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Item No: 6A Meeting Date: Feb 1, 2006 Type of Business: Business City of Mounds View Staff Report To: Mounds View Planning Commission From: James Ericson, Community Development Director Item Title/Subject: Modification to the Project Plan for the Mounds View Economic Development Project and a Modification to the Tax Increment Financing Plan for Tax Increment Financing (TIF) District No. 5 Introduction: Medtronic has decided to move forward with Phase 2 of its approved development to be constructed concurrently with Phase 1. In so doing, Medtronic has requested additional financial assistance at the same rate and terms as was provided for Phase 1. Minnesota Statutes require that a city’s planning agency review all modifications to existing TIF Project Plans to determine consistency with the municipality’s Comprehensive Plan. This requirement is similar to the requirement whereby the planning agency reports on the consistency of new TIF Districts with the Comprehensive Plan. The Planning Commission conducted such a review as recently as August 3, 2005 when it considered the creation of TIF District No. 5 to support the Medtronic CRM development. Discussion: Mounds View established Tax Increment Financing (TIF) District No. 5 last year to provide financial assistance to Medtronic consistent with special legislation adopted by the 2005 Minnesota Legislature. The development agreement entered into by and between the Economic Development Authority (EDA) and Medtronic provided $14.8 million dollars of assistance to Medtronic to construct the first phase of a three phase development which would consist of 1,500,000 square feet of office space at full build out. The amended agreement would provide for a maximum $22.9 million dollars of assistance. The original agreement provides that Medtronic may request additional TIF assistance for Phases 2 and 3 and that such assistance would not be unreasonably withheld by the Authority. At the direction of the EDA, Ehler’s and Associates prepared the financial analysis for the project modification which is attached to this report for the Commission to review. This document is essentially the same as what the Commission reviewed last year as approved by the EDA on August 22, 2005. The only changes you will see are preceded by the notation, “(As Modified February 13, 2006.)” This is the anticipated date the EDA will consider the modification. Appendix D of the Ehlers report represents the updated cash-flow of the project, adjusted for the additional $30,4000,000 in market value. In terms of what the Commission is reviewing, it must make a determination as to whether the modification is consistent with the Comprehensive Plan. In other words, is the development for which the modification is predicated consistent with the Comprehensive Plan. As the Commission is aware, the Comprehensive Plan was amended last year by changing the Future Land Use designation of the Medtronic site to “Office.” This amendment was approved at the same time that a rezoning was approved for the Medtronic CRM development which authorized 1,500,000 square feet of office space and other accessory, ancillary uses.