07-25-2016 EDA Packet - Laserfiche WebLink

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LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY AGENDA ITEM 3B STAFF ORIGINATOR: Michael Grochala, Community Development Director MEETING DATE: July 25, 2016 TOPIC: Public Hearing. Consider Resolution No. 16-05, Approving Contract for Private Development and Awarding Sale of Tax Increment Revenue Note. VOTE REQUIRED: 3/5 BACKGROUND United Properties has made a request for tax increment financing on behalf of the tenant, Distribution Alternatives, Inc. (DAI). United Properties will be constructing a 402,000 square foot building in the proposed Clearwater Creek Business Park and leasing the building to DAI. DAI is a third party distribution center that provides warehousing and administrative services for a variety of clients. In 2004, DAI consolidated its headquarters and distribution services in Lino Lakes, moving into a 265,000 square foot facility in the Marshan Lake Industrial Park. The company has continued to grow and is in need of a larger facility. DAI currently employs 120 full time employees, plus additional temporary positions during the year. The new facility will be the located in the southwest quadrant of the I-35E/CSAH 14 interchange. The location will allow utilization of the transportation improvements that have been completed over the past 8 years. The estimated value of the new construction is approximately $18,000,000. The estimated tax increment generated over the life of the district is approximately $2,613,000. Based on an analysis of information provided by United Properties, staff and the City's financial consultants, are recommending providing $1.2 million in assistance over a period of approximately 5.5 years. The assistance will be on a "pay as you go" basis for site improvements and infrastructure costs. The EDA will issue a "note" in the amount of $1,200,000 in exchange for the improvements identified in the agreement. The developer will be reimbursed by tax increments generated by the development on an annual basis. In addition to completion of the improvements, the developer will be responsible for ensuring the tenant meets the following Job and Wage goal requirements over the term of the assistance: (i) the retention of sixty (60) full-time equivalent jobs in the City on the Development Property, and (ii) the hourly wage of the jobs to be retained under subdivision (i) to be at least 110% of the federal minimum wage, exclusive of benefits. The developer will also be required to cause the tenant to pay ninety percent (90%) or more of the employees at the facility at a rate equal to or greater than one hundred and sixty percent (160%) of the federal minimum wage for individuals over the age of twenty (20).