Mozaic (all phases)

Calhoun-Isles, Cedar-Riverside, Longfellow, Nokomis, Phillips, Powderhorn, and Southwest
mattaudio
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Re: Mozaic

Postby mattaudio » November 4th, 2014, 9:47 am

It's ridiculous to give forgivable loans for jobs at growing companies.

Minneboy
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Re: Mozaic

Postby Minneboy » November 4th, 2014, 11:00 am

There should also be a note in the loan that if said company moves it's HQ overseas (to try to primarily escape their tax obligation), then they would immediately have to pay loan plus interest.

RailBaronYarr
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Re: Mozaic

Postby RailBaronYarr » November 4th, 2014, 11:26 am

twincitizen wrote:There seems to be some confusion in this thread about what the money is for. The money is for Code 42 to expand...it's not actually directly tied to the Mozaic development. Sure, Code 42 will pay money to Ackerberg in the form of rent, but Ackerberg is not directly receiving state money for the construction of this building (aside from previously awarded DEED funds & Met Council cleanup/TOD grants).
Just to be clear, I wasn't confused. I'm glad they're moving into an urban neighborhood in a building that happens to be designed very thoughtfully, but understand that they're not using the money to build this thing (I should have been more clear when I made that statement). I'm against the state handing them a fogivable loan for jobs they would have created anyway as part of being a growing business.

I'm not saying we should be doing the opposite and targeting loans specifically at failing companies. I'm saying we shouldn't do either. If incubation is the goal, then the state should spread that $2m across many more would-be firms who may not find VC funding or market-rate bank loans but still seem like worthy goals. Hold them to repayment - don't have it be completely free money in exchange for "jobs!" and certainly don't throw it at a company large enough to have access to huge sums of cash on their own.

mattaudio
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Re: Mozaic

Postby mattaudio » November 4th, 2014, 1:14 pm

^Exactly. The whole category of a "forgivable loan" seems like a bad idea.

Unless, of course, I'm the "borrower."

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FISHMANPET
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Re: Mozaic

Postby FISHMANPET » November 4th, 2014, 1:27 pm

Forgivable loans should be for wealthy white people to renovate their homes only!

I wonder how often loans like this are used in cases where the company wouldn't be able to otherwise get funding versus a succesful company taking advantage of every opportunity given? I hate subisides like this because it becomes a race to the bottom where the community to light the most money on fire "wins" but because of the nature of it, it's hard to just pick up your chips and go home because rather than fighting for scraps you're just not getting anything.

Thankfully a company like Code 42 is one where the skilled workers are important, and the location of your business is a valuable asset to those employees, whereas a factory or warehouse can go basically anywhere and find decent workers.

LakeCharles
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Re: Mozaic

Postby LakeCharles » November 4th, 2014, 1:45 pm

FISHMANPET wrote:I wonder how often loans like this are used in cases where the company wouldn't be able to otherwise get funding versus a succesful company taking advantage of every opportunity given?
That seems to be an important distinction. If Code 42 was successful but wouldn't be able to grow without this loan then maybe it is a good idea. If they were going to grow and bring 400 jobs either way then it seems like a terrible idea.

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Re: Mozaic

Postby David Greene » November 4th, 2014, 1:53 pm

FISHMANPET wrote:Forgivable loans should be for wealthy white people to renovate their homes only!
That's actually something I've struggled with on our house from a moral perspective. We're well off. Not 1% well off but well off enough. We did get a forgivable loan to help renovate the exterior of our house. I'm not sure we could have done it properly otherwise. The grant is only available for serious restoration work -- you can't get money just to repaint. And your project has to pass a board of architects who review it for historical sensitivity. And you have to stay in your house for 10 years or pay back the grant on a prorated basis if you leave early.

We got the grant but we're putting *way* more of our own money into the project above and beyond the grant. The grant rules specify a 1:1 owner:grant match. We're matching above 4:1. We're certainly not getting a bunch of "free" work done. It's helped us to do a more thorough (i.e. longer-lasting) job and forced us to actually learn about restoration. And while we really had no intention of moving any time soon, it does give us incentive to stay and invest more in the neighborhood.

I've talked to the staff at the Harrison Neighborhood Association and they have a similar NRP grant program. I specifically asked about the NRP program from an equity perspective, noting that our neighborhood is pretty privileged and has used NRP money to fix up houses. According to them, lots of not "wealthy white people" in Harrison have used the grants to fix up their houses and they think the NRP program was excellent. So it's not really fair to pigeonhole every grant as you did above. Every neighborhood got NRP money for housing. Poorer neighborhoods got quite a bit more. So yes, some grant money is going to wealthy white people but much more of it is going to lower-income families. NRP seems like an overall win for equity, so of course it was canceled. :(

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FISHMANPET
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Re: Mozaic

Postby FISHMANPET » November 4th, 2014, 2:23 pm

Everything I know about NRP I learned from snarky posts from @wedgelive on Twitter :D

xandrex
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Re: Mozaic

Postby xandrex » November 5th, 2014, 10:11 am

I struggle with handouts to companies, but for big expansions like this like new property and adding a ton of high-wage employees, it's hard to argue really strongly against it.

Both are for retaining Minnesota talent while adding jobs. We are a state worried that talent will flee to the coasts.

Technically, the $3 million they're getting is broken down into two funds. The Minnesota Investment Fund is producing $1 million of that and it's actually awarded to municipalities to dole out as loans. And by the rules, this is Minneapolis' only MIF it can be awarded during the calendar year, so they're clearly deciding to go all-in on Code42 (not really a bad bet, TBH).

The other $2 million comes from the Minnesota Job Creation Fund requires some certification that other options for expansion are available outside the state and that the development wouldn't go forward without the funds. The company already has satellite offices, so I suppose it's not completely out of the picture. And it wouldn't be the first relatively new tech company to start scooting toward west coast.

John
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Re: Mozaic

Postby John » November 5th, 2014, 12:14 pm

I'm absolutely sure that most states in our country offer financial incentives (through a variety of means) to attract companies to stay or relocate. It's legal and a fact of life in our economic system. They are just taking advantage of that like any savvy business. Code42 is a business that creates solid middle class jobs which increases tax revenue for the local and state government. In addition, Mozaic three will increase the tax base for the city, and further enhances Uptown as a stable, prosperous urban neighborhood for people to work and live (with less reliance on cars). Having Code 42 located here is a very positive outcome for our city and state. To make this into some big ethical or moral issue is missing the point.

HiawathaGuy
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Re: Mozaic

Postby HiawathaGuy » November 5th, 2014, 2:20 pm

Thank you both for the very well-written comments. I had tried that when posting the article, but missed the mark.

Azel
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Re: Mozaic

Postby Azel » December 21st, 2014, 10:23 pm

Anybody hear or see any news on this project in the past week?

mullen
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Re: Mozaic

Postby mullen » December 22nd, 2014, 7:29 am

it's up for a met council grant. seems to be moving along.
http://finance-commerce.com/2014/12/moz ... il-grants/

mullen
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Re: Mozaic

Postby mullen » December 22nd, 2014, 7:41 am

I take that back. There's a been recent major hiccup in this development.
http://www.bizjournals.com/twincities/b ... mplex.html

min-chi-cbus
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Re: Mozaic

Postby min-chi-cbus » December 22nd, 2014, 7:58 am

It makes me wonder where those employees are now going. Is it possible that they'd try to anchor one of the new speculative or proposed towers downtown? I mean Salesforce.com is the anchor for San Francisco's new tallest tower, so it's not out of the realm of possibility that a tech company could anchor a supertall like the one Duval proposed, for example -- even if they'd only be anchoring 100K or so of the total office space.

spearson
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Re: Mozaic

Postby spearson » December 22nd, 2014, 8:23 am

I bet someone offered them a better deal downtown in either existing or speculative/proposed office space. Huge blow to Mozaic though, I liked the building.

twincitizen
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Re: Mozaic

Postby twincitizen » December 22nd, 2014, 8:33 am

That could certainly be part of it. They would've been paying top dollar rent at Mozaic for sure.

I think it could also be that Code42's expansion plans may have been too aggressive and they decided to take a safer, slower approach. Remember, they were going to lease the entire building, leaving tons of room to grow. Perhaps it was a little too optimistic that they could grow quickly enough to earn all the DEED grants for hiring X number of employees and such.

I bet Ackerberg is kicking themselves for not sticking with the original plans for a multi-tenant building... I'm sure they would've lined up a couple tenants by now.

John
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Re: Mozaic

Postby John » December 22nd, 2014, 9:02 am

Sad yet I'm confident Ackerberg will regroup quickly and build a similar complex. Truthfully, the scale of the last revision for the design of this building was starting to be a bit large for the site. If they return to one of the previous smaller versions it will look and fit in better, and be more pedestrian friendly. Of course the bummer is it will take longer now. But undoubtedly there are other tenants who would be interested in this site given its prime location.
Last edited by John on December 22nd, 2014, 9:10 am, edited 1 time in total.

mullen
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Re: Mozaic

Postby mullen » December 22nd, 2014, 9:02 am

yea this is really curious. they were so far down the process and had gone out of their way to secure grants from the state. mozaic will be delayed until they secure some tennants.

mog
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Re: Mozaic

Postby mog » December 22nd, 2014, 9:22 am

spearson wrote:I bet someone offered them a better deal downtown in either existing or speculative/proposed office space. Huge blow to Mozaic though, I liked the building.
I would think there must be a better reason than just another offer. I am sure Code42 signed a contract with Ackerberg and I doubt they breached their contract just because they got another offer.


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