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Item No: EDA 7A Meeting Date: November 28, 2005 Type of Business: Discussion Administrator Review : ____ City of Mounds View EDA Staff Report To: Mounds View Economic Development Authority From: James Ericson, Community Development Director Item Title/Subject: Review Possible Amendment to the Medtronic Contract for Private Development to Include Phase 2 Discussion: Staff has become aware of the possibility that Medtronic may be exploring options for additional office space in the metro area even before ground has been broken at the Bridges site in Mounds View. While Medtronic has many options for additional office development regionally and worldwide, staff feels that Mounds View is in a unique position to capture the additional growth demands of Medtronic years before Phase 2 had been originally contemplated. As such, the purpose of this report is to discuss the possibility with the EDA and to ascertain its willingness to explore accelerating the phasing of the Medtronic CRM office campus development to construct Phase 1 and Phase 2 concurrently. As the EDA is aware, the Medtronic CRM development was approved in three phases. Phase 1 involved construction of two eight-story office buildings totaling 820,000 square feet plus a three-level parking structure to the north. Phase 2 involves a third eight-story building of 380,000 square feet plus two additional levels to the Phase 1 parking ramp. Phase 3 represents the fourth eight-story building of approximately 300,000 square feet. In the third phase a new parking ramp would be constructed on the Blaine parcels to accommodate the additional demands. Full project buildout would likely include 6,000 Medtronic employees. During the review and consideration of the Medtronic development agreement, a concern was raised that there was no requirement or obligation for Medtronic to construct Phase 2 or Phase 3. While true, staff feels that there may be an opportunity to coordinate the immediate implementation of Phase 2 concurrent with the construction of Phase 1 due to substantial company growth as well as the amount of time it took to gain approval of the project, recognizing that Medtronic had been in negotiations with another community a full year prior to approaching the City of Mounds View. Recommendation: In summary, Staff is presenting this information to alert the EDA of the potential to coordinate an immediate development of Phase 2 of the Medtronic CRM development which would involve 380,000 addition square feet of office space and two additional levels to the parking structure. If the EDA would like to explore this opportunity, Staff would contact Medtronic officials to ascertain their space needs and construction expectations. Respectfully submitted, ________________________ James Ericson Community Development Director