ITEM 4.4 Gateway North Business Park'Request for
0 t CITY OF
City
Council Action
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oI [ I# T� l DEP F T 1E# T: I EQ ESTOF : IEETI l DATA:
Administration Lori Johnson, CityAdministrator December 9,.2013
PF E ENTE s}: REVIEWED BY: ITEM
Lori Jo h nso n, City Admilni tr for 4.
AGENDA ITEM DETAILS
RECOMMENDATION:
Direct staff to proceed with processing a tax abatement application for Gateway North Business Park per
section 30 of the Development Agreement (Agreement) for Gateway North Business Park dated
September 11, 2006.
ARE YO U 6 EE KING APPROVAL of A CONTRACT?
No
IS A PU BLIC H EARING F EQUIRE D?
No
BA KGROUNDMUSTIFICATION:
On September 11, 2006, the City entered into an Agreement with Duke Realty Limited Partnership
(Duke) for development of Gateway North Business Park. . Tho Agreement includes a provision requiring
the it r to approve tax abatement of up to $600,000 if Dube meets the provisions of the Agreement.
On August 13, 2007, the City and Duke entered into a Tax Abatement and Business Subsidy Agreement
(Abatement Agreement) for Lot 1, Block 1, Gateway North Second Addition. Tac abatement payments
to Duke per thAbatement Ar em nton this project will fall far short of the agreed upon $500,000.
Duke is currently in discussions for a second development ire Gateway North Business Park. Per the
provisions of the Agreement, Dube has requested that a tax abatement agreement be approved for that
project. The project has an estimated construction cost of $15,000,000 which will generate annual city
tax revenue of approximately $134,000.
Staff is requesting direction to proceed with the appropriate actions, including scheduling a public
hearing, if necessary, t approve a tax abatement agreement for this project within the previously
approved abatement limit of $600,000 for the entire development.
SUPPORTING DOCUMENTS: X ATTACHED ❑ NONE
Excerpt from Development Agreement, ate ra r North Business Park approved September 11,
2006
cc rpt from April , 20 .3, City Council meeting minuet s
POSSIBLE MOTION
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Please word motion as you would like it to appear in the m1nutes.
Motion to direct staffto process a tax abatement agreement persection 30 of the Development
Agreement,. apt wa forth Business Park approved September 11, 2006, as requested by Duke Realty
Limited Partnership for a project to be constructed in 2014.
BUDGET INFORMATION
ION
FUNDING: BUDGETED: a YES
ci No
ACTION TAKEN
AP PROVED AS REQUESTED ESTED DENIED n TABLED ❑ OTHER (L!St hang s
COMMENTS:
DEVELOPMENT AGREEMENT
GATEWAY NOR'T'H BUSINESS PARK
based upon actual water usage versus Metropolitan Council standard
calculations. It shall be Developer's responsibility to provide the City with
relevant information on water usage of buildings to be built by Developer
in order to provide a. basis for City SAC and WAC calculations. The City
shall provide Developer with the actual calculations for City SAC and
WAC charges.
If Developer constructs buildings which comply with the paragraph above
having no more than 15% leasable office space, the City agrees to charge
two {2} SAC and WAC fees per complying building.
In the event that Developer submits plans for buildings which exceed a
15% office finish or are constructed for uses which wilt use unreasonably
Large amounts of water, the City and Developer shall negotiate with the
intent of reaching a mutually agreeable charge for any such building, within
the spirit of this paragraph. The SAC and WAC fess for a building that
exceeds 15% leasable office space shall be determined an the same
proportion as a building with 15% leaseable office space. For example, if a
building has 30% leaseable office space, the number of SAC and WAC fees
would be four (4), unless the use proposed for the building requires
unreasonably large water usage, QAC and WAC fees will be established at
the time of sinal platting or upon Building and Site approval for each such
building and shall be contained in a separate development agreement
between property owners and the City. No Certificate of Occupancy shall
be issued until such time as SAC and WAC fees for each building are paid.
Any residential development on Oudot D or any other portion of the Plat
shall b e charged SAC and WAC fees in accordance with said fees in place
at the time of actual development of the property. Said fees shall be
contained -in a separate development agreement for the residential site.
.30. Tax Abatement Applications. Developer has acquired two adjacent
. parcels of property to its original site for incorporation into the Fiat*
Developer has paid* $ 2,000,000.00 for said propenes. Pursuant to it's
initial Agreen ent with Developer, the City will receive application from
Developer for tax abatements in the amount of the difference between
actual payment for said outlots of at least 1.5 million and up to 2 million
dollars. The City agrees to receive and process the application and if
Developer complies with all applicable requirements to receive tax
abatement the City will approve such tax abatements in an amount equal to
$500,000.00 and over a period of ten (10) }years but in compliance with all
applicable statutory requirements and limits.
OTS E O CITY COUNCIL MEETING
OTSEGO PRAIRIE CENTER
April 8, 2013
:o PM
CM Warehime said when n h met with the Fire Board; they requested he attend the fire
departments monthly meeting in Albertville. CM Warehime said he thinks these meetings will b
good thing. The City Council agreed. Mayor Stockamp said she would like to attend some as
well.
City Administrator Johnson said City staff had met with Duke last week on their Gateway
Agreement related to tax abatement; Duke is trying to attract a large facility and Duke is
requesting flexibility within the existing agreement relative to tax abatement. She indicated
there are options available to accomplish that goal and further indicated she had discussed this
with the City Attorney. City staff is looping for direction from the City Council. The City Council
agreed to continue discussions with Duke.
Engineer Wagner said the contractors working on the WV FF roof have asked for n
City
extension to construction hours. They would liker to rl from 7 ani to sunset, The City Council
denied the request being it is close to residential areas.
7, Adjourn.
CM Warehime motioned to adjourn, Seconded by CM Darkenwald, All in
favor, Motion carried. Adjourned at 8.29 P E
Mayor Jessica Ston
ATTEST:
Taal Liffr, City Clerk