Agenda - Economic Development Authority - 06/08/2017

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PSD LLC has competed and submitted a business subsidy application to staff, including a $10,000 non-refundable fee. Ehlers has formally underwritten PSD's request (underwriting the pro-froma, sources and uses, etc.). Ehlers has also tee'd up the establishment of a new TIF district (#16), and worked with staff to draft a TIF agreement. REMINDER: the PSD LLC request will not meet the job creation requirements outlined in the City's official business subsidy policy, due to the fact this project is a speculative building. Guaranteeing job creation on a speculative building is very challenging. The PSD LLC subsidy request will require an wavier to the City's policy, in order to be approved. A similar exception was provided to Platinum Properties, for their speculative construction building proposal, in 2016. BACKGROUND (TIF) More information on TIF? Please review the March EDA case, or see the following video https ://youtu.be/U9KxGjIHFvc. Notification: Both the School District and County have been notified of this action, as required by Statute. Observations/Alternatives: Project Benefits • Supporting a speculative construction building puts the City of Ramsey in a very competitive position to attract economic development projects. Often times, communities that win economic development projects are the "most -ready -to -go -now." • The proposed building is high -quality and market relevant. It will be one of the nicest industrial buildings in Ramsey. It will be prominent on Highway 10, and will set a positive image, and create a big splash for the City's new business park. • PSD LLC is jump-starting the City's new business park with this project. This is important, as staff commonly receives feedback from prospects interested in the new business park --that don't want to be the first -one -in. There is a fear associated with that perspective, as it is considered to be high -risk. Momentum matters in the development industry. • The proposed funding sources for the subsidy request is a new TIF district. Meaning, this subsidy will not have a direct impact on the general tax levy and Ramsey taxpayers (the existing tax base will remain in place, only the new increment will be used). • The proposed 60,000 sf project will create annual total property tax revenues of $116K. • This project will pay significant development fees, about: $21K Park, $6K trail, $33K Water, $18K Sewer, $25K Storm. • A 60,000 square foot commercial/ industrial building will create jobs, it's simply a matter of time, and how many jobs. Staff estimates, based on past projects in Ramsey, a 60,000 sf building will produce 30-200 jobs, depending on the end user(s). • The City of Ramsey is seeking retail and restaurant users. Common feedback from the development community and prospects is --Ramsey needs to improve their demographics, in order attract these users. Ramsey can do that by increasing both population (rooftops) and increasing trip generation (i.e. destination users). This PSD LLC business park will help generate demographics needed by prospect retail and