HomeMy WebLinkAbout2015/10/26 - ADMIN - Agenda Packets - City Council - Study SessionAGENDA
OCTOBER 26, 2015
6:30pm CITY COUNCIL STUDY SESSION – Community Room
Discussion Items
1. 6:30 p.m. Future Study Session Agenda Planning – November 2 and 9, 2015
2. 6:35 p.m. Annual TIF Management Report
3. 7:35 p.m. Business Terms for Purchase & Redevelopment Contract with 4900
Excelsior, LLC
4. 8:05 p.m. Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance
Code
8:50 p.m. Communications/Meeting Check-In (Verbal)
8:55 p.m. Adjourn
Written Reports
5. September 2015 Monthly Financial Report
6. Third Quarter Investment Report (July – September 2015)
7. EDA Redevelopment Contract Status Report
8. Update on Shoreham Redevelopment Contract
9. 2016 Budget Update
10. Kerasotes Showplace ICON Theatre Liquor License Premises Amendment
11. Proposed Small Business Saturday Proclamation
12. Reilly Tar & Chemical Corp. Site Update
Auxiliary aids for individuals with disabilities are available upon request.
To make arrangements, please call the Administration Department at
952/924-2525 (TDD 952/924-2518) at least 96 hours in advance of meeting.
Meeting: Study Session
Meeting Date: October 26, 2015
Discussion Item: 1
EXECUTIVE SUMMARY
TITLE: Future Study Session Agenda Planning – November 2 and November 9, 2015
RECOMMENDED ACTION: The City Council and the City Manager to set the agenda for a
Special Study Session on November 2, 2015 and the regularly scheduled Study Session on
November 9, 2015.
POLICY CONSIDERATION: Does the Council agree with the agendas as proposed?
SUMMARY: At each study session approximately five minutes are set aside to discuss the next
study session agenda. For this purpose, attached please find the proposed discussion items for a
Special Study Session on November 2, 2015 and the regularly scheduled Study Session on
November 9, 2015.
FINANCIAL OR BUDGET CONSIDERATION: Not applicable.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Future Study Session Agenda Planning – November 2 & 9, 2015
Prepared by: Debbie Fischer, Administrative Services Office Assistant
Approved by: Tom Harmening, City Manager
Study Session Meeting of October 26, 2015 (Item No. 1) Page 2
Title: Future Study Session Agenda Planning – November 2 and November 9, 2015
Special Study Session, November 2, 2015 – 6:00 p.m.
Tentative Discussion Item
1. Zero Waste Ordinance – Operations & Recreation (30 minutes)
Does the Council support the draft language in the proposed ordinance and is it ready to
move forward with a public hearing and possible ordinance adoption.
2. Bring Your Own Bag Ordinance – Operations & Recreation (50 minutes)
Council is asked to provide feedback on a draft ordinance requiring a fee on the use of plastic
or paper bags at the point of sale. City Attorney will also be present.
Special Study Session Continued, November 2, 2015 – Immediately Following CC
3. Future of Emergency Medical Services – Fire (45 minutes)
The future of how emergency medical services are delivered is rapidly changing. The
impacts to our customers and the role of the City continues to evolve including fire, police
and dispatch services. The fire chief will give an overview of where we have been, what the
current state is, and what the future will likely transition to.
Study Session, November 9, 2015 – 6:30
(City Manager Harmening & Mayor Jacobs Out)
Tentative Discussion Items
1. Future Study Session Agenda Planning – Administrative Services (5 minutes)
2. Assessment Policy Discussion – Engineering (30 minutes)
The City’s assessment policy was adopted in 2000. Since that time, a number of changes have
occurred in regards to project funding and ownership of utilities. In the interest of keeping
our policy up to date, staff has been working on a new policy for Council consideration.
3. Monterey/Excelsior Area Traffic Study Continued – Engineering/Community Development
(45 minutes)
At the October 19 Study Session staff presented the additional traffic analysis in the area of
Monterey Drive and Excelsior Boulevard. At that meeting Council requested that this item
come back for additional discussion regarding the Park Commons/Monterey intersection.
4. SWLRT Update – Community Development (30 minutes)
General update on SWLRT and related projects including discussion and status of proposed
FTA/SLP Joint Development project at Beltline LRT Station.
Communications/Meeting Check-In – Administrative Services (5 minutes)
Time for communications between staff and Council will be set aside on every study session
agenda for the purposes of information sharing.
Reports
5. Amendment to Cedar Lake Rd Apts Redevelopment Contract & Minimum Assessment Agreement
6. Purchase Agreement & Redevelopment Contract 4900 Excelsior, LLC
Meeting: Study Session
Meeting Date: October 26, 2015
Discussion Item: 2
EXECUTIVE SUMMARY
TITLE: Annual TIF Management Report
RECOMMENDED ACTION: No formal action required. This is an information sharing
session.
POLICY CONSIDERATION:
• Does the City Council or EDA have any questions or concerns regarding the status of the
Tax Increment Financing (TIF) Districts within the City?
• What other information would be helpful for the City Council or EDA regarding the City’s
TIF Districts?
SUMMARY: Beginning in 2000, City staff along with representatives from Ehlers & Associates
have periodically presented the City Council and EDA with a report regarding the status of the
City’s TIF Districts. This practice was started due to the City’s extensive use of this tool. This
study session discussion is a continuation of this practice.
Stacie Kvilvang from Ehlers & Associates, which is the City and EDA’s financial consultant,
and City staff will be discussing the Management Review & Analysis – Tax Increment Financing
Districts report with the City Council and EDA at a high level. The purpose of the report is to
review the status, financial condition, debt management, and future value of the City’s tax
increment districts. The report also describes the revenues generated from each TIF district,
identifies findings, and presents recommendations that should be discussed regarding the
management of the TIF districts and related obligations. Information contained in this report is
obtained from various sources, including, but not limited to: The City of St. Louis Park,
Hennepin County, State of Minnesota, Office of the State Auditor and Ehlers staff. Portions of
the information in the report are used by City staff throughout the year to provide a quick
reference guide when performing analyses and making recommendations to the City Council or
EDA.
FINANCIAL OR BUDGET CONSIDERATION: By updating the information contained in
the report, staff is able to have an excellent resource when analyzing data or preparing financial
information to ensure a comprehensive picture for the City Council, EDA or end users of
information.
VISION CONSIDERATION: All Vision areas are taken into consideration.
SUPPORTING DOCUMENTS: Management Review and Analysis – TIF Districts
TIF District Status Report – PowerPoint
Prepared by: Brian A. Swanson, Controller
Reviewed by: Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
October 2015 Management Review & Analysis Tax Increment Financing Districts City of St Louis Park, Minnesota Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 2
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 2 Table of Contents Management Review and Analysis ..................................................................................................... 3 Overview ............................................................................................................................................................................................. 3 TIF District Summary ......................................................................................................................................................................... 4 Obligations of the TIF Districts .......................................................................................................................................................... 7 Administrative Expenses .................................................................................................................................................................. 12 Assumptions ...................................................................................................................................................................................... 13 Recommendations ............................................................................................................................................................................. 14 Tax Increment Financing Districts ................................................................................................................................................. 17 Victoria Ponds ................................................................................................................................................................................... 17 Park Center Housing ......................................................................................................................................................................... 21 Zarthan Avenue/16th Street ............................................................................................................................................................... 26 Mill City ............................................................................................................................................................................................ 34 Park Commons .................................................................................................................................................................................. 39 Edgewood ......................................................................................................................................................................................... 49 Wolfe Lake Commercial Redevelopment ......................................................................................................................................... 54 Aquila Commons .............................................................................................................................................................................. 59 Elmwood Village .............................................................................................................................................................................. 65 Highway 7 Corporate Center ............................................................................................................................................................ 76 West End ........................................................................................................................................................................................... 85 Ellipse on Excelsior .......................................................................................................................................................................... 91 Hardcoat ............................................................................................................................................................................................ 99 Eliot Park ........................................................................................................................................................................................ 103 The Shoreham ................................................................................................................................................................................. 106 4900 Excelsior ................................................................................................................................................................................ 109 City Map of the TIF Districts ............................................................................................................ 111 Definitions ........................................................................................................................................... 112 Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 3
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 3 Management Review and Analysis Overview Revenue from tax increment financing (TIF) districts is a financial asset of the City of St Louis Park. This revenue must be used primarily to address blight, contamination, housing or redevelopment needs for the parcels in the TIF district within a specified period of time. The revenue generated is first used to pay debt service on outstanding bonds, interfund loans and developer pay-as-you-go notes (PAYGO). A portion, but not all, of the remaining revenues can be used to participate in other eligible development projects and City initiatives. Over the years, the City utilized unobligated revenues from older TIF districts to complete the following projects: Park Commons property assembly and public improvements Excelsior Boulevard streetscape improvements Excelsior Boulevard bridge improvements Reilly tar clean-up activities Highway 7 and Louisiana Avenue storm water intersection improvements Louisiana Court Rehabilitation Erv’s Garage redevelopment Bikemasters (Construction Assistance Program) Hardcoat (Construction Assistance Program) Home Hardware Store (Construction Assistance Program) The factors that produce tax increment revenues change every year. At the same time, the state property tax laws have changed significantly since 1997, including the major reforms enacted in 2001. Despite reductions in revenue due to the reform, the City has more than adequate cash flow to pay for all outstanding general obligation tax increment bonds. A few of the TIF districts for which project costs were paid through a developer financed PAYGO note are not meeting scheduled principal and interest payments. However, the interest rates on these notes is much higher than what is seen in today’s market. Overall, the City has no obligation to make up shortfalls for these PAYGO notes, since they are revenue based notes and the risk is borne by the developer. In addition to property tax reform, significant changes enacted by the Legislature in 1990 have changed the way that cities can utilize TIF for development. The Office of the State Auditor (OSA) has a TIF division which is mandated by state law to collect annual reporting forms and, if necessary, audit the use of TIF. Such audits could result in a letter to the county attorney or attorney general for enforcement actions. To date the City has not been audited. Due to legislative and market changes and oversight of TIF districts by the OSA, the management of the City’s TIF districts is an ongoing activity. Ehlers worked with City staff to create the following plan for the management of its TIF districts and their related obligations. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 4
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 4 TIF District Summary Currently the City has one inactive (Victoria Ponds) and sixteen active TIF districts (including 1 new district expected to be approved by end of 2015), and one HSTI District (Hwy 7 Corporate Center). Overall the makeup of the types of districts is as follows: Type of DistrictNumberEconomic Development1Housing2HSTI Sub District1Redevelopment10Renovation and Revewal1Soils1TOTAL16* Actual number is 15 districts as the HSTI district is a subdistrict These districts are outlined in the charts that follow on the next two pages. A more detailed explanation of each district can be found starting on page 17. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 5
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 5 VictoriaParkZarthan/ MillParkAquilaPonds Center16th AvenueCityCommonsCommonsDistrict TypeRedevelopmentHousing Redevelopment RedevelopmentRedevelopmentSoils Condition RedevelopmentHousingProject/Costs Financed72 twin home units and part of the Hutchinson Spur trail. Financed $760,000 soil corrections and remediation and $700,000 of City costs for trail improvements91 units of senior assisted living rental housing. Financed $500,000 land acquisitionTwo hotels developed by CSM and 86 townhome units build by Rottlund. Financed $3,945,000 land acquisition and site improvements200 rental housing units developed by MSP Real Estated. Financed $3,531,900 developer site costs.Excelsior and Grand retail, office and rental housing and condos developed by TOLD. Financed $3.5M in public improvements and $15.55M in site and parking ramp costs79,000 s.f. office warehouse facility developed by Real Estate Recycling (CPD Edgewood Investors). Financed $600,000 soils and clean-up costsTwo office/commercial buildings consisting of 65,000 s.f. developed by Beltline Industrial Park, Inc. Financed $996,000 soils and site condition costs.122 unit limited equity senior cooperative developed by Stonebridge. Financed approximately $1,000,000 land acquisition costs.Approved4/1/1996 10/7/1996 12/20/1999 3/20/2000 1/16/2001 9/15/2003 7/7/2003 9/7/2004Legal max term12/31/2023 12/31/2023 12/31/2026 12/31/2026 12/31/2027 12/31/2025 12/31/2031 12/31/2032Anticipated term12/31/2014 12/31/2023 12/31/2022 12/31/2022 12/31/2027 12/31/2019 12/31/2020 12/31/2018First Increment19981998200120012002200520062007Current ObligationsNoneNone$1,101,362 PAYGO Note 1 $1,448,088 PAYGO Note 2 and $1,395,547 PAYGO Note 3$3,431,137 PAYGO Note$3,135,046 interfund loan $3,500,000 Phase I PAYGO Note, $3,300,715 Phase E PAYGO Note, $4,668,633 Phase NE PAYGO Note, $4,079,105 Phase NW PAYGO Note$600,000 PAYGO Note$996,000 PAYGO Note$1,050,000 PAYGO NoteOther Obligations$400,000 for ERV's garage redevelopment$500,000 Loan to Lousisana Ct to buy down bondsNoneNoneNoneNoneNoneNoneContruction Assistance Program (CAP) Funding$500,000 for Hardcoat (former Flame Metals property. Portion will be repaid from new ED TIF district) and $25,000 toCAR Prperties LLC (former Home Hardware Store)NoneNone$70,000to CKJ Properties (former Bikemasters property)NoneNoneNoneNone2015 Est TIF RevenueN/A$125,872$403,018$438,686$2,091,893$58,923$121,174$2,015Fiscal DisparitiesA (outside)A (outside)B (inside)B (inside)A (outside)B (inside)B (inside)B (inside)County Number1303 1304 1305/1306 1307 1308 1309 1310 1311DistrictWolfe LakeEdgewood Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 6
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 6 ElmwoodHighway 7 CorporateEllipse on VillageCenter & HSTIExcelsiorDistrict TypeRenewal and RenovationRedevelopment and Hazardous Substance SubdistrictRedevelopmentRedevelopment Economic Development RedevelopmentRedevelopmentRedevelopmentProject/Costs FinancedRottlund - 224 townhomes and condos near Wooddale and Highway 7. Financed approximately $790,000 in site and land costs. Hoigaards - 74 condos over 25,000 sq/ft of retail, 220 apartments. Financed $3,495,000 and $935,000 in 2010 TIF revenue bonds for site and land costs. 100 sr. apartmenst and 22 town homes. Financed $1.020 in site and land costs. Grecco - 115 senior rental units over 10,000 sq/ft of retail. Financed $490,000 in site and land costs.Created to provide funding to clean up contaminated land and the subsequent construction of a 78,000 s.f. faciltiy1.5M s.f. office, retail, hotel, theater complex developed by Duke Realty. Financed $21,100,000 site costs and up to $5,000,000 City public improvements Ellipse I - 132 Market Rate Apartments and 16,000 s.f. commercial and Ellipse II - 58 Units of MarketRrate ApartmentsAcqisition and renovation of a 33,600 sq/ft manufacturing facility and construction of 1,500 sq/ft of officeRedevelopment of the Eliot School site into 138 market rate apartments and 2 single-family homesRedevelopment of 5 parcels into 148 market rate apartments with 20% of the units affordable at 50% of the AMI and 20,000 sq/ft of retail/office spaceRedevelopment of the Bally's site into 176 market rate apartments with 10% of the units affordable at 60% of AMI and a 28,000 sq/ft grocery storeApproved8/2/20045/15/200611/19/20072/2/200912/20/20105/6/201320152015Legal max term12/31/2029 12/31/2032 12/31/2036 12/31/2036 12/31/2022 12/31/2040 12/31/2042 12/31/2042Anticipated term12/31/2023 12/31/2027 12/31/2031 12/31/2022 12/31/2022 12/31/2040 12/31/2020 12/31/2023First Increment2007 2007 2011 2011 2014 2016 2017 2017Current ObligationsHoigaards - 2010A TIF Revenue Bonds - $3,495,000, 2010B TIF Revenue Bonds - $935,000, Adagio-$820,000 PAYGO Note, and Medley- $200,000 PAYGO Note Grecco - $490,000 PAYGO Note IFL - $3,430,128 PAYGO Notes - Note A $2,100,000 Note B $360,000 Note C $72,000 and Note D $23,000$5,490,000 2008A GO TIF Bonds and Duke Realty $21.1 M PAYGO Note$1,230,000 Note A- PAYGO and $220,000 Note B - PAYGO $686k Ellipse II Paygo$500,000 Interfund Loan from Victoria Ponds TIF District$1.1 Million PAYGO Note$1.2 Million PAYGO Note$2.6 Million PAYGO NoteOther ObligationsNoneNoneNoneNoneNoneNoneNoneNoneContruction Assistance Program (CAP) FundingNoneNoneNoneNoneNoneNoneNoneNone2015 Est TIF Revenue$1,614,525$2,015$2,015$2,015$2,015$0$0$0Fiscal DisparitiesB (inside)B (inside)B (inside)B (inside)B (inside)B (inside)B (inside)B (inside)County Number1312 1313 1314 1315 1316 1318/1319 1320 1321The Shoreham 4900 ExcelsiorWest End HardcoatDistrictEliot Park Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 7
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 7 Obligations of the TIF Districts The revenues from these districts are largely site specific, meaning that the revenues are restricted by law and by contract with the developers. The revenues must be used primarily to address blight, contamination, housing or redevelopment needs for the parcels in the TIF district within a specified period of time. The City has the following obligations outstanding (after the August 1, 2015 actual bond and PAYGO payments were made): Summary of Outstanding Obligations (after the 8/1/2015 payment) DistrictNoteOutstanding After 8/1/2015Total By TIF DistrictNote A1,251,138$ Note B214,481$ Note C77,220$ Note D24,667$ Aquila CommonsStonebridge404,922$ 404,922$ EdgewoodEdgewood207,712$ 207,712$ Wolfe LakeBeltline443,882$ 443,882$ Excelsior & Grand 4,661,687$ Phase NE4,815,430$ Phase E3,872,323$ Phase NW4,711,711$ Mill CitySLP Apts3,956,058$ 3,956,058$ CSM Note 11,218,476$ CSM Note 21,750,836$ Rottlund Note 3976,356$ Adagio751,022$ Medley187,507$ Grecco259,014$ West EndDuke20,909,528$ 20,909,528$ Bader Note A805,631$ Bader Note B156,233$ Ellipse II LLC627,135$ Eliot ParkHunt Associates1,100,000$ 1,100,000$ The ShorehamBader1,200,000$ 1,200,000$ 4900 ExcelsiorOppidan2,600,000$ 2,600,000$ TOTAL57,182,969$ Pay As You Go ObligationsHwy 7 Corporate CenterPark CommonsZarthanEllipse on ExcelsiorEllmwood $ 1,567,506 18,061,151$ 3,945,668$ 1,197,543$ 1,588,999$ Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 8
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 8 IssueAmount Paying District Term2008B GO Tax Increment Bonds 4,175,000$ West End 2/1/20242010A Tax Increment Revenue Bonds - Hoigaards 2,350,000$ Elmwood 2/1/20232010B Tax Increment Revenue Bonds - Hoigaards 577,109$ Elmwood 2/1/2023TOTAL 7,102,109$ N/A N/ABonds as of 8/1/2015 Construction Assistance Program In 2009, the Legislature passed the JOBS Bill and extended it for one year as part of the 2010 legislative session. One element of this was the temporary authority to stimulate construction. This portion of the legislation allows cities to utilize cash balances in existing TIF district (not needed to pay debt service on outstanding obligations) to spur new construction or substantial rehabilitation of private buildings and ancillary facilities, if construction commences by July 1, 2012 and the dollars are expended by December 31, 2012. On July 19, 2010 the EDA approved a Construction Assistance Program (CAP) and at a public hearing, adopted the required Spending Plan. The TIF districts that have available funding for CAP are: Victoria Ponds Park Center Housing CSM Mill City Edgewood Wolfe Lake Aquila Commons Elmwood Village (Rottlund portion of TIF only) There are three projects that have been funded through the CAP program at this time – Hardcoat (former Flame Metals building), CKJ Properties LLC (former Bikemasters building) and CAR Properties LLC (former Home Hardware Store). The EDA provided $500,000 to Hardcoat to purchase and renovate the former Flame Metals property within the City. Hardcoat renovated the building and site, and relocated its operations there. The existing industrial building is approximately 33,600 square feet and was constructed in 1963. Both the interior and exterior had numerous building code deficiencies. Following Flame Metals’ departure in 2009, the building’s interior has been emptied, thoroughly cleaned, repainted, and many (but not all) code deficiencies have been addressed. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 9
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 9 The project includes a complete renovation of both the interior and exterior of the building as well as the addition of approximately 1,500 square feet of office/conference space on the north side of the building. Renovation included a new roof, new exterior facelift, new windows and dock doors, new offices and interior spaces, new electrical and plumbing systems, new energy efficient HVAC equipment, new parking lot and landscaping, rain gardens and site amenities, as well as the construction of a 1,500 SF addition for office/conference space. Hardcoat initially occupied approximately 25,000 square feet of the building. The balance has been leased to a complementary business and will provide Hardcoat with future expansion capacity. The $500,000 in funding for this project came from the Victoria Ponds TIF district. In addition, the EDA created a new economic development TIF district on December 20, 2010 for the project to repay as much of the funds back to this district. The EDA provided $70,000 to CKJ Properties LLC to renovate the existing Bikemasters property within the City. The existing building is approximately 18,000 square feet and was constructed in 1950. The building was neglected and fell into disrepair. As a result, the building sustained damage due to lack of maintenance and vandalism. The building went into foreclosure in 2009 year and was purchased in September 2010 by CKJ Properties LLC. The project included a complete renovation of both the interior and exterior of the building. Renovation included new windows and doors, new bathrooms, new flooring and carpeting, new ceilings, new electrical and plumbing systems, new energy efficient HVAC equipment, new dock doors and downspouts, as well as interior and exterior painting, landscaping, parking lot resurfacing and striping, and screening of outdoor dumpsters. The property is currently leased to six (6) office tenants. The $70,000 in funding for this project came from the Mill City TIF district. The City provided $25,000 to CAR Properties LLC. to renovate the former Home Hardware Store. The building is located in the Lenox neighborhood near the intersection of Wooddale and West Lake Street. It was originally constructed in the 1950’s within a strip of commercial buildings and has always been a hardware store. Despite its use as a former hardware store, the building was neglected for some time. CAR Properties made the required repairs and renovated the building. Renovation included a new roof, front window, energy efficient HVAC equipment, as well as remodeling the bathroom and making other various repairs so as to make the building code compliant. Upon renovation the owner expects to lease the property to another commercial tenant. The $25,000 in funding for this project came from the Victoria Ponds TIF District. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 10
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 10 TIF as a Development Tool Continuous redevelopment is vital to maintaining the City’s long-term economic health and vitality. St Louis Park has utilized TIF for key redevelopment and housing projects since 1972 when the Oak Park Village TIF District was established. Utilizing this tool to accomplish the various goals of the City has strengthened the overall diversity of housing options, land uses and tax base, while increasing employment opportunities and cleaning up contaminated sites. One immediate benchmark of the benefit in utilizing TIF is the overall increase in market value from when the district was created to when it is fully developed and aging. As illustrated in the following table, the City’s overall market value has increased in the various TIF districts by nearly 750%: DistrictCounty District Number Original Market Value Pay 2015 Market Value Percent Increase in ValuePark Center1304$493,000$8,645,0001753.55%Zarthan1305 and 1306$4,053,600$32,281,314796.36%Mill City1307$708,700$28,000,0003950.90%Park Commons1308$6,688,000 $156,579,9592341.21%Edgewood1309$1,000,000$4,748,000474.80%Wolfe Lake1310$1,717,300$9,500,000553.19%Aquila1311$1,900,000$15,680,689825.30%Elmwood1312$10,864,500 $133,458,4551228.39%Highway 7 Business Center1313$2,792,700$9,208,800329.75%West End (partial completion)1314$43,051,000 $129,785,900301.47%Ellipse 1315$1,931,800$35,133,8001818.71%Hardcoat1316$1,184,700$2,400,000102.58%Eliot Park (partial completion)1318/1319$0$5,159,100N/AThe Shoreham (Under Construction)1320$2,479,200$2,479,200N/A4900 Excelsior (2016 Construction)1321$2,759,580$2,759,580N/ATOTALN/A$76,385,300 $573,060,217750.22% Note: The Shoreham when completed is expected to increase market valuation by 1,315% and 4900 Excelsior is expected to increase it by 1,383%. Even though there are many benefits to utilizing TIF as a development tool, cities still wonder if they are utilizing the tool too much or not enough. One good way to measure a city’s use of TIF is to compare the use of TIF with similar cities. A common measure of the use of TIF is the percentage of the gross tax base captured in TIF districts. On the following page is a chart which demonstrates St. Louis Park’s current and projected tax base which is captured in TIF districts with similar cities. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 11
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 11 City of St. Louis ParkProjected Captured TIF Tax Capacity and Comparison with Other CitiesCity of St. Louis Park2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Excelsior Blvd HSTI-1301 950,066 950,066 950,066 980,266 0 0 0 0 0 0Trunk Highway 7980,962000000000Victoria Ponds-1303365,374 358,947 330,709 333,565000000Park Center-130486,053 86,053 86,053 94,015 99,703 100,700 101,707 102,724 103,751 104,789Zarthan-1305/1306293,749 288,534 292,934 299,459 312,209 315,331 318,484 321,669 324,886 328,135Mill City-1307202,076 202,326 237,326 287,326 337,326 340,699 344,106 347,547 351,023 354,533Park Commons-13081,432,389 1,392,819 1,438,880 1,552,224 1,756,934 1,774,503 1,792,2481,810,171 1,828,273 1,846,555Edgewood-130956,456 36,337 36,812 40,528 48,720 49,207 49,699 50,196 50,6980Wolfe Lake-131099,421 100,205 101,516 102,960 100,192 101,194 102,206 103,228 104,260 105,303Aquila Commons-1311156,585 137,167 137,278 133,298 139,367 140,761 142,168 143,59000Elmwood-1312864,609 794,241 832,408 1,018,196 1,412,891 1,427,020 1,441,290 1,455,703 1,470,260 1,484,963Highway 7 Business Center-131388,298 83,96685,065 85,739 83,955 84,795 85,642 86,499 87,364 88,238Highway 7 Subdistrict-131353,504 53,504 53,504 53,504 53,504 54,039 54,579 55,125 55,676 56,233West End-1314740,595 757,301 803,793 885,303 1,117,854 1,129,033 1,140,323 1,151,726 1,163,243 1,174,876Ellipse on Excelsior-13159,843 185,529 201,265247,501 415,572 419,728 423,925 428,164 432,446 436,770Hardcoat-1316000 16,234 15,798 24,066 24,307 24,550 24,795 25,043Eliot Park-1318/131900000 81,936 189,749 191,646 193,563 195,499The Shoreham - 13200000000 313,742 374,577 378,3234900 Excelsior - 1321000000 37,703 445,625 450,081 454,582Future Est. Captured TIF Tax Capacity6,379,980 5,426,995 5,587,609 6,130,118 5,894,025 6,043,011 6,248,138 7,031,906 7,014,897 7,033,841Total Tax Capacity (Gross)66,089,870 63,092,802 61,908,29462,645,169 66,206,866 66,868,935 67,537,624 68,213,000 68,895,130 69,584,082Percentage of Tax Base in TIF9.7% 8.6% 9.0% 9.8% 8.9% 9.0% 9.3% 10.3% 10.2% 10.1%Assumes 1% annual increase in tax base and TIF beginning in payable 2016Comparable CitiesFinal Pay 2015CityCaptured TIF as a % of Tax BaseCity Tax RateBond RatingGolden Valley0.1%54.626%AaaEdina1.4%26.605%Aaa/AAABrooklyn Park1.7%56.136%AA+Minnetonka2.1%36.565%AaaMinneapolis7.4%66.333%Aaa/AAABloomington8.5%45.673%Aaa/AAASt. Louis Park8.9%47.754%AAAHopkins10.0%61.008%AARichfield10.6%60.133%Aa2New Brighton12.0%40.947%AAFinal Pay 2015ProjectedActual Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 12
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 12 Today, the City’s use of TIF is about average compared to similar cities that are undertaking significant redevelopment. Also shown are comparable cities’ tax rates and bond ratings. Although this is a small sample of municipalities, the amount of TIF used by a City does not seem to correlate directly with a City’s tax rate or bond rating. In conversations with rating agencies, we do know that market value growth and redevelopment are important factors in maintaining St Louis Park’s AAA bond rating. Following is a table which demonstrates the historical market value growth of the City of St. Louis Park. Tax YearTaxable Percent ChangePayable Market Value From Prior Year2015 5,242,685,1846.68%2014 4,914,404,3120.48%2013 4,891,018,550-2.54%2012 5,018,306,562-5.61%20115,316,617,000 -4.40%2010 5,561,557,200 -1.39%2009 5,639,683,900 1.49%2008 5,556,997,200 7.23%2007 5,182,504,700 10.67%2006 4,682,796,400 12.04%2005 4,179,671,600 10.42%2004 3,785,184,300 9.11% Tax YearCityPercent ChangePayableTax Rate From Prior Year201547.754-1.68%201448.5700.71%201348.2285.60%201245.6725.54%201143.27611.44%201038.8341.06%200938.4266.43%200836.1030.08%200736.074-0.74%200636.344-2.77%200537.381-5.06%200439.3728.19% The above two tables show the history for the City’s taxable market value and the City’s tax rate. Factors such as total general and debt levy needs, state law and economic factors will influence both the market value and the corresponding tax rate. A correlation cannot always be made when considering market value, tax rate and total tax capacity captured by tax increment districts. Administrative Expenses Minnesota TIF law defines certain costs to administer and maintain the district as allowable costs that can be paid for from tax increment revenues. These generally include City staff time, legal expenses, financial advisory expenses and publication and reporting expenses. This allows a City to defray documented staff time that is most likely a General Fund expense, such as staff time in Finance, Community Development, Assessing and Administration. Time spent can be paid for from TIF revenues rather than general property tax or other revenues. The table on the next page shows the estimated amount of increment remaining in the City’s TIF districts for payable 2015 after district obligations have been paid and after estimated administrative costs have been deducted. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 13
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 13 ParkZarthan/ MillParkEdgewoodWolfe LakeAquilaCenter16th AvenueCityCommonsCommonsPay 2015 TIF125,872403,018438,6862,091,89358,923121,174159,256Obligations Paid0361,262394,3711,918,25951,086116,131147,466Allowable admin12,58740,30223,03162,7572,9466,3627,963Net TIF 113,2851,45521,284110,8784,891(1,319)3,827District ElmwoodHighway 7 BusinessWest EndEllipse on VillageCenter & HSTIExcelsiorPay 2015 TIF1,614,525147,4471,152,004448,06619,246000Obligations Paid850,912140,747499,081338,3630000Allowable admin80,7267,37257,60022,4031,925000Net TIF 682,886(673)595,32387,30017,321000Eliot ParkDistrictHardcoat The Shoreham 4900 Excelsior Assumptions Before discussing the recommendations of the current TIF analysis, it is important to understand the assumptions used in making these projections. 1. Fund Balances. Fund balances shown for debt service funds are based on actual audited amounts for December 31, 2014. 2. Tax Increment. Pay 2015 tax increment revenues are based upon Hennepin County reports. 3. Projected Revenues. Projected revenues do not account for additional development (except the developments under a development agreement) or inflation/decrease of existing values. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 14
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 14 Recommendations The updated financial analysis of the City’s TIF Districts offers the following recommendations: 1. Pooling. Two of the districts have cash balances within them due to funds not being utilized for administration or other projects within or outside the district. Following is a chart outlining various districts that may have some cash balances available for pooling as of February 1, 2015. Tax Increment Currently Available for Legal Pooling DistrictFebruary 1, 2015 Cash BalanceType of Project EligibleAfter 2/1 PymtsPark Center Housing 204,300$ Affordable Housing Total Affordable Housing204,300$ Zarthan 356,700$ Redevelopment Total Redevelopment 356,700$ The balances in the chart on the following page are based on the projections, which include all obligations that have been issued and any current projects. The balances will change as future projects are identified and funded. Following is a chart outlining various districts that may have some cash balances available for pooling at the end of their term: Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 15
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 15 TIF Balances Available For Legal Pooling at End of District, If Current Available Pooling Is Not Used DistrictEnd Date of ObligationFund BalanceType of Project EligibleVictoria Ponds 2013 259,779$ RedevelopmentZarthan 2023 672,146$ RedevelopmentMill City 2019 297,690$ RedevelopmentPark Commons 2028 2,076,309$ RedevelopmentEdgewood 2017 12,707$ LimitedEllipse 2022 1,173,467$ RedevelopmentWolfe Lake 2020 65,609$ RedevelopmentAquila Commons 2018 102,914$ Affordable HousingWest End 2031 89,162$ RedevelopmentElmwood 2023 70,505$ RedevelopmentHwy 7 Corporate Center 2027 69,022$ Redevelopment As noted, several of the TIF districts will have significant cash balances at the end of their term. We recommend completing a pooling analysis for the Zarthan and Park Commons districts to determine how much will be available for use and what strategies can be implemented to secure the use of these funds if deemed appropriate by the City. 2. Use of TIF in Districts With On-Going Cash Balances. There are three (3) districts which may have significant current and future cash balances for eligible TIF activities include: Park Center TIF District: Approximately $126,000 per year will be available through the term of the district for additional rental or owner-occupied housing programs whose residents meet the income restrictions outlined in the TIF law. The City transfers the balance annually to its housing fund for use on income qualified housing projects. Zarthan TIF District: Approximately $356,000 in cash is currently available for pooling. We recommend determining a plan for the use of these funds for EDA/City projects that meet qualified use/costs Victoria Ponds TIF District: Approximately $260,000 in cash is currently available for pooling, after adjusting for prior pooling amounts. We recommend determining a plan for the use of these funds for EDA/City projects that meet qualified use/costs (See return of fund balance below). Ellipse TIF District: It shows approximately $1.173 million available at the end of the district. See Six-Year Rule below. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 16
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 16 3. Return of Fund Balance in Victoria Ponds. The current fund balance is $619,085. Of this, the City can retain $259,779 for legal pooling purposes. We recommend that the City return the non-legal pooling dollars of $359,306 to the County for redistribution to the City, County and School District. 4. Look Back. Since all units have been sold within Aquila Commons, we recommend completing the required look back analysis to determine if any reduction in assistance is required. 5. Five Year Rule. MN Statute 469.1763 subdivision 3 requires that, within five years from certification date, funds must have been expended or obligated for projects within the TIF district. The State Legislature amended the five year rule to increase it to ten years for districts that were certified on or after June 30, 2003 and before April 20, 2009. The five-year rule extension timeframe has passed for Wolfe Lake, Ellipse, Aquila and Elmwood Village (original area). However, the following TIF districts meet this requirement and should be tracked to avoid a lost opportunity for new projects within those district’s boundaries. Elmwood Village - Modified Area2/21/2016Highway 7 Corporate Center7/17/2016West End7/9/2018Hardcoat4/27/2016Eliot Park7/16/2018District 5 Year Deadline 6. Six Year Rule. MN Statute 469.1763 subdivision 4 requires that beginning in year 6 of the district, the City must utilize 75% of the tax increment generated to pay obligations. We recommend completing a year six rule analysis for the Ellipse TIF District to determine if it District can be decertified sooner that 2022 when it is anticipated that the E2 Note will be paid in full (since TIF Notes A and B will be paid off by 2020). 7. Interfund Loan for Elmwood. The 2001 Legislature made several changes to the process for establishing an interfund loan. The City should continue its practice of approving interfund loan resolutions and setting amortization schedules each time funds for TIF projects are borrowed from City or EDA funds. We recommend updating and increasing the Interfund Loan resolution for the Elmwood TIF district from $____ to $____ to cover the additional funds anticipated within the District for use on the identified public improvements. 8. Excess Increment. Excess increment is a new law which impacts the ability to use increment above any outstanding budgeted or actual obligations. Excess increment calculations are required each year by the OSA in their reporting forms. Based upon the 2014 TIF reports, no districts show an excess increment issue. However, total budgets should continue to be monitored carefully to avoid excess increment. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 17
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 17 Tax Increment Financing Districts Victoria Ponds Description: Victoria Ponds TIF District (County #1303) is a redevelopment district established on April 1, 1996 and is located within Redevelopment Project No. 1. Originally, the district encompassed four parcels of land and was established to facilitate the construction of 74 owner occupied townhomes. The first 10% of annual increment is retained by the City’s EDA for administrative and legal pooling costs. The remaining 90% of increment is utilized for payment on the $760,000 PAYGO note with SVK Development. This note has been paid in full. Increment not used for this agreement was used to repay a $700,000 interfund loan for a portion of the costs associated with Hutchinson Spur Trail, which has been paid in full. Excess increment was returned to Hennepin County in 2008 in order to be able to pool future increments. The City pooled $410,715 from this District for the Erv’s Garage/Lake Street Office Building LLC and paid this amount in full in July, 2008. In 2012, $525,000 was used for the CAP program ($500,000 for Hardcoat and $25,000 for CAR Properties LLC). These funds were spent under the JOBS Bill authorized by the legislature in 2009 and extended in the 2010 legislative session. Use of these dollars under the special legislative authority are exempt from the standard pooling limitations of the District. The City also created an economic development TIF district under the JOBS Bill for Hardcoat, with the increment that is generated going to repay an interfund loan to this District. In 2013 the City modified the TIF district to authorize the use of approximately $490,000 in legal pooling funds to finance public improvements which consist of the installation of a traffic signal at the intersection of 36th Street and Xenwood Avenue and reconstruction of the intersection and traffic signal at 36th Street and Wooddale Avenue. This District was decertified for pay 2014. There is currently a $620,000 ending fund balance, of which the City can retain approximately $260,000 for legal pooling. To date a total of $710,569 has been returned to the County for redistribution to the City, County and School District. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 18
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 18 Adopted…………………………. 04/01/1996 Requested Date………………….. 06/19/1996 Certified Date…………………… 06/28/1996 First Increment…………………… 07/1998 Decertification……........................ 11/18/2013 Modifications………………….… 04/07/2008 07/03/2013 Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from outside (A election) the district. Frozen Tax Rate: 140.1150% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There was one obligation for this district as follows: $760,000 PAYGO Note at 8.5% interest – This Note was issued on November 20, 1996 to SVK Development and was paid in full on August 1, 2013. Former PID # New PID #New Use07-117-21-44-0103 07-117-21-41-0072, 07-117-21-41-0074 thru 07-117-21-41-010708-117-21-32-005007-117-21-44-010318-117-21-12-000508-117-21-32-0054 thru 08-117-21-32-0069, 08-117-21-32-0071, 08-117-21-32-0074 thru 08-117-21-32-010018-117-21-31-000118-117-21-12-0048 thru 18-117-21-12-005618-117-21-13-0088 thru 18-117-21-13-009018-117-21-31-006318-117-21-34-002118-117-21-34-0030 thru 18-117-21-34-003274 Town HomesStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 19
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 19 Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. Victoria Ponds met the requirement when the Development Agreement with SVK Development Inc. was signed and a Tax Increment Revenue Note was issued on November 20, 1996. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. Victoria Ponds Four Year Rule was June 2000 and was met because qualifying activities happened prior to this date. Five Year Rule: At least 75% of tax increment revenues generated within Victoria Ponds district must be used to pay for qualified costs within the district. The Five Year rule timeline has passed, which was June 2001. As of December 31, 2014, a total of $935,715 has been used outside the district. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. This timeline has passed for Victoria Ponds, which was June 2001. Recommendations: 1. Use of Legal Pooling Funds. It is estimated that there will be approximately $260,000 available for legal pooling. We recommend that the City develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned either when the district expires or when the obligation is paid. 2. Fund Balance. The City should return the non-legal pooling dollars of approximately $360,000 to the County for redistribution to the City, County and School District. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 20
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 20 City of St. Louis ParkVictoria Ponds TIF DistrictBasic AssumptionsOption A District: 1303Inflation Rate 0.00%Assumes Last Increment In 2013 ExpectedBaseTotalTax Rate2023 Legal Maximum20046,251 284,094 120.9420%Frozen rate 140.12%20056,251 367,427 114.2710%20066,251 373,187 107.2660%20076,251 389,343 107.1000%20086,251 393,840 103.0550%20096,251 384,561 107.8190%20106,251 381,976 112.2210%20116,251 371,625 121.8240%20126,251 365,198 130.7480%20136,147 336,856 133.1340%20146,147 339,712 138.0900%Cash Flow Projections0.00% 10.00%New Tax Fiscal Tax Invest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDevelopmentCapturedRateYearIncrementMVHCOtherIncomeServiceExpenseExpensesBalance12.5 8/1 2010 6,251 381,976 - 375,725 112.2210%13 2/1 20112010 414,795 5,132 484 151,598 3,956 - 356,284 13.5 8/1 2011 6,251 371,625 - 365,374 121.8240%14 2/1 20122011 439,610 5,773 7,529 151,598 4,367 653,231 14.5 8/1 2012 6,251 365,198 - 358,947 130.7480%15 2/1 20132012 471,399 2,068 151,598 2,683 525,000 447,417 15.5 8/1 2013 6,147 336,856 - 330,709 133.1340%16 2/1 20142013 438,908 1,267 124,683 7,924 253,666 501,319 16.5 8/1 2014 6,147 339,712 - 333,565 138.0900%17 2/1 20152014 460,668 115,000 4,094 2,553 456,903 621,625 17.5 8/1 2015 - - - - 0.0000%18 2/1 20162015(1,668) 872 619,085 Total4,570,11465,742 1,498,565 137,824 2,471,223619,085Tax Capacity Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 21
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 21 Park Center Housing Description: Park Center TIF District (County #1304) is a housing district established on October 7, 1996 and is located within the Redevelopment Project No. 1. Originally, the district encompassed a portion of one parcel of land that was originally in the Excelsior Boulevard district. It was created to facilitate the development of 45 units of senior assisted living rental housing. This district was modified more recently to include additional parcels (which were replatted into one parcel) to allow for the construction of an additional 45 units of senior assisted living. Legislative change in 2001 eliminated the state aid penalty for this district. Increment was used to repay a $500,000 interfund loan for the Park Shores Assisted Living Project, which was paid off on September 30, 2003. On February 1, 2011 $500,000 was transferred out of the District to repay the GO Louisiana Court Bonds that were refinanced. With the Park Shores interfund loan being repaid, there is ample increment generated on an annual basis to utilize for other affordable housing initiatives within the constraints of the TIF Act. An additional $110,000 was used for affordable housing in 2014, bringing the total to $660,000. Adopted…………………………. 10/07/1996 Requested Date………………….. 12/19/1996 Certified Date………………….... 05/19/1997 First Increment……………………… 07/1998 Anticipated Decertification…….... 12/31/2023 Modifications………………….… 09/21/1999 01/16/2007 Former and Current PID Numbers: Former PID # New PID #New Use06-028-24-33-001706-028-24-33-002006-028-24-33-0022Park Shores Assisted LivingStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 22
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 22 Fiscal Disparities Election: The City elected to calculate fiscal disparities from outside (A election) the district. Frozen Tax Rate: 126.2470% Allowable Uses: MN Statute 469.176 subd. 4d specifies the activities on which tax increment from a housing district may be spent. In general, tax increment must be spent on housing projects meeting the income guidelines, public improvements directly related to housing projects and administrative expenses. Obligations: None. Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Park Center Housing District met the requirement when the City issued an interfund loan from the Development Fund for the Park Shores Assisted Living project. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The Park Center Housing Four Year Rule was May 2001 and was met because qualifying activities happened prior to this date. Five Year Rule: At least 80% of tax increment revenues generated within Park Center Housing must be used to pay for qualified costs within the district. However, pursuant to MN Statute 469.1763 subd. 2 (b), activities for affordable housing projects spent in the project area is considered an activity within the district. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. This timeline has passed for Park Center which was May 2002. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 23
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 23 Compliance Requirements: Income limitations are required to be monitored on an on-going basis for a Housing District. The Authority is required to substantiate that the applicable income limitations and rent restrictions are being met on an annual basis for rental. The compliance must be completed regardless of whether the project receives tax credits or not, pursuant to 469.174 sub 11. For both facilities, they have been submitting the required documentation on an annual basis and have continued to meet the requirement that 20% of the units are affordable to persons at or below 50% of the area median income. Recommendations: 1. Use of Increment. As of December 31, 2014, this District had a fund balance of approximately $847,200, and continues to generate approximately $125,000 annually. This increment may be used to pay eligible costs for “housing projects” as defined by MS 469.174, Subd. 11, located anywhere within the City limits. A housing project is a rental or owner-occupied housing development intended for occupancy by low and moderate income families. The income guidelines are defined in MS 469.1761 as follows: Rental Housing: 20% of the units occupied by families at 50% of median income (20/50) or 40% of the units occupied by families at 60% of median income (40/60). Owner Occupied: Assistance to homeowner’s with an income at or below 100% of the median income for a family of two or less or 115% of the median income for a family of three or more. Typically TIF is utilized for capital expenditures, but may be used for non-capital expenditures on a limited basis. Examples of potential rental housing projects would include: 1. New affordable rental housing as part of redevelopment (20/50 or 40/60 election) 2. Renovation of an existing rental housing development (20/50 or 40/60 election) 3. Providing subsidy to an existing project that is earmarked for additional affordability (20/50 or 40/60 election) Examples of potential owner-occupied projects would include: 1. Site acquisition and demolition for infill lots that will be sold for new housing construction 2. Acquisition of foreclosed homes for resale to income qualified buyers 3. Rehabilitation loans for home improvements (including HIA owners) 4. Second mortgages to qualified home buyers Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 24
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 24 In order for the City to continue to utilize these funds for housing projects, the development is required to continue to meet income guidelines and report them annually to the City. There were three possible tenant income requirements for this rental housing: (i) 20% of the units affordable to persons at or below 50% of the AMI; (ii) 40% of the units affordable to persons at or below 60% of the AMI; or (iii) 50% of the units affordable to persons at or below 80% of the AMI. The Development Agreement did not specify which of these requirements must be met. This means that the Developer has some flexibility as to income requirements, but must meet at least one of these income requirements on an annual basis for the duration of the TIF District. The City needs to annually monitor the income verification to assure that one of the above referenced requirements is met. If the income requirements are not met on any given year, then the City will need to return that year’s increment to the County for redistribution. 2. Plan for Use of Increment. The City has determined to transfer annual TIF to its housing development account to fund income qualified housing programs. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 25
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 25 City of St. Louis ParkPark Center TIF DistrictBasic AssumptionsOption A District: 1304Inflation Rate 0.00%Assumes Last Increment In 2023 Legal MaximumBaseTotalTax RateFrozen Rate126.24720048,360 121,320 120.9420%20118,360 94,413 121.8240%20128,360 94,413 130.7480%20138,360 94,413 133.1340%20148,360 102,375 138.0900%20158,360 108,063 130.0480%Cash Flow Projections0.00%10.00%NewTax Fiscal Tax OtherInvest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDevelopmentCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance14.5 8/1 2012 8,360 94,413 - 86,053 126.2470%15 2/1 20132012 108,249 450,000 224 1,832 1,232,481 15.5 8/1 2013 8,360 94,413 - 86,053 126.2470%16 2/1 20142013 108,248 3,432 3,915 500,000 840,246 16.5 8/1 2014 8,360 102,375 - 94,015 126.2470%17 2/1 20152014 118,264 987 2,265 110,000 847,232 17.5 8/1 2015 8,360 108,063 - 99,703 126.2470%18 2/1 20162015 125,872 - 12,587 125,800 834,717 18.5 8/1 2016 8,360 108,063 - 99,703 126.2470%19 2/1 20172016 125,872 - 12,587 125,800 822,202 19.5 8/1 2017 8,360 108,063 - 99,703 126.2470%20 2/1 20182017 125,872 - 12,587 125,800 809,686 20.5 8/1 2018 8,360 108,063 - 99,703 126.2470%21 2/1 20192018 125,872 - 12,587 125,800 797,171 21.5 8/1 2019 8,360 108,063 - 99,703 126.2470%22 2/1 20202019 125,872 - 12,587 125,800 784,656 22.5 8/1 2020 8,360 108,063 - 99,703 126.2470%23 2/1 20212020125,872 - 12,587 125,800 772,141 23.5 8/1 2021 8,360 108,063 - 99,703 126.2470%24 2/1 20222021 125,872 - 12,587 125,800 759,626 24.5 8/1 2022 8,360 108,063 - 99,703 126.2470%25 2/1 20232022 125,872 - 12,587 125,800 747,111 25.5 8/1 2023 8,360 108,063 - 99,703 126.2470%26 2/1 20242023 125,872 - 12,587 125,800 734,595 Total2,421,737118,6820 170,852 2,323,300734,595Tax Capacity Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 26
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 26 Zarthan Avenue/16th Street Description: Zarthan Avenue/16th Street TIF District (County #1305 and #1306) is a redevelopment district established on December 20, 1999 and located within Redevelopment Project No. 1. Originally, the district encompassed twelve parcels of land and was created to facilitate the development of two hotels and 86 townhome units just south I-394. The EDA has pledged tax increment revenues from this district to three PAYGO notes, which are all held by CSM. The property tax reform of 2001 hit this development particularly hard. Currently, tax increment income is less than the annual interest payments on the notes. The notes contain pledges from three properties. The Rottlund note covers 86 owner-occupied townhomes. These tax capacities dropped by 25% back in 2001. Due to the reallocation of the market value homestead credit to market value homestead exclusion in 2011, the tax capacities dropped. The remaining two notes are supported by increments from two hotels. The tax-capacities on these properties dropped by 40% in 2001, but the actual tax savings was significantly less than that amount. Assuming no change in the local tax rate, the larger of the two hotels would have seen a property tax savings of $115,000 per year but the new statewide property tax substituted a new tax for $75,000 of the savings. The state property tax is not captured by TIF and is therefore a net loss to the note holder. CSM had approached the City after the 2001 legislative changes asking for future consideration through several potential actions such as a change in the interest rate on the notes, the extension of the term of the district, pooling among the notes, a change in the fiscal disparities election in the district, lifting of the frozen tax rate, and/or pooling from other districts. No action was taken on that request. In 2014, the two (2) hotels were sold to Garrison Investment Group of New York and the TIF notes were transferred to the new owners. Adopted………………………. 12/20/1999 Requested Date……………….. 01/28/2000 Certified Date………………… 05/09/2000 First Increment………………… 07/2001 Anticipated Decertification…... 12/31/2022 Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 27
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 27 Former and Current PID Numbers: Former PID # New PID #New Use130504-117-21-32-000804-117-21-32-0094Rottlund Master Parcel04-117-21-32-006604-117-21-32-0088Spring Hill Suites04-117-21-32-0102 thru 013304-117-21-32-0168 thru 018304-117-21-32-0102 thru 013304-117-21-32-0168 thru 018304-117-21-32-0088Spring Hill Suites04-117-21-32-0089Town Place Suites130604-117-21-32-000904-117-21-32-001004-117-21-32-001104-117-21-32-001204-117-21-32-001304-117-21-32-001404-117-21-32-001504-117-21-32-001604-117-21-32-0150 thru 167 and 04-117-21-32-0185 thru 20438 Rottlund Town Homes48 Rottlund Town Homes04-117-21-32-007904-117-21-32-0078 Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: The parcels in this district cross over two watershed district. The county has assigned two numbers to correspond with the different watershed rates. 1305 - 143.7690% 1306 - 144.2940% Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 28
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 28 Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There are three (3) PAYGO TIF Note obligations for this district as follows: Note #1: CSM Hospitality (Town Place Suites) in the amount of $1,101,362 at 8.0% and is payable from 8/1/2002 to 2/1/2022 Note #2: CSM Hospitality (Spring Hill Suites) in the amount of $1,448,088 at 8.0% and is payable from 8/1/2002 to 2/1/2022 Note #3: The Rottlund Company in the amount of $1,395,547 at 8.0% and is payable from 8/1/2003 to 2/1/2023 Due to legislative changes to tax rates in 2001 and reallocation of the market value homestead credit to a market value homestead exclusion in 2011, it is anticipated that payments will be made on these notes through the duration stated above and that there will not be adequate TIF to pay off the obligations. Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Zarthan district met the requirement when the City authorized the issuance of the notes in 2000. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. The four year deadline was May 2004 and was met because qualifying activities happened prior to this date. Five Year Rule: At least 75% of tax increment revenues must be used to pay for qualified costs within the district. Statute further specifies that within five years, tax increment must actually be paid for activities, bonds issued, contracts entered into in order for revenues to be considered to have been spent. The five year deadline was May 2005. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 29
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 29 Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. This district may not be enlarged after May 2005. Recommendations: 1. Pooling Analysis and Use of Funds. Currently there is approximately $370,000 in the District for use on redevelopment projects, which represents estimated cash balances through August 2015 after the obligation payments are made. It is estimated that there will be approximately $670,000 available for use when the obligations are paid in 2022. We recommend that the City update its pooling analysis and develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned either when the district expires or when the obligation is paid. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 30
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 30 City of St. Louis ParkZarthan/16th Avenue TIF DistrictBasic AssumptionsOption B District: 1305/1306Inflation Rate 0.00%Assumes Last Increment In 2022 Expected TermBaseTotalTax Rate2026 Legal Maximum200474,615 396,142 120.9420%Frozen rate 143.769200574,615 427,968 113.3370%201174,615 425,317 120.8830%201274,615 424,452 130.7480%201372,212 420,194 132.2090%201472,212 431,949 137.0600%201572,212 447,959 129.0860%Cash Flow Projections0.00% 10.00%Fiscal Tax Fiscal Tax OtherInvest CSM CSM CSMAdmin. EndTIF Yr,MonthYearBaseTotalDisparityCapturedRateYearIncrementRevenueIncomeNote 1Note 2Note 3ExpenseBalance11.5 8/1 2012 74,615 424,452 (61,303) 288,534 130.7480%12 2/1 20132012 373,768 2,866 68,977 87,934 169,463 3,869 440,506 12.5 8/1 2013 72,212 420,194 (59,813) 288,169 132.2090%13 2/1 20142013 386,463 426 74,681 95,436 168,300 6,341 482,638 13.5 8/1 2014 72,212 431,949 (60,278) 299,459 137.0600%14 2/1 20152014 409,397 3,001 79,254 98,893 175,433 5,126 536,330 14.5 8/1 2015 72,212 447,959 (63,538) 312,209 129.0860%15 2/1 20162015 403,018 - 80,999 98,600 181,663 40,302 537,784 15.5 8/1 2016 72,212 447,959 (63,538) 312,209 129.0860%16 2/1 20172016 403,018 - 77,148 93,913 188,630 40,302 540,809 16.5 8/1 2017 72,212 447,959 (63,538) 312,209 129.0860%17 2/1 20182017 403,018 - 77,148 93,913 188,630 40,302 543,834 17.5 8/1 2018 72,212 447,959 (63,538) 312,209 129.0860%18 2/1 20192018 403,018 - 77,148 93,913 188,630 40,302 546,860 18.5 8/1 2019 72,212 447,959 (63,538) 312,209 129.0860%19 2/1 20202019 403,018 - 77,148 93,913 188,630 40,302 549,885 19.5 8/1 2020 72,212 447,959 (63,538) 312,209 129.0860%20 2/1 20212020 403,018 - 77,148 93,913 188,630 40,302 552,910 20.5 8/1 2021 72,212 447,959 (63,538) 312,209 129.0860%21 2/1 20222021 403,018 - 77,148 93,913 188,630 40,302 555,935 21.5 8/1 2022 72,212 447,959 (63,538) 312,209 129.0860%22 2/1 20232022 403,018 - 38,574 46,956 160,975 40,302 672,146 22.5 8/1 2023 72,212 447,959 (63,538) 312,209 129.0860%23 2/1 20242023- - - 672,146 23.5 8/1 2024 72,212 447,959 (63,538) 312,209 129.0860%24 2/1 20252024- - 672,146 24.5 8/1 2025 72,212 447,959 (63,538) 312,209 129.0860%25 2/1 20262025 - - - 672,146 25.5 8/1 2026 72,212 447,959 (63,538) 312,209 129.0860%26 2/1 20272026 - - - 672,146 Total7,370,75125,074 1,417,000 1,779,869 3,293,442 461,484 672,146Tax CapacityStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 31
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 31 Maximum amount 1,101,362.00$ Interest Rate 8.00%PID 04-117-21-32-0089Note Issue Date 10/25/2000Final Payment2/1/2022Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDateInterest Due Available 89.75%PaidNote Balance1,101,362.00$ 2/1/200123,985.22 - - 1,125,347.22$ 8/1/200145,263.97 - - 1,170,611.18$ 2/1/200247,864.99 - - 1,218,476.17$ 8/1/200249,009.82 250.50 224.82 224.82 1,218,476.17$ 2/1/200349,822.14 81.40 73.06 297.88 1,218,476.17$ 8/1/200349,009.82 38,221.42 34,303.72 34,601.60 1,218,476.17$ 2/1/200449,822.14 38,221.42 34,303.72 68,905.32 1,218,476.17$ 8/1/200449,280.59 39,572.30 35,516.13 104,421.46 1,218,476.17$ 2/1/200549,822.14 39,572.30 35,516.13 139,937.59 1,218,476.17$ 8/1/200549,009.82 38,532.90 34,583.28 174,520.87 1,218,476.17$ 2/1/200649,822.14 38,532.90 34,583.28 209,104.15 1,218,476.17$ 8/1/200649,009.82 39,012.16 35,013.41 244,117.56 1,218,476.17$ 2/1/200749,822.14 39,012.16 35,013.41 279,130.97 1,218,476.17$ 8/1/200749,009.82 43,747.32 39,263.22 318,394.19 1,218,476.17$ 2/1/200849,822.14 43,747.32 39,263.22 357,657.41 1,218,476.17$ 8/1/200849,280.59 44,037.92 39,524.03 397,181.45 1,218,476.17$ 2/1/200949,822.14 44,037.91 39,524.02 436,705.47 1,218,476.17$ 8/1/200949,009.82 40,554.61 36,397.76 473,103.23 1,218,476.17$ 2/1/201049,822.14 40,554.61 36,397.76 509,500.99 1,218,476.17$ 8/1/201049,009.82 39,053.54 35,050.55 544,551.54 1,218,476.17$ 2/1/201149,822.14 39,053.54 35,050.55 579,602.10 1,218,476.17$ 8/1/201149,009.82 35,680.39 32,023.15 611,625.25 1,218,476.17$ 2/1/201249,822.14 35,680.39 32,023.15 643,648.40 1,218,476.17$ 8/1/201249,280.59 41,174.33 36,953.96 680,602.35 1,218,476.17$ 2/1/201349,822.14 41,174.33 36,629.70 717,232.05 1,218,476.17$ 8/1/201349,009.82 42,396.66 38,051.01 755,283.06 1,218,476.17$ 2/1/201449,822.14 41,687.88 37,414.87 792,697.93 1,218,476.17$ 8/1/201449,009.82 46,617.89 41,839.56 834,537.49 1,218,476.17$ 2/1/201549,822.14 46,617.89 41,839.56 876,377.05 1,218,476.17$ 8/1/2015 49,009.82 42,979.57 39,159.05 915,536.10 1,218,476.17$ 2/1/201649,822.14 42,979.57 38,574.16 954,110.27 1,218,476.17$ 8/1/201649,280.59 42,979.57 38,574.16 992,684.43 1,218,476.17$ 2/1/201749,822.14 42,979.57 38,574.16 1,031,258.59 1,218,476.17$ 8/1/201749,009.82 42,979.57 38,574.16 1,069,832.76 1,218,476.17$ 2/1/201849,822.14 42,979.57 38,574.16 1,108,406.92 1,218,476.17$ 8/1/201849,009.82 42,979.57 38,574.16 1,146,981.09 1,218,476.17$ 2/1/201949,822.14 42,979.57 38,574.16 1,185,555.25 1,218,476.17$ 8/1/201949,009.82 42,979.57 38,574.16 1,224,129.42 1,218,476.17$ 2/1/202049,822.14 42,979.57 38,574.16 1,262,703.58 1,218,476.17$ 8/1/202049,280.59 42,979.57 38,574.16 1,301,277.75 1,218,476.17$ 2/1/202149,822.14 42,979.57 38,574.16 1,339,851.91 1,218,476.17$ 8/1/202149,009.82 42,979.57 38,574.16 1,378,426.07 1,218,476.17$ 2/1/202249,822.14 42,979.57 38,574.16 1,417,000.24 1,218,476.17$ TOTAL2,071,121.94 1,578,539.95 1,417,000.24 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Rottlund Note 1CSM - Town Place Suites Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 32
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 32 Maximum amount 1,448,088.00$ Interest Rate 8.00%PID 04-117-21-32-0088Note Issue Date 10/25/2000Final Payment Date 2/1/2022Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDateInterest Due Available 89.75%PaidNote Balance1,448,088.00$ 2/1/200131,536.14 - - 1,479,624.14$ 8/1/200159,513.77 - - 1,539,137.91$ 2/1/200262,933.64 - - 1,602,071.55$ 8/1/200264,438.88 - - 1,666,510.43$ 2/1/200365,506.93 - - 1,732,017.35$ 8/1/200369,665.59 50,830.11 45,620.02 45,620.02 1,750,836.21$ 2/1/200471,589.75 50,830.10 45,620.02 91,240.04 1,750,836.21$ 8/1/200470,811.60 51,958.61 46,632.86 137,872.89 1,750,836.21$ 2/1/200571,589.75 51,958.61 46,632.86 184,505.75 1,750,836.21$ 8/1/200570,422.52 50,204.53 45,058.57 229,564.32 1,750,836.21$ 2/1/200671,589.75 50,204.54 45,058.58 274,622.89 1,750,836.21$ 8/1/200670,422.52 50,011.01 44,884.88 319,507.77 1,750,836.21$ 2/1/200771,589.75 50,011.02 44,884.89 364,392.66 1,750,836.21$ 8/1/200770,422.52 56,109.04 50,357.86 414,750.52 1,750,836.21$ 2/1/200871,589.75 56,109.04 50,357.86 465,108.39 1,750,836.21$ 8/1/200870,811.60 56,434.67 50,650.12 515,758.50 1,750,836.21$ 2/1/200971,589.75 56,434.66 50,650.11 566,408.61 1,750,836.21$ 8/1/200970,422.52 51,499.90 46,221.16 612,629.77 1,750,836.21$ 2/1/201071,589.75 51,499.90 46,221.16 658,850.93 1,750,836.21$ 8/1/201070,422.52 49,555.54 44,476.10 703,327.03 1,750,836.21$ 2/1/201171,589.75 49,555.54 44,476.10 747,803.13 1,750,836.21$ 8/1/201170,422.52 45,426.29 40,770.09 788,573.22 1,750,836.21$ 2/1/201271,589.75 45,426.29 40,770.09 829,343.31 1,750,836.21$ 8/1/201270,811.60 52,549.92 47,163.56 876,506.87 1,750,836.21$ 2/1/201371,589.75 52,549.92 46,839.30 923,346.17 1,750,836.21$ 8/1/201370,422.52 54,147.12 48,597.04 971,943.20 1,750,836.21$ 2/1/201471,589.75 53,438.33 47,960.90 1,019,904.11 1,750,836.21$ 8/1/201470,422.52 56,748.39 50,931.68 1,070,835.78 1,750,836.21$ 2/1/201571,589.75 56,748.39 50,931.68 1,121,767.46 1,750,836.21$ 8/1/2015 70,422.52 52,319.08 47,668.37 1,169,435.83 1,750,836.21$ 2/1/201671,589.75 52,319.08 46,956.38 1,216,392.20 1,750,836.21$ 8/1/201670,811.60 52,319.08 46,956.38 1,263,348.58 1,750,836.21$ 2/1/201771,589.75 52,319.08 46,956.38 1,310,304.96 1,750,836.21$ 8/1/201770,422.52 52,319.08 46,956.38 1,357,261.33 1,750,836.21$ 2/1/201871,589.75 52,319.08 46,956.38 1,404,217.71 1,750,836.21$ 8/1/201870,422.52 52,319.08 46,956.38 1,451,174.08 1,750,836.21$ 2/1/201971,589.75 52,319.08 46,956.38 1,498,130.46 1,750,836.21$ 8/1/201970,422.52 52,319.08 46,956.38 1,545,086.84 1,750,836.21$ 2/1/202071,589.75 52,319.08 46,956.38 1,592,043.21 1,750,836.21$ 8/1/202070,811.60 52,319.08 46,956.38 1,638,999.59 1,750,836.21$ 2/1/202171,589.75 52,319.08 46,956.38 1,685,955.96 1,750,836.21$ 8/1/202170,422.52 52,319.08 46,956.38 1,732,912.34 1,750,836.21$ 2/1/202271,589.75 52,319.08 46,956.38 1,779,868.72 1,750,836.21$ TOTAL2,951,814.78 1,982,708.62 1,779,868.72 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Rottlund Note 2CSM - Spring Hill Suites Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 33
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 33 Maximum amount 1,395,547.00$ Interest Rate 8.00%Note Issue Date 11/6/2000Last Payment 2/1/2023Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDate Interest Due Available 89.75% Paid Note Balance1,395,547.00$ 2/1/2001 26,670.45 - - - 1,422,217.45$ 8/1/2001 57,204.75 - - - 1,479,422.20$ 2/1/2002 60,491.93 - - - 1,539,914.13$ 8/1/2002 61,938.77 - - - 1,601,852.90$ 2/1/2003 65,497.99 - - - 1,667,350.88$ 8/1/2003 67,064.56 27,594.83 24,766.36 24,766.36 1,709,649.08$ 2/1/2004 67,163.46 28,542.43 25,616.83 50,383.19 1,751,195.71$ 8/1/2004 65,397.36 82,498.75 74,042.63 124,425.82 1,742,550.44$ 1/25/2005 61,031.26 718.79 645.11 125,070.93 1,802,936.59$ 2/1/2005 2,056.37 81,365.77 73,025.78 198,096.71 1,731,967.18$ 8/1/2005 59,096.67 82,514.75 74,702.10 272,798.81 1,716,361.75$ 2/2/2006 57,021.68 92,166.77 82,719.67 355,518.48 1,690,663.76$ 8/1/2006 52,764.81 85,454.01 76,694.98 432,213.46 1,666,733.60$ 2/2/2007 50,503.40 90,591.69 81,306.04 513,519.50 1,635,930.95$ 8/1/2007 46,409.66 94,710.03 85,002.25 598,521.75 1,597,338.36$ 2/2/2008 43,703.24 97,981.73 87,938.60 686,460.35 1,553,103.00$ 8/1/200839,671.57 94,093.64 84,449.04 770,909.40 1,508,325.53$ 2/1/200936,654.50 97,773.07 87,751.33 858,660.73 1,457,228.69$ 8/1/200958,289.15 98,295.05 88,219.81 946,880.53 1,427,298.03$ 2/1/201058,360.63 98,295.05 88,219.81 1,035,100.34 1,397,438.86$ 8/1/201056,208.10 105,426.67 94,620.43 1,129,720.77 1,359,026.52$ 2/1/201155,569.08 100,915.94 90,572.05 1,220,292.83 1,324,023.55$ 8/1/201153,255.17 100,467.26 85,535.00 1,305,427.19 1,291,743.72$ 2/1/201252,834.35 91,896.12 83,039.44 1,387,903.96 1,261,538.63$ 8/1/201251,022.23 96,293.48 86,423.33 1,474,327.29 1,226,137.53$ 2/1/201350,135.40 88,800.37 79,698.33 1,554,025.62 1,196,574.60$ 8/1/201348,128.89 98,720.07 88,601.26 1,642,626.88 1,156,102.23$ 2/1/201447,025.64 92,286.17 82,826.84 1,725,453.73 1,120,301.02$ 8/1/201445,061.00 100,512.26 92,606.48 1,818,060.20 1,072,755.54$ 2/1/201543,863.78 97,323.79 87,348.08 1,905,408.29 1,029,271.24$ 8/1/2015 41,399.58 105,086.37 94,315.02 1,999,723.30 976,355.80$ 2/1/201639,922.10 105,086.37 94,315.02 2,094,038.32 921,962.89$ 8/1/201637,288.28 105,086.37 94,315.02 2,188,353.34 864,936.15$ 2/1/201735,366.28 105,086.37 94,315.02 2,282,668.35 805,987.41$ 8/1/201732,418.60 105,086.37 94,315.02 2,376,983.37 744,091.00$ 2/1/201830,425.05 105,086.37 94,315.02 2,471,298.39 680,201.03$ 8/1/201827,359.20 105,086.37 94,315.02 2,565,613.41 613,245.21$ 2/1/201925,074.92 105,086.37 94,315.02 2,659,928.42 544,005.11$ 8/1/201921,881.09 105,086.37 94,315.02 2,754,243.44 471,571.19$ 2/1/202019,282.02 105,086.37 94,315.02 2,848,558.46 396,538.19$ 8/1/202016,037.77 105,086.37 94,315.02 2,942,873.48 318,260.94$ 2/1/202113,013.34 105,086.37 94,315.02 3,037,188.49 236,959.26$ 8/1/20219,531.03 105,086.37 94,315.02 3,131,503.51 152,175.27$ 2/1/20226,222.28 105,086.37 94,315.02 3,225,818.53 64,082.53$ 8/1/20222,577.54 105,086.37 66,660.07 3,292,478.60 0.00$ TOTAL1,871,224.45 3,701,534.04 3,293,441.90 Economic Development AuthorityPrincipal Ledger - Rottlund Note 3Rottlund - 86 Town Homes/Condos Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 34
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 34 Mill City Description: Mill City TIF District (County #1307) is a redevelopment district established on March 20, 2000, and is located within the Redevelopment Project No. 1. Originally, the district was established with two (2) parcels to facilitate the redevelopment of a polluted site and construction of a multi-family rental housing development. Rental housing class rates were reduced dramatically by the 2001 legislature from 2.4% to 1.25%. Projected increment when the note was sized was expected to be $394,188 per year beginning in 2003, which is substantially less than the current annual tax increment. However, the drop in increment also means a drop in taxes paid by the owner. Therefore, the effect upon the rental housing development should be neutral for the owner because rental housing pays no state property tax (tax obligated for the State’s education system). In 2011, The City utilized $70,000 from this district to pay for project costs for the Bikemasters project through the City’s CAP program. These funds were spent under the JOBS Bill authorized by the legislature in 2009 and extended in the 2010 legislative session. Use of these dollars under the special legislative authority are exempt from the standard pooling limitations of the District. In 2015 the property was sold. At that time, the TIF Note was reviewed to determine if the following conditions existed: (1) the property was assigned an assessor's market value as of January 2, 2001 that exceeds the market value as of January 2, 2000; and (2) there is any unpaid principal or accrued interest on this Note after the payment of available Tax Increment on February 1, 2022. Based upon the analysis that was completed, it was determined that the final TIF Note payment would be February 1, 2023. Even with the extension of payments, it is anticipated that the TIF Note will not be paid in full. Adopted…………………..….…. 03/20/2000 Requested Date…………….….... 06/08/2000 Certified Date……………………06/19/2000 First Increment……..……….…… 07/2001 Anticipated Decertification...……12/31/2022 Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 35
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 35 Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 144.2940% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There is currently one PAYGO Note in this district as follows: $3,431,137 at 8.75% interest. The Note was issued on November 20, 2000 to MSP SLP Apartments, LLC. The note is payable from 94.75% of the increment received on the project. After the 8/1/2015 payment, the current balance is $3,956,058 and the projected final payment is on February 1, 2023. It is expected the Note will not be paid in full due to tax rate compression. Other Development Agreement Compliance: 1. Minimum Assessment Agreement. The minimum market value as of January 2, 2002 shall be $13,400,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Former PID # Former UseNew PID #New Use17-117-21-31-0012 Vacant Land17-117-21-42-0094City Vacant Land17-117-21-34-0082 Mill City Plywood17-117-21-34-0087Mill City ApartmentsStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 36
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 36 Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. Mill City met the requirement when the City approved the Development Agreement with MSP SLP Apartments LLC on April 3, 2000. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The four year deadline was June 2004 and was met because qualifying activities happened prior to this date. Five Year Rule: At least 75% of tax increment revenues generated within the Mill City district must be used to pay for qualified costs within the district. The five year deadline was June 2005. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after June 2005. Recommendations: 1. Pooling Analysis and Use of Funds. Currently there is approximately $88,240 of cash available at August 31, 2015 for projects and it is estimated that there will be approximately $95,000 available at the end of the District. We recommend that the City update its pooling analysis and develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned either when the district expires or when the obligation is paid. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 37
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 37 City of St. Louis ParkMill City TIF DistrictBasic AssumptionsOption B District: 1307Inflation Rate 0.00%Assumes Last Increment In 2022 Expected termBaseTotalTax Rate2026 Legal max term200416,488 229,800 120.9420%Frozen rate 144.294200516,488 223,550 114.2710%200612,924 212,500 107.2660%201212,674 215,000 130.7480%201312,674 250,000 133.1340%201412,674 300,000 138.0900%201512,674 350,000 130.0480%0.00% 5.25%Fiscal Tax Fiscal Tax Other Invest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparitiesCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance11.5 8/1 2012 12,674 215,000 202,326 130.7480%12 2/1 20132012 263,584 570 241,080 3,369 - 183,465 12.5 8/1 2013 12,674 250,000 237,326 133.1340%13 2/1 20142013 314,823 - 274,020 5,857 - 218,410 13.5 8/1 2014 12,674 300,000 287,326 138.0900%14 2/1 20152014 395,339 862 336,439 7,751 - 270,421 14.5 8/1 2015 12,674 350,000 337,326 130.0480%15 2/1 20162015 438,686 - 394,371 23,031 - 291,705 15.5 8/1 2016 12,674 350,000 337,326 130.0480%16 2/1 20172016 438,686 - 414,158 23,031 - 293,201 16.5 8/1 2017 12,674 350,000 337,326 130.0480%17 2/1 20182017 438,686 - 414,158 23,031 - 294,698 17.5 8/1 2018 12,674 350,000 337,326 130.0480%18 2/1 20192018 438,686 - 414,158 23,031 - 296,194 18.5 8/1 2019 12,674 350,000 337,326 130.0480%19 2/1 20202019 438,686 - 414,158 23,031 - 297,690 19.5 8/1 2020 12,674 350,000 337,326 130.0480%20 2/1 20212020 438,686 - 414,158 23,031 - 299,187 20.5 8/1 2021 12,674 350,000 337,326 130.0480%21 2/1 20222021 438,686 - 414,158 23,031 - 300,683 21.5 8/1 2022 12,674 350,000 337,326 130.0480%22 2/1 20232022 438,686 414,158 23,031 302,179 22.5 8/1 2023 12,674 350,000 337,326 130.0480%23 2/1 20242023207,079 - 95,100 23.5 8/1 2024 12,674 350,000 337,326 130.0480%24 2/1 20252024- - 95,100 24.5 8/1 2025 12,674 350,000 337,326 130.0480%25 2/1 20262025 - - - 95,100 25.5 8/1 2026 12,674 350,000 337,326 130.0480%26 2/1 20272026 - - - 95,100 Total6,549,864 6,293 26,193 6,199,764 252,356 76,29395,100Tax Capacity Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 38
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 38 Maximum amount 3,431,137.00$ Interest Rate 8.75%Note Issued Date 11/20/2000Final Payment 2/1/2023Total Tax Tax Increment CumualtiveIncrement Available at Tax IncrementDate Interest Due Available 94.75% Paid Note Balance7/31/2001 - 3,431,137.00$ 8/1/2002 300,224.49 3,026.74 2,867.84 2,867.84 3,728,493.65$ 2/1/2003 163,121.60 3,026.74 2,867.84 5,735.67 3,888,747.41$ 3/3/2003 28,899.25 - - 5,735.67 4,012,626.99$ 8/1/2003 175,552.43 116,456.43 110,342.47 116,078.14 4,012,626.99$ 2/1/2004 175,552.43 116,456.44 110,342.48 226,420.62 4,012,626.99$ 8/1/2004 175,552.43 128,527.49 121,779.80 348,200.41 4,012,626.99$ 12/1/2004 175,552.43 128,527.49 121,779.80 469,980.21 4,012,626.99$ 1/1/2005 - - - 469,980.21 4,012,626.99$ 2/1/2005 175,552.43 - - 469,980.21 4,012,626.99$ 8/1/2005 175,552.43 117,879.53 111,690.85 581,671.06 4,012,626.99$ 2/1/2006 175,552.43 117,876.64 111,688.12 693,359.18 4,012,626.99$ 8/1/2006 175,552.43 106,653.00 101,057.00 794,416.18 4,012,626.99$ 2/1/2007 175,552.43 107,834.00 101,054.00 895,470.18 4,012,626.99$ 8/1/2007 175,552.43 107,834.00 102,172.72 997,642.90 4,012,626.99$ 2/1/2008 175,552.43 106,701.09 102,172.00 1,099,814.90 4,012,626.99$ 8/1/2008175,552.43 106,701.09 100,735.00 1,200,549.90 4,012,626.99$ 2/1/2009175,552.43 106,701.09 100,734.84 1,301,284.74 4,012,626.99$ 8/1/2009175,552.43 111,231.76 105,392.09 1,406,676.83 4,012,626.99$ 2/1/2010175,552.43 111,231.76 105,392.09 1,512,068.92 4,012,626.99$ 8/1/2010175,552.43 115,773.09 109,695.00 1,621,763.92 4,012,626.99$ 2/1/2011175,552.43 115,773.09 109,695.00 1,731,458.92 4,012,626.99$ 8/1/2011175,552.43 122,645.41 116,206.53 1,847,665.45 4,012,626.99$ 2/1/2012175,552.43 122,645.41 116,206.53 1,963,871.98 4,012,626.99$ 8/1/2012175,552.43 131,792.27 124,873.18 2,088,745.16 4,012,626.99$ 2/1/2013175,552.43 131,792.27 124,873.18 2,213,618.34 4,012,626.99$ 8/1/2013175,552.43 157,411.40 149,147.30 2,362,765.64 4,012,626.99$ 2/1/2014175,552.43 157,411.40 149,147.31 2,511,912.95 4,012,626.99$ 8/1/2014175,552.43 197,669.37 187,291.72 2,699,204.67 4,000,887.70$ 2/1/2015175,038.84 197,669.36 187,291.71 2,886,496.39 3,988,634.82$ 8/1/2015174,502.77 218,553.22 207,079.48 3,093,575.87 3,956,058.12$ 2/1/2016173,077.54 218,553.22 207,079.18 3,300,655.05 3,922,056.48$ 8/1/2016171,589.97 218,553.22 207,079.18 3,507,734.23 3,886,567.27$ 2/1/2017170,037.32 218,553.22 207,079.18 3,714,813.41 3,849,525.41$ 8/1/2017168,416.74 218,553.22 207,079.18 3,921,892.59 3,810,862.97$ 2/1/2018166,725.25 218,553.22 207,079.18 4,128,971.77 3,770,509.04$ 8/1/2018164,959.77 218,553.22 207,079.18 4,336,050.95 3,728,389.63$ 2/1/2019163,117.05 218,553.22 207,079.18 4,543,130.13 3,684,427.50$ 8/1/2019161,193.70 218,553.22 207,079.18 4,750,209.30 3,638,542.02$ 2/1/2020159,186.21 218,553.22 207,079.18 4,957,288.48 3,590,649.05$ 8/1/2020157,090.90 218,553.22 207,079.18 5,164,367.66 3,540,660.77$ 2/1/2021154,903.91 218,553.22 207,079.18 5,371,446.84 3,488,485.50$ 8/1/2021152,621.24 218,553.22 207,079.18 5,578,526.02 3,434,027.56$ 2/1/2022150,238.71 218,553.22 207,079.18 5,785,605.20 3,377,187.09$ 8/1/2022147,751.94 218,553.22 207,079.18 5,992,684.38 3,317,859.84$ 2/1/2023145,156.37 218,553.22 207,079.18 6,199,763.56 3,255,937.03$ TOTAL7,461,111.90 6,544,099.93 6,199,763.56 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - MSP SLP Apartments, LLC Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 39
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 39 Park Commons Description: Park Commons TIF District (County #1308) is a redevelopment district established on January 16, 2001 and is located within the Redevelopment Project No 1. Originally, the district encompassed 38 parcels of land, most of which were in the Excelsior Boulevard District and was established to facilitate the construction of mixed use housing and retail facilities. Construction has been completed on all phases and consists of 338 market rate apartments, 306 condominiums and approximately 86,500 sq/ft of commercial space. The EDA entered into a contract with Meridian Properties (TOLD Development) on January 16, 2001 and executed five amendments to it for various items including end uses, timing of construction, transfer of property and remediation issues. Overall the contract delineates PAYGO obligation for the development in an amount not to exceed $18 million at 8.5% interest, over a 22-year period. On July 1, 2003, the EDA issued a PAYGO note in the principal amount of $3.5 Million at 8.5% for the Phase I public improvements in Park Commons East. In addition, three (3) Phase Notes were issued on June 5, 2006 at 8.5% as follows: Phase NE Note for $4,668,633, Phase NW Note for $4,079,105 and Phase E Note for $3,300,715. Each Note is payable with 97% of the TIF generated from the parcels within each phase. In addition, the EDA has an interfund loan of $3,145,046 for other public improvements. The loan is payable from the Park Commons TIF District to the Excelsior Boulevard TIF District, with interest rate at the rate of 4.53% (determined by the City’s financial advisor in accordance with the Contract). The improvements were financed from proceeds of the Series 1997A Bonds, and in accordance with Secti on 7.3(c)(7) of the Contract, retained Available Tax Increment (as defined in the Contract) from the Park Commons TIF District is used to repay the EDA based on a payment schedule determined as if the City had issued new tax increment bonds (the effect of this provision was to create the interfund loan). Expenditure of the Series 1997A Bond proceeds diverted funds that were available for ongoing redevelopment activities in the Project Area. Accordingly, the Authority determined to replenish the funds in the Excelsior Boulevard TIF District by making a loan from the Authority’s Development Fund to the account for the Excelsior Boulevard TIF District. By Resolution No. 07-02 approved January 16, 2007 (the 2007 Interfund Loan Resolution) the Authority approved a transfer of funds in the amount of $2,945,497.40 (representing the unpaid balance of the original interfund loan described in the Contract) from the Development Fund to the Excelsior Boulevard TIF District fund, thereby making those funds immediately available for redevelopment activities until termination of the Excelsior Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 40
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 40 Boulevard TIF District on August 1, 2009. Due to the reallocation of the market value homestead credit to market value homestead exclusion in 2011, the tax capacities dropped for the pay 2012 taxes, thus impacting several of the Notes. Adopted……………………………… 01/16/2001 Requested Date………………….…….03/08/2001 Certified Date………………….……....06/07/2001 First Increment………………………….....07/2002 Decertifies………………………..…… 12/31/2027 Former and Current PID Numbers: PhaseFormer PID # New PID #New Use07-028-24-21-010707-028-24-21-010807-028-24-21-025007-028-24-21-025107-028-24-21-025506-028-24-43-007907-028-24-12-017007-028-24-12-017407-028-24-2-1011606-028-24-34-000806-028-24-34-001806-028-24-34-000906-028-24-34-001906-028-24-34-001006-028-24-34-0022 Wolfe Park07-028-24-21-009807-028-24-21-0257 Center Green Space/Median - City Owned07-028-24-21-010907-028-24-21-011207-028-24-21-011706-028-24-34-000106-028-24-34-001106-028-24-34-001206-028-24-34-001307-028-24-21-050407-028-24-21-0099 07-028-24-21-0510 (formerly part of 7-028-24-21-0503)07-028-24-21-0254 07-028-24-21-0511 (formerly part of 7-028-24-21-0503)06-028-24-34-000206-028-24-34-0024 Outlot - Parking06-028-24-34-000306-028-24-34-000406-028-24-34-000506-028-24-34-000606-028-24-34-000706-028-24-34-0016NE06-028-24-34-0025 thru 06-028-24-34-0265Grand Condominiums at Excelsior06-028-24-34-0267 thru 06-028-24-34-0330Grand Condominiums at Excelsior1A07-028-24-21-0256 Excelsior and Grand Apartment Over Retail1B07-028-24-12-0175Excelsior and Grand Apartment Over RetailCityNWCentral Green SpaceMedian - City Owned 07-028-24-21-0258EDA Vacant Land (next to Bally's) & Part of Princeton Ln07-028-24-21-0261 thru 07-028-24-21-0502Grand Condominiums at ExcelsiorStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 41
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 41 Fiscal Disparities Election: The City elected to calculate fiscal disparities from outside (A election) the district. Frozen Tax Rate: 119.0650% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There is currently five obligations in this district as follows: $3,145,046 Interfund loan at 4.53%. This Loan was used to finance the initial public improvements and has a priority on TIF generated from the District. $3,500,000 PAYGO Note at 8.5% interest for Phase I. This Note was issued on July 1, 2003 and is payable from 97% of the increment generated from the parcels making up the development. $3,300,715 PAYGO Note at 8.5% for Excelsior and Grand Phase E. This Note was issued on June 5, 2006 and is payable from 97% of the increment generated from the parcels making up the development. $4,668,633 PAYGO Note at 8.5% for Excelsior and Grand Phase NE. This Note was issued on June 5, 2006 and is payable from 97% of the increment generated from the parcels making up the development. $4,079,105 PAYGO Note at 8.5% for Excelsior and Grand Phase NW. This Note was issued on June 5, 2006 and is payable from 97% of the increment generated from the parcels making up the development. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 42
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 42 Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. Park Commons met the requirement when the City approved the Development Agreement with Meridian Properties on January 16, 2001. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The four year deadline was June 2005 and was met because qualifying activities happened prior to this date. Five Year Rule: At least 75% of tax increment revenues generated within Park Commons must be used to pay for qualified costs within the district. The five year deadline was June 2006. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after June 2006. Recommendations: 1. Pooling Analysis and Use of Funds. It is estimated that there is approximately $2 million available for pooling when the obligations are paid. We recommend updating the City’s pooling analysis and develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned either when the district expires or when the obligation is paid. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 43
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 43 City of St. Louis ParkPark Commons TIF DistrictBasic AssumptionsOption A District: 1308Inflation Rate 0.00%Assumes Last Increment In 2027 Legal MaximumBaseTotalTax RateFrozen rate119.0650%2004157,578 359,718 120.9420%200536,980 551,777 114.2710%2012115,058 1,507,877 130.7480%2013112,685 1,551,565 133.1340%2014112,685 1,664,909 138.0900%2015112,685 1,869,619 130.0480%Cash Flow Projections3.00%NewTax Fiscal Tax OtherTOLD ExcelsiorExcelsiorExcelsiorExcelsior2004 and 2005Admin.EndTIF Yr,MonthYearBaseTotalDevelopmentCapturedRateYearIncrementRevenueIFL& Grand& Grand-Phase E& Grand-Phase NE& Grand-Phase NWBondsExpenseBalance11.5 8/1 2013 112,685 1,551,565 - 1,438,880 119.0650%12 2/1 20142013 1,701,861 279,317 332,382 242,861 359,432 395,044 15,883 585,610 12.5 8/1 2014 112,685 1,664,909 - 1,552,224 119.0650%13 2/1 20152014 1,863,396 628 279,317 432,867 243,673 366,522 389,290 13,600 724,366 13.5 8/1 2015 112,685 1,869,619 - 1,756,934 119.0650%14 2/1 20162015 2,091,893 279,317 605,378 240,928 382,516 410,119 62,757 835,243 14.5 8/1 2016 112,685 1,869,619 - 1,756,934 119.0650%15 2/1 20172016 2,091,893 279,317 674,752 255,070 440,955 461,256 62,757 753,029 15.5 8/1 2017 112,685 1,869,619 - 1,756,934 119.0650%16 2/1 20182017 2,091,893 279,317 674,752 255,070 440,955 461,256 62,757 670,815 16.5 8/1 2018 112,685 1,869,619 - 1,756,934 119.0650%17 2/1 20192018 2,091,893 279,317 674,752 255,070 440,955 461,256 62,757 588,601 17.5 8/1 2019 112,685 1,869,619 - 1,756,934 119.0650%18 2/1 20202019 2,091,893 279,317 674,752 255,070 440,955 461,256 62,757 506,387 18.5 8/1 2020 112,685 1,869,619 - 1,756,934 119.0650%19 2/1 20212020 2,091,893 279,317 674,752 255,070 440,955 461,256 62,757 424,173 19.5 8/1 2021 112,685 1,869,619 - 1,756,934 119.0650%20 2/1 20222021 2,091,893 161,074 674,752 255,070 440,955 461,256 62,757 460,202 20.5 8/1 2022 112,685 1,869,619 - 1,756,934 119.0650%21 2/1 20232022 2,091,893 674,752 255,070 440,955 461,256 62,757 657,305 21.5 8/1 2023 112,685 1,869,619 - 1,756,934 119.0650%22 2/1 20242023 2,091,893 674,752 255,070 440,955 461,256 62,757 854,408 22.5 8/1 2024 112,685 1,869,619 - 1,756,934 119.0650%23 2/1 20252024 2,091,893 674,752 255,070 440,955 461,256 62,757 1,051,511 23.5 8/1 2025 112,685 1,869,619 - 1,756,934 119.0650%24 2/1 20262025 2,091,893 674,752 255,070 440,955 461,256 62,757 1,248,614 24.5 8/1 2026 112,685 1,869,619 - 1,756,934 119.0650%25 2/1 20272026 2,091,893 337,376 255,070 440,955 461,256 62,757 1,783,094 25.5 8/1 2027 112,685 1,869,619 - 1,756,934 119.0650%26 2/1 20282027 2,091,893 255,070 440,955 461,256 62,757 2,654,949 26.5 8/1 2028 112,685 1,869,619 - 1,756,934 119.0650%27 2/1 20292028127,535 220,477 230,628 - 2,076,309 Total41,870,6164,733,320 10,417,6625,424,8479,046,0648,756,019928,933 2,076,309Note: the paygo payments shown in the last year include an accrual Tax CapacityDebt ServiceStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 44
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 44 City of St Louis Park, MNPark Commons Tax Increment Financing DistrictTOLD Internal Loan for Public Improvements4.53%Pmt. DatePayment Principal Interest End BalProject Costs 3,145,046.07Net capitalized interest 116,502.143,261,548.218/1/2002 0.003,261,548.212/1/2003 0.003,261,548.218/1/2003 0.003,261,548.212/1/2004 0.003,261,548.218/1/2004 128,243.90 54,369.83 73,874.07 3,207,178.382/1/2005 114,587.37 41,944.78 72,642.59 3,165,233.608/1/2005 139,658.56 67,966.02 71,692.54 3,097,267.582/1/2006 139,658.56 69,505.45 70,153.11 3,027,762.138/1/2006 139,658.56 71,079.75 68,578.81 2,956,682.382/1/2007 139,658.56 72,689.70 66,968.86 2,883,992.688/1/2007 139,658.56 74,336.13 65,322.43 2,809,656.552/1/2008 139,658.56 76,019.84 63,638.72 2,733,636.718/1/2008 139,658.56 77,741.69 61,916.87 2,655,895.022/1/2009 139,658.56 79,502.54 60,156.02 2,576,392.488/1/2009 139,658.56 81,303.27 58,355.29 2,495,089.212/1/2010 139,658.56 83,144.79 56,513.77 2,411,944.428/1/2010 139,658.56 85,028.02 54,630.54 2,326,916.402/1/2011 139,658.56 86,953.90 52,704.66 2,239,962.508/1/2011 139,658.56 88,923.41 50,735.15 2,151,039.092/1/2012 139,658.56 90,937.52 48,721.04 2,060,101.578/1/2012 139,658.56 92,997.26 46,661.30 1,967,104.312/1/2013 139,658.56 95,103.65 44,554.91 1,872,000.668/1/2013 139,658.56 97,257.75 42,400.81 1,774,742.912/1/2014 139,658.56 99,460.63 40,197.93 1,675,282.288/1/2014 139,658.56 101,713.42 37,945.14 1,573,568.862/1/2015 139,658.56 104,017.23 35,641.33 1,469,551.638/1/2015 139,658.56 106,373.22 33,285.34 1,363,178.412/1/2016 139,658.56 108,782.57 30,875.99 1,254,395.848/1/2017 139,658.56 111,246.49 28,412.07 1,143,149.352/1/2018 139,658.56 113,766.23 25,892.33 1,029,383.128/1/2018 139,658.56 116,343.03 23,315.53 913,040.092/1/2019 139,658.56 118,978.20 20,680.36 794,061.898/1/2019 139,658.56 121,673.06 17,985.50 672,388.832/1/2020 139,658.56 124,428.95 15,229.61 547,959.888/1/2020 139,658.56 127,247.27 12,411.29 420,712.612/1/2021 139,658.56 130,129.42 9,529.14 290,583.198/1/2021 139,658.56 133,076.85 6,581.71 157,506.342/1/2022 161,073.86157,506.34 3,567.52(0.00)4,733,320.49 3,261,548.21 1,588,274.42Actual Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 45
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 45 Maximum amount3,500,000.00$ Interest Rate8.50%Note Issued Date7/1/2003TIF will be applied first to internal loan, then iffunds remain, to TOLD per this schedule!Total TaxTax Increment CumulativeSend letter to Roger for TIF applied to internal loan.Increment Less 97% ofAvailable at Tax IncrmentDate Interest DueAvailable Pending Petition 97.00%PaidNote Balance7/1/2003- - - - 3,500,000.00$ 8/1/200324,791.67 - - - 3,524,791.67$ 2/1/2004149,803.65 - - 3,674,595.31$ 8/1/2004156,170.30 - - 3,830,765.61$ 2/1/2005162,807.54 - - 3,993,573.15$ 8/1/2005169,726.86 152,359.08 147,788.31 147,788.31 4,015,511.70$ 2/1/2006170,659.25 143,057.30 138,765.58 286,553.89 4,047,405.37$ 8/1/2006172,014.73 112,147.77 108,783.34 395,337.23 4,110,636.76$ 2/1/2007174,702.06 112,147.78 108,783.35 504,120.58 4,176,555.47$ 8/1/2007177,503.61 129,916.03 126,018.55 630,139.13 4,228,040.53$ 2/1/2008179,691.72 129,916.05 126,018.57 756,157.70 4,281,713.68$ 8/1/2008181,972.83 140,067.85 135,865.81 892,023.51 4,327,820.70$ 2/1/2009183,932.38 140,067.85 135,865.81 1,027,889.33 4,375,887.26$ 8/1/2009185,975.21 133,011.71 129,107.69 1,156,997.02 4,432,754.78$ 2/1/2010188,392.08 133,011.71 129,021.36 1,286,018.38 4,492,125.50$ 8/1/2010190,915.33 149,384.48 144,902.95 1,430,921.32 4,538,137.89$ 2/1/2011192,870.86 139,201.49 (5,058.70) 116,208.10 1,547,129.43 4,614,800.64$ 8/1/2011196,129.03 135,569.47 131,502.39 1,678,631.82 4,679,427.28$ 2/1/2012198,875.66 135,569.47 131,502.39 1,810,134.20 4,746,800.55$ 8/1/2012201,739.02 156,703.06 151,999.96 1,962,134.16 4,796,539.62$ 2/1/2013203,852.93 153,764.06 149,148.63 2,111,282.79 4,851,243.93$ 8/1/2013206,177.87 183,685.00 5,058.70 183,233.33 2,294,516.12 4,874,188.46$ 2/1/2014207,153.01 183,882.00 178,365.77 2,472,881.89 4,902,975.70$ 8/1/2014208,376.47 262,372.50 254,501.33 2,727,383.22 4,856,850.84$ 2/1/2015206,416.16 276,290.87 268,002.14 2,995,385.36 4,795,264.86$ 8/1/2015203,798.76 347,810.52 337,376.20 3,332,761.56 4,661,687.41$ 2/1/2016198,121.71 347,810.52 337,376.20 3,670,137.77 4,522,432.92$ 8/1/2016192,203.40 347,810.52 337,376.20 4,007,513.97 4,377,260.12$ 2/1/2017186,033.55 347,810.52 337,376.20 4,344,890.18 4,225,917.47$ 8/1/2017179,601.49 347,810.52 337,376.20 4,682,266.38 4,068,142.76$ 2/1/2018172,896.07 347,810.52 337,376.20 5,019,642.59 3,903,662.62$ 8/1/2018165,905.66 347,810.52 337,376.20 5,357,018.79 3,732,192.08$ 2/1/2019158,618.16 347,810.52 337,376.20 5,694,394.99 3,553,434.03$ 8/1/2019151,020.95 347,810.52 337,376.20 6,031,771.20 3,367,078.78$ 2/1/2020143,100.85 347,810.52 337,376.20 6,369,147.40 3,172,803.42$ 8/1/2020134,844.15 347,810.52 337,376.20 6,706,523.61 2,970,271.36$ 2/1/2021126,236.53 347,810.52 337,376.20 7,043,899.81 2,759,131.69$ 8/1/2021117,263.10 347,810.52 337,376.20 7,381,276.02 2,539,018.58$ 2/1/2022107,908.29 347,810.52 337,376.20 7,718,652.22 2,309,550.67$ 8/1/202298,155.90 347,810.52 337,376.20 8,056,028.42 2,070,330.37$ 2/1/202387,989.04 347,810.52 337,376.20 8,393,404.63 1,820,943.20$ 8/1/202377,390.09 347,810.52 337,376.20 8,730,780.83 1,560,957.08$ 2/1/202466,340.68 347,810.52 337,376.20 9,068,157.04 1,289,921.55$ 8/1/202454,821.67 347,810.52 337,376.20 9,405,533.24 1,007,367.02$ 2/1/202542,813.10 347,810.52 337,376.20 9,742,909.45 712,803.91$ 8/1/202530,294.17 347,810.52 337,376.20 10,080,285.65 405,721.87$ 2/1/202617,243.18 347,810.52 337,376.20 10,417,661.86 85,588.85$ TOTAL7,003,250.70$ 10,753,956.98$ 10,417,661.86$ City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Excelsior and Grand Tax Increment DistrictStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 46
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 46 Maximum amount 4,668,633.00$ Interest Rate 8.50%Note Issued Date 6/5/2006Last Payment DateTotal Tax Tax Increment Tax IncrementIncrement Available at PaidDate Interest Due Available 97.00% Note Balance6/5/20064,668,633.00$ 8/1/2006 61,729.70$ 112,479.49$ 109,105.11$ 109,105.11$ 4,621,257.60$ 2/1/2007 196,403.45 101,595.00 98,547.15 98,547.15 4,719,113.90$ 8/1/2007 200,562.34 196,471.29 190,577.15 190,577.15 4,729,099.08$ 2/1/2008 200,986.71 175,872.60 187,242.17 187,242.17 4,742,843.62$ 8/1/2008 201,570.85 207,324.32 201,104.59 201,104.59 4,743,309.89$ 2/1/2009 201,590.67 212,699.88 206,318.88 206,318.88 4,738,581.67$ 8/1/2009 201,389.72 211,042.94 204,711.65 232,297.05 4,707,674.35$ 2/1/2010 200,076.16 211,042.94 204,711.65 177,126.00 4,730,624.51$ 8/1/2010 201,051.54 219,659.33 213,069.55 213,069.55 4,718,606.50$ 2/1/2011 200,540.78 219,659.33 210,706.56 210,706.56 4,708,440.71$ 8/1/2011 200,108.73 226,066.93 219,284.92 219,284.92 4,689,264.52$ 2/1/2012 199,293.74 187,548.67 181,922.21 181,922.21 4,706,636.05$ 8/1/2012 200,032.03 211,005.48 198,355.87 198,355.87 4,708,312.22$ 2/1/2013 200,103.27 173,758.09 168,545.35 168,545.35 4,739,870.14$ 8/1/2013 201,444.48 196,790.39 190,886.68 190,886.68 4,750,427.94$ 2/1/2014 201,893.19 173,806.33 168,592.14 168,592.14 4,783,728.98$ 8/1/2014203,308.48 204,051.20 197,929.66 197,929.66 4,789,107.80$ 2/1/2015203,537.08 167,049.76 162,038.26 162,038.26 4,830,606.62$ 8/1/2015205,300.78 227,296.36 220,477.47 220,477.47 4,815,429.93$ 2/1/2016204,655.77 227,296.36 220,477.47 220,477.47 4,799,608.23$ 8/1/2016203,983.35 227,296.36 220,477.47 220,477.47 4,783,114.11$ 2/1/2017203,282.35 227,296.36 220,477.47 220,477.47 4,765,918.99$ 8/1/2017202,551.56 227,296.36 220,477.47 220,477.47 4,747,993.08$ 2/1/2018201,789.71 227,296.36 220,477.47 220,477.47 4,729,305.31$ 8/1/2018200,995.48 227,296.36 220,477.47 220,477.47 4,709,823.32$ 2/1/2019200,167.49 227,296.36 220,477.47 220,477.47 4,689,513.34$ 8/1/2019199,304.32 227,296.36 220,477.47 220,477.47 4,668,340.18$ 2/1/2020198,404.46 227,296.36 220,477.47 220,477.47 4,646,267.17$ 8/1/2020197,466.35 227,296.36 220,477.47 220,477.47 4,623,256.06$ 2/1/2021196,488.38 227,296.36 220,477.47 220,477.47 4,599,266.97$ 8/1/2021195,468.85 227,296.36 220,477.47 220,477.47 4,574,258.35$ 2/1/2022194,405.98 227,296.36 220,477.47 220,477.47 4,548,186.85$ 8/1/2022193,297.94 227,296.36 220,477.47 220,477.47 4,521,007.33$ 2/1/2023192,142.81 227,296.36 220,477.47 220,477.47 4,492,672.67$ 8/1/2023190,938.59 227,296.36 220,477.47 220,477.47 4,463,133.79$ 2/1/2024189,683.19 227,296.36 220,477.47 220,477.47 4,432,339.50$ 8/1/2024188,374.43 227,296.36 220,477.47 220,477.47 4,400,236.46$ 2/1/2025187,010.05 227,296.36 220,477.47 220,477.47 4,366,769.04$ 8/1/2025185,587.68 227,296.36 220,477.47 220,477.47 4,331,879.25$ 2/1/2026184,104.87 227,296.36 220,477.47 220,477.47 4,295,506.65$ 8/1/2026182,559.03 227,296.36 220,477.47 220,477.47 4,257,588.21$ 2/1/2027180,947.50 227,296.36 220,477.47 220,477.47 4,218,058.24$ 8/1/2027179,267.48 227,296.36 220,477.47 220,477.47 4,176,848.25$ 2/1/2028177,516.05 227,296.36 220,477.47 220,477.47 4,133,886.83$ TOTAL8,511,317.37 9,317,629.36 9,046,063.79 9,046,063.54 City of St. Louis ParkEconomic Development AuthorityMeridian Properties Real Estate Development LLCPhase NE Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 47
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 47 Maximum amount 3,300,715.00$ Interest Rate 8.50%Note Issued Date 6/5/2006Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDate Interest Due Available 97.00% Paid Note Balance6/5/20063,300,715.00$ 8/1/2006 43,642.79 5,491.77 5,327.02 5,327.02 3,339,030.77$ 2/1/2007 141,908.81 - - 5,327.02 3,480,939.58$ 8/1/2007 147,939.93 105,706.87 102,535.66 107,862.68 3,526,343.85$ 2/1/2008 149,869.61 106,549.74 103,353.25 211,215.92 3,572,860.22$ 8/1/2008 151,846.56 156,484.19 151,789.66 363,005.59 3,572,917.11$ 2/1/2009 151,848.98 150,195.03 145,689.18 508,694.77 3,579,076.91$ 8/1/2009 152,110.77 157,607.51 152,879.28 661,574.05 3,578,308.39$ 2/1/2010 152,078.11 157,607.51 152,879.28 814,453.34 3,577,507.21$ 8/1/2010 152,044.06 152,372.33 147,801.16 962,254.50 3,581,750.11$ 2/1/2011 152,224.38 152,372.33 146,170.47 1,108,424.97 3,587,804.02$ 8/1/2011 152,481.67 144,020.40 139,699.79 1,248,124.76 3,600,585.90$ 2/1/2012 153,024.90 139,089.87 134,917.17 1,383,041.93 3,618,693.63$ 8/1/2012 153,794.48 129,863.86 125,967.95 1,509,009.88 3,646,520.16$ 2/1/2013 154,977.11 120,937.71 117,308.58 1,626,318.45 3,684,188.69$ 8/1/2013 156,578.02 129,435.89 125,552.82 1,751,871.27 3,715,213.90$ 2/1/2014 157,896.59 118,777.42 115,214.09 1,867,085.36 3,757,896.39$ 8/1/2014159,710.60 132,431.53 128,458.58 1,995,543.95 3,789,148.41$ 2/1/2015161,038.81 116,900.30 113,393.29 2,108,937.24 3,836,793.92$ 8/1/2015163,063.74 131,479.38 127,535.00 2,236,472.24 3,872,322.66$ 2/1/2016164,573.71 131,479.38 127,535.00 2,364,007.25 3,909,361.37$ 8/1/2016166,147.86 131,479.38 127,535.00 2,491,542.25 3,947,974.22$ 2/1/2017167,788.90 131,479.38 127,535.00 2,619,077.25 3,988,228.12$ 8/1/2017169,499.70 131,479.38 127,535.00 2,746,612.26 4,030,192.82$ 2/1/2018171,283.19 131,479.38 127,535.00 2,874,147.26 4,073,941.01$ 8/1/2018173,142.49 131,479.38 127,535.00 3,001,682.26 4,119,548.50$ 2/1/2019175,080.81 131,479.38 127,535.00 3,129,217.27 4,167,094.31$ 8/1/2019177,101.51 131,479.38 127,535.00 3,256,752.27 4,216,660.81$ 2/1/2020179,208.08 131,479.38 127,535.00 3,384,287.27 4,268,333.89$ 8/1/2020181,404.19 131,479.38 127,535.00 3,511,822.28 4,322,203.08$ 2/1/2021183,693.63 131,479.38 127,535.00 3,639,357.28 4,378,361.71$ 8/1/2021186,080.37 131,479.38 127,535.00 3,766,892.28 4,436,907.08$ 2/1/2022188,568.55 131,479.38 127,535.00 3,894,427.29 4,497,940.62$ 8/1/2022191,162.48 131,479.38 127,535.00 4,021,962.29 4,561,568.10$ 2/1/2023193,866.64 131,479.38 127,535.00 4,149,497.29 4,627,899.74$ 8/1/2023196,685.74 131,479.38 127,535.00 4,277,032.29 4,697,050.47$ 2/1/2024199,624.65 131,479.38 127,535.00 4,404,567.30 4,769,140.12$ 8/1/2024202,688.45 131,479.38 127,535.00 4,532,102.30 4,844,293.57$ 2/1/2025205,882.48 131,479.38 127,535.00 4,659,637.30 4,922,641.04$ 8/1/2025209,212.24 131,479.38 127,535.00 4,787,172.31 5,004,318.28$ 2/1/2026212,683.53 131,479.38 127,535.00 4,914,707.31 5,089,466.81$ 8/1/2026216,302.34 131,479.38 127,535.00 5,042,242.31 5,178,234.14$ 2/1/2027220,074.95 131,479.38 127,535.00 5,169,777.32 5,270,774.09$ 8/1/2027224,007.90 131,479.38 127,535.00 5,297,312.32 5,367,246.99$ 2/1/2028228,108.00 131,479.38 127,535.00 5,424,847.32 5,467,819.98$ TOTAL7,591,952.30 5,594,308.26 5,424,847.32 City of St. Louis ParkEconomic Development AuthorityMeridian Properties Real Estate Development LLCPhase E Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 48
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 48 Maximum amount 4,079,105.00$ Interest Rate 8.50%Note Issued Date 6/5/2006Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDate Interest Due Available 97.00% Paid Note Balance6/5/20064,079,105.00$ 8/1/2006 53,934.83 - - - 4,133,039.83$ 2/1/2007 175,654.19 - - - 4,308,694.03$ 8/1/2007 183,119.50 5,608.37 5,440.12 5,440.12 4,486,373.40$ 2/1/2008 190,670.87 5,608.36 5,440.11 10,880.23 4,671,604.16$ 8/1/2008 198,543.18 - - 10,880.23 4,870,147.34$ 2/1/2009 206,981.26 320,123.60 310,519.89 321,400.12 4,766,608.71$ 8/1/2009 202,580.87 214,767.16 208,324.15 529,724.27 4,760,865.43$ 2/1/2010 202,336.78 214,767.16 208,324.15 738,048.41 4,754,878.07$ 8/1/2010 202,082.32 223,276.89 216,578.58 954,626.99 4,740,381.80$ 2/1/2011 201,466.23 223,276.89 208,029.91 1,162,656.90 4,733,818.12$ 8/1/2011 201,187.27 229,636.70 222,747.60 1,385,404.50 4,712,257.79$ 2/1/2012 200,270.96 203,750.25 197,637.74 1,583,042.25 4,714,891.01$ 8/1/2012 200,382.87 219,402.70 212,820.62 1,795,862.87 4,702,453.25$ 2/1/2013 199,854.26 186,080.63 180,496.16 1,976,359.03 4,721,811.35$ 8/1/2013 200,676.98 221,183.08 214,547.58 2,190,906.62 4,707,940.75$ 2/1/2014 200,087.48 183,758.44 178,245.69 2,369,152.31 4,729,782.54$ 8/1/2014201,015.76 217,571.18 211,044.04 2,580,196.35 4,719,754.26$ 2/1/2015200,589.56 185,042.63 179,491.36 2,759,687.70 4,740,852.46$ 8/1/2015201,486.23 237,760.95 230,628.12 2,990,315.82 4,711,710.57$ 2/1/2016200,247.70 237,760.95 230,628.12 3,220,943.94 4,681,330.15$ 8/1/2016198,956.53 237,760.95 230,628.12 3,451,572.06 4,649,658.56$ 2/1/2017197,610.49 237,760.95 230,628.12 3,682,200.18 4,616,640.93$ 8/1/2017196,207.24 237,760.95 230,628.12 3,912,828.30 4,582,220.05$ 2/1/2018194,744.35 237,760.95 230,628.12 4,143,456.41 4,546,336.29$ 8/1/2018193,219.29 237,760.95 230,628.12 4,374,084.53 4,508,927.46$ 2/1/2019191,629.42 237,760.95 230,628.12 4,604,712.65 4,469,928.76$ 8/1/2019189,971.97 237,760.95 230,628.12 4,835,340.77 4,429,272.61$ 2/1/2020188,244.09 237,760.95 230,628.12 5,065,968.89 4,386,888.58$ 8/1/2020186,442.76 237,760.95 230,628.12 5,296,597.01 4,342,703.23$ 2/1/2021184,564.89 237,760.95 230,628.12 5,527,225.13 4,296,640.00$ 8/1/2021182,607.20 237,760.95 230,628.12 5,757,853.24 4,248,619.08$ 2/1/2022180,566.31 237,760.95 230,628.12 5,988,481.36 4,198,557.27$ 8/1/2022178,438.68 237,760.95 230,628.12 6,219,109.48 4,146,367.83$ 2/1/2023176,220.63 237,760.95 230,628.12 6,449,737.60 4,091,960.35$ 8/1/2023173,908.31 237,760.95 230,628.12 6,680,365.72 4,035,240.55$ 2/1/2024171,497.72 237,760.95 230,628.12 6,910,993.84 3,976,110.15$ 8/1/2024168,984.68 237,760.95 230,628.12 7,141,621.96 3,914,466.71$ 2/1/2025166,364.84 237,760.95 230,628.12 7,372,250.07 3,850,203.43$ 8/1/2025163,633.65 237,760.95 230,628.12 7,602,878.19 3,783,208.96$ 2/1/2026160,786.38 237,760.95 230,628.12 7,833,506.31 3,713,367.22$ 8/1/2026157,818.11 237,760.95 230,628.12 8,064,134.43 3,640,557.21$ 2/1/2027154,723.68 237,760.95 230,628.12 8,294,762.55 3,564,652.77$ 8/1/2027151,497.74 237,760.95 230,628.12 8,525,390.67 3,485,522.39$ 2/1/2028148,134.70 237,760.95 230,628.12 8,756,018.79 3,403,028.98$ TOTAL8,079,942.76 9,035,638.67 8,756,018.79 City of St. Louis ParkEconomic Development AuthorityMeridian Properties Real Estate Development LLCPhase NW Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 49
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 49 Edgewood Description: Edgewood (County #1309) is a soils condition district established on September 15, 2003 and is located within the Redevelopment Project No 1. Originally, the district encompassed one (1) parcel of land and was established to facilitate cleanup of a contaminated site and the construction of an office/warehouse. Expenditures from this district are to be used to mitigate certain hazardous substances in order to facilitate construction of a 79,000 square foot office/warehouse facility. This district was certified by the County on April 26, 2004 and began to receive increment in 2005. The interest rate on the note has been set at 1.7% due to reduced interest loans from other governmental entities. The EDA has pledged 95% of tax increment revenues from this District for a PAYGO note with Edgewood Investors, LLC (originally Real Estate Recycling), in an amount not to exceed $600,000 in two separate notes Principal and interest was first paid on August 1, 2006 and is paid each February 1 and August 1 through February 1, 2023. A soils district cannot pool funds and will need to be decertified as soon as the original obligation is paid. Adopted……………………….… 09/15/2003 Requested Date………………..… 11/24/2003 Certified Date………………….... 04/26/2004 First Increment……..……………..… 07/2005 Anticipated Decertification……… 12/31/2021 Former and Current PID Numbers: Former PID # Former UseNew PID #New Use08-117-21-14-0043 ConAgraSame as FormerMulti-Tenant Office/WarehouseStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 50
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 50 Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 120.9420% Allowable Uses: MN Statute 469.176 subd. 4b specifies the activities on which tax increment from a soils condition district may be spent. In general, tax increment may only be used to acquire property and for removal and remediation actions and allowable administrative expenses Obligations: There is one PAYGO Note that was issued for this project on February 1, 2004 as follows: $600,000 PAYGO Note at 1.7% interest. This Note was issued on February 1, 2004 to Edgewood Investors LLC and is paid from 95% of the available increment. It is anticipated that the Note will be repaid by August 1, 2021. Other Development Agreement Compliance: 1. Repayment of Assistance. If the property is transferred within 5 years of issuance of the Certificate of Occupancy, an analysis of repayment of a portion of the assistance is to be completed. If the property does not transfer ownership in this timeframe, then no look back is required. The property ownership was never transferred in the 5-year period. Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Edgewood District met the requirement when the City approved the Development Agreement with Edgewood Investors, LLC. A Tax Increment Financing Note was authorized on August 1, 2006. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The four year deadline was April 2008 and was met because qualified activities happened prior to that time. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 51
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 51 Five Year Rule: At least 75% of tax increment revenues generated within the Edgewood district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Edgewood Redevelopment district fits this timeline and its five year rule is now April 26, 2014. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after April 2009. Recommendations: 1. Decertification. This district will need to be decertified when the note is paid, which is estimated to be August 2021. 2. Pooling Analysis and Use of Funds. As stated above, pooling is not allowed in Soils Condition TIF Districts. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 52
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 52 City of St. Louis ParkEdgewood TIF DistrictBasic AssumptionsOption B District: 1309Inflation Rate 0.00%Assumes Last Increment In 2019 Expected TermBaseTotalTax Rate2025 Legal Maximum2004- - 120.9420%Frozen rate 120.9420%200519,250 33,650 114.2710%201119,250 106,786 121.8240%201219,250 75,150 130.7480%201319,250 75,150 133.1340%201419,250 79,930 138.0900%201519,250 94,210 130.0480%Cash Flow Projections0.00% 5.00%Fiscal Tax Fiscal Tax Other Invest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparityCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance8 8/1 2012 19,250 75,150 (19,563) 36,337 120.9420%8.5 2/1 20132012 43,789 - 65,262 - - (652) 9 8/1 2013 19,250 75,150 (19,088) 36,812 120.9420%9.5 2/1 20142013 44,361 - 41,871 2,610 - (772) 10 8/1 2014 19,250 79,930 (20,152) 40,528 120.9420%10.5 2/1 20152014 48,838 - 44,270 4,376 - (579) 11 8/1 2015 19,250 94,210 (26,240) 48,720 120.9420%11.5 2/1 20162015 58,923 - 51,086 2,946 - 4,311 12 8/1 2016 19,250 94,210 (26,240) 48,720 120.9420%12.5 2/1 20172016 58,923 - 55,775 2,946 - 4,513 13 8/1 2017 19,250 94,210 (26,240) 48,720 120.9420%13.5 2/1 20182017 58,923 - 55,775 2,946 - 4,714 14 8/1 2018 19,250 94,210 (26,240) 48,720 120.9420%14.5 2/1 20192018 58,923 - 55,775 2,946 - 4,916 15 8/1 2019 19,250 94,210 (26,240) 48,720 120.9420%15.5 2/1 20202019 58,923 - 48,186 2,946 - 12,707 16 8/1 2020 19,250 94,210 (26,240) 48,720 120.9420%16.5 2/1 20212020- - - 12,707 17 8/1 2021 19,250 94,210 (26,240) 48,720 120.9420%17.5 2/1 20222021- - - - 12,707 18 8/1 2022 19,250 94,210 (26,240) 48,720 120.9420%18.5 2/1 20232022- - - - 12,707 19 8/1 2023 19,250 94,210 (26,240) 48,720 120.9420%19.5 2/1 20242023 - - - - - 12,707 Total750,4141,220 697,313 41,614012,707Tax Capacity Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 53
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 53 Maximum amount 600,000.00$ Interest Rate 1.70%Note Issued Date 2/1/2004Final Pyament 2/1/2023Total TaxLess Tax Increment CummulativeIncrement Pending Available at Tax IncrementDateInterest Due Available Tax Petitions 95.00%PaidNote Balance600,000.00$ 2/1/2004- 600,000.00$ 8/1/20045,100.00 - - - 605,100.00$ 2/1/20055,143.35 - - - 610,243.35$ 8/1/20055,187.07 12,158.00 - - 615,430.42$ 2/1/20065,231.16 - - - 620,661.58$ 8/1/20065,275.62 - 30,157.00 30,157.00 595,780.20$ 2/1/20075,064.13 19,586.50 18,607.18 48,764.18 582,237.16$ 8/1/20074,949.02 19,586.50 20,923.63 69,687.81 566,262.54$ 2/1/20084,813.23 22,025.00 20,923.64 90,611.45 550,152.13$ 8/1/20084,676.29 22,025.00 29,816.81 120,428.26 525,011.62$ 2/1/20094,462.60 31,499.79 29,816.80 150,245.06 499,657.42$ 8/1/20094,247.09 33,304.66 31,639.43 181,884.48 472,265.08$ 2/1/20104,014.25 33,304.66 31,639.43 213,523.91 444,639.90$ 8/1/20103,800.44 34,398.44 32,678.52 246,202.42 415,761.82$ 2/1/20113,533.98 34,398.44 32,678.52 278,880.94 386,617.28$ 8/1/20113,286.25 34,016.76 (31,884.54) 431.38 279,312.33 389,472.14$ 2/1/20123,310.51 34,016.76 (9,829.23) 44,462.00 323,774.33 348,320.65$ 8/1/20122,960.73 21,894.36 20,799.64 344,573.97 330,481.74$ 2/1/20132,809.09 21,894.36 20,799.64 365,373.61 312,491.19$ 8/1/20132,656.18 22,180.58 21,071.55 386,445.17 294,075.81$ 2/1/20142,499.64 22,180.58 21,071.54 407,516.71 275,503.91$ 8/1/20142,341.78 24,419.17 23,198.20 430,714.91 254,647.50$ 2/1/20152,164.50 24,419.17 23,198.21 453,913.12 233,613.79$ 8/1/20151,985.72 29,355.38 27,887.86 481,800.98 207,711.64$ 2/1/20161,765.55 29,355.38 27,887.61 509,688.60 181,589.58$ 8/1/20161,543.51 29,355.38 27,887.61 537,576.21 155,245.48$ 2/1/20171,319.59 29,355.38 27,887.61 565,463.82 128,677.45$ 8/1/20171,093.76 29,355.38 27,887.61 593,351.43 101,883.60$ 2/1/2018866.01 29,355.38 27,887.61 621,239.04 74,862.00$ 8/1/2018636.33 29,355.38 27,887.61 649,126.66 47,610.71$ 2/1/2019404.69 29,355.38 27,887.61 677,014.27 20,127.79$ 8/1/2019171.09 29,355.38 20,298.88 697,313.15 (0.00)$ TOTAL97,313.15 731,507.16 697,313.15 9,754,583.82 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Edgewood Investors Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 54
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 54 Wolfe Lake Commercial Redevelopment Description: Wolfe Lake TIF District (County #1310) is a redevelopment district established on July 7, 2003 and is located within the Redevelopment Project No 1. Originally the district encompassed four (4) parcels of land and was established to facilitate the rehabilitation of an area adjacent to West 36th Street and Belt Line Boulevard into office and other commercial uses. These parcels were eventually replatted into two (2) parcels when development was commenced. This district was certified by the County on April 26, 2004 and first increment was received in 2006. Adopted……………………..….…07/07/2003 Requested Date……………………12/15/2003 Certified Date……………….…….04/26/2004 First Increment………………..…...... 07/2006 Anticipated Decertification…….....12/31/2020 Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 120.9240% Former PID # Former UseNew PID #New Use06-028-24-31-0020 Vacant Land06-028-24-31-0022Wolfe Lake West Multi-Tenant Commercial06-028-24-31-0020 Multi-Tenant Building06-028-24-31-0023Wolfe Lake East - OfficeStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 55
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 55 Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There is currently one PAYGO Note in this district as follows: $996,000 at 7.5% interest. This Note was issued on January 20, 2006 to Wolf Lake/Belt Line Industrial Park. The EDA has pledged 95% of tax increment revenues from this District and it is anticipated that the Note will be repaid in 15 years or by August 1, 2020. Other Development Agreement Compliance: 2. Minimum Assessment Agreement. The minimum market value as of January 2, 2005 shall be $9,500,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. 3. Repayment of Assistance. If the property is transferred within 5 years of issuance of the Certificate of Occupancy, an analysis of repayment of a portion of the assistance is to be completed. If the property does not transfer ownership in this timeframe, then no look back is required. The property ownership was never transferred in the 5-year period. 4. Authority’s Option to Cure Default on Mortgage. Developer must provide City with any notice of default it receives from its mortgage holder and the City has the right, but not the obligation to cure any default on behalf of the developer. Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Wolfe Lake district met the requirement when the City approved the Development Agreement with Belt Line Industrial Park, Inc. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 56
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 56 Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. Wolfe Lake Four Year Rule was deadline was April 2008 and was met because qualifying activities happened prior to this date. This district did not fall within the certification dates for extension of the four year rule. Five Year Rule: At least 75% of tax increment revenues generated within the Wolfe Lake district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Wolfe Lake Redevelopment district fits this timeline and its five year rule was April 26, 2014. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after April 2009. Recommendations: 1. Decertification. This district will need to be decertified when the note is paid, which is estimated to be August 2020 2. Pooling Analysis and Use of Funds. It is estimated that there will be approximately $65,600 available at the end of the District. We recommend that the City develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned either when the district expires or when the obligation is paid. The projection shows the return of the second half 2020 increment. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 57
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 57 City of St. Louis ParkWolfe Lake TIF DistrictBasic AssumptionsOption B District:1310Inflation Rate0.00%Assumes Last Increment In2031 Legal MaximumBaseTotalTax Rate2020 Expected Term2004- - 120.9420%Frozen rate 120.9420%200534,346 34,346 114.2710%201134,346 188,500 121.8240%201234,346 188,500 130.7480%201334,346 188,500 133.1340%201434,346 188,500 138.0900%201534,346 188,500 130.0480%Cash Flow Projections0.00% 5.00%Fiscal New Tax Fiscal Tax OtherInvest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparitiesDevelopmentCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance8 8/1 2013 34,346 188,500 (52,638) 101,516 120.9420%8.5 2/1 20142013 122,333 - 115,162 5,519 - 81,843 9 8/1 2014 34,346 188,500 (51,194) 102,960 120.9420%9.5 2/1 20152014 124,074 267 116,736 3,506 - 85,942 10 8/1 2015 34,346 188,500 (53,962) 100,192 120.9420%10.5 2/1 20162015 121,174 - 116,131 6,059 - 84,926 11 8/1 2016 34,346 188,500 (53,962) 100,192 120.9420%11.5 2/1 20172016 121,174 - 114,701 6,059 - 85,341 12 8/1 2017 34,346 188,500 (53,962) 100,192 120.9420%12.5 2/1 20182017 121,174 - 114,701 6,059 - 85,756 13 8/1 2018 34,346 188,500 (53,962) 100,192 120.9420%13.5 2/1 20192018 121,174 - 114,701 6,059 - 86,170 14 8/1 2019 34,346 188,500 (53,962) 100,192 120.9420%14.5 2/1 20202019 121,174 - 114,701 6,059 - 86,585 15 8/1 2020 34,346 188,500 (53,962) 100,192 120.9420%15.5 2/1 20212020 121,174 - 75,505 6,059 60,587 65,609 16 8/1 2021 34,346 188,500 (53,962) 100,192 120.9420%16.5 2/1 20222021- - - - 65,609 Total1,828,5142,822 1,636,159 68,981 60,58765,609Tax CapacityStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 58
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 58 Maximum amount 996,000.00$ Interest Rate 7.50%Note Issued Date 1/20/2006Final Payment 2/1/2023Total TaxLess Tax Increment CumulativeIncrement Tax Petition Available at Tax IncrementDateInterest Due Available Reduction95.00%PaidNote Balance996,000.00$ 2/1/20062,490.00 - 998,490.00$ 8/1/200637,443.38 60,387.11 57,367.75 57,367.75 978,565.62$ 2/1/200736,696.21 60,387.13 57,367.77 114,735.53 957,894.06$ 8/1/200735,921.03 61,064.50 58,011.34 172,746.87 935,803.74$ 2/1/200835,092.64 61,064.50 58,011.34 230,758.21 912,885.05$ 8/1/200834,233.19 61,145.62 57,878.99 288,637.20 889,239.24$ 2/1/200933,346.47 61,145.62 57,878.97 346,516.17 864,706.75$ 8/1/200932,426.50 61,513.46 58,284.00 404,800.17 838,849.25$ 2/1/201031,456.85 61,513.46 58,284.00 463,084.17 812,022.09$ 8/1/201030,620.00 64,625.99 61,233.12 524,317.30 781,408.97$ 2/1/201129,302.84 64,625.99 61,233.12 585,550.42 749,478.68$ 8/1/201128,105.45 59,904.72 (1,227.07) 55,532.66 641,083.08 722,051.47$ 2/1/201227,076.93 59,904.72 (1,227.07) 55,532.66 696,615.73 693,595.75$ 8/1/201226,009.84 60,376.28 57,206.52 753,822.26 662,399.07$ 2/1/201324,839.96 60,376.28 57,206.52 811,028.78 630,032.51$ 8/1/201323,626.22 61,166.49 57,955.24 868,984.02 595,703.48$ 2/1/201422,338.88 61,166.49 57,955.24 926,939.27 560,087.12$ 8/1/201421,003.27 62,037.23 58,780.28 985,719.55 522,310.11$ 2/1/201519,586.63 62,037.23 58,780.28 1,044,499.83 483,116.45$ 8/1/201518,116.87 60,368.86 57,351.19 1,101,851.02 443,882.13$ 2/1/201616,645.58 60,368.86 57,350.41 1,159,201.43 403,177.30$ 8/1/201615,119.15 60,368.86 57,350.41 1,216,551.85 360,946.03$ 2/1/201713,535.48 60,368.86 57,350.41 1,273,902.26 317,131.09$ 8/1/201711,892.42 60,368.86 57,350.41 1,331,252.67 271,673.10$ 2/1/201810,187.74 60,368.86 57,350.41 1,388,603.08 224,510.43$ 8/1/20188,419.14 60,368.86 57,350.41 1,445,953.50 175,579.15$ 2/1/20196,584.22 60,368.86 57,350.41 1,503,303.91 124,812.96$ 8/1/20194,680.49 60,368.86 57,350.41 1,560,654.32 72,143.03$ 2/1/20202,705.36 60,368.86 57,350.41 1,618,004.74 17,497.98$ 8/1/2020656.17 60,368.86 18,154.16 1,636,158.90 (0.00)$ TOTAL640,158.89 1,890,834.04 1,636,158.90 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Belt Line Industrial Park Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 59
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 59 Aquila Commons Description: Aquila Commons (County #1311) is housing district established on September 7, 2004 and is located within the Redevelopment Project No 1. Originally the district encompassed one (1) parcel of land and was established to facilitate the construction of a limited equity senior housing co-operative on the former Talmud Torah School. The district currently contains 106 owner-occupied units in the form of a limited equity cooperative, under which 95% of the initial buyers will need to meet TIF income restrictions Adopted………………………..09/07/2004 Requested Date………………...12/20/2004 Certified Date………….....……04/04/2005 First Increment…………………… 07/2007 Anticipated Decertification…….12/31/2018 Former and Current PID Numbers: This TIF district originally had one (1) parcel and was replatted into 107 parcels. Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 114.27100% Former PID # Former UseNew PID #New Use18-117-21-14-0008Aquila Commons Senior Cooperative - Master Parcel18-117-21-14-0167 through 0272Aquila Commons Senior Cooperative18-117-21-14-0008SchoolStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 60
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 60 Allowable Uses: MN Statute 469.176 subd. 4d specifies the activities on which tax increment from a housing district may be spent. In general, tax increment must be spent on housing projects meeting the income guidelines, public improvements directly related to housing projects and administrative expenses. Obligations: There is one PAYGO Note that was issued for this project as follows: $1,050,000 at 5.75% interest. This Note was issued on May 25, 2006 to Aquila Senior LLC. The EDA has pledged 95% of tax increment revenues from this District and it is anticipated that the Note will be repaid in 10.5 years or by August 1, 2018 Due to the reallocation of the market value homestead credit to a market value homestead exclusion in 2011, the tax capacities dropped for the pay 2012 taxes, thus reducing the amount of TIF and extending the repayment period on the Note. Other Development Agreement Compliance: 1. Income restrictions. 95% of the units sold are income restricted pursuant to TIF law. Based upon this, at least 40% of the unit interests (42 units) need to be sold to persons with a household income not exceeding 80% of the median income and adjusted for family size. At least 55% of the unit interests (58 units) need to be sold to persons at or below 100% of the area median income for households of two or less and to persons at or below 115% of the area median income for households of three or more. 2. Assignment of Note. Except for a collateral assignment to a Holder the developer may not transfer or assign its interest in the TIF Note to another party without the written consent of the Authority. a. Look Back. Within 60 days after closing on initial sale of all units, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds an 8.00% rate of return, then 50 percent of the profit in excess of 8.00% will be applied as prepayment of the outstanding principal amount of the TIF Note in accordance with the terms of Section 5(b) of the TIF Note. All units have been sold so we recommend completing the look back at this time. 3. Marketing Covenants. Through the term of the TIF Note, the developer must use its best efforts to market available unit interests in the Cooperative to buyers who reside in the City, to the extent permissible under State and federal fair housing and related laws. 4. Management. Upon completion and through the term of the TIF Note, the City has to approve the property management company. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 61
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 61 Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Aquila Commons District met the requirement when the City approved the Development Agreement with Aquila Senior LLC. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule to increase it by an additional two years for districts that were certified on or after January 1, 2005 and before April 20, 2009. The Aquila Commons district falls within this timeline and the Four Year Rule was deadline becomes April 2011. The district, however, met this requirement by April 2009. Five Year Rule: At least 75% of tax increment revenues generated within the Aquila Commons district must be used to pay for qualified costs within the district. The five year deadline will be April 2010. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. This District fits this timeline and its ten year rule expired on April 4, 2015 (the deadline was met since the EDA has entered into contracts and obligated TIF dollars prior to this time). Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after April 2009. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 62
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 62 Recommendation: 1. Look Back analysis. We recommend completing the look back at this time since it is unknown if all the units will ever be sold and likely, the holding costs of these units have already depleted a significant portion of the 8% return that the developer was allowed under the original contact. 2. Decertification. This district will need to be decertified when the Note is paid, which is estimated to be August 1, 2018. 3. Pooling Analysis and Use of Funds. It is estimated that there will be approximately $103,000 available at the end of the District. We recommend that the City prepare a plan to utilize these funds for other affordable housing programs in the City. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 63
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 63 City of St. Louis ParkAquila Commons TIF DistrictBasic AssumptionsOption B District: 1311Inflation Rate 0.00%Assumes Last Increment In 2018 Expected TermBaseTotalTax Rate2032 Legal Maximum2004- - 120.9420%Frozen rate 114.2710%2005- - 114.2710%201119,000 175,585 121.8240%201219,000 156,167 130.7480%201319,000 156,278 133.1340%201416,906 150,204 138.0900%201516,906 156,273 130.0480%Cash Flow Projections0.00% 5.00%Fiscal Tax Fiscal Tax OtherInvest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparityCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance7 8/1 2012 19,000 156,167 - 137,167 114.2710%7.5 2/1 20132012 156,178 130 158,871 3,528 - 89,474 8 8/1 2013 19,000 156,278 - 137,278 114.2710%8.5 2/1 20142013 156,194 - 148,429 6,458 - 90,782 9 8/1 2014 16,906 150,204 - 133,298 114.2710%9.5 2/1 20152014 151,772 216 146,232 5,121 - 91,417 10 8/1 2015 16,906 156,273 - 139,367 114.2710%10.5 2/1 20162015 159,256 - 147,466 7,963 - 95,244 11 8/1 2016 16,906 156,273 - 139,367 114.2710%11.5 2/1 20172016 159,256 - 150,749 7,963 - 95,788 12 8/1 2017 16,906 156,273 - 139,367 114.2710%12.5 2/1 20182017 159,256 - 150,749 7,963 - 96,332 13 8/1 2018 16,906 156,273 - 139,367 114.2710%13.5 2/1 20192018 159,256 - 144,712 7,963 102,914 14 8/1 2019 16,906 156,273 - 139,367 114.2710%14.5 2/1 20202019- - - 102,914 Total1,724,2701,013 1,552,922 69,4470 102,914Tax Capacity Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 64
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 64 Maximum amount 1,050,000.00$ Interest Rate 5.75%Note Issued Date 25-May-06Final Payment 2/1/2020Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDate Interest Due Available 95.00% Paid Note Balance1,050,000.00 8/1/20061,050,000.00 2/1/2007 30,187.50 - - - 1,080,187.50 8/1/200731,055.39 - - - 1,111,242.89 2/1/200831,948.23 - - - 1,143,191.12 8/1/200832,866.74 27,651.20 4,436.45 4,436.45 1,171,621.42 2/1/200933,684.12 27,651.20 37,199.16 41,635.61 1,168,106.37 8/1/200933,583.06 100,128.78 95,122.34 136,757.95 1,106,567.09 2/1/201031,813.80 100,128.78 94,878.67 231,636.62 1,043,502.23 8/1/201030,167.36 99,679.83 94,695.84 326,332.45 978,973.75 2/1/201128,145.50 99,679.83 94,695.84 421,028.29 912,423.41 8/1/201126,232.17 89,143.55 84,686.37 505,714.66 853,969.22 2/1/201224,551.61 89,143.55 84,686.37 590,401.03 793,834.46 8/1/201222,822.74 78,089.07 74,184.61 664,585.64 742,472.59 2/1/201321,346.09 78,089.07 74,184.61 738,770.25 689,634.06 8/1/201319,826.98 78,151.63 74,244.05 813,014.30 635,217.00 2/1/201418,262.49 78,042.46 74,140.34 887,154.64 579,339.15 8/1/201416,656.00 75,885.98 72,091.68 959,246.32 523,903.47 2/1/201515,062.22 75,885.98 72,091.68 1,031,338.00 466,874.01 8/1/201513,422.63 79,341.55 75,374.50 1,106,712.50 404,922.14 2/1/201611,641.51 79,341.55 75,374.47 1,182,086.97 341,189.18 8/1/20169,809.19 79,341.55 75,374.47 1,257,461.44 275,623.90 2/1/20177,924.19 79,341.55 75,374.47 1,332,835.91 208,173.62 8/1/20175,984.99 79,341.55 75,374.47 1,408,210.38 138,784.14 2/1/20183,990.04 79,341.55 75,374.47 1,483,584.85 67,399.71 8/1/20181,937.74 79,341.55 69,337.46 1,552,922.31 (0.00) TOTAL502,922.30$ 1,652,741.72$ 1,552,922.31$ City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Stonebridge Development Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 65
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 65 Elmwood Village Description: Elmwood Village (County #1312) is a renewal and renovation district established on August 2, 2004 and is located within the Redevelopment Project No 1. Originally the district encompassed seventeen (17) parcels of land and was established to facilitate the construction of various public improvements related to the construction of housing and commercial facilities (a portion of this district is derived from parcels decertified from the Trunk Highway 7 TIF District). The District was initially established to assist Rottlund Homes with additional site improvements and land acquisition costs associated with a condominium/townhome project on the old Quadian site. Rottlund was issued a PAYGO note in the amount of $790,000 at 5.75% interest. The note was paid off on February 1, 2010 and the TIF generated from these parcels can be utilized by the City for other qualified TIF costs. In 2009, Grecco Development purchased a parcel of land from Rottlund for redevelopment into a vertical mixed-use development consisting of 115 units of senior housing over approximately 10,000 sq/ft of retail. On June 7, 2010 the EDA approved a development agreement with Wooddale Catered Living LLC to provide them a PAYGO note in the amount of $490,000. The project is complete and the TIF Note was issued on August 1, 2013. On February 21, 2006 this district was modified to add eight additional parcels. The parcels were part of the Hoigaards redevelopment project which consists of a 220-unit market rate apartment building, 100 unit senior independent apartment building, 22 rental townhomes, a mixed use residential development consisting of 74 condos (temporarily turned rental) over 25,000 square feet retail and a regional storm pond. The City issued short-term taxable tax increment revenue notes to finance costs for the mixed use building and the market rate apartment building. The first note was issued in 2006 in the amount of $1,663,000 and the second note was issued in 2007 in the amount Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 66
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 66 of $2,540,000. On October 21, 2010, the EDA issued long-term tax-exempt tax increment revenue bonds to refinance the short-term notes in the amount of $3,495,000 (the A bonds). These revenue bonds are paid from tax increment generated from the Camarata Apartments (220 units) and the Harmony Vista condos/Apartments and retail. Since these are revenue bonds, the EDA does not carry any legal liability to make payments on the bonds if the tax increment generated is insufficient to do so. The bonds were sized with 125% debt service coverage and a debt service reserve fund in the amount of $165,875 was funded with bond proceeds. In addition, the EDA issued a subordinated TIF note in the amount of $935,000 to Northern Holding II, LLC on the same date. This note is paid from increment generated from the Camarata Apartments and Harmony Vista Condos/Apartments and retail on a subordinate basis to the A note (paid from available increment not needed to pay debt service on the A bonds). Construction of the last two phases began in 2012. In early 2013, both the Adagio (100-unit senior apartment) and the Medley Row rental townhomes (26-units) were completed. TIF Notes were issued for these projects in 2013 for $1,020,000 ($820,000 for Adagio and $200,000 for Medley Row). A tax increment note was issued to Grecco for the Towerlight project in 2013. This note was issued for $490,000 and is payable through 95% of increment related to the project. Due to the reallocation of the market value homestead credit to market value homestead exclusion in 2011, the tax capacities dropped for the pay 2012 taxes on the Rottlund town homes, thus reducing the amount of TIF generated for use by the EDA. Adopted:…………………….….08/02/2004 Requested Date:…….……….…12/20/2004 Certified Date:………….……....05/31/2005 First Increment……………….……07/2007 Anticipated Decertification…….12/31/2023 Required Decertification……….12/31/2029 Modifications:………………….02/21/2006 10/19/2009 Special Legislation: In 2009 the City received special legislation to extend the term of the district by 6 years. The duration of the district is now 22 years, versus the original 16 years (Laws of 2009, Chapter 88, Article 5, Section 19). The reason for the extension was to utilize the additional TIF revenue generated to complete improvements to Highway 100 and Wooddale Avenue Intersection (see language below): Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 67
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 67 Sec. 19. CITY OF ST. LOUIS PARK; EXTENSION OF TAX INCREMENT DISTRICT DURATION. Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, the duration of the Elmwood Village Tax Increment Financing District is extended to 22 years after receipt by the St. Louis Park Economic Development Authority of the first increment from the district. Former and Current PID Numbers: Former PID # New PID #New Use06-028-24-32-002006-028-24-32-0024 and 16-117-21-34-0355Detention Pond (24) and Commercial component of Harmony Vista (including triangular parking parcel)16-117-21-31-006516-117-21-31-0077Medly Row Town Homes (yet to be built)16-117-21-31-006606-028-24-32-0023Camerata Apartments16-117-21-34-001816-117-21-34-0340Adagio Condos (yet to be built)16-117-21-34-007516-117-21-34-003516-117-21-34-0017Same as Former PIDExisting Bldg - No Redev16-117-21-34-0015Same as Former PIDExisting Bldg - No Redev16-117-21-34-002716-117-21-34-000116-117-21-33-010416-117-21-33-0107 through 16-117-21-33-0196; & 16-117-21-34-0146 through 16-117-21-34-0194Senior (55+) Condos16-117-21-34-009516-117-21-34-0218 through 16-117-21-34-0339Village Lofts-Condos16-117-21-34-009616-117-21-34-0100 through 16-117-21-34-0119Elmwood Village-Condos16-117-21-34-009716-117-21-34-0120 through 16-117-21-34-0137Elmwood Village-Condos16-117-21-34-009816-117-21-34-0195 through 16-117-21-34-0217Elmwood Village-Condos16-117-21-33-010516-117-21-33-0197 through 16-117-21-33-0212Elmwood Village-Condos16-117-21-33-0106Same as Former PIDLuther Car Dealership16-117-21-34-0099Same as Former PIDCommon Area (Condos/TH)16-117-21-31-0071Same as Former PIDExisting Building - Industrial (EDA Owned)16-117-21-32-0057Same as Former PIDExisting Building - Office16-117-21-33-0089Same as Former PIDEDA Owned Vacant Land16-117-21-33-0091Same as Former PIDEDA Owned Parking16-117-21-33-0092Same as Former PIDEDA Owned Vacant Land16-117-21-33-0094Same as Former PIDEDA Owned Vacant Land16-117-21-34-003421-117-21-21-005316-117-21-34-0603Center Park16-117-21-34-0355 and 16-117-21-34-0356 thru 16-117-21-34-0604Harmony Vista Condos (includes garage stalls and hallways)16-117-21-34-0607Woodale Catered Living Apts Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 68
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 68 Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 114.2710% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a renewal and renovation district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. In addition, pursuant to the TIF plan the dollars can be utilized for improvements of a grade separated crossing for Wooddale Avenue at Highway 100. Obligations: There are three (3) Tax Exempt TIF Revenue Bonds, one (1) PAYGO Note and one (1) Interfund Loan that was issued for the projects within this district as follows: $3,495,000 Tax Exempt TIF Revenue Bond, Series 2010A. This Bond was issued on October 21, 2010 and sold to third party investors. The EDA has pledged 95% of the tax increment revenues from the project. This Bond will be paid in full on February 1, 2023. $935,000 Tax Exempt TIF Revenue Bond, Series 2010B. This Bond was issued on October 21, 2010 and was privately placed. This Bond is subordinated to the 2010A bonds and is paid from 95% of the tax increment revenues from the project. This Bond will be paid in full in February 1, 2018. $490,000 TIF Note at 6.5% interest. This Note was issued to Wooddale Catered Living on August 1, 2013. The EDA has pledged 95% of the tax increment revenues from the project. This Note should be paid in full by February 1, 2017. $5,000,000 Interfund Loan for site improvements. The EDA approved an interfund loan on December 20, 2010 for public improvements associated with the District and will be repaid from 100% of the TIF generated from the extension of the District. To date, the City has advanced $3,562,056 of the loan. $820,000 Tax Exempt TIF Revenue Note of 2013A. This bond was issued on July 29, 2013 and is payable at 4.0% to Webster LLC for the Adagio Senior Apartments. This Note should be paid in full by August 1, 2019. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 69
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 69 $200,000 Tax Exempt TIF Revenue Note of 2013B. This bond was issued on July 29, 2013 and is payable at 4.00% to Medley Row Town Homes. This Note should be paid in full by February 1, 2022. Other Development Agreement Compliance: ROTTLUND 1. Look Back. Within 60 days after closing to third parties of the final unit a look back would be completed. If, based on such review, the actual profit for the Developer exceeds a 12% rate of return, then 50 percent of excess amount of profit was to be applied as prepayment of the outstanding principal amount of the Note. The look back was completed in 2008 and the developer‘s expected rate of return was below the 12% threshold so there was no excess profit to prepay the TIF note. HOIGAARD VILLAGE 1. Association and Apartment Covenants. The City shall be entitled to review and approve the articles, bylaws and declaration of restrictive covenants for the condominium association and sub-associations 2. Special Service District. Upon written request by the City, the developer will submit required petition to establish a special service district encompassing the redevelopment property and any other property identified by the City, and to levy a special service charge. WOODDALE CATERED LIVING LLC. 1. Termination of right to Note. All conditions for delivery of the Note must be met by no later than March 31, 2012, which date is less than ten (10) years after the date of certification of the TIF District by the County and complies with the so-called five-year rule under Section 469.1763, subd. 3(c) of the TIF Act, as amended during the 2009 State legislative session. 2. Minimum Assessment Agreement. The minimum market value as of January 2, 2012 shall be $6,825,000 and the minimum market value as of January 2, 2013 shall be $13,650,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. 3. Look Back. Within 60 days after the earliest of (i) stabilization (95% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds a 20% internal rate of return (IRR), then 50% of the excess percentage of the profit will be Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 70
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 70 applied as prepayment of the outstanding principal amount of the TIF Note. The look back was completed in 2013 and the developer‘s expected IRR was below the 20% threshold so there was no excess profit to prepay the TIF note. 4. Management. The Developer shall at all times engage a property management company with substantial experience in operating mixed use developments, subject to approval by the Authority, which approval will not be unreasonably withheld. The Developer will annually submit evidence of such management by February 1 of each year. 5. Plaza. The Developer shall construct an outdoor Plaza as depicted in the Site Plan. 6. Special Service District. Upon written request by the City, the developer will submit required petition to renew any levy of special service charges for Special Service District No. 6. By no later than December 31, 2011, the developer shall submit to the City for review and approval a plan for maintenance and operation of all pedestrian and landscaping improvements located within the redevelopment property Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Elmwood District met the requirement when the City approved the Development Agreement with Union Land II LLC in March 2006. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Elmwood Renewal and Renovation district fits this timeline and its four year rule was May 2011. The City reported on the four year activity in November 2009 and reported to the County that two parcels did not meet the deadline for qualifying activity. They were 16-117-21-34-0034 (Center Park) and 16-117-21-21-0053 (Center Park). Parcel 16-117-21-34-0034 was reinstated to the district for payable 2011. Parcel 16-117-21-21-0053 has not been reinstated but is not necessary since it will remain a tax exempt use. Five Year Rule: At least 80% of tax increment revenues generated within Elmwood Village must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Elmwood Village Renewal and Renovation district fits this timeline and the five year rule was May 31, 2015 for Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 71
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 71 the original area and February 21, 2016 for the modified area (Hoigaards redevelopment area). The five year rule was met for the original area Since the EDA has entered into contracts and obligated TIF dollars prior to that time. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after May 2010. Recommendation: 1. 5-Year Rule. Continue to review if there are any development opportunities to take advantage of the extended 5-year rule to 10-years, which is February 21, 2016 for the modified area (Hoigaards redevelopment area). 2. Use of Increment From Legislative Extension. There is approximately $900,000 beginning in 2018 of unobligated tax increment available per year for use in accordance with the TIF Plan for repayment on the interfund loan for site improvements and public improvements related to Highway 100 and Woodale and 36th Avenues. The cash flow shown below includes expenditures for a traffic signal at West 36th and Xenwood Avenue in 2015 and reconstruction of Wooddale Avenue and West 36th Street in 2018. 3. Interfund Loan for Elmwood. On December 20, 2010, the EDA approved an interfund loan for up to $5 million for expenditure on various public improvements within the District. To date, the City/EDA has expended nearly $3.3 million under this interfund loan and has identified another $1.9 million in future expenditures. We recommend updating and increasing the Interfund Loan resolution for the Elmwood TIF district from $5,000,000 to $5,500,000 to cover the additional funds anticipated within the District for use on the identified public improvements (increase of $500,000). Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 72
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 72 City of St. Louis ParkElmwood Village Commons TIF DistrictBasic AssumptionsOption B District: 1312Inflation Rate 0.00%Assumes Last Increment In 2029 Legal MaximumBaseTotalTax RateDuration extended through special legislation2004- - 120.9420%Frozen rate 114.2710%2005134,088 134,088 114.2710%2011174,476 1,057,764 121.8240%2012174,476 971,720 130.7480%2013168,836 1,003,051 133.1340%2014168,836 1,190,506 138.0900%2015168,836 1,593,547 130.0480%Cash Flow Projections0.00%5.00%Fiscal Tax Fiscal Tax Other Invest Debt 2007 Tax 2006 Tax 2010A2010BAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparityCapturedRateYearIncrementRevenueIncomeServiceIFLIncrement NoteIncrement NoteHOA BondsHOA BondsMedleyAdagioGreccoExpenseExpensesBalance6 2/1 20132012 902,424 6,774 - 131,927 - - 338,487 155,833 9,209 356,136 (3,142,079) 6.5 8/1 2013 168,836 1,003,051 (1,807) 832,408 114.2710%7 2/1 20142013 937,430 441 - 131,928 - - 333,237 86,042 17,830 - (2,773,245) 7.5 8/1 2014 168,836 1,190,506 (3,474) 1,018,196 114.2710%8 2/1 20152014 1,150,713 5,346 - 127,859 - - 341,982 111,058 5,657 12,439 9,787 (2,225,968) 8.5 8/1 2015 168,836 1,593,547 (11,820) 1,412,891 114.2710%9 2/1 20162015 1,614,525 - - 113,074 - - 345,022 70,516 23,170 118,848 293,356 80,726 605,000 (2,261,156) 9.5 8/1 2016 168,836 1,593,547 (11,820) 1,412,891 114.2710%10 2/1 20172016 1,614,525 - - 97,697 - - 346,362 70,910 35,027 212,818 251,466 80,726 - (1,741,636) 10.5 8/1 2017 168,836 1,593,547 (11,820) 1,412,891 114.2710%11 2/1 20182017 1,614,525 - - 81,704 - - 356,762 68,039 35,027 212,818 21,507 80,726 - (983,695) 11.5 8/1 2018 168,836 1,593,547 (11,820) 1,412,891 114.2710%12 2/1 20192018 1,614,525 - - 65,073 - - 365,869 60,917 35,027 212,818 - 80,726 3,027,000 (3,216,599) 12.5 8/1 2019 168,836 1,593,547 (11,820) 1,412,891 114.2710%13 2/1 20202019 1,614,525 - - 47,776 - - 367,500 60,347 35,027 183,752 80,726 - (2,377,202) 13.5 8/1 2020 168,836 1,593,547 (11,820) 1,412,891 114.2710%14 2/1 20212020 1,614,525 - - 29,787 - - 377,625 52,005 35,027 80,726 - (1,337,846) 14.5 8/1 2021 168,836 1,593,547 (11,820) 1,412,891 114.2710%15 2/1 20222021 1,614,525 - - 11,078 - - 381,625 49,580 35,027 80,726 - (281,358) 15.5 8/1 2022 168,836 1,593,547 (11,820) 1,412,891 114.2710%16 2/1 20232022 1,614,525 - - 6,730 - - 389,625 48,058 2,973 80,726 800,000 5,055 16.5 8/1 2023 168,836 1,593,547 (11,820) 1,412,891 114.2710%17 2/1 20242023 1,614,525 - - - - - 328,000 40,348 80,726 1,100,000 70,505 17.5 8/1 2024 168,836 1,593,547 (11,820) 1,412,891 114.2710%18 2/1 20252024- - - - - - - - 70,505 Total21,322,305117,241 956,052 976,560 1,771,654 2,762,592 4,653,075 873,653 241,960 953,493 566,329 0 1,028,729 13,122,87170,505Tax Capacity(Per TIF Plan Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 73
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 73 Maximum amount 820,000$ Interest Rate 4.00%Note Issue Date 7/29/2013Final Payment 2/1/2021Total Tax Tax Increment CumulativeIncrement Available at Principle Unpaid Tax IncrementAvailable 95.00% Paid Interest PaidYear7/29/2013- - - - - 820,000.00$ 08/1/2013273.33 - - - - 820,273.33$ 02/1/201416,770.03 - - - - 837,043.37$ 08/1/201416,833.87 13,093.86 12,439.16 - (3,740.02) 12,439.16 837,043.37$ 0.52/1/201516,740.87 13,093.86 12,439.16 - (3,647.01) 24,878.32 837,043.37$ 18/1/2015 16,740.87 112,009.41 106,408.93 86,021.06 3,647.01 131,287.26 751,022.31$ 1.52/1/201615,020.45 112,009.41 106,408.93 87,648.47 3,740.02 237,696.19 663,373.84$ 28/1/201613,267.48 112,009.41 106,408.93 93,141.46 - 344,105.13 570,232.38$ 2.52/1/201711,404.65 112,009.41 106,408.93 95,004.29 - 450,514.06 475,228.09$ 38/1/20179,504.56 112,009.41 106,408.93 96,904.37 - 556,923.00 378,323.72$ 3.52/1/20187,566.47 112,009.41 106,408.93 98,842.46 - 663,331.93 279,481.26$ 48/1/20185,589.63 112,009.41 106,408.93 100,819.31 - 769,740.87 178,661.95$ 4.52/1/20193,573.24 112,009.41 106,408.93 102,835.70 - 876,149.80 75,826.26$ 58/1/20191,516.53 112,009.41 77,342.78 75,826.25 - 953,492.58 0.00$ 5.52/1/20200.00 - - (0.00) - 953,492.58 0.00$ 68/1/20200.00 - - (0.00) - 953,492.58 0.00$ 6.52/1/20210.00 - - (0.00) - 953,492.58 0.00$ 7TOTAL134,801.97 953,492.58 837,043.36 0.00 City of St. Louis Park2013A TIF Note - Webster LLC. (Adagio)Date Interest DueNote Balance Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 74
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 74 Maximum amount 200,000$ Interest Rate 4.00%Note Issue Date 7/29/2013Final Payment 2/1/2023Total Tax Tax Increment CumulativeIncrement Available at Principle Tax IncrementAvailable 95.00% Paid PaidYear7/29/2013- - - - - 200,000.00$ 08/1/201366.67 - - - - 200,066.67$ 02/1/20144,090.25 - - - - 204,156.92$ 08/1/20144,105.82 5,954.79 5,657.05 1,551.23 5,657.05 202,605.69$ 0.52/1/20154,052.11 5,954.79 5,657.05 1,604.94 11,314.10 201,000.75$ 18/1/2015 4,020.02 18,435.04 17,513.29 13,493.27 28,827.39 187,507.48$ 1.52/1/20163,750.15 18,435.04 17,513.29 13,763.14 46,340.68 173,744.34$ 28/1/20163,474.89 18,435.04 17,513.29 14,038.40 63,853.97 159,705.94$ 2.52/1/20173,194.12 18,435.04 17,513.29 14,319.17 81,367.25 145,386.77$ 38/1/20172,907.74 18,435.04 17,513.29 14,605.55 98,880.54 130,781.22$ 3.52/1/20182,615.62 18,435.04 17,513.29 14,897.66 116,393.83 115,883.56$ 48/1/20182,317.67 18,435.04 17,513.29 15,195.62 133,907.12 100,687.94$ 4.52/1/20192,013.76 18,435.04 17,513.29 15,499.53 151,420.41 85,188.41$ 58/1/20191,703.77 18,435.04 17,513.29 15,809.52 168,933.69 69,378.89$ 5.52/1/20201,387.58 18,435.04 17,513.29 16,125.71 186,446.98 53,253.18$ 68/1/20201,065.06 18,435.04 17,513.29 16,448.22 203,960.27 36,804.96$ 6.52/1/2021736.10 18,435.04 17,513.29 16,777.19 221,473.56 20,027.77$ 78/1/2021400.56 18,435.04 17,513.29 17,112.73 238,986.85 2,915.03$ 7.52/1/202258.30 18,435.04 2,973.33 2,915.03 241,960.18 0.00$ 88/1/20220.00 - - (0.00) 241,960.18 0.00$ 8.52/1/20230.00 - - (0.00) 241,960.18 0.00$ 9TOTAL41,501.32 241,960.18 204,156.91 City of St. Louis Park2013B TIF Note - Medley Row LLCDate Interest DueNote Balance Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 75
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 75 Maximum amount 490,000$ Interest Rate 6.50%Note Issue Date 8/1/2013Final Payment 2/1/2021Total Tax Tax Increment CumulativeIncrement Available at Principle Tax IncrementAvailable 95.00% Paid PaidYear8/1/2013- - - - - 490,000.00$ 02/1/201416,278.89 - - - - 506,278.89$ 08/1/201416,545.48 - - - - 522,824.36$ 0.52/1/201517,369.39 176,445.41 167,623.14 150,253.75 167,623.14 372,570.61$ 18/1/2015 12,175.81 132,350.43 125,732.91 113,557.09 293,356.05 259,013.52$ 1.52/1/20168,605.00 132,350.43 125,732.91 117,127.90 419,088.96 141,885.61$ 28/1/20164,662.52 132,350.43 125,732.91 121,070.39 544,821.87 20,815.22$ 2.52/1/2017691.53 132,350.43 21,506.75 20,815.22 566,328.62 0.00$ 38/1/20170.00 - - (0.00) 566,328.62 0.00$ 3.52/1/20180.00 - - (0.00) 566,328.62 0.00$ 48/1/20180.00 - - (0.00) 566,328.62 0.00$ 4.52/1/20190.00 - - (0.00) 566,328.62 0.00$ 58/1/20190.00 - - (0.00) 566,328.62 0.00$ 5.52/1/20200.00 - - (0.00) 566,328.62 0.00$ 68/1/20200.00 - - (0.00) 566,328.62 0.00$ 6.52/1/20210.00 - - (0.00) 566,328.62 0.00$ 7TOTAL76,328.62 566,328.62 522,824.36 City of St. Louis ParkGrecco - TowerlightDate Interest DueNote BalanceStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 76
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 76 Highway 7 Corporate Center Description: Highway 7 Business Center (redevelopment district) and the Highway 7 Hazardous Substance Subdistrict (County #1313) were established on May 15, 2006 and is located within the Redevelopment Project No 1. Originally the district encompassed five (5) parcels of land and was established to facilitate the cleanup of contaminated land and the construction of a 78,000 square foot multi-tenant office/showroom/tech building. The City also received environmental grant funds from Hennepin County, the Minnesota Department of Employee and Economic Development and the Metropolitan Council in the amount of $4,950,000, $1,904,456 and $967,000 respectively. A development agreement was signed on June 28, 2006 with the Highway 7 Business Center LLC in which the developer agreed to construct a 78,000 square foot multi-tenant industrial building, including all related parking improvements. Adopted………………….... 05/15/2006 Requested Date……………. 06/29/2006 Certified Date………….….. 07/17/2006 First Increment…………..…. .… 07/2007 Required Decertification…… 12/31/2032 Anticipated Decertification….12/31/2027 Before AfterStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 77
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 77 Former and Current PID Numbers: Former PIDFormer UseNew PIDNew Use17-117-21-44-0002Vacant Land17-117-21-44-0023Multi Tenant17-117-21-44-0024LBF17-117-21-44-0060 Caryn International School17-117-21-44-0065Golden AutoHwy 7 Corporate Center17-117-21-44-006917-117-21-44-0070 Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 107.2660% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. MN Statute 469.176 subd. 4e specifies the activities on which tax increment from a hazardous substance subdistrict may be spent. In general, tax increment must be spent only on removing hazardous substances from the site, pollution testing and related administrative and legal costs. Obligations: There are four (4) PAYGO notes, totaling $2,555,000 that were issued for this project on July 24, 2008 (Note A and B) and October 6, 2008 (Note C & D) as follows: $2,100,000 PAYGO Note A for Highway Business center LLC $360,000 PAYGO Note B for Highway Business Center LLC $72,000 PAYGO Note C for Highway Business Center LLC $23,000 PAYGO Note D for Highway Business Center LLC Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 78
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 78 These Notes carry a 1% interest rate and are paid from 95% of the available increment. The available increment is prorated semi-annually with the TIF payments are prorated to Notes A and B first before payment is made to Notes C and D 86% being paid to the A Note and 14% being paid to the B Note. It is anticipated that the Notes A and B will be repaid in 2025 and Notes C and D will be repaid in 2026 and 2027. Other Development Agreement Compliance: 1. Railroad Easement. By December 31, 2006, the Developer agrees to execute and deliver to the City the Railroad Easement Agreement. Under the Easement Agreement, the Developer grants to the City an easement for railroad right of way purposes on a portion of the property. 2. Look Back. (a) Within 60 days before any Transfer of the property (excluding any Transfer to an Affiliate) that occurs within five years after the date of issuance of the Certificate of Completion, the Developer must deliver to the EDA evidence of its annualized cumulative internal rate of return from the property (the “IRR”), calculated as of the date of closing on the transfer. The IRR shall be calculated with equity, revenues and expenses all determined in accordance with generally accepted accounting principles, provided that the amount of Developer’s equity must exclude the principal amount of the Notes, and any developer’s fee in excess of 7.0 percent of total development costs. The amount by which the IRR exceeds 12.0 percent is a percentage referred to as “Excess Percentage.” The Excess Percentage, multiplied by Redeveloper’s equity (as calculated for purposes of determining the IRR), is the “Participation Amount.” The Redeveloper must pay 50 percent of the Participation Amount to the Authority upon closing on the Transfer. If the Developer does not affect a Transfer within the five-year period the Developer’s obligation under this Section is deemed terminated. The CO was issued on November 21, 2007, which means the 5-year period would expire on November 21, 2012. In June 2012 the City completed the required lookback calculation since the property was going to be sold in July 2012. It was determined that the development did not cash flow as expected and therefore had a negative IRR. There was no reduction in the principal amount of the TIF Notes due to this and the property was sold to Ax Rer LP (Artis Reit). 3. Assessment Agreement. The Developer shall execute a Minimum Assessment Agreement (MAA). The minimum market value shall be $6,300,000 as of January 2, 2008 and each January 2 thereafter, notwithstanding the progress of construction of the Minimum Improvements by such date. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Highway 7 Corporate Center Redevelopment district fits this timeline and its four year rule was July 17, 2012 and was met because qualifying activities happened prior to this date. Five Year Rule: Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 79
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 79 At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years from the certification date for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Highway 7 Corporate Center Redevelopment district fits this timeline and its five year rule is now July 17, 2016. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 2012. Recommendations: None at this time. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 80
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 80 City of St. Louis ParkHighway 7 Business Center TIF DistrictBasic AssumptionsOption B District: 1313Inflation Rate 0.00%Assumes Last Increment In 2027 Expected termBaseTotalTax Rate2032 Legal Maximum2004- - 120.9420%Frozen rate 107.2660%2005- - 114.2710%201153,204 190,576 121.8240%201253,504 182,676 130.7480%201353,504 182,676 133.1340%201453,504 182,676 138.0900%201553,504 182,676 130.0480%Cash Flow Projections0.00%5.00%Fiscal Tax Fiscal Tax OtherInvestAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparityCapturedRateYearIncrementRevenueIncomeNote ANote BNote CNote DIFLExpenseExpensesBalance5.5 8/1 2012 - 182,676 (45,206) 137,470 107.2660%6 2/1 20132012 146,928 - 121,032 20,748 4,161 - 14,479 6.5 8/1 2013 - 182,676 (44,107) 138,569 107.2660%7 2/1 20142013 148,103 - 119,632 20,508 5,640 - 16,803 7.5 8/1 2014 - 182,676 (42,898) 139,778 107.2660%8 2/1 20152014 149,394 47,356 - 120,632 20,680 16,526 - 55,715 8.5 8/1 2015 - 182,676 (45,217) 137,459 107.2660%9 2/1 20162015 147,447 - 120,150 20,597 7,372 - 55,043 9.5 8/1 2016 - 182,676 (45,217) 137,459 107.2660%10 2/1 20172016 147,447 - 119,145 20,425 7,372 - 55,547 10.5 8/1 2017 - 182,676 (45,217) 137,459 107.2660%11 2/1 20182017 147,447 - 119,145 20,425 7,372 - 56,052 11.5 8/1 2018 - 182,676 (45,217) 137,459 107.2660%12 2/1 20192018 147,447 - 119,145 20,425 7,372 - 56,556 12.5 8/1 2019 - 182,676 (45,217) 137,459 107.2660%13 2/1 20202019 147,447 - 119,145 20,425 7,372 - 57,060 13.5 8/1 2020 - 182,676 (45,217) 137,459 107.2660%14 2/1 20212020 147,447 - 119,145 20,425 7,372 - 57,565 14.5 8/1 2021 - 182,676 (45,217) 137,459 107.2660%15 2/1 20222021 147,447 - 119,145 20,425 7,372 - 58,069 15.5 8/1 2022 - 182,676 (45,217) 137,459 107.2660%16 2/1 20232022 147,447 - 119,145 20,425 7,372 - 58,574 16.5 8/1 2023 - 182,676 (45,217) 137,459 107.2660%17 2/1 20242023 147,447 - 119,145 20,425 7,372 - 59,078 17.5 8/1 2024 - 182,676 (45,217) 137,459 107.2660%18 2/1 20252024 147,447 - 119,145 20,425 7,372 - 59,583 18.5 8/1 2025 - 182,676 (45,217) 137,459 107.2660%19 2/1 20262025 147,447 - 119,145 20,425 7,372 - 60,087 19.5 8/1 2026 - 182,676 (45,217) 137,459 107.2660%20 2/1 20272026147,447 - 119,145 20,425 7,372 - 60,592 20.5 8/1 2027 - 182,676 (45,217) 137,459 107.2660%21 2/1 20282027 147,447 - 14,556 2,495 86,788 27,804 7,372 - 69,022 21.5 8/1 2028 - 182,676 (45,217) 137,459 107.2660%22 2/1 20292028- - - - - 69,022 Total3,032,850 7,869,604 1,036 2,289,808 392,538 86,788 27,8040 189,210 7,848,31869,022Tax CapacityDebt Service Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 81
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 81 Note amount 2,100,000.00$ Interest Rate 1.00%Note Issue Date 7/24/2008Final Payment 2/1/2034Total Tax Tax Increment Increment Prorated toDate Interest DueAvailable Note A Total Payments Note Balance2/1/2006 - - 2,100,000.00$ 8/1/2006- 2,100,000.00$ 2/1/2007- 2,100,000.00$ 8/1/2007- 2,100,000.00$ 2/1/2008- 2,100,000.00$ 8/1/2008 350.00 136,025.07 110,313.17 110,313.17 1,990,036.83$ 2/1/2009 9,950.18 72,655.77 58,922.06 169,235.23 1,941,064.96$ 8/1/2009 9,705.32 72,747.08 62,101.17 231,336.40 1,888,669.11$ 2/1/2010 9,443.35 72,747.08 62,101.17 293,437.57 1,836,011.29$ 8/1/2010 9,231.06 75,158.02 64,159.29 357,596.85 1,781,083.06$ 2/1/2011 8,905.42 75,158.02 64,159.29 421,756.14 1,725,829.19$ 8/1/2011 8,629.15 71,989.90 61,454.79 483,210.93 1,673,003.54$ 2/1/2012 8,365.02 71,989.90 61,454.79 544,665.72 1,619,913.77$ 8/1/2012 8,099.57 69,790.70 59,577.43 604,243.15 1,568,435.91$ 2/1/2013 7,842.18 69,790.70 59,577.43 663,820.58 1,516,700.66$ 8/1/2013 7,583.50 70,349.09 60,054.10 723,874.68 1,464,230.06$ 2/1/2014 7,321.15 70,349.09 60,054.10 783,928.78 1,411,497.11$ 8/1/2014 7,057.49 70,962.10 60,577.40 844,506.19 1,357,977.19$ 2/1/2015 6,789.89 70,962.10 60,577.40 905,083.59 1,304,189.67$ 8/1/20156,520.95 69,784.99 59,572.55 964,656.15 1,251,138.07$ 2/1/20166,255.69 69,784.99 59,572.55 1,024,228.70 1,197,821.20$ 8/1/20165,989.11 69,784.99 59,572.55 1,083,801.26 1,144,237.75$ 2/1/20175,721.19 69,784.99 59,572.55 1,143,373.81 1,090,386.39$ 8/1/20175,451.93 69,784.99 59,572.55 1,202,946.37 1,036,265.76$ 2/1/20185,181.33 69,784.99 59,572.55 1,262,518.92 981,874.54$ 8/1/20184,909.37 69,784.99 59,572.55 1,322,091.47 927,211.36$ 2/1/20194,636.06 69,784.99 59,572.55 1,381,664.03 872,274.86$ 8/1/20194,361.37 69,784.99 59,572.55 1,441,236.58 817,063.68$ 2/1/20204,085.32 69,784.99 59,572.55 1,500,809.14 761,576.44$ 8/1/20203,807.88 69,784.99 59,572.55 1,560,381.69 705,811.77$ 2/1/20213,529.06 69,784.99 59,572.55 1,619,954.25 649,768.27$ 8/1/20213,248.84 69,784.99 59,572.55 1,679,526.80 593,444.56$ 2/1/20222,967.22 69,784.99 59,572.55 1,739,099.36 536,839.23$ 8/1/20222,684.20 69,784.99 59,572.55 1,798,671.91 479,950.87$ 2/1/20232,399.75 69,784.99 59,572.55 1,858,244.47 422,778.07$ 8/1/20232,113.89 69,784.99 59,572.55 1,917,817.02 365,319.40$ 2/1/20241,826.60 69,784.99 59,572.55 1,977,389.58 307,573.45$ 8/1/20241,537.87 69,784.99 59,572.55 2,036,962.13 249,538.76$ 2/1/20251,247.69 69,784.99 59,572.55 2,096,534.69 191,213.90$ 8/1/2025956.07 69,784.99 59,572.55 2,156,107.24 132,597.41$ 2/1/2026662.99 69,784.99 59,572.55 2,215,679.80 73,687.84$ 8/1/2026368.44 69,784.99 59,572.55 2,275,252.35 14,483.73$ 2/1/202772.42 69,784.99 14,556.15 2,289,808.50 (0.00)$ TOTAL189,808.50 2,745,514.48 2,289,808.50 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Highway 7 Corporate CenterNOTE A - Hwy 7 Business Center LLC Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 82
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 82 Maximum amount 360,000.00$ Interest Rate 1.00%Note Issue Date 7/24/2008Final Payment 2/1/2034Total Tax Tax Increment Increment Prorated to Date Interest DueAvailable Note B Total Payments Note Balance2/1/2006 - 360,000.00$ 8/1/2006- 360,000.00$ 2/1/2007- 360,000.00$ 8/1/2007- 360,000.00$ 2/1/2008- 360,000.00$ 8/1/2008 60.00 18,910.83 18,910.83 341,149.17$ 2/1/2009 1,705.75 10,100.92 29,011.75 332,753.99$ 8/1/2009 1,663.77 10,645.91 39,657.67 323,771.85$ 2/1/2010 1,618.86 10,645.91 50,303.58 314,744.79$ 8/1/2010 1,582.47 10,998.73 61,302.32 305,328.52$ 2/1/2011 1,526.64 10,998.73 72,301.05 295,856.43$ 8/1/2011 1,479.28 10,535.11 82,836.16 286,800.61$ 2/1/2012 1,434.00 10,535.11 93,371.27 277,699.50$ 8/1/2012 1,388.50 10,213.27 103,584.54 268,874.73$ 2/1/2013 1,344.37 10,213.27 113,797.81 260,005.83$ 8/1/2013 1,300.03 10,295.00 124,092.81 251,010.86$ 2/1/2014 1,255.05 10,294.97 134,387.78 241,970.94$ 8/1/2014 1,209.85 10,384.70 144,772.48 232,796.10$ 2/1/2015 1,163.98 10,384.70 155,157.18 223,575.38$ 8/1/2015 1,117.88 10,212.44 165,369.62 214,480.82$ 2/1/2016 1,072.40 10,212.44 175,582.05 205,340.79$ 8/1/20161,026.70 10,212.44 185,794.49 196,155.05$ 2/1/2017980.78 10,212.44 196,006.93 186,923.39$ 8/1/2017934.62 10,212.44 206,219.37 177,645.57$ 2/1/2018888.23 10,212.44 216,431.81 168,321.36$ 8/1/2018841.61 10,212.44 226,644.25 158,950.52$ 2/1/2019794.75 10,212.44 236,856.68 149,532.84$ 8/1/2019747.66 10,212.44 247,069.12 140,068.06$ 2/1/2020700.34 10,212.44 257,281.56 130,555.97$ 8/1/2020652.78 10,212.44 267,494.00 120,996.31$ 2/1/2021604.98 10,212.44 277,706.44 111,388.85$ 8/1/2021556.94 10,212.44 287,918.88 101,733.36$ 2/1/2022508.67 10,212.44 298,131.32 92,029.59$ 8/1/2022460.15 10,212.44 308,343.75 82,277.30$ 2/1/2023411.39 10,212.44 318,556.19 72,476.24$ 8/1/2023362.38 10,212.44 328,768.63 62,626.19$ 2/1/2024313.13 10,212.44 338,981.07 52,726.88$ 8/1/2024263.63 10,212.44 349,193.51 42,778.07$ 2/1/2025213.89 10,212.44 359,405.95 32,779.53$ 8/1/2025163.90 10,212.44 369,618.38 22,730.99$ 2/1/2026113.65 10,212.44 379,830.82 12,632.20$ 8/1/202663.16 10,212.44 390,043.26 2,482.92$ 2/1/202712.41 2,495.34 392,538.60 (0.00)$ TOTAL32,538.60 - 392,538.60 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Highway 7 Corporate CenterNOTE B - Hwy 7 Business Center LLC Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 83
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 83 Maximum amount 72,000.00$ Interest Rate 1.00%Note Issue Date 7/24/2008Accrual date 10/6/2008Final Payment 2/1/2034Total Tax Tax Increment IncrementAvailable atDate Interest DueAvailable 95.00% Total Payments Note Balance2/1/2006 - - 72,000.00$ 8/1/2006 - - 72,000.00$ 2/1/2007- - 72,000.00$ 8/1/2007- - 72,000.00$ 2/1/2008- - 72,000.00$ 8/1/200812.00 - - 72,012.00$ 2/1/2009360.06 - - 72,372.06$ 8/1/2009361.86 - - 72,733.92$ 2/1/2010363.67 - - 73,097.59$ 8/1/2010365.49 - - 73,463.08$ 2/1/2011367.32 - - 73,830.39$ 8/1/2011369.15 - - 74,199.55$ 2/1/2012371.00 - - 74,570.54$ 8/1/2012372.85 - - 74,943.40$ 2/1/2013374.72 - - 75,318.11$ 8/1/2013376.59 - - 75,694.70$ 2/1/2014378.47 - - 76,073.18$ 8/1/2014380.37 - - 76,453.54$ 2/1/2015382.27 - - 76,835.81$ 8/1/2015384.18 - - 77,219.99$ 2/1/2016386.10 - - 77,606.09$ 8/1/2016388.03 - - 77,994.12$ 2/1/2017389.97 - - 78,384.09$ 8/1/2017391.92 - - 78,776.01$ 2/1/2018393.88 - - 79,169.89$ 8/1/2018395.85 - - 79,565.74$ 2/1/2019397.83 - - 79,963.57$ 8/1/2019399.82 - - 80,363.39$ 2/1/2020401.82 - - 80,765.20$ 8/1/2020403.83 - - 81,169.03$ 2/1/2021405.85 - - 81,574.87$ 8/1/2021407.87 - - 81,982.75$ 2/1/2022409.91 - - 82,392.66$ 8/1/2022411.96 - - 82,804.63$ 2/1/2023414.02 - - 83,218.65$ 8/1/2023416.09 - - 83,634.74$ 2/1/2024418.17 - - 84,052.92$ 8/1/2024420.26 - - 84,473.18$ 2/1/2025422.37 - - 84,895.55$ 8/1/2025424.48 - - 85,320.02$ 2/1/2026426.60 - - 85,746.62$ 8/1/2026428.73 - - 86,175.36$ 2/1/2027430.88 52,818.34$ 50,177.42 50,177.42 36,428.81$ 8/1/2027182.14 38,537.85$ 36,610.96 86,788.38 (0.00)$ TOTAL14,788.38 91,356.19 86,788.38 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Highway 7 Corporate CenterNOTE C - Hwy 7 Business Center LLC Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 84
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 84 Maximum amount 23,000.00$ Interest Rate 1.00%Note Issue Date 7/24/2008Accrual date 10/6/2008Final Payment 2/1/2034Total Tax Tax Increment IncrementAvailable atDate Interest DueAvailable 95.00% Total Payments Note Balance2/1/2006 - - 23,000.00$ 8/1/2006 - - 23,000.00$ 2/1/2007 - - 23,000.00$ 8/1/2007 - - 23,000.00$ 2/1/2008 - - 23,000.00$ 8/1/2008 3.83 - - 23,003.83$ 2/1/2009115.02 - - 23,118.85$ 8/1/2009115.59 - - 23,234.45$ 2/1/2010116.17 - - 23,350.62$ 8/1/2010116.75 - - 23,467.37$ 2/1/2011117.34 - - 23,584.71$ 8/1/2011117.92 - - 23,702.63$ 2/1/2012118.51 - - 23,821.15$ 8/1/2012119.11 - - 23,940.25$ 2/1/2013119.70 - - 24,059.95$ 8/1/2013120.30 - - 24,180.25$ 2/1/2014120.90 - - 24,301.15$ 8/1/2014121.51 - - 24,422.66$ 2/1/2015122.11 - - 24,544.77$ 8/1/2015122.72 - - 24,667.50$ 2/1/2016123.34 - - 24,790.83$ 8/1/2016123.95 - - 24,914.79$ 2/1/2017124.57 - - 25,039.36$ 8/1/2017125.20 - - 25,164.56$ 2/1/2018125.82 - - 25,290.38$ 8/1/2018126.45 - - 25,416.83$ 2/1/2019127.08 - - 25,543.92$ 8/1/2019127.72 - - 25,671.64$ 2/1/2020128.36 - - 25,800.00$ 8/1/2020129.00 - - 25,929.00$ 2/1/2021129.64 - - 26,058.64$ 8/1/2021130.29 - - 26,188.93$ 2/1/2022130.94 - - 26,319.88$ 8/1/2022131.60 - - 26,451.48$ 2/1/2023132.26 - - 26,583.74$ 8/1/2023132.92 - - 26,716.65$ 2/1/2024133.58 - - 26,850.24$ 8/1/2024134.25 - - 26,984.49$ 2/1/2025134.92 - - 27,119.41$ 8/1/2025135.60 - - 27,255.01$ 2/1/2026136.28 - - 27,391.28$ 8/1/2026136.96 - - 27,528.24$ 2/1/2027137.64 - - 27,665.88$ 8/1/2027138.33 29,267.58$ 27,804.21 27,804.21 (0.00)$ TOTAL4,804.21 29,267.58 27,804.21 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Highway 7 Corporate CenterNOTE D - Hwy 7 Business Center LLC Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 85
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 85 West End Description: West End (County #1314) is a redevelopment district that was established on November 19, 2007 and is located within the Redevelopment Project No 1. Originally the district encompassed six (6) parcels of land and was established to facilitate the redevelopment of a site near I-394 and Highway 100 into approximately 1.5 million square feet of office, 350,000 square feet of retail, 124 hotel units and a 120-unit luxury apartment by Duke Realty. Subsequent to Duke Realty’s acquisition of the parcels, the property has been replatted into 9 parcels. The EDA executed a Development Agreement with Duke Realty Limited Partnership on December 17, 2007. The EDA provided Duke Realty a PAYGO note in a maximum principle of $21.1 million at 6.75% interest. Currently the retail, hotel and apartments have been constructed. Due to the current economic environment for office, it is not anticipated that construction will commence on the first of the three (3) office buildings until 2015, with the final building being completed in 2019. In addition to the PAYGO note, the City issued $5,490,000 in GO TIF bonds in 2008 to pay for various public improvements in the area, which have a priority claim on annual TIF revenue. To date the 350,000 sq/ft of retail (2011), the Homewood Suites hotel (2009), the 119-unit Flats at West End Apartments (2013) and the 158-unit Millenium apartments (2015) have been constructed. Duke sold the retail and undeveloped portion of the project in 2015 to American Realty Capital-Retail Centers of America Inc. Their updated plans include the construction of two (2) office buildings comprised of 707,000 sq/f (to be completed by September 30, 2017 and September 30, 2020 respectively), a 199-unit market rate apartment building to begin construction in 2015, a 164-unit market rate apartment complex anticipated to begin construction in 2016 and one (1) hotel consisting of 130 to 150 rooms to begin construction in 2016. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 86
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 86 Adopted………………..…… 11/19/2007 Requested Date…………..…. 06/30/2008 Certified Date………………07/09/2008 First Increment……..…….…… 07/2011 Anticipated Decertification....12/31/2031 Former and Current PID Numbers: Property AddressFormer PID # Former UseNew PID #'sNew Use5201 Wayzata30-029-24-32-001830-029-24-21-0024Future Office Bldgs - Land East of Utica30-029-24-32-0019 Millennium Apartments30-029-24-32-0020 Olive Garden30-029-24-32-0021 The Flats at West End30-029-24-32-0022 Rainbow Grocery 30-029-24-33-0031 Shops at West End1600 Utica30-029-24-33-0019NoneThis is now a portion of Utica Ave-No PID1621 Park Place30-029-24-33-0002Tennis Club30-029-24-33-0031Shops at West End30-029-24-32-0025 Homeward Suits Hotel30-029-24-32-0026 Existing Bank - Building30-029-24-32-0007Chilis & Olive Garden30-029-24-32-0015Existing Bank5245 Wayzata5353 Wayzata Blvd 1551 Park Place30-029-24-32-0011Novartis Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 103.0550% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 87
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 87 Obligations: There is one GO Tax Increment Bond (2 purposes) and one PAYGO Note for this district as follows: $5,490,000 GO Tax Increment Bonds, Series 2008B - $4,965,000 Senior TIF Bonds and $525,000 5% Admin Bonds. These bonds mature on February 1, 2024. $21,100,000 PAYGO Note - This Note was issued to Duke Realty on August 1, 2011 at 6.75%. The EDA has pledged 95% of the tax increment revenues from the project for a twenty-one (21) year term (end date of August 1, 2031). The City issued the 2008B TIF Bonds to pay for public improvements required for the West End development. Pursuant to the Development Agreement, the City could issue TIF Bonds that produced net proceeds (after deducting costs of issuance, discount and capitalized interest) in the amount of $4,500,000 (Senior TIF Bonds) and were required to have 120% debt service coverage. These Bonds have a first priority on the TIF and are paid from 95% of the increment generated by all property in the TIF District. If the increment generated is insufficient to make the Senior TIF Bond payments, then Duke Realty is required to make up this shortfall within 20 days of receipt of notice from the EDA (failure by the EDA to provide this notice does not relieve Duke Realty of its obligation to make the required payment). The City could also issue a bond of any size it determined that is secured in whole or in part by any portion of the 5% of Tax Increments that are withheld by the EDA as administration fee. These Bonds were issued as part of the 2008B TIF Bond issue and had a principle amount of $525,000. Other Development Agreement Compliance: 1. LEED Certification. The core and shell of all office facilities are required to be LEED-certified (or at least meet current LEED requirements). 2. Outdoor Gathering Spaces. Duke Realty will provide outdoor gathering spaces and at least one 5,000-square foot indoor gathering space, that are privately owned by and available for public use (this includes public restrooms). The City and Duke Realty will enter into use agreements regarding these spaces to describe their respective responsibilities regarding procedures for notice and comment about activities, insurance and the like. 3. Neighborhood Police Station. Duke Realty will provide to City, without charge, approximately 250 square feet of finished space in Phase IIA for use as a neighborhood City police station. Upon completion, Duke Realty must operate and maintain the facility at their cost, including cleaning, heat and electricity. 4. Minimum Assessment Agreement. Duke Realty is required to execute a Minimum Assessment Agreement (MAA) for each phase. The Phase IIA MAA (retail portion) has been executed and states that the minimum market value shall be $70,216,260 on January 1, 2009 for payable 2010 and shall be in effect for the term of the obligation. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 88
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 88 5. Lookback Provision. The EDA was required to perform a “lookback” calculation 60 days after the earliest of (i) the date a Phase or facility reaches 95% lease-up; (ii) the date of any Transfer in whole or in part of the subject Phase or facility; or (iii) three years after the date of issuance of the Certificate of Completion for the Phase or subject facility (September 30, 2012). The Redeveloper had to submit evidence of its Yield on Total Project Costs, which is Net Operating Income in the year of the calculation divided by Total Project Costs to date. If that result is more than 15%, the EDA and Redeveloper share equally in the excess income. The EDA’s share is used to pay off outstanding PAYGO TIF Notes. The property was sold in 2015 and the lookback was completed. Since the yield to the developer was not more than 15%, there was no reduction in the Note. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The West End Redevelopment district fits this timeline and its four year rule is now July 9, 2014. Since qualifying redevelopment activities have been completed, the four year rule has been met. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The West End Redevelopment district fits this timeline and its five year rule is now July 9, 2018. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 2013. Recommendations: 1. 5-Year Rule. Continue to review if there are any development opportunities to take advantage of the extended 5-year rule to 10-years, which is July 9, 2018. 2. Decertification. This district will need to be decertified when all obligations are paid, which is estimated to be August 2031. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 89
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 89 City of St. Louis ParkWest End TIF DistrictBasic AssumptionsOption B District:1314Inflation Rate0.00%Assumes Last Increment In2036 Legal MaximumBaseTotalTax Rate2031 Expected Term2010859,520 2,153,228 103.0550%Frozen rate103.0550%2011859,520 2,007,820 121.8240%2012859,520 2,024,540 130.7480%2013859,520 2,074,375 133.1340%2014859,520 2,165,785 138.0900%2015859,520 2,443,243 130.0480%Cash Flow Projections1297539.70.00%5.00%FiscalTax Fiscal Tax Other Invest Sr. TIFAdmin TIFAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparitiesCapturedRateYearIncrementRevenueIncomeBndsBondsPaygoExpenseExpensesBalance1.5 8/1 2012 859,520 2,024,540 (407,719) 757,301 103.0550%2 2/1 20132012 777,616 6,262 501,513 22,594 406,058 5,918 19,086 56,838 2.5 8/1 2013 859,520 2,074,375 (411,062) 803,793 103.0550%3 2/1 20142013 825,356 829 501,438 22,594 306,962 8,334 19,086 24,609 3.5 8/1 2014 859,520 2,165,785 (420,962) 885,303 103.0550%4 2/1 20152014 874,766 5,020 500,631 37,331 240,630 14,130 19,086 92,586 4.5 8/1 2015 859,520 2,443,243 (465,869) 1,117,854 103.0550%5 2/1 20162015 1,152,004 499,081 41,719 563,656 15,881 124,253 5.5 8/1 2016 859,520 2,443,243 (465,869) 1,117,854 103.0550%6 2/1 20172016 1,152,004 496,750 45,900 528,524 11,700 193,383 6.5 8/1 2017 859,520 2,443,243 (465,869) 1,117,854 103.0550%7 2/1 20182017 1,152,004 498,081 54,731 596,323 2,869 193,383 7.5 8/1 2018 859,520 2,443,243 (465,869) 1,117,854 103.0550%8 2/1 20192018 1,152,004 498,381 58,231 596,023 192,752 8.5 8/1 2019 859,520 2,443,243 (465,869) 1,117,854 103.0550%9 2/1 20202019 1,152,004 498,081 61,531 596,323 188,822 9.58/1 2020 859,520 2,443,243 (465,869) 1,117,854 103.0550%10 2/1 20212020 1,152,004 496,169 69,394 598,235 177,029 10.5 8/1 2021 859,520 2,443,243 (465,869) 1,117,854 103.0550%11 2/1 20222021 1,152,004 497,494 71,806 596,910 162,823 11.5 8/1 2022 859,520 2,443,243 (465,869) 1,117,854 103.0550%12 2/1 20232022 1,152,004 493,031 78,881 601,373 141,542 12.5 8/1 2023 859,520 2,443,243 (465,869) 1,117,854 103.0550%13 2/1 20242023 1,152,004 492,781 80,619 601,623 118,524 13.5 8/1 2024 859,520 2,443,243 (465,869) 1,117,854 103.0550%14 2/1 20252024 1,152,004 496,216 86,966 598,188 89,159 14.5 8/1 2025 859,520 2,443,243 (465,869) 1,117,854 103.0550%15 2/1 20262025 1,152,004 1,094,404 57,600 89,160 15.5 8/1 2026 859,520 2,443,243 (465,869) 1,117,854 103.0550%16 2/1 20272026 1,152,004 1,094,404 57,600 89,160 16.5 8/1 2027 859,520 2,443,243 (465,869) 1,117,854 103.0550%17 2/1 20282027 1,152,004 1,094,404 57,600 89,161 17.5 8/1 2028 859,520 2,443,243 (465,869) 1,117,854 103.0550%18 2/1 20292028 1,152,004 1,094,404 57,600 89,161 18.5 8/1 2029 859,520 2,443,243 (465,869) 1,117,854 103.0550%19 2/1 20302029 1,152,004 1,094,404 57,600 89,161 19.58/1 2030 859,520 2,443,243 (465,869) 1,117,854 103.0550%20 2/1 20312030 1,152,004 1,094,404 57,600 89,162 20.5 8/1 2031 859,520 2,443,243 (465,869) 1,117,854 103.0550%21 2/1 20322031 1,152,004 1,094,404 57,600 89,162 Total22,822,28660,541 7,015,737 777,485 14,491,653 572,981 5,425,80889,162Tax Capacity Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 90
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 90 Maximum amount 21,100,000$ PAYGO Interest Rate 6.75%Note Issue Date 8/1/2011Final Payment 2/1/2032Total TIF Admin Not Needed Tax Increment Pending Pay Back of Hold back Tax Increment CumulativeAccruedAvailable For Admin Bond Available at Tax Petition Tax Petition for 2nd 1/2 Available For Tax Increment Accrued Interest Interest(Net of OASA Fee) Payment 95.00% Reduction (10%) Settlements Pmt Shortfall PAYGO Note Paid Not Paid Balance21,100,000.00$ 8/1/2011 - 380,236.44 (19,011.82) (11,296.88) 7,714.94$ 361,224.62 (100,734.38) (25,508.01) - (44,509.79) 190,472.43 190,472.43 20,909,527.57$ -$ -$ 12/1/2012 705,696.56 380,236.41 (19,011.82) (11,296.88) 7,714.94$ 361,224.59 (405,734.38) - - - - 190,472.43 20,909,527.57$ 705,696.56 705,696.56$ 1.58/1/2012705,696.56 388,808.16 (19,440.41) (11,296.88) 8,143.53$ 369,367.75 (95,778.13) (16,593.39) - (41,410.68) 215,585.55 406,057.98 20,909,527.57$ 490,111.01 1,195,807.56$ 22/1/2013705,696.56 388,808.15 (19,440.70) (11,296.88) 8,143.82$ 369,367.45 (410,778.13) 3,886.62 - 41,410.68 3,886.62 409,944.60 20,909,527.57$ 701,809.93 1,897,617.50$ 2.58/1/2013705,696.56 412,678.10 (20,655.20) (11,296.88) 9,358.32$ 392,022.90 (90,659.38) - 25,348.77 (23,636.49) 303,075.79 713,020.40 20,909,527.57$ 402,620.76 2,300,238.26$ 32/1/2014705,696.56 412,678.09 (20,655.20) (26,296.88) (5,641.68)$ 392,022.89 (415,659.38) - 23,636.49 - 713,020.40 20,909,527.57$ 705,696.56 3,005,934.81$ 3.58/1/2014705,696.56 454,532.86 (22,726.64) (11,034.38) 11,692.26$ 431,806.21 (84,971.88) (59,019.41) - (47,185.08) 240,629.84 953,650.24 20,909,527.57$ 465,066.71 3,471,001.52$ 42/1/2015705,696.56 420,232.84 (21,011.64) (31,034.38) (10,022.74)$ 399,221.20 (419,971.88) - 47,185.08 26,434.40 953,650.24 20,909,527.57$ 679,262.16 4,150,263.68$ 4.58/1/2015 705,696.56 648,769.85 (32,438.49) (10,684.38) 21,754.11$ 616,331.36 (79,109.38) - - 537,221.98 1,490,872.22 20,909,527.57$ 168,474.58 4,318,738.26$ 52/1/2016705,696.56 503,234.15 (25,161.71) (35,684.38) (10,522.67)$ 478,072.44 (424,109.38) - - 53,963.06 1,544,835.28 20,909,527.57$ 651,733.49 4,970,471.75$ 5.58/1/2016705,696.56 576,002.00 (28,800.10) (10,215.63) 547,201.90 (72,640.63) - - 474,561.27 2,019,396.55 20,909,527.57$ 231,135.29 5,201,607.04$ 62/1/2017705,696.56 576,002.00 (28,800.10) (45,215.63) 547,201.90 (432,640.63) - - 114,561.27 2,133,957.82 20,909,527.57$ 591,135.29 5,792,742.32$ 6.58/1/2017705,696.56 576,002.00 (28,800.10) (9,515.63) 547,201.90 (65,440.63) - - 481,761.27 2,615,719.09 20,909,527.57$ 223,935.29 6,016,677.61$ 72/1/2018705,696.56 576,002.00 (28,800.10) (49,515.63) 547,201.90 (440,440.63) - - 106,761.27 2,722,480.36 20,909,527.57$ 598,935.29 6,615,612.89$ 7.58/1/2018705,696.56 576,002.00 (28,800.10) (8,715.63) 547,201.90 (57,940.63) - - 489,261.27 3,211,741.63 20,909,527.57$ 216,435.29 6,832,048.18$ 82/1/2019705,696.56 576,002.00 (28,800.10) (53,715.63) 547,201.90 (447,940.63) - - 99,261.27 3,311,002.90 20,909,527.57$ 606,435.29 7,438,483.46$ 8.58/1/2019705,696.56 576,002.00 (28,800.10) (7,815.63) 547,201.90 (50,140.63) - - 497,061.27 3,808,064.17 20,909,527.57$ 208,635.29 7,647,118.75$ 92/1/2020705,696.56 576,002.00 (28,800.10) (62,815.63) 547,201.90 (455,140.63) - - 92,061.27 3,900,125.44 20,909,527.57$ 613,635.29 8,260,754.03$ 9.58/1/2020705,696.56 576,002.00 (28,800.10) (6,578.13) 547,201.90 (41,028.13) - - 506,173.77 4,406,299.21 20,909,527.57$ 199,522.79 8,460,276.82$ 102/1/2021705,696.56 576,002.00 (28,800.10) (66,578.13) 547,201.90 (466,028.13) - - 81,173.77 4,487,472.98 20,909,527.57$ 624,522.79 9,084,799.61$ 10.58/1/2021705,696.56 576,002.00 (28,800.10) (5,228.13) 547,201.90 (31,465.63) - - 515,736.27 5,003,209.25 20,909,527.57$ 189,960.29 9,274,759.89$ 112/1/2022705,696.56 576,002.00 (28,800.10) (75,228.13) 547,201.90 (471,465.63) - - 75,736.27 5,078,945.52 20,909,527.57$ 629,960.29 9,904,720.18$ 11.58/1/2022705,696.56 576,002.00 (28,800.10) (3,653.13) 547,201.90 (21,565.63) - - 525,636.27 5,604,581.79 20,909,527.57$ 180,060.29 10,084,780.46$ 122/1/2023705,696.56 576,002.00 (28,800.10) (78,653.13) 547,201.90 (481,565.63) - - 65,636.27 5,670,218.06 20,909,527.57$ 640,060.29 10,724,840.75$ 12.58/1/2023705,696.56 576,002.00 (28,800.10) (1,965.63) 547,201.90 (11,215.63) - - 535,986.27 6,206,204.33 20,909,527.57$ 169,710.29 10,894,551.03$ 132/1/2024705,696.56 576,002.00 (28,800.10) (86,965.63) 547,201.90 (496,215.63) - - 50,986.27 6,257,190.60 20,909,527.57$ 654,710.29 11,549,261.32$ 13.58/1/2024705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 6,804,392.50 20,909,527.57$ 158,494.66 11,707,755.97$ 142/1/2025705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 7,351,594.40 20,909,527.57$ 158,494.66 11,866,250.63$ 14.58/1/2025705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 7,898,796.30 20,909,527.57$ 158,494.66 12,024,745.28$ 152/1/2026705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 8,445,998.20 20,909,527.57$ 158,494.66 12,183,239.94$ 15.58/1/2026705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 8,993,200.10 20,909,527.57$ 158,494.66 12,341,734.59$ 162/1/2027705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 9,540,402.00 20,909,527.57$ 158,494.66 12,500,229.25$ 16.58/1/2027705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 10,087,603.90 20,909,527.57$ 158,494.66 12,658,723.90$ 172/1/2028705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 10,634,805.80 20,909,527.57$ 158,494.66 12,817,218.56$ 17.58/1/2028705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 11,182,007.70 20,909,527.57$ 158,494.66 12,975,713.22$ 182/1/2029705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 11,729,209.60 20,909,527.57$ 158,494.66 13,134,207.87$ 18.58/1/2029705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 12,276,411.50 20,909,527.57$ 158,494.66 13,292,702.53$ 192/1/2030705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 12,823,613.40 20,909,527.57$ 158,494.66 13,451,197.18$ 19.58/1/2030705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 13,370,815.30 20,909,527.57$ 158,494.66 13,609,691.84$ 202/1/2031705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 13,918,017.20 20,909,527.57$ 158,494.66 13,768,186.49$ 20.58/1/2031705,696.56 576,002.00 (28,800.10) - 547,201.90 - 547,201.90 14,465,219.10 20,909,527.57$ 158,494.66 13,926,681.15$ 21TOTAL 28,227,862.21 22,246,277.04 (1,112,356.74) (743,593.88) 48,334.84 21,133,920.30 (6,570,381.38) (97,234.19) 25,348.77 14,491,653.50 5% Admin FeeBond Payment Admin BondsBond Payment Sr. BondsNote BalanceYearCity of St. Louis ParkEconomic Development AuthorityWest End - County TIF District 1314Duke RealtyDate Interest DueStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 91
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 91 Ellipse on Excelsior Description: Ellipse on Excelsior (County #1315) is a redevelopment district that was established on February 2, 2009 and is located within the Redevelopment Project No 1. Originally the district encompassed ten (10) parcels of land and was established to facilitate the purchase and redevelopment at the northwest corner of Excelsior Boulevard and France Avenue (former Al’s Liqu ors, Anderson Cleaner’s and motel sites). The first phase consists of the redevelopment of the Al’s Bar and Anderson Cleaner’s site into a five story mixed use building consisting of 133 market rate apartments and 16,383 square feet of retail. The EDA is required to issue the Developer two TIF notes totaling up to $1,430,000, at an interest rate of 6%, to reimburse them for qualified redevelopment costs. The City purchased the motel site in 2009 and demolished the building in 2010. On February 6, 2012, the City entered into a development agreement with Ellipse II, LLC. to construct the second phase of the development, which consists of 58 market rate rental units. On August 20, 2012, the EDA entered into an amended and restated purchase and redevelopment agreement to allocate a portion of the property from Phase I to Phase II. The project was completed in early 2013. The EDA issued the Developer a pay-as-you-go TIF note for $686,195, at an interest rate of 5.6%, to reimburse them for qualified redevelopment costs (reduced from $700,000 after completion of the look back). Adopted……………..…..…. 02/02/2009 Requested Date…………….. 06/30/2009 Certified Date………..….…. 07/09/2009 First Increment………..…...……07/2011 Decertifies………………….. 12/31/2036 Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 92
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 92 Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 107.8190% Allowable Uses: MN Statute 469.176 sub 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There are three PAYGO Notes that were issued for this project as follows: $1,230,000 PAYGO Note A – Redevelopment Costs issued on February 23, 2011 $220,000 PAYGO Note B – Environmental Costs issued on February 23, 2011 $686,195 PAYGO Note for E2– Redevelopment Costs issued on August 1, 2015 Former PIDFormer UseNew PIDNew Use06-028-24-41-0002Al's Liquor06-028-24-41-0069Al's Liquor06-028-24-41-0053 Excelsior Blvd LLC06-028-24-41-0052Al's Liquor06-028-24-41-0056Al's Liquor06-028-24-41-0057Al's Liquor06-028-24-41-0051Al's Liquor06-028-24-41-0050Al's Liquor06-028-24-41-0058Al's Liquor06-028-24-41-0003 Motel Same as Former E2 Apartments06-028-24-41-0072 Ellipse ApartmentsStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 93
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 93 The first two (2) Notes carry a 6% interest rate and the third one has a 5.6% interest rate. Each is paid from 95% of the available increment generated by the Ellipse on Excelsior Apartments (first 2 Notes) and Ellipse 2 (e2) on the second Note. The available increment is prorated semi-annually between the first two Notes with 86% being paid to the A Note and 14% being paid to the B Note. It is anticipated that the Note A will be paid in full by February 1 2019, Note B will be repaid in full by August 1, 2020 and the E2 Note will be repaid in full by February 1, 2022. Other Development Agreement Compliance: 2. Look Back – Ellipse I. Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds a 20% internal rate of return, then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. The development reached its occupancy threshold in mid-2011 and the look back was completed. The developer ‘s expected internal rate of return was below the 20% threshold so there was no excess profit to prepay the TIF note. 3. Look Back – Ellipse II. Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds a 18% internal rate of return, then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. The lookback was completed in May 2015 and the TIF Note was reduced by $13,805 to 686,195. 4. Special Service District – Both Properties. Upon written request by the City, they will submit required petition to renew any levy of special service charges for the District. 5. Minimum Assessment Agreement – Both Properties. For Phase I, the minimum market value as of January 2, 2011 shall be $8,819,000 and the minimum market value as of January 2, 2012 shall be $17,637,450. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. For Phase II, the minimum market value as of January 2, 2014 shall be $6,380,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Ellipse on Excelsior district does not fit this timeline and its four year rule is July 2013. Since redevelopment has been completed on the former Al’s Bar and Anderson Drycleaner site (construction of the Ellipse Apartments) and the City has purchased and demolished the motel on the other site, the four year rule has been met. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 94
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 94 Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Ellipse on Excelsior district does not fit this timeline and its five year rule is July 2014. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 2014. Recommendations: 1. 6-Year Rule. Since TIF Note A and B will be paid off by 2020, we recommend completing a 6-year rule analysis to determine if the District can be closed sooner that 2022 when it is anticipated that the E2 Note will be paid in full. 2. Decertification. This district will need to be decertified when all obligations are paid, which is estimated to be August 2022. 3. Pooling Analysis and Use of Funds. We recommend that the City complete an analysis of funds available for pooling that includes analysis from the 6-year rule and develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned either when the district expires or when the obligation is paid. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 95
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 95 City of St. Louis ParkEllipse on Excelsior TIF DistrictBasic AssumptionsOption B District: 1315Inflation Rate 0.00%Assumes Last Increment In 2036 Legal MaximumBaseTotalTax RateFrozen rate107.8190%201063,453 63,453 107.8190%First receipt requested 2011201134,823 44,666 121.8240%201224,527 225,430 130.7480%201324,527 244,480 133.1340%201424,527 290,601 138.0900%201524,527 459,676 130.0480%Cash Flow Projections0.00%5.00%FiscalNewTaxFiscalTaxOtherInvestAdmin.OtherEndTIF Yr,MonthYearBaseTotalDisparitiesDevelopmentCapturedRateYearIncrementRevenueIncomePaygo APaygo BPaygo CIFLExpenseExpensesBalance1.5 8/1 2012 24,527 225,430 (15,374) 185,529 107.8190%2 2/1 20132012 199,314 89 90,059 14,661 - 4,295 176,599 (83,976) 2.5 8/1 2013 24,527 244,480 (18,688) 201,265 107.8190%3 2/1 20142013 216,221 169,746 27,633 8,830 5,918 (79,883) 3.5 8/1 2014 24,527 290,601 (18,573) 247,501 107.8190%4 2/1 20152014 265,892 207 195,007 31,745 8,830 6,620 (55,986) 4.5 8/1 2015 24,527 459,676 (19,577) 415,572 107.8190%5 2/1 20162015 448,066 240,200 39,102 59,060 22,403 31,313 5.5 8/1 2016 24,527 459,676 (19,577) - 415,572 107.8190%6 2/1 20172016 448,066 263,166 42,841 118,120 22,403 32,848 6.5 8/1 2017 24,527 459,676 (19,577) - 415,572 107.8190%7 2/1 20182017 448,066 263,166 42,841 118,120 22,403 34,382 7.5 8/1 2018 24,527 459,676 (19,577) - 415,572 107.8190%8 2/1 20192018 448,066 263,166 42,841 118,120 22,403 35,916 8.5 8/1 2019 24,527 459,676 (19,577) - 415,572 107.8190%9 2/1 20202019 448,066 114,157 42,841 118,120 22,403 186,461 9.5 8/1 2020 24,527 459,676 (19,577) - 415,572 107.8190%10 2/1 20212020 448,066 7,678 118,120 22,403 486,325 10.5 8/1 2021 24,527 459,676 (19,577) - 415,572 107.8190%11 2/1 20222021 448,066 - 118,120 22,403 793,867 11.5 8/1 2022 24,527 459,676 (19,577) - 415,572 107.8190%12 2/1 20232022 448,066 - - 46,062 22,403 1,173,467 12.5 8/1 2023 24,527 459,676 (19,577) - 415,572 107.8190%13 2/1 20242023- - - 1,173,467 Total4,276,526306 1,598,669 292,184 813,844204,409 176,599 1,173,467Tax CapacityDebt Service Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 96
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 96 Maximum amount 1,230,000$ Interest Rate6.00%Note Issue Date 8/1/2011Final Payment 8/1/2030Total Tax Tax Increment Tax Increment Accrued CumulativeAccruedIncrement Available at For Note Principle Interest Tax Increment Accrued Interest InterestAvailable 95.00%86.00%PaidPaidPaidNot Paid BalanceYear1,230,000.00$ 8/1/2011 - 5,287.20 5,022.84 4,319.64 4,319.64 4,319.64 1,225,680.36$ -$ -$ 12/1/201237,587.53 5,287.20 5,022.84 4,319.64 - 8,639.28 1,225,680.36$ 33,267.89$ 33,267.89$ 1.58/1/201237,178.97 99,657.40 94,674.53 81,420.10 10,973.24 33,267.89 90,059.38 1,214,707.12$ -$ -$ 22/1/201337,251.02 99,657.40 94,674.53 81,420.10 44,169.08 - 171,479.48 1,170,538.04$ -$ -$ 2.58/1/201335,311.23 108,110.54 102,705.02 88,326.32 53,015.08 - 259,805.79 1,117,522.96$ -$ -$ 32/1/201434,270.70 108,110.56 102,705.03 88,326.33 54,055.62 - 348,132.12 1,063,467.34$ -$ -$ 3.58/1/201432,081.26 130,576.29 124,047.48 106,680.83 74,599.57 - 454,812.95 988,867.77$ -$ -$ 42/1/201529,666.03 132,946.02 126,298.72 108,616.90 78,950.87 - 563,429.85 909,916.90$ -$ -$ 4.58/1/2015 27,297.51 161,056.57 153,003.74 131,583.22 104,285.71 - 695,013.06 805,631.20$ -$ -$ 52/1/201624,168.94 161,056.57 153,003.74 131,583.22 107,414.28 - 826,596.28 698,216.92$ -$ -$ 5.58/1/201620,946.51 161,056.57 153,003.74 131,583.22 110,636.71 - 958,179.49 587,580.21$ -$ -$ 62/1/201717,627.41 161,056.57 153,003.74 131,583.22 113,955.81 - 1,089,762.71 473,624.40$ -$ -$ 6.58/1/201714,208.73 161,056.57 153,003.74 131,583.22 117,374.48 - 1,221,345.92 356,249.92$ -$ -$ 72/1/201810,687.50 161,056.57 153,003.74 131,583.22 120,895.72 - 1,352,929.14 235,354.20$ -$ -$ 7.58/1/20187,060.63 161,056.57 153,003.74 131,583.22 124,522.59 - 1,484,512.35 110,831.61$ -$ -$ 82/1/20193,324.95 161,056.57 153,003.74 114,156.56 110,831.61 - 1,598,668.91 (0.00)$ -$ -$ 8.58/1/2019(0.00) - - - 0.00 - 1,598,668.91 (0.00)$ -$ -$ 92/1/2020(0.00) - - - 0.00 - 1,598,668.91 (0.00)$ -$ -$ 9.58/1/2020(0.00) - - - 0.00 - 1,598,668.91 (0.00)$ -$ -$ 102/1/2021(0.00) - - - 0.00 - 1,598,668.91 (0.00)$ -$ -$ 10.58/1/2021(0.00) - - - 0.00 - 1,598,668.91 (0.00)$ -$ -$ 112/1/2022(0.00) - - - 0.00 - 1,598,668.91 (0.00)$ -$ -$ 11.58/1/2022(0.00) - - - - - 1,598,668.91 (0.00)$ -$ -$ 122/1/2023(0.00) - - - - - 1,598,668.91 (0.00)$ -$ -$ 12.5TOTAL368,668.91 1,598,668.91 1,230,000.00 City of St. Louis ParkEconomic Development AuthorityEllipse on Excelsior - County TIF District 1315Note ADate Interest DueNote Balance Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 97
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 97 Maximum amount 220,000$ Interest Rate 6.00%Note Issue Date 8/1/2011Final Payment 8/1/2030Total Tax Tax Increment Tax Increment Accrued CumulativeAccruedIncrement Available at For Note Principle Interest Tax Increment Accrued Interest InterestAvailable 95.00%14.00%PaidPaidPaidNot Paid BalanceYear220,000.00$ 8/1/2011- 5,287.20 5,022.84 703.20 703.20 703.20 219,296.80$ -$ -$ 12/1/20126,725.10 5,287.20 5,022.84 703.20 - 1,406.40 219,296.80$ 6,021.90$ 6,021.90$ 1.58/1/20126,652.00 99,657.40 94,674.53 13,254.43 580.53 6,021.90 14,660.83 218,716.28$ -$ -$ 22/1/20136,707.30 99,657.40 94,674.53 13,254.43 6,547.14 - 27,915.26 212,169.14$ -$ -$ 2.58/1/20136,400.44 108,110.54 102,705.02 14,378.70 7,978.27 - 42,293.97 204,190.87$ -$ -$ 32/1/20146,261.85 108,110.56 102,705.03 14,378.70 8,116.85 - 56,672.67 196,074.02$ -$ -$ 3.58/1/20145,914.90 130,576.29 124,047.48 17,366.65 11,451.75 - 74,039.32 184,622.28$ -$ -$ 42/1/20155,538.67 132,946.02 126,298.72 17,681.82 12,143.15 - 91,721.14 172,479.12$ -$ -$ 4.58/1/2015 5,174.37 161,056.57 153,003.74 21,420.52 16,246.15 - 113,141.66 156,232.97$ -$ -$ 52/1/20164,686.99 161,056.57 153,003.74 21,420.52 16,733.53 - 134,562.18 139,499.44$ -$ -$ 5.58/1/20164,184.98 161,056.57 153,003.74 21,420.52 17,235.54 - 155,982.71 122,263.90$ -$ -$ 62/1/20173,667.92 161,056.57 153,003.74 21,420.52 17,752.61 - 177,403.23 104,511.29$ -$ -$ 6.58/1/20173,135.34 161,056.57 153,003.74 21,420.52 18,285.18 - 198,823.76 86,226.11$ -$ -$ 72/1/20182,586.78 161,056.57 153,003.74 21,420.52 18,833.74 - 220,244.28 67,392.37$ -$ -$ 7.58/1/20182,021.77 161,056.57 153,003.74 21,420.52 19,398.75 - 241,664.80 47,993.62$ -$ -$ 82/1/20191,439.81 161,056.57 153,003.74 21,420.52 19,980.71 - 263,085.33 28,012.90$ -$ -$ 8.58/1/2019840.39 161,056.57 153,003.74 21,420.52 20,580.14 - 284,505.85 7,432.76$ -$ -$ 92/1/2020222.98 161,056.57 153,003.74 6,903.70 6,680.72 - 291,409.55 752.05$ -$ -$ 9.58/1/202022.56 161,056.57 153,003.74 774.61 752.05 - 292,184.16 (0.00)$ -$ -$ 102/1/2021(0.00) - - - 0.00 - 292,184.16 (0.00)$ -$ -$ 10.58/1/2021(0.00) - - - 0.00 - 292,184.16 (0.00)$ -$ -$ 112/1/2022(0.00) - - - 0.00 - 292,184.16 (0.00)$ -$ -$ 11.58/1/2022(0.00) - - - 0.00 - 292,184.16 (0.00)$ -$ -$ 122/1/2023(0.00) - - - 0.00 - 292,184.16 (0.00)$ -$ -$ 12.58/1/2023(0.00) - - - 0.00 - 292,184.16 (0.00)$ -$ -$ 132/1/2024(0.00) - - - - - 292,184.16 (0.00)$ -$ -$ 13.5TOTAL33,961.43 292,184.16 220,000.00 City of St. Louis ParkEconomic Development AuthorityEllipse on Excelsior - County TIF District 1315Note BDate Interest DueNote Balance Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 98
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 98 Maximum amount 686,195$ Interest Rate 5.60%Note Issue Date 8/1/2015Final Payment 8/1/2022Total Tax Tax Increment Accrued CumulativeAccruedIncrement Available at Principle Interest Tax Increment Accrued Interest InterestAvailable 95.00% Paid Paid Paid Not Paid BalanceYear686,195.00$ 8/1/2015- 62,168.62 59,060.19 59,060.19 - 59,060.19 627,134.81$ -$ -$ 12/1/2016 17,559.77 62,168.62 59,060.19 41,500.42 - 118,120.38 585,634.39$ -$ -$ 1.58/1/2016 16,397.76 62,168.62 59,060.19 42,662.43 - 177,180.57 542,971.96$ -$ -$ 22/1/2017 15,203.21 62,168.62 59,060.19 43,856.98 - 236,240.76 499,114.99$ -$ -$ 2.58/1/2017 13,975.22 62,168.62 59,060.19 45,084.97 - 295,300.96 454,030.02$ -$ -$ 32/1/2018 12,712.84 62,168.62 59,060.19 46,347.35 - 354,361.15 407,682.67$ -$ -$ 3.58/1/2018 11,415.11 62,168.62 59,060.19 47,645.08 - 413,421.34 360,037.59$ -$ -$ 42/1/2019 10,081.05 62,168.62 59,060.19 48,979.14 - 472,481.53 311,058.45$ -$ -$ 4.58/1/20198,709.64 62,168.62 59,060.19 50,350.55 - 531,541.72 260,707.90$ -$ -$ 52/1/20207,299.82 62,168.62 59,060.19 51,760.37 - 590,601.91 208,947.53$ -$ -$ 5.58/1/20205,850.53 62,168.62 59,060.19 53,209.66 - 649,662.10 155,737.86$ -$ -$ 62/1/20214,360.66 62,168.62 59,060.19 54,699.53 - 708,722.29 101,038.33$ -$ -$ 6.58/1/20212,829.07 62,168.62 59,060.19 56,231.12 - 767,782.49 44,807.22$ -$ -$ 72/1/20221,254.60 62,168.62 46,061.82 44,807.22 - 813,844.31 (0.00)$ -$ -$ 7.5TOTAL 127,649.30 813,844.31 686,195.00 City of St. Louis ParkEconomic Development AuthorityEllipse on Excelsior - County TIF District 1315E2Date Interest DueNote BalanceStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 99
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 99 Hardcoat Description: Hardcoat (County #1316) is an economic development district that was established on December 20, 2010 and is located within the Redevelopment Project No 1. Originally the district encompassed two (2) parcels of land and was established to facilitate the redevelopment of the former Flame Metals building. The City provided them a $500,000 grant through the CAP program. Hardcoat renovated the building and site, and relocated its operations there. The existing industrial building is approximately 33,600 square feet and was constructed in 1963. Both the interior and exterior had numerous building code deficiencies. Following Flame Metals’ departure in 2009, the building’s interior has been emptied, thoroughly cleaned, repainted, and many (but not all) code deficiencies have been addressed. Nearly all the building’s operating systems have been removed. The project included a complete renovation of both the interior and exterior of the building as well as the addition of approximately 1,500 square feet of office/conference space on the north side of the building. Renovations included a new roof, new exterior facelift, new windows and dock doors, new offices and interior spaces, new electrical and plumbing systems, new energy efficient HVAC equipment, new parking lot and landscaping, rain gardens and site amenities, as well as the construction of a 1,500 SF addition for office/conference space. Hardcoat will initially occupy approximately 25,000 square feet of the building. The balance will be leased to a complementary business and provide Hardcoat with future expansion capacity. Adopted……………..….… 12/20/2010 Requested Date………..….. 04/20/2011 Certified Date……………...04/27/2011 First Increment…………………7/2014 Decertifies………………....12/31/2022 Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 100
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 100 Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 121.8240% Obligations: $500,000 Interfund loan payable from the Hardcoat TIF district adopted on EDA Res10-24 on January 26, 2011. This Loan carries a 4% interest rate and is paid from 100% of the available increment generated by Hardcoat. The loan was structured so that $420,000 was related to construction costs and the remaining $80,000 was related to administrative costs. It is anticipated that this loan will not be repaid in full. Other Development Agreement Compliance: 1. Minimum Assessment Agreement. The minimum market value as of January 2, 2013 shall be $2,400,000. The Assessment Agreement shall be in place until the Interfund Loan is paid in full or the TIF District terminates, whichever is sooner. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Hardcoat District does not fit this timeline and its four year rule is April 2015. Since qualifying redevelopment activities happened prior to this date, the four year rule has been satisfied. Former PIDFormer UseNew PIDNew Use20-117-21-21-0093 Flame Metals Same as Original17-117-21-34-0027 Flame Metals Same as OriginalHardcoatStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 101
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 101 Five Year Rule: At least 80% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Hardcoat District does not fit this timeline and its five year rule is 2016. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after 2016. Recommendations: None at this Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 102
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 102 City of St. Louis ParkHardcoat TIF DistrictBasic AssumptionsOption B District:1316Inflation Rate0.00%Assumes Last Increment In2022 Legal MaximumBaseTotalTax Rate2022 Expected TermFrozen rate 121.8240%201322,194 18,100 133.1340%201422,194 46,500 138.0900%201522,194 46,500 130.0480%Cash Flow Projections0.00% 5.00%Fiscal Tax Fiscal Tax Other Invest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparitiesCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance0 8/1 2012 - 18,100 - 18,100 121.8240%0 2/1 20132012 - 1,228 (29,149) 0.5 8/1 2013 22,194 18,100 (4,094) 121.8240%1 2/1 20142013 - 4,592 (33,741) 1.5 8/1 2014 22,194 46,500 (8,072) 16,234 121.8240%2 2/1 20152014 19,706 33 1,303 5,885 115,000 (136,190) 2.5 8/1 2015 22,194 46,500 (8,508) 15,798 121.8240%3 2/1 20162015 19,246 962 (117,907) 3.5 8/1 2016 22,194 46,500 (8,508) 15,798 121.8240%4 2/1 20172016 19,246 962 (99,623) 4.5 8/1 2017 22,194 46,500 (8,508) 15,798 121.8240%5 2/1 20182017 19,246 962 (81,340) 5.5 8/1 2018 22,194 46,500 (8,508) 15,798 121.8240%6 2/1 20192018 19,246 962 (63,056) 6.5 8/1 2019 22,194 46,500 (8,508) 15,798 121.8240%7 2/1 20202019 19,246 962 (44,773) 7.5 8/1 2020 22,194 46,500 (8,508) 15,798 121.8240%8 2/1 20212020 19,246 962 (26,489) 8.5 8/1 2021 22,194 46,500 (8,508) 15,798 121.8240%9 2/1 20222021 19,246 962 (8,206) 9.58/1 2022 22,194 46,500 (8,508) 15,798 121.8240%10 2/1 20232022 19,246 962 10,078 Total154,42633 1,303 46,362 115,00010,078Tax CapacityStudy Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 103
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 103 Eliot Park Description: Eliot Park (County #1318/1319) is redevelopment district that was established on July 16, 2013 and is located within the Redevelopment Project No 1. Originally the district encompassed two (2) parcels of land and was established to facilitate the redevelopment of the former Eliot School building into 138 market rate apartments and two (2) single-family homes. The EDA is required to issue the Developer a $1,100,000 PAYGO TIF Note at 5.5% interest, to reimburse them for qualified redevelopment costs. To date the TIF Note has not been issued. On July 1, 2014 the EDA entered into a development Agreement with Cedar Lake Road Apartments LLC. The project began construction in 2014 and opened as the Siena Apartment Homes in July 2015. To date the single-family homes have not been constructed and it is anticipated that the EDA will be revising the contract to allow a 1-year extension to have construction completed by December 1, 2016. Adopted……………..…..…. 05/06/2013 Requested Date…………….. 06/28/2013 Certified Date………..….…. 07/16/2013 First Increment………..…...……08/2016 Decertifies………………….. 12/31/2041 Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 104
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 104 Former and Current PID Numbers: Property Address Former PID # Former UseNew PID #'sNew Use4900 Excelsior Blvd07-028-24-21-0002Bally's Fitness CenterTBD4760 Excelsior Blvd07-028-24-21-0258 Vacant LotTBDMixed-Use Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 1318 – 132.2090% 1319 - 133.1340% Allowable Uses: MN Statute 469.176 sub 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There is currently one PAYGO Note in this district as follows: $1,100,000 at 5.50% interest. To date the Note has not been issued. Other Development Agreement Compliance: 1. Look Back . Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds an 18% internal rate of return (IRR), then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 105
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 105 2. Minimum Assessment Agreement. The minimum market value as of January 2, 2016 shall be $17,250,000 for the apartments and $250,000 for each single family home. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Eliot Park district does not fit this timeline and its four year rule is July 2017. Since redevelopment has been completed, the four year rule has been met. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Eliot Park district does not fit this timeline and its five year rule is July 2018. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 2014. Recommendations: None at this time Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 106
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 106 The Shoreham Description: The Shoreham (County #1320) is redevelopment district that was adopted on August 17, 2015 and is located within the Redevelopment Project No 1. The district encompasses five (5) parcels of land and was established to facilitate the redevelopment of the properties into 150 market rate apartments and 20,000 sq/ft of retail/office. The developer is required to allot 20% of the units for residents with incomes at or below 50% of the Area Median Income (AMI) for a 10-year period, in accordance with the City’s inclusionary housing policy. The EDA is required to issue the Developer a $1,200,000 PAYGO TIF Note at 3.75% interest, to reimburse them for qualified redevelopment costs. To date the TIF Note has not been issued. On August 17, 2015 the EDA approved a development Agreement with Shoreham Apartments LLC. The project was awarded grants from the following agencies and in the following amounts: DEED: $625,075 Hennepin County: $430,000 Hennepin County: $200,000 Met Council: 594,000 The project will begin construction in 2015. Adopted……………..…..…. 08/17/2015 Requested Date…………. by 06/30/2016 Certified Date………..………...…. TBD First Increment………..…...……08/2018 Decertifies………………….. 12/31/2041 Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 107
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 107 Former and Current PID Numbers: Error! Not a valid link. Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: TBD Allowable Uses: MN Statute 469.176 sub 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There is currently one PAYGO Note in this district as follows: $1,200,000 at 3.75% interest. To date the Note has not been issued. Other Development Agreement Compliance: 3. Look Back . Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds an 18% internal rate of return (IRR), then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. 4. Minimum Assessment Agreement. The minimum market value as of January 2, 2017 shall be $27,421,000 and $32,260,000 as of January 2, 2018. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Shoreham district does not fit this timeline and its four year rule is sometime in 2020. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 108
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 108 Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Shoreham district does not fit this timeline and its five year rule is sometime in 2021. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after sometime in 2021. Recommendations: None at this time Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 109
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 109 4900 Excelsior Description: 4900 Excelsior (County #1321) will be a redevelopment district when it is established later in 2015 and is located within the Redevelopment Project No 1. The district encompasses two (2) parcels of land (former Bally’s Fitness Center and EDA vacant parcel) and will be established to facilitate the redevelopment of the properties into 176 market rate apartments and a 28,000 sq/ft grocery store. The developer is required to allot 10% of the units for residents with incomes at or below 50% of the Area Median Income (AMI) for a 10-year period, in accordance with the City’s inclusionary housing policy. The EDA is required to issue the Developer a $2.600,000 PAYGO TIF Note at 4.75% interest, to reimburse them for qualified redevelopment costs. To date the TIF Note has not been issued. Adopted…………………….….… TBD Requested Date………………….. TBD Certified Date………………….....TBD First Increment……………………TBD Decertifies………………….…....TBD Former and Current PID Numbers: Property Address Former PID # Former UseNew PID #'sNew Use4900 Excelsior Blvd07-028-24-21-0002Bally's Fitness CenterTBD4760 Excelsior Blvd07-028-24-21-0258 Vacant LotTBDMixed-Use Fiscal Disparities Election: The City will elect to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: TBD Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 110
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 110 Obligations: It is anticipated that there will be one PAYGO Note in this district as follows: $2,600,000 at 4.75% interest. To date the Note has not been issued. Other Development Agreement Compliance: TBD Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The 4900 Excelsior district does not fit this timeline and its four year rule will be sometime in 2020. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The 4900 Excelsior district does not fit this timeline and its five year rule is sometime in 2021. If the EDA enters into a contract and obligated TIF dollars, the Five-Year rule will be satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after some date in 2021. Recommendations: None at this Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 111
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 111 City Map of the TIF Districts Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 112
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 112 Definitions Administrative expenses. “Administrative expenses" means all expenditures of an authority other than: amounts paid for the purchase of land; 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 project; relocation benefits paid to or services provided for persons residing or businesses located in the project; amounts used to pay principal or interest on, "administrative expenses" includes amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Authority. "Authority" means a rural development financing authority created pursuant to sections 469.142 to 469.151; a housing and redevelopment authority created pursuant to sections 469.001 to 469.047; a port authority created pursuant to sections 469.048 to 469.068; an economic development authority created pursuant to sections 469.090 to 469.108; a redevelopment agency as defined in sections 469.152 to 469.165; a municipality that is administering a development district created pursuant to sections 469.124 to 469.134 or any special law; a municipality that undertakes a project pursuant to sections 469.152 to 469.165, except a town located outside the metropolitan area or with a population of 5,000 persons or less; or a municipality that exercises the powers of a port authority pursuant to any general or special law. Bonds. Bonds or other obligations include: refunding bonds, notes, interim certificates, debentures; and interfund loans or advances. Captured net tax capacity. "Captured net tax capacity" means the amount by which the current net tax capacity of a tax increment financing district or an extended subdistrict exceeds the original net tax capacity. Compact development district. "Compact development district" means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that blighting conditions exist and that when the redevelopment is complete, the total square footage of buildings will be three times greater. Economic development district. "Economic development district" means a type of tax increment financing district which consists of any project, or portions of a project, which the authority finds to be in the public interest because it will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality; or it will result in increased employment in the state; or it will result in preservation and enhancement of the tax base of the state. Five Year Rule. Within five years from certification, certain financing activities must take place in the district in order to retain the ability to collect increment from the district as a whole. These financing activities include issuing bonds, paying revenues to a third party for site improvements and binding contracts have been entered into. For certain districts, no additional obligations may be entered into after the five years have elapsed. Four Year Rule. Within four years from certification, certain improvements must be made to each parcel or to a street adjacent to the parcel in order for the Authority to retain the ability to capture increment from that parcel. If no activities take place, the parcel is ‘knocked down’ from the district and no Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 113
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 113 increment is collected on that parcel. If those activities subsequently take place, the authority must notify the county in order to collect future increment from the parcel. Activities include: demolition, rehabilitation, renovation, site preparation and improvement of a street adjacent to a parcel. Qualified street improvements are limited to construction or opening of a new street, relocation of a street, and substantial reconstruction or rebuilding of an existing street. Governing body. "Governing body" means the elected council or board of a municipality. Housing district. "Housing district" means a type of tax increment financing district which consists of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income. Increment Revenue. "Tax increment revenues" include: taxes paid by the captured net tax capacity, proceeds from the sale or lease of property that was purchased with tax increments, principal and interest received on loans or other advances made by the authority with tax Municipality. "Municipality" means the city, however organized, in which the district is located. Original net tax capacity. "original net tax capacity" means the tax capacity of all taxable real property within a tax increment financing district as certified by the commissioner of revenue for the previous assessment year. Project. "Project" means a project as described in section 469.142; an industrial redevelopment district as described in section 469.058, subdivision 1; an economic development district as described in section 469.101, subdivision 1; a project as defined in section 469.002, subdivision 12; a development district as defined in section 469.125, subdivision 9, or any special law; or a project as defined in section 469.153, subdivision 2, paragraph (a), (b), or (c). Tax increment financing district. "Tax increment financing district" or "district" means a contiguous or noncontiguous geographic area within a project delineated in the tax increment financing plan, for the purpose of financing redevelopment, 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. Parcel. "Parcel" means a tract or plat of land established prior to the certification of the district as a single unit for purposes of assessment. Project Area “Project Area” means a defined geographic area in which tax increment districts may be established. The project area may be larger than or equal to the size of the district. A Project Area Plan is adopted that outlines the conditions in the district and the statutory authority under which development or redevelopment will take place. Redevelopment district. "Redevelopment district" means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that one or more blighting conditions exist, reasonably distributed throughout the district. Parcels in a Redevelopment District must be analyzed to determine if they qualify under the law to be included in the District. Blighting factors include structurally substandard buildings, parcels that are vacant, unused, underused or inappropriately used. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 114
Management Review & Analysis - Tax Increment Financing Districts October 2015 St Louis Park, Minnesota Page 114 Renewal and renovation district. "Renewal and renovation district" means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that one or more blighting conditions exist, similar to a Redevelopment District. The qualification rules are less stringent than a Redevelopment District. Soils condition district. "Soils condition district" means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that hazardous substances, pollution or contaminants exist that require removal. Tax increment financing plan. A Tax Increment Financing Plan is a document that is adopted by resolution by the Authority which outlines certain statutory requirements. These include a statement of objectives of the project, a list of development activities that the plan proposes, identification of parcels to be included in the district, a budget of revenues and project costs, and district duration. Study Session Meeting October 26, 2015(Item No. 2) Title: Annual TIF Management ReportPage 115
TIF Status Report
City of St. Louis Park
Stacie Kvilvang – Ehlers
1
October 26, 2015
Overview
•Number of TIF Districts
•Tax Capacity Captured by TIF
•Increase in Tax Base
•Existing Obligations
•Recommendations
Study Session Meeting October 26, 2015(Item No. 2)
Title: Annual TIF Management Report Page 116
Number of TIF Districts
•16 TIF Districts
10 Redevelopment (26 years)
• Zarthan, Mill City, Park Commons, Wolfe Lake, Highway 7 Business Center,
West End, Ellipse on Excelsior, Eliot Park, The Shoreham, 4900 Excelsior
2 Housing (26 years)
• Park Center, Aquila Commons
1 Soils (20 years)
• Edgewood
1 Renewal and Renovation (16 years)
• Elmwood
1 Economic Development (9 years)
• Hardcoat
1 Hazardous Substance Subdistrict (26 years)
• Highway 7 Business Center
4
Study Session Meeting October 26, 2015(Item No. 2)
Title: Annual TIF Management Report Page 117
Tax Capacity Captured by TIF
Note:2015 decrease is due to Excelsior BLVD HSTI
and Victoria Ponds TIF districts decertifying
Year Captured TIF as % of Tax
Base
2005 4.5%
2006 4.8%
2007 5.7%
2008 6.8%
2009 7.4%
2010 8.8%
2011 9.7%
2012 8.6%
2013 9.0%
2014 9.8%
2015 8.9%
Tax Capacity Captured by TIF
• Victoria Ponds District will decertify at the end of this year
Approximately 334,000 of tax capacity was no longer captured for
TIF for 2015
• Approximately .05%of total tax capacity of City
• Excelsior Boulevard HSTI District will decertify at the end
of this year
Approximately 980,000 of tax capacity was no longer captured for
TIF for 2015
• Approximately 1.5%of total tax capacity of City
•In 2015, approximately 1,314,000 of tax capacity was no longer
captured for TIF
• Approximately 2.0%of total tax capacity of City
Study Session Meeting October 26, 2015(Item No. 2)
Title: Annual TIF Management Report Page 118
City of St. Louis Park
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Park Center-1304 99,703 100,700 101,707 102,724 103,751 104,789 105,837 106,895 0 0
Zarthan-1305/1306 312,209 315,331 318,484 321,669 324,886 328,135 331,416 334,730 0 0
Mill City-1307 337,326 340,699 344,106 347,547 351,023 354,533 358,078 361,659 0 0
Park Commons-1308 1,756,934 1,774,503 1,792,248 1,810,171 1,828,273 1,846,555 1,865,021 1,883,671 1,902,508 1,921,533
Edgewood-1309 48,720 49,207 49,699 50,196 50,698 0 0 0 0 0
Wolfe Lake-1310 100,192 101,194 102,206 103,228 104,260 105,303 0 0 0 0
Aquila Commons-1311 139,367 140,761 142,168 143,590 0 0 0 0 0 0
Elmwood-1312 1,412,891 1,427,020 1,441,290 1,455,703 1,470,260 1,484,963 1,499,812 1,514,810 1,529,958 1,545,258
Highway 7 Business Center-1313 83,955 84,795 85,642 86,499 87,364 88,238 89,120 90,011 90,911 91,820
Highway 7 Subdistrict-1313 53,504 54,039 54,579 55,125 55,676 56,233 56,796 57,364 57,937 58,517
West End-1314 1,117,854 1,129,033 1,140,323 1,151,726 1,163,243 1,174,876 1,186,625 1,198,491 1,210,476 1,222,580
Ellipse on Excelsior-1315 415,572 419,728 423,925 428,164 432,446 436,770 441,138 445,549 0 0
Hardcoat-1316 15,798 24,066 24,307 24,550 24,795 25,043 25,294 25,547 0 0
Eliot Park-1318/1319 0 81,936 189,749 191,646 193,563 195,499 197,454 199,428 0 0
The Shoreham - 1320 0 0 0 313,742 374,577 378,323 0 0 0 0
4900 Excelsior - 1321 0 0 37,703 445,625 450,081 454,582 459,128 463,719 0 0
Future Est. Captured TIF Tax Capacity 5,894,025 6,043,011 6,248,138 7,031,906 7,014,897 7,033,841 6,615,718 6,681,875 4,791,790 4,839,708
Total Tax Capacity (Gross) 66,206,866 66,868,935 67,537,624 68,213,000 68,895,130 69,584,082 70,279,922 70,982,722 71,692,549 72,409,474
Percentage of Tax Base in TIF 8.9% 9.0% 9.3% 10.3% 10.2% 10.1% 9.4% 9.4% 6.7% 6.7%
ProjectedActual
Future Captured Tax Capacity in TIF
7
By end of 2023, if no new TIF district are established, the %
captured is reduced significantly
Note: Last TIF as follows (i) Park
Commons 2027, (ii) Elmwood 2029, (iii)
West end 2031
Tax Capacity Captured by TIF
Comparable Cities Final Pay 2015 City
Captured TIF as a % of Tax Base City Tax Rate Bond Rating
Golden Valley 0.1%54.626%Aaa
Edina 1.4%26.605%Aaa/AAA
Brooklyn Park 1.7%56.136%AA+
Minnetonka 2.1%36.565%Aaa
Minneapolis 7.4%66.333%Aaa/AAA
Bloomington 8.5%45.673%Aaa/AAA
St. Louis Park 8.9%47.754%AAA
Hopkins 10.0%61.008%AA
Richfield 10.6%60.133%Aa2
New Brighton 12.0%40.947%AA
Final Pay 2015
Study Session Meeting October 26, 2015(Item No. 2)
Title: Annual TIF Management Report Page 119
Increase in Tax Base
• Only partial values for West End (no office, 2 apartments & hotel)
• Only partial value for Eliot Park
• The Shoreham is under construction (market value expected to be $32.260 million – 1,315%
increase)
• 4900 Excelsior to be constructed in 2016 (market value expected to be $38.172 million – 1,383%
increase)
District County District Number Original Market Value Pay 2015 Market
Value
Percent Increase in
Value
Park Center 1304 $493,000 $8,645,000 1753.55%
Zarthan 1305 and 1306 $4,053,600 $32,281,314 796.36%
Mill City 1307 $708,700 $28,000,000 3950.90%
Park Commons 1308 $6,688,000 $156,579,959 2341.21%
Edgewood 1309 $1,000,000 $4,748,000 474.80%
Wolfe Lake 1310 $1,717,300 $9,500,000 553.19%
Aquila 1311 $1,900,000 $15,680,689 825.30%
Elmwood 1312 $10,864,500 $133,458,455 1228.39%
Highway 7 Business Center 1313 $2,792,700 $9,208,800 329.75%
West End (partial completion)1314 $43,051,000 $129,785,900 301.47%
Ellipse 1315 $1,931,800 $35,133,800 1818.71%
Hardcoat 1316 $1,184,700 $2,400,000 102.58%
Eliot Park (partial completion)1318/1319 $0 $5,159,100 N/A
The Shoreham (Under Construction)1320 $2,479,200 $2,479,200 N/A
4900 Excelsior (2016 Construction)1321 $2,759,580 $2,759,580 N/A
TOTAL N/A $76,385,300 $573,060,217 750.22%
Existing Obligations – PAYGO
District Note Outstanding
After 8/1/2015
Total By TIF
District
Note A 1,251,138$
Note B 214,481$
Note C 77,220$
Note D 24,667$
Aquila Commons Stonebridge 404,922$ 404,922$
Edgewood Edgewood 207,712$ 207,712$
Wolfe Lake Beltline 443,882$ 443,882$
Excelsior & Grand 4,661,687$
Phase NE 4,815,430$
Phase E 3,872,323$
Phase NW 4,711,711$
Mill City SLP Apts 3,956,058$ 3,956,058$
CSM Note 1 1,218,476$
CSM Note 2 1,750,836$
Rottlund Note 3 976,356$
Adagio 751,022$
Medley 187,507$
Grecco 259,014$
West End Duke 20,909,528$ 20,909,528$
Bader Note A 805,631$
Bader Note B 156,233$
Ellipse II LLC 627,135$
Eliot Park Hunt Associates 1,100,000$ 1,100,000$
The Shoreham Bader 1,200,000$ 1,200,000$
4900 Excelsior Oppindan 2,600,000$ 2,600,000$
TOTAL N/A 57,182,969$ N/A
18,061,151$
3,945,668$
1,197,543$
1,588,999$
Pay As You Go Obligations
Hwy 7 Corporate
Center
Park Commons
Zarthan
Ellipse on Excelsior
Ellmwood
$ 1,567,506
68%of the PAYGO
obligations are within
these 2 TIF Districts
Study Session Meeting October 26, 2015(Item No. 2)
Title: Annual TIF Management Report Page 120
Existing Obligations – Bonds
Issue Amount Paying District Term
2008B GO Tax Increment Bonds 4,175,000$ West End 2/1/2024
2010A Tax Increment Revenue Bonds - Hoigaards 2,350,000$ Elmwood 2/1/2023
2010B Tax Increment Revenue Bonds - Hoigaards 577,109$ Elmwood 2/1/2023
TOTAL 7,102,109$ N/A N/A
Bonds as of 8/1/2015
Recommendations
1. Pooling. Two of the districts have fairly large cash balances at the end of
their term due to funds not being utilized for administration or other projects
within or outside the district:
•We recommend completing a pooling analysis for these districts to
determine how much will be available for use and what strategies can be
implemented to secure the use of these funds if deemed appropriate by the
City/EDA.
•Note: Park Commons requires further analysis to determine if this will be the final amount or if it will be
lower due to possible payment on other existing obligations within the district.
District End Date of
Obligation Fund Balance Type of Project
Eligible
Zarthan 2023 672,146$ Redevelopment
Park Commons 2028 2,076,309$ Redevelopment
Study Session Meeting October 26, 2015(Item No. 2)
Title: Annual TIF Management Report Page 121
Recommendations
2. Use of TIF in Districts With On-Going Cash Balances.Twoofthe
districts have fairly large cash balances within them due to funds not being
utilized for administration or other projects within or outside the district:
•Park Center.Continue to transfer ending fund balance to the City’s
Housing Development Account to fund income qualified housing programs
(District decertifies at the end of 2023).
•Zarthan.We recommend developing a plan to utilize approximately
$360,000 in available increment for other redevelopment eligible projects
within the City.
District February 1, 2015
Cash Balance Type of Project Eligible
After 2/1 Pymts
Park Center Housing 204,300$ Affordable Housing
Total Affordable Housing 204,300$
Zarthan 356,700$ Redevelopment
Total Redevelopment 356,700$
Recommendations
3. Return of Fund Balance in Victoria Ponds. The current fund balance is
$619,085. Of this, the City can retain approximately $259,779 for legal
pooling purposes. We recommend that the City return the non-legal
pooling dollars of $359,306 to the County for redistribution to the
City, County and School District.
4. Lookback.Currently the look back calculation is required for Aquila
Commons, which we recommend completing as soon as possible.
Study Session Meeting October 26, 2015(Item No. 2)
Title: Annual TIF Management Report Page 122
Recommendations
5. 5-Year Rule.The 5-year deadline was extended to 10 years for certain TIF
districts. Based upon this extension, there is still time to either modify the
boundaries or secure additional obligations for the following Districts:
Note:
1. There will likely be no district boundary extensions for
any of the districts
2. There will likely be no additional obligations for
Highway 7, Hardcoat or Eliot Park
Elmwood Village - Modified Area 2/21/2016
Highway 7 Corporate Center 7/17/2016
West End 7/9/2018
Hardcoat 4/27/2016
Eliot Park 7/16/2018
District 5 Year Deadline
Recommendations
6. 6-Year Rule. Starting in year 6, 75% of the TIF generated has to be utilized
to pay obligations or set aside to pay future obligations. We recommend
completing a year six rule analysis for the Ellipse TIF District to determine if
it can be decertified sooner than 2022 when it is anticipated that the E2
Note will be paid in full (since TIF Notes A and B will be paid off by 2020).
7. Interfund Loan for Elmwood. On December 20, 2010, the EDA approved
an interfund loan for up to $5 million for expenditure on various public
improvements within the District. We recommend updating and increasing
the Interfund Loan resolution for the Elmwood TIF district from $5,000,000
to $5,500,000 to cover the additional funds anticipated within the District for
use on the identified public improvements (increase of $500,000).
Study Session Meeting October 26, 2015(Item No. 2)
Title: Annual TIF Management Report Page 123
Final Thoughts
1. Redevelopment efforts have increased property valuations
within the TIF districts by over 750% and justify the short term
investment
2. The City’s TIF districts are in overall good financial health
3. The City has opportunities to utilize funds from several districts
to augment its housing and redevelopment efforts
Study Session Meeting October 26, 2015(Item No. 2)
Title: Annual TIF Management Report Page 124
Meeting: Study Session
Meeting Date: October 26, 2015
Discussion Item: 3
EXECUTIVE SUMMARY
TITLE: Business Terms for Purchase & Redevelopment Contract with 4900 Excelsior, LLC
RECOMMENDED ACTION: This report presents the proposed business terms related to
Oppidan Investment Company’s proposed 4900 Excelsior project. The terms are consistent with
the discussion held at the August 17th Special Study Session. Staff would like to receive
feedback from the Council on these terms. If generally acceptable, staff will have the EDA’s
attorney incorporate the terms into a formal Purchase and Redevelopment Contract with the
Redeveloper which will be presented for formal consideration at the November 16th EDA
meeting.
POLICY CONSIDERATION: Are the proposed business terms for providing financial
assistance to the 4900 Excelsior project consistent with the direction provided at the August 17th
Study Session and does the EDA/City Council continue to support the project as revised?
SUMMARY: Oppidan is proposing to construct a multi-story, mixed-use building at 4900 and
4760 Excelsior Blvd. The proposed building would consist of 176 residential units and 28,228
square feet of commercial space. There are significant extraordinary costs associated with
redeveloping the subject site. These include: environmental investigation and reporting, asbestos
abatement, building demolition, site preparation, shoring, underground stormwater retention, and
structured underground parking. Consequently Oppidan applied to the EDA for Tax Increment
Financing (TIF) assistance to offset a portion of these costs so as to enable the 4900 Excelsior
project to proceed. The Redeveloper’s TIF application was reviewed at the June 8th Study
Session as well as the August 17th Special Study Session where it received favorable support.
FINANCIAL OR BUDGET CONSIDERATION: The cost to construct the proposed 4900
Excelsior project is approximately $47.7 million. The project is not financially feasible due to
more than $7.1 million of extraordinary site preparation costs. It is proposed that the EDA
consider entering into a redevelopment contract with Oppidan under which the Redeveloper
would be reimbursed for qualified site preparation costs up to $2.6 million in pay-as-you-go tax
increment generated by the project. That level of assistance would overcome enough of the
extraordinary site costs described above such that it allows the project to achieve a rate of return
sufficient to attract the necessary equity capital to enable the project to proceed. A TIF Note in
this amount would likely be retired within approximately 7 years. Once the TIF Note is retired the
additional property taxes generated by the project would accrue to the local taxing jurisdictions.
VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and
diverse housing stock.
SUPPORTING DOCUMENTS: Discussion
Prepared by: Greg Hunt, Economic Development Coordinator
Reviewed by: Michele Schnitker, Housing Supervisor
Kevin Locke, Community Development Director
Approved by: Tom Harmening, EDA Executive Director and City Manager
Study Session Meeting of October 26, 2015 (Item No. 3) Page 2
Title: Business Terms for Purchase & Redevelopment Contract with 4900 Excelsior, LLC
DISCUSSION
BACKGROUND: Oppidan Investment Company (“Redeveloper”) proposes to assemble and
redevelop the former Bally Total Fitness block bound by Excelsior Blvd, Quentin Ave S,
Princeton Ave S, and Park Commons Dr. The 1.6-acre redevelopment site consists of two
parcels: the former Bally Total Fitness property located at 4900 Excelsior Blvd. and the vacant
EDA property located at 4760 Excelsior Blvd (“subject site”).
The Redeveloper plans to raze the vacant Bally building and parking structure and replace them
with a mixed-use (residential and retail) development called 4900 Excelsior. The proposed 5 and
partial 6-story-building would consist of 176 residential units (of which 10% would be
designated for households earning 60% of area median income) and 28,228 square feet of
commercial space to be leased to a specialty grocer. Also included would be structured
underground and street parking.
There are significant extraordinary costs associated with redeveloping the subject site. These
include: environmental investigation and reporting, asbestos abatement, building demolition, site
preparation, shoring, underground stormwater retention, and structured underground parking.
Altogether, these costs exceed $7.1 million and prevent the proposed project from achieving
financial feasibility. Consequently Oppidan applied to the EDA for Tax Increment Financing
(TIF) assistance to offset a portion of these costs so as to enable the 4900 Excelsior project to
proceed.
Level and Type of Financial Assistance
Oppidan’s sources and uses statements, cash flow projections, and investor rate of return (ROR)
related to 4900 Excelsior were examined by staff and Ehlers (the EDA’s financial consultant).
The estimates were found to be reasonable and within industry standards for this type of
redevelopment. It was also concluded, given the extraordinary costs outlined above, that but for
financial assistance from the EDA the proposed project would not attain the necessary cash-on-
cash (COC) return for it to obtain financing.
In order for the proposed project to achieve the necessary cash-on-cash (COC) return it was
determined that $2,600,000 in tax increment would be necessary. That level of assistance would
overcome enough of the extraordinary site costs described above such that it allows the project to
achieve a rate of return sufficient to attract the necessary equity capital to enable the project to
receive financing.
Request for TIF Assistance
Oppidan’s application for TIF assistance was reviewed at the June 8th Study Session as well as
the August 17th Special Study Session where it received favorable support. Following discussion
there was consensus to consider reimbursing the Redeveloper for qualified costs up to
$2,600,000 in pay-as-you-go tax increment generated by the project for a term of approximately
7 years.
Proposed Business Terms – 4900 Excelsior Project
The following are proposed Business Terms between the St. Louis Park Economic Development
Authority (“EDA”) and 4900 Excelsior, LLC (“Redeveloper”) and are consistent with EDA Policy,
past practices and previous discussions with the EDA/City Council of the City of St. Louis Park
(“City”). Upon mutual agreement, these terms will be incorporated into a Purchase and
Study Session Meeting of October 26, 2015 (Item No. 3) Page 3
Title: Business Terms for Purchase & Redevelopment Contract with 4900 Excelsior, LLC
Redevelopment Contract (“Redevelopment Contract”) for the 4900 Excelsior mixed-use development
to be constructed at 4900 and 4760 Excelsior Boulevard, St. Louis Park (the “Project”).
1. For purposes of the proposed Redevelopment Contract, the properties located at 4900 and
4760 Excelsior Boulevard, St. Louis Park, MN shall together be considered the
“Redevelopment Property” for the 4900 Excelsior project (“Project”). The property
located at 4900 Excelsior Boulevard (“Third-Party Property”) is privately owned. The
Redeveloper agrees to close on the acquisition of the Third-Party Property within 60 days
of obtaining financing for the Project (“Closing”).
2. The EDA owns the property located at 4760 Excelsior Boulevard (“EDA Property”) and
will convey title to and possession of the EDA Property to the Redeveloper by quit claim
deed, subject to the following:
(a) Prior to Closing, the Redeveloper shall prepare and obtain City approval of a
Final PUD ordinance for the Redevelopment Property and a Final Plat of the
Redevelopment Property at Redeveloper’s cost and subject to all City
ordinances and procedures.
(b) The EDA will use good-faith efforts to obtain approval by the City Council,
prior to Closing, of any required amendment to the City zoning ordinance in
order to permit construction of the Minimum Improvements (as defined in
paragraph 11) on the Redevelopment Property.
(c) The purchase price for the EDA Property shall be $780,000. The Redeveloper
shall place $25,000 in earnest money into an escrow account to be held and
applied to the Purchase Price at Closing.
(d) The EDA's obligation to convey the EDA Property to the Redeveloper is subject
to satisfaction of the following terms and conditions:
(1) The EDA having acknowledged permanent financing for construction of
the Minimum Improvements and the Redeveloper having closed on such
permanent financing at or before Closing.
(2) The City having approved the Final PUD ordinance and Final Plat, and
the City and Redeveloper having recorded the Final Plat at or before
Closing.
(3) The EDA having approved Construction Plans for the Minimum
Improvements.
(4) Redeveloper having approved the state of title to the EDA Property.
3. Closing shall occur no later than June 30, 2016.
4. The parties acknowledge that asbestos has been found on the Third-Party Property.
Promptly following the Closing, Redeveloper shall undertake remediation and any other
actions required to remove the asbestos and any other environmental contaminants,
Study Session Meeting of October 26, 2015 (Item No. 3) Page 4
Title: Business Terms for Purchase & Redevelopment Contract with 4900 Excelsior, LLC
including any emergency procedures. If a VRAP is required, the Redeveloper expressly
agrees to perform any task or obligation imposed under the VRAP, including any
emergency procedures.
5. The Redeveloper acknowledges that the EDA makes no representations or warranties as to
the condition of the soils on the Redevelopment Property or the fitness of the
Redevelopment Property for construction of the Minimum Improvements or any other
purpose for which the Redeveloper may make use of such property, and that the assistance
provided to the Redeveloper neither implies any responsibility by the EDA or the City for
any contamination of the Redevelopment Property nor imposes any obligation on such
parties to participate in any cleanup of the Redevelopment Property.
6. The Redeveloper further agrees that it will indemnify, defend, and hold harmless the EDA,
the City, and their governing body members, officers, and employees (“Indemnitees”), from
any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants
existing on the Redevelopment Property.
7. The EDA has determined that, in order to make development of the Minimum
Improvements financially feasible, it is necessary to reimburse Redeveloper for a portion of
the cost of: building demolition, environmental contamination cleanup and reporting, site
preparation, stormwater management, and structured parking related to the Minimum
Improvements (the “Public Redevelopment Costs”). The tax increment generated from the
4900 Excelsior TIF District will be payable to Redeveloper in the form of one tax
increment revenue note (the “Note”), which would be structured on the following basis:
Issue total: $2,600,000
Type: Pay-as-you-go
Term: Until full repayment – approximately 7 years
Interest Rate: 4.5%
Admin Fee: 5%
Fiscal Disparities: Paid from within the district
The EDA shall issue and deliver the Note upon Redeveloper having:
(a) delivered to the EDA written evidence satisfactory to the EDA that
Redeveloper has incurred Public Redevelopment Costs in an amount at least
equal to the principal amount of the Note, which evidence must include
copies of the paid invoices or other comparable evidence for costs of
allowable Public Redevelopment Costs;
(b) delivered to the EDA an investment letter in a form reasonably satisfactory
to the EDA; and
(c) delivered to the EDA written evidence satisfactory to the EDA that
Redeveloper has paid all its contractors and subcontractors in full for all
work satisfactorily completed related to the Public Redevelopment Costs or
provides written certification to the EDA indicating the same.
Study Session Meeting of October 26, 2015 (Item No. 3) Page 5
Title: Business Terms for Purchase & Redevelopment Contract with 4900 Excelsior, LLC
8. The EDA will perform a “lookback” calculation on the earliest of (i) the date when 93% of
the apartments are leased; (ii) the date of any transfer in whole or in part of the
apartments; or (iii) three years after the date of issuance of the Certificate of Completion
for the project. The Redeveloper must submit evidence of its actual annualized
cumulative internal rate of return (the “IRR”) from the apartments, calculated as of the
applicable lookback date, along with the estimated annualized cumulative IRR from the
apartments assuming a sale in the tenth year after the date of issuance of the Certificate of
Completion for the apartments. The amount by which the IRR exceeds eighteen percent
(18%) is considered Excess Income. If the EDA determines that there is Excess Income,
it will apply one hundred percent (100%) of that amount toward prepayment of the
outstanding principal amount of the Note.
9. Both parties agree that any assistance provided to the Redeveloper under the Redevelopment
Contract is not expected to constitute a “business subsidy” under Minnesota Statutes
because the assistance is for redevelopment.
10. Redeveloper agrees that it will pay the reasonable costs of consultants and attorneys retained
by the EDA in connection with the preparation of the TIF Plan, the establishment of the TIF
District, the negotiation and preparation of the Redevelopment Contract and other incidental
agreements and documents. Upon termination of the Redevelopment Contract the
Redeveloper remains obligated for costs incurred through the effective date of termination.
11. Redeveloper agrees to undertake the Minimum Improvements and Redeveloper Public
Improvements as shown in the Official Exhibits to Ordinance -15 (the “City
Ordinance”). In summary, the Redeveloper agrees to remediate the site in compliance
with MPCA requirements, construct the Redeveloper Public Improvements, and construct
the Minimum Improvements in accordance with the City Ordinance. “Minimum
Improvements” means a multi-story, mixed-use building consisting of approximately 176
units of multi-family housing with approximately 28,500 square feet of ground-floor
retail space along with associated underground structured parking and surface parking.
Redeveloper intends that the retail space shall be initially leased by a grocer.
“Redeveloper Public Improvements” means public sidewalks adjacent to all streets
abutting the Redevelopment Property, streetlights, landscaping, streetscape improvements,
and bicycle parking as provided in the Official Exhibits to the City Ordinance.
12. Before commencing construction of the Minimum Improvements or Redeveloper Public
Improvements, the Redeveloper must submit plans and specifications regarding the
Redeveloper Public Improvements for approval by the City Engineer, and must submit
Construction Plans regarding the Minimum Improvements for approval by the EDA
(together, the “Construction Plans”). Plans related to any environmental remediation,
however, do not require approval by the City or EDA. All work on the Redeveloper
Public Improvements and Minimum Improvements shall be in accordance with the
approved Construction Plans and shall comply with all City requirements regarding such
improvements. The parties agree and understand that the City will accept the
Redeveloper Public Improvements in accordance with City procedures as specified in the
Planning and Development Contract between the City of St. Louis Park and 4900
Excelsior, LLC.
Study Session Meeting of October 26, 2015 (Item No. 3) Page 6
Title: Business Terms for Purchase & Redevelopment Contract with 4900 Excelsior, LLC
13. If the Redeveloper desires to make any material change in the Construction Plans after their
approval by the EDA, the Redeveloper shall submit the proposed change to the EDA for its
approval. The term “material” means changes that increase or decrease construction costs
by $500,000 or more.
14. Subject to Unavoidable Delays, Redeveloper agrees to commence construction of the
Minimum Improvements by July 31, 2016 and substantially complete them by June 30,
2018. If the Redeveloper anticipates that the above timetable will not be met, Redeveloper
shall provide a written and oral presentation to the City Council of the City at a regular City
Council meeting prior to the Required Commencement Date or Completion Date. The
report must describe the reasons for the expected failure to meet the schedule, evidence of
Redeveloper’s due diligence in working toward construction of the relevant Phase, and a
detailed revised schedule. Failure to timely provide such written and oral report is an Event
of Default.
15. The Redeveloper agrees to comply with the City’s Green Building Policy adopted 2-16-10.
As a condition to issuance of a Certificate of Completion for the Minimum Improvements,
Redeveloper will submit to the EDA a detailed list of the specific energy-
efficient/sustainable features or components implemented in the construction of the
Minimum Improvements.
16. Redeveloper shall install dedicated wired connections from each building’s point of
presence to each internal wiring closet, thence to each living and working unit. Each
living and working unit shall have at least two (2) connections, each capable of
supporting at minimum a one-gigabit connection. The Redeveloper shall wire the
building to include 2 CATV and 2 CAT-6 connections. To provide for future high-speed
broadband service, the Redeveloper shall install one empty 2-inch conduit from within a
new or existing handhold in proximity to its existing telecommunications services
(typically in public Right-of-Way) to a point of presence within each building in
proximity to its existing telecommunications services.
17. Redeveloper is obligated to expend at least $75,000.00 for public artwork to be placed in a
prominent location on the Redevelopment Property, on the exterior of the Minimum
Improvements. Prior to its installation, the public artwork shall be approved by the City,
which approval shall not be unreasonably withheld. The artwork shall be installed prior to
issuance of the certificate of occupancy for the project.
18. Promptly after completion of the Minimum Improvements, the EDA Representative will
deliver to the Redeveloper a Certificate of Completion. The construction of the Minimum
Improvements will be deemed to be substantially complete upon issuance of a certificate of
occupancy for the Minimum Improvements, and upon determination by the EDA
Representative that all related site improvements on the Redevelopment Property have been
substantially completed in accordance with approved Construction Plans, subject to
landscaping that cannot be completed until seasonal conditions permit.
Study Session Meeting of October 26, 2015 (Item No. 3) Page 7
Title: Business Terms for Purchase & Redevelopment Contract with 4900 Excelsior, LLC
19. Redeveloper shall undertake all work related to the Redeveloper Public Improvements and
the Minimum Improvements in compliance with all applicable federal and state laws,
including without limitation all applicable state and federal Occupational Safety and Health
Act regulations. Any subcontractors retained by Redeveloper shall be subject to the same
requirements. All Redeveloper Public Improvements shall be constructed in accordance
with the City Ordinance.
20. Redeveloper agrees that the Minimum Improvements will be professionally managed by a
property management company with substantial experience in operating mixed use
developments. The Redeveloper’s selection of the property management company is
subject to EDA approval, which shall not be unreasonably withheld.
21. The parties agree that the Redeveloper shall be responsible for all maintenance (including
snow and ice removal) and repair costs associated with the Redeveloper Public
Improvements on the Redevelopment Property (“Maintenance Costs”) including:
• Driveways, service drives, and surface parking stalls.
• Parking structure
• Sidewalks
• Streetlights
• Landscaping
• Streetscape improvements
• Bicycle Parking
Redeveloper shall not be responsible for the maintenance and repair of those public
improvements typically maintained by the city’s Special Service District #3.
22. Upon the written request of the EDA or City, the Redeveloper agrees to file any petition or
other document required to enter into Special Service District No. 3 for the continued
maintenance of the streetscaping along Excelsior Boulevard right of way.
23. Prior to the issuance of any certificate of occupancy for any part of the project,
Redeveloper will enter into an agreement with the EDA or City relating to the operation
and maintenance of all pedestrian and landscaping improvements located on the Subject
Property other than those within the Excelsior Boulevard right of way and/or covered
included in Special Service District No. 3 (the “Maintenance Plan”). The Maintenance Plan
must address, at a minimum: snow removal from pedestrian connections and sidewalks;
maintenance and replacement of landscaping, irrigation and other streetscaping; snow
removal and maintenance of any surface parking; and maintenance of the public art
(together, the “Maintenance”); a description of how the costs of such Maintenance will be
assessed to tenants; and enforcement mechanisms.
24. If the Redeveloper fails to perform the Maintenance in accordance with the Maintenance
Plan, the City, at its option and following thirty (30) days written notice from the EDA to
the Redeveloper, may enter the Redevelopment property and perform the Maintenance. The
Redeveloper agrees to permit the City to specially assess any costs of the Maintenance
proportionately against the Minimum Improvements.
Study Session Meeting of October 26, 2015 (Item No. 3) Page 8
Title: Business Terms for Purchase & Redevelopment Contract with 4900 Excelsior, LLC
25. The Redeveloper agrees to comply with the City’s Inclusionary Housing Policy adopted 6-
1-15 including the following:
A. Redeveloper agrees to reserve at least 18 (or 10% whichever is greater) of the
apartment units for households earning 60% of AMI or at least 8% of the
apartment units for households earning 50% of AMI for at least 25 years
following building occupancy.
B. The monthly rental price for affordable dwelling units shall include rent and
utility costs and shall be based on fifty percent (50%) and/or sixty percent (60%)
for the metropolitan area that includes St. Louis Park adjusted for bedroom size
and calculated annually by Minnesota Housing for establishing rent limits for the
Housing Tax Credit Program.
C. The size and design of the affordable dwelling units shall be consistent and
comparable with the market rate units in the rest of the project and is subject to
the approval of the City. The Affordable dwelling units shall be distributed
throughout the building.
D. The affordable dwelling units shall have a number of bedrooms in the approximate
proportion as the market rate units.
E. Redeveloper agrees to prepare an Affordable Housing Plan as defined in the City’s
Inclusionary Housing Policy. The Affordable Housing Plan shall describe how the
Redeveloper complies with each of the applicable requirements of Inclusionary
Housing Policy. Such a Plan shall be prepared and must be approved by the City
prior to or in conjunction with the Redeveloper receiving its Certificate of
Occupancy from the City.
26. Upon execution of the Redevelopment Contract, the Redeveloper shall, with the EDA,
execute an Assessment Agreement specifying an assessor's minimum Market Value for the
Redevelopment Property and Minimum Improvements. The amount of the minimum
Market Value shall be determined by mutual agreement of the parties and consent of the
City Assessor, and may include a value representing partial completion of the Minimum
Improvements for taxes payable in 2017.
27. If Redeveloper requires mortgage financing for the development of the Project, the EDA
agrees to subordinate its rights under the Redevelopment Contract to the Holder of any
Mortgage securing construction or permanent financing, in accordance with the terms of a
mutually-approved subordination agreement.
28. Redeveloper agrees not to transfer the Redevelopment Contract or the Redevelopment
Property (except to an affiliate) prior to receiving a Certificate of Completion without the
prior written consent of the EDA, except for construction mortgage financing and/or
permanent financing. The EDA's consent shall not be unreasonably withheld, conditioned
or delayed. The EDA agrees to provide its consent or refusal to consent to Redeveloper
in writing within 10 days after a request for such consent from Redeveloper.
Study Session Meeting of October 26, 2015 (Item No. 3) Page 9
Title: Business Terms for Purchase & Redevelopment Contract with 4900 Excelsior, LLC
29. Redeveloper agrees that any proposed transferee, shall, for itself and its successors and
assigns, and expressly for the benefit of the EDA, expressly assume all of the obligations
of the Redeveloper under this Agreement as to the portion of the Redevelopment
Property to be transferred and agrees to be subject to all the conditions and restrictions to
which the Redeveloper is subject.
30. Redeveloper agrees that no portion of the Redevelopment Property will be used for a
sexually-oriented business as defined in City Code, Section 14:5-3(28), a pawnshop, a
check-cashing business, payday loan agency, a tattoo business, or a gun business, and
that such restrictions may be placed in the Redevelopment Deed.
31. Redeveloper agrees that the EDA and the City will not be held liable for any loss or
damage to property or any injury to or death of any person occurring at or about or
resulting from any defect in the Redevelopment Property or the Minimum Improvements.
32. The Redeveloper agrees not to discriminate upon the basis of race, color, creed, sex or
national origin in the construction and maintenance of the Minimum Improvements and
Public Improvements as well as lease, rental, use or occupancy of the Redevelopment
Property or any improvements erected thereon.
The above terms will serve as the basis for and be incorporated into a Purchase and
Redevelopment Contract with 4900 Excelsior, LLC.
NEXT STEPS: Staff will work with legal counsel to prepare a formal Purchase and
Redevelopment Contract with Oppidan based on the proposed business terms and any input
provided by the EDA. Such a contract is expected to be brought to the EDA for formal
consideration on November 16th; the same evening as the public hearing for the proposed 4900
Excelsior TIF District.
Meeting: Study Session
Meeting Date: October 26, 2015
Discussion Item: 4
EXECUTIVE SUMMARY
TITLE: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
RECOMMENDED ACTION: Staff desires to provide the City Council an overview of
proposed changes to the City’s property maintenance code prior to requesting formal approval.
POLICY CONSIDERATION: Does the proposed property maintenance code address the City
Council’s desire to have well maintained properties in St. Louis Park? Does the Council want to
go forward with the adoption of the 2012 International Property Maintenance Code with
amendments?
SUMMARY: Staff desires to discuss with the City Council the approval of an ordinance that
would adopt the 2012 Edition of the International Property Maintenance Code (IPMC), with
revised amendments, as the Property Maintenance Code for the city.
The 2003 edition of the IPMC has been in use as a basis for our maintenance programs for the
past decade. The IPMC is part of a family of model codes developed and published by the
International Code Council (ICC). These codes for building construction, energy conservation,
fire prevention, maintenance, and others are utilized by jurisdictions throughout many countries.
They are written with input from local member jurisdictions and voted into the model codes at
annual Code Hearings.
This current edition is no longer in publication and not consistent with the 2012 edition of the
ICC codes for building construction adopted by the State during 2015. Initiating the process to
adopt the 2012 IPMC provides an opportunity to review and propose amendments to the code
and to provide additional tools for improving property maintenance in the city.
FINANCIAL OR BUDGET CONSIDERATION: Not applicable.
VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and
diverse housing stock.
SUPPORTING DOCUMENTS: Discussion
Attachment A - Overview of Changes to Property Maint. Code
Prepared by: Ann Boettcher, Inspection Services Manager
Reviewed by: Brian Hoffman, Director of Inspections
Approved by: Tom Harmening, City Manager
Study Session Meeting of October 26, 2015 (Item No. 4) Page 2
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
DISCUSSION
BACKGROUND: The City Council was anticipating future issues several decades ago when
establishing the initial Housing Code in 1963, a time when much of the building stock was
relatively young. Throughout the years the city code for property maintenance has continually
evolved and various inspection programs have been developed.
During the 2001 city code recodification process, the first comprehensive property maintenance
code was adopted. The 2000 edition of the International Code Council Property Maintenance
Code (IPMC) was adopted by reference, with city specific amendments.
Section 6-141 of the city code for the property maintenance program has two very important
components; 1) all buildings are maintained under the building code standards in place at the
time they were constructed; and 2) maintained in compliance with the IPMC. This creates a
comprehensive property maintenance code with a set of minimum standards applying to all
buildings at all times, including single family, multi-family and commercial buildings. All
property maintenance inspection programs use this code to verify maintenance of structures has
occurred.
State Statute allows local government units to establish property maintenance codes provided
they are not more restrictive than any of the State Building Codes. Our property maintenance
code is consistent with these parameters. For example a 1950’s home can remain as it was built
provided it has not been modified and is properly maintained. The exception is for smoke and
carbon monoxide detectors which need to be installed in all residential properties according to
state statue. The city originally adopted its first Building Code in 1926, and several subsequent
codes, until the State Building Code became effective in 1972. The department maintains a
library of all the building codes that have been in effect since 1926 for reference.
Property Maintenance Programs including Point of Sale, Rental Licensing, Complaint Response,
and City-wide Property Evaluations, all utilize the building code in effect at time of construction
and the IPMC to verify compliance.
The guiding principles behind the adoption of this code are:
• Establishment of a minimum level for property maintenance – applied equally on all
buildings, at all times
• Provides a program for overall public safety
• Meets legal statutory requirements
• Ensures consistent application of codes and inspections.
ANALYSIS: Below are some of the significant amendments staff is proposing to include in the
2012 IPMC during this process. These amendments address community issues that staff has not
had effective tools to help resolve in the past.
Section 302.2 Grading and Drainage. All premises shall be graded and maintained to prevent the
erosion of soil and to prevent the accumulation of stagnant water thereon, or within any structure
locate thereon. No additional water shall be directed or drained onto adjacent properties.
Study Session Meeting of October 26, 2015 (Item No. 4) Page 3
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
Section 302.3 Sidewalks and Driveways – All sidewalks, walkways, stairs, driveways, parking
spaces and similar areas shall be kept in a proper state of repair, and maintained free from
hazardous conditions such as but not limited to broken pavement, potholes, tripping hazards and
vegetation growth through the parking or sidewalk surfaces.
Section 304.7 Roofs and Drainage. Amended to read: The roof and flashing shall be maintained
sound, weather-tight, and in good repair. Roofs shall not have defects or deterioration that allow
precipitation to pass. Roof drainage shall be adequate to prevent dampness or deterioration in
the walls or interior portion of the structure. Roof drains, gutters, and downspouts shall be
maintained in good repair and free from obstructions. Roof water shall not be discharged in a
manner that creates a public nuisance. Asphalt shingles that have worn granules or curled shall
be repaired or replaced.
Section 310 Outdoor Storage. Unless specifically permitted by the Zoning Code Chapter 36, no
outdoor storage of personal or business items are permitted. Items include, but not limited to the
following; lawnmowers, snow blowers, lawn/garden equipment, construction material or equipment.
Exemption – The following items are exempt from the outdoor storage prohibition of this
section:
a. Clothesline poles and lines
b. Patio furniture
c. Barbecue grills
d. Ornamental yard enhancements (landscaping, light poles, trellises, benches designed
for exterior use and other permanent improvements designed to enhance the
appearance of the yard).
e. Children’s play equipment
402.4 Exterior Lighting – Exterior lighting shall be maintained, operational and free of broken or
defective lenses and housing.
Attachment A is provided as reference to city council, comparing all the changes between the
2003 and the 2012 IPMC and the city amendments. Many of these are wording changes to the
model code to improve clarity, in other cases additional provisions have been added by the
model code for unsafe structures and equipment, unsafe conditions for exterior and interior,
component serviceability, and electrical. Copies of the 2012 IPMC will be available for your
review.
OTHER CONSIDERATIONS:
• The extended use of construction dumpsters on residential properties has become a public
concern with minimal regulations. Staff has discussed solutions and will be evaluating
solutions connected to building permitting or solid waste contractor licensing at a future
date.
• Staff is reviewing options for nuisance abatement in Section 12-35 to be used in a greater
scope.
• Applications of Sustainability (Green) and Energy Conservation possibilities within the
code has been raised. State Building Code regulates building energy conservation and the
city may not be more restrictive than the state. Any remodeling, repair, replacement,
installation of building components or appliances must be in compliance with State Building
Study Session Meeting of October 26, 2015 (Item No. 4) Page 4
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
Code. Appliances such as gas furnace efficiencies are established by the Federal Department
of Energy.
NEXT STEPS: If the council would like to go forward with the proposed adoption of the 2012
IPMC with city amendments, staff will work with the City Attorney in preparation of an
ordinance for first reading. Staff is suggesting a time schedule for a January, 2016 effective date.
Study Session Meeting of October 26, 2015 (Item No. 4) Page 5
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
ATTACHMENT A
Analysis comparing the 2003 IPMC to the 2012 IPMC includes the following identifications are
provided to clarify comparison:
• Strike through represents language removed by ICC
• Underline represents language added ICC
• Highlighted sections are existing city amendments
• Highlighted and underlined are proposed city amendments
CHAPTER 1 SCOPE AND ADMINISTRATION
SECTION 101 GENERAL
Section 101.1. Title. Amended to read: These regulations shall be known as the Property
Maintenance Code of the City of St. Louis Park, hereinafter referred to as "this code."
101.3 Intent. This code shall be construed to secure its express intent, which is to ensure public
health, safety and welfare insofar as they are affected by the continued occupancy and
maintenance of structures and premises. Existing structures and premises that do not comply
with these provisions shall be altered or repaired to provide a minimum level of health and safety
as required herein. Repairs, alterations, additions to and change of occupancy in existing
buildings shall comply with the International Existing Building Code.
SECTION 102 APPLICABILITY
102.1 General. The provisions of this code shall apply to all matters affecting or relating to
structures and premises, as set forth in Section 101. Where there is a conflict between a general
requirement and a specific requirements, the specific requirement shall govern. Where
difference occur between provisions of this code and the referenced standards, the provisions of
the code shall apply. Where, in a specific case, different sections of this code specify different
requirements, the most restrictive shall govern.
Section 102.3. Application of other codes. Amended to read: Repairs, additions or alterations to
a structure or changes of occupancy shall be done in accordance with the procedures and
provisions of the Minnesota State Building Code and the City of St. Louis Park Code of
Ordinances.
Section 102.7. Referenced codes and standards. Amended to read: All references to other codes
or standards within this Code shall mean the applicable provisions of St. Louis Park Code of
Ordinances or Minnesota State Building Code, whichever is the most restrictive requirement
permitted under statute.
Exception: Where enforcement of a code provision would violate the conditions of the
listing of the equipment or appliance, the conditions of the listing shall apply.
102.7.1 Conflicts. Where conflicts occur between provisions of this code and the referenced
standards, the provisions of this code shall apply.
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Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
102.7.2 Provisions in referenced codes and standards. Where the extent of the reference to a
referenced code or standard includes subject matter that is within the scope of this code, the
provisions of this code, the provisions of this code, as applicable, shall take precedence over the
provisions in the referenced code or standard.
102.9 Application of references. References to chapter or section numbers, or to provisions not
specifically identified by number, shall be construed to refer to such chapter, section or provision
of this code.
102.10 Other laws. The provisions of this code shall not be deemed to nullify any provisions of
local, state or federal law.
PART 2 – ADMINISTRATION AND ENFORCEMENT
Section 103.2. Appointment. Amended to read: The director of inspections shall be the code
official.
103.3 Deputies. In accordance with the prescribed procedures of this jurisdiction and with the
concurrence of the appointing authority, the code official shall have the authority to appoint a
deputy(s) code official, other related technical officers, inspectors and other employees. Such
employees shall have powers as delegated by the code official.
103.4 Liability. The code official, officer , member of the board of appeals, or employee
charged with the enforcement of this code, while acting for the jurisdiction, in good faith and
without malice in the discharge of the duties required by this code or other pertinent law or
ordinance shall not thereby be rendered liable personally, and is hereby relieved from all
personal liability for any damage accruing to persons or property as a result of an act required or
permitted omission in the discharge of official duties. Any suit instituted against any officer or
employee because of an act performed by that officer or employee in the lawful discharge of
duties and under the provisions of this code shall be defended by the legal representative of the
jurisdiction until the final termination of the proceedings. The code official or any subordinate
shall not be liable for costs in an action, suit or proceeding that is instituted in the pursuance of
the provisions of this code. and any officer of the department of property maintenance
inspection, acting in good faith and without malice, shall be free from liability for acts performed
under any of its provisions or by reason of any act or omission in the performance of official
dutie4s in connection therewith.
Section 103.5 Fees. Deleted.
SECTION 104 – DUTIES AND POWERS OF THE CODE OFFICIAL
104.1 General. The code official shall is hereby authorized and directed to enforce the
provisions of this code. The code official shall have the authority to render interpretations of this
code and to adopt policies and procedures in order to clarity the application of its provisions.
Such interpretations, policies and procedures shall be in compliance with the intent and purpose
of this code. Such policies and procedures shall not have the effect of waiving requirements
specifically provided for in this code.
Study Session Meeting of October 26, 2015 (Item No. 4) Page 7
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
104.2 Rule-making authority. The code official shall have authority as necessary in the interest
of public health, safety and general welfare, to adopt and promulgate rules and procedures; to
interpret and implement the provisions of this code; to secure the intent thereof; and to designate
requirements applicable because of local climatic or other conditions. Such rules shall not have
the effect of waiving structural or fire performance requirements specifically provided for in this
code, or of violating accepted engineering methods involving public safety.
104.32Inspections.
104.43. Right of entry. Where it is necessary to make an inspection to enforce the provisions of
the code, or whenever the code official has reasonable cause to believe that there exists in a
structure or upon a premises a condition in violation of this code, T the code official is
authorized to enter the structure or premises at reasonable times to inspect subject to
constitutional restrictions or unreasonable searches and seizures or perform the duties imposed
by this code, provided that if such structure or premises is occupied the code official shall
present credentials to the occupant and request entry. If such structure or premises is
unoccupied, the code official shall first make a reasonable effort to locate the owner or other
person having charge or control of the structure or premises and request entry. If entry is refused
or not obtained, the code official is authorized to pursue recourse as provided by law.
104.54 Identification.
104.65 Notices and orders.
104.76. Department records. The code official shall keep official records of all business and
activities of the department specified in the provisions of this code. Such records shall be
retained in the official records as long as the building or structure to which such records relate
remains in existence, unless otherwise provided for by other regulations for the period required
for retention of public records.
104.8 Coordination of inspections. Whenever in the enforcement of this code or another
code or ordinance, the responsibili6ty of more than one code official of the jurisdiction is
involved, it shall be the duty of the code officials involved to coordinate their inspections
and administrative orders as fully as practicable so that the owners and occupants of the
structure shall not be subjected to visits by numerous inspectors or multiple or conflicting
orders. Whenever an inspector from any agency or department observes an apparent or
actual violation of some provision of some law, ordinance or code not within the inspector’s
authority to enforce, the inspector shall report the findings to the code official having
jurisdiction.
SECTION 105 – APPROVAL
105.1 Modifications. Whenever there are practical difficulties involved in carrying out the
provisions of tis code, the code official shall have the authority to grant modifications for
individual cases upon application of the owner or owner’s representative, provided the code
official shall first find that special individual reason makes the strict letter of this code
impractical and the modification does not lessen health, life and fire safety requirements. The
details of action granting modifications shall be recorded and entered in the department files.
Study Session Meeting of October 26, 2015 (Item No. 4) Page 8
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
105.4 Used material and equipment. The use of used materials which meet the requirements
of this code for new materials is permitted. Materials, equipment and devices shall not be reused
unless such elements are in good repair or have been reconditioned and tested when necessary,
placed in good and proper working condition and approved by the code official.
105.5 Approved materials and equipment. Materials, equipment and devices approved by the
code official shall be constructed and installed in accordance with such approval.
105.6 Research reports. Supporting data, where necessary to assist in the approval of materials
or assemblies not specifically provided for in this code, shall consist of valid research reports
from approved sources.
SECTION 106 – VIOLATIONS
Section 106.3 Prosecution of violation. Amended to read: Any person failing to comply with a
notice of violation or order served in accordance with Section 107 shall be deemed guilty of a
misdemeanor, and the violation shall be deemed a strict liability offense. If the notice of
violation is not complied with, the code official shall institute the appropriate proceeding at law
or in equity to restrain, correct or abate such violation, or to require the removal or termination of
the unlawful occupancy of the structure in violation of the provisions of this code or of the order
or direction made pursuant thereto. Any expenses incurred in carrying out the enforcement of the
provisions of this ordinance shall be included as an assessment for a service against the property
by the City Clerk
SECTION 107 NOTICES AND ORDERS
Section 107.1 Notice to person responsible. Amended to read: Whenever the code official
determines that there has been a violation of this code or has grounds to believe that a violation
has occurred, notice shall be given in the manner prescribed in Sections 107.2 and 107.3 to the
person responsible for the violation as specified in this code. The code official shall also provide
notice as provided in Section 108.3.
Section 107.2 Form. Subsection 5. Deleted.
Section 107.2 Form. Subsection 6. Deleted.
107.4 Unauthorized tampering. Signs, tags, or seals posted or affixed by the code official shall
not be mutilated, destroyed or tampered with, or removed without authorization from the code
official.
107.45 Penalties
107.56 Transfer of Ownership
Section 107.56 Transfer of ownership. Deleted.
SECTION 108 UNSAFE STRUCTURES AND EQUIPMENT
Study Session Meeting of October 26, 2015 (Item No. 4) Page 9
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
Section 108.1 General. Amended to read: When a structure or equipment is found by the code
official to be unsafe, or when a structure is found unfit for human occupancy, or is found
unlawful, such structure shall be subject to the provisions of this code.
108.1.5 Dangerous structure or premises. For the purpose of this code, any structure or
premises that has any or all of the conditions or defects described below shall be considered
dangerous:
1. Any door, aisle, passageway, stairway, exit or other means of egress that does not
conform to the approved building or fire code of the jurisdiction as related to the
requirements for exiting buildings.
2. The walking surface of any aisle, passageway, stairway, exit or other means of egress
is so warped, worn loose, torn or otherwise unsafe as to not provide safe and adequate
means of egress.
3. Any portion of a building, structure or appurtenance that has been damaged by fire,
earthquake, wind, flood, deterioration, neglect, abandonment, vandalism or by any
other cause to such an extent that is likely to partially or completely collapse, or to
become detached or dislodged.
4. Any portion of a building, or any member, appurtenance or ornamentation on the
exterior thereof that is not of sufficient strength or stability, or is not so anchored,
attached or fastened in place so as to be capable of resisting natural or artificial loads
of one and one-half the original designed value.
5. The building or structure, or part of the building or structure, because of dilapidation,
deterioration, decay, faulty construction, the removal or movement of some portion of
the ground necessary for the support, or for any other reason, is likely to partially or
completely collapse, or some portion of the foundation or underpinning of the
building of structure is likely to fail or give way.
6. The building or structure, or any portion thereof, is clearly unsafe for its use and
occupancy.
7. The building or structure is neglected, damaged, dilapidated, unsecured or abandoned
so as to become an attractive nuisance to children who might play in the building or
structure to their danger, becomes harbor for vagrants, criminals or immoral persons,
or enables persons to resort to the building or structure for committing a nuisance or
an unlawful act.
8. Any building or structure has been constructed, exists or is maintained in violation of
any specific requirement or prohibition applicable to such building or structure
provided by the approved building or fire code of the jurisdiction, or of any law or
ordinance to such an extent as to present either a substantial risk of fire, building
collapse or any other threat to life and safety.
9. A building or structure, used or intended to be used for dwelling purposes, because of
inadequate maintenance, dilapidation, decay, damage, faulty construction or
arrangement, inadequate light ventilation, mechanical or plumbing system, or
otherwise, is determined by the code official to be unsanitary, unfit for human
habitation or in such a condition that is likely to cause sickness or disease.
10. Any building or structure, because of a lack of sufficient or proper fire-resistance-
rated construction, fire protection systems, electrical system, fuel connections,
mechanical system, plumbing system, or other cause, is determined by the code
official to be a threat to life or death.
Study Session Meeting of October 26, 2015 (Item No. 4) Page 10
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
11. Any portion of a building remains on a site after the demolition or destruction of the
building or structure or whenever any building or structure is abandoned so as to
constitute such building or portion thereof as an attractive nuisance or hazard to the
public.
Section 108.2 Closing of vacant structures. Amended to read: If the structure is vacant and unfit
for human habitation and occupancy, and is not in danger of structural collapse, the code official
is authorized to post the premises and order the structure closed up so as not to be an attractive
nuisance. Upon failure of the owner to close up the premises within the time specified in the
order, the code official shall cause the premises to be closed and secured through any available
public agency or by contract or arrangement by private persons and the cost thereof shall be
assessed to the real estate upon which the structure is located.
108.2.1 Authority to disconnect service utilities. The code official shall have the authority to
authorize disconnection of utility service to the building, structure or system regulated by this
code and the referenced codes and standards set forth in Section 102.7 in case of emergency
where necessary to eliminate an immediate hazard to life or property or when such utility
connection has been made without approval. The code official shall notify the serving utility
and, whenever possible, the owner and occupant of the building, structure or service system of
the decision to disconnect prior to taking such action. If not notified prior to disconnection the
owner or occupant of the building structure or service system shall be notified in writing as soon
as practical thereafter.
Section 108.3 Notice. Amended to read: Whenever a code official has determined a structure or
equipment is unsafe, a structure is unfit for human occupancy or a structure is unlawful under the
provisions of this section, notice shall be posted in a conspicuous place in or about the structure
affected by such notice and served on the owner or the person or persons responsible for the
structure in accordance with Section 107.3. If the notice pertains to equipment, it shall also be
placed on the unsafe equipment. The notice shall be in the form prescribed in Section 107.2.
Section 108.4 Posting. Amended to read: Upon failure of the owner or persons responsible to
comply with the notice provisions within the time given, the code official shall place a posting
on the premises or on the defective equipment which shall provide a statement of the penalties
for occupying the premises, operating the equipment or removing the posting.
Section 108.4.1 Posting removal. Amended to read: The code official shall remove the posting
whenever the defect or defects upon which the enforcement action and posting were based have
been eliminated. Any person who defaces or removes a posting without the approval of the code
official shall be subjected to the penalties provided by this code.
Section 108.5 Prohibited occupancy. Amended to read: Any occupied structure posted by the
code official shall be vacated as ordered by the code official. Any person who shall occupy a
posted premises or shall operate posted equipment, and any owner or person responsible for the
premises who shall let anyone occupy a posted premises or operate posted equipment, shall be
liable for the penalties provided by this code.
Section 108.6. Removal of placard. Deleted.
Study Session Meeting of October 26, 2015 (Item No. 4) Page 11
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
108.6 Abatement methods. The owner, operator or occupant of a building, premises or
equipment deemed unsafe by the code official shall abate or cause to be abated or corrected such
unsafe conditions either by repair, rehabilitation, demolition or other approved corrective action.
108.7 Record. The code official shall cause a report to be filed on an unsafe condition. The
report shall state the occupancy of the structure and the nature of the unsafe condition.
SECTION 110 – DEMOLITION
110.1 General. The code official shall order the owner of any premises upon which is located
any structure, which in the code official judgment after review is so deteriorated or dilapidated
or has become so out of repair as to be dangerous, unsafe, insanitary or otherwise unfit for
human habitation or occupancy, and such that it is unreasonable to repair the structure, to
demolish and remove such structure; or if such structure is capable of being made safe by
repairs, to repair and make safe and sanitary, or to board up and hold for future repair or to
demolish and remove at the owner’s option; or where there has been a cessation of normal
construction of any structure for a period of more than two years, the code official shall order the
owner to demolish and remove such structure, or board up until future repair. Boarding the
building up for future repair shall not extend beyond one year, unless approved by the building
official.
SECTION 111- MEANS OF APPEAL
Section 111.1. Request for appeal hearing. Amended to read: Any person directly affected by a
decision of the code official or a notice or order issued under this code shall have the right to an
appeal hearing when requested in writing to the city. The hearing shall be held within 20 days of
the city receiving a request for appeal. A request for appeal shall be based on a claim that the true
intent of this code or the rules legally adopted under this code have been incorrectly interpreted,
the provisions of this code do not fully apply or the requirements of this code are adequately
satisfied by other means, or that strict application of any requirement of this code would cause
undue hardship.
Section 111.2. Hearing official. Amended to read: The city manager or his/her appointed
designee shall serve as the hearing official for all appeals of this code. The hearing official shall
consider all relevant evidence, documents and verbal presentations submitted during the hearing
from the appeals applicant and the code official. Within ten days following the appeal hearing,
the hearing official shall notify the applicant and code official in writing of the decision.
Section 111.3. Limitations of authority. Amended to read: The hearing official shall have no
authority to waive fire and life safety requirements under the jurisdiction of the fire chief or to
approve a condition that would create a violation of the Minnesota State Building Code.
Section 111.4. Stays of enforcement. Amended to read: Appeal requests, except for imminent
danger orders or hazardous building notices, shall stay the enforcement of the notice and order
until the hearing official has notified the applicant and code official in writing of a decision on
the appeal.
SECTION 112 STOP WORK ORDER
Study Session Meeting of October 26, 2015 (Item No. 4) Page 12
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
112.1 Authority. Whenever the code official finds any work regulated by this code being
performed in a manner contrary to the provisions of this code or in a dangerous or unsafe
manner, the code official is authorized to issue a stop work order.
112.2 Issuance. A stop work order shall be in writing and shall be given to the owner of the
property, to the owner’s agent, or to the person doing the work. Upon issuance of a stop work
order, the cited work shall immediately cease. The stop work order shall state the reason for the
order and the conditions under which the cited work is authorized to resume.
112.3 Emergencies. Where an emergency exists, the code official shall not be required to give
a written notice prior to stopping work.
112.4 Failure to comply. Any person who shall continue any work after having been served
with a stop work order, except such work as that person is directed to perform to remove a
violation or unsafe condition, shall be liable to a fine of not less than [AMOUNT] dollars or
more than [AMOUNT] dollars.
Section 112.4 Failure to comply. Delete
CHAPTER 2 DEFINITIONS
SECTION 201 GENERAL
201.3 Terms defined in other codes. Where terms are not defined in this code and are defined
in the International Building Code, International Existing Building Code, International Fire
Code, International Fuel Gas Code, International Mechanical Code, International Plumbing
Code, International Residential Code, International Zoning Code or the ICC Electrical Code
NFPA 70, such terms shall have the meanings ascribed to them as stated in those codes.
Section 201.3. Terms defined in other codes. Amended to read: Where terms are not defined in
this code and are defined in the St. Louis Park Code of Ordinances or the Minnesota State
Building Code, such terms shall have the meanings ascribed to them in those codes.
SECTION 202 GENERAL DEFINITIONS
ANCHORED. Secured in a manner that provides positive connection.
Section 202 GENERAL DEFINITIONS – CONDEMN. Deleted.
DETACHED. When a structural element is physically disconnected from another and that
connection is necessary to provide a positive connection.
DETERIORATION. To weaken, disintegrate, corrode, rust or decay and lose effectiveness.
EQUIPMENT SUPPORT. Those structural members or assemblies of members or
manufactured elements, including braces, frames, lugs, snuggers, hangers or saddles, that
transmit gravity load, lateral load and operating load between the equipment and the structure.
Study Session Meeting of October 26, 2015 (Item No. 4) Page 13
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
LABELED. Devices Equipment, appliances, or materials or products to which has have been
affixed a label, seal, symbol or other identifying mark of a nationally recognized testing
laboratory, inspection agency or other organization concerned with product evaluation that
maintains periodic inspection of the production of the above-labeled items and by whose labeling
the manufacturer attests to compliance nationally recognized standards indicates either that the
equipment, material or product meets identified standards or has been tested and found suitable
for a specified purpose.
NEGLECT. The lack of proper maintenance for a building or structure.
PEST ELIMINATION, The control and elimination of insects, rodents or other pests by
eliminating their harborage places; by removing or making inaccessible materials that serve as
their food or water; by other approved pest elimination methods.
ULTIMATE DEFORMATION. The deformation at which failure occurs and which shall be
deemed to occur if the sustainable load reduces to 80 percent or less of the maximum strength.
ULTIMATE DEFORMATION. Amended by adding: Reduced below minimum design
standard or by Minnesota Registered Engineer.
CHAPTER 3 GENERAL REQUIREMENTS
SECTION 302 EXTERIOR PROPERTY AREAS
Section 302.2 Grading and Drainage. All premises shall be graded and maintained to prevent
the erosion of soil and to prevent the accumulation of stagnant water thereon, or within any
structure locate thereon. No additional water shall be directed or drained onto adjacent
properties.
Section 302.3 Sidewalks and Driveways. All sidewalks, walkways, stairs, driveways, parking
spaces and similar areas shall be kept in a proper state of repair, and maintained free from
hazardous conditions such as but not limited to broken pavement, potholes, tripping hazards and
vegetation growth through the parking or sidewalk surfaces.
Section 302.4. Weeds. Amended to read: All premises and exterior property shall be maintained
free from all noxious weeds or turf grass growth in excess of six inches.
302.5 Rodent harborage. All structures and exterior property shall be kept free from rodent
harborage and infestation. Where rodents are found, they shall be promptly exterminated by
approved processes which will not be injurious to human health. After extermination pest
elimination, proper precautions shall be taken to eliminate rodent harborage and prevent re-
infestation.
Section 302.8. Motor vehicles. Amended to read: Except as otherwise provided in this St. Louis
Park Municipal Code of Ordinances, no junk vehicle, stock car, racing car, inoperative vehicle,
or unlicensed motor vehicle shall be parked, kept or stored on any premises unless within a
totally enclosed structure. No vehicle shall at any time be in a state of major disassembly,
disrepair or in the process of being stripped or dismantled. Spray painting of vehicles is
prohibited unless conducted inside an approved spray booth.
Study Session Meeting of October 26, 2015 (Item No. 4) Page 14
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
Exception.
Any vehicle is permitted to undergo major overhaul, including minor sheet metal or
fiberglass panel repair and finishing, provided that such work is performed inside a structure
or similarly enclosed area designed and approved for such purposes. Automotive
maintenance and repair shall be limited to the owners/occupants who reside at that address.
SECTION 303 SWIMMING POOLS, SPAS AND HOT TUBS
303.2 Enclosures. Exception: Spas or hot tubs with a safety cover that complies with ASTM F
1346 shall be exempt from the provisions of this section.
SECTION 304 EXTERIOR STRUCTURE
304.1.1 Unsafe conditions: The following conditions shall be determined as unsafe and shall be
repaired or replaced to comply with the International Building Code or the International Existing
Building Code as required for existing buildings:
1. The nominal strength of any structural member is exceeded by the nominal loads,
the load effects or the required strength;
2. The anchorage of the floor or roof to walls or columns, and of walls and columns to
foundations is not capable of resisting all nominal loads or load effects;
3. Structures or components thereof that have reached their limit state;
4. Siding and masonry joints including joints between the building envelope and the
perimeter of windows, doors, and skylights are not maintained, weather resistant or
water tight;
5. Structural members that have evidence of deterioration or that are not capable of
safely supporting all nominal loads and load effects;
6. Foundation systems that are not firmly supported by footings, are not plumb and free
open cracks and breaks, are not properly anchored or are not capable of supporting
all nominal loads and resisting all load effects;
7. Exterior walls that are not anchored to supporting and supported elements or are not
plumb and free of holes, cracks or breaks and loose or rotting materials, are not
properly anchored or are not capable of support all nominal loads and resisting of all
load effects;
8. Roofing or roofing components that have defects that admit rain, roof surfaces with
inadequate drainage, or any portion of the roof framing that is not in good repair
with signs of deterioration, fatigue or without property anchorage and incapable of
supporting all nominal loads and resisting all load effects;
9. Flooring and flooring components with defects that affect serviceability or flooring
components that show signs of deterioration or fatigue, re not properly anchored or
are incapable or supporting all nominal loads and resisting all load effects;
10. Veneer, cornices, belt courses, corbels, trim, wall facings and similar decorative
features not properly anchored or that are anchored with connections not capable of
supporting all nominal loads and resisting all load effects;
11. Overhang extensions or projections including, but not limited to, trash chutes,
canopies, marquees, signs, awnings, fire escapes, standpipes and exhaust ducts not
properly anchored or that are anchored with connections not capable of supporting
all nominal loads and resisting all load effects;
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Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
12. Exterior stairs, decks, porches, balconies and all similar appurtenances attached
thereto, including guards and handrails, are not structurally sound, not properly
anchored or that are anchored with connections not capable of supporting all
nominal loads and resisting all load effects; or
13. Chimneys, cooling towers, smokestacks and similar appurtenances not structurally
sound or not properly anchored, or that are anchored with connections not capable of
supporting all nominal loads and resisting all load effects.
Exceptions:
1. When substantiated otherwise by an approved method.
2. Demolition of unsafe conditions shall be permitted when approved by the
code official.
Section 304.3 Premises identification. Amended by adding: Property abutting alleys shall also
have the street address posted so as to be visible from the alley. Address numbers must be placed
on the building nearest the alley and meet the same requirements as for the numbers facing the
primary street frontage.
Section 304.3.1 Multidwelling identification. Amended by adding new section to read: All units
and rooms in multidwelling buildings, including, but not limited to, homes for the aged, hotels,
motels, lodginghouses and boardinghouses, apartments and condominiums shall be identified as
separate units by consecutive numbering or lettering which shall be placed on the door in Arabic
numerals or English capital letters, with a minimum size of three inches and a one-half- inch
stroke.
Section 304.7 Roofs and Drainage. Amended to read: The roof and flashing shall be maintained
sound, weather-tight, and in good repair. Roofs shall not have defects or deterioration that allow
precipitation to pass. Roof drainage shall be adequate to prevent dampness or deterioration in
the walls or interior portion of the structure. Roof drains, gutters, and downspouts shall be
maintained in good repair and free from obstructions. Roof water shall not be discharged in a
manner that creates a public nuisance. Asphalt shingles that are worn or curled shall be repaired
or replaced.
Section 304.13.1. Glazing. Amended to read: Glazing must be maintained, securely held in
place, and free from holes or missing pieces. No jagged or abrasive edges are permitted.
Section 304.13.2. Openable windows. Amended to read: Every window required by this code for
ventilation or egress must be easily openable and capable of being held in place by window
hardware.
Section 304.13.3. Storm Windows. Amended by adding: All openable windows with a single
layer of glass, in rental dwelling units, must be provided with tightfitting storm windows. Storm
windows may be temporarily removed to allow for the installation of screens during periods of
warm weather.
Section 304.14. Insect screens. Amended to read: When insect screens are installed over
openings into any building they must be maintained in good condition, securely held in place,
and free from holes or tears.
Exception. Deleted.
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Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
Section 304.14.1. Screens required. Amended by adding new section to read: All openable
windows in rental dwelling units must be provided with tightfitting insect screens of not less than
16 mesh per inch. Insect screens may be temporarily removed to allow for the installation of
storm windows during periods of cold weather.
304.15 Doors. All exterior doors, door assemblies, operator systems if provided, and hardware
shall be maintained in good condition. Locks at all entrances to dwelling units and sleeping units
shall tightly secure the door. Locks on means of egress doors shall be in accordance with
Section 702.3.
Section 304.15.1. Landings. Amended by adding new section to read: Exterior doors, other than
storm doors must swing over a floor or landing of at least the width of the door opening,
extending from the threshold for a distance at least equal to the door width, and must not be more
than eight inches below the height of the door threshold.
Section 304.18.1. Doors. Deleted.
304.19 Gates. All exterior gates, gate assemblies, operator systems if provided, and hardware
shall be maintained in good condition. Latches at all entrances shall tightly secure the gates.
SECTION 305 INTERIOR STRUCTURE
305.1.1 Unsafe conditions. The following conditions shall be determined as unsafe and shall be
repaired or replaced to comply with the International Building Code or the International Existing
Building Code as required for existing buildings:
1. The nominal strength of any structural member is exceeded by nominal loads, the load
effects or the required strength;
2. The anchorage of the floor or roof to walls or columns, and of walls and columns to
foundations is not capable of resisting all nominal loads or load effects;
3. Structures or components thereof that have reached their limit state;
4. Structural members are incapable of supporting nominal loads and load effects;
5. Stairs, landings, balconies and all similar walking surfaces, including guards and
handrails, are not structurally sound, not property anchored or are anchored with
connects not capable of supporting all nominal loads and resisting all load effects;
6. Foundation systems that are not firmly supported by footings are not plumb and free
from open cracks and breaks, are not properly anchored or are not capable of supporting
all nominal loads and resisting all load effects.
Exceptions:
1. When substantiated otherwise by an approved method.
2. Demolition of unsafe conditions shall be permitted when approved by the code
official.
Section 305.7. Food preparation. Amended by adding new section to read: All spaces to be
occupied for food preparation purposes shall contain suitable space and equipment to store,
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Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
prepare and serve foods in a sanitary manner. There shall be adequate facilities and services for
the sanitary disposal of food wastes and refuse, including facilities for temporary storage.
SECTION 306 COMPONENT SERVICEABILITY
306.1 General. The components of a structure and equipment therein shall be maintained in
good repair, structurally sound and in a sanitary condition.
306.1.1 Unsafe conditions. Where any of the following conditions cause the component
or system to be beyond its limit state, the component or system shall be determined as unsafe and
shall be repaired or replaced to comply with the International Building Code as required for
existing buildings:
1. Soils that have been subjected to any of the following conditions:
1.1 Collapse of footing or foundation system;
1.2 Damage to footing, foundation, concrete or other structural element due to soil
expansion;
1.3 Adverse effects to the design strength of footing, foundation, concrete or other
structural element due to a chemical reaction from the soil;
1.4 Inadequate soil as determined by a geotechnical investigation;
1.5 Where the allowable bearing capacity of the soil is in doubt; or
1.6 Adverse effects to the footing, foundation, concrete or other structural element
due to the ground water table.
2. Concrete that has been subjected to any of the following conditions;
2.1 Deterioration;
2.2 Ultimate deformation;
2.3 Fractures;
2.4 Fissures;
2.5 Spalling;
2.6 Exposed reinforcement; or
2.7 Detached, dislodged or failing connections.
3. Aluminum that has been subjected to any of the following conditions:
3.1 Deterioration
3.2 Corrosion;
3.3 Elastic deformation;
3.4 Ultimate deformation;
3.5 Stress or strain cracks;
3.6 Joint fatigue; or
3.7 Detached, dislodged or failing connections.
4. Masonry that has been subjected to any of the following conditions:
4.1 Deterioration;
4.2 Ultimate deformation;
4.3 Fractures in masonry or mortar joints;
4.4 Fissures in masonry or mortar joints;
4.5 Spalling;
4.6 Exposed reinforcement; or
4.7 Detached, dislodged or failing connections.
5. Steel that has been subjected to any of the following conditions:
5.1 Deterioration;
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Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
5.2 Elastic deformation;
5.3 Ultimate deformation;
5.4 Metal fatigue; or
5.5 Detached, dislodged or failing connections.
6. Wood that has been subjected to any of the following conditions:
6.1 Ultimate deformation;
6.2 Deterioration;
6.3 Damage from insects, rodents and other vermin;
6.4 Fire damage beyond charring;
6.5 Significant splits and checks;
6.6 Horizontal shear cracks;
6.7 Vertical shear cracks;
6.8 Inadequate support;
6.9 Detached, dislodged or failing connections; or
6.10 Excessive cutting and notching.
Exceptions:
1. When substantiated otherwise by an approved method.
2. Demolition of unsafe conditions shall be permitted when approved by the code
official.
SECTION 306 307 HANDRAILS AND GUARDRAILS
306 307. 1 General
SECTION 307 308 RUBBISH AND GARBAGE
307 308.1 Accumulation of rubbish or garbage
307 308.2 Disposal of rubbish
307 308. 2.1 Rubbish storage facilities.
307 308. 2.2 Refrigerators
307 308.3 Disposal of Garbage
307 308.3.1 Garbage facilities
Section 307 308.3.1. Garbage facilities. Deleted.
307 308.3.2 Containers
Section 307 308.4. Construction debris. Amended by adding new section to read: All debris
from construction, remodeling, repair or demolition of a building shall be placed in approved
dumpsters or contained to prevent scattering of any debris from the project site .Dumpsters or
contained areas shall be emptied, cleaned, maintained and free of overfill.
SECTION 308 309 EXTERMINATION PEST ELIMINATION
Study Session Meeting of October 26, 2015 (Item No. 4) Page 19
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
308 309.1 Infestation. All structures shall be kept free from insect and rodent infestation. All
structures in which insects or rodents are found shall be promptly exterminated by approved
processes that will not be injurious to human health. After extermination pest elimination,
proper precautions shall be taken to prevent re-infestation.
308 309.2 Owner. The owner of any structure shall be responsible for extermination pest
elimination within the structure prior to renting or leasing the structure.
308 309.3 Single Occupant. The occupant of a one-family dwelling or of a single-tenant
nonresidential structure shall be responsible for extermination pest elimination on the premises.
308 309.4 Multiple occupancy. The owner of a structure containing two or more dwelling units,
a multiple occupancy, a rooming house or a nonresidential structure shall be responsible for
extermination pest elimination in the public or shared areas of the structure and exterior property.
If infestation is caused by failure of the occupant to prevent such infestation in the area occupied,
the occupant and owner shall be responsible for extermination pest elimination.
308 309.5 Occupant. The occupant of any structure shall be responsible for the continued rodent
and pest-free condition of the structure.
Exception: Where the infestations are caused by defects in the structure, the owner shall
be responsible for extermination pest elimination.
SECTION 310 OUTDOOR STORAGE
Section 310 Outdoor Storage. Unless specifically permitted by the Zoning Code Chapter 36, no
outdoor storage, personal or business items are permitted. Items include, but not limited to the
following; lawnmowers, snow blowers, lawn/garden equipment, construction material or
equipment.
Exemption – The following items are exempt from the outdoor storage prohibition of this
section:
f. Clothesline poles and lines
g. Patio furniture
h. Barbecue grills
i. Ornamental yard enhancements (landscaping, light poles, trellises, benches designed
for exterior use and other permanent improvements designed to enhance the
appearance of the yard).
j. Children’s play equipment
SECTION 402 LIGHT
Section 402.1. Habitable spaces. Amended to read: Every habitable space shall have at least one
window facing directly to the outdoors or to a court.
Exception. Where natural light for the room or space is provided from an adjoining room
through an unobstructed opening equal to at least eight percent of the floor area of the
interior room or space.
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Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
402.4 Exterior Lighting. Exterior lighting shall be maintained, operational and free of broken
or defective lenses and housing.
SECTION 403 VENTILATION
Section 403.1. Habitable spaces. Amended to read: Every habitable space shall have at least one
openable window directly to the outdoors or to a court.
Exception. When the room or space is provided with a mechanical ventilation system
capable of supplying conditioned or unconditioned air to, or removing such air from any
space.
Section 403.2. Bathrooms and toilet rooms. Amended by adding exception to read:
Exception. Bathrooms or toilet rooms that contain only a water closet, lavatory or
combination thereof may be ventilated with an approved mechanical recirculating fan
designed to remove odors from the air.
403.3 Cooking facilities. Unless approved through the certificate of occupancy, cooking shall
not be permitted in any rooming unit or dormitory unit, and a cooking facility or appliance shall
not be permitted to be present in a rooming unit or dormitory.
Exceptions:
1. Where specifically approved in writing by the code official.
2. Devices such as coffee pots and microwave ovens shall not be considered
cooking appliances.
SECTION 404 OCCUPANCY LIMITATIONS
Section 404. Occupancy limitations. Deleted entire section from 404.1 – 404.7.
CHAPTER 5
PLUMBING FACILTIES AND FIXTURE REQUIREMENTS
SECTION 502 – REQUIRED FACILITIES
502.5 Public toilet facilities. Public toilet facilities shall be maintained in a safe sanitary and
working condition in accordance with the International Plumbing Code. Except for periodic
maintenance or cleaning, public access and use shall be provided to the toilet facilities at all
times during occupancy of the premises.
SECTION 503 – TOILET ROOMS
503.2 Locations. Toilet rooms and bathrooms serving hotel units, rooming units or dormitory
units or housekeeping units, shall have access by traversing not more than a maximum of one
flight of stairs and shall have access from a common hall or passageway.
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Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
Section 503.3. Location of employee toilet facilities. Deleted.
SECTION 505 – WATER SYSTEM
505.4 Water heating facilities. Water heating facilities shall be properly installed, maintained
and capable of providing an adequate amount of water to be drawn at every required sink,
lavatory, bathtub, shower and laundry facility at a minimum temperature of not less than 110°F
(43°C). A gas-burning water heater shall not be located in any bathroom, toilet room, bedroom
or other occupied room normally kept closed, unless adequate combustion air is provided. An
approved combination temperature and pressure-relief valve and relief valve discharged pipe
shall be property installed and maintained on water heaters.
SECTION 506 – SANITARY DRAINAGE SYSTEM
506.3 Grease interceptors. Grease interceptors and automatic grease removal devices shall be
maintained in accordance with this code and the manufacturer’s installation instructions. Grease
interceptors and automatic grease removal devices shall be regularly serviced and cleaned to
prevent the discharge of oil, grease, and other substances harmful or hazardous to the building
drainage system, the public sewer, the private sewage disposal system or the sewage treatment
plant or processes. All records of maintenance, cleaning and repairs shall be available for
inspection by the code official.
CHAPTER 6
MECHANICAL AND ELECTRICAL REQUIREMENTS
SECTION 602 HEATING FACILITIES
Section 602.2. Residential occupancies. Amended to read: Dwellings shall be provided with
heating facilities capable of maintaining a room temperature of 68 degrees Fahrenheit in all
habitable rooms, bathrooms and toilet rooms when the outdoor temperature is minus 20 degrees
Fahrenheit or warmer. Cooking appliances shall not be used to provide space heating to meet the
requirements of this section.
602.3 Heat supply. Every owner and operator of any building who rents, leases or lets one or
more dwelling units, rooming unit, dormitory or guestroom on terms, or sleeping units on terms,
either expressed or implied, to furnish heat to the occupants thereof shall supply heat during the
period from October 15th to April 1st to maintain a minimum temperature of not less than 68°F
(20°C) in all habitable rooms, bathrooms, and toilet rooms.
Exceptions:
1. When the outdoor temperature is below the winter outdoor design
temperature for the locality, maintenance of the minimum room temperature
shall not be required provided that the heating system is operating at its full
design capacity. The winter outdoor design temperature for the locality shall
be as indicated in Appendix D of the International Plumbing Code.
2. In areas where the average monthly temperature is above 30°F (-1°C) a
minimum temperature of 65°F (18°C) shall be maintained.
Study Session Meeting of October 26, 2015 (Item No. 4) Page 22
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
Section 602.3. Heat supply. Amended to read: Every owner and operator of any building who
rents, leases or lets one or more dwelling units, rooming units, dormitory or guestroom on terms,
either expressed or implied, shall furnish heat in compliance with section 602.2 to the occupants
from September 1 to June 1.
Exception. When the outdoor temperature is below the winter outdoor design temperature
for the locality, maintenance of the minimum room temperature shall not be required,
provided that the heating system is operating at its full design capacity.
Section 602.4. Occupiable workspaces. Deleted.
SECTION 603 MECHANICAL EQUIPMENT
Section 603.1.1. Appliance testing. Amended by adding new section to read: Central heating
appliances shall be tested by a licensed mechanical contractor to verify that the appliance is in a
safe working condition when evidence of malfunction, corrosion, deterioration or excessive
interior carbon monoxide is suspected.
Section 603.2. Removal of combustion products. Amended to read: All fuel-burning equipment
and appliances intended for heating shall be connected to an approved chimney or vent to the
exterior of the building.
Exception. Deleted.
SECTION 604 - ELECTRICAL FACILTIES
604.2 Service. The size and usage of appliances and equipment shall serve as a basis for
determining the need for additional facilities in accordance with the ICC Electrical Code NFPA
70 Dwelling units shall be served by a three-wire, 120/240 volt, single phase electrical service
having a rating of not less than 60 amperes.
604.3 Electrical system hazards. Where it is found that the electrical system in a structure
constitutes a hazard to the occupants or the structure by reason of inadequate service, improper
fusing, insufficient receptacle and lights outlets, improper wiring or installation, deterioration or
damage, or for similar reasons, the code official shall require the defects to be corrected to
eliminate the hazards.
604.3.1 Abatement of electrical hazards associated with water exposure. The
provisions of this section shall govern the repair and replacement of electrical systems
and equipment that have been exposed to water.
604.3.1.1 Electrical equipment. Electrical distribution equipment, motor circuits,
power equipment, transformers, wire, cable, flexible cords, wiring devices, ground fault
circuit interrupters, surge protectors, molded case circuit breakers, low0voltage fuses,
luminaires, ballasts, motors and electronic control, signaling and communication
equipment that have been exposed to water shall be replaced in accordance with the
provisions of the International Building Code.
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Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
Exception: The following equipment shall be allowed to be repaired where an
inspection report from the equipment manufacturer or approved manufacturer’s
representative indicates that the equipment has not sustained damage that requires
replacement:
1. Enclosed switches, rated a maximum of 600 volts or less;
2. Busway, rated a maximum of 600 volts;
3. Pannelboards, rated a maximum of 600 volts;
4. Switchboards, rated a maximum of 600 volts;
5. Fire pump controllers, rated a maximum of 600 volts;
6. Manual and magnetic motor controllers;
7. Motor control center;
8. Alternating current high-voltage circuit breakers;
9. Low-voltage power circuit breakers;
10. Protective relays, meters and current transformers;
11. Low-and medium-voltage switchgear;
12. Liquid-filled transformers;
13. Cast-resin transformers;
14. Wire or cable that is suitable for wet locations and whose ends have not been
exposed to water;
15. Wire or cable, not containing fillers, that is suitable for wet locations and
whose ends have not been exposed to water;
16. Luminaires that are listed as submersible;
17. Motors;
18. Electronic control, signaling and communication equipment.
604.3.2 Abatement of electrical hazards associated with fire exposure. The
provisions of this section shall govern the repair and replacements of electrical systems
and equipment that have been exposed to fire.
604.3.2.1 Electrical equipment. Electrical switches, receptacles and fixtures,
including furnace, water heating, security system and power distribution circuits
that have been exposed to fire, shall be replaced in accordance with the provisions
of the International Building Code.
Exception: Electrical switches, receptacles, and fixtures that shall be
allowed to be repaired where an inspection report from the equipment
manufacturer or approved manufacturer’s representative indicates that the
equipment has not sustained damage that requires replacement.
SECTION 605 – ELECTRICAL EQUIPMENT
605.2 Receptacles. Every habitable space in a dwelling shall contain at least two separate and
remote receptacle outlets. Every laundry area shall contain a least one grounded-type receptacle
or a receptacle with a ground fault circuit interrupter. Every bathroom shall contain at least one
receptacle. Any new bathroom receptacle outlet shall have ground fault circuit interrupter
protection. All receptacle outlets shall have the appropriate faceplate cover for the location.
Study Session Meeting of October 26, 2015 (Item No. 4) Page 24
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
Section 605.3. Lighting fixtures. Amended by adding: Lighting fixtures are not permitted within
or above shelving space within closets and enclosed storage rooms.
605.4 Wiring. Flexible cords shall not be used for permanent wiring or for running through
doors, windows, or cabinets, or concealed within walls, floors, or ceilings.
SECTION 606 – ELEVATORS, ESCALATORS AND DUMBWAITERS
606.1 General. Elevators, dumbwaiters and escalators shall be maintained to sustain safely all
imposed loads, to operator properly, and to be free from physical and fire hazards in compliance
with ADME A17.1. The most current certificate of inspection shall be on display at all times
within the elevator or attached to the escalator or dumbwaiter; or the certificate shall be available
for public inspection in the office of the building operator or be posted in a publicly conspicuous
location approved by the code official. The inspection and tests shall be performed at no less
than the periodic intervals listed in ASME A17.1, Appendix N, except where otherwise specified
by the authority having jurisdiction.
SECTION 702 MEANS OF EGRESS
Section 702.3. Locked doors. Amended by adding exception to read:
Exception. Double-keyed deadbolts are permitted in existing single-family residential
dwellings, residential duplexes and individually owned townhomes.
Section 702.5. Sleeping room egress. Amended by adding new section to read: Every room or
space intended or used for sleeping shall have at least one openable window or door opening
directly to the exterior. The opening must be of a size and location which permits egress from the
room or space.
SECTION 704 FIRE PROTECTION SYSTEMS
Section 704.1. General. Amended to read: All systems, devices and equipment to detect a fire,
actuate an alarm, or suppress or control a fire or any combination thereof shall be installed and
maintained in an operable condition at all times in accordance with the City Fire Code.
704.1.1 Automatic sprinkler systems. Inspection, testing and maintenance of automatic
sprinkler systems shall be in accordance with NFPA 25.
Sections 704.2. through 704.4. Deleted.
CHAPTER 8 – REFERENCED STANDARDS
Chapter 8. Referenced standards. Amended to read: All references to other codes or standards
within this code shall mean the applicable provisions of St. Louis Park Code of Ordinances or
Minnesota State Building Code, whichever is the most restrictive requirement permitted under
statute.
Study Session Meeting of October 26, 2015 (Item No. 4) Page 25
Title: Proposed Ordinance Amending Chapter 6 Article V – Property Maintenance Code
ASME – American Society of Mechanical Engineers
Standard Reference Number A17.1/CSA B44-2007 Safety Code for Elevators and Escalators
ASTM – ASTM International
Standard Reference Number F 1346-91 (2003) Performance Specifications for Safety Covers and
Labeling Requirements for All Covers for Swimming Pools, Spas and Hot Tubs
NFPA – National Fire Protection Association
Standard Reference Number 25-11 Inspection, Testing and Maintenance of Water-Based Fire
Protection Systems
Standard Reference Number 70-11 National Electrical Code
Meeting: Study Session
Meeting Date: October 26, 2015
Written Report:
EXECUTIVE SUMMARY
TITLE: September 2015 Monthly Financial Report
RECOMMENDED ACTION: No action required at this time.
POLICY CONSIDERATION: None at this time.
SUMMARY: The Monthly Financial Report provides a summary of General Fund revenues
and departmental expenditures and a comparison of budget to actual throughout the year.
FINANCIAL OR BUDGET CONSIDERATION: Actual expenditures should generally run at
about 75% of the annual budget in September. General Fund expenditures are currently under
budget through September at approximately 71.5% of the adopted budget. Revenues are harder
to measure in this same way due to the timing of when they are received, examples of which
include property taxes and State aid payments (Police & Fire Aid, DOT/Highway User Tax,
PERA Aid, etc.).
A few brief comments on specific variances are noted below.
Revenues:
License and permit revenues have been running well ahead of budget all year and have now
exceeded the total annual budget through the third quarter. As in previous years, this is due in
part to that nearly all 2015 business and liquor license payments have been received. Permit
revenues have already exceeded the total annual budget for the year at 101% through September.
Expenditures:
Human Resources is showing a variance of about 6% due to Health in the Park expenditures;
however, because this program is offset by revenue, there is no net effect to the overall budget.
Community Development has a temporary variance of approximately 1% because the annual
contribution to STEP of $40,000 was made in September. Organized Recreation currently has a
variance of approximately 10% due in part to normal seasonal expenditures which tend to be
higher during the summer months and also because the full Community Education contribution
of $187,400 was paid to the school district in June. The Rec Center Division is also running a
seasonal expenditure variance of about 3%, which is common after the pool season ends.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Summary of Revenues & Expenditures
Prepared by: Darla Monson, Senior Accountant
Reviewed by: Brian A. Swanson, Controller
Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
Summary of Revenues & Expenditures - General Fund As of September 30, 2015 20152015201320132014201420152015 Balance YTD Budget BudgetAudited BudgetAudited Budget Sept YTD Remaining to Actual %General Fund Revenues: General Property Taxes20,657,724$ 21,987,968$ 21,157,724$ 21,176,542$ 22,364,509$ 11,664,860$ 10,699,649$ 52.16% Licenses and Permits2,481,603 3,069,088 2,691,518 3,413,682 3,248,158 3,287,516 (39,358) 101.21% Fines & Forfeits335,150 311,882 320,150 369,545 320,200 180,809 139,391 56.47% Intergovernmental1,300,191 2,031,355 1,282,777 1,423,642 1,292,277 741,672 550,605 57.39% Charges for Services1,837,976 1,779,259 1,857,718 1,852,274 1,907,292 1,623,672 283,620 85.13% Miscellaneous Revenue1,092,381 1,067,210 1,112,369 1,302,160 1,196,018 983,209 212,809 82.21% Transfers In1,816,563 1,805,223 1,837,416 1,827,564 1,851,759 1,377,569 474,190 74.39% Investment Earnings150,000 14,180 150,000 119,831 140,000 - 140,000 0.00% Other Income36,650 10,756 17,950 13,306 17,900 9,685 8,215 54.10% Use of Fund Balance286,325 - 286,325 0.00%Total General Fund Revenues29,708,238$ 32,076,921$ 30,427,622$ 31,498,546$ 32,624,438$ 19,868,993$ 12,755,446$ 60.90%General Fund Expenditures: General Government: Administration877,099$ 890,883$ 939,391$ 980,087$ 979,183$ 733,766$ 245,417$ 74.94% Accounting827,320 819,458 876,216 873,987 912,685 657,638 255,047 72.06% Assessing543,855 543,202 559,749 560,979 602,299 447,928 154,371 74.37% Human Resources678,988 731,634 693,598 788,823 805,929 652,806 153,123 81.00% Community Development1,094,517 1,090,213 1,151,467 1,118,444 1,245,613 947,579 298,034 76.07% Facilities Maintenance1,074,920 1,058,127 1,053,715 1,039,699 1,094,836 742,671 352,165 67.83% Information Resources1,770,877 1,597,993 1,456,979 1,406,187 1,468,552 991,164 477,388 67.49% Communications & Marketing201,322 170,013 566,801 562,063 635,150 414,116 221,034 65.20% Community Outreach8,185 (22,450) 8,185 6,680 24,677 17,914 6,763 72.59% Engineering303,258 296,383 506,996 223,491 492,838 255,646 237,192 51.87%Total General Government7,380,341$ 7,175,456$ 7,813,097$ 7,560,440$ 8,261,762$ 5,861,228$ 2,400,534$ 70.94% Public Safety: Police7,443,637$ 7,225,579$ 7,571,315$ 7,769,592$ 8,511,557$ 6,210,976$ 2,300,581$ 72.97% Fire Protection3,330,263 3,246,162 3,458,161 3,535,716 3,722,396 2,759,352 963,044 74.13% Inspectional Services1,928,446 1,932,021 2,006,200 1,867,618 2,139,325 1,480,313 659,012 69.20%Total Public Safety12,702,346$ 12,403,762$ 13,035,676$ 13,172,927$ 14,373,278$ 10,450,641$ 3,922,637$ 72.71% Operations & Recreation: Public Works Administration393,054$ 288,207$ 222,994$ 236,304$ 232,437$ 153,628$ 78,809$ 66.09% Public Works Operations2,698,870 2,720,563 2,625,171 2,571,496 2,763,735 1,746,786 1,016,949 63.20% Organized Recreation1,280,117 1,256,678 1,290,038 1,277,046 1,304,470 1,106,739 197,731 84.84% Recreation Center1,449,930 1,501,627 1,543,881 1,561,224 1,591,115 1,246,620 344,495 78.35% Park Maintenance1,431,825 1,424,139 1,445,813 1,412,612 1,550,033 1,173,287 376,746 75.69% Westwood520,554 503,309 531,853 508,576 564,055 412,280 151,775 73.09% Environment430,876 434,297 433,750 379,193 472,049 259,245 212,804 54.92% Vehicle Maintenance1,240,325 1,268,559 1,285,489 1,323,358 1,333,520 867,363 466,157 65.04%Total Operations & Recreation9,445,551$ 9,397,379$ 9,378,989$ 9,269,808$ 9,811,414$ 6,965,947$ 2,845,467$ 71.00% Non-Departmental: General -$ 256,627$ 4,000$ 7,562$ -$ 67,225$ (67,225)$ 0.00% Transfers Out- 60,000 - 1,050,000 - - - 0.00% Tax Court Petitions180,000 53,345 195,860 13,834 177,984 - 177,984 0.00%Total Non-Departmental180,000$ 369,972$ 199,860$ 1,071,396$ 177,984$ 67,225$ 110,759$ 37.77%Total General Fund Expenditures29,708,238$ 29,346,569$ 30,427,622$ 31,074,572$ 32,624,438$ 23,345,042$ 9,279,396$ 71.56%Study Session Meeting of October 26, 2015 (Item No. 5) Title: September 2015 Monthly Financial ReportPage 2
Meeting: Study Session
Meeting Date: October 26, 2015
Written Report:
EXECUTIVE SUMMARY
TITLE: Third Quarter Investment Report (July – September 2015)
RECOMMENDED ACTION: No action required at this time.
POLICY CONSIDERATION: None at this time.
SUMMARY: The Quarterly Investment Report provides an overview of the City’s investment
portfolio, including the types of investments held, length of maturity, and yield.
FINANCIAL OR BUDGET CONSIDERATION: The total portfolio value at September 30,
2015 is approximately $54.8 million. About 46% of the portfolio is in longer term investments
that include agency bonds, municipal debt securities, and certificates of deposit. The remainder
is held in money market accounts for future cash flow needs, project costs, and investing
opportunities. The overall yield is at .76%, which is up from .62% at the end of 2014 and .74%
at the end of the previous quarter.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Discussion
Investment Portfolio Summary
Prepared by: Darla Monson, Senior Accountant
Reviewed by: Brian A. Swanson, Controller
Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
Study Session Meeting of October 26, 2015 (Item No. ) Page 2
Title: Third Quarter Investment Report (July – September 2015)
DISCUSSION
BACKGROUND: The City’s investment portfolio is focused on short term cash flow needs and
investment in longer term securities. This is done in accordance with Minnesota Statute 118A
and the City’s Investment Policy objectives of: 1) Preservation of capital; 2) Liquidity; and 3)
Return on investment.
PRESENT CONSIDERATIONS: The total portfolio value decreased by approximately $6
million in the third quarter of 2015 from $60.8 million at 6/30/2015 to $54.8 million at
9/30/2015. Money market balances decreased by about $4 million as cash was spent down and
one agency bond was called. In addition to normal payroll and operating expenses, cash
requirements during the quarter included the August 1 debt service and Pay As You Go TIF Note
payments and capital project payments for street rehab work, the water meter replacement
project and the City Hall remodel work.
The overall yield of the portfolio increased slightly to .76% from .74% at 6/30/2015, and is up
from .62% at the end of 2014. Cities generally use a benchmark such as the two year Treasury
(.64% at 9/30/2015) or some similar measure for yield comparison of their overall portfolio.
Approximately 54% or $29.4 million of the portfolio is currently held in money markets. The
rates on the four money market funds range from .02% in the 4M Fund to .4% in the Northeast
Bank money market. The 4M Fund is used short term for cash expected to be needed within 30
days. While some of the cash in the other money market accounts may be used to purchase
longer term investments in the coming months, it is necessary to keep a large amount of cash
available between property tax settlements for capital project payments, payroll and on-going
operating expenses. Remaining proceeds from the 2014 bonds issued last December make up
approximately $6 million of the money market balance and is expected to be spent within the
next 12 months.
Another 12% or $6.6 million of the portfolio is invested in fixed and step rate certificates of
deposit. There are currently 28 CD’s in the portfolio, each with a face value of $240,000 or less,
which guarantees that each CD is insured by the FDIC up to $250,000. They have varying
maturity dates over the next five years with rates up to 2.3%. One CD matured and two were
purchased during the quarter.
The remaining $18.8 million of the portfolio is invested in other long term securities, including
municipal debt and agency bonds. Municipal debt instruments are bonds issued by States, local
governments, or school districts to finance special projects. Agency bonds are issued by
government agencies such as the Federal Home Loan Bank or Fannie Mae and typically have
call dates at specific intervals where they can be called prior to their five-year maturity date.
One $3 million agency bond with a rate of 2.19% was called during the quarter, and one $1
million investment was purchased with a rate to maturity of 2.15%.
Here is a summary of the City’s portfolio at September 30, 2015:
6/30/15 9/30/15
<1 Year 61% 60%
1-2 Years 5% 10%
2-3 Years 14% 12%
3-4 Years 2% 4%
>4 Years 18% 14%
6/30/15 9/30/15
Money Markets $33,590,434 $29,379,392
Commercial Paper $0 $0
Certificates of Deposit $6,461,847 $6,646,346
Municipal Debt $6,912,027 $6,900,048
Agency Bonds $13,848,912 $11,880,294
City of St. Louis Park
Investment Portfolio Summary
September 30, 2015
Institution/Broker Investment Type CUSIP Maturity Date
Yield to
Maturity Par Value
Market Value at
9/30/2015
Estimated Avg
Annual Income
Citizens Indep Bank Money Market 0.09%3,049,280 3,049,280 2,744
4M Fund Money Market 0.02%3,278,799 3,278,799 656
4M Fund Money Market (Bonds Only)0.02%471,088 471,088 94
Northeast Bank Money Market 0.40%5,028,395 5,028,395 20,114
UBS Muni Debt - Calif State 13063BNR9 10/01/2015 2.00% 1,000,000 1,000,060 20,000
UBS CD - BMW Bank UT 05568PZ59 10/26/2015 1.05% 240,000 240,125 2,520
UBS CD - Barclays Bank DE 06740KFS1 01/11/2016 1.60% 240,000 240,857 3,840
UBS CD - Medallion Bank UT 58403BM52 05/09/2016 0.50% 240,000 240,360 1,200
UBS CD - Discover Bank DE 254671AG5 05/02/2017 1.75% 240,000 242,609 4,200
UBS CD - GE Cap Retail Bank UT 36160NJZ3 05/04/2017 1.75% 240,000 242,986 4,200
UBS Muni Debt - N. Orange Cty CA 661334DR0 08/01/2017 1.01% 1,000,000 1,005,800 10,110
UBS CD - Sallie Mae Bnk UT 79545OPE9 08/29/2017 1.70% 240,000 243,034 4,080
UBS CD - Sun Natl Bank NJ 86682ABV2 10/03/2017 1.00% 240,000 242,839 2,400
UBS CD - Everbank Jacksonvl FL 29976DPB0 10/31/2017 1.00% 240,000 242,256 2,400
UBS CD - Comenity Bank DE 981996AX9 12/05/2017 1.25% 200,000 198,034 2,500
UBS CD - Banco Popular PR 05967ESG5 12/05/2017 1.10% 240,000 240,866 2,640
UBS FNMA 3136G1AJ8 01/30/2018 1.06% 1,000,000 1,000,460 10,630
UBS CD - Ally Bank UT 02006LNL3 02/05/2018 1.25% 240,000 239,306 3,000
UBS CD - Third Fed S&L Assn OH 88413QAT5 02/22/2018 1.35% 240,000 239,724 3,240
UBS FHLB 313381JW6 06/27/2018 0.92% 1,000,000 1,115,145 9,200
UBS Muni Debt - NYC Trans Fin Auth 64971QH55 11/01/2018 1.33% 1,000,000 1,004,810 13,280
UBS CD - Cit Bank UT 17284CH49 06/04/2019 1.90% 240,000 240,396 4,560
UBS CD - Amer Exp F UT 02587CAC4 07/10/2019 1.95% 240,000 240,060 4,680
UBS CD - Capital One Bank 14042E4S6 07/15/2019 1.95% 240,000 239,069 4,680
UBS CD - First Bk Highland IL 3191408W2 08/13/2019 2.00% 240,000 239,834 4,800
UBS CD - Webster Bk NA CT 94768NJX3 08/20/2019 1.90% 240,000 239,762 4,560
UBS CD - Bk Hapoalim BM NY Step 06251AD31 08/22/2019 2.10% 240,000 239,746 5,040
UBS CD - Capital One Bank 140420PS3 10/08/2019 2.10% 240,000 240,317 5,040
UBS CD - State Bk India IL 856283XJ0 10/15/2019 2.10% 240,000 240,367 5,040
UBS CD - Goldman Sachs Bank NY 38148JHB0 01/14/2020 2.20% 240,000 240,754 5,280
UBS CD - Amer Express UT 02587DXE3 01/30/2020 1.95% 240,000 238,385 4,680
UBS FHLB Bond Step Up 3130A3X66 01/30/2020 2.09% 1,000,000 1,000,720 20,880
UBS CD - Private Bank & Tr IL 74267GVA2 02/27/2020 1.750% 240,000 239,366 4,200
UBS CD - Camden Nat'l Bank ME 133033DR8 02/26/2020 1.800% 240,000 238,870 4,320
UBS FHLB Bond Step Up 3130A3ZC1 02/26/2020 2.163% 755,000 756,329 16,331
UBS CD - JP Morgan Chase OH Step 48125T2N4 03/04/2020 2.217% 240,000 239,693 5,321
UBS FHLB Bond Step Up 3130A4GQ9 03/18/2020 2.115% 1,000,000 1,003,780 21,150
UBS CD - HSBC Bank DE Step Rate 40434ASZ3 03/30/2020 2.221% 240,000 238,330 5,330
UBS FHLMC Step 3134G6TD5 04/29/2020 2.088% 1,000,000 1,000,710 20,880
UBS FHLB 3130A58J7 05/28/2020 2.020% 1,000,000 1,001,900 20,200
UBS FHLMC Step 3134G7KF7 07/30/2020 2.149% 1,000,000 1,001,080 21,490
UBS CD - World's Foremost 9159919E5 08/06/2020 2.300% 200,000 197,524 4,600
UBS Money Market - 2014 Bonds 0.08% 5,953,680 5,953,680 4,763
UBS Money Market 0.08% 11,598,150 11,598,150 9,279
34,848,091
Sterne, Agee Muni Deb - Smithfield, RI 832322NQ0 01/15/2016 2.40% 275,000 276,532 6,600
Sterne, Agee Muni Debt - Elmore Cnty AL 28976PAS4 02/01/2016 0.85% 1,050,000 1,054,641 8,925
Sterne, Agee Muni Debt - Elmore Cnty AL 28976PAT2 02/01/2017 1.15% 1,000,000 1,010,740 11,500
Sterne, Agee Muni Debt - New York, NY 64966HJS0 04/01/2017 1.20% 500,000 536,005 6,000
2,877,918
Wells Fargo CD - GE Capital UT 36160XC62 01/06/2016 1.70% 240,000 240,879 4,080
Wells Fargo Muni Debt - Fond Du Lac WI Schl 344496JQ8 04/01/2017 1.05% 1,000,000 1,011,460 10,500
Wells Fargo FNMA 3135G0NH2 08/23/2017 0.95% 1,000,000 998,400 9,500
Wells Fargo Fannie Mae 3136G04A6 11/21/2017 1.00% 1,000,000 1,000,860 10,000
Wells Fargo FNMA 3135G0TM5 01/30/2018 1.02% 1,000,000 1,000,240 10,200
Wells Fargo Fannie Mae 3136G1AZ2 01/30/2018 1.00% 1,000,000 1,000,670 10,000
5,252,509
GRAND TOTAL 54,806,080 417,456
Current Portfolio Yield To Maturity 0.76%
Study Session Meeting of October 26, 2015 (Item No. 6)
Title: Third Quarter Investment Report (July – September 2015)Page 3
Meeting: Study Session
Meeting Date: October 26, 2015
Written Report: 7
EXECUTIVE SUMMARY
TITLE: EDA Redevelopment Contract Status Report
RECOMMENDED ACTION: None.
POLICY CONSIDERATION: Not applicable.
SUMMARY: The attached report summarizes the current status of various redevelopment
projects in the city to which the EDA is a party. Its purpose is to apprise city officials of any
current issues or anticipated actions that may need to be considered relative to corresponding
redevelopment contracts. This report is provided periodically to the Council.
FINANCIAL OR BUDGET CONSIDERATION: None
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: EDA Redevelopment Contract Status Report
Prepared by: Greg Hunt, Economic Development Coordinator
Reviewed by: Michele Schnitker, Housing Supervisor
Kevin Locke, Community Development Director
Approved by: Tom Harmening, EDA Executive Director and City Manager
EDA Redevelopment Contract Status Report
October 2015
Page 1 of 8
148 apts & 20,000 SF of office
space
5/1/2017 0% Leased Project required to commence by
10/31/15
Proposed use: Mixed-Use
incorporating: 300 residential
units (including affordable and
live/work commercial units); a
130-unit limited service hotel;
child care facility; small
commercial space, organics
2/29/2016 NA The parties are meeting regularly
to prepare appropriate and
supportable redevelopment plans
for the site.
Contract End Date: 2/29/16.
Project (Developer)
Required
Completion
Date
Percent Sold
&/or Leased Current Project Status
The Shoreham (Bader Development)
Location : SW corner of CSAH 25 & France Ave
Pending Contract Actions : Bader has requested that the Redevelopment Contract be amended to further
clarify the County grants awarded to the project and disbursement procedures. Bader will also be asking
the EDA to approve a new Assignment & Subordination Agreement in connection with its recently
approved conduit bond financing for the project. Staff will be monitoring Contract compliance. The TIF
Note will be issued upon verification of Redeveloper's qualified Public Redevelopment Costs.
Status of Lookback: Lookback will occur upon project reaching 93% lease-up.
Contract End Date: The inclusionary housing requirement extends 25 years.
PLACE
Location : 5725, 5815, & 5925 Hwy 7
Pending Contract Actions : PLACE and the EDA entered into a Preliminary Development Agreement
on 5/18/15 under which the two parties pledged to work cooperatively together on defining a mixed use
project consistent with the parties' mutual objectives. The agreement (which may be extended)
terminates if the parties have not approved a formal purchase & redevelopment contract by 2/29/16.
Given the complex nature of the project and the infrastructure needed to service it, the Contract's
termination date may need to be extended.
Study Session Meeting of October 26, 2015 (Item No. 7)
Title: EDA Redevelopment Contract Status Report Page 2
EDA Redevelopment Contract Status Report
October 2015
Page 2 of 8
Project (Developer)
Required
Completion
Date
Percent Sold
&/or Leased Current Project Status
138 mkt rate apts & 2 single
family houses
12/1/2015 39% Leased Apartments nearing completion.
Single family home parcels sold,
construction expected to
commence this fall.
58 market rate apartments 3/1/2014 95% Leased Building completed.
Commercial building renovation 12/1/2012 100% Leased Building renovation completed and
leased.
Contract End Date: 12/2017 (5 years)
Location : 6800 Cedar Lake Road
6414/6416 W. Lake Rd-former Home Hardware (CAR Properties)
Contract End Date: The contract terminates once the TIF Note is paid in full which, based on current
projections, is estimated to occur in 2023.
Pending Contract Actions : The Developer has requested a amendment to extend the completion
deadline for the two single family houses required under the Contract. The project's TIF Note will be
issued upon verification of Redeveloper's qualified Public Redevelopment Costs.
Status of Lookback: Completed. TIF Note reduced by $13,805 to $686,195.
Contract End Date: The contract terminates once the TIF Note is paid in full which, based on revised
projections, is estimated to occur in 2022.
Location: 6414 W. Lake St
Status of Lookback: NA
Eliot Park Apartments (Hunt Associates & Weidner Apartment Homes)
Status of Lookback: Lookback will occur upon project reaching 95% lease-up.
e2 -“Ellipse on Excelsior II” (Bader Development)
Location : 3924 Excelsior Blvd
Pending Contract Actions : None. Monitoring Green Building Policy compliance.
Pending Contract Actions : Entirety of Construction Assistance issued. Monitoring contract compliance.
Study Session Meeting of October 26, 2015 (Item No. 7)
Title: EDA Redevelopment Contract Status Report Page 3
EDA Redevelopment Contract Status Report
October 2015
Page 3 of 8
Project (Developer)
Required
Completion
Date
Percent Sold
&/or Leased Current Project Status
18,000 SF building renovation 12/1/2011 100% Leased Building renovation completed and
leased to 5 businesses with a total
of 32 employees
Status of Lookback: NA
33,600 SF building renovation 12/31/2012 100% Occupied Building renovations completed.
Hardcoat is fully operational and
hiring additional employees.
Status of Lookback : NA
115 senior assisted living rentals 12/31/2012 96.5% Leased
10,000 SF retail space 12/31/2012 100% Leased
Contract End Date: 6/2016 ( 5 years)
Contract End Date : 12/2017 (5 years)
Pending Contract Actions: Entirety of Construction Assistance issued. Monitoring remaining contract
and Green Building Policy compliance.
Building completed and
commercial portion leased.
Status of Lookback: Completed; no adjustment to TIF Note required.
Contract End Date: The contract terminates once the TIF Note is paid in full which, based on current
projections, is estimated to occur in 2017.
TowerLight (Greco Development)
Location: 3601 Wooddale Ave
Location: 7301 & 7317 Lake St W
Pending Contract Actions: None.
Former Flame Metal Bldg Renovation (Hardcoat Inc)
Former Bikemasters Bldg Renovation (CKJ Properties, LLC)
Pending Contract Actions : Entirety of Construction Assistance issued. Monitoring remaining contract
compliance.
Location: 3546 Dakota Ave S
Study Session Meeting of October 26, 2015 (Item No. 7)
Title: EDA Redevelopment Contract Status Report Page 4
EDA Redevelopment Contract Status Report
October 2015
Page 4 of 8
Project (Developer)
Required
Completion
Date
Percent Sold
&/or Leased Current Project Status
132 market rate apartments 3/1/2011 97% Leased
16,394 SF commercial 3/1/2011 100% Leased
67,000 SF medical office bldg 6/30/2009 100% Occupied
by PN Building completed.
Status of Lookback: NA
120 unit apt.bldg. (The Flats at
West End)12/31/2016 100% Leased Construction completed spring 13.
199 unit apt.bldg. 12/31/2016 0% Leased Construction expected to
commence late 2015.
164 unit apt.bldg. 8/31/2017 0% Leased Construction required to
commence April 2016.
120+ unit hotel. 8/31/2017 0% Leased Construction required to
commence April 2016.
Contract End Date: The contract terminates once the two TIF Notes have been paid in full which, based
on the current schedule, is estimated to occur in 2021.
Contract End Date: 2049
Completed.
Completed. Baker & Associates
leased 20,122 SF of office space.
Ellipse on Excelsior (Bader Development)
The West End (Duke Realty)
Location : 1600 West End Blvd
Pending Contract Action s: None.
Pending Contract Actions : None.
Status of Lookback: Completed; no adjustment to TIF Note required.
Melrose Center (Park Nicollet Methodist Hospital)
Location : 3525 Monterey Dr
350,000 SF retail/restaurant 6/1/2010 75% Leased
28,000 SF 2nd floor office space 6/1/2010 100% Leased
Location: 3900 Excelsior Blvd
Building completed.
Study Session Meeting of October 26, 2015 (Item No. 7)
Title: EDA Redevelopment Contract Status Report Page 5
EDA Redevelopment Contract Status Report
October 2015
Page 5 of 8
Project (Developer)
Required
Completion
Date
Percent Sold
&/or Leased Current Project Status
353,353 SF office building 9/30/2017 0% Leased Construction required to
commence April 2016.
353,353 SF office building 9/30/2020 0% Leased Construction required to
commence April 2019.
Location : 7003 Lake St W
79,000 SF office/tech bldg 12/31/2007 84% leased Building completed.
Location : NE corner 36th St & Xenwood Ave
“Harmony Vista” – 74 units,2/28/2008 99% leased Building completed.
25,000 SF retail 90% leased
“The Camerata” – 220 units 9/1/2008 98% leased Building completed.
“The Adagio” – 100 units 12/31/2013 98% leased Building completed.
“Medley Row” – 22 twnhomes 12/31/2013 77% leased Building completed.
Contract End Date: Based on the current TIF payment schedule, the contract will terminate upon
decertification of the TIF district which is anticipated in 2031.
Contract End Date: The contract terminates once the two TIF Notes have been paid in full which, based
on the current schedule, is estimated to occur in 2027.
Contract End Date: Based on the current TIF Note payment schedules the contract will terminate upon
decertification of the original TIF district which is anticipated in 2021.
Hoigaard Village (Union Land II - Dunbar Development )
Pending Contract Actions : A new Assignment and Subordination was approved by the EDA 10/19/15
as a result of the Redeveloper refinancing the project..
Status of Lookback: Completed; no adjustment to TIF Note required. DEED Contamination Cleanup
Grant successfully closed.
Status of Lookback: Lookback will occur after July 2016.
Highway 7 Corporate Center (Real Estate Recycling now Hyde Development )
Status of Lookback: Completed; no adjustment to TIF Note required.
Pending Contract Actions : None.
Pending Contract Actions : None. Monitoring Contract compliance.
Study Session Meeting of October 26, 2015 (Item No. 7)
Title: EDA Redevelopment Contract Status Report Page 6
EDA Redevelopment Contract Status Report
October 2015
Page 6 of 8
Project (Developer)
Required
Completion
Date
Percent Sold
&/or Leased Current Project Status
Location : 8200 33rd St W
106 unit senior housing
cooperative
12/31/2007 100% Sold Building completed.
Location : 2401 Edgewood Ave S
79,000 SF office/warehouse 12/4/2004 100% Leased Building completed.
Location : 5000 & 5050 36th St W
2-story, 54,742 SF office bldg 3/31/2004 100% Leased Building completed.
1-story, 10,038 SF commercial
“West” bldg 5/31/2005 100 % Leased Building completed.
Status of Lookback: NA
Contract End Date: The contract terminates once the TIF Note is paid in full which, based on the
current schedule, is estimated to occur in 2020.
Contract End Date: The contract terminates once the TIF Note is paid in full which, based on the
current schedule, is estimated to occur in 2018.
Aquila Commons (Stonebridge Development)
Edgewood Business Center (Real Estate Recycling now Hyde Development )
Pending Contract Actions : None.
Contract End Date: The contract terminates once the TIF Note is paid in full which, based on the
current schedule, is estimated to occur in 2021.
Wolfe Lake Professional Center (Belt Line Industrial Park, Inc)
Pending Contract Actions : None.
Pending Contract Actions : None.
Status of Lookback: Now that all units have been sold the Lookback needs to be completed.
Status of Lookback: Completed; no adjustment to TIF Note required. DEED Contamination Cleanup
Grant successfully closed.
Study Session Meeting of October 26, 2015 (Item No. 7)
Title: EDA Redevelopment Contract Status Report Page 7
EDA Redevelopment Contract Status Report
October 2015
Page 7 of 8
Project (Developer)
Required
Completion
Date
Percent Sold
&/or Leased Current Project Status
Location : Excelsior Blvd & Grand Way
Phase I – 338 apts, 62,700 SF
retail space 7/1/2003 Apts 98%
Leased.Building completed.
Phase NE-124 Condos, 4,500
retail space 4/30/2006 Condos 100%
Sold.Building completed.
Phase E – 86 condos & 14,235
SF retail space 4/1/2006 Retail 96%
Leased.Building completed.
Phase NW – 96 condos, up to
5,000 SF retail space 6/1/2007 Condos 100%
Sold.Building completed.
Pending Contract Actions: None.
Status of Lookback: NA
Location : 7201 Walker St
200 market rate apartments 6/1/2002 99% leased Building completed.
Status of Lookback: NA
Location : NW 16th & Zarthan Ave
Marriott Springhill Ste-127 units 3/1/2002 Hotel Building completed.
Marriott TownePlace Ste-107
units 8/1/2001 Hotel Building completed.
86 owner occupied townhomes 1/1/2003 100% Sold Building completed.
Contract End Date: Based on the current TIF Note payment schedules, the contract will terminate upon
decertification of the TIF district which is anticipated in 2028.
Contract End Date: Based on the current TIF Note payment schedule, the contract will terminate upon
decertification of the TIF district which is anticipated in 2023.
Zarthan & 16th Street (CSM Hospitality & Rottlund Homes)
Louisiana Oaks (MSP Real Estate)
Excelsior & Grand (TOLD Development)
Pending Contract Actions : None. DEED Contamination Cleanup Grant successfully closed.
Study Session Meeting of October 26, 2015 (Item No. 7)
Title: EDA Redevelopment Contract Status Report Page 8
EDA Redevelopment Contract Status Report
October 2015
Page 8 of 8
Project (Developer)
Required
Completion
Date
Percent Sold
&/or Leased Current Project Status
Zarthan & 16th Street (CSM Hospitality & Rottlund Homes) - continued
Status of Lookback: NA
Location : 3633 Park Center Blvd
45 unit assisted living facility 6/1/2001 100% Occupied Building completed.
Status of Lookback: NA
Contract End Date: The contract will terminate upon decertification of the TIF district which is
anticipated in 2023.
Park Center (Silver Crest Properties)
Pending Contract Actions : Monitoring adherence to renter income limitations as statutorily required.
Contract End Date: Based on the current TIF Note payment schedules, the contract will terminate upon
decertification of the TIF district which is anticipated in 2023.
Pending Contract Actions : None. With the recent sale of the hotel properties, the TIF Notes were
reassigned to Garrison Investment Group.
Study Session Meeting of October 26, 2015 (Item No. 7)
Title: EDA Redevelopment Contract Status Report Page 9
Meeting: Study Session
Meeting Date: October 26, 2015
Discussion Item: 8
EXECUTIVE SUMMARY
TITLE: Update on Shoreham Redevelopment Contract
RECOMMENDED ACTION: No action necessary at this time.
POLICY CONSIDERATION: This report is intended to update the EDA on a forthcoming
amendment to the Shoreham Redevelopment Contract.
SUMMARY: On August 17, 2015, the EDA approved a Contract for Private Redevelopment
with Shoreham Apartments LLC (an affiliate of Bader Development) in connection with the
construction of The Shoreham mixed-use redevelopment at the SW corner of CSAH 25 and
France Ave. The project has been awarded several grants, one from the Metropolitan Council,
one from DEED, and two from Hennepin County. The Metropolitan Council and DEED grants,
along with one County grant, were awarded for environmental remediation purposes and are
administered by the EDA. The other County grant is for transit-oriented development and was
awarded directly to the Redeveloper in the form of a forgivable loan. The current Contract does
not clearly make the distinction between the two County grants.
The Redeveloper recently informed staff that it will be using the grants as collateral in
connection with its construction financing. The Redeveloper has requested a First Amendment
to the Contract to clarify the County grant provisions and allow the EDA to pay proceeds of the
grants it administers directly to TCF Bank, the Redeveloper’s lender (paragraphs 1 and 2 of the
proposed First Amendment). TCF will ensure that lien waivers are received prior to disbursing
any funds for grant-related activities.
In addition, the Redeveloper has requested the addition of a new Section 8.4 in the Contract
(paragraph 3 of the proposed First Amendment) that allows the Redeveloper to purchase the
Redevelopment Property in connection with a tax-deferred 1031 exchange, without this
transaction being considered a Transfer requiring prior written approval by the EDA. The
Redeveloper covenants that it will remain fully responsible and liable for the Redeveloper’s
obligations under the Contract throughout the 1031 exchange period. The proposed First
Amendment (attached) is scheduled for formal consideration by the EDA Nov. 2nd.
Staff has worked with the EDA’s legal counsel on this matter and sees no reason to not approve
the proposed amendment.
FINANCIAL OR BUDGET CONSIDERATION: All expenses associated with amending the
Shoreham Redevelopment Contract (such as the EDA’s legal counsel) are to be paid by Bader
Development.
SUPPORTING DOCUMENTS: Proposed First Amendment to Shoreham Redevelopment
Contract
Prepared by: Greg Hunt, Economic Development Coordinator
Reviewed by: Michele Schnitker, Housing Supervisor
Approved by: Tom Harmening, EDA Executive Director, and City Manager
Study Session Meeting of October 26, 2015 (Item No. 8) Page 2
Title: Update on Shoreham Redevelopment Contract
FIRST AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT
This agreement is made as of ______________, 2015, by and between the ST. LOUIS
PARK ECONOMIC DEVELOPMENT AUTHORITY, a public body politic and corporate (the
“Authority”) and SHOREHAM APARTMENTS LLC, a Delaware limited liability company (the
“Redeveloper”).
WHEREAS, the Authority and the Redeveloper entered into that certain Contract for
Private Redevelopment dated as of August 17, 2015 (the “Contract”) providing, among other things,
for the construction of certain improvements (the “Minimum Improvements”) on the property
legally described within the Contract (the “Redevelopment Property”), and the disbursement of
various grants for environmental remediation and transit-oriented development in connection with
the Redevelopment Property, including two grants from Hennepin County (the “County Grants”);
and
WHEREAS, the parties have determined to clarify the amounts and purposes of the County
Grants.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
1. Amendment to Section 1.1 of the Contract. Section 1.1 of the Contract is amended
as follows:
“County Grant Agreement” means the Environmental Response Fund Grant Agreement
between the Authority and the County in the amount of $200,000, by and through its Environment
and Energy Department, approved by the County in connection with the development of the
Minimum Improvements.
2. Amendment to Sections 3.4(a) and (b) of the Contract. Sections 3.4(a) and (b) of the
Contract are amended as follows:
(a) To finance a portion of the environmental remediation activities on the Redevelopment
Property, including the costs of implementing the VRAP (the “Grant-Eligible Costs”), the Authority
has obtained a grant from DEED in the amount of $625,075, a grant from the County in the amount
of $200,000, and a grant from the Met Council in the amount of $594,000. The Redeveloper has
separately received a forgivable loan from the County for transit-oriented development purposes in
the amount of $430,000. The parties agree and acknowledge that only the Grant-Eligible Costs are
subject to the terms of this Agreement, and that for purposes of this Agreement, transit-oriented
development costs are not Grant-Eligible Costs.
(b) The Authority will pay or reimburse the Redeveloper for Grant-Eligible
Costs from and to the extent of the grant proceeds from DEED, the Met Council, and the County in
accordance with the terms of the DEED Grant Agreement, the Met Council Grant Agreement, and
the County Grant Agreement, respectively, and the terms of this Section. The Authority and
Redeveloper agree that any amounts payable to the Redeveloper pursuant to this Section 3.4 will be
tendered to TCF National Bank, for the account of Shoreham Apartments LLC, as follows:
Study Session Meeting of October 26, 2015 (Item No. 8) Page 3
Title: Update on Shoreham Redevelopment Contract
TCF National Bank
Attn: Molly Rutzick, Vice President
11100 Wayzata Boulevard, Suite 600
Minnetonka, MN 55305
Telephone: (952) 512-6439
Email: mrutzick@tcfbank.com
Notwithstanding anything to the contrary herein, if Grant-Eligible Costs exceed the amount to be
reimbursed under this Section, such excess shall be the sole responsibility of the Redeveloper
(except to the extent such costs are eligible for reimbursement under the Note).
3. Amendment to Article VIII of the Contract. Article VIII of the Contract is amended
to add a new Section 8.4 as follows:
Section 8.4. Tax Deferred Exchange. Notwithstanding Section 8.2 hereof, if the
Redeveloper desires to purchase the Redevelopment Property in connection with a tax-deferred
exchange under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”),
Redeveloper shall have the right to temporarily assign its rights under this Agreement to a “qualified
exchange intermediary” (a “1031 Agent”) within the meaning of Section 1031 of the Code. During
any period when this Agreement is temporarily assigned to a 1031 Agent, the Redeveloper shall
remain fully responsible and liable for its obligations under this Agreement. It is expressly
understood by the parties that the Authority assumes no liability or responsibility in connection with
the Redeveloper’s tax-deferred exchange and the Redeveloper shall hold the Authority harmless
from any claims, actions or liabilities that may result from the agreements, transactions or
assignments necessary to complete said tax deferred exchange.
4. Miscellaneous. Except as amended by this Amendment, the Contract shall remain in
full force and effect. Upon execution, Redeveloper shall reimburse the Authority for all out-of
pocket-costs incurred by the Authority in connection with negotiating, drafting and approval of this
Amendment.
(Remainder of this page intentionally left blank.)
Study Session Meeting of October 26, 2015 (Item No. 8) Page 4
Title: Update on Shoreham Redevelopment Contract
IN WITNESS WHEREOF, the Authority and the Redeveloper have caused this Agreement to be
duly executed by their duly authorized representatives as of the date first above written.
ST. LOUIS PARK ECONOMIC DEVELOPMENT
AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of November, 2015
by Anne Mavity and Tom Harmening, the President and Executive Director of the St. Louis Park
Economic Development Authority, on behalf of the Authority.
Notary Public
Authority signature page to First Amendment to Contract for Private Redevelopment
Study Session Meeting of October 26, 2015 (Item No. 8) Page 5
Title: Update on Shoreham Redevelopment Contract
SHOREHAM APARTMENTS LLC
By
Its: Chief Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this _____ day of November, 2015,
by Jeffrey R. Peterson, the Chief Manager of Shoreham Apartments LLC, a Delaware limited
liability company, on behalf of the company.
Notary Public
THIS DOCUMENT DRAFTED BY:
Kennedy & Graven, Chartered (MNI)
470 US Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
469412v1 MNI SA285-105
Redeveloper signature page to First Amendment to Contract for Private Redevelopment
Meeting: Study Session
Meeting Date: October 26, 2015
Written Report: 9
EXECUTIVE SUMMARY
TITLE: 2016 Budget Update
RECOMMENDED ACTION: No formal action required. This report is to update the Council
with 2016 levy information outlining the impacts of a 5.50% or 6.00% levy increase.
POLICY CONSIDERATION:
• Does the City Council desire to set the 2016 Final Property Tax Levy at $28,469,974
which is an increase of $1,484,597 or approximately 5.50% over the 2015 Final Property
Tax Levy?
• Or, does the City Council desire to set the 2016 Final Property Tax Levy at $28,604,474
which is an increase of $1,619,097 or approximately 6.00% over the 2015 Final Property
Tax Levy?
• Is there other information that Council would like to review in more detail?
• Are there any other service delivery changes Council would like to have considered?
SUMMARY: In September, Council set a Preliminary Property Tax Levy increase of 6.50%,
which can be decreased but not increased. Subsequently, staff has working on reductions to the
levy and presented information to Council at a study session on October 12th. Council was in
agreement with staff recommendations and upon completion of that discussion, staff was
directed to prepare a report showing property tax levy and estimated city share of property tax
impacts reduced from 6.50% with revisions based on a 5.50% or 6.00% property tax levy
increase. A reduction from 6.50% to 5.50% would result in a levy reduction of $269,000, and
the difference from 6.50% to 6.00% would result in a reduction of $134,500 from the
preliminary levy.
The difference between 5.50% to 6.00% would result in $134,500 in levy dollars to use for
current or future programs/initiatives. Given the Councils high priority on housing, one
possibility would be to direct these dollars to the Housing Rehabilitation Fund due to the
anticipated declining revenues from Private Activity Revenue Bonds.
FINANCIAL OR BUDGET CONSIDERATION: The proposed tax levy will help support
necessary city services to be provided during 2016.
VISION CONSIDERATION: All Vision areas are taken into consideration.
SUPPORTING DOCUMENTS: Discussion
2016 Residential Est. City Share of Prop. Taxes – 6.00%
2016 Residential Est. City Share of Prop. Taxes – 5.50%
Prepared by: Brian A. Swanson, Controller
Reviewed by: Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
Study Session Meeting of October 26, 2015 (Item No. 9) Page 2
Title: 2016 Budget Update
DISCUSSION
BACKGROUND: On June 22, 2015, staff met with the City Council to discuss the 2016
Budget Process. Council agreed that staff should follow recommendations from the “2016
Budget Production Guidelines” when preparing the 2016 Budget. Assumptions for the 2016
Budget included a pattern similar to past years; 1) a levy increase, 2) modest increase in other
fees and charges where appropriate to fit with business costs, 3) maintain high quality and
responsive service delivery, 4) hold expenditures flat where possible with adjustments for some
modest growth based on essential business needs, 5) funding for a wage and benefit contribution
increase, 6) utility rate increases, and 7) continued long range financial planning.
At the August 24th and September 8th, 2015 City Council Study Sessions, the City Council
reviewed information from the staff report and subsequently directed staff to prepare a 2016
Preliminary Property Tax Levy increase of 6.50% when compared to the 2015 Final Property
Tax Levy. In addition, the City Council directed staff to proceed with preparing the 2016
Preliminary HRA Levy at the maximum allowed by state statute, due to the significant
infrastructure projects currently in progress and scheduled per the 2016 – 2025 Capital
Improvement Plan. Council also directed staff to proceed with utility rate adjustments, which
will both be brought back on October 19th for approval, in order to take effect in 2016.
On September 8th, the EDA and City Council adopted and 2016 Preliminary HRA Levy
$1,011,208, which is approximately 6.08% or $57,970 over the 2015 Final HRA Levy. On
September 21st, the City Council adopted the 2016 Preliminary Property Tax Levy of
$28,738,974, which is approximately 6.50% or $1,753,597 over the 2015 Final Property Tax
Levy.
On October 12th, based on direction from the City Council, staff looked at both revenue
enhancements and expenditure reductions, and as such brought back a levy increase of 5.50%
instead of the 6.50% increase, which is a $269,000 reduction from the 2016 Preliminary Property
Tax Levy that was adopted on September 21st. Some of the significant items in reducing the
recommended levy are:
1) City Wide – Decrease of $40,000 – Reduce wage adjustment contingency for
compensation study delayed until 2017 Budget.
2) Community Development – Increase zoning fee revenues by $500
3) Fire – Reduction of $71,750 – Delay hiring of FT Fire Inspector and intern until 7/1/16
saving $56,750 and expenditure line item reductions of $15,000
4) Police – Increases in revenue of $62,000 from Insurance Premium Tax ($35,000), Court
Fees ($20,000) and Forfeits/Penalties ($7,000)
5) Police – Reduction of $42,586 – Delay hiring of additional police officer until 7/1/16
6) Inspections – Revenue increase of $77,655 – revised additional fee and permit revenue
7) Information Resources – Expenditure decreases of $20,000 for postage and equipment
maintenance service of $10,000 each
8) Contingency – Increase expenditure by $45,491 to be used to partially offset the use of
Fund Balance required for the revenue loss at the Recreation Center when the ice rink is
down for required capital repairs in 2016.
Study Session Meeting of October 26, 2015 (Item No. 9) Page 3
Title: 2016 Budget Update
Staffing Adjustments Included in the Updated Levy Recommendation
Based on the 5.50% levy increase, the following staffing adjustments can be accommodated
within the General Ad Valorem Tax Levy:
1) Engineering – Hiring at FT Civil Engineer
2) Fire – Hire a FT Fire Inspector and an Intern – to be hired 7/1/16
3) Inspections – Hiring of Temporary Construction Code Inspector and Property
Maintenance Intern
4) Police – Hiring of FT Police Office – to be hired 7/1/16
Non-General Ad Valorem Tax Levy Staffing Adjustments
1) Community Development/EDA – Increase Economic Dev. Specialist from 80% to FT
2) Utility Funds – Hire FT Public Service Worker and Solid Waste Intern
Updated Property Tax Levy Information Based on Council Direction from October 12th
At the October 12th meeting Council asked staff to prepare tax impacts based on both a 5.50%
and 6.00% tax levy increase. At both levels, all the adjustments outlined above can occur. In
addition, based on a 6% levy adjustment, the City Council can choose to set aside the $134,500
in levy capacity for present or future projects/initiatives, or place the funds into a fund that could
use some resources. Given the Councils high priority on housing, one possibility would be to
direct these dollars to the Housing Rehabilitation Fund due to the anticipated declining revenues
from Private Activity Revenue Bonds.
2015 City Final Levy and 2016 Preliminary Adopted Levies at 5.50% or 6.00%
A synopsis of prior year levy information and the 2016 Proposed Preliminary Levy is shown below:
1. The 2015 Final Levy was $26,985,377, which was 5.50% or $1,407,469 more than 2014.
2. The 2016 Preliminary Property Tax Levy was adopted on September 21st at $28,738,974,
which is approximately 6.50% or $1,753,597 more than the 2015 Final Levy.
Breakdown of Proposed Property Tax Levy at 5.50% or 6.00%
The proposed breakdown of the 5.50% Proposed Property Tax Levy by fund is shown below:
Study Session Meeting of October 26, 2015 (Item No. 9) Page 4
Title: 2016 Budget Update
2015 2016 Dollar Change Percent Change
Final Proposed From 2015 From 2015
TAX CAPACITY BASED TAX LEVY
General Fund $22,364,509 $23,524,106 1,159,597$ 5.18%
Debt Service - Current 1,423,161 1,517,667 94,506 6.64%
Debt Service - Future - 455,995 455,995 N/A
Capital Replacement Fund 1,442,700 1,767,700 325,000 22.53%
Park Improvement Fund 810,000 810,000 - 0.00%
Sidewalk and Trails Fund 645,007 94,506 (550,501) -85.35%
Employee Administration Fund 200,000 200,000 - 0.00%
Housing Rehabilitation Fund 100,000 100,000 - 0.00%
TOTAL TAX LEVIES $26,985,377 $28,469,974 $1,484,597 5.50%
The proposed breakdown of the 6.00% Proposed Property Tax Levy by fund is shown below:
2015 2016 Dollar Change Percent Change
Final Proposed From 2015 From 2015
TAX CAPACITY BASED TAX LEVY
General Fund $22,364,509 $23,524,106 1,159,597$ 5.18%
Debt Service - Current 1,423,161 1,517,667 94,506 6.64%
Debt Service - Future - 455,995 455,995 N/A
Capital Replacement Fund 1,442,700 1,767,700 325,000 22.53%
Park Improvement Fund 810,000 810,000 - 0.00%
Sidewalk and Trails Fund 645,007 94,506 (550,501) -85.35%
Employee Administration Fund 200,000 200,000 - 0.00%
Houising Rehab Fund 100,000 100,000 - 0.00%
To Be Determined - 134,000 134,000 N/A
TOTAL TAX LEVIES $26,985,377 $28,603,974 $1,618,597 6.00%
ADDITIONAL TAX LEVY INFORMATION
By law, the City Council approved 2016 preliminary property tax levies back in September and
those preliminary levies have been sent to Hennepin County for certification. Hennepin County
will mail out parcel specific notices to taxpayers in mid-November. Final action on the 2016
Budget, 2016 Final City Property Tax Levy, Final 2016 HRA Levy, and 2016 – 2025 CIP will
not occur until December.
Estimated City Impact for 2016 on Taxes at a 5.50% or 6.00% Levy Increase
Based on a 5.50% levy increase, and realizing there are many variables in estimating the City
impact on a residential homestead property, a “typical” property in St. Louis Park valued at
approximately $226,600 for taxes payable in 2016, would experience an increase of
approximately $0.99 per month or approximately $11.90 for the year on the City share of
property taxes.
Study Session Meeting of October 26, 2015 (Item No. 9) Page 5
Title: 2016 Budget Update
Based on a 6.00% levy increase for taxes payable in 2016, the residential homesteaded property
owner would experience an increase of approximately $1.37 per month or approximately $16.47
for the year on the City share of property taxes.
The difference between 5.50% and 6.00% property tax levy increase for the residential median
valued homesteaded property owner would be approximately $0.38 per month or $4.57 for the
entire year.
NEXT STEPS: As the 2016 budget process continues, the following preliminary schedule
snapshot has been developed for Council:
November 9 (If necessary) Final budget or CIP discussion prior to Truth in
Taxation Public Hearing and budget presentation.
December 7 Truth in Taxation Public Hearing and budget presentation.
December 14 (If needed) - Public Hearing continuation and any budget discussion.
December 21 Council adopts 2015 Revised Budget, 2016 Budgets, final tax levies
(City and HRA), and 2016 - 2025 CIP.
The City Council has the option of decreasing the 2016 Preliminary Property Tax Levies for the
City and HRA after the initial certification; however it cannot be increased.
CITY OF ST. LOUIS PARK
RESIDENTIAL ESTIMATED CITY SHARE OF PROPERTY TAXES
2016 PRELIMINARY PROPERTY TAX LEVY
6.00% INCREASE
As of 10-26-15
* These are estimated figures at particular price points.
Homes at the price points will not experience these exact changes.
Assessed Market Val.Taxable Taxable Estimated City Tax Dollar Percent
2014 For 2015 For Market Market 2015 2016 Change Change
Pay 2015 Pay 2016 Value 2015 Value 2016
150,000 136,500 126,260.00 111,545.00 624.09 534.50 -89.59 -14.4%
175,000 180,075 153,510.00 159,041.75 758.78 762.10 3.31 0.4%
217,660 226,600 200,009.40 209,754.00 988.63 1,005.10 16.47 1.7%
250,000 264,750 235,260.00 251,337.50 1,162.87 1,204.36 41.49 3.6%
350,000 359,800 344,260.00 354,942.00 1,701.64 1,700.81 -0.83 0.0%
450,000 462,600 450,000.00 462,600.00 2,224.31 2,216.69 -7.62 -0.3%
500,000 519,500 500,000.00 519,500.00 2,471.45 2,512.70 41.25 1.7%
600,000 623,400 600,000.00 623,400.00 3,089.31 3,135.04 45.72 1.5%
700,000 723,100 700,000.00 723,100.00 3,707.18 3,732.21 25.04 0.7%
Assumptions:
2015 and 2016 tax capacity rate based on Hennepin County information.
Tax capacity rates increase from 1% to 1.25% for values over $500,000.
= Median Value Home in St. Louis Park
Study Session Meeting of October 26, 2015 (Item No. 9)
Title: 2016 Budget Update Page 6
CITY OF ST. LOUIS PARK
RESIDENTIAL ESTIMATED CITY SHARE OF PROPERTY TAXES
2016 PRELIMINARY PROPERTY TAX LEVY
5.50% INCREASE
As of 10-26-15
* These are estimated figures at particular price points.
Homes at the price points will not experience these exact changes.
Assessed Market Val.Taxable Taxable Estimated City Tax Dollar Percent
2014 For 2015 For Market Market 2015 2016 Change Change
Pay 2015 Pay 2016 Value 2015 Value 2016
150,000 136,500 126,260.00 111,545.00 624.09 532.07 -92.02 -14.7%
175,000 180,075 153,510.00 159,041.75 758.78 758.63 -0.16 0.0%
217,660 226,600 200,009.40 209,754.00 988.63 1,000.53 11.90 1.2%
250,000 264,750 235,260.00 251,337.50 1,162.87 1,198.88 36.01 3.1%
350,000 359,800 344,260.00 354,942.00 1,701.64 1,693.07 -8.57 -0.5%
450,000 462,600 450,000.00 462,600.00 2,224.31 2,206.60 -17.70 -0.8%
500,000 519,500 500,000.00 519,500.00 2,471.45 2,501.27 29.82 1.2%
600,000 623,400 600,000.00 623,400.00 3,089.31 3,120.77 31.46 1.0%
700,000 723,100 700,000.00 723,100.00 3,707.18 3,715.23 8.06 0.2%
Assumptions:
2015 and 2016 tax capacity rate based on Hennepin County information.
Tax capacity rates increase from 1% to 1.25% for values over $500,000.
= Median Value Home in St. Louis Park
Study Session Meeting of October 26, 2015 (Item No. 9)
Title: 2016 Budget Update Page 7
Meeting: Study Session
Meeting Date: October 26, 2015
Written Report: 10
EXECUTIVE SUMMARY
TITLE: Kerasotes Showplace ICON Theatre Liquor License Premises Amendment
RECOMMENDED ACTION: No action needed at this time. This report outlines a proposal
submitted by Kerasotes Theatres to expand the liquor service area for the licensed premises at
the ShowPlace ICON Theatre located at the West End.
POLICY CONSIDERATION: Does the City Council need any other information regarding the
expansion of the liquor service area at Showplace ICON prior to considering the premises
amendment at the November 2 Council meeting?
SUMMARY: Kerasotes Theatres recently approached the City to propose an amendment to the
liquor license for the Showplace ICON Theatre located at the West End. The proposed
amendment would expand the licensed premises to allow guests to purchase alcohol at multiple
service points and to consume alcohol in any of the auditoriums on the premises.
Kerasotes currently holds an On-Sale Intoxicating liquor license with Sunday sales for the
premises located at 1625 West End Blvd. They also hold a special 2 am license from the
State. This license was first approved by the City Council in 2009. Currently, alcohol is sold
exclusively at the in-house bar/restaurant called the “LoBBY LOUNGE”. This is a separate area
within the theatre, located upstairs, that is limited to guests over the age of 21. Guests (21 and
over) have the option to take alcoholic beverages (purchased at the LoBBY Lounge) into either
of the two (2) reserved VIP premium auditoriums for which a special ticket must be purchased.
The primary reason for the request is a desire on the part of Kerasotes Theatres to keep the
Showplace ICON Theatre competitive within the Twin Cities market. Several other theatres in
the metro area have recently been approved for liquor licenses that allow guests to purchase
alcohol on-site for consumption throughout the licensed premises, in any auditorium.
The proposal was reviewed by both staff and the City Attorney and it was determined that the
appropriate course of action would be for Kerasotes to apply for a premises amendment to the
existing liquor license. An application for a premises amendment was subsequently submitted
by Kerasotes and is scheduled to be considered by the City Council on November 2nd.
FINANCIAL OR BUDGET CONSIDERATION: None at this time.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Discussion
Prepared by: Melissa Kennedy, City Clerk
Reviewed by: Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
Study Session Meeting of October 26, 2015 (Item No. 10) Page 2
Title: Kerasotes Showplace ICON Theatre Liquor License Premises Amendment
DISCUSSION
BACKGROUND: The On-Sale Intoxicating and Sunday liquor licenses for the Showplace
ICON Theatre located at the West End were originally granted in 2009. After reviewing the staff
report and the minutes from the meeting at which the licenses were originally approved, it is
clear the intent was to only allow alcohol to be sold out of the restaurant area upstairs (LoBBY
LOUNGE) and to limit the areas in which alcohol could be carried or consumed to the LoBBY
LOUNGE and either of the two (2) designated VIP Premium Reserved auditoriums.
Given the proposal to change the original parameters outlined for the sale and consumption of
alcohol on the licensed premises, staff directed the applicant to apply for a premises amendment.
City Code Sec. 3-106 states that amendments to a liquor license must be approved by the City
Council.
Where is alcohol currently sold on the premises?
• Alcohol is currently sold at the LoBBY LOUNGE, a separate restaurant/bar area located
upstairs. No alcohol is currently sold at the main level concession area. All party
members must be 21 years of age or older to enter areas where alcohol is served.
Where can alcohol currently be consumed on the premises?
• Alcohol can be consumed in the LoBBY LOUNGE or in either of the two (2) VIP
Premium Reserved auditoriums by guests 21 years of age and older (with valid ID). This
equates to approximately 9% of the seating in the entire premises.
Under the new proposal, where would alcohol be sold on the premises?
• Alcohol would continue to be sold in the LoBBY LOUNGE to guests 21 years of age and
older (with valid ID).
• Additionally, alcohol would be available for purchase by guests 21 years of age and older
(with valid ID) at a dedicated service area out of the main level concession stand.
• Initially, the main level concession stand sales would be limited to bottled beer (12 oz.)
and dispenser wine (5 oz. pour) only.
Under the new proposal, where could alcohol be consumed on the premises?
• Alcoholic beverages could be consumed within any of the auditoriums on the premises.
How is the sale and consumption of alcohol currently regulated or controlled on the
licensed premises?
• Only guests 21 years of age and older are allowed to enter areas where alcohol is served.
• A valid photo ID is required in order to purchase alcohol.
• All employees serving alcohol must complete a training course related to the responsible
service of alcohol, including learning to recognize the signs of over-intoxication.
What internal control procedures would the applicant implement to control the expanded
sale and consumption of alcohol on the licensed premises?
• Only guests 21 years of age and older will be served, with a valid photo ID required to
purchase alcohol.
Study Session Meeting of October 26, 2015 (Item No. 10) Page 3
Title: Kerasotes Showplace ICON Theatre Liquor License Premises Amendment
• All employees serving alcohol must complete a training course related to the responsible
service of alcohol, including learning to recognize the signs of over-intoxication.
• Alcohol will be served one drink at a time per customer, with a limit of three drinks per
customer per visit to the theatre.
• Alcoholic beverages will be served in designated containers that are different from the
containers used for non-alcoholic beverages.
• Alcohol will not be discounted to boost sales at any time. Kerasotes Showplace ICON
will not have a “happy hour” or other designated window of time during which the sale of
alcoholic beverages will be discounted.
• All auditoriums will be under surveillance – both via cameras and periodic monitoring by
staff and managers.
Are there other movie theatres in the Twin Cities area are licensed to sell alcohol for
consumption throughout the entire licensed premises?
Theatre City
Marcus Theatre Oakdale
AMC Theatre Inver Grove Heights
Landmark Uptown Theatre Minneapolis
Marcus Parkwood Cinema Waite Park
New Hope Cinema Grill New Hope
• AMC Theatres also have plans to add expanded alcohol service to two (2) Twin Cities’
locations in 2016.
Does the Police Department have any safety or enforcement concerns related to the
request?
• The Police Department was consulted and did not have any immediate concerns
regarding the proposed amendment. Regular compliance checks would continue to be
performed and the expanded service would be monitored.
Have there been any liquor violations or compliance check failures on the licensed
premises?
• Since obtaining the liquor license in 2009, there have been no liquor license violations or
compliance check failures at the licensed premises.
NEXT STEPS: The proposed premises amendment will be presented for Council action at the
November 2, 2015 regular meeting. Kerasotes Theatres would like to implement the proposed
changes to the liquor license, if approved by the Council, for the upcoming holiday season.
Meeting: Study Session
Meeting Date: October 26, 2015
Written Report: 11
EXECUTIVE SUMMARY
TITLE: Proposed Small Business Saturday Proclamation
RECOMMENDED ACTION: The purpose of this report is to inform the City Council of the
Small Business Saturday Campaign.
POLICY CONSIDERATION: Does the City Council wish to support the Small Business
Saturday initiative by approving a proclamation.
SUMMARY: Small Business Saturday is an initiative to encourage area customers to patronize
local businesses. The Saturday falls on the weekend after Thanksgiving – between Black Friday
and Cyber Monday. It has become a nationwide effort to celebrate and support small businesses
and all they contribute to their communities. The day encourages people to shop at local small
businesses on the Saturday after Thanksgiving.
Small Business Saturday was launched in 2010 and involved 130 small businesses advocate
groups, 1.2 million Facebook users, public and private organizations and local governments. By
2014, it is estimated that over $14.3 billion was spent at small businesses on the day. By
spreading the word about Small Business Saturday, St. Louis Park can help raise awareness
about the critical roll small businesses play in the city.
This year, Small Business Saturday falls on November 28th. Staff is proposing that the City
Council approve a proclamation supporting the Small Business Saturday initiative to demonstrate
St. Louis Park’s support for the local businesses that create jobs, boost the economy and preserve
our neighborhoods.
If the Council is supportive, staff will prepare a Proclamation for formal consideration at the
November 2nd City Council meeting. In addition staff will promote the initiative on Life in the
Park and social media.
FINANCIAL OR BUDGET CONSIDERATION: None
VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged
community.
SUPPORTING DOCUMENTS: None
Prepared by: Julie Grove, Economic Development Specialist
Reviewed by: Greg Hunt, Economic Development Coordinator
Michele Schnitker, Housing Supervisor/Deputy CD Director
Approved by: Tom Harmening, City Manager
Meeting: Study Session
Meeting Date: October 26, 2015
Written Report: 12
EXECUTIVE SUMMARY
TITLE: Reilly Tar & Chemical Corp. Site Update
RECOMMENDED ACTION: No action at this time. The purpose of this report is to inform
the City Council of a planned November 12, 2015, educational open house hosted by US EPA.
POLICY CONSIDERATION: None
SUMMARY: The Environmental Protection Agency (EPA) Superfund program supervised the
cleanup of the former Reilly Tar & Chemical site. The site has since been redeveloped into
Louisiana Oaks Park and multi-family housing units. Because buried waste material was left in
place at the site, the city follows EPA-approved safety rules, called the Remedial Action Plan
(RAP), if it undertakes construction activities on the site. If waste material is encountered, the
RAP provides guidance on which additional precautions may be necessary to ensure public
safety.
This summer, construction of a pedestrian bridge and trail was undertaken at the site. Pre-project
inspections didn’t indicate any concerns at the site. When members of the public contacted the
city and the EPA with concerns about the work, the work site was immediately re-inspected and
fenced to allay public health concerns. The trail has recently been paved and final work in the
area includes expansion of the north parking lot, expected to be completed by the end of the year.
The City has continued to work closely with the EPA to ensure all applicable rules and
regulations are adhered to during construction. Some current and former residents of the area
around Reilly Tar & Chemical have created a Facebook group to provide a forum for their
questions and concerns regarding the Reilly site. In response to the concerns voiced, US EPA is
offering an educational open house with the participation of the Minnesota Department of
Health, the Minnesota Pollution Control Agency and the City. Property owners living adjacent to
the site will be notified via mail by the US EPA of this event.
The educational open house will feature tables with appropriate staff from each of the agencies
to provide information and answer questions about the history of the site, the cleanup that took
place, ongoing monitoring activities and protective measures taken during projects at the site.
The open house will take place Thursday, November 12, 6:00 -8:00 p.m. at The Rec Center
banquet room, 3700 Monterey Drive, St. Louis Park. More information is at
www.epa.gov/superfund/reilly-tar.
VISION CONSIDERATION: St. Louis park is committed to being a leader in environmental
stewardship. We will increase environmental consciousness and responsibility in all areas of city
business.
SUPPORTING DOCUMENTS: Reilly Tar & Chemical Corp. Fact Sheet
Prepared by: Jacqueline Larson, Communications and Marketing Manager
Reviewed by: Cindy Walsh, Operations and Recreations Director
Mark Hanson, Operations Superintendent
Approved by: Tom Harmening, City Manager
Reilly Tar and Chemical Corp. Superfund Site
Louisiana Street and Walker Street, St. Louis Park, Minnesota 55426
SITE SIZE: 80 acres
SITE REUSES: The site is now home to condos and townhouses, a
restaurant and bowling alley, an office building and a
recreational park with athletic fields, walking paths,
recreation center, pond, and playground.
INTRODUCTION
From 1917 until 1972, Reilly Industries operated a coal tar distillation and creosote wood preserving plant on an
80-acre site in St. Louis Park, known as the Republic Creosoting Company. According to Scott Anderson, the city
of St. Louis Park’s former superintendent of utilities and a lifelong St. Louis Park resident, “Everyone who grew
up in the city remembers the smell of creosote.” Today, the same Superfund site that was responsible for the
pervasive creosote smell has been redeveloped and now features townhouses, an office building, and a park –
complete with recreational fields, a playground, and walking trails.
SITE HISTORY
From 1917 until 1939, wastes containing coal tar and its distillation byproducts were discharged directly into a
ditch that ran the length of the site. These wastes then flowed into a peat bog on the southern portion of the site.
An oil-water separator was installed in 1940, but Republic Creosoting Company continued to discharge
contaminated waste into the peat bog for the duration of the company’s operations at the site.
The soil elsewhere on the site also became contaminated from coal tar and creosote that dripped from leaky pipes,
various process materials that spilled during transport and creosote wood preserving chemicals that washed off
freshly treated lumber. Historical records suggest more than a dozen wells were located on the site, with depths
varying from 50 to more than 900 feet. Over time, creosote and waste materials likely seeped down several of
these wells (either directly from the surface or via multi-aquifer transfer) and contaminated the groundwater.
CITY OWNERSHIP
The city of St. Louis Park purchased the site from Reilly Industries in 1972. At the time, the State of Minnesota
was suing Reilly Industries over pollution discharge issues. The sales agreement included a “hold harmless”
clause for soil and water impurities, partially indemnifying Reilly Industries from liability. By this time, creosote
and creosote wastes had migrated directly into four underlying aquifers, contaminating the groundwater with
polynuclear aromatic hydrocarbons (PAHs). The contaminants eventually spread to private wells and municipal
ground water sources.
After acquiring the site in 1972, the city of St. Louis Park razed the Republic Creosoting Company buildings and,
over the next eight to ten years, constructed residential buildings on the northern end of the site. A major north-
south boulevard (Louisiana Avenue) and storm water drainage improvements were also constructed. No
redevelopment occurred on the site from 1984 until 2002 due to the fear of significant environmental costs
associated with cleaning up the site.
Beginning in 1978, the State of Minnesota shut down several public drinking water wells in the vicinity of the
site, and the city of St. Louis Park instituted a water conservation program due to daily shortages of clean,
drinkable water. In 1979, 28 multi-aquifer wells were either reconstructed or abandoned to prevent the spread of
contamination in the ground water. By that time, many community residents had become extremely concerned
about the quality of the drinking water.
Study Session Meeting of October 26, 2015 (Item No. 12)
Title: Reilly Tar & Chemical Corp. Site Update Page 2
THE CLEANUP PROCESS
In 1982, the U.S. Environmental Protection Agency (EPA) provided funds to the Minnesota Pollution Control
Agency (MPCA) to clean out two contaminated wells. The site was listed on the National Priorities List in 1983.
In 1984, a record of decision was issued, requiring Reilly Industries, the potentially responsible party, to construct
a granular-activated carbon (GAC) treatment plant for two existing contaminated municipal wells and assist with
containing the contaminant plume from reaching other municipal wells by constructing a source control system in
the upper aquifers.
Reilly Industries eventually came forward with a practical, cost-effective remediation plan that expedited the
cleanup and reuse process. Reilly’s plan led to settlement of the lawsuit over liability and a 1986 agreement
between all parties for remediating the site. Under the settlement, the city agreed to share the responsibility for
operating and maintaining the municipal water treatment plants and performing long-term ground water
monitoring. Construction of the required pump and treat system was finished in 1997.
Redeveloping the former contaminated property was important to the city’s growth as a Minneapolis suburb,
primarily because St. Louis Park has little land available for new construction other than previously used
property. Ultimately, a strong commitment to redevelopment and a willingness to take risks by investing in a
contaminated property were key factors to overcoming impediments to reuse. These efforts culminated in a large
apartment complex being built on the south end of the site and an office complex being built on the east side of
the site.
A NEW RECREATIONAL PARK
In 2002, the city built a recreational park to complement the residential housing on the north and south ends of the
site. Today, community members enjoy walking trails, a playground, athletic fields, a new recreation pavilion,
and a pond that provides wildlife habitats. The site is now a place where community members can gather to enjoy
the amenities that the city worked so hard to create.
Approximate Costs:
Clean Up Studies/Efforts - $5 Million (1970s) Water Treatment, Capital - $4 Million (1980/90s)
Park Improvements - $3.2 Million (2000s) Water Treatment, Annual - $650,000 (present value)
Development - $55 Million (present value)
Study Session Meeting of October 26, 2015 (Item No. 12)
Title: Reilly Tar & Chemical Corp. Site Update Page 3