HomeMy WebLinkAbout08 19 2013 EDA rept 4A
4646 Dakota Street SE
Prior Lake, MN 55372
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: August 19, 2013
AGENDA #: 4A
PREPARED BY: Dan Rogness, Community & Economic Development Director
AGENDA ITEM: LOCAL BUSINESS INCENTIVES POLICY
DISCUSSION: Introduction
The purpose of this agenda item is to review additional changes to the proposed
Local Business Incentives Policy for Prior Lake. At the last meeting, the EDA di-
rected staff to make additional changes based on EDA discussion; this policy would
complement the Prior Lake Business Subsidies Policy.
History
The EDA previously directed staff to prepare draft amendments to the Business
Subsidies Policy; specific direction included amendments to ensure compliance with
State Statutory requirements and the elimination of unnecessary reporting require-
ments. The City Council then directed the EDA to hold a public hearing on the
revised Business Subsidies Policy as directed by the “Business Subsidy Act” (Min-
nesota Statutes, Section 116J.993-995).
Since the Business Subsidies Policy applies to subsidies of $150,000 or more, the
EDA felt that a companion city policy should address all other local business incen-
tives. The local policy would address many of the same factors, such as agree-
ments, reporting and criteria for assistance.
Current Circumstances
On July 15, the EDA held a public hearing on proposed amendments to the Prior
Lake Business Subsidies Policy, which was then recommended to the City Council.
The council tabled action on August 12 in order to review the proposed Local Busi-
ness Incentives Policy at the same time as the Subsidies Policy.
Staff’s proposed changes to the draft Business Incentives policy reviewed by the
EDA in July include the following:
1. The definition of “Incentive” is clarified to include a minimum/maximum
amount, and to identify what may be considered an incentive in the case of
below-market leases and loans. Non-profit entities would not be eligible for
local business incentives.
2. An overall reduction is proposed to the policy’s requirements related to job
goals and wage levels, ongoing operations in Prior Lake, and annual report-
ing requirements.
3. A recommendation is made to shorten the EDA’s annual report by only listing
the recipient businesses, and the type and amount of incentives. At a mini-
mum, this report shall be provided to the public on the City’s website.
Conclusion
The EDA will have reviewed two business subsidies/incentives policies that cover
the full spectrum of business financial assistance. Both policies have similar stand-
ards and requirements, but they have different results. The Business Subsidies
Policy meets state statute requirements for subsidies of $150,000 or more while the
Local Business Incentives Policy meets local standards.
ISSUES: This policy helps guide local decisions for public financial assistance to businesses
for economic development competition purposes while trying to be transparent. At
the same time, the EDA and city council probably do not want to add needless “red
tape” to the economic development process.
If the EDA approves this policy, it will be forwarded to the city council for considera-
tion in tandem with the Business Subsidies Policy.
FINANCIAL Unknown at this time.
IMPACT:
ALTERNATIVES: 1. Approve the draft Local Business Incentives Policy and submit to the City Coun-
cil for its review and adoption.
2. Remove from the Consent Agenda and make additional changes.
3. Remove from the Consent Agenda, table this item, and direct staff to return with
additional information.
RECOMMENDED Staff recommends Alternative #1
MOTION:
ATTACHMENTS: Local Business Incentives Policy (with amendments)
2