RES 23-15City of Elk River
ver City Council
Resolution 23-15
A Resolution of the City Council of the City of Elk River Granting a Property
Tax Abatement for Certain Property in the City and Approving a Tax
Abatement Agreement with Harvest Reaper, LLC
BE IT RESOLVED by the City Council (the "City Council") of the City of Elk River,
Minnesota (the "City"), as follows:
Section 1. Recitals.
1.01. The City has reviewed a proposal to acquire, construct and equip an
approximately 25,000 square foot facility to be owned by Harvest Reaper, LLC, a Minnesota
limited liability company or an entity affiliated with or related to Beaudry Oil & Service, Inc.
(the "Developer"), to commence a lubricants operation (the "Project") to be located on Elk
Lake Road in the City and on the property identified by property identification number 75-
930-0105 (the "Property").
1.02. With the Project, the Developer proposes to expand its existing
business, maintain and create and retain jobs in the City, Sherburne County (the "County")
and the State of Minnesota (the "State"), and preserve and enhance the property tax base in
the City, the County and the State.
1.03. Pursuant to Minnesota Statutes, Sections 469.1812 through 469.1815,
as amended (the "Abatement Act"), the Developer has requested a property tax abatement
on the Property in order to assist in financing a portion of the costs of the Project, including
in particular, the cost to extend a water main from Industrial Boulevard in the City to the
Property to provide an adequate water suppression system for the Project. The proposed
term of the abatement will be up to eleven (11) years in an amount not to exceed $138,204.
The proposed abatement will apply to the Developer's share of real estate taxes which relate
to the construction of the Project on the Property by the Developer and not to the real
estate taxes on the Property that relate to the existing land value (the "Abatement").
1.04. The Developer has also requested a property tax abatement on the
Property from the County (the "County Abatement").
1.05. The City and the Developer have caused to be prepared a Tax
Abatement and Business Subsidy Agreement (the "Agreement") setting forth the terms and
conditions under which the City will provide tax abatement assistance for the Project
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including compliance with job and wage goals as required by Minnesota Statutes, Sections
116J.993 to 116J.995, as amended (the "Business Subsidy Act").
1.06. On the date hereof, the City Council conducted a duly noticed public hearing
on the Abatement, at which the views of all interested persons were heard and considered.
Section 2. Findings.
2.01. The recitals set forth above are incorporated into this resolution.
2.02. It is hereby found and determined that the benefits to the City from the
Abatement will be at least equal to the costs to the City of the Abatement, because (a) based
on representations of the Developer, the City believes that the development to be facilitated
is not reasonably likely to occur absent the Abatement and (b) the long-term taxes collected
from the Property after termination of the Abatement will exceed the amount of the
Abatement provided to the Developer.
2.03. It is hereby found and determined that the Abatement is in the public
interest because it is expected to result in the following public benefits:
(a) The Abatement will increase the City's tax base through the creation of an estimated
$1,290,800 increase in market value for the Property;
(b) The Abatement will help an existing business expand in the City, the County and the
State; and
(c) It will provide additional employment opportunities in the City, the County and the
State.
Section 3. Actions Ratified; Abatement Approved.
3.01. The City Council hereby ratifies all actions of the City's staff and consultants
in arranging for approval of this resolution in accordance with the Abatement Act.
3.02. Subject to the provisions of the Abatement Act and the execution of the
Agreement as set forth in Section 4 hereof, the Abatement is hereby approved and adopted
subject to the following terms and conditions:
(a) The term "Abatement" means a portion of the City's share of annual real property
taxes received by the City with respect to the Property in an amount calculated in each tax -
payable year as follows: the City's tax rate for such tax -payable year multiplied by the
difference between the net tax capacity of the Property as improved by the Project as
determined by the City in its sole distraction, as of January 2 of the prior year, less $2,838
(i.e. the net tax capacity of the Property, as established by the County assessor on January 2,
2023, for taxes payable in 2024).
(b) The City will pay the Abatement in the amount, at the time, and in accordance with
the terms and conditions set forth in the Agreement.
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(c) In accordance with Section 469.1813, subdivision 8 of the Abatement Act, in no year
shall the Abatement, together with all other abatements approved by the City under the
Abatement Act and paid in that year exceed the greater of 10% of the net tax capacity of the
City for that year or $200,000 (the "Abatement Cap"). The City may grant other abatements
permitted under the Abatement Act after the date of this resolution, provided that to the
extent the total abatements in any year exceed the Abatement Cap, the allocation of
Abatement Cap to such other abatements is subordinate to the Abatement granted pursuant
to this resolution.
(d) In no event shall the total payments of the Abatement to the Developer exceed
$138,204 or continue to be paid for more than eleven (11) years as set forth in the
Agreement.
(e) The Abatement is subject to modification in accordance with the Abatement Act,
subject to the terms of the Agreement.
(f) In accordance with Section 469.1815 of the Abatement Act, in each year during the
term of the Abatement the City will add to its levy the total estimated amount of current year
Abatement granted under this resolution.
(g) The City makes no warranties or representations regarding the amount or availability
of the Abatement.
4 Section 4. Agreement Approved.
4.01. The City believes that the development of the Project pursuant to the Agreement,
and fulfillment generally of the Agreement, are in the vital and best interests of the City and
the health, safety, morals, and welfare of its residents. Those public purposes of the
Agreement include providing higher -paying employment opportunities in the City, County
and State, preserving and enhancing the tax base in the City, the County and the State,
retaining a local business by helping them expand and succeed in the City and encouraging
additional desired developments in the City.
4.02. The City hereby approves the Agreement, including the business subsidy agreement
set forth therewith, substantially in accordance with the terms set forth in the form
presented to the City Council, together with any related documents necessary in connection
therewith, and without limitation all documents, exhibits, certifications or consents
referenced in or attached to the Agreement (collectively, the "Development Documents")
and hereby authorizes the Mayor and City Administrator to negotiate the final terms thereof
and, in their discretion and at such time as they may deem appropriate, to execute the
Development Documents on behalf of the City, and to carry out, on behalf of the City, the
City's obligations thereunder when all conditions precedent thereto have been satisfied.
4.03. The approval hereby given to the Development Documents includes
approval of such additional details therein as may be necessary and appropriate and such
modifications thereof, deletions therefrom and additions thereto as may be necessary and
appropriate and approved by legal counsel to the City and by the officers authorized herein
to execute said documents prior to their execution; and said officers are hereby authorized to
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approve said changes on behalf of the City. The execution of any instrument by the
appropriate officers of the City herein authorized shall be conclusive evidence of the
approval of such document in accordance with the terms hereof. This Resolution shall not
constitute an offer and the Development Documents shall not be effective until the date of
execution thereof as provided herein. In the event of absence or disability of the officers,
any of the documents authorized by this Resolution to be executed may be executed without
further act or authorization of the City Council by any duly designated acting official, or by
such other officer or officers of the City Council as, in the opinion of the City Attorney, may
act in their behalf.
4.04. Upon execution and delivery of the Development Documents, the officers
and employees of the City are hereby authorized and directed to take or cause to be taken
such actions as may be necessary on behalf of the City to implement the Development
Documents.
Section 5. Effective Date. This resolution is effective upon execution in full of the
Agreement.
Passed and adopted this 15`h day of May 2023.
J J ietz, Nayor
ATTEST:
Tina Allard, City Clerk
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