Agenda - Council - 11/28/1995 - Laserfiche WebLink

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I I D~VELOPMENT AGREEMENT. AUTOMATED EDM By: Ryan R. Schroeder, City Administrator CASE # I I I I I I I Background: Automated EDM is an automated electrical discharge machining (EDM) job shop. It provides precisi, bn machined components primarily to manufacturers of tooling. It serves the extrusion, pl~astie injection molding, food processing, and metal forming industries. It also provides s ~drvices to producers of assembly components. They employ 13 persons. Automated, owged by Donald Zoubek and Walter Pelto, is proposing to eonsmaet a 11,136 square foot fac~ty in Ramsey at the intersection of Uranium and McKinley Streets across from Carbon ~oducts. A planned second phase will increase the project size to approximately 2~3,000 square feet in the future. In order to facilitate the building with the expansion, the ~:ity is proposing to provide approximately 70,000 square feet of land to the project with ~me site improvements similar to Carbon Products, Detail Tool, and Wendells. As part of the m. ove, Automated is also proposing to acquire $383,000 in new machinery. This meets thegoals of the revolving loan fund. We are, therefore, proposing to make available, parti~pation in this machinery in an amount not to exceed 25% of $250,000 in machinery (mum of $62,500). The development agreement states that the City will provide this contribution as owner's equity. In return, however, we are proposing to place a $70,000 assel~sment (10 years at 8.25%) against the real estate levied October 1996, as part of the land exchange. This allows us to assist the company and at the same time provide securi~ to the City that the debt will be repaid. We believe the gbove is providing the developer about $100,000 in equity to complete this project. The City's cost, however, after investment income (using a 2.25% interest differential) is 459,579. At the minimum increment of $10,488, the project breaks even in 7.15 years at 6%. As in the past, iwe have enclosed pertinent pages to the development agreement for your review as well~:as the proposed site plan. The site plan is on the December Planning commission me~ting agenda. In that the owner needs to start construction immediately, we propose to ali6w excavation and grading prior to final Council approval of the site on December 12, 1~95. The owner is providing securities to cover any liability created by this fast track development. Council ActiOn: Motion to apprOVe the development agreement with Automated EDM. Motion to apprOve initiation of subdivision activities. Reviewed by: City Administrator Finance Officer City Engineer Economic Development Coordinator CC: 11/28/95 /jmt