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HomeMy WebLinkAbout04-11-2005PROCEEDINGS OF THE MOUNDS VIEW EDA CITY OF MOUNDS VIEW RAMSEY COUNTY, MINNESOTA Regular Meeting April 11, 2005 Mounds View City Hall 2401 Highway 10, Mounds View, MN 55112 6:00 P.M. 1. CALL MEETING TO ORDER 2. ROLL CALL: Stigney, Gunn, Flaherty, and Thomas NOT PRESENT: President Marty. 3. APPROVAL OF AGENDA MOTION/SECOND: Flaherty/Thomas. To Approve the April 11, 2005 Agenda as amended. Ayes –4 Nays – 0 Motion carried. 4. PUBLIC INPUT Dave Jahnke asked if they would be able to ask questions after Medtronics explained their project. Vice President Stigney stated that they could. 5. APPROVAL OF MINUTES. None. 6. CONSENT AGENDA None. 7. EDA BUSINESS A. 6:05 pm. Public Hearing for the purpose of considering the proposed sale of land comprising The Bridges in the City of Mounds View to Medtronic, Inc. Vice President Stigney asked if the public could limit their comments to three minutes apiece since there were so many citizens in attendance. He stated that this is primarily an informational Mounds View EDA April 11, 2005 Regular Meeting Page 2 meeting. Economic Development Coordinator Bachman informed that last year the Mounds View City Council considered various alternatives to operating the golf course as is, and one option included the sale and redevelopment of the site. He stated that the Council’s priority was to enhance the City’s financial position, and the debt associated with the golf course is about $4. He stated that Medtronics has indicated they would like to build a new Cardiac Rhythm Management Campus, and that the first phase involves the construction of 820,000 square feet of office space in several buildings. He stated that the City Council authorized staff to pursue various actions, including commitment research, wetland delineation study, commercial appraisal, boundary and topographic surveys, and alternative urban area-wide review process, and a comprehensive plan amendment. He indicated the sale price of the property is $8.65 million, which excludes park dedication and other customary fees. He stated that the reverter clause legislation was introduced as passed the Senate and is working its way through the House. As part of the legislative process, a payment to the Minnesota Trunk Highway Trust Fund has been negotiated with Medtronic agreeing to contribute $1 on behalf of the City. He stated that Tax Increment Financing legislation for the project has passed the Senate and awaits House action. He stated it is projected that increment generated would result in total payments to Medtronic of between $14 and $15 million over 25 years for eligible development costs. This is only 34 percent of the property taxes Medtronic will pay; the rest goes to the state. He stated that negotiations will continue with Clear Channel regarding the removal and relocation of some or all of the billboards. He stated that a traffic impact study reviewing traffic information costs and capacity analysis for the proposed Medtronic development was completed. Phase 1 development is projected to generate 8,300 vehicle trips a day onto County Road J. Ramsey County will be taking the lead in the road improvements and is currently preparing an RFP for design work. He stated that Governor Pawlenty signed the state bonding bill this afternoon, and appropriations are in the bill to provide funds to improve County Road J and other roads impacted by Medtronic and other developments in Blaine and Shoreview. He stated that the Mounds View EDC supports the redevelopment of the Bridges and ranks the Medtronic campus as the number one economic development priority, the reason being that private industry represents the engine of economic development. Business creates services, products, income, employment, and tax base. He stated that Medtronic is a solid business, and last year its sales grew 16 percent. He stated the office complex would be Medtronic’s largest in the world, and it would pay its employees an average of $70,000 per year for high quality jobs. He stated that the City’s proposed assistance as outlined in the handout is commensurate with Medtronic’s capital investment, job creation and wages. David Etzwiler, Senior Director of Government Affairs for Medtronic, stated that Medtronic is a company providing long life solutions for the treatment of chronic disease. He stated their roots were in the treatment of heart disease, but in the last five to six years the company has significantly diversified. He stated that Medtronic has 33,000 employees world-wide and does business in 120 different countries. He stated there are approximately 6,800 employees in Mounds View EDA April 11, 2005 Regular Meeting Page 3 Minnesota, and they are adding approximately 300 employees a year in Minnesota. He stated that Medtronic has been named on Fortune’s list of employer benefits six times and has been named one of Fortune’s 100 most admired companies seven times, including the latest listing. In addition, Business Week recently named Medtronic’s Board of Directors one of the ten best boards in corporate America. He stated Medtronic is proud of the work they do in the community, and they are a founding member of the Med Keystone Program and provide 2 percent of their domestic pre-tax dollars back to the community in the form of philanthropy. He stated that the master plan for the Mounds View site is to provide 1.5 million square feet in the future. He stated that accounting, sales, education, legal, marketing, and research and development jobs would be housed in the facility. He stated that the reasons for wanting to build in Mounds View are its central location and transportation options. Vice President Stigney opened the public hearing. He stated that written comments could be given to staff. John McKusic, 8465 East River Road, stated he has been in Mounds View for 30 years, and he is against Medtronic and for the golf course. He stated there are other locations that Medtronic would choose, and he questioned how many Mounds View residents would be working there. He stated that the golf course is a good asset for the youth. He stated that by the time all this money is spent to get Medtronic in there, all of that money could have gone toward the golf course. He stated that as soon as Medtronic located in Fridley, a lawsuit had started because they wanted to cut down their square foot costs, so he didn’t think this was a good deal. Nyle Rolfer, 7945 Long Lake Road, stated he has been a resident for 44 years, and he is not in favor of giving Medtronic money. He stated he paid for his own sewer over 20 years. He stated he didn’t know if anyone had seen the paper that was floating around, and he didn’t know if it was true or not. Council Member Stigney stated the Commission wanted questions regarding the Medtronic’s proposal rather than reading something that may not be factual. Mr. Rolfer asked what percentage of the buildings in Mounds View are TIF financed. Council Member Stigney asked whether he had any questions that were relevant to Medtronic. Mr. Rolfer stated that the golf course is about the only thing left in the city. He stated there are thousands of acres if you drive up 35W and turn off on Lexington. Mr. Rolfer submitted a piece of paper to the Commission. Duane McCarty, 8060 Long Lake Road, stated that Minnesota is very fortunate to have Medtronic in the state, and they are one of the premier companies in the entire country. He stated Mounds View EDA April 11, 2005 Regular Meeting Page 4 an important part of the discussion is that this hearing is to get information to the Council, and for the Council to take some time to look that over, and not to make a hard and fast decision this evening. He stated that he is opposed to TIF, and in his eight years as mayor, he didn’t do a single TIF. He stated that at one time TIF served a good purpose and was necessary for economic development. He stated that Mounds View’s TIF percentage of commercial industrial is one of the highest in the Twin City area, and that means they are pre-empting tax revenue from not only the city, but other districts as well, and in particular the school district. He stated the Council should get input from the School Board on how TIF affects their operations. He stated that the franchise fee issue is quite a debate at the legislature at this time, and he had read that the applicant is willing to pay the franchise fee. He stated that the label of fees is on its last days. He stated the taxpayers and many of our representatives in the legislature at this time are working very hard to make sure that taxation is not only fair, but it’s up front where everybody can see it, so he wouldn’t count on the franchise fee. He asked the Council to slow down a little bit, and step back and take a harder look. He submitted some written comments to the Commission. Economic Development Coordinator stated that the water and sewer would be connected to the city utilities from the south under Highway 10, and there would be a franchise fee generated from that. He stated that currently the whole property is tax exempt right now, and there would be a base that would generate revenues, and that base would be approximately $8 million. Kevin Griffin, 8161 Red Oak Court, stated he has been a resident since 1988, and he stated he is in support of the golf course. He stated he owns an underground construction company, and he brings clients to the course and frequents the restaurants in Mounds View. He cautioned the Council to exercise caution on committing any type of tax incentives for this project or any type of project, especially to insure that there are guarantees or security in place that that type of funding will be recovered in the future. He encouraged the Commission to pursue other alternatives to reduce the debt of the golf course. Greg Holee, 8192 Groveland Road, stated he is an admirer of Medtronic, but he and his wife are golfers, and he thinks it’s a wonderful amenity. He stated it’s a nationally recognized facility, and awards have been won for the youth development. He stated it would be a huge sense of loss for the community to lose that facility. Cindy Carlson, 2215 Kenwood Court, Maplewood, stated she is in favor of the proposed acquisition by Medtronic. She stated she has participated in golfing at the Bridges, but she feels it’s a tremendous opportunity to sell this property to Medtronic. She stated that not only is Medtronic involved in a lot of different philanthropic activities that benefit the state and many of the residents, but they also participate very actively in the community through the Twin Cities North Area Chamber of Commerce in various committees on the Board of Directors and in various fundraisers. Dan Hall, 12860 Lever St, Blaine, stated that he has been operating the Mermaid in Mounds Mounds View EDA April 11, 2005 Regular Meeting Page 5 View since 1972 and lived in Mounds View for 11 years. He stated the Medtronic has been a customer of his for over 20 years. He stated that the image of having Medtronic in Mounds View would be good for the community. He stated he is planning a hotel addition because of Medtronic moving in. He stated if it wasn’t for the golf course, Mounds View might not have a 4 percent franchise fee that everyone is paying right now. He stated that the gas utilities for the Mermaid alone is $150,000, and 3 percent of that goes to the franchise fee for NSP. He stated that bringing Medtronic in is going to be worth over $100 million to the tax base, even if 35 percent of it is being paid by TIF over a 25-year period of time. He stated that that leaves $75 million worth that is going to be entering the tax base that is going to be paying the school district, going to taxation, and that might even put a separate coffer in for new roads to be built in Mounds View. He stated he would stand behind Medtronic coming in 100 percent. Tim Mazzoni, 1520 – 23rd Avenue NW, New Brighton, stated he is a retired professor from the University of Minnesota, College of Education, Human Development, and he wanted to speak for the kids in the area who find that golf course to be a wonderful opportunity involving skills, attitude, and behavior, which are attributes prized by adults. He stated the youth program there has been recognized at the state and national levels, and it works for the youth. He applauded Medtronic for the kind of company it is, but there will be thousands of youth using the golf course in the future. Shannon Meyer, 11363 Fergus St., Blaine, stated she is the President of the Twin Cities North Area Chamber of Commerce, and she felt that as far as economic development, the Medtronic facility would not just bring a business to the community, but it would enhance the local communities with increased traffic, and it would increase the number of students attending the schools. She stated there are many positives for the golf course as well, but they need to focus on the fact that there are numerous golf courses, including the golf course in Blaine and the National Youth Golf Course, which was specifically built for children. She encouraged the Council to look at the Medtronic site as a wonderful asset to the community. Tom Field, 8409 Knollwood Drive, stated he is in support of pursuing investigation of the Medtronic sale. He stated property taxes had increased 25 and 30 percent in the past two years, and they need to bring some businesses back to Mounds View. Dave Jahnke, 8428 Eastwood Road, stated he is in favor of Medtronic because it’s a good company, and it is a clean business. He asked what the survey result was. Vice President Stigney stated that the survey result showed 63 percent of the people supported development of Medtronic. Mr. Jahnke stated that Medtronic doesn’t depend on the weather, and the golf course is over $4 million in debt to the city. He stated that Medtronic would be a very solid investment, and he wouldn’t foresee them not making money. Mounds View EDA April 11, 2005 Regular Meeting Page 6 Valerie Amundson, 3048 Woodale Drive, stated she has lived in Mounds View for 27 years and was concerned with property taxes. She stated that even before starting the road projects, they are already being taxed more than any of the neighboring cities in Ramsey County. She stated that new employees at the Medtronic facility won’t necessarily want to live in Mounds View. She asked the Council to look at the numbers carefully. She stated Medtronic is a great business, and she applauded them for the work they do, but they need to not price the Mounds View residents out of being able to afford to live in the city. She stated that TIF financing may not be the greatest thing for the residents and their property taxes. Vice President Stigney stated he appreciated her comments, and they were looking at trying to lower the taxes, and that is why they are looking at Medtronic. Mary Burg, 224 Heritage Lane, New Brighton, stated she works at the Bridges Golf Course. Vice President Stigney asked whether she was representing herself as an individual or as an employee of the City or as a resident of New Brighton. Ms. Burg stated she is representing herself and as an employee. She stated that some of the numbers that were quoted are inaccurate. Vice President Stigney stated that no figures have been presented on the golf course. Ms. Burg stated that she was going to comment on Mr. Jahnke’s numbers that he was quoting from the survey, and he had mentioned that 63 percent had wanted the golf course to go away. She stated it needs to be said that it was in the survey that if the golf course had to be supported by the General Fund, would you want it to go away. She stated as an employee of the golf course, she didn’t think that was acceptable to accept that the General Fund would support that amenity, and that isn’t what is being proposed in any way, shape, or form. Vice President Stigney stated that the question on the survey is not something they are discussing tonight. Ms. Burg stated that Mr. Jahnke was not cut off when he talked about it. Vice President Stigney stated that Mr. Jahnke was speaking about the overall debt of the golf course. Ms. Burg stated that half of the people would like to see the golf course go away if it costs them money, and the other half said they would prefer to keep the golf course. Vice President Stigney stated that there are three questions on there, and two questions said 63 Mounds View EDA April 11, 2005 Regular Meeting Page 7 percent of the people wished to have the Mounds View golf course redevelop or sold for redevelopment. He stated that when she is correcting figures, he understands what she is doing, but that’s a different question altogether. He asked if she had a comment that was germane to the Medtronic development. Ms. Burg stated that she would like to see the City do a cost benefit analysis of the two projects because she has not seen them. Vice President Stigney stated that they haven’t either, and it’s in the process, and they will all see if before they take any action. He stated that wanted to bring people up to date on the status of where they are on the proposed Medtronic development, and they don’t have all the answers in. He stated when they are here, they’ll probably do a continuation to April 25th, by that time they’ll have more information available. Jerry Kahn, 2833 Crestway Drive, stated that he supports the golf course. He stated that once that land is gone, he is not aware of any other developable land in Mounds View available for a golf course. He stated that the City of Mounds View needs it for their families and children. Brian Amundson, 3448 Woodale Drive, asked if someone could clarify how much of the property the City or the EDA is seeking to put into TIF, if any of it. Economic Development Coordinator Backman stated that 72 acres would be in the TIF district. Mr. Amundson asked if that was the entire property, and Coordinator Backman stated that it was. Mr. Amundson stated that that will add 23 percent of the total property that is currently in TIF. Economic Development Coordinator Backman stated it might change it 2 percent. He stated that you have to bear in mind that they are talking about the value as well, and that value right now is about $8 million for base value. He stated that in addition, last summer they decertified 80 parcels, so they are in the process of putting some of the parcels back onto the tax rolls. Mr. Amundson asked if the projected tax base value of $2 million is net to the city over five years. Economic Development Coordinator Backman stated it would be approximately $4 million over 25 years, $2 million net present value. Mr. Amundson asked if from a financial standpoint when calculating the benefit of Medtronics moving into the City it was $4 million. Economic Development Coordinator Backman stated there is much more than that. He stated Mounds View EDA April 11, 2005 Regular Meeting Page 8 they are talking again the base value, so right now there is nothing, and it’s tax exempt. He stated that normally when there is a property that is taxable and it goes to tax to a TIF situation, there is base, and it goes up from there. He stated in this case it’s zero right now, so there will be $8 million that will have a base value, and that will generate about $150,000-$160,000 a year in taxes for various jurisdictions, but there are other things beyond that, but that is an example of one element. Mr. Amundson asked if that $160,000 is already in the $4 million net to the City, and Coordinator Backman stated that that was correct. Mr. Amundson asked if the net was $4 million of benefit to the City, and Coordinator Backman stated that that was correct for that piece. Mr. Amundson gave some written comments to the Commission from Barb Haake. Gary Nordness, 55 Dierdel Circle, North Oaks, stated he was in favor of Medtronic. He stated he was very familiar with tax increment financing. He stated that from other areas that he’s worked with TIF before, traditionally there is some additional tax value on the appreciation of the structure. He stated that if it is, they are going to go from a zero tax base to a significant tax base, and they will be utilizing the property to its highest and best use. He stated they would be bringing in one of the most renown companies in the world, and he didn’t know why they wouldn’t do it. Vice President Stigney closed the public hearing. MOTION/SECOND. Gunn/Flaherty. To continue the public hearing to the next EDA meeting on April 25, 2005. Ayes-4 Nays-0 Motion carried. 8. REPORTS None. 9. NEXT EDA MEETING: Monday, April 25, 2005. 10. ADJOURNMENT Vice President Stigney adjourned the meeting at 6:55 p.m. Respectfully submitted, Mounds View EDA April 11, 2005 Regular Meeting Page 9 Recorded and transcribed by: Sheree Theobald TimeSaver Off Site Secretarial, Inc.