Agenda - Economic Development Authority - 07/13/2017

Home

Economic Development Authority (EDA) Meeting Date: 07/13/2017 Submitted For: Patrick Brama, Administrative Services By: Patrick Brama, Administrative Services Title: PSD LLC Business Park, Building B, Adrenaline Sports Center, Public Financing Agreement 4. 6. Purpose/Background: ***This case will be updated on 07/11/2017. Staff is attempting to respond to an expedited timeline for the developer. Not all information was available at the time this case was published*** PURPOSE Consider support of the attached Resolution #17-07-177 authorizing the execution of a Public Financing Agreement ($250,000 to be paid back to the developer, 3 years Pay -GO). BACKGROUND (Project) Please see attached background document for greater context. Regarding this project specifically, PSD LLC plans to immediately construct a 64,000 square foot industrial building. Adrenaline Sports Center would be the anchor tenant (occupy 90%). PSD LLC is proposing a high -quality, highly functional, and market relevant building; which will include: 24' clear ceilings, and glass facades along Highway 10. The EDA and City Council reviewed this case in July and showed general comfort with accepting an application from PSD LLC and further considering this request. BACKGROUND (Subsidy Request) PSD LLC has asked the City for financial incentives related to this 64,000 square foot speculative building ($250,000). Based on their modeling and project pro -forma, PSD LLC believes this assistance is needed, in order to make this project work. PSD has indicated community sports tenants are very risky, and have very thin margins, thus requiring some assistance from the City. PSD LLC has competed and submitted a business subsidy application to staff, including a $7,500 non-refundable fee. 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 community sports centers create very few high -paying jobs. Guaranteeing job creation on this project 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 (Anchor Tenant, Adrenaline Sports Center) Adrenaline Sports Center began operations in Coon Rapids about eight years ago, under the name Gold Kick Soccer. Four years ago, it was converted to Adrenaline Sports Center. Today, Adrenaline leases 25,000 square feet of space. The primary use of space is soccer training/ practice. Secondary users of the Adrenaline Sports Center include cross -fit and baseball training/ batting practice. Lastly, on occasion, Adrenaline is used for various events. Today, Adrenaline attracts an estimated 4,000-5,000 families to their facility on an annual basis. Moving forward, Adrenaline Sports Center needs to expand. They would like to move to a location that provides 56,000 square feet of space, has room for future expansion, and can be ready by January 01, 2018. Staff began working with Adrenaline in June 2016. Since then, staff was working with several developers interested in developing a site, constructing a building, and leasing back to Adrenaline. After several attempts at getting a developer behind the project, PSD has now indicated a commitment to Adrenaline.