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HomeMy WebLinkAbout05-09-2005PROCEEDINGS OF THE MOUNDS VIEW EDA CITY OF MOUNDS VIEW RAMSEY COUNTY, MINNESOTA Regular Meeting May 9, 2005 Mounds View City Hall 2401 Highway 10, Mounds View, MN 55112 6:00 P.M. 1. CALL MEETING TO ORDER 2. ROLL CALL: Gunn, Flaherty, Marty, Stigney and Thomas NOT PRESENT: 3. APPROVAL OF AGENDA MOTION/SECOND: Flaherty/Stigney. To Approve the May 9, 2005 Agenda as presented. Ayes – 4 Nays – 0 Motion carried. 4. PUBLIC INPUT NONE 5. APPROVAL OF MINUTES. A. EDA Minutes April 25, 2005 Commissioner Thomas had the following correction: • Page one, Item 4-Public Input; Dwayne McCarty should be Duane McCarty. City Administrator Ulrich had the following corrections: • Page 3, line 101, reads ‘the prior year was $7.5 million’; should read ‘the prior year was $1.58 million’. • Page 3, line 107/108 reads ‘tax increment would be subjected to a tax.’; should read ‘tax increment would be subjected to a cap.’ • Page 3, line 111, ranked 1st • Line 114, 115, 116: • Reads: ‘He indicated that Legislation has a proposal that would expand the districts to four or five for the construction of Phase 1 of the Medtronic project.’ • Should read: ‘He indicated that the Legislation proposes to expand the district up to four districts to accommodate the subsequent phases of Medtronic’. Mounds View EDA May 9, 2005 Regular Meeting Page 2 • Line 116: clarified that the 40-acres was previously deeded to the City not 72. • Line 124: • Answer should read: City Administrator Ulrich confirmed stating that it is possible to develop this site without tax increment. • Page 4, line 145: • Reads: ‘City Clerk/Administrator Ulrich stated that the City has spent $21,000.’ • Should read: ‘City Administrator Ulrich stated that the City has spent $221,000.’ • Page 4, line 151-152: • Reads: ‘He noted that of the 72 acres from MnDOT, 40 acres is currently transferable and they have title for the land.’ • Should read: ‘He noted that of the 72 acres, 32 acres is currently transferable and they have the title for the land.’ Commissioner Stigney had the following correction: • Page 7, Duane McCarty’s address should be 8060 Long Lake Road not 61 Lake Road. • Page 9, John McKusick’s address should be 8465 Eastwood Road not 8465 East River Road. • Page 11, George Lambrigay’s address is missing a number, show’s 811 Eastwood Road. President Marty had the following corrections: • Page 10, noted the name of a speaker was not determined. He suggested reviewing the meeting tape to determine the name of the speaker. • Page 12, line 409, Add ‘comment from the audience’ Commissioner Gunn had the following correction: • Page 8, line 334 Reads: ‘Katie Timmer stated that she The Bridges is a huge part of her life’ Should read: ‘Katie Timmers stated that The Bridges is a huge part of her life’ MOTION/SECOND: Thomas/Flaherty Approve the Minutes of April 25, 2005 as amended. Ayes – 4 Nays – 0 Abstain – 1 (Stigney) Motion carried. 6. CONSENT AGENDA NONE 7. EDA BUSINESS A. 6:05 pm. Continuation of the April 25, 2005 Public Hearing for the purpose of considering the proposed sale of land comprising The Bridges in the City of Mounds View to Medtronic, Inc. Mounds View EDA May 9, 2005 Regular Meeting Page 3 City Administrator Ulrich stated that Steve Mahle and Rodger McCombs, representatives from Medtronic, are present this evening to provide the Commission and the Residents of Mounds View with a presentation. He stated that due to time constraints the discussion on tax increment financing would be discussed at a future meeting. Steve Mahle, Executive Vice President, Medtronic, President of Cardiac Management Division, stated that he has been employed with Medtronic for the past 33 years. He provided the Commission with an overview and history of Medtronic and the cardiac management business. He explained what it means to Medtronic to be a good neighbor and provided an overview of Medtronic’s mission statement. He stated that the Cardiac Rhythm Management is the largest part of the company and is the best known due to its’ history with pacemakers. He acknowledged the question regarding their need for expansion stating that they believe, in spite of the technological advances over the years, that there are still an enormous number of patients to be treated, which means they need more people, which requires more space. He reviewed the Company growth rate noting that Medtronic has been deeply rooted in the northern suburbs for a long time and would like to remain here. He stated that Medtronic has approximately 1,755 employees currently living in the northern suburbs with an overall 25-percent from the Mounds View area. Mr. Mahle stated that Medtronic currently operates a distribution center in the City and their plan is to build one of the largest facilities Medtronic has anywhere in world. He stated that the 60- acre site would fit their needs noting that Mounds View is centrally located with access points from both 35W and Highway 10. He stated that this is the area want to stay in and plan to grow in. He noted the discussions around Mounds View and the community’s assets stating that it is their hope that Medtronic would be considered a community asset. He stated that upfront the City would get $8.65 million for the land sale with $250 million of investment activity in construction and capital purchases, with $79 million projected in property taxes over the next 25- years. He acknowledged the reality of TIF stating that they would receive .34 cents spent on the dollar and the City would receive .66 cents. He assured the Commission of Medtronic’s commitment to the community noting that they are more than a community property tax resource. He reviewed Medtronic’s mission statement, written by Earl Bakken, stating that they have a responsibility to be faithful to the communities that they live in. He stated that he is very proud of the community work Medtronic does noting that Medtronic has been blessed to be successful in their business and in turn Medtronic likes to share their success with the community. Mr. Mahle stated that in the coming year Medtronic’s total giving would be approximately $45 million through the donations of life saving products and through cash donations for various grants. He indicated that Medtronic has been voted one of the top donors in the country noting that in Minnesota Medtronic’s investments include $1 million a year for hands-on science education and $1.5 million a year for health care services, and $4 million to the Greater Twin Cities United Way. He stated that Medtronic also donates to the Minnesota Zoo and the Minnesota Orchestra. He stated that over the past twelve years Medtronic has invested $105,000 Mounds View EDA May 9, 2005 Regular Meeting Page 4 in Mounds View school programs in addition to $600,000 committed for park and recreation dedication fees. He stated that Medtronic’s Community involvement does not end with contributions noting that Medtronic employees also volunteer in various schools and mentoring programs. He acknowledged that none of these decisions are easy adding that he understands the passion and concern of the residents and their want to see their Community be successful. He referenced the passion of the people who work for Medtronic and the community they live in stating that it is a real blessing and it is his hope that Medtronic becomes a good neighbor in the City of Mounds View. Rodger McCombs, Vice President, Medtronic, stated that his organization includes real estate, construction, facility management, security and travel support noting that all of it comes to bear, in some way, to this project. He reviewed the financial elements of the project and the site plan with the Commission. He stated that they have worked closely with State, County and City officials to ensure that the site is positively developed. He stated that one item of concern that was brought up during a past public hearing was the concern regarding the wetlands. He assured the Commission that Medtronic views the wetlands area as an amenity noting that they have included wetlands as a natural amenity at other facilities as a buffer. He stated that Medtronic wants to ensure that the campus is a positive environment for both the employees and the residents of Mounds View. Mr. McCombs stated that the property to the west could be developed with park dedications fees adding that they could incorporate walking trails and park areas throughout. He acknowledged that the development would create an increase in traffic flow stating that they have worked closely with MnDOT, Ramsey County, Anoka County, Hennepin County, Shoreview and Blaine to address the traffic concerns. He reviewed traffic access points and flow with the Commission noting that this was a project that MnDOT originally was not going to address for another ten years. He stated that Medtronic endorses the plans to upgrade 35W/County Road J bridge intersection; the County Road J traffic turn lanes, Airport Road and State Highway 10 noting that the projects are fully funded at the State level. He explained that Real Estate and Construction is part of his responsibility noting that the expansion would add 300 jobs over the next two years. He stated that the new campus would generate the need for jobs to operate and provide services at the new campus in addition to the positive impact it would have for local and regional businesses. Mr. McCombs stated that Medtronic deals with the tax issues noting that the TIF calculation that was used for the Fridley Headquarters, was for $100.00 per square foot. He explained that Medtronic reached an agreement with the City of Fridley to engage a third-party mediator to come to an agreement for $109 per square foot as an appropriate charge. He explained that Medtronic pays taxes in Anoka County, Ramsey County and Hennepin County noting that the increase in the tax base would be now with an additional potential for growth. He indicated that millions of dollars are available now through the sale of land, park dedication fees, franchise fees, permits and administrative fees. He stated that the Medtronic expansion would be a great Mounds View EDA May 9, 2005 Regular Meeting Page 5 benefit to the City of Mounds View. Commissioner Flaherty asked how they arrived at the $79 million projected in property taxes. Mr. McCombs explained that this is part of the model they have been using, with the City and with Ehlers, to determine the approximate number for tax dollars. He further explained that it is based on the assessed property value over a period of time. Commissioner Thomas noted that Ehlers review provided good detail. She stated that she would like to see something available on Medtronic by the next meeting. President Marty referenced the Anoka County assessment agreement and asked if the agreement was for a finite period of time. Mr. McCombs stated that they agreed to the assessment over the next three tax periods and reviewed with the Commission. President Marty referenced Mr. Mahle’s presentation stating that the slide reviewing the dollar breakdown noting that one slide shows that $.66 goes to the City, County and Schools and another slide shows $.63 and asked which is the correct number. Mr. McCombs explained that they are working with Ehlers and the correct number, which was received from Stacie Kvilvang just prior to the meeting, is $.63. He further explained that they were not able to update the slide prior to the meeting to reflect the correct number. President Marty stated that Ehlers would be attending a future meeting to explain the different types of TIF and how it breaks down. He thanked Medtronic for their presentation and opened the floor for comments. Duane McCarty, 8060 Long Lake Road, stated hats off to Medtronic for all the good they do for the communities they live in. He acknowledged that they run a business too and provided the Council with a good historical background. He referenced the presentation made by Ehlers Associates at the last meeting noting that the City would realize, with TIF, $4.7 million in total taxes generated over a 26-year timeframe. He expressed concerns stating that Medtronic’s contribution would be locked in a TIF fund for the length of the TIF District and until the project is certified. He requested a projection of the land value for the golf course. He acknowledged that the City is in the process of contemplating the value of the property noting that their arrival on a number for the actual assessed value should be held proprietary at this time. He stated that he worked on some figures using $7,228,000 as the base property value for tax purposes. He explained that in using a conservative 3-percent gain from 2006 to 2033 the City would see a 3- percent increase and by 2033 the value of the land would be approximately $6.3 million. He stated that 3-percent is very conservative noting that for purpose of comparison he used the 3- Mounds View EDA May 9, 2005 Regular Meeting Page 6 percent inflationary that Staff used on the golf course projections. He stated that the land value, at the end, would be $16.5 million noting that with depreciation of the account, it would be free of being necessary for defraying costs by 2019 and would be able to stand on its own. He explained that his reason for bringing this up is because the numbers have been presented noting that the total value of the land and assets along with the fixed assets, would be, at a minimum, $26.2 million in equity. He stated that he is curious as to why the City of Mounds View would let this jewel slip through their fingers when the numbers from Staff show a worth of $26 million in TIF alone. Barbara Haake, 3024 County Road I, acknowledged that Medtronic is a fabulous company adding that she has a couple of questions. She noted that Medtronic has a beautiful campus located in Fridley and asked why they did not expand in Fridley. She stated that she did some of her own research on the assessment agreement with Anoka County stating that she found out that there were areas available but that Medtronic did not want to pay the square footage amount. She stated that it was her understanding that certain areas were also removed from the equation and asked if this was true. She stated that rumor has it that they were only paying $80 per square foot on the property and that Fridley could have sued. She asked for further clarification on the assessment agreement. She asked for clarification on the calculations used to determine the park dedication fees noting that the agreed amount is $600,000 and with a property valued at $8.5 million, based on the 10-percent calculation, shouldn’t the amount for park dedication fees actually be $850,000. She asked if there were legal reasons that they were not able to use the 10- percent calculations noting that other businesses had to pay a 10-percent park dedication fee. She stated that in summary she would like to know why Medtronic did not expand in Fridley; How were they able to negotiate the conference and café square footage; and how did they come up with the park dedication fee numbers. Mr. Mahle explained that there was not enough room in Fridley for the size of the facility they want to build. He stated that the initial project would be 840,000 square feet noting that they would require additional space to expand up to 1.5 million square feet. Mr. McCombs further explained that corporations have to plan for their future and Medtronic is trying to project out how best to take care of their growth over the next ten to twenty years. He stated that this move would help to address their growth needs over the next few years. He referenced the assessment agreement in Anoka stating that there are different ways used in how they calculate square footage, which was part of their discussion, through mediators, with Anoka. He stated that through these discussions both parties agreed to numbers that were deemed appropriate for that site. City Administrator Ulrich acknowledged that the park dedication is less than the 10-percent used as a standard for smaller projects. He acknowledged that there were legal issues and explained that Staff did review other Communities to help determine the percentage that would be used, on average, to determine park dedication fees in a project of this size. He stated that Staff is willing Mounds View EDA May 9, 2005 Regular Meeting Page 7 to share the information if anyone is interested in reviewing. City Attorney Riggs stated that there have been several successful legal challenges to having a specific, standard percentage identified. He stated that they have given Council more flexibility in determining fees noting that the 10-percent has been challenged successfully in a court of law. Donn Hagmann, Medtronic, indicated that the proposed park dedication fee is more than four times what they paid at the Fridley site expansion. He stated that he is not aware of another large project, like this one, that has paid 10% noting that it has probably never happened. President Marty indicated that the City Council does not have a complete consensus on this issue either. John McKusick, 8465 Eastwood Road, referenced the soil testing noting that there are still some wells in the area and asked if they have any answers on the ground soil test results. President Marty explained that they are waiting until mid-May, which is when the results would actually be available. Director Ericson stated that Staff is working with MPCA noting that the Minnesota Pollution Control Agency has indicated that the results received so far, do not show anything that would be considered an issue. He stated that they are waiting for final clarification from MPCA. Greg Belting, 1525 Sherman Lake Road, Lino Lakes, stated that he has a chiropractic office located in Mounds View and also serves on the Mounds View EDC. He acknowledged that Mary Burg and the Golf Course have done a good job for the City noting that the Medtronic project would represent the single largest economic development in the City. He stated that as a business owner, having a world leader of medical devices wanting to locate in this community is a once in a lifetime opportunity for the City. He encouraged the Commission to consider the positive options and impact this project would have for the City and its residents. President Marty closed the meeting to public comment. He stated that the City Council meeting for the City of Mounds View was scheduled to begin two minutes ago. He stated that the Commission would move to continue this discussion at the next EDA meeting in two weeks. He stated that the meeting would also include a presentation from Ehlers Associates explaining the TIF scenarios. City Administrator Ulrich suggested scheduling the continuation of this discussion on a separate night. He suggested holding the meeting at the Community Center to better accommodate the size of the group that would be in attendance. President Marty agreed that it would be a good idea to schedule the meeting on a separate night Mounds View EDA May 9, 2005 Regular Meeting Page 8 in a larger room. He stated that it would eliminate the time constraints and allow the Commission to move forward and cover as much ground as possible. He stated that he would have Staff check out the Community Center schedule noting that the meeting would probably be two to three weeks out. He stated that Staff would coordinate the dates with the Commissioners and the Community Center and update the residents on the schedule. President Marty closed the public hearing at 7:04 p.m. MOTION/SECOND: Marty/Thomas. To approve the motion to continue the public hearing to May 23, 2005 at 6:00 p.m. to allow Ehlers Associates to make presentations and to schedule a public comment meeting on a date available two weeks from May 9, 2005. Ayes –5 Nays – 0 Motion carried. 8. REPORTS NONE 9. NEXT EDA MEETING: Monday, May 23, 2005 at 6:00 p.m. 10. ADJOURNMENT President Marty adjourned the meeting at 7:09 p.m. Respectfully submitted, Recorded and transcribed by: Bonnie Sullivan TimeSaver Off Site Secretarial, Inc.