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HomeMy WebLinkAbout02-27-2006 CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MEETING AGENDA NEW BRIGHTON CITY HALL Monday, February 27, 2006 6:00 PM 1. CALL TO ORDER 2. ROLL CALL: President Marty, Vice President Stigney, Commissioner Flaherty, Commissioner Gunn, Commissioner Thomas 3. APPROVAL OF AGENDA 4. PUBLIC INPUT: Citizens may speak to issues not on tonight’s agenda. Before speaking, please give your full name and address for the minutes. Also, please limit your comments to three minutes. 5. APPROVAL OF MINUTES A. February 13, 2006 EDA Minutes B. February 13, 2006 Executive Session Minutes 6. CONSENT AGENDA 7. EDA BUSINESS A. 6:00 PM: Public Hearing and Consideration Resolution 06-EDA-216 Approving the Amended and Restated Development Agreement and Modification to the Business Subsidy Agreement for the Medtronic CRM Project B. Resolution 06-EDA-217, Authorization to approve a Purchase Agreement and conduct a Real Estate Appraisal of the Property Located at 2390 County Road 10 8. REPORTS 9. NEXT EDA MEETING: Monday, March 13, 2006 @630pm 10. ADJOURNMENT PROCEEDINGS OF THE MOUNDS VIEW EDA 1 CITY OF MOUNDS VIEW 2 RAMSEY COUNTY, MINNESOTA 3 4 Regular Meeting 5 February 13, 2006 6 New Brighton City Hall 7 803 Old Highway 8, New Brighton, MN 55112 8 6:33 P.M. 9 10 11 1. CALL MEETING TO ORDER 12 13 2. ROLL CALL: President Marty, Vice-President Stigney, Commissioner Gunn, 14 Commissioner Flaherty, and Commissioner Thomas. 15 16 NOT PRESENT: None. 17 18 3. APPROVAL OF AGENDA 19 20 MOTION/SECOND: FLAHERTY/GUNN. To Approve the February 13, 2006 Agenda as 21 presented. 22 23 Ayes – 5 Nays – 0 Motion carried. 24 25 4. PUBLIC INPUT 26 27 Kenneth Linden, 5240 Edgewood Drive, asked what rules are planned for time limits of 28 discussions during the public hearing. He asked that the Commission be as generous and open as 29 possible so resident concerns can be heard. 30 31 Mr. Linden asked if the Commission intends to answer questions tonight or sometime in the 32 future. He asked if the answer will be provided when the question is asked or after all the 33 questions have been asked. 34 35 Mayor Marty stated the Commission attempts to answer questions when asked, but if the answer 36 is not known, Staff will be asked. 37 38 5. APPROVAL OF MINUTES 39 40 MOTION/SECOND: STIGNEY/MARTY. To Approve the January 23, 2006 Minutes as 41 corrected. 42 43 Ayes – 5 Nays – 0 Motion carried. 44 45 Mounds View EDA February 13, 2006 Regular Meeting Page 2 6. CONSENT AGENDA 46 47 No items were removed from the Consent Agenda. 48 49 A. Set a Public Hearing for Monday, February 27, 2006 at 6:00 pm to Consider 50 the Amended and Restated Development Agreement and Modification to the 51 Business Subsidy Agreement for the Medtronic CRM Project. 52 53 B. Establish an Executive Session of the EDA immediately following conclusion 54 of the City Council meeting, Monday, February 13, 2006, to consider 55 negotiations relating to the possible acquisition of 2390 County Road 10. 56 57 MOTION/SECOND: GUNN/THOMAS. To Approve the Consent Agenda, as presented. 58 59 Ayes –5 Nays – 0 Motion carried. 60 61 7. EDA BUSINESS 62 63 A. Consideration of a Modification to the Project Plan for the Mounds View 64 Economic Development Project and the Proposed Modification of Tax 65 Increment Financing District No. 5. 66 67 Economic Development Coordinator Backman explained the potential to accelerate Phase 2 of 68 the Medtronic CRM Headquarters in Mounds View. 69 70 Economic Development Coordinator Backman stated that the development agreement signed by 71 Mounds View EDA and Medtronic provides $14.8 million in TIF assistance to Medtronic to 72 implement the first phase of the three phase development. He explained that additional TIF 73 assistance may be requested by Medtronic for Phases 2 and 3. He noted that Ehlers and 74 Associates prepared a financial analysis and it is essentially the same document that was 75 approved on August 22, 2005. He stated that changes include the increase from 820,000 to 1.2 76 million square feet of building space, an additional $30,400,000 in market value, $1.7 million in 77 new tax capacity upon project completion, and an increase in the TIF Note from $14.8 to $22.9 78 million. He commented that the increase in the TIF Note reflects greater development costs for a 79 significantly larger initial development phase. 80 81 Economic Development Coordinator Backman stated that some people may wonder what the 82 benefits of accelerating the development and the benefit of having thousands of employees in 83 community are. He stated Medtronic is a unique company and opportunity for the City of 84 Mounds View. He noted that Medtronic focuses on innovation. Economic Development 85 Coordinator Backman stated that research and development leads to new technologies, 86 contributes to economic growth and enhances competitiveness. He noted the two Minnesota-87 Mounds View EDA February 13, 2006 Regular Meeting Page 3 based companies with the highest levels of research and development expenditures are 3M with 88 $1.18 billion and Medtronic with $1.14 billion. He noted that a significant portion of 89 Medtronic’s research and development will take place in Mounds View. He noted Medtronic 90 fosters technical breakthroughs and plans for the long term, and Mounds View has the 91 opportunity to be a partner in that. 92 93 Economic Development Coordinator Backman stated that the benefit to Medtronic is that 94 innovation happens when people are brought together with different disciplines. He explained 95 this will result in better communication flow and increased efficiency. He added another benefit 96 is a better working environment, faster response to customers and more cost effective products. 97 98 Economic Development Coordinator Backman explained how the City will benefit from the 99 project. He stated it will provide the City with certainty as to what will be built on site and when 100 it will be build. He commented by moving up Phase 2, this part of the campus will be on the tax 101 rolls five to six years earlier. He stated it also provides the City with an additional commercial 102 building with over $30 million of capital investment. Economic Development Coordinator 103 Backman added the combined Phase 1 and Phase 2 increases the City’s market value, expands 104 the number of high paying jobs to approximately 1,400 over time, and saves the City potentially 105 $2.7 million in utility costs, billboard buyouts and relocation costs. He stated it provides 106 $545,000 to upgrade Well Number 4 to ensure adequate water supply for the City, and provides 107 $255,000 for street reconstruction projects to offset potential traffic impacts. He added it 108 provides an estimated $40,000 in annual franchise fees. 109 110 Economic Development Coordinator Backman explained that the community will benefit by this 111 project as well, such as providing the Mounds View school district with over $30 million for 112 referendums. 113 114 Economic Development Coordinator Backman noted that by having thousands of people with 115 jobs in Mounds View, it is likely that a portion of the workforce will buy products and services in 116 the community. He stated there is likely to be an increased number of residents in Mounds View, 117 and this skilled work force may become involved in the City and in the schools. 118 119 Economic Development Coordinator Backman stated the amended TIF plan represents the spirit 120 of collaboration between the City and Medtronic. He stated it reflects the City’s efforts to 121 promote thoughtful and planned business development. He stated Medtronic is committed long 122 term to Mounds View to make the development a world class facility. 123 124 MOTION/SECOND: GUNN/STIGNEY. To waive the reading and adopt Resolution 06EDA-125 215 Modification to the Project Plan for the Mounds View Economic Development Project and 126 the Proposed Modification of Tax Increment Financing District No. 5. 127 128 Vice-President Stigney welcomed Medtronic to the City and added the project will be a benefit to 129 Mounds View EDA February 13, 2006 Regular Meeting Page 4 taxpayers. 130 131 President Marty noted that a benefit of consolidation is that it will make Medtronic much more 132 efficient, because in the past there were five different sites that needed to be coordinated. 133 134 President Marty explained if TIF is decreased to $4 million from $8.1 million, the TIF value 135 would be $18.8 million. He explained at $80 per square foot it would be paid off in 2028, and at 136 $100 per square foot, it would be paid off in 15.5 years. Mayor Marty pointed out that with the 137 original cap of $14.89 million and with the additional $8.1 million, the combined TIF value 138 would be $22.9 million. He stated the original interest was $16.9 million, and now the interest 139 will be $21.3 million, resulting in a total of $44.2 million. 140 141 President Marty noted if the City did not give Medtronic TIF, this would make the TIF district 142 pay off that much sooner. He noted that property taxes in Phase 1 would have been $563,000 143 and the school districts in Phase 1 would receive $163,000 per year. He noted because it is a TIF 144 district, it does not pay off until 2033. He stated he wished to put the project on the tax rolls to 145 affect the citizens of Mounds View as quickly as possible. President Marty noted that he does 146 not think Medtronic would walk away from the project, but rather they need Phase 2 right now in 147 light of demands in cardiac rhythm management and the State putting in $20.5 million for streets 148 and roads. He stated the State moved up County Road J 20 years ahead of schedule and it was 149 his understanding that 35W is now on the radar map. 150 151 President Marty questioned the excess increments, and suggested it is not bonding if taxes are 152 higher and noted that it does seem to be paying off sooner. He asked if this would all go into the 153 TIF district to help it pay off sooner and once it is paid off, if it reverts to the County Auditor for 154 redistribution. 155 156 President Marty stated that in regard to the transportation issues relating to the proposed 157 development, the development did not review or take into consideration excess traffic on City 158 streets. 159 160 President Marty noted the fiscal disparities inside the TIF district and asked if August 1, 2007 is 161 when the first note for the TIF district will be issued. He stated this assumes the first tax 162 increment for the District will be in 2008, and pointed out that although the property was sold in 163 2005, it will not be effective until 2008. 164 165 President Marty stated that he has never seen the TIF application for Medtronic Phase 1 and/or 166 Phase 2. 167 168 President Marty asked for clarification if most of the new jobs in Phase 1 were transfers, and that 169 most of the new jobs in Phase 2 would be newly created jobs. 170 171 Mounds View EDA February 13, 2006 Regular Meeting Page 5 Roger McCombs, Medtronic, stated that Phase 2 is another extension and will have the same 172 proportion of jobs as Phase 1. 173 174 President Marty stated he thought that 400-700 new jobs were created each year over the past 175 several years. Mr. McCombs responded that 300-350 jobs on average are added in 176 Minneapolis/St. Paul per year. 177 178 President Marty stressed if the TIF was kept at a lower amount, this would be a great boost to the 179 taxpayers and this project would pay off that much sooner. 180 181 Vice-President Stigney stated by accelerating this project, it will increase the project’s value to 182 $96 million for Phase 2. He commented by Phase 1 and 2 occurring at the same time, it is a 183 “win-win” situation for Mounds View. He stated he was thankful for Medtronic coming into the 184 City. 185 186 Commissioner Thomas stated that Medtronic is coming in and is going to adjust their 187 development based on the assistance they are going to get. She stated the City will get less value 188 if it gives less TIF assistance. She stated these are the terms that were discussed and negotiated. 189 She stated she is supporting the development as it is set. 190 191 Commissioner Flaherty stated there was concern if Phase 2 and Phase 3 were going to happen, 192 and TIF levels were not discussed at that time. He stated Medtronic is a company that is 193 negotiating with the City in good faith, and the City is negotiating with Medtronic. He stated that 194 by rolling Phase 1 and Phase 2 into the same time slot as Phase 1, the TIF district will be reduced 195 by five to six years. He stated this is not even mentioning all of the other bonuses the City is 196 getting, such as the repair of Well Number 4 which would have cost the City $445,000 and was 197 something the City needed to do anyway. He added that additional funds are going into the street 198 infrastructure fund. He added he hopes the Medtronic employees will live in the City of Mounds 199 View, as often employees like working close to home. He stated he sees the development as a 200 tremendous benefit to Mounds View. 201 202 Councilmember Gunn stated her support for the development. 203 204 President Marty stated Medtronic is contributing to the streets and has pledged to contribute 205 $355,000. He noted he finds this admirable and recognized that it was not required; however, as 206 stated previously, if this was not in a TIF district, the City would be getting $560,000 per year. 207 He stated the $355,000 is very good but compared to when the district is finally paid off, it will 208 only be a fraction of that. 209 210 Ayes – 4 Nays – 1 (Marty) Motion carried. 211 212 8. REPORTS 213 Mounds View EDA February 13, 2006 Regular Meeting Page 6 214 None. 215 216 9. NEXT EDA MEETING: Monday, February 27, 2006 at 6:00 p.m. 217 218 10. RECESS 219 220 President Marty recessed the EDA meeting at 7:04 p.m. to hold an Executive Session of the 221 EDA. 222 223 President Marty called the meeting back to order at __:__ p.m. 224 225 11. ADJORNMENT 226 227 President Marty adjourned the meeting at __ p.m. 228 229 Respectfully submitted, 230 231 232 Recorded and transcribed by: 233 Annette Anderson 234 TimeSaver Off Site Secretarial, Inc. 235 236 CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MEETING AGENDA * EXECUTIVE SESSION * NEW BRIGHTON CITY HALL Monday, February 13, 2006 1. CALL TO ORDER President Marty called the meeting of the Economic Development Authority to order (from recess) at 10:47 PM. 2. ROLL CALL: President Marty, Vice President Stigney, Commissioner Flaherty, Commissioner Gunn, Commissioner Thomas Also Present: City Attorney Scott Riggs, City Administrator Kurt Ulrich and Community Development Director Jim Ericson 3. APPROVAL OF AGENDA The agenda was approved as presented. 4. EDA BUSINESS A. To develop or consider offers or counteroffers for the purchase or sale of real or personal property located at 2390 County Road 10. Community Development Director Ericson reviewed the property in question at 2390 County Road 10 and the fact that the seller remains interested in negotiating with the EDA for a possible acquisition. The seller’s agent communicated a reduced selling price for the property which reflected an appreciable discount from the original asking price. Director Ericson indicated that the EDA that it could require that the seller or its agent arrange to remove the underground fuel storage tanks, conduct all applicable environmental testing and arrange to remediate any contamination found as a condition of acquisition. The EDA would also want to be protected against any outstanding liens or tenant / leasehold interests as well. The EDA suggested that an appraisal be conducted to substantiate the asking price and directed staff to add such an item for consideration at the next EDA meeting. The EDA also suggested Director Ericson send a letter of intent to the seller with terms as discussed. 5. ADJOURN President Marty adjourned the executive session of the EDA at 11:12 pm. Respectfully submitted, Kurt Ulrich, City Administrator Item No: EDA 7B Meeting Date: Feb 27, 2006 Type of Business: EDA-B Administrator Review : ____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: James Ericson, Community Development Director Item Title/Subject: Consideration of Resolution 06-EDA-217, Authorization to Approve a Purchase Agreement and Conduct a Real Estate Appraisal of the Property Located at 2390 County Road 10. Introduction: Based upon the discussion and direction of the EDA at an executive session held on February 13, 2006, staff drafted a letter of intent to the agent representing the owners of 2390 County Road 10 regarding the potential acquisition of the property. The EDA suggested that the City conduct an appraisal of the property to verify that the asking price of the property is appropriate. The sellers have agreed to the terms and conditions articulated in the letter of intent, and request that a purchase agreement to that effect be drafted. Discussion: Appraisal. The EDA directed staff to bring back to the EDA for consideration a resolution to authorize the appraisal of the property. Staff has contacted numerous commercial real estate appraisers and has received proposals from three. The appraisal would be in summary format which would result in a lower cost to the City without any loss of pertinent or relevant data. The arrived property valuation is the same regardless. The following firms have responded with the following proposals: Firm Cost Timeframe R.A. Field & Associates $1,900 4 weeks Tisdell Appraisal Services, Inc. $1,900 2 weeks Orion Appraisals, Inc. $2,800 3-4 weeks ? ? Staff recommends awarding the appraisal contract to the low bidder having the ability to complete the work in the shortest period of time. Since other proposals could be received after this report is drafted, the resolution will not indicate the firm or price, that will be added the night of the meeting based upon all proposals received up to that point. Funding for the appraisal would be from Account 230-4650-3030 (the EDA fund.) Purchase Agreement. Staff has asked Kennedy & Graven to prepare a purchase agreement which formalizes the City’s intent to acquire the property at 2390 County Road 10 under the terms and conditions discussed on February 13, 2006. These conditions, generally, are that the seller arrange to remove the underground fuel tanks and arrange to conduct a Phase 1 and Phase 2 environmental analysis and conduct any necessary remediations as may be specified in said analyses. The City will have the right to terminate the agreement if the site is not “clean” or if the appraised value does not support the asking price of $625,000. Premium Stop Report February 27, 2006 Page 2 Recommendation: Staff has prepared a resolution for the EDA’s consideration that authorizes an appraisal and Purchase Agreement for the Premium Stop property. Approving the Purchase Agreement does obligate the City to the acquisition of the property so long as all conditions are satisfied. If the appraised value is less than the asking price, the City may terminate the agreement. If contamination is found on the property that is not remedied by the seller, the City may terminate the agreement. If the underground fuel tanks are not removed by the seller, the City may terminate the agreement. If the property has any third party liens or unresolved leasehold interests, the City may terminate the agreement. For the purposes of this approval, “terminate” shall also mean “renegotiate”. Any changes (renegotiation) however would necessitate Council re-authorization. Staff recommends approval of EDA Resolution 06-EDA-217, Authorization to Approve a Purchase Agreement and Conduct a Real Estate Appraisal of the Property Located at 2390 County Road 10. Respectfully submitted, ________________________ James Ericson Community Development Director SITE MAP Saturn Jake’s Robert’s Sushi Bar Premium Stop Car Wash Vacant Vacant EDA RESOLUTION NO. 06-EDA-217 MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF RAMSEY STATE OF MINNESOTA AUTHORIZATION TO CONDUCT A COMMERCIAL APPRAISAL AND APPROVAL OF A PURCHASE AGREEMENT FOR THE PROPERTY LOCATED AT 2390 COUNTY ROAD 10 WHEREAS, the property located at 2390 County Road 10 is presently available for acquisition; and, WHEREAS, the property owner has indicated agreement to sell the property to the EDA under a variety of terms and conditions as outlined in a letter of intent dated February 14, 2006; and, WHEREAS, the seller requests that a Purchase Agreement be executed regarding the proposed acquisition given the time and effort necessary to comply with the terms and conditions; and, WHEREAS, staff has confirmed that the property at 2390 County Road 10 is on the City’s list of parcels identified for potential acquisition; and, WHEREAS, to determine the fair market value for the property and to verify the agreed upon price of acquisition, it would be appropriate to conduct a commercial appraisal of the parcel and improvements; and, WHEREAS, the City has requested proposals from area appraisal firms who are able to perform such an appraisal and have solicited estimates from said firms ranging from $1,900 to $2,800; and, NOW, THEREFORE BE IT RESOLVED THAT, the Mounds View Economic Development Authority (the “Authority”) hereby authorizes an appraisal of the property located at 2390 County Road 10 at a cost not to exceed $2,000. NOW THEREFORE BE IT FUTHER RESOLVED THAT, the Authority authorizes execution of the attached Purchase Agreement which formalizes the agreed upon terms and conditions. Said Agreement may be terminated (or renegotiated) by the EDA should any of the following occur: 1. The appraised value does not support the agreed upon asking price. 2. The seller does not remove all underground fuel storage tanks. 3. The seller does not remediate any or all negative environmental conditions or contaminants. 4. The seller does not guarantee the property is free of any or all liens or tenant / leasehold interests. EDA Res. 06-EDA-217 Page 2 Adopted this 27th day of February, 2006 by the Mounds View Economic Development Authority ________________________________ Rob Marty, President ATTEST: ________________________________ Kurt Ulrich, Executive Director (SEAL) PURCHASE AGREEMENT by and between THE MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY and CHO INVESTMENTS Regarding the property located at 2390 COUNTY ROAD 10 MOUNDS VIEW, MINNESOTA The Purchase Agreement is being drafted by Kennedy & Graven and will contain the terms and conditions as articulated in the February 14, 2006 letter of Intent. The agreement however was not available in time for inclusion with the packet Thursday afternoon. Staff will hand deliver the Purchase Agreement as soon as it is available, which will likely be Friday, February 24, 2006.