6.0. EDSR 07-11-2005 - Laserfiche WebLink

Home Browse Search

Consider Tax Rebate Financing Assistance and Sale of EDA Property for Medical Extrusion Technolgies,Inc. July 11,2005 EDA Meeting Page 2 of 2 IP Sale of EDA Property Staff has been working with Attorney Tom Bray of Briggs &Morgan to draft the attached purchase agreement form for the sale of the EDA property within Northstar Business Park. The property is proposed to be sold for the purchase price of$2.00 per square foot. The purchase agreement includes the statutory requirements for the sale of EDA property. Minnesota Statutes require the EDA to provide notice and hold a public hearing prior to the sale of property, review building plans and specs and a reversion clause if the project is not completed as agreed. Proposed Tax Rebate Financing Assistance Staff has proposed financing assistance in the form of a pay-as-you-go Tax Rebate Financing note to the company in an amount up to 100% of the land cost at$208,217. The amount of the assistance has been established based on providing a land cost write down of$25,000 per new job to be created at a minimum hourly wage of$15.00. Using the following formula the project is eligible to receive 100%write down on the land cost through a pay-as-you-go TRF note: Land Cost: 2.39 acres minus gas line easement @ $2.00/sf $208,217 Eligible Assistance: $25,000 x 23 new jobs at$15/hr $575,000 Staff recommends that the TRF assistance be provided 50/50 by the City and Sherburne County with the company receiving 90% of the annual TRF and the EDA receiving 10% of the annual TRF (to reimburse itself for expenses not included in the sale price of$2.00/s f) for a maximum period of up to 15 years. MET has submitted the City's TRF application and fee. Per the City's TRF policy, any requests over the amount of$25,000 requires financial review and but-for analysis by the city's financial advisor, Ehlers &Associates. The review and recommendation will be completed prior to the Council calling for a public hearing on the TRF request. Actions Requested Staff recommends the EDA consider the following actions for the MET project: • Direct staff to complete the due diligence for the Tax Rebate Financing review process and recommend the City Council call for a public hearing on the Tax Rebate Financing assistance request and business subsidy. • Call a public hearing for Monday,August 8 at 5:30 p.m. regarding the sale of approximately 2.39 acres of EDA property, Northstar Business Park, to Medical Extrusion Technologies, Inc.