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EDC Minutes March 21, 2003 Not Approved Page 4 III 6. EDC BUSINESS A. Potential Real Estate Acquisition for Residential Development near Co. Rd. H2: During the spring and summer of 2001, City staff promoted a residential buildout project in the southwest corner of the City of Mounds View. Letters were sent to all property owners in an area bounded by County Road H2, Pleasant View Dr., Knollwood Dr., and Woodale Drive. The majority of the residents indicated that they wanted no development to occur and were not interested in subdividing the large lots. A smaller number were open to development if it was limited to single family homes. Currently the City of Mounds View owns or controls approximately 6.5 acres in the north central portion of the block. During the past month, one of the property owners, Blaine Fyksen, has expressed a willingness to sell his property to the City. Mr. Fyksen owns three parcels (totaling 4.6 acres)that border the City's property to the west. He does not want to see high-density residential development in the area, but would be willing to sell if the property would be developed for high-end homes (approx. $450-500,000 each) on 180' lots. There are three financing options that could be considered for developing the Fyksen property: 1) Use Tax Increment Financing(TIF)to acquire the Fyksen parcels. 2) Use Special Projects/HRA funds to acquire the Fyksen parcels. 3) Find a private developer that would acquire both the City's and Fyksen property. After discussion, it was the consensus of the EDC members that the preferred option was#3. B. Review of City's Business Subsidy Policy: As part of the update to the City's Tax Abatement 0 (Rebate) Policy, the EDC needs to update Section VI Subsidy Agreement & Reporting Requirements. In order to do that revision the EDC must first review its Business Subsidy Policy, a separate document. Backman e-mailed to the members copies of the current policy and sample policies from other communities. He mentioned that in 1999, the State Legislature adopted new regulations for the granting of business subsidies by state and local government. The business subsidy law requires each"grantor"(i.e. state or local government agency or public entity) of a "business subsidy" to adopt criteria for awarding business subsidies. A business subsidy is defined as grant, contribution of personal property, real property, infrastructure, the principal amount of a loan at below commercial rates, any reduction or deferral of any tax. The Statutes exclude 22 items from the definition of subsidies, including a subsidy of less than $25,000; business loans or guarantees of $75,000 or less. In 2000 the Legislature adopted several changes to the law, including requirements that the criteria "may not be adopted on a case-by-case basis" and "must set specific minimum requirements that recipients must meet in order to be eligible to receive business subsidies." These changes specified that the criteria must include a "specific wage floor" for the wages to be paid for the jobs to be created. Communities need bring their business subsidies criteria into compliance with Statutes by May 1, 2003. Backman distributed to members business subsidy criteria research that compares wage and job creation criteria for eight communities. After discussion, members agreed to a two-tiered wage floor based upon a percentage above the federal minimum wage. Members wished to have manufacturing jobs at a higher wage floor than for retail. Members agreed that each project should create at a minimum one new fulltime job. C. Other: None 1110