7.0. EDSR 04-12-2004 - Laserfiche WebLink

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Economic Development Authority Minutes Page 3 March 8,2004 • Preliminary Expansion Siting Proposal that Orluck Industries be considered for receiving Tax Rebate (Abatement) Financing for the construction of a 20,000 square foot light industrial/business park building on the City-owned Joplin Street lot. Staff has completed the due diligence process for the land use amendment process, financial analysis and the City's Tax Rebate Financing process. Staff requests that the EDA consider recommending Council's approval of the sale of the lot and tax abatement request. Mr. Orluck is requesting that the city sell its Joplin Street lot to Orluck Industries for $1 and that the city and county abate its portion of the property taxes on the project for a period of approximately twelve years or up to a combined total of$201,520; the amount to reimburse the city for its land cost. Mr. Orluck has submitted a request to Sherburne County for tax abatement and staff believes that the term will likely be 8-9 years versus the projected 12 years, based upon inflationary market value and tax rate increases. MOVED BY COMMISSIONER KLINZING AND SECONDED BY COMMISSIONER KOENING TO RECOMMEND CITY COUNCIL'S APPROVAL OF THE PROPERTY TAX ABATEMENT REQUEST WITH BUSINESS SUBSIDY AGREEMENT AND SALE OF THE JOPLIN STREET LOT FOR THE ORLUCK, LLC PROJECT. MOTION CARRIED 7-0. 8. Consider Concept Approval of the Gradient Technology, Inc. Expansion Siting Proposal Director of Economic Development Catherine Mehelich reported that at its February 9, 2004 meeting the EDA postponed discussion of the Gradient Technology, Inc. Expansion Siting Proposal due to a request by the applicant and since then the City Tax Rebate Financing application has been completed. Staff has become aware of concerns about whether or not tax increment financing or tax abatement can be provided for prospects that locate in the Elk River Business Park due to its perceived association with the city's Tax Increment Financing District No. 19 redevelopment project (Shopping Center Retail Project). A written opinion was received from attorney Mary Ippel of Briggs &Morgan following her review of the TIF No. 19 documents. Ms. Ippel stated in her letter"the City is not precluded by the Contract from reimbursing a business locating in the Business Park Project for eligible costs of a manufacturing or warehousing and distribution facility in the Business Park". Ms. Mehelich reported that a Preliminary Expansion Siting Proposal was submitted by staff to Gradient Technology regarding the company's proposed relocation project. Staff has proposed that the company purchase a 2.05-acre lot within the Elk River Business Park and that the City do a write-down of the land cost to $0 through a pay- as-you-go Tax Rebate Financing note to the company. The company will also submit a TRF application to the County. Ms. Mehelich stated the land cost is at $1.61/SF for • a total assistance of$143,770 from the City and County combined.