HomeMy WebLinkAbout# 05 - Valley Cartage Abatement Payment STAFF REPORT
DATE: July 5, 2017
CONSENT
ITEM #: 5
AGENDA ITEM: Approval for Tax Abatement Payment for Valley Cartage
TO: Mayor and City Council
SUBMITTED BY: Amy La Belle, Accountant
BACKGROUND:
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 property tax
abatement for the years 2014-2017.
This property was not in a TIF district so those incentives were not available. City staff took the
lead on the project and put together an economic development package that included limited
property tax abatements, a sizable forgivable loan ($500k), job training funds and energy credits
to bring new, good paying jobs to the region. The result of this public-private partnership
resulted in the building being purchased and all of the stipulations of the partnership as well as
the state funding requirements being met or exceeded.
ISSUE BEFORE COUNCIL:
Should the Council approve the Tax Abatement Payment for Valley Cartage?
PROPOSAL DETAILS/ANALYSIS:
On April 26, 2013, the City Council approved a limited property tax abatement for the 8665
Hudson Boulevard Property (Parcel ID #33.029.21.44.0037) for the tax years 2014, 2015, 2016
and 2017.
On or before July 30th of each year, the tax abatement for 8665 Hudson Boulevard needs to be
remitted to the owner. Staff is seeking City Council approval to issue a property tax refund to
Norman James, LLC, in the amount of $3,599.15.
FISCAL IMPACT:
$3,599.15
OPTIONS:
1) Approve the payment
2) Do not approve the payment
RECOMMENDATION:
Motion to approve a payment to Norman James, LLC, in the amount of $3,599.15 which
represents the property tax abatement due for 2017.
ATTACHMENTS:
Washington County worksheet on Lake Elmo component of the 2017 property tax abatement
PID:33.029.21.44.0037 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
Payment to be made on or before July 30 of each year.
Tax
Year
Total
Tax
Taxable
Market
Value
Class
Rate
Total Tax
Capacity FD%
FD
Tax
Capacity
Local Tax
Capacity
Current
City
Rate
City
NTC
Tax
Change in
City
Tax
Amount of
Abatement
($10000 max)
Pay 2014:Base Year 150,000 1.50% 2,250
1,975,000 2.00% 39,500 Y First half 2014 taxes paid?
$70,256 2,125,000 41,750 40.1589% 16,766 24,984 27.761% $6,935.74
Y No delinquent taxes?
Current Year 150,000 1.50% 2,250
1,975,000 2.00% 39,500
$77,675 2,125,000 41,750 40.1589% 16,766 24,984 27.761% $6,935.74 $0.00 $0.00
**No Value Increase over 2012**
Pay 2015:Base Year 150,000 1.50% 2,250
1,975,000 2.00% 39,500 Y First half 2015 taxes paid?
$70,256 2,125,000 41,750 34.3461% 14,339 27,411 23.798% $6,523.19
Y No delinquent taxes?
Current Year 150,000 1.50% 2,250
3,136,300 2.00% 62,726
$113,299 3,286,300 64,976 34.3461% 22,317 42,659 23.798% $10,151.87 $3,628.68 $3,628.68 payable July 30,2015
Pay 2016:Base Year 150,000 1.50% 2,250
1,975,000 2.00% 39,500 Y First half 2016 taxes paid?
$70,256 2,125,000 41,750 37.1277% 15,501 26,249 23.121% $6,069.00
Y No delinquent taxes?
Current Year 150,000 1.50% 2,250
3,136,300 2.00% 62,726
$110,005 3,286,300 64,976 37.1277% 24,124 40,852 23.121% $9,445.34 $3,376.34 $3,376.34 payable July 30,2016
Pay 2017:Base Year 150,000 1.50% 2,250
1,975,000 2.00% 39,500 Y First half 2017 taxes paid?
$70,256 2,125,000 41,750 33.1059% 13,822 27,928 20.018% $5,590.50
Y No delinquent taxes?
Current Year 150,000 1.50% 2,250
3,318,900 2.00% 66,378
$112,917 3,468,900 68,628 33.1059% 22,720 45,908 20.018% $9,189.65 $3,599.15 $3,599.15 payable July 30,2017
Grand Total: $10,604.17
City of Lake Elmo - Valley Cartage Economic Development Tax Abatement
City Resolution 2013-27
Item
Tax Payment Status
Y / N
(not part of city agreement)
6/9/2017 Washington County Department of Property Records and Taxpayer Services