10-27-2021 Council Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Keis and Members of City Council FROM: Chris Heineman, City Administrator DATE: October 27, 2021 RE: Public Hearing for establishment of Tax Increment Financing District 7-3 and adoption of a Tax Increment Financing Plan, including provision of a business subsidy pursuant to MN Statutes, Sections 116J.993 to 116J.995 (Business Subsidy Act). ACTION TO BE CONSIDERED: The City Council is asked to conduct a public hearing to receive public input related to the proposed establishment of Tax Increment Financing District 7-3 and adoption of a Tax Increment Financing Plan, including provision of a business subsidy pursuant to MN Statutes, Sections 116J.993 to 116J.995 (Business Subsidy Act). BACKGROUND: The City of Little Canada received a request for assistance through Tax Increment Financing (TIF) to assist with financing a portion of the extraordinary development costs related to the construction of a new 74,500 square foot warehousing facility. Staff has been working with the developer for the past ten months on a potential project for the site. Due to the poor soil conditions on this site, significant subsurface improvements are required for a development of this nature to occur on this site. The developer is proposing the acquisition of a vacant lot for growth and expansion of its existing company operations. The proposed property for this project has been identified as an ideal location for the company to locate and meet current demands, as well as allow for future anticipated growth plans, subject to a feasible financing plan. The developer’s original construction budget for the project did not account for the level of site development costs that are required for construction of the building on the identified site. The increased costs related to site development and soils correction have resulted in extraordinary costs that have been identified to be $1,023,000. The project, upon construction, is expected to create at least 5 full time equivalent new jobs to the City of Little Canada with average hourly wages of $30/hour plus benefits. The current projections would more than exceed the City’s existing business subsidy policy provisions. The City is considering the establishment of Tax Increment Financing (Economic Development) District No. 7-3 within Development District No. 7 to facilitate development of the proposed project. A map showing the boundaries of the proposed Tax Increment Financing District No. 7-3 is included in the TIF Plan. The TIF Plan is adopted as the tax increment financing plan for the TIF District. The Little Canada City Council is asked to make the following findings: