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HomeMy WebLinkAbout4.1. Consideration of Minnesota Investment Fund Application for Shutterfly, Inc.-Res. No. 13-4 � . i. �� General Business SHr1Kt)I'�"F TO: Mayor and City Council Mark McNeill, City Administrator FROM: Samantha DiMaggio,Economic Development Coordinator DATE: 08/07/2013 SUBJECT: Consideration of Minnesota Investment Fund Application for Shutterfly, Tnc. - Res.No. 13-4 (D) Action Sought To hold a Public Hearing, and then adopt Resolution No. 13-4, authorizing the City of Shakopee to apply for a grant from the Minnesota Investment Fund,and to enter into an agreement with the Department of Employment and Economic Development and Shutterfly, Inc. Background The Department of Employment and Economic Developi�ent has tentatively committed to a Minnesota investment Fund(MiF)Forgivable loan of up to$1,000,000 for Shutterfly. The MIF program provides financing to help add new workers and retain high-quality jobs on a statewide basis.The focus is on industrial, manufacturing, and technology-related industries to increase the local and state tax base and improve econo�nic vitality statewide. Funds are awarded to local units of government who provide loans to assist expanding businesses. Cities, counties, townsllips and recognized Indian tribal governments are eligible for this fund. If awarded, DEED will provide a grant to the City of Shakopee. The City will use these funds to issue a forgivable loan to Shutterfly, Inc. All projects must meet minimum criteria for private investment, number of jobs created or retained, and wages paid. Shutterfly will be required to create 258 new full time equivalent positions within the first two(2)years of operation. A minimum wage of$14.50 will be required. At least 50 percent of total project costs must be privately financed through owner equity and other lending sources. Shutterfly will be required to make a minimum investment of$34 �nillion dollars. if Shutterfly does not meet the job,wage and investment goals,they will be asked to repay tlle funds. Recommendation Staff recommends that if the EDA so chooses,they should pass Resolution No. 13.4 authorizing the submittal of the Minnesota Investment Fund application. The EDA should also enter into a Grant Agreement with DEED which allows the issuance of a forgivable loan to Shutterfly, Inc. Budget Impact As these are state funds,there is no direct financial impact on the City as a result of the MIF loan. Relationship to Vision This supports Goal D, "Maintain, improve, or create strong pa►-tnerships with other public or private sector entities." Requested Action Following the Public Hearing, if the EDA concurs, it should,by motion, approve the following Resolution: Resolution No. 13.4,A Resolution authorizing and approving a Minnesota Investment Fund Application, Grant Agreement, and Forgivable Loan in connection with Shutterfly, Inc. Attachments: Resolution 13.4 ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE RESOLUTION NO. 13-4 RESOLUTION REGARDING THE AUTHORIZATION AND APPROVAL FOR A MINNESOTA INVESTMENT FUND APPLICATION, GRANT AGREEMENT AND FORGIVEABLE LOAN IN CONNECTION WITH SHUTTERFLY, INC. DEVELOPMENT WHEREAS,the Economic Development Authority for the City of Shakopee, Minnesota (the "Authority"), desires to assist Shutterfly, Incorporated, a Delaware corporation, to locate a business venture in Shakopee, Minnesota, located within the Dean Lakes subdivision (the "project"); and WHEREAS, in addition to offering and facilitating certain economic development incentives to Shutterfly, Inc, the Authority will act as the legal sponsor for the project contained in the Business and Community Development Application to be submitted on August 8, 2013; and WHEREAS, the President and Executive Director of the Authority are hereby authorized to apply to the Department of Employment and Economic Development for funding of this project on behalf of the Authority; and WHEREAS, the Authority has the legal authority to apply for financial assistance, and has the institutional, managerial, and financial capability to ensure adequate construction, operation,maintenance and replacement of the proposed project for its design life; and WHEREAS, the Authority has not incurred any costs,nor has it entered into any written agreements to purchase property on behalf of the project; and WHEREAS, the Authority has not violated any Federal, State, or local laws pertaining to fraud, bribery, kickbacks, collusion, conflict of interest or other unlawful or corrupt practice relating to this project; and WHEREAS, the City Council of the City of Shakopee, as the designee of the Authority pursuant to Minn. Stat. Section 116J.994, subd. 5(e), has called for a Public Hearing to consider application for a Minnesota Investment Fund application, and grant agreement, and forgivable loan, all in connection with the Shutterfly, Inc. development; and WHEREAS, upon approval of its application by the State of Minnesota, the Authority may enter into an agreement with the State Department of Employment and Economic Development for the above-referenced project; and WHEREAS, the Authority certifies that it will comply with all applicable laws and regulations as stated in all contract agreements and described on the Compliance Section(S-7)of the State's Business and Community Development Application; and 429163v2 JAE SH155-316 WHEREAS, the City of Shakopee and Kennedy and Graven, Chartered, the City's legal counsel, has obtained credit reports and credit information regarding Shutterfly, Inc., and upon review, has found no adverse findings or concerns regarding, but not limited to, tax liens, judgments, court actions, and filings with state, federal and other regulatory agencies, the failure of Shutterfly, Inc., to disclose any adverse information could result in revocation or other legal action; and WHEREAS, the City Council of the City of Shakopee, as the designee of the Authority pursuant to Minn. Stat. Section 116J.994, subd. 5(e), held a duly noticed public hearing on August 7, 2013, related to the submission of a grant application to the Department of Employment and Economic Development and the business subsidy of approximately $1,000,000 to be granted to Shutterfly, Inc. if the Authority receives the grant, and that all interested parties were given the opportunity to be heard. NOW, THEREFORE, BE IT FURTHER RESOLVED that, as a result of this action, the President and the Executive Director of the Authority are hereby authorized to execute such agreements and amendments thereto, as are necessary to implement the project on behalf of the applicant. Sworn and Executed Under My Hand this 7th day of August, 2013 President Executive Director 429163v2 JAE SH155-316