Agenda - Economic Development Authority - 10/14/2010

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MEMO TO: Board of Commissioners.. Champlin EconomicDcvelopment Authority (EDA) .FROM: .Iohn W. Cax EDA 1;xecutive Director DAT)/c July'26, 20,04 RE: Water Access Charge Reductions FULL-SERVICE RESTAURANTS Over thepast several. Yeats, the. City has been actively targetingfull-service restaurants;. During. that time, it has become. apparent that restaurant operations are heavily taxed at the front end for their water usage. According to a local survey; the costfor a typical5,000 square foot restauvant to access City water and regional sewer lines can be $80,000 - $90,000. depending on the number of seats,(Exhibit A). Over the past year; the-EDA Board has indicated a willingness to consider subsidizing water access charges for "the rglrt restaurant." Recently, Moon. Rock Bar & GrilLhas requested. assistance with theirnew operation. Moon-Rock is expected to pay $ 81,650 in fees including. $50,500 iu water fees. Moon Rock's request merits a policy discussion. POLICY DISCUSSION Is the EDA Board interested in assisting restaurants2 Does assistance provide Champlin. with a competitive advantage? Tf yes, what type of assistance is the-EDA willing to offer? Is the EDA Board inteiested.:inreducing wateraccess,fees? Ifyes, what criteria should guide the board's decision as to vrhom and how much? In response to these questions, staffhas some thoughts. First, as to assistance, staff Uelievas this a big picture policy issue that should be guided by the board. If there is an interest in;assisting, the assistance should target those. restaurants the City is interested in athacting. Those most difficult part of this process is clearly defining what those restaurants are. Is it family style" Trendy? Destination-oriented? Non=Franchise? How do we define these? Second, if there is an interest in p#oviding assistance, the assistance should be limited to water. access fees wtiieh are paid to the City. The assistance should reduce :but not eliminate the fees: and should come inYhe form of 0% interest, deferr8d loan. Hence; if the restaurant fails to meet some minimum standards or closes, the loan become due and payable, One consideration would be to.reduce the-cost of water fees to those fees charged a limited service restaurant (sae survey).