4.1.
Economic Development Authority (EDA)
- Meeting Date:
- 09/03/2015
- Submitted For:
- Patrick Brama
- By:
- Patrick Brama, Administrative Services
Title:
Consider Multiple Actions Related to a Potential Life Fitness Expansion Project
Purpose/Background:
PURPOSE:
(1) TIF PLAN: Consider Support of Resolution to Modify Development District 1, Establish TIF District 15, and adopt TIF District 15 Plan. This step does not award TIF. This step allows the City to award TIF. Attached to this case is a TIF Plan Summary; and Staff recommends the EDA concentrate their time on this document.
--and--
(2) TIF AGREEMENT: Consider support of the attached Development Agreement (a.k.a. TIF Agreement). This would be considered the actual proposed TIF award to Life Fitness. Attached to this case is a TIF Agreement Term Sheet; and Staff recommends the EDA concentrate their time on this document.
BACKGROUND (Project)
This case was introduced to the EDA in July; at which time, detailed background information was provided on this project. Detailed background information on TIF was also included is said case. Attached is the July EDA MEMO.
BACKGROUND (TIF Plan)
Ehler's is managing the process to establish a new TIF district. Attached is an overview/ summary of the proposed district. Also attached is a resolution the City Council will consider on 09/22. Lastly, attached to this case is the TIF Plan. Again, the purpose of the TIF Plan is to allow the City to award TIF.
It should be noted, the attached TIF Pan includes a "maximum budget." This is a high and conservative total eligible project costs estimation ($1,468,320). This number is different than what is included in the attached TIF Agreement; which is the actual proposed assistance ($224,000). To be clear, the City is not proposing to award $1,468,320 to Life Fitness. The City is proposing to award $224,000 in present value (PV) terms.
BACKGROUND (TIF Agreement)
This agreement lays out the terms and conditions for the proposed TIF award; including the specific amount of TIF to be awarded. Present Value = $224,000 @ 5% interest over 15 years. Future Value = about $352,000.
This agreement was drafted by Ehlers, via Briggs and Morgan. This agreement is currently being reviewed by Staff, the City Attorney, the City's economic development consultant Mike Mulrooney, and Life Fitness. Changes to this draft document are likely to occur by the time it reaches the City Council on 09/22. Attached to this case is a summary of the TIF Agreement (term sheet).
(1) TIF PLAN: Consider Support of Resolution to Modify Development District 1, Establish TIF District 15, and adopt TIF District 15 Plan. This step does not award TIF. This step allows the City to award TIF. Attached to this case is a TIF Plan Summary; and Staff recommends the EDA concentrate their time on this document.
--and--
(2) TIF AGREEMENT: Consider support of the attached Development Agreement (a.k.a. TIF Agreement). This would be considered the actual proposed TIF award to Life Fitness. Attached to this case is a TIF Agreement Term Sheet; and Staff recommends the EDA concentrate their time on this document.
BACKGROUND (Project)
This case was introduced to the EDA in July; at which time, detailed background information was provided on this project. Detailed background information on TIF was also included is said case. Attached is the July EDA MEMO.
BACKGROUND (TIF Plan)
Ehler's is managing the process to establish a new TIF district. Attached is an overview/ summary of the proposed district. Also attached is a resolution the City Council will consider on 09/22. Lastly, attached to this case is the TIF Plan. Again, the purpose of the TIF Plan is to allow the City to award TIF.
It should be noted, the attached TIF Pan includes a "maximum budget." This is a high and conservative total eligible project costs estimation ($1,468,320). This number is different than what is included in the attached TIF Agreement; which is the actual proposed assistance ($224,000). To be clear, the City is not proposing to award $1,468,320 to Life Fitness. The City is proposing to award $224,000 in present value (PV) terms.
BACKGROUND (TIF Agreement)
This agreement lays out the terms and conditions for the proposed TIF award; including the specific amount of TIF to be awarded. Present Value = $224,000 @ 5% interest over 15 years. Future Value = about $352,000.
This agreement was drafted by Ehlers, via Briggs and Morgan. This agreement is currently being reviewed by Staff, the City Attorney, the City's economic development consultant Mike Mulrooney, and Life Fitness. Changes to this draft document are likely to occur by the time it reaches the City Council on 09/22. Attached to this case is a summary of the TIF Agreement (term sheet).
Notification:
NA
Observations/Alternatives:
NA
Funding Source:
Tax Increment Financing, pay-as-you-go.
Recommendation:
This project enhances the City of Ramsey’s economic base by securing the operation of a Fortune 500 company’s manufacturing facility within Ramsey, Minnesota for the foreseeable future. The Life Fitness facility currently generates significant property taxes (about $150,000 annually) and significant jobs (greatest number of jobs in Ramsey, about 300 FT and about 100 PT. Life Fitness is nearly out of space to grow on their existing site in Ramsey.
By completing the currently proposed project, the City of Ramsey will see significant tax base and job growth into the foreseeable future (Expansion #1 and Expansion #2). Additionally, the City would see the removal of a blighted and vacant building located on highly visible intersection. This effort accomplishes the Ramsey EDA's three major goals: job creation (26+ plus jobs over two years), tax base creation ($73,873 total property taxes, Expansion #1 only), and improvement to the quality-of-life within our community (removal of a blighted building).
By not completing this project, it would be logical for Life Fitness to consider a new, long-term, location for their manufacturing facility. Additionally, the Health Quest property would likely remain in its current state for the foreseeable future.
Staff recommends moving forward with this proposed project; and supporting the motions outlined in this case.
By completing the currently proposed project, the City of Ramsey will see significant tax base and job growth into the foreseeable future (Expansion #1 and Expansion #2). Additionally, the City would see the removal of a blighted and vacant building located on highly visible intersection. This effort accomplishes the Ramsey EDA's three major goals: job creation (26+ plus jobs over two years), tax base creation ($73,873 total property taxes, Expansion #1 only), and improvement to the quality-of-life within our community (removal of a blighted building).
By not completing this project, it would be logical for Life Fitness to consider a new, long-term, location for their manufacturing facility. Additionally, the Health Quest property would likely remain in its current state for the foreseeable future.
Staff recommends moving forward with this proposed project; and supporting the motions outlined in this case.
Action:
Motion to recommend the City Council:
Adopt the attached Resolution to Modify Development District 1, Establish TIF District 15, and Adopt a Plan for TIF District 15.
--and--
Finalize and adopt the attached Development Agreement between the City of Ramsey and Brunswick Corporation.
Adopt the attached Resolution to Modify Development District 1, Establish TIF District 15, and Adopt a Plan for TIF District 15.
--and--
Finalize and adopt the attached Development Agreement between the City of Ramsey and Brunswick Corporation.
Notes: the title of the Development Agreement will change to TIF Agreement. The Council will review this case on 09/22. Staff welcomes suggested amendments and comments to the TIF Plan and TIF Agreement. Ehlers will be at this meeting to answer questions. Included in your case a summaries for both the TIF Plan and TIF Agreement--Staff recommends the EDA concentrate their time on the summaries.
Attachments
- Background (July EDA Meeting MEMO)
- TIF Plan (summary)
- TIF Plan (full document)
- TIF Agreement (summary)
- TIF Agreement (full document)
- Resolution
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Kurt Ulrich | Kurt Ulrich | 08/31/2015 03:32 PM |
- Form Started By:
- Patrick Brama
- Started On:
- 08/27/2015 04:30 PM
- Final Approval Date:
- 08/31/2015