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City of <br /> <br />Item #4.1. <br /> <br />River <br /> <br />TO: <br /> <br />MEMORANDUM <br /> <br /> Mayor and City Council <br /> <br />FROM: <br />DAIF: <br /> <br />Marc Nevinski, Assistant Director of <br />Economic Development <br /> <br />August 21, 2000 <br /> <br />SUBJECT: <br /> <br />Public Hearing on TIF District No. 21: <br />SoftPac, Inc. / Opus Northwest <br /> <br />Issue <br />Minnesota Statutes require that the City Council hold a public hearing on the <br />establishment of a tax increment financing district prior to considering its approval. <br />This public hearing will satisfy the requirements of the both the Tax Increment <br />Financing and Business Subsidy Laws. <br /> <br />Background <br />TIF 21 has been proposed to assist in financing the development of the Emmerich <br />site in the West Business Park. The proposed project will include the purchase of <br />land and the construction of a 73,000 sf manufacturing facility by Opus Northwest, <br />LLC. The facility will be leased to SoftPac, Inc. (Formerly ANC) who will produce, <br />package and distribute various juice drinks in boxes or pouches. SoftPac anticipates <br />creating 60-80 jobs with wages of $13-$18 per hour, plus benefits. Many of the <br />positions will be technically oriented. <br /> <br />The TIF plan for TIF District 21 proposes to reimburse Opus Northwest on a pay-as- <br />you-go basis for land acquisition costs in the amount of $700,000 plus eight percent <br />interest. Initial estimates by staff projected that the project would generate enough <br />tax dollars to reimburse the land costs in a four to five year period. However, <br />following the county assessor's review of the site plans, it is now anticipated that it <br />will take eight and one half years to fully reimburse the land costs. Changes in <br />market values, tax rates, and/or expansions will impact the actual length of the <br />district, which cannot exceed nine years. It is estimated that the project will <br />generate an average of $136,000 in annual increment over the life of the district. <br /> <br />The Business Subsidy Law requires that a project meet at least one public purpose <br />other than an increase in tax base. Staff has identified four public purposes satisfied <br />by this project: <br />1. Enhancement and diversification of the City's industrial composition. <br />2. Contribution towards fulfillment of the City's Strategic Plan for Economic <br /> Development. <br /> <br />13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone (763) 441-7420 · Fax (763) 441-7425 <br /> <br /> <br />