by Peter Bodley
Another Coon Rapids business planning to expand has received a grant from the city through its $3 million economic development fund.
Both the Coon Rapids City Council and the Coon Rapids Economic Development Authority (EDA), which comprises the seven members of the council, have approved a $350,000 grant for American Preclinical Services (APS), which is located in Evergreen Business Park.
At a special meeting Feb. 14, the council, following a public hearing, authorized the EDA to use the economic development pool to financially assist APS, then the EDA authorized the expenditure and executed business subsidy and grant agreements with APS.
In both cases, the council and EDA voted unanimously to support the project.
According to Matt Brown, city community development specialist, APS is a research facility which performs preclinical research for companies developing medical devices, both locally and globally.
APS currently owns a 44,000 square-foot building of space at 8945 Evergreen Blvd. as well as a lot next door, and is planning to expand into a vacant 20,000 square-foot building across the street at 8960 Evergreen Blvd., Brown said.
APS’ $2.65 million expansion project will renovate 18,000 square feet of the vacant building, most recently used as a school bus garage, for its research work, he said.
A start-up company when it opened in 2006 with five employees, APS now has some 75 workers, Brown said.
Once the expansion is completed, APS plans to add 40 more employees within two years, he said.
New employees would fill management, research and technical positions, and be paid an average wage of $19 an hour, excluding benefits, Brown said.
“The business subsidy agreement requires that the company create these jobs as part of receiving assistance from the EDA,” he said.
According to the business subsidy agreement, the 40 new jobs must be created on or before Dec. 31, 2013 and the existing 75 employees retained.
The city subsidy is needed because current economic conditions make the project unfeasible without the grant, the business subsidy agreement states.
And the agreement also requires APS to operate in the city for at least five years beyond Dec. 31, 2012.
According to Brown, $1.5 million of the project cost is for interior construction and $1.15 million for equipment.
The city grant will go to offset the building construction cost, not the equipment purchase.
The city grant will provide gap financing for APS, which will use internal funds plus a letter of credit to pay for the expansion project, Brown said.
APS is planning to lease the building with an option to buy, he said.
The council and EDA were told that the construction work will start right away with completion in three months.
To provide the grant, the city tapped into a economic stimulus tool put in place by the 2010 Minnesota Legislature, according to Brown.
The Legislature approved a temporary provision to the tax increment financing (TIF) law allowing the use of cash balances in TIF districts for loans and assistance for any project that creates jobs, including construction jobs, he said.
In August 2010, the council changed the budgets of two TIF districts to free up money for this purpose, some $3 million.
The 2010 Legislature put a cap on the use of the TIF dollars – projects receiving assistance had to begin by July 1, 2011 and the money had to be spent by Dec. 31, 2011, according to Brown.
But in the 2011 session, the Legislature extended the program another year, providing the project receiving the TIF dollars has started by July 1 this year and is completed by Dec. 31, 2012, Brown said.
Since the economic development funding pool was set up, the council and EDA have approved grants for five projects – Biovest, Bayer, Guardian Angels, RMS and Shoppes and Round Lake.
“There is money left in the pool, but it unlikely to all be used by the July 1 deadline,” Brown said.
According to its website, with a wealth of preclinical medical device expertise, state-of-the-art facility and the most advanced imaging technology, APS is a contract research organization of choice for in-vivo medical device testing.
“APS has the ability to perform GLP (Good Laboratory Practice) studies for regulatory submissions as well as feasibility research, device training and educational programs using acute and chronic research models,” the website states.
Its preclinical research service ranges from study design to data presentation.
According to its website, APS has a state-of-the art facility with cath lab and surgical suites with adjoining observation/conference rooms.
Peter Bodley is at firstname.lastname@example.org