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HomeMy WebLinkAbout05-8516200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 RESOLUTION 05-85 RESOLUTION ADOPTING A REDEVELOPMENT PLAN FOR DEVELOPMENT DISTRICT NO. 4; AND ESTABLISHING TIF DISTRICT NO. 4-1 WITHIN DEVELOPMENT DISTRICT NO. 4 AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. MOTION BY: Petersen SECOND BY: Fleming It has been proposed by the City that the City adopt a Development Program for Development District No. 4 (the "Development Program") and establish TIF District No. 4-1 (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Development Program and the TIF Plan are referred to collectively herein as the "Program and PI.an"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.124 to 469.134 and Sections 469.174 to 469.1799, all inclusive, as amended, (the "Act") all as reflected in the Program and Plan, and presented for the Council's consideration; and WHEREAS, The City has investigated the facts relating to the Program and Plan and has caused the Program and Plan to be prepared; and WHEREAS, The City has performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Program and Plan, including, but not limited to, notification of Scott County and Independent School District No. 719 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Program and Plan by the City Planning Commission, and the holding of a public hearing upon published notice as required by law; and Certain written reports (the "Reports") relating to the Program and Plan and to the activities contemplated therein have heretofore been prepared by staff and consultants and submitted to the Council and/or made a part of the City files and proceedings on the Program and Plan. The Reports include the Application for Financial Assistance, the but-for comparison, data, information and/or substantiation constituting or relating to the basis for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of thig resolution to the same extent as if set forth in full herein; and The Council recognizes that, pursuant to Minnesota Statutes, Section 469.177, Subd. 3, clause b, there is a mandatory fiscal disparities contribution for the District, an economic development district. R:\RESOLUTI~ADMINRES\05-85 establishTIF 4-1.doc www. cityo fpriorlake, com Phone 952.447.4230 / Fax 952.447.4245 NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA, 1. The recitals set forth above are incorporated herein. 2. Findings for the Adoption and Approval of the Program and Plan. The Council hereby finds that the Program and Plan, are intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development in the public purpose and accomplish certain objectives as specified in the Program and Plan, which are hereby incorporated herein. 3. Findings for the Establishment of TIF District No. 4-1. The Council hereby finds that the District is in the public interest and is an "economic development district" under Minnesota Statutes, Section 469.174, Subd. 12. The Council further finds that the proposed development would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the Tax Increment Financing Plan, that the Program and Plan conform to the general plan for the development or redevelopment of the City as a whole; and that the Program and Plan will afford maximum opportunity consistent with the sound needs of the City as a whole, for the redevelopment or development of the District by private enterprise. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, as set forth in Exhibit A, which Exhibit A is incorporated herein and made part of this Resolution as if fully set forth herein. 4. Public Purpose The adoption of the Program and Plan conforms in all respects to the requirements of the Act and will help to provide employment opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. 5. Approval and Adoption of the Program and Plan. The Program and Plan, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the City Manager. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Program and Plan and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents R:\RESOLUTI~ADMINRES\05-85 establishTIF 4-1 .doc and contracts necessary for this purpose. The Auditor of Scott County is requested to certify the original net tax capaci,ty of the District, as described in the Program and Plan, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the City of Prior Lake is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. The City Manager is further authorized and directed to file a copy of the Program and Plan with the Commissioner of Revenue pursuant to Minnesota Statutes 469.175, Subd. 4a. Passed and adopted this 16th day of May, 2005. YES NO Haugen Absent Haugen Absent Fleming X Fleming LeMair X LeMair Petersen X Petersen Zieska X Zieska Frank B~)~;les, R:\RESOLUTI~ADMINRES\05-85 establishTIF 4-1 .doc EXHIBIT A The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for TIF District No. 4-1 as required pursuant to M.S., Section 469.175, Subd. 3 are as follows: Finding that the TIF District No. 4-1 is an economic development district as defined in M.S., Section 469. ! 74, Subd. 12. TIF District No. 4-1 is a contiguous geographic area within the City's Development District No. 4, delineated in the Plan, for the purpose of financing economic development in the City through the use of tax increment. The District is in the public interest because it will facilitate construction of an approximately 8,119 sq. ft. research and development, testing, and warehouse building for Onsite Engineering and Forensic Services, Inc. which will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality; it will increase employment in the state, and preserve and enhance the tax base of the state. 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 TIF District No. 4-1 permitted by the TIF Plan. The proposed development, in .the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the development proposed in this plan is a research and development, testing, and warehouse facility that meets the City's objectives for economic development. The cost of land acquisition, site and public improvements and utilities makes development of the facility infeasible without City assistance. The developer has asked for and provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistance (see attachment in Appendix F). The proforma demonstrates that the return for the developer is below market rate of return, and therefore, tax increment assistance is needed to make the project feasible. 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 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 TIF Plan: The City supported this finding on the grounds that the cost of land acquisition, 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 $789,100. The present value of tax increments from the District is estimated to be $65,275. It is the Council's finding that no development with a market value of greater than $723,825 would occur without tax increment assistance in this district within 9 years. This' finding is based upon evidence from general past experience with the high cost of acquisition and public improvements in the R:\RESOLUTIWDMINRES\05-85 establishTI F 4-1 .doc general area of the District (see Cashflow in Appendix D). Finding that the TIF Plan for TIF District No. 4-1 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the general development plan of the City. Finding that the Tax Increment Financing Plan for TIF District No. 4-1 will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of Development District No. 4 by private enterprise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, increased tax base of the State, and add a high quality development to the City. R:\RESOLUTI¥~DMINRES\05-85 establishTIF 4-1.doc