HomeMy WebLinkAboutItem 07
May 15, 2017 Item No.________
RESOLUTION APPROVING A CONTRACT FOR PRIVATE DEVELOPMENT
/BUSINESS SUBSIDY AGREEMENT WITH LAKEVILLE 222nd 2017 LLC AND
MENASHA PACKAGING COMPANY LLC
Proposed Action
Staff recommends adoption of the following motion: Move to adopt a resolution approving the
Contract for Private Development with Lakeville 222nd 2017, LLC (dba Launch Properties) and Menasha
Packaging Company, LLC.
Overview
The City received an application for Tax Increment Financing (TIF) assistance from Launch Properties
LLC (Launch) on February 14th. Launch is proposing to develop a portion of the Hat Trick Investment
property located in the industrial park east of Cedar Avenue. (see attached location map). Launch is
proposing to construct a 286,000 square foot warehouse-office building on approximately 19 acres of
this property. Approximately 150,000 square feet of this building would be leased to Menasha
Packaging.
Menasha is in the process of relocating manufacturing and warehouse functions from a plant that had
operated in Brooklyn Park to Lakeville. This will result in the creation/transfer of 60 new jobs from
Brooklyn Park to Lakeville between 12/1/16 and 5/1/17. In addition, Menasha expects to create an
additional nine jobs in the new warehouse once it is completed. Once the transfer of operations from
the Brooklyn Park plant is completed and the new warehouse space is constructed, Menasha will have
a total of 320 or more full-time jobs in Lakeville. This is approximately 100 more jobs than the company
had in Lakeville prior to 2014.
The contract provides for the City to provide “pay-as-you-go” reimbursements consisting of 80% of the
captured tax increments for a period of up to nine years beginning with taxes payable in 2019 with a
not-to-exceed amount of $1,000,000. This assistance in contingent on Launch Properties constructing
the proposed 286,000 square foot multi-tenant warehouse office building. The County Assessor’s
estimated market value for this new building is $11,700,000. Menasha Packaging is required to create
at least nine new jobs and retain 60 jobs recently transferred to Lakeville over the next two years, and
to maintain their operation in Lakeville for at least five years. The City Council has approved the
proposed modification of the Redevelopment Plan and the creation of TIF District No. 22. The EDC
recommended approval of this proposed TIF project at their April 25, 2017 meeting.
Primary Issues to Consider
• Is this request for Tax Increment Financing assistance consistent with the City’s policies?
The request is consistent with the City’s TIF and Business Subsidy Policies.
Supporting Information
• Resolution and Contract for Private Development / Business Subsidy Agreement
Financial Impact: $_1,000,000 Budgeted:Y/N__N__Source:_Captured Tax Increments
Related Documents: (CIP, ERP, etc.)
Envision Lakeville Community Values: Diversified Economic Development
Report completed by: David L. Olson, Community & Economic Development Director
175848v1
CITY OF LAKEVILLE
RESOLUTION NO. ______
RESOLUTION APPROVING THE CONTRACT FOR PRIVATE
DEVELOPMENT BY AND BETWEEN THE CITY OF LAKEVILLE AND
LAKEVILLE 222nd 2017, LLC
AND MENASHA PACKAGING COMPANY, LLC
WHEREAS, by Resolution No.17-__ dated ___________, 2017, the Lakeville Housing and
Redevelopment Authority (“Authority”) authorized the City to undertake, on the Authority’s behalf,
all of the public development activities in connection with the development of the Lakeville 222nd
2017, LLC and Menasha Packaging Company, LLC (“Developer”) development proposal, including
the administration of tax increment as accounted for in the City’s financial statements; and
WHEREAS, the City of Lakeville has held a public hearing regarding the establishment of
Tax Increment Financing District No. 22 as an Economic Development District and has adopted the
Tax Increment Financing Plan therefor; and
WHEREAS, the Developer has requested a business subsidy in amount not to exceed
$1,000,000 for its development through reimbursement of certain development costs using tax
increment on a pay-as-you-go basis and Developer is proposing to meet certain wage and job goals
as a condition of the grant of the subsidy as further detailed in the proposed Contract for Private
Development between the City of Lakeville and Lakeville 222nd 2017, LLC and Menasha Packaging
Company LLC (“Contract”);
WHEREAS, City of Lakeville has, on the date hereof, held a public hearing on the proposed
Contract, tax increment financing and business subsidy;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lakeville,
that the Contract for Private Development by and between the City of Lakeville and Lakeville 222nd
2017, LLC and Menasha Packaging Company, LLC including the business subsidy agreement, is
approved and the Mayor and City Clerk are authorized to execute the Contract.
ADOPTED this _______ day of _____________, 2017, by the City Council of the City of
Lakeville.
CITY OF LAKEVILLE
BY: _______________________________
Douglas P. Anderson, Mayor
ATTEST:
______________________________
Charlene Friedges, City Clerk