09-22-2003 EDA Packet - Laserfiche WebLink

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AGENDA ITEM 3 STAFF ORIGINATOR: Mary Alice Divine DATE: 09/22/03 TOPIC: Public Hearing on the proposed business subsidy to Panattoni Development, LLC Vote Required: Simple Majority BACKGROUND: Panattoni Development has made a request for tax increment financing on behalf of the tenant, Distribution Alternatives, Inc. (DAI). Panattoni will be constructing a 265,000 sq. ft. distribution facility in the Marshan Lake Industrial Park, and leasing the space to DAI. DAI is a third party distribution center that provides warehousing and administrative services for a variety of clients. DAI currently has facilities in Arden Hills and Roseville, and will be consolidating its headquarters and distribution services in Lino Lakes. The company employs approximately 60 full time employees, including accounting, information systems, marketing, operations and warehouse staff, plus additional temporary employees. The company has committed to hiring at least four (4) new employees within two years at no less than $10.00 per hour, plus benefits. Based on an analysis of information provided by Panattoni and DAI, staff and the city's TIF consultant recommend providing five years of increment at $127,680 per year for a total of $638,400. EDA Business Subsidy Criteria has been established for use in evaluating a request for a business subsidy. The following criteria should be used in evaluating a request for a business subsidy: 1. Public purpose. A business subsidy must meet a public purpose, including but not limited to increasing the tax base. Job retention may only be considered a public purpose if the loss of jobs is specific and demonstrable. 2. Increase in tax base. While an increase in the tax base cannot be the sole rounds for granting a subsidy, the EDA believes it is a necessary condition for any subsidy. 3. Jobs and Wages. In instances in which job creation is determined to be a goal, it is the EDA's intent that the recipient create the maximum number of livable wage jobs at the site. This may include jobs to be retained but