5.4. SR 04-12-2004 - Laserfiche WebLink

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Consider Property Tax Abatement ['or Badger Ventures, LLC EDA/Ciry Council Meeting April 12, 2004 Page 2 of 3 The company currently employs 13 full-time staff, including 7 based m Minnesota and 6 m Indiana and elsewhere. The positions have an hourly wage between $16-75.00 per hour. The company anticipates creating up to 5 new positions at the Minnesota facili~ ~vithin 2-years. The new positions will likelv consist of management and engineers. Staff has been m contact over the past one and a half years ~vith Eric Haehn, Vice President/CFO of Grachent Technology. The company currently leases space m Blame, MN and is seeking a suitable location xvithm the northwest metro area to relocate. The City of Big Lake has aggressively pursued the company's relocation project, in addition to staff's efforts. Project Description Badger Ventures, LLC proposes to construct a 13,000-square foot light industrial/business park building for lease to Gradient Technology's office, research & development, and equipment hbrication operation. Badger Ventures proposes to purchase 2.05-acres within the Elk River Business Park and has requested that the city and county consider a write down of the land cost to $0 through a pay-as-you-go note to the limited liability company. The attached Preliminary Siting Proposal dated FebruaU' 2, 2004 and the Revised Prelhninary Proposal dated March 9, 2004 indicate the revised land cost/tax abatement assistance following the EDA's concept approval. Analysis Staff has been working with the company through the due diligence process for the financial analysis and the City's Tax Rebate Financing process. The Sherburne County Assessor's office has reviewed the building reformation and has provided the follo~vmg esthnated market value (EMV) of the proposed building project for 2005: EMV Building $ 609,700 EM-V Land $107,300 Total ENfV $ 717,000 The attached Tax Rebate Financing Projection Worksheet indicates the payment period given the assessor's estimates. The estimated payment period to provide a land ~vrite down to 50 is 12 years city and county. The MN Tax Abatement Statute allows jurisdictions to provide tax abatement over a 1 O-year period. A period longer than 1 O-years is allo~ved only follo~vmg another jurisdiction (school dismct in this case) denying the abatement request in writing. Staff believes that the term will liken be 10-years simply based upon annual inflationa~ increases to the market value and tax rates. Staff completed the ratings worksheet used to help analyze such proposals. The proposed project scored a "32", out of a total possible of 50 points, which equates to a "moderately desirable" project.