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CITY OF SHAKOPEE/
SHAKOPEE ECONOMIC DEVELOPMENT' AUTHORITY (EDA)
BUSINESS SUBSIDY POLICY
(Revised May 15, 2012)
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 1161.993- 116J.995 as amended (the Act). The City and EDA hereby adopt
the definitions contained in the Act for application of the criteria, and they are incorporated herein by
reference. The City and the EDA have each adopted this policy and these criteria after a public hearing
in accordance with the Act. Henceforth in this document the term "City" includes both the City and the
EDA unless otherwise designated.
II. Goals of this Policy
It is the City's intent to advance the following goals and objectives in granting business subsidies:
a. It is the goal of the City to provide business subsidies that are consistent with the City of
Shakopee's comprehensive plan and other plans and guides adopted by the City to guide
development of the community.
b. It is the goal of the City to provide business subsidies that are consistent with the Act,
including;
i. The project for which the business subsidy is being provided must have a "public
purpose, including, but not limited to, the public purposes stated in Section III
below."
ii. The recipient must enter into a business subsidy agreement with the City that is
consistent with the Act;
iii. The recipient must commit to remain in the site for which the business subsidy was
granted for at least five (5) years from the benefit date (as defined in the Act);
iv. The business subsidy agreement sets forth the findings relative to the criteria
contained herein, and any specific job, wage, property valuation or other goals
established with respect to the business subsidy.
111. Business Subsidy Criteria
The following criteria shall be utilized in evaluating a request for a business subsidy. However, that an
applicant meets these criteria does not create a contractual right to a business subsidy. The City may at
any time and at its own discretion modify these criteria as permitted by the Act.
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a. Increase in Tax Base. The Act provides that an increase in tax base cannot be the sole basis
for granting a business subsidy, however, the City considers an increase in tax base is a
critical factor in granting a business subsidy. The City may consider a specific goal for tax
base increase in connection with a specific request for assistance.
b. Job Creation. The applicant will be required to demonstrate that the proposed project
will create the maximum number of jobs feasible in light of the project type and site. Jobs
to be created may include jobs that will be retained within the City of Shakopee, but only
with a demonstration by the applicant that, absent the business subsidy, the job loss would
be specific and demonstrable. If, after the public hearing, the City determines that the
creation or retention ofjobs is not a goal of the specific project, the job creation goal may
be set at zero (0).
c. Wages. New jobs to be created by the project must pay at least 200% of the federal
minimum wage exclusive of benefits. Jobs to be retained may not be required to meet the
above wage standard. After the public hearing the City may establish wage goals for new
jobs to be created that vary from the standard above, and which take into account of the
following additional factors;
i. The size of the business, and its potential to create higher paying jobs in the future;
ii. Prevailing local wage rates;
iii. Local economic conditions;
iv. External economic factors over which neither the City nor the recipient of the
business subsidy has control;
v. The individual financial resources of the recipient; and
vi. The competitive environment in which the recipient's business exists.
d. Other Economic or Redevelopment Goals. If creation ofjobs is determined not to be a goal
of a project (and by extension wages) the proposed business subsidy must achieve specific,
tangible and measurable goals related to one or more of the following;
i. Provides a significant economic impact by means of a multiplier effect within the
community;
ii. Results in greater economic or commercial diversity within the community;
iii. Contributes to the establishment or reestablishment of a critical mass of
commercial /industrial development within an area of the City;
iv. Provides goods or services that are not currently available in the community;
v. Increases the range of goods or services that are available in the community;
vi. Encourages the growth of fast - growing businesses;
vii. Encourages private investment or reinvestment that results in the removal of blight
or remediation of pollution;
viii. Supports the retention and /or adaptive re -use of buildings of historical or
architectural significance;
ix. Encourages the full utilization of existing or planned public infrastructure
improvements.
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In granting business subsidies, the City may deviate from the criteria outlined above if a) the reasons for
the deviation is documented in writing and b) reported to the Minnesota Department of Employment
and Economic Development (DEED) pursuant to the Act.
IV. Application Process for Business Subsidies
The applicant will complete and submit the City's Application for Business Subsidy; submit with the
application a deposit of six thousand dollars ($6,000.00) to cover the City's administrative review costs;
and provide other information which may be requested by the City. Applicant will be liable for any
additional costs beyond the initial deposit as well. All materials submitted to the City in connection with
a business subsidy application shall become the property of the City. The review process shall involve at
least the following steps;
a. City staff or the City's agent shall review the application materials and make a preliminary
recommendation to the City Council and EDA regarding 1) the completeness of the
application, 2) whether the application meets the goals of this policy, and 3) whether the
application complies with the criteria established in this policy.
b. In the event that the City Council and EDA concur with the recommendation in a. above, a
public hearing will be set at which the City will consider a final recommendation related to
the application. The final review and recommendation by City staff or the City's agent shall
take into account at least the following;
i. Applicable credit analysis;
ii. Financial structure of the proposed project /application;
iii. Legal compliance of the project /application.
c. At the time of the scheduled public hearing, City staff or the City's agent will make a final
recommendation to the City Council and EDA regarding the application. The City Council
and EDA may adopt the recommendation or direct City staff or the City's agent to develop
alternative information and /or alternatives for action by the City Council and EDA.
V. Compliance and Reporting Requirements.
a. Any assistance that does not meet the definition of a "business subsidy" will be excluded
from the requirement of holding a public hearing prior to granting a business subsidy. All
assistance that meets the definition shall be subject to the requirement of a public hearing.
b. Every recipient of a business subsidy must enter into a business subsidy requirement
agreement with the City, which agreement must fulfill the requirements of the Act.
c. Both the recipient and the City must comply with the reporting and monitoring
requirements of the Act.
d. In the event that a recipient fails within two (2) years of the benefit date as defined in the
Act to meet the job and wage goals set forth in the business subsidy agreement, the
recipient or its successors and assigns shall be liable to repay to the City the assistance plus
interest. The City may prorate repayment to reflect partial fulfillment of the goals set forth
in the business subsidy agreement. The rate of interest charged must be set at no less than
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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 Unites
States Department of Commerce.
e. The City may, after holding a public hearing, extend the time for compliance with business
subsidy agreement job and wage goals by up to one (1) year.
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