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HomeMy WebLinkAbout2010-082 CITY OF ARDEN HILLS RAMSEY COUNTY STATE OF MINNESOTA Council member Dave McClung introduced the following resolution and moved its adoption: RESOLUTION NO.2010-082 RESOLUTION ADOPTING A MODIFICATION TO THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO. 1; AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 4 THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council (the "Council") of the City of Arden Hills, Minnesota (the"City"),as follows: Section 1. Recitals - 1.01. The Council has heretofore established Development District No. I and adopted the Development Program therefor. It has been proposed by the City that the City adopt a Modification to the Development Program for Development District No. 1 (the "Development Program Modification") and establish Tax Increment Financing District No. 4 (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Development Program Modification and the TIF Plan arc 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 Ramsey County and Independent School District No. 621 having taxing jurisdiction over the properly to be included in the District, a review of and written comment on the Program and Plan by the City Planning Commission on December 8, 2010, 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, including the redevelopment qualifications reports and planning documents, include 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. 1.05 The City is additionally modifying the boundaries of Development District No. 1. Section 2. Findings for the Adoption and Approval of the Development Pro am Modification. 2.01. The Council approves the Development Program Modification, and specifically finds that: (a) the land within the Project area as expanded would not be available for redevelopment without - the financial aid to be sought under this Development Program; (b) the Development Program, as modified, will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Project by private enterprise; and (c) that the Development Program, as modified, conforms to the general plan for the development of the City as a whole. Section 3. Findings for the Establishment of Tax Increment Financing District No.4 3.01. The Council hereby finds that the District is in the public interest and is a "renewal and renovation district" under Minnesota Statutes, Section 469.174, Subd. 10a of the Act. 3.02. The Council further finds 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 TIF Plan, that the Program and Plan conform 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 Development District No. 1 by private enterprise. 3.03. The Council further finds, declares and determines that the City made the above findings 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 elects to calculate fiscal disparities for the District in accordance with Section 469.177, Subd. 3, paragraph b of the Act, which means the fiscal disparities contribution would be taken from inside the District. Section 4. Public Pu[pose 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. For the reasons described in Exhibit A, the City believes these benefits directly derive from the tax increment assistance provided under the TIF Plan. A private developer will receive only the assistance needed to make this development financially feasible. As sucb, any private benefits received by a developer are incidental and do not outweigh the primary public benefits. 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 Administrator. 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 Ramsey 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 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 District for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The City Administrator 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 Section 469.175, Subd. 4a of the Act. The motion for the adoption of the foregoing resolution was duly seconded by Council member .r2)q,k1 1.10 t4,n e6 and upon a vote being taken thereon,the following voted in favor thereof: and the following voted against the same: Dated: December 20, 2010 (Seal) EXHIBIT A RESOLUTION NO.2010-082 = The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF Plan) for Tax Increment Financing District No. 4 (District),pursuant to Minnesota Statutes, Sections 469.174 through 469.1799, all inclusive, as amended (Act), as required by Section 469.175, Subdivision 3 of the Act, are as follows: 1. Finding that Tax Increment Financing District No. 4 is a renewal and renovation district as defined in Section 469.174, Subdivision IOa of the Act. The District consists of two parcels and three buildings, with plans to redevelop the area for senior housing 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. One building(more than 20 percent of the buildings in the District), is structurally substandard as defined in the Act, and one building(more than 30 percent of the buildings in the District) requires substantial renovation or clearance to remove existing conditions, such as those existing conditions defined in the Act. (See Appendix F of the TIF Plan.) - 2. 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 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 far the maximum duration of the District 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. There are higher costs associated with redeveloping the site due to accommodating existing residents in their current units until the new facility is constructed; relocating existing residents to the new facility; and site - constraints related to topography, grading,demolition and utilities for constructing the new facility adjacent to the existing facility. In addition, increased landscaping will be required to provide an adequate buffer and screening from the adjacent single-family homes. Due to these higher costs of redevelopment on the parcels this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistance.(See attachment in Appendix G of the TIF Plan.) 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 TIF Plan: The above finding explained why the proposed redevelopment would not likely occur without tax increment assistance. It is possible that some redevelopment of the existing senior housing complex would go forward without assistance, but the unique costs of this effort (described above)mean that without assistance, any alternative redevelopment would necessarily be carried out at a smaller scale, and most likely over a longer period of time. It is impossible to predict what an alternative market value would be if no tax increment assistance were provided, but it is certain that the alternative redevelopment would produce significantly less value than the comprehensive, high quality development that is proposed under the TIF Plan. There is no reasonable likelihood that an alternate, unassisted development would add as much as $9,972,625 in market value(which is the alternate threshold noted below). Therefore,the City concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is an amount less than the amount described in clause d below. b. If the proposed development occurs, the total increase in market value will be $12,623,600 (see Appendices D and G of the TIF Plan) c. The present value of tax increments from the District for the maximum duration of the District permitted by the TIF Plan is estimated to be$2,650,975 (see Appendices D and G of the TIF Plan). d. Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $9,972,625 (the amount in clause b less the amount in clause c without tax increment assistance. 3. Finding that the TIF Plan for the District 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. 4. Finding that the TIF Plan for the District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Development District No. 1 by private enterprise. The project to be assisted by the District will result in the redevelopment of substandard properties, increase the availability of safe and decent life-cycle housing in the City, increase the tax base of the State and add a high quality development to the City.