6.2 EDSR 12-16-2013 - Laserfiche WebLink

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ckyof El REQUEST FOR ACTION River- To ITEM NUMBER Mayor and City Council AGENDA SECTION MEETING DATE PREPARED BY November 21,2011 Annie Deckert,Director of Economic Development ITEM DESCRIPTION REVIEWED By Consider extension for meeting job and wage goals under the Cal Portner,City Administrator Tax Abatement and Business Subsidy Agreement for The Bank REVIEWED BY of Elk River—Public Hearing ACTION REQUESTED Following the public hearing,the Council is asked to authorize a second extension up to two years to The Bank of Elk River for meeting the wage and job goals outlined in the Tax Abatement&Business Subsidy Agreement BACKGROUND/DISCUSSION In April 2006,The Bank of Elk River entered into a Tax Abatement&Business Subsidy Agreement with the city for the renovation and construction of a 20,000 sq. ft. expansion of its downtown facility,and • committed to retaining 63 employees and creating 20 full-time jobs at a wage of$15/hour by September of 2009. Under the agreement,the developer is eligible to receive tax abatement for a portion of eligible renovation costs up to$300,000 provided on a pay-as-you-go basis. Under the MN Business Subsidy Law,public agencies are required to report annually on the progress toward job and wage goals for two years,or until the goals are met,whichever is later. As of the end of September 2009,the developer created 10 full-time jobs to date. At that time,the developer requested a two-year extension to achieve their job and wage goals which the City Council approved on December 21,2009,extending their job creation deadline to September of 2011. The attached letter from The Bank of Elk River indicates the developer's response in their attempt to achieve the wage and job goals. In 2011,the bank experienced a re-organization/downsizing of the company and eliminated 10 positions at the Main Street Office. As of September 30,2011,The bank employs 59 full-time and eight part-time employees. Due to economic conditions,the developer is requesting the city's consideration of up to a two-year extension to achieve these goals,allowing time for economic_conditions to improve and increase the demand for job growth. The request would extend the job creation deadline to September 2013. The developer has been invited to the council meeting to answer any questions. FINANCIAL IMPACT The agreement allows that if goals are met in part,the city has the option to reduce the subsidy on a prorated basis to the jobs created, or consider an extension of the term to meet the goals. To date,the developer has received total tax abatement in the amount of$78,572.61. The term of the tax abatement � 1 ■ ErEl 1r NAME