6.4. SR 12-21-2009Ji
Elk REQUEST FOR ACTION
River
To Item Number
Ma or & Ci Council 6.4.
Agenda Section Meeting Date Prepared by
Community Development December 21, 2009 Catherine Mehelich, Director of
Economic Develo ment
Item Description Reviewed by
Consider Extending Time fox Meeting Wage & Job Goals Lori ohnson, Ci Administrator
Under the Tax Abatement and Business Subsidy Agreement for Reviewed by
Medical Extrusion Technologies Project -Public Hearing
Action Requested
Following the public hearing, the Council is asked to authorize an extension of up to two years to Tom &
Rikki Bauer for meeting the wage and job goals outlined in the Tax Abatement & Business Subsidy
Agreement for the Medical Extrusion Technologies Project.
Back_.ground/Discussion
In August 2005, Tom & Rikki Bauer entered into a Tax Abatement & Business Subsidy Agreement with
the City fox the construction of a 20,000sf light industrial facility, and committing to create 23 full time
jobs at a wage of $15/hour by October 4, 2008. Under the agreement the developer is eligible to receive
tax abatement fox a portion of the land acquisition cost up to $114,998 provided on apay-as-you-go basis
(commencing 2008). The developer's company, MET, occupies half of the building and the other half
has been available for lease.
Under the MN Business Subsidy Law, public agencies are required to report annually on the progress
toward job and wage goals for two years, or until the goals are met, whichever is later. At the end of the
two year period the developer reported having created 9 jobs. In November 2008 the City Council
approved a 1-year extension for the developers to meet the job and wage goals.
As of October 2009, the developer has created 10 full time jobs at a wage of $18/hour. The attached
letter from Medical Extrusion Technologies indicates the developer's response in their attempt to achieve
the wage and job goals over the past year. Due to economic conditions, the developer is requesting the
City's consideration of up to a two year extension to achieve these goals. The request would extend the
deadline to October 2011. The developer has been invited to the Council meeting to answer any
questions.
State statutes allow an extension on meeting the goals, following a public hearing by the granting agency.
Staff recommends that the City Council authorize a two year extension for meeting the job and wage
goals established in the agreement.
Financial Impact
The agreement allows that if goals are met in part, the City has the option to reduce the subsidy on a
prorated basis to the jobs created, or consider an extension of the term to meet the goals. To date the
S:\EDA\BUSINESS SUBSIDY\MET\MET Extension Action Requested 12 2109.doc
developer has received total tax abatement in the amount of $17,861. The term of the tax abatement is
up to 15-years or until the reimbursement amount is reached. If the developer does not meet the goals by
the end of the extension term, the City retains the option to reduce the subsidy.
Attachments
• Correspondence from Medical Extrusion Technologies dated November 10, 2009.
Action Motion by Second by Vote
Follow Up
S:\EDA\BUSINESS SUBSIDY\MET\MET Extension Action Requested 12 21 09.doc
MEDICAL EXfRU51DN TECiiNOLOCiEs
26608 Pierce Circle
Murrieta, CA 92562
PHONE: (951) 698-4346
FAX: (95i)b98-4317
November 10, 2009
Catherine Mehelich
Director of Economic Development
City of Ell; River
13065 Orono Parkway
Elk Aiver, MN X5330
Dear Ms. Mehelich:
In addition to the form that 1 have recently f
communications with a company that we fee
jobs in tlae Elk River area.
.led out, I want you to know that we have had on-going
will be an excellent fit for our building and the acquisition of
This probably would have come to fruition uclt sooner, however the economic tides have not exactly been
in a favorable made. We have again, opene up dialog with this company on October 21., 2009. There has
been nothing formally signed at this time. If his does not work out for this company by the end of the f>rst
quarter of 2010, Medical Extrusion Technol gies-Minnesota, Inc. wilt be working to fill out the entire
building without a tenant.
We are committed to our financial responsib~
Best regar/ds,,_ _
~~~--_
Rtlcki Bauer
L'd /tr~t~ RFq L~F
involved with this project.
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