6.3. SR 12-21-2009 - Laserfiche WebLink

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'^~/ ilk REQUEST FOR ACTION River To Item Number Ma or & Ci Council 6.3. Agenda Section Meeting Date Prepared by Community Development December 21, 2009 Catherine Mehelich, Director of Economic Develo ment Item Description Reviewed by Consider Extending Time for Meeting Wage & Job Goals Lori ohnson, Ci Administrator Under the Tax Abatement and Business Subsidy Agreement for Reviewed by The Bank of Elk River Project -Public Hearing Action Requested Following the public hearing, the Council is asked to authorize an extension up to two years to The Bank of Elk River for meeting the wage and job goals outlined in the Tax Abatement & Business Subsidy Agreement. Background/Discussion In April 2006, The Bank of Elk River entered into a Tax Abatement & Business Subsidy Agreement with the City for the renovation and construction of a 20,000sf expansion to its downtown facility, and committing to create 20 full time jobs at a wage of $15/hour by September 2009. Under the agreement the developer is eligible to receive tax abatement for a portion of eligible renovation costs up to $300,000 provided on apay-as-you-go basis (commencing 2008). Under the MN Business Subsidy Law, public agencies are required to report annually on the progress toward job and wage goals for two years, or until the goals are met, whichever is later. As of the end of September 2009 (two-years), the developer has created 10 full time jobs to date. The attached letter from The Bank of Elk River indicates the developer's response in their attempt to achieve the wage and job goals. Due to economic conditions, the developer is requesting the City's consideration of up to a two year extension to achieve these goals. The request would extend the deadline to September 2011. The developer has been invited to the Council meeting to answer any questions. Staff recommends that the City Council authorize a two year extension for meeting the job and wage goals established in the agreement .due to economic conditions. Financial Impact The agreement allows that if goals are met in part, the City has the option to reduce the subsidy on a prorated basis to the jobs created, or consider an extension of the term to meet the goals. To date the developer has received total tax abatement in the amount of $29,166. The term of the tax abatement is up to 12-years or until the reimbursement amount is reached. If the developer does not meet the goals by the end of the extension term, the City retains the option to reduce the subsidy. Attachments • Correspondence from The Bank of Elk River dated November 5, 2009. S:\EDA\BUSINESS SUBSIDY\Bank of Elk River\BankofElkRiver.Extension Action Requested 12 2] 09.doc