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HomeMy WebLinkAbout03-25-19 City Commission Packet Materials - C11. Res 5035, Supporting the Application to the BSTF on Behalf of LumenAd Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Brit Fontenot, Director of Economic Development SUBJECT: Resolution 5035 Supporting the Application to the Big Sky Economic Development Trust Fund Program, Administered by the Montana Department of Commerce, on behalf of LumenAd. MEETING DATE: March 25, 2019 AGENDA ITEM TYPE: Consent RECOMMENDATION: Adopt Resolution 5035 authorizing the City’s application for a Big Sky Trust Fund Category I job creation grant on behalf of LumenAd and administered by The Prospera Business Network. BACKGROUND: The Montana Department of Commerce administers the Big Sky Economic Development Trust Fund Category I job creation program. This State-funded program is intended to incentivize the creation of net new higher paying jobs; also a Bozeman City Commission priority. The local governing body is required to apply for the grant on behalf of the business recipient as a co- applicant with the local Certified Regional Development Corporation (CRDC). The Prospera Business Network is local CRDC which includes Gallatin County. Should the grant be awarded, staff recommends that the City Commission appoint The Prospera Business Network, our local CRDC, to administer all aspects of the grant on behalf of the City of Bozeman. LumenAd was founded four years ago and has seen rapid growth over that time. The firm, housed in downtown Missoula and now opening an office in Bozeman, offers a media management platform for brands and advertising agencies. LumenAd is a media management platform that helps media teams gain complete control over their advertising data. It centralizes all media efforts in one place so they can have the capacity to interact with their audiences on a 1:1 basis at scale. MEDIA: Missoula Current, November, 28, 2018, Missoula’s LumenAd, Customer Direct Share $450k state grant for 63 new jobs. UNRESOLVED ISSUES: None 115 ALTERNATIVES: As proposed by the City Commission FISCAL EFFECTS: If the application is successful, LumenAd may be awarded up to $5,000 per net new job with a target of fourteen (14) net new jobs over the next twenty-four (24) months for a total grant award, if all fourteen (14) proposed new jobs are filled, of $70,000. It is important to note that the Big Sky Trust Fund support provided by the City of Bozeman, in longstanding partnership with Prospera, is not without financial risk, although the City and Prospera work closely together with the assisted business to minimize the risk. If the number of jobs identified in the contract is not filled by the assisted business, but grant dollars are received by the assisted business, the contract between the assisted business and the City of Bozeman contains the following financial restoration sections: Section 8 Conditions on Method of Reimbursement: If the Assisted Business creates an eligible new job but fails to sustain that job for the requisite duration, then the Contractor shall reimburse the Department all funds received for that job. If the Assisted Business fails to create the required number of jobs, then the Contractor shall reimburse the Department the difference between the total amount advanced and the amount attributable to actual jobs created. If the Assisted Business ceases operation at the Project Site, then the Contractor shall reimburse the Department all funds received under this Contract. AND Section 3 Compensation and Consideration: c. The Assisted Business agrees that if the local government or tribal government request the funds before the jobs are created, and the Department agrees to that request, the local or tribal government and the assisted business receiving BSTF financial assistance are liable for the full amount of the award that is advanced by the Department, if the assisted business: a. Fails to create or maintain the number of net new eligible jobs as specified in the executed contract and assistance agreement, or b. Fails to inject the required amount of match into the project as specified in the executed contract and assistance agreement. Additionally the Department may recapture funds if: a. At the end of the contract period the Department has overpaid based on the number of net new jobs at the end of the contract period. b. The business ceases operations at the Project Site within the contract period. The City of Bozeman is the guarantor of these grants and is ultimately responsible for any defaults. In partnership with the Department of Commerce and Prospera, the City has supported multiple BSTF assisted businesses. The chart below shows the details of the businesses assisted since 116 January, 2016. Note that one City of Bozeman grant has been closed out prior to the generation of the table (Apptus). ATTACHMENTS: 1) Resolution 5035; and 2) LumenAd Signature Certification. Report compiled on Wednesday, March 6, 2019. 117 RESOLUTION NO. 5035 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, RELATING TO THE APPLICATION TO BIG SKY ECONOMIC DEVELOPMENT TRUST FUND PROGRAM ADMINISTERED BY THE STATE OF MONTANA, DEPARTMENT OF COMMERCE, ON BEHALF OF LUMENAD. WHEREAS, the Bozeman City Commission is committed to facilitating economic diversification in the City and the region; and WHEREAS, the Bozeman City Commission is committed to facilitating mid- and high- wage job creation and expansion, thus positively impacting the economy of the entire region; and WHEREAS, LumenAd, desires to expand their business and create additional technology and media-related jobs in Bozeman; and WHEREAS, the City Commission has determined that the technology sector has high growth potential, supports mid to high wage jobs and supports economic diversity; and WHEREAS, the Montana Department of Commerce administers the Big Sky Economic Development Trust Fund Category I job creation program, a state-funded program, to create good paying jobs for Montana residents, promote long-term, stable economic growth in Montana, create partnerships, expand existing businesses and provide a better life for future generations through greater economic growth and prosperity; and WHEREAS, the City Commission hereby authorizes and appoints The Prospera Business Network to administer, on behalf of the City of Bozeman, all aspects of the Big Sky Trust Fund 118 Economic Development Category I grant and provide administrative support and other responsibility for the management and appropriate reporting to the Montana Department of Commerce. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, the City agrees to submit an application, through The Prospera Business Network, to the Montana Department of Commerce, Big Sky Economic Development Trust Fund Program to assist LumenAd in their expansion project and that The Prospera Business Network will manage all aspects of the grant. PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 25th day of March, 2019. CYNTHIA L. ANDRUS Mayor ATTEST: ROBIN CROUGH City Clerk APPROVED AS TO FORM: GREG SULLIVAN City Attorney 119 120