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HomeMy WebLinkAboutIX-01 (a-c) Intek Plastics (1000 Spiral Blvd) Public Hearing & Support of MN DEED Applications City Council Memorandum To: Mayor Fasbender & City Council From: Eric Maass, Economic Development Coordinator Date: May 11, 2022 Item: Intek Plastics - Public Hearing and Resolution supporting Minnesota Investment Fund Application through the State of Minnesota Department of Employment and Economic Development. Council Action Requested: Hold a public hearing and adopt the attached resolution supporting an application to the State of Minnesota Department of Employment and Economic Development for funding through the Minnesota Investment Fund in support of an expansion at Intek Plastics located at 1000 Spiral Blvd. A simple majority is necessary for action. Background Information: Community Development Staff conducted a business retention and expansion (BR&E) visit with Intek Plastics in June of 2021. This meeting is when Staff first learned that due to business growth that Intek was running low on building capacity and would soon need to consider expansion opportunities. At that time, Staff made Intek aware of HEDRAs land holdings within the business park including an immediately adjacent parcel and the City’s desire to collaborate with Intek in an expansion at their Hastings location. Intek Plastics is currently considering an expansion of 60,000 square feet to its corporate real estate portfolio. The proposed project would include $6.6 million in construction and an additional $1.6 million in machinery and equipment investments. The expansion is being considered at its location in the City of Hastings as well as in a city in the State of Ohio. Due to the out of state competition, the State of Minnesota Department of Employment and Economic Development (DEED) and GreaterMSP Partnership have engaged in the site selection process in an effort to help land this business expansion for the City of Hastings and the State of Minnesota. But for the potential that the business expansion could take place outside of the State, this project would not be eligible for funding through the State of Minnesota’s Minnesota Investment Fund (MIF). The Minnesota Investment Fund is a loan program that operates from the State and through City partners. Additional background on the program is as follows: • DEED provides funds to the City which then delivers loan financing to the business. The value of the MIF assistance is based upon capital investment, job creation within two years, wage levels and economic conditions in the City. IX-01 (a-c) • MIF funds would be provided to the City and then the City would deliver funds as a loan to the company to reimburse for machinery or equipment. If the company opts to proceed with a forgivable MIF loan, then the City must agree to the forgivable option and the Company must meet the capital expenditure, job and wage requirements. • MIF funds must be matched on a 1:1 basis; in other words, at least 50% of total project costs must be privately financed through owner equity or other lending sources. • MIF funds and matching funds may be used only to pay for equipment costs incurred after the grant agreement has been signed by the City and DEED. A local resolution is required to be included with the completed application. Based on preliminary expansion project details, DEED Staff has indicated that the project is eligible for approximately $349,000 in forgivable MIF funding from the State of Minnesota or $975,000 as a repayable loan from the State of Minnesota. Intek Plastics has expressed a desire to apply for the full $975,000 of MIF assistance. Financial Impact: There are no financial impacts to the City. Funding would derive from the State of Minnesota with the City serving as an intermediary between the State and Intek. Advisory Commission Discussion: N/A Attachments: • Resolution #05-__22 Supporting Minnesota Investment Fund Application by Intek Plastics to the State of Minnesota Department of Employment and Economic Development. IX-01 (a-c) CITY OF HASTINGS DAKOTA COUNTY, MINNESOTA RESOLUTION NO. 05 - - 22 A RESOLUTION SUPPORTING A MINNESOTA INVESTMENT FUND APPLICATION IN CONNECTION WITH INTEK PLASTICS WHEREAS, the City of Hastings, Minnesota (the “City”), desires to assist Intek Plastics, a manufacturing company which is proposing to construct a facility expansion in the City; and WHEREAS, the City of Hastings understands that Intek Plastics, through and with the support of the City, intends to submit to the Minnesota Department of Employment and Economic Development an application for an award from the Minnesota Investment Fund; and WHEREAS, the City of Hastings held a public hearing at the City Council meeting on May 16, 2022 to consider this matter; and NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HASTINGS, that Intek Plastics, Inc act as legal sponsor for the project contained in the Minnesota Investment Fund Application to be submitted on or about May 17, 2022 and that the Community Development Director and Economic Development Coordinator are hereby authorized to apply to the Department of Employment and Economic Development for funding for this project on behalf of Intek Plastics, Inc. BE IT FURTHER RESOLVED that Intek Plastics, Inc has the legal authority to apply for financial assistance, and the institutional, managerial, and financial capability to administer the proposed project. BE IT FURTHER RESOLVED that Intek Plastics, Inc has not violated any Federal, State, or local news pertaining to fraud, bribery, kickbacks, collusion, conflict of interest or other unlawful or corrupt practice. BE IT FURTHER RESOLVED that upon approval of its application by the State, Intek Plastics, Inc may enter into a Grant Contract with the State of Minnesota for the approved project, and that Intek Plastics, Inc certifies that it will comply with all applicable laws, statutes, regulations and rules as state din the Grant Contract and described in the Project Compliance Certification of the Application. AS APPLICABLE, BE IT FURTHER RESOLVED that the City of Hastings has obtained credit reports and credit information on Intek Plastics, Inc and company owners Sarah Lindahl, John Fort, Elizabeth Door, Allyson Aldrich, William Graham Smith, and Douglas Campbell Smith. Upon review by the City of Hastings and City Attorney Korine Land, no adverse findings or concerns regarding, but not limited to, tax liens, judgments, court actions, and filings with state, federal and other regulatory agencies were identified. Failure to disclose any such adverse information could result in revocation or other legal action. IX-01 (a-c) NOW, THEREFORE BE IT RESOLVED that the Community Development Director and Economic Development Coordinator, or their successors in office, are hereby authorized to execute the Grant Contract and amendments, thereto, as are necessary to implement the project on behalf of the City of Hastings. I CERTIFY THAT the above resolution was adopted by the City Council of Hastings, Minnesota, this 16th day of May, 2022. AYES: NAYS: _____________________________________ Mary D. Fasbender, Mayor _____________________________ Kelly Murtaugh, City Clerk Approved by City Attorney: ________________________________ Korine L. Land IX-01 (a-c) City Council Memorandum To: Mayor Fasbender & City Council From: Eric Maass, Economic Development Coordinator Date: May 11, 2022 Item: Resolution: Support Minnesota Job Creation Fund Application by Intek Plastics to the State of Minnesota Department of Employment and Economic Development. Council Action Requested: Adopt the attached resolution supporting an application to the State of Minnesota Department of Employment and Economic Development for funding through the Minnesota Job Creation Fund in support of an expansion at Intek Plastics located at 1000 Spiral Blvd. A simple majority is necessary for action. Background Information:– Community Development Staff conducted a business retention and expansion (BR&E) visit with Intek Plastics in June of 2021. This meeting is when Staff first learned that due to business growth that Intek was running low on building capacity and would soon need to consider expansion opportunities. At that time, Staff made Intek aware of HEDRAs land holdings within the business park including an immediately adjacent parcel and the City’s desire to collaborate with Intek in an expansion at their Hastings location. Intek Plastics is now formally considering an expansion of 60,000 square feet to its corporate real estate portfolio. The proposed project would include $6.6 million in construction and an additional $1.6 million in machinery and equipment investments. The expansion is being considered at its location in the City of Hastings as well as in a city in the State of Ohio. Due to the out of state competition, the State of Minnesota Department of Employment and Economic Development (DEED) and GreaterMSP Partnership have engaged in the site selection process in an effort to help land this business expansion for the City of Hastings and the State of Minnesota. But for the potential that the business expansion could take place outside of the State, this project would not be eligible for funding through the State of Minnesota’s Job Creation Fund (JCF). The proposed expansion project would add 46 full time employment opportunities over a period of three years. The Minnesota Job Creation Fund (JCF) is a pay for performance program that provides milestone payments during a period of up to five years based upon a company investing a minimum of $250,000 of qualifying real property improvements and hiring a minimum of 5 new qualifying full-time positions. Once those minimum thresholds are met, then annual payments are provided based on the number of new full-time jobs, associated wages and qualifying real property improvements of up to: IX-01 (a-c) • $2,000 per year per job created for jobs paying at least $28,950 in cash wages; • $3,000 per year per job for jobs paying at least $38,966 in cash wages; • $4,000 per job per year for jobs paying at least $50,098 in cash wages; • 5% rebate on qualifying real property improvements Based on information submitted by Intek Plastics, the hourly wage of newly created jobs would range from $19.56 per hour ($40,684 annually) to $48.08 per hour ($100,000 annually) plus benefits with the average hourly wage of the 46 new full time jobs coming in at $32.54 per hour ($67,683 annually) plus benefits. Financial Impact: There are no financial impacts to the City. Funding would derive from the State of Minnesota with the City serving as an intermediary between the State and Intek. Advisory Commission Discussion: N/A Attachments: • Resolution #05-__22 Supporting Job Creation Fund Application by Intek Plastics to the State of Minnesota Department of Employment and Economic Development. IX-01 (a-c) CITY OF HASTINGS DAKOTA COUNTY, MINNESOTA RESOLUTION NO. 05 - - 22 A RESOLUTION REGARDING THE SUPPORT OF A JOB CREATION FUND APPLICATION IN CONNECTION WITH INTEK PLASTICS WHEREAS, the City of Hastings, Minnesota (the “City”), desires to assist Intek Plastics, a manufacturing company which is proposing to construct a facility expansion in the City; and WHEREAS, the City of Hastings understands that Intek Plastics, through and with the support of the City, intends to submit to the Minnesota Department of Employment and Economic Development an application for an award and/or rebate from the Job Creation Fund Program; and WHEREAS, the City of Hastings held a City Council meeting on May, 16, 2022, to consider this matter; and NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HASTINGS, MINNESOTA, that, after due consideration, the Mayor and City Council of the City of Hastings, Minnesota, hereby adopts the following findings of fact related to the project proposed by Intek Plastics and its application for an award and/or rebate from the Job Creation Fund Program and express their approval. The City Council hereby finds and adopts the reasons and facts supporting the following findings of fact for the approval of the Job Creation Fund Program application: 1.Finding that the project is in the public interest because it will encourage the growth of commerce and industry, prevent, the movement of current or future operations to locations outside Minnesota, result in increased employment in Minnesota, and preserve or enhance the state and local tax base. 2.The proposed 60,000 square foot business expansion is also being considered for a location in the State of Ohio, will result in 46 new full time jobs, and increase the state and local tax base. 3.Finding that the proposed project, in the opinion of the City Council, would not reasonably expected to occur solely through private investment within the reasonably foreseeable future. 4.The project has financial hurdles associated with increased construction and equipment costs that but for public assistance, the project would not occur solely through private investment in the foreseeable future. 5.Finding that the proposed project conforms to the general plan for the development or redevelopment of the City as a whole. IX-01 (a-c) 6. The City of Hastings and the Hastings Economic Development and Redevelopment Authority have the shared goal of supporting growth of local businesses and increasing employment opportunities for area residents which the proposed development would accomplish in line with the City’s zoning designations and comprehensive plan. 7. Finding that the proposed project will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the redevelopment or development of the project by private enterprise. 8. Intek Plastics is a long standing member of the Hastings business community and a valued local employer that is committed to following through on the proposed business expansion. ADOPTED BY THE CITY COUNCIL OF HASTINGS, MINNESOTA, THIS 16TH DAY OF MAY, 2022. AYES: NAYS: _____________________________________ Mary D. Fasbender, Mayor _____________________________ Kelly Murtaugh, City Clerk IX-01 (a-c)