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99-742Council File # gg -�y � S �.bs�'� �w�� A�cr� e a V e,�cs:orl� Presented by Referred To �. — S ep$, � 194'l RESOLUTION OF Green Sheet # Committee Date Resolution Authorizing a Public Hearing and Adopting Criteria for Awarding Business Subsidies that Comply with the 1999 Minnesota Business Subsidies Law 1 WHEREAS, the 1999 Minnesota Legislature enacted Statute 116J.993-995 setting requirements for subsidies 2 allocated to businesses by state or local government agencies; and 3 WHEREAS, local government agencies including the Housing and Redevelopment Authority of the City of 4 Saint Paul, Minnesota (HRA) are charged with holding a public hearing and adopting a set of criteria for 5 awarding business subsidies that comply with this statute; now therefore be it 6 7 RESOLVED, that the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota does hereby set a public hearing for Wednesday, August 11, 1999, on the following criteria; and be it FURTHER RESOLVED, that the following criteria be adopted. 10 11 12 13 14 15 16 17 18 CRITERIA FOR AWARDING SUBSIDIES TO BUSINESSES SUBJECT TO THE REGULATIONS AND REPORTING REQUIREMENTS OF THE MINNESOTA BUSINESS ASSISTANCE ACT A subsidy is defined as"state or local government agency grant, contribution of personal properry, real properiy, infrastructure, the principal amount of a loan at rates below those commercially available to the recipient, any reduction or deferral of any taac or any fee, any guarantee of any payment under any loan, lease, or other obligation, or any preferential use of government facilities given to a business." To be subject to these requirements a subsidy must be $25,000 or more. Small businesses, as defined by Council File #94-1512, are exempt from the living wage requirement. Eighteen exceptions to these requirements aze set out in the legislation and are attached hereto as Appendix A. 19 1. A business subsidy must have a defined public purpose as shown in the Public Purpose Snminary that 20 accompanies projects going to PED Credit Committee, City Council, and the HRA. Increasing the tas 21 base may not be used as a public purpose under MN Statute 116J.993-995 nor can job retention be used 22 as a public purpose unless "job loss is iimninent and demonstrable." The Public Purpose Sununary (see 23 Appendix B) must also show any job creation or retention goals established including the proposed 24 wages and benefits broken down by wage level. 25 2. Applicant must be a business located in or moving into the city limits of the City of Saint Paul. This 26 includes not-for-profit businesses with at least 100 full-tune equivalent positions (FTEs) and with a 27 ratio of highest to lowest paid employee that exceeds ten to one. L, MINNESOTA �� t 28 3. Proposals for direct loans must first attempt and be unable to obtain private financing before applying 29 for city funding. Gt� _`l'-� a 30 4. Proposals can be for any business purpose. Except refinancing of e�sting debt other than HRA/City 31 debt is not done unless it will improve the City/HRA collaterai posirion or the repayment ability of 32 City/HI2A loans. 33 5. Loan guarautees must have participarion by a private lender to assume at least 50% of risk. 34 6. Any proposal to utilize STAR fixnds must be eligible under the City Council adopted STAR guidelines, 35 and must be awazded the funds through the approved STAR processes. 36 7. Proposals to utilize Taac Increment Financing must be for land acquisition, site prepararion, and public 37 improvements and must follow the taac increment approval process. (See Appendix C). 38 8. Business subsidies in the form of grants must be structured as forgivable loans or else the agreement 39 must state the fair mazket value of the subsidy to the recipient, including the value of conveying 40 property at less than a fair mazket price, or other in-kind benefits to the recipient. 41 9. 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 Recipient must be willing to enter into a subsidy agreement that includes: (1) a description of the subsidy, including the amount and type of subsidy, and type of district if the subsidy is taac increment financing; (2) a statement of the public purposes for the subsidy; (3) goals for the subsidy to be achieved within two years of the benefit date, including goals for the number of full-time and/or part-time jobs created and wage and benefit goals that meet all City of Saint Paul ordinances and resolutions regarding business subsidy wage and job goals. In cases where job loss is imminent and demonstrable, goals far the number of jobs retained and wage goals for jobs created or retained must be included. (4) a statement that the recipient does not haue an ongoing unresolved adverse acrion on their record with OSHA or the EPA; (5) a statement that the recipient has a company-wide standazd Affirmative Action policy; (6) a description of the financial obligation of the recipient if the goals aze not met; (7) a statement of why the subsidy is needed; (8) a commitment to continue operations at the site where the subsidy is used for at least five years after the benefit date; (9) the name and address of the parent corporation of the recipient, if any; and (10) a list of all financial assistance by ali grantors for the project. 59 10. Preference will be given to applicants meeting the following criteria: 60 (1) a demonstrated higher target percentage of hires for Saint Paul residents; 61 (2) demonstration of employer contributions made to employee child care and retirement accounts; 62 (3) participation in responsible labor relations. To the extent legally possible, preferential status for job 63 creation and retention assistance will be given to businesses that engage in responsible labor relarions. 64 Responsible labor relarions aze defined as neutrality on union organizing, providing a complete and 65 accurate list of names and addresses of employees, reasonable access to employees and facilities during 66 non-working periods, voluntary recognition based on a card check demonstrating that a union 67 represents a majority of employees in a bazgaining unit, and binding azbitrarion on the first contract. 68 (4) a requirement that if job crearion/retention is the primary development objective, recipients are 69 required to create (or, in cases where job`loss is �mminent and demonstrable, retain) at least one full- 70 time living wage job per $25,000 of subsidy; 71 (5) a requirement that recipients with at least 100 FTEs invest a portion equal to 5% of their loan or 2 q �.q9 72 grant for training Saint Paui workers; �� 73 (6) a requirement that employers with at least 75 FTEs offer employees the opportunity to participate in 74 a health caze program which includes an employer contribution; 75 (7) a statement that recipients with at least 100 F'I'Es will dedicate a portion of their loan or grant to a 76 program encouraging housing opportwrities for their employees within the job creation period of the 77 assistance.. This assistauce may be in the form of advances for down payments or closing costs, grants 78 for house or properry acquisition, or partnerships with affordable housing agencies or lenders; 79 11. 80 81 82 83 84 In awarding a business subsidy, City CounciUHRA Board will consider: A. In what ways the project improves the mix of businesses in the area so as to allow the azea to participate in fast-growing indushies; protect area from adverse economic consequences caused by slow growth or declining industries that aze dominant in the area; and provides essential consumer services or develops a network for businesses of local suppliers that do not currently e�st in the area. 85 B. How many new jobs will be created and at what pay? How do proposed wages compaze to 86 comxnunity wage levels? Will some jobs have opportunities for cazeer advancement, education, 87 or occupational training? Are there job growth projections for the project over the next 2-5 88 years? Are there fringe benefits auailable and what aze they? 89 C. If job loss is imminent is there substantial evidence that the company will have to shut down 90 involuntarily? Is there substantial evidence that the company has received an offer to move to 91 another state or community that is amactive enough that a reasonable person would seriously 92 consider a move for business reasons? What potenrial negative effect would the subsidy have 93 on other competing businesses and overall area job quality? 94 95 96 97 12. 98 99 D. Will the proj ect uniquely affect the property ta�c base for all tasing jurisdictions, both short and long term, and both directly and indirectly? How will the project affect other local business and individual property tas bills? Any subsidy agreement subject to MN Statute 116J.993-995 must be approved by the local elected governing body. * �� _ � � �n The following forms of financial assistance aze not a business subsidy: (1) a business subsidy of less than $25,000; qg �-� y � (2) assistance that is generaliy available to all businesses or to a general class of similaz businesses, such as a line of business, size, locarion, or sunilar general criteria; (3) public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) redevelopment property polluted by contamivants as defined in secrion 116J.552, subdivision 3; (5) assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code, provided that the assistance is equal to or less than 50 percent of the total cost; 6) assistance provided to organizations whose primary mission is to provide job readiness and training services if the sole purpose of the assistance is to provide those services; 7) assistance for housing; (8) assistance for pollution control or abatement; (9) assistance for energy conservation; (10) tas reduc6ons resulting from conformity with federal tas law; (11) workers' compensation and unemployxnent compensation; (12) benefits derived from regularion; (13) indirect benefits derived from assistance to educational institutions; (14) funds from bonds allocated under chapter 474A; (15) assistance for a collaboration between a Minnesota higher education institution and a business; (16) assistance for a tax increment financing soils condition district as defined under section 469.174, subdivision 19; (17) redevelopment when the recipienYs inveshnent in the purchase of the site and in site prepararion is 70 percent or more of the assessor's current year's estimated market value; and (18) general changes in tas increment financing law and other general ta�c law changes of a principally technical nature. ��,q� ^�oject Name . -roject Address Cify Contact _ PUBLIC PURPOSE SUMMARY � Account # Today's Date PUBLIC COST ANALYSIS Track # _ . � qq-��- '+ Total Loan Subsidy: Praent value of the loan over iu life, inciuding er.pected loss of principal and intuat rate subsidy. PUBLtC BENEFIT ANALYSIS (Mark "1 " for Primary Benefits and "2" for Secondary Benefzts) i. Community Development Benefits . , : : ;, . ,.. , .: .. <. - ' °' ReinoveBlight/PolIution :r ;�:.:;>': Imp"rode:Health%Safe /Secuii ° Inciease/Mairitairi_Ta�Bzse::.i." tY LY ' Rehab. Vacant Stru'crure i PublicImproyements ` r'' �rrent nx pro3ucuon , <.. . -. . , < - ,. :::.. :, ;. . . . ;>:a:. ess'd iaxes u'builr.::. ' Remove Vacant Str'uctdre , Goods `SC Semces Availability: `':. nei iax chmoe'+':oi�-: .. ... > ., . :.:..:.. .: :. ..:.' .. . .{ .M�. :.' ;.t D_y� n ' t . e: .' , ".: i . . . . . . .. ..: ...i �. � �L �' .� � . +. . .. '�..i.t : .. . ... <.... .. ... . .:...... .. :� : . , i i.: '.-�' i 5. . :.i:�e:::.:.:. _/. �.�.:.: ...,�:�:' Herita e Preservauoii`:�?' ^ " ` Muntaui Tax Base :?:::< :::,;. , .:..°._ °,, :; ` _ ::�:< . .:.:.. , .. .�;:� :> .. : , : Il. Economic Development Benefits ` Provide? Iti. Housing I i-T_ :.— IV. Job � : Benefits hip Stock^, � 5; e (:onetand�iobslewicriteria for cw Revised7-28-99 /* � tOLLOW-UP.tROM LOAN ,ERVICING t'ROCESS `i`��`1�{�. "aar:5`Folloiv-U '4::: ;,>:.€:>:'=; ,p . ...... ... ,...,,. rublic Purpose Objectives 2v1et: [ ] Yes [:'.:.� No `� Deficiences: _ . . . PUBtPURPS[ft R<riud 5/2tl96 � In Part: [ `' ) No FOLLOW-UP ON �OB IMPACTS Copeland�jobskw\criteria for cw Revised7•28-99 P� ll Goals'Acliieced. � i � / I_��i►`1�7►�i7 TAX INCREMENT FINANCING Program Purpose: €'�� _� � �'- To defraysite development and landpreparation costsfor real estate developments. Tax increment ftnancing results in increased empZoyment, decreased blight, and a higher tax base. How It Works: The increase in real estate taxes generated by a specific development project is used to subsidize those improvements needed to begin a projecz One way to provide the subsidy is for the City to issue bonds backed by the projected property tax increase that the improved property will yield. Minimum Requirements: Project must be located in an approved Redevelopment Area and a designated tax increment district. The new construction of building rehabilitation must result in a significant increase in the property's tax base. Eligible Costs: Fees: Approval Process: Contact: Land acquisition, site preparation, and public improvements. Determined on a case by case basis. The City Planning Commission, Capital Improvement Budget Committee, the appropriate District Planning Council, the School District, and Ramsey County must review proposals to establish a tax increment district. The establishment of such a district must be approved by the Saint Paul Housing ad Redevelopment Authority (HRA) and the City council. Projects within a currently existing tax increment district are reviewed by the appropriate districtplanning council and the HRA. Saint Pau1 Department of Planning and Economic Development (PED), 651-266-6674. � � /�� / � Yeas Na s Absent Benanav �/ Blakey ✓ Bostrom � Coleman � Harris � Lantry � Reiter � � � Adopted by Council: Date � /yqq Adoption CemSed by Council Secretary � _� �{ 2-- Requested by Deparhnent of: � Form Approved by City Attorney , / ../ .� ��,.� � � / � ♦ / B y' `�-- Approved by Mayor for Submission to Council Approved by Mayor: Date ° 1��`I By: By: �'f/�/(, /� D & Economic Aug. 4, 199 TOTAL # OF SIGNATURE PAGES To allow us to adhere to the criteria_for awarding subsidies to businesses subject to the regulations and reporting requirements of the Minnesota Business Assistance Act. PLANNING CAMMISSION CIB CAMMITTEE CML SERVICE CAMMISSION DAiE1NR1ATFD 7/28/99 GREEN SHEET � �.,u,� �,� � �„�.. _ ❑ �..,,�. ❑ �„� ❑.n.,r,.�a�av�e�so.. ❑wuw�.,.�umr�cc.o ❑ rAVORtoR�iffirANr1 ❑ (CLIP ALL LOCATIONS FOR SIGNATURE) Has ihis GersoNfitm everwarked uMM e canhact fw �his depsrtmenl? VES NO Has ihis pe�sorJfirm ever been a dty anpbyee7 YES NO Ooes fhis 7��m P� a sidll not normallYW� M' any curtent ctilY emPbyee7 YES NO Is Mis pe�soNfirtn a targMetl ventloYt rES rio olain all ves a�e�s on senerate sheet arM attach to arcen sheet �Y) alq-'1`t�- No 62372' IFAPPROVED AMOUNT OF TRANSACTION CAST/REVRIUE BUDfiETED (CIRCLE ON� YES NO ACTNITY NUMBER Cour€� Research Ce�ter JUL �6��:� �lgl�i RESOLUTION PAUL, MINNESOTA Presentea Committee Date \ Resolution Authoriaing a Public Hearing and ,% Adopting Criteria for Awarding Business Subsidi�s that Comply with the 1999 Minnesota Business Subs}c�ies Law i 1 WHEREAS, the 1999 ' esota Legislature enacted Statute 116J.993-9fr5 setting requirements for subsidies 2 allocated to businesses by te or local government agencies; and f 3 WHEREAS, local government agencies including the Housing Redevelopment Authority of the City of 4 Saint Paul, Mivnesota (HRA) are charged with holding a public earing and adopting a set of criteria for 5 awazding business subsidies that comply with this statute; no therefore be it 6 RESOLVED, that the Housing and Redevelopment Au rity of the City of Saint Paul, Minnesota does hereby 7 set a public hearing for Wednesday, August 1 l, 1999, the following criteria; and be it 8 FURTHER RESOLVED, that the following c�teda be adopted. 9 CRITERIA �OR AWARDING 10 AND 11 MIl1 12 13 14 15 16 17 18 TO BUSINESS co�o�a Fae # 9 �- ��a s�bs Green Sheet # a R�e�.�,e�, SUBJECT TO THE REGULATIONS CS OF THE .NCE ACT A subsidy is defined as "state or loc�'government agency grant, co 'bution of personal property, real properry, infrastructure, the principa'1 amount of a loan at rates below th e commercially available to the recipient, any reducfion or deferrp7 of any tax or any fee, any guarantee of � payment under any loan, lease, or other obligation, or any pref�rential use of govemment facilities given to a business." To be subject to these requirements a subsidy must be $25,000 or more. Small businesses, as defined bi�Council File #94-1512, are exemnt from the livine wape reauirement. Eighteen excepfions to these requirements are set out in the legislafion and are attach� hereto as Appendix A. 19 1. A business s sidy must have a defined public purpose as shown in the Public Purpose Suimnary that 20 accompani s projects going to PED Credit Committee, City Council, and the I�RA. Increasing the taY 21 base may ot be used as a public purpose under MN Statute 116J.993-995 nor can job retention be used 22 as a public purpose unless "job loss is imminent and demonstrable." The Public Purpose Sumuiary (see 23 Appendix B) must also show any job crearion or retenfion goals established including the proposed 24 wages and benefits broken down by wage level. 25 2. Applicant must be a business located in or moving into the city limits of the City of Saint Paul. This 26 includes not-for-profit businesses with at least 100 full-time equivalent positions (FTEs) and with a �tq�,� z� 28 3. 29 30 4. 31 32 33 5. 34 6. 35 36 7. 37 ratio of highest to lowest paid employee that exceeds ten to one. �9��a Proposals for direct loans must first attempt and be unable to obtain private financing before applying for city funding. Proposals can be for any business purpose. Except refinancing of existing debt other than HRA/City debt is not done unless it will improve the City/HRA collateral position or the re ayment ability of City/HRA loans. Loan guarantees must have participarion by a private lender to assume at ast 50% of risk. Any proposal to urilize STAR funds must be eligible under the City and must be awarded the funds through the approved STAR proces,s Proposals to urilize Tax Increment Financing must be for land improvements and must follow the taac increment approval pr�' adopted STAR guidelines, >ition, site prepazation, and public (See Appendix C). 38 8. Business subsidies in the form of grants must be structur as forgivable loans or else the agreement 39 must state the fair market value of the subsidy to the re pient, including the value of conveying 40 property at less than a fair mazket price, or other in- d benefits to the recipient. 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 9. Recipient must be willing to enter into a subsidy greement that includes: (1) a description of the subsidy, including the ount and type of subsidy, and type of district if the subsidy is taY increment financing; (2) a statement of the public purposes for subsidy; (4) goals for the subsidy to be achie ed within two years of the benefit date, including goals for the number of fu11-6me and/or part- ' e jobs created and wage and benefit goals that meet a11 City of Saint Paul ordinances and resolurions gazding business subsidy wage and job goals. In cases where job loss is imminent and demonstr le, goals for the number of jobs retained and wage goals for jobs created or retained must be � luded. (10) a d eription of the finazicial obligation of the recipient if the goals aze not met; (11) a tement of why the subsidy is needed; (12) commirinent to continue operations at the site where the subsidy is used for at least five years r the benefit date; ( 3) the name and address of the parent corporation of the recipient, if any; and 2 �� q. ��l A' 69 (14) a list of all financial assistance by all grantors for the project. �� ) �'�" 70 10. 71 ! 72 73 74 75 76 77 78 :1 . : : :- Preference will be �iven to auulicants mee � the followin� ctiteria: (11 a demonstrated hi er target nercenta�e of hires for Saint Paul residents; 1 l. In awazding a business subsidy, City Council/HRA Boazd will consi er: A. In what ways the project improves the mix of businesses ' e area so as to allow the area to participate in fast-growing industries; protect azea from verse economic consequences caused by slow growth or declining industries that are domin t in the area; and provides essential constuner services or develops a network for busines es of local suppliers that do not currently e�st in the area. 85 B. How many new jobs will be created and at wh pay? How do proposed wages compare to 86 community wage levels? Will some jobs hav opportunities for career advancement, education, 87 or occupational training? Are there job gr projections for the project over the next 2-5 88 yeazs? Are there fringe benefits availab and what aze they? 89 C. If job loss is imminent is there subs tial evidence that the company will have to shut down 90 involuntarily? Is there substanrial idence that the company has received an offer to move to 91 another state or community that ' attractive enough that a reasonable person would seriously 92 consider a move for business r ons? What potential negative effect would the subsidy have 93 on other competing business and overall area job quality? 94 D. Will the project uniquely ect the property ta�c base for all ta.zing jurisdicrions, both short and 95 long term, and both dir tly and indirectly? How will the project affect other local business and 96 individual property bills? 97 12. 98 99 Any subsidy agreement s �ect to MN Statute 116J.993-995 must be approved by the local elected governing body. 3 _��_►� , - The following forms of financial assistance aze not a business subsidy: (1) a business subsidy of less than $25,000; (2) assistance thatis generally available to all businesses or to a general class of as a line of business, size, location, or similaz general criteria; � ��'� businesses, such (3) public improvements to buildings or lands owned by the state or local vernment that serve a public purpose and do not principally benefit a single business or defined gro p of businesses at the time the improvements aze made; (4) redevelopment property polluted by contaminants as defined � secrion 116J.552, subdivision 3; (5) assistance provided for the sole purpose of renovating old or deca ' g building stock or bringing it up to code, provided that the assistance is equal to or less than 50 percent of th total cost; 6) assistance provided to organizafions whose prunary mission to provide job readiness and training services if the sole purpose of the assistance is to provide those servic ; 7) assistance for housing; (8) assistance for pollution control or abatement; (9) assistance for energy conservation; (10) taac reductions resulting from conformity (11) workers' compensation and (12) benefits derived from regulation; (13) indirect benefits derived from (14) funds from bonds allocated (15) assistance for a (16) assistance for a taY 19; (17) redevelopment or more of the assey (18) general nature. federal taac law; compensation; to educational institutions; chapter 474A; between a Minnesota higher education insritution and a business; financing soils condirion district as defined under section 469.174, subdivision � the recipienYs inveshnent in the purchase of the site and in site prepazation is 70 percent current year's esrimated market value; and in taY increment financing law and other general t� law changes of a principally technical APPENDIX B '1 .'1 � 2-- APPENDIX C TAX INCREMENT FINANCING Program Purpose: To defray site developmentand land preparation Tax increment financing results in increased em higher tax base. ��J �al estate developments. decreased blight, and a How It Works: The increase in real estate taxes generated by a s cifzc development project is used to subsidize those improvements needed to begin a oject. One way to provide the subsidy is for the City to issue bonds backed by the rojected property tax increase that the improved property will yield. Minimum Requirements: Project must be located in an a roved Redevelopment Area and a designated tax increment district. The new nstruction of building rehabilitation must result in a significant increase in the roperty's taz base. Eligible Costs: Fees: Approval Process: Contact: Land acquisition, site Determined on and public improvements. by case basis. The City PI nning Commission, Capitad Improvement Budget Committee, the appropriat District Planning Council, the School District, and Ramsey County must revi proposals to establish a tax increment district. The establishment of such a istrict must be approved by the Saint Paul Housing ad Redevelopment Autho ity (FIRA) and the Ciry council. Projects within a currentdy e;cisting tczc incr ment district are reviewed by the appropriate districtplanning council and the H . Saint Paul Department of Pdanning and Economic Development (PED), 651-266-6674. G� ��J� Yeas Nays Absent Benanav Blakey Bostrom Coleman Harris Lantry Reiter Adopted Adoption B _ Approvec B Requested by Department of S - ` }+ 1 Council File # �_ 1� l�d� �� ` ` ` �'� �' ��a^""�` `��' gesolution # �1.. � mer�.�a � - - - - RESOLUTION Presented By Referred To Commi 1 WIIEREAS, the 1999 Minnesota Legislature enacted Statute ll f 2 subsidies allocated to businesses by state or local government agencies; 4 WHEREAS, local government agencies aze chazged with 5 of criteria for awarding business subsidies that comply with this 6 a9 e: Date setting requirements for ; a public hearing and adopting a set now therefore be it 7 RESOLVED that the Council of the city of Saint Paul oes hereby set a public hearing for Wednesday, 8 August 11, 1999, on the following criteria; and be it 9 10 FURTHER RESOLVED, that the following cri ria be adopted. 11 12 13 CRITERIA FOR AWARDING SUBSIDIES BUSINESSES SUBJECT TO THE REGULATIONS 14 AND REPORTIN REQUIREMENTS OF THE 15 MINNESOTA USINESS ASSISTANCE ACT 16 17 A subsidy is defined as "state or local govem ent agency grant, contribution of personal property, real property, 18 infrashucture, the principal amount of a lo at rates below those commercially available to the recipient, any 19 reduction or deferral of any tax or any fee, y guarantee of any payment under any loan, lease, or other obligation, or 20 any preferential use of government facili es given to a business." To be subject to these requirements a subsidy must 21 be $25,000 or more. Eighteen except� ns to these requirements are set out in the legislation and aze attached hereto 22 as Appendix A. 23 24 1 25 26 27 28 29 30 31 32 33 34 35 36 37 2. 3. A business subsidy must h e a defined public purpose as shown in the Public Purpose Summary that accompanies projects goi g to PED Credit Committee, City Council, and the HRA. Increasing the tas base may not be used as a public ose under MN Statute ll6J.993-995 nor can job retention be used as a public purpose unless ' job lo s is imminent and demonstrable." The Public Purpose Summary (see Appendix B) must also show any ' b creation or retention goals established including the proposed wages and benefits broken down by w ge level. Applicant mus e a business located in or moving into the city limits of the City of Saint Paul. This includes not-for-profi usinesses with at least 100 full-time equivalent positions and with a ratio of highest to lowest paid emplo e that exceeds ten to one. Green Sheet # C�rl( OF,SAINT PAUL, MINNESOTA � 1 '�� for direct loans must first attempt and be unable to obtain private fmancing before applying for city 38 4. Proposals can be for any business purpose. Except refinancing of existing debt other than IIRA/City debt will 39 40 41 5 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 not be done unless it will improve the City/I3RA collateral position ar the repayment ability of City/FII2A loans. `Iq �'��- Loan guazantees must have participation by a private lender to assume at least 50% of risk.. � Any proposal to utilize STAR funds must be eligible under the City Council adopted STAR must be awarded the funds through the approved STAR processes. and 7. Proposals to utilize Tas Increment Financing uses for tas uld be for all 8. Business subsidies in the form of grants must be structured as forgivable loans or se the agreement must state the fair mazket value of the subsidy to the recipient, including the value of con eying property at less than a fair market price, or other in-kind benefits to the recipient. 9. Recipient must be willing to enter into a subsidy agreement that includes (1) a description of the subsidy, including the amount and type of subs' y, and type of district if the subsidy is taY increment financing; (2) a statement of the public purposes for the subsidy; (3) goals for the subsidy to be achieved within rivo years of the b nefit date, including goals for the number of full-time and/or part-time jobs created and wage and benefit g ls that meet all City ordinances and resolutions regazding business subsidy wage and job goals. In cases wh e job loss is imminent and demonstrable, goals for the number of jobs retained and wage goals for jobs create or retained must be included. (4) a description of the financial obligation of the recipie if the goals are not met; (5) a statement of why the subsidy is needed; (6) a commihnent to continue operations at the site w ere the subsidy is used for at least five years after the benefit date; (7) the name and address of the parent corporatio of the recipient, if any; and (8) a list of all financial assistance by all granto for the project. 10. In awarding a business subsidy, City Counc' Board will consider: A. In what ways the project improve e mix of businesses in the area so as to allow the area to participate in fast-growing industries; prote area from adverse economic consequences caused by slow growth or declining industries that aze do inant in the azea; and provides essential consumer services or develops a netwark for businesses of 1 cal suppliers that do not currently exist in the area. B. How many new jobs will e created and at what pay? How do proposed wages compare to community wage levels? Will some obs have opporhxnities for career advancement, education, or occupational training? Are there jo growth projections for the project over the next 2-5 years? Are there fringe benefits available a what are they? C. If job loss is im nent is there substantial evidence that the company will have to shut down involuntarily? s there substantial evidence that the company has received an offer to move to another state or com iTy that is attractive enough that a reasonable person would seriously consider a move for busines reasons? What potential negative effect would the subsidy have on other competing businesse and overall area job quality? D. Will t project uniquely affect the property tas base for all tasing jurisdictions, both short and long te and both directly and indirectly? How will the project affect other local business and individual pr erty tas bills? 11. Any s�i5sidy agreement subject to MN Statute 116J.993-995 must be approved by the local elected governing 91 92 93 94 95 96 97 98 99 100 „ �► , The following forms of financial assistance aze not a business subsidy: (1) a business subsidy of less than $25,000; (2) assistance that is generally available to all businesses or to a general cIass of similaz business, size, location, or similaz general criteria; 101 (3) public improvements to buildings or lands owned by the state or local government that 102 do not principally benefit a single business or de£med group of businesses at the time thej 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 (4) redevelopment properry polluted by contaminants as defined in section 1 (5) assistance provided for the sole purpose of renovating old or decaying bc provided that the assistance is equal to or less than 50 percent of the total co: 6) assistance provided to organizations whose primary mission is to provi sole purpose of the assistance is to provide those services; 7) assistance for housing; (8) assistance for pollution control or abatement; (9) assistance for energy conservation; (10) tax reductions resulting from conformity with (11) workers' compensation and unemployment (12) benefits derived from regulation; (13) indirect benefits derived from (14) funds from bonds allocated under (15) assistance for a collaboration (16) assistance for a tax taac law; educational institutions; 474A; ��-� as a line of a pubiic purpose and �ements aze made; 3; stock or bringing it up to code, job readiness and training services if the a Minnesota higher education institution and a business; soils condition district as defined under section 469.174, subdivision 19; (17) redevelopment when the r cipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's curren yeaz's estimated market value; and (18) general changes in increment fmancing law and other general taz law changes of a principally technical nature. ^�oject Name , roject Address Cify Contact - A.PPENDIX B PUBLIC PURPOSE SUMMARY - Account# _ Today's Date . PUSLIC COST ANALYSIS � Track # _ �Iq '� Total Loan Subsidy: Present value oE the loan over ics life, including expecce oss of principal and interest race subsidy. PUBUC BENEF(T ALYSIS (Mark "1 " for Primary .8enefits and ' 2" for Secondary Benefits) 1. Community Development Benefits ... . ... _ -::: .. .., : ,. _ . ,_... '` Remove Blight/Polluuon .<<>> : Improve Health% fe lSecu"ri Increase/Maintairi �Ta� Base.;;°: � LY : tY %. curient cax pro3uction: " Rehab. Vacant Structure `: Public Improv' ents •';'.. esi d caxes as built::: Reinove Vacant Scructtire :; :`::' Goods`& Se 'ces Ayailability: ",'; . ne� iax chanoe�+';.oc-: ; ' _. „ _ . ....,.: . ., ..<.,: �. .,:..: .:. ,,:. .,. .. :. a . ' Heritage'Preserdation;::- ' `" MainEain: axBase':�:'<.;'`:::;<` ``: "<3�`i` Il. Economic Development Benefits :....: ,..::� ...:.::..:.:: �::..;a:; _�: :..:r�°:. ;.:. ;:.. °..;.:::.:_;. •::._ >:,:. , ' Suppon Yiralitq of Industry,�� :` Create Local Businesses ' Gererare Pnvate Invescment s.Stab�lizeNLarket �!alue , .:� Recauz Ltical$unnesses - Support Commer.,csal Acndity F. ( ' � Provide Self-Empti Ilf. Ho using Develop� Iricrease Ho'ine Oy ^�'. �.�# uniu new.consti !V. Job � a ; � Iricr. ti�!ome: : <, Needs":=`: _..,. Iv e Welfare ' �'�.`t'R:i:'� Y ear,� :, .. �:`:'�i ;>z . :;'^;� _"; .. �;�?x«�'`.'':� � ;az 5 ' � FOLLOW-UP.�ROM LOAN SERVICING PROCESS t�q-1`�� .... . Year. 4 ;Follow-Up . Dace - :: . PublicPurposeOb�ecnvesMet ( _.V]Yes [ _]No [ .]InPait,[ .]No` ;ngerApphcablelAllGoalsAclueved Defic'iences: ` _: _ va .. ,::::;�::.' Dacec'<,`..::: , ar:5 °Follow-Up rublic Purpose Objectives Mer. [ ] Yes [ } I�?o ['� :] In Pa [ } No Longer Applica6lelAll Goals Achieced I Deficiences: _ _ _ FOLLOW-UP [. ]NOJOB�TMPACT " ti OBS CREATED fulltim � erm _ i. tYvera _ ,_. _ .:: rGonst " tio`ri/Tem � � PUBIPURP.SCiI Rcvised 5/22/96 �1 �OB IMPACTS 3 .of :Year_Follow,Up.'Inforinatio �� Year 1'; Year.;2 Year 3 e� r� _ :ual Results):;% ar 4 Year 5 � .....'_� �._. .< Copelandljobs\cw\criteria for cw Revised7-28-99 5 i4i 142 APPENDIX C q`�,'1�12' 143 144 145 TAX INCREMENT FINANCING 146 147 Program Purpose: To defray site development and land preparation costs for real state 148 developments. Tax increment fznancing results in increased ployment, 149 decreased bZight, and a higher tax base. 150 151 152 How It Works: The increase in real estate taxes generated by a spe c development project is 153 used to subsidize those improvements needed to be in a project. One way to 154 provide the subsidy is for the City to issue bonds acked by the projected 155 property tax increase that the improved prope will yield. 156 157 158 Minimum Requirements.• Project must be Zocated in an approved edevelopment Area and a designated 159 tc� increment district. The new constr ction of building rehabilitation must 160 result in a significant increase in the roperty's tax base. 161 162 163 Eligible Costs: Land acquisition, site prepara on, and public improvements. 164 165 166 Fees.� Determined on a case by ase basis. 167 168 169 Approval Process: The City Planning ommission, Capital Improvement Budget Committee, the 1 �0 appropriate Distr' t Planning Council, the School District, and Ramsey County 171 must review pro osals to establish a tax increment district. The establishment of 172 such a district ust be approved by the Saint Paul Housing ad Redevelopment 173 Authority (H ) and the City council. Projects within a currently existing tax 1 �4 increment strict are reviewed by the appropriate distr•ict planning council and 175 the HRA. 176 177 178 Contact: Sain Paul Department ofPlanning and Economic Development (PED), 651- 179 26 -6674. G ��,�� Coleman Adopted by Council: Date Requested by Department of: Plannina & Economic Development By: Foxm Approved by City Attamey Adoption Certified by Counrfil Secretasy BY� BY: Approved by Mayor: By: Approved by Mayor for Submission to Council By: 7 OR�GiNAL Green Sheet # �e�3� � 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Presented By Re£erred To Council File # 1�� t�a Resolution # Committee -1 Date 4y WHEREAS, the 1999 Minuesota Legislature enacted Statute 116J.993- 5 setting requirements for subsidies allocated to businesses by state or local govemment agencies; and WHEREAS, local government agencies are charged with hold' public hearing and adopting a set of criteria for awarding business subsidies that comply with this statut , now therefore be it RESOLVED that the Council of the city of Saint Paul does�'fereby set a public hearing for Wednesday, August ��, 1999, on the following criteria; and be it � FURTHER RESOLVED, that the following criteria adopted. CRITERIA FOR AWARDING SUBSIDIES TO B INESSES SUBJECT TO THE REGULATIONS AND REPORTING RE UIREMENTS OF THE MINNESOTA BUS ESS ASSISTANCE ACT A subsidy is defined as "state ar local government infrastruchue, the principal amount of a loan at rat reduction or deferral of any tazc or any fee, any any preferential use of govemment facilities giv n be $25,000 or more. Eighteen exceptionsto esE as Appendix A. � ncy grant, contriburion of personai property, real properry, below those commercially available to the recipient, any rantee of any payment under any loan, lease, or other obiigation, or to a business." To be subject to these requirements a subsidy must ; requirements are set out in the legislation and are attached hereto A business subsidy must ha�e a de ned public purpose as shown in the Puhlic PurQose Summary that accompanies projects going to P Credit Committee, City Council, and the F3RA. The Public Purpose Summary (see Appendix B) m t also show any job creafion or retention goals established including the proposed wages and benefits oken down by wage level. 2. Applicant must be a busine s located in or moving into the city limits of the City of Saint PauL This includes not-for-profit businesses ith at least 100 full-time equivalent positions and with a ratio of highest to lowest paid employee that exc ds ten to one. 3. Proposals for direct ans must first attempt and be unable to obtain private fmancing before applying for city funding. 4. Proposals can U for any business purpose. Except refmancing of existing debt other than HRA(City debt is not done unless i iil improve the CityfHRA collateral position to the repayment ability of CityfIlRA loans. RESOLUTION CITY OF SAINT PAUL, MINNESOTA Copeland\jobs\cw\crheria for cw Revised7-28-99 1 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 5& 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 5. Loan guarantees must have participation by a private lender to assume at least 50% of risk.. �� `' 6. Any proposal to utilize STAR funds must be eligible under the City Council adopted STAR guidelines, and must be awarded the funds through the approved STAR processes. 7. Proposals to utilize Taz Increment Financing must be for land acquisition, site preparation, and public improvements and must follow the tazc increment approval process. (See Appendix C). 8. Business subsidies in the form of grants must be structured as forgivable loans or else the agreement ust state the fau mazket value of the subsidy to the recipient, including the value of conveying property at le than a fair market price, or other in-kind benefits tp the recipient. 9. Recipient must be willing to enter into a subsidy agreement that includes: (1) a description of the subsidy, including the amount and type of subsidy, and type of ta�c increment financing; (2) a statement of the public purposes for the subsidy; if the subsidy is (3) goals for the subsidy to be achieved within two years of the benefit date, includ' goals for the number of full-time and/or part-time jobs created and wage and benefit goals for those jobs. n cases where job loss is imminent and demonstrable, goals for the number of jobs retained and wage go s for jobs created or retained must be included. (4) a description of the financial obligation of the recipient if the goals are t met; (5) a statement ofwhy the subsidy is needed; (6) a commitment to continue operations at the site where the subsidy i used for at least five years after the benefit date; (7) the name and address of the pazent corporation of the recipient, ' any; and (8) a list of all financial assistance by all grantors for the project. 10. In awazding a business subsidy, City CouncillfiRA Boazd wi consider: A. In what ways the project improves the mix of busi sses in the area so as to allow the area to participate in fast-growing industries; protect azea from adv se economic consequences caused by slow growth or declining industries that aze dominant in the ar ; and provides essential consumer services or develops a network for businesses of local suppliers t do not currenUy exist in the area. B. How many new jobs will be created and what pay? How do proposed wages compaze to community wage levels? Will some jobs have opp nities for cazeer advancement, education, or occupational training? Are there job a owth proje ions for the project over the next 2-5 years? Are there fringe benefits a�ailable and what aze thev. C. If job loss is imminent is there bstantial evidence that the company will have to shut down involuntarily? Is there subs ial evidence that the company has received an offer to move to another state or community that is a active enough that a reasonable person would seriously consider a move for business reasons? Wh potential negative effect would the subsidy have on other competing businesses and overall ajob quality? D. Will the project term, and both c property tas bill ly affect the property taY base for ail taxing jurisdictions, both short and long and indirectly? How will the project affect other local business and individual Copeland\jobs\cw\criteria for cw Revised7-28-99 2 86 s� ss 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 I15 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 APPENDIX A The following forms of fmancial assistance are not a business subsidy: (1) a business subsidy of less than $25,000; ° -��' (2) assistance that is generally available to a11 businesses or to a general ciass of sunilaz businesses, ch as a line of business, size, location, or similaz general criteria; (3) public improvements to buildings or lands owned by the state or local govemment that se e a public purpose and do not principally benefit a single business or defined group of businesses at the tune the ' provements are made; (4) redevelopment property polluted by contaminants as defined in section 116J.552, (5) assistance provided for the sole purpose of renovating old or decaying buil provided that the assistance is equal to or less than 50 percent of the total cost; 6) assistance provided to organizations whose primary mission is to sole purpose of the assistance is to provide those services; 7) assistance for housing; (8) assistance for pollution control or abatement; / (9) assistance for energy conservation; (10) tax reductions resulting from conformity with federal (11) workers' compensation and unemployment comp a (12) benefits derived from regulation; (13) indirect 6enefits derived from assistance to ucatiom (14) funds from bonds allocated under (15) assistance for a collaboration (16) assistance for a tax increment (17) redevelopment when the more of the assessor's current (18) general changes in tax nature. 74A; law; institutions; � or bringing it up to code, readiness and training services if the Minnesota higher education institution and a business; soils condition district as defined under section 469.174, subdivision 19; �iYs investment in the purchase of the site and in site preparation is 70 percent or estimated mazket value; and fmancing law and other general tas law changes of a principally technical Copeland\jobs\cw\criteria for cw Revised7-28-99 Project Name Project Address City Contact _ APPENDIX B PUBLIC PURPOSE SUMMARY Account # Today's Dafe PUBLtC COST ANALYSIS Track # °lq -14 �- IrcCerestRate : = SubndzzedRazr j ]Yes `j �No.; [.: JN/A Type Loan RislcI�aung Accepta6Ie�5°/�res� Substandard€IQ°! )�Loss(S0�°Iozes� [ . Grant Doubtful 5Q%;res For vabie 1fl fnr'es , � , � .. _ :: � - _' . . � _.: � : ': - Tora1 Laan Snbsid '� '` "i`otal P xo"eae Cosc : '° Total Loan Subsidy: Present value of the loan over iu life, including expeae oss of principal and interest rate subsidy. PUBLIC BENEFIT A ALYSIS (Mark "1 " for Primary Ben�ts and "" for Secondary Benefits} I. Community Development Benefits Remove Blight{Polluiion " Improve HealthlS _ etyfSecuriry .. : IncreaselMairitairi Tax Base ' Rehab: Vacant Structure `. . Public Improve rits • '��t Lax producuon:, Remove Vacant Structure Goods & Se ' es A�ailabali ' esi'd ca�ces at built: � � ; � net fax change -t or Herita e'Preservation Maint�n T :Base ff. Economic Development Benefits Suppori: Vitality of 3nduscry ,: reaee I.ocal $usinesses Generate 3'rzvate Tuve�cment . S.ra6ilize Markes value etain F:ocal Businesses%. Suppozc Commercial _Activny :' Provide5elf $ncour2�e�ri[reo'shin �ncr.'IX�nmenlll%1�nnnrv$usinesses ift. Housing Development Benefits Increase Home Otivnership 5toc Addr.ess_Special I3ousing Needs:: ., -�•� unics new conscrutuon ; Retain.Hoirae O in City '; � # unics canvers�on:_ �ffarz�able Housin iV. Job lmpaCts ivin Wa e a lies [ Co orate Welfare A , _- - , ::.. _ . . _ _. I: 1 ob Im act ; [:� No ol�. Ir. _ �` O&S REAT6F� Eulltime: e� tYtiera �Caustrucubnl`.I'ei `� OBS�E7`117NEI� �lume:' er' �€ O�SLoST` �ullnnte<� ex Copeland\jobs\cw\criteria for cw Revised7-28-99 3-- � 1'ear 4:": I'ear 5. FOLLOW-UP FROM LOAN SERVICiNG PROCESS °lq -'14 a- Year 3 Fbltoinr Up Daie Pubkc �'ur�ose Ob�ectiyes Met - j _� 1'es "[ J No [` 1 Tn Pazt [) l�i� Lbnger Apphcablef AfI GoaIs 1lcfueved " Deficfences: '_ . s :; , . , Year 4 Foliow-Up . Date : Public Purpose Objectives 3YIet: {- J�Yes [ � f�to ,[ Part [` l Na Longer Applicablelt�lI Goafs Acluevecl D'eficiences: _ . Year 5 Foltow-i3p Date: Public Purpose Objectives'Met: [ 7 Yes [ No [' i' ] Tn Part [ ] No Lqnger ApplicablelAll Goals Achieved. Deficiencer. __ ' • . UP ON �OB IMPACTS � �rro JqB iivr�ACr . _ P�r:,..�,,, ;�` rvBU�c�rsrx x�v�a sizvvs / End of YearFollow-I.Fp Information (Actual Results) Year 1 Year 2 Year 3 Year 4 Year 5 me ermanerit < Avera e Wa e 3n/Tem ora ^ : : :.': dz� ermanent) Copeland\jobs\cw\criteria for ew Revised7-28-99 5 136 137 138 139 140 141 142 Program Purpose: 143 144 145 146 147 How It Works: 148 149 150 151 152 153 Minimum Requirements: 154 155 156 157 158 Eligible Costs.• 159 160 161 Fees: 162 163 164 ApprovalProcess: 165 166 167 168 169 170 171 172 173 Contact: 174 APPENDIX C TAX INCREMENT FINANCING To defray site development and Zand preparation costs developments. Tax incrementfznancingresults in incr� decreased blight, and a higher tax base. / �q.�y�- aL estate employment, The increase in real estate taxes generated by specific development project is used to subsidize those improvements neede to begin a project. One way to provide the subsidy is for the City to issue onds backed by the projected property tax increase that the improved roperty will yield. Project must be located in an ap oved Redevelopment Area and a designated tca increment district. The new construction of buidding rehabilitation must result in a significant increas an the property's tax base. Land acquisition, site Determined on a and public improvements. by case basis. The City Pla ning Commission, Capital Improvement Budget Committee, the appropriat District Planning Council, the School District, and Ramsey County must revi proposals to establish a tcrx increment district. The establishment of such a strict must be approved by the Saint Paul Housing ad Redevelopment Autha ty(HRA) and the City council. Projects within a currently existing tax incr ent district are r by the appropriate district planning council and Saint Paul Department of Planning and Economic Development (PED), 631- 266-6674. Copeland\jobs\cw\criteria for cw Revised7-28-99 6 �lg-��t�-- Coleman Requested by Department of: Planninc & Economic Develo ment BY: � ` � Form Approved by City Attomey Adopted by Council Date • �// ".� �� y ��" Adoption Certifi�.d by Council 5ecretary BY� -�t� �• '�"'� L. BY: Approved byQKayor: Date By: Copeland\jobs\cw\criteria for cw Revised7-28-99 � Approv 39 40 41 42 43 44 45 46 4? 48 49 50 51 52 53 54 55 56 57 S8 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 sz 83 84 85 5. I,oan guarantees must have participation by a private lender to assume at least 50% of risk.. �� y ' 6. Any proposal to utilize STAR funds musc be eligible under the CiTy Council adopted STAR guidelines, must be awazded the funds through the approved STAR processes. • - skourd �E �Orp�f((e��l(c� Perrxi�l'ec�uses(�m tax� 7. Proposals to utilize Tas Increment Financing� a � iAaasnurmPnte �i +6' 1 -__ _ _.,, _.� ., �ce_ ♦ ,1' - l+ / �[W �u�'1'(O ( "i'Y Y \ �'P�°aR l 8. Business subsidies in the form of grants must be structured as forgivable loans or else the eement must state the fair mazket value of the subsidy to the recipient, including the value of conveying pr erty at less than a fair market price, or other in-kind benefits to the recipient. 9. Recipient must be willing to enter into a subsidy agreement that includes: (1) a description of the subsidy, including the amount and type of subsidy, and e of district if the subsidy is taY increment fmancing; (2) a statement of the public purposes for the subsidy; (3) goals for the subsidy to be achieved within rivo years of the benefit dat , including goals for the number of full-time and/or part-time jobs created and wage and benefit goals for th se jobs. In cases where job loss is imminent and demonstrable, goals for the number of jobs retained an age goals for jobs created or retained must be inc]uded. (4) a description of ihe fmancial obligation of the recipient if the (5) a statement of why the subsidy is needed; (� a commitment to continue operations at the site where the ul benefit date; (7) the name and address of the pazent corporation of the cipie� (8) a list of a11 financial assistance by all grantors for th project. aze not met; is used for at least five yeazs after the if any; and 10. In awarding a business subsidy, City Council/HRA oazd will consider: A. In what ways the project improves the mi of businesses in the azea so as to allow the axea to participate � in fast-growing industries; protect azea om adverse economic consequences caused by slow gowth or declining industries that aze dominan n the area; and provides essential consumer services or develops a network for businesses of local s pliers that do not currently exist in the azea. B. How many new jobs will be cre ed and at what pay? How do proposed wages compare to community wage tevels? Will some johs ve opportuniries for career advancement, education, or occupational training? Are there job gro projections for the project over the next 2-5 years? Are there fringe benefits available and wh are they? C. If job loss is imminen s there substantial evidence that the company will have to shut down involuntarily? Is the e substantial evidence that the company has received an offer to move to another state or communi that is ariractive enough that a reasonab]e person wouSd seriously consider a move for business reas s? What potential negative effect would the subsidy have on other competing businesses and verall azea job quality? D. Will the pr 'ect uniquely affect the property talc base for all taxing jurisdictions, hoth short and long term, and oth directly and indirectly? How will the project affect othez local business and individual property bills? � Copetand\jobs�cw\criteria for cw Revised7-28-99 ORIG�NAt Council Fi2e # �iQ � �� v� Resolution # Green sheet # �e?3� 3. � 2 3 4 5 6 7 8 9 10 11 12 23 Presented By RESOLUTION CITY OF SAtNT PAUL, MINNESOTA 4y Referred To Committee: Date WFIEREAS, the 1999 Minnesota Legislature enacted Staiute I 16J.993-995 setting requirements for subsidies allocated to businesses by state or local government agencies; and WFiEREAS, local govemment agencies aze ckiarged with hoiding a public hearing and adopting a set of criteria for awazding business subsidies that comply with this statute; now therefore be it RESOLVED that ttie Council of the city of Saint Paui does hereby set a public hearing for Wednesday, August f�, 1999, on the following criteria; and be it FURT'HER RESOLVED, that the following criteria be adopted. C.RITERIA FOR AWARDING ST7BSIDIES TO BUSINESSES SUBJECT TO T'HE REGULATIONS � 16 17 A snbsidy is de£med as "state or local govemment agency grant, contriburion of personal property, real property, 18 infrastructure, the principa] amounY of a loan at rates below those commercially available to the recipient, any 19 reducrion or deferral of any tax or any fee, any guarantee of any payment under any loan, lease, or other obiigation, or 20 any preferenrial use of government facilities given to a business." To be subject to these requirements a subsidy must 2 2 be $25,000 or more. Eighteen excep6ons to these requirements aze set out in the legislafion and are a4tached hereto 22 as Appendix A. 23 24 i. 25 26 27 28 29 2. 30 31 32 33 3. 34 35 36 4_ � AND REPORT'ING REQUIItEMENTS OF THE MIlYNESOTA BUSINESS ASSISTANCE ACT A business subsidy must have a defined p¢btic purpose as shown in the Public Purpose Summary that accompanies projects going to PED Credit Committee, City CounciI, and the HItA. The Public Purpose Summary (see Appendix B) must also show any job crea4on or retention goals established including the proposed wages and benefits broken down by wage level. Applicant must be a business tocated in or moving into the city Iimits of ffie City of Saint Paul. Tlus includes not-for-profit businesses with at Ieast 100 full-time equivalent posirions and with a rario of lughest to lowest paid employee that exceeds ten to one. Proposals for direct Ioans must fust attempt and be unable to obtain private financing before applying for city funding. Proposals can be for any business purpose. Except refinancing of existing debt other than FIRA/City debt is not done unless iY will improve the CiTy/HRA collateral position to the repayment ability of City/E�2A loans. Copeland\jobs\cw\criteria for cw Revised7-28-99 � :�b S +;-t-�.�� R�.as , ia�� Councit File # �q - �� Green Sheet # RESOLUTION Al�1T PAUL, M1NI�ESOTA Presented by Referred To Date Resolution Authorizing a Public Hearing and Adopting Criteria for Awarding Business that Comply with the 1999 Minnesota Business 1 WHEREAS, the 1999 Minnesota Legislature enacted Statute 116J.993 2 allocated to businesses by state ar local govemment agencies; and 3 WHEREAS, local government agencies including the Housing and 4 Saint Paul, Minnesota (HRA) are charged with holding a public hea 5 awarding business subsidies that compiy with ttus statute; now th� Law requirements for subsidies evelopment Authority of the City of and adopting a set of criteria for be it 6 RESOLVED, that the Housing and Redevelopment Authori of the City of Saint Paul, Minnesota does hereby 7 set a public hearing for Wednesday, August ll, 1999, on following criteria; and be it 8 FURTHER RESOLVED, that the following criteria b�adopted. CRITERIA FOR AWARDING 10 11 AND REPOR' MINNE50T BUSINESSES SUBJECT TO THE REGULATIONS REQUIREMENTS OF THE ASSISTANCE ACT 12 A subsidy is defined as "state or local 13 infrastructure, the principal amount of 14 reduction or deferral of any tax or any 15 obiigarion, or any preferential use o g 16 requirements a subsidy must be $,0( 17 and the investment in housin� re uirei 18 exceptions to these re 19 1. A business st 20 accompanies 21 base may not 22 as a public pti 23 Appendix B�j' 24 wages and�Iie �y�rnment agency grant, contribution of personal property, real properiy, �oan at rates below those commercially availabie to the recipient, any e, any guazantee of any payment under any loan, lease, or other ernment facilities given to a business." To be subject to these or mare. 5ma11 businesses are exempt from the living waee requirement nt found in the reciroient r uirements section of this criteria. Eighteen are set out in the legislation and are attached hereto as Appendix A. �sidy ust have a defined public purpose as shown in the Public Purpose Suinmary that �ro' cts going to PED Credit Committee, City Council, and the HRA. Increasing the tax b used as a public purpose under MN Statute 116J.993-995 nor can job retention be used ose wiless "job loss is imminent and demonstrable." The Public Purpose Summary (see must also show any job creation or retention goals established including the proposed iefits broken down by wage level. 25 2. Appli t must be a business located in or moving into the city lunits of the City of Saint Paul. This 26 incl es not-for-profit businesses with at least 100 full-fime equivalent positions and with a ratio of 27 highest to lowest paid employee that exceeds ten to one. q9 -� ya- 28 3. Proposals for direct loans must first attempt and be unable to obtain private financing before applying for 29 city funding. 30 4. Proposals can be for any business purpose. Except refinancing of eatisting debt other than ffi2A/City 31 debt is not done unless it will improve the City/EIIZA collateral position or the repayment abiJ�ty of 32 City/FII2A loans. � 33 5 34 6. 35 STAR guidelines, 36 7. Proposals to utilize TaY Increment Financing should be for all legally 37 financing under MN 469. (See Appendix C). 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 S6 57 58 59 60 bl 62 63 64 65 66 67 68 69 70 uses for taY increment 8. Business subsidies in the form of grants must be structured as forg' able loans or else the agreement must state the fair market value of the subsidy to the recipient, i uding the value of conveying property at less than a fair mazket price, or other in-kind bene s to the recipient. 9. Recipient must be willing to enter into a subsidy agreeme that includes: (1) a description of the subsidy, including the amount a type of subsidy, and type of district if the subsidy is tax increment financing; (2) a statement of the public purposes for flie subsi ; Loan guarantees must haue participation by a private lender to assume at least 50% Any proposal to utilize STAR funds must be eligible under the City Council and must be awarded the funds through the approved STAR processes. livin�wage�ob per $25,000 of subsidy� (4) goals for the subsidy to be achieved wit n two yeazs of the benefit date, including goals for the number of fixli-time and/or part-time jobs reated and wage and benefit goals that meet all City of Saint Paul ordinances and resolutions regardi g business subsidy wage and job goals. In cases where job loss is imminent and demonstrable, goals r the number of jobs retained and wage goals for jobs created or retained must be included. training Saint Paul workers; n of the financial obligation of the recipient if the goals are not met; of why the subsidy is needed; .nt to continue operations at the site where the subsidy is used for at least five years after th benefit date; (13) e name and address of the parent corporation of the recipient, if any; and (14 a list of all fmancial assistance by all grantors for the projeet. (10) a (11) a (12) a � 71 l0. 72 73 74 75 76 77 78 79 :' : .� : Preference will be �iven to applicants meeting the following criteria: �1) a demonstrated hi ng er target percenta�e of hues far Saint Paul residents: 11. In awarding a business subsidy, City CounciUHRA Board will consider: A. In what ways the project improves the mix of businesses in the participate in fast-growing industries; protect area from adverse by slow growth or declining industries that are dominant in th consumer services or develops a network for businesses of 1 cal exist in the azea. cl � - ' i �-�' are so as to allow the area to onomic consequences caused area; and provides essential suppliers that do not currently 86 B. How many new jobs will be created and at what pay? ow do proposed wages compare to 87 community wage levels? Will some jobs have opp ities far career advancement, educafion, 88 or occupatSonal training? Are there job growth p jections for the project over the next 2-5 89 years? Are there fringe benefits auailable and at are they? 90 C. If job loss is imminent is there substantial idence that the company will have to shut down 91 involuntarily? Is there substantial evide e that the company has received an offer to move to 92 another state or comnnunity that is am tive enough that a reasonable person would seriously 93 consider a move far business reason What potential negative effect would the subsidy have on 94 other competing businesses and ov all azea job quality? 95 96 97 98 12. 99 100 D. Will the project uniquely affec e property taY base for all ta��ing jurlsdictions, both short and long term, and both directly d indirecfly? How will the project affect other local business and individual property tax biil . Any subsidy agreement subjec o MN 5tatute 116J.993-995 must be approved by the local elected goveming body. 3 APPEND�Y A The following forms of fmancial assistauce aze not a business subsidy: (1) a business subsidy of less than $25,000; (Z) assistance that is generally available to all businesses or to a general class a line of business, size, location, or similar general criteria; °l� _'1'1 � businesses, such as (3) pubiic improvements to buiidings or lands owned by the state or local ernment that serve a public purpose and do not principally benefit a single business or defined gro p of businesses at the time the improvements aze made; (4) redevelopment properry polluted by contaminants as defined � section 116J.552, subdivision 3; (5) assistance provided for the sole purpose ofrenovating old or provided that the assistance is equal to or less than 50 percent c 6) assistance provided to organizations whose primary the sole purpose of the assistance is to provide those s 7) assistance for housing; (8) assistance for pollution control ar abatement; (9) assistance for energy conservation; (10) tax reductions resulting from (11) workers' compensation and (12) benefits derived from (13) indirect benefits derived (14) funds from bonds (15) assistance for a (16) assistance for a 19; (17) ,tXng building stock or bringing it up to code, total cost; to provide job readiness and training services if with federai tax law; compensation; assistance to educational institutions; under chapter 474A; between a Minnesota highez educafion institution and a business; financing soils condition district as defined under section 469.174, subdivision when the recipient's investment in the purchase of the site and in site preparation is 7Q percent or more of the ssessor's current yeaz's estimated market value; and (18) gen changes in taY increment fmancing law and other general tax law changes of a principally technical nature. a ; ^�ojecf Name _ �-roject Address City Contact _ PUSLIC PURP�SE SUMMARY - Account # _ Today's Date . PUBLtC COST ANALYSIS ' 'fracic # � ,' ��_��la- � TotaI Loan Subsidy: Present value of the loan over iu life, induding expected los of principal and interest race subsidy. PUBLIC BENE�IT AN YSIS (Mark "1 " for Primary Benefits and "2" or Secondary Benefits) 1. Community Development Benefits .. _. : �.. . ..., .. .:::..,, , . . . .. ., ... ,.. . .:.;.,: � ` RemoveBlig6t/Polluuon :�; �..<;. ImproyeHealtfilSaf 1Secu'rity . `:->: Increase/MaintairiTa�$ase:t:•: ' Rehab. Vacant Structure Public Improvein ts t'�rrent cax pro3ucnon b '•1 . Re`move Vacant Strncture t�: � �`: ( ' � Herita e' Pre'servation'> `' �" ' `% r Il. Economic Development Benefits S..' .<:t�: :_� '. $uPPori:�itality`ofIiiduscry�y;;j$<;. .... _. - .:k::Py.: ..1:.`Q...�i:.:... �..._...,. � ' �` Pro.'vide 5elf-Er. 111. Housing Devel `� Iricrease'I-�ome ��::� ��:� ucuu new.cc 1V. Job :. ��YY.^:".;. �i � : �.'a � : 5 ;:::e e:c d caxe: as w s. :.. . ityi �:�.•neCtaxchange;i,oc-: "r; ,:��: :>ss , A Welfare eaz7; Conelandliobs\cwleriteria for ew Revised7-28-99 /T � FOLLOW-UP.FROM LOAN SERVICING PROCESS ar; 4.�Folloinr-Up,. blicl?urpose Objec , . <.. ._.. . .,� -.. ,:,.,. , .. ... . -: .. . : • .. :;a ;,:'". - :::._; �,.:>>:' . ;.:�<.: ..::....:..., :, .....: ..,,: ,... . .:..:,�: <: ::;, , D`eEiciences: _ ,. <....: ,.:. , .... ,. �M "�ar S:Follow-Up � _. �, ;; ;: . .�. . �;;: : � , rublic Purpose Objectiyes'Ivlet: [,:] Yes [�. ``] No [�'` ] In rt.'.[' `] No Longer Appl. Deficiences: ` FOL10W-UP N )OB IMPACTS , {�' • ;� NO JOB��MPAG'T.: , " # OBS C� >:.`>. e �erm; � r.3 ..\ � ' .. +__��....�`. . �:,� ri<�:��'�'..' ��:� , ii:. � �.A� ;.>• !� n _ PUBLPURPSIR Revifed Sh7/96 �� `t_'1�tti-- :>;= . .]>::;::.".:i;%;�:� `�`::' I,Goals�Acliieve��.� 1_Goals AcHieczd. 4 Year 5 Copeland�jobs�cw\criteria for cw Revised7-2S-99 P� APPENDIX C TAXINCREMENT FINANCING � ProgramPurpose.• Todefraysitedevelopmentandlandpreparationcostsforrealestate evelopments. Taz increment fznancing results in increased employment, decrea d blight, and a higher tax base. How It Works: The increase in real estate taxes generated by a specific devel pment project is used to subsidize those improvements needed to begin a project. On way to provide the subsidy is for the City to issue bonds backed by the projected operty tcix increase that the improved property will yield. Minimum Requirements.• Project must be located in an approved Re velopmentArea and a designated tax increment district. The new constructio of building rehabilitation must result in a significant increase in the property's ar base. EZigible Costs: Fees: Land acquisition, site preparation, and jlublic improvements. Determined on a case by cptse basis. Approval Process: The Ciry Planning ommission, Capital Improvement Budget Committee, the appropriate Distri t Planning Council, the School Dish-ict, and Ramsey Counry must review prop sals to establish a ta:� increment district. The establishment of such a district ust be approved by the Saint Paul Housing ad Redeveloprnent Authority (H ) and the City council. Projects within a currently existing tar increment strict are reviewed by the appropriate districtplanning council and the HRA. Contact: af Paul Department of Planning and Economic Development (PED), -266-6b74. � � Yeas Nays Absent Benanav Blakey Bostrom Coleman Hazris Lanhy Reiter Adopted by Council Adoption Certified t By: Approved by Mayor By: q �,��tY � b Requested by Deparlment of: 8-17-1999 9:51AM FROM MAPA / ACT 651 6Q1 ae53 P-� MiMlIESOTA ' ALLIAMCE (Of � ►R06RESSIVE AtT10N / - ` - P . aC6aei Adwcating Ctwngt Tagether AFSCME foun<ils 6, u.65 AFSCME Local 66— NE MN Alffance oF the Sueeu � BIHA women in Acuon CICan Weltf AClNn Allie�t¢ CommumryACtion of Mmneapolit /UELooliuo MN Ameriwns fw OemocracNcACdon MH assoriatwn of Rofe�ioial EmDlnYeet MN �OACf MH Conln'ankrCneHOmeless MN Communiry Action 0.uociation MN Conwmer Aillance MN NaKonai Orgenixation for Women Mrv Seoior Federafion rva�ionsl wwyers Guild — Minnesota Outfront M�nncSOla . SEIUSdteCOUncil#7 UNttE—NOrtAem Digrict�olnt BoarQ . Uni(edAYtowpfRe�S Unfted St¢ei Wo�kers of Amenca—Dlstdtta� Onited Tmnsportatiort Unlon Wban Welhbn Women l�qainst Nu'Gtary Maanesz .„�ga. � �� 2- ��`�� 0 FAX TRANSMISSXON DATE: TO. August 11,14fl9 St Paul City Council Members Fa� 266-8574. FROM; Beth Frasex, Public Policy Organizer . Minnesota Alliance for Progressive Action Phone: 651-641-4050 Fax: 651-641-4A53 T2E: Criteria for Bnsimess Sul�sidies YAGES (inctuding covei): 3 COMMENTS: The atEack�ed let�ex is in ieference to to�'s public heaxing on the PED's pioposal foz ctiitecia for business subsidies. MINNESOTA ALItAMCE f07 9ROGAESSIVE qCT10N 8-i1-1999 9:57AM FROM MAPA / ACT 651 6a1 a853 •1�11NESOTq ALLILMCE fOt OR06YESSIVF ACTi9N • - \ � P qCORN AOvocatiRqChaageTOgether AFSCME CounclLs 6. �4. b5 AFSGME �ow166-NE Mn nlbance of the Saeets BIHA Women in Actbn Y1ean waMr Action nl6ancc Communiry ActioM1af Minneapolu - IUElocalupo � MN Amer((y�s for Democra<ticACtion Date: August 11,1999 _ To: St. Paul City Co,uncil Members From:Beth Fraser, Pnblic Policy Organizer : Re: Criteria for Business Subsadies P. 7 ��-��` This past spring the Minnesota Legislature passed the 1999 State Business Subsidy Act. With this action, our elecEed leaders respondetl to concemed cifizens from around the state. who . deznanded more accountability when public money is used to subsidize privafe businesses. . This ground-breaking legislation will change the ctimate in which subsidies are given, making sure that they aze no longer seen as "business as usual." Each graniing agency around the state'is now charged with the task of developing sfandard criteria by which they will evaluate all future su.bsidy proposals. I have review�d and have three serious concerns about the PED's proposed criteria for awarding fufiure business "subsidies. Mr,n�«;,c;o�,f " First of all, I do nof believe that the resolution brings the City of "°`�n`°"'` Saint Paul, into compliance with the 1999 State Business Subsidy ' MN COACT Ac� To begin with tkus resoiution does not indude standard � '""c°"�c�^r�a,°"°�^^e'� criteria for evaluafing subsidy proposaIs, but instead questions Ehat tdNCommuoityActionAssodatbn need Eo be considezed. My understanding of the term "CI1tEI13" 'MNCOnsumerAlliance leads me to believe that the Council s2tiouId oufline answers to MN NadOnslbrggnixeRon �� quesEions that they would find acceptable. This �would aliow � for Women MNSenibrFederatio� �''e rnrnmuniry and businesses consideririg applying for subsidies a clear understanding of the types of projects in which the City o# Netlon3149wyer5 GY�10 - . M;��,,, Saint Paul is willing to invest public money and the community o�cr�,�„n;�„�,� standards to which they wili be held.: � SE1u sWa council C7 UNITE -Ne.them District �aint Board UnitcOAUto Warkers United Steel Workers of a�cno. _ otst.¢r u UniceC Transportstion Union Urban Coalition Women Against Mili[ary MOdness _�. 1821 Up1YER51SY AVSNUF" SUITE $•307 � Sr. Pnul, MN Si104 In addition, it is noE clear to me from the information provided in the two page resolution that this proposal fulfills the statutory requirement thaE the criteria include a policy on wages. This . proposal may reference a wage policy found elsewhere in city ordinances with the statement that, "a subsidy agreement [must) include ... wage and benefit goals that meet all City ordinances and resolutions regazding business subsidy and wage and job goals." If this is the case, Ehen the proposal may be in cozztpiiance with the IetEer of the new law. Whether it is in compliance with the intent of the law, however, is a differenf mat�er. The point of xequiring a public hearing when esfabtishing the criEeria for subsidy pzoposals was to ensure that the community was gi�e�a the opportunity eo review and spsak out about the proposed critezia. Failirig Eo clearly '�' �652)64i•ya5o fax � ( e•mafl Staff�mapa•mn.org 8-11-7999 9:59AM FROM MAPA / ACT 651 6a1 �53 P_1 (� C� �' l �1 ..� state the proposed wage polzcy (if there is one at all) cheats St. Paul citizens by not giving them enough information to make informed judgments about this proposal. If the intent is to fuifill the requirement for a wage policy by referencing the City's Living Wage Policy, this raises a number of questions. The threshold for SE. Paul's Living Wage Policy is $100,OD0. The state law covers all subsidies over $25,000. There are numerous types of subsidies that are exempt from the Living Wage Policy, but are covered by the 1939 State 'Busin2ss Subsidy Act Is the intent to bzoaden the City's Living Wage Policy to cover a11 subsidies over $25,000? If not, then what is the pzoposed wage policy for subsidy proposals that ars not covered by the City's Living Wage Policy? F'inally, section 8 of the resolution, which requires that grants "be structured as forgivable loans or else the agreement must state the fair market value of the subsidy to the recipient;' is definitely not in compliance with the new statute. The 1999 State Business Subsidy Act requ'rres granting agencies m stop the pracEice of giving subsidies as grants. A subsidy that would have been structured as a grant must now be struchued as a forgivable loan. Subsidy agreements for other types of subsidies (TIF, loans, etc•) must state the fair market value of the subsidy to ehe recipient. Section 8 of the resoiution needs to be rephrased to come into compliance with the new law. Allowing the public to give informed input on standard criteria for subsidy proposals is a critical piece of the 1999 State Business Subsidy Act. I urge you to rnnfinue Eoday's public hearing until August 25th to r,,.i've yourselves and the PED staff fiime to redraft these criteria, keeping in mind the intent ot this legislation and the weight of the res given to you when you choose to invest our hard- earne tax ollars in privaEe enterprises. Thank you for your time and attention to this znatter. If you would like to discuss this further or have any questions about my concerns, please contact me at the MAt'A office. Council File # gg -�y � S �.bs�'� �w�� A�cr� e a V e,�cs:orl� Presented by Referred To �. — S ep$, � 194'l RESOLUTION OF Green Sheet # Committee Date Resolution Authorizing a Public Hearing and Adopting Criteria for Awarding Business Subsidies that Comply with the 1999 Minnesota Business Subsidies Law 1 WHEREAS, the 1999 Minnesota Legislature enacted Statute 116J.993-995 setting requirements for subsidies 2 allocated to businesses by state or local government agencies; and 3 WHEREAS, local government agencies including the Housing and Redevelopment Authority of the City of 4 Saint Paul, Minnesota (HRA) are charged with holding a public hearing and adopting a set of criteria for 5 awarding business subsidies that comply with this statute; now therefore be it 6 7 RESOLVED, that the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota does hereby set a public hearing for Wednesday, August 11, 1999, on the following criteria; and be it FURTHER RESOLVED, that the following criteria be adopted. 10 11 12 13 14 15 16 17 18 CRITERIA FOR AWARDING SUBSIDIES TO BUSINESSES SUBJECT TO THE REGULATIONS AND REPORTING REQUIREMENTS OF THE MINNESOTA BUSINESS ASSISTANCE ACT A subsidy is defined as"state or local government agency grant, contribution of personal properry, real properiy, infrastructure, the principal amount of a loan at rates below those commercially available to the recipient, any reduction or deferral of any taac or any fee, any guarantee of any payment under any loan, lease, or other obligation, or any preferential use of government facilities given to a business." To be subject to these requirements a subsidy must be $25,000 or more. Small businesses, as defined by Council File #94-1512, are exempt from the living wage requirement. Eighteen exceptions to these requirements aze set out in the legislation and are attached hereto as Appendix A. 19 1. A business subsidy must have a defined public purpose as shown in the Public Purpose Snminary that 20 accompanies projects going to PED Credit Committee, City Council, and the HRA. Increasing the tas 21 base may not be used as a public purpose under MN Statute 116J.993-995 nor can job retention be used 22 as a public purpose unless "job loss is iimninent and demonstrable." The Public Purpose Sununary (see 23 Appendix B) must also show any job creation or retention goals established including the proposed 24 wages and benefits broken down by wage level. 25 2. Applicant must be a business located in or moving into the city limits of the City of Saint Paul. This 26 includes not-for-profit businesses with at least 100 full-tune equivalent positions (FTEs) and with a 27 ratio of highest to lowest paid employee that exceeds ten to one. L, MINNESOTA �� t 28 3. Proposals for direct loans must first attempt and be unable to obtain private financing before applying 29 for city funding. Gt� _`l'-� a 30 4. Proposals can be for any business purpose. Except refinancing of e�sting debt other than HRA/City 31 debt is not done unless it will improve the City/HRA collaterai posirion or the repayment ability of 32 City/HI2A loans. 33 5. Loan guarautees must have participarion by a private lender to assume at least 50% of risk. 34 6. Any proposal to utilize STAR fixnds must be eligible under the City Council adopted STAR guidelines, 35 and must be awazded the funds through the approved STAR processes. 36 7. Proposals to utilize Taac Increment Financing must be for land acquisition, site prepararion, and public 37 improvements and must follow the taac increment approval process. (See Appendix C). 38 8. Business subsidies in the form of grants must be structured as forgivable loans or else the agreement 39 must state the fair mazket value of the subsidy to the recipient, including the value of conveying 40 property at less than a fair mazket price, or other in-kind benefits to the recipient. 41 9. 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 Recipient must be willing to enter into a subsidy agreement that includes: (1) a description of the subsidy, including the amount and type of subsidy, and type of district if the subsidy is taac increment financing; (2) a statement of the public purposes for the subsidy; (3) goals for the subsidy to be achieved within two years of the benefit date, including goals for the number of full-time and/or part-time jobs created and wage and benefit goals that meet all City of Saint Paul ordinances and resolutions regarding business subsidy wage and job goals. In cases where job loss is imminent and demonstrable, goals far the number of jobs retained and wage goals for jobs created or retained must be included. (4) a statement that the recipient does not haue an ongoing unresolved adverse acrion on their record with OSHA or the EPA; (5) a statement that the recipient has a company-wide standazd Affirmative Action policy; (6) a description of the financial obligation of the recipient if the goals aze not met; (7) a statement of why the subsidy is needed; (8) a commitment to continue operations at the site where the subsidy is used for at least five years after the benefit date; (9) the name and address of the parent corporation of the recipient, if any; and (10) a list of all financial assistance by ali grantors for the project. 59 10. Preference will be given to applicants meeting the following criteria: 60 (1) a demonstrated higher target percentage of hires for Saint Paul residents; 61 (2) demonstration of employer contributions made to employee child care and retirement accounts; 62 (3) participation in responsible labor relations. To the extent legally possible, preferential status for job 63 creation and retention assistance will be given to businesses that engage in responsible labor relarions. 64 Responsible labor relarions aze defined as neutrality on union organizing, providing a complete and 65 accurate list of names and addresses of employees, reasonable access to employees and facilities during 66 non-working periods, voluntary recognition based on a card check demonstrating that a union 67 represents a majority of employees in a bazgaining unit, and binding azbitrarion on the first contract. 68 (4) a requirement that if job crearion/retention is the primary development objective, recipients are 69 required to create (or, in cases where job`loss is �mminent and demonstrable, retain) at least one full- 70 time living wage job per $25,000 of subsidy; 71 (5) a requirement that recipients with at least 100 FTEs invest a portion equal to 5% of their loan or 2 q �.q9 72 grant for training Saint Paui workers; �� 73 (6) a requirement that employers with at least 75 FTEs offer employees the opportunity to participate in 74 a health caze program which includes an employer contribution; 75 (7) a statement that recipients with at least 100 F'I'Es will dedicate a portion of their loan or grant to a 76 program encouraging housing opportwrities for their employees within the job creation period of the 77 assistance.. This assistauce may be in the form of advances for down payments or closing costs, grants 78 for house or properry acquisition, or partnerships with affordable housing agencies or lenders; 79 11. 80 81 82 83 84 In awarding a business subsidy, City CounciUHRA Board will consider: A. In what ways the project improves the mix of businesses in the area so as to allow the azea to participate in fast-growing indushies; protect area from adverse economic consequences caused by slow growth or declining industries that aze dominant in the area; and provides essential consumer services or develops a network for businesses of local suppliers that do not currently e�st in the area. 85 B. How many new jobs will be created and at what pay? How do proposed wages compaze to 86 comxnunity wage levels? Will some jobs have opportunities for cazeer advancement, education, 87 or occupational training? Are there job growth projections for the project over the next 2-5 88 years? Are there fringe benefits auailable and what aze they? 89 C. If job loss is imminent is there substantial evidence that the company will have to shut down 90 involuntarily? Is there substantial evidence that the company has received an offer to move to 91 another state or community that is amactive enough that a reasonable person would seriously 92 consider a move for business reasons? What potenrial negative effect would the subsidy have 93 on other competing businesses and overall area job quality? 94 95 96 97 12. 98 99 D. Will the proj ect uniquely affect the property ta�c base for all tasing jurisdictions, both short and long term, and both directly and indirectly? How will the project affect other local business and individual property tas bills? Any subsidy agreement subject to MN Statute 116J.993-995 must be approved by the local elected governing body. * �� _ � � �n The following forms of financial assistance aze not a business subsidy: (1) a business subsidy of less than $25,000; qg �-� y � (2) assistance that is generaliy available to all businesses or to a general class of similaz businesses, such as a line of business, size, locarion, or sunilar general criteria; (3) public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) redevelopment property polluted by contamivants as defined in secrion 116J.552, subdivision 3; (5) assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code, provided that the assistance is equal to or less than 50 percent of the total cost; 6) assistance provided to organizations whose primary mission is to provide job readiness and training services if the sole purpose of the assistance is to provide those services; 7) assistance for housing; (8) assistance for pollution control or abatement; (9) assistance for energy conservation; (10) tas reduc6ons resulting from conformity with federal tas law; (11) workers' compensation and unemployxnent compensation; (12) benefits derived from regularion; (13) indirect benefits derived from assistance to educational institutions; (14) funds from bonds allocated under chapter 474A; (15) assistance for a collaboration between a Minnesota higher education institution and a business; (16) assistance for a tax increment financing soils condition district as defined under section 469.174, subdivision 19; (17) redevelopment when the recipienYs inveshnent in the purchase of the site and in site prepararion is 70 percent or more of the assessor's current year's estimated market value; and (18) general changes in tas increment financing law and other general ta�c law changes of a principally technical nature. ��,q� ^�oject Name . -roject Address Cify Contact _ PUBLIC PURPOSE SUMMARY � Account # Today's Date PUBLIC COST ANALYSIS Track # _ . � qq-��- '+ Total Loan Subsidy: Praent value of the loan over iu life, inciuding er.pected loss of principal and intuat rate subsidy. PUBLtC BENEFIT ANALYSIS (Mark "1 " for Primary Benefits and "2" for Secondary Benefzts) i. Community Development Benefits . , : : ;, . ,.. , .: .. <. - ' °' ReinoveBlight/PolIution :r ;�:.:;>': Imp"rode:Health%Safe /Secuii ° Inciease/Mairitairi_Ta�Bzse::.i." tY LY ' Rehab. Vacant Stru'crure i PublicImproyements ` r'' �rrent nx pro3ucuon , <.. . -. . , < - ,. :::.. :, ;. . . . ;>:a:. ess'd iaxes u'builr.::. ' Remove Vacant Str'uctdre , Goods `SC Semces Availability: `':. nei iax chmoe'+':oi�-: .. ... > ., . :.:..:.. .: :. ..:.' .. . .{ .M�. :.' ;.t D_y� n ' t . e: .' , ".: i . . . . . . .. ..: ...i �. � �L �' .� � . +. . .. '�..i.t : .. . ... <.... .. ... . .:...... .. :� : . , i i.: '.-�' i 5. . :.i:�e:::.:.:. _/. �.�.:.: ...,�:�:' Herita e Preservauoii`:�?' ^ " ` Muntaui Tax Base :?:::< :::,;. , .:..°._ °,, :; ` _ ::�:< . .:.:.. , .. .�;:� :> .. : , : Il. Economic Development Benefits ` Provide? Iti. Housing I i-T_ :.— IV. Job � : Benefits hip Stock^, � 5; e (:onetand�iobslewicriteria for cw Revised7-28-99 /* � tOLLOW-UP.tROM LOAN ,ERVICING t'ROCESS `i`��`1�{�. "aar:5`Folloiv-U '4::: ;,>:.€:>:'=; ,p . ...... ... ,...,,. rublic Purpose Objectives 2v1et: [ ] Yes [:'.:.� No `� Deficiences: _ . . . PUBtPURPS[ft R<riud 5/2tl96 � In Part: [ `' ) No FOLLOW-UP ON �OB IMPACTS Copeland�jobskw\criteria for cw Revised7•28-99 P� ll Goals'Acliieced. � i � / I_��i►`1�7►�i7 TAX INCREMENT FINANCING Program Purpose: €'�� _� � �'- To defraysite development and landpreparation costsfor real estate developments. Tax increment ftnancing results in increased empZoyment, decreased blight, and a higher tax base. How It Works: The increase in real estate taxes generated by a specific development project is used to subsidize those improvements needed to begin a projecz One way to provide the subsidy is for the City to issue bonds backed by the projected property tax increase that the improved property will yield. Minimum Requirements: Project must be located in an approved Redevelopment Area and a designated tax increment district. The new construction of building rehabilitation must result in a significant increase in the property's tax base. Eligible Costs: Fees: Approval Process: Contact: Land acquisition, site preparation, and public improvements. Determined on a case by case basis. The City Planning Commission, Capital Improvement Budget Committee, the appropriate District Planning Council, the School District, and Ramsey County must review proposals to establish a tax increment district. The establishment of such a district must be approved by the Saint Paul Housing ad Redevelopment Authority (HRA) and the City council. Projects within a currently existing tax increment district are reviewed by the appropriate districtplanning council and the HRA. Saint Pau1 Department of Planning and Economic Development (PED), 651-266-6674. � � /�� / � Yeas Na s Absent Benanav �/ Blakey ✓ Bostrom � Coleman � Harris � Lantry � Reiter � � � Adopted by Council: Date � /yqq Adoption CemSed by Council Secretary � _� �{ 2-- Requested by Deparhnent of: � Form Approved by City Attorney , / ../ .� ��,.� � � / � ♦ / B y' `�-- Approved by Mayor for Submission to Council Approved by Mayor: Date ° 1��`I By: By: �'f/�/(, /� D & Economic Aug. 4, 199 TOTAL # OF SIGNATURE PAGES To allow us to adhere to the criteria_for awarding subsidies to businesses subject to the regulations and reporting requirements of the Minnesota Business Assistance Act. PLANNING CAMMISSION CIB CAMMITTEE CML SERVICE CAMMISSION DAiE1NR1ATFD 7/28/99 GREEN SHEET � �.,u,� �,� � �„�.. _ ❑ �..,,�. ❑ �„� ❑.n.,r,.�a�av�e�so.. ❑wuw�.,.�umr�cc.o ❑ rAVORtoR�iffirANr1 ❑ (CLIP ALL LOCATIONS FOR SIGNATURE) Has ihis GersoNfitm everwarked uMM e canhact fw �his depsrtmenl? VES NO Has ihis pe�sorJfirm ever been a dty anpbyee7 YES NO Ooes fhis 7��m P� a sidll not normallYW� M' any curtent ctilY emPbyee7 YES NO Is Mis pe�soNfirtn a targMetl ventloYt rES rio olain all ves a�e�s on senerate sheet arM attach to arcen sheet �Y) alq-'1`t�- No 62372' IFAPPROVED AMOUNT OF TRANSACTION CAST/REVRIUE BUDfiETED (CIRCLE ON� YES NO ACTNITY NUMBER Cour€� Research Ce�ter JUL �6��:� �lgl�i RESOLUTION PAUL, MINNESOTA Presentea Committee Date \ Resolution Authoriaing a Public Hearing and ,% Adopting Criteria for Awarding Business Subsidi�s that Comply with the 1999 Minnesota Business Subs}c�ies Law i 1 WHEREAS, the 1999 ' esota Legislature enacted Statute 116J.993-9fr5 setting requirements for subsidies 2 allocated to businesses by te or local government agencies; and f 3 WHEREAS, local government agencies including the Housing Redevelopment Authority of the City of 4 Saint Paul, Mivnesota (HRA) are charged with holding a public earing and adopting a set of criteria for 5 awazding business subsidies that comply with this statute; no therefore be it 6 RESOLVED, that the Housing and Redevelopment Au rity of the City of Saint Paul, Minnesota does hereby 7 set a public hearing for Wednesday, August 1 l, 1999, the following criteria; and be it 8 FURTHER RESOLVED, that the following c�teda be adopted. 9 CRITERIA �OR AWARDING 10 AND 11 MIl1 12 13 14 15 16 17 18 TO BUSINESS co�o�a Fae # 9 �- ��a s�bs Green Sheet # a R�e�.�,e�, SUBJECT TO THE REGULATIONS CS OF THE .NCE ACT A subsidy is defined as "state or loc�'government agency grant, co 'bution of personal property, real properry, infrastructure, the principa'1 amount of a loan at rates below th e commercially available to the recipient, any reducfion or deferrp7 of any tax or any fee, any guarantee of � payment under any loan, lease, or other obligation, or any pref�rential use of govemment facilities given to a business." To be subject to these requirements a subsidy must be $25,000 or more. Small businesses, as defined bi�Council File #94-1512, are exemnt from the livine wape reauirement. Eighteen excepfions to these requirements are set out in the legislafion and are attach� hereto as Appendix A. 19 1. A business s sidy must have a defined public purpose as shown in the Public Purpose Suimnary that 20 accompani s projects going to PED Credit Committee, City Council, and the I�RA. Increasing the taY 21 base may ot be used as a public purpose under MN Statute 116J.993-995 nor can job retention be used 22 as a public purpose unless "job loss is imminent and demonstrable." The Public Purpose Sumuiary (see 23 Appendix B) must also show any job crearion or retenfion goals established including the proposed 24 wages and benefits broken down by wage level. 25 2. Applicant must be a business located in or moving into the city limits of the City of Saint Paul. This 26 includes not-for-profit businesses with at least 100 full-time equivalent positions (FTEs) and with a �tq�,� z� 28 3. 29 30 4. 31 32 33 5. 34 6. 35 36 7. 37 ratio of highest to lowest paid employee that exceeds ten to one. �9��a Proposals for direct loans must first attempt and be unable to obtain private financing before applying for city funding. Proposals can be for any business purpose. Except refinancing of existing debt other than HRA/City debt is not done unless it will improve the City/HRA collateral position or the re ayment ability of City/HRA loans. Loan guarantees must have participarion by a private lender to assume at ast 50% of risk. Any proposal to urilize STAR funds must be eligible under the City and must be awarded the funds through the approved STAR proces,s Proposals to urilize Tax Increment Financing must be for land improvements and must follow the taac increment approval pr�' adopted STAR guidelines, >ition, site prepazation, and public (See Appendix C). 38 8. Business subsidies in the form of grants must be structur as forgivable loans or else the agreement 39 must state the fair market value of the subsidy to the re pient, including the value of conveying 40 property at less than a fair mazket price, or other in- d benefits to the recipient. 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 9. Recipient must be willing to enter into a subsidy greement that includes: (1) a description of the subsidy, including the ount and type of subsidy, and type of district if the subsidy is taY increment financing; (2) a statement of the public purposes for subsidy; (4) goals for the subsidy to be achie ed within two years of the benefit date, including goals for the number of fu11-6me and/or part- ' e jobs created and wage and benefit goals that meet a11 City of Saint Paul ordinances and resolurions gazding business subsidy wage and job goals. In cases where job loss is imminent and demonstr le, goals for the number of jobs retained and wage goals for jobs created or retained must be � luded. (10) a d eription of the finazicial obligation of the recipient if the goals aze not met; (11) a tement of why the subsidy is needed; (12) commirinent to continue operations at the site where the subsidy is used for at least five years r the benefit date; ( 3) the name and address of the parent corporation of the recipient, if any; and 2 �� q. ��l A' 69 (14) a list of all financial assistance by all grantors for the project. �� ) �'�" 70 10. 71 ! 72 73 74 75 76 77 78 :1 . : : :- Preference will be �iven to auulicants mee � the followin� ctiteria: (11 a demonstrated hi er target nercenta�e of hires for Saint Paul residents; 1 l. In awazding a business subsidy, City Council/HRA Boazd will consi er: A. In what ways the project improves the mix of businesses ' e area so as to allow the area to participate in fast-growing industries; protect azea from verse economic consequences caused by slow growth or declining industries that are domin t in the area; and provides essential constuner services or develops a network for busines es of local suppliers that do not currently e�st in the area. 85 B. How many new jobs will be created and at wh pay? How do proposed wages compare to 86 community wage levels? Will some jobs hav opportunities for career advancement, education, 87 or occupational training? Are there job gr projections for the project over the next 2-5 88 yeazs? Are there fringe benefits availab and what aze they? 89 C. If job loss is imminent is there subs tial evidence that the company will have to shut down 90 involuntarily? Is there substanrial idence that the company has received an offer to move to 91 another state or community that ' attractive enough that a reasonable person would seriously 92 consider a move for business r ons? What potential negative effect would the subsidy have 93 on other competing business and overall area job quality? 94 D. Will the project uniquely ect the property ta�c base for all ta.zing jurisdicrions, both short and 95 long term, and both dir tly and indirectly? How will the project affect other local business and 96 individual property bills? 97 12. 98 99 Any subsidy agreement s �ect to MN Statute 116J.993-995 must be approved by the local elected governing body. 3 _��_►� , - The following forms of financial assistance aze not a business subsidy: (1) a business subsidy of less than $25,000; (2) assistance thatis generally available to all businesses or to a general class of as a line of business, size, location, or similaz general criteria; � ��'� businesses, such (3) public improvements to buildings or lands owned by the state or local vernment that serve a public purpose and do not principally benefit a single business or defined gro p of businesses at the time the improvements aze made; (4) redevelopment property polluted by contaminants as defined � secrion 116J.552, subdivision 3; (5) assistance provided for the sole purpose of renovating old or deca ' g building stock or bringing it up to code, provided that the assistance is equal to or less than 50 percent of th total cost; 6) assistance provided to organizafions whose prunary mission to provide job readiness and training services if the sole purpose of the assistance is to provide those servic ; 7) assistance for housing; (8) assistance for pollution control or abatement; (9) assistance for energy conservation; (10) taac reductions resulting from conformity (11) workers' compensation and (12) benefits derived from regulation; (13) indirect benefits derived from (14) funds from bonds allocated (15) assistance for a (16) assistance for a taY 19; (17) redevelopment or more of the assey (18) general nature. federal taac law; compensation; to educational institutions; chapter 474A; between a Minnesota higher education insritution and a business; financing soils condirion district as defined under section 469.174, subdivision � the recipienYs inveshnent in the purchase of the site and in site prepazation is 70 percent current year's esrimated market value; and in taY increment financing law and other general t� law changes of a principally technical APPENDIX B '1 .'1 � 2-- APPENDIX C TAX INCREMENT FINANCING Program Purpose: To defray site developmentand land preparation Tax increment financing results in increased em higher tax base. ��J �al estate developments. decreased blight, and a How It Works: The increase in real estate taxes generated by a s cifzc development project is used to subsidize those improvements needed to begin a oject. One way to provide the subsidy is for the City to issue bonds backed by the rojected property tax increase that the improved property will yield. Minimum Requirements: Project must be located in an a roved Redevelopment Area and a designated tax increment district. The new nstruction of building rehabilitation must result in a significant increase in the roperty's taz base. Eligible Costs: Fees: Approval Process: Contact: Land acquisition, site Determined on and public improvements. by case basis. The City PI nning Commission, Capitad Improvement Budget Committee, the appropriat District Planning Council, the School District, and Ramsey County must revi proposals to establish a tax increment district. The establishment of such a istrict must be approved by the Saint Paul Housing ad Redevelopment Autho ity (FIRA) and the Ciry council. Projects within a currentdy e;cisting tczc incr ment district are reviewed by the appropriate districtplanning council and the H . Saint Paul Department of Pdanning and Economic Development (PED), 651-266-6674. G� ��J� Yeas Nays Absent Benanav Blakey Bostrom Coleman Harris Lantry Reiter Adopted Adoption B _ Approvec B Requested by Department of S - ` }+ 1 Council File # �_ 1� l�d� �� ` ` ` �'� �' ��a^""�` `��' gesolution # �1.. � mer�.�a � - - - - RESOLUTION Presented By Referred To Commi 1 WIIEREAS, the 1999 Minnesota Legislature enacted Statute ll f 2 subsidies allocated to businesses by state or local government agencies; 4 WHEREAS, local government agencies aze chazged with 5 of criteria for awarding business subsidies that comply with this 6 a9 e: Date setting requirements for ; a public hearing and adopting a set now therefore be it 7 RESOLVED that the Council of the city of Saint Paul oes hereby set a public hearing for Wednesday, 8 August 11, 1999, on the following criteria; and be it 9 10 FURTHER RESOLVED, that the following cri ria be adopted. 11 12 13 CRITERIA FOR AWARDING SUBSIDIES BUSINESSES SUBJECT TO THE REGULATIONS 14 AND REPORTIN REQUIREMENTS OF THE 15 MINNESOTA USINESS ASSISTANCE ACT 16 17 A subsidy is defined as "state or local govem ent agency grant, contribution of personal property, real property, 18 infrashucture, the principal amount of a lo at rates below those commercially available to the recipient, any 19 reduction or deferral of any tax or any fee, y guarantee of any payment under any loan, lease, or other obligation, or 20 any preferential use of government facili es given to a business." To be subject to these requirements a subsidy must 21 be $25,000 or more. Eighteen except� ns to these requirements are set out in the legislation and aze attached hereto 22 as Appendix A. 23 24 1 25 26 27 28 29 30 31 32 33 34 35 36 37 2. 3. A business subsidy must h e a defined public purpose as shown in the Public Purpose Summary that accompanies projects goi g to PED Credit Committee, City Council, and the HRA. Increasing the tas base may not be used as a public ose under MN Statute ll6J.993-995 nor can job retention be used as a public purpose unless ' job lo s is imminent and demonstrable." The Public Purpose Summary (see Appendix B) must also show any ' b creation or retention goals established including the proposed wages and benefits broken down by w ge level. Applicant mus e a business located in or moving into the city limits of the City of Saint Paul. This includes not-for-profi usinesses with at least 100 full-time equivalent positions and with a ratio of highest to lowest paid emplo e that exceeds ten to one. Green Sheet # C�rl( OF,SAINT PAUL, MINNESOTA � 1 '�� for direct loans must first attempt and be unable to obtain private fmancing before applying for city 38 4. Proposals can be for any business purpose. Except refinancing of existing debt other than IIRA/City debt will 39 40 41 5 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 not be done unless it will improve the City/I3RA collateral position ar the repayment ability of City/FII2A loans. `Iq �'��- Loan guazantees must have participation by a private lender to assume at least 50% of risk.. � Any proposal to utilize STAR funds must be eligible under the City Council adopted STAR must be awarded the funds through the approved STAR processes. and 7. Proposals to utilize Tas Increment Financing uses for tas uld be for all 8. Business subsidies in the form of grants must be structured as forgivable loans or se the agreement must state the fair mazket value of the subsidy to the recipient, including the value of con eying property at less than a fair market price, or other in-kind benefits to the recipient. 9. Recipient must be willing to enter into a subsidy agreement that includes (1) a description of the subsidy, including the amount and type of subs' y, and type of district if the subsidy is taY increment financing; (2) a statement of the public purposes for the subsidy; (3) goals for the subsidy to be achieved within rivo years of the b nefit date, including goals for the number of full-time and/or part-time jobs created and wage and benefit g ls that meet all City ordinances and resolutions regazding business subsidy wage and job goals. In cases wh e job loss is imminent and demonstrable, goals for the number of jobs retained and wage goals for jobs create or retained must be included. (4) a description of the financial obligation of the recipie if the goals are not met; (5) a statement of why the subsidy is needed; (6) a commihnent to continue operations at the site w ere the subsidy is used for at least five years after the benefit date; (7) the name and address of the parent corporatio of the recipient, if any; and (8) a list of all financial assistance by all granto for the project. 10. In awarding a business subsidy, City Counc' Board will consider: A. In what ways the project improve e mix of businesses in the area so as to allow the area to participate in fast-growing industries; prote area from adverse economic consequences caused by slow growth or declining industries that aze do inant in the azea; and provides essential consumer services or develops a netwark for businesses of 1 cal suppliers that do not currently exist in the area. B. How many new jobs will e created and at what pay? How do proposed wages compare to community wage levels? Will some obs have opporhxnities for career advancement, education, or occupational training? Are there jo growth projections for the project over the next 2-5 years? Are there fringe benefits available a what are they? C. If job loss is im nent is there substantial evidence that the company will have to shut down involuntarily? s there substantial evidence that the company has received an offer to move to another state or com iTy that is attractive enough that a reasonable person would seriously consider a move for busines reasons? What potential negative effect would the subsidy have on other competing businesse and overall area job quality? D. Will t project uniquely affect the property tas base for all tasing jurisdictions, both short and long te and both directly and indirectly? How will the project affect other local business and individual pr erty tas bills? 11. Any s�i5sidy agreement subject to MN Statute 116J.993-995 must be approved by the local elected governing 91 92 93 94 95 96 97 98 99 100 „ �► , The following forms of financial assistance aze not a business subsidy: (1) a business subsidy of less than $25,000; (2) assistance that is generally available to all businesses or to a general cIass of similaz business, size, location, or similaz general criteria; 101 (3) public improvements to buildings or lands owned by the state or local government that 102 do not principally benefit a single business or de£med group of businesses at the time thej 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 (4) redevelopment properry polluted by contaminants as defined in section 1 (5) assistance provided for the sole purpose of renovating old or decaying bc provided that the assistance is equal to or less than 50 percent of the total co: 6) assistance provided to organizations whose primary mission is to provi sole purpose of the assistance is to provide those services; 7) assistance for housing; (8) assistance for pollution control or abatement; (9) assistance for energy conservation; (10) tax reductions resulting from conformity with (11) workers' compensation and unemployment (12) benefits derived from regulation; (13) indirect benefits derived from (14) funds from bonds allocated under (15) assistance for a collaboration (16) assistance for a tax taac law; educational institutions; 474A; ��-� as a line of a pubiic purpose and �ements aze made; 3; stock or bringing it up to code, job readiness and training services if the a Minnesota higher education institution and a business; soils condition district as defined under section 469.174, subdivision 19; (17) redevelopment when the r cipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's curren yeaz's estimated market value; and (18) general changes in increment fmancing law and other general taz law changes of a principally technical nature. ^�oject Name , roject Address Cify Contact - A.PPENDIX B PUBLIC PURPOSE SUMMARY - Account# _ Today's Date . PUSLIC COST ANALYSIS � Track # _ �Iq '� Total Loan Subsidy: Present value oE the loan over ics life, including expecce oss of principal and interest race subsidy. PUBUC BENEF(T ALYSIS (Mark "1 " for Primary .8enefits and ' 2" for Secondary Benefits) 1. Community Development Benefits ... . ... _ -::: .. .., : ,. _ . ,_... '` Remove Blight/Polluuon .<<>> : Improve Health% fe lSecu"ri Increase/Maintairi �Ta� Base.;;°: � LY : tY %. curient cax pro3uction: " Rehab. Vacant Structure `: Public Improv' ents •';'.. esi d caxes as built::: Reinove Vacant Scructtire :; :`::' Goods`& Se 'ces Ayailability: ",'; . ne� iax chanoe�+';.oc-: ; ' _. „ _ . ....,.: . ., ..<.,: �. .,:..: .:. ,,:. .,. .. :. a . ' Heritage'Preserdation;::- ' `" MainEain: axBase':�:'<.;'`:::;<` ``: "<3�`i` Il. Economic Development Benefits :....: ,..::� ...:.::..:.:: �::..;a:; _�: :..:r�°:. ;.:. ;:.. °..;.:::.:_;. •::._ >:,:. , ' Suppon Yiralitq of Industry,�� :` Create Local Businesses ' Gererare Pnvate Invescment s.Stab�lizeNLarket �!alue , .:� Recauz Ltical$unnesses - Support Commer.,csal Acndity F. ( ' � Provide Self-Empti Ilf. Ho using Develop� Iricrease Ho'ine Oy ^�'. �.�# uniu new.consti !V. Job � a ; � Iricr. ti�!ome: : <, Needs":=`: _..,. Iv e Welfare ' �'�.`t'R:i:'� Y ear,� :, .. �:`:'�i ;>z . :;'^;� _"; .. �;�?x«�'`.'':� � ;az 5 ' � FOLLOW-UP.�ROM LOAN SERVICING PROCESS t�q-1`�� .... . Year. 4 ;Follow-Up . Dace - :: . PublicPurposeOb�ecnvesMet ( _.V]Yes [ _]No [ .]InPait,[ .]No` ;ngerApphcablelAllGoalsAclueved Defic'iences: ` _: _ va .. ,::::;�::.' Dacec'<,`..::: , ar:5 °Follow-Up rublic Purpose Objectives Mer. [ ] Yes [ } I�?o ['� :] In Pa [ } No Longer Applica6lelAll Goals Achieced I Deficiences: _ _ _ FOLLOW-UP [. ]NOJOB�TMPACT " ti OBS CREATED fulltim � erm _ i. tYvera _ ,_. _ .:: rGonst " tio`ri/Tem � � PUBIPURP.SCiI Rcvised 5/22/96 �1 �OB IMPACTS 3 .of :Year_Follow,Up.'Inforinatio �� Year 1'; Year.;2 Year 3 e� r� _ :ual Results):;% ar 4 Year 5 � .....'_� �._. .< Copelandljobs\cw\criteria for cw Revised7-28-99 5 i4i 142 APPENDIX C q`�,'1�12' 143 144 145 TAX INCREMENT FINANCING 146 147 Program Purpose: To defray site development and land preparation costs for real state 148 developments. Tax increment fznancing results in increased ployment, 149 decreased bZight, and a higher tax base. 150 151 152 How It Works: The increase in real estate taxes generated by a spe c development project is 153 used to subsidize those improvements needed to be in a project. One way to 154 provide the subsidy is for the City to issue bonds acked by the projected 155 property tax increase that the improved prope will yield. 156 157 158 Minimum Requirements.• Project must be Zocated in an approved edevelopment Area and a designated 159 tc� increment district. The new constr ction of building rehabilitation must 160 result in a significant increase in the roperty's tax base. 161 162 163 Eligible Costs: Land acquisition, site prepara on, and public improvements. 164 165 166 Fees.� Determined on a case by ase basis. 167 168 169 Approval Process: The City Planning ommission, Capital Improvement Budget Committee, the 1 �0 appropriate Distr' t Planning Council, the School District, and Ramsey County 171 must review pro osals to establish a tax increment district. The establishment of 172 such a district ust be approved by the Saint Paul Housing ad Redevelopment 173 Authority (H ) and the City council. Projects within a currently existing tax 1 �4 increment strict are reviewed by the appropriate distr•ict planning council and 175 the HRA. 176 177 178 Contact: Sain Paul Department ofPlanning and Economic Development (PED), 651- 179 26 -6674. G ��,�� Coleman Adopted by Council: Date Requested by Department of: Plannina & Economic Development By: Foxm Approved by City Attamey Adoption Certified by Counrfil Secretasy BY� BY: Approved by Mayor: By: Approved by Mayor for Submission to Council By: 7 OR�GiNAL Green Sheet # �e�3� � 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Presented By Re£erred To Council File # 1�� t�a Resolution # Committee -1 Date 4y WHEREAS, the 1999 Minuesota Legislature enacted Statute 116J.993- 5 setting requirements for subsidies allocated to businesses by state or local govemment agencies; and WHEREAS, local government agencies are charged with hold' public hearing and adopting a set of criteria for awarding business subsidies that comply with this statut , now therefore be it RESOLVED that the Council of the city of Saint Paul does�'fereby set a public hearing for Wednesday, August ��, 1999, on the following criteria; and be it � FURTHER RESOLVED, that the following criteria adopted. CRITERIA FOR AWARDING SUBSIDIES TO B INESSES SUBJECT TO THE REGULATIONS AND REPORTING RE UIREMENTS OF THE MINNESOTA BUS ESS ASSISTANCE ACT A subsidy is defined as "state ar local government infrastruchue, the principal amount of a loan at rat reduction or deferral of any tazc or any fee, any any preferential use of govemment facilities giv n be $25,000 or more. Eighteen exceptionsto esE as Appendix A. � ncy grant, contriburion of personai property, real properry, below those commercially available to the recipient, any rantee of any payment under any loan, lease, or other obiigation, or to a business." To be subject to these requirements a subsidy must ; requirements are set out in the legislation and are attached hereto A business subsidy must ha�e a de ned public purpose as shown in the Puhlic PurQose Summary that accompanies projects going to P Credit Committee, City Council, and the F3RA. The Public Purpose Summary (see Appendix B) m t also show any job creafion or retention goals established including the proposed wages and benefits oken down by wage level. 2. Applicant must be a busine s located in or moving into the city limits of the City of Saint PauL This includes not-for-profit businesses ith at least 100 full-time equivalent positions and with a ratio of highest to lowest paid employee that exc ds ten to one. 3. Proposals for direct ans must first attempt and be unable to obtain private fmancing before applying for city funding. 4. Proposals can U for any business purpose. Except refmancing of existing debt other than HRA(City debt is not done unless i iil improve the CityfHRA collateral position to the repayment ability of CityfIlRA loans. RESOLUTION CITY OF SAINT PAUL, MINNESOTA Copeland\jobs\cw\crheria for cw Revised7-28-99 1 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 5& 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 5. Loan guarantees must have participation by a private lender to assume at least 50% of risk.. �� `' 6. Any proposal to utilize STAR funds must be eligible under the City Council adopted STAR guidelines, and must be awarded the funds through the approved STAR processes. 7. Proposals to utilize Taz Increment Financing must be for land acquisition, site preparation, and public improvements and must follow the tazc increment approval process. (See Appendix C). 8. Business subsidies in the form of grants must be structured as forgivable loans or else the agreement ust state the fau mazket value of the subsidy to the recipient, including the value of conveying property at le than a fair market price, or other in-kind benefits tp the recipient. 9. Recipient must be willing to enter into a subsidy agreement that includes: (1) a description of the subsidy, including the amount and type of subsidy, and type of ta�c increment financing; (2) a statement of the public purposes for the subsidy; if the subsidy is (3) goals for the subsidy to be achieved within two years of the benefit date, includ' goals for the number of full-time and/or part-time jobs created and wage and benefit goals for those jobs. n cases where job loss is imminent and demonstrable, goals for the number of jobs retained and wage go s for jobs created or retained must be included. (4) a description of the financial obligation of the recipient if the goals are t met; (5) a statement ofwhy the subsidy is needed; (6) a commitment to continue operations at the site where the subsidy i used for at least five years after the benefit date; (7) the name and address of the pazent corporation of the recipient, ' any; and (8) a list of all financial assistance by all grantors for the project. 10. In awazding a business subsidy, City CouncillfiRA Boazd wi consider: A. In what ways the project improves the mix of busi sses in the area so as to allow the area to participate in fast-growing industries; protect azea from adv se economic consequences caused by slow growth or declining industries that aze dominant in the ar ; and provides essential consumer services or develops a network for businesses of local suppliers t do not currenUy exist in the area. B. How many new jobs will be created and what pay? How do proposed wages compaze to community wage levels? Will some jobs have opp nities for cazeer advancement, education, or occupational training? Are there job a owth proje ions for the project over the next 2-5 years? Are there fringe benefits a�ailable and what aze thev. C. If job loss is imminent is there bstantial evidence that the company will have to shut down involuntarily? Is there subs ial evidence that the company has received an offer to move to another state or community that is a active enough that a reasonable person would seriously consider a move for business reasons? Wh potential negative effect would the subsidy have on other competing businesses and overall ajob quality? D. Will the project term, and both c property tas bill ly affect the property taY base for ail taxing jurisdictions, both short and long and indirectly? How will the project affect other local business and individual Copeland\jobs\cw\criteria for cw Revised7-28-99 2 86 s� ss 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 I15 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 APPENDIX A The following forms of fmancial assistance are not a business subsidy: (1) a business subsidy of less than $25,000; ° -��' (2) assistance that is generally available to a11 businesses or to a general ciass of sunilaz businesses, ch as a line of business, size, location, or similaz general criteria; (3) public improvements to buildings or lands owned by the state or local govemment that se e a public purpose and do not principally benefit a single business or defined group of businesses at the tune the ' provements are made; (4) redevelopment property polluted by contaminants as defined in section 116J.552, (5) assistance provided for the sole purpose of renovating old or decaying buil provided that the assistance is equal to or less than 50 percent of the total cost; 6) assistance provided to organizations whose primary mission is to sole purpose of the assistance is to provide those services; 7) assistance for housing; (8) assistance for pollution control or abatement; / (9) assistance for energy conservation; (10) tax reductions resulting from conformity with federal (11) workers' compensation and unemployment comp a (12) benefits derived from regulation; (13) indirect 6enefits derived from assistance to ucatiom (14) funds from bonds allocated under (15) assistance for a collaboration (16) assistance for a tax increment (17) redevelopment when the more of the assessor's current (18) general changes in tax nature. 74A; law; institutions; � or bringing it up to code, readiness and training services if the Minnesota higher education institution and a business; soils condition district as defined under section 469.174, subdivision 19; �iYs investment in the purchase of the site and in site preparation is 70 percent or estimated mazket value; and fmancing law and other general tas law changes of a principally technical Copeland\jobs\cw\criteria for cw Revised7-28-99 Project Name Project Address City Contact _ APPENDIX B PUBLIC PURPOSE SUMMARY Account # Today's Dafe PUBLtC COST ANALYSIS Track # °lq -14 �- IrcCerestRate : = SubndzzedRazr j ]Yes `j �No.; [.: JN/A Type Loan RislcI�aung Accepta6Ie�5°/�res� Substandard€IQ°! )�Loss(S0�°Iozes� [ . Grant Doubtful 5Q%;res For vabie 1fl fnr'es , � , � .. _ :: � - _' . . � _.: � : ': - Tora1 Laan Snbsid '� '` "i`otal P xo"eae Cosc : '° Total Loan Subsidy: Present value of the loan over iu life, including expeae oss of principal and interest rate subsidy. PUBLIC BENEFIT A ALYSIS (Mark "1 " for Primary Ben�ts and "" for Secondary Benefits} I. Community Development Benefits Remove Blight{Polluiion " Improve HealthlS _ etyfSecuriry .. : IncreaselMairitairi Tax Base ' Rehab: Vacant Structure `. . Public Improve rits • '��t Lax producuon:, Remove Vacant Structure Goods & Se ' es A�ailabali ' esi'd ca�ces at built: � � ; � net fax change -t or Herita e'Preservation Maint�n T :Base ff. Economic Development Benefits Suppori: Vitality of 3nduscry ,: reaee I.ocal $usinesses Generate 3'rzvate Tuve�cment . S.ra6ilize Markes value etain F:ocal Businesses%. Suppozc Commercial _Activny :' Provide5elf $ncour2�e�ri[reo'shin �ncr.'IX�nmenlll%1�nnnrv$usinesses ift. Housing Development Benefits Increase Home Otivnership 5toc Addr.ess_Special I3ousing Needs:: ., -�•� unics new conscrutuon ; Retain.Hoirae O in City '; � # unics canvers�on:_ �ffarz�able Housin iV. Job lmpaCts ivin Wa e a lies [ Co orate Welfare A , _- - , ::.. _ . . _ _. I: 1 ob Im act ; [:� No ol�. Ir. _ �` O&S REAT6F� Eulltime: e� tYtiera �Caustrucubnl`.I'ei `� OBS�E7`117NEI� �lume:' er' �€ O�SLoST` �ullnnte<� ex Copeland\jobs\cw\criteria for cw Revised7-28-99 3-- � 1'ear 4:": I'ear 5. FOLLOW-UP FROM LOAN SERVICiNG PROCESS °lq -'14 a- Year 3 Fbltoinr Up Daie Pubkc �'ur�ose Ob�ectiyes Met - j _� 1'es "[ J No [` 1 Tn Pazt [) l�i� Lbnger Apphcablef AfI GoaIs 1lcfueved " Deficfences: '_ . s :; , . , Year 4 Foliow-Up . Date : Public Purpose Objectives 3YIet: {- J�Yes [ � f�to ,[ Part [` l Na Longer Applicablelt�lI Goafs Acluevecl D'eficiences: _ . Year 5 Foltow-i3p Date: Public Purpose Objectives'Met: [ 7 Yes [ No [' i' ] Tn Part [ ] No Lqnger ApplicablelAll Goals Achieved. Deficiencer. __ ' • . UP ON �OB IMPACTS � �rro JqB iivr�ACr . _ P�r:,..�,,, ;�` rvBU�c�rsrx x�v�a sizvvs / End of YearFollow-I.Fp Information (Actual Results) Year 1 Year 2 Year 3 Year 4 Year 5 me ermanerit < Avera e Wa e 3n/Tem ora ^ : : :.': dz� ermanent) Copeland\jobs\cw\criteria for ew Revised7-28-99 5 136 137 138 139 140 141 142 Program Purpose: 143 144 145 146 147 How It Works: 148 149 150 151 152 153 Minimum Requirements: 154 155 156 157 158 Eligible Costs.• 159 160 161 Fees: 162 163 164 ApprovalProcess: 165 166 167 168 169 170 171 172 173 Contact: 174 APPENDIX C TAX INCREMENT FINANCING To defray site development and Zand preparation costs developments. Tax incrementfznancingresults in incr� decreased blight, and a higher tax base. / �q.�y�- aL estate employment, The increase in real estate taxes generated by specific development project is used to subsidize those improvements neede to begin a project. One way to provide the subsidy is for the City to issue onds backed by the projected property tax increase that the improved roperty will yield. Project must be located in an ap oved Redevelopment Area and a designated tca increment district. The new construction of buidding rehabilitation must result in a significant increas an the property's tax base. Land acquisition, site Determined on a and public improvements. by case basis. The City Pla ning Commission, Capital Improvement Budget Committee, the appropriat District Planning Council, the School District, and Ramsey County must revi proposals to establish a tcrx increment district. The establishment of such a strict must be approved by the Saint Paul Housing ad Redevelopment Autha ty(HRA) and the City council. Projects within a currently existing tax incr ent district are r by the appropriate district planning council and Saint Paul Department of Planning and Economic Development (PED), 631- 266-6674. Copeland\jobs\cw\criteria for cw Revised7-28-99 6 �lg-��t�-- Coleman Requested by Department of: Planninc & Economic Develo ment BY: � ` � Form Approved by City Attomey Adopted by Council Date • �// ".� �� y ��" Adoption Certifi�.d by Council 5ecretary BY� -�t� �• '�"'� L. BY: Approved byQKayor: Date By: Copeland\jobs\cw\criteria for cw Revised7-28-99 � Approv 39 40 41 42 43 44 45 46 4? 48 49 50 51 52 53 54 55 56 57 S8 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 sz 83 84 85 5. I,oan guarantees must have participation by a private lender to assume at least 50% of risk.. �� y ' 6. Any proposal to utilize STAR funds musc be eligible under the CiTy Council adopted STAR guidelines, must be awazded the funds through the approved STAR processes. • - skourd �E �Orp�f((e��l(c� Perrxi�l'ec�uses(�m tax� 7. Proposals to utilize Tas Increment Financing� a � iAaasnurmPnte �i +6' 1 -__ _ _.,, _.� ., �ce_ ♦ ,1' - l+ / �[W �u�'1'(O ( "i'Y Y \ �'P�°aR l 8. Business subsidies in the form of grants must be structured as forgivable loans or else the eement must state the fair mazket value of the subsidy to the recipient, including the value of conveying pr erty at less than a fair market price, or other in-kind benefits to the recipient. 9. Recipient must be willing to enter into a subsidy agreement that includes: (1) a description of the subsidy, including the amount and type of subsidy, and e of district if the subsidy is taY increment fmancing; (2) a statement of the public purposes for the subsidy; (3) goals for the subsidy to be achieved within rivo years of the benefit dat , including goals for the number of full-time and/or part-time jobs created and wage and benefit goals for th se jobs. In cases where job loss is imminent and demonstrable, goals for the number of jobs retained an age goals for jobs created or retained must be inc]uded. (4) a description of ihe fmancial obligation of the recipient if the (5) a statement of why the subsidy is needed; (� a commitment to continue operations at the site where the ul benefit date; (7) the name and address of the pazent corporation of the cipie� (8) a list of a11 financial assistance by all grantors for th project. aze not met; is used for at least five yeazs after the if any; and 10. In awarding a business subsidy, City Council/HRA oazd will consider: A. In what ways the project improves the mi of businesses in the azea so as to allow the axea to participate � in fast-growing industries; protect azea om adverse economic consequences caused by slow gowth or declining industries that aze dominan n the area; and provides essential consumer services or develops a network for businesses of local s pliers that do not currently exist in the azea. B. How many new jobs will be cre ed and at what pay? How do proposed wages compare to community wage tevels? Will some johs ve opportuniries for career advancement, education, or occupational training? Are there job gro projections for the project over the next 2-5 years? Are there fringe benefits available and wh are they? C. If job loss is imminen s there substantial evidence that the company will have to shut down involuntarily? Is the e substantial evidence that the company has received an offer to move to another state or communi that is ariractive enough that a reasonab]e person wouSd seriously consider a move for business reas s? What potential negative effect would the subsidy have on other competing businesses and verall azea job quality? D. Will the pr 'ect uniquely affect the property talc base for all taxing jurisdictions, hoth short and long term, and oth directly and indirectly? How will the project affect othez local business and individual property bills? � Copetand\jobs�cw\criteria for cw Revised7-28-99 ORIG�NAt Council Fi2e # �iQ � �� v� Resolution # Green sheet # �e?3� 3. � 2 3 4 5 6 7 8 9 10 11 12 23 Presented By RESOLUTION CITY OF SAtNT PAUL, MINNESOTA 4y Referred To Committee: Date WFIEREAS, the 1999 Minnesota Legislature enacted Staiute I 16J.993-995 setting requirements for subsidies allocated to businesses by state or local government agencies; and WFiEREAS, local govemment agencies aze ckiarged with hoiding a public hearing and adopting a set of criteria for awazding business subsidies that comply with this statute; now therefore be it RESOLVED that ttie Council of the city of Saint Paui does hereby set a public hearing for Wednesday, August f�, 1999, on the following criteria; and be it FURT'HER RESOLVED, that the following criteria be adopted. C.RITERIA FOR AWARDING ST7BSIDIES TO BUSINESSES SUBJECT TO T'HE REGULATIONS � 16 17 A snbsidy is de£med as "state or local govemment agency grant, contriburion of personal property, real property, 18 infrastructure, the principa] amounY of a loan at rates below those commercially available to the recipient, any 19 reducrion or deferral of any tax or any fee, any guarantee of any payment under any loan, lease, or other obiigation, or 20 any preferenrial use of government facilities given to a business." To be subject to these requirements a subsidy must 2 2 be $25,000 or more. Eighteen excep6ons to these requirements aze set out in the legislafion and are a4tached hereto 22 as Appendix A. 23 24 i. 25 26 27 28 29 2. 30 31 32 33 3. 34 35 36 4_ � AND REPORT'ING REQUIItEMENTS OF THE MIlYNESOTA BUSINESS ASSISTANCE ACT A business subsidy must have a defined p¢btic purpose as shown in the Public Purpose Summary that accompanies projects going to PED Credit Committee, City CounciI, and the HItA. The Public Purpose Summary (see Appendix B) must also show any job crea4on or retention goals established including the proposed wages and benefits broken down by wage level. Applicant must be a business tocated in or moving into the city Iimits of ffie City of Saint Paul. Tlus includes not-for-profit businesses with at Ieast 100 full-time equivalent posirions and with a rario of lughest to lowest paid employee that exceeds ten to one. Proposals for direct Ioans must fust attempt and be unable to obtain private financing before applying for city funding. Proposals can be for any business purpose. Except refinancing of existing debt other than FIRA/City debt is not done unless iY will improve the CiTy/HRA collateral position to the repayment ability of City/E�2A loans. Copeland\jobs\cw\criteria for cw Revised7-28-99 � :�b S +;-t-�.�� R�.as , ia�� Councit File # �q - �� Green Sheet # RESOLUTION Al�1T PAUL, M1NI�ESOTA Presented by Referred To Date Resolution Authorizing a Public Hearing and Adopting Criteria for Awarding Business that Comply with the 1999 Minnesota Business 1 WHEREAS, the 1999 Minnesota Legislature enacted Statute 116J.993 2 allocated to businesses by state ar local govemment agencies; and 3 WHEREAS, local government agencies including the Housing and 4 Saint Paul, Minnesota (HRA) are charged with holding a public hea 5 awarding business subsidies that compiy with ttus statute; now th� Law requirements for subsidies evelopment Authority of the City of and adopting a set of criteria for be it 6 RESOLVED, that the Housing and Redevelopment Authori of the City of Saint Paul, Minnesota does hereby 7 set a public hearing for Wednesday, August ll, 1999, on following criteria; and be it 8 FURTHER RESOLVED, that the following criteria b�adopted. CRITERIA FOR AWARDING 10 11 AND REPOR' MINNE50T BUSINESSES SUBJECT TO THE REGULATIONS REQUIREMENTS OF THE ASSISTANCE ACT 12 A subsidy is defined as "state or local 13 infrastructure, the principal amount of 14 reduction or deferral of any tax or any 15 obiigarion, or any preferential use o g 16 requirements a subsidy must be $,0( 17 and the investment in housin� re uirei 18 exceptions to these re 19 1. A business st 20 accompanies 21 base may not 22 as a public pti 23 Appendix B�j' 24 wages and�Iie �y�rnment agency grant, contribution of personal property, real properiy, �oan at rates below those commercially availabie to the recipient, any e, any guazantee of any payment under any loan, lease, or other ernment facilities given to a business." To be subject to these or mare. 5ma11 businesses are exempt from the living waee requirement nt found in the reciroient r uirements section of this criteria. Eighteen are set out in the legislation and are attached hereto as Appendix A. �sidy ust have a defined public purpose as shown in the Public Purpose Suinmary that �ro' cts going to PED Credit Committee, City Council, and the HRA. Increasing the tax b used as a public purpose under MN Statute 116J.993-995 nor can job retention be used ose wiless "job loss is imminent and demonstrable." The Public Purpose Summary (see must also show any job creation or retention goals established including the proposed iefits broken down by wage level. 25 2. Appli t must be a business located in or moving into the city lunits of the City of Saint Paul. This 26 incl es not-for-profit businesses with at least 100 full-fime equivalent positions and with a ratio of 27 highest to lowest paid employee that exceeds ten to one. q9 -� ya- 28 3. Proposals for direct loans must first attempt and be unable to obtain private financing before applying for 29 city funding. 30 4. Proposals can be for any business purpose. Except refinancing of eatisting debt other than ffi2A/City 31 debt is not done unless it will improve the City/EIIZA collateral position or the repayment abiJ�ty of 32 City/FII2A loans. � 33 5 34 6. 35 STAR guidelines, 36 7. Proposals to utilize TaY Increment Financing should be for all legally 37 financing under MN 469. (See Appendix C). 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 S6 57 58 59 60 bl 62 63 64 65 66 67 68 69 70 uses for taY increment 8. Business subsidies in the form of grants must be structured as forg' able loans or else the agreement must state the fair market value of the subsidy to the recipient, i uding the value of conveying property at less than a fair mazket price, or other in-kind bene s to the recipient. 9. Recipient must be willing to enter into a subsidy agreeme that includes: (1) a description of the subsidy, including the amount a type of subsidy, and type of district if the subsidy is tax increment financing; (2) a statement of the public purposes for flie subsi ; Loan guarantees must haue participation by a private lender to assume at least 50% Any proposal to utilize STAR funds must be eligible under the City Council and must be awarded the funds through the approved STAR processes. livin�wage�ob per $25,000 of subsidy� (4) goals for the subsidy to be achieved wit n two yeazs of the benefit date, including goals for the number of fixli-time and/or part-time jobs reated and wage and benefit goals that meet all City of Saint Paul ordinances and resolutions regardi g business subsidy wage and job goals. In cases where job loss is imminent and demonstrable, goals r the number of jobs retained and wage goals for jobs created or retained must be included. training Saint Paul workers; n of the financial obligation of the recipient if the goals are not met; of why the subsidy is needed; .nt to continue operations at the site where the subsidy is used for at least five years after th benefit date; (13) e name and address of the parent corporation of the recipient, if any; and (14 a list of all fmancial assistance by all grantors for the projeet. (10) a (11) a (12) a � 71 l0. 72 73 74 75 76 77 78 79 :' : .� : Preference will be �iven to applicants meeting the following criteria: �1) a demonstrated hi ng er target percenta�e of hues far Saint Paul residents: 11. In awarding a business subsidy, City CounciUHRA Board will consider: A. In what ways the project improves the mix of businesses in the participate in fast-growing industries; protect area from adverse by slow growth or declining industries that are dominant in th consumer services or develops a network for businesses of 1 cal exist in the azea. cl � - ' i �-�' are so as to allow the area to onomic consequences caused area; and provides essential suppliers that do not currently 86 B. How many new jobs will be created and at what pay? ow do proposed wages compare to 87 community wage levels? Will some jobs have opp ities far career advancement, educafion, 88 or occupatSonal training? Are there job growth p jections for the project over the next 2-5 89 years? Are there fringe benefits auailable and at are they? 90 C. If job loss is imminent is there substantial idence that the company will have to shut down 91 involuntarily? Is there substantial evide e that the company has received an offer to move to 92 another state or comnnunity that is am tive enough that a reasonable person would seriously 93 consider a move far business reason What potential negative effect would the subsidy have on 94 other competing businesses and ov all azea job quality? 95 96 97 98 12. 99 100 D. Will the project uniquely affec e property taY base for all ta��ing jurlsdictions, both short and long term, and both directly d indirecfly? How will the project affect other local business and individual property tax biil . Any subsidy agreement subjec o MN 5tatute 116J.993-995 must be approved by the local elected goveming body. 3 APPEND�Y A The following forms of fmancial assistauce aze not a business subsidy: (1) a business subsidy of less than $25,000; (Z) assistance that is generally available to all businesses or to a general class a line of business, size, location, or similar general criteria; °l� _'1'1 � businesses, such as (3) pubiic improvements to buiidings or lands owned by the state or local ernment that serve a public purpose and do not principally benefit a single business or defined gro p of businesses at the time the improvements aze made; (4) redevelopment properry polluted by contaminants as defined � section 116J.552, subdivision 3; (5) assistance provided for the sole purpose ofrenovating old or provided that the assistance is equal to or less than 50 percent c 6) assistance provided to organizations whose primary the sole purpose of the assistance is to provide those s 7) assistance for housing; (8) assistance for pollution control ar abatement; (9) assistance for energy conservation; (10) tax reductions resulting from (11) workers' compensation and (12) benefits derived from (13) indirect benefits derived (14) funds from bonds (15) assistance for a (16) assistance for a 19; (17) ,tXng building stock or bringing it up to code, total cost; to provide job readiness and training services if with federai tax law; compensation; assistance to educational institutions; under chapter 474A; between a Minnesota highez educafion institution and a business; financing soils condition district as defined under section 469.174, subdivision when the recipient's investment in the purchase of the site and in site preparation is 7Q percent or more of the ssessor's current yeaz's estimated market value; and (18) gen changes in taY increment fmancing law and other general tax law changes of a principally technical nature. a ; ^�ojecf Name _ �-roject Address City Contact _ PUSLIC PURP�SE SUMMARY - Account # _ Today's Date . PUBLtC COST ANALYSIS ' 'fracic # � ,' ��_��la- � TotaI Loan Subsidy: Present value of the loan over iu life, induding expected los of principal and interest race subsidy. PUBLIC BENE�IT AN YSIS (Mark "1 " for Primary Benefits and "2" or Secondary Benefits) 1. Community Development Benefits .. _. : �.. . ..., .. .:::..,, , . . . .. ., ... ,.. . .:.;.,: � ` RemoveBlig6t/Polluuon :�; �..<;. ImproyeHealtfilSaf 1Secu'rity . `:->: Increase/MaintairiTa�$ase:t:•: ' Rehab. Vacant Structure Public Improvein ts t'�rrent cax pro3ucnon b '•1 . Re`move Vacant Strncture t�: � �`: ( ' � Herita e' Pre'servation'> `' �" ' `% r Il. Economic Development Benefits S..' .<:t�: :_� '. $uPPori:�itality`ofIiiduscry�y;;j$<;. .... _. - .:k::Py.: ..1:.`Q...�i:.:... �..._...,. � ' �` Pro.'vide 5elf-Er. 111. Housing Devel `� Iricrease'I-�ome ��::� ��:� ucuu new.cc 1V. Job :. ��YY.^:".;. �i � : �.'a � : 5 ;:::e e:c d caxe: as w s. :.. . ityi �:�.•neCtaxchange;i,oc-: "r; ,:��: :>ss , A Welfare eaz7; Conelandliobs\cwleriteria for ew Revised7-28-99 /T � FOLLOW-UP.FROM LOAN SERVICING PROCESS ar; 4.�Folloinr-Up,. blicl?urpose Objec , . <.. ._.. . .,� -.. ,:,.,. , .. ... . -: .. . : • .. :;a ;,:'". - :::._; �,.:>>:' . ;.:�<.: ..::....:..., :, .....: ..,,: ,... . .:..:,�: <: ::;, , D`eEiciences: _ ,. <....: ,.:. , .... ,. �M "�ar S:Follow-Up � _. �, ;; ;: . .�. . �;;: : � , rublic Purpose Objectiyes'Ivlet: [,:] Yes [�. ``] No [�'` ] In rt.'.[' `] No Longer Appl. Deficiences: ` FOL10W-UP N )OB IMPACTS , {�' • ;� NO JOB��MPAG'T.: , " # OBS C� >:.`>. e �erm; � r.3 ..\ � ' .. +__��....�`. . �:,� ri<�:��'�'..' ��:� , ii:. � �.A� ;.>• !� n _ PUBLPURPSIR Revifed Sh7/96 �� `t_'1�tti-- :>;= . .]>::;::.".:i;%;�:� `�`::' I,Goals�Acliieve��.� 1_Goals AcHieczd. 4 Year 5 Copeland�jobs�cw\criteria for cw Revised7-2S-99 P� APPENDIX C TAXINCREMENT FINANCING � ProgramPurpose.• Todefraysitedevelopmentandlandpreparationcostsforrealestate evelopments. Taz increment fznancing results in increased employment, decrea d blight, and a higher tax base. How It Works: The increase in real estate taxes generated by a specific devel pment project is used to subsidize those improvements needed to begin a project. On way to provide the subsidy is for the City to issue bonds backed by the projected operty tcix increase that the improved property will yield. Minimum Requirements.• Project must be located in an approved Re velopmentArea and a designated tax increment district. The new constructio of building rehabilitation must result in a significant increase in the property's ar base. EZigible Costs: Fees: Land acquisition, site preparation, and jlublic improvements. Determined on a case by cptse basis. Approval Process: The Ciry Planning ommission, Capital Improvement Budget Committee, the appropriate Distri t Planning Council, the School Dish-ict, and Ramsey Counry must review prop sals to establish a ta:� increment district. The establishment of such a district ust be approved by the Saint Paul Housing ad Redeveloprnent Authority (H ) and the City council. Projects within a currently existing tar increment strict are reviewed by the appropriate districtplanning council and the HRA. Contact: af Paul Department of Planning and Economic Development (PED), -266-6b74. � � Yeas Nays Absent Benanav Blakey Bostrom Coleman Hazris Lanhy Reiter Adopted by Council Adoption Certified t By: Approved by Mayor By: q �,��tY � b Requested by Deparlment of: 8-17-1999 9:51AM FROM MAPA / ACT 651 6Q1 ae53 P-� MiMlIESOTA ' ALLIAMCE (Of � ►R06RESSIVE AtT10N / - ` - P . aC6aei Adwcating Ctwngt Tagether AFSCME foun<ils 6, u.65 AFSCME Local 66— NE MN Alffance oF the Sueeu � BIHA women in Acuon CICan Weltf AClNn Allie�t¢ CommumryACtion of Mmneapolit /UELooliuo MN Ameriwns fw OemocracNcACdon MH assoriatwn of Rofe�ioial EmDlnYeet MN �OACf MH Conln'ankrCneHOmeless MN Communiry Action 0.uociation MN Conwmer Aillance MN NaKonai Orgenixation for Women Mrv Seoior Federafion rva�ionsl wwyers Guild — Minnesota Outfront M�nncSOla . SEIUSdteCOUncil#7 UNttE—NOrtAem Digrict�olnt BoarQ . Uni(edAYtowpfRe�S Unfted St¢ei Wo�kers of Amenca—Dlstdtta� Onited Tmnsportatiort Unlon Wban Welhbn Women l�qainst Nu'Gtary Maanesz .„�ga. � �� 2- ��`�� 0 FAX TRANSMISSXON DATE: TO. August 11,14fl9 St Paul City Council Members Fa� 266-8574. FROM; Beth Frasex, Public Policy Organizer . Minnesota Alliance for Progressive Action Phone: 651-641-4050 Fax: 651-641-4A53 T2E: Criteria for Bnsimess Sul�sidies YAGES (inctuding covei): 3 COMMENTS: The atEack�ed let�ex is in ieference to to�'s public heaxing on the PED's pioposal foz ctiitecia for business subsidies. MINNESOTA ALItAMCE f07 9ROGAESSIVE qCT10N 8-i1-1999 9:57AM FROM MAPA / ACT 651 6a1 a853 •1�11NESOTq ALLILMCE fOt OR06YESSIVF ACTi9N • - \ � P qCORN AOvocatiRqChaageTOgether AFSCME CounclLs 6. �4. b5 AFSGME �ow166-NE Mn nlbance of the Saeets BIHA Women in Actbn Y1ean waMr Action nl6ancc Communiry ActioM1af Minneapolu - IUElocalupo � MN Amer((y�s for Democra<ticACtion Date: August 11,1999 _ To: St. Paul City Co,uncil Members From:Beth Fraser, Pnblic Policy Organizer : Re: Criteria for Business Subsadies P. 7 ��-��` This past spring the Minnesota Legislature passed the 1999 State Business Subsidy Act. With this action, our elecEed leaders respondetl to concemed cifizens from around the state. who . deznanded more accountability when public money is used to subsidize privafe businesses. . This ground-breaking legislation will change the ctimate in which subsidies are given, making sure that they aze no longer seen as "business as usual." Each graniing agency around the state'is now charged with the task of developing sfandard criteria by which they will evaluate all future su.bsidy proposals. I have review�d and have three serious concerns about the PED's proposed criteria for awarding fufiure business "subsidies. Mr,n�«;,c;o�,f " First of all, I do nof believe that the resolution brings the City of "°`�n`°"'` Saint Paul, into compliance with the 1999 State Business Subsidy ' MN COACT Ac� To begin with tkus resoiution does not indude standard � '""c°"�c�^r�a,°"°�^^e'� criteria for evaluafing subsidy proposaIs, but instead questions Ehat tdNCommuoityActionAssodatbn need Eo be considezed. My understanding of the term "CI1tEI13" 'MNCOnsumerAlliance leads me to believe that the Council s2tiouId oufline answers to MN NadOnslbrggnixeRon �� quesEions that they would find acceptable. This �would aliow � for Women MNSenibrFederatio� �''e rnrnmuniry and businesses consideririg applying for subsidies a clear understanding of the types of projects in which the City o# Netlon3149wyer5 GY�10 - . M;��,,, Saint Paul is willing to invest public money and the community o�cr�,�„n;�„�,� standards to which they wili be held.: � SE1u sWa council C7 UNITE -Ne.them District �aint Board UnitcOAUto Warkers United Steel Workers of a�cno. _ otst.¢r u UniceC Transportstion Union Urban Coalition Women Against Mili[ary MOdness _�. 1821 Up1YER51SY AVSNUF" SUITE $•307 � Sr. Pnul, MN Si104 In addition, it is noE clear to me from the information provided in the two page resolution that this proposal fulfills the statutory requirement thaE the criteria include a policy on wages. This . proposal may reference a wage policy found elsewhere in city ordinances with the statement that, "a subsidy agreement [must) include ... wage and benefit goals that meet all City ordinances and resolutions regazding business subsidy and wage and job goals." If this is the case, Ehen the proposal may be in cozztpiiance with the IetEer of the new law. Whether it is in compliance with the intent of the law, however, is a differenf mat�er. The point of xequiring a public hearing when esfabtishing the criEeria for subsidy pzoposals was to ensure that the community was gi�e�a the opportunity eo review and spsak out about the proposed critezia. Failirig Eo clearly '�' �652)64i•ya5o fax � ( e•mafl Staff�mapa•mn.org 8-11-7999 9:59AM FROM MAPA / ACT 651 6a1 �53 P_1 (� C� �' l �1 ..� state the proposed wage polzcy (if there is one at all) cheats St. Paul citizens by not giving them enough information to make informed judgments about this proposal. If the intent is to fuifill the requirement for a wage policy by referencing the City's Living Wage Policy, this raises a number of questions. The threshold for SE. Paul's Living Wage Policy is $100,OD0. The state law covers all subsidies over $25,000. There are numerous types of subsidies that are exempt from the Living Wage Policy, but are covered by the 1939 State 'Busin2ss Subsidy Act Is the intent to bzoaden the City's Living Wage Policy to cover a11 subsidies over $25,000? If not, then what is the pzoposed wage policy for subsidy proposals that ars not covered by the City's Living Wage Policy? F'inally, section 8 of the resolution, which requires that grants "be structured as forgivable loans or else the agreement must state the fair market value of the subsidy to the recipient;' is definitely not in compliance with the new statute. The 1999 State Business Subsidy Act requ'rres granting agencies m stop the pracEice of giving subsidies as grants. A subsidy that would have been structured as a grant must now be struchued as a forgivable loan. Subsidy agreements for other types of subsidies (TIF, loans, etc•) must state the fair market value of the subsidy to ehe recipient. Section 8 of the resoiution needs to be rephrased to come into compliance with the new law. Allowing the public to give informed input on standard criteria for subsidy proposals is a critical piece of the 1999 State Business Subsidy Act. I urge you to rnnfinue Eoday's public hearing until August 25th to r,,.i've yourselves and the PED staff fiime to redraft these criteria, keeping in mind the intent ot this legislation and the weight of the res given to you when you choose to invest our hard- earne tax ollars in privaEe enterprises. Thank you for your time and attention to this znatter. If you would like to discuss this further or have any questions about my concerns, please contact me at the MAt'A office. Council File # gg -�y � S �.bs�'� �w�� A�cr� e a V e,�cs:orl� Presented by Referred To �. — S ep$, � 194'l RESOLUTION OF Green Sheet # Committee Date Resolution Authorizing a Public Hearing and Adopting Criteria for Awarding Business Subsidies that Comply with the 1999 Minnesota Business Subsidies Law 1 WHEREAS, the 1999 Minnesota Legislature enacted Statute 116J.993-995 setting requirements for subsidies 2 allocated to businesses by state or local government agencies; and 3 WHEREAS, local government agencies including the Housing and Redevelopment Authority of the City of 4 Saint Paul, Minnesota (HRA) are charged with holding a public hearing and adopting a set of criteria for 5 awarding business subsidies that comply with this statute; now therefore be it 6 7 RESOLVED, that the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota does hereby set a public hearing for Wednesday, August 11, 1999, on the following criteria; and be it FURTHER RESOLVED, that the following criteria be adopted. 10 11 12 13 14 15 16 17 18 CRITERIA FOR AWARDING SUBSIDIES TO BUSINESSES SUBJECT TO THE REGULATIONS AND REPORTING REQUIREMENTS OF THE MINNESOTA BUSINESS ASSISTANCE ACT A subsidy is defined as"state or local government agency grant, contribution of personal properry, real properiy, infrastructure, the principal amount of a loan at rates below those commercially available to the recipient, any reduction or deferral of any taac or any fee, any guarantee of any payment under any loan, lease, or other obligation, or any preferential use of government facilities given to a business." To be subject to these requirements a subsidy must be $25,000 or more. Small businesses, as defined by Council File #94-1512, are exempt from the living wage requirement. Eighteen exceptions to these requirements aze set out in the legislation and are attached hereto as Appendix A. 19 1. A business subsidy must have a defined public purpose as shown in the Public Purpose Snminary that 20 accompanies projects going to PED Credit Committee, City Council, and the HRA. Increasing the tas 21 base may not be used as a public purpose under MN Statute 116J.993-995 nor can job retention be used 22 as a public purpose unless "job loss is iimninent and demonstrable." The Public Purpose Sununary (see 23 Appendix B) must also show any job creation or retention goals established including the proposed 24 wages and benefits broken down by wage level. 25 2. Applicant must be a business located in or moving into the city limits of the City of Saint Paul. This 26 includes not-for-profit businesses with at least 100 full-tune equivalent positions (FTEs) and with a 27 ratio of highest to lowest paid employee that exceeds ten to one. L, MINNESOTA �� t 28 3. Proposals for direct loans must first attempt and be unable to obtain private financing before applying 29 for city funding. Gt� _`l'-� a 30 4. Proposals can be for any business purpose. Except refinancing of e�sting debt other than HRA/City 31 debt is not done unless it will improve the City/HRA collaterai posirion or the repayment ability of 32 City/HI2A loans. 33 5. Loan guarautees must have participarion by a private lender to assume at least 50% of risk. 34 6. Any proposal to utilize STAR fixnds must be eligible under the City Council adopted STAR guidelines, 35 and must be awazded the funds through the approved STAR processes. 36 7. Proposals to utilize Taac Increment Financing must be for land acquisition, site prepararion, and public 37 improvements and must follow the taac increment approval process. (See Appendix C). 38 8. Business subsidies in the form of grants must be structured as forgivable loans or else the agreement 39 must state the fair mazket value of the subsidy to the recipient, including the value of conveying 40 property at less than a fair mazket price, or other in-kind benefits to the recipient. 41 9. 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 Recipient must be willing to enter into a subsidy agreement that includes: (1) a description of the subsidy, including the amount and type of subsidy, and type of district if the subsidy is taac increment financing; (2) a statement of the public purposes for the subsidy; (3) goals for the subsidy to be achieved within two years of the benefit date, including goals for the number of full-time and/or part-time jobs created and wage and benefit goals that meet all City of Saint Paul ordinances and resolutions regarding business subsidy wage and job goals. In cases where job loss is imminent and demonstrable, goals far the number of jobs retained and wage goals for jobs created or retained must be included. (4) a statement that the recipient does not haue an ongoing unresolved adverse acrion on their record with OSHA or the EPA; (5) a statement that the recipient has a company-wide standazd Affirmative Action policy; (6) a description of the financial obligation of the recipient if the goals aze not met; (7) a statement of why the subsidy is needed; (8) a commitment to continue operations at the site where the subsidy is used for at least five years after the benefit date; (9) the name and address of the parent corporation of the recipient, if any; and (10) a list of all financial assistance by ali grantors for the project. 59 10. Preference will be given to applicants meeting the following criteria: 60 (1) a demonstrated higher target percentage of hires for Saint Paul residents; 61 (2) demonstration of employer contributions made to employee child care and retirement accounts; 62 (3) participation in responsible labor relations. To the extent legally possible, preferential status for job 63 creation and retention assistance will be given to businesses that engage in responsible labor relarions. 64 Responsible labor relarions aze defined as neutrality on union organizing, providing a complete and 65 accurate list of names and addresses of employees, reasonable access to employees and facilities during 66 non-working periods, voluntary recognition based on a card check demonstrating that a union 67 represents a majority of employees in a bazgaining unit, and binding azbitrarion on the first contract. 68 (4) a requirement that if job crearion/retention is the primary development objective, recipients are 69 required to create (or, in cases where job`loss is �mminent and demonstrable, retain) at least one full- 70 time living wage job per $25,000 of subsidy; 71 (5) a requirement that recipients with at least 100 FTEs invest a portion equal to 5% of their loan or 2 q �.q9 72 grant for training Saint Paui workers; �� 73 (6) a requirement that employers with at least 75 FTEs offer employees the opportunity to participate in 74 a health caze program which includes an employer contribution; 75 (7) a statement that recipients with at least 100 F'I'Es will dedicate a portion of their loan or grant to a 76 program encouraging housing opportwrities for their employees within the job creation period of the 77 assistance.. This assistauce may be in the form of advances for down payments or closing costs, grants 78 for house or properry acquisition, or partnerships with affordable housing agencies or lenders; 79 11. 80 81 82 83 84 In awarding a business subsidy, City CounciUHRA Board will consider: A. In what ways the project improves the mix of businesses in the area so as to allow the azea to participate in fast-growing indushies; protect area from adverse economic consequences caused by slow growth or declining industries that aze dominant in the area; and provides essential consumer services or develops a network for businesses of local suppliers that do not currently e�st in the area. 85 B. How many new jobs will be created and at what pay? How do proposed wages compaze to 86 comxnunity wage levels? Will some jobs have opportunities for cazeer advancement, education, 87 or occupational training? Are there job growth projections for the project over the next 2-5 88 years? Are there fringe benefits auailable and what aze they? 89 C. If job loss is imminent is there substantial evidence that the company will have to shut down 90 involuntarily? Is there substantial evidence that the company has received an offer to move to 91 another state or community that is amactive enough that a reasonable person would seriously 92 consider a move for business reasons? What potenrial negative effect would the subsidy have 93 on other competing businesses and overall area job quality? 94 95 96 97 12. 98 99 D. Will the proj ect uniquely affect the property ta�c base for all tasing jurisdictions, both short and long term, and both directly and indirectly? How will the project affect other local business and individual property tas bills? Any subsidy agreement subject to MN Statute 116J.993-995 must be approved by the local elected governing body. * �� _ � � �n The following forms of financial assistance aze not a business subsidy: (1) a business subsidy of less than $25,000; qg �-� y � (2) assistance that is generaliy available to all businesses or to a general class of similaz businesses, such as a line of business, size, locarion, or sunilar general criteria; (3) public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) redevelopment property polluted by contamivants as defined in secrion 116J.552, subdivision 3; (5) assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code, provided that the assistance is equal to or less than 50 percent of the total cost; 6) assistance provided to organizations whose primary mission is to provide job readiness and training services if the sole purpose of the assistance is to provide those services; 7) assistance for housing; (8) assistance for pollution control or abatement; (9) assistance for energy conservation; (10) tas reduc6ons resulting from conformity with federal tas law; (11) workers' compensation and unemployxnent compensation; (12) benefits derived from regularion; (13) indirect benefits derived from assistance to educational institutions; (14) funds from bonds allocated under chapter 474A; (15) assistance for a collaboration between a Minnesota higher education institution and a business; (16) assistance for a tax increment financing soils condition district as defined under section 469.174, subdivision 19; (17) redevelopment when the recipienYs inveshnent in the purchase of the site and in site prepararion is 70 percent or more of the assessor's current year's estimated market value; and (18) general changes in tas increment financing law and other general ta�c law changes of a principally technical nature. ��,q� ^�oject Name . -roject Address Cify Contact _ PUBLIC PURPOSE SUMMARY � Account # Today's Date PUBLIC COST ANALYSIS Track # _ . � qq-��- '+ Total Loan Subsidy: Praent value of the loan over iu life, inciuding er.pected loss of principal and intuat rate subsidy. PUBLtC BENEFIT ANALYSIS (Mark "1 " for Primary Benefits and "2" for Secondary Benefzts) i. Community Development Benefits . , : : ;, . ,.. , .: .. <. - ' °' ReinoveBlight/PolIution :r ;�:.:;>': Imp"rode:Health%Safe /Secuii ° Inciease/Mairitairi_Ta�Bzse::.i." tY LY ' Rehab. Vacant Stru'crure i PublicImproyements ` r'' �rrent nx pro3ucuon , <.. . -. . , < - ,. :::.. :, ;. . . . ;>:a:. ess'd iaxes u'builr.::. ' Remove Vacant Str'uctdre , Goods `SC Semces Availability: `':. nei iax chmoe'+':oi�-: .. ... > ., . :.:..:.. .: :. ..:.' .. . .{ .M�. :.' ;.t D_y� n ' t . e: .' , ".: i . . . . . . .. ..: ...i �. � �L �' .� � . +. . .. '�..i.t : .. . ... <.... .. ... . .:...... .. :� : . , i i.: '.-�' i 5. . :.i:�e:::.:.:. _/. �.�.:.: ...,�:�:' Herita e Preservauoii`:�?' ^ " ` Muntaui Tax Base :?:::< :::,;. , .:..°._ °,, :; ` _ ::�:< . .:.:.. , .. .�;:� :> .. : , : Il. Economic Development Benefits ` Provide? Iti. Housing I i-T_ :.— IV. Job � : Benefits hip Stock^, � 5; e (:onetand�iobslewicriteria for cw Revised7-28-99 /* � tOLLOW-UP.tROM LOAN ,ERVICING t'ROCESS `i`��`1�{�. "aar:5`Folloiv-U '4::: ;,>:.€:>:'=; ,p . ...... ... ,...,,. rublic Purpose Objectives 2v1et: [ ] Yes [:'.:.� No `� Deficiences: _ . . . PUBtPURPS[ft R<riud 5/2tl96 � In Part: [ `' ) No FOLLOW-UP ON �OB IMPACTS Copeland�jobskw\criteria for cw Revised7•28-99 P� ll Goals'Acliieced. � i � / I_��i►`1�7►�i7 TAX INCREMENT FINANCING Program Purpose: €'�� _� � �'- To defraysite development and landpreparation costsfor real estate developments. Tax increment ftnancing results in increased empZoyment, decreased blight, and a higher tax base. How It Works: The increase in real estate taxes generated by a specific development project is used to subsidize those improvements needed to begin a projecz One way to provide the subsidy is for the City to issue bonds backed by the projected property tax increase that the improved property will yield. Minimum Requirements: Project must be located in an approved Redevelopment Area and a designated tax increment district. The new construction of building rehabilitation must result in a significant increase in the property's tax base. Eligible Costs: Fees: Approval Process: Contact: Land acquisition, site preparation, and public improvements. Determined on a case by case basis. The City Planning Commission, Capital Improvement Budget Committee, the appropriate District Planning Council, the School District, and Ramsey County must review proposals to establish a tax increment district. The establishment of such a district must be approved by the Saint Paul Housing ad Redevelopment Authority (HRA) and the City council. Projects within a currently existing tax increment district are reviewed by the appropriate districtplanning council and the HRA. Saint Pau1 Department of Planning and Economic Development (PED), 651-266-6674. � � /�� / � Yeas Na s Absent Benanav �/ Blakey ✓ Bostrom � Coleman � Harris � Lantry � Reiter � � � Adopted by Council: Date � /yqq Adoption CemSed by Council Secretary � _� �{ 2-- Requested by Deparhnent of: � Form Approved by City Attorney , / ../ .� ��,.� � � / � ♦ / B y' `�-- Approved by Mayor for Submission to Council Approved by Mayor: Date ° 1��`I By: By: �'f/�/(, /� D & Economic Aug. 4, 199 TOTAL # OF SIGNATURE PAGES To allow us to adhere to the criteria_for awarding subsidies to businesses subject to the regulations and reporting requirements of the Minnesota Business Assistance Act. PLANNING CAMMISSION CIB CAMMITTEE CML SERVICE CAMMISSION DAiE1NR1ATFD 7/28/99 GREEN SHEET � �.,u,� �,� � �„�.. _ ❑ �..,,�. ❑ �„� ❑.n.,r,.�a�av�e�so.. ❑wuw�.,.�umr�cc.o ❑ rAVORtoR�iffirANr1 ❑ (CLIP ALL LOCATIONS FOR SIGNATURE) Has ihis GersoNfitm everwarked uMM e canhact fw �his depsrtmenl? VES NO Has ihis pe�sorJfirm ever been a dty anpbyee7 YES NO Ooes fhis 7��m P� a sidll not normallYW� M' any curtent ctilY emPbyee7 YES NO Is Mis pe�soNfirtn a targMetl ventloYt rES rio olain all ves a�e�s on senerate sheet arM attach to arcen sheet �Y) alq-'1`t�- No 62372' IFAPPROVED AMOUNT OF TRANSACTION CAST/REVRIUE BUDfiETED (CIRCLE ON� YES NO ACTNITY NUMBER Cour€� Research Ce�ter JUL �6��:� �lgl�i RESOLUTION PAUL, MINNESOTA Presentea Committee Date \ Resolution Authoriaing a Public Hearing and ,% Adopting Criteria for Awarding Business Subsidi�s that Comply with the 1999 Minnesota Business Subs}c�ies Law i 1 WHEREAS, the 1999 ' esota Legislature enacted Statute 116J.993-9fr5 setting requirements for subsidies 2 allocated to businesses by te or local government agencies; and f 3 WHEREAS, local government agencies including the Housing Redevelopment Authority of the City of 4 Saint Paul, Mivnesota (HRA) are charged with holding a public earing and adopting a set of criteria for 5 awazding business subsidies that comply with this statute; no therefore be it 6 RESOLVED, that the Housing and Redevelopment Au rity of the City of Saint Paul, Minnesota does hereby 7 set a public hearing for Wednesday, August 1 l, 1999, the following criteria; and be it 8 FURTHER RESOLVED, that the following c�teda be adopted. 9 CRITERIA �OR AWARDING 10 AND 11 MIl1 12 13 14 15 16 17 18 TO BUSINESS co�o�a Fae # 9 �- ��a s�bs Green Sheet # a R�e�.�,e�, SUBJECT TO THE REGULATIONS CS OF THE .NCE ACT A subsidy is defined as "state or loc�'government agency grant, co 'bution of personal property, real properry, infrastructure, the principa'1 amount of a loan at rates below th e commercially available to the recipient, any reducfion or deferrp7 of any tax or any fee, any guarantee of � payment under any loan, lease, or other obligation, or any pref�rential use of govemment facilities given to a business." To be subject to these requirements a subsidy must be $25,000 or more. Small businesses, as defined bi�Council File #94-1512, are exemnt from the livine wape reauirement. Eighteen excepfions to these requirements are set out in the legislafion and are attach� hereto as Appendix A. 19 1. A business s sidy must have a defined public purpose as shown in the Public Purpose Suimnary that 20 accompani s projects going to PED Credit Committee, City Council, and the I�RA. Increasing the taY 21 base may ot be used as a public purpose under MN Statute 116J.993-995 nor can job retention be used 22 as a public purpose unless "job loss is imminent and demonstrable." The Public Purpose Sumuiary (see 23 Appendix B) must also show any job crearion or retenfion goals established including the proposed 24 wages and benefits broken down by wage level. 25 2. Applicant must be a business located in or moving into the city limits of the City of Saint Paul. This 26 includes not-for-profit businesses with at least 100 full-time equivalent positions (FTEs) and with a �tq�,� z� 28 3. 29 30 4. 31 32 33 5. 34 6. 35 36 7. 37 ratio of highest to lowest paid employee that exceeds ten to one. �9��a Proposals for direct loans must first attempt and be unable to obtain private financing before applying for city funding. Proposals can be for any business purpose. Except refinancing of existing debt other than HRA/City debt is not done unless it will improve the City/HRA collateral position or the re ayment ability of City/HRA loans. Loan guarantees must have participarion by a private lender to assume at ast 50% of risk. Any proposal to urilize STAR funds must be eligible under the City and must be awarded the funds through the approved STAR proces,s Proposals to urilize Tax Increment Financing must be for land improvements and must follow the taac increment approval pr�' adopted STAR guidelines, >ition, site prepazation, and public (See Appendix C). 38 8. Business subsidies in the form of grants must be structur as forgivable loans or else the agreement 39 must state the fair market value of the subsidy to the re pient, including the value of conveying 40 property at less than a fair mazket price, or other in- d benefits to the recipient. 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 9. Recipient must be willing to enter into a subsidy greement that includes: (1) a description of the subsidy, including the ount and type of subsidy, and type of district if the subsidy is taY increment financing; (2) a statement of the public purposes for subsidy; (4) goals for the subsidy to be achie ed within two years of the benefit date, including goals for the number of fu11-6me and/or part- ' e jobs created and wage and benefit goals that meet a11 City of Saint Paul ordinances and resolurions gazding business subsidy wage and job goals. In cases where job loss is imminent and demonstr le, goals for the number of jobs retained and wage goals for jobs created or retained must be � luded. (10) a d eription of the finazicial obligation of the recipient if the goals aze not met; (11) a tement of why the subsidy is needed; (12) commirinent to continue operations at the site where the subsidy is used for at least five years r the benefit date; ( 3) the name and address of the parent corporation of the recipient, if any; and 2 �� q. ��l A' 69 (14) a list of all financial assistance by all grantors for the project. �� ) �'�" 70 10. 71 ! 72 73 74 75 76 77 78 :1 . : : :- Preference will be �iven to auulicants mee � the followin� ctiteria: (11 a demonstrated hi er target nercenta�e of hires for Saint Paul residents; 1 l. In awazding a business subsidy, City Council/HRA Boazd will consi er: A. In what ways the project improves the mix of businesses ' e area so as to allow the area to participate in fast-growing industries; protect azea from verse economic consequences caused by slow growth or declining industries that are domin t in the area; and provides essential constuner services or develops a network for busines es of local suppliers that do not currently e�st in the area. 85 B. How many new jobs will be created and at wh pay? How do proposed wages compare to 86 community wage levels? Will some jobs hav opportunities for career advancement, education, 87 or occupational training? Are there job gr projections for the project over the next 2-5 88 yeazs? Are there fringe benefits availab and what aze they? 89 C. If job loss is imminent is there subs tial evidence that the company will have to shut down 90 involuntarily? Is there substanrial idence that the company has received an offer to move to 91 another state or community that ' attractive enough that a reasonable person would seriously 92 consider a move for business r ons? What potential negative effect would the subsidy have 93 on other competing business and overall area job quality? 94 D. Will the project uniquely ect the property ta�c base for all ta.zing jurisdicrions, both short and 95 long term, and both dir tly and indirectly? How will the project affect other local business and 96 individual property bills? 97 12. 98 99 Any subsidy agreement s �ect to MN Statute 116J.993-995 must be approved by the local elected governing body. 3 _��_►� , - The following forms of financial assistance aze not a business subsidy: (1) a business subsidy of less than $25,000; (2) assistance thatis generally available to all businesses or to a general class of as a line of business, size, location, or similaz general criteria; � ��'� businesses, such (3) public improvements to buildings or lands owned by the state or local vernment that serve a public purpose and do not principally benefit a single business or defined gro p of businesses at the time the improvements aze made; (4) redevelopment property polluted by contaminants as defined � secrion 116J.552, subdivision 3; (5) assistance provided for the sole purpose of renovating old or deca ' g building stock or bringing it up to code, provided that the assistance is equal to or less than 50 percent of th total cost; 6) assistance provided to organizafions whose prunary mission to provide job readiness and training services if the sole purpose of the assistance is to provide those servic ; 7) assistance for housing; (8) assistance for pollution control or abatement; (9) assistance for energy conservation; (10) taac reductions resulting from conformity (11) workers' compensation and (12) benefits derived from regulation; (13) indirect benefits derived from (14) funds from bonds allocated (15) assistance for a (16) assistance for a taY 19; (17) redevelopment or more of the assey (18) general nature. federal taac law; compensation; to educational institutions; chapter 474A; between a Minnesota higher education insritution and a business; financing soils condirion district as defined under section 469.174, subdivision � the recipienYs inveshnent in the purchase of the site and in site prepazation is 70 percent current year's esrimated market value; and in taY increment financing law and other general t� law changes of a principally technical APPENDIX B '1 .'1 � 2-- APPENDIX C TAX INCREMENT FINANCING Program Purpose: To defray site developmentand land preparation Tax increment financing results in increased em higher tax base. ��J �al estate developments. decreased blight, and a How It Works: The increase in real estate taxes generated by a s cifzc development project is used to subsidize those improvements needed to begin a oject. One way to provide the subsidy is for the City to issue bonds backed by the rojected property tax increase that the improved property will yield. Minimum Requirements: Project must be located in an a roved Redevelopment Area and a designated tax increment district. The new nstruction of building rehabilitation must result in a significant increase in the roperty's taz base. Eligible Costs: Fees: Approval Process: Contact: Land acquisition, site Determined on and public improvements. by case basis. The City PI nning Commission, Capitad Improvement Budget Committee, the appropriat District Planning Council, the School District, and Ramsey County must revi proposals to establish a tax increment district. The establishment of such a istrict must be approved by the Saint Paul Housing ad Redevelopment Autho ity (FIRA) and the Ciry council. Projects within a currentdy e;cisting tczc incr ment district are reviewed by the appropriate districtplanning council and the H . Saint Paul Department of Pdanning and Economic Development (PED), 651-266-6674. G� ��J� Yeas Nays Absent Benanav Blakey Bostrom Coleman Harris Lantry Reiter Adopted Adoption B _ Approvec B Requested by Department of S - ` }+ 1 Council File # �_ 1� l�d� �� ` ` ` �'� �' ��a^""�` `��' gesolution # �1.. � mer�.�a � - - - - RESOLUTION Presented By Referred To Commi 1 WIIEREAS, the 1999 Minnesota Legislature enacted Statute ll f 2 subsidies allocated to businesses by state or local government agencies; 4 WHEREAS, local government agencies aze chazged with 5 of criteria for awarding business subsidies that comply with this 6 a9 e: Date setting requirements for ; a public hearing and adopting a set now therefore be it 7 RESOLVED that the Council of the city of Saint Paul oes hereby set a public hearing for Wednesday, 8 August 11, 1999, on the following criteria; and be it 9 10 FURTHER RESOLVED, that the following cri ria be adopted. 11 12 13 CRITERIA FOR AWARDING SUBSIDIES BUSINESSES SUBJECT TO THE REGULATIONS 14 AND REPORTIN REQUIREMENTS OF THE 15 MINNESOTA USINESS ASSISTANCE ACT 16 17 A subsidy is defined as "state or local govem ent agency grant, contribution of personal property, real property, 18 infrashucture, the principal amount of a lo at rates below those commercially available to the recipient, any 19 reduction or deferral of any tax or any fee, y guarantee of any payment under any loan, lease, or other obligation, or 20 any preferential use of government facili es given to a business." To be subject to these requirements a subsidy must 21 be $25,000 or more. Eighteen except� ns to these requirements are set out in the legislation and aze attached hereto 22 as Appendix A. 23 24 1 25 26 27 28 29 30 31 32 33 34 35 36 37 2. 3. A business subsidy must h e a defined public purpose as shown in the Public Purpose Summary that accompanies projects goi g to PED Credit Committee, City Council, and the HRA. Increasing the tas base may not be used as a public ose under MN Statute ll6J.993-995 nor can job retention be used as a public purpose unless ' job lo s is imminent and demonstrable." The Public Purpose Summary (see Appendix B) must also show any ' b creation or retention goals established including the proposed wages and benefits broken down by w ge level. Applicant mus e a business located in or moving into the city limits of the City of Saint Paul. This includes not-for-profi usinesses with at least 100 full-time equivalent positions and with a ratio of highest to lowest paid emplo e that exceeds ten to one. Green Sheet # C�rl( OF,SAINT PAUL, MINNESOTA � 1 '�� for direct loans must first attempt and be unable to obtain private fmancing before applying for city 38 4. Proposals can be for any business purpose. Except refinancing of existing debt other than IIRA/City debt will 39 40 41 5 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 not be done unless it will improve the City/I3RA collateral position ar the repayment ability of City/FII2A loans. `Iq �'��- Loan guazantees must have participation by a private lender to assume at least 50% of risk.. � Any proposal to utilize STAR funds must be eligible under the City Council adopted STAR must be awarded the funds through the approved STAR processes. and 7. Proposals to utilize Tas Increment Financing uses for tas uld be for all 8. Business subsidies in the form of grants must be structured as forgivable loans or se the agreement must state the fair mazket value of the subsidy to the recipient, including the value of con eying property at less than a fair market price, or other in-kind benefits to the recipient. 9. Recipient must be willing to enter into a subsidy agreement that includes (1) a description of the subsidy, including the amount and type of subs' y, and type of district if the subsidy is taY increment financing; (2) a statement of the public purposes for the subsidy; (3) goals for the subsidy to be achieved within rivo years of the b nefit date, including goals for the number of full-time and/or part-time jobs created and wage and benefit g ls that meet all City ordinances and resolutions regazding business subsidy wage and job goals. In cases wh e job loss is imminent and demonstrable, goals for the number of jobs retained and wage goals for jobs create or retained must be included. (4) a description of the financial obligation of the recipie if the goals are not met; (5) a statement of why the subsidy is needed; (6) a commihnent to continue operations at the site w ere the subsidy is used for at least five years after the benefit date; (7) the name and address of the parent corporatio of the recipient, if any; and (8) a list of all financial assistance by all granto for the project. 10. In awarding a business subsidy, City Counc' Board will consider: A. In what ways the project improve e mix of businesses in the area so as to allow the area to participate in fast-growing industries; prote area from adverse economic consequences caused by slow growth or declining industries that aze do inant in the azea; and provides essential consumer services or develops a netwark for businesses of 1 cal suppliers that do not currently exist in the area. B. How many new jobs will e created and at what pay? How do proposed wages compare to community wage levels? Will some obs have opporhxnities for career advancement, education, or occupational training? Are there jo growth projections for the project over the next 2-5 years? Are there fringe benefits available a what are they? C. If job loss is im nent is there substantial evidence that the company will have to shut down involuntarily? s there substantial evidence that the company has received an offer to move to another state or com iTy that is attractive enough that a reasonable person would seriously consider a move for busines reasons? What potential negative effect would the subsidy have on other competing businesse and overall area job quality? D. Will t project uniquely affect the property tas base for all tasing jurisdictions, both short and long te and both directly and indirectly? How will the project affect other local business and individual pr erty tas bills? 11. Any s�i5sidy agreement subject to MN Statute 116J.993-995 must be approved by the local elected governing 91 92 93 94 95 96 97 98 99 100 „ �► , The following forms of financial assistance aze not a business subsidy: (1) a business subsidy of less than $25,000; (2) assistance that is generally available to all businesses or to a general cIass of similaz business, size, location, or similaz general criteria; 101 (3) public improvements to buildings or lands owned by the state or local government that 102 do not principally benefit a single business or de£med group of businesses at the time thej 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 (4) redevelopment properry polluted by contaminants as defined in section 1 (5) assistance provided for the sole purpose of renovating old or decaying bc provided that the assistance is equal to or less than 50 percent of the total co: 6) assistance provided to organizations whose primary mission is to provi sole purpose of the assistance is to provide those services; 7) assistance for housing; (8) assistance for pollution control or abatement; (9) assistance for energy conservation; (10) tax reductions resulting from conformity with (11) workers' compensation and unemployment (12) benefits derived from regulation; (13) indirect benefits derived from (14) funds from bonds allocated under (15) assistance for a collaboration (16) assistance for a tax taac law; educational institutions; 474A; ��-� as a line of a pubiic purpose and �ements aze made; 3; stock or bringing it up to code, job readiness and training services if the a Minnesota higher education institution and a business; soils condition district as defined under section 469.174, subdivision 19; (17) redevelopment when the r cipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's curren yeaz's estimated market value; and (18) general changes in increment fmancing law and other general taz law changes of a principally technical nature. ^�oject Name , roject Address Cify Contact - A.PPENDIX B PUBLIC PURPOSE SUMMARY - Account# _ Today's Date . PUSLIC COST ANALYSIS � Track # _ �Iq '� Total Loan Subsidy: Present value oE the loan over ics life, including expecce oss of principal and interest race subsidy. PUBUC BENEF(T ALYSIS (Mark "1 " for Primary .8enefits and ' 2" for Secondary Benefits) 1. Community Development Benefits ... . ... _ -::: .. .., : ,. _ . ,_... '` Remove Blight/Polluuon .<<>> : Improve Health% fe lSecu"ri Increase/Maintairi �Ta� Base.;;°: � LY : tY %. curient cax pro3uction: " Rehab. Vacant Structure `: Public Improv' ents •';'.. esi d caxes as built::: Reinove Vacant Scructtire :; :`::' Goods`& Se 'ces Ayailability: ",'; . ne� iax chanoe�+';.oc-: ; ' _. „ _ . ....,.: . ., ..<.,: �. .,:..: .:. ,,:. .,. .. :. a . ' Heritage'Preserdation;::- ' `" MainEain: axBase':�:'<.;'`:::;<` ``: "<3�`i` Il. Economic Development Benefits :....: ,..::� ...:.::..:.:: �::..;a:; _�: :..:r�°:. ;.:. ;:.. °..;.:::.:_;. •::._ >:,:. , ' Suppon Yiralitq of Industry,�� :` Create Local Businesses ' Gererare Pnvate Invescment s.Stab�lizeNLarket �!alue , .:� Recauz Ltical$unnesses - Support Commer.,csal Acndity F. ( ' � Provide Self-Empti Ilf. Ho using Develop� Iricrease Ho'ine Oy ^�'. �.�# uniu new.consti !V. Job � a ; � Iricr. ti�!ome: : <, Needs":=`: _..,. Iv e Welfare ' �'�.`t'R:i:'� Y ear,� :, .. �:`:'�i ;>z . :;'^;� _"; .. �;�?x«�'`.'':� � ;az 5 ' � FOLLOW-UP.�ROM LOAN SERVICING PROCESS t�q-1`�� :. : . Year. 4 ;Follow-Up . Dace - :: . PublicPurposeOb�ecnves ( _.V]Yes [ :]No [ .]InPait,[ .]No` ;ngerApphcablelAllGoalsAclueved Defic'iences: ` _: _ va .. ,::::;�::.' Dacec'<,`..::: , ar:5 °Follow-Up rublic Purpose Objectives Mer. [ ] Yes [ } No [:] In Pa [ } No Longer Applica6lelAll Goals Achieced I Deficiences: _ _ __ FOLLOW-UP [. ]NOJOB�TMPACT " ti OBS CREATED fulltim � erm _ i. tYvera _ ,_. _ .:: rGonst " tio`ri/Tem � � PUBIPURP.SCiI Rcvised 5/22/96 �1 �OB IMPACTS 3 .of :Year_Follow,Up.'Inforinatio �� Year 1'; Year.;2 Year 3 e� r� _ :ual Results):;% ar 4 Year 5 � .....'_� �._. .< Copelandljobs\cw\criteria for cw Revised7-28-99 5 i4i 142 APPENDIX C q`�,'1�12' 143 144 145 TAX INCREMENT FINANCING 146 147 Program Purpose: To defray site development and land preparation costs for real state 148 developments. Tax increment fznancing results in increased ployment, 149 decreased bZight, and a higher tax base. 150 151 152 How It Works: The increase in real estate taxes generated by a spe c development project is 153 used to subsidize those improvements needed to be in a project. One way to 154 provide the subsidy is for the City to issue bonds acked by the projected 155 property tax increase that the improved prope will yield. 156 157 158 Minimum Requirements.• Project must be Zocated in an approved edevelopment Area and a designated 159 tc� increment district. The new constr ction of building rehabilitation must 160 result in a significant increase in the roperty's tax base. 161 162 163 Eligible Costs: Land acquisition, site prepara on, and public improvements. 164 165 166 Fees.� Determined on a case by ase basis. 167 168 169 Approval Process: The City Planning ommission, Capital Improvement Budget Committee, the 1 �0 appropriate Distr' t Planning Council, the School District, and Ramsey County 171 must review pro osals to establish a tax increment district. The establishment of 172 such a district ust be approved by the Saint Paul Housing ad Redevelopment 173 Authority (H ) and the City council. Projects within a currently existing tax 1 �4 increment strict are reviewed by the appropriate distr•ict planning council and 175 the HRA. 176 177 178 Contact: Sain Paul Department ofPlanning and Economic Development (PED), 651- 179 26 -6674. G ��,�� Coleman Adopted by Council: Date Requested by Department of: Plannina & Economic Development By: Foxm Approved by City Attamey Adoption Certified by Counrfil Secretasy BY� BY: Approved by Mayor: By: Approved by Mayor for Submission to Council By: 7 OR�GiNAL Green Sheet # �e�3� � 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Presented By Re£erred To Council File # 1�� t�a Resolution # Committee -1 Date 4y WHEREAS, the 1999 Minuesota Legislature enacted Statute 116J.993- 5 setting requirements for subsidies allocated to businesses by state or local govemment agencies; and WHEREAS, local government agencies are charged with hold' public hearing and adopting a set of criteria for awarding business subsidies that comply with this statut , now therefore be it RESOLVED that the Council of the city of Saint Paul does�'fereby set a public hearing for Wednesday, August ��, 1999, on the following criteria; and be it � FURTHER RESOLVED, that the following criteria adopted. CRITERIA FOR AWARDING SUBSIDIES TO B INESSES SUBJECT TO THE REGULATIONS AND REPORTING RE UIREMENTS OF THE MINNESOTA BUS ESS ASSISTANCE ACT A subsidy is defined as "state ar local government infrastruchue, the principal amount of a loan at rat reduction or deferral of any tazc or any fee, any any preferential use of govemment facilities giv n be $25,000 or more. Eighteen exceptionsto esE as Appendix A. � ncy grant, contriburion of personai property, real properry, below those commercially available to the recipient, any rantee of any payment under any loan, lease, or other obiigation, or to a business." To be subject to these requirements a subsidy must ; requirements are set out in the legislation and are attached hereto A business subsidy must ha�e a de ned public purpose as shown in the Puhlic PurQose Summary that accompanies projects going to P Credit Committee, City Council, and the F3RA. The Public Purpose Summary (see Appendix B) m t also show any job creafion or retention goals established including the proposed wages and benefits oken down by wage level. 2. Applicant must be a busine s located in or moving into the city limits of the City of Saint PauL This includes not-for-profit businesses ith at least 100 full-time equivalent positions and with a ratio of highest to lowest paid employee that exc ds ten to one. 3. Proposals for direct ans must first attempt and be unable to obtain private fmancing before applying for city funding. 4. Proposals can U for any business purpose. Except refmancing of existing debt other than HRA(City debt is not done unless i iil improve the CityfHRA collateral position to the repayment ability of CityfIlRA loans. RESOLUTION CITY OF SAINT PAUL, MINNESOTA Copeland\jobs\cw\crheria for cw Revised7-28-99 1 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 5& 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 5. Loan guarantees must have participation by a private lender to assume at least 50% of risk.. �� `' 6. Any proposal to utilize STAR funds must be eligible under the City Council adopted STAR guidelines, and must be awarded the funds through the approved STAR processes. 7. Proposals to utilize Taz Increment Financing must be for land acquisition, site preparation, and public improvements and must follow the tazc increment approval process. (See Appendix C). 8. Business subsidies in the form of grants must be structured as forgivable loans or else the agreement ust state the fau mazket value of the subsidy to the recipient, including the value of conveying property at le than a fair market price, or other in-kind benefits tp the recipient. 9. Recipient must be willing to enter into a subsidy agreement that includes: (1) a description of the subsidy, including the amount and type of subsidy, and type of ta�c increment financing; (2) a statement of the public purposes for the subsidy; if the subsidy is (3) goals for the subsidy to be achieved within two years of the benefit date, includ' goals for the number of full-time and/or part-time jobs created and wage and benefit goals for those jobs. n cases where job loss is imminent and demonstrable, goals for the number of jobs retained and wage go s for jobs created or retained must be included. (4) a description of the financial obligation of the recipient if the goals are t met; (5) a statement ofwhy the subsidy is needed; (6) a commitment to continue operations at the site where the subsidy i used for at least five years after the benefit date; (7) the name and address of the pazent corporation of the recipient, ' any; and (8) a list of all financial assistance by all grantors for the project. 10. In awazding a business subsidy, City CouncillfiRA Boazd wi consider: A. In what ways the project improves the mix of busi sses in the area so as to allow the area to participate in fast-growing industries; protect azea from adv se economic consequences caused by slow growth or declining industries that aze dominant in the ar ; and provides essential consumer services or develops a network for businesses of local suppliers t do not currenUy exist in the area. B. How many new jobs will be created and what pay? How do proposed wages compaze to community wage levels? Will some jobs have opp nities for cazeer advancement, education, or occupational training? Are there job a owth proje ions for the project over the next 2-5 years? Are there fringe benefits a�ailable and what aze thev. C. If job loss is imminent is there bstantial evidence that the company will have to shut down involuntarily? Is there subs ial evidence that the company has received an offer to move to another state or community that is a active enough that a reasonable person would seriously consider a move for business reasons? Wh potential negative effect would the subsidy have on other competing businesses and overall ajob quality? D. Will the project term, and both c property tas bill ly affect the property taY base for ail taxing jurisdictions, both short and long and indirectly? How will the project affect other local business and individual Copeland\jobs\cw\criteria for cw Revised7-28-99 2 86 s� ss 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 I15 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 APPENDIX A The following forms of fmancial assistance are not a business subsidy: (1) a business subsidy of less than $25,000; ° -��' (2) assistance that is generally available to a11 businesses or to a general ciass of sunilaz businesses, ch as a line of business, size, location, or similaz general criteria; (3) public improvements to buildings or lands owned by the state or local govemment that se e a public purpose and do not principally benefit a single business or defined group of businesses at the tune the ' provements are made; (4) redevelopment property polluted by contaminants as defined in section 116J.552, (5) assistance provided for the sole purpose of renovating old or decaying buil provided that the assistance is equal to or less than 50 percent of the total cost; 6) assistance provided to organizations whose primary mission is to sole purpose of the assistance is to provide those services; 7) assistance for housing; (8) assistance for pollution control or abatement; / (9) assistance for energy conservation; (10) tax reductions resulting from conformity with federal (11) workers' compensation and unemployment comp a (12) benefits derived from regulation; (13) indirect 6enefits derived from assistance to ucatiom (14) funds from bonds allocated under (15) assistance for a collaboration (16) assistance for a tax increment (17) redevelopment when the more of the assessor's current (18) general changes in tax nature. 74A; law; institutions; � or bringing it up to code, readiness and training services if the Minnesota higher education institution and a business; soils condition district as defined under section 469.174, subdivision 19; �iYs investment in the purchase of the site and in site preparation is 70 percent or estimated mazket value; and fmancing law and other general tas law changes of a principally technical Copeland\jobs\cw\criteria for cw Revised7-28-99 Project Name Project Address City Contact _ APPENDIX B PUBLIC PURPOSE SUMMARY Account # Today's Dafe PUBLtC COST ANALYSIS Track # °lq -14 �- IrcCerestRate : = SubndzzedRazr j ]Yes `j �No.; [.: JN/A Type Loan RislcI�aung Accepta6Ie�5°/�res� Substandard€IQ°! )�Loss(S0�°Iozes� [ . Grant Doubtful 5Q%;res For vabie 1fl fnr'es , � , � .. _ :: � - _' . . � _.: � : ': - Tora1 Laan Snbsid '� '` "i`otal P xo"eae Cosc : '° Total Loan Subsidy: Present value of the loan over iu life, including expeae oss of principal and interest rate subsidy. PUBLIC BENEFIT A ALYSIS (Mark "1 " for Primary Ben�ts and "" for Secondary Benefits} I. Community Development Benefits Remove Blight{Polluiion " Improve HealthlS _ etyfSecuriry .. : IncreaselMairitairi Tax Base ' Rehab: Vacant Structure `. . Public Improve rits • '��t Lax producuon:, Remove Vacant Structure Goods & Se ' es A�ailabali ' esi'd ca�ces at built: � � ; � net fax change -t or Herita e'Preservation Maint�n T :Base ff. Economic Development Benefits Suppori: Vitality of 3nduscry ,: reaee I.ocal $usinesses Generate 3'rzvate Tuve�cment . S.ra6ilize Markes value etain F:ocal Businesses%. Suppozc Commercial _Activny :' Provide5elf $ncour2�e�ri[reo'shin �ncr.'IX�nmenlll%1�nnnrv$usinesses ift. Housing Development Benefits Increase Home Otivnership 5toc Addr.ess_Special I3ousing Needs:: ., -�•� unics new conscrutuon ; Retain.Hoirae O in City '; � # unics canvers�on:_ �ffarz�able Housin iV. Job lmpaCts ivin Wa e a lies [ Co orate Welfare A , _- - , ::.. _ . . _ _. I: 1 ob Im act ; [:� No ol�. Ir. _ �` O&S REAT6F� Eulltime: e� tYtiera �Caustrucubnl`.I'ei `� OBS�E7`117NEI� �lume:' er' �€ O�SLoST` �ullnnte<� ex Copeland\jobs\cw\criteria for cw Revised7-28-99 3-- � 1'ear 4:": I'ear 5. FOLLOW-UP FROM LOAN SERVICiNG PROCESS °lq -'14 a- Year 3 Fbltoinr Up Daie Pubkc �'ur�ose Ob�ectiyes Met - j _� 1'es "[ J No [` 1 Tn Pazt [) l�i� Lbnger Apphcablef AfI GoaIs 1lcfueved " Deficfences: '_ . s :; , . , Year 4 Foliow-Up . Date : Public Purpose Objectives 3YIet: {- J�Yes [ � f�to ,[ Part [` l Na Longer Applicablelt�lI Goafs Acluevecl D'eficiences: _ . Year 5 Foltow-i3p Date: Public Purpose Objectives'Met: [ 7 Yes [ No [' i' ] Tn Part [ ] No Lqnger ApplicablelAll Goals Achieved. Deficiencer. __ ' • . UP ON �OB IMPACTS � �rro JqB iivr�ACr . _ P�r:,..�,,, ;�` rvBU�c�rsrx x�v�a sizvvs / End of YearFollow-I.Fp Information (Actual Results) Year 1 Year 2 Year 3 Year 4 Year 5 me ermanerit < Avera e Wa e 3n/Tem ora ^ : : :.': dz� ermanent) Copeland\jobs\cw\criteria for ew Revised7-28-99 5 136 137 138 139 140 141 142 Program Purpose: 143 144 145 146 147 How It Works: 148 149 150 151 152 153 Minimum Requirements: 154 155 156 157 158 Eligible Costs.• 159 160 161 Fees: 162 163 164 ApprovalProcess: 165 166 167 168 169 170 171 172 173 Contact: 174 APPENDIX C TAX INCREMENT FINANCING To defray site development and Zand preparation costs developments. Tax incrementfznancingresults in incr� decreased blight, and a higher tax base. / �q.�y�- aL estate employment, The increase in real estate taxes generated by specific development project is used to subsidize those improvements neede to begin a project. One way to provide the subsidy is for the City to issue onds backed by the projected property tax increase that the improved roperty will yield. Project must be located in an ap oved Redevelopment Area and a designated tca increment district. The new construction of buidding rehabilitation must result in a significant increas an the property's tax base. Land acquisition, site Determined on a and public improvements. by case basis. The City Pla ning Commission, Capital Improvement Budget Committee, the appropriat District Planning Council, the School District, and Ramsey County must revi proposals to establish a tcrx increment district. The establishment of such a strict must be approved by the Saint Paul Housing ad Redevelopment Autha ty(HRA) and the City council. Projects within a currently existing tax incr ent district are r by the appropriate district planning council and Saint Paul Department of Planning and Economic Development (PED), 631- 266-6674. Copeland\jobs\cw\criteria for cw Revised7-28-99 6 �lg-��t�-- Coleman Requested by Department of: Planninc & Economic Develo ment BY: � ` � Form Approved by City Attomey Adopted by Council Date • �// ".� �� y ��" Adoption Certifi�.d by Council 5ecretary BY� -�t� �• '�"'� L. BY: Approved byQKayor: Date By: Copeland\jobs\cw\criteria for cw Revised7-28-99 � Approv 39 40 41 42 43 44 45 46 4? 48 49 50 51 52 53 54 55 56 57 S8 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 sz 83 84 85 5. I,oan guarantees must have participation by a private lender to assume at least 50% of risk.. �� y ' 6. Any proposal to utilize STAR funds musc be eligible under the CiTy Council adopted STAR guidelines, must be awazded the funds through the approved STAR processes. • - skourd �E �Orp�f((e��l(c� Perrxi�l'ec�uses(�m tax� 7. Proposals to utilize Tas Increment Financing� a � iAaasnurmPnte �i +6' 1 -__ _ _.,, _.� ., �ce_ ♦ ,1' - l+ / �[W �u�'1'(O ( "i'Y Y \ �'P�°aR l 8. Business subsidies in the form of grants must be structured as forgivable loans or else the eement must state the fair mazket value of the subsidy to the recipient, including the value of conveying pr erty at less than a fair market price, or other in-kind benefits to the recipient. 9. Recipient must be willing to enter into a subsidy agreement that includes: (1) a description of the subsidy, including the amount and type of subsidy, and e of district if the subsidy is taY increment fmancing; (2) a statement of the public purposes for the subsidy; (3) goals for the subsidy to be achieved within rivo years of the benefit dat , including goals for the number of full-time and/or part-time jobs created and wage and benefit goals for th se jobs. In cases where job loss is imminent and demonstrable, goals for the number of jobs retained an age goals for jobs created or retained must be inc]uded. (4) a description of ihe fmancial obligation of the recipient if the (5) a statement of why the subsidy is needed; (� a commitment to continue operations at the site where the ul benefit date; (7) the name and address of the pazent corporation of the cipie� (8) a list of a11 financial assistance by all grantors for th project. aze not met; is used for at least five yeazs after the if any; and 10. In awarding a business subsidy, City Council/HRA oazd will consider: A. In what ways the project improves the mi of businesses in the azea so as to allow the axea to participate � in fast-growing industries; protect azea om adverse economic consequences caused by slow gowth or declining industries that aze dominan n the area; and provides essential consumer services or develops a network for businesses of local s pliers that do not currently exist in the azea. B. How many new jobs will be cre ed and at what pay? How do proposed wages compare to community wage tevels? Will some johs ve opportuniries for career advancement, education, or occupational training? Are there job gro projections for the project over the next 2-5 years? Are there fringe benefits available and wh are they? C. If job loss is imminen s there substantial evidence that the company will have to shut down involuntarily? Is the e substantial evidence that the company has received an offer to move to another state or communi that is ariractive enough that a reasonab]e person wouSd seriously consider a move for business reas s? What potential negative effect would the subsidy have on other competing businesses and verall azea job quality? D. Will the pr 'ect uniquely affect the property talc base for all taxing jurisdictions, hoth short and long term, and oth directly and indirectly? How will the project affect othez local business and individual property bills? � Copetand\jobs�cw\criteria for cw Revised7-28-99 ORIG�NAt Council Fi2e # �iQ � �� v� Resolution # Green sheet # �e?3� 3. � 2 3 4 5 6 7 8 9 10 11 12 23 Presented By RESOLUTION CITY OF SAtNT PAUL, MINNESOTA 4y Referred To Committee: Date WFIEREAS, the 1999 Minnesota Legislature enacted Staiute I 16J.993-995 setting requirements for subsidies allocated to businesses by state or local government agencies; and WFiEREAS, local govemment agencies aze ckiarged with hoiding a public hearing and adopting a set of criteria for awazding business subsidies that comply with this statute; now therefore be it RESOLVED that ttie Council of the city of Saint Paui does hereby set a public hearing for Wednesday, August f�, 1999, on the following criteria; and be it FURT'HER RESOLVED, that the following criteria be adopted. C.RITERIA FOR AWARDING ST7BSIDIES TO BUSINESSES SUBJECT TO T'HE REGULATIONS � 16 17 A snbsidy is de£med as "state or local govemment agency grant, contriburion of personal property, real property, 18 infrastructure, the principa] amounY of a loan at rates below those commercially available to the recipient, any 19 reducrion or deferral of any tax or any fee, any guarantee of any payment under any loan, lease, or other obiigation, or 20 any preferenrial use of government facilities given to a business." To be subject to these requirements a subsidy must 2 2 be $25,000 or more. Eighteen excep6ons to these requirements aze set out in the legislafion and are a4tached hereto 22 as Appendix A. 23 24 i. 25 26 27 28 29 2. 30 31 32 33 3. 34 35 36 4_ � AND REPORT'ING REQUIItEMENTS OF THE MIlYNESOTA BUSINESS ASSISTANCE ACT A business subsidy must have a defined p¢btic purpose as shown in the Public Purpose Summary that accompanies projects going to PED Credit Committee, City CounciI, and the HItA. The Public Purpose Summary (see Appendix B) must also show any job crea4on or retention goals established including the proposed wages and benefits broken down by wage level. Applicant must be a business tocated in or moving into the city Iimits of ffie City of Saint Paul. Tlus includes not-for-profit businesses with at Ieast 100 full-time equivalent posirions and with a rario of lughest to lowest paid employee that exceeds ten to one. Proposals for direct Ioans must fust attempt and be unable to obtain private financing before applying for city funding. Proposals can be for any business purpose. Except refinancing of existing debt other than FIRA/City debt is not done unless iY will improve the CiTy/HRA collateral position to the repayment ability of City/E�2A loans. Copeland\jobs\cw\criteria for cw Revised7-28-99 � :�b S +;-t-�.�� R�.as , ia�� Councit File # �q - �� Green Sheet # RESOLUTION Al�1T PAUL, M1NI�ESOTA Presented by Referred To Date Resolution Authorizing a Public Hearing and Adopting Criteria for Awarding Business that Comply with the 1999 Minnesota Business 1 WHEREAS, the 1999 Minnesota Legislature enacted Statute 116J.993 2 allocated to businesses by state ar local govemment agencies; and 3 WHEREAS, local government agencies including the Housing and 4 Saint Paul, Minnesota (HRA) are charged with holding a public hea 5 awarding business subsidies that compiy with ttus statute; now th� Law requirements for subsidies evelopment Authority of the City of and adopting a set of criteria for be it 6 RESOLVED, that the Housing and Redevelopment Authori of the City of Saint Paul, Minnesota does hereby 7 set a public hearing for Wednesday, August ll, 1999, on following criteria; and be it 8 FURTHER RESOLVED, that the following criteria b�adopted. CRITERIA FOR AWARDING 10 11 AND REPOR' MINNE50T BUSINESSES SUBJECT TO THE REGULATIONS REQUIREMENTS OF THE ASSISTANCE ACT 12 A subsidy is defined as "state or local 13 infrastructure, the principal amount of 14 reduction or deferral of any tax or any 15 obiigarion, or any preferential use o g 16 requirements a subsidy must be $,0( 17 and the investment in housin� re uirei 18 exceptions to these re 19 1. A business st 20 accompanies 21 base may not 22 as a public pti 23 Appendix B�j' 24 wages and�Iie �y�rnment agency grant, contribution of personal property, real properiy, �oan at rates below those commercially availabie to the recipient, any e, any guazantee of any payment under any loan, lease, or other ernment facilities given to a business." To be subject to these or mare. 5ma11 businesses are exempt from the living waee requirement nt found in the reciroient r uirements section of this criteria. Eighteen are set out in the legislation and are attached hereto as Appendix A. �sidy ust have a defined public purpose as shown in the Public Purpose Suinmary that �ro' cts going to PED Credit Committee, City Council, and the HRA. Increasing the tax b used as a public purpose under MN Statute 116J.993-995 nor can job retention be used ose wiless "job loss is imminent and demonstrable." The Public Purpose Summary (see must also show any job creation or retention goals established including the proposed iefits broken down by wage level. 25 2. Appli t must be a business located in or moving into the city lunits of the City of Saint Paul. This 26 incl es not-for-profit businesses with at least 100 full-fime equivalent positions and with a ratio of 27 highest to lowest paid employee that exceeds ten to one. q9 -� ya- 28 3. Proposals for direct loans must first attempt and be unable to obtain private financing before applying for 29 city funding. 30 4. Proposals can be for any business purpose. Except refinancing of eatisting debt other than ffi2A/City 31 debt is not done unless it will improve the City/EIIZA collateral position or the repayment abiJ�ty of 32 City/FII2A loans. � 33 5 34 6. 35 STAR guidelines, 36 7. Proposals to utilize TaY Increment Financing should be for all legally 37 financing under MN 469. (See Appendix C). 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 S6 57 58 59 60 bl 62 63 64 65 66 67 68 69 70 uses for taY increment 8. Business subsidies in the form of grants must be structured as forg' able loans or else the agreement must state the fair market value of the subsidy to the recipient, i uding the value of conveying property at less than a fair mazket price, or other in-kind bene s to the recipient. 9. Recipient must be willing to enter into a subsidy agreeme that includes: (1) a description of the subsidy, including the amount a type of subsidy, and type of district if the subsidy is tax increment financing; (2) a statement of the public purposes for flie subsi ; Loan guarantees must haue participation by a private lender to assume at least 50% Any proposal to utilize STAR funds must be eligible under the City Council and must be awarded the funds through the approved STAR processes. livin�wage�ob per $25,000 of subsidy� (4) goals for the subsidy to be achieved wit n two yeazs of the benefit date, including goals for the number of fixli-time and/or part-time jobs reated and wage and benefit goals that meet all City of Saint Paul ordinances and resolutions regardi g business subsidy wage and job goals. In cases where job loss is imminent and demonstrable, goals r the number of jobs retained and wage goals for jobs created or retained must be included. training Saint Paul workers; n of the financial obligation of the recipient if the goals are not met; of why the subsidy is needed; .nt to continue operations at the site where the subsidy is used for at least five years after th benefit date; (13) e name and address of the parent corporation of the recipient, if any; and (14 a list of all fmancial assistance by all grantors for the projeet. (10) a (11) a (12) a � 71 l0. 72 73 74 75 76 77 78 79 :' : .� : Preference will be �iven to applicants meeting the following criteria: �1) a demonstrated hi ng er target percenta�e of hues far Saint Paul residents: 11. In awarding a business subsidy, City CounciUHRA Board will consider: A. In what ways the project improves the mix of businesses in the participate in fast-growing industries; protect area from adverse by slow growth or declining industries that are dominant in th consumer services or develops a network for businesses of 1 cal exist in the azea. cl � - ' i �-�' are so as to allow the area to onomic consequences caused area; and provides essential suppliers that do not currently 86 B. How many new jobs will be created and at what pay? ow do proposed wages compare to 87 community wage levels? Will some jobs have opp ities far career advancement, educafion, 88 or occupatSonal training? Are there job growth p jections for the project over the next 2-5 89 years? Are there fringe benefits auailable and at are they? 90 C. If job loss is imminent is there substantial idence that the company will have to shut down 91 involuntarily? Is there substantial evide e that the company has received an offer to move to 92 another state or comnnunity that is am tive enough that a reasonable person would seriously 93 consider a move far business reason What potential negative effect would the subsidy have on 94 other competing businesses and ov all azea job quality? 95 96 97 98 12. 99 100 D. Will the project uniquely affec e property taY base for all ta��ing jurlsdictions, both short and long term, and both directly d indirecfly? How will the project affect other local business and individual property tax biil . Any subsidy agreement subjec o MN 5tatute 116J.993-995 must be approved by the local elected goveming body. 3 APPEND�Y A The following forms of fmancial assistauce aze not a business subsidy: (1) a business subsidy of less than $25,000; (Z) assistance that is generally available to all businesses or to a general class a line of business, size, location, or similar general criteria; °l� _'1'1 � businesses, such as (3) pubiic improvements to buiidings or lands owned by the state or local ernment that serve a public purpose and do not principally benefit a single business or defined gro p of businesses at the time the improvements aze made; (4) redevelopment properry polluted by contaminants as defined � section 116J.552, subdivision 3; (5) assistance provided for the sole purpose ofrenovating old or provided that the assistance is equal to or less than 50 percent c 6) assistance provided to organizations whose primary the sole purpose of the assistance is to provide those s 7) assistance for housing; (8) assistance for pollution control ar abatement; (9) assistance for energy conservation; (10) tax reductions resulting from (11) workers' compensation and (12) benefits derived from (13) indirect benefits derived (14) funds from bonds (15) assistance for a (16) assistance for a 19; (17) ,tXng building stock or bringing it up to code, total cost; to provide job readiness and training services if with federai tax law; compensation; assistance to educational institutions; under chapter 474A; between a Minnesota highez educafion institution and a business; financing soils condition district as defined under section 469.174, subdivision when the recipient's investment in the purchase of the site and in site preparation is 7Q percent or more of the ssessor's current yeaz's estimated market value; and (18) gen changes in taY increment fmancing law and other general tax law changes of a principally technical nature. a ; ^�ojecf Name _ �-roject Address City Contact _ PUSLIC PURP�SE SUMMARY - Account # _ Today's Date . PUBLtC COST ANALYSIS ' 'fracic # � ,' ��_��la- � TotaI Loan Subsidy: Present value of the loan over iu life, induding expected los of principal and interest race subsidy. PUBLIC BENE�IT AN YSIS (Mark "1 " for Primary Benefits and "2" or Secondary Benefits) 1. Community Development Benefits .. _. : �.. . ..., .. .:::..,, , . . . .. ., ... ,.. . .:.;.,: � ` RemoveBlig6t/Polluuon :�; �..<;. ImproyeHealtfilSaf 1Secu'rity . `:->: Increase/MaintairiTa�$ase:t:•: ' Rehab. Vacant Structure Public Improvein ts t'�rrent cax pro3ucnon b '•1 . Re`move Vacant Strncture t�: � �`: ( ' � Herita e' Pre'servation'> `' �" ' `% r Il. Economic Development Benefits S..' .<:t�: :_� '. $uPPori:�itality`ofIiiduscry�y;;j$<;. .... _. - .:k::Py.: ..1:.`Q...�i:.:... �..._...,. � ' �` Pro.'vide 5elf-Er. 111. Housing Devel `� Iricrease'I-�ome ��::� ��:� ucuu new.cc 1V. Job :. ��YY.^:".;. �i � : �.'a � : 5 ;:::e e:c d caxe: as w s. :.. . ityi �:�.•neCtaxchange;i,oc-: "r; ,:��: :>ss , A Welfare eaz7; Conelandliobs\cwleriteria for ew Revised7-28-99 /T � FOLLOW-UP.FROM LOAN SERVICING PROCESS ar; 4.�Folloinr-Up,. blicl?urpose Objec , . <.. ._.. . .,� -.. ,:,.,. , .. ... . -: .. . : • .. :;a ;,:'". - :::._; �,.:>>:' . ;.:�<.: ..::....:..., :, .....: ..,,: ,... . .:..:,�: <: ::;, , D`eEiciences: _ ,. <....: ,.:. , .... ,. �M "�ar S:Follow-Up � _. �, ;; ;: . .�. . �;;: : � , rublic Purpose Objectiyes'Ivlet: [,:] Yes [�. ``] No [�'` ] In rt.'.[' `] No Longer Appl. Deficiences: ` FOL10W-UP N )OB IMPACTS , {�' • ;� NO JOB��MPAG'T.: , " # OBS C� >:.`>. e �erm; � r.3 ..\ � ' .. +__��....�`. . �:,� ri<�:��'�'..' ��:� , ii:. � �.A� ;.>• !� n _ PUBLPURPSIR Revifed Sh7/96 �� `t_'1�tti-- :>;= . .]>::;::.".:i;%;�:� `�`::' I,Goals�Acliieve��.� 1_Goals AcHieczd. 4 Year 5 Copeland�jobs�cw\criteria for cw Revised7-2S-99 P� APPENDIX C TAXINCREMENT FINANCING � ProgramPurpose.• Todefraysitedevelopmentandlandpreparationcostsforrealestate evelopments. Taz increment fznancing results in increased employment, decrea d blight, and a higher tax base. How It Works: The increase in real estate taxes generated by a specific devel pment project is used to subsidize those improvements needed to begin a project. On way to provide the subsidy is for the City to issue bonds backed by the projected operty tcix increase that the improved property will yield. Minimum Requirements.• Project must be located in an approved Re velopmentArea and a designated tax increment district. The new constructio of building rehabilitation must result in a significant increase in the property's ar base. EZigible Costs: Fees: Land acquisition, site preparation, and jlublic improvements. Determined on a case by cptse basis. Approval Process: The Ciry Planning ommission, Capital Improvement Budget Committee, the appropriate Distri t Planning Council, the School Dish-ict, and Ramsey Counry must review prop sals to establish a ta:� increment district. The establishment of such a district ust be approved by the Saint Paul Housing ad Redeveloprnent Authority (H ) and the City council. Projects within a currently existing tar increment strict are reviewed by the appropriate districtplanning council and the HRA. Contact: af Paul Department of Planning and Economic Development (PED), -266-6b74. � � Yeas Nays Absent Benanav Blakey Bostrom Coleman Hazris Lanhy Reiter Adopted by Council Adoption Certified t By: Approved by Mayor By: q �,��tY � b Requested by Deparlment of: 8-17-1999 9:51AM FROM MAPA / ACT 651 6Q1 ae53 P-� MiMlIESOTA ' ALLIAMCE (Of � ►R06RESSIVE AtT10N / - ` - P . aC6aei Adwcating Ctwngt Tagether AFSCME foun<ils 6, u.65 AFSCME Local 66— NE MN Alffance oF the Sueeu � BIHA women in Acuon CICan Weltf AClNn Allie�t¢ CommumryACtion of Mmneapolit /UELooliuo MN Ameriwns fw OemocracNcACdon MH assoriatwn of Rofe�ioial EmDlnYeet MN �OACf MH Conln'ankrCneHOmeless MN Communiry Action 0.uociation MN Conwmer Aillance MN NaKonai Orgenixation for Women Mrv Seoior Federafion rva�ionsl wwyers Guild — Minnesota Outfront M�nncSOla . SEIUSdteCOUncil#7 UNttE—NOrtAem Digrict�olnt BoarQ . Uni(edAYtowpfRe�S Unfted St¢ei Wo�kers of Amenca—Dlstdtta� Onited Tmnsportatiort Unlon Wban Welhbn Women l�qainst Nu'Gtary Maanesz .„�ga. � �� 2- ��`�� 0 FAX TRANSMISSXON DATE: TO. August 11,14fl9 St Paul City Council Members Fa� 266-8574. FROM; Beth Frasex, Public Policy Organizer . Minnesota Alliance for Progressive Action Phone: 651-641-4050 Fax: 651-641-4A53 T2E: Criteria for Bnsimess Sul�sidies YAGES (inctuding covei): 3 COMMENTS: The atEack�ed let�ex is in ieference to to�'s public heaxing on the PED's pioposal foz ctiitecia for business subsidies. MINNESOTA ALItAMCE f07 9ROGAESSIVE qCT10N 8-i1-1999 9:57AM FROM MAPA / ACT 651 6a1 a853 •1�11NESOTq ALLILMCE fOt OR06YESSIVF ACTi9N • - \ � P qCORN AOvocatiRqChaageTOgether AFSCME CounclLs 6. �4. b5 AFSGME �ow166-NE Mn nlbance of the Saeets BIHA Women in Actbn Y1ean waMr Action nl6ancc Communiry ActioM1af Minneapolu - IUElocalupo � MN Amer((y�s for Democra<ticACtion Date: August 11,1999 _ To: St. Paul City Co,uncil Members From:Beth Fraser, Pnblic Policy Organizer : Re: Criteria for Business Subsadies P. 7 ��-��` This past spring the Minnesota Legislature passed the 1999 State Business Subsidy Act. With this action, our elecEed leaders respondetl to concemed cifizens from around the state. who . deznanded more accountability when public money is used to subsidize privafe businesses. . This ground-breaking legislation will change the ctimate in which subsidies are given, making sure that they aze no longer seen as "business as usual." Each graniing agency around the state'is now charged with the task of developing sfandard criteria by which they will evaluate all future su.bsidy proposals. I have review�d and have three serious concerns about the PED's proposed criteria for awarding fufiure business "subsidies. Mr,n�«;,c;o�,f " First of all, I do nof believe that the resolution brings the City of "°`�n`°"'` Saint Paul, into compliance with the 1999 State Business Subsidy ' MN COACT Ac� To begin with tkus resoiution does not indude standard � '""c°"�c�^r�a,°"°�^^e'� criteria for evaluafing subsidy proposaIs, but instead questions Ehat tdNCommuoityActionAssodatbn need Eo be considezed. My understanding of the term "CI1tEI13" 'MNCOnsumerAlliance leads me to believe that the Council s2tiouId oufline answers to MN NadOnslbrggnixeRon �� quesEions that they would find acceptable. This �would aliow � for Women MNSenibrFederatio� �''e rnrnmuniry and businesses consideririg applying for subsidies a clear understanding of the types of projects in which the City o# Netlon3149wyer5 GY�10 - . M;��,,, Saint Paul is willing to invest public money and the community o�cr�,�„n;�„�,� standards to which they wili be held.: � SE1u sWa council C7 UNITE -Ne.them District �aint Board UnitcOAUto Warkers United Steel Workers of a�cno. _ otst.¢r u UniceC Transportstion Union Urban Coalition Women Against Mili[ary MOdness _�. 1821 Up1YER51SY AVSNUF" SUITE $•307 � Sr. Pnul, MN Si104 In addition, it is noE clear to me from the information provided in the two page resolution that this proposal fulfills the statutory requirement thaE the criteria include a policy on wages. This . proposal may reference a wage policy found elsewhere in city ordinances with the statement that, "a subsidy agreement [must) include ... wage and benefit goals that meet all City ordinances and resolutions regazding business subsidy and wage and job goals." If this is the case, Ehen the proposal may be in cozztpiiance with the IetEer of the new law. Whether it is in compliance with the intent of the law, however, is a differenf mat�er. The point of xequiring a public hearing when esfabtishing the criEeria for subsidy pzoposals was to ensure that the community was gi�e�a the opportunity eo review and spsak out about the proposed critezia. Failirig Eo clearly '�' �652)64i•ya5o fax � ( e•mafl Staff�mapa•mn.org 8-11-7999 9:59AM FROM MAPA / ACT 651 6a1 �53 P_1 (� C� �' l �1 ..� state the proposed wage polzcy (if there is one at all) cheats St. Paul citizens by not giving them enough information to make informed judgments about this proposal. If the intent is to fuifill the requirement for a wage policy by referencing the City's Living Wage Policy, this raises a number of questions. The threshold for SE. Paul's Living Wage Policy is $100,OD0. The state law covers all subsidies over $25,000. There are numerous types of subsidies that are exempt from the Living Wage Policy, but are covered by the 1939 State 'Busin2ss Subsidy Act Is the intent to bzoaden the City's Living Wage Policy to cover a11 subsidies over $25,000? If not, then what is the pzoposed wage policy for subsidy proposals that ars not covered by the City's Living Wage Policy? F'inally, section 8 of the resolution, which requires that grants "be structured as forgivable loans or else the agreement must state the fair market value of the subsidy to the recipient;' is definitely not in compliance with the new statute. The 1999 State Business Subsidy Act requ'rres granting agencies m stop the pracEice of giving subsidies as grants. A subsidy that would have been structured as a grant must now be struchued as a forgivable loan. Subsidy agreements for other types of subsidies (TIF, loans, etc•) must state the fair market value of the subsidy to ehe recipient. Section 8 of the resoiution needs to be rephrased to come into compliance with the new law. Allowing the public to give informed input on standard criteria for subsidy proposals is a critical piece of the 1999 State Business Subsidy Act. I urge you to rnnfinue Eoday's public hearing until August 25th to r,,.i've yourselves and the PED staff fiime to redraft these criteria, keeping in mind the intent ot this legislation and the weight of the res given to you when you choose to invest our hard- earne tax ollars in privaEe enterprises. Thank you for your time and attention to this znatter. If you would like to discuss this further or have any questions about my concerns, please contact me at the MAt'A office.