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HomeMy WebLinkAbout06-27-2005PROCEEDINGS OF THE MOUNDS VIEW EDA CITY OF MOUNDS VIEW RAMSEY COUNTY, MINNESOTA Regular Meeting June 27, 2005 Mounds View City Hall 2401 Highway 10, Mounds View, MN 55112 6:05 P.M. 1. CALL MEETING TO ORDER 2. ROLL CALL: President Marty, Vice President Stigney, Commissioner Flaherty, Commissioner Gunn, and Commissioner Thomas NOT PRESENT: 3. APPROVAL OF AGENDA MOTION/SECOND: Gunn/Flaherty. To Approve the June 27, 2005 Agenda as presented. Ayes – 5 Nays – 0 Motion carried. 4. PUBLIC INPUT Barbara Haake, 3024 County Road I, referenced Items 7A and 7B on the agenda and asked that the Commissioners give at least three reasons for the way they vote on each item. 5. APPROVAL OF MINUTES. A. EDA Minutes June 13, 2005 The June 13, 2005 EDA Minutes will be presented at the July 11, 2005 EDA Meeting 6. CONSENT AGENDA A. Resolution 05-EDA-203 Approving the Proposed Sale of Land comprising the Bridges of Mounds View Golf Course; and approving the Development Proposal and Terms of the Purchase Agreement and Contract for Private Development. Aaron Backman, Economic Development Coordinator, stated that since last summer the Mounds View Economic Development Authority and the City Council have authorized Staff to undertake various steps regarding the golf course redevelopment and Medtronic project including a Wetlands Delineation Study, a commercial appraisal, an Alternative Urban Areawide Review, Mounds View EDA June 27, 2005 Regular Meeting Page 2 (AUAR), a boundary and topographic survey and pursuing a Comprehensive Plan amendment. He stated that at the end of December 2004 Medtronic presented City Council with a preliminary term sheet concerning the acquisition and redevelopment of The Bridges. He stated that as a result of City Council’s consideration of the offer Council directed Staff to continue to proceed with negotiations with Medtronic and to pursue a course of action consistent with potentially selling The Bridges for redevelopment. Mr. Backman explained that the term sheet indicated that the Mounds View EDA would seek special TIF legislation that would permit a 25-year TIF Districts. He further explained that the term sheet indicated that the City would contact Clear Channel to arrange for the removal of the billboards noting that two of the five Executive Sessions held by the EDA were to discuss negotiations with Clear Channel. He stated that they came to agreement with Clear Channel by mid-June. Mr. Backman stated that the development proposal, including the terms, the purchase agreement and contract for private development, are included in the packet for their review adding that this document was provided to the attendees at the public hearing held last Monday, June 20, 2005. He explained that under the proposed agreement Medtronic is paying $8.65 million to acquire the property from the City and contributing $1 million to the State Highway Fund for the reverter clause federal interest. He stated that the company would also pay the City $865,000 in park dedication fees, $670,000 for compensation pertaining to the billboard signs, to cover the city administration costs and the customary permit construction fees. He stated that the City expects to net over $5 million from the sale at closing and after the golf course debt is paid off. He stated that Ehlers and Associates, the City’s TIF financial advisor, has done a comparison of the ‘as is’ model with the Medtronic model noting that they have projected that the fund balance, as of December 31, 2033, would be approximately $7.5 million for the ‘as is’ model and $19.4 million for the Medtronic model. He noted that a graph is included with the report adding that when the models are graphed it is clear that the City is better off financially every year after the course is sold to Medtronic for the life of the proposed TIF District. He stated that the economic impacts of the project are profound for both the City and surrounding areas. He explained that it would increase the city’s tax base by 8-percent in Phase 1 and would leverage $20.5 million in State funds to reconstruct and upgrade area roads, which are used by both area residents and businesses. He stated that the city would benefit from having a premier company that is willing to spend well over $100 million in private investments in this City and garners a business partner interested in the community’s future including its’ schools. Mr. Backman indicated that there are other alternatives available noting that each of those alternatives have a greater level of risk than the current proposal adding that the long-term tax- base impact would also be less. He stated that given the positive impacts of this proposal it is recommended that the Mounds View Economic Development Authority adopt Resolution 05- EDA-203. Mounds View EDA June 27, 2005 Regular Meeting Page 3 President Marty referenced page five of the report noting that it states The Bridges AUAR authorized by the City reviewed all transportation issues related to the proposed development of the site. He stated that as he read through the AUAR a question was raised as to what kind of traffic impacts this could have on the City. He stated that he believes it was stated this aspect of it was not really looked at or addressed. He stated that they are looking at County Road J, 35W, Highway 10 and Airport Road noting that the actual traffic impacts to the City south of Highway 10, if recalls, was not addressed in the AUAR. Mr. Backman explained that the AUAR focused on the site itself to determine how the traffic patterns are currently, and how they would proceed if there were a development on the site. He explained that it was determined that most of the traffic would be in terms of Highway 10 and 35W. He acknowledged that there was not traffic counts down south of the Highway 10. President Marty referenced the June 20th Public Hearing stating that this issue was expressed as a major concern by many of the residents. He stated that he too is very concerned as to the impact the additional traffic would have on the city adding that this aspect should be addressed. President Marty referenced page eleven, Item 3A, states retention, relocation, termination\acquisition of billboards leaseholds, noted five lines down it states that Clear Channel would pay the city $15,000 annually for each sign for years 1 to 10; $20,000 for each sign for years 11 to 20; $35,000 for each sign for years 21 to 30. He stated that it was his understanding that Clear Channel could walk at any time from the current agreement noting that if this is the potential why does it appear to be bottom –loaded. City Attorney Riggs confirmed that they did discuss the contents of the existing leases between the City and Clear Channel. He explained that it is not an issue that they could possibly walk without the City or EDA having a remedy. He assured the Commission that they would clearly have options noting that the bottom line is that the leases that exist now are valid and would continue on. He stated that any other lease they would have moving forward would be the same. He stated that any lessee could abandon the leased interest noting that this does not mean that the City does not have remedies available that could be pursued. He noted that the present lease does have this included, as would any other lease the city would enter into. President Marty clarified that his concern is that he could see how they could have more of a tendency to walk if they are paying $250,000 per year versus $35,000 per sign. Carol Mueller, 8343 Groveland Road, stated that she has been praying for the city regarding this decision. She stated that she is praying that certain individuals on the Council would not have to be reminded of their responsibility and their ethics. She stated that ethics is the best word she can use in regards to this noting that if she worked for a company that was going to receive a benefit from the sale of a property, whether or not the benefit would trickle down to her level or not, she would exclude herself from the vote. She stated that if she had a relative working for the Mounds View EDA June 27, 2005 Regular Meeting Page 4 company and working as a part of the negotiation team, she would also exclude herself from the vote. She recalled several years ago it was brought before the residents of Mounds View to vote on the whether they wanted to establish a golf course on this property. She stated that as she recalled the residents of Mounds View wanted the golf course and also took into account that it would take a few years to become profitable and were ok with this. She stated that it is her hope that with good ethics one would let all of the residents in this community have all of the facts and put it to a vote. She acknowledged that the pressure is on, with all of the groundwork that has already been laid, to get through this quickly to break ground in time. She expressed concerns stating that sometimes there is a rush to action that might not be the right action. She stated that she is praying that we all do the right thing. She stated that she is very interested in Mr. Backman’s statement was a $20.5 million allocation to improve area roads. She asked for clarification noting that it is her belief that the dollars are specifically earmarked for the County Road J/35W interchange and the improvement of that access from County Road J to the freeway. She clarified that it was her understanding from what was said at the public hearing that the only improvements to County Road J would be the striping and widening the turn area at the turn signal light near Sysco. Mr. Backman clarified that the $20.5 does include substantial improvements along County Road J noting that they have to reconstruct and widen it. He stated that they have to have turning lanes at various points noting that the way the legislation is written there is more than one pot of money. He stated that there is a $5 million allocation in the redevelopment account written specifically to the City of Mounds View for public improvements. He stated that there is another allocation for biosciences noting that it indicates there should be public improvements and does not specifically state that they cannot improve County Road J or the turning lanes. He stated that it is actually fairly broad. Ms. Mueller stated that it is good to know that there is a $5 million allocation in the redevelopment fund for County Road J. She stated she has a neighbor on Sherwood Road who has been talking about potholes on his street for a long time adding that there are a lot of potholes on her street too. She stated that she is very concerned about the proposed increase in traffic noting that people will not take the major routes to get to the existing proposed sale property. She stated that they would take the back roads adding that currently they already have troubles controlling the speed on these roads. She expressed concerns stating that she feels the city is selling the property way too cheaply and not getting the best bang for its buck. She stated that the voters should be given the opportunity to put out their opinion on this. She expressed concerns stating that the telephone survey did not canvas enough of the residents. She stated that one of the questions asked on the survey was whether the residents would be in favor of keeping the golf course if it were able to hold its own noting that the response was 39-percent were in favor of keeping the golf course if it was self-sufficient and 32-percent were in favor of selling. She stated that all things considered they should take time to review everything again, consider the ethics and get it to the people. Mounds View EDA June 27, 2005 Regular Meeting Page 5 Dan Hall, 2200 Highway 10, suggested that everyone should back up a bit. He noted that one of the reasons this whole problem with golf course is being discussed is because it is currently losing money. He further clarified that the main focus for the city right now is to review various avenues to increase revenue for the city without raising taxes. He stated that they are all aware that there are no streets currently in the City of Mounds View that are worthy of being fixed, they should be replaced. He stated that it is his understanding that they are talking about a potential addition of $5 million that could be used that is not even part of the overall profit that would be made from the sale of the golf course after all debts have been paid. He stated that it is his understanding that this would be in addition to the approximate $5 million from the sale to equal $10 million that could be used at the City’s discretion for street improvements. President Marty asked Mr. Hall where he came up with the additional $5 million. Mr. Hall stated that Mr. Backman was just discussing it. Mr. Backman clarified the bonding bill stating that while there is a lot of latitude on the bonding bill it is clear with all parties that the funds are to be used for the County Road J reconstruction. Mr. Hall stated that the big thing they are doing is trying to determine what is best for the City of Mounds View. He expressed concerns stating that the city is not currently in a moneymaking situation they are in a money-losing situation. He indicated that he has discussed this issue with many individuals and it is his understanding that the word is that once real numbers are made available, in black and white, a decision can then be made based on what is in the best interest for the City of Mounds View. He stated that he has also discussed this issue with Ehlers noting that after that conversation he felt very good about the money spent for Ehlers and the work they have done. He stated that people could try to say it is misleading adding that if there is anything misleading with Ehlers it’s the 3-percent gross they used on the growth period. He stated that it appears to be very clear that this is an overwhelming and substantial bonus for the City of Mounds View and urged the Commission to do what is best for the City now and for thirty years from now. Bob Glazer, 2625 Hillview Road, stated that he would like to comment on the 3000 jobs being created in Mounds View. He stated that it is his understanding that Medtronic would be closing six facilities and the employees would transfer from the closed facilities to the Mounds View location and the net increase would be zero except for the growth projection of 300 jobs per year. He stated that he wants it to be clear that this would bring 300 new jobs not 3000. President Marty further clarified that it would be 3000 existing positions that would be new to Mounds View and confirmed that they are not creating 3000 new jobs. Jon McKusick, 8465 Eastwood Road, referenced an article from the Pioneer Press that states approximately $24 million TIF money is expected to be spent on this project and another $11 Mounds View EDA June 27, 2005 Regular Meeting Page 6 million is expected to be spent to purchase the property in Blaine, Pomps Tire and Blaine Brothers property, for their parking lot. He asked why the City of Blaine wouldn’t be doing this and why is Mounds View giving money to Medtronic to purchase this property. Mr. Backman clarified stating that the $24 million figure should actually be $14.8 million, which is the agreed upon amount for TIF. He stated that to make the project doable and to accommodate the campus they are looking at acquiring some properties located in Blaine. He stated that the buildings would be built in Mounds View and the parking lots would be created on property that is actually located in Blaine. City Administrator Ulrich further clarified that the $24 million was their total TIF eligible expenses and they are only being reimbursed $14.8 million per the proposed agreement. He stated that Mounds View expenditures would come off the top of that and noted that at the bottom of all that is the $11 million of land in Blaine but the remaining $24 million expenditures would be Mounds View generated expenditures. He stated that because this development is located on a border and could potentially impact two Counties and three Cities, special legislation was put into place that allows the expenditures generated within this district to be spent outside of the district. Commissioner Thomas further clarified that Medtronic gets $14.8 million from the tax district. She stated that they have over $24 million that they can use the money on but have to use all of the money in Mounds View first and then they can use it on anything they have above that. She assured the residents that they would never get the opportunity to use the increment dollars in Blaine because there won’t be anything left. Valerie Amundsen, 3048 Wooddale Drive, stated that while reviewing city policies on the city website she came across a section relating to the use of business subsidies under the General Policy section that states that business subsidies should not be used for projects that would place an extraordinary demand on the city infrastructure and services. She stated this causes her some concern noting that last Monday it was stated that there would be an additional cost of $80,000 for the city in order to have this large business located on City land. She stated that it is very naïve to think that the city costs would only be this much when considering police and fire services. She asked the Commission to take a step back and review the costs. She stated that her main concern is that the main discussion about this has not been happening in a public forum due to negotiations. She stated that if they are making any decisions tonight she wants to see them discuss, intensely, all of the issues brought up by the residents. She stated that she wants to feel that all five of the Commissioners understand all of the issues that this project entails. She stated that she does not feel that the residents have seen them really engage noting that this is a huge issue and impact on this City. She stated that she wants to go home really feeling that the Commission has really discussed all of the issues and have all the answers. She stated that all questions should be answered and if not they should table it until they do have all the answers. She stated that she would also like to know the reasons behind each of their votes. Mounds View EDA June 27, 2005 Regular Meeting Page 7 Brian Amundsen, 3048 Wooddale Drive, stated that he would like to discuss this evening whether this is the right. He stated that he is here to ask the Commission to deny this resolution and the multiple parts of the resolution. He stated that things should be taken in their piece parts and in order. He stated that he does not understand how the EDA has the authority to do something, which the City has the unique authority to do. He asked if it is right that the Council and the EDA had conversations for six months out of the sight and earshot of the public so that the public conversation was delayed because it was unknown what the conversations were. He asked if it is right that Council and EDA have only had analysis about one project with the City income with the level of detail presented to the public and has not pursued the same level of detail for the other options. He asked if it is right to use private negotiations for public property when a public auction with full disclosure and open bidding allows the public to see the total results and the real interests of any other parties, plus it doesn’t create a veil over what is occurring. He clarified his understanding that Minnesota’s Open Meeting Law is intended to ensure full public disclosure and participation in matters that seriously affect the city and questioned whether this meeting law has been skirted. He suggested that a public auction would remove the sense of conspiracy or private deals and it would allow the public into the discourse. He asked if it is right to allow an issue this large to be decided by five duly elected officials when there are so many strong and diverse opinions noting that elections have been used in the past to make decisions that did not have as large of an impact on the city. He referenced the finances and asked if it is right to use TIF for redevelopment, a tool originally intended for developing housing and businesses that need assistance to grow jobs and to replace structurally unsafe buildings or abandoned buildings or unused tank facilities. He asked if it right to use this tool in order to give a business a tax break because it is a large State employer. He asked if it is right to give TIF, according to an email received from Senator Betzold, that states that it seemed right for the City of New Brighton so it seemed right for the City of Mounds View. He asked if it is right to allow an employer to change the rules by going to the legislature, their local Senator and Representative, to offer modifying language to include a one time public golf course, which they desire to change. He asked if negotiation with only one party pass the fiduciary responsibility test and is it right to put big business desires ahead of individual citizen property rights. Is it right to take citizen property and give it to business and have no appreciable benefit to the citizens for over a quarter of a century. He asked if it is right to sell a major asset of the city and only get a $43,000 in property tax with a projected $80,000 cost to the city for services. He asked if it is right to change the quality of life issues for citizens when there is no benefit to the city except for a dollar off the city taxes. He asked if it is right to undertake more turmoil in moving the Clear Channel boards when that issue was finally settled. He stated that on the issue of right or wrong, leadership is about seeing right and wrong, and even if all the pressure from business, significant business people and business citizens, and political leaders, is to lean towards the wrong decision because others do it all the time and that is what’s done. He stated that a leader sees what’s right and what’s wrong and makes the right choice to protect the citizens and the right decision to not give in to pressures from companies that have the financial means but won’t commit to do what is right and not take advantage of anyone. He stated that Mounds View EDA June 27, 2005 Regular Meeting Page 8 companies are in the business of making profits for its shareholders but does it with respect for those it interacts with or it is not doing it honestly or with good intentions. He stated that a company that knows a property is worth more than it is offering and asks for financial aid when it has the financial means to do it without is simply taking advantage because of its size. He stated that in the sandbox this is referred to as a bully, someone who uses their strength to bully their way rather than be willing to compromise so that everyone involved is in a win-win situation. He stated that his question to them is whether they are making the right or wrong choice. He stated that Medtronic is the wrong choice because they are doing it with the wrong tool, which they insist on. He thanked the Commission for their time. Duane McCarty, 8060 Long Lake Road, referenced Item 7a, stating that he placed inserts in the interest of clarity. He clarified that the preliminary term sheet is the document that was presented to the City by Medtronic. He referenced the development proposal, terms of purchase agreement and contract for private development and asked if this is what they are talking about in terms of the preliminary terms sheet. Commissioner Thomas stated that this is not the preliminary terms sheet. She explained that the preliminary term sheet is referring to what was given to the Commission at the end of the December when they began discussing whether they wanted to enter into negotiations with Medtronic. Mr. McCarty referenced the concept and asked if this is the development proposal in terms of purchase and contract. Mr. Backman confirmed. Mr. McCarty asked if the Commission is being asked to endorse the concept in the resolution. He asked if what they are approving is the first offering from Medtronic. Commissioner Gunn clarified that this is not their first offering noting that they have worked very hard throughout this process. Mr. McCarty stated that this is not hard work on their part noting that he knows they are more capable of this. He noted that Commissioner Gunn is far more capable noting that this agreement is what the citizens are upset about. Mr. McCarty referenced the potential later phases of the project and asked if this means Phase 2 and 3. Mr. Backman assured Mr. McCarty that the EDA has worked hard on this noting that they have had 8 Executive Sessions to discuss both the development agreement and the Clear Channel negotiations. He stated that they have provided significant input throughout the process. President Marty called a recess at 6:50 p.m. due to bad weather conditions. Mounds View EDA June 27, 2005 Regular Meeting Page 9 President Marty called the meeting back to order at 7:05 p.m. Mr. McCarty referenced the park dedication fee, he stated that he understands that the agreement states that the park dedication fee would be calculated on the basis of $8.6 million paid by Medtronic and that they would pay the balance of $1 million to the State Highway Fund in favor of the city. He stated that the bill that was passed under Minnesota Statutes that authorized this special legislation is that the Commissioner of Transportation shall convey to the City of Mounds View all right and title and the City shall pay the Commissioner $1 million. He expressed concerns stating that they are being offered $8.6 and the City is paying an additional $1 million to clear the land and get clear title, which is a cost to the City of $9.6 and respectfully submitted that the park dedication fee should be $965,000 and would reflect the total cost of the land to the city and the transfer over, if this project is accepted as presented. Mr. McCarty noted that there was information presented from staff outlining several options noting that he would like to address the last option on the $7.2 million the City would end up with in the end. He referenced the ‘as is’ investment option stating that this was not mentioned and noted that if they were to keep the property ‘as is’ for the same term, projecting it on a 3- percent per annum gain, based on its current value, the property would be worth $16.5 million. He stated that the Finance department has projected an ending cash balance of $9.6 million for a total of $26 million. He stated that this is a great deal more than the $17 million cited in the document. Mr. McCarty referenced the issue of selling the property noting Section 2.02 of the City Charter, Boards and Commission, states that there would be no separate boards of administration powers in the City of Mounds View and the Council would act as such in all cases accepting that they may appoint advisory commissions to perform quasi-judicial functions, which means advisory in total. He stated bottom line the EDA cannot sell this property. He stated that the Council does not have to transfer it under ordinance noting that if they wish to note to the EDA that they want the EDA to negotiate this project they can do that by simple motion. He stated that under Section 12.05, Sales of Real Property, it is stated very clearly that no real property of the city would be disposed of except by ordinance. He stated that it also states that the proceeds of any sale of such property would be used to retire any outstanding debts of the city in the purchase, construction or improvement of this or other property used for the same public purpose. He stated that he would like to respectfully submit that the golf course is a recreation activity of the city and if there are any outstanding debts on any other recreational facilities the residuals or profits on the property must first go to retire these debts. Mr. McCarty stated that the EDA resolution recommending that Council sell The Bridges Golf Course to Medtronic prior to finalization of the Comprehensive Plan amendments may be a bit premature. He suggested perusing Minnesota Statute 462, the Comprehensive Planning Act, stating that they would find that the comprehensive plans and their companion documents are one and the same, cohesive and inseparable. He stated that to go forward with the sale of a Mounds View EDA June 27, 2005 Regular Meeting Page 10 parcel of property that isn’t even zoned properly, he asked that they think this through completely. Mr. McCarty referenced the $400,000 for bringing utilities across the highway noting that it might cover the engineering fees when they look to bring Well #4 back online. City Administrator Ulrich referenced Well #4 stating that he recently spoke with the City Engineer and the well does not have to be brought online for the Medtronic project. He stated that the city would be able to service Medtronic with the existing city wells and water supply. President Marty stated that he would like to talk to the Public Works Director about this issue at another time. Barbara Haake asked at what point do they go out for bids when the city is purchasing something and what is the limit. President Marty stated that the limit is $50,000 and they are only required to have one bid. He assured Ms. Haake that they do advertise for bids. Ms. Haake stated that Mr. McCarty’s points are very legal and Mr. Amundsen also had good questions adding that it would be nice if they had time to answer their questions. She acknowledged her understanding that they are on a limited time schedule and fast track noting that she does believe that they should have had more options to consider. She stated that the vote tonight, 12.5 in the City Charter says they can go for referendum adding that she wants everyone to know that this is what they intend to go for. She stated that they want Medtronic to be aware that this is their plan once it goes into the ordinance process adding that they do not believe that there has been tough enough negotiations. David Jahnke, 8428 Eastwood Road, stated that he has followed this very closely noting that he has always been an opponent of the city owning a golf course because it loses money every year. He stated that he is appalled that a group of people put out a document that states the only entity is the golf course makes money noting he has documentation from the Finance Director that the golf course has lost money every year. He stated the numbers are in adding that anyone following this project knows the numbers. He stated that it is his belief that there is a group of people that just does not want Medtronic there they want a golf course. He stated that he does not believe that a city should be in a business and that the golf course should stand on their own. He indicated that the golf course owes the city over $4 million dollars adding that the citizens have elected this Commission and the Council to make the right decision here. He stated that he does not care if Medtronic affects him now adding that he is sure that it would benefit future generations. He stated that he hopes they make the right decision noting that the residents have voted noting the recent survey. He stated that he believes the results noting that the city has hired professionals to do this work and would take their word that the information provided is correct. He stated that they have one opportunity to get one of the best companies who treat their Mounds View EDA June 27, 2005 Regular Meeting Page 11 employees well to come to the City of Mounds View. He encouraged the Commission to make the right decision and thanked them for their time. Jackie Ensminger, 7954 Long Lake Road stated that golfing or any sport promotes family values noting that it does not make a family have values, no sport does. She stated that family values start from within the home. She stated that in the same token greed has brought down civilizations, corporations and individuals noting that Mounds View is a very small community. She stated that she has lived in Mounds View and has become very beholden to this community. She stated that people associate Mounds View with the Mermaid and thanked Mr. Hall for all of the money they have put into the community noting that the city has not promoted itself well enough. She expressed concerns stating that the Council went before the legislature to speak for the community regarding the LGA slashing and they didn’t hear the community noting that a large corporation comes to town and there is special legislation. She stated that this does not feel right adding that she does appreciate all of the hard work and effort on this issue. Mr. Hall urged the Commission to move forward and make the decisions that need to be made to get the job done. President Marty stated that he noticed Bob Thistle, a representative from Springsted, was in the audience at the June 20th public hearing. He stated that he had a conversation with Mr. Thistle and had the opportunity to ask why he attended the public hearing and whether he had reviewed the proposal. He stated that Mr. Thistle explained that City Administrator Ulrich had invited him to the public hearing noting that he did not have an opportunity to review the proposal. He noted that a lot of questions and issues have been raised regarding the negotiation process, which has been well taken. He noted that if this deal is approved it would be for a lifetime. He acknowledged that Medtronic is on a fast track and does have a real need for this facility. He stated that his question is whether this is the best deal for all involved. He stated that if they are going to do this deal they would do it right and if they are not going to do this deal they would also do it right. He stated that he does still see several issues adding that he would like to call for a motion to table this discussion and suggested that they contact Bob Thistle with Springsted to get an outside independent evaluation of the deal they have on the table. He stated that it would give them some breathing room to determine whether they are getting the best deal for the city. Vice President Stigney called a point of order stating that tabling of motions is not in order in accordance with Roberts Rules of Order. He stated that there is no motion on the floor. Commissioner Thomas clarified that tabling of a motion is not in order because there is not motion. MOTION/SECOND Stigney/Gunn To approve EDA Resolution 05-EDA-203 which states that Mounds View Economic Development Authority Resolution approving purchase agreement and contract for private development between the City of Mounds View, the Economic Development Authority and Medtronic and to waive the reading. Mounds View EDA June 27, 2005 Regular Meeting Page 12 Vice President Stigney stated that this is the greatest opportunity this city has ever had and will have in the future of this city. He stated that he has lived here for 39 years and nothing has ever come before this city like this great of an opportunity for the City. He stated that they are looking at changing a tax-exempt property that has never paid taxes and never will pay taxes to the city, county or school district because it is tax exempt. He stated that they are going to review this in comparison to what Medtronic will pay both long-term and short-term. He noted the question was raised as to what would happen when it closes out noting that Medtronic would be paying over $1 million per year to the city and you want to let it go for a losing proposition of a golf course. He stated that they would also get $83,000 in franchise fees each year and start with $43,000 to $60,000 in tax base each year that would also increase each year during the life of the TIF District. He noted the $856,000 in park dedication fees, $100,000 to the school district, $1 million to MnDOT plus the $865,000 in cash to the City. He noted that 63-percent of the people polled have said get rid of the golf course because it is subsidizing. He stated that the billboards are subsidizing it because if they weren’t paying the billboard money into the golf course it would go into the general fund. He stated that it couldn’t go to the general fund because the bond covenants state that all funds must go to the golf course. He stated that trails would also be included noting that it is mind-boggling to see where the debate has taken this issue. He stated that he is so glad that Medtronic has considered coming into this city and it is his hope that we haven’t scared them off as he would love to welcome them. Commissioner Gunn agreed with Vice President Stigney noting that they need to look at the future of the city, not just the here and now. She stated that the city as a whole is falling apart and they need the tax money coming in and the benefits now and in the future. She recalled that someone recently said that there would not be any repercussions from not having Medtronic adding that she would have to disagree with this statement. She stated that she is seeing a bigger picture noting that she has worked on the Highway 10 Committee to get this road developed adding that this would be a real boost for the city to have Medtronic come in as they could possibly attract other businesses to the area including restaurants and shops. She emphasized that they have to look at the big picture and the future, not just the here and now. Commissioner Flaherty stated that he first came to the Authority in January 2005. He stated that he has listened carefully to everyone who has spoken on this issue noting that The Bridges golf course does evoke a lot of passion within the community. He agreed that it does teach and promote family values and it is beginning to show signs that it could sustain itself now due to the billboard contracts with Clear Channel. He stated that it has a fine staff under the direction of Mary Burg and they have won numerous awards for excellence noting that it is a first class operation. He stated that Medtronic is a well-respected company that has a true humanitarian mission noting that they have been an asset to the State of Minnesota and the areas in which they have operated. He noted that they are a Minnesota company with a desire to stay in Minnesota rather than go to the highest bidder perhaps in another state. He stated that they have several components to consider including revenue for the city. Commissioner Flaherty explained that he Mounds View EDA June 27, 2005 Regular Meeting Page 13 had factored in the $5 million of surplus the City received and spread that out over the 25-years for the district. He stated that it would also include additional funding for the schools. He agreed that the golf course would maintain existing green space adding that Medtronic is only going to develop a portion of the property and the remainder would be available for use by Mounds View residents as a park facility with trails. He referenced other developers noting that he does not believe that there are more than a handful of developers in the state that could handle a project of this size within this state. He stated that they know what Medtronic brings to the table adding that other developers would be a best guess. He stated that development for residential homes would only be a continuation of the city operating on the backs of homeowners. He referenced industrial development and asked if they really want the possibility of an industry that could cause potential environmental issues, noise pollution or other additional daily traffic because of trucking. He stated that it is his belief that if the golf course property were put out for proposal by other developers he does not believe that Medtronic would be part of that group. He referenced the concerns expressed as to whether they are getting the best value for the land and the best deal for Mounds View stating that he believes that the value is not only based on monetary reasons but we need to also judge it by the type of business, the image, the potential for future growth and the type of people associated to this industry that would come into this project. He stated that over the last year he has talked with neighbors and asked them what their concerns are living in Mounds View. He stated that most responded that their biggest concerns are taxes and increases in the cost of services provided. He stated that he understands that the residents of Mounds View asked him to be their representative and to make the best decisions for all citizens. He assured the community that he has listened to everyone’s concerns and believes that the golf course has been a wonderful asset for the community but he also believes that Mounds View’s future does not lay with the golf course but it does with Medtronic. Commissioner Thomas clarified that it was her understanding that last week the meeting was designed to hear from the public and their chance to speak would be tonight. She stated that this gave them time to absorb and research to provide answers this week. She stated that she has spent much of the week meeting with many different people and talking with residents who are both for and against and somehow it seems the community can’t get around this issue becoming a personal, emotional issue. She stated that it should be about the numbers adding that it has to be about more than the dollars and cents discussed here. She stated that it does come down to how she feels about this issue and whether the questions and concerns were answered and addressed. She stated that they have been presented with an opportunity and proposal that they can say yes or no to and then deal with the next step. She explained that she has to decide, based on her beliefs and as an individual, what is best for the City of Mounds View. She stated that she understands the limitations this property has adding that any opportunities should be explored. She stated that initially she had significant concerns noting that every one of her concerns has been addressed. She stated that they worked very hard for six months raising questions and looking at all potential options. She referenced the cap on the TIF District stating that she understands what they had to do adding that she does not like the idea of a 25-year TIF district but she can do the math and understands what is being discussed. She stated that it was Mounds View EDA June 27, 2005 Regular Meeting Page 14 suggested that if this is the dollar amount needed to be competitive that it should be capped at the district and when it is reached it would end. She stated that this is their shot in getting this to be less than 25-years. She stated that this should be dealt with noting that 25-years is a long time noting that Medtronic did come to the table and agreed. She stated that it is only one thing, as they progressed, that when they had issues and raised questions, they were truly able to negotiate with the company and it is very frustrating that the community does not recognize what they have done and what they have struggled with over the last six months. She stated that this brings benefits well in excess of the $14.8 million the city is offering in way of a TIF finance noting that these dollars would come back to the city multi-fold. She stated that Medtronic managed to acquire the funds for County Road J not the city. She explained that Medtronic went to the legislature, fought for it and got it, which shows the kind of partner they could bring into this community. She stated that it would bring $20.5 million, which is far beyond the tax increment being discussed. She stated this is one item out of all the benefits the city would gain. She stated that once this goes through, if it goes through, they have a significant resource to deal with and the surplus dollars off the sale. She stated that it has been premature, as a Council, to discuss the possibilities for these dollars because we did not know if we would have them. She stated that the residents raised some very valid concerns at the meeting last week and discussed many of them with the residents last week. She noted that the city has many of these concerns regardless of whether Medtronic comes to the city or not but with the surplus pot of money that the city would have it would allow them to actually address these issues. She stated that the transportation issues have been discussed for years and have not been able to address them due to the lack of resources. She stated that the city would now finally have the resources to address these concerns. She stated that she has to hold, as an individual, that her vote is as ethical and is based down to level as she could go and is the number one right thing for her to do. She stated that the rest would have to stand as individuals on that. President Marty stated that on page 12 of the June 20th minutes Aaron Backman stated that in July 2004 CRESA Partners approached the city and within a week and a half of that they had received calls from a couple residential developers expressing an interest in the site. He stated they had one plan for various townhomes and other types of residential development that could occur on the site, which was brought up to Council but staff did not believe this was the highest or best use for this location and nothing further was done with this proposal. He stated that Roger stated we would be increasing the franchise fee by approximately $83,000 and noted that he is of the understanding that this would be once it is totally built out. Vice President Stigney clarified that this would be for Phase 1. President Marty stated that in looking over the proposed development agreement he still has several issues. He stated that they should have put out RFP’s to determine the best development plan. He noted that last week Steve Larson, Mayor of New Brighton, stated that the deal they discussed with Medtronic did not materialize and that their City decided to parcel off the land to different developers. He noted that the net gain for the City of New Brighton would be Mounds View EDA June 27, 2005 Regular Meeting Page 15 approximately $300 million adding that they did not mention the use of TIF, which would mean that the funds would go directly to the City of New Brighton’s tax base. He stated that he has had issues throughout the discussion process with the timeframe of the TIF District. He stated that it was originally proposed as a redevelopment TIF district, which could have a lifespan of 25-years noting that it was changed and modified to what it should be, which is an Economic Development District. He explained that by TIF Statute and State law an Economic Development District is capped at 8-years noting that there was special legislation to extend this to 25-years for Medtronic, and for Medtronic alone. He noted that the first year wouldn’t count so it would actually end up being a 26-year TIF district. He acknowledged that this could pay-off sooner than it is proposed but it is still a quarter of a century and many would not realize the benefits from a 25-year TIF district. He stated that it was pointed out that in actuality the savings would be a couple bucks a year on their taxes through the school districts. He referenced the traffic issues noting that they would not have the resources to address these issues in addition to the road repairs. He stated that he does not see this as a big cash cow noting that he discussed this with Finance Director Hansen and asked for his input on the issues. He explained that the Finance Director explained that in 25-years the city would be in great shape but in the meantime, as Joe pointed out, and over the last number of years the city has had to do double-digit tax increases just to meet basic city expenses. He stated that at a break of $41,000 to $43,000 a year coming directly to the city would increase a bit every year but the billboard contract was negotiated for five years noting that no one on the Council was actually in favor of billboards. He stated that they worked out a sunset clause where the billboards would come down in twenty years but with this proposal the billboards would not come down for 30-years or longer. He explained that the timeframe doesn’t start until the billboards are moved and in place. He stated that presently all of the billboards are located north of Highway 10 and Medtronic does not want the billboards located on their property. He agreed adding that they cannot fit all of the billboards in this area and some of the billboards would have to be brought into town and remain for the next 30-years. He clarified that he has never been in favor of billboards but agreed to the contract as a means to an end to pay off the golf course without incurring an increase in property taxes to pay off the golf course. He stated that he would like to move to table this discussion to ask Springsted and Associates to review this proposal and give the City an independent third- party viewpoint. Vice President Stigney called a point of order stating that a motion to table is out of order in accordance with the Roberts Rules. President Marty moved to postpone. Vice President Stigney referred to page 201 of Roberts Rules of Order, newly revised, it states that tabling a motion can only be used to set something aside temporarily for a matter that is of more urgency that needs to be dealt with at that moment. City Attorney Riggs clarified that it should be a motion to postpone. Mounds View EDA June 27, 2005 Regular Meeting Page 16 MOTION/SECOND Marty/ To postpone further discussion and to ask Springsted and Associates to review this proposal and give the City an independent third-party viewpoint. Motion failed due to lack of second. Vice President Stigney noted that Medtronic is also paying the $314,000 in expenses for the AUAR and water testing. He stated that Medtronic would be transferring positions with a growth potential of 300 jobs per year. He referenced the Economic Development spin-off opportunities stating that it is his belief that it would be unequal noting that as far as increasing values of the homes in the area because the demand for housing could be a big advantage. He noted that 80-percent of the residents do not play golf and he is here to represent their interests too. He noted that the golf course is a cash strain and has been from the beginning. He stated that from May of last year to May of this year there has been a 27-percent decline and the golf course has brought in $70,000 less than last year, which means city is subsidizing course. Commissioner Thomas stated that the revenues were compared from this year and last year noting that it is not a fair comparison. She stated that it is not the fault of the golf course that there has been a decrease in play due to these discussions and weather. She stated that this is not a fair comparison noting that they have a good enough history to compare that they do not need to take this into account. President Marty stated that he agrees that the residents should have the right to vote on anything of this magnitude in the city, as they are all part owners. He stated that to have five people vote on an issue that is a hot button topic concerns him. He stated that Springsted did an independent evaluation on the golf course in 2000 for bonding and to determine why it was losing money. He explained that it was revealed in the report that it was due to the lawsuits and legal fees after the golf course was constructed due to construction shortfalls. He stated that he would like this entered into the record and pulled forward. He stated that Springsted found that the golf course was making far more money than the conservative estimates it was projected at and if it hadn’t been for the lawsuits after construction the golf course would have been self-sufficient with estimates that were made setup for the bonding and payments. He stated that the amount of revenue it had generated far exceeded the estimates. He asked if there is anyone on the Council that has anything they would like to disclose before taking the vote. He noted that Commissioner Thomas has mentioned to him at the House Subcommittee meeting that she knew Donn Hagmann and that he is her cousin’s father. Commissioner Thomas confirmed that he is her aunt’s ex-husband and pointed out that this was the first time she had seen him in twelve years. Commissioner Gunn stated that there is no conflict of interest and the City Attorney has also clarified that there is no conflict of interest. Mounds View EDA June 27, 2005 Regular Meeting Page 17 President Marty asked City Attorney Riggs to clarify the process of transferring the property to the EDA and why they are doing this. City Attorney Riggs explained that the EDA exists on its own authority and is a legal entity in and of itself. He stated that it is pursuant to Minnesota Statutes Chapter 469 and once it is created it overrides any charter provision and is a legal separate entity. He stated that they are sitting as an entity that is totally separate from City Council. He stated that it is not necessary to transfer the property noting that the Council could choose to do it if they so desire. He confirmed that neither of these arises remotely to anything approaching a conflict of interest according the Minnesota law. MOTION/SECOND Stigney/Gunn To approve EDA Resolution 05-EDA-203, a Resolution approving purchase agreement and contract for private development between the City of Mounds View, the Economic Development Authority and Medtronic and to waive the reading. 4 – Ayes 1 – Nay (Marty) Motion carried. B. Resolution 05-EDA-204 Requesting the Mounds View City Council Set a Public Hearing for August 22, 2005 for the Proposed Establishment of Tax Increment Financing District No. 5 (A Special Legislation Economic Development District) Mr. Backman stated that in order to facilitate the Medtronic development the city sought passage of a special TIF legislation during the 2005 session. He stated that on May 23, 2005 the Minnesota Legislature approved the public finance bill, which included the city’s legislation allowing the creation of this district. He explained that in order to begin the process of creating the district and TIF plan the EDA has to request that the City Council calls for a public hearing on the proposed adoption of the modification to the development program for the Mounds View Economic Development Project and to propose adoption of the TIF plan. MOTION/SECOND Stigney/Thomas To approve Resolution 05-EDA-204 a request that the Mounds View City Council set a public hearing for August 22, 2005 for the proposed establishment of Tax Increment Financing District No. 5 (A Special Legislation Economic Development District) and to waive the reading. 4-Ayes 1-Nay (Marty) Motion carried. 7. REPORTS City Administrator Ulrich reported that the last Executive Session was held on June 13, 2005 from 6:30 p.m. to 7:00 p.m. with all EDA members present along with the City Attorney, a Mounds View EDA June 27, 2005 Regular Meeting Page 18 representative from Ehlers and Associates, the Community Development Coordinator and City Administrator. He stated that this meeting was continued to June 16 at 4:00 p.m. and adjourned at 5:48 p.m. He explained that the purpose of the Executive Session was to discuss the proposed sale of land comprised of The Bridges and to review the development proposal in terms of the purchase agreement and the contract for private development. He noted that at that time it was moved forward by consensus to June 20th for the public hearing. President Marty stated that he would like to clarify that he has nothing personal against Medtronic. 9. NEXT EDA MEETING: July 11, 2005. 10. ADJOURNMENT President Marty adjourned the meeting at 7:23 p.m. Respectfully submitted, Recorded and transcribed by: Bonnie Sullivan TimeSaver Off Site Secretarial, Inc.