By Anne Thom,
Stacy correspondent

The establishment of an Economic Development Authority within the city of Stacy was the subject of a May 2 public hearing.

Chris Eng, Chisago Housing and Redevelopment Authority/Economic Development Authority director attended the meeting and gave a presentation that included information on the county's demographics, how an Economic Development Authority is established, and what an Economic Development Authority does for a community. Eng noted that 65-80 percent of the area's residents commute to work outside of the area. In terms of land use, the city of Stacy has a commercial-industrial tax base representing 21.5 percent of the land. The statewide average by county is 15 percent. Eng and the Council had discussed at the April 12 Council meeting that the role of an EDA is to work with existing businesses seeking to expand and to market the city and it's available resources to expand new development. An EDA can take many forms including economic development authority, housing and redevelopment authority, a for-profit development corporation, a non-profit development corporation or a Port Authority. If the city were to approve establishment of an EDA, the EDA would then have certain powers to pursue economic development goals. An EDA has responsibility to provide incentives to businesses; both new businesses and those looking to expand, provide loans, create Tax Increment Financing (TIF) districts, establish economic development districts, provide tax abatement incentives, acquire and sell real estate as well as personal property. The EDA can also enter into contracts on behalf of the city, be a participant in limited partnerships, handle the sale of general obligation and revenue bonds and levy taxes.

The council reviewed with Eng what an EDA can and cannot do. The EDA basically provides lender and development assistance. Mayor Michael Carlson asked how an EDA would provide financing in terms of the EDA providing low interest loans. Eng said there are two loan funds available; the Minnesota Investment Fund which makes available a total of $500,000 in a revolving loan fund and the Minnesota Investment Fund which has a total of $200,000. The loans are 1 percent below the prime interest rate. A member of the audience asked about grants. Eng said they are no longer available. If the city approves the use of the EDA it is released on some projects from compliance to mandates on wages and environmental review. Councilmember Mel Aslakson asked if preference is given to current businesses and was told it is not. Mayor Carlson brought up the issue of default. It is a potential risk that if the EDA lends to a business that defaults that state fund would look to collect from the city. The EDA does provide the service of writing the grant or loan, but the city is responsible for the execution. The types of businesses that are eligible are manufacturing only.
City Attorney Peter Grundhoefer has been provided with two resolutions supporting the establishment of the EDA for review. a decision will be made then.

Eng's literature included the statement that places are products. Stacy hopes to make the most of what the city has to market through the establishment of the Economic Development Authority.

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