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HomeMy WebLinkAbout04-091 - ADMIN Resolution - City Council - 2004/08/02RESOLUTION NO. 04-091 RESOLUTION ADOPTING A MODIFICATION TO THE • REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1 AND ESTABLISHING THE ELMWOOD VILLAGE TAX INCREMENT FINANCING DISTRICT THEREIN AND ADOPTING A 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 Board of Commissioners (the "Board") of the City of St. Louis Park (the "EDA") has heretofore established Redevelopment Project No. 1 and adopted a Redevelopment Plan therefor. It has been proposed by the EDA and the City that the City adopt a Modification to the Redevelopment Plan for Redevelopment Project No. 1 (the "Redevelopment Plan Modification") and establish the Elmwood Village Tax Increment Financing District (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the 'Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469 047, Sections 469 090 to 469.1082, and Sections 469.174 to 469.1799, all inclusive, as amended, (the "Act") all as reflected in the Plans, and presented for the Council's consideration. 1.02. The City has investigated the facts relating to the Plans and has caused the Plans to be prepared. 1.03. The City has performed all actions required by law to be performed pnor to the establishment of the District and the adoption and approval of the proposed Plans, including, but not limited to, notification of County of Hennepin and Independent School Distnct No 283 having taxing junsdiction over the property to be included in the District, a review of and wntten comment on the Plans by the City Planning Commission, and the holding of a public heanng upon published notice as required by law. 1.04. Certain wntten reports (the 'Reports") relating to the Plans and to the activities contemplated therein have heretofore been prepared by staff and consultants and submitted to the Council and/or made a part of the City files and proceedings on the Plans. The Reports include environmental studies, data, information and/or substantiation constituting or relating to the basis for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.05 The City is not modifying the boundaries of Redevelopment Project No. 1. Section 2 Findings for the Adoption and Approval of the Plans. 2.01. The Council hereby finds that the Plans, are intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development in the public interest and accomplish certain objectives as specified in the Plans, which are hereby incorporated herein. Resolution No. 04-091 -2- Section 3. Findings for the Establishment of the Elmwood Village Tax Increment Financing Distract. 3.01. The Council hereby finds that the Distnct is a "renewal and renovation distract" under Minnesota Statutes, Section 469.174, Subd. 10a. 3.02. The Council further finds that the proposed development would not occur solely through pnvate 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 Distnct permitted by the TIF Plan, that the Plans conform to the general plan for the development or redevelopment of the City as a whole; and that the Plans will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the Distnct by pnvate enterprise. 3.03. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in wnting, attached hereto as Exhibit A. 3.04. The City elects to calculate fiscal dispanties for the Distnct in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal dispanties contnbution would be taken from inside the Distnct Section 4. Public Purpose 4.01. The adoption of the Plans conforms in all respects to the requirements of the Act. The Plans will facilitate various public improvements associated the construction of over 250 units of housing and new commercial facilities in Elmwood Neighborhood, which will improve the tax base and improve the general economy of the State, and thereby serves a public purpose. Section 5. Approval and Adoption of the Plans. 5.01. The Plans, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the Economic Development Coordinator. 5.02. The staff of the City, the City's advisors and legal counsel are authonzed and directed to proceed with the implementation of the Plans 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 (the "Auditor") is requested to certify the onginal net tax capacity of the District, as descnbed in the TIF Plan, and to certify in each year thereafter the amount by which the onginal net tax capacity has increased or decreased; and the City is authonzed and directed to forthwith transmit this request to the Auditor in such form and content as the Auditor may specify, together with a list of all properties within the Distnct, for which building permits have been issued dunng the 18 months immediately preceding the adoption of this resolution. Resolution No. 04-091 -3- 5.04 The Economic Development Coordinator is further authorized and directed to file a copy of the Plans with the Commissioner of the Minnesota Department of Revenue pursuant to ota Statutes 469.175, Subd. 4a M eviewe for Administration: ATTEST: Ci Clerk Adopted by the City Council August 2, 2004 r , M vor M yor -G-" 'I (Seal) Resolution No. 04-091 -4- EXHIBIT A RESOLUTION NO. 04-091 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for the Elmwood Village Tax Increment Financing Distnct, as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that the Elmwood Village Tax Increment Financing District is a ;renewal and renovation district as defined in M.S , Section 469.174, Subd. 10a. The Distnct consists of 17 parcels, with plans to redevelop the area for housing and commercial purposes. The development will consist of over 250 units of housing and new commercial facilities in Elmwood Neighborhood. More than 70 percent of the area in the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 20 percent of the buildings in the Distnct are structurally substandard, and more than 30 percent are 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 Elmwood Village Tax Increment Financing District permitted by the TIF Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: The first phase of the proposed development will occur in the area generally west of Wooddale Avenue on the site of the former Quadion building. This portion of the Distnct is occupied by substandard buildings and other buildings that meet a lesser standard of obsolescence, all as further described in Appendix F. The first phase requires demolition of all the existing structures (except an existing office building) and construction of 224 owner -occupied housing units by Rottlund Homes. The City has analyzed a proforma submitted by the developer, which, in the City's opinion, demonstrates that development at the proposed density (which is consistent with the City's Elmwood Area Land Use, Transit and Transportation Study) would not be feasible without the tax increment assistance provided under this plan. The amount of assistance to Rottlund is estimated to be less than $900,000. The second phase of proposed development consists of approximately 75 units of housing and approximately 20,000 square feet of commercial development east of Wooddale together with approximately 50,000 square feet of commercial development along Highway 7. Other needs include acquisition, demolition and/or relocation to permit the proposed developments. Further, in order to make such redevelopment feasible, the City will need to undertake improvements to the intersection of Wooddale and Highway 7, including new turn lanes and new frontage road access, and storm sewer and street improvements to 0 Resolution No. 04-091 -5- EXHIBIT A Wooddale itself. The City believes that if such public improvement costs were assessed to the affected property, the assessments together with the other extraordinary costs of demolition and relocation would make redevelopment extremely unlikely (based on the City's previous expenence with similar situations). The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the TIF Plan: Regarding the first phase of the Rottlund Homes proposal, the proposed developer might be able to develop a smaller phase 1 project without tax increment assistance, but that project would exclude portions of the proposed site, and would produce $4.5 million less in market value annually for a $900,000 TIF investment present value TIF investment. Regarding the area east of Wooddale and along Highway 7, any alternative development would require the type of public improvements discussed above, and the city has no basis for believing that redevelopment of any kind which would meet current zoning requirements would occur in these areas without tax increment assistance to finance such improvements. It is important to note that the redevelopment of the Elmwood area is not simply one phase, but is an interconnected serves of developments which all share common infrastructure, pursuant to the Elmwood Area Land Use, Transit and Transportation Study. The increased traffic, storm sewer drainage requirements, potential new connections to Highway 7 and Highway 100 which serve all phases of development, as well as a potential mass transit station in the future, will require substantial public investment to enable the pnvate investment to proceed. Therefore, the City concludes as follows: a. The City's estimate of the amount by which the market value of the entire Distnct will increase without the use of tax increment financing is $0, or at the most, $45,610,000, if the alternative phase 1 housing development were to occur. b. If all development which is proposed to be assisted with tax increment were to occur in the District, the total increase in market value would be up to $77,682,800 c The present value of tax increments from the District for the maximum duration of the distract permitted by the TIF Plan is estimated to be $7,125,656. (See Appendix G in the TIF Plan) d Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $70,557,144 (the amount in clause b less the amount in clause c) without tax increment assistance. 3 Finding that the Tax Increment Financing Plan for the Elmwood Village Tax Increment Financing District conforms to the general plan for the development or redevelopment of the municipality as a whole. Resolution No 04-091 -6- EXHIBIT A The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the general development plan of the City 4. Finding that the Tax Increment Financing Plan for Elmwood Village 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 Distnct will result in the redevelopment of a vacated manufactunng site, preserve and enhance the tax base, and provide an impetus for residential development, which is desirable and necessary for increased population and an increased need for life -cycle renewal and renovation within the City.