7.3. SR 07-20-2015 - Laserfiche WebLink

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Request for Action To Item Number Economic Development Authority 6.1 Agenda Section Meeting Date Prepared by General BusinessJuly 20, 2015Amanda Othoudt, EDD Item Description Reviewed by Envision Co., LLC Property Tax Abatement Cal Portner, City Administrator Financing (Sportech, Inc.) Reviewed by Action Requested Approve, by motion, and provide a recommendation to City Council for Tax Abatement Assistance for Envision Companies, LLC. (Sportech, Inc.) Background/Discussion The Finance Committee reviewed and recommended the EDA approve Envision Co., LLC application for Property Tax Abatement financing. Envision is requesting up to a 20-year Property Tax Abatement from the city of Elk River for up to $1,288,590. The maximum abatement term for the city is up to 20 years if only 1 or 2 entities participate in the abatement of the city receives written denial of participation from one of the other taxing entities (County or School District). The company has previously requested participation from the School District and has received a letter of denial of participation. The county also received a tax abatement application that they considered at their July 7 County Board meeting with formal review and a public hearing anticipated for August 4. The proposed project would consist of a 105,000 square foot facility with an estimated taxable value of approximately $5,243,700 million. The project is estimated to generate $216,383 in total property taxes per year upon completion. The city share of the property taxes abated per year equal approximately $49,136. The form of financial assistance proposed would be considered up front internal financing in which the city would defer receiving upfront payment of the land in the amount of $1,288,590. The city would collect the annual abatement revenues from the proposed project (city and county share, if participation is approved) to reimburse the development fund for the land cost of $1,288,590. The project scored 45, at the highest end of the desirability range. Based on the analysis provided by Springsted, it appears that Envision would not proceed with the project without assistance. A public hearing has been scheduled for the July 20 City Council meeting to invite comments from the public. A public hearing must be held for any business subsidy in the amount greater than $150,000.