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HomeMy WebLinkAbout15-116 - ADMIN Resolution - City Council - 2015/08/17RESOLUTION NO. 15-116 RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1; AND ESTABLISHING THE SHOREHAM 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 for Redevelopment Project No. 1 (the "Redevelopment Plan Modification") and establish the Shoreham Tax Increment Financing Distnct (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 1794, 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, approval of the Plans by the EDA on August 17, 2015, 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, including the redevelopment qualifications reports and planning documents, 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 City is not modifying the boundaries of Redevelopment Project No 1, but is, however, modifying the Redevelopment Plan therefor. 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 Resolution No. 15-116 -2- the development of the Project by private enterprise; and (c) 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 Shoreham Tax Increment Financing District 3.01. The Council hereby finds that the District is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469 174, Subd. 10 of the Act. 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 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 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 finding in writing, attached hereto as Exhibit A. 3.04 The St Louis Park Economic Development Authority elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd 3, clause b, which means the fiscal disparities contribution will be taken from inside the District. Section 4 Public Purpose 4.01. The adoption of the Plans 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, and will help in the preservation and enhancement of the tax base of the City and the State and promote the construction of high quality housing and commercial space, thereby serving 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 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 authorized and directed to proceed with the implementation of the Plans and to negotiate, draft, prepare and present to this Council for its consideration any further plans, resolutions, documents and contracts necessary for this purpose 5 03 The Hennepin County Resident and Real Estate Services Director 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 EDA is authorized and directed to transmit this request to the County Auditor • • kes6lutiOn No. 15-116 -37 • - insuch 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: 5.04: The Economic Development Coordinator is further authorized and directed to file y of the Plans with the Commissioner of the Minnesota' Department of Revenue and ,the Offi, - of the State Auditor pursuant to Section 469. r75, Subd. 4a-ofthe Act Rev ed f. Administration 11101nEfti F . .9., C. Attest: Ad by the City Council August 17, 2015 May Resolution No. 15-116 -4- EXHIBIT A RESOLUTION NO. 15-116 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan ("TIF Plan") for the Shoreham Tax Increment Financing District ("District"), as required pursuant to Minnesota Statutes, Section 469 175, Subdivision 3 are as follows: 1. Finding that the District is a redevelopment district as defined in Minnesota Statutes, Section 469.174, Subd. 10. The Distnct consists of five parcels, with plans to redevelop the area for rental housing. At least 70 percent of the area of the parcels in the District is occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 50 percent of the buildings in the District, 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 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 the redevelopment proposed in the TIF Plan, which meets the City's objectives for redevelopment, requires a significant investment by the developer. Due to the inclusion of affordable housing units and the high cost of redevelopment on the parcels currently occupied by substandard buildings and costs associated with their removal, environmental remediation, site improvements and utility relocation, and the cost of financing the proposed improvements, this project is feasible only through assistance, in part, from tax increment financing The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistance. 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 District permitted by the TIF Plan: This finding is justified on the grounds that the cost of demolition, soil remediation, site and public improvements and utilities result in a total redevelopment cost that is significantly higher than most developers are willing and able to finance independently Historically, redevelopment of this type of property is infeasible without tax increment assistance 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. Resolution -NO: 15-116 -5- , b. If , the, _proposed development occurs;- the fotal increase in market value will be $32,620,000. • c. The present=value of tax increments from the District for the maximum duration of the district permitted;by the TIF Plan is estimated tobe $7,311,283. 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"$22,829,517 (the amount in clause b less the."arnount in clause -c) without•tax increment assistance., 3. -Finding that the TIF Plan for the 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 TIF Plan for the 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 District will result in increased employment in the City and the State of Minnesota, the renovation and environmental remediation of substandard properties, and increased tax base of the State, and will add a high quality development to the City. In addition, through the implementation of the TIF Plan, there will be an increase in the availability of safe and decent life -cycle housing in the City.