Minutes - 2005/08/22 - Laserfiche WebLink

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Mounds View City Council August 22, 2005 Regular Meeting Page 26 Mr. Amundsen asked when the City starts paying interest on the $14.8 million. Mr. Inman explained that Medtronic is required to provide documentation that the dollars have been spent. Once that is established, the payments will start in the first calendar year afterwards. Mr. Amundsen asked if interest payment will be paid on the full $14.8 million. Mr. Inman answered in the affirmative. Mr. Amundsen noted that the first year when there is a lower properly value, the City will be paying $750,000 of interest to Medtronic. Mr. Inman stated the City will only pay an amount equal to 95% of the annual tax increment. So, if it takes them three years, the amount they eventually will get will be less. Mr. Amundsen asked where the funds come from to pay the interest. Mr. Inman stated typically the developer carries some of that interest within their own performa or it is part of their overall financing of the $100 million. Mr. Amundsen asked where the funding comes from to pay the interest. Mr. Inman stated it comes from available tax increment and if it is not available, they don't get it. Director Ericson explained that there have been TIF accounts in the past where the developer never received the principal back. • Mayor Marty stated if only the interest is paid, the District could last longer. Director Ericson stated staff and the financial advisors firmly believe this District will pay off early. Mayor Marty noted that by Ehler's reports, the projected interest is $16,947,000 so the project cost total with interest and all qualifying TIF expenses runs roughly $32,700,000. Mr. Inman noted by contract the City has limited the pay-as-you-go note to $14,800,000 so these numbers are high because they were based on a higher estimate. He explained they were trying to give the City the most flexibility. Mayor Marty closed the Public Hearing at 11:21 p.m. Mayor Marty stated there was a lengthy discussion about this at the EDA meeting. MOTION/SECOND. Stigney/Thomas. To waive the reading and adopt Resolution 6594A Approving the Removal of Certain Parcels from the EDA's Tax Increment Financing District No. 3, not to include Sysco Outlot A, Pin #OS-30-23-22-0004, which would remain. Ayes-4 Nay-1 (Marty) Motion carried. • MOTION/SECOND. Thomas/Gunn. To waive the reading and adopt Resolution 6594B, a Resolution Approving the Tax Increment Financing Plan Establishing Tax Increment Finance