HomeMy WebLinkAbout#7 Approval for Tax AbatementTHUE,-
[AKE
AGENDA ITEM:
SUBMITTED BY:
THROUGH:
AYOR COUNCIL CO
CATION
DATE: July 19, 2016
CONSENT
ITEM # 7
Approval for Tax Abatement Payment for Valley Cartage
Cathy Bendel, Finance Director
Cathy Bendel, Finance Director
REVIEWED BY: Kristina Handt, City Administrator
SUGGESTED ORDER OF BUSINESS:
Questions from Council to Staff .......... ..... ...... ......... ..... Mayor Facilitates
Report/Presentations....... ..... . ........... ................City Staff,
Smith Schafer
Questions from Council to Staff._ ...... ................ ...... .Mayor Facilitates
Public Input, if Appropriate.. ........ ......... ..... ........ ....... .Mayor Facilitates
Call for Motion ..... ............. ....... ..... ........ Mayor & City Council
Discussion ...... . ......... ........ . ..... Mayor & City Council
Action on Motion................ .................... .................. ........ Mayor Facilitates
POLICY RECOMMENDER: Finance
FISCAL IMPACT: $3,376.34
On April 26, 2013, the City Council approved a limited property tax abatement for the 8665
Hudson Boulevard (Parcel ID #33.029.21.44.0037) for the tax years 2014, 2015, 2016 and 2017.
SUMMARY AND ACTION REOUESTED:
On an annual basis, by July 30'1' each year, the tax abatement for 8665 Hudson Boulevard needs
to be remitted to the owner. Staff is seeking City Council approval to refund the City of Lake
Elmo portion which needs to be refunded for 2015 which is $3,376.34.
-- Page
City Council Meeting[Consent Agenda Item 7.1
July 19, 2016
STAFF REPORT:
In the winter of 2012 the City of Lake Elmo was approached by a company from Wisconsin with
interest in purchasing a corporate office building at 8665 Hudson Boulevard for the purpose of
establishing a headquarters and creating 50 new jobs. They requested a limited tax abatement for
the years of 2014-2017.
This location was not in a TIF district so those incentives were not available. The City staff took
the lead on a project to put together an economic development package that consisted of tax
abatement, a sizable forgiveable loan ($500k), job training funds, and energy credits to bring
new good paying jobs to the region. The results of this public -private partnership resulted in the
building being purchased and all of the stipulations of the partnership and state funding having
been exceeded.
The following were the benefits as a result of this transaction:
Valley Cartage moved their Corporate Headquarters to Lake Elmo and created in excess
of 50 new jobs.
Improvements were made to the building at 8665 Hudson Boulevard increasing the
taxable market value by over $1 million.
Retention of a large tenant a key commercial building on the 1-94 corridor where the City
planned for key growth.
Participation by Washington County in the abatement process for their share of the tax
increment for 2014-2017.
RECOMMENDATION:
It is recommended that the City Council approve a payment to Norman James in the amount of
$3,376.34 which represents the City share of tax abatement due for 2016.
ATTACHMENTS:
. Washington County worksheet on Lake Elmo component of 2016 tax abatement
-- page 2 --
City of Lake Elmo - Valley Cartage E' 'omic Development Tax Abatement
City Resol 2013-27
PID: 33,09.21.44.0037 TAG 3701
Duration: 4 years Pay 2014-Pay 2017 (Pay 2018 will be considered if requested by owner)
Terms: Market Value in year of abatement must be greater than Pay 2012 Market Value of 2,125,000
Total tax in year of abatement must be greater than Pay 2012 total tax of $70,256.
Maximum of $10,000 per year/$40,000 total
No payment will be made if the first half taxes for the year are unpaid or if delinquent taxes exist for prior years.
Payment to be made on or before July 30 of each year.
Tax
Year Item
Pay 2014: Base Year
Current Year
Pay 2015: Base Year
Current Year
Pay 2016: Base Year
Current Year
Total
Tax
Taxable
Market
Value
Class Total Tax
Rate Capacity
FD%
FD
Tax LocaLocal Tax
Capacity Capacity
Curren
City
Rate
150,000 1.50% 2,250
1,975,000 2.00% 39,500
$70,256 2,125,000 41,750 40.1589% 16,766 24,984 27.761% $6,935.74
1 150,000 I 1.50°/01 2,250
1,975,000 I 2.00% 39,500
$77,675 I 2.125,000 I 41,750 I 40.1589%1 16,766 24,984 I 27.761%1 $6,935.74
"No Value Increase over 2012"
150,000 1.50% 2,250
1,975,000 2.00°A 39,500
$70,256 2,125,000 41,750 34.3461°,4, 14,339 27,411 23,798°/0 $6,523.19
150,000
3,136,300
$113,299 I 3,286,300
$70,256
150,000
1,975,000
2,125,000
1 150,000
3,136,300
I $110,005 I 3,286,300
1.50%
2.00°/o
2,250
62,726
64,976 I 34,3461%1 22,317 42,659 1 23,798%I $10,151.87
1.50% 2,250
2,00% 39,500
41,750 37,1277% 15,501 26,249 23.121% $6,069.00
1.50%
2.00%
hange in
City
Tax
Amount of
Abatement
$10000 max),
$0.00 $0.00
Tax Payment Status
Y I N
(not part of city agreement)
First half 2014 taxes paid?
[]No delinquent taxes?
yl
yi
First half 2015 taxes paid?
No delinquent taxes?
$3,628.68 $3,628.68 payable July 30,2015
Y
First half 2016 taxes paid?
No delinquent taxes?
2,250
62,726
64,976 1 37.1277°/01 24,124 40,852 I 23.121°/01 $9,445.34 $3,376,34 $3,376,34 payable July 30,2016