7.2. SR 01-17-2012REQUEST FOR ACTION
TO ITEM NUMBER
Ma or and Ci Council 7.2
AGENDA SECTION MEETING DATE PREPARED BY
Public Hearing January 17, 2012 Annie Deckert, Director of Economic
Develo ment
ITEM DESCRIPTION REVIEWED By
Close Out the 2007 Minnesota Investment Fund MNDEED Cal Portner, Ci Administrator
Grant for Sportech, Inc. Expansion Project REVIEWED BY
ACTION REQUESTED
Hold public hearing to close out MN Investment Fund MNDEED grant. No other action on this item is
required.
BACKGROUND/DISCUSSION
Founded in 1994, Sportech, Inc. is a leader in original equipment manufacturer (OEM) thermoformed
plastic products. They design and manufacture parts for a variety of motorsports vehicles including
snowmobiles, motorcycles, and all terrain vehicles. Sportech uses state-of--the-art technology to design
and manufacture custom made performance products.
Sportech, Inc. has received the following awards:
• 2009 Business Retention & Expansion Award from the Economic Development Association of
MN.
• Two-time recipient of Minnesota Business Journal's "Growth 50" Award, recognizing the top 50 fastest
growing privately-held companies in Minnesota.
• Multiple recipient of Ehlert Poiversfiorts Business magazine's "Nifty 50" Award, recognizing innovation
in product design.
• Named one of the 100 most influential companies in the powersports industry by Ehlert Pou~ersports
Business magazine.
• Recognized by multiple OEM customers for quality, delivery, and overall excellence.
• Awarded US Patent (7,044,530 B1) for design innovations including aquick-release, tool-less ATV
windshield mounting system.
• Awarded US Patent (7,360,819 B1) for design innovations of the quick-release motorrycle
windshield.
• Multiple patents pending.
President and owner Chris Carlson has provided tours and presented at several events for Minnesota
Manufacturers Week throughout the years and has served on both the Economic Development Authority
Finance Committee and Branding Subcommittee. Staff has invited Mr. Carlson to the City Council
meeting to speak briefly on the status of his company.
P®wE~E® ar
N:\Public Bodies\Ciry Council\Council RCA\Agenda Packet\01-17-2012\Sportech.docx
In October 2008, Sportech, Inc. completed their fifth expansion into their existing 96,000 square foot
state-of--the art manufacturing facility located in Northstar Business Park.
The city received a $500,000 grant in October 2008 from the Minnesota Department of Employment and
Economic Development (MNDEED) Minnesota Investment Fund program. The funds were
subsequently loaned to Sportech, Inc. by the city to help them construct their current headquarters in
Northstar Business Park. Per the business subsidy agreement, Sportech was to retain 64 full-time
employees and create 25 new full-time jobs at a base wage of not less than $12.00/hr within two years of
building occupancy.
In October 2010, Sportech added 14 full-time employees and requested aone-year extension from
MNDEED to reach their job creation and wage goals. The requested was approved by MNDEED in
November 2011.
As of October 2011, Sportech had created 33 full-time jobs bringing their full-time employee total to 97
employees, exceeding their job creation goals. Sportech has continued to add full-time jobs and currently
has 102 full-time employees.
To close out the grant with DEED, the City Council must hold a public hearing to discuss the outcomes
of the grant and allow citizens the opportunity to present their views.
FINANCIAL IMPACT
The city has received payment for the entirety of the loan. Per the agreement with DEED, the city will
retain the $500,000 to be used as a revolving loan fund for future economic development purposes.
Action Motion by Second by Vote
Follow Up
N:\Public Bodies\City Council\Council RCA\Agenda Packet\O1-17-2012\Sportech.docx