10-26-2021 JOINT FINANCE COMMITTEEMeeting
of the
Joint Finance
Committee
AGENDA
I. CALL MEETING TO ORDER
2. CONSIDER AGENDA
Tuesday, October 26, 2021
7:30 a.m.
Elk River City Hall
Upper Town Conference Room
Meeting Protocol
■ No sidebar discussions
■ No interruptions
• State `-our concern
■ Ensure you understand
■ Don't take things personally
■ Adhere to time limits
■ Come prepared
■ Ensure all are heard
3. CONSENT AGENDA
Considered to be routine and noncontroversial by the Economic Development Finance Committee and -'vill be approved by one
motion. There gill be no separate discussion of these items unless a Committee member, staff member, or citizen so requests, in
which case the item will be removed from the consent agenda and considered under the regular agenda.
3.1 May 13, 2021 Meeting Minutes
4. GENERAL BUSINESS
4.1 Joint Finance Committee Appointment
4.2 TIF Application Jackson Hills Second Phase
4.3 Energy Incentive — Potential Business
5. ANNOUNCEMENTS
6. ADJOURNMENT
P O W E R 1: 0 e r
NAWREI
City of
Elk
River Special Meeting of the Elk River joint Finance Committee
Held at Elk River City Hall
Thursday, May 13, 2021
Members Present: Ryan Hardin, Rhonda Magnussen, Dan Tveite, Chad Vitzhum, Charlie
Blesener, and Larry Toth
Members Absent: Nate Ovall
Staff Present: Colleen Eddy, Economic Development Specialist
Others Present: None
I . Call Meeting to Order
Pursuant to due call and notice thereof, the meeting of the Elk River Joint Finance
Committee was called to order by Chair Tveite at 7:31 a.m.
2. Consider Agenda
Motion by Toth and seconded by Blesener to approve the Joint Finance Committee
agenda. Motion carried 6-0.
3. Consent Agenda
Motion by Vitzhum and seconded by Blesener to approve the March 30, 2021 Joint
Finance Committee meeting minutes. Motion carried 6-0.
4.1 Die -Concepts Microloan Extension
Ms. Eddy presented the staff report. The commission discussed the application and the
corresponding information.
Motion by Vitzhum and seconded by Blesener, to recommend approval of the F&M
Properties LLC two-year microloan extension request. Motion carried 6-0.
5.1 Announcements
Ms. Eddy stated there are still two empty at -large positions open on this committee.
6. Adjournment
There being no further business, Mr. Tveite adjourned the meeting at 7:36 a.m.
Minutes prepared by Colleen Eddy.
Tina Allard
City Clerk
Cal Portner
EDA Executive Director
City of
Elk
River
Request for Action
To
Item Number
joint Finance Committee
4.1
Agenda Section
Meeting Date
Prepared by
General Business
October 26, 2021
Colleen Eddy, Economic Development Specialist
Item Description
Reviewed by
Joint Finance Committee Appointment
Brent O'Neil, Economic Development Director
Reviewed by
Cal Portner, City Administrator
Action Requested
Approve, by motion, the appointment of Jim Gromberg to the Joint Finance Committee.
Background/Discussion
Mr. Gromberg was a member of the Joint Finance Committee from December of 2016 to May of 2020.
In 2021, the bylaws changed regarding the make-up of the Joint Finance Committee, which opened two
at -large positions. Mr. Gromberg has applied to fill one of those positions.
The advisory committees mill include nrithout limitation:
(a) A joint EDAI HRA Finance Committee nhich shall consist of
(i) tn,,o HRA Commissioners appointed by the HRA,
(ii� tn,,o EDA Commissioners appointed by the EDA, and
(iii) five members of the Elk River community consisting of tn�o members of the banking profession, one
member of the legal profession, one member of the real estate profession and one member of the community at
large each of n�hom shall be appointed, as needed, by the then -existing members of the Finance Committee to
fill any open seat consistent nrith foregoing community categories.
If one of the HRA or EDA members also has the professional distinction meeting the criteria for banking
legal, or real estate, another member of the community at large may be substituted nrith a term that runs
concurrently with the term of the HRA or EDA member so that at no time more than 2 HRA and 2
EDA Commissioners serve on the Committee.
Financial Impact
N/A
Mission/Policy/Goal
The Joint Finance Committee is an advisory committee to the EDA and HRA.
Attachments
■ Application
The Elk River Vision
A n elcoming community nrith revolutionary and spirited resourcefulness, exceptional p p x E R E o R r
service, and community engagement that encourages and inspires prosperity [14A UR
APPLICATION FOR APPOINTMENT TO EDA
City of
Elk AND HRA SUBCOMMITEES
Subcommittee Applying For:
RiV6r
13065 Ox Pa kway
763.635.1000
APPLICANT INFORMATION
Name: J l
$ rcA
City of Residence:
/Y% e.
Occupation: c
p✓nP5+
Employer: W
n
Statement of Interest: Please state briefly why you are interested in serving on the subcommittee
for which you are submitting this application.
s A A I
Relevant Experience: Please describe your educational, professional, civic, or community
participation, which may be relevant in serving on this subcommittee. 01
/� /��+ ri�7.G�Jr.1.CG ��erlf �/.e.L .�rJ�'r�is __!�i ..clf'�[. •�G ��
Attendance. Are your aware of the importance of regular meeting attendance including the time
commitment involved in preparing for meetings, and do you feel you have the time available to be
an active participant?, 'Qes ❑ No
Comments:
Conflict of Interest is defined as the participation in any activity, recommended action, or decision
from which the individual has or could have the potential to receive personal gain, whether it be
direct or indirect. (See attached "Conflict of Interest" Ordinance)
In accordance with this definition, do you have any legal or equitable interest in any siness,
however organized, which coup con
ied as a conflict of interest? ❑ Yes No
If ve v1 detail&-,6h a
A
OFFICE USE ONLY
paper.
Date
Representation on Subcommittee (ie: legal, realtor, etc):
❑ Appointed to: ❑ Not Appointed
SUPPLEMENT TO APPLICATION FOR
APPOINTMENT TO ADVISORY BOARD/COMMISSION
ver
CONTACT INFORMATION(public)
The following information will be used to contact you in the event that you are appointed to a board
or commission. This information is public once you are appointed and may be released upon request.
Residential Address: ,5-.3.3 F /so,"
Phone Number: &2! 7 5, ( -T& U G
AND/OR
Email: J -.w+ g ra M- eo �fY�C . �' • co M
ADDITIONAL CONTACT INFORMATION(private)
Please provide any additional contact information that can be used to contact you in the event you
are appointed to a board or commission. This information ispfivate and will only be released to city
officials and city staff whose work assignments require access.
Work Phone:
Cell Phone:
Other:
City of
Elk
River
Request for Action
To
Item Number
joint Finance Committee
4.2
Agenda Section
Meeting Date
Prepared by
General Business
October 26, 2021
Brent O'Neil, Economic Development Director
Item Description
Reviewed by
TIF Application Jackson Hills Second Edition
Cal Portner, City Administrator
Reviewed by
Action Requested
Item presented for information and discussion purposes.
Background/Discussion
The city received an application for Tax Increment Finance (TIF) from Briggs Companies to complete a
multi -family housing project known as Jackson Hills II at Jackson Avenue and Sixth Street. The project is
similar in size and design to the Jackson Hills project which recently opened and received approval of
TIF in 2019.
Key parameters of the project and TIF request are stated below:
■ 44-unit apartment building with a mix of studio, 1, 2 and 3 bedroom units.
■ Twenty percent of units are proposed as income restricted.
■ 88 total parking spaces.
■ Project budget of $8.59 million - $6 million in financing, $2.59 million from equity sources.
■ Current taxes are at $4,400. Developer projects taxes after completion at $88,000.
■ TIF request: 15 years at 90% increment capture.
■ Overall site excavation and grading of $760,000 covers extraordinary costs for soil corrections.
The city anticipates engaging Baker Tilly to complete a financial analysis and returning to the Joint
FinanceCcommittee for a review and recommendation to the Housing and Redevelopment Authority.
Financial Impact
The project is requesting TIF at the maximum allowed by city policy for a housing district. The developer
would receive 90% of the tax increment generated from the project during the entirety of the TIF district.
Mission/Policy/Goal
The Joint Finance Committee is an advisory committee to the EDA and HRA.
Attachments
■ Application materials
The Elk River Vision
A welcoming community nrith revolutionary and spirited resourcefulness, exceptional p p x E R E o R r
service, and community engagement that encourages and inspires prosperity IkIA
UR
Tax Increment Financing Policy
Purpose
The purpose of this policy is to ensure development receiving Tax Increment Financing
(TIF) is consistent with the long-term city Comprehensive Plan, Strategic Plan, Mississippi
Connections Plan and/or most recent Housing Study. This is a guide for processing and review
of TIF applications. The City of Elk River shall utilize TIF to encourage desirable
development or redevelopment that would not otherwise occur but for TIF.
The city is empowered to utilize TIF by the Minnesota Tax Increment Financing Act, as
amended in Minnesota Statutes 469-174 through 469-1794. The city provides the minimum
amount of TIF at the shortest term required for a project to proceed. The city reserves the
right to approve or reject projects on a case -by -case basis, taking into consideration
established policies, project criteria, and demand on city services in relation to the potential
benefits from the project. Projects meeting policy criteria are not guaranteed the award of
TIF. Approval or denial of a certain project is not a precedent for approval or denial of
another project.
The City Council and Economic Development Authority and the Housing and
Redevelopment Authority can deviate from this policy for projects that supersede the
objectives identified herein.
Authority
Minnesota Statutes 469-174 through 469-1794 govern the use of TIF and exceed any issues
that conflict with this policy.
Public Purpose
The City of Elk River will consider TIF for projects that achieve one or more of the
following:
1. Demonstrate long-term benefits to the community.
2. Retain local jobs and/or increase the number and diversity of jobs that offer stable
employment and/or attractive wages and benefits through:
■ Diversification of the local economy
■ Significant addition of permanent, high -wage, full-time jobs
■ Addition of jobs attractive to those unemployed or underemployed
3. Significantly increases the city's commercial and industrial tax base.
4. Demonstrates the ability to encourage unsubsidized private development through
"spin off" development.
5. Facilitates the development process and achieves development on sites that would
not develop "but for" the use of TIF.
6. Removes blight and/or encourages redevelopment of commercial and industrial
areas resulting in high quality redevelopment and private reinvestment.
Offsets redevelopment costs (i.e. contaminated site cleanup) over and above the
costs normally incurred in development.
8. Aids the implementation of the Mississippi Connections Plan.
Policy Statements
1. The primary intent of TIF is direct funding for public improvements and secondarily
for developer assistance.
2. The use of TIF shall be in accordance with state law. The more restrictive language
will apply when a conflict exists between this policy and state law.
3. Projects must be consistent with the Comprehensive Plan and/or the Mississppi
Connections Plan.
4. Projects must be consistent with the Strategic Plan for Economic Development
and/or the most recent Housing Study.
5. Preferred projects promote the completion of major public improvement projects
within the city such as the installation of trunk sewer and water lines and major
transportation projects.
The level of assistance provided will be determined on a case -by -case basis as
referenced in Public Purpose.
Based on the extent to which the project achieves the policy statements (1-6 above), the city
will consider TIF for projects in the following categories:
■ Manufacturing
■ Major office warehouse/production facilities
■ Research and development
■ Commercial projects encouraging substantial redevelopment of substandard
properties
■ Housing needs identified in the most recent city housing study
Assistance for TIF is required to meet the uses identified by statute including, but not
limited to the following:
■ Public improvements
■ Land acquisition and land write down
■ Loans
■ Site preparation and improvement
■ Demolition
■ Legal, administration, and engineering
2. The preferred method of TIF is pay-as-you-go for eligible costs as reimbursement,
upfront financing maybe considered on a case -by -case basis.
3. A maximum often percent (10%) of any tax increment received from the district
shall be retained by the city to reimburse administrative costs.
4. All TIF assistance must be accompanied by a signed development agreement
including a minimum assessment value. The developer must provide additional
financing guarantees to ensure completion of the project, including, but not limited
to: letters of credit, personal guarantees, corporate guarantees, etc.
TIF District's shall be limited to the minimum term necessary to meet the project
needs. Only projects exceeding the objectives identified in this policy will be
considered to exceed the following general thresholds:
■ Redevelopment District 15 Years (Max is 26)
■ Housing District 15 Years (Max is 26)
■ Soils Condition District 15 Years (Max is 21)
■ Renewal and Renovation District 10 Years (Max is 16)
■ Economic Development District 8 Years (Max is 9)
Policy Considerations
■ Each project is required to meet the "but -for" test to determine the need for and
level of assistance. This test and the amount of tax increment generated
determines the district's term. It is difficult to facilitate a redevelopment, housing
or soils condition district for less than the maximum term as the extraordinary
costs involved are usually significant.
The term of the district could coincide with the amount of tax increment the city
has to spend on its priorities within a project area.
Of all the TIF districts, the Economic Development District is most often the
one limited to a lesser term. Economic Development Districts are really
"incentive" districts where it is not so much the extraordinary costs as it is an
"incentive" to get a business to locate in a community. In the other districts, the
costs are easily identifiable and usually significant such as demolition, relocation,
environmental remediation, and the cost differential between market rate and
income/rent restricted housing.
7. Developers receiving TIF assistance shall provide a minimum often percent (10%)
cash equity investment in the project. TIF will not be used to supplant cash equity.
8. TIF will not be used in circumstances where land and/or property price is in excess
of fair market value. A third -party appraiser agreed upon by the city and developer
will determine the fair market value of the land.
9. The developer shall demonstrate a market demand for a proposed project. TIF shall
not be used to support purely speculative projects.
10. The developer shall adequately demonstrate, to the city's sole satisfaction, an ability
to complete the proposed project based on past development experience, general
reputation, and credit history, among other factors, including the size and scope of
the proposed project.
11. For the purposes of underwriting the proposal, the developer shall provide any
requested market, financial, environmental, or other data requested by the city or its
consultants.
12. The city of Elk River shall only use TIF to encourage economic growth and
development within the city limits.
Application Process
Applicant submits a complete application and a $10,000 application deposit by the
first Monday of the month. The application deposit will be used toward the cost of
services provided in the evaluation of financial feasibility, establishment or
modification of the district, and preparation of legal documents and agreements. An
additional deposit of $10,000 shall be required for projects requiring statutory
redevelopment substandard tests. The applicant shall reimburse the city for
professional services in excess of the initial deposit. Deposit portions not utilized
shall be refunded.
2. City staff reviews the application for completeness and submits the application to the
city's financial consultant for review and preparation of a financial analysis.
The Joint Finance Committee shall review the proposal's financial strength and make
a recommendation to the appropriate commission with findings of fact.
4. The appropriate authority reviews the proposal and the recommendation to
determine conformance with this policy. The authority makes a recommendation to
the City Council.
5. After meeting the statutory requirements for establishing the Tax Increment District,
the City Council holds a Public Hearing and takes action on the proposal
(Approximately 45-60 days).
APPLICATION FOR TAX INCREMENT FINANCING
A. APPLICANT INFORMATION
Name of Entity The Briggs Companies
Address PO Box 719 Big Lake, MN 55309
Primary Contact Patrick Briggs
Address PO Box 719 Big Lake, MN 55309
Phone 612-919-1961 Fax 763-633-1430 Email
pat&thebriggscompanies.com
Brief description of the entity business, including history, principal product or service:
Build, develop and manage apartment buildings
Brief description of the proposed project:
Phase 2 of Jackson Hills Residential Suites, 44 units, 80% market rate, 20% income restricted
Attorney Name n/a
Phone Fax Email
Accountant Name Don Myers
Address
Phone 763-370-2038 Fax Email
Contractor Name The Briggs Companies
Phone 763-633-1080 Fax 763-633-1430 Email
Engineer TBD
Address
Phone Fax Email
Architect Name Douglas A. Moe Architects Incorporated
Address
Phone 763-441-5469 Fax Email
B. PROJECT INFORMATION
1. The project will be:
Redevelopment District
X Housing District
X Soils Condition District
Renewal and Renovation District
Economic Development District
2. The pro) ectwill be: Owner Occupied X Leased Space
3. Project Address 726 6"' Street Elk River, MN 55330
Legal Description & Parcel Identification Number(s) 75-134-2305
PARCEL D-N. THAT PT OF THE FOLLOWING DESC PARCEL D LYING N OF WLY EXTENSION OF THE CTR LINE OF 6TH ST (FORMERLY PLATTED AS
8TH ST) AS DEDICATED IN THE PLAT OF BURRELL'S ADDTION SUBJ TO EASEMENTS OF RECORD. PARCEL D:THAT PT OF SW 1-4 OF NW 1-4 DESC
AS COMM AT THE POINT OF INTERSECTION OF THE CTRLINE OF JACKSON AVE (FORMERLY KNOWN AS STATE TRUNK HIGHWAY NO.201 & "OLD
HIGHWAY NO.169") WITH THE S LINE OF SAID SW 1-4 OF NW 1-4;THENCE W ALONG SAID S LINE FOR 200.00 FT;THENCE N PARA WITH SAID
CTRLINE FOR 285.70 FT TO A POINT TO BE HERE- AFTER KNOW AS POINT "A" FOR THE PURP OF THIS DESC;THENCE E PARA WITH SAID S LINE
OF SW 1-4 OF NW 1-4 FOR 150.00 FT TO INTERSECT WITH THE W LINE OF R-O-W OF SAID JACKSON AVE BEING A LINE 50.00 FT,AS MEASEURED
AT RT ANGLES, W OF & PARA WITH SAID CTRLINE SAID POINT OF INTERSECTION ALSO BEING THE ACTURAL POB OF THE LAND TO BE HEREBY
DESC;THENCE RETURN W PARA WITH SAID S LINE OF SW 1-4 OF NW 1-4 FOR FOR 150 FT TO SAID POINT "A";THENCE N PARA WITH SAID
CTRLINE FOR 14.30 FT,MORE OR LESS, TO INTERSECT N LINE OF S 300 FT,AS MEAS AT RT ANGLES,OF SAID SW 1-4 OF NW 1-4;THENCE W ALONG
SAID N LINE OF S 300.00 FT FOR 200.01 FT,MORE OR LESS, TO INTERSECT A LINE 400.00 FT W OF,AS MEAS AT RT ANGLES TO SAID CTRLINE
OFJACKSON AVE;THENCE N PARA WITH SAID CTR- LINE FOR 1039.77 FT,MORE OR LESS,TO INTERSECT THE N LINE OF SAID SW 1-4 OF NW 1-
4;THENCE E ALONG SAID N LINE FOR 350.03 FT,MORE OF LESS, TO INTERSECT SAID W LINE OF THE R-O-W OF JACKSON AVE;THENCE S ALONG
SAID W LINE OF THE R-O-W FOR 1056.71 FT,MORE OR LESS, TO POB.
4. Site Plan and Preliminary Construction Plans Attached: X Yes No
5. Amount of Tax Increment Requested for:
Land Purchase $,
Public Improvement
Site Improvement 15 dears & 90%
Current Real Estate Taxes on Project Site: $ 4396
Estimated Real Estate Taxes upon Completion: Phase II $ 88,000
Phase III $
7. Construction Start Date: April 2022
Construction Completion Date: May 2023
If Phased Project: Year % Completed
Year % Completed
C. PUBLIC PURPOSE
It is the policy of the City of Elk River that the use of Tax Increment Financing should result in a
benefit to the public. Please indicate how this project will serve a public purpose.
X Job Creation/Retention: 2
Number of existing jobs
Number of jobs created by project
Average hourly wage of jobs created/retained
New industrial development, which will result in additional private investment in the area.
X Enhancement or diversification of the city's economic base.
X The project contributes to the fulfillment of the City's Plan.
X Removal of blight or the rehabilitation of a high profile or priority site.
X Significantly increase the City's tax base.
X Other: Unbuildable site based on soil conditions
D. SOURCES & USES
SOURCES NAME
Bank Loan First Bank & Trust
Other Private Funds Owner
Owner Cash Equity
Fed Grant/Loan
State Grant/Loan
FDA Micro Loan
Tax Increment
ID Bonds
TOTAL
USES
Land Acquisition
Site Development
Construction
Machinery & Equipment
Architectural & Engineering Fees
Legal Fees
Interest During Construction
Debt Service Reserve
Contingencies
AMOUNT
$6,000,000.00
$2,588,174.00
$8,588,174.00
AMOUNT
$400,000.00
$850,000.00
$6,828,174.00
$75,000.00
$10,000.00
$175,000.00
$0
$250,000.00
TOTAL $8,588,174.00
E. ADDITIONAL DOCUMENTATION AND CHECKLIST
Applicants will also be required to provide the following documentation.
_X_A) Written business plan, including a description of the business,
ownership/management, date established, products and services, and future
plans
X B) Financial Statements for Past Two Years
Profit & Loss Statement
Balance Sheet
X C) Current Financial Statements
Profit & Loss Statement to Date
Balance Sheet to Date
X D) Two Year Financial Projections
X E) Personal Financial Statements of all Major Shareholders
Current Tax Return
F) Letter of Commitment from Applicant Pledging to Complete
During the Proposed Project Timeline
X G) Letter of Commitment from the Other Sources of Financing,
Stating Terms and Conditions of their Participation in
Project
X H) Application deposit of $10,000, with any unused portion to be refunded.
X I) Construction Plans and Itemized Project Construction Statement
X J) Attach the following documentation as Exhibits
Exhibit A
— Entity Documents
Exhibit B
— Description of Project
Exhibit C
— List of Shareholders/Partners
Exhibit D
— But -For Analysis
Exhibit E
— List of Prospective Lessees
Exhibit F —
Legal Description and PID Number(s)
Note: All Major shareholders will be required to sign personal guarantees if up front financing of the
project is required.
The undersigned certifies that all information provided in this application is true and correct to the best of the
undersigned's knowledge. The undersigned authorizes the City of Elk River to check credit references and verify
financial and other information. The undersigned also agrees to provide any additional information as may be requested
by the City after the filing of this application.
Applicant Name C aftich-&Wi Date 10-1-21
Tax Increment Financing
Policy History
Adopted by:
On date
Item #
City Council
12/4/2017
EDA
11 /20/2017
HRA
11 /6/2017
F
PROJECT TITLE
JACKSON HILLS RESIDENTIAL SUITES
(44-Unit Apartment Building with Indoor Parking)
726 6th Street
Elk River MN 55330
PARKING REQUIREMENTS
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City of
Elk
River
Request for Action
To
Item Number
joint Finance Committee
4.3
Agenda Section
Meeting Date
Prepared by
General Business
October 26, 2021
Brent O'Neil, Economic Development Director
Item Description
Reviewed by
Energy Incentive — Potential Business
Cal Portner, City Administrator
Reviewed by
Action Requested
Item presented for information and discussion purposes.
Background/Discussion
The economic development team is in discussions with a business interested in the Harvest Hills building
on Business Center Drive.
The business has inquired about energy incentives, including the energy incentive offered through the
city, which is a savings in energy charges on the Payment In Lieu Of Taxes (PILOT) received from Elk
River Municipal Utilities. However, the incentive is available for new construction projects only and has
other qualifying criteria. Staff would like to discuss with the committee whether there would be support
for modifying program criteria for projects seeking a location incentive.
Financial Impact
N/A
Mission/Policy/Goal
The Joint Finance Committee is an advisory committee to the EDA and HRA.
Attachments
■ Energy Incentive Policy and Application
The Elk River Vision
A welcoming community v4th revolutionary and spirited resourcefulness, exceptional p p x E R E o R r
service, and community engagement that encourages and inspires prosperity I14A UR
Econom
Development
Energy Incentive
Program
Elk River Economic Development
Energy Incentive Program
Guidelines, Policy & Application
I. Policy Purpose
The City of Elk River Economic Development Authority (EDA) and the City of Elk
River (City) maintain a goal to stimulate private sector investment for new job
creation and tax base growth. The Energy Incentive Program offers a savings to
qualified applicants on their Elk River Municipal Utilities (ERMU) electric bills for
up to two years.
2. Eligible Businesses
Projects located or proposed to be located within the city limits of the City may be
eligible for the program as further defined herein:
■ Unless otherwise stated, business must be a for -profit corporation,
partnership, limited liability company, or sole proprietorship.
■ Business must be a small business as defined by the Small Business
Administration.
■ Only new construction projects qualify.
■ Peak electric demand greater than 50kW per month.
■ Located within eligible ERMU area.
■ The creation of at least 50 new jobs at >_ $18.00 per hour
■ Calculated Economic Output of $10 million through Implan software
(information provided by Sherburne County)
■ Project must generate a least $80,000 in total annual property taxes.
■ Religious, political, and pornographic enterprises are not eligible.
3. Regulation for New Construction and Improvements
All buildings which public funds will be used for construction are to conform to city
code and ordinances and state building codes.
4. Timing of Project Expenses
No project shall commence without city council approval of the application. Any
costs incurred prior to the approval of the application are not eligible expenditures.
No building construction should commence until the required permits are secured.
The applicant will be responsible for all legal, recording, and other fees payable by a
$2,000 processing fee, which is paid at the time of application. In addition to the
processing fee, all legal and filing fees shall be paid by the applicant.
S. Procedural Guidelines for Application and Approval
1. The applicant shall obtain information about the Energy Incentive Program and
application from the City.
2. The applicant shall complete and submit an application along with a $2,000
processing fee. The fee covers processing expenses. Any remaining funds will be
returned to the applicant. The applicant must provide a letter of commitment for
constructing the project.
3. The EDA and the City are a governmental entities and must provide access to
public data received in accordance with the Minnesota Government Data
Practices Act, (Minnesota Statutes, Chapter 13) (the "Minnesota Data Practices
Act"). The information provided in an application to the EDA and the City will
be used to assess eligibility for financial assistance. The EDA and the City will
not be able to process an application without this information. The Minnesota
Government Data Practices Act governs whether the information that you are
providing to the EDA is public or private. If financial assistance is provided for
the project, the information submitted in connection with your application will
become public, except for those items protected under Minnesota Statutes,
Section 13.59, Subdivision 3(b) or Section 13.591, Subdivision 2. Data deemed
by the applicant to be nonpublic data under state law should be so designated or
marked by the applicant. See Minn. Stat. Sections 13.59, Subd. 1, respectively.
4. The application will be reviewed to determine conformity to all City policies and
ordinances and to consider the following:
a. The availability and applicability of other governmental grants and/or
microloan programs.
b. Whether the proposed project will result in conformance with building
and zoning codes.
c. Whether it is desirous and in the best interests of the public to provide
incentives and/or funding for the project.
5. The Joint Finance Committee of the EDA and EDA Commissioners will review
each application for compliance with the City's Comprehensive Plan, Economic
Development Strategic Plan and the goals, requirements and intent of this policy.
The EDA Finance Committee will also evaluate the project application in terms
of the following:
a. Project Design - Evaluation of project design will include review of
proposed activities, time lines and a capacity to implement the project.
b. Letter of Commitment from applicant pledging to complete the project
during proposed project duration, if the application is approved.
c. Project compliance with all City codes, ordinances and policies.
d. Quality job and wage creation requirements of at least 50 new jobs at a
minimum hourly wage of $18.00.
e. Peak electric demand greater than 50kW per month.
f. Located within eligible ERMU area.
g. Calculated economic output of $10 million through Implan software
(information provided by Sherburne County)
h. Project generates a minimum of $80,000 in total annual property taxes
i. The project contributes to the fulfillment of the City's approved and
adopted economic development and/or redevelopment plans.
j. All other information as required in the application and/or additional
information as may be requested by the economic development staff, in
its sole discretion.
6. The FDA Finance Committee will recommend the approval, denial, or request a
resubmission. A recommendation from the Finance Committee will be
forwarded to the FDA for recommendation of approval, denial to the City
Council for final action.
6. Policy Review
The above criteria will be reviewed on an annual basis to ensure that the policies
reflected in this document are consistent with the economic development goals set
forth by the City.
7. Right of Refusal
The FDA shall deny any application found inconsistent with the goals of the city's
Comprehensive Plan and Economic Development Strategic Plan and intent,
requirement and goals of this policy. The City Council shall have final authority to
review the application and will make the final determination as to whether the
assistance shall be granted. The FDA and the City reserve the right to approve or
reject projects on a case -by -case basis, taking into consideration established policies.
Meeting policy criteria does not guarantee the award of assistance to the project.
Approval or denial of one project is not intended to set precedent for approval or
denial of another project.
8. Compliance with the Minnesota Business Subsidy Law
All developers/businesses receiving financial assistance from the City shall be subject
to the provisions and requirements set forth by the City's Business Subsidy Policy as
amended and Minnesota Statutes, Sections 116J.993 to 116J.995 (the "Minnesota
Business Subsidy Law") if applicable, including entering into a business subsidy
agreement if necessary.
9. Compliance with the ERMU Payment in Lieu of Taxes (PILOT) and
Other Donations to the City of Elk River Policy
Elk River Municipal Utilities was purchased by the City in 1945 and separate
governance was created in 1947. It is typical for a municipal utility to provide a
PILOT regardless of the separation of governance. The PILOT is calculated based
on eligible electric sales within the City.
As an economic development incentive option, the City agrees to waive the
applicable PILOT for an approved applicant and redirect that amount as a credit
distributed through the applicant's monthly ERMU electric service bill for up to two
years. The amount of the incentive shall be determined by ERMU in its sole
discretion in consultation with the City.
For the applicant to be eligible for this incentive, the business must be located within
an area of the ERMU electric service territory in which the electric sales are included
in the calculation for the PILOT to the City. And for the applicant to be eligible, the
project must meet all other applicable prevision of the ERMU PILOT policy; the
City must be eligible to receive PILOT for the location to be able to waive PILOT
for the project.
10. Form of Assistance; Repayment
The incentive will be provided over a period of 2 years starting after the City issues a
certificate of occupancy for the project. If the business owner fails to create the
number of jobs as set forth in its application within 2 years of the issuance of a
certificate of occupancy, the business may be required to repay the amount of
assistance provided if required by applicable law.
11. Agreement to Pay Costs of Review
City and EDA policy requires applicants to pay all costs incurred by the city to
review and act upon applications so that these costs are not borne by the taxpayers.
These costs include all of the city's out-of-pocket costs for expenses, including the
City's and the EDA's costs for review of the application by the City's and EDA's
financial advisor, attorney, other consultants, recording fees, and necessary
publication costs.
The application processing fees cover anticipated costs; costs incurred above the
application fee will be invoiced as they are incurred and payment will be due within
thirty (30) days. Any unused portion of the application fee will be returned to the
applicant. If payment is not received as required by this agreement, the city may
suspend the application review process and may deny the application for failure to
comply with the requirements for processing the application. Payment for costs will
be required whether the application is granted or denied.
Elk River Economic Development
Energy Incentive Program Application
I. Contact Information
Legal Name of Business:
Project Site Address:
City / State / Zip
Contact Person(s)
Business Phone Fax
Home Phone Email
Check One: Proprietor Corporation Partnership
Federal ID # State ID #
2. Nature of Request
Please give a brief summary of your business and its products or service:
Please give a brief summary of the project:
Please describe how this program will impact your project:
3. Proposed Peak Electric Demand and Energy Usage
4. Job & Wage Goals
Jobs to be Created*
Please provide the following information on jobs you expect to create within 2-years.
Job Title
Number
ofjobs
Average
Hourly
Wage
Annual
Salary
Are the Jobs
Permanent or
Temporary?
Expected
Hiring
Date
S. Project Contacts
Attorney
Name
Address
Phone
Accountant
Name
Address
Phone
Financing Sources Genders, partners, etc...
Name
Address
Phone
Name
Address
Phone
Parent Company
Name
Address
Phone
Others
Name
Address
Phone
Name
Address
Phone
6. Attachment Checklist
Please attach the following:
A) Application
B) Projected Electric Usage as calculated by ERMU
C) Economic Impact Analysis (from Sherburne County)
D) Certificate of Good Standing and Applicant's Organizational
Documents (for example, articles of incorporation and bylaws)
E) Resume of Owner/Management
F) Letter of Commitment from Applicant Pledging to Complete
During the Proposed Project Duration
G) Processing Fee of $2,000
7. AGREEMENT
I/We certify that all information provided in this application is true and correct to the best
of my/our knowledge. I/We authorize the city of Elk River and the Finance Committee to
check credit references and verify financial and other information. I/We agree to provide
any additional information as may be requested by the city and the Finance Committee.
The undersigned has received the city's policy regarding the payment of costs of review,
understands that reimbursement to the city of costs incurred in reviewing the application will
be required, agrees to reimburse the city as required in the policy and make payment when
billed by the city, and agrees that the application may be denied for failure to reimburse the
city for costs as provided in the policy.
APPLICANT SIGNATURE
I.OF
DATE
APPLICATION SCORING WORKSHEET
TO BE COMPLETED BY CITY STAFF
1. The project meets the criteria set forth in the Energy Incentive policy.
a) Meets the objectives of the program
c) Consistent with all city plans and ordinances.
d) Meets the wage requirements as defined in the city's business subsidy policy.
2. Job Creation in the City of Elk River: Points:
Number of new jobs as a result of the project. 50+ 5
Total Less than 50 0
3. Wage Level of jobs created/retained or relocated Points:
Minimum hourly wage Over $21 / hour 5
of jobs created/retained: $19-20 / hour 4
$18 / hour 3
4. Project size: Points:
The project will result in the construction 50,000+ 5
of square feet 40,000+ 4
30,000+ 3
5. Tax Base Generation: Points:
The project will result in the annual estimated
Tax Base Generation $100,000+ 5
of $90,000+ 4
$80,000+ 3
Sub - Total Points: of a possible 20 points.
6. Bonus Points
Point Adjustments:
The project contributes to the goals of Energy City. 3 points
• Product promotes sensible use of energy, OR
• Project utilizes significant energy efficient design &/or materials in construction.
Total Points:
Overall project desirability: High 20-23 points
Moderate 18-19 points
Low 12-17 points
Not Eligible 0-11 points
Economic Development Energy Incentive Program
Policy History
Adopted by:
On date
Item #
EDA
January 22, 2019
7.7