4.1. EDSR 02-23-2016 - Laserfiche WebLink

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C 4): ElRequest for Action River- To Item Number Economic Development Authority Finance Committee 4.1 Agenda Section Meeting Date Prepared by General Business February 23,2016 Amanda Othoudt, EDD Item Description Reviewed by Cornerstone Elk River,1.1 C Property Tax Cal Portner, City Administrator Abatement review Reviewed by Action Requested Consider and recommend the EDA deny a property tax abatement for Cornerstone Elk River, EEC. Background/Discussion The city received an application for property tax abatement assistance for Cornerstone Elk River, LLC requesting a 15-year pay-as-you-go property tax abatement from the city in the amount of$134,037. Cornerstone of Elk River is a family-owned business that is over 50 years old. The company was founded in the early 1960's when Oran Powell built Brookdale Ford, in Brooklyn Center, the largest Ford dealership in Minnesota for more than 35 years. The Powel's acquired Elk River Ford in 1972 and is their longest continuously operating store. Scott Powell, Oran's son, became owner and operator in 1983. They expanded in Elk River with a Chrysler and Dodge franchise in 1989, followed by Jeep in 1998, and filially KIA in 2009 with an expansion to the KIA dealership in 2015. They are the only new car dealer within eight miles of Elk River. Since 2010, Cornerstone has added a pre-owned location in Plymouth and a Chevrolet store in Monticello. A third generation of Powell's is now continuing the family legacy of automobile dealership management. Cornerstone of Elk River is proposing a 28,861 square foot expansion of three separate areas of their building. In the northwest corner they are proposing a new 8,136 square feet of office and showroom space for Chrysler and Ford. In the Northeast corner of their building, they are proposing 4,281 square feet of parts and service space including a new locker room for additional service technicians. In addition, they propose an 11,444 square feet expansion to their service island and a new Oil Express wing in the southwest corner of their building which will increase their ability to conduct oil changes, expedite service and free up five hoists in their main shop to perform major auto repair services. Cornerstone currently employs 108 full- and 44 part-time employees. With the expansion, they propose to hire at least 50 additional employees at a weighted average of all new hires of$25.83/hr. Their application indicates that they will commit to 20 new positions within the first year. The estimated market value of Cornerstone as of January 2, 2015, for taxes payable in 2016 is $2,824,900 which is assumed to be the base value. The estimated market value after construction is $3,799,800 as provided by the county assessor. The incremental value of$974,900 would be abated. The estimated total IFIEI NATURE