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Mounds View EDA January 23, 2006 Regular Meeting Page 7 Economic Development Coordinator Backman indicated that the project costs for Medtronic, as they are currently configured, total over $125 million, including $65.5 million for building construction, $11 million for land acquisition costs in Mounds View, $24 million for other development costs, such as parking, land acquisition in Blaine, etc., and $25 million for computers, lab equipment and furnishings. That is $125 million of investment that Medtronic is making. The total also excludes $21+ million in State appropriations for the reconstruction of County Road J and replacement of the bridge over I-35W necessary to provide adequate access to the campus. Economic Development Coordinator Backman advised that the new Medtronic CRM campus is beginning to be recognized as one of Minnesota’s most important economic development projects. Recently, the national site selection magazine, Business Facilities, announced that Medtronic’s project in Mounds View received the top economic development award in its category for expansion projects in the United States. He noted they will be coming to Minnesota to award the City a plaque, recognizing that this is a significant project. Economic Development Coordinator Backman reviewed that on November 28, 2005, the Mounds View City Council directed staff to proceed with discussions with Medtronic regarding the potential acceleration of Phase 2 construction of the campus. On December 12, 2005, the City Council approved setting a public hearing for February 13, 2006 to discuss modification of the TIF plan and the business subsidy necessary for acceleration of Phase 2 to be concurrent with Phase 1. On January 9, 2006, the Mounds View EDA ranked replacement of Well #4 as the highest priority for City infrastructure needs, followed by payment from Medtronic to the City’s roadway fund. Also, the EDC adopted a motion last Friday unanimously recommending approval of the terms of the amended agreement. Economic Development Coordinator Backman explained that by combining Phase 1 and 2, the initial phase of the project would be significantly increased. The number of employees would be increased from approximately 3,000 to over 4,300. The building complex would be increased from 820,000 square feet to 1.2 million square feet. He noted that the Minimum Assessment Agreement would increase accordingly to $96 million. Economic Development Coordinator Backman advised that Medtronic has requested 95% of the available tax increment from the entire development (Phases 1 and 2), the same percentage that was used in the current agreement. The available TIF increment for the revised project would be $22.9 million. Thus, by combining the two phases, the TIF note issued by the Authority would increase by $8.1 million. Economic Development Coordinator Backman stated that Medtronic would continue to finance their development costs up front and would receive tax increment on a pay-as-you-go basis at the same interest rate as discussed in the first agreement. Under the amended contract, fiscal disparities would continue to be paid inside the district, the same as agreed with the original agreement. The length of the TIF district would remain the same at 25 years. Economic Development Coordinator Backman explained that in return for TIF assistance, the