Elk River continues to try to lure new restaurants

by Joni Astrup
Associate editor
Elk River Mayor John Dietz said he’s often asked what the city is doing to bring new restaurants to town.
The answer is: Quite a lot. But it’s not a particularly easy task.
Click here for demographic chart

One of the challenges is a simple matter of demographics. Most restaurant chains and higher-end restaurants have site criteria which must be met before they would locate a restaurant in a community, according to Elk River Director of Economic Development Annie Deckert. Those criteria vary but typically include factors like the population within a certain radius of Elk River and median income thresholds.
She gave the example of The Cheesecake Factory. When evaluating a proposed restaurant site, The Cheesecake Factory requires:
•250,000 people within five miles
•$70,000 average household income within five miles
By comparison, Elk River demographics are:
•approximately 86,000 people within five miles
•$60,000 average household income within five miles
Red Lobster is another example. Deckert said that restaurant requires 125,000 people within five miles of a proposed site, something Elk River doesn’t yet meet.
The city continues, however, to court restaurants.

Annie Deckert

For starters, Deckert has been working with a restaurant broker to raise awareness about available restaurant sites in Elk River, financial programs and so forth. There is no cost to the city to work with the broker, she said.
The city also has a link on its website at www.ci.elk-river.mn.us/restaurants for people looking for restaurant locations. It includes financial programs and incentives, available restaurant sites and other information.
The website also highlights demographic information. Deckert said that helps interested parties quickly determine if Elk River meets their criteria.
The city is also actively marketing its SAC and WAC payment program for full-service restaurants.
SAC and WAC are sewer and water availability charges. In Elk River, the fees are $4,201 per unit for SAC and $3,000 per unit for WAC. One unit is equal to 22 restaurant seats. So for a restaurant that seats 154 people, the fees would total $50,407.
Elk River has a relatively new incentive program that allows full-service restaurants (not fast-food) to pay up to $50,000 of their SAC and WAC fees in conjunction with their utility bill over a period up to five years. Restaurants typically are required to pay the fees up front when they get a building permit.
“It’s a very big competitive advantage to Elk River,” Deckert said. “This is a huge, attractive, incentive for restaurants.” Only one or two other cities in the state offer something similar.
The city also has a micro loan program available.
Meanwhile, Deckert has been “cold-calling” developers who work on planning sites for various chain restaurants. Many restaurant chains are not building now or are rehabilitating existing restaurants, she said, while others are closing locations.

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