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Ells -Vft <br /> _ Request for Action <br /> River <br /> To Item Number <br /> Mayor and City Council 7.1 <br /> Agenda Section Meeting Date Prepared by <br /> Public Hearinj October 20,2014 Jeremy Barnhart,Deputy Director, CODD <br /> Item Description Reviewed by <br /> Tax Abatement and Business Subsidy for Cal Portner, City Administrator <br /> Stonesthrow Properties,LLC (Coin-Tainer) Reviewed by <br /> Action Requested <br /> Hold a Public Hearing to consider business subsidies in the form of a Tax Abatement and a microloan <br /> for over$150,000 for Stonesthrow Companies,LLC. <br /> Background/Discussion <br /> The city has received applications for tax abatement and a microloan from the city's 4`''microloan <br /> program, to support the acquisition of the improved property at 17834 Industrial Circle NW and the <br /> future expansion of Coin-Tainer, a coin wrapper and raffle ticket printer with a 65% market share <br /> nationally. Included in the business subsidy package is a microloan being considered by the EDA, <br /> although that funding may not be distributed until DEED approves the loan program. The maximum <br /> award eligible under this microloan is $200,000. Therefore,the public hearing considering the business <br /> subsidy should consider the maximum amount requested, $543,750. <br /> Coin-Tainer's operations were located in Milaca until their facility was destroyed by fire in January of <br /> 2014. They initially relocated to vacant space on Jarvis Street and have now found a desired long-term <br /> home at 17834 Industrial Circle. They plan to purchase the property through a contract for deed which <br /> will allow for expansion as existing leases terminate. <br /> The tax abatement and microloan will allow Stonesthrow Properties,LLC to purchase the property and <br /> provide operating capital for Coin-Tainer Co.,LLC to rebuild the business. Stonesthrow is owned by <br /> Dave Walters and his wife,and Coin-Tainer is owned by Dave Walters. <br /> State Statute requires local government agencies to hold a public hearing to receive comment on tax <br /> abatement and business subsidies. <br /> Tax Abatement <br /> The attached memos from Springsted summarize the analysis completed to date. The project includes <br /> the retention of 26 existing jobs and the creation of 10 new jobs. The 26 jobs were not in the City of Elk <br /> River in January of 2014. The project scored 30,which is the low end of the moderate desirability range. <br /> Our Financial Advisor,Mikaela Huot,will be at the meeting to support the analysis. <br /> Staff s review assumes abating taxes of the entire property for 12-15 years. The county policy allows for <br /> abatement for only the incremental change in value of the property,pre and post improvement. <br /> P O IN E 8 E U A Y <br /> 1 CIA R <br />