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HomeMy WebLinkAbout01-139 RESOLUTION NO. 01-139 RESOLUTION ADOPTING A MODIFICATION TO THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO. 1; AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 3 WITHIN DEVELOPMENT DISTRICT NO. 1 AND ADOPTING TFI~ TAX INCREMENT FINANCING PLAN THEREFOR. MOTION BY: Petersen SECOND BY: Gundlach BE IT RESOLVED by the City Council (the "Council") of the City of Prior Lake, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. The City Council (the "Council") of the City of Prior Lake (the "City") has heretofore established Development District No. 1 and adopted the Development Program therefor. It has been proposed that the City adopt a Modification to the Development Program for Development District No. 1 and establish Tax Increment Financing District No. 1-3 (the "District") therein and adopt the Tax Increment Financing Plan therefor (collectively, the "Program Modification and Plan"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, 469.124 through 469.134 and 469.174 through 469.179, all inclusive, as amended, (the "Act") all as reflected in the Program Modification and Plan, and presented for the Council's consideration. 1.02. The City has investigated the facts relating to the Program Modification and Plan and has caused the Program Modification and Plan to be prepared. 1.03. The City has performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Program Modification and Plan, including, but not limited to, notification of Scott County and Independent School District No. 719 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Program Modification and Plan by the City Planning Commission, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Program Modification and Plan and to the activities contemplated therein have heretofore been prepared by staff and submitted to the Council and/or made a part of the City files and proceedings on the Program Modification and Plan. The Reports include data, information and/or substantiation constituting or relating to the bases for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (9551) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.5 The City is modifying the boundaries of Development District No. 1. Section 2. Findings for the Adopfion and Approval of the Program Modification and Plan. 2.01. The Council hereby finds that the Program Modification and Plan, are intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development in the public purpose and accomplish certain objectives as specified in the Program Modification and Plan, which are hereby incorporated herein. Section 3. Findings for the Establishment of Tax Increment Financing District No. 1-3. 3.01. The Council hereby finds that the District is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469.174, subd. 10 (a)(1). 3.02. The Council further finds that the proposed redevelopment would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the Tax Increment Financing Plan, that the Program Modification and Plan conform to the general plan for the development or redevelopment of the City as a whole; and that the Program Modification and Plan will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the District by private enterprise. 3.03. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. 3.04. The City of Prior Lake elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, subdivision 3, clause a, which means the fiscal disparities contribution would be taken from outside the District. Section 4. Public Purpose 4.01. The adoption of the Program Modification and Plan conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the City which is already built up, to provide employment opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. Section 5. Approval and Adoption of the Program Modification and Plan. 5.01. The Program Modification and Plan, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the City Clerk. L: \01 files\01 eda\RESOLUTION 1-3 .doc 2 1- 7 5.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Program Modification and Plan and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. 5.03 The Auditor of Scott County is requested to certify the original net tax capacity of the District, as described in the Program Modification and Plan, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the City of Prior Lake is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The City Manager is further authorized and directed to file a copy of the Program Modification and Plan with the Commissioner of Revenue. Passed and adopted this 17th day of December, 2001. YES NO MADER X MADER GUNDLACH X GUNDLACH ERICSON ^bs t ERICSON ~,tn{ PETERSEN X PETERSEN ZIESKA X ZIESKA (Seal) Frank~oyle~Manager L:\01 files\01 edaXRESOLUTION 1-3 .doc 3 EXHIBIT A RESOLUTION #01 - 139 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 1-3, as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that Tax Increment Financing District No. 1-3 is a redevelopment district as defined in M.S., Section 469.174, Subd. lO(a)(1). The District consists of seven parcels, with plans to redevelop the area for senior housing and commercial purposes. At least 70 percent of the area in the parcels in the District are occupied by buildings, streets, utilities, or other improvements and more than 50 percent of the buildings in the District, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance (See Appendix D of the TIF plan). 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment .financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of Tax Increment Financing District No. 1-3 permitted by the Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the redevelopment proposed in this plan meets the City's objectives for redevelopment. Due to the high cost of redevelopment on the parcels currently occupied by substandard buildings, the limited amount of commercial/industrial property for expansion adjacent to the existing project, the incompatible land uses at close proximity, and the cost of financing the proposed improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistance (see attachment in Appendix E). The increased market value of the site that could reasonable be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the Plan: The City supported this finding on the grounds that the cost of site and public improvements and utilities add to the total redevelopment cost. Historically, site and public improvements costs in this area have made redevelopment infeasible without tax increment assistance. Therefore, the City reasonably determined that no other redevelopment of similar scope is anticipated on this site without substantially similar assistance being provided to the development. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in the District, the total increase in market value would be up to $10,151,600. The present value of tax increments from the District is estimated to be $1,266,546. It is the Council's finding that no development with a market value of greater than $8,885,054 would occur without tax increment assistance in this district within 25 years. This finding is L:\01 fil es\01 eda~RESOLUTION 1-3 .doc 4 based upon evidence from general past experience with the high cost of acquisition and public improvements in the general area of the District(see Cashflow in Appendix C of the TIF Plan). 3. Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 1-3 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the Plan and found that the Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 1-3 will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Development District No. 1 by private enterprise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, the renovation of substandard properties, increased tax base of the State and add a high quality development to the City. Through the implementation of the Plan, the City will increase the availability of safe and decent senior housing in the City. L:\01 files\01 edaLRESOLUTION1-3.doc 5