01/15/2014 - City Council Finance CommitteeFINANCE COMMITTEE MEETING
WEDNESDAY, JANUARY 15, 2014
1:00 -2:30 P.M.
CONFERENCE ROOMS 2 A &B
AGENDA
I. AGENDA ADOPTION
9� , a II. ELECTRONIC PACKET /TABLET DEMONSTRATION
III. PUBLIC FINANCING ASSISTANCE
A. CONSIDER REQUEST FOR AN EXTENSION TO THE FIVE YEAR
EXPENDITURE RULE FOR NORTHEAST EAGAN REDEVELOPMENT
DISTRICT #2 -5
\n B. OVERVIEW OF CURRENT POLICY AND POTENTIAL FUTURE
ASSISTANCE REQUESTS
IV. OTHER BUSINESS
V. ADJOURNMENT
Agenda Memo
January 15, 2014 Finance Committee Meeting
II. ELECTRONIC PACKET /TABLET DEMONSTRATION
DIRECTION TO BE CONSIDERED:
1. To receive a demonstration and provide a recommendation to the City Council on the
proposed method for delivering electronic packets.
2. To provide feedback on the proposed City Council Tablet Policy.
FACTS:
Tablets
• Per the direction of the City Council, city staff has been evaluating several methods and
products to successfully distribute Council packets electronically.
• Three operating system platforms were tested internally: Apple iPad, Google Android,
and Microsoft Surface.
• Editing capabilities and packet distribution methods were also reviewed, which included
research using internal software versus third party solutions, such as Dropbox.
• Staff strived to find a solution that can collaborate all communication platforms used
(including the City's website and social media sites) to distribute the packets. The goal
would be to have city staff distribute the electronic packets to one location and have it
viewable and /or editable by many devices.
• After significant testing, it was concluded that the Microsoft Surface was the highest
priced tablet, and it did not offer an affordable editing option like the Android and IPad.
While the Android was the most cost effective operating system platform, two
applications would be needed to distribute and edit, which could be time consuming for
staff and have potential for added steps when viewing documents.
Staff is recommending that the City purchase iPads for each Councilmember and utilize
the free application iLegislate for packet distribution and editing. The iPads are cost
effective and the iLegislate application is a product of the software developer Granicus,
who also provides development services for the City's website. Thus iLegislate integrates
into products already used by the City and also has potential to provide other benefits for
Council agenda management in the future.
Several cities currently use the Granicus platform on iPads for electronic packets have
reported excellent results.
• The cost breakdown for the recommended purchases is:
• Purchase Wad 2, 16GB units ($399 per unit)
• Purchase Zagg keyboard case per unit ($99 per unit)
• Install iLegislate (free app) on Wad
• Each iPad will receive a Stylus for editing
It is anticipated that Councilmembers would connect to the internet on the iPads via
wireless connections. In addition to having Wi -Fi available at City Hall, City facilities,
coffee shops, etc., each Councilmember stated they have wireless connections available
at their homes when staff polled the Council on this issue last fall. As such, it is proposed
that the City not purchase mobile broadband internet for each device.
Staff also researched the option of providing Council with stipends to purchase their own
tablets rather than being issued a City -owned device. Per the advice of our peer
communities , City- issued tablets are being recommended for several reasons, including:
1.) The device and its contents will be subject to MN Data Practices laws and thus it is
advisable to use the tablet primarily for City business and communication; and, 2.) City -
owned devices allow the City's IT staff to support and manage the devices.
• Staff is prepared to provide a demonstration to the committee of the proposed technology
to distribute electronic packets to the City Council.
Tablet Policy
• At the request of the Council, the enclosed City Council Wad Policy has been developed
for the Committee's review.
• The recommended policy gleans many parameters suggested in policies from other
communities that have successfully used tablets for electronic council packets.
• The policy specifically calls out that information stored on the tablets is governed by MN
Data Practices and must be treated accordingly. The Council may wish to have the City
Attorney provide a briefing on the relationship of tablets and data practices in advance of
the tablets being rolled out.
Next Steps
• Pending feedback from the committee, a demonstration for the Council is scheduled for
the January 28 Council retreat.
• If the Council chooses to proceed ahead, the tablets will be ordered in early February, the
policy would be added to a February Council consent agenda, staff and Council training
would occur in mid - February, and the electronic packets would "go live" by the March
18 or April 1 Council meeting.
ATTACHMENTS:
• Enclosed on pages 11 and 5 is the draft City Council Wad Policy.
5
City of Eagan
City of Eagan -
City Council Wad Policy
Purpose
DRAFT
The guidelines included in this user agreement pertain to council members who are issued an iPad device
purchased by the city. The purpose of these guidelines is to outline the responsibilities and care required
for city- issued iPads.
The devices are intended to be utilized by council members for the purpose of enhancing meeting
workflow and reduce the use of paper agenda packet materials.
City Council Use
Issued devices are intended for professional use. The city does not maintain loaner devices, so users will
be responsible for conducting meetings without a device in the event of a lost or misplaced device.
• Devices shall be maintained in a suitably charged state during Council meetings.
• Devices will be secured with a minimum four (4) digit numeric pass code and must be changed every
90 days by the user.
• Device will be programmed to lock after 15 minutes of inactivity and you will be required to enter
your pass code to log back in.
• End users shall not go to any inappropriate, illegal, offensive, pornographic, or adult- oriented internet
sites.
• Inappropriate media may not be used as a screensaver or background photo.
• Information stored on the iPad or tablet device could be classified as public, private, or other data and
is governed by the Minnesota Government Data Practices Act (MN Statute Chapter 13) and must be
treated accordingly.
• Open meeting laws must be adhered to including limitations on electronic messaging between council
members during public meetings.
• Personally -owned music, games and apps may only be present on city- issued device when using a
personal Apple ID iTunes account.
• In case a device has to be restored to its original state, the user is responsible for restoring any
personal content (i.e. apps, photos, contacts, email, etc.).
• City staff is not responsible for backing up or restoring personal related content.
Personal/Home Use
The iPad or tablet device is a powerful computing tool. Failure to adhere to the policy shall result in the
revocation of such use privilege.
• Users are allowed to connect devices to non -city wireless networks.
• While instruction and advice may be offered, the city staff is not responsible for home network use or
support.
• In accordance with the Minnesota Government Data Practices Act, it is the policy of the city to
maintain the right to access and disclose any and all messages communicated through electronic
means when city issued equipment is used. Regardless of the intent of the message (business or
personal), any employee or council member involved has no right to privacy, or to the expectation of
privacy, concerning the content of any message or the intended destination of any message when
using city- issued equipment.
LA
Ambib-
City of Eagan
DRAFT
Wad Care
Users will be held responsible for the maintenance and care of assigned communication devices.
• Keep batteries charged and ready for use at meetings.
• Clean the view screen with a soft, dry cloth or anti - static cloth as needed.
• Do not lean or place anything on the screen that may cause damage.
• Utilize the protective case at all times.
• When not in use, store in a secure location. Never leave in an unlocked car or any other
theft -prone area.
• With seasonal changes, please keep device out of the elements during the winter and
summer months. Excessive heat and /or cold can cause damage to device.
• Synchronizing city data to any type of Cloud storage or personally -owned computer is
strictly prohibited. If you wish to synchronize personal data such as pictures, contact
information, etc. that is acceptable.
• Council members are responsible for the replacement cost for device damage or loss due
to negligence.
• Immediately report lost or stolen device to the IT department by calling 651- 675 -5111.
Application Software
All software applications purchased and installed by city staff must remain on the device in a usable
condition and be accessible at all times. Users are responsible for personal software applications and are
responsible for installation and backup.
• Software purchased by the city will be done through the city Apple iTunes or similar account.
• Users are allowed to purchase and download personal applications with their personal Apple
iTunes account providing they are not profane, obscene or offensive to others.
• The city is not responsible for the loss of any personal software applications when the device
is updated, tested with diagnostic tools or restored to its original state.
• Storage space needed for city applications will take precedence over space used for personal
items.
Acknowledt?ement
Councilmembers who are assigned an iPad device shall be provided a copy of these guidelines and shall
acknowledge receipt and understanding of the provisions outlined herein. The guidelines may be updated
as needed.
I agree that I will use the City Wad device in accordance with the specifics outlined in this user
agreement. I also understand that use of a city asset is a privilege that may be revoked at any time.
Printed Name:
Signature:
Date:
5
Agenda Information Memo
Finance Committee Meeting
January 15, 2014
III.A. BUSINESS FINANCING POLICY — Consider Direction regarding
Request for Extension of TIF District #2 -5 Five Year Rule
DIRECTION TO BE CONSIDERED:
To make a recommendation to the EDA regarding an extension of the five year rule for
Northeast Eagan TIF District #2 -5.
FACTS:
Staff has reviewed the background related to Northeast Eagan TIF District #2 -5 and
found that it is nearing the end of its Five Year Rule, the time within which expenditures
may be made to support redevelopment activities. The timeline runs in April, 2014. A
memo relative to this issue is attached.
ATTACHMENTS:
• Staff memo regarding District #2 -5 Fiver Year Rule on pages 9 through q
City of Ea p Na
TO: DAVE OSBERG, CITY ADMINISTRATOR
FROM: JON HOHENSTEIN, COMMUNITY DEVELOPMENT DIRECTOR
DATE: DECEMBER 27, 2013
SUBJECT: NORTHEAST EAGAN TIF DISTRICT #2 -5 FIVE YEAR RULE
While most of our attention recently has related to the City's request for an
extension of the TIF District term and Five Year Rule for the Cedar Grove
Redevelopment District, we have also reviewed the background related to
Northeast Eagan TIF District #2 -5 and found that it is nearing the end of its Five
Year Rule, the time within which expenditures may be made to support
redevelopment activities. The timeline runs in April, 2014.
Since new development within the District must be underway by that time and no
development plans are pending, it will not be possible to assist future development
in the area without an extension of that deadline by the Legislature. The question is
whether to request the extension separately (now or In the future) or as a part of the
City's request for the Cedar Grove Redevelopment District extension.
TIF District #2 -5 was certified in 2009. A graphic of the area is attached. It is made
up of the portions of Northeast Eagan TIF District #2 -4 that had not redeveloped at
that time. District #2 -4 facilitated the redevelopment of properties in the area into
the Grand Oak Business Park.
The City and EDA are not exposed from a property cost standpoint, as the
properties that were acquired were resold to McGough Development in anticipation
of the Blue Gentian Corporate Center development that has been approved for
construction in the southeast quadrant of 1 -494 and I -35E. As a consequence of
the depressed office market in the aftermath of the recession, McGough has not
been able to attract an anchor tenant or buyer to initiate that project.
The City has a TIF Development Agreement with McGough that commits it to
provide pay as you go assistance of 75% of the TIF revenues created, as it may be
available. The purpose of the TIF assistance is to support the construction of a
parking structure within the development that would permit a larger, more vertical
building to be constructed on the site than would be possible without it, The
remaining 25% of increment generated would be available for pooling to other
districts, if necessary.
q
The other purpose for requesting an extension of spending authority is that no
redevelopment activity has occurred or been proposed in the portion of the district
south of Hwy 55. In the long run it may be worthwhile to work with property owners
in the area to consolidate certain parcels and incorporate the Budget Host Hotel
property into a broader project.
In discussions with House staff regarding the Cedar Grove TIF extension, it has
been observed that requests for Five Year Rule extensions, without district term
extensions, have been relatively non - controversial. We understand, too, that it is
better to ask for the extension before the current Five Year Rule expires than after.
POLICY QUESTION:
As noted above, the question is whether to request an extension of the Five Year
Rule for District #2 -5 in the 2014 session or in the future and, if it is to be in the
2014 session, whether to make the request together with the Cedar Grove
Extension request or as a separate request,
I believe it would be better to ask now and separate from the Cedar Grove request.
This is not unprecedented as Bloomington had several bills for different TIF districts
last year. We would also need to decide whether to ask Larkin Hoffman to support
this bill as well or try to manage it without lobbying assistance. I suspect they would
charge extra to do so, but we could negotiate some reasonable compensation
since they will be there on our other bill anyway.
Please share this background with the Finance Committee in order to provide the
information and a recommendation to the EDA in the near future.
Thank you for your help in this regard and please let me know if the Committee
members or you have any questions.
Co munity Development Director
N N
o •a
R! O C
0. a rn 7no
N
fA CL m_
D a 0 F '. -
U.
WAN!
1
,. y.
lot
CoI Cw � �/� ---` ��•,...,- ,,,, -,. "•yam .��y� f r t
s r
kk ,, d fit rt4
f' "�,,.+ 4 t J f S 3, SLLLL4411SC77 r .<
Q (t
�ti}Q g t �e L �1fi
Z
p LLLLB� '�W, 7t fX
Any
t FV{1�--1 dd t i
xa=_ M1 .j(�Z00 Y�4f- �Zrf/W, t'F�{ sf,.t ti k.ri
>.- {a'� ,)f icy - � 3 5 - _:> OWN
t i
y.. ....
.�•. -: .t��„ �. y •U1.4 r f y Y 1 p�� f ,\ }qtr
xm
r yy 8 .1 `. J yK Oj3, �- rn.a.Mn•'nn.`nfH...nNwx.vrc ,,-L
u
oat
.. ........ .....
II„„ un
1
Agenda Information Memo
Finance Committee Meeting
January 15, 2014
III.B. BUSINESS FINANCING POLICY — Overview of Current Policy and
Potential Future Requests for Assistance
DIRECTION TO BE CONSIDERED:
1) To overview the current Business Financing Assistance Policy and approach in
relation to the City's economic development philosophy, and
2) To review information relative to the mechanics of tax abatement.
FACTS:
Business Financing Assistance Policy and Philosophy
In the past, the City has relied on its competitive advantages including its location,
proximity to the airport, 494 commercial area and the two downtowns, access to 494
and 35E, quality infrastructure, low taxes, rich broadband environment and other
features to attract business vitality, expansion and location.
To date, the City has been patient in allowing the private market to drive most
development and occupancy deals on individual properties. While the City, through
its EDA has been active on a selective basis to assist with multi - property assembly
and redevelopment projects, it has relied on commercial owners and brokers to
market properties and has focused City efforts on working with those private entities
and responding to applications for business financing assistance on a case by case
basis.
The minimal use of business subsidies has allowed the City to maintain its low
property tax rates for businesses that chose to locate and expand in the City without
financing assistance.
The City's current Business Financing Policy and application are based on an
applicant or owner approaching the City to request assistance and the City has not
proactively sought opportunities to offer assistance to prospects in response to
standard site selection processes.
There has been a recent increase in attention to business financing assistance due to
national competition for certain business locations and changing expectations of some
businesses, as communities competed for a small set of new prospects to fill vacant
spaces or develop green field sites during the recession and the initial stages of
recovery. Greater MSP has included the availability of incentives as a tipping factor
for certain of the business prospects they attract to the region. There has also been
media attention for the apparent success of cities like Shakopee in attracting major
�D
locations through incentives (office warehouse and distribution may have gone there
anyway due to improved 169) and knowledge that DEED has expanded funding from
the 2013 Legislative Session. That said, there is also evidence to suggest that other
factors in an area's business environment carry more weight.
• Even as the recovery takes hold and the number of prospects increases, there are an
increasing number of prospects, brokers or location consultants who include
questions about local financing assistance, fee waivers, and other forms of assistance
in their discussions of location options. Despite these inquiries, the City of Eagan has
been able to attract MISO, Cloverleaf Cold Storage, Murphy Companies and others to
make substantial investments in the City for the standard business reasons of price,
infrastructure, business amenities and location.
• A recent experience that underscores the value of the City's application based
approach is the discussions that were held with Stream Global Services over a period
of months in which they asked the City to serve as a conduit for DEED funding for
their location and expansion in Minnesota. The company was reluctant to fill out the
necessary applications and provide the information required. Ultimately, they leased
a facility for their initial expansion without assistance, but continued to prospect for
sites in another City for their headquarters and further expansion, presumably
pursuing public financing assistance there. Within the last week, it was announced in
the media that the company has been purchased by another customer care services
company and that its plans for future expansion in Minnesota is not clear. The first
question a reporter asked when calling about the story was whether the City had any
incentives at risk because of the announcement.
• Through the City's Visioning process, a number of comments arose in both the
Council and staff response groups suggesting that the City become more aggressive
about offering business incentives, either generally or on a targeted basis for certain
priorities. As the City Administrator and staff have put the Visioning results into a
goals format, a review of the City's public financing philosophy is among the
possible goals. It will be useful to have some initial discussion with the Committee as
to its perceptions of the City's historic approach to business subsidies versus patience
with the private market and how that may or may not evolve in the future. Does the
Committee see a purpose in substantially expanding or modifying the City's use of
public financing tools in general or in specific situations (business attraction, building
modifications, carrier hotel development, etc.) or would the Committee recommend a
general continuation of the current philosophy and approach?
Tax Abatement as a Development Tool
Currently, the City's Business Assistance Policy states that the City of Eagan does not
provide business assistance through Tax Abatement. Irrespective of whether the
general philosophy and policy remain or change, the situations in which other
property based business assistance is provided (the various forms of tax increment
financing) may not apply will increase.
Tax increment works best to build up from a green field or to replace lower valued,
substandard buildings with new, higher valued ones. In the case of green field or
economic development districts, it is necessary for the development to fall within
specific use categories supporting job creation or affordable housing development. In
the case of some existing buildings, the best new use of the property may be in the
form of a remodeled or repositioned reuse, rather than demolition and replacement.
If the City were to see a public purpose in supporting green field development for
uses other than jobs or affordable housing or to reuse an existing building for a higher
and better use, tax abatement is among the only tools available for that purpose. As
an example, if the City concludes it would be open to financing assistance for a
project like the enhanced CSM Central Park Commons plan, Tax Abatement and
third party grants would be among the only options that may be applicable.
In follow to questions raised about the mechanics of Tax Abatement at a previous
Committee meeting, Mark Ruff of Ehlers has prepared the memo attached and he will
be at the meeting to discuss how other cities apply the tool.
On the basis of this or additional discussion, the Committee may determine to retain
the current policy on tax abatement or make a recommendation to the EDA to amend
the City's Business Financing Policy to include it among the tools that may be
considered generally or in specific circumstances.
ATTACHMENTS:
• Current City Business Assistance Policy on pages —L through 0�-7
• Star Tribune Article concerning tax breaks on page
• Ehlers memo regarding tax abatement on pages through
E
CITY OF :EAGAN
BUSINESS ASSISTANCE POLICY
Adopted December 19, 2006
Updated August 21, 2012
1, PURPOSE
1.01 The purpose of this policy is to provide a guideline for the City of Eagan (City Council or EDA
Board) to offer assistance for commercial and housing development and redevelopment projects.
The Business Subsidies Statutes are codified as Minnesota Statutes 116J.993 through 116J, 995.
Minnesota Statutes 116J 993, Subd 3 defines a Business Subsidy as "a state or local government
agency grant, contribution of personal property, real property, infrastructure, the principal amount
of a loan at rates below those commercially available to the recipient, any reduction or deferral of
any tax or any fee, any guarantee of any payment under any loan, lease, or other obligation, or
any preferential use of government facilities given to a business." Appendix A lists forms of
financial assistance that are not a business subsidy, This policy shall be used as a guide in
processing and reviewing applications requesting business assistance.
1.02 The City shall have the option of amending or waiving sections of this policy when determined
necessary or appropriate. Minnesota Statutes 116J.994, Subd. 2, allows the City to deviate from
its criteria by documenting in writing the reason for the deviation and attaching a copy of the
document to its next annual report to the Department of Employment and Economic
Development,
2, STATUTORY LIMITATIONS
2.01 In accordance with the City of Eagan's Business Assistance Policy, assistance requests must
comply with applicable State Statutes, including Minnesota Statutes 116J.993 through 116J.995.
3. GOALS
3.01 As a matter of adopted policy, the City of Eagan will consider using a business assistance tool to
assist private developments only in those circumstances in which the proposed private projects
show a demonstrated financing gap and meet one of more of the goals, as identified in the City of
Eagan's Comprehensive Plan for Economic Development dated April 6, 2010.
4. BUSINESS ASSISTANCE PROJECT APPROVAL CRITERIA
4.01 All new projects approved by the City of Eagan should meet the following mandatoiy minimum
approval criteria. However, it should not be presumed that a project meeting these criteria will
automatically be approved. Meeting these criteria creates no contractual rights on the part of any
potential developer,
A. The assistance shall be provided within applicable state legislative restrictions, State
Auditor interpretation, debt limit guidelines, and other appropriate financial requirements
and policies.
B. The project should meet one or more of the goals referenced in the City of Eagan's
Comprehensive Plan for Economic Development.
�*DJ
C. The project must be in accord with the Comprehensive Plan and Zoning Ordinances, or
required changes to the Comprehensive Plan and Zoning Ordinances must be under
active consideration by the City at the time of approval.
D. The assistance will not be provided to projects that have the financial feasibility to
proceed without the benefit of the assistance. Assistance will not be provided solely to
broaden a developer's profit margins on a project. Prior to consideration of a business
assistance request, the City may undertake an independent underwriting of the project to
help ensure that the request for assistance is valid.
K Prior to approval of business assistance, the developer shall provide any required market
and financial feasibility studies, appraisals, soil boring, information provided to private
lenders for the project, and other information or data that the City or its financial
consultants may require in order to proceed with an independent underwriting.
F. Any developer requesting business assistance should be able to demonstrate past
successful general development capability as well as specific capability in the type and
size of development proposed.
G. The developer must retain ownership of the project at least long enough to complete it, to
stabilize its occupancy, to establish the project management, and to initiate repayment of
the business assistance.
H. The level of business assistance funding should be reduced to the lowest possible level
and least amount of time by maximizing the use of private debt and equity financing first,
and then using other funding sources or income producing vehicles that can be structured
into the project financing, prior to using additional business assistance funding.
5. BUSINESS ASSISTANCE PROJECT EVALUATION CRITERIA
5.01 If a business meets the criteria in Section 4 and is eligible for assistance, the following criteria
will be used to determine the amount of assistance and type of assistance that may be provided.
All projects will be evaluated by the EDA and Eagan City Council on the following criteria for
comparison with other proposed business assistance projects reviewed by the City, and for
comparison with other subsidy standards (where appropriate). It is realized that changes in local
markets, costs of construction, and interest rates may cause changes in the amounts of business
assistance subsidies that a given project may require at any given time. In applying the criteria to
a specific project, the following will apply;
A. The City may consider the requirements of any other business subsidy received, or to be
received, from a grantor other than the City,
B. If the business subsidy is a guaranty, the amount of the business subsidy may be valued at
the principal amount of the guaranteed payment obligation.
C. If the business subsidy is real or personal property, the amount of the subsidy will be the
fair market value of the property as determined by the City,
D, If the business subsidy is received over time, the City may value the subsidy as it
determines is fair and reasonable under the circumstances.
2
H
As used herein, `Benefit Date," means the date the business subsidy is received. If the
business subsidy involves the purchase, lease, or donation of physical equipment, then _
tine benefit cT61 occurs wTien tie recipient puts the equipment into service. If the business
subsidy is for improvements to property, then the Benefit Date refers to the earliest date
of either when the improvements are finished for the entire project or when a business
occupies the property.
E. All business assistance projects will need to meet a "Reasonable Rate of Return."
Assistance will not be used unless the need for the City's economic participation is
sufficient that, without that assistance the project could not proceed in the manner as
proposed. The Reasonable Rate of Return will be based on market standards at the time
of the application for assistance.
F. Business assistance will not be used when the developer's credentials, in the sole
judgment of the City, are inadequate due to past track record relating to: completion of
projects, general reputation and /or bankruptcy, or other problems or issues considered
relevant by the City.
G. Business assistance funding should not be provided to those projects that fail to meet
good public policy criteria as determined by the Council, including: poor project quality;
projects that are not in accord with the comprehensive plan, zoning, redevelopment plans,
and city policies; projects that provide no significant improvement to surrounding land
uses, the neighborhood, and /or the City; projects that do not have significant new, or
retained, employment; projects that do not meet financial feasibility criteria established
by the City; and projects that do not provide the highest and best desired use for the
property.
H. All projects receiving business assistance under the criteria listed in Minnesota Statutes
116J.993, Subd. 3 must meet the job and wage goals described below. Minnesota Statutes
116J.994, Subd. 2 allows the City to deviate from its criteria by documenting in writing
the reason for the deviation and attaching a copy of the document to its next annual report
to the Department of Employment and Economic Development.
1. Except as described in 2 and 3, a business subsidy must result in the creation or
retention of jobs, which will pay at least 80% of the Median Income for Dakota
County (base jobs). In addition, consideration will also be given to the creation or
retention of jobs, which will pay 100% of Median Income for Dakota County
(head of household jobs), The Median Income for the County is annually defined
by the Minnesota Housing Finance Agency. (In 2012, 100% of the median is
$83,900 and 80% of median is $67,100.). Wage goals will be set forth
specifically in the business subsidy agreement. Where job creation is one of the
public purposes of the business subsidy, the subsidy may be up to $10,000 per
base job retained or created and may be up to $20,000 per head of household job
retained or created. The amount of assistance available to a project will be
limited by the amount of proceeds that TIF or other financing tools may support.
2. Job creation or retention is not required for businesses subsidies as long as the
grantor identifies an alternate public purpose in addition to tax base increase. If
after a public hearing /council consideration of the alternate public purpose(s)
proposed, the creation or retention of jobs is determined not to be a goal, the
wage and job goals may be set at zero.
6
3. _ In lieu of job creation or retention, other measurable, specific, and tangible go_ als
shall -ie est iished, Examples of tangible goals may include redevelopment, or
pollution or soil remediation.
I. Business assistance will normally be used for projects that address the following land use
issues: (1) more compatible with the City's Comprehensive Plan than other permitted
uses for property; (2) located on property which needs but is not likely to be developed or
redeveloped because of blight or other adverse conditions of the property; and /or include
design and /or amenity features not otherwise required by law.
J. Business assistance will be evaluated on the project's impact on existing and future
public investment: (1) whether and to what extent the project will utilize existent public
infrastructure capacity and the extent it requires additional publicly funded infrastructure
investments; (2) arrangements for the City to receive a direct monetary return on its
investment in the project.
K. Business assistance will normally be used for projects that demonstrate to the satisfaction
of the City adequate financing for the project is available and that the project will be
completed in a timely fashion,
L. Business assistance from the City must satisfy all requirements of Minnesota Statutes
116J,993 through 116J.995.
5.02 Some criteria, by their very nature, must remain subjective. However, wherever possible
"benchmark" criteria have been established for review purposes. The fact that a given proposal
meets one or more "benchmark" criteria does not mean that it is entitled to funding under this
policy, but rather that the City is in a position to proceed with evaluations of (and comparisons
between) various business assistance proposals, using uniform standards whenever possible.
V Mike Maguire
Mayor
Date
1 (p
CITY OF EAGAN
PRE - APPLICATION
- - - — -- - -- - -- — -BUSINES5 SIS NCE FINNX_ CING - - - -- - -- -
Legal name of applicant:
Address:
Telephone number:
Name of contact person:
REQUESTED INFORMATION
Addendum shall be attached hereto addressing in detail the following:
1, A map showing the exact boundaries of proposed development.
2, Give a general description of the project including size and location of building(s); business
type or use; traffic information including parking, projected vehicle counts and traffic flow;
timing of the project; estimated market value following completion,
3. The existing Comprehensive Guide Plan Land Use designation and zoning of the property.
Include a statement as to how the proposed development will conform to the land use
designation and how the property will be zoned,
4, A statement identifying how the assistance will be used and why it is necessary to undertake
the project.
S. A statement identifying the public benefits of the proposal including estimated increase in
property valuation, new jobs to be created, hourly wages and other community assets.
6. A written description of the developer's business, principals, history and past projects
I understand the Pre - Application is a tool through which the City will make an initial determination as to
whether public financing assistance might be considered for the project. If so, I would intend to prepare
and submit a formal application for business financing assistance,
SIGNATURE
Applicant's Signature:
Date:
�9
CITY OF EAGAN
_ APPLICATION _
BUSINESS ASSISTANCE FINANCING
GENERAL INFORMATION
Business Name:
Address:
Type (partnership, etc.):
Authorized Representative:
Description of Business:
Legal Counsel:
Address:
FINANCIAL BACKGROUND
1. Have you ever filed for bankruptcy?
2. Have you ever defaulted on a loan commitment?
3. Have you filed for conventional financing for this project?
4. List financial references:
a)
b)
C)
0
Date:
Phone:
Phone:
5, Have you ever used Business Assistance Financing before?
If yes, what, where and when?
PROJECT INFORMATION
1, Location of proposed project:
2, Amount of business assistance requested:
3, Need for business assistance:
4. Present ownership of site:
5. Number of permanent jobs created as a result of project:
6. Estimated annual sales: Present:
7, Market value of project following completion:
8, Anticipated start date:
FINANCIAL INFORMATION
1, Estimated project related costs:
a) Land acquisition
b) Site development
P,) Building cost
d) Equipment
e) Architectural /engineering fee
f) Legal fees
g) Off -site development costs
TOTAL:
7
FG
Future:
Completion date:
2. Source of financing:
a) Private financing institution
b) Requested public assistant funds
c) Other public fiends
d) Developer equity
TOTAL:
I am submitting the business financing assistance application and related support documentation for the
purposes of requesting consideration of public financial support of my project. I understand that the
application fee is non - refundable and that the escrow deposit will be used for City staff and consultant
costs associated with the review of this application. The balance of the escrow may be returned if the
costs of review are less than the original deposit. The escrow may be partially refundable if the request
for assistance is withdrawn. Refunds will be made at the discretion of the City Council and be based on
the costs incurred by the City prior to the withdrawal of the request for assistance, If the initial application
escrow is insufficient to cover all City costs of review, I will be responsible for additional deposits,
SIGNATURE
Applicant's Signature:
Date:
PLEASE INCLUDE:
1. Preliminary financial commitment from bank.
2. Plans and drawing of project,
3. Background material of company,
4, Pro Forma analysis,
5, Financial statements.
6. Statement of property ownership or control,
7. Payment of application fee of $1,000
8. Escrow payment $10,000 and Escrow Agreement
8
a�
APPENDIX A
The Business Subsidies Siatutes specifically exclude 22 items from the definition. The following are NOT
business subsidies:
• A business subsidy of less than $150,000;
• Assistance that is generally available to all businesses or to a general class of similar businesses,
such as a line of business, size, location, or similar general criteria;
• Public improvements to buildings or lands owned by the state or local government that serve a
public purpose and do not principally benefit a single business or defined group of businesses at
the time the improvements are made;
• Redevelopment property polluted by contaminants as defined in M.S. Section 116J.552, Subd 3;
• Assistance provided for the sole purpose of renovating old or decaying building stock or bringing
it up to code and assistance provided for designated historic preservation districts, provided that
the assistance is equal to or less than 50% of the total cost;
• Assistance to provide job readiness and training services if the sole purpose of the assistance is to
provide those services;
• Assistance for housing;
• Assistance for pollution control or abatement, including assistance for a tax increment financing
hazardous substance sub - district as defined under M.S. Section 469,174, Subd, 23;
• Assistance for energy conservation;
• Tax reductions resulting from conformity with federal tax law;
• Workers' compensation and unemployment compensation;
• Benefits derived from regulation;
• Indirect benefits derived from assistance to educational institutions;
• Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and
bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal
Revenue Code of 1986, as amended through December 31, 1999;
• Assistance for a collaboration between a Minnesota higher education institution and a business;
• Assistance for a tax increment financing soils condition district as defined under Ms, Section
469.174, Subd 19;
• Redevelopment when the recipient's investment in the purchase of the site and in site preparation
is 70 percent or more of the assessor's current year's estimated market value;
• General changes in tax increment financing law and other general tax law changes of a
principally technical nature;
• Federal assistance until the assistance has been repaid to, and reinvested by, the state or local
government agency;
• Funds from dock and wharf bonds issued by a seaway port authority;
• Business loans and loan guarantees of $150,000 or less; and
• Federal loan funds provided through the United States Department of Commerce, Economic
Development Administration.
W
0�`
e�
O
W rA
rA
aA
O �
b
0
ai
� U
a
o ,�
+�U Q
U H
O N
cd U
o
o
oRA0
° bA
rA
N P� U ++
o-8
cad
y
Pa �
a�
o�U
b °
b
80
V ddU
O
° o
P,
M.
a
OO
O
p
4,
O
+
O N
x_r
� k sr61
Cry
i
O
$ r
3
O c 0 01
o N r�+
N P
A
4" �°
N
3
o(1) ai�c�
f=ro
aAbw
��
o� A o
��;
\
Ny°
o
o
bay p o
85 1 Q b b
r
rp O a p
Jo O td
a9
b ° ° O
H
O
blJ b bA
y
U bA o O 4o cFd
cUd
bA O '� N
a v
kr+
4~-i O
Ay O .L1
v��{ c� 4,
Q ..7 a O + 'C �O
r -.
v
�` i `i "`1i t
:o 'n'{iA
•
• rr��
ry fi
3r
s,ti� r��a�'i�i
?
y I,TQ1
[Aj FBI
� r
FM
Q%
M.
a
a3
0
0
0
a'bi
a'tii d
.4 404
a
a
o
ioi
O
O
O
N
bA
p
N
tOp>
d
y
O
OU
d
a H
fin' b O
cd N a0 o p
O O N
a wd
co,
b o o
a pao a�
0
o a,
N
bA
O
O N
O 3U 0 Q'
o o
0 O M N
0
o
o a
-J bA
0.111
a
a p
-d rd
.'
O W
Eb
�
"4
o 'd
o —
a o P,
te
1
3,So 'o �U
0
'
q
o .o
o"
6A
o N 4
c A
,� I o p
cad td
.-+ p
.0
- o
O �
c� C•-
p�
d��
U P.o
py' o ZU
b
D O T pp
N id
p O O
N
O
O bA
U bA
N O bA U
pA d
aroi ^d
O
P
o�
o
g.2j a
N
o
cV
o
U
v�
pp
'd U
N
rn is
di • � �+ N .t." �
C�f�fYiA
Hf��
E-�C�V
a3
0
24
Al
_..� . o..
Py g
H
O
0 y
O "VO
Q _d
is
N
+3
FiN
A N
bA O .D
IN
N U
p
��
2y d A
°" is✓
bAO
.�y
bA y
a •0
n,
t
° � 4
g t
ok 42
N O
c� N
Q4
d t� �20
U
0 I
Qbg
a2. o E I S
O O
°
ro
9 = b
�
R7
N
0 p ti
N
Q
U by
4. P" p.
Gi
N
.d
O
.N� O
p
"�
a N CC3 vd H N Cd
O r 3 7
Ap
RA 4 r0
U O a U U O
o° Gd U w 11.) P"
o
0
�
o
��
oft
o
4"
U
�O
a
v�v
O
O
U
m
w
N
•
O 4-*
j.y Pon*
V
VV
�1
O
a�
a�
4°
o 0
U �
O tL
O N rn
4-
O
Cd � I
cd
;> N
N �
C)
� O
O 'O N
4- U
vii N • ��" .��-'
� N
O
4�
0 0
o�
Cd �V)
Cd
p o
41
c
C's
cd
p
p
o
o
O
O
bA
5
�
bb O
ai O
x
4a
p N
p
N 4
O
bn
.�
U N
D�
�]
c
IZ
Ss
U
00
+-
y
^"
�
bA
41 �..� by
N ... 0 O
G�
•�
O
0 U
N
N
O �,
N
N � U s�
aS
4� 3 Wiz'
0 U U
N
+C5 N �� 000 � 4
N p 4-+ O
O> v
d
+�
03 N N
7d O
0
44�
O
p N
N bA
N
O cn -
i'�
Q rtez
N O
p.., + O� N
bo bA
tj
N
N
o a
o a p
o���
o o
o
W -4w
FW
A
S A
U
V S
'rrA
O
H
,
,�(o
ov
ov
�v
.14
o
o
o
� o
o
�
o
O oU
O aU
O
O
. O
U
O
N
fl N
U
p
7)
O
O
O U
Op
.�
fl U
by
O
O
'N N
+s
c6
�" N
p y
+„
En C U p
r.' t cd
Gj
s- N
O+
o
p
s
+'
p
p
o cd
V cl
O O
V O
U
O
� c0
O
cd
O 9b
sU-
N O Ti
s-
��
U O
�. s- bA
n
s, O
4. cd
v� O
by cd
N
O
aJ
p
+-
N
p c-
Q
O ¢
p
O '
3
� ;-, V :y
,
s. s
p �
U O
U �.
9
N U
+- �,0
O UO
� Nom-+ 4-,
4I
C's
N
Cd
k cd 18
U
�t
d
P, O
(D
'QN
C
't7 cd
'
't7
yid
O
tl �
bA
cd
>
mV cd
B
9
o �
+O
O
0
= N
a. ;-4
U
O U
�
cG
.
U O v
i'�
0 O O
Ct
¢"
c)
U N
O
N
N cd
O�
U O
b
N U p
A
7.i
n U O
Q
�
Q U O
T3 �
• N
O n
N
U shy
v� N
t�
O N
bA
bA �
bA
ej
FW A
fW y
fW A
Ha
haA
h
,�(o
Qz
O
w
.y
N
0
w
0
0
U
o�
,u
"N
i
° U 'zi
bA
N
U
O 4 7O N
O p
U
U
vUi
Sti
V O N
C
N
(Qy 2
cd
by m O O
U
k,
N
C) +, N
O
O N N
A O .�
bA
a' cd N
M,
�
cd o �
A 0
bUO U �
N�
O
T3 'd 4
cd
y
Ln cc1A o p n
O
N
C6 V
O
a -d
O -rl+-
ch
Cd
CA
bb bin o q°
'v H
pb�
'CS
+�
o
'
y
o
°
o °
�
o
U
o
tw
a(Q
ono
P.,w
H V
Q, �
Q
4-o O
Qz
O
w
.y
N
0
w
0
0
U
o�
,u
"N
i
Ac
"oo ro co °' bbp y o C
°° d 0 O q ,� d° P bOn
W 0
a' v
�pro�'+� HO a� ' 0 N fir, ro G� C) lu
0umC) 0 aI ("0 oO
°
° o r, cu, u C',
o'a b oauop ro�°�wu
u P, vvat� o N o c6 .,� ,1: cn O O
� �✓ + .W 0 F-! ro q � a Op m d U N V � .O aV bA 0 + � "' -0 0 n cn
+�
A -o u 'd
-0 0
(D p '°�' Cn
bll °ro0� a
O % H o
vi b jbn��uu a A)
0 O d a bn a�'i N N N N q� w
Cv F1 (,V ,, �y bbO n 0 ',,D CIS + d o
u�roa�i�O
O
r, . O s, V l)°
gp 0 0
ow A � 0 . � D N � N � t id
tin
Do
t 't 'O ° 0 cad ° 0.
+� u �+
O {�� 0;j bA W �"r O II � ro N u
.id O ro V ro
aba5 °op•�g0 °� a°boaui v
ou o a°i N u y °� 0 0 0 .a
r O '00 0 O Qi
0 pm ���yyy U ++ 3,
ED .� N `� M- a O c'� vOi a%. +�., cP, p Trot U O 4:1
O y P�'d a� Q ro R 4-+
Cddr;
QJ - •� a N o , � �"�d �u 0
%Ad 0 pH p O , - U ro n o tin ° W �s .m ,o5 o o ' P46 A, — ��
AN (U O cn
o d
p
aj '0 11 Ti bA �
0 � N '0 a 0.— C, 04 u C C�
cnw GA lao
+ C\ a N D R�
r1 a +. a O 4
cq
cn � 0 F7
N �W-7 ac�i yon 0 .° 0 ° � 'b • °� c°1 a— �vro, .� by
N O O N '�-' bqA O F+
O ¢ o + nO
° O
Cd
C'0 ' � u � ;-I'
A
Rc
%Sir
A a4 ra a �° o n CU o C's
tl� .
N bA ro u U M ti ro
° m ro a .° CIS bO
d N ° O v
? yo,
Z. p,
V pcctt O Q � y - .�
v 2
04 a � 0. b o
cad U vNi U d N �, 41
p,Cd
"da;o (1) 14I
O q
y u� 0p,'ro,.��
+� - = 11
s0,�d 0
s0, P bo O 0 a O ,0 n
tin a °� i--
�_. N
Cl
�ro0 ,.,°Ogro
0
u 0'° n° o °a, o
�- d,fn Par" bf9
a0 4�
O td N n O P N ro
V
�Y
r
N W 6 tin M O °
�O 5 a
O ro
0 B ui
Qro id .O q 0�
od �H.no`°45
o
Memo
To: Tom Pepper, City of Eagan
From: Rebecca Kurtz and Mark Ruff, Ehlers
Date: November 18, 2013
Subject: Information Regarding the Mechanics of a Tax Abatement Levy
As a follow -up to the Finance Committee's discussion on November 6, the following provides
additional information regarding the abatement levy.
As previously discussed, many communities use abatement in a way similar to tax increment. so
The property pays its taxes in full; the community receive the taxes generated prior to the
abatement; and, the increase in taxes after development is directed to a specific cost, financed
either by the developer or the community. Under this scenario, the net impact to the community
would be the same as if a tax increment district was established.
However, as stated in the memo dated October 3, 2013, "Abatements are special tax levies. The
amount of the abatement must be added to the total levy for the current year, and must be
included in the proposed levy for Truth in Taxation as well as the certified levy." Tax abatement
is not like tax increment for levy purposes.
With tax increment, the City does not add the TIF payment to the tax levy which is annually
submitted to the County in September. However, with abatement, the abatement payment is
added to the tax levy. When a city is abating only the increase in taxes from a new development,
it does not create an additional burden for the tax payers, or raise the City's tax rate, because the
increase in the value from the development offsets the higher levy.
For example, assume a commercial parcel pays $68,000 in city taxes. After development, let's
further assume the parcel's market value increases substantially so that it pays $668,000 in city
taxes. If only the new taxes are abated by the City, the City would continue to collect the tax
revenue of $68,000. The tax increase of $600,000, due to the development, would be added to
the levy. If a pay -as- you -go note is issued to the development, the payment of $600,000 would
be used make payments on the note.
In the example, if abatement assistance was not provided, the increase in tax revenue would help
reduce the tax levy.
fb :..
`RW GFADERS IN PUBLIC FINANCE
Minnesota
Offices also in Wisuonsin and Illinois
24V
phone 551 -697 -8500
fax 651 - 697 -8555
tall troe 800- 552 -1171
mvwe ler - inc.Com
3060 Centre Pointe Drive
Roseville, MN 55113 1122
While the impact of abating the increase in taxes does not create an additional burden for the tax
payers, it does increase the levy amount. This is the biggest difference between abatement and
TIF. For example, if the newspaper publishes that the City's levy increased by 5 %, the
abatement could be 1 % of the 5 %. Finally, abatement is a special levy, like debt, so it is outside
any levy limits.
Please do not hesitate to contact us if you have additional questions.