Agenda - Economic Development Authority - 06/13/2019

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Economic Development Authority (EDA) 4. 1. Meeting Date: 06/13/2019 By: Sean Sullivan, Community Development Title: Consider Recommendation to Establish TIF District 17, Adopt TIF Plan and Approve TIF Agreement for Delta Mod Tech; Case of SLP EX, LLC and AMP EX, LLC Purpose/Background: PURPOSE The purpose of this case is to consider multiple actions related to the SLP EX, LLC and AMP EX, LLC (DeltaModTech) project proposal, herein referred to as the Developer. Please note that this case does not award financial assistance as the City Council has that authority. This case is simply to formulate a recommendation to the City Council for action relating to the approval of a business subsidy in the form of Tax Increment Financing (TIF). STEP 1 (this case): Review project benefits and underwriting of project pro -forma by Ehlers (a third party source) and determine if the business subsidy amount is appropriate. This process will evaluate the "But For Test" and the return on investment by the Developer to determine if providing assistance is necessary and appropriate. Additionally, this review process will evaluate the Developer's return on investment and ensure it is within industry standards (not unduly enriching the developer). The City will also evaluate the City's return on public investment in regards to increased jobs, increased tax base and other positive community impacts. The EDA should adopt a motion for recommendation to the City Council on the level of the Business Subsidy to be provided based on analysis of information provided. STEP 2 (this case): Consider Recommendation to City Council for to approve the creation of TIF District # 17. Approval would include: • Approving the Modification to the Development Program for Development District No. 1 • Establishing Tax Increment Financing District No. 17: Delta Mod Tech within Development District No. 1 • Approving the Tax Increment Financing Plan. The TIF plan outlines the, boundary of the district, TIF eligible expenses/costs and tax impacts (tax base and taxing jurisdictions). The TIF Plan outlines how the project follows statutory requirements for creation of the TIF District. STEP 3 (this case): Consider recommendation that the City Council approve a Tax Increment Financing (TIF) Agreement. This would be the formal award of a business subsidy of $972,000. The award would require the creation of 15 new jobs with minimum wages of $22 per hour. The TIF Agreement includes the proposed business subsidy, statutory requirements and a Tax Increment Financing Note. STEP 4 (future City Council Case - June 25, 2019): Council Approval. The City Council is tentatively scheduled to consider approval of this business subsidy on June 25. 2019, based on EDA recommendations. BACKGROUND (project) The project consists of: (A) the purchase of 43 acres of land from Hageman Holdings for the Delta Mod Tech site/expansion and further development of Bunker Lake Business Park. The estimated total cost for this step is $3.6M