#1 Authorize to enter a TIF development agreement to help relocate Miniature Precision Components into TIF District #22 (File Res. #2012-879)Economic Development Department Memorandum
January 9, 2012
TO: City Council
FROM: Vic Grassman, Economic Development Director
SUBJECT: Authorization for the City Manager to Enter into a TIF Development
Agreement with Helgesen Development to Facilitate the Relocation
of Miniature Precision Components into TIF District #22
Executive Summary
Miniature Precision Components (MPC), located at 820 Wisconsin St., Walworth,
WI has tentatively signed a ten year lease with Helgesen Development for
250,000 sq. ft. at 2929 Venture Dr., Janesville. This lease is contingent upon
City and state incentives. MPC intends to create 90 new jobs within three years
and would like to begin production by March 31, 2012. (Job estimates include 46
new jobs in Year 1, 27 in Year 2 and 17 in year 3) Manufacturing salaries range
from $12.57 - $17.30 /hr. plus benefits. Capital investment at the above facility
is estimated at $2.3 million over the three year period.
MPC (www.mpc-inc.com) with headquarters in Walworth, WI, is a manufacturer
of thermoplastic components and is a Tier 1 supplier to the auto industry. The
company currently has several Wisconsin operations (Richland Center, Prairie du
Chien and Delavan) as well as Southfield, MI, Nogales, AZ and Santa Ana,
Sonora Mexico. The company has over 1,400 employees with 1,000 in
Wisconsin.
Recommended Motion
I move to authorize the City Manager to enter into a TIF Development Agreement
consisting of a forgivable loan equal to $1 per square foot leased with Helgesen
Development to facilitate the relocation of Miniature precision Components into
TIF District #22.
City Manager’s Recommendation:
The City Manager recommends approval.
Economic Director’s Recommendation
I recommend that a forgivable TIF loan of $250,000 be offered to this company.
The offer would be structured so that the loan would go to Helgesen
Development which would guarantee the jobs. MPC would then reimburse
Helgesen Development for any loan payments due because of missed
employment objectives. A lien would be placed on the building as potential
collateral. This is based on the following:
This recommendation is consistent with the Council’s TIF guidelines of
$1.00 per square foot leased.
These will be new jobs with salaries and benefits that are consistent with
other manufacturers in Janesville.
This will create a positive economic development event for Janesville as
well as a media opportunity.
The lease is contingent upon City and state incentives. An application has
already been sent to the WI Economic Development Corp. and as of
12/21/2011, a preliminary award of $345,000 in tax credits and a low
interest loan has been offered.
Analysis
These funds would be taken out of TIF 22. Including this forgivable TIF loan, TIF
22 is projected to break-even in Year 17 (2015) and by its final year (2023) it is
expected to have a positive balance of $3.8 million.
cc: Eric Levitt
Jacob Winzenz
Duane Cherek
Resolution 2012-879
A Resolution Approving a TIF 22 Development Loan Agreement and Promissory Note With
Miniature Precision Components for $250,000
WHEREAS, the Common Council of the City of Janesville created Tax Incremental Finance District No.
22 in accord with Wisconsin’s Tax Increment Financing Laws, Wis. Stats. Sec. 66.1105 and other
applicable statutes, as from time to time amended or renumbered, in order to stimulate the development
and redevelopment of industrially zoned properties; retain and increase employment; construct, renovate
and expand industrial facilities; and otherwise provide for the overall economic health, welfare, vitality,
and good of the community; and
WHEREAS, the Project Plan for TIF District 22 includes industrial and manufacturing development and
redevelopment, improvements, facility construction, expansion, and renovation, job retention and
creation, and related financing, incentives, payments, loans, and actions that effectuate and/or facilitate
these public purposes and goals; and
WHEREAS, Miniature Precision Components (MPC) is a thermoplastic manufacturer and Tier 1 supplier
to the auto industry, conducting its principal business at 820 Wisconsin St., City of Walworth, County of
Walworth, State of Wisconsin, currently employing over 1,400 persons with 1,000 in Wisconsin, and has
tentatively signed a ten (10) year lease with Helgesen Development for 250,000 sq. ft. at 2929 Venture
Dr., Janesville (“Facility’), contingent upon City and state incentives. MPC intends to create 90 new jobs
within three years and would like to begin production by March 31, 2012. Job estimates include 46 new
jobs in Year 1, 27 in Year 2 and 17 in year 3. Manufacturing salaries range from $12.57 - $17.30 /hr.
plus benefits. Capital investment at the above facility is estimated at $2.3 million over the three year
period; and
WHEREAS, MPC and Helgesen jointly and severally promise to upgrade, renovate, and operate the
Facility, create and maintain new employment at MPC’sJanesville Facility, and otherwise benefit and add
value to the City, TIF District, and the City’s tax base; and
WHEREAS, MPC has requested forgivable TIF 22 loan in the amount of Two Hundred Fifty Thousand
and 00/100 Dollars ($250,000), upon the terms, in the manner, and otherwise in consideration of a
standard Janesville TIF economic development forgivable loan, such that the City’s offer would be
structured so that the loan would go to Helgesen Development which would guarantee the jobs. MPC
would then reimburse Helgesen Development for any loan payments due because of missed
employment objectives. A lien would be placed on the building as potential collateral. The remaining
terms and provisions of the loan would be the City’s standard loan provisions, which are reiterated and
incorporated herein by reference as if fully set forth verbatim; and
WHEREAS, TIF 22 is projected to break-even in Year 17 (2015) and by its final year (2023) it is expected
to have a positive balance of $3.8 million; and
WHEREAS, there are currently sufficient positive fund balances in the TIF District 22 improvement and
overall project accounts, and these expenditures fall within the allowable time and scope for said
Development Agreement and expenditures; and
WHEREAS, the Common Council hereby find that the City Administration has negotiated the TIF
Development Loan Agreement and Promissory Note with MPC upon terms, conditions, promises,
obligations, provisions, and purposes, consistent with the best interest of and benefit to the City, all
applicable laws, and Common Council industrial and economic development policies, goals, objectives,
and directives.
NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of Janesville that:
1. Each and every of the above recitals are reiterated and incorporated herein by reference as if
fully set forth verbatim; and
2. The City’s above described Development Loan Agreement and Promissory Note once finalized
are also reiterated and incorporated herein by reference as if fully set forth verbatim; and
3. The MPC TIF 22 Development Loan Agreement and Promissory Note, and all expenditures,
terms, conditions, promises, obligations, and provisions set forth therein are hereby found to be in the
best interest of, and for the benefit of, the City, and, therefore, are hereby both authorized and approved,
as from time to time amended by the City Manager; and
4. The City Manager and/or his designee(s) is/are hereby authorized to execute, enter into, and
effectuate the TIF 22 Development Loan Agreement and Promissory Note with MPC on behalf of the City
of Janesville; and
BE IT FURTHER RESOLVED, that the City Manager and/or his designee(s), on behalf of the City of
Janesville, is/are hereby authorized to administratively negotiate, draft, execute, review, enter in, modify,
amend, record, file, and otherwise effectuate the above agreements and promissory note, and/or to
make and enter into any and all other agreements, contracts, documents, papers, and forms, and/or to
take whatever other actions that the City Manager and/or his designee(s) may, from time to time and at
any time, determine necessary and/or desirable to effectuate the above transactions, agreements, and/or
above all the intent and/or purposes of this Resolution.
ADOPTED:
Motion by:
Second by:
APPROVED:
Councilmember Aye Nay Pass Absent
McDonald
Eric J. Levitt, City Manager
Perrotto
Rashkin
ATTEST:
Steeber
Truman
Voskuil
Jean Ann Wulf, City Clerk-Treasurer
APPROVED AS TO FORM:
Wald Klimczyk, City Attorney
Proposed by: Economic Development Director
Prepared by: City Attorney