5.0.-10.0.. EDSR 02-08-1993 -,(
tyof TO: ECONOMIC DEVELOPMENT AUTHORITY
lkRiver FROM: WILLIAM RUBIN, ED COORDINATO
U ' .
DATE: FEBRUARY 3, 1993
SUBJECT: AGENDA MEMO FOR FEBRUARY 8, 1993
EDA MEETING
5 . Financial Update
The following is a summary from Finance Director, Lori
Johnson:
Revolving Loan Fund
The Revolving Loan Fund had a cash balance of
$207, 125.03 as of January 31, 1993, excluding January
interest which has not yet been allocated. All loan
payments are current.
The Economic Development Authority had a cash balance
of $63,655. 10 as of January 31, 1993.
• This is an informational item only and no action is
requested.
6 . Tescom TIF Plan
Background on this topic, including an outline of the
proposed timetable to complete the creation of TIF
District No. 9 is found in a separate memo.
7 . Set Public Hearing Date for the Sale of EDA-Tescom Site
State law requires that an EDA conduct a public hearing on
the proposed sale of any property owned by the agency.
The proposed sale relates to the Tescom Corporation
expansion project in the Elk River Industrial Park and is
consistent with the property to be outlined in the TIF
Plan. A draft of the public hearing notice is included in
the agenda packet. The public hearing is tentatively
scheduled for March 8, 1993, immediately following the
hearing on the TIF Plan.
ACTION REQUESTED
The EDA is asked to authorize a public hearing on March 8,
• 1993, to discuss the terms and conditions of the sale of
property in the Elk River Industrial Park to Tescom
Corporation.
720 Dodge Avenue N.W., Elk River, Minnesota 55330 (612) 441-7420
8 . EDA Main Street Redevelopment Site
At its January meeting, the EDA authorized Commissioners
Gongoll and Dwyer, along with Executive Director Pat
Klaers and Bill Rubin, to meet with Gary Santwire of
R.E.P. , Ltd. , to determine if Mr. Santwire was interested
in pursuing this redevelopment project. The meeting was
held on January 22 and a number of issues were identified
and discussed. At the end of the meeting, Mr. Santwire
agreed to provide additional information ( finished market
value, incentives required, etc. ) for further analysis by
staff. It was generally concluded, however, that this
information would not be available until the March meeting.
Meanwhile, other developers continue to explore
redevelopment options on the Main Street site. Toward
that end, staff is still optimistic that one or more of
these proposals will be coming forward for consideration
by the EDA.
Commissioners Gongoll and Dwyer may have additional
insights from the January 22 meeting to share with the EDA.
9 . Annual Report
• Each City department prepares an annual report on its
activities for presentation to the City Council and/or
related Board. Past practice dictates that the
presentation on economic development activities be made at
an EDA meeting. A copy of the annual report is enclosed
in the agenda packet and a short presentation will be made
during the EDA meeting.
10. Prospect Status Report
The Prospect Status Report has been sent under separate
cover.
•
of
TO: ECONOMIC DEVELOPMENT AUTHORITY
1kRiver FROM: WILLIAM RUBIN, ED COORDINATOR V
DATE: FEBRUARY 3, 1993
SUBJECT: TAX INCREMENT FINANCING ASSISTANCE
(Tescom Corporation, Inc. )
INTRODUCTION
Tescom Corporation, Inc. , 12616 Industrial Boulevard, seeks an
alternative site for its expansion project. This request is
outlined in greater detail in a February 1st letter from Tescom
Vice President, Ed Cunnington.
An alternative site is sought largely as a result of Tescom
completing soil borings and analysis on the vacant parcel
adjacent to its existing facility. This is the property the
EDA intended to convey to Tescom. Based on the borings and
uncertainties with potential wetland mitigation, an alternative
site is required to accommodate Tescom's expansion. This, in
turn, requires the preparation of a new Tax Increment Financing
(TIF) Plan.
•
BACKGROUND
In June, 1992, the EDA and City Council developed a TIF Plan at
the request of Tescom in order to assist the company with its
proposed 30,000 square foot expansion project. The TIF Plan
was subsequently approved by the City Council on August 3, 1992 .
Because an alternative site is now pursued, resulting in
substantially different TIF budget numbers, the preparation of
a new TIF Plan is required. Below is a proposed timetable to
complete the Tescom TIF Plan:
February 8 - EDA authorizes the development of a TIF
Plan; EDA schedules a public hearing to
consider the TIF Plan; EDA also recommends
that the City Council authorize a public
hearing to consider the adoption of a TIF
Plan.
February 8 - City Council sets public hearing date to
consider TIF Plan.
Mid February- TIF Plan is sent to School District and
• County.
February 16/17 - County Board Meeting.
720 Dodge Avenue N.W., Elk River, Minnesota 55330 (612) 441-7420
• February 23 - School Board Meeting.
February 23 - Planning Commission reviews TIF Plan.
February 24 - Public hearing notices published in the Star
News .
March 8 - EDA conducts public hearing; reviews and
adopts TIF Plan.
March 8 - City Council conducts public hearing on TIF
Plan.
Staff is again proposing the creation of an "Economic
Development TIF District" . This is consistent with the
previously-approved Tescom TIF assistance in 1992 .
ACTION REQUESTED
The EDA is asked to:
a. Prepare a revised Tax Increment Financing Plan for
the Tescom expansion;
• b. Schedule a public hearing for March 8, 1993, to
consider the adoption of said Plan; and,
c. Recommend that the City Council consider scheduling a
public hearing for March 8, 1993, to consider the
adoption of the Plan.
RECOMMENDATION
I recommend that the EDA authorize the preparation of a TIF
Plan; I further recommend that the EDA schedule a public
hearing for March 8, 1993 .
•
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(612)441-6330 FAX (612)441.7455 Telex:TESCOM ELKR 290488
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February 1 , 1993
Mr. Bill Rubin
City of Elk River
720 Dodge Avenue
Elk River, MN 55330
Dear Bill,
I am writing regarding our telephone conversation on Friday and the
concerns over the suitability of Lot 8 in the Industrial Park for
• Tescom's expansion plans.
These concerns are not only for the time delay and uncertainties
surrounding the necessary approvals from the various governmental ,
agencies for the wetland construction, but also the costs.
Upon review of the preliminary soil investigations and preliminary
civil engineering studies indications are that site preparation
will be extremely expensive. An estimate for partial requirements
for fill is 13 ,400 cubic yards. This would be used to: replace a
considerable amount of unsuitable soil under the eastern third of
the building and mat area, bring the site to the design grade, and
fill the wetland area. In addition more fill will be required to
bring the parking lot to design grade. This has not yet been
calculated since, do to the stockpiled soil, there is no revised
topographic drawing.
Further, due to the traffic load from equipment accessing the
stockpiled soil , the frost level has dropped to as low as four
feet. This fact will force greater delays for the excavation of
some areas.
The expenses implied in the above are significantly beyond those
which were expected and beyond those which would add any value to
the lot. Therefore, Tescom does not find it in their interest to
incur those costs either directly or through Tax Increment
Financing (and the "make whole" provision) with the increased time
•
which would be required for payback.
Pressure Controls Division
Mr. Bill Rubin
• February 1, 1993
Page 2
For the reasons stated above, I am, on behalf of Tescom
Corporation, asking the City of Elk River to consider an alternate
site to meet our needs for expansion. If the City finds this
acceptable I would appreciate a meeting at the earliest possible
time to avoid any further delays to our schedule.
Best regards,
(kriLfre„.„-E:e...0-e4,..,./—
Ed unnington
EAC/ca
cc: D. Glesmann, Tescom Corporation
R. Hackett, Gray, Plant, Mooty, Mooty and Bennett
•
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•
NOTICE OF PUBLIC HEARING
ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF ELK RIVER
Pursuant to Minnesota Statutes, Section 469. 105, Subdivision 2,
the Economic Development Authority for the City of Elk River
(the EDA) will conduct a public hearing on Monday, March 8,
1993, at 7 : 15 p.m. to be held at the Elk River City Hall, 720
Dodge Avenue NW, to consider the proposed sale of Lots
Elk River Industrial Park 2nd Addition (The Development Site)
to Tescom Corporation, Inc. , 12616 Industrial Boulevard, Elk
River, Minnesota.
Said Development Site will be conveyed to Tescom Corporation,
Inc. subject to the terms and conditions of a Development
Agreement by and between the EDA and Tescom Corporation, Inc.
A copy of the proposed terms and conditions of the sale of said
Development Site is on file and is available for inspection in
the office of the City Clerk at City Hall, 720 Dodge Avenue NW,
Elk River, Minnesota 55330, Monday through Friday between 8:00
a.m. and 4 :30 p.m.
All persons desiring to appear at the public hearing will be
afforded an opportunity to express their views with respect to
111 the proposed sale of said Development Site. Interested persons
may also file written comments expressing their views with the
EDA Executive Director.
For further information, contact Patrick Klaers, EDA Executive
Director, at Elk River City Hall, 441-7420.
Authorized this 8th day of February, 1993.
Patrick D. Klaers, Executive Director
Elk River Economic Development Authority
•
•
tyof TO: ECONOMIC DEVELOPMENT AUTHORITY
lk River FROM: WILLIAM RUBIN, ED COORDINATO Vj
�l
DATE: FEBRUARY 4, 1993
SUBJECT: PROSPECT STATUS REPORT
The following is a summary of new industrial and commercial
prospects that have expressed an interest in locating in the
City of Elk River since the last EDA meeting.
NEW PROSPECTS
1. Towle Real Estate Prospect - Staff was in contact with
an agent from Towle Real Estate Company regarding the
agent' s client who seeks an available site for an 110,000
to 150,000 square foot facility. According to the agent,
this Twin City company plans an expansion during 1993 .
Further, the company employs approximately 200 persons .
An appropriate packet of information on Elk River and
industrial sites available here was sent to the agent.
Follow-ups with the agent have also occurred, and, the
agent and company are currently evaluating all sites .
• 2 . Sportswear Company - A Brooklyn Park based sportswear
company seeks 2,500 to 5,000 square feet of existing space
to expand its sewing and embroidery operations. The
company will likely require additional machinery and
equipment as part of its relocation/expansion. To assist
with those needs, the Revolving Loan Fund was discussed
with the prospect. The company is currently evaluating
the information on Elk River.
3 . Maple Grove/Osseo Manufacturer - Staff has been in
contact with a manufacturing company located in the
Osseo/Maple Grove area. One of the employees is a
resident of Elk River and is hopeful that the expansion
will occur here. The company plans to construct a 30,000
square foot facility, and, information on available sites
in the Industrial Park plus other industrial sites, as
well as financing programs, was relayed to the company.
It also is evaluating this information and it is likely
that a meeting with the company will occur in February.
4 . John Reibol - This is a Big Lake Township resident that
seeks 2,500 square feet of existing space (warehouse) for
a building supplies operation. He was put in contact with
persons having available space, including Jerry Minor and
Alltool Manufacturing. In addition, he was advised of
available sites in the McChesney Industrial Park.
720 Dodge Avenue N.W., Elk River, Minnesota 55330 (612) 441-7420
• PREVIOUS PROSPECTS
1 . Perf-form Products, Inc. - EDA Commissioners will recall
that this prospect was discussed at the January EDA
meeting, in conjunction with amendments to TIF Districts
No. 1 and No. 3. EDA Commissioners voted to recommend
that the City Council consider amending Districts No. 1
and No. 3 to provide a TIF Grant to Perf-form. While
remaining interested in Elk River, it appears as though
the owner of the vacant site that the company is pursuing
does not wish to sell the site at this time. Therefore,
the company is exploring alternative sites, including
those in the McChesney Industrial Park. In addition, the
company may be pursuing an available building in Big Lake.
2 . Medical Clinic - The Medical Group listed in the January
Prospect Report is still evaluating sites in the Anoka,
Coon Rapids, Elk River area.
3. ECM Publishers, Inc. - This company has been listed in
previous prospect reports, and, EDA Commissioners received
a verbal update on this company at the January meeting.
As indicated at the January meeting, ECM Publishers is
pursuing two acquisitions, thereby delaying any expansion
decision.
•
•