Agenda - Economic Development Authority - 07/08/2021

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Lake Industrial Park. • The proposed funding sources for the subsidy request would be from a newly created TIF District 18. 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 $1,172,133 in Tax Increment Financing will be through a PayGo Note (pay as you go) at 4.5% interest 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 $1,172,133 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 June 30, 2021. • Projected cash on cost return on investment for the Developer is 6.72% which falls within the industry standard of 6.5-7%. the analysis by Ehlers concludes that the $1,172,133 in proposed City assistance does not unduly enrich the company. Funding Source: The Developer has submitted a TIF Application Fee of $5,000 to cover the costs to process the TIF Application. Additional funds will be requested from the Developer to pay for the creation of the TIF District and TIF Plan if the EDA recommends proceeding with the project Recommendation: Staff recommends that the City Council call for a Public Hearing for the Modification to the Development Program for Development District No 1 and the Proposed Establishment of TIF District No. 18: Oppidan Industrial and Staff recommends that the EDA recommend to the City Council to provide a $1,172,133 business subsidy to the Developer in the form of Pay -Go TIF Note. The Planning Commission reviewed the project from a Planning/Zoning perspective. Consensus of the Planning Commission was positive, and recommended moving forward to official Site Plan Review for compliance with the Comprehensive Plan and Zoning Code. Action: Motion to recommend to the City Council: 1 ) To call for a Public Hearing for the Modification to the Development Program for Development District No 1 and the Proposed Establishment of TIF District No. 18: Oppidan Industrial and 2) To provide a $1,172,133 business subsidy to the Developer in the form of Pay -Go TIF Note.