Agenda - Economic Development Authority - 07/09/2015

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This project enhances the City of Ramsey's economic base by securing the operation of a Fortune 500 company's manufacturing facility within Ramsey, Minnesota for the foreseeable future. The Life Fitness facility currently generates significant property taxes (about $150,000 annually) and significant jobs (greatest number of jobs in Ramsey, about 300 FT and about 100 PT. Life Fitness is nearly out of space to grow on their existing site in Ramsey. By completing the currently proposed project, the City of Ramsey will see significant tax base and job growth into the foreseeable future (Expansion #1 and Expansion #2). Additionally, the City would see the removal of a blighted and vacant building located on highly visible intersection. This effort accomplishes the Ramsey EDA's three major goals: job creation (26+ plus jobs over two years), tax base creation ($73,873 total property taxes, Expansion #1 only), and improvement to the quality -of -life within our community (removal of a blighted building). By not completing this project, it would be logical for Life Fitness to consider a new, long-term, location for their manufacturing facility. Additionally, the Health Quest property would likely remain in its current state for the foreseeable future Notification: NA Observations/Alternatives: Attached: Concept Map Business Subsidy/TIF Application (City of Ramsey) TIF Timeline (Ehlers) TIF Information (League of Minnesota Cities) TIF Information (State Statute) TIF Run (Ehlers) Job Creation Fund Application (DEED) Cover Letter (Life Fitness) Business Subsidy Policy Business Subsidy Test Resolution Calling for Public Hearing to Modify Development District 1, and Creation of TIF District 15 Resolution Supporting an Application to MN DEED on Behalf of Life Fitness for the JCF Program Business Subsidy Policy Review: Staff reviewed the proposed Life Fitness project in the context of the City's adopted "Business Subsidy Policy." Based on State Statute and the City's 2009 adopted Business Subsidy Policy, this project is considered a business subsidy. As a result, a public hearing and annual reporting are required by the State. Funding Source: EDA Professional Services Account Life Fitness Application Fee ($7,500 received) Tax Increment Financing (future increment proceeds, pay -go) State of Minnesota DEED (State allocation) Recommendation: STEP 1 (this case): begin process to establish a new TIF district, apply for State funds and begin underwriting project. The purpose of this case is not to "award" any financial incentives to Life Fitness. However, this case begins the State required public process to "allow" the City to award financial incentives to Life Fitness in the future. STEP 2 (future case): review underwriting of project, consider authorization to establish a new TIF district, consider awarding TIF agreement/ business subsidy agreement (which will include a specific amount of TIF), and consider awarding DEED program incentives.