5.1. SR 02-19-2008 - Laserfiche WebLink

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C'.onsider Tae Abatement for E & O Tool Expansion February 11, 2008 EDA Meeting Page 2 of 2 Project Description The company proposes to construct a 55,000 square foot light industrial facility on 7..31 acres of the easterly portion of the 17,11-acre Sandpiper Business Park (formerly known as the Gagne property). The facility will be located just east of the Metal Craft Machine facility anticipated fox construction spring/summer 2008. The company will occupy the entire 55,000 square feet with the potential to expand up to 80,000 total square feet in the future. Proposed Financing Assistance E & O Tool has submitted the attached Tax Abatement application. A summary of the request and job retention/creation and wage goals are as follows: Up to $411,000 City assistance fox a time period of up to thirteen years. Up to $411,000 Sherburne County assistance for a time period of up to ten years (per County policy). 149 full-time jobs retained & to be created (124 retained at an average wage of $18,48 per hour & 25 to be created at an hourly wage not less than $15.00 per City Business Subsidy Policy). Staff has evaluated the company's application based on the attached Tax Abatement and Business Subsidy Policies and the Tax Abatement Application Review Worksheet, which indicates that the project scored 45 out of 45 possible points, which equates to a "highly desirable" project based on the City's project priorities. In addition, the City's financial advisor Ehlers and Associates has completed a "but-for" analysis and determined that the level of assistance z'equested is necessary for the project to proceed. The company's tax abatement application indicates an EDA Micro Loan in the amount of $100,000 as a proposed source of project financing in addition to the tax abatement. The company has recently submitted an amended Micro Loan application in the amount of $75,000. The micro loan application is awaiting review by the EDA Finance Committee for recommendation to the EDA next month for final action. Action Requested Staff recommends that the EDA recommend the City Council approve providing tax abatement and business subsidy assistance to the E & O Tool and Plastics expansion project with the following terms: • Pay-as-you-go Tax Abatement note in the amount of up to $411,000. • To be provided at a rate of 100% of the Tax Abatement for a maximum period of up to 1.3 years. • Commitment from the developer to retain the existing 124-full time employment positions, and to create 25 new full-time jobs at an hourly wage not less than $15..00 (exclusive of benefits required by law) within two years of the final certificate of occupancy Next Step A City Council public hearing has been scheduled for Tuesday, February 19, 2008 to consider providing tax abatement and a business subsidy to the E & O Tool expansion project. An EDA Finance Committee meeting will be scheduled to review and provide the EDA a recommendation on the Micro Loan application.