Discuss Economic Development Prospect Foxtrot

Prospect Foxtrot is an economic development prospect interested in locating their operations to the City of Ramsey.  Prospect Foxtrot is a manufacturing business located in northwest region of the Twin Cities,  they currently employ 24 people and have a 25,000 square foot manufacturing facility.  The current host City of Prospect Foxtrot does not have adequate space available to allow for expansion.

Prospect Foxtrot is interested in relocation of their business as soon as possible, as they have recently reached an agreement to sell their current facility.  The ideal situation for Prospect Foxtrot is a 12 acre site, that is pad ready.   Prospect Foxtrot would like to complete their expansion in phases.  The first phase would include a new 77,000 square foot facility, with 50 total employees.  The second phase would include a 48,000 square foot expansion (125,000 total) and significant additional job growth.

Unfortunately, the City of Ramsey does not have any 12 acre sites available today that are zoned correctly (i.e. employment district).  However, because the prospect can complete their project in phases, the City was able to identify a solution--the City's current Public Works campus.  Please review the 'observations' section for more information on the proposed solution.

Purpose of Case

• Introduce Prospect Foxtrot to Council
• Review Concept Plan (proposed solution)
• Review Timeline
• Provide Staff with general input regarding the proposed project
• Provide Staff with preliminary input regarding economic development assistance
• Authorize Staff to introduce Sale Ordinances (5/28/2013 Regular Session)
• Authorize Staff to introduce ordinance to Vacate Right of Way (6/11/2013 Regular Session)

The City's current Public Works campus and an adjacent City-owned parcel has been identified by Staff as a solution for Prospect Foxtrot's desired project.  The public works campus consists of five separate parcels totaling over 13 acres in size (see reference map). 

Today, the two eastern lots are heavily used by the City's Public Works Department, the south central lot is moderately used and the north central and western lots are vacant (see availability map).

It is Staff's assumption the Public Works campus will be vacated over the coming decade since the City has acquired land immediately to the east (i.e., Bury and Carlson) for that purpose.  With that in mind, and because Prospect Foxtrot is willing to complete their project in phases, Staff has developed a proposed project solution (see proposed project map).

The proposed solution would require a number of different agreements/transactions in order to meet the needs of Prospect Foxtrot.  In general, listed below are the required steps.

• Sell the western three parcels
• Lease back a portion of the south central parcel (salt shed) for five years
• Place an option to purchase agreement on the two eastern parcels for ten years (which would allow for phase II of the proposed project--see phase II map)

Prospect Foxtrot, the EDA, the State and City Staff have reviewed the proposed solution and support moving the project forward.

Because the Prospect Foxtrot would like to vacate their current location as soon as possible, the City of Ramsey will need to efficiently respond to the proposed project/prospect.  A number of items need to happen in order to move the proposed project forward quickly; please reference the attached timeline.  Therefore, Staff will be requesting Council authorization to begin a number of processes on May 28.

Lastly, Prospect Foxtrot has indicated interest in City financial assistance for the proposed project (known as a "Business Subsidy).  Staff is working with the prospect now to attain detailed information on said request.  It is likely Prospect Foxtrot will be requesting a land write down (reduced land sale price).

It is not uncommon practice for City's to financially assist economic development projects in some fashion.  The City of Ramsey recruited a majority of its larger employers (located in Ramsey's Industrial Parks) utilizing business subsidies; specifically, TIF land write downs.  Staff would like to discuss this topic with the City council.  Staff needs to understand if the City Council has an appetite to receive a request for a business subsidy from prospect Foxtrot.  The City has adopted policies on businesses subsidies; which Staff intends to utilize (see attached business subsidy policy).  Receiving a request does not obligate the City Council to a business subsidy.  NOTE: The EDA briefly reviewed this case on May 16 and invited Prospect Foxtrot to submit a formal request for a business subsidy.

Staff had a chance to meet with Prospect Foxtrot representatives and tour their existing facility.  It is Staff observation Prospect Foxtrot is a quickly growing successful business with a strong outlook.  Prospect Foxtrot can provide new tax base, new jobs and a quality business campus for the City of Ramsey.   Additionally, it is possible to structure an economic development agreement to provide a partial funding source for the future public works campus.  Lastly, a number of the Public Works campus parcels were identified as surplus City owned land in 2012; and are currently tax exempt.  Developing the Public Works campus would partially achieve a previous Council strategic goal--reduce the inventory of surplus City owned land.

Because Prospect Foxtrot's timeline (phased approach) matches with the City's timeline to vacate the current public works campus (may require discussion), Staff believes the proposed solution is logical/beneficial and should be considered by the City Council for approval as outlined below.

1. Provide Staff with general direction regarding the proposed project
2. Provide Staff with general direction regarding economic development assistance
3. Authorize Staff to introduce Sale Ordinances (5/28/2013 Regular Session)**
4. Authorize Staff to introduce ordinance to vacate right -of -way (6/11/2013 Regular Session)**

**If the proposed project doesn't move forward, the City is NOT put in a compromising position by passing ordinances now.  Said ordinances do not obligate the City to sell land or vacate ROW; they simply ALLOW the City to do so.  Prospect Foxtrot will need to enter into a formal purchase agreement with the City and complete a formal vacation of ROW application before either action is can move forward.  The Council will have a chance to review/approve both items.  However, waiting to begin the ordinance process will push the project timeline out; and could potentially make the proposed Ramsey solution unrealistic for the prospect. 

NA

1. Provide Staff with general direction regarding the proposed project
2. Provide Staff with general direction regarding economic development assistance
3. Authorize Staff to introduce Sale Ordinances
4. Authorize Staff to introduce ordinance to vacate right-of -way