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Mounds View EDA January 23, 2006 Regular Meeting Page 10 should only relate to that. 382 383 Economic Development Coordinator Backman stated the question asked is why TIF is going up 384 by 50%. He presented a side-by-side comparison of Phase 1 and Phase 2, noting the qualified 385 costs in Phase 1 were $23,360,000 and Medtronic would get $14.8 million or about two-thirds. 386 He explained that Medtronic had qualified costs in excess of $23 million but will not be 387 reimbursed for all of those qualified costs. 388 389 Economic Development Coordinator Backman noted the qualified costs for combined Phases 1 390 and 2 is $46 million, which is double their qualified costs and the number one reason is 391 structured parking. He explained that a five-level structured parking facility has a substantial 392 cost. So, if you compare in terms of the qualified costs of $46 million and what will they get 393 reimbursed, the amount is $22.9 million, or less than one-half. He noted that from a percentage 394 reimbursement basis, they are going down from two-thirds to less than fifty percent. 395 396 President Marty stated he does not feel sorry for Medtronic and believes it is the EDA’s job to 397 look out for its citizens. He stated he talked to Community Development Director Ericson and 398 City Administrator Ulrich about the original agreement, noting that under Section 4.6, b, public 399 improvements, it addresses installing sewer line improvement necessary for the development 400 property and states it is estimated these improvements will cost about $400,000 and the EDA will 401 be reimbursed through available tax increment first from this district. He stated he heard the 402 argument that this will come out of the City’s five percent cap. However it does not say that, it 403 just states the City will be reimbursed from available TIF first from this district. 404 405 Economic Development Coordinator Backman explained that the EDA didn’t decide the source 406 of the $400,000. It could come from available TIF, general funds, or capital funds for the water 407 and sewer extensions. Under the proposed agreement, Medtronic will pick up 100% of that cost. 408 409 President Marty stated the way this agreement is written, in a literal translation, the City would 410 be reimbursed through available tax increment from this district. He stated the City should do 411 that and plug that into the $14.8 million and let Medtronic build Phase 2 but not use TIF, which 412 would help that district pay itself off sooner and get back on the City’s tax rolls. 413 414 Commissioner Thomas asked President Marty whether he has honestly been under the 415 assumption for the last six months that Medtronic was somehow supposed to pay the $400,000 to 416 the City and that it would come from the $4.8 million that they were paying. She asked President 417 Marty if he has been under that misassumption. 418 419 President Marty stated he figured that he would try it since it does not say otherwise. 420 421 Commissioner Thomas stated significant addendums say otherwise, that it is the City’s 422 responsibility to pay approximately $400,000 for infrastructure to the site. 423