ECONOMIC DEVELOPMENT MEMORANDUM

Transcription

1 ECONOMIC DEVELOPMENT MEMORANDUM September 14, 2015 TO: City Council FROM: Gale Price, Economic Development Director SUBJECT: Consideration and action on a proposed resolution authorizing the City Manager to submit a Transportation Economic Assistance (TEA) grant to the Wisconsin Department of Transportation (WisDOT) on behalf of DG Distribution Midwest, LLC, an affiliate of Dollar General. (File Resolution No ) Relates to Strategic Plan Strategic Goal - Economy One of the key elements of economic development is identifying and securing assistance from other agencies for possible development projects within the community. The Wisconsin Department of Transportation (WisDOT) administers a program referred to as the Transportation Economic Assistance (TEA) grant program that provides for a 50/50 cost share for transportation-related improvements associated with economic development projects that create jobs. Executive Summary This agenda includes resolutions authorizing TIF Development Agreements associated with the development and operation of a one-million square foot distribution center on a 124-acre tract of land at 3598 Beloit Avenue and within TIF 35. DG Distribution Midwest, LLC, which is an affiliate of Dollar General, would own and operate the facility to support their growing chain of small-box retail stores which include over 12,000 stores in 43 states. The new facility will require a $70 million investment in the building and equipment to manage and operate the distribution center. Additionally, the project includes the guarantee of 552 jobs with a living wage equivalency of 397 jobs by the end of the third year of operation. As part of the project, Dollar General has requested financial assistance with infrastructure improvements required to operate the facility. To support Dollar General in their development plans and subsequent job creation, staff is proposing and recommending applying to the Wisconsin Department of Transportation (WisDOT) for a Transportation Economic Assistance (TEA) grant. This grant covers 50% of the eligible transportation related costs including traffic signals, access/decelleration lanes, street lights, sidewalks and the extension of Innovation Drive. The preliminary estimated construction cost of the transportation-related improvements is $2,374,000. The City will be requesting $1,187,000 in TEA assistance which will be matched by 1

2 $1,187,000 from TIFs 22 and 35. Many of these costs were previously identified in the TIF project plan. Due to the size of the proposed project, additional monies originally contemplated for other utility and road extensions will be used to pay for these improvements. In addition the, City will execute water and sewer extensions that were accounted for within the TIF development plan for TIF 35. This property was originally purchased in 2004 for the Lowe s Distribution Center proposal that ultimately located in Rockford, IL. The TEA grant is an important element of this project given that there has been little increment created in this immediate area since the land was purchased. The TEA grant will allow for a significant offset of the transportation related improvements since the grant is a 50/50 split in eligible costs. WisDOT staff has confirmed that funds are available and provided the City with a preliminary approval given the size and nature of the project. City Recommendation The City recommends that the City Council adopt File Resolution No authorizing the City Manager to submit a Transportation Economic Assistance (TEA) grant to the Wisconsin Department of Transportation (WisDOT) on behalf of DG Distribution Midwest, LLC. Suggested Motion I move to adopt File Resolution No authorizing the City Manager to submit a Transportation Economic Assistance (TEA) grant to the Wisconsin Department of Transportation (WisDOT) on behalf of DG Distribution Midwest, LLC. Background Dollar General has proposed the construction of a one-million square foot retail distribution facility to be located on a 124-acre portion of property addressed at 3598 Beloit Avenue. The property is more specifically located at the southwest corner of the intersection of Beloit Avenue and Innovation Drive, on the City s south side within Highway 11 Bypass Industrial Park. Due to the scale and design of this project and the anticipated traffic generation, a number of traffic-related improvements are necessary for the project to move forward. The improvements and preliminary estimated costs are as follows: Improvement Element Est. Cost Design and construction of roadway Improvements (Acceleration/Decelleration $1,775,000 Lanes, turn lanes, extension of four lane cross section of Beloit Avenue, extension of Innovation Drive Utility Relocates/Modifications $99,000 Design and Construction of Traffic Signals/Street Lighting $434,000 Right-of-Way Acquisition $66,000 Total $2,374,000 Providing financial assistance for required infrastructure improvements is typical for large-scale economic development projects and for the use of TIF funds. Such approaches are part of an overall successful economic development package. 2

3 Options Adopt File Resolution No authorizing the City Manager to submit a Transportation Economic Assistance (TEA) grant to the Wisconsin Department of Transportation (WisDOT) on behalf of DG Distribution Midwest, LLC. Amend File Resolution No. No before adoption. Defeat File Resolution No , not authorizing submission of a Transportation Economic Assistance (TEA) grant to the Wisconsin Department of Transportation (WisDOT) on behalf of DG Distribution Midwest, LLC. Analysis The proposed development of this one-million square foot distribution facility is the pinnacle of what a successful economic development program can do for a City and surrounding area. Submission of the Transportation Economic Assistance (TEA) grant application is the best interests of the City and DG Distribution Midwest, LLC. Conclusions This project will provide an additional one-million square feet of industrial distribution space and create 552 jobs after three years. The Transportation Economic Assistance (TEA) grant would provide significant assistance to the City with regards to the additional traffic improvements needed for the project. Restated City Recommendation The City recommends that the City Council adopt File Resolution No authorizing the City Manager to submit a Transportation Economic Assistance (TEA) grant to the Wisconsin Department of Transportation (WisDOT) on behalf of DG Distribution Midwest, LLC. cc: Mark Freitag, City Manager Maxwell Gagin, Assistant to the City Manager 3

4 Resolution No A Resolution authorizing the City s funding of an application for a Transportation Economic Assistance (TEA) grant from the Wisconsin Department of Transportation to provide transportation infrastructure for DG Distribution Midwest, LLC an affiliate of Dollar General WHEREAS, The Common Council of the City of Janesville recognizes the economic development benefits of assisting companies like DG Distribution Midwest, LLC, an affiliate of Dollar General in their expansion projects which will result in new jobs and increased property tax base; and WHEREAS, DG Distribution Midwest, LLC has proposed the development of a onemillion square foot distribution center of 124 acres currently addressed as 3598 Beloit Avenue located within TIF 35; and WHEREAS, the proposed development is consistent with the TIF 35 project plan for industrial development; and WHEREAS, the availability of State funds for transportation infrastructure design and construction is available to the City on a 50/50 cost share basis; and WHEREAS, the total preliminary estimated construction of eligible TEA costs is $2,374,000 comprising a 50 percent TEA grant of $1,187,000 and the remaining 50 percent of $1,187,000 coming from TIF 22 and 35 funds, with the final estimate of costs being determined with completion of final design; and WHEREAS, the Common Council finds that this project and funding are in the best interests of the City, its citizens, residents, taxpayers, and the overall community; NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of Janesville that the City Manager is hereby authorized to submit a grant application to the Wisconsin Department of Transportation and may take any other action as may be necessary to facilitate the grant application. BE IT FURTHER RESOLVED, that the that the Common Council hereby authorizes the City Administration to take whatever reasonable necessary and/or desirable actions it determines appropriate to effectuate he intent of this authorizing resolution.

5 ADOPTED: APPROVED: Mark A. Freitag, City Manager ATTEST: David T. Godek, City Clerk-Treasurer Motion by: Second by: Councilmember Aye Nay Pass Absent Bobzien Deupree Farrell Gruber Liebert Marklein Tidwell APPROVED AS TO FORM: Wald Klimczyk, City Attorney Proposed by: Economic Development Department Prepared by: Economic Development Department and City Attorney