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Home My WebLink About99-150 - ADMIN Resolution - City Council - 1999/12/20r RESOLTUION NO. 99-150 RESOLUTION ESTABLISHING THE ZARTHAN AVE./16TH STREET TAX INCREMENT FINANCING DISTRICT WITHIN REDEVELOPMENT PROJECT NO. 1 AND ADOPTING THE TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council (the "Council") of the City of St Louis Park, Minnesota (the "City"), as follows Section 1 Recitals 1 01 The City has heretofore established Redevelopment Project No 1 and adopted the Redevelopment Plan therefor It has been proposed that the City establish the Zarthan Avenue/16th Street Tax Increment Financing District therein and adopt the Tax Increment Financing Plan therefor (the "Plan"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469 090 through 469 1081 and 469 174 through 469 179, all inclusive, as amended, (the "Act") all as reflected in the Plan, and presented for the Council's consideration 1 02 The Council has investigated the facts relating to the Plan and has caused the Plan to be prepared 1 03 The City has performed all actions required by law to be performed prior to the adoption and approval of the proposed Plan, including, but not limited to, notification of Hennepin County and School District No 283 having taxing jurisdiction over the property to be included in the Zarthan Avenue/16th Street Tax Increment Financing District, notice of a potential redevelopment district to the local county commissioner, a review of and written comment on the Plan and Program by the City Planning Commission, and the holding of a public hearing upon published notice as required by law Section 2 Findings for the Adoption and Approval of the Plan and Program 2 01 The Council hereby finds that the Plan is intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for redevelopment in the public purpose and accomplish certain objectives as specified in the Plan, which is hereby incorporated herein Section 3 Findings for the Establishment of the Zarthan Avenue/16th Street Tax Increment Financing District Resolution 99-150 -2- 3 01 The Council hereby finds that the Zarthan Ave /16th Street Tax Increment Financing District is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469 174, subd 10 (a)(1) 3 02 The Council further finds that the proposed redevelopment would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the Zarthan Avenue/16th Street Tax Increment Financing District permitted by the Tax Increment Financing Plan, that the Plan conforms to the general plan for the development or redevelopment of the City as a whole, and that the Plan will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the Zarthan Avenue/16th Street Tax Increment Financing District by private enterprise 3 03 The City elects to make a qualifying local contribution in accordance with Minnesota Statutes, Section 273 1399, subd 6(d), in order to qualify the Zarthan Avenue/16th Street Tax Increment Financing District for exemption from state aid losses set forth in Section 273 1399 3 04 The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A 3 05 The City of St Louis Park elects to calculate fiscal disparities for the Zarthan Avenue/16th Street Tax Increment Financing District in accordance with Minnesota Statutes, Section 469 177, subdivision 3, clause b, which means the fiscal disparities contribution will be taken from within the Zarthan Avenue/16th Street Tax Increment Financing District Section 4 Public Purpose 4 01 The adoption of the Plan conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the City which is already built up, to provide employment opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose Section 5 Approval and Adoption of the Plan and Program 5 01 The Plan, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, is hereby approved, ratified, established, and adopted and shall be placed on file in the office of the Economic Development Director Resolution 99-150 -3- 5 02 The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plan and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose 5 03 The Auditor of Hennepin County is requested to certify the original net tax capacity of the Zarthan Avenue/16th Street Tax Increment Financing District, as described in the Plan, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased, and the City of St Louis Park is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the Zarthan Avenue/16th Street Tax Increment Financing District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution 5 04 The Economic Development Director is further authorized and directed to file a copy of the Plan with the Commissioner of Revenue Reviewed for Administration Attest CitK Clerk Adop ed'by e City Council December 20, 1999 i Resolution 99-150 -4- EXHIBIT A RESOLUTION No 99-150 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for the Zarthan Avenue/16th Street Tax Increment Financing District as required pursuant to Minnesota Statutes, Section 469 175, Subdivision 3 are as follows 1 Finding that the Zarthan Avenue/16th Street Tax Increment Financing District is a redevelopment district as defined in MS , Section 469.174, Subd. 10(a)(1). The Zarthan Avenue/16th Street Tax Increment Financing District consists of 12 parcels, with plans to redevelop the area for commercial and housing purposes At least 70 percent of the area in the parcels in the Zarthan Ave /16th St Tax Increment Financing District are occupied by buildings, streets, utilities, or other improvements and more than 50 percent of the buildings in the Zarthan Avenue/16th Street Tax Increment Financing Distnct, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance (See Appendix F of the TIF Plan) 2 Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the Zarthan Ave./16th St. Tax Increment Financing District permitted by the Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: The proposed Tax Increment Finance District will be established in an area that has been substandard and underutilized for many years Eighty-three percent of the structures on the site are structurally substandard It is cost prohibitive to rehabilitate these substandard structures The most feasible way to remove the blight is through a complete redevelopment of the Tax Increment Finance District In order for the redevelopment to occur a land write-down is necessary to bring the cost of the land down to market value Without=this land write-down, it is cost prohibitive to redevelop the Tax Increment Finance District and the developer is not willing to take on a project that does not have an adequate return on investment The developer has documented the need for assistance in a formal application to the City Resolution 99-150 -5- The increased market value of the site that could reasonable be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the Plan: The TIF District is currently occupied by a large warehouse, 3 single family houses, an office/commercial building, and several vacant parcels If no tax increment assistance were provided, the only reasonably anticipated development would occur on the vacant parcels, which make up less than 25% of the total area to be redeveloped There is no scenario in which development of the available vacant land could create an increase in market value that equals or exceeds $17 7 million (which is the estimated $22 9 million increase in market value projected for the hotel and housing development, less the $5 2 estimated present value of tax increment for 25 years) Any significant new development in this area requires acquisition and reconfiguration of parcels and demolition of existing structures It has been the City's experience that such costs preclude redevelopment without public intervention Therefore, the City reasonably concludes that any increase in market value at this site would be minimal without tax increment assistance, and certainly less than the $17 7 benchmark value 3 Finding that the Tax Increment Financing Plan for the Zarthan Avenue/16th Street Tax Increment Financing District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Plan was reviewed by the Planning Commission on December 1, 1999 The Planning Commission found that the Plan conforms to the general development plan of the City 4. Finding that the Tax Increment Financing Plan for the Zarthan Avenue/16th Street Tax Increment Financing District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Redevelopment Project No. 1 by private enterprise. The project to be assisted by the Zarthan_Avenue/16th Street Tax Increment Financing District will result in increased employment in the City and the State of Minnesota, the renovation of substandard properties, increased tax base of the State and add a high quality development to the City