2019-03-20 EDA Packet - Laserfiche WebLink

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III�III��; ryIS80 M l a Sbllt( F r 11'1,1, WP ti 55038 77777,7777 µ �' r 429 U32 n,N 651 429 8629 Date: March 13, 2019 To: Mayor and City Council Members Through: Mark Statz, City Administrator/Engineer From: Bruce DeJong, Finance Director RE: Authorization to Request Home Inspections Staff has been reviewing the Downtown area for redevelopment along with Tammy Omdal, our financial advisor from Northland Securities, Inc. There are currently two developers interested in the city-owned property in the area commonly referred to as Block 7—the area the city owns between Heritage Street and Sorel Street west of Centerville Road. In order to accomplish long-standing city redevelopment goals for that area there may need to be some city assistance provided to a developer. There also have to be some affordable units in the proposed complex to meet original funding requirements that exist because of the Community Development Block Grant(CDBG)funding used to purchase and clear the blighted properties that existed on that block. As you may be aware, there is an existing Tax Increment Financing (TIF) District 1-6 on six of the seven parcels owned by the city. That district was established in 2005 with a maximum life of 25 years. Since the time for initial development on that district has passed (the Five-Year Rule), the city is limited to spending 25% of the increment generated from that area over the next 11 years. This is called out-of-district expenditures or pooling, since in-district expenditures have to be committed within the first five years of existence. The amount of revenue generated by the remaining district life may be insufficient to fund the type of development that will meet both City Council and resident goals for that property. One possible solution is terminating (decertifying) the existing district and creation of a new, larger TIF district covering most of the downtown area. This would cover all properties on Block 7 and surrounding properties to the north and east along Heritage Street, Sorel Street, Progress Road, Centerville Road, and Main Street. This new TIF district would only be possible if we can find over 50% of the existing buildings to be sub- standard in a technical sense. The TIF statute defines this as a building that would require at least 15% of the cost of a replacement building to bring the existing building up to current building code standards. Staff assumes that this may be the case since many of these properties were constructed prior to adoption of a city building code. The only way to find this out is to actually inspect the existing buildings. That is obviously dependent on the owner's cooperation and no forced inspections would be contemplated. The inspections are proposed to be completed by city building code staff, Paul Palzer and Dan Schmitz. This in a necessary first step to what would be a long process of redevelopment. The area contemplated for inclusion is shown on the attached map.