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HomeMy WebLinkAboutItem 06.lDecember 3, 2018 Item No.________ RESOLUTION TO SUPPORT QA1 PRECISION PRODUCTS, INC.’S JOB CREATION FUND APPLICATION TO THE MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT Proposed Action Staff recommends adoption of the following motion: Move to approve the resolution in support of QA1 Precision Products, Inc.’s Job Creation Fund application to the Minnesota Department of Employment and Economic Development. Overview QA1 Precision Products Inc. recently submitted an application to the Minnesota Department of Employment and Economic Development (DEED) for the Job Creation Fund (JCF) program. The application is requesting up to $350,000 from the DEED JCF, which is a pay-for- performance program that provides job creation awards and capital investment rebates to businesses that retain or create high paying, full-time jobs and invest in real property improvements. The award amount for the job creation is paid out over a four- or five-year period and the rebate for the real property improvements is paid at the end of the first complete year. The JCF program requires a resolution of support from the City. The proposed QA1 expansion project to build a new 100,000-square-foot manufacturing facility in Lakeville’s industrial park would result in the retention of 95 full-time jobs and the creation of 44 full-time jobs in Lakeville over the next five years with an average wage level of $40,600 per year, not including benefits. The company has also requested Tax Increment Financing assistance and will be submitting a Minnesota Investment Fund application to DEED. Primary Issues to Consider Is this proposed project in the public interest? Findings of fact in support of that assertion have been included in the attached Job Creation Fund resolution. Supporting Information • Resolution in support of QA1 Precision Products, Inc.’s Job Creation Fund application to the Minnesota Department of Employment and Economic Development • Proposed site location map Financial Impact: $ 0 Budgeted: Y☐ N☒ Source: Related Documents: (CIP, ERP, etc.): Envision Lakeville Community Values: Diversified Economic Development Report Completed by: Kati Bachmayer, Economic Development Specialist DEED CITY OF LAKEVILLE RESOLUTION NO. ____ RESOLUTION REGARDING THE SUPPORT OF A JOB CREATION FUND APPLICATION IN CONNECTION WITH QA1 PRECISION PRODUCTS INC. WHEREAS, the City of Lakeville, Minnesota (the “City”), desires to assist QA1 Precision Products Inc. (“QA1”), an automotive parts manufacturing company, which is proposing to construct a 100,000-square foot facility in the City; and, WHEREAS, the City understands that QA1, through and with the support of the City, intends to submit to the Minnesota Department of Employment and Economic Development an application for an award and/or rebate from the Job Creation Fund Program; and, WHEREAS, the City held a city council work session on November 26, 2018 to consider this matter. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LAKEVILLE, that, after due consideration, the Mayor and City Council of the City of Lakeville, Minnesota, hereby adopts the following findings of fact related to the project proposed by QA1 and its application for an award and/or rebate from the Job Creation Fund Program and express their approval. The City Council hereby finds and adopts the reasons and facts supporting the following findings of fact for the approval of the Job Creation Fund Program application, which may be amended: 1. Finding that the project is in the public interest because it will encourage the growth of commerce and industry, prevent the movement of current or future operations to locations outside Minnesota, result in increased employment in Minnesota, and preserve or enhance the state and local tax base • This project will encourage growth of a successful manufacturing company that has been operating in Minnesota for 25 years and in Lakeville for 23 of those years. • This project will help retain a Lakeville, Minnesota business in the state, as the company is considering location opportunities in South Dakota and Indiana due to cost savings. • This project will allow QA1, a Lakeville company for 23 years, to expand in Lakeville and potentially grow its workforce from 95 current employees to an expected 139 employees (a net gain of 44 employees with an average annual starting salary of $40,600) over the next 5 years. • This project will increase the state and local tax base by adding a proposed 100,000- square foot industrial building to Interstate South Logistics Park in Lakeville. It will also create opportunity for new businesses to move to Lakeville or existing businesses to expand in the community through the eventual sale of QA1’s existing buildings (57,130 square feet and 28,192 square feet). 2. Finding that the proposed project, in the opinion of the City Council, would not reasonably expected to occur solely through private investment within the reasonably foreseeable future. • This project is driven by projected company growth, customer demands and current capacity constraints in QA1’s existing locations. The Job Creation Fund program is needed to offset the company’s high up-front investment in Minnesota (compared to South Dakota or Indiana) and will provide a stronger business case for the project to occur in Lakeville. • The cost of locating this project in Minnesota versus South Dakota or Indiana is estimated to create a $3,000,000 financing gap over a ten-year period. 3. Finding that the proposed project conforms to the general plan for the development or redevelopment of the City as a whole. • The City of Lakeville’s Strategic Plan for Economic Development identifies a focus on business retention and expansion and workforce issues. This project will limit the loss of an existing business, ensure that Lakeville is the first choice for business expansion, and will create new quality jobs in the city. • The proposed project location is zoned I-1, Light Industrial; therefore, a new manufacturing facility in Interstate South Logistics Park conforms to the city’s Comprehensive Land Use Plan for development. • The newly proposed 100,000-square-foot building has an estimated value of $7,500,000, which will greatly increase the future tax valuation in that area of Lakeville’s industrial park. 4. Finding that the proposed project will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the redevelopment or development of the project by private enterprise. • This project would be the third building constructed in Interstate South Logistics Park and will help to spur additional growth and development by private enterprise. ADOPTED by the Lakeville City Council this 3rd day of December, 2018. ______________________________ Douglas P. Anderson, Mayor _________________________________ Charlene Friedges, City Clerk QA1 Proposed Project Site Property Information October 25, 2018 0 450 900225 ft 0 130 26065 m 1:4,800 Disclaimer: Map and parcel data are believed to be accurate, but accuracy is not guaranteed. This is not a legal document and should not be substituted for a title search,appraisal, survey, or for zoning verification. Proposed Project Site 8 Acres Schneiderman's Distribution Center Future 150,000 SF Spec Building