Special pledge of allegiance and to 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 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 baitment 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 passed passing 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 so they create taxification rate formula which would be a market value 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. I have up there on how each one of those varies in their
tax capacity. Um now for determining taxes, property taxes table are determined by the net capacity time tax rate jurisdiction to get the property taxes payable. So an example of a property taxes table
for a resident merchant company with a taxable market value of $500,000 each for just the city portion passes residential as you can see would be $4,100 and commercial be $7,585
near so what does this mean to our finan county assessor's office based on information that developed provided the subject office has an estimated taxable market value of $45.1 million for the
data center office building. Uh then for example for compare that to financial market value for all existing commercial industrial for,64,200. Uh so if the factor value is determined
to be that 45.1 million it would nearly double the current commercial industrial market. Um so what does this mean for these property taxes? So based on those previous formulas we showed the net the net tax pass would be $91,250.
The city property passes annually based the 2025 tax rate would be $739,25. Now just remember estimation projections we don't know why any bill of 50 assessment has assessed building that potential future investment plan of 482
major development based on what was presented in the R. I won't go over all these numbers. Uh but what would the tax market value be for future like industrial buildings that they were of equal size to this? Uh each building potentially had a tax to market value of
$37 million. Now that would just be for the building not for any land that we don't know what that is yet. Uh so the difference between the future buildings and the current proposal is due to current proposal the data center and
office building and the 80 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
good but not limited to the tax 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 a kind that's
used businesses in the past. One would be for self schooling city tiff as well as tips for 301 main street apartments. So now we'll talk a little bit more about tax abatement specifically.
So tax captures or rebates only the property taxes imposed by granting political subdivision. So a city finally or school district and each one of those taxing jurisdictions must vote to approve or deny an abatement.
Uh the taxing jurisdiction works with a developer to agree on a specific amount of tax to be evated 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. So for example the city's tax capacity in 2025 was 4,962,2%. 10% of that would be the maximum amount
of all abatements annually that a city could provide. Uh generally uh the tax commission 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 taxation that provides a business subsidy must have a business subsidy policy. Uh so Pand has one as well. Our policy identifies various
types of subsidies including tax financing and tax abatement. Uh for us when we provide these specific types of budies we structure them in 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, um 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 um 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 built on the north portion whichever is sooner. So the longest this evasion 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 paint. 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 paying
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 payment 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 p. Mitch talked about that
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 wouldn't 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 assume 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. That's the 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'd 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 matching 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 this. So that's where we get those two different numbers from >> 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. >> Then when we get to the I think it's project five, there's a core minimum of
30. Yeah. Yeah. 678. >> 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 five 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 for
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 thousand. 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 the 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 we can
fall. 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
here. I'm not following instruction. 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 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. Phase two will be the
north project. Um, the starting value as Mitch presented was 45 million will change uh 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 million750 for each building and then you'll see these values for each building is 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 and not be captured. >> Mike, can I just say a 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 that we just skip one here. Um Mitch also showed you the formula for the uh tax uh to calcul 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 and 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. So 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 first deal. And if you recall from Mitch's presentation, he 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 that are easy to do. But swimming pools are not. So sometimes, you know, we'll do a tax abatement financing for a swimming pool. So we wanted to make sure that a portion of
that tax abatement tap is retained for those sorts of things that could might show up. Okay. So this is just the phase one number. I separated out phase two 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 eight 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 20th clock at at the latest will be 8 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 that it doesn't matter. That's as far as we're going to go off. 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 my phase two and now I've got this combined really oh 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% growth 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 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 buildates. 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 calculate I 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 spreadsheet. 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 the 500,000, I got to reduce more to keep our share of that tax bay for future use 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 is 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 and 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 bait we'd have to use, but
here's the 500,000 we're withholding. Here's the additional withholding 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 in reductions due to the 85% cap and you add those two columns together 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 your 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, 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 want it in the minutes. I'm hoping this thing's being recorded so that two, three years from now when people come to the truthful 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 let you 250,000 out of that and then let the taxes go down for the other portion. Okay? So I just want to recognize 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, right? 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 benefits 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 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 would have been 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 project. Their taxes could increase for other reasons 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. Uh 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 it 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. So 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 time restriction which we have already and there should be a tap. 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 repay 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 where it should be. We're 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 Elizabeth. >> She's otherwise 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 here. You're going to um state your name and your address where you're from there. Um we just ask 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 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. So I'll take a motion to open up for public hearing. I'll second motion second to >> hi >> hi
>> Vernon I will be against >> so first up we have Joyce Lanners >> good evening fairness of 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 loss 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, I this roure um and I thought I would uh give an opportunity for anybody to question what I have on this road. There heard a lot of numbers here. 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 that 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? >> So anyway, um anyway, the numbers are accurate. If Google should bail by the Chinese government in Kentucky, >> if you want to speak, you'll have your turn at le
time for not right now is not a time. >> This is my speaking time. >> Correct. That's for you to address the council. Okay. The councilman got 40 40 seconds left. >> Anybody in the government want to question these numbers?
I appreciate the the hand up. So, we will lose $36 million that'll come out of our taxes to make it up. >> Thank you. >> Thanks, sir. Mary Baker.
>> Hi, Mary Baker 54 Street Southwest. And just yesterday, Elon Musk announced the merger of SpaceX and XAI. His goal solar powered data centers in space. He says it took to three years. Like a lot of
people, I rolled my eyes. However, when I investigated further, I found out Microsoft already has plans for one in a year. Nvidia is also working on the same plan. So then I looked at his opponents,
people who are obviously no fed Elan 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 harming 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 AR520. 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 any 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 Small 805 Yardo Drive Southeastern Pine Avenue.
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 appreciate 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 center 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 flag, 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. They 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 knock more
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 armed.
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 have told you we do not want this.
Do our voices matter? Do you actually care about your community leaders? 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 waiting 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 represent everything else. Thank you. Uh, we have Rob Warny. >> Good evening. My name is Rob Warick and I'm the acting chair of the Panama
School Board. I want to take this opportunity. I've been on the school board for almost 16 years now. I couldn't say this long or do you think you to this to this city council for all set up 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 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-quum not a 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 to 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. Um, Dana, >> hi. >> Vernon, >> hi. >> Randy, >> hi. >> David Biz, I >> So, we do have the motion for the resolution
for resolution 26-08 with the U amendments that were brought forth. you 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 need to make those corrections the recommendations for the
>> correct one. Would that get improved? Would that get added in this approved state? >> Correct. You can you can make a motion to approve with those uh additions on there. Okay. >> 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 the allow adjustments.
>> That's for the additional 500,000 >> added language. I'll second that >> motion and a second regarding resolution 26-08 including the uh 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, 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 other 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. I have a 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 36,578,34. >> Yes. >> Okay. Um Delena, >> hi >> Colton Vernon. >> Hi Brandy. >> Hi.
>> And I will be I as well which draws to close our special meeting. Um as we adjourn 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. >> Um I'll take a motion to during the special meeting. >> I'll make a motion. I'll second all favor. >> Thank you everybody.