HomeMy WebLinkAbout06-029 CITY OF PRIOR LAKE
SCOTT COUNTY
STATE OF MINNESOTA
Council member Millar introduced the following regolution and moved itg adoption:
RESOLUTION NO. 06-29
RESOLUTION ADOPTING A REDEVELOPMENT PLAN FOR DEVELOPMENT
DISTRICT NO. 5; AND ESTABLISHING TAX INCREMENT FINANCING
DISTRICT NO. 5-1 THEREIN AND ADOPTING A TAX INCREMENT FINANCING
PLAN THEREFOR.
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. It has been proposed by the City that the City establish Development District No. 5 and adopt
a Development Program (the "Development Program") therefor and establish Tax Increment Financing District
No. 5-1 (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 Plan"); 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.
1.02. The City has investigated the facts relating to the Program and Plan and has caused the
Program and Plan to be prepared.
1.03. 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.
1.04. 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 2030
Vision and Strategic Plan, Development Potential and Market Analysis (by McComb Group), Business
Subsidy Policy and TIF Policy, TIF Application, Report of Inspection Procedures and Results for Determining
Qualifications of a Tax Increment Financing District as a Redevelopment District (by LHB on December 16,
2005), 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 this resolution to the same extent as if set forth in full
herein.
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Section 2. Findings for the Adoption and Approval of the Program and Plan
2.01. 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 interest and
accomplish certain objectives as specified in the Program and Plan, which are hereby incorporated herein.
Section 3. Findings for the Establishment of Tax Increment Financing District No. 5-1
3.01. The Council hereby f'mds that the District is in the public interest and is a "redevelopment
district" under Minnesota Statutes, Section 469.174, Subd. 10.
3.02. The Council further fmds that the proposed redevelopment 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 conforms 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 development or redevelopment of the District by private enterprise.
3.03. The Council further f'mds, declares and determines that the City made the above f'mdings
stated in this Section and has set forth the reasons and supporting facts for each determination in writing,
attached hereto as Exhibit A.
3.04. The City of Prior Lake elects to calculate fiscal disparities for the District in accordance with
Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution would
be taken from inside the District.
Section 4. Public Purpose
4.01. The adoption of the Program and Plan conforms in all respects to the requirements of the Act
and will help fulfill a need to develop an area of the City which is already built up, to provide employment
opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a
public purpose.
Section 5. Approval and Adoption of the Program and Plan
5.01. 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 Clerk.
5.02. 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 and contracts necessary for this purpose.
5.03 The Auditor of Scott County is requested to certify the original net tax capacity 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
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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.
5.04. The City Clerk is further authorized and directed to file a copy of the Program and Plan with
the Commissioner of the Minnesota Department of Revenue and the Office of the State Auditor pursuant to
Minnesota Statutes 469.175, Subd. 4a.
The motion for the adoption of the foregoing resolution was duly seconded by Council member
Erickson, and upon a vote being taken thereon, the following voted in favor thereof:
Mayor Haugen
Councilmember Dombush
Councilmember Erickson
Councilmember Millar
and the following voted against the same: None
Councilmember LeMair was absent from the meeting.
Dated: March 6, 2006
Mayor
ATTEST:
City Clerk
(Seal)
3/7/2006
EXHIBIT A
RESOLUTION NO. 06-29
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF Plan) for
Tax Increment Financing District No. 5-1 (District), as required pursuant to Minnesota Statutes, Section 469.175,
Subdivision 3 are as follows:
Finding that Tax Increment Financing District No. 5-1 is a redevelopment district as defined in M.$., Section
469.174, Subd. 10.
The District consists of 1 parcel, with plans to redevelop the area for commercial purposes. At least 70
percent of the area of the parcels in the District are occupied by buildings, streets, utilities, paved or gravel
parking lots or other similar structures and more than 50 percent of the buildings in the District, not including
outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance. (See
Appendix F of the TIF Plan.)
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 couM reasonably be expected to occur without the use of tax increment
financing wouM 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. 5-1 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 redevelopment proposed in the TIF Plan meets the City's objectives for redevelopment. Due to the
high cost of redevelopment on the parcels currently occupied by substandard buildings, the limited amount of
commercial property for expansion adjacent to the existing project, the incompatible land uses at close
proximity, and the cost of financing the proposed improvements, this project is feasible only through
assistance, in part, from tax increment financing. The total amount of assistance to the project is $135,000.
This amount will be used to assist with redevelopment cost and help the project become more financially
feasible. The assistance is being used to assist with the purchase of the dilapidated building, demolition of the
building (estimated to be $24,000) and other redevelopment costs.
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 District permitted by the TIFPlan: This f'mding is justified on the grounds that the cost of site and public
improvements and utilities add to the total redevelopment cost. Historically, site and public improvements
costs in this area have made redevelopment infeasible without tax increment assistance. Therefore, the City
reasonably determines that no other redevelopment 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
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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
$863,500. The present value of tax increments fi:om the District is estimated to be $134,366. It is the
Council's finding that no development with a market value of greater than $729,134 would occur without tax
increment assistance in this district within 25 years. This f'mding is based upon evidence from general past
experience with the high cost of acquisition and demolition in the general area of the District. (See Cashflow
in Appendix D of the TIF Plan.)
Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 5-1 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 Tax Increment Financing District No. 5-1 will afford
maximum opportunity, consistent with the sound needs of the City as a whole, for the development or
redevelopment of Development District No. 5 by private enterprise.
The project to be assisted by the TIF District will result in increased employment in the City and the State of
Minnesota, the renovation of substandard properties, increased tax base of the State and add a high quality
development to the City.
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