#3 Authorize TIF development agreetment with Hendricks Development
Economic Development Department Memorandum
December 13, 2010
TO: City Council
FROM: Vic Grassman, Economic Development Director
SUBJECT: Hendricks Commercial Properties, LLC Incentive Request on behalf
of Universal Recycling Technologies, LLC
Executive Summary
Universal Recycling Technologies (URT), headquartered in Janesville at 2535
Beloit Avenue has requested a TIF forgivable loan. The company is planning on
expanding into a Hendricks property owned building at 120 E. Burbank. Loan
funds would used to assist with the tenant improvements needed to meet URT’s
needs. URT will agree to create 30 jobs that would be based in this facility by
12-31-2010.
An agreement has been reached where Hendricks Commercial Properties who
will take responsibility of guaranteeing the 30 jobs to be created by 12-31-2010.
If this does not occur they will pay the pro-rated debt service based on the terms
of the Developer’s Agreement. URT will then reimburse them through their lease
agreement. The TIF loan is for $50,000, over a ten year term at a 7% interest
rate. Annual loan payments are $7,118.88. The Developer’s Agreement has
been signed by Hendricks Commercial Properties and has been returned to the
City for signature.
The funds would be taken out of TIF 22 which is projected to have a net positive
balance in 2012 and a positive balance of over $5.0 million in 2021.
City Manager’s Recommendation
The City Manager recommends approval.
Economic Development Director’s Recommendation
I recommend that the Janesville City Council approve this based on:
The Councils current TIF policy of lending $1.00 for every square foot
leased. In this case $40,000 for 40,000 sf. The loan would be for 10
years at 7% if not waived for meeting employment goals.
I recommend that an additional $10,000 be added to the incentive based
on the company’s commitment to create 30 new jobs and its growth at its
other Janesville location, 2535 Beloit Ave.
Total incentive would equal $50,000.
Background
URT, with branches in New Hampshire, Oregon and Texas, is recycler of
electronic components. URT was the first recycler/processer in the U.S. to be “e-
Stewards” approved which means the company has met the highest industry
standards to protect the environment. The company currently employs over 200
people in Janesville and provides training and benefits. Wage rates for new
employees on the shop floor start at $9.00/hr. and move up to $12.00/hr. plus
benefits.
URT is a growing company. In addition to the 30 new hires mentioned, the
company will also be hiring an additional 38 people for their location at their
Beloit Ave location.
cc: Eric Levitt
Jacob Winzenz