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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, LY9 ".- r , - n? 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 0 lw- 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. A, G14 7AAmp latzer@ PFO Occluder 4 i 46R i 22S 1 010 003 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 Other rr a. .rx.r .- ,.yu.-.. ,:fir^ti'_ . •..s" r _ 's _ _ . _ f "# w ter .f„-*• --.r *' ala~ or Ir Ift 4L i 1• k i hp - co A.ferewce Idtche vel 2 c2A C ffLoe 4mowtY Wt.S Proo ra nou.e Accou eeefff e 1 • O O 0 a Additiow 5-8,000 sf Tz-,emooKed 7s,5oo sf AVO UQ Ue -tg,500 sf I St0r A0101Lt%ow -phase I a CLLLtLes R.eL00RtLDw Plymouth Site 2004.021 3.10.04 BVV)13 R. ARCFSITr.LT5 MM'+ A y os a v s Q a a Cs T PA M Q l i F o Q a02 3 C-) Lo J CS 0 Q Cs '\ V cs ' QJ C3 S vi a o a LU 1 0 F - Q a a T M Q CsL N A tA O O O S JJ1 cSJ yiJ L IS S z5 a J a i tl IT t t r T-= C3 I t4 W— C) F - T M Q N A tA O O O S IS z5 a J a C3 t4 W— 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; Pagel of 3 a htto://www.revisor.lei2.state.mn.us/stats/1 16J/993.1itml 5/13/2003 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. Page 2 of 3 http://,A,ww.revisor.le2.state.mn.us/stats/116J/993.html 5/13/2003 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. Page 3 of 3 httn://www.revisor.leL,.state.mn.us/stats/116J/993.html 5/13/2003 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 Page 1 of 6 littn://www.revisor.Ieg.state.mn.u-,/stats/1 16J/994.html 5/13/2003 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 Page 2 of 6 httn://,Aww.revisor.leg.state.mn.us/stats/1 16J/994.html 5/13/2003 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. Page 3 of 6 http://ww-w.revisor.lea.state.mn.us/stats/116J/994.html 5/13/2003 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; Page 4 of 6 http://www.revisor.leg.state.mn.us/stats/1 16J/994.htm] 5/13/2003 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: Page 5 of 6 httn://ww,A,.revisor.IeQ.state.mn.us/stats/116J/994.htm1 5/13/2003 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. Page 6 of 6 httn://www.revisor.leL.state.mn.us/stats/1 16J/994.htm1 5/13/2003 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. Page 1 of 1 httn_Hwww.revisor.Ieg.state. mn.iis/stats/1 166/995.htrnl 5/13/2003 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. The Remainder Of This Page Has Been Intentionally Left Blank]