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HomeMy WebLinkAboutCCMinutes_2005_07_05 3 � 4 Brookings City Council July 5, 2005 The Brookings City Council held a platuiing meeting on Tuesday, July 5, 2005 at 5:30 p.m., at City Hall with the fo.11owing members present: Mayor Scott Munsterman, Council Members Tom Bezdichek,Michael Reitz, Tim Reed, Julie Whaley, Ginger Thomson, and Michael Bartley. City Manager Alan Lanning, City Attomey Steve Britzman, and City Clerk Shazi Thornes were also present. A motion was made by Bartley, seconded by Reed,to amend the agenda adding an Executive � Session to discuss pending litigation. All present voted yes; motion�carried. . Discussion re�arding Retail Development Ordinance No. 22-05. Mayor Munsterman highlighted the PowerPoint presentation regarding retail development in the City of Brookings. Munsterman said in November 2003 the city set a direction for sales tax revenue generation with the following steps: � 1) Regionalize and expand economic development efforts. 2) Grow retail development—he noted how much lower Brookings"Effective Buying Income (EB�"was from other SD first class cities. Why do people leave Brookings to shop? 3) Adopt a new promotional model. � Bezdichek clarified that the Council is dealing with two separate issues on July 12th: an ordinance that allows the city to provide large retail businesses with incentives and action to provide Lowe's with an incentive. Without the ordinance,there would not be such an opportunity as Lowe's. . Alan Lanning, City Manager, said there are a series of additional action steps in the Lowe's transaction that will also be brought to the July 12ih Council meeting to include a development agreement with Lowe's. Kevin Ohm said the city's action to provide Lowe's with a retail incentive would makes the city a direct competitor with his business. He felt$� million is a token to a large company like Lowe's and is an insult to all independent merchants in this town. Todd Brost said the numbers for Lowe's are probably just being made up because they change twice a week. The original projection of$35 million was based on an average Lowe's store generating$700,000 in 2% sales tax revenue (urban store). However,�this Low�e's store is projected to have 120 employees which is smaller than their average store. His research found Lowe's has two different store sizes. In 2003,Zowe's iiecided to expand into smaller markets with$20-25 million grossing stores (rural store). o Lanning clarified that this would be a rural performing store according to the Lowe's Director of Real Estate. Lowe's hired a consultant that puts together packages for new stores. Lanning has been using the consultant's calculations of$35 million annual sales since December 2004. The consultant is no longer working for Lowe's. Lanning was provided with the rural performing store projected sales of$20-25 million and all calculations were changed immediately upon learning this�new information. . Brost said things sold to government agencies, contractors for resale, and anything shipped out of state are not taxable. According to the SD Dept. of Revenue,there are two major groups that would encompass Lowe's sales and 20%of those sales are tax exempt: He projected that the sales tax revenue would be in the red for the first 5 years. Other Brookings businesses are doing $30M in taxable sales and employing 200 people according to the 2000 census bureau. How much revenue would be shifted? A good chain store takes away half of existing businesses' sales. When a new store opens,how much of their sales are shifted from other stores—70-80%? Out of$20M annual sales, $15M will shift from other businesses. Brost asked how many other cities were contacted. . o Bezdichek noted that Rapid City is the only city in SD with a Lowe's store. He said any retail business coming into a community has an effect. He asked Brost if he was just not favorable of any incentive to large retail. No. 395 Brost said he does not support anything that contributes to a net loss in the Brookings sales tax revenue. He cities studies that claim locally owned stores return 45% of their sales back to the local economy and chain stores only return 14%. This will result in a net decrease of$3M. He also asked how the city would fund legal fees to defend themselves against future lawsuits from any competing businesses denied subsidies. o Munsterman questioned Brost's statistics on taxable sales. Brost claimed that onty $SM would come from new sales and the remaining $15M would be pulled from present businesses. o Bezdichek said either this ordinance will pass or fail. If it passes and the voters also approve an incentive, there won't be any lawsuits. He cautioned Brost not to mislead the public into thinking there would be lawsuits. If the ordinance fails, nothing changes. o Steve I3ritzman, City Attorney, said incentives are a reasonable expenditure of public funds and there wouldn't be a legal basis to make a recovery. The SD Legislature has enacted statutes that provide for the use of public fund.s for this express purpose. There would be no basis for a legal claim. Munsterman noted Watertown's EBI is 104%. Brost felt Watertown has had a bigger trade area for 30 years due to their population base. George Ust, Courtesy Plumbing, asked how the $2.5 million incentive number was arrived. If Lowe's doesn't anticipate enough sales to meet expenses, why would they want to be here? Is that temporary? Will Lowe's need another $2.S later to continue? o Lanning said the number is based on an internal calculation of 13%with a$22 million investment by Lowe's. All other Lowe's sales information is proprietary and not public. Ust said not many people from Sioux Falls and Watertown are likely to shop in Brookings. o Lanning explained that the object is to get business here that will attract shoppers to Brookings. He used the example that his children don't know who "Bob's Hardware Store" is on Main Street, His kids have grown up with Target, Best Buy and other "big boxes. " Brookings needs to be thinking about 30 years from now if we want our children to stay here. Our kids want the big boxes. Lowe's is second in their industry and will draw from a bigger market. Additional businesses will came because they are here. Kevin Ohm said he doesn't have a problem with Lowe's. But why should Lowe's come on his dime and not their own? They need to pay their own way and they don't need a gift. Dennis Reed, Running's Farm & Fleet, is from Marshall, MN with 29 stores in 4 states competing against Menard's, Lowe's, and Home Depot. He has seen them come to town and what they do to local businesses and local economies. His kids have also grown up with the big boxes and don't know"Bob's Hardware." One of the reasons they don't' know"Bob's"is because those people are being pushed out daily by big boxes. He thinks it's good that Lowe's would want to locate in Brookings. He has seen what they do to your sales. He urged the Council to do further research on the sales numbers, particularly those from existing businesses. Making any city tax revenue investment to bring a competitor to town will not bring a positive taa�impact on city revenue. He urged the Council to table until they get the true facts. o Munsterman asked how he would proceed. He suggested contacting Rapid City and Watertown about the impact of their big box stores. Brookings net tax revenue has grawn as we11 as any of those cities and we don't have the big boxes here. o Munsterman said going back 20 years with data is a good idea. Brookings is trying to grow its market. The Brookings EBI is way below the average. Our citizens leave town to purchase clothing and home improvement supplies. Brookings is only maintaining inflationary increases. Reed asked if other communities have 6uilt the big boxes and haven't gained market share, why would Brookings stop the leak. Brookings to shop. What is the existing market? He doesn't believe market area will expand with one store. o Bezdichek asked if Marshall gives any incentives for retail development? No. Reed said Lowe's will look at the Brookings market and study the demographics. If the market is strong enough, they will build a store. Giving them$10 million or$2.5 million will not be a factor. The City would be wasting its money. Gail Robertson said he was not representing any business that would be affected. He noted that earlier in the day over 20 people met to discuss this issue and they represented over 200 part time and full time employees. They have a vested interest; their motives are selfish with personal 3 � 6 investment. If they seem desperate, he would be too. He does represent a viewpoint on economic development in that the city has invested millions in industrial development. To that end, the city has developed an extraordinary mix of economic development. With this type of development, you can't find a single person threatened by another business coming to town. It's because these industries are not competing with the locals. Look at 20 years of history. Look at total economic development activity and variables. There are lots of comparisons how Brookings stacks up against Watertown. Brookings is now"4th"in the state and not"6th." Yet the City of Brookings hasn't really grown that much. What has remained stable and continues to grow are the little towns. The reason for that is industrial development—people have a job. We've been doing studies for 30 years. There is a wealth of statistics and one of the most telling studies is between Codington and Brookings County. With Codington County, their general growth plane has always been more volatile. With Brookings, go back 50 to 75 years and SDSU has made Brookings very stable. With the diverse industrial development mix, when one drops off another picks up. Those industries weren't looking for giveaways. A business may study for 10 years if they want to relocate, but when they decide they want to do it in 10 days. Land is the biggest factor that brings these industries to town. Has Brookings given gifts? Yes, cheaper than market land has been given to new industries. The City purchased land at market value and it could have been 10 years later before it was sold. But that was not the reason those people came. There was no local harm done other than increased competition for employees which means higher wages. Robertson noted the 58%EBI and leakage to other markets. No one wants to speak ill of SDSU, but they have the highest number of employees and those professors don't spend money locally. They hoard their money and go off on sabbaticals as opposed to the blue collar worker who can't spend money fast enough within a 20 mile radius. How much of the money is leaking verses how much is actually being retained? First National Bank would be a good source of information. The savings levels in this town are way beyond what it should have been. He suggested that there is no single local business person who hasn't exceeded the budget to give back to the community. However, box stores set a budget using very creative bookkeeping. A car wash using their parking lot will be assigned a value that counts against the giving budget. Robertson likes little town stores and little town owners who spend their money here and take that risk and are still taking that risk. He has a problem with subsidizing competition. They will take the low hanging fruit first, which are the small businesses in town. Brad Whaley said he is one of those"blue collar" people and has shopped in about every business in town. He does lots of projects and can't always find what he needs in this town, sending him to shop in Watertown, Mitchell and Sioux Falls. He doesn't just go to one store,but rather makes a day of it. He feels for these people who are afraid that it will hurt their business. But we heard the same stories about Wal-Mart. He noted all the out-of-state visitors in the Wal- ' Mart parking lot bringing money to Brookings. They probably shop like he does by spending the day visiting other businesses in Brookings. He'd rather keep his money in town and not ever have to leave. He is a taxpayer and a consumer and doesn't have a problem seeing his tax dollars used to bring businesses into this town. Brookings needs to do anything it can to meet SDSU's Division I needs. He has also seen local businesses compete with the new Super Wal-Mart by adding new lines and expanding by offering things Wal-Mart doesn't carry. He hasn't seen a lot of stores closing because Wa1-Mart came to town. He has seen city money wasted foolishly in the past. But in this case,the city needs to do anything it can to get these stores in. Ginger Thomson said many of the Council members are business owners and know what it is like to be a small business. But the city's general fund is drying up with less money from BMU. The sales tax trend is going down. The tax pays for the capital improvement projects in Brookings. Once the Lowe's investment debt is retired, the new sales ta�c generated from Lowe's can be used for the general fund or those projects the citizens want such as the downtown streetscape,parks or the Boys & Girls Club. But we can't have all those things unless we get more money in the general fund. She doesn't like polarization in the community and wishes for a happy medium all could agree on. Ohm asked who is next and who will the Council say no to. 397 Brost said the $2.5 million subsidy is a huge loss that the city will have to make up and any extra sales tax will not cover it. Beth Peterson said if the City didn't give Lowe's $2.SM,the money would be in the General Fund right now. Roger Prunty said he's been in business 56 years where there is a lot of competition. He has never gotten a job in which he's not the low bidder—we know how to compete in Brookings. Most of his business is out of town. Giving Lowe's money is galling to all small business owners. Every small business would have benefited from a small boost from the City. Sma11 business owners have managed to be in business all these years and we need to support them. Joann Perso said there is a Lowe's in Sioux City and Fargo and none in between. Do we know what those cities offered in return for Lowe's to come to them? What did it do for them? o Lanning said retail incentives are not as common in the Midwest. He cautioned against using the Wal-Mart comparison because it is a 30 year old study. Wal-Mart isn't a good example because they will build anywhere they aren't barred. An incentive is needed to attract a large retailer to come into a market that doesn't fit the traditional mold, like Brookings. Many communities are providing$20-40 million to finance developers giving up sales tax for 20 years. But those communities now are experiencing huge increases from the building of the stores and the creation of primary jobs. The economic development model is diff'erent from 40 years ago. If the effect of primary jobs was all that was needed, Brookings should be a powerhouse based on the employment numbers. But the realiry is Brookings is dead last in local spending. There has to be a catalyst to reverse that trend. o Todd Meierhenry, Bond Counsel in Sioux Falls, said he works with all states'statistics. Many studies indicate that 7% of the economy is industrial and manufacturing will decline in the Midwest. Rural communities in the Midwest cannot rely on indushy. Mitchell, along with many other cities, has turned to commerce to generate income. The locating of Cabella's and complimentary businesses in Mitchell has stopped their sales tax leakage to Sioux Falls. A significant number of communities from rural and depressed areas are seeing the same issues as Brookings (i.e. increasing aging population,fewer children, and fewer women between ages 17-40). The government has been studying what can be done to attract younger people to stay in rural communities. To do that, communities must provide facilities (parks, recreation) and commerce options. If communities do nothing, the trend won't change. Bringing in Cabella's and the retailers that followed has resulted in people staying in Mitchell rather than driving to Siou.x Falls. It is now more difficult to attract a qualified candidate in Mitchell than in Sioux Falls. As for big boxes not supporting a community, they have size and purchasing power unmatched by others. If Brookings does nothing, it will continue to do the same. Cities are faced with the issue of how to create enough economic activity. Economic incentives are within discretion of the governmental bodies. An ordinance would set up a procedure to evaluate applicants. Cities are giving incentives to retailers all over the country. These incentives are legal and cities are given statutory authority without limitations. Scott Dominiack said Mitchell gained 42%in sales tax revenue since Cabella's arrival and Brookings gained 40% in the same amount of time. He can't see how Cabella's benefited them. He said Lowe's average market size is 75,000 people. He didn't think Lowe's would keep shoppers in town. What amount of sales tax gain will we have from Lowe's? It will take 20 years to pay off$2M and only have a$100,000 gain. o Munsterman said in 1998 Mitchell was averaging$500 EBI per covered worker and now are $700 per worker. Cabella's came in April 2000. Looking at market share, Brookings doesn't have it. Everyone has an inflationary increase and all probably grow with the average market. But Brookings has lost the market and we're trying to gain it back He doesn't know how Lowe's predicts their geographic market—they are experts of their own. Dominiack asked how much Lowe's wili generate. If they average $20 million in smaller markets, sma11 towns may only do $10 million annually. � � V o Munsterman said some of Watertown's $70 million could be shifted back to Brookings. There are also more people in Brookings Counry than Codington. Brookings has a higher per capita income than Codington. Dominiack said their drawing area includes Brookings and always will. Isn't Lowe's buying the "K-Mart"building? K-Mart is an example that sometimes the big retailers don't know what they are doing. Mason Wheeler,retired farmer, said he has listened to the statistics until they don't add up to anything and no one can prove that they are reliable. The bottom line is this is a bad ordinance. He can't imagine how the Council could consider this ordinance and feel good when buying big retail business to compete with existing business. If Lowe's can't make it on their own,then we don't need them. This is bad public policy. Council members are elected by the citizens to be private thinkers, not to be yes men to each other and to the city manager. What is right or wrong from an ethical standpoint? Diane Ust said what the Council considers an incentive; she considers being corporate welfaze and thinks it's unethical. Brian Darnall commented that most of this is about an ordinance and not about Lowe's. The scariest part of the ordinance is that this could keep happening over and over. He doesn't want this to be an attack on Mr. Lanning, but does anyone know him? Was anyone else involved in the deal with Lowe's? Who decides who is worthy of subsidy? Who do I go to voice my displeasure? This is morally wrong. How is this funded? When Lowe's leaves town in 3 years, who gets stuck? The City won't have any land,just their bonds. T'here are many questions and he hasn't heard any answers from anyone. With this ordinance,the City Manager can do this with anyone he chooses. Is that good public policy and does that make sense to anyone? o Munsterman said the City Council designated the City Manager to be responsible for attracting large retailers and handling negotiations. He has kept the Council informed on his progress. o Lanning said the funding would occur through traditional bonding or an interfund loan existing from cash in the bank. With a loan, bonds are still sold and purchased to be repaid with second penny sales tax collection. The project would break even in 6 to 7 years. That doesn't include any additional retail development and sales tax generation spurred by Lowe's. Donna Ramsay started her own business 6 years ago taking a chance on a derelict building. The comment she hears from her clients is, "Where has this been? This is what Brookings has needed, a nice place downtown where people can have nice events." People are not saying a big box is what they've been waiting for. Can we meet all consumers' needs? No. The City needs to encourage the businesses where the owners live here, start things and take risks. Grow from within and provide the things the community does need. Her reception and party business has tripled this year. Maybe if the City provides some assistance to other businesses that do the same thing that Lowe's does,that may be a11 they need to expand. There doesn't seem to be any interest in looking at existing business. She recommended the City start with home grown businesses that have demonstrated commitment to the community and work in the community. Bringing in an outside business is a panacea and is not realistic. There needs to be some way to factor in the Brookings community value, ethical standards, strength, and long-term economic stability for Brookings. This is not a community of fast buck artists. She feels the Council's use of a retail incentive is unethical and unwise. o Munsterman said one of the things that have driven this is consumer demand. Ramsay said novelty is important, that is part of the reason we go to other places. That is not the basis to form some economic decisions and policy. A vacation somewhere else doesn't mean something is wrong with where you live. We have businesses that serve every commodity that Lowe's would deal with. Why not give some incentive to those businesses to improve their product line, expand their buildings,rather than bringing in someone else that does the same thing? o Munsterman said this ordinance wouldn't prevent them from doing that. The City is concerned with the retail leakage of what is leaving Brookzngs. How can that be expanded and captured? 399 Ramsay said using city tax dollars as an incentive is not ethical in any case. It is not okay to give to someone from the outside that has no commitment or history in Brookings. Why not give away money here? o Bartley asked if she was asking the Council to give her something. This ordinance would allow her to do that and the City doesn't have any legal mechanism to do that. Ramsay was opposed to using tax dollars as a bribe to get Lowe's to come here when they could easily afford to come here on their own. Make them take the risk. Before starting her business she studied the market. If she didn't do a good job of studying, she may fail. If she fails, it's because the market couldn't bear it, she did crummy wark, or had the wrong idea. Lowe's has the right to do the same thing. They should buy at market value and the City shouldn't be involved. Selling property under market value isn't right. Dan Little said the ordinance has short-circuited a very important group,the BEDC, and empowered the City Manager to do economic development. Why not use the skills of the BEDC and their newly hired executive director? The City Manager has a lot to deal with running the city departments. He is concerned about who establishes the development and why the City Manager is the point person rather than being a coordinator for infrastructure. o Bartley responded that in the history of BEDC&EDC, it was founded to do industrial business and not retail recruiting. Historically, it has been that way since inception. Last year the City Council directed the City Manager to take over recruiting large retail developers. No one was in charge of large retail development and no one was working on it. It was not their (BEDC, EDC, Chamber) major focus and it slipped to the wayside. Retail sales produce more sales tax clollars. That is how we fund things. A separation of functions happened last fall. This project started when the Executive Director was retiring and the Economic Development Model was restructuring. Brookings has never had any direction for the retail side. This is a bold first step. The ordinance is the first project. It will allow the Council to address other issues that Brookings has. The industrial and retail components of economic development may merge at a later date. The end result and goal is ta increase jobs and the sales tax base. The BEDC board gcrve support to the ordinance and the land transfer to Lowe's. Roger Pn.mty commented that Alan Lanning doesn't need anyone to defend him. He is doing his job by bringing this to the Council. We won't always agree with him, but everyone can still get along. Munsterman said the City is trying to build a healthier economy through job growth. The City already gives DBI and the Chamber money to help in the existing sector. Promotional campaigns have tried to maximize capacity in Brookings. The Council directed the City Manager to see what he could do to attract large retail. The Chamber talked about it for years, but no one ever took the ball and ran with it. The City Council makes the final decision. It this ordinance passes, there will be a referral time period. Retail incentives are being done across the country. Does this fit Brookings? Reed asked if the ordinance is referrea, are the other documents invalid. Britzman said the referral process will combine all related issues. If referred, there would be one election with several different issues on the ballot? Kevin Nyberg said it is all about risk and investment, citing Ace, Runnings,Hy-Vee, and Lewis as examples. All of those businesses came to Brookings because what Brookings was and what their business had to offer. None are afraid of Lowe's. Lowe's should just have the same risk as the other businesses. Tom Yseth considers retail the most pure entrepreneurial spirit in America. It was a mistake to direct the City Manager to do this. The reason BEDC hasn't done retail is because no one thinks we should do it. The Council should have never directed the City Manager to do this. This discussion should have been 7 months ago. He urged the Council to stay out of retail. "Let entrepreneurial spirit ring." o Munsterman noted that the discussions hac�been going on since November 2003. Dennis Reed, Running's, asked if there was anyone on the Council that knew they were also voting on a Lowe's. Reed said he thought it was only action on the ordinance. Reed said he didn't believe the Council has all the facts. 4Q0 Thomson said she knew emotions were running high and thanked everyone for their suggestions. The feedback she has received from consumers is that they would welcome a store like Lowe's. From a budgetary standpoint of the City, it also seems like a good way to grow the community. We've tried many tactics to get people to shop in Brookings. Executive Session. A motion was made by Bartley, seconded by Reed, to enter Executive Session for purposes of consulting with legal counsel on pending litigation at 8:13 p.m. with the City Council, City Attorney, City Manager and City Clerk present. All present voted yes; motion carried. A motion was made by Thomson, seconded by Reed, to leave executive session at 8:33 p.m. All present voted yes; motion carried. Brookin�s Municinal Airport. Patrick Dame,Brookings Airport Manager, said the Brookings Municipal Airport Master Plan Development Concepts dated July 5,2005 is intended to look at a 20 year growth period matching the community's needs with the facility's needs. The following individuals were present: Bob Babcock, Principal—Helms and Associates, David Black, Principal—HNTB, Andy Olson, Planner—HNTB, Bruce Lindholm, Program Manager—South Dakota Department of Transportation-Air,Rail and Transit, A1 Heuten,Executive Director— BEDC, Mike Reger, Vice President for Administation— SDSU, Tom Schauer, Program Manager —Federal Aviation Administration—Airports District Office (FAA-ADO), and Steve Obenauer, Manager—Federal Aviation Administration—Airports District Office (FAA-ADO). Babcock said his firm was hired for the Master Plan a year ago. They found enough problems with the Brookings facilities that a plan was warranted(Railroad,proximity of housing and businesses, 6 mile creek, 2 cemeteries, floodplain/wetlands). The following plan was presented to the Council: Forecasts Recan. In this process, they inventoried the existing facilities and forecasted the growth of operations based on the flight school enplanements from charters and carriers, and evaluation of the new critical aircraft and its needs. Runway Length Requirements are based on the ERJ-135's performance manual. This is a charter aircraft, not a commercial service aircraft. The ERJ-135's m�imum take off weight (MTOV� is 44,000 pounds. In the table below,percentages represent the percent of MTOW at which the ERJ-135 could operate at BKX(Brookings). Air ort Development Concepts Concept Evaluation-Alternatives were ranked according to how well each met the criteria. A-No B-Minimal C— D-New E-New F-New G-New Action Improveme Railroad East1 West North/ NE/SW Airport nts Expansion Runway South Runway Runwa Resolve land use 1 3 3 2 5 5 7 incom atibilities Provide runwa extension 1 1 7 7 7 7 7 Home/business urchases 7 4 4 1 2 6 3 Other Issues 1 7 1 6 5 1 4 EnvironmentalIssues/Process 5 5 3 5 3 1 1 Cost 7 6 2 5 1 4 3 Im rove Wind Covera e 2 2.5 3 2.5 1.5 1 3.5 Total Score 24 28.5 23 28.5 24.5 25 28.5 Net cost in millions 3.5 6.0 $15.5 12.5 $22.0 $14.3 $14.9 Alternatives eliminated A—Land use issues not resolved C—Railroad relocation not feasible E—Too many home purchases would be required and a new north/south runway needed F—Extremely large wetland impacts of 300 acres Scorin�: Resolve land use incompatibilities-3, Provide runway extension-1, Home/business purchases-4, Other Issues-7,Environmental Issues/Process-5, Cost-6, Wind Coverage-2.5: Total: 28.5 � 40l Summary -Alternative B: This alternative was the least expensive, but least flexible. It is the best alternative if the City is willing to limit its capability to attract new corporate aviation users and to retain existing users, if the City decides airport should not or does not need to grow significantly, or if the City thinks that nearby development will not continue to impact existing airport. This option would shorten the runway from 5,200 feet to 4,000 feet. Runway length is critical to precision approach landing systems for vertical and horizontal guidance. A 5,000 foot runway is the common threshold for precision approach aircraft. This option would squash the future needs of the flight school. Dr. Michael Reger, SDSU Executive VP for Administration, said the University has made a major emphasis on their aviation program. As a result, the University expects its aviation program to grow based on the demand from students. Another factor is the SDSU Athletic Department will need to travel to "away"games and visiting teams will fly here. Landing and departing from Brookings would have a significant savings to the University. However, any plans to shorten the runway would hinder SDSU's ability to land any larger aircraft. He projected a regular SDSU athletic season would be 17 to 20 flights. Reitz asked how big of an airplane could land on 4,000 foot runway. A 4,000 foot runway would eliminate most corporate traffic. The 3M Company uses 6,700' to 7,200' runways. A "Falcon 10" seats 5 people and a"Falcon 20" seats 8 to 10 people. A 4,000 foot runway is long enough to accommodate the Cessna 172 and some multi-engine planes. In 2003,the corporate usage of the airport was 158 turbo jets. There are currently 3 jets per week utilizing the airport. Scorin�: Resolve land use incompatibilities-2, Provide runway extension-7, Home/business purchases-1, Other Issues-6, Environmental Issues/Process-5, Cost-5, Wind Coverage-2.5: Total: 28.5 Summarv-Alternative E This alternative provides runway length to meet forecast fleet requirements. It does a good job meeting other goals. It is the best alternative if the City decides the airport should grow and if the City thinks that nearby development will not continue to impact the existing airport. Scorin : Resolve land use incompatibilities-7, Provide runway extension-7, HomeBusiness Purchases-3, Other Issues-4, Environmental Issues/Process-1, Cost-3, Wind Coverage - 3.5: Total: 28.5 Summary -Alternative G This alternative provides runway length to meet forecast fleet requirements. It also provides the best potential for avoiding future land use problems and does a good job meeting other goals. It is the best alternative if the City decides the airport should grow and if the City thinks that nearby development will continue to impact the existing airport. It was noted that a land selection analysis was not done. It would have a new 6,000 foot runway with room for another 1,000 foot expansion and a new crosswind runway. Development would occur around the airport with a new access road. This option scored highest in land use and capability because the city would start fresh,purchasing and rezoning land to meet the city's needs. On cost,this option wasn't the highest because the city will recoup costs in selling the current airport for industrial/business needs. On environmental impacts, it scored the lowest possible. Scorin : Resolve land use incompatibilities-7, Provide runway extension-7, Home/business purchases-3, Other Issues-4, Environmental Issues/Process-1, Cost-3, Wind Coverage-3.5: Total: 28.5 Next Steps The must City decide on the future direction of the airport. 1) If either alternative B (Existing Conditions Improvements) or E (new north-south runway) is chosen,then the Master Plan would be completed with that alternative shown as the preferred alternative. The Airport Layout Plan(ALP)would be completed with that alternative depicted as the ultimate condition. 2) If Alternative G (New Airport) is chosen,then the Master Plan would be completed with G as the preferred alternative, with Alternative D as "Option B". A back-up option is needed because a new airport would be subject to the results of a future site selection study. Then a � � � Site Selection Study and preliminary environmental study would be performed, the ALP updated, and the design process for the new airport would begin. Recommendation 1} Alternative B's impact on airport facilities will harm aviation activity in the Brookings area and it should not be pursued. 2) Alternative D is appealing, but Alternative G, if an appropriate site can be found, solves more problems and provides more flexibility. However,the feasibility of Alternative G depends on finding an appropriate site. It was noted that Option D would require purchase of 100 acres with nothing to sell. The group's overall recommendation was that the Master Plan be completed with Alternate G as the preferred alternative, with Alternative D selected as"Option B" and that the City proceed with a Site Selection Study. Willmar,Minnesota's Airport was cited as an example New Airport- 5,500' Runway with precision approach,Parallel Taxiway, Turf Crosswind, General Aviation Terminal and Fixed Base Operators (FBO), Hangars, Parking, Access Roads, Very High Omni Directional Range (VOR), Land Purchases. Project Cost: FAA: $12,096,172 (63%), State: $2,984,742 (16%), City: $4,048,424 (21%) for a Total of$19,129,338 (100%). Bezdichek asked if the new Supreme Court ruling on economic development abandonment had any impact. If federal money was used for the original airport, could land sale proceeds be used for another airport? Bruce Lindholm, SDDOT, said the City has the power,under state law,to condemn property for airport purposes. Bartley asked if the $14.9 million is a new cost to the City or shared by FAA. o The cost would be shared, but the percentage may not necessarily be 95/S percent. Bartley asked what the determining factor would be. o Funding is a moving target depending on discretionary spending made by the FAA. Funding has increased fn recent years allowing increased opportunity for projects like this. Fargo and Bismarck were cited as recent examples of cities receiving the benefit of increased discretionary funding. For a new airport to occur, all levels of governmental entities would have to work together. What criteria does FAA use in deciding to fund a new airport? o They look to recommendations of consultants, decisions of the governing body, and the needs of the airport and the community. The FAA has a priority system. A new airport is typically low on that scale, but they look at extra issues such as what does a new airport mean to the community? What is your real need? They think Brookings has a demand, unique issues, and many good characteristics to make this project worthwhile. For a new airport to succeed, support is needed all the way up the line. Reed asked how difficult it would be to find an accepta.ble location for a new airport. o The response to that question is difficult to answer until the consultants start looking. In Willmar, MN, they looked at three general areas and 10 different alternatives and found one that worked. The location would need to be far enough away yet, close enough to be inviting. Willmar has a S,S00 foot runway with precision approach,parallel taxiway, turf crosswind, General aviation terminal, hangars,parking, access road, VOR, and land purchases for a total cost of$19M(FAA $12, State $3M, City$4M). They started planning eight years ago and site work began three years ago. Reitz asked what the cost of Alternative G was without the sale of the land. o $27.S million was estimated, taking the middle to low averages of land. It was clarified that the city would have to put up their share of the project even if the old airport land had not sold. Bartley asked about impacts of increasing minimums in the Instrument Landing System(ILS) on passenger service. 40 � o '/4 mile visibility runway remains the same. However, a Runway Protection Zone (RPZ) size isn't determined that way. Nuvigational equipment is approved and funded by the FAA and tlaey seriously questioned the responsibility of the airport to raise minimums just to change RPZ. How would it impact Brookings 20 years from now if the ILS minimums were raised? o The airport could not be used 2 to S days per year due to bad weather. Pilots would have to see 3/4 of mile to land rather than a % mile. The original ILS installation was $1.25 million. Today, it would cost$500,000 to $600,000. The ILS was installed as a Congressional line item at the bequest of some entity. If the minimums are reduced, it is not worth cost to maintain. The Brookings Airport would operate on GPS approaches and the FAA would no longer have ongoing maintenance and satellite on navigation. All pilots in the Aviation Program want to train on an ILS system. Patrick Dame, Brookings Airport Manager, said the SDSU Aviation Program relies heavily on the ILS for training. Removing the ILS would be detrimental to corporate traffic and aviation students, negatively affecting everyone using the Brookings Airport. He stressed that the Brookings Airport is a good general aviation facility, but it doesn't serve corporate and growth needs of the Brookings community and doesn't allow for further growth. He and the airport consultants are looking at the next 20-50 years of growth. Al Heuten, BEDC Director, noted a recent survey of corporate entities looking at the Midwest as trade centers and its ability to accommodate new growth. The survey found that air service to communities was critical to economic development and growth. Bezdichek asked if Sioux Falls is expected to build a new airport to the north. Dame said the Sioux Falls Airport is not moving. He noted that the Brookings Airport is regional, serving more t1�an just the taxpayers in city limits. Ladell Swiden asked if commercial aviation had been written off,noting that it was not referenced in the presentation. o No, the consultants assumed that commercial aviation would contanue and the terminal would expand by SO% in next 20 years. It was not mentioned in the presentation because their focus was on runway length requirements because charter aircraft are more demanding than commercial aircraft. Dame noted that the Brookings Airport employs 42 people full and part time, generating a payroll of$527,000. Transient passengers coming into Brookings spend $75 per day generating $400,000 annually. Commercial passengers generate $250,000 in spending. Munsterman asked what the proposed timetable was. The original schedule was to complete the master plan by September 2005. The consultants will require guidance from the Council in the next 2 to 4 weeks. The City Manager was asked to bring this issue before the Council in four weeks,with funding recommendations from staff on a 10-year timetable with second penny funds. Adiourn. A motion was made by Reitz, seconded by Whaley,to adjourn. All present voted yes; motion carried. Meeting adjourned at 10:10 p.m. 0 C1TY OFe - o'a� "'ona;o'QOo o 'ps*.'f' A x S�9 �:` Sc M erman,Mayor c d� O •�+....N'f.�.o r//��)�!, 0 G 1 S ari Thornes, Brookings ity Clerk