5.0. 6.0. 7.0. 8.0. 9.0. EDSR 12-14-1998

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Economic Development Agenda Memo December 14, 1998 Page 4 7. Consider Resolution 98- Requesting the Council to Call a Public Hearing for TIF District No. 21 Issue The EDA is being requested at this time to consider a resolution asking the City Council to call a public hearing for the establishment of a new economic development tax increment district in the West Business Park. This would be Tax Increment Financing District No. 21. Background Several months ago the EDA discussed a similar concept for a West Business Park project with a company planning to expand out of Minneapolis. That project did not proceed. Since that time, however, staff has discussed a similar concept with a company looking at Elk River to expand its business operations. This company has now made formal application to the city/EDA for tax increment financing and a micro loan to aid in their planned expansion project in the Elk River West Business Park. The purpose of this agenda item is to start the tax increment schedule and to authorize staff to begin to prepare the necessary documents and plans to put a tax increment district in place. The EDA will have several future opportunities to discuss the specific tax increment plan and details of the development agreement with the business prospect. The incentive package concept being discussed at this time is as follows: • 6 acres of land provided by the EDA up-front to the project $280,000 (app.) • Allowance for site improvements/grading/fill 25,000 • Allowance for construction of a berm along the south/southwest lot lines of the site 35,000 • Incentive loan at interest rate of 6.5% &term of 10 years 50,000 Project Assumptions • Phase I -Minimum building size of 50,000 s.f. • Phase II - Future expansion -minimum building size of 20-35,000 s.f. • Business Park,standards for construction • Specific standards to be met for creating new jobs vs relocation of existing jobs