7.2 EDSR 05-20-2024The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
Request for Action
To
Economic Development Authority
Item Number
7.2
Meeting Date
May 20, 2024
Prepared By
Joshua Mollan, Economic Development Specialist
Item Description
Heritage Millwork Energy Incentive Program
Reviewed by:
Brent O'Neil
Cal Portner
Action Requested
Adopt, by motion, a recommendation of approval of the Heritage Millwork Energy Incentive application to the
City Council.
Background/Discussion
In addition to its TIF and microloan applications, Heritage Millwork has also applied for the Economic
Development Energy Incentive Program. This program offers savings to qualified applicants on their Elk River
Municipal Utilities (ERMU) electric bills for up to two years. The total incentive provided to the applicant shall
not exceed $149,999. Project Hinge meets all the requirements set forth in the policy: for-profit corporation,
partnership limited liability company, or sole proprietorship; new construction, expansion, or addition project;
located within eligible ERMU electric service territory within the City of Elk River; peak electric demand
greater than 50kW per month; minimum new job creation of 30 FT employees within two years; wage level
greater than $18/hr; project size greater than 25,000 sq ft; Implan (analysis provided by Sherburne County)
calculated economic output greater than $5,000,000; and total annual property taxes of at least $60,000.
This program is new and this project is the first applicant for the program. The program allows the city to
rebate the PILOT (Payment in Lieu of Taxes) which is charged to electrical customers. The 4% fee is eligible
for a full rebate for 24 months following a project's certificate of occupancy. EDA review is required prior to
forwarding it to the City Council for consideration. Based on the project's ability to satisfy the requirements
of the Energy Incentive Program Policy, staff recommends supporting this application, and recommending
approval to the City Council.
Financial Impact
Based on anticipated electricity usage, the value of the incentive will be $10,000 to $15,000 in the form of a
rebate.
Mission/Policy/Goal
Attract new business development to Elk River to build the City's economic vibrancy, job offerings, and tax
base.
Attachments
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1. Energy Incentive Application
2. Equipment Demand Loads
3. ERMU Electric Service Load Sheet
4. Sherburne County Economic Impact Results
Page 55 of 64
Elk River Economic Development
Energy Incentive Program Application
I. Contact Information
,^ . Heritage Millwork
j\ame ot tiiismess:
Project Site Address:
City / State / Zip
Contact Personfs)
Busiiiess Phone
A roximatel 14.06 acres of PID 75-00929-0020 in NEBCII
Elk River, MN 55330
Annie Deckert, All Day Companies
319-214-5858
Home Phone
Check One: Propnetor
Federal ID # 41-1864718
Fax
Email
Corporadon Partnersliip
State ID #3129323
2. Nature of Request
Please give a brief sunmiary ot your biisiiiess and its products or senice:
Established in the Spring of 1997 in Ramsey, Mn, Heritage Mitlwork Inc (HMI) has been servicing the
)er Midwest Market as a distributor of moldings, millwork, interior doors, exterior entry doors and
stair parts. HMi supplies to more than 450 dealers in MN, Wt, SD and IA Originally stocking only a few
interior door designs in two wood species, HMI ow offers over 25 door designs, with unlimited specjal-
order options. In addition to a wide selection of interior doors, HMI also offers over 30 molding profiles
in seven species including MDF, with special-order molding profiles and a broad selection of stair
parts. HMI provides wholesale products to retail lumber dealers.
Please give a brief sumniaiy of the project and a constniction tiineline for the project:
HMI is proposing to acquire approximately 14 acres in city-owned Nature's Edge Business Park II
to construct a 113,000 square foot facility with room to expand another 40,000 sf. (estimated 3-5
/ears after receiving CO). Currently located in Ramsey, MN, HMI has outgrown it's current
and'wouid like to relocate to Elk River. It currently has two offsite warehouses for
excess'material and product which causes inefficiencies and lost revenue. Proposed
groundbreaking is Summer '24. with estimated project completion Q1 '25.
Please describe how tills program \vUl iinpact yoiir project:
The rebate will improve overall cashflow of the business, helps reduce costs and increase
efficiency. A positive cash flow helps create a buffer for unexpected expenses, fluctuation in sales,
changes in the market, and allows us to make informed decisions, plan for future growth (we have
the potential to expand up to an additional 40,000 square feet from our proposed 113,000sf
facility.).
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3. Proposed Peak Electric Demand and Energy Usage
Please see attached
4. Job & Wage Goals
This project will bring 70.5 FTE to Elk River, averaging
$37.66/hr, and will create an additional 6.5FTE,
averaging $28.25/hr
Jobs to be Created^
Please 31-ovide die followm information on jobs voii ex ect ro create \\-itlun 2-vears.
Average Are die Jobs Expected
Number Hoiirh- Annual Permanent or Hiring
ob Title of Jobs \X'a e Salaiv Tern aoraiyr Date
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5. Project Contacts
Nathan J. Alien, Cries Lenhardt Alien PLLP
Name
Address12725 43rd st NE' st Michael> MN 55376
ph^, 763-497-3099,nate@glalawfirm.com
Accountant
Name Tom Barton' Barton Walker & Krier CPA
Address 6885 S camore Lane N., Ma Ie Grove, MN 55369
Phone
Financin Sources enders artners etc...
Name chad vitzthum. First Bank Elk Rtver
Address 812 Main Street Elk River, MN 55330
Phone 763-241-3600, cvitzthum elkriver.bank
Name
Address
Phone
Parent Coin an T
Name
Address
Phone
Others
Jake Zander, Collins Electrical Construction
Addres^78 state street- st- pau1' MN 55107
Phone jzander@collinsmn.com, 763-227-0993
Name Neil Missling, Mohagen Hansen Architecture
Address1000 Twelve oaks center Drive. suite 200, Wayzata, MN 55391
Phone 952-426-7426
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6. Attachment Checklist
Please attach the foUowing:
A] Application
B) Projected Electric Usage as calci-dated by ERMC
C) Econoinic Impact Aiialysis (from Sherbiu-ne Comin-)
D) Proposed Increase m PropertT;' Taxes
E) Certificate of Good Standuig and AppUcant s Orgamzational
Dociiments (for example, articles of mcorporation and bylaws)
F) Resimie or Owner/Manageineiit
C^ Letter of Coinniitnient froin Applicant Pledgiiig to Complete
Durmg the Proposed Project Duradon
B. See attached Electric Service Information Load Sheet from ERMU, dated 4-17-24 and
attached Load Sheet dated 3-29-24
C. Attached from Sherburne County
D. Proposed property tax increase: $234,311+ (110,000 sf building), $288,082 (with 40,000
st expansion)
E. City has on file from TIF application and Microloan application
F. City has information from TIF application and Microloan application
G. Will be provided with TIF and Microloan application
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7. AGREEMENT
I/We certifr that all informarion pro\-ided ill this application is ti.-iie and correct to die best
of my/our kiiowledge. I/We aiithorize the Cm- of Etk River to check credit references aiid
veuft- fuiancial and other mformatiou. I/''\\"e agree to pro-^-ide any additional mtbrmation as
may be requested by the City aiid the EDA.
APPLICANT SIGNATURE
BY
DATE
Page 60 of 64
LOAD SHEET 3-29-24
Description VA
Double End Saw 6117
Hydrovane Air Compressor 25hp 22000
QCV 40 hp Aircompressor 41520
Time Saver 19791
Time Saver 1295
Powermatic table saw 4982
4982
990 Line
Handler 27000
600
555 4784
600
990 9776
4320
Wrapper 4152
Magnum 6240
10795
W/B Radial Arm 2912
Powermatic 4982
Shaper 1661
Jet Table Saw 1200
Plainer 3120
994 Door line
Drop 1 13369
Drop 2 13120
Drop 3 8968
Exterior Door Line
Handler 27000
DL-2 1664
Acrobat 240
700 360
Powermatic 14" Table Saw 2657
Annie 12456
Radial Arm 1728
Radial Arm 2304
0
Dust Collector 39859
Fork lift Charger (5) 10795
Wrapper 4152
Additional Equipment
994 wrapper 0
Efx 39859
Trash compactor 0
Air Dryer 3322
Table saw 2496
Table saw 3328
Flat line
EP1 26573
EP2 24912
EP3 24912
EP4 207600
EP5 332160
Door finishing 332160
Paint Booth 2496
1321322 Total connected VA 858860 Total demand VA 65%
830 at 480v/3ph 830 at 480v/3ph
1592 Amps 1035 Amps
Mechanical equipment heating/motors/air conditioning
RTU (4) 7.5 ton 15778 VA
(2) PRV 1920 VA
Split system 6240 VA
Gas water heater 120 VA
Gas water heater 6240 VA
(8) cabinet unit heaters 11080 VA
(15) gas unit heaters 9000 VA
(12) destratification fans 49824 VA
951 VA
Heritage Millwork Equipment Date: 4-17-24
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Impact Results Overview
Dollar Year is 2024 Run ID is 386060
Economi c Indi c ators by Impact
Imp act Emp loyment Lab or Income Value Added Outp ut
1 - Direct 75.50 $4,816,363.11 $4,574,018.18 $14,029,323.80
2 - Indirect 12.35 $624,437.33 $1,019,473.08 $2,264,575.23
3 - Induced 8.81 $363,829.16 $818,655.55 $1,400,298.44
Totals 96.66 $5,804,629.61 $6,412,146.82 $17,694,197.46
Tax Results
Imp act Sub County
General
Sub County
Special Districts County State Fed eral Total
1 - Direct $7,294.21 $13,034.47 $9,677.20 $115,200.12 $897,250.06 $1,042,456.05
2 - Indirect $14,077.27 $24,792.13 $18,416.75 $80,784.48 $132,442.45 $270,513.07
3 - Induced $13,382.56 $23,557.56 $17,499.97 $74,282.31 $86,876.89 $215,599.29
Totals $34,754.04 $61,384.16 $45,593.91 $270,266.90 $1,116,569.40 $1,528,568.41
Di rect Leakages
Institutional Commodity Sales Margin Imports to Region
N/A N/A N/A
Industri es by Estimated Growth Perc entage
Display Cod e Display Descrip tion Industry Total Outp ut Impact O utput Estimated Growth
Percentage
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
371 Custom architectural …$7,553,413.47 $14,030,200.90 185.75%
468 Marketing research a…$22,652,439.06 $119,796.85 .53%
396 Wholesale - Other dur…$54,972,939.98 $194,061.63 .35%
440 Securities and commo…$20,686,254.21 $72,369.29 .35%
401 Wholesale - Wholesal…$9,669,869.48 $28,603.31 .30%
405 Retail - Building mater…$90,732,379.21 $187,525.56 .21%
456 Accounting, tax prepa…$9,953,490.16 $18,962.82 .19%
189 Laminated plastics pla…$6,038,605.16 $10,988.61 .18%
476 Services to building s $27,652,254.98 $48,966.04 .18%
462 Management consulti…$35,777,058.80 $61,270.06 .17%
436 Data processing, hosti…$17,123,054.14 $29,182.10 .17%
499 Independent artists, w…$543,402.34 $882.22 .16%
441 Monetary authorities …$93,973,014.85 $144,304.32 .15%
455 Leg al services $11,106,157.48 $16,659.60 .15%
453 Commercial and indus…$5,890,198.12 $8,475.81 .14%
447 Other real estate $123,386,414.35 $174,752.08 .14%
463 Environmental and ot…$4,025,990.09 $5,700.89 .14%
393 Wholesale - Professio…$10,513,155.05 $14,632.00 .14%
450 Automotive equipmen…$3,379,702.03 $4,441.71 .13%
515 Commercial and indus…$8,572,820.23 $10,710.48 .12%
465 Advertising, public rel…$12,470,284.02 $15,289.83 .12%
469 Management of comp…$39,229,430.81 $47,953.22 .12%
415 R il t t ti $3 504 295 23 $4 251 90 12%
Top 15 Industries by Estimated Growth Perc entage
Industry Total Output Impact Output371 - Custom archit…468 - Marketing res…396 - Wholesale - O…440 - Securities an…401 - Wholesale - …405 - Retail - Buildi…456 - Accounting, t…189 - Laminated pl…476 - Services to bu…462 - Management …436 - Data processi…499 - Independent …441 - Monetary aut…455 - Legal services453 - Commercial a…$0.00
$25,000,000.00
$50,000,000.00
$75,000,000.00
Generated by Looker on M arch 20, 2024 at 12:03 PM EDT
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