Session 08-01, a Regular Meeting of the Economic Development Commission was called to order by Acting Chair Hogan at 6:00 p.m. on May 13, 2008 at the City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska.

PRESENT: COMMISSIONER HOGAN, NEECE, RAVIN, SCARPITTA

ABSENT: COMMISSIONER RILEY (excused)

STAFF: CITY MANAGER WREDE

DEPUTY CITY CLERK JACOBSEN

AGENDA APPROVAL

It was requested that the Commission have brief discussions on the Garn smokeless wood heating manufacturers and Senate Concurrent Resolution 21. There was no objection and the items were added as New Business items F and G.

The amended agenda was approved by consensus of the Commission.

PUBLIC COMMENT

There were no public comments.

RECONSIDERATION

There were no items for reconsideration.

MINUTES APPROVAL

A. June 12, 2007 Regular Meeting Minutes

The minutes of June 12, 2007 were approved by consensus of the Commission.

VISITORS/PRESENTATIONS

A. Tina Day - Chamber of Commerce EDC Proposal for Small Business Development

Mary Tricamo-Park, the Chairperson for the Homer Chamber of Commerce Economic Development Committee and member of the Board of Trustees for the Chamber, thanked the Commission for the opportunity to speak tonight and provided a brief history on the Chambers EDC. She explained that about 9 months ago the Chamber decided to restructure the committee and they started to focus on things they could affect at the business level. Currently their focus is arts in Homer, education, and sustainable Homer efforts. The committee is built up of members that provide representation across the community and they work on items that relate to economic development and increasing job opportunity and job creation in Homer. One of their goals in terms of education is try to provide opportunities for high school kids before they graduate to help give them a sense that they are working toward something. She commented regarding the Kachemak Kids learning center which provided a safe place for the children of over 26 families and allowed those families to go back to work or enroll in college. In January the committee began discussion on business incubators as an effort to provide a central area for people who are interest in starting a new business or build up a business they already have. It would be a resource in Homer to help with information on things like forms, building business plans, and establishing networking for investments. The committee is focusing on collaboration to keep from duplicating efforts that others may already be pursuing and working together to put a good solid facility in place with funding going into one source. The UAA Small Business Development Office has been providing counseling to people in Homer and the committee is working closely with them. Mrs. Tricamo-Park commented that one goal in developing the business incubator is to take the fear out of the people who have good ideas, products, and service, that they want to offer but don’t know how to channel themselves as a business. Another goal is to encourage economic opportunity that fits into the City’s infrastructure. The group needs to continue to work with the City so the infrastructure that is put in place can be supported with the businesses and that the businesses they are trying to put in place will generate tax dollars to support the infrastructure. They are interested in helping current business grow, helping employers become better employers, and helping high school kids be good employees.

Tina Day, Chamber Director, commented that they presented some ideas to the City Council last night, in an effort to get them on board. She explained that part of the grant the Chamber received from the Rasmussen Foundation and the Federal Administration for the current chamber building was to work to expand small business development and economic development within the City. As they explained to Council last night, UAA and Small Business Development have put together a grant to bring a part time, 20 hour per week local small business development business counselor to Homer. For about 10 years Mark Gregory has been doing counseling, workshops, and small business development administration and workforce development in Homer, but he is only here twice a month. Ms. Day said this effort is being called a Small Business Development Expansion Project and it will include salary, benefits, and things needed by the person who fills the 20 hour position. They are asking the City to match the $37,000 grant for education, out reach, and workforce development.

Mrs. Tricamo-Park noted that data presented from SBDC office shows the demand for business counseling services in Homer far exceeds what they are currently capable of providing. Homer is a small business town and they want to put job opportunities and job creation in place that maintains the quality of life we want to keep in Homer.

Commissioner Neece commented that he has been working with Mark Gregory, he is on the Sustainable Homer Committee, and was on the Global Warming Task Force. He said one thing he has proposed is to set up an incubator. Homer’s incubator would be set up differently than what is in Kenai; he asked how the Homer incubator would differ. Mr. Neece added that there were funding cuts under the Murkowski administration for the EDD and he asked if that money was put back in the budget.

Ms. Day answered that she doesn’t know if the funding is back in the budget but can look into it. She gave the Commission an overview of the Kenai Economic Development District, noting that it is a physical building where people can go and it tends to be more focused on manufacturing and research.

Mrs. Tricamo-Park responded that they are out looking for funding to get started in Homer. She explained that one of their committee members, Michael Haines who is a Homer resident, goes across the country putting these types of things together. He assisted the new library in upgrading their resources and has been a great asset to their committee. Ms. Day noted that another idea the committee is looking at is an angel investment program. It is a program where people invest in a particular business to get it off the ground. Regarding the incubator in Homer, Ms. Day said they are currently looking at a virtual start up. The Chamber has office space where phone calls can be made and they are looking to expand and add two more offices. They are going to move forward with the business counselor regardless of whether the City provides funding.

STAFF REPORT

A. Memorandum EDC 08-01 from staff person Holen Re: “A fresh start for the EDC”

There were no comments regarding the staff report.

PUBLIC HEARINGS

There were no items for public hearing.

PENDING BUSINESS

There were no pending business items.

NEW BUSINESS

A. Introductions

The Commissioners introduced themselves.

Commissioner Neece said he came to Homer from Southeast in 1980. He has commercial fished, has had several business, and has a pretty strong background in economic development as he is an entrepreneur, and was involved in promoting the CBD in 1982 when the car dealership was coming into town. He has been promoting the incubator for a while. He has a background in building and welding and supports Vo-Tech. He said he worked at the high school and expressed concern that all the skill area classes are gone. It is something that needs to be connected back.

Commissioner Scarpitta said he has a B&B, a booking service and does Macintosh computer support and education. He taught a class through Community Schools, he has Alaska teaching credentials with endorsements, he is a member of the Chamber of Commerce EDC and chair of the Chamber Tourism Committee. He was in the Army, a commissioned officer in the Navy, a dog trainer, was involved in radio, and several other things. One reason he got involved with the Commission is because he sees so many people struggling here and he wants to help do something. Education at the high school concerns him. They do have some shop classes, but they turn out people in the same area where there are not enough jobs. He thinks the training should start before high school because it creates a culture of entrepreneurship. He is concerned that the kids leave home and don’t come back because there are not enough jobs here. He thinks there are several things that can be done and is passionate that if people want to be here, it needs to be possible for them to stay here and be able to support their families. Alaska is a family and if we aren’t helping each other we aren’t doing what we are supposed to do. Mr. Scarpitta said he put together a sample website for the Chamber to promote Homer in the winter. The Holland America ship that came into port was good and the Chamber did a terrific job, but he doesn’t think it was supported well enough by the City. He wants people to return to Homer and he knows other communities are doing more.

Commissioner Ravin said he resides outside the City and his goal as a member of the EDC is to stimulate, enable, and encourage the investment of private capital in equipment, facilities, and infrastructures that would provide sustainable economic growth, skilled employment opportunity, and long-term, year-round commerce in the community. Calling ourselves the halibut capital of the universe sounds great in the midst of the seasonal tourist herds, but it is a cruel joke in February when a youngster is looking for work. He would like to see year-round economic opportunity for all of us and our children. He would like to see more opportunities for the young people. Mr. Ravin said his son will leave and go to college, along with a lot of his friends, and he would like his son to have the opportunity to come back here, work in his trade, and raise a family. He thinks this group could influence the City and the City Council in that direction. Mr. Ravin said his business philosophy is that the seed or nucleus of a business venture is need. A successful business draws together three things, capital, resources, and labor. A government body or agency cannot create a successful business. It can regulate or obfuscate, but it can’t create. A business is the development of a resource by labor. As a Commission we have to be very careful to let business develop.

Acting Chair Hogan commented that he came here in 1974. His first business venture was in the founding KBBI. He started commercial fishing when he arrived here and has since had several fish processing businesses, currently operating the Auction Block out on the spit, and in the process of building a fish processing plant on the spit. Mr. Hogan said a few years ago he had a business venture in Nashville, Tennessee and the interesting thing was is that the job spin off here in Homer was probably more than what he created in Nashville. There were marketing people here surveying, doing graphic design, and web hosting. His interest in the EDC is his concern with where the town is going and encouraging business growth and development. He thinks we need to plan to accommodate growth and not prevent it.

They invited City Manager Wrede to comment. Mr. Wrede said he has worked on economic development projects over the years, primarily from the government point of view, which usually means what can be done to enable business to grow and create a climate in which business can flourish. That usually involves infrastructure development, tax policy, land use regulations, and things like that. City Manager Wrede commented that he has been here about six years, but to him, when it comes to business Homer has a lais·sez–faire attitude. He hasn’t seen the government itself try to take an active role in promoting job creation other than capital projects. He said he is excited about the presentation from the Chamber and encouraged the Commission to look at this. He thinks it is an exciting prospect because a large component of the economy here is small scale entrepreneurs. We don’t have manufacturing or a lot of big business, but we have the arts and music community, value added fish processing, and a lot of small business. He feels that what the Chamber is proposing would build on what Homer already has. He gave an example that the City has a 1% for the arts rule and when there is a public project 1% of the budget has to be spent on public art. When proposals have come in for projects, it has surprised him to see how many proposers’ have no idea how to put together a business plan, a budget, or a proposal. He is also excited about the Economic Development Plan in their packet. It hasn’t been updated since 1999 and it seems like people don’t take it seriously, but if the Commission does take it seriously and the Council adopts it and makes it part of the City’s Comprehensive Plan we could do some things there. Mr. Wrede said he would like to see the Commission focus on broad goals and a direction for the Community. He said we often hear what Homer is against and Homer has the reputation of being against everything. He said a challenge for the Commission would be to tell people what Homer is for. In his experience, he has talked to a lot of people who support economic development but it just hasn’t been defined what we mean by that, what type of economic development we want to see, or what kind of long term sustainable jobs do we want. He thinks this is an important Commission with an important roll to play in this town.

There was brief discussion regarding utilizing school interns. City Manager Wrede agreed that there might be times when the Commission will want people to gather information and do research. There was some discussion regarding liability. Mr. Wrede said the City has utilized students in the past.

Acting Chair Hogan asked that discussion of an intern be added to the agenda for next month.

B. Election of Vice Chair

The Commission discussed election of a Chair and Vice Chair. The agreed that since the Commission hasn’t had a meeting in over a year and they are starting with a new group, they should consider electing both a Chair and Vice Chair.

RAVIN/NEECE I MAKE A MOTION THAT WE POSTPONE THE ELECTION OF A VICE CHAIR UNTIL THERE ARE MORE OF US HERE.

Acting Chair Hogan commented in support of holding elections for Chair and Vice Chair at the next meeting.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

C. Lease Committee Appointment

Acting Chair Hogan stated he has a conflict of interest as he is currently in negotiations with the City on a lease.

This agenda item will be address on the next agenda as there will not be quorum to participate after Mr. Hogan is excused.

D. Memorandum from Planning Technician Engebretsen Re: Strategic Planning Facilitation

RAVIN/NEECE MOVED TO BRING THIS TO THE FLOOR FOR DISCUSSION.

There was no discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT.

Motion carried.

City Manager Wrede clarified that in this case facilitation would only be for the Commission to establish a strategic plan. The last Commission had a hard time staying focused on what their mission was and kept getting off on side issues, the hot topic of the day, and never got to the Economic Development Plan. They ended up getting bogged down in divisive issues like sport fishing versus commercial fishing and those sorts of things that are no win situations. Both are huge parts of the economy of Homer so why would the City want to pick one against the other. There were other issues as well. It got frustrating for staff and some Commissioners because there wasn’t much accomplished. He explained that Planning Technician Engebretsen is offering her help in facilitating a strategic planning session for this body to develop an action plan. She assisted the Parks and Recreation Commission with the same process and it was very beneficial for them.

The Commission discussed the need to be facilitated and comments were made for and against the idea. Points included:

· They don’t feel the need facilitated as it gives the impression that they are being steered.

· Since it is a new group and there would be some focus on getting them on target.

· It will help with the focus of bringing things to fruition.

· The idea of structure is good, but they shouldn’t be afraid of getting into contentious discussion.

· There needs to be a little bit of a zone of separation between staff and the Commission as a community representative body.

· Open discussion can be built into the process as long as the group knows what their targets are.

The Commission requested Planning Technician Engebretsen attend their next meeting for further discussion under pending business.

E. Economic Development Concerns

RAVIN/SCARPITTA I WOULD LIKE TO BEGIN DISCUSSION ON ITEM E.

There was no discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT.

Motion carried.

Commissioner Ravin asked what he referred to as a rhetorical question that is not focused directly at this body but one they may want to reframe and pose to City Council. His question is “What is the City prepared or willing to do to court, solicit, or encourage industrial development.”

a. What can be done to reduce blight on Pioneer Avenue?

There was brief discussion regarding Pioneer Avenue. It was noted that it is not necessarily attractive with an on going rotation of business in and out. Acting Chair Hogan commented that short of a healthy dose of prosperity into the community he isn’t sure what can be done. We need some base industry and new dollars into the community. People are struggling right now, but in Homer a lot of citizens rally against change. He asked if the Commissioner’s have a suggestion on what they can take to Council for a recommendation or if they need to ask what the Commission’s parameters are.

Commissioner Ravin reiterated his question, adding that “industrial” could be changed to “commercial” or “business”. He commented that there are empty properties along Ocean Drive. The empty buildings look bad and are bad as they are not generating revenue so they aren’t part of the tax base.

Commissioner Scarpitta concurred but noted that the Commission needs to come up with something they can forward to the City for consideration. He recognized the City’s the need for a small business foundation to build on.

City Manager Wrede agreed and said rather than posing a question the Commission could be much more effective by bringing forward strong recommendations on what the Commission thinks the City could do stimulate business in this town.

There was discussion regarding business incentives, tax breaks for locally grown produce, and inviting business to Homer. Tax incentives are a way to stimulate business, but sales tax changes have to be approved by the Borough. Property taxes are easier to work with as are lease rates for City properties on the spit.

Commissioner Scarpitta said in his eyes, sales tax is secondary to the property tax issue because of the tremendous property tax costs and he would like to see it addressed. When he talks to business owners, property tax is so onerous and even unfair in the way it is structured. If you want to encourage business, sales tax is a minor thing as the customer pays it, but something needs to be done with the property tax. He would support a recommendation from the City to the Borough or State that modifications in the entire property tax structure be undertaken because it is a clear economic development issue.

Acting Chair Hogan countered that sales tax does have a huge impact on the community, especially when Anchorage, a major metropolitan area of commerce, has no sales tax. There are plenty of people, including him, who will drive to Anchorage to do their shopping because it is worth doing. It hurts local businesses. Tax is a huge issue.

The Commission agreed to hold a work session on May 22^nd to further discuss economic development stimulus package recommendations and begin work on a resolution to bring forward on the next Commission agenda.

b. What can the City do to provide opportunities for high school and college graduates in Homer?

Commissioner Scarpitta commented that earlier they discussed the high school’s needs for skill type classes and part of the problem is funding from the school district to upgrade to modern technology. If the skills development courses are going to be addressed, the budget issue needs to be addressed. That could mean that they need to identify what the district needs for Homer High School and the Middle School, and then come up with a recommendation for the Council to recommend to the State that they give us extra funds.

c. What can the City do to pave the way for high-tech business growth in Homer?

Regarding High Tech businesses, Mr. Scarpitta said that some discussion that has come up at the Chamber level about trying to woo some of the high tech businesses to this area. There is a corridor between Homer and Anchor Point that wouldn’t specifically impact Homer as far as development goes. Other communities invite business executives up and sell the locations. One or two of them could potentially produce 100 jobs. There may be issues with training, but it would be a job base.

Acting Chair Hogan commented regarding opportunities for high school and college graduates. He thinks the Commission could take a first step by engaging an intern to help with data collection or other needs of the Commission. He asked that discussing goals and parameters for an intern be included as a worksession topic. There was no objection from the Commission.

F. GARN Woodstoves

Commissioner Ravin gave a brief overview of GARN, a company that manufactures woodstoves. They are extremely efficient and make almost no smoke. They are made for heating large industrial structures, like the Bay Club or boat building shops. There is an abundance of fire wood and this is a use for that resource. Mr. Ravin said Kelly Blue from the Bay Club told him about this and that the company is interested in building these wood furnaces in Alaska. They are interested in building a small shop and expand it as the need arises. Commissioner Ravin commented to the economic benefits of having them locate here. He asked the Commission if there is anything they as a body want to do to facilitate their entrance into the community. He explained that the company is also considering Fairbanks, noting that when the representatives go there they will probably be taken out for prime rib and treated well during their visit. He questioned why Homer can not do something like that.

There was discussion that it is not unheard of for cities to come up with incentive packages to bring in new business, however, that doesn’t seem to be the way in Homer.

City Manager Wrede commented that this comes back to Homer’s lais·sez–faire attitude. As a City we don’t do that kind of thing and having incentives for new business could be a recommendation for Council. Part of the value of the Economic Development Plan is that the Commission gets to help Council set priorities, looking at what type of businesses you want, the type of economy do you want to grow, and what steps do you want to take to encourage it. Point was made that there is a perception out there that businesses feel the City is interfering or slowing down what they need to do in the business. City Manager Wrede responded that it is not just the City Government itself, there are people who complain about regulations and taxes, but in some cases it is the broader part of the community that is sometimes resistant to change.

Commissioner Ravin commented regarding a “business ambassador” to take business owners out, show them around, show them vacant buildings, and so forth. City Manager Wrede said they don’t have someone to do that. He explained that when Northern Dynasty started talking about the mine they came to Homer about four times the first year. The City met with them and showed them around the area, not because the City supports the mine, but wanted to promote the Port of Homer for shipping and the some of the community expressed a lot of outrage. He recognizes that there are City’s that will roll out the carpet, but it hasn’t been the mind set in Homer, however it is something that could be changed.

Commissioner Hogan commented that there could be a market here for the GARN company with heating bills skyrocketing the way they are. He believes that someone should meet them and perhaps it is something that the Commission could facilitate.

They briefly discussed the Chamber being a more appropriate venue for welcoming them into Homer.

g. Senate Concurrent Resolution 21

RAVIN/SCARPITTA MOVED TO BRING SENATE CONCURRENT RESOLUTION 21 TO THE FLOOR.

There was no discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT.

Motion carried.

Commissioner Hogan gave an overview of status of the resolution. He would like to have discussion on this at the worksession and prepare a resolution.

INFORMATIONAL MATERIALS

A. 1999 City of Homer Overall Economic Development Plan

There was brief discussion regarding revising the plan. City Manager Wrede commented that the Commission could pursue it themselves or ask Council for help from staff by engaging consultants and so forth.

B. Homer Comprehensive Plan (current draft) - Economic Development chapter

The Commission agreed to have this as an action item at their next meeting in an effort to begin preparing input for the Planning Commission to consider in their review of the plan. It was recommended that the Commission look at the recommendations in the Climate Action Plan as well.

C. Economic Development Commission bylaws

D. Robert’s Rules of Order - The Basics

COMMENTS OF THE AUDIENCE

Members of the Audience may address the Commission on any subject.

There were no audience comments.

COMMENTS OF THE COMMISSION

Commissioners may comments on any subject, including requests to staff and requests for excused absence.

Commissioner Scarpitta commented that he is glad to see the group is excited about what is going on.

Commissioner Ravin commented that he is pleased to be working with this group and thinks they can do some good together.

Acting Chair Hogan echoed their comments and appreciates the way everyone interacts so easily, it is nice to have a meeting that flows.

ADJOURN

Notice of the next regular or special meeting or work session will appear on the agenda following “adjournment”.

There being no further business to come before the Commission, the meeting adjourned at 8:23 p.m. The next Regular Meeting is scheduled for June 9, 2008 at 6:00 p.m. There is a worksession scheduled for May 22, 2008 at 6:00 p.m. Both meetings will be held in the City Hall Cowles Council Chambers.

MELISSA JACOBSEN, DEPUTY CITY CLERK

Approved: