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The Elk River Vision <br />A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community <br />engagement that encourages and inspires prosperity <br /> <br /> <br />Request for Action <br /> <br />To <br />City Council <br />Item Number <br />4.13 <br /> <br />Meeting Date <br />July 15, 2024 <br />Prepared By <br />Brent O'Neil, Economic Development Director <br /> <br />Item Description <br />Resolution 24-41 Amending the Development <br />Agreement and Note for Tax Increment District <br />No. 26 (Shoot Steel) Agreement 24-21 <br />Reviewed by <br />Cal Portner <br /> <br />Action Requested <br />Adopt, by motion, Resolution 24-41 amending the Development Agreement for Tax Increment Financing <br />(TIF) No. 26 and TIF Note Agreement 24-21. <br /> <br />Background/Discussion <br />Shoot Steel relocated to Elk River in 2021 and was the beneficiary of assistance through TIF No. 26. As part <br />of the assistance, Shoot Steel was required to increase its employee headcount to 13.5. The development <br />agreement, as amended, requires the new jobs to be created by June 2024. Due to post-Covid hardships, the <br />company has been unable to meet those hiring objectives and presently employs five. The headcount at the <br />time of the TIF application was 7.5. <br /> <br />The development agreement contains a prescriptive remedy in the event the jobs goal is only partially fulfilled. <br />The number of jobs created or retained are divided by the total job requirement, and the TIF amount is <br />reduced proportionately. The original TIF award was $190,000 and the number of counted positions are <br />approximately 37% of those required, reducing the TIF award to $70,370.37 <br /> <br />This action amends the development agreement to memorialize this change and concurrently amends the TIF <br />Note, which is a formal obligation of TIF district proceeds to the developer. <br /> <br />The company has stabilized despite not meeting the hiring goals and has a bright future in Elk River. Staff will <br />continue to be engaged with Shoot Steel to support its future plans. <br /> <br />Financial Impact <br />The TIF award is reduced by $119,629.63, and the anticipated payback period is shortened from 2031 to <br />2026. The developer would continue to receive full bi-annual payments until the amended principal amount <br />has been paid in full, which is presently at $53,989.93 outstanding after 2023 and 2024 payments were applied. <br /> <br />Mission/Policy/Goal <br />Support business growth in Elk River. <br /> <br />Page 214 of 389