Agenda - Economic Development Authority - 06/13/2019

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• The proposed 210,000 square foot manufacturing building is high -quality and market relevant. It will be one of the largest industrial buildings in Ramsey and be a significant investment for the City's new Bunker Lake Industrial Park. • The proposed funding sources for the subsidy request would be from a newly created TIF District 17 Meaning, this subsidy will not have a direct impact on the existing general tax levy and Ramsey taxpayers. Also, like any TIF project, the existing tax base remains in place, 100%. • The proposed $972,000 in Tax Increment Financing will be through a PayGo Note (pay as you go) rather than "up -front" financing or bonding. • The City of Ramsey is seeking retail and restaurant users. Common feedback from the development community and prospects is that 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. large employers and destination users). The development of Bunker Lake Industrial Park will help improve demographics needed by retail and restaurant users (via new vehicle trip generation and increased daytime populations). Further Analysis • This business subsidy request has been reviewed and meets Ramsey's business subsidy policy criteria. • The Developer's request for $972,000 is justified and meets State of Minnesota Business Subsidy Statutes. • Staff has contracted with Ehler's to conduct a third party analysis of the project and to evaluate if the project meets the "But For" test and it has been determined that this project meets that criteria. Findings satisfying this "But -For" test can be found within the attached Ehlers Memo dated May 30, 2019 and the TIF 17 Plan. • Projected cash on cost return on investment for the Developer is 8.42% which falls within the industry standard of 7-9%. the analysis by Ehlers concludes that the $972,000 in proposed City assistance does not unduly enrich the company. Funding Source: Funding for the assistance would come from the establishment of a new Economic Development TIF District (TIF District #17). The Developer is responsible for the cost of application review through the establishment of Escrow of $10,000. Recommendation: Staff recommends the following: Adoption of a resolution approving the modification to the Development Program for Development District No. 1, Establishing Tax Increment Financing District No. 17, and approving the the Tax Increment Financing Plan, subject to City Attorney review. and Adoption of a resolution authorizing execution of a Tax Increment Financing (TIF) Agreement awarding a business subsidy of $972,000 and requiring the creation of 15 new jobs with minimum wages of $22.00 per hour, subject to City Attorney review. Action: Motion to Recommend to the City Council: Adoption of a resolution approving the modification to the Development Program for Development District No. 1, Establishing Tax Increment Financing District No. 17, and approving the the Tax Increment Financing Plan, subject to City Attorney review. and Adoption of a resolution authorizing execution of a Tax Increment Financing (TIF) Agreement awarding a business subsidy of $972,000 and requiring the creation of 15 new jobs with minimum wages of $22.00 per hour,