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REQUEST FOR ACTION <br />To Item Number <br />Ci Council 5.1. <br />Agenda Section Meeting Date Prepared by <br />Community Development February 19, 2008 Catherine Mehelich, Director of <br /> Economic Develo ment <br />Item Description Reviewed by <br />Consider Resolution Authorizing Execution of a Tax Abatement Lori ohnson, Ci Administrator <br />and Business Subsidy for E&O Tool Expansion, Public Reviewed by <br />Hearing <br />Action Requested <br />State statute requires local government agencies to hold a public hearing to receive comment on Tax <br />Abatement and Business Subsidies. Following the public hearing, staff recommends the City Council <br />approve the attached "Resolution Authorizing Execution of a Tax Abatement and Business Subsidy <br />Agreement" with Caswell and Osterman Properties, LLC for the E & O Tool expansion project. The <br />draft agreement is also attached. <br />Background/Discussion <br />The owners of E & O Tool are requesting property Tax Abatement for the expansion of their <br />manufacturing operations in Elk River. The attached staff report describes the proposed project and Tax <br />Abatement request that were reviewed by the EDA on February 11, 2008. This Abatement request meets <br />all of the EDA's policies regarding employment and valuation. The EDA is recommending the City <br />Council's approval of the Tax Abatement and Business Subsidy for the project. <br />Financial Impact <br />• Up to $411,000 City Tax Abatement assistance for a time period of up to thirteen years <br />(approximately $33,000 annual city portion generated as a result of the project). <br />o A request has also been made to Sherburne County for up to $411,000 of Tax <br />Abatement assistance for a time period of up to ten years per County policy. <br />• The project will result in an estimated market value of $4,033,700. <br />• The project will result in the retention of 124 full-time jobs and the creation of 25 full-time <br />jobs at hourly wages not less than $15.00. <br />Attachments <br />• Staff Report dated February 11, 2008 Regarding EDA Recommendation <br />• Resolution Authorizing Execution of a Tax Abatement & Business Subsidy Agreement <br />• DRAFT Tax Abatement and Business Subsidy Agreement <br />Action Motion by Second by Vote <br />Follow Up <br />C:\Documents and Settings\jjohnson\Local Settings\Temporary Internet Files\OLK49\2 ]9 08 EO Action Requested.doc <br />