HomeMy WebLinkAbout2019-22RESOLUTION NO. 2019 -22
RESOLUTION OF THE CITY COUNCIL OF COLUMBIA HEIGHTS, MINNESOTA, ADOPTING THE BUSINESS
SUBSIDY POLICY.
BE IT RESOLVED BY the City Council (Council) of the City of Columbia Heights (City), Minnesota that it is in the
interest of the City to provide business subsidies to increase the tax base, crate or retain jobs, enhance
economic diversity, stimulate economic development, encourage investment in redevelopment areas or to
facilitate the reuse of substandard buildings or blight, environmental clean -up or the relocation of uses that
are not in conformity with the City's Comprehensive Plan or Zoning Ordinances; and
BE IT FURTHER RESOLVED that prior to granting business subsidies, the State of Minnesota requires cities to
adopt a Business Subsidy Policy after a public hearing has been held; and
BE IT FURTHER RESOLVED a public hearing, for which proper notice was published in the City's Newspaper of
record ten days in advance of the hearing, was held on February 25, 2019; and
BE IT FURTHER RESOLVED the Business Subsidy Policy will serve as a guide in processing and reviewing
applications requesting business subsidies.
NOW, THEREFORE BE IT FINALLY RESOLVED that the City Council of the City of Columbia Heights, Minnesota
hereby approves and adopts the Business Subsidy Policy as shown in EXHIBIT A.
ORDER OF THE CITY COUNCIL
Passed this 25th day of February, 2019
Offered by: Buesgens
Seconded by: Williams
Roll Call: All Ayes
a, �� ,
Donna Schmitt, Mayor
Attest:
Katie Bruno, City Clerk /Council Secretary
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EXHIBIT A
CH COLUMBIA
HEIGHTS
City of Columbia Heights
And
Columbia Heights Economic Development
Authority
Business Subsidy Policy
Adopted:
City of Columbia Heights
Community Development Department
590 40th Avenue NE
Columbia Heights, MN 55421
(763) 706 -3670
City of Columbia Heights — CC Resolution
Table of Contents
I. Purpose
II. Authority
III. Definitions
IV. Public Purpose
V. Minimum Criteria
VI. Job and Wage Requirements
VII. Subsidy Agreement and Reporting
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City of Columbia Heights — CC Resolution
I. Purpose
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A. The purpose of this policy is to establish criteria in regards to the use of business subsidies by the
City of Columbia Heights (the "City ") and the Columbia Heights Economic Development Authority (the
"EDA ") under the general Business Subsidy Act pursuant to Minnesota Statute, Sections 1161993 to
116J.995 (the "Business Subsidy Act "). This policy shall be used as a guide in processing, evaluating
and reviewing business subsidy requests.
II. Authority
A. The City and EDA's ability to grant business subsidies is subject to the limitations established in
the Business Subsidy Act.
B. Unless specifically excluded by the Business Subsidy Act, a business subsidy may include grants
by a state or local government agency, loans, forgivable loans, contributions of property or
infrastructure, tax increment financing, tax abatement, or any preferential use of government facilitates
given to a business.
C. The City and EDA retain absolute authority and discretion, and reserve the right to amend or
waive sections of this policy when necessary or appropriate. Minnesota Statute, Section 116J.994, Subd.
2, allows the City or EDA to deviate from its criteria by documenting in writing the reason for the
deviation and attaching a copy of the document to its next annual report to the Department of
Employment and Economic Development (the "Department ").
D. Minnesota Statute, Section 116J.993, Subd. 3 exempts certain forms of financial assistance from
the requirements of the Business Subsidy Act.
E. Incentives will be offered based on the nature of the project and the benefits to the community.
Meeting all or a majority of the criteria does not mean that a business subsidy will be approved by the
City or EDA. The City and EDA maintain the ability to approve or deny a business subsidy at their
discretion, based on the merits of the project and the overall benefit to the community, using the criteria
as a means of measuring the overall benefit. Furthermore, the approval or denial of one project is not
intended to set precedent for approval or denial of another project.
III. Definitions
A. The City and EDA hereby adopt the definitions pursuant to Minnesota Statute, Section 116J.993.
IV. Public Purpose Objectives
A. In accordance with the Business Subsidy Act, all business subsidies shall meet a public purpose,
and have a measurable benefit to the community as a whole. The City or EDA will consider the
following public purpose objectives:
City of Columbia Heights —CC Resolution
Diversification of the local economy;
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2. Create high quality and diverse jobs;
3. Retention of local jobs, provided that the job retention is only used as a public purpose in
cases where job loss is specific and demonstrable;
4. Removal of blight and/or encouraging redevelopment within the community to obtain
high levels of property maintenance and private reinvestment;
5. Encourage additional unsubsidized private development within the community, either
directly, or indirectly;
6. Facilitate and promote development on property that could not be developed without
assistance;
7. Meet other uses of public policy, as adopted by the City or EDA from time to time,
including but not limited to the promotion of quality urban design, quality architectural design,
energy conservation, sustainable building practices, and decreasing the capital and operating
costs of local government.
V. Minimum Criteria
A. In order to be eligible for a business subsidy, all business subsidy requests shall meet the
following minimum criteria.
The business subsidy request shall be in compliance with the Business Subsidy Act.
2. The project must be consistent with the applicable provisions of the Comprehensive Plan,
Zoning Ordinances, Design Guidelines, and any other land use document applicable to the
project.
3. All projects must contribute to one or more of the City's goals and policies outlined in the
Comprehensive Plan.
4. A business, non - profit, or developer requesting a business subsidy shall complete and
submit a Business Subsidy Application, along with an application fee and escrow deposit
determined by the City or EDA.
5. For the purposes of evaluating the request, the applicant shall provide all requested
market and financial feasibility studies, appraisals, environmental data, private lender
commitment and information provided to private lenders regarding the project, and other
information requested by the City, EDA or its consultants, in order for the City or EDA to
evaluate the proposal and determine whether the request is consistent with this policy.
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6. The applicant shall proactively attempt to minimize the amount of public assistance
needed through the pursuit of grants, innovative solutions in structuring the deal, and other
funding mechanisms.
7. The applicant shall provide adequate financial guarantees to ensure completion of the
project and repayment of any business subsidy (if repayment is required), unless an exception is
granted by the City or EDA. These may include, but are not limited to, assessment agreements,
letters of credit, personal deficiency guarantees, and mortgages.
VI. Job and Wage Goals
A. Specific job and wage goals shall be determined by the City or EDA, and shall be given
consideration based upon the particular form of the business subsidy requested, nature of the
development, purpose of the business subsidy, local economic conditions and other similar factors.
B. The minimum wage for a job to be considered a new or retained job shall not be less than 120%
of the State of Minnesota's Minimum Wage, exclusive of benefits.
C. Wage goals may be set to enhance existing jobs through increased wages, which increase shall
result in wages higher than the minimum under this Section.
D. In cases where the objective is the retention of existing jobs, the applicant of the business
subsidy request shall provide evidence that demonstrates the loss of jobs is imminent.
E. The jobs to be created or retained by the applicant shall result in job creation or retention within
the City.
F. In addition to other specific time frames, the job and wage goals shall contain specific
requirements to be attained within two (2) years of the benefit date, unless an exception is granted by the
City or EDA.
G. The project shall result in a minimum of six (6) Full Time, or Full Time Equivalent (FTE) jobs
created or retained. For purposes of this policy, FTE jobs must be permanent positions with set hours,
and eligible for benefits.
H. Part-Time Equivalent jobs may be counted toward the job goals.
I. After a public hearing, if the creation or retention of jobs is determined not to be a goal, the wage
and job goals may be set at zero (0).
VII. Subsidy Agreement and Reporting
A. In accordance with the Business Subsidy Act, a recipient shall enter into a subsidy agreement
with the City or EDA. The subsidy agreement shall include, but is not limited to, the following:
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1. A description of the subsidy, including the amount and type of subsidy, and the type of
district if the subsidy is tax increment financing;
2. A statement of the public purpose(s) of the subsidy;
3. Measurable, specific and tangible goals for the subsidy;
4. A description of the financial obligation of the recipient if the goals are not met;
5. A statement of why the subsidy is needed;
6. A commitment to continue operations in the jurisdiction where the subsidy is used for at
least five (5) years after the benefit date;
7. The name and address of the parent corporation of the recipient, if any;
A list of all financial assistance by all grantors for the project.
B. A recipient that fails to meet the terms of a subsidy agreement:
1. Must repay the assistance provided with interest, which is set at no less than the implicit
price deflator as defined in the Business Subsidy Act, Minnesota Statute, Sections § 116J.993 to
116J.995. Repayment may be prorated to reflect partial fulfillment of goals.
2. May not receive a business subsidy from any grantor for a period of five (5) years from
the date of failure or until a recipient satisfies its repayment obligation, whichever comes first.
3. A recipient may be authorized to move from the City within five (5) years of the benefit
date (as defined in the Business Subsidy Act) only if, after a public hearing, the City or EDA
approves the request to move. The City or EDA reserves the right to discontinue the business
subsidy if the recipient moves from the City.
C. The applicant and City or EDA shall comply with the reporting requirements set forth in Section
116J.994, Subd. 7 and 8 of the Business Subsidy Act. The City or EDA shall file a report by April 1 of
each year with the Department regardless of whether or not they have awarded any business subsidies.