101623 EDA Complete AgendaECONOMIC DEVELOPMENT AUTHORITY MEETING
RICHFIELD MUNICIPAL CENTER, COUNCIL CHAMBERS
OCTOBER 16, 2023
7:15 PM (IMMEDIATELY FOLLOWING THE HRA MEETING)
Call to Order
John Young Oath of Office
Open Forum
Each speaker is to keep their comment period to three minutes to allow sufficient time for others. Comments
are to be an opportunity to address the EDA. Please refer to the EDA agenda and minutes web page for
additional ways to submit comments. You may also call 612-861-9764 or email ldubois@richfieldmn.gov with
questions. Call into the open forum by dialing 1-415-655-0001 Use webinar access code: 2632 407 6388 and
password: 1234.
Appr oval of t he M inut es
Approval of the minutes of the Regular Economic Development Authority meeting of August 21, 2023.
AGENDA APPROVAL
1.Approval of the Agenda
RESOLUTIONS
2.Consider a resolution approving the Amended and Restated Business Subsidy Policy.
Staff Report No. 11
OTHER BUSINESS
3.Consider the creation of a Small Business Sewer Availability Charge Assistance Program for Richfield
businesses.
Staff Report No. 12
EDA DISCUSSION ITEMS
4.EDA Discussion Items
EXECUTIVE DIRECTOR REPORT
5.Executive Director's Report
CLAIMS
6.Claims
7.Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96
hours in advance to the City Clerk at 612-861-9739.
ECONOMIC DEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
August 21, 2023
CALL TO ORDER
The meeting was called to order by President Vrieze Daniels at 7:43 p.m. in the Council
Chambers.
EDA Members
Present:
Erin Vrieze Daniels, President; Sean Hayford Oleary; Mary Supple; and
Gordon Hanson
EDA Members
Absent:
Staff Present: Melissa Poehlman, Executive Director; Julie Urban, Assistant Community
Development Director; Dustin Leslie, City Clerk
OPEN FORUM
President Vrieze Daniels provided instructions to call in for the open forum and there were
no participants.
APPROVAL OF THE MINUTES
M/Supple, S/Gordon to approve the regular Economic Development Authority meeting
minutes of June 20, 2023.
Motion carried: 4-0
ITEM #1
APPROVAL OF THE AGENDA
Commissioner Supple asked for the budget presentation to be given after item #3. There
was consensus from the rest of the members.
M/Hayford Oleary, S/Supple to approve the agenda.
Motion carried: 4-0
EDA Meeting Minutes -2- August 21, 2023
ITEM #2
CONSIDERATION OF THE CONSENT CALENDAR
Executive Director Poehlman presented the Consent Calendar:
A. Consideration of a revised fee schedule for housing programs and loan administration.
(Staff Report No. 8)
M/Hanson, S/Hayford Oleary to approve the Consent Calendar.
Motion carried: 4-0
ITEM #3
CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM THE CONSENT
CALENDAR
None.
ITEM #4
EDA BUDGET PRESENTATION
Executive Director Poehlman gave the presentation to the Authority covering role of the
EDA, EDA staff, budget details, and funding sources.
ITEM #5
CONSIDER RESOLUTIONS APPROVING PROPOSED PROPERTY TAX LEVY
FOR PAYABLE 2024 FOR CERTIFICATION TO HENNEPIN COUNTY (STAFF
REPORT NO. 9).
M/Hayford Oleary, S/Supple to adopt the resolutions approving the 2024 Proposed
Economic Development Authority Budget and Tax Levy and the 2023 Revised Economic
Development Authority Budget.
Motion carried: 4-0
ITEM #6
CONSIDERATION OF THE APPROVAL OF CHANGES TO THE APARTMENT
REMODELING PROGRAM GUIDELINES, EXPANDING PROGRAM
ELIGIBILITY TO INCLUDE ONE TO THREE-UNIT RENTAL PROPERTIES
(STAFF REPORT NO. 10).
Assistant Community Development Director Urban gave the report.
M/Gordon, S/Supple to adopt an amendment to the Apartment Remodeling Program
guidelines expanding the program eligibility to include one to three-unit rental properties.
Commissioner Supple stated she was pleased that short-term rental would not qualify for
assistance.
Commissioner Hayford Oleary asked if the affordability requirement was a rule or just a
guideline. Assistant Community Development Director Urban stated it was just a guideline at this
time.
Motion carried: 4-0
EDA Meeting Minutes -3- August 21, 2023
ITEM #7
EDA DISCUSSION ITEMS
Commissioner Supple spoke about the proposed Velodrome project.
ITEM #8
EXECUTIVE DIRECTOR’S REPORT
No report.
ITEM #9
CLAIMS
M/Hanson, S/Supple that the following claims be approved:
U.S. BANK 8/17/2023
EDA Checks # 23323-23340 32,797.84
TOTAL $32,797.84
Motion carried: 4-0
ITEM #10
ADJOURNMENT
The meeting was adjourned by unanimous consent at 8:02 p.m.
Date Approved: October 16, 2023
Erin Vrieze Daniels
President
Dustin Leslie Melissa Poehlman
Secretary Executive Director
AGENDA SECTION:RESOLUTIONS
AGENDA ITEM #2.
STAFF REPORT NO. 11
ECONOMIC DEVELOPMENT AUTHORITY
MEETING
10/16/2023
Jan Youngquist, Economic Development ManagerREPORT PREPARED BY:
EXECUTIVE DIRE CTOR RE VIEW: Melissa Poehlman, Executive Director
10/3/2023
ITEM FOR COUNCIL CONSIDERATION:
Consider a resolution approving the Amended and Restated Business Subsidy Policy.
EXECUTIVE SUMMARY:
The Business Subsidy Act as defined in Minnesota Statutes regulates business subsidies and requires local
units of government to adopt criteria for awarding business subsidies after conducting a public hearing.
The Business Subsidy Act states that:
Business subsidies must meet a public purpose, which may include goals for job creation or retention,
or other goals such as increasing the tax base, removing blight, or catalyzing future redevelopment.
A business subsidy recipient must enter into a business subsidy agreement with the grantor. The
business subsidy agreement must include the job and wage goals and the recipient's obligation if the
goals are not met. However, after a public hearing, the wage and job goals may be set to zero if the
creation or retention of jobs is determined not to be the primary goal.
The Housing and Redevelopment Authority (HRA) and the City Council (Council) adopted the Existing
Business Subsidy Policy in 2002. The Economic Development Authority (EDA) was established in 2017 and
is also subject to the Existing Business Subsidy Policy.
Much of the financial assistance provided by the HRA and EDA is not defined as a business subsidy by the
Business Subsidy Act, such as assistance for housing development or assistance of $150,000 or less.
However, financial assistance of $25,000 or more and business loans of $75,000 or more are subject to the
Business Subsidy Act’s reporting requirements.
The State Legislature amended the Business Subsidy Act after the Existing Business Subsidy Policy was
adopted. Staff worked with legal counsel to draft the Amended and Restated Business Subsidy Policy, which
is updated to comply with the amended Business Subsidy Act. The substantive changes include:
The wage floor requirements were increased from 110 percent of the Federal minimum wage in the
Existing Business Subsidy Policy to 125 percent of the State minimum wage.
The goals outside of job creation and retention were revised to include a project that results in
redevelopment along priority commercial corridors or in the downtown area, to help meet the outcomes
of the City’s 2023-2026 Strategic Plan.
A clause was added stating that all references to the Business Subsidy Act include any and all
amendments made after the Amended and Restated Business Subsidy Policy is approved.
The Council held a public hearing on behalf of the City, HRA and EDA on September 12. One person spoke
at the public hearing; however, the comments were not specific to the Business Subsidy Policy. The Council
adopted the Amended and Restated Business Subsidy Policy on September 26.
RECOMMENDED ACTION:
By motion: Adopt a resolution approving the Amended and Restated Business Subsidy Policy.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
In 1999, the State Legislature enacted a law (the Business Subsidy Act) that regulates business
subsidies by state and local units of government and requires the government agency to adopt criteria
for awarding business subsidies after conducting a public hearing.
The HRA conducted a public hearing and adopted a Business Subsidy Policy on November 15, 1999.
The Council conducted a public hearing and adopted the Business Subsidy Policy on November 22,
1999.
In the 2000 State Legislative Session, the Business Subsidy Act was amended.
The HRA conducted a public hearing and adopted the Existing Business Subsidy Policy on May 20,
2002.
The Council conducted a public hearing and adopted the Existing Business Subsidy Policy on June 11,
2002.
The EDA was established in 2017 to promote and provide incentives for economic development in
Richfield and is subject to the Existing Business Subsidy Policy.
The State Legislature made amendments to the Business Subsidy Act after the adoption of the Existing
Business Subsidy Policy.
The Council conducted a public hearing on the Amended and Restated Business Subsidy Policy on
September 12.
A clause was added to the Amended and Restated Business Subsidy Policy stating that the business
subsidy agreement must include a requirement for the recipient to comply with labor laws. The Council
adopted the Amended and Restated Business Subsidy Policy on September 26.
B.POLICIES (resolutions, ordinances, regulations, statutes, exc):
Minnesota Statutes, Sections 116J.993 through 116J.995, (the Business Subsidy Act) regulates
business subsidies and requires state and local units of government to adopt criteria for awarding
business subsidies after conducting a public hearing.
The Business Subsidy Act states that:
Business subsidies must meet a public purpose, which may include goals for job creation or retention,
or other goals such as increasing the tax base, removal or blight, or catalyzing future redevelopment.
Some financial assistance is not considered a business subsidy, including assistance for housing,
contamination cleanup, and certain redevelopment projects, as well as financial assistance of $150,000
or less.
A business subsidy recipient must enter into a business subsidy agreement with the grantor. The
business subsidy agreement must include job and wage goals and the recipient's obligation if the goals
are not met. After a public hearing, if the creation or retention of jobs is determined not to be a goal, the
wage and job goals may be set to zero.
Public hearings must be conducted for business subsidies that exceed $150,000.
The business subsidy recipient and the City are required to submit annual reports to the Minnesota
Department of Employment and Economic Development (DEED) regarding the business subsidy.
Reporting to DEED is also required for financial assistance of $25,000 or more and business loans of
$75,000 or more.
C. CRITICAL TIMING ISSUES:
The EDA is currently subject to the Existing Business Subsidy Policy. The Council conducted a public
hearing on September 12 and adopted the Amended and Restated Business Subsidy Policy on
September 26. The public hearing was also conducted on behalf of the EDA, which allows the EDA to
consider adopting the Amended and Restated Business Subsidy Policy and be consistent with the
Council's action.
D. FINANCIAL IMPACT:
None.
E. LEGAL CONSIDERATION:
Legal counsel drafted the Amended and Restated Business Subsidy Policy to comply with Minnesota
Statutes, Sections 116J.993 through 116J.995.
A public hearing must be conducted prior to adopting criteria for awarding business subsidies.
Notice that the Council would hold a public hearing was published in the Richfield Sun Current on
August 31, 2023.
The Council conducted a public hearing on behalf of the City, HRA, and EDA on September 12, 2023.
ALTERNATIVE RECOMMENDATION(S):
None.
PRINCIPAL PARTIES EXPECTED AT MEETING:
N/A
ATTACHMENTS:
Description Type
Resolution Resolution Letter
Amended and Restated Business Subsidy Policy Backup Material
Existing Business Subsidy Policy 2002 Backup Material
RICHFIELD ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. ______
RESOLUTION APPROVING AMENDED AND RESTATED BUSINESS SUBSIDY POLICY
BE IT RESOLVED by the Board of Commissioners (the “Board”) of the Richfield Economic
Development Authority (the “Authority”) as follows:
Section 1. Recitals.
1.01. The Authority was created pursuant to Minnesota Statutes, Sections 469.090
through 469.1082, as amended, and was authorized to transact business and exercise its
powers by a resolution of the City Council of the City of Richfield, Minnesota (the “City”).
1.02. Before awarding any “business subsidy” as defined in Minnesota Statutes,
Sections 116J.993 to 116J.995, as amended (the “Business Subsidy Act”), the Authority is required
to adopt criteria regarding such subsidies after holding a public hearing.
1.03. The staff of the City, the Authority, and the Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota (the “HRA”) have reviewed the existing business subsidy
policy and have amended and restated the Business Subsidy Policy.
1.04. The Board has reviewed the Amended and Restated Business Subsidy Policy on
file at the Municipal Center. On September 12, 2023, the City Council, on behalf of the City, the
Authority, and the Housing and Redevelopment Authority, held a duly noticed public hearing, at
which all interested persons were given an opportunity to be heard.
Section 2. Business Subsidy Policy Approved.
2.01. The Board approves the Amended and Restated Business Subsidy Policy on file at
the Municipal Center, which criteria supersede any prior business subsidy policy or criteria adopted
by the Authority.
2.02. Authority staff is authorized to transmit a copy of the Amended and Restated
Business Subsidy Policy to the Minnesota Department of Employment and Economic Development
in accordance with the Business Subsidy Act.
Adopted by the Board of Commissioners of the Richfield Economic Development
Authority this 16ᵗʰ day of October, 2023.
Erin Vrieze Daniels, President
_________________________________
ATTEST:
Melissa Poehlman, Executive Director
________________________________
1
ECONOMIC DEVELOPMENT AUTHORITY OF RICHFIELD, MINNESOTA;
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA;
AND CITY OF RICHFIELD, MINNESOTA
AMENDED AND RESTATED BUSINESS SUBSIDY POLICY
I.Purpose
This document sets forth the business subsidy policies and specific criteria to be considered by
the Richfield Economic Development Authority, the Housing and Redevelopment Authority and
the City of Richfield, in evaluating requests for Business Subsidies, including Tax Increment
Financing, Tax Abatement, or other financial assistance programs that may become available
through the Grantor.
In adopting these criteria, it is the intent of the Grantor to comply with Minnesota Statutes,
Sections 116J.993 through 116J.995, as amended. The governing bodies of each Grantor have
adopted this policy and these criteria after a duly noticed public hearing held in accordance with
the Business Subsidy Act.
II.Definitions
“Benefit Date" means the date that the recipient receives the Business Subsidy. If the Business
Subsidy involves the purchase, lease, or donation of physical equipment, then the benefit date
begins when the recipient puts the equipment into service. If the Business Subsidy is for
improvements to property, then the benefit date refers to the earliest date of either:
a) When the improvements are finished for the entire project; or
b) When a business occupies the property. If a business occupies the property and the
subsidy Grantor expects that other businesses will also occupy the same property, the
Grantor may assign a separate benefit date for each business when it first occupies the
property.
“Business Subsidy” means a City, HRA, or EDA grant, contribution of personal property, real
property, infrastructure, the principal amount of a loan at rates below those commercially
available to the recipient, any reduction or deferral of any tax or any fee, any guarantee of any
payment under any loan, lease, or other obligation, or any preferential use of government
facilities given to a business. Certain forms of financial assistance set forth in Section 116J.993,
subd. 3 of the Business Subsidy Act are not considered a Business Subsidy.
“Business Subsidy Act” means Minnesota Statutes Section 116J.993 to 116J.995, as hereafter
amended.
2
“Business Subsidy Agreement” means an agreement between a Grantor and a Recipient that
meets the requirements of Section 116J.994, subd. 3 of the Business Subsidy Act. The Business
Subsidy Agreement may be incorporated into a broader Development Agreement for a project.
“Business Subsidy Report” means the annual report submitted each year by a business
receiving a Business Subsidy. The report is submitted by the local government unit in order to
comply with Section 116J.994 Subd. 7 (b) of the Business Subsidy Act. Both the Recipient and
the Grantor must comply with the business subsidy reporting and monitoring requirements of the
Business Subsidy Act.
“City” means the City of Richfield, Minnesota.
“Criteria” means the standards upon which the Grantor will evaluate requests for a Business
Subsidy to a private business or development project in the City of Richfield. Meeting the
Criteria does not mean that a project will automatically be approved, nor does it create any
contractual rights on the part of any applicant.
“EDA” means the Economic Development Authority of Richfield, Minnesota.
“Grantor” means the City, the HRA or the EDA, as defined herein.
“HRA” means the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota.
“Public Purpose” A Business Subsidy must meet a public purpose which may include, but may
not be limited to, increasing the tax base. Job retention may only be used as a public purpose in
cases where job loss is specific and demonstrable.
“Recipient” means any for-profit or nonprofit business entity meeting the requirements of
Section 116J.993, subd. 6 of the Business Subsidy Act that receives a Business Subsidy.
III.Business Subsidy Criteria
The following criteria shall be used to evaluate a request for a Business Subsidy, although
meeting these criteria does not create a contractual right to a Business Subsidy, and the Grantor
may later modify these criteria, as permitted by the Business Subsidy Act.
An applicant who is not in good standing with the City regarding licenses, code violations, or
delinquent taxes, bills, fines or other charges will not be considered for a Business Subsidy.
1.Public Purpose. Every Business Subsidy must meet a public purpose, which may
include, but may not be limited to, increasing the tax base.
a.Job and Wage Goals. Unless job creation or retention is not a public purpose of
the Business Subsidy, every Recipient must create or retain jobs, and these jobs
must pay at least 125 percent of the existing state minimum wage per hour,
3
exclusive of benefits. Retained jobs may be included in job goals only if job loss
is specific and demonstrable. Wage and jobs goals will be set forth in the
Business Subsidy Agreement and must be met by the Recipient within two (2)
years of the Benefit Date.
b.Goals Other Than Job Creation or Retention. If, after a public hearing, it is
determined by the governing bodies of the Grantor that creation or retention of
jobs is not a goal, the wages and jobs required of a Recipient may be set to zero;
however, the Recipient must achieve at least one of the following measurable,
specific, and tangible goals:
i.The project enhances the viability of other businesses in the City;
ii.The project provides a service or meets a consumer need not currently or
adequately met in the City;
iii.The project results in revitalization and redevelopment in the downtown
area or along priority commercial corridors as identified in adopted City
policies and plans;
iv.The project removes blighted or substandard property;
v.The project stimulates additional capital investment and acts as a catalyst
for future development and redevelopment;
vi.The project prevents the closure of an essential business in the City;
vii.The project promotes the retention or adaptive reuse of buildings of
historical or architectural significance;
viii.The project results in improvements to public infrastructure or public
facilities, including, without limitation; roads, pedestrian and bike
infrastructure, transit, parks, and recreational facilities; or
ix.The project includes necessary environmental clean-up of the site for
development or redevelopment.
The Grantor may deviate from these goal criteria in granting Business Subsidies if
the reasons for the deviation are documented in writing and reported to the
Minnesota Department of Employment and Economic Development, pursuant to
the Business Subsidy Act.
2.Increase in Tax Base. While the Business Subsidy Act provides that an increase in the
tax base cannot be the sole grounds for granting a Business Subsidy, the Grantor gives a
strong preference to proposed Business Subsidies that increase the tax base.
4
3.Zoning. Any project benefited by a Business Subsidy must be consistent with the City’s
Comprehensive Plan and Zoning Ordinance. If required changes to the Comprehensive
Plan and Zoning Ordinance are under active consideration by the City, the Grantor may
conditionally approve a request for a Business Subsidy.
4.Require Business Subsidy to Proceed. Business Subsidies will only be provided to
Recipients who would not be able to proceed with the stated project without the benefit
of the Business Subsidy. Business Subsidies will not be issued to Recipients for the
purpose of increasing Recipient’s profit margin.
5.Continued Operations. Recipients must commit to continue operations of the business
in the City for at least five (5) years following the Benefit Date of the Business Subsidy.
IV.Process for Awarding Business Subsidies
The Business Subsidy applicant will enter into negotiations with the Grantor and may enter into
a proposed Business Subsidy Agreement to be drafted by the Grantor and its consultants. All
applicants will be responsible for legal, financial, consultant and other costs associated with the
review of the application and development of the Business Subsidy Agreement.
Prior to approval of a Business Subsidy, the Business Subsidy applicant shall provide any
required market and financial feasibility studies, appraisals, soil boring analysis, information
provided to private lenders, credit reviews, and other information or data that the Grantor or its
consultants may require in order to proceed with the Business Subsidy application process. The
Grantor may undertake such a review on its own accord, to be paid from the fee paid by the
Business Subsidy applicant. A Business Subsidy applicant should be able to demonstrate past
successful general development capability as well as specific capability in the type and size of
development proposed.
Before the Grantor signs a Business Subsidy Agreement with a proposed Recipient, the Grantor
must check with the compilation and summary report compiled by the Department of
Employment and Economic Development to determine if the proposed Recipient is eligible to
receive a Business Subsidy.
1.Business Subsidy Agreement. The Recipient must enter into a Business Subsidy
Agreement with the Grantor. The Business Subsidy Agreement must include:
a.A description of the Business Subsidy, including amount and type, and type of
district if the Business Subsidy is Tax Increment Financing;
b.The public purpose(s) for the Business Subsidy;
c.Any measurable, specific, and tangible goals related to the Business Subsidy and
the financial obligation of the Recipient if said goals are not met;
d.A statement of why the Business Subsidy is needed for the project;
5
e.A commitment from the Recipient to continue operations in the City for at least
five (5) years following the Benefit Date;
f.The name and address of any parent corporation of the Recipient; and
g.A list of all Business Subsidies received for the project.
h.A requirement for the Recipient to comply with labor laws.
2.Public Hearing. A publicly noticed public hearing is required for Business Subsidies in
amounts over $150,000, unless otherwise required by law.
3.Governing Body Approval. A Business Subsidy of $150,000 or less, must be approved
by the governing body of the Grantor. For a Business Subsidy of $150,000 or more, the
governing body of the Grantor and the City Council must approve the Business Subsidy.
V.Compliance
1.Reporting. Both the Recipient and the Grantor must comply with the reporting and
monitoring requirements of the Business Subsidy Act. Each Recipient must provide a
report to the Grantor each March 1. The Grantor will provide the report to the
Department of Employment and Economic Development on or before April 1.
2.Failure to Meet Set Goals. If a Recipient fails to meet the wage and job goals as set
forth in the Business Subsidy Agreement within two (2) years of the Benefit Date, the
Business Subsidy assistance plus interest must be paid back to the Grantor, provided that
repayment may be prorated to reflect partial fulfillment of the goals. Interest to be repaid
must be set at no less than the implicit price deflator for government consumption
expenditures and gross investment for state and local governments prepared by the
Bureau of Economic Analysis of the United States Department of Commerce for the
twelve-month period ending March 31 of the previous year.
a.The Grantor may, after a public hearing, extend the time for compliance with
Business Subsidy job and wage goals by up to one (1) year. The Grantor may
extend the period of time for meeting other goals specified in the Business
Subsidy Agreement by documenting in writing the reason for the extension and
attaching a copy of the document to its next annual report to the Department of
Employment and Economic Development.
b.A Recipient that fails to meet the terms of a Business Subsidy Agreement may not
receive a Business Subsidy from any grantor for a period of five (5) year s from
the date of failure or until the Recipient satisfies its repayment obligation under
the Business Subsidy Agreement, whichever occurs first.
VI.FINANCIAL ASSISTANCE NOT CONSIDERED A BUSINESS SUBSIDY
6
Section 116J.993, subd. 3 of the Business Subsidy Act provides that the following forms of
assistance are not a Business Subsidy within the meaning of the Business Subsidy Act:
1.A business subsidy of less than $150,000.
2.Assistance that is generally available to all businesses or to a general class of similar
businesses, such as a line of business, size, location, or similar general criteria.
3.Public improvements to buildings or lands owned by the state or local government that
serve a public purpose and do not principally benefit a single business or defined group
of businesses at the time the improvements are made.
4.Redevelopment property polluted by contaminants as defined in Minnesota Statutes
Section 116J.552, subdivision 3.
5.Assistance provided for the sole purpose of renovating old or decaying building stock or
bringing it up to code and assistance provided for designated historic preservation
districts, provided that the assistance is equal to or less than 50 percent of the total cost.
6.Assistance to provide job readiness and training services if the sole purpose of the
assistance is to provide those services.
7.Assistance for housing.
8.Assistance for pollution control or abatement, including assistance for a tax increment
financing hazardous substance sub-district as defined under Minnesota Statutes Section
469.174, subdivision 23;
9.Assistance for energy conservation.
10.Tax reductions resulting from conformity with federal tax law.
11.Workers' compensation and unemployment insurance.
12.Benefits derived from regulation.
13.Indirect benefits derived from assistance to educational institutions.
14.Funds from bonds allocated under Minnesota Statutes Chapter 474A, bonds issued to
refund outstanding bonds, and bonds issued for the benefit of an organization described
in section 501(c)(3) of the Internal Revenue Code of 1986, as amended through
December 31, 1999.
15.Assistance for a collaboration between a Minnesota higher education institution and a
business.
16.Assistance for a tax increment financing soils condition district as defined under
Minnesota Statutes Section 469.174, subdivision 19.
17.Redevelopment when the recipient's investment in the purchase of the site and in site
preparation is 70 percent or more of the assessor's current years estimated market value.
18.General changes in tax increment financing law and other general tax law changes of a
principally technical nature.
19.Federal assistance until the assistance has been repaid to, and reinvested by, the state or
local government agency.
20.Funds from dock and wharf bonds issued by a seaway port authority.
21.Business loans and loan guarantees of $150,000 or less.
22.Federal loan funds provided through the United States Department of Commerce,
Economic Development Administration.
23.Property tax abatements granted under Minnesota Statutes Section 469.1813 to property
that is subject to valuation under Minnesota Rules, Chapter 8100.
7
However, Minn. Stat. Section 116J.994 states that notwithstanding Minn. Stat. Section 116J.993,
subd. 3, clauses (1) and (21), Business Subsidies as defined under Minn. Stat. Section 116J.993
include the following forms of financial assistance: a business subsidy of $25,000 or more; and
business loans and guarantees of $75,000 or more. The Grantor is required to provide reporting
for these types of subsidies pursuant to Minn. Stat. Section 116J.994, subd. 7(c).
Requests for subsidies exempt from the Business Subsidy Act are still su bject to review
and approval of the Grantor. Such approval is at the sole discretion of the Grantor.
VII.AMENDMENTS TO BUSINESS SUBSIDY ACT
The references to the Business Subsidy Act in this Business Subsidy Policy shall include any and
all amendments to the Business Subsidy Act that are made after this policy is adopted.
Adopted by the Board of Commissioners of the Housing and Redevelopment Authority in and
for the City of Richfield, Minnesota, this _____ day of ______________, 2023.
Adopted by the Board of Commissioners of the Richfield Economic Development Authority of
Richfield, Minnesota, this _____ day of ______________, 2023.
Adopted by the City Council of the City of Richfield, Minnesota, this ____ day of
_____________, 2023.
Housing and Redevelopment AUTHORITY
Business Subsidy Criteria
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Authority
that
is
consistent
with
statutoryrequirements, andwhich
contains
measurable,
specificandtangible
goals.
The
Agreement
shall
include
acommitmentto
continue
in
operation
within
the
City
for
a
minimum
of
five
years
afterthe
benefit
date,
unless
waivedbytheAuthorityand
shall
comply
with
thespecificjob
and
wage
goals
established
for
theproject,
if
any.
x ~_
IV. Business Subsidy Criteria
4.01 The Authority recognizes that every proposal is unique. Nothing in these criteria shall
be deemed to be an entitlement
orshall thesecriteriaestablish
acontractual righttoa
subsidy.
The
Authority
reserves
the
modifythese criteria
fromtimeto
timeand
to evaluate eachprojectas
awhole.4.02 A
business
subsidy
must
a
Thefollowingcriteria
shallbeutilized
inevaluating
arequestforabusiness
subsidy:a. Increaseintax
base.
While
an
in
basecannotbe
thesole
groundsforgranting
asubsidy,
theAuthoritybelieves
it
is
apreferredcondition
forany
subsidy.
b.
Jobs.
It
is
theAuthority'
s
intentthat
the
grantee
maximize
thenumber
ofjobsat
thesite.
This
may
include
jobs
to
beretained
but
only
if
job loss
is
specificand
demonstrable.
c.
Wage
Floor. The
jobscreatedas
aresult
of
any
business
subsidyapproved
bytheAuthority
shallwages
at
an
hourly
thanofminimum
wage
full-
time
part-timeAnydeviation
thefloor
must
documented
in
with
theset
forththe
Act.
provisions
regarding
floor doapplyinstancethe
Authority,
a
hearing,
thator
retention
is
not
the
publicpurposeofthesubsidy.
4.
03EconomicDevelopment. In
additionalto
thecriteriainSection4.
02,
projects
should
promoteoneormoreofthefollowing:
1. Encourage
commercial diversitywithinthecommunity;Contributeto
the
establishmentofcriticalmassofcommercialdevelopment
within
anarea;Providebasicandservices,
increase
therange
of
goodsandservicesavailableor
encourage
fast-growing orhightechnology
business
locationorexpansion;4. Promoteobjectivesand
removal
ofblight,
including
pollutioncleanup;
5.
Promotethe
adaptive
significance;
Promoteadditional
or
spin-offdevelopment
within
the community; or
7. Encourage
fullutilization
of
existingor
plannedinfrastructure
improvements.Compliance andAnysubsidy
the
Authority willbe
totherequirementof
ahearing, if
necessary,
and
must
be
approved bytheAuthority.5.02Itwill
benecessary
for both
the
grantee
andthe
Authority
to
comply
with
the
reportingand
monitoring
requirements
of
the
Act.
AGENDA SECTION: OTHER BUSINESS
AGENDA ITEM # 3.
STAFF REPORT NO. 12
ECONOMIC DEVELOPMENT AUTHORITY
MEETING
10/16/2023
Jan Youngquist, Economic Development ManagerREPORT PREPARED BY:
EXECUTIVE DIRECTOR REVIEW: Melissa Poehlman, Executive Director
10/9/2023
ITEM FOR COUNCIL CONSIDERATION:
Consider the creation of a Small Business Sewer Availability Charge Assistance Program for Richfield
businesses.
EXECUTIVE SUMMARY:
In 2022, the Economic Development Authority (EDA) contracted with John Stark of Enduring Cities
to evaluate the previous and existing business assistance programs offered by the EDA and make
recommendations for programs moving forward. Mr. Stark's work resulted in the Business
Assistance Analysis and Recommendations Report (Report), which was accepted by the EDA in
April 2023.
One of the desired outcomes for business assistance identified in the Report is to:
“Provide small and emerging businesses with a source of technical assistance (and possibly fee relief)
to help them launch and grow.”
Technical assistance: Staff shares information with small and emerging businesses about the Elevate
Hennepin program that is sponsored by Hennepin County with financial support from the EDA. Elevate
Hennepin has more than 30 expert advisors who provide free technical assistance for businesses. In the 2nd
quarter of 2023, 12 Richfield businesses received a total of 124 hours of free services through Elevate
Hennepin. Since its inception in late 2020, Elevate Hennepin has served 54 businesses in Richfield with 470
hours of technical assistance.
Fee relief: Staff is proposing that the EDA establish a Small Business Sewer Availability Charge Assistance
Program (Program) to assist new or expanding small businesses with fees associated with connecting to the
regional sewer system.
The Metropolitan Council assesses a Sewer Availability Charge (SAC) when a property connects to the
regional sewer system for the first time. The SAC fee is based on the amount of wastewater flow
generated by activities on the site, such as food preparation, dishwashing, and restroom use. This fee
contributes to the construction and maintenance of the regional sewer system and sanitary sewage
treatment facilities. The Metropolitan Council may also charge SAC when a business grows or changes
the use of its space, which may create more demand on the sewer system.
The one-time SAC fee is collected by the City and paid to the Metropolitan Council when a building
permit is issued. Businesses contact the Metropolitan Council for a SAC determination letter, which
includes a calculation of the number of SAC units due. Businesses are required to submit their SAC
determination letter to the City when applying for a building permit.
Currently, the Metropolitan Council's fee for one SAC unit is $2,485. It is not uncommon for a
business to be assessed multiple SAC units when there is a change in the use of a building
resulting in more wastewater being generated, like a retail building converting to a restaurant. Two
small restaurants that recently opened in Richfield were each assessed 8 SAC units, which
resulted in fees of $19,880 for each business owner. These fees can create a financial hurdle for
new and expanding businesses.
Under the proposed Program, an eligible business may qualify to receive financial assistance for up to 50
percent of the SAC fees assessed by the Metropolitan Council, with a maximum of 4 SAC units paid by the
EDA. Eligible businesses must be located in Richfield, be independently owned, have 25 or fewer full-time
equivalent (FTE) employees, and have a SAC determination letter from the Metropolitan Council with an
assessment for at least 2 SAC units.
Funds through the Program would be awarded to qualifying applicants on a first-come, first-serve basis.
Approvals would be granted by the EDA Executive Director and processed by the City's Permits and
Inspection Division for payment and reporting to the Metropolitan Council. A business owner whose
application was denied by the EDA Executive Director may appeal the decision to the EDA.
Staff is proposing to budget $20,000 annually for the Program, which is anticipated to provide financial
assistance for 8 SAC units.
RECOMMENDED ACTION:
By motion: Approve the Small Business Sewer Availability Charge Assistance Program and the use of
$20,000 of Economic Development Authority funds for its implementation.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
The EDA was formed in 2017 to promote and to provide incentives for economic development in
Richfield.
In 2022, the EDA contracted with John Stark of Enduring Cities to evaluate Richfield's business
assistance services.
The EDA and Hennepin County entered into an agreement to cooperate in the implementation
and promotion of the Elevate Hennepin program on March 22, 2023. The agreement is in effect
until December 31, 2024.
At its meeting on April 17, 2023, the EDA accepted the Richfield Business Assistance Analysis
and Recommendations Report prepared by Enduring Cities.
The EDA's revised 2023 budget includes $30,000 for business assistance and $5,000 for Elevate
Hennepin.
The EDA's 2024 budget includes $60,000 for business assistance and $5,000 for Elevate
Hennepin.
B.POLICIES (resolutions, ordinances, regulations, statutes, etc):
Minnesota Statutes 469.090 through 469.1082, the enabling legislation for economic development
authorities, allows an EDA to create business assistance programs.
C.CRITICAL TIMING ISSUES:
N/A.
D.FINANCIAL IMPACT:
Staff recommends that the EDA set aside $20,000 for the Program in both 2023 and 2024. The
EDA budget for business assistance includes $30,000 in 2023 and $60,000 in 2024.
The EDA and Hennepin County have a signed agreement to cooperate on the implementation and
promotion of the Elevate Hennepin program, which includes an EDA contribution of $5,000 in
both 2023 and 2024.
E.L E GAL C ON S ID E R AT ION:
Legal counsel reviewed and signed off on the Program guidelines.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Approve a modified version of the Small Business Sewer Availability Charge Assistance Program.
Do not approve.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
N/A.
AT TAC H ME N T S:
D escription Type
Richfield S mall B usiness S A C A ssistance P rogram B ackup Material
Metropolitan C ouncil S A C Information B ackup Material
E levate Hennepin Richfield S napshot B ackup Material
1
Richfield Economic Development Authority
Small Business Sewer Availability Charge (SAC)
Assistance Program
I.Purpose:
This program aims to reduce the barriers to starting or expanding a small business in Richfield
by providing financial assistance to help offset the costs of Sewer Availability Charge (SAC)
units for eligible businesses.
II.Background:
The Metropolitan Council’s Environmental Services division (MCES) provides sanitary
sewer treatment for wastewater generated from properties in the Twin Cities
metropolitan area. A Sewer Availability Charge (SAC) is collected from each property
based on the amount of wastewater that it is anticipated to generate. This fe e
contributes to the construction and maintenance of the regional sewer system and
sanitary sewage treatment facilities.
The one-time SAC fee is collected by the City of Richfield and paid to the Metropolitan
Council when a building permit is issued for either a new building or a remodel, or when
a connection permit is issued for an existing building connecting to the sanitary sewer
system for the first time. One SAC unit equals 274 gallons of maximum potential daily
wastewater flow. In 2023, the Metropolitan Council’s fee for one SAC unit is $2,485. It is
not uncommon for a business to be assessed multiple SAC units.
SAC fees can create a financial hurdle for new or expanding businesses. While the fee is
typically collected up front, the business will use the local and regional sewer systems
over time. If the business is not successful, the fees are not returned to the business ;
SAC credits remain with the property for future use.
III.Definitions:
City: the City of Richfield.
EDA: Richfield Economic Development Authority.
Eligible Business: a business that meets the eligibility criteria outlined in Section IV.
Sewer Availability Charge (SAC): a one-time fee that is paid to the Metropolitan Council
when a residence or business connects to the regional wastewater (sewer) system for the
first time. The Metropolitan Council may also assess SAC when a business grows or changes
the use of its space, which may create more potential demand on the wastewater system.
2
SAC Determination: calculation made by the Metropolitan Council of the amount of
maximum potential wastewater capacity needed for the site created by the activities at
the location (such as food preparation, dishwashing, floor cleaning, manufacturing,
restroom use, etc.).
SAC Unit: one SAC unit equals 274 gallons of maximum potential daily wastewater flow
capacity. Commercial buildings pay a SAC fee based on the estimated maximum
potential demand on the wastewater system.
IV.Program Guidelines:
An eligible business may qualify to receive financial assistance for up to 50 percent of the SAC
fees assessed by the Metropolitan Council, with a maximum of 4 SAC units paid by the EDA.
Example:
Scenario
SAC units
assessed by the
Metropolitan
Council
SAC units paid by
the EDA
*EDA Financial Assistance
(based on the 2023 rate of
$2,485 per SAC unit)
1 3 1.5 $3,727.50
2 6 3 $7,455.00
3 10 4 $9,940.00
*Actual financial assistance will be calculated based on the SAC rate that is in effect at
the time of the award.
Eligibility:
To be considered for the program, the business must:
Be located within the City of Richfield.
Be an independently owned business. Independently owned businesses are defined as
businesses that have no corporate headquarters and do not include franchises of chain
brands.
Have 25 or fewer full-time equivalent (FTE) employees.
Have a current SAC determination letter from the Metropolitan Council that includes
an assessment for at least 2 SAC units.
The EDA encourages all eligible Richfield small businesses to apply for assistance under the
program, especially:
Women owned businesses.
Black, Indigenous or Person of Color (BIPOC) owned businesses.
Businesses owned by Richfield residents.
3
Ineligibility:
The following are ineligible for the program:
Residential projects.
Home occupations.
Businesses located on sites with delinquent property taxes, regardless of whether the
business owns the property.
Businesses that are not in good standing with the Minnesota Secretary of State.
Businesses or properties that are in violation of the Richfield City Code, or have
delinquent bills, fines, or other charges due to the City.
Sexually oriented businesses, pawn shops, tobacco or marijuana shops, gun shops, or
check cashing businesses.
V.Terms and Conditions:
1.Funds for this program are limited and shall be awarded to qualifying applicants on a
first-come, first-serve basis.
2.Business owners may only apply once per year for financial assistance through the
program.
3.The EDA may consider granting the funds for SAC assistance on a case-by-case basis. At
any time, the EDA may discontinue the option to provide any assistance for these fees
and approval is contingent upon funding.
4.Approvals are granted by the EDA Executive Director and processed by the City’s
Permits and Inspections Division for payment and reporting purposes. An application
that was denied by the EDA Executive Director may be appealed by the business
owner to the EDA.
5.The EDA reserves the right to determine and limit the amount of SAC assistance that is
granted to any one applicant, allowing for the maximum utilization and benefit of the
program. Nothing herein shall imply or suggest that the EDA is under any obligation to
provide incentives to any business owner or property owner.
VI.Data Privacy:
The EDA is subject to Minnesota Statutes Chapter 13 (the “Minnesota Government Data
Practices Act”). Under the Minnesota Government Data Practices Act, the names and
addresses of applicants for or recipients of assistance under this program and the amount
of assistance received under this program are public data.
What is SAC?
SAC is an easier way to say Sewer Availability Charge.
The Metropolitan Council charges this one-time fee when a residence or
business connects to the regional wastewater (sewer) system for the first time.
The Council may also charge SAC when a business grows or changes the use
of its space, which may create more potential demand on the system.
The Council charges SAC to local governments, who pass it on to business or
property owners. Some local governments also charge an additional fee. extra capacityYou will pay any SAC owed to your local government.
Why do I have to pay SAC?
Wastewater pipes and treatment plants are expensive. We borrow money to
build them large enough to serve current AND future customers. SAC helps
pay off the debt. KNOW?Did How does the Council determine the SAC I will pay?
SAC is charged in units.
One single-family home = 1 SAC unit = $2,485 (2023)
Non-residential properties require a “determination” (calculation) of the
amount of maximum potential wastewater capacity needed for the site.
Depending on your business, you could pay more than one SAC unit. For
example, a restaurant will pay 1 SAC for every 300 gross square feet.
SAC is determined based on the maximum potential wastewater flow
created by the activities at the location (food preparation, dishwashing, floor
cleaning, manufacturing, restroom use, etc.)
Let’s say you buy or open a business that is similar in kind and size to what
existed in the same space before. If SAC was paid, you may not be
charged additional SAC. Before signing a lease, contact the Council to see
if there are SAC credits on the site and how to submit for a determination.
Visit metrocouncil.org/SACmanual for guidance on how much
SAC you might pay.you
Go to local government
for permit/license.
Visit metrocouncil.org/SACforms
to get SAC application
and other forms.
Complete application materials
and submit to
SACprogram@metc.state.mn.us
.
PERMIT
/License
Pay any SAC owed to
local government.
Local government will then
issue permit/license, report
1. 2. 3.
4. 5. 6.
Metropolitan Council or local
government calculates
SAC
Application
Determinatio
n
SA C
the amount of SAC owed. SAC determination and pay
Local government may add local fees to the SAC. SAC to Metropolitan Council.
How do I submit for a SAC determination?
Metropolitan Council staff will contact you within one business day after receiving your
application materials to confirm whether the materials are complete or not. The Council can
usually complete a determination in two to three weeks once it receives all the necessary
forms and documents. You pay any SAC owed to your local government, usually as part of a
permit or business license.
Are payment options available?
If you cannot afford to pay your SAC fee to your local government:
• You may be able to get a small business loan to spread out the cost of
SAC and other local government fees. Check with your local bank or
lending agent.
• Your local government may also be able to delay a portion of your SAC fee.
Ask your local government if they participate in the SAC Deferral Program.
Questions?
Email SACprogram@metc.state.mn.us or call 651-602-1770 to
speak with a SAC representative.
Elevate Hennepin snapshot (Q2 2023)
54
12
Hours of
assistance
Businesses
receiving
service
124
470
2023
Q2
2020 Q4-2023 Q2
Richfield
54%
46%
Male
Female
n = 13 / 2 didn’t provide
83%
8%
8%Latino
White
Black
n = 12 / 3 didn’t provide
Characteristics of Participants
2023 Year to Date