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City Council Minutes Page 2 February 6, 2006 ----------------------------- 3.13.WESTBOUND LIQUOR GRAND OPENING 3.14.RESOLUTION 06-13 ACKNOWLEDGING CONTRIBUTION TO THE ELK RIVER POLICE DEPARTMENT FROM THE FRATERNAL ORDER OF EAGLES MOTION CARRIED 5-0. 4. Open Mike No one appeared for Open Mike. 5.1. Consider Outcomes of the 2003 MN Investment Fund Program for Sportech, Inc. Expansion Project, Public Hearing Assistant Director of Economic Development Heidi Steinmetz explained that in 2003, the city received a $200,000 grant from the Minnesota Department of Employment and Economic Development (DEED) under its Minnesota Investment Fund Program. Ms. Steinmetz stated that the DEED grant funds were loaned by the city to Sportech, Inc.at 2% interest to assist with the purchase of equipment related to the 20,000 square foot manufacturing facility expansion. She indicated that as the loan is paid back to the city by Sportech over a period of seven years, the city is able to retain the full $200,000 to be used for economic development purposes. Ms. Steinmetz reviewed the goals and outcomes of the loan to Sportech. She reported that one of the primary goals was the creation of 15 new full- time positions (above the existing 23 jobs) at a wage of $12.00 per hour. Also, eight of the 15 were required to be taken by persons of low to moderate income. Ms. Steinmetz noted that the company met the stated job and wage goals and today employs approximately 60 full-time employees. Chris Carlson, President of Sportech, Inc. – indicated that the loan has been very beneficial to Sportech and has allowed them to expand their current facility, purchase new state of the art equipment, and hire additional employees. Mr. Carlson stated that obtaining the loan through the city saved Sportech about $19,000 in interest over a conventional loan. Mayor Klinzing opened the public hearing. There being no one to speak on this issue, Mayor Klinzing closed the public hearing. 5.2. The Bank of Elk River Expansion Project 5.2.A. Consider Property Tax Abatement and Business Subsidy, Public Hearing 5.2.B. Resolution 06-14 Authorizing Execution of a Tax Abatement and Business Subsidy Agreement Director of Economic Development Catherine Mehelich stated that The Bank of Elk River submitted an application for Tax Rebate Financing (Tax Abatement) for their 20,000 square foot corporate office expansion to the existing downtown facility. Ms. Mehelich indicated that the applicant is requesting the city rebate up to $300,000 of its portion of the new property taxes generated as a result of the expansion project and for Sherburne County to rebate a matching share for a combined total of $600,000. Ms. Mehelich explained that at their January 3, 2006 meeting, the Housing and Redevelopment Authority reviewed the abatement application and recommended that the City Council approve providing up to $300,000 of tax abatement to The Bank of Elk River