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HomeMy WebLinkAbout06-13-2016 EDA PacketLINO LAKES ECONOMIC DEVELOPMENT AUTHORITY MEETING Monday, June 13, 2016 6:00 P.M. City Council Chambers 1. Call to Order and Roll Call 2. Consideration of Minutes of April 11, 2016 3. Action Items A) Public Hearing. Consider Resolution No. 16-03, Approving Amended and Restated Business Subsidy Policy, Michael Grochala 4. Adjourn EDA MINUTES April 11, 2016 DRAFT 1 DATE : April 11, 2016 TIME STARTED : 6:15 p.m. TIME ENDED : 6:28 p.m MEMBERS PRESENT : EDA Members Kusterman, Reinert, Rafferty, Maher, Manthey MEMBERS ABSENT : None OTHERS PRESENT: : Administrator Jeff Karlson; Community Development Director Michael Grochala; City Clerk Julie Bartell The meeting was called to order at 6:15 p.m. by EDA President Kusterman. CONSIDERATION OF THE MINUTES OF FEBRUARY 8, 2016 Economic Development Authority (EDA) Member Maher moved to approve the February 8, 2016 minutes. EDA Member Reinert seconded the motion. Motion carried on a voice vote. CONSIDERATION OF 49 CLUB PROPERTY DEMOLITION Michael Grochala, Community Development Director, reviewed the written staff report and explained that the city has been having discussions with owners of the 49 Club Property. There is the possibility that they will proceed with redevelopment but without that element he noted the possibility of utilizing tax increment financing. At this time, he is requesting that the EDA act on the following recommendations: - Finding the property substandard; - Approval of a preliminary development agreement (with existing property owner). The development agreement was explained and Mr. Grochala pointed out that the agreement does not bind the city to use of tax increment financing but agrees to a cooperative situation as future redevelopment of the property is explored. The action is about making a development district/tax increment an option. The city can move ahead with demolition and the owner will have a window of time to utilize the tax increment tools or they go away. EDA member Maher moved to approve EDA Resolution No. 16-01 as presented. EDA member Rafferty seconded the motion. Motion carried on a voice vote. EDA member Rafferty moved to approve EDA Resolution No. 16-02 as presented. EDA Member Manthey seconded the motion. Motion carried on a voice vote. ADJOURNMENT There being no further business, EDA Member Rafferty moved to adjourn. EDA Member Maher seconded the motion. Motion carried on a voice vote. The meeting was adjourned at 6:28 p.m. LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY AGENDA ITEM 3A STAFF ORIGINATOR: Michael Grochala, Community Development Director MEETING DATE: June 13, 2016 TOPIC: Public Hearing. Consider Resolution No. 16-03, Approving Amended and Restated Business Subsidy Policy VOTE REQUIRED: 3/5 BACKGROUND Before awarding any “business subsidy”, such as financial assistance through the use of Tax Abatement or Tax Increment Financing, the City and EDA are required to adopt criteria regarding such subsidies. Business subsidy criteria was originally adopted by the City in 2001 and revised in 2003. The criteria are intended to set minimum requirements which recipients must meet to be eligible to receive business subsidies. All business subsidy requests must comply with the State’s Business Subsidy Act. A business subsidy must meet a public purpose such as increasing the tax base. The requirements must include specific wage floor for the wages to be paid for jobs created. The majority of changes to the criteria include reference to both the City’s Economic Development Authority (EDA) and the Business Subsidy Act. Section 3.02 was modified to establish a minimum job creation of five (5) jobs. This provision may be waived if, after a public hearing, it is determined that job creation or retention is not part of the public purpose of the subsidy. The Economic Development Advisory Committee (EDAC) reviewed the policy at its June 2, 2016 meeting and recommended approval. The Lino Lakes City Council will hold a public hearing on Monday, June 13, 2016 following EDA consideration. RECOMMENDATION Staff is recommending approval of Resolution No. 16-03. ATTACHMENTS 1. Resolution No. 16-03 2. Business Subsidy Policy 477901v1 JAE LN140-101 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 16-03 RESOLUTION APPROVING AMENDED AND RESTATED BUSINESS SUBSIDY POLICY BE IT RESOLVED By the Board of Commissioners (the “Board”) of the Lino Lakes Economic Development Authority (the “Authority”) as follows: Section 1. Recitals. 1.01. Before awarding any “business subsidy” as defined in Minnesota Statutes, Section 116J.993 to 116J.995, as amended (the “Business Subsidy Act”), the Authority is required to adopt criteria regarding such subsidies after holding a public hearing. 1.02. The Board previously approved business subsidy criteria and has now determined to amend and restate the criteria in accordance with requirements of the Business Subsidy Act. 1.03. The Board has reviewed the amended and restated Business Subsidy Policy on file in City Hall, and has on the date hereof held a duly noticed public hearing at which all interested persons were given an opportunity to be heard. Section 2. Amended and Restated Business Subsidy Policy Approved. 2.01. The Board approves the amended and restated Business Subsidy Policy on file in City Hall, which criteria supersede any prior business subsidy policy or criteria adopted by the Authority. 2.02. Authority staff are authorized to transmit a copy of the amended and restated Business Subsidy Policy to the Minnesota Department of Employment and Economic Development in accordance with the Business Subsidy Act. Adopted by the Board of Commissioners of the Lino Lakes Economic Development Authority this 13th day of June, 2016. The motion for the adoption of the foregoing resolution was introduced by Board Member _______________and was duly seconded by Board Member ________________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: William Kusterman, President ATTEST: Jeff Karlson, Executive Director RHB-232656v1 1 LN140-12 Error! Bookmark not defined. Exhibit ACITY OF LINO LAKES LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY BUSINESS SUBSIDY CRITERIA (Revised June 23, 2003_______, 2016) Section 1. Purpose; Statutory Compliance 1.01 The purpose of this document is to establish the criteria to be considered by the cityCity of Lino Lakes (the “City”) and the Lino Lakes Economic Development Authority (the “EDA”) in processing, evaluating and reviewing requests for business subsidies. It is the intent of the City and the EDA in adopting these revised criteria to comply with Minnesota Statutes, Sections 116J.993 through 116J.995 (the "“Business Subsidy Act"”). The City and the EDA hereby adopts the definitions contained in the Business Subsidy Act for application in the criteria. 1.02. Business subsidy criteria were adopted by the City on July 23, 20012001, revised on June 23, 2003 and are hereby revised. The City hasfurther revised. The Board of the EDA adopted the revised business subsidy criteria on the date hereof. The City and the EDA have the option to amend these criteria again in the future if doing so is determined necessary or appropriate. Amendments to these criteria are subject to the public hearing requirements of the Business Subsidy Act. 1.03. These criteria are intended to set specific minimum requirements which recipients must meet to be eligible to receive business subsidies. TheNeither the City nor the EDA will not adopt business subsidy criteria on a case by case basis. 1.04. In accordance with the Business Subsidy Act, all business subsidy requests must comply with the Business Subsidy Act and other applicable Minnesota statutes. The City’s and the EDA’s ability to grant business subsidies is subject to the limitations established in the Business Subsidy Act. Section 2. Goals and, Objectives, and Requirements 2.01 It is the City’s and the EDA’s intent to advance the following goals and objectives in granting business subsidies: (a) Projects must be consistent with Lino Lakes'City’s comprehensive plan and any other similar plan or guide for development of the community. (b) Business subsidies will not be provided forto projects which have the financial feasibility to proceed without a public subsidy. (c) Potential2.02 When applying for a business subsidy, potential recipients will be required to provide such studies, reports, appraisals, financial information or other data as may be requested by the City or the EDA prior to consideration of a request for a business subsidy. RHB-232656v1 2 LN140-12 479195v2 2.022.03 Business subsidies must be justified by evidence that the project cannot proceed without the benefit of the subsidy. If tax increment financing is used to grant a subsidy, the recipient must demonstrate compliance with all statutory requirements of the TIF Act, including the "“but for"” test, if applicable, and any TIF policy adopted by the City or the EDA. The recipient will be required to provide all documentation necessary for the City or the EDA to make the requisite fundingsfindings under the TIF Act and the Business Subsidy Act. 2.032.04 Recipients will be required to enter into an agreement with the City or the EDA which is consistent with statutory requirements and which contains measurable, specific and tangible goals. The agreement must include a commitment to remain in business in Lino Lakes for a minimum of five years after the benefit date (as defined in the Business Subsidy Act, benefit date means the date the item or work paid for with the business subsidy is placed in service), unless waived by the City or the EDA, and a requirement to comply with the specific job and wage goals established for the project, if any. Section 3. Business Subsidy Criteria 3.01 The City and the EDA recognizes that every proposal is unique. Nothing in these criteria shall be deemed to be an entitlement or to establish a contractual right to a subsidy. The City and the EDA may modify these criteria from time to time and reserves the right to evaluate each project on its individual merits. The City and the EDA may deviate from these criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to the Minnesota state agency charged with administration thereof. 3.02 The following criteria shall be utilized in evaluating a request for a business subsidy: (a) Public purpose. A business subsidy must meet a public purpose, including but not limited to increasing the tax base. Job retention may only be considered a public purpose if the loss of jobs is specific and demonstrable. (b) Increase in tax base. While an increase in the tax base cannot be the sole rounds for granting a subsidy, the City believesand the EDA believe it is a necessary condition for any subsidy. (c) Jobs and Wages. In instances in which job creation is determined to be a goal, it is the City'the City and the EDA will review all of the unique circumstances surrounding the proposed development to determine how many jobs should be required in exchange for the proposed subsidy. If job creation is determined to be one of the main goals of a proposed development, it is the City’s and the EDA’s intent that the recipient create the maximum number of livable wage jobs at the site. with no fewer than 5 jobs. This may include jobs to be retained but only if retention is specific RHB-232656v1 3 LN140-12 479195v2 and demonstrable. The job and wage goal must be attained within two years of the benefit date (as defined in the Business Subsidy Act). The City and the EDA may, after a public hearing, extend for up to one year the period for meeting the job and wage goal. Qualifying jobs are those which pay, at a minimum, 110 percent of the federal minimum wage, plus benefits. Any deviation from the established wage level must be documented in conformity with the requirements set forth in the Business Subsidy Act. If the City or the EDA, following a public hearing, determines that job creation or retention is not part of the public purpose of the subsidy, the wage and job goal may be set at zero. (d) Economic Development. Projects should promote one or more of the following: 1. Encourage economic and commercial diversity within the community; 2. Contribute to the establishment of a critical mass of commercial development within an area; 3. Increase the range of goods and services available or encourage fast growing or other desirable businesses to locate or expand within the community; 4. Promote redevelopment objectives and removal of blight, including pollution cleanup; 5. Promote the retention or adaptive reuse of buildings of historical or architectural significance; 6. Promote additional or spin-off development within the community; or 7. Development of safe and affordable housing; or 8. Encourage full utilization of existing or planned infrastructure improvements. Section 4. Minimum Requirements 4.01. In order for a recipient to be eligible for a business subsidy, the following minimum requirements must be met; (a) Compliance with Sections 2.01 a, b, and c; (b) Compliance with Section 3.02 b; and (c) Compliance with Sections 3.02 c or d.Section 5. Compliance and Reporting Requirements RHB-232656v1 4 LN140-12 479195v2 5.01 Any subsidy granted by the City or the EDA will be subject to the requirement of a public hearing, if necessary. 5.02 It will be necessary for both the recipient and the City or the EDA to comply with reporting and monitoring requirements of the Business Subsidy Act. 5.03 A recipient may be authorized to move from Lino Lakesthe City within five years of the benefit date (as defined in the Business Subsidy Act) only if, after a public hearing, the City or EDA approves the request to move. The City or EDA may discontinue the subsidy if the recipient moves from the City. 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