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HomeMy WebLinkAbout7A - Tax Increment Financing / Roberts Foods AGENDA #: PREPARED BY: SUBJECT: DATE: INTRODUCTION: BACKGROUND: DISCUSSION: ISSUES: STAFF AGENDA REPORT 7A DONALD RYE, PLANNING DIRECTOR PUBLIC HEARING TO CONSIDER APPROVAL OF FORMATION OF TAX INCREMENT FINANCING DISTRICT 2-9, ROBERTS FOODS FEBRUARY 2, 1998 This public hearing is a continued public hearing from the January 5, 1998 City Council meeting. The applicants had asked that consideration of their request be deferred to this meeting. The public hearing was scheduled to consider the formation of TIF District 2-9 on the 4.4 acre parcel in the Business Office Park. The prospective purchaser was Roberts Foods, which intended to use the site to construct a 55,000 square foot distribution warehouse. Prior to the meeting, the applicants asked that the formation of the District be delayed to this meeting to allow the purchase agreement to be refined. Since the last meeting, Roger Guenette has been attempting to get in touch with the principals of Roberts Foods in order to finalize the purchase agreement for the site. He indicated that one of the principals was not returning his calls and, in a conversation with another of the principals, he was told that the deal is not going forward. At this time, staff has nothing in wntmg from the applicants indicating their intentions either to continue or to withdraw from the deal. Given the lack of communications from the applicant, it seems reasonable to conclude that, at the present time, they are not interested in going forward with the project. The primary issue is whether TIF District 2-9 should be created. Inasmuch as their is no guarantee that there will be a project on the site to generate tax increments, it is not prudent to establish the district until there is a development agreement providing some assurances that a project will actually be constructed. AL TERNATIVES: 1. Close the public hearing and approve Resolution 98-XX creating TIP District 2-9 0202987 A.DOC 1 16200 E~ Creek Ave. S.E., Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER RECOMMENDATION: ACTION REQUIRED: 0202987 A.DOC DR 2. 3. Close the public hearing and take no further action Continue the public hearing and direct staff to work with the applicants to determine their intentions Alternative 2 Motion to close the public hearing. This action would terminate ~ request to creatt Increment District 2-9. 'wi ---. 2 AGENDA #: PREPARED BY: SUBJECT: DATE: INTRODUCTION: BACKGROUND: DISCUSSION: STAFF AGENDA REPORT 6 B-3 DONALD RYE, PLANNING DIRECTOR PUBLIC HJ:ARING TO CONSIDER APPROVAL OF RESOLUTION 9798-XX APPROVING THE CREATION OF TAX INCREMENT FINANCING DISTRICT NO. 2-9 JANUARY 5, 1998 The purpose of this item is to consider the creation of Tax Increment Financing District (TIF) #2-9. This district is a part of Development District No.2, which is the Waterfront Passage Business Park. TIF District No. 2-9 is located on the south side of Cottonwood Lane in the Business Office Park. The property is guided C- BO in the Comprehensive Plan and the zoning is BP-Business Park. The proposed use of the property is consistent with both the land use plan designation and the zoning This site will have an area of approximately 4.5 acres and the developers propose to construct a warehouse/distribution facility of approximately 55,000 square feet. 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 TIF District 2-9 is to finance the development activities of this site. The Planning Commission reviewed the creation of the district, finding the proposed use is consistent with the Comprehensive Plan. The Economic Development Authority also recommended approval of the Tax Increment District. Financing for the project will consist of bank financing, general 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 1:\econdev\eda\tif\2-9newcc.doc PAGE 1 16200 Eagle Creek Ave. S.E., Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORT1JNITY EMPLOYER 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. AL TERNA TIVES: 1. Adopt Resolution #98-XX, approving the creation of TIF District No. 2-9 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 Altemative #1. ACTION REQUIRED: A motion and second to adopt the proposed resolution. REPORT ATTACHMENTS: 1. Resolution #98-XX 2. Tax Increment Financi District No. 2-9 Report les, City Manager 1:\econdev\eda\tif\2-9newcc.doc PAGE 2 ~ RESOLUTION 98-XX A RESOLUTION OF l..t1..lL Lll 'i COUNCIL OF 1.t1.Ji. CITY OF PRIOR LAKE APPROVING TA..'X INCREMENT FINA1~CING DISTRICT NO. 2-9 A1"'ID 1.t1.Ji. USE OF TAX INCREMENT FINA1~CING 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. 2-9 pursuant to Chapter 469 of Minnesota Statutes, encompassing the area which is more particularly described on Exhibit.-\ 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. 2-9, dated January 5, 1998 (the "Plan Booklet"), which sets forth a modified ta"( 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 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 Develvpu..ent District No. 2 to be financed in part by the tax increments from the District. 1:\e,con.dev\~da,.\tit\2-.2c,c;res.doc _ ~ . _ E:lg~ 1 16200 Eagle CreeK Ave. :l.t... Prior Lake. Minnesota 5;)372-1;14 / Ph. (612) 44;-4230 / Fax (612) "1-47-4245 i~N EQL:AL OPPORTl'::-<1TY E~PLOYE.", 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 development, 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 fmds 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 tinds and determines the modified ta.."{ 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 entcJ.fJ,;se. 8. The City finds and determines the modified ta.."{ 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 and8 as set forth on pages 3 and 4 of the Plan Booklet are by this reference contirmed, approved and adopted. 10 The City has calculated a fiscal disparities contribution pursuant to Minnesota Statutes, Section 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 LGAJHACA 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 ta.."{ 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. 1:\econdev\eda\tit\2-9ccres.doc Page 2 Mader Kedrowski Peterson Schenck Vacant 1: \econdev\eda\tit\2-9ccres.doc YES Mader Kedrowski Peterson Schenck Vacant Frank Boyles City Manager City of Prior Lake NO Page 3