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Elk REQUEST FOR ACTION <br />...,.. <br />River <br />To Item Number <br />Ci Council 5.1. <br />Agenda Section Meeting Date Prepared by <br />Community Development November 17, 2008 Catherine Mehelich, Economic <br /> Develo ment Director <br />Item Description Reviewed by <br />Consider Business Subsidy Extension- Tom & Rikki Bauer Jeff Gongoll, Community <br /> Develo ment Director <br /> Reviewed by <br />Action Requested <br />Consider approving business subsidy extension of one yeax (to achieve job creation goal) for Tom & <br />Rikki Bauer, developers of Medical Extrusion Technologies (MET). <br />Background/Discussion <br />On August 15, 2005, the Bauer's entered into a Tax Abatement and Business Subsidy agreement with the <br />City, committing to constructing a 20,000 square foot building in Northstar Business Park and creating 23 <br />new full time jobs (at $15/hr) within 2 years from the benefit date (issuance of Certificate of Occupancy). <br />Under the agreement, the developer is eligible to receive the value of a portion of the property in the <br />amount of $1.14,998 provided on apay-as-you-go basis (annual tax rebate commencing 2008). By law, <br />cities are required to report the progress towards business subsidy goals annually for two years, or until <br />the goals are met, whichever is later. <br />As of October 4, 2008 (benefit date), the developer has finished construction of their building and <br />created seven ('7) full time jobs meeting the hourly rate. They have also created two (2) temporary jobs <br />which will become full time after 90 days. MET has indicated that they have been working with an <br />interested party for the other half of the building which would bring in additional jobs. The prospective <br />tenant has paid partial rents for three months and is expected to occupy soon. The Bauer's have been <br />invited to the Council meeting to provide additional information and answer any questions. <br />The agreement allows that if goals are met in part, the City has the option to reduce the subsidy, prorating <br />it to the jobs created. An alternative option that cities often provide, although not specified in the <br />agreement, is an extension term to meet the one year goal. Staff recommends a one year extension be <br />considered. <br />Action Motion by Second by Vote <br />Follow Up <br />S:\EDA\BUSINESS SUBSIDY\State Reporting\2007\Action Requested MET - 11.17.08.doc <br />