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ITEM 3.4 Economic Developement Policy revisionsOtsTY F zo MINNESOTA DEPARTMENT INFORMATION Request for City Council Action ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE: Administration City Administrator/Finance Director Flaherty April 23, 2018 PRESENTER(s) REVIEWED BY: ITEM #: Consent Agenda 3.4 STRATEGIC VISION MEETS: I THE CITY OF OTSEGO: Strategies and Priorities Policy. Is a strong organization that is committed to leading the community through innovative communication. IS A PUBLIC HEARING REQUIRED? Has proactively expanded infrastructure to responsibly provide core services. No Is committed to delivery of quality emergency service responsive to community needs and expectations in a cost-effective manner. X Is a social community with diverse housing, service options, and employment opportunities. After review of the existing policy, the EDA Board recommends the proposed revisions. The proposed Is a distinctive, connected community known for its beauty and natural surroundings. AGENDA ITEM DETAILS RECOMMENDATION: City staff is recommending that the City Council adopt the revisions to the Economic Development Strategies and Priorities Policy. ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED? No No BACKGROUND/JUSTIFICATION: The City of Otsego Economic Development Authority (the EDA) held a meeting on February 26, 2018. At that meeting, the EDA Board reviewed the Economic Development Strategies and Priorities Policy. After review of the existing policy, the EDA Board recommends the proposed revisions. The proposed revisions include significant items such as: - Moving retail development from a medium priority to a high priority. - Moving senior housing from a high priority to a medium priority. The other revisions are grammatical in nature and make the policy easier to read. SUPPORTING DOCUMENTS ATTACHED: - 0 Economic Development Strategies and Priority Policy (RED -LINED) POSSIBLE MOTION PLEASE WORD MOTION AS YOU WOULD LIKE ITTO APPEAR IN THE MINUTES: Motion to adopt the revisions to the Economic Development Strategies and Priorities Policy. BUDGET INFORMATION FUNDING: BUDGETED: N/A City of Otsego Economic Development Strategies and Priorities Policy This Economic Development Strategies and Priorities Policy (Policy) is in place to ensure that the City's limited economic development resources are used to achieve the City's highest priority economic development goals. The Council must consider each request for assistance in the context of this Policy. The Policy may be amended by the Council at any time and should be reviewed periodically to realign the Policy with changes in City development, priorities, economic and financial conditions, and applicable laws. The City Council has complete discretion to determine if 4-a project will receive City assistance, the type of assistance and the amount of assistance. The City Council may va+y-deviate from this Policy in the event that a unique development opportunity is presented that does not fall into the established criterial but that the City Council determines will provide benefit to the City and its residents. City Identified Priority Projects: After thorough review of current conditions and development of the City, and after examining long term City goals, the City Council identified high priority projects and initiatives that: • Enhance the City as a whole • Provide jobs to residents • Create tax base to sustain a reasonable tax rate that will support the ongoing, necessary core services along with the amenities the residents desire. High Priority Proiects and Initiatives may be considered for City assistance or incentives, if eligible and available, and if the Council believes the project would not occur without such assistance. The City Council, in its sole discretion, will determine if a project will receive City assistance and the amount of such assistance. Medium Priority Projects and Initiatives are important to the development of the City and to enhancing the community but are typically not eligible for City assistance. In rare cases the Council may determine that a project warrants assistance because of an unusual circumstance that exists that which prohibits the development from occurring and the project has benefit to the City. Low Priority Proiects and Initiatives are projects or initiatives that the Git-r-Council has determined are of such nature, t#at-that other assistance is readily available in the community and the project or initiative does not provide benefits justifying City assistance, sweh as the need feF redo elepment. The City Council has identified the following as development priorities and initiatives: Adopted: May 23, 2916DRAFT OF UPDATES FROM 2-26-2018 1. High Priority Projects and Initiatives a. Projects that bring jobs with substantial pay to employ residents b. Projects that increase the City tax base c. Creating and assisting with the creation of shovel ready sites for targeted future development d. Manufacturing development e. Office and professional development t --f. Retail development f. c r heusin„ development with amenities typieal of senior he sing 2. Medium Priority Projects and Initiatives a. Warehouse development a.b. Senior housing development with amenities typical of senior housing b. Retail develepment 3. Low Priority Projects and Initiatives a. Low to Moderate Income Housing b. Multifamily Housing c. Redevelopment City Assistance: State laws and City Policy allow for several forms of City assistance to projects that meet certain eligibility criteria. Incentives to attract certain types of projects, jobs, or development include: 1. Tax Abatement 2. Tax Increment Financing (TIF) 3. Economic Development Loan 4. Assessment of SAC/WAC fees 5. Support of grant and loan fund applications to other government entities or non-profit organizations All assistance must comply with the provisions of the City's Business Subsidy Policy. All TIF shall be pay as you go only with the exception of City infrastructure that may be funded through bonds. The City will consider the merits of each project before determining if it meets the City's long -t -H4on� term objectives and is eligible for and worthy of assistance. Generally, Tax Abatement and TIF assistance are reserved for High Priority Projects and Initiatives. Both High Priority Projects and Initiatives and Medium Priority Projects and Initiatives are eligible for Economic Development Loan, assessment, and grant support assistance. Additional criteria may apply to projects requesting City assistance including but not limited to the following: Adopted: MaDRAFT OF UPDATES FROM 2-26-2018 1. Assistance to manufacturing projects is dependent upon the new jobs meeting wage criteria as determined by the Council 2. Redevelopment of blighted Iew +ncomelow-income housing may qualify for assistance as determined by the City Council 3. Land write down will be considered only for properties in the flood plain where fill is required to make the site buildable 4. The City may impose additional development requirements including but not limited to higher building design standards 5. The City may require a minimum value assessment agreement Assistance for public infrastructure to serve the development will be considered under the following circumstances: 1. The project is a High Priority Project and Initiative 2. The street is identified as a Collector street; local streets are not eligible 3. It is needed to create shovel ready development sites City assistance to a project will be determined based on at least one or more of the following factors: 1. A maximum percent of the project cost 2. A maximum number of years of TIF or Tax Abatement assistance 3. A maximum per type of project 4. By the location of the project 5. By the number and wages of jobs created 6. By the market value created 7. If it is a High Priority Protect and Initiative The above Policy shall serve as a general guide for administering financial assistance to economic development projects. The City Council shall interpret the policy and determine its applicability to each individual project. The Policy may be amended or changed from time to time by majority vote of a quorum of the City Council. The Policy is a general guide for evaluating proposals and not a rule or eFdordinance and is subject to change. Parties seeking assistance should understand that it is only a general guide for evaluation and does not provide applicant with any assurance that the City can or will provide requested assistance, even if the proposal appears to meet the criteria established within the Policy. Applicants present requests to the City at their own risk and expense, and the City accepts no liability of any nature by receiving and evaluating the proposal. Adopted: May 23, 29161DRAFT OF UPDATES FROM 2-26-2018