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Page 1 of 1 CONSENT ITEM – 7J MEMORANDUM DATE: October 25, 2021 TO: Honorable Mayor and City Councilmembers Dave Perrault, City Administrator FROM: Gayle Bauman, Finance Director SUBJECT: Termination of Abatement Agreement for the Land O’ Lakes Expansion Project Budgeted Amount: Actual Amount: Funding Source: Max $650,000 over 15 years $0 Economic Development Authority Council Should Consider Motion to approve, table or deny the following: •Terminate the property tax abatement agreement for the Land O’Lakes expansion project and authorize the City Administrator and/or Mayor to execute necessary documents to finalize the termination. All items need a simple majority for action unless otherwise noted. Background In 2016, Land O' Lakes requested an abatement of new property taxes generated by the expansion of its headquarters campus in Arden Hills. On April 12, 2016, Land O’ Lakes, the city of Arden Hills and Ramsey County entered into an abatement agreement for the tax increment on the new Land O’Lakes headquarters. The agreement was later amended on March 28, 2017, due to a numerical error. Discussion Land O’ Lakes is now requesting termination of the abatement agreement. Land O’ Lakes indicated circumstances have changed for the company and the pandemic in particular had an impact on the level and pace of job creation. Job creation is a required metric for which the company was allowed to seek financial benefits under the abatement agreement. As a result, Land O’ Lakes is no longer seeking the past or future benefits of the abatement agreement. Ramsey County took a similar action at their October 12, 2021 meeting. Budget Impact With the dissolution of the abatement agreement, collected taxes on the new value of the Land O’ Lakes headquarters campus expansion by all taxing jurisdictions shall be retained. Attachments A.Land O’ Lakes Termination Notice