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Home My WebLink About01-15-2016 CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT COMMISSION AGENDA MOUNDS VIEW CITY HALL FRIDAY, January 15, 2016 1. CALL TO ORDER 2. ROLL CALL 3. APPROVAL OF THE AGENDA 4. APPROVE MINUTES from December 18, 2015 5. EDC BUSINESS A. Administer Oath of Office, Jason Helgemoe, Jim Freichels, and Gary Stevenson B. Elect Chairperson and Vice-Chairperson C. Review Combined Tax Abatement &TIF Policy (Public Assistance Policy & Application) 6. REPORTS OF STAFF A. Mounds View Project Updates 7. REPORTS OF COMMISSIONERS 8. NEXT REGULAR EDC MEETING – February 19, 2016 9. ADJOURN Commissioners: Chair Jason Helgemoe, Dan Larson, Jim Freichels, Gary Stevenson, Jessica Rieland, Laurie Shoop, and Royal Dahlstrom City Staff: Jim Ericson, City Administrator Brian Beeman, Business Development Coordinator Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota Regular Meeting December 18, 2015 City of Mounds View, Council Chambers 2401 County Road 10, Mounds View, MN 55112 1. CALL TO ORDER Chair Jason Helgemoe called the meeting to order at approximately 7:30 a.m. 2. ROLL CALL Members Present: Chair, Jason Helgemoe, Vice Chair, Jim Freichels, Commissioners, Gary Stevenson, Jessica Rieland, and Dan Larson Members Absent: Royal Dahlstrom & Laurie Shoop Staff Present: Business Development Coordinator, Brian Beeman & City Administrator, Jim Ericson Meeting Attendees: Council Member, Gary Meehlhause 3. APPROVAL OF DECEMBER 18, 2015, AGENDA Motion/Second: Commissioner Freichels moved and Commissioner Stevenson seconded the approval of the December 18, 2015 EDC agenda. Motion Carried: 5 Ayes, 0 Nays 4. APPROVAL OF NOVEMBER 20, 2015, EDC MINUTES Motion/Second: Commissioner Stevenson moved and Commissioner Larson seconded the approval of the November 20, 2015 EDC minutes, as presented with the correction of Jason Helgemoe’s last name. Motion Carried: 5 Ayes, 0 Nays 5. EDC BUSINESS Approve EDC Meeting Schedule for 2016 Chair Helgemoe presented the 2016 EDC Meeting Schedule. Helgemoe asked if the meeting date was set by the EDC. Business Development Coordinator, Beeman informed the Commission that the annual meeting dates are established by the EDC Bylaws. If the dates are changed then the EDC can amend via a Resolution. If the EDC chooses to change the time, this can be done by a motion. Helgemoe asked for input by the EDC. The Commissioners were in agreement that the proposed meeting times will work for 2016. Helgemoe asked for a motion. EDC Minutes December 18, 2015 Page 2 of 5 Motion/Second: Commissioner Freichels moved and Commissioner Helgemoe seconded the approval of Resolution No. 15-EDC-39 establishing the calendar of meeting dates for 2016 starting at 7:30 a.m. Motion Carried: 5 Ayes, 0 Nays EDC Applications Next, Chair Helgemoe presented the background on the EDC Applicants, stating there are three seats open and there were three applicants. Commissioner Freichels, and Helgemoe submitted applications for the two Business Representative openings, and Commissioner Stevenson submitted an application for the Resident Representative opening. Helgemoe stated that all three openings were for the term starting January 1, 2016 and ending December 31, 2018. Helgemoe called for a motion. Helgemoe thanked Commissioners Freichels and Stevenson for serving on the EDC and expressed his gratitude for the opportunity to serve. Motion/Second: Commissioner Larson moved and Commissioner Rieland seconded the approval of both Commissioner Freichels and Helgemoe as the Business Representatives and Commissioner Stevenson as the Resident Representative for terms starting January 1, 2016 and ending December 31, 2018 and made a recommendation to the EDA on same. Motion Carried: 5 Ayes, 0 Nays 6. REPORTS OF STAFF Crossroad Point Redevelopment Project Business Development Coordinator, Beeman provided the Commission with an update on the Crossroad Pointe redevelopment site. Beeman stated the EDA heard comments from The Beard Group on November 23, 2015 who requested to build a three level apartment structure as Phase I, the square shaped 2.05 acre area and use Phase II, the 1.78 acre triangular shaped property next to County Road 10 as a staging area. Phase I would be a 119 units with underground parking. The EDA reviewed and discussed the idea and ultimately decided to approve The Beard Group constructing in phases. One EDA Member expressed his concern with allowing apartments on this site and that the site was to be a destination and in his opinion, apartments are not a destination. However, with the TCAAP site being developed, the EDA unanimously approved allowing a phased development for apartments. The next step is to approve the pre-development agreement, then the actual development agreement. Once approved, The Beard Group is hoping to start construction at the end of the first quarter in 2016 or the beginning of the second quarter. EDC Minutes December 18, 2015 Page 3 of 5 It is assumed that the Beard Group will be submitting an application for a Redevelopment TIF which is why the EDC and EDA are reviewing and approving updates to all of the financial incentive policies. Business Retention & Expansion Visit (BR&E) Updates Coordinator Beeman informed the Commission that he has completed three business visits since the last meeting. The first, was Sky’s Salon. They have one employee and are happy were they are. They were pleased that the city was considering going to a collective garbage service. They gave the city 7 of 10 possible points for serviceability. Next, was Raymond Vandeveer Realty who started in 2008 and services clients in a 50 mile radius. They have three office spaces available. There are several other businesses in the same facility and they gave the city 8 of 10 points. Last, was Midwest Medical Services. They have been in Mounds View since 1006, just completed a $120,000 renovation and purchased the building about a month ago. They are looking for 25,000 more square feet and would like to own versus lease. They have looked as the vacant Zep Manufacturing building but the owner in unwilling to sell the property. They are a good stable company employing 142 fulltime and 42 part-time employees. The company is growing and they are looking to expand in other states. Rice Creek Commons (TCAAP) Development Update Next, Coordinator Beeman provided an update on anticipated improvements relating to Rice Creek Commons. He informed the Commission that the Ramsey County project manager spoke at the last Mounds View Business Council meeting. Stating the soils corrections were originally to be remediated to a commercial grade, but later decided to upgrade the remediation to a residential grade. This increased the costs another $1.5 mill but overall the County felt that it was worth the money. The aquifer is still contaminated but they removed 49 miles of material including 400,000 tons of concrete and asphalt, 43,700 feet of railroad track, 39,000 feet of fencing, and nearly 178,000 feet of piping from the gas mains to sanitary pipe. Ninety three percent of all these materials were recycled and can be reused for other projects. Chair Helgemoe stated that he had attended a New Brighton Chamber meeting and Heather Worthington, County Administrator spoke more in depth on the project and said they were up for an award because of the remediation activities. There were massive amounts of wood and steel recycled. They are going to start talking to a Master Developer in the first quarter of 2016 and they will begin construction on the site in 2017. It is a very big project that will affect Mounds View. Helgemoe suggested that the EDC possibly have Heather speak at an EDC meeting at a later date to go more in depth on some of the details of the project. Helgemoe stated they were proposing about 4000 residents and new projections are about 2500. Commissioner Freichels stated that the biggest project for Mounds View will be the interchange improvements starting in 2016. Learning how business will be the least impacted, and inlet and outlets and alternate routes were also good information. EDC Minutes December 18, 2015 Page 4 of 5 Beeman stated, that by 2030 they are expecting 20,000-30,000 in traffic counts and will be looking for a large grocer as an anchor. Helgemoe, added attracting a grocer was also brought up in his New Brighton meeting. The area is devoid of a large grocer and they would also expect more retail to follow this type of anchor business. Beeman said the Twin Cities North Chamber would like to combine a few cities and hold all future Business Council Meetings quarterly. Beeman said this last meeting had a good turnout and so the quarterly meetings may end up being a success. The next Business Council meeting will be held March 9, 2016 and the location has not been determined. Mounds View Project Updates Beeman provided an update on the Bel Rae occupancy levels stating they are now 60% leased. There are no changes with the Snyder building. The business addressing issue came up again at the Mounds View Business Council meeting. The responsibility is the County’s and they would need to come up with the resources to change out the signs with a new agreed upon address. Until then, there is not much the city can do besides lobby the County officials. Beeman encouraged the Commissioners to try to attend one of the upcoming Economic Gardening meetings stating they have CEO’s from all over the region that meet to discuss issues they are dealing with in their companies and they always have good speakers. The last speaker was an angel investor and two other entrepreneurs who explained how they went through the process of attracting money to start their companies. One business owner was an expert in defense contracts and government contracts and the other was an entrepreneur from Ireland who explained the various hoops he had to go through to be successful. Chair Helgemoe asked when the next meeting will be held. Beeman said with the holidays we wasn’t certain but he was expecting another meeting in mid-January. 7. REPORTS OF COMMISSIONERS Chair, Jason Helgemoe asked for reports from Commissioners. Commissioner Rieland stated that Bio Life is experiencing difficulty with clients not being able to find them do to the confusing addressing. Bio Life has signed an agreement with a company that drops a pin and inputs the data once then all of the other on-line mapping companies are able to sync with the correct address location on their mapping systems. Helgemoe asked if Coordinator Beeman could send this information out to the local businesses. Beeman said he would send out the information once received. Helgemoe said that getting the signs replaced would still be nice. Helgemoe asked Rieland how Bio Life was doing. Rieland said they are growing and hope to do well again in 2016. 8. NEXT REGULAR EDC MEETING Hearing no further comments from Commissioners or the audience, Helgemoe stated the next meeting will be held January 15 at 7:30 a.m. Beeman added that for the January meeting the EDC will be reviewing the TIF & Tax Abatement policies assuming they are back from the City Attorney in time for the next meeting. Beeman sai d he is hoping to have the policies approved by the EDC and EDA before the developer submits EDC Minutes December 18, 2015 Page 5 of 5 an application. The EDC will also be conducting the Oath of Office for the new Commissioners and appointing a Chair and Vice Chair. For the February 19, 2016 meeting, the EDC will be reviewing their 2016 priorities and the EDC Bylaws. Helgemoe . 9. ADJOURN There being no further business, Chair Helgemoe adjourned the December 18, 2015, meeting at 8:00 a.m. Respectfully submitted, _______________________________ Brian Beeman Business Development Coordinator Item #: 5A Meeting Date: January 15, 2016 Type of Business: EDC City of Mounds View Staff Report To: Economic Development Commission From: Brian Beeman, Business Development Coordinator Item Title/Subject: Administer Oaths of Office to Newly Appointed EDC Members Background The Economic Development Authority (EDA) appointed three members to the Economic Development Commission (EDC) on January 11, 2016—Jason Helgemoe, Business Representative, Jim Freichels, Business Representative and Gary Stevenson, Resident Representative. As per standard practice, all new commission appointees are required to be sworn in, or in other words, take an oath of office. Staff Recommendation The Oaths of Office for Jason Helgemoe, Jim Freichels, and Gary Stevenson are attached and will be administered at the January 15, 2016 EDC meeting. Respectfully submitted, ____________________________ Brian Beeman, Business Development Coordinator City of Mounds View Economic Development Commission Oath of Office I, Gary Stevenson, do solemnly swear, to support the Constitution of the United States and of this state, and to discharge faithfully the duties devolving upon me, as a member of the Mounds View Economic Development Commission, to the best of my judgment and ability. _____________________________ Gary Stevenson Date: January 15, 2016 Witness: ______________________________ Brian Beeman Business Development Coordinator City of Mounds View Economic Development Commission Oath of Office I, Jason Helgemoe, do solemnly swear, to support the Constitution of the United States and of this state, and to discharge faithfully the duties devolving upon me, as a member of the Mounds View Economic Development Commission, to the best of my judgment and ability. _____________________________ Jason Helgemoe Date: January 15, 2016 Witness: ______________________________ Brian Beeman Business Development Coordinator City of Mounds View Economic Development Commission Oath of Office I, Jim Freichels, do solemnly swear, to support the Constitution of the United States and of this state, and to discharge faithfully the duties devolving upon me, as a member of the Mounds View Economic Development Commission, to the best of my judgment and ability. _____________________________ Jim Freichels Date: January 15, 2016 Witness: ______________________________ Brian Beeman Business Development Coordinator Item #: 5B Meeting Date: January 15, 2016 Type of Business: EDC City of Mounds View Staff Report To: Economic Development Commission From: Brian Beeman, Business Development Coordinator Item Title/Subject: Appoint 2016 EDC Chairperson and Vice Chairperson Background Per the following Section 408.07 of the Mounds View City Code: Subd. 1 Organization: At the first regular meeting of the year, the Commission shall appoint a chairperson from among its voting members. This appointment shall be subject to Authority approval and shall consist of a one (1) year term. The position of chair shall rotate among members, with no Commissioner serving in that capacity for more than two (2) consecutive terms. The Commission shall also elect a vice-chair from among its appointed members for a term of one (1) year. The Commission may create and fill such other offices from its members as it may determine to transact Commission business. Current and past EDC Members highlighting past Chairpersons is attached. Staff Recommendation Consistent with City Code, Staff recommends that the EDC appoint the 201 6 EDC Chairperson and Vice Chairperson. The appointment will be confirmed by the EDA on Monday, January 25, 2016. Respectfully submitted, ____________________________ Brian Beeman, Business Development Coordinator Economic Development Commission (EDC) Member History The City Council formed the EDC by Ordinance 542 on June 27, 1994. The EDC is unlike any other City Commission because the EDC represents both residents and businesses. Below is a history of those who have served on the EDC since its inception. Names of Commissioners who have served as EDC Chair are bolded. Names of Commissioners who have served as business representatives are underlined. Commissioner Years Served Business 1) Rosemary Goff 1994-2000 2) Peg Mountin 1994-1995 3) Dan Nelson 1994-1998 4) Delane Welsch 1994-1997 5) Mark Malone 1994-1996 Western Bank 6) Ronald Schmidt 1994-1997 Amoco 7) Philip Seipp 1994-1995 Sysco 8) Brian Sjoberg 1996-1997 Dynex Industries 9) Bev Tarhark 1996-1998 10) Steven Larson ????-1998 11) Cindy Carlson 1997-2001 Western Bank 12) Tom Field 1997-2007 13) Sean Walther 1999-2003 14) Wendy Marty 1999-2001 15) Julie Olsen 1999-2000 Realtor 16) Jerold Kahn 1999-???? 17) Torri Johnson 2000-2012 Xcel Energy 18) Greg Belting 2000-2014 Silver View Chiropractic 19) Stan McDonald 2001-2003 20) Dave Fox 2002-2004 Fedtech 21) Jason Helgemoe 2002-Current Western Bank/Northeast Bank 22) Jackie Entsminger 2003-2010 23) Jerry Jaker 2005-2007 MN Institute of Public Health 24) Gary Meehlhause 2006-2012 Resident Rep. Delux Corp. 25) Dan Larson 2008-Current Environ Lab 26) Jennifer Wagner 2008-2013 27) Jim Paron 2011-2014 Resident Rep. 28) Jim Freichels 2013-Current Dell-Comm 29) Gary Stevenson 2013-Current Resident Rep. 30) Jessica Birken 2014-2014 Attorney 31) Jessica Rieland 2015-Current BioLife Plasma Services 32) Laurie Shoop 2015-Current Resident Rep. Remax 33) Royal Dahlstrom 2015-Current Resident Rep. Chef Item #: 5C Meeting Date: January 15, 2016 Type of Business: EDC City of Mounds View Staff Report To: Economic Development Commission From: Brian Beeman, Business Development Coordinator Item Title/Subject: Review Public Financing Policy & Application Introduction: As staff was reviewing fee schedules and policies for 2016 in relation to Tax Increment Financing (TIF) and Tax Abatements, it became apparent that the TIF, and Tax Abatement policies were outdated and in need of attention. As a result, staff has reviewed each financial incentive policy and is providing a proposed draft to be reviewed by the EDC for further consideration by the EDA. Discussion: The City of Mounds View’s Tax Abatement Policy was last updated September 22, 2003. The city’s TIF Policy was last updated June 12, 2000. As staff was reviewing the policies, it became apparent that some of the language in the policies is in need of updating due to statutory changes and to clarify language that often causes confusion in agreements. Ehler’s, the city’s financial consultant and Kennedy & Graven, the city’s legal consultant, have both reviewed and recommended that the TIF & Abatement policies be combined. The updated version seeks to clarify and bring the policy up-to-date with current statutes and has also included language from the many current city policies they use on a daily basis. Below is a summary of the changes. The proposed draft policy is now entitled, “Mounds View EDA Public Financing Policy”. The combined policy proposes the following:  Combines the purposes, objectives, and policies from the previous abateme nt and TIF policies. These were very similar, so all of those policy ideas are represented in the combined policy.  The TIF policy had square footage, tax a nd valuation minimums listed. We removed this concept because any project that meets all of the policy criteria will need to at least meet those thresholds anyway. The old policy had evaluation criteria that assigned points for these things. Excluding this simplifies the policy. Reports of Staff January 15, 2016 Page 2 of 3  We removed the section about administration of TIF, as many of the concepts discussed in that section are handled elsewhere in the policy. The remaining TIF administration items are very detailed to include in a policy. Instead, we included in the Public Financing Principals section this language - Tax Increment Finance districts will be administered in accordance with applicable Minnesota State Statutes, the Tax Increment Finance Plan, and the Development District Plan.  In the Business Subsidy section, we simplified the language to harmonize with the Business Subsidy Policy and avoid being redundant.  The application process and fees match the Business Subsidy Policy. (i.e., $3,000 non-refundable application fee and a $10,000 depos it once the assistance has been approved to move forward to be prorated and returned to the applicant for any unused portion at the city’s discretion.  The TIF and abatement policies differed in their approach to having the applicant agree to the fee. The abatement policy had a stand-alone agreement to be executed, whereas the TIF application requires a signature acknowledging the fee (and requires it to be remitted with the application). The latter approach is cleaner so that is how the policy is written. There would be a term sheet, preliminary development agreement, or some other type of agreement if the applicant gets to that point that will contractually obligate payment of the fees.  As per Ehler’s advice, we modified the sample but-for analysis to reflect current financing rates and to show a return with assistance that is just under 8%, rather than the 12% listed in the previous policy. Since Ehler’s typically advises returns limited below 12%, we thought this made sense, so as not to give the wrong impression.  There is now one application document that combines the two previous to preserve all previous elements of both.  There is one Commercial Industrial review worksheet and one Housing worksheet. We tried to leave this exactly the same as before, however there are minor changes for consistency with the policy revisions. Reports of Staff January 15, 2016 Page 3 of 3 Recommendation: 1. Review the Mounds View Public Financing Policy & Application and provide direction to staff, highlighting any recommended changes if any. 2. Make a motion recommending to the EDA to review and approve the proposed changes amending the Mounds View TIF & Tax Abatement Policy into one policy. Respectfully submitted, ______________________________ Brian Beeman Business Development Coordinator Attachments: 1. 2000 Mounds View Tax Increment Financing Policy (Existing) 2. 2003 Mounds View Tax Abatement Policy (Existing) 3. Combined Public Financing Policy & Application (Proposed) M:\Administration\Economic Development\TIF\POLICY & APPLICATION\6-12-00, TIF Policy Updated (Revised Signatures).doc City of Mounds View Economic Development Authority Tax Increment Financing Policy & Application Adopted: 5/12/97 Revised: June 12, 2000 2 Table of Contents I. General Policy 3 II. Projects Eligible for Tax Increment Financing 3 III. Costs Eligible for Tax Increment Financing 3 IV. Determination of the Amount of Assistance to the Applicant 4 V. Type of Assistance 4 VI. Establishing a Tax Increment Finance District 5 VII. Administration, Pooled Funds, and Parcel Decertification 5 VIII. Application Process 6 IX. Attachment A: Application for Tax Increment Finance 7 X. Attachment B: Deposit Agreement 11 XI. Attachment C: Application Proposal Review Worksheet 14 XII. Sample But-For Analysis 16 3 I. GENERAL POLICY: The Mounds View Economic Development Authority has the powers under the Minnesota Statute Sections 469.124 through 469.137 and sections 469.001 through 469.047 to govern and monitor the use of tax increment financing for Mounds View’s tax increment districts and the Mounds View development district which encompasses the entire boundaries of the City of Mounds View. It is the responsibility of the Mounds View Economic Development Authority to use tax increment financing as a tool to accomplish the City’s economic development and redevelopment goals and objectives. The Mounds View Economic Development Authority understands and abides by the fundamental principal which makes tax increment financing viable to encourage development and redevelopment which would otherwise not occur. The Mounds View Economic Development Authority shall consider tax increment financing in cases that serve to accomplish the City’s development goals and activities as hereby defined in projects eligible for tax increment financing. II. PROJECTS ELIGIBLE FOR TAX INCREMENT FINANCING: Projects eligible for consideration of Tax Increment Financing assistance per the Mounds View Development Project Plan dated May 9, 1994 include, but are not limited to (1) the attraction, retention, rehabilitation and preservation of commercial, industrial, retail, residential, recreational and public service facilities; (2) new and rehabilitated public infrastructure; (3) community and other public service centers; (4) senior/mature adult and/or other housing development partnerships or other multi-use housings projects and facilities; (5) other public utilities (including telecommunications); (6) business incubator loan and other business programs; and (7) transportation systems. More emphasis will be placed on those items which increase the tax base, eliminate blight, and the meet the City’s economic and redevelopment goals. III. COSTS ELIGIBLE FOR TAX INCREMENT FINANCING: Project costs qualifying for Tax Increment Financing assistance, as defined under the TIF Act, include utilities design, architectural and engineering fees directly attributable to site work, site related permits, earthwork/excavation, soils correction, landscaping, utilities (sanitary sewer, storm sewer, and water), streets and roads, street/parking lot paving, street/parking lot lights, curb and gutter, sidewalks, land acquisition, special assessment, legal (relating to acquisition, financing, and closing fees), soils tests and environmental studies, surveys, park dedication fee, SAC, WAC, charges, titles insurance and TIF application deposit. IV. DETERMINATION OF AMOUNT OF ASSISTANCE TO APPLICANT: Within TIF Districts The amount of Tax Increment Financing provided to an applicant will be based, in part, on the analysis of information provided on the application for Tax Increment Financing assistance (Attachment “A”), amount of increment generated by the project as evaluated by the City’s Financial and/or Bond Counsel and the City’s economic and redevelopment goals. The level of assistance provided will be evaluated on a case by case basis and may reflect an increase or decrease in assistance dependent upon the level of increase in the tax base, amount of elimination of blight and/or a number of variables that may substantiate the need for assistance. An adjustment in the amount of assistance that can be provided is at the sole discretion of the Board of the Economic Development Authority as long as the requested uses are legal under the Minnesota State Statutes for the use of tax increment financing. Within the Development District (herein referred to as the “City” limits) but outside of TIF Districts The evaluation of Tax Increment Financing assistance that could be provided to an applicant will be based on (A) the analysis of information provided on the application for Tax Increment Finance assistance (Attachment “A”), (B) square footage cost of the project, (C) balance available in the Economic Development Authority excess tax increment fund and (D) proof of need for assistance under the “but for” test for use of tax increment financing. See Attachment D for a sample “but for” analysis. 4 V. TYPES OF ASSISTANCE: Within TIF Districts Tax Increment Financing can be provided in either “pay as you go” or “up front” payments. “Pay as you go” is wherein the Mounds View Economic Development Authority compensates the applicant an amount equal to a predetermined percentage of the actual increment produced by the project for a predetermined number of years. The applicant pays for the (re)development up front and then annual payments are issued to the applicant based on the need for assistance and increment generated from the project. “Up front” payments is wherein the Mounds View Economic Development Authority must issue revenue or general obligation bonds to pay for the (re)development prior to the completion of the project. The increment from the project is then used for repayment of the bonds. The Mounds View Economic Development Authority gives preference to the use of “pay as you go” assistance to finance private development projects due to the reduced risk to the community. The EDA will consider “up front” payment projects that would benefit the entire community and are not possible to be funded under a “pay as you go” basis. Within the City but outside of TIF Districts Financing from the dedicated tax increment fund can be provided in annual installments to the applicant based on the positive cash flow balance in the Economic Development Authority’s dedicated tax increment fund and need for assistance based on analysis of the “but for” test for the project. The dedicated tax increment fund includes a value based on the use and is adjusted along with the budget process and goals and objectives for economic and redevelopment on an annual basis. VI. ESTABLISHING A TAX INCREMENT FINANCE DISTRICT: New tax increment finance districts in the City of Mounds View will be established in accordance with applicable Minnesota State Statutes, the Tax Increment Finance Plan, and the Development District Plan. VII. ADMINISTRATION, POOLED FUNDS & PARCEL DECERTIFICATION: Administration Tax Increment Finance districts will be administered in accordance with applicable Minnesota State Statutes, the Tax Increment Finance Plan, and the Development District Plan. Pooled Funds Pooled funds are available when the current years increment exceeds existing obligations. In the past, funds have been allocated for low interest improvement loans, housing replacement, and Highway 10 redevelopment. The Mounds View Economic Development Authority will address the future use of pooled funds in the following manner: (1) view tax increment as a means secondary to programmatic objectives; (2) allocate all available pooled increment; and (3) the Economic Development Commission and Economic Development Authority decides on future development needs and uses TIF and/or other means to accomplish those ends. (4) in the event that the Economic Development Authority determines pooled increment should be returned to the respective taxing jurisdictions, the Economic Development Commission will evaluate the potential action and make a recommendation to the Economic Development Authority. To more effectively utilize pooled increment, the Economic Development Commission will recomm end funding priorities to the Economic Development Authority. This will be done in conjunction with the annual budgetary process. At this time, potential parcels for decertification will also be examined Requests made for the use of pooled funds by a business or developer outside established TIF districts are discussed in sections IV and V. Parcel Decertification Parcels in Mounds View’s Tax Increment Finance districts will be decertified as required by and in accordance with applicable Minnesota State Statutes, the Development District Plan, and the TIF Plans as 5 amended. In the event that the Economic Development Authority desires to return pooled increment to the respective taxing jurisdictions, the following guidelines will be observed: (1) reserves should be greater than or equal to next years projected increment; and (2) prior to disbursing pooled funds to the respective taxing jurisdictions, the Economic Development Authority will consider future projects and community needs. (3) in the event that parcels are going to be decertified, the Economic Development Commission will evaluate the potential action and make a recommendation to the Economic Development Authority. VIII. APPLICATION PROCESS: The following delineates the Mounds View Economic Development Authority’s application process for Tax Increment Financing assistance: 1. Applicant submits the completed application (Attachment “A”) and Deposit Agreement (Attachment “B”) along with all application fees. 2. City staff reviews the application and completes the Application Review Worksheet (Attachment “C”). 3. Results of the Worksheet are submitted to the appropriate governing authorities for preliminary approval of the proposal. 4. If preliminary approval is granted, a development agreement, business subsidy agreement, and amendments to the Tax Increment Financing Plan, along with all necessary notices, resolutions and certificates are prepared by City staff and/or consultants. 5. If applicable, notices are published and sent to the county and school board. 6. If necessary, public hearing(s) on the proposed project are held. 7. The Economic Development Authority considers final approval of the proposal. 6 IX. Attachment A: APPLICATION FOR TAX INCREMENT FINANCING A. APPLICANT INFORMATION Name of Corporation/Partnership Address Primary Contact Address Phone Fax Email On a separate sheet, please provide the following:  Brief description of the corporation/partnership’s business, including history, princ ipal product or service, etc… Attach as Exhibit A .  Brief description of the proposed project. Attach as Exhibit B.  List names of officers and shareholders/partners with more than five percent (5%) interest in the corporation/partnership. Attach as Exhibit C.  A but-for analysis. Attach as Exhibit D. Attorney Name Address Phone Fax Email Accountant Name Address Phone Fax Email Contractor Name Address Phone Fax Email Engineer Name Address Phone Fax Email Architect Name Address Phone Fax Email 7 B. PROJECT INFORMATION The project will be: ____Vacant Land Development ____New Construction ____ Expansion ____Commercial Redevelopment: ____New Construction ____ Expansion ____Industrial Redevelopment: ____New Construction ____ Rehabilitation ____Housing: ____New Construction ____ Rehabilitation ____Other The project will be: ___Owner Occupied ____Leased Space If leased space, please attach a list names and addresses of future lessees and indicate the status of commitments or lease agreements. Attach as Exhibit E. Project Address Legal Description Site Plan Attached: ____ Yes ____ No Building Square Footage: Number of Units if Applicable: Amount of Tax Increment Requested: Land $ Public Improvement $ Site Improvement $ Current Real Estate Taxes on Project Site: $ Estimated Real Estate Taxes upon Completion: $ Construction Start Date: Construction Completion Date: If Phased Project: Year % Completed Year % Completed C. PUBLIC PURPOSE It is the policy of the City of Mounds View that the use of Tax Increment Financing should result in a benefit to the public. Please indicate how this project will serve a public purpose. ___Job Creation: Number of existing jobs Number of jobs created by project Average hourly wage of jobs created ___New industrial development which will result in additional private investment in the area. ___The project contributes to the fulfillment of the City’s economic development and redevelopment goals ___Removal of blight. ___Rehabilitation of a high profile or priority site. ___Provision of Low and Moderate Income Housing. ___Other: 8 D. SOURCES & USES SOURCES NAME AMOUNT Bank Loan $ Other Private Funds $ Equity $ Fed Grant/Loan $ State Grant/Loan $ Tax Increment $ ID Bonds $ Other $ TOTAL $ USES AMOUNT Land Acquisition $ Site Development $ Construction $ Machinery & Equipment $ Architectural & Engineering Fees $ Legal Fees $ Interest During Construction $ Debt Service Reserve $ Contingencies $ Other $ TOTAL $ 9 E. ADDITIONAL DOCUMENTATION Applicants will also be required to provide the following documentation. ______A) Written business plan, including a description of the business, ownership/management, date established, products and services, and future plans B) Financial Statements for Past Three Years Profit & Loss Statement Balance Sheet C) Current Financial Statements Profit & Loss Statement to Date Balance Sheet to Date _______D) Two Year Projections F) Personal Financial Statements of all Major Shareholders if “Up Front” Financing is Requested Profit & Loss Current Tax Return _______G) Letter of Commitment from Applicant Pledging to Complete during the proposed project duration H) Letter of Commitment from the Other Sources of Financing, Stating Terms and Conditions of their Participation in Project _ I) Application fee of $5000 _____J) Additional information that will be helpful in evaluating your application Note: All Major shareholders will be required to sign personal guarantees if up front financing of the project is required. The undersigned certifies that all information provided in this application is true and correct to the best of the undersigned’s knowledge. The undersigned authorizes the Mounds View Economic Development Authority to check credit references and verify financial and other information. The undersigned also agrees to provide any additional information as may be requested by the Authority after the filing of this application. Applicant Name Date By Its 10 X. Attachment B: Deposit Agreement Deposit Agreement for Evaluation of Tax Increment Assistance By and Between the Mounds View Economic Development Authority and (The Applicant) This agreement made as of the day of , 2005 by and between the MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY, a body corporate and politic, organized and existing under the laws of the State of Minnesota (the “EDA”) and (“The Applicant”). WITNESSETH: WHEREAS, the EDA has the powers provided in Minnesota Statutes, Sections 469.124 to 469.134 and 469.090 to 469.108 (collectively, the “Act”); and WHEREAS, pursuant to and in furtherance of the objectives of the Act, the EDA has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View and in connection is engaged in carrying out the Mounds View Economic Development Project as detailed in EDA document dated 5/9/94 (the “Project”) within the City; and WHEREAS, the redevelopment and development of property within the Project by private developers are stated objectives of the Project Plan. NOW THEREFORE, in consideration of a mutual covenants made herein and for other good and valuable consideration set forth in the Agreement, the parties agree as follows: Section 1. (The Applicant ) agrees to provide the EDA with a deposit of $5,000 for the EDA’s consultants to investigate the feasibility of providing Tax Increment Financing assistance to (The Applicant) for the redevelopment of the (the “Property”). If the EDA incurs additional expenses directly related to the feasibility of providing Tax Increment Assistance to (The Applicant) beyond the $5,000, prior to the execution of the Developer’s Agreement, the EDA shall notify (The Applicant) in writing and (The Applicant) will be required to deposit additional funds as a condition of the EDA entering into any such Development Agreement. Section 2. If the project is approved and (The Applicant) proceeds with the project, the EDA shall reimburse (The Applicant)’s deposit to the extent permissible under the TIF Act. If (The Applicant) does not proceed with the redevelopment of the Property due to the decision of either the EDA or (The Applicant), the EDA shall reimburse the applicant for the unused portion of the deposit. Section 3. Nothing contained in this agreement shall in any way obligate either party to proceed with the redevelopment of the Property or otherwise enter into a Development Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. 11 MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY BY: Rob Marty ITS PRESIDENT BY: Kurt Ulrich ITS EXECUTIVE DIRECTOR STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of , 2005, by Rob Marty and Kurt Ulrich, the President and Executive Director respectively of the Mounds View Economic Development Authority named in the foregoing instrument. Notary Public 12 (The Applicant) BY: ITS: STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of , 2000, by , the of (The Applicant) named in the foregoing instrument. Notary Public 13 XI. Attachment C: APPLICATION PROPOSAL REVIEW WORKSHEET REDEVELOPMENT DISTRICT 1. Ratio of Private to Public Investment in Project: Points: $ Private investment 4:1 5 $ Public Investment 3:1 4 Ratio of Private to Public Financing 2:1 3 1:1 2 Less than 1:1 1 2. Increase in Real Estate Value: Points: $ Value of Site before redevelopment 1:5+ 5 $ Value of site after redevelopment 1:4 4 $ Ratio of value before:after redevelopment 1:3 3 1:2 2 Less than 1:2 1 3. New Job Creation in the City of MoundsView: Points: Number of net new jobs as a result of the project. 50+ 5 Number of existing/retained jobs divided by 10. 30+ 4 Total 25+ 3 15+ 2 Less than 15 1 4. Ratio of TIF to new jobs created: Points: $ TIF request $15,000 or less 5 Number of new jobs created $20,000 or less 4 $ of TIF per new job created $22,000 or less 3 $25,000 or less 2 Over $25,000 1 5. Wage Level of jobs created: Points: Average hourly wage Over $21/ hour 5 of jobs created: $18 –21 / hour 4 $14-17 / hour 3 $10-13 / hour 2 Under $10 / hour1 6. Project size: Points: The project will result in a net square Over 100,000 5 footage of 80,000+ 4 60,000+ 3 40,000+ 2 40,000 or less 1 14 7. Type of Project: Points: 100% Owner Occupied 5 Mix Owner Occupied & Investment 4 Investment Property 3 8. Use: Points: Industrial 5 Warehouse/Distribution 4 Commercial 3 Housing 3 9. The project will pay annual Points: property taxes in the first fully assessed 120,000+ 5 year of $ 80,000+ 4 60,000+ 3 40,000+ 2 20,000+ 1 Below 20,000 0 10. Likelihood that the project will result in Points: unsubsidized, spin-off development. High 5 Moderate 3 Low 1 11. Bonus Points Bonus Points: The project will be 100% pay-as-you-go TIF. 3 points The project contributes to Highway 10 Redevelopment 3 points Total Points: Overall project analysis: High 50-43 points Moderate 42-34 points Low 33-26 points Not Eligible 25-0 points Sub - Total Points: of a possible 50 points. 15 XII. ATTACHMENT D: SAMPLE BUT-FOR ANALYSIS WITHOUT WITH TAX INCREMENT FINANCING TAX INCREMENT FINANCING SOURCES AND USES SOURCES AND USES SOURCES SOURCES Mortgage 9,600,000 8,667,000 Equity 2,400,000 2,400,00 Tax Increment Financing 0 933,000 TOTAL SOURCES 12,000,000 12,000,000 USES USES Land 1,500,000 1,500,000 Site Work 300,000 300,000 Soil Correction 468,000 468,000 Demolition 100,000 100,000 Relocation 65,000 65,000 Subtotal Land Costs 2,433,000 2,433,000 Construction 6,750,000 6,750,000 Finish Manufacturing 250,000 250,000 Subtotal Construction Costs 7,000,000 7,000,000 Soft Costs 350,000 350,000 Taxes 35,000 35,000 Finance Fees 850,000 850,000 Project Manager 542,000 542,000 Developer Fee 540,000 540,000 Contingency 250,000 250,000 Subtotal Soft Costs 2,567,000 2,567,000 TOTAL USES 12,000,000 12,000,000 Income Statement Income Statement Sq. Ft. Per Sq. Ft. Sq. Ft. Per Sq. Ft. Rent-Space 1 100,000 $8.00 800,000 100,000 $8.00 800,000 Rent-Space 2 25,000 $8.50 212,500 25,000 $8.50 212,500 Rent-Space 3 25,000 $9.00 225,000 25,000 $9.00 225,000 Other 0 $0.00 0 0 $0.00 0 1,237,500 1,237,500 Mortgage 20 Term 1,051,646 20 Term 949,439 9.00% Interest 9.00% Interest 9,600,000 Principal 8,667,000 Principal Net Income 185,854 288,061 Total Return on Equity 7.74% 12.00% N:\DATA\GROUPS\ECONDEV\TIF\Policy.DOC Tax Rebate Finance Policy & Application City of Mounds View, Minnesota Adopted: October 10, 2000 Revised: September 22, 2003 M.V. Tax Rebate Policy 9.22.03 Final 2 Table of Contents I. Policy Purpose 3 II. Difference Between Tax Rebate Financing & TIF 3 III. Objectives of Tax Rebate Financing (TRF) 3 IV. Policies for the Use of TRF 4 V. Project Qualifications 5 VI. Subsidy Agreement & Reporting Requirements 6 VII. Application Process 7 VIII. Tax Rebate Financing Application 9 IX. Exhibits A. Application Fee Agreement 13 B. Application Review Worksheet 16 C. Sample But-For Analysis 18 M.V. Tax Rebate Policy 9.22.03 Final 3 I. POLICY PURPOSE The Mounds View Economic Development Authority, hereafter referred to as the EDA, promotes the development and enhancement of the City of Mounds View’s tax base. The purpose of this policy is to establish the EDA’s position relating to the use of tax rebate financing, otherwise referred to as tax abatement. This policy shall be used as a guide in the processing and review of applications requesting tax rebate assistance. The fundamental purpose of tax rebate financing in Mounds View is to encourage desirable development or redevelopment that would not otherwise occur but for the assistance provided. It is desirable that Tax Increment Financing (TIF) be utilized in lieu of TRF whenever possible and if it can be shown to be beneficial to the City to do so. The Mounds View EDA is granted the power to utilize tax rebate financing by the Minnesota Tax Abatement Act, as amended. The EDA reserves the right to approve or reject projects on a case by case basis, taking into consideration established policies, project criteria, and demand on city services in relation to the potential benefits from the project. Meeting policy criteria does not guarantee the award of a tax rebate to the project. Approval or denial of one project is not intended to set precedent for approval or denial of another project. II. DIFFERENCE BETWEEN TAX REBATE & TIF The primary difference between Tax Rebate Financing (TRF) and Tax Increment Financing (TIF) is the way in which the dollars are awarded to the project. When TIF is awarded to a project by the EDA, the other political subdivisions (the school district and the county) are required to contribute their portion of the increased taxes to the project. Conversely, when tax rebate financing is requested, each political subdivision has the option of granting its portion of the current and/or increased taxes to the project. Depending on the position of the respective taxing jurisdictions, the dollars generated by TRF are generally less than the dollars generated with TIF. III. OBJECTIVES OF TAX REBATE FINANCING As a matter of adopted policy, the EDA will consider using tax rebate financing to assist private development projects to achieve one or more of the following objectives: M.V. Tax Rebate Policy 9.22.03 Final 4  A. To retain local jobs and/or increase the number and diversity of jobs that offer stable employment and/or attractive wages and benefits.  B. To enhance and diversify the City of Mounds View’s economic base and to increase the tax base.  C. To remove blight and/or encourage redevelopment of commercial, industrial , or high priority sites in the city that result in high quality redevelopment and private reinvestment.  D. To facilitate the development process and to achieve development on sites which would not be developed without TRF assistance.  E. To encourage the revitalization and redevelopment of the County Highway 10 Corridor.  F. To encourage additional unsubsidized private development in the area, either directly or indirectly through “spin off” development.  G. To offset increased costs of redevelopment (i.e. contaminated site clean- up, demolition expenses) over and above the costs normally incurred in development.  H. To create housing opportunities.  I. To finance the costs associated with public infrastructure and public facilities.  J. To contribute to the implementation of other public policies, as adopted by the EDA from time to time, such as the promotion of quality architectural design, enhanced recreational opportunities, and decreasing capital and/or operating costs of local government. IV. POLICIES FOR THE USE OF TRF A. Tax rebate assistance will be provided to the developer upon receipt of taxes by the EDA, otherwise referred to as the pay-as-you-go method. Requests for up-front financing will be considered on a case-by-case basis. B. It is the intent of the EDA to provide the minimum tax rebate financing, as well as other incentives, at the shortest term required for the project to proceed. Unless there is an extraordinary financial need by the developer, the fiscal disparities portion of the tax capacity value will not be considered for tax rebate. M.V. Tax Rebate Policy 9.22.03 Final 5 C. Any developer receiving a tax rebate shall provide a minimum of twenty percent (20%) equity investment in the project. Projects utilizing the SBA 504 program will be required to provide a minimum of ten percent (10%) cash equity investment. D. Tax rebate financing will not be used in circumstances where land and/or property price is significantly in excess of fair market value. E. All TRF proposals shall optimize the private development potential of a development site. F. A market demand shall be demonstrated for the proposed project. G. Tax rebate assistance will not be utilized in cases where it would create an unfair and significant competitive financial advantage over other projects in the area. H. Tax rebate assistance shall not be used for projects that would place extraordinary demands on city services or for projects that would generate significant environmental impacts. I. The developer must provide adequate financial guarantees to ensure completion of the project, including, but not limited to: assessment agreements, letters of credit, personal guaranties, and additional documentation as necessary. J. The developer shall adequately demonstrate, to the EDA’s sole satisfaction, an ability to complete the proposed project based on past development experience, general reputation, and credit history, among other factors, including the size and scope of the proposed project. K. For the purposes of underwriting the proposal, the developer shall provide any requested market, financial, environmental, or other data requested by the EDA or its consultants. V. PROJECT QUALIFICATIONS All tax rebate projects considered by the Mounds View EDA must meet each of the following requirements: A. The project shall meet at least two of the objectives set forth in Section III of this document. M.V. Tax Rebate Policy 9.22.03 Final 6 B. The use of tax rebate financing will be limited to:  Industrial development, expansion, redevelopment, or rehabilitation; or  Commercial redevelopment or rehabilitation; or  Office, or research and development facilities; or  Housing and infrastructure; or.  Public infrastructure Not all projects will be located along County Highway 10 or will create housing in the City. C. The developer shall demonstrate that the project is not financially feasible but-for the tax rebate financing provided. D. The project shall comply with all provisions set forth in Minnesota’s Tax Abatement Law, statues 469.1812 to 469.1815, as amended. E. The project must be consistent with the City’s Comprehensive Plan, Land Use Plan, and Zoning Ordinances. VI. SUBSIDY AGREEMENT & REPORTING REQUIREMENTS All developers/businesses receiving a tax rebate, or other assistance equal to or in excess of $25,000 from the Mounds View EDA shall be subject to the provisions and requirements set forth by the City’s Business Subsidy Criteria as adopted, and Minnesota Statute 116J.993 to 116J.995 as summarized below. All developers/businesses receiving tax rebate assistance shall enter into a subsidy agreement with the Mounds View EDA that identifies: the reason for the subsidy, the public purpose served by the subsidy, and the goals for the subsidy, as well as other criteria set forth by Minnesota’s statute 116J.994. The developer/business shall file a report annually for two years after the date the benefit is received or until all goals set forth in the application and business subsidy agreement have been meet, whichever is later. Reports shall be completed using the format drafted by the State of Minnesota and shall be filed with the Mounds View EDA no later than March 1 of each year for the previous calendar year. Businesses fulfilling job creation requirements must file a report to that effect with the city within 30 days of meeting the requirements. The developer/business owner shall maintain and operate its facility at the site where the tax rebate assistance is used for a period of five years after the benefit is received, or the length of the TRF assistance, whichever is shorter. In addition to attaining or exceeding the jobs and wages goals s et forth in the Subsidy Agreement, the borrower shall achieve at least one of the objectives set forth in Section III of this document. M.V. Tax Rebate Policy 9.22.03 Final 7 Developers / Businesses failing to comply with the above provisions will be subject to fines, repayment requirements, termination of the assistance, and be deemed ineligible by the State to receive any loans or grants from public entities for a period of five years. VII. APPLICATION PROCESS FOR TAX REBATE FINANCING A. PRIVATE DEVELOPMENT/REDEVELOPMENT PROJECTS 1. Applicant submits the completed application along with a non-refundable $1,000 application fee. The application fee will be used toward the cost of professional or technical services provided in the evaluation of the application, and legal costs incurred by the City for preparation of legal documents. If the EDA incurs additional expenses directly related to the evaluation of the application, or for professional or legal services beyond the $1,000, the EDA shall notify the applicant in writing and the applicant will be required to deposit additional funds. 2. City staff reviews the application and completes the Application Review Worksheet. 3. Results of the Worksheet are submitted to the appropriate governing authorities for preliminary approval of the proposal. 4. If preliminary approval is granted, all necessary notices, resolutions and certificates are prepared by City staff and/or consultants. 5. If necessary, public hearing(s) on the proposed project are held. 6. The EDA grants final approval or denial of the proposal. B. OTHER POLITICAL SUBDIVISIONS It is recommended that applicants intending to seek tax rebate financing from Ramsey County and/or School District 621 make their applications to those bodies concurrent with their application to the Mounds View EDA. For more information on applying for a tax rebate financing from Ramsey County and/or School District 621, contact: Judy Karon Director, Community and Economic Development Ramsey County 651-266-8006 M.V. Tax Rebate Policy 9.22.03 Final 8 Dr. Jan Witthuhn Superintendent Mounds View School District #621 651-639-6001 C. PUBLIC FACILITY AND INFRASTRUCTURE PROJECTS When tax rebate assistance is being utilized to finance public facility and infrastructure projects, as opposed to those oriented toward private business and development objectives, the following process will be adhered to: 1. The EDA will recommend the preliminary use of tax rebate financing for a particular facility/infrastructure project. A formal application, deposit agreement, and application worksheet will not be required. 2. If preliminary approval is granted, all necessary notices, resolutions and certificates are prepared by city staff and/or consultants. 3. If necessary, public hearing(s) on the proposed project are held. 4. The EDA grants final approval or denial of the proposal. M.V. Tax Rebate Policy 9.22.03 Final 9 VIII. APPLICATION FOR TAX REBATE FINANCING A. APPLICANT INFORMATION Name of Corporation/Partnership Address Primary Contact Address Phone Fax Email On a separate sheet, please provide the following:  Brief description of the corporation/partnership’s business, including history, principal product or service. Attach as Exhibit A.  Brief description of the proposed project. Attach as Exhibit B.  List names of officers and shareholders/partners with more than ten percent (10.0%) interest in the corporation/partnership. Attach as Exhibit C.  A but-for analysis and narrative. Attach as Exhibit D. Attorney Name Address Phone Fax Email Accountant Name Address Phone Fax Email Contractor Name Address Phone Fax Email Engineer Name Address Phone Fax Email Architect Name Address Phone Fax Email M.V. Tax Rebate Policy 9.22.03 Final 10 B. PROJECT INFORMATION 1. The project will be: ____Mixed Use Development ____New Construction ____Rehabilitation/Expansion ____Commercial Development: ____New Construction ____Rehabilitation/Expansion ____Industrial Development: ____New Construction ____Rehabilitation/Expansion ____Housing/Other_____________: ____New Construction ____Rehabilitation/Expansion 2. In addition to the Mounds View EDA, applicant is requesting rebate funds from: __ Ramsey County School District 621 3. The project will be: ___Owner Occupied ____Leased Space  If leased space, please attach a list names and addresses of future lessees and indicate the status of commitments or lease agreements. Attach as Exhibit E. 4. Project Address  Include Legal Description and PID Number. Attach as Exhibit F 5. Site Plan Attached: ____ Yes ____ No 6. Total Rebate Requested: $ over years. City Rebate: Annual $ Total $ County Rebate: Annual $ Total $ ISD 621 Rebate: Annual $ Total $ 7. Current Market Value of Project Site: $ Estimated Market Value upon Completion: $ Current Real Estate Taxes on Project Site: $___________ Estimated Real Estate Taxes upon Completion: $ 8. Construction Start Date: Construction Completion Date: If Phased Project: Year % Completed Year % Completed C. PUBLIC PURPOSE It is the policy of the Mounds View EDA that the use of tax rebate financing should result in a benefit to the public. Please indicate how this project will serve a public purpose. ___Job Creation/Retention: Number of existing jobs Number of jobs created by project Average hourly wage of jobs created ___Industrial development resulting in additional private investment Enhancement and/or diversification of the city’s economic and tax base ___Removal of blight ___Provide housing opportunities ___Rehabilitation of a high profile or priority site ___Other: M.V. Tax Rebate Policy 9.22.03 Final D. SOURCES & USES SOURCES NAME AMOUNT Bank Loan $ Other Private Funds $ Equity $ Fed. Grant/Loan $ State Grant/Loan $ Tax Rebate $ ID Bonds $ Other $ TOTAL $ USES AMOUNT Land Acquisition $ Site Development $ Construction $ Machinery & Equipment $ Architectural & Engineering Fees $ Legal Fees $ Interest During Construction $ Debt Service Reserve $ Contingencies $ Other $ TOTAL $ 11 M.V. Tax Rebate Policy 9.22.03 Final 12 E. ADDITIONAL DOCUMENTATION AND CHECKLIST Applicants will also be required to provide the following documentation. ______ A) Written business plan, including a description of the business, ownership/management, date established, products and services, and future plans _______B) Financial Statements for Past Three Years (if existing business) Profit & Loss Statement Balance Sheet _______C) Current Financial Statements Profit & Loss Statement to Date Balance Sheet to Date _______D) Two Year Financial Projections, inc. Profit & Loss, Balance Sheet, Cash Flow Statement. Please list assumptions, inc. estimated personnel levels and sales growth. _______E) Personal Financial Statements of all Major Shareholders with a 10.0% or greater ownership interest if “Up Front” Financing are Requested _______F) Letter of Commitment from Applicant Pledging to Complete During the Proposed Project Duration _______G) Application fee of $1000 _______H) Itemized Project Construction Statement from contractor for projects over $500,000 _______I) Additional information that will be helpful in evaluating your application Note: All Major shareholders will be required to sign personal guarantees if up front financing of the project is required. The undersigned certifies that all information provided in this application is true and correct to the best of the undersigned’s knowledge. The undersigned authorizes the Mounds View Economic Development Authority to check credit references and verify financial and other information. The undersigned also agrees to provide any additional information as may be requested by the Authority after the filing of this application. Applicant Name Date By Its M.V. Tax Rebate Policy 9.22.03 Final 13 IX. Exhibits Attachment A: Application Fee Agreement Agreement for Evaluation of Tax Rebate Finance Assistance By and Between the Mounds View Economic Development Authority and (The Applicant) This agreement made as of the day of , 200_ by and between the MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY, a body corporate and politic, organized and existing under the laws of the State of Minnesota (the “EDA”) and (The Applicant). WITNESSETH: WHEREAS, the EDA has the powers provided in Minnesota Statutes, Sections 469.1812 to 469.1815, as amended (collectively, the “Act”); and WHEREAS, pursuant to and in furtherance of the objectives of the Act, the EDA has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View NOW THEREFORE, in consideration of a mutual covenants made herein and for other good and valuable consideration set forth in the Agreement, the parties agree as follows: Section 1. (The Applicant ) agrees to provide the EDA with an application fee of $1,000 for the preparation of legal documents and for EDA’s consultant(s) to investigate the feasibility of providing Tax Rebate Financing assistance to (The Applicant) for the redevelopment of the (the “Property”). If the EDA incurs additional expenses directly related to the feasibility of providing Tax Rebate Assistance to (The Applicant), or for professional or legal services beyond the $1,000, prior to the execution of the Developer’s Agreement, the EDA shall notify (The Applicant) in writing and (The Applicant) will be required to pay additional funds as a condition of the EDA entering into any such Development Agreement. Section 2. Regardless whether the project is approved by the EDA or not, the application fee is non-refundable. If (The Applicant) does not proceed with the redevelopment of the Property due to the decision of either the EDA or (The Applicant), the EDA shall reimburse the applicant for the unused portion of the deposit. M.V. Tax Rebate Policy 9.22.03 Final 14 Section 3. Nothing contained in this agreement shall in any way obligate either party to proceed with the redevelopment of the Property or otherwise enter into a Development Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY BY: ______________ ITS PRESIDENT BY: ______________ ITS EXECUTIVE DIRECTOR STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of ______ , 200_, by ___________ and ___________, the President and Executive Director respectively of the Mounds View Economic Development Authority named in the foregoing instrument. Notary Public M.V. Tax Rebate Policy 9.22.03 Final 15 (The Applicant) BY: ITS: STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of ___________ , 200_, by , the of (The Applicant) named in the foregoing instrument. Notary Public M.V. Tax Rebate Policy 9.22.03 Final 16 ATTACHMENT B: APPLICATION REVIEW WORKSHEET 1. The project meets the criteria set forth in Section V of the Tax Rebate Financing policy. (A through D must be checked) a) Meets at least one of the objectives in Section III. b) Conforms with one of the eligible uses defined in Section V. c) Demonstrates need for TAF with the but-for analysis. d) Consistent with all city plans and ordinances. 2. Ratio of Private to Public Investment in Project: Points: $ Private investment 5:1 5 $ Public Investment 4:1 4 Ratio Private : Public Financing 3:1 3 2:1 2 Less than 2:1 1 3. Job Creation in the City of Mounds View: Points: Number of net new jobs as a result of the project ≥25 5 or ≥20 4 Number of retained jobs ≥15 3 ≥10 2 Less than 10 1 4. Ratio of TRF to new jobs created or retained: Points: $ TRF request $ 8,000 or less 5 Number of new jobs created or retained $ 10,000 or less 4 $ TRF per new job created $ 12,000 or less 3 or retained $ 15,000 or less 2 Over $15,000 1 5. Wage Level of jobs created or retained: Points: Average hourly wage Over $21/ hour 5 of jobs created or retained: $18-21 / hour 4 $14-17 / hour 3 $ 9-13 / hour 2 Under $9 / hour 1 6. Project size: Points: The project will result in the construction 25,000 sq. ft+ 5 of net square feet 20,000+ 4 10,000+ 3 5,000+ 2 5,000 or less 1 M.V. Tax Rebate Policy 9.22.03 Final TO BE COMPLETED BY CITY STAFF 17 7. Type of Project: Points: 100% Owner Occupied 5 Mixed Owner Occupied & Investment 4 Investment Property 3 8. Use: Points: Industrial/Commercial 5 Warehouse/Distribution 4 Office /Housing 3 9. The project will pay annual Points: property taxes of $____________ $25,000+ 5 in the first fully assessed year $15,000+ 4 $10,000+ 3 $ 5,000+ 2 Under $ 5,000 1 10. Likelihood that the project will result in Points: unsubsidized, spin-off development. High 5 Moderate 3 Low 1 9. Bonus Points Bonus Points: The project will be 100% pay-as-you-go TRF. 3 points The project contributes to County Hwy 10 Redevelopment 3 points The project results in substantial interior or exterior renovation 3 points The project will enhance the aesthetics of the surrounding area through high quality architectural and/or urban design 3 points Total Points: Overall project analysis: High 45-38 points Moderate 37-29 points Low 28-20 points Not Eligible 19-0 points M.V. Tax Rebate Policy 9.22.03 Final Sub - Total Points: of a possible 45 points. 18 ATTACHMENT C: SAMPLE BUT-FOR ANALYSIS WITH NO WITH TAX REBATE FINANCING TAX REBATE FINANCING SOURCES AND USES SOURCES AND USES SOURCES SOURCES Mortgage 9,600,000 8,667,000 Equity 2,400,000 2,400,000 Tax Rebate Financing 0 933,000 TOTAL SOURCES 12,000,000 12,000,000 USES USES Land 1,500,000 1,500,000 Site Work 300,000 300,000 Soil Correction 468,000 468,000 Demolition 100,000 100,000 Relocation 65,000 65,000 Subtotal Land Costs 2,433,000 2,433,000 Construction 6,750,000 6,750,000 Finish Manufacturing 250,000 250,000 Subtotal Construction Costs 7,000,000 7,000,000 Soft Costs 300,000 300,000 Taxes 300,000 300,000 Finance Fees 700,000 700,000 Project Manager 502,000 502,000 Developer Fee 515,000 515,000 Contingency 250,000 250,000 Subtotal Admin./Soft Costs 2,567,000 2,567,000 TOTAL USES 12,000,000 12,000,000 Income Statement Income Statement Sq. Ft. Per Sq. Ft. Sq. Ft. Per Sq. Ft. Rent-Space 1 100,000 $8.00 800,000 100,000 $8.00 800,000 Rent-Space 2 25,000 $8.50 212,500 25,000 $8.50 212,500 Rent-Space 3 25,000 $9.00 225,000 25,000 $9.00 225,000 Other 0 $0.00 0 0 $0.00 0 1,237,500 1,237,500 Mortgage 20 Term 1,051,646 20 Term 949,439 9.00% Interest 9.00% Interest 9,600,000 Principal 8,667,000 Principal Net Income 185,854 288,061 Total Return on Equity 7.74% 12.00% M.V. Tax Rebate Policy 9.22.03 Final City of Mounds View Economic Development Authority Public Financing Policy & Application (Proposed) Amended: February 2016 Amended: June 12, 2000 Adopted: May 12, 1997 City of Mounds View 2401 County Road 10 Mounds View, MN 55112-1499 763.717.4017 City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 2 of 21 Table of Contents I. Policy Purpose 3 II. Objectives for the Use of Public Financing 3 III. Public Financing Principals 4 IV. Project Qualifications 6 V. Subsidy Agreement & Reporting Requirements 6 VI. Application Process for Public Financing 7 VII. Public Financing Application 8 Applicant Information 8 Project Information 8 Public Purpose 11 Job and Wage Goals 11 Sources & Uses 12 Checklist & Additional Information 13 VIII. Confidentiality Agreement 15 IX. Sample Sources and Uses / But-For Analysis 17 X. Public Financing Application Review Worksheets: Commercial-Industrial Projects 18 Housing Projects 20 City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 3 of 21 I. POLICY PURPOSE: The Mounds View Economic Development Authority, hereafter referred to as the EDA, promotes the development and enhancement of the City of Mounds View’s tax base. The purpose of this policy is to establish the City of Mounds View’s position relating to the use of public financing for private development above and beyond the requirements and limitations set forth by State Law. For the purposes of this policy, public financing may include, but may not limited be to: Tax Increment Financing (TIF), tax abatement, contributions of real or personal property, infrastructure development, a reduction or deferral of any tax or fee, and any grants, loans, or loan guarantees made with City and/or EDA funds. This policy shall be used as a guide in the proces sing and review of applications requesting public financing. The fundamental purpose of providing public financing in Mounds View is to encourage desirable development or redevelopment that would not otherwise occur but-for the assistance provided through the use of such financing. It is the intent of the EDA to provide the minimum amount of public financing at the shortest term required for the project to proceed. Preference is given to projects leveraging funding from other public and private sources. The EDA reserves the right to approve or reject projects on a case by case basis, taking into consideration established policies, project criteria, and demand on City services in relation to the potential benefits from the project. Meeting policy criteria does not guarantee the award of public financing to the project. Approval or denial of one project is not intended to set precedent for approval or denial of another project. II. OBJECTIVES FOR THE USE OF PUBLIC FINANCING As a matter of adopted policy, the E DA will consider public financing to assist private development projects to achieve one or more of the following objectives:  To retain local jobs and /or increase the number and diversity of jobs that offer stable employment and/or livable wages and benefits as defined in the City’s Business Subsidy Policy.  To encourage additional unsubsidized private development in the area, either directly or indirectly through “spin off” development.  To facilitate the development process and to achieve development on sites that would not be developed without public financing assistance.  To remove blight and/or encourage redevelopment of commercial and industrial areas in the city that result in high quality redevelopment and private reinvestment.  To offset increased costs of redevelopment (e.g. contaminated site clean-up, demolition expenses) over and above the costs normally incurred in development.  To create and support a broad range of housing choices in Mounds View. City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 4 of 21  To encourage the revitalization and redevelopment of the County Road 10 Corridor.  To contribute to the implementation of other public policies, as adopted by the city from time to time, such as the promotion of quality urban or architectural design, energy conservation, and decreasing capital and/or operating costs of local government.  To enhance and diversify the City of Mounds View’s economic base and to increase the tax base.  To significantly increase the City of Mounds View’s tax base.  To finance the costs associated with public infrastructure and public facilities. III. PUBLIC FINANCING PRINCIPALS The guidelines and principles set forth in this document pertain to all applications for City public financing regardless of whether they are considered a Business Su bsidy as defined by Statute. The following general assumptions shall serve as a guide for City public financing: A. All viable requests for City public financing assistance shall be reviewed by staff, and, if staff designates so, a third party municipal advisor who will inform the City of its findings and recommendations. B. TIF and abatement will be provided on a pay-as-you-go-basis. Any request for upfront assistance will be evaluated on its own merits and may require security to cover any risks assumed by the City. C. Any developer receiving public financing shall provide a minimum of ten percent (10%) owner cash equity investment in the project. D. Public financing will not be used in circumstances where land and/or property price is in excess of fair market value. Situations of blight and unsightly properties will be considered on a case-by-case basis. E. Developer shall be able to demonstrate a market demand for a proposed project. Public financing shall not be used to support purely speculative projects. F. Public financing will not be utilized in cases where it would create an unfair and significant competitive financial advantage over other projects in the area. G. Public financing shall not be used for projects that would place extraordinary demands on city services or for projects that would gen erate significant environmental impacts. City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 5 of 21 H. The developer must provide adequate financial guarantees to ensure completion of the project, including, but not limited to: minimum assessment agreements, letters of credit, personal guaranties, etc. I. The developer shall adequately demonstrate, to the City’s sole satisfaction, an ability to complete the proposed project based on past development experience, general reputation, and credit history, among other factors, including the size and scope of the proposed project. J. The developer shall proactively attempt to minimize the amount of public financing needed through the pursuit of grants, innovative solutions in structuring the deal, and other funding mechanisms. K. For the purposes of underwriting the proposal, t he developer shall provide any requested market, financial, environmental, or other data requested by the City or its consultants. L. All public financing proposals shall optimize the private development potential of a site. M. Tax Increment Finance districts will be administered in accordance with applicable State Statutes, the Tax Increment Finance Plan, and the Development District Plan. N. When possible, TIF shall be used to finance public improvements associated with the project. The priority for the use of TIF funds is: 1. Public improvements. 2. Site preparation, site improvement, land purchase, and demolition. 3. Legal, administrative, and engineering costs. O. It is the City’s policy to establish the following types of TIF districts: 1. Economic Development Districts  It is desired that the project result in a minimum creation of one full time job per $25,000 of TIF, or  Result in a significant increase in the tax base. 2. Redevelopment Districts  The market value of a redeveloped site shall increase by a minimum of 50% of the current market value. 3. Housing Districts  May be considered on a case-by-case basis. City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 6 of 21 IV. PROJECT QUALIFICATIONS All public financing requests considered by the City of Mounds View must meet each of the following requirements: A. The project shall meet at least one of the objectives set forth in Section II and satisfy all the provisions set forth in Section III of this document. B. The developer shall demonstrate that the project is not financially feasible but-for the use of public financing. C. The project shall comply with all applicable laws. D. The project must be consistent with the City’s Comprehensive Plan, Land Use Plan, and Zoning Ordinances. E. The project shall serve at least two of the following public purposes:  Creation of jobs with livable wages and benefits.  Significantly increase the City’s tax base.  Enhancement or diversification of the city’s economic base.  Industrial development that will spur additional private investment in the area.  Fulfillment of defined City objectives such as those identified in the City’s Comprehensive Plan, among others.  Removal of blight or the rehabilitation of a high profile or priority site.  Enhancement or diversification of the City’s housing stock.  Development that will spur additional private investment in the area. F. The developer will pay all applicable application f ees and pay for the City and EDA’s fiscal costs, including creation of the TIF Plan, if applicable, and legal advisor time as stated in the City’s policies. V. SUBSIDY AGREEMENT & REPORTING REQUIREMENTS All developers/businesses receiving public assistance from the City shall be subject to the provisions and requirements set forth by the City’s Business Subsidy Policy and Minnesota Statutes Sections 116J.993 to 116J.995. A. In granting a business subsidy, the City shall enter into a subsidy agreement with the recipient that provides the following information: wage and job goals (if applicable), commitments to provide necessary reporting data, and recourse for failure to meet goals required by the Statutes. B. The subsidy agreement may be incorporated into a broader development agreement for a project. C. The subsidy agreement will commit the recipient to providing the reporting information required by the Statutes. City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 7 of 21 VI. APPLICATION PROCESS FOR PUBLIC FINANCING A. Application for all public financing requests shall be made using the Public Financing Application provided by the City of Mounds View Economic Development Coordinator, or designee. B. The Public Financing Application shall request information required within the City’s policies, including but not limited to; a detailed description of the project; a preliminary site plan; the amount of business subsidy requested; the public purpose of the project; the number and types of jobs to be created; th e wages and benefits to be paid new employees; a detailed project budget with verifiable funding sources and uses; and a detailed operating pro forma, if applicable. C. The applicant agrees and acknowledges to pay a non -refundable $3,000 Public Financing Application Fee. D. City staff and/or consultants review the application and complete the Commercial- Industrial and/or Housing Worksheets. The Application and Worksheets are primarily designed to score the desirability of the proposed project. Each project will be evaluated on a case-by-case basis to determine the extent to which they meet the city’s desired objectives. E. At the time of acceptance by staff of the Public Financing Application, the applicant shall deposit $10,000 with the City to cover attorney and consultant costs incurred as part of establishing a TIF district or abatement, the TIF plan, drafting and negotiating a development agreement, and conducting any fiscal analysis that may be required to meet the requirements of utilizing any public fina ncing. If additional expenses are incurred beyond the $10,000, prior to the execution of a development agreement, the City shall notify the applicant in writing and the applicant will be required to deposit additional funds upon notice. Any unused portion of the $10,000 deposit may be prorated and returned to the applicant at the city’s discretion. F. Following a review by appropriate City staff/consultants the application shall be referred to the Economic Development Authority for further action. G. Before granting a business subsidy that exceeds $150,000, the City shall provide public notice and hold a hearing on the subsidy. City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 8 of 21 Public Financing Application 1. PROJECT INFORMATION Property Information (please print) Address: __________________________________________________________________________ Parcel Number: _____ - _____ - _________ Parcel Number: _____ - _____ - _________ Parcel Number: _____ - _____ - _________ Parcel Number: _____ - _____ - _________ The project will be: ____ Industrial: ____ New Construction ____ Expansion Redevelopment / Rehab. Office/research facility that conforms to Business Park zoning standards ____ Commercial Redevelopment or Rehabilitation ____ Housing Redevelopment or Rehabilitation ____ Other The project will be: ____Owner Occupied ____Leased Space If Leased Space ____ Percent Occupied 6 months after Certificate of Occupancy Total Amount of Public Financing Requested: $ over years. Current Real Estate Taxes on Project Site: $ Estimated Real Estate Taxes upon Completion: Phase I $ Phase II $ Phase I Construction Start Date________ Construction Completion Date_________ Phase II Construction Start Date________ Construction Completion Date_________ Percent of project complete on December 31, current year. ________________ Brief description of the proposed project: ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 9 of 21 II. CONTACT INFORMATION Public Information Notice Generally, correspondence to and from Staff is considered public information. Specific data related to a financial assistance request is deemed not public: Financial Information, Financial Statements, Net worth Calculations, Business Plans, Income and Expense projections, Balance Sheets, Customer Lists, Income Tax returns. When public financial assistance is received, only the following remains not public: Business Plans, Income and Expense projections, Customer lists, Income tax returns, design, market, and feasibility studies not paid for with public funds. The city does allow an applicant to submit sensitive financial information directly to the City’s financial consultant, for additional security. Property Owner Information (please print)Name: ________________________________________ Personal E-mail address: _______________________________________________________________ Personal Residence Address:______________________ ______________ _______ _______________ Street City State Zip Code Phone : ____________________________________________________________________________ Legal Name of Business: _______________________________________________________________ Business E-mail address:________________________________________________________________ Business Address: _______________________________ ________________ ______ __________ Street City State Zip Code Check One: Proprietor Corporation Partnership Federal ID # State ID # Agent Information (print) Same as Property Owner Different, as below (Check one) Name: _____________________________ E -mail address:___________________________________ Address: _______________________________ ________________ ______ __________ Street City State Zip Code Phone (w): _______________________ (m): _______________________(d): ___________________ Attorney Name Address Phone Fax Email Accountant Name Address Phone Fax Email Contractor Name Address Phone Fax Email City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 10 of 21 Engineer Name Address Phone Fax Email Architect Name Address Phone Fax Email III. SIGNATURE I certify that is defined as a Small Business, For-Profit and is not an Religious, (Business name) Political, Casino, Sports Facility, or Pornographic Enterprise. I further certify that all information provided in this application is true and correct to the best of my knowledge. I authorize the city of Mounds View and its consultants to check credit references and verify financial and other information. I further agree, if approved, to the loan security and guarantees required by the Subsidy policy. I agree to provide any additional information as may be requested by the city. Agreement to Pay Costs of Review It is the policy of the City of Mounds View to require applicants to pay costs incurred by the City in reviewing and acting upon applications, so that these costs are not borne by the taxpayers of the City. These costs include all of the City’s out-of-pocket costs for expenses, including the City’s costs for review of the application by the City’s Financial Consultant and City Attorney, or other consultants, recording fees, and necessary publication costs. The application processing fees cover anticipated costs; costs incurred above the application fee will be invoiced as they are incurred, and payment will be due within thirty (30) days. Application fees are not refundable. If payment is not received as required by this agreement, the City may suspend the application review process and may deny the application for failure to comply with the requirements for processing the application. Payment for costs will be required whether the application is granted or denied. The undersigned has received the City’s policy regarding the payment of costs of review, understands that reimbursement to the City of costs incurred in reviewing the application will be required, agrees to reimburse the City as required in the policy and make payment when billed by the City, and agrees that the application may be denied for failure to reimburse the City for costs as provided in the policy. Note: All Major shareholders will be required to sign personal guarantees and a minimum assessment agreement if up front financing of the project is required. APPLICANT SIGNATURE: TITLE: DATE: City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 11 of 21 IV. PUBLIC PURPOSE It is the policy of the City of Mounds View that the use of Public Financing should result in a benefit to the public. Please indicate how this project will serve a public purpose: ____Creation of jobs with livable wages and benefits. ____Significantly increase the City’s tax base. ____Enhancement or diversification of the city’s economic base. ____Industrial development that will spur additional private investment in the area. ____Fulfillment of defined city objectives such as those identified in the City’s Comprehensive Plan, among others. ____Removal of blight or the rehabilitation of a high profile or priority site. ____Enhancement or diversification of the city’s housing stock. ____Development that will spur additional private investment in the area. V. JOB & WAGE GOALS Hourly Wage (excluding Benefits) A. Existing Jobs Retained B. (New) Full- time Job Creation within 2 years C. (New) Part-time Job Creation within 2 years Total Jobs (A+B+C) Hourly Value of Health Insurance Hourly Value of Non-Health Insurance Benefits $9.00 to $10.99 $ $ $11.00 to $12.99 $ $ $13.00 to $14.99 $ $ $15.00 to $16.99 $ $ $17.00 to $18.99 $ $ $19.00 to $20.99 $ $ $21.00 to $22.99 $ $ $23.00 to $24.99 $ $ $25.00 to $26.99 $ $ $27.00 to $28.99 $ $ $29.00 to $30.99 $ $ $31.00 and higher $ $ City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 12 of 21 VI. SOURCES & USES SOURCES NAME AMOUNT Bank Loan $ Other Private Funds $ Owner Cash Equity $ Fed Grant/Loan $ State Grant/Loan $ EDA Funds $ Tax Abatement $ ID Bonds $ TOTAL $ USES AMOUNT Land Acquisition Relocation $ Demolition $ Site Development $ Construction $ Machinery & Equipment $ Architectural & Engineering Fees $ Legal Fees $ Interest During Construction $ Debt Service Reserve $ Financing Costs $ Soft Costs $ Contingencies $ TOTAL $ *Include term and rate of bank loan and/or other financing City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 13 of 21 ADDITIONAL DOCUMENTATION AND CHECKLIST Please provide one paper and one electronic copy of following: (Incomplete applications will delay the review of an application) _______A) Application fee of $3,000. _______B) Written Narrative: Please give a brief summary of your business, its products or services, the project and how this subsidy will impact your project. The narrative should include a statement demonstrating how the project meets the public purpose in IV (above). _______C) Business Plan. The business plan should include the following: 1. Description of Business 2. Ownership 3. Management 4. Date Established 5. Products/Services 6. Future Plans 7. Market for Business _______ D) Project Proforma1 1. Sources and uses of funds to finance the project, and 2. Operating cash flow assumptions that include: a. Projected revenues, b. Operating expenses, c. Net operating income, and d. Annual debt service and loan payments. _______ E) Financial Statements for previous Two Years and the Current year to date 1 ______ Profit & Loss Statement ______ Balance Sheet _______ F) Financial Projections for Term of incentive, up to 10 Years1 _______ G) Personal Financial Statements of all Major Shareholders, Partners, Guarantors _______ H) Letter of Commitment from Applicant Pledging to Complete During the Proposed Project Duration _______ I) Letter of Commitment from the Other Sources of Financing, Stating Terms and Conditions of their Participation in Project Completion City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 14 of 21 _______ J) Written statement of contact information (Name, Company, Address, Email, Phone, Fax) for project team, including: Attorney, Accountant, Financing Sources (lenders, partners, etc.), Parent Company, Architect K) Construction Plans and Itemized Project Construction Statement L) Attach the following documentation as Exhibits Exhibit A – Corporation/Partnership Description Exhibit B – List of Shareholders/Partners Exhibit C – But-For Analysis Exhibit D – List of Prospective Lessees (if applicable) Exhibit E – Legal Description and PID Number(s) _______M) Site and Construction Plans City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 15 of 21 1 For additional confidentiality, sensitive financial documents, while not-public information, may be submitted directly to the City’s financial consultant by signing the attached confidentiality agreement. The attached Confidentiality Agreement may be signed and included with the application. CONFIDENTIALITY AGREEMENT (Sample Agreement) This agreement is made this ____ day of ____________, 20__, by and between ___________________________, a ___________________ company, hereinafter “Developer,” and Ehlers, Incorporated a Minnesota corporation, hereinafter “Ehlers.” WHEREAS, Developer is _______________ (description of project), hereinafter the “Project,” pursuant to a _______________________ (form of agreement) with __________________________ (public entity), hereinafter the “City,” dated _____________________; and WHEREAS, Ehlers has been hired by the City to investigate certain financial aspects of the Developer and the Project; and WHEREAS, in conjunction with such investigation, Ehlers desires to examine the financial information of Developer relative to Developer and the Project; and WHEREAS, Developer is willing to disclose such information only on the condition that such information be kept confidential. NOW, THEREFORE, in consideration of the terms and mutual covenants contained herein, the parties agree as follows: 1. Developer agrees to make its financial information, development pro forma and projection, budget information, and such other financial information concerning the Project as Ehlers may reasonably request, hereinafter the “Information,” available for inspection by Ehlers, but solely for the purpose set forth above. 2. Ehlers shall accept the Information in strict confidence solely for that purpose and shall make no other use of the information, or disclose it to any other person or party, including the City, without the express written consent of Developer. Notwithstanding the foregoing, Ehlers may use the City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 16 of 21 Information in summary form only to report its findings to the City provided that Ehlers first presents its proposed report to Developer and obtains Developer’s written consent to ensure that no inadvertent disclosures of confidential information or other inaccurate information are contained in such report. 3. Inspection of the Information shall take place in such manner and at such place and time as the parties may agree. The Information shall not be copied, duplicated, abstracted, summarized or recorded, directly or indirectly, by any means whatsoever, without the prior consent of Developer. 4. The Information shall remain the property of Developer, and any Information provided in tangible form shall be returned to Developer upon completion of such inspection. Any copies, duplications, abstracts, summaries or other recordings of the Information made with Developer’s consent shall be returned to Developer upon demand. 5. Ehlers agrees that any breach of the obligation of confidentiality imposed hereby shall constitute irreparable harm to Developer and shall entitle Developer to equitable relief enjoining any further breaches of this Agreement, together and in conjunction with any and all such other remedies as may be available to Developer at law or in equity. IN WITNESS WHEREOF, the parties have hereunto set their hands the day and year first above written. DEVELOPER By______________________________ Its________________________ EHLERS INC. By______________________________ Its________________________ City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 17 of 21 SAMPLE BUT-FOR ANALYSIS WITH NO WITH PUBLIC FINANCING PUBLIC FINANCING SOURCES AND USES SOURCES AND USES SOURCES SOURCES Mortgage 9,600,000 8,900,000 Equity 2,400,000 2,400,000 Public Financing 0 700,000 TOTAL SOURCES 12,000,000 12,000,000 USES USES Land 1,500,000 1,500,000 Site Work 300,000 300,000 Soil Correction 468,000 468,000 Demolition 100,000 100,000 Relocation 65,000 65,000 Subtotal Land Costs 2,433,000 2,433,000 Construction 6,750,000 6,750,000 Finish Manufacturing 250,000 250,000 Subtotal Construction Costs 7,000,000 7,000,000 Soft Costs 350,000 350,000 Taxes 35,000 35,000 Finance Fees 850,000 850,000 Project Manager 542,000 542,000 Developer Fee 540,000 540,000 Contingency 250,000 250,000 Subtotal Soft Costs 2,567,000 2,567,000 TOTAL USES 12,000,000 12,000,000 Income Statement Income Statement Sq. Ft. Per Sq. Ft. Sq. Ft. Per Sq. Ft. Rent-Space 1 100,000 $5.00 500,000 100,000 $8.00 800,000 Rent-Space 2 50,000 $4.50 225,000 25,000 $8.50 212,500 Rent-Space 3 50,000 $4.00 200,000 25,000 $9.00 225,000 Other 0 $0.00 0 0 $0.00 0 925,000 925,000 Mortgage 20 Year Term 792,446 20 Year Term 734,664 5.50% Interest 5.50% Interest 9,600,000 Principal 8,900,000 Principal Net Income 132,554 190,336 Total Return on Equity 5.52% 7.93% City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 18 of 21 PUBLIC FINANCING APPLICATION REVIEW WORKSHEET – COMMERCIAL/INDUSTRIAL PROJECTS 1. The project meets the criteria set forth in Section IV of the City’s Public Financing Policy. a) Meets at least one objective in Section II all provisions in Section III. b) Demonstrates need for TIF with the but-for analysis. c) The project complies with all applicable laws. d) Consistent with all city plans and ordinances. e) Serves at least two public purposes as defined in Section IV (E). f) Developer has paid the application fee. 2. Ratio of Private to All Public Investment in Project: Points: $ Private investment 5:1 5 $ Public Investment 4:1 4 ____________Ratio Private: Public Financing 3:1 3 2:1 2 Less than 2:1 1 3. Job Creation in the City of Mounds View: Points: Number of new jobs as a result of the project. 40+ 5 Number of existing/retained jobs divided by 2. 30+ 4 Total 20+ 3 10+ 2 Less than 10 1 4. Ratio of Public Investment to Job Creation: Points: $ Public Investment $15,000 or less 5 Number of new jobs created/retained $20,000 or less 4 $ Public Investment per new job $22,000 or less 3 $25,000 or less 2 Over $25,000 1 5. Wage Level of new jobs created/retained: Points: Minimum hourly wage Over $21/ hour 5 of jobs created/retained: $18-21 / hour 4 $14-17 / hour 3 $10-13 / hour 2 Under $10 / hour 1 6. Project size: Points: The project will result in the construction 80,000+ 5 of square feet 65,000+ 4 50,000+ 3 35,000+ 25,000+ 2 1 TO BE COMPLETED BY CITY STAFF OR CONSULTANTS Total Points: Overall project analysis: High Moderate Low Not Eligible 45-38 points 37-29 points 28-20 points 19-0 points 7. Market Value/Tax Base Generation: The project will result in a per square foot estimated market value (land and building) of Industrial $80/sf+ $70/sf+ Points: Commercial $110/sf+ 5 $100/sf+ 4 $60/sf+ $90/sf+ 3 $50/sf+ $80/sf+ 2 $40/sf+ $70/sf+ 1 8. Type of Project: 100% Owner Occupied Points: 5 Mix Owner Occupied & Investment 4 Investment Property 3 9. Use: Manufacturing Points: 5 Research & Development 4 Commercial Redevelopment 3 Warehouse/Distribution 2 Housing 1 10. Likelihood that the project will result in Points: unsubsidized, spin-off development. High 5 Moderate 3 Low 1 11. Bonus Points Bonus Points: The project will be 100% Pay-as-you-go TIF. 3 points The project contributes to the goals of the Met-Council. 2 points  Product promotes Industry Clusters, Sensible Land Use, Transportation, OR Workforce Housing  Project utilizes significant energy efficient design &/or materials in construction. Sub - Total Points: of a possible 45 points. City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 20 of 21 PUBLIC FINANCING APPLICATION REVIEW WORKSHEET – HOUSING PROJECTS 1. The project meets the criteria set forth in Section IV of the City’s Public Financing Policy. a) Meets at least one objective in Section II all provisions in Section III. b) Demonstrates need for TIF with the but-for analysis. c) The project complies with all applicable laws. d) Consistent with all city plans and ordinances. e) Serves at least two public purposes as defined in Section IV (E). f) Developer has paid the application fee. 2. Ratio of Private to All Public Investment in Project: Points: Greater than 7:1 10 $ Private investment 6:1 8 $ Public Investment 5:1 6 Ratio Private: Public Financing 4:1 4 3:1 2 Less than 3:1 1 3. Project provides housing that is restricted Points: to persons 55 years and older: 10 4. Market Value/Tax Base Generation: Points: Project will result in an estimated market value per unit $135,000/Unit 5 (land and building) of $125,000/Unit 4 $115,000/Unit 3 $105,000/Unit 2 $ 95,000/Unit 1 5. Project proposes rehabilitation of existing housing, housing stock, and maximizes utilization of existing infrastructure: Points: 10 6. Project proposes a location near existing jobs, transportation, recreation, retail services, social services, and schools: Points: 3 TO BE COMPLETED BY CITY STAFF OR CONSULTANTS City of Mounds View Public Financing Policy & Application Amended February, 2016 (Expected) Page 21 of 21 7. Project includes community/ neighborhood: Points: facility (pool, community center, etc.) Points based on scale of improvement (1-5) Yes 5 8. Type of Housing Project: Points: 100% Owner Occupied 2 Investment Property 1 9. Likelihood that the project will result in Points: unsubsidized, spin-off development. High 5 Moderate 3 Low 1 10. Bonus Points Bonus Points: The project will not be 100% Pay-as-you-go TIF. -5 points The project does not require modification to land use plan. 2 points The project contributes to the goals of the Met-Council. 2 points  Product promotes Sensible Land Use, Livable Communities criteria, Transportation, OR Workforce Housing,  sensible use of energy, and/or project utilizes significant energy efficient design &/or materials in construction. Sub - Total Points: of a possible 50 points. Total Points: Overall project analysis: Rank Points Max eligible High 45-50 points 100% Moderate 37-44 points 85% Low 30-36 points 65% Not Eligible 0-29 points Item #: 6A Meeting Date: January 15, 2016 Type of Business: EDC City of Mounds View Staff Report To: Economic Development Commission From: Brian Beeman, Business Development Coordinator Item Title/Subject: Reports of Staff A. Crossroad Pointe Redevelopment Project Since the last EDC meeting city staff has been waiting for a response from the attorneys regarding the predevelopment agreement. There are three or so clauses in the proposed agreement that The Beard Groupon would like removed . The attorneys are in the process of discussing the agreement. Staff will notify the EDC once an agreement has been reached. B. Business Retention & Expansion (BR&E) Visits Since the December EDC meeting, BR&E visits have been completed with Technical Life Care Medical Company. Technical Life Care: Technical Life Care is a biomedical company that started December 1998. The owner worked for a company that did something similar then decided to go off on his own and started Technical Life Care Medical Company. They have 18 fulltime and four part-time employees. They hired four fulltime and one part- time employee in 2015 and expect to hire two more fulltime employees in 2016. They are the parent company and trying to start a branch in Wisconsin and Michigan. Their suppliers are from all over the country. Ninety percent of their market is currently in Minnesota. Health Clinics are their primary client with hospitals serving as a secondary client. Many of the hospital clients are out-state. They do some federal work as well. EKG machines and external body device/machinery is there specialty. While they have four people in the Brainerd area to Duluth, most of their employees are from a 25 mile radius of Mounds View. Their industry is growing and they plan to stay in Mounds View long-term with plenty of room for expansion unless they can find another building with less office space and more storage. They are also next to several other bio medical companies in Mounds View. They hire biomedical tech employees from some of the technical colleges hiring people already trained and certified so that little to no training is needed. They have had good success in attracting workers from the INDEED job site and they give the city 10 of 10 points for serviceability. Reports of Staff January 15, 2015 Page 2 of 3 Rice Creek Commons (TCAAP) Development Update Construction on the TCAAP site and County Road 10 & H is expected to start in the spring of 2016 with final completion early 2017. MnDOT is currently studying I-35W for the addition of MnPASS Express Lanes between Highway 36 and Lexington Avenue due to 53,000 to 127,000 vehicles (and growing) using I -35W between Roseville and Blaine each day. They believe there is enough room in the middle of the existing road to add one lane in each direction which would provide a long-term benefit to the corridor. Preliminary engineering and environmental review will be completed by mid to late 2016. Funding for the project has not yet been identified; if funding becomes available construction could start as early as 2018. C. Mounds View Project Updates The Mounds View Area Regional Sewer Improvements led by the Metropolitan Council has started on Hillview Rd. The purpose of the work is to rehabilitate an approximately 0.5-mile section of an aging and deteriorating regional sanitary sewer that is located in and serves the City of Mounds View. Starting Monday, January 4, 2016 construction crews will start bringing in equipment and installing erosion controls to perform work on one of the project manholes located on the southeast edge of Colonial Village. This work will include heavy equipment along with potential dust, noise and vibration impacts. At this time, no road closures are anticipated. For road closures additional communication will be provided along with detour maps. In January, work will begin east of Rice Creek Parkway. The existing trail will be used for equipment access to complete the work. For more information, residents are encouraged to call 763.392.4648 or email at info@naipase5.com. D. Snyder Building Staff is in regular contact with the realtor offering ideas and leads. The main issue is the price and lack of parking. The asking price has been reduced from $2.5 mill to somewhere between $1 to $2 mill. The lease is over $14 p/sq. ft. Many businesses like the location but can’t afford the price and/or require more parking spaces. Staff has learned that the original owner was stuck paying the mortgage and is accepting reasonable offers and is open to creative financing. Reports of Staff January 15, 2015 Page 3 of 3 E. County Road 10 Addressing County Road 10 signage has caused much confusion over the years with multiple signs displaying different naming of the road. Sign replacement and updating is the sole responsibility of Ramsey County. The county is aware of the issue; however replacing the signs has proven too costly. Therefore, the sign confusion will remain until the county determines this issue to be a priority and finds proper resources to fund the project. The issue was brought up again at the last Mounds View Business Council meeting. Commissioner Rieland has put Business Development Coordinator Beeman in contact with Prime Advertising & Design, Inc. who solved Biolife’s mapping/addressing issue. Beeman has notified the Mounds View businesses providing them the necessary contact information and description of services. F. Mounds View Business Council Meeting The next meeting will be held March 9, at 7:30 a.m. at the Mounds View Community Center. All meetings are now held quarterly and the Twin Cities North Chamber of Commerce may be merging some of the member cities into the meetings . The speaker for the next meeting is TBD. G. Other Upcoming Events Mark your calendars for the 18th Annual North Metro Home & Garden Show. The event will be held Saturday, February 6, 2016 at 9:00 a.m. to 3:00 p.m. at the Sport Expo Center, Blaine, MN. The event is sponsored by the Cities of Blaine, Fridley, Mounds View, and Columbia Heights. For more information, please go to www.northmetrohomeandgarden.com H. Reports of Commissioners (Agenda Item 7) I. Upcoming EDC Meetings (Agenda Item 8) February 19 at 7:30 a.m. ______________________________ Brian Beeman Business Development Coordinator City of Mounds View Economic Development Commission Oath of Office I, Gary Stevenson, do solemnly swear, to support the Constitution of the United States and of this state, and to discharge faithfully the duties devolving upon me, as a member of the Mounds View Economic Development Commission, to the best of my judgment and ability. Gary Steyenson Date: February 19, 2016 Witness: 17(11 /l Brian Beeman Business Development Coordinator City of Mounds View Economic Development Commission Oath of Office I, Jason Helgemoe, do solemnly swear, to support the Constitution of the United States and of this state, and to discharge faithfully the duties devolving upon me, as a member of the Mounds View Economic Development Commission, to the best of my judgment and ability. (1 in • 1.emoe Date: January 15,2016 Witness: PYLIVte.-____� Brian Beeman Business Development Coordinator City of Mounds View Economic Development Commission Oath of Office I, Jim Freichels, do solemnly swear, to support the Constitution of the United States and of this state, and to discharge faithfully the duties devolving upon me, as a member of the Mounds View Economic Development Commission, to the best of my judgment and ability. urn Freichels Date: January 15, 2016 Witness: Brian Beeman Business Development Coordinator