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Request for Action <br />To <br />Item Number <br />Economic Development Aorit T <br />7.2 <br />Agenda Section <br />Meeting Date <br />Prepared by <br />General Business <br />February 16, 2021 <br />Colleen Eddy, Economic Development Director <br />Item Description <br />Reviewed by <br />Sportech LLC Tax Abatement Application <br />Cal Portner, City Administrator <br />Reviewed by <br />Action Requested <br />Recommend, by motion, the City Council provide Tax Abatement Assistance for Sportech LLC. <br />Background/Discussion <br />The Joint Finance Committee reviewed and recommended the EDA approve Sportech LLC application for <br />Property Tax Abatement financing. <br />Sportech LLC applied for financial assistance to fund a portion of the construction costs for a 91,050sf building <br />expansion located at 10752 168 Circle. Sherburne County will consider a similar request on February 16, 2021. <br />The project is expected to retain the existing 323 employees and require a minimum of 85 new FTEs within <br />three years of completion. The average wage of new jobs is projected to be $18.20/hr ($23.04 with benefits) <br />which meets the city business subsidy policy provisions. <br />The original building has 14 years of abatement remaining. The proposal is to amend the original abatement <br />agreement to include the expansion. The county assessor estimates the expansion's taxable value at $2,825,000 <br />accounting for a city tax share for the remaining 14 years of approximately $362,880. The city's tax abatement <br />and business subsidy policy objectives are met with the proposed level of assistance. <br />Financial Impact <br />The owner, Meritex, proposes an $8,388,775 million project funded through private funds, owner cash equity <br />and city/county tax abatement of $769,875 for up to 14 years with no more than $362,880 from the city. <br />Mission/Policy/Goal <br />The purpose of the tax abatement assistance is to provide financial and technical assistance for the creation and <br />retention of new employment to an existing business located in the community. <br />Attachments <br />■ Financial Analysis <br />■ Executed Tax Abatement Application <br />■ Meritex Lease Agreement <br />■ Second Amendment to Sportech Lease <br />■ 2021 B2 Expansion <br />■ Sportech Expansion Proposal <br />The Elk River Vision <br />A welcoming community with revolutionary and spirited resourcefulness, exceptional,` 01 e <br />service, and community engagement that encourages and inspires prosperity INAWRE1 <br />