HomeMy WebLinkAboutCity Council Packet 05-25-2004 SpecialAgenda
City of Plymouth
Special City Council Meeting
Tuesday, May 25, 2004
5:30 p.m.
Public Safety Training Room
3400 Plymouth Blvd.
1. Call to Order
2. Meet with AGA Medical officials concerning plans for
building at 9700 Schmidt Lake Road
3. Discuss State law requirement that the City adopt a business
assistance policy
4. Adj ourn
Agenda Number: Cz
TO: Laurie Ahrens, City Manager
FROM: Anne Hurlburt, Community Development Director
James Barnes, Housing Programs Manager
SUBJECT: MEETING WITH AGA MEDICAL
DATE: May 17, 2004 for the Special City Council Meeting of May 25, 2004
1. ACTION REQUESTED
No action is requested at this time. The Council will be meeting with officials from AGA
Medical concerning their plans for the building at 9700 Schmidt Lake Road, and discuss what
assistance might be available from the City of Plymouth. If, after the meeting, the Council were
interested staff would work with AGA to bring forward a specific proposal.
2. BACKGROUND
AGA Medical Corporation (AGA) recently purchased the former Qwest building at 9700
Schmidt Lake Road. The 180,000 sq. ft. three-story office building sits on about 27 acres at the
northwest quadrant of the Highway 169/Schmidt Lake Rd. interchange. AGA is a medical
device manufacturer currently located in leased space in Golden Valley. The company's major
product is a device used to repair heart defects without the need for open-heart surgery. At the
special meeting, AGA will make a presentation about the company and its products.
This fast-growing company does not have room for expansion at their existing facility in Golden
Valley, and has already begun to remodel a part of the building for office space. They are
considering further remodeling and a possible major addition to the facility to bring all of the
company to the Plymouth location as a single, corporate -headquarters campus. They are
interested in finding out what assistance, if any, might be available from the City of Plymouth.
3. POSSIBLE ASSISTANCE
The primary tool that the City would have to assist AGA is tax abatement. Tax abatement refers
to the capture or deferral of property taxes due. The taxes are still paid, but are applied to the
development purpose. Unlike tax increment, tax abatement can be used to capture taxes on land
and existing buildings as well as new improvements. The captured taxes must be used to offset
the costs agreed to under an abatement agreement. Taxes may be abated by the County, City and
local school district for a period of up to 10-15 years. Each project is different and each taxing
jurisdiction evaluates the benefit to such a request. For this project, the goals do not meet
Hennepin County's Abatement Policy, and it is not likely the school district (Robbinsdale) would
be interested in participating. If only the City abates, then the maximum duration would be 15
years.
The process for tax abatement is much more simple than the process for setting up a tax
increment district. The City must hold a public hearing identifying the property and adopt a
resolution outlining the terms and conditions. The City would then enter into a development
agreement. Once this is completed, there are no additional steps required by the tax abatement
statute.
The City's Assessor currently has the AGA property valued at $5.4 million, which generates a
property tax in the amount of $201,420. The City's portion of this is approximately $44,312
22%). AGA Medical and their consultant have indicated that the potential expansion of the
building would add $10 million to the value. If this occurred the overall tax received on this
property would be approximately $574, 420. The City's portion, and the amount available to
abate, would be around $126,370 per year.
The city would require AGA to comply with the city's business subsidy policy (yet to be
adopted), wage & job goals. The City could place additional requirements on AGA such as a
minimum assessment agreement and provisions that deal with the company moving or being sold
during a certain period of time. All of this would be negotiated with AGA as part of the
development agreement.
Another tool that the City could use to assist AGA is its own Economic Development Loan
Fund. This program was funded from loan repayments from the Value Rx Project and currently
has $150,000 in the fund. The City has not yet issued loans from the fund. The current program
guidelines limit the amount of loans to $50,000. The program guidelines would need to be
changed (and approved by the Minnesota Department of Employee and Economic Development
DEED) in order to exceed that amount.
Staff has considered whether Tax Increment Financing (TIF) would be a possible tool for
assisting this project. It appears that this site would potentially be eligible for an economic
development district. However, staff is not sure this would be the best option due to the higher
costs to setting up this type of district and the more stringent statutory requirements and
monitoring placed on tax increment districts by the State.
4. RECOMMENDATION
Staff recommends that the City Council meeting with officials from AGA Medical concerning
their plans, and give direction to staff for any future assistance to the company that the Council
may wish to consider.
MEDICAL
CO,RPORATION
ALTA Background
Company formed in July 1995
November 1995, move into current premises
Nov 95 -Aug 96: ASD prototype taken to production stage
Sept 96; Launch of International ASD Clinical study
AGA Medical Corporation
Golden Valley 120
Skilled employees
FDA Approvals
Septal Occluder -ASD,
PFO Occluder (TIDE)
Duct Occluder (PDA)
Vascular Plug
Several IDE's
CE Approval on 11
Products
Major Ongoing
Clinical Trials
The
ducts
Amplatzer0 Septal Occluder
The Amplatzer@ Septal Occluder is a percutaneous,
transcatheter, atrial septal defect closure device
designed for the occlusion of atrial septal defects in
secundum position,
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Small delivery
sheath
A Ability to
iecapture &
reposition
Amplatzer@ Septal Occluder
The ASO is a self -expandable, double disc device made
from a Nitinol wire mesh.
The two discs are linked together by a short connecting
waist corresponding to the size of the ASD. In order to
increase its closing ability, the discs and the waist are
filled with polyester patches. The polyester patches are
securely sewn to each disc by a polyester thread.
t F_f: r latz+er@ Septal Occluder
Implantation
vas' `fie-
Endothelialized
Amplatzer0 Septal Occluder
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6 weeks post -implantation A,,G
Estimated Market Size
925-30,000 patients/year
Approximately $60M Worldwide
Advantages over Surgery:
Less invasive; thus shorter recovery time
and no scar
Less expensive
No blood transfusion
Advantages over Competition:
Small delivery system
Ability to close large ASD's (up to 38mm)
More user friendly - easier and shorter
procedure
Completely repositionable/retractable
until released
ALT, I AWAMMrA71
Specifically Designed for the
Non -Surgical Closure of
Patent Ductus Arteriosus
hd FDICA.I_
CORPORATION
AMPLATZER" 10/8 Duct O ccluder
t
Estimated Market Size
Approximately $3M — $10M
Amplatzer@ PFO Occluder
r r
The Amplatzer0 Patent Foramen Ovale Occluder is a
percutaneous, transcatheter occlusion device intended to close
all types of PFO's in patients with a history of stroke or
transient ischemic attacks.
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ASD/PFO Closure using a combination of two
Amplatzer0 devices
t
Estimated Market Size
60K -100K patients/Year (US Only)
168M - $280M. Approximately Double
Worldwide.
Distribution and Sales Channels
Direct Sales in the united States.
Direct Sales in Germany, Switzerland, Austria, Benelux, and
Scandinavia. Technical Consultant based in Germany and
support via the US.
Solid Network of Distributors engaged Globally.
Sales currently contracted in S$ countries.
VSD -ME VSD -MU DEL & OTHER ASD
2.5% 1.5% 11.9% 59.8%
PDA
6.5%
Research And Dcvclopment
Strong
Globally
Working Relationship with Leading Physicians
Leader in Nitinol Braided Devices
Long Standing Partnership with the University of Minnesota
Numerous ongoing development projects
Ac'atit+
Future
PFO (At Stage 11 Clinical in The US)
Membranous VSD (Clinical Beginning in the US)
PLUG (Approved—Launched in May)
Left Atrial Appendage
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Agenda Number: 3
TO: Laurie Ahrens, City Manager
FROM: Jim Barnes, Housing Program Manager, through Anne Hurlburt, Community
Development Director
SUBJECT: State Law Requirement that Plymouth Adopt a Business Subsidy Policy
DATE: May 17, 2004 for the Special City Council Meeting of May 25, 2004
1. PROPOSED ACTION:
Review the attached draft Business Subsidy Policy and direct staff to make any changes
necessary and direct staff to set a public hearing for the adoption of this policy.
2. BACKGROUND:
Minnesota State Statute 116J.993 -116J.995 requires local government agencies to adopt a
policy that regulates business subsidies. "A business subsidy or subsidy means a state or
local government agency grant, contribution of real property, personal property,
infrastructure, the principle 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. " The Statute does provide a number of exclusions to this definition
including: subsidies less than $25,000; redevelopment of polluted property; assistance for
housing; and funds from bonds allocated under chapter 474A (i.e. Industrial Development
Revenue Bonds). Attached is the Statute, which provides the complete list of exclusions.
Until now, the City of Plymouth has not needed this policy because we have not provided any
subsidy to a business that is required under the above mentioned statute. In 1996, as part of
the Department of Trade and Economic Development's loan to Value Rx, the City received
100,000 to use as seed money for an economic development revolving loan program. The
Plymouth Economic Development Fund has seen no activity until recently. In the past couple
of months staff has received requests from a couple of businesses that are interested in
locating in Plymouth and would like to utilize our program if possible. Staff has also had
discussions with developers for commercial projects about the possibility of using the tax
abatement laws, which would be considered a business subsidy in some cases. The Plymouth
Housing and Redevelopment Authority discussed this policy at their July 2003 regular
meeting and adopted a resolution approving the policy with no modifications.
3. DISCUSSION:
The business subsidy statute requires that a local unit of government establish a set of criteria
that will be used in awarding business subsidies. The criteria must set specific minimum
requirements that all recipients must meet in order to be considered to receive a business
subsidy.
The criteria must include specific wage and job goals. For the wage goals, the City may
establish a floor (minimum wage) by using a formula that will generate a specific amount or
it can simply be a specific dollar amount. Staff has researched what other cities are using and
has attached a list of the wage floors used by a number of communities. As is indicated by
the attached list, there are different ways for a community to determine wage goals. Some
communities index their wage floors by using a percent of their median income or a certain
percent of the federal minimum wage, while others simple provide a certain wage rate.
After reviewing policies in other communities and evaluating the current and prospective
business market in Plymouth, staff recommends the City of Plymouth should set as its wage
floor 200% of the federal minimum wage. The federal minimum wage currently is $5.15 and
200% would be $10.30. The reason for this is that many of the new businesses being started
are in the retail sector, which typically has a lower wage scale for their employees than those
in the manufacturing industry. The business subsidy law does allow for a city to deviate from
the wage and job goals provided they document the reason for the deviation and provide the
information in their next annual report.
4. BUDGET IMPACT:
By establishing a Business Subsidy policy, the City is not committing any financial resources
to a business or any program to assist businesses. There is a possibility of future impacts on
the City's budget; however, it is unknown what the impact would be. Each request would be
unique and the City will consider numerous aspects of the proposed project in addition to any
subsidy request.
5. RECOMMENDATION:
Review the attached draft Business Subsidy Policy and direct staff to make any changes
necessary and direct staff to set a public hearing for the adoption of this policy.
ATTACHMENTS:
1. Minnesota Statutes 116J.993—116J.995
2. Wage Floor Survey
3. Draft Plymouth Business Subsidy Policy
Minnesota Statutes 2002, 116J.993
Minnesota Statutes 2002, Table of Chapters
Table of contents for Chapter 116J
116J.993 Definitions.
Subdivision 1. Scope. For the purposes of sections
116J.993 to 116J.995, the terms defined in this section have the
meanings given them.
Subd. 2. Benefit date. "Benefit date" means the date
that the recipient receives the business subsidy. If the
business subsidy involves the purchase, lease, or donation of
physical equipment, then the benefit date begins when the
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:
1) when the improvements are finished for the entire
project; or
2) when a business occupies the property. If a business
occupies the property and the subsidy grantor expects that other
businesses will also occupy the same property, the grantor may
assign a separate benefit date for each business when it first
occupies the property.
Subd. 3. Business subsidy. "Business subsidy" or
subsidy" means 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.
The following forms of financial assistance are not a
business subsidy:
1) a business subsidy of less than $25,000;
2) 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;
3) 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;
4) redevelopment property polluted by contaminants as
defined in section 116J.552, subdivision 3;
5) 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 percent of the total cost;
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Minnesota Statutes 2002, 116J.993
6) assistance to provide job readiness and training
services if the sole purpose of the assistance is to provide
those services;
7) assistance for housing;
8) assistance for pollution control or abatement,
including assistance for a tax increment financing hazardous
substance subdistrict as defined under section 469.174,
subdivision 23;
9) assistance for energy conservation;
10) tax reductions resulting from conformity with federal
tax law;
11) workers' compensation and unemployment compensation;
12) benefits derived from regulation;
13) indirect benefits derived from assistance to
educational institutions;
14) 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;
15) assistance for a collaboration between a Minnesota
higher education institution and a business;
16) assistance for a tax increment financing soils
condition district as defined under section 469.174, subdivision
19;
17) 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;
18) general changes in tax increment financing law and
other general tax law changes of a principally technical nature;
19) federal assistance until the assistance has been
repaid to, and reinvested by, the state or local government
agency;.
20) funds from dock and wharf bonds issued by a seaway
port authority;
21) business loans and loan guarantees of $75,000 or less;
and
22) federal loan funds provided through the United States
Department of Commerce, Economic Development Administration.
Subd. 4. Grantor. "Grantor" means any state or local
government agency with the authority to grant a business subsidy.
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Minnesota Statutes 2002, 116J.993
Subd. 5. Local government agency. "Local government
agency" includes a statutory or home rule charter city, housing
and redevelopment authority, town, county, port authority,
economic development authority, community development agency,
nonprofit entity created by a local government agency, or any
other entity created by or authorized by a local government with
authority to provide business subsidies.
Subd. 6. Recipient. "Recipient" means any for-profit
or nonprofit business entity that receives a business subsidy.
Only nonprofit entities with at least 100 full-time equivalent
positions and with a ratio of highest to lowest paid employee,
that exceeds ten to one, determined on the basis of full-time
equivalent positions, are included in this definition.
Subd. 7. State government agency. "State government
agency" means any state agency that has the authority to award
business subsidies.
HIST: 1999 c 243 art 12 s 1; 2000 c 482 s 1
Copyright 2002 by the Office of Revisor of Statutes, State of Minnesota.
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Minnesota Statutes 2002, 1161994
Minnesota Statutes 2002, Table of Chapters
Table of contents for Chapter 116J
116J.994 Regulating local and state business subsidies.
Subdivision 1. Public purpose. A business subsidy
must meet a public purpose which may include, but may not be
limited to, increasing the tax base. Job retention may only be
used as a public purpose in cases where job loss is specific and
demonstrable.
Subd. 2. Developing a set of criteria. A business
subsidy may not be granted until the grantor has adopted
criteria after a public hearing for awarding business subsidies
that comply with this section. The criteria may not be adopted
on a case-by-case basis. The criteria must set specific minimum
requirements that recipients must meet in order to be eligible
to receive business subsidies. The criteria must include a
specific wage floor for the wages to be paid for the jobs
created. The wage floor may be stated as a specific dollar
amount or may be stated as a formula that will generate a
specific dollar amount. A grantor may 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. The commissioner of trade and economic
development may assist local government agencies in developing
criteria. A copy of the criteria must be submitted to the
department of trade and economic development along with the
first annual report following the enactment of this section or
with the first annual report after it has adopted criteria,
whichever is earlier.
Subd. 3. Subsidy agreement. (a) A recipient must
enter into a subsidy agreement with the grantor of the subsidy
that includes:
1) a description of the subsidy, including the amount and
type of subsidy, and type of district if the subsidy is tax
increment financing;
2) a statement of the public purposes for the subsidy;
3) measurable, specific, and tangible goals for the
subsidy;
4) a description of the financial obligation of the
recipient if the goals are not met;
5) a statement of why the subsidy is needed;
6) a commitment to continue operations in the jurisdiction
where the subsidy is used for at least five years after the
benefit date;
7) the name and address of the parent corporation of the
recipient, if any; and
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Minnesota Statutes 2002, 116J.994
8) a list of all financial assistance by all grantors for
the project.
b) Business subsidies in the form of grants must be
structured as forgivable loans. For other types of business
subsidies, the agreement must state the fair market value of the
subsidy to the recipient, including the value of conveying
property at less than a fair market price, or other in-kind
benefits to the recipient.
c) If a business subsidy benefits more than one recipient,
the grantor must assign a proportion of the business subsidy to
each recipient that signs a subsidy agreement. The proportion
assessed to each recipient must reflect a reasonable estimate of
the recipient's share of the total benefits of the project.
d) The state or local government agency and the recipient
must both sign the subsidy agreement and, if the grantor is a
local government agency, the agreement must be approved by the
local elected governing body, except for the St. Paul Port
Authority and a seaway port authority.
e) Notwithstanding the provision in paragraph (a), clause
6), a recipient may be authorized to move from the jurisdiction
where the subsidy is used within the five-year period after the
benefit date if, after a public hearing, the grantor approves
the recipient's request to move. For the purpose of this
paragraph, if the grantor is a state government agency other
than the iron range resources and rehabilitation board,
jurisdiction" means a city or township.
Subd. 4. Wage and job goals. The subsidy agreement,
in addition to any other goals, must include: (1) goals for the
number of jobs created, which may include separate goals for the
number of part-time or full-time jobs, or, in cases where job
loss is specific and demonstrable, goals for the number of jobs
retained; and (2) wage goals for the jobs created or retained.
After a public hearing, if the creation or retention of jobs is
determined not to be a goal, the wage and job goals may be set
at zero.
In addition to other specific goal time frames, the wage
and job goals must contain specific goals to be attained within
two years of the benefit date.
Subd. 5. Public notice and hearing. (a) Before
granting a business subsidy that exceeds $500,000 for a state
government grantor and $100,000 for a local government grantor,
the grantor must provide public notice and a hearing on the
subsidy. A public hearing and notice under this subdivision is
not required if a hearing and notice on the subsidy is otherwise
required by law.
b) Public notice of a proposed business subsidy under this
subdivision by a state government grantor, other than the iron
range resources and rehabilitation board, must be published in
the State Register. Public notice of a proposed business
subsidy under this subdivision by a local government grantor or
the iron range resources and rehabilitation board must be
published in a local newspaper of general circulation. The
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Minnesota Statutes 2002, 116J.994
public notice must identify the location at which information
about the business subsidy, including a summary of the terms of
the subsidy, is available. Published notice should be
sufficiently conspicuous in size and placement to distinguish
the notice from the surrounding text. The grantor must make the
information available in printed paper copies and, if possible,
on the Internet. The government agency must provide at least a
ten-day notice for the public hearing.
c) The public notice must include the date, time, and
place of the hearing.
d) The public hearing by a state government grantor other
than the iron range resources and rehabilitation board must be
held in St. Paul.
e) If more than one nonstate grantor provides a business
subsidy to the same recipient, the nonstate grantors may
designate one nonstate grantor to hold a single public hearing
regarding the business subsidies provided by all nonstate
grantors. For the purposes of this paragraph, "nonstate
grantor" includes the iron range resources and rehabilitation
board.
Subd. 6. Failure to meet goals. The subsidy
agreement must specify the recipient's obligation if the
recipient does not fulfill the agreement. At a minimum, the
agreement must require a recipient failing to meet subsidy
agreement goals to pay back the assistance plus interest to the
grantor or, at the grantor's option, to the account created
under section 116J.551 provided that repayment may be prorated
to reflect partial fulfillment of goals. The interest rate must
be set at no less than the implicit price deflator for
government consumption expenditures and gross investment for
state and local governments prepared by the bureau of economic
analysis of the United States Department of Commerce for the
12 -month period ending March 31 of the previous year. The
grantor, after a public hearing, may extend for up to one year
the period for meeting the wage and job goals under subdivision
4 provided in a subsidy agreement. A grantor may extend the
period for meeting other goals under subdivision 3, paragraph
a), clause (3), by documenting in writing the reason for the
extension and attaching a copy of the document to its next
annual report to the department.
A recipient that fails to meet the terms of a subsidy
agreement may not receive a business subsidy from any grantor
for a period of five years from the date of failure or until a
recipient satisfies its repayment obligation under this
subdivision, whichever occurs first.
Before a grantor signs a business subsidy agreement, the
grantor must check with the compilation and summary report
required by this section to determine if the recipient is
eligible to receive a business subsidy.
Subd. 7. Reports by recipients to grantors. (a) A
business subsidy grantor must monitor the progress by the
recipient in achieving agreement goals.
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Minnesota Statutes 2002, 116J.994
b) A recipient must provide information regarding goals
and results for two years after the benefit date or until the
goals are met, whichever is later. If the goals are not met,
the recipient must continue to provide information on the
subsidy until the subsidy is repaid. The information must be
filed on forms developed by the commissioner in cooperation with
representatives of local government. Copies of the completed
forms must be sent to the local government agency that provided
the subsidy or to the commissioner if the grantor is a state
agency. If the iron range resources and rehabilitation board is
the grantor, the copies must be sent to the board. The report
must include:
1) the type, public purpose, and amount of subsidies and
type of district, if the subsidy is tax increment financing;
2) the hourly wage of each job created with separate bands
of wages;
3) the sum of the hourly wages and cost of health
insurance provided by the employer with separate bands of wages;
4) the date the job and wage goals will be reached;
5) a statement of goals identified in the subsidy
agreement and an update on achievement of those goals;
6) the location of the recipient prior to receiving the
business subsidy;
7) why the recipient did not complete the project outlined
in the subsidy agreement at their previous location, if the
recipient was previously located at another site in Minnesota;
8) the name and address of the parent corporation of the
recipient, if any;
9) a list of all financial assistance by all grantors for
the project; and
10) other information the commissioner may request.
A report must be filed no later than March 1 of each year for
the previous year. The local agency and the iron range
resources and rehabilitation board must forward copies of the
reports received by recipients to the commissioner by April 1.
c) Financial assistance that is excluded from the
definition of "business subsidy" by section 116J.993,
subdivision 3, clauses (4), (5), (8), and (16), is subject to
the reporting requirements of this subdivision, except that the
report of the recipient must include instead:
1) the type, public purpose, and amount of the financial
assistance, and type of district if the assistance is tax
increment financing;
2) progress towards meeting goals stated in the assistance
agreement and the public purpose of the assistance;
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Minnesota Statutes 2002, 1161994
3) if the agreement includes job creation, the hourly wage
of each job created with separate bands of wages;
4) if the agreement includes job creation, the sum of the
hourly wages and cost of health insurance provided by the
employer with separate bands of wages;
5) the location of the recipient prior to receiving the
assistance; and
6) other information the grantor requests.
d) If the recipient does not submit its report, the local
government agency must mail the recipient a warning within one
week of the required filing date. If, after 14 days of the
postmarked date of the warning, the recipient fails to provide a
report, the recipient must pay to the grantor a penalty of $100
for each subsequent day until the report is filed. The maximum
penalty shall not exceed $1,000.
Subd. B. Reports by grantors. (a) Local government
agencies of a local government with a population of more than
2,500 and state government agencies, regardless of whether or
not they have awarded any business subsidies, must file a report
by April 1 of each year with the commissioner. Local government
agencies of a local government with a population of 2,500 or
less are exempt from filing this report if they have not awarded
a business subsidy in the past five years. The report must
include a list of recipients that did not complete the recipient
report required under subdivision 7 and a list of recipients
that have not met their job and wage goals within two years and
the steps being taken to bring them into compliance or to recoup
the subsidy.
If the commissioner has not received the report by April 1
from an entity required to report, the commissioner shall issue
a warning to the government agency. If the commissioner has
still not received the report by June 1 of that same year from
an entity required to report, then that government agency may
not award any business subsidies until the report has been filed.
b) The commissioner of trade and economic development must
provide information on reporting requirements to state and local
government agencies.
Subd. 9. Compilation and summary report. The
department of trade and economic development must publish a
compilation and summary of the results of the reports for the
previous calendar year by August 1 of each year. The reports of
the government agencies to the department and the compilation
and summary report of the department must be made available to
the public.
The commissioner must coordinate the production of reports
so that useful comparisons across time periods and across
grantors can be made. The commissioner may add other
information to the report as the commissioner deems necessary to
evaluate business subsidies. Among the information in the
summary and compilation report, the commissioner must include:
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Minnesota Statutes 2002, 116J.994
1) total amount of subsidies awarded in each development
region of the state;
2) distribution of business subsidy amounts by size of the
business subsidy;
3) distribution of business subsidy amounts by time
category;
4) distribution of subsidies by type and by public
purpose;
5) percent of all business subsidies that reached their
goals;
6) percent of business subsidies that did not reach their
goals by two years from the benefit date;
7) total dollar amount of business subsidies that did not
meet their goals after two years from the benefit date;
8) percent of subsidies that did not meet their goals and
that did not receive repayment;
9) list of recipients that have failed to meet the terms
of a subsidy agreement in the past five years and have not
satisfied their repayment obligations;
10) number of part-time and full-time jobs within separate
bands of wages; and
11) benefits paid within separate bands of wages.
Subd. 10. Compilation. The department of trade and
economic development must publish a compilation of granting
agencies' criteria policies adopted in the previous calendar
year by August 1 of each year.
HIST: 1999 c 243 art 12 s 2; 2000 c 482 s 2-11; 2001 c 7 s 28
Copyright 2002 by the Office of Revisor of Statutes, State of Minnesota.
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Minnesota Statutes 2002, 116J.995
Minnesota Statutes 2002, Table of Chapters
Table of contents for Chapter 116J
116J.995 Economic grants.
An appropriation rider in an appropriation to the
department of trade and economic development that specifies that
the appropriation be granted to a particular business or class
of businesses must contain a statement of the expected benefits
associated with the grant. At a minimum, the statement must
include goals for the number of jobs created, wages paid, and
the tax revenue increases due to the grant. The wage and job
goals must contain specific goals to be attained within two
years of the benefit date. The statement must specify the
recipient's obligation if the recipient does not attain the
goals. At a minimum, the statement must require a recipient
failing to meet the job and wage goals to pay back the
assistance plus interest to the department of trade and economic
development provided that repayment may be prorated to reflect
partial fulfillment of goals. The interest rate must be set at
no less than the implicit price deflator as defined under
section 116J.994, subdivision 6. The legislature, after a
public hearing, may extend for up to one year the period for
meeting the goals provided in the statement.
HIST: 1999 c 243 art 12 s 3; 2000 c 482 s 12; 2001 c 7 s 29
Copyright 2002 by the Office of Revisor of Statutes, State of Minnesota.
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Business Subsidy Policy
Wage Floor Survey
Burnsville Federal Minimum Wage* (under consideration)
Dakota County CDA 150% of the Federal Minimum Wage*
City of Elk River $15.00
City of Northfield $10.28 (60% of Median Wage in Rice County)
City of Big Lake $12.00 (at least 50% of jobs) & $9.65 (for remaining 50%)
City of St. Cloud $12.80
City of Eden Prairie Case-by-case basis
The current federal minimum wage is $5.15
CITY OF PLYMOUTH
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR
THE CITY OF PLYMOUTH, MINNESOTA
BUSINESS SUBSIDY POLICY
This Policy is adopted for purposes of the Business Subsidies Act (the "Act"), Minnesota Statues,
Sections 116J.993 through 116J.995. Terms used in this Policy are intended to have the same meanings
as if used in the Act, and this Policy shall apply only with respect to "subsidies" as defined by the Act if
and to the extend required thereby.
The City of Plymouth and the Housing and Redevelopment Authority in and for the City of Plymouth,
Minnesota (HRA) maintain policy documents, which speak to the general goals and objectives for the
provision of public assistance for private development or redevelopment activities. These documents
include, but are not limited to the current City Comprehensive Plan and the HRA's Strategic Plan.
While it is recognized that the creation of good paying jobs is a desirable goal, which benefits the
community, it must also be recognized that not all projects assisted with subsidies derive their public
purposes and importance solely by virtue of job creation. Worthwhile projects may provide value to the
community in the forms of infrastructure improvements, stabilization of business districts or
neighborhoods, or enhancement of economic diversity. In addition, the imposition of high job creation
requirements and high wage levels may be unrealistic and counter-productive in the face of larger
economic forces and the financial and competitive circumstances of an individual business.
With respect to subsidies, the determination of the number of jobs to be created and the wage levels
thereof shall be guided by the following principles and criteria:
1. Whether the project is consistent with the City's Comprehensive Plan, the
HRA Strategic Plan or otherwise is compatible with, or complementary to, the
City's development plans and objectives.
2. Whether the project will remove, prevent or reduce blight, utilize
underdeveloped properties, or otherwise protect or enhance property values
and the tax base.
3. Whether the use of a subsidy is necessary for the project or will result in
enhancements or improvements to the proposed project.
4. Whether the project will use public infrastructure contemplated for the project
or will facilitate the construction of public infrastructure identified as
necessary or beneficial for other properties as determined by the City Council.
5. Whether the project will prevent specific and demonstrable loss of jobs.
6. Whether the project will create new jobs, whether the jobs to be created pay
wages at a level beneficial to the community (jobs created must be generally
in excess of 200% of the current federal minimum wage), whether there are
broader public benefits related to the proposed business such as, but not
limited to, the hiring of a diversified work force, the provision of particular
employee or family benefits, or the hiring of city residents.
7. Whether the project will provide necessary or essential housing or other
community benefits, enhance economic or social diversity, stabilize the
community, affect existing businesses or properties, or otherwise have
demonstrable public benefits.
Whether the Project will significantly and adversely increase existing service
needs in the City.
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