Minutes - Council - 01/08/2002 - Laserfiche WebLink

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identified in the agreement. When the agreement was executed, Systematic Refrigeration represented that they would create 50 jobs within two years of the completion of the project at an hourly wage rate of at least $10 per hour or more. The company proceeded to construct an 80,000 square foot manufacturing plant in the City. However, due to the economy, the company currently employs 45 people and will be unable to achieve the goal. Zero Zone does not believe that they will achieve the job creation requirement within the timeframe stipulated in the agreement. Therefore, they have asked that the agreement be amended to read that the company will retain 45 jobs in the City during the term stipulated in the agreement. The Minnesota Department of Trade and Economic Development (DTED) provided a grant to the City in the amount of $300,000 to originally assist the Systematic Refrigeration project. DTED Representatives have said that they believe that the acquisition is in the best interest of the City and State and that they will approve the request being made by the company through a "grant adjustment notice." If the requested amendment is approved, the company will retain the current jobs in the City of Ramsey and the State of Minnesota. If the amendment is not approved it is quite likely that Systematic Refi'igeration will cease operations and be liquidated; the jobs will then be lost. Based on his findings, Mr. Mulrooney believed that approval of the amendment is reasonable and will result in the jobs and the company being retained in the City of Ramsey. Zero Zone is acquiring Systematic Refrigeration in order to grow the business over the long te~ and is interested in keeping the operation in the City. Future growth of the business is possible with the level of capital and distribution network that Zero Zone can bring to the table. City Attorney Goodrich reviewed the resolution that was presented for adoption. He explained that the City has a development agreement with Mateski Properties and in addition to the development agreement Mateski Properties has also entered into an agreement for a MN Loan Investment Fund where the City received $300,000 from the State and loaned it to Mateski Properties. The amount owed to the City on that loan is $260,000. The rights and obligations would be assumed by ZZ Acquisition, which would include retaining the 38 jobs and creating the 7 new jobs and making payments on the $300,000 note. In order to do that they would need to amend the TIF agreement as well as the loan agreement. Citizen Input David Elvig, 17201 Tungsten Avenue NW, Ramsey, inquired if there was anything that would render the contract null and void and leave the City vulnerable. City Attorney Goodrich replied no, explaining that the securities would stay in place. Mr. Elvig stated that over the last several years they have lost a few businesses in the City and the concern is that industries have become vulnerable in today's economy and he asked that everyone be aware of that when they are handing out TIF when considering industrial versus commercial. Motion by Councilmember Hendriksen, seconded by Councilmember Zimmerman, to close the public hearing. City Council/January 8, 2002 Page 7 of 27