Loading...
HomeMy WebLinkAbout4. Approval of Minutes: May 03, 2005 OFFICIAL PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY SHAKOPEE,MINNESOTA REGULAR SESSION MAY 3, 2005 Members Present: Chair Menden, Lehman, Schmitt, Helkamp and Joos. Members Absent: None Staff Present: Mark McNeill, City Administrator; Judith S. Cox, City Clerk; R. Michael Leek, Community Development Director; Bruce Loney, Public Works Director/City Engineer; Gregg V oxland, Finance Director; Jim Thomson, City Attorney; Mark Themig, Parks, Recreation and Facilities Director; Dan Hughes, Police Chief and Kris Wilson, Assistant to the City Administrator. I. Roll Call: Chair Menden called the meeting to order at 7:40 p.m. Roll was taken as noted above. II. Approval of the Agenda Helkamp/Joos moved to approve the Agenda. Motion carried 5-0. III. Approval of Consent Business: Items on the Consent Agenda were: Item no. 4: Approval ofthe minutes for April 5, 2005. Item No. 5: Approval of the Bills. Commissioner Lehman removed agenda item no 5 Approval of the Bills from the Consent Agenda. Lehman/Joos moved to approve the Consent Agenda noting the bills had been removed from the Consent Agenda but the minutes from April 5, 2005 are approved. Motion carried 5-0. IV. Approval of Minutes: for April 5, 2005. Action was taken under the Consent Agenda. V. Approval of the Bills: Commissioner Lehman stated he took these bills off the Consent Agenda because in the past he had asked that an explanation be included in the packet explaining what the associated costs were for. This explanation still has not been included, so he was asking again. Commissioner Menden noted he had asked questions to staff regarding the bills if he had a question. Mr. McNeill, City Administrator, asked for more specific direction. Commissioner Lehman wanted to know what the specific costs were related to. Direction was given by Commissioner Menden. Official Proceedings of May 3, 2005 Economic Development Authority Page -2- Lehman/Helkamp moved to approve the Economic Development Authority (EDA) bills in the amount of $1,749.52. Motion carried 5-0. VI. Consideration of Request for Economic Development Assistance with Open Systems: Mr. McNeill noted Open Systems was proposing to construct a 25,000 square foot building in the Dean Lakes Business Park and was requesting Economic Development Assistance (Tax Increment assistance). Mr. McNeill noted this was the first commercial/industrial application the City has received for a business subsidy for this area. Mr. McNeill noted the Economic Development Advisory Committee (EDAC) reviewed this application. Mr. McNeill noted that Open Systems is a current Shakopee business employing 58 people and is currently leasing space in the Valley Green Industrial Park. Mr. McNeill noted Open Systems manufactured software. Mr. McNeill stated the extra costs involved in developing this lot were the reason for the business subsidy (Tax Increment assistance) application. Mr. McNeill noted what some of these extra costs were that would not be incurred for similarly zoned parcels near by. Mr. McNeill noted both Tax Abatement and Tax Increment financing was looked at with Open Systems and it was felt that Tax Increment Financing (TIF) was the best way to go for Open Systems as well as the City. Mr. McNeill noted that TIF was being recommended as the way to go. Mr. McNeill noted TIF was discussed with the City's financial consultant and potentially this could generate $170,478 in seven years of collection. Mr. McNeill noted a policy issue tonight was whether the EDA wanted to go along with a seven year collection period. Mr. McNeill noted by State statute the TIF collection period could be up to nine years. Mr. McNeill stated it was felt that seven years was closer to past practice. Mr. McNeill noted this area needed to be added to the tax increment Project area that was established in 1979. Mr. McNeill noted what area was encompassed in the Project area. Mr. Michael Bertini, Open Systems, Inc. gave some background on the business. He noted Open Systems was looking to buy and not rent. He was looking to keep the company a private business and to continue to grow. He noted why Dean Lakes Business Park was a location he was attracted to. Mark Sims, United Properties Vice President, stated there were about four categories identified where extra ordinary cost would be incurred. These are: 1) street/road improvements (assessments) additional cost of approximately $125,000; 2) grading costs [large amount of soil needs importing $108,000]; 3) landscaping costs [native plantings- Official Proceedings of May 3, 2005 Economic Development Authority Page -3- $10,000] and 4) because of the orientation of the building [the power line easement necessitates the acquisition of more land-$65,000]. Mr. Sims noted this represented about $308,000 more than comparable sights looked at by this applicant. They were looking for help with a portion ofthe cost. This portion was $170,000. Commissioner Lehman noted these same costs bore out the abatement request for Dean Lakes when that project asked for abatement for the whole site. Mr. McNeill noted to Commissioner Lehman that the City knew there would be some extraordinary costs related to the development of the Dean Lakes project; that is why the discussion was held with the City Council to have this area set up for tax abatement or some tax increment assistance for these particular costs. This financial help would be above and beyond the standards. Mr. McNeill noted the City set up this area in a specific manner so the City could recoup these costs. Joos/Lehman offered Resolution No. 2005-3, A Resolution Requesting The City Of Shakopee Hold A Public Hearing to Consider Approving A Tax Increment Financing Plan For Tax Increment Financing District No 13 And A Modified Redevelopment Plan For The Minnesota River Valley Housing And Redevelopment Project No. I, and moved its adoption. Motion carried 5-0. Commissioner Lehman noted he understood this proposal possibly has this company expanding its work force (double) in the future and the company offered above average income wage. Commissioner Lehman was also of the understanding that the business subsidy policy would also adjust the TIF according to market conditions. Mr. McNeill noted this was a job retention business subsidy. This business was already in town and needed new space. Typically, the business subsidy was asked for when a new business was coming to town. It was the intent of Open Systems to retain the jobs there now but to add new jobs but no promises were being made now. Commissioner Lehman wondered if the Economic Development Advisory Commission (EDAC) should be looking at some sort of business retention policy with criteria that needed to be met. Mr. McNeill noted State Law spelled out this type policy. Commissioner Schmitt noted this was the first entry into the business park and getting an initial customer into the business park was important; this employer also bought many people in for training that would utilize many other City businesses. Jeff Jansen, EDA consultant for the City, approached the podium and explained the job retention aspect of the business subsidy. Mr. Jansen noted the business retention program is being talked about at the EDAC. Chair Menden noted there would be more businesses in the Dean Lakes Business Park that probably would be requesting some type of financial assistance. Mr. McNeill noted Official Proceedings of May 3, 2005 Economic Development Authority Page -4- he did not know how many businesses would apply but each business would be looked at on a case-by-case basis to see if they qualified. Commissioner Lehman noted how he thought abatement or TIF affected the City in the long run. He felt abatement or TIF actually was an investment for the City. VII. Appointment of Josh Vogel to the EDAC: Joos/Schmitt moved to appoint Josh Vogel to the Economic Development Advisory Commission (EDAC) for a two year term expiring February 28,2007. Motion carried 5- o. VIII. Other Business: Mr. McNeill introduced Kris Wilson, Assistant to the City Administrator, who would be working on Economic Development one-half time. IX. Adjourn: Schmitt/Helkamp moved to adjourn the meeting. Motion carried 5-O. The meeting was adjourned at 8:13 p.m. Judith S. Cox, EDA Secretary Carole Hedlund Recording Secretary