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HomeMy WebLinkAbout09-08-15CITY OF LAKEVILLE HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES September 8, 2015 Chair Anderson called the meeting to order at 6:16 p.m. Roll call was taken. Present: Commissioners Davis, Little and Anderson Commissioners Swecker and LaBeau arrived shortly thereafter. Also present: Justin Miller, City Administrator; David Olson, Community & Economic Development Director; Rick Howden, Economic Development Specialist; Elliott Knetsch, City Attorney; Charlene Friedges, City Clerk. Item 2 Motion was made by Little, seconded by Davis, to approve minutes of the June 15, 2015 H.R.A. meeting. Voice vote was taken on the motion. Ayes - unanimous Item 3 Chair Anderson opened the public hearing on the submittal of a Minnesota Investment Fund Loan application to the Minnesota Department of Employment and Economic Development (DEED) on behalf of SSB Manufacturing Company. Community and Economic Development Director David Olson stated SSB Manufacturing Company is a mattress manufacturer considering construction of a 240,000 square foot facility in the Interstate South Logistics Park. The company plans to create 200 new jobs over the next two years. The Minnesota Investment Fund provides financing to help add new workers and retain high quality jobs. 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. The DEED has tentatively committed to $1,000,000 for the SSB Manufacturing project. Chris Schastok, Vice President of CBRE, spoke on behalf of SSB Manufacturing Company, the number one Serta and Simmons mattress manufacturer in the United States. The company is pursuing this project due to projected growth and heightened demand for its product. This facility would incorporate new automation technology which is the first of its kind in the industry. Mr. Schastok spoke about the extensive site selection process, stating this facility will be the company's first manufacturing site in Minnesota. HOUSING AND REDEVELOPMENTAUTHORITY MEETING MINUTES September 8, 2015 John Shoffner, Minnesota Department of Employment and Economic Development (DEED), stated the estimated development cost of the project is $15.7 million. It will be a build -to -suit -to -lease project, with Scannell Properties constructing the building and leasing it back to SSB Manufacturing. Jon Theis, Vice President of Project Management with Scannell Properties, was also present. There were no questions or comments from the audience. Motion was made by Davis, seconded by Swecker, to close the public hearing. Voice vote was taken on the motion. Ayes - unanimous Motion was made by Davis, seconded by Little, to approve Resolution No. 15-04 authorizing an application to the Department of Employment and Economic Development for financial assistance through the Minnesota Investment Fund on behalf of SSB Manufacturing Company. Roll call was taken on the motion. Ayes - Davis, Little, Swecker, Anderson, LaBeau Item 4 Mr. Olson provided a detailed overview of the request by SSB Manufacturing Company for Tax Increment Financing (TIF) assistance for the construction of this 240,000 square foot manufacturing and warehouse facility. The proposed TIF plan will amend the current Airlake Redevelopment Project Area to include the Interstate South Logistics Park in order to create a new TIF District for this project. The total amount of TIF eligible costs for the project is estimated at $7.7 million. Springsted, the City's financial consultant, estimates that providing 95% of the available increment to the project would result in a maximum amount of $1,607,350 that would be available in pay-as-you-go TIF reimbursements beginning in 2017 and ending in 2025. The proposed project is consistent with the City's Business Subsidy and TIF policies. Commissioner Swecker pointed out that Springsted used certain assumptions related to project completion and market value increase when it drafted a TIF plan for this project. She asked if the company can guarantee the projected two-year construction and job creation timeline. Mr. Schastok explained that his client, SSB Manufacturing, would not be applying for the Minnesota Investment Fund if they did not feel comfortable that they could achieve the goals HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES September 8, 201 S set forth. They have already begun discussions with the developer regarding winter construction. In addition, the platting process is set to allow the developer to begin grading and utility work before the end of this construction season and to allow for construction to be completed by 2016. Concerning jobs, this will be SSB's fourth advanced manufacturing facility, and they have found that in order for the 240,000 square foot facility to operate efficiently, they will need at least 200 employees. Commissioner Swecker also questioned whether there are potential issues with the City's credit rating. Mr. Olson explained that there is no bonded debt issued for this project. The pay-as-you-go scenario eliminates any risk to the City. Chair Anderson adjourned the meeting at 6:45 p.m. Respectfully submitted, Charlene Friedges, City Cl PAN i � 0A wt�_ "