Agenda - Council - 08/24/2021 - Laserfiche WebLink

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warehousing or other TIF eligible uses. The developer is obligated to bring tenants to the buildings that will satisfy the to goal of 100 new jobs. If this does not occur the assistance is prorated based on actual job creation The estimated total cost for the project is 42.7M. BACKGROUND (subsidy request) The Developer has asked the City for public financial incentives related to both items above in relation to project (A and B). The Developer requested $1,172,000 in Tax Increment Financing/Assistance to assist with eligible project costs. See analysis below outlining Staff/EDA recommendation of $1,172,000. The Developer is requesting the City provide 9 years of pay-as-you-go (PayGo) TIF for the 3 building 405,300 square foot project. Based on their modeling and project pro -forma, the Developer believes financial assistance is needed, in order to make this project work. The Developer has completed and submitted a business subsidy application, including a $10,000 non-refundable fee to establish a project escrow. 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 new jobs to Ramsey upon completion of the construction and opening of the new buildings. Ehlers and staff have reviewed the financial assistance request and have determined that is satisfies the "But -For" test and has conducted financial analysis determining that $1,172,000 in assistance and the return on investment for the Developer is within industry standards and does not unduly enrich the Developer. A copy of the analysis conducted by Ehlers is attached to this case. Notification: Both the the Anoka Hennepin 11 School District and Anoka County have been notified of this action, as required by Statute. The Public Hearing has been properly noticed and a copy of the notice has been attached to this case. Observations/Alternatives: Project Benefits Summary • 100-150 new jobs for the City of Ramsey. At least 100 of the new jobs are anticipated to be created paying a minimum wage of at least $17.50 per hour excluding benefits. • Opportunity for employment for Ramsey and Anoka County 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. (Approximately $441,000) • 42.7 Million Dollar private sector 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. • 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 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 $1,172,000 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 Developer will receive 60% of the TIF generated by the project • The City of Ramsey will retain 40% of the TIF generated to help pay for future improvements such as Bunker Lake Boulevard adjacent to the site and/or other eligible costs. • The City of Ramsey is seeking retail and restaurant users. Common feedback from the development community and prospects is that Ramsey needs to improve it 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 helps improve demographics needed by retail and restaurant users (via new vehicle trip generation and increased daytime populations). Further Analysis