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IDC Agenda 03-12-1998• AGENDA -SPECIAL MEETING MONTICELLO INDUSTRIAL DEVELOPMENT COMMITTEE Thursday, March 12, 1998 - 7:00 a.m. City Hall MEMBERS: Chair Dick VanAllen, Vice Chair Tom Lindquist, Secretary Tom Ollig, Shelly Johnson, Don Smith, Ken Maus, Kevin Doty, Bill Tapper, Bob Mosford, and Chamber Chair Bob Grabinski. COUNCIL LIAISON CITY STAFF: Mayor Bill Fair. Ollie Koropchak. CALL TO ORDER. 2. CONSIDERATION OF AN UPDATE RELATING TO A COMPREHENSIVE PLAN AMENDMENT FOR THE SOUTH AND WEST CORRIDOR. a) Planning Commission and City Council action. b) Understanding the politicial process for amendment of the comprehenive plan. c) IDC recommendation for amendment to the comp plan relating to the southwest corridor. Planning Commission, Apri17 and City Council, April 13. • 3. CONSIDERATION OF INFORMATION GATHERING FOR THE PURPOSE TO DEFINE AN ACTION PLAN FOR THE IDC. a) Ready-for-Business: Desireable balance, available industrial land, future industrial land and development, cost of doing business, and fundability guidelines for financial assistance. b) Marketing and Targeted-Marketing. 4. OTHER BUSINESS. 5. ADJOURNMENT. FEB-25-98 WED 08;10 AM BONDHUS CORPORATION FAX N0. 6122954440 P, 01 ~~ ~~ • Monday, February 23,1998 1 ~ tS 17~ A ~~ a,.~ ~ A1..~ `1 ~ ~ NO 1- 2 3 4 5. 6 7. B E a b c d e f la lb lc id le If ~ ~ ~~. - I Ie7 o ii o ~ OUTLINE FOR ACTION 1 ~.+~~ a ~~ IIEFIl~TITION ~~. W$O ~'r,•~39 - What is the desireable balance between IDC -compare residential and industrlal t~tz base? other canes What is the balance in Monticello? 'What is the current direction and rate of change How many jobs/what land mass/building value/taa dollar base? What is the desired rate of correction? 'What rate land consumption? Initial size and growth rate of industrial park / parks in acres'per year. WHO TO ASSIST? Available land vs land use. Some possible criteria Investigate land ready for business costs. Number of jobs created per acre of land or payroll dollars generated per acre used Annual average payroll of the jobs created Average tax base created per acre of land used 1/C.f4.. ~. ~ ~ .~~ Set selection criteria s~,~~s~oes FINANCE PACKAGE CONSIDERATIONS T1FF Other city incentive State grants or low interest loans Small Business Administration Loan Low interest Federal loans Who is the Packager and paper pusher? LAND COMPARISON 10/ 20 130/ 40 acre sites Raw land Improvements Streets Sewer Water shed Water Vs existing ~~... INCENTIVES FEB-25-98 WED 08 11 AM BONDHUS CORPORATION FAX N0. 6122954440 P, 02 ~- • 2a Building Permits and innovation of process. 2b Land ~a TAXES l~ ~ Properly Z~ City 2~C., Coanty 2~ State 21~ School 2~ Sewer 3~ Special Assessments 2f Electrical ~ Job training cost support, city/ county/state/ federal- • • Sent by: CITY OF SAVAGE 6128822656; 03/10/98 9:25; J~ #281;Page 2 CITY OF SAVAGE • TAX IriCREMENT P(1LYCY Wtule tax increment financing is an impotrtani and useful tool in attracting and retaining business, it is essential that it is used appropriatelyto accomplish the City's economic development goals and objectives. The fundamental principle which makes tax increment financing viable is that it is designed to encourage development which would not otherwise occur. The Savage Economic Development Authority is responsible for ensuring that the project would not occur "but for" the assistance provided through tax increment financing. The Savage Economic Development Authority wiU consider tax increment financing in cases that serve to accomplish the City's targeted goals for economic development as they tray change over time. These goals include projects that would result in the creation of new jabs that pay wages adequate to support households, encourage the retention and expansion of existing businesses, and support redevelopment of blighted or under utilized parcels. Projects eligible for consideration of tax increment financing assistance include, but are not limited • to, office, officefservice/warehouse, industriaVmanufacturing. office/industriaUcorporate head- quarters, housing and retail when perfoirned in conjunction with the elimination of blight. Project costs qualifying for tax increment financing assistance, as defined under the TIF Act, include utilities design, landscape design, architectural and engineering foes duectly attributableto site work, site related permits, earthwork/excavation, soils correction, landscaping, utilities (sanitary sewer, storm sewer and water), streets and roads, streetsfparkinglet paving, strec~ts/parking lot lights, curb and gutter, sidewalks, land acquisition, special assessments, legal (acquisition, financing and closing fees},soil tests and environmental studies, surveys, park dedicationfee, SAC and WAC charges, title insurance, demolition costs and TIF application deposit or otherwise. permittd by state law. The amount of tax increment financing provided to an applicant will be based on the analysis of the following; A. Fundability guidelines for financial assistance (Attachment "A"). • B. Eligible project costs submitted on the application for tax increment financing assistance (Attachment "B") C. Amount of increment generated by the project as calculated by the City's financial advisor. Sent by: CITY OF SAVAGE 6128822656; 03/10/98 9:26; J~x #281;Page 3 TAX INCREMENT POLICX Page 2 of 3 • The standard uideline for assistance is seventy percent (70%) of the project's annual increment for g a term determined by the number of points accumulated in the fundability guideline. The level of assistance provided will be evaluated on a case by case basis and may reflect an increase or decroase in assistance. Tax increment financing can be provided in two different forms. t7ne .form is "pay as you go" wherein the Savage Economic Developnseat Authority compensates the applicant for a predetermined amount for a predetermined number of years. Annual payments are based on increment generated from the prof ect and issued. to .the applicant altar payment of property taxes by the applicant. The Savage Economic Development Authority will give special consideration to applicants applying for "pay as you go" assistance. ~, ,~ Another form is up front payFnent to the applicant wherein the Savage Economic Development Authority must issue revenue or general obligation bands. The increment generated from the applicant's project is then used for the payment of the bonds. T,~X Il~rCR>=1~%EI`rT Ilti~N .Ilti'C A FIST cF, FP .T~ATION PROCFgS: • The Sava a Economic DevelopmentAuthority will require a deposit in the amount of five thousand g dollars ($5,000) fiom the applicant for the City's consultants to investigate the feasibility of providing tax increment financing assistance to the applicant. If the Econorni,c Development Authority incurs additional expense beyond the $5,000, prior to the execution of the developers agreement, the Economic Development Authority will notify the applicant in writing and the applicant will be required to deposit additional funds. If the project is approved and the applicant proceeds with the project, the Economic Development Authority will reimburse the applicant's deposit to the extent permissible under the TIF Act. If the applicant. does not proceed with fire project, the Economic Development Authority will reimburse the applicant for the unused portion of the deposit. If the project being proposed is not within an existing tax incnme~nt financing district aad the creation of a now district is necessary, the applicant will be required to make a deposit to the Economic Development Authority in the amount often thousand dollars ($10,000). This deposit will be used for the City's consultants to investigate the feasibility of creating a now district. If the • Economic Development Authority incurs additional expense beyond the $ ] 0,000, prior to the execution of the developers agreement, the Economic Development Authority will notify the applicant in writing and the applicant will be required to deposit additional funds. Sent by: CITY OF SAVAGE 6128822656; 03/10/98 9:26; Jg~ #281 ;Page 4 TAX INCREMENT POLICY Page 3 of 3 • c the Economic Develo meat Authority will If a new dtstnct is created and the pro~eet pro cede, P reimburse the appiicanc's deposit to the extent permissible under the TIF Act. If the applicant does not proceed with the project, the ficoaomic Development Authority will reimburse the applicant for the unused portion of the deposit. Applicants requesting tax increment financing assistance within an existing district or in the creation of a new district, will be required to complete and submit the following: 1. Requests for tax increment financing assistance application. 2. Fundability guidelines fora finaneia[ assistance worlcsheec. 3. Appropriate deposit ($5,000 or $10,000). • A. Fiscal Disparities: Within existing tax increment financing districts and any future districts, it will be the City's genezal policy to have the tax increment financing district support the fiscal disparity contribution from within the tax increment rinancing district. B. Loss of Governor®nt Ald: Changes to Minnesota Statutes cnandeae a reduction in the LGA/HACA payments from the state to the City when new tax incrosnent financing districts are formed. Yn the event a new tax increment district is formed, the applicant wiU be required to reitnburso the City for such loss or reduction in state revenues. • BAS/rjl GEN-POLC.830 6. l Sent by: CITY OF SAVAGE LJ • 6128822656; 03/10/98 9:27; ,J~ #281;Page 5 CITY OF SAVAGE ECONOMIC DEVELOPMENT AUTHORITY FUNDABILITY GUIDELINES FOR FINANCIAL ASSISTANCE FOR Name of Applicant • Sent by: CITY OF SAVAGE POINT 6128822656; 03/10/98 9:27; J~ #281 ;Page 6/17 PRIVATE INVESTMENT T.I.F./PUBLIC INVESTMENT TOTAL INVESTMENT RATIO + 1 LESS THAN $3 TO $1 +2 OVER S3 TO $1 +3 OVER $4 TO S 1 +4 OVER $6 TO $ I +5 OVER S8 TO $ I • 1 Sent by: CITY OF SAVAGE • FOI1vT • • 6128822656; 03/10/98 9:27; Jg~ #281;Page 7/17 ±~ f MBFR OF EMPLOYEES +1 > 1 - 15 +2 > 16 - 30 +3 > 31 - 45 +4 > 46 - 75 +S > 75 PLUS CURRENT NUMBER OF EMPLOYEES ESTIMATED NEW EMPLOYEES {WITHIN NEXT 2 YEARS) - TOTAL NUMBER OF CURRENT AND ESTIMATED NEW EMPLOYEES * EMPLOYEES SHOULD BE COMPUTED AS FULL-TIME EQUIVALENT POSITIONS. 2 Sent by: CITY OF SAVAGE 6128822656; • 03/10/98 9:27; ,J~ #281;Page 8/17 POINT ~~ VESTMENT 0 512,500+ + 1 $10,000 - $12,500 + 2 $ 7,500 - $10,000 + 3 $ 5,000 - S 7,500 • + 4 $ 2,500 - $ 5,000 +S $ 0-$2,500 TIF/PUBLIC INVESTMENT $ * CURRENT 1+fUMBER OF EMPLOYEES ~` INVESTMENT PER EMPLOYEE _ S * EMPLOYEES SHOULD BE COMPUTED AS FULL-TIME EQUIVALENT POSITIONS • 3 Sent by: CITY OF SAVAGE r~ U 6128822656; 03/10/98 9:28; ,Jg~ #281;Page 9/17 PgY~~i.,;, F POSITIONS '`TOTAL NO. WEIGHTED pOT~' DOLLAR OF y,~,,jj$ vVEIC*HT1NG F . pr.nvF~~ DOLLAR B~Dd~tT U $ 4 - 14,999 $10,000 $ + l $15,000 - 24,999 $20,000 $ + 2 $25,000 - 29,999 $27,500 $ • + 3 $30,000 -44,999 $37,540 $ + 4 545,000 - 59,999 552,000 $ +5 $80,000 aad over $60,000 $, ''TOTAL $ WEIGHTED AVERAGE _ $ '" EMPLOYEES SHOULD BE COMPUTED AS FULL-TIME EQUIVALENT POSITIONS. THE TOTAL NUMBER ON THIS PAGE SHOULD EQUAL THE TOTAL ON PAGE 2. • 4 Sent by: CITY OF SAVAGE 6128822656; 03/10/98 9:28; ,J~ #281;Page 10/17. r 1 * RFaL FCTATFlPROPI~<RTY TAXES, GENERATED ,_~. POINT y~jj~ PROJECTED T~XFS + 1 BELOW 525,000 + 2 $ 25,000 - $ 49,000 + 3 $ 50,000 - $ 99,000 + 4 S 100,000 - $249,000 + 5 5250,000 AND OVER '` PROJECTED TAX REVENUES SHOULD BE BASED ON THE EXISTING PROPERTY TAX SYSTEM AND RATES PLUS LEC:ISLATIVE FUTURE CI~ANGES IF SUBJECT • 5 Sent by: CITY OF SAVAGE • • POINT Y~LiE +I +2 +z +3 +3 +4 6128822656; 03/10/98 9:28; ,J~ #281;Page 11/17 IY~E n~VFigPMENT RETAIL HOUSING OFFICE OFFICFJSERVICE (50/SO) VALUE ADDED (RETAIL WITH SIGNIFICANT SERVICE COMPONENT) INDUSTRIAL + I COMPANY/CORPORATE HEADQUARTERS -LOCATION OF UPPER MANAGEMENT WHERE STRATEGIC MANAGE- MENT DECISIONS ARE MADE (ADD 1 POINT TO ABOVE VALUE) + 1 .REMOVAL OR REHABILITATION OF SUBSTANDARD STRUCTURES (ADD I POINT TO ABOVE VALUE) TOTAL POINT VALUE 6 Sent by: CITY OF SAVAGE 6128822656; 03/10/98 9:29; ,J~ #281;Page 12/17 POINT Y~~ 'j~PE OE ENHAL[C'FMEN F +1 Building Exterior Above Standard +1 Landscaping Irrigation System +1 Landscaping Above Standard +1 Expansion of Existing Business or Building • Bring Existing Building or Property: +2 -Into conformity with outdoor storage standards +2 - Signage into conformity with standards +2 -Screening into conformity Additional Value Factors +3 Substandard Soil (FilUCompaction needed) Total Point Value 7 Sent by: CITY OF SAVAGE 6128822656; 03/10/98 9:29; ,fg~ #281;Page 13/17 • r1 ~J POINT - 4.0 RETAIL - 3.5 OFFICE/WAREHOUSE SERVICE - 3.0 HI TECH - 2.0 OFFICE 8 Sent by: CITY OF SAVAGE C7 • C~ 6128822656; 03/10/98 9:29; J~ #281;Page 14/17 POINT YALE - 2 UP-FRONT + S PAY AS YOU GO POINT -2 +3 +4 +5 OR ONE-TIME PAYMENT 3 ANNUAL PAYMENTS 4 ANNUAL PAYMENTS 5 ANNUAL PAYMENTS 9 Sent by: CITY OF SAVAGE ~Fa 1 2 3 4 5 6 • 7 8 9 TOTAL THE INFORMATION PROVIDED HEREIN IS TRUE AND ACCURATE TO TI-IE BEST OF MY KNOWLEDGE: • DATE: 6128822656; 03/10/98 9:30; ,Jg[{dx #281;Page 15/17 PUBLIC VERSUS PRIVATE NUMBER OF EMPLOYEES PUBLIC INVESTMENT PER EMPLOYEE PAY LEVEL OF POSITIONS REAL ESTATE/PROPERTY TAXES C3ENERATED SIGNIFICANT IMPACT MULTIPLIER SERVICE IMPACT ENHANCEMENT IMPACT FORM OF T.I.F. ASSISTANCE REQUESTED 10 Sent by: CITY OF SAVAGE 6128822656; 03/10/98 9:30; ,J~ #281;Page 16/17 F.~.ABi~TY IZAT[N E~ PROrFGT~ LoCA_'1'FD WITHIN TIF DrSTRrCTS l_ 2 AND 3 ~~Z /~y~ TF~RM OF t~SSIST~NCE 4 - 10 0 ~~ 11 - l3 3 YEARS • OR -REMAINING LIFE OF TIF DISTRICT, WHICHEVER IS LESS 14 - 16 17-20 21 AND OVER 5 YEARS 7 YEARS " 10 YEARS " 11 Sent by: CITY OF SAVAGE. 6128822656; 03/10/98 9:30; J~ #281;Page 17/17 • FT 1NDAR_.1LITY R A'~~ (1) BUILDING SIZE: *SQUARE FOOT COST OF PROJECT: (LAND & BUILDING) (2) PROJECT COST PER S F, PER S.F. aT.T.QW~NCE 520.00 - $30.00 $3.00 $30.01 - $40.00 $4.00 $40.01 - $50.00 $5.00 OVER $50.01 $6.00 (3) pO~g A['(`.T7M LATED PERCENT OF eSSTSTAN('F 11 - 13 309/0 14 - 16 50% 17 - 20 70% 21 Bt OVER 100% (1) S.F. OF BLDG: $ X (2) S.F. ALLOWANCE $ X (3) OF ASSISTANCE: EQUALS AMOUNT OF ASSISTANCE $ * USE EITHER TOTAL PROTECT COSTS OR BSTIMATED MA.RI{ET • VALUE OF PROJECT. 12 • City of Monticello INDUSTRIAL BUSINESS LEAD SHEET Company Name: Business Address: Phone Number: Contact Person: Date of Inquire: Type of Business: Proposed Project Current Number of Jobs: Annual average wage per hour w/o benefits: Benefits provided: Projected total square footage of building: Sq Ft of Manufacturing: Oi~ice: Proposed exterior construction material: Acreage requested: Is this an expansion? Projected Number of New Jobs: Warehousing/distribution: Relocation and expansion? Relocation? Reason for relocation? Time frame of decision or construction? Special needs or request of company? Follow-u~nlans and completion: