7.1. EDSR 04-17-2023 - Laserfiche WebLink

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Request for Action To Item Number Economic Development Authority 7.1 Agenda Section Meeting Date Prepared by General Business April 17, 2023 Brent O’Neil, Economic Development Director Item Description Reviewed by Review Application – Beaudry Lubricants/Harvest Joshua Mollan, Economic Development Specialist Reaper Reviewed by Cal Portner, City Administrator Action Requested Provide a recommendation, by motion, to the City Council regarding the attached tax abatement application from Beaudry Oil. Background/Discussion The City of Elk River has received a tax abatement application from Beaudry Oil to operate a new lubricants operation at a new site on Elk Lake Road, approximately one-half mile north of its current operations. The new venture would be operated as Beaudry Lubricants, with the property to be developed and owned by Harvest Reaper, LLC, an affiliated real estate company of Beaudry Oil. The abatement request was submitted to both the city and Sherburne County for a total amount of $645,000, citing extraordinary site development costs due to wetland configuration and mitigation on the site, and the necessity of a water main extension from Industrial Blvd. to provide adequate water suppression systems. The new project has a total investment of $4.3 million. It would result in a new 25,000sf. facility and a projected range of 14 to 20 new jobs to the community. Mikaela Huot of Baker Tilly has reviewed the application and submission materials. Ms. Huot’s memo summarizing the application and financial review is attached. In summary, the Baker Tilly review advises a total city abatement amount of $138,204, or 100% abatement for 11 years tied largely to the extension of the water main to the site at a cost of $166,000. Further, the City’s abatement policy has a scoring rubric in which this request shows a score of 37 out of 45. This corresponds to a maximum abatement eligibility of 75% (maximum eligibility is nearly $190,000). Sherburne County will be considering abatement at a future meeting. Should both the city and county approve abatement at the levels guided by its policy, the total amount of abatement would be approximately $200,000 over 11 years. This project and request was presented to the Joint Finance Committee on March 28; the committee unanimously recommended the EDA and City Council consider an abatement in the amount of $138,204. Financial Impact The Joint Finance Committee is recommending an abatement amount of $138,204 over 11 years. This amount is sourced from new city property taxes generated on the project site and is not financed by city or EDA funds. The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity. Updated: January 2023