00-0731R

RESOLUTION AMENDING RESOLUTION 00-0522 RELATING TO BUSINESS SUBSIDY CRITERIA.

BY COUNCILOR FENA:

WHEREAS, the Duluth City Council passed Resolution 00-0333(a) on May 22, 2000, which was amended by Resolution 00-0522 on July 31, 2000, adopting criteria that apply to a business that requests a business subsidy from the city of $25,000 or more (Resolution 00-0333(a) and Resolution 00-0522 herein after referred to as the "business subsidy resolution"); and

WHEREAS, the Duluth City Council desires to further amend the business subsidy resolution in order to exempt certain federal and state housing program assistance from said resolution.

NOW, THEREFORE, BE IT RESOLVED, that the business subsidy resolution is amended to read as follows:

"BE IT RESOLVED, that the Duluth City Council adopts, effective May 22, 2000, the following mandatory and preferential criteria for businesses receiving assistance from the city of $25,000 or more. The following assistance shall be exempt from the requirements of this resolution:

(a) Federal community development block grant program assistance until the assistance has been repaid to, and reinvested by, the city;

(b) Federal emergency shelter grant (ESG) and HOME investment partnership program assistance until the assistance has been repaid to, and reinvested by, the city;

(c) Minnesota housing finance agency - community revitalization fund and innovative housing loan program.

Mandatory criteria. All projects receiving assistance of $25,000, or more, must satisfy the following seven 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) 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;

(e) 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;

(f) 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;

(g) 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: The purpose of this resolution is to amend the business subsidy resolution to exempt the following from the requirements of said business subsidy resolution: 1) Federal ESG and HOME program assistance until the assistance has been repaid to, and reinvested by, the city; and 2) MHFA funding granted for At-Home in Duluth housing efforts. These types of assistance are exempted under the business subsidy law, Minnesota Statute Section 116J.993, subd. 3. The reason for exempting these programs is that they serve a public purpose which has been identified and reviewed through an extensive public process.