PLANNING AND ECONOMIC DEVELOPMENT COMMITTEE
RESOLVED, that the proper city officials are authorized to enter into a JOBZ business subsidy agreement substantially in the form of that on file in the office of the city clerk as Public Document No. ___________ with IKONICS Corporation (qualified business) related to property located at 2402 Commonwealth Avenue.
STATEMENT OF PURPOSE: The purpose of this resolution is to authorize a JOBZ business subsidy agreement with the qualified business. Under the agreement, the qualified business agrees to retain the current Duluth employee base of 71.0 FTEs and create at least five new FTEs within one year from the application date of October 1, 2007. The qualified business will pay on an annualized basis compensation that is no less than 110 percent of the federal poverty level for a family of four, including benefits not mandated by law, until the end of the job zone term (December 31, 2015). This wage floor applies to all employees–both those retained as well as the new hires. That amount is currently $10.92/hour and will be adjusted annually. As a point of information, the current average compensation of employees by IKONICS is $29.62/hour.
The expected tax base impact for the job zone term is shown on the tax base impact statement. Currently, the land is owned by DEDA and is tax-exempt. Once purchased, the city will capture (at 2008 rates) $18,081.87 per year on the land–which is not exempt under the JOBZ program. The building and improvements (for Phase I) will generate (at 2008 rates) an estimated $108,088.71 per year that will be exempt until the end of the job zone term. The net annual exemption for Phase I, at 2008 rates, is $90,006.84.
Pursuant to Resolution 08D-17 adopted April 7, 2008, DEDA authorized the sale of the JOBZ property to IKONICS. This resolution provides the requisite JOBZ city approval.