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CC Work Session 2. 2. <br /> Meeting Date: 03/28/2017 <br /> Information <br /> Title: <br /> Update Case: PSD LLC Business Park Proposal &Business Subsidy Request <br /> Purpose/Background: <br /> PURPOSE <br /> The purpose of this case is to provide the Council with an update RE a request staff recently received from PSD <br /> LLC to purchase and begin developing a large portion of the City's new business park.Normally,this case would <br /> be brought to the EDA first. However, considering the case on worksession agenda tonight, discussing arterial <br /> infrastructure along Bunker/Puma, staff felt it was worth providing the Council an update, for the sake of context. <br /> BACKGROUND <br /> Attached to this case is a proposal letter from PSD LLC. Staff has been working with PSD LLC on a potential <br /> business park project for several months. Recently,PSD LLC has been able to finish up their preliminary site <br /> investigation due-diligence,preliminary project pro-forma,has executed a Letter-of-Intent(LOI)with Hageman <br /> Holdings, and is now ready to proceed forward to the City. In order to make the project"GO," PSD LLC is <br /> requesting City assistance. <br /> PROJECT <br /> PSD LLC is proposing to purchase 45 acres of land from Hageman Holdings for roughly$1.75 per square foot <br /> (roughly $3.4M)for a new business park. PSD LLC plans to get sites "pad ready" in anticipation of future projects <br /> (i.e. mass grading, storm water,utility stubs, etc.). PSD LLC is generally open to the various methods in which <br /> projects may take place (meaning,they are willing to sell land directly to a business, and/or construct projects, <br /> and/or act as landlord). PSD LLC will prefer to own/lease back buildings. <br /> PSD has developed some concept master plans for the business park,which are attached to this case. It should be <br /> noted,these are CONCEPT master plans. It is very likely,what the market actually demands in the future,will be <br /> different than exactly what is shown on these concept master plans. <br /> What is more certain, is PSD LLC's first project,which will kick off the new business park. PSD LLC is proposing <br /> to construct a 60,000 sf spec industrial building along against US Highway 10 in 2017/2018. This proposed building <br /> would be Ramsey's first 24' clear spec industrial project(24'clear buildings are the new industry standard), and will <br /> include high-quality glass infused facades along Highway 10. PSD LLC wants to make a big splash, and turn lots <br /> of heads with their first building--as it will set a precedence for the remaining business park. Please reference that <br /> attached master plan site concepts,page 1, southwest building. <br /> ASSISTANCE REQUEST <br /> As outlined in the attached letter, PSD LLC is requesting two items from the City. <br /> (1) TIF assistance on the first 60,000 sf spec project <br /> This would be a 9-year Economic Development TIF district. It is estimated this district would generate <br /> roughly$277K of PV TIF at 4%discount rate ($349K FV). PSD LLC is requesting this assistance to <br /> compensate for the high vacancy rates they will experience with this spec project for several years, and the <br /> higher costs they will incur to make the first building located against US Highway 10, look very nice (i.e.the <br />