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ri <br /> ity of it, <br /> MEMORANDUM <br /> IR <br /> TO: Economic Development Authority <br /> River <br /> FROM: Pat Klaers, Executive i ector <br /> DATE: May 13, 1996 <br /> SUBJECT: Request for Tax Increment Financing <br /> Assistance - McChesney Cabinets <br /> Introduction <br /> The EDA discussed the Jerry McChesney request for tax increment financing <br /> assistance for McChesney Cabinets at its 4/8/96 workshop and regular <br /> meeting. Support by the EDA for this TIF request was expressed on 4/8/96. <br /> The application for TIF assistance will be distributed Monday evening. <br /> McChesney Cabinets is a manufacturer of custom cabinets and countertops. <br /> McChesney Cabinets also manufactures wood specialist items. The request <br /> for TIF assistance relates to the proposed construction of an approximately <br /> 4111 10,000 square foot facility. Approximately one-half of this facility would be <br /> used by McChesney Cabinets and the other one-half would be used by Winn <br /> Electric. Winn Electric would be a renter or have a lease with Mr. <br /> McChesney for part of this facility. Winn Electric is a wholesale electric <br /> supplier and would be adding one or two new employees with this relocation. <br /> Winn Electric currently has three employees. The total cost of the facility is <br /> estimated to be in the $300,000 range. With this expansion, McChesney <br /> Cabinets would be going from its current 3,000 square feet to 5,000 square <br /> feet and would be going from two full time employees to four full time <br /> employees. The TIF proposal is for a land "write down" on a "pay-as-you-go" <br /> basis. <br /> Background <br /> The location of the proposed 10,000 square foot facility is Lot 9 of the <br /> McChesney Industrial Park. Discussion at the last EDA worksession and <br /> meeting on 4/8/96, related to whether or not the city should write down the <br /> cost of the land for a project where the company already owns the property. <br /> In order to treat companies consistently and show the city's support for local <br /> businesses, it was the consensus of the EDA to write down this land on a pay- <br /> as-you-go basis, based on the fair market price of the property. The need for <br /> • an appraisal to determine this fair market price was discussed along with the <br /> 13065 Orono Parkway • P.O. Box 490 • Elk River, MN 55330 • (612) 441-7420 • Fax: (612) 441-7425 <br />