ITEM 3.9 Economic Development PolicyArl
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DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT:
REQUESTOR:
MEETING DATE:
Administration
Lori Johnson, City Administrator
May 23, 2016
PRESENTER(s):
REVIEWED BY:
ITEM #:
Consent
3.9
AGENDA ITEM DETAILS
RECOMMENDATION:
Recommend approval of the Economic Development Policy as attached.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
No
No
BACKGROUNDMUSTIFICATION:
The attached Economic Development Strategies and Priorities Policy (Policy) is the product of
comprehensive City Council review and discussion of the City's economic development strategies and
desired outcomes. The Council provided direction on development and redevelopment goals, priorities,
and strategies for the City that are the core of this Policy. The Economic Development Authority (EDA)
subsequently reviewed the draft Policy and concurred that it reflects the development priorities and
goals of the City. The EDA recommended that the City Council adopt the Economic Development
Strategies and Priorities Policy as drafted.
SUPPORTING DOCUMENTS: X o ATTACHED ❑ NONE
• City of Otsego Economic Development Strategies and Priorities Policy
POSSIBLE MOTION
Please word motion as you would like it to appear in the minutes.
Motion to approve the City of Otsego Economic Development Strategies and Priorities Policy.
BUDGET INFORMATION
FUNDING BUDGETED: ❑ YES
N/A
❑ NO
City of Otsego
Economic Development Strategies and Priorities Policy
June 24, 2015, City Council Meeting
Adopted May 23, 2016
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 I project will receive City
assistance, the type of assistance and the amount of assistance. The City Council may vary from this
Policy in the event that a unique development opportunity is presented that does not fall into the
established criteria 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 Projects and Initiatives may be considered for City assistance/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 exists that prohibits the
development from occurring and the project has benefit to the City.
Low Priority Proiects and Initiatives are projects or initiatives that the City Council has determined are of
such nature that that other assistance is readily available in the community and the project or initiative
does not provide benefits justifying City assistance, such as the need for redevelopment.
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The City Council has identified the following as development priorities and initiatives:
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
f. Senior housing development with amenities typical of senior housing
2. Medium Priority Projects and Initiatives
a. Warehouse development
b. Retail development
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 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:
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1. Assistance to manufacturing projects is dependent upon the new jobs meeting wage criteria
as determined by the Council
2. Redevelopment of blighted low 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 Project 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 ordinance, 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.
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