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HomeMy WebLinkAbout7.a. Minnesota Investment Fund (MIF) and Job Creation Fun (JCF) Program EXECUTIVE SUMMARY City Council Regular Meeting Date: April 4, 2023 AGENDA ITEM: Minnesota Investment Fund (MIF) and Job Creation Fun (JCF) Program AGENDA SECTION: Public Hearing PREPARED BY: Eric Van Oss, Economic Development Coordinator AGENDA NO. 7.a. ATTACHMENTS: Resolutions APPROVED BY: LJM RECOMMENDED ACTION: 1. Hold Public Hearing take public testimony for the Minnesota Investment Fund application, and close public hearing 2. Motion to approve the Minnesota Investment Fund Program application and resolution. 3. Motion to approve the Minnesota Job Creation Fund application and resolution. BACKGROUND Spectro Alloys is planning an expansion of their Rosemount facility. The project represents a major investment in the industrial area and will bring 70 new highly paid jobs to Rosemount. As part of the process, Spectro Alloys has been working with the Minnesota Department of Employment and Economic Development to utilize two state funding programs, which are outlined in detail below. The City acts as the local government sponsor of these programs, and to begin the application submittal process must pass resolutions of support for the project. The Minnesota Investment Fund (MIF) Program provides loans to businesses that create or retain high- paying, full-time permanent jobs, and invest in machinery or real property acquisition or improvements. The program is available statewide for manufacturing, distribution, warehousing, and other eligible business activities that would not occur but for the MIF assistance. Applications are accepted on a year- round basis as funds are available. To receive funds, a business must work in conjunction with the city or county government (Local Government) where the business will be located. In consultation with the Department of Employment and Economic Development (DEED), the Local Government will make a preliminary determination about whether a business meets the minimum program requirements. DEED evaluated and found the initial inquiry for Spectro Alloys potentially eligible in the amount of $400,000. As part of the application process, the City of Rosemount and Spectro Alloys will work together to complete the MIF application. If the application is approved, DEED and the City of Rosemount will enter into a Grant Contract specifying the details of the award and job creation requirements. After the Grant Contract is fully executed, the City of Rosemount will enter into a Loan Agreement with Spectro Alloys. MIF funds will be paid on a reimbursement basis after required documentation verifying expenditures is submitted and approved. As part of the application, the City of Rosemount is required to hold a public hearing concerning the submittal of the MIF application to DEED. Additionally, prior to application submittal, the City of Rosemount must adopt a resolution to act as he legal sponsor for the project and to enter into a grant agreement with the State of Minnesota. 2 The Job Creation Fund (JCF) provides financial incentives to new and expanding businesses that meet certain job creation and capital investment targets. The program is available to businesses engaged in manufacturing, warehousing, distribution, technology-related industries, and other eligible activities. Companies must work with the local government where a project is located to apply to DEED to receive designation as a Job Creation Fund business. With assistance from the local government, Spectro Alloys will submit the Job Creation Fund Application Form and required supporting documents to DEED. DEED evaluates the application and notifies the local government and business of approval or denial. If approved, DEED will formally designate the business as a Job Creation Fund business and determine an award amount. Awards in excess of $500,000 require DEED to hold a public hearing. After a public hearing (if applicable), DEED drafts a business subsidy agreement specifying project goals and duration for the agreement and sends it to the business for signature. The business then returns the agreement to DEED for final signature by the DEED commissioner. Through the duration of the business subsidy agreement, the local government will continue to provide assistance to the designated JCF business. This includes collecting required reporting information and submitting progress reports, annual reports, requests for payment, and providing updates to the business regarding updates to annually adjusted wages. Prior to application submittal, the City of Rosemount must adopt a resolution to act as he legal sponsor for the project and to enter into a grant agreement with the State of Minnesota. RECOMMENDATION Staff recommends approval of the resolution. CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 2023 – XX A RESOLUTION TO EXECUTE A GRANT UNDER THE MINNESOTA INVESTMENT FUND PROGRAM TO THE DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT WHEREAS, that the City of Rosemount act as the legal sponsor for the project contained in the Minnesota Investment Fund Application to be submitted on or about April 10 and that the Mayor and City Clerk are hereby authorized to apply to the Department of Employment and Economic Development for funding of this project on behalf of the City of Rosemount. WHEREAS, that the City of Rosemount has the legal authority to apply for financial assistance, and the institutional, managerial, and financial capability to administer the proposed project. WHEREAS, that the City of Rosemount has not violated any Federal, State, or local laws pertaining to fraud, bribery, kickbacks, collusion, conflict of interest or other unlawful or corrupt practice. WHEREAS, that upon approval of its application by the State, the City of Rosemount may enter into a Grant Contract with the State of Minnesota for the approved project, and that the City of Rosemount certifies that it will comply with all applicable laws, statutes, regulations and rules as stated in the Grant Contract and described in the Project Compliance Certification of the Application. WHEREAS, that the City of Rosemount has obtained credit reports and credit information on Spectro Alloys Corporation. Upon review by the City of Rosemount and Kennedy & Graven no adverse findings or concerns regarding, but not limited to, tax liens, judgments, court actions, and filings with state, federal and other regulatory agencies were identified. Failure to disclose any such adverse information could result in revocation or other legal action. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROSEMOUNT, MINNESOTA that the Mayor and City Clerk, or their successors in office, are hereby authorized to execute the Grant Contract and amendments, thereto, as are necessary to implement the project on behalf of the City of Rosemount. ADOPTED this 4th day of April, 2023. Jeffery D. Weisensel, Mayor ATTEST: Erin Fasbender, City Clerk CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 2023 – XX A RESOLUTION REGARDING THE SUPPORT OF A JOB CREATION FUND APPLICATION IN CONNECTION WITH SPECTRO ALLOYS CORPORATION WHEREAS, the City of Rosemount, Minnesota (the “City”), desires to assist Spectro Alloys, a Business Corporation which is proposing to improve a facility in the City; and, WHEREAS, the City of Rosemount understands that Spectro Alloys, 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 of Rosemount held a city council meeting on April 4, 2023, to consider this matter. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROSEMOUNT, Minnesota, that, after due consideration, the Mayor and City Council of the City of Rosemount, Minnesota, hereby adopts the following findings of fact related to the project proposed by Spectro Alloys 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: 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 Spectro’s planned $70 Million investment will provide the capabilities needed to recycle used beverage containers, extrusions, and a variety of other regionally generated end of life scrap types into high quality recycled raw materials for extruders and sheet rolling mills. The equipment being installed will be the first of its kind in Minnesota, building the local circular economy while adding up to 70 new full-time jobs in Rosemount, and supporting hundreds of millions of dollars of ongoing direct economic impact. 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 requires a significant amount of capital that would not occur solely though private investment. 3. Finding that the proposed project conforms to the general plan for the development or redevelopment of the City as a whole. The project adds to the City’s industrial base and creates local highly paid jobs. This project expands a business within the heavy industrial areas and does not represent a net addition of acreage zoned for heavy industrial. Additionally, 93% of working residents commute outside of Rosemount for work and this expansion would represent a significant expansion of local employment opportunities for residents. 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 expansion would represent a significant influx jobs to Rosemount. These jobs represent a wide range of wages and the average annual wage across all associates is $42.50 an hour, which is significantly higher than recent industrial projects such as distribution centers. In addition to increasing the tax base, this expansion has the potential to spur more investment in similar projects in Rosemount and would help create an industry cluster. The range of jobs will likely draw employees from Rosemount and the Greater MSP area. The proposed job descriptions also provide a wide range of experience levels that will help to create jobs for a wider range of Rosemount residents. ADOPTED this 4th day of April, 2023. Jeffery D. Weisensel, Mayor ATTEST: Erin Fasbender, City Clerk