5.1. SR 11-17-2008Elk REQUEST FOR ACTION
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River
To Item Number
Ci Council 5.1.
Agenda Section Meeting Date Prepared by
Community Development November 17, 2008 Catherine Mehelich, Economic
Develo ment Director
Item Description Reviewed by
Consider Business Subsidy Extension- Tom & Rikki Bauer Jeff Gongoll, Community
Develo ment Director
Reviewed by
Action Requested
Consider approving business subsidy extension of one yeax (to achieve job creation goal) for Tom &
Rikki Bauer, developers of Medical Extrusion Technologies (MET).
Background/Discussion
On August 15, 2005, the Bauer's entered into a Tax Abatement and Business Subsidy agreement with the
City, committing to constructing a 20,000 square foot building in Northstar Business Park and creating 23
new full time jobs (at $15/hr) within 2 years from the benefit date (issuance of Certificate of Occupancy).
Under the agreement, the developer is eligible to receive the value of a portion of the property in the
amount of $1.14,998 provided on apay-as-you-go basis (annual tax rebate commencing 2008). By law,
cities are required to report the progress towards business subsidy goals annually for two years, or until
the goals are met, whichever is later.
As of October 4, 2008 (benefit date), the developer has finished construction of their building and
created seven ('7) full time jobs meeting the hourly rate. They have also created two (2) temporary jobs
which will become full time after 90 days. MET has indicated that they have been working with an
interested party for the other half of the building which would bring in additional jobs. The prospective
tenant has paid partial rents for three months and is expected to occupy soon. The Bauer's have been
invited to the Council meeting to provide additional information and answer any questions.
The agreement allows that if goals are met in part, the City has the option to reduce the subsidy, prorating
it to the jobs created. An alternative option that cities often provide, although not specified in the
agreement, is an extension term to meet the one year goal. Staff recommends a one year extension be
considered.
Action Motion by Second by Vote
Follow Up
S:\EDA\BUSINESS SUBSIDY\State Reporting\2007\Action Requested MET - 11.17.08.doc
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MD1CA~. ~XT~I~S~p~ ~"~fN~~.~C~
Novemlaer i ~'~ ~04~
~: ~.n~i~ Dec~ert
l~conomic Develapment ,Assistant
City o~l~ .ivr
1~0~5 ~rana parkway
l~Ik liver, Minnesota 5533
I~RO~ l~kki Bauer} Vice President ~ Medical iJxtrusian Technolo~ies~M
R: Subsidy ~,;reernent response
~~-~:
fur Caals have changed dra~a~ically within the last ~vee: ~vith regard to the side o~aur i`acility that was
built to be rented out thereby incre~in~ tine a~naunt ai`jabs per side afthis facility to ~~, ~e had a
carparation ghat vas very interested in renting the ~~~ side ai`aur acili~y -- so interested that fey have been
rn.~ing ~I? rent payments to bald the facility until they could move into the buildir~~ in N~avember. Due to
the economic d~~rnturn, they have ~vithdra~vn their intent to commit to the mane t~ our ~~~ half~l`the
~`acility on Tyler Street.
This has caused us to ~a to our plan "B" ~vith regards t~ N~edical Extrusion Tech~c~io~is-~, inc. It is
no~v our plan to acv Medical Extrusion Teehnolo~ie-N~innesata, Inc and to dill the building ourselves. ~t
does not appear that ~v are able to attract, at this timo, the Pe oi' client that eve ~vould avant to have
sharing our medical tuh~~ ~`a~ility.
There still ~vill be r~o ~~nplayees brou~t ~rarn another i`aciiity at this time to f ll any~ab positions at this
facility. e ~~rill continue to seep qualified candidates ~vithin the area to fli~ab positions here.
aur~v ova a o~ `ads created:
finality Control Manager ?3.00
C ~nspec~or 10.0
~ ~r~spectar ~ O.Od 14.0a through Temp Service
~~~p~~~ .~~~~~~~~~ ~ ~.ao ~ ~.a~ t~r~u~~ ~~~~ ~~~
E~ttrusion Technician ??.75
Extrusion Technician ?x.00
~~~~~ Assistant ~s.~o
Facilities anger ?3.75
These are current actual ~vages as of I~oven~ber 17, 2aaS.
Page ~ icy o~`~ diver
hum of ~ouxIv wa a and cost of health insurance rovided for new~v created 'obs:
~e ~ealthlf-ifel'~isionlDental ~'otal ~e~ hoer
Quality Con~ral ~aua~er 2~,OQ ~.~0 2.a
Q Inspector 10,0 a.50 1 ~. ~ a
~ ~nsp~~~r ~ ~.oo ~~~ Temp service ~~
>~~~~~~~ Assistant ~o.oo ~~~ Tip ~~~~~ ~~
~~€trusion Technician ??.7~ 3.5~ ~~,?~
~tr~asiar~ Te~hr~ician ~~.oo ~.~o ?s,a
~~~~~ Assistant ~.o ~.~o ~~.oa
'acuities ana~er ~~.7 ~.5~ ~~'.5
hum of dourly ~r~a~es. cost of heait~~ ir~sr~~rance nand ~nrofit sliar~n~ ~~a. _~ravid~d for n~~ly ~~ated
~~s~d ~r~ ~,~0~ ~~a~~s
4~V„ ~i~al~~1~~~~1'L~~sao~~~cnt~~ ~ r~ it s ~~r~r~ ~r
Quality Gantrol ana~er ?3.oa .sa b,9~D.0a
~ inspector ~~,~a .~o ~, ~ sa.oa
Q inspector I~,Da ~S~A Temp Ser~rice
hippie Assistant 1~,D~ ~I~ Temp service
~trusion Technician ?~?.~ .5~ G,~?S.~D
xtr~.tsion Technician ??.D~ .5~ G,~OD.00
DI;`~i Assista.r~t ~~.aa x.50 ~,SD.~D
facilities ~an~~er ?~,~~ 3.SD 7,~?a.~D
e also aver a very valuable vacation schedule.
chile eve have dell short an the ? jobs far tl~e total building, a Iar~e shoe ofthis has fi~een dui to the
inability to adequately rent out tlae second hal~a~the building that ~vvuld have created additional jabs quite
rapidly. It is the pra~tic o`edical Extrusion. Te~hnolo~ies-i~esata, Inc, to eat just create jobs, but to
rent careers ~`or oar e~npl~yees and dive then opportunities to grow within their job unctions. lnce job
creation vas one a~the requirements that were set out ~`or ns - ar~d we agreed to - eve plan to honor that
responsibility. since our initial plan did not play ont as expected by initially having a tenant in the second
llal~' ai'the Facility, eve must novr decide where to go l~ra~n here and recoup.
As listed in tl~e goals above, eve have no~v decided to occupy the entire building within the next 18 months.
This ~~rould create additional jobs as ling as the ecana~nic ~lim~ate remains sam~e4vhat stable. Since eve
cant predict the ut~r~ odour ecnnarr~ic status in Minnesota for any other Mate for that matter} it will be
our goal to occupy the ~ntir building at this time.
Page ~~y o~ ~~~~ Rives
rf~c~ssib~e, ~~e vr~u~d l~ tQ be able ~~ ,c~a~d the de~d~~e ~'ar the ~ fobs cre~~e~ far ~~~ buildu~~ for ~~
~ ~ on~hs, Dur~n~ the e;~ee~~ian a~ oar ari~a~ ~~reerr~er~~, i~ ~va~ st~~ed ~~a~ here vas a passib~~~ o
e~~eud~ng ~~e re~u~remen~ ~~~ game b~ oue year. "fie feel ghat iZ-~ 8 months wau~d b~ve ~s addr~ianl
dime ~o ~~rease business at ~~ ,Niinnesa~a loca~ian and subsequen~~ build a base ~"or n~d~~iona~ careerjab~
pasi~ions,
~ are en~oy~ our business pra~res here in Bik ~~ver and expee~ ~~ have a very ~on~ term business
reia~iot~ship ~~i~l~in the eomunl~~
Best regards,
Vicki Bauer, ~~~ner
N~ed~cnl E~~sian Teeta~oies~ inc.
~ 757 Tyler Street N
Bl~ giver, Iv~N~ SS33p
Tam ~, Barer, ~~~ner
ed~oal ~x~-usiar~ Teel~aloaies, one.
~ 75D7 Tyler Street N
ill; ~.iver, N ~3Q
~ersannl Cell: ~ ~ ~6~~~6~0~ 763-Z~ ~ - l SQ8