5.4. SR 08-14-2000"ity of
Item 5.4.
TO:
Elk River City Council
FROM:
Cathy Mehelich, Director of
Economic Development
DATE:
August 10, 2000
SUBJECT:
Consider Performance/Assistance
Agreement with David & Carole
Ripplinger
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Per state law, any subsidy agreement issued by the EDA must receive
approval by the City Council.
Background
David & Carole Ripplinger have proposed to construct a 15,200 square
foot building to relocate and expand their business (Track of the Wolf,
Inc.) to Elk River and also to provide leasible light industrial space on
half of a site currently owned by the EDA (located at Joplin Street &
183rd Ave).
The Ripplingers have requested that the EDA provide the following
assistance in order to encourage the development project to occur:
· Subdivide the property into two lots $ 8,000
· Transfer the south half of the property $165,400
to David & Carole Ripplinger at a 100%
write down of market value
· Split the cost of water/sewer installation $ 2,500
Total value of assistance requested
$175,900
Current market value of the 4.36 acres is $330,800. The City of Elk
River purchased the property in December 1997 with excess tax
increment finance revenues in the amount of $198,750. The property
was then transferred to the EDA for sale and marketing.
Limitations exist on the EDA sale of the property since the purchase
was last funded by tax increment finance dollars. Any sale proceeds
would be considered increment and would need to be returned to the
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
County for distribution. The source of funds for subdivision expenses
and water/sewer installation would come from the EDA reserve fund.
Staff has evaluated the Ripplinger Tax Increment Financing
Application and has determined that subsidy assistance is appropriate
for the project based on the public purposes and project goals to be met
by the development.
The public purposes to be met by the development include 1) Enhance
& diversify the City's industrial tax base, and 2) Contribute to the
fulfillment of the City's Strategic Plan for Industrial Development,
and 3) Job creation. The project has potential to stimulate additional
private investment in the West Business Park and also provide
additional leasible light industrial space in Elk River.
The project goals for the subsidy includes the construction of a
minimum of 15,000 square feet of light industrial space and the
creation of 4.5 permanent full-time equivalent employee positions (in
addition to the existing 5 full-time employees) at wages of at least
$15.00 per hour, exclusive of benefits.
Requested Action
The EDA will make verbal recommendation to the Council for
consideration of the attached Resolution 00-__ Approving Subsidy
Assistance to David & Carole Ripplinger following its public hearing.
Attachments · Site Map
· Tax Increment Financing Application - David & Carole
Ripplinger
· Performance/Assistance Agreement with David & Carole
Ripplinger
· City Council Resolution 00- Approving Subsidy
Assistance to David & Carole Ripplinger
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