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Home My WebLink About7. Ryan Companies Us, Inc. Request to Amend Subsidies Application for Valley Green Corporate Center G. ~.Pt.%7 IS, A ~. CITY OF SHAKOPEE Memorandum TO: Mayor and City Council EDA President and Economic Development Authority Mark McNeill, City Administrator / EDA Executive Director FROM: Paul Snook, Economic Development Coordinator ~ SUBJECT: Request by Ryan Companies US, Inc. to Amend Subsidies Application for Valley Green Corporate Center MEETING DATE: August 6, 2003 Introduction The EDA and City Council are asked to grant authorization to Ryan Companies US, Inc. to amend its Application for Business Subsidies for the proposed Valley Green Corporate Center, which was received by the EDA and City Council on February 4,2003, based on recommendation by the Economic Development Advisory Committee. Background At its January 22, 2003 meeting, the Economic Development Advisory Committee made a positive recommendation to the Economic Development Authority and City Council regarding receiving an Application for Business Subsidies (for tax abatement) from Ryan Companies US, Inc. The EDAC also recommended initiating negotiation of a Master Development Agreement with Ryan, which would specify the terms under which tax abatement would be used to assist in financing a proposed mixed use development, Valley Green Corporate Center. At its February 4,2003 meeting, both the EDA and City Council accepted the EDAC's recommendation to receive Ryan's Application for Business Subsidies. Since the receipt of the original application in February, there has been much discussion, not only regarding the financing aspects of the project, but also regarding planning and land use issues (number of residential units, mix of commercial and residential, etc.). The land use issues and financing are closely related, therefore, in order for the project to move forward, both segments must be worked out concurrently. Discussion In the financial discussions it has become clear that abatement on residential property will not be supported, so in the attached letter from Ryan Companies (Exhibit A), which is a request to amend the original business Subsidies Application, an alternative financing scenario is being proposed. This includes the following: Ryan Request to Amend Sub App 08-06-03.doc 1 1) Eliminate the tax abatement request on residential development. 2) Ask the City Council to consider the use of tax abatement on retail development only. This abatement of the retail development would be dedicated to infrastructure costs. The County will be asked to also participate in the abatement. 3) Consider waiving park dedication fees for the residential development, ifthe development meets the criteria for such City Subdivision Ordinance. Ifthe EDA and City Council grant authorization to Ryan Companies to amend its Application for Business Subsidies, Ryan would submit the application to the ED Advisory Committee for consideration and possible recommendation to the EDA and City Council. Also, City and County staff will work out the details of the proposed retail abatement scenario, and provide analysis for consideration by the ED Advisory Committee at their August 1ih meeting, and by the EDA and City Council at their respective meetings on August 19th. In addition, the Parks and Recreation Advisory Board would review consideration of waiving park dedication fees for the residential development. The Planning Commission would consider possible land use changes. Options 1) Grant authorization to Ryan Companies US, Inc. to amend its Application for Business Subsidies for the proposed Valley Green Corporate Center, and submit it to the ED Advisory Committee for consideration and possible recommendation to the EDA and City Council. 2) Do not grant authorization to Ryan Companies US, Inc. to amend its Application for Business Subsidies for the proposed Valley Green Corporate Center. 3) Table and request additional information from staff. Recommendation Option 1. Action Requested Offer and pass a motion to grant authorization to Ryan Companies US, Inc. to amend its Application for Business Subsidies for the proposed Valley Green Corporate Center, and submit it to the ED Advisory Committee for consideration and possible recommendation to the EDA and City Council Ryan Request to Amend Sub App 08-06-03.doc 2 e-)(hd~/t A - ~ July 29, 2003 Mayor William Mars Shakopee City Council Members City of Shakopee 129 Holmes Street South Shakopee,~ 55379 RE: APPLICATION FOR BUSINESS SUBSIDIES Dear Mayor Mars and City Council Members, Ryan Companies US, Inc. would like to amend our business subsidies application. It is clear that the City Council will not support the use of tax abatement on residential development. Therefore, our revised application will: 1. Eliminate the tax abatement request on residential development. 2. Ask the City Council to consider the use of Tax Abatement on retail development. This Abatement of the retail development would be dedicated to infrastructure costs. The County will be asked to also participate in the Abatement. 3. Consider waiving park dedication fees for the residential development if the development meets the criteria for such City Subdivision Ordinance. Thanks for your time and consideration. We look forward to working with you on the development of the Valley Green Corporate Center. Sincerely, Patrick G. Ryan c: Kent Carlson Mark McNeill Roger Guenette Paul Steinman Paul Snook .;v ~D^ 7 ON fA V3L-. ~ TAX ABATEMENT ESTIMATE DEAN'S LAKE MIXED USE DEVELOPMENT IN SHAKOP'EE, MlNNESOT A FACILITIES CITY DEVELOPED TAX ABATEMENT ABATEMENT Retail CAPACITY WITH YE::ar Sq.Ft. City County 5% GROWTH .- __.M.......................~_.... 2004 35,000 0 0 314,139 200S 35,000 0 0 329,846 2006 35,000 17,804 20,179 346,338 2007 35,000 35,608 40,358 363,655 2008 0 53,412 60,537 381,838 2009 0 11,216 80,1)6 400,930 201.0 0 71,216 80: 716 420,976 2011 0 71,216 80,7.16 442,025 2012 0 71,216 80.716 464,126 2013 0 71,216 80,716 487,333 2014 0 71,216 80,716 511,699 2015 0 71,216 80,716 537,284 ------'---. 2016 0 71,216 .. 80,716 564,149 2017 0 71,216 80,716 592,356 2018 0 71 ,216 80,716 621,974 20J9 0 71,216 80,716 653,072 2020 0 7J,2 I 6 80,716 685,726 2021 0 53,412 60,537 720.012 2022 0 35,608 40,358 756,013 2023 0 17,804 20,179 . 793,814 Totals 140,000 1,068,240 _.. 1,210,740 Present Value at 8.00% Discount lb.te: $467,356 $529,700 !