2. EDSR AGENDA 06-24-2013 - Laserfiche WebLink

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J ,t TO ITEM NUMBER Economic Development Authori 2. AGENDA SECTION MEE TING DATE PREPARED BY June 24, 2013 Clay Wilfahrt, Assistant Director of Economic Development ITEM DESCRIPTION REVIEWED By Consider Tax Abatement Application and make Brian Beeman, Director of Economic recommendation to City Council for Preferred Powder Coating Development Jeremy Barnhart, Deputy Director, CODD ACTION REQUESTED Consider Tax Abatement in the amount of $1,153,878, as requested by Preferred Powder Coating LLC. BACKGROUND/ DISCUSSION Preferred Powder Coating submitted an offer to purchase 10.36 acres of land from the city for $1.67 per square foot excluding approximately one acre of land that is unbuildable due to a utility easement, for a total cost of $680,895. Preferred Powder is requesting tax abatement of $1,153,878 dollars over 12 years. The City amount of tax abatement would be $576,939 and the County would be $576,939. Staff has evaluated Preferred Powder's application and has scored it as a 36 out of a possible 45 points which qualifies it as a "moderately desirable" project based on the city's project priorities. The City Council is scheduled to hold a public hearing and consider the abatement application on July 1. The county has held a public hearing and plans to consider the abatement application on July 9 with land use review expected on July 15. Because the proposed financial assistance exceeds $150,000, a Business Subsidy Agreement is requited by state statute. The Business Subsidy Agreement will requite the applicant to create a minimum of 8 jobs and retain their existing 24 jobs. They will need to retain the jobs for a minimum of one year. All of the jobs must pay wages greater than $12.19 per hour. Preferred Powder stated that they intend to pay an average wage of $15 per hour. FINANCIAL IMPACT In accordance with the city's Tax Abatement Poli y, Springsted Inc. completed a but fbr analysis and financial projection for the tax abatement project. Springsted analyzed the sources and uses of funds for the applicant, and used input from the developer, banker, and city staff to form its opinion. They determined that Preferred Powder's request for $1,153,878 is reasonable, and that the project would not occur "but for" the tax abatement in the amount requested. ONATURERt� �Y