Action Team Report Back Meeting

Itasca Economic Developement Corporation
June 14th, 2006
Blandin Foundation Board Room

Present: Tom Osborn, Steve Arbour, Chris Van Den Heuvel, Jim Woehrle, Doug Hanson, Peter McDermott, Lucy Flessner, Kris Ferraro, John Ward, Scott Thompson, Christina Andersen

Today’s meeting was the second Action Team Report Back meeting for 2006. Reports were given as follows:

Air Service

• Establish an economically viable scheduled air service at the Grand Rapids/Itasca County Airport

Team member Chris Van Den Heuvel reporting

The private investment group looking to establish air service from Grand Rapids to Chicago has discontinued their plans. Action Team members have been looking at several models for air service which include:

• Air service provided by a mature airline (i.e., Mesaba Airlines) in the Grand Rapids market at a subsidy or revenue guarantee. Initial contacts have been made.
• Establish a company to operate air service between Grand Rapids and Minneapolis using either turbine propeller or jet aircraft. A number of models have been drafted using various aircraft types. Team members have been discussing a partnership with a company that is interested in assisting with this model.

The Blandin Foundation has agreed to pay for a consultant to review the Team’s selected model for economic feasibility.

Team members have looked at the economic benefit to the Itasca County area both in terms of quantifiable and non-quantifiable benefits. The quantifiable benefit appears to be around $ 2.7 million per year. The non-quantifiable benefits may be even more important than the quantifiable benefits as they attract economic activity. Members have identified non-quantifiable benefits and are discussing these with a consultant.

Blandin Paper & Retention

• Help position the Blandin Paper Mill as a preferred expansion site for UPM

Co-Chairs Steve Arbour and Tom Osborn reporting

The Minnesota DNR released the Final Environmental Impact Statement (EIS) at the end of April. On May 22 nd the DNR issued its Record of Decision finding that the EIS adequately addressed the environmental impacts of the project. Air and wastewater permits are in process but may not be issued until fall.

Workforce Housing

• Address issues of affordable workforce housing for the median income and below group for the purpose of providing quality of life, security and workforce development opportunities

Chairman Doug Hanson reporting

The Action Team developed a PowerPoint presentation to use with governmental and non-governmental groups to help illustrate workforce housing issues and concerns. The Team has presented the PowerPoint at the Town Hall III meeting in Marcell on May 4 th and the Rotary group at MacRostie Art Center. The Team is open to all opportunities to show the presentation to any interested group.

Team members have met with the Mayor of Calumet to discuss a 26 acre parcel of land owned by the city which has available water and sewer. The land has a JOBZ designation but Calumet is considering it for a residential subdivision. Team members have offered to work with the city to develop a Request for Proposal (RFP) for developers to see if there is interest in doing a residential development on the property. The Mayor of Taconite was invited to a Team meeting to discuss housing opportunities in the City of Taconite also.

The Team is examining the potential use of a Land Trust as a component of housing ownership that would lower the cost of ownership. Members met with a representative of the Northern Communities Land Trust to get more information about the Land Trust in developing housing.

Lakes Management

• Promote collaboration among private and public entities for improved lake management as an essential strategy for economic prosperity

Chairman Scott Thompson reporting

The Lakes Management Action Team has three objectives for 2006; they are: 1) Broaden collaboration, 2) Increase understanding of decision makers of the impact their decisions have on water resources, and 3) Develop strategy for improved shoreland management and “smart development”.

Broaden Collaboration:Team members attended an Island Lake Association meeting early in May to share information on the North Central Lakes Project and discuss ways to improve the water quality of Island Lake. Members attended the Fish, Weeds, Water event at the end of April. The event was videotaped and replayed on ICTV. Action Team members helped with the publicity and promotion of the meeting and helped with meeting coordination.

Increase Understanding: Team members participate on the North Central Lakes Project Education and Conservation Easement committees and work with media to increase public awareness of the importance of water quality on economics.

Strategies for improved shoreland management:Team projects include promotion of new Alternate Shoreland Standards, participation on the South Central Itasca County Intergovernmental Planning Board Wastewater Initiative Team, and promotion of incentives for improved shoreland management.

Mesaba Energy

• Revitalize local economy by providing community support to Mesaba Energy project in building cleanest coal fueled power plant in the world

Team member Peter McDermott reporting

Senator Norm Coleman was in Grand Rapids on Saturday June 10 th to celebrate the award of $ 36 million from the Department of Energy earmarked for the Excelsior Energy Project. The money will be used in the design and construction of the plant. Current timelines for the project call for construction to begin as soon as 2007 with the plant being operational in 2011. IEDC commissioned UMD Labovitz School Research Bureau to provide a report on the Economic Impact of Constructing and Operating an Integrated Gasification Combine-Cycle Power-Generation Facility on Itasca County. The report is available at www.d.umd.edu/sbe/departments/bber. The 2006 legislative bonding bill included $12 million for infrastructure for the Minnesota Steel and Excelsior Energy projects and the Supplemental Finance Bill included an additional $ 11 million designated to Itasca County for infrastructure for the Minnesota Steel project.

The Minnesota Public Utilities Commission is considering Excelsior Energy’s petition for a 603 megawatt Power Purchase Agreement with NSP. Two sites for the project are being considered in the EIS permitting process with the preferred site being the one located north of Taconite.

Minnesota Steel

• Revitalize the local economy by providing community support to Minnesota Steel Industries’ use of ore reserves to produce steel near Nashwauk.

Team member Peter McDermott reporting

Representative Loren Solberg and Senator Tom Saxhaug were successful in securing legislation related to infrastructure for Minnesota Steel and a required land exchange involving the County, the State, MN DNR and Blandin. A separate group from the Action Team is working on the land exchange issues. The Minnesota Steel project is going through the EIS and permitting processes. Company officials are meeting with equity partners and working on debt financing and have reported that financing could be in place by October. If the EIS and permitting processes are not delayed, the potential start of preoperational stripping and plant construction could begin in the spring of 2007. At full capacity, the plant would employ 700 people in high paying jobs.

IEDC engaged UMD Labovitz School Research Bureau to conduct a study on the Economic Impact of Constructing and Operating Minnesota Steel Industries LLC in Itasca County. Copies of the report can be accessed at www.d.umn.edu/sbe/departments/bber .

Poverty Reduction

• Implement a plan to reduce poverty in the Itasca economic region that shows a public/private partnership

Chairman Jim Woehrle reporting

The Poverty Reduction Action Team has formed five sub groups to work on different plans to reduce poverty.

1. Business mentorship of person on public assistance

• Team volunteers are working on a way to mentor a person on public assistance and offer work training. The Team is looking at possible funding options available to pay a wage to people that are on public assistance who take part in the mentorship program.

 2. Toolkit for small businesses to create high value employees

• Team members met with the Chamber to discuss the creation of a “toolkit” designed for employers to help them create high-value employees. The target audience is small business in the area with ten or less employees.

3. Transportation for people to get to work

• Team members visited with Midwest Minnesota Community Development Corporation (MMCDC) in late April to learn more about their Project Jump Start program and the affordable housing development program that MMCDC operates. The Jump Start program is designed to provide car loans to low-income working people in need of reliable transportation. A challenge is how to cover the coordination of the project and how to finance the $1,500 grant that serves as a forgivable loan to make the car more affordable. The sub committee is exploring ways to buy cars at auction for the project through local car dealers with little or no mark-up.

4. Businesses encourage their employees to volunteer in the community

• The focus of this sub group is to encourage employees to volunteer for high impact volunteer activities that build relationships especially with people who live in poverty. The group will prepare a handout for businesses outlining the reasons that businesses should encourage their employees to volunteer in the community.

5. Create community leadership around poverty issues

• Two training sessions facilitated by KOOTASCA Community Action and Gary Stokes, a trainer from Move the Mountain Leadership Training Center, have been held to mobilize the community to reduce poverty. A third session is scheduled for September. Two desired outcomes of the sessions are 1) A leadership training tailored to low-income leaders that addresses barriers to community planning participation and 2) Community leadership roles for low-income citizens that starts with providing feedback to systems that provide services to low-income people.

Youth Retention

• Attract and retain young adults and families to the Grand Rapids area.

Chairman Christina Andersen reporting

The Youth Retention Action Team has obtained a list of Grand Rapids High School class officers from the years 1995 through 2006. Assignments have been given to Team members to be in charge of contacting one year’s officers and begin an email contact list. Christina Andersen has been working with Mary Witte of the Itasca Technology Exchange regarding the utilization of the Vtrenz software program purchased by IEDC last year which is a marketing technology automation software.

The Grand Rapids Chamber has indicated that the Chamber would host a page on their website for the Youth Retention Action Team. The Chamber also provided leads for possible web page developers.

Team members are planning a “Mingle with Singles” event for Monday, June 26 th at the Ground Round. The event is intended to provide the opportunity for singles between the ages of 21 – 35 to meet other young people in the area at a special social event planned for their age group.