7.0. EDSR 05-08-1995 - Laserfiche WebLink

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ITEM NO. 7 ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY MEMORANDUM TO: Economic Development Authority FROM: William Rubin, Executive Directo 91_ DATE: May 8, 1995 SUBJECT: Request for Tax Increment Financing Assistance -Neos, Inc. Introduction The EDA is in receipt of a request for Tax Increment Financing (TIF) from Mr. Jack Mowry, Neos, Inc., 12797 Meadowvale Road. The request for TIF assistance relates to the proposed construction of a 12,000 square foot manufacturing facility on two lots in the McChesney Industrial Park. Neos, a company that designs and builds machinery - specializing in packaging • machinery, would occupy 3,600 square feet of space. The balance of the space is intended for long-term industrial tenants. TIF funds in the amount of $80,000 would be used to"write down" the cost of the two lots Mr. Mowry/Neos, Inc., will acquire and for site preparation costs. Background With previous industrial expansions, TIF funds have been used by the City/EDA to assist local companies with their expansion projects. Recent examples include Alltool Manufacturing, Timron Precision Gear, and Tescom Corporation. TIF funds have been used to reduce project costs relating to the land acquisition and the site development component of the project. With each manufacturing project, an "Economic Development District" has been established. These districts are designed to last a few years. Since 1990, new TIF districts created by a city will result in the loss of state aid. With an Economic Development District,state aid is lost as soon as the new project begins paying property taxes. With redevelopment TIF Districts, state aid loss is less severe and is calculated on a graduated step-up basis. Preliminary estimates of the state aid loss with the Neos TIF District will be available on Monday. • P.O. Box 490 • 13065 Orono Parkway • Elk River, MN 55330-1743 • (612) 441-7420 • Fax: (612) 441-7425 Equal_Opportunity Housing and Equal Opportunity Employment