Loading...
HomeMy WebLinkAbout06-041 - ADMIN Resolution - City Council - 2006/02/21CITY OF ST. LOUIS PARK COUNTY OF HENNEPIN STATE OF MINNESOTA RESOLUTION NO. 06-041 RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1 AND A MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR THE ELMWOOD VILLAGE TAX INCREMENT FINANCING DISTRICT. 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 a Modification to the Elmwood Village Tax Increment Financing Plan (the "TIF Plan Modification") for the Elmwood Village Tax Increment Financing (the "District") therefor (the Redevelopment Plan Modification and the TIF Plan Modification are referred to collectively herein as the "Modifications"); 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 Modifications, and presented for the Council's consideration. 1 02 The City has investigated the facts relating to the Modifications and has caused the Modifications to be prepared. 1.03. The City has performed all actions required by law to be performed pnor to the adoption and approval of the proposed Modifications, including, but not limited to, notification of the County of Hennepin and Independent School Distnct No. 283 having taxing junsdiction over the property included in the District, a review of and written comment on the Modifications by the City Planning Commission, and the holding of a public hearing upon published notice as required by law. 1.04. The City is not modifying the boundanes of Redevelopment Project No. 1. 1 05 The City is enlarging the boundanes of the Elmwood Village Tax Increment Financing District. The Distnct is being modified to be a scattered site renovation and renewal distnct that includes 8 additional parcels to facilitate vanous public improvements associated with the construction of approximately 154 owner occupied units, 220 rental units and 25,000 sq/ft of retail space. Resolution No. 06-041 -2- Section 2. Findings for the Tax Increment Financing Plan Modification. 2.01. The Council hereby finds that the Modifications, 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 Modifications, which are hereby incorporated herein. Section 3. Findings for the Modification of the Elmwood Village Tax Increment Financing District. 3.01. The Council hereby finds that the District is a "scattered site renewal and renovation distnct" 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 District permitted by the TIF Plan, that the Modifications conform to the general plan for the development or redevelopment of the City as a whole, and that the Modifications will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the District by private enterprise. 3.03 The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in wnting, attached hereto as Exhibit A. 3.04. The City elects to calculate fiscal dispanties for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contnbution would be taken from inside the District. Section 4. Public Purpose 4.01. The adoption of the Modifications conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State which is already built up. In addition, the plans and modification will facilitate the development of several sites that are occupied by obsolete industnal users with outside storage and environmental contamination issues and an underutilized site containing a retail facility. The re -use of the site will create 354 units of housing and 25,000 sq/ft of retail, 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 Modifications; Filing. 5.01. The Modifications are hereby approved, and shall be placed on file in the office of the City Clerk. Approval of the Modifications does not constitute approval of any project or a development agreement with any developer. 5.02. The staff of the City is authonzed to file the Modifications with the Commissioner of Revenue, the Office of the State Auditor and the County of Hennepin Auditor. Resolution No. 06-041 -3- 5.03. The staff of the City, the City's advisors and legal counsel are authorized and cted to proceed with the implementation of the Modifications and for this purpose to nego ate, draft, prepare and present to this Council for its consideration all further modifications, esolu ons, documents and contracts necessary for this purpose. Reviewe C for Administration: 1;prageMir ATTEST: Adopted by the City Council February 21, 2006 Resolution No. 06-041 -4- EXHIBIT A RESOLUTION NO. 06-041 The reasons and facts supporting the findings for the adoption of the Modification to 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 scattered site renewal and renovation district as defined in MS , Section 469 174, Subd 1 O The Distnct consists of 8 parcels, with plans to redevelop the area for housing and commercial purposes. The development will consist of approximately 154 owner occupied units, 220 rental units and 25,000 sq/ft of retail space. More than 70 percent of the area in the Distnct is occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 20 percent of the buildings in the District are structurally substandard, and more than 30 percent are requinng 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 modified area being added to the District 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 acquisition, relocation of existing businesses, demolition of all the existing structures, extensive environmental remediation and construction of 74 owner - occupied housing units and 25,000 sq/ft of retail space by Dunbar Development. 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 second and third phase of proposed development consists of approximately 58 and 22 units of owner -occupied housing respectively. The final phase proposed consists of the development of 220 apartment units. Other needs in order to make such redevelopment feasible, the developer will be required to build a storm water retention pond to address water quality and run off issues from existing surrounding uses and need to undertake street and roadway improvements. The City believes the if such public improvement costs were assessed to the affected property, the assessments together with the other extraordinary costs of demolition, relocation and environmental remediation would make redevelopment extremely unlikely (based on the City's previous expenence with similar situations). Resolution No. 06-041 -5- 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 While the property could be sold to another developer for some other use, these scenarios are not feasible in the market due to various constraints. First, industnal uses could not meet the market valuation due to the fact that they are single story in nature, lack the amenities in design and construction and are traditionally valued at a market value significantly lower than commercial uses. Second, the office market continues to be soft in the Metropolitan Area and the ability to develop this entire site for office use is unlikely The City supported this finding on the grounds that any alternative redevelopment scenario faces the same high costs of public improvements, acquisition of substandard and incompatible buildings, relocation of existing business, environmental remediation and demolition that add to the total development costs. Therefore, the City reasonably determines that no other redevelopment of similar scope is anticipated on this site without substantially similar assistance being provided to the development Therefore, the City concludes as follows: a The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is $0. 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 $129,524,810. c. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $11,280,841. (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 $118,243,969 (the amount in clause b less the amount in clause c) without tax increment assistance. 3 Finding that the Modification of 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 The Planning Commission reviewed the Modification of the TIF Plan and found that the Modification conforms to the general development plan of the City. 4 Finding that the Modification of the Tax Increment Financing Plan for the 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 contaminated parcels, preserve and enhance the tax base and provide increased life -cycle housing opportunities within the City.