08/27/2001 Council Packet - Laserfiche WebLink

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• • AGENDA ITEM 3A STAFF ORIGINATOR: Al Rolek DATE: 8/27/01 TOPIC: Public Hearing on Granting a Tax Abatement and Granting a Business Subsidy Vote Required: 3/5 BACKGROUND: A public hearing was opened on July 23 and has been continued regarding the request for tax abatement for the Marketplace project on 35W /Lake Drive. According to the Minnesota Business Subsidy law, a public hearing must also be held before granting a subsidy that exceeds $100,000. This public hearing is to take public comment on these issues. The Marketplace, which includes a Target Superstore, a Kohl's Department Store and additional smaller retail and restaurant space, is estimated to be a $24 million project that will generate a substantial commercial tax base and provide needed services for Lino Lakes residents. The project developers have requested financial assistance to the Target and Kohl's portion of the project. The proposal before the city council is as follows: 1. A $491,000 net present value tax abatement to Target and Kohl's. Tax abatement provides a pay -as- you -go subsidy by reimbursing to the project the city portion of the additional taxes generated by the new development. This financial assistance will be paid, with 7% interest, until the amount is paid in full, or for a maximum of six years, whichever comes first. 2. The project's $105,000 surface water management fee will be waived. 3. Fifty percent (50 %), for an amount of $74,312, of the SAC/WAC area charge will be waived. 4. The city will have the ability to recover the waived fees with tax abatement dollars. The city has established criteria to evaluate the granting of a business subsidy. In addition to increasing the tax base, a project receiving a subsidy should promote one or more of the following: • 1. Compliance with Comprehensive or Other Plans. 2. Development of Marginal Property.