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Mounds View EDA December 12, 2005 Regular Meeting Page 3 property as well as the $400,000 cost to bring the utilities up to their property. In addition, 87 Medtronic would agree to cover City costs for relocating the billboards. Originally the City was 88 going to pay $550,000 and Medtronic had agreed to cover part of that but would now agree to 89 cover all of that cost. Finally, and perhaps more importantly, Clear Channel has to relocate four 90 billboards from the Medtronic site. The City is potentially on the hook for two billboards if they 91 cannot find a home for them, or a cost of $1.6 million to Clear Channel. Medtronic would pick 92 up the cost for the other two billboards, or $1.65 million. That anticipates one of the billboard 93 would go to the SYSCO outlot area. Director Ericson stated that Medtronic knows they could be 94 on the hook to pay for relocation of all four billboard at a cost that could equal $2.7 million. In 95 addition, Medtronic will pay for the costs for staff to prepare that amendment to allow them to 96 bring in Phase 2, which could equal $150,000. 97 98 Director Ericson reported that with bundling Phases 1 and 2, staff has found there would be no 99 cost or risk to the City and no additional tax dollars spent on this project or revenues from the 100 City being spent that would not be reimbursed. The tax dollars would reimburse Medtronic for 101 the $7.2 million in qualified costs. He noted a summary of the terms are included in the staff 102 report, identified as the draft, and includes 16 points. He explained that staff is not asking for 103 EDA consent or agreement but to set a public hearing and allow for the process to move forward. 104 105 Director Ericson advised that staff received confirmation from Ehlers that Medtronic would be 106 acceptable to paying out for these costs that the City of Mounds View is currently on the hook 107 for. The benefit for combining Phases 1 and 2 is that both would be paid off at the same time 108 and back on the tax rolls at the same point in time. Also, rather than $65 million in today’s 109 dollars it would be $96 million in today’s dollars. 110 111 Director Ericson stated staff and financial advisors recommend the EDA establish a public 112 hearing for February 13, 2005 so staff can send out notices and talk to the school district. Staff 113 recommends moving forward with negotiations since it seems like a good project for the City 114 without any additional expenditure, and assures Mounds View will get Phase 2 construction. 115 116 President Marty noted staff has indicated there would be a benefit of $2.75 million but the report 117 states $2.57 million. Director Ericson explained that when preparing the staff report he forgot to 118 add in reimbursable TIF administration expenses and did not correctly add up the billboard 119 buyout. He stated the figure is closer to $2.75 million. 120 121 Commissioner Thomas asked if this is going through the standard TIF hearing process and 122 regulations. Director Ericson stated that is correct and noted that this is not a new TIF district, 123 simply a modification to the original agreement and holding the necessary public hearings to do 124 so. All information will be presented publicly and will go through the proper channels with the 125 School District and County. 126 127 Commissioner Flaherty stated he thinks this option looks good. 128