HomeMy WebLinkAbout7.b. Authorizing the Updated Rosemount Business Subsidy Policy
EXECUTIVE SUMMARY
City Council Regular Meeting Date: June 21, 2022
AGENDA ITEM: Authorizing the Updated Rosemount
Business Subsidy Policy
AGENDA SECTION:
Public Hearing
PREPARED BY: Eric Van Oss, Economic Development
Coordinator AGENDA NO. 7.b.
ATTACHMENTS: Resolution, Business Subsidy Policy APPROVED BY: LJM
RECOMMENDED ACTION:
1. Hold a Public Hearing
2. Motion to Adopt a resolution approving the updated Business Subsidy Policy
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 governments
to have a policy for public subsidies in excess of $150,000. 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, Culver’s, The 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.
At the March Port Authority meeting, Commissioners and staff discussed the need for an updated policy
and broad concepts to include. Staff reviewed the 2040 Comprehensive Plan, Council/Port goals, and
other cities business subsidy policies. The current policy only addresses the statutory and regulatory
process of administering subsidies. Staff suggests changing the structure of the policy to include sections
that outline the purpose, subsidy criteria, application process, minimum requirements and subsidy
agreement. Currently there is an informal process and it is applied on a project-by-project basis; however,
given the flurry of activity, staff believes a codified process would be helpful to streamline subsidy
requests.
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At the May Port Authority meeting, Commissioners commented on the draft Business Subsidy Policy and
staff incorporated changes as needed. To formally adopt the policy, the City Council must hold a public
hearing and subsequently vote to adopt the attached resolution, which will then be sent to the Minnesota
Department of Employment and Economic Development to be recorded as the City’s updated official
Business Subsidy Policy.
RECOMMENDATION
The Rosemount Port Authority and staff recommend City Council approve the attached updated Business
Subsidy Policy.
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION NO. ______
A RESOLUTION AUTHORIZING THE ADOPTION OF THE
BUSINESS SUBSIDY POLICY
WHEREAS, a Business Subsidy Policy Update has been completed pursuant to Minnesota Statutes
116J.993, Subdivision 3, for private development.;
WHEREAS, 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;
WHEREAS, 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;
WHEREAS, in accordance with 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;
WHEREAS, 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;
NOW THEREFORE BE IT RESOLVED, by the City Council of Rosemount, MN that the City
of Rosemount adopts the Business Subsidy Policy dated June 21st, 2022.
ADOPTED this 21st day of June 2022, by the City Council of the City of Rosemount.
______________________________
William H. Droste, Mayor
ATTEST:
______________________________
Erin Fasbender, City Clerk
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Adopted June 21, 2022
Rosemount Business Subsidy Policy
1. PURPOSE
The purpose of the Rosemount Business Subsidy Policy is to establish criteria for the granting of business
subsidies, including assistance through Tax Increment Financing (TIF), Tax Abatement, and other
incentive and assistance programs that may become available through the City. For the purposes of this
document, the term “City” includes the Rosemount City Council, the Rosemount Port Authority, City
staff, financial consultants, and legal counsel.
This policy will be used as criteria for providing subsidies, in addition to the requirements and limitations
set forth by provision of Minnesota Statutes Section 116J.993 through 116J.995, as amended (the
“Business Subsidy Act”). The criteria set forth in this Business Subsidy Policy shall be used as a guide in
processing and reviewing an application requesting a business subsidy and shall be used in conjunction
with other relevant policies of the City. The City may amend this Business Subsidy Plan at any time.
Amendments to this Plan are subject to public hearing requirements contained in the Business Subsidy
Act.
The City reserves the right to approve or reject projects on a case-by-case basis, taking into
consideration established polices, project criteria, and demand on City services in relation to the
potential benefits form the project. Meeting this policy criteria does not guarantee the award of
business assistance for the project. Approval or denial of one project is not intended to set precedent
for approval or denial of another project. The City has the right to deviate from this policy. Any applicant
who is not in good standing with the City regarding licenses, fees, code violations, or other City issues
will not be considered for a business subsidy.
2. BUSINESS SUBSIDY CRITERIA
Because projects vary greatly in structure and public benefit derived, each project will be considered on
its own merits. Consideration will be given to projects providing public benefits in two or more of the
following categories:
1. The creation of new jobs/increase in total payroll. A project must create a minimum of 5 jobs.
Preference will be given to higher paying jobs that also provide benefits such as health care.
Projects that result in the retention of existing jobs can also be considered for business
subsidies. To be considered under this job retention category, it must be demonstrated – to the
satisfaction of the City - that the loss of jobs is specific and can be demonstrated.
a. Potential Wage Criteria: The project provided a business subsidy must have
demonstrate one third of the full-time equivalent positions will be paying at least 200%
of the State of MN Minimum Wage. The City will seek to create jobs with higher wages
as appropriate for the overall public purpose of the assistance. Wage goals may also be
set to enhance existing jobs through increased wages, which increase must result in
wages higher than the minimum under this Section.
2. Projects that make a minimum capital investment of $1 million.
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Adopted June 21, 2022
3. "But-For" Test. When there is a substantial likelihood that the project would not go forward or
would not go forward in the same capacity without the business subsidy. This criterion may be
met based solely on representation of the recipient of the business subsidy.
4. Other Economic or Redevelopment Goals. If creation of jobs is determined not to be a goal of a
project (and by extension wages) the proposed business subsidy must achieve specific, tangible,
and measurable goals related to one or more of the following:
a. Projects that provide value in the forms of needed transportation and other utility
infrastructure improvements including regional infrastructure in the community that
would be completed in conjunction with the project.
b. Redevelopment projects that result in the stabilization of business districts or
neighborhoods by elimination of blighting conditions.
c. Projects create new business or residential opportunities in Downtown Rosemount.
d. Projects that enhance or increase the economic diversity of the community by attracting
businesses or industries not currently located in the City. New job wage requirements
will apply to any new jobs created.
e. Projects that result in the development of affordable, senior, or workforce housing.
f. Multi-family housing with high-amenities considered market rate
g. Quality of Life based on business/projects. Those business/entities that provide a
desirable good or service and address an unmet demand in the community will be
considered. New job wage requirements will apply to any new jobs created.
h. Provides opportunity for the attraction of destination-oriented uses such as outdoor
recreation, entertainment and shopping.
3. BUSINESS SUBSIDY APPLICATION PROCESS
The applicant will complete and submit the City's Application for Business Subsidy along with the
required application fee (refer to the current year's adopted fee schedule). The application fee covers
the City's outside financial analysis costs and the development of a business subsidy agreement by legal
counsel. The applicant will also provide any additional information requested by the city. 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.
The applicant will be liable for any additional costs beyond the initial deposit. All materials submitted to
the City in connection with a business subsidy application shall become the property of the City and is
subject to data privacy law. The review process shall involve at least the following:
1. Staff shall review the application materials and make a preliminary recommendation to the City
regarding:
a. The completeness of the application, and
b. Whether the application meets the goals and criteria of this policy.
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Adopted June 21, 2022
2. If the City concurs with the recommendation, a public hearing will be set.
3. At the time of the scheduled public hearing, staff will make a final recommendation to the
City regarding the approval or denial of the subsidy application. This recommendation will be
based on:
a. Applicable credit analysis.
b. Financial structure of the proposed project/application.
c. Legal compliance of the project/application.
4. The City will conduct the public hearing, during which it will take citizen comment on issuing
the subsidy. After the public hearing is closed, the City will either approve or deny the
Business Subsidy request. If the subsidy is approved, the business and the City will enter into
a Business Subsidy Agreement.
4. BUSINESS SUBSIDY MINIMUM PROJECT REQUREMENTS
All new projects approved by the City Council should meet the minimum approval criteria outlined in
Section 2. 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. The project must be in accord with the Comprehensive Plan, Zoning Ordinances and
other Economic Development Plans or required changes to the plan and ordinances must be under
active consideration by the City at the time of approval. Each Tax Increment Financing subsidy and Tax
Abatement 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.
5. SUBSIDY AGREEMENT
In granting a business assistance, if required by the Business Subsidy Act, the City shall enter into a
subsidy agreement with the recipient that provides the following information:
a. Wage and job goals (if applicable)
b. Commitment to provide necessary information for reporting purposes
c. Five-year operation commitment after the benefit date
d. Recourse for failure to meet goals required by the Statutes
The subsidy agreement may be incorporated into a broader development agreement for a project. The
assistance agreement will commit the recipient to provide the reporting information required by the
Business Subsidy Act, if any.