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HomeMy WebLinkAbout01-2 Resolution No. 01-2 RESOLUTION ADOPTING AMENDED ECONOMIC DEVELOPMENT GUIDELINES BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that it hereby adopts amended Economic Development Guidelines dated January 2 , 2001 for the review and evaluation of development proposals, a copy of which is attached. s/ Ed Schock Ed Schock, Mayor Presented: January 10 , 2001 Adopted: January 10 , 2001 Omnibus Vote : Yeas 4 Nays 0 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk January 2, 2001 CITY OF ELGIN ECONOMIC DEVELOPMENT GUIDELINES Introduction The use of tax relief measures, cash, grants, rent assistance, in- kind contributions and other forms of assistance, collectively referred to as " incentives" , is a practice used by state, regional and local governments for the purpose of attracting businesses to their area and to assist existing businesses to expand. The goals of incentives are to achieve desired public benefits while meeting the legitimate cost concerns of companies in locating or expanding in a specific location. Once the decision has been made to utilize incentives in the economic development process, elected officials should have policy and evaluation methodology at their disposal in order to make logical responses on incentive requests . Principles The process of utilizing incentives should involve the inclusion of certain public subsidy principles in order to achieve economic development goals . Considerations should include the following: 1 . If not for granting an incentive, a desirable project would not move forward. Only those projects that require financial assistance shall be funded. 2 . A decision to fund an incentive request must be based on sound financial information. All firms requesting incentives shall provide the following information: A. Level of developer investment . B. Detailed development pro forma. C. Level of incentive requested to fill funding gap or the amount of assistance required to achieve a competitive advantage. D. Verification of developer' s financial stability (three- five years of audited annual financial reports) . 1 3 . Detailed analysis of the economic costs and benefits to the City for the project . The analysis shall be performed by the City according to a format approved by the City, with data provided by the developer. 4 . A Development Fund shall be established in order to finance incentive requests . Once the budgeted dollars in the Fund are depleted, no additional requests shall be considered unless authorized by the City Council . 5 . Upon the receipt of a complete application package, all requests for incentives shall be analyzed by the staff Development Review Team within 21 days, followed by a specific recommendations to the Mayor and City Council . 6. Certain areas within the City have priority relative to receipt of incentive dollars . For calendar year 2001, the priority areas are as follows : A. Center City. B. Cook County. C. School District U-46 service area. Policies The following policies should be applied when development incentive requests are considered within the City of Elgin: 1 . The City will not consider any requests for waiver of the following fees or charges : construction permit fees, utility rates, development impact fees, recapture fees, and other fees as prohibited by City ordinances . 2 . Incentives relating to local share property tax rebate and sales tax rebate shall only be considered in such instances where established incentive programs provide for such relief. (Center City Enterprise Zone benefits and Cook County Auto Dealership Program. ) 3 . Incentives related to rental assistance shall be limited to Elgin' s Center City. Such assistance may be made available to new or expanding retail, commercial or industrial businesses that are identified as needed and desirable within the Riverfront/Center City Master Plan, adopted May 24, 2000 . 4 . The City limits its participation in incentive funding to significant residential adaptive reuse projects and industrial/commercial projects . 2 5 . Any incentive package shall be contained within a development agreement . 6. All incentives shall be performance-based with established performance criteria. 7 . If performance goals are not met, all or a portion of the incentive funding shall be required to be returned to the City. Evaluation Criteria All development proposals or requests for assistance shall be submitted in a format that addresses the above-mentioned Principles and Policies . In addition, each submittal shall be evaluated based upon the following criteria: 1 . The potential for receiving economic development incentives is available to private businesses based upon the following criteria: A. Location of development. B. Types and number of jobs created. C. Tax benefit to the City. 2 . The development must be something that is of a public benefit to the City. 3 . The impact of a proposed development on existing businesses shall be evaluated when considering the use of incentives for the new development . 4 . The assisted business must have the potential to grow or expand and should have the potential of attracting other related positive development . 5 . It is the City' s preference that incentive funding be directed toward public improvements whenever possible . (See footnote 2 . ) 6. The development must enhance the tax base. 7 . Well-paying, long-term jobs must be associated with the proposed project (with a wage rate at least 25% above the average of wage rate for the community) . 3 8 . The amount of the incentive must be recaptured within a reasonable time period based upon the industry. The recapture period for projects located within the Center City may exceed the recapture period for assistance provided in other areas of the city. Summary It is the intent of the Economic Development Guidelines to establish a framework by which development proposals submitted to the City of Elgin can be reviewed and evaluated in an objective fashion. Developers wishing to conduct business with the City will have a clearly-defined set of development principles, policies and evaluation criteria for proposals to be submitted to the City for review. The City will also have a clearly-defined set of guidelines that will direct its review and evaluation of development proposals . 4 Endnotes (1) Public benefit means that a proposed development will result in increased tax revenue, desired additional employment or have an identifiable effect of stimulating further and additional desired economic development which outweighs the proposed incentive to be provided by the City. (2) Public Improvements means city owned and maintained water mains, hydrants and other necessary works and appurtenances for providing water service; sanitary sewers or other instrumentalities or appurtenances for providing sanitary sewer service; sidewalks, curbs, gutters, streets, off-street parking lots, culverts, bridges, or viaducts; drains, sewers and appurtenances for providing storm water drainage; traffic signs, signals, lights and lighting; poles, posts, wires, conduits, lamps and other appurtenances providing for street lighting; parks, parkways and recreational paths; and acquisition of any and all property, easements and rights of way which may be necessary to accommodate such improvements . Such term shall not include improvements serving a specific site, e. g. , water and sanitary sewer service lines . 5 o0 OF Et.C� Agenda Item No. < City of Elgin o Iry�� „TTi(: I fi December 13, 2000 G A-r; NA -gyro TO: Mayor and Members of the City Council ALIVE DOWNTOWN FROM: Joyce A. Parker, City Manager SUBJECT: Revised Economic Development Guidelines PURPOSE The purpose of this memorandum is to present to the Mayor and Members of the City Council revised Economic Development Guidelines that include the provision for rental assistance within the boundaries of the Center City. BACKGROUND The Riverfront/Center City Master Plan was adopted on May 24, 2000 . The plan references numerous uses within the Center City that are needed and desirable. Some examples are: Speciality Shops Food Establishments Cards & Gifts Bakery Book Store Ice Cream Shop Florist High End dining Art Gallery Coffee Shop The plan suggests that within the Center City area, destinations that highlight new products and services should be developed. The presence of such destination would capitalize upon the increased volume of people that will be attracted to the Center City as the riverfront plan evolves . In an attempt to insure that some of the desired uses or destinations are in place and available to the residents and visitors to Elgin, it may be necessary and desirable to encourage the development of a number of the identified businesses by offering location incentives . One incentive option may be rental assistance . Proposed changes to the Economic Development Guidelines are as follows : • Revised Economic Development Guidelines December 13, 2000 Page 2 Introduction The use of tax relief measures, cash, grants, rent assistance, in- kind contributions and other forms of assistance, collectively referred to as " incentives" , is a practice used by state, regional and local governments for the purpose of attracting businesses to their area and to assist existing businesses to expand. Policies • The following policies should be applied when development incentive requests are considered within the City of Elgin: 1 . The City will not consider any requests for waiver of the following fees or charges : construction permit fees, utility rates, development impact fees, recapture fees, and other fees as prohibited by City ordinances . 2 . Incentives relating to local share property tax rebate and sales tax rebate shall only be considered in such instances where established incentive programs provide for such relief. (Center City Enterprise Zone benefits and Cook County Auto Dealership Program. ) 3 . Incentives related to rental assistance shall be limited to Elgin' s Center City. Such assistance may be made available to new or expanding businesses that are identified as needed and desirable within the Riverfront/Center City Master Plan, adopted May 24 , 2000 . By including the reference to rental assistance within the Economic Development Guidelines, the Mayor and City Council Members retain the option to review each request for assistance on a case by case basis, and maintain the requirement that all requests must meet the overall requirements of the Economic Development Guidelines . Any approved request for assistance would be formalized within a development agreement between the City and the requesting party. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED Elgin Area Chamber of Commerce staff have been involved in the discussions relating to rental assistance. r / FINANCIAL IMPACT Any expenses incurred related to granting rental assistance would be charged to the Economic Development Incentive account number 276-0000-791 . 80-27 . Revised Economic Development Guidelines December 13, 2000 Page 3 \^\r EGAL IMPACT JNone ALTERNATIVES 1 . Include rental assistance within the Center City as an option within the Economic Development Guidelines . 2 . Maintain the Economic Development Guidelines as currently drafted. RECOMMENDATION It is recommended that the City Council authorize staff to amend the Economic Development Guidelines to include rental assistance . Re ectfully submitted, _ 42 /gr-1-,_ J ce A Parker City Manager RHM: sp Attachment