3.3. SR 07-13-1998~ity of
iver
MEMORANDUM
Item # 3-~-
TO:
f FROM:
DATE:
SUB,JECT:
Mayor and City Council
Paul T. Steinman, Director of Economic
Development
July 1, 1998
Resolution calling public hearing for
TIF No. 20 (Supermats, Inc.)
Consider Resolution 98-
No. 20
Calling a Public Hearing for TIF District
Issue
This is the first City Council action which is necessary in the case of
establishing a tax increment district to begin the schedule and process
of completing a tax increment plan.
Overview
In July 1997, the EDA purchased the last remaining lot in the Elk
River Industrial Park for approximately $65,000. The EDA now has a
request before it to provide this lot at a zero land cost to the developer
for the development of an industrial project. Supermats, Inc. has
submitted a tax increment financing application along with payment
of $5,000 to process such request. Supermats, Inc. is proposing the
construction of an approximately 35,000-40,000 square foot building
on this 2.39 acre lot. Supermats is the manufacturer and distributor
of rubber mat products made from recycled tires. Staff began working
with Supermats over a 18 months ago to find them a location to lease
space here in Elk River. At that'time it was made known that the
company would eventually want to construct and own its own facility.
Supermats is currently located in a 5,000 square foot leased space in
the building located behind E & O Tool. They also have
approximately 13,000 square feet of space in Brooklyn Center.
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
S :/council/tif20mm
July 1, 1998
Page 2
Supermats proposal is to combine its manufacturing, warehousing,
and distribution in one location in the Elk River Industrial Park.
In this situation, the ability of the EDA to provide this lot to the
developer at zero land cost is a significant incentive. The developer is
able to use the equity in the land to minimize its up front dollars into
the project. This scenario as it is being proposed in concept to the
developer has helped solidify Supermats commitment to complete this
project in Elk River. This "instant equity" concept is also no different
than what is being offered to companies like Supermats by other
communities.
The EDA is considering a resolution at its meeting on 7/13/98 asking
the City Council to call this public hearing.
Attachments
· Resolution 98-
· Schedule of Activities for TIF No. 20
· Supermats TIFApplication
Recommendation
Staff recommends the Council approve Resolution 98- calling a
public hearing for TIF District No. 20 on August 24, 1998, at
approximately 6 p.m., in the City Council Chambers at City Hall.
S:/council/tif20mm
RESOLUTION 98 -
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. 20
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, August 24,
1998, at approximately 6 p.m., to hold a public hearing on the proposed
modification of Development District No. 1 and the establishment of Tax
Increment Financing District No. 20 (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 Modification to 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 10 nor more than 30
days prior to August 24, 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 13th day of July,
1998.
ATTEST:
Henry A. Duitsman, Mayor
Sandra A. Peine, City Clerk
THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY AND
THE ELK RIVER CITY COUNCIL
FOR THE
ESTABLISHMENT OF TAX INCREMENT DISTRICT NO. 20
(SUPERMATS, INC.)
(an economic development district)
July 13, 1998
July 13, 1998
July 23, 1998
July 24, 1998
July 28, 1998
August5,1998
August10,1998
August12,1998
August24,1998
August25,1998
Schedule
EDA requests City Council to call for a public hearing to be
held on August 24, 1998 to establish Tax Increment
Financing District No. 20.
City Council calls for a public hearing to be held on August
24, 1998 to establish Tax Increment Financing District No.
20.
Complete Plan.
Plan forwarded to School District and County Board (at
least 30 days prior to public hearing)
Planning Commission reviews Plan for compliance with
the comprehensive plan.
Send public hearing notice and map to local paper
EDA approves Plan.
Date of publication of hearing notice and map (at least 10
days but not more than 30 days prior to public hearing)
City Council holds public hearing on the establishment of
Tax Increment Financing District No. 20 and passes
resolution approving Plan.
Send Plan to County/State for certification
TI20sch
o6 1.2 ~.~ 23:.5:' '~4417425 CITY, ELK Ri~ER '~006,0n9
APPLICAT~/ON FOR TAX INCRE3ffENT FINA~N:CING
CIT"T OF ELK RI~v-Ei~, 1ViXNLT~-ESOTA
A P P L I CANT
Business ikrame: _ Sup~_M~ + ?,
A~d. ress:
Telephone:
Officers: Bryan L. Jones
Bryan L. Jones
Inc,_
1810 Ereewav Roulevard
Brooklyn Center, MN 55430
612-585-9~06
Contact Person:
Title:
President, CEO
Business Form (Corporation, Paztnership, Etc.): C Corporation
Years In Oper¢fion: 1 1
Smles/P~evenue$: .$ 2.8 Million
Brief Description of Business, Principal Produc~, otc:
Manufacture, Sa~. and D~t.r~]~,~.~OU oF
~loorin, uro_dllct s
Has applican~ ever fried for b~nk~uptcy? Yes
If yes, provide detmils on separate page(s),
I'qo X
Has applicant ever defaulted on any bond or mortgage
commitment? Yes No X
If yes, provide details on separate page(s).
Does app]/cant have conlmitnnents for conventional Mnanc/n~ for
the project? Yes No __
Please ~stthree ~nancin~re~rences: (Nazn~Address/Contact/Ph one)
Norwest Bank, 8041 Brooklyn Blvd, Brooklyn Park,MN
Richard Seaton, Vice President, 612-424-7518
~oyota Motor Cr~k..Cnrp__, P 0 Box 2958¢ Torr~nce-~CA
Brett Beals, Commercial Finance Supervisor 310-787-1310
Nameand Adctressofapp~cant's]eg~ counselandaccoungan::
Donald C. Willeke, ESQ. Mike ~issell (C. omprehen$ive Acct)
201Ridgewood Avenue 7100 Northland Circle ~308
Minneapolis, MN 55403 Minneapolis, MN 55428
( 6. 12 9,5 13:S2 '~441742S CITY:ELi{ RII£R i~_~00? oa9
P]~OPOSE]3 PROJEC~T
Describe Project:
40,000 sq. ft.
New construction of a 35,000 to
facility to house all of SuperMats,
Inc.' s
operations:
manufacturing,
Loca~on: Industrial Park
Elk River, MN
sales, administration
and distribution.
Site Plan AttacheR: Yes
T~.~e of Proiac.t:
Commercial
~ew Construction
Industria/ x ResfdentiaI
Expansion Rehab
JOB CREATION
Current Number of Employees:
Current P~olk (Year-End
Number of Jobs Created:
Nu~nber of Jobs Retained:
F~viseR Payroll: ( Year-End
8
1997) $549,425.00
12
2O
1999) $760,000 - estimated
P~ROJECT COSTS
Land Acquisition:
Si~e Development:
Constru¢~on:
Machinery & Equipment:
.4.rckitectur~ and
Eng:h:~eeri.ug Fees
L~¢al Fees
Interest During Const.
Debt Service tleserve
ConMmgen~es
TOTAL
$_
$
$~
S
$
S_OURCE O.F FI, NA_~CING
Conventional Loan
Equity
SBA Loan
I{evenue Bond
Tax Increment FinancL~g
Grant(s)
Other
TOTAL
$
$
$
$
$
$
$
/; 3z o , ~
6:12. 95 13:52 '~44174'25 CITY.ELi{ RIVER
CO,~'STR U CTION A_\'D D ES~GN
[%'~me and address of arc~h_itec% engineer and contractor for project:
Tar~e.t Date~:
Start of Construction:
Cons~uction Complete&
September 1
December 1
Finished Market Vatue of Project: $. 1.1 Million
_S_TATEN~NT OF PUBLIC PURPOSE
Describe why the proposed development or redevelopment would not
reasonably be expec~cl to occ~ solelv t~oug~ p~wa~ ~vestment
witch ~e fores~able ~t~e and :h~refore t~e use of Tax Increment
Many communities offer incentives to bring business
to their cities. SuperMats currently has its
manufacturinq plant in Elk River and its distributions,
sales and administration operations in Brooklyn Center.
SuperMats, Inc. while in sound financial condition
and with good growth potential, need help to get the '
size building it needs to house all operations
together under one roof in Elk River.
T~e undersi~aed, (a) (the) President, CEO
of applicant, hereby represents a~d warrants to the City th~ Cae) (she) has
carefully reviewed Lhi$ application, and that the statements anti ~uformation
contained herein and submitted herewith are accurate and complete to the
best of the unders£~ed's knowledge and be]/ef.
Dated: June 26, 1998
SuperMats, Inc.
The City reserves the hght to require additional information and supportLng
~ata from the app~cant' a~ar the ~ing of this Application.
SUPERMATS, INC.
O1318O
5203~ 0.00 0.00
5000.00
O6/26?98
00013180
$ 5000,00
1810 FREEWAY BLVD. PH. 612~585-9006
BROOKLYN CENTER, MN 55430
NORWEST BANK MINNESOTA N.A.
Crystal Office
7000 Bass Lake Road
Crystal, Minnesota 55428
17-1/910 516
CHECK NO.
000131 80
013180
PAY
TO THE
ORDER
OF
** FIVE THOUSAND DOLLARS AND O0 CENTS **
CITY OF ELK RIVER
DA~ AMOU~
06/26/98 ****5,000.00
,"Oi~laO,' ':O~iO000iq~: ~i&OOR6R?~"