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Home My WebLink About7A - Creekside Commons 16200 Eagle Creek Avenue S.E. Prior Lake, MN 5537~1t1~nl JN~II A~I=NnA Rl=pnRT MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: DECEMBER 6, 2004 7A JOHN SULLIVAN, COMMUNITY DEVELOPMENT DIRECTOR FRANK BOYLES, CITY MANAGER CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING (1) A PROPOSED MODIFICATION TO THE DEVELOPMENT PROGRAM AND PLAN FOR DEVELOPMENT DISTRICT NO.3, (2) THE MODIFICATION OF TAX INCREMENT FINANCING DISTRICT 3.1, (CREEKSIDE COMMONS SENIOR RENTAL PROJECT) AND, (3) DIRECTING THE CITY STAFF AND ATTORNEY TO PREPARE A TIF DEVELOPMENT AGREEMENT ON BEHALF OF THE CITY. Historv: On October 15th, 2001, the City Council adopted a resolution approving in concept the use of tax increment financing (TIF) to assist in the development of a senior housing facility on Five Hawks Avenue. The project, called Creekside Commons, contained 54 rental units for seniors 55 years of age and older. Twenty per cent or 12 of the units were to be made available to persons earning 50% of the County median income and the rents for these units were to be consistent with the ability to pay i.e. rents not to exceed 30% of annual income. On November 5, 2001, the Council adopted a resolution ordering the creation of Development District 3, TIF District 3-1 and the preparation of a TIF Plan for the project. In addition, the Council then set a public hearing date of December 17,2001 to hear comments on the Plan. A public hearing was required by statute before a TIF District could be created and a TIF Plan adopted. The County Board of Commissioners and the School District received a notice of the original public hearing and a copy of the original TIF Plan. The County did have some concerns regarding the project at the time of approval, and they were as follows: Scott County had reviewed this request in 2000/2001 and the County staff recommended the request be denied unless the applicant revises the rents for the 12 units to $653 per month which is considered affordable under Housing and Urban Development and Minnesota Housing Finance Agency standards for persons earning 50% or less of the median income in the County. The applicants agreed to a reduction in rents for the 12 units affected for the life of the TIF District. The County took the position that the rents for the 12 units should be no more than 30% of the income of a person making 50% of the County median income or $653 per month for a one bedroom apartment. C:\Documents and Settings\KeIlyM\Local Settings\Temporary Internet Files\OLKIFA\CITY COUNCIL AGENDA REPORT 12-6-04 CIC Conversion and Modification to TIP 3-1 Creekside 1 (2).cJWlW.ci1;t1ofpriorlake.com Phone 952.447.4230 / Fax 952.447.4245 At their December 11, 2001 meeting, the County Board expressed concern that the rent structure for the unsubsidized market-rate units had increased. They asked what evidence we have that the higher rents would be marketable. Stonegate Apartments, which were under construction, indicated their rent structure will be comparable. The applicant had confirmed through their consultant that the rent structure was appropriate for the Metropolitan area. Sid Inman of Ehlers concurred. In the end, the Board voted unanimously to approve the original TIF program. The City also approved the TIF program. Current Circumstances A copy of the proposed modification to the TIF Plan and the Development Program for Development District 3 is attached. This proposed language was also sent to the County as well as the School District for review and comment. The present value of the increment to be generated is approximately $516,246 which is the same as was contemplated in the first request. The major change is the ownership of Creekside Commons. The initial ownership was one entity. In a meeting a few months ago, all parties agreed to limit ownership to three entities. Now the applicant is seeking virtually unlimited ownerships. The Prior Lake Planning Commission, according to State Statute for TIF, considered a resolution via public hearing for this proposed modification. The November 22, 2004 Planning Commission public hearing was held and the Prior Lake Planning Commission Resolution 04-013PC was approved, stating, "The City of Prior Lake Planning Commission finds that the Modification of the Development Program for Development District NO.3 and Modification to the Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 conform to the general plans for the development and redevelopment of the City of Prior Lake". The City Council should be aware that the Planning Commission onlv considers the conformance of the proposal with the Comprehensive Plan. By contrast, the City Council considers all aspects of the proposal. The District consists of 54 units of rental housing in the City of Prior Lake. Construction began in the fall of 2001, and was completed in 2002. The purpose of this proposed modification is to convert the ownership of the project to a Common Interest Community (CIC). This will allow the owners to ultimately transfer ownership from corporate and partnership entities to personal ownership. The housing units will remain rental. ISSUES: Some time ago, the staff was contacted by the developer of Creekside Commons who indicated they would be seeking a modification to the district. According to the developer, if they could own the building and its units through multiple interests then they could realize significant insurance premium savings. At a work session the City Council discussed this request and did not seem to be disposed to make the modification requested. C:\Documents and Settings\KellyM\Local Settings\Temporary Internet Files\OLKIFA\CITY COUNCIL AGENDA REPORT 12-6-04 CIC Conversion and Modification to TIP 3-1 Creekside 1 (2).doc 2 CITY OF PRIOR LAKE SCOTI COUNTY STATE OF MINNESOTA Council member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION ADOPTING A MODIFICATION TO THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO. 3 AND ADOPTING A MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 3-1 THEREIN. 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.3 and adopted the Development Program therefor and established Tax Increment Financing District No. 3-1 and adopted the Tax Increment Financing Plan therefor. It has been proposed that the City adopt a Modification to the Development Program (the "Development Program Modification") for Development District No.3 and adopt a Modification to the Tax Increment Financing Plan (the "Tax Increment Plan Modification" or together with the Development Program Modification, the "Modifications") for Tax Increment Financing District No. 3-1 (the "District"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.124 through 469.134, and Sections 469.174 to 469.1799, inclusive as amended (the "Act"), all as reflected in the Modifications, and presented for the Council's consideration. 1.02. The Council has investigated the facts related to the Modifications and has caused the Modifications to be prepared. 1.03. The City has performed all actions required by law to be performed prior to the adoption and approval of the proposed Modifications, including, but not limited to, notification of Scott County and Independent School District No. 719 having taxing jurisdiction over the property included in the District, and the holding of a public hearing upon published notice as required by law. 1.04. The City is not modifying the boundaries of Development District No.3. 1.05. The City is not modifying the boundaries nor term of the District. Section 2. Findings for the Tax Increment Plan Modification 2.01. The Council hereby reaffirms the original findings for the District, namely that the when the District was established, it was established as a "housing district" under Minnesota Statutes, Section 469.174, subd. 11. In addition, the City makes the following findings: (a) The Tax Increment Plan Modification conforms to the general plan for development or redevelopment of the City as a whole. The reason for supporting this finding is that the Tax Increment Plan Modification will generally complement and serve to implement policies adopted in the City's comprehensive plan. (b) The Tax Increment Plan Modification will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Development District No.3 by private enterprise. The reason for supporting this finding is that the development activities are necessary so that development and redevelopment by private enterprise can occur within Development District No.3. (c) The development and redevelopment efforts, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and therefor the use of tax increment financing is deemed necessary. Section 3. Public Purpose 3.01. The adoption of the Modifications conform in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State which is already built up, to provide housing opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. Section 4. Approval and Adoption of the Modifications; Filing. 4.01. The Modifications are hereby approved, and shall be placed on file in the office of the City Clerk. Approval of the Modifications does not constitute approval of any project or a development agreement with any developer. 4.02. The staff of the City are authorized to file the Modifications with the Commissioner of Revenue and the Scott County Auditor. 4.03. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Modifications and for this purpose to negotiate, draft, prepare and present to this Council for its consideration all further modifications, resolutions, documents and contracts necessary for this purpose. The motion for the adoption of the foregoing resolution was duly seconded by Council member , and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Dated: December 6, 2004 ATTEST: Mayor City Clerk (Seal) o halleland lewis nilan sipkins & johnson PA :"ttOIIlP'.", dt I avv i p.\ tor) p '1'.,~1'1 \ <E'Ii!',-I"t.Hfrh no '.r,u:h ',i)lh '.ltep1 !,lilll'f-cO"""'. t.H\J ,),).Hl<' .1<;lil utk" hI) 338 1838 fd; "L' '38 ','1"3 h.;iki<...4nd,((Jrn Suesan lea Pace Direct Dial: 612.573.2902 Email: space@halleland.com October 8, 2004 Mary Ippel, Esq. Briggs and Morgan 332 Minnesota Street, #W2200 S1. Paul, MN 55101 Sid Inman, Senior Vice President Ehlers and Associates, Inc. 3060 Centre Point Drive St. Paul, MN 55112-1122 RE: Creekside Commons Dear Mary and Sid: Both of you are preparing various documents relating to the proposed amendment to the Creekside Commons TIF plan and Development Agreement. Notwithstanding the fact that Messrs. Mesenbrink, Gensmer and Huemoeller have offered several reasons for the amendment, including decreasing Creekside's insurance premiums and a lower interest rate on their permanent financing, J believe we should focus on the fact that converting the project to . a Common Interest Community (flCIC") will allow Mr. Mesenbrink and Mr. Gensmer ("Owners") to ultimately transfer ownership from corporate and partnership entities to personal ownership. So basically the project will be converted to a C IC to facilitate the Owners' estate planning. The Development Agreement should specify: (1) how many CIC units each Owner will own, and the unit number; (2) that the units may not be offered for sale until the TIF expires, which I think is in 2024; (3) that the sale or transfer of any unit by an Owner to a private party, other than a partnership or corporate entity owned in whole or in party by one of the Owners is a breach of the Development Agreement and the result will be that no further TIF payments will be paid to either Owner; (4) the Owners will certify yearly that (a) all units remain rental, and (b) twelve (12) units are designated "affordable" (defined as 600/0 of the DN: 233895 Mary Ippel, Esq. Sid Inman, Senior Vice President October 8, 2004 Page 2 median income of the County) and are not occupied by any person(s) who does not meet the applicable eligibility criteria; and (5) that the Owners waive any and all claims against the City in the event TIF payments are discontinued. I'm assuming the TIF Agreement and/or Development Agreement will include appropriate language requiring the Owners to indemnify and hold the City harmless from any and all actions, etc. The public hearing on the TIF Amendment has been scheduled for December 6, 2004. Once you have completed preparation of draft documents, I would like the opportunity to review them. Sincerely, ~tft Suesan Lea Pace Prior Lake City Attorney SLP/mrg cc: Frank Boyles, City Manager John Sullivan, Community Development Director ON: 233895 01 halleland lewis nilan sipkins & johnson PA Attorneys at Law / P.A 600 US Bank Plaza South 220 South Sixth Street Minneapolis, MN 55402-4501 Office: 6123381838 Fax 612338 7858 www.halleland.com November 29, 2004 Suesao Lea Pace Direct Dial: 612.573.2902 Email: space@ballelaod.com Harold Jesh, Housing Development Consultant Harold Jesh, LLC 2055 High Court Sauk Rapids, MN 56379 RE: Proposed Amendment to the Creekside Commons TIF Plan and Development Agreement Dear Mr. Jesh: It is my understanding that you are now the primary contact representing Mr. John Mesenbrink and Mr. Larry Gensmer on the proposal to convert Creekside Commons from a rental apartment building to a Common Interest Community. As you know, this issue has been pending for approximately one year. The City Council's original, informal reaction, at a Workshop, was not positive. I believe their view was based on the rationale provided by Mr. Mesenbrink and Mr. Huemoeller for the proposed change. Discussions continued on and off for a period of time and at each discussion a new rationale for allowing the conversion of Creekside Commons to a CIC was offered. In a meeting with the City Manager, City Staff, Sid Inman, Mary Ippel and me that occurred in late September or early October, Messrs. Mesenbrink, Gensmer and Huemoeller presented additional reasons why Creekside Commons should be converted to a CIC. This meeting was extremely productive and in my view Mr. Mesenbrink and Mr. Gensmer made a good and rational case for allowing the conversion. They stated that converting Creekside Commons to a CIC would facilitate their personal estate planning. It was stated, agreed to, restated and clarified that Mr. Mesenbrink and Mr. Gensmer ("Owners") intentions were that ultimately there would be a transfer of the ownership of Creekside Commons from corporate entities to personal ownership. It was further agreed that Mr. Mesenbrink and Mr. Gensmer's estates would own the entire building, including the twelve (12) units identified as "affordable" rental units. Pursuant to that meeting, I wrote to Mary Ippel, the City's Bond Counsel, and Sid Inman, the City's TIF Advisor, concerning the conditions agreed to in the meeting and asked that the documents pertaining to the amendments to Creekside Common's TIF Plan and Development Agreement set out the agreed upon conditions as part of the amendments. I am enclosing, for your convenience, a copy of my October 8, 2004 letter to Ms. Ippel and Mr. Inman. DN: 238379 '-'~"","~,.~,-_.".~--.._,~~_.-_....",..".",~"~."~~~,,_.'-......._>_.....:-,.<~--,..~.,..,~,."..--^-'''''..~..=.,-~~".........,..."...............'.......-_..-...-._""-....-...__.~----_.--.,--- Harold Jesh, Housing Development Consultant November 29, 2004 Page 2 I have had numerous conversations of late with Ms. Ippel's office concerning conversations they have had with you. I understand that Mr. Mesenbrink and Mr. Gensmer now want to be able to sell each of the forty-two (42) non "affordable" units to individuals, who would then purportedly offer them for rent. However, the City cannot enforce such a condition on the ownership of personal property and, even if there was a way to do so, there is no rational basis for the City to put itself in a position whereby it may need to take legal action against one or more individuals. It also does not make any sense for your clients to receive the TIF payments if they"are no longer owners of the project. Additionally, Creekside received TIP financing based on a proposal to construct a senior apartment complex. The agreement to allow the conversion to a CIC, under the conditions agreed upon, is in my judgment a significant concession to your client. As the City's attorney, I cannot recommend to the City Council that they agree to approve a modification to the TIF Plan to permit the conversion of the project to condominiums without the protections and conditions agreed upon. Also, I would like to clarify that the application fee for the TIF amendment is just that, an application fee. The fees do create any type of legal, contractual or fiduciary relationship between your clients and the City's Bond Counsel and TIF Advisor. In order to avoid further complications, all issues regarding the plan amendments and development agreement should be directed to Mr. Sid Inman, Senior Vice President at Ehlers and Associates. Mr. Inman can be reached at 3060 Centre Point Drive, St. Paul, MN 55112-1122, 651-697-8507. Please don't communicate directly with Ms. Ippel or her office. The modification to the TIF Plan and a new Development Agreement are being prepared pursuant to the terms agreed to by your clients in the September/October meeting and as set forth in my October 8, 2004 letter. It is my understanding that this matter is scheduled for consideration by the City Council/EDA at their December 6, 2004 meeting. Sincerely, ~ ~ rp dt-U.. Suesan Lea Pace Prior Lake City Attorney SLP/mrg Enclosure cc: Frank Boyles, City Manager John Sullivan, Community Development Director Mary Ippel, Esq. Sid Inman Bryce Huemoeller, Esq. DN: 238379 . scorr COUNTY GOVERNMENT CENTER TAXATION DEPARTMENT 200 FOURTH AVENUE WEST SHAKO PEE, MINNESOTA 55379-1220 CYNTHIA M. GElS, AUDITOR DEPARTMENT OF TAXATION (952) 496-8167 Fax: (952) 496-8135 cgeis@co.scott.mn.us http://www.co.scott.mn.us December 1, 2004 Prior Lake City Council Frank Boyles, City Manager 16200 Eagle Creek Ave Prior Lake, MN 55372 RE: Proposed Modification to the Development Program for Development District No.3 and the proposed modification of Tax Increment Financing District No. 3-1. On December 6, 2004 a public hearing will be conducted to hear comments regarding the proposed modification of Tax Increment Financing District No. 3-1. Scott County was notified of the hearing and a draft document of the modification to the district was received on November 4, 2004. This letter is in response for the request for comment. Please introduce these comments at the public hearing. Scott County initially supported the increment district due to the following determinations: By statute, the district qualified as a housing district; the need for affordable, rental, senior housing in Scott County was immediate; the Scott County HRA endorsed the rent schedule which included the stipulation that twenty percent of the units will be occupied by persons with incomes less than 500/0 of the are median income. After receiving and reviewing the proposed modifications to the district, Scott County has reservations regarding the adoption of the modifications to the district. The issues are brought forth as follows: 1.) Housing Districts are known to be very difficult to monitor for compliance of statute, particularly, the income restrictions and the age requirements. For this reason, housing districts generally have the involvement of a Housing & Redevelopment Authority, or some other state or local unit of government, who will ensure compliance of the residents age and income limits. Because this parcel is held in ownership of a non-government entity, the requirements can already be difficult to manage. The district is currently under one parcel, with one owner, which allows the City to work with one corporation or partnership as far as the determination of compliance on all 54 units. If ownership of these units was transferred, by unit, to multiple people, businesses, or partnerships, the ability to deal with one entity to ensure compliance would be eliminated, increasing administrative costs. The partners of Eagle Creek Development do have the ability to transfer undivided interests of the property in its entirety (54 unit single parcel), thereby maximizing their personal portfolios. 2.) The need for affordable, senior rental housing is not in dispute. However, the ability to monitor whether the property is being rented or resided in by the fee owner would be impossible to manage. Compliance of this facility being a 54 unit rental building would be difficult to administer. 3.) Scott County agreed to assist the developers with the project, allowing public financing to offset some of the costs associated with the development of the district. With the ability to transfer units off in fee ownership to one or more entities, the developers long term investment is minimized, negating the need for public financing. In conclusion, the County staff are not in support of the proposed modifications to TIF District No. 3-1. If the current owners wish to have the ability to transfer ownership to multiple entities, the district should be decertified and no public financing should be made available. Otherwise, the property should remain as a singular parcel containing the 54 unit complex with all the initial restrictions in place. On behalf of Scott County, Cynthia M. Geis Property Tax Records & Revenue Manager County Auditor CC: Commissioner Marschall, Chair Commissioner Vogel, Vice-Chair Commissioner Wagner Commissioner Hennen Commissioner Ulrich David Unmacht, County Administrator 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 Memo To: John Sullivan, Community Development Director From: Jane Kansier, Planning Director'.>-(0-\~ Re: TIF District 3-1 Modification .) Date: November 23, 2004 The Planning Commission considered the modification to TIF District 3-1 at their meeting on November 22, 2004. The Planning Commission found this modification to be consistent with the Comprehensive Plan and adopted Resolution 04-013PC to that effect. A condition of approval of the final PUD plan required the property owner to record a covenant to run with the land which restricts the use of the property to occupancy by the elderly. These covenants have not been recorded at this time. The Planning Commission found that in order to be consistent with the approved Planned Unit Development Plan, the developer must record the restrictive covenants. The Planning Commission recommended the modification not be approved until these covenants are recorded. Please let me know if you have any other questions. 1:\04 files\04 tit\3-1modification\pc action memo.doc www.cityofpriorlake.com Phone 952.447.4230 / Fax 952.447.4245 ....,_-'-.."~...._~_"'............,"""',_.,.~."b' "...,.......__...",...,."'.~"_~..,"".,_..""."""'~""""'''''Mo'''''._..<><"'"""_"'_"'""'~'__""_"""~~'_"""""'.,","_~,,,_,__~.~,_~..~.;"",........,.......,..,...,~. . TAX INCREMENT FINANCING PLAN for the modification of TAX INCREMENT FINANCING DISTRICT NO. 3-1 (a housing district) within DEVELOPMENT DISTRICT NO.3 CITY OF PRIOR LAKE SCOTT COUNTY STATE OF MINNESOTA Public Hearing: December 17,2001 Adopted: December 17, 2001 Modified: December 6, 2004 . I ~A~o~I~,~ Prepared by: EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105 651-697-8500 fax: 651-697-8555 www.ehlers-inc.com TABLE OF CONTENTS (for reference purposes only) SECTION II TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 3-1 .................................................................. 2-1 Subsection 2-1.Foreword ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " 2-1 Subsection 2-2. Statutory Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " 2-1 Subsection 2-3. Statement of Objectives ................................... 2-1 Subsection 2-4. Development Program Overview ............................ 2-2' Subsection 2-5. Description of Property in the District and Property To Be Acquired . 2-2 Subsection 2-6. Classification of the District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-2 Subsection 2-7. Duration of the District. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-3 Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements ........ 2-3 Subsection 2-9. Sources of Revenue/Bonded Indebtedness .................... 2-4 Subsection 2-10. Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-5 Subsection 2-11. State Tax Increment Financing Aid (Local Contribution) . . . . . . . . . .. 2-6 Subsection 2-12. Fiscal Disparities Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-6 Subsection 2-13. Business Subsidies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " 2-6 Subsection 2-14. County Road Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " 2-7 Subsection 2-15. Estimated Impact on Other Taxing Jurisdictions. . . . . . . . . . . . . . . .. 2-7 Subsection 2-16. Supporting Documentation ................................. 2-8 Subsection 2-17. Definition of Tax Increment Revenues ........................ 2-8 Subsection 2-18. Modifications to the District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-8 Subsection 2-19. Administrative Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " 2-9 Subsection 2-20. Limitation of Increment ................................... 2-10 Subsection 2-21. Use of Tax Increment .................................... 2-11 Subsection 2-22. Excess Tax Increments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-11 Subsection 2-23. Requirements for Agreements with the Developer . . . . . . . . . . . . .. 2-12 Subsection 2-24. Assessment Agreements ................................. 2-12 Subsection 2-25. Administration of the District. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-12 Subsection 2-26. Annual Disclosure Requirements ........................... 2-12 Subsection 2-27. Reasonable Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-13 Subsection 2-28. Other Limitations on the Use of Tax Increment. . . . . . . . . . . . . . . .. 2-13 Subsection 2-29. Summary.............................................. 2-13 APPENDIX A PROJECT DESCRIPTION .................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. A-1 APPENDIX B MAP OF DEVELOPMENT DISTRICT NO.3 AND TAX INCREMENT FINANCING DISTRET APPENDIX C DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT. . . . . . . . . . . .. C-1 APPENDIX D ESTIMATED CASH FLOW FOR THE DISTRICT .............................. D-1 APPENDIX E HOUSING QUALIFICATIONS FOR THE DISTRICT. . . . . . . . . . . . . . . . . . . . . . . . . . .. E-1 _.~.."~,.."._,....-.~....".,--,~""",-......---._-~,,,...._,..,...,---......_--~--~_._"-_..,-",,.~.....~~ APPENDIX F BUT/FOR QUALIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. F-1 SECTION /I TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 3-1 Subsection 2-1.Foreword The City of Prior Lake (the "City") staff and consultants have prepared the following information to expedite the establishment of Tax Increment Financing District No. 3-1 ("the District"), a housing tax increment financing district, located in Development District No.3. Subsection 2-2. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the City has certain statutory powers pursuant to Minnesota Statutes ("MS. '~, 469.124 through 469.134, inclusive, as amended, and MS., Sections 469.174 through 469.179, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing public costs related to this project. This Section contains the Tax Increment Financing Plan (the "Plan") for Tax Increment Financing District No.3-I. Other relevant information is contained in the Development Program for Development District No. 3. Subsection 2-3. Statement of Objectives The District currently consists of one parcel of land and adjacent and internal rights-of-way. The District is being created to facilitate construction of approximately 54 units of senior rental housing in the City of Prior Lake. Contracts for this have not been entered into at the time of preparation of this Plan, but the date when development is likely to occur is Fall 200 1. This Plan is expected to achieve many ofthe objectives outlined in the Development Program for Development District No.3. The activities contemplated in the Development Program and the Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of Development District No.3 and the District. (As Modified December 6, 2004, to add the following) The District currently consists of 54 units of rental housing in the City of Prior Lake. Construction began in the Fall of 2001, and was completed in 2002. The purpose of this modification is to convert the ownership of the project to a Common Interest Community (CIC). This will allow the owners to ultimately transfer ownership from corporate and partnership entities to personal ownership. The housing units will remain rental. This Modification is expected to achieve many of the objectives outlined in the Development Program for Development District No.3. The activities contemplated in the Development Program and the Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of Development District No.3 and the District. City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 2-1 '"...._"""-~~_.._-""~~--~-,,~~-^.......""",.~.,'~,~. Subsection 2-4. Development Program Overview 1. Relocation - Relocation services, to the extent required by law, are available pursuant to MS., Chapter 117 and other relevant state and federal laws. Subsection 2-5. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights-of-way identified by the parcel listed below. See the map in Appendix B for further information on the location of the District. Parcel Number 25-378-003-0 Subsection 2-6. Classification of the District The City, in determining the need to create a tax increment financing district in accordance with MS., Sections 469.174 to 469.179, as amended, inclusive, finds that the District, to be established, is a housing districtpursuanttoMS., Section 469.174, Subd. 11 and MS., Section 273.1399, Subd. 1 (c) as defined below: Minnesota Statutes, Section 469.174, Subdivision 11: "Housing district" means a type of tax increment financing district which consists of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income, as defined in chapter 462A, Title II of the National Housing Act of 1934, the National Housing Act of 1959, the United States Housing Act of 1937, as amended, Title V of the Housing Act of 1949, as amended, any other similar present or future federal, state, or municipal legislation, or the regulations promulgated under any of those acts. A district does not qualify as a housing district under this subdivision if the fair market value of the improvements which are constructed in the district for commercial uses or for uses other than low and moderate income housing consists of more than 20 percent of the total fair market value of the planned improvements in the development plan or agreement. The fair market value of the improvements may be determined using the cost of construction, capitalized income, or other appropriate method of estimating market value. Housing project means a project, or portion of a project, that meets all the qualifications of a housing district under this subdivision, whether or not actually established as a housing district. In meeting the statutory criteria the City relies on the following facts and findings: .. The District consists of one parcel The development will consist of 54 units of rental townhomes/apartments 20% of the units will be occupied by persons with incomes less than 50% of the area median income. The market value of non-assisted housing or commercial property will be less than 20% of the total fair market value of the planned improvements. (See Appendix E). Pursuant to 469.176 Subd. 7, the District does not contain any parcel or part of a parcel that qualified under the provisions of Section 273.111 or 273.112 of Chapter 473Hfor taxes payable in any of the five calendar years before the filing of the request for certification of the District. The City reserves the right to impose additional or alternative income restrictions, as permitted by law, for housing districts. City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 2-2 Subsection 2-7. Duration of the District Pursuant to MS., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration of the District must be indicated within the Plan. Pursuant to MS., Section 469.176, Subd. Ib, the duration of the District will be 25 years after receipt of the first increment by the City (a total of26 years). The date of receipt by the City of the first tax increment is expected to be 2004. Thus, it is estimated that the District, including any modifications of the Plan for subsequent phases or other changes, would terminate after 2029, or when the Plan is satisfied. If increment is received in 2003, the term of the District will be 2028. The City reserves the right to decertify the District prior to the legally required date. Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements Pursuant to MS., Section 469.174, Subd. 7 and MS., Section 469.177, Subd. 1, the Original Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor in 200 I for taxes payable 2002. Pursuant to MS., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning in the payment year 2003) the amount by which the original value has increased or decreased as a result of: 1. change in tax exempt status of property; 2. reduction or enlargement of the geographic boundaries of the district; 3. change due to adjustments, negotiated or court-ordered abatements; 4. change in the use of the property and classification; 5. change in state law governing class rates; or 6. change in previously issued building permits. In any year in which the current Net Tax Capacity (NT C) value of the District declines below the ONTC, no value will be captured and no tax increment will be payable to the City. The original local tax rate for the District will be the local tax rate for taxes payable 2002, assuming the request for certification is made before June 30, 2002. The Original Tax Capacity and the Original Local Tax Rate for the District appear in the table on the next page. Pursuant to MS., Section 469.174 Subd. 4 and MS., Section 469.177, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of the District, within Development District No.3, upon completion of the project, will annually approximate tax increment revenues as shown in the table on the following page. The City requests 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2003. The Project Tax Capacity (PTC) listed is an estimate of values when the project is completed. City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 2-3 Project Estimated Tax Capacity upon Completion (PTC) Original Estimated Net Tax Capacity(ONTC) Estimated Captured Tax Capacity (CTC) 51,875 188 51,687 Original Local Tax Rate Estimated Annual Tax Increment(CTC x Local Tax Rate) Percent Retained by the City 1.20000 Pay 2002 est. 62,024 1000/0 Pursuant to MS., Section 469.177, Subd. 4, the City shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to MS., Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the Plan by the municipality pursuant to MS., Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. The City has reviewed the area to be included in the District and determined that no building permits have been issued during the 18 months immediately preceding approval of the Plan by the City. Subsection 2-9. Sources of Revenue/Bonded Indebtedness Public improvement costs, utilities, parking facilities, streets and sidewalks, and site preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The City reserves the right to use other sources of revenue legally applicable to the City and the Plan, including, but not limited to, special assessments, general property taxes, state aid for road maintenance and construction, proceeds from the sale of land, other contributions from the developer and investment income, to pay for the estimated public costs. The City reserves the right to incur bonded indebtedness or other indebtedness as a result of the Plan. As presently proposed, the project will be financed by a pay-as-you-go note and interfund loan or transfer. Additional indebtedness may be required to finance other authorized activities. The total principal amount of bonded indebtedness or other indebtedness related to the use of tax increment financing will not exceed $731,000 plus interest without a modification to the Plan pursuant to applicable statutory requirements. It is estimated that $731,000 in bonded indebtedness will be financed with tax increment revenues. This provision does not obligate the City to incur debt. The City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The City may also finance the ac- tivities to be undertaken pursuant to the Plan through loans from funds of the City or to reimburse the developer on a "pay-as-you-go" basis for eligible costs paid for by a developer. The estimated sources of funds for the District are contained in the table on the following page. City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 2-4 SOURCES OF FUNDS TOTAL $1,600,000 $1,600,000 Tax Increment PROJECT REVENUES Interfund loans from the City or other districts may be used to cover project expenses of Tax Increment District No.3-I. It is the City's intention to pay back the interfund loans with tax increment from District No. 3-1. Subsection 2-10. Uses of Funds Currently under consideration for the District is a proposal to facilitate construction of approximately 54 units of senior housing. The City has determined that it will be necessary to provide assistance to the project for certain costs. The City has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District, this Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses offunds associated with the District is outlined in the table on the following page. USES OF FUNDS TOTAL Site Improvements/Preparation F ooting/F oundationlStructural Work Landscaping Lighting for Parking Lot SAC/WAC Sprinkler System Public Utilities Parking Facilities Streets and Sidewalks Interest Administrative Costs (up to 10%) $93,000 $333,500 $40,000 $6,000 $30,500 $10,000 $6,000 $38,000 $14,000 $869,000 $160,000 PROJECT COSTS TOTAL $1 ~600aOOO Estimated costs associated with the District are subject to change among categories without a modification to this Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. The City may expend funds for qualified housing activities outside of the District boundaries. It is estimated that the cost of improvements, including administrative expenses which will be paid or financed with tax increments, will equal $ 1,600,000 as is presented in the budget above. City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 2-5 Subsection 2-11. State Tax Increment Financing Aid (Local Contribution) The 2001 Legislature eliminated the provisions for a reduction in state tax increment financing aid (RrS TIP A) or the alternative qualifying local contribution. If required by future legislation, it is the City's intention to consider taking the steps necessary to preserve state-paid local government aid. Subsection 2-12. Fiscal Disparities Election It is not anticipated that the District will contain commercial/industrial property. Therefore, the fiscal disparities provision does not apply to the District. If commercial/industrial property is included in the District, the contribution will be paid from inside the District. Subsection 2-13. Business Subsidies Pursuant to MS. Statutes 116J.993, Subdivision 3, the following forms of financial assistance are not considered a business subsidy: (1) a business subsidy of less than $25,000; (2) assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; (3) public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) redevelopment property polluted by contaminants as defined in section 1161.552, subdivision 3; (5) assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost; (6) assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) assistance for housing; (8) assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under 469.174, subdivision 23; (9) assistance for energy conservation; (10) tax reductions resulting from conformity with federal tax law; (11) workers' compensation and unemployment compensation; (12) benefits derived from regulation; (13) indirect benefits derived from assistance to educational institutions; (14) funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; (15) assistance for a collaboration between a Minnesota higher education institution and a business; (16) assistance for a tax increment financing soils condition district as defined under section 469.174, subdivision 19; (17) redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; (18) general changes in tax increment financing law and other general tax law changes ofa principally technical nature. (19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 2-6 (20) Funds from dock and wharf bonds issued by a seaway port authority; (21) Business loans and loan guarantees of $75,000 or less; and (22) Federal loan funds provided through the United States Department of Commerce, Economic Development Administration. The City is not providing tax increment financing for the purpose of economic development or job growth and therefore the provisions of MS., Section 116J.993 to 116J.994, which states that a local unit of government granting financial assistance to a business for economic development or job growth purposes, including tax increment financing, must establish business subsidy criteria and approve a business subsidy agreement with the business receiving the assistance, do not apply. Subsection 2-14. County Road Costs Pursuant to MS., Section 469.175, Subd. la, the county board may require the City to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgement of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. In the opinion of the City and consultants, the proposed development outlined in this Plan will have little or no impact upon county roads. If the county elects to use increments to improve county roads, it must notify the City within forty-five days of receipt of this Plan. Subsection 2-15. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the Plan would occur without the creation of the District. However, the City has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact ofthe District would be as follows ifthe "but for" test was not met: IMP ACT ON TAX BASE Scott County City of Prior Lake Prior Lake ISD No. 719 2001/2002 est. Total Net Tax Canacitv 64,152,757 10,930,196 10,930,196 Estimated Captured Tax Capacity (CTC) Dnon Comnletion 51,687 51,687 51,687 Percent of CTC to Entitv Total 0.08060/0 0.4729% 0.47290Ic. City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 2-7 IMPACT ON TAX RATES 2001/2002 est. Percent Potential Extension Rates of Total CTC Taxes Scott County 0.401650 33.47% 51,687 20,760 City of Prior Lake 0.397440 33.12% 51,687 20,542 Prior Lake ISD No. 719 0.316620 26.39% 51,687 16,365 Other 0.084290 7.02% 51.687 4.357 Total 1.200000 100.00% 62,024 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the estimated 200 l/Pay 2002 rate. The total net capacity for the entities listed above are based on estimated Pay 2002 figures. The District will be certified under the actual 200 l/Pay 2002 rates. Subsection 2-16. Supporting Documentation Pursuant to MS. Section 469.175 Subd 1 a, clause 7 the Plan must contain identification and description of studies and analyses used to make the determination set forth in MS. Section 469.175 Subd 3, clause (2). Following is a list of reports and studies on file at the City that support the authority's findings: Tax Increment Financing Application Subsection 2-17. Definition of Tax Increment Revenues Pursuant to MS., Section 469.174, Subd 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M s., Section 469.177; 2. the proceeds from the sale or lease of property, tangible or intangible, purchased by the authority with tax increments; 3. repayments of loans or other advances made by the authority with tax increments; and 4. interest or other investment earnings on or from tax increments. Subsection 2-18. Modifications to the District In accordance with MS., Section 469.175, Subd 4, any: 1. reduction or enlargement of the geographic area of Development District No.3 or the District; 2. increase in amount of bonded indebtedness to be incurred, including a determination to capitalize interest on debt if that determination was not a part of the original plan, or to increase or decrease the amount of interest on the debt to be capitalized; 3. increase in the portion of the captured net tax capacity to be retained by the City; 4. increase in total estimated tax increment expenditures; or 5. designation of additional property to be acquired by the City, City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 2-8 0" _._.....<'M.'_,.~..._.____"~..........___"'-_,_..,.,..",._ shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original Plan. Pursuant to MS. Section 469.175 Subd. 4(b), the geographic area of the District may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If a qualified housing district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of MS., Section 469.174, Subd. 11 and MS., Section 273.1399, Subd. 1(c) must be documented. The requirements of this paragraph do not apply if(l) the only modification is elimination ofparcel(s) from Development District No.3 or the District and (2) (A) the current net tax capacity of the parcel( s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the City agrees that, notwithstanding MS., Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the District. The City must notify the County Auditor of any modification that reduces or enlarges the geographic area of Development District No.3 or the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the Plan. Subsection 2-19. Administrative Expenses In accordance with MS., Section 469.174, Subd. 14, and MS., Section 469.176, Subd. 3, administrative expenses means all expenditures of the City, other than: 1. amounts paid for the purchase of land; 2. amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the project; 3. relocation benefits paid to or services provided for persons residing or businesses located in the project; or 4. amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to MS., Section 469.178; or 5. amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in sections 1 to 3. F or districts for which the request for certification were made before August 1, 1979, or after June 30, 1982, administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total tax increment expenditures authorized by the Plan or the total tax increment expenditures for Development District No.3, whichever is less. Pursuant to MS., Section 469.176, Subd. 4h, tax increments may be used to pay for the county's actual administrative expenses incurred in connection with the District. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to MS., Section 469. 177, Subd. 11, the county treasurer shall deduct an amount equal to 0.25 percent of any increment distributed to the City and the county treasurer shall pay the amount deducted to the state treasurer for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting oftax increment financing information and the cost of examining and auditing authorities' City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 2-9 use of tax increment financing. Subsection 2-20. Limitation of Increment Pursuant to MS., Section 469.176, Subd 1 a, no tax increment shall be paid to the City for the District after three (3) years from the date of certification of the Original Net Tax Capacity value of the taxable property in the District by the County Auditor unless within the three (3) year period: (1) bonds have been issued in aid of the project containing the District pursuant to MS., Section 469.178, or any other law, except revenue bonds issued pursuant to MS., Sections 469.152 to 469.165, or (2) the City has acquired property within the District, or (3) the City has constructed or caused to be constructed public improvements within the District. The bonds must be issued, or the City must acquire property or construct or cause public improvements to be constructed by approximately December, 2004 and report such actions to the County Auditor. The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to MS., Section 469.176, Subd. 6: if, after four years from the date of certification of the original net tax capacity of the tax increment financing district pursuant to MS., Section 469.177, no demolition, rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax incrementfinancing district by the authority or by the owner of the parcel in accordance with the tax increment financing plan, no additional tax increment may be taken from that parcel and the original net tax capacity of that parcel shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on that parcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax increment financing plan, the authority shall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district. The county auditor must enforce the provisions of this subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February 1 of the fifth year following the year in which the parcel was certified as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street. The City or a property owner must improve parcels within the District by approximately December, 2005 and report such actions to the County Auditor. City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 2-10 Subsection 2-21. Use of Tax Increment The City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. to pay the principal of and interest on bonds issued to finance a project; 2. to finance, or otherwise pay the cost of redevelopment of the Development District No.3 pursuant to the MS., Sections 469.048 to 469.068; 3. to pay for project costs as identified in the budget set forth in the Plan; 4. to finance, or otherwise pay for other purposes as provided in MS., Section 469.176, Subd. 4; 5. to pay principal and interest on any loans, advances or other payments made to or on behalf the City or for the benefit of Development District No.3 by a developer; 6. to finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the Plan or pursuant to M s., Chapter 462C. MS., Sections 469.152 through 469.165, and/or MS., Sections 469.178; and 7. to accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to MS., Chapter 462C, MS., Sections 469.152 through 469.165, and/or MS., Sections 469.178. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by MS., Section 469.176, Subd. 4. Revenues derived from tax increment from a housing district must be used solely to finance the cost of housing projects as defined in M.S., Section 469.174, subd. 11. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the City may be included in the cost of a housing project. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by MS., Section 469.176, Subd. 4. Tax increments generated in the District will be paid by Scott County to the City for the Tax Increment Fund of said District. The City will pay to the developer(s) annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements, demolition and relocation, site preparation, and administration. Remaining increment funds will be used for City administration (up to 10 percent) and the costs of public improvement activities outside the District. Subsection 2-22. Excess Tax Increments Pursuant to MS., Section 469.176, Subd. 2, in any year in which the tax increment exceeds the amount necessary to pay the costs authorized by the Plan, including the amount necessary to cancel any tax levy as provided in MS., Section 475.61, Subd. 3, the City shall use the excess amount to do any of the following: I. prepay any outstanding bonds; 2. discharge the pledge of tax increment therefor; 3. pay into an escrow account dedicated to the payment of such bonds; or 4. return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. In addition, the City may, subject to the limitations set forth herein, choose to modify the Plan in order to finance additional public costs in Development District No.3 or the District. City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-] 2-] ] .---"',..""...,-.......~,..'"...~-~,."~.,,,..,.--...-___."_',..-..-_a"""-.____.....,~_.._ Subsection 2-23. Requirements for Agreements with the Developer The City will review any proposal for private development to determine its conformance with the Development Program and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the City to demonstrate the conformance of the development with City plans and ordinances. The City may also use the Agreements to address other issues related to the development. Pursuant to MS., Section 469.176, Subd 5, no more than 10 percent, by acreage, of the property to be acquired in the District as set forth in the Plan shall at any time be owned by the City as a result of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 10 percent of the acreage, the City concluded an agreement for the development ofthe property acquired and which provides recourse for the City should the development not be completed. Subsection 2-24. Assessment Agreements Pursuant to MS., Section 469.177, Subd 8, the City may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the county assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable estimate, the county assessor shall also certify the minimum market value agreement. Subsection 2-25. Administration of the District Administration of the District will be handled by the Finance Director. Subsection 2-26. Annual Disclosure Requirements Pursuant to MS., Section 469.175, Subd 5, 6 and 6a the City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board, County Auditor and School Board on or before August 1 of each year. MS., Section 469.175, Subd 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by MS. Section 469.175 Subd 5 and Subd. 6, the Office of the State Auditor will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-27. Reasonable Expectations As required by the TIF Act, in establishing the District, the determination has been made that the anticipated development 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 City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 2-12 .~......-.,",",^-,_..,_._._.""~..-,,,--=---,~_._,""--~_.._~.~,"~-~,---._""'_......._-_._,-,._,-~._~.,-- 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 Plan. In making said determination, reliance has been placed upon written representations made by the developer to such effects and upon City staff awareness of the feasibility of developing the project site. 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. Such analysis is included with the cashflow in Appendix D, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the District and the use of tax increments. Subsection 2-28. Other Limitations on the Use of Tax Increment 1. General Limitations. All revenue derived from tax increment shall be used in accordance with the Plan. The revenues shall be used to finance, or otherwise pay the cost of redevelopment of the Development District No.3 pursuant to the MS., Sections 469.048 to 469.068. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. 2. Restriction on PoolinS!: Five Year Limit. Pursuant to MS., Section 469.1763, (1) the tax increment derived from the District must be expended on Public Costs of the housing project as defined in MS., Section 469.174, subd. 11 and subject to the requirements set forth in MS., Section 469.1761 and (2) public costs shall be limited to reimbursement of public costs paid before or within five years after certification of said the District by the County Auditor and interest on all such unreimbursed expenditures. Subsection 2-29. Summary The City is establishing the District to provide an impetus for residential development and provide safe and decent life cycle housing in the City. The TIP Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105, telephone (651) 697-8500. City of Prior Lake Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 2-13 APPENDIX A PROJECT DESCRIPTION The proposed 54 unit senior housing project will consist of 14 one bedroom and 40 two bedroom units. The rent rate will include one underground, heated parking stall for each unit. The building, located at 16435 Tranquility Court SE in Prior Lake, will encompass site coverage of20,798 square feet. The estimated cost of the proposed senior housing project will be $5,264,556 with commencement of construction to begin this fall, 2001. APPENDIX A-I '-, """""~"v"'~>A~""""'__,"""""~""",__"""~___,^~~_",~~~+"",~,,-,,,",,,~,;.."".....-...,....... ~__""~,~_''".._,_~.-..."~~~~ CREEKSIDE ESTATES 54 UNIT SENIOR (55+) HOUSING COMPLEX Estimated TIF Eligible Expen~es October 31, 2001 Eligible expenses for development property and site improvements. LAND ACQUISITION $459,000. SITE IMPROVEMENTS $ 92,400. FOOTINGIFOUNDATIONI STRUCTURAL WORK $419,912. LANDSCAPING $ 37,856. SIDEWALK $ 13,420. BITUlvfiNOUS PAVING $ 37,850. UTILIT.IES TO BUILDING $ 5~600. SAC/W AC $220,000. SPRINKLER SYSTEM $ 9,880. LIGIITING (PARKING LOn $ 5,620. DEVELOPMENT AGREEMENT $ 12.000. INTEREST DURING CONSTRUCTION $ ADMINISTRATION: SUPERVISION BUILDING PERMIT, INSPECTION CONTRACTING FEE ENGINEERING! ARCHITECTUAL $ 91,000. $ 24,897. $212~803. $114.000. TOTAL $1,756,238. LEROY T. ARNOLDI Oi:J7 ARTMI!NT OF TAXATION. DlRF,CTOP.. SCOTT COUNTY FINANCE DfirrSION GOV~~NTCRNTER 200 FOURTH A VENUE 'VEST SHAKOPEE, MN 55379 (612) 496-8115 Fal(: (612) 496-8135 lamoldi@co.~CO[Lmn.lJS November 8, 2001 Mr_ Harold A. Jesh Housing Development Consultant Suite 104 1311 2nd Street North Saulk Rapids MN 56379 RE: Request for Market Value ane Tax Estimates Scott County pro Nwnber: NJA Proposed Project Legal Description: Street Address: N/A - Proposed Project N/A - Proposed Project Dear t-1r. Jes~; You have requested a written estimate of market value and taxes generated for proposed construc~ion or a 54 unit apartment building in Prior ~ake, Minnescta. My estimate is based on o~r ccnversation of October 31, 2001 and the materials you gave to me (blueprints, rental rates, and the "Propa~ty Investment lL'1alysis") . It is therefore imoortant to note that the value estimate in this letter 15 coniingent on the accuracy of the data supplied. It is also important to note that the tax estimate is based on the CURRENT tax rates applicable to the subjecta These ra~cs have the potential to change yearly. Given the preceding codicils: Cost Estimate: The "Property Investment Analysis" shows a total project cos~ of ~5,264/5S6. While I cannot competently co~ment on the land development com~onents of that estimate, I can report the Buildi!1g Cost estimate (including equipment and Architectural/Engineering) appears to approxi!r.c!lte $72.50 per square feat. This is \t.rithil1. the range of "good" quality apartment building costs reported in published Cost Se~vices. 2 Esi;.i.mated Market Value: r hc;lvE ~e","iewed the prel.:.minary income/expense p~ojectio~s. The building will have 14 rent of $829 monthly, and rent for 8909 per mont~. underground parking space one-bedroom units, with a p~oposed 40 two-bedroom units that will Rental will include one heated per unit. The proposed r~nts are above typical rents reported to us in market surveys we have conducted in- Pr1. or T,~ke. It should be noted, however, that those reports are based on older, average quality projects catering to all ages. The subject i.s described as being targeted to "senior citizens". It can be expected that this market will be wil~ing to pay a higher rent with the expectation of greater security and N more homogeneous tenant mix than found in competing projects. Thus, while the projected gross income eppears to be above market, it ca~ be defended as supportablp.. Projected expenses appro}:imate 33% of Effe=tive Gross Income. This is within II typical t. repor.ted r.~ngp.!'i generated b~l sales .1:.eports and pub 1 ished surr.rnc.r:ie.s. My on 1 y addi -:-: iO:1 to projected expenses is a 2% ($11,000) reserve for replacements. With the adjustment for replacement reserves, Net Operati~g Income ~s estimated at: $353,000 (rounned). The next step is to arrive at a realistic Capitalization rate. Reported sales of exis~ing complexes in the TCMA show a typical range of 8.25-10.5%. ~ew~r buildings tend to be towards the lower end Of ~hat range. r also interviewed several real estate apPTaisers familiar with the TCMA 'new con8tructibn" apartment market. Th~y conf~rmed that range as consistent with their expe~ier.ce. I conclude ~hat a capitalization rate of 8.5~ can be d~fended as reasonabl~ for the s\Jbject. Please note that the projections emp:oyed here are best described as optimistic. The pro~osed rents ar~ at the high end of the existing market, projected expenses (as adjusted) seem typical oi th~ overall expenses repo~ted for similar properties, and the capitalizatio~ =ate is at the lnw end. 1'hese factors te:ld ::0 lead to I) \T81118 estimate at the hign end of a probable range. APPENDIX B MAP OF DEVELOPMENT DISTRICT NO.3 AND TAX INCREMENT FINANCING DISTRICT NO. 3-1 APPENDIX B-1 Tax Increment Financing District No. 3-1 Development District No. 3 City of Prior lake Scott County, Minnesota 12 1 10 9 .4 CATES ST. 5.E. >- s OtlTLOT A Tax Increment Financing District No. 3-1 and Development District No. 3 12 S\~ f3 , A 200 . o 200 400 Feet The boundaries of Tax Increment Financing District No. 3-1 are coterminous with the boundaries of Development District No.3. APPENDIX C DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT The District encompasses all property and adjacent rights-of-way identified by the parcel listed below. Parcel Number 25-378-003-0 Address 16435 Tranquility Court SE APPENDIX C-l APPENDIX D ESTIMATED CASH FLOW FOR THE DISTRICT APPENDIX D-l 12/10101 City Of Prior Lake Page 1 of 4 APPENDIX D TIF DISTRICT NO. 3-1 T.I.F. CASH FLOW ASSUMPTIONS Inflation Rate: Present Value Rate Pay As You Go Note: Note Issue Date: Tax Extension Rate Frozen: (from City) Tax extension Rate Current (from City) Assumes First Tax Increment Years of Tax Increment Amount of increment will vary depending upon market value. tax rates, class rates, construction schedule, and inflation on market value. Inflation on tax rates cannot be captured. 0.0000% 7.000% February 1, 2002 1.200000 est. Pay 2002 1 .200000 est. Pay 2002 2004 25 PID Market Class Tax Date Value Rate Capacity Payable 25-378-003-0 15,000 1.25% 188 2002 Total 15,000 188 BASE VALUE INFORMATION Number Class Total Tax Market Date Units Rate Taxes Capacity Value Payable Housing 54 1.25% 62,250 51,875 4,150,000 2004 Total 54 62,250 51,875 4,150,000 PROJECT INFORMATION Prepared by Ehlers Plan 11-5..o1.xls .-. .~_.__._-_..-...'-- _. --~----".~- ....... ,.,. .._'.'.-.._- -..- ~ ._- ...~_._,- .--- --....----..--...---..- .-.-.,.--- 12/10/01 City Of Prior Lake Page 2 of 4 Base Project Captured Semi-Annual State Aud. Admin Semi-Annual Semi-Annual PAYMENT DATE PERIOD BEGINNING Tax Tax Tax Gross Tax at at Gross Tax Present Pay Yrs. Mth. Yr. Capacity Capacity Capacity Increment 0.50% 10.00% Increment Value Yrs. Mth. Yr. 0.0 02-01 2002 188 188 0 0 0 0 0 0 0.0 08...()1 2002 0.0 08-01 2002 188 188 0 0 0 0 0 0 0.0 02-01 2003 0.0 02-01 2003 188 188 0 0 0 0 0 0 0.0 08-01 2003 0.0 08-01 2003 188 188 0 0 0 0 0 0 0.0 02...()1 2004 0.0 02-01 2004 188 51.875 51,688 31,013 (155) (3,117) 27,741 23,357 0.5 08-01 2004 0.5 08-01 2004 188 51,875 51,688 31,013 (155) (3,117) 27,741 45,924 1.0 02-01 2005 1.0 02-01 2005 188 51,875 51,688 31,013 (155) (3, 117) 27.741 67,728 1.5 08-01 2005 1.5 08-01 2005 188 51,875 51,688 31,013 (155) (3,117) 27,741 88,794 2.0 02-01 2006 2.0 02-01 2006 188 51,875 51,688 31,013 (155) (3,117) 27,741 109,149 2.5 08-01 2006 2.5 08-01 2006 188 51,875 51,688 31,013 (155) (3,117) 27,741 128,815 3.0 02-01 2007 3.0 02-01 2007 188 51,875 51,688 31,013 (155) (3,117) 27,741 147,815 3.5 08-01 2007 3.5 08-01 2007 188 51,875 51,688 31,013 (155) (3,117) 27,741 166,174 4.0 02-01 2008 4.0 02-01 2008 188 51.875 51,688 31,013 (155) (3,117) 27,741 183.911 4.5 08-01 2008 4.5 08-01 2008 188 51,875 51,688 31,013 (155) (3,117) 27,741 201,049 5.0 02-01 2009 5.0 02-01 2009 188 51,875 51,688 31,013 (155) (3.117) 27,741 217,607 5.5 08-01 2009 5.5 08-01 2009 188 51,875 51,688 31,013 (155) (3,117) 27,741 233,605 6.0 02-01 2010 6.0 02-01 2010 188 51.875 51,688 31.013 (155) (3,117) 27,741 249.063 6.5 08-01 2010 6.5 08-01 2010 188 51,875 51.688 31,013 (155) (3,117) 27,741 263,997 7.0 02-01 2011 7.0 02-01 2011 188 51,875 51,688 31,013 (155) (3,117) 27,741 278.426 7.5 08-01 2011 7.5 08-01 2011 188 51,875 51,688 31,013 (155) (3,117) 27,741 292,368 8.0 02-01 2012 8.0 02-01 2012 188 51.875 51.688 31.013 (155) (3,117) 27,741 305,838 8.5 08-01 2012 8.5 08-01 2012 188 51,875 51,688 31,013 (155) (3,117) 27,741 318,853 9.0 02-01 2013 9.0 02-01 2013 188 51,875 51,688 31,013 (155) (3,117) 27,741 331,427 9.5 08-01 2013 9.5 08-01 2013 188 51,875 51,688 31,013 (155) (3,117) 27,741 343,576 10.0 02-01 2014 10.0 02-01 2014 188 51,875 51,688 31,013 (155) (3,117) 27,741 355,315 10.5 08-01 2014 ').5 08-01 2014 188 51,875 51,688 31,013 (155) (3,117) 27,741 366,656 11.0 02-01 2015 .0 02-01 2015 188 51,875 51,688 31,013 (155) (3,117) 27,741 377,614 11.5 08-01 2015 11.5 08-01 2015 188 51.875 51.688 31,013 (155) (3,117) 27,741 388,201 12.0 02-01 2016 12.0 02-01 2016 188 51,875 51,688 31,013 (155) (3,117) 27,741 398,431 12.5 08-01 2016 12.5 08-01 2016 188 51,875 51,688 31,013 (155) (3,117) 27,741 408,314 13.0 02-01 2017 13.0 02-01 2017 188 51,875 51,688 31,013 (155) (3,117) 27,741 417,863 13.5 08-01 2017 13.5 08-01 2017 188 51,875 51,688 31,013 (155) (3,117) 27,741 427,090 14.0 02-01 2018 14.0 02-01 2018 188 51,875 51,688 31,013 (155) (3,117) 27,741 436,004 14.5 08-01 2018 14.5 08-01 2018 188 51,875 51.688 31,013 (155) (3,117) 27,741 444,617 15.0 02-01 2019 15.0 02-01 2019 188 51,875 51,688 31,013 (155) (3,117) 27,741 452,938 15.5 08-01 2019 15.5 08-01 2019 188 51,875 51,688 31,013 (155) (3,117) 27,741 460,978 16.0 02-01 2020 16.0 02-01 2020 188 51,875 51,688 31.013 (155) (3,117) 27,741 468,747 16.5 08-01 2020 16.5 08-01 2020 188 51.875 51,688 31,013 (155) (3,117) 27,741 476,252 17.0 02-01 2021 17.0 02-01 2021 188 51,875 51,688 31,013 (155) (3,117) 27,741 483,504 17.5 08-01 2021 17.5 08-01 2021 188 51,875 51.688 31.013 (155) (3,117) 27,741 490,511 18.0 02...()1 2022 18.0 02-01 2022 188 51,875 51,688 31,013 (155) (3,117) 27,741 497.280 18.5 08-01 2022 18.5 08-01 2022 188 51,875 51,688 31,013 (155) (3,117) 27,741 503,821 19.0 02-01 2023 19.0 02-01 2023 188 51,875 51,688 31.013 (155) (3,117) 27,741 510,140 19.5 08-01 2023 19.5 08-01 2023 188 51,875 51,688 31.013 (155) (3,117) 27,7411 516,246 20.0 02-01 2024 20.0 02-01 2024 188 51,875 51,688 31,013 (155) (3,117) 27,741 522,145 20.5 08-01 2024 20.5 08-01 2024 188 51.875 51.688 31,013 (155) (3,117) 27,741 527,845 21.0 02-01 2025 21.0 02-01 2025 188 51.875 51,688 31,013 (155) (3,117) 27,741 533,352 21.5 08-01 2025 21.5 08-01 2025 188 51,875 51,688 31,013 (155) (3,117) 27,741 538,673 22.0 02-01 2026 22.0 02-01 2026 188 51,875 51,688 31.013 (155) (3.117) 27,741 543,814 22.5 08-01 2026 22.5 08-01 2026 188 51,875 51,688 31,013 (155) (3,117) 27,741 548,781 23.0 02-01 2027 23.0 02-01 2027 188 51,875 51,688 31,013 (155) (3,117) 27,741 553,580 23.5 08-01 2027 23.5 08-01 2027 188 51,875 51,688 31,013 (155) (3,117) 27,741 558.217 24.0 02-01 2028 24.0 02-01 2028 188 51,875 51,688 31,013 (155) (3,117) 27,741 562,697 24.5 08-01 2028 24.5 08-01 2028 188 51,875 51.688 31,013 (155) (3,117) 27,741 567,025 25.0 02-01 2029 ".0 02-01 2029 188 51,875 51,688 31,013 (155) (3,117) 27,741 571.208 25.5 08-01 2029 .5 08-01 2029 188 51.875 51,688 31,013 (155) (3,117) 27,741 575,248 26.0 02-01 2030 I Totals 1,612,650 (8,063) (162,072) 1,442.515 Present Value 643,095 575,248 APPENDIX D TIF DISTRICf NO. 3-1 T.I.F. CASH FLOW ASSUMPTIONS Prepared by Ehlers Plan11-5-01.xts APPENDIX E HOUSING QUALIFICATIONS FOR THE DISTRICT No. of Persons 50% of Median 60% of Median 80% of Median Income Income Income I-person $26,150 $31,380 $41,824 2-person $29,900 $35,880 $47,840 3-person $33,600 $40,320 $53,760 4- erson $37,350 $44,820 $59,760 Source: Department of Housing and Urban Development The three options for income limits on a standard housing district are 20% of the units at 50% of median income, 40% of the units at 60% of median income, or 50% of the units at 80% of median income. At the time a district is established, the project needs to choose one of the options and meet those requirements for the life of the district. The City elects that 20% of the units will be at 50% of the median income. There are no rent restrictions for a standard housing district. APPENDIX E-l '~"""'~""'.c..~.'.............-_--.,,"-_".,~......._.....,._,.~>,,,..,,.,_,=- ~__'"''''''';'''~'_''~''_'''-;'''~__~~.__.,..,""_,.",~,_,_"_..,,,.,._._,,,,,,~""_=,....."".,_.~__,'.~""-..-=..........,_..~_..."""""'~__.........~...........-.___....__.._____,,__,......_ APPENDIX F BUT/FOR QUALIFICATIONS Current Market Value Est. New Market Value Est. Difference Present Value of Tax Increment Difference Value Likel to Occur Without TIF is Less Than: $15,000 4.150.000 $4,135,000 643.095 $3,491,905 $3 491,905 APPENDIX F-l The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 3-1, as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that Tax Increment Financing District No. 3-1 is a housing district as defined in MS., Section 469.174, Subd. 11. Tax Increment Financing District No. 3-1 consists of one parcel. The development will consist of rental housing. At least 20 percent of the units/homes receiving assistance will have incomes at or below 50 percent of statewide median income. The market value of non-assisted housing or commercial property will be less than 20 percent of the total fair market value of the planned improvements. Appendix E of the TIF plan contains detailed analysis for the above finding. 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. 3-1 permitted by the Plan. h 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 development proposed in this plan is a housing that meets the City's objectives for development and redevelopment. The cost site and public improvements and utilities makes this housing development infeasible without City assistance. Due to the high cost of building affordable new housing in the City and the cost of financing the proposed public 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 assi9tance (see attachment in Appendix F of the TIF plan). 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 development cost. Historically, site development costs in this area have made development infeasible without tax increment assistance. Therefore, the City reasonably determines that no other development 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 $4,135,000. The present value of tax increments from the District is estimated to be $643,095. It is the Council's finding that no development with a market value of greater than $3,491,905 would occur without tax increment assistance in this district within 25 years. This finding is based upon evidence from general past experience with the high cost of and public improvements in the general area of the District (see Cashflow in Appendix D of the TIF plan). 3. Finding that the Tax Increment Financing Planfor Tax Increment Financing District No. 3-1 conforms APPENDIX F-2 3. Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 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 Planfor Tax Increment Financing District No. 3-1 will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Development District No. 3 by private enterprise. Through the implementation of the Plan, the City will provide an impetus for residential development, desirable or necessary for increased population with the City. APPENDIX F-3 Several Minnesota communities are seeking solutions to their growing housing needs. Most are faced with the problem that is currently plaguing some metropolitan communities throughout Minnesota. In some metropolitan communities it is not financially feasible to build market rate assisted housing complexes, since rent levels cannot be met to justify development. Many metropolitan communities and larger regional growth centers have experienced substantial growth during the 1990s. In these areas, the primary housing issue is simply how much of each housing type to build. In some metropolitan areas, particularly county seats, even though there has been favorable growth, incomes are often too low to justify a housing development. In order to facilitate housing growth in communities such as Prior Lake, outside economic assistance is vital. One vehicle is tax increment financing, which we are in the process of requesting. However, in light of the development projections, an additional source will be needed to fund the approximate (to be detennined) gap to make this 54 unit project a reality. Subsequently, we respectfully request the City of Prior Lake consider our application for funding in order to make this development a reality. The proposed development will provide to the City of Prior Lake, housing for seniors, who at this time do not want the continued responsibility of maintaining a single-family home. In having this housing available, seniors will be able to live in Prior Lake amongst their friends and relatives in a very comfortable setting. In addition, by providing this housing to the seniors, single family homes will be freed up for young families wishing to stay in Prior Lake and new families coming to the City. At this time, it is difficult to estimate the increase in property valuation or new job creation; however, this project will approach five million dollars in new construction. Overall, the City of Prior Lake will benefit in providing this proposed housing for many years to come. -. APPENDIX F-4 Target Rent Schedule Creekside Estates (Without TIF) Monthly Number Square Rent Rent Annual of Units Feet Rate Potential Potential A One Sr 130% of inc.) 10 763 $ 650 $ 6,500 $ 78,000 Ahc One Br (30% of inc.) 1 763 $ 650 $ 650 $ 7,800 8 Two Br 3 913 $ 885 $ 2,655 $ 31,860 81 Two Br . 16 933 $ 905 $ 14,480 $ 173,760 82 Two 8r 6 962 $ 929 $ 5,574 $ 66,888 Two Sr . 3 1015 $ 965 $ 2,895 $ 34,740 83 C One 8r 3 766 $ 829 $ 2,487 $ 29,844 0 Two Br 3 1005 $ 955 $ 2,865 $ 34,380 E One Sr + Den, 2 Bth 3 1030 $ 1,050 $ 3,150 $ 37,800 E1 One Br + Den, 2 Bth 1 1010 $ 1,030 $ 1,030 $ 12,360 F Two 8r + Den, 28th 3 1276 $ 1,210 $ 3,630 $ 43,560 F1 Two Sr + Den, 28th 1 1211 $ 1,200 $ 1,200 $ 14,400 Ghc Two Br 1 933 $ 905 $ 905 $ 10,860 Total Units 54 Current Monthly Potential $ 48,021 Current Annual Potential $ 576,252 NOTE: Rents include one underground heated parking stall. 11 units rented ~ 50% AMI for Scott County Page 1 of 5 Square Ft Rent $ I Sq Ft A One Br 763 $ 650 0.85 Ahe One Br 763 $ 650 0.85 B Two Br 913 $ 885 0.97 81 Two Br 933 $ 905 0.97 82 Two Br 962 $ 929 0.97 83 Two Br 1015 $ 965 0.95 c One Br 766 $ 829 1.08 0 Two 8r 1005 $ 955 0.95 E One Br + Den, 28th 1030 $ 1,050 1.02 E1 One Br + Den, 28th 1010 $ 1,030 1.02 F Two Br + Den, 28th 1276 $ 1,210 0.95 F1 Two Br + O"en, 28th 1211 $ 1 ,200 0.99 Ghe Two Br 933 $ 905 0.97 Owner Paid Utilities: Gas Heat: YES Water / Sewer: YES Refuse: YES Unit Electric: NO Other Property Amenities: Heated Garage Wall AlC Elevator In-unit Laund_ry Communi~ Room Window CoveriniJs Office Refrigerator, Range, Dishwasher LibralY Card / Activity Room Guest Room Page 2 of 5 Property Investment Analysis Creekside Estates Num of Units 54 TYPICAL YEAR PROJECTION Num of Garages: 54 Stabilized Year - 2002 The statements and figures herein, while not guaranteed, are secured from sources we believe authoritative. INCOME Income!unitIY ear Income/unit/mo Gross Suite Potential 576,252 10,671.33 889.28 Suite Vacancy % @ 5 (28,813) (533.57) (44.46) Net Suite Rental Income 54 7 ,439 10,137.77 844.81 Gross Garage Potential included in suite rent - - Garage Vacancy % @ 0 - - - Net Garage Income - - - Misc. Income - - Vending Income 500 9.26 0.77 Storage Income 2,200 Damages Income 600 11.11 0.93 Late Rent Fee 200 3.70 0.31 Forfeit Sec Dep 800 14.81 1.23 Interest Income 300 5.56 0.46 Total Mise Income 4,600 85.19 7.10 Total Effective Gross Income 552,039 10,222.95 851.91 EXPENSES Exp/unit/yr Exp/unitlmo STAFFING Suite Credit - Manager/Janitor 16,000 296.30 24.69 Garage Credit - Mgrlshop - - - Wages Manager I Maint 6,000 111.11 9.26 Manager Leasing Incentive 1,000 18.52 1.54 TOTAL STAFF EXPENSE 23,000 425.93 35.49 ADMINISTRA TIVE/OPERA TING Management Fee 27,602 511.15 42.60 CrediUCriminal Check 100 1.85 0.15 Office Exp 500 9.26 0.77 Permits & License 400 7.41 0.62 Security Dep. Interest 150 2.78 0.23 Public Relations 800 14.81 1.23 Bank Charges 50 0.93 0.08 Legal/Accounting 1,000 18.52 1.54 Insurance 7,000 129.63 10.80 Payroll! Work Comp 2,760 51.11 4.26 Advertising 5,000 92.59 7.72 T elephone/Pagers 1,800 33.33 2.78 Miscellaneous 1,000 18.52 1.54 TOTAL ADMINISTRA TIVElOP 48,162 891.89 74.32 Page 3 of 5 . -.,.' ~._~,.._-..._--,...._-~-'" ...~-_.-~-_._.._..~_ ~~._.__.. _.vo ._--.._ .._. Property Investment Analysis EXPENSES UTILITIES Exp/unitlyr Exp/unitlmo Electric 6.800 125.93 10.49 Gas (Owner paid unit heat) 19,000 351.85 29.32 Water/Sewer 12,000 .222.22 18.52 Refuse 4,000 74.07 6.17 TOTAL UTILITIES 41 ,800 774.07 64.51 MAINT & REPAIR General Repairs 8,000 148.15 12.35 Appliance Repair 500 9.26 0.77 Janitorial Supplies 600 11.11 0.93 Plumbing Repair and Supplies 700 12.96 1.08 Heating Repair and Supplies 1,000 18.52 1.54 Electrical Repair and Supplies 550 10.19 0.85 Elevator Maint 1,800 33.33 2.78 Carpet Cleaning 1,000 18.52 1.54 Unit Painting 1,800 33.33 2.78 Maintenance Equipment / Supplies 800 14.81 1.23 Grounds Maintenance / Snow 6,700 124.07 10.34 Miscellaneous 1,000 18.52 1.54 TOTAL MAINT & REPAIR 24,450 452.78 37~ 73 PROPERTY TAX Real Estate Tax (1.25% Class Rate) 50,000 925.93 77.16 {without TIF) TOTAL O/M EXPENSES 187,412 3,470.59 289.22 Net Operating Income 364,627 6,752.36 562.70 Debt Service: (315.227) (5,837.54) (486.46) Debt Coverage Ratio 1.16 Cash Flow 49,400 914.82 76.24 Cash on Cash Return 3.75% Page 4 of 5 - -. . ___~'_'_"'_''''_.____k '0" ...__.'...__..___...._..._..... ".__,,".._ ..~... _._. . .' _ '..,..__..., _. _.. . . .._.. ... ..... .,.. ...... -.... Property Investment Analysis Development Cost Analysis Creekside Estates Proiect Budaet land $ 324,000 . Per Unit Cost 6,000.00 Site Development $ 395,000 Per Unit Cost 7,314.81 Building Cost $ 4,081,956 Per Unit Cost 75,591.78 Equipment $ 220,000 Per Unit Cost 4,074.07 Architectural I Engineering $ 114,000 Per Unit Cost 2,111.11 Legal $ 10,000 Per Unit Cost 185.19 Off.site development costs $" 119,600 Per Unit Cost . 2,214.81 Total Development Cost $ 5,264,556 Per Unit Cost 97,491.78 75% l TV $ 3,948,417 Per Unit Cost 73,118.83 Investment Down Required $ 1,316,139 Per Unit Cost 24,372.94 MORTGAGE TERMS Payment (315,227) Interest Rate 7.00 Term 30 Page 5 of 5 .-.....-.......,.,. ~_.-- -.-.---.. ',-, ....-. -...----... ~",.' ~ '"'. - '.-., ,,-- ~ Target Rent Schedule Creekside Estates (With TIF) Monthly Number Square Rent Rent Annual of Units Feet Rate Potential . Potential . A One Sr (30% of inc.) 10 763 $ 650 $ 6,500 $ 78,000 Ahe One Br (30otb of inc.) 1 763 $ 650 $ 650 $ 7,800 8 Two Br 3 913 $ 885 $ 2,655 $ 31,860 81 Two Br 16 933 $ 905 $ 14,480 $ 173,760 82 Two Sr u 6 962 $ 929 $ 5,574 $ 66,888 83 Two Br 3 1015 $ 965 $ 2,895 $ 34,740 c One Sr 3 766 $ 829 $ 2,487 $ 29,844 0 Two Br 3 1005 $ 955 $ 2,865 $ 34,380 E One 8r + Den, 28th 3 1030 $ 1,050 $ 3, 1 50 $ 37,800 E1 One Sr + Den, 28th 1 1010 $ 1,030 $ 1,030 $ 12,360 F Two Sr + Den, 2 Bth 3 1276 $ 1,210 $ 3,630 $ 43,560 F1 Two Br + Den, 28th 1 1211 $ 1 ,200 $ 1,200 $ 14,400 Ghc Two Sr 1 933 $ 905 $ 905 $ 10,860 Total Units. 54 Current Monthly Potential $ 48,021 Current Annual Potential $ 576,252 NOTE: Rents include one underground heated parking stall. 11 units rented @ 50% AMI for Scott County Page 1 of 5 Square Ft Rent I $ I Sq Ft A One Br 763 $ 650 0.85 Ahe One Br 763 $ 650 0.85 8 Two Br 913 $ 885 0.97 81 Two Br 933 $ 905 0.97 82 Two Br 962 $ 929 0.97 83 Two Br 1015 $ 965 0.95 c One Br 766 $ 829 1.08 0 Two Br 1005 $ 955 0.95 E One Br + Den, 28th 1030 $ 1 ,050 1.02 E1 One Br + Den, 2 Bth 1010 $ 1,030 1.02 F Two Br + Den, 28th 1276 $ 1 ,21 0 0.95 F1 Two Br + Den, 28th 1211 $ 1 ,200 0.99 Ghc Two Br 933 $ 905 0.97 Owner Paid Utilities: Gas Heat: YES Water I Sewer: YES Refuse: YES Unit Electric: NO Other Property Amenities: Heated Garage Wall Ale Elevator In-unit Laundry Community Room Window Coverings Office Refrigerator, Range, Dishwasher Library Card I Activity Room Guest Room Page 2 of 5 <">>''''~''+'_'''''''U~"""."~",~~~~~.,,,.....-_.__,~__;............._._~"'_',.~"______,,_,_~_~_,_,,,,~,~,_, Property Investment Analysis Creekside Estates Num of Units 54 TYPICAL YEAR PROJECTION Num of Garages: 54 Stabilized Year - 2002 The statements and figures herein, while not guaranteed, are secured from sources we believe authoritative. INCOME Income/unitIY ear Income/unit/mo Gross Suite Potential 576,252 10,671.33 889.28 Suite Vacancy % @ 5 (28,813) (533.57) (44.46) Net Suite Rental Income 547.439 10,137.77 844.81 Gross Garage Potential included in suite rent - - Garage Vacancy % @. 0 - - - Net Garage Income - - - Misc. Income - - Vending Income 500 9.26 0.77 Storage Income 2,200 Damages Income 600 11.11 0.93 late Rent Fee 200 3.70 0.31 Forfeit Sec Dep 800 14.81 1.23 Interest Income 300 5.56 0.46 Total Misc Income 4.600 85.19 7.10 Total Effective Gross Income 552,039 10,222.95 851.91 EXPENSES Exp/unitlyr Exp/unitlmo STAFFING Suite Credit - Manager/Janitor 16,000 296.30 24.69 Garage Credit - Mgr/shop - - - Wages Manager / Maint 6,000 111.11 9.26 Manager Leasing Incentive 1.000 18.52 1.54 TOTAL STAFF EXPENSE 23,000 425.93 35.49 ADMINISTRATIVE/OPERATING Management Fee 27,602 511.15 42.60 CrediVCriminal Check 100 1.85 0.15 Office Exp 500 9.26 0.77 Permits & license 400 7.41 0.62 Security Dep. Interest 150 2.78 0.23 Public Relations 800 14.81 1.23 Bank Charges 50 0.93 0.08 legal/Accounting 1,000 18.52 1.54 Insurance 7,000 129.63 10.80 Payroll / Work Com P 2,760 51.11 4.26 Advertising 5,000 92.59 7.72 T elephone/Pagers 1.800 33.33 2.78 Miscellaneous 1,000 18.52 1.54 TOTAL ADMINISTRATIVE/OP 48,162 891.89 74.32 Page 3 of 5 Property Investment Analysis EXPENSES UTILITIES Exp/unitlyr Exp/unitlmo Electric 6,800 125.93 10.49 Gas (Owner paid unit heat) 19,000 351.85 29.32 Water/Sewer 12.000 222.22 18.52 Refuse 4,000 74.07 6.17 TOTAL UTILITIES 41 ,800 774.07 64.51 MAINT & REPAIR General Repairs 8,000 148.15 12.35 Appliance Repair 500 9.26 0.77 Janitorial Supplies 600 11.11 0.93 Plumbing Repair and Supplies 700 12.96 1.08 Heating Repair and Supplies 1,000 18.52 1.54 Electrical Repair and Supplies 550 10.19 0.85 Elevator Maint 1,800 33.33 2.78 Carpet Cleaning 1,000 18.52 1.54 Unit Painting 1,800 33.33 2.78 Maintenance Equipment / Supplies 800 14.81 1.23 Grounds Maintenance / Snow 6,700 124.07 10.34 Miscellaneous 1,000 18.52 1.54 TOTAL MAINT & REPAIR 24,450 452.78 37.73 PROPERTY TAX. Real Estate Tax (1.25% Class Rate) 5,000 92.59 7.72 (with TIF) TOTAL O/M EXPENSES 142,412 2,637.26 219.77 Net Operating Income 409,627 7,585.69 632.14 Debt Service: (315,227) (5,837.54) (486.46) Debt Coverage Ratio 1.30 Cash Flow 94,400 1,748.16 145.68 Cash on Cash Return 7.17% Page 4 of 5 Property Investment Analysis '1 I Development Cost Analysis Creekside Estates Proiect Budg~t Land. $ 324,000 Per Unit Cost 6,000.00 Site Development $ 395,000 Per Unit Cost 7,314.81 Building Cost $ 4,081,956 Per Unit Cost 75,591.78 Equipment $ 220,000 Per Unit Cost 4,074.07 Architectural I Engineering $ 114,000 Per Unit Cost 2,111.11 Legal $ 10,000 Per Unit Cost 185.19 Off-site development costs $ 119,600 Per Unit Cost 2,214.81 Total Development Cost $ 5,264,556 Per Unit Cost 97,491.78 75% L TV $ 3,948,417 Per Unit Cost 73,118.83 Investment Down Required $ 1,316,139 Per Unit Cost 24,372.94 MORTGAGE TERMS Payment (315,227) Interest Rate 7.00 Term 30 Page 5 of 5 NOU--2;3""-~ 17:52 95244'74245 P.>OO (AsJJllbdiJJedOecemb.r 6, 2Q04) Ero1tt: Date:: Hat'oldJeSh .A..ugust24, · 2004 "BUlF6r'fl'e$t ~.~~..~~}I)~lIIQ1lla.~.~.~<<I.ro()tlCUFSOtclYi~.pri~~ biiVe~l!f$~lheUSll()fTIIlC.~l\J.f1~S.~d~~.~~.sln<;~tbe .~~'Velo~1l1el1tt'equQ-esitopr~v~mCt1t$\VhiQhtbedev~1()pyr~..CQu1d ..noteconomica11y pro~~e....~o....cq.~t..tlQl1oU$ing..prqj~~... .Tu...incremet1t...financmg .~~c~..~. ne~essarytQ .assist...in...1llak~I...at..l~ast...200A...()ffJ1e....trnif~.affotdaJ>Ic:. .fnt....persQ.us...Witb in.comes.....t.e~~ ..~....50"...Q:i.the..(lI"((~..~cl~...famj.ly. .incomef . Tbe.....a5sistanee. .wW....a}so...make the~iningtu1ifsmore.affOrdableror persons ofmodetateinoome~ .HamId lcsh TOTAL P.~ ~23.,..2004 17:51 (A, ModilleCl Decemb.er 6, 20(4) Creebide~Ce""11I0n8'A.partments TargGtRentSchedu" ..(earntwitb orwfthoqt tJF) <:)n864 UnftBuiICflng 54GB .,StaHs 952~47424S P.02 It: " :''f x ',..t.* , . ,>j '\~:'/ '. t:.~. :;,:',; .' ", . ' ,";'; ~""'};f, .f;.~: .~.. Unlt~S~e'r": \" ," One.ar (30% of inc.) Gln~:....Br" (~tl~......Qf..'fnG.) One Br(30% of inc.) TWOBr TYioSr TWbBr TwoBr OAe St Two Br One Br ... Den{2Bth Qne Br+Den,,'2Bth TwoBr +Den,2Bth T'woBr+ .D~1'1.2Bth TwoBr Total Units . Rellted Current Monthly Potential Current AnnUQI.' Potential 3 3 :2 2 7 1 2 1 9 763 163 16a 913 933 962 1015 766 1005 1030 101'0 1.276 12-11 933 $65D $760 $'$29 $8S5 Se05 $965 $6$0 $9.65 $1t050 $1.200 $4,560 $7$0 $'1,858 $885 $8,145 $2,895 $1,9tO $2,100 $~ ,200 $54.800 $~,14Q '1~j89~ $10~620 $97,740 $34,740 $22,920 $25.20m $14.400 31 NOte: ~.nbJlr:t~d,o~~~~.Patkfntl~lJ. 11t1Jr..,.........~AMlfQr$cQtt County ~r~UU11tia: GasH., YES Water/SeMI": 'ItS Rjfute; Yes lJnltElqjc NO otHEltPRbfll'ERTY AM&Nn"lSS: Heated Garage WtJIfNC Elevator fffi.Uhlt~undlY 9otrtl;nunltyRoOm~dowCCV~ngs Qm~f{:ef~erator.. Range.~er ObraryCardfAetiVKy.:Room . Guest Room 1 ~stat~~fl~iJ~.~i..Wf1i1a'..'~:"'~I.are~frcm~...we.~..~~ ~~G.'~P'J~~~.AU~cn1Ina.tm_~~l.WIeIi~fttm$fm""p~ '8hfj..~~...~.ant:f~~aIlmr1maydiffE1ror.l'nll}i'.~."~ byMu", unf~~. I $2$O,11e NOO...23""'72el0417=51 9$24474245 P,,03 (AsModifiedDecember6,2Q04) Properly...tnVQ8tmentAnaIYlis Creekside Commons Apartmena S1atiIlZjdY...;AuatiSt 1~20()3 ...Juf ~31..2004 . I NUJ11_fofUOlw 64 NumJ,efof'..;arages v 54 . 1bg!~.ltt$.":fnWres:~etn~ wtail~.nQtWa 'ameed,,'a~seQ\lred ftml.80~....Wl!t'..'~JiVeautt'lc>rifd"e ,. '. .' INCOME Cnc>>trK!luHltlYeaf Inet>melunit(mo G~SfJltePctentJaf 18Q.11() 5.181 . G1 Stl1te~f1eY~@ 5 ..14~ooe ",259 -22 N"I"..aentll'r)c:oltlt!! 266.1 10 4~92Q . 411 G...~rM~i:PQteritbjJ - - e V~"'i" tit 0 .. - t4etG.rilge, InCome - .... ... MIS$.I~~.E V'ncffm'nCOm~ 245. 5 0 $lQrag,'f~ 10'78 20 ~. Inceme 294 5 - t.ateRtmt.F~ 98 2. [) Forfeit.Sec'.'oeo. 312 I- i fO(El,..lfOcomQ 147 a (} TOtaJ Mi$.~..lrtQt:Jrne 2~254 4:2 '3 T()taJE!ff~liYf! Gfos.$ 'ncome ~.364 4tS70 414 .. · EXp.ENSi:1l ~MnCU1/1InittYr Ex~; jWJr,titJMo 8"fAPFING $UiteeteQitt.._~'r/Ja1itor 16.()O() '4.96 25 GI.lr2tQ&OreattAOO,MgrIShop - - '"' W.AesMaoaa$riM*int GAJOO 111 9 M.anaget:L$tas{pglhcenU\I.,. 500 19 .2 "fO,....STAFFIi~PEHSE 22..500 417 S5 . 4DMINJ$T~llVElOP.ERATING ...... .- ~F_ 1S,Oaa 219 23 CreofffGrimlnalCfteeK 344 8 1 omc....~. Z;a21 43 4 Petrn~.tlCen$8 4i440 62 7 a-.UdtY .~~. Ink!.. ..... 1~600 30 ,2 Pufjltcr.~Qrt$ '~SZO 36 3 ~Ch$ges' 500 9 1 .Leg$ItAcCounUng 1$.1~ .292' 24 InSJrance 2f)~120 521 ~ P.vrCJI/Wort<....C'Qf11P 2;,7eO 51 4 Mv '-"~'-", 24;874 461 38 J)JI"'hOf'J~llers 2.$42 s 1 NOU-23---290417:51 9524474245 F'.04 (As MotAlIied Decemb,r6, .2104) MI~n"'eotl$ 473 9 1 TQ"'~AQ.''''.tAAnvEtOP. 100,7'_ 1~S11 .'. 165 UTftmEs SectnQ 6,011 111 9 ~i(Qwo~;ootdunltn.l 2G~14$ .323 :31 W~t~ 4.33a 80 .., ~"'.' 2~045 38 3 TOTAL UTltmes 32~$41 SOl . 50 . .... MAJNTE,.~ea;.REPAfR ~~rBl atPll~ 5t302 98 8 AoDft~.R"'r 119 " 0 ~~$.'ies 43 1 0 Plumb(ng,~~.d$qPPlk$ '$8S 7 'I 'Hermrig..~r.arld.suppnes 0 . 0 fJ e~(;i8J.~~"'d~SWPlf. 3,459 84 S; Sev.O~~ '. . 3,46'l' $4' 5' ~~t1ing ......, 1390 26 :2 ..JJnitF'aintmg ~. ... ..._'- 66 1 '. 0 Mai~eQUfp""~$lJDJ)1i~ 1742 32 _. 3 .Gro-$'~(ijm~~itJOw 12,206 22$ 19 M~II..~~ 192$ '4$. 3- TOTAL MNN1"ENANCE&RSPAIR ~;154 SSS .' '. 41 PMOPErrrv TJ\X s:l$'ll~ lax c 1 1.618 2:16 18 tOTAL SXPEN$ES 1 85j962 3444 287 NOV-23-2a04.17=52 9524474245 P.0S (As Modltied.Decemb,.t 6~20fJ4) Prcipertylo'l.ntm'ent An...I)'.ls For Cre4!kside..Commohs..Apartments CPST ANALYSIS " Tettjt......Conmctton....Cb$ts SttftCosts Land Gel1sral'Oonditions TotaIDE!Y'eIQpm,otQosf.$ lnvestmEant.! .DoWfl..'Payment Balabce..to..lUfongage M.1_~~.~~~t.-i):: ~:'~ ~-~ 4~2S1t901 538J~32 3~lOOO 111~568 5,262,101 1,315,527 3.94f$.fi8Q "NANCIAl-ANALYSIS Annual' Payment Jntere$tR.ate Term 3~~.()84 7~QO% 30 NbV-23-~eJ~4 19=52 9524474245 P~0S (ASModilleclDecemberSj2()84) Sreeltsfde..CommQQsApadmen($ ~.Property' 'nV~tn1erttAnilY.flf WithTlF (cC)nt) . , i .. ")j....itl.,'S:',i' _,it",. '1' ......."'....~.l..~ .1.. c. 6.,>.."; :.......::~...=<,... '~.'.":'" _.".'.' ~1I.~t....\~.,' ~.'.".'. "''*.'.', ...::,n......l'~ ..):. .......A.........l:..........,:..-. ....' '\.":."~". :~.':~t.~...l:.1i!t~., . '...... .':'. ".:.'_~\~' .. . -. "".:-"""-'" t, .....'. ;,.,,'r.:~1~~:~,,/_. ""'-,"Jf" :p::--:."". ..,. "l,.t..J: ".e.' ns.elUnWY'ear.e '.'}enawnftlMOllth 114ya84 3,227 .269 1t,678 216 is T'O'TAL.QtIt4..DPE!NSES 185,962 ~ 287 185;,Q&2 3A44 1.52$ 281 84402.' a1~.084 ...2S2,S8i 1:21 Debt .Service 5,800 486 Ca$b'.FIQ'W ~309 ~'9 Debtet)VQrage~o C"hcmCa.h~QI G~26 ...0.18% ~23+2e04 .17.~52 9524474245 P..07 (As. Modifittl December 6,.2004) CrekSide.....CQmm0I18...Aparttrlenfs ..Apartments Propedy JnvestrDentAnalysiswithoutTIF (cont) " . ..'1:"'~ ',/'1\!t-:1;. n~nifrt;f)~r f.... ..1.". ~:.':..~.:':.......' :..~.~\4..:.'.;'.~......'J.~.'.t:~.'fi,. ......~..... j..,....~;... . t" j1: .' 't:::._:~._\ .l,;';t;\'l."*..~-:~'~-'l'.:~...." " ," ',' '~...lUnfttMOQtb ' 8U!J'TOTAL.EXPENSIS fsr;sPAevrou.$"AGI5) PRO peATY TAX REraf.Estate:tax 174.484 31241 269 54;000 1 lOCO 63 rtrrJU..OIMEXPEN$ES ~f" 4~221 352 T'otalExpense.t Before Debt 2Z8,~84 -t~7 3S2 Net QP-..atiq .lrlQQrne Debt Service AO~oao 316;P&4 142 62 ';'2-75,G()4 5,8~5 ..$,09'3 4S8 Cash....Flow ....24 DebtSOvetage.Ratlo 0.13 Caho" O.a$h RQt "().21 % NOU~23-~4 .17:5~ (AS . ModltiedfJecember 6,. 2004) 9524474245 P.0B Propertyinve$ltneht.A.nalysia Oevelopme.nt.Cost.Analyafs Oreek.ide. Commofts.Apartment.s 5324000 $403.032 $4281907' $12$~600 $1'o.QO() $1tt.. $5,.262/(01 $394GB8O $11'316t52.7 $31StDa1 1% 30 ... . ears. Per Unit(';.c)St PerUnitCO$t P$rUnnoOSt PerUnft....CO$f p~ UnilCQst Per UoJt..Ccst I?er.u"it~ PerUtdtCC$t P"UnitCost 6..000 1564- 7~.405 2S6 185 2066 9'11~ ^-'_"~'~'-';'~^"'_~'~'.."'--_"'_"""'G""_""'"""""""'",'~_"'_____,_",,~..'.'_'_~_~'__"'--'-"_"._"___ T'P 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 RESOLUTION 04-147 A RESOLUTION CALLING FOR A PUBLIC HEARING BY THE CITY COUNCIL ON THE PROPOSED MODIFICATION OF THE DEVELOPMENT PROGRAM FOR THE DEVELOPMENT DISTRICT NO.3 AND THE PROPOSED MODIFICATION OF TAX INCREMENT FINANCING DISTRICT NO. 3.1 THEREIN AND THE ADOPTION OF THE TAX INCREMENT FINANCING PLAN THEREFORE. (CREEKSIDE ESTATES) Motion By: PETERSEN Second By: BLOMBERG WHEREAS, the Creekside Commons Senior Rental Project consists of a 54-unit 3-story building offering 42 market rate rental units and 12 low-to-moderate income units ("Project"); and WHEREAS, the City Council of the City of Prior Lake established Development District No. 3 and adopted the Development Program and approved tax increment funding therefore by Resolution 01-138 dated December 17, 2001: and WHEREAS, the owners of the Project have made an application to restructure ownership of the Project and amend the tax increment financing plan therefore; and WHEREAS, in order to consider an amendment to the tax increment funding plan, the City must conduct a public hearing on the proposed modification. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA that: 1. The recitals set forth above are incorporated herein. 2. A public hearing to consider a proposed modification of the Development Program for Development District No.3, and the proposed modification to the tax increment financing plan for TIF District No. 3-1 (a housing district) therefore, all pursuant to and in accordance with Minnesota Statutes, Section 469.174 through 469.1799, inclusive, as amended, in an effort to encourage the development and redevelopment of certain designated areas within the City, shall be conducted on December 6,2004 at 7pm at Prior Lake Fire Station NO.1 (16776 Fish Point Road SE, Prior Lake, MN). 3. City staff is authorized and directed to work with Ehlers & Associates, Inc. to prepare the modifications and to forward documents to the appropriate taxing jurisdictions including Scott County and Independent School District No. 719. The City Clerk is authorized and directed to cause notice of the hearing, together with an appropriate map as required by law, to be published at least once in the official newspaper of the City not later than 10, nor more than 30, days prior to December 6, 2004, and to place a copy of the modifications on file in the City Clerk's office at City Hall and to make such copy available for inspection by the public. PASSED AND ADOPTED THIS 4TH DAY OF OCTOBER, 2004. www.cityofpriorlake.com Phone 952.447.4230 / Fax 952.447.4245 Haugen X Haugen Blombera X Blomberg LeMair X LeMair Petersen X Petersen Zleska X Zieska YES NO City Ma?:!. ~r Lake R:\RESOLUTI\ADMINRES\2004\Creekside TIF Amend.DOC __,~"""'~"'''',,-.v..~_''_~'__'''''''''''''''''''''''''''''''~~'''''''"_'~_'''~__''''-'.'"'''_'''''''''''_''__~...."._+""''''-~_.~,.....,'~"'....<-~-~~..........'''''".>'-".."'<,'''-.~....-.,.,.,",~.~-~-~-,',,,,---,,.",---,~-~,-,~"""-''''-'~-'----''''_'-'''''-~"".~' , NOTICE OF PUBLIC HEARING CITY OF PRIOR LAKE SCOTT COUNTY STATE OF MINNESOTA NOTICE IS HEREBY GIVEN that the City Council of the City of Prior Lake, Scott County, State of Minnesota, will hold a public hearing on December 6,2004, at approximately 7:30 P.M. at the Prior Lake City Council Chambers in City Hall, 16200 Eagle Creek Ave. SE, Prior Lake, Minnesota, relating to the proposed adoption of a modification to the Development Program for Development District No.3, and the proposed modification to the Tax Increment Financing Plan for Tax Increment Financing District No. 3-1 (a housing tax increment financing district) within Development District No.3 (collectively, the "Modifications") therefor, pursuant to Minnesota Statutes, 469.124 through 469.134 and Sections 469.174 to 469.1799, all inclusive, as amended. Copies of the Modifications are on file and available for public inspection at the office of the City Clerk at City Hall. The property included in Tax Increment Financing District No. 3-1 is located within Development District No.3 and the City of Prior Lake. A map of Development District No.3 and Tax Increment Financing District No. 3-1 therein is set forth below. Subject to certain limitations, tax increment from Tax Increment Financing District No. 3-1 may be spent on eligible uses within the boundaries of Development District No.3. [INSERT MAP of Development District No.3, and Tax Increment Financing District No. 3-1] All interested persons may appear at the hearing and present their views orally or prior to the meeting in writing. BY ORDER OF THE CITY COUNCIL OF THE CITY OF PRIOR LAKE, MINNESOTA /s/ City Clerk ,_,__,,,,,,,,~,_"J.........,,.~...,....,,... .,..'.-..."_.....,.."~,.=....'"...,.""_........~_.,._".~..."'_..."'..."_._,,...,~''''~...-...,~"."..~~".,-''~..........."~,...,...;...,;-''^'.