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Mounds View EDA January 9, 2006 Regular Meeting Page 2 46 7. EDA BUSINESS 47 48 None. 49 50 8. REPORTS 51 52 A. Report regarding Phase Two Acceleration of the Medtronic CRM Campus; 53 and Discussion of the Medtronic Development Proposal and Terms of the 54 Amended Contract for Private Development 55 56 Economic Development Coordinator Backman reviewed that the sale of The Bridges was 57 completed on October of 2005 and on November 14, 2005 the Council approved the Medtronic 58 Cardiac Rhythm Management (CRM) Campus final plat, the rezoning to Office PUD, and called 59 for the redemption of all outstanding golf course revenue bonds. During November, Medtronic 60 notified staff that they were interested in discussing the potential to accelerate Phase 2 61 construction of the CRM headquarters. On November 28, 2005 the Council directed staff to 62 proceed with discussions with Medtronic regarding the potential acceleration for Phase 2 63 construction of the campus. On December 12, 2005 the Council approved setting a public 64 hearing for February 13, 2006 to discuss modifications of the TIF plan and the business subsidy 65 necessary for acceleration of Phase 2 to be concurrent with Phase 1. 66 67 Economic Development Coordinator Backman advised that through various discussions and 68 meetings, the terms of an amended contract are being developed for the EDA’s consideration. 69 By combining Phases 1 and 2, the initial phase of the project would be significantly increased. 70 The number of employees would be increased from approximately 3,000 to over 4,300. The 71 building complex would be increased from 820,000 square feet to 1.2 million square feet for an 72 increase of about 46%, and the minimum assessment agreement would increase accordingly. It is 73 projected that 60% of the construction will be completed a year from today and 100% in two 74 years. 75 76 Economic Development Coordinator Backman reported that Medtronic has requested 95% of the 77 available tax increment, the same percentage as in the current agreement. Medtronic would 78 continue to finance their development costs up front and would receive tax increment on a pay-79 as-you -go basis at the same interest rate. Under the amended contract, fiscal disparities would be 80 paid inside the district, or B election. He advised that Ehlers & Associates, the City’s TIF 81 financial advisors, are carefully reviewing all qualified costs in a manner consistent with the 82 original agreement. Also, the length of the TIF district would remain the same at 25 years. The 83 largest single difference with a combined project would be the amount of costs allocated to 84 structured parking in Mounds View. 85 86 Economic Development Coordinator Backman explained that in return for TIF assistance, 87