6.1 EDSR 05-18-2015 - Laserfiche WebLink

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Elk River Request for Action To Item Number Economic Development uthority Finance Committee 4.1 Agenda Section Meeting Date Prepared by General Business Aril 28, 2015 Amanda Othoudt, EDD Item Description Reviewed by GATR of Sauk Rapids, Inc. Tax Abatement review Jeremy Barnhart, Deputy Director, CODD Reviewed by Action Requested Consider and provide recommendation to the EDA on the following GATR of Sauk Rapids, Inc. tax abatement application. Background /Discussion The City has received an application for tax abatement for GATR of Sauk Rapids, Inc. The County has also received a tax abatement application; they have considered that application at their April 21" County Board meeting with formal review and a public hearing anticipated for May 19`''. The EDA and City Council recently approved an amendment to the Business Subsidy policy, allowing business subsidies for service and retail commercial businesses. GATR is a full- service heavy duty and medium duty truck dealer with locations in Cedar Rapids and Des Moines, Iowa and Sauk Rapids, Minnesota which employ approximately 200 people. The proposal for this project site is to provide new and used truck sales, rental, leasing parts and service. GATR Truck Center would be a unique business in Elk River with no direct competitors within Sherburne County. GATR is proposing to build a facility in Elk River in order to better provide service to customers in the southeastern corner of their market area. Total sales generated from the property are expected to exceed $20 million by 2017 and $30 million by 2023. If approved, this would be the first project to break ground in Elk River's City Owned Nature's Edge Business Center 2nd Addition. The proposed project would consist of a 42,912 square foot facility with an estimated taxable value of approximately $3,900,000. The project is estimated to generate an approximate $160,500 in property taxes per year upon completion. The company has applied for a 15 years of tax abatement financing from the City of Elk River in the amount of $546,814. The tax abatement will allow GATR of Sauk Rapids, Inc. to purchase the property and provide operating flexibility. Tax Abatement The attached memo from Springsted summarizes the analysis completed to date. The project includes the creation of 63 new jobs. The project scored 43, at the higher end of the desirability range. Mikaela Huot will be at the meeting on Tuesday to verbally support the analysis. P a f E R E a a i 1 CIA R