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<br />mentions that he has discussed locating his expansion in Hugo to be near rail <br />access. <br /> <br />It was noted Mr. McDowell is requesting a five (5) year tax abatement as an <br />incentive for Northern Forest Products to expand in Centerville. The abatement <br />would only be granted for five (5) years if there is an actual expansion. Only a <br />one (1) year abatement would be granted, if no expansion occurred. If the <br />Council is willing to grant this abatement, a new public hearing will have to be <br />held. The abatement would only be granted for the increased market valuation, <br />not for the existing valuation. <br /> <br />Sid Inman and Carolyn Drude addressed the Council. Mr. Inman presented an <br />impact analysis to show the costs of the requested abatement. Mr. Inman <br />indicated that tax increment financing requires tear down or build new which does <br />not apply to existing businesses. He stated three (3) years ago the tax abatement <br />law was changed and currently is a tool that cities may use to help existing <br />businesses expand and stay within the their communities. <br /> <br />Couiicil ~,,1cnJ.bcr 1'~clson rcfe~e::::e~ ~!-:e ~pre~dsheet that \vas pr8'.'ided to 1'Jorthe:!"!. <br /> <br />Forest Products and inquired as to ifthe letter from them was their response to the <br />City's proposal and, if so, did that mean they were unhappy with the proposal <br />from the City. She also asked if Northern Forest Products would be happy with <br />one (1) year or if they were demanding five (5). Mr. March indicated that the <br />letter was Northern Forest Products' response to the City and that they would <br />prefer the five (5) year to the one (1) year abatement. <br /> <br />Mayor Wilharber asked if the City were to provide tax abatement to Northern <br />Forest Products was the City required to notify Ramsey County and the School <br />District. Mr. March did not believe the City needed to do so, but they certainly <br />could. Mr. March indicated he does not recommend exceeding a five (5) year tax <br />abatement. <br /> <br />Carolyn Drude said Northern Forest Products was requesting five (5) years. <br /> <br />Council Member Broussard Vickers asked if the City chooses not provide a five <br />(5) year tax abatement, if the one (1) year abatement would solve the current <br />problem or is it still possible that it would end up in litigation. Mr. March stated <br />Northern Forest Products has indicated that they have shopped other communities <br />who are willing to provide tax abatement or Tax Increment Financing (TIF) and <br />will expand in another city if not granted their request. <br /> <br />Council Member Broussard Vickers questioned what would happen to the old <br />situation if the City agrees to a one (1) year abatement rather than a five (5) year <br />abatement. Mr. March indicated it would take care of the two (2) old notes and <br />that Northern Forest Products would not expand in Centerville. <br /> <br />Page 2 of 22 <br />