At the nearly 5 hour Board of Estimates meeting last night, there were many items of interest, stimulus package update, alternate side parking during the winter and then this little gem.
Ok – I can’t link to anything, as there is no information available. Which, about sums it up. The idea is either 3 years old, or we’ve known about it for two weeks. Except that we submitted a draft application on the 6th of February. It’s all very confusing.
From the propaganda that was handed out at the meeting (somewhat summarized):
Project: An application to the Federal Economic Development Administration (EDA) to finance approximately $3.5M of Phase 1 of the Midwest BioLink Commercialization and Business Center (BioLink) to be located in the 27-acre, City-ownder BioAg Gateway Campus in TID #39.
Components: Phase 1 of BioLink will be a 21,000 s.f. facility housing the following components:
– 10,000 s.f. of Prototyping/Flex Space (light-industrial space to pilot processing and manufacturing of products)
– 5,000 s.f. of Commercialization Greenhouses
– 3,000 s.f. of a Headhouse (non-growing work such as seed sowing, transplanting, equipment and supply storage, computer stations, lab space and work stations)
– 3,000 s.f. Office/Lab/Meeting spaceOperating costs: EDA would pay for three years operation costs. It would have three employees: Director, Lab/Plan Science technician and Admin Assistant ($250,000/year). Utilities, maintenance and property management would be $60,000/year.
Jobs: It would create 30 to 40 jobs.
On Jan 22, the state approached us and asked for a 4 page summary of the project based on the marketing study that was done in 2008.
The money is part of $81M in flood recovery money that are immediately available on a first come, first serve basis. Which is why staff thinks we need to apply by the week of the 23rd.
Key components of a successful FINAL application per EDA:
– City must partner with a non-profit economic development corporation in order to qualify as an applicant.
– City staff recommended partnering with Madison Development Corporation (MDC) to be the BioLink operator. The MDC Board has approved the partnership.
– MDC will be the “Co-Applicant” with the City on the final EDA application”
– Construction and operations will be managed by MDC, or its assigns
– The EDA grant requires a 75% (EDA), 25% (local) match.
– A City contribution of approximately $1.26 million of cash plus the values of the 2.63 acre property ($573,000) will provide a total City match of $1.837,650.
– This City match, combined with the $3.5M from the EDA, will provide the $5.4M required to build and initially operate the 21,000 SF incubator and commercialization facility.
– City staff has, and will continue, to reach-out to other potential contributors to the project.
– One of these contributors is Orbitec, whose Controlled Agriculture Manufacturing (CAM) technology will be a key component to BioLink. City staff and Orbitec have already discussed the possiblity of Orbitec investing $1M of CAM technology as a tenant in the facility. While the EDA has indicated that Orbitec’s technology cannot be considered as part of our local match, it does show the level of commitment by others to the project.
– The State does not have a program to fund BioLink construction byt may be able to provide assistance to MDC (BioLink operator) and to future tenants of the incubator.
– TIF law does not allow the City to invest in city-owned buildings. Therefore, the City may not provide TIF assistance as part owner or “investor” in the project. However, TIF law would enable provided a “but for” condition is satisfied, a $1.26M loan to MDC through TID #39. MDC has indicated a willingness to move the project forward.
– The BioLink will be a non-taxable incubator generating no property tax for the City. Repayment of the TIF indebtedness assumes that other taxable property in TID #39 grows in value such that it generates sufficient increment throughout the remaining life in the District.
So, we’re being asked to rush this through and vote on it a week from today. With about as much information as you see above. So, here’s a list of the questions and obstacles (some identified last night, some new from me).
1. Can we get a copy of the marketing study that was completed in 2008, but not shown to the Economic Development Commission or approved by the Common Council?
2. Can we get a copy of the draft application given to the EDA?
3. This wasn’t introduced at the council or sent to the committees (Economic Development Commission or Board of Estimates) for property vetting and it has to be voted on under suspension of the rules.
4. This is a budget amendment so it is a 15 vote item.
5. There was no request for proposals (RFP) to find a partner – resulting in a sole source situation that is likely not permitted.
6. There is no TIF application submitted.
7. There has been no “but for” analysis required by state law.
8. This hasn’t been reviewed by the TIF Joint Board of Review
9. This will be a TIF grant, not a loan. We don’t allow that in policy and have done that in anyone’s recent memory (20 years?) or under the new laws. There won’t be any guarantee of repayment.
10. We’re paying $45,000 – $60,000 per job.
11. There’s no business plan for the project. They couldn’t even tell us what the rents per square foot would be.
12. They don’t know what the governing structure of the new project will be. It’s sound like there may be a Board of Directors that is staffed by city staff. But the city will have very little role in our “partnership”.
13. We’re granting the money to MDC but we’ve been told this is a “limited term partnership” so it sounds like they will be replaced after we give them the money.
14. The TIF plan needs to be amended (that can only be done 4 times in the 20 years of the TID)
15. Orbitec is one of the groups that gets the most Federal money in the state – and yet we are putting them in an incubator?
16. We’re approving this money without a TIF analysis, partnership agreements or knowing the terms of the EDA grant.
17. We have no cash flow statements for the operating costs of the project so we don’t know if the operating costs will be covered after 3 years.
18. It’s unclear how to do a “gap analysis” on this project as the applicant isn’t bringing anything to the table.
19. We have no idea who is going to run this project after MDC is out of the project.
20. What does the Mayor think of this project? He left with about 2 hours of the meeting left and wasn’t there for the conversation.
Unfortunately, the press all left as well and there is very little information available to the public – so, sorry for the long post, but it’s the only place to get the info. Sorry I did it quickly, so hopefully it makes sense!
I’ll have to admit, the project sounds enticing, if we just throw out all the rules and just write a check. But, that seems to get us into trouble! We’ve got one week to sort this out.
