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SUPPORTING INDUSTRIAL DEVELOPMENT THROUGH CITY INDUSTRIAL PARKS City of Ramsey June 1998 BACKGROUND In June 1994, the Ramsey City Council was presented a recommendation to authorize staff to begin negotiations to purchase land within the City for industrial development purposes. The recommendation was made after a survey of existing businesses within Ramsey indicated interest in new building construction and/or expansion of existing facilities. Staff recommended that City Council consider acquiring land for sale to the existing businesses and other companies who could then relocate to the City of Ramsey. The parcels which were purchased eventually became known as the City of Ramsey's Business Park 95. The City's interest in owning land for industrial purposes is a method to deal with the primary obstacle to business expansion - site control. By having control over the type of development allowed within city limits, the City can focus on quality development. It has become the norm in many cities to have such parks. An industrial park allows a city to "keep up" in the marketplace as many cities now use an industrial park as a marketing tool to attract development. By having the aforementioned control over a site, the City is able to manage the growth of the development and attract the industries which best suit the City's overall conceptual idea. Not only does an industrial park spur economic development by creating jobs, increasing property values and such, it allows diversification of the property tax dollar such that the tax demand on the residential homestead is not as great. Industrial firms generally exhibit the highest degree of specialization and are the largest exporters in a local economy. As a community's export market grows, its export firms will increase their purchases of goods and services produced locally. An industrial firm's employees will also increase in number and income. Thus, the income in the export sector in turn produces or causes an increase in the demand for local business and other services. The total impact on the local economy is greater than the increase in exports which stimulated the increase in economic activity. This overall effect is often called the economic base multiplier. Ramsey Business Park 95. The first parcel of land pertaining to Business Park 95 was purchased in November 1994, from the Anoka 67 Industrial Partnership. Approximately 36.45 marketable acres were acquired at a purchase price of $225,000. This equates to a price of about $6,200 per acre, excluding the cost of utilities and roadways. On May 19, 1995, an additional 10.8 acres was purchased from S.J. Groves at a cost to the City of $90,000. The price per acre computes to approximately $8,300. The property of Leonard Spohn was purchased on July 14, 1995, at a cost of $200,000. The City paid approximately $5,700 per acre for 34.875 acres. The last parcel, purchased in 1995, was from Donald Greenberg on December 1, 1995. The City paid $20,000 for lots that averaged a little over two acres (2.3). This would compute to about $8,700 per acre. In summary, the City of Ramsey's Business Park consists of 84.5 acres that were purchased at a total cost of $535,000, or $6,300 per acre. The only parcel that remains