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Mounds View EDA January 23, 2006 Regular Meeting Page 9 same time. President Marty stated during discussion on this last summer and fall, he had asked this question several times as to whether Medtronic will come back for Phase 2 or Phase 3, what are we looking at. President Marty stated he was told by Community Development Director Ericson that all the infrastructure and everything would be in place so there would be minimal charges, probably in the range of $2 million to $3 million. President Marty noted this figure is almost triple or at least double from a few months ago; $8.1 million in his figures is not even close to $2-3 million. President Marty stated on Item 6 it indicates that Medtronic agrees to contribute $355,000 to the City’s Street Reconstruction Fund to help offset traffic impacts on local roads. He pointed out that is a one-time offering so, in other words, it is divided by 26 years. President Marty stated if the City was not using TIF in this project, the City would be getting approximately $400,000 to $500,000 in taxes from this project per year. So, this $355,000 contribution is almost like their donation of $100,000 to the school whereas if they were not using TIF the schools would get in excess of $160,000 a year. Commissioner Thomas stated the EDA needs to clarify its thinking because this is not a discussion of the Phase 1 TIF, which has already been approved and gone through the process. She noted the EDA is now talking about Phase 2. She asked the EDA to keep that in mind when talking about the difference in tax base for development that is already going to be there, and now adding Phase 2. She stated the numbers need to be recalculated but when talking about what they would added for road improvements, it would only be for Phase 2 and the discussion should only relate to that. Economic Development Coordinator Backman stated the question asked is why TIF is going up by 50%. He presented a side-by-side comparison of Phase 1 and Phase 2, noting the qualified costs in Phase 1 were $23,360,000 and Medtronic would get $14.8 million or about two-thirds. He explained that Medtronic had qualified costs in excess of $23 million but will not be reimbursed for all of those qualified costs. Economic Development Coordinator Backman noted the qualified costs for combined Phases 1 and 2 is $46 million, which is double their qualified costs and the number one reason is structured parking. He explained that a five-level structured parking facility has a substantial cost. So, if you compare in terms of the qualified costs of $46 million and what will they get reimbursed, the amount is $22.9 million, or less than one-half. He noted that from a percentage reimbursement basis, they are going down from two-thirds to less than fifty percent. President Marty stated he does not feel sorry for Medtronic because they are “big boys” and can take care of themselves. It is the EDA’s job to look out for its citizens. He stated he talked to Community Development Director Ericson and City Administrator Ulrich about the original agreement, noting that under Section 4.6, b, public improvements, it addresses installing sewer line improvement necessary for the development property and states it is estimated these improvements will cost about $400,000 and the EDA will be reimbursed through available tax increment first from this district. He stated he heard the argument that this will come out of the City’s five percent cap. However it does not say that, it just states the City will be reimbursed