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City Council Minutes 06-02-2025 SpecialMINUTES MONTICELLO CITY COUNCIL SPECIAL MEETING Monday, June 2, 2025 — 5 p.m. Monticello Community Center Present: Lloyd Hilgart, Kip Christianson, Charlotte Gabler, Tracy Hinz, and Lee Martie (arrived at 5:20 p.m.) Absent: None Staff: Rachel Leonard, Angela Schumann, Tom Pawelk, Matt Leonard, Jim Thares, and Jennifer Schreiber 1. Call to Order Mayor Lloyd Hilgart called the special meeting to order at 5 p.m. 2. Data Center Discussion City Administrator Rachel Leonard initiated the discussion noting the purpose of the meeting is to discuss the City's overall approach to potential data center projects and gather City Council feedback. She noted the intent is not to discuss specific projects, rather staff is looking for clarification and continued direction for implementing policies and interacting with interested developers. For example, she noted that per current Council direction, staff have been upfront with interested developers that no monetary incentives will be offered by the City. Ms. Leonard shared that there is current interest in properties located to the south and northwest of Monticello for potential data center projects. These proposed developments are significantly larger than most existing data centers in Minnesota, prompting staff to seek further guidance from the Council. She added that the zoning ordinance regulating data centers is under development. The interest expressed so far has come from developers focused on hyperscale data centers, which typically require more than 200 acres. In response to a question from Council Member Hinz about whether all data centers are hyperscale, Ms. Leonard clarified that while not all are, the two parties currently considering Monticello are pursuing hyperscale facilities. She also noted that, for any project to be considered, the land must be guided for light industrial use, and Xcel Energy must determine the feasibility of providing the necessary power infrastructure. Mayor Hilgart asked what would happen if one project was approved and others followed. Ms. Leonard explained that all the land under consideration lies within City Council Special Meeting — June 2, 2025 township boundaries and would require annexation, giving the City full authority over whether to move forward with any specific project. Community Development Director Angela Schumann asked the Council what elements or outcomes they would like to see if a data center were to be built in Monticello. A majority of Council members highlighted the potential to significantly grow the City's tax base. Council Member Martie added that the construction phase, expected to last around 24 months, would also contribute positively to the local economy. Ms. Leonard raised the issue of infrastructure costs, to which most Council members responded that developers should be responsible for covering the full costs of infrastructure expansion. She noted that while the City has already taken the stance of not offering incentives, additional direction is needed to determine what level of financial risk or upfront cost it is willing to take. Council member Christianson emphasized that the developer contribution should include all related improvements, such as water towers, wastewater treatment plant upgrades, and water plant expansions. Council Member Hinz expressed that she struggled with hypotheticals and wanted more clarity on the projects. Council Member Christianson suggested additional research, likely from hyperscale data centers in other states, to better understand the scope of the development. The Council also discussed broader community benefits. Beyond the increase in tax revenue, members questioned other direct advantages for residents. Mayor Hilgart pointed out that significant variables remain, making these developments potentially risky. Council Member Gabler noted that if a developer funds infrastructure extensions to their site, it could benefit the City by bringing utilities closer to areas slated for future residential development. Council Member Martie noted the growth in tax base could help facilitate some of the City's other priorities. The Council questioned what standards would be used to determine benefit. Ms. Schumann provided examples of standards, including buffers and landscaping, lighting, and noise control. Ms. Leonard stressed that with this much land at stake, the City must ensure there is a clear benefit. The Council expressed that they have ongoing questions but view this as a potential opportunity so directed staff to continue their research and work on the ordinance. Ms. Schumann noted that draft ordinances and policy recommendations will be brought forward at a future meeting. City Council Special Meeting — June 2, 2025 3. Adjournment By consensus, the meeting was adjourned at 6:10 p.m. Recorder: Jennifer Schrei r 'J� UU Attest: City Council Special Meeting — June 2, 2025 zJ -'% - City Adinmstrator '