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HomeMy WebLinkAbout3.A. Adopting a Business Subsidy Policy-Res. No. 5964-EDA Res. No. 2003-6 FDA- 3.A. CtJ()I')C;/ 13 < 1/ CITY OF SHAKOPEE Memorandum TO: Mayor and City Council Economic Development Authority FROM: Paul Snook, Economic Development Coordinator Economic Development Advisory Committee SUBJECT: City Council Res. No. 5'1 (p 'f , Adopting a Business Subsidy Policy EDA Res. No. ")00 ~... [. , Adopting a Business Subsidy Policy MEETING DATE: October 21, 2003 Introduction & Background: City Council and Economic Development Authority are asked to: . Hold a joint public hearing regarding the amended Business Subsidy Policy (each body must open and close the public hearing) . Upon close of the public hearing, each body adopt the amended Business Subsidy Policy. At the meeting of October 7,2003, the City Council and EDA reviewed the City's amended Business Subsidy Policy based on changes to the Minnesota Business Subsidy Act, directed that the Economic Development Advisory Committee review the amended policy and provide recommendation to the EDA / City Council regarding the wage floor and changes to Section IV suggested by the EDA / City Council, and set a public hearing for October 21,2003, for adopting the policy. ED Advisory Committee Recommendations: At the October 14th meeting, the Economic Development Advisory Committee reviewed the amended Business Subsidy Policy and provided recommendation to the EDA / City Council regarding the wage floor, and also regarding changes to Section IV of the policy. bsp pub hear 1O-21-03.doc Wage Floor The criteria under the new standards as outlined in the Minnesota Business Subsidy Act must set a "specific wage floor for the wages to be paid for the jobs created". At the October 7th meeting the City Council ! EDA was split on setting a wage floor between 200 and 300% of the federal minimum wage, with two councilors favoring 200%, two councilors favoring 300% and one councilor favoring the federal minimum wage. After considerable discussion and review at the October 14th meeting, the ED Advisory Committee recommends that the wage floor be set at the federal minimum wage, with additional supporting language added to that section, so the amended section reads as follows (added language is underscored): III. b.) Jobs and Wages. Every business subsidy recipient must create the maximum number of livable wage jobs feasible for the proposed project and site, and these jobs must pay at least the federal minimum wage. The City will take into account the special needs of small or growing businesses with the potential to create high paving ;obs in the future. The setting of wage goals must be sensitive to vrevailing wage rates, local economic conditions, external economic forces over which neither the grantor nor the recipient of the subsidv has control, the individual financial resources of the recipient and the competitive environment in which the recipient's business exists". The jobs created may include jobs to be retained, but only if job loss is specific and demonstrable. If, after a public hearing, it is determined that creation or retention of jobs is not a goal, wages and jobs may be set to zero, The EDAC holds the position that the City should maintain as much flexibility in the policy as possible with regard to the wage goal. This doesn't mean that the City is obligated to consider financing for projects that provide jobs that pay the federal minimum wage, but the key being not ruling out small and growing businesses that have potential to create high paying jobs in the future. Other Policy Changes Directed bv EDA / City Council In addition to the wage floor, the City Council! EDA, at the October ih meeting, suggested other changes to the Business Subsidy Policy, as follows (ED Advisory Committee / Staff / Legal Counsel recommendations are in italics): . Section IV. a.: City Council Direction: All business subsidies should require a public hearing, not just those greater than $100,000. EDAC / Staff/Legal Counsel Recommendation: Under the Business SubSidy Act, before granting a business subsidy that exceeds $100,000, the grantor (city / EDA) must provide public notice and a hearing on the subsidy. Also as defined in the Act, business loans and loan guarantees up to $75,000, andfinancial assistance of less than $25,000 are not considered business subsidies and do not require notice and bsp pub hear lO-21-03.doc hearing. The City and EDA, in the City's Business Subsidy Policy, are adopting the definitions of the Act, including the definition of a "business subsidy". Eliminating the $100,000 threshold is not a major change since most subsidies (such as tax increment financing and tax abatement) require a hearing anyway under TIF and abatement laws. ED Advisory Committee / Staff / Legal Counsel recommend that this section be edited as follows: Section IV. a Every business subsidy granted by the City (whether greater or lesser than $100,000) will be subject to the requirement of a public hearing. Any assistance that is excluded from the definition of a "business subsidy" under the Business Subsidy Act is not subject to the hearing requirement or any other portion of these policies. Every business subsidy must be approved by the Shako pee City Council, and by the EDA Board of Com missioners if the subsidy is granted by the EDA. This keeps the City's Policy consistent with the Business Subsidy Act. . Section IV. d.: City Council Direction: If a business fails to meet goals, it should be required to account immediately, not after two years; there should not be a two-year window for meeting the job-wage goals or the alternative goals some other public purpose is specified. EDAC / Staff / Legal Counsel Recommendation: The two year threshold should remain since in many instances the company has a phased employment plan where the number of jobs is "ramped up" over a period of time. Staff recommends this section remain as is. . Section IV.e.: City Council Direction: There should be no provision for a one year extension of compliance. EDA C / Staff / Legal Counsel Recommendation: The option for extension of time of up to one year for compliance with business subsidy job and wage goals should remain. There may be circumstances beyond the recipient's control (economic downturn, etc.) that would justify the City extending the compliance time period. It should also be noted that the City has discretion in this section; it "may" extend the time for compliance,' it is not an obligation. Action Required City Council Offer and pass Res. No. '5"'''1 , Resolution Adopting a Business Subsidy Policy EDA Offer and pass Res. No. '}o03 -6, Resolution Adopting a Business Subsidy Policy bsp pub hear lO-21-03.doc ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF SHAKOPEE RESOLUTION ;;'003...b RESOLUTION ADOPTING A BUSINESS SUBSIDY POLICY BE IT RESOLVED By the Economic Development Authority ("EDA") of the City of Shakopee ("City") as follows: Section 1. Recitals. 1.01. Before awarding any "business subsidy" as defined in Minnesota Statutes, Section 116J.993 to 116J.995 (the "Business Subsidy Act"), the EDA is required to adopt criteria regarding such subsidies after holding a public hearing. 1.02. The EDA previously adopted business subsidy criteria and has now determined to amend and restate the criteria in accordance with requirements of the Business Subsidy Act, as amended. 1.03. The EDA has reviewed the Business Subsidy Policy on file in City Hall, and has on this date held a duly notice public hearing at which all interested persons were given an opportunity to be heard. Section 2. Business Subsidy Policy Adopted. 2.01. The EDA adopts the Business Subsidy Policy on file in City Hall, which policy supersedes any prior business subsidy policy or criteria adopted by the EDA. 2.02. City staff are authorized to transmit a copy of the Business Subsidy Policy to the Minnesota Department of Employment and Economic Development in accordance with the Business Subsidy Act. Adopted by the Economic Development Authority of the City of Shakopee this 215t day of October, 2003. President ATTEST: Executive Director City Clerk EMT-236142 JRll0-7 CITY OF SHAKOPEE RESOLUTION NO. ->'1' '+ RESOLUTION ADOPTING A BUSINESS SUBSIDY POLICY BE IT RESOL YED By the City Council ("Council") of the City of Shakopee ("City") as follows: Section 1. Recitals. 1.01. Before awarding any "business subsidy" as defined in Minnesota Statutes, Section 116J.993 to 116J.995 (the "Business Subsidy Act"), the City is required to adopt criteria regarding such subsidies after holding a public hearing. 1.02. The Council previously adopted business subsidy criteria and has now determined to amend and restate the criteria in accordance with requirements of the Business Subsidy Act, as amended. 1.03. The Council has reviewed the Business Subsidy Policy on file in City Hall, and has on this date held a dilly notice public hearing at which all interested persons were given an opportunity to be heard. Section 2. Business Subsidy Policy Adopted. 2.01. The Council adopts the Business Subsidy Policy on file in City Hall, which policy supersedes any prior business subsidy policy or criteria adopted by the City. 2.02. City staff are authorized to transmit a copy of the Business Subsidy Policy to the Minnesota Department of Employment and Economic Development in accordance with the Business Subsidy Act. Adopted by the City Council of the City of Shakopee this 21 st day of October, 2003. Mayor ATTEST: City Clerk EMT-236 142 JRllO-7 Edited Strikethroughs are deletions, and underlines are additions CITY OF SHAKOPEE SHAKOPEE ECONOMIC DEVELOPMENT AUTHORITY Business Subsidy Policy OPEE COJvIMUNITY PRIDE SINCE 1857 129 Holmes Street South Shakopee, MN 55379 Phone (952) 233-3800 Fax (952) 233-3801 CITY OF SHAKOPEE SHAKOPEE ECONOMIC DEVELOPMENT AUTHORITY BUSINESS SUBSIDY POLICY I I. Purpose This document includes the sets forth the business subsidy policy and the specific criteria I to be considered by the City of Shakopee ("City") and the Shakopee Economic Development Authority ("EDA") to evaluate in evaluating requests for business I subsidies. In adopting these criteria, it is the intent of the City and EDA to comply with Minnesota Statutes, Sections 116J.993-116J.995 (the "Act"). The City and EDA hereby adopt the definitions contained in the Act for application in the criteria. The City and EDA have each adopted #lese- this policyi-es and these criteria after public hearing in accordance with the Act. Henceforth, the term "City" includes the City and EDA unless the context requires otherwise designated herein. II. Goals and Objectives It is the City's intent to advance the following goals and objectives in granting business subsidies: a.) All business subsidies must be consistent with Shakopee's comprehensive plan and any other similar plan or guide for development of the community. b.) Recipients will be required to must enter into a subsidy agreement with the City that is consistent with sta-tutory requirements, including a commitment to remain in business at the site for a minimum of five years after the benefit date and compliance '.'.'ith the specific job and wage goals established for the project the Act. The recipient must meet a public purpose, commit to remain at the site for five years after the benefit date, meet a specific wage floor, and must set and meet wage and lob goals, unless the public purpose is not employment, in which case after a public hearing wage and lob goals my be set at zero. III. Business Subsidy Criteria The City recognizes that every proposal is unique, Nothing in these criteria shall be deemed to be an entitlement or shall establish a contractual right to a subsidy. The City reserves the right to modify these criteria from time to time and to evaluate each project individually. The folloviing criteria shall be utilized in evaluating a request for a business subsidy:Every business subsidy recipient must meet a public purpose, which must include City of Shako pee Business Subsidy Policy but not be limited to increasing the tax base. The following criteria shall be utilized in evaluating a request for a business subsidy, although meeting these criteria does not create a contractual right to a business subsidy, and the City may later modify these criteria, as permitted by the Act. a.) Increase in tax base. While according to the Act provides that an increase in the tax base cannot be the sole grounds for granting a subsidy, the City believes it is requires such an increase as a necessary condition for any subsidy. b.) Jobs and Wages. It is the City's intent that the recipient EvelY business subsidy recipient must create the maximum number of livable wage jobs at the site feasible for the proposed proiect and site, and these jobs must pay at least the federal minimum wage. The City will take into accOlmt the special needs of small or growing businesses with the potential to create high paying jobs in the future. The setting of wage goals must be sensitive to prevailing wage rates, local economic conditions. external economic forces over which neither the grantor nor the recipient of the subsidy has controL the individual financial resources of the recipient and the competitive environment in which the recipient's business exists. This- The iobs created may include jobs to be retained but only if job loss is imminent specific and demonstrable. If, after a public hearing, it is detel1nined that creation or retention of iobs is not a goal, wages and jobs may be set at zero. c.) Other Goals. If creation of jobs it is not a goal. the business subsidy must achieve measurable, specific. and tangible goals. Business Subsidy Criteria (continued) e-;j..QJflconomic Development or Redevelopment. Business subsidies should promote one I or more ofthe following: 1. Provide significant development and enhancement of the basic (income producing) sector of the local economy economic impact (multiplier effect) 'Nithin the commlmity; 2. Encourage economic and commercial diversity within the community; 3. Contribute to the establishment or reestablishment of a critical mass of commercial development within an area; 4. Provide basic goods and services, increase the range of goods and services available or encourage fast-growing businesses; editedsubsdypolicy8-25-03.doc 2 City of Shako pee Business Subsidv Policv 5. Promote redevelopment objectives and removal of blight, including pollution remediation; 6. Promote the retention or adaptive reuse of buildings of historical or architectural significance; 7. Encourage full utilization of existing or planned infrastructure improvements. The City may deviate from these criteria in granting business subsidies if the reasons for the deviation are documented in writing and reported to the Department of Employment and Economic Development, pursuant to the Act. IV. Compliance and Reporting Requirements. a.) ABy Every business subsidy granted by the City (whether greater or lesser than $100,000) will be subject to the requirement of a public hearinK, Any assistance that is excluded from the definition of a "business subsidy" under the Business Subsidy Act is not subject to the hearing requirement or any other portion of these policies. if r,ecessary according to the Act, and EvelY business subsidy must be approved by the Shakopee City Council, and by the EDA Board of Commissioners ifthe subsidy is granted by the EDA._ I b.) EvelY recipient of a business subsidy must enter into a business subsidy I agreement fulfilling the requirements of the Act. IT.)c. ) It '.vill be necessary for Baoth the business subsidy recipient and the City te must-comply with the reporting and monitoring requirements ofthe Act. d.) If a business . subsidy recipient fails to meet the goals set forth in the business subsidy within two years, the business subsidy assistance plus interest must be paid back to the City, provided that repayment may be prorated to reflect partial fulfillment of goals. Interest must be set at no less than the implicit price deflator for government consumption expenditures and gross investment for state and local governments prepared by the bureau of economic analysis of the United States Department of Commerce. e.) The City may, after a public hearing, extend the time for compliance with business subsidy lob and wage goals by up to one year. v. Tax Increment Financing Program I editedsubsdypolicy8- 25-03 .doc 3 City of Shako pee Business Subsidv Policv Tax Increment Financing (TIP) is a financing tool v,hereby districts nre established for development or redevelopment and the increased property tax revenues, or increment, generated by the improvements is captured to pay back the bond debt or other financing provided for the project. TIP is useful for the attraction and retention of businesses by the City of Shakopee. The fundamental principle that makes Tax Increment Financing viable is that it is designed to encourage development that would not othenvise occur. The City shall consider TIF in cases that serve to accomplish the City's economic de','elopment goals, and to assist projects that 'llould not occur "but for" the assistance provided through Tax Increment Financin;;. In addition to the general criteria described in Sections III and IV above, requests for TIF assistance ',vill be evaluated according to the policies in these Sections. Tax lBeremeBt FinaBeing Program (coBtinued) Program Goals 1.To promote development or redevelopment that would not othervvise occur. 2. To promote development or redevelopmer.t that will build a strong tax base. 3.To improve the commur..ity's economic vitality through the creation and expansion of employment opportunities. 4.To assure that development projects nre constmcted and maintained 'Nith quality consistent with the goals of the City of Shakopee. 5.To enhance the competitive position of the City of Shakopee regarding new and expanding businesses. Program Eligibility Criteria Qualified projects (applicants) must meet or exceed the fonowing criteria to be eligible for TIP assistance. Meeting the threshold of eligibility does not mean automatic approval for the applicant. The Shnkopee Economic Development j\.uthority and City Council shall make final approval of TIP assistance. The applicant must complete an.1pplication for Business Subsidies as one measure of project eligibility. 1.If the project is a manufacturing or warehouse ,I distribution use, the following criteria apply: a.)The project must be located in an I 1 (Light Industry), I 2 (Heavy Industry), or BP (Business Pnrk) zoning district editedsubsdypolicy8- 25-03 .doc 4 City of Shakopee Business Subsidv Policv b,)The project must occupy a minimum land area of 5 acres. 2.Thc project mast be consistent 'vVith the City's Comprehensive Plan. 3.If the project inyolYes redevelopment, the applicant n:ust provide evidence of the building and site conditions needed to evaluate 'whether the project qualifies for establishment of a redevelopment district or renovation and renecwal district. 4.The project must be consistent v/ith environmental regulations and not create an enviromnental hardship for the community. 5. The applicant must be '.villing to enter into a developer' s agreement upproycd by the City. 6.The applicant should at all times retain and be assisted by qualified financial consultants and/or undenvriters, and by legal counsel. TIP Program Eligibility Criteria (continued) 7.Construction of the project shall not commence until the City has approved a TIP plan for the project. 8.The City reserves the right to select a third party administrator/consultant to assist in the re-vie,,'! and project development process, the cost of\'/hic11 will be paid by the applicant. 9.The applicant must submit preliminary plans of the project and evidence of ability to finance the project. 10.The applicant must provide security to the City to cover all costs paid by tax increment, unless the TIP plan is a "pay as you go" agreement. 11. The City reserves the right to deny any application for TIP financing for any reason at any stage of the proceedings prior to adoption of the final approval of a Developer' 5 Agreement. 12.The developer v/ill provide a minimum of 10% o\'mer and/or developer equity il: the project. The City reserves the right to deny projects 'lI11ich substantially comply with the eligibility criteria, but 'Nhich fail to have a significant positive impact on the community or to accomplish the City's economic development or redevelopment goals as detelmined by the Economic De','elopment Authority and City Council. The editedsubsdypolicy8-25 -03 .doc 5 City of Shako pee Business Subsidv Policv City reserves the right to consider and approve projects which substantially comply \vith the eligibility criteria, as set forth in the program providing other tangential items such as building materials, building quality, etc., meet or exceed minimum standards and have, in the Council's judgment, a significant positive impact on the community and have accomplished the City's economic development or redevelopment goals. Costs Eligible for Tax Increment Financing Assistance Project costs qualifying for TIP assistance, as defined under the Minnesota TIF Act, include without limitations the following: l.l\cquisition of property 2.Clearing of land 3.Relocation and demolition of existing structr.res 4.Site preparation 5.Soils correction 6.Removal of hazardous '..vasto or pollution 7.Installation of utilities 8.Construction of public or private improvements 9.Administrative costs directly related to the parcels identified 1O.0ther similar activities VI.-V. Application Process for Business Subsidies I The applicant will complete the City's Application for Business Subsidies; submit with the application a deposit of$5,200 to cover City administrative costs; and provide other information as requested by the City. 1. City staff or the City's agent shall review the application materials and make preliminary recommendations to the Shakopee Economic Development Authority and City Council as to compliance of the application and proposed project with City goals and eligibility criteria. 2. Pinal evaluation of the application shall include, in addition to items subject to preliminary review, a review of applicable credit analysis, financial structuring and legal compliance. A formal recommendation shall then be made to the Economic Development Authority and the City Council. 3. After a review of the final evaluation and formal recommendation, the Shakopee Economic Development Authority and City Council shall consider final approval of the use of business subsidies and hold the appropriate public hearings. editedsubsdypolicy8- 25-03 .doc 6 City of Shakopee Business Subsidy Policy 4. All applications and supporting materials and documents shall become the property of the City. editedsubsdypolicy8- 25-03 .doc 7 CITY OF SHAKOPEE SHAKOPEE ECONOMIC DEVELOPMENT AUTHORITY Business Subsidy Policy S OPEE CO:MIvIUNITY PRIDE SINCE 1857 129 Holmes Street South Shakopee, MN 55379 Phone (952) 233-3800 Fax (952) 233-3801 CITY OF SHAKOPEE SHAKOPEE ECONOMIC DEVELOPMENT AUTHORITY BUSINESS SUBSIDY POLICY I. Purpose This document sets forth the business subsidy policy and the specific criteria to be considered by the City of Shakopee ("City") and the Shakopee Economic Development Authority ("EDA") in evaluating requests for business subsidies. In adopting these criteria, it is the intent of the City and EDA to comply with Minnesota Statutes, Sections 116J.993- 116J.995 (the "Act"). The City and EDA hereby adopt the definitions contained in the Act for application in the criteria. The City and EDA have each adopted this policy and these criteria after public hearing in accordance with the Act. Henceforth, the term "City" includes City and EDA unless otherwise designated herein. II. Goals and Objectives It is the City's intent to advance the following goals and objectives in granting business subsidies: a.) All business subsidies must be consistent with Shakopee's comprehensive plan and any other similar plan or guide for development of the community. b.) Recipients must enter into a subsidy agreement with the City that is consistent with the Act. The recipient must meet a public purpose, commit to remain at the site for five years after the benefit date, meet a specific wage floor, and must set and meet wage and job goals, unless the public purpose is not employment, in which case after a public hearing wage and job goals my be set at zero. III. Business Subsidy Criteria Every business subsidy recipient must meet a public purpose, which must include but not be limited to increasing the tax base. The following criteria shall be utilized in evaluating a request for a business subsidy, although meeting these criteria does not create a contractual right to a business subsidy, and the City may later modify these criteria, as permitted by the Act. a.) Increase in tax base. While the Act provides that an increase in the tax base cannot be the sole grounds for granting a subsidy, the City requires such an increase as a necessary condition for any subsidy. City of Shakopee Business Subsidv Policv b.) Jobs and Wages. Every business subsidy recipient must create the maximum number of livable wage jobs feasible for the proposed project and site, and these jobs must pay at least the federal minimum wage. The City will take into account the special needs of small or growing businesses with the potential to create high paying jobs in the future. The setting of wage goals must be sensitive to prevailing wage rates, local economic conditions, external economic forces over which neither the grantor nor the recipient of the subsidy has control, the individual financial resources of the recipient and the competitive environment in which the recipient's business exists. The jobs created may include jobs to be retained but only if job loss is specific and demonstrable. If, after a public hearing, it is determined that creation or retention of jobs is not a goal, wages and jobs may be set at zero. c.) Other Goals. If creation of jobs it is not a goal, the business subsidy must achieve measurable, specific, and tangible goals. d.) Economic Development or Redevelopment. Business subsidies should promote one or more ofthe following: 1. Provide significant development and enhancement of the basic (income producing) sector of the local economy; 2. Encourage economic and commercial diversity within the community; 3. Contribute to the establishment or reestablishment of a critical mass of commercial development within an area; 4. Provide basic goods and services, increase the range of goods and services available or encourage fast-growing businesses; 5. Promote redevelopment objectives and removal of blight, including pollution remediation; 6. Promote the retention or adaptive reuse of buildings of historical or architectural significance; 7. Encourage full utilization of existing or planned infrastructure improvements. The City may deviate from these criteria in granting business subsidies if the reasons for the deviation are documented in writing and reported to the Department of Employment and Economic Development, pursuant to the Act. finalbsplO-21-03.doc 2 City of Shakopee Business Subsidv Policv IV. Compliance and Reporting Requirements. a.) Every business subsidy granted by the City (whether greater or lesser than $100,000) will be subject to the requirement of a public hearing. Any assistance that is excluded from the definition of a "business subsidy" under the Business Subsidy Act is not subject to the hearing requirement or any other portion of these policies. Every business subsidy must be approved by the Shakopee City Council, and by the EDA Board of Commissioners if the subsidy is granted by the EDA. b.) Every recipient of a business subsidy must enter into a business subsidy agreement fulfilling the requirements ofthe Act. c.) Both the business subsidy recipient and the City must comply with the reporting and monitoring requirements of the Act. d.) If a business subsidy recipient fails to meet the goals set forth in the business subsidy within two years, the business subsidy assistance plus interest must be paid back to the City, provided that repayment may be prorated to reflect partial fulfillment of goals. mterest must be set at no less than the implicit price deflator for government consumption expenditures and gross investment for state and local governments prepared by the bureau of economic analysis of the United States Department of Commerce. e.) The City may, after a public hearing, extend the time for compliance with business subsidy job and wage goals by up to one year. V. Application Process for Business Subsidies The applicant will complete the City's Application for Business Subsidies; submit with the application a deposit of$5,200 to cover City administrative costs; and provide other information as requested by the City. 1. City staff or the City's agent shall review the application materials and make preliminary recommendations to the Shakopee Economic Development Authority and City Council as to compliance ofthe application and proposed project with City goals and eligibility criteria. 2. Final evaluation ofthe application shall include, in addition to items subject to preliminary review, a review of applicable credit analysis, financial structuring and legal compliance. A formal recommendation shall then be made to the Economic Development Authority and the City Council. 3. After a review of the final evaluation and formal recommendation, the Shakopee Economic Development Authority and City Council shall consider finalbsp 10-21-03 .doc 3 City of Shako pee Business Subsidv Potiev final approval of the use of business subsidies and hold the appropriate public hearings. 4. All applications and supporting materials and documents shall become the property ofthe City. finalbsp 1 0-21-03 .doc 4 City of Shako pee Business Subsidv Policv CITY OF SHAKOPEE SHAKOPEE ECONOMIC DEVELOPMENT AUTHORITY BUSINESS SUBSIDY POLICY 1. Purpose This document sets forth the business subsidy policy and the specific criteria to be I considered by the City of Shakopee ("City") and the Shakopee Economic Development Authority ("EDA") in evaluating requests for business subsidies. In adopting these criteria, it is the intent of the City and EDA to comply with Minnesota Statutes, Sections 116J .993- 116J.995 (the "Act"). The City and EDA hereby adopt the definitions contained in the Act for application in the criteria. The City and EDA have each adopted this policy and these criteria after public hearing in accordance with the Act. Henceforth, the term "City" includes the City and EDA unless otherwise designated herein. II. Goals and Oblectives It is the City's intent to advance the following goals and objectives in granting business subsidies: finalbsplO-2I-03.doc 5 City of Shakopee Business Subsidv Policv a.) All business subsidies must be consistent with Shakopee's comprehensive plan and any other similar plan or guide for development of the community, b.) Recipients must enter into a subsidy agreement with the City that is consistent with the Act. The recipient must meet a public purpose, commit to remain at the site for five years after the benefit date, meet a specific ',,,age floor, and must set and meet "'lUge and job goals, unless the publie purpose is not employment, in which case aftcr a public hearing v/age and job goals my be set at zero. ill. Business Subsidy Criteria Every business subsidy recipient must meet a public p'..ITpose, \vhich must include but not be limited to increasing the tax base. The follovting criteria shall be utilized in evaluating a request for a business subsidy, although meeting these criteria does not create a contractual right to a business subsidy, and the City may later modify these criteria, as permitted by the Aet:- a.) Increase in Tax Base. While the Act provides that an increase in the tax base cannot be the sole grounds for granting a subsidy, the City requires such increase as a necessary condition for any subsidy. b.) Jobs and Wages. Every business subsidy recipient must create the maximum number of livable wage jobs feasible for the proposed project and site, and these jobs must pay at least the federal minimum wage. The jobs created may include jobs to be retained, but only if job loss is specific and demonstrable. If, after a public hearing, it is determined that creation or retraction of jobs is not a goal, wages and jobs may be set to zero. c.) Other Goals. If creation of jobs it is not a goal, the business s'..lbsidy must I achieve measurable, specific, and tangible goals. d.) Economic Dc...dopmcnt or Rcdc...'Clopmcnt. Business subsidies should I promote one or more onhe follm.ving: 1. Provide significant economic impact (multiplier effect) within the community; 2. Encourage economIC and commercial diversity within the community; 3. Contribute the establishment or reestablishment of a critical mass of commercial development within an area; 4. Provide basic goods and services, increase the range of goods and services available or encourage fast-growing business; finalbsp 10-21-03 .doc 6 City of Shakopee Business Subsidv Policv 5. Promote redevelopment objectives and removal of blight, including pollution remediation; 6. Promote the retention or adaptive reuse of buildings of historical or architectural significance; 7. Encourage full utilization of existing or planned infrastructure improvements. The City may de'/iate from these criteria in grunting business subsidies if the reasons for the deviation are documented in writing and reported to the Department of Employment and Economic Development, p~lrsUi.mt to the ,^....et. IV. Compliance and Reporting Requirements. a.) Every business subsidy granted by the City will be subject to the requirement of a public hearing, if the subsidy exceeds $100,000 or a hearing is otherwise required by the Act or other laws. Every business subsidy must be approved by the Shakopee City Council, and by the EDA Board of Commissioners if the subsidy is granted by the ED A. b.) Every recipient of a business subsidy must enter into a business subsidy agreement fulfilling the requirements of the Act. c.) Both the business subsidy recipient and the City must comply with the reporting and monitoring requirements ofthe Act. d.) If a business subsidy recipient fails to meet the goals set forth in the business subsidy within two years, the business subsidy assistance plus interest must be paid back to the City, provided that repayment may be prorated to reflect partial fulfillment of goals. Interest must be set at no less than the implicit price deflator for government consumption expenditures and gross investment for state and local governments prepared by the bureau of economic analysis of the United States Department of Commerce. e.) The City may, after a public hearing, extend the time for compliance with business subsidy job and wage goals by up to one year. v. Application Process for Business Subsidies The applicant will complete the City's Application for Business Subsidies; submit with the application a deposit of $5,200 to cover City administrative costs; and provide other information as requested by the City. finalbspIO-21-03.doc 7 City of Shakopee Business Subsidv Policv a.) City staff or the City's agent shall review the application materials and make preliminary recommendations to the Shakopee Economic Development Authority and City Council as to the compliance of the application and proposed project with the business subsidy policy and the goals and criteria set forth herein. b.) Final evaluation of the application shall include, in addition to items subject to preliminary review, a review of applicable credit analysis, financial structuring and legal compliance. A formal recommendation shall then be made to the Economic Development Authority and the City Council. c.) After a review of the final evaluation and formal recommendation, the Shakopee Economic Development Authority and City Council shall consider final approval of the granting of a business subsidy and hold the appropriate public hearings. d.) All applications and supporting materials and documents shall become the property of the City. finalbsplO-21-03.doc 8