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Elk <br />River <br />Request for Action <br />To <br />Item Number <br />Economic Development Authori <br />6.1 <br />Agenda Section <br />Meeting Date <br />Prepared by <br />General Business <br />Aril 28, 2015 <br />Amanda Othoudt, EDD <br />Item Description <br />Reviewed by <br />GATR of Sauk Rapids, Inc. Property Tax <br />Cal Portner, City Administrator <br />Reviewed by <br />Abatement Financing <br />Action Requested <br />Approve, by motion, and provide a recommendation to City Council for Tax Abatement Assistance for <br />GATR of Sauk Rapids, Inc. <br />Background /Discussion <br />The Finance Committee reviewed and recommended the EDA approve GATR's application for Property <br />Tax Abatement financing. <br />GATR is requesting a 15 year pay -as- you -go Tax Abatement from the City of Elk River for up to <br />$546,814. The tax abatement will allow GATR to purchase the property and provide operating flexibility. <br />The county also received a tax abatement application that they considered at their April 21" County <br />Board meeting with formal review and a public hearing anticipated for May 19. The EDA and City <br />Council recently approved an amendment to the Business Subsidy Policy, allowing business subsidies for <br />service and retail commercial businesses. <br />The proposed project would consist of a 42,912 square foot facility with an estimated taxable value of <br />approximately $3.9 million. The project is estimated to generate $160,500 in total property taxes per year <br />upon completion. The city share of the property taxes abated per year equal approximately $36,454. <br />The project scored 43, at the higher end of the desirability range. Based on the analysis provided by <br />Springsted, it appears that GATR would not proceed with the project without assistance. <br />A public hearing has been scheduled for the May 18 City Council meeting to invite comments from the <br />public. A public hearing must be held for any business subsidy in the amount greater than $150,000. <br />Financial Impact <br />Up to $546,814 in city tax abatement assistance, to be distributed "pay as you go" for 15 years. This <br />abates the entire city share of taxes on the property. <br />Attachments <br />Tax Abatement Application <br />• EDA Finance Committee Staff Memo <br />• Springsted Analysis (April 23, 2015) <br />P O w E 8 E U A Y <br />1 CIA R <br />