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HomeMy WebLinkAbout4.F.6. Resolution of support for Rahr Corporations Job Creation Fund Application, Res. No. 7553 r. 4.7 Consent Business St iAKo } �F TO: Mayor and City Council FROM: Samantha DiMaggio, Economic Development Coordinator DATE: 02/17/2015 SUBJECT: Resolution of Support for Rahr Corporation's Job Creation Fund Application, Res. No. 7553 (D) Action Sought The Council is asked to offer Resolution No. 7553, a Resolution Regarding the Support of a Job Creation Fund Application in Connection with Rahr Corporation, and move its adoption. Background The Job Creation Fund provides financial incentives to new and expanding businesses that meet certain job creation and capital investment targets. Companies deemed eligible to participate may receive up to $1 million for creating or retaining high-paying jobs and for constructing or renovating facilities or making other property improvements. In some cases, companies may receive awards of up to $2 million. The program is available to businesses engaged in manufacturing, warehousing, distribution, technology-related industries, and other eligible activities. Companies must work with the local government (city, county or township) where a project is located to apply to DEED to receive designation as a Job Creation Fund business. To be designated as a Job Creation Fund business, a business must, at minimum: •Be engaged in an eligible business activity; •Obtain local government support for their project via council resolution; •Invest at least $500,000 in real property improvements within one year of becoming a designated Job Creation Fund business; •Create at least 10 new full-time permanent jobs within two years of becoming a Job Creation Fund business while maintaining existing employment numbers; •Pay at least $12.61 in wages and benefits in 2014, adjusted annually based on 110 percent of federal poverty guidelines; •Have other location options outside of Minnesota; • Cause no undue harm to Minnesota business competitors; •Certify that the project would not occur without Job Creation Fund assistance. Projects that begin prior to becoming designated by DEED are not eligible for the Job Creation Fund. Companies that meet eligibility requirements must sign a business subsidy agreement with DEED to meet job retention, creation, wage, and capital investment requirements. The following benefits may be available once a business meets the conditions of its agreement and provides proof of performance: • $1000 per year per job created for jobs paying at least $26,000 in cash wages; • $2000 per year per job created for jobs paying at least $35,000 in cash wages; • $3000 per year per job created for jobs paying at least $45,000 in cash wages; •Up to a 5 percent rebate for real property improvements for businesses located in the Twin Cities Metro; •Up to a 7.5 percent rebate for real property improvements for business located in Greater Minnesota. Recommendation Based on the requirements for additional job creation and investments being made, staff recommends approval of the attached resolution relating to a Job Creation Fund application for Rahr Corporation. Budget Impact As the funding is from the State of Minnesota, there is no direct financial impact on the City as a result of the Job Creation Fund Program Award to Rahr Corporation. Relationship to Vision This supports Goal D, "Maintain, improve and create strong partnerships with other public and private sector entities". Requested Action If the Council concurs, it should offer Resolution No. 7553, A Resolution Regarding the Support of a Job Creation Fund Application in Connection with Rahr Corporation, and move its adoption. Attachments: Res No 7553 Application CITY OF SHAKOPEE,MINNESOTA RESOLUTION NO.7553 RESOLUTION REGARDING THE SUPPORT OF A JOB CREATION FUND APPLICATION IN CONNECTION WITH RAHR CORPORATION WHEREAS,the City of Shakopee,Minnesota(the"City"), desires to assist Rahr Corporation,a manufacturer,which is proposing to expand their facility in the City;and, WHEREAS,the City of Shakopee understands that Rahr Corporation,through and with the support of the City,intends to submit to the Minnesota Department of Employment and Economic Development an application for an award and/or rebate from the Job Creation Fund Program; and, WHEREAS,the City Council of the City of Shakopee held a meeting on February 17,2015,to consider this matter. NOW,THEREFORE,BE IT RESOLVED that the City Council of the City of Shakopee Minnesota,does hereby approve the project proposed by Rahr Corporation and its application for an award and/or rebate from the Job Creation Fund Program. Adopted in regular session of the City Council of the City of Shakopee,Minnesota held this 17 Day of February,2015. Brad Tabke,Mayor ATTEST: Julie Linnihan,City Clerk POSITIVELY Job Creation Fund (JCF) Program Department of Employment and Economic Development Application APPLICATION PROCEDURES The Job Creation Fund (JCF)Program provides job creation awards and capital investment rebates to designated businesses that retain or create high-paying,full-time permanent jobs and invest in real property improvements. The program is available statewide for manufacturing,distribution,warehousing,and other eligible business activities. Applications are accepted on a year-round basis as funds are available. To become a designated JCF business and receive benefits,a business must work in conjunction with the local government where the JCF business will be located.A JCF application must be completed and submitted to the Department of Employment and Economic Development(DEED) by the local government. Step-by-step instructions are listed below and applications may be submitted by mail or email to: Emily Johnson Program Manager—Job Creation Fund 332 Minnesota Street,Suite E200 St. Paul,MN 55101 Emily.a.johnson@state.mn.us Completing the Job Creation Fund(JCF)Program Application: Step-by-Step Instructions In consultation with DEED,the local government will make a preliminary determination about whether a business meets the minimum program requirements. Use the Job Creation Fund Eligibility and Application Checklist on the program website for guidance. If a business is potentially eligible,the following steps are completed: 1. The business provides the information to the local government needed to complete JCF Application. A local government resolution in support of the project must be included. Local officials must submit the application to DEED. 2. DEED evaluates the application and notifies the local government and business of approval or denial. If approved,DEED will formally designate the business as a JCF business and determine a job creation award and/or capital investment rebate amount. Awards and/or rebates of$500,000 or more require DEED to hold a public hearing. 3. Jobs created and/or capital investment expenditures may be counted after the business is formally notified by DEED that it has been designated as a JCF business. 4. DEED will draft a business subsidy agreement specifying the award and/or rebate to be provided after required job creation and capital investment goals are met. The JCF business and the DEED commissioner sign the business subsidy agreement. 5. The local government will assist the business with submitting required annual progress reports, payment request documentation,and other information requested by DEED.The local government will also provide information on annual changes in wage requirements. 1 102214 Ai,POSITIVELY , argie50; JOB CREATION FUND PROGRAM APPLICATION Department of Employment and Economic Development SECTION 1- LOCAL GOVERNMENT AND BUSINESS APPLICANT INFORMATION Local Government Project Sponsor: Local Government Contact Name and Title: Shakopee, MN Samantha DiMaggio, Economic Development Coord. Email: Telephone: sdimaggio @ci.shakopee.mn.us 952-233-9317 Address: City/State/Zip: 129 Holmes Street South Shakopee, MN 55379 Business Legal Name: Parent Company Name(if applicable): Rahr Corporation Mailing Address: City/State/Zip: 800 First Avenue West Shakopee, MN 55379 Street Address for Project Applying for JCF(JCF Project): City/State/Zip for JCF Project: See attached for addresses-multiple Primary Business Contact and Title: E-mail: Imogene Bass, Mgr-Financial Planning&Analysis ibass @rahr.com Website: Telephone: www.rahr.com 952-496-7007 Minnesota Tax ID: FEIN: 8672616 39-0556630 NAICS Code: Primary Business Activity for Proposed Project: 311213&424490 See attached SECTION 2-PROJECT OVERVIEW kro,'ect Type: New business with no parent company or current operations Ex pansion of existing facility or Minnesota company Expansion to Minnesota by a company with existing operations outside Minnesota Project will involve: El Leasing an existing facility where leasehold improvements will be made • Leasing a facility to be constructed I Ownership of an existing facility and making improvements n Construction and ownership of a new facility Are there facility or land limitations that do not allow the business to expand at an existing Minnesota facility? El Yes IT No ]Not applicable Id thi oject be located outside of Minnesota and serve the same customers? 1.11 Yes 11 No Project Timeframe: Task: Estimated Completion Date:(mm/dd) Commitment of all funds 01/13 Start of construction 04/15 Purchase equipment 03/15 Complete construction 05/16 Begin operations 07/16 2 102214 Current number of permanent,full-time employees company-wide: 313 Current number of permanent,full-time employees in Minnesota: 163 Current number of permanent,full-time employees at proposed JCF site:159 Will any jobs be relocated from another Minnesota site to the proposed JCF site? 13 Yes nNo If yes,which location(s)will the employees be relocated from? Kasota, MN [BSG Warehouse site only] *for jobs relocated from another Minnesota location,a letter in support of the move from the city where the job will be moving from must be attached Average wage for retained and/or new permanent,full-time employees:$20.35 Projected number of new full-time permanent jobs at proposed JCF project site: To be created in Year 1 To be created in Year 2 To be created in Year 3 #new FT, permanent jobs: 13 7 1 *full-time permanent jobs means positions with expected work hours of 2080 annually Sources&Uses: *since JCF funds are pay for-performance, they should not be included as a source or use of funds Bank(s) Equity State Local Gov't Other Total Property Acquisition $1,320,883 $1,320,883 Site Improvement $1,532,800 $1,532,800 New Construction $8,222,690 $8,222,690 Renovation of an Existing Building $o $0 Purchase of Machinery $3,202,350 &Equipment $3,202,350 Infrastructure $334,500 $334,500 Other: $0 $0 Other: $0 $0 Total Project Cost $14,613,223 $0 $0 $0 $0 $14,613,223 Does the property or the business have any outstanding local,state or federal tax liabilities?nYes Eg No If yes,describe: Have state environmental review requirements been met for the project, if applicable? CI Yes fl No Are there current or unsatisfied judgments or injunctions against the business or owners? ! I Yes ZI No If Yes,describe: Is there current or pending litigation involving the business? nYes al No If yes,attach summary and disposition. Within the past five years,has there been any violation(s),citation(s),or complaint(s)of discrimination filed Ua ainst the company in a state or federal court or before any state,federal or local government agency? Yes 0 No If Yes,attach a copy of the violation(s),citation(s),or complaint(s)and the disposition of each. 3 102214 SECTION 3-REQUIRED INFORMATION *Information from the items listed below will be used to evaluate potential awards and rebates for a business requesting JCF designation. Please be thorough in addressing the requested information and clearly identify responses to each item separately by number. PART A—Business Description. Describe the business and its major activities. Please include the following information: 1. Business overview and company history and ownership-include organizational structure, parent comapany and any affiliates 2. Product or industry outlook for the JCF project 3. Total projected sales for the JCF project both inside and outside of Minnesota 4. Estimated sales to Minnesota customers that replace purchases from outside Minnesota 5. Markets (local, statewide, national, international)along with their respective percentage to total sales and the customers served 6. Philanthropic or other ways in which the business contributes or will contribute to Minnesota 7. Attach two years of historical financials(Profit& Loss/Balance Sheets/Income Statement/Cash Flow Statement)and financial projections PART B—Project Description. Describe the project for which JCF funds are being requested. Please include the following information: 8. Provide details for the project for which JCF funds are being requested. Discuss topics such as square footage increase, lease vs ownership, new construction vs renovation or leasehold improvements, etc. 9. Describe how the JCF project will strengthen and/or diversify the local or Minnesota economy 10. Describe any local government assistance for the JCF project(e.g., city loan, abatement,TIF,etc,) and comment on dollar amounts and/or general information on any city projects related to this project. 11. Attach line-item construction cost estimates for real property improvements for the JCF project 12. If available, attach a commitment letter from each financing source(ie Financial Institutions), including a letter of commitment for any business equity PART C—Business Competitors. Identify the competitors of the business within local community(city and county),the adjacent counties, and in the state of Minnesota. Include: 13.The name of each major competitor and the location of each competitor by city 14.How the products or services are different than the JCF business' 15. How the markets are different from the JCF business' PART D—Detailed job&wage information. 16. If applicable, provide quarterly payroll reports from the last year for current permanent full-time employees who will be located at the JCF project site 17. For new full-time permanent employees, complete the form on Page 5 of this application or attach a listing of jobs that includes the information from the form on Page 5. 4 102214 JOB CREATION FORM -PERMANENT JOBS TO BE CREATED NUMBER HOURLY CASH TOTAL HOURLY POSITION TITLE WAGE RATE HOURLY VALUE CASH WAGE OF (list permanent full time positions only)* POSITIONS WITHOUT OF BENEFITS** INCLUDING BENEFITS BENEFITS Maintenance 1 $24.45 $7.76 $32.21 Milling 1 $19.20 $11.00 $30.20 Production 4 $16.20 $10.34 $26.54 Receiving 1 $18.00 $10.74 $28.74 Administrative 2 $18.00 $10.74 $28.74 Order Fullfillment 6 $15.60 $10.21 $25.81 Repackager 2 $16.80 $10.47 $27.27 QA/Inventory Control 1 $19.20 $11.00 $30.20 Sanitaiton 1 $16.80 $10.47 $27.27 Brewer/Tech 2 $26.40 $11.61 $38.01 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total jobs to be Created: 21 Average hourly Cash Wage: $18 Average hourly benefits: $10 *For the purposes of the Job Creation Fund program,job creation awards are provided for permanent full-time positions working 2080 hours per year. ** includes non-mandated benefits to the employee. Social security tax, unemployment insurance,workers compensation insurance and other benefits mandated by law must be excluded. NOTE: Minnesota job creation fund businesses must pay each new full-time employee added pursuant to the agreement total compensation, including benefits not mandated by law,that on an annualized basis is equal to at least 110 percent of the federal poverty level for a family of four. 5 102214 SECTION 4-BUSINESS ACKNOWLEDGMENT AND CERTIFICATION DATA PRIVACY ACKNOWLEDGMENT: Tennessen Warning Notice: per MN Statutes 13.04,Subd.2,this data is being requested from you to determine if you are eligible for an award under the Job Creation Fund program. You are not required to provide the requested information, but failure to do so may result in the department's inability to determine your eligibility for an award pursuant to the criteria developed under the program's enabling legislation and rules. The data you provide is classified as private or non-public and cannot be shared without your permission except as specified in statute. Data Privacy Notice: per MN Statutes 13.591,Subdivision 1,certain data provided in this application is private or non- public data;this includes financial information about the business, including credit reports,financial statements, net worth calculations, business plans;income and expense projections; balance sheets;customer lists;income tax returns; and design, market,and feasibility studies not paid for with public funds. Per MN Statutes 116J.401,Subd.3., certain data provided in this application is private data;this includes data collected on individuals pursuant to the operation of the Job Creation Fund Program. BUSINESS CERTIFICATION: Financial Assistance Certification: I hereby certify that the Job Creation Fund program is necessary to my business start- up or expansion and that without the Job Creation Fund my business start-up or expansion project would not happen to the extent outlined in the Job Creation Fund Application. I certify that I will not count any existing positions or employees moved or relocated from another of Minnesota facility where my business conducts operations as new permanent full-time employees for the purposes of fulfilling requirements of the Job Creation Fund Program. I certify I will not terminate, lay-off,or reduce the working hours of an employee for the purpose of hiring an individual to fulfill the requirements of the Job Creation Fund Program. I certify that I will pay prevailing wages as required under the laws of the State of Minnesota if applicable. I certify I will enlist the services of the Workforce Center Business Services and will sign a Job Listing Agreement as a condition to receiving funds in excess of$200,000 from the MN Department of Employment and Economic Development. I have read the above statements and I agree to supply the information requested to the MN Department of Employment and Economic Development,Office of Business Finance with full knowledge of the information provided herein. I certify that all information provided herein is true and accurate and that the official signing this form has authorization to do so. Jeffrey Taylor, Chief Financial Officer Name/Title of Business Official: i— Signature of Business Official: . /... LAANA Date: 2//O'15� LOCAL GOVERNMENT CERTIFICATION: I hereby certify that as the local government contact for the proposed Job Creation Fund project, I have reviewed the application and business information. I agree to work with the Job Creation Fund Program business applicant to supply information requested by the MN Department of Employment and Economic Development, Division of Business and Community Development. Name/Title of Local Government Contact: Signature of Local Government Contact: Date 6 102214