6.2. SR 12-18-2006 - Laserfiche WebLink

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Consider Tax Abatement for United HealthCare Services, Inc. Technology Center Project December II, 2006 EDA Meeting Page 3 of3 The company has submitted a complete application to the City for Tax Abatement. Staff has evaluated the application based on the City's attached Tax Abatement Application Review Worksheet to measure the strength of the project against the city's goals and objectives for the use of Tax Abatement. The project scored 44 out of 45 possible points, which equates to a "highly desirable" project. The provision of Tax Abatement assistance to this project would qualify, under the City's Tax Abatement Policy, as a "location incentive", due to the significant tax base, the creation of higher paying jobs and that it is likely to assist in the marketing and attraction of additional desired developments, rather than based on butfor financial need and job creation criteria. In addition, staff believes that without the offering of the assistance, the company would not have selected the City of Elk River as the location for the technology center project. lob and Wage Goals The Minnesota Business Subsidy Law requires projects which receive over $25,000 of public financing assistance to meet job and wage goals as established by the city. A requirement of the financing assistance will include a commitment from the company for the creation of a minimum of 20 new full-time positions at a minimum hourly wage, exclusive of benefits required by law, of $24.00 within two years of occupancy. The minimum hourly wage rate that the company is committing as a result of the project exceeds the City's Business Subsidy Policy minimum hourly wage criteria of $15.00. Requested Action Staff requests that the EDA recommend to the City Council approval of providing Tax Abatement assistance to United HealthCare Services, Inc. in the form of a pay-as-you-go Tax Abatement note for up to 5% of the assessed market value up to a maximum of $850,000 with the company receiving 100% of the annual city portion of real estate taxes for a maximum period of up to 10 years. A requirement of the financing assistance will include a commitment from the company for the creation of 20 new full-time positions at a minimum hourly wage of $24.00 within two years. A City Council public hearing has been scheduled for December 18, 2006 to consider providing Tax Abatement and business subsidy to the United HealthCare Services, Inc. technology center project.