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Home My WebLink About5H - TIF District No. 5-1 MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 CITY COUNCIL AGENDA REPORT December 19, 2005 5H PAUL SNOOK, ECONOMIC DEVELOPMENT DIRECTOR CONSIDER APPROVAL OF A RESOLUTION CALLING FOR A PUBLIC HEARING ON THE ESTABLISHMENT OF THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO.5; THE PROPOSED ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 5-1; THE PROPOSED ADOPTION OF THE TAX INCREMENT FINANCING PLAN THEREFOR, AND ON THE PROPOSED AWARDING OF A BUSINESS SUBSIDY. I ntrod uction City Council is asked to call for a public hearing for the establishment of Tax Increment Financing District No. 5-1 for the purposes of assisting in the redevelopment of Lot 13, Block 13 & Lot 14 & west 12' of Lot 12 (4616 Colorado 8t.) in the downtown area, for the future location of Premiere Dance Academy (PDA). History The property contemplated for the new building is located at 4616 Colorado 8t. The property includes a house that is severely blighted, boarded up and a prime candidate property for redevelopment. The structure has been inspected to determine if it meets the statutory definition of blighted property. PDA is a locally based dance academy offering a comprehensive program and excellent training in dance technique, teamwork and performance quality. PDA has outgrown its current facility at 16210 Eagle Creek Ave. Over the last few years PDA owner Dawn 8chulberg has been seeking larger space in Prior Lake. PDA owner has purchased the 4616 Colorado St property from IVEX. IVEX was considering redevelopment of the property into office and commercial space, but opted to sell and bid on the Main and Hastings property. Current Circumstances PDA needs additional space for expansion and is proposing to construct an approximately 10,000 sq ft building on Lot 13, Block 13 & Lot 14 & west 12' of lot 12. The property is currently zoned R-2, with the 2030 Comprehensive land Use Plan calling for that parcel to be designated as C-TC (Town Center). On December 1, 2005 the DRC discussed initial plans for the proposed PDA. Staff forwarded on a letter with (Building, Planning, Engineering) comments and the portion of the Code that details the downtown district regulations. PDA is in the beginning phase with the site layout and will continue to meet with staff / DRC (regarding building elevations, etc.) to advance the project. PDA has submitted preliminary and full applications for TIF, and has paid the required TIF fees. www.cityofpriorlake.com R\RESOLUT'\/\lii'/!Ni:;;!::S\2D05\! 20\~W~h~ 95'2~~4 Y:~Z30}) ?(F~x 952.447.4245 .,'_...-.._-------.....-----"_.~---,.---~._~"-'_.^><-~.,...,._.~_.........~ City TIF financial consultant Ehlers & Associates has completed a preliminary review of the project and has deemed it eligible for TIF. Furthermore, the project / applicant has received a favorable review of the "but/for" test and analysis which was completed among the applicant, staff and Ehlers. A requirement of TIF is that the municipality must essentially find that the proposed TIF assistance is necessary to bring about the proposed development. In order to further this development request it is necessary to call for the public hearing via approval of a resolution, and for staff and fiscal consultant Ehlers & Associates develop a plan for Development District No.5, and establish TIF District No. 5-1, which is the subject parcel. The applicant has purchased the property necessary for the project, and plans on starting demolition and construction as soon as possible, contingent upon City approvals of the site / building plan and TIF. Conclusion The City Council should determine if it desires to consider using tax increment financing for this redevelopment project. If the Council wishes to proceed, it should, by resolution, set a public hearing date. ISSUES: The issue for the City Council to consider in the public hearing is whether the City Council wants to provide TIF to this proposed project. In making the decision, the City Council needs to consider the Business Subsidy Policy as well as the TIF Policy. Key criterion for the business subsidy and TIF policies is "the removal of blight / and or encourage development of commercial and industrial areas in the city that result in higher quality development or redevelopment and private investment". The proposed project appears to meet this criterion. The City Council should also consider whether this proposed development is consistent with the redevelopment and financial objectives of the city as set forth in the 2030 Vision and Strategic Plan, as well as the 2030 Comprehensive Plan. A formal business subsidy agreement and contract for private development would be entered into between PDA and the City outlining performance goals. ALTERNATIVES: 1. Approve the resolution. 2. Deny the resolution. 3. Defer for a specific reason. RECOMMENDED MOTION: Alternative 1. Reviewed by: 1 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 RESOLUTION NO. OS-XXX RESOLUTION CALLING FOR A PUBLIC HEARING BY THE CITY COUNCIL ON THE PROPOSED ADOPTION OF THE ESTABLISHMENT OF THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO.5; THE PROPOSED ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 5-1; THE PROPOSED ADOPTION OF THE TAX INCREMENT FINANCING PLAN THEREFOR, AND ON THE PROPOSED AWARDING OF A BUSINESS SUBSIDY. BE IT RESOLVED by the City Council (the "Council") for the City of Prior Lake, Minnesota (the "City"), as follows: Section 1. Public Hearing. This Council shall meet on February 20,2006, at approximately 7:00 P.M., to hold a public hearing on the proposed establishment of the Development Program for Development District No.5, the proposed establishment of Tax Increment Financing District No.5-I, (a redevelopment district), the proposed adoption of a Tax Increment Financing Plan therefor, and the proposed awarding of a business subsidy, all pursuant to and in accordance with Minnesota Statutes, Sections 469.124 to 469.134, and Sections 469.174 to 469.1799, inclusive, as amended, and Minnesota Statutes, Sections 1161.993 through 1161.995 in an effort to encourage the development and redevelopment of certain designated areas within the City; and Section 2. Notice of Public Hearing, Filing of Program and TIP Plan. City staff is authorized and directed to work with Ehlers & Associates, Inc., to prepare the establishment of the Development Program for Development District No.5, and the Tax Increment Financing Plan for Tax Increment Financing District No. 5-1, 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 February 20, 2006, and to place a copy of the Program and Plan 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 19th DAY OF DECEMBER, 2005. YES NO HaU2en Hau2en Flemin2 Flemin2 LeMair LeMair Petersen Petersen Zieska Zieska Frank Boyles, City Manager C:\Documents and Settings\cgreen\Local Settings\Temp~~tatmi.rolltt Resolution (2).doc Phone 952.447.4230 / Fax 952.447.4245 -".,.~-_.".._--~,....---~....-.,-~....-.......,. DRAFT -- SCHEDULE OF EVENTS CITY OF PRIOR LAKE FOR THE ESTABLISHMENT OF THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO.5 AND THE ESTABLISHMENT OF THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 5-1 (a redevelopment district) AND THE PROPOSED A WARDING OF A BUSINESS SUBSIDY December 19,2005 City Council calls for public hearing on the establishment of the Development Program for Development District No.5, the establishment of Tax Increment Financing District No. 5-1 and the awarding of a business subsidy. December 20,2005 Project information (property identification numbers and legal descriptions, detailed project description, maps, but/for statement, and list of sources and uses of funds) for drafting necessary documentation sent to Ehlers & Associates. Ehlers & Associates confirms with the City whether building permits have been issued on the property to be included in TIF District No. 5-1. January 5,2006 Letter received by County Commissioner giving notice of potential redevelopment tax increment financing district (at least 30 days prior to publication of public hearing notice). [Ehlers faxes and mails on January 3, 2006J January 6, 2006 Project information submitted to the County Board for review of county road impacts. [Ehlers faxes & mails on January 4, 2006J January 20, 2006 Fiscal/economic implications received by School Board Clerk and County Auditor (at least 30 days prior to public hearing). [Ehlers faxes & mails on January 18, 2006J February 4,2006 Date of publication of hearing notice and map (at least 10 days but not more than 30 days prior to hearing). [Prior Lake American publication deadline January 30, 2006J February 13,2006 Planning Commission reviews Program and Plan to determine if they are in compliance with City's comprehensive plan. February 20,2006 City Council holds public hearing at 7:00 P.M. on the establishment of the Development Program for Development District No.5, the establishment of Tax Increment Financing District No. 5-1 and the awarding of a business subsidy and passes resolution approving the Program, Plan, and awarding of a Business Subsidy. [Ehlers e-mails council packet info. to the City by February 13, 2006J ,2006 City authorizes Ehlers to request certification of the TIF District. , 2006 Ehlers & Associates requests certification of the TIF District from the state and county. *Business Subsidy Criteria along with the next annual report need to be submitted to the MN Department of Employment and Economic Development. ** The County Board, by law, has 45 days to review the plan to determine if any county roads will be impacted by the development. Please be aware that the County Board could claim that tax increment should be used for county roads. An action under subdivision 1, paragraph (a), contesting the validity of a determination by an authority under section 469.175, subdivision 3, must be commenced within the later of: (1) 180 days after the municipality's approval under section 469.175, subdivision 3; or (2) 90 days after the request for certification of the district is filed with the county auditor under section 469.177, subdivision1. .. I E H L E R S Location Map 4616 Colorado Street 80 0 80 160 Feet I I N +