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HomeMy WebLinkAbout01-24-2000 EDAC PacketAGENDA ECONOMIC DEVELOPMENT AUTHORITY MONDAY JANUARY 24, 2000 6:00 P.M. 1. Call to Order and Roll Call 2. Consideration of Minutes of Monday, November 8, 1999 3. Consideration of Annual Appointments A. EDA Officers: President, Vice President, Treasurer, Assistant Treasurer, Executive Director and Secretary B. Official Newspaper C. Official Depositories 4. Public hearing: Proposed Business Subsidy to H&L Mesabi 4A. Consideration of Resolution No. 00-01 Approving a Business Subsidy for H&L Mesabi 5. Consideration of Contract for Private Development between Lino Lakes EDA and H&L Mesabi Company 6. Considera ' of Resolution No. 00-02 requesting Anoka County to decertify TIF District Not 1-4 7. Adjourn DATE: MEMBERS PRESENT: MEMBERS ABSENT: OTHERS PRESENT: CITY OF LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY MINUTES Monday, November 8, 1999 K. Sullivan, J. Bergeson, C. Dahl, C. Lyden, A. Neal Brian Wessel, Mary Divine, Ron Batty CONSIDERATION OF MINUTES EDA Member Neal moved to approve the minutes from the April 12, 1999 EDA meeting. EDA Member Bergeson seconded the motion. Motion passed unanimously. PUBLIC HEARING: ADOPTION OF BUSINESS SUBSIDY CRITERIA Mr. Batty explained to the EDA that this criteria was a requirement under a legislative change to regulate subsidies. Any entity granting a subsidy must adopt a criteria. The criteria presented tonight are in outline document that provides flexibility. The legislation states that creating tax base cannot be the only criteria for providing subsidies, but that wages and jobs must be created. The legislation also requires that a public hearing be held for any subsidy over $100,000, and the city council must approve the subsidy. This criteria is not contractual, and does not obligate the EDA in any way to providing subsidies. Mr. Batty stated that this criteria calls for jobs being created to be at 110% of the federal minimum wage, plus benefits. There is no requirement for a particular number of jobs or wage. Each subsidy would be subject to negotiation over jobs and wages, and requires EDA and council approval. Mr. Bergeson asked if this was minimally adequate to meet the statute, and what meaning did it have at this minimal requirement. Mr. Batty replied this criteria reflects the intent of the statute and reminds local governments of what touchstones they need to consider when granting subsidies. Most cities are adopting similar criteria. This is a general policy, and the intent is to react to specific subsidy requests based on the goals of the city. Mr. Lyden questioned the true spirit of the law, and why standards are being legislated. Mr. Batty replied that this statute reflects the differing opinions at the legislature over what should be required. No consensus has ever been reached over whether wage and job goals should be mandated. This is a compromise. Since economic development is related to tax base in many cities, the wages are generally an add -on. This legislation asks that cities need to think more broadly. EDA President Sullivan opened the public hearing at 6:19 p.m. George Knotek, 6108 Oakwood Lane, stated this legislation opens the process up for public involvement. He requested the city look at getting the maximum return for investment of public money. He noted that the city of Albert Lea spent public dollars to attract a business with low paying jobs. The wages were too low to attract local residents, and those who took the jobs were in need of public services because they were not paid a living wage. The city needs criteria that also protect existing business and addresses other job -related issues. Mr. Knotek added that businesses shop around for incentives, and Lino Lakes should not assume that it has to pay for business to come. Mr. Knotek presented options to amend the criteria and asked they be included in the record. The proposed amendments included: 1) Change the wage goals to "150% of the federal poverty level for a family of four, or 130% of the federal poverty level for a family of four if employer paid comprehensive health insurance is provided." 2) Adopt an overall goal that city residents hold 60% of the new jobs created each year under the business subsidy policy. 3) Adopt an overall goal that one living wage job be created per $35,000 of assistance granted. Donna Carlson, 6808 East Shadow Lake Drive, suggested the city take time to consider concerns over the wage and job goals. The city needs to ask if the business needs assistance. She doesn't want to cripple economic development, but the city needs to question whether a business needs assistance, if it competes with existing businesses, if it is sensitive to the environment, creates new jobs for local residents, and pays adequate wages and benefits. She cited a study that showed Lino Lakes low on the creation of jobs per amount of subsidy. She stated the city should raise the bar, although she believes most businesses are creating more jobs at higher wages than the report shows. EDA President Sullivan closed the public hearing at 6:37 p.m. Mr. Wessel stated that the city has criteria for selection of companies, although it is appropriate to review it. EDAC is discussing this issue and is looking at incentives at its December 2 meeting. Mr. Knotek was encouraged to come and participate. Ms. Sullivan stated that Lino Lakes has a good TIF policy and uses it conservatively. Companies must meet the "but for" test and other standards. Only industrial projects are granted T1F subsidies. Mr. Lyden said he'd like more public involvement and would like a standard that related the amount of TIF to the number of jobs created. Mr. Bergeson noted this is a requirement from the state to quantify the city's subsidy policy. The policy does not reflect the city's practice. He suggested passing the policy and improving and refining over time. Mr. Batty stated that this criteria is another layer of subsidy regulation and does not replace the city's TIF criteria. The city could labor over a policy, then a great proposal could come to the city and it misses the goals that were set. The city should look to the general goals in this policy and jobs should be dealt with on a case by case basis. In Lino Lakes, job creation has not been the primary reason for business subsidies. Ms. Sullivan noted that the focus is successful businesses, and the city has criteria for business selection. She questioned if continuing this discussion would jeopardize schedules for new business. Ms. Divine stated that a company is seeking site plan review and approval of a development agreement in December. ACTION: Mr. Bergeson moved to adopt Resolution 99-01, adopting Lino Lakes Economic Development Authority Business Subsidy Criteria. Mr. Neal seconded the motion. Motion passed unanimously. CONSIDERATION OF RESOLUTION NO. 99-02 CALLING FOR A PUBLIC HEARING REGARDING A PROPOSED SUBSIDY TO H&L MESABI Ms. Divine explained that this company was seeking TIF assistance for construction of a facility in the Apollo Business Park. The company is a distributor of portable screening plants for sand and gravel. ACTION: Mr. Bergeson moved to adopt Resolution NO. 99-02 calling for a public hearing on the proposed business subsidy to H&L Mesabi at 6 p.m. on Monday, December 13, 1999 in the council chambers. Mr. Neal seconded the motion. Motion passed unanimously. ADJOURNMENT EDA Member Dahl moved to adjourn. EDA Member Neal seconded the motion. Motion passed unanimously. Meeting adjourned at 7 p.m. AGENDA ITEM 3A STAFF ORIGINATOR: Brian Wessel DATE: 1/24/99 TOPIC: Consideration of annual appointments Vote required: Simple majority BACKGROUND: According to Lino Lakes EDA by-laws, the EDA elects a president, vice president, secretary, treasurer and assistant treasurer each year. The offices of president, vice president and treasurer must be held by EDA members. In 1999 the officers were as follows: President: Mayor Kim Sullivan Vice President: Councilmember Caroline Dahl Treasurer: Councilmember Andy Neal Secretary: Mary Divine Assistant Treasurer: Finance Director Executive Director. City Administrator Linda Waite Smith Staff suggests the following appointments: President: Mayor John Bergeson Vice President: Councilmember Caroline Dahl Treasurer: Council discretion Secretary: Mary Divine Assistant Treasurer: Ry-chel Gaustad Executive Director: Linda Waite Smith OPTIONS: 1. Elect a president, vice-president, secretary, treasurer and assistant treasurer to serve in 2000. 2. Return to staff for further consideration RECOMMENDATION: Option 1 AGENDA ITEM 3B STAFF ORIGINATOR: Brian Wessel DATE: 1 /24/00 TOPIC: Consideration of EDA Official Newspaper Vote Required: Simple majority BACKGROUND: The EDA is required to publish public notices regarding its meetings. In the past, the EDA has designated the official newspaper to be the same as the city's official newspaper. OPTIONS: 1. Appoint the Quad Community Press as the EDA official newspaper 2. Return to staff for further consideration RECOMMENDATION: Option 1 AGENDA ITEM 3C , STAFF ORIGINATOR: Brian Wessel DATE: 1 /24/00 TOPIC: Consideration of Official Depositories Vote Required: Simple Majority BACKGROUND: The list of legal depositories approved for 2000 by the City Council is as follows. Norwest Bank, First Bank NA, Firstar Bank, Merrill Lynch, Dain Bosworth, Juran and Moody, and Prudential Bache, Lino Lakes State Bank, Lakeland National Bank and League of Minnesota Cities 4M Fund. These depositories are used for check, savings and investing city dollars. On occasion the EDA and the city have financial transactions that will require the EDA to have designated legal depositories. OPTIONS: 1. Approve the list of legal depositories 2. Retum to staff for further consideration RECOMMENDATION: Option 1 AGENDA ITEM 4 STAFF ORIGINATOR: Brian Wessel DATE: TOPIC: Public Hearing on the proposed business subsidy to H&L Mesabi Vote Required: Simple Majority BACKGROUND: H&L Mesabi has requested tax increment financing (TIF) assistance in the amount of $110,200 for the purpose of constructing,, a 15,000 square foot building in the Apollo Business Center. The 15-year-old company is a distributor of construction, aggregate and environmental equipment, portable screening plants, and supply items. The industries served out of the Twin Cities facility are aggregate, processing, construction and govemmental customers. The company's main facility is in Hibbing, Minnesota, with a sales and distribution facility currently located in Blaine that employs nine. The proposed facility will have a minimum market value of $690,800 for a total of $30,778 in annual taxes (based on 2000 dollars). According to the Minnesota Business Subsidy law, the EDA must hold a public hearing before granting a subsidy that exceeds $100,000. In addition to increasing the tax base, the granting of a subsidy can be evaluated in terms of whether it promotes one or more of the following: CV Encourage economic and commercial diversity within the community; 2. Contribute to the establishment of a critical mass of commercial development within an area; 3. Provide basic goods and services, increase the range of goods and services available or encourage fast-growing businesses; 4. Promote redevelopment objectives and removal of blight, including pollution cleanup; 5. Promote the retention or adaptive use of buildings of historical or architectural significance; 6. Promote additional or spin-off development within the community; Encourage full utilization of existing or planned infrastructure improvements. 1-3s The Business Subsidy law also requires that the grantee enter into a development agreement with the EDA which includes a commitment to remain in business at the site for five years, and comply with a wage and job goal. H&L Mesabi has agreed to a goal of one job within two years at a starting wage of $10 per hour, plus benefits. This commitment falls within the requirements to meet the EDA's business subsidy criteria. These requirements are spelled out in the development agreement that is before the EDA tonight for approval. OPTIONS: 1. Open the public hearing 2. Continue the public hearing RECOMMENDATION: Option 1 AGENDA ITEM 4A STAFF ORIGINATOR: Brian Wessel DATE: 1/24/00 TOPIC: Consideration of Resolution No. 00-01 approving the proposed business subsidy to H&L Mesabi VOTE REQUIRED: 3/5 BACKGROUND: Light industrial projects in the Apollo Business Park are consistent with the city's comprehensive plan designed to encourage economic growth and diversity. As part of the Lino Lakes Town Center, the projects moving into the park play a significant role in providing a critical mass of development to support retail and service businesses in the commercial center. This project is also consistent with the city's intent to recover the return on its investment in the existing infrastructure within the park. This resolution recognizes that H&L Mesabi meets the goals and objectives outlined by the EDA in its business subsidy criteria. This project must go through a series of approvals, including approval of the development agreement, site and building plan and conditional use permit. It is recommended that approval of the business subsidy be contingent upon final approval of the project by the City Council. OPTIONS: 1. Adopt Resolution No. 00-01 2. Return to staff for further consideration RECOMMENDATION: Option 1 Member introduced the following resolution and moved its adoption: LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 00-01 RESOLUTION AUTHORIZING APPROVING BUSINESS SUBSIDY TO H&L MESABI BE IT RESOLVED by the Lino Lakes Economic Development Authority as follows: Section 1. Recitals 1.01. The Lino Lakes Economic Development Authority (the "Authority") approved a tax increment financing plan (the "Plan") for the Tax Increment Financing District No. 1-9 (TIF District No. 1-9) on December 14, 1998. 1.02. On December 14, 1998, the City Council of the City of Lino Lakes (the "City") approved the Plan. 1.03 On November 8, 1999, following a public hearing, the Authority approved the Lino Lakes Economic Development Authority Business Subsidy Criteria (the "Criteria"), pursuant to Minnesota Statute, sections 1167.993 through 1167.995 (the `Business Subsidy Act.") 1.04. H&L Mesabi, Inc. a Minnesota Corporation, (the "Developer") has requested a business subsidy through tax increment financing in the amount of $110,200 for the construction of a light industrial facility in the Apollo Business Center. 1.05. Pursuant to Section 116J.994, subd. 5 of the Business Subsidy Act, the Authority has on this date held a public hearing on the proposed subsidy to the Developer, following published notice as required by law, at which hearing all persons wishing to express an opinion were given an opportunity to do so. Section 2. Findings. 2.01. It is hereby found and determined that the business subsidy is in the best interest of the Authority because it is consistent with and promotes the goals established by the Authority in adopting the Criteria. 2.02. It is hereby found and determined that granting the business subsidy to the Developer furthers the Authority's general plan of economic development of the community by encouraging growth and expansion of an industrial park which has not been used to its full potential. 2.03. Pursuant to the Criteria established by the Authority, it is hereby found and determined that the business subsidy promotes the following: 1. Encourages economic and commercial diversity within the community; 2. Contributes to the establishment of a critical mass of commercial development within an area; and 3. Encourages full utilization of existing or planned infrastructure improvements. Section 3. Authorization. 3.01. The business subsidy to the Developer as described above is hereby approved. 3.02. The President and Executive Director are hereby authorized and directed to execute a Development Agreement, including the business subsidy agreement required by the Business Subsidy Act, and other appropriate documents to facilitate the finalization of the business subsidy to the Developer. 3.03. Staff and consultants are hereby authorized and directed to take any and all other actions necessary or convenient to effect the intent of this resolution, including seeking approval of the subsidy from the Lino Lakes City Council. Dated: , 2000. President ATTEST: Executive Director The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof and the following voted against same: Whereupon said resolution was declared duly passed and adopted. i� a.7.a raj, zze AGENDA ITEM 5 STAFF ORIGINATOR: Briars Wessel DATE: 1/24/00 TOPIC: Consideration of the Contract for Private Development between Lino Lakes EDA and H&L Mesabi BACKGROUND: This development contract outlines the conditions for public assistance to H&L Mesabi for the construction of a 15,000 SF facility on 3.1 acres in the Apollo Business Center (see attached map). In this agreement, the city agrees to provide a maximum amount of tax increment financing totaling $110,200, which amounts to 16% of the MMV. The agreement removes the assessments of $65,3994 upfront, and reimburses the developer a $5,000 escrow upon completion of the building. The remaining $39,806 will be provided on a pay-as-you-go basis toward the cost of the land. The city will be reimbursed first for the assessments and administration costs, and then the developer will receive the pay-as-you-go increment. Estimated payback for H&L Mesabi is in 2009, seven years from the first tax collection. This project is in TIF District 1-9, which requires a 10% local contribution ($13,220) from the city's general fund. The interest that the city has lost on the years it has deferred assessments in the business park is a legitimate expense that will cover the local contribution. OPTIONS: 1. Approve the contract for private development between Lino Lakes EDA and H&L Mesabi 2. 2. Return to staff for further consideration RECOMMENDATION: Option 1 J I LILAC ST. - S.T. HWY NO. 49 M* I kfes-fe/ Apollo Business Center AGENDA ITEM 6 STAFF ORIGINATOR: Brian Wessel DATE: 1/24/00 TOPIC: Resolution No. 00-02 requesting Anoka County to decertify TIF District No. 1-4 Vote Required: Simple majority BACKGROUND: The Lino Lakes EDA established this economic development TIF District in 1990 to include the G.M. Development portion of the Apollo Business Park. Within the original budget was TIF assistance to Emtech, the first new facility in the park. The district was modified in 1995 to provide assistance to Blue Heron, and then again in 1996 to remove undeveloped parcels from the district. According to state statute, the district must now be decertified. Any unused increment will be used for eligible District expenses, after which any excess increment will be returned to Anoka County for redistribution. This resolution asks Anoka County to decertify the district effective March 26, 2000. OPTIONS: 1. Adopt Resolution No. 00-02 requesting Anoka County to decertify TIF District No. 1-4 2. Return to staff for further consideration. RECOMMENDATION: Option 1 J I ULAC ST. - S.T. HWY NO. 49 Apollo Business Center Member introduced the following resolution and moved its adoption: LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 00-02 RESOLUTION REQUESTING ANOKA COUNTY TO DECERTIFY TAX INCREMENT FINANCING DISTRICT NO. 1-4 WHEREAS, The City Council of the City of Lino Lakes (the "City") created its Tax Increment Financing District No. 1-4 (the "District"), County identifier Nos. L5 and K4, within its Development District No. 1 (the "Project") on March 26, 1990; and WHEREAS, administrative responsibility for the District was transferred in 1990 from the City to the Lino Lakes Economic Development Authority (the "Authority"); and WHEREAS, the Authority amended the plan for the District on June 12, 1995 to modify the budget and again on March 25, 1996 to delete parcels from the District; and WHEREAS, as of the date hereof all bonds to which tax increment from the District had been pledged have been paid in full or defeased; and WHEREAS, there exists other authorized costs of the Project which remain unpaid; and WHEREAS, the Tax Increment Financing Plan (the "Plan") adopted on March 26, 1990 for the District requires, pursuant to M.S. 469.176 Subd. 1, that the duration of the District will be eight years after the date of receipt by the City of the first tax increment or ten years from approval of the tax increment financing plan, whichever is less; and WHEREAS, the receipt of the first tax increment was July of 1996; and WHEREAS, March 26, 2000 is ten years from the approval of the tax increment financing plan, which is the lesser; and WHEREAS, the City desires by this resolution to cause the decertification due to its expiration of the District after which all property taxes generated by property within the District will be distributed in the same manner as all other property taxes beginning March 26, 2000. NOW, THEREFORE, BE IT RESOLVED by the Lino Lakes Economic Development Authority as follows: 1. It is hereby found and determined by the Authority that the District is required to be decertified by reason of its statutory expiration. 2. The Authority asks the City to join with it in requesting that Anoka County decertify TIF District No. 1-4, effective March 26, 2000. 3. The Authority authorizes the expenditure of the tax increments remaining in the District's fund in accordance with the modified Plan. 4. The Authority authorizes and directs City staff, after all authorized expenditures and obligations of the District have been paid, to return to the Anoka County Auditor, in accordance with M.S. 469.176, Subd. 2(4), all remaining increments as excess increments. 5. The Authority authorizes and directs City staff and consultants to take any and all other actions which may be necessary to accomplish the intent of this resolution. Dated: January 24, 2000 President ATTEST: Executive Director The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof And the following voted against same: Whereupon said resolution was declared duly passed and adopted.