01-24-2000 EDA Minutes - Laserfiche WebLink

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PUBLIC HEARING ON THE PROPOSED BUSINESS SUBSIDY TO H&L MESABI EDA President opened the hearing at 6:20 p.m. Mr. Wessel informed the board that H&L Mesabi was requesting tax increment financing (TIF) in the amount of $110,200 for the purpose of constructing a facility in the Apollo Business Center. Ms. Divine stated that the Minnesota Business Subsidy Law requires a public hearing if a public entity provides a subsidy of more than $100,000. The granting of the subsidy should be evaluated by the EDA in terms of meeting the EDA criteria, which include encouraging economic and commercial diversity, and encouraging full utilization of existing infrastructure. The law also requires that a business commit to a wage and job goal. This company has agreed to a goal of one job within two years with a starting wage of $10 per hour, plus benefits. Ms. Carlson asked to explain the benefits. Mr. Tom Immen, representing the owner, stated it included medical insurance and vacation. Mr. Batty stated that the EDA adopted broad criteria so that jobs can be looked at in context with each proposal. The issue is whether the emphasis is on creating tax base or creating jobs. Ms. Carlson noted she had approved the site plan at the Planning & Zoning Board, but that job creation is a part of the statute and should not be overlooked. The wage proposed is not considered a living wage. This needs to be a topic of discussion for the city. Mr. Immen noted that the nine employees at the new facility have an average wage of $57,000/year. However, if a job goal is set too high and the company does not meet it, the loss of subsidy after making a large capital investment would be devastating. EDA Member Carlson moved to close the public hearing. EDA Member Dahl seconded the motion. Motion passed unanimously. RESOLUTION NO. 00-01 APPROVING THE PROPOSED BUSINESS SUBSIDY TO H&L MESABI EDA member O’Donnell moved to approve Resolution No. 00-01 contingent upon final project approvals by the city council. EDA Member Carlson seconded the motion. Motion passed unanimously. CONSIDERATION OF CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN EDA AND H&L MESABI Mr. Wessel stated that the development contract provides $110,200 in TIF. The agreement removes $65,394 in assessments upfront, and reimbursed the developer the $5,000 escrow upon completion of the building. The remaining $39,806 will be provided on a pay-as-you-go basis toward land costs. The city will be reimbursed for assessments and administration costs before the developer is reimbursed. The project’s local contribution of $13,220 is covered by the loss of interest the city has lost on deferred assessments. EDA Member O’Donnell moved to approve the contract contingent upon final project approvals by the city council. EDA Member Dahl seconded the motion. Motion passed unanimously.