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Home My WebLink AboutTIF Plan District 2-6 - ::;EiL 1-+- 1 ':.J':j::, 12: 21 FRUi'1 HDUHr--iCE I NC . TIJ PR I Uf:( U-if.-T-C 1 1'/ F..J2 DYANC. DATE: September 14, 1995 TO: Prior Lake City Council FROM: Roger Guenette. Development Consultant SUBJECT: Resolution 95-102 Approving iax Increment Finandng District 2.6 and the Use 01 Tax Increment Financing. BACKGROUND On Tuesday, September 19th, the City Council will conduct a public hearing on th<: establishment vf (A tax increment financing district in support of a proposed expansion by NBC, Inc. into the VVate-rfront Passage Business Park NBC. Inc. is a manufacturer of electronic filtration systems and markets to companies ~uch as 3M, Honeywell and KATUN. The company has b~n in operation since 1976 and has a history of profitability . DISCUSSION Th~ proj&Ct \"CUld result in the creation of 26 new jobs in the community The d8ve!opmc,..,~ ''''Quid oc~ur 01'\ a 1.83 acr~ parcel situated south of the E M Products site. Th~ facility will be 19.:00 SF and constructed of concrete panels. The City Engineer and Planning Oepartrn~nt have met with the- company and contr3ctor (EFH, lnc) and are supportive of the proposed development. The company ha!; se-cured bank financing from Uberty State Bank and is seeking tax increment incenU...e3 to reduce the cost of iand acquisition: The proposed tax ln~remant program requires the company to pay $75,000 up front fvr land. The projec.t will generate approximately $33,OOO/year in new increment. Of this amount, the Crty would rec\1ive a pre-;ent value of $111,800 Cn'o discount) over the next 11 years. The combined payment to th~ City would thus be $186,800. This calculates to $2.34/SF which is well in excess of the pro forma goal for th~ business park of $1.93/SF. ISSUES The company would reCG1VQ $75,000 (present value) in tax increment rebc1tes over tha next 7 years The City will formalize and secure rtself via a development agreement, assessment agreement and gU3i'antee of payment for the tax increments. ALTERNATIVES: 1) Approve the tax Increment financing as proposed and authorize execution of the dcvelcpment agreement. OR 2) Deny the tax Increment financing proposal. Business Finance and Economic Development Specialists c-::>"'.....):~....TO: cr-,: C(S: P O. Box 32009 Mpls MN 55432-0609 Phon>;. (~12; 756-7? 41 FOA: (612) 755-5393 p.o. 60). 3027 l'''I~..,t.:ato MN 56CQ2..3G27 P:-,one ,:'07) 3t.7-~'11': Fo;>;, (S'"J;') ::137-611:, SE2-14-1995 12:21 FROM HDURNCE INC. Tl.J PR I OR U~kE-C I r( F'. iJ3 RECOMMENDATION: Approve the tax increment financing program as proposed and authorize (:xecution of the d~V(.:lopment agreement, Thig project mee~ alt of the City's goals for tax base enhanc()m~nt. job craatiori ar.d exc~s the pro forma targets for the Waterfront Passage Business Park. ACTION REQUIRED Motion and Second to a.pprove Resolution 95-102 -Approving Tax l"[er ment Financing District 2~6 and the Use of Tax Increment Financing-. ~... ,,-, ot...::>e.bl. ~ 1J. - SEP-l~-lS~5 1~:22 FROM HDIJH~.JCE I NC. TO PR I iJR U~KE -C I r ( P .l14 RESOLUTION 950102 MOTION BY: SECONDED BY: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PRIOR LAKE APPROVING TAX INCREMENT FINANCING DISTRICT NO. 2-6 AND THE USE OF TAX INCREMENT FINANCING WHEREAS, the City Council of the City of Prior Lake, Minnesota (th~ .City"), ht1s previously approved De\lefcpment District NO.2 (the "D~Yelopment District") and in connection therewith adopted 3. development program: and WHEREAS. it is d~sirable and in the public interest that the City undertal(e and carry out a tax increment finance plan for Tax increment Financing District No. 2-6 pursuant to Chaptei 469 of Minnesota St3tutes, encompassing the area which is more particularly described on Exhibit A ~ttaC.h9d hereto and mdd~ a part hereof, (which area is herein called the -District"); and WHEREAS, the City Council has reviewed "Tax IneremQnt Financing District No. 2-6. datGd September 19. 1995" (the "P!ar: Booklet"). wt"lich sets forth a tax increment financing plan for the Distiict; and WHEREAS, the Plan Booklet sets forth the Cit-is estimate of the fiscal and I?ccl'icmic impact of tneS District on the tax: capacities of all taxing jurisdictions in which the District is located. and WHEREAS. the Beard of Commissloners of Scott County. Minnesota, ha$ b,*"t1 notified of the public hearing for the review of the Plan Booklet; and \f/HEREf..S, the School Board of Independent Schoof District No. 719 has b~i1 notified of the public hearing for the review of the Plan Booklet; and WHEREAS. the Crty has received and considered the comments of the Soard of Commissioners of Scott County and the School Board of the Independent School District No. 719 respecting the contents of the Plan Booklet; and WHEREAS. the Ctty on September 19. 1995, a1tf;:( having published a notice of public hearing in the official newspaper of the City. conducted a public hearing on the Plafl Booklet and recervcd public comments on the same. NOW, THEREFORE. BE IT RESOLVED by thQ City Council of the City of Prior Lik€:, Minn~&uk1, as follows: ,. The City finds and determines that there is a need for the activities of Devdopment District No.2 to be financed in part by the tax increments from the District. 2. The City 1inds and determines that the activities to be financed by the tax increments. from the District vv;1! carry out the objectives of Development District No.2 by encouraging il1dustrial dev~lop. ment, providing job opportunities and enhancing the tax base. 3. The Crt)' finds and determines that the provision for job opportunities Clnd the preservation and enhancement of the tax base are in the public interest of the City and the expenditures of the District are a public purpose. 4 The cny finds and determine~ that the tax increment financing plan as set forth in th~ Plan Booklet having been duly reviewed and considered is hereby approved and adopted. and the area described in E.xhibit A hereto is hereby designated as an Economic Development District pUrswant to Minnesota Statutes, Sections 469.174, Subd. 12. ~cr-~4-1~~~ l~:~~ FROM HUUHNCE I r~C . TI] i-'i'<:lUr< LHKE-CIT'-( P.05 5. The City finds and determines that the District is an Economic DEt\l9lopment District b9cause it v.J111 result in increased employment in the City, and that it will r9Sult in presQNation and enhancement of the tax base of the City. 6. The City finds and determirics that the proposed developmant, in the opinion of the Crty, would rIot reasor.ably bg QXpQCt9d to oocur solely through private in\le~ment within th~ reas.onably for~ce€- able future and therefore the use of tax increment financing is deemed nQCQSsary. 7. The City finds and determines that the tax increment financing plan 'Nil! afford maximumopportunl~ r, t consistent with the sound needs of the City as a 'Nhcic. for the development cf the District by private enterprise. S. The City finds and determines that the tax increment financing plan set forth in the Plan Booklet conforms to the general plan 1cr th& d&valopm9nt of the City as a wholQ. 9. The reasons and suppcrting facts for findings 5. 6.7 and 8 as set forth on pages 3 and 4 of the Plan Booklet are by this reference confirmed, approved and adopted. 10. The Crry elects to retain tax increment revenues generated in Dtstrict No. 2-6 pursuant to clause (a) of Minnesota Statutes. Section 469.177 Subdivision 3, Paragraphs 1 and 2. 8y rnaking this .alecticn taX' increment ievenues generated within ~istrict No. 2-6 will not be made available for calculation or sharing with the fiscal disparity provisions of Chapter 473F. 11. Pursuant to the 1995 OmnibUS Tax Bill, ,t'rticle 5, Section 6. the City requ~$.tc an exemption from a LGA,iHACA penalty b9Cause a contribution of unrestricted funds in oxcess 01 1 O"~~ of the tax increment to be generated will be made in support of the project. 12. The Crt.y Clerk ~halll"equest the auditor of Scott County to certify the original tax capacity and original local tax rate of the Distrid approved by this resolution. 13. Ths City Clerk is hereby directed to file a copy of this resolution with a copy of the PI~(j Booklet to the Minnesota Department of Revenue. 14. The City hereby ~tatos its intention to use an of th& captured tax c..":lPo.city for purposes of tax increment financing as per the conditions set forth in the Plan Booklet. Passed and adopted this 19th day of September, 1995. YES NO Andren Greenfield Kedrowski Scott Schenck Andren Greenfield Kedrowski Scott Schenck Frank Boyles City Manager City of Prior Lake (Seal)