Agenda Packets - 2006/02/27 - Laserfiche WebLink

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Mounds View City Council February 13, 2006 Regular Meeting Page 4 Mr. Glidden asked why the City is offering TIF assistance for the development since it appears to 1 be a benefit to Medtronic to accelerate Phase 2. He stated he has not heard the financial benefit 2 to the City of Mounds View and its taxpayers. He stated it is his understanding that Medtronic 3 could spend up to an additional $3.5 million covering costs that Mounds View may have had in 4 carrying out Phase 1 development. He asked what the trade-off is and what does anyone get for 5 $3.5 million. He stated he has heard the lifespan of Phase 1 TIF would be shortened by five to 6 six years, and asked why the number of years is important now when special legislation was held 7 to offer TIF of 25 years. He stated it does not seem consistent between Phase 1 activity and 8 Phase 2 activity. 9 10 Councilmember Thomas stated the time period was extremely important in Phase 1, but the 11 discussion about TIF is where the cap and limit came in. She stated even in Phase 1, the limit 12 would allow the Council to shorten the TIF district in Phase 1. She noted a future Council may 13 have approved TIF for Phase 2 at a later date, which would start a new TIF district time limit. 14 She explained this allows them to go simultaneously so that whole proposal for both districts is 15 shrunken down to the time limits for Phase 1, which is when that is paid off. She stated it will 16 probably be significantly earlier than the 25 years granted by legislation. 17 18 Mayor Marty stated by legislation, Medtronic has ten years to apply for the next TIF district, so 19 they could wait until 2015 to apply for Phase 2, so that would take Phase 2 out 25 years. He 20 noted that this way, Phase 1 and Phase 2 are both scheduled to be paid off in 26 years. 21 22 Mr. Glidden asked if the TIF life span will be shortened by 50 years by accelerating Phase 2. 23 24 Councilmember Thomas explained the 25 years would begin at the next start, not an additional 25 25 years on end of 25 years. She stated it would be a maximum of five to ten years. 26 27 Mr. Glidden stated Medtronic will receive $8.1 million to help carry out Phase 2 development, 28 and they end up with $8.1 million worth of property tax benefit that they utilize through the City 29 in doing that development. He stated their risk is $3.5 million where the benefit is $8.1 million. 30 He asked what the benefit is for the City of Mounds View. He stated the $96 million project 31 does not do anything for him other than through the tax benefits from the business being in the 32 City. He stated the City will receive $43,000 per year in property tax for 25 years. 33 34 Mayor Marty stated $43,000 per year is administrative costs that the City gets and it will not 35 reflect on residents’ property taxes. 36 37 Councilmember Thomas stated the assumption is that Medtronic is only getting $3.5 million of 38 risk; however, Phase 2 is significantly larger than the $8 million in TIF it is asking for. She 39 explained it is a $30 million increase in development and they are asking for $8 million. She 40 stated Medtronic is putting a lot out there and not just getting $8 million from the City. 41 42 Mr. Glidden stated that usually a City offers TIF to encourage development, and in this case, the 43 City is not trying to initiate the development. 44 45