7.5 HRSR 05-01-2017 - Laserfiche WebLink

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1. The project results in the sale and /or redevelopment of properties deemed structurally substandard. Structurally substandard shall mean containing defects in structural elements or a combination of deficiencies in essential utilities and facilities, lighting and ventilation, fire protection, including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance. The city building official conducted a site visit of the property summarizing the building code review performed on the subject property on February 22, 2017. The city Building Official deemed the dwelling as inhabitable and in a state of total disrepair which meets the criteria outlined in the policy. Photos are attached. 2. The minimum wage for a job to be considered a new or retained job shall be the greater of $15 /hour or 150% of the state or federal minimum wage, whichever is greater, exclusive of benefits. The company is proposing the creation of 5 FT with base hourly wages ranging from $16 -$28 per hour, exclusive of benefits. The average hourly wage not inclusive of benefits is $23.20 per hour. The average hourly wages of the retained jobs meet or exceed the minimum business subsidy requirements of at least $15 /hr. 3. The project will result in an increase in tax base, the project can demonstrate that investment of public dollars induces private funds and the project provides higher wage levels to the community or will add value to current workforce skills. A total of $75,000 in total public investment will result in over $1,300,000 in private capital investment accounting for more than 7,216 sf of property redevelopment and will increase the total annual property tax revenue by approximately $10,518. The applicant will create 5 FTE to Elk River paying between $16 -$28 /hour. Summary The applicant is eligible for the HRA Blighted Properties Commercial/ Industrial forgivable loan in the amount $75,000, meeting the definition of structurally substandard, wage goals, and job criteria requirements and the proposed fund uses are eligible expenses. Financial Impact If this loan meets the goals of the city and HRA, the loan funds could be funded from the HRA Blighted Properties Commercial /Industrial fund account, which has a balance of $150,000. Attachments • Blighted Properties Commercial /Industrial Application (March 6, 2017) • Letter to the city postponing application review (Apri120, 2017) • Resolution • Loan Agreement • Promissory Note • Mortgage • Personal Guarantee — Ken Beaudry • Entity Guarantee • Environmental Indemnification Agreement