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City Council Minutes Page 4 March 8, 2004 ............................. THE APPROVAL OF THE TAX ABATEMENT AND BUSINESS SUBSIDY AGREEMENT. MOTION CARRIED $-0. 5.3 Consider Concept Approval of the Gradient Technology, Inc. Expansion Site Proposal Director of Economic Development Catherine Mehelich updated the Council on the staff report. Gradient Technology proposes to construct a 13,000 square foot light industrial/business park building for their office, research development, and equipment fabrication operation. The company is relocating from Blaine. Ms. Mehelich reported staff has proposed the company purchase up to two acres in the Elk River Business Park and the City consider a write down of the land cost (at $1.61/square foot) to $0 through a pay-as-you-go tax abatement note to the company. Eric Haehn, Vice President/Chief Financial Officer of Gradient Technology described the company operations. Ms. Mehelich stated there has been concern by EDA/Councilmembers on whether or not the Elk River Business Park is eligible to receive TIF on TRF assistance. She stated that a third party attorney has reviewed the TIF 19 project agreement and provided written opinion to staff that the agreements do not preclude the City from providing public assistance to eligible businesses that locate in the Business Park. Gradient will submit a similar application for TRF from the County. MOVED BY COUNCILMEMBER TVEITE AND SECONDED BY COUNCILMEMBER KUESTER TO APPROVE THE PRELIMINARY PROPOSAL CONCEPT FOR THE GRADIENT TECHNOLOGY PROJECT AND TO DIRECT STAFF TO COMPLETE THE DUE DILIGENCE PROCESS FOR THE FINANCIAL ANALYSIS AND TAX REBATE FINANCING PROCESS. MOTION CARRIED $-0. 5.4 Consider Release of Arts Alliance Funds Executive Director Sharon Tracey of Elk River Area Arts Alliance distributed to the Council the M,J'e, Central Minnesota Arts Community Magazine, stating that the Arts in Harmony art exhibition had been featured in this publication. She stated how grateful this organization is to the City for the continued support in the organization's efforts to community development through the arts. She updated the Council on the future of the arts and stated that the Handke Center will be looked at after the referendum. She asked that the Council release the fgl0,000 that was designated for their organization. MOVED BY COUNCILMEMBER KUESTER AND SECONDED BY COUNCILMEMBER MOTIN TO RELEASE THE $10,000 DESIGNATED FOR ELK RIVER AREA ARTS ALLIANCE FOR THE YEAR 2004. MOTION CARRIED $-0. 5.5 Consider Petition for Water and Sewer Services. City Administrator Pat Klaers explained that this item had been tabled from the February 23, 2004 meeting to receive an opinion from the attorney regarding the applicability of the