09/24/2001 Council Packet - Laserfiche WebLink

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• • AGENDA ITEM 3A STAFF ORIGINATOR: Al Rolek DATE: 9/10/01 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, continued on August 27 and was again 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 use of Tax Abatement on this project allows the city to capture the additional city taxes generated by the new development and to rebate them back over a period of years to the users of the property. In this project, only the additional taxes paid will be rebated; the original taxes on the undeveloped property will continue to be collected by the city and used for general purposes. The project developers have requested financial assistance to the Target and Kohl's portion of the project. Prior to tonight, the developers had requested a subsidy that consisted of $786,127 over a period of six years. The abatement portion of that subsidy was $606,814, collectible over a maximum of six years. The developers also requested a waiver of Surface Water Management Fees and a portion of SAC/WAC fees, in the amount of $179,312. These fees could be recovered by the city by using an additional two years of abatement dollars, if the city council should elect to do so. Based on City Council direction, further negotiations have resulted in a new staff recommendation based on the following terms: 1) An amount of tax abatement not to exceed $519,300, or a maximum term of five years of abatement, whichever comes first. 2) A waiver of an estimated $105,000 in Surface Water Management Fees.