Discussion:
The city SAC fund was created when Rahr gave the city in cooperation with the MET Council funding from their removal of much of their facility from the MET Council sewer system. The current available balance of cash for Economic Development projects is $121,945, which is the equivalent of 49.07 SAC credits based on the MET Council charge rate of $2,485 per credit.
Willy McCoy's owner has requested SAC credits totaling $77,035 to assist in offsetting of Shakopee Public Utilities Commission (SPUC) Water Access Charge (WAC) of over $176,000. SPUC currently calculates the WAC charge based on the MET Council's Sewer Access Charge. The MET Council changed the way that it calculates these fees and now charges restaurants based on square footage, not seats or fixtures. SPUC has one of the higher WAC charges in the area, which raises the costs for many users, including restaurants.
A sample of MET Council SAC, city SAC and WAC charges per unit shows the following:
Shakopee Savage Prior Lake Chaska Bloomington Burnsville Inver Grove
Met Council $2,485 $2,485 $2485 $2,485 $2,485 $2,485 $2,485
City SAC $ 500 $2,237.54 $ 799 $3,470 0 $ 543 $ 450
WAC $5,730 $2,984.99 $2,788 $4,230 0 $2,235 $3,910
______ ________ ______ ______ _______ ______ ______
$8,715. $7,707.03 $6,072 $10,185 $2,485 $5,263 $6,845
Shakopee is very competitive except for the WAC fee when compared to surrounding cities.
The City Council adopted a Sewer Availability Charge (SAC) Policy that has been updated several times. The current policy allows Council to consider use of the current balance for projects:
Downtown Redevelopment or Proven Hardship (i.e. bedrock, excessive infrastructure costs) or for Job Creation where there is one credit granted for every fulltime position created paying a minimum of $19/hour.
The Downtown or Proven Hardship SAC Credits are provided as a grant with partial repayment (20% reduction annually) required if the property is sold within five years. The Job Creation credits are a grant with partial repayment if the job goals are not met within two years.
Council has made a policy decision to attract higher wage jobs and the current wage requirement is in excess of $19/hour.
Staff, the First Stop Shop and Greater MSP are working with a number of unnamed corporate office locations that are considering Shakopee as either their North American headquarters or as a regional office. On one project, wages are projected at $88,000/year or over $38/hour. The other projects are expected to have similar wages, well in excess of the city's requirements.
While having restaurants is an important community asset, higher wage jobs create the opportunity for some employees to purchase homes in our community. One of the region's goals is to have fifty percent of our workforce living in the communities, reducing overall commuting traffic and creating stable communities through a live/work balance.
This development is also in a Soils TIF District. The city has already committed more than $2 million (present value) in future property tax revenues for soil and site remediation.