6.0 EDSR 03-10-2008ITEM #6.
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ver
MEMORANDUM
TO: Economic Development Authority
FROM: Catherine Mehelich, Director of Economic Developmen~~~~
DATE: March 10, 2008
SUBJECT: Call Public Hearing for Disposition of EDA Property
- Lot 4, Block 1 Northstar Business Park
Attachment
• Location Map -Northstar Business Park
Issue
In accordance with statutory requirements, the EDA is asked to call a public hearing for
April 14, 2008 to consider public comments regarding the disposition of EDA property,
described above, for the proposed Sportech, Inc. expansion project.
Project Description
Staff has been working with Sportech, Inc. over the past year to identify a site and financing
assistance to relocate and expand the company's operations in Elk River. The proposed
project includes the initial construction of an 80,000-square foot light industrial facility
(expandable up to a total 120,000-sf), the retention of 68 full-time jobs and the creation of
25 new full-time jobs within 2-years of project completion.
The expansion project will involve finance participation from the company's lender and the
following public financing applications:
• City of Elk River Tax Abatement (land purchase)
• Sherburne County Tax Abatement (land purchase)
• EDA Micro Loan (equipment)
• City application to the MN Dept of Employment & Economic Development
(DEED) for a MN Investment Fund loan (equipment)
Call Public Hearing for Sale of EDA Property
March ]0, 2008 EDA Meeting
Page 2 of 2
Proposed Sale of EDA Property
The company has submitted a request to purchase the 9.29-acre Lot 4, Block 1 in the EDA-
owned Northstar Business Park to accommodate the proposed expansion project. Staff has
been working with Tom Bray of Briggs & Morgan to draft a purchase agreement for the sale
of the EDA property. The company has requested, and staff recommends contingent upon
Ehlers & Associates' review of the tax abatement application, that the lot be sold upfront for
the purchase price of $1.00 and the EDA would received payment through city and county
tax abatement revenues generated as a result of the project over an approximately 10-year
period (based on a sale price of $809,345).
The purchase agreement will include the statutory provisions for the sale of EDA property.
MN Statutes requires the EDA to provide notice and hold a public hearing prior to the sale
of property, review building plans and specs, and a reversion clause if the project is not
completed as agreed. A copy of the purchase agreement as executed by the company is
anticipated to be available for public review at the time the notice of public hearing is
published (April 2°`~).
Action Requested
Staff is conducting the due diligence on the various financing applications in preparation for
the EDA's review and consideration of the property sale, tax abatement, micro loan and
DEED loan application at its April 14, 2008 regular meeting. In order to meet the
company's desired spring construction schedule the EDA is asked to:
Call a public hearing for Monday, April 14, 2008 at 5:30 p.m. regarding the proposed
disposition of 9.29 acres of EDA property located at Lot 4, Block 1 Northstar
Business Park for the Sportech, Inc. expansion project.
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