#4 Authorize TIF development agreement with Helgesen Development Corp on behalf of Miniature Precision Components (File Res. #2012-891)
Economic Development Department Memorandum
April 9, 2012
TO: City Council
FROM: Vic Grassman, Economic Development Director
SUBJECT: Action on a proposed Resolution authorizing the City Manager to
sign a TIF Development Agreement with Helgesen Development
Corporation on behalf of Miniature Precision Components (File
Res 2012-891)
Executive Summary
Miniature Precision Components (MPC), located at 820 Wisconsin St., Walworth,
WI has signed a twelve year lease with Helgesen Development Corp. for 325,000
SF at 2929 Venture Dr., Janesville. This lease is contingent upon City and State
of Wisconsin incentives. MPC intends to create 90 new jobs within three years
and would like to begin production by May 1, 2012. Capital investment at the
above facility is estimated over $2.0 million. The City of Janesville issued an
“Occupancy Permit for this leased space on March 23, 2012.
On January 9, 2012, the City Council adopted Resolution 2012-879 which
provided for a $225,000 forgivable TIF loan to Helgesen Development on behalf
of MPC. These funds were to be used for tenant improvements at 2929 Venture
Dr. In order to be competitive relative to other incentive offers, an additional
incentive in the amount of $103,500 for job creation is recommended based on
discussions with the Council to be added to the Janesville proposal bringing the
total incentive package to $328,500. These funds will also be spent on MPC
tenant improvements at the above address.
A TIF Development Agreement has been signed by both Helgesen Dev. and
MPC. Helgesen Dev. will guarantee the above job commitments relative to the
TIF loan forgiveness. MPC will reimburse Helgesen for any related costs should
job commitments be missed.
MPC (www.mpc-inc.com) is a manufacturer of thermoplastic components and is
a Tier 1 supplier to the auto industry. The company has several Wisconsin
operations (Richland Center, Prairie du Chien and Delavan) as well as Morrison,
TN, Southfield, MI, Nogales, AZ and Santa Ana, Sonora Mexico. The company
has over 1,400 employees with 1,000 in Wisconsin.
City Manager’s Recommendation
The City Manager recommends approval.
Economic Development Director’s Recommendation
I recommend that the additional TIF forgivable loan funds of $103,500 be added
to the existing TIF proposal of $225,000 for a total forgivable loan package of
$328,500. This is based on
The creation of 90 new jobs in Janesville within three years with salaries
and benefits consistent with other manufacturing jobs in Janesville.
A potential capital investment of more than $2.0 million by MPC during this
time frame.
This has/will create a positive economic development event and media
opportunity for the city and provide continuing evidence that Janesville is
recovering and diversifying its employment base.
Suggested Motion
I recommend that the City Council adopt Resolution 2012-891.
Analysis
These funds will be taken out of TIF 22. Including the above incentive increase,
TIF 22 is expected to breakeven in year 17 (2015) and by its final year (2020) it is
projected to have a $4.4 million surplus.
cc: Eric Levitt
Jacob Winzenz
Resolution 2012-891
A Resolution Approving a TIF 22 Development Loan Agreement and Promissory Note
With Miniature Precision Components for $103,500
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, has signed a twelve (12) year lease with
Helgesen Development for 325,000 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. Capital investment at the above facility is estimated at $2.3
million over the three year period; and
MPC currently employees over 1,400 persons with 1,000 in Wisconsin; and
WHEREAS, MPC promises to upgrade and renovate operate the Facility, create and maintain
new employment at its Janesville Facility, and otherwise benefit and add value to the City, TIF
District, and the City’s tax base, and has requested forgivable TIF 22 loan in the amount of One
Hundred Three Thousand, Five Hundred and 00/100 Dollars ($103,500), upon the terms, in the
manner, and otherwise in consideration of a standard Janesville TIF economic development
forgivable loan, the terms and provisions of which are reiterated and incorporated herein by
reference as if fully set forth verbatim, with TIF 22 projected to break-even in Year 17 (2015)
and by its final year (2020) it is projected to have a positive balance of $4.4 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 standard MPC 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
Dongarra-Adams
Eric J. Levitt, City Manager
Liebert
McDonald
ATTEST:
Rashkin
Steeber
Voskuil
Jean Ann Wulf, City Clerk-Treasurer
APPROVED AS TO FORM:
Wald Klimczyk, City Attorney
Proposed by: Economic Development Director
Prepared by: City Attorney