CEBA Application - Prudential
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MEMORANDUM
December 15, 2004
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Approval of CEBA Application for Prudential
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Prudential Retirement Insurance & Annuity Company has proposed an expansion of
employment in Dubuque. Over the next three years the Company is proposing to add
69 new positions at their downtown location. All of the positions have starting wages
above $25,000 per year.
Economic Development Director Bill Baum recommends City Council approval of an
application for Community Economic Better Account (CEBA) funds to assist Prudential
in an expansion project. The expansion is subject to the State of Iowa approval of
CEBA assistance in the amount of $207,000. The required City local match is proposed
to be $62,000.
The source of funding for this cash match is proposed to be the Greater Downtown
Urban Renewal District. Currently, by City policy, the City requests only 75% of the
available increment in this Tax Increment Financing District. To fund the match, the City
would need to request 75% plus $62,000 in next year's filing, or about 79% of the
increment.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Michael C. Van Milligen
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Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
William Baum, Economic Development Director
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MEMORANDUM
December 14, 2004
TO:
FROM:
Michael Van Milligen, City Manager
William Baum, Economic Development Director ~
SUBJECT: Approval of a CEBA application for Prudential
Introduction
The purpose of this Memorandum is to request approval of an application for
Community Economic Betterment Account (CEBA) funds to assist Prudential
Retirement Insurance & Annuity Company in an expansion project.
Background
In 1999 the City entered into a Development Agreement and an Enterprise Zone
Agreement with Trilog, Inc. (CIGNA) for the expansion of the Company at 5th and Main.
The terms of the Development Agreement stipulated the City would provide a land grant
for the expansion, and a rebate of property taxes paid on the incremental value created
by the project. The Enterprise Zone agreement allowed the company to receive sales
tax refunds on the materials used in construction, an increase in job training funding
from the community college, and a tax credit on the capital investments made by the
company.
The Company agreed to employ 200 persons, in addition to the 1999 employment of
320, and to maintain these 520 positions for 10 years.
In November 2002 CIGNA announced the company had signed an agreement to sell its
retirement business to Prudential Retirement Insurance & Annuity Company.
(Prudential) A Memorandum of Understanding and Assignment and Assumptions for
the CIGNAlCITY/Prudential agreements were prepared and approved by the City
Council and executed by all parties.
I received documentation from CIGNA that employment at the end of December 2003
was 570. Today the Company employs 579 full time positions. Therefore, the
Prudential continues to be in compliance with the terms of the City's Enterprise Zone
and Development Agreements.
Discussion
In working with Rick Dickinson of the Greater Dubuque Development Corporation, we
had envisioned the sale to Prudential would mean more good paying jobs to Dubuque.
Now, a few months after the completion of the sale, Prudential has proposed an
expansion of employment in Dubuque. Over the next three years the Company is
proposing to add 69 new positions at their location downtown. All of the positions have
starting wages above $25,000 per year.
The expansion is subject to the State of Iowa approval of CEBA assistance in the
amount of $207,000. A local match is required. A $62,000 loan is proposed to be
provided to the company, borrowed against Tax Increment Financing (TIF) in the
Greater Downtown Urban Renewal District. Currently in most of the district, the City
requests 75% of the available TIF. In fiscal year 2007, the City would request 75% plus
this $62,000, or approximately 79% of the available TIF. The exact percentage will be
determined when actual valuations in the district are provided next year.
An application for CEBA assistance has been prepared and approved by the company.
Attached are pertinent pages of the application for your review. The complete
application with all attachments will be sent to the Iowa Department of Economic
Development after City Council approval.
Recommendation
New job creation by Prudential in Downtown Dubuque is very positive economic
development news. The expansion will assist the City Council in meeting its goal of a
"Diverse, Strong, Dubuque Economy" and in the implementation of the Downtown
Master Plan. I recommend the attached resolution approving the submission of the
CEBA application be approved
F :IUSERSI WBaumlCI GNA IMemotoMikeonO4CE BAdoc
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE FILING OF A COMMUNITY
ECONOMIC BETTERMENT ACCOUNT (CEBA) APPLICATION ON
BEHALF OF PRUDENTIAL RETIREMENT INSURANCE & ANNUITY
COMPANY
Whereas, PRUDENTIAL RETIREMENT INSURANCE & ANNUITY
COMPANY has proposed the expansion of its existing operations; and
Whereas, the City Council of Dubuque, Iowa has considered said proposal and
has determined that the proposed project will contribute to the local economy through
the creation of over 69 new jobs for area residents; and
Whereas, the Iowa Department of Economic Development's Community
Economic Betterment Account (CEBA) was designed to assist in the economic
development efforts of local jurisdictions; and
Whereas, the City of Dubuque, Iowa is eligible to apply for funding from the
Community Economic Betterment Account program;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the filing of an application for participation in the Iowa
Community Economic Betterment Account program on behalf of Prudential
Retirement Insurance & Annuity Company is approved.
Section 2. That a local match of $62,000 be provided by the City of Dubuque as a
loan to the company, subject to the approval and execution of a formal loan agreement.
Section 3. That the Mayor is hereby authorized to execute, and the City Manager is
hereby directed to submit said application to the State of Iowa Economic Development
Commission together with such documents as may be required.
Passed, approved, and adopted this 20th day of December 2004.
Terrance M. Duggan, Mayor
Attest:
Jeanne Schneider, City Clerk
F:IUSERSIWBaumICIGNAIResolution approving CEBA app,doc
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Towa
SMART IDEA
Division of Business Development
Iowa Department of Economic Development
200 East Grand Avenue
Des Moines, Iowa 50309
www.iowasmart.com
Application for
Financial Assistance
June 29, 2004
Application for Financial Assistance
Page 2
GENERAL INSTRUCTIONS
1. Please visit the IDEO website, www.iowasmart.com, or contact IDEO to see if this
version of the application is still current.
2. Before filling out this application form, please read all applicable sections of the 2003
Iowa Code and Iowa Administrative Code (rules).
3. Only tvDed or comDuter-oenerated applications will be accepted and reviewed. Any
material change to the format, questions, or wording of questions presented in this
application, will render the application invalid and it will not be accepted.
4. Complete the applicable sections of the application fully; if questions are left
unanswered or required attachments are not submitted, an explanation must be
included.
5. Use clear and concise language. Attachments should only be used when requested or as
supporting documentation.
6. Any inaccurate information of a significant nature may disqualify the application from
consideration.
7. Send the original ~ one copy of the completed application form and all required
attachments to:
Business Finance Team
Iowa Department of Economic Development
200 East Grand Avenue
Des Moines, Iowa 50309
It is not necessary to bind the application and/or the required attachments. 3-ring
binders, staples or binder clips may be utilized. Please provide photocopies of any
document, which in its original form, IDEO would not be able to 2-hole punch for
purposes of creating the applicant's file.
IDEO
December 5, 2003
Application for Financial Assistance
Page 3
PUBLIC RECORDS POLICIES
Information Submitted to IDED. The Iowa Department of Economic Development
(IDEO) is subject to the Open Records law (Iowa Code, Chapter 22). Treatment of
information submitted to IDEO in this application is governed by the provisions of the Open
Records law. All public records are available for public inspection. Some public records are
considered confidential and will not be disclosed to the public unless ordered by a court, the
lawful custodian of the record, or by another person duly authorized to release the
information.
Confidential Records. IDEO automatically treats the following records as confidential and
they are withheld from public disclosure:
Tax Records
Quarterly Iowa Employer's Contribution and Payroll Report prepared for the Iowa
Workforce Development Department
Payroll Registers
Business Financial Statements and Projections
Personal Financial Statements
Other information supplied to IDEO as part of this application may be treated as confidential
under Iowa Code section 22.7. Following are the classifications of records which are
recognized as confidential under Iowa law and which are most frequently applicable to
business information submitted to IDEO:
Trade secrets [Iowa Code §22.7(3)]
Reports to governmental agencies which, if released, would give advantage to
competitors and serve no public purpose. [Iowa Code §22.7(6)]
Information on an industrial prospect with which the IDEO is currently negotiating.
[Iowa Code §22.7(8)]
Communications not required by law, rule or regulation made to IDEO by persons
outside the government to the extent that IDEO could reasonably believe that those
persons would be discouraged from making them to the Department if they were made
available for general public examination. [Iowa Code §22.7(18)]
Information supplied to IDEO as part of this application that is material to the
application and/or the state program to which the applicant is applying including,
but not limited to the number and type of jobs to be created, wages for those jobs,
employee benefit information, and project budget, are considered open records
and will not be treated as confidential.
Additional Information Available. Copies of Iowa's Open Record law and IDEO's
administrative rules relating to public records are available from the Department upon
request or at httD:I Iwww.iowasmartidea.com/docs/chaD1690Denrecords.doc.
IDEO
December 5, 2003
Page 4
Application for Financial Assistance
APPLICAIIJIII: ¡N FOMMftON
Name of Business:
Address:
City, State 8r. ZIP Code:
Contact Name 8r. Title:
Telephone:
E-mail Address:
Website:
Federal ID Number:
Prudential Retirement Insurance & Annuity Company
500 Main Street
Dubuque
Lori Theilen
563-585-6643 Fax:
Lori .Th ielen/PI/Prudentia I (i'ì)Prudentia 1
www.prudential.com
06-1050034 SIC or NAICs Code:
563-585-6579
Is the contact person listed above authorized to obligate the Business?
0 Yes
I:8JNo
If no, please provide the name and title of a company officer authorized to
obligate the Business. Douglas Russell, VP Operations
Business Structure:
I:8J Corporation
0 Limited Liability Co.
0 Not for Profit
If Corporation, attach a copy of Corporate Resolution authorizing company officials to
execute application, contract, and/or necessary loan documents, if approved.
Type of Business Project:
0 New Location in Iowa
0 Retention of Iowa Facility
0 Partnership
0 Cooperative
0 Sole Proprietorship
0 S-Corporation
I:8J Expansion of Iowa Company
0 Start-up 0 Relocation
This application was prepared by:
Name 8r. Title:
Organization:
Address:
City, State 8r. Zip Code:
Telephone:
E-mail Address:
William Baum, Economic Development Director
City of Dubuque
50 W. 13th Street
Dubuque, IA 52001
563-589-4393 Fax:
wbau m@cityofdubuque.org
563-589-1733
IDEO
December 5, 2003
Application for Financial Assistance
Page 5
Please complete the sponsoring community information if the Business is applying for one of
the following programs:
CEBA
Enterprise Zone Program
New Capital Investment Program
New Jobs and Income Program
Economic Development Set-Aside Program
City, County, or Enterprise Zone Commission Sponsoring Application:
City / County:
Mayor / Chairperson:
Address:
City, State 8r. ZIP Code:
Dubuque, IA
Richard Stein
50 W. 13th Street
Dubuque, IA 52001
IDEO's Contact at the City/County/EZ Commission:
Name 8r. Title: Same as above
Telephone:
E-mail Address:
Fax:
APPLICATION SUBMISSION DEADLINES
"".'..~rK+.Lj ,'."'. ",'. .< ' L, .," .,
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CEBA 4 weeks prior to the next IDEO Board Meeting.
Enterprise Zone Program Any time; allow 3-4 weeks from date IDEO receives
application for processing.
New Capital Investment Program Any time; allow 3-4 weeks from date IDED receives
(NCIP) application for processing.
New Jobs and Income Program 4 weeks prior to the next IDED Board Meeting.
(NJIP)
Iowa Values Fund 4 weeks prior to the next Iowa Values Board Meeting
Entrepreneurial Ventures Any time; allow 3-4 weeks from date IDEO receives
Assistance (EVA) application for processing
VAAPFAP 151 of the month in order for request to be considered
at that month's review meeting.
Economic Development Set Aside Any time; allow 3-4 weeks from date IDEO receives
(EDSA) application for processing.
IDED
December 5, 2003
Application for Financial Assistance
Page 6
CERTIFICATION 8r. RELEASE OF INFORMATION:
I hereby give permission to the Iowa Department of Economic Development (IDED) or the
Iowa Values Board to research the Business' history, make credit checks, contact the
Business' financial institutions, insurance carriers, and perform other related activities
necessary for reasonable evaluation of this application. I also hereby authorize the Iowa
Department of Revenue to provide to IDEO state tax information pertinent to the Business'
state income tax, sales and use tax, and state tax credits claimed.
I understand that all information submitted to IDEO or the Iowa Values Board related to this
application is subject to Iowa's Open Record Law (Iowa Code, Chapter 22).
I understand this application is subject to final approval by IDEO and/or the Iowa Values
Board and the Project may not be initiated until final approval is secured.
I understand that IDEO or the Iowa Values Board reserves the right to negotiate the
benefits. Furthermore, I am aware that benefits are not available until an agreement is
executed within a reasonable time period following approval.
I hereby certify that all representations, warranties, or statements made or furnished to
IDEO or the Iowa Values Board in connection with this application are true and correct in all
material respect. I understand that it is a criminal violation under Iowa law to engage in
deception and knowingly make, or cause to be made, directly or indirectly, a false
statement in writing for the purpose of procuring economic development assistance from a
¿~~( 10/1 /~i
- Signature r Date / I
1:h-gps: k.KuSSRil Sßh: fý tJìC-e- pr~s ÎolLver
Name d Title (typed or printed)
For the Community (refer to the top of page 6 for programs requiring Community
signature):
Signature
Date
_Terrance Duggan, Mayor
Name and Title (typed or printed)
IDEO or the Iowa Values Board will not provide assistance in situations where it is
determined that any representation, warranty, or statement made in connection with this
application is incorrect, false, misleading or erroneous in any material respect. If assistance
has already been provided prior to discovery of the incorrect, false, or misleading
representation, IDEO or the Iowa Values Board may initiate legal action to recover
incentives and assistance awarded to the Business.
IDED
December 5, 2003
Application for Financial Assistance
Page 7
All applicants shall complete Section A of this application and onlv the section(s}
for the program(s} to which the applicant is applying.
Prooram
CEBA
Enterprise Zone Program
New Capital Investment Program
New Jobs and Income Program
Iowa Values Fund
Entrepreneurial Ventures Assistance
Value Added Agricultural Products & Processes
Financial Assistance Program
Economic Development Set-Aside Program
Section B
Section C
Section 0
Section E
Section F
Section G
Section H
Section I
IDED
December 5, 2003
5.
Application for Financial Assistance
Page 8
SEcnON A: PROJECT INFORMATION
I
1.
Provide a brief description and history of the Business including current
products/services and markets served.
On April 1, 2004, Prudential Financial, Inc. (NYSE: PRU) announced that it has
completed the acquisition of the retirement business of CIGNA Corp. (NYSE: CI) for a
cash consideration of $2.1 billion. Effective immediately, all of CIGNA's full-service
retirement operations, its staff, and retirement programs and services are part of
Prudential Retirement, a business of Prudential Financial. The new Prudential
Retirement, combining two leading retirement services providers, now offers clients
even greater retirement expertise across the full spectrum of retirement plan
management. The transaction increases Prudential Retirement's assets to $120
billion and doubles its defined contribution record keeping assets to $59 billion,
based on account values as of December 31, 2003. The acquisition also creates a
Top 10 provider in the defined contribution market (PlanSponsor, June 2003), as well
as establishing the nation's top manager of stable-value and funding agreement
assets (LIMRA International, 2002). In addition, the transaction strengthens
Prudential Financials position among the Top 10 leading global institutional asset
managers, based on assets under management.
The company employees at the Dubuque location as of 9/1: 579 employees.
2.
Describe the proposed project for which assistance is being sought
including any proposed products/services, any new markets, and the
project address (if different than the address listed on page 5).
Company is proposing to expand employment in Dubuque. New products and
services - moving employment, or existing services have increased
3.
Has any part of the project started?
DYes I:8J No If yes, please explain.
4.
Attachment A1: A business Dlan which shall, at a minimum, include: marketing
study, feasibility study, projected profit and loss statements for three years into the
future, project budget, production operations, management structure, personnel
needs, descriptions of product or process, status of product/process development
and patent status (if applicable). (Any information outlined above not included in the
business plan should be submitted as supplemental information via a separate
attachment.) See attachment
Identify the Business' competitors and explain what impact the proposed
project will have on any Iowa competitors.
National competitors that reside regionally: Principal and Aegon.
Local competitors: Hartland Financial and local banks.
IDED
December 5, 2003
1.
Attachment A2: Copies of the Business' Quarterly Iowa Employer's
Contribution and Payroll Report for the past year and a copy of the most
recent payroll report for one pay period. Current employment as of 9/1: 579.
See cover letter for more details.
2.
Will any of the current employees lose their jobs if the project does
not proceed? DYes I:8J No If yes, attach an explanation regarding
the total number of employees that could be affected, their
location(s), and why.
3.
List the jobs that will be created and/or retained as the result of this
project. For retained jobs, include the current wage rate. For jobs to
be created, include the startinG wage rate.
Job Title Skills, Education, or Number Retained (R) Starting or
Experience Required of Jobs or Created (C) Current Wage
Rate
Distribution Education College Education 25 C $32,000.00
Center Specialist
Participant Service High School Education 28 C $25,000.00
Center Representative
Participant Service College Education 3 C $30,000.00
Center Operations
Client Service College Education 7 C $33,000.00
Consultant
Risk Management College Education 1 C $30 000.00
Sales Operations College Education 3 C $30 000.00
Managers College Education 2 C $70 000.00
Total Number of Retained Jobs: N/A
Total Number of Created Jobs: 69
4.
5.
Indicate the total number of jobs to be created during each year of
the project and the estimated increase in annual payroll each year.
Year 1: 54 jobs $ 1,685,000 Year 4: - jobs $
Year 2: 15 jobs $ 396,000 Year 5: - jobs $
Year 3: - jobs $
Does the Business operate any other facilities in Iowa?
No
If yes, complete the following:
DYes I:8J
Location
# of Emplovees
Application for Financial Assistance
Page 10
11.
Attachment A3: Description of the employee benefits provided by the company.
With respect to medical and dental insurance plans, please include:
a) the total cost of each benefit,
PRUDENTIAL EMPLOYEE BENEFITS CHARGEBACK, 2005
Part Time -
Marketing
Benefit Full Time Part Time Assistants
Total Welfare Plan 9,012 7,727 0
Total Pension 6.81% 6.13% 6.13%
Total PESP 3.28% 3.17% 3.17%
.PESP - 401(k) Plan
b) the amount and percentage of the cost paid by the employee, and
c) a benefit summary (deductibles, co-payments, eligibility requirements, etc.)
12.
During the last five years, has the Business been cited or convicted for
violations of any laws or regulations, including environmental or safety
regulations? DYes I:8J No If yes, please attach a record of any legal
action taken, fines, and an explanation of any mitigating circumstances.
The Prudential acquisition of CIGNA was completed on 4/1/04. From 4/1/04 to current
date, the business has not been cited or convicted for violations of any laws or regulations,
including environmental or safety regulations.
IDED
December 5, 2003
Application for Financial Assistance Page 11
13. Project Budget: The budget should attempt to identify all sources of funding being considered including owner
equity/investment, your primary lender as well as all public funds (local loan funds, federal programs, city assistance,
etc.) Please be as detailed as possible.
TOTAL
AMOUNT BUDGETED
Cost Source A Source B Source C Source D Source E Source F I Source G I Source H
$ $ $ $ $ $ $
$ $ $ $ $ $ $
$ $ $ $ $ $ $ $ 1$
$ $ $ $ $ $ $ $ $
$50000 $ $ $50,000 $ $ $ $ $
$ $ $ $ $ $ $ $ $
$79000 $ $ $79 000
$ $ $ $ P T$ T$ T$ T$
$2,081.000 $207,000 $62,000 $1.812,000
2210.000
1941.200
$
207.000
62,000
TERMS OF PROPOSED FINANCING
Source of Funds Amount Type Rate Term Conditions
Source A: IDEO $207 000 Foroive. Loan N/A 3 vears Creation of Jobs and Investment
Source B: City $62,000 Loan 3% 3 vears N/A
Source C: Prudential $1 941 200 N/A N/A N/A Onqoinq Operatinq Costs
Source D: $
Source E: $
Source F: $
Source G: $
Source H: $
TOTAL $2,210 000
IDEO
December 5, 2003