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HomeMy WebLinkAboutTIF District No. 2-2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PRIOR LAKE APPROVING TAX INCREMENT FINANCING DISTRICT NO. 2-2 AND THE USE OF TAX INCREMENT FINANCING ~-CJ SECONDED BY: It 6-: MOTION BY: WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, ".-- I If- d L". "'// If p ~-t vI r. RESOLUTION 94-12 & <5, the City Council of the City of Prior Lake, Minnesota (the "City") has previously approved Development District No. 2 (the "Development District") and in connection therewith adopted a development program; and it is desirable and in the public interest that the City undertake and carry out a tax increment finance plan for Tax Increment Financing District No. 2-2 pursuant to Chapter 469 of Minnesota Statutes, encompassing the area which is more particularly described on Exhibit A attached hereto and made a part hereof, (which area is herein called the "District"); and the City Council has reviewed "Tax Increment Financing District No. 2-2, dated March 8, 1994" (the "Plan Booklet"), which sets forth a tax increment financing plan for the District; and the Plan Booklet sets forth the City's estimate of the fiscal and economic impact of the District on the tax capacities of all taxing jurisdictions in which the District is located; and the Board of Commissioners of Scott County, Minnesota, has been notified of the public hearing for the review of the Plan Booklet; and the School Board of Independent School District No. 719 has been notified of the public hearing for the review of the Plan Booklet; and The City has received and considered the comments of the Board of Commissioners of Scott County and the School Board of the Independent School District No. 719 respecting the contents of the Plan Booklet; and the City-on March 8, 1994, after having published a notice of public hearing in the official newspaper of the City, conducted a public hearing on the Plan Booklet and received public comments on the same. 4629 Dakota 51. 5.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNllY EMPLOYER It T NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA, as follows: 1. The City finds and determines that there is a need for the activities of Development District No.2 to be financed in part by the tax increments from the District. 2. The City finds and determines that the activities to be financed by the tax increments from the District will carry out the objectives of Development District No. 2 by encouraging industrial development, providing job opportunities and enhancing the tax base. 3. The City finds and determines that the provision for job opportunities and the preservation and enhancement of the tax base are in the public interest of the City and the expenditures of the District are a public purpose. 4. The City finds and determines that the tax increment financing plan as set forth in the Plan Booklet having been duly reviewed and considered is hereby approved and adopted, and the area described in Exhibit A hereto is hereby designated as an Economic Development District and Qualified Manufacturing District pursuant to Minnesota Statutes, Sections 469.174, Subd. 12. and 273.1399, Subd. 1, respectively. 5. The City finds and detelmines that the District is an Economic Development District because it will result in increased employment in the City, and that it will result in preservation and enhancement of the tax base of the City. 6. The City finds and determines that 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 and therefore the use of tax increment financing is deemed necessary. 7. The City finds and determines that the tax increment financing plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of the District by Plivate enterprise. 8. The City finds and determines that the tax increment financing plan set forth in the Plan Booklet confOlms to the general plan for the development of the City as a whole. 9. The reasons and supporting facts for findings 5, 6, 7 and 8 as set forth on pages 2, 3 and 4 of the Plan Booklet are by this reference confirmed, approved and adopted. 10. The City elects to retain tax increment revenues generated in District No. 2-2 pursuant to clause (a) of Minnesota Statutes, Section 469.177 Subdivision 3, Paragraphs 1 and 2. By making this election tax increment revenues generated within District No. 2-2 will not be made available for calculation or sharing with the fiscal disparity provisions of Chapter 473F. 11. The City Clerk shall request the auditor of Scott County to certify the original tax capacity and original local tax rate of the District approved by this resolution. 12. The City Clerk is hereby directed to file a copy of this resolution with a copy of the Plan Booklet to the Minnesota Department of Revenue. 13. The City hereby states its intention to use all of the captured tax capacity for purposes of II" T tax increment financing as per the conditions set forth in the Plan Booklet. Adopted by the Prior Lake City Council this 8th day of March, 1994. {Seal} YES Andren Greenfield Kedrowski Scott Schenck Andren Greenfield Kedrowski Scott Schenck NO Frank Boyles City Manager City of Prior Lake l' . AGENDA #: PREPARED BY: SUBJECT: DATE: BACKGROUND: DISCUSSION: ISSUES: ALTERNATIVES: STAFF AGENDA REPORT ~ 2 ~IX\ FRANK BOYLES, CITY MANAGER "- PUBLIC HEARING TO CONSIDER RES. UTION 94-12 TO ESTABLISH TAX INCREMENT FINANCING DISTRICT # 2-2 FOR BECKER ARENA PRODUCTS PROPOSAL March 18, 1994 Becker Arena Products has reached a tentative agreement with Roger Guenette of Advanced Resources for development which would entail the construction of a 6,000 square foot facility to be owned by Becker Arena Products on Lot 3, Block 1 - Waterfront Passage Business Park. Mr. Guenette has shared a copy of his financial analysis of this business proposal with the City Council. After confirming that the development does accomplish the City's desired objectives, the Council directed that a public hearing be conducted on Tuesday, March 8, 1994 at 5:00 p.m. to determine whether the City Council should adopt a Resolution approving Tax Increment Financing District 2-2 and the use of tax increment financing. Attached for City Council information is a Tax Increment Financing District 2-2 plan prepared by Roger Guenette. The plan is required under Minnesota Statutes for the creation of a tax increment financing district as proposed above. The project addresses the statutory issues and requirements with respect to the Becker Arena proposal. Councilmembers should review the proposed plan in preparation for the public hearing. The City Council has established criteria which each proposed Waterfront Passage Business Park project should meet. Basically, that criteria has required that tax increment funds pay for project activities . and improvements and generate sufficient funds to assist future development projects. The proposed projects meet the City Council's criteria and, based upon the financial data supplied previously to the City Council by Roger Guenette would be a positive addition to the business office park. In order to proceed with the project, it is necessary for the City Council to adopt a resolution approving the Tax Increment Financing District 2-2 and the use of tax increment financing. The following alternatives are available to the City Council: 1 . Adopt the attached Resolution 94-12 approving Tax Increment Financing District. 2-2 and the use of tax increment financing for the Becker Arena Products project. -1- 4629 Dakota 51. 5.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNIlY EMPLOYER 'I' T" ." . AGNTIF Page 2 2. Defer approval of the resolution pending the receipt of additional information. RECOMMENDATION: Adopt resolution 94-12 approving Tax Increment Financing District 2-2 and the use of tax increment financing. The project meets each of the City's financial criteria, and the building would be a positive addition to the Waterfront Passage Business Park. ACTION REQUIRED: Motion to adopt Resolution 94-12. AGNTIFWRT -2- T T" TEn A. ALLEN 19011'L1'IMC CLouD DaIYr.. fJCI lMN PJwax. UDlNII01'A SDN Atlem9 ~ CormsJfJT ~ ('U) "MIni PACIIMlLI: ('\2) MM111 ~CalYl:: ""UI15 ~~.. ~~ G-,f~"'.!!rr-r- March 1, 1994 ~-? ----- --. ....'.......- .Mr. James Becker Beclcl!r Arcna Products, ~e. . P.O. Box 416.:. Chanha.uen, MN ,55:317 Re: Prior Lake 'tlr Deu Jim: ~uant to your request, I have revieWed dtc Development Agreement between you and the City of Prior Lake and have the following comments. 1. Article I defines the tum "Soil Co~ection.f1 As we discussed, there does Dot seem to be a reason why there should be aps on the amo~t-that is allocated to soil correction and to utility hook-ups. As long as the cxpendiNrcs you incur fit within the reimbursements which arc allowed by Statute, there should not necessarily b~ _ sp~cifie dollu limit to any puticular item" of the reimbursa~le ..: expenses. 2. - "Unavoidable Delays'" is also defined. It contains an exception for acts of the City. In othu'words, delays ta\1sed. by the City are not .unavoid~ble." The result of this could be that the City, thro~h its actions or inaction, causes you not to . . get the project .complcted on time. II ~uld suggest that thc best way to handle this is a specific agreement by the City that it will not delay Of u.nreasonably withhold any consent or action it is req\1cstcd to take. This can be ac:complished by adding a paiagraph 7 to Section 2.1 reading as fonows: The City will not delay nor: unreasonably withhold any consent or action requested of it by De\re1oper or otherwise contemplated b)' this agreement. 3. .Section 2.2 (4) contains a wuranty by you that you will obtain permits in a "timely manner." The proposed change to Section 2.1 will remedy possible problems with City delays. 4. Section 2.2 (8) requires that you CQoperatc with the City with. respect to any litigation commenced with respect: to the Project. This should be limited by adding the following: ,- _._.-~- ~.. _~ '_""~__"=~~~~~_A~-a"__:-.'_ ~_l ~ -- _~.. ~~: " j\~.!:(~~. ~. .~i"t, " " '" .~-----_..~~-~._..~---_.._-_...._--_.._----_..-----I...--------..-.--.-----------...---.-.---.-.--.-~-. ~ . . FF01 : Ted A Alll!f'l PI-DE I'(). : '612 S42 0171 Mar. 97 1994 11:S1AM P3 Mr. James Becker March 7, 1994 Page 2 " .' D~lopci"s cooperation with the City shall not include any payment of money by the Developer withc)ut the specific written consent of the Developer. What t "&fI). concerned with here is th~t the City" may agree with .the -adverse . party in-litigation to conclude the .~cr by buying off the other party with your money and then tUrn around and'claim that you must cooperate by paying the moncY~ This is; of course; grossly Unfair to you if you would not otherwise agree to the settlement. Therefore) by requinng your consent to any payment, you would "riot"be forced into settling sontething which you should not have to settle. S. . Section 2.2.(lO} provides for you to pay a "per incident" .fee for public services. ". Ostensibly. these fees are paid "in lieU of propcrty taxes that wOUld otherwise be collected and disbursed were it not for the tax increment financing ..." My understanding of tax incrcment finanpng is that the taxes generated by the TIF are paid to the city nther than to the eounty or school district. Therefore, it would seem on the face of it tha.t th~ taXes are in fact being con~cted at a highet' rate by the city rather than a lower rate. I would suggest either that this clause (19) be deleted entirely or that it be qualified wi~ the following language: 6. Section 2.2 (12) provides a warra.nt)': by you that you will complete the Project by December 31, 1994. An exception is ma.de for Una.voidable Delays. However, the definition of Unavoidable Delays extepts delays caused by the City. I would suggest that there be a provision added to Section 2.1, the City's warranties as follows: The City has no knowledge of anything which would prevent the Project from beJng completed by December 31, 1994, subject to Unavoidable Dda~ including within its knowledge an estimate of the reasonable time for review of the Project by the City and its agencies and commissions. If the City is aware that the review process could cause the Project not to be completed by the end of the year that should be addressed now rather than after ,.. ..... ~ . J -....-.. .....\,,'-~..:1 March 7, 1994 Page 3 7. In Article III the term "LGAlHACA" is used. This is nor de6ned and should be. 8. Section 3.3 provides a guarantee by you of the amount of .revenues which will b~ gene.rated by the TIF and the Project. Then: should be exceptions to this guarantee as follows:. . . . . (1) Developer shall not be liable to the City for any shomal! in the tax increment revenues resulting (rom actions taken by the City Ot failure of the City ~ ta~ allY action which results in a reduction in the" tax . increment revenues. .No . . (2) Developer shall not be liable to the City (or any sho.mall in the tax increment revt:nues resulting frqm changes in law which eausc a reduction in the amount of real estate tll(ca collectable. 9. Article IV defines Events ofDe.fault and the remedies that the City inay pursue in the event of default. Section 4.2 (2) p'rovi~es that the City may not terminate or caned the Agreement if there exists ,a good faith dispute between you and the City. This exception should be txpand~ to include a good faith diapute with anyone. Section 4.1 (1) provides that failure to pay real estate taxes is an event of default. If you arc contesting the amount of tuts in gOod faith. an Evont of Default should not exist, even though the dispute might be with someone other than the City. In additiont commencement of fo~dosure proceedings is an'Event of Default allowing the City to terminate ~e Agreement. If you have a good Faith dispute with the mongagee and provide;adcqua~ security to protect the. Ci~, there is no reason why the City should ,t that point cancel or terminate the Agreement. . . . . . 10. Section 4.5 is an agreement by you to pay attorneys fees in the event of I. dispute. This provision should he rnutu4 That is, if mere is. a dh.-pute and it is determined that it is the City which is at &ultt your' attorneys fees should be reimbursed. ~ I I :, I 11. Be sure to rmew the required insurance Coverages with your agent. 12. Paragraph 6.1 prohibits your assignment pf the Agreement. Since you will be leasing the property. an exception should,be specifically placed in this paragraph to deal with that: Leasing of all or any portion of t~c Property by Developer shall Dot be in violation of this Agreement. f >1 : Ted A Allen -....-...---..--...--...--..---...-...--.--..--..--...-..--..---..-....--..---..--..--..-..-...-..-- I ( , PHONE NO. : 612 942 0171 MaJ-. 07 1994 11:S3RM ps -~ ..- _ ..h_..... _ _. .. ._ ~ .~.. .._ . ~__ I .. .'--- :..:. . .:', ~ I . . - ,,,:.,.,.. ,. . I. . .~ .. _J:.. ._ .~..__~ I j.r~ ;, , .. "'. . ~ - - - -" - - . - -- .'. . - . Mr. James Becker March 7, 1994 Page 4 13. S.ction 7.2 provid.. that you ha.. 30, days '''Iy after an ""'t allOwing you to l1:rmina.. the ~m""t aris.. in whish to terminate the agr<:eJn.nt. If you &ij to gi.. written notic:e of termination within the 30 day period. you 10.. the right. A. · P"'ctic:al matter, unre... the event,gMng you tl-.. right to renninall> i. 10 serious that it cannot be remedied, you will be in negotiation with the City to by to COttect the prohl.",. y au want to do this project. Th. City Wants you ro do this project. It ....... to m. that this p~sion could hinder ",.h.r than hclp what you both want ro a<COlllplish. ~ should be more flcxibility in the rennination provaion. This <an be ata!mplished by imening the foUowing: Provided. that during any perio~ in w!U<h the City and n....loper ... n.gotiating a 1'Clt\cdy to. or adjuslln.nt because of the ...." giving ria. to the righ, to rennina.., the 30 day period shall be 'uspended. . ~ . -.: 14. Exhibit B i. to includ. the legal descrip~on. of the1'ropcrty. Appam,t1y. the City &.. not yetapptO>cd the plat of the property. ThCRfore,.a true kpJ description <annot be provided. Presu..,.J,Jy. you ha.. been provided with a drawing of the property you intend to )l1lrCh.... I would IUggest that YO" _ ha"" a d.linition of the location and tow sqUIt'C footage of the property you will b. purchaling. In addition, there should be a definition of the buildable area of the Pmpcny. the genc:ra.l configuration of the lot and location of ac:eeu an utility a"Bilability to the lot. It is possible tha, the lot. "linaIIy platted would not be lUi,able to your need.. In su<h 2ft .......t.)-on should be able to 'eJeer another lot or to get OUt of the transaction entirely. . ~ 15 . You really don', need the Guarantee (ExJubit C). Since you .... personalIy entering into the agreement, you ha\le direct 1ia~ilii)t - . - 16. The legal de,cription for both the Aequired P~M De~d(~bii E) and the Ce:tili<a'e of Completion and Rele... of Forfeit= (Exhibi, F) will need '0 be . correc:ted if there is any <hange to the IepJ description of the property YOu will be acquiring. I 1 -J -I: ~I r. "I .~ - 17. The Aequired Property Deed provides that the Cenili.... of-Completion and ReI.... of Forfeiture will be attach.d .. "Exhibit F.' This shOuld. be changed to Lr.hibit A. Otherwise, there Will be potential tide problem, in the future bued Upon a. tide examiner nying to determine Where and what Exhibits A-E are. . , If you ha.. oth.r questiOIU or concerns, ple..e gi..' me a calL ~, ! ~ I Vezy truly yours, ...-=L'~~_____.._._.__.__._ ~" . ~ " .