HomeMy WebLinkAbout5J - Parcels to be Occupied by Structurally Substandard Buildings
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
JUNE 16, 2008
SJ
PAUL SNOOK, ECONOMIC DEVELOPMENT DIRECTOR
CONSIDER APPROVAL OF A RESOLUTION FINDING PARCELS TO BE
OCCUPIED BY STRUCTURALLY SUBSTANDARD BUILDINGS
Introduction
City Council is asked to consider approval of a resolution finding parcels in the
downtown area to be occupied by structurally substandard buildings. The reason
for the resolution is to preserve the City's ability to include these properties in a
future redevelopment TIF district.
Historv
In 2002 the City purchased the property at 16318 Main Avenue SE (commonly
referred to as Joes Pizza)
Last month, the City entered a purchase agreement for the property at 16328 Main
Ave SE (commonly referred to as MN Nails). The transaction is scheduled to close
later this month.
The City's intent in purchasing and demolishing both properties is to remove blight
as defined in Minnesota Statutes 469.174, Subd. 10, and provide additional public
parking and to encourage redevelopment. In the near term the two properties would
provide surface parking. In the long term, both properties would become part of a
parking structure/mixed use building redevelopment in the downtown. This is
supported by the City's 2030 Vision and Strategic Plan, Comprehensive Plan, and
2004 Downtown Parking Study.
Current Circumstances
In order to forward downtown redevelopment, it is highly likely that a tax increment
financing district will need to be created at the appropriate time in the future for
specified purposes permitted in the underlying development statutes such as site
improvements, public and onsite utilities, demolition, etc.
In order to create this type of tax increment financing district, it must be determined
that before demolition or removal of substandard buildings, certain conditions exist
throughout the proposed tax increment financing district. Those conditions are that:
· Parcels consisting of 70 percent of the area of the district are occupied by
buildings, streets, utilities, paved or gravel parking lots, or other similar
structures, and
· More than 50 percent of the buildings, not including outbuildings, are
structurally substandard to a degree requiring substantial renovation or
clearance.
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To include a building (that is soon to be demolished and removed) in a future TIF
district, Council must first pass a resolution before the demolition and removal,
finding that the parcel was occupied by one or more structurally substandard
buildings, and that after demolition and clearance the Council intends to include the
parcel within the future tax increment financing district
The two buildings referred to here were found to be substandard in accordance
with state statute. Building Official Bob Hutchins conducted an inspection of the
buildings and both have been designated as structurally substandard. No TIF
district has been created as of this date but this action will preserve the City's ability
to do so in the future.
Conclusion
The City intends to include the two subject parcels in a redevelopment tax
increment financing district at some point in the future. The two buildings qualify as
being structurally substandard and therefore could be used in creating a future
redevelopment tax increment financing district in the downtown.
ISSUES:
For purposes of inclusion in a future TIF district, a parcel is determined to be
occupied by a structurally substandard building if the Substandard Building
Condition is met within three years of the filing of the request for certification of the
parcel as part of the tax increment financing district with the county auditor.
The City has three years, from the date of resolution approval, to include these
parcels in a redevelopment TIF district, and file for TIF district certification. If this
does not occur within the three years, the parcels cannot be used in a TIF District
FINANCIAL
IMPACT:
The use of tax increment financing could help the City to develop new downtown
tax base, jobs, improve commerce, and increase public parking in the downtown.
The extent of the financial impact is considered to be positive but the magnitude is
unknown at this time.
ALTERNATIVES:
1. Adopt the attached resolution finding the parcels at 16318 Main Avenue SE,
and 16328 Main Avenue SE to be occupied by structurally substandard
buildings, and that after demolition and clearance the Council intends to include
the parcels within a future tax increment financing district.
2. Take no action.
RECOMMENDED
MOTION:
Alternative 1
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4646 Dakota Street S.E.
Prior Lake, MN 55372-1714
RESOLUTION OS-xx
A RESOLUTION FINDING PARCELS TO BE
OCCUPIED BY STRUCTURALLY SUBSTANDARD BUILDINGS
Motion By:
Second By:
WHEREAS, The City Council for the City of Prior Lake, Minnesota, (the "Council"), has determined
that in order to realize redevelopment in the downtown area of the City, a tax increment
financing district to be designated a redevelopment district as defined in Minnesota
Statutes, Section 469.174, Subd. 10 will need to be created; and
WHEREAS, In order to create this type of tax increment financing district, the Council must make a
determination that before the demolition or removal of the substandard buildings,
certain conditions exist; and
WHEREAS, The conditions that need to be found by the Council to exist throughout the future tax
increment financing district prior to establishment of the district are that parcels
consisting of 70 percent of the area of the district are occupied by buildings, streets,
utilities, paved or gravel parking lots, or other similar structures, and more than 50
percent of the buildings, not including outbuildings, are structurally substandard to a
degree requiring substantial renovation or clearance; and
WHEREAS, A parcel is deemed to contain a structurally substandard building if the Substandard
Building Condition exists within three years of the filing of the request for certification of
the parcel as part of the tax increment financing district with the county auditor; and
WHEREAS, In order to deem a parcel as being occupied by a structurally substandard building,
buildings must be inspected and the Council must first pass a resolution before the
demolition or removal of the structure, that the parcel was occupied by one or more
structurally substandard buildings, and that after demolition and clearance the Council
intends to include the parcel within the proposed tax increment financing district; and
WHEREAS, An inspection of parcel number 25-002-006-0 (known as "Minnesota Nails") in the
downtown area of the City has been completed by the City's Building Official in
accordance with State Statute; and
WHEREAS, An inspection of parcel number 25-002-008-0 (known as "Joe's Pizza") in the
downtown area of the City has been completed by the City's Building Official in
accordance with State Statute; and
WHEREAS, Parcel number 25-002-006-0 (known as "Minnesota Nails") contains one structurally
substandard building to be demolished or removed; and
WHEREAS, Parcel number 25-002-008-0 (known as "Joe's Pizza") contains one structurally
substandard building to be demolished or removed.
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Phone 952.447.9800 / Fax 952.447.4245
NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA as follows:
1. The recitals set forth above are incorporated herein.
2. That 15% of the area of parcel number 25-002-006-0 contains improvements and is occupied by
one or more structurally substandard buildings.
3. That 15% of the area of parcel number 25-002-008-0 contains improvements and is occupied by
one or more structurally substandard buildings.
4. That after demolition and clearance the Council intends to include parcels 25-002-006-0 and 25-
002-008-0 within a future tax increment financing district.
PASSED AND ADOPTED THIS 16th DAY OF JUNE, 2008.
YES
NO
I Haugen I
Erickson
Hedberg
LeMair
I Millar
Haugen
Erickson
Hedberg
LeMair
Millar
Frank Boyles, City Manager
R:\Council\2008 Agenda Reports\06 16 08\Substandard Bldgs - Resolution.DOC