New business gets $250,000, could move to city by July
After months of working with Vadnais Heights-based Vista Technologies, the Stillwater City Council signed a tax increment funding loan agreement with the company following a 3-2 vote at Tuesday’s council meeting.
The loan is $250,000 and the company hopes to relocate in the vacant UFE site on South Greeley Street, which has been vacant for four or five years according to Community Development Director Bill Turnblad.
Vista Technologies was established in 1996 and is a manufacturing firm seeking to expand. The TIF incentive approved by the council is used in this case because of environmental contaminants on the site and job creation expected to occur.
The loan, if the deal goes through, would be paid over five years at $50,000 a year and would be forgivable if the level of full-time employment stays at or above 35 workers. If the company is unable to meet those requirements, it would be charged on a pro-rated basis for those that were missing.
The company’s plans include 28 full-time employees on site by July 1 and increasing that to 35 employees by 2014. By Jan. 1, 2015, and each year up to 2019, Vista Technologies will report full-time employee numbers on site. If there are 35 employees, no payment would be due to the city. If the number falls below 35, the company is charged a pro-rated portion of that year’s $50,000 TIF loan. On Jan. 1, 2019, if the company still owns the building and employs the minimum number of employees the loan is forgiven in full.
“These are low projections,” said Dan Mishek, Vista Technologies owner and managing director. “My goal is to add 50, 60, 70, 100 employees and create opportunities to expand going forward.”
Ward 3 Councilman Tom Weidner expressed concerns at Tuesday’s afternoon meeting about how to quantify the city’s benefit from adding the company. He said his duty was to the public and he cared about making the right decision with so much money on the line.
“The economic impacts are that we would be able to fill an unused building, allow them to create an improved building, and continue expansion into the future,” Turnblad replied. “There is value in bringing high paying jobs into the city. They can shop at Cub, grab gas on their way home and entertain their clients in town. There’s a very real impact this could make and it may even cause more pressure for those employed here to move closer to the area.”
Turnblad added that although he didn’t have the numbers at the meeting, former Stillwater City Planner Mike Pogge had done an analysis early in the city’s talks with Vista Technologies and estimated each new job brought to the area could bring in $8,000 annually.
Weidner expressed concerns about the risk of the investment as well.
“All economic development comes with risk and you accept that risk or you don’t,” said City Administrator Larry Hansen. “We have tried to minimize that risk by tying into the mortgage and getting a personal guarantee. Every bit of economic development will hold risks but in this case, when you’re trying to bring in a new stable company–they’ve been in business for 16 years and these people don’t want to fail — it’s good to bring the company in. I have lots of experience with these kinds of things, and I do support this.”
New council members Weidner and Ward 2 councilman Ted Kozlowski voted against the agreement, saying they did not see the quantifiable data backing up the $8,000 figure. Both men, however, said they were happy that Vista is coming to Stillwater.