HomeMy WebLinkAboutHRA Item 03September 3, 2015 Item No.
RESOLUTION TO SUBMIT SUPPLEMENTAL MINNESOTA INVESTMENT FUND
APPLICATION ON BEHALF OF SSB MANUFACTURING COMPANY
September S, 2015 HRA Meeting
Proposed Action
Staff recommends adoption of the following motion: Move to approve Resolution Authorizing An
Application To The Department Of Employment And Economic Development For Minnesota
Investment Fund On Behalf of SSB Manufacturing Company.
Passage of this motion will result in the submittal of a Minnesota Investment Fund Application (MIF)
on behalf of SSB Manufacturing Company to the Minnesota Department of Employment and
Economic Development (DEED).
Overview
SSB Manufacturing Company is a mattress manufacturer and is considering construction of a
240,000 square foot manufacturing facility in the Interstate South Logistics Park located in the
southwest corner of County Road 70 and Dodd Blvd. The company plans to create 200 new jobs
over the next two years with an average starting salary of $36,100 ($17.35 per hour) excluding
benefits.
The Minnesota Investment Fund (MIF) provides financing to help add new workers and retain high-
quality jobs on a statewide basis. Funds are awarded to local units of government who provide
loans to assist expanding businesses. At least 50 percent of total project costs must be privately
financed through owner equity or other lending sources.
DEED has tentatively committed to $1,000,000 for this project. Staff recommends approval of this
Minnesota Investment Fund Application on behalf of SSB Manufacturing Company.
Supporting Information
• Resolution Authorizing Application
• Minnesota Investment Fund Supplemental Application
David L. Olson, Community & Economic Development Director
Financial Impact: $ 1,000,000 Budgeted: Y/N N Source: DEED
Related Documents (CIP, ERP, etc.):
Envision Lakeville Community Values: Diversified Economic Development
CITY OF LAKEVILLE HOUSING AND REDEVELOPMENT AUTHORITY
DAKOTA COUNTY, MINNESOTA
RESOLUTION NO.
RESOLUTION AUTHORIZING AN APPLICATION TO THE DEPARTMENT OF EMPLOYMENT
AND ECONOMIC DEVELOPMENT FOR MINNESTOA INVESTMENT FUND ON BEHALF OF
SSB MANUFACTURING COMPANY.
BE IT RESOLVED that the City of Lakeville Housing and Redevelopment Authority (HRA) act as the
legal sponsor for project(s) contained in the Business and Community Development Application to be
submitted on September 9, 2015 and that the Chair and Secretary are hereby authorized to apply to the
Department of Employment and Economic Development for funding of this project on behalf of City of
Lakeville.
BE IT FURTHER RESOLVED that the City of Lakeville HRA has the legal authority to apply for
financial assistance, and the institutional, managerial, and financial capability to ensure adequate
construction, operation, maintenance and replacement of the proposed project for its design life.
BE IT FURTHER RESOLVED that the City of Lakeville HRA has not incurred any costs and has not
entered into any written agreements to purchase property.
BE IT FURTHER RESOLVED that the City of Lakeville HRA has not violated any Federal, State, or local
laws pertaining to fraud, bribery, kickbacks, collusion, conflict of interest or other unlawful or corrupt
practice.
BE IT FURTHER RESOLVED that upon approval of its application by the state, the City of Lakeville
HRA may enter into an agreement with the State of Minnesota for the above -referenced project, and that
the City of Lakeville HRA certifies that it will comply with all applicable laws and regulations as stated in
all contract agreements and described on the Compliance Section (S-7) of the Business and Community
Development Application.
AS APPLICABLE, BE IT FURTHER RESOLVED that the City of Lakeville HRA has obtained credit
reports and credit information for SSB Manufacturing Company. Upon review by The City of Lakeville
HRA, no adverse findings or concerns regarding, but not limited to, tax liens, judgments, court actions,
and filings with state, federal and other regulatory agencies were identified. Failure to disclose any such
adverse information could result in revocation or other legal action.
NOW, THEREFORE BE IT RESOLVED that the Chair and Secretary, or their successors in office, are
hereby authorized to execute such agreements and amendments thereto, as are necessary to implement
the project(s) on behalf of the applicant.
Dated this 8' day of September, 2015.
CITY OF LAKEVILLE
Douglas P. Anderson, Chair
ATTEST:
Bart Davis, Secretary
POSITIVELY
Depar fent of Employment and Economic Development
Applicant:
City of Lakeville HRA
State Legislative District for Project Area:
Application Author: David Olson
SUPPLEMENTAL APPLICANT INFORMATION
(LOCAL UNIT OF GOVERNMENT)
MINNESOTA INVESTMENT FUND
STATE LOAN PROGRAM
Business Name: SSB Manufacturing Company
58A DUNS #: 03-820-4020
Author's E-mail: dolson@lakevillemn.gov
Author's Phone: 952-985-4421
Attach the following information with the application. Application is not considered complete until all
documents have been received.
1) COMMUNITY NEEDS NARRATIVE
• Attach a community and economic development needs narrative which identifies in detail the priorities and
strategies for resolving these needs based on the following criteria:
A. Economic vulnerability of the community:
B. Events contributing to a depressed economy:
C. Unemployment (long term, chronic, current, seasonal):
D. Need to attract or retain essential services:
E. Events contributing to a unique situation:
F. Infrastructure conditions:
G. Out -migration due to lack of jobs:
H. Need to diversify industrial base:
I. Project will support the economic viability of small, minority, or women -owned businesses:
J. Under -employment of existing labor pool:
K. Labor pool needs:
L. An increase in the value of the parcel(s) of land that will be directly assisted by the project. Provide a letter from
the county/city assessor that provides the following information: Current assessed valuation, current real estate
taxes payable, projected assessed valuation and projected real estate taxes payable
2) CITIZEN PARTICIPATION
A public hearing is required to provide citizen notification and involvement prior to submitting the application.
Submit a copy of the public hearing minutes, a copy of the public notice and affidavit of publication, and the
Local Government Resolution.
3) BUSINESS CREDIT CHECK
0 The following information searches on the business and owners holding 10 percent or more of the business must
be acquired and reviewed prior to passing the Local Government Resolution: Lien/Judgment, Criminal Record,
Pending Lawsuit, Dunn and Bradstreet, Credit Status Report, Bankruptcy (Also attach summary of findings and
deposition).
11282012
POSITIVELY
"00004t+V .
Department Of Employment and Economic Development
4) PROJECT COMPLIANCE
SUPPLEMENTAL APPLICANT INFORMATION
(LOCAL UNIT OF GOVERNMENT)
MINNESOTA INVESTMENT FUND
STATE LOAN PROGRAM
Review and sign attached document titled Project Compliance with State Laws, Statues, and Rules which outlines
various state laws, statutes and rules that must be adhered to while implementing this project. These same
requirements must be used in the administration of the local Revolving Loan Funds.
5) REVOLVING LOAN FUND
i Submit a copy of the Local Government's Revolving Loan Fund policies and procedures.
6) CHECKLIST OF REQUIRED DOCUMENTATION:
❑■ Completed Application (Applicant and Business)
■0 Notice of job listing agreement
❑■ Revolving loan fund guidelines
❑■ Public hearing minutes
❑■ Affidavit of publication
0■ Local unit of Government Resolution
Q Project Compliance with State Laws, Statutes, and Rules
If an award is provided for the project, the information contained in the application will become a matter of
public record with the exception of those items protected under the Minnesota Government Data Practices
Act found in Minnesota Statutes 1997, Chapter 13.
I have read the above statement and I agree to supply the information requested to the Minnesota
Department of Employment and Economic Development, Division of Business and Community Development
with full knowledge of the information provided herein. I certify the information contained herein is true and
accurate.
David Olson, Community and Economic Development Director
Typed Name/Title
Signature of Local Government Official
Date
POSITIVELY
Department Of Employment and Economic Development
SUPPLEMENTAL APPLICANT INFORMATION
(LOCAL UNIT OF GOVERNMENT)
MINNESOTA INVESTMENT FUND
STATE LOAN PROGRAM
PROJECT COMPLIANCE WITH STATE LAWS, STATUTES, AND RULES
1. Minnesota Statutes, Section 181.59, discrimination on account of race, creed, or color prohibited in
contracts. .
2. Minnesota Statutes, Section 363A.08 prohibits unfair discrimination practices related to employment
or unfair employment practices.
3. Minnesota Statutes Chapter 363 Minnesota Human Rights Act. Requires that all public services be
operated in such a manner that does not discriminate against any person in the access to, admission
to, full utilization of or benefit from such public service.
4. Minnesota Statutes, Sections 176.181-176.182. Requires recipients and subcontractors to have
worker's compensation insurance coverage.
5. Minnesota Statutes, Sections 290.9705. Requires that 8 percent of payments made to out-of-state
contractors be withheld once cumulative payments made to the contractor for work done in
Minnesota exceed $50,000 in a calendar year, unless a waiver is granted by the Department of
Revenue.
6. Minnesota Statutes, Section 116J.871 applies to this project. This statute requires of recipients of
state assistance to pay the prevailing wage rate to laborers and mechanics at the project construction
site when state funds are provided for construction in the amount of $200,000 or more.
7. Minnesota Statutes Sections 471.87 and 471.88 - Forbids public officials from engaging in activities
which are, or have the appearance of being, in conflict of interest.
8. Antitrust or unfair trade practices laws - Regulates and controls the sale of goods and services and
prohibits deceptive and unfair competition between businesses.
9. Minnesota Statutes 1161.993-995, Business Subsidy Statute, applies to this project.
10. Minnesota Statutes, 116J.8731, Minnesota Investment Fund applies to this project.
11. Minnesota Investment Fund Rules Chapter 4300.
12. Minnesota Statutes, Chapter 13, the Minnesota Government Data Practices Act.
certifies compliance as so stated in the accompanying Local Government Resolution.
(Signature of Applicant)
9
Project Shore MIF Application
Part B — Community Needs
1. Economic vulnerability of the community (Examples: need to diversify industrial base,
underemployment of labor pool, labor pool needs).
Lakeville, Minnesota's unemployment rate is 4.2%, and 21.7% of its population is out of the labor force
altogether. Six and a half percent (6.5%) of families with children in Lakeville have a household income
that falls below the poverty threshold.
Lakeville's percentage of jobs in manufacturing (11.9%) is just below the metro average (13.5%). One out
of ten of the city's working residents has an occupation in production, which also lags the metro -wide
average (11.2%). Retaining and growing Lakeville's manufacturing employment cluster is essential for
supporting many of its residents and daily workers.
Lakeville's population is highly educated, with 96.3% of its population holding at least a high school
diploma, and 44.3% being college graduates. Manufacturing occupations are well -paying opportunities for
those with less than a college education and well-suited for a community like Lakeville where the majority
of residents have a H.S. diploma but not a Bachelor's degree.
2. Events contributing to a unique situation (Examples: recent loss of large employer, labor pool
dependent upon one sector or industry, seasonality of employment, natural disaster).
In 2015 YTD, over3,100 workers in the Minneapolis Saint Paul metro were laid off, according to DEED'S
Dislocated Worker Program. Many of these dislocated workers are coming from life science facilities and
back office operations.
Target Corp. conducted another round of layoffs on Wednesday, June 17, this time eliminating 140 metro -
area headquarters employees. Target said the layoffs are part of the company's $2 billion restructuring
plan announced in February. The Minneapolis-based retailer, Minnesota's fifth-largest employer, has now
cut 2,360 jobs in the U.S. The largest U.S. cuts came in March, when Target laid off 1,700 headquarters
workers and eliminated another 1,400 open positions. Target is likely to lay off more employees following
the $1.913 sale of its pharmacy and retail clinic business to CVS Health later this year.
3. Out migration due to lack of jobs (provide data showing a recent population decline due to
lack of employment).
Of those who currently live in Lakeville, 88% work outside of their home city. On a daily basis, 73% of
Lakeville's working population commutes from other parts of the metro for their jobs. That is over 9,200
people who work in Lakeville but live and pay property taxes elsewhere.
New jobs in Lakeville will positively affect surrounding communities, opening employment opportunities
to those seeking a short commute. The majority of people with primary jobs in Lakeville (58%) travel less
than 10 miles to their jobs.
4. Project will support the economic viability of underserved businesses (e.g. veteran, minority,
disabled, or women owned).
The project is anticipated to provide additional employment opportunities to the Lakeville and
surrounding communities.
S. Tax Base: An increase in the value of the parcel(s) of land that will be directly assisted by the
project (Provide a letter from the county/city assessor).
LAKEVILLE - SUPPLEMENTAL APPLICANT INFORMATION
f nIA►IIul11NITV NEEDS nlnWATIVE
Lakeville, Minnesota's unemployment rate is 4.2%, and 21.7% of its population is out of the labor force altogether. Six and a half percent (6.5%)
of families with children in Lakeville have a household income that falls below the poverty threshold.
LakeviIle's percentage of jobs in manufacturing (11.9%) is just below the metro average (13.5%). One out often of the city's working residents
has an occupation in production, which also lags the metro -wide average (11.2%). Retaining and growing Lakeville's manufacturing
employment cluster is essential for supporting many of its residents and daily workers.
EMPLOYMENT BY INDUSTRY, 2013
INDUSTRY
Lakeville,
Estimate
Lakeville, %
Greater MSP, %
Difference
Civilian employed population 16 years and over
30,513
1,777,911
Agriculture, forestry, fishing and hunting, and mining
220
0.7%
0.9%
-0.2%
Construction
1,344
4.4%
4.9%
-0.5%
Manufacturing
3,643
11.9%
13.5%
-1.6%
Wholesale trade
983
3.2%
3.1%
0.1%
Retail trade
3,575
11.7%
11.5%
0.2%
Transportation and warehousing, and utilities
2,007
6.6%
4.5%
2.1%
Information
735
2.4%
2.1%
0,3%
Finance and insurance, and real estate and rental and leasing
3,392
11.1%
8.7%
4�
Professional, scientific, and management, and administrative
and waste management services
3,474
11.4%
11.9%
-0.5%
Educational services, and health care and social assistance
6,135
20.1%
23.1%
Arts, entertainment, and recreation, and accommodation and
food services
2,240
7.3%8.2/
°
49%
Other services, except public administration
1,572
5.2%
4.5%
0.7%
Public administration
1,193
3.9%
3.3%
0.6%
EMPLOYMENT BY OCCUPATION, 2013
OCCUPATION
Lakeville,
Estimate
Lakeville, %
Greater MSP, %
Difference
Civilian employed population 16 years and over
30,513
1,777,911
Management, business, science, and arts occupations
13,591
44.5%
42.29'°
Service occupations
4,098
13.4%
15.6%
-2.2%
Sales and office occupations
8,063
26.4%
24.6%
1.8%
Natural resources, construction, and maintenance occupations
1,726
5.7%
6.6%
-0.9%
Production, transportation, and material moving occupations
3,035
9.9%
11.2%
-1.3%
Source: U.S. Census Bureau, 2013 American Community Survey 5 -Year Estimates.
EDUCATION ATTAINMENT (POPULATION 25 YEARS & OVER)
963% 929% Lakeville's population is highly educated,
with 96.3% of its population holding at
least a high school diploma, and 44.3%
being college graduates.
443% Manufacturing occupations are well -
384% paying opportunities for those with less
than a college education and well-suited
for a community like Lakeville where the
majority of residents have a H.S. diploma
but not a Bachelor's degree.
Percent high school graduate or higher Percent bachelor's degree or higher
Lakeville Greater MSP
Source: U.S. Census Bureau, 2013 American Community Survey S -Year Estimates.
EVILlE'S WORKFORCE
Inflow/Outflow job Counts in 2012
M 9,275 - Employed in Selection Area, Live Outside
23,345 - Live in Selection Area, Employed Outside
3,411 - Employed and Live in Selection Area
Source: U.S. Census Bureau, Center for Economic Studies.
Of those who currently live in Lakeville, 88% work outside of their
home city.
On a daily basis, 73% of Lakeville's working population commutes from
other parts of the metro for their jobs. That is over 9,200 people who
work in Lakeville but live and pay property taxes elsewhere.
New jobs in Lakeville will positively affect surrounding communities,
opening employment opportunities to those seeking a short commute.
The majority of people with primary jobs in Lakeville (58%) travel less
than 10 miles to theirjobs.
Target Corp. conducted another round of layoffs on Wednesday, lune 17, this time eliminating 140 metro -area headquarters employees.
Target said the layoffs are part of the company's $2 billion restructuring plan announced in February. The Minneapolis-based retailer,
Minnesota's fifth-largest employer, has now cut 2,360 jobs in the U.S.
The largest U.S. cuts came in March, when Target laid off 1,700 headquarters workers and eliminated another 1,400 open positions.
Target is likely to lay off more employees following the $1.9B sale of its pharmacy and retail clinic business to CVS Health later this year.
Source: Minneapolis! St. Paul BusinessJownal-
• • r r s •
In 2015 YTD, over 3,100 workers in the Minneapolis Saint Paul metro were laid off, according to DEED's Dislocated Worker Program. Many of
these dislocated workers are coming from life science facilities and back office operations.
Company City Notification Industry Affected
Date Workers
Gannett Publishing Maple Grove 6/2/2015 323111 - Commercial Gravure Printing unknown
Mammoth (Nortek Air Eden Prairie 5/11/2015 423730 - Warm Air Heating and Air -Conditioning Equipment 64
Solutions) and Supplies Merchant Wholesalers
Michael Foods Le Le Sueur 5/6/2015 311999 -All Other Miscellaneous Food Manufacturing 29
Sueur
Anoka Hennepin Coon Rapids 4/18/2015 813930 - Labor Unions and Similar Labor Organizations 150
Education Minnesota
Chart Industries New Prague, 3/30/2015 332420 - Metal Tank (Heavy Gauge) Manufacturing 50
DJO Global 2015
Gedney Foods 2015
Target 2015
National Recoveries,
Inc
Smead 2015
Classic
Manufacturing
Minneapolis Public
Schools 2015
United Rentals
Radioshack 2015
Owatonna
St. Paul 3/23/2015 423450 - Medical, Dental, and Hospital Equipment and 54
Supplies Merchant Wholesalers
Chaska 3/16/2015 311421- Fruit and Vegetable Canning 84
Minneapolis 3/3/2015 452111 - Department Stores (except Discount Department 1721
Stores)
Ham Lake, Coon 2/23/2015 561440 - Collection Agencies 179
Rapids
Hastings 2/19/2015 322233 - Stationery, Tablet, and Related Product 114
Manufacturing
Oakdale 2/17/2015 332721- Precision Turned Product Manufacturing 36
Minneapolis 2/16/2015 611110 - Elementary and Secondary Schools
unknown
Plymouth 9/2/2015 532412 - Construction, Mining, and Forestry Machinery and 71
Equipment Rental and Leasing
Multiple metro 2/2/2015 443112 - Radio, Television, and Other Electronics Stores unknown
locations
Arrow Electric Inc St. Paul 1/28/2015 423690 - Other Electronic Parts and Equipment Merchant 77
2015 Wholesalers
Target Canada 2015 Minneapolis 1/15/2015 452111 - Department Stores (except Discount Department 550
Stores)
Source: Minnesota Dislocated Worker Program, httP;/lmngov/deed/ images/DWPReports.Pdf.
Howden, Richard
From:
Sent:
To:
Cc:
Subject:
Attachments:
Follow Up Flag:
Flag Status:
Jordan,
Gene Goddard <Gene.Goddard@greatermsp.org>
Thursday, July 23, 2015 4:46 PM
Zeller, Jordan (DEED)
Olson, David; Morgan Hill; Emily Anne Johnson (Emily.a Johnson@state.mn.us); Washa,
Tom (DEED); Howden, Richard; John.Shoffner@state.mn.us; Christopher B. Schastok
(Christopher.Schastok@cbre.com)
Project Shore Supplemental MIF info
Project Shore MIF Application.docx; Lakeville - Supplemental Applicant
Information.docx; Advent International Corporation DNBI Report 6-17-15.pdf, Advent
International Corp - RefUSA - 6-17-15.pdf, Serta Simmons RefUSA 6-17-15.pdf; Serta
Simmons Public Filings 6-17-15.pdf, Serta Simmons DNBI Report 6-17-151.pdf, Advent
International Corp - holdings - 7-23-15.xlsx; Hoovers - SSB Mfg 7-23-15.pdf
Flag for follow up
Flagged
Based on our call earlier today, please see the attached documents.
Legislative District: 58A
Due Diligence on financial background: SSB Manufacturing is a wholly-owned subsidiary of Advent
International Corporation which is a $34 billion private equity firm with assets around the world. Since SSB
was acquired by Advent their financial information is private and has not been released to the public. The
financial information that is available on SSB Mfg. is based on industry estimates and is included in the
attached DNB and Reference USA Reports.
Currently SSB Mfg operates 44 manufacturing plants around the US. Based on information based on the
attached documents and DNB's analysis of the company's risk, both SSB and their parent have the financial
capacity and wherewithal to complete the project as presented.
Please let me know if you need additional info.
GG
Gene Goddard, CEcD
Director, Business Investment
GREATER MS
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400 Robert Street North, Suite 1600
Saint Paul, MN 55101