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HomeMy WebLinkAbout22-136 TIF 1-6 Prior Lake Lofts 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 22-136 A RESOLUTION APPROVING THE ENLARGEMENT OF MUNICIPAL DEVELOPMENT DISTRICT NO. 1 AND A MODIFIED DEVELOPMENT PROGRAM RELATED THERETO; APPROVING THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 1-6 (PRIOR LAKE LOFTS) WITHIN MUNICIPAL DEVELOPMENT DISTRICT NO. 1 AND APPROVING THE TAX INCREMENT FINANCING PLAN RELATED THERETO; AND AUTHORIZING AN INTERFUND LOAN Motion By: Braid Second By: Thompson WHEREAS, it has been proposed that the City of Prior Lake, Minnesota (the "City") (1) enlarge Municipal Development District No. 1 (the "Development District"); (2) modify the Development Program for the Development District; (3) establish Tax Increment Financing District No. 1-6 (Prior Lake Lofts) therein (the "TIF District"); (4) approve and adopt the proposed Tax Increment Financing Plan therefor under the provisions of Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "Act"); and (5) authorize an Interfund Loan (hereinafter defined); and WHEREAS, the City Council has investigated the facts and has caused to be prepared a Modified Development Program for the Development District (the "Modified Development Program"), and has caused to be prepared a proposed tax increment financing plan for the TIF District therein (the "TIF Plan"); and WHEREAS, the City has performed all actions required by law to be performed prior to the approval of the establishment of the TIF District, and the adoption of the Modified Development Program and TIF Plan, including, but not limited to, a review of the Modified Development Program and TIF Plan by the Planning Commission and the Prior Lake Economic Development Authority, notification of Scott County and Independent School District No. 719 having taxing jurisdiction over the property to be included in the TIF District, and the holding of a public hearing upon published and mailed notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Prior Lake, Minnesota, as follows. 1. Development District. The City is enlarging the boundaries of the Development District to be coterminous with the municipal boundaries of the City. 2. Modified Development Program. a. The City Council approves the Modified Development Program, and specifically finds that: (i) the land within the Development District would not be available for redevelopment without the financial aid to be sought under this Modified Development Program; (ii) the Modified Development Program will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Development District by private 2 enterprise; and (iii) that the Modified Development Program conforms to the general plan for the development of the City as a whole. b. The Modified Development Program for Municipal Development District No. 1, a copy of which is on file in the office of the City Manager, is adopted. 3. Tax Increment Financing District No. 1-6 (Prior Lake Lofts). There is hereby established in the City within the Development District, Tax Increment Financing District No. 1-6 (Prior Lake Lofts), a redevelopment tax increment financing district, the initial boundaries of which are fixed and determined as described in the TIF Plan. 4. Tax Increment Financing Plan. The TIF Plan is adopted as the tax increment financing plan for the TIF District, and the City Council makes the following findings: a. The TIF District is a redevelopment district as defined in Minnesota Statutes, Section 469.174, Subd. 10, the specific basis for such determination is set forth in Section 3.03.3 of the TIF Plan. b. 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. The reasons for such determination are set forth in Section 3.02.5 of the TIF Plan. c. In the opinion of the City Council, 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 TIF District permitted by the TIF Plan. The reasons supporting this finding are set forth in Section 3.02.5 and Exhibit I of the TIF Plan: d. The TIF Plan for the TIF District conforms to the general plan for development or redevelopment of the City as a whole. The reasons for supporting this finding are set forth in Section 3.02.2 of the TIF Plan. e. The TIF Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the Development District by private enterprise. The reasons supporting this finding are set forth in Section 3.02.5 of the TIF Plan. 5. Tax Increment Computation. The City elects the tax increment computation set forth in Minnesota Statutes, Section 469.177, Subd. 3(b). 6. Public Purpose. The adoption of the TIF Plan for the TIF District, located within the Development District, conforms 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 employment opportunities, to help prevent the emergence of blight, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. 7. Certification. The Auditor of Scott County is requested to certify the original net tax capacity of the TIF District as described in TIF Plan, and to certify in each year 3 thereafter the amount by which the original net tax capacity has increased or decreased in accordance with the Act; and the City Manager 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 TIF District for which building permits have been issued during the 18 months immediately preceding the adoption of this Resolution. 8. Filing. The City Manager is further authorized and directed to file a copy of the Modified Development Program and TIF Plan for the TIF District with the Commissioner of Revenue and the Office of the State Auditor. 9. Administration. The administration of the Development District is assigned to the City Manager who shall from time to time be granted such powers and duties pursuant to Minnesota Statutes, Sections 469.130 and 469.131 as the City Council may deem appropriate. 10. Interfund Loan. The City has determined that it may pay for certain costs (the "Qualified Costs") identified in the TIF Plan which costs may be financed on a temporary basis from the City's general fund or any other fund from which such advances may be legally made (the "Fund"). Under Minnesota Statutes, Section 469.178, Subd. 7, the City is authorized to advance or loan money from the Fund in order to finance the Qualified Costs. The City intends to reimburse itself for the payment of the Qualified Costs, plus interest thereon, from tax increments derived from the TIF District in accordance with the following terms (which terms are referred to collectively as the "Interfund Loan"): a. The City shall repay to the Fund from which the Qualified Costs are initially paid, the principal amount of $50,000 (or, if less, the amount actually paid from such fund) together with interest at 4.00% per annum (which is not more than the greater of (i) the rate specified under Minnesota Statutes, Section 270C.40, or (ii) the rate specified under Minnesota Statutes, Section 549.09) from the date of the payment. b. Principal and interest on the Interfund Loan ("Payments") shall be paid annually on each December 31 commencing with the date the tax increments from the TIF District are available and not otherwise pledged to and including the earlier of (a) the date the principal and accrued interest of the Interfund Loan is paid in full, or (b) the date of last receipt of tax increment from the TIF District ("Payment Dates") which Payments will be made in the amount and only to the extent of available tax increments. Payments shall be applied first to accrued interest, and then to unpaid principal. c. Payments on the Interfund Loan are payable solely from the tax increment generated in the preceding twelve (12) months with respect to the TIF District and remitted to the City by Scott County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1794, as amended. Payments on this Interfund Loan are subordinate to any outstanding or future bonds, notes or contracts secured in whole or in part with tax increment, and are on parity with any other outstanding or future interfund loans secured in whole or in part with tax increments. d. The principal sum and all accrued interest payable under this Interfund Loan are pre-payable in whole or in part at any time by the City without 4 premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Interfund Loan. e. The Interfund Loan is evidence of an internal borrowing by the City in accordance with Minnesota Statutes, Section 469.178, Subd. 7, and is a limited obligation payable solely from tax increment pledged to the payment hereof under this resolution. The Interfund Loan and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on the Interfund Loan or other costs incident hereto except out of tax increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on the Interfund Loan or other costs incident hereto. The City shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the termination of the TIF District. f. The City may amend the terms of the Interfund Loan at any time by resolution of the City Council, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. Passed and adopted by the Prior Lake City Council this 7th day of November 2022. VOTE Briggs Thompson Braid Burkart Churchill Aye ☒ ☒ ☒ ☐ ☒ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☒ ☐ _____________________________ Jason Wedel, City Manager