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95-3981 � 3 4 5 6 7 8 9 10 1� IZ 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 ������ � - `�-\R-`LS Council File # + J r ✓� D creen sheet # ZI �j'�D RE50LUTION ►IlVT PAUL, NIINNESOTA Presented By Referred To Committee: Date 13 WF�REAS, The City of Saint Paul is permittetl to apply, on behalf of companies located in Saint Paul, companies that plan to locate in Saint Paul, for up to $500,000 in financial assistance from the Department of Trade and Economic DevelopmenYs Economic Recovery Fund Program; and WFiEREAS, The City of Saint Paul by its Department of Planning and Economic Development (PED) administers business applications for assistance from the State Economic Recovery Fund Program; and WF�REAS, the City Council wishes to ensure that Saint Paul submits an annual application to the state for business projects which have the masimum positive economic impact on the City; and WFIEREAS, to facilitate PED solicitauon of business applications for state funding, City guidelines have been developed by the Department of Planning and Economic Development; and WHEREAS, applicauons to PED will be evaluated on a compefidve and equal basis; and WHEREAS, the City Council believes that through adoption of the guidelines and implementation of a competitive application process, the City will masimize the economic benefits from pzojects that receive state funding; WHEREAS, the City of Saint Paul must hold a Public Hearing and the City Council must approve any application before it is submitted to the State. NOW, TE3EREFORE, BE IT RESOLVED that the City Council hereby adopts the pro guidelines for PED 'stration nf annlicatinns f�r the Fconnmic Re,cove nn '° l S�P r�cx-1- naa� �_ Y� Navs Absent � y p �}� °�"�' a Re ested b De artment of: cr.c�, mer� �-, Plan n& Econ ic Dev lo ment B� 'La� � � Adopted by Council: Date S Form Approved by City Attorney Adoption Certified by Council Secretary By: Approved by�i or: Da �' g � e� -: �i .rii}`�� r -v . -. . _ . . . . ` �/� ,/ �' �L.�L..♦ � °{ 5 - � ° t� t� DEPARTMENT/OFFICFJCAUNqL DATE INITIATED P � �� �,9 GREEN SHEET N_ 2 t 9 2 0 INITIAVDATE INffIAUDATE CAMACT PERSON & PHONE ' Q DEPAH7MENT �IRECTOR � CIiY CDUNqL Karie Franchett-(266-6702) ^��" cmnsroaNer �CSTYCLERK MUST BE ON COUNCIL AGENDA BY (DAT� N ppp{�NG� R � BUDGET DIRECTOR � FlN. & MGT. SEflVICES Dlfl. ORDER Mqypq(ORASSISlAN'f) rie Franchett Apri1 12, 1995 � �a TOTAL # OP SIGNATURE PAGES � (CLIP ALL LOCATIONS POR SIGNATURE) ACT70N REQUESTED: City Council. app=oval of proposed Economic Recovery I�nd guidelines for PED a��*+�stration of the program. RECOMMENDATIONS: Apptave (A) or Rejecl (R) pERSONAL SERVICE CONTHACTS MUST ANSWER TXE FOLLOWING �UESTIONS: _ PLpNNING COMMISSION _ CIVIL SERVICE COMMISSION 1. Has ihis persoNfirtn e�er worked under a wMrac[ for Mis department? , qB COMMI'REE YES NO — 2. Has this perso�rm ever been a ciry employee? _ STAFF _ ,,� � _ DIS7RICT COUR7 — 3. Does Mis person�rm possess a sltill not normally possessed by any curten[ c'rty employee? SUPPORTS WHICH COUNCIL OBJECTIVEI YES NO Explain all yes answera on separate sheet antl attach to green sheet , INITIATIN PROBLEM, ISSUE, OPPORTUNT' (Who, What, When, NRrere, Why�; �e���;`��p�y. /der.�s �=equested that PED staff p=opose a method of effectively administeiing Saint PauliFimdsreceived from the State Department of Trade and Economic Development's Economic Recovery Fund Program. ����,���� �Q� � 1 ��� ADVANTAGES IPAPPROVED: ��'� _ s .• Effective utilization of state funds to maaimize economic benefits for the City of Saint Paul. DISADVANTAGESIFAPPROVED: None. DISADVANTAGES IF NOTAPPROVED: TO7AL AMOUN7 OF TRANSACTION $ N �A COS7/REVENUE BUDGETED (CIRCLE ONE) YES NO FUNDINGSOURCE N�A ACTIVITYNUMBEH FINANCIAL INFORMATION: (EXPLAIN) 95-398 AMENDMENT � U�� ��:)�iIFY will be included at tiated bv the Denartment of Plannine and �►MENDE � ' y119195 QS-3�g Economic Recovery F�nd Program Guidelines for Application to the Department of Planning and Economic Development The focus of the Minnesota Department of Trade and Economic Development's Economic Recovery Fund Program is to facilitate the creation and retention of jobs and to leverage private investment. Assistance is targeted to economic development projects that have a critical impact on communities. DTED only accepts project proposals submitted by municipalities, so businesses interested in the prob am must apply to the Department of Planning and Economic Development. Saint Paul has traditionally utilized Economic Recovery Funds for large scale projects, where significant numbers of jobs are created or retained. The City is eligible to apply for up to $500,000 per �iscal year far projects in Saint Paul. Funding can be utilized for major capital investments in equipment or machinery, purchase of property, and for construction or renovation projects. Terms are fleuble depending upon the needs of the project. Businesses interested in the pro�am should contact the Department of Economic Development to obtain a preliminary application. The City may submit an application to DTED for one or more projects but any and all projects must be included in one application and the total request for financial assistance cannot exceed $500,000. City Council approval is required for submission of an application to the state. Although the City may submit an application to the state, funds will not necessarily be awarded by DTED. All projects assisted with program funds must comply with all State and local laws and policies pertaining to the use of funds such as Prevailing Wage Standards, affirmative action programs and the First Source program. The City mav require pro1ects to provide paid internship Eligibility Criteria Eligible projects include those projects that will create or retain jobs, wiih particular emphasis on jobs in the manufacturing sector and the provision of empioyment opportunities for low and moderate income St. Paui residents. To qualify for fmancial assistance ihe applicant must demonstrate a financial gap and f or that there is evidence the company may move out of state. Documentation of offers of financial assistance from another state will be required in cases of possible business relocation. A letter from the Chief Executive Officer, describing the company's possible relocation plans, will also be required. Eligible activities include: Acquisition of property and/or new construction Building renovation Purchase of machinery and equipment Infrastructure improvements Professional fees related to construction or renovation �5-3�$ Ineligible activities include: Working capital Retail development Development of new industrial parks Incnbator facilities Project Rating Criteria Projects must score a minimum of 250 points to qualify for fhe program. When determining project competitiveness, PED will focus on the following criteria: l. Impact on the surrounding community. Projects which will have a significant positive impact on the community. To qualify for points (0 or 100) the project must meet one of the following criteria: Elimination of blight Increase the tax base by at least 50% Significant contamination cleanup 2. Ratio of Public Assistance to each full-time equivalent job (2080 hrs) $2,�00 or less per job 100 $2,501 to $7,500 75 $7,501 to $10,000 25 Over $1�,�00 0 3. Private dollars leveraged by investment of public dollars. Projects must leverage at least three private dollars of investment for every one dollar of public investment. Projects with higher leverage ratios will be more competitive. Private investment must be in the form of new commitment. (0 to 100 points) $7+ private:$1 public 100 $6:$1 80 $5:$1 60 $4:$1 40 $3:$1 20 4. Number of jobs to be created or retained. To qualify jobs must be full time equivalents (2080 hrs) and pay a minimum of $7.�0 per hour. (0 to 50 points) 100 or more jobs 50 75-99 jobs 40 50-74jabs 30 25-49 jobs 20 0-24 jobs 10 RS-3`t$ 5. New or retained job opporfunities for SainY Paul residents where the jobs pay no less than �750 per hour. (0 to 50 poinfs) 100 or more SO 75-99 40 SO-74 30 25-49 2� 0-24 10 6. Repayment of Loan Funds Company's that propose to repay loan funds within ten years will receive 75 points. Company's that propose to repay loan funds w�ithin ten years and propose to repay funds with interest will receive an additiona125 points for a grand total of 100 points. The D'uector of the Department of Economic Development will establish a timeline for submission of business proposals for financial assisTance from the Economic Recovery Fund. Fees A nonrefundable application fee of $250 must be submitted before PED makes an application to the State. An 1.5% origination fee will be charged for any loan awarded. Depending on the structure of the loan, an annual administration fee may be charged. DEPARTMENT OF PI.ANNING & ECOI`�OMIC DEVELOPMENT Larry D. Buegter, Director CiTY OF SAINT PAUL Norm Coleman, Mayor Date: April 19, 1995 To: Councilmember Jerry Blakey Councilmember David Thune Councilmember Michael Harris Councilmember Roberta Megard Councflmember Janice Rettman Councilmember Marie Grimm Councilmember Dino Guerin From: Re: Pnrpose 25 Wese Faursh Saee[ Saint Paul, MN SSZ02 Marie Franchett Business and Development Division, 266-6702 q� � �� Zelephone: 61?-266-67Q0 Facsimile: 612-228-3261 PED guidelines for the administration of funds received fmm the Department of Trade and Economic DevelopmenPs Economic Recovery �nd Program The purpose of this report is to obtain City Council approval of proposed guidelines for Saint Paul PED administration of funds received from the Minnesota Department of Trade and Economic Development (DTED) Economic Recovery Fund Pro�am (ERF}. The HRA Board directed staff to e�lore methods of administering Saint Paul applications to DTED for ERF funds. Since the City Council is the administrative body which must approve any applications that are submitted to the state, the proposed ERF guidelines are hereby submitted to the City Council instead of the HRA. State Economic Recovery N�nd Program DTED administers the State's Economic Recovery Fund Program whose purpose is to assist communities in addressing critical economic development needs by stimulating private investment in order to expand, maintain or start a business. The Minnesota State Legislature appropriates funds for this program every two years. State grant funds under this program can be used by communities to make loans to businesses for start-up or expansion. All typical business eapenses including acquisition of real estate, building construcfion or renovation, and purchase of machinery and equipment are eligible for funding under the State's program. Rs 3�� The State's program requires that projects meet two of the foAowing criteria: l. The project must create or retain one permanent private sector job for each $20,000 in grant funds; and/or 2. The project must leverage private funds; and/or 3. The value of the real estate assisted by the proposed project is increased. To receive funding it must be demonstrated that there is a financial gap or that the Company may choose to relocate outside of the State unless incentive financing is provided. In addition eligible projects must either benefit low- and moderate-income persons, prevent or eliminate slum and blight, or alleviate urgent community development needs. Funding is awarded by the state based on the project competitiveness and funding availability. Saint Paul Eligibility T`he City of Saint Pau1 is e&gible to apply for up to $500,000 in assistance from the ERF program for eligible Saint Paul projects. The State awards grant funds to the Gity and then the Ciry enters into a loan agreement with the project applicant. Prior to submitting an application to the State, the community's City CouncIl or governing body must approve submission at a public hearing. Neigh6orhood groups affected by the project must also be informed about the proposed submission and typically have the opportunity to comment on the application. The City is permitted to keep the first $10Q,OQQ in principalloan repayments, and all interest repaid to that point, provided that the loan repayments are used in a revolving loan fund for economic development projects. The remaining loan amount that is repaid must be returned to the state. Proposed PED Guidelines To assure that St. Paul is able to most effectively utilize funds avaIlable from the State Economic Recovery Fund Program, staff proposes that the Ciry adopt guidelines for the program and then solicit applicatians from the business community. Instituting a competitive process will ensure that public dollars, received from the state, maximize private investment and job creation in Saint PauL The PED Credit Committee has reviewed and approved the attached proposed guidelines. �1�3�f1 The proposed PED guidelines and rating criteria focus on job creation, the leverage of private anvestment, impact on the community and repayment of loan funds. St. Paul is permitted to apply for funds for more than one project but may submit only one funding application for projects each year. DTED awards funds, in part, on a first come, first serve basis. The State makes its funding awards July ist of each year. If we submit our DTED application to the state, substantially in advance of the July lst funding award date, we will increase the competitiveness of our application. PED anticipates soliciting project applications the fall of 199� for funds to be received for fiscal year July 1996-1997. Current Applicant The Port Authority has been working with the Merrill Cotporation on retention/eapansion plans for the last two years. Merrill is a financial printing company and has 628 employees based in theu St. Paul headquarters. Merrill has a long term financing lease with the Port for One Merrill Place in Energy Park and has been leasing space in Energy Park Business Center West. T'he proposed retention project would involve the purchase of the Energy Park Business Center West and East buildings and related renovation improvements. Recently Merrill has committed to stay in Saint Paul, in part, on the condition that PED forward to the City Council, an application for $500,000 in financiai assistance from DTED's ERF. The PED Credit Committee has reviewed and approved of the Merrill project request for financial assistance from the ERF program. The proposed Merrill project would qualify for ERF assistance under the proposed PED guidelines under consideration today. Because of increased competition for funds, DTED has informed PED that a completed application must be submitted to DTED no later than mid-May to apply for funding for fiscal year 7uly 1995-1996. 5taff anticipates requesting City Council approval of the Merrill application within the near future. Public Purpose The proposed guidelines and competitive application process will ensure that St. Paul utilizes State Economic Recovery Program funds for projects provide the maximum level of economic benefits for the City. 9� Recommendation Staff recommends that the City Council approve the attached resolution thereby adopting the proposed guidelines for PED administration of applications for funding from the state Economic Recovery Fund. q �q$ Economic Recavery E�nd Program Guidelines for Application to the Department of Planning and Economic Development The focus of the Minnesota Department of Trade and Economic De� Recovery Fund Program is to facilitate the creation and retenuon of investment. Assistance is targeted to economic development projects on communities. DTED only accepts project proposals submitted by businesses interested in the program must apply to the Departmen�' Development. �� lopm t's Economic �bs nd to leverage private t have a critical impact mnicipalities, so Planning and Economic Saint Paul has traditionally utilized Economic Recovery Fu s for large scale projects, where significant numbers of jobs are created or retained. The ty is eligible to apply for up to $SOQ000 per fiscal year for projects in Saint Paul. Fun ' g can be utilized for major capital investments in equipment or machinery, purchase of . operty, and for construction or renovation projects. Terms are fle�ble depending u on the needs of the project. Businesses interested in the program should contact the Dep ment of Economic Development to obtain a preliminary application. The Ciry may submit an application to DTED or one or more projects but any and all projects must be included in one application and the otal request for financial assistance cannot exceed $500,000. City Council approval is require for submission of an application to the state. Although the City may submit an applica on to the state, funds will not necessarily be awarded by DTED. � All projects assisted with program fu s must comply with all State and locallaws and policies pertaining to the use of funds such � Prevailing Wage Standards, affirmative action programs and the First Source program. / Eligibility Criteria � Eli,gible projects include those rojects that will create or retain jobs, with particular emphasis on jobs in the manufacturingu ector and the provision of employment opportunities for low and moderate income St. Paul r sidents. To qualify for financial assistance the applicant must demonstrate a financial ga and/or that there is eminent danger the company may move out of state. Documentation of � ffers of financial assistance from another state will be required in cases of possible busine relocation. A letter from the Chief Executive Officer, describing the company's possible rel��cation plans, will also be required. Eligible activities Acquisition of prc Building renovat�' Purchase of ma�h and/or new construction and equipment related to construction or renovation Ineligible activities include: Working capital Retail development Development of new industrial parks Incubator facilities Project Rating Criteria Projects must score a minimum oF 250 points to qualify for the program. When determining project competitiveness, PED will focus on the followv 1. Impact on the surrounding community. Projects which will have a significant positive impact on the i points (0 or 100) the project must meet one of the following Elimination of blight Increase the tas base by at least 50% Significant contamination cleanup 2. Ratio of Public Assistance to each fiill-time $2,500 or less per job 100 $2,561 to $7,500 75 $7,501 to $10,000 25 Over $10,Q00 0 !� r �$ � � ., f ," ` �riteria: ry. To qualify for job (2080 hrs) 3. Private dollars leveraged by investm `t of public dollars. Projects must leverage at least thre private dollars of investment for every one dollar of public investment. Projects with h� er leverage ratios will be more competitive. Private investment must be in the form o new commitment. (0 to 100 points) $7+ private:$1 public $6:$1 $5:$1 $4:$1 $3:$1 4. Number of jobs to To qualify jobs mt hour. (0 to 50 pou 100 or more 7�-99jobs 50-74jobs 25-49jobs 0-24jobs 100 80 60 40 20 eated or retained. full time equivalents (2080 hrs) and pay a minunum of $7.50 per 50 40 30 20 10 95- 5. New or retained job opportunities for Saint Paul residents where the jobs than $7S0 per hour. (0 to 50 points) 100 or more 75-99 50-74 25-49 0-24 50 40 30 20 10 no less 6. Repayment of Loan Funds Company's that propose to repay loan funds within ten ." ars will receive 75 points. Company's that propose to repay loan funds within te�ears and propose to repay funds with interest will receive an additiona125 points for �' grand total of 100 points. The Director of the Department of Economic submission of business proposals for financial Fees A nonrefundable application fee of $250 must the State. An 1.5%o origination fee will be charged for Depending on the structure of the loan, an�n ent will establish a timeline for from the Economic Recovery Fund.. before PED makes an application to loan awarded. ial administration fee may be charged. t�