Agenda - Council - 05/08/2001 - Laserfiche WebLink

Home

t CASE # I PUBLIC HEARING TO CONSIDER EXECUTION OF BUSINESS SUBSIDY AGREEMENT WITH RJM ENTERPRISES OF MN, INC By: James E. Norman, City Administrator and Sean Sullivan, TIF Specialist Background: City Council previously approved a Business Subsidy Agreement and a Development Agreement with Pheoll Fastening Systems in January this year. Pheoll's recent business performance has limited its ability to expand and relocate now as they had previously. planned. Therefore, Pheoll will not be able to begin construction this year and possibly for quite some time. This makes Lot 4, Block 1, Gateway North Industrial Park No. 5 available for other developers and businesses. Recently a development agreement with Sharp and Associates, LLC, as Developer, and RJM Enterprises, as the Business, have been negotiated with City staff. The project includes the construction of a 40,000 square foot office /warehouse building in the summer of 2001, with an expansion of 30,000 square feet soon. The building will be located at the intersection of newly constructed 143 Avenue and Industry Avenue. It is anticipated that the project will create at least 12 new jobs paying a wage of at least. $10 per hour, three quarters of which will be $12 per hour or higher, in a two -year period. The County Assessor has established an original tax capacity for the parcel of approximately $2,713. It is anticipated that the project will be valued at approximately $1.8 million dollars and will generate approximately $59,700 annually in tax capacity, and approximately $38,000 in tax increment per year toward the TIF District, which would be used to assist the City with its payment in bonding for land acquisition and public improvements. The development agreement for this project is in excess of a 40 -page document. The City has utilized the consistent and standard format except for the dollar amounts specific to the project. Any changes in the land use are passed through to the City Attorney for his review. Given the above, staff has attached the pertinent pages of the agreement for Council review. As Council is aware, the other sections deal with indemnity, construction documents, prohibitions against assignments, and transfer to the agreements to pay deficiencies. The entire agreement is available at City Council request. Council Action: Motion to authorize business subsidy agreement with RJM Enterprises of MN, Inc and /or Sharp and Associates, LLC. -and- Motion to authorize execution of a development agreement with RJM Enterprises of MN, Inc. and/or Sharp and Associates, LLC, contingent upon review by the City Attorney. ' Reviewed by: City Administrator TIF Specialist CC:05 /08/01 Copies also distributed to: City Attorney —71—