Agenda - Council - 05/14/2019 - Laserfiche WebLink

Home

CC Regular Session 7. 4. Meeting Date: 05/14/2019 By: Sean Sullivan, Community Development Information Title: Adopt Resolution #19-116 Accepting Business Subsidy Request Application and Calling for a Public Hearing; Case of SLP EX, LLC and AMP EX, LLC (Delta Mod Tech) Purpose/Background: PURPOSE Consider multiple actions related to the SLP EX, LLC and AMP EX, LLC (DeltaModTech) project proposal, herein referred to as the Developer. For a detailed outline of future steps, please see the attached schedule. Please note that this case does not award assistance. This case is simply authorization to begin the review process for future consideration. This is also an opportunity for the City Council to outline any questions it would like answered on an official Application. STEP 1 (this case): formally accept a business subsidy application from the Developer and begin the process to establish a new TIF district and consider providing financial incentives. The purpose of this case is not to award any financial incentives to the Developer. However, this case begins the State required public process to allow the City to award financial incentives to the Developer. STEP 2 (future case June 25, 2019): review underwriting of project pro -forma, consider authorization to establish a new TIF district, and consider awarding TIF agreement/ business subsidy agreement (which will include a specific amount of TIF). This process will evaluate the return on invest by the Developer to determine if providing assistance is necessary and if the Developer's return on investment is within industry standards. This underwriting is done by a third party source, Ehlers. The City will also evaluate the the return on public investment of the in regards to jobs, tax base and community impact. 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 (B) within the larger 43-acre parcel, the Developer desires to plat 16.03 acres to construct a 185,000 square foot manufacturing building to lease to Delta Mod Tech. The estimated total cost for the DeltaModTech first building is $16M. BACKGROUND (subsidy request) The Developer has asked the City for public financial incentives related to both items above in relation to the Delta Mod Tech project (A and B). Specifically, the Developer is requesting $1,500,000 in Tax Increment Financing/Assistance to assist with eligible project costs. The Developer is requesting the City provide 9 years of pay -go TIF for the 185,000 square foot building and lot to be leased to Delta Mod Tech. Based on their modeling and project pro -forma, the Developerbelieves financial assistance is needed, in order to make this project work. The Developer has competed and submitted a business subsidy application to staff, including a $10,000 non-refundable fee to establish an project escrow. Staff and Ehlers have preliminarily reviewed the request are