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<br /> <br />Item Description <br />The Bank of Elk River Expansion Project <br />A. Public Hearing to Consider Tax Abatement and <br />Business Subsidy <br />B. Resolution Authorizing Execution of Tax Abatement <br />and Business Subsid A eement <br /> <br />Item Number <br />5.2 A & B <br /> <br />Prepared by <br />Catherine Mehelich, Director of <br />Economic Develo ment <br />Reviewed by <br />Scott Clark, Community Development <br />Director <br /> <br />City of Elk River <br />REQUEST FOR COUNCIL ACTION <br />Agenda Section Meeting Date <br />Administration February 6, 2006 <br /> <br />Introduction <br />The Bank of Elk River has submitted an application to the City of Elk River for Tax Rebate Financing <br />(Tax Abatement) for their 20,000 square foot corporate office expansion to the existing downtown <br />facility. Specifically, the applicant is requesting the City rebate up to $300,000 of its portion of the new <br />property taxes generated as a result of the expansion project, and for Sherburne County to rebate a <br />matching share for a combined total of $600,000. <br /> <br />Discussion <br />On January 3, 2006 the HRA reviewed the abatement application and adopted a motion to recommend <br />the City Council approve providing up to $300,000 of tax abatement to The Bank of Elk River based on <br />only the new market value generated as a result of the expansion project for a maximum term of 12 years, <br />along with The Bank's commitment to create 20 new full-time positions at a minimum hourly wage of <br />$15.00 within two years of project completion. <br /> <br />The Sherburne County Economic Development Alliance (SCEDA) at its January 25, 2006 meeting <br />considered The Bank's request for tax abatement from the County. The SCEDA Board adopted a <br />motion to recommend Sherburne County's Board of Commissioner approval of up to $300,000 for a <br />maximum term of 10 years. The County Commissioners will hold its public hearing in February. <br /> <br />Financial Impact <br />The Council is being asked to provide up to $300,000 of tax abatement and business subsidy over a <br />maximum term of 12 years. The estimated annual abatement levy for this project from the City would be <br />$27,400. Under the proposed structure, the City would retain the existing tax base generated from the <br />current facility (approximately $12,000 annual). <br /> <br />Attachments <br />. Staff report to the HRA RE: Consider Tax Rebate Financing Application for The Bank of Elk <br />River Expansion, dated January 3, 2006 <br />. Tax Abatement and Business Subsidy Agreement between the City of Elk River and The Bank of <br />Elk River <br />. Resolution Authorizing Execution of a Tax Abatement and Business Subsidy Agreement <br /> <br />S:\EDA \TAXABATE\Bank of Elk River\Memos\REQUEST COUNCIL ACTION 2.6.06.doc <br />