Agenda - Economic Development Authority - 07/08/2021

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(A) the purchase of 43 acres of land from Hageman Holdings for Oppidan, Inc and further development of Bunker Lake Business Park. The estimated total cost for this step is $4.05M (B) within the larger 43-acre parcel, the Developer desires to develop 3 industrial speculative buildings totaling 405,000 square foot for manufacturing and warehousing. The County Assessor as estimated the following values for the 3 buildings: Building 1 - 8.9M Building 2 - 11.2M Building 3 - 11.5M BACKGROUND (subsidy request) The Developer has asked the City for public financial incentives related to both items above in relation to the project (A and B). Specifically, the Developer originally requested $2.9M in Tax Increment Financing/Assistance to assist with eligible project costs. The Developer is requesting the City provide 9 years of pay-as-you-go (PayGo) TIF for the development of 405,000 square foot buildings and land purchase. Based on their modeling and project pro -forma, the Developer believes financial assistance is needed, in order to make this project work. Based on City and analysis by Ehlers, City Staff has communicated that it is willing to support $1,172,133 in pay-as-you-go TIF assistance to write down the cost of the land acquisition. This has been communicated to the Developer and they wish to move forward with a request of $1,172,133. TIF runs conducted by Ehlers and City Staff support this level of assistance. The Developer has completed and submitted a business subsidy application to staff, including a $5,000 non-refundable fee to establish an project escrow. If the EDA moves this project forward, additional funds will be requested to pay for the Creation of the TIF Plan and TIF District. Staff has reviewed and scored the application. The application scores a 30 out of 35 which is a moderate to high score. The application states that this project will bring approximately 100-150 jobs to Ramsey upon completion of the of construction and opening of the new building. In addition, 50 or more new jobs will be created within 2.5 years of executing the TIF agreement, paying wages of at least $17.45 per hour. In total, this project will likely result in at least 150 new, good paying jobs in Ramsey. The estimated tax assessed value of the completed project is $31.6 Million Dollars and it is expected to generate in excess $1M in total property taxes annually. Attached to this case is the Business Assistance Application and Policy for review. Ehlers has reviewed the updated request and has determined that is satisfies the "But -For" test and has conducted financial analysis determining that $1,172,133 in assistance and the return on investment for the Developer is within industry standards and does not unduly enrich the Developer. Notification: N/A Observations/Alternatives: Project Benefits Summary • 100-150 new jobs for the City of Ramsey. 50 new jobs are anticipated to be created paying a minimum wage of at least $17.45 per hour excluding benefits. • Opportunity for employment for Ramsey Residents. • Payment of required outstanding 2011 and 2017 special assessments for the extension of Bunker Lake Boulevard and City Utilities (Bunker Lake Business Park / Puma Street) attributable to the developed parcel will be made at time of proposed property closing in September 2021. • 42.7 Million Dollar project investment. • $1M in annual property taxes after project is completed. The newly created local tax revenue will be captured by the TIF District 18 for 9 years. When the district is decertified, the City can expect to receive around $400,000 annually in property taxes (including fiscal disparities) from this project. • The proposed 405,000 square foot manufacturing buildings are high -quality and market relevant. This industrial complex will be the largest in Ramsey and be a significant investment for the City's new Bunker