7.0. EDSR 04-12-2004 - Laserfiche WebLink

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Consider Property Tax Abatement for Badger Ventures,LLC EDA/City Council Meeting April 12,2004 Page 2 of 3 • The company currently employs 13 full-time staff,including 7 based in Minnesota and 6 in Indiana and elsewhere. The positions have an hourly wage between $16-75.00 per hour. The company anticipates creating up to 5 new positions at the Minnesota facility within 2-years. The new positions will likely consist of management and engineers. Staff has been in contact over the past one and a half years with Eric Haehn,Vice President/CFO of Gradient Technology. The company currently leases space in Blaine,MN and is seeking a suitable location within the northwest metro area to relocate. The City of Big Lake has aggressively pursued the company's relocation project,in addition to staff's efforts. Project Description Badger Ventures,LLC proposes to construct a 13,000-square foot light industrial/business park building for lease to Gradient Technology's office,research&development, and equipment fabrication operation. Badger Ventures proposes to purchase 2.05-acres within the Elk River Business Park and has requested that the city and county consider a write down of the land cost to $0 through a pay-as-you-go note to the limited liability company. The attached Preliminary Siting Proposal dated February 2, 2004 and the Revised Preliminary Proposal dated March 9, 2004 indicate the revised land cost/tax abatement assistance following the EDA's concept approval. . Analysis Staff has been working with the company through the due diligence process for the financial analysis and the City's Tax Rebate Financing process. The Sherburne County Assessor's office has reviewed the building information and has provided the following estimated market value (EMV) of the proposed building project for 2005: EMV Building $ 609,700 EMV Land $ 107,300 Total EMV $ 717,000 The attached Tax Rebate Financing Projection Worksheet indicates the payment period given the assessor's estimates. The estimated payment period to provide a land write down to $0 is 12 years city and county. The MN Tax Abatement Statute allows jurisdictions to provide tax abatement over a 10-year period. A period longer than 10-years is allowed only following another jurisdiction (school district in this case) denying the abatement request in writing. Staff believes that the term will likely be 10-years simply based upon annual inflationary increases to the market value and tax rates. Staff completed the ratings worksheet used to help analyze such proposals. The proposed project scored a "32", out of a total possible of 50 points,which equates to a"moderately desirable"project. •