01-23-2019 Council Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Keis and Members of City Council FROM: Chris Heineman, City Administrator DATE: January 23, 2019 RE: Approval of Development Agreement for Bix Real Estate Holdings, LLC The City Council conducted a public hearing and adopted a Resolution approving a modification to Development District No. 7 and establishment of Tax Increment Financing District 7-2 at the City Council meeting on November 28, 2018. Since that time, staff has worked with our consultants at Ehlers and Bond Counsel at Briggs and Morgan to complete the attached Development Agreement for this project. The Development Agreement follows the Minnesota Statute and Business Subsidy Law and outlines the legal requirements of the City and Developer related to TIF District 7-2. The costs for all site improvements will be paid by the developer, and the City of Little Canada shall reimburse the developer from property tax payments by the developer based on the increased property value as outlined in the TIF Note. The TIF Note shall terminate prior to the final payment date of February 1, 2028, when the payments of principal and interest on the TIF Note equal $190,615. According to the Agreement, the tenant (BIX Produce Company) must create at least 18 full time jobs at an hourly wage and benefits totaling of at least $12.35 per hour plus benefits within two years from the "Benefit Date", which is the earlier of the date the Developer completes the construction of the Project or the Tenant occupies the Project. If the job goals are not met, the Developer must repay all of the Business Subsidy to the City. If the job goals are only met in part, the Developer will repay a portion of the Business Subsidy (plus interest). In addition to the Business Subsidy provided by the City, the project also received a Minnesota Job Creation Fund award through the MN Department of Employment and Economic Development (DEED). The proposed project will relocate approximately 400 existing jobs and create 160 net new positions over the next five years. The project will require an investment of approximately $25M to acquire the existing 207,000 square foot facility, up-fit the building to food-grade standards and furniture, fixtures, equipment and IT. The proposed improvements include approximately 60,000 SF of refrigerated, cooler and freezer space; 91,000 SF of storage, dock and maintenance; 26,000 SF of processing; and 20,000 SF of office space. ACTION REQUESTED: Staff recommends approval of a Motion to Approve the Development Agreement by and Between the City of Little Canada, Minnesota and Bix Real Estate Holdings, LLC.