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HomeMy WebLinkAboutSP June 20, 2000 :-) CITY of ANDOVER 1685 CROSSTOWN BOULEVARD NW.. ANDOVER. MINNESOTA 55304. (763) 755-5100 FAX (763) 755-8923 Special Joint City CouncillEconomic Development Authority Meeting Tuesday, June 20, 2000 Call to Order '- Following EDA meeting held at 7:00 PM Discussion Items 1. Public Hearing: Adopt Business Subsidy Criteria 0 Adjournment ',--) I , \ /- ...., , I \ '\ / CITY OF ANDOVER REQUEST FOR CITY COUNCIL & ECONOMIC DEVELOPMENT AUTHORITY ACTION DATE: June 20. 2000 AGENDA SECTION ORIGINATING DEPARTMENT Discussion Community Development ITEM NO. \. Public Hearin!!: Adopt David L. Carlberg Business Subsidy Criteria Community Development Director The City Council and the Economic Development Authority (EDA) are requested to jointly hold a public hearing on the adoption of business subsidy criteria as provided in Minnesota Statutes, Sections 116J.993 to 116J.995. The City Council and the EDA will each need to make separate motions to approve separate resolutions adopting the criteria. Attached are resolutions for Council and EDA approval. / CITY OF ANDOVER COUNTYOFANOKA STATE OF MINNESOTA RES. NO. A RESOLUTION ADOPTING BUSINESS SUBSIDY CRITERIA. WHEREAS, Minnesota Statutes, Sections 1161.993 through 116J.995 (the "Statutes") require the adoption of criteria for the granting of business subsidies as defined in the Statutes; and, WHEREAS, the City of Andover (the "City") has determined that it is necessary and appropriate to adopt business subsidy criteria pursuant to the Statutes; and, WHEREAS, the City has performed all actions required by law to be performed prior to the adoption and approval of the proposed business subsidies, including the holding of a public hearing upon published notice as required by law on June 20, 2000. I NOW, THEREFORE, BE IT RESOLVED by the City Council (the "Council") of the City of Andover, Minnesota, that the business subsidy criteria, contained in Exhibit A of this resolution are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the City Clerk. Adopted by the City Council of the City of Andover on this ~ day of June 2000. ATTEST: CITY OF ANDOVER Victoria Volk; City Clerk J. E. McKelvey, Mayor EXHIBIT A City of Andover Business Subsidy Criteria June 20, 2000 1 PURPOSE AND AUTHORITY 1.1 The purpose ofthis document is to establish the criteria for the City of Andover (the Grantor) for granting of business subsidies for private development. These criteria shall be used as a guide in the processing and reviewing applications requesting business subsidies. 1.2 The City's ability to grant business subsidies is governed by the limitations established in Minnesota Statutes 116J.993 through 116J.994 (the Statutes). 1.3 Unless specifically excluded by the Statutes, business subsidies include grants by state or local government agencies, contributions of personal property, real property, infrastructure, the priI)cipal amount of a loan at rates below those commercially available to the recipient of the subsidy, 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. 1.4 These criteria are to be used in conjunction with other relevant policies of the Grantor. 1.5 The City may deviate from these criteria by documenting in writing the reason(s) for the deviation. The documentation shall be submitted to the Department of Trade and Economic Development with the next annual report. 1.6 The Grantor may amend this document at any time. Amendments to these criteria are subject to public hearing requirements contained in the Statutes. 2 PUBLIC PURPOSE REQUIREMENT 2.1 All business subsidies must meet a public purpose. 2.2 The creation or retention of jobs may be, but is not required to be, a public purpose for granting a subsidy. The determination that jobs are not a public purpose for the subsidy and that the related wage and job goals are zero shall be made following a public hearing. 2.3 Job retention may only be used as a public purpose in cases where job loss is specific and demonstrable. The City shall document the information used to determine the nature of the job loss. / 2.4 The creation of tax base shall not be the sole public purpose of a subsidy. 1 2.5 The wage floor for wages to be paid for the jobs created shall be the State minimum wage in effect at the time the subsidy is granted. The City will seek to create jobs with higher wages as appropriate for the overall public purpose of the subsidy. 3 BUSINESS SUBSIDY APPROVAL CRITERIA 3.1 All new projects approved by City of Andover should meet the following minimum approval criteria. However, it should not be presumed that a project meeting these criteria will automatically be approved. Meeting these criteria creates no contractual rights on the part of any potential developer. 3.2 To be eligible to receive a business subsidy, the recipient must meet the following minimum requirements: a. The subsidy must achieve a public purpose. b. The project must comply with local plans and ordinances. c. The recipient shall provide information demonstrating that granting the subsidy is necessary for the proposed development to occur. d. The recipient enters into an agreement pursuant to these criteria and the Statutes. I 3.3 The business subsidy shall be provided within applicable state legislative restrictions, debt limit guidelines, and other appropriate financial requirements and policies. 3.4 The project must be in accord with the Comprehensive Plan and Zoning Ordinances, or required changes to the plan and Ordinances must be under active consideration by the City at the time of approval. 3.5 Business subsidies will not be provided to projects that have the financial feasibility to proceed without the benefit of the subsidy. In effect, business subsidies will not be provided solely to broaden a developer's profit margins on a project. Prior to consideration of a business subsidy request, the Grantor may undertake an independent underwriting of the project to help ensure that the request for assistance is valid. 3.6 Prior to approval of a business subsidy, 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 Grantor or its financial consultants may require in order to proceed with an independent underwriting. 3.7 Any developer requesting a business subsidy should able to demonstrate past successful general development capability as well as specific capability in the type and size of development proposed. 2 City of Andover June 20, 2000 3.8 The developer must retain ownership ofthe project at least long enough to complete it, to stabilize its occupancy, to establish the project management, and to initiate repayment of the business subsidy, if applicable. 3.9 A recipient of a business subsidy must enter into a subsidy agreement with the Grantor as described in Section 4. 3.10 A recipient of a business subsidy must make a commitment to continue operations within the City for at least five years after the benefit date. 3.11 Any business subsidy will be the lowest possible level and least amount of time necessary, after the recipient maximizes the use of private debt and equity financing first. 4 Subsidy Agreement 4.1 In granting a business subsidy, the Grantor shall enter into a subsidy agreement with the recipient that provides the information, wage and job goals, commitments to provide necessary reporting data and recourse for fail to meet goals required by the Statutes. 4.2 The subsidy agreement may be incorporated into a broader development agreement for a proj ect. 4.3 The subsidy agreement will describe the requirements for the recipient to provide the reporting information required by the Statutes. / 3 ANDOVER ECONOMIC DEVELOP:MENT AUTHORITY COUNTYOFANOKA STATE OF MINNESOTA RES. NO. FDA - -00 A RESOLUTION ADOPTING BUSINESS SUBSIDY CRITERIA. WHEREAS, Minnesota Statutes, Sections 116J.993 through 1161.995 (the "Statutes") require the adoption of criteria for the granting of business subsidies as defined in the Statutes; and, WHEREAS, the Andover Economic Development Authority (the "EDA") has determined that it is necessary and appropriate to adopt business subsidy criteria pursuant to the Statutes; and, WHEREAS, the EDA has performed all actions required by law to be performed prior to I the adoption and approval of the proposed business subsidies, including the holding of a public hearing upon published notice as required by law on June 20, 2000. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Andover Economic Development Authority that the business subsidy criteria, contained in Exhibit A of this resolution are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the City Clerk. Adopted by the EDA of the City of Andover on this ~ day of June 2000. ATTEST: CITY OF ANDOVER Michael Knight, Secretary J. E. McKelvey, President EXHIBIT A Andover Economic Development Authority Business Subsidy Criteria June 20, 2000 1 PURPOSE AND AUTHORITY 1.1 The purpose of this document is to establish the criteria for the Andover Economic Development Authority (the Grantor) for granting of business subsidies for private development. These criteria shall be used as a guide in the processing and reviewing applications requesting business subsidies. 1.2 The EDA's ability to grant business subsidies is governed by the limitations established in Minnesota Statutes 116J.993 through 116J.994 (the Statutes). 1.3 Unless specifically excluded by the Statutes, business subsidies include grants by state or local government agencies, contributions of personal property, real property, infrastructure, the principal amount of a loan at rates below those commercially available to the recipient of the subsidy, 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. 1.4 These criteria are to be used in conjunction with other relevant policies ofthe Grantor. 1.5 The EDA may deviate from these criteria by documenting in writing the reason(s) for the deviation. The documentation shall be submitted to the Department of Trade and Economic Development with the next annual report. 1.6 The Grantor may amend this document at any time. Amendments to these criteria are subject to public hearing requirements contained in the Statutes. 2 PUBLIC PURPOSE REQUIREMENT 2.1 All business subsidies must meet a public purpose. 2.2 The creation or retention of jobs may be, but is not required to be, a public purpose for granting a subsidy. The determination that jobs are not a public purpose for the subsidy and that the related wage and job goals are zero shall be made following a public hearing. 2.3 Job retention may only be used as a public purpose in cases where job loss is specific and demonstrable. The EDA shall document the information used to determine the nature of the job loss. 2.4 The creation of tax base shall not be the sole public purpose of a subsidy. 1 , 2.5 The wage floor for wages to be paid for the jobs created shall be the State minimum wage in effect at the time the subsidy is granted. The EDA will seek to create jobs with higher wages as appropriate for the overall public purpose of the subsidy. 3 BUSINESS SUBSIDY APPROVAL CRITERIA 3.1 All new projects approved by the EDA should meet the following minimum approval criteria. However, it should not be presumed that a project meeting these criteria will automatically be approved. Meeting these criteria creates no contractual rights on the part of any potential developer. 3.2 To be eligible to receive a business subsidy, the recipient must meet the following minimum requirements: ., " a. The subsidy must achieve a public purpose. b. The project must comply with local plans and ordinances. c. The recipient shall provide information demonstrating that granting the subsidy is necessary for the proposed development to occur. d. The recipient enters into an agreement pursuant to these criteria and the Statutes. 3.3 The business subsidy shall be provided within applicable state legislative restrictions, debt limit guidelines, and other appropriate financial requirements and policies. 3.4 The project must be in accord with the Comprehensive Plan and Zoning Ordinances, or required changes to the plan and Ordinances must be under active consideration by the City of Andover at the time of approval. 3.5 Business subsidies will not be provided to projects that have the financial feasibility to proceed without the benefit of the subsidy. In effect, business subsidies will not be provided solely to broaden a developer's profit margins on a project. Prior to consideration of a business subsidy request, the Grantor may undertake an independent underwriting of the project to help ensure that the request for assistance is valid. 3.6 Prior to approval of a business subsidy, 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 Grantor or its financial consultants may require in order to proceed with an independent underwriting. 3.7 Any developer requesting a business subsidy should able to demonstrate past successful general development capability as well as specific capability in the type and size of development proposed. 2 , Andover Economic Development Authority June 20, 2000 .J 3.8 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 subsidy, if applicable. 3.9 A recipient of a business subsidy must enter into a subsidy agreement with the Grantor as described in Section 4. 3.10 A recipient of a business subsidy must make a commitment to continue operations within the City of Andover for at least five years after the benefit date. 3.11 Any business subsidy will be the lowest possible level and least amount oftime necessary, after the recipient maximizes the use of private debt and equity financing first. 4 Subsidy Agreement 4.1 In granting a business subsidy, the Grantor shall enter into a subsidy agreement with the recipient that provides the information, wage and job goals, commitments to provide necessary reporting data and recourse for fail to meet goals required by the Statutes. 4.2 The subsidy agreement may be incorporated into a broader development agreement for a project. 4.3 The subsidy agreement will describe the requirements for the recipient to provide the reporting information required by the Statutes. 3 \ , Economic Development Authority Meeting - Tuesday, June 20, 2000 Call to Order-7:00 PM Discussion Items 1. Authorize the Call of Certain Outstanding General Obligation Tax Increment Bonds, Series 1993B. 2. Consider the Modifications to Development District No.1 and TIF District 1-1. Adjournment