HomeMy WebLinkAbout5.a. Business Subsidy Policy Discussion
EXECUTIVE SUMMARY
Port Authority Meeting Date: February 15, 2022
AGENDA ITEM: Business Subsidy Policy Discussion. AGENDA SECTION:
New Business
PREPARED BY: Eric Van Oss, Economic Development
Coordinator AGENDA NO. 5.a.
ATTACHMENTS: Business Subsidy Policy APPROVED BY: LJM
RECOMMENDED ACTION: Discussion Item.
BACKGROUND
The City Council recently met to update their strategic plan and identify new goals for 2022/2023.
Reviewing and revising the city’s business subsidy policy under the bucket of “Growing Rosemount” was
one of those goals.
In the 1998 legislative session, the Business Subsidy Act was adopted, which required all local government
to have a policy for public subsidies in excess of $100,000. The Port Authority reviewed and adopted the
attached policy in 2000. Since then, the City has used primarily Tax Increment Financing (TIF) to facilitate
numerous economic development projects such as the Waterford, Culvers, Morrison, and Project Osprey.
Historically, the Business Subsidy Policy has largely been in the form of TIF driven redevelopment
housing projects. Within the last several years interest in greenfield development for Business Park and
Industrial uses has dramatically increased. Staff anticipates that that more businesses will seek subsides for
distribution and light manufacturing facilities. As the policy is 20 years old, staff believes it is a good time
to revisit the subsidy policy and to ensure it is in line with the goals and priorities of the Port Authority.
The current policy outlines the criteria for approval but does not outline how the policy advances the
economic development goals/priorities of the Port Authority and City Council via the Comprehensive
Plan. Other cities have revised their Business Subsidy Polices to prioritize issue areas such as
transportation/utility infrastructure, elimination of blight, creating of workforce housing, increased wage
goals and new/unmet services.
RECOMMENDATION
None. This is a discussion item to determine a) is it appropriate to revise the Business Subsidy Policy and
if so b) what priorities and goals should be included in a revised policy.
4
CITY COUNCIL IN AND FOR
THE CITY OF ROSEMOUNT, MINNESOTA
Business Subsidy Criteria
1. PURPOSE
1.01 The purpose of this document is to establish the City Council's criteria for
granting of business subsidies, as defined in Minnesota Statutes I I6J.993,
Subdivision 3, for private development. This criteria shall be used as a guide in
processing and reviewing applications requesting business subsidies.
1.02 The criteria set forth in this document are guidelines only. The City Council
reserves the right in its discretion to approve business subsidies that vary from the
criteria stated herein if the City Council determines that the subsidy nevertheless
serves a public purpose.
1.03 The City Council may amend the business subsidy criteria at any time.
Amendments to these criteria are subject to public hearing requirements pursuant
to Minnesota Statutes, Section 116J.993 through 116J.994.
2. STATUTORY LIMITATIONS
2.01 In accordance with the Business Subsidy Criteria, Business Subsidy requests must
comply with applicable state statutes. The City Council ability to grant business
subsidies is governed by the limitations established in Minnesota Statutes
116J.993 through 116J.994.
3. PUBLIC POLICY REQUIREMENT
3.01 All business subsidies must meet a public purpose other than increasing the tax
base. Job retention may only be used as a public purpose in cases where job loss
is imminent and demonstrable.
4. BUSINESS SUBSIDY APPROVAL CRITERIA
4.01 All new projects approved by the City Council should meet the following
minimum approval criteria. However, it should not be presumed that a project
meeting these criteria will automatically be approved. Meeting these criteria
creates no contractual rights on the part of any potential developer or the City
Council.
4.02 The project must be in accord with the Comprehensive Plan and Zoning
Ordinances, or required changes to the plan and ordinances must be under active
consideration by the City at the time of approval.
4.03 Business subsidies will not be provided to projects that have the financial
feasibility to proceed without the benefit of the subsidy. In effect, business
subsidies will not be provided solely to broaden a developer's profit margins on a
project.
4.04 Prior to approval of a business subsidy's financing plan and when deemed
appropriate by the City Council, the developer shall provide any required market
and financial feasibility studies, appraisals, soil boring, information provided to
private lenders for the project, and other information or data as requested.
4.05 A recipient of a business subsidy must make a commitment to continue operations
at the site where the subsidy is used for at least five years after the benefit date.
4.06 Recipients of any business subsidy will be required to meet wage and job goals
determined by the City Council on a case -by -case basis, giving consideration to
the nature of the development, the purpose of the subsidy, local economic
conditions, and situational circumstances.
4.07 The City Council will utilize Tax Increment Financing to support the
community's long -term economic, redevelopment, and housing goals.
4.08 Each Tax Increment Financing subsidy will be analyzed and evaluated by the City
Council. Each project shall be measured against the general criteria in Sections 1
through 5 and the specific criteria in the City Council Tax Increment Financing
Policy.