HomeMy WebLinkAboutAugust 16, 2016 EDA
ECONOMIC DEVELOPMENT AUTHORITY FOR THE
CITY OF SHAKOPEE, MINNESOTA
RESOLUTION NO. 16-5
RESOLUTION APPROVING COMPLIANCE DATE EXTENSION WITH
RESPECT TO BUSINESS SUBSIDIES PROVIDED TO SHUTTERFLY,
INC.
WHEREAS, Ryan Companies US, Inc., a Minnesota corporation,has constructed an
approximately 187,000 square foot building for use as a manufacturing facility, office, and call center (the
“Minimum Improvements”), on real property (the “Development Property”) located in the City of
Shakopee, Minnesota (the “City”), and Shutterfly, Inc., a Delaware corporation (the “Developer”), leases
the Minimum Improvements and purchase equipment in order to operate a manufacturing facility with
related office, and call center space within the Minimum Improvements; and
WHEREAS, the City, the Economic Development Authority for the City of Shakopee, Minnesota
(the “Authority”), Scott County, Minnesota (the “County”), and the Developer entered into a Contract for
Private Development, dated October 8, 2014 (the “Contract”), pursuant to which the Developer agreed to
develop the Minimum Improvements and the City, the Authority, and the County agreed to provide
certain economic assistance to reimburse the Developer for certain costs related to the purchaser of
equipment needed forits manufacturing facility; and
WHEREAS, pursuant to the Contract and an Agreement for Loan of Minnesota Investment Fund
–Forgivable Loan, dated June 10, 2016 (the “MIF Loan Agreement”), the Authority agreed to provide the
Developer with the proceeds of a Minnesota Department of Employment and Economic Development –
Minnesota Investment Fund Grantin the amount of $1,000,000 (the “MIF Loan”); and
WHEREAS, the economic assistance provided by Authorityto the Developer constitutes a business
subsidy under Minnesota Statutes, Sections 116J.993 to 116J.995, as amended (the “Business Subsidy Act”);
and
WHEREAS, Section 7.1of the MIF Loan Agreementincludes certain job and wage goals to be
satisfied by the Developer prior to the compliance date set forth in the MIF Loan Agreement(the
“Compliance Date”), and if such goals are not met the Developer is required to repay all or a portion of the
MIF Loan and to make payments to the Authorityor reduce the payments received as described in Section
4.4 of the MIF Loan Agreement; and
WHEREAS, the Developer has requested an extension of the Compliance Date for up to one year;
and
WHEREAS, the City Council of the City held a duly noticed public hearing on behalf of the
Authority as required by Section116J.994, subdivision 5 of the Business Subsidy Act on August 3, 2016,
regarding the extension of the Compliance Date; and
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE
ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE, MINNESOTA, AS
FOLLOWS:
484466v1 JAE SH155-316
1.The recitals set forth in this resolution are incorporated into and made a part hereof.
2.The Compliance Date is hereby extended to August 1,2017, and such extension is
deemed to be made a part of the MIF Loan Agreement.
3.The Presidentandthe Executive Directorare authorized and directed to execute any
documents or certificates necessary to carry out the transactions described herein.
4.Except as specifically amended by this resolution, the MIF Loan Agreementis hereby
ratified and confirmed and remains in full force and effect.
5.Authoritystaff and consultants are authorized to take all further actions necessary to assist
the Authorityin performing its obligations under this resolution and the MIF Loan Agreement.
Sworn and Executed Under My Hand this 16th day of August, 2016.
President
Executive Director
2
484466v1 JAE SH155-316
July 20, 2016
Samantha DiMaggio
Economic Development Coordinator
City of Shakopee
129 Holmes St. S.
Shakopee MN 55379
Dear Ms. DiMaggio:
Minnesota continues to have a strong economy fueled by a growing business community. Many of these
business expansions would not have occurred in Minnesota but for important investments by the Minnesota
luding the City
of Shakopee.
Shutterfly is a prime example of a company that could have located anywhere but chose Minnesota for a variety
of reasons including modest (relative to what other areas offer) state and local financial assistance. The return
on this investment has been strong $35 million in investment and 230 new full-time equivalent jobs earning an
average hourly wage of nearly $24. It is important to note that the jobs do not include the large number of
contractors that work at the facility throughout the year.
As you know, while this performance is impressive, the company will not achieve the 258 full-time equivalent
jobs it committed to creating by August 1, 2016 upon receiving the Minnesota Investment Fund assistance.
However, Shutterfly is working to add to its headcount and expects to easily surpass the job creation goal in the
coming months. As a result of these efforts as well as the overall return on the local and state assistance, the
department supports providing a one-year extension to this job creation deadline as allowed under the business
subsidy law Minnesota Statutes 116J.994. If Shutterfly is unable to meet the job creation goals, a pro-rata
portion of the forgivable loan will be repaid.
Thank you for your commitment to a providing more quality jobs for Minnesotans. Please let me know if you
have any questions.
Regards,
Kevin McKinnon
Deputy Commissioner
Economic Development Division
1st National Bank Building 332 Minnesota Street Suite E200 Saint Paul Minnesota 55101-1351
651-259-7114 800-657-3858 651-296-3900 http://mn.gov/deed
PHONETOLL FREE TTY
AN EQUAL OPPORTUNITY EMPLOYER AND SERVICE PROVIDER
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Page 1 of 2
Date - Batch (Julian)
Doc #
Project
Obj
Acct #
Description
Vend #
Total Amount
1.799,537.26
51.43890,000.00720.00126.0067.57847.0024.88
Ck Date
GL Date
Check TotalCheck TotalCheck TotalCheck TotalCheck TotalCheck TotalCheck TotalCheck TotalCheck Total
Check #
Page 2 of 2
Date - Batch (Julian)
Doc #
Project
Obj
Acct #
Description
GRAND TOTAL
Vend #
Total Amount
455.89
901,831.82
Ck Date
GL Date
Check Total
Check #