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ARDEN HILLS CITY COUNCIL WORK SESSION—MARCH 21, 2016 2 i Community Development Director Hutmacher stated that while construction would be substantially complete by December 31, 2018, the agreement was for a 15-year abatement (or until the maximum abatement funds are distributed). She stated that 1% inflation was factored in to the abatement projection and that if actual inflation was greater than 1% of the assessed value, the abatement would be paid in less than 15 years. Semi-annual payments would begin August 1, 2020, and conclude no later than February 1, 2035. Community Development Director Hutmacher indicated the allowable maximum of$650,000 was being requested from the City due to the expansion increase to 157,000 square feet. This amount included the 1% inflation adjustment but did not include interest. Community Development Director Hutmacher stated that within 2 years of completion of the project, Land O' Lakes would add 200 jobs that would pay a minimum wage of$18.00 per hour with a base number of employees of approximately 1,700. She also said that Land O' Lakes was eligible for state job training assistance up to $400,000 and job creation fund assistance up to $2 million and that the City had previously approved a resolution of support for the job creation fund. Community Development Director Hutmacher stated that Land O' Lakes must submit construction plans to the City for approval per the terms of the abatement agreement. Following approval, any change in plans that would reduce the building by 15% or result in an assessed value of less than $100 per square foot would require City approval. Community Development Director Hutmacher indicated that Land O' Lakes had agreed to retain its corporate headquarters in Arden Hills for the 15-year term of the abatement. However, if the company moved out of Arden Hills or if the property was sold and was less than 50% owned by Land O' Lakes, the City and County could choose to terminate assistance and request repayment of any assistance already disbursed. She also stated Land O' Lakes must submit annual reports to the City in compliance with the Business Subsidies Act until the goals are met. Mayor Grant requested clarification of the timeline for all jurisdictions. Community Development Director Hutmacher indicated the City will administer final approval on April 11, 2016, and the County and School District will consider an approval on April 12, 2016. Assuming the City approves the agreement, DEED requested a signed resolution and Minnesota Investment Fund application be provided to them on April 12, 2016. Councilmember Holden requested clarification of the draft agreement minimum wage amount of $18.00 an hour versus an amount previously referenced of$19.10 per hour. Community Development Director Hutmacher stated the information previously distributed included an error and that $18.00 per hour is accurate but that the actual hourly wage average was higher than this amount. Marcia Droege, Director of Facilities & Real Estate at Land O' Lakes, stated that of the 200 new jobs, 95% will have wages of at least $19.30 per hour. She stated that the figure of$18.00 per hour was the minimum amount required by the job creation fund.