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HomeMy WebLinkAbout05_21_24_EDA packet CITY OF ST. JOSEPH St. Joseph Economic Development Authority Tuesday, May 21st, 2024 12:00 PM 75 Callaway St E (St. Joseph City Hall) ** The meeting will also be offered remotely via Zoom** 1.Call to order 2. Public Comments 3. Approve Agenda 4. Consent Agenda a. Minutes – April 16th b. Financial Report – April 5. Business Subsidy and TIF/Abatement Policy updates 6.General Business updates 7.Board Member Announcements 8. Hansen and Company Tour – The EDA Board will be leaving at 12:20 to conduct a site tour at Hansen and Company located at 30701 Pearl Dr St. Joseph. Zoom Meeting Information Join Zoom Meeting https://us06web.zoom.us/j/82698897944?pwd=b1RaeE5IenZ0L0Z0ejF4UWhvWUVidz09 Meeting ID: 826 9889 7944 Passcode: 725385 Apr 16th, 2024 Page 1 of 2 Pursuant to due call and notice thereof, the St. Joseph Economic Development Authority met on Tuesday, Apr. 16th, 2024 at 12:00 PM. Members Present: Board Members Rick Schultz, Joe Bye, Larry Hosch via Zoom, Kevin Kluesner, Dale Wick Members Absent: None City Representatives Present: Nate Keller, Community Development Director, David Murphy City Administrator, Lori Bartlett Finance Director Others present: Joe Walz Schultz called the St. Joseph Economic Development Authority meeting to order at 12:00 PM Public Comments Jow Walz spoke on his property and continued interest he is receiving. Walz also asked about a right-way in and out. Board commented that the County controls the intersections. Agenda Approval: Kluesner made a motion to approve the agenda as presented; seconded by Wick and passed unanimously by those present. Consent Agenda: Kluesner made a motion to approve the consent agenda as follows; seconded by Bye and passed unanimously by those present. a. Minutes – Mar. 19th b. Financial Report – As of March Business Façade Grant College and Minnesota 109 Ash St W Overview of the request was provided by Keller. This request comes forward after direction from the EDA at the March meeting. Wick made a motion to approve the Façade grant up to a maximum of $2000; seconded by Kluesner and passed unanimously by those present. Abatement Request – Hansen and Company Keller presented the Abatement request. Adam Hansen the owner of Hansen and Company is intending to construct an 82,500 S.F. facility in the Industrial Park off County Road 133. Project would also eventually include a 6,000 S.F. area for offices. Approximately 61 jobs would be retained with about a dozen jobs created over the next several years. Keller explained any job retention of over 26 jobs is classified as a 5 out of 5 on the City’s current Subsidy policy. Hansen has been located at his current location off Pearl Dr since 2005. A gap of at least $284,816 has been identified. Intent for the Abatement would be a pay as you go and agreement would be set up as a nine-year Abatement. Questions asked on: County or School participation, why Abatement preferred over TIF, and how the pay as you go works. Keller responded that no County or School participation would occur, Abatement fits into the overall timeline better and fits with the project’s intent better, and the pay as you go works by Hansen paying his taxes once or twice a year in full, then the city reimburses Hansen once or twice a year the city portion of his taxes. Northland Securities is currently drafting the Abatement and Subsidy agreements with intentions to present the agreements and conduct the public hearing at the May 6th Council. Keller asked the EDA for a motion on the Abatement request. Murphy and Keller clarified the EDA is tasked with making a recommendation based on the TIF/Abatement Policy and Criteria and not the estimated Abatement numbers. Wick made a motion to recommend approval on the Abatement application as presented; seconded by Bye and passed unanimously by those present. General Business/Development update Keller provided updates on the Synergy Site, business retention visit with Executive Express, intentions to update the city’s Business Subsidy Policy and TIF/Abatement Policy, Boutique hotel, and ILT Academy’s Start-up Connect events on Wednesdays. Kluesner asked questions on the: S.A., Casey’s gas station, and Wedding/Event Center. Apr 16th, 2024 Page 2 of 2 Adjourn: Kluesner made a motion to adjourn the meeting at 12:22 PM, seconded by Bye and passed unanimously by those present. Minutes by: Nate Keller Community Development Director EDA Agenda Item ________________________ MEETING DATE: May 21, 2024 AGENDA ITEM: April Finance Reports SUBMITTED BY: Finance BOARD/COMMISSION/COMMITTEE/COUNCIL RECOMMENDATION: N/A PREVIOUS EDA ACTION: EDA approved three façade grants; waiting to be reimbursed. BACKGROUND INFORMATION: Enclosed you will find the reconciled financial reports through April 30, 2024. The cash position on April 30, 2024 is $10,279. Of this amount, $58,447 is set aside for EDA program expenditures. This leaves an undesignated cash deficit of $48,168. The EDA is mainly funded with property taxes. The first half property taxes will be received the end of June and beginning of July. There is a $9,000 transfer to CVB for Joe Town Blocks. All the expenditures will run through fund 220- CVB. I also included a revenue/expense tracking spreadsheet for Joe Town Blocks in the packet. Most of the activity will be posting in June for the event. The other funds reported include the TIF funds, Lodging Tax, DEED CDAP Housing Grant reimbursement and the Revolving Loan fund. There are three revolving loans to Krewe and Flour to Flower Bakery; St. Joseph Food Co-Op; and Jupiter Moon Ice Cream. BUDGET/FISCAL IMPACT: For Information Only ATTACHMENTS: Financial Summaries – EDA Funds REQUESTED BOARD ACTION: Consider acceptance of the April 2024 financial reports. St. Joseph Economic Development Authority Summary Treasurer's Report - Fund 250 April 30, 2024 Fund 250, EDA Balance as of December 31, 2023 (unaudited)45,824.43 Year to Date Revenue:Budget YTD Actual Interest Earnings 500 616.32 TIF/MIF Deposit - - State of Minnesota Grant - - Abatement Reimbursement (School District) 9,385 - Ad Valorem Taxes 120,800 - Total Revenue 130,685 616.32 Year to Date Expenditures by Object: Board Stipends 1,050 (360) Staff Salaries/Training 57,745 (17,989) Software Support/Office Supplies/Postage 1,610 (1,271) Professional Services 1,000 (95.00) Telephone 1,435 (446.67) Greater St. Cloud Development Investment 5,000 (5,000.00) Dues and Memberships (Other) 295 - Advertising 150 - Abatement Payments (Country Manor) 36,400 - Marketing 500 - Computers 500 - EDA Programs 30,000 (2,000.00) Transfer to Other Funds - (9,000.00) Total Expenses 135,685 (36,161.51) Fund Summaries as of April 30, 2024 (unreconciled): EDA Net Position - Fund 250 - (unaudited), cash balance 10,279.24 Designated for Capital Programs 58,446.96 Undesignated (48,167.72) TIF 4-1 Fortitude Senior Apts Balance - Fund 253 29,885.59 TIF 2-1 Millstream Shops and Lofts Balance - Fund 257 43,496.75 TIF 2-3 Bayou Blues & Alley Flats Balance - Fund 259 143.26 Lodging Tax Balance - Fund 220 26,441.01 DEED CDAP Housing Grant Balance - Fund 225 56,448.21 Revolving Loan Balance - Fund 251 536,021.73 Designated for Revolving Loan Program 68,967.82 Designated for Economic Development 467,053.91 2024 Capital Expenditures General Fund Capital Improvement Plan ‐ EDA Final adopted December 4, 2023 12/31/2023 Available through 4/30 through 4/30 Project Project Reserve Budget Grants/Aids Spent 2024 Department Account Code Number Equipment Balance 2024 2024 2024 Balance EDA 250-46500-582 EDA-1401 Computer Software 4,306.74                      ‐                                    4,306.74           EDA 250-46500-588 EDA-1402 Business Development 40,140.22                   25,000.00                        11,000.00        54,140.22         RLF 251-46500-588 EDA-1402 Business Development 427,053.91                  ‐                                    427,053.91      467,194.13                 25,000.00                         ‐                      11,000.00        481,194.13      TOTAL EDA CIP 471,500.87                 25,000.00                          ‐                      11,000.00        485,500.87      BFA Grants Awarded, not paid as of 4/30/2024:Grant Match $ College & Minnesota, Quonset Building 106 2nd Ave NW front façade $2,000 Hudson Properties, new Gift Shop 13 Minnesota St W front façade $2,000 College & Minnesota, WR Home Company 33 1st Ave NW front façade upgrades $2,000 $9,000 transferred for Joe Town Blocks Project CITY OF ST JOSEPH BALANCE SHEET APRIL 30, 2024 FUND 250 - EDA ASSETS 250-10199 CASH 10,479.24 250-15500 DUE FROM OTHER FUND 3,800.00 TOTAL ASSETS 14,279.24 LIABILITIES AND EQUITY LIABILITIES 250-20200 ACCOUNTS PAYABLE 5,000.00 TOTAL LIABILITIES 5,000.00 FUND EQUITY 250-25310 UNASSIGNED FUND BALANCE 44,824.43 REVENUE OVER EXPENDITURES - YTD ( 35,545.19) TOTAL FUND EQUITY 9,279.24 TOTAL LIABILITIES AND EQUITY 14,279.24 CITY OF ST JOSEPH REVENUES WITH COMPARISON TO BUDGET FOR THE 4 MONTHS ENDING APRIL 30, 2024 EDA PERIOD ACTUAL YTD ACTUAL BUDGET UNEARNED PCNT FOR ADMINISTRATION USE ONLY 33 % OF THE FISCAL YEAR HAS ELAPSED 05/16/2024 03:13PM PAGE: 1 ECONOMIC DEVELOPMENT AUTHORI 250-46500-31010 CURRENT AD VALOREM TAXES .00 .00 221,070.00 221,070.00 .0 250-46500-36210 INTEREST EARNINGS .00 616.32 500.00 ( 116.32) 123.3 250-46500-36301 TAX ABATEMENT REIMBURSEMENT .00 .00 9,385.00 9,385.00 .0 TOTAL ECONOMIC DEVELOPMENT A .00 616.32 230,955.00 230,338.68 .3 TOTAL FUND REVENUE .00 616.32 230,955.00 230,338.68 .3 CITY OF ST JOSEPH EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 4 MONTHS ENDING APRIL 30, 2024 EDA PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT FOR ADMINISTRATION USE ONLY 33 % OF THE FISCAL YEAR HAS ELAPSED 05/16/2024 03:13PM PAGE: 2 ECONOMIC DEVELOPMENT AUTHORI 250-46500-101 EDA SALARIES 3,184.56 13,134.04 40,510.00 27,375.96 32.4 250-46500-103 EDA LEGISLATIVE BODIES .00 360.00 1,200.00 840.00 30.0 250-46500-121 PERA CONTRIBUTIONS 233.01 986.77 3,040.00 2,053.23 32.5 250-46500-122 FICA CONTRIBUTIONS 237.22 969.96 2,350.00 1,380.04 41.3 250-46500-123 DEFERRED COMP-EMPLOYER 17.50 78.75 455.00 376.25 17.3 250-46500-125 MEDICARE CONTRIBUTIONS .00 .00 550.00 550.00 .0 250-46500-130 H S A- EMPLOYER CONTRIBUTION .00 411.25 825.00 413.75 49.9 250-46500-131 HEALTH INSURANCE 464.76 2,090.77 6,720.00 4,629.23 31.1 250-46500-132 DENTAL INSURANCE 31.52 141.84 505.00 363.16 28.1 250-46500-133 LIFE INSURANCE 2.33 11.65 30.00 18.35 38.8 250-46500-134 DISABILTY INSURANCE 27.12 135.60 405.00 269.40 33.5 250-46500-151 WORKERS COMP. INSUR. PREM. .00 .00 225.00 225.00 .0 250-46500-171 CLOTHING ALLOWANCE .00 .00 20.00 20.00 .0 250-46500-200 OFFICE SUPPLIES .00 .00 200.00 200.00 .0 250-46500-300 PROFESSIONAL SERVICES .00 .00 1,500.00 1,500.00 .0 250-46500-303 ENGINEERING FEE .00 .00 1,000.00 1,000.00 .0 250-46500-304 LEGAL FEES 95.00 95.00 500.00 405.00 19.0 250-46500-310 SOFTWARE SUPPORT .00 1,271.26 3,415.00 2,143.74 37.2 250-46500-321 TELEPHONE 113.52 446.67 1,325.00 878.33 33.7 250-46500-328 MARKETING .00 .00 520.00 520.00 .0 250-46500-331 TRAVEL & CONFERENCE EXPENSE .00 27.95 650.00 622.05 4.3 250-46500-340 ADVERTISING .00 .00 100.00 100.00 .0 250-46500-433 DUES & MEMBERSHIPS 5,000.00 5,000.00 5,295.00 295.00 94.4 250-46500-582 COMPUTER SOFTWARE .00 .00 500.00 500.00 .0 250-46500-588 EDA PROGRAMS 2,000.00 2,000.00 25,000.00 23,000.00 8.0 250-46500-622 TIF/ABATEMENT PAYMENTS .00 .00 134,115.00 134,115.00 .0 TOTAL ECONOMIC DEVELOPMENT A 11,406.54 27,161.51 230,955.00 203,793.49 11.8 OTHER FINANCING USES 250-49300-720 TRANSFERS TO OTHER FUNDS 9,000.00 9,000.00 .00 ( 9,000.00) .0 TOTAL OTHER FINANCING USES 9,000.00 9,000.00 .00 ( 9,000.00) .0 TOTAL FUND EXPENDITURES 20,406.54 36,161.51 230,955.00 194,793.49 15.7 NET REVENUE OVER EXPENDITURES ( 20,406.54) ( 35,545.19) .00 35,545.19 .0 CVB 2024 Financial Summary As of April 30, 2024 Beginning Fund Balance 1‐1‐24 (Unaudited)20,498.09$               Budget YTD Rev Customer 2024 2024 Interest Earnings 150.00$                         165.99$                     T‐shirt/Hats/Merchandise Sales 1,000.00                        300.00                       Grants ‐                                   ‐                             Transfer from EDA ‐ Joetown Blocks ‐                                  9,000.00                    Rodeway Inn Lodging Tax 10,500.00                      447.29                       CSB Lodging Tax 4,100.00                        7.65                           Estates B&B Lodging Tax 1,100.00                        445.49                       16,850.00$                    10,366.42$               Budget YTD Exp Vendor 2024 2024 Professional Services ‐ Manage Social Media (Bruno Press) 9,000.00$                      3,000.00$                 Travel & Conference Expenses ‐$                                 ‐                             IT Services ‐ Website/Social Media/QR Code Reader 740.00                             ‐                             Visitor's Bureau ‐ Rubinski Works ‐ Videos ‐                                   ‐                             Visitor's Bureau ‐ Photos ‐                                   ‐                             Community Programs ‐ Shop Small/Winterwalk/Feb/June 1,200.00                         ‐                             Community Programs ‐ Joetown Blocks ‐                                   ‐                             Visitors Bureau Prizes ‐ Swag Give‐Aways/Prizes 200.00                             ‐                             Marketing ‐ SHRPA 2,845.00                         ‐                             Marketing ‐ Campaigns 1,000.00                         ‐                             Visitor's Bureau ‐ Merchandise (Krillan/Rambow) 1,000.00                         ‐                             Advertise ‐ Think Tourism USA 775.00                            825.00                       Advertise ‐ MN Trails Magazine 780.00                            598.50                       Advertise ‐ Newcomer Service Magazine 200.00                             ‐                             17,740.00$                    4,423.50                    Ending Cash Balance 4‐30‐24 (Unaudited)26,441.01$               E Co Tip Act ACTUAL EXPENSES JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC YEAR Ent Employee Costs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YEAR Police Security $0.00 Fire Fighters $0.00 Public Works Staff $0.00 Subtotal $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Ent Contracted Services/Supplies Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YEAR Porta John's $0.00 Dunk Tank $0.00 Water for Tank/Barricades $0.00 Band 1 $0.00 Band 2 $0.00 Band 3 $0.00 Car Show Awards $0.00 Kids' Event Items $0.00 Raffle Tickets/Prize $23.96 $23.96 Tents $0.00 Subtotal $0.00 $0.00 $0.00 $23.96 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $23.96 Ent Marketing Costs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YEAR T-shirts $0.00 Flyers $50.13 $50.13 Postcards $0.00 Social Media $0.00 Photographer $0.00 Video $0.00 Subtotal $0.00 $0.00 $0.00 $0.00 $50.13 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $50.13 Ent Other Fees Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YEAR Special Event Fee $0.00 $0.00 Liquor License Fee $0.00 $0.00 Subtotal $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tot TOTAL Planned Expenses Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year Monthly Actual Expenses $0.00 $0.00 $0.00 $23.96 $50.13 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $74.09 TOTAL Actual Expenses $0.00 $0.00 $0.00 $23.96 $74.09 $74.09 $74.09 $74.09 $74.09 $74.09 $74.09 $74.09 go placeholder is in this cActual Expenses 220-46500-307Joe Town Blocks 2024 E En Tip Pla PLANNED REVENUES JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC YEAR Ent Revenue Sources Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YEAR Transfer from EDA $9,000.00 $9,000.00 Raffle 50/50 $5,000.00 $5,000.00 $10,000.00 $20,000.00 T-Shirt Sales $0.00 $625.00 $625.00 $1,250.00 Other - Vendor Registration Fees $500.00 $500.00 Total Revenues $0.00 $0.00 $0.00 $14,500.00 $5,625.00 $10,625.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $30,750.00 Pla ACTUAL REVENUES JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC YEAR Ent Revenue Sources Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YEAR Transfer from EDA $9,000.00 $9,000.00 Raffle 50/50 $0.00 T-Shirt Sales $0.00 Other - Vendor Registration Fees $0.00 Total Revenues $0.00 $0.00 $0.00 $9,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $9,000.00 Pla REVENUE VARIANCE JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC YEAR Ent Revenue Sources Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YEAR Transfer from EDA $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Raffle 50/50 $0.00 $0.00 $0.00 ($5,000.00) ($5,000.00) ($10,000.00)$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($20,000.00) T-Shirt Sales $0.00 $0.00 $0.00 $0.00 ($625.00) ($625.00)$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($1,250.00) Other - Vendor Registration Fees $0.00 $0.00 $0.00 ($500.00)$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($500.00) Total Revenues $0.00 $0.00 $0.00 ($5,500.00) ($5,625.00) ($10,625.00)$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($21,750.00) Joe Town Blocks 2024 Detailed Revenue 220-46500-34410 go placeholder is in this c Tip: HOW TO USE THIS TEMPLATE Input data in the white cells on the PLANNED EXPENSES and ACTUAL EXPENSES worksheets, and the EXPENSE VARIANCES and EXPENSE ANALYSIS will be calculated for you. If you add a row on one sheet, the other sheets need to match. EDA Agenda Items 5 - 8 MEETING DATE: May 21st, 2024 AGENDA ITEMS: 5 - 8 PREVIOUS BOARD ACTION: 5 - none 6 – updates provided every month 7 – none 8 – N/A BACKGROUND INFORMATION: 5 – Business Subsidy and TIF/Abatement Policy updates Staff have worked with Northland and Taft law on updates to the city’s Subsidy policy. The city needs to update the policy to be in align with State Statutory requirements. Updates include: • Adding wage goals (includes pay and wage amounts) • Adds Appendix with definitions • Adds new Pre-application and application forms • Eliminates TIF scorecard features Staff is looking for feedback on the policies. The intent is to bring back a formal clean version in June for consideration to adopt. 6 – General Business updates Updates will be provided for the Synergy Site, Joetown Blocks, Hansen and Company, Industrial Park development, Boutique hotel BUDGET/FISCAL IMPACT: None ATTACHMENTS: Existing Subsidy Policy Existing TIF/Abatement Policy Drafted Subsidy Policy Drafted TIF/Abatement Policy Drafted TIF scorecard REQUESTED BOARD ACTION: 5 – feedback on drafted policies 6 – none just general updates provided 8 – Board will leave for Hansen and Company tour at 12:20 Á CITY OF ST. JOSEPH 21 First Avenue NW Business Subsidy Policy P.O. Box 668. City of St. Joseph, Minnesota St. Joseph, MN 56374 320) 363- 720 I This PoHcy is adopted for purposes of the Business Subsidies Act (the "Acf'), which isFax: 363-0342 Minnesota Statutes, Section 116J.993 to 116J.995, Terms used in this Policy are 1t8~ intended to have the same meaning as used in the Act, and this Policy shall apply only with respect to subsidies granted under the Act if and to the extent required thereby. cllU¡Ii:I;¡" While it is recognized that the creation of good paying jobs Îs a desirable goal that MAYOR benefits the community, it must also be recognized that not all projects assisted with Kenneth J. Hiemenz subsidies derive their public purpose and importance solely through job creation. In addition, the imposition of high job creation requirements and high wage level may be unrealistic and counter-productive in the face of larger economic forces and the financial CU';](I\f and competitive circumstances of an individual business. A":'IIi'ISTHIT()I( Clli Schl1lidt With respect to subsidies, the determination of the number of jobs to be created and the wage level thereof shall be guided by the following principals and criteria: COUNCILORS 1) Each project shaH be evaluated In a case-by-case, recoglllzlIlg its Importance Bob Loso and benefit to the community from all perspectives, including created and Cory Ehlert retained employment positions.Ken Twit Mary Niedcnfllcr 2) If a particular project does not involve the creation of jobs, but is nonetheless found to be worthy of support and subsidy, it may be approved without any specific job or wage goals, as may be permitted by applicable law. 3) In cases were the objective is the retention of existing jobs, the recipient of the subsidy shall be required to provide reasonable demonstrable evidence that the loss of those jobs is imminent. 4) The setting of wage and job goals must be senSitive to prevailing wage rates, local economic conditions, external economic forces over which neither the grantor nor the recipient of the subsidy has control, the individual financial resources of the recipient and the competitive environment in which the recipient's business exists. 5) Because it is not possible to anticipate every type of project which may in its context and time present desirable community building or preservation goals and objectives, the governing body must retain the right in its discretion to approve projects and subsidies which may vary from the principles and criteria of this Policy. Adopted bY~ ~~.{ ~Date of Adoption: \ 0 -::+ \ - C\ C\ Date of Public Hearing: \ 0 - ð \ - C\ G\.. PROPOSED BUSINESS ASSISTANCE POLICY CITY OF ST. JOSEPH, MINNESOTA Section 1: Purpose The purpose of this policy is to establish the City's standards with regard to business assistance. The City supports the concept of public/private partnerships as a means of: encouraging continued economic diversity; maintaining a viable tax base; expanding existing business and industry; attracting quality and compatible business and industry; enhancing and retaining employment opportunities; and, maximizing the return on municipal investments such as infrastructure, utilities and services. The standards herein are req uired by and in compliance with Minnesota Statutes 116J. 993- 995 as amended. Section 2: Definitions For the purposes of this policy, terms herein not specifically defined shall have the meanings given to them in MN St. 116J993. A. Benefit Date means the date that the recipient receives the business assistance e.g. when equipment put into service) (e.g. when improvements are finished or a business occupies the property). B. Business Assistance means a state or local government agency grant, contribution or 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 financial guarantees or any preferential use of government facilities given to a business. Exceptions to this standard include those identified in MN. Stat. 116J.993, Subd. 3 items 1-18. Section 3: Eliqible Business Assistance Uses The City may consider business assistance to support private development in circumstances where the proposed project meets a minimum of one of the following uses and new full-time equivalent positions are paid no less than 100% of the median wage for the applicable general occupation classification within the St. Cloud Metropolitan Statistical Area, as defined by the Minnesota Workforce Center's most current report. A. To redevelop blighted or under-utilized areas of the community. B. To encourage redevelopment in the City's commercial and industrial areas to stimulate high levels of property maintenance and private reinvestment in those areas. C. In conjunction with another business assistance use as provided for in this section to increase the tax base. DRAFT - Page 1 Municipal Development Group, 2002 EXISTING POLICY D. To retain jobs wherein job loss is imminent and demonstrable. E. To increase the number and diversity of the employment base. F. To encourage additional unsubsidized private development in the area. G. To offset increased costs of redevelopment (i.e. contaminated site clean-up), over and above those costs that a developer would normally incur. H. To facilitate the development process and to achieve development on sites which would not be developed without this assistance. To meet other uses of public policy including promotion of quality urban design, quality architectural design, energy conservation, decreasing the capital and operating costs of local government, etc. Section 4: Assistance Agreement A. A recipient of a business assistance must enter into an agreement with the grantor of the assistance that includes: 1. The amount and type of assistance. The type of district if assistance is tax increment financing. A list of financial assistance by all grantors for the project. 2. A statement(s) of public purpose (from Section 3), including a statement of why the assistance is needed. 3. Goals for the assistance, including but not limited to, wage goals for the number of full time equivalent jobs created or retained within two years of the benefit date. 4. A statement as to the recipient's obligation if the recipient does not fulfill the agreement. At a minimum the agreement must require a recipient failing to meet assistance agreement goals to pay back the assistance plus interest to the grantor provided that repayment may be prorated to reflect partial fulfillment of goals. 5. The name and address of the recipient (and parent corporation where applicable) and, a description of the financial obligation of the recipient if the goals are not met. 6. A commitment to continue operations at the site where the assistance is used for at least five (5) years after the benefit date. 7. A statement as to the proposed project's compliance with the City's Comprehensive Plan. 8. A statement as to the recipient's annual reporting req uirements. B. Business subsidies in the form of grants must be structured as forgivable loans. Business subsidies not structured as a forgivable loans, must include a statement as to the fair market value of the assistance to the recipient, including the value of conveying property at less than a fair market price or other in-kind benefits to the recipient. DRAFT - Page 2 Municipal Development Group, 2002 C. If a business assistance benefits more than one recipient, the grantor must assign a proportion of the business assistance to each recipient that signs a assistance agreement. D. All grantors and recipients must be authorized to execute the assistance agreement and the agreement must be executed. Section 5: Process A. As soon as possible development prospects seeking a business assistance should meet with EDA staff members to discuss the project, the public purpose for the assistance, proposed uses of the assistance, why the assistance is needed, goals for the assistance issuance and, materials required to process the request for assistance (e.g. historical and projected financial reports, proposed project financing including a demonstrable gap, evidence of ownership of property where applicable, appraisals, site information, the ability of the recipient to repay the assistance if goals are not achieved and other information deemed necessary to process the request). B. The EDA shall consider evaluate and make a recommendation to the City Council regarding a request for business assistance. C. If the amount of the requested assistance exceeds $100,000 the City shall hold a public hearing before granting or denying the request. D. The City and the recipient shall enter into a Business Assistance Agreement. Section 6: Reports A. Reports by Recipients to Grantors. A recipient shall report information regarding goals and results for two years after the benefit date or until the goals are met, whichever is later. If goals are not met, the recipient must continue to provide information on the assistance until the assistance is repaid. The information must be filed on forms provided by the grantor and filed with the grantor no later than March first of each year and within 30 days after the deadline for meeting job and wage goals. If the recipient does not submit its report, the local government unit shall mail the recipient a warning within one week of the required filing date. If within 14 days a report is not provided, the recipient shall pay the grantor a penalty of $100 for each subsequent day the report is not filed to a maximum of $1 ,000. B. Reports by the Grantor to the State. The City shall file a report by April first of each year with the State Department of Trade and Economic Development regardless of whether or not the City has awarded any business subsidies. DRAFT - Page 3 Municipal Development Group, 2002 2. Jobs created and retained in the City: Jobs created/retained Score: Jobs created in St. Joseph as a result of the project. 26+ 5 11-25 4 Jobs retained in St. Joseph as a result of the project, 6-10 3 1-5 2 Total number of jobs created and retained, None 1 3. Pay Level of Jobs: Job Classification Vaee of Median Class Waee* Score:** NOTICE OF PUBLIC HEARING ON PROPOSED BUSINESS ASSISTANCE POLICY - CITY OF ST. JOSEPH Notice is hereby given that the City of S1. Joseph City Council will conduct a public hearing on Thursday, November 7,2002 at 7:00 p.m. to accept input on a proposed Business Assistance (Subsidy) Policy". The proposed policy includes definitions, eligible business assistance uses, defines terms of an assistance agreement, identifies the process for business assistance and required reporting. The policy is proposed in accordance with Minnesota Statutes, Sections 116J.993 through 116J.995. A draft copy of the proposed Business Assistance Policy, is available for public inspection from 8:00 a.m. to 5:00 p.m., Monday through Friday, at the City Hall office in the City. At the time and place fixed for the Public Hearing, the City Council of the City will give all persons who appear at the hearing an opportunity to express their views with respect to the policy In addition, interested persons may file written comments respecting the proposal with the Administrator-Clerk at or prior to said public hearing. Dated this 22nd day of October, 2002. BY ORDER OF THE CITY COUNCIL) By /s!) Judy Weyrens City Administrator-Clerk 1 City of St. Joseph Business Assistance and Subsidy Policy Adopted ________________ 1.PURPOSE 1.01 The purpose of this Business Assistance Policy (the “Policy”) is to provide a guideline for the City of St. Joseph (the “City”) to offer assistance for a qualified commercial development project (the “Project”). The Business Subsidies Statutes are codified as Minnesota Statutes 116J.993 through 116J.995 (the “Act”). 1.02 Section 116J.993, Subd. 3 of the Act defines a Business Subsidy as "a state or local government 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." Appendix A lists forms of financial assistance that are not a business subsidy. The Policy shall be used as a guide in processing and reviewing applications requesting business assistance. 1.03 The City shall have the option of amending or waiving sections of the Policy when determined necessary or appropriate. Section 1161.994, Subd. 2 of the Act allows the City to deviate from its criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to the department. 2.STATUTORY LIMITATIONS 2.01 Business assistance requests subject to the Policy must comply with the Act. 3.GOALS 3.01 The City will consider using a business assistance tool to assist private developments only in those circumstances in which the Project show a demonstrated financing gap and meet one of more of the criteria identified in the Policy. 4.APPROVAL CRITERIA 4.01 To be considered for business assistance pursuant to the Policy, the Project must meet the following mandatory minimum business assistance approval criteria listed below. It should not be presumed that if the Project meets these criteria that assistance will be approved by the City. A.The business assistance requested must be comply with the Act and any other applicable state laws, State Auditor interpretation, debt limit guidelines, and any other relevant financial requirements and policies of the City. B.The Project must meet one or more of the criteria listed in Section 5 of the Policy. C.The Project must be in accord with the Comprehensive Plan and Zoning Ordinances, or required changes to the Comprehensive Plan and Zoning Ordinances must be under active consideration by the City at the time of approval. D.The business assistance will not be provided if the Project is financially feasible without the benefit of the assistance. Assistance will not be provided solely to broaden a DRAFTED POLICY 2 developer's profit margins on the Project. Prior to consideration of a business assistance request, the City may undertake an independent underwriting of the Project to help ensure that the request for assistance is valid. E.Prior to approval of business assistance, the developer shall provide any required market and financial feasibility studies, appraisals, soil boring, information provided to private lenders for the Project, and other information or data that the City or its financial consultants may require to proceed with an independent underwriting. F.The developer requesting business assistance should be able to demonstrate past successful general development capability as well as specific capability in the type and size of development proposed. G.The developer must retain ownership of the project at least long enough to complete it, to stabilize its occupancy, to establish the project management, and to initiate repayment of the business assistance. H.The level of business assistance funding should be reduced to the lowest possible level and least amount of time by maximizing the use of private debt and equity financing first, and then using other funding sources or income producing vehicles that can be structured into the project financing, prior to using additional business assistance funding. 5.BUSINESS ASSISTANCE PROJECT EVALUATION CRITERIA 5.01 If a business meets the criteria in Section 4 and is eligible for consideration of business assistance, the following criteria will be used to determine the amount of assistance and type of assistance that may be provided. All projects will be evaluated by the City on the following criteria for comparison with other business assistance projects reviewed by the City, and for comparison with other subsidy standards (where appropriate). It is realized that changes in local markets, costs of construction, and interest rates may cause changes in the amounts of business assistance subsidies that a given project may require at any given time. In applying the criteria to a specific project, the following will apply: A.The City may consider the requirements of any other business subsidy received, or to be received, from a grantor other than the City. B.If the business subsidy is a guaranty, the amount of the business subsidy may be valued at the principal amount of the guaranteed payment obligation. C.If the business subsidy is real or personal property, the amount of the subsidy will be the fair market value of the property as determined by the City. D.If the business subsidy is received over time, the City may value the subsidy as it determines is fair and reasonable under the circumstances. E.As used herein, "Benefit Date," means the date the business subsidy is received. If the business subsidy involves the purchase, lease, or donation of physical equipment, then the benefit date occurs when the recipient puts the equipment into service. If the business subsidy is for improvements to property, then the Benefit Date refers to the earliest date of either when the improvements are finished for the entire project or when a business occupies the property. F.All business assistance projects will need to meet a reasonable rate of return as determined by the City or consultants to the City. Assistance will not be used unless the need for the City's economic participation is sufficient that, without the business assistance the project could not proceed in the reasonably foreseeable future in the manner as proposed. The reasonable r ate of return will be based on market standards at the time of the application for business assistance as determined by the City or consultants to the City. 3 G.Business assistance will not be used when the developer's credentials, in the sole judgment of the City, are inadequate due to past track record relating to: completion of projects, general reputation and/or bankruptcy, or other problems or issues considered relevant by the City. H.Business assistance funding should not be provided to those projects that fail to meet good public policy criteria as determined by the City, including but not limited to: poor project quality; projects that are not in accord with the comprehensive plan, zoning, redevelopment plans, and city policies; projects that provide no significant improvement to surrounding land uses, the neighborhood, and/or the City; projects that do not have significant new, or retained, employment; projects that do not meet financial feasibility criteria established by the City; and projects that do not provide the highest and best desired use for the property. I.All projects receiving business assistance under the criteria listed in Section 116J.993, Subd. 3 of the Act must meet the job and wage goals described below in this section. Section 116J.994, Subd. 2 of the Act allows the City to deviate from its criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to the Department of Employment and Economic Development. a.Except as described in Section 5.11 and 5.12, a business subsidy must result in the creation or retention of jobs, which will pay a minimum of 80% of the Median Income for Stearns County. Stearns County is part of the St. Cloud, MN MSA. In addition, consideration will also be given to the creation or retention of jobs, which will pay 100% of Median Income for Stearns County (head of household jobs). The Median Income for the County is annually reported by HUD.gov. b.Wage goals will be set forth specifically in the business subsidy agreement. Where job creation is one of the public purposes of the business subsidy, the subsidy may be up to $10,000 per base job retained or created and may be up to $20,000 per head of household job retained or created. c.If wage goals are a reason for the subsidy then the following should be used as an assistance tool in the evaluation of the project: Number Score (out of 5) Jobs Created or retained 30 or more 5 15-29 4 6-14 3 1-5 2 None 1 c.The amount of assistance available to a project will be limited by the amount of proceeds that Tax Increment Financing, Tax Abatement, or other applicable financing tools may support. d.Job creation or retention is not required for businesses subsidies if the grantor identifies an alternate public purpose in addition to tax base increase. If after a public hearing/council consideration of the alternate public purpose(s) proposed, the creation or retention of jobs is determined not to be a goal, the wage and job goals may be set at zero. e.In lieu of job creation or retention, other measurable, specific, and tangible goals shall be established. Examples of tangible goals may include redevelopment, or pollution or soil remediation. f.Business assistance will normally be used for projects that address the following land 4 use issues: (1) more compatible with the City's Comprehensive Plan than other permitted uses for property; (2) located on property which needs but is not likely to be developed or redeveloped because of blight or other adverse conditions of the property; and/or include design and/or amenity features not otherwise required by law. g. Business assistance will be evaluated on the project's impact on existing and future public investment: (1) whether and to what extent the project will utilize existent public infrastructure capacity and the extent it requires additional publicly funded infrastructure investments; (2) arrangements for the City to receive a direct monetary return on its investment in the project. J. Business assistance will normally be used for projects that demonstrate to the satisfaction of the City adequate financing for the project is available and that the project will be completed in a timely fashion. K. Business assistance from the City must satisfy all requirements of the Act. 5.02 Some criteria included in the Policy, by their very nature, must remain subjective. However, wherever possible "benchmark" criteria have or will be established for review purposes. The fact that a given proposal meets one or more "benchmark" criteria does not mean that it is entitled to funding under this policy, but rather that the City is able to proceed with evaluations of (and comparisons between) various business assistance proposals, using uniform standards whenever possible. 5.03 A recipient of a business assistance must enter into an agreement with the granter of the assistance that includes: 1. The amount and type of assistance. The type of district if assistance is tax increment financing. A list of financial assistance by all granters for the project. 2. A statement(s) of public purpose (from Section 3), including a statement of why the assistance is needed. 3. Goals for the assistance 4. A statement as to the recipient's obligation if the recipient does not fulfill the agreement. At a minimum the agreement must require a recipient failing to meet assistance agreement goals to pay back the assistance plus interest to the grantor provided that repayment may be prorated to reflect partial fulfillment of goals. 5. The name and address of the recipient (and parent corporation where applicable) and, a description of the financial obligation of the recipient if the goals are not met. 6. A commitment to continue operations at the site where the assistance is used for at least five (5) years after the benefit date. 7. A statement as to the proposed project's compliance with the City's Comprehensive Plan. 8. A statement as to the recipient's annual reporting requirements. 5 CITY OF ST. JOSEPH PRE-APPLICATION BUSINESS ASSISTANCE FINANCING Legal name of applicant: Address: Telephone number: Name of contact person: REQUESTED INFORMATION Addendum shall be attached hereto addressing in detail the following: l. A map showing the exact boundaries of proposed development. 2. Give a general description of the project including size and location of building(s); business type or use; traffic infom1ation including parking, projected vehicle counts and traffic flow; timing of the project; estimated market value following completion. 3. The existing Comprehensive Guide Plan Land Use designation and zoning of the property. Include a statement as to how the proposed development will conform to the land use designation and how the property will be zoned. 4. A statement identifying how the assistance will be used and why it is necessary to undertake the project. 5. A statement identifying the public benefits of the proposal including estimated increase in property valuation, new jobs to be created, hourly wages and other community assets. 6. A written description of the developer's business, principals, history and past projects I understand that the application fee, pursuant to the City’s adopted fee schedule, will be used for City staff and consultant costs and may be partially refundable if the request for assistance is withdrawn. Refunds will be made at the discretion of the City Council and be based on the costs incurred by the City prior to the withdrawal of the request for assistance. If the initial application fee is insufficient, I will be responsible for additional deposits. SIGNATURE Applicant's signature: ____________________________________________________________ Date: __________________________ 6 CITY OF ST. JOSEPH Application for Business Assistance Financing GENERAL INFORMATION: Business Name: Date: Address: Type (Partnership, etc.): Authorized Representative: Phone: Description of Business: Legal Counsel: . Address: Phone: FINANCIAL BACKGROUND: 1.Have you ever filed for bankruptcy? 2.Have you ever defaulted on any loan commitment? 3.Have you applied for conventional financing for the project? 4.List financial references: a. b. C. 7 5.Have you ever used Business Assistance Financing before? If yes, what, where and when? PROJECT INFORMATION: 1.Location of Proposed Project: 2.Amount of Business Assistance requested? 3.Need for Business Assistance: 4.Present ownership of site: 5.Number of permanent jobs created as a result of project? 6.Estimated annual sales:Present: Future: 7.Market value of project following completion: 8.Anticipated start date:Completion Date: FINANCIAL INFORMATION: 1.Estimated project related costs: a. land acquisition $ b.site development C.building cost d.equipment e.architectural/engineering fee f.legal fees g.off-site development costs Total 8 2.Source of financing: a. private financing institution $ b.requested public assistance funds c.other public funds d.developer equity Total PLEASE INCLUDE: 1.Preliminary financial commitment from bank. 2.Plans and drawing of project. 3.Background material of company. 4.Pro Forma analysis. 5.Financial statements. 6.Statement of property ownership or control. 7.Payment of application fee of $1,000 8.Escrow payment $10,000 and Escrow Agreement 9 APPENDIX A The Business Subsidies Statutes specifically excludes the following items from the definition. The following are not business subsidies pursuant to the Policy and/or the Act. •A business subsidy of less than $150,000. •Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria. •Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made. •Redevelopment property polluted by contaminants as defined in Section 116J.552, Subd. 3 of the Act. •Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost. •Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services. •Assistance for housing. •Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance sub-district as defined under Section 469.174, Subd. 23 of the Act. •Assistance for energy conservation. •Tax reductions resulting from conformity with federal tax law. •Workers' compensation and unemployment compensation. •Benefits derived from regulation. •Indirect benefits derived from assistance to educational institutions. •Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999. •Assistance for a collaboration between a Minnesota higher education institution and a business. •Assistance for a tax increment financing soils condition district as defined under Section 469.174, Subd. 19 of the Act. •Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value. •General changes in tax increment financing law and other general tax law changes of a principally technical nature. •Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency. •Funds from dock and wharf bonds issued by a seaway port authority. •Business loans and loan guarantees of $150,000 or less. •Federal loan funds provided through the United States Department of Commerce, Economic Development Administration. 10 • Property tax abatements granted under section Minnesota Statutes 469.1813 to property that is subject to valuation under Minnesota Rules, Chapter 8100. St. Joseph TIF and Tax Abatement Policy 1 City of St. Joseph Policy and Procedures Tax Increment Financing and Tax Abatement For the purpose of this policy, the “EDA” shall also mean the St. Joseph Economic Development Authority, which serves in conducting various economic development, housing and redevelopment programs and activities within the City of St. Joseph. Tax increment financing and tax abatement are generally interchangeable with respect to policy application. I.GENERAL POLICY The purpose of this policy is to establish the position of the City of St. Joseph and the Economic Development Authority with respect to the use of tax increment financing or tax abatement for private development within the City. This policy shall be used as a guide in the application for, review and consideration of any requests for tax increment or abatement assistance. The fundamental purpose of tax increment financing or tax abatement in St. Joseph is to encourage desirable development and/or redevelopment that would not otherwise occur “but for “the assistance provided through TIF or tax abatement. The City of St. Joseph and EDA shall consider tax increment financing or tax abatement for projects that serve to accomplish the City’s goals for housing and economic development as they may change over time. The goals include facilitating projects that would result in the creation of quality jobs (i.e. stable employment and/or attractive wages and benefits) and the attraction, retention, and expansion of business and housing options in the City. II.CITY/EDA OBJECTIVES FOR THE USE OF TIF or TAX ABATEMENT As a matter of adopted policy, the City of St. Joseph and EDA will consider using tax increment financing (TIF) or tax abatement to assist private development projects to achieve one or more of the following purposes: •Remove blight and/or encourage redevelopment in the commercial and industrial areas of the City in order to encourage high quality development or redevelopment and private reinvestment in those areas. •To provide for a balanced and sustainable housing stock to meet diverse needs both today and in the future. •To retain local jobs and/or increase the number and diversity of quality jobs (i.e. stable employment and/or attractive wages and benefits. •To encourage additional unsubsidized private development in the area, either directly, or through secondary “spin-off” development. •To offset increased costs of redevelopment (i.e. contaminated site clean-up), over and above those costs that a developer would incur in normal urban and suburban development. •To facilitate the development process and to achieve development on sites which would not be developed without this assistance. St. Joseph TIF and Tax Abatement Policy 2 •To meet other uses of public policy, as adopted by the Council from time to time, including promotion of quality urban design, quality architectural design, energy conservation, decreasing the capital and operating costs of local government, etc. III.COSTS WHICH QUALIFY FOR TIF OR ABATEMENT ASSISTANCE •Project design fees including: utilities, landscape, architectural and engineering design. •Site related work including: permits for site work, earthwork/excavation, soil correction, landscaping, utilities, streets and roads, street/parking lot paving, street/parking lot lighting, curb and gutter, sidewalks •Land acquisition •Special assessments •Legal fees (acquisition, finance, closing) •Soil tests •Environmental studies •Surveys •Park and open space dedication fees •Interest rate write downs •Relocation assistance •Replacement or clean-up of contaminated soils which would otherwise preclude redevelopment •Rehabilitation •Any other costs allowable by Statute IV.PROJECTS WHICH MAY QUALIFY FOR TIF OR ABATEMENT ASSISTANCE All new TIF or tax abatement projects considered by the City of St. Joseph and EDA must meet each of the following minimum qualifications and will also be evaluated based on their ability to meet the desired qualifications for assistance. However, it should not be presumed that a project meeting any of the qualifications will automatically be approved. Meeting the qualifications creates no contractual rights on the part of any potential developer to have its project approved. A.MINIMUM QUALFICIATIONS 1.The project should meet one or more of the tax increment or tax abatement Objectives outlined in Section II of this policy, but at a minimum shall: •Remove blight and/or encourage redevelopment in the commercial and industrial areas of the City in order to encourage high quality development and redevelopment and private investment in those areas. •To facilitate the development process and to achieve development on sites which would not be developed without this assistance. 2.The developer must demonstrate that the project is not financially feasible “but for” the use of TIF or abatement assistance. 3.The project must be consistent with the City’s Comprehensive Plan, zoning ordinance, and building code or require changes to the plan and ordinances must be under active consideration by the City at the time of final TIF or abatement application submittal. St. Joseph TIF and Tax Abatement Policy 3 4.Prior to approval of a TIF or abatement financing plan, the developer shall complete and submit the City’s form for application and provide any requested market and financial feasibility studies, appraisals, soil borings, private lender commitment, and/or other information the City, EDA or its financial consultants may require in order to proceed with an independent underwriting of the proposal. 5.The developer must provide adequate financial guarantees to ensure the completion of the project. These may include, but not limited to: assessment agreements, letter of credit, personal deficiency guarantees, maximum cost contract, etc. 6.Any developer requesting TIF or tax abatement assistance should be able to demonstrate past successful general development capability as well as specific capability in the type and size of development proposed. TIF or abatement will not be used when the developer’s credentials, in the sole judgement of the City, are inadequate due to past track record relating to: completion of the projects, general reputation and/or bankruptcy, or other problems or issues considered relevant by the City and EDA. 7. The developer shall retain ownership of the project at least long enough to complete it, to stabilize its occupancy, and to establish the project management and initiate repayment via the TIF or abatement assistance. B.DESIRED QUALIFICATIONS 1.TIF and abatement proposals creating a higher ratio of property taxes paid before and after redevelopment will receive priority consideration. Given the different assessment circumstances in the City, this ratio will vary widely. A 1:2 ratio of taxes paid before and after redevelopment is desired. 2.TIF and abatement proposals should normally not be used to support speculative industrial, commercial, office or housing projects. In general, the developer should be able to provide market data, tenant letter of commitment or finance statements which support the market potential/demand for the proposed project. 3.TIF and abatement will normally not be used in a project that involves an excessive land and/or property price. This will normally be where the acquisition price is more than 20% in excess of the market value as determined by an independent appraisal of the property. 4.TIF and abatement will not be used in projects that would give a significant competitive financial advantage over similar projects in the area due to the use of tax increment or abatement subsidies. Developers should provide information to support that the TIF or abatement assistance will not create such a competitive advantage. Priority consideration will be given to projects that fill an unmet market need. 5.TIF and abatement will be provided on a pay-as-you-go basis. Any request for up front assistance will be evaluated on its own merit in accordance with this policy. Projects requesting pay-as-you-go financing will receive priority consideration. 6.Preference will be given to projects that do not place extraordinary demands on City services. If it is determined by the City’s Public Works Director and City Engineer that an extraordinary increase in public service would result because of the project, TIF or abatement will not be considered. Commented [TO1]: How does the city demonstrate compliance with this requirement? I would specify this in the policy. St. Joseph TIF and Tax Abatement Policy 4 7.TIF or tax abatement will not normally be used for projects that would generate significant environmental problems in the opinion of the local, state, or federal governments. Priority will be given to project that aim to clean-up existing contaminated sites and would facilitate the location of an industry or business that has an environmentally sound track record, or meet a housing need in the City. 8.Preference will be given to projects that meet good public policy criteria as determined by the EDA and City Council, including: •Projects that are in accord with the Comprehensive Plan, Strategic Plan, Zoning Ordinances and other redevelopment plans of the City and EDA, •Projects that provide significant improvement to surrounding land uses, the neighborhood, and/or the City, •Projects that provide a significant increase in tax base, •Projects that provide significant new, or retained employment, •Projects that meet financial feasibility criteria established by the EDA, and •Projects that provide the highest and best desired use for the property. V.TAX INCREMENT OR ABATEMENT PROJECT EVALUATION PROCESS The following five methods of analysis for all TIF proposals will be used: 1.Consideration of project meeting minimum qualifications. 2.Consideration of project meeting desired qualifications. 3.Project meets “but for” analysis and statutory qualifications (Exhibit A). 4.Project is deemed consistent with EDA goals and the City’s Comprehensive Plan. Please note that the evaluation methodology is intended to provide a balanced review. Each area will be evaluated individually and collectively and in no case shall one area outweigh another in terms of importance to determining the level of TIF assistance. VI.APPLICATIONS The City’s tax increment financing or tax abatement program will be administered by the St. Joseph Economic Development Authority (EDA). The St. Joseph EDA will require a non-refundable application fee for its processing of the application. The application fee shall be paid to the EDA at the time a final application is submitted. At the time a final application is submitted, the applicant shall also deposit a review escrow as required in the fee schedule. If additional costs are incurred beyond required review escrow the Applicant shall be notified of such additional costs in writing. Said additional costs shall be paid prior to the execution of a development agreement, the EDA shall notify the applicant in writing and the applicant will be required to deposit additional funds upon notice. If the project is approved and the applicant proceeds with the project, the EDA shall reimburse the applicant any unused portion of the deposit as of the date of execution of the development agreement. If the applicant does not proceed with the project, the EDA shall reimburse the applicant for the unused portion of the deposit as of the date that the EDA is notified in writing that the applicant desires to withdraw its application. VII.APPLICATION PROCESS Formatted: Not Strikethrough Commented [TO2]: I did not have a copy of Exhibit A or B to review Formatted: Not Strikethrough Formatted: Not Strikethrough St. Joseph TIF and Tax Abatement Policy 5 The application process is a two-step process and must be completed in accordance with the TIF and abatement application procedures (Exhibit C). The purpose of this approach is to give an applicant the opportunity to present a development proposal without expending a great deal of money and time in pursuing a development that may conflict with the City’s and EDA’s goals and objectives. VIII.OTHER POLICY ISSUES FISCAL DISPARITIES Does not impact the City of St. Joseph according to State Statute. Loss of Government Aid At any time, if the formation of a new TIF district or the use of an existing district to finance a project will subject the City to an LGA/HACA penalty or local contribution to a project, the transaction shall be structured so as to have the ultimate cost the City minimized to the greatest extent permitted by law, so as to have the project bear the cost of the penalty or contribution. Public Use of Tax Increment or Abatement The City and EDA shall follow applicable state laws in terms of potential public improvement financing with TIF or abatement. It shall be the general policy of the City and EDA to identify public improvements at the time of adoption or amendment of the TIF Plan or abatement agreement and to determine source of funding to pay for the identified public improvements. Attachment B Rating Analysis Grading and Report Card for Subsidy requests 1.Ratio of Private to Public Investment in the Project:Grade Score: Private Funds/TIF $ Private Investment $5:1 A 5 $ TIF/Public Investment 4:1 B 4 $ Ratio of Private/Public Financing 3:1 C 3 2:1 D 2 Below 2:1 F 1 2.New jobs created and retained in the City:Grade: Score New employees in St. Joseph as a result of the project. A 30+ = 5 B 15-29 = 4 ____ Jobs retained in St. Joseph as a result of the project. C 6-14 = 3 D 1-5 = 2 ____ Total number of jobs created and retained. F None = 1 3. Ratio of City Financing to new jobs created:Grade: $ TIF assistance requested $8,000 or less per job A New jobs created $10,000 or less per job B $ TIF/Job $12,000 or less per job C $15,000 or less per job D More than $15,000 F This standard is proposed for deletion because it does not appear to be functional in a community the size of St. Joseph. If a project generates $550,000 in tax increments, according to this standard, the project would need to create 70 jobs to receive an “A – Excellent” rating; 55 jobs to receive a “B – Very good” rating; 45 jobs to receive a “C – average” rating or 36 jobs to receive a “D – below average” rating. This is a very difficult standard to implement in a community of 7,000 population, in close proximity to an urban growth center (St. Cloud) with significant development costs. 4. Pay Level of Jobs:Grade: Pay Range # of Employees in Range Total Wages Grade $45,000/yr or more ______________________ ____________ A $35,000/yr or more ______________________ ____________ B $30,000/yr or more C $20,000/yr or more D Less than $20,000 ______________________ ____________ F Total Wages ______ / # of employees (FTE) ___= Average wage $ This evaluation point is proposed for deletion because job creation and minimum wage floors are mandatory in the City’s Business Subsidy Policy which is required by state law. Per statute, we will soon be implementing minimum wage floors for subsidy which include an actual dollar amount or a calculation Proposed Revisions which arrives at an actual dollar amount for the minimum wage requirement. This evaluation point also appears to be non-functional in a community the size of St. Joseph. According to this standard currently, the new jobs created must average $21.63/hr. to achieve an “A – Excellent” rating; $16.83/hr to achieve a “B – Very Good” rating; $14.42/hr. to achieve a “C – Average” rating or $9.61/hr. to achieve a “D – Poor” rating. 5.Increase in Real Estate Estimated Market Value:Grade: Score $_________ Estimate market value of site after development Before/After Development 1:5 A 5 $ Estimated market value of site before development 1:4 B 4 1:3 C 3 __________ Ratio of value before/after development 1:2 D 2 1:1 F 1 Bonus Points 2 points 1 point 2 points •The project adds value to the neighborhood and/or business community and adheres to the Comprehensive Plan. •Developer agrees to pay as you go financing •The proposed project will redevelop a previously contaminated or environmentally challenged site. •Mixed use project bonus 2 points Total Bonus Points Available 2 points PROPOSED ADDITIONAL STANDARDS: 1. The proposed development is consistent with the City’s long term development and redevelopment guidelines as contained in the City’s Comprehensive Plan. _____ YES (5 points) ______ NO (0 points) 2.The Developer agrees to pay-as-you-go financing? _____ YES (5 points) ______ NO (0 points) 3.There is a demonstrated need for the commercial/industrial development within the City of St. Joseph. _____ YES (5 points) ______ NO (0 points) Total Points Scored / 6 = average score. 5 = Excellent, 4= Very Good, 3 = Average, 4 = Below Average, 5 = Fail PROJECT REPORT CARD Question Grade Points 1. A Excellent = 5 B Very Good = 4 2. C Average = 3 D Below Average = 2 3. F Fail =1 4. 5. Bonus Points ________ TOTAL POINTS ________ / 5 =_________GPA DEVELOPMENT TRACKER Project number Name/location area Type Status 01 – B Expansion of production area TBD 01-C Knife River Rail Expansion Phase 1 complete. Phase 2 unknown for timing. 01-D New commercial cultural café space List of potential properties provided to group by staff. 01 - E Wedding/Event venue Wedding/Event Venue amendment in RR areas Awaiting execution of D.A. 01 – H Low Density Residential Subdivision expansions near Kennedy Discussions occurring 01 – I East Park River’s Bend Expansion of Park S.E.H. has begun design work and surveying with plans at 80% complete . Construction to start late Summer and wrap up by June 2025 01 – J Joetown Apts 2 Phase market rate apt complex (just south of 100 units) Phase 2 likely after one year 01 – K Downtown Redevelopment Redevelopment in Downtown Quonset building purchased by Shannon Wiger. Demo work has started on inside and portions of exterior 01 – L Synergy Site (old JR Mobile) Redevelopment of Gas Station parcel Awaiting civil submittals by applicant. Goal of late July construction 01 – M Gateway area Green field Commercial development – Gateway Awaiting legislature results on bonding request 01 – N Northside Commercial Redevelopment of Northside Commercial area Visioning discussion with purchaser of Sunset building. 01 – O Elm St Roadway expansion – Elm St Awaiting plan approvals 01 – P Expansion of Commercial Facility Numerous discussions with property owner. Zoning information and building information provided on process needed and steps to approval (PUD required) 01 – Q Relocation of business and new commercial construction Discussion with owner. Information on TIF/Abatement provided to business owner. 01 – R MN Home Improvements New Commercial build – MN Home Improvements Project on hold. Variance approvals extended till 2024. 01 – S Plat to do Storage buildings and transition to residential. High – medium – low density Purchase of property has been made. Pre- development meeting occured 01 – T Adam Hansen Woodworks 80,000-90,000 S.F. Manufacturing facility. Existing business expansion looking to consolidate into one lot/building. Abatement approved in May. Variance and parking lot approvals set for Council on May 20th. June 30th goal for starting construction 01 – U Industrial Park expansion Expansion of Industrial Park Lift station is needed which severely increases costs 01-V Industrial Building Expansion. Possible 6 + new jobs Awaiting sketches for review 01-W New retail building Discussion on potential lots. 01 – X Relocation and expansion of existing St. Joe Business – 100,000 S.F. + potential outside storage/parking Not ready to move forward. Connections made between land owner and business owner. 01 – Y Boutique hotel Discussions occurring between private parties. GSDC looped into discussions. Met with property owner again in May to get status update 02-A 25,000 S.F. expansion. Retention of 28 FTE and adding 6-10 FTE Held meeting with owner, DEED, HRA, GSDC, and project partners 02 – B Feedmill property Potential rehab or knock down Rezone has been approved to revert building back to Commercial. 02 – C New Industrial Park building Met with owners and intended purchaser. 2025 project. Proposal to vacate interior easements and consolidate three lots into one approved. 02 – D Tyler Braegelmann New Industrial Park Incubator project Zoning Text amendment set for May 20th Council. Undergoing Site Plan review. Hope to break ground on Phase 1 (2-3 buildings) soon as possible. Meeting with GSDC set for late May. 02 – E New EE use near the Monestray Met with contact on 12/04 02 – F Promotional Resources 16,000 S.F. Expansion of existing Industrial building Site plan approval issued. Power line set to be removed on May 20th with line vacated same day. Will break ground soon after line is removed. 02 – G New restaurant Meeting with owner in Feb. Connections will be made to existing property owners 02 – H Wine bar Need an operator and space Tracker is a sampling of projects and is not exhaustive.