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City of <br /> Elk = Request for Action <br /> Diver <br /> To Item Number <br /> Economic Development Authori 7.2 <br /> Agenda Section Meeting Date Prepared by <br /> General Business February 16, 2021 Colleen Eddy, Economic Development Director <br /> Item Description Reviewed by <br /> Sportech LLC Tax Abatement Application Cal Portner, City Administrator <br /> Reviewed by <br /> Action Requested <br /> Recommend,by motion,the City Council provide Tax Abatement Assistance for Sportech LLC. <br /> Background/Discussion <br /> The Joint Finance Committee reviewed and recommended the EDA approve Sportech LLC application for <br /> Property Tax Abatement financing. <br /> Sportech LLC applied for financial assistance to fund a portion of the construction costs for a 91,050sf building <br /> expansion located at 10752 168"' Circle. Sherburne County will consider a similar request on February 16, 2021. <br /> The project is expected to retain the existing 323 employees and require a minimum of 85 new FTEs within <br /> three years of completion. The average wage of new jobs is projected to be $18.20/hr ($23.04 with benefits) <br /> which meets the city business subsidy policy provisions. <br /> The original building has 14 years of abatement remaining. The proposal is to amend the original abatement <br /> agreement to include the expansion. The county assessor estimates the expansion's taxable value at$2,825,000 <br /> accounting for a city tax share for the remaining 14 years of approximately$362,880. The city's tax abatement <br /> and business subsidy policy objectives are met with the proposed level of assistance. <br /> Financial Impact <br /> The owner,Meritex,proposes an$2,825,000 million project funded through private funds, owner cash equity <br /> and city/county tax abatement of$769,875 for up to 14 years with no more than $362,880 from the city. <br /> Mission/Policy/Goal <br /> The purpose of the tax abatement assistance is to provide financial and technical assistance for the creation and <br /> retention of new employment to an existing business located in the community. <br /> Attachments <br /> ■ Financial Analysis <br /> ■ Executed Tax Abatement Application <br /> ■ Meritex Lease Agreement <br /> ■ Second Amendment to Sportech Lease <br /> ■ 2021 B2 Expansion <br /> ■ Sportech Expansion Proposal <br /> The Elk River Vision <br /> A Y�elcoming community nvith revolutionary and spirited resourcefulness, exceptional P U W E H E o s r <br /> service, and community engagement that encourages and inspires prosperity ,g /` UR <br />