8.6. SR 08-19-2013 City of
Elk - Request for Action
River
TO ITEM NUMBER
Mayor and City Council 8.6
AGENDA SECTION MEETING DATE PREPARED BY
General Business August 19, 2013 Clay Wilfahrt,Assistant Director of Economic
Development
ITEM DESCRIPTION REVIEWED By
Call for Public Hearing For Establishment of a TIF Brain Beeman,EDA Director and Jeremy
District Barnhart, CODD Deputy Director
REVIEWED BY
Cal Portner, City Administrator
Action Requested
Call for a public hearing regarding the creation of a TIF district in the Nature's Edge Business Center,
Lot 1 Block 3.
Background/Discussion
Preferred Powder,LLC submitted an application for tax abatement for$576,939 to the city and the
county for the construction of a 100,000 square foot manufacturing facility in the city-owned Nature's
Edge Business Center. The city approved abatement in the amount of$576,939 on July 1. The county
held a public hearing on August 7, 2013, to consider the abatement,but tabled the issue to August 13 due
to a concern over the city's park dedication fee policy as it applied to another project.
On August 13, the county approved a reduced abatement of$400,000. The Board indicated that the full
amount of abatement was unnecessary for the project to proceed. The Board did not identify
documentation supporting the claim. The original amount was requested as a result of an independent
financial analysis conducted by Springsted,Inc.,in accordance with city abatement policies.
Since August 13, the developer,his banker,and builder have approached the city with concerns about the
viability of the project with the reduced subsidy amount. The developer is also working under restrictive
timelines. Both the developer and banker stated that the project wouldn't happen without the full
amount of assistance. Our financial advisor indicated that creating a Tax Increment Finance district
would provide the necessary amount funding to support the project.
Staff requests the Council call for a public hearing to create a new TIF district. Calling for a public
hearing is not necessary per state statute,but it will indicate the Council's support for the financing. State
statute requires a 30-day notice to the school district and the county in advance of the public hearing,
unless they waive the notice. Both entities were sent letters and draft resolutions requesting they waive
the 30-day notice period to enhance the chances the project is complete before the end of the
construction season. With the waivers, the city could hold the public hearing on September 3.
Financial Impact
Details on the financial impact of the TIF district will be provided at the public hearing.
P O W E R E D BY
NaA f RE]