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HomeMy WebLinkAbout11-28-2005PROCEEDINGS OF THE MOUNDS VIEW EDA CITY OF MOUNDS VIEW RAMSEY COUNTY, MINNESOTA Regular Meeting November 28, 2005 New Brighton City Hall 803 Old Highway 8, New Brighton, MN 55112 6:53 P.M. 1. CALL MEETING TO ORDER 2. ROLL CALL: President Marty, Vice President Stigney, Commissioner Gunn, and Commissioner Flaherty. NOT PRESENT: Commissioner Thomas. 3. APPROVAL OF AGENDA City Administrator Ulrich added Agenda Item 8A, An Update Regarding the DEED Funding Agreement for the County Road J Improvement Project. MOTION/SECOND: Gunn/Flaherty. To Approve the November 28, 2005 Agenda as revised. Ayes – 4 Nays – 0 Motion carried. 4. PUBLIC INPUT None. 5. APPROVAL OF MINUTES MOTION/SECOND: Flaherty/Marty. To Approve the November 14, 2005 Minutes as corrected. Ayes – 4 Nays – 0 Motion carried. 6. CONSENT AGENDA None. 7. EDA BUSINESS A. Discuss Possibility of Expanding Medtronic Project to Include Phase Two Mounds View EDA November 28, 2005 Regular Meeting Page 2 Community Development Director Ericson explained that staff wants to present information for the EDA’s consideration as a discussion item. He advised that Medtronic may want to accelerate Phase 2 and construct it concurrently with the Phase 1 development. He reviewed that one of the concerns raised through the Medtronic process is that the City may never see Phase 2. However, the growth of Medtronic is such that they are looking at options to provide additional office space and the possibility of doing Phases 1 and 2 together to save some costs. Staff would like to talk about that option and ask if the EDA would like staff to “open that door” and talk with Medtronic about possibly accelerating their phasing. Director Ericson advised that today staff received a letter from Medtronic confirming they are looking at accelerating their project and asking the City if it would be interested in negotiating for Phase 2 now and amending the development agreement to do Phases 1 and 2 at the same time. Director Ericson stated staff is requesting no action to be taken other than to provide direction to staff if it would like staff to meet with Medtronic. He noted the benefits are obvious in bringing in 380,000 square feet of office space that may have been out another 7 to 8 years. It would also result in 4,400 employees rather than 3,000 employees. Commissioner Gunn stated her support for staff to discuss this option with Medtronic. Vice President Stigney questioned the form of greater revenues to the City. Director Ericson explained that the City gets a percentage of TIF dollars generated and a share of the increment for administrative fees. In addition to TIF, there would be a greater market value assigned to the project. If Phase 1 is $65 million for the first two buildings, then Phase 2 would be about $96 million dollars. Director Ericson noted the impact to the City’s levies, school board levies, and that Medtronic would take a larger percentage of bonds that are market based so taxes to residents and others would be decreased by a consistent amount above and beyond a $65 million project. Director Ericson noted this would also bring the market value back on line to property taxes that much sooner rather than waiting 8-9 years for Phase 2. Vice President Stigney asked about the impact to the current $11.8 million cap. Director Ericson explained it is actually a $14.8 million cap and that is completely negotiable. He stated staff is looking at eligible costs for a Phase 2 expansion such as the additional two stories on the Phase 1 ramp. Director Ericson explained there may not be a lot of eligible expenses for Phase 2, which makes it more appealing to get on line sooner. Vice President Stigney asked about the interest being paid and whether it would go back to them or be waved on this Phase. Director Ericson stated staff will explore that avenue. Commissioner Flaherty stated his support to open dialogue, which poses no risk. He pointed out Phase 2 is inevitable, but this is sooner than anticipated. Mounds View EDA November 28, 2005 Regular Meeting Page 3 President Marty stated he likes the fact that it will assure Phase 2 is in Mounds View. He noted that the administrative fee from TIF for Phase 1 ranges from $41,000 to $46,000 so this could add $20,000 to $30,000 a year. President Marty stated he is concerned that with this much construction, the City’s one full time building inspector may need some help. Director Ericson noted that hiring an additional inspector may provide enough assistance so staff can focus on the Medtronic project. But, if more help is needed, staff can look at that. He explained that Medtronic plans to submit building permits in phases and built sequentially rather than dropping off 1,000 pages of plans at one time. Medtronic will time submissions so it is spread out and staff can review the plans and get to inspections. If additional staff is needed, the permit revenue would support that cost. President Marty stated the Phase 1 TIF period was extended from 8 years, by State Statute, to 25 years. He asked if Phase 2 is submitted, could it be renegotiated to get closer to the State Statutes. Director Ericson explained he is not at a point to talk about negotiated issues but this could be wrapped into the current project and if the EDA wants to consider accelerating payoff, staff could look at less of an administrative fee of the TIF generated and roll the funds back into the payoff so it is paid sooner. He noted the costs are greater to do two standalone TIF districts so maybe Phase 2 could be wrapped into the Phase 1 TIF district that is already authorized. President Marty stated the EDA supports directing staff to move forward with discussion. City Administrator Ulrich stated staff would like Ehlers to run the numbers, which will incur costs that would be reimbursed by Medtronic. President Marty stated his agreement with using Ehlers since they are the most knowledgeable with this project. 8. REPORTS A. An Update Regarding the DEED Funding Agreement for the County Road J Improvement Project City Administrator Ulrich reviewed that the EDA has previously granted staff approval to execute agreements for the $5 million grant received from the State for construction of County Road J. At this time an issue has come up that has not yet been resolved and staff wants to bring that issue to the attention of the EDA. Mounds View EDA November 28, 2005 Regular Meeting Page 4 City Administrator Ulrich explained that with the right-of-way purchase there is a grant provision that it must be made by the City, which staff thinks is ridiculous because the land is in Anoka County, Ramsey County, Blaine, Shoreview, and Mounds View. Staff’s concern is to not be put into a situation where Mounds View is actually purchasing right-of-way in other cities and counties. Staff is trying to resolve this issue but it may require action by the EDA. City Administrator Ulrich advised that staff and the City Attorney are working through the Governor’s office to resolve that issue but it is withholding the County from making the right-of- way purchases in a timely manner. City Attorney Riggs stated staff has been in discussions with DEED and the Governor’s office about how this can proceed. DEED has been in consultation with the Attorney General’s office that the City needs to be the acquiring agency. Staff is trying to work around that issue and there may be some options that would require modifications to the agreement. If not, staff will return for EDA consideration on this issue. He noted there is $5 million available and is a matter of how to best facilitate that for the five jurisdictions involved. President Marty suggested that DEED could funnel or transfer the money to the affected cities. He noted that when Mounds View sold the property, the City got the money and then transferred it to Mn/DOT. He stated he has talked with the Mayor and a Councilmember of Blaine and all along they have been in total support because of the improvements to County Road J and I-35W. President Marty stated his preference if the City could transfer the money to Blaine so they could acquire the property within Blaine. City Attorney Riggs explained there are three “pots” of money in play and dollars from DEED, some designated to the County, some to the City, and some to Mn/DOT for right-of-way purchase. He agreed that many agencies are involved and explained that typically the County would be the acquiring agency but two counties involved in this situation. City Attorney Riggs stated staff hopes to work it out so the dollars can be utilized immediately. President Marty stated in reading reports on the AUAR from Anoka County, they were also in support. City Attorney Riggs stated that is correct and the issue is finding the correct legal mechanism based on the language in the two statutes that were adopted during the last session. City Administrator Ulrich explained that may necessitate the EDA holding a special meeting so bids can be done by December 1st. However, it is not likely that will occur if significant modifications are needed. City Attorney Riggs advised that the County wanted to make offers to the property owners by the first of December and notices of condemnation may also be needed. However, if the City is the acquiring agency it would be difficult because the City has not done anything in that regard. Mounds View EDA November 28, 2005 Regular Meeting Page 5 President Marty noted a public hearing is already scheduled for December 5, 2005. City Administrator Ulrich stated the EDA could schedule a special meeting on December 6, 2005. 9. NEXT EDA MEETING: Monday, December 12, 2005 at 6:30 p.m. 10. ADJOURNMENT President Marty adjourned the meeting at 7:15 p.m. Respectfully submitted, Recorded and transcribed by: Carla Wirth TimeSaver Off Site Secretarial, Inc.