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Economic Development Authority Minutes Page 2 December 11, 2006 5. Consider Tax Abatement Application and Recommendation to Council -United Healthcare Service, Inc. Director of Economic Development Catherine Mehelich provided background information regarding the proposed 189,000 squaze foot United Healthcare Services, Inc. data center project and their request for tax abatement. She noted that a maximum tax abatemem of 5 percent of the assessed market valuation up to $1-million was previously authorized by the EDA as part of negotiations with the company during its site search process. She explained the terms of the assistance being offered to United HealthCaze. Mr. Dennis Spalla, Director of Real Estate for the corporate health group, expressed his appreciation to staff and the elected officials. He stated that staff has been very informative and cooperative throughout their negotiations. Mr. Spalla stated that the proposed facility will surpass what they have in Plymouth. President Gongoll expressed his appreciation to United Healthcare, stating that they will be a valuable asset to Elk River. MOTION BY COMMISSIONER FARBER AND SECONDED BY COMMISSIONER TVEITE TO RECOMMEND APPROVAL OF PROVIDING TAX ABATEMENT ASSISTANCE TO UNITED HEALTHCARE SERVICES, INC. IN THE FORM OF A PAY-AS-YOU-GO TAX ABATEMENT NOTE FOR UP TO 5 PERCENT OF THE ASSESSED MARKET VALUE UP TO A MA7~MiJM OF $850,000 WITH THE COMPANY RECEIVING 100 PERCENT OF THE ANNUAL CITY PORTION OF REAL ESTATE TAXES FOR A MA~MUM PERIOD OF 10 YEARS. A REQUIREMENT OF THE FINANCIAL ASSISTANCE INCLUDES A COMMITMENT FOR THE CREATION OF 20 NEW FULL-TIME POSITIONS AT A MINIMUM HOURLY WAGE OF $24.00 WITHIN TWO YEARS. MOTION CARRIED 7-0. 6. Consider YMCA Memorandum of Understandine City Administrator Lori Johnson stated chat the EDA is issuing authority for the $12 million in bonds for the construction of the YMCA facility that will be owned by the EDA and leased to the YMCA. She noted that the City Council has made changes in the Memorandum of Understanding (MOLn to increase the benefits to the City residents, to address who pays for capital improvements, and maintenance and operation of the building. Ms. Johnson explained that the YMCA will be responsible for one-third of the $12 million debt, and that the levy will start in taxes payable year 2008, which is when the YMCA will begin occupancy. Ms. Johnson reviewed recent changes to the MOU as listed in her staff report dated December 11, 2006. She noted that the City will work with the YMCA on parking issues including Chamber of Commerce 4~h of July celebration, softball and park usage. Ms. Johnson stated that shared parking will be utilized in order to free up as much green space as possible. Commissioner Tveite asked for clarification on the reimbursement of leasehold improvements. Ms. Johnson explained that reimbursement would be considered for improvements that the YMCA paid for, but would not receive full benefit, if the lease were to expire or be terminated, such as a new roof. She noted that the reimbursement would be for only the City's share of the cost, at which that the City takes possession of the building. Commissioner Tveite asked if the YMCA would be responsible for all utilities. Ms. Johnson explained that those types of details will be addressed in the lease agreement, and that the