01-20-2015 EDA MIN - Laserfiche WebLink

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Economic Development Authority Minutes Page 4 January 20, 2015 Commissioner Provo asked for clarification in the application process. Mr. Barnhart explained the abatement policy allows the EDA the flexibility and authority to determine the amount of abatement they were willing to authorize, either by abating the entire value of the property, or abating the increment. He stated in this situation, the Finance Committee made the determination that it was more likely to support the increment abatement versus an entire value abatement based upon the knowledge they received from the applicant. At that point, the applicant withdrew its application. Mr. Barnhart stated the costs the city incurred was for Springsted's analysis of the application and publishing costs for the public hearing; no profit was made. Commission Westgaard asked the applicant for their thoughts on why they felt they deserved refunding the full application amount of $5000 with the knowledge the city went through a two month evaluation process. David Walters, the applicant, stated in his initial meetings with then Economic Development Director Brian Beeman, and Mikayla Hout from Springsted along with building property manager Gary Gabrielson, they received estimated tax abatement figures of approximately $45,000 per year for around 12 -15 years, which he felt was a large part in making the project viable. He explained how events occurred, requiring his business to relocate and changed some of the the factors the project, which in turn changed how much tax abatement would be received. He felt staff confusion of not fully understanding the process led to misinformation and when this was realized, they were two months into the project and therefore withdrew his application. Commissioner Dwyer stated had the applicant received full and correct information from the start, the applicant wouldn't have applied, as it would have been reported to him that historically the EDA awards incremental tax abatements, not full tax abatements. President Tveite stated in his time serving on the EDA, he doesn't recall the EDA ever awarding tax abatements on the full value of an existing building, just newly constructed buildings. Commissioner Westgaard agreed with Commissioner Dwyer and felt the EDA needs to refund the entire fee to the applicant, even though there were costs incurred. Commissioner Dwyer felt a discussion with Springsted should take place requesting an adjustment of their bill, as he felt they should have known from the beginning of the application process that a full rebate wasn't the typical policy of the EDA. Mr. Barnhart stated he will pass that request onto Springsted. He stated the challenge for him was economic development staff didn't have the Authority's historical aspect and provide advice as such, and that policy does allow the EDA to give the full V