EDSR MEMORANDUM 05-08-2000 - Laserfiche WebLink

Home Browse Search

• MEMORANDUM TO: Economic Development Authority FROM: Marc Nevinski, Acting Director of .41° 11/0VEconomic Development DATE: May 8, 2000 SUBJECT: EDA Meeting Agenda 5. Consider Request for Tax Rebate Financing—John Weicht, R&W Associates Issue At its April 10 meeting the EDA considered a request by John Weicht of R&W Associates to use tax rebate financing (TRF) in the construction an 18,000 s.f. multi-tenant industrial building in the McChesney Industrial Park. Several questions arose which required further clarification by Mr. Weicht, who was unable to attend the meeting, and the issue was tabled until he could be present. The primary issue focused on the project's return on investment in the "but-for" analysis. Background Recently, John Weicht and Mark Rothfork formed R&W Enterprises in order to construct a multi-tenant industrial building on the last lot in the McChesney Industrial Park. The building will be designed to house approximately three to four light industrial companies. Additionally, the site plan, which has been approved by the planning commission, combines the parking area with the existing parking at Mark Rothfork's building (see attached site plan), which subsequently increases the size of the building on the site. The total cost of the project is projected to be approximately $758,000. Sources of financing include a $630,000 loan from The Bank of Elk River and a $128,000 equity contribution by R&W Enterprises. Mr. Weicht is requesting that the city rebate its portion of the taxes on the building for a period of four years. Staff has estimated this amount to be $6,159 per year or $24,683 over the term of the rebate period. Mr. Weicht also intends to request that Sherburne County rebate its portion of the taxes on the project for the same four year period. The county's portion is