3.8. SR 12-15-1997.,y of
**Item #3.8**
River
MEMORANDUM
TO:
Mayor & City Council
~FROM:
Paul T. Steinman, Director of Economic
Development
DATE:
December 15, 1997
SUBJECT:
Consider Resolution Calling for a
Public Hearing to be Scheduled for
Creation of TIF District No. 18 (Morrell
Companies)
Issue
The issue before the City Council at this time is to call for a public hearing to
be held on the modification of Development District No. I and the
establishment of Tax Increment Financing District No. 18. This tax
increment district will be established to provide financial assistance to the
Morrell Companies for relocation of their trucking operation from the corner
of School Street and Jackson to 171st Avenue.
Background
The purpose of the attached resolution is to start the process of establishing a
tax increment district as provided in the Minnesota State Statutes. Attached
also is a preliminary schedule indicating the various meetings and timelines
which are to be met for establishment of this tax increment district. Morrell
Companies have requested tax increment assistance in the amount of
$300,000, which is 15 percent of the projected finished market value of the
project - $2 million. The EDA has discussed that the details of this request
need to be further examined prior to this level of commitment being made by
the City of Elk River. The EDA will be holding a worksession in January to
further discuss the details of the Morrell Companies tax increment request.
Recommendation
Staff recommends approving Resolution 97- calling for a public hearing
by the City Council on the modification of Development District No. i and the
establishment of Tax Increment Financing District No. 18. This public
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
hearing shall be held on Monday, April 6, 1998, at approximately 6 p.m., in
the Council Chambers at City Hall.
RESOLUTION 97 -
A RESOLUTION FOR THE CITY OF ELK RIVER
A RESOLUTION CALLING FOR A PUBLIC HEARING
BY THE CITY COUNCIL ON THE MODIFICATION OF
DEVELOPMENT DISTRICT NO. 1 AND THE ESTABLISHMENT OF TAX
INCREMENT FINANCING DISTRICT NO. 18
BE IT RESOLVED by the City Council (the "Council") for the City of Elk River,
Minnesota (the "City"), as follows:
Section 1. Public Hearing. This Council shall meet on Monday, April 6, 1998,
at approximately 6 p.m., to hold a public hearing on the proposed
modification of Development District No. I and the proposed establishment of
Tax Increment Financing District No. 18 (an Economic Development Tax
Increment Financing District), all pursuant to and in accordance with
Minnesota Statutes, Sections 469.090 through 469.1081, inclusive, as
amended, and Minnesota Statutes, Section 469.174 through 469.179,
inclusive, as amended, in an effort to encourage the development and
redevelopment of certain designated areas within the City; and,
Section 2. Notice of Public Hearing, Filing of Program and Plan. Staff is
authorized and directed to prepare the Development Program and the Tax
Increment Financing Plan (the "Program and Plan") and to forward
documents to the appropriate taxing jurisdictions including Sherburne
County and Independent School District No. 728. The City Administrator is
authorized and directed to cause notice of the hearing, together with an
appropriate map as required by law, to be published at least once in the
official newspaper of the City not later than ten nor more than 30 days prior
to April 6, 1998, and to place a copy of the Program and Plan on file in the
City Administrator's office at City Hall and to make such copy available for
inspection by the public.
Passed and adopted by the City Council of the City of Elk River this 15th day of
December, 1997.
ATTEST:
Henry A. Duitsman, Mayor
Sandra A. Thackeray, City Clerk
THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY AND
THE ELK RIVER CITY COUNCIL
FOR THE
ESTABLISHMENT OF TAX INCREMENT DISTRICT NO. 18 (Morrell)
(an economic development district)
Schedule
December 8, 1997
EDA requests City Council to call for a public hearing to be
held on April 6, 1998 to establish Tax Increment Financing
District No. 18.
December 15, 1997
City Council calls for a public hearing to be held on April
6, 1998 to establish Tax Increment Financing District No.
18.
January12,1998
EDA worksession - discuss details of Morrell Development
Agreement. (Alternate January 15 or 29)
February 2, 1998
Complete Plan.
February 9, 1998
EDA approves Plan. (Alternate: Mar. 9, 1998)
February24,1998
Planning Commission reviews Plan for compliance with
the comprehensive plan. (Alternate: Mar. 24, 1998)
March 2,19988
Plan forwarded to School District and County Board (at
least 30 days prior to public hearing)
March 18, 1998
Send public hearing notice and map to local paper
March 25,1998
Date of publication of hearing notice and map (at least 10
days but not more than 30 days prior to public hearing)
April 6, 1998
City Council holds public hearing on the establishment of
Tax Increment Financing District No. 18 and passes
resolution approving Plan.
April 7, 1998
Send Plan to County/State for certification
TI 18sch
APPLICATION FOR TAX INCREMENT FINANCING
CITY OF ELK RIVER, MINNESOTA
APPLICANT
Business Name: ]~ORRE]~L TI~AN~FER INC: [
Address: 809 JACKSON AVE. EI2i RIVER,
Telephone: 441-2011 441-9151
OflScers: Larry V. Morrell
Arlyce Morrell
MORRELL & MORRELL INC..
MN. 55330
Contact Person:
Title: MGR.
Terry Morrell
Corporation
Business Form (Corporation, Partnership, Etc.):
Years In Operation: 35 + Years
Sales~Revenues: $ 6i5million +
Brief Deacription of tlusiness, Principal Products, etc:
l'ransportatlon
Has applicant ever filed for bankruptcy? Yes ,,
If yes, provide details on separate page(s).
No x
Has applicant ever defaulted on a~y bond or mortgage
commitmefit? Yes No
If yes, provide det. il~ on separate page(s).
Does applicant have commitments for conventional i~nancing for
the project? Yes × No__
Please list three financing references:
(Name/Address/Contact/Phone)
Bank of Elk River 630 Main St. Elk River, MN. 55330
IST National Bank 723 Main ST. Elk River, MN. 55330
Twin City Mack 2195 W. County Rd C St Paul, MN. 55164
Name and Address of applicant's legal counsel and accountant:
~ ~ Ce 6~00 France ~,,~ ~ M~ ...... ~ xea
.PROPOSED PROJECT
Describe Project: Transportatio, n facility
Office, Maintance, Distribution center
Location: 171st Ave. Elk River, MN.
Site Plan Attached: Yes. x' No.,
Type of Pro~ect:
Commercial x
New Construction
Industrial
x Expansion...
Residential
Rehab
,JOB CREATION
Current Number of Employees: lo8
Current Payroll: ~3o, 272.23 bi weekly
Number of Jobs Created: 15%
Number of Jobs Retsi~ed: all
Revised Payroll: 18z increase
PROJECT COSTS
Land Acquisition:
Site Development:
Construction:
Machinery & Equipment:
Architectural and
Engineering Fees
Legal Fees
Interest During Const.
Debt Service Reserve
Contingencies
$
$
$
$.
$,
$
$
$
TOTAL
SOURCE OF FINANCING
Conventional Loan
Equity
SBA Loan
Revenue Bond
Tax Increment Financing
Grant(s)
Other
$
$
$
$
$
$
$
3~0~ ~
TOTAL
COXSTRUCTION AND DESIGN
Name and address of' architect, engineer and contractor for project:
-~-~~h o rn
o ers Dr.
Ro e.f~.~z_ MN. 55374
Start of Construction: March ' 98
Construction Comple~ed:J.,uly '98
Finished Market Value of Project: $ 2.5 million
STATEMENT OF PUBLIC PURPOSE
Describe why the proposed development or redevelopment would not
reasonably be expected to occur sole]y through private investment
within the foreseeable future and therefore the use of Tax Increment
Financing is deemed necessary:
See attached letter
The undersigned, (a) (the)
of applicant, hereby represents and warrants to the City that (he) (she) has
carefully reviewed this application, and that the statements and information
ontainedherein and submitted herewith are accurate and c plete to
est of the undersigned's knowledge and~ ~ the
The City reserves the right to require additional information and supporting
data from the applicant' after the ~Hng of this Application.
PLEASE ATTACH:
1. Site P~mC.~u~t with Submittal Requirements of the Building and Zoning -~epartment.
2. Au~ted Financial Statements or Tax Returns from the Past Two Years. ~
3. Current Financial Statement
4. 3-Year Pro Forma Analysis
5. Other Information Related to the Project
6. Application Fee
s:\finance\taxpolcy