14c. New/Existing Incentive Programs I ,.,:: CITY OF -
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\ ''i . CHANHASSEN
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690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
612 937-1900
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' I MEMORANDUM
TO: Mayor and City Council
IFROM: Don Ashworth, City Manager
DATE: September 26 , 1988
SUBJ: New/Existing Incentive Programs
The Housing and Redevelopment Authority on Thursday, September
22 , 1988 acted to restate their desire to continue offering
I incentives to new and existing businesses wishing to build within
the community. Specifically, the HRA currently looks to special
assessments/land write-down programs to the maximum equivalent of
3 years of taxes from the facility. As not all businesses are
located within the HRA' s tax increment district, the question
which would like to discuss Monday evening is whether this same
type of policy should be considered for other commercial/industrial
! I properties within the City.
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CITYOF
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CHANHASSEN
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690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937-1900
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MEMORANDUM
TO: Mayor and City Council
CONFIDENTIAL
FROM: Don Ashworth, City Manager € el;
DATE: September 26 , 1988
SUBJ: New/Existing Incentive Programs 1
BACKGROUND 1
This past week this office was notified by the Minnesota Department
of Trade and Economic Development that Redmond Products was con-
sidering
a proposal to construct a new facility in Sioux Falls,
South Dakota. The state then asked the City if we would consider
making some type of offer to Redmond Products if they were to
carry out their expansion/new construction in Chanhassen. The
state has offered to help the applicant in obtaining industrial
revenue bond financing (such approximating the offer being made
by South Dakota) . The Sioux Falls offer would write-down land
expenses for Redmond Products .
PROPOSAL
The Housing and Redevelopment Authority on Thursday evening,
September 22nd, reconfirmed their desire to continue with their
existing policy of helping new/existing businesses by providing
special assessment reductions/land write-downs to a maximum of 3
years of tax increment. If Redmond Products were to consider
constructing a new 200 ,000 sq. ft. facility, the HRA' s policy
could significantly reduce Redmond Product' s costs of specials/
land costs if they were to construct in the business park (an
approximate 20-25 acre parcel is available in the Chanhassen
Lakes Business Park Third Addition . The parcel would be a com-
bination of the McMahon parcel and property south of such up to
new Lake Drive East where such wo.zld connect with Audubon Road -
see attached map) . The second alternative for Redmond Products
would be expansion of their existing facility. As Council mem-
bers may be aware, the Jay Kronick nursery has lost its financing
and will probably not be able to close on the land by September
28 , 1988 . The Jay Kronick property is approximately 5 acres , of
which 2-2i acres is developable. Using the policy of a maximum
of 3 years of tax increment would translate to a land write-down
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' Mayor and City Council
September 26 , 1988
Page 2
of approximately 50% of the land costs. There are some legal
questions with this proposal in that the parcel lies in both
' Carver and Hennepin Counties and partially lies within the
existing Economic Development District. Assuming that such could
be overcome, the question back to the City Council is whether we
' wish to extend the policies currently operating within the busi-
ness park to other commercial/industrial areas. We would like to
discuss this option further Monday evening. It should be noted
' that the State/Redmond Products have both asked that their name
not be publicly used. We leave it to the discretion of the City
Council as to how open discussion can occur while yet respecting
the request of Redmond Products .
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