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1)The EDA consider amending the Business Subsidy Agreement.The EDA attorney researched the <br /> possibility and determined that amending the agreement to revise the wage and job goals is not <br /> specifically authorized under the statute. Further,the statute prohibiting amendment of the wage and job <br /> goals can specifically be interpreted to apply only to the JOBZ programs. Suggesting that it may not be <br /> required for other types of development districts/subsidy situations.To reduce liability for the EDA,any <br /> amendment that reduces the jobs/wage requirement could include a provision that the EDA would not <br /> make any representations that such reduction is in compliance with the business subsidy act and would <br /> provide for indemnification of the EDA by the Bank in connection with the amendment to the job/wage <br /> goals. In order to provide a"quid pro quo"basis for the reduction,it would be appropriate to reduce the <br /> benefit(Tax Abatement)by a determined dollar amount per job goals not met. Should the Finance <br /> Committee decide to recommend to the EDA this alternative,the EDA attorney will draft the <br /> appropriate language to amend the agreement. <br /> 2) Enforcement. Since the bank does not meet its goals,the bank will need to pay back the portion of the <br /> unmet goals going back to 2006 and the Business Subsidy Agreement will be void,meaning that the bank <br /> will no longer receive Tax Abatement going forward. If the committee chooses this option,EDA staff <br /> will need to work with the State who calculates the payback to determine the amount owed. <br /> Staff is asking that the Finance Committee make a recommendation to the EDA for their November 18, <br /> 2013 meeting. <br /> Financial Impact <br /> N/A <br /> Attachments <br /> • Elk River Business Subsidy Policy <br /> • Bank of Elk River Business Subsidy Agreement <br /> • 2011 Council BOE Extension Request <br /> • Notice of Public Hearing for extension <br /> • 2009 Extension Letter <br /> • 2011 Extension Letter <br /> • 2011 Extension Memo <br /> • 2009 Extension Memo <br /> • Letter from BOE <br /> • 2011 Notice of Public Hearing <br /> • <br /> N:\Departments\Community Development\Economic Development\EDA\Adminstrative\Agenda\Finance Committee Agenda\finance <br /> Committee\2013\11-5-2013\2.2 sr Bank of Elk River.docx <br />