6.2 EDSR 07-20-2015 - Laserfiche WebLink

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t of Request for Action River To Item Number Economic Development Authority 6.2 Agenda Section Meeting Date Prepared by General Business July 20,2015 Amanda Othoudt, EDD Item Description Reviewed by Morrell Companies Property Tax Abatement Cal Portner, City Administrator Financing Reviewed by Action Requested Approve,by motion, and provide a recommendation to City Council for Property Tax Abatement Assistance for Scott Morrell,LLC/Morrell Oversize (Morrell Companies). Background/Discussion The Finance Committee reviewed and recommended the EDA approve Morrell Companies application for Property Tax Abatement financing. Scott Morrell,LLC is requesting a 15 year pay-as-you-go Tax Abatement from the city of Elk River for up to $121,905. The tax abatement will allow Morrell Companies to purchase the property in Natures Edge Business Center and to support annual cash flow for debt service on the approximate $2.380M project to be financed in combination of debt, equity, and EDA Jobs Incentive Microloan. The county also received a tax abatement application that they considered at their July 7 County Board meeting with formal review and a public hearing anticipated for August 4 in the amount of 89,300 for a term of 10 years. Morrell Companies is a full-service carrier offering a variety of standard and specialized transportation services. The project proposal includes a wash facility,light duty maintenance,and office space. They currently employ 105 people with an average hourly wage of$23/hour. Of the 105 employees, 13 FTE are employed by Morrell Oversize with an average hourly wage of$27.94/hour. Morrell Companies is proposing to hire 8 FTE with the proposed expansion. The proposed project would consist of a 13,824 square foot facility with an estimated taxable value of approximately$859,000. The project is estimated to generate$160,500 in total property taxes per year upon completion. The city share of the property taxes abated per year equal approximately$8,107. The project scored 39 out of 45 total possible points. Based on the analysis provided by Springsted,it appears that Morrell Companies would not proceed with the project without assistance. A public hearing has been scheduled for the July 20 City Council meeting to invite comments from the public.A public hearing must be held for any business subsidy in the amount greater than$150,000. [ 1111E1 / r NATURE