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HomeMy WebLinkAbout6B 2 - Tax Increment Financing / NBC Products AGENDA #: PREPARED BY: SUBJECT: DATE: INTRODUCTION: BACKGROUND: DISCUSSION: STAFF AGENDA REPORT 6 B-2 DONALD RYE, PLANNING DIRECTOR PUBLIC HEARING TO CONSIDER APPROVAL OF RESOLUTION 98-XX APPROVING THE MODIFICATION OF TAX INCREMENT FINANCING DISTRICT NO. 2-6 JANUARY 5, 1998 The purpose of this item is to consider modification of Tax Increment Financing District (TIF) #2-6. This district is a part of Development District No.2, which is the Waterfront Passage Business Park. TIF District No. 2-6 is located along the east side of Fish Point Road and has been developed by NBC Products. The property is currently zoned BP (Business Park). The site was initially 2 acres in size and was developed with a 19,200 square foot office/warehouse facility. This proposed modification will expand the District by 1.03 acres to 3.03 acres and will permit the construction of an addition up to 14,000 square feet in size. NBC Products has expressed a desire to have this additional property available for expansion purposes. Development District No. 2 was formed to promote development of certain property, secure additional industrial, commercial, and housing development and redevelopment opportunities, increase property subject to taxation, provide public improvements to development properties, and designate methods for financing of activities in the Development District. The purpose of the proposed modification to TIF District 2-6 is to finance the development activities of this site. This site is designated as C-BO (Commercial - Business Office Park) on the 2010 Comprehensive Plan. The property is also zoned BP. The proposed use of the property is consistent with both the land use plan designation and the zoning. The Planning Commission initially reviewed the creation of the original district, finding the proposed use is consistent with the Comprehensive Plan. The Economic Development Authority also recommended approval of the original Tax Increment District, the original Development Agreement and the proposed modification Financing for the project will consist of bank financing, general 1:\econdev\eda\tif\2-6modcc.doc PAGE 1 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER ALTERNATIVES: obligation bonds, tax increment financing, a City contribution equal to 10% of the tax increment revenues, and developer equity. The use of tax increment financing will employ the "pay-as-you-go" method of reimbursing eligible project costs. Under this program, tax increment receipts generated from the development will be used to reimburse the City and developer for certain qualified costs such as land, site work, sewer, water, roads, sidewalks and landscaping. This "buy down" method will occur over the life of the District, or until all agreed upon costs have been reimbursed. The intent of this method is to apply all of the revenues from the "pay-as-you-go" tax increment financing to reduce the project cost. The attached narrative, prepared by Advance Resources, explains the proposal in greater detail. A development agreement will be brought before the Council at a later date. 1. Adopt Resolution #98-XX, approving the modification of TIF District No. 2-6 2. Further discuss this issue and direct the staff to provide additional information to the City Council. 3. Deny the tax increment financing proposal. RECOMMENDATION: Adopt Alternative #1. ACTION REQUIRED: REPORT ATTACHMENTS: I :\econdev\eda\tif\2-6modcc,doc A motion and second to adopt the proposed resolution. 1. Resolution #98-XX 2. Tax Increment Fi ncing District No. 2-6 Report ( J' . <~, i Reviewed Bt/k l30Yles, City Manager PAGE 2 RESOLUTION 98-XX A RESOLUTION OF Uili CITY COUNCIL OF THE CITY OF PRIOR LAKE APPROVING A MODIFICATION OF TAX INCREMENT FINANCING DISTRICT NO. 2-6 AND HIE USE OF TAX INCREMENT FINANCING MOTION BY: SECONDED BY: WHEREAS: the City Council of the City of Prior Lake, Minnesota (the "City"), has previously approved Development District No.2 (the "Development District") and in connection therewith adopted a development program; and WHEREAS: it is desirable and in the public interest that the City undertake and carry out a tax increment finance plan for Tax Increment Financing District No. 2-6pursuant to Chapter 469 of Minnesota Statutes, encompassing the area which is more particularly described on Exhibit A attached hereto and made a part hereof, (which area is herein called the "District"); and WHEREAS: the City Council has reviewed "Tax Increment Financing District No. 2-6, dated January 5, 1998 (the "Plan Booklet"), which sets forth a modified tax increment financing plan for the District; and WHEREAS: the Plan Booklet sets forth the City's estimate of the fiscal and economic impact of the District on the tax capacities of all taxing jurisdictions in which the District is located; and WHEREAS: the Board of Commissioners of Scott County, Minnesota, has been notified of the public hearing for the review of the Plan Booklet; and WHEREAS: the School Board ofIndependent School District No. 719 has been notified of the public hearing for the review of the Plan Booklet; and WHEREAS: the City has received and considered the comments of the Board of Commissioners of Scott County and the School Board of Independent School District No. 719 respecting the contents of the Plan Booklet; and WHEREAS: the City on January 5,1998, after having published a notice of public hearing in the official newspaper of the City, conducted a public hearing on the Plan Booklet and received public comments on the same. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Prior Lake, Minnesota, as follows: 1. The City finds and determines there is a need for the activities of Development District No. 2 to be financed in part by the tax increments from the District. 1:\econdev\eda\tit\2-6ccres.doc Page 1 16200 Eagle Creek Ave. S.E.. Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER 2. The City finds and determines the activities to be financed by the tax increments from the District will carry out the objectives of Development District No.2 by encouraging industrial develv}J...ent, providing job opportunities and enhancing the tax base. 3. The City finds and determines the provision for job opportunities and 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 City finds and determines the modified tax increment financing plan as set forth in the Plan Booklet having been duly reviewed and considered is hereby approved and adopted, and the area described in Exhibit A hereto is hereby designated as an Economic Development District pursuant to Minnesota Statutes, Sections 469.174, Subd. 12. 5. The City finds and determines the District is an Economic Development District because it will result in increased employment in the City, and it will result in preservation and enhancement of the tax base of the City. 6. The City finds and determines 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 and therefore the use of tax increment financing is deemed necessary. 7. The City finds and determines the modified tax increment financing plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of the District by private enk!}J!~se. 8. The City finds and determines the modified tax increment financing plan set forth in the Plan Booklet conforms to the general plan for the development of the City as a whole. 9. The reasons and supporting facts and findings as set forth on pages 3 and 4 of the Plan Booklet are by this reference confirmed, approved and adopted. 10 The City has calculated tax increment revenues generated in District 2-6 Modification pursuant to Minnesota Statutes, Chapter 469.177, Subdivision 3, as amended. 11 Pursuant to the 1996 Omnibus Tax Bill, Article 5, Section 6, the City requests an exemption from a LGAlHACA penalty because a contribution of unrestricted funds in excess of 10% of the tax increment to be generated will be made in support of the project. 12 The City Clerk shall request the auditor of Scott County to certify the original tax capacity and original local tax rate of t~e District approved by this resolution. 13 The City Clerk is hereby directed to file a copy ofthis resolution with a copy of the Plan Booklet to the Minnesota Department of Revenue. 14 The City hereby states its intention to use all of the captured tax capacity for purposes of tax increment financing as per the conditions set forth in the Plan Booklet. Passed and adopted this 5th day of January, 1998. 1: \econdev\eda\tif\2-6ccres.doc Page 2 Mader Kedrowski Peterson Schenck Vacant I: \econdev\eda\tif\2-6ccres.doc YES Mader Kedrowski Peterson Schenck Vacant Frank Boyles City Manager City of Prior Lake NO Page 3 1- DYANCE Resources for Development, 'nc. Business Finance and Economic Development Specialists TAX INCREMENT FINANCING DI",..I.\lCT NO. 2-6 MODIJi .CATION PRIOR ~, MINNESOTA ESTABLISnJW: SE.r ... 6uIBER. 19, 1995 MODJ.~ J.J.!dJ: JANUARY 5, 1998 TAX INCREMENT FINANCING DISTRICT NO. 2-6 MODIFICATION PRIOR LAKE, MINNESOTA ESTABLISHED: SEPTEMBER 19, 1995, MODIFIED: JANUARY 5, 1998 PREPARED BY ADVANCE RESOURCES FOR DEVELOPMENT, INC. MANKATO, MINNESOTA TABLE OF CONTENTS Page INTRODUCTION ................................................. LOCATION................................................ . DEFINITIONS ............................................... PURPOSE OF TAX INCREMENT FINANCING PLAN. . . . . . . . . ... . . . . . . . SUMMARy................................................ . 1 1 1 1 1 TAX INCREMENT FINANCING PLAN................................. RELATIONSHIP OF DISTRICT TO DEVELOPMENT PLAN .............. PROPERTY CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NARRATIVE BOUNDARY DESCRIPTION OF THE DISTRICT ............ LIST OF PARCELS ........................................... FINDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLAN OBJECTIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DEVELOPMENT PROGRAM .......................... . . . . . . . . . DISTRICT DEVELOPMENT ACTIVITIES ............................ CONFORMANCE WITH PLAN FOR THE CITY ....................... PROCEDURE FOR MODIFYING THE DISTRICT PLAN . . . . . . . . . . . . . . . . . RELOCATION POLICY PLAN ................................... PROPERTY ACQUISITION AND DISPOSITION PLAN ................. METHOD OF FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NOTIFICATION OF PRIOR PLANNED IMPROVEMENTS ............... FINANCIAL PLAN ............................................ 2 2 2 2 3 3 4 5 5 5 5 6 6 6 6 7 Follows Page MAP TAX INCREMENT FINANCING DISTRICT 2-6 1 NOTICES, RESOLUTIONS AND CERTIFICATIONS ...................... 12 1. NOTICE OF A PUBLIC HEARING 2. TRANSMITTAL TO INDEPENDENT SCHOOL DISTRICT NO. 719 3. TRANSMITTAL TO SCOTT BOARD OF COMMISSIONERS 4. RESOLUTION OF THE CITY COUNCIL APPROVING AND ADOPTING TAX INCREMENT FINANCING DISTRICT NO. 2-6 MODIFICATION 5. CERTIFICATION OF ORIGINAL TAX CAPACITY AND ORIGINAL LOCAL TAX RATE FOR TAX INCREMENT FINANCING DISTRICT NO. 2-6 INTRODUCTION LOCATION Tax Increment Financing District No. 2-6 is located in the Waterfront Passage Business Park south of County Road 21 on the east side of Prior Lake. The map following page 1 shows the location of District No. 2-6. DEFINITIONS For the purpose of clarity, the following terms defined in this report shall have the meanings given them. "Project" means development district as defined in Minnesota Statutes, Section 469.125, Subd. 9. "Development District" means a specific area within the corporate limits of a municipality which has been so designated and separately numbered by the governing body. "Development District" also means Development District No.2. "Tax Increment Financing District No. 2-6", "Tax Increment Financing District" or "District" means a contiguous or noncontiguous geographic area within a project delineated in the tax increment financing plan, as provided by Minnesota Statutes, Section 469.175, Subd. 1, for the purpose of financing redevelopment, mined underground space development, housing, or economic development in municipalities through the use of tax increment generated from the captured net tax capacity in the tax increment financing district. "Economic Development District" means a type of tax increment financing district which consists of any project, or portions of a project, not meeting the requirements found in the definition of redevelopment district, renewal and renovation district, soils condition district, mined underground space development district, or housing district, but which the authority finds to be in the public interest because: 1. It will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality; or 2. It will result in increased employment in the state; or 3. It will result in preservation and enhancement of the tax base of the state. PURPOSE OF TAX INCREMENT FINANCING PLAN ...... District No. 2-6 is being established pursuant to Minnesota Statutes, Chapter 469, in order to give the City Council the authority to use Tax Increment Financing as a funding source. Under Chapter 469, a tax increment district has to be established as a housing district, a redevelopment district, a mined underground space district, a renewal and renovation district, a soils condition district or an economic development district. Since this area qualifies as an economic development district, pursuant to Minnesota Statutes, Section 469.174, Subd. 12, it will have a duration of not greater than nine years from the date of receipt of the first tax increment or eleven years from the approval of the tax increment financing plan, whichever is less. r' I , i SUMMARY The formation of District No. 2-6 improves the quality of life in the community by financing eligible Project costs which will result in the creation of job opportunities and increase of the tax base. r' I WATERFRONT PASSAGE BUSINESS PARK PRIOR LAKE, MINNESOTA TIF 2-1 MODIFIED TIF 2-6 MODIFIED n~~~~~~~~~~~~ " TIF 2-9 ESTABLISHED 0 ... ... .... ... ..... ..... ..... ... ..... " ... ........... ............ ............... ................ ............. ................ .... '-, '''''''' " ........ ........ .... ..... ...... .... .... .... .... .... .... ..... ... ..... .... ..... '. .... ..... .... ..... ... ..... . I ouTL.Q I ,JB ..---./ / ,.......:..0 ",/ / , ...(.,~:...... .... .,., .~ -..:....... '", ~.~~ . ............ >. . . . . ... - ~ ~" /e- .r I " .0 ..... \ /. \ Jrl. ,)T) o . , . it .. . T to. I / I .' I I I - , o"}... 11' ,1 01 ! I I I i'O' · TAX INCREMENT FINANCING PLAN RELATIONSHIP OF TAX INCREMENT DISTRICT TO DEVELOPMENT DISTRICT Development District No.2 was formed in order to promote development of certain property, secure additional industrial, commercial and housing development and redevelopment opportunities, increase property subject to taxation, provide public improvements to development properties, and designate methods for the financing of activities in the Development District. Development District law authorizes the use of tax increment funds to pay for these Project activities and improvements. When using tax increment funds, it is necessary to establish a tax increment financing district according to Minnesota Statutes, Sections 469.174 to 469.179, inclusive. Approval of this plan results in the modification of Tax Increment Financing District No. 2-6, the purpose of which is to finance the development activities authorized by the creation of Development District No.2. PROPERTY CONDITIONS The District consists of an approximate 3.03 acre parcel which was incorporated as part of the Waterfront Passage Business Park. The property is currently occupied by an approximated 19,200SF production/warehouse facility which will be expanded as a result of this modification. The site is appropriate- ly zoned for its intended use. Financing for the project will consist of bank financing, general obligation bond proceeds, tax increment financing, a City contribution of "unrestricted funds" equal to 10% of the tax increment revenues and developer equity. The use of tax increment financing will employ the "pay-as-you-go" method of reimbursing eligible project costs. Under this program tax increment receipts generated from the development will be used to reimburse the City and developer for certain qualified costs such as land, site work, sewer, water, roads, sidewalks and landscaping. This "buy down" will occur over the life of the District or until all agreed upon costs have been reimbursed. The intent of this method is to apply all the revenues from the "pay-as- you-go" tax increment financing to reduce the project cost. NARRATIVE BOUNDARY DESCRIPTION OF DISTRICT NO. 2-6 That part of Lot 1, Block 2, WATERFRONT PASSAGE ADDITION, according to the recorded plat thereof, Scott County, Minnesota lying northwesterly of the following described line: That part of Lot 1, Block 2, WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as follows: Commencing at the most easterly corner of said Lot 1; thence North 62 degrees 51 minutes 58 seconds West along the northerly line of said Lot 1, a distance of 131.44 feet; thence northwesterly continuing along said northerly line a distance of 79.85 feet on a tangential curve concave to the northeast, having a radius of 530.00 feet and a central angle of 08 degrees 37 minutes 54 seconds; thence North 54 degrees 14 minutes 04 seconds West continuing along said northerly line and tangent to said curve a distance of 593.15 feet;thence South 61 degrees 45 minutes 56 seconds West a distance of 106.00 feet; thence South 33 degrees 45 minutes 56 seconds West a distance of 33.69 feet to the point of beginning of the land to be described; thence continuing South 33 degrees 45 minutes 56 seconds West a distance of 36.31 feet; thence South 14 degrees 15 minutes 56 seconds West a distance of 75.00 feet; thence South 48 degrees 45 minutes 56 seconds West a distance of 87.00 feet; thence South 75 degrees 45 minutes 56 seconds West a distance of 185.99 feet to the intersection with the west line of said Lot 1; thence northwesterly along said west line, to the intersection with a line bearing North 89 degrees 25 minutes 19 seconds West from the point of beginning; thence South 89 degrees 25 minutes 19 seconds East a distance of 361.36 feet to the point of beginning. 2 LIST OF PARCELS INCLUDED IN DISTRICT NO. 2-6 The following parcel is included in District No. 2-6: #25-296-002-1 FINDINGS Minnesota Statues, Section 469.175, Subd. 4, requires that prior to municipality approval of a tax increment financing plan that the statutory findings of Minnesota Statutes, Section 469.175, Subd. 3, must be made and the reasons for those findings must be set forth in writing along with supporting facts for each determination. The tax increment financing plan for District No. 2-6 finds the following: 1. FINDING. That the proposed tax increment financing district is an economic development district. SUPPORTING FACTS. Minnesota Statutes, Chapter 469 provides for six types of districts -- a redevelopment district, renewal and renovation district, soils condition district, a mined underground space district, a housing district, and an economic development district - each serving a well-defined need and each having different qualifying standards. Tax Increment Financing District No. 2-6 is intended to be an "Economic Development District". Minnesota Statutes, Section 469.174, Subdivi- sion 12, defines "Economic Development District". This definition is also included on page 1 of this plan. The proposed District was previously qualified as an "Economic Development District" pursuant to the above cited statute because Project activities will increase employment and result in preserva- tion and enhancement of the tax base of the municipality. Upon expansion of the property within the District, the existing facility will be expanded by NBC Products, Inc. The expansion and inclusion of additional property in the District will increase the community's tax base and add 15 new jobs to the area. 2. FINDING That the proposed development or redevelopment, in the opinion of the municipality, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and therefore, the use of tax increment financing is deemed necessary. SUPPORTING FACTS. In order for the company to develop and occupy the site, project financing must be obtained. The City of Prior Lake in conjunction with a bank and the developer has prepared a pUblic/private financial package which includes owner equity, proceeds from previously issued general obligation bonds, tax increment financing, a contribution of unrestricted funds from the City equal to 10% of the tax increment revenues and a bank fixed asset loan. The need for this type of project financing was determined by the City with the assistance of the bank and in the opinion of City officials this development would not occur in the City of Prior Lake without the public/private effort, including the financial assistance offered. 3. FINDING. That the Market Value increase estimated for the proposed Project is greater than what could reasonably be expected to occur if tax increment financing was not available. SUPPORTING FACTS. The modified Project is estimated to result in a market value increase of $1,020,000. The present value of the projected net tax increment revenues is estimated at $144,502; thus, the net market value increase less the present value tax increment estimate is $875,498. Since the Project would not be developed without the availability of tax increment financing there is a positive impact on the local tax base despite the use of tax increment financing. 4. FINDING. That the tax increment financing plan conforms to the general plan for the develop- ment or redevelopment of the municipality as a whole. 3 SUPPORTING FACTS. The tax increment financing plan conforms to the general plan of the City of Prior Lake for the foltowing reasons: A. The tax increment financing area is designated on the zoning map for industrial develop- ment. Plan activities and subsequent development are intended to encourage and result in industrial development for this area. B. The general plan for the community supports the creation of job opportunities; particularly, increased opportunities for low and moderate income individuals. 5. FINDING. That the tax increment financing plan will afford maximum opportunity, consistent with the sound needs of the municipality as a whole, for the development or redevelopment of the project by private enterprise. SUPPORTING FACTS. The City of Prior Lake, in approving Development District No.2, has prepared a blueprint for the development and redevelopment of the community. The Development District plan encourages cooperation with private enterprise. Information contained in the Develop- ment District report along with other city plans and reports has been used in the preparation of the District No. 2-6 plan. Based upon the objective of cooperation and upon the guidance provided by city plans and ordinances, the city has determined Project costs which will be paid for by tax increment revenues. As the Financial Plan contained on pages 6 through 11 of this report indicates, the city intends to concentrate the use of tax increment revenue on those improvements which would not reasonably be expected to occur solely through private action. Private enterprise will be responsible for the vast majority of the expenses and activities normally associated with land development. STATEMENT OF OBJECTIVES FOR DEVELOPMENT DISTRICT NO.2 The City Council of Prior Lake, Minnesota, determines that it is necessary, desirable, and in the public interest to establish/modify, designate, develop, and administer a development district in the city pursuant to the provisions of Minnesota Statutes, Sections 469.124 to 469.134, inclusive. The city council further determines that the funding of the necessary activities and improvements in the Development District may be financed through tax increment financing, as well as, other appropriate sources. Prior to involving itself in financing Project activities or a development, the city council shall determine financial feasibility of the Project or development. Any public or private activity when funded by the city shall demonstrate the need for such financing and how said financing is going to be repaid if it is a loan. In the case of a grant or tax increment financing, the benefits to the community, such as housing or job opportunities, increased tax base or removal of blighting conditions, shall be demonstrated. The city council seeks to achieve the following objectives for Development District No.2: 1. Acquire land which is vacant or underused, including public or semi-public properties already devoted to a public use which is underutilized. 2. Assist with land assembly for new and expanding business, office and industrial areas. 3. Provide development sites of such size and character so as to assure the development of the Project area. 4. Eliminate or correct physical deterrents to the development of land. 5. Provide adequate streets, utilities and other public improvements and facilities to enhance the area for development. 6. Achieve a high level of design and landscaping quality to enhance the physical environment. 7. Accomplish convenient and adequate parking to serve the needs of the area. 4 8. Create effective buffers, screens and/or transitions between residential and nonresidential uses to minimize the potential blighting effects of divergent land uses. 9. Combine elements of the comprehensive city plan with these Project objectives. 10. Improve the financial base of the city. 11. Provide maximum opportunity, consistent with the needs of the city, for development by private enterprise. 12. Provide increased employment opportunities and as much as possible seek businesses which would employ the unemployed and underemployed. 13. Promote redevelopment in order to prevent or eliminate blight and maintain the viability of commercial and residential areas. DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO.2, Minnesota Statutes, Section 469.175, Subd. 1 (2) requires: HA statement as to the development program for the project, including the property within the project, if any, which the authority intends to acquire". The Development Program for Development District No.2 is delineated in a report entitled "Development District No.2" adopted May, 1992 and modification August 1, 1994, copies of which are on file in the city clerk's office. By this reference, said development program is incorporated as part of this tax increment financing plan. TAX INCREMENT DISTRICT DEVELOPMENT ACTIVITIES Development activities to be financed in whole or in part as a result of the implementation of this Plan include: 1. Reimbursement, to the city and developers, via a pay-as-you-go tax increment agreement for property acquisition and site preparation costs. 2. Expansion and development by NBC Products, Inc. of an approximate 14,000 sq. ft. addition to an existing production/warehouse facility. All of the proposed activities and improvements are within the boundaries of Development District No. 2 and District No. 2-6. The expansion will be initiated in 1998 and completed prior to December 31, 1998. The above activities are, at the time of preparation of this report, the only activities proposed for the Development District as a result of the formation of District No. 2-6. No contract has been entered into at the time of preparation of this Plan pursuant to Minnesota Statutes, Section 469.175, Subd. 1 (3), completion of any of the activities. CONFORMANCE WITH PLAN FOR THE CITY The City Council, by approval of this report, believes that modification and implementation of District No. 2-6 does indeed meet the intent of the plan for the city by maintaining the quality of existing develop- ment, and improving the quality of life through orderly planned improvements. PROCEDURE FOR MAKING MODIFICATIONS IN AN APPROVED TAX INCREMENT DISTRICT PLAN Tax Increment Financing District No. 2-6 may be modified, provided that the modification shall be approved by the City Council under provisions of the Minnesota Tax Increment Financing Act of Minnesota Statutes, Section 469.175, Subd. 4, as follows: 5 "(a) A tax increment financing plan may be modified by an authority, provided that any reduction or enlargement of geographic area of the project or tax increment financing district, increase in amount of bonded indebtedness to be incurred, including a determination to capitalize interest on the debt if that determination was not a part of the original plan, or to increase or decrease the amount of interest on the debt to be capitalized, increase in the portion of the captured assessed value to be retained by the authority, increase in total estimated tax increment expenditures or designation of additional property to be acquired by the authority shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original plan; provided that if an authority changes the type of district from housing, redevelopment or economic development to another type of district, this change shall not be considered a modification, but shall require the authority to follow the procedure set forth in Sections 469.174 to 469.179 for adoption of a new plan, including certification of the assessed valuation of the district by the county auditor. If a redevelopment district or a renewal and renovation district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of section 469.174, subdivision 10, paragraph (a), clauses (1) and (2), or subdivision 10a must be documented. The require- ments of this paragraph do not apply if (1) the only modification is elimination of parcels from the project or district and (2)(A) the current tax capacity of the parcels eliminated from the district equals or exceeds the tax capacity of those parcels in the district's original tax capacity or (B) the authority agrees that, notwithstanding section 469.177, subdivision 1, the original tax capacity will be reduced by no more than the current tax capacity of the parcels eliminated from the district. The authority must notify the county auditor of any modification that reduces or enlarges the geographic area of a district or a project area. (b) The geographic area of a tax increment financing district may be reduced, but shall not be enlarged after five years following the date of certification of the original assessed value by the county auditor or five years from August 1, 1979." RELOCATION POLICY The Tax Increment Financing Plan does not require any relocation at this time. The District does not contain any residential, commercial, or industrial uses that will require relocation or movement on individual sites. If in the future the District is expanded or modified to include additional area or relocation activities, the City Council shall adopt rules and regulations that are in compliance with the Uniform Relocation Act and any persons affected shall be treated according to those laws, rules and regulations. PROPERTY ACQUISITION AND DISPOSITION The Prior Lake Economic Development Authority will transfer property to the developers to enable their expansion of a production/warehouse facility. The property proposed for disposition includes the property described under the "Narrative Boundary Description of District No. 2-6" on page 2 of this Plan. METHOD OF FINANCE The City Council of the City of Prior Lake, Minnesota, elects to use Tax Increment Financing pursuant to Minnesota Statutes, Chapter 469, to finance all or part of the costs of the Project. By electing these methods of financing, the City Council is not precluding the use of other methods provided by State law. NOTIFICATION OF PRIOR PLANNED IMPROVEMENTS Minnesota Statutes, Section 469.177, Subd. 4 requires that the request for certification of original tax capacity be accompanied by a listing of properties within the tax increment district for which building permits have been issued in the 18 months preceding approval of the tax increment financing plan. The original tax capacity of District No. 2-6 was certified at 87. The expanded area of District No. 2-6 has had no building permits issued during this period, accordingly, the most recent tax capacity for the parcel to be added to the District is be 64. This tax capacity will be added to the existing base tax capacity, thus, the combined tax capacity of the District will be 151. 6 FINANCIAL PLAN ESTIMATE OF PUBUC COST The following is an estimate of public costs including cost of District indebtedness, source of revenue, most recent tax capacity, and estimate of captured tax capacity. 1. Activities. Activities within the Project area consist of property acquisition and site improve- ments. Costs which may be funded in Development District No. 2 as a result of the formation and modification of District No. 2-6 include: Original Budget 1 . Activities A. Property acquisition B. Administration C. Interest Expense D. Contingency SUBTOTAL $154,125 29,500 89,000 24.500 $297,125 2. Source of Funds. A. Tax Increment Revenues B. City Contribution of Unrestricted Funds SUBTOTAL $270,000 27.125 $297,125 Modified Budget 3. Activities. Activities relating to modification of the District include expansion of a produc- tion/Warehouse facility. The following cost estimates relate to the tax increment modifica- tion. A. Property Acquisition B. Administration C. Interest Expense SUBTOTAL $ 89,750 10,000 42.069 $141,819 4. Source of Funds A. Tax Increment Revenues B. City Contribution of Unrestricted Funds C. Developer Payments SUBTOTAL $98,844 9,884 33.091 $141,819 Cumulative Budget 5. Activities A. Original B. Modification TOTAL $297,125 141.819 $438,944 6. Source of Funds A. TIF Revenues B. City contributions C. Developer Payments TOTAL $368,844 37,009 33.091 $438,944 SOURCES OF REVENUE The proposed sources of revenue to be used to finance public costs associated with the develop- ment projects in the District are developer payments and tax increment generated as a result of the taxation 7 of the land and improvements in the District. Tax increment financing refers to a funding technique that utilizes increases in tax capacity and the property taxes attributed to new development to finance, or assist in the financing of public development costs. The initial improvements resulting from development of the property by private business within the District are anticipated to generate annual tax increment of approxi- mately $32,800 in 1997 through the year 1999. As a result of the proposed expansion the annual tax increment should increase to approximately $45,074 net of fiscal disparities contribution in 2000 through 2005. The District's tax increment will be generated from the construction of an approximate 19,200 sq ft. production/warehouse facility and an approximate 14,000 SF expansion. The city may issue tax increment bonds or use the annual receipt of tax increment to reimburse eligible Project costs. FINANCING ASSUMPTIONS Tax increment will be used to finance activities in the Project area. The following information and assumptions were used to calculate financing costs for the activities in the Project area. 1. Table 1 on page 8 shows the calculations which were used to determine the amount of property taxes and tax increment resulting from the proposed development in District No. 2-6. 2. Expansion activities are scheduled to begin in March, 1998, and shall be completed by December 31, 1998. 3. Financing of the expansion Project activities will be undertaken in 1997 and 1998. 4. The first tax increment in the estimated amount of $32,800 collected from the District will be in 1997 payable from the 1996 tax levy. As a result of the expansion, tax increment revenues should increase to $45,074 in year 2000. 5. The 1997 local tax rate of 135.784% and 1997 tax values were used to calculate the estimate of increment in this plan. 6. Annual tax increments of $32,800 in 1997 through 1999 and $45,074 in 2000 through 2005 generated as a result of formation and modification of this District will be one source of funds used to finance the Project area activities. A portion of developer financed costs for property acquisition will be repaid through increment revenues pursuant to terms and conditions delineated in a development agreement between the developer and the City. 7. Increment revenues will be used to finance only capital and administrative costs resulting from the Project activities. All tax increment generated by the formation of this District will be used to finance the activities of the Plan. 8. The city will use tax increments of approximately $32,800 in 1997 through 1999 and $45,074 in 2000 through 2005. Additional increment revenues as a result of future expansions may be available for repayment to the City or developer to service Project costs. "Project Costs. means all expendi- tures of the city or reimbursement for the purchase of land or amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the District, including interest thereon. Project costs also include all administrative expenses as defined in Minnesota Statutes, Section 469.174, Subdivision 14. In order to estimate the amount of the increment assistance the City and developer will receive as a result of the approval and modification of District No. 2-6 the estimated present value of the net tax increment has been calculated. The first increment would be available to the city in 1997 and would continue through 2005. 8 TABLE 1: TAX INCREMENT CALCULATIONS Local Tax Rate =135.784% (Prior Lake, Payable 1998) ESTIMATED COMPLETION MARKET VALUE OF EXPANDED PROJECT: $1,020,000 CLASSIFICATION: INDUSTRIAL (assume completion prior to 12-31-98) (1) (2) (3) (4) (5) (6) (7) (8) Year Project Original Fiscal Captured Estimated Developer Estimated Tax Tax Tax Disparities Tax Annual Reimburse- Net Annual Pavable Caoacitv Caoacitv 32.21% Cacacitv Increment ment Increment 1995 87 (87) 0 0 0 0 0 1996 87 (87) 0 0 0 0 0 1997 21,387 (87) 0 21 ,300 32,800 (19,000) 13,800 1998 21,451 (151) 0 21,300 32,800 (19,000) 13,800 1999 21,451 (151) 0 21,300 32,800 (19,000) 13,800 2000 38,999 (151) (5,652) 33,196 45,074 (19,000) 26,074 2001 38,999 (151) (5,652) 33,196 45,074 (19,000) 26,074 2002 38,999 (151) (5,652) 33,196 45,074 (7,500) 37,574 2003 38,999 (151) (5,652) 33,196 45,074 (7,500) 37,574 2004 38,999 (151) (5,652) 33,196 45,074 (7,500) 37,574 2005 38,999 (151 ) (5,652) 33,196 45,074 (7,500) 37,574 TOTAL $368,844 ($125,000) $243,844 PRESENT VALUE DISCOUNTED AT 7% $228,366 ($ 83,865) $144,502 LIMITATION ON USE OF TAX INCREMENT; GENERAL RULE Pursuant to Minnesota Statutes, Section 469.176, Subd. 4, nAil revenues derived from tax increment shall be used in accordance with the tax increment financing plan. The revenues shall be used solely for the following purposes: (1) to pay the principal and interest on bonds issued to finance a project; (2) by a rural development financing authority for the purposes stated in Minnesota Statutes, Section 469.142, by a port authority or municipality exercising the powers of a port authority to finance or otherwise pay the cost of redevelopment pursuant to Minnesota Statutes, Sections 469.048 to 469.068, by an economic development authority to finance or otherwise pay the cost of redevelopment pursuant to Minnesota Statutes, Sections 469.090 to 469.108, by a housing and redevelopment authority or economic development authority to finance or otherwise pay public redevelopment costs pursuant to Minnesota Statutes, Sections 469.001 to 469.047, by a municipality or economic development authority to finance or otherwise pay the capital and administra- tion costs of a development district pursuant to Minnesota Statutes, Sections 469.124 to 469.134, by a municipality or authority to finance or otherwise pay the costs of developing and implementing a develop- ment action response plan, by a municipality or redevelopment agency to finance or otherwise pay premiums for insurance or other security guaranteeing the payment when due of principal of and interest on the bonds pursuant to Minnesota Statutes, Sections 462C, Sections 469.152 to 469.165, or both, or to accumulate and maintain a reserve securing the payment when due of the principal of and interest on the bonds pursuant to Chapters 462C, Sections 469.152 to 469.165, or both, which revenues in the reserve shall not exceed, subsequent to the fifth anniversary of the date of issue of the first bond issue secured by the reserve, an amount equal to 20 percent of the aggregate principal amount of the outstanding and nondefeased bonds secured by the reserve. Additionally, there is a limitation of 20% on the amount of tax increment that may be expended outside of the tax increment district and within the Project area. 9 ,.4' AI EXCESS TAX INCREMENTS Pursuant to Minnesota Statutes, Section 469.176, Subd. 2, "(a) In any year in which the tax increment exceeds the amount necessary to pay the costs authorized by the tax increment financing plan, including the amount necessary to cancel any tax levy as provided in Section 475.61, Subd. 3, the authority shall use the excess amount to do any of the following: (1) prepay any outstanding bonds, (2) discharge the pledge of tax increment therefore, (3) pay into an escrow account dedicated to the payment of such bonds, or (4) return the excess amount to the county auditor who shall distribute the excess amount to the municipality, county and school district in which the tax increment financing district is located in direct proportion to their respective tax capacity tax extension rates. The county auditor must report to the commissioner of education the amount of any excess tax increment distributed to a school district within 30 days of the distribution. (b) The amounts distributed to a city or county must be deducted from the levy limits of the governmental unit for the following year. In calculating the levy limit base for later years, the amount deducted must be treated as a local government aid payment. DURATION OF TAX INCREMENT FINANCING DISTRICTS The city estimates that the District shall endure for as long as it is permitted to by law. If no new development activities were to occur, the city estimates that tax increments would be sufficient to pay all indebtedness initially undertaken and to pay all initial and administration costs of the District by 2005. LIMITATION OF ADMINISTRATIVE EXPENSES Pursuant to Minnesota Statutes, Section 469.176, Subd. 3, .(a)....notax increment shall be used to pay any administrative expenses for a project which exceed ten percent of the total tax increment expenditures authorized by the tax increment financing plan or the total tax increment expenditures for the project, whichever is less." ESTIMATED TOTAL CAPTURED TAX CAPACITY; RETENTION The city estimates that the District's total tax capacity at completion of the expanded activities will be 38,999; the original tax capacity estimate following expansion of the District will be 151, the fiscal disparities contribution will further reduce the captured tax capacity by 5,652; the estimated modified captured tax capacity will be 33,196 in 2000. Pursuant to Minnesota Statutes, Section 469.177, Subd. 2, the authority may retain the full captured tax capacity to pay expenditures noted in the Plan or subsequent Plan modifications. TAX INCREMENT ACCOUNT Pursuant to Minnesota Statutes, Section 469.177, Subd. 5, "the tax increment received with respect to any district shall be segregated by the authority in a special account or accounts on its official books and records or as otherwise established by resolution of the authority to be held by a trustee for the benefit of holders of the bonds." ANNUAL DISCLOSURE AND FINANCIAL REPORTING Minnesota Statutes, Section 469.175, Subd. 5, requires "For all tax increment financing districts, whether created prior or subsequent to August 1, 1979, on or before July 1 of each year, the authority shall submit to the county board, the school board, the commissioner of revenue and, if the authority is other than the municipality, the governing body of the municipality a report of the status of the district. The report shall include the following information: the amount and the source of revenue in the account, the amount and purpose of expenditures from the account, the amount of any pledge of revenues, including principal and interest on any outstanding bonded indebtedness, the original tax capacity of the district, the captured tax capacity retained by the authority, the captured tax capacity shared with other taxing districts, the tax increment received, and any additional information necessary to demonstrate compliance with any applicable tax increment financing plan. An annual statement showing the tax increment received and expended in that year, the original tax capacity, captured tax capacity, amount of outstanding bonded indebtedness, and any 10 additional information the authority deems necessary shall be published in a newspaper of general circulation in the municipality." Minnesota Statutes, Section 469.175, Subd. 6, requires: "(a) The state auditor shall develop a uniform system of accounting and financial reporting for tax increment financing districts. The system of accounting and financial reporting shall, as nearly as possible: (1) (2) provide for full disclosure of the sources and uses of public funds in the district; permit comparison and reconciliation with the affected local government's accounts and financial reports; permit auditing of the funds expended on behalf of a district, including a single district that is part of a multidistrict project or that is funded in part of whole through the use of a development account funded with tax increments from other districts or with other public money; (4) be consistent with generally accepted accounting principles. (b) The authority must annually submit to the state auditor, on or before July 1, a financial report in compliance with paragraph (a). Copies of the report must also be provided to the county and school district boards and to the governing body of the municipality, if the authority is not the municipality. To the extent necessary to permit compliance with the requirement of financial reporting, the county and any other appropriate local government unit or private entity must provide the necessary records or information to the authority or the state auditor as provided by the system of accounting and financial reporting developed pursuant to paragraph (a). (c) The annual financial report must also include the following items: (1) the original tax capacity of the district; (2) the captured tax capacity of the district, including the amount of any captured tax capacity shared with other taxing districts; the outstanding principal amount of bonds issued or other loans incurred to finance project costs in the district; for the reporting period and for the duration of the district, the amount budgeted under the tax increment financing plan, and the actual amount expended for, at least, the following categories: (i) acquisition of land and buildings through condemnation or purchase; (ii) site improvements or preparation costs; (iv) installation of public utilities or other public improvements; (iii) administrative costs, including the allocated cost of the authority; for properties sold to developers, the total cost of the property to the authority and the price paid by the developer; the amount of tax exempt obligations, other than those reported under clause (3), that were issued on behalf of private entities for facilities located in the district. (d) The reporting requirements imposed by this subdivision are in lieu of the annual disclosure required by subdivision 5." (5) (6) (3) (3) (4) IMPACT OF THE USE OF TAX INCREMENT OF TAXING JURISDICTIONS Minnesota Statutes, Section 469.175, Subd. 1 (6), requires .statements of the authority's alternate estimates of the impact of tax increment financing on the tax capacity of all taxing jurisdictions in which the tax increment financing district is located in whole or in part. For purposes of one statement, the authority shall assume that the estimated captured tax capacity would be available to the taxing jurisdictions without creation of the district, and for purposes of the second statement, the authority shall assume that none of the estimated captured tax capacity would be available to the taxing jurisdictions without creation of the district;" Table 2 on page 11 depicts the impact of tax increment financing on the tax capacity of the affected taxing jurisdictions assuming (1) none of the increment would be available, and (2) the increment would be available to the tax jurisdictions. 11 ESTIMATE OF FISCAL AND ECONOMIC IMPLICATIONS OF PROPOSED TAX INCREMENT DISTRICf NO. 2-6 PRIOR LAKE, MN Project Description: Approximately 33,OOOSF production/warehouse in WAlERFRONT PASSAGE BUSINESS PARK. The following is an estimate of the fiscal and economic impacl of the proposed project. Type of Tax Increment District: Economic Development Maximum Length of District: 9 years from the date of receipt of the first tax increment or Seplember 19, 2006 Value of Project Upon Completion: $1,020,000 (estimated) Year Estimated School's Loss of County's Loss Property City's Loss of Annual Property Taxes Due to Taxes Due to TIP Property Taxes Tax Increment TIF Due to TIF $32,800 $12,670 $8,761 $6,934 45,074 19,745 13,653 10,805 $382,100 $143,812 $99,444 $78,702 ...... N 1998-1999 2000-2005 TOTAL Assumptions: 1. The 1997 local tax rates of 41.132% (county), 32.552% (City), 59.482% (school district) and 135.784% (total) are used to estimate the increment. 2. The district is intended to cease on December 31,2005. 3. For purposes of preparing this estimate local tax rates remain constant regardless if the district is or is not created. The above information represents an eslimate of tax revenue each jurisdiction could expect to receive if Ihe development occurred without tax increment assistance. However, it has been determined Ihat this project will nol proceed unless it receives its anticipaled funding package part of which is tax increment assistance. NOTICES, RESOLUTIONS, TRANSMITTALS AND CERTIFICATIONS 1. NOTICE OF A PUBUC HEARING - INCLUDING LOCATION MAP 2. TRANSMITTAL TO INDEPENDENT SCHOOL DISTRICT NO. 719 3. TRANSMITTAL TO SCOTT COUNTY BOARD OF COMMISSIONERS 4. RESOLUTION OF THE CITY COUNCIL APPROVING AND ADOPTING TAX INCREMENT FINANCING DISTRICT NO. 2-6 5. CERTIFICATION OF ORIGINAL TAX CAPACITY AND ORIGINAL LOCAL TAX RATE FOR TAX INCRE- MENT FINANCING DISTRICT NO. 2-6 NOTICE OF PUBUC HEARING ON MODIFICATION OF TAX INCREMENT FINANCING DISTRICTS NOS. 2-1 AND 2-6 AND FORMATION OF TAX INCREMENT FINANCING DISTRICT NO. 2-9 TO WHOM IT MAY CONCERN: Notice is hereby given that the City Council of the City of Prior Lake, Minnesota, will meet at Fire Station No.1, at 16n6 Fish Point Road in Prior Lake, Minnesota, at 7:00 p.m. on Monday, January 5,1998, to consider the modification of Tax Increment Financing Districts Nos. 2-1 and 2-6 and formation of Tax Increment Financing District No. 2-9. Such persons as desire to be heard with reference to the above proposal will be heard at this meeting. Tax Increment Financing District No. 2-1 Modification is described as follows: Lot 2, Block 2, WaterFront Passage Addition AND That part of Lot 1, Block 2, WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as follows: Beginning at the southeast corner of Lot 2, Block 2, of said plat; thence North 00 degrees 10 minutes 44 seconds East along the east live of said Lot 2, a distance of 228.00 feet to the northeast corner of said Lot 2; thence South 89 degrees 49 minutes 16 seconds East along the easterly extension of the north line of said Lot 2, a distance of 100.52 feet; thence South 00 degrees 10 minutes 44 seconds West a distance of 228.00 feet to the intersection with the south line of said Lot 1; thence North 89 degrees 49 minutes 16 seconds West along the said south line, a distance of 100.52 feet to the point of beginning. Tax Increment Financing District No. 2-6 Modification is described as follows: That part of Lot 1, Block 2, WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as follows: Commencing at the most easterly corner of said Lot 1; thence North 62 degrees 51 minutes 58 seconds West along the northerly line of said Lot 1, a distance of 131.44 feet; thence northwesterly continuing along said northerly line a distance of 79.85 feet on a tangential curve concave to the northeast, having a radius of 530.00 feet and a central angle of 08 degrees 37 minutes 54 seconds; thence North 54 degrees 14 minutes 04 seconds West continuing along said northerly line and tangent to said curve a distance of 593.15 feet;thence South 61 degrees 45 minutes 56 seconds West a distance of 106.00 feet; thence South 33 degrees 45 minutes 56 seconds West a distance of 33.69 feet to the point of beginning of the land to be described; thence continuing South 33 degrees 45 minutes 56 seconds West a distance of 36.31 feet; thence South 14 degrees 15 minutes 56 seconds West a distance of 75.00 feet; thence South 48 degrees 45 minutes 56 seconds West a distance of 87.00 feet; thence South 75 degrees 45 minutes 56 seconds West a distance of 185.99 feet to the intersection with the west line of said Lot 1; thence northwesterly along said west line, to the intersection with a line bearing North 89 degrees 25 minutes 19 seconds West from the point of beginning; thence South 89 degrees 25 minutes 19 seconds East a distance of 361.36 feet to the point of beginning. Tax Increment Financing District No. 2-9 is described as follows: WATERFRONT PASSAGE ADDITION, Preliminary Plat, Lot 6 and 7, Block 2, comprising approxi- mately 4.5 acres, Prior Lake, Minnesota. Upon completion of a land survey an exact description will be recorded. The map accompanying this notice shows the location of the proposed Districts. A copy of the proposed Tax Increment Plan is on file in the office of the City Clerk and is available for public examination. Written or oral statements will be considered. Dated: This 15th day of December, 1997. BY ORDER OF THE PRIOR LAKE CITY COUNCIL By Frank Boyles City Manager tft PR~O t.o....,.....,.i.~r .,i\~....~.............~ .... '.'. ". - u' ... '. "" ~::~ December 16, 1997 Prior Lake ISD No. 719 P.O. Box 539 Prior Lake, MN 55372 Attn: Dr. Les Sonnabend Dear Dr. Sonnabend: You are invited to a public hearing of the Prior Lake City Council on Monday, January 5, 1998, at 7:00 p.m. at the Prior Lake Fire Station #1, located at 16776 Fish Point Road SE (Southwest of the intersection of C.R. 21 and Fish Point Road). This hearing was originally to be conducted on December 15, 1997, but has been rescheduled. The purpose of this meeting is to discuss the modification of Tax Increment Financing Districts Nos. 2-1 and 2-6 and establishment of Tax Increment Financing District No. 2-9, within Waterfront Passage Business Park. The proposed action will enable the city to provide tax increment financing in the expansion of two existing businesses and development of a production/warehouse facility by a real estate developer. Since the proposed plan involves the taxable base of your jurisdiction, representation at the meeting would be appreciated. Attached to this letter is a copy of the estimated fiscal and economic impacts for each of the Districts. A copy of the proposed tax increment financing plans will be forwarded in the near future. This proposed action Is consistent with the development strategy that was outlined and presented to ISO #719 In March, 1993. At that time the Board authorized the City Council to proceed with the use of tax Increment financing In support of projects within Waterfront Passage Business Park. If you have any questions regarding the above information, please contact me. Sincerely, Donald Rye Planning Director 16200 Eagle Creek Ave. S.L Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER December 16,1998 Scott County Board of Commissioners County Courthouse 428 Holmes St. Shakopee, MN 55379 Attn: Mr. Gary Cunningham County Administrator Dear Mr. Cunningham: You are invited to a public hearing of the Prior Lake City Council on Monday, January 5, 1998, at 7:00 p.m. at the Prior Lake Fire Station #1, located at 16776 Fish Point Road SE (Southwest ofthe intersection of C.R. 21 and Fish Point Road). This hearing was originally to be conducted on December 15, 1997, but has been rescheduled. The purpose of this meeting is to discuss the modification of Tax Increment Financing Districts Nos. 2-1 and 2-6 and establishment of Tax Increment Financing District No. 2-9, within Waterfront Passage Business Park. The proposed action will enable the city to provide tax increment financing in the expansion of two existing businesses and development of a production/Warehouse facility by a real estate developer. Since the proposed plan involves the taxable base of your jurisdiction, representation at the meeting would be appreciated. Attached to this letter is a copy of the estimated fiscal and economic impacts for each of the Districts. A copy of the proposed tax increment financing plans will be forwarded in the near future. This proposed action Is consistent with the development strategy that was outlined and presented to ISO #719 In March, 1993. At that time the Board authorized the City Council to proceed with the use of tax Increment financing In support of projects within Waterfront Passage Business Park. If you have any questions regarding the above information, please contact me. Sincerely, Donald Rye Planning Director 16200 Eagle Creek Ave. S.E., Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AI'> EQUAL OPPORTUNITY EMPLOYER RESOLUTION 97-_ MOTION BY: SECONDED BY: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PRIOR LAKE APPROVING TAX INCREMENT FINANCING DISTRICT NO. 2-6 MODIFICATION AND THE USE OF TAX INCREMENT FINANCING WHEREAS, the City Council of the City of Prior Lake, Minnesota (the "City"), has previously approved Development District No. 2 (the "Development District") and in connection therewith adopted a development program; and WHEREAS, it is desirable and in the public interest that the City undertake and carry out a tax increment finance plan modification for Tax Increment Financing District No. 2-6 pursuant to Chapter 469 of Minnesota Statutes, encompassing the area which is more particularly described on Exhibit A attached hereto and made a part hereof, (which area is herein called the "District"); and WHEREAS, the City Council has reviewed "Tax Increment Financing District No. 2-6 Modification, dated January 5, 1998" (the "Plan Booklet"), which sets forth a tax increment financing plan for the District; and WHEREAS, the Plan Booklet sets forth the City's estimate of the fiscal and economic impact of the District on the tax capacities of all taxing jurisdictions in which the District is located; and WHEREAS, the Board of Commissioners of Scott County, Minnesota, has been notified of the public hearing for the review of the Plan Booklet; and WHEREAS, the School Board of Independent School District No. 719 has been notified of the public hearing for the review of the Plan Booklet; and WHEREAS, the City has received and considered the comments of the Board 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 City on January 5, 1998, after having published a notice of public hearing in the official newspaper of the City, conducted a public hearing on the Plan Booklet and received public comments on the same. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Prior Lake, Minnesota, as follows: 1. The City finds and determines that there is a need for the activities of Development District No.2 to be financed in part by the tax increments from the District. 2. The City finds and determines that the activities to be financed by the tax increments from the District will carry out the objectives of Development District No.2 by encouraging industrial develop- ment, providing job opportunities and enhancing the tax base. 3. The City finds and determines that the provision for job opportunities and 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 City finds and determines that the tax increment financing plan as set forth in the Plan Booklet having been duly reviewed and considered is hereby approved and adopted, and the area described in Exhibit A hereto is hereby designated as an Economic Development District pursuant to Minnesota Statutes, Sections 469.174, Subd. 12. 5. The City finds and determines that the District is an Economic Development District because it will result in increased employment in the City, and that it will result in preservation and enhancement of the tax base of the City. 6. The City finds and determines that the proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foresee- able future and therefore the use of tax increment financing is deemed necessary. 7. The City finds and determines that the tax increment financing plan will afford maximum opportuni- ty, consistent with the sound needs of the City as a whole, for the development of the District by private enterprise. 8. The City finds and determines that the tax increment financing plan set forth in the Plan Booklet conforms to the general plan for the development of the City as a whole. 9. The reasons and supporting 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 City has calculated tax increment revenues generated in District No. 2-6 modification pursuant to Minnesota Statutes, Section 469.177 Subdivision 3, as amended. 11. Pursuant to the 1995 Omnibus Tax Bill, Article 5, Section 6, the City requests an exemption from a LGAlHACA penalty because a contribution of unrestricted funds in excess of 10% of the tax increment to be generated will be made in support of the project. 12. The City Clerk shall request the auditor of Scott County to certify the original tax capacity and original local tax rate of the District approved by this resolution. 13. The City Clerk is hereby directed to file a copy of this resolution with a copy of the Plan Booklet to the Minnesota Department of Revenue. 14. The City hereby states its intention to use all of the captured tax capacity for purposes of tax increment financing as per the conditions set forth in the Plan Booklet. Passed and adopted this 5th day of January, 1998. YES NO Mader Peterson Kedrowski Schenck Mader Peterson Kedrowski Schenck Frank Boyles City Manager City of Prior Lake (Seal) EXHIBIT A TO CITY COUNCIL RESOLUTION APPROVING TAX INCREMENT FINANCING DISTRICT NO. 2-6 MODIFICATION Tax Increment Financing District No. 2-6 includes the following property: That part of Lot 1, Block 2, WATERFRONT PASSAGE ADDITION, according to the recorded plat thereof, Scott County, Minnesota lying northwesterly of the following described line: That part of Lot 1, Block 2, WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as follows: Commencing at the most easterly corner of said Lot 1; thence North 62 degrees 51 minutes 58 seconds West along the northerly line of said Lot 1, a distance of 131.44 feet; thence northwesterly continuing along said northerly line a distance of 79.85 feet on a tangential curve concave to the northeast, having a radius of 530.00 feet and a central angle of 08 degrees 37 minutes 54 seconds; thence North 54 degrees 14 minutes 04 seconds West continuing along said northerly line and tangent to said curve a distance of 593.15 feet;thence South 61 degrees 45 minutes 56 seconds West a distance of 106.00 feet; thence South 33 degrees 45 minutes 56 seconds West a distance of 33.69 feet to the point of beginning of the land to be described; thence continuing South 33 degrees 45 minutes 56 seconds West a distance of 36.31 feet; thence South 14 degrees 15 minutes 56 seconds West a distance of 75.00 feet; thence South 48 degrees 45 minutes 56 seconds West a distance of 87.00 feet; thence South 75 degrees 45 minutes 56 seconds West a distance of 185.99 feet to the intersection with the west line of said Lot 1; thence northwesterly along said west line, to the intersection with a line bearing North 89 degrees 25 minutes 19 seconds West from the point of beginning; thence South 89 degrees 25 minutes 19 seconds East a distance of 361.36 feet to the point of beginning. STATE OF MINNESOTA ) CERTIFICATION AS TO ORIGINAL NET TAX CAPACITY AND ORIGINAL ) LOCAL TAX RATE WITHIN TAX INCREMENT FINANCING DISTRICT ) NO. 2-6 MODIFICATION IN THE CITY OF PRIOR LAKE, MINNESOTA COUNTY OF SCOTT I, the undersigned, being the duly qualified and acting County Auditor of Scott County, Minnesota, do hereby certify to the City of Prior Lake in said County, pursuant to the provisions of Minnesota Statutes, Section 469.177, Subd. 1, that the original net tax capacity of all taxable property within the tax increment district designated as Tax Increment Financing District No. 2-6 (the "District") of said City, as described in the tax increment financing plan for the area approved by City Council resolution dated January 5, 1998 is 151. I also certify that such original net tax capacity is composed of the net tax capacity of each parcel of taxable property within the District as determined by the assessment thereof in 1994 and 1997, this being the net tax capacity most recently determined before the date when this certification was requested. I will also, in accordance with the provisions of Minnesota Statutes, Section 469.177, Subd. 1, add to the original net tax capacity of the District, an amount equal to the original net tax capacity for the preceding year multiplied by the average percentage increases in the market value of all property included in the District during the five years prior to certification of the District. The market value of the property to be added the District for the five years prior to certification of the modified District is as follows: Assessment Year Tax Year Market Value Percent Chanae January 2, 1992 1993 $1,600 N/A January 2, 1993 1994 1,600 0% January 2, 1994 1995 1,600 0% January 2, 1995 1996 1,600 0% January 2, 1996 1997 1,600 0% The average percentage increase in the tax capacity of the property in the original District during the five years prior to its certification was previously determined to be 5.8%. I also certify that attached to and made part of this certificate is a full, true, and complete list of all taxable parcels of real property within the District and of the original net tax capacity as a result of the modified District determined for each parcel and included in the aggregate amount stated above. I also certify pursuant to the provision of Minnesota Statutes, Section 469.177, Subd. 1a that the "local tax rate" that applies to the District is 135.784% WITNESS my hand and seal this _ day of ,1998. Thomas Hennen Scott County Auditor List of All Taxable Parcels Within the District ATTACHMENT "A" TO THE CERTIFICATE AS TO ORIGINAL NET TAX CAPACITY AND ORIGINAL LOCAL TAX RATE WITHIN TAX INCREMENT FINANCING DISTRICT NO. 2-6 IN THE CITY OF PRIOR LAKE, MINNESOTA Original Net Tax Capacity as Certified bv State Total Net Tax Capacity #25-296-002-1 (after inclusion of expanded parcel) 151 151 Upon recording of the parcel it is anticipated that the parcel number will be assigned.