Agenda - Economic Development Authority - 07/13/2017

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Notification: Observations/Alternatives: Proiect Benefits • The proposed funding sources for the subsidy request are lx dollars (EDA Fund, ACHRA Fund, or TIF #1). As a result, 100% of new taxes created from this project will have an immediate positive impact on Ramsey tax payers. • The proposed 64,000 sfproject will create estimated annual total property tax revenues of $100K-125K. • This project will pay significant development fees, about: $17K Park, $5K trail, $27K Water, $15K Sewer, $20K Storm. • 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 user will create significant new traffic to Ramsey, and The COR. This is considered a destination user. • The City of Ramsey is seeking to improve our image, brand, and to serve as a regional destination. Staff believes this project can play a positive role in making progress for each said goal. • 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. Proiect Considerations • This project must be underwritten and must meet Ramsey's business subsidy policies. The PSD LLC request must be justified and must meet State Statute. PSD LLC must demonstrate that "but -for" this assistance, they cannot move forward with this project. Staff will be working will Ehlers to underwrite PSD LLC financials/ project pro -forma. The outcome of underwriting this project will determine if, and how much, city subsidy is justified. • The City does not need to take on this project (i.e. provide a business subsidy). The City could wait for the market to naturally develop the new business park. If this project is unsuccessful, it would look unfavorable for the City, and will likely result in opposition from tax payers. • Community sports facilities have a reputation for operating on narrow margins and being risky investments. This should be noted. The positive here is, PSD is taking on the risk for this project. If Adrenaline doesn't succeed, the City still has a nice industrial building, paying taxes, ready for the next user. • By dedicating funding to this project, the City is losing the opportunity to use said funding on other projects. However, but for this subsidy, the project would likely not happen at all. Funding Source: EDA Fund, ACHRA Fund, or TIF #1. If this project moves forward, staff will need to sort out the details on this item. Recommendation: STAFF Ehler's is currently working on completion of their underwriting, MEMO, and recommendation. This section will be updated on 07/11. EHLERS Ehler's is currently working on completion of their underwriting, MEMO, and recommendation. This section will be updated on 07/11.