HomeMy WebLinkAbout6.A. Consideration of Minnesota Investment Fund Application for Rosemount Inc. Res. No. 7474 Public Hearings 6. A.
SHAKOPEE
TO: Mayor and City Council
Mark McNeill, City Administrator
FROM: Samantha DiMaggio, Economic Development Coordinator
DATE: 08/19/2014
SUBJECT: Consideration of Minnesota Investment Fund Application for Rosemount, Inc. - Res.
No. 7474 (D)
Action Sought
To hold a Public Hearing, and adopt a resolution authorizing staff to apply for a grant from the
Minnesota Investment Fund, and to enter into agreement with the Department of Employment and
Economic Development and Rosemount, Inc.
Background
On June 18, 2013 the Shakopee City Council held a public hearing and authorized City staff to
apply for a Minnesota Investment Fund(MIF) on behalf of Rosemount, Inc. Rosemount, Inc. was
awarded $500,000 in MIF funds, which were used to purchase machinery and equipment for
Phase 1 of their project.
Minnesota Investment Funds are awarded to local units of government who provide loans to assist
expanding businesses. Cities, counties, townships and recognized Indian tribal governments are
eligible for this fund. All projects must meet minimum criteria for private investment, number of
jobs created or retained, and wages paid. There is a maximum of$500,000 per project for projects
of this size /number of jobs. At least 50 percent of total project costs must be privately financed
through owner equity and other lending sources (most applications selected for funding have at
least 70 percent private financing).Terms are for a maximum of 20 years for real estate and a
maximum of 10 years for machinery and equipment. Interest rates are negotiated.
Rosemount, Inc. has requested a forgivable loan in the amount of$500,000 for the second phase
of their project. Total project costs for the Phase 2 expansion plans are approximately
$26,345,000. Rosemount, Inc. applied for, and was awarded $905,000 in Job Creation Funds
from the Department of Employment and Economic Development(DEED)to assist with their
expansion plans. The remaining $25,000,000 will be financed through owner equity.
Phase 2 includes a 94,000 sq. ft. fit-out/expansion of the Shakopee facility to accommodate final
assembly operations and a technology lab. The final assembly of the first stage production line
will use approximately 68,000 square feet, and a new technology lab will be located in the
remaining space (approximately 26,000 square feet). This expansion will meet Rosemount, Inc.'s
2-3 year capacity needs for the main product assembly lines, for the manufacturing support
groups and technology labs; and for the infrastructure for receiving, shipping, warehouse &
manufacturing utilities. With this expansion, Rosemount, Inc. will add 200 new full time
equivalent(FTE)positions.
Recommendation
Staff recommends that Council hold the Public Hearing, and, if appropriate, approve the submittal
of the Minnesota Investment Fund application. If awarded, the Council should also enter into a
Grant Agreement with DEED which allows the issuance of a forgivable loan to Rosemount, Inc.
Budget Impact
As these are state funds, there is no direct financial impact on the City as a result of the MIF loan
and other items considered in this Public Hearing
Relationship to Vision
This supports Goal D, "Maintain, improve, or create strong partnerships with other public or
private sector entities."
Requested Action
Following the Public Hearing, if the Council concurs, it should, by motion, approve the following
Resolution:
Resolution No. 7474, A Resolution authorizing and approving a Minnesota Investment Fund
Application, Grant Agreement, and Forgivable Loan in connection with Rosemount, Inc.
Attachments: Res. No. 7474
CITY OF SHAKOPEE,MINNESOTA
RESOLUTION NO.7474
RESOLUTION REGUARDING THE AUTHORIZATION AND APPROVAL FOR A MINNESOTA
INVESTMENT FUND APPLICATION,GRANT AGREEMENT AND FORGIVEABLE
LOAN IN CONNECTION WITH ROSEMOUNT,INC.
WHEREAS,the City of Shakopee,Minnesota,desires to assist Rosemount,Incorporated,a corporation
chartered in the State of Missouri to expand at its current location,6201 Innovation Drive,Shakopee,
Minnesota(the"project"),and
WHEREAS,in addition to offering and facilitating certain economic development incentives to Rosemount,
Inc,the City of Shakopee will act as the legal sponsor for the project contained in the Business and
Community Development Application to be submitted on or after August 20,2014;and
WHEREAS,the Mayor and the City Clerk of the City of Shakopee,Minnesota,are hereby authorized to
apply to the Department of Employment and Economic Development for funding of this project on behalf of
the City of Shakopee;and
WHEREAS,the City of Shakopee 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 City of Shakopee has not incurred any costs,nor has it entered into any written agreements
to purchase property on behalf of the project;and
WHEREAS,the City of Shakopee 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 of Shakopee 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 Rosemount,Inc.;and
WHEREAS,upon approval of its application by the State of Minnesota,the City of Shakopee may enter into
an agreement with the State Department of Energy and Economic Development for the above-referenced
project;and
WHEREAS,the City of Shakopee 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
WHEREAS,the City of Shakopee and Kennedy and Graven,Chartered,the City's legal counsel,has
obtained credit reports and credit information regarding Rosemount,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 Rosemount,Inc.,to disclose any
adverse information could result in revocation or other legal action;and
WHEREAS,the City Council of the City of Shakopee held a duly noticed public hearing on August 19,2014,
related to the submission of a grant application to the Department of Employment and Economic Development
and the business subsidy of approximately$500,000 to be granted to Rosemount,Inc.if the City 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 Mayor and the City
Clerk of the City of Shakopee,Minnesota,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 Day of ,2014
Brad Tabke,Mayor
ATTEST:
Julie Linnihan,City Clerk