Loading...
HomeMy WebLinkAbout06-08-1998 EDA MinutesCITY OF LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY MINUTES DATE: Monday, June 8, 1998 MEMBERS PRESENT: J. Bergeson„ C. Lyden, A. Neal, C. Dahl, K. Sullivan MEMBERS ABSENT: None OTHERS PRESENT: Brian Wessel, Ron Batty, Mary Divine, Fritz Johnson CONSIDERATION OF MINUTES EDA Member Neal moved to approve the minutes from the May 26, 1998 EDA meeting. EDA Member Dahl seconded the motion. Motion passed unanimously. INDUSTRIAL INCENTIVES: TAX INCREMENT FINANCING POLICY Mr. Wessel reviewed with the board the city's past Tax Increment Financing (TIF) policy, and the success the city has had providing land and assessments to qualified companies on a combination of upfront and pay-as-you-go basis. The districts have aged and diminished in capacity, and the city is no longer able to provide a subsidy in the range of 16%, which usually covers land and assessments based on 10,000 square feet of building per acre. Other factors have produced a slow down in industrial development, including competition and less accessible or desirable land. Mr. Wessel requested that the board consider revitalizing the TIF program by allowing the creation of new TIF districts, when appropriate, within Apollo Business Park, Lakes Business Park and Clearwater Creek Development Center. Mr. Batty explained the 2-year lag time between a building getting built and starting to pay taxes. He informed the board that within the last two years the legislature had lowered the C/I tax rate, but the city was protected from a possible lack of increment due to lower taxes through its use of pay-as-you-go. This means if there is not enough increment to meet the obligation, the business doesn't get it. The city is not obligated. Also, the city has never bonded for TIF projects. The legislature also loosened the Green Acres clause, and now manufacturing and distribution facilities can be built on former Green Acres parcels without penalty, but 90% of the jobs must be at 160% of minimum wage. He also explained that the city could now create an new district where an old one was without the historic rate of inflation on the land being a detriment, since the city does not have to include the value of new public improvements into determining the inflation on the property. Mr. Lyden asked if TIF was meant to "start the fire" for industrial development, and that has been done in Lino Lakes, why keep using TIF? Mr. Batty said that was the policy question for the city council to decide, but his opinion was that some cities need it to remain competitive, and Lino Lakes probably still needed TIF to maintain a momentum in industrial development. Mr. Wessel introduced Fritz Johnson, owner of Teknapack in the Apollo Business Park. He described Teknapack as an example of the success of the incubator program. Mr. Johnson is now leasing in the park, and wants to build his own building with a partner, Dana Madsen of NATRA, who is also leasing in the park. Mr. Johnson explained that he lived in the city and wanted to stay in the park, but to continue growing, he needed more space. He planned to also add leasable space to his new building to include other incubator businesses. He said he checked with other cities, and Lino Lakes is about average in its TIF incentives. He added the city needs to be creative with the parcels left in Apollo. Some have double frontage, making them more difficult to develop, and the correctional facility is a perception problem for some prospects. Mr. Batty said he would recommend a new district be formed for each new qualifying project. This has higher administrative costs, but provides more flexibility. Ms. Sullivan questioned if this would cause hopscotch development. Mr. Batty said it would not, but new facilities would keep coming on the tax rolls over time, just as now. It would not lengthen the approvals process. Mr. Wessel noted that if the EDA approved revitalizing the TIF program, staff would be returning in July to recommend establishing a new TIF district to support the Teknapack project. EDA member Bergeson moved to reestablish the TIF Proposal Policy by allowing the creation of new districts, when appropriate, within the Apollo Business Park, Clearwater Creek Development Center and Lakes Business Park. EDA Member Neal seconded the motion. Motion passed unanimously. ADJOURNMENT EDA Member Lyden moved to adjourn at 6:40 p.m. EDA Member Neal seconded the motion. Motion passed unanimously.