Medtronic, not Mounds View, set for a sweet deal

Home Browse Search

Medtronic, not Mounds View, set for a sweet deal http://www.twincities.com/mld/pioneerpress/news/opinion/12666353.ht... 1 of 1 9/19/2005 7:12 PM Posted on Sun, Sep. 18, 2005 Medtronic, not Mounds View, set for a sweet deal DUANE MCCARTY Your editorial (Aug. 30) about Medtronic's tax increment subsidy plan for Mounds View was implicitly similar to Medtronic's 30-second sound bite marketing of recent months. Such judgments would better serve readers of these pages had documented facts been included with the perceptibly casual observances of newsroom staff members. The Bridges Golf Course of Mounds View is now the only self-supporting recreation program in the city. Cost-estimate errors and construction mistakes doomed the golf course to a time of serious red ink. Actions by city councils preceding the current administration balanced previous golf course losses by a contract with an outdoor advertising company. Onsite billboard leases will pay off all debt and raise retained earnings to $7.5 million long before corporate tax increment refunds to Medtronic will end. For purposes of business subsidy requirements under state laws, Medtronic initially said there would be 1,500 new full-time jobs in Mounds View within two years after completion of construction. Medtronic guaranteed new positions averaging $34 an hour wage rates exclusive of benefits, or $70,000 a year. Since then the development contract was changed to allow job transfers from closing Medtronic facilities in northern suburbs, as qualifying "new" jobs in Mounds View. Medtronic broadcasts its future property tax obligation at $79 million over the next 25 years for their new cardiac rhythm headquarters. Land sales and property tax payments to Mounds View will total approximately $8 million over the same quarter century. The lion's share will return to Medtronic via tax increment refunds and business subsidies. The $14.8-million start up investment touted by Medtronic will be returned to them at 5 percent interest over time totaling nearly $32 million in tax refunds to the medical devices giant. Medtronic lobbyists, assisted by spellbound Mounds View city staffers, successfully harvested a special tax increment package from the state Legislature last session. Among other concessions, Medtronic will enjoy a whopping 37 percent refund on their property tax obligations over the next 25 years. The state will contribute $20.5 million for highway improvements needed by the Medtronic project. The 8-year limitation on economic development tax increment projects was extended to 25 years for Medtronic. Minnesota's tax increment laws as written can facilitate business growth within the state. And, when literally applied those regulations often produce favorable results. Nonetheless, it is unfortunately inevitable that some shrewd corporate facility department will succeed at end-runs around otherwise good laws. Mounds View civic leaders of past years bequeathed an admired history rich in principled reflection before legislating public policy. Mounds View was the first city in Minnesota to adopt a local wetlands protection ordinance. Our city charter includes between election powers reserved to the voters. Mounds View taxpayers needn't wait until the next election, after the damage is done, to employ sensible reform. Our city proudly carries a tradition of participatory government in the same spirit and intent that our national Constitution was first written. McCarty is a former mayor of Mounds View and opponent of the Medtronic expansion in the city. © 2005 St. Paul Pioneer Press and wire service sources. All Rights Reserved. http://www.twincities.com