HomeMy WebLinkAbout05 20 2013 EDA 8C Business Subsidies Policy O � PRIp�
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Prior Lake. MN 55372
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ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: May 20, 2013
AGENDA #: 8C
PREPARED BY: Casey McCabe, Community Development Specialist
AGENDA ITEM: BUSINESS SUBSIDIES POLICY
DISCUSSION: Introduction
In the previous agenda item the EDA identified a list of "business subsidies" it is willing to
consider to encourage economic development and redevelopment. State Statute requires
the city to have a"Business Subsidy Policy". The purpose of this agenda item is to dis-
cuss possible amendments to the City of Prior Lake Business Subsidies Policy, adopted
by the City Council on October 18, 2004. Staff has suggested various amendments for
EDA consideration in this report.
Historv
In 1999, the State Legislature adopted the "Business Subsidy Act;" a summary of the law
is attached to this report. Under the law, a business subsidy means a state or local gov-
ernment agency grant, contribution of personal property, real property, infrastructure, the
principal amount of a loan at rates below those commercially available to the recipient,
any reduction or deferral of any tax or any fee, any guarantee of any payment under any
loan, lease, or other obligation, or any preferential use of government facilities given to a
business.
The Law, as amended in 2008, provides for certain exceptions identified in the statute,
most notable of which is the exemption from regulation of any subsidy of less than
$150,000. The city's Business Subsidies Policy was written to facilitate city compliance
with the Business Subsidies Act prior to the amended law. The key provisions of the poli-
cy are:
➢ The purpose of the policy is to: establish guidelines and criteria regarding the use of
business subsidies for private development projects within the City of Prior Lake; to
define the types of business subsidy which the City Council may consider; to clarify
that subsidies must be the minimum necessary assistance to allow the prospect to
proceed; and to provide that the City will review each application on a case by case
basis.
➢ Business subsidies are defined in accordance with the law.
➢ Business subsidies must achieve one or more "public purpose."
➢ Specific guidelines are provided for commercial/industrial projects, including such
things as: a demonstrated increase in tax base; reduction of blight; increase in em-
ployment; retention of jobs; specific wage and job goals; and the like.
➢ Required content for Business Subsidy Agreements.
➢ Reporting requirements, application process and procedure.
Current Circumstances
Staff is proposing to update the city's Business Subsidies Policy and would appreciate
EDA direction related to the following items:
• "But For" Clause
Consider removal of the references to "but for" in Section 1 and Section 5. The refer-
ence to °but for" is a term typically used in reference to TIF districts; the development
would not occur but for the use of TIF (or other financial support). The term but for
does not appear in the Minnesota Statute regulating local and state business subsi-
dies.
The but for test would still apply to TIF districts but this test may be difficult to meet
when developers or property owners apply for other types of incentives offered by the
City, such as a below market lease or the sewer and water fee deferral program.
• Establish Minimum Standards to be Considered a Business Subsidv
Although a business subsidy of less than $150,000 is exempt from the Act, the City of
Prior Lake has previously required all business subsidies, regardless of size, to com-
ply with all requirements of the Act to be eligible for funds. The EDA may wish to
consider amending the Business Subsidies Policy to mirror State Statute require-
ments.
Staff anticipates future subsidies in the form of micro-enterprise loans, Sewer and
Water Fee Deferral Program loans, Technology Village and City owned property leas-
es, or other incentives with a value of less than $150,000. Staff believes these types
of incentives would be required to comply with the reporting requirements under the
current policy and would not be required to comply with the same requirements if the
policy were amended to mirror State Statute requirements.
• Waye Requirements
The current minimum wage requirement for a job to be considered a new or retained
job is established in Section 5. D. at $13.00 per hour, exclusive of benefits. Staff rec-
ommends the EDA consider amending this language so the minimum wage will adjust
based on cost of living and inflation modifications. Recommended language may be,
"The minimum wage requirement for a job to be considered a new or retained job is
established at 120% of the federal poverty level for a family of four, as determined
annually by the U. S. Department of Health and Human Services, exclusive of bene-
fits." If amended, the current minimum wage requirement would be $13.59 per hour
and the federal poverty level has increased by an average of 2.5% each year over the
past ten years.
� Identifv Loan and Incentive Proarams
The EDA may wish to include a list of current City of Prior Lake tools and incentives
within the Business Subsidies Policy (Agenda Item 8B).
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• A�plication Fees
The EDA should provide direction to staff related to application fees. Section 8 of the
Business Subsidies Policy currently states, "A fee of $2,500 shall accompany any Tax
Increment Finance; Tax Abatement, or grant request application to cover the City's in-
itial legal, administrative, and planning costs." The official 2013 fee schedule identi-
fies a preliminary TIF application fee of $2,500, a TIF escrow deposit of $12,000 and
a conduit bond financing origination fee of $50,000. The official fee schedule does
not identify a fee for tax abatements or other loan and grant programs.
Conclusion
The EDA should review the city's existing Business Subsidies Policy in light of comments
noted above and in light of State Statutes, and then provide direction to staff. City staff
anticipates presenting a revised Business Subsidies Policy to the EDA during its June
2013 meeting followed by a City Council review and final approval following a public hear-
ing in July 2013.
ISSUES: The changes proposed above are intended to accomplish various objectives. Some are to
assure that the Business Subsidies Policy corresponds with current statutory guidelines
while others would liberalize some of the city's guidelines, such as our present interpreta-
tion of a business subsidy to be virtually any amount when state law establishes a
$150,000 minimum. Given that we are engaged in providing smaller subsidies, the liberal-
ized guidelines might be considered appropriate by the EDA.
One set of revisions staff did not discuss extensively is fees. The $2,500 TIF fee was ini-
tially established to recover city costs for asking Ehlers if a particular project would qualify
for TIF and the approximate amount. Staff is not sure if the city has ever charged this fee
because staff does not believe that Ehlers has charged the city for such estimates. The
EDA may wish to consider discontinuing this fee. Staff can evaluate over time whether
this is resulting in costs to the city.
By the same token, the city's $12,000 TIF fee has been looked at by some applicants as
aggressive. From their perspective at the time the fee is collected, they have no idea
whether the TIF will be approved, neither does the staff or city council; however, it does
ensure that the city gets reimbursed. Another option might be to have applicants pay as
they go. The cost of preparation of the initial TIF program is estimated as $x and that is
what they pay in advance. If the project proceeds to the next level the same thing hap-
pens. If the EDA is amenable to such an approach, staff can research it further and bring
back some suggestions to the June meeting.
FINANCIAL Unknown at this time.
IMPACT:
ALTERNATIVES: 1. Motion and Second directing City staff to amend the City of Prior Lake Business Sub-
sidies Policy to be consistent with the list of financial tools in the preceding agenda
item and reflecting the recommendations set forth herein. The draft will be submitted
to the city council for discussion together with the financing tools.
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2. Provide direction to staff and continue discussion at a future meeting.
RECOMMENDED Alternative 1.
MOTION:
ATTACHMENTS: 1. MN Statutes 116J.993 through 116J.995
2. City of Prior Lake Business Subsidies Policy (Current)
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1 MINNESOTA STATUTES 2412 116J.993
116J.993 DEFIIVITIONS.
SuUdivision 1. Scope. For the purposes of sectio»s 116J.993 to 116J.995, the terms defined
in this section have the mea�ungs given them.
Subd. 2. BeneTit c�ate. "Benefit datc" means tlie date that the recipient receives the business
subsidy. If the business subsidy involves the pucchase, lease, oi• donation of physical equiptuent,
then the benefit date begins tvhen the recipient puts the equipment into se�vice. If the business
subsidy is for improvements to property, then tl�e benefit date refers to the earliest date of either:
(1) �vhen the improvements are finisl�ed for the entire project; or
(2) when a business occupies the property. If a business occupies the pcoperty and the
subsidy granTor expects that other businesses tvill also occupy the same property, the grantor may
assign a separafe benefi# date for each business �vhen it first occupies tlie property.
Subd. 3. Business suhsidy, "Business suUsidy" or "subsidy" means a state ar local I
govecnment agency grant, contcibution of pecsonal property, rea( property, infi•astruc[ure, the '
}�rii�cipal amount of a loan at rates betow tl�ose commercially available to the recipient, any � �
reduction or de€erral of any tax or anSl fee, at�y guarantee of any payment under any loan, tease, or
other obligation, o�• any �referential use of government facilities given to a business.
The following forms of financial assistance are not a business subsidy:
(1} a basiuess subsidy of less thau $I50,000;
(2) assistance that is generalIy available to all businesses or to a ge�ieral class of sunilae
businesses, sueh as a line vf business, size, location, or simila►• general criEeria;
(3) public improveiuents to buildings or Iands owned by tl�e state or local government
that seive a public purpose and do t�ot principally benefit a single business or defined group of
businesses at the time the improvetnents are made;
(4) i•edeVelopmeut property polluted by contaminants as defined in section I 16J.552,
subdivision 3;
(S} assistance provided far the sole purpose af renovating old ar decaying building stock
or bringit�g it up to code and assistance provided for designated historic prese�vation disfricts,
provided tljat the assistance is equal to or less than 50 percent of the total cost;
(6) assistance ta provide job readiness and tcait�ing services if tlie sole purpase�of the �
assistance is to provide those servicas; �
(7) assistance for housing; �
(8) assistance for pollution control or abateuient, including assistance for a tax increment ;
financiug hazardous substauce subdistrict as defined under section 469. i7�, subdivision 23; I
{9) assistance for energy coiiservation;
{]d) tax reductions res�lting fi•orn coiiformity with fede��al ta� la�v;
(11) rvo��kers' compensatian anci unen�pto}�uient insurance; �
(I2) benefits derived fram regulatian; �
{13j ir►direct benefits derived fi•om assistance to educational institutions; ;
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CopS�right � 2012 by the 013ice of the Revisor of Statutes, State of Minnesota. All RigUts Reserved.
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2 MiNNESOTA STATUTES 2012 116J.993
(14) fi�nds fi�onl bonds al(ocated tander cltapter 474A, bonds issued to refiind otitstanding
bonds, and bo��ds issued for t[ie benefit of an oi•ganizatian desc�•ibed in section 501{c){3} of Ehe
Internal Revenue Code of I986, as amended tlu•ough Decembec 31, 1999;
(15) assistance for a collaboration behveeu a Min�iesota higher education institt�tion aud a
busuiess;
(16) assistance for a tax increment finaiicing soils condition dis#rict as defined uncler section
469, i74, sabclivision 19;
(17) redevelopment when fhe recipient`s investment in the purchase of the site and in site
prepacatian is 70 percent or more of the assessor's current yea�•'s estimated n�arket value;
(l8} general changes in tax incre4nent financing latv and other genei�al tax latv clianges of a
principal(y technical nature;
(19) federal assistance ttntil the assistance has been repaid to, and reinvested by, #he state or
tocal government agency;
(20) funds fi•om dock and tvharf bonds issued Uy a seaway poi•t autl�ority;
(2t) business loans and loan guarantees af $150,000 or tess;
(22} federal laan fimds provided tl�rough the Un'sted States Department of Comu�ei�ce,
Economic Development Adtninistration; and
{23} prope�•ty tax abaten�ents granted under section 469.1813 to property that is subject to
va(uation under Mintiesota Ru[es, cliapter 8 t OQ.
Subd. 4. Grantor. "G��antor° meat�s any state oi• tocal government agency ���ith the authority
to grant a business subsidy.
Subd. 5, Local govei•nment agcucy. "Local gover�uner�t agency" includes a statutory or
liome ntle charter city, housing aud redevelopment authority, ta���n, county, port atithority,
econotttic development authority, commttnity developme��t agenc}; nonprafit entiry created by
a local governtnent agency, a• any other entity created b}� or authoi•ized by a loca[ government
with autlZOrity to provide businass subsiclies.
Subd. 6. Recipieut, " Recipient" means any for-profit or nonprofit busu�ess ei�tity� that
receives a business subsidy. Only nonprofit et�tities witl� at least 100 full-time ec�uivalent positions
and �i�ith a ratio of highest to lotivest paid employee, tl�at exceeds ten to one, detertnined on the
basis af full-ti�t�e equivalent positions, are inoluc�ed in tliis definition.
Subd. 6a. Resiclence, "Resideiice" means the place wliere an individual has established a
per�nanent liome from tvliich tlte iiidivid��al has no present intention of moving.
Subd. 7. State govern�nent age��cy. "State government age�icy" ineans any state agency that
lias the authority to a�vard busu�ess subsidies.
Histo�y: 1999 c 243 a�712 s 1; 2000 c 482 s 1; 200�1 c 20G s 52; 1 Sp2003 c 3 ni�t 7 s 1; 200b
c2S9a17�fs1; 2008c366arrSs2
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Coppright � 2012 by the Office of the Itevisor of Statutes, State of Minnesota. A11 Rights Resen�ed. ,
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1 MINNESOTA STATUTES 2012 11SJ.994
li6J.994 REGULATING LOCAL AND 3TATE BUSINESS SUBSIDI�S.
Subdivision l. PuUlic purpose. A busiiiess subsidy must meet a public pt�rpose whieh may
inctude, but may not be litnited to, increasing the tax base. Job retention may only be used as a
public purpose ui cases where job Ioss is specific and demonst�•able.
Subd. 2. Devetopiug a set of criteria, A business snhsidy may not be granted until the
grantor has adopted criteria after a pttblic hearing for atvarding business s�thsidies tliat comply
«rith this sectior►. The c�•iteria may not be adopted on a case-by-case basis. The criteeia must
set specific minimutn requirecnents that recipients tnust meet in order to be eligible to receive
bnsit�ess subsidies. The criter[a must include a specific wage floor for the �vages to be paid for
the jobs eceated. The �vage floor may be stated as a specific dollar amount or may ise stated as
a formula that will generate a specific dolla�• amount. A grantar may deviate fi�om its criteria
by doctunenting in �vciting the reason for the deviation and altaching a copy of the document
to its next annaal repoi�t to the department. The commissioner of empioyment and econoinic
development may assist lacal govert�inent ageucies in developing ct•iteria. A copy of the ct�iteria
�nust be submitted to t(�e De��arEu�ent of Employment and Ecai�osnic Develop�nent alon� �vit1� the
first a�mual report follo�ving May 15, 2000, or «�ith the first anntial report after it l�as adopted
crite;•ia, n�hichever is earlier. Norivithstanding section 1163.993, suUdivision 3, clauses (1) and
(21), for the purpose of tl�is subdivision, "bt�siness suhsidies" as defined under section 116J.993
includes tlie following forms of financial assistance;
(1) a business subsidy of $25,000 or more; and
(2} business loans and ge�arantees af $75,000 or more.
Subd. 3. Subsidy age•eement, (a) A recipient must enter into a subsidy agreement �vith the
grantor of the subsidy that includes:
(1) a description of fhe s�ebsidy, i�iclading the amouut aud type of subsid3; a�id type of
district if the sttbsidy is tax incre�nent financing;
(2) a statement of the public pu�•poses foc tha subsicfy;
(3) measurable, specific, and tangibfe goals for the s�ibsidy;
(4} a description of the finaucial obligation of the recipient if the goals are not met;
{5) a statemant of ��s�hy the subsidy is needed;
(6) a conuniiment to continue operatians iti the jt�risdiction «�here the sttbsidy is used for at
least five years after the benefit date;
(7) the naine and address of the pace�rt corporation of tlie recipient, if any; and
(8) a list of ali financial assistance by all granto�s fa• the pi•oject.
{b) Business subsidies in tt�e farm of grants must 6e structured as forgivable loans. For
othet• types of busuiess subsidies, the agreement mitst state tt�e fair market value of tlie subsidy
to the recipient, including the valtte of conveying property at less iEian a fair market price, or
other in-kind henefits to the recipient.
(c) If a business subsidy benefits more tiian one recipient, the grantor must assig�i a
propoi�tion of the business su6sidy to each recipient tl�at signs a subsidy agreei�tent. The
p�•oportion assessed to each recipient must reflect a reasonable estimate of the recipient's shace
of the total benefits of the project.
Copyright Cr 20i2 by d�e Oflice of ttee Rev�sor of Statutes, Statc ofMinnesota. All Riglits Rescned.
2 MINNESOTA STATUTES 2012 116J.994
(dj Tlte stafe or local government agenc3T and the recipienf must b�th sign the ste6sidy
agree�uent and, if tlie gi�antor is a focal government agency, tl�e agreement must be approved by the
local elected governi�g Ufldy, except for the St. Paul Port Authoriry and a sea�vay poi� authority.
{e) Nohvitiistanding tlie provisioiz in paragraph (a), clause (6), a recipie�it may be authorized
to move from the jUrisdictiocz «�here the subsidy is used within tl�e five-ycar period after tiie
benefit date if, after a public hearing, the geantor approves thc recipient`s request to tnove. For tlie
�3urpase of ti�is paragraph, if the grantor is a state govecnment ageney other than the L•on Range
Resoui•ces and Rehabilitation Boacd; "jtu•isdiction" means a city or to��iiship.
Subd. 4, Wage and job goals. The subsidy agreeuient, in addition to any other goats, must
include: (1) goftls for ihe number of jobs created, tvhich may include sepa�•ate gaals for fhe
nttmber of part-time oi• fitll-time jobs, or, in cases �vhere job loss is specific and demonstrable, j
goals for the nu�nber of jobs retained; {2) wage goals for any jobs created or refained; and (3)
�vage goals fo�• any johs fa be enhanced ttv�ough increased �vages. Afler a public hearin�, if the
creatio�t or t�etei�tion of jobs is determined not to be a goal, the �vage and job goals inay be set
at zero. The goals for the nu�xiber of jaUs to be created or retained must i•esult in job creation oi�
rete��tion by the recipient �vitliin tlie �rantiug jurisdiction ovecall.
In addition to ofher specific goal time frames, the tivage and job gaals m�st contain specific
gaals to be attAined within ttvo years of fhe benefit dafe.
Subd. 5. Public uotice and heari��g. (a} Before granting a business subsidy that e�ceeds
$500,000 for a state government g�•antor and $150,400 for a local government grantor, the grantoc
must provide public notice and a hearing on the subsidy. A public heacing and notice under tl�is
subdivisiou is not required if a liea�'ing and notice oi� tlie subsidy is other�vise reyuu•ed by [a�v.
(b) Public notice ofa propased business subsidy under this subdivision by a state govecnntent
grantor, ather than the Iron Range Resottrces a�id Rehabilitation Board, must be pubfished in the
State Register, Public notice of a proposed business sltUsidy under this subdivision by a local
gavecnment grantor or the Iron Range Resources and Rehabilitation Board inust be publisfied in
a lacai netvspaper of general circulation. The ptiblic uotice must idei�tify the location at �vhich
��fortnation about the business subsid}; inciciding a summa�y of tlie terms of fhe subsid}; is
available. Pu�l ished notice sliot�ld he st�fficiently canspicuaus in size and placement to distinguisl�
the notice fi•om the surrounding text. The grantor m�FSt make t}ie it�formation available in pcinted
pape�• copies and, if possible, on the Internet. The go��ernment ageucy must pi•ovide at least a
ten-day notice for the public liea�•ing.
(c) The public natice must include the date, tune, ac�d place of the hearii�g. �
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(d) The public hearing hy a state goveri�ment grantor othe�• than the Iron Range Resources �
and Rel�abilitafion Boaed must be held in St. PauL
(e) If more fhan one nonstate grantor provides a business subsidy to the same recipient, the
noi�stafe grantors may dasignate one nonstate gr�ntor to iiofd a single public ]zea�•ing regarding tl�e �
business subsidies provided by all nonstate gcantors. For the purposes of tfsis paragraph, "nonstate
g�•antar" incltides the iron range resources ancl rehal�ilitation board. �
(fl Tlze public notice of any public uieeting ahout a Uasiness subsidy agreement, including �
those required by tliis subdivisian and by subdivisiou 4, must include notice that a person with �
residence in or the ow�ier of taxable property in the grantu�g j�trisdictio�� may file a written
con�p4aic�t �vitli tl�e grantor if the gra��tor fails to comply tvith sections ll6J.993 to l 16J.995,
Copyrigl�t �i 2012 by dte O1Tice of the Revisar of Statutes, State of Minnesota. All Rigl�ts Resen�ed. '
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3 MINNESOTA STATUTES 2012 l I6J.994
and tl�at no action may be filed against tiie g�•antor for tlie failure to comply unless a«�rittet�
complaint is filed.
Subd. 6. Failure to meet goals, (a) The subsidy agceenient m�ist specify the recipient's
abligation if the recipient does not fulfill the agreenient. At a minitnum, #he agreement must
require a recipient failitig to meet subsidy agreement goals to pay Uack the assistance pltis interest
to the grantor or, at the g�•a��tor's option, to tlie accouiit created unde;• sectian 116J.551 provided
that repaynient may be prorated to reflect partial fiilfillnient af goals. The i��terest rate n�ust be
set at no less tl�an the i�uplicit price deffatar for government consumption expenditures and
gcoss invest►nent for state and local govern�nents prepared by the Bureau of Economic Analysis
of tlie United States Department of Convnerce fa�• the 12-month period ending Macch 31 of the
previous year. The grantor, after a public 4iearing, niay extend fa• up to one year the period for
meeting the wage and job gaals under subdivisio�i 4 pro��ided i�i a subsidy agreement. A grantor
may extend the period for nieeting otlter goals under subdivision 3, par�graptj (a}, clause (3),
by docun�enting in �v�•iting tiie reason for the extension and a#taching a copy of the document
to its next annuai report to the departnient
(b) A recipient that fails to meet the terms of a sahsidy agreement may not receive a busit�ess
subsidy fC0111 8I1} gratitor for a period offive years fi•om the date of failure or tintit a recipient
satisfies its repayment obligatioti under this subdivisian, «�hichever occtirs first.
(c) Befo►•e a gi�Antor signs a business subsidy agreement, ttje grantor must clieck with the
compilation and summary report required by this section to dete��mine if the recipient is eligible to
receive a business suUsidy.
Subd. 7. Reports by recipients to gi•an#ors. (a) A business subsidy grantor musf monitor
the progress by the recipient in achieving agreesnent goals.
(b) A recipient must provide infortnation regarding goals and results far ttvo years after the
benefit date flr until the goals are met, «�l�icl�ever is later. If the goals at•e not met, tlie recipient
ii�ust continue ta pravide information on fhe subsidy until the subsidy is repaid. Tha inforniation
must be filed on forms developed by the conuvissioner in cooperation tvith representatives of
local government. Copies of the co�npleted forms n�ust be sent to the tocal government agency
that provided the subsidy a• to the coti�missione�• if #he grautor is a stRfe agei�cy. If the Iron Range
Resources ai�d Rehabilitation Board is the gcantor, the copies c�iust Ue sent to the board. The
report mi�st incltide:
(1) the type, public purpose, �nd amaunt of subsidies and type of district, if the subsidy
is tax incren�ent financing;
(2) the hourly wage of eacl� job created tvith separate bands of �vages;
(3) the sum of the hourl}r �vages and cost of liealtk� insurance provided by the employer tvith
separate bands af wages;
(4} the date the job and ��age goals «�iil be reached;
(5) a stafe��3ent of goals identifred in the subsidy agreement and an update on achievement
of those gaals;
{6) the location ofthe recipient prior to receiving tl�e business subsidy;
(7} the number of employees «�ho ceased to be emplayec3 by the recipient «rhen the recipient
relocated to become eligible for the busuiess subsidy;
Copy7ight � 2012 by tlie Office of t6e Rcvisor of Stalutes, State of IvFinnesoia. Atl Rights Resened.
4 MINNESOTA STATUTES 2012 11G3.994
($) �vhy ttje recipient did not cou�plete the project otttlined in the subsidy agreeinent at their
previous locatian, if f��e recepient tivas previously located at anothe�• site in Minnesota;
(9) the name and addcess of the parent corporfltion of the recipient, if any;
(f0} a list of alt fis�ancial assista��ce by all gra��tors for ilia project; and
(1I} other information thc con�t��issianer may reqttest.
A report must be filed tio later than March 1 of each year for the previous year, The local agency
and the Iro�i Range Resources and Rehabilitation Board must forward copies af the reports
received by recipients to the commissioner by April l.
(c) Financial assistance that is exc[uded from the definition of "business subsidy" by section
1167.993, subdivision 3, clauses (4), (5), (8}, and (16), is subject to the reparting reqtticements of
this subdivision, except that the report of the recipient �nust inciude instead:
{1) tl�e t�lpe, public purpose, anci atnoant of the financial assistance, and ty�e of district
if the assistatice is tax increment financing;
(2) pragress towards meeting goals stated in the assistance agreen�ent and the public purpose
af the assisfance;
(3) if ihe agreement incl«des job creation, the l�ourly zvage of each job created �vith separate
bands of �vages;
(4) if the agreen�ent inckides job creation, Hie sum of the hourly tivages and cas# af health
insucance provided by the eiuployer �vith se�arate bands of �vages;
(5) the location of fhe recipient �rior to receiving the assistance; and
(6) other infoematioi� tlie grantor reyuests.
(d} If the recipient does not submit its report, the Iocal government agencj� ittust mail tlie
reci�ient a�varning �vithin o�te week of the ceguired filiitg date. If, after 14 days of the postntarked
cfate of the warning, the recipient fails to provide a�•epo��t, the recipient must pay to tlie grantor a
penalty of $I00 for each s�tbseyuent dap until the repo��t is filecl. The �naximum penalty sl�all not
exceed $1,000.
Subd. $, Reports hy gra►itors. (a} Local go��e►��ment agencies of a Iocal govermnent �vith a
population of i�iore than 2,540 and state go�ernment agencies, regarclless of �vlietlier or not
they have awarded any 6usiness subsidies, must fi1e a repoi�t by April 1 of each year with #he
com4nissioncr. Lacal govet•iunent agencies of a local government �vifh a popalation of 2,500 or
less a�•e exeinpf feom filing this report if they ltave not awarded a business subsidy in the past
five years. The report �nust inclt�de a list of recipients that did not compfete the recipient report
reqaired under sEtUdivision 7 and a list of recipients that l�ave not niet their job and tvage goals
Z�'l��llIl C1V0 y ears and tha steps being taken to b2 '1rig t�iC1I1 IritO COI21p11ariCB O1' t01'CCOUp tlle 5UElSICI�
If the commissioner has nat received the s•eport by April 1 fi•om an entity required to report,
tlie con�inissioner shall issue a�vacning to tl�e govern�;ient ageney. If the eommissionee Itas still
not received tlie ceport by June 1 of that same year from an entit}� rec�uired to report, then that
government agency may not at��ard any business suUsidies until the report has been filed.
(b) Tlie report required under paragcaplj (a} is also rec�tured foc financiai assisfance of
$25,000 aud gceater that is excluded fi•om the definition of "busiuess stibsidy" by sectio�� 11 GJ.993,
subdi��ision 3, elause (1), and of $75,000 and greater tliat is excluded fi•otn the definition of
Cop}7ight � 2012 by the Otfice of the Revisor of StatEiles, State of Mimicsota. All Rights Resened.
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5 MINNESOTA STATUTES 2012 f 16J.994
° bL1S1Ii�SS SUUSid�' by section 116J,993, subclivision 3, clause (21). The report for the financia[
assistanca undec this paragrapf� must be completed �vithin one yeac of the gi•aating of the financia)
assistance. Tl�e report required for financial assistance under this paragraph inust include: ;
(1) the name ofthe recipient, its or ganizational st�vchire, its address and contact info�•mation,
and its indushy sectoi;
(2) a description af the amount and use of the financia[ assistance and the tatal p�•oject
Uudget, including a list of atl financial assistance by all grantors for fhe project and tlie private
sources of financial assistance;
(3) tl�e pub(ic purpose of the fivancial assistance, tlia job goais assaciated �vith both the
financial assistance and the total p�•oject in �vhich the fir►ancia[ assistance is included, tlie hourly
wage of each job created, and the cost of healtlt insttrance provided by the employer;
(4) tlie date the project will be cotnpleted;
{5) tl�e name aud address of the parent corporatian af the recipient, if any; and ,
(6) any other information the commissioner may request.
(c) Within oue year af completing a report tinder paragraph (b), the local gavernment
agency musE report to the cammissioner on progress in achieving tiie purposes aud goals under
paragcaph (b), clause (3).
(d} The commissione�• of enipioyment and economic development �uust provide inforn�ation
on reporting reyuirements to st�te and local government agencies.
Subd. 9. Compilation and snm�iiaty repor#. Tlie Depactment of En�ployn�et�t and
Economic Development n�ust publish a coi��pilation a�sd summa�y of fiie results of the reports
for tl�e previous t�vo calendar years by December 1 of 2004 aud every other year thereafter. The
eeports of the gavernment agencies to the de�artment and the compilation and summary �•eport
of tlie departuient must be made availal�ie to tlie public. The cojivuissioner must make copies
of a[I business subsidy re}�orts submitted hy 1oca1 and state gcanting agencies available on the
department's Web site 6y Octaber 1 of the yeflr in �vhich they �vere suhmitted.
The comntissioner must cvordinate the production of repo►�ts so that usefiil comparisons
across time periocis at�d acrass gra�itors can be made. The commissioner may add other
inforiY�ation to the report as tlie commissioner deeins necessary to evaluate business subsidies.
Among t�1e infortnatioti in the summa�y and compilation report, the commissioner must include:
(1 } tota� aiyiount of subsidies a�varded in each deveiopment region of the state;
(2) distribution of business subsidy amonnts by s'sze of the bt�su�ess su6sidy;
{3) distributiou of business subsidy amounts by tinie category;
(4) disfribution of subsidies by type and by public purpose;
(5) percent af ail business subsidies tliat reached their goals;
(6} percent af busiuess suUsidies that did not reach their goals by t�vo yeaes fi•om tl�e benefit
date;
(7) tata[ dollar �mount of business subsidies that did not ineet il�eir goals after tn�o years
fi•on� the benefit date; j
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Copyrigltt � 2012 �y the OEfice of t1�e Revisar of Stahrtes, State of Minnesola. Alt Rights Resen�ed. �
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6 MII�iNESOTA STATUTES 2012 116J.994
(8} percent of subsidies that did t�ot meet their goats and that did not receive repayn�ent;
(9) (ist of recipients that have faifed to meef the terms of a subsidy agreement in the past
five years and havs not satisfied their repayment obligations,
(10) number of part-time and fit11-tinte jobs �vithin separate bands of tvages for the entire
state and for each deveiopment cegion of the state;
(11) benefits paid �vithin separate bands of �i�ages for the entire state and for each
de�elopment region of the state; and
(12) n�.�mber af employees in the entire state aud iu each development region of the state
�i�lio ceased to be employed because their employers relocated to becon�e eligible for a business
subsidy.
Subd. 10. Compilation. The Depart►nent of Employment and Economic Deveiopment must
publish a compilation af grantmg agencies' cciteria policies adopted in the previous hvo calendar
years by Deceinber 1 of 2404 aud eve�y other year thereafter.
Subd. 11. �uforcemeut. (a) A peeson �vith �•esidence in or an o�vner of taaable pcoperty
locatecf in the jurisdiction of tlie grantor may Uring an action for equitAble relief acising out of
the failure of the grantor fo compIy with sections 116J.993 to 1 i6J.995. Tha cottct may a�vard a
prevailing pa�•ty in an action under this sttbdivision costs and reasonable attorney fees. �
{b) Prior to bringing an action, llie parfy must file a i�ritten co�np[aint �vitl� fhe grantar stating
fhe alleged violation and propos��ig a remedy. The grantor lsas up to 30 days fo reply to the
co�nplaint in t��riting and u�ay take action to comply ttrith sections 116J.993 to I IGJ.995.
(c) The �vritten complaint under this s�tbdivision foi• failt�re to compiy �vith subdivisions 1 to
5, must be filed Z��ith ihe grantor t�ithin I8� days a$er approval of the subsidy agreetnent ttndej•
sabaivision 3, pa��agi•apli (d). An acfion under fhis subdivision must be commenced tvithin 30
days follo�ving receipt of the grantor`s reply, or �vithin l80 days afte�• approva[ of tlie subsidy
agi•eement wider suUdivision 3, paragraph (d), tvhichever is later.
Histoiy: 1999 c 243 ar•t 12 s 2; 240� c�182 s 2-Il; 2U01 c 7 s 28; Z003 c 128 art 13 s
24-26; 1Sp2003 c 4 s 1; 200� c 206 s 29,25; IS�200S c 1 rn•t 4 s 23,24; 1S}i200S c 3 rn•t 7 s
2-5; 2008 c 366 a�7 5 s 3-5
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Copyright � 2012 by it►e Office of the ltevisor of Statutes, Statc of Mim�esotF►. All Rights Resen�ed.
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1 NllNNESOTA STATUTES 2012 116J.99S
II6J.995 ECONOMCC GRANTS.
An apprapriation rider in an appropriation to #he Dcpai�ttnent of Emp[oytnent and EcanoYnic
Devetopment that specifies tltat the appropriation be granted to a particttlar business or class of
businessas u�ust cantain a stateinent of the expected benefits associated i��ith tl2e grant, At a
minimuni, ttie statement mF�st include goals for the number of jobs created or ec�iianced, �vages
paid, and the tax revenue increases due to the grant. The tivage a�id job goals ntust contain specific
goals to be aftained �vithin hvo years af the benefit date. The statement inust specify the cecipient's
ob4igation if the recipient does not attain the goals. At a minimum, the statemen# tnust require
a recipient failing to meet the joh aud tivage goa(s to pay back tlte assistance plus interest to
the Depa��tment of Empioyment and Economic Development provided that �•epaynzeilt may be
prorated to reflect pactial fii[fillment of goals. The interest rate must be set at na less tlisu die
iu�plicit �ric$ deflator as ciefined tmder section 11GJ.99�4, subdivision 6. The legislature, after a
public hea►•ing, may extend for up to one year the pet•iad fof' meeting the gaals provided in the
statement.
Histary: 1999 c 2�3 at�f 12 s 3; 2000 c�82 s 12; 2001 c 7 s 29; 2003 c 128 af�t 13 s 27;
I 5�2003 c 4 s 1
Co���right � 2012 hy the O�ce of the Revisor of Stetuies, Statc of IvFii�nesota. All Rigl�ts Rcsened.
City of Prior Lake, Minnesota
Business Subsiciles Ao11cy
do ted: DAT :
Prior Lake City Council Oct. 18, 2004
mended:
City of Prior Lake
16200 Eagle Creek Avenue, S,E.
Prior Lake, MN 55372
(952) 447-9805
DN: 230703
CITY OF PRIOR LAKE
POLiCY AND PROCEDURES RELATING TO
THE USE OF BUS[NESS SU8SIDIES
I. PURPOSE
For fhe purposes of this document, the term "City" includes the Prior Lake City
Council and Economic Developmant Aufhority.
This palicy establishes guidelines and criteria regarding the use of business
subsidies, such as tax �ncremen# financing ("TIF"}, #ax abatement and other
business subsidies for private development projects wit�in the City of Prior Lake.
7hese guidelines and criteria are in addition to the requirements and iimitations set
forEh by pravisions of Minnesota Statute � 16J.993 {"MN Busir�ess Subsidy Law"),
and poiicies and guidelines with respect to any particular form of subsidy.
The fundamenta[ purpose of business subsidies in the City is to encourage
desirable deveIopment or redevelopment that would not otherwise occur "but for"
#he assistance, Business subsidies do not exist to enhance t�e re#urn on
investment for projects that would otherwise occur, but to facilitate development
fhat wouid not ofherwise occur.
Any developer fhat applies for business subsidy assistance may look ta these
guidefines for guidance regarding tha criferion the City wili use in evaluating an
application. However, whether a particular project meets the cri#erion and serves
the City's present needs shaf! be the City's decision. The guidelines are instructive
only and do not have the force of law. If the City finds that its presenf needs require
one projeck to be given priority over another, then the City's judgment will ultimately
prevail.
The City will provide subsidies and incentives in the most limited fashion possible to
assure that the project will proceed. Tha City reserves the rlght to approve or reject
projects on a case-by-case basis, taki�g into account esfabiished policies, specifc
project criteria, and demand on city services in relation fo the potentiaE benefits to
be achieved from a proposed project. This process is inherently subjective, and
whether a project receives a business subsidy may be as much a function of the
City's budget as the merit of #he project.
The City will work to maximize #he subsidies ta thvse projects fhat, in the Cify's
judgment, will address the most pressing public purpose. The ability to
demonstrate fhat the project will most likely achieve its stated goals and fherefore
address the most pressing public purpose wilf be the primary factor in determining
whether a project receives a business subsidy. Meeting these poficy guidelines
does not guarantee that a business subsidy will be awarded. �urfhermore, the
approval or denial of one project shouEd not be construed as sefting a precedent
that another similar projec# should be approved or denied. The City cannot possibly
approve a bus9ness subsidy for every wor�hy project. Whenever possib}e, it is the
City's intent #o coordinate the use of bcasiness subsicties wifh ather applicable taxing
jurisdictions.
DN: 230703 2
II. DEFfNiT10N OF "BUSINESS SUBSIDY°
The foElowing types af assistance in excess of $25,000.00 are defined as a
"business subs9dy" wi#hin the MN Business Subsidy Law:
• State and local government agency grants;
• Contributions of personal property, reai property� or infrastructure; �
• Any loan #hat has a principal amount in excess of $75,000 for wi�ich
interest accrues at a rate below those commercially avaiEable for loans
of that risk profile;
• Reductions or deferrals pf taxes or fees;
• Guarantees of any payment under any loan, lease, or other obilgatian;
• Preferential use flf government facllities.
In any case where the va[ue of the business subsidy is indeterminate, the City wili
make a good faith determination of the vafue of the subsidy,
Although only assistance in excess of $25,U00.00 €s subject to #he iaw, the City of
Prior Lake has a pollcy requi�ing all developers that request business subsidies to
corriply wlth the requirements imposed by the MN 8usiness Subsidy l�aw,
regardless of the size of the grant or loan. Therefore, although they are not sFrictly
s�bject to fhe act, developers requesting subsidies under $25,000.00 must agree to
comply wiEh all the requirements of the Act to be eligibls.
Ill. PUBLfC PURPOSE OBJECTIVES OF BUSINESB SUBSIDIES
In accordance with the MN Business Subsidy Law, the City will consider using
business subsidies to assist private develapmenf projects in an attempt to achieve
one or more of the fo[[owing public purpose objectives:
• To retain local jobs and/or increase the number and diversity of jobs
that offer sEable employment and/or attractive wages and benefits.
Because it is required by the Business Subsidy Law, if the stated
pubEic purpose is to retain jobs, fhere must be a showing that job loss i
in the affected area is specific and demanstrable. '
• To enhance and diversify the City of Prior Lake's #ax base.
� To encaurage additional unsubsidized private development in the
area, either directly or indirectly, through "spin ofP' development. In
this case, a business subsitty may be given to an "anchor" property in
the hopes that one business locating in the area will create a domino
affect and other unsubsidized businesses wiA locate to the area. I
� To achieve development on sites that would not be developed wifhout �
business subsidies asslstance. �
To remove blight andlor encaurage development of commerciaf and �
• industrial areas in the cify that resulf in higher qUality c�evelopmenf or j
redevelopment and private investment. �
• To offset increased costs of developmen# af specific praperties when �
the unique physical characterisfics of the site may otherwise preclude
private investment. i
DN: 230703 '
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IV. GENERAL p�LICI�S FOR 7HE USE QF BUSINESS SUBSIDIES
A. Buslness subsidy assistance wili be provided from the City, by a"pay-
as-you-go" note method, to the developer if the business subsidy is
tax increment financing or tax abatement. Requests for up front
flnancing will be considered on a case-by-case basis. However, fhe
MN Business Subsidies Law requires #hat any up front grant financing
be given in the form of forgivable Ioans. This means that any grants
will be documented as foans that will be forgiven if the specific goais
of the subsidy are met.
B. A developer requesting business subsidy assistance must
demonstrate, to the satisfaction of the City, sufficient cash equity
investment in the proj8ct as required within the City's policy for the
parficular form of subsidy. The City will assure that #he business wili
be adequately capitalized to guarantee it will continue as a going
concern for many years.
C. Business subsidies will not be pravided in c9rcumstances where Eand
and/or property price is demansfrated by the County Assessor to be in
excess of fair rr�ar#cet value. This would normally be where the
acquisitian price is more thart 10% in excess of market value as
• determined by an independent appraiser.
D. A developer must be ab(e to demonstrafe fo the Ci#y, or, if appficable,
to the underwriting authority, market demand for a proposed project.
E. Business subsidies wi(I not be given if the subsidy would create an
unfair and significant compefitive financial advantage over other
similar projects in the area.
F. Business subsidies will no# be givan to projects that wauld piace
extraordinary demands on cify infrastrucEure and services.
G. lf the City requests it, #he devefoper witl provide adequate financial
guarantees to ensure completion of the project, [ncfuding, but not
limited to: assesstnent agreements, letters of credit, cash escrows,
personal guaranties, mortgages, and other securities.
H. Each developer must be able to demonstrate to the City's satisfaction
an ability to construct, operate, and mainEain the proposad pro}ect
based on past experience, general repukation, and credit hisEory.
I. If requestecE by the City, or ifs consultants, the developer shall provide
sufficient market, ftnanciai, environmental, or other data relative to the
successful operation af fhe project.
J. Prolects receiving business subsidy approval from other affected
taxing jurisdictions wi(I be more fiavorably received by the Cify.
DN: 230703 4
V. GUI�ELIN�S FOR COMMERCIALIINDUSTRIAL BU3INESS SUBSIDIES
A. Busirtess subsi�ies wiil not be used for on-site retai( or service
business un(ess it is a redevelopment projec# that demonstrates fhat it
wil! result in a substantia[ increase in tax base and a significant
improvement in quality employment.
B. The project must be consis#ent with the City's Comprehensive Plan,
Land Use Plan, and Zoning �rdinances.
C. The project must resu(t in fhe retention of existing jobs that would be
lost "but for" the proposed development, or result in an increase anc[
diversification in local jobs thaf would not otherwlse occur, "but fo�' the
praposed developmenf,
D. The City will defermine #he s�ecific wage and job goals giving
consideration fo lhe partic�Ear form of the subsidy, nature of the
development, the purpose of the subsidy, local economic condifions
and similar factors. The recipient will have up fo two years to meet the
job and wage goals estabfished by the City. The minimum wage for a
job to be considered a new or retained job shall be $'i3.00 per hour,
exclusive of benefits. Deviations less than fhe wage floor will be
considered on a case-by-case basis and in accordance with fhe
requirements of the MN Business Subsidy Law.
E. Business subsidies wil[ not be given to commerciallindus#rial projects
or developers that have a his#ory of incansistent compiiance with
applicable environmental rules and regulations, or failure fo comply with
State and Federal Regulations regarding Equal Opportunity and
Occupational Safety Sfandards.
Vl. BUSINESS SUB$1DY AGREEMENT
� Each developer receiving a business subsidy, regardless of the size of that subsidy,
shail be subjec# to the subsidy agreement set farth by the MN Business Subsidy
Law and summarized below: �
A. A Statement of the Public Purpase. The recipisnt must state #he
public purpose the subsidy will address.
i
B. Goals af the Subsid . The recipient will state the specific and tangible �
wage goals that will be achfeved by the subsidy. Speci€ically, the i
agreement wiii outline the number of jobs created and fhe wage goals
for each of those jobs. A(fhough i# is �ossible that the job anci wage
goals may be set at zero, there must then be a public hearing fhat i
addresses what the public purpose for the subsidy will be.
C. Need. The recipient will sfafe in the Susiness Subsldy Agreemen#
why the subsidy is necessary and describe why the economic �
development would not occur wifhout fhe subsidy.
DN: 230703 � �
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D. Maintain Facility. The recipient agrees to main#ain and operate its
facility at the site where the subsidy is used for a period oi five years
after the date the subsidy is provided.
E. Failure to Comnlv Business. �ailing to comply with the subsidy
agreament will be subject to fines, repayment requirements, and be
deemec! ineligible by fhe state to receive any loans or grants from
public entifies far a period of five years.
VII. REPORTING REQUIREM�NTS ,
�ach developer receiving a i�usiness subsidy, regardless of tha siza of that subsidy,
shall be subject to fhe subsidy raporting requirements set forth by the MN Business
Subsidy Law and summarized below:
A. Responsibility to Report. Any deveioper receiv�ng a business subsidy will
provide information regarding the goals and results for two years after the
subsidy is granted, or un�il the goals are met, whichever is later. If the goals
go unmet beyond two years, then ttte devefoper wiif provide reports unfil the
subsidy is fully repaid.
B. Public Purnose. The developer will restate in each report the public purpose
of the subs9dy.
C. W_ ages. The developer wil( report on tt�e hourly wage of each job created by
the subsidy.
D. Benefits. The developer wiil report on the sum of hourly wages and any heafth
insurance provided by the developer.
E. Goal Date. Each year the develaper will reassess the date it expects to meet
its spacific job and wage goals and re�ort what that date is.
F. Undate. Each year the developer wi11 provide an informal update on the
likelihood that the goals will be achieved and indicate the progress made
during the ysar toward achieving the stated goals.
G. Recipient fnformaElon. �ach year the recipient develaper will report its name,
address of itseif and any parent carporafion. Furthermore, the report wi1[
include a summary of all financial assistance received from the Autharity or
any other organization and any other infarmation tha Commissioner of
Employmenf and Economic Developrr�ent may request.
Vlll, SUBSlDY APPi.ICATlON pROCESS AND PROCEDUR�
A. Application for business subsidies shali be made on #orms for the
particular form of assistance provided by the City of Prior lake
Community Deve(opment Director, or designee. A fee af $2,500.OQ
shail accompany any Tax Increment Finance, Tax Abatement, or grant
DN: 234703 6
request application to cover #he City's iniEial legal, administrative, and
planning costs.
B. Following a review by appropriate City Staff the application shall be
referred to either the Economic Development Authority or City Council
for further action.
C. The application for business su�sidies shafi request information
reguired within the City's policies on the particular form of subsidy,
including, but not limited to: a detaifed description of the project; a
preliminary site plan; the amount of business subs9dy requested; the
public purpose of the project; the number and types of jabs to be
created; the wages and benefits to be paid new employees; and
verlfiable funding sources and uses.
DN: 230703 �
C1TY OF PRIOR LAKE
ECONQMIC DEVELOPMENT AUTHORITY
TAX 1NCREMENT FINANCING POUCY
ADOPTE� BY THE CITY COUNCIL APRIL 16, 2001
PURPOSE
This policy is established to outline the City's position on the use of tax increment
financing {"7l�"} policy for private development. ThIs policy will be used as a guide
in processing and reviewing applications for tax increment financing assistance. In
accordance with the T!F policy, TIF requests must camply with applicable state
statutes. The City of Prior Lake is governed by the limitations established in
Minnesota Statutes Chapter 489.174, the Minnesota Tax Increment Financing Act,
for all districfs created after August 1 ti 1979.
PROGRAM GOAI.S
This program exists to achieve the foliowing goais:
1. To promote commercial, industriai and residential development under special
circumstances that would otherwise not occur.
2. To increase and diversify the iong-term tax base of the C)ty in order to ensure
fhe ability of the City to pravide adequate services €or its residents whiie
lessening reliance on the residentiai property tax.
3. To improve the City's economic vifality fhcough the creation and expansion of
empioyment apportunities.
4. To remove blight and encourage redevelapment in the commercial and
indusfrial areas of the City in order to encourage high levels of property
maintenance and private reinvestment in those areas.
5. To assure that projects are constructed and maintained at a level of quality
consistent with the goals of tlte Ci#y of Prior [.ake.
8. To retain iacaf jofas, increase the local job base and provide economic
diversity in that job base. The Program will only be used to retain jobs in
those situafions when job loss has been documented and specific and
demonsErable. �
7. Ta assist in achieving other goais contained in adopted public policies as
may be adopted by the City Council from time-to-time, including, without
limitation, quality design an� construction, energy conservation and
reductians in tt�e capitai and operating casts of government.
8. To provide high density hausing in the Downtown (C-3} zoning district and to
assist in the development of other housing in fhe community that is cons�stent
with City goa[s and policies and is generally not being provlded by the private
sector.
DN: 230703 � :
PROGRAM EUGIBI�.ITY CRITERfA
Qualified proJects should meet or exceed the follawing criteria to be elfgible fior Tf F
assistance. These criteria are being adopted to meet the requirements ofi
Minnesota Statutes Annotated § 116J.994 Subdivision 2, Meeting the threshold of
eligibility does not guarantee approval of the project by the City. Finai approval of
any project will be made by the City Council.
1. The project must be consistent with the City's Comprehensive Plan, zoning
ordinance and other applicable City ordinances as wel( as applicable s#ate
sfatutes.
2. The project shall meet at feast one of fhe Program Goals listed above.
3. The applicant must be wiliing to enfer into a development or redevelopment
agreement satisfactory to the City,
4. It musf be demonstrated that the project woufd not be financially feasibfe but
for the public assistance to be provided. The level af TIF financing shall be
reduced #o the lowest possible IeveL
�. The project must comply wit� all applicable environmental regulations.
6. The applicant must submit alE af the materials required in the application.
7. The app[icant must agree to provide surefy to the City to cover ali costs paid
by the increment, unless the project is a"pay-as-you-go" agreement. These
may include assessment agreements, letters af credit, personal deficiency
guarantees, guaranteed maximum cost contracts and minimum payment
agreements.
8. The applicant/developer must provide a minimum of 10% equity in the
project.
9 The City Caunci( will favor owner-occupied projects over projects that will be
leased.
10. For projsc#s in an Econorr�ic Development Disf�ict, a maximurr� of $10,004 of
public money wi(I be invested for each full-time equivalent position created or
retained.
11. For projects in Redevelapment Districts, those that remove or prevent bfight
wiii be favored.
12. For projects ln Redevelopment Dlsfricts, a rafio of faxes paid before and after
redevelopment of 1:2 is desired.
13. TIF wii( not be used in projects that would give: a significant competitive
financial advantage over similar projects in the area. Developers will provide
information to demor�strate ti�at this criterion is met.
14. The developer shou[d be able to provide market data, letters of intent or
#inancial statemenfs fhat illustrate the market potential or demand far the
project.
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The applicant for assistance must complete an Application for TIF Assistance
pursuant to the procedures ouflined in the Application. �
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PROJECT COSTS �LIGIBLE FOR TiF ASSISTANCE I
!'roject costs that qualify for T!F assistance include the following: i
� Property acquisition ;
• Land clearance �
• Relocafion and demolifion of structures �
• Site pre�arafion =
or�: a3ara� 2 ;
�
• Soils correcfion
• Removaf of hazardous wastes or remediation of slte contamination
� Installation of Utilities
� Consfructfon of public or private improvements
• Administrative costs directiy related to the identifred parce[s
� Design fees
• Surveys
• Environmental studies
� Relacation of building occupants
• Rehabilitation of structures
• Special assessments
• Ofher costs allowed by Minnesota Statutes
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DN: 230703 s
3