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Item No: 5 Meeting Date: November 7, 2011 Type of Business: Work session City of Mounds View Staff Report To: Honorable Mayor and City Council From: James Ericson, City Administrator Item Title/Subject: Economic Development Staffing Discussion Introduction: The City of Mounds View has at present four active Tax Increment Finance (TIF) districts. Three of the four districts were certified in 1988, 1990 and 1989, and the last district was certified in 2008 to support the Medtronic project. The original three districts have performed quite successfully, creating sufficient increment to cover all obligations plus fund the City’s economic development programs. In 2007, after two failed assessment projects, a taskforce was created to address funding for streets, and it was decided that a substantial portion of the pooled, unobligated increment would be utilized to help fund a newly-created street reconstruction program. While some increment remains, the reprioritization of the TIF funds has greatly diminished the role of economic development in the City. Discussion: Despite having a fairly robust TIF fund balance, the City has not historically embraced economic development activity (with one significant exception). The prevailing philosophy of the City Councils during my time with Mounds View has been one of allowing the market to dictate what happens. The City has not endeavored to purchase available property and does not support the assembling of land for larger redevelopment purposes. Programs and policies which have been suggested by staff and the EDC to help incent new business growth, relocation or expansion are generally not supported, and some tools presently at our disposal are not allowed to be marketed to prospective businesses. Taking all of this into consideration, promoting the City and working to bring new businesses into the community becomes a frustrating exercise with little to show for the effort. Under these circumstances, it would seem apparent that a full-time employee may not be needed to coordinate the EDA’s programs. In addition to the City’s reluctance to support incentives or subsidies to encourage or promote business growth and development, the present state of the economy has effectively stagnated development activity in the City, leaving many buildings on our most visible commercial corridor to sit vacant. Because the presence of these vacant buildings does nothing to enhance the City’s image or tax base, it would seem more important than ever to be aggressive in our marketing of the City and open to providing incentives to encourage redevelopment of these key, visible parcels.