or sickness, illness, or death of persons or damage to property resulting from or alleged to
have resulted from the Remodeler’s work and operations.
Remodeler Criteria
The Remodeler should meet a minimum set of standards and perform certain requirements in
order to participate in the program:
1. Meet any Lender requirements when the Homeowner is seeking Lender financing.
2. Provide adequate evidence of builder’s risk, comprehensive general liability and worker’s
compensation insurance coverage.
3. Provide a written warranty policy to the Homeowner and Lender.
4. Provide State Building/Remodeling Contractor license number.
5. Provide the following references:
• Five satisfied customers;
• Three major suppliers or subcontractors;
• Names of building officials from two cities where the Remodeler has worked in the
last three years.
Each Remodeler must fill out a Remodeler Form (Exhibit D).
Responsibility of Remodeler
The Remodeler must perform work in accordance with the specifications and contract
provided to the Homeowner. Any guarantee and/or warranties on the materials, supplies or
quality of work must be obtained by the Homeowner. Lien waivers must be provided at time
of payment. All property permits must be obtained per city code. NOTE: The City of
Richfield has a Point of Sale ordinance that requires all residential properties pass a housing
code inspection before sale. The EDA is not responsible for insuring compliance with this
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ordinance. Proper inspections should be arranged by the seller and any repairs made as part
of the purchase/remodel process.
Housing and Site Development Criteria
The following requirements apply to all Transformation projects:
1. Each home shall be a detached single-family dwelling. Exceptions to this may be
approved by the EDA.
2. At a minimum, off-street paved parking must be provided on the site in accordance with
the zoning code.
3. Three and four bedroom homes as a result of remodeling are preferred. However, a
minimum of two finished bedrooms and space for a third bedroom that could be easily
finished will be acceptable.
4. Two full bathrooms as a result of remodeling are preferred. However, a minimum of one
full bath and a 1/2 bath roughed in will be acceptable.
5. House design and appearance is a critical concern to the EDA. The house building lines,
window placement, and orientation to street must present a balanced and pleasing view
from all sides. Garage door dominance in design must be minimized. Blank walls without
windows or doors are not allowed. Roof line variation will be reviewed.
6. If exterior work is included, exterior materials should be low maintenance. Masonite
siding materials are not acceptable.
7. All landscaping and sod disturbed by the construction project must be repaired in a
professional manner.
8. Adjoining properties must not be disturbed by the construction process.
9. Construction and the finished structure must improve or not have a detrimental impact on
storm water drainage patterns in the neighborhood and on adjoining properties. Where
roofs direct storm water toward minimum (five feet) side yards, gutters may be required as
a condition of Loan payment.
Design Plan Review
1. The EDA must be provided with a set of the building plans, including building elevations,
and a copy of the land survey or site plan.
2. EDA staff will review the plans to ensure conformance with the Housing and Site
Development Criteria. Plan review by the Building Official is a separate process.
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3. All building plans must be prepared in consultation with an architect or a qualified
draftsperson.
4. If any element of the plan is in conflict with the above criteria, the Remodeler will be
notified.
5. Revised plans must be resubmitted for final approval.
6. All plan reviews will be completed by the EDA in a timely manner. Each plan submitted
will be processed individually.
7. The EDA may refer a set of plans to the County Assessor to make a preliminary
determination of value if there is concern about the extent of value added as a result of
remodeling.
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Forms/Exhibits
A. Transformation Homes Application Form
B. Promissory Note
C. Mortgage Note
D. Remodeler Form
E. Summary of Costs and Loan Computation
F. Letter of Commitment
G. Satisfaction of Mortgage
Richfield’s Transformation Home Loans
ACCESSORY DWELLING UNIT PILOT PROJECT
Updated: December 20, 2021
The objective of the Accessory Dwelling Unit (ADU) Pilot Project is to ascertain the demand and function
of a Transformation Home Loan within the construction of an ADU on a Richfield residential parcel.
The pilot project would allow for loans to be made under the Transformation Home Loan guidelines
through the end of calendar year 2022.
The following expansions would be included within the guidelines of the Transformation Home Loan:
1) The application fee of $350 would be waived
2) A free architectural consultation will be offered to the applicant
3) The loan would still be calculated at 20% of project cost, but the maximum loan amount raised
from $25,000 to $35,000.
4) Homeowners would be asked to agree to spotlight their projects on either the Richfield
Remodeled Home Tour or through a Case Study narrative for the city of Richfield.
To be approved for the ADU Pilot Project, an applicant must contact a Housing Specialist and begin an
application for the Transformation Home Loan.
Criteria for Project Eligibility:
1. Must be constructing an ADU that meets Richfield’s zoning code requirements.
2. Applicant and their contractor must meet with the Planning and Inspections staff prior to
submitting an application.
3. Must be an owner-occupied housing unit
4. Project must have a minimum cost of $50,000
5. Project must have guidance from an architect familiar with urban ADU construction.
Questions about the Transformation Home Loan or the ADU Pilot Program can be directed to the
Richfield Housing Specialists. (612) 861-9778 or housespecialist@richfieldmn.gov