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City of <br /> EW REQUEST FOR ACTION <br /> River <br /> TO ITEM NUMBER <br /> Economic Development Authori <br /> AGENDA SECTION MEETING DATE PREPARED BY <br /> June 24, 2013 Clay Wilfahrt,Assistant Director of <br /> Economic Development <br /> ITEM DESCRIPTION REVIEWED By <br /> Consider Tax Abatement Application and make Brian Beeman,Director of Economic <br /> recommendation to City Council for Preferred Powder Coating Development <br /> REVIEWED BY <br /> Jeremy Barnhart,Deputy Director, <br /> CODD <br /> ACTION REQUESTED <br /> Consider Tax Abatement in the amount of$1,153,878, as requested by Preferred Powder Coating LLC. <br /> BACKGROUND/DISCUSSION <br /> Preferred Powder Coating submitted an offer to purchase 10.36 acres of land from the city for$1.67 per <br /> square foot excluding approximately one acre of land that is unbuildable due to a utility easement,for a <br /> total cost of$680,895. <br /> Preferred Powder is requesting tax abatement of$1,153,878 dollars over 12 years. The City amount of <br /> tax abatement would be $576,939 and the County would be $576,939. <br /> Staff has evaluated Preferred Powder's application and has scored it as a 36 out of a possible 45 points <br /> which qualifies it as a"moderately desirable" project based on the city's project priorities. <br /> The City Council is scheduled to hold a public hearing and consider the abatement application on July 1. <br /> The county has held a public hearing and plans to consider the abatement application on July 9 with land <br /> use review expected on July 15. <br /> Because the proposed financial assistance exceeds $150,000, a Business Subsidy Agreement is required by <br /> state statute. The Business Subsidy Agreement will require the applicant to create a minimum of 8 jobs <br /> and retain their existing 24 jobs. They will need to retain the jobs for a minimum of one year. All of the <br /> jobs must pay wages greater than $12.19 per hour. Preferred Powder stated that they intend to pay an <br /> average wage of$15 per hour. <br /> FINANCIAL IMPACT <br /> In accordance with the city's Tax Abatement Policy, Springsted Inc. completed a but for analysis and <br /> financial projection for the tax abatement project. Springsted analyzed the sources and uses of funds for <br /> the applicant, and used input from the developer,banker, and city staff to form its opinion. They <br /> determined that Preferred Powder's request for $1,153,878 is reasonable, and that the project would not <br /> occur "but for" the tax abatement in the amount requested. <br /> POWERED By <br /> A IR <br />