HomeMy WebLinkAboutHEDRA 09-10-09 IV. d. Labboy Land Credit recomendationsSeptember 3, 2009
TO: EDR.A Board
FROl\1: John Grossman, Director
RE: Labboy Enterprizes, LLC (Gary Iocco)
The EDR~ Board's role in Industrial Park land sales is reviewing the specifics and terms
of the purchase and land credit proposal and making a recommendation on the sale and
flee business subsidy to City Council. Upon EDRA approval, the development and
business subsidy agreement will be prepared. Site and building plan review is the role of
the Planning Commission. These reviews and agreement will all be presented to Council
on October 5. Given approval, the goal is to close by the end of that week.
EDRA gaee preliminary approval to this proposal at the meeting of April 9, 2009. See the
attached updated information form and map shovaing flee location of Lot 7.
Red Wing Dental arts, the business, is a full service dental laboratomy producing dentures
partials and restorations. Labboy Enterprizes LLC will be the property owmmer. Gamy
Iocco is the President of the business and the managing partner of the LLC.
Terms
1. The City will deed one acre valued at $71,874 to Labboy Enterprizes LLC for a price
of $1.00. The balance of the value will be defened for five years.
2. Labboy commits to have 12 jobs, employees of Red Wing Dental, on flme site wiflmin 2
years. New hires will be a minimum of $10.00 an hour. Facilities now in Cottage Grove
and Red Wing, are to be combined in Hastings. They anticipate 15 jobs in five years.
3. Labboy proposes to build anoffice-lab of about 6,048 sf at a cost of $414,300, and
with interior build out $569,600. The building and pamking lot improvements will
exceed 20% lot coverage. Red Wing Dental will be the only tenant.
4. Labboy commits to remain in business in Hastings for five years.
5. If in five years, the credits do not exceed the defen ed land value, or if the business
ceases to operate in Hastings, Labboy will owe a prorated amount of the land value to the
City and that amount could be assessed if necessary.
Business Subsidy Analysis.
1. The land credit inforation sho~a~s that the credits will exceed the defemred value of
the land, largely because (in five years) 15 jobs at an average of $16.50 an hour create u
payroll of approximately $700,000. Labboy Enterprizes LLC should not owe the City
any portion of the deferred land price ($71,873).
2. The project meets or exceeds the following EDRf1 business subsidy criteria:
• Two or three jobs per acre of land.
• A minimum of $10.00 an hour for new hires.
• The building itself is 14% ofthe lot. This is short of the 20% normally expected,
but with parking and drives, lot coverage is 20%. This is offset by the unusually
high number of employees for the size of the building.
3. The project has the following public purposes:
• Increases the tax base by building on tax exempt property.
• Adds twelve to fifteen jobs at living wages to Hastings.
• Adds to the Graz iety of employment opportunities in Hastings.
• Uses land in the city's industrial park and is an appropriate business near
residential areas.
ACTION: Make recommendation to City- Council on the sale of City land to Labboy
Enterprizes LLC and the terms, criteria and public purposes of the land credit (business
subsidy).
INFORMATION FOR LAND PRICE SUBSIDY AGREEMENT
1. Nance, address, phone of developer (dte persons or entity- drat will be dte owner of the land)
Gary Iocco
LabboyEnterprizes, LLC
1434 Old N~est_Main Slr~eet, Red Wing, _/LIIJ 55066
651-388-4464
2. Developer's type of entity (corporation, partnership) recorded widt the Secretary of State
Limited Liability Corp
3. Developer's Federal Tao ID number
41-I9475I9
4. Full names and title (president, etc.) of those signing agreement for the developer
Gary Iocco, Managing Partner
5. Property: the acreage and legal description of the city property to be sold (2.1):
Lo! 7, Haslzngs Indush~ial ParkNa. ? 1.0 acre, 43,560 sf
6. The market value of the property to be acquired (3.2)
$1.6i sf = $71,874
7. The agreed purchase price (3.2)
$1.00
8. Difference between purchase price and market ealue of the property, the subsidy (3.8):
$71,873
9. Date to which payment is deferred (3.8)
5 years after date on Certificate of ~Occupatzan issued by Hastings Building Official
10. Costs to be paid by developer (3.4, 3.5)
Purchase price
Title work and insurance as needed
Surrey (site plan requirement)
Environmental investigations as needed
City's costs for legal, financial review and closing
Recording fees for deed, mortgage & development agreement
11. Proposed size and market value of buildings to be constructed on the properlu (2.2)
6,048 sgft. $372,870 -the assessors market valise is are estimate, 90% of $414,300.
12. Proposed annual payroll (increase over existing) on the properly in fiveyeus (22)
$700,000
13. Estimation of credits (3.8) See examples in summary.
a. construction credit example: assessors market valise of 5'37, 870 divided by IO
= 537, 387 credit
b. jobs credit example: 5?00, 000 annual payroll divided by 537, 000 = 36,~ 36X
513, 000 = $313, 000 credit
14. Job and wage goals to be reported to Minnesota Department of Trade ~ Economic
Development (3.9) to comply with Business Subsidy Act.
a. Number of new jobs created by the business two years from occupancy:
13 in lWO Vears
b. Hourly wage of new jobs to be no less than:
No less than $10.00 per hour.
15. Construction (4.3)
a. Building construction costs (include puking lots, not land):
5-t1-F,300
b. Appro~mate beginning and completion dates of construction and all site work:
Starling October I5, 3009, completion by June I5, 3010
1G. If the developer is not the same entity as the business which will occupy the building
and provide the job creation, provide the follo~a~ing for each tenant: developer zs also
sale teizmzt
u. Business name
Red N%ingDentalArts
b. Address and phone
Same as developer
a Names and titles of o~nners of the business
Same as developer
d. Type of entity recorded with state
Minnesota Sub S L'orparatian
e. Tax ID number of business.
41-1314441
f Nature of the business (what product, process, material)
Dentallaboralory
g. Percent of building space to be occupied by business
100
h. Number of the jobs given above (No. 14) that this business be responsible for:
100%
17. Recent history of the business or if new, the owner's experience in the business and/or
resume (Use separate page and business letterhead if available).
18. Business references, contact person and phone number:
banker: Brzsce Downey, Gateway Bank, I~Iendata Heights, MN 651-X09-4b'00
21. List all lenders, contact persons, phone numbers
Bruce Downey, Gateway Bank
22. List all sources and amounts of public assistance including land, government loans
and grants (including those you have or may apply for)
Hastings Land subsidy yragrarn
23. The developer will have to provide business financial records to a consultant hired by
the City. The information will be confidential to full extent the law provides.
24. Any lawsuits or actions pending against the developer, busines(s) or p:utners'?
No
25. Nance, title, signature of person providing the above information.
Garyloccq Managing partnerLabboy, LLC and President, Red Wing Dental Arts
Date 9/2/09
26. Eligibility under EDRA subsidy criteria:
a. Job arxd wage goals meet criteria ($I U mirximum arxd 2 yer acre)
b. Plans will be reviewed to ensure confbrmace with zoning code
c. Five year cammitmeizt to remain in community will be inclaeded in agreement.
d Community costs great the lowest level: the value of one acre, the smallest ylatted
parcel available; staff review anticipates no other cost or enviranrnental imyacts.
27. Public purposes under criteria:
a. Increase tax base
b. Create quality jobs an the site
c. Enhance community economic stability: no other existing business oftlais type in city.
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Dakota County, MN
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Disclaimer: Map and parcel data are believed to be accurate, but accuracy is not Map Scale
guaranteed. This is not a legal document and should not be substituted for a title search, ~ Inch = 378 feet
appraisal, survey, or for zoning verification.
http://gis.co.dakota.mn.us/website/dakotanetgis/printPreview.aspx'?PrintOptData=Dakota C... 4/3/2009
