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Mounds View EDA December 12, 2005 Regular Meeting Page 4 129 President Marty noted that Phase 1 would be $65 million as built out and adding Phase 2 130 increases it to $96 million, or a $31 million addition. He stated that it seems it should be one-131 third of what Phase 1 was. President Marty reviewed the calculations for Phase 1 and Phase 2 132 and stated it really seems to be a “wash” because the City would be providing a benefit of $2.5 133 million. 134 135 President Marty stated he is very concerned about running sewer and water under the freeway, 136 noting the engineer projected the cost to be $800,000. Medtronic had agreed to pay $400,000 and 137 the City would pay $400,000. He explained he is concerned because he has seen engineering 138 estimates go “north and south.” However, if Medtronic picks up the entire cost then it would 139 relieve his concern about the accuracy of the estimate. 140 141 President Marty stated Medtronic has possession of the property and if Mounds View can get 142 Phase 2 built on Mounds View soil, it will generate a $96 million complex. He asked Ms. 143 Kvilvang about the numbers with increasing TIF to want Medtronic wants. He noted the early 144 projection that this was supposed to pay off early and asked if another $31 million building 145 project will pay off early. 146 147 Stacie Kvilvang, Ehlers and Associates, stated they looked at that issue. The original projection 148 was based on $80 per square foot as set by the Assessor. She explained that they believe the 149 building will be valued at higher than $80 per square foot so it will pay off faster. 150 151 In response to President Marty, Ms. Kvilvang advised that with this large size of project, another 152 $1 million is about half a year of savings. 153 154 Director Ericson pointed out there are $8 million in qualified costs and the City would offer $7.2 155 million in TIF assistance. When Ehlers ran the numbers based on a $96 million project and 156 factoring out the City’s 5% administration fees, then $7.2 million is available. He explained that 157 you then factor out what Medtronic will cover in costs. The value is actually 50% more than 158 with Phase 1 so the $14.8 million half is about $7.2 million. Also, the City will increase 159 franchise fees by 50% for that project, resulting in an increase in the administrative TIF fees back 160 to the City by 50%. Director Ericson explained that the benefit would be beyond $2.75 million 161 in tangible benefits by moving forward with this request. 162 163 President Marty stated that makes him feel more comfortable. 164 165 Commissioner Thomas stated her support to have staff further explore this option. 166 167 President Marty asked when the draft of 16 points was available. Director Ericson stated it was 168 not available to include in the meeting packet but each summary point was taken from the staff 169 report. 170