07-25-2016 Council Packet* - Laserfiche WebLink

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