5.0. 6.0. 7.0. EDSR 07-13-1998 - Laserfiche WebLink

Home Browse Search

EDA Agenda Memo July 1, 1998 Page 3 • 7. Consider Resolution 98- Asking that the City Council Call Public Hearing for TIF District No. 20 Issue This is the first action which is necessary in the case of establishing a tax increment district to begin the schedule and process of completing a tax increment plan. Overview In July 1997, the EDA purchased the last remaining lot in the Elk River Industrial Park for approximately $65,000. The EDA now has a request before it to provide this lot at a zero land cost to the developer for the development of an industrial project. Supermats, Inc. has submitted a tax increment financing application along with payment of$5,000 to process such request. Supermats, Inc. is proposing the construction of an approximately 35,000-40,000 square foot building on this 2.39 acre lot. Supermats is the manufacturer and distributor of rubber mat products made from recycled tires. Staff began working • with Supermats over a 18 months ago to find them a location to lease space here in Elk River. At that time it was made known that the company would eventually want to construct and own its own facility. Supermats is currently located in a 5,000 square foot leased space in the building located behind E & 0 Tool. They also have approximately 13,000 square feet of space in Brooklyn Center. Supermats proposal is to combine its manufacturing, warehousing, and distribution in one location in the Elk River Industrial Park. In this situation, the ability of the EDA to provide this lot to the developer at zero land cost is a significant incentive. The developer is able to use the equity in the land to minimize its up front dollars into the project. This scenario as it is being proposed in concept to the developer has helped solidify Supermats commitment to complete this project in Elk River. This "instant equity"concept is also no different than what is being offered to companies like Supermats by other communities. The EDA's ability to purchase this lot last year will prove to be a positive strategic investment should the Supermats project proceed. It is an investment in which, should a TIF proposal proceed, the EDA • should be able to recoup its dollars within an approximate two to three year time period.