Minutes - Council - 11/27/2001 - Laserfiche WebLink

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Case//2: Public Hearing: Approval of Grant Application to the Minnesota Department of Trade and Economic Development Mayor Gamec closed the regular portion of the City Council meeting at 7:39 p.m. in order to conduct a public hearing. Public Hearing Mayor Gamec called the public hearing to order at 7:39 p.m. Presentation Economic Development Consultant Mike Mulrooney stated that the City has recruited Star Exhibits to the City of Ramsey to improve the tax base and create additional jobs in the community. One of the incentives that the City offered for consideration by the company involved a low interest loan through the Minnesota Investment Fund. The purpose of the Minnesota Investment Fund is: to create new and retain the highest quality jobs possible on a State-wide basis with a focus on industrial manufacturing and technology related industries; to increase the local and State tax base and; to improve the economic vitality for all Minnesota citizens. The program provides grants to local units of government who make loans to assist new expanding businesses. All projects must meet minimum criteria for private investment; number of jobs created or retained, and wage thresholds. Loans for land, buildings, equipment and training are eligible. Funds may also be used for infrastructure improvements necessary to support businesses located or intending to locate in Minnesota. Only one grant per state fiscal year can be awarded to a government unit. At least 50 percent of total project costs must be privately financed through owner equity and other lending sources. Most applications selected for funding have at least 70 percent private financing. With the application, the City of Ramsey is seeking a grant in the amount of $250,000. Proceeds from the grant will be used to finance equipment for the company. Other lenders involved in the project will be Associated Bank in the amount of $6,355,000 and Central Minnesota Development Company in the amount of $1,300,000. Proceeds from the loans provided by these lenders will be used to construct the 185,000 square foot corporate headquarters and manufacturing facility. Following the completion of the project, the company will employ 79 people immediately and will be creating at least 27 new full time jobs within the next two years. The average wage rate for the new jobs will be $19.57 plus $1.37 in the form of benefits. As the loan is repaid, the City of Ramsey will be able to retain the first $100,000 of principle plus interest. The loan proceeds can then be used to provide additional capital for the revolving loan fund. He noted that the business will produce $339,000 in tax revenue. Citizen Input Councilmember Hendriksen inquired as for what period of time the business will generate the $339,000. City Council/November 27, 2001 Page 5 of 22