Agenda - Council Work Session - 06/25/2019

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Industrial Park. • The proposed funding sources for the subsidy request would be from a newly created TIF District 17. 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 TIF 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 proposed by Delta ModTech in 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 Ehlers 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 c . Findings satisfying this "But -For" test can be found within the attached Ehlers Memo dated May 3 19 and the TIF 17 Plan. • Projected cash on cost return on investment for the Developer is 8.42% w 1 'ails within the industry standard of 7-9%. The analysis by Ehlers concludes that the $972,000 in posed City assistance does not unduly enrich the company. OP Funding Source: New 9-year TIF District (TIF #17) for the business subsidy and $ V g fee from the Developer for processing the Application. Recommendation: STAFF 5 Staff recommends moving forward with this pro p . - ' • roject and supports the motions outlined in this case. Staff believes this project meets several goals outli in the City's Adopted Strategic Plan and EDA Work Plan. Please see observations section for benefits nsiderations regarding this request. EHLERS Ehlers completed the underwriting oifis project. Please see the attached Ehlers MEMO. In summary, Ehlers' findings support moving forwa approving this request. EDA The EDA reviewed this pct, completed application and analysis by Staff and Ehlers on June 13, 2019. The EDA in favor of moving forward with this project with the $972,000 in TIF Pay -Go -Note Assistance. The EDA determined that this request is consistent with with the City of Ramsey Business Subsidy Policy. The EDA unanimously passed a motion recommending approval the two attached resolutions. Attached to this case are draft EDA minutes. Action: Motion to adopt Resolution # 19-143 Approving establishing Tax Increment Financing District No. 17 and associated TIF financing plan, subject to review by the City Attorney as to legal form. --and-- Motion to adopt Resolution # 19-144 Authorizing Execution of a Tax Increment Financing (TIF) Agreement: Delta ModTech; subject to review by the City Attorney as to legal form.