10.0. EDSR 06-12-1995 - Laserfiche WebLink

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EDA Public Hearing on TIF No. 12 Page 2 collect two additional years of increments in order to pay down the project • debt. Other components of the original facility remain intact. This includes a profit business incubator with shared clerical service, copiers, faxes, and conference room, etc. In addition, other space within the facility will be leased to other manufacturing operations. The facility will be constructed of block, similar to the Fairview Northland clinic, or of tilt-up panels. The sidewalls will be high enough to allow for a mezzanine level. Mowry/Neos seeks $80,000 in tax increment financing assistance to support its proposed facility. Tax increment funds would be used to "write down" the cost of the land, and for general site development and site preparation costs associated with this project. At the May 8 EDA meeting, the proposed TIF assistance concept was for the EDA to acquire the property on behalf of Mowry/Neos. This concept requires the HRA to borrow these funds and to repay principal and interest. The cost of borrowed funds and interest charges results in extending the life of the TIF District. An alternative financing technique that has been discussed with Mr. Mowry is that of"pay-as-you-go" TIF assistance. Under this option, Mowry/Neos absorbs the cost of site acquisition and site preparation. However, as the new facility begins generating taxes, the city rebates the new property taxes (otherwise known as the tax increment) back to Mowry/Neos twice a year -:in July and in • December. This option has several advantages; the EDA is not forced to borrow funds, the life of the TIF District is much shorter not having to incur interest charges, and while the expanding company absorbs these extra carrying costs, the city/EDA is still able to participate in the retention of existing companies as well as the attraction of new ones. The Jarmoluk Dental Center was structured as a "pay-as-you-go" TIF District. Jobs Created and Retained According to the application for tax increment financing assistance, Neos would retain five existing jobs and create six new ones. Prospective tenants would likely retain another eleven existing jobs and create ten new ones. Recently adopted state legislation dubbed the "corporate welfare/living wage bill" requires that businesses which receive assistance, including tax increment financing assistance, in excess of$25,000 must create a net increase in jobs in Minnesota within two years of receiving the assistance. Job creation goals must be reported to the Department of Trade and Economic Development(DTED). If these goals are not met, the business must repay the assistance. The Mowry/Neos tax increment financing assistance would fall within the provisions of this legislation. •