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HomeMy WebLinkAbout12-006 - ADMIN Resolution - City Council - 2012/01/17• RESOLUTION NO. 12-006 RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1; AND ESTABLISHING OAK HILL II 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 of the St. Louis Park Economic Development Authority (the "EDA") has heretofore established Redevelopment Project No. 1 and adopted the Redevelopment Plan therefor. It has been proposed by the EDA and the City that the City adopt a Modification to the Redevelopment Plan (the "Redevelopment Plan Modification") for Redevelopment Project No. 1 (the "Project Area") and establish the Oak Hill II 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 469.090 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 EDA and City have investigated the facts relating to the Plans and have caused the Plans to be prepared. 1.03. The EDA and City have performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Plans, including, but not limited to, notification of Hennepin County and Independent School District No. 283 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Plans by the City Planning Commission on January 4, 2012, approval of the Plans by the EDA on January 17, 2012, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written 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 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 Council recognizes that, pursuant to Minnesota Statutes, Section 469.177, Subd. 3, clause b, there is a mandatory fiscal disparities contribution for the District, an economic development district. 1.06. The City is not modifying the boundaries of the Project Area, but is however, modifying the Redevelopment Plan therefor. Resolution No. 12-006 -2- Section 2. Findings for the Adoption and Approval of the Redevelopment Plan Modification. 2.01. The Council approves the Redevelopment Plan Modification, and specifically finds that: (a) the land within the Project area would not be available for redevelopment without the financial aid to be sought under this Redevelopment Plan; (b) the Redevelopment Plan, as modified, will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Project by private enterprise; and (c) that the Redevelopment Plan, as modified, conforms to the general plan for the development of the City as a whole. Section 3. Findings for the Establishment of the Oak Hill II Tax Increment Financing District. 3.01. The Council hereby finds that the District is in the public interest and is an "economic development district" under Minnesota Statutes, Section 469.174, Subd. 12 of the Act. 3.02. The Council further finds that the proposed development 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 District permitted by the Tax Increment Financing 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 redevelopment or development 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 writing, attached hereto as Exhibit A. Section 4. Findings for Use of the District to Provide Assistance Pursuant to Section 469.176, Subd. 4c(d) of the Act. 4.01. The Council further expects that the District will meet the requirements of Minnesota Statutes, Section 469.476, Subd. 4c(d) (exempting the District from manufacturing/warehouse/distribution use restrictions), because: (i) the proposed development will create or retain jobs in the State (including construction jobs), and construction of the project would not have commenced before July 1, 2012 without the assistance provided through tax increment under the TIF Plan; (ii) construction of the project will begin no later than July 1, 2012; and (iii) the City and EDA will request certification of the District by no later than June 30, 2012. • • • Resolution No. 12-006 -3- Section 5. Public Purpose. 5.01. The adoption of the Plans conforms in all respects to the requirements of the Act and will result in increased employment in the state, and will result in preservation and enhancement of the tax base of the State and thereby serves a public purpose. For the reasons described in Exhibit A, the City believes these benefits directly derive from the tax increment assistance provided under the TIF Plan. A private developer will receive only the assistance needed to make this development financially feasible. As such, any private benefits received by a developer are incidental and do not outweigh the primary public benefits. Section 6. Approval and Adoption of the Plans. 6.01. 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 Director. 6.02. The staff of the City, the City's advisors and legal counsel are authorized 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. 6.03 The Auditor of Hennepin County is requested to certify the original net tax capacity of the District, as described in the Plans, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the St. Louis Park Economic Development Authority 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 District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 6.04. The Economic Development Director is further authorized and directed to file a cop o the Plans with the Commissioner of Revenue and the Office of the State Auditor pur.uant '• Minnesota Statutes 469.175, Subd. 4a. Review d dministration City M Attest: City Clerk opted y theC' Council January 17, 2012 Mayo Resolution No. 12-006 -4- EXHIBIT A RESOLUTION NO. 12-006 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Oak Hill II Tax Increment Financing District as required pursuant to M.S., Section 469.175, Subd. 3 are as follows: 1. Finding that the Oak Hill II Tax Increment Financing District is an economic development district as defined in M.S., Section 469.1 74, Subd. 12. Oak Hill II Tax Increment Financing District is a contiguous geographic area within the City's Redevelopment Project No. 1, delineated in the TIF Plan, for the purpose of financing economic development in the City through the use of tax increment. The District is in the public interest because it will facilitate construction of an approximately 21,400 square foot office facility which will increase employment in the state, and preserve and enhance the tax base of the state. Furthermore, the assistance being provided meets the requirements for assistance under Section 469.176, subd. 4c(d) of the Act, because: • The private development to be assisted pursuant to the TIF Plan will create or retain jobs in the state, including construction jobs; • the development consists of construction of an approximately 21,400 square foot office facility in the City, and construction will commence no later than July 1, 2012; • construction of the proposed development would not have commenced before July 1, 2012, without the tax increment financing assistance to be provided pursuant to the TIF Plan; and • the City will file the request for certification of the District by June 30, 2012. 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 Oak Hill II 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: This finding is supported by the fact that for several years, the Redeveloper has desired to build an office facility on this site that meets the City's objectives for economic development, but has previously been unable to obtain financing for the project. The location of the proposed development presents several geographic challenges, which elevate costs of construction. The Redeveloper has provided the City with a pro forma and other evidence that without assistance, the Redeveloper would be unable to construct the proposed development. 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 • • • Resolution No. 12-006 -5- 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: The City supported this finding on the grounds that the cost of construction, the difficulty in obtaining financing in today's credit market, and the fact that 50% of the building will be built without a tenant make it unlikely that an office building will be constructed in the next 9 years without public assistance of some kind. The City further determines that these same challenges suggest that no other development of similar scope could reasonably be expected to occur on this site without 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 the proposed development occurs, the total increase in market value will be $3,050,600 (see Appendix D and F of the TIF Plan) 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 $404,262 (see Appendix D and F of 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 $2,646,338 (the amount in clause b less the amount in clause c) without tax increment assistance. 3. Finding that the TIF Plan for the Oak Hill II 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 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 Oak Hill II Tax Increment Financing District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of Redevelopment Project No 1 by private enterprise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, increased tax base of the State, and the development of currently vacant and underutilized land by a private business.