6.0. EDSR 08-19-2002 - Laserfiche WebLink

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Consider Cymbet Corp.Expansion Siting Proposal August 19,2002 Page 3.7(3 • Financing Assistance and Subsidy Requirements • City Tax Rebate Financing Assistance (TRF) up to $225,000 or 10 years;whichever is earlier (subject to and contingent upon minimum building and land value of $2,800,000). • County Tax Rebate Financing Assistance (TRF) up to $225,000 or 10 years; whichever is earlier (subject to and contingent upon minimum building and land value of$2,800,000). • Financial Package and Financing Requirements of Proposal attached. • City and County TRF Projection Worksheet attached. • Business Incubator Program Concept attached. Business Incubator Concept Currently the EDA leases approximately 7,500 square feet of the former Furniture&Things building located on east Highway 10. The current lease term, at a rate of$1.85/square foot, expires April 2003. The EDA has the option to renew the lease for another two years at a rate not to exceed$3.00/square foot. Should the EDA chose not to renew the lease the building owner,Larry Hickman,would be required to repay the EDA approximately$23,000 of the total$81,253 in initial leasehold improvements. The Incubator Advisory Committee has directed staff to explore facility options for the Incubator Program. In addition to tenant rent revenue, the Incubator program has been funded by an annual • transfer of approximately$20,000 from the Tescom MN Investment Fund loan repayment. The attached Business Incubator Finance Summary&Projections sheet indicates sufficient funds to operate the Incubator program under the existing arrangement until year 2008. The proposed Incubator concept provides the following benefits: • Excludes the EDA from leasing/subleasing space, commitments on vacant space, and from staff time responding to building issues. • Equity Management may consider a barter stock-for-cash rent option on a case-by- case basis with tenants of the Incubator Program. • EDA may consider its participation in the space and program by continuing to provide technical assistance and tenant recruitment via Genesis Business Centers and paying for initial leasehold improvements (ie. conference room,restrooms, etc.) in exchange for up to 10-years reservation of the space for the Incubator Program. • Building space that is designed for companies involved in product manufacturing/assembly or high technology-service. Action Requested Staff recommends that the EDA consider the following actions: • Approval of the proposed finance concept for the Cymbet Corporation expansion and development of space for the EDA's Business Incubator Program, and • Recommendation that the City Council schedule a public hearing on the Tax Rebate 111 (abatement) and Business Subsidy request for its meeting on September 9,2002. Staff will work with the developer and company to complete the necessary TRF application for the EDA and City Council's formal consideration. S:\Industrial Siting\CYMBET expansion\Aug19EDA.doc