Agenda - Council - 10/14/2008 - Laserfiche WebLink

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CASE #, PUBLIC HEARING TO CONSIDER EXECUTION OF BUSINESS SUBSIDY AGREEMENT WITH TAG MACHINE, INC, By: Sean TVI, Sullivan, Economic Development Coordinator Background: A development agreement with Tag Machine, Inc. has been negotiated with City staff. The project includes the construction of a 11,208 square foot office%warehouse building to be complete by December of 2009. The building will be located on Lot 1, Block 1, Gateway North Industrial Park Plat 2, Anoka County, Minnesota in TIF District No, 2. The company currently has 7 employees and is located in a multi -tenant facility in Ramsey. It is anticipated that the project will create at least 11 new jobs paying a wage of at least.$14.00 per hour in a two-year period after moving to the new facility. The proposed land cost write down subsidy is $142,000 and this subsidy meets the job creation criteria of one job per $25,000 of assistance set forth by the City Council. The proposed project and assistance package has been recommended by the Ramsey Economic Development Authority. The, County Assessor has estimated an assessed taxable market value of approximately $815,000 for the project, It is anticipated that the, project will generate $26,000 dollars annually in taxes and approximately $15,550 annually in tax capacity. The tax increment generated per year will be approximately $10,500 per year toward the TIF District, which would be used to assist the City with its payment for public improvements associated with TIF District No. 2 as well as the land cost write-down. The development agreement for this project is in excess of a 40 -page document. The City has utilized the consistent and standard format except for the dollar amounts specific to the project. Any changes in the land use are passed through to the City Attorney for his review. Given the above, staff has attached the. pertinent pages of the agreement for Council review. As Council is aware, the other sections deal with indemnity, construction documents, prohibitions against assignments, and transfer to the agreements to pay deficiencies. The entire agreement is available at City Council request. Also attached are the pertinent minutes regarding the EDA recommendation at the February 24h EDA Meeting. Funding Source: Tax Increment Financing District No. 2 Council Action: Motion to authorizebusiness subsidy agreement with Tag Machine, Inc.. and - Motion to authorize execution of a development agreement with Tag Machine, Inc., contingent upon review by the City Attorney. Reviewed by: City Administrator CC:10.14.08 —237—