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• <br />• <br />AGENDA ITEM 3B <br />STAFF ORIGINATOR: Al Rolek <br />DATE: 7/23/01 <br />TOPIC: Public Hearing on the Adoption of a Business Subsidy <br />Policy and a Tax Abatement Policy; Granting a Tax <br />Abatement; and granting a Business Subsidy <br />Vote Required: <br />BACKGROUND: <br />3/5 <br />The City Council will be considering several actions tonight in response to a <br />request to provide financial assistance for the construction of a Target <br />Superstore and Kohl's Department store on the shopping center site on Lake <br />Drive and 35W. <br />1. The first action under consideration is the adoption a Business Subsidy <br />Policy. Minnesota Statutes require that any local public entity that has the <br />power to grant business subsidies must adopt a policy that includes criteria to <br />be considered when evaluating a subsidy request. A determination must be <br />made that the subsidy meets a public purpose other than increasing tax base. <br />Those public purposes can include the potential for growth and spin -off <br />development, whether the project includes special design or amenities <br />beyond that required by the zoning ordinance, or whether it provides needed <br />services within the city. <br />If a project results in the creation of jobs, a business receiving a subsidy will <br />need to establish how many jobs it will create and at what wage. In this policy <br />proposed tonight, the city establishes that those guaranteed jobs created will <br />be at 110% of the federal minimum wage requirements, plus benefits. <br />A public hearing is required before adopting such a policy. <br />2. The second action to be considered is the adoption of a Tax Abatement <br />Policy for the purpose of providing financial assistance to accomplish <br />economic development objectives. Tax abatement is a tool that is available to <br />local public jurisdictions (the city, county and school district) that enables <br />them to capture all or a portion of taxes on a parcel to assist in development <br />within the city. <br />Cities, counties and school districts can each choose whether to participate in <br />a tax abatement. Taxes on a parcel of land can be abated for no longer than <br />10 years, or for no longer than 15 years if two or fewer jurisdictions <br />