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CASE # l PUBLIC HEARING TO CONSIDER EXECUTION OF BUSINESS SUBSIDY AGREEMENT WITH SOPHIA-RAMSEY, LLC By: Sean M. Sullivan, Economic Development Coordinator Background: Staff has been working with Park Midwest, the real estate agent for Sophia -Ramsey, to help generate development in Ramsey Town Center. Park Midwest has been working with a restaurant tenant to locate in 7900 Sunwood Drive NW, STE 100-400. The agent has been unable to negotiate a lease with the tenant due to the costs associated with the build -out of the space, specifically the Sewer and Water Access Charges (SAC and WAC). Sophia -Ramsey, LLC has asked the City to make an investment into the development by writing down the Sewer and Water Access SAC and WAC associated with the restaurant build -out. The lease, signed with the restaurant user is contingent on Sophia -Ramsey, LLC receiving a business subsidy reducing the SAC and WAC associated with the build -out of the restaurant space. The estimated charges for this property are $209,863. The estimated build out of the project is valued at $450,000 and this will not only increase tax base, it will bring consumer dollars into the community. As part of this agreement, Sophia -Ramsey, LLC commits to the creation of 15 jobs paying at least $17/ hour at the project site. Over 60 jobs will be created by this project in its entirety. The business subsidy being proposed exceeds the City Council guidelines that require one job to be created for each $25,000 increment of assistance provided ($13,991/job for this project). The applicant has completed the City Business Assistance Application and is an eligible project. The EDA has reviewed the structure of the assistance package and made a recommendation to council to accept it. The estimated amount of the proposed assistance package is nearly $100,000 over the previous estimate provided but the EDA budget could support this additional amount. The increase in charges is mainly due to the increase in square footage of the restaurant and a more detailed representation of the proposed project. Staff is looking for authorization to execute a development agreement with Sophia -Ramsey, LLC in an amount not to exceed $209,863 and authorize the Mayor and City Administrator to execute the documents necessary. Funding Source: Ramsey Economic Development Authority Council Action: Motion to authorize business subsidy agreement with Sophia -Ramsey, LLC - and - Motion to authorize execution of a development agreement outlining the terms of the business subsidy and loan agreement with Sophia -Ramsey, LLC, contingent upon final review by the City Attorney for legal conformance.