Agenda - Council - 08/11/2015 - Laserfiche WebLink

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ADVANCE Consulting Group, Inc. Memo To: Patrick Brama From: Mike Mulrooney, Development Consultant CC: Date: July 11, 2015 Re: Life Fitness Expansion I have been requested to respond regarding the eligibility of the request from Life Fitness for financial assistance from the City of Ramsey to help the company accomplish a major business expansion. There are two parts to the proposed business expansion. Phase I involves the construction of an addition to the company's existing building located on Sunwood Drive. The addition is expected to be 48,500 SF in size and will cost in excess of $4,000,000. This proposed expansion would increase the size of the existing Life Fitness building in Ramsey from 280,000 square feet to 328,500 total square feet and maximize lot coverage. The project will result in the creation of 26 new full-time jobs paying a minimum $16.85 per hour (with an additional $7.08 of benefits per hour) over the course of the next two years. The Phase 11 project involves an additional 50,000 + square feet for manufacturing but can only happen with the acquisition of adjacent property that is currently the home of a vacant building formerly occupied by Health Quest. The building has been vacant since 2004 and is expected to remain in this condition until a suitor can be found who is willing to absorb significant acquisition and redevelopment costs. The acquisition and redevelopment costs for this site include 1. Property acquisition estimated to be $450,000; 2. Demolition and site clean-up $85,000, and; 3. Capping of 90 geo-thermal wells $50,000. To offset these costs the company is requesting financial assistance in the form of Tax Increment Financing. It is anticipated that this financing would be performance based and would be distributed to the company using a "pay as you go" formula. Given the nature of the assistance and the profile of the project, the requested assistance is being considered a "business subsidy". 1