07-05-2016 Council Work Session Minutes

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CITY COUNCIL WORK SESSION July 5, 2016 APPROVED 90 Ms. Huot reviewed a PowerPoint presentation explaining the specifics of tax increment 91 financing — how it is created, why it is created, the process to establish, etc. The use of 92 tax increment is limited to eligible costs, including some public improvements. 93 Regarding the methods for financing costs for a tax increment project, the use of G.O. 94 bond debt is the riskiest for the city. There are different types of tax increment districts, 95 with the city looking at an economic development type in this case. She reviewed the 96 findings necessary by the city to approve a district under statute. She reviewed some of 97 the decisions that the city would have to make to proceed, including but not limited to, is 98 the project feasible, what term/amount of assistance should be considered? She 99 reviewed the specifics of the United Properties TIF proposal, including eligible costs, and 100 also a schedule for council consideration. 101 102 Brandon Champeau and Brad Davidson of United Properties were introduced. 103 104 Director Grochala explained how twenty percent of the increment could be available to 105 the city and how that could be used, including approximately five percent in 106 administrative charges. On the project he noted that United Properties is a favorable 107 business to have in the city and there are benefits such as public improvements that the 108 development would bring to the city. On employment, there would be some growth in 109 the area as well as the addition of many seasonal positions. The growth of sixty jobs 110 includes two different job and wage goals — one attached to creation of the district and 111 one attached to the city's job and wage goals (set forth in the city's findings). 112 113 The mayor asked about the impact on the neighborhood to the south and the developer 114 representative said the operations would be very similar to what Distribution are doing at 115 the current location in Lino Lakes. It is not a twenty-four hour operation and typically it 116 doesn't involve Saturdays. Mayor Reinert said it looks as if every truck using the facility 117 may be heard by the neighborhood; he confirmed that there are basically two shifts, 118 morning and afternoon to evening. The reps noted that the landscape plan includes noise 119 blocking and sight lines relative to the trucks. It was pointed out that there is a ten acre 120 property that provides some buffering. 121 122 The council discussed the "but -for" nature of this proposal. Ms. Huot reviewed some 123 challenges facing the use of tax increment — the green acres label that carries certain wage 124 requirements, the infrastructure needs of the site, within the district there are wetland and 125 soil costs, straddling two cities. Those are the things that are reviewed. 126 127 The mayor asked if the development would occur without the TIF and a developer 128 representative said that comes back to tenants and he feels that they wouldn't be there 129 without it. The mayor asked about the approximately $240,000 that could be available to 130 the city and Ms. Huot explained again that there are restrictions on use (noting that the 131 legislature may soon be adding more restrictions). She noted also that there is a 132 deadline/timeline restriction for use of those funds. Community Development Director 133 Grochala noted use of that type of funding from another development district at a nearby 134 interchange improvement project. Potentially something like improvements to Cedar 3