Agenda - Economic Development Authority - 02/08/2024

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4. 1. Economic Development Authority(EDA) Meeting Date: 02/08/2024 Primary Strategic Plan Initiative: Promote economic growth and development. Title: Consider Provision of Tax Increment Financing Assistance to Medart, Inc. Purpose/Background: The purpose of this case is to consider the provision of Tax Increment Financing Assistance for Medart, Inc. City Staff has been working with Medart, Inc. since July of 2021 to relocate its facilities from Anoka to the City of Ramsey. Originally, Medart was looking for an existing building but they are now looking at constructing a new building to improve operational efficiencies. City Staff has assisted Medart in its site selection process and they are considering an 11.13 acre site owned by PSD, LLC in Bunker Lake Industrial Park, across the street from Delta ModTech. The initial building size was estimated to be 98,000 square feet, but now it is 105,157 square feet. This site is large enough to accommodate a 42,000 SF expansion when needed and it maximizes the development of the site. Staff has been persistent in its pursuit to recruit Medart and is hopeful the City of Ramsey will be able to provide the needed Tax Increment incentive to bring Medart to our community instead of relocating to another community. Initial tax estimates by Anoka County and a preliminary 550K TIF amount provided by the City have resulted in Medart looking at another site in Wright County. Medart has indicated that the taxes are lower there and the TIF amount being offered by a community in Wright County is much higher than what was proposed initially by the City. Medart has communicated that there is a delta of approximately$110,000 per year and about 1 M total when comparing the preliminary proposal by the City and the Anoka County tax valuation and annual property taxes back on November 2023. Staff has sat down with Anoka County to re-evaluate the project and to see if the proposed valuation could be revisited. Anoka County reviewed a sworn construction statement and has provided a range in market valuation and a reduced tax estimates based on the original project. Staff has put together a summary of the preliminary offer and taxes and what a new proposal could look like. Based on the attached analysis, Staff believes that the city will have the ability to effectively reduce the delta between the Wright County site and the site in Ramsey and to keep the Ramsey site a viable option for Medart. Company History Medart, Inc. operates two separate,yet integrated, operating divisions strategically serving the center part of the United States. Medart Engine represents over 100 manufacturers distributing engines,parts and accessories to the outdoor power equipment, lawn and garden, agriculture, construction, industrial and rental industries. Medart Marine represents over 150 brands distributing boating accessories and parts to marine dealers,repair shops and marinas. Medart started as a single facility business in downtown St. Louis in 1912 as an automotive parts and service specialist. In the 1950's Medart began distributing small engines and parts, and in the 1970's Medart acquired a marine accessories and parts distributor to start that segment of the business. In 1984, and sold the automotive parts distribution business. The corporate headquarters are located in Arnold, Missouri,which is in metropolitan St. Louis. Medart currently has distribution facilities in Arnold; Anoka, Minnesota; Edwardsville, Kansas; Houston, Texas; Olive Branch, Mississippi; and Semmes,Alabama. Medart is considering locations for an expansion of operations in the Midwest. Medart has considered or looked at properties in the following locations: St. Michael,Albertville, Rogers, Maple Grove, Brooklyn Park, Coon Rapids, Blaine, and Ramsey. They have also explored some build-to-suit options in Roberts& Osceola WI, along with a property in Mason City IA. They also have a one-year lease extension available for their Anoka facilities through December 31 st, 2030. Ramsey is a leading candidate for location,but no final decision has been made.