[clears throat] Special thanks to this pledge of allegiance and I pledge allegiance to the flag of the United States of America and to the republic for which it stands. One nation
under God, indivisible, with liberty and justice for all. >> Everybody has [clears throat] a little bit more than our last together. All right, we are going to move into the administration.
>> Yep. I can say quick words. So, uh the city did receive a request for a business subsidy. That is what be is before you today. There is um nothing related to the land use of this development tonight. Uh it's just the financial aspect um and the business
subsidy application. So, uh we've prepared a PowerPoint to try to explain, you know, a big night can be complicated. Uh it's not something a lot of people deal with. And so we're hoping to go through a lot of
uh what ament means, what was included in the request, what staff recommendations are, and then we do have Mike Kubani here who is the city's uh financial adviser who will be walking through how we got to the numbers that uh are presented to you uh this evening
and what uh the taxes mean for this development. Uh so we're going to start off with a review of what we talked about last time how property values tax capacity and tax calculations on permanent. Um so the taxable market value that is a number
that is determined by office. Um the net tax capacity that is in the solar they create classification rate in the formula which would be actual market values times the classification rate net capacity number.
Um from there there are several different classifications of properties. Um for instance class 3A is for commercial industrial class 1A is residential homestead and I have up there on how each one of those various
in their tax season. Um now for determining taxes property taxes payable are determined by the net capacity time tax rate jurisdiction to get property taxes payable. So an example of a property taxes
payable for a resident merchant company with a tactical market value of $500,000 each for just the city portion of taxes. uh residential as you can see would be uh $4,100 and commercial be 7,585
near so what does this mean to our finan county assessor's office based on information that the develop provided the assessor's office has estimated taxable market value of $45.1 million for the data center office building it
land Uh then for example for compare that to facial market value for all existing commercial industrial for 47,640,200. Uh so if the factor market value is
determined to be 45.1 million it would nearly double the current commercial industrial market value in city. Um so what does this mean for these property taxes? So based on those previous formulas I showed the net the
net tax capacity would be $912,250 the city property passes annually based on the 2025 tax rate be $739,25 just remember the estimations and projections we won't know anything
assessment as assessed that potential future investment plan of 482 major development based on what was presented in the AR. I won't look forward through all these numbers. Uh but what would the tactical market value be for future like industrial buildings that were of equal size to this? Uh each
building potentially had a taxable market value of $37 million. Now that would just be for the building, not for any land that don't know what that is yet. uh for the difference between the future buildings and the current proposals due to current proposals that
happen the data center and office building and the ad. So now we'll get into a little bit more about what a business subsidy is. A business subsidy is assistance provided by state or local government agency to a private business. And there are several
different types of business subsidies included but not limited to the taxment financing and tax statement loans contribution of infrastructure and other things of that nature. So just want to list a couple of
different examples of how city has used business subsidies in the past. One would be for SL schooling city tiff as well as tiffs for 301 main street apartments and so now we'll talk a little bit more
about tax abatement specifically. So tax abatement captures or rebates only the property tax imposed by granting political subdivision. So a city filing for a school district and each one of those taxing jurisdictions must go to include or deny an abatement.
Uh the taxing jurisdiction works with a developer to agree on a specific amount of tax to be abdated and the length of that abatement. And we'll get into what that agreement is tonight as Elizabeth that uh state statutes do limit how much
abatement uh any taxing jurisdiction can provide and that is 10% of the net tax capacity of that jurisdiction. Uh so for for example the city's tax capacity in 2025 is 4,962,23% of that would be the maximum amount of
all abatements annually that a city could provide. Uh generally uh the taxation does not agree to an abatement of more per year than the new taxes generated. And what I mean by new taxes generated, uh, in the
example there, if there was a property that was currently paying $5,000 in city property taxes and a new development came in, developed the property, new taxes for $50,000, the taxing jurisdiction uh could evade up to that $45,000
again just of that new tax that doesn't currently exist. So every taxing profession that provides a business subsidy must have a business subsidy policy. Uh so PIN has one as well. Our policy identifies various
types of subsidies including tax financing and tax payment. Uh for us when we provide these specific types of we structure them pay as you go. So pay as you go means that a developer or business would have to first pay their
taxes in. Then the city would verify that that business has met the agreed upon goals of the incentive and then would issue a rebate of uh x amount of taxes based on what was agreed upon in
the business subsidy. Uh a subsidy is used to meet a public purpose. So that could be anything from increased tax base, job creation, uh removing blight, promoting revitalization or rehabilitation of a property, meet other goals such as
affordable housing, uh or encourage spin-off development of unsubsidized project development. So now we're going to get into a little bit more of the specifics of the agreement that's before you tonight. And with that, I'll turn it over to Elizabeth who's going to go through that.
So the when the developer developer approached the city and asked if we would be interested in a business subsidy policy, we passed on our uh business subsidy uh or a request. We passed on the policy as Mitch just described. Um we've heard a lot of
public input over the last four or five months and there's been a lot of common themes. Uh one of those themes is jobs. Another theme is how does this benefit the entire community? Uh there are very few ways that a a city can hold a business accountable in regards to jobs.
They're they're private businesses. They're private entities. Uh we don't have a lot of control over that. If the city were to enter into a business subsidy with a business, uh we can base that on job creation goals and that business would have to meet those job
creation goals otherwise they would not receive their business subsidy. Same thing with um allowing this to benefit more than just the city tax base is how can we allow this to better our community. And so this information was
relayed back to the developers. The only way the city would even look at an application is if there was um investment in the community as a whole and then obviously the job creation goals. And so with that, uh, we had some preliminary discussions on what we think
would be a business subsidy request that we could put before council. Um, the developer is requesting an abatement of 36,578,343. I'll let Mike explain how we got to that number in his portion. That would be
over the entire abatement period. um the abatement period. We're looking at two different um abatement timelines. And so the development would be divided into a north project and a south project. 500 street would be the divider of that. And
so each of those project areas could uh have an abatement period of up to 20 years. Uh starting with the south project, the north project would begin uh well the south project would begin when the first certificate of occupancy is issued for the first building. So
what that means is it passed all inspection uh the building itself is built um it's completed and at that time a certificate of occupancy is issued that is when that essentially would trigger that abatement for the north project that would start either 8 years
or when the first certificate of occupancy is issued for any building both on the north portion whichever is sooner. So the longest this abionment period could run is 28 years. However, it could uh conclude earlier depending on when that north project um when that
would be triggered. Uh as Mitch stated, the city only uh uses pay as you go models. And so I think that's where a lot of the confusion comes is there some business subsidies where the city actually subsidizes um payments. So we
pay upfront to a developer or a business requesting business subsidy. That is not what this is. So other taxpayers are not paying for dollars going to this business. It's a pay as you go model meaning that the developer would have to pay their property taxes and a portion
of their property taxes would be um abated or refunded to the developer. No other property taxes um would be paid towards this developer or this business. uh the property taxes that we currently we receive that would be still 100% to
the city. Um what the city also requested is that the first $500,000 of new taxes paid for this development would be unabated. So essentially the city would be guaranteed $500,000 um which would be 100% unabated. That
would be solely for the city. the bayon would not kick in until they have paid that first $500,000 in new property taxes. Um so any taxes over $500,000 that they paid uh that would be abated but it
would be limited to 85% up to um 85% of the city's statutory tax abatement cap. Mitch talked about that we're throwing a lot of numbers at you. Um so as Mitch stated uh the state legislature limits tax abatement to 10%
of the city's tax capacity and so um this would then limit this abatement to 85% of that 10% um pass that cap. So the estimated abatement of the 36,578,343
was calculated using um inflationary values uh for the full buildout of the project. So this abatement would be for the full 482 acres and they would be able to come back and ask for more anything like that. Um once this is done
um that this covers the entire property. Um this also assumes that the city's tax rate would remain the same. So with that being said, um how how does the city benefit from this? Why why would the city um even consider an
abatement? Right? That's that's the question. this big elephant in the room that everyone's wondering uh why why is this even before us tonight? And so assuming that the full $36 million is abated, that means the city received an additional $131 million of new tax
revenue over that abatement period. And so essentially the city is going to be bringing in a lot of property taxes. um due to the city retaining that first $500,000 in tax taxes I mean the abatement kicking in after that the city is recouping quite a bit of property
taxes even before the abatement would even kick in um in addition to that we had the job creation goals um I think almost every person during public input uh was very um adamant that we wanted to ensure the
job creation goals and so that was a top priority when discussing the business subsidy. That's one of the only tools the city has to hold the developer accountable. If they don't create the jobs, they won't get their tax abatement um or it'll be reduced. It's it's that simple. And so the job creation goals
that we have um determined in the agreement would be for the first building, uh it would be 38 jobs. Those would be permanent on-site full-time jobs with each addition additional building or stage is what we're calling
them. um there would be a new job creation goal. And so that job creation goal would drop by two jobs with a floor of 30. So if there was a second building, there would need to be 36 jobs. If there was a third building, 34, a fourth building, 32, and so on and so
forth with a floor of 30 jobs. Um, with the square footage of the land that's available, there's the potential of nine different buildings, which if you do the math, that means at full buildout, they would have a minimum of 290 full-time on-site permanent jobs that would have
to be created or they would not be eligible for the business subsidy. Um, with those job creation goals, we can also send uh apply wage goals. And so the wage that was applied to this is 120% of the average wage in Good Hugh
County. Currently that is uh I think it's $316. And so the average wages for the employees would have to meet or exceed that number. That's why we use a percentage is as the years go on and the average goes up those wages would have to go up as well.
In addition to that, uh I spoke to there would have to be comm community um investment that was very important to the city um due to I'm not sure if everyone knows how uh school taxes are
very different than city taxes. Um but the school can only levy um they have a per pupil formula um that they can only levy a certain dollar amount uh without going out for a referendum for an operating levy. And so it was very
important for the city to see investment in the school. I think we can all agree that the school is the pillar of our community and we wanted to make sure that they were seeing benefits from um this development. And so because they wouldn't be able to uh so essentially
because they have their formula of the levy they bring in, they can't bring any additional dollars in from this development. Um taxes would just go down for the school district portion on everyone's taxes. And so the city negotiated a $24.2
million investment to the school over the 28 years. The developer will be paying the school $500,000 payments per year. those payments increase by $25,000 each year. And that is for the 28-year period. If you did the math real quick, that equals a little over 23 million.
So, where does the other 750,000 come from? um $250,000 will be due uh when uh essentially the job comes to fruition and all the permits, everything like that is approved, the school will get a initial payment of $250,000 and then
when the first certificate of occupancy is issued, the school will receive an additional $500,000 payment. In addition to that, we also want to form a community betterment fund. Um these are dollars that the city can use in whichever way they want. We can invest
in nonprofits. we can um invest in our parks, things like that. And so the developer will be contributing to the city for a community betterment fund. That is $50,000 per year. And those payments would increase by $5,000 each year for a total of 3.29 million over
the 28 years. So this is all in addition to um the dollars that I just said. I threw a lot of numbers at you in a short period of time. Um before I hand it over to Mike, I'll
see if there's any questions. And then I do have one um additional item I would like to discuss >> further mentioning with what we've been presented with. So any questions for Elizabeth yet or need any
spam on any of that? So, one thing I would like to say, I know um so the job creation goals, it says 38 jobs for the first building. Um the developer has indicated they will be hiring um about a hundred uh individuals for um that first
buildout. So essentially, they are satisfying like the first three um requirements. Um so they're just hiring on the front end. So they would meet the job creation goals. I know there's been some um a lot of different numbers about
hiring uh for for BIS. So that's where we get those two different numbers. But >> just to be clear, those are jobs that have nothing to do with the construction, >> correct? Yep. So construction would be in addition to this. This is just for
the operation of the facility. And then when we get to the I think it's project five, there's support for a minimum of 30. Yeah. 678 and >> exactly. So um the the job creation goal drops by two jobs with a floor of 30.
>> So and that's how we got to the um the minimum of 290 full-time on-site permanent jobs um that they they would have to meet that otherwise they they did not receive the subsidy. Um, that would make this Pine Island's largest
employer. >> Very good. >> Any other questions? So, that is um the application that the city received. Um, there are two recommendations that I have for council
that was not in the application. Um, so I spoke about the uh f first $500,000 in property taxes would be unabated um for the period and then anything after
$500,000 would be um that's when the abatement would kick in. I'm recommending to council that we reserve $500,000 in property taxes for each project. So the north project and the south project would each have $500,000 um reserved for the city before the
abatement would even kick in. So for the first eight years, the city would be guaranteed $500,000. The years um 9 through 20, the city would be guaranteed a million additional dollars of property taxes and then those last eight years
would be $500,000. Um that is not in the resolution agreement before you, but that is a recommendation. I'm also recommending that we cap this on the formula used in the agreement before you uh it's percentages. And so uh as Mike
will explain, he's done his best uh to try to predict where things will be in 28 years based on inflation and uh the city's tax capacity growth. Uh but we we don't have a magic eightball as much as we would like. And so, um, I do believe
that he he's done a fantastic job, but it would be my recommendation to cap this at the 36,500 some,000. Um, so that if these numbers were to ever change, there's no way that the um
developer would be able to recoup anything more than the numbers we discussed here this evening. With that, I'll hand it off to Mr. Bubani. Uh, mayor, before uh, Mike speaks, if I may, can you hear me?
>> Yes, sir. Bob, how are you? >> I'm great. Thanks, Mayor. Um, I just want to confirm with Elizabeth and with council. Uh, so I I think I've tracked Elizabeth the uh, exchanges you've had with Ron Batty, my colleague who's working on this agreement. the the the
manner in which those changes you just talked about would be accomplished are he he understands the way that would be done and it's fairly straightforward how that would be done. So to the extent the council might agree with you after Mike
speaks to those issues. Uh the the way forward on those changes is fairly straightforward. Do I have that right, Elizabeth? >> Yep, that's correct. So, if council were to choose to um approve any sort of agreement
um or approve the resolution and agreement before you um we would be requesting that um that it's subject to minor changes um with approvals from Bob or myself or um Bob's colleague Ron who
has been the one drafting this agreement um just so that we could configure those staff changes is into the final agreement. Um, yeah, Bob, did that answer your question? >> It did. Yeah. I just wanted to be sure that I understood, you know, I've been
party to the conversation, the emails you've had with with my colleague Ron. I think it's it's clear that it's understood how that would be accomplished. But I just want to be sure that to the extent the council might agree with that that the the way forward in that is is quite clear to everyone,
you and Ron and and the other folks that have to do that drafting and you've confirmed that's the case. So, perfect. >> Yep. >> Okay. Well, good evening, Mayor and Council. Um, it's been a minute since I've been before you, so I might even see a couple of new faces here as Paul.
I think the last time I was here, we were financing a street improvement project. So if any of you were here at that time, nice to see you again. Um, okay. So we were engaged to do the calculations for the Oh, sorry. I got to share the screen.
I'm not following instructions. There we go. We're engaged to do the calculation for what this is worth in terms of tax abatement in light of all of these extraneous um agreements and agreement points such as the limitations
on the amount being abated etc. So uh Mitch did a nice job talking about property taxes in general. Um but where it really starts is the market values of the buildings and how quickly they're developed. the higher the value, obviously the more taxes that are paid, the more quickly these things are
developed, the sooner that money comes in and could generate more money over the life. Um, so what we see here is we're starting with and I'm referring to it as phase one and phase two, but when I say phase one, I'm referring to the south project and phase two will be the
north project. Um, [clears throat] the starting value as Mitch presented was 45 million and change for that first uh building or two. Uh and then there was a three more lots on on south project where the starting value could
be um I had 38,750 for each building and then you'll see these values for each building is an increasing. Should I zoom that in? Okay. So, you see the value I have increasing
uh 2% a year. And so, the buildings in yellow um at this point in time in the spreadsheet are not actually built yet. What I was trying to say was building two if it was magically built today would be 38 million, but it won't be built for a couple years. So when it is
built, it'll it'll start at 40 million. See what I mean? And so forth. So you can assume that anything in the yellow is just sort of background information will not be captured. >> Mike, can I just say one word? So clearly only one building, one data
center has been approved to be built for purposes of trying to calculate 28 years in advance. We kind of did a worst case scenario of buildings being built, how quickly can they be built, things like that. So we can capture the most amount
of taxes that could be abated so we have the most accurate numbers. So I know it talks about multiple buildings. Only one data center has been approved. I just wanted to put that disclaimer out there. It's just so that we can get kind of the largest number possible if they were to
build as fast as possible. This is I don't want to say worst case scenario, but essentially that's what it is in regards to the numbers. Sorry, Mike. Um, another thing to point out is imagine a building is uh constructed this year in 2026. Taxes don't go up in 2026. They
don't go up in 2027. They would hit 28. There's a 2-year delay. This is when those taxes hit in. So, my construction year and my payable year you'll see are two years apart. Um, now it might be that the first building is or is not built in 26. Maybe it's built in 27. Um,
but in if that's the case, everything just skips one year. Um Mitch also showed you the formula for the uh tax uh totling tax on commercial property. The first 150,000 is classified at 1 and a.5% every dollar
thereafter 2%. So if you do that math um $900,000 is the tax base on the first building. Then it goes up a little in the second year due to that inflation. But then two years later there's the potential of a second building. until this tax base tax capacity and tax base are the same thing by the way if you
hear those terms interchange. Okay. Um but you see the tax capacity going up as each new building is completed. So if we take the tax base and multiply it by the current tax rate or at least the 2025 tax rate at the time uh of 82%
that means potentially $739,000 could be part of the tax abatement for the fish deal. And if you recall from Mitch's presentation, we calculated 739,000 in taxes in this presentation as well. So we're um symmetrical there.
Now, um just because that's the max abatement, that doesn't mean that's what they're getting. Um Elizabeth mentioned two restrictions. One is we're going to withhold the first $500,000. And then the other one is is um our annual
statutory cap of um 10% of our net tax capacity. we're only hitting these 85%. And of the of the two restrictions, I felt like that second one was pretty important because the discussion that I had with staff at the time was if you were to allow 100%
of your tax abatement to be used for this project, that takes a tool out of our shed for other projects in the future. And not just economic development projects. Sometimes we're using tax abatement um to finance projects that are difficult to finance under sort of standard statutory
authority like sewer projects and water projects are easy to do but swimming pools are not. So sometimes you know we'll need a tax abatement financing for a swimming pool. So we wanted to make sure that a portion of that tax abatement cap is retained for those
sorts of things that could or might show up. Okay. So this is just the phase one number. I separated out phase 2 and phase two. The logic I'll just leave this one zoomed out for a moment. Is the exact same logic. Here's all the
starting uh values. They're all in yellow because they're not expected to be built anytime soon. Potentially they could happen real soon. But the way the abatement is being written is that on the north project the second phase
their 20-year clock starts at least [clears throat] 8 years out. Meaning if they don't get stuff started by the eighth year the clock at we don't want this thing lasting until eternity right that 20 clock at at the latest will be
eight years from the first building being built in phase one. Um, so the maximum duration would be for taxes payable 255. If they don't build as quickly as that, it doesn't matter. That's as far as we're going to go up. Um, all right. So,
same logic here. Here's all the increasing market values for the various potential buildings. Here's the maximum uh tax base and then the potential tax abatement. So, I take phase one and I phase two and now I've got this combined
really well my gosh that's small um worksheet because what I needed to do now the next step was to determine what's our 85% cap on our on our net tax capacity and so I have an assumption that the current tax base of the city
which is in the $5 million realm um that's going to go up every year I mean people's home values go up we're going to have a small business here. Things like that happen. So, I've just got 3% broke on that. But, you know, when these $45 million buildings are built, all of
a sudden, your tax base is much bigger. So, that 10% cap gets bigger and bigger and bigger and bigger. Um, and so I needed to calculate the tax base for each one of those phases, phase one and phase two. So, I'm pulling these numbers in these two columns here. I'm just
pulling them from those first two tabs that I showed you. So now I'm getting our total tax base the increased value on existing property as we see it today as well as each of those moon build dates. So if I apply that now I'll zoom in here.
So when I apply the 10% max that means in these years you know in this particular year your max tax abatement for all abatements in the city combined could be $770,000. So the number in yellow is 85% of that
number. Okay. And that's important to show because now I've got to calculate I've calculated what their maximum abatement hypothetically could be, but now I got to start taking dollars away, right? And reducing what they're getting.
I'm sorry for this. No, sorry. So, here's our potential max tax abatement. Here's our withholding of $500,000 from that max. And then uh here is our payments based on these restrictions and there's
additional reductions not on the first building because we're not going to get to our 85% limit. But then you see with the second building we're going to exceed that 85%. So I got to start not just reducing 500,000. I got to reduce more to keep our share of that tax bay
for future use [clears throat] if we ever use it. Um so over here in the yellow you'll see let me focus on this one. Um I pulled this from the previous tab. So our our max uh abatement that year it
was 6 54,000. So I had to reduce that year by 300 an additional 303,000. People said that's 654. That's 85%. So, when I do that and I scroll down to the bottom,
here's your $36 million total. So, that's taking into account $500,000 being withheld and then withholding additional money as needed to stay under that 85% of our cap. So, one of the numbers that was
presented in um I think it was Mitch's uh presentation by Ben Elizabeth was well what's this financial benefit to the city and she had told you 131 million. Let me zoom out a little bit. So, here
is um sort of our natural levy um going forward. Um the amount of tax abatement we'd have to use, but here's the 500,000 we're withholding. Here's the additional withholding uh to
stay under that 85%. And you'll can see um that we're maintaining that tax rate at 82%. Okay, going forward. And so if you take that $500,000 a year plus these huge numbers and reductions due to the 85% cap and you add those two
columns together, it adds up to that 131 million over the 28 period. Now, what I don't want council to do and what I don't want anyone in the public to do is to say 28 years from now, well, I'm going to be dead. But 28 years from now,
say Mike, you said 131,21,780 and it was only 126 million or it was 145 million. These are estimates, right? I think they're reasonable, but they're going to be wrong, right? I think what you should take away from this is that
from the narrow view of city finances, this is huge. That's what you can take away from this. All right. Another point I should make is unlike tax increment financing, tax abatement is um administered a little
differently. When we set up a tax income financing district like we did with South Southeast and the apartment building across the way, once that's set up, the county just automatically calculates the revenue and then sends it to us. We don't have to necessarily budget for it. They figure it all out
and they send it to the city with their tax elements. with abatement. Each year, as part of the budgeting process, the city is going to have to calculate how much abatement you're going to be sending in the following year and add it to your levy resolution. So, what that
means is, and I want the public to understand this, is that when this starts, when these abatement levies kick in, you're going to see a huge increase in the tax levy. You know, you always see the articles in the paper. City of Spring Valley low raised their tax levy
7% this year. And everybody's, oh, 7%. Well, in this case, it's going to be a huge percentage because of these huge numbers we're talking about. But recognize that this is all being offset by the new tax base of these buildings. So, despite these huge increases in the
levy, notice over here, the tax rate isn't changing. So the calculation of everybody's taxes behind me won't change, right? They'll see these huge levy increases, but they're not paying for it. Those buildings are paying for it. Okay? I just want to be absolutely clear. I wanted the minutes. I'm hoping
this thing's being recorded so that two, three years from now when people come to the truth and taxation hearing, they understand what's going on. Another point to make, just because we're withholding $500,000 doesn't mean you're going to collect the
$500,000. You have to levy for it, right? If you want that $500,000, you have to levy for it. So, you could opt as an alternative is, for instance, on these abatements, um you could just do the levy for the
abatement payments and not levy $500,000. you don't have to collect it, but if you do that instead of collecting more revenue, everybody else's taxes go down, right? So, you could do one or the
other. You could raise the $500,000 and use it for whatever you want and keep the tax rate right where it is and everybody pays what they're paying now. Or you could not levy that $500,000 and that means everybody else is paying $500,000 less. So, so their taxes go
down. Or you could do a blended approach. Maybe we'll lug you 250,000 out of that and then look at taxes and go down for the other portion. Okay? So I just want to recogn that you all recognize that the 500,000 doesn't just come, right? You have to ask for it. You
have to levy for it. Okay? Uh so there's great flexibility there. And I guess my final point would be on this 131 million just recognize this is only the potential benefit based on the levy increases. It does not take
into account that three plus million dollars worth of community development donations that you'll be getting from the company. Um, that's on top of this. That's not included here. >> Elizabeth, did I miss anything? >> No, I think that's good. I think a lot
of the miscommunication is people assuming that they are paying for this, that they're subsidizing. So, I think that was helpful to discuss how if our tax rate stays the same, their taxes will either stay the same or they will
go down. Um, they will not be going up in any regards to pay for this. >> Right now, having said that, in 2026, I I'm not sure where they haven't finalized taxes yet. They'll probably happen in March this year. Um, so I don't know if your tax rate is 82% this
year. Maybe it's 85, maybe it's 79. I don't know where it is. Um, and I don't know where it'll be in 2027 because you might just do the standard 3 to 5% increase in the levy. I don't know what the tax rate will be there. What I want people to understand though
is logically that when the levies kick in for the abatement, whatever the tax rate is will remain unaffected. The only way the tax rate gets affected for people in the back is if you choose not to levy that $500,000
in which case people see a tax rate decrease but not an increase due to this fri. Their taxes could increase for other reason you know school whatever but not because of these buildings. No, I appreciate that clarification
because I know one of the few remarks that has come back is their concern about the the uh that $36 million amount and whether or not the residents are going to be on the hook to cover that gap. U so I
appreciate that clarification because that I mean the numbers show that that's just not >> so we should go down that road a bit, mayor. So the 36 million uh Elizabeth was proposing should be capped in the agreement instead of just saying we think it's going to be 36 million but it
ends up being whatever it is I agree I like the idea of a cap though we know if things go gang busters and the numbers are just coming crazy faster than even this maybe we're out of this contract sooner than we think that's awesome right um so I think there should be a
timing restriction which we have already and there should be a tap to um and recognize be because it's a pay to go contract. Let's say things don't go as well as what we think. If the revenue doesn't come in like it's
showed here, um does the city have to levy existing taxpayers to make up the difference? No. If we get to the end of the life of the contract and we haven't fully repaid the 36 million, do we have to cover the shortfall, meaning on the backs of the folks behind me? No. All of
the risk is on the developers or it should be or simply saying, "Hey, you build these buildings, you hire these people, you pay them what you say you're going to pay them, you pay your taxes on time, if you do all those things, once we collect it, some of it's going to
come back to you. But if for some reason it doesn't come in the way we think, um, nobody here is on the hook for the difference. Very good. Any questions? Mr. Bubani, it's been a few.
>> It's been a little while. Sorry. Appreciate that. >> Questions for other words, we will uh move into our public hearing portion of the
meeting. uh just because there's a few new faces in the audience. Just a friendly reminder when we do our uh public input with this, we we ask you to come up to the lecture and here you're going to um state your name and your
address where you're from there. Um we just ask and reminder that we want people to be civil when they're talking up here. That's um discussing uh refraining from personal tax or name calling or anything like that. So, I appreciate the people's behavior the
last couple meetings on that. Um, please be respectful uh when others are speaking. So, side comments in the back, please refrain from those because it does pick up on the microphone and those that are listening online are not able to hear us clearly. Um, and we are
asking you to avoid doing, you know, positive and negative reactions. We've discussed that in the past. Last council meeting went very well. So, I appreciate that. uh because we are here to conduct business and we thoroughly want people to be able to speak. That's part of our
government process. We just ask that people are going to be respectful. Um I think tonight we are going to be doing two and a half minutes that should give people some time um to be able to share their thoughts and uh
go from there. [clears throat] So I'll take a motion to over public hearing. I'll second motion second. >> Hi Vernon I >> David. >> So first up we have Joyce Lanners.
>> Good evening. Fairness and accountability must prevail. Tonight, Grand Island stands at a defining crossroads, one that will shape our city's finances, our values, and our future. We are being asked to approve an approximate $36 million tax abatement
for a hyperscale data center owned by multi-illion trillion dollar corporations. While the responsibility for covering that law shifts into the onto the hardworking families and existing businesses of Pine Island, tax
abatements were created to help new and struggling businesses gain a foothold, not to provide massive financial gifts to corporations with deep profits. Even Microsoft, a trillion dollar tech giant building data centers right here in
Minnesota, has publicly refused to pursue local tax abatements. Its president stated, quote, "It's both the right thing to do and essential for long-term sustainability to not seek local property tax abatements." End
quote. That is leadership. That is accountability. That is integrity. Over 28 years, residents and local businesses would pay approximately $33 million in additional property taxes to offset the city's lost revenue if this tax
abatement is granted. This is not just about numbers on the spreadsheet. It's also about fairness. Pine Island deserves a city government that stands up for its residents, not one that transfers our hard-earned tax dollars to multi-billion trillion dollar
corporations. Tonight, let us draw a clear line. Say no to this unjust tax abatement. Demand accountability. Demand fairness. Let these corporations pay their fair share just as Microsoft has chosen to do. The future of our
community depends on it. Thank you. >> Thank you. >> Next we have uh Mr. Rodney Lanners. Mr. Lers. Um, I ended up this road. Um, and I thought
I would uh give an opportunity for anybody to question what I have on that. There are a lot of numbers here. that they're specific to the line. There are a lot of numbers here tonight. I was talking about when a project is complete
in the process, but if you specifically look at the $36 million, it's called a tax abatement because they don't pay tax for $36 million. That money will come directly out of the
resident's pockets and the businesses currently in town to pay for that 36 million. I put 33 million because as you seen presented there was 3 million was given back to
the city for called it community betterment fund. I'm not going to read the rest, but is there anybody here that would question what I just said or
what's on this brochure is what I So anyway, um anyway, the numbers are accurate. If Google should bail like the Chinese company in Kentucky, >> sir, >> if you want to speak, you'll have your
turn at least not a time for not right now is not a time. >> This is my speech time. >> Correct. That's for you to address the council. Okay. The council got 40 40 seconds left.
>> Anybody in the government want to question these numbers? I appreciate the the handle. So, we will lose $36 million that'll come out of our taxes to make it up. >> Thank you.
>> Thanks, sir. >> Mary. Hi, Mary Baker 554 Street Southwest and just yesterday Elon Musk announced the merger of SpaceX and XAI. His goal solar powered data centers in space. He says
two to three years. Like a lot of people, I just rolled my eyes. However, when I investigated further, I found out Microsoft already has plans for one in a year. The video is also working on the same plan. So then I looked at his
opponents, people who are obviously no fan of Elon Elon Musk at all. They say solar powered space data centers are coming in approximately 5 years. Even more interesting was the reason these
companies gave for all of this. They're a whole lot cheaper. Data centers on Earth cost too much, take up too much space, require too much energy, and cause massive pollution. They actually admitted by statements that the cost been hardening to residents is
horrendous. Something we've been trying to tell this board and mayor and city administrator for months. What does this have to do with tax abatement for a Pine Island data center? First of all, this data center could be obsolete by the
time a building is even finished. Second, it certainly will be when the computers have to be replaced in their approximately 5-year lifespan. And third, the council, mayor, and city administrator of setting instead of getting a few do tax dollars out of the
data center are going to grant a tax abatement program to a company worth billions and billions of dollars for a building that is highly likely to be obsolete in a short amount of time, which means the city and residents of
Pine Island will not receive a single tax benefit. I'm going to leave you with two words. Beta and AR 245 Street. It feels feudal to speak at this
meeting, but saying nothing feels wrong, too. It's obvious that the risks to our community and the environment and quality of life far outweigh the purported benches, at least to the vast majority. Those concerns and voices fall
on deaf ears. The council seems to have dollar signs in its eyes and your unwillingness have you need discussion with those opposed has been disheartening. At some point we'll learn more about
your motivations. But how much harm will be done before that is the fear of those who have have no voice in this process. >> Thank you. U Robin Small
>> Robin 805 Southeastern Pine. Um I stand before you tonight like I have several other um council meetings to express concerns about the path that the city has chosen in regards to the data center. Over all the months of meetings, the driving factor behind why
the council has supported this project has always appeared to be the financial benefit and economic development to our community and that a large part of that included the tax revenue and what it would be um what it might mean for those of us who live here. I really appreciated the
information you shared tonight about the financial perspective and it is heartening to see that there will be some money going back into the community. However, I guess I still really question why we would feel the need to give an abatement to a hundred
billion dollar company. They don't need our startup funds. We could benefit from every bit of that tax money to grow things in our community. We need to put up a new water tower to support this development. It is being built in that development. That water tower is to be
paid for by the city. Why not take all of this tax revenue? We are taking a hit on our quality of life, our environment. We're going to have things we need to fix because the status is here. Let's collect the money they owe us in order
to compensate us for what we are losing because of their press. Thank you. >> Thank you. >> No flapping, please. Reverend David Dirkson reporting. Tonight it was mentioned that there's
potential of 290 jobs being created. But what wasn't pointed out is that this is an agricultural community. Many of us moved here because we didn't want to live in Rochester or the city but become the large largest employer in
this area and it's going to change the city. This decision will commit us as a community till 2055. Think about that. 2055. This is a weighty decision. You're
incentivizing basically changing this community forever. And your community members time and time again said, "Please slow down. This is a way decision. Let's not pour
gas on this fire. Let's slow it down. Let's not move fast and break things. Let's slow this down. Let's take every opportunity to make a deliberate choice so that the community isn't harmed.
I don't necessarily understand all the finances pieces, but what I do understand is we're incentivizing this to be built in our community. And there's plenty of community members who have spoken tonight and other nights that I've told you we do not want this.
Do our voices matter? Do you actually care about your community members? That's what I'm asking. Can you just slow it down instead of speeding up? Slow it down. That's all we're asking. We're just asking you to be reasonable. This
is a weighty decision that's going to change this community to 2055. 85% of that cap is gone. That 10% we have gone till 2055. You're tying the hands of future city council members until 2055. This goes
through. Maybe we should spend some more time before we just referencing everything else. Thank you. >> Uh we have Rob Warby. >> Good evening. My name is Rob Warick and I'm the acting chair of the Pan School
Board. I want to take this opportunity. I've been on the school board for almost 16 years now and I can say this a long due to ranking to this to this city council for all of the schools um for keeping us in your minds uh inner
city decisions as well as uh in negotiations between businesses. I've been on the school board like I said 16 years and I remember when this was not the case. When I joined the board in 2010, the relationship with the with the city on the school was dysfunctional and hostile at best.
For this reason, the board at that time approached the city council and invited them to be a part of what was called and is now called CPT, the community planning team. And that would be be made up and is made up of township board members, city council members, mayor, um
chambers, city administrators, township, as I said, library to name a few. Um it is not a non-quorum non-decision-making group. Um that team used this time to together meet once a month share uh what
each other is currently doing what we are planning on doing and what we look forward to doing in the future if possible. This time together allowed us and all the powers of be to be able to create a strong collaborative and synerggetic relationship that continues to this day. It helped
pass the 2013 bond that brought that beautiful elementary to this building or to this town and has helped both the city and the district grow together as we made decisions. So again, I want to say thank you or to give a long overdue, as I said before, thank you for the city
council for all has done to help the city and the school grow together in the last 16 years. Thank you. >> Thank you, sir. That concludes our public input. Take a motion to public motion. Second proposal.
Um Delena. >> Hi. >> Vernon. >> Hi. >> Brandy. >> Hi. >> David Biz. Hi. >> So, we do have the motion for the resolution for resolution 26-08.
with the um amendments that were brought forth. We can ask staff to um get that figured out for council meeting. That's an option or um you can move to approve the
resolution tonight. So that will be up to if you'd like to have staff take a look at that and fix the make those corrections. We had the uh the recommendations for the Cre. >> Would that get improved? Would that get
added in this if we approved it today? >> You can you can make a motion to approve with those uh additions on there. >> So, the the resolution before you 26 um-08 does not have the $500,000 broken out
between the north and the south project. and it does not have the cap of the um estimated tax statement. So, if you were to approve this evening, those would have to be amended to be added and then that um if approved as well. We're just
asking that we have the language that it's subject to minor provisions by um the city and staff. So, we can include those. >> I recommend approval with allow adjustments if you're out of the water. >> That's for the additional 500,000
>> added language. >> I'll second that >> motion in a second regarding resolution 26-08 including the changes. Bob did hear those changes as well so that he was able to make clarifications.
Thanks. Mayor. >> Yes, sir. >> Just just before you vote, uh, Elizabeth, who's in the room, it's I've got a little echo here, so I just want to be sure. Elizabeth, you understood the motion to include those two changes
that you just referenced. Is that right? >> Yes, that's my understanding. >> Yes, sir. Um, in addition to any m other minor revisions um that attorney or staff would need to to do, I think there's a few other sentences that we need to clean up.
>> Yep. Very good. Thank you. >> All terms and conditions would um remain at in the resolution. >> Perfect. Thanks. >> Motion and second and thank you staff for your work on that and Mike for giving the numbers so people can
understand that as well. And just to put on the record, that number would be 36,578,340. >> Yes. >> Okay. Um, Delena, >> hi. >> Holton. >> Hi, Vernon. >> Hi. >> Brandy. >> Hi.
>> And I will be I Well, which brought to close our special meeting. Um, as we'll take a five minute break. If people want to stay for the work session, they're welcome to do that. We're going to start
with our age friendly presentation, Miss Norava. Um, I'll take a motion to the special meeting. >> I'll make a motion. >> I'll second all in favor. >> Thank you everybody.