WHEREAS, Minnesota Statutes §116J.993-§116J.995 requires the city to develop criteria before awarding certain businesses a business subsidy in order to ensure the project meets a public purpose with measurable, specific and tangible goals related to that public purpose; and

WHEREAS, the city requires city council approval of all Duluth economic development authority expenditures of $25,000, or more;

BE IT RESOLVED, that the Duluth City Council adopts the following mandatory and preferential criteria for businesses receiving assistance from the city of $25,000 or more.

Mandatory Criteria. All projects receiving assistance of $25,000, or more, must satisfy the following eight criteria:

(a) Public purpose criteria. The project must meet two of the following five public purpose criteria:
(1) High quality jobs. If the project results in the creation of new jobs, then the jobs must be predominantly full-time jobs that pay at least a living wage (as defined by Duluth's Living Wage Ordinance) and provide health insurance and other benefits;

(2) Job retention. If the recipient can demonstrate that job loss is imminent without a business subsidy, then the recipient must present a plan which shows that a significant number of the existing jobs will be retained for at least five years after completion of the subsidy;

(3) Economic diversity. The project must contribute to the economic diversity of the city by reducing dependency upon declining industries, participating in fast growing industries, or supporting existing industries of manufacturing, education, health care, retail sales, tourism, and service and technology;

(4) Quality of life. The project must enhance the quality of life of the city's residents by investing in neglected neighborhoods or business areas, utilizing in-fill areas rather than contributing to urban sprawl, benefitting the environment, or redeveloping blighted or polluted areas;

(5) Tax base. The city must realize a reasonable rate of return on its public investment in the project in the form of an increase in tax base or other monetary return;

(b) Specific goals. The project will have measurable, specific and tangible goals as they relate to the stated public purpose;

(c) Equal opportunity. The recipient will abide by all local, state and federal laws prohibiting discriminatory hiring and employment practices and agree to affirmatively seek out participation in the project by members of protected classes;

(d) Proprietary interest protection. In order to promote labor peace and minimize risk to projects the city has financial interest in, the recipient will agree to:

(1) Negotiate an expeditious procedure by which their workers can register their preference without intimidation or coercion from either union or employer regarding union representation; and

(2) Negotiate a project labor agreement for all new construction related to the project of more than $100,000.

This provision shall become effective January 1, 2001;

(e) Project feasibility and disclosure. The recipient must demonstrate to the satisfaction of the city that it has adequate financing for the project and that the project will be completed in a timely fashion;

(f) Wage policy. If the project results in the creation of any job, the wage for each part-time and full-time job created must be in compliance with Duluth's Living Wage Ordinance and at least equal to the prevailing wage for like or similar projects within the area or such greater amount as required by the city for a specific project;

(g) Report to the council. At the time the city council reviews a project development agreement calling for assistance of $25,000 or more, a report shall be submitted to councilors summarizing the information necessary for them to exercise their due diligence, as determined by the city council;

(h) Applicable laws. The recipient will agree to satisfy all requirements of Minnesota's business subsidy law as defined in Minnesota Statutes §116J.993-§116J.995 and Duluth's Living Wage Ordinance, as amended, in Article 26, Chapter 2 of the Duluth City Code.

Preferential criteria. Businesses that meet any or all of the following criteria shall be given preference for receiving assistance over other businesses that meet the mandatory criteria but not any of the preferential criteria;

(a) Locally owned businesses. Preference shall be given to locally owned businesses or to projects that make extensive use of local businesses for support;

(b) Hiring low-income people. Preference shall be given to businesses with a commitment and plan to hire people earning at or below 200 percent of the poverty line;

(c) Protected class business owners. Preference shall be given to businesses owned in whole or in part by members of protected classes;

(d) Quality of life businesses. Preference shall be given to businesses that are environmentally responsible and enhance the overall quality of live in the city.

STATEMENT OF PURPOSE: This resolution adopts criteria that must be met by a business that applies for a subsidy. The establishment of criteria is required by state law.