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The request for business assistance has been requested late in the development process by Soderholm and <br />Associates. Soderholm is hoping to pull its building permit in August and commence construction on the 46,000 <br />expansion. Staff does believe that this timing should not prohibit this growing Ramsey business from accessing <br />these business tools to assist the project. A summary of some of the key points of the project is below: <br />Project Costs - $7.45M <br />Owner Equity - $1.4M <br />Bank Loan - 5.76M <br />Public Financing - 250K <br />Project - 46,000 SF expansion, real estate acquisition, machine and equipment purchase, and connection to City <br />sewer and water <br />New Taxable Value - $3.47M <br />New Annual Taxes - $97,000 <br />New City Portion - $18,458 <br />Job Creation - 33 new jobs averaging $40.41/hr <br />The EDA has a number of options it could consider relating to the business assistance request. Alternatives <br />include: <br />1) A combination of tax abatement and the RLF <br />2) Aax abatement only <br />3) RLF only <br />4) Or not providing any financial assistance at all. <br />Once an assistance structure is determined the EDA should also consider the levels of assistance for each <br />assistance type. It should be noted that the available RLF fund balance is $353,000. It should be noted that the <br />seed money for the RLF was provided from past MIF Loans through the State of Minnesota for other projects <br />(Panther Precision, Zero Zone refrigeration, etc.) <br />Staff is supportive of the request by Soderholm and Associates but understands that the City has never used tax <br />abatement in the past and this is uncharted waters for the EDA and City Council. <br />Funding Source: <br />RLF, Tax Abatement <br />Recommendation: <br />Staff recommends the following assistance package: <br />$100,000 in Tax Abatement on new taxes generated (100% from City of Ramsey) <br />$150,000 Loan from the City RLF for a term of 5 years with an interest rate between 3-4% with a term of 5-7 <br />years <br />Outcome/Action: <br />Motion to recommend to City Council (Choose one or amend amounts and terms for one option) <br />1) $100,000 in Tax Abatement (100%) and $150,000 from RLF (3.5%, 6 years) <br />2) $100,000 in Tax Abatement (100%) <br />3) $150,000 in RLF (3.5%, 6 years) <br />4) Not provide any financial assistance at all <br />If a RLF Option is selected, staff will work with CMDC to underwrite the loan and to create the loan documents <br />for City Council consideration <br />